Case Number: BC614995??? Hearing Date: July 28, 2016??? Dept: 58
Hearing Date: Thursday, July 28, 2016
Calendar No: 13
Case Name: YIHE California Pty Ltd. v. Long Dragon Realty Group, Inc., et al.
Case No.: BC614995
Motion: (1) Motion for Good Faith Settlement Determination
(2) Demurrer and Motion to Strike
Moving Party: Defendants Long Dragon Realty Group, Inc. and Robert Ho
Responding Party: Plaintiff YIHE California Pty Ltd.
Tentative Ruling: (1) Motion for good faith settlement determination is granted.
(2) Demurrer is sustained as to the 1st COA without leave to amend but sustained as to the fraud-based claims with 20 days leave to amend. Motion to strike is granted as to the claim for attorney fees with 20 days leave to amend and is otherwise denied as moot.
The Court orders BC616037 related to this action.
On 3/24/16, Plaintiff YIHE California Pty Ltd. filed this action against Defendants Long Dragon Realty Group, Inc. and Robert Ho arising out of the purchase of real property located at 1901 Royal Oaks Dr., Bradbury, CA. YIHE asserts causes of action for (1) indemnity, (2) fraud and deceit, (3) negligent misrepresentation, (4) breach of fiduciary duty (fraud), (5) breach of fiduciary duty (negligence), (6) professional negligence, (7) breach of implied covenant of good faith and fair dealing, and (8) willful failure to comply with Civil Code ? 2079.
Factual Allegations of the Complaint ?
On 7/30/14, Robert Rodriguez filed an action (BC553210 (?Underlying Action?)) against YIHE, Long Dragon, Ho, and Shianky Lee aka Kiky Lee arising out of the Rodriguez lease of the subject property which was formerly owned by Lee and sold to YIHE with Long Dragon and Ho acting as Lee and YIHE?s real estate broker and agent. ? 9.
During the escrow for the sale of the property, Rodriguez advised Lee that he had vacated the property and demanded return of the security deposit and compensation for habitability issues which Lee disputed. p. 4:15-18. Lee advised Long Dragon and Ho of this, but instructed them to only disclose to YIHE that Rodriguez had vacated the property, an instruction which Long Dragon and Ho followed. p. 4:18-28. Before escrow closed, Rodriguez informed Long Dragon and Ho that he was still in possession of the property and that he was withholding rent until repairs were made. Long Dragon and Ho did not inform YIHE of this information. p. 4:28-5:4.
After escrow closed on 3/24/14, Long Dragon and Ho, without YIHE?s knowledge or authorization, called the police on 4/8/14 to eject Rodriguez from the property as a trespasser. p. 5:5-14.
As a result of the conduct of Long Dragon, Ho, and Lee, YIHE was forced to prosecute an unlawful detainer action against Rodriguez and defend the Underlying Action. p. 5:14-16.
Prior to the sale of the property, Long Dragon and Ho also concealed the validity and enforceability of an easement granted by Lee to neighbors through an easement deed. Lee, Long Dragon, and Ho misrepresented that the easement deed was void and unenforceable based on a declaration of invalid easement deed recorded by Lee, but a prior agreement between Lee and the neighbors for the easement was concealed. ? 11, Exs. 2-4. Long Dragon and Ho also failed to have Lee provide required transfer disclosure statements and make other legally required disclosures. Id.
Demurrer and Motion to Strike ?
Long Dragon and Ho demur to the 1st COA for indemnity as being barred by their settlement of the Underlying Action (in connection with which Long Dragon and Ho have filed a motion to determine good faith pursuant to CCP ? 877.6), and the 4th COA as failing to allege facts with particularity as to fraud.
1. Motion for Determination of Good Faith Settlement
Preliminarily, the Underlying Action has been dismissed with prejudice. Herzog Decl. ? 8, Ex. G. Therefore, the motion for determination of good faith settlement is properly presented to this Court because such a determination may be made in the tort action in which the settlement was reached or in a subsequently filed action. See, e.g., Bob Parrett Constr., Inc. v. Superior Court (2006) 140 Cal.App.4th 1180, 1187. YIHE?s argument that the Court cannot properly determine this motion because of new claims asserted in this action fails to acknowledge that this motion (and the demurrer) is directed only to the indemnity claim.
Under CCP ? 877.6, a good faith settlement discharges the settling defendant from liability for contribution or indemnity to any other joint tortfeasor. Guidelines for determining a good faith settlement include: (1) assessing whether the settlement reflects the rights and liabilities of the parties; (2) the amount paid; (3) the allocation among plaintiffs; (4) recognizing that the amount will normally be less than the defendant would pay upon losing at trial; (5) defendants? insurance policy limits and financial condition; and (6) existence of collusion, fraud or tortious conduct aimed at injuring the interests of other defendants. Tech-Bilt, Inc. v. Woodward-Clyde & Assoc. (1985) 38 Cal.3d 488, 499. The burden is on the party contesting the settlement to prove lack of good faith. See, e.g., Mediplex of Cal., Inc. v. Superior Court (1995) 34 Cal.App.4th 748, 753.
Reviewing Long Dragon and Ho?s motion, the Court concludes that they have carried their burden to set forth the value of the consideration paid, have provided an evidentiary basis for that valuation, and have demonstrated that the valuation was reached in a sufficiently adversarial manner to justify the presumption of reasonableness. Franklin Mint Co. v. Superior Court (2005) 130 Cal.App.4th 1550, 1558. Notably, YIHE had filed a cross-complaint against Long Dragon and Ho which included indemnity and fraud claims (Herzog Decl. ? 3, Ex. B) and Long Dragon and Ho accepted Rodriguez? CCP ? 998 offers for a total payment of $4,200 (id. ?? 4, 6, Exs. C, E).
YIHE fails to submit any evidence to prove lack of good faith, showing that the settlement is so far ?out of the ballpark? or grossly disproportionate as to be inconsistent with the equitable goals of CCP ? 877.6. See Long Beach Memorial Medical Center v. Superior Court (2009) 172 Cal.App.4th 865, 873-74; Mediplex of Cal., Inc. v. Superior Court (1995) 34 Cal.App.4th 748, 753. Notably, YIHE alleges that it settled with Rodriguez (Complaint p. 4:11-12), but YIHE has failed to submit any evidence concerning either YIHE?s settlement amount or the proportional liability of YIHE versus Long Dragon and Ho. YIHE argues that Long Dragon and Ho fail to submit any evidence as to their proportionate liability, but declarations from settling parties are not required. All that is required is a ?barebones motion which sets forth the ground of good faith, accompanied by a declaration which sets forth a brief background of the case? (City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261). Long Dragon and Ho have complied with this requirement. They might have been required to submit declarations if the motions were contested by declarations from nonsettlors (id. at 1262), but this is not the case here.
Therefore, the motion for determination of good faith settlement is granted. Pursuant to CCP ? 877.6, Long Dragon and Ho are discharged from liability for YIHE?s indemnity claim. Therefore, the demurrer is sustained as to the 1st COA without leave to amend.
2. Fraud-Based Claims
Long Dragon and Ho argue that YIHE fails to allege facts with particularity as to fraud. See Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 72-73; Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184 (requiring pleading facts which ?show how, when, where, to whom, and by what means the representations were tendered); Tarmann v. State Farm Mutual Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157 (requiring a plaintiff to ?allege the names of the persons making the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.?). After review, the Court believes that sustaining the demurrer to the fraud-based claims is warranted based on the uncertain nature of the fraud claims asserted in the Complaint.
Though YIHE has alleged that Long Dragon and Ho misrepresented the validity and enforceability of the easement deed (Complaint ? 11), YIHE?s fraud claim appears to be solely based on Long Dragon and Ho concealing information (see id. ? 15). Notably, YIHE?s opposition only addresses a fraudulent concealment theory (see generally Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 868) for which fraud specificity requirements do not apply (Alfaro v. Community Housing Improvement System & Planning Ass?n, Inc. (2009) 171 Cal.App.4th 1356, 1384). If the 2nd COA for fraud and deceit is only based on a concealment theory, this should be made clear. If however YIHE also asserts a misrepresentation claim as evidenced by the 3rd COA for negligent misrepresentation, no facts are alleged with particularity as to the misrepresentations. See also Cadlo v. Owens-Illinois, Inc. (2004) 125 Cal.App.4th 513, 519 (negligent misrepresentation). Therefore, the demurrer is sustained as to the fraud-based claims with leave to amend.
3. Motion to Strike
In light of the Court?s ruling on the demurrer to the fraud-based claims, the motion to strike directed at the claim for punitive damages is moot.
As to attorney fees, Long Dragon and Ho argue that YIHE fails to allege a basis for recovery of attorney fees. See CCP ? 1021; Agricultural Ins. Co. v. Superior Court (1999) 70 Cal.App.4th 385, 404. The Court agrees. YIHE argues that the tort of another doctrine applies, but this doctrine applies where a plaintiff must bring an action or defend an action against a third party because of the defendant?s tort. Prentice v. North American Title Guaranty Corp. (1963) 59 Cal.2d 618, 620. This fails to distinguish between recoverable attorney fees incurred in another action (i.e., the Underlying Action) and the attorney fees in this action. Additionally, in light of the Court?s ruling on the motion for determination of good faith settlement, YIHE cannot seek the attorney fees incurred in the Underlying Action. See generally John Hancock Mutual Life Ins. Co. v. Setser (1996) 42 Cal.App.4th 1524, 1533-34. Therefore, the motion to strike is granted as to the claim for attorney fees with leave to amend.
Notice of Related Case ?
On 6/9/16, Long Dragon and Ho filed a notice of related case identifying Case No. BC616037, an action filed by YIHE against Lee which is assigned to Dept. 20. After review, the Court finds that BC616037 is related to this action because the two actions arise from the same or substantially identical transactions, incidents, or events requiring the determination of substantially identical questions of law or fact. CRC 3.300(a)(2). Therefore, the Court orders BC616037 related to this action. The Court expects at the motions hearing to order the transfer of BC616037 to Dept. 58.