Case Name: Berman v. Martina, et al.
Case No.: 1-13-CV-254103
The second amended complaint (“SAC”) in Case No. 1-13-CV-254103 (Case No. 2) alleges that plaintiff John Berman (“Plaintiff”) vacated a house after living there for over 6 years pursuant to a rental agreement with defendant Catherine Martina (“Defendant”). (See SAC, ¶¶ 4-5.) After the parties initially agreed to a walk-through of the subject property on April 14, 2010, the parties postponed the walk-through to April 17, 2010; however, Defendant demolished the home’s bathrooms on April 14, 2010. (See SAC, ¶¶ 7-8.) Defendant then charged Plaintiff for various expenditures, including attorney’s fees, without any basis, thereby improperly withholding $2,492.75 from the security deposit to Plaintiff. (See SAC, ¶¶ 9-19.) On October 3, 2013, Plaintiff filed his initial complaint; on May 30, 2014, Plaintiff filed the SAC against Defendant, asserting causes of action for: breach of contract; fraud; constructive fraud; breach of the implied covenant of good faith and fair dealing; and, willful and malicious misconduct.
Before the Court is Defendant’s demurrer to the SAC in Case No. 2, and Plaintiff’s motion to consolidate an earlier case, Case No. 1-13-CV-245868 (Case No. 1).
Demurrer to Second Amended Complaint
Defendant demurs to the second and third causes of action on the grounds that they are barred by the statute of limitations. Defendant also demurs to the fourth cause of action for breach of the implied covenant of good faith and fair dealing on the ground that it fails to state facts sufficient to constitute a cause of action. Defendant also contends that there is a defect or misjoinder of parties as there was a second lessee, Catherine Curtiss. Defendant also demurs to the fifth cause of action on the ground that it is barred by the statute of limitations.
Defendant’s request for judicial notice of the complaint, the cross-complaint, order re: demurrer, and docket in Case No. 1 is GRANTED. (Evid. Code § 452, subd. (d).) Defendant’s request for judicial notice of the request for dismissal is DENIED. Defendant has not provided an endorsed filed copy of the document in question, and the document Defendant requests judicial notice of differs from the document found in the Court’s file in Case No. 1. Defendant’s request for judicial notice of the license information from the California Bureau of Real Estate is GRANTED. (Evid. Code § 452, subd. (c); see also Pedus Building Services, Inc. v. Allen (2002) 96 Cal.App.4th 152, 156, fn. 2 (taking judicial notice of records of the Secretary of State demonstrating the principal place of business of a corporation); see also McPheeters v. Board of Medical Examiners (1946) 74 Cal.App.2d 46, 47 (stating that the court “may take judicial notice of the records of a public agency”).)
Defendant demurs to the second and third causes of action for fraud and constructive fraud on the grounds that they are barred by the three-year statute of limitations provided by Code of Civil Procedure section 338, subdivision (d). (See Def.’s memorandum of points and authorities in support of demurrer (“Def.’s memo”), p.5:1-27.) In opposition, Plaintiff argues that “Defendant’s Memorandum of Points and Authorities has no legal argument or discussion about the validity of the First, Second and Third Causes of Action in the Second Amended Complaint… [and a]s such, [Plaintiff] need not address the viability of these three causes of action, or the adequacy of the allegations contained therein.” (Pl.’s memorandum of points and authorities in opposition to demurrer, p.6:1-6.)
Plaintiff is mistaken, as Defendant’s memo explicitly discusses this defect in her memorandum. Section 338, subdivision (d) requires that “[a]n action for relief on the ground of fraud” must be filed “[w]ithin three years.” (Code Civ. Proc. § 338, subd. (d).) The alleged misrepresentation is alleged to have occurred on April 17, 2010, and Plaintiff is alleged to have discovered the falsity of that representation on April 17, 2010 when he visited the partially demolished home, or, at the latest on May 6, 2010, when he received the security deposit. (See SAC, ¶¶ 6-19.) Plaintiff does not suggest how he might be able to amend the claims such that they might be timely. (See Goodman v. Kennedy (1976)18 Cal. 3d 335, 349 (stating that “Plaintiff must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading”), quoting Cooper v. Leslie Salt Co. (1969) 70 Cal. 2d 627, 636; see also Hendy v. Losse (1991) 54 Cal. 3d 723, 742 (stating that “the burden is on the plaintiff… to demonstrate the manner in which the complaint might be amended”).)
The instant action does not relate back to the dismissed complaint in Case No. 1. Both parties are mistaken about the scope of the dismissal filed by Plaintiff on September 3, 2013, perhaps because Plaintiff did not serve a complete version of the dismissal on Defendants in Case No. 1. The Request for Dismissal found in the Court file (the one actually signed and filed by Plaintiff on September 3, 2013) reflects that Plaintiff did not request a dismissal of the “entire action” as he claims: the dismissal specifically requests dismissal of the “complaint,” only, without prejudice so he could immediately appeal. Although it is true that a plaintiff cannot seek dismissal of an “entire action” without consent of other parties if a cross-complaint is on file, a plaintiff can seek dismissal of the complaint alone without consent. (See CCP sec. 518(c); see also Carroll v. Import Motors, Inc. (1995) 33 Cal.App.4th 1429, language at 1434).
Nor would the doctrine of equitable estoppel apply as there are no facts to suggest that Defendant acted in a manner upon which Plaintiff relied; rather, Plaintiff believes that the doctrine of equitable estoppel applies because of “the Court’s improper dismissal of the limited jurisdiction Complaint.” (Opposition, p.9:4-8; see Sofranek v. County of Merced (2007) 146 Cal.App.4th 1238, 1250 (stating that “[i]n order to assert equitable estoppel, the following four elements must be present: (1) the party to be estopped must be apprised of the facts; (2) he must intend that his conduct be acted on, or must so act that the party asserting estoppel had a right to believe it was so intended; (3) the party asserting estoppel must be ignorant of the true state of facts; and (4) he must rely upon the conduct to his injury”).) As noted above, the dismissal of the complaint, only, on the request of the Plaintiff was proper pursuant to Code of Civil Procedure section 981(c). The demurrer to the second and third causes of action is SUSTAINED without leave to amend on the ground that they are barred by the statute of limitations.
Defendant also demurs to the fourth cause of action for breach of the implied covenant of good faith and fair dealing on the ground that it fails to state facts to constitute a cause of action. “In every contract there is an implied covenant that neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract, which means that in every contract there exists an implied covenant of good faith and fair dealing.” (Universal Sales Corp. v. California Press Manufacturing Co. (1979) 20 Cal.2d 751, 771.) Defendant contends that she did not owe Plaintiff a duty for a walk through because Civil Code section 2079.13 and 2079.16 only applies to real estate brokers and she was not a broker at the time of the initial leasing in 2004. (See Def.’s memo, pp.7:13-28, 8:1-28, 9:1-22.) However, even if Defendant received her license in 2006, that would not preclude the existence of a duty to provide an inspection of the property. (See Civ. Code § 1950.5, subds. (f)(1)-(3), (g)(1)-(3), (j)(1); see also Civ. Code § 1940.6, subds. (a)(2), (b)-(d) (requiring notice of application for permit to demolish residential dwelling for current tenants, prior to application for permit).) Moreover, Defendant does not demur to the first cause of action for breach of contract. Thus, the complaint alleges the existence of an implied covenant of good faith and fair dealing that was breached by Defendant’s conduct. Accordingly, the demurrer to the fourth cause of action on the ground that it fails to state facts sufficient to constitute a cause of action is OVERRULED.
Defendant demurs to the fifth cause of action for “willful misconduct” on the ground that it is barred by the statute of limitations. In opposition, Plaintiff concedes that he has not alleged facts to demonstrate delayed discovery, but instead asserts that “[t]hough[] not directly addressed in the pleading itself, Plaintiff Berman did not discover (and could not have discovered) Defendants’ willful misconduct as alleged back in 2010 or even at the time of filing the original Complaint because it was not until August of 2013 that Plaintiff became aware of the willful misconduct… specifically, it was in August 2013 when Defendants filed their Cross-Complaint, which alleged for the very first time additional damages that were never previously mentioned or alleged.” (Opposition, p.7:16-22.) “So the willful misconduct at issue was (1) the Defendants fabricating their Cross-Complaint damages and/or (2) Defendants concealing hiding from Plaintiff Berman back in 2010.” (Id. at p.7:22-24.)
Here, it appears that Plaintiff is seeking to allege a malicious prosecution cause of action. (See Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 292 (stating that “[t]o prevail on a malicious prosecution claim, the plaintiff must show that the prior action (1) was commenced by or at the direction of the defendant and was pursued to a legal termination favorable to the plaintiff; (2) was brought without probable cause; and (3) was initiated with malice”).) Here, there has been no legal termination favorable to the plaintiff as the cross-complaint in question is still pending, and any such claim would be premature. To the extent that the claim is premised on prior conduct pursued in 2010, it would be time-barred for reasons already stated. Plaintiff does not otherwise suggest how he might be able to amend the claims to state a valid cause of action. (See Goodman v. Kennedy (1976)18 Cal. 3d 335, 349 (stating that “Plaintiff must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading”), quoting Cooper v. Leslie Salt Co. (1969) 70 Cal. 2d 627, 636; see also Hendy v. Losse (1991) 54 Cal. 3d 723, 742 (stating that “the burden is on the plaintiff… to demonstrate the manner in which the complaint might be amended”).) The demurrer to the fifth cause of action is SUSTAINED without leave to amend.
In Case No. 1, the Court [Hon. Pierce] sustained demurrer to nearly identical causes of action of fraud without leave to amend, leaving Plaintiff’s breach of contract cause of action intact. In response, Plaintiff filed a request for dismissal as to his complaint without prejudice, effectively dismissing the remaining breach of contract cause of action. Citing Wells v. Marina City Properties (1981) 29 Cal.3d 781, Defendant argues that Plaintiff should not have been allowed to file the instant complaint, in light of the Court’s prior order partially sustaining Defendant’s demurrer without leave to amend and Plaintiff’s subsequent dismissal. Indeed, in Wells, supra, the court stated that “[w]hen a general demurrer to a petition is sustained, and the plaintiff declines to amend… a plaintiff no longer had the right to dismiss without prejudice.” (Id. at pp.785-786 (also stating that “[i]f he could do so, litigation would become interminable, because a party who was led to suppose a decision would be adverse to him could prevent such decision and begin anew, thus subjecting the defendant to annoying and continuous litigation”; also stating that “the injustice to the defendant is not the greatest evil of such a practice; the wasting of the time and money of the people in a fruitless proceeding in the courts is something far more serious”).) The Court agrees that Plaintiff may not file his claims in the Second Amended Complaint in Case No. 2 for fraud and “willful and malicious conduct” as the Court has already conclusively determined the litigation on the merits as to those claims. (Id. (stating “we see no reason why the judgment should not be regarded as a conclusive determination of the litigation on its merits”).)[1] For this additional reason, the Court sustains Defendant’s demurrer to the second, third and fifth causes of action.
Finally, Defendant demurs to the entire SAC on the ground that there is a defect of parties in that the other tenant, Catherine Curtiss, has not been joined and is a necessary party. Defendant cites no authority in support of her position. In opposition, Plaintiff asserts that “[i]f Catherine Curtiss was indeed a tenant and was in fact claiming damages against the Defendants, then she of course would have been able to pursue this lawsuit or her own lawsuit asserting those rights… [but s]he cannot now be forced to do so.” (Opposition, p.10:24-26.) Here, there is no indication that Catherine Curtiss asserts or has an interest in the security deposit. The SAC alleges that the payment was payable solely to Plaintiff, the security deposit was Plaintiff’s, and that all issues of the SAC involve Plaintiff’s interest in the security deposit. It does not appear that Curtiss’ absence would affect the Court’s ability to provide complete relief among those already parties. Moreover, even if Curtiss were to be added as a Plaintiff, the demolition was over four years ago, and thus, Defendant would not be subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by Curtiss’ absence since her claims would be time-barred. Accordingly, the demurrer to the entire SAC on the ground that there is a defect of parties is OVERRULED. (See Code Civ. Proc. § 389, subd. (a).)
Motion to consolidate
The motion to consolidate is GRANTED. The Cross-complaint in Case No. 1 (Case No. 1-13-CV-245868) contains claims and causes of action that are related to the two remaining causes of action in Case No. 2 (Case No. 1-13-CV-254103).
Case No. 1 (Case No. 1-13-CV-245868) shall be the lead case, and all further pleadings shall be filed in Case No. 1. All case management conferences or other hearings in Case No. 2 are vacated, and shall be rescheduled to coincide with hearings in Case No. 1.
The Court will prepare the order.
[1] However, the Court notes that Plaintiff’s breach of contract cause of action was intact in Case No. 1 after Judge Pierce’s order partially sustaining demurrer, and he can proceed on that claim.
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