JANEEN MARQUARDT, ET AL VS. PHILIP PERA, ET AL

Mirda (2007) 147 Cal.App.4th 740, 751.) Where the sham pleading doctrine applies, the court may take judicial notice of the prior pleadings and disregard the inconsistent allegations. (Deveny, supra, 139 Cal.App.4th at p. 425, citing Colapinto v. County of Riverside (1991) 230 Cal.App.3d 145, 151.)

July 24, 2026 Law and Motion Calendar

HONORABLE MICHAEL L. MAU, Department 20 ________________________________________________________________________ Plaintiffs’ Complaint alleged that the gravamen of their claims was the failure to Defendants to disclose that the property was subject to two Pacifica ordinances: (1) the Short-Term Rental Ordinance (“STR law”), which demands compliance with multiple and strict city requirements before the residence can be rented through Airbnb, VRBO or similar; and (2) the Hillside Preservation Ordinance (“Hillside law”), a zoning overlay which likewise demands compliance with multiple and strict requirements before there can be virtually any physical alteration or improvement of a hillside slope. (Complaint, ¶ 2.)

In their FAC, Plaintiffs now allege that the gravamen is that Defendants did not disclose that the property did not conform to city design and construction requirements, nor had it been inspected for compliance, and therefore could not have been operated as an Airbnb. (FAC, ¶ 2.) Notably, Plaintiffs omit any references to the STR law and Hillside law, yet the FAC continues to allege that Defendants failed to disclose that the property was illegally being operated as an Airbnb. Further, Plaintiffs fail to identify what these “city design and construction requirements” are that they are claiming.

Thus, the court agrees with Defendants that Plaintiffs appear to have intentionally omitted any reference to the STR law without explaining the reason for omitting such allegations. As such, the court reads into the FAC the allegations from the Complaint that Plaintiffs claims are claiming Defendants failed to disclose that the property did not comply with the STR law.

First Cause of Action for Breach of Contract and Second Cause of Action for Breach of the Implied Covenant of Good Faith and Fair Dealing

The Demurrer to the First and Second Cause of Action are SUSTAINED WITH LEAVE TO AMEND based on failure to allege facts sufficient to support these claims.

The elements of a cause of action for breach of contract are: (1) existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damages to the plaintiff because of the breach. (Miles v. Deutsche Bank National Trust Co. (2015) 236 Cal.App.4th 394, 402.) “A written contract may be pleaded either by its terms—set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference—or by its legal effect.” (Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 993.) To plead a contract by its legal effect, the plaintiff must allege the substance of its relevant terms. (Ibid.) This is more difficult because it requires a careful analysis of the instrument, comprehensiveness in statement and avoidance of legal conclusions. (Ibid.)

The FAC alleges that the contract is comprised of the published Multiple Listing for the property (“MLS Listing”), the Residential Purchase Agreement (“RPA”), the Transfer Disclosure Statement (“TDS”) and the Seller Property Questionnaire (“SPQ”). (FAC, ¶ 11.) Plaintiffs do not attach a copy of these documents to the FAC or set out the terms verbatim in the FAC. Further, Plaintiffs’ allegations are insufficient to plead the contract by its legal effect. (See FAC, ¶¶ 12, 13, 22.) Plaintiffs thus fail to allege facts sufficient to support this breach of contract claim.

The Second Cause of Action for breach of the implied covenant of good faith and fair dealing also fails. “If the allegations do not go beyond the statement of a mere contract breach, and relying on the same alleged acts, simply seek the same damages or other relief already claimed in

July 24, 2026 Law and Motion Calendar

HONORABLE MICHAEL L. MAU, Department 20 ________________________________________________________________________ a companion contract cause of action, they may be disregarded as superfluous as no additional claim is actually stated.” (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1395.) Defendants are correct that the allegations in this claim are duplicative of the breach of contract claim. Further, Plaintiffs must adequately plead a contract to allege this claim. (See Innovative Business Partnerships, Inc. v.

Inland Counties Regional Center, Inc. (2011) 194 Cal.App.4th 623, 631 [a breach of implied covenant of good faith and fair dealing claim is premised on the breach of a specific contractual obligation]; see also Racine & Laramie, Ltd. v. Department of Parks & Recreation (1992) 11 Cal.App.4th 1026, 1032. [“There is no obligation to deal fairly or in good faith absent an existing contract.”].)

Third Cause of Action for Breach of the Implied Warranty of Fitness for a Particular Purpose

The Demurrer to the Third Cause of Action is SUSTAINED WITH LEAVE TO AMEND based on failure to allege facts sufficient to support this cause of action.

Defendants demur to this cause of action on the ground that California courts have not extended such an implied warranty to non-commercial sales of real property, such as the sale of residential property here. Instead, the California Supreme Court extended this implied warranty only to apply to contracts for the construction and sale of newly constructed homes. (See Pollard v. Saxe & Yolles Development Co. (1974) 12 Cal.3d 374, 379-380.) Plaintiffs contend in response that Pollard is not limited to construction defects or builder-sellers.

The California Supreme Court in Pollard found that the laws historically governing sales of real property have developed along lines different from those governing sales of commercial goods. (Pollard, supra, 12 Cal.3d at p. 377.) “In the normal sale of land and buildings, courts have traditionally applied the doctrine of caveat emptor, with the buyer assuming the risk on quality— absent express warranty, fraud, or misrepresentation.” (Ibid.) In contrast, warranties of quality and fitness have been implied in the sale or furnishing of tangible chattels. (Ibid.) Nevertheless, the court found that an exception applied in finding that an implied warranty applies to builders and sellers of new construction. (Id. at pp. 379-380.)

Pollard therefore does not support that a cause of action for breach of implied warranty of fitness for a particular purpose applies to the facts in the FAC. The Pollard court recognized an exception that applied to builders and sellers of new construction to allow such a cause of action. Plaintiffs have not cited any other authority to support that they may bring this claim.

Fourth Cause of Action for Nondisclosure, Fifth Cause of Action for Intentional Misrepresentation, and Sixth Cause of Action for Fraudulent Concealment

The Demurrer to the Fourth, Fifth and Sixth Causes of Action is OVERRULED. Defendants have not established on the face of the FAC, or from matters of which the court may take judicial notice, that these causes of action are barred by the statute of limitations. The Fifth Cause of Action also alleges facts sufficient to support a misrepresentation with specificity.

July 24, 2026 Law and Motion Calendar

HONORABLE MICHAEL L. MAU, Department 20 ________________________________________________________________________ For a demurrer to be sustained based on the statute of limitations, it must clearly and affirmatively appear on the face of the complaint that the action is barred. (Citizens for a Responsible Caltrans Decision v. Department of Transportation (2020) 46 Cal.App.5th 1103, 1116–1117.) The demurrer will be overruled when the relevant facts are not clear such that the cause of action might be, but is not necessarily time-barred. (Id. at p. 1117.)

Defendants have not shown that the Fourth, Fifth and Sixth Causes of Action are barred by the statute of limitations. The three-year statute of limitations for a fraud cause of action “is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.” (Code Civ. Proc., § 338, subd. (d).) A cause of action generally accrues at the time when the cause of action is complete with all its elements. (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807.) An exception to this general rule is the discovery rule, which postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action. (Ibid.) A plaintiff has reason to discover a cause of action when the person has reason to suspect a factual basis for its elements. (Ibid.)

Plaintiffs filed the Complaint on December 23, 2024. The FAC alleges that escrow closed on the property on December 31, 2021. (FAC, ¶ 11.) Nevertheless, Defendants claim that Plaintiffs had reason to discover the City of Pacifica’s STR law at least by the time they signed the purchase agreement on November 26, 2021 because Plaintiff intended to rent out the property as a shortterm rental. However, it is not clear when Plaintiffs had reason to discover the STR law. In other words, the court cannot determine whether the statute of limitations started to run at the time they signed the purchase agreement, as Defendants contend, or when escrow closed, or even sometime later. These causes of action are not clearly time barred notwithstanding whether or not the discovery rule applies to these claims.

Defendants also demur to the Fifth Cause of Action on the basis that Plaintiffs fail to allege with specificity a misrepresentation. However, Plaintiffs sufficiently allege a misrepresentation based on the SPQ at Section 5-J. (FAC, ¶ 13.)

Seventh Cause of Action for Negligent Misrepresentation and Eighth Cause of Action for Negligence

The Demurrer to the Seventh and Eighth Causes of Action is SUSTAINED WITH LEAVE TO AMEND as barred by the statute of limitations.

The Seventh and Eighth Causes of Action are based on negligence, which is governed by a twoyear statute of limitations. (Code Civ. Proc., § 335.1 [two year statute of limitations for negligence]; E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App. 4th 1308, 1317 [cause of action for negligent misrepresentation is typically subject to a two-year limitations period].)

Defendants once again argue that these claims are barred by the statute of limitations because Plaintiffs reasonably could have discovered the existence of the STR law and its requirements at the time they entered into the agreement. Plaintiffs claim that they did not have reason to

July 24, 2026 Law and Motion Calendar

HONORABLE MICHAEL L. MAU, Department 20 ________________________________________________________________________ discover these claims until after receiving a cease and desist order from the City of Pacifica in May 2023, and that they could not have reasonably made this discovery before then.

“A plaintiff whose complaint shows on its face that his claim would be barred without the benefit of the discovery rule must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.” (E-Fab, supra, 153 Cal.App.4th at p. 1319.) The plaintiff has the burden to show diligence, and conclusory allegations will not withstand demurrer. (Ibid.) Here, Plaintiffs make only a conclusory allegation that they had no reasonable basis for discovering by themselves that the property was being operated illegally for the purposes of Airbnb. (FAC, ¶ 15.)

Plaintiffs failed to plead specific facts as to why they were unable to discover this earlier despite reasonable diligence. Thus, these causes of action appear to be barred by the statute of limitations. Plaintiffs are given leave to amend to plead specific facts to support that the discovery rule applies.

Defendants’ Request for Judicial Notice

Defendants’ Request for Judicial Notice is GRANTED to Exhibit A. (See Evid. Code, § 452, subd. (d).)

Defendants’ Request for Judicial Notice is GRANTED to Exhibits B and C. The court may properly take judicial notice of these municipal ordinances under Evidence Code section 452, subdivision (b). Although Plaintiffs object that Defendants incorrectly cite to section 452, subdivision (a), Plaintiffs acknowledge the correct subdivision and have not been prejudiced from this error. The court finds Plaintiffs’ remaining objections to these requests lack merit.

Leave to amend

Plaintiffs will have twenty days to file and serve a Second Amended Complaint, which runs from service of written notice of entry of order by Defendants. This extended time to amend is due in part to the pending Motion to Compel Arbitration and to Stay on calendar for July 31, 2026 which may affect whether or not an amendment is necessary.

Any party who contests a tentative ruling must email Dept20@sanmateocourt.org with a copy to all other parties by 4:00 p.m. stating, without argument, the portion(s) of the tentative ruling that the party contests.

If the tentative ruling is uncontested, it shall become the order of the Court. Thereafter, Counsel for the prevailing party shall prepare for the Court’s signature a written order consistent with the Court’s ruling pursuant to CRC Rule 3.1312 and provide written notice of the ruling to all parties who have appeared in the action, as required by law and by the CRC. Please note that Local Rule 3.403(b)(iv) states in part “prevailing party on a tentative ruling is required to prepare a proposed order REPEATING VERBATIM the tentative ruling” (emphasis added). The order should be filed or e-filed only, do not email or mail a hard copy to the Court.