Case Number: SC128859 Hearing Date: October 17, 2018 Dept: M

CASE NAME: Marios Savvides v. Robert Klenner

CASE NO.: SC128859

Complaint filed: 2/16/2018

HEARING DATE: 10/17/2018

Trial date: N/A

MEET & CONFER? Yes

Discovery cutoff per CCP §2024.020(a) C/O: N/A

NOTICE per CCP §1005(b): Ok

Motion cutoff per CCP §2024.020(a): N/A

SUBJECT: DEMURRER TO FIRST AMENDED COMPLAINT

MOVING PARTY: Plaintiff Marios Savvides

RESP. PARTY: Defendant Robert Klenner

BACKGROUND

Plaintiff’s complaint alleges that he entered into an agreement to purchase four pieces of real property (“the Property”) from Defendant. Defendant represented that 3 of the lots making up the Property could not be sold until ongoing litigation had concluded, whereas the fourth lot could be sold immediately. Plaintiff agreed to pay for environmental inspection of the Property in exchange for a credit on the purchase of the Property. Ultimately, Plaintiff alleges, Defendant refused to sell the Property pursuant to the terms of the original agreement unless Plaintiff purchased an additional piece of real property that was allegedly contaminated. Plaintiff refused and asked that the original agreement be performed. Plaintiff alleges that Defendants executed a fraudulent scheme, under which Plaintiff would purchase one of the lots – which was worthless to Plaintiff without the other three – and then Defendant would refuse to sell the other three in order to force Plaintiff to purchase the contaminated property.

Plaintiff’s First Amended Complaint (FAC) contains causes of action for 1. Breach of Written Contract and 2. Deceit.

TENTATIVE RULING

Defendant’s Demurrer to Plaintiff’s First Cause of Action for Breach of Written Contract is SUSTAINED with ten days leave to amend.

Defendant’s Demurrer to Plaintiff’s Second Cause of Action for Deceit is OVERRULED.

ANALYSIS

Demurrer Standard

A demurrer accepts as true all well pleaded and judicially noticeable facts, but not deductions, contentions, or conclusions of law or fact. (Fox v. JAMDAT Mobile, Inc. (2010) 185 Cal.App.4th 1068, 1078.) When there are unexplained contradictions between exhibits and the allegations, the allegations are disregarded as surplusage. (Edgerly v. City of Oakland (2012) 211 Cal.App.4th 1191, 1198.) When the exhibits are ambiguous, the construction urged by plaintiff will be accepted as true unless patently absurd or incorrect. (Chisolm v. Board of Retirement (2013) 218 Cal.App.4th 400, 410-411.) A demurrer is all-or-nothing, i.e., no demurrer to a portion of a cause of action. (People v. Union Pacific R. Co. (2006) 141 Cal.App.4th 1228, 1243.)

A general demurrer challenges the sufficiency of the pleading as a matter of law and must not be sustained if the facts show an entitlement to some relief. (Collier v. Superior Court (1991) 228 Cal.App.3d 1117, 1120.) “To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.)

First Cause of Action for Breach of Written Contract

To prevail on a cause of action for breach of contract, Plaintiff must establish: (1) the existence of contract between Plaintiff and Defendants; (2) Plaintiff’s performance or excuse for nonperformance; (3) the Defendants’ breach; and (4) any resulting damages. (E.g., Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1388.) An agreement for the sale of real property must be in writing. (Cal. Civ. Code §1624.) Preliminary negotiations or an agreement for future negotiations constitute an unenforceable “agreement to agree.” (Copeland v. Baskin Robbins U.S.A. (2002) 96 Cal.App. 4th 1251, 1257.)

Defendant demurs to the first cause of action primarily on the grounds that Plaintiff has not alleged the existence of a written agreement to purchase the three additional lots beyond the first. (Demurrer at pgs. 13-15.) Plaintiff, however, points to Addendum No. 1 to Exhibit A, which states that “this transaction is to be part of a coordinated transaction and to be interpreted and harmonized with the vacant lot purchase agreement for [the other three lots].” (Ex. A at pg. 10.) This Court agrees with Plaintiff that this language seems to infer that there is an agreement to purchase the other three lots, but the complaint does not affirmatively assert the existence of such a written agreement, let alone attach a copy thereof to the complaint. Moreover, although Plaintiff’s exhibits B & C set forth more specific terms of the alleged agreement, they also explicitly states that “Buyer and Seller are continuing to work in good faith towards a mutually agreeable Purchase and Sale Agreement with respect to the Three Lots as well as Lot 62.” (Exhibits B & C, ¶ 3 at pg. 2, italics added.) This language clearly indicates that no agreement for the purchase of the three additional lots actually exists, but that Plaintiff and Defendant were engaged in negotiations towards forming such an agreement, i.e., an “agreement to agree.” Thus, even when taking into account Exhibits B and C, Plaintiffs have only alleged the existence of an unenforceable “agreement to agree” and ongoing negotiations regarding the three lots.

Defendant’s Demurrer to Plaintiff’s First Cause of Action is SUSTAINED with ten days leave to amend to clearly allege a written agreement between the parties to purchase/sell the additional three lots.

Second Cause of Action for Deceit (Promissory Fraud):

The elements of fraud are: (1) misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity (scienter); (3) intent to defraud or induce reliance; (4) justifiable reliance; and (5) damages. (See Civil Code §1709.) Fraud actions are subject to strict requirements of particularity in pleading. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216.)

Defendant first demurs on the grounds that Plaintiff has not alleged an actual promise to sell the three lots. (Demurrer at pgs. 16:7-17:16). As explained above, Plaintiff has not sufficiently alleged the existence of a written agreement to sell the lots. The requirement that an agreement to sell property be reduced to a writing only applies to causes of action for breach of contract, however. The totality of the facts alleged by Plaintiff indicate that Defendant did, in fact, promise to eventually sell the three lots, even if that promise was never actually included in a written agreement. (E.g. FAC at ¶¶8, 9, 17, 18, 19.) Defendant also demurs on the grounds that Plaintiff could not have reasonably relied on these promises, given that there was no actual written agreement for the sale of the three lots. (Demurrer at pgs. 17:18-18:5). Under the facts alleged, however, Plaintiff could have reasonably believed that Defendant intended to ultimately enter into such an agreement.

Defendant’s Demurrer to Plaintiff’s Second Cause of Action is OVERRULED.