Sheddan v. Willhoit

C. Entire Complaint

Defendants argue the entire complaint fails because they were not parties to the lease and cannot be liable for its alleged breach. This

argument fails because Plaintiff alleges more than breach of the lease terms and/or breach of landlord duties. Plaintiff also alleges breach of fiduciary duty, professional negligence, fraud, conversion, interference with contract, negligence, etc. arising out of Defendants’ role as the real brokers who represented both parties in the lease transaction and property managers throughout the lease term. (Compl. pp. 2-3, 13-14, 24.) Though some claims are not appropriately alleged against them, a general demurrer to the entire complaint is improper.

D. Constructive fraud (3rd COA - Willhoit, W Collection)

The elements of the cause of action for constructive fraud are: (1) fiduciary relationship; (2) nondisclosure (breach of fiduciary duty); (3) intent to deceive, and (4) reliance and resulting injury (causation). (Younan v. Equifax Inc. (1980) 111 Cal.App.3d 498, 517, fn. 14.)

Plaintiff alleges Willhoit and W Collection owed fiduciary duties to Plaintiff to disclose material facts as the real estate brokers who represented both Plaintiff and the Landlord in the lease transaction. (Compl.) Plaintiff alleges Willhoit and W Collection concealed facts regarding leaks, mold and asbestos and her self-dealing in financial transactions, deceiving Plaintiff and causing reliance to her detriment. (Compl. pp. 2:21-22, 13:23-27, 20:17-21.) These facts are sufficient.

Defendants argue “Ms. Willhoit reasonably relied on the landlord’s representations that the repairs and remediation were completed,” i.e., “Ms. Willhoit [] reported the suspected issues to the property owner, who retained licensed contractors and paid for the repairs and remediation. She had no reason to believe that any representations made regarding repairs and or remediation were false.” (Demurrer, p. 5.) These facts are outside the four corners of the pleading and directly contradict Plaintiff’s allegations in the Complaint. For example, Plaintiff alleges: “All testing and repairs performed in 2021-2022 were undertaken without the property owner’s consent,” and the defendants “perform[ed] unpermitted remediation . . ..” (Compl. p. 6.) These facts must be taken as true for purposes of the demurrer. OVERRULE.

E. Intentional interference with contract (8th COA - Willhoit)

Preliminarily, as noted above, Defendants mislabel this claim as the 5th cause of action. (Demurrer, pp. 2, 6.) However, the intentional interference claims is alleged as the 8th cause of action in the Complaint.

The elements of this cause of action are: (a) a valid contract between plaintiff and a third party; (b) defendant’s knowledge of this contract; (c) defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (d) actual breach or disruption of the contractual relationship; and (e) resulting damage. (Witkin, Summary 10th (2005) Torts, § 731, p. 1058; Pacific Gas & Elec. Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126; Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 55.)

Here, Plaintiff sufficiently alleges these elements. Plaintiff alleges (a) she and the Landlord were parties to a written lease agreement requiring refund of security deposit upon Plaintiff vacating the premises and a lease addendum requiring Landlord to pay Plaintiff $5,000 as reimbursement for improvements on the property; (b) Willhoit’s knowledge of the lease and addendum as broker, property manager and dual agent; (c) intentional acts to induce breach of the lease and the addendum “by instructing and persuading the Landlord not to issue the $5,000 payment and not to refund Plaintiff’s security deposit” unless Plaintiff signed a release; (d) Landlord breached the lease and addendum; and (e) Plaintiff suffered damages as a result. (Compl. p. 15-16.) These facts are sufficient.

Defendants argue Plaintiff fails to allege “intentional, independently wrongful conduct by Ms. Willhoit,” but interference with an existing agreement need not be illegal or independently wrongful. (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 55.) This is distinguished from a claim for interference with prospective economic relations, in which the plaintiff must show the means were “wrongful” by some measure other than the interference itself. (Ibid.) The case cited by Defendants - Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th. 1134 – acknowledges this distinction as well. (Id. at 1158.) OVERRULE.

F. Violation of CLRA (11th COA - Willhoit, 10th COA - W Collection, 4th COA - Baron)

The CLRA prohibits a variety of specified unfair or deceptive acts “in a transaction intended to result or which results in the sale or lease of goods or services to any consumer.” The purpose of the CLRA is to protect consumers against these acts and “to provide efficient and economical procedures to secure such protection.” (Civil Code § 1760; Wang v. Massey Chevrolet (2002) 97 Cal.App.4th 856, 869.) A CLRA claim is considered to sound in fraud and must therefore be pleaded with particularity, as is true for fraud cases generally. (Chamberlan v. Ford Motor Co. (N.D.Cal. 2005) 369 F.Supp.2d 1138, 1144.)

Plaintiff alleges Defendants’ broker and management services are “services” under the CLRA, and Defendants “misrepresented the quality, safety and condition of the leased property and concealed known hazards” in violation of Civil Code §§ 1770(a)(5),(7) and (14). (Compl. at pp. 17, 19 and 26.)

Defendants argue the CLRA does not apply to residential leasing transactions or to real estate brokerages. “Services” is defined by the CLRA as “work, labor, and services for other than a commercial or business use, including services furnished in connection with the sale or repair of goods.” (Civ. Code § 1761, subd. (b).) Under this definition, broker and management services relating to residential leasing transactions might be covered under the CLRA – although not entirely clear. Defendants cite to Fairbanks v. Superior Court (2009) 46 Cal.4th 1457, but that case held that life insurance is neither a

“good” nor a “service” within the meaning of the CLRA. (Id. at 60-61.) Defendants also cite to McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457 but that case held that the CLRA does not apply to mortgage loan transactions. (Id. at 1488.)

On the other hand, Plaintiff failed to oppose the motion, thereby conceding the issue. (Herzberg v. County of Plumas (2005) 133 Cal. App. 4th 1, 20; DuPont Merck Pharmaceutical Co. v. Sup. Ct. (2000) 78 Cal.App.4th 562, 566.) SUSTAIN.

G. Breach of implied warranty of habitability (13th COA – Willhoit, 12th COA – W Collection)

A warranty of habitability is implied in all residential rental agreements. (Green v. Sup. Ct.(Sumski) (1974) 10 Cal.3d 616, 629.) The implied warranty imposes upon the landlord the obligation to maintain leased dwellings in habitable condition throughout the term of the lease. (Peterson v. Sup. Ct. (Banque Paribas) (1995) 10 Cal.4th 1185, 1204.) This implied warranty is a corollary to the landlord’s statutory obligation to put the premises “into a condition fit for such [residential] occupation, and repair all subsequent dilapidations thereof, which render it untenantable.” (Civ. Code § 1941.)

Plaintiff alleges Defendants acted as the property manager and broker, and thus had control over the habitability and repair decisions for the property. (Compl. at pp. 17-18, 23.) As pointed out by Defendants, however, the duty is imposed on the landlord, not the property manager. Plaintiff failed to oppose the motion, thereby conceding the issue. (Herzberg v. County of Plumas, supra, 133 Cal. App. 4th at 20.) SUSTAIN.

H. Public and private nuisance (17th COA – Willhoit, 16th COA – W Collection, 7th COA – Baron)

The elements of an action for private nuisance are: (1) interference with use and enjoyment of property; (2) that is substantial, i.e., that causes the plaintiff to suffer “substantial actual damage”; and (3) that is unreasonable. (San Diego Gas & Electric Co. v. Super. Ct. (1996) 13 Cal.4th 893, 938.) “[A] plaintiff bringing a cause of action for private nuisance must show harm to a property interest.” (Orange County Water Dist. v. Sabic Innovative Plastics US, LLC (2017) 14 Cal.App.5th 343, 402.)

“A public nuisance is one which affects at the same time an entire community or neighborhood, or any considerable number of persons, although the extent of the annoyance or damage inflicted upon individuals may be unequal.” (Civ. Code, § 3480.) A private plaintiff may bring a cause of action for public nuisance if the nuisance is “specially injurious” to the plaintiff. (Civ. Code, § 3493.)

Here, Plaintiff argues Defendant maintained and failed to abate toxic mold and asbestos contamination, interfering with Plaintiff’s comfortable enjoyment of life and property and endangered health and

safety. (Compl. at pp. 19, 24, 27.) These facts might be sufficient to allege private nuisance, but not public nuisance. Plaintiff alleges no facts establishing any interference with a public right or any injury affecting the public at large. SUSTAIN to the extent Plaintiff alleges public nuisance.

II. Motion to Strike

The court may, upon a motion made pursuant to Code of Civil Procedure section 435:

(a) Strike out any irrelevant, false, or improper matter inserted in any pleading.

(b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.

(Code of Civ. Proc. § 436.) Motions to strike can be used to attack the entire pleading, or any part thereof. (Code of Civil Procedure section 435; Warren v. Atchison, T. & S.F. Ry. Co. (1971) 19 Cal.App.3d 24, 40.) As with demurrers, the grounds for a motion to strike must appear on the face of the pleading under attack, or from matter which the court may judicially notice. (Code of Civ. Proc. § 436, subd. (a).) “[T]he court treats as true the material facts alleged in the complaint, as well as any facts which may be implied or inferred from those expressly alleged.” (Washington Int’l Ins. Co. v. Superior Court (1998) 62 Cal. App. 4th 981, 984, fn. 2.)

A motion to strike is the proper vehicle to attack a claim for punitive damages. (Code of Civ. Proc. §§ 435-436; Truman v. Turning Point of Central Calif., Inc. (2010) 191 Cal.App.4th 53, 63.) A plaintiff may recover exemplary or punitive damages where it is proven that “the defendant has been guilty of oppression, fraud or malice.” (Civ. Code § 3294, subd. (a).)

Defendants move to strike punitive damages. However, fraud and fraudulent concealment are alleged against each of the defendants. (Compl. at pp. 14, 20-21, 25, 28-29.) A properly pleaded fraud claim will itself support recovery of punitive damages. No allegations of “malice” or intent to injure plaintiff are required, because fraud is an alternative basis for recovery. (Stevens v. Sup. Ct. (St. Francis Med. Ctr.) (1986) 180 Cal.App.3d 605, 610.) Here, Defendants do not challenge the fraud causes of action in the demurrer or in the motion to strike, thereby conceding they are properly alleged. DENY.

Counsel for Defendants shall give notice of this ruling.

8. Millen v. General Motors LLC 26-1554736 Before the Court is Demurrer and Motion to Strike filed by General Motors, LLC (GM) as to the Complaint filed by plaintiff, Jared Millen. The Demurrer is SUSTAINED, with 14 days leave to amend and the Motion to Strike is DENIED.