Demurrer CLM

Cal. Super. - 2nd Dist.February 10, 2015

123 Judge SUPERIOR COURT OF CALIFORNIA, TENTATIVE RULINGS EVENT DATE: EVENT TIME: VENTURA DIVISION January 29, 2016 02/02/2016 08:20:00 AM DEPT.: 41 COUNTY OF VENTURA JUDICIAL OFFICER: Vincent O'Neill CASE NUM: CASE CATEGORY: EVENT TYPE: CASE TITLE: CASE TYPE:Civil - Unlimited Breach of Contract/Warranty 56-2015-00463885-CU-BC-VTA NOELL VS. MASON Demurrer (CLM) - to 2nd Amended Cross Complaint. CAUSAL DOCUMENT/DATE FILED: Demurrer, 12/30/2015 stolo Tentative ruling for February 2, 2016 on Plaintiff/Cross-Defendant Craig Noell's Demurrer to Defendant/Cross-Complainant Pamela Mason's 2nd Amended Cross-Complaint Overrule Plaintiff/Cross-Defendant Craig Noell's (individually, and as Trustee of the Noel Family Trust) demurrer for uncertainty to the second cause of action for breach of oral contract and third cause of action for promissory estoppel in Defendant/Cross-Complainant Pamela Mason's 2nd Amended Cross-Complaint, on the grounds that (a) demurrers for uncertainty are disfavored and should only be sustained where the complaint is so bad that the demurring defendant cannot reasonably respond thereto (see, e.g., Khoury v. Maly's of Calif., Inc. (1993) 14 Cal.App.4th 612, 616); (b) here, the 2nd Amended Cross-Complaint sufficiently cures the uncertainties previously identified in the 1st Amended Cross-Complaint to permit the Court to reach the merits of Noell's general demurrer to these claims. Sustain, without leave to amend, Noell's general demurrer to the second and third causes of action, on the ground Mason fails to allege facts indicating she timely exercised her alleged option to purchase the subject Property. In the context of agreements for the sale/purchase of real property, an option agreement is normally a unilateral agreement by an owner in effect for a fixed period of time pursuant to which the owner agrees to sell property to the option holder at a specified price. Only after the option is exercised is a bilateral, enforceable sale/purchase contract formed. (See Auslen v. Johnson (1953) 118 Cal.App.2d 319, 321-322.) Here, Mason attempts to allege the formation of the Oral Option Agreement in ¶10 of the 2nd Amended Cross-Complaint fail for several reasons. First, as noted in the Court's October 1, 2015 Ruling on Noell's prior demurrer to this cause of action, a right of first refusal ("ROFR") is not an unqualified option to buy, but rather an option which arises only if the owner decides to sell the property. As a result, it is unclear how the entry into the alleged Option Agreement might be "in connection with Mason's exercise of the ROFR." More critically, although ¶10 attempts to allege the formation of an option agreement, it falls short of alleging the actual formation of such an agreement, because an option agreement which does not specify the purchase price (or, at a minimum, some formula for determining a price) is effectively no agreement at all because the most critical term of such an agreement is missing. As a result, Mason fails to allege the formation of any option agreement in 2007. In ¶10.a, Mason alleges that in 2009, for the first time, Noell agreed to sell the subject Property at a specified price. But these allegations also are insufficient to show the formation of an option agreement. Instead, they merely indicate that Noell made an offer to sell the Property to Mason at a specified price, an offer which Mason fails to indicate she ever accepted. (See, e.g., Civil Code §§1585, 1586.) An offer to sell a property at a specified price does not, standing alone, create any option in the offeree because such an offer can be retracted at any time by the offeror. An option, by definition, is a unilateral agreement to keep an offer of sale open for a period of time. (Erich v. Granoff (1980) 109 Cal. App. 3d 920, 927-928; see also Steiner v. Thexton (2010) 48 Cal. 4th 411, 418; Simons v. Young (1979) 93 Cal.App.3d 170, 182.) In the absence of an agreement that an offer would be left open for a specified period of time, no option agreement has been alleged. In ¶10.b of the 2nd Amended Cross-Complaint, Mason for the first time alleged facts which, liberally construed, indicate TENTATIVE RULINGS Page: 1 CASE NUMBER: CASE TITLE: NOELL VS. MASON 56-2015-00463885-CU-BC-VTA the formation of an option agreement, conditioned on close of escrow by June 30, 2013. However, in order for Mason to have a contractual right to purchase the Property, she must also allege that she timely and validly exercised her option. (City of Orange v. San Diego County Employees Ret. Ass'n (2002) 103 Cal. App. 4th 45, 51-52.) Mason fails to allege facts indicating that she timely exercised the option by doing so. Nor does she sufficiently allege facts indicating that the time period in which she could exercise the option was extended, or that she timely and validly exercised her option under any such extension. In the absence of allegations indicating that she timely exercised her option to purchase the Property on the agreed terms, Mason fails to allege performance of a condition precedent to her alleged right to purchase the Property. Finally, Mason alleges: (1) in ¶10.c that in February 2014 Noell attempted to unilaterally change the terms of the Option Agreement by raising the purchase price to $1.8 million with no seller financing; and (2) in ¶10.d that Noell breached the Option Agreement in January 2015 by insisting on a purchase price of $1.8 million. However, both of these allegations fail due to Mason's failure to allege facts indicating that the option agreement was still in effect in February 2014 or January 2015; instead, Mason's allegations appear to indicate that Mason's option to purchase the Property (to the extent it arguably existed) expired by its own terms on June 30, 2013. Based on the above, the Court sustains Noell's demurrer to the second cause of action on the ground Mason fails to allege facts indicating that she validly exercised her option to purchase the Property prior to the expiration of the option period. The court need not reach Noell's arguments concerning the unwritten nature of the asserted agreement to purchase real property. Because Mason's third cause of action for promissory estoppel is expressly premised on the theory that Noell breached his promise to sell her the Property as embodied in the alleged Option Agreement (see 2nd Amended Complaint, ¶¶31, 32), it also fails due to Mason's failure to allege facts indicating that she timely exercised her option, a condition precedent to Noell's obligation to perform his "promise" under the Option Agreement. Plaintiff/Cross-Defendant Craig Noell's shall file and serve his Answer to the Second Amended Cross-Complaint by no later than March 3, 2016. TENTATIVE RULINGS Page: 2