2018-00225716-CU-FR

Ralph Richardson vs. Janis Rose

Nature of Proceeding: Hearing on Demurrer to Complaint

Filed By: Greisen, Cary P.

This matter was originally scheduled for August 28, 2018. Due to a calendaring error, this matter should have been, but was not continued to October 9, 2018 as requested by the parties. Unbeknownst to the parties, the matter was heard and finalized on September 14, 2018. The Court has vacated the September 14, 2018 ruling. The tentative ruling is repeated below. The parties still must request oral argument pursuant to Local Rule 1.06

*** If oral argument is requested, the parties must at the time oral argument is

requested notify the clerk and opposing counsel of the causes of action that will be addressed at the hearing. The parties are also reminded that pursuant to local court rules, only limited oral argument is permitted on law and motion matters.

***

Defendants Janis (“Janis”) and Dean Rose’s (collectively “Defendants”) demurrer to Plaintiffs Ralph (“Ralph”) and Kirsten Richardson’s (collectively “Plaintiffs”) first amended complaint (“FAC”) is ruled upon as follows.

Plaintiffs’ request for judicial notice is granted.

Overview

This action involves the sale/purchase of a home. Plaintiffs allege that in early 2013, they entered into an oral agreement wherein Defendants would purchase the property (“Property”) for Plaintiffs, rent it to them, and sell it to them “at a fair price” after Plaintiffs had sold their other house. Janis and Ralph are

siblings. The owner of the Property was Alphonso A. Brooks Revocable Living Trust (“Trust”). Rowland and Shelia Brooks served as Trustee of the Trust. Shirley Brooks is Alphonso A. Brooks’ wife and is Janis and Ralph’s aunt.

In early 2013, the mortgage on the Property was in default and in danger of being foreclosed. Sheila approached Ralph to sell the Property. At the time, Plaintiffs were trying to modify the loan on their own house, and a short sale was scheduled in April 2015. Plaintiffs allege that they could have stayed at

their house while waiting for the modification and short sale without making mortgage payments for approximately two years. Plaintiffs further allege that Janis would not

have purchased the Property if Ralph did not agree to fix it. Plaintiffs allege that the purpose of the agreement was to buy time for

Plaintiffs to purchase the Property when they could qualify for a loan after the short sale on their house.

Ralph began making substantial repairs to the Property to make it habitable. Plaintiffs invested $46,655.15 to repair the Property. Plaintiffs moved into the Property in June 2013. In May 2016, Plaintiffs were prepared to buy the Property and had qualified for a loan for $425,000. Defendants refused to sell for $425,000. Defendants purchased the Property in 2013 for $256,000.

In January 2017, Plaintiffs asked Defendants to reimburse them for the expenses incurred to repair and improve the Property, but Defendants had questions about the labor and receipts. In February 2017, Defendants increased the monthly rent. There are no factual allegations that Plaintiffs have been evicted from the Property or have moved out.

Defendants demur to the First, Second, Third, Fifth and Sixth causes of action (“COA”) for breach of implied by conduct agreement, promissory estoppel, deceit – promise made without intention to perform, breach of implied covenant of good faith and fair dealing, and retaliatory increase of rent & eviction.

Defendants demur on the ground that the FAC is uncertain and fails to state sufficient facts.

Breach of Implied by Conduct Agreement and Breach of Implied Covenant of Good Faith and Fair Dealing

The demurrer on the ground of uncertainty is OVERRULED. The allegations are not so uncertain that Defendants cannot frame a response. Demurrers for uncertainty are disfavored and are only granted where the complaint is so muddled that the defendant cannot reasonably respond. The favored

approach is to clarify theories in the complaint through discovery. (See Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616; 1 Weil & Brown, Civil Procedure Before Trial (Rutter 2008), sec. 7:84, p. 7(l)-37.)

The demurrer on the ground that the cause of action is barred by the statute of frauds is OVERRULED. Part performance is an exception to the statute of frauds. (Sutton v. Warner (1993) 12 Cal. App. 4th 415, 422 [“the doctrine of part performance by the purchaser is a well-recognized exception to the statute of frauds as applied to contracts for the sale or lease of real property.”].) Here, Plaintiffs allege that they partially performed on the contract by moving into the Property, living there for over three years and making substantial improvements.

The Court also disagrees with Defendants that the contract is an “agreement to agree upon a ‘fair price’ at some later date.” (Demurrer, 10:12-17.) Here, the parties agreed that Plaintiffs would rent the Property and Defendants would sell it to them “at a fair price” after Plaintiffs had sold their other house.

Whether the purchasing the Property for $425,000 was a “fair price” is a factual determination outside the scope of a demurrer.

Promissory Estoppel and Deceit

The demurrer on the ground of uncertainty is OVERRULED.

The demurrer for failure to state facts is also OVERRULED. Defendants insist that there is no clear and unambiguous promise because no sales price is alleged. The Court disagrees. Plaintiffs offered to purchase the Property for $425,000, whether this was a “fair price” is a factual determination outside the scope of a demurrer.

Retaliatory Increase of Rent & Eviction

Plaintiffs allege that Defendants increased their rent because Plaintiffs exercised their rights as a tenant under Civ. Code §1942.5(c). Civ. Code §1942.5(c) provides, that a landlord may not report, or threaten to report, the lessee or individuals known to the landlord to be associated with the lessee to immigration

authorities as a form of retaliatory conduct for the tenant exercising his/her rights “under this chapter.”

Defendants demur on the ground that Civ. Code §1942.5(c) does not apply to the alleged facts.

Plaintiffs insist that the following allegation is sufficient: “Defendants increased rent by 67% in retaliation because Plaintiffs demanded compensation for the labor and materials they had spent to make the property habitable, i.e., substantially comply with building and housing code standards that materially affect tenants’ health and safety.” (Opposition, 9:7-12, FAC, ¶ 56.)

Plaintiffs, however, have not identified the statute under which they exercised their

rights or that they made a complaint to Defendants regarding tenantability. Civ. Code §1942.5(a) states, in pertinent part:

If the lessor retaliates against the lessee because of the exercise by the lessee of his or her rights under this chapter . . ., and if the lessee of a dwelling is not in default as to the payment of his or her rent, the lessor may not . . . increase the rent, or decrease any services within 180 days of any of the following:

(1) After the date upon which the lessee, in good faith, has given notice pursuant to Section 1942, has provided notice of a suspected bed bug infestation, or has made an oral complaint to the lessor regarding tenantability.

. . .

(4) After the filing of appropriate documents commencing a judicial or arbitration proceeding involving the issue of tenantability.

As currently alleged, Plaintiffs knew the Property required substantial repair, and agreed to move into the Property to make the repairs in anticipation of purchasing the

Property. The Court agrees with Defendants that Plaintiffs’ allegations are deficient.

The demurrer is SUSTAINED with leave to amend.

Where leave to amend is granted, Plaintiffs may file and serve a second amended complaint (“SAC”) by no later than October 26, 2018, Response to be filed and served within 30 days thereafter, 35 days if the SAC is served by mail. (Although not required by any statute or rule of court, Plaintiffs are requested

to attach a copy of the instant minute order to the SAC to facilitate the filing of the pleading.)

The minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or further notice is required.