2010-00073633-CU-OR

Mark Montgomery vs. JTS Communities Inc

Nature of Proceeding: Motion for Judgment on the Pleadings

Filed By: Jones, Shannon B.

Defendants The Advantage Group, et al.’s motion for judgment on the pleadings is
ruled upon as follows.

Defendants’ request for judicial notice is granted, with respect to Exhibits C-I (recorded
grant deeds and declarations filed in support of motion for summary adjudication), K
(recorded gift deed), M-O (Recorded Trustee’s Deed Upon Sale). RJN COURT DOCS
In taking judicial notice of these documents, the court accepts the fact of their
existence, not the truth of their contents. (See Professional Engineers v. Dep’t of
th
Transp. (1997) 15 Cal.4 543, 590 [judicial notice of findings of fact does not mean
that those findings of fact are true]; Steed v. Department of Consumer Affairs (2012)
204 Cal.App.4th 112, 120-121; Herrera v. Deutsche Bank Nat’l Trust Co. (2011) 196
Cal.App.4th 1366, 1375.)

Defendants’ request for judicial notice is denied with respect to Exhibits A-B
(Declaration of Covenants, Conditions and Restrictions), J (CalBRE Licensing
information from CalBRE website), and L (CalBRE Licensing information from CalBRE
website).

This litigation arises out plaintiffs’ purchase of homes developed and sold (at least
initially) by JTS Communities, Inc. (“JTS”). At issue in this motion are plaintiffs’ claims
JTS and its agents effectively misrepresented that 400 acres had been set aside for
open space and riding trails, thereby influencing plaintiffs’ decision to purchase their
homes. Plaintiffs allege that Defendants were the real estate agents for JTS for the
sale of a new home.

Defendants’ motion for judgment on the pleadings is only against certain plaintiffs,
Willie Haidari, Francis Holleran, and Joshua and Darcie Magdelano (collectively
“Responding Plaintiffs”). Defendants move for judgment on the pleadings on the
following causes of action: Breach of Fiduciary Duty (COA 2), Intentional
Misrepresentation (COA 3), Negligent Misrepresentation (COA 4), Violation of B&P
Code §17200 (COA 5), and Violation of B&P Code §17500 (COA 6).
Defendants argue that because the Responding Plaintiffs were indirect purchasers of
the property (i.e. purchased property as re-sale), rather than directly from JTS through
Defendants, Responding Plaintiffs cannot proceed on their claims because they did
not have any relationship with Defendants.

Breach of Fiduciary Duty

Plaintiffs do not oppose Defendants’ arguments to this cause of action. Accordingly,
the motion is GRANTED.

Intentional Misrepresentation/Negligent Misrepresentation

Defendants move for judgment on these causes of action on the grounds that because
they had no involvement with the sale of the houses to the Responding Plaintiffs, the
Responding Plaintiffs cannot establish justifiable reliance. In support of their
argument, Defendants cite to the grant deeds which show that the houses were not
sold by JTS, but rather other independent sellers.

In opposition to the motion, Responding Plaintiffs argue that they have sufficiently
alleged justifiable reliance because they have alleged that had they known the actual
facts, they “would not have purchased their homes from JTS Communities, Inc. and
would not have paid the lot premiums to back up to the common area.” (TAC, ¶¶ 41,
48 [emphasis added].) Responding Plaintiffs further argue that whether their reliance
was reasonable is a question of fact outside the scope of a demurrer.

Here, however, the judicially noticeable facts from the grant deeds demonstrate that
the Responding Plaintiffs did not purchase their home from JTS Communities, as
alleged in the TAC. Thus, the above allegations do not support the Responding
Plaintiffs’ argument. Moreover, Responding Plaintiffs’ reliance on Manderville v.
th
PCG&S Group, Inc., (2007) 146 Cal.App.4 1486 is inapposite as the sellers’ brokers
made specific representations to the buyer that the property could be subdivided.

While the Court acknowledges that justifiable reliance is generally a question of fact,
as currently pled, the Responding Plaintiffs have not alleged any facts to demonstrate
justifiable reliance.

Accordingly, the motion is GRANTED.

Violation of B&P Code §17200 and §17500

Defendants move for judgment to these causes of action on the grounds that because
they had no involvement with the sale of the houses to the Responding Plaintiffs, the
Responding Plaintiffs cannot a demonstrate causal connection to their harm.

In opposition to the motion, Responding Plaintiffs argue that they have sufficiently
alleged harm because they have alleged that had they known the actual facts, they
“would not have purchased their homes from JTS Communities, Inc. and would not
have paid the lot premiums to back up to the common area.” (TAC, ¶¶ 41, 48
[emphasis added].)

However, as noted above, these allegations do not support the Responding Plaintiffs’
argument because the judicially noticeable facts from the grant deeds demonstrate that the Responding Plaintiffs did not purchase their home from JTS Communities.

Accordingly, the motion is GRANTED.

The motion is GRANTED without leave to amend, unless the Responding Plaintiffs
appear at hearing to explain how they can amend the complaint to cure the defects
noted above.

Having granted the motion on the above grounds, the Court need not address
Defendants’ remaining arguments.

The minute order is effective immediately. No formal order pursuant to CRC Rule
3.1312 or further notice is required.