Kelly Hosey v. Jay Bond, et al.

Kelly Hosey v. Jay Bond, et al., 25CV-0754

Hearing: Demurrer

Date: May 28, 2026

Kelley Hosey filed this action on December 2, 2025, arising out of her purchase of residential real property in Los Osos from defendants Habib Tabrizi and Kelly Marie Jafarie Tabrizi, Trustees of the Habib Tabrizi and Kelley Marie Jafari-Tabrizi 2009 Family Revocable Trust (Seller Defendants).

Plaintiff alleges that she entered into a contract to purchase the subject property on June 27, 2024, and that escrow closed on July 17, 2025, for a purchase prices of $1,250,000. (Cmpl., ¶ 10.) Prior to close of escrow, Seller Defendants disclosed that unpermitted work had been done on the property but did not disclose a County code enforcement case that had been opened in 2023. (Cmpl., ¶ 14.)

Seller Defendants and/or their predecessors-in-interest made several unpermitted and defective improvements and upgrades to the Property by themselves and by unlicensed tradespersons. Prior to the Seller Defendants’ sale of the Property to Plaintiff, the San Luis Obispo County Department of Planning and Building opened a code enforcement case – case number CODE2023-00069 (the “Code Enforcement Case”)(see Exhibit “E” attached hereto) – against the Seller Defendants identifying multiple violations and demanding that the violations be corrected by Seller Defendants.

Seller Defendants received notice of the Code Enforcement Case in 2023, prior to COE with Plaintiff, acknowledged the violations, and that they, Seller Defendants, were required to make the corrections regarding these violations to bring the Property into compliance with pertinent building and safety codes, rules, and regulations Plaintiff is informed and believes and thereon alleges that the Code Enforcement Case and its history with respect to the code enforcement action was known at all relevant times by the Seller Broker Defendants. (Cmpl., ¶ 14.)

The code enforcement case activities report describes specific conversations with Mr. Tabrizi regarding issues with the unpermitted work and the need for permits. (Cmpl., Ex. E.) Plaintiff alleges that Defendants’ disclosures prior to close of escrow nonetheless represent that they “are unaware of if the additions are not in compliance with or [sic] building codes.” (Cmpl., ¶ 24.)

Seller Defendants demur to the first six causes of action in the complaint (the seventh is not alleged against them) pursuant to Code of Civil Procedure sections 430.10(e) and 430.10(f):

1) fraudulent inducement—rescission; 2) breach of contract; 3) breach of duty to disclose; 4) fraud; 5) negligent misrepresentation; and 6) negligence. Counsel met and conferred prior to filing the demurrer.

Plaintiff opposes the demurrer.

A demurrer challenges only the defects that appear on the face of the pleading under attack, or from matters outside the pleading which are subject to judicial notice. (Code Civ. Proc., § 430.30, subd. (a).) When reviewing a demurrer, a court must draw all reasonable inferences in favor of the plaintiff. (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1239.) “The facts alleged in the pleading are deemed to be true, however improbable they may be.” (Berg & Berg Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1034.) A demurrer must be overruled if the plaintiff has stated a cause of action under any possible legal theory. (Hale v. Sharp Healthcare (2010) 183 Cal.App.4th 1373, 1379.)

In the context of a real estate transaction, it is now settled in California that where the seller knows of facts materially affecting the value or desirability of the property ... and also knows that such facts are not known to, or within the reach of the diligent attention and observation of the buyer, the seller is under a duty to disclose them to the buyer. [Citations.] Undisclosed facts are material if they would have a significant and measurable effect on market value. [Citation.] A breach of this duty of disclosure will give rise to a cause of action for both rescission and damages. [Citation.] Shapiro v. Sutherland (1998) 64 Cal.App.4th 1534, 1544

Seller Defendants’ arguments include that Plaintiff’s causes of action are insufficiently pleaded, that the fraud and deceit causes of action are not pleaded with sufficient particularity, that Plaintiff only had a duty to disclose known material conditions, not speculative or future enforcement activity, that Plaintiff fails to allege a breach of contract, and that the negligence claim is barred by the economic loss rule.

The Court has reviewed the allegations of the complaint and the parties’ arguments and authority for each of the six cause of action and finds the complaint to be sufficiently pleaded and certain at this stage.

Assilzadeh v. California Federal Bank (2000) 82 Cal.App.4th 399, is distinguishable. That case, which was decided at summary judgment, not at demurrer, involved property that was obtained by the seller bank through foreclosure, the bank had limited information on the property itself, and there were no facts alleging a known but undisclosed code enforcement action or investigation as is alleged here.

Defendants cite no relevant authority on rescission and the Court finds it adequately pleaded at this stage. Nor is Defendants’ discussion of the economic loss doctrine sufficient. Three brief, conclusory sentences and a bare citation of Robinson Helicopter Co. v. Dana Corp. (2004) 34

Cal.4th 979, does not show that Plaintiff’s negligence claim, alleged to be a based on concealment or misrepresentation, is necessarily barred by the economic loss rule.

ORDER (PROPOSED)

The Seller Defendants’ demurrer is overruled. They shall have ten days from service of notice of this order to file and serve their answer. (Cal. Rules of Court, rule 3.1320(g),(j).) Plaintiff shall serve notice.

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