Case Name: Hui Yang, et al. v. Hur Ling Hsiu, et al.

Case No.: 17CV315496

I. Background

This case arises from a real estate transaction pursuant to which plaintiffs Hui Yang and Ran Hu (collectively “Plaintiffs”) purchased a residence (“the Property”) from defendants Hur Ling Hsui and Hetty Sun Hsiu (collectively “the Sellers”). Defendants Elizabeth Chao-Siang Ting (erroneously sued as Lisa Ting) and Yuan Corporation dba AA Group (erroneously sued as The AA Group) were the Sellers’ agent/broker in the transaction.

According to the allegations of the Complaint, Plaintiffs chose to purchase the Property primarily to ensure their children would attend a school in the Union School District. The MLS listing for the Property indicated it was within the Union School District. The defendants knew Plaintiffs were motivated by a desire to ensure their children were enrolled at a school in the Union School District. The defendants also knew the Property was not in the Union School District, but deceived Plaintiffs by making an incorrect statement in the MLS listing. Subsequent to the purchase, Plaintiffs realized the Property was not in fact in the Union School District.

Plaintiffs assert five causes of action for: (1) breach of contract; (2) fraud and deceit; (3) intentional/negligent misrepresentation; (4) negligence; (5) violation of Business and Professions Code section 17200 et seq. The first cause of action is asserted against Hur Ling Hsiu and Hetty Teh Sun Hsiu only, and the remaining four are brought against all defendants.

Currently before the Court is Elizabeth Chao-Siang Ting and Yuan Corporation dba AA Group’s (collectively “Defendants”) demurrer to the second, third, fourth, and fifth causes of action.

II. Request for Judicial Notice

Defendants filed a request for judicial notice of a “Grant Deed recorded in the Official Records of Santa Clara County as document number 23059528.” (RJN, p. 2:10-11.) Defendants state the request for judicial notice is made “[p]ursuant to California Evidence Code section 452(d).” (RJN, p. 1:23.) As a preliminary matter this citation is problematic because Evidence Code section 452, subdivision (d), permits judicial notice of court records. (Evid. Code, § 452, subd. (d).) Defendants are not requesting judicial notice of a court record, but rather of a grant deed. A grant deed may be a court record, there is no indication the grant at issue here is. Thus, subdivision (d) does not provide a legal basis for Defendants’ request for judicial notice. In any event, a grant deed is subject to judicial notice under Evidence Code section 452, subdivision (c). (See Ragland v. U.S. Bank Nat. Assn. (2012) 209 Cal.App.4th 182, 194.) Defendants should cite the correct basis for their request for judicial notice in the future. The Court treats this a request brought under subdivision (c).

Although Defendants state “[a] true and correct copy is attached hereto as Exhibit ‘A,’” no document is actually attached to the request in the Court’s file. (See Id. at p. 2:11.) “[A] party requesting judicial notice of material under Evidence Code sections 452 or 453 must provide the court and each party with a copy of the material.” (Cal. Rules of Court, rule 3.1306(c).)

Therefore, based upon the absence of the document, the request for judicial notice is DENIED.

III. Merits of Demurrer

Defendants demur to the second, third, fourth, and fifth causes of action, upon the grounds of failure to state facts sufficient to constitute a cause of action and uncertainty. (See Code Civ. Proc., § 430.10, subds. (e) and (f).) The Court addresses each ground separately.

A. Failure to Plead Sufficient Facts

Defendants argue the second through fourth causes of action fail to state a claim because they are time barred and fraud must be pled with specificity.

1. Statute of Limitations

“ ‘The defense of statute of limitations may be asserted by general demurrer if the complaint shows on its face that the statute bars the action.’ [Citations.] There is an important qualification, however: ‘In order for the bar of the statute of limitations to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows merely that the action may be barred.’ [Citations.]” (E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1315-1316.) “In assessing whether plaintiff’s claims against defendant are time-barred, two basic questions drive [the] analysis: (a) What statutes of limitations govern the plaintiff’s claims? (b) When did the plaintiff’s causes of action accrue?” (Id. at p. 1316.)

With respect to the first question, the applicable statute of limitations depends on “the nature of the cause of action, i.e., the ‘gravamen’ of the cause of action.” (E-Fab, Inc. v. Accountants, Inc. Services, supra, 153 Cal.App.4th at 1316.) Defendants assert the gravamen of this each cause of action is violation of Civil Code section 2079 et seq., thus the statute of limitation is two-years pursuant to Civil Code section 2079.4. Plaintiffs argue the statute of limitation discussed in section 2079.4 deals with physical inspection of the property, and is inapplicable here.

Civil Code section 2079, subdivision (a) provides “[i]t is the duty of a real estate broker or salesperson […] to a prospective purchaser of residential real property […] to conduct a reasonably competent and diligent visual inspection of the property offered for sale and to disclose to that prospective purchaser all facts materially affecting the value or desirability of the property that an investigation would reveal[.]” (Civ. Code, § 2079, subd. (a).) Civil Code section 2079.3 lays out the scope of the duty imposed by section 2079, and specifically excludes searching public records. (Civ. Code, § 2079.3.) This case is not about the physical condition of the property, such as a visual inspection might reveal. This case is about whether a property is located within a particular school district. That fact might have been revealed by reviewing public records, but such review was not required.

Even if the inspection pursuant to section 2079 did include obtaining some information about schools or searching public records, it does not follow that section 2079.4 would be the applicable statute of limitation. The second, third, and fourth causes of action are clearly based on fraud. Fraud claims have a three-year statute of limitations. (See Code Civ. Proc., § 338, subd. (d).) As for the fifth cause of action, the statute of limitation is proscribed by Business and Professions Code section 17208, which explicitly applies to claims for violations of Business and Professions Code section 17200. (Bus. & Prof. Code, § 17208.)

Accordingly, the demurrer is not sustainable on the basis that the second, third, fourth, and fifth causes of action are time barred.

2. Failure to Allege Fraud with Particularity

Defendants argue in a conclusory manner that the second, third, fourth, and fifth causes of action have not been pleaded with specificity. Their argument is wholly unsubstantiated. Defendants begin by restating the general rule that fraud must be pled with specificity. They move on to state that a pleading fraud must allege facts that “show how, when, where, to whom, and by what means the representations were tendered.” (Dem., p. 5:24-25.) Defendants’ argument is, in essence, one sentence long. Defendants argue, “[a]s the Second and Third causes of action are for ‘Fraud and Deceit’ and ‘Intentional/Negligent Misrepresentation’ and names a real estate broker and agent (Defendants Ting and AA Group), further specificity is required.” (Dem., p. 6:1-3.) Defendants do not list the elements of any cause of action, let alone direct their specificity argument towards a deficiency in a particular element. Such argument is deficient in that it does not provide basic argument and law in support of the points raised. (See Cal. Rules of Court, rule 3.1113(b) [memorandum must include law and arguments relied upon].)

It is unclear if Defendants intended their argument regarding specificity to apply only to the second and third causes of action. Such a limitation is consistent with the language of the demurrer. However, Defendants present no other argument to support the ground of failure to state sufficient facts as to the fourth and fifth causes of action. To the extent that they intended this argument to apply to the fourth and fifth cause of action, it fails. The fourth and fifth causes of action are not fraud, and thus need not be plead with specificity. (See Lazar v. Superior Court, supra, 12 Cal.4th at 645.)

Based upon the forgoing, the demurrer to the second, third, fourth, and fifth causes of action based upon failure to plead sufficient facts is OVERRULED.

B. Uncertainty

A pleading is subject to demurrer where it is uncertain. (Code Civ. Proc., § 430.10, subd. (f).) To sustain a demurrer on this ground, the pleading must be so unintelligible the other party cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him or her. (Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.) Uncertainty is a high bar, applying to pleadings that are so incomprehensible that a defendant cannot reasonably respond. (See Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1135.) If a pleading informs the opposing party of the issues and contentions, it is not subject to demurrer for uncertainty. (See Ibid.)

As with failure to plead sufficient facts, Defendants’ uncertainty argument is minimal and can be distilled to one sentence. They argue “Plaintiffs merely provide their allegations without specifying the claims against Defendants Ting and AA Group making the Second, Third, Fourth, and Fifth Causes of action uncertain as to Defendants Ting and AA Group.” (Dem., p. 6:1-3.)

The allegations are sufficiently clear to allow Defendants to respond to the Complaint. The allegations advise Defendants of the general nature of Plaintiffs’ claim, i.e. Defendants misled Plaintiffs regarding the school district the Property is located in.

To the extent that Defendants argue that Plaintiffs must plead additional facts to clarify and substantiate their allegations, Defendants misunderstand the nature of a demurrer for uncertainty. A demurrer for uncertainty is not intended to reach a pleading that could be made clearer through the incorporation of additional facts. (See People v. Lim (1941) 18 Cal.2d 872, 883.) A demurrer for uncertainty is directed at the uncertainty present in what has been alleged, not at the gaps that might have been filled with additional facts. (See Ibid.)

Accordingly, the demurrer to the second, third, fourth, and fifth causes of action on the ground of uncertainty is OVERRULED.