Clark J. Freitag, Inc. v. Anderson-Graves, LLC, et al.

9:00 25CV456740 Clark J. Freitag, Inc. Order on Cross-Defendant’s 1 v. Demurrer to Cross-Complainant’s Anderson-Graves, LLC, et al. First Amended Cross-Complaint

See Line 1 below for complete tentative ruling. After the hearing, the Court will prepare and file the formal order.

9:00 25CV460129 Cavalry SPV I, LLC, as Assignee Order on Plaintiff’s Motion for 2 of Citibank N.A. Judgment on the Pleadings in favor v. of Plaintiff Daljeet Kaur, et al.

See Line 2 below for complete tentative ruling. After the hearing, the Court will prepare and file the formal order.

9:00 25CV468818 Joel Weissbart Order on Defendant’s Demurrer 3 v. to the Complaint General Motors, LLC, et al.

See Line 3 below for complete tentative ruling. After the hearing, the Court will prepare and file the formal order.

9:00 24CV449054 Kellie Karen Stafford Order on Defendant’s Motion to 4 v. Compel Plaintiff’s Deposition Volkswagen Group of America and for Sanctions Inc., et al.

See Line 4 below for complete tentative ruling. After the hearing, the Court will prepare and file the formal order.

Line 1 Case Name: Clark J. Freitag, Inc. v. Anderson-Graves, LLC, et al. And Related Cross-Actions

Case No.: 25CV456740 Cross-Defendant Clark J. Freitag, Inc. (“Cross-Defendant”) demurs to the First Amended Cross-Complaint (“FAXC”) of Cross-Complainants Anderson-Graves, LLC, Sharon Crocker, Kristi Anderson Lambert, and Anastasia Crocker Robbins (“Cross- Complainants”) under Code of Civil Procedure Section 430.10(e) on the ground that the FACC fails to state facts sufficient to constitute a cause of action upon which relief can be granted. Notice of Demurrer (the “Demurrer”) at 1:26-2:5 (filed: Dec. 1, 2025).

The Demurrer came on for hearing on June 10, 2026, at 9:00 AM in Department 16. After reviewing all the papers and the record, and giving counsel for all parties the full and fair opportunity to be heard, the Court finds and rules as follows.

Background

Cross-Complainants Anderson-Graves, LLC (“Anderson-Graves”), Sharon Crocker (“Crocker”), Kristi Anderson Lambert (“Lambert”), and Anastasia Crocker Robbins (“Robbins”) (collectively, “Cross-Complainants”) bring this action against Cross- Defendant Clark J. Freitag, Inc. dba CF Commercial Real Estate Services (“Cross- Defendant”).

On January 17, 2025, Cross-Defendant filed the underlying action in this case. On February 28, 2025, it filed its First amended Complaint asserting claims for breach of contract, accounting, and declaratory relief.

On September 9, 2025, Cross-Complainants filed their initial Cross-Complaint, and then, on October 27, 2025, filed the operative FAXC.

The FAXC alleges Cross-Complainants owned commercial property (“the Property”) in San Jose, California. (FAXC, ¶ 2.) The previous tenants of the Property were paying $17,505 a month before vacating. (Ibid.) In 2009, Cross-Defendant contacted Anderson-Grave’s agent, Spencer Anderson (“Anderson”) because Cross-Defendant’s client (“the Client”) was interested in renting the Property. (Id. at ¶ 3.) Anderson agreed that Cross-Defendant could represent Cross-Complainants in the transaction and as a result, Crocker executed an Exclusive Authorization to Lease (“Authorization”) to negotiate the lease with the Client. (Id. at ¶ 5.) The Authorization’s terms, which included an extension from April 2009 to end of September 2009, authorized Cross-Defendant to negotiate leases and receive a commission for procurement of tenants or sale. (Id. at ¶¶ 6,

7, 9.) Nothing in the Authorization provided for a sales commission in the event of a sale after the expiration of the Authorization. (Id. at ¶¶ 8, 10.)

After entering into the Authorization, Cross-Defendant negotiated both sides of the transaction for Anderson-Graves as the lessor and the Client as the lessee despite no discussions of dual agency and having undisclosed conflicts of interest. (FAXC, ¶¶ 11, 12, 13.) Cross-Defendant shared Cross-Complainants’ confidential information to the Client and persuaded Cross-Complainants to accept lease terms that resulted in a lease below market value and other benefits to the Client. (Id. at ¶¶ 15, 16.) The negotiated lease was presented to Crocker to sign, who did not have experience with leases or managing commercial property without representation. (Id. at ¶ 17.) Cross-Defendant unilaterally amended the lease after it was signed to provide for a $50,000 credit for improvements that Cross-Complainants did not become aware of for several years. (Id. at ¶ 18.)

After the Authorization expired, Cross-Defendant had little involvement with the Property and did not assist with the eventual sale 14 years later. (FAXC, ¶¶ 19, 27, 29-30.)

Cross-Complainants filed their FAXC asserting the following claims:

1) breach of fiduciary duty;

2) breach of contract;

3) financial elder abuse;

4) negligence; and

5) declaratory judgment.

On December 1, 2025, Cross-Defendant filed its Demurrer to the first four claims in the FAXC. Cross-Complainants oppose the motion and Cross-Defendant filed a reply.

I. Cross-Defendants’ Demurrer to the FAXC

Cross-Defendant demurs generally to the first four claims on the ground they fail to state sufficient facts to constitute a cause of action under Code of Civil Procedure section 430.10, subdivision (e).

A. Cross-Defendant’s Request for Judicial Notice

Cross-Defendant requests judicial notice of the following:

1) Initial cross-complaint filed on September 9, 2025 (Exhibit A).

2) The FAXC (Exhibit B).

The request for judicial notice of Exhibit A is GRANTED as it supports Cross-

Defendant’s sham-pleading argument made in the Demurrer. (Deveny v. Entropin, Inc. (2006) 139 Cal.App.4th 408, 409 [policy against sham pleading allows for the court to take judicial notice of prior pleadings].) The request for judicial notice of Exhibit B is DENIED as unnecessary. (See Paul v. Patton (2015) 235 Cal.App.4th 1088, 1091, fn. 1 [“Judicial notice is unnecessary because, in our review of the demurrer ruling, we accept the allegations in the complaint and the facts in the exhibit as true”].)

B. Legal Standard on Demurrer

“The party against whom complaint or cross-complaint has been filed may object, by demurrer or answer as provided in [Code of Civil Procedure] section 430.30, to the pleading on any one or more of the following grounds: . . . (e) The pleading does not state sufficient facts to constitute cause of action.” (C.C.P. § 430.10(e))

“A demurrer tests only the legal sufficiency of the pleading. It 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.” (Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal. 3d 197, 213-214.) In ruling on demurrers, courts may consider matters subject to judicial notice. (Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal. App. 4th 743, 751.) Evidentiary facts found in exhibits attached to complaint can be considered on demurrer. (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94.)

Under California law, even if a demurrer is sustained, leave to amend the complaint is routinely granted. “Liberality in permitting amendment is the rule, if fair opportunity to correct any defect has not been given.” (Angie M. v. Superior Court (1995) 37 Cal. App. 4th 1217, 1227.) “Unless the complaint shows on its face that it is incapable of amendment, denial of leave to amend constitutes an abuse of discretion, irrespective of whether leave to amend is requested or not.” (McDonald v. Sup. Ct. (Flintkote Co.) (1986) 180 Cal. App. 3d 297, 303-304.)

C. Analysis on Demurrer

In support of its Demurrer, Cross-Defendant argues: 1) the first, second, third, and fourth causes of action are time barred; and 2) even if the claims are not time-barred, they still fail to allege required elements of the claims.

1. Statute of Limitations

“‘The defense of a statute of limitations may be asserted by general demurrer if the complaint shows on its face that the statute bars the action.’” (E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1315.) “There is an important qualification, however: ‘In order for the bar of the statute of limitations to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows merely that the action may be barred.’” (Id. at pp. 1315-1316.) “In assessing whether plaintiff’s claims against defendant are time-barred, two basic questions drive [the] analysis: (a) What statutes of limitations govern the plaintiff’s

claims? (b) When did the plaintiff’s causes of action accrue?” (Id. at p. 1316.) “The statute of limitations that applies to an action is governed by the gravamen of the complaint, not the cause of action pled.” (City of Vista v. Robert Thomas Sec. (2000) 84 Cal.App.4th 882, 889.)

The following statutes of limitations apply here:

1) For the first cause of action for breach of fiduciary duty: three years if the breach is fraudulent or four years if the breach is nonfraudulent. (American Master Lease LLC v. Idanta Partners, Ltd. (2014) 225 Cal.App.4th 1451, 1479.)

2) For the second cause of action for breach of a written contract: a four-year statute of limitations. (Eloquence Corp. v. Home Consignment Center (2020) 49 Cal.App.5th 655, 661.)

3) For the third cause of action for financial elder abuse: four years. (Wel. & Inst. Code, § 15657.7.)

4) For the fourth cause of action for negligence: a two-year statute of limitations. (Code Civ. Proc., § 339.).

Hence, a key question that the Court will now analyze for each cause of action is whether it accrued before the applicable statute of limitations expired.

a. The First Cause of Action for Breach of Fiduciary Duty Is Time-Barred.

“‘The elements of a cause of action for breach of fiduciary duty are the existence of a fiduciary relationship, its breach, and damage proximately caused by that breach.’” (Thomson v. Canyon (2011) 198 Cal.App.4th 594, 604.) Where damages are an element of a cause of action, the cause of action does not accrue until the damages have been sustained. (Ibid.; see also Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 397.) In this case, the alleged harm includes being trapped in a below-market rate lease for twenty years, not being informed of Cross-Defendant’s dual agency, and entering into an “illegal agreement” that resulted in damages including financial losses for more than fifteen years. (FAXC, ¶¶ 35-36, 38-39.)

Cross-Defendant acknowledges that the alleged misconduct is a lease set at a below-market rent resulting in diminished income. (Demurrer, p. 5:5-7.) It argues that the applicable statute of limitations expired years before the FAXC was filed because the alleged misconduct occurred in 2010 and Cross-Defendant was not involved in the sale of the property in 2023. (Id. at p. 5:7-8.) As a result, Cross-Defendant asserts that Cross- Complainants’ claims accrued in 2010 when Cross-Defendant presented the lease to Cross-Complainants. (Id. at p. 5:22-23.) It contends that the alleged harm was objectively discovered when the lease was executed and its terms became effective. (Id. at p. 5:23-25.) Cross-Defendant asserts that the FAXC itself alleges that the prior tenant was paying $17,505 in monthly rent, while the new lease provided rent at $10,000 per month. (Id. at

p. 5:25-28, citing FAXC, ¶¶ 2, 16.) This argument is not persuasive. (See Schneider v. Union Oil Co. (1970) 6 Cal.App.3d 987, 994 [“where a fiduciary relationship exists, facts that would ordinarily require investigation do not give rise to a duty of inquiry. . . . Actual knowledge or notice was required in order to start the running of the statute of limitations. In the instant case, the complaint alleged that plaintiff had no notice or knowledge . . .”].)

Finally, Cross-Defendant asserts a sham pleading argument, arguing that even if the claims did not accrue in 2010, they accrued no later than 2020 when Cross- Complainants’ manager reviewed the lease and discovered the terms now alleged to be wrongful. (Demurrer, p. 6:10-14, citing RJN, Ex. A, ¶ 17.) Cross-Defendant contends that these allegations were removed from the amended pleading and were replaced with allegations that Cross-Complainants did not discover the alleged wrongdoing until January 17, 2025. (Id. at p. 6:19-22, citing FAXC, ¶ 32.)

In opposition, Cross-Complainants contend that the original cross-complaint does not allege that they realized in 2020 that the rent was below market value, but does allege that they were unaware Cross-Defendant had unilaterally amended the lease. (Opposition, p. 6:13-22, citing Cross-Defendant’s RJN, Ex. A, ¶¶ 14, 21.)

The original Cross-Complaint alleges that Anderson and Crocker became aware they had been taken advantage of after Kristi Lambert took over as manager in September 2019 and preparation to sell the Property began in 2020. (RJN, Ex. A, ¶¶ 14, 17.) The pleading further alleges that in 2019, Anderson-Graves received inquiries about purchasing the Property but the potential buyer “decided not to make an offer on the Property because of the terrible terms of the below market rent negotiated by Cross- Defendant and because that rent would be ongoing for years due to multiple extensions locking in that rent made the Property undesirable.

Those extensions were also negotiated by Cross-Defendant. This is the lease that Cross-Defendant had negotiated ostensibly on behalf of Cross-Complainants, but which in actuality benefited his other client . . . far more.” (Id. at ¶ 16.) Finally, the cross-complaint alleges that at that time (in 2020), Kristi Lambert learned Anderson-Graves was taken advantage of and “Cross-Defendant was nowhere to be found to offer counsel and protect Cross-Complainants’ interests.” (Id. at ¶ 19.) But the FAXC alleges that Cross-Complainants did not discover any of their causes of action against Cross-Defendant until Cross-Defendant filed its lawsuit against them on January 17, 2025; the prior allegations have been omitted.

Where a party “files an amended complaint and seeks to avoid the defects of a prior complaint either by omitting the facts that rendered the complaint defective or by pleading facts inconsistent with the allegations of prior pleadings. . . . the policy against sham pleading permits the court to take judicial notice of the prior pleadings and requires that the pleader explain the inconsistency.” (Owens v. Kings Supermarket (1988) 198 Cal.App.3d 379, 384.) Critically, “[i]f [it] fails to do so the court may disregard the inconsistent allegations and read into the amended complaint the allegations of the superseded complaint.” (Ibid.) Here, while allegations of potential sales are still present in the FAXC, Cross-Complainants have removed allegations pertaining to discovering they were taken advantage of and learning of the below-market rent at the time a potential

buyer backed out of the sale. (See Metabyte, Inc. v. Technicolor S.A. (2023) 94 Cal.App.5th 265, 280 [a plaintiff has reason to discover a cause of action when it has reason to suspect a factual basis for its elements].) The claim that they did not realize they were taken advantage of until Cross-Defendant filed the underlying pleading is not persuasive given the allegations that at least by 2020, Cross-Complainants could have made efforts to find out what was going on with the lease. Without explanation of this omission, the Court is persuaded by Cross-Defendant’s sham pleading argument. As a result, based on the allegations in the Cross-Complaint, the breach-of-fiduciary-duty claim began accruing by at least 2020 and is therefore time-barred.

Accordingly, the Demurrer to the First Cause of Action is SUSTAINED.

b. The Second, Third, and Fourth Causes of Action Are Time-Barred. As explained above, the second and third causes of action for breach of contract and financial elder abuse have a four-year statute of limitations, and the fourth claim for negligence has a two-year statute of limitations. Each claim is time-barred.

A breach of contract claim accrues at the time of the breach. (Church v. Jamison (2006) 143 Cal.App.4th 1568, 1583.) Here, the alleged breach occurred when the lease that Cross-Defendant negotiated between the parties served the Client “far more than it served Cross-Complainants.” (FAXC, ¶ 43.) Thus, given that the parties entered in the Authorization in 2009 (FAXC, ¶11) and the terms of this contract ran from April 2009 until September 2010 (FAXC, ¶ 6), this breach of contract claim is time-barred.

A financial elder abuse claim accrues at the time the Cross-Complainants discovered, or through exercise of reasonable diligence should have discovered, the facts constituting the financial abuse. (See Wel. & Inst. Code, § 15657.7.) For the same reasons explained above as the first cause of action for breach of fiduciary duty, the third cause of action is also time-barred because the prior cross-complaint indicates that at least by 2020, Cross-Complainants could have made efforts to find out what was going on with the lease.

Finally, a negligence claim accrues when the claim is complete with all of its elements. (See Siegel v. Anderson Homes, Inc. (2004) 118 Cal.App.4th 994, 1011.) Here, like above, Cross-Complainants became aware they were harmed at least by 2020. Thus, the negligence claim is also time-barred.

Accordingly, the Demurrer to the second through fourth claims is SUSTAINED.

2. The Demurrer to the First, Second, Third, and Fourth Cause of Action is Sustained Without Leave to Amend.

Having sustained the Demurrer for the reasons explained above, the remaining but important question is whether the Court should sustain the Demurrer with or without leave to amend the pleading.

For leave to amend, the pleading party “bears the burden of proving there is a reasonable possibility of amendment.” (Rakestraw v. California Physicians’ Service (2000) 81 Cal.App.4th 39, 43 (Rakestraw).) To satisfy this burden, the party “must show in what manner [it] can amend [its] complaint and how that amendment will change the legal effect of [its] pleading.” (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349). Moreover, under the sham pleading doctrine, Cross-Complainants cannot amend to omit or change harmful allegations without explanation from previous pleadings to avoid attacks raised in demurrers.

Here, as explained above, the Court found persuasive the sham pleading argument asserted by Cross-Defendant. Further, Cross-Complainants have not carried their burden to explain the omissions or how any additional amendments will change the legal effect of their pleading. (See Hendy v. Losse (1991) 54 Cal.3d 723, 742- 743 [affirming an order sustaining defendants’ demurrer without leave to amend when the plaintiff filed an amended complaint omitting harmful allegations from the original complaint].)

Accordingly, under these facts and circumstances, the Court exercises its discretion to DENY leave to amend. (See Shaeffer v. Califia Farms, LLC (2020) 44 Cal.App5th 1125, 1145 [“The onus is on the plaintiff to articulate the ‘specifi[c] ways’ to cure the identified defect, and absent such an articulation, a trial or appellate court may grant leave to amend ‘only if a potentially effective amendment [is] both apparent and consistent with the plaintiff’s theory of the case.’”].)

Conclusion and Order

For the reasons explained above, the Demurrer of Cross-Defendant Clark J. Freitag, Inc. to the First, Second, Third, and Fourth Causes of Action of the First Amended Cross-Complaint of Cross-Complainants Anderson-Graves, LLC, Sharon Crocker, Kristi Anderson Lambert, and Anastasia Crocker Robbins under Code of Civil Procedure Section 430.10(e) is SUSTAINED WITHOUT LEAVE TO AMEND.

SO ORDERED.

Date: June 10, 2026 Hon. Vincent I. Parrett Superior Court of the State of California, County of Santa Clara

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