2017-00214222-CU-OR

Sam Johnson vs. Craig Beechum

Nature of Proceeding: Hearing on Demurrer

Filed By: Graves, Eric

Defendants Duke Doering and Kathy Doering’s (“Defendants”) Demurrer to Plaintiff Sam Johnson’s (“Plaintiff”) Complaint is unopposed and is SUSTAINED WITH LEAVE TO AMEND.

This is a breach of contract, breach of fiduciary duty, and misrepresentation action arising from a real property transaction. Demurring Defendants are named in connection with only the Third and Fourth Causes of Action, for negligent misrepresentation and breach of contract respectively.

Plaintiff alleges that he reached a “tentative agreement” with Defendants wherein he would “be allowed to purchase” a parcel of Defendants’ real property (the “Golden Gate Property”) “over a period of months.” (Comp. ¶ 8.) Plaintiff paid $4,000 earnest money into an escrow account with Stewart Title. (Compl. ¶ 9.) The “Beechum Defendants” agreed to serve as a dual agent and represent both Plaintiff as buyer and Defendants as seller. (Id.) Plaintiff alleges that on or about October 16, 2014, Defendants sent him an email stating that “a draft agreement had been prepared for the purchase of the Golden Gate property.” (Compl. ¶ 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 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. (Compl. ¶¶ 9-11.) 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. (Compl. ¶ 11.)

Plaintiff alleges that the Beechum Defendants failed to provide adequate loan terms to Plaintiff for the purchase of the Golden Gate property. (Compl. ¶ 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.” (Compl. ¶

13.) Plaintiff allegedly contacted an alternate lender, Alpine Mortgage, but on hearing this the Beechum Defendants threatened to sabotage the Golden Gate deal. (Compl.

¶ 14.) Plaintiff alleges that he was forced to accept a less desirable and more expensive loan because Defendants “were threatening to sabotage Plaintiff’s purchase of the Golden Gate property and evict Plaintiff and his family from the

property.” (Compl. ¶ 15.) Plaintiff alleges that he suffered both “extreme emotional distress and economic damages” as a result. (Compl. ¶ 15.)

Plaintiff filed a written non-Opposition to the instant demurrer, requesting an opportunity to amend his pleading.

Accordingly, the demurrer to the Third Cause of Action for Negligent Misrepresentation is SUSTAINED WITH LEAVE TO AMEND. The Fourth Cause of Action for Breach of Contract is also SUSTAINED WITH LEAVE TO AMEND.

This is the first challenge to Plaintiff’s pleading, and leave to amend would not necessarily be futile with respect to these causes of action. For instance, among correcting various other deficiencies described in the moving papers, Plaintiff might be able to amend the supporting allegations so as to allege damages proximately resulting from the Doering Defendants’ alleged misrepresentation as well as a potentially-actionable representation regarding the purchase price for the Golden Gate property (as opposed to a potential purchase price as stated in a mere “draft agreement.”)

Where leave to amend was granted, Plaintiff shall file and serve a First Amended Complaint on or before January 19, 2018. Responses to the amended pleading shall be filed and served 10 days thereafter, 15 days if served by mail.