Case Name:   Kelly Sallin, et al.  v. David Edwards, et al.

Case No.:       1-14-CV-269220

 

In this action for construction defects, Plaintiffs Kelly Sallin and Aymeric Sallin (“Plaintiffs”) allege that defendants David Edwards (“Edwards”) and Earth Bound Homes, Inc. (“Earth Bound,” collectively with Edwards, “Defendants”) failed to construct improvements to Plaintiffs’ residence in accordance with approved plans and in a workmanlike manner.  On August 11, 2014, Plaintiffs filed suit for (1) negligence (against both Defendants); (2) breach of contract (against Edwards); (3) breach of express and implied warranties (against both Defendants); (4) fraud (against Edwards); and (5) breach of fiduciary duty (against Edwards).

 

Currently at issue are Defendants’ (1) demurrer to the fourth and fifth causes of action of Plaintiffs’ Complaint and (2) motion to strike the same and portions thereof, as well as Plaintiffs’ prayer for exemplary and punitive damages.

 

1. Defendants’ Demurrer

 

Defendants demur to the fourth and fifth causes of action on the grounds that each claim is uncertain (Code Civ. Proc., § 430.10, subd. (f)) and fails to state a cause of action (Code Civ. Proc., § 430.10, subd. (e)).

 

As an initial matter, Defendants’ demurrer on the ground of uncertainty is OVERRULED.  Uncertainty is a disfavored ground for demurrer and a demurrer on this ground is typically sustained only where the pleading is so unintelligible that the defendant cannot reasonably respond.  (See Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616 [“A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.”].)  Here, Plaintiffs’ claims are alleged clearly enough to enable a response.

 

1. Fourth Cause of Action for Fraud

 

In their fourth cause of action, Plaintiffs allege that Edwards (1) falsely represented that he had the experience, skill, and qualifications needed to remodel their residence and (2) failed to disclose that he employed unqualified, unskilled, and inexperienced laborers as his builders, whom he was not qualified to manage.  In addition Edwards represented that (3) he would charge for his labor and materials at cost plus an allowance for overhead and profit, which he did not do.  (Complaint, ¶ 27.)

 

Defendants fail to address Plaintiffs’ second theory of fraud in their demurrer.  The demurrer must be overruled for this reason alone.  (See Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1047 [“a demurrer cannot rightfully be sustained to part of a cause of action”].)  In addition, Defendants’ arguments that the remaining two misrepresentations are not alleged with adequate specificity and that Plaintiffs have failed to allege scienter lack merit.

 

Defendants’ demurrer to the fourth cause of action is accordingly OVERRULED.

 

1. Fifth Cause of Action for Breach of Fiduciary Duty

 

In the fifth cause of action, Plaintiffs allege that Edwards owed them fiduciary duties as their licensed general contractor and pursuant to assurances in the parties’ contract and Edwards’s web site, as well as Edwards’s oral assurances.  (Complaint, ¶ 35.)

 

Defendants correctly contend that Plaintiffs have failed to allege facts sufficient to support the conclusion that Edwards owed them a fiduciary duty.  (See McCauley v. Dennis (1963) 220 Cal.App.2d 627, 635-636 (hereinafter, “McCauley”) [no fiduciary relationship arose between contractor and landowner based upon contractor’s representation relied upon by landowner, contractor’s license as a general contractor, or the parties’ contract]; Mills v. Forestex Co. (2003) 108 Cal.App.4th 625, 649 [citing McCauley for the proposition that “no fiduciary relationship exists between a building contractor and the person who engages his services”].)

 

Plaintiffs argue that Edwards owed them a fiduciary duty as their agent and because the parties had a confidential relationship.  (See Persson v. Smart Inventions, Inc. (2005) 125 Cal.App.4th 1141, 1160 [fiduciary relationship exists between a principal and agent]; Brown v. Wells Fargo Bank, N.A. (2008) 168 Cal.App.4th 938, 960 [confidential relationship “ordinarily arises when one party reposes a confidence in the integrity of the other, and the other voluntarily accepts that confidence”].)  However, the facts alleged in Plaintiffs’ complaint do not implicate Edwards’s dealings with third parties on their behalf, and thus do not support the conclusion that Edwards breached any duty owed to Plaintiffs as their agent.  Further, Plaintiffs’ vague argument that their “confidential relationship” with Edwards created a duty is not supported by the authorities to which they cite.  “ ‘ “The essence of a fiduciary or confidential relationship is that the parties do not deal on equal terms, because the person in whom trust and confidence is reposed and who accepts that trust and confidence is in a superior position to exert unique influence over the dependent party.” ’ [Citation.]  Fiduciary obligations ‘generally come into play when one party’s vulnerability is so substantial as to give rise to equitable concerns ….’ [Citation.].”  (Brown v. Wells Fargo Bank, N.A., supra, 168 Cal.App.4th at p. 960.)  Here, Plaintiffs allege no such vulnerability.  A confidential relationship cannot arise in the course of an arms-length business transaction between equally situated parties simply because one relies on representations by the other.  (See Persson v. Smart Inventions, Inc., supra, 125 Cal.App.4th at p. 1162 [noting that vulnerability is a necessary predicate of a confidential relation and “usually arises from advanced age, youth, lack of education, weakness of mind, grief, sickness, or some other incapacity”].)

 

The demurrer to the fifth cause of action is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND due to Plaintiffs’ failure to allege facts supporting the conclusion that Edwards owed them a fiduciary duty.

 

2. Defendants’ Motion to Strike

 

In light of the Court’s ruling sustaining Defendants’ demurrer to the fifth cause of action, Defendants’ motion to strike the same and portions thereof is MOOT.

 

Defendants move to strike the fourth cause of action in its entirety for the same reasons advanced in support of their demurrer thereto.  These arguments fail for the reasons discussed above and are not properly raised via a motion to strike.  (See Ferraro v. Camarlinghi (2008) 161 Cal.App.4th 509, 529 [failure to state a cause of action is a ground for a demurrer, not a motion to strike].)  Defendants’ motion to strike the fourth cause of action is accordingly DENIED.

 

Finally, Defendants also move to strike allegations within the fourth cause of action that pertain to Defendants’ alleged intentional misrepresentation and concealment of material facts and request exemplary and punitive damages in light of those actions (Complaint, p. 9:13-9:17), as well as Plaintiffs’ prayer for exemplary and punitive damages itself.  However, as discussed above, Plaintiffs have adequately alleged a claim for fraud, which supports these requests for relief.  (Oakes v. McCarthy Co. (1968) 267 Cal.App.2d 231, 263 [“Fraud alone is an adequate basis for awarding punitive damages.”].)  Defendants’ motion to strike these aspects of Plaintiffs’ complaint is thus DENIED.

 

In light of the foregoing, the currently-scheduled case management conference
(12-9-14 at 3:45 p.m.) is CONTINUED to January 20, 2015 at 10:00 a.m. in Department 5.