Case Number: KC069491 Hearing Date: May 23, 2018 Dept: J

Re: Fernando Hernandez, et al. v. George F. Alvarez, et al. (KC069491)

DEMURRER TO SECOND AMENDED COMPLAINT; MOTION TO STRIKE PORTIONS OF SECONDAMENDED COMPLAINT

Moving Party: Defendant/Cross-Complainant George F. Alvarez

Respondents: Plaintiff/Cross-Defendant Fernando Hernandez and Plaintiff Maria De Jesus Hernandez

POS: Moving OK; Opposing and Reply served by regular mail contrary to CCP § 1005(c)[1]

Plaintiffs allege that they purchased the real property located at 4847 Slancroft Avenue in Baldwin Park (“subject property”) from George “Frank” Alvarez (“Alvarez”) in 2005 and thereafter made mortgage payments to him. Alvarez apparently sold the subject property in 2017 to Oseguera Investments Inc. The complaint was filed 7/27/17. The First Amended Complaint, filed 2/8/18, asserts causes of action against Defendants Alvarez, Juan Sanchez, Oseguera Investments, Inc., Steve Carmona, Laikin Realty Corp., All Persons Unknown, Claiming Any Legal or Equitable Right, Title, Estate, Lien, or Interest in the Property Described in the Complaint Adverse to Plaintiffs’ Title or Any Cloud on Plaintiffs’ Title Thereto and Does 1-20 for:

1. Quiet Title

2. Breach of Contract

3. Breach of the Covenant of Good Faith and Fair Dealing

4. Breach of Fiduciary Duty

5. Negligent Misrepresentation

6. Fraud

7. Money Had and Received/Unjust Enrichment

On 3/19/18, Alvarez filed his cross-complaint, asserting causes of action against plaintiff for:

1. Breach of Contract

2. Breach of the Implied Covenant of Good Faith and Fair Dealing

3. Fraud

4. Unjust Enrichment

5. Elder Abuse

On 4/2/18, Alvarez filed an amendment to his cross-complaint, wherein he purported to add Maria De Jesus Hernandez (“M. Hernandez”) as a cross-defendant [The x-complaint does not indicate that it has been asserted against any Roes].

The Second Amended Complaint, filed 4/5/18, asserts causes of action against Defendants Alvarez, Juan Sanchez, Oseguera, Steve Carmona, Laikin Realty Corp., All Persons Unknown, Claiming Any Legal or Equitable Right, Title, Estate, Lien, or Interest in the Property Described in the Complaint Adverse to Plaintiffs’ Title or Any Cloud on Plaintiffs’ Title Thereto and Does 1-20 for:

1. Quiet Title

2. Breach of Contract

3. Breach of the Covenant of Good Faith and Fair Dealing

4. Breach of Fiduciary Duty

5. Negligent Misrepresentation

6. Fraud

7. Money Had and Received/Unjust Enrichment

On 5/14/18, F. Hernandez’s and M. Hernandez’s defaults were entered on the cross-complaint. A Case Management Conference is set for 6/7/18.

DEMURRER TO SECOND AMENDED COMPLAINT:

Defendant George F. Alvarez (“defendant”) demurs to the second and third causes of action in Plaintiffs Fernando Hernandez’s and Maria De Jesus Hernandez’s (collectively, “plaintiffs”) Second Amended Complaint (“SAC”), per CCP § 430.10(e)&(f), on the basis that they both fail to state facts sufficient to constitute causes of action and are uncertain. Defendant also demurs to these causes of action per subsections (a) and (f), on the basis that the court has no jurisdiction of the subject of the causes of action and that it cannot be ascertained from the pleading whether the contract is written, oral, or implied by conduct.

REPLY BRIEF:

At the outset, the court notes that the reply memorandum of points and authorities is 12 pages long, in violation of California Rules of Court (“CRC”) Rule 3.1113(d) (i.e., “[e]xcept in a summary judgment or summary adjudication motion, no opening or responding memorandum may exceed 15 pages. In a summary judgment or summary adjudication motion, no opening or responding memorandum may exceed 20 pages. No reply or closing memorandum may exceed 10 pages. The page limit does not include the caption page, the notice of motion and motion, exhibits, declarations, attachments, the table of contents, the table of authorities, or the proof of service”).

The reply is also in violation of subsection (f) (i.e., “[a] memorandum that exceeds 10 pages must include a table of contents and a table of authorities. A memorandum that exceeds 15 pages must also include an opening summary of argument”).

The court admonishes defendant for these violations.

SECOND CAUSE OF ACTION (i.e., BREACH OF CONTRACT):

“’A cause of action for damages for breach of contract is comprised of the following elements: (1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to plaintiff.’ (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1388).” Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 228.

Plaintiffs have alleged that, on or about 6/13/05, they purchased the property located at 4847 Stancroft Avenue in Baldwin Park (“subject property”) from defendant and that the sale was “evidenced by, among other things, a Purchase Agreement” between them and that “[t]he Purchase Agreement, including subsequent ‘adddendums,’ is attached as Exhibit “A.” (SAC, ¶¶ 11, 12 and 14). Plaintiffs claim that, in addition to the written Purchase Agreement, “[t]he parties also had an implied in fact contract based on their course of conduct during the last twelve years” and that “the parties’ course of conduct defined/amended/modified the terms of the Purchase Agreement to the extent any terms were vague, undefined, or waived.” (Id., ¶ 26). They assert that, “[o]ver the last twelve years, [they] have made payments pursuant to the mortgage agreement,” “have paid well over $250,000.00 towards the purchase of the Property,” and “have also paid property tax payments.” (Id., ¶ 15).

Defendant contends that plaintiffs’ second cause of action fails to identify any enforceable contract, because the Purchase Agreement and its addendums have expired. (Demurrer, 5:13-15). Defendant further claims that the addendums display plaintiffs’ knowledge that the Purchase Agreement could only be extended in writing (Id., 7:11-12) and that any alleged “implied contract” plaintiffs claim arose thereafter is void in light of CCP § 1624. (Id., 7:24-8:1).

The original contract, Exhibit “A” to the SAC, states that the purchase by plaintiffs was to have closed by June 29, 2007. Addendum 2 thereto extended the period to June 30, 2012, and Addendum 3 extended the period to June 30, 2013. No further written extensions are contained in the SAC.

Paragraph 24 of the parties’ written Purchase Agreement expressly provides that “[n]either this Agreement nor any provision in it may be extended, amended, modified, altered or changed, except in writing Signed by Buyer and Seller.” (SAC, Exhibit “A”). Civil Code § 1698(c) provides that “[u]nless the contract otherwise expressly provides, a contract in writing may be modified by an oral agreement supported by new consideration. The statute of frauds (Section 1624) is required to be satisfied if the contract as modified is within its provisions.” Subsection (d), however, states that “[n]othing in this section precludes in an appropriate case the application of rules of law concerning estoppel, oral novation and substitution of a new agreement, rescission of a written contract by an oral agreement, waiver of a provision of a written contract, or oral independent collateral contracts.”

Of course, “[a]n agreement for the sale of real property or an interest in real property comes within the statute of frauds. (Civ.Code, § 1624, subd. (a)(3)).” Secrest v. Security Nat. Mortg. Loan Trust 2002-2 (2008) 167 Cal.App.4th 544, 552. “An agreement to modify a contract that is subject to the statute of frauds is also subject to the statute of frauds.” Id. at 553.

Plaintiffs argue that their claim for breach of contract is not barred by the statute of frauds because they are entitled to exceptions provided by estoppel and part performance. “A party is estopped to assert the statute of frauds as a defense ‘where [the] party, by words or conduct, represents that he will stand by his oral agreement, and the other party, in reliance upon that representation, changes his position, to his detriment.’ (Associated Creditors’ Agency v. Haley Land Co. (1966) 239 Cal.App.2d 610, 617).” Garcia v. World Sav., FSB (2010) 183 Cal.App.4th 1031, 1040, fn. 10. “The doctrine of estoppel to assert the statute of frauds applies where unconscionable injury would result from denying enforcement of the oral contract after one party has been induced by the other seriously to change his position in reliance on the contract or where there would be unjust enrichment of a party who has received the benefit of the other’s performance. (Monarco v. Lo Greco (1950) 35 Cal.2d 621, 623-624).” Isaac v. A&B Loan Co. (1988) 201 Cal.App.3d 307, 313 (emphasis theirs). Plaintiffs, however, have not pled any of these circumstances.

Also, “’[b]efore a party can be estopped to assert the statute [of frauds] due to the other’s part performance, it must appear that a sufficient change of position has occurred so that the application of the statutory bar would result in an unjust and unconscionable loss, amounting in effect to a fraud. [Citations.] … The payment of money is not “sufficient part performance to take an oral agreement out of the statute of frauds” [citation], for the party paying money “under an invalid contract … has an adequate remedy at law.”’ (Anderson v. Stansbury [(1952)] 38 Cal.2d [707,] at pp. 715-716; see also Oren Realty & Development Co. v. Superior Court [(1979)] 91 Cal.App.3d [229,] at p. 235; Shive v. Barrow (1948) 88 Cal.App.2d 838, 848; Loper v. Flynn (1946) 72 Cal.App.2d 619, 622-623).” Secrest v. Security Nat. Mortg. Loan Trust 2002-2 (2008) 167 Cal.App.4th 544, 555 (emphasis added). Again, plaintiffs have not pled part performance.

Plaintiffs fail to demonstrate that they have an enforceable contract with defendant for the purchase of the residence. Defendant’s demurrer to the second cause of action is sustained.

THIRD CAUSE OF ACTION (i.e., BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING):

Since defendant’s demurrer to the second cause of action is sustained, there can be no derivative cause of action for breach of the implied covenant of good faith and fair dealing.

Defendant’s demurrer to the third cause of action is sustained.

MOTION TO STRIKE PORTIONS OF SECOND AMENDED COMPLAINT:

Defendant George F. Alvarez (“defendant”) moves the court, per CCP §§ 435 and 436, for an order striking out the following portions of Plaintiffs Fernando Hernandez’s and Maria De Jesus Hernandez’s (“plaintiffs”) First Amended Complaint (“FAC”):

a. Exhibit “A;”

b. The second cause of action (i.e., for Breach of Contract);

c. The fifth cause of action (i.e., for Negligent Misrepresentation);

d. The sixth cause of action (i.e., for Fraud)

e. The seventh cause of action (i.e., for Money Had and Received/Unjust Enrichment)

“The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading. (b) Strike out all of any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.” CCP § 436.

At the outset, the motion is moot with respect to the second cause of action and Exhibit “A,” based on the ruling on the demurrer. The motion is summarily denied with respect to the fifth through seventh causes of action, as defendant has not utilized the appropriate statutory vehicle. A motion to strike is appropriate only when seeking to strike out portions of causes of action which may be time-barred.

The court will hear from counsel for plaintiffs as to whether leave to amend is again requested, and as to which cause(s) of action, and will require an offer or proof if so.

[1] Opposition POS, however, includes an explanation why the opposition could not be served via overnight or personal delivery.