MICHAEL CROWLEY VS DEUTSCHE BANK NATIONAL TRUST COMPANY

Case Number: EC062200 Hearing Date: June 13, 2014 Dept: A

Crowley v Deutsche Bank

DEMURRER & MOTION TO STRIKE

Calendar: 12
Case No: EC062200
Date: 6/13/14
MP: Defendants, Michael Raison and Mr. Ventures, Inc.
RP: Plaintiff, Michael Crowley (NO OPPOSITION)

ALLEGATIONS IN COMPLAINT:
The Plaintiff purchased real property in 2008. The Plaintiff believed that the property was a triplex. On August 7, 2013, the Plaintiff received a notice that the property had unapproved construction on it and that the property did not have a permit to be used for a triplex. The Plaintiff brought this action to seek damages.

CAUSES OF ACTION IN COMPLAINT:
1) Breach of Contract
2) Breach of Implied Covenant of Good Faith and Fair Dealing
3) Negligent Misrepresentation
4) Fraud
5) Violation of Civil Code section 1102 et seq.
6) Violation of Civil Code section 2709 et seq.
7) Negligent Infliction of Emotional Distress

RELIEF REQUESTED:
1. Demurrer to first, fifth, sixth, and seventh causes of action.
2. Strike claims for punitive damages and for attorney’s fees.

DISCUSSION :
No trial is set. A case management conference is set for August 7, 2014.

This hearing concerns the Defendants’ demurrer and motion to strike directed at the Complaint. The Defendant, Michael Raisin, represented the seller in the sale of the real property. The other Defendant, Mr. Ventures, Inc., as discussed below, did not exist at the time of the sale of the property.

1. Demurrer
a. Demurrer by Mr. Ventures, Inc.
The Defendant, Mr. Ventures, Inc., argues that no cause of action can be directed at it because it did not exist at the time that the Plaintiff purchased the property. The Defendant requests that the Court take judicial notice of the licensing information regarding Mr. Ventures, Inc. that is in the records of the State of California, Bureau of Real Estate. The Plaintiff did not file any opposition or objection to the request.
The licensing information indicates that Mr. Ventures, Inc. became active on March 17, 2009. A review of the Complaint reveals that the Plaintiff alleges in paragraph 14 that he purchased the property on June 6, 2008. Since Mr. Ventures, Inc. became active on March 17, 2009, it did not exist on June 6, 2008 when the Plaintiff alleges that he purchased the property.
A review of the Plaintiff’s causes of action reveal that each is based on claims that the Plaintiff suffered damages as a result of the sale, e.g., the first cause of action for breach of contract claims that the Defendants breached the purchase agreement and the fourth cause of action for fraud claims that the Defendants made false statements to induce the Plaintiff to purchase the property. The facts of which the Court may take judicial notice indicate that the Defendant, Mr. Ventures, Inc., did not exist on June 6, 2008. Since Mr. Ventures Inc. did not exist on June 6, 2008, it could not have entered into the contract, made representations, or failed to disclose information regarding the property. This indicates that there are grounds to sustain a demurrer to the entire Complaint.

Therefore, the Court will sustain the demurrer of Mr. Ventures, Inc. to the entire Complaint.

California law imposes the burden on the Plaintiff to demonstrate the manner in which the Plaintiff can amend the pleadings to correct the defects in her Complaint. Goodman v. Kennedy (1976) 18 Cal.3d 335, 349. The Plaintiff did not request leave to amend and did not file any opposition papers. Accordingly, the Court will not grant leave to amend.

b. Demurrer to First Cause of Action for Breach of Contract
The Defendants argue that this cause of action fails to plead that they were parties to the contract that was breached. A breach of contract cause of action must include 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.
Reichert v. General Ins. Co. (1968) 68 Cal. 2d 822, 830.

In an action based on a written contract, a plaintiff may plead the legal effect of the contract rather than its precise language. Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal. 4th 189, 198-199. In order to plead a contract by its legal effect, plaintiff must allege the substance of its relevant terms. McKell v. Washington Mutual, Inc. (2006) 142 Cal. App. 4th 1457, 1489.
A review of the first cause of action reveals that it does not plead that the parties entered into a contract. Further, the Plaintiff did not plead the terms or legal effect of the contract. Instead, the Plaintiff begins the cause of action in paragraph 28 by alleging that the Plaintiff performed his obligations under the agreement. The Plaintiff neglected to plead the first element of the cause of action, i.e., to plead that the parties entered into a contract.

Accordingly, the Court will sustain the demurrer to the first cause of action.

c. Demurrer to Fifth Cause of Action for Violation of Civil Code section 1102 et seq.
The Defendants argue that this cause of action fails to plead sufficient facts because they have no duties under Civil Code section 1102. A review of the Complaint reveals that the fifth cause of action appears to be a claim that the Defendants violated some provision of Part 4, Title 4, Chapter 2, Article 1.5 “Disclosures Upon Transfer of Residential Property” of the Civil Code. To plead statutory claims, the pleadings must state with reasonable particularity the facts supporting the statutory elements of the violation. Khoury v. Maly’s of California, Inc. (1993) 14 Cal. App. 4th 612, 619.
The Plaintiff’s claim lacks any particularity. The Plaintiff does not identify the specific code section that was violated. The Plaintiff does not plead particular facts supporting the statutory elements of the violation. The Plaintiff does not plead particular facts regarding the Defendants, i.e., the facts supporting the claim that each, separate Defendant violated some, unknown code section. This is insufficient to plead a cause of action based on a statutory claim.

Therefore, the Court will sustain the demurrer to the fifth cause of action.

d. Demurrer to Sixth Cause of Action for Violation of Civil Code section 2079 et seq.
The Defendant argues that this claim is barred by the statute of limitations. Where the dates alleged in the complaint show the action is barred by the statute of limitations, a general demurrer lies. Saliter v. Pierce Bros. Mortuaries (1978) 81 Cal.App.3d 292, 300.
The Plaintiff’s claim is based on the duty of a seller’s broker to disclose information that is imposed under Civil Code sections 2079 to 2079.6. Under Civil Code section 2079.4, the Plaintiff had two years to bring a claim from the date of possession, which is defined as the date of recordation, the date of close of escrow, or the date of occupancy, whichever occurs first.
The Plaintiff alleges in paragraph 14 that he purchased the property on June 6, 2008. This indicates that the escrow had closed by June 6, 2008.
Under Civil Code section 2079.4, the Plaintiff had two years to bring a claim from June 6, 2008. This time period ended on June 6, 2010.
A review of the Court file reveals that the Plaintiff commenced this action on March 10, 2014. Since the Plaintiff did not commence the action within the time period required under Civil Code section 2079.4, the dates within the pleadings indicate that the cause of action is barred.

Therefore, the Court will sustain the demurrer to the sixth cause of action.

e. Demurrer to Seventh Cause of Action for Negligent Infliction of Emotional Distress
The Defendants argue that this cause of action cannot be brought because emotional distress damages cannot be obtained in connection with property damages.
Under California law, emotional distress damages in connection with property damages are not compensable. Erlich v. Menezes (1999) 21 Cal. 4th 543, 557. A review of the Plaintiff’s seventh cause of action reveals that he alleges in paragraph82 that as a result of the Defendants’ failure to disclose the number of units that were permitted for the property, he suffered emotional distress. Since the Plaintiff’s claim arises from property damages, i.e., the reduction in property value caused by the lack of a permit for a triplex, the Plaintiff cannot seek emotional distress damages.

Therefore, the Court will sustain the demurrer to the seventh cause of action.

2. Motion to Strike
The Defendants request that the Court strike paragraphs in the fifth, sixth, and seventh causes of action. In light of the recommendation to sustain the demurrers to the fifth, sixth, and seventh causes of action, this request is moot.
Further, the Defendants request that the Court strike the request for attorney’s fees in the prayer for relief. Under CCP section 1033.5, a party may recover attorney’s fees when permitted by law, statute, or contract. The Plaintiff requests attorney’s fees in his prayer for relief under the purchase agreement. The purchase agreement is attached as untabbed exhibit 6. A review of the purchase agreement reveals that the Defendants are not parties to the agreement. Since the Defendants are not parties to the purchase agreement, there is no provision permitting the recovery of attorney fees from the Defendants. Accordingly, the facts in the pleadings do not support the request for attorney’s fees.
Therefore, the Courts will grant the motion to strike because the Plaintiff’s request for attorney’s fees is improper. Since the Defendants are not parties to the purchase agreement, the Court will not grant leave to amend.

RULING:
SUSTAIN demurrer of Mr. Ventures, Inc. to entire Complaint without leave to amend.
SUSTAIN demurrers to first, fifth, sixth, and seventh causes of action without leave to amend.

GRANT motion to strike without leave to amend.

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MICHAEL CROWLEY VS DEUTSCHE BANK NATIONAL TRUST COMPANY

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