Case Number: BC539038    Hearing Date: July 16, 2014    Dept: 58

JUDGE ROLF M. TREU
DEPARTMENT 58
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Hearing Date: Wednesday, July 16, 2014
Calendar No: 13
Case Name: Sage, et al. v. Tan, et al.
Case No.: BC539038
Motion: Demurrer
Moving Party: Defendants Winnie Tan, D.D.S. and Winnie Tan, D.D.S. APC
Responding Party: Plaintiffs Parham M. Sage, Amir Korouri, and Pedram Bina
Notice: OK

Tentative Ruling: Demurrer is sustained as to the 2nd COA without leave to amend, and is otherwise overruled. Defendants to answer within 10 days.
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On 3/12/14, Plaintiffs Parham M. Sage, Amir Korouri, and Pedram Bina filed this action against Defendants Winnie Tan and Winnie Tan, APC (“WTAPC”), arising out of an alleged agreement to sell real property and a dental practice.

Factual Allegations –
In October 2013, Plaintiffs entered into an agreement with Defendants to purchase a dental practice commonly known as Winnie Tan Dental (and corresponding website, fictitious business name, and advertising material) and real property located at 2621 E. 1st St., Los Angeles, CA 90033; Plaintiffs would pay $526,000 at closing and a deposit of $4,000 within 3 business days of entering into the agreement. ¶ 11. Plaintiffs paid the deposit and otherwise performed (¶ 12); and in January 2014, Defendants refused to close escrow and to sell the dental practice and real property (¶ 15).

Plaintiffs assert causes of action for (1) breach of written agreement, (2) breach of oral agreement, (3) fraud, and (4) specific performance.

Demurrer –

1. 1st COA, Breach of Written Agreement
Preliminarily, Defendants’ demurrer asserts that the written agreement (referred to by Defendants as the “Unaccepted Offer”) was not fully executed. Dem. p. 2:4-6. This relies on facts that are not contained in the Complaint and is not considered.

Defendants’ demur to the 1st COA on the ground that Plaintiffs failed to properly plead the terms of the written agreement. See, e.g., Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 307 (stating that an agreement may be attached or its terms may be set out verbatim). However, Plaintiffs correctly note that the legal effect of a written contract may be pled by setting forth the substance of the relevant terms. See Construction Protective Services, Inc. v. TIG Special Ins. Co. (2002) 29 Cal.4th 189, 199; McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489. Plaintiffs have done so. Defendants argue that other “material and relevant” conditions have not been alleged and questions why the written agreement has not been attached. Reply p. 2:23-3:3. This is not properly directed at the pleadings. The demurrer is overruled as to the 1st COA.

2. Statute of Frauds
Defendants demur to the 2nd and 4th COAs on the ground that they are barred by the statute of frauds because the alleged contracts pertain to the sale of real property. Civil Code § 1624(a); see, e.g., Lee v. Lee (2009) 175 Cal.App.4th 1553, 1556. In opposition, Plaintiffs argue that the partial performance exception to the statute of frauds applies because of Plaintiffs making a deposit payment (Opp’n p. 4:12-14; see also Complaint ¶ 19).

However, “[p]ayment of the purchase price alone, without the buyer obtaining possession or making substantial improvements to the property, is not sufficient part performance to preclude application of the statute of frauds.” Sutton v. Warner (1993) 12 Cal.App.4th 415, 422. The doctrine of part performance requires the buyer to take possession of the property in addition to either partial payment or substantial improvements to the property. Id. Plaintiffs fail to allege that they have taken possession of the property to support application of the doctrine of part performance. Therefore, the demurrer is sustained as to the 2nd COA based on the statute of frauds bar.

However, because Plaintiffs’ 1st COA for breach of written contract survives, the statute of frauds does not bar the 4th COA. Additionally, to the extent Defendants argue that there was no enforceable contract to support the 4th COA for specific performance (Dem. p. 5:10-12), this improperly attempts to dispute the factual allegations of the Complaint. Therefore, the demurrer based on the statute of frauds is not sustained as to the 4th COA.

3. 3rd COA, Fraud
Defendants demur to the 3rd COA on the ground that it is not pled with particularity. See Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 72-73; Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184 (requiring pleading facts which “show how, when, where, to whom, and by what means the representations were tendered). However, Plaintiffs allege that representations were made that Defendants would sell the dental practice and property to Plaintiffs. Complaint ¶ 25. Plaintiffs allege that these statements were made by Tan on her own behalf and as authorized representative of WTAPC, orally and in writing to Sage and Bina, at the time of the negotiation and entering into the written agreement, which were also made in telephone calls and email communications with Sage from 9/10/13 to 10/5/13. Complaint ¶¶ 26-28. At the pleading stage, this is sufficient to allege fraud with particularity. The demurrer is overruled as to the 3rd COA.

Ruling –
The demurrer is sustained as to the 2nd COA, and is otherwise overruled. The Court is inclined to deny leave to amend; however, because this is the first challenge to the pleadings, the Court will grant Plaintiffs leave to amend if requested.