2018-00227334-CU-OR

Sayed Anwar vs. Abdul Arsalan

Nature of Proceeding: Hearing on Demurrer to Complaint

Filed By: Meyer, Stephanie

Defendant Abdul Arsalan’s (Arsalan) demurrer to the complaint is OVERRULED in part and SUSTAINED in part with leave to amend.

Overview

This is a dispute over real property. Plaintiffs Sayed Anwar and Alam Munazza (collectively “Plaintiffs”) allege that they entered into a written contract to purchase Arsalan’s residence. (See Compl., Exh. A.) Among other things, Plaintiffs apparently agreed to assume Arsalan’s loan payments, including taxes and insurance, until they could obtain their own loan. Arsalan agreed to place Plaintiffs on the title after returning from a trip abroad. In addition, Arsalan agreed to “sign the necessary paperwork to close the deal,” and the parties agreed Plaintiffs were the beneficiaries of the insurance policy on the home. Arsalan was not required to convey his full interest in the property to Plaintiffs until he received all payments due.

According to Plaintiffs, after they qualified for a mortgage contingent upon Arsalan’s execution of a grant deed, he refused to make the transfer. Nor would a title insurer issue a policy absent a deed executed by Arsalan.

In addition, Plaintiffs allege that after the property’s roof was damaged, Arsalan converted insurance proceeds to his own use.

The complaint contains causes of action for declaratory relief, quiet title, breach of contract, fraud and conversion. Arsalan now demurs on the ground that the allegations fail to state a valid cause of action. Plaintiffs oppose.

Discussion

The First Cause of Action for Declaratory Relief

The demurrer is OVERRULED.

By the first cause of action, Plaintiffs seek a declaration of rights and interests in the property. Although quiet title is usually the legal claim brought to determine such interests, quiet title provides a non-exclusive remedy. (CCP § 760.020.) Hence, the existence of the quiet title cause of action does not compel an order sustaining the demurrer.

Nor will the court sustain the demurrer on grounds it is cumulative of the breach of contract cause of action. Like quiet title, declaratory relief is non-exclusive. (See CCP

§§ 1060, 1062.) Although the two causes of action could overlap, declaratory relief is forward-looking, whereas breach of contract is backward-looking. Because it is at least conceivable that the two causes of action are needed to afford complete relief, and given the absence of any prejudice, the court will not sustain the demurrer under the discretionary provisions in CCP § 1061.

The Second Cause of Action for Quiet Title

The demurrer to Plaintiff Munazza’s second cause of action is SUSTAINED with leave to amend because Munazza did not verify the complaint. (See CCP § 761.020.)

The demurrer to Plaintiff Anwar’s second cause of action is OVERRULED.

Anwar verified the complaint.

Arsalan further argues that the second cause of action is defective because Plaintiffs did not record a lis pendens as required by statute. (See CCP § 761.010.) Because the face of the complaint does not disclose this failure, and because Arsalan has not asked the court to take judicial notice of any materials that might support his argument, the demurrer is overruled. The fact that Plaintiffs do not affirmatively respond that they recorded a lis pendens does not alter the outcome. At this stage of the case, the court must construe the allegations in Plaintiffs’ favor.

The Third Cause of Action for Breach of Contract

The demurrer is OVERRULED.

First, Arsalan argues that Plaintiffs failed to attach a copy of the contract or otherwise allege its terms. Because the version of the complaint filed with the court contains a copy of the contract, the court rejects the argument.

Next, Arsalan argues that Plaintiffs failed to allege that they completely performed or were excused from non-performance. The court disagrees. (See Compl., ¶¶ 8, 9, 14, 17.)

In his reply, Arsalan focuses on the sufficiency of Plaintiffs’ allegation that they qualified for a loan as required under the contract. In his view, they merely allege that they made efforts to qualify, not that they actually qualified. The allegation in question reads, “In August and September, 2017 Plaintiffs exerted much time and effort, and spent over $500 in appraisal fees and other costs, in qualifying for a new mortgage in their own names which would pay the balance due Wells Fargo, contingent of course on [Arsalan]’s conveyance of title to them.” (Compl., ¶ 14.) Because this allegation can be construed to establish Plaintiffs’ qualification for a loan, the court rejects Arsalan’s contrary argument. The fact that the qualification might have been contingent does not alter this conclusion.

The Fourth Cause of Action for Fraud

The demurrer is SUSTAINED with leave to amend.

Plaintiffs allege the following false promise: “When Defendant signed [the contract attached as] Exhibit A he promised Plaintiffs that he would execute a deed conveying the property to them within a few weeks of March 1, 2013 or upon demand. The contract does not support this allegation. (See Barnett v. Fireman’s Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505 [where factual allegations in the complaint conflict with facts in exhibits to the complaint, facts in the exhibits control on demurrer].)

The contract provides that Arsalan would furnish a grant deed “[u]pon receipt of all payments required under this Contract[.]” (Compl., Exh. A at 3 of 7.) In addition, the contract contemplates Plaintiffs’ payments to Arsalan through October 2017. (Id. at 2 of 7.) Granted, the contract indicates that Arsalan would put Plaintiffs on the title at an earlier time, (id. at 4 of 7), but it does not appear to contemplate his removing himself from title at the beginning of the period of performance. Nor do Plaintiffs point to a

provision in the contract requiring Arsalan to transfer his entire interest in the property “on demand.” Consequently, the demurrer is sustained.

The court does not address other arguments in support of or in opposition to the demurrer to the fourth cause of action.

The Fifth Cause of Action for Conversion

The demurrer is OVERRULED.

Arsalan argues that Plaintiffs have failed to establish any ownership of the disputed insurance proceeds because they acknowledge that Arsalan owned the property at the time. This argument lacks merit. The contract provides that “[a]ny insurance claim on this mentioned house will be negotiated by the buyers, and the[y] are the beneficiary [sic] of the policy.” Because these provisions can be construed to establish Plaintiffs’ ownership interest in policy payments regardless of their ownership in the property, the demurrer is overruled.

Disposition

The demurrer to Plaintiff Munazza’s second cause of action is sustained with leave to amend.

The demurrer to Plaintiffs’ fraud cause of action is sustained with leave to amend.

The balance of the demurrer is overruled.

No later than 1/04/19, Plaintiffs may file and serve a first amended complaint (FAC) in an attempt to cure the pleading errors described above; response(s) due within 30 days thereafter, 35 days if the FAC is served by mail.

Although not required by any statute or rule of court, Plaintiffs are requested to attach a copy of the instant minute order to the FAC to facilitate the filing of the pleading.

If any defendant intends to demur to the FAC or move to strike, it shall determine if any other defendant who has appeared in this action also intends to demur or move to strike. If so, all such defendants shall coordinate a single hearing date for the demurrers and motions to strike. Additionally, a copy of the FAC shall be included with the moving papers.

The notice of motion does not provide notice of the court’s tentative ruling system, as required by Local Rule 1.06(D). Counsel for moving party is directed to contact counsel for opposing party forthwith and advise counsel of Local Rule 1.06 and the court’s tentative ruling procedure. If counsel for moving party is unable to contact counsel for opposing party prior to hearing, counsel for moving party shall be available at the hearing, in person or by telephone, in the event opposing party appears without following the procedures set forth in Local Rule 1.06(B).

The minute order is effective immediately. No formal order pursuant to CRC 3.1312 is required.