Guiterrez vs. Gapzac Construction, Inc a California Corporation

Thus, the Demurrer to the fifth cause of action is OVERRULED.

Defendant to file an answer to the Complaint within 15 days.

Moving party to give notice.

102 Guiterrez vs. Demurrer to Complaint Gapzac Construction, Inc Defendant ADU Resource Center (“Defendant”) demurs to the a California fourth cause of action for fraud (intentional misrepresentation) Corporation and fifth cause of action for fraud (concealment) as alleged in 26-01555393 Plaintiff Linda Valles Gutierrez’s Complaint.

Plaintiff Linda Valles Gutierrez, proceeding in pro per (“Plaintiff”) opposed the demurrer.

A complaint, with certain exceptions, needs only contain a ‘statement of the facts constituting the cause of action, in ordinary and concise language’ (Code Civ. Proc., § 425.10, subd. (a)(1)) and will be upheld ‘ “so long as [it] gives notice of the issues sufficient to enable preparation of a defense.” ’ [Citation.]” (Morris v. JPMorgan Chase Bank, N.A. (2022) 78 Cal.App.5th 279, 292.) “[T]o withstand a demurrer, a complaint must allege ultimate facts, not evidentiary facts or conclusions of law.’ [Citation.]” (Morris v.

JPMorgan Chase Bank, N.A. (2022) 78 Cal.App.5th 279, 292.) “However, ‘ “[t]he fact that a party has alleged more than is required to justify his right does not obligate him to prove more than is essential, and the unnecessary allegations will be treated as surplusage unless the opposing party would be prejudiced.”” (Ibid.) “No error or defect in a pleading is to be regarded unless it affects substantial rights.” (Harris v. City of Santa Monica (2013) 56 Cal.4th 203, 240.) “The primary function of a pleading is to give the other party notice so that it may prepare its case [Citation], and a defect in a pleading that otherwise properly notifies a party cannot be said to affect substantial rights.” (Ibid.)

A. Fourth Cause of Action for Fraud (Intentional Misrepresentation) “To establish a claim for fraudulent misrepresentation, the plaintiff must prove: ‘(1) the defendant represented to the plaintiff that an important fact was true; (2) that representation was false; (3) the defendant knew that the representation was false when the defendant made it, or the defendant made the representation recklessly and without regard for its truth; (4) the defendant intended that the plaintiff rely on the representation; (5) the plaintiff reasonably relied on the representation; (6) the plaintiff was harmed; and (7) the plaintiff’s reliance on the defendant’s representation was a substantial factor in causing that harm to the plaintiff.” (Graham v.

Bank of America, N.A. (2014) 226 Cal.App.4th 594, 605–606; see also Lazar v. Superior Court (1996) 12 Cal.4th 631, 638 [“The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.”].) Fraud causes of action must be pled with specificity. “This particularity requirement necessitates pleading facts which ‘show how, when, where, to whom and by what means the representations were tendered.”’ (Stansfield v.

Starkey (1990) 220 Cal.App.3d 59, 73.)

Here, Plaintiff alleges that Defendant made the following representations that were false: • “On February 26, 2025, ARC represented in writing, via Danny Johnson (Director of Sales and Customer Care), prior to an in-person meeting, that Rodriguez was ‘the most experienced builder we have and brings wisdom from decades of construction and project management.’” (Complaint, ¶ 28; see also Complaint, ¶ 31.) “ARC represented that Rodriguez was ‘the most experienced builder we have and brings wisdom from decades of construction and project management.’” (Complaint, ¶¶ 203 and 206.)

• “ARC represented that the ADU could be constructive within a specific projected budget range.” (Complaint, ¶¶ 32, 33, 204, and 206.)

• “ARC represented it would intervene if problems arose.” (Complaint, ¶¶ 35, 99, 205, and 206.) Plaintiff further alleges that Danny Johnson (Director of Sales and Customer Care), Shaun Surabi (Director of Operations), and an individual named Jade acted on behalf of and made such representation on behalf of Defendants, which occurred in writing and in-person. (See Complaint, ¶¶ 28-39 and Exhibits to Complaint.)

Plaintiff alleges that the above representations were false and “[a]t the time they were made, Defendants Gapzac, Rodriguez, and ARC knew the representations were false or made them recklessly without regard for truth” as well as “with intent to deceive and with conscious disregard of Plaintiff’s rights.” (Complaint, ¶¶ 206, 207, and 214.)

Plaintiff further alleges that Defendant “intended that Plaintiff rely on these representations” and Plaintiff reasonably relied on these representations. (Complaint, ¶¶ 135, 208, and 209.) As a result, Plaintiff suffered financial loss, property damage, lost rental income, and emotional distress. (Complaint, ¶ 213.) Plaintiff also experience “recurring tension headaches that significantly impair Plaintiffs ability to perform daily activities.” (Complaint, ¶ 133.)

Given the above, the Court finds that Plaintiff’s allegations are sufficiently specific to survive the demurrer. The Complaint sufficiently gives Defendant notice of the claims against it so that it may prepare its case. The Demurrer to the fourth cause of action for fraud (intentional misrepresentation) is OVERRULED.

B. Fifth Cause of Action for Fraud (Concealment) Plaintiff’s fifth cause of action is for fraud (concealment). “The required elements for fraudulent concealment are (1) concealment or suppression of a material fact; (2) by a defendant with a duty to disclose the fact; (3) the defendant intended to defraud the plaintiff by intentionally concealing or suppressing the fact; (4) the plaintiff was unaware of the fact and would have acted differently if the concealed or suppressed fact was known; and (5) plaintiff sustained damage as a result of the concealment or suppression of the material fact.” (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 40; see also Lazar v. Superior Court (1996) 12 Cal 4th 631, 638.)

“A duty to disclose a material fact can arise if (1) it is imposed by statute; (2) the defendant is acting as plaintiff's fiduciary or is in some other confidential relationship with plaintiff that imposes a disclosure duty under the circumstances; (3) the material facts are known or accessible only to defendant, and defendant knows those facts are not known or reasonably discoverable by plaintiff (i.e., exclusive knowledge); (4) the defendant makes representations but fails to disclose other facts that materially qualify the facts disclosed or render the disclosure misleading (i.e., partial concealment); or (5) defendant actively conceals discovery of material fact from plaintiff (i.e., active concealment).” (Rattagan v.

Uber Technologies, Inc. (2024) 17 Cal.5th 1, 40.) “Circumstances (3), (4), and (5) presuppose a preexisting relationship between the parties, such as “between seller and buyer, employer and prospective employee, doctor and patient, or parties entering into any kind of contractual agreement.” (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 40.)

“All of these relationships are created by transactions between parties from which a duty to disclose facts material to the transaction arises under certain circumstances.” (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 41 [citing LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 337].) “Such a transaction must necessarily arise from direct dealings between the plaintiff and the defendant; it cannot arise between the defendant and the public at large.” (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 41 [citing Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 312].) Fraud causes of action must be pled with specificity. “...This particularity requirement necessitates pleading facts which ‘show how, when, where, to whom and by what means the representations were tendered.”’ (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.)

With respect to fraudulent concealment claims, however, a plaintiff is not required to allege with the usual detail required in connection with fraud claims based on affirmative representations. In Vega v. Jones, Day, Reavis & Pogue (2004) 121 Cal.App.4th 282, the Court of Appeal found that the trial court had improperly sustained a demurrer to a concealment cause of action on the ground the cause of action on the ground plaintiff had failed to allege the cause of action “with the requisite degree of specificity.” (Id., 296.) The court held that “[t]he pertinent question in a concealment case is not who said what to whom.” (Ibid.) Rather the question is whether the defendant intentionally concealed something from plaintiff “so that they would proceed with the transaction.” (Ibid.)

Additionally, “[e]ven under the strict rules of common law pleading, one of the canons was that less particularity is required when the facts lie more in the knowledge of the opposite party.” (See Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 217, superseded by statute on other grounds in Branick v. Downey Savings & Loan Assn. (2006) 39 Cal.4th 235.) Less specificity is required for fraud claims when it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy. (Alfaro v.

Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356.) In support of the fifth cause of action for fraud, Plaintiff alleges that “ARC concealed the extent to which its cost projections were materially inaccurate” and that “it would not intervene despite prior assurances.” (Complaint, ¶¶ 222 and 223.) As discussed above, Danny Johnson (Director of Sales and Customer Care), Shaun Surabi (Director of Operations), and an individual named Jade acted on behalf of and concealed information on behalf of Defendant, which occurred in writing and in-person. (See Complaint, ¶¶ 28-39 and Exhibits to Complaint.) “ARC had a duty to disclose material facts because it undertook to advise Plaintiff and referred the contractor.” (Complaint, ¶ 226.) “Plaintiff did not know the concealed facts and could not have reasonably have discovered them.” (Complaint, ¶ 227.”

Moreover, “Defendants intentionally concealed these facts to induce Plaintiff to continue making payments and to delay legal action.” (Complaint, ¶ 228.) “Plaintiff reasonably relied on the absence of disclosure” and “would not have continued funding the projects” has she known the truth of the matters concealed. (Complaint, ¶¶ 229 and 230.) As a result, Plaintiff suffered financial loss, property damage, lost rental income, and emotional distress. (Complaint, ¶ 213.) Plaintiff also experience “recurring tension headaches that significantly impair Plaintiffs ability to perform daily activities.” (Complaint, ¶ 133.)

Defendant argues that Plaintiff should provide more detailed regarding the matters concealed but as caselaw establishes, less specificity is required for fraudulent concealment claims. Again, the Complaint sufficiently gives Defendant notice of the claims against it so that it may prepare its case. Given the above, the Demurrer is OVERRULED as to the fifth cause of action is for fraud (concealment).

Plaintiff to give notice.

Defendant shall file a responsive pleading within 20 days after Plaintiff serve notice of this ruling