Case Name:   Mircea Voskerician v. Mark Zuckerberg, et al.

 

Case No.:       1-14-CV-264667

 

Demurrer by Defendants Mark Zuckerberg and SFRP, LLC to the third, fourth, and fifth causes of action of the Complaint of Plaintiff Mircea Voskerician

 

Plaintiff invests in real estate in the Menlo Park, Palo Alto, and Los Altos area, purchasing existing homes and, in their place, building new, custom homes for his clients or sale on the open market.  (Complaint ¶ 6.)  In November 2012, Plaintiff made an offer on the real property located at 1457 Hamilton Avenue in Palo Alto, California (the “Property”).  The offer was accepted, and Plaintiff began his plans to build a large house on the Property.  (Complaint ¶ 6-7.)  Plaintiff emailed Mark Zuckerberg (“Defendant”), explaining his plan to build a large home on the Property and offering to sell Defendant approximately 2,600 square feet of the Property that abutted Defendant’s backyard to create a buffer between the homes.  (Complaint ¶¶ 8-9.)  Plaintiff and his realtor met with Defendant’s realtor, who advised that Defendant wanted to purchase the Property in its entirety and would pay Plaintiff $250,000 plus any down payment Plaintiff had made in exchange for Plaintiff’s interest in the Property.  (Complaint ¶ 10.)  Plaintiff declined the offer, but indicated that he would give further consideration to selling his interest in the Property.  (Id.)  On December 1, 2012, Plaintiff received an offer from a real estate developer seeking to purchase his interest in the Property for $4,300,000.  (Complaint ¶¶ 11, 25.)

 

On December 4, 2012, Plaintiff and his realtor attended a meeting with Defendant, his realtor and his financial advisor, during which Defendant stated that he wanted a discount on the Property and, in exchange for the same, he would introduce Plaintiff to his friends, clients, and associates, and would promote Plaintiff’s real estate business by providing him with referrals and written references.  (Complaint ¶ 12-14.)  Plaintiff alleges that “[on] or about December 5, 2012, [he] and [Defendant] entered into an oral contract whereby [Plaintiff] agreed to sell his interest in the Property to [Defendant] in exchange for [Defendant] paying [Plaintiff] $1,700,000 and [Defendant] promising that he would introduce [Plaintiff] to his friends, clients and business associates and to provide [Plaintiff] with written references to promote [Plaintiff’s] real estate business.”  (Complaint ¶ 48, 59.)  Plaintiff also claims that “[t]he portion of the contract where [Plaintiff] sold his interest in the Property to [SFRP, LLC, a company owned and controlled by Defendant] was reduced to writing on or about December 6, 2012,” and “[c]onfirmation of the portion of the contract where [Defendant] made his promises to [Plaintiff] was reflected in a writing accepted by the parties as a statement of their written agreement in October 2013.”  (Complaint ¶ 16, 48, 59)  Thereafter, Plaintiff contacted Defendant throughout 2013 to discuss the promised introductions and business referrals, but Defendant did not respond to him.  (Complaint ¶¶ 17-19, 22.)

 

On May 2, 2014, Plaintiff filed a Complaint alleging causes of action for: (1) promissory fraud; (2) intentional misrepresentation; (3) concealment; (4) rescission; and (5) breach of contract.

 

On June 11, 2014, Defendants filed this demurrer to the third cause of action for concealment, the fourth cause of action for rescission, and the fifth cause of action for breach of contract.  Plaintiff filed papers in opposition to the demurrer on July 1, 2014.  Defendants filed a reply on July 8, 2014.

 

Request for Judicial Notice

 

Plaintiff does not oppose Defendants’ request that the court take judicial notice of the “Assignment of Buyer’s Rights under Real Estate Purchase Contract” (the “Assignment Agreement”) dated December 6, 2012, pursuant to Evidence Code sections 452 and 453. Defendants’ request for judicial notice of the Assignment Agreement.  The request is GRANTED.  (See Ingram v. Flippo (1999) 74 Cal.App.4th 1280, 1285, fn. 3 [taking judicial notice of a letter and  press release that were not attached to the  complaint when the complaint excerpted quotes from and summarized parts of the letter, and the contents of the letter and media release formed the basis of the allegations in the complaint]; see also Marina Tenants Ass’n v. Deauville Marina Dev. Co. (1986) 181 Cal.App.3d 122 [taking judicial notice of a master lease when the complaint relied on selected portions of the master lease].)

 

The parties to the Assignment Agreement are Plaintiff and SFRP, LLC.

 

Fifth Cause of Action: Breach of Contract

 

Defendants demur to the fifth cause of action, arguing that it fails to allege facts sufficient to constitute breach of contract.  (See Code Civ. Proc. § 430.10, subd. (e).)  Defendants also “specifically” [sic] demur on the grounds that it cannot be ascertained from the complaint whether the purported contract is written or oral (see Code Civ. Proc., § 430.10, subd. (g)), and it is uncertain which parties are alleged to be bound by the purported contract. (See Code Civ. Proc., § 430.10, subd. (f).)

 

The complaint alleges one contract: an oral agreement made on December 5, 2012.  The complaint goes on to allege that one portion of the oral agreement pertaining  to the assignment of Plaintiff’s interest in the Property to Defendant was reduced to writing on December 6, 2012, and another portion of the oral agreement pertaining to Defendant’s promises to provide referrals and introductions was “confirmed” by a writing sent to Defendant in October 2013.  (Complaint ¶ 48, 59.)   The complaint is not uncertain as to the identity of the breaching party or the agreement breached because it alleges that Defendant and SFRP are agents of each other and  “breached the Contract pertaining to his promises to promote [Plaintiff’s] real estate development business by ignoring [Plaintiff’s] request for references, introductions and meetings.”  (Complaint ¶ 5, 49, 60.)

 

The alleged contract is not barred by the statute of frauds because Plaintiff alleges multiple separate promises: the assignment of Plaintiff’s interest in the Property, the payment of $1,700,000, and the making of referrals and introductions.  The promise to make referrals and introductions is divisible from the promise to assign Plaintiff’s interest in the Property to SFRP, LLC.  (See Pollyanna Homes, Inc. v. Taylor (1969) 56 Cal.2d 676678-679; White Lighting Co. v. Wolfson, 68 (1968) Cal.2d 336, 345.)  Moreover, Plaintiff alleges in his complaint that he has fully performed under the contract and, therefore, the contract is not affected by the statute of frauds.  (See Complaint ¶ 61; see also Prince v. Varona (1956) 144 Cal.App.2d 673, 676 [“[a]n oral contract which has been fully executed is not affected by the provisions of the statute of frauds… [and] [t]he rule applies even when full performance has been rendered by only one of the parties”]; Freitas v. Freitas (1916) 31 Cal.App. 16, 19; Realty Corp. of America, Inc. v. Burton (1958) 162 Cal.App.2d 44, 57.)

 

Defendants’ demurrer to the fifth cause of action is OVERRULED. (See Code Civ. Proc., § 430.10, subds. (e),(f), and (g).)

 

Fourth Cause of Action: Rescission

 

Defendants demur to the fourth cause of action on the ground that Plaintiff failed to allege facts sufficient to constitute rescission.  (See Code Civ. Proc. § 430.10, subd. (e).)

 

Defendants’ argument regarding standing is not well-taken because Plaintiff’s complaint seeks rescission of “the Contract” as described by the complaint: the December 5, 2012 oral agreement (portions of which were reduced to writing in the Assignment Agreement and the October 2013 confirmation document)— and the contract as described by the complaint does not include the underlying purchase and sale agreement between SFRP, LLC and the original sellers of the Property.  (See Complaint ¶ 48, 56.)

 

Defendants’ argument regarding the impossibility of rescission is without merit.  Unlike the non-controlling unpublished federal trial court decision on which Defendants rely, Esoimeme v. Wells Fargo Bank (“Esoimeme”) 2011 U.S. Dist. LEXIS 98492 (E.D. Cal. Sept. 1, 2011), the real property in this case has not been sold to a third party: SFRP, LLC still holds title and the complaint also alleges that Plaintiff has offered to “restore [Defendant] to the position he was in prior to December 5, 2012 by returning the $1,700,000 and any additional funds [Defendant] paid in escrow to complete his acquisition of the Property.”  (Complaint ¶ 3, 57.)  Additionally, in the two other cases cited by Defendants, Kasch v. Labor Temple Ass’n. (“Kasch”) (1912) 18 Cal.App. 508 and Joshua Tree Townsite Co. v. Joshua Tree Land Co. (“Joshua”) (1950) 100 Cal.App.2d 590, the finding of impossibility to restore the status quo was made by a trial court after a full trial on the merits.  The cases do not involve the court making this determination on demurrer.

 

Defendants’ demurrer to the fourth cause of action is OVERRULED.  (See Code Civ. Proc. § 430.10, subd. (e).)

 

 

Third Cause of Action: Concealment

 

Defendants’ demurrer to the third cause of action on the ground that Plaintiff failed to allege facts sufficient to constitute a cause of action is SUSTAINED without leave to amend.  (See Code Civ. Proc. § 430.10, subd. (e).)

 

Plaintiff alleges that Defendant “intentionally failed to disclose and actively concealed the fact that he had no intention of honoring his representations and commitments to [Plaintiff]” and “had a duty to [Plaintiff] to tell him the truth about his intentions.”  (Complaint ¶¶ 41-42.)  Thus, the basis for Plaintiff’s concealment claim is that Defendant owed him a duty to disclose his intention to commit fraud and Plaintiff has not cited authority establishing such a duty. (See LiMandri v. Judkins (“LiMandri”) (1997) 52 Cal. App. 4th 326, 337-339 [abrogated on other grounds by Walsh v. Kindred Healthcare 2012 U.S. Dist. LEXIS 41012 (N.D. Cal. Mar. 26, 2012] [the general duty is not to warn of the intent to commit wrongful acts, but to refrain from committing them]; see also Bank of America Corp. v. Super. Ct. (“BOA”) (2011) 198 Cal. App. 4th 862, 871-873 [the court noted that it was unaware of any authority supporting the imposition of additional liability on an intentional tortfeasor for failing to disclose his or her tortious intent before committing a tort].)  Moreover, Plaintiff’s concealment claim is redundant as he already asserts a cause of action for promissory fraud in the first cause of action.  Plaintiff provides no indication in his opposing papers how the foregoing deficiencies can be remedied by amendment. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 [burden on plaintiff to establish he can amend pleading and how amendment changes legal effect of pleading].)