2017-00214222-CU-OR

Sam Johnson vs. Craig Beechum

Nature of Proceeding: Hearing on Demurrer to Plaintiff’s Second Amended Complaint (Craig

Filed By: Lewis, Erick D.

*** If oral argument is requested, the parties must at the time oral argument is requested notify the clerk and opposing counsel of the causes of action that will be addressed at the hearing. The parties are also reminded that pursuant to local court rules, only limited oral argument is permitted on law and motion matters. ***

Defendants Craig Beechum and Beechum Realty Group, Inc. dba Neighbors Home

Realty & Mortgage’s (collectively “Beechum Defendants”) demurrer to Plaintiff Sam Johnson’s second amended complaint is ruled upon as follows.

This is a breach of contract, breach of fiduciary duty, and misrepresentation action arising from a real property transaction.

Plaintiff alleges that he reached a “tentative agreement” with the Doering Defendants wherein he would “be allowed to purchase” a parcel of the Doering Defendants’ real property (the “Golden Gate Property”) “over a period of months.” (SAC, ¶ 8.) The Beechum Defendants agreed to serve as a dual agent and represent both Plaintiff as buyer and the Doering Defendants as seller. (Id.) Plaintiff alleges that on or about October 16, 2014, the Doering Defendants sent him an email stating that “a draft agreement had been prepared for the purchase of the Golden Gate property.” (SAC, ¶ 9.) The “draft agreement provided for a lease back arrangement wherein Plaintiffs would be allowed early entry into the Golden Gate property as lessees of the Golden Gate property pending final purchase by Plaintiffs.” (Id.) The “agreed upon purchase price for the Golden Gate property was $484,000.00.” (Id.) Plaintiff paid $4,000 earnest money into an escrow account with Stewart Title. (Id.) The draft agreement became a final contract on October 20, 2014 (“RPA”). (Id.)

Plaintiff alleges that his home in Fair Oaks would be sold and the proceeds put toward the purchase of the Golden Gate property. The Beechum Defendants agreed to

represent Plaintiff in the sale of the Fair Oaks property and agreed to act as a loan broker for Plaintiff in the purchase of the Golden Gate property. (SAC, ¶¶ 8-11.) Plaintiff alleges that although buyers were found for the Fair Oaks property, the Beechum Defendants failed to ensure that buyer contingencies were removed and failed to secure an earnest money deposit from the interested buyers. (SAC, ¶ 11.)

Plaintiff alleges that the Beechum Defendants failed to provide adequate loan terms to Plaintiff for the purchase of the Golden Gate property. (SAC, ¶ 13.) Then, “the Doering Defendants and the Beechum Defendants, utilizing the threat of backing out of the sale of the Golden Gate property and evicting Plaintiff from the property, forced Plaintiff into executing an addendum to the original Residential Purchase Agreement, raising the price of the Golden Gate property to $503,520.00, thus breaching the original Residential Purchase Agreement for the Golden Gate property.” (SAC, ¶ 13.)

Plaintiff allegedly contacted an alternate lender, Alpine Mortgage, but on hearing this, the Beechum Defendants threatened to sabotage the Golden Gate deal. (SAC, ¶ 14.) Plaintiff alleges that he was forced to accept a less desirable and more expensive loan because the Doering Defendants “were threatening to sabotage Plaintiff’s purchase of the Golden Gate property and evict Plaintiff and his family from the property.” (SAC, ¶ 15.)

The Beechum Defendants demur to the Second Cause of Action for Fraud/Intentional Misrepresentation and the Fourth Cause of Action for Breach of Contract.

The Court notes that in the “Introduction” section to the Beechum Defendants’ memorandum of points and authorities, the Beechum Defendants argue that “Plaintiff’s Intentional Infliction of Emotional Distress cause of action fails because Plaintiff fails to allege conduct on the part of Moving Parties that would shock the conscious of a civilized society.” (Motion , 2:21-23.) The SAC, however, does not expressly assert an Intentional Infliction of Emotional Distress cause of action. To the extent there is an IIED cause of action asserted in the SAC, Plaintiff has agreed to withdraw it.

Fraud/Intentional Misrepresentation

Plaintiff alleges the following:

· “[O]n or about October 20, 2014, the Beechum Defendants disclosed and represented to Plaintiff that said defendants were entering into a fiduciary relationship with Plaintiff and that the Beechum Defendants would use the utmost care, integrity, honesty and loyalty in said Defendant’s dealings with Plaintiff.” (SAC, ¶ 24.)

· “The Beechum Defendants also represented to Plaintiff on October 20, 2014, that said defendants would not disclose to the seller that Plaintiff would pay a price greater than the price which was offered, without the express permission of Plaintiff who was the buyer. (SAC, ¶ 24.)

· “The Beechum Defendants made the false representations to Plaintiff to deceive and to defraud Plaintiff and to induce Plaintiff to hire the Beechum Defendants as Plaintiffs real estate agent for the sole purpose of collecting commissionns from buyer and from seller and to coerce Plaintiff to obtain a real estate purchase loan exclusively through the Beechum Defendants, under threat of sabotaging Plaintiffs purchase of the Golden Gate property, if Plaintiff

did not comply with the Beechum Defendants’ wishes.” (SAC, ¶ 26.)

The Beechum Defendants focus only on the representation that the Beechum Defendants were entering into a fiduciary relationship with Plaintiff and would use the utmost care, integrity, honesty and loyalty in said Defendant’s dealings with Plaintiff. The Beechum Defendants did not address the representation that they “would not disclose to the seller that Plaintiff would pay a price greater than the price which was offered, without the express permission of Plaintiff who was the buyer.” Because the Beechum Defendants did not address this additional representation, their demurrer will not dispose of the entire cause of action. Thus, the demurrer is OVERRULED.

Breach of Contract

The Beechum Defendants demur on the ground Plaintiff fails to allege the existence of a contract, fails to attach the agreement or the legal effect of the material terms of the alleged contract.

In opposite, Plaintiff explains that the “agency agreement” is the “Disclosure Regarding Real Estate Agency Relationship” attached as Exhibit 2 to the SAC.

The demurrer is OVERRULED. At minimum, the Disclosure and the parties’ course of dealing reflects an implied-in-fact contract between Plaintiff and the Beechum Defendants. (See Miles v. Deutsche Bank National Trust Company (2015) 236 Cal.App.4th 394.)

The Beechum Defendants shall file and serve an answer to the SAC by no later than June 14, 2018. In the event Plaintiff files a third amended complaint pursuant to the Court’s ruling on the Doering Defendants’ demurrer, the Beechum Defendants’ answer to the SAC shall be deemed an answer to the third amended complaint.