Demurrer & Motion to Strike (Judge Martha K. Gooding)


1) Demurrer to Complaint ? sustained with leave to amend

2) Motion to Strike Complaint – moot

3) Case Management Conference ? parties to appear

The Court sustains the Demurrer by Paul Benec and Pickford Real Estate Inc. dba Berkshire Hathaway Home Services California Properties? to the Complaint with 10 days leave to amend.

  1. Demurrer
  1. Breach of Contract

Moving Defendants, the sellers? agent and listing company, are not parties to the purchase agreement.? (See Ex. B attached to the Complaint).

 

Plaintiff cites two cases to argue that the seller’s broker may be a proper party to the buyer’s action even if the broker is not a party to the sale agreement – Burkhouse v Phillips (1971) 18 Cal.App.3d 661, 666 and Snelson v OndulandoHighlands Corp. (1970) 5 Cal.App.3d 243, 252.? However, these cases stand for the proposition that a real estate agent can be liable for fraud – not for breach of contract. See also Croeni v. Goldstein (1994) 21 Cal. App. 4th 754, 758.

 

Plaintiff has cited no case that permits holding a seller?s real estate agent to be held liable for breach of contract when he or she is not a party to the contract.

 

The Court therefore sustains the demurrer to this cause of action with leave to amend.

 

  1. Fraud

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The Court sustains the demurrer to this cause of action because it is not pled with the requisite specificity. Plaintiff alleges both a misrepresentation (a statement that there was an easement in place) and an omission (a failure to disclose that the retaining wall needed to be redesigned and approved).

 

Plaintiff must separately allege the facts of the claimed fraud ? including each alleged omission and each alleged misrepresentation — as to each separate defendant; it cannot lump all the Defendants together.? ?To withstand a demurrer, the facts constituting every element of the fraud must be alleged with particularity, and the claim cannot be salvaged by references to the general policy favoring the liberal construction of pleadings. Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216.

 

The Court does not find persuasive Defendants limited duty argument.? The Complaint alleges actual knowledge, and thus the fact that the need to redesign the retaining wall could not readily seen in a visual inspection is not determinative. Plaintiff alleges that all of the defendants did in fact have knowledge of the true facts. Compl., ??21, 22.

 

The Court therefore sustains the demurrer to this cause of action with leave to amend.

 

  1. Negligent Misrepresentation

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An affirmative statement is an essential element for liability for a negligent misrepresentation.? Yanase v. Auto. Club of So. Cal.(1989) 212 Cal. App. 3 468, 473. The Complaint alleges one misrepresentation, which is alleged in the second cause of action for fraud and incorporated by reference into the third cause of action for negligent misrepresentation. In paragraph 22, the Complaint alleges that ?Defendants affirmatively stated there was an easement on the property that never existed.?

 

When a person makes an erroneous statement and he or she is acting reasonably and in good faith with reasonable grounds to believe it is true, the representation is innocent, and there is no tort liability. Quality Wash Group V, Ltd. v. Hallak (1996) 50 Cal. App. 4th 1687, 1696?1697. Here, Plaintiff alleges that the true facts should have been discovered by reasonable diligence, but he does not actually allege that Defendants did not believe they were true and were not acting reasonably.

 

Further, a negligent misrepresentation is a species of ?actual fraud? and a form of deceit and therefore this claim must be pled with specificity.? Lumping Defendants together is insufficient.

 

The Court therefore sustains the demurrer to this cause of action with leave to amend.

 

  1. Motion to Strike?

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The Motion to Strike is moot in light of the Court?s ruling on the demurrer. However, the Court orders Plaintiff to separately state its prayer for relief for each cause of action; as currently pled, it appears that Plaintiff is improperly seeking punitive damages on all three causes of action.

 

Defendants are ordered to give notice.