Eddie Summerfield v. Valley of California, Inc. dba Coldwell Banker Residential Brokerage

1. Demurrer by Defendants Benis Yadegar and Rosemary Yadegar to the First Amended Complaint of Plaintiff Eddie Summerfield

Defendants’ request for judicial notice is GRANTED. (See Evid. Code, § 452, subd. (d) [permitting judicial notice of court records].)

Plaintiff’s request for judicial notice contained in his declaration is GRANTED IN PART AND DENIED IN PART. The request is denied as to exhibit numbers 1-7 and 9-10 as they are documents not subject to judicial notice. The request is granted as to exhibit number 8, only as to the existence of the document and not as to the truth of statements made therein. (Id., § 452, subd. (d)]; Day v. Sharp (1975) 50 Cal.App.3d 904, 914.)

Both parties improperly rely on facts outside the First Amended Complaint (“FAC”) to support or oppose the demurrer. The Court has not considered such additional facts. (See Code Civ. Proc., § 430.30; see Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.)

Plaintiff filed a twenty-two page opposition in response to the demurrer. California Rules of Court (“CRC”), rule 3.1113(d), provides that a responding memorandum may not exceed fifteen pages. A memorandum that exceeds the page limits of these rules must be filed and considered in the same manner as a late-filed paper. (Id., rule 3.1113(g).) Although Defendants did not object on this basis and for that reason the Court will consider the non-compliant paper, Plaintiff is directed that future filings must comply with all applicable statutes and rules.

The demurrer based on lack of standing directed to the first cause of action for breach of contract, the second cause of action for breach of fiduciary duty, the third cause of action for breach of the implied covenant of good faith and fair dealing, the fourth cause of action for negligence, and the fifth cause of action for fraud/negligent misrepresentation, is OVERRULED. Plaintiff alleges that Defendants deceived and misled him and his parents into buying property. (FAC, ¶ 5.) Plaintiff also alleges that Defendants convinced him to loan them $167,000. (Id., ¶ 6.) Plaintiff additionally alleges that an additional $200,000 was stolen from trust funds belonging to him as a joint owner. (Id., ¶ 7.) Based on these allegations, Plaintiff has adequately alleged standing to sue as it is his money that is at issue.

The demurrer based on uncertainty directed to the first, second, third, fourth, and fifth causes of action is OVERRULED. A demurrer based on uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures. (See Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal.App.4th 612, 616.) A demurrer for uncertainty should only be sustained when the complaint is so bad that the defendant cannot reasonably respond. (Id.) Here, the causes of action are certain enough to allow Defendants to understand the nature of the allegations and the theory of liability to fashion an appropriate response.

The demurrer to the first cause of action on the grounds of failure to state whether the contract is written or oral and failure to state sufficient facts is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND. An action “founded upon a contract” is subject to demurrer if “it cannot be ascertained from the pleading whether the contract is written, is oral, or is implied by conduct.” (Code Civ. Proc., § 430.10, subd. (g).) Thus, “[t]o state a cause of action for breach of contract . . . , the complaint must indicate on its face whether the contract is written, oral, or implied by conduct.” (Otworth v. S. Pac. Transp. Co. (1985) 166 Cal.App.3d 452, 458-59.) The FAC alleges that Plaintiff entered into “many agreements” with Defendants without alleging whether they were written, oral, or implied by conduct. (FAC, ¶ 15.) The cause of action also fails to describe the subject matter of those agreements, how they were breached, or what Plaintiff did to perform under them. (Troyk v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1352 [to be entitled to damages for breach of contract, a plaintiff must plead and prove: (1) a contract; (2) plaintiff’s performance or excuse for nonperformance; (3) defendant’s breach; and (4) damage to plaintiff].) Plaintiff acknowledges in his opposition that his claim currently is deficient and requests leave to amend. (See Opposition Memorandum (“Opp.”) at p. 15:15-17 [“Although [Summerfield] did not provide these contracts as part of [the] complaint, with leave of the Court to amend, he shall be incorporating such documents within any future amended complaint.”].)

The demurrer to the second cause of action for breach of fiduciary duty on the ground of failure to state sufficient facts is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND. Plaintiff alleges that he had a fiduciary relationship with Defendants. (FAC, ¶ 20.) Plaintiff states in his opposition that Defendants were his brokers, and therefore a fiduciary relationship existed. (Opp. at p. 18:11-19.) However, Plaintiff does not state such an allegation in the FAC. (See FAC, ¶ 5 [alleging that Defendants deceived Plaintiff and his parents into buying property, not that they were his brokers].)

The demurrer to the third cause of action for breach of the implied covenant of good faith and fair dealing on the ground of failure to state sufficient facts is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND. “There is an implied covenant of good faith and fair dealing in every contract that neither party will do anything which will injure the right of the other to receive the benefits of the agreement.” (Comunale v. Traders & Gen. Ins. Co. (1958) 50 Cal.2d 654, 658.) Because Plaintiff has not identified a contract to maintain the breach of contract claim, this cause of action must similarly fail.

The demurrer to the fourth cause of action for negligence on the ground of failure to state sufficient facts is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND. The elements of a negligence action are: (1) defendant’s legal duty to conform to a standard of care; (2) defendant’s failure to meet this standard of conduct; (3) defendant’s failure was proximate cause or legal cause of the resulting injury; and (4) harm to plaintiff. (Ladd v. Cnty. of San Mateo (1996) 12 Cal.4th 913, 917.) As noted, Plaintiff has not properly alleged a duty based on a broker-client relationship with Defendants.

The demurrer to the fifth cause of action for fraud/negligent misrepresentation on the ground of failure to state sufficient facts is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND. The elements of a fraud claim are the following: (1) a misrepresentation (false representation, concealment or nondisclosure); (2) knowledge of falsity (or “scienter”); (3) intent to defraud, i.e., to induce reliance; (4) justifiable reliance; and (5) resulting damage. (Philipson & Simon v. Gulsvig (2007) 154 Cal.App.4th 347, 363.) Fraud causes of action must be pled with specificity in order to give notice to the defendant and to furnish him with definite charges. (Gil v. Bank of Am., N.A. (2006) 138 Cal.App.4th 1371, 1381.) The particularity requirement necessitates pleading facts that “show how, when, where, to whom, and by what means the representations were tendered.” (Lazar v. Super. Ct. (1996) 12 Cal.4th 631, 645.) Plaintiff alleges that on various dates in 2010, Defendants (“mostly Benis”) represented that the money used to buy the property, to invest in a church, and to loan to Defendants, would be repaid if he “simply followed the advice from the Yadegars.” (FAC, ¶ 38.) Plaintiff has not specifically alleged who made the representations, what “advice” was given, and other details in order to inform Defendants of the allegedly fraudulent acts/representations, nor has he alleged that such information is within Defendants’ knowledge and control. (See Opp. at pp. 13-14; Comm. on Children’s Television, Inc. v. Gen. Foods Corp. (1983) 35 Cal.3d 197, 217 [less specificity is required when facts lie more within the defendant’s knowledge than the plaintiff’s]; Eldridge v. Tymshare, Inc. (1986) 186 Cal.App.3d 767, 777 [the rule requiring that fraud be pled with particularity “is not always possible in those cases where the specific facts are within the knowledge and control of the defendant, and especially where defendant is a fiduciary”].)

2. Motion by Plaintiff for leave to file Corrected First Amended Complaint by Defendants

This motion is denied for failure to comply with CRC 3.1324.

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