2013-00154355-CU-CD

Kenneth Swarm vs. Bloom Architectual Developments Inc.

Nature of Proceeding: Hearing on Demurrer

Filed By: Haro, Summer D.

Defendants’ Demurrer to Plaintiffs’ original Complaint is SUSTAINED, with leave to
amend. Defendants’ Request for Judicial Notice is GRANTED.

Plaintiffs Kenneth and Donna Swarm’s Complaint sets forth seven causes of action
against defendants: the 1st for Rescission and Damages (against Eric and Linda), the
2nd for Breach of Contract (against Eric and Linda), the 3rd for Fraud (against Eric,

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Linda and Bloom Architectural Development), the 4 for Negligent Misrepresentation
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(against Eric, Linda and Bloom Architectural Development), the 5 for Breach of
Express/Implied Warranty (against Eric, Linda and Bloom Architectural Development),
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the 6 for Strict Liability (against Eric, Linda and Bloom Architectural Development)
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and the 7 for Negligent Construction (against Eric, Linda and Bloom Architectural
Development). Defendants demur to each cause of action except the 7th.

Demurrer to the 1st for Rescission and Damages (against Eric and Linda) is
SUSTAINED, with leave to amend.

Plaintiffs’ Complaint fails to allege facts supporting a claim for rescission of the contract
for their purchase of the property. Plaintiffs fail to allege with the particularity required
for a fraud claim, any facts showing what fraudulent or menacing conduct by Linda or
Eric Bloom caused Plaintiffs to enter into the contract for the Property. (Lazar v. Sup.
Ct. (1996) 12 Cal.4th 631, 645)

Additionally, since none of the contract terms have been alleged in the Complaint, it
does not contain any facts alleging what consideration, if any, failed, how it failed,
whether it was material, or who caused such failure.

Demurrer to the 2nd for Breach of Contract (against Eric and Linda) is SUSTAINED,
with leave to amend.

Plaintiffs have failed to allege the material terms of the contract, when the real property
was purchased or for how much. No contractual obligations of the defendants are
supported by any facts.

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Demurrers to the 3 for Fraud (against Eric, Linda and Bloom Architectural
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Development) and the 4 for Negligent Misrepresentation (against Eric, Linda and
Bloom Architectural Development), are SUSTAINED, with leave to amend.

In California, fraud must be pled specifically; general and conclusory allegations do not
suffice. Thus the policy of liberal construction of the pleadings will not ordinarily be
invoked to sustain a pleading defective in any material respect. This particularity
requirement necessitates pleading facts which show how, when, where, to whom, and
by what means the representations were tendered. Lazar v. Superior Court (1996) 12
Cal. 4th 631, 645.

A plaintiff’s burden in asserting a fraud claim against a corporate employer is even
greater. In such a case, the plaintiff must “allege the names of the persons who made
the allegedly fraudulent representations, their authority to speak, to whom they spoke,
what they said or wrote, and when it was said or written.” Id.

Here, none of the specifics required have been alleged.

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Demurrer to the 5 for Breach of Express/Implied Warranty (against Eric, Linda and
Bloom Architectural Development) is SUSTAINED, with leave to amend. As it is unclear who made the alleged representations, what the representation was,
when the representation was made or how, or whether privity existed between the
parties, the complaint fails to state facts sufficient to constitute a cause of action.

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Demurrer to the 6 for Strict Liability (against Eric, Linda and Bloom Architectural
Development) is SUSTAINED, with leave to amend.

Plaintiffs have failed to allege facts sufficient to constitute a cause of action, as the
economic loss rule allows a plaintiff to recover in strict products liability in tort when a
product defect causes damage to “other property,” that is, property other than the
product itself. The law of contractual warranty governs damage to the product itself.
Jimenez v. Superior Court (2002) 29 Cal. 4th 473, 483. In this action, where the
damage alleged is to the house, there are no allegations that the defects in the house
caused personal injuries or damages to property other than to the house itself. (See,
e.g. Robinson Helicopter Co. Inc. v. Dana Corp (2004) 34 Cal.4th 979, 988 (“The
economic loss rule requires a purchaser to recover in contract for purely economic loss
due to disappointed expectations, unless he can demonstrate harm above and beyond
a broken contractual promise.”) (quotations, citations omitted).)

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No demurrer is made to the 7 for Negligent Construction (against Eric, Linda and
Bloom Architectural Development).

Plaintiffs may have leave to file and serve their First Amended Complaint not later than
Monday, June 16, 2014. The responsive pleading shall be due filed and served 10
calendar days thereafter (15 days if service is by mail).

This minute order is effective immediately. No formal order nor further notice is
required, the tentative ruling providing sufficient notice.