Terranova v. Simba Growth CA4/2 (2024) · DecisionDepot
Terranova v. Simba Growth CA4/2
California Court of Appeal Feb 16, 2024 No. E078764Unpublished
Filed 2/16/24 Terranova v. Simba Growth CA4/2 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
CLINT TERRANOVA,
Plaintiff, Cross-defendant, and E078764 Appellant, (Super. Ct. No. CVPS2102798) v. OPINION SIMBA GROWTH, LLC,
Defendant, Cross-complainant, and Respondent;
ANGEL GARCIA,
Defendant and Respondent.
APPEAL from the Superior Court of Riverside County. Ronald L. Johnson,
Judge. (Retired judge of the San Diego Super. Ct. assigned by the Chief Justice pursuant
to art. VI, § 6 of the Cal. Const.) Affirmed.
Law Office of Brian C. Unitt, and Brian C. Unitt, for Plaintiff, Cross-defendant
and Appellant.
1
Lewis Brisbois Bisgaard & Smith, and Wendy S. Dowse, Defendants, Cross-
complainant and Respondents.
I.
INTRODUCTION
Clint Terranova entered into a contract with Simba Growth, LLC, agreeing to sell
his property to Simba for $470,000. A week later, Terranova backed out of the agreement
because he learned the fair market value (FMV) of the property was $600,000. He then
sued Simba and its managing member, Angel Garcia, for various claims all sounding in
fraud. Simba and Garcia (collectively, Defendants) responded by filing a cross-complaint
against Terranova alleging one cause of action for specific performance. After Terranova
amended his complaint, the trial court sustained Defendants’ demurrer to Terranova’s
operative First Amended Complaint (FAC) without leave to amend. The trial court then
granted defendant’s motion for summary judgment on their cross-complaint and entered
judgment for them on the cross-complaint and the FAC.
Terranova appeals, and we affirm.
II.
FACTUAL AND PROCEDURAL BACKGROUND 1 A. The FAC’s Allegations and Defendants’ Demurrers
1 We assume the truth of the facts as alleged in the FAC unless contradicted by judicially noticeable facts. (Stevens v. Superior Court (1999) 75 Cal.App.4th 594, 601.)
2
Terranova owns a house on North Avenida Caballeros in Palm Springs. In March
2021, Armand Arello and Oscar (last name unknown) came to Terranova’s home and
discussed buying it on behalf of Simba. During the discussions, Arello and Oscar
represented the FMV of the property to Terranova. They explained that they worked
with a real estate agent (Garcia) and “their own market comparisons of other properties in
the area proved the [FMV]” of Terranova’s property.
Terranova later spoke with Garcia by phone. Garcia, as an agent of Simba,
offered to buy Terranova’s house for $470,000. Garcia explained that the offer was FMV
based on market comparisons that he and his staff had compiled, as well as his own
experience as an experienced real estate agent and his own market comparisons. Garcia
said that Terranova did not need to hire a real estate agent because Simba’s offer was
FMV and he would save money by not hiring an agent.
Terranova accepted Garcia’s offer and the parties entered into a purchase
agreement for Terranova to sell his property to Simba for $470,000. Terranova signed
the agreement with the understanding that, based on Garcia’s representations, the FMV
for the property was $470,000.
A few days after signing the purchase agreement, however, other parties contacted
Terranova and told him the FMV of the property was $600,000, or $130,000 more than
Garcia represented. Terranova thus determined that Garcia had lied to him about the
FMV of the property to induce him into selling it at a below-FMV price. Terranova
demanded that escrow be canceled, but Simba refused and moved forward with the sale.
3
Terranova responded by suing Defendants for (1) breach of the covenant of good
faith and fair dealing, (2) unjust enrichment, (3) fraud, and (4) rescission and cancellation
of instruments based on fraud. The thrust of the complaint and its four causes of action is
that Defendants fraudulently misrepresented the FMV of Terranova’s property.
Defendants demurred to the complaint. The trial court sustained the demurrer,
with leave to amend, because Terranova “failed to allege facts other than a representation
of the seller’s opinion of fair market value.”
Terranova then filed the operative FAC, alleging the same four causes of action
based on the same material allegations. Like the complaint, the thrust of the FAC and its
four causes of action is that Defendants fraudulently misrepresented the FMV of
Terranova’s property.
Defendants demurred again, arguing that the FAC failed to state a viable cause of
action because its four claims “are based solely on the allegation that [they] were
obligated to provide their opinion as to the fair market value of the parcel of real property
owned by [Terranova].” The trial court sustained the demurrer, this time without leave to
amend.
B. Cross-Complaint and Summary Judgment
While their first demurrer was pending, Defendants filed a cross-complaint against
Terranova alleging one cause of action for breach of contract and seeking specific
performance of the parties’ purchase agreement. After the trial court sustained their
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demurrer to the FAC without leave to amend, Defendants moved for summary judgment
on their cross-complaint.
Defendants argued in their summary judgment motion that Terranova breached the
purchase agreement—a valid and enforceable contract—by backing out of it during
escrow without justification. They presented evidence that Terranova had bought five
properties in the past, as well as text messages between him and Garcia from before their
phone conversation. During that exchange, Terranova said Garcia’s offering price of
between $430,000 and $530,000 was in Terranova’s “ballpark range.” Defendants also
submitted a declaration from Garcia stating that Simba offered $470,000 for Terranova’s
property, but the declaration did not mention anything about FMV beyond generically
stating that representations about FMV are opinions.
Terranova opposed the motion on several grounds, including that Garcia
fraudulently induced him to sign the purchase agreement by falsely representing the FMV
and that the agreement was invalid due to mutual and unilateral mistake. Terranova did
not dispute that the parties had entered into a contract, but argued that it was
unenforceable because of Garcia’s fraud and/or mistake.
Terranova submitted a declaration in support of his opposition largely mirroring
the FAC’s allegations. Among other things, Terranova declared that Garcia represented
that the FMV for the property was $470,000, and that Garcia reached this figure based on
his “experience in the area and expertise as a licensed professional.” Terranova thus
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signed the purchase agreement based on his understanding that Garcia’s offer accurately
reflected the property’s FMV.
In a supplemental declaration submitted with Defendants’ reply, Garcia stated that
he never told Terranova his opinion as to the FMV of Terranova’s property. Garcia
denied that anyone from Simba, including himself, would use their professional judgment
to determine the FMV of the property. Instead, Garcia (on behalf of Simba) only offered
to buy the property for $470,000. Garcia also denied that Armand and Oscar visited
Terranova’s property or spoke to him about selling it.
The trial court granted Defendants’ motion for summary judgment. The court
found that Defendants met their burden of proving Terranova breached the purchase
agreement, and then found that Terranova failed to prove a valid defense. In rejecting 2 Terranova’s fraudulent inducement defense, the court found that Garcia’s
representations as to the FMV of the property were not actionable as fraud because “a
statement regarding the fair market value of a property is only actionable as fraud if it is
accompanied by other material false misrepresentations,” and “[a] statement regarding
the fair market value of property by itself is not enough to support a claim for fraud.”
2 The trial court’s rulings on Terranova’s other defenses are not relevant because he has abandoned them on appeal.
6
The trial court thus entered judgment for Defendants on their cross-complaint and
the FAC. Terranova timely appealed.
III.
DISCUSSION
Terranova argues the trial court erroneously sustained the demurrer to the FAC
without leave to amend because (1) the FAC stated a valid claim for fraud and thus he
was entitled to rescission, and (2) he should have been granted leave to amend to allege
additional facts to support his claims and an additional cause of action under the unfair
competition law (UCL) (Bus. & Prof. Code, § 17200). He argues the trial court
erroneously granted summary judgment because (1) Defendants failed to plead and prove
adequacy of consideration, a necessary element for specific performance, and (2) there
are triable issues of fact as to his defense of fraud. We find no error and affirm.
A. Standards of Review
“‘On appeal from a judgment dismissing an action after sustaining a demurrer
without leave to amend, the standard of review is well settled. The reviewing court gives
the complaint a reasonable interpretation, and treats the demurrer as admitting all
material facts properly pleaded. [Citations.] The court does not, however, assume the
truth of contentions, deductions or conclusions of law.” (McAllister v. Los Angeles
Unified School Dist. (2013) 216 Cal.App.4th 1198, 1206.) When a trial court has
sustained a demurrer without leave to amend, “we decide whether there is a reasonable
possibility that the defect can be cured by amendment: if it can be, the trial court has
7
abused its discretion and we reverse; if not, there has been no abuse of discretion and we
affirm.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The plaintiff bears the burden of
proving the complaint may be amended to state a viable cause of action. (Dudley v.
Department of Transportation (2001) 90 Cal.App.4th 255, 259-260.)
“A party moving for summary judgment bears the burden of persuasion there is no
triable issue of material fact and is entitled to judgment as a matter of law. [Citation.]
We strictly construe the moving party’s affidavits and liberally construe the opposing
party’s affidavits. We accept as undisputed facts only those portions of the moving
party’s evidence that are not contradicted by the opposing party’s evidence.” (City of San
Diego v. Superior Court (2006) 137 Cal.App.4th 21, 25.) Thus, “[w]hen deciding
whether to grant summary judgment, the court must consider all of the evidence set forth
in the papers (except evidence to which the court has sustained an objection), as well as
all reasonable inferences that may be drawn from that evidence, in the light most
favorable to the party opposing summary judgment.” (Avivi v. Centro Medico Urgente
Medical Center (2008) 159 Cal.App.4th 463, 467.)
B. Demurrer to FAC
Defendants argued, Terranova agrees, and the trial court found that the FAC’s four
causes of action turn on Terranova’s allegation that Defendants fraudulently induced him
into signing the purchase agreement by misrepresenting the FMV of his property.
Terranova thus concedes (if implicitly) that the FAC’s claims, all of which sound in
fraud, rise and fall with that allegation. We agree with Defendants that the FAC fails to
8
state a viable claim for fraud, and thus the trial court properly sustained their demurrer to
the FAC.
The elements of fraud are: “‘(1) misrepresentation of a material fact (consisting of
false representation, concealment or nondisclosure); (2) knowledge of falsity (scienter);
(3) intent to deceive and induce reliance; (4) justifiable reliance on the misrepresentation;
and (5) resulting damage.’” (Bower v. AT&T Mobility, LLC (2011) 196 Cal.App.4th
1545, 1557.) “Fraud allegations ‘involve a serious attack on character’ and therefore are
pleaded with specificity. [Citation.] General and conclusory allegations are insufficient.
[Citation.]” (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.) The
normal policy of liberally construing pleadings against a demurrer will not be invoked to
sustain a fraud cause of action that fails to set forth such specific allegations. (Lazar v.
Superior Court (1996) 12 Cal.4th 631, 645.)
Defendants argue the FAC fails to allege sufficient facts to satisfy the first and
fourth elements of fraud (misrepresentation and justifiable reliance) because the
statements Garcia and Simba employees made about Terranova’s property’s FMV are
nonactionable opinions and, even if they made a misrepresentation, Terranova did not
justifiably rely on them. We agree on both points.
Expressions of opinion are generally not considered statements of fact and
therefore they usually cannot support a fraud claim. (Neu-Visions Sports, Inc. v.
seeks to assert a UCL claim against Defendants based on their alleged violations of these
statutes.
For the reasons outlined above, the FAC fails to allege facts suggesting that
Defendants’ representations were statements of fact, not their opinion. The FAC also
alleges no facts (and Terranova does not offer any he could allege) showing that
Defendants knew that their representations about the FMV value of Terranova’s property
were false or misleading. The FAC’s conclusory allegation that Defendants “had lied to”
Terranova about the property’s FMV to induce him to sell at a lower price is insufficient
to show that Defendants knowingly or intentionally made false representations, because
the allegation does not identify how Defendants knew their offer misrepresented the
property’s true FMV. (See Cansino v. Bank of America, supra, 224 Cal.App.4th at p.
1472; Goodman v. Kennedy (1976) 18 Cal.3d 335, 347 [conclusory allegations that
omissions were intentional and for the purpose of defrauding plaintiffs to purchase stock
3 Terranova’s opening brief first cites “subdivision (1)” of the statute, which does not exist. We assume he meant to cite subdivision (a). 4 These provisions state that the Real Estate Commissioner may, under certain circumstances, suspend or revoke a realtor’s license if the licensee is “guilty” of “(a) Making any substantial misrepresentation,” “(b) Making any false promises of a character likely to influence, persuade, or induce,” (c) “A continued and flagrant course of misrepresentation or making of false promises through licensees,” and “(g) The claiming or taking by a licensee of any secret or undisclosed amount of compensation, commission, or profit or the failure of a licensee to reveal to the buyer or seller contracting with the licensee the full amount of the licensee's compensation, commission, or profit under any agreement . . . .”
17
insufficient to state fraud claim].) Terranova’s proposed UCL claim turns on the same
general, conclusory, and insufficient allegations of fraud, and likewise fails to state a
viable claim under the UCL based on purported violations of Business and Professions
Code sections 10117.3 and 10176.
Because Terranova’s proposed UCL claim rests on the same premise as his
insufficiently pled fraud claims, and because he fails to show how he could plead
additional facts to cure these deficiencies and state a viable UCL claim, we conclude the
trial court properly denied him leave to amend. We therefore affirm the judgment
sustaining Defendants’ demurrer to the FAC without leave to amend.
C. Summary Judgment
The trial court granted summary judgment to Defendants on their cross-complaint
alleging one claim for breach of contract, finding that the parties had a valid contract (the
purchase agreement), Terranova breached it by refusing to go forward with the sale of his
property, and he had no valid defenses that would excuse his nonperformance or permit
him to rescind the contract. The court thus ordered specific performance of the purchase
agreement. We find no error.
Terranova effectively conceded in his opposition to Defendants’ summary
judgment motion that Defendants had met their initial burden of proving their breach of
contract claim. He instead raised various defenses to enforcing the contract, including
that (1) the contract was unenforceable due to fraud, bilateral mistake, and unilateral
mistake, (2) he was entitled to cancel the contract because it was a unilateral option to
18
purchase, and (3) Garcia violated his duty as Terranova’s agent. Terranova also argued
Defendants’ motion should be denied because their separate statement was deficient.
On appeal, Terranova argues for the first time that Defendants failed to meet their
initial burden because they did not plead and prove adequate consideration, which is a
necessary element for specific performance. He also reasserts his argument that the
purchase agreement is unenforceable because he was fraudulently induced into it by
defendants’ misrepresentations.
Terranova forfeited his adequate-consideration argument because he did not raise
it in the trial court. We therefore decline to consider it. (See DiCola v. White Brothers
Performance Products, Inc. (2008) 158 Cal.App.4th 666, 676.)
As for Terranova’s argument that defendants fraudulently induced him into
signing the purchase agreement, we conclude he failed to show a triable issue of material
fact.
A party to a contract may rescind the contract if that party was fraudulently
induced into it. (Civ. Code § 1689, subd. (b)(1); Hinesley v. Oakshade Town Center
(2005) 135 Cal.App.4th 289, 301.) Like a cause of action for fraud, the contract defense
of fraudulent inducement requires a showing of justifiable (reasonable) reliance.
(Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 974.) Whether a
plaintiff’s reliance was reasonable is a question of fact except when the undisputed facts
do not permit a reasonable difference of opinion. (West v. JPMorgan Chase Bank, N.A.
(2007) 214 Cal.App.4th 780, 794.)
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Even assuming Terranova’s version of events is accurate and that Defendants
misrepresented the FMV of his property to induce him to sell it at a discounted price, the
record shows that his reliance on their alleged misrepresentations was unreasonable as a
matter of law. A plaintiff’s experience, intelligence, and sophistication are relevant
factors in determining whether the plaintiff relied on a defendant’s misrepresentations.
(Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4th 1178, 1196.) Terranova has
bought at least five properties since 1995. He thus knew, or should have known, that the
sale of property—particularly when it involves a sale approaching half a million
dollars—is a significant transaction that requires each party to do its own due diligence.
Assuming Defendants made the representations Terranova claims they made, Terranova
unreasonably relied on them without doing any research into his own property’s FMV.
Terranova “knew or should have known the value of his own property before selling it.”
(Greif v. Sanin, supra, 74 Cal.App.5th at p. 433.)
Text messages between Terranova and Garcia reinforce our conclusion that
Terranova’s reliance on Defendants’ purported misrepresentations was unreasonable.
Garcia texted Terranova asking if he was interested in selling his property, to which
Terranova replied, “Which house are you making an offer on and how much?” Garcia
responded that he wanted to buy the Caballeros property and make an offer on it.
Terranova replied, “I am not looking to sell unless someone offers me a price that will
make me get out of bed. [¶] I get at least 3 offers a week on my house. If anything
might just talk to a real estate agent and put it on the market as is.” Garcia explained,
20
“As Investors we will pay for all the closing costs so you [won’t] have to worry about
tens of thousands of dollars in junk fees and commissions. Our offer would have to be in
the range of $430,000 - $530,000. Are we in your ballpark range?” Terranova replied,
“That seems within the ballpark since [I] would [have] put it up for 580k since people
like to talk down a little and then paid the fees myself.”
This exchange shows that Terranova (1) owned at least two properties at the time,
(2) people routinely made offers on his property before Defendants made theirs, (3)
$470,000 seemed like a fair price to Terranova, (4) he knew he would save money if he
sold the property without a real estate agent, and (5) he knew that property buyers
generally offer below the seller’s asking price. All of this suggests that Terranova knew
well how property sales usually work—including that buyers often want to pay less than
the seller asks—which makes his blind acceptance of Defendants’ offer and purported
representations about the property’s FMV all the more unreasonable.
Because we conclude Terranova’s reliance on Defendants’ alleged
misrepresentations was unreasonable as a matter of law, he failed to show that he was
fraudulently induced into the purchase agreement such that it was unenforceable or he
was entitled to rescind it. The trial court thus properly granted Defendants’ motion for
summary judgment and entered judgment for them on their cross-complaint.
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IV.
DISPOSITION
The judgment is affirmed. Defendants may recover their costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
CODRINGTON J.
We concur:
McKINSTER Acting P. J.
MENETREZ J.
22
AI Brief
AI-generated · verify before citing
Holding. The court held that representations regarding the fair market value of real property are generally nonactionable opinions rather than statements of fact, and that the plaintiff failed to establish justifiable reliance on such statements to support a fraud claim. Consequently, the court affirmed the dismissal of the complaint and the grant of summary judgment for specific performance on the cross-complaint.
Issues
Whether the trial court properly sustained a demurrer to the First Amended Complaint for fraud based on representations of fair market value.
Whether the trial court abused its discretion in denying leave to amend the complaint to add a claim under the Unfair Competition Law.
Whether the trial court properly granted summary judgment on the cross-complaint for specific performance of a real estate purchase agreement.
Disposition. Affirmed.
Quotations verified verbatim against the opinion
“Statements concerning a product’s value thus are generally nonactionable statements of opinion, not fact.”
“The FAC makes no allegations about other “facts, circumstances, or false representations” that suggest Defendants’ statements about the FMV of Terranova’s property were anything other than their opinion.”
“As pled in the FAC, Terranova’s reliance on Defendants’ statements about his property’s FMV was unreasonable as a matter of law.”