Demurrer CLM

Cal. Super. - 2nd Dist.July 17, 2015

123 Judge SUPERIOR COURT OF CALIFORNIA, TENTATIVE RULINGS EVENT DATE: EVENT TIME: VENTURA DIVISION January 11, 2017 01/17/2017 08:20:00 AM DEPT.: 21 COUNTY OF VENTURA JUDICIAL OFFICER: Kent Kellegrew CASE NUM: CASE CATEGORY: EVENT TYPE: CASE TITLE: CASE TYPE:Civil - Unlimited Breach of Contract/Warranty 56-2015-00470037-CU-BC-VTA PAN PARTNERSHIP VS LAS VIRGENES INVESTMENTS Demurrer (CLM) - reserved by counsel for Dena Molina CAUSAL DOCUMENT/DATE FILED: stolo The Court intends to Grant plaintiff's request for judicial notice. The Court admonishes defense counsel for failing to comply with CCP § 430.41. The Court strongly admonishes both attorneys for their blatant and inexcusable miscitations of case authority. The Court intends to SUSTAIN without leave to amend Las Virgenes' demurrer to the seventh and eighth causes of action. Las Virgenes Investment's agents cannot be liable for interfering with the purchase agreement entered into by Las Virgenes. Demurrer is only appropriate where the grounds for objection appear on the face of the complaint or from any matter of which the court is required to or may take judicial notice. CCP § 430.30(a). For the purpose of a demurrer, the court must treat all properly pleaded facts as admitted. Blank v Kirwan (1985) 39 Cal.3d 311, 318. Plaintiff supports its opposition with a request for judicial notice of two documents in the file. The Court intends to Grant the request for judicial notice. It also supports its opposition with a declaration from its attorney attempting to introduce into evidence copies of Molina's discovery responses and an e-mail. In response, defendants include a declaration from their attorney in the reply attempting to introduce into evidence an email and supplemental discovery responses. None of this evidence can be considered by the court for purposes of the merits of the demurrer. Plaintiff either adequately alleged the causes of action or it didn't; no reference to outside materials may be made. The Court makes the following observation: BOTH parties deliberately misquote case authority. First, in the demurrer defendants cite the following quotation from Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376: "[A] plaintiff seeking to recover for an alleged interference with prospective contractual or economic relations must plead and prove as part of its case-in chief (sic) that the defendant not only knowingly interfered with the plaintiff's expectancy, but engaged in conduct that was wrongful by some legal measure other than the fact of interference itself." (Demurrer, page 5:4-7, emphasis added). The actual quote is: "[A] plaintiff seeking to recover for alleged interference with prospective economic relations has the burden of pleading and proving that the defendant's interference was wrongful 'by some measure beyond the fact of the interference itself.'" Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 392-93. Defendants' insertion of the phrase "contractual or" is not only misleading, it is directly contrary to the law (see below). Second, plaintiff argues in the opposition that the court in Asahi Kasei Pharma Corporation v. Actelion Ltd. (2013) 222 Cal.App.4th 945, stated the following: "our courts have allowed contract interference claims to be stated against agents, owners, officers, and directors of the company whose contract was the subject of the litigation." (See Opp., page 4:15-17, emphasis added). The actual quote is: "our courts have allowed contract interference claims to be stated against owners, officers, and directors of the company whose contract was the subject of the litigation." Id., at 963. The word "agent" does not TENTATIVE RULINGS Page: 1 CASE NUMBER: CASE TITLE: PAN PARTNERSHIP VS LAS VIRGENES INVESTMENTS 56-2015-00470037-CU-BC-VTA appear in the quote. Plaintiff repeats this error throughout the opposition, arguing that Asahi addressed the doctrine of agent's immunity. It did not: the defendants in Asahi were not alleged to be agents and the court didn't address agent immunity (see below). Both parties are guilty of deliberately inserting language that doesn't exist into quotes to suit their argument. "In presenting a matter to a tribunal, a member: (B) Shall not seek to mislead the judge, judicial officer, or jury by an artifice or false statement of fact or law." Rules of Professional Conduct, Rule 5-200(B). Moving on to the merits of the motion, the seventh cause of action for intentional interference with contractual relations is directed against Claudia Jo Jones, Dene Molina, United Associated Brokers, dba Ace Realty, Andy Zepeda, and Jose Cabrera. It alleges that plaintiff entered into a Purchase and Sale Agreement with Las Virgenes Investments on 12/10/14. (FAC, ¶ 52). Defendants were aware of this contractual relationship. (FAC, ¶ 53). Nevertheless, Molina and United Associated Brokers procured another buyer. (FAC, ¶ 54). Defendants argue their conduct was privileged because they were acting on behalf of a party to the relationship and only a stranger to the contract can be liable for interfering with it. They argue an agent cannot be liable for interfering with a principal's relationship with third parties. The elements which a plaintiff must plead to state the cause of action for intentional interference with contractual relations are (1) a valid contract between plaintiff and a third party; (2) defendant's knowledge of this contract; (3) defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage. Pacific Gas & Electric Co. v Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126. Plaintiff has alleged these. For some reason, defendants are under the impression this is an action for intentional interference with prospective economic advantage, a completely separate action. The Court reaches this conclusion because they cite the elements for a prospective economic advantage claim in their motion (Demurrer, page 4:26) and then argue that a plaintiff seeking to recover for interference with prospective economic relations must allege defendant engaged in conduct that was wrongful by some legal measure other than the interference itself. That's true where there is no contract. However, "[b]ecause interference with an existing contract receives greater solicitude than does interference with prospective economic advantage, it is not necessary that the defendant's conduct be wrongful apart from the interference with the contract itself. Quelimane Co. v Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 55. Perhaps if defense counsel hadn't inserted incorrect language into their quote from Della Penna they wouldn't have made this error. These are two completely separate theories and plaintiff's claim is for interference with a contract. Defendants' argument also conflates two separate concepts, but then so does plaintiff. Some parties are completely immune from liability for interfering with a contract; these include parties to the contract and their agents and employees. Shoemaker v. Myers (1990) 52 Cal.3d 1, 24. This is an appropriate topic for demurrer. Some parties are not immune but can assert privilege as a defense. These include owners, officers, directors, or managers. See Woods v. Fox Broadcasting Sub., Inc. (2005) 129 Cal.App.4th 344, 351 and Wanland v. Los Gatos Lodge, Inc. (1991) 230 Cal.App.3d 1507, 1522. Some cases have included agents in this category. However, it doesn't matter because defendants are not, and indeed cannot, assert this privilege on demurrer. This privilege is a fact-intensive defense not amenable to determination on demurrer. Woods v. Fox Broadcasting Sub., Inc., supra, fn. 7 and Asahi Kasei Pharma Corporation v. Actelion Ltd. (2013) 222 Cal.App.4th 945, 963. This is not defendants' argument despite their mistaken reference to privileges. Plaintiff argues that immunity cannot be decided on demurrer but that is based on plaintiff's misinterpretation and misquotation of Asahi Kasei Pharma Corporation v. Actelion Ltd. (2013) 222 Cal.App.4th 945. The court in Asahi determined that the application of the defense of privilege is not suitable for demurrer; it said nothing about immunity. The Asahi court did have this to say about immunity: "We agree with the Woods court that '[a] stranger [to the contract], as used in Applied Equipment, means one who is not a party to the contract or an agent of a party to the contract." Id., at 963-64. Aside from that, Asahi is not relevant to this discussion since it involved a doomed claim of immunity by a party that was neither the contracting party nor its agent. A case that is relevant is Mintz v. Blue Cross of California (2009) 172 Cal.App.4th 1594. In Mintz a member of a health insurance plan (non-party PERS Choice) sued the claims administrator (Blue Cross) for interfering with the health plan by denying his claim and failing to inform him of his right to independent review. Blue Cross demurred. The appellate court determined that the complaint did not state a legal claim for interference with contract rights because "Blue Cross TENTATIVE RULINGS Page: 2 CASE NUMBER: CASE TITLE: PAN PARTNERSHIP VS LAS VIRGENES INVESTMENTS 56-2015-00470037-CU-BC-VTA is CalPERS's agent: for purposes of claims administration under the insurance contract between Mintz and CalPERS, Blue Cross was vested with the power to act for CalPERS, and therefore cannot be held liable for interference with the very contract it was charged with administering." Id., at 1604. Plaintiff attempts to distinguish Mintz by arguing that the contract in that case specifically stated it was to be administered by Blue Cross. That's true, but it's not the deciding factor. Regardless, here the contract, the Residential Purchase Agreement attached to FAC, contains an section on agency disclosure which states that United Associated Brokers was the listing agent and seller's exclusive agent. (FAC, Ex. A, ¶ 2). On page 10 of the Purchase Agreement is an entire section regarding real estate brokers, stating they are not parties to the agreement and that, under certain conditions, the listing broker agrees to pay to the selling agent the amount specified in the MLS. Molina signed this portion of the agreement. (FAC, Ex. A, page 10). In addition, the Mintz court relied on PM Group, Inc. v. Stewart (2007) 154 Cal.App.4th 55, in which plaintiffs sued Rod Stewart, his manager, his attorney and his agent for interfering with promotion subcontracts the plaintiffs had entered into. The appellate court found that "[b]ecause the subcontracts at issue here provided for Stewart's performance, neither Stewart nor his agents can be liable for the tort of interfering with the subcontracts." PM Group, Inc. v. Stewart (2007) 154 Cal.App.4th 55, 65. Here, the contract at issue, the purchase agreement, provided for the performance of Las Virgenes Investment as well as its agents; as such neither Las Virgenes Investments nor its agents can be liable for the tort of interfering with it. Specifically, moving defendants' performance was necessary to the purchase agreement as they were Las Virgenes' agents for purposes of the sale. For these reasons, the Court concludes that moving parties are immune from liability for interfering with the purchase agreement and sustaining the demurrer to the seventh cause of action without leave to amend. The eighth cause of action is for negligent interference with contractual relations. Defendants rely on the same argument and the demurrer may be sustained for the same reason. In addition, "[i]n California there is no cause of action for negligent interference with contractual relations." Davis v. Nadrich (2009) 174 Cal.App.4th 1, 9; Fifield Manor v. Finston (1960) 54 Cal.2d 632, 636 ("courts have quite consistently refused to recognize a cause of action based on negligent, as opposed to intentional, conduct which interferes with the performance of a contract between third parties or renders its performance more expensive or burdensome.") Finally, there is no factual basis for finding that moving parties owed plaintiff a duty. Plaintiff doesn't address this, aside from arguing defendants "violated the professional duties owed by them to others as real estate professionals." (Opp., page 6:9). Defendants were not plaintiff's agents. TENTATIVE RULINGS Page: 3