Demurrer
Kelly Hosey v. Jay Bond, et al., 25CV-0754
Hearing: Demurrer
Date: August 13, 2026
This action arises from the sale of a house. Kelly Hosey (Plaintiff) alleges she purchased the house from sellers Habib Tabrizi and Kelly Marie Jafari-Tabrizi (Sellers) and that Sellers and their real estate agents Jay Bond and EXP Realty of California, Inc. (Selling Agents) failed to disclose and concealed that the San Luis Obispo County Department of Planning and Building opened a code enforcement case – case number CODE2023 00069 (Enforcement Case) against Sellers identifying multiple violations and demanding that the violations be corrected by Sellers. Plaintiff alleges causes of action for failure to disclose, fraud, negligent misrepresentation, and negligence against Selling Agents.
Before the Court is Selling Agents’ demurrer to each cause of action against them on the ground that the allegations fail to state sufficient facts to state a cause of action.
I.
Legal Standard
A demurrer tests the legal sufficiency of the allegations in a complaint. It raises issues of law, not fact, regarding the complaint’s form or content. (Code Civ. Proc., §§ 422.10, 589; Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994; Lewis v. Safeway (2015) 235 Cal.App.4th 385, 388.) A demurrer “admits the truth of all material factual allegations in the complaint...the question of plaintiff’s ability to prove these allegations, or the possible difficulty in making such proof, does not concern the reviewing court.” (Alcorn v. Anbro Engineering, Inc. (1970) 2 Cal.3d 493, 496.)
II.
Discussion
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Selling Agents argue that the Complaint does not state a cause of action against them because the mere conclusory statement that Selling Agents knew of the Enforcement Case is not supported by allegations of how Selling Agents purportedly had such knowledge.
Plaintiff contends that the demurrer fails because the Complaint “expressly alleges that Bond and his brokerage actually knew San Luis Obispo County had opened an active Code Enforcement Case against the Property before the close of escrow (Comp. ¶¶ 14; Exh. E).” (Opposition, p. 3, lns. 1-4.) Paragraph 14 of the Complaint states as follows:
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.
(Emphasis added.)
Exhibit E to the Complaint is a series of planning department communications regarding the code enforcement action. Plaintiff identifies no mention of the Seller Agents in Exhibit E and the Court finds none. Thus, the sole allegation that Seller Agents knew of the Enforcement Action is the above-highlighted allegation on information and belief.
Fraud must be plead with specificity, and a conclusory allegation that a defendant had knowledge of facts that should have been disclosed is insufficient to state a cause of action. (Woodring v. Basso (1961) 195 Cal.App.2d 459, 464–65 [allegations concerning fraud through nondisclosure made upon information and belief are insufficient without a statement of facts upon which the belief is founded]; Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1472 [conclusory statement that defendant knew a statement was false without allegation as to how defendant knew its falsity is insufficient].)
A real estate agent must have actual knowledge of a material fact affecting the value or desirability of the property before he or she can be liable for failing to disclose the material fact. (Assilzadeh v. California Fed. Bank (2000) 82 Cal.App.4th 399, 410.) Civil Code section 2079 does not require a seller’s agent to independently verify or disclaim the accuracy of the seller’s representations to the buyer. “In making the required disclosures, the sellers’ agent is required only to act in good faith and not convey the sellers’ representations without a reasonable basis for believing them to be true.” (Robinson v. Grossman (1997) 57 Cal.App.4th 634, 643–44.)
Here, the Complaint incorporates the written seller disclosures which acknowledge that unpermitted work such as converting a garage to a living space and adding a kitchen and bathroom were conducted without permits by unlicensed workers. (Complaint, ¶¶ 15, 16; Exh. D, p. 5 [“Upstairs was renovated without permits. Primary bathroom added downstairs no permit.” “The upstairs unit in the house was separated from downstairs and remodeled with no permits. Stove, refrigerator, and sink added upstairs with no permit. Master suite downstairs had added bathroom, done with no permit.”].) There is no indication or allegation the code enforcement documents attached to the Complaint were sent to or shown to the Seller Agents.
The Complaint fails to state a cause of action against the Seller Agents.
III. Ruling
The demurrers to the Third, Fourth, Fifth, and Sixth Causes of Action against Seller Agents are sustained with leave to amend. Plaintiffs are directed to file an amended complaint within fifteen (15) days from service of notice of ruling. Seller Agents are directed to serve the notice of ruling. (Code Civ. Proc., § 1019.5.)
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