This case was last updated from Los Angeles County Superior Courts on 09/17/2022 at 00:46:46 (UTC).

CRAIG CLEMENS VS EDENROCK/444 OCEAN, LLC, ET AL.

Case Summary

On 01/06/2021 CRAIG CLEMENS filed a Property - Construction Defect lawsuit against EDENROCK/444 OCEAN, LLC. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are DAVID J. COWAN, CHRISTOPHER K. LUI and ANN I. JONES. The case status is Pending - Other Pending.
Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    *******0371

  • Filing Date:

    01/06/2021

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Property - Construction Defect

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

DAVID J. COWAN

CHRISTOPHER K. LUI

ANN I. JONES

 

Party Details

Plaintiff

CLEMENS CRAIG

Cross Plaintiffs, Cross Defendants and Defendants

EDENROCK/444 OCEAN LLC

THE STANDARD OIL INVESTMENT GROUP

THE STANDARD OIL REALTY

APOLLO GLAZING CONTRACTORS INC.

DBR PREMIUM INC.

FLEXI-TECH CONTRACTING INC.

J.M.I. STEEL INC.

A-1 APEX PLUMBING INC.

AMERICAN RESTORE INC.

BULLDOG SHEET METAL & ROOFING INC.

C.G.S. CUSTOM GLASS SPECIALIST

CERTIFIED TILES

DIGITRONICS SECURITY SERVICES INC.

DRYTECH ENTERPRISE INC.

FIREPLACE GUYS INC.

FOES 1 THROUGH 25 INCLUSIVE

JOHNSON'S ROOFING SERVICE

MOES 1 THROUGH 20 INCLUSIVE

Not Classified By Court

GC & MANAGEMENT INC. ERRONEOUSLY SUED HEREIN AS THE STANDARD OIL REALTY

20 More Parties Available

Attorney/Law Firm Details

Plaintiff Attorney

KHAN AMJAD M.

Cross Plaintiff, Defendant and Not Classified By Court Attorneys

LEMKUL WILLIAM

MCNEILL TIMOTHY C.

MERSEREAU JOHN O.

LEMKUL WILLIAM ALLAN

SEIFEN MATTHEW R.

SEIFEN MATTHEW

FIELDS C. KERRY

Cross Plaintiff, Cross Defendant and Not Classified By Court Attorneys

FELDMAN IAN R.

GROSFELD ROBERT

EBNER DARREN M.

LE KAYLA P.

EUM MARGARET

LENKOV JEFFREY M.

LEMKUL WILLIAM

MCNEILL TIMOTHY C.

Cross Plaintiff and Cross Defendant Attorneys

FELDMAN IAN R.

GROSFELD ROBERT

EBNER DARREN M.

LE KAYLA P.

EUM MARGARET

LENKOV JEFFREY M.

BUCK RICHARD E.

JACOBS PAUL

MERSEREAU JOHN O.

O'BRIEN JILLISA L.

HAMMONS WALLACE W.

KRAUS MATTHEW J.

LEWIS ROSEMARIE S.

 

Court Documents

Proof of Service (not Summons and Complaint)

8/22/2022: Proof of Service (not Summons and Complaint)

Request for Dismissal

8/22/2022: Request for Dismissal

Notice of Attachment - NOTICE OF ATTACHMENT DISCLOSURES OF HON. JUDITH M. RYAN (RET.)

8/26/2022: Notice of Attachment - NOTICE OF ATTACHMENT DISCLOSURES OF HON. JUDITH M. RYAN (RET.)

Order - [PROPOSED] AMENDED CASE MANAGEMENT ORDER

6/24/2022: Order - [PROPOSED] AMENDED CASE MANAGEMENT ORDER

Order - Dismissal

6/20/2022: Order - Dismissal

Minute Order - MINUTE ORDER (CASE MANAGEMENT CONFERENCE; ORDER TO SHOW CAUSE RE: DISMISSAL...)

6/20/2022: Minute Order - MINUTE ORDER (CASE MANAGEMENT CONFERENCE; ORDER TO SHOW CAUSE RE: DISMISSAL...)

Substitution of Attorney

6/27/2022: Substitution of Attorney

Notice - NOTICE OF SETTING FURTHER CASE MANAGEMENT CONFERENCE

6/20/2022: Notice - NOTICE OF SETTING FURTHER CASE MANAGEMENT CONFERENCE

Minute Order - MINUTE ORDER (COURT ORDER RE: AMENDED CASE MANAGEMENT ORDER)

6/24/2022: Minute Order - MINUTE ORDER (COURT ORDER RE: AMENDED CASE MANAGEMENT ORDER)

Certificate of Mailing for - CERTIFICATE OF MAILING FOR (COURT ORDER RE: AMENDED CASE MANAGEMENT ORDER) OF 06/24/2022

6/24/2022: Certificate of Mailing for - CERTIFICATE OF MAILING FOR (COURT ORDER RE: AMENDED CASE MANAGEMENT ORDER) OF 06/24/2022

Case Management Statement

6/2/2022: Case Management Statement

Case Management Statement

6/2/2022: Case Management Statement

Case Management Statement

6/2/2022: Case Management Statement

Case Management Statement

6/3/2022: Case Management Statement

Case Management Statement

6/3/2022: Case Management Statement

Case Management Statement

6/6/2022: Case Management Statement

Case Management Statement

6/6/2022: Case Management Statement

249 More Documents Available

 

Docket Entries

  • 10/17/2022
  • Hearing10/17/2022 at 08:30 AM in Department 76 at 111 North Hill Street, Los Angeles, CA 90012; Order to Show Cause Re: Dismissal

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  • 10/17/2022
  • Hearing10/17/2022 at 08:30 AM in Department 76 at 111 North Hill Street, Los Angeles, CA 90012; Case Management Conference

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  • 10/17/2022
  • Hearing10/17/2022 at 08:30 AM in Department 76 at 111 North Hill Street, Los Angeles, CA 90012; Order to Show Cause Re: Entry of Default as to Non-Appearing Cross-Defendants who have been served

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  • 08/26/2022
  • DocketNotice of Attachment (DISCLOSURES OF HON. JUDITH M. RYAN (RET.)); Filed by Craig Clemens (Plaintiff)

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  • 08/22/2022
  • DocketRequest for Dismissal; Filed by Edenrock/444 Ocean, LLC (Cross-Complainant)

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  • 08/22/2022
  • DocketProof of Service (not Summons and Complaint); Filed by Edenrock/444 Ocean, LLC (Cross-Complainant)

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  • 06/27/2022
  • DocketSubstitution of Attorney; Filed by American Restore, Inc. (Cross-Defendant)

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  • 06/24/2022
  • Docketat 11:30 AM in Department 76, Christopher K. Lui, Presiding; Court Order

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  • 06/24/2022
  • DocketCertificate of Mailing for ((Court Order Re: Amended Case Management Order) of 06/24/2022); Filed by Clerk

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  • 06/24/2022
  • DocketMinute Order ( (Court Order Re: Amended Case Management Order)); Filed by Clerk

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266 More Docket Entries
  • 01/27/2021
  • Docketat 4:06 PM in Department 1, David J. Cowan, Presiding; Court Order

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  • 01/27/2021
  • DocketMinute Order ( (Court Order re: Reassignment to an Independent Calendar Court)); Filed by Clerk

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  • 01/27/2021
  • DocketNotice of Case Assignment - Unlimited Civil Case; Filed by Clerk

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  • 01/27/2021
  • DocketCertificate of Mailing for ((Court Order re: Reassignment to an Independent Calendar Court) of 01/27/2021, Notice of Case Assignment - Unlimited Civil Case Notice, First Amended General Order in Re LASC Mandatory Electronic Filing for Civil, Voluntary Efficient Litigation Stipula...); Filed by Clerk

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  • 01/21/2021
  • Docketat 2:46 PM in Department 11, Ann I. Jones, Presiding; Court Order

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  • 01/21/2021
  • DocketMinute Order ( (Court Order Re. Non-Complex Determination;)); Filed by Clerk

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  • 01/21/2021
  • DocketCertificate of Mailing for ((Court Order Re. Non-Complex Determination;) of 01/21/2021); Filed by Clerk

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  • 01/06/2021
  • DocketSummons (on Complaint); Filed by Craig Clemens (Plaintiff)

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  • 01/06/2021
  • DocketCivil Case Cover Sheet; Filed by Craig Clemens (Plaintiff)

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  • 01/06/2021
  • DocketComplaint; Filed by Craig Clemens (Plaintiff)

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Tentative Rulings

b'

Case Number: *******0371 Hearing Date: September 1, 2021 Dept: 76

Plaintiff alleges that Defendants failed to disclose numerous defects in the luxury home Plaintiff purchased from Defendants, which cost Plaintiff exorbitant amounts to repair.

Defendant Edenrock/444 Ocean, LLC demurs to the First Amended Complaint and moves to strike portions thereof.

Defendants GC & Management, Inc., erroneously sued herein as The Standard Oil Realty, and Prime Management and Development, LLC, erroneously sued herein as The Standard Oil Investment Group demur to the First Amended Complaint.

TENTATIVE RULING

Defendant Edenrock/444 Ocean, LLC’s demurrer to the First Amended Complaint is OVERRULED as to the fourth through seventh causes of action, and the motion to strike is DENIED in its entirety.

Defendants GC & Management, Inc., erroneously sued herein as The Standard Oil Realty, and Prime Management and Development, LLC, erroneously sued herein as The Standard Oil Investment Group’s demurrer to the First Amended Complaint is OVERRULED as to the fourth through seventh causes of action.

Defendants are ordered to answer the First Amended Complaint within 10 days.

Defendant Edenrock/444 Ocean, LLC’s Demurrer

Meet and Confer

The Declaration of John O. Mersereau reflects that Defendant satisfied the meet and confer requirement set forth in CCP ; 430.41.

Discussion

Defendant Edenrock/444 Ocean, LLC demurs to the First Amended Complaint (“1AC”) on the following grounds.

1. Fourth Cause of Action (Intentional Misrepresentation).

Plaintiff purchased the subject property from Defendant Edenrock/444 Ocean, LLC. (1AC, ¶ 11.)

Defendant argues that this cause of action is not pled with the requisite specificity and is uncertain.

“To establish a claim for deceit based on intentional misrepresentation, the plaintiff must prove seven essential elements: (1) the defendant represented to the plaintiff that an important fact was true; (2) that representation was false; (3) the defendant knew that the representation was false when the defendant made it, or the defendant made the representation recklessly and without regard for its truth; (4) the defendant intended that the plaintiff rely on the representation; (5) the plaintiff reasonably relied on the representation; (6) the plaintiff was harmed; and (7) the plaintiff\'s reliance on the defendant\'s representation was a substantial factor in causing that harm to the plaintiff. (Citations omitted.)” (Manderville v. PCG&S Group, Inc. (2007) 146 Cal.App.4th 1486, 1498 [italics omitted].)

Fraud must be pleaded with specificity rather than with “ ‘general and conclusory allegations.’ ” (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184 [132 Cal. Rptr. 2d 490, 65 P.3d 1255].) The specificity requirement means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made, and, in the case of a corporate defendant, the plaintiff must allege the names of the persons who made the representations, their authority to speak on behalf of the corporation, to whom they spoke, what they said or wrote, and when the representation was made. (Lazar v. Superior Court, supra, 12 Cal.4th at p. 645.)

We enforce the specificity requirement in consideration of its two purposes. The first purpose is to give notice to the defendant with sufficiently definite charges that the defendant can meet them. (Committee on Children\'s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216 [197 Cal. Rptr. 783, 673 P.2d 660].) The second is to permit a court to weed out meritless fraud claims on the basis of the pleadings; thus, “the pleading should be sufficient ‘ “to enable the court to determine whether, on the facts pleaded, there is any foundation, prima facie at least, for the charge of fraud.” ’ ” (Id. at pp. 216–217.)

(West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 793.)

Here, the 1AC alleges with specificity exactly what was said, when and in what manner (in writing), why such representations were known to be false when made, and Plaintiff’s reliance upon those representations which caused him out-of-pocket damage. (1AC, ¶¶ 53 – 63.)

“The sole issue raised by a general demurrer is whether the facts pleaded state a valid cause of action, not whether they are true. No matter how unlikely or improbable, plaintiff\'s allegations must be accepted as true for the purpose of ruling on the demurrer. (Citation omitted.) Furthermore, plaintiff\'s possible inability or difficulty in proving the allegations of the complaint is of no concern. (Citation omitted.)” (Kerivan v. Title Ins. & Trust Co. (1983) 147 Cal.App.3d 225, 229.)

This cause of action is sufficiently pled. In this regard, the fourth cause of action does not fail for uncertainty.

A demurrer for uncertainty is properly sustained where the complaint is so vague or uncertain that the defendant cannot reasonably respond, i.e., when the defendant cannot determine what issues must be admitted or denied, or what counts are directed against the defendant. (Khoury v. Maly\'s of California, Inc. (1993) 14 Cal.App.4th 612, 616; Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial, supra, ¶ 7:85.) Demurrers for uncertainty are disfavored and strictly construed “because ambiguities can reasonably be clarified under modern rules of discovery.” (Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1135.)

The demurrer to the fourth cause of action is OVERRULED.

2. Fifth Cause of Action (Negligent Misrepresentation).

Defendant argues that this cause of action is not pled with the requisite specificity and is uncertain.

‘’ “The elements of negligent misrepresentation are ‘(1) the misrepresentation of a past or existing material fact, (2) without reasonable ground for believing it to be true, (3) with intent to induce another\'s reliance on the fact misrepresented, (4) justifiable reliance on the misrepresentation, and (5) resulting damage.’ (Citation omitted.)” (National Union Fire Ins. Co. of Pittsburgh, PA v. Cambridge Integrated Services Group, Inc. (2009) 171 Cal.App.4th 35, 50.)

The same pleading specificity requirement applicable to fraud applies to pleading negligent misrepresentation. (Cadlo v. Owens-Illinois, Inc., (2004) 125 Cal.App.4th 513, 519.)

Here, the 1AC alleges with specificity exactly what was said, when and in what manner (in writing), why such representations were made without reasonable ground for believe them to be true, and Plaintiff’s reliance upon those representations which caused him out-of-pocket damage. (1AC, ¶¶ 71-81.) This cause of action is sufficiently pled.

In this regard, the fifth cause of action does not fail for uncertainty.

The demurrer to the fifth cause of action is OVERRULED.

3. Sixth Cause of Action (Fraudulent Concealment).

Defendant argues that this cause of action is not pled with the requisite specificity and is uncertain.

[T]he elements of a cause of action for fraud based on concealment are: “ ‘(1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage. [Citation.]’ [Citation.]” (Citation omitted.)

(Kaldenbach v. Mutual of Omaha Life Ins. Co. (2009) 178 Cal.App.4th 830, 850.)

Fraud causes of action must be pled with specificity. (Hills Transportation Co. v. Southwest Forest Ind., Inc. (1968) 266 Cal.App.2d 702, 707.) The complaint must allege facts as to “‘how, when, where, to whom, and by what means the representations were tendered.’" (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.) “The requirement of specificity in a fraud action against a corporation requires the plaintiff to allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Citations omitted.)” (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.)

Less specificity is required to plead fraud by concealment. (Jones v. ConocoPhillips Co. (2011) 198 Cal.App.4th 1187, 1199.) However, “[i]f a fraud claim is based upon failure to disclose, and ‘the duty to disclose arises from the making of representations that were misleading or false, then those allegations should be described.’ (Citation omitted.)” (Morgan v. AT&T Wireless Services, Inc. (2009) 177 Cal.App.4th 1235, 1262.)

Civil Code ; 1710(3)(deceit is defined to include “[t]he suppression of a fact, by one who is bound to disclose it, or who gives information of other facts which are likely to mislead for want of communication of that fact. . . .”)(bold emphasis added). In a misleading half-truth situation, where the defendant undertakes to provide some information, the defendant is “obliged to disclose all other facts which ‘materially qualify’ the limited facts disclosed. (See, e.g., Warner Constr. Corp. v. City of Los Angeles (1970) 2 Cal. 3d 285, 294 [85 Cal. Rptr. 444, 466 P.2d 996]; Rogers v. Warden (1942) 20 Cal. 2d 286, 289 [125 P.2d 7]; Low v. Wheeler (1962) 207 Cal. App. 2d 477, 484 [24 Cal. Rptr. 538]; Civ. Code, ; 1710, subd. 3 [deceit is the suppression of a material fact by one who gives misleading information of other facts]; 5 Witkin, Summary of Cal. Law, supra, Torts, ; 703, at p. 805, and cases cited.)” (Randi W. v. Muroc Joint Unified School Dist. (1997) 14 Cal.4th 1066, 1082.)

Here, the 1AC alleges with specificity exactly what was said, when and in what manner (in writing), why such representations were misleading or a half-truth because of a material omission, and Plaintiff’s reliance upon those representations which caused him out-of-pocket damage. (1AC, ¶¶ 87-101.) This cause of action is sufficiently pled.

In this regard, the sixth cause of action does not fail for uncertainty.

The demurrer to the sixth cause of action is OVERRULED.

4. Seventh Cause of Action (Real Estate Seller’s Common Law Nondisclosure of Material Facts).

Defendant argues that this cause of action is not pled with the requisite specificity and is uncertain.

A real estate seller has both a common law and statutory duty of disclosure. The court in Shapiro v. Sutherland (1998) 64 Cal.App.4th 1534, 1544 [76 Cal. Rptr. 2d 101], outlined the common law duty, explaining: “In the context of a real estate transaction, ‘[i]t is now settled in California that where the seller knows of facts materially affecting the value or desirability of the property … and also knows that such facts are not known to, or within the reach of the diligent attention and observation of the buyer, the seller is under a duty to disclose them to the buyer. [Citations.]’ [Citations.] Undisclosed facts are material if they would have a significant and measurable effect on market value. [Citation.]” A seller\'s duty of disclosure is limited to material facts; once the essential facts are disclosed a seller is not under a duty to provide details that would merely serve to elaborate on the disclosed facts. (Pagano v. Krohn (1997) 60 Cal.App.4th 1, 8–9 [70 Cal. Rptr. 2d 1].) Where a seller fails to disclose a material fact, he may be subject to liability “for mere nondisclosure since his conduct in the transaction amounts to a representation of the nonexistence of the facts which he has failed to disclose [citation].” (Lingsch v. Savage (1963) 213 Cal.App.2d 729, 736 [29 Cal. Rptr. 201].) Generally, whether the undisclosed matter was of sufficient materiality to have affected the value or desirability of the property is a question of fact. (Shapiro v. Sutherland, supra, at p. 1544; accord, Alexander v. McKnight (1992) 7 Cal.App.4th 973, 977 [9 Cal. Rptr. 2d 453].)

(Calemine v. Samuelson (2009) 171 Cal.App.4th 153, 161.)

Here, the 1AC alleges with specificity exactly what was said, when and in what manner (in writing), why Defendant knew of material facts unknown to Plaintiff which Defendant failed to disclose to Plaintiff, and Plaintiff’s reliance upon those representations which caused him damage. (1AC, ¶¶ 109-124.) This cause of action is sufficiently pled.

In this regard, the seventh cause of action does not fail for uncertainty.

The demurrer to the seventh cause of action is OVERRULED.

Defendant Edenrock/444 Ocean, LLC’s Motion To Strike

Meet and Confer

The Declaration of John O. Mersereau reflects that Defendant satisfied the meet and confer requirement set forth in CCP ; 435.5.

Discussion

Defendant Edenrock/444 Ocean, LLC move to strike the following portions of the First Amended Complaint:

1. “Plaintiff seeks punitive damages with respect to this Cause of Action because Defendants engaged in the aforementioned conduct, i.e., intentional misrepresentation of the facts set forth in paragraphs 53-59, with fraud.” p. 13, ¶ 66, lines 23-25.

2. “Plaintiff seeks punitive damages with respect to this Cause of Action because Defendants engaged in the aforementioned conduct, i.e., fraudulent concealment of the facts set forth in paragraphs 87-96, with fraud.” p. 22, ¶ 104, lines 24-26.

3. “Plaintiff seeks punitive damages with respect to this Cause of Action because Defendants engaged in the aforementioned conduct, i.e., failure to disclose the facts set forth in paragraphs 109-118, with fraud.” p. 28, ¶ 126, lines 10-13.

4. “Punitive Damages with respect to the Fourth, Sixth, and Seventh Causes of Action in amounts to be fixed at trial;” p. 31, lines 6-7.

The demurrer to strike is DENIED in its entirety.

As discussed above re: the demurrer, Plaintiff has sufficiently plead fraud as to the fourth through seventh causes of action. As such, Plaintiff has pled fraud, as that term is defined in Civil Code ; 3294(c) to mean “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.”

Plaintiff may conduct discover pertaining to evidence of intent, as well as the identity of the employee responsible for such fraud on behalf of a corporation, for purposes of Civil Code ; 3294(b).

Defendant is ordered to answer the First Amended Complaint within 10 days.

Defendants GC & and Prime Management, Inc.’s Demurrer

Meet and Confer

The Declaration of Matthew R. Seifin reflects that Defendants satisfied the meet and confer requirement set forth in CCP ; 430.41.

Discussion

1. Fourth Cause of Action (Intentional Misrepresentation); Fifth Cause of Action (Negligent Misrepresentation); Sixth Cause of Action (Fraudulent Concealment); Seventh Cause of Action (Real Estate Seller’s Common Law Nondisclosure of Material Facts).

Here, ¶ 6 of the 1AC alleges that Marc Bohbot and Steven Bohbot are the principals of demurring Defendants GC & Management, Inc., (erroneously sued herein as The Standard Oil Realty), and Prime Management and Development, LLC, (erroneously sued herein as The Standard Oil Investment Group) and that these demurring Defendants with the Bohbots as principals, were directly involved in the selling of the property to Plaintiff. Edenrock is now listed as a “cancelled” entity on the California Secretary of State’s website, with Marc Bohbot listed as agent of service of process on Standard Oil Realty’s (GC & Management, Inc.) address. (Id.) The 1AC alleges that, for purposes of alter ego, there is a unity of interest and ownership between and among demurring Defendants and Edenrock, such that it would be unfair for the acts for any one Defendant to be treated as those of the Defendant alone. (Id.) The 1AC alleges that Defendants are thus alter egos of each other and their identities are coextensive for purposes of this Complaint. (Id.)

Alter ego allegations may be pled generally and the principal factors for piercing the corporate veil may be alleged in conclusory terms and plaintiff may be given an opportunity to present evidence to support these allegations. (First Western Bank & Trust Co. v. Bookasta (1968) 267 Cal.App.2d 910, 914-16.)

It is sufficient that refusal to recognize unity of corporation and individual “will bring about inequitable results” (citation omitted). All that is required is a showing that it would be unjust to persist in recognition of the separate entity of the corporation (Citation omitted).

(Claremont Press Publishing Co. v. Barksdale (1960) 187 Cal.App.2d 813, 817.)

As such, the alter ego allegations are sufficiently pled against demurring Defendants which makes the allegations against Edenrock applicable to these demurring Defendants.

Defendant argues that this cause of action is not pled with the requisite specificity. For the reasons discussed above re: Edenrock’s demurer the fraud-based causes of action are pled with sufficient specificity. This argument is not persuasive.

Defendant also argues the Plaintiff’s claims are barred by the economic loss rule.

However, Plaintiff has alleged that the construction defects caused widespread leaking and toxic levels of mold, and required rebuilding of various parts of the property. This alleged damage to the property itself is not mere economic loss. (Stearman v. Centex Homes (2000) 78 Cal.App.4th 611, 617-618.) This argument is not persuasive.

Other courts in our jurisdiction have articulated the rule more definitively. For instance, Huang v. Garner, supra, 157 Cal. App. 3d 404 instructs, "[E]conomic loss [is] \'marked by the loss of the benefit of the bargain for the goods purchased, lost profits, and replacement costs for ineffective goods. Physical damage to property and personal injury, however, are not considered to be "economic loss." \' . . ." ( Id. at p. 420, citation omitted, italics added.) In Huang, it was "undisputed . . . that the court properly drew the line between economic and physical damages, determining the cost to repair structural and other alleged defects which had not actually caused physical damage to be economic damage." (Ibid., italics added.)

. . . [*618] . . .

Huang\'s definition and application of the economic loss rule, albeit in the context of a negligence theory, demonstrates defendant is just plain wrong in contending the physical damage to plaintiffs\' real property caused by defective construction of the foundation is only "an injury to the product itself," and thus barred by the economic loss rule of Seely. Huang does not stand alone. As we will discuss, other cases compel the conclusion that under California law, the physical damages to plaintiffs\' property are entirely distinct from economic losses and are thus recoverable in strict liability.

(Stearman v. Centex Homes (2000) 78 Cal.App.4th 611, 617-618.)

The demurrer to the fourth through seventh causes of action is OVERRULED.

Defendants are ordered to answer the First Amended Complaint within 10 days.

'


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