BROST ET AL. vs. MARTINEZ

(a) One defrauded in the purchase, sale or exchange of property is entitled to recover the difference between the actual value of that with which the defrauded person parted and the actual value of that which he received, together with any additional damage arising from the particular transaction, including any of the following:

(1) Amounts actually and reasonably expended in reliance upon the fraud.

(2) An amount which would compensate the defrauded party for loss of use and enjoyment of the property to the extent that any such loss was proximately caused by the fraud.

(3) Where the defrauded party has been induced by reason of the fraud to sell or otherwise part with the property in question, an amount which will compensate him for profits or other gains which might reasonably have been earned by use of the property had he retained it.

(4) Where the defrauded party has been induced by reason of the fraud to purchase or otherwise acquire the property in question, an amount which will compensate him for any loss of profits or other gains which were reasonably anticipated and would have been earned by him from the use or sale of the property had it possessed the characteristics fraudulently attributed to it by the party committing the fraud, provided that lost profits from the use or sale of the property shall be recoverable only if and only to the extent that all of the following apply:

(i) The defrauded party acquired the property for the purpose of using or reselling it for a profit.

(ii) The defrauded party reasonably relied on the fraud in entering into the transaction and in anticipating profits from the subsequent use or sale of the property.

(iii) Any loss of profits for which damages are sought under this paragraph have been proximately caused by the fraud and the defrauded party's reliance on it.

(b) Nothing in this section shall do either of the following:

(1) Permit the defrauded person to recover any amount measured by the difference between the value of property as represented and the actual value thereof.

(2) Deny to any person having a cause of action for fraud or deceit any legal or equitable remedies to which such person may be entitled.

April 17, 2026 Dept. 9 Tentative Rulings

The Court disagrees with Defendants’ arguments and denies the motion. Substantively, the motion is in the nature of a reverse demurrer, requesting the Court to re-write the SAC and consolidate thirteen causes of action into a single fraud allegation in accordance with Defendants’ theory of the case. Defendants ask the Court to adopt their view that the SAC should have been drafted as a single cause of action for fraud involving a piece of real estate, limited to the scope of single statute. The way the SAC is actually drafted by the Plaintiff is a mix of contract, tort and statutory causes of action that involve a variety of potentially applicable measures of damages based on alleged activities that include issues of contractual performance, misrepresentations, threats, and misappropriation of funds between multiple actors.

The damages for contract are generally governed by the principle of economic loss, which limits damages to actual economic losses, but are not limited to the calculation of value of a particular piece of real estate. An exception to the economic loss rule in the context of a contractual cause of action is the fraudulent inducement to enter a contract, which permits recovery of certain tort damages. Robinson Helicopter Co. v. Dana Corp., (2004) 34 Cal. 4th 979, 990. Fraudulent inducement to enter a contract is one of Plaintiffs’ causes of action.

Plaintiffs also list Business and Professions Code § 17200, et seq. among their causes of action. These statutes expressly provide that “the remedies or penalties provided by this chapter are cumulative to each other and to the remedies or penalties available under all other laws of this state.” Business & Professions Code § 17205. This includes the Court’s discretion to adopt specific or preventive relief “to enforce a penalty, forfeiture, or penal law” or to appoint a receiver “as may be necessary to prevent the use or employment by any person of any practice which constitutes unfair competition, as defined in this chapter, or as may be necessary to restore to any person in interest any money or property, real or personal, which may have been acquired by means of such unfair competition.” Business & Professions Code §§ 17202-17203.

Treble damages, costs and attorneys’ fees are authorized by Penal Code § 496(c) for cases involving theft of property and/or extortion, which is defined by Penal Code § 519 to include a threat “[t]o do an unlawful injury to the person or property of the individual threatened.” The SAC includes several allegations of extortion and threats that, if proven, could bring the matter within the scope of Section 496.

Punitive damages require a plaintiff to plead “ultimate facts showing an entitlement to such relief. . . . In passing on the correctness of a ruling on a motion to strike, judges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth. (Courtesy Ambulance Service v. Superior Court (1992) 8 Cal.App.4th 1504, 1519, 11 Cal.Rptr.2d 161; Dawes v. Superior Court (1980) 111 Cal.App.3d 82, 91, 168 Cal.Rptr. 319; see California Judges Benchbook, Civil Proceedings Before Trial (1995) § 12.94, p. 611.)” Clauson v. Superior Ct., (1998) 67 Cal. App. 4th 1253, 1255.

April 17, 2026 Dept. 9 Tentative Rulings

In order to state a prima facie claim for punitive damages, a complaint must set forth the elements as stated in the general punitive damage statute, Civil Code section 3294. (College Hospital, Inc. v. Superior Court (1994) 8 Cal.4th 704, 721, 34 Cal.Rptr.2d 898, 882 P.2d 894.) These statutory elements include allegations that the defendant has been guilty of oppression, fraud or malice. (Civ.Code, § 3294, subd. (a).) “ ‘Malice’ ” is defined in the statute as conduct “intended by the defendant to cause injury to plaintiff, or despicable conduct that is carried on by the defendant with a willful and conscious disregard for the rights or safety of others.” (Civ.Code, § 3294, subd. (c)(1); College Hospital, supra, 8 Cal.4th at p. 725, 34 Cal.Rptr.2d 898, 882 P.2d 894.) “ ‘Oppression’ means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights.” (Civ.Code, § 3294 subd. (c)(2).) “ ‘Fraud’ ” is “an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.” (Civ.Code, § 3294, subd. (c)(3).)

Turman v. Turning Point of Cent. California, Inc., (2010) 191 Cal. App. 4th 53, 63.

The Court finds that the allegations in the SAC, if true, could meet the requirements of a showing to support punitive damages.

This is not a case that turns only on the difference between the value of a piece of real estate as received as compared to how it was represented, which is the scenario that Civil Code § 3343 is designed to address, in order to prevent a plaintiff from realizing a windfall.

If Defendants’ argument is that the factual allegations of the SAC fail to include sufficient basis to support the causes of action listed in the SAC they can demur to those causes of action. However, they cannot completely eliminate Plaintiffs’ causes of action by functionally eliminating all allegations other than the single overlapping fact of misrepresentations involving a piece of real estate.

[Code of Civil Procedure § 436] does not authorize attacks on entire causes of action, let alone entire pleadings. (Quiroz v. Seventh Ave. Center (2006) 140 Cal.App.4th 1256, 1281, 45 Cal.Rptr.3d 222.) Its purpose is to authorize the excision of superfluous or abusive allegations. “[M]atter that is essential to a cause of action should not be struck and it is error to do so.” (Ibid.) . . . The gist of these objections is that the complaint failed to state facts sufficient to constitute a cause of action. This is ground not for a motion to strike, but for a general demurrer.

April 17, 2026 Dept. 9 Tentative Rulings

Ferraro v. Camarlinghi, 161 Cal. App. 4th 509, 528-529 (2008) TENTATIVE RULING #7: DEFENDANTS’ MOTION TO STRIKE IS DENIED. NO HEARING ON THIS MATTER WILL BE HELD UNLESS A REQUEST FOR ORAL ARGUMENT IS TRANSMITTED ELECTRONICALLY THROUGH THE COURT’S WEBSITE OR BY TELEPHONE TO THE COURT AT (530) 621-6551 BY 4:00 P.M. ON THE DAY THE TENTATIVE RULING IS ISSUED. CAL. RULE CT. 3.1308; LOCAL RULE 8.05.07; SEE ALSO LEWIS V. SUPERIOR COURT, 19 CAL.4TH 1232, 1247 (1999). NOTICE TO ALL PARTIES OF A REQUEST FOR ORAL ARGUMENT AND THE GROUNDS UPON WHICH ARGUMENT IS BEING REQUESTED MUST BE MADE BY TELEPHONE OR IN PERSON BY 4:00 P.M.

ON THE DAY THE TENTATIVE RULING IS ISSUED. CAL. RULE CT. 3.1308; EL DORADO COUNTY LOCAL RULE 8.05.07. PROOF OF SERVICE OF SAID NOTICE MUST BE FILED PRIOR TO OR AT THE HEARING. LONG CAUSE HEARINGS MUST BE REQUESTED BY 4:00 P.M. ON THE DAY THE TENTATIVE RULING IS ISSUED AND THE PARTIES ARE TO PROVIDE THE COURT WITH THREE MUTUALLY AGREEABLE DATES ON FRIDAY AFTERNOONS AT 2:30 P.M. LONG CAUSE ORAL ARGUMENT REQUESTS WILL BE SET FOR HEARING ON ONE OF THE THREE MUTUALLY AGREEABLE DATES ON FRIDAY AFTERNOONS AT 2:30 P.M.

THE COURT WILL ADVISE THE PARTIES OF THE LONG CAUSE HEARING DATE AND TIME BY 5:00 P.M. ON THE DAY THE TENTATIVE RULING IS ISSUED. PARTIES MAY PERSONALLY APPEAR AT THE HEARING.

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