Case Number: EC060622    Hearing Date: November 07, 2014    Dept: A

Stein v Darby Group

DEMURRER & MOTION TO STRIKE

Calendar: 6
Case No: EC060622
Date: 11/7/14

MP: Cross-Defendant, Belle Stein
RP: Cross-Complainants, Camerino Islas, Darby Group, and LA Tucson

ALLEGATIONS IN FIRST AMENDED CROSS-COMPLAINT:
The Cross-Complainants are the owners of property at 4363 Camellia Ave., Los Angeles. The Cross-Defendant claims an interest under a trust deed that is voidable. The Cross-Complainants brought this action to quiet title and to cancel the Cross-Defendant’s trust deed.

CAUSES OF ACTION IN COMPLAINT:
1) Quiet Title
2) Cancellation of Instruments
3) Slander of title
4) Fraud
5) Negligent Misrepresentation
6) Embezzlement
7) Unjust Enrichment
8) Money Had and Received
9) Intentional Interference with Prospective Economic Advantage
10) Declaratory Relief

RELIEF REQUESTED:
1. Demurrer to 1st, 4th, 5th, 6th, 7th, 8th, and 9th causes of action.
2. Strike Edward Stein and Estate of Edward Stein from Cross-Complaint.

DISCUSSION:
Trial is set for January 12, 2015.

This hearing concerns the Cross-Defendant’s demurrer and motion to strike directed at the First Amended Cross-Complaint.

1. Demurrer to First Cause of Action for Quiet Title
The Cross-Defendant argues that the quiet title cause of action cannot be brought because the First Amended Cross-Complaint was not verified. Under CCP section 761.020, a pleading for quiet title must be verified.
A review of the First Amended Cross-Complaint reveals that it is verified by Camerino Islas, who is the trustee of Darby Group and of the Camellia Trust. Further, the opposition papers have provided a supplemental verification to specify that Camerino Islas verified the Cross-Complaint in his capacity as the trustee of the Camellia Trust, which is the owner of the property. Since the Cross-Complaint is verified, this is not grounds to sustain demurrer.

Therefore, the Court will overrule the demurrer to the first cause of action.

2. Demurrers to Fourth Cause of Action for Fraud and to Fifth Cause of Action for Negligent Misrepresentation
The Cross-Defendant argues that these causes of action lack the particular facts needed to plead claims based on fraud and negligent misrepresentation. The elements of the fourth cause of action for fraud are the following:

1) a representation, usually of fact, which is false;
2) knowledge of its falsity;
3) intent to defraud;
4) justifiable reliance upon the misrepresentation; and
5) damage resulting from that justifiable reliance
Stansfield v. Starkey (1990) 220 Cal. App. 3d 59, 72-73.

The fifth cause of action for negligent misrepresentation must include the following elements:

1) a misrepresentation of a past or existing material fact;
2) without reasonable grounds for believing it to be true;
3) with intent to induce another’s reliance on the fact misrepresented;
4) ignorance of the truth and justifiable reliance thereon by the party to whom the misrepresentation was directed; and
5) damages.
B.L.M. v. Sabo & Deitsch (1997) 55 Cal. App. 4th 823, 834.

These are torts of deceit and facts constituting each element of fraud must be alleged with particularity; the claim cannot be saved by referring to the policy favoring liberal construction of pleadings. Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216. Since fraud must be pleaded with particularity, the complaint must allege facts showing how, when, where, to whom, and by what means the representations were tendered. Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.

A review of the fourth and fifth causes of action reveals that the Cross-Complainants did not plead the claim with particularity. There are eight Cross-Defendants. The Cross-Complainants do not plead particular facts regarding each Cross-Defendant to identify how, when, where, to whom, and by what means each of the eight Cross-Defendants tendered the misrepresentations.
Instead, the Cross-Complainants allege in paragraph 58 of the fourth cause of action for fraud that the Cross-Defendants prepared and signed documents without authorization, attempted to conceal the facts that Belle Stein was using her maiden name, conducted a foreclosure sale, and used the property as security to borrow money. There are no allegations identifying the specific representations made by Belle Stein to the Cross-Complainants and no allegations pleading with particularity that Belle Stein knew that the representations were false and that Belle Stein had an intent to defraud. This is insufficient to plead the fraud claim.
In paragraph 67, the Cross-Complainants allege that they are informed and believe that the Cross-Defendants made the “foregoing misrepresentation and/or did the foregoing acts as alleged”. There are no particular facts regarding Belle Stein. This is insufficient to plead the negligent misrepresentation claim.

Therefore, the Court will sustain the demurrers to the fourth and fifth causes of action.

California law imposes the burden on the Cross-Complainants to demonstrate the manner in which they can amend their pleadings to state their claims against these Defendants. Goodman v. Kennedy (1976) 18 Cal.3d 335, 349. The Cross-Complainants made a general request for leave to amend. This is insufficient to meet their burden because they do not offer any basis to find that they correct the defects in their fourth and fifth causes of action by amendment. Accordingly, the Court will not grant leave to amend.

3. Demurrer to Sixth Cause of Action for Embezzlement
The Cross-Defendant argues that this is not a cause of action. The Cross-Complainant did not identify any legal authority that authorizes him to bring a cause of action for embezzlement.

A review of the claim reveals that the Cross-Complainants allege in paragraph 73 that the Cross-Defendants, on at least one occasion, permitted Belle Stein to execute loan documents to obtain a loan on behalf of LA Tucson. In paragraph 74, the Cross-Complainants allege that the Cross-Defendants received a portion of the loan and that these funds were “effectively stolen”. There are no allegations identifying any specific amount of money. These allegations do not plead any recognized cause of action.

Accordingly, the Court will sustain the demurrer to the sixth cause of action. It does not appear reasonably possible to correct this by amendment because embezzlement is not a recognized cause of action.

4. Demurrer to Seventh Cause of Action for Unjust Enrichment
The Cross-Defendant argues that this is not a cause of action. Under California law, there is no cause of action for unjust enrichment. Melchior v. New Line Productions, Inc. (2003) 106 Cal. App. 4th 779, 794. The phrase “unjust enrichment” does not describe a theory of recovery, but a general principle underlying various legal doctrines and remedies. Id. It is synonymous with restitution. Id.

Accordingly, the Court will sustain the demurrer to the seventh cause of action because it does not plead a recognized claim. Since this is not a cause of action, the Court will not grant leave to amend.

5. Demurrer to Eighth Cause of Action for Money Had and Received
The Cross-Defendant argues that this cause of action does not plead sufficient facts. The eighth cause of action is based on common counts and has the following elements:

1) the statement of indebtedness in a certain sum,
2) the consideration, i.e., goods sold, work done, money loaned, and
3) nonpayment.
Allen v. Powell (1967) 248 Cal. App. 2d 502, 510.

Common counts are merely abbreviated and stereotyped claims that the defendant is indebted to the plaintiff for a variety of commonly recurring reasons, e.g., there was an open book account or the parties agreed to the amount owing in an account stated. H. Russell Taylor’s Fire Prevention Service, Inc. v. Coca Cola Bottling Corp. (1979) 99 Cal. App. 3d 711, 717-718. The common counts could be used for the enforcement of express promises if they were such as to create a money debt, as well as for the enforcement of implied promises and quasi contracts. Id. The gist of this kind of action is that the defendant, upon the circumstances of the case, is obliged by the ties of natural justice and equity to refund the money. Id.

A review of the eighth cause of action reveals that it does not identify a debt owed by Belle Stein to the Cross-Complainants in a certain sum. Instead, the Cross-Complainants allege that the Cross-Defendants are indebted in an amount of money that will be shown at trial. This is insufficient because it does not plead that there is a debt in a certain sum.

The Cross-Complainants did not offer any argument to oppose this demurrer in their opposition papers. Further, the Cross-Complainants did not request leave to amend this cause of action.

Therefore, the Court will sustain the demurrer to the eighth cause of action for money had and received. Since the Cross-Complainants did not oppose this demurrer or request leave to amend, the Court will sustain the demurrer without leave to amend.

6. Demurrer to Ninth Cause of Action for Intentional Interference with Prospective Economic Advantage
The Cross-Complainants state on page 6, at lines 18 and 19, of their opposition that they “seek to withdraw and dismiss” this cause of action. Since there is no dismissal on record, the Court will sustain the demurrer without leave to amend.

10. Motion to Strike
The Cross-Defendant requests that the Court strike Edward Stein and the Estate of Edward Stein from the First amended Cross-Complaint on the ground that they are not proper parties. The Cross-Defendants argue that Edward Stein and his Estate can be sued only through their representatives.
The Cross-Complaint alleges in paragraph 26 that Edward Stein passed away in October 2012. Since Edward Stein has passed away, any claims against him may be brought against his estate. In paragraph 6, the Cross-Complainants allege that ROES 46 to 50 are the administrators, executors, and representatives of the Estate of Edward Stein. Since the Cross-Complaint has brought these claims against the Estate of Edward Stein through its administrators, executors, and representatives, there are no grounds to strike it from the pleadings.

Therefore, the Court will deny the motion to strike.

RULING:
OVERRULE demurrer to first cause of action.
SUSTAIN demurrers to fourth, fifth, sixth, seventh, eighth, and ninth causes of action without leave to amend.
DENY motion to strike.