Case Number: EC062622    Hearing Date: November 07, 2014    Dept: A

Hsiao v Lin

DEMURRER

Calendar: 15
Case No: EC062622
Date: 11/7/14
MP: Defendants, Yanfei Lin, Jialiang Zhou, and Yi Zhou
RP: Plaintiff, Angela Hsiao

ALLEGATIONS IN COMPLAINT:
The Plaintiff entered into a purchase agreement with the Defendant, Yanfei Lin, for the purchase of real property based on false representations made by the Defendants. The Defendant breached the contract by attempting to cancel it. Further, the Defendant has attempted to avoid a debt by transferring title to the property to her husband, Jialiang Zhou. The Plaintiff brought this action to seek damages and specific performance of the contract.

CAUSES OF ACTION IN COMPLAINT:
1) Breach of Contract
2) Special Performance
3) Fraud Conveyance
4) Fraud
5) Negligent Misrepresentation

RELIEF REQUESTED:
Demurrer to fourth and fifth causes of action.

DISCUSSION:
This hearing concerns the Defendants’ demurrers to the fourth and fifth causes of action in the Complaint. The Defendants argue that the causes of action lack the particular facts needed to plead torts of deceit.

The fourth cause of action for fraud must include the following elements:

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 causes of action are torts of deceit and the facts constituting each element must be alleged with particularity; the claims 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. For example, 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.

The fourth and fifth causes of action are directed at all Defendants, which includes Yanfei Lin, Jialiang Zhou, and Yi Zhou. The Plaintiff alleges in paragraph 54 of the fourth cause of action for fraud and in paragraph 60 of the fifth cause of action for negligent misrepresentation that the Defendants made misrepresentations and concealed information regarding the ownership of the property and their authority to enter into the purchase agreement.
There are no particular allegations regarding any of the three Defendants, e.g., what representation did Yanfei Lin tender, how did she tender it, when did she tender it, where did she tender it, or by what means did she tender it. Accordingly, the fourth and fifth causes of action lack the particular allegations needed to plead the element of a false representation with regards to each of the three moving parties.
Further, there are no allegations identifying the representation. The Plaintiff alleges that the representation concerned the ownership of the property. However, the Plaintiff does not allege the specific nature of the representation. This is insufficient to plead the element of representation.

Finally, the Plaintiff has combined two theories of fraud by alleging in paragraphs 54 and paragraph 60 that the Defendants both made representations and concealed information about the ownership of the property. It is improper to combine a claim based on a representation and on the concealment of information because the causes of action have different elements. For example, a cause of action for fraudulent concealment must include the following elements:

1) the defendant must have concealed or suppressed a material fact,
2) the defendant must have been under a duty to disclose the fact to the plaintiff,
3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff,
4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and
5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.
Lovejoy v. AT&T Corp. (2004) 119 Cal. App. 4th 151, 157-158.

The Plaintiff does not identify the specific material fact that was concealed and does not plead any facts demonstrating that the Defendants each had a duty to disclose that fact to the Plaintiff. In addition, the Plaintiff should plead the fraudulent concealment cause of action separately.

Accordingly, the Court will sustain the demurrers to the fourth and fifth causes of action. Since this is the original Complaint, the Court will grant the Plaintiff the opportunity to attempt to correct the defects through amendment.
RULING:
Sustain demurrers to fourth and fifth causes of action with twnety days leave to amend.