Case Number: EC067188 Hearing Date: May 25, 2018 Dept: A

Affatato v Wish Properties

MOTION FOR JUDGMENT ON THE PLEADINGS

Calendar: 12

Case No: EC067188

Hearing Date: 5/25/18

Action Filed: 10/4/17

Trial: Not Set

MP: Defendants Wish Properties, Inc. and Sherry Ann Robbin

RP: Plaintiff Lucia Rose Affatato

RELIEF REQUESTED:

Defendants Wish Properties, Inc. and Sherry Ann Robbin move for judgment on the pleadings as to the Complaint.

ALLEGATIONS IN COMPLAINT:

Plaintiff Lucia Rose Affatato (“Plaintiff” or “Affatato”) alleges that she retained Defendants Wish Properties, Inc. (“Wish”) and Sherry Ann Robin (“Robin”) to represent her in connection with the sale of her home, pursuant to various oral and written agreements. She states that she sold the property to Hermitage Enterprises, LLC (“Hermitage”) and Joe Salem (“Salem”), but during the process Defendants failed to disclose to Hermitage certain material information about the property. Plaintiff alleges that in 2016, Hermitage and Salem filed an action arising out of the purchase and sale of the property in Salem et al. v. Wish Properties, Inc. et al. (LASC No. EC064677, “Hermitage Lawsuit”). Plaintiff alleges she incurred over $101,000 in defending herself in the Hermitage Lawsuit.

The operative complaint filed October 4, 2017, alleges causes of action for: (1) professional negligence; (2) breach of fiduciary duty; (3) constructive fraud; and (4) tort of another.

DISCUSSION

Legal Standard

A motion for a judgment on the pleadings has the purpose and effect of a general demurrer and is filed after the time to file a demurrer has expired. (Smiley v. Citibank (S.D.), N.A. (1995) 11 Cal.4th 138, 145-46.) Accordingly, just as on a demurrer, the Court examines the allegations in order to determine whether they contain the essential facts necessary to plead a valid cause of action and accepts as true all material facts alleged therein. (Id.)
CCP §438(c)(1)(B) provides that the grounds for a judgment on the pleadings in favor of the defendant are the following: (1) the court has no jurisdiction of the subject of the cause of action alleged in the complaint; and (2) the complaint does not state facts sufficient to constitute a cause of action against that defendant. The grounds for the judgment on the pleading must appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice. (CCP §438(d).)

After a judgment on the pleadings is granted, the same standards apply in granting leave to amend as for demurrers and leave is routinely granted. (See CCP §438(h); Virginia G. v. ABC Unified Sch. Dist. (1993) 15 Cal. App. 4th 1848, 1852 [holding that when a motion for judgment on the pleadings is granted, denial of leave to amend constitutes an abuse of discretion if the pleading does not show on its face that it is incapable of amendment].)

Request for Judicial Notice

Defendants request judicial notice of: (1) Plaintiff’s complaint in this action; (2) the February 9, 2018 Minute Order in the Hermitage Lawsuit; (3)-(5) Salem and Hermitage’s first, second, and third amended complaints in the Hermitage Lawsuit; (6) Plaintiff’s motion for good faith settlement determination and her declaration in the Hermitage Lawsuit; and (7) the July 14, 2017 Minute Order in the Hermitage Lawsuit.

Plaintiff requests judicial notice of: (A) Defendants’ answer to the complaint in this action; (B) Defendants’ motion for determination of good faith settlement filed on December 12, 2017 in the Hermitage Lawsuit; (C) the opposition thereto, filed on December 21, 2017; (D) the reply filed on February 2, 2018; and (E) the request for dismissal filed April 19, 2018 in the Hermitage Lawsuit.

The requests are granted pursuant to Evidence Code, §452(d).

Discussion

Defendants move for judgment on the pleadings on the 1st, 2nd, and 3rd causes of action in the complaint. The notice of motion does not mention the 4th cause of action for tort of another.

Defendants argue that this action is barred based on the good faith settlement protections of CCP §877.6 from the Hermitage Lawsuit.

CCP §877.6(c) provides: “A determination by the court that the settlement was made in good faith shall bar any other joint tortfeasor or co-obligor from any further claims against the settling tortfeasor or co-obligor for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault.”

On July 14, 2017, Judge Laura A. Matz (Glendale Courthouse) granted Affatato’s motion for determination of good faith settlement with Salem and Hermitage. (Def.’s RJN, Ex. 7.) Plaintiff Affatato then filed this action on October 4, 2017 against Wish and Robbin.

On February 9, 2018, Judge Matz granted the motion for determination of good faith settlement between plaintiffs Salem and Hermitage and defendants Robbin and Wish. (Def.’s RJN, Ex. 2.) Defendants argue that they gave notice of the motion to Affatato, who filed an opposition brief and specially appeared at the hearing. Nevertheless, Judge Matz ruled that Robbin and Wish are “hereby discharged from all liability on claims for equitable contribution and/or full or partial indemnity by any other parties, joint tortfeasor, or co-obligor, in this or any other action arising from the same general set of facts.” (However, Judge Matz denied the motion to dismiss the complaint in EC067188 because it was not assigned to Judge Matz’s courtroom.)

This action involves the same real property transaction as the Hermitage Lawsuit. The allegations in the Hermitage Lawsuit allege that Salem and Hermitage were sold real property at 5258 N. Hermitage Ave. in Valley Village, but that leading up to and at the time of the sale, historical facts about the property (i.e., that Marilyn Monroe had briefly lived there) were not disclosed. Salem and Hermitage had planned to demolish existing structures and develop the property, but were unable to do so because of the history of the property. (See RJN, Ex. 4 [Hermitage Lawsuit’s Second Amended Complaint], Ex. 5 [Hermitage Lawsuit’s Third Amended Complaint].) Similarly, in this action, Affatato alleges the dispute arises out of the sale of property located on Hermitage Avenue, and Wish and Robbin’s failure to disclose facts about the property to Hermitage and Salem. As a result, Affatato seeks $101,000 in attorney’s fees and costs that she incurred in defending the Hermitage Lawsuit. Although Affatato alleges causes of action for professional negligence, breach of fiduciary duty, constructive fraud, and tort of another, she seeks the same damages of $101,000.

Defendants Wish and Robbin argue that Plaintiff is bringing a disguised claim for indemnity by way of this action and rely on the case Cal-Jones Properties v. Evans Pacific Corp. (1989) 216 Cal.App.3d 324. In opposition, Plaintiff argues she is bringing direct claims of liability against Defendants and that Cal-Jones is distinguishable.

In Cal-Jones, plaintiffs purchased a condominium from cross-complainants through cross-defendants, who represented both plaintiffs and cross-complainants as the real estate broker for the sale. The plaintiff sued both cross-complainants and cross-defendants and alleged that they fraudulently represented the condominiums’ size. Cross-complainant filed a cross-compliant against cross-defendants for breach of fiduciary duty, total equitable indemnity, comparative equitable indemnity, and contribution. Eventually, cross-defendants settled with the plaintiffs and the trial court granted the motion for determination of good faith settlement after considering cross-complainant’s opposition that their breach of fiduciary duty claim was separate from the indemnity and contribution claims and should not be barred. The trial court ruled that cross-complainant’s claim for breach of fiduciary duty was in fact an indemnity claim and therefore barred due to cross-defendants’ good faith settlement with plaintiffs.

On appeal, cross-complainants argued that the trial court did not have authority to dismiss their claims for affirmative relief under CCP §877.6. The Court of Appeal affirmed the trial court’s decision. The Court stated that “[a]llowing a joint tortfeasor to bring an affirmative claim for damages that is actually an artfully pleaded claim for indemnity would contravene the purpose of the statute. … Therefore, a trial court must have the discretion to ferret out those claims that are in fact claims for indemnity.” (Cal-Jones, supra, 216 Cal.App.3d at 327-28.) It further stated: “If the claims between the joint tortfeasors are identical to those made by the plaintiffs or if the damages sought by the joint tortfeasors are those that the court would consider in determining the proportionate liability of the settling tortfeasor, then the claims are indemnity claims regardless of whether one or more of the claims are couched in affirmative language. A claim by a joint tortfeasor seeking neither indemnity nor contribution and which the trial court would not contemplate in determining the proportionate ability of a settling tortfeasor is not a claim for indemnity and hence survives a good faith settlement under section 877.6. If a claim is in fact one of indemnity, then it is barred pursuant to section 877.6.” (Id. at 328.)
Although cross-complainants labeled their cause of action as one for breach of fiduciary duty, the Court of Appeal held that it was in effect simply an indemnity action. The Court found that indemnity liability for cross-complainants and cross-defendants rested on the identical failure to correctly represent the size of the condominium unit. Thus, the Court rejected cross-complainant’s argument that their action for breach of fiduciary duty sought the return of the real estate commission paid under the listing agreement as well as attorney’s fees and punitive damages. Instead, it held that the breach of fiduciary duty claim was nothing more than an alternative means of pleading indemnity.

This case is similar to Cal-Jones. Indemnity has been defined as the obligation of one party to make good a loss or damage which another party has incurred. (Cal-Jones, supra, 216 Cal.App.3d at 328.) Here, the damages Affatato seeks from Defendants Wish and Robbin are the damages she incurred in order to defend the Hermitage Lawsuit. In the complaint, she alleges that she “incurred over $101,000 in defending herself in the Hermitage Lawsuit which resulted from Defendants’ tortious conduct towards Salem and Hermitage as well as their professional malpractice, breach of fiduciary duty and constructive fraud.” (Compl., ¶11.) As stated, Affatato’s lawsuit is nothing more than a suit for indemnity for the underlying lawsuit. (See Compl., ¶¶15, 19, 24, 28-29.)

Further, Affatato’s damages in this action are damages that could have been considered in the Hermitage Lawsuit when considering the proportionate liability of the settling tortfeasor. Thus, such claims are indemnity claims regardless of whether one or more of the claims are couched in affirmative language. (See Cal-Jones, supra, 216 Cal.App.3d at 328.)

In opposition, Affatato argues that her claims are direct causes of action against Defendants and are not ones for indemnity. Affatato attempts to distinguish Cal-Jones, but those arguments lack merit (i.e., that she did not file a cross-complaint in the Hermitage Lawsuit or that not all of her damages are stated in her complaint). Also, Affatato has not shown that her claims are the type that the Court in the Hermitage Lawsuit would not contemplate in determining the proportionate ability of Defendants. Rather, at the time of Defendants’ motion for good faith settlement with Salem and Hermitage in the Hermitage Lawsuit, Affatato had the opportunity to and did in fact file an opposition to the motion, which raises several of the same points as her opposition to this motion for judgment on the pleadings and discusses Cal-Jones. (See Pl.’s RJN, Exs. B-D [Motion, Opposition, and Reply re Good Faith Settlement Determination].) In ruling on the motion, Judge Matz denied the motion to dismiss the complaint in this action since it was not assigned to her courtroom, but she granted the motion for determination of good faith settlement broadly such that Robbin and Wish were “discharged from all liability on claims for equitable contribution and/or full or partial indemnity by any other parties, joint tortfeasor, or co-obligor, in this or any other action arising from the same general set of facts.” (Italics added.)

Finally, to the extent that Affatato argues that she is bringing a claim based on contractual indemnity, this argument is waived. A good faith determination of settlement relieves settling defendant of any further liability to non-settling defendants for equitable indemnity, but not necessarily contractual indemnification obligations. (Bay Development, Ltd. v. Superior Court (1990) 50 Cal.3d 1012, 1019.) In the opposition, Affatato argues that CCP §877.6 does not automatically extinguish all indemnity claims since contractual indemnity claims may still survive. However, she states she is not making any claims for contribution or indemnity and is only seeking payments from an independent relationship with Defendants. (See Opp. at p.5:16-19.) Thus, Affatato has not shown she has a claim for contractual indemnity.

RULING:

Grant the motion for judgment on the pleadings as to the 1st, 2nd, and 3rd causes of action,

without leave to amend based on the analysis above. However, this is the first attempt at the pleading and thus the Court may entertain arguments at the hearing to determine if 30 days leave to amend is proper.