Case Number: BC529697    Hearing Date: August 19, 2014    Dept: 58

JUDGE ROLF M. TREU
DEPARTMENT 58
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Hearing Date: Tuesday, August 19, 2014
Calendar No: 11
Case Name: Reilly v. Estevez, et al.
Case No.: BC529697
Motion: Demurrer
Moving Party: Plaintiff/Cross-Defendant Esperanza Reilly
Responding Party: No opposition filed
Notice: OK

Tentative Ruling: Demurrer is sustained as to the 4th COA without leave to amend and is otherwise overruled.
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Background –
On 12/5/13, Plaintiff Esperanza Reilly filed this action against Defendant Francisco Mora Estevez and Luz aria Mora de Estevez for partition of real property located at 2215 Del Mar Ave., Rosemead, CA 91770, allegedly held in joint tenancy but for which Defendants claim a 100% interest between themselves. On 3/17/14, Defendants filed a cross-complaint against Plaintiff: a First Amended Cross-Complaint was filed on 5/21/14. Trial is set for 12/1/14; FSC for 11/20/14. Plaintiff demurs to the FACC.

Factual Allegations of the FACC –
In April 2006, Defendants entered into an oral agreement with Plaintiff to purchase the property for $725,000, which was memorialized in an unsecured note for $325,000. ¶ 7. Defendants have assumed possession of the property (via a 3/6/06 grant deed transferring a fee interest as joint tenants with Plaintiff (¶ 14)) and have made payments totaling $571,714. ¶¶ 8-9. Defendants have recently discovered that the fair market value of the property is $39,448 because of various unpermitted structures and other material defects on the property: despite Plaintiff informing Defendants that they were purchasing a 26,000 square foot lot with two homes, Defendants actually purchased a 360 square foot home. ¶ 10. Plaintiff was aware of the unpermitted structures and material defects but did not disclose these facts to Defendants. ¶ 11.

Defendants assert causes of action for (1) cancellation of written instrument and reformation, (2) fraud – intentional concealment, (3) declaratory relief, and (4) accounting.

Demurrer –
Plaintiff demurs to the FACC on several grounds. No opposition was filed.

1. Fraudulent Concealment
Plaintiff argues that the fraudulent concealment claim (see, e.g., Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 868) is not alleged with specificity. Plaintiff demurs to other dependent claims on the same ground. However, Plaintiff’s citations to the fraud specificity pleading requirements (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 72-73; Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184) are intended to apply to affirmative misrepresentations (Alfaro v. Community Housing Improvement System & Planning Ass’n, Inc. (2009) 171 Cal.App.4th 1356, 1384). Defendants’ fraudulent concealment claim is not based on affirmative misrepresentations but on Plaintiff allegedly failing to disclose the unpermitted structures and other material defects on the property. At the pleading stage, Defendants have sufficiently alleged facts to support the elements of fraudulent concealment (and dependent claims).

2. Cancellation of Written Instrument and Reformation
Plaintiff argues that the relief sought in the 1st COA is inconsistent. The Court disagrees. Defendants request cancellation of the 3/6/06 grant deed which transferred the property to Defendants in joint tenancy with Plaintiff (FACC ¶ 14) and reformation of the grant deed that Defendants own the property in fee simple absolute (id. ¶ 20). This is not inconsistent relief.

Plaintiff also argues that Defendants fail to allege facts as to why the 3/6/06 grant deed should be cancelled (see Kroeker v. Hurlbert (1940) 38 Cal.App.2d 261, 266). The Court disagrees. Defendants have alleged facts that they have paid more than the fair market value of the property due to Plaintiff’s alleged fraudulent concealment, which is sufficient to allege a factual basis for cancellation and reformation at the pleading stage.

3. Accounting
Plaintiff demurs to the accounting claim on the ground that Defendants fail to allege the existence of a relationship that requires an accounting or of a balance due. Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 179. The Court agrees. Defendants’ accounting claim is based on monies collected by Plaintiff by way of refinance mortgages and collected rents from the property. FACC ¶ 35. However, no facts are alleged to support refinancing or collection of rents from the property. The demurrer is sustained as to the 4th COA on this ground.

The Court notes that Plaintiff also argues that if Plaintiff were to be alleged to have collected money from the property, an accounting claim would not lie because the amount can be made certain. See St. James Church of Christ Holiness v. Superior Court (1955) 135 Cal.App.2d 352, 359. However, this is only the case when the pleading alleges or can allege all facts necessary for calculation of an account between the parties. Id. This is not clear at this point in the litigation.

4. Ruling
The demurrer is sustained as to the 4th COA and is otherwise overruled. No opposition having been filed, the Court is inclined to deny leave to amend.