Tentative Rulings
Case Number: *******7362 Hearing Date: October 09, 2020 Dept: 51
Background:
Plaintiff Mia Quittman (“Plaintiff” or “Mia”) brings this action against Defendants Zack Quittman (“Zack”) and Jade Mills (“Mills”) arising out of a series of real estate transactions. Plaintiff alleges that, while her money had been invested for the purchase, Defendants defrauded her as to their true intentions with regard to ownership interests and rights in the real property located at Paseo Canyon Drive in Malibu (“Paseo Canyon Property”).
On February 20, 2020, Plaintiff filed a Complaint, and on May 11, 2020, the operative First Amended Complaint (“FAC”) for the following causes of action:
(1) Intentional Misrepresentation;
(2) Negligent Misrepresentation;
(3) Breach of Fiduciary Duty;
(4) Negligence;
(5) Conversion;
(6) Concealment; and
(7) Civil Conspiracy.
On June 4, 2020, Defendant Mills filed the instant Demurrer as to all causes of action in the FAC.
The Court considered the moving papers, opposition, and reply papers, and rules as follow.
Demurrer Standard:
A demurrer tests the sufficiency of the pleading at issue as a matter of law. City of Chula Vista v. County of San Diego (1994) 23 Cal.App.4th 1713, 1719. A demurrer may be sustained where the complaint fails to state facts sufficient to constitute a cause of action. CCP;430.10(e). The ultimate facts alleged in the complaint must be deemed true, as well as all facts that may be implied or inferred from those expressly alleged. Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403; see also Shields v. County of San Diego (1984) 155 Cal.App.3d 103, 133 (“On demurrer, pleadings are read liberally and allegations contained therein are assumed to be true.”) However, the Court does not assume the truth of allegations expressing conclusions of law or allegations contradicted by the exhibits to the complaint or by matters of which judicial notice may be taken. Vance v. Villa Park Mobilehome Estates (1995) 36 Cal.App.4th 698, 709.
If the demurrer is sustained, plaintiff “has the burden of proving the possibility of cure by amendment.” Czajkowski v. Haskell & White, LLP (2012) 208 Cal.App.4th 166, 173 (citing Grinzi v. San Diego Hospice Corp. (2004) 120 Cal.App.4th 72, 78-79.) Leave to amend must be allowed where there is a reasonable possibility of successfully stating a cause of action. Schulz v. Neovi Data Corp. (2007) 152 Cal.App.4th 86, 92.
Demurrer Analysis:
Statute of Limitations
“A general demurrer based on the statute of limitations is only permissible where the dates alleged in the complaint show that the action is barred by the statute of limitations. See ;Saliter ;v. Pierce Brothers Mortuaries ;(1978) 81 Cal.App.3d 292, 300. The running of the statute must appear ‘clearly and affirmatively’ from the dates alleged. It is not sufficient that the complaint might be barred.Marshall v. Gibson, Dunn & Crutcher ;(1995) 37 Cal.App.4th 1397, 1403. If the dates establishing the running of the statute of limitations do not clearly appear in the complaint, there is no ground for general demurrer.“The proper remedy ‘is to ascertain the factual basis of the contention through discovery and, if necessary, file a motion for summary judgment....’United Western Medical Centers v. Superior Court ;(1996) 42 Cal.App.4th 500, 505.”Roman v. County of Los Angeles ;(2000) 85 Cal.App.4th 316, 324-325.
Under California’s “discovery rule,” this statute of limitations begins to run when the plaintiff discovers or has reason to discover facts constituting the relevant cause or causes of action.Norgart ;v. Upjohn Company ;(1999) 21 Cal.4th 383; see also ;Cochran v. Cochran ;(1997) 56 Cal.App.4th 1115, 1120. “The discovery rule only delays accrual until the plaintiff has, or should have, inquiry notice of the cause of action.” ;Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal. 4th 797,807. AccordBernson ;v. Browning-Ferris Indus. (1994) 7 Cal. 4th 926, 931 (“[T]he accrual date may be ‘delayed ;until the plaintiff is aware of her injury and its negligentcause.’”).
The delayed discoveryapplies to toll accrual where plaintiffs have reason to suspect that a type of wrongdoing injured them, and not just where they suspect facts supporting every element of aparticular causeof action. ; ;Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807. ; ;Accord ;Unruh-Haxton ;v. Regents of Univ. of Cal. ;(2008) 162 Cal.App.4th 343, 359.A person ;personally andactually ;awareof facts that would make reasonably prudent people suspicious has a duty to investigate and is charged with knowledge of matters that would have been revealed, but not a person having only constructive knowledge in light of available information that should have been known. ;Unruh-Haxton, supra, 162 Cal.App.4th at 359-64.
;“ ‘When a plaintiff reasonably should have discovered facts for purposes of the accrual of a case of action or application of the ;delayed discovery ;rule is generally a question of fact, properly decided as a matter of law only if the evidence (or, … the allegations in the complaint and facts properly subject to judicial notice) can support only one reasonable conclusion.’ ” ; ;Alexander v. Exxon Mobil ;(2013) ;219 Cal.App.4th 1236, 1252 ;(court reversed as to sustaining a demurrer based upon determining the date of reasonable discovery as a matter of law). ;
Mills argues that all causes of action are barred by applicable statute of limitations because all of the alleged actions and damages occurred in 2013 when Plaintiff purportedly lost her ownership interest in the subject property. She asserts that Plaintiff failed to file this action within the applicable three-year statute of limitations because she untimely filed this action in February 2020.
In response, Plaintiff contends that delayed discovery rule applies because it was not until November 2018 that Plaintiff was first told that she did not own any interest in the Paseo Canyon Property. FAC, ¶¶ 40-42. Plaintiff contends that the FAC sufficiently alleges she was fraudulently made to believe up until that point in time that she had an ownership interest in the property.
The Court agrees that the delayed discovery doctrine applies here. While Defendant attempts to argue facts regarding whether Plaintiff knew that she was not the owner of the property by signing escrow modifications, such issue is generally a question of fact not suitable for a demurrer. See Alexander, supra, 219 Cal.App.4th at 1252. Plaintiff sufficiently alleges that she was defrauded until Mills allegedly misleading emails to her father regarding the ownership of the property in 2018. FAC, ¶ 41. Plaintiff also alleges that she was never told that Zach had given a cashier’s check for $475,000 from their joint checking account to Mills. FAC, ¶¶ 36, 40. For purposes of application of the delayed discovery rule, Plaintiff’s causes of action did not accrue until she allegedly found out about the fraudulent nature of escrow modifications and other financial transactions. The factual basis of the contention regarding whether Plaintiff reasonably should have discovered facts about her injury will be ascertained through discovery, not in the pleading stage. See Roman, supra, 85 Cal.App.4th at 325.
Accordingly, Plaintiff’s causes of action are not time-barred, and the demurrer based on statute of limitations is OVERRULED.
First and Second COA: Intentional and Negligent Misrepresentation
The elements of a cause of action for fraud or intentional misrepresentation are (1) a knowingly false representation by the defendant; (2) an intent to deceive or induce reliance; (3) justi ;able reliance by the plaintiff; and (4) resulting damages.” Service by Medallion, Inc. v. Clorox Co. (1996) 44 Cal.App.4th 1807, 1816. Negligent misrepresentation consists of the same elements, however instead of knowledge of falsity, a plaintiff must allege that the Defendant lacked a reasonable ground for believing the representation to be true. Goonewardene v. ADP, LLC (2016) 5 Cal.App.5th 154, 175. In California, fraud, including negligent misrepresentation, must be pleaded with specificity. Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184. “The particularity demands that a plaintiff plead facts which show how, when, where, to whom, and by what means the representations were tendered.” Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.
Mills demurs to the intentional and negligent misrepresentation causes of action on the ground that Plaintiff’s reliance on Defendants’ representations could not be justifiable because she knew that she was not the title holder of the Paseo Canyon property when she signed escrow modifications.
Again, the Court finds that Mills improperly challenges Plaintiff’s factual allegations, not their legal sufficiency. See Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 47 (The rules of pleading require only general allegations of ultimate fact). Whether Plaintiff was “justifiable” in relying on Defendants’ representation that Paseo Canyon Property would be community property and signing escrow modifications and following lease was “solely for tax purposes” is a question of fact that needs to be determined through discovery and at trial. In fact, Plaintiff alleges sufficient facts in detail about how Defendants made those misrepresentations to her. FAC, ¶¶ 52-55, 66-67.
Accordingly, the demurrer as to the first and second causes of action is OVERRULED.
Third, Fourth, and Sixth COA: Breach of Fiduciary Duty, Negligence and Concealment
Mills claims that she cannot be liable for these claims because she owed no duty to Plaintiff. She argues that she was the buyer of Paseo Canyon Property, not Plaintiff, and she as a buyer could not have acted as Plaintiff’s real estate agent in connection with the purchase of the property.
The Court finds that Mills raises a factual dispute as to the nature of her role in the transaction. “ ‘Because the function of a demurrer is not to test the truth oraccuracy
Accordingly, the demurrer as to the third, fourth, and sixth causes of action is OVERRULED.
Fifth COA: Conversion
“ ‘ “Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff's ownership or right to possession of the property; (2) the defendant's conversion by a wrongful act or disposition of property rights; and (3) damages....” ’ ” Welco Electronics, Inc. v. Mora (2014) 223 Cal.App.4th 202, 208.
Mills asserts that the alleged funds of $475,000 have already been determined to be a community asset by the family law court and are subject to final adjudication in Plaintiff and Zack’s divorce proceeding. Mills argues that $475,000 therefore has not been converted and Plaintiff could not have been damaged by the fact that it was deposited into Mill’s account.
The Court disagrees. Plaintiff alleges that, while she understood $475,000 to be invested in the Paseo Canyon Property, Mills wrongfully exerted dominion over the money by keeping it in her personal bank account. FAC, ¶¶ 90-92. Plaintiff also alleges that she has been damaged and deprived of her interests in the subject property, including any income from renting it to a tenant or any appreciation in value in the property, as well as any proceeds from the sale. FAC, ¶ 93. Plaintiff’s cause of action was already established by these facts regardless of whether the amount at issue is subject to further court proceedings; the exact deposit amount of $475,000 is not the only damage Plaintiff alleges in the FAC. Further, Jade fails to cite any authority for the notion that Plaintiff cannot allege conversion if the allegedly converted amount was deposited with the court pending further proceedings for distribution.
Accordingly, the demurrer as to the fifth cause of action is OVERRULED.
Seventh COA: Civil Conspiracy
“Conspiracy is not a cause of action, but a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration. By participation in a civil conspiracy, a coconspirator effectively adopts as his or her own the torts of other coconspirators within the ambit of the conspiracy. In thisway, a coconspirator incurs tort liability co-equal with the immediate tortfeasors.”Applied Equipment Corp. v. Litton Saudi Arabia Ltd.(1994) 7 Cal.4th 503, 510-11.
Here, Plaintiff cannot state an independent cause of action for conspiracy; a plaintiff alleging conspiracy must sufficiently plead an underlying predicate tort in order to state such a basis for liability. See Applied, supra, 7 Cal.4th at 510 (“Standing alone, a conspiracy does no harm and engenders no tort liability. It must be activated by the commission of an actual tort.”). “A bare agreement among two or more persons to harm a third person cannot injure the latter unless and until acts are actually performed pursuant to the agreement. Therefore, it is the acts done and not the conspiracy to do them which should be regarded as the essence of the civil action.” Id. at 511. It is unclear from the FAC or Opposition what underlying tort liabilities Plaintiff asserts with this conspiracy claim. This cause of action cannot stand alone unless Plaintiff can sufficiently plead the underlying torts.
Accordingly, the demurrer as to the seventh cause of action is SUSTAINED WITH LEAVE TO AMEND.
Conclusion:
Defendant Mill’s Demurrer is OVERRULED as to the first through sixth causes of action and SUSTAINED WITH LEAVE TO AMEND as to the seventh cause of action.
Plaintiff to amend within 20 days.
Plaintiff to give notice.
Dated:
__________________________________________
Dennis Landin
Superior Court Judge
