BETHANY ESTRADA vs COLDWELL BANKER REALTY, et al.

Analysis:

2025CUCO050634: BETHANY ESTRADA vs COLDWELL BANKER REALTY, et al.

A. DEMURRER

The grounds for a demurrer must appear on the face of the pleading or from judicially noticeable matters. (Code Civ. Proc., § 430.30, subd. (a); Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) Concerning the legal sufficiency of a pleading, the sole issue on demurrer is whether the facts pleaded, if true, state a valid cause of action – i.e., if the complaint pleads facts that would entitle the plaintiff to relief. (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 339.) It is an abuse of discretion to sustain a demurrer without leave to amend if there is a reasonable probability that the defect can be cured by amendment. (Schifando v.

City of Los Angeles (2003) 31 Cal.4th 1074, 1081.) A general demurrer admits the truth of all factual, material allegations properly pled in the challenged pleading, regardless of possible difficulties of proof. (Blank, supra, 39 Cal.3d at p. 318.) Thus, no matter how unlikely or improbable, plaintiff’s allegations must be accepted as true for the purpose of ruling on the demurrer. (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604.) Nevertheless, this rule does not apply to allegations expressing mere conclusions of law, or allegations contradicted by the exhibits to the complaint or by matters of which judicial notice may be taken. (Vance v.

Villa Park Mobilehome Estates (1995) 36 Cal.App.4th 698, 709.) A general demurrer does not admit contentions, deductions, or conclusions of fact or law alleged in the complaint; facts impossible in law; or allegations contrary to facts of which a court may take judicial notice. (Blank, supra, 39 Cal.3d at p. 318.)

1. Statute of Limitations: “A demurrer based on a statute of limitations will not lie where the action may be, but is not necessarily, barred. In order for the bar to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint [and matters subject to judicial notice]; it is not enough that the complaint shows that the action may be barred.” (Richtek USA, Inc. v. uPI Semiconductor Corp. (2015) 242 Cal.App.4th 651, 658, citations omitted.) Civil code section 2079 states: (a) It is the duty of a real estate broker or salesperson, licensed under Division 4 (commencing with Section 10000) of the Business and Professions Code, to a prospective buyer of residential real property improved with one to four dwelling units or a manufactured home as defined in Section 18007 of the Health and Safety Code, to conduct a reasonably competent and diligent visual inspection of the property offered for sale and to disclose to that prospective buyer all facts materially affecting the value or desirability of the property that an investigation would reveal, if that broker has a written contract with the seller to find or obtain a buyer or is a broker who acts in cooperation with that broker to find and obtain a buyer. “[S]ection 2079 confirms the common law recognition of fiduciary duties brokers owe their own clients, which in context may require more than the cursory type of visual inspection required of sellers’ brokers to benefit non-client buyers.” (Field v.

Century 21 Klowden-Forness Realty (1998), 63 Cal. App. 4th 18, 27.) Civil Code section 2079.16 sets forth the contents of the disclosure form articulating the nature of the real estate agency relationship.

2025CUCO050634: BETHANY ESTRADA vs COLDWELL BANKER REALTY, et al.

Here, Defendants were the sellers’ brokers and, as such, their duty of care was limited to a visual inspection. The FAC does not adequately allege that Defendants owed a duty of care to Plaintiff beyond a visual inspection. Civil Code section 2079.4 provides that: “In no event shall the time for commencement of legal action for breach of duty imposed by this article exceed two years from the date of possession, which means the date of recordation, the date of close of escrow, or the date of occupancy, whichever occurs first.” Defendants argue that the two-year statute of limitations of §2079.4 applies to every cause of action alleged against them because all of Plaintiff’s claims are based on the alleged failure to properly disclose a separate homeowner’s assessment and costs, with the fifth cause of action specifically based on an alleged violation of Civil Code § 2709. (FAC ¶¶ 31, 40, 48, 55, 62, 65.)

At a minimum, the FAC’s fifth cause of action under §2079 is time-barred. Plaintiff’s opposition admits that “clear and consolidated disclosure of the combined HOA obligations did not occur until immediately prior to closing, including through closing disclosures and settlement documents transmitted on or about September 12-13, 2022.” Accordingly, Plaintiff had two years from the date escrow closed (¶23), or until September 13, 2024, to bring a statutory claim against a broker/agent for violation of the broker/agent’s duties of disclosure.

Plaintiff’s Complaint was not filed until September 12, 2025 and therefore the fifth cause of action for statutory violation of disclosure duties is time-barred on its face. As to any remaining causes of action that are derived or stem from an alleged duty under section 2079, they are also barred. (See Loken v. Century 21 (1995) 36 Cal.App.4th 263, 272 [“where the [other] cause of action is derived from the duty to inspect and disclose under section 2079, there can be no question that it falls within the two-year limitation period of section 2079.4.”].)

As alleged, the second (negligent misrepresentation) and fourth (failure to disclose) causes of action appear to stem/derive from the same alleged duty to inspect and investigate that Plaintiff claims was breached. (See FAC ¶¶ 31, 48.) Plaintiff appears to rely on the required visual inspection to obligate Defendants to discover the fact that there were two HOA fees. Plaintiff identifies no other cognizable duty or basis for her claims. Likewise, the seventh cause of action for Unfair Competition, and the eighth cause of action for Common Counts, both appear to arise out of the same alleged duty (see ¶¶ 62, 65), and the Court therefore also finds those claims to be time-barred.

In sum, the Court finds that the FAC’s second, fourth, fifth, seventh and eighth causes of action are based upon Civil Code section 2079.4 and the demurrer to these claims is sustained without leave to amend because the claims are time-barred.

2. Fraud

All fraud claims must be plead with particularity. (Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248.) The FAC does not allege with particularity Plaintiff’s reasonable reliance, resulting damages, or the causal connection between the two. Plaintiff alleges she received the HOA documents on August 23, 2022, ¶¶14-17, well before closing escrow on September 13, 2022. The FAC alleges, at ¶14, that the documents sent to Plaintiff showed two assessments. (Ex. F1 and F2 to the FAC.) Plaintiff asserts that based upon the MLS, Zillow, and Haertle representations, she believed there was only one HOA fee. The HOA fee is designated

2025CUCO050634: BETHANY ESTRADA vs COLDWELL BANKER REALTY, et al.

on the MLS as “HOA 1” and there are no allegations that Defendants are responsible for Zillow, nor that the Defendants are responsible for what Mr. Haertle said. Plaintiff concedes that she was on notice of the possibility of two HOAs and took steps to confirm the HOAs by doing her own research and talking to her agent. The FAC fails to allege facts showing that reliance on Defendants, given her doubts, concerns and assurances from someone other than Defendants, was reasonable. Defendants’ role, and/or connection to Haertle, is not alleged and there is no allegation that Defendants took any action after escrow sent the two separate HOA dues documents to mislead or confuse Plaintiff.

The two HOAs informed Plaintiff of the amounts due and Plaintiff was in a position to verify the information as well as Defendants were; and they had no statutory obligation to do so (other than arguably § 2079, for which Plaintiff’s claims are time barred). To the extent that the claims are based on concealment, there is no duty alleged. It appears that Plaintiff is unable to plead facts that could salvage her fraud-based claims, which are Plaintiff’s first, second, and fourth causes of action.

The Court sustains the demurrer to these claims without leave to amend on this additional ground.

3. Other grounds for demurrer The fifth cause of action for Violation of Civil Code §2079 fails to allege how the HOA fees would be revealed by a visual inspection, and the demurrer to this claim is independently properly sustained on this ground as well. The seventh cause of action for Unfair Competition is subject to demurrer because Plaintiff fails to plead standing or unlawful or fraudulent conduct. (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 322, 326; Cal. Bus. & Prof. Code § 17204.).

Finally, the eighth cause of action for Common Counts fails on the independent ground that Defendants did not receive money from Plaintiff. B. MOTION TO STRIKE 1. Punitive Damages To obtain punitive damages against an individual, the plaintiff must, by clear and convincing evidence, prove that the defendant has been guilty of oppression, fraud, or malice. (Civ. Code, § 3294, subd. (a).) “The mere allegation an intentional tort was committed is not sufficient to warrant an award of punitive damages.” (Grieves v.

Superior Court (1984) 157 Cal.App.3d 159, 166.) “Not only must there be circumstances of oppression, fraud or malice, but facts must be alleged in the pleading to support such a claim.” (Ibid.) Conclusory allegations that a defendant’s conduct is intentional, willful, or fraudulent constitute a “patently insufficient statement of ‘oppression, fraud, or malice, express or implied,’ within the meaning of section 3294.” (Brosseau v. Jarrett (1977) 73 Cal.App.3d 864, 872.) “’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.” (Id., subd. (c)(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.” (Id., subd. (c)(3).)

2025CUCO050634: BETHANY ESTRADA vs COLDWELL BANKER REALTY, et al.

To obtain punitive damages against a corporation, based on the acts of an employee, the plaintiff must prove that the employer had advance knowledge of the employee’s unfitness and employed him in conscious disregard of the rights or safety of others; or ratified the wrongful conduct; or was personally guilty of oppression, fraud, or malice. (Code Civ. Proc., § 3294, subd. (b).) Further, “the advance knowledge and conscious disregard, authorization, ratification or act of oppression, fraud, or malice must be on the part of an officer, director, or managing agent of the corporation.” (Ibid.) “A company ratifies a managing agent’s decision when it knows about and accepts the decision.” (Tilkey v.

Allstate Ins. Co. (2020) 56 Cal. App. 5th 521, 554.) The motion to strike is moot in light of the ruling on demurrer. Had the Court ruled on the merits of the motion to strike, it would be GRANTED without leave.

5