Filed 8/31/18 Dierenfield v. Commonwealth Land Title Co. CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

DENNIS DIERENFIELD et al.,

Plaintiffs and Appellants,

v.

COMMONWEALTH LAND TITLE COMPANY et al.,

Defendants and Respondents.

D072541

(Super. Ct. No. 37-2016-00037839- CU-BC-CTL)

APPEAL from a judgment of the Superior Court of San Diego County,

Timothy B. Taylor, Judge. Affirmed.

Catanzarite Law Corporation, Kenneth J. Catanzarite, Eric V. Anderton and Tim James O’keefe for Plaintiffs and Appellants.

Hahn Loeser & Parks and Michael J. Gleason for Defendants and Respondents.

This case involves alleged wrongdoing by escrow companies and a title insurer dating back to 2006 in connection with a purchase of about a 1,000,000 square-foot office building located on Market Street in Philadelphia, Pennsylvania (subject property). Plaintiffs Dennis Dierenfield, William B. Gilmer, Tye Wynfield, and NNN 1818 Market Street 13, LLC (TIC 13), on behalf of themselves and all others similarly situated (collectively, plaintiffs), appeal the judgment after the trial court sustained without leave to amend the demurrer of defendants Commonwealth Land Title Company (CLT), Commonwealth Land Title Insurance Company (CLTI), and Ticor Title Company of California (Ticor) (collectively, defendants) to plaintiffs’ first amended complaint (FAC). The court ruled that all 11 causes of action in the FAC were barred by the applicable statutes of limitations and that the delayed discovery rule did not apply because at a minimum, plaintiffs were on inquiry notice with respect to the wrongdoing alleged in the FAC when escrow closed in February 2006. Affirmed.

PROCEDURAL OVERVIEW

Plaintiffs filed their initial complaint in October 2016. Like the FAC, their initial complaint asserted 11 causes of action against defendants, who “acted as [p]laintiffs’ escrow agents and title company in the acquisition of the Property as alleged directly from [the nonparty seller, 1818 Market-VEF II, LLC, a Georgia limited liability company (nonparty seller)] involving total credits in excess of $179,800,000[,] which ‘Closing’ . . . was administered from offices located in San Diego County California.” “Among other wrongdoing, plaintiffs [in their initial complaint] accuse[d] the defendants of [accepting] undisclosed ‘kickbacks,’ breach of escrow instructions, and combining to increase the ‘leverage to 91% not the 73% reflected[,] . . . as well as the payment of $5,904,000 of commissions to an unlicensed real estate broker, $4,584,000 of which was without any escrow instruction.’ ”

The unlicensed real estate broker was identified as Triple Net Properties Realty, Inc. (Triple Net Realty), a California corporation and an affiliate of Triple Net Properties, LLC, the manager of the subject property.

As also was the case with respect to the FAC, defendants demurred on several grounds to, and sought to strike “extensive portions” of, the initial complaint. In connection with their demurrer, defendants requested the court take judicial notice (RJN) of seven exhibits:

“Exhibit 1: November 25, 2014 Class Action Complaint filed in NNN 1818 Market Street 13, LLC et al. v. Daymark Properties Realty, Inc., et al., San Diego County Superior Court, Case No. 37-2014-00040421-CU-FR-CTL, along with Exhibit B attached to the Class Action Complaint. The action was filed by the same counsel representing Plaintiffs in th[e instant] action. Exhibit B of the Class Action Complaint is the Private Placement Memorandum for the purchase of 1818 Market Street (i.e., the same real property transaction at issue here).

“Exhibit 2: Certified License History for Daymark Properties Realty, Inc. formerly licensed as Triple Net Properties Realty, Inc., from the State of California’s Bureau of Real Estate.

“Exhibit 3: December 17, 2014 Class Action Complaint filed in NNN 1818 Market Street 13, LLC, et al. v. Commonwealth Land Title Company, San Diego County Superior Court, Case No. 37-2014-00042609-CU-FR-CTL. The action was filed by the same counsel representing Plaintiffs in th[e instant] action.

“Exhibit 4: March 18, 2015 Ex Parte Application filed in NNN 1818 Market Street 13, LLC, et al. v. Commonwealth Land Title Company, San Diego County Superior Court, Case No. 37-2014-00042609-CU-FR-CTL. Exhibit A of the Ex Parte Application is a declaration from Plaintiffs’ counsel in th[e instant] action . . . .

“Exhibit 5: April 1, 2015 Minute Order from NNN 1818 Market Street 13, LLC, et al. v. Commonwealth Land Title Company, San Diego County Superior Court, Case No. 3702014-00042609-CU-FR-CTL.

“Exhibit 6: April 28, 2016 Complaint filed in Dierenfield, et al. v. Commonwealth Land Title Company, United States District Court for the Central District of California, Case No. 8:16-cv-00799-RGK-JC.

“Exhibit 7: August 1, 2016 Minute Order from Dierenfield, et al. v. Commonwealth Land Title Company, United States District Court for the Central District of California, Case No. 8:16-cv-00799-RGK-JC.”

Following a February 2017 hearing, the court sustained the demurrer with leave to amend, ruling all 11 causes of action were “time-barred because plaintiffs had ‘failed to sufficiently plead facts supporting a theory of delayed discovery.’ ” In so doing, the court took judicial notice of all seven exhibits pursuant to Evidence Code sections 452 and 453.

In response to the court’s ruling, plaintiffs in late February 2017 filed their FAC, which the court noted pleaded the “same 11 counts as the [initial] complaint.” Defendants again demurred to, and moved to strike portions of, the FAC. In connection with their demurrer, defendants also requested the court take judicial notice of the previous seven exhibits and an eighth exhibit, the court’s February 3, 2017 minute order sustaining the demurrer to the initial complaint with leave to amend.

The court, after hearing “detailed, thoughtful and vigorous argument,” sustained the demurrer to the FAC without leave to amend on all 11 causes of action. In so doing, the court ruled that all causes of action were time-barred: “The counts accrued in February of 2006, when escrow closed (FAC, paragraph 1), yet plaintiffs filed this action more than 10 years later, in October of 2016. [Citation.] The counts in the FAC are subject to the 2, 3, and 4-year statutes of limitations, and are time-barred. [Citations.]

“However, the FAC pleads that plaintiffs did not discover and could not have discovered defendants’ alleged wrongdoing until October 31, 2014, despite reasonable diligence and investigation. See FAC, paragraphs 62-67. ‘[A] plaintiff invoking the discovery rule (as the FAC) must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence. The burden is on the plaintiff to show diligence and conclusory allegations will not withstand demurrer.’ E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1307, 1324 [(E-Fab)].

“The allegation that plaintiffs did not and could not have discovered defendants’ alleged wrongdoing until October 31, 2014, despite reasonable diligence and investigation, is a conclusion. No facts are alleged in the FAC that show an inability to have made an earlier discovery of defendants’ alleged wrongdoing despite reasonable diligence and investigation. At the hearing, plaintiffs failed to proffer specific facts that show an inability to have made an earlier discovery despite reasonable diligence and investigation.

“Also, the claim of delayed discovery is belied by the documents public[ly] recorded in 2006. The instruments securing the Wells Fargo loan[, referred to as Loan 3] were public[ly] recorded on February 24, 2006. See FAC, Ex. E. Triple Net [Realty]’s license status in Pennsylvania was public[ly] available in 2006. See FAC, Ex. D. The deed of trust identifying a higher purchase price than reflected in the Private Placement Memorandum (PPM) was recorded on February 24, 2006. See FAC, Ex. A. The FAC does not allege facts that excuse plaintiffs’ failure to check out these public[ly] recorded records earlier than October 31, 2014. [Citation.]

“[¶] . . . [¶]

“Further, the claim of delayed discovery is belied by the documents that plaintiffs possessed that indicated alleged wrongdoings in February of 2006 and placed plaintiffs on notice (or at least inquiry notice) of the alleged wrongdoings at that time. For instance, plaintiffs received the PPM that disclosed in several instances that commissions in the amounts about which plaintiffs complain were to be paid out of the purchase price to Triple Net [Realty]. [Citation.] Also, for instance, the PPM states in bold font, ‘Commission. The [nonparty] Seller will pay Triple Net [Realty]. . . an approximately $4,584,000 commission at settlement for arranging the purchase of the Property.’ [Citation.] Further, for instance, the PPM identified an additional ‘bridge loan that could be the Wells Fargo loan. [Citation.] . . . The FAC fails to plead facts why documents that plaintiffs possessed that indicated defendants’ alleged wrongdoings in February of 2006 did not place plaintiffs on notice (or at least inquiry notice) of the alleged wrongdoings in 2006, despite reasonable diligence and investigation.

“Moreover, as to the alleged improper payments to the promoter and the over-encumbrance of the [subject] property, the FAC does not allege that plaintiffs could not have discovered these matters through reasonable diligence and investigation. The alleged improper payments are in the nature of defendants not returning escrow deposit returns and refunds to plaintiffs as the buyers of the property, and instead giving the funds to the promoter of the property [i.e., Triple Net Properties, LLC (Triple Net Properties)]. See FAC, paragraphs 72, 84. Thus, when escrow closed in February of 2006, plaintiffs should have had a suspicion that something was wrong, since as purchasers of the [subject] property, they allegedly did not receive the returns and refunds. As such, as of the close of escrow (in February of 2006), plaintiffs had a duty to investigate any wrongdoing regarding improper payments to the promoter. And as for the Wells Fargo loan, the instruments securing the loan were recorded on February 24, 2006 [citation], so any alleged wrongdoing regarding over-encumbrance could have been discovered through a reasonably diligent investigation. The FAC does not allege that plaintiffs could not have discovered these matters (improper payments to the promoter and over-encumbrance of the [subject] property) through reasonable diligence and investigation.”

The court in its ruling also noted that the instant case was one of a series of unsuccessful cases filed by plaintiffs’ counsel “attempting to hold escrow and title companies liable for decade-old failed commercial real estate investments.” The court noted these cases “did not survive the demurrer stage; the demurrer rulings were affirmed on appeal. E.g., WA Southwest 2, LLC v. First American Title Insurance Company (2015) 240 Cal.App.4th 148, 156–158 [(WA Southwest 2)] (the plaintiffs alleged that they were misled regarding fees, expenses, and commissions paid as part of the initial investment; the PPM provided to plaintiffs before their investments disclosed the fees, expenses, and commissions that would be paid out of their investments and informed plaintiffs the investments were ‘highly speculative’ and involved ‘significant risks’; the delayed discovery rule did not apply); and Stella v. Asset Management Consultants, Inc. (2017) 8 Cal.App.5th 181, 192–193 (the ‘clear and specific statements in the private placement memoranda’ that detailed the complaint about brokerage fees put the plaintiff ‘on notice that further inquiry was necessary.’)”

The court denied plaintiffs’ request for leave to amend their FAC. The court noted the liberal policy in favor of allowing amendment following the sustaining of a demurrer. However, it noted plaintiffs failed to show in what manner they could amend the FAC and how the amendment would change the legal effect of the pleading. The court further noted plaintiffs were represented by “experienced, sophisticated counsel who has now had two pleadings opportunities . . . and ample time to research and present a viable claim.”

Finally, based on its sustaining the demurrer without leave to amend as to all causes of action, the court found defendants’ motion to strike moot. The court nonetheless went on to note that the FAC failed to plead facts to support an award of punitive damages, a basis for an award of attorney fees under statute or contract, and facts to support injunctive relief.

FACTS

It is axiomatic that a “demurrer tests the legal sufficiency of the complaint.” (Hernandez v. City of Pomona (1996) 49 Cal.App.4th 1492, 1497.) In analyzing the FAC, we “accept the truth of material facts properly pleaded in the operative complaint, but not contentions, deductions, or conclusions of fact or law. We may also consider matters subject to judicial notice. [Citation.]” (Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 924 (Yvanova).) To the “extent the factual allegations conflict with the content of the exhibits to the complaint [or matters judicially noticed], we rely on and accept as true the contents of the exhibits” and ignore the conflicting allegations. (Barnett v. Fireman’s Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505 (Barnett).) With these principles in mind, we turn to the FAC.

The FAC alleges that nominal defendant NNN 1818 Market Street, LLC (TIC 0) purchased the subject property directly from nonparty seller (i.e., 1818 Market-VEF II, LLC, a Georgia limited liability company) and TIC 0, in turn, then sold ownership interests to certain plaintiffs as tenants in common. Other plaintiffs purchased “membership interests” in TIC 13, which entity then purchased an interest in the subject property from TIC 0 as a tenant in common. (FAC, ¶¶ 1, 55.)

Plaintiff Dierenfield invested $1,195,000 and acquired (through TIC 0) a 2.5 percent interest in the subject property as a tenant in common, which interest was held by a Delaware limited liability company, as required by lender. Plaintiff Gilmer invested $965,000 and acquired a 2.0 percent interest in the subject property as a tenant in common. Gilmer’s interest was held by a separate Delaware limited liability company, as also required by the lender. (FAC, ¶ 9.) In total, there were 24 limited liability companies (LLCs) who owned as tenants in common. (FAC, Ex. A, p. 7.) Unlike Dierenfield and Gilmer, plaintiff Wynfield paid $25,000 to TIC 13 and acquired five “LLC units” out of a maximum offering of 9,650 units, or a .0523 percent interest in the subject property. (FAC, ¶¶ 1, 11.)

The PPM — the December 16, 2005 Confidential Private Placement Memorandum of TIC 0, which was attached to exhibit 1 in the RJN, provided in bolded capital letters that the “Purchase of the LLC units and [Tenants in Common] interests is suitable only for persons of substantial means who have no need for liquidity in their investment.”

In a section titled “Who may invest,” the PPM reiterated that the investment in the LLC units and tenants in common interests involved a “high degree of risk” and was “suitable only for persons of substantial financial means.” It further provided a person should only invest if he or she “can bear, and is willing to accept, the economic risk of losing his [or her] entire investment in the LLC units or [Tenants in Common] Interests” and directed the investor to a section of the PPM titled “Risk Factors.”

The “Risk Factors” section of the PPM was about 20-pages long. In bolded capital letters this section initially provided: “Investors should be aware that an investment in LLC units is speculative and involves a high degree of risk. Investors should carefully read this memorandum . . . prior to making an investment and should be able to bear the complete loss of their investment.” (Emphasis omitted.) This section then went on to list myriad potential risks of the investment, including, by way of example only, real estate risks such as: the expiration of long-term tenants’ leases; early termination options in leases, which comprised about 20 percent of the tenants; the high vacancy rate in the submarket of Philadelphia, which was disclosed to be about 12.7 percent and which had “resulted in aggressive competition for new and renewal tenants and leasing concessions being offered on renewals and new leases”; increased real estate taxes based on a reassessment of the subject property as a result of the sale of said property; the “softness” in the Philadelphia and national economy, which could “materially and adversely impact the tenants in the Property and their business operations,” which also could cause tenants to “suffer a serious economic setback” and prevent them from paying their rent under their leases; among many other real estate risks.

The “Risk Factor” section listed other types of risks including “tax risks,” “management risks” and risks to the tenants in common. As to the latter category, by way of example only, the PPM identified risks such as defaults and/or bankruptcy by one or more tenants in common; acquisition of the subject property “with limited representations and warranties from the [nonparty s]eller regarding the condition of the Property, the status of leases, the presence of hazardous substances, the status of governmental approvals and entitlements and other significant matters affecting the use, ownership and enjoyment of the Property.”

As noted, Triple Net Properties was the manager and promoter of the investment in, and Triple Net Realty was the property manager of, the subject property. NNN Capital Corp., a California corporation, was the managing broker-dealer. Triple Net Properties and its affiliates were responsible for the solicitation and marketing of the investment in the subject property, including the preparation of the PPM.

The FAC alleged that CLT and Ticor provided escrow services, and CLTI provided title insurance and escrow services, to plaintiffs in connection with their purchase of the subject property. (FAC, ¶¶ 13, 14.) Escrow was administered by defendants from offices located in San Diego County. (Id. ¶ 2.)

Plaintiffs in their FAC summarized the basis of their claims against defendants as follows: “The claims herein concern, among others, breach of the escrow instructions by wrongful payment and application of Plaintiffs’ Deposits and loan funds to acquire the Property via radically increased leverage of 93%, as well as the payment of $5,904,000 of commissions to an unlicensed real estate broker, $4,584,000 of which was without any escrow instruction.” (FAC, ¶ 4.) The FAC specifically alleged that defendants wrongfully paid these commissions to Triple Net Realty, an entity that at all times relevant was a licensed real estate broker in California but not in Pennsylvania. (Id., ¶¶ 4, 62(e).)

Pursuant to the “Purchase Agreement and Escrow Instructions” (escrow instructions) that were attached as an exhibit to the FAC, plaintiffs (other than those that acquired LLC units) were required to pay their proportionate share of $47,800,000 as an “equity contribution” and were obligated to $132,000,000 of debt for a majority ownership of the subject property. The escrow instructions further provided that the balance of the purchase price to acquire the subject property, 35.07 percent, required an equity contribution of $16,763,460 and an assumption of debt of $46,294,400, which was to be paid by the remaining plaintiffs that owned LLC units, for a total 100 percent ownership. (FAC, ¶¶ 11, 56.)

The escrow instructions acknowledged that plaintiffs (other than those that acquired LLC units) “had the benefit of a ‘condition precedent’ that the purchase of the TIC Interest in the Property would qualify as [an Internal Revenue Code] Section 1031 tax deferred exchange [(section 1031)], meaning that delivery of the [d]eed was a requirement for the like-kind exchange.” (FAC, ¶ 57.)

Plaintiffs alleged in the FAC that it was not until October 31, 2014 when they discovered facts that put them on notice of the alleged wrongdoing by defendants. (FAC, ¶ 62.) Specifically, they alleged they did not know until this date that “(1) ‘Plaintiffs’ Deposits’ . . . were being used in an atypical escrow contrary to the [escrow i]nstructions for the unauthorized purchase of the Property with leverage of 93% not 73%, (2) the unauthorized $9,630,000 [Wells Fargo] Loan 3 signed only by [the Delaware limited liability company that held the LLC units] but secured by Plaintiffs’ purchase equity in the Property, both increased leverage on the purchase and facilitated kickback payments, and/or (3) Triple Net [Realty] . . ., licensed in California, was not as required, licensed in Pennsylvania as a real estate broker on February 21, 2006, all of which increased the risk of loss contributing to Plaintiffs’ harm as described [in the FAC].” (Id., ¶ 63.)

Based on our independent review of the FAC, the exhibits attached thereto and incorporated by reference, matters judicially noticed, and the parties’ briefing, we agree with the trial court’s assessment that the essence of the wrongdoing in plaintiffs’ 11 causes of action in the FAC are that defendants: (1) wrongfully paid commissions to Triple Net Realty, who plaintiffs claimed was not a licensed real estate broker in Pennsylvania in February 2006, when escrow closed; (2) paid escrow deposit returns and refunds to Triple Net Properties, the promoter, rather than to plaintiffs; and (3) allowed the subject property to be over-encumbered by an undisclosed Wells Fargo loan (i.e., Loan 3). (FAC, ¶¶ 4, 62(e), 72 & 84.)

DISCUSSION

A. Guiding Principles

The parties agree that the applicable statutes of limitations in this case range from two to four years. The claims against one or more of defendants have the following limitations periods (in the order presented in the FAC, omitting claims only against Wells Fargo): breach of escrow contract — four years (Code Civ. Proc., § 337(1); first cause of action); breach of implied contract — two years (id., § 339(1), second cause of action (and so forth)); breach of statutory duties — three years (id., § 338, subd. (a)); breach of fiduciary duty — three or four years (see American Master Lease LLC v. Idanta Partners, Ltd. (2014) 225 Cal.App.4th 1451, 1479 [noting the limitations period for breach of fiduciary duty “is three years or four years, depending on whether the breach is fraudulent or nonfraudulent”]); constructive fraud — three years (Code Civ. Proc., § 338, subd. (d)); negligence — two years (id., § 339(1)); breach of title policy — two years (ibid.); estoppel/promissory estoppel — two years (ibid.); and unfair business practices — four years (Bus. & Prof. Code, § 17208).

We review de novo the ruling on a demurrer and independently determine whether the FAC alleges facts sufficient to state any cause of action. (See Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 111 (Fremont).) We review the trial court’s decision to deny leave to amend for an abuse of discretion. (Freeny v. City of San Buenaventura (2013) 216 Cal.App.4th 1333, 1339 (Freeny).)

When a complaint fails to allege facts sufficient to state a cause of action and the trial court has sustained a demurrer without leave to amend, such as in the instant case, “we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318 (Blank).)

As noted, plaintiffs purchased their interests in the subject property in February 2006. Plaintiffs did not file their initial complaint until October 2016, or more than 10 years after they purchased their interests. Plaintiffs thus rely on the delayed discovery doctrine to postpone the accrual of the various statutes of limitations.

“California law recognizes a general, rebuttable presumption, that plaintiffs have ‘knowledge of the wrongful cause of an injury.’ (Fox [v. Ethicon Endo-Surgery, Inc. (2005)] 35 Cal.4th [797,] 808 [(Fox)].) In order to rebut that presumption, ‘ “[a] plaintiff whose complaint shows on its face that his [or her] claim would be barred without the benefit of the discovery rule must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.” [Citation.] In assessing the sufficiency of the allegations of delayed discovery, the court places the burden on the plaintiff to “show diligence”; “conclusory allegations will not withstand demurrer.” [Citation.]” ‘ ” (Grisham v. Philip Morris U.S.A., Inc. (2007) 40 Cal.4th 623, 638 (Grisham); see McKelvey v. Boeing North American, Inc. (1999) 74 Cal.App.4th 151, 160 [noting that, by relying on the

” ‘discovery rule,’ plaintiffs concede by implication that, without it, their claims are barred by one or more statutes of limitations”].)

When a plaintiff reasonably should have discovered facts for purposes of the accrual of a cause of action or application of the delayed discovery rule is generally a question of fact, properly decided as a matter of law only if the evidence (or, in this case, the allegations in the complaint and facts properly subject to judicial notice) can support only one reasonable conclusion. (See Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1112; Broberg v. The Guardian Life Ins. Co. of America (2009) 171 Cal.App.4th 912, 921.) As we explain, that is the case here.

B. Commissions and Fees Paid to Triple Net Realty

Plaintiffs in their FAC allege that, because Triple Net Realty was not a licensed real estate broker under Pennsylvania law when escrow closed (FAC, ¶ 88), defendants CLT and CLTI “had the duty not to pay such commissions as well as the duty to communicate any facts learned about the lack of a real estate broker’s license because of the duty to obtain the required evidence of licensure prior to payment of compensation from escrow.” (FAC, ¶ 89, italics added.) Plaintiffs further allege defendant Ticor breached the escrow instructions by making the $4,584,000 payment to Triple Net Realty.

Assuming, without deciding, that plaintiffs even have standing to challenge the payment of the commission and escrow fee to Triple Net Reality (which was paid by nonparty seller and not defendants), we disregard as mere “contentions, deductions, or conclusions of fact or law” (see Yvanova, supra, 62 Cal.4th at p. 924) plaintiffs’ allegations in the FAC that defendants CLT and CLTI, by allegedly “accept[ing] the benefits” of the Ticor escrow instructions when these two entities received certain deposits from Ticor, thereby allegedly “consented to the obligations imposed” by said instructions when neither CLT nor CLTI was a party to said instructions.

Moreover, we also disregard the allegations in the FAC that defendants CLT and CLTI owed a duty to ensure proper licensure of property manager Triple Net Realty before any commission was paid to this entity. Such allegations are mere conclusions of law and are not properly pleaded facts for purposes of determining the sufficiency of the FAC. (See Yvanova, supra, 62 Cal.4th at p. 924.) We thus independently conclude the allegations that CLT and CLTI engaged in wrongdoing in connection with the payment of the commission to Triple Net Realty are insufficient to state any cause of action. (See Fremont, supra, 148 Cal.App.4th at p. 97.)

In addition, we note defendants’ duties in the instant case were grounded in contract. The FAC alleged defendants provided escrow services in accordance with the escrow instructions and with respect to defendant CLTI only, title insurance. And these duties were not unlimited.

Indeed, section 8.1 of the escrow instructions, titled “Interpretation,” provided in relevant part, “This [purchase and escrow a]greement together with the other Transaction Documents contain the entire agreement between the parties relating to the transactions contemplated hereby, and all prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged herein.” (Italics added.) Section 8.2 of the instructions also provided, “No modification, waiver, amendment, discharge or change of this [purchase and escrow a]greement shall be valid unless the same is in writing and signed by the party against which the enforcement thereof is or may be sought.”

We note the general rule that a “person may not ordinarily recover in tort for the breach of duties that merely restate contractual obligations. Instead, ‘ “[c]ourts will generally enforce the breach of a contractual promise through contract law, except when the actions that constitute the breach violate a social policy that merits the imposition of tort remedies.” ‘ [Citations.]” (Aas v. Superior Court (2000) 24 Cal.4th 627, 643 (Aas), superseded by statute on another ground as set out in Rosen v. State Farm General Ins. Co. (2003) 30 Cal.4th 1070, 1079–1080.)

Thus, we also disregard as mere “contentions, deductions, or conclusions of fact or law” (see Yvanova, supra, 62 Cal.4th at p. 924) the allegations in the FAC that seek to impose duties on defendants that were not grounded in contract, including the allegation that defendants owed plaintiffs a duty to investigate the licensure status of Triple Net Realty in 2006. (See Aas, supra, 24 Cal.4th at p. 643.) Because we have found no evidence in the record that defendants were contractually obligated to investigate this entity, and because plaintiffs have provided no such evidence, we separately conclude plaintiffs’ FAC fails to state any cause of action against defendants based on their alleged wrongdoing for their failure to investigate Triple Net Realty.

Further, as to defendant Ticor, the escrow instructions that were part of the RJN included a section titled “Buyer Representations and Warranties.” Subsection 7.1 of this section stated: “No Concern of Escrow Agent. Escrow Agent shall have no concern with, or liability or responsibility for, this Section.” Subsections 7.2 and 7.3 respectively provided the subject property was being purchased “as-is” and TIC 0 was providing no representations concerning “tax matters.”

Subsection 7.4, directly relevant on this issue, provided: “Commissions. The parties mutually warrant and covenant that, other than commissions and fees described in the [Tenant in Common Interests in 1818 Market Street] Addendum and the Memorandum [i.e., the PPM, as defined], . . . no brokerage commissions, finder’s fees or similar commissions or fees shall be due or payable on account of this

transaction. . . .”

Thus, despite plaintiffs’ (conclusory) allegations to the contrary, the escrow instructions expressly provided that Ticor had no “liability or responsibility” in connection with the distribution of the repeatedly disclosed commission paid to Triple Net Realty. We independently conclude plaintiffs cannot state any valid cause of action against Ticor based on its payment of the commission to Triple Net Realty. (See Aas, supra, 24 Cal.4th at p. 643; Fremont, supra, 148 Cal.App.4th at p. 97.)

Finally, we reject plaintiffs’ contention that, until October 31, 2014, they had no reasonable suspicion that Triple Net Realty was not licensed as a real estate broker in Pennsylvania when it was paid a commission and a loan fee in February 2006.

Documents included in the RJN show that Triple Net Realty’s successor in interest was Daymark Properties Realty, Inc. (Daymark Realty); that the merger between these two entities took place in 2007; and that Daymark Realty was the subject of a November 2014 class action lawsuit brought by plaintiffs’ counsel herein. This lawsuit asserted 16 causes of action on behalf of one or more, if not all, of the same parties who are plaintiffs in the instant case, involving the same subject property. (See NNN 1818 Market Street 13, LLC et al v. Daymark Properties Realty, Inc., et al., San Diego County Superior Court, case No. 37-2014-00040421-CU-FR-CTL (November 2014 lawsuit). Plaintiffs in the November 2014 lawsuit sought a refund “in excess of $16,000,000” from Daymark Realty in part because Triple Net Realty had been paid $4,584,000 as a commission and $1,320,000 as the “loan broker” in connection with the sale of the subject property.

In the first cause of action for violation of various sections of the Corporations Code, the November 2014 lawsuit alleged that “DAYMARK REALTY, then named Triple Net [Realty,] had committed fraud against [third parties] the Met Center Tenants in Common (the ‘Fraud Termination Judgment’) as follows: [¶] After reaching the settlement, [Daymark Realty and another party] affirmatively misrepresented the amount of the settlement to the TICs [i.e., tenants in common] and failed to disclose that over $1,500,000 of the settlement proceeds were in fact allocated to buildings other that the Property. This misallocation of funds on the part of [Daymark Realty] constituted both fraud and willful breach as those terms are used in Paragraph 10.2 of the [m]anagement [a]greement.”

The November 2014 lawsuit further alleged that the management agreement in its case — which is also the agreement at issue in the instant appeal — contained the “same language” as the agreement in the “Met Center” litigation; that under 10.2, each of the tenants in common had the right to terminate for cause the property manager, Triple Net Realty/Daymark Realty, based on fraud or other “willful misconduct”; and that as a result of the fraud termination judgment, “Daymark Realty had . . . an affirmative obligation of disclosure” of such judgment.

The plaintiffs in the November 2014 lawsuit also alleged “had . . . they been informed of the Fraud Termination Judgment in December of 2010[,] that the[ir own management agreement] would have been terminated at of the end of 2010. In fact, Plaintiffs attempted to terminate Daymark Realty for cause at this very same time in 2010 but Daymark Realty, with full knowledge of the Fraud Termination Judgment and without disclosing the same[,] took the very same position that it had lost on in the confirmed arbitration award arguing that it could not be terminated until a replacement manager had been selected and approved by the lender.” (Italics added.)

The November 2014 lawsuit additionally alleged that various defendants related to Daymark Realty discovered “during the course of their due diligence” in or about 2011 that “the lack of a Pennsylvania real estate broker’s license put at issue and required disclosure to Plaintiffs and the Class for refund and recovery of commissions and fees paid, the same was actually known as of July 2012. At that time Daymark Realty’s lack of a Pennsylvania licensing issue was raised when an unrelated tenant in common concerning another Pennsylvania property commenced a case in the Los Angeles County Superior Court Case No. BC487576 styled Willowbrook Apartments, LLC, et al. v. Daymark Realty Advisors, Inc, Daymark Properties Realty, Inc. et al. concerning a 298,371 square foot office complex located at 300 Conshohocken State Road, West Conshohocken, Pennsylvania. As such[, various defendants including Daymark Realty] were on notice at the latest as of July 2012 that over $16 million in compensation that had been paid to Daymark Realty was subject to refund and recovery by the Plaintiffs and Class and required disclosures by the TIC’s Property Manager as their fiduciary.” The November 2014 lawsuit incorporated by reference these same allegations involving Triple Net Realty/Daymark Realty into other causes of action in that case including for breach of fiduciary duty and fraud.

These documents show that plaintiffs in December 2010 sought to terminate the management agreement of Daymark Realty (formerly known as Triple Net Realty); that others who in plaintiffs’ own words did their “due diligence” in connection with their investigation of this entity discovered in July 2012 that Triple Net Realty had not been licensed as a real estate broker when it was paid the commission and loan fee in 2006; and that, holding plaintiffs herein to this same “due diligence” requirement, they likewise should have discovered the licensure issue in December 2010 when they sought to terminate the management agreement of Daymark Realty or, at the latest, in July 2012 when others similarly situated to plaintiffs learned about this issue and brought an action in Los Angeles County Superior Court. (See Barnett, supra, 90 Cal.App.4th at p. 505 [noting to the “extent the factual allegations conflict with the content of the exhibits to the complaint, we rely on and accept as true the contents of the exhibits” and ignore the conflicting allegations].)

Under either scenario, we conclude plaintiffs as a matter of law cannot state any cause of action based on this particular alleged wrongdoing by defendants because they were on inquiry notice of the licensing issue in July 2012, at the latest, or more than four years — the longest applicable statute of limitations — before they filed their initial complaint. (See Fox, supra, 35 Cal.4th at pp. 807–808.)

But there’s more. The documents in the RJN further show that plaintiffs’ counsel herein filed in mid-December 2014 a class action lawsuit against CLT alleging six causes of action on behalf of one or more of the same plaintiffs who are named in the instant case, which involved the same subject property and asserted claims based on “the wrongful payment of $5,904,000 of commissions to an unlicensed real estate broker from Plaintiffs’ funds in Escrow.” Titled NNN 1818 Market Street 13, LLC et al v. Commonwealth Land Title Company, San Diego County Superior Court, case No. 37-2014-00042609-CU-FR-CTL (December 2014 lawsuit), this lawsuit alleged the plaintiffs’ claims were “timely because it . . . was not discovered that Triple Net Properties Realty, Inc. was not licensed in Pennsylvania at the time the above described commissions and fees were paid until June of 2014 when a separate investigation was conducted incident to an action brought by Daymark Properties Realty, Inc. f.k.a. [i.e., formerly known as] Triple Net Properties Realty, Inc. whereupon the lack of licensure was first discovered.” (Italics added.) The December 2014 lawsuit, like the one filed about a month earlier, sought the return of the allegedly unauthorized commission payment and the loan fee paid to Triple Net Realty in connection with the sale of the subject property.

Plaintiffs Dierenfield, Gilmer, Wynfield, and TIC 13 in late April 2016 filed yet another class action complaint against CLT, this time in the Central District of California, case No. SA CV16-cv-00799 RGK (JCx). In this federal lawsuit, the plaintiffs therein asserted claims for the “wrongful payment of $5,904,000 of commissions to an unlicensed real estate broker from Plaintiffs’ funds in Escrow . . . .” The plaintiffs in this federal lawsuit averred their claims were timely because they did not discover Triple Net Realty “was not licensed in Pennsylvania at the time the above commissions and fees were paid until June of 2014 . . . .” (Italics added.)

In response to defendants’ motion to dismiss, the district court in August 2016 dismissed the action for lack of subject matter jurisdiction, ruling the uncontroverted evidence from the PPM showed that the $4,584,000 commission, which was the subject of the action, was paid by nonparty seller, not the plaintiffs, and thus, that plaintiffs could not show an amount in controversy of $5 million.

The record therefore shows plaintiffs in two different lawsuits involving the same licensure issue in connection with the same subject property alleged they discovered Daymark Realty/Triple Net Realty’s lack of a Pennsylvania real estate license four months earlier than the FAC at issue in the instant case. (See Barnett, supra, 90 Cal.App.4th at p. 505.) The inconsistency in these various pleadings reinforces our view that plaintiffs’ allegations in the FAC regarding the discovery of this alleged harm are conclusory at best and are, in any event, without regard to the due diligence required to invoke the delayed discovery doctrine. (See Fox, supra, 35 Cal.4th at pp. 807–808 [noting a plaintiff relying on the discovery rule to delay accrual must plead facts showing the inability to have made earlier discovery despite reasonable diligence]; Parsons v. Tickner (1995) 31 Cal.App.4th 1513, 1525 [interpreting the statute of limitations in Code Civ. Proc. § 338, subd. (d) to require a plaintiff to exercise diligence to discover the facts of the wrongdoing and noting whether a plaintiff actually exercises such diligence is not determinative because under such circumstances, ” ‘constructive and presumed notice or knowledge are equivalent to knowledge’ “].)

Plaintiffs nonetheless rely on E-Fab, supra, 153 Cal.App.4th 1308 to argue the allegations in the FAC were sufficient to satisfy the delayed discovery doctrine in the instant case. We find this argument unavailing.

In E-Fab, plaintiff company sued defendant employment agency after the plaintiff discovered that an employee who had been referred to by the defendant had embezzled about $1 million from the company over about a seven-year period. The trial court in E-Fab sustained the defendant’s demurrer on statute of limitations grounds. (E-Fab, supra, 153 Cal.App.4th at pp. 1312–1313.) The E-Fab court reversed. (Ibid.)

In so doing, the court in E-Fab found the following allegations sufficient to meet the pleading requirements of the delayed discovery doctrine: that the company had ” ‘no reason to suspect that [defendant] did not screen plaintiff and failed to discover she had prior convictions for theft and welfare fraud, or that her academic credentials were misrepresented, or that she was embezzling money as [she] appeared to be a competent and honest employee’ “; and that the company “relied on defendant’s ‘expertise and experience in determining the qualifications and credentials of its accountants . . . .’ ” (E-Fab, supra, 153 Cal.App.4th at p. 1325.) The court noted such allegations and the pleading in general did “not suggest any circumstances that should have alerted plaintiff to its injury at defendant’s hands. To the contrary, plaintiff’s reliance on defendant’s expertise would warrant a sense of reassurance, not alarm.” (Ibid.) The court also noted that, as alleged in the complaint, there was a “lack of any basis for suspicion” that the employee was stealing money from the company. (Ibid.)

Here, as noted ante, the record shows plaintiffs investigated Daymark Realty in December 2010 when they sought to terminate the management agreement for the subject property. In addition, as also noted ante the record shows others who did “due diligence” on Daymark Realty in July 2012 discovered its predecessor in interest, Triple Net Realty, was not a licensed real estate broker in Pennsylvania when it was paid a commission and a loan fee in 2006. Because plaintiffs were on inquiry notice of the alleged wrongdoing by July 2012, at the latest, we conclude E-Fab is factually distinguishable from the instant case and does not inform our decision on this issue.

C. Escrow Deposit Returns and Refunds Paid to the Promoter

Plaintiffs in the FAC relied on the same allegations as addressed ante in connection with the payment of the commission and loan fee to Triple Net Realty in contending they only discovered on October 31, 2014, that defendants “had used Plaintiffs[‘] Deposits and distributions form escrow, described herein, contrary to the [escrow i]nstructions.” Plaintiffs further allege in the FAC that a “reasonable investigation of the Deed together with the TIC Closing Statement would not have uncovered that TIC 0, with the aid of Ticor, CLT, [CLTI] and Wells Fargo . . . misappropriated Plaintiffs’ Deposits for use in purchasing TIC 0’s share of the Property.” (Italics added.)

As before, we conclude these allegations, including the averment that defendants “misappropriated” plaintiffs’ deposits when TIC 0 purchased the subject property, are mere “contentions, deductions, or conclusions of fact or law” (see Yvanova, supra, 62 Cal.4th at p. 924) and cannot be considered either in determining whether plaintiffs’ FAC states any cause of action or whether plaintiffs’ sufficiently pleaded facts to invoke the delayed discovery doctrine.

In addition, we conclude these (conclusory) allegations conflict with the disclosure in the PPM that TIC 0 was formed for the express purpose of acquiring the subject property from nonparty seller through a loan with Wells Fargo’s predecessor in interest, Wachovia Securities, the original lender in the transaction. For example, the PPM repeatedly disclosed that 1818 Market Street, LLC, which it referred to as the “Company” (and which is referred to as TIC 0 by the parties), “intends to purchase the Property from an unaffiliated third party in the first quarter of 2006 for a purchase price of approximately $157,384,000. The Company and the Purchasers will enter into a nonrecourse loan . . . in the amount of $132,000,000 (approximately 83.87% of the purchase price . . . . The Company will raise the balance of the purchase price and the costs described herein from the sale of LLC Units and Interests.”

The PPM Addendum further disclosed that the purchase price for a 1 percent interest in the subject property would be “$478,000 in cash and the assumption of a pro rata portion of the Loan (estimated to be $1,320,000). Any additional purchase will be in the same ratio of cash and assumption of the Loan (the ratios will be adjusted based on the actual amount of the Loan). The minimum purchase is a 2.5% Interest

in the Property unless the Manager, in its sole discretion, allows a smaller investment. In connection with the acquisition of the Interests, each Purchaser will be required to enter into the Tenants in Common Agreement and the Management Agreement with the Property Manager.”

The PPM Addendum also made it abundantly clear that TIC 0 had not yet purchased the subject property by informing potential investors that, because of the “relatively large minimum purchase requirement of $1,195,000 . . . in the Memorandum and herein, no assurance can be given that the Purchasers will be able to acquire the Property at all or when anticipated.” (Italics added.) Because many potential investors were contemplating section 1031 exchanges, the PPM Addendum further advised that a “delayed closing on the Property could adversely affect the qualification of the Purchasers’ exchanges under Section 1031 of the Code. MOREOVER, BECAUSE NO ASSURANCE CAN BE GIVEN THAT THE PURCHASERS WILL IN FACT ACQUIRE THE [SUBJECT] PROPERTY, PROSPECTIVE PURCHASERS ARE STRONGLY ENCOURAGED TO ‘IDENTIFY’ THE MAXIMUM NUMBER OF ALTERNATIVE REPLACEMENT PROPERTIES AND NOT TO ONLY IDENTIFY THE PROPERTY.” (Italics added.)

Thus, the PPM and its addendum, in addition to other documents subject to the RJN, clearly show that TIC 0 in “step 1” would purchase the subject property from nonparty seller and in “step 2” would sell investment interests in the subject property to investors who either purchased a tenant in common interest or LLC units. (See Barnett, supra, 90 Cal.App.4th at p. 505 [noting to the “extent the factual allegations conflict with the content of the exhibits to the complaint, we rely on and accept as true the contents of the exhibits” and ignore the conflicting allegations]; WA Southwest 2, supra, 240 Cal.App.4th at p. 152 [same].)

In addition, as discussed ante in connection with the licensure issue, plaintiffs investigated Daymark Realty — the successor in interest to Triple Net Realty — in December 2010, when plaintiffs sought to terminate the management agreement. Documents subject to the RJN show that, had plaintiffs then done their “due diligence” during their investigation, they would have then found the alleged wrongdoing they now complain about.

That is, plaintiffs in the FAC alleged they discovered on October 31, 2014, that defendants had “misappropriated” plaintiffs’ deposits in connection with the closing of escrow as a result of their “independent investigation which began with the license status” of Daymark Realty/Triple Net Realty, which they further alleged “broadened” to include other alleged wrongdoing, including by TIC 0. (FAC, ¶ 65.) Clearly, if plaintiffs discovered this separate harm in October 31, 2014, when they were investigating Daymark Realty, by the same logic they also would have discovered it in December 2010 based on a similar investigation of this same entity, when they were seeking to terminate the management agreement.

Thus, for this separate reason we conclude plaintiffs’ (conclusory) allegations in the FAC concerning delayed discovery of this particular harm are insufficient as a matter of law to have tolled after July 2012, at the latest, any of the applicable statutes of limitations. (See Grisham, supra, 40 Cal.4th at p. 637; Fox, supra, 35 Cal.4th at pp. 806–808.)

D. Loan 3

Finally, plaintiffs contends defendants engaged in wrongdoing by “secretly encumber[ing] the Property with an additional undisclosed $9,630,000 unauthorized mortgage and loan[,] which funds were combined to increase debt to $141,630,000 in breach of the escrow instructions including the payment of kickbacks.” (FAC ¶¶ 3, 65, italics added.) Plaintiffs further allege the “TIC Closing Statement fraudulently concealed . . . the existence of the $9,630,000 Loan 3 and Mortgage 3 security,” until they discovered this wrongdoing on October 31, 2014. (FAC, ¶ 64(b), italics added.)

For the same reasons as discussed above in connection with the licensure and deposits issues, we conclude these allegations, including that defendants “secretly” and “fraudulent concealed” the existence of loan 3 and paid “kickbacks,” are mere “contentions, deductions, or conclusions of fact or law” (see Yvanova, supra, 62 Cal.4th at p. 924), devoid of material facts, and thus are insufficient as a matter of law to invoke the delayed discovery doctrine.

In addition, these (conclusory) allegations conflict with multiple provisions in the PPM and its addendum, which repeatedly disclosed the potential need for additional financing to acquire the subject property if the minimum offering was not met. By way of example only, in the summary of the offering the PPM discussed how TIC 0 intended to acquire the subject property, noting as follows: “The Company [i.e., TIC 0] intends to purchase the Property from an unaffiliated third party in the first quarter of 2006 for a purchase price of approximately $157,384,000. The Company and the Purchasers will enter into a nonrecourse loan (the ‘Loan’) to be made by [Wells Fargo’s predecessor in interest] Wachovia Securities (the ‘Lender’). The Company will raise the balance of its share of the purchase price and the costs described herein from the sale of LLC Units and Interests. A third party lender, not an Affiliate of the Manager (the ‘Bridge Lender’), may make a loan to the Company if the Minimum Offering, but not the Maximum Offering, has been attained (the ‘Bridge Loan’) at the time of the initial closing of the Offering. Alternatively, the Manager, in its sole discretion, may make a capital contribution to fund the shortfall, for which it would receive Preferred LLC Units in the Company. See ‘ACQUISITION TERMS AND FINANCING – Bridge Loan and/or Preferred Equity.’ ” (Italics added.)

The PPM further noted that the offering “of up to 9,560 LLC Units . . . is being made for the purpose of capitalizing the Company with an amount sufficient, when coupled with proceeds of the Loan, to acquire the Company’s interest in the Property and repay the Bridge Loan, if applicable, with interest thereon as described in ‘ACQUISITION TERMS AND FINANCING — Bridge Loan and/or Preferred Equity.’ ”

Under the risk factors rubric, the PPM again disclosed the possibility that a bridge loan or other short-term financing may be necessary to acquire the subject property. Specifically it stated: “The Manager [i.e., Triple Net Properties] has the right, in its sole discretion, to obtain a short-term acquisition loan for the Tenants in Common. If the Manager obtains such a loan, the Tenants in Common would be required to refinance the loan at the end of a relatively short term. The credit markets have recently been in flux. No assurance can be given that the Manager would be able to obtain a loan on favorable terms or at all to refinance the short-term loan.” (Italics added.)

But that’s not all. Another risk factor disclosed in the PPM involved “mezzanine financing.” Under this factor, the PPM unambiguously disclosed that if there was a funding shortfall, Triple Net Properties had the right, “in its sole discretion, to fund any shortfall below the Maximum Offering amount with mezzanine financing.” (Italics added.) This section further disclosed that such financing could be obtained “from a bank, other financial institution, or an unrelated third party”; that the “amount of the mezzanine financing and rate of interest could be substantial, and [that] such mezzanine financing may increase the initial loan to value ratio”; that as “a result of this high level of leverage, a decrease in rental revenues of the Property may materially and adversely affect the Property’s cash flow and, in tum, the Company’s ability to make distributions”; and that “[i]f the revenue from the Property is insufficient to pay debt service (the Loan and mezzanine financing) and operating expenses, the Tenants in Common would be required to use working capital or seek additional funds.” (Italics added.)

The PPM also disclosed as a risk factor that if a bridge loan was necessary to acquire the subject property, that loan would be “made on terms and conditions to be determined by the Manager, in its sole discretion”; that “[d]ue to its likely high interest rate, the Bridge Loan, if applicable, may adversely impact the return” on plaintiffs’ investment; and that “[i]f only the Minimum Offering is attained, the amount of the Bridge Loan would be substantial.”

Despite plaintiffs’ (conclusory) allegations to the contrary, the record thus unambiguously shows plaintiffs in 2006 were repeatedly warned that TIC 0 could, in its sole discretion, obtain additional financing to acquire the subject property if the minimum offering was not met, which turned out to be the case. Plaintiffs also were repeatedly warned that if TIC 0 obtained such financing, it potentially would “increase the initial loan to value ratio” of the investment, which also turned out to be the case. As such, we conclude as a matter of law that plaintiffs were on notice of these risks when they invested in the subject property in 2006 and that the delayed discovery doctrine does not apply to toll the limitations periods in connection with this particular alleged wrongdoing. (See Barnett, supra, 90 Cal.App.4th at p. 505; WA Southwest 2, supra, 240 Cal.App.4th at p. 151 [same].)

Finally, we also conclude that, if plaintiffs had done their due diligence, as required under the delayed discovery doctrine (see Fox, supra, 35 Cal.4th at pp. 807–808) when they investigated Daymark Realty/Triple Net Realty in December 2010, they then would have discovered the existence of Loan 3. For this additional reason, we conclude as a matter of law that the statutes of limitations has long since run on any claim plaintiffs could allege based on this particular alleged wrongdoing by defendants.

E. Leave to Amend the FAC

In light of our decision that the statutes of limitations have long since run on any cause of action plaintiffs can bring against defendants based on their alleged wrongdoing as set forth in the FAC, we conclude there is no “reasonable possibility” this defect can be cured by further amendment. (See Blank, supra, 39 Cal.3d at p. 318.) As such, we also conclude the court did not abuse its discretion when it refused plaintiffs leave to amend their FAC. (See Freeny, supra, 216 Cal.App.4th at p. 1339 [noting review of a trial court’s decision to deny leave to amend is for an abuse of discretion].)

DISPOSITION

The judgment in favor of defendants is affirmed. Defendants to recover their costs on appeal.

BENKE, J.

I CONCUR:

McCONNELL, P. J.
DATO, J., Concurring and Dissenting.

Plaintiffs were investors of various types in a complex real estate transaction to purchase a downtown Philadelphia office building in 2006. They now complain of losses ostensibly suffered as a result of the conduct of parties that provided escrow and title insurance services, defendants Commonwealth Land Title Company (CLT), Commonwealth Land Title Insurance Company (CLTI), and Ticor Title Company of California (collectively, defendants). Unsurprisingly, perhaps, defendants argue and the trial court accepted the notion that the events that form the basis for plaintiffs’ claims occurred too long ago to be actionable. They may ultimately be right—these claims may be barred by the statute of limitation. But the answer to the question turns on the concept of inquiry notice: When would reasonable investors have suspected something was wrong and conducted an investigation that would have led them to discover the basis for their claim?

Resolving this question is an inherently factual exercise, requiring the weighing and balancing of significant contextual evidence that often generates conflicting inferences. Only in rare circumstances—where the pleaded facts and those properly subject to judicial notice admit of but a single inference—can an issue of inquiry notice be resolved on demurrer. (See E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1320 (E-Fab).) Here, there are multiple possible inferences regarding the date of discovery—beginning in February 2006 (as argued by defendants and accepted by the trial court) and continuing through June 2014, when plaintiffs, in another lawsuit, alleged they uncovered one of the main harms they now complain of. Because reasonable delayed discovery in June 2014 would allow plaintiffs to pursue the majority of their claims, I conclude that sustaining the entire demurrer based on untimeliness was error.

My conclusion on the issue of timeliness requires me to reach some of the parties’ arguments that go to the merits. Here too, I am unconvinced that sustaining the demurrer in its entirety was proper. Accordingly, I respectfully dissent in part.

FACTUAL AND PROCEDURAL BACKGROUND

The Offering

This litigation arises from a 2006 deal involving a Philadelphia, Pennsylvania office building. In late 2005, a private placement memorandum and addendum (collectively, PPM documents) were circulated to prospective investors. The PPM documents explained that NNN 1818 Market Street, LLC (TIC 0) had been formed to acquire a tenant-in-common interest in the building “from an unaffiliated seller” and was soliciting investments in the same. They specified that TIC 0 was managed by Triple Net Properties, LLC, and the real estate broker, Triple Net Properties Realty, Inc. (Triple Net Realty), would serve as the property manager.

The building was to be financed primarily with a $132 million loan. TIC 0 represented that it would raise the balance of the purchase price and related costs through the sales of two types of investments. One option was for investors to purchase membership interests in TIC 0 (LLC Units). Alternatively, investors could acquire interests in the building itself as tenants in common (TIC Interests) alongside TIC 0 by contributing a certain amount of cash and assuming a pro rata portion of the $132 million loan.

The maximum amount of funding that would be raised from the combined sales of LLC Units and TIC Interests was $47,800,000. If TIC 0 came up short of that amount, the PPM documents specified two ways that it could cover the difference: (1) “A third party lender . . . (the ‘Bridge Lender’) . . . may make a loan to [TIC 0], in its sole discretion, may make a capital contribution to fund the shortfall, for which it would receive Preferred LLC Units in [TIC 0].”

With respect to the potential bridge loan, a later section of the PPM documents communicated that any such loan would be “made on terms and conditions to be determined by [Triple Net Properties, LLC], in its sole discretion” and “[TIC 0] will repay [it] plus interest thereon at subsequent closings of the Offering.” That section further advised that “[d]ue to its likely high interest rate, the Bridge Loan, if applicable, may adversely impact the return to Members of [TIC 0] [i.e., the LLC Unit investors]. If only the Minimum Offering is attained, the amount of the Bridge Loan would be substantial. . . . Prospective investors are encouraged to ask [Triple Net Properties, LLC] about the terms of the Bridge Loan before subscribing for LLC Units or [TIC] Interests.”

In a related vein, another section of the PPM documents explained that a bridge loan might come in the form of mezzanine financing. (For further discussion of what mezzanine financing is, see pages 14 to 15, post.) It advised that any such financing would be “in [the] sole discretion” of Triple Net Properties, LLC. The section warned, “The amount of the mezzanine financing and rate of interest could be substantial, and such mezzanine financing may increase the initial loan to value ratio. . . . If the revenue from the Property is insufficient to pay debt service (the Loan and mezzanine financing) and operating expenses, the Tenants in Common would be required to use working capital or seek additional funds. . . . If the Tenants in Common are unable to pay debt service, the Lender or mezzanine lender could foreclose on the Property and the investors [i.e., LLC Unit purchasers] would be likely to lose their entire investment in [TIC 0] and suffer adverse tax consequences. . . . In conclusion, mezzanine financing could material and adversely impact the Purchasers. Prospective investors who are unwilling to assume these additional risks should not invest in the [LLC] Units or [TIC] Interests.” (Italics added.) “Purchasers” was defined elsewhere as the TIC Interest investors.

The Investments

Plaintiffs here decided to invest. Tye Wynfield opted to purchase LLC Units. William B. Gilmer (through plaintiff NNN 1818 Market Street 13, LLC (TIC 13)) and Dennis Dierenfield bought TIC Interests. Defendants were employed in connection with the escrow process for the TIC Interest purchases.

The escrow instructions stated that “[TIC 0] purchased an undivided tenant in common interest” in the property and “desires to sell an undivided tenant in common interest in the Property to [TIC 13].” Section 1.2.2 of the instructions stated that TIC 13 was to deposit, among other things, the cash portion of its purchase into escrow. Section 2.2 provided, “Prior to the Close of Escrow, [TIC 0] shall execute, acknowledge (where appropriate), and deposit into Escrow . . . a grant deed . . . in the appropriate form conveying the Interest to [TIC 13] and a general assignment . . . of all leases, contracts, and, if applicable, any personal property and intangibles.”

The next subsection was entitled, “Close of Escrow,” and said,

“Escrow shall close on or before February 17, 2006 by: (i) filing for record the Grant Deed, the Tenants in Common Agreement, the Loan Assumption Documents and such other documents as may be necessary to procure [TIC 13’s] Title Policy . . . and (ii) delivering funds, the General Assignment and other [specified] documents . . . IF AND ONLY IF (a) all funds and instruments required pursuant to Sections 1 and 2 have been delivered to the Escrow Agent; and . . . . ”

(Italics added.)

In conjunction with the closing of escrow, commissions of $5,904,000 were paid to the real estate broker in the transaction, Triple Net Realty. $4,584,000 of that sum was a real estate commission. The other $1,320,000 was a “loan fee” or loan broker commission.

Thereafter, each TIC Interest purchaser received a closing statement. It reflected a pro rata assumption of the $132 million loan and the commensurate equity contributed. It did not reflect any other debt.

The Aftermath

This lawsuit was filed in late October 2016. Plaintiffs sued the parties employed in connection with the escrow process. While cast as various and sundry causes of action, three primary wrongs were alleged: (1) the commissions paid to Triple Net Realty were improper since it was not then licensed as a real estate broker in Pennsylvania; (2) plaintiffs’ deposits into escrow were disbursed too soon, contrary to the escrow instructions and thus facilitating the payment of kickbacks to Triple Net Properties, LLC; and (3) an unauthorized loan was secured on the property, also in contravention of the escrow instructions.

Plaintiffs claimed they uncovered this alleged wrongdoing starting on October 31, 2014 in connection with two different lawsuits. In one of the suits, plaintiffs’ counsel represented other TIC Interest owners as defendants against attempts to enforce certain options under the relevant property management agreement. In the other, plaintiffs’ counsel defended against claims brought by other TIC Interest owners regarding the validity of certain capital calls and options. While in search of possible defenses in those cases, they discovered the purported issue with Triple Net Realty’s real estate license. Their investigation later “broadened” to search for any basis to void the property management agreement, leading them to discover “tax stamps reflecting the Property purchase price and an encumbrance record search finding [the unauthorized third loan and mortgage],” as well as the claimed early disbursement issue.

The thrust of plaintiffs’ explanation as to why they could not have discovered all this sooner, which is explained over the course of roughly eight pages of their complaint, appears to be: Although they were diligent, nothing in the course of their diligence tipped them off to these problems. They examined all the pertinent closing documents, with the understanding that they could rely on those documents, and saw nothing amiss. Similarly, the documentation they received after closing comported with their original understanding of the deal.

Defendants demurred on multiple grounds, challenging both the timeliness and merits of plaintiffs’ claims. The trial court sustained the demurrer, reasoning that every count was time-barred as each “accrued in February of 2006, when escrow closed.” The court rejected plaintiffs’ reliance on delayed discovery as “belied by the documents [publicly] recorded in 2006.” The trial court also concluded that even if the claims were timely, they were barred for other reasons too. Those reasons included: (1) failure to plead breach of escrow as to CLT and CLTI since they were not parties to the escrow instructions; (2) failure to plead breach of contract as to CLT and CLTI since no promises were pled; (3) failure to plead breach of statutory duties under Financial Code section 17414 because that section does not provide for a private cause of action; and (4) failure to plead breach of title and title policy against CLTI because no clear promise was alleged. The court denied leave to amend.

DISCUSSION

I part company with the majority both with respect to whether all of plaintiffs’ claims are time-barred and—to the extent the majority reach this issue—whether the merits of certain of plaintiffs’ claims fail. First, I explain my disagreement with the majority’s conclusions regarding application of the statutes of limitation. Then, I turn to the remaining arguments made by defendants with respect to the merits of plaintiffs’ claims. In the end, I am unconvinced that this case can be entirely disposed of on demurrer.

1. Delayed Discovery

Given that this action was filed over a decade after the harms alleged, the predominant issue is whether plaintiffs’ claims are timely. It is undisputed that the relevant statutes of limitation in this action range from two to four years. (Maj. opn. ante, at p. 15.) The ensuing question, then, is whether delayed discovery saves plaintiffs’ claims.

“The discovery rule ‘postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action.’ ” (E-Fab, supra, 153 Cal.App.4th at p. 1318, quoting Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807 (Fox).) But it “only delays accrual until the plaintiff has, or should have, inquiry notice of the cause of action.” (Fox, at p. 807.) To rely on delayed discovery, a plaintiff ” ‘must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.’ ” (E-Fab, at p. 1319.)

“Resolution of the statute of limitations issue is normally a question of fact.” (Fox, supra, 35 Cal.4th at p. 810.) “More specifically, as to accrual, ‘once properly pleaded, belated discovery is a question of fact.’ ” (E-Fab, supra, 153 Cal.App.4th at p. 1320.) It becomes a question of law solely when ” ‘reasonable minds can draw only one conclusion from the evidence.’ ” (Ibid.) Accordingly, on this procedural posture (i.e., after a demurrer is sustained), ” ‘the issue is whether the trial court could determine as a matter of law that failure to discover was due to failure to investigate or to act[ing] without diligence.’ ” (Ibid.)

With respect to the possibility of delayed discovery in this case, the crux of the disagreement between the parties is mercifully simple. Defendants say plaintiffs were on inquiry notice of the three purported wrongs at the time the transaction closed in February 2006. Plaintiffs say they were not. In addition to opining on this discord, the majority follow two independent paths to conclude that plaintiffs were on inquiry notice in December 2010, July 2012, or June 2014. (See maj. opn. ante, at pp. 23–24, 27, 30–31.)

My discussion of this topic does not precisely track the organizational structure of the majority opinion. Preferring a chronological approach, I first consider whether Plaintiffs discovered their claims in 2006, a theory heavily relied upon by the trial court and the defendants, but not by the majority. I find that contention, at least at this particular juncture, untenable with respect to each of the three wrongs claimed. Next, I turn to whether plaintiffs were on notice sometime in 2010 or 2012, as the majority posit. Finally, having rejected that date range for discovery, I ask whether plaintiffs were on inquiry notice of their claims in June 2014. To this last query, my answer is yes; and since this action was filed in October 2014, plaintiffs’ causes of action subject to two-year statutes of limitations are time-barred.

a. Inquiry Notice in 2006?

The parties’ arguments as to whether plaintiffs were on notice of their claims in 2006 are specific to each of the three wrongs alleged. Accordingly, I consider the possible discovery of each of the three in turn.

As a threshold matter, I agree with the majority opinion that the PPM documents repeatedly disclosed this was a high-risk transaction. (See WA Southwest 2, LLC v. First American Title Ins. Co. (2015) 240 Cal.App.4th 148, 157.) The nature of an investment is certainly relevant to the degree of investigation we might expect from an investor. (See ibid.) Yet to conclude a party was on inquiry notice, there still must be a ” ‘factual basis for suspicion.’ ” (Ibid., quoting E-Fab, supra, 153 Cal.App.4th at p. 1326.) And I do not think that the generally risky nature of a transaction provides a factual basis to suspect any generalized risk will come to fruition. Rather, the pertinent question is whether the documents they reviewed put them on notice of the particular wrongs alleged, keeping in mind their relative levels of sophistication.

i. Licensing issue

With respect to the licensing issue, defendants’ main contention is that “even though the PPM did not disclose the Pennsylvania license status, [plaintiffs] knew of the commissions.” Emphasizing the repeated admonishments to prospective investors to investigate, they reason that plaintiffs would have looked into the issue if it was material. Plaintiffs do not dispute that they knew of the commissions. That, plaintiffs contend, is immaterial because their claim is not based on the existence of a commission, but rather on the payment of that commission to an unlicensed broker.

Plaintiffs persuasively point out they had no freestanding duty to search through the relevant public records to check on the broker’s licensing status. This is where plaintiffs’ reliance on this court’s earlier decision in Federal Deposit Ins. Corp. v. Dintino (2008) 167 Cal.App.4th 333 comes into play. There, a bank brought an unjust enrichment claim following its mistaken recordation of a reconveyance. (Id. at p. 350.) Despite the reconveyance being publicly recorded, we concluded that the bank was not on notice of the cause of action until a related payment was late. (Id. at pp. 352–353.) We explained that “although the public records of the San Diego County Recorder were open and available to Bank, there was no duty imposed on it, based solely on its mistake, to review those records and discover the Reconveyance it had mistakenly requested. That mistake, by itself, was insufficient to make a reasonable person suspicious that he or she may have a cause of action and therefore to impose a duty to investigate. Rather, there must be some separate (e.g., future) occurrence of which Bank, as a reasonable entity, should be charged with knowledge that would reasonably cause it to suspect it may have a cause of action for unjust enrichment based on mistake.” (Ibid.) On this record, no such “separate . . . occurrence” is evident, at least until June 2014, as explained below.

ii. Early disbursement issue

As to the early disbursement issue, defendants argue and the majority agree that inquiry notice arises from language in the PPM documents indicating the purpose for

which TIC 0 was formed. (Maj. opn. ante, at pp. 28–30.) To be certain, those documents were worded prospectively—e.g., “The Company intends to purchase the Property from an unaffiliated seller in the first quarter of 2006 . . . . ” (Italics added.) Given the nature of a private placement memorandum, this forward-looking language is not particularly surprising. (See CA Funds Group, Inc. v. Walker & Dunlop Investment Advisory Services, LLC (N.D.Ill. Jan 26, 2016, No. 13 C 9103) 2016 U.S.Dist. Lexis 9174, pp. *4–*5, fn. 3 [“A Private Placement Memorandum, or ‘PPM,’ is a formal offering document that, inter alia, is sent to prospective investors and which, among other things, describes the investment strategy and material provisions of the applicable legal documents and the risks of a particular offering” (second set of italics added)].)

Yet more importantly, I fail to see how the following facts conflict: (a) that the property would be purchased after the PPM documents were circulated and (b) that the property would be purchased before escrow closed. There was, of course, a period of time between the PPM documents’ circulation and the close of escrow.

On the other hand, one wonders how this transaction was otherwise supposed to occur? That is, how was TIC 0, an entity created solely to purchase this property, going to bankroll the building’s purchase without access to funds specifically earmarked for that purpose? And given that one of the main harms plaintiffs allege flowed from this was the payment of “undisclosed kickbacks,” how did it escape them that that money just disappeared?

These questions are both confusing and troubling. Plaintiffs now argue that their funds were just supposed to go to the administrative costs, not the purchase price for the property. Yet still, maybe there is another explanation. Perhaps a double escrow was contemplated here, whereby TIC 0’s “purchase and resale would occur simultaneously in two separate escrows” thus allowing the TIC 0 “to use the buyer’s purchase money from the second escrow (Escrow 2) to pay the acquisition price in the first escrow (Escrow 1).” (2 Miller & Starr, Cal. Real Estate (4th ed. 2018) § 6:1, p. 6-7.) If so, plaintiffs ought to have understood that the timing of the purchase and disbursement might not be precisely consecutive but would instead be concurrent. Or maybe TIC 0 was supposed to get a short-term bridge loan to acquire the property and then pay that loan off with the investors’ funds shortly thereafter.

The point is, we don’t (yet) know. Accordingly, at this juncture, I cannot say that ” ‘reasonable minds [could] draw only one conclusion from the evidence.’ ” (E-Fab, supra, 153 Cal.App.4th at p. 1320.) In other words, there is not enough here to decide this issue as a matter of law.

iii. Unauthorized loan issue

As to the loan that was allegedly secured on the property in a surreptitious manner, defendants again argue and the majority agree that the PPM documents put plaintiffs on notice of this possibility. (Maj. opn. ante, at pp. 32–34.) This claim presents perhaps the closest call with respect to the issue of delayed discovery. Certainly, the PPM documents address the possibility of additional debt. But the rub is whether the information disclosed would put the TIC Interest investors on notice that, as they claim wrongly transpired, their interests in the building would be encumbered by additional debt beyond the $132 million loan.

Central to this debate are the disclosures regarding a possible bridge loan. Plaintiffs point out that the PPM documents said the bridge loan would be made “to the Company” and would be repaid by “[t]he Company . . . at subsequent closings of the Offering.” “The Company” was, in turn, defined as TIC 0. Plaintiffs emphasize statements that any such bridge loan could “impact the return to Members of the Company,” meaning the LLC Unit investors, not those purchasing TIC Interests. (Italics added.) In other words, they read the PPM documents as providing that any bridge loan would be TIC 0’s problem, and thus indirectly the LLC Unit holders who held membership interests in TIC 0. But it would not be the TIC Interest investors’ burden.

Put in the context of “mezzanine financing,” this theory arguably makes some sense. ” ‘A mezzanine loan in the real estate industry typically refers to debt that is secured solely by the mezzanine borrower’s indirect ownership of the mortgage borrower—the entity that actually owns the income producing real property.’ ” (GreenLake Capital, LLC v. Bingo Investments, LLC (2010) 185 Cal.App.4th 731, 741.) Here, conceivably then, the mezzanine (bridge) loan should have attached to TIC 0’s interest in the Property, rather than (as the plaintiffs say happened) be secured on the property directly.

Yet there are still arguable problems with plaintiffs’ claim that they were not tipped off about this possibility. The disclosures specifically advise both the LLC Unit investors and TIC Interest investors (1) to ask about the bridge loan and (2) not to invest if they are uncomfortable with the risks inherent in mezzanine financing. Moreover, the section on mezzanine financing outright warns that it could increase the loan to value ratio—which is one of plaintiffs’ major complaints about the ramifications of the supposed secret loan. That section also cautions that a mezzanine lender, if not paid, could foreclose directly on the property.

Perhaps this all was enough to tip them off that their interests could be encumbered. But the issue is not whether they might have been alerted. The relevant question, I submit, is whether any (and every) reasonable investor would have suspected a problem in 2006 and engaged in further inquiry? That is simply not a question we can, on this record, answer at the pleading stage of the litigation.

b. Inquiry Notice in 2010 or 2012?

The majority conclude plaintiffs were on notice of the licensing issue in December 2010 or, “at the latest,” July 2012. (Maj. opn. ante, at pp. 23–24, 27, 30–31.) And because plaintiffs here allege that the licensing issue led to their discovery of the other two alleged wrongs, the majority conclude this rationale applies to those claims too. (Maj. opn. ante, at pp. 27, 30–31.) Their reasoning rests on two particular paragraphs from a judicially noticed complaint filed in another action against Triple Net Realty’s successor in interest by some of the same plaintiffs as here (the November 2014 lawsuit). (See maj. opn. ante, at pp. 22–24.)

The first paragraph provides that the November 2014 lawsuit plaintiffs “attempted to terminate [Triple Net Realty’s successor in interest,] Daymark Realty for cause” in December 2010. From this, the majority surmise that “the record shows plaintiffs investigated Daymark Realty in December 2010 when they sought to terminate the management agreement for the subject property.” (Maj. opn. ante, at p. 27, italics added.) This strikes me as drawing an adverse factual inference regarding the existence and scope of an investigation that is not permitted on demurrer.

The second cited paragraph provides, in the majority’s words, “that various defendants related to Daymark Realty discovered [the licensure issue] ‘during the course of their due diligence’ in or about 2011.” (Maj. opn. ante, at p. 22.) They omit, however, the context of that due diligence conducted by the November 2014 lawsuit defendants. It was “due diligence leading up to the August 2011 Merger,” where—in overly simplified terms—several entities apparently merged with Daymark Realty. At this point, it is perhaps appropriate to observe that what “diligence” is “due” may depend on the context. (See, e.g., UPMC v. CBIZ, Inc. (W.D.Pa. Sept. 29, 2017, No. 3:16-cv-204) 2017 U.S.Dist. Lexis 162132, p.*72 [“depending on the context and precise usage of the term, ‘due diligence’ can take on different meanings and impose a higher affirmative duty of thorough investigation”]; see also id. at p. *72, fn. 24.) Yet the majority go on to “hold[ ] plaintiffs herein to this same ‘due diligence’ requirement”—i.e., that undergone in a merger—with respect to the conjectural investigation conducted in December 2010. (Maj. opn. ante, at p. 23.) Again, I question the propriety of this adverse factual inference when ruling on a demurrer.

Citing to another portion of that second paragraph, the majority observe that in July 2012 the licensing issue ” ‘was raised when an unrelated tenant in common concerning another Pennsylvania property commenced a case.’ ” (Maj. opn. ante, at p. 23, italics added.) The majority thus see July 2012 as an alternatively suitable date to hold plaintiffs to since that is “when others similarly situated to plaintiffs learned about this issue and brought an action.” (Maj. opn. ante, at p. 24.) I am uncomfortable with this reasoning. On this record and in this procedural posture, I cannot conclude that those plaintiffs were “similarly situated” simply because they also employed Daymark Realty with respect to another building in the same state. It is a question of fact, not capable of resolution on demurrer, whether these plaintiffs had access to the same information and similar reason to pursue it in July 2012.

In sum, I remain unconvinced that plaintiffs were on inquiry notice in either December 2010 or July 2012 of the harms they allege in this case.

c. Inquiry Notice in June 2014?

Turning to an allegation made in a different action brought by these same plaintiffs (the April 2016 action), the majority also conclude that plaintiffs were on notice of certain of their causes of action in June 2014. (Maj. opn. ante, at p. 25.) On this point, I agree.

It is well-established that in reviewing a demurrer ruling “[w]e assume the truth of properly pleaded factual allegations.” (Stella v. Asset Management Consultants, Inc. (2017) 8 Cal.App.5th 181, 190 (Stella).) “[B]ut ‘[u]nder the doctrine of truthful pleading, the courts “will not close their eyes to situations where a complaint contains allegations of fact inconsistent with the attached documents, or allegations contrary to facts which are judicially noticed.” ‘ ” (Ibid.) This latter precept is salient here.

In the April 2016 action, plaintiffs alleged it “was not discovered that Triple Net [Realty] was not licensed in Pennsylvania at the time the . . . commissions and fees were paid until June of 2014 when a separate investigation was conducted incident to an action brought by Daymark Properties Realty, Inc. [formerly known as] Triple Net Properties Realty, Inc. whereupon the lack of licensure was first discovered.” (Italics added.) Yet the pleaded facts change in this complaint. Plaintiffs now claim that same discovery was not made until October 31, 2014. Moreover, plaintiffs allege that the discovery of the licensing issue on October 31, 2014 is what led them to uncover the rest of the supposed wrongdoing they now censure.

In this kind of factual conflict, the allegations in the judicially noticed document prevail. (Stella, supra, 8 Cal.App.5th at p. 190.) And so, I conclude plaintiffs were on notice of their causes of action in June 2014.

This is not, however, the death knell of plaintiffs’ entire lawsuit, as the relevant statutes of limitations range from two to as much as four years. A June 2014 inquiry notice date only bars those claims with a two-year limit. Here, those are the causes of action for breach of implied contract; negligence; breach of title policy; and promissory estoppel. (See maj. opn. ante, at p. 15.) Left standing are the claims for breach of escrow contract; breach of statutory duties; breach of fiduciary duty; constructive fraud; and unfair business practices. (See maj. opn. ante, at p. 15.) In sum, I believe plaintiffs make a sufficient showing to survive demurrer at least with respect to the issue of delayed discovery as to those claims. Indeed, the allegations in their complaint bear a commensurate level of specificity as, if not more than, those accepted in E-Fab, supra, 153 Cal.App.4th at pages 1324 to 1325.

2. The Merits

My conclusion with respect to the issue of delayed discovery requires me to address the other grounds upon which defendants demurred. Because the majority does not discuss the merits in depth and because the parties’ briefing is heavily (and understandably) slanted toward the issue of delayed discovery, I keep my discussion of these issues brief. In short, I remain unconvinced that the demurrer here should have been sustained as to the entire action.

First, there is the question of whether plaintiffs sufficiently allege that CLT and CLTI (collectively, the Commonwealth defendants) were obliged to follow the escrow instructions, a foundational prerequisite to almost all of plaintiffs’ causes of action against them. Both defendants and the majority dismiss plaintiffs’ allegations on this point as too conclusory insofar as they say the Commonwealth defendants “accepted” the instructions. (Maj. opn. ante, at p. 18.)

I read the complaint differently. While it does include the conclusion that the Commonwealth defendants “accepted” the terms of the escrow instructions as an obligation, it also explains how that purported acceptance transpired. Plaintiffs allege that the Commonwealth defendants accepted the terms of the escrow instructions “by receiving plaintiffs’ Deposits of $33,036,540 on February 21, 2006 from [Ticor Title Company of California], . . . depositing [the] same to an account subject to the Escrow, performing the Escrow and receiving payment from plaintiffs, in the case of [CLTI] for Title Insurance and [CLT] as an Escrow Fee, both in amounts greater than permitted by the Instructions, the amount of which is to be determined at trial.” This seems like it should be enough to withstand demurrer.

Next, defendants argue that plaintiffs’ ” ‘breach of statutory duties’ claim” was properly dismissed by the trial court since Financial Code section 17414 does not create a private right of action. Plaintiffs respond that it does not matter whether that section creates a private right of action because this claim is actually one for breach of fiduciary duty; the statute merely defines the duty that was breached. Defendants counter that the claim rooted in statutory duties is then cumulative of plaintiffs’ other fiduciary duty claim, and so could be demurred to on that basis. This assertion of cumulativeness, however, was never raised in the demurrer, and I would not be inclined to consider it here. (See City of Industry v. City of Fillmore (2011) 198 Cal.App.4th 191, 205 [“we need not decide whether the complaint fails to allege fact sufficient to state a cause of action for reasons that were not raised in the demurrer”].)

For these reasons, I respectfully dissent in part. I would reverse the judgment of dismissal as to the causes of action for breach of escrow contract; breach of statutory duties; breach of fiduciary duty; constructive fraud; and unfair business practices.

J. DATO