Case Number: VC063886    Hearing Date: August 12, 2014    Dept: SEC

RAD v. HARRIS
CASE NO.: VC063886
HEARING: 08/12/14

#8
TENTATIVE ORDER

Defendant AUCTION.COM’s demurrer to the First Amended Complaint is
SUSTAINED WITHOUT LEAVE TO AMEND. C.C.P. § 430.10(e).

The motion to strike the claim for punitive damages and supporting allegations is
DEEMED MOOT. C.C.P. §§ 435, 436.

Plaintiff NAVID RAD purchased certain real property which was formerly owned by defendant JOSEPH HARRIS. FAC, ¶9. As alleged, the parties entered into the written purchase agreement on November 19, 2013, after plaintiff successfully bid on the property at auction (which occurred after Harris’s default on his loan obligations) that same date. ¶11, Exh. A. On December 16, 2013, Harris signed the Grant Deed to plaintiff. Defendant Nationstar allegedly held the Deed of Trust. ¶10.

On May 13, 2014, the Court sustained defendant Auction.com’s demurrer to the original complaint, finding that its role in the sale of the property was not defined in the pleading. Defendant Auction.com again demurs to the causes of action for fraud (2nd), unjust enrichment (5th) and unfair business practices (6th).

In the FAC, plaintiff alleges that co-defendant Nationstar retained Larry Harmon and Harmon Homes, Inc. (“HH”) to act as selling agents/brokers and that it “also retained the services of Auction through which the property could be sold.” FAC, ¶13.

In support of the fraud claim, plaintiff contends that defendant also acted as “a bonded auctioneer and auction company” and that it had (1) a duty to disclose the condition of the property prior to the sale and (2) a statutory duty to make warranties regarding the condition of the property. ¶23. Plaintiff alleges that defendant violated Civil Code section 2362.

Civil Code section 2362 outlines an auctioneer’s authority from the seller, and lists certain things the auctioneer is required to do. None of those requirements is triggered by the facts here. The reference to warrant the goods under Civil Code section 2323 applies only to personal property. Plaintiff has not articulated a basis for the alleged duties owed by defendant Auction.com, and has not pled any facts to support an actionable failure to disclose. As noted in the demurrer to the FAC brought by co-defendants, the allegations as to when the vandalism occurred are uncertain. It is thus unclear whether defendant even had knowledge of the damages at the time of its purported involvement in the sale.

Moreover, as noted in the moving papers, the exhibits to the FAC (including the sale agreement) do not show that defendant played an actual role in the sale. See Exh. A, p. 5 (listing Harmon as the listing broker).

The unjust enrichment cause of action is based on defendant’s alleged receipt of commissions from the sale. FAC, ¶42(d). The unfair competition claim is based on the alleged failure to disclose. ¶45.

Although plaintiff was given an opportunity to amend to allege facts specifying defendant’s alleged wrongdoing, he was unable to do so. It does not appear that there exist additional facts supporting the charges against defendant. Accordingly, the demurrer is sustained without leave to amend.