17-CIV-03086 REBECCA SNELL VS. PATRICIA FRANCO-BROWN, ET AL.

REBECCA SNELL PATRICK BALDWIN PATRICIA FRANCO-BROWN TIMOTHY G. MCFARLIN

DEMURRER TO DEFENDANTS AND CROSS-COMPLAINANTS PATRICIA FRANCO-BROWN AND RALPH DAVID BROWN’S SECOND AMENDED COMPLAINT

 OVERRULED. Plaintiff/Cross-Defendant Rebecca Snell’s Demurrer to the First, Second, and Third Causes of Action in the Second Amended Cross-Complaint of Patricia and Ralph Brown is Overruled. Ms. Snell to file and serve her Answer to Second Amended CrossComplaint no later than April 25, 2018.

 This case arises from a rather unusual dispute over some allegedly missing bars of gold. The pleadings allege:

May 2016: Snell and the Browns entered into an oral agreement: o Snell to lend the Browns $1.0 million dollars for a home purchase. o Browns tender 49 gold bars (value: $2 million) to Snell as security o Loan to be repaid on or before May 9, 2017.

August 2016: An alarm for the safe went off on or around 1:00 a.m., indicating that the safe had been opened. An alarm sounded about 7 minutes later, indicating that the safe had been closed. Later that day, Snell discovered the gold bars were missing. Snell claims she was not home at the time of the alarms, but her son was home and did not notice anything suspicious.  Snell then filed the Complaint in this action against the Browns alleging breach of contract, fraud and other claims. In response, the Browns filed a Cross-Complaint against, alleging fraud, breach of contract, and various related torts.
 Demurrer to the first and second causes of action are overruled. The cross-complaint alleges the facts of misrepresentation with sufficient factual specificity. The allegation that Snell represented that she would loan $1.0 million in exchange for nearly $2.0 million in gold (Opposing P&A at 5:26-27) is not an allegation of misrepresentation, since Snell eventually did loan the money in exchange for the collateral. The allegation Snell represented that the Browns could trust her with the gold (Oppos. P&A at 5:26 – 6:2) could be tantamount to a representation that Snell would keep the gold safe, which is a statement that could
April 4, 2018 Law and Motion Calendar form the basis of a claim for misrepresentation. Finally, the statement that Snell would use personal contacts to help sell the gold is an allegation of a promise without intent to perform.

 Demurrer to the third cause of action is overruled. The crosscomplaint does not allege that “safeguarding” the gold was a contract term, but it does allege that Snell was to “keep (the gold) in her possession, custody and control, until such time as the gold could be sold and the Loan was repaid.” (SACC para. 19 & 44.) The allegation that Snell failed to safeguard the gold is an allegation that she breached the agreement to keep the gold in her possession and control until it could be sold. Snell’s alleged failure to perform, if proven, could constitute either an excuse for the Browns’ nonperformance or a failure of consideration.  The allegations in the third cause of action are not a sham. The allegations are not inconsistent or contradictory. The previous pleading alleged “until the Loan was repaid” (Original CC para. 19) whereas the present pleading alleges “until such time as the gold could be sold and Loan repaid.” (SACC para 19.) The second allegation is consistent, but specifies the manner in which the loan would be repaid