Case Number: GC049346    Hearing Date: August 22, 2014    Dept: NCD

TENTATIVE RULING (8-22-14)
#8
GC 049346
MUSCHETTO v. LEFFMAN

Defendants’ Demurrer to Plaintiff’s Second Amended Complaint
Defendants’ Motion to Strike Portions of Plaintiff’s Second Amended Complaint

TENTATIVE:
Demurrer is OVERRULED as untimely and on its merits.
Motion to strike is DENIED as untimely and on its merits.
Ten days to answer.

CAUSES OF ACTION: from Third Amended Complaint
1) Negligence
2) Nuisance
3) Negligent Infliction of Emotional Distress
4) Breach of the Implied Warranty of Habitability
5) Breach of Contract
6) Fraud
7) Intentional Misrepresentation
8) Negligent Misrepresentation

SUMMARY OF FACTS:
Moving defendants filed a demurrer and motion to strike in response to the First Amended Complaint, which was heard on January 30, 2013, by Judge Goldstein. The demurrer was sustained to the sixth cause of action for fraud and seventh cause of action for intentional misrepresentation, and granted to strike claims for punitive damages with leave to amend, in a detailed minute order. Moving defendants then filed a demurrer to the Second Amended Complaint, which was heard on February 7, 2014, Judge Doyle presiding. The demurrer was again sustained and the motion to strike granted:

“Demurrer is SUSTAINED. The sixth and seventh causes of action are still insufficiently specific, as it is not clearly alleged when, where or by what means any representation was made or concealment undertaken, and it is not clearly alleged that there was intent to defraud. One final opportunity to amend.
Motion to strike is GRANTED, as the causes of action seeking punitive damages are not sufficiently stated.”

Defendants again challenge the sufficiency of the fraud causes of action and seek to strike the claim for punitive damages as set forth in the Third Amended Complaint.

ANALYSIS:
Procedural
CCP § 430.40(a) provides “A person against whom a complaint or cross-complaint has been filed may, within 30 days after service of the complaint or cross-complaint, demur to the complaint or cross-complaint.”

In this case, the TAC was served on February 25, 2014, by mail. The demurrer and motion to strike were filed on May 27, 2014, and served on May 23, which was 90/86 days after service. Taking into account service by mail, this is 55/51 days late. The demurrer is overruled and the motion to strike is denied as untimely.

Substantive
Demurrer
Sixth Cause of Action—Fraud and Seventh Cause of Action—Intentional Misrepresentation
The demurrer to the sixth cause of action was originally sustained as follows:
“The sixth cause of action for fraud is based on allegations that the Defendants falsely represented that the property would be safe and habitable, that plumbing problems would be properly repaired, and that the problems with the raw sewage and blackwater had been remedied. There are no particular allegations regarding the representations made by each of the four Defendants. There are no particular allegations identifying how, when, where, or by what means the false allegations were made. There are no particular allegations that the Defendants intended to defraud the Plaintiff. There are no particular allegations that the Plaintiff justifiably relied upon the false representations. This is insufficient to plead the cause of action.”

The demurrer to the seventh cause of action was originally sustained as follows:
“The seventh cause of action for intentional misrepresentation is based on the same allegations, i.e., the Defendants falsely represented that the property would be safe and habitable, that plumbing problems would be properly repaired, and that the problems with the raw sewage and blackwater had been remedied. Further, the cause of action contains the same defects. There are no particular allegations regarding the representations made by each of the four Defendants. There are no particular allegations identifying how, when, where, or by what means the false allegations were made. There are no particular allegations that the Defendants intended to defraud the Plaintiff. There are no particular allegations that the Plaintiff justifiably relied upon the false representations. This is insufficient to plead the cause of action.’

The court had also originally noted that plaintiff had improperly argued that incorporated allegations made the pleading sufficiently specific:

“The Plaintiff’s opposition does not direct the Court to any allegations in the sixth or seventh cause of action to demonstrate that the causes of action are sufficient. Instead, the Plaintiff discusses allegations in other parts of the pleadings.

A civil plaintiff may, for the sake of convenience, incorporate by reference previous portions of his pleading for informational purposes only. Cal-West Nat. Bank v. Superior Court (1986) 185 Cal. App. 3d 96, 101. Here, the Plaintiff is not incorporating portions for informational purposes. Instead, the Plaintiff is attempting to plead essential elements of his fraud claims by incorporation. This makes the cause of action subject to a demurrer because the cause of action does not plead the particular facts demonstrating that each of the Defendants engaged in fraud practices. Further, it is improper to impose the burden on the Defendants and the Court to search through the pleadings in an effort to identify the allegations that plead the element of the fraud causes of action.

Therefore, the Court sustains the demurrers to the sixth and seventh causes of action. Since it is reasonably possible for the Plaintiff to correct the defects in these causes of action by amending them so that they plead the particular facts needed to state fraud claims within the body of the causes of action, the Court grants 10 days leave to amend.”

Defendants again argue that the causes of action are insufficiently stated, and fail to state any specific facts showing moving defendants’ intent to deceive plaintiff.

The elements of a fraud cause of action are the following:
1) a representation, usually of fact, which is false;
2) knowledge of its falsity;
3) intent to defraud;
4) justifiable reliance upon the misrepresentation; and
5) damage resulting from that justifiable reliance
Stansfield v. Starkey (1990) 220 Cal. App. 3d 59, 72-73.

The cause of action must be alleged with particularity because it is a tort of deceit; the claims cannot be saved by referring to the policy favoring liberal construction of pleadings. Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216. To plead the element of a misrepresentation with particularity, the complaint must allege facts showing how, when, where, to whom, and by what means the representations were tendered. Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.

The sixth cause of action continues to allege that “Defendants” represented to plaintiff that the subject property was safe and habitable, without designating which defendant made such a representation, where or by what means (oral or written). [Para. 73]. Similar allegations are made in the seventh cause of action. [Para. 116]. It appears that plaintiff is not really attempting to state a false promise claim, but a claim that defendants engaged in fraud by concealing that Tiki & Checkers did not appropriately repair the problem, and by instructing Emergency Restoration Services to conceal from plaintiff its findings. It is now more specifically alleged what occurred in connection with the last incident, that it occurred on May 28, 2010, and that Leffman was informed by ERS of the dangers of the raw sewage and its risks to plaintiff, and knowingly and willfully instructed ERS to conceal any information regarding the results of their investigation to plaintiff. [Paras. 87-95]. The pleading also alleges facts suggesting intent to defraud or induce reliance, in that Leffman “purposely instructed ERS to preclude Plaintiff from ascertaining any information and conceal the findings of the investigation for the purposes of continuing to collect rent at the SUBJECT PROPERTY…” [Para. 96, 140]. The pleading is now sufficiently specific on at least this one theory, and the demurrer is now overruled.

Motion to Strike
Since the demurrer is now overruled, the motion to strike is denied, as a properly pleaded fraud claim will itself support a recovery of punitive damages; no allegations of malice or intent to injure are required. Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 610.