Case Number: 19STCV10198 Hearing Date: September 10, 2019 Dept: 20

Tentative Ruling

Judge Dalila C. Lyons

Department 20

Hearing Date: Tuesday, September 10, 2019

Case Name: Barry Kellman v. Title Recovery Services, LLC

Case No.: 19STCV10198

Three Demurrers with Two Motions to Strike and Two Joinders:

Moving Parties: (1) Defendant Temidayo Akinyemi;

(2) Defendant Title Recovery Services, LLC; and

(3) Defendant TRG Realty Company, Inc.

Joining Parties: (1) Defendants Jaffar Mahmood, Katrina Mahmood, Dennis Mehringer, Samuel Graham, Rebecca Simon-Pearson to the demurrer of Temidayo Akinyemi; and

(2) Defendant Figure 8 PM, Inc. Joinder to Demurrer of Title Recovery Services, LLC.

Responding Party: Plaintiff Barry Kellman

Rulings:

DEMURRER WITH MOTION TO STRIKE NO. 1 BY DEFENDANT TEMIDAYO AKINYEMI

Defendant Temidayo Akinyemi’s demurrer to the:

First Cause of Action in the Complaint is SUSTAINED WITHOUT LEAVE TO AMEND.

Second to Fifth Causes of Action in the Complaint is SUSTAINED WITH 10 DAYS LEAVE TO AMEND.

Defendant Temidayo Akinyemi’s motion to strike punitive damages from the Complaint is MOOT.

DEMURRER WITH MOTION TO STRIKE NO. 2 BY DEFENDANT TITLE RECOVERY SERVICES, LLC

Defendant TITLE RECOVERY SERVICES, LLC’s demurrer to the:

First Cause of Action in the Complaint is SUSTAINED WITHOUT LEAVE TO AMEND.

Fourth to the Fifth Causes Action in the Complaint is SUSTAINED WITH 10 DAYS LEAVE TO AMEND.

Defendant Title Recovery Services, LLC’s motion to strike punitive damages from the Complaint is MOOT.

DEMURRER NO. 3 BY DEFENDANT TRG REALTY COMPANY, INC.

Defendant TRG Realty Company, Inc.’s demurrer to the First Cause of Action in the Complaint is SUSTAINED WITHOUT LEAVE TO AMEND.

Defendant TRG Realty Company, Inc. must submit a proposed judgment of dismissal five days from the date of this ruling. C.C.P. §581(f)(2

JOINDER NO. 1 BY DEFENDANTS JAFFAR MAHMOOD, KATRINA MAHMOOD, DENNIS MEHRINGER, SAMUEL GRAHAM, AND REBECCA SIMON-PEARSON

Defendants Jaffar Mahmood, Katrina Mahmood, Dennis Mehringer, Samuel Graham, and Rebecca Simon-Pearson’s joinder to the demurrer of Temidayo Akinyemi is GRANTED.

Defendants Jaffar Mahmood, Katrina Mahmood, Dennis Mehringer, Samuel Graham, and Rebecca Simon-Pearson’s demurrer to the Third Cause of Action is OVERRULED.

Defendants Jaffar Mahmood, Katrina Mahmood, Dennis Mehringer, Samuel Graham, and Rebecca Simon-Pearson shall file an answer to the Complaint within 15 days of this order or as otherwise agreed upon with Plaintiff on a date after the First Amended Complaint is filed.

JOINDER NO. 2 BY DEFENDANT FIGURE 8 PM, INC.

Defendant Figure 8 PM, Inc.’s joinder to the demurrer of Title Recovery Services, LLC is GRANTED.

Defendant Figure 8 PM, Inc.’s demurrer to all five causes of action in the Complaint is SUSTAINED WITH 10 DAYS LEAVE TO AMEND.

Moving parties to give notice.

BACKGROUND

On March 25, 2019, Plaintiff Barry Kellman filed the Complaint against Defendants Title Recovery Services, LLC; Temidayo Akinyemi; Figure 8 PM, Inc.; and TRG Realty Company, Inc. (“TRG”) (collectively “Landlord Defendants”); Mary E. Ni (“Ni”) ; Jenny N. Tian (“Tian”); Samuel Graham; Dennis Mehringer; Jaffar Mahmood; Katrina Mahmood; Rebecca Laura Simon-Pearson (collectively, “New Owners”); and Does 1-5 for (1) Violation of the Unruh Civil Rights Act; (2) Wrongful Eviction; (3) Offering Withdrawn Rental Units for Rent within Two Years of Withdrawal under the Ellis Act (only against demurring New Owners) ; (4) Fraud; and (5) Negligent Misrepresentation. All defendants are demurring except, Ni and Tian who have answered the Complaint. The only cause of action against TRG is the first.

Plaintiff alleges that he lived in a rent-controlled apartment at 2149 1/2 N. Valentine Street, Los Angeles (the “Apartment”), which was located in one of three bungalows, 2145, 2147, and 2149 N. Valentine Street, on a lot designed assessor’s parcel number 5420-036-009 (the “Property”). The other units on the Property were also rented out as apartments. Plaintiff alleges that on December 11, 2017, the Landlord Defendants purchased the Property with the intention of removing the rent-control restrictions and selling it to the New Owners as tenants-in-common, who would then rent out parts of the Property – namely, the Apartment. Plaintiff alleges the Landlord Defendants intended that the New Owners would offer the Apartment for rent because the Landlord Defendants told the New Owners the apartment could be rented out through Airbnb or other short-term rental websites within two years of the Apartment being taken off the rental market. Plaintiff alleges the Landlord Defendants and the New Owners violated the Ellis Act by offering the Apartment for rent within two years of withdrawing the Apartment from the rental market.

MOVING PARTY POSITION

Defendant Temidayo Akinyemi (“Akinyemi”) demurrers to the Complaint on the grounds that the Complaint fails to allege an alter ego theory making Akinyemi personally liable for the actions of Defendant Title Recovery Services, LLC (“Title Recovery”) and on the grounds stated by Title Recovery as to each of the five causes of action.

Defendants Title Recovery and Figure 8 PM, Inc. (“Figure 8”) demur to the conspiracy allegations in the Complaint supporting liability for all five causes of action–particularly the Second and Third Causes of Action–on the grounds that Plaintiff has not sufficiently pleaded the nature and operation of the conspiracy.

Defendant TRG, Title Recovery and Figure 8 demur to the First Cause of Action on the grounds that perceived income and long-term rent-stabilized tenancy are not protected characteristics under the Unruh Civil Rights Act.

Defendants Title Recovery and Figure 8 demur to the Fourth Cause of Action on the grounds that Plaintiff has failed to allege intent to re-rent the apartment by Title Recovery or Figure 8, or to allege any misrepresentations made by Title Recovery or Figure 8 with the requisite particularity.

Defendants Title Recovery and Figure 8 demur to the Fifth Cause of Action on the grounds that Plaintiff has failed to allege a negligent misrepresentation of a present or past fact made by Title Recovery or Figure 8 with the requisite particularity.

Defendants Jaffar Mahmood, Katrina Mahmood, Dennis Mehringer, Samuel Graham, and Rebecca Simon-Pearson (“Demurring New Owners”) demur to the Third Cause of Action by joining the demurrer of Akinyemi, which argues Akinyemi’s actions were taken on behalf of Title Recovery, Akinyemi is not alleged to have re-rented the Apartment, and Akinyemi cannot conspire with his LLC as its managing member.

Defendants Title Recovery and Akinyemi move to strike allegations supporting and prayers requesting punitive damages.

OPPOSITION

Plaintiff opposes Akinyemi’s demurrer on the grounds that the Complaint alleges a conspiracy among all Defendants, including Akinyemi individually. Plaintiff opposes the demurrer of title Recovery, Figure 8, and TRG on the grounds that a conspiracy “to deprive [Plaintiff] of his tenancy rights” has been alleged against all Defendants.

Plaintiff opposes Title Recovery and Figure 8’s demurrer to the First Cause of Action on the grounds that rent stabilization serves as a proxy for age, which is a protected category.

Plaintiff opposes Title Recovery and Figure 8’s demurrer to the Second and Third Causes of Action on the grounds that Plaintiff has alleged a conspiracy among the Defendants.

Plaintiff opposes Title Recovery and Figure 8’s demurrer to the Fourth and Fifth Causes of Action on the grounds that Plaintiff has alleged a conspiracy among Defendants, so Title Recovery and Figure 8’s representations to Plaintiff that Plaintiff was obligated to move out since Title Recovery was removing the Apartment from the rental market were false when made.

REPLY

Plaintiff has not alleged age discrimination in the Complaint nor cited any legal authority to support his contention that long-term rent-stabilized tenancy can be a proxy for age with case law allowing liability.

ANALYSIS

I. Joinders

Defendant Figure 8 moves to join the demurrer of Title Recovery. Demurring New Owners move to join the demurrer of Akinyemi. Plaintiff does not oppose these joinders. Accordingly, Demurring Owners and Figure 8’s motions to join the respective demurrers are GRANTED.

II. Demurrer

A demurrer for sufficiency tests whether the complaint states a cause of action. Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747. When considering demurrers, courts read the allegations liberally and in context. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994; Weil & Brown, Civ. Pro. Before Trial (The Rutter Group 2011) ¶7:8. “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed (CCP §§ 430.30, 430.70). The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.” Hahn 147 Cal.App.4th at 747. But courts do not have to ignore or turn a blind eye to allegations that are inconsistent with attached exhibits or to facts which are judicially noticed. Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604; Hoffman v. Smithwoods RV Park, LLC (2009) 179 Cal.App.4th 390, 400. A complaint will be upheld against a demurrer if it pleads facts sufficient to place the defendant on notice of the issues sufficient to enable the defendant to prepare a defense. Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 549-50.

A. Alter Ego as to Akinyemi

Although Akinyemi makes several arguments against each cause of action individually, Akinyemi’s alter ego argument is sufficient to sustain Akinyemi’s demurrer to all five causes of action. Accordingly, with the exception of the first cause of action, the Akinyemi’s other grounds for the demurrer are not discussed.

“Ordinarily, a corporation is regarded as a legal entity, separate and distinct from its stockholders, officers and directors, with separate and distinct liabilities and obligations.” Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538. “A corporate identity may be disregarded-the “corporate veil” pierced-where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation.” Ibid. “In California, two conditions must be met before the alter ego doctrine will be invoked.” Ibid. “First, there must be such a unity of interest and ownership between the corporation and its equitable owner that the separate personalities of the corporation and the shareholder do not in reality exist.” Ibid. “Second, there must be an inequitable result if the acts in question are treated as those of the corporation alone.” Ibid.

Here, Plaintiff has not pleaded facts sufficient to state any causes of action against Akinyemi individually on the grounds that Plaintiff has pleaded that Akinyemi’s only actions were taken as manager of the LLC: Title Recovery. All five of Plaintiff’s causes of action are based on the purchase of the Property by Title Recovery, subsequent sale of the Property to the New Owners, and renting out of the Apartment within the Property despite the Ellis Act’s restrictions. Plaintiff alleges that Title Recovery and only Title Recovery purchased and then sold the Property to the New Owners. Plaintiff’s only allegations against Akinyemi are that Akinyemi acted for Title Recovery as its managing member. Because Title Recovery is a distinct legal entity and Akinyemi merely its member, Akinyemi’s actions on behalf of Title Recovery can create liability for Title Recovery only, unless Plaintiff pleads facts showing Title Recovery is a mere alter ego of Akinyemi.

Plaintiff has not pleaded any facts alleging Title Recovery is a mere alter ego of Akinyemi because Plaintiff has not pleaded a unity of interest and ownership between Title Recovery and Akinyemi. Therefore, Plaintiff has failed to allege facts sufficient to state any causes of action against Akinyemi.

Plaintiff’s allegations of conspiracy between all Defendants cannot substitute for alter ego allegations against Akinyemi because an officer or director cannot conspire with its corporate employer. Since the officers, employees, and directors of a corporation act on behalf of the corporation, the officers, directors, and employees cannot conspire with the corporation because then the corporation would be conspiring with itself. Black v. Bank of America N.T. & S.A. (1994) 30 Cal.App.4th 1, 6 (rejecting that a subordinate employee of a corporation could be liable for conspiring with the corporate principal because this would destroy the settled rule that a corporation cannot conspire with itself).

Accordingly, Akinyemi’s demurrer to the:

Second to Fifth Causes of Action is SUSTAINED WITH 10 DAYS LEAVE TO AMEND; and

First Cause of Action for Violation of the Unruh Civil Rights Act is SUSTAINED WITHOUT LEAVE TO AMEND for the reasons set forth below.

B. Conspiracy Allegations as to Title Recovery, Akinyemi, TRG, and Figure 8

Plaintiff alleges a conspiracy among Title Recovery, Figure 8, Akinyemi, and TRG only.

Civil conspiracy “is a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration. By participation in a civil conspiracy, a coconspirator effectively adopts as his or her own the torts of other coconspirators within the ambit of the conspiracy.” City of Indus. v. City of Fillmore (2011) 198 Cal.App.4th 191, 211-212 (citing Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510–511). “The elements of a civil conspiracy are (1) the formation of a group of two or more persons who agreed to a common plan or design to commit a tortious act; (2) a wrongful act committed pursuant to the agreement; and (3) resulting damages.” Id. at p. 212.

“In order to state a cause of action based upon a conspiracy theory the plaintiff must allege the formation and operation of the conspiracy, the wrongful act or acts done pursuant to it, and the damage resulting from such acts. In making such allegations bare legal conclusions, inferences, generalities, presumptions, and conclusions are insufficient.” State of Cal. ex rel. Metz v. CCC Information Services, Inc. (2007) 149 Cal.App.4th 402, 419.

Plaintiff has failed to allege facts regarding the nature and operation of the conspiracy to “deprive [Plaintiff] of his tenancy rights in the Apartment.” Assuming that “deprive Plaintiff of his tenancy rights” means to commit the five torts alleged in the Complaint, Plaintiff has not alleged how Title Recovery, Akinyemi, TRG, and Figure 8 (“Landlord Defendants”) could conspire to commit the torts arising from Plaintiff’s tenancy[1] when Plaintiff does not allege how any of these Landlord Defendants re-rented the Apartment or conspired with the New Owners to re-rent the Apartment.

The five tortious acts–the five causes of action–that could satisfy the first two elements of a civil conspiracy all depend upon the Apartment being re-rented. Plaintiff fails to allege sufficient facts showing the Landlord Defendants agreed to a common plan to do anything more than evict Plaintiff, sell the Property with a misrepresentation to the New Owners about the New Owner’s ability to re-rent the Apartment, and waltz away with a million dollars in profit. Plaintiffs allegations that (1) the Landlord Defendants conspired since December 2017 and that (2) Akinyemi and TRG make it their business to remove rent stabilized units from the market and inform potential buyers the units can be re-rented, without more, fail to allege the wrongful act of re-renting the Apartment–a predicate to every cause of action–was committed pursuant to the agreement of the Landlord Defendants.

In sum, Plaintiff has failed to allege a conspiracy to commit any of the torts enumerated in the five causes of action. If such facts, exist Plaintiff may amend the complaint.

Accordingly, Title Recovery, Akinyemi, and Figure 8’s demurrer to the conspiracy allegations is SUSTAINED WITH 10 DAYS LEAVE TO AMEND.

TRG’s demurrer to the conspiracy allegations is SUSTAINED WITHOUT LEAVE TO AMEND since TRG could not, as a matter of law, have agreed to a common plan or design to commit a tortious act (i.e., intentionally discriminate against Plaintiff by evicting him from his apartment) if Plaintiff was already evicted when TRG was hired. A defendant cannot not “join in a conspiracy that had been completed.” Kidronv. Movie Acquisition Corp. (1995) 40 Cal.App.4th 1571, 1595 (citations omitted.)

C. First Cause of Action for Violation of Unruh Civil Rights Act as to TRG, Title Recovery, Akinyemi, and Figure 8

Plaintiff’s First Cause of Action is alleged against Title Recovery, Figure 8, Akinyemi, and TRG only.

The Unruh Civil Rights Act prohibits discrimination by business establishments based on sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status.” Civ. Code § 51(b). In addition, “the Act proscribes arbitrary discrimination based on an individual’s age—a personal characteristic similar to the classifications enumerated in the Act.” Candelore v. Tinder, Inc. (2018) 19 Cal.App.5th 1138, 1145. However, when the Supreme Court evaluated “the legal status of a claim of economic discrimination under a general civil rights statute prohibiting discrimination in public accommodations because of race, sex, religion, etc.” – the Unruh Civil Rights Act – the Court held “[t]hat claim has no merit.” Harris v. Capital Growth Investors XIV (1991) 52 Cal.3d 1142, 1169 (superseded by statute on other grounds as acknowledged in Munson v. Del Taco, Inc. (2009) 46 Cal.4th 661, 624).

Here, Plaintiff has failed to allege facts sufficient to state a cause of action for violation of the Unruh Civil Rights Act against Defendants TRG, Title Recovery, Akinyemi, and Figure 8 because Plaintiff has not alleged he was discriminated against based on a protected classification. Neither has Plaintiff alleged any characteristic that is fundamental to his identity, beliefs or self-definition. The Complaint alleges that Plaintiff was discriminated against and “[a] substantial motivating reason for Defendants’ conduct was their perception of Mr. Kellman’s income, or status as a long-term rent-stabilized tenant of a rent-stabilized Apartment.” Compl. ¶ 34. The California Supreme Court has explicitly stated discrimination based on income level does not violate the Unruh Civil Rights Act. Harris, supra, 52 Cal.3d at p. 1169. Plaintiff has offered no case law contradicting the holding in Harris, supra, nor any case law establishing long-term residence in a rent-stabilized apartment is a personal characteristic similar to the classifications enumerated in the Unruh Civil Rights Act. Low-income and tenants in rent-controlled apartments are not protected classifications in the Unruh Civil Rights Act.

Clearly, if Plaintiff truly believed he was discriminated on any of the protected characteristics such as race, sex, religion, he would have so alleged in the Complaint. Those are not facts Plaintiff could have been unaware of at the time he filed his Complaint. The defects in Plaintiff’s First Cause of Action for Violation of the Unruh Civil Rights Act are fatal as a matter of law and cannot be remedied through an amendment. There appears no reasonable possibility that Plaintiff, who presumably knew his age, race, sex, religion, etc., at the time he filed the Complaint can cure the defect by amendment. The Complaint does not allege or imply that Plaintiff was discriminated due to his age. Any amendment alleging discrimination based on Plaintiff’s age, which Plaintiff knew at the time he filed the Complaint, would be inconsistent with the Complaint and a sham. Banis Restaurant Design, Inc. v. Serrano (2005) 134 Cal.App.4th 1035, 1044 (“When a complaint contains allegations that are fatal to a cause of action, a plaintiff facing demurrer cannot avoid those defects simply by filing an amended complaint that omits the problematic facts or pleads facts inconsistent with those alleged earlier.”)

Plaintiff’s argument that rent stabilization is a proxy for age is unavailing, unsupported by legal authority, and makes no sense. Young people can also be low income. An allegation that “age can be a proxy for income” does not mean the reverse is true, that income is a proxy for age. Even if rent stabilization was a proxy for age, Plaintiff has not cited any case law that “discrimination by proxy” is prohibited by the Unruh Civil Rights Act.

The First Cause of Action as to TRG fails for an additional reason. Plaintiff admitted in his Complaint that he had already vacated his apartment at the time TRG was hired. Compl. ¶ 22. This allegation establishes that TRG could not have intentionally discriminated against Plaintiff because his eviction was already complete prior to any involvement by TRG in the Property.

Accordingly, TRG, Title Recovery, Akinyemi and Figure 8’s demurrer to the First Cause of Action is SUSTAINED WITHOUT LEAVE TO AMEND. This cause of action is not alleged against any of the other defendants.

D. Second Cause of Action for Wrongful Eviction as to Title Recovery and Figure 8

The Second Cause of Action is alleged against Title Recovery, Figure 8, and Akinyemi.

Los Angeles Municipal Code Section 151.09(A) permits a landlord to evict a tenant from a rent-stabilized apartment if, among other reasons: the landlord “seeks in good faith” recovery of the apartment to either “(a) demolish the rental unit; or (b) to remove the rental unit permanently from rental housing use.” LAMC § 151.09(A)(10). A landlord demonstrates good faith by “a. adhering to all provision of the Rent Stabilization Ordinance and b. not using eviction as a method of circumventing any of the provisions of the Rent Stabilization Ordinance.” Los Angeles Rent Adjustment Commission Regulations § 611.01.

Here, Plaintiff has failed to allege facts sufficient to state a cause of action for Wrongful Eviction because Plaintiff has not alleged facts showing Title Recovery and Figure 8 did not demonstrate good faith by their actions. Plaintiff alleges that Title Recovery purchased the Property, evicted Plaintiff, sold the Property to the New Owners, and the New Owners re-rented the Property. Plaintiff does not allege that Title Recovery or Figure 8 re-rented the Apartment, caused the Apartment to be re-rented, or failed to permanently remove the Apartment from the rental market for the six months that Title Recovery owned the Apartment. Because a landlord demonstrates good faith when the landlord adheres to the statute and does not circumvent the statute, Plaintiff has not alleged facts showing Title Recovery or Figure 8’s actions did not adhere to the statute or circumvented the statute. Instead, Plaintiff alleges Title Recovery and Figure 8 followed the procedure to evict Plaintiff and then the New Owners violated the statute. Plaintiff labelling Title Recovery and Figure 8’s actions “bad faith” is a mere legal conclusion without any supporting facts showing Title Recovery acted in bad faith. Plaintiff cites no case law showing that under LAMC Section 151.09(A), a party cannot be liable for the actions of another absent an allegation of conspiracy or agency.

As discussed above, Plaintiff’s allegations of conspiracy are insufficiently alleged to create liability for Title Recovery or Figure 8.

Accordingly, Title Recovery and Figure 8’s demurrer to the Second Cause of Action is SUSTAINED WITH 10 DAYS LEAVE TO AMEND.

E. Third Cause of Action for Offering Withdrawn Units for Rent within Two Years of Withdrawal Under the Ellis Act as to Title Recovery and Figure 8

Plaintiff’s Third Cause of Action is alleged against Title Recovery, Figure 8, Akinyemi, and the New Owners only.

“If a rental unit that was the subject of a Notice of Withdrawal…is offered for rent or lease within two years of the date of withdrawal of the rental unit from the rental market…[t]he landlord shall be liable to any tenant or lessee who was displaced from the property…” LAMC § 151.25. “If the accommodations are offered again for rent or lease for residential purposes within two years of the date the accommodations were withdrawn from rent or lease…. [t]he owner of the accommodations shall be liable to any tenant or lessee who was displaced from the property by that action.” Govt. Code § 7060.2(b)(1).

Plaintiff has failed to allege facts sufficient to state a cause of action for violation of either LAMC § 151.25 or Government Code § 7060.2(b)(1) against Title Recovery or Figure 8 because Plaintiff has failed to allege Title Recovery or Figure 8 were the “landlord” or “owner” of the Apartment when it was “offered for rent or lease” or re-rented. Plaintiff cites no case law holding a previous owner or landlord can be liable for the actions of a subsequent landlord or owner. As discussed above, Plaintiff’s allegations of conspiracy are insufficiently alleged to create liability for Title Recovery or Figure 8.

Accordingly, Title Recovery and Figure 8’s demurrer to the Third Cause of Action is SUSTAINED WITH 10 DAYS LEAVE TO AMEND.

F. Fourth Cause of Action for Fraud as to Title Recovery and Figure 8

Plaintiff’s Fourth Cause of Action is alleged against Title Recovery, Figure 8, and Akinyemi only.

Tortious fraud or deceit occurs when a party “willfully deceives another with the intent to induce him to alter his position to his injury or risk.” Civ. Code § 1709. “The elements of fraud are (1) misrepresentation, (2) knowledge of falsity, (3) intent to induce reliance on the misrepresentation, (4) justifiable reliance on the misrepresentation, and (5) resulting damages.” Cansino v. Bank of America (2014) 224 Cal. App. 4th 1462, 1459. Stating a fraud cause of action means “pleading facts which show how, when, where, to whom, and by what means the representations were tendered.” Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.

Plaintiff has failed to allege facts sufficient to constitute a cause of action for fraud against Title Recovery because Plaintiff’s legal conclusion that Title Recovery misstated that Title Recovery was permanently removing the Apartment from the rental market is contradicted by Plaintiff’s other allegations and the exhibits to the Complaint. For the same reasons, Plaintiff fails to sufficiently allege Title Recovery knew any statement was false at the time. Plaintiff’s bare assertion that the statement was false is a mere legal conclusion contradicted by the facts Plaintiff has alleged. Plaintiff has alleged that Title Recovery purchased the Property, told Plaintiff he was being evicted because Title Recovery was taking the Apartment off the rental market, Title Recovery took the Apartment off the rental market, sold the Property to the New Owners, and then the New Owners re-rented the Apartment. Plaintiff has not alleged Title Recovery re-rented the Apartment or caused the Apartment to be re-rented.

Additionally, Plaintiff attached as Exhibit A to the Complaint the allegedly false statement by Title Recovery: the 120 Day Notice to Terminate Tenancy served on Plaintiff (“Notice”). Rather than a statement about what future owners would do with the Apartment, the Notice merely states “the rental unit where you reside is being withdrawn from the rental market and you are hereby required … to remove from and deliver up possession of the above-described premises which you currently hold and occupy.” Compl., Exh. A. This statement does not contain any information about what future owners will do or how long the Apartment will be off the rental market. In fact, the Notice contemplates the Apartment being returned to the rental market because the Notice describes Plaintiff’s right of first refusal if the Apartment is subsequently offered for rent. Because Plaintiff’s allegation that Title Recovery knowingly made a false statement about the Apartment’s future use is contradicted by the facts in Plaintiff’s exhibits and by Plaintiff’s own allegations that Title Recovery in fact removed the Apartment from the rental market and Title Recovery never re-rented the Apartment, Plaintiff’s legal conclusion that Title Recovery’s made a false statement will be ignored. As discussed above, Plaintiff’s conspiracy allegations are insufficiently pleaded to create liability for Title Recovery here. Thus, Plaintiff has failed to plead facts sufficient to state a cause of action for fraud against Title Recovery.

Plaintiff cannot state a cause of action for fraud against Figure 8 because the two statements the Landlord Defendants made to Plaintiff are two documents attached to the Complaint as Exhibits A and B. Exhibit A comes from Title Recovery and Exhibit B comes from the City of Los Angeles. Therefore, Plaintiff has not alleged any statements by Figure 8.

Accordingly, Title Recovery and Figure 8’s demurrer to the Fourth Cause of Action for Fraud is SUSTAINED WITH 10 DAYS LEAVE TO AMEND.

G. Fifth Cause of Action for Negligent Misrepresentation as to Title Recovery and Figure 8

The Fifth Cause of Action is alleged against Title Recovery, Figure 8, and Akinyemi.

Negligent misrepresentation consists of the assertion, as a fact, of something that is not true by one who lacks reasonable grounds for believing it to be true. Civ. Code § 1710(2); Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370, 407. The elements of a claim for negligent misrepresentation are a misrepresentation of fact, lack of reasonable grounds, a duty to plaintiff, intent to induce reliance, reliance, causation and harm. Majd v. Bank of America, NA (2015) 243 Cal.App.4th 1293, 1307. “To be actionable, a negligent misrepresentation must ordinarily be as to past or existing material facts.” Tarmann v. State Farm Mut. Auto Ins. Co. (1991) 2 Cal.App.4th 153, 158. “Predictions as to future events, or statements as to future action by some third party, are deemed opinions, and not actionable fraud.” Ibid.

Plaintiff has failed to allege facts sufficient to constitute a cause of action for negligent misrepresentation against Title Recovery for the same reasons discussed above regarding Plaintiff’s fraud cause of action.

In addition, even assuming Title Recovery’s statement that the Apartment was being withdraw from the rental market could be construed as a statement that the Apartment would remain withdrawn permanently, such a statement by Title Recovery would be a prediction about the future and therefore not actionable.

As discussed above, Plaintiff’s conspiracy allegations are insufficiently pleaded to create liability for Title Recovery here. Thus, Plaintiff has failed to plead facts sufficient to state a cause of action for negligent misrepresentation against Title Recovery.

Plaintiff cannot state a cause of action for negligent misrepresentation against Figure 8 because the two statements the Landlord Defendants made to Plaintiff are two documents attached to the Complaint as Exhibits A and B. Exhibit A comes from Title Recovery and Exhibit B comes from the City of Los Angeles. Therefore, Plaintiff has not alleged any statements by Figure 8.

Accordingly, Title Recovery and Figure 8’s demurrer to the Fifth Cause of Action is SUSTAINED WITH 10 DAYS LEAVE TO AMEND.

In sustaining the demurrers with leave to amend as noted above, the court is assuming that at the hearing Plaintiff will represent to the Court that he is able to cure the defects in the Complaint noted herein and allege the required facts to state the causes of action.

H. Third Cause of Action for Offering Withdrawn Units for Rent within Two Years of Withdrawal Under the Ellis Act as to Demurring New Owners

Plaintiff’s Third Cause of Action is alleged against Title Recovery, Figure 8, Akinyemi, and the New Owners.

The sole cause of action alleged against the Demurring New Owners is the Third Cause of Action for violating the Ellis Act by offering withdrawn units for rent within two years of those units being permanently taken off the rental market. Demurring New Owners are alleged to each be owners of the Property as tenants in common at the time the Apartment was offered for rent in violation of the Ellis Act.

Demurring New Owners joined Akinyami’s demurrer and motion to strike. Demurring New Owners offer no argument against their liability beyond the arguments made in Akinyemi’s demurrer.

Akinyemi’s demurrer to the Third Cause of Action argues that (1) the Complaint does not allege Akinyemi individually offered the Apartment for rent, (2) all of Akinyemi’s actions were taken on behalf of Title Recovery, and (3) Akinyemi cannot conspire with Title Recovery because Akinyemi is the managing member of Title Recovery.

None of Akinyemi’s arguments against the Third Cause of Action apply to Demurring New Owners. First, Unlike the Demurring New Owners, Akinyemi did not offer the apartment for rent. The Complaint alleges Demurring New Owners offered the Apartment for rent in violation of the Ellis Act, and also alleges Demurring New Owners owned the Property–including the Apartment–as tenants in common when the Apartment was offered for rent. Second, Demurring New Owners are not alleged to be officers of Title Recovery or to have acted as corporate agents of Title Recovery. Third, Demurring New Owners can conspire with Title Recovery because Demurring New Owners are not officers, directors, or employees of Title Recovery.

Accordingly, Demurring New Owners’ demurrer to the Third Cause of Action in the Complaint is OVERRULED.

III. Motion to Strike

Motions to strike are used to reach defects or objections to pleadings that are not challengeable by demurrer (i.e., words, phrases, prayer for damages, etc.). CCP §§ 435, 436 & 437. A party may file a motion to strike in whole or in part within the time allowed to respond to a pleading, however, if a party serves and files a notice of motion to strike without demurring to the complaint, the time to answer is extended. CCP §§ 435(b)(1), 435(c).

A motion to strike lies only where the pleading has irrelevant, false or improper matter, or has not been drawn or filed in conformity with laws. CCP § 436. The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. CCP § 437; Weil & Brown, Civ. Pro. Before Trial (The Rutter Group 2011) ¶7:168.

Defendants Akinyemi and Title Recovery move to strike Plaintiff’s allegations supporting and prayers requesting punitive damages. Because Akinyemi and Title Recovery’s demurrers are sustained with leave to amend as to all five causes of action, Akinyemi and Title Recovery’s motions to strike punitive damages are MOOT.

[1] (1) violation of Unruh Civil Rights Act based on perceived income and rent-stabilization status; (2) wrongful eviction based on lack of good faith to permanently remove Apartment from rental market; (3) violation of the Ellis Act based on offering withdrawn units for rent within two years of withdrawal from market; (4) fraud based on intent to re-rent Apartment after evicting Plaintiff; (5) negligent misrepresentation based on knowing falsity of statement that Apartment would not be re-rented after evicting Plaintiff.