ERIK LUDWICK, INDIVIDUALLY AND AS TRUSTEE AND BENEFICIARY OF THE ANYTHING TRUST DATED OCTOBER 12, 2007 VS MADISON HILDEBRAND, ET AL.

Tentative Rulings

Case Number: *******5331 Hearing Date: February 17, 2022 Dept: 54

Hearing Date: February 17, 2022

Department 54, Judge Maurice Leiter

Demurrer to Third Amended Complaint and Motion to Strike

Moving Party: Defendants Partners Trust Real Estate Brokerage & Acquisitions, Pacific Union International, Inc., Madison Hildebrand, Malibu Life, Inc., Nick Segal, Samuel Kraemer, Gina Kirkpatrick, and Jennifer Chrisman

Responding Party: Plaintiff Erik Ludwick

T/R: DEFENDANTS’ DEMURRER AS TO PACIFIC UNION IS SUSTANIED WITHOUT LEAVE TO AMEND.

DEFENDANTS’ DEMURRER TO THE SEVENTH CAUSE OF ACTION IS SUSTAINED WITHOUT LEAVE TO AMEND.

DEFENDANTS’ MOTION TO STRIKE IS DENIED.

DEFENDANTS TO FILE AND SERVE ANSWERS TO THE THIRD AMENDED COMPLAINT WITHIN 15 DAYS OF NOTICE OF RULING.

DEFENDANTS TO NOTICE.

The Court considers the moving papers, opposition and reply.

BACKGROUND

On July 19, 2019, Plaintiff Erik Ludwick, individually and as Trustee and Beneficiary of "the Anything Trust" dated October 12, 2007, sued Defendants Partners Trust Real Estate Brokerage & Acquisitions, Pacific Union International, Inc., Madison Hildebrand, Malibu Life, Inc., Nick Segal, Samuel Kraemer, Gina Kirkpatrick, and Jennifer Chrisman. The operative Second Amended Complaint (“SAC”) alleges causes of action for (1) breach of Civil Code 2079.16; (2) breach of fiduciary duty; (3) fraud and deceit; (4) intentional interference with prospective contractual relationship and/or economic advantage; (5) negligent interference with prospective contractual relationship and/or economic advantage; (6) professional negligence; (7) breach of contract; (8) breach of Civil Code 17200; (9) declaratory relief as to illegality of contract; and (10) declaratory relief as to commission owed.

This action arises out of the sale of real property located at 200 Topoya Drive, Pacific Palisades, CA 90272. Plaintiff, the seller, alleges that Defendants, Plaintiff’s brokers, improperly acted as dual agents of Plaintiff and the buyer to obtain a higher commission.

REQUESTS FOR JUDICIAL NOTICE

Defendants’ requests for judicial notice of exhibits A, B, C, and E are GRANTED as to the existence of documents, but not as to the truth of the matters asserted therein. (Evid. Code 452(d); Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375.). Defendants’ request for judicial notice of exhibit D is DENIED as a matter not subject to judicial notice.

ANALYSIS

A demurrer to a complaint may be taken to the whole complaint or to any of the causes of action in it. (CCP 430.50(a).) A demurrer challenges only the legal sufficiency of the complaint, not the truth of its factual allegations or the plaintiff's ability to prove those allegations. (Picton v. Anderson Union High Sch. Dist. (1996) 50 Cal. App. 4th 726, 732.) The court must treat as true the complaint's material factual allegations, but not contentions, deductions or conclusions of fact or law. (Id. at 732–33.) The complaint is to be construed liberally to determine whether a cause of action has been stated. (Id. at 733.)

A. The TAC as to Defendant Pacific Union

Defendants demur to the TAC as to Defendant Pacific Union on the grounds that any causes of action against Pacific Union should have been brought as a compulsory cross-complaint in Pacific Union’s action in Placer County under CCP 426.30. Defendants assert that the claims are barred.

The Court of Appeal has addressed CCP 426.30 as follows:

Section 426.30, subdivision (a), provides that “if a party against whom a complaint has been filed and served fails to allege in a cross-complaint any related cause of action which (at the time of serving his answer to the complaint) he has against the plaintiff, such party may not thereafter in any other action assert against the plaintiff the related cause of action not pleaded.” As used in the compulsory cross-complaint statute, the term “complaint” includes both a complaint and cross-complaint ( 426.10, subd. (a)), and the term “plaintiff” includes both a plaintiff and cross-complainant ( 426.10, subd. (b)). And the phrase “related cause of action” in section 426.30 is defined as “a cause of action which arises out of the same transaction, occurrence, or series of transactions or occurrences as the cause of action which the plaintiff alleges in his complaint.” ( 426.10, subd. (c).) Because of the liberal construction given to the statute to accomplish its purpose of avoiding a multiplicity of actions, “transaction” is construed broadly; it is “not confined to a single, isolated act or occurrence ... but may embrace a series of acts or occurrences logically interrelated [citations].” (Saunders, supra, 231 Cal.App.2d at p. 336, 41 Cal.Rptr. 703; see also Currie Medical, supra, 136 Cal.App.3d at p. 777, 186 Cal.Rptr. 543.)

(Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 959–60.)

Defendants have provided Pacific Union’s Placer County complaint and Plaintiff’s answer to the complaint. The Placer County complaint alleges that Pacific Union is entitled to the commission in escrow resulting from the sale of the Toyopa property. (RJN Exh. A.) This action and the Placer County action arise out of the “same transaction, occurrence, or series of transactions or occurrences.”

Plaintiff argues that this action involves other defendants and causes of action and that Pacific Union has not proved it is successor in interest to Partners Trust in the Placer County action. These arguments are unpersuasive. Any claims regarding the commission of the Toyopa property should have been brought in a cross-complaint in the Placer County Action.

Defendants’ Demurrer as to TAC against Defendant Pacific Union is SUSTAINED without leave to amend.

B. Seventh Cause of Action for Breach of Contract

To prevail on a cause of action for breach of contract, Plaintiffs must establish: (1) the existence of contract between Plaintiffs and Defendants; (2) Plaintiffs’ performance or excuse for nonperformance; (3) the Defendants’ breach; and (4) any resulting damages. (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1388.) Under California law, only a signatory to a contract may be liable for any breach of contract. (Clemens v. American Warranty Corp. (1987) 193 Cal.App.3d 444, 452.)

The seventh cause of action for breach of contract is asserted against all Defendants; Plaintiff alleges that all Defendants are parties to the contract. But the alleged breach of contract relates to the agreement between Plaintiff and Defendant Partners Trust. (TAC, Exh. A.) As discussed, the breach of contract claim against Pacific Union, the successor in interest to Partners Trust, should have been asserted as a cross-complaint in Placer County. (CCP 426.30(a)). Plaintiff has failed to set forth facts establishing the basis of liability for the non-signatory defendants.

Defendants’ demurrer to the seventh cause of action is SUSTAINED without leave to amend.

C. Motion to Strike

Any party, within the time allowed to respond to a pleading, may serve and file a notice of motion to strike the whole or any part thereof. (Code of Civ. Proc., 435, subd. (b)(1); Cal. Rules of Court, rule 3.1322, subd. (b).) The court may, upon a motion or at any time in its discretion and upon terms it deems proper: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (Code Civ. Proc., 436, subd. (a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782.)

The motion as to Pacific Union is moot. The Court declines to otherwise strike Plaintiff’s claim for attorney’s fees as the action may reveal a basis for them later.

The motion to strike is DENIED.