Declaration of Ryan K Schneider In Support of Demurrer To Plaintiffs ComplaintDemurrerCal. Super. - 2nd Dist.March 29, 2019Electronically FILED by Superior Court of California, County of Los Angeles on 05/17/2019 10:31 AM Sherri R. Carter, Executive Officer/Clerk of Court, by J . Briggs,Deputy Clerk 1 || Frederick S. Reisz, Esq. SBN 143962 reisz@mmrs-law.com 2 ||Ryan K. Schneider, Esq. SBN 230575 schneider@mmrs-law.com 3 {MEYERS McCONNELL REISZ SIDERMAN A Professional Corporation 4 ||11620 Wilshire Boulevard, Suite 800 Los Angeles, California 90025-6601 5 || Tel (310) 312-0772; Fax (310) 312-0656 6 || Attorneys for Defendants VERONICA JUSTINA FIELDS and LIGHTHOUSE WEALTH MANAGEMENT GROUP 7 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES 9 MICHAEL ANTONOVICH ANTELOPE VALLEY COURTHOUSE 10 11 ||PROSPEREALTY, LLC, a California limited ) Case No. 19AVCV00254 liability company, ) 12 ) [Assigned to Hon. Brian C. Yep, Dept. Al4] Plaintiff, ) 13 ) DECLARATION OF RYAN K. Vv. ) SCHNEIDER IN SUPPORT OF 14 ) DEFENDANTS VERONICA JUSTINA JACKEY SMITH, an individual; SHABREN ) FIELDS AND LIGHTHOUSE WEALTH 15 ||HARVEY-SMITH, an individual; ) MANAGEMENT GROUP’S DEMURRER VERONICA JUSTINA FIELDS, an ) TO PLAINTIFF PROSPEREALTY, LLC’S 16 ||individual; LIGHTHOUSE WEALTH ) COMPLAINT MANAGEMENT GROUP, a general ) 17 || partnership; DOES 1 through 50, inclusive, ~~) [Filed concurrently with Memorandum of Points ) and Authorities and [Proposed] Order] 18 Defendants. ) ) Hearing Date: June 25, 2019 19 ) Hearing Time: 8:30 a.m. ) Dept.: Al4 20 ) Reservation ID: 434306925887 ) 21 ) ) Complaint Filed: March 29, 2019 22 ) Trial Date: None ) 23 ) ) 24 ) ) 25 ) ) 26 27 28 Meyers McConnell -1- Reisz Siderman A Professional Corporation 4 A HB DECLARATION OF RYAN K. SCHNEIDER IN SUPPORT OF DEMURRER TO COMPLAINT Ste. 800 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Meyers McConnell Reisz Siderman A Professional Corporation 11620 Wilshire Blvd. Ste. 800 DECLARATION OF RYAN K. SCHNEIDER I, Ryan K. Schneider, declare as follows: 1. [ am an attorney licensed to practice in all courts in the State of California and I am an attorney for Meyers McConnell Reisz Siderman, counsel of record for Defendants Veronica Justina Fields and Lighthouse Wealth Management Group (“Fields/LWM?”). I have personal knowledge of the facts set forth. If called as a witness, I could and would competently testify to the matters stated herein. 2. This Declaration is submitted in support of Fields/LWM’s Demurrer to the Complaint. 3. Pursuant to Code of Civil Procedure section 430.41, subdivision (a)(1), I met and conferred with Plaintiff’s counsel, Harpreet Singh, prior to filing the Demurrer. 4. Specifically, on May 7, 2019, I emailed and mailed a meet and confer letter to Mr. Singh that identifies the causes of action subject to demurrer and that sets forth with legal support the basis of the deficiencies. A true and correct copy of this letter is attached hereto as “Exhibit A 5. On May 15, 2019, I called Mr. Singh to follow-up on my May 7, 2019 meet and confer letter. He told me that he believes all of the causes of action asserted against Fields/LWM are sufficiently pled. He also sent me a written response, a true and correct copy of which is attached hereto as “Exhibit B.” I declare under penalty of perjury under the laws of California that the foregoing is true and correct, and that this declaration was executed on May 17, 2019, at Los Angeles, California. We Ryan K. Schneider, Esq. Declarant _2- DECLARATION OF RYAN K. SCHNEIDER IN SUPPORT OF DEMURRER TO COMPLAINT EXHIBIT A Meyers | McConnell Reisz | Siderman A Professional Corporation 11620 Wilshire Boulevard, Suite 800 Los Angeles, California 90025 Telephone: (310) 312-0772 Facsimile: (310) 312-0656 RYAN K. SCHNEIDER Associate schneider@mmrs-law.com May 7, 2019 VIA EMAIL & U.S. MAIL hsingh.law@gmail.com Harpreet Singh, Esq. THE SHERRON LAW FIRM, PC 638 Wolfe Avenue, Suite 1 Turlock, CA 95380 Re: ProspeRealty, LLC v. Jackey Smith, et al. LASC Case No.: 19AVCV00254 Our File No: 32.209497 Dear Mr. Singh: This office represents Defendants Veronica J. Fields (“Fields™) and Lighthouse Wealth Management Group (“LWM™). Please allow this correspondence to serve as an attempt to meet and confer in advance of our filing a demurrer and a motion to strike the Complaint. a. Grounds for Demurrer. 1. Intentional Interference with Contractual Relations. Plaintiff ProspeRealty, LLCs (“Plaintiff”) cause of action for intentional interference with contractual relations is subject to demurrer on the grounds that it does not state facts sufficient to constitute a cause of action. (See Code Civ. Proc., § 430.10, subd. (e).) Even ifit were true that Fields intentionally interfered with the Purchase and Sales Agreement (“Agreement”) between Defendants Jackey Smith and Shabren Harvey-Smith (“the Smiths”) and Plaintiff, her alleged actions are privileged. An action lies for the intentional interference of a contractual relationship either by unlawful means or by means otherwise lawful when there is a lack of sufficient justification or privilege for such interference. (Sade Shoe Co. v. Oschin & Snyder (1984) 162 Cal. App.3d 1174, 1179.) While the defendant’s culpable intent is an element of the cause of action to be pleaded and proved by the plaintiff, the defendants justification or privilege is an affirmative defense in an action for interference with an existing contractual relationship. (/d. at p. 1180.) Accordingly, the justification or privilege may not be considered as supporting the trial court's Harpreet Singh, Esq. May 7, 2019 Our File No. 32.209497 Page 2 action in sustaining a demurrer unless it appears on the face of the complaint. (Sade Shoe Co. v. Oschin & Snyder, supra, 162 Cal. App.3d at p. 1180 (Emphasis added.); Freed v. Manchester Service, Inc. (1958) 165 Cal. App.2d 186, 190.) If the facts establishing the justification for the defendant's conduct do appear on the face of the complaint, the question becomes whether that conduct sufficiently falls under the privilege. The duty not to interfere with a contract falls only on “strangers-interlopers™ who have no legitimate interest in the scope or course of the contract's performance. (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 513-514.) However, “|o]ne who has a financial interest in the business of another is privileged purposely to cause him not to enter into or continue a relation with a third person in that business if the actor a) does not employ improper/unlawful means and b) acts to protect his interest from being prejudiced by the relation.” (Sade Shoe Co. v. Oschin & Snyder, supra, 162 Cal.App.3d at p. 1181.) “Improper means™ refers to intentional misrepresentation, concealment, and/or extortion. (Asahi Kasei Pharma Corp. v. Actelion Lid. (2013) 222 Cal. App.4th 945, 959, 965.) Regarding what constitutes a proper “financial interest,” Professors Prosser and Keeton state that: The defendant is ... permitted to interfere with another's contractual relations to protect his own present existing economic interests, such as the ownership or condition of property, or a prior contract of his own, or a financial interest in the affairs of the person persuaded. He is not free, under this rule, to induce a contract breach merely to obtain customers or other prospective economic advantage; but he may do so to protect what he perceives to be existing interests. (Prosser and Keeton on Torts § 129, at p. 986 (5th ed. 1984) (Emphasis added.).) In this case, the first question is whether facts establishing the justification for Fields’ alleged conduct appear on the face of the Complaint. Paragraph 27 of the Complaint states in the pertinent part that: On December 9, 2018, Sellers informed Plaintiff that they consulted with the listing Broker about the Agreement, and the Broker advised Sellers she had an exclusive contract to sell the Property, and it could only be sold through her. For this reason, Sellers would need to pay this Broker in order for this transaction to be complete. (Emphasis added.) The justification for Fields’ alleged actions in this case is made apparent by this language in Paragraph 27 - she had an exclusive contract to sell the property and sought to protect her economic interests under this agreement. Thus, because the requisite language justifying Fields’ Meyers | McConnell Reisz | Siderman A PROFESSIONAL CORPORATION Harpreet Singh, Esq. May 7, 2019 Our File No. 32.209497 Page 3 actions clearly appears on the face of the Complaint, it is proper for the Court to consider the issue of privilege on demurrer.’ The next question is whether Fields employed “improper means” when she allegedly interfered with the contract between Plaintiff and the Smiths. As set forth above, an “improper means” is defined by intentional misrepresentation, concealment, and/or extortion. Paragraphs 55 and 64 of the Complaint state that Fields “advised [the Smiths] to disregard the performance on Agreement with Plaintiff...” Merely “advising” the Smiths to disregard their independent Agreement with Plaintiff because she had an exclusive listing agreement with them to sell their property does not in any way constitute intentional misrepresentation, concealment, and/or extortion. The Complaint also does not allege intentional misrepresentation, concealment, and/or extortion. Regarding the second element, whether Fields was acting to protect a financial interest, Fields allegedly interfered with the contract between Plaintiff and the Smiths to protect her exclusive agreement to sell the property. Per Professors Prosser and Keeton, supra, Fields was protecting “a prior contract of her own.” For the aforementioned reasons, Fields alleged interference with the contract is privileged. This cause of action, therefore, does not state facts sufficient to constitute a cause of action, 2. Inducing Breach of Contract. Plaintiff's cause of action for “inducing breach of contract” is subject to demurrer on the grounds that it does not state facts sufficient to constitute a cause of action. (See Code Civ. Proc., § 430.10, subd. (e).) The elements of inducing breach of contract are virtually identical to those for intentional interference with contractual relations. (Compare CACI No. 2200 (jury instruction listing the clements of inducing breach of contract), with Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126 (case discussing the elements of intentional interference with contractual relations).) For this reason, the conclusion set forth above applies here: Fields’ alleged actions are privileged. This cause of action, therefore, is subject to demurrer. 3. “Constructive Trust/Quasi-Contract/Restitution.” Plaintiff's cause of action for “constructive trust/quasi-contract/restitution™ is subject to demurrer on the grounds that it does not state facts sufficient to constitute a cause of action and is uncertain. (See Code Civ. Proc., § 430.10, subds. (e) & (f).) ! This language in the Complaint is also not hearsay since both the Smiths and Fields are parties in this case. (See Evid. Code § 1220.) Meyers | McConnell Reisz | Siderman A PROFESSICHAL CORPORATION Harpreet Singh, Esq. May 7, 2019 Our File No. 32.209497 Page 4 Civil Code section 2224 provides that “[o]ne who gains a thing by fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act, is, unless he or she has some other and better right thereto, an involuntary trustee of the thin g gained, for the benefit of the person who would otherwise have had it.” (Emphasis added.) In Ward v. T: aggart (1959) 51 Cal.2d 736, the court cites Civil Code section 2224 and reasons that California law provides a quasi-contractual remedy to prevent one from being unjustly enriched at the expense of another. (Id. at p. 741.) The court reasoned that the real estate broker in the case had a duty to be honest and truthful in his dealings, even though the broker was not the plaintiffs® agent. (/bid.) The court found that the broker violated his duty when he received, through fraudulent misrepresentations, money from the property that the plaintiffs would otherwise have had. (Ibid.) ‘The court therefore determined that the broker became an involuntary trustec on that money for the benefit of the plaintiffs. (/d. at pp. 741-742.) In Nguyen v. Scott (1988) 206 Cal.App.3d 725, a real estate broker “entirely eliminated appellant's offer from the seller's consideration by both competing secretly for the purchase and failing to transmit their offer to the seller.” (7d. at p. 737.) By doing so, the broker successfully acquired an ownership interest in the property. (/bid.) The Court reasoned that in California, a broker's breach of their duty of honesty and fair dealing constitutes an adequate basis for imposition of a constructive trust. (/d. at p. 740.) The court further reason that Ward, supra, “impliedly holds that a broker's breach of his duty of honesty and fair dealing amounts to an ‘other wrongful act” within the meaning of Civil Code section 2224." (Ibid.) As a remedy, therefore, the Nguyen court imposed a constructive trust and ruled that the broker must transfer his ownership interest in the property back to the appellants who, the court reasoned, would have likely obtained the property since their offer was higher than the broker's. (Id. at pp. 737-738.) In both Ward and Nguyen, the remedy imposed on a real estate broker who breached their duty of honesty and fair dealing under Civil Code section 2224 was to impose a constructive trust on the thing the aggrieved party would have otherwise acquired. In Ward, it was the income from the property the aggrieved party would have otherwise acquired. In Nguyen, it was the ownership interest in property the aggrieved party would have otherwise acquired. This is consistent with the function of constructive trusts in general. As set forth in Communist Party v. 322 Valencia, Inc. (1995) 35 Cal. App.4th 980, a constructive trust is an involuntary cquitable trust created by operation of law as a remedy to compel the transfer of property from the person wrongfully holding it to the rightful owner. (/d. at p. 990.) Here, while Fields obtained a commission for selling the property to the Johnsons, this is not the thing Plaintiff would have otherwise acquired were it not for Fields’ allegedly wrongful acts.’ That is, Plaintiff was never owed a commission. On the other hand, had Fields obtained * Contrary to what the Complaint asserts, Fields did not receive a “double commission” for representing both the Smiths and the Johnsons - far from it. Fields received $7500, which is just 2.5% of the $300,000 purchase price. This percentage is less than what Fields accepts from one client, let alone two. Meyers | McConnell Reisz | Siderman A PROFESSIONAL CORPORATION Harpreet Singh, Esq. May 7, 2019 Our File No. 32.209497 Page 5 the property that would be another matter since, pursuant to Civil Code section 2224, Fields would possess the thing that Plaintiff would have otherwise acquired but for her allegedly wrongful acts. However, this is not what occurred. This cause of action, therefore, does not provide Plaintiff with a viable form of relief and is subject to demurrer. (See Code Civ. Proc, § 430.10, subds. (e).) This cause of action is also subject to demurrer on the grounds that it is uncertain. (See Code of Civ. Proc., § 430.10, subd. (f).) First, the Complaint combines “constructive trust/quasi- contract/restitution™ together without delineating how each of these equitable remedies is specifically applicable to Defendants. The only applicable language under this cause of action is a vague assertion that “Defendants all sought to breach the contract between Plaintiff and Sellers and did so by violation of trust or other wrongful act.” Second, the Complaint alleges that “equity requires imposition of a constructive trust and a judgment providing restitution to Plaintiff,” which can be read to mean that Plaintiff requests both a constructive trust and other restitution. Alternatively, it can be read to mean that Plaintiff requests a judgment imposing a constructive trust, which is a form of restitution. Either way, as currently pled, the cause of action is uncertain and subject to demurrer pursuant to Code of Civil Procedure section 430.1 0, subdivision (f). 4, Breach of the Duty of Good Faith and Fair Dealing. Plaintiff's cause of action for the breach of the duty of good faith and fair dealing is subject to demurrer on the grounds that it does not state facts sufficient to constitute a cause of action. (See Code Civ. Proc., § 430.10, subd. (e).) Even if Fields allegedly owed Plaintiff a duty of good faith and fair dealing and breached that duty, for a real estate broker this still constitutes an “other wrongful act” under Civil Code section 2224. (See Ward v. Taggart, supra, 51 Cal.2d at pp. 741-742; Nguyen v. Scott (1988) 206 Cal. App.3d 725, 740.) However, as discussed in the previous section, Civil Code section 2224 only allows recovery when the party who allegedly engages in a wrongful act is in possession of the thing the aggrieved party would have otherwise acquired. Applied here, Fields obtained a commission but not what Plaintiff would have obtained under the Agreement, which is the property. This cause of action therefore does not provide Plaintiff a viable form of relief. Further, as previously set forth, even if Plaintiff argues that the Court should waive the constructive trust requirements of Civil Code section 2224, California law provides that there is no right to equitable relief or an equitable remedy when there is an * Even if Plaintiff argues that the Court should waive the constructive trust requirements of Civil Code section 2224, California law provides that there is no right to equitable relief or an equitable remedy when there is an adequate legal remedy. (Doran v. Sherman (1937) 18 C.A.2d 479, 480; 13 Witkin, Summary 11th Equity § 3 (2018).) Here, Plaintiff's primary legal remedies include its causes of action for intentional interference with contractual relations and “inducing breach of contract.” Meyers | McConnell Reisz | Siderman A PROFESSIONAL CORPORATION Harpreet Singh, Esq. May 7, 2019 Our File No. 32.209497 Page 6 adequate legal remedy. In this case Plaintiff's primary legal remedies include its causes of action for intentional interference with contractual relations and “inducing breach of contract.” Thus, because this cause of action does not provide Plaintiff with a viable form of relief, it is subject to demurrer. (See Code Civ. Proc., § 430.10, subd. (e).) b. Grounds for Motion to Strike. 1. Punitive Damages. Under Code of Civil Procedure section 436, subdivision (a), the court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper strike out any irrelevant, false, or improper matter inscrted in any pleading. Here, Plaintiff requests punitive damages against Fields/LWM under its causes of action for intentional interference with contractual relations and “inducing breach of contract.” As set forth below, because 1) the Complaint does not allege that Fields/LWM acted with oppression, fraud or malice pursuant to Civil Code section 3294; and 2) there is no factual basis to suggest that Fields/LWM acted with oppression, fraud or malice, Plaintiff's request for punitive damages is subject to a motion to strike. Civil Code section 3294 provides that in an action for the breach of an obi gation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant. “Malice” means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others. (Civ. Code, § 3294, subd. (c)( 1).) “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. (¢)(2).) “Fraud” means 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. (¢)(3).) Civil Code section 3294 reflects a public policy determination that certain conduct - “oppression, fraud or malice” - is so reprehensible that a penalty should be exacted to deter the commission of similar wrongful acts. (Cal. Prac. Guide Pers. Inj. Ch. 3-E § 3:1376 (Rutter 2018).) It is a well-established principle that punitive damages are not favored in law. (Rosener v. Sears, Roebuck & Co. (1980) 110 Cal. App.3d 740, 750; Henderson v. Security Nat. Bank (1977) 72 Cal.App.3d 764, 771.) Such damages constitute a windfall which, though supported by law in proper cases, creates the anomaly of excessive compensation which makes the remedy an unappealing one. (Rosener v. Sears, Roebuck & Co., supra, 110 Cal. App.3d at p. 750.) Punitive damages should therefore be awarded with the greatest of caution. (Henderson v. Security Nat. Bank, supra, 72 Cal. App.3d at p. 771.) In addition, a complaint that requests Meyers | McGonmell Reisz | Siderman A PROFESSIONAL CORPORATION Harpreet Singh, Esq. May 7, 2019 Our File No. 32.209497 Page 7 punitive damages must specifically allege that the defendant acted with fraud, oppression or malice, and it must do so with sufficient particularity. (Smith v. Superior Court (1992) 10 Cal. App.4™ 1033, 1041-1042.) Applied here, the Complaint does not allege that Fields/LWM acted with oppression, fraud or malice. In addition, paragraphs 55 and 64 of the Complaint state that Fields “advised [the Smiths] to disregard the performance on Agreement with Plaintiff...” Merely “advising” the Smiths to disregard their independent Agreement with Plaintiff because she had an exclusive listing agreement with them to scll their property does not in any way constitute “oppression, fraud or malice” as defined by Civil Code section 3294, subdivisions (c)(1)-(c)(3). Plaintiff's request for punitive damages, therefore, is subject to a motion to strike pursuant to Code of Civil Procedure section 436, subdivision (a). 2. Declaratory Relief, Although Plaintiff fails to plead a cause of action for declaratory relief, a request for declaratory relief is listed under its prayer for relief. Under Code of Civil Procedure section 436, subdivision (a), the court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper strike out any irrelevant, false, or improper matter inscrted in any pleading. As set forth below, the declaratory relief language is both irrelevant and improper and therefore subject to a motion to strike. Under California Code of Civil Procedure section 1061, “the court may refuse to exercise the power granted by this [declaratory relief] chapter in any case where its declaration or determination is not necessary or proper at the time under all the circumstances.” An action in declaratory relief will not lie to determine an issue that can be determined in the underlying action. (Cal. Ins. Guar. Ass'n v. Super. Ct. (1991) 231 Cal.App.3d 1617, 1623.) “The object of [declaratory relief] is to afford a new form of relief where needed and not to furnish a litigant with a second cause of action for the determination of identical issues.” (Gen. of Am. Ins. Co., v. Lilly (1968) 258 Cal. App.2d 465, 470.) Applied here, there is no basis to request declaratory relief against Fields/LWM. Plaintiff has already alleged causes of action against Fields/LWM for: 1) intentional interference with contractual relations; 2) inducing breach of contract; 3) constructive trust/quasi- contract/restitution; and 4) breach of the duty of good faith and fair dealing. These causes of action all pertain to Fields alleged wrongful interference with the Agreement between Plaintiff and the Smiths. There is not another issue a declaratory relief action could properly address that the aforementioned causes of action do not. In addition, Plaintiff does not plead that there is another issue that can only be addressed by declaratory relief. Thus, pursuant to Code of Civil Procedure section 436, subdivision (a), the declaratory relief language is irrelevant and improper as applied to Fields/LWM. For these reasons, this language is subject to a motion to strike. Meyers | McConnell Reisz | Siderman A PROFESSIONAL CORPORATION Harpreet Singh, Esq. May 7, 2019 Our File No. 32.209497 Page 8 Pursuant to Code of Civil Procedure section 430.41, subdivision (a)(1), before a moving party may file a demurrer, “the party who filed the complaint ... shall provide legal support for its position that the pleading is legally sufficient or, in the alternative, how the complaint ... could be amended to cure any legal insufficiency.” Similarly, under Code of Civil Procedure section 435.5, subdivision (a)(1), before a moving party may file a motion to strike, “the party who filed the pleading shall provide legal support for its position that the pleading is legally sufficient, or, in the alternative, how the pleading could be amended to cure any legal insufficiency.” We look forward to your response. Very truly yours, MEYERS McCONNELL REISZ SIDERMAN van K. Schneider, Esq. RKS:af ce: Frederick S. Reisz Meyers | McConnell Reisz | Siderman A PROFESSIONAL CORPORATION EXHIBIT B The Sherron Law Firm, PC Service with Integrity grin 638 Wolfe Avenue. Suite 1 Turlock. CA. 95380 P. 209.427.2200 F. 209.250.0377 May 15, 2019 VIA EMAIL & U.S. MAIL schneider@mmrs-law.com Ryan Schneider, Esq. Meyers, McConnell, Reisz, Siderman, PC 11620 Wilshire Boulevard Suite 800, Los Angeles, CA 90025 Re: ProspeRealty, LLC v. Smith et al. Case No. 19AVCV00254 Dear Mr. Schneider, This letter is in response to your meet and confer letter dated May 7, 2019 for a Demurrer and Motion to Strike against the Complaint filed by our client, ProspeRealty, LLC (“Client”) against Defendants Jackey Smith and Shabren Harvey-Smith (“Seller”), Veronica J. Fields, AND Lighthouse Wealth Management Group (“Broker”). Below are the responses to each of your grounds for Demurrer: (1) Intentional Interference with Contractual Relations is the Proper Claim Your argument for Demurrer is based on the premise that Broker is justified to intentionally interfered with the contract as it appears on the face of the Complaint. Further, you argue that the Broker can interfere with our Clients and Sellers’ contract to sell real estate. The face of the Complaint seems to contend (i) Broker did not employ any improper or unlawful means for such interference, and (ii) Broker acted to protect their own interest. We disagree with such an assessment. The unjustifiability or wrongfulness of the act may consist of the purpose or motive of the act as well as the method used. Rickel v. Schwinn Bicycle Co. (1983), 144 Cal. App.3d 648, 661, 192 Cal.Rptr. 732. Whether an intentional interference by a third party is justifiable turns upon a balancing of the social and private importance of the objective advanced by the interference against the importance of the interest interfered with, considering all the circumstances including the nature of the actor's conduct and the relationship between the parties. Herron v. State Farm Mutual Ins. Co., supra, 56 Cal.2d 202, 206, 14 Cal.Rptr. 294, 363 P.2d 310; Richardson v. La Rancherita, supra, 98 Cal.App.3d 73, 80, 159 Cal Rptr. 285; see also Rest.2d Torts, § 767. The question on the issue of privilege is whether the actor's conduct was fair and reasonable under the circumstances, which is a question for determination by the trier of fact. (Rosenfeld, Meyer & Susman v. Cohen (1983) 146 Cal. App.3d 200, 230, 194 Cal.Rptr. 180: H & M Associates v. City of El Centro (1980) 109 Cal. App.3d 399, 409, 167 Cal Rptr. 392.) Here, the allegations in the Complaint are sufficient to state this Cause of Action. No justification appears on the face of the Complaint. Paragraph 26 of the Complaint alleges that “Broker was not allowing them [Sellers] to sell their [Sellers] Property without the payment of commission to her [Broker].” (Emphasis Added.) Further, the Complaint alleges that in Paragraph 27, Broker is not allowing Sellers to sell their Property because Broker wants them to pay Broker as their listing agreement. “Also, Broker was a dual agent for the sale of the Property, and Broker had financial incentive to advise the Sellers to not perform on the Agreement with Plaintiff.” Paragraph 30 of Complaint, Broker is not an additional buyer of the Property in competition with Sellers. Broker's claim of financial interest to receive the Broker’s fee depends on the Sellers’ intent to pay the Broker as per their listing agreement and not by demanding breach of our Client's Purchase Agreement. Even if our Client did not have this binding Agreement with Sellers, then Broker’s financial interest depends upon Sellers” performance of their listing agreement. Moreover, the Complaint does not allege any facts to indicate that Sellers were not willing to pay Broker because of the binding Purchase Agreement with our Client. Thus, there is no indication to suggest that Broker had any predominant interest in our Client’s binding Agreement with Sellers. Broker, as a real estate agent of Sellers, had at least an indirect financial interest in any offer received by Sellers or Broker during the listing period. However, Broker’s position as a real estate agent does not furnish it with a privilege or justification to interfere with the proposed sale of Property of Sellers to our Client. The privilege, “is at most a qualified one dependent for its existence upon the circumstances of the case. Even if there is privilege of state of mind, its existence cannot be satisfactorily determined on the basis of pleadings alone. In evaluating the privilege claim the Broker’s predominant purpose in inducing the breach of the contract is important which is alleged as unfair and illegal. Such determination of purpose should be on the basis of proof rather than of pleading.” Culcal Stylco, Inc. v. Vornado, Inc. (1972), 26 Cal. App.3d 879, 883, 103 Cal.Rptr. 419. Accordingly, this Cause of Action is properly plead. (2) Inducing Breach of Contract is the Proper Claim This cause of action is somewhat similar to Intentional Interference with Contractual Relations. Thus, follows the reasoning mentioned above for this Cause of Action. Thus, this Cause of Action is also properly plead. (3) Constructive Trust/Quasi-Contract/Restitution is the Proper Claim As alleged in the Complaint in Paragraph 27 and 30, Broker was acting as a dual agent where Broker was representing both Sellers and the Second Buyer. Broker advised Sellers to disregard the Agreement with our Client. Broker cannot act against her duty of fairness, but, in fact, was required to treat all contracts equally based on its best interest to Sellers. Thus, the constructive trust is a proper remedy in this circumstance. The Cause of Action incorporates by reference the previous Paragraphs 1 to 66. All such allegations sufficiently layout the case for constructive trust or restitution as also indicated above. Accordingly, this Cause of Action is not uncertain. (4) Breach of the Duty of Good Faith and Fair Dealing is the Proper Claim A Broker owes a statutory duty of good faith and fair dealing to all third parties under real estate law. Bus. & Prof. Code §§ 10000-10580: Bus. & Prof. Code § 10176(); Norman I. Krug Real Estate Invs. v. Praszker (1990), 220 Cal.3d 35, 42. Here, Broker owes such a duty to our Client of which they failed to abide. This Cause of Action provides an alternative legal theory on the basis of which our Client can recover, based on the alleged misconducts of Broker. Our Client alleged facts to satisty the pleading requirements for this Cause of Action. This Cause of Action is separate and distinct from Constructive trust or restitution. Thus, this Cause of Action is properly plead. Below are the responses for Motion to Strike items: (1) Punitive Damages is Proper Pursuant to Cal. Civil Code § 3294 (c)(1), our Client alleged “Malice” conduct of Broker in the Complaint paragraphs 26, 27, 29, 30, 55, and 56. In summary, Broker had complete knowledge of our Client’s binding Purchase Agreement with Sellers. Broker advised Sellers to disregard the binding Agreement so the Broker can force in their offer where the Broker has ill motive to bring their own represented buyer. In such a way, Broker willfully and consciously demanded Seller to disregard our Client’s rights. Thus, there are sufficient allegations in the Complaint to support the request for punitive damages. (2) Requesting the Declaratory Relief is Proper By virtue of Cal. Civ. Proc. §1062, the existence of an accrued Cause of Action does not necessarily preclude declaratory relief. In Ermolieffv R.K.O. Radio Pictures, Inc. (1942), 19 C2d 543, 547, the court noted that a court may make a binding declaration of rights whether other relief is, or could be claimed or obtained, and that the remedy is cumulative. See also Steinberg v Chiang (2014), 223 CAdth 338, 344 (availability of alternative relief does not generally bar declaratory relief). In Jones v Robertson (1947), 79 CA2d 813, 819, quoting from Borchard, Declaratory Judgments 302 (2d ed 1941), it was stated: [I]t is wrong for courts to decline a declaration on the mere ground that another remedy was available, for declaratory relief was not intended to be exclusive or extraordinary, but alternative and optional. It is only where the court believes that more effective relief can and should be obtained by another procedure and that for that reason a declaration will not serve a useful purpose, that it is justified in refusing a declaration because of the availability of another remedy. Thus, the fact that a Cause of Action has accrued and that other adequate relief may be available to plaintiff are factors to be considered by the court in granting or denying declaratory relief. Columbia Pictures Corp. v DeTorh (1945) 26 C2d 753. Here, our Client alleged a number of Causes of Actions against Broker and Sellers. The request for declaratory relief is one of the additional remedies requested from the court. It is under the court’s discretion to grant it or not. However, that does not mean it is improper or not necessary in any way to request such an alternative relief. Thus, this relief is properly requested. Conclusion: All grounds of Demurrer and Motion to Strike are not proper. We tried to provide you clarity on the reasoning behind alleging the Causes of Actions, and different reliefs to which you object. However, even if there is still some clarity needed, please specifically identify those areas so we can, in good faith, consider your objection(s). You can contact me via email or call me at 209-427-2200. Sincerely, THE SHERRON LAW FIRM, PC Harpreet Singh, uf Attorney at Law HS:lc N O N nn Re L N 0 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE 32.497 1013A(3)CCP STATE OF CALIFORNIA Prosperealty, LLC vs. Jackey Smith, et al. Los Angeles Superior Court Case No. 19AVCV00254 I am employed in the county of Los Angeles, State of California. Tam over the age of 18 and not a party to this action; my business address is 11620 Wilshire Boulevard, Suite 800, Los Angeles, California 90025. On May 17, 2019, I served the foregoing document described as “ DECLARATION OF RYAN K. SCHNEIDER IN SUPPORT OF DEFENDANTS VERONICA JUSTINA FIELDS AND LIGHTHOUSE WEALTH MANAGEMENT GROUP’S DEMURRER TO PLAINTIFF PROSPEREALTY, LLC’S COMPLAINT?” on interested parties in this action by placing true copies thereof enclosed in sealed envelopes addressed as follows: Harpreet Singh, Esq. Attorneys for Plaintiff, THE SHERRON LAW FIRM, PC Prosperealty, LLC 638 Wolfe Avenue, Suite 1 Turlock, CA 95380 Tel: (209) 427-2200 Email: harpreet@sherron-law.com = (VIA MAIL) The envelope was mailed with postage thereon fully prepaid. I am “readily” familiar with the firm’s practice of collection and processing correspondence for mailing. It is deposited with U.S. Postal Service on that same day in the ordinary course of business. I am aware that on motion of a party served, service is presumed invalid if the postal cancellation date or postage meter date is more than one day after date of deposit for mailing an affidavit. Hl (VIA E-MAIL) I caused a true copy of the foregoing document(s) listed above to be served by electronic email transmission at the time shown on each transmission, to each interested party at the email address(es) shown above. Each transmission was reported as complete and without error. [] (VIA OVERNIGHT) I caused such envelope to be delivered by overnight courier service to the offices of the addressee. The envelope was deposited in or with a facility regularly maintained by the overnight courier service with delivery fees paid or provided for. [] (VIA PERSONAL SERVICE) I delivered such envelope by hand to the address of the addressee listed above. X (STATE) I declare under penalty of perjury under the laws of the State of California that the above is true and correct. Executed on May 17, 2019, in Los Angeles, California. Lolo Ann Fukushima
