Susanville Real Estate, agent Kari Moore, and real estate broker John Shaw listed a property owned by Murphy for
In the process of purchasing the property, the Tindells hired loan broker Kim Keith. Keith told the Tindells she believed the property was a manufactured home and that they might not be able to obtain financing.
The Tindells also hired appraiser Bradley to appraise the property. When Bradley appraised the home, she designated it a modular home constructed around 1972. Following the appraisal, Keith told the Tindells she could finance the property.
In 2009 the Tindells sought to refinance their mortgage. In connection with the refinancing, an appraiser inspected the property. According to the appraisal for the refinancing, the property was a manufactured home and not a modular home. The Tindells were unable to refinance their mortgage.
Original Complaint
In their original complaint, the Tindеlls sued Susanville Real Estate, real estate agent Moore, real estate broker Shaw (collectively the Susanville defendants), loan broker Keith, and appraiser Bradley, alleging causes of action for (1) declaratory relief, (2) violation of Civil Code section 1102 et seq., (3) fraud, and (4) breach of fiduciary duty. The Tindells alleged that the Susanville defendants, Keith, and Bradley failed to disclose the property was a manufactured home, preventing a refinancing of the mortgage.
According to the Tindells, the Susanville defendants, Keith, and Bradley fraudulently misrepresented the property as "modular." In addition, the Tindells argued, they "failed to undertake аn inquiry an inquiry as to the condition of Subject Property to determine whether the Subject Property was 'manufactured' or 'modular.' "
Keith filed a demurrer to the Tindells' complaint. The trial court sustained the demurrer without leave to amend. As they acknowledge, the Tindells did not file a timely appeal of that order.
The trial court sustained the demurrer to the first and second causes of action without leave to amend. The court sustained the demurrer to the fraud and breach of fiduciary duty causes of action with leave to amend, those causes of action were not pleaded with particularity and were uncertain.
First Amended Complaint
Subsequently, the Tindells filed a verified first amended complaint alleging causes of action for fraud, negligent misrepresentation, and constructive fraud. The amended complaint alleged the MLS (Multiple Listing Service) listing declared the property to be 26 years old and manufactured in 1979, but the Tindells later discovered the property was manufactured in 1976. According to the Tindells, homes manufactured prior to June 1976 are "practically worthless" bеcause of lack of
The first amended complaint alleged the Susanville defendants and Bradley failed to disclose that the property was a 1972 manufactured home that could not be financed. Instead, they represented that the property was manufactured in 1979. According to the Tindells, although the Susanville defendants "initially did state the Subject Property was a manufactured home, they did not question Bradley's appraisal designating [it] as [a] modular home."
The Susanville defendants filed a demurrer to the first amended complaint, asserting that, in light of documents attached to the complaint, the Tindells could not show they misrepresented the age of thе home and could not allege justifiable reliance. The listing, attached to the first amended complaint, stated the approximate age of the house was 26 years. In addition, the Susanville defendants argued the handwritten year "1979" on the listing was not part of the original listing, but must have been added by the Tindells. In opposing the demurrer, the Tindells conceded the handwritten "1979" was not part of the original listing.
The trial court sustained the demurrer to the first amended complaint with leave to amend.
Second Amended Complaint
The Tindells filed a second amended complaint alleging fraud, negligent misrepresentation, and constructive fraud. Again, the Tindells alleged the
The second amended complaint added new allegations. The complaint alleged the Susanville defendants had special knowledge of the property and intentionally concealed the property's true age. The Tindells also claimed that although the Susanville defendants stated in February 2005 that the property was a manufactured home, they concealed thе known fact that the property was built prior to 1976. In addition, the Tindells alleged that if appraiser Bradley had disclosed the true age of the property, it would have enabled them to make an informed decision about the purchase.
The Susanville defendants again demurred, asserting the Tindells were bound by the allegations contained in their original complaint. They also argued the Tindells failed to establish the elements of fraud, and they had no duty to inspect public records to establish the age of the property. The Tindells did not file a written opposition to the demurrer and did not oppose the demurrer in oral argument.
In its tentative ruling sustaining the demurrеr without leave to amend, the trial court noted the lack of opposition. In considering the fraud cause of action, the court determined the listing did not state the home was manufactured in 1979, but stated the approximate age was 26 years. The court also noted the Tindells admitted they added the handwritten "1979" date to the listing.
The court found the Tindells were bound by the allegations in their original complaint that they were not informed the house was manufactured. As stated by the court, "Plaintiffs cannot avoid these factual allegations in their original complaint that they were not informed the house was manufactured." The court found, "Plaintiffs cannot avoid thesе factual allegations
The court further found that the alleged misrepresentation that the home was modular was made by Bradley, not the Susanville defеndants. The
Motion for Reconsideration and Appeal
The Tindells retained new counsel and filed a motion for reconsideration of the court's ruling and a motion for leave to file a third amended complaint. The court denied the motion for reconsideration. According to the Tindells, the failure of their former counsel to oppose the demurrer to the second amended complaint was due to a lack of communication.
The court thereafter issued its order sustaining the demurrer in which it concluded: "The first cause of action for fraud must be pled with specificity which the Seсond Amended Complaint does not do. The second cause of action fails to state facts sufficient to show Plaintiffs relied upon the appraisal in light of the disclosure statement signed by Plaintiffs." The court granted the Tindells leave to amend.
We upheld the trial court's judgment sustaining the Susanville defendants' demurrer.
Third Amended Complaint
In their third amended complaint, the Tindells added Murphy as a defendant and causes of action including unjust enrichment, negligence, and rescission. According to the complaint, the Tindells relied upon Bradley's appraisal designating the property as "modular."
Before the third amended complaint was served on Murphy, Bradley demurred to the complaint. The trial court sustained the demurrer to the fraud and constructive fraud causes of action without leave to amend, finding "The third amended complaint did not contain specific factual allegations to support the elements of intent to deceive or justifiable reliance." Nor did the complaint allege sufficient facts to establish a fiduciary duty between the Tindells and Bradley. The court found the allegations of unjust enrichment and negligent misrepresentation concerning Bradley adequately pled. The court granted the Tindells' request to amend the complaint.
Fourth Amended Complaint-Demurrer and Summary Judgment
In their fourth amended complaint, the Tindells added a cause of actiоn for negligence against Bradley and Murphy. Murphy demurred to the complaint. The fourth amended complaint echoes the Tindells' earlier claims and adds several new allegations: (1) the listing identified the property as 2,256 square
Following oral argument, the court found each of the Tindells' causes of action deficient and sustained Murphy's demurrer without leave to amend. The first cause of action for fraud was "vague and conсlusory"
The second cause of action for constructive fraud was not pled with specificity, nor was a fiduciary relationship pled.
In their third and fourth causes of action for unjust enrichment and rescission, the Tindells failed to plead any facts to support these causes of action. In addition, these causes of action were derivative of other causes of action insufficiently pled.
The court found the fifth and sixth causes of action for negligence and negligent misrepresentation were completely lacking the factual elements necessary to establish a cause of action.
Following entry of judgment, the Tindells filed a timely appeal.
Bradley filed a motion for summary judgment. Following oral argument, the trial court granted the motion.
The court found no triable issue of material fact. The court summarized the evidence before it: "Plaintiffs admit that the appraisal was performed at the request of Eagle Home Mortgage, Inc. and that it stated it was 'not intended for any other use or by any other party.' Plaintiffs admit the appraisal stated the property was 33 years old, meaning built in 1972. Plaintiffs also admit that they did not care whether the property was modular or manufactured, so long as they could get a loan. And the lender utilized the appraisal to obtain a loan. Plaintiffs do not dispute that they refinanced the property in 2007 and that they no longer owed money on the loan they obtained pursuant to the subject appraisal. They suffered no damages from the loan for which the appraisal was obtained."
The court found the cause of action for unjust enrichment deficient because Bradley did not receive any unjust enrichment at the expense of the Tindells. Instead, it was the lender that paid for the appraisal. The cause of action for negligence failed because, as a matter of law, the Tindells as borrowers could
Following entry of judgment, the Tindells filed a timely notice of appeal.
DISCUSSION
Murphy's Demurrer
I
The funсtion of a demurrer is to test the sufficiency of the complaint by raising questions of law. We give the complaint a reasonable interpretation and read it as a whole with its parts considered in their context. A general demurrer admits the truth of all material factual allegations. We are not concerned with the plaintiff's ability to prove the allegations or any possible difficulties in making such proof. We are not bound by the construction made by the trial court of the pleadings; instead, we make our own independent judgment. ( Herman v. Los Angeles County Metropolitan Transportation Authority (1999)
When the trial court sustains the demurrer without leave to amend, wе must decide whether there is a reasonable possibility the plaintiff can cure the defect with
II
As noted, the present appeal involves allegations we addressed in our previous nonpublished opinion ( Tindell et al. v. Shaw et al. , supra , C068453 ). We upheld the trial court's order sustaining the Susanville defendants' demurrer to the Tindells' second amended complaint without leave to amend. In their second amended complaint, the crux of the Tindells' case was the failure to disclose the true age of the manufactured home.
In their original, verified complaint, the Tindells claimed they were injured by the failure to disclose that the property was manufactured as opposed to modular. However, attached to the complaint was the agent's inspection disclosure, signed by the Tindells, stating the home was manufactured. The listing also specified the home was manufactured.
Subsequently, the Tindells filed an amended complaint alleging the defendants failed to disclose the home was manufactured in 1972 and instead represented that the house was 26 years old and manufactured in 1979. Omitted from the amended complaint was any allegation the defendants misrepresented that the home was modular and concealed that the home was manufactured. The Tindells provided no explanation for the disappearance of these allegations.
The trial court found the Tindells were bound by the allegations in their original complaint, which аlleged their injury stemmed from the defendants' failure to inform them their home was manufactured and not modular. We affirmed the trial court's determination.
Here, the Tindells resurrect their allegations concerning the alleged failure to disclose the home was manufactured in 1972, but instead was represented that the house was 26 years old and manufactured in 1979. However, the Tindells now argue the sham pleading doctrine applies only to verified complaints and that their new allegations supplement and clarify the facts. According to the Tindells the doctrine is "not intended to prevent honest complainants from correcting erroneous allegations or to prevent correction of ambiguous facts."
However, in their original verified complaint the Tindells alleged they were damaged
Here, the Tindells are bound by the allegations in their original verified complaint that the misrepresentation they relied on was that the property was modular and the fact that the property was manufactured was concealed from them. In their fourth amended complaint, The Tindells renew these allegations, adding Murphy as a defendant.
The Tindells are bound by any of their initial, inconsistent allegations that they renew in their fourth amended complaint. Therefore, we consider whether the Tindells can state causes of action against Murphy apart from these allegations.
III
The Tindells argue the court erred in finding they could not establish a cause of action for fraud. To plead a cause of action for fraud, the Tindells must allege misrepresentation, knowledge of falsity, intent to defraud, justifiable reliance, and damage. ( Lazar v. Superior Court (1996)
Here, the Tindells generally allege Murphy should have known the property was manufactured in 1972 and contained defects. However, the Tindells signed a real estate transfer disclosure statement which states the property is "a manufactured home with a garage conversion." In addition, the Tindells signed a buyer's inspection advisory which stated: "You аre advised to conduct investigations of the entire property, including but not limited to the following: [¶] ... [¶] square footage, age, boundaries." Given these documents and the lack of specific factual allegations, it is unclear how the Tindells can establish a misrepresentation by Murphy or their reliance on any alleged misrepresentation. Nor does their complaint set forth any resulting damage.
IV
The Tindells also alleged Murphy committed constructive fraud. To prove such an allegation, the Tindells must show (1) a fiduciary relationship,
In sustaining Murphy's demurrer the court stated: "[T]he court does not find that such a [fiduciary] relationship was alleged or if alleged is supported by law. Defendant Murphy cannot be liable vicariously as a principal absent liability on the part of her agent Moore, and the Fourth Amended Complaint does not successfully
The Tindells argue Murphy is vicariously liable because if a seller's agent makes misrepresentations during the purchase of the sеller's property, the seller and the agent are jointly liable even if the seller is unaware of the fraud. ( Ach v. Finkelstein (1968)
V
The Tindells also argue they adequately pled a cause of action for unjust enrichment, rescission, or restitution. The trial court disagreed, finding they failed to plead any facts to support their claims and "these are derivative theories of recovеry for other causes of actions which Plaintiffs failed to plead on an appropriate factual basis."
We agree with the trial court's analysis. The Tindells failed to plead facts to support their assertion that Murphy was unjustly enriched and they were entitled to restitution. These causes of action are based on the same facts as the previous causes of action, which we also find deficient.
VI
The Tindells also alleged causes of action against Murphy for negligence and negligent misrepresentation. The trial court found the factual elements to support these claims "completely absent in the Fourth Amended Complaint." We agree.
VII
Finally, the Tindells contend the trial court abused its discretion in denying them leave to amend. In challenging the court's sustaining of a demurrer without leave to amend, the plaintiff bears the burden of proving an amendment would cure the defect. The plaintiff must identify some legal theory or state facts that сan be added by amendment to change the legal effect of his pleading. ( Hernandez v. City of Pomona (2009)
The Tindells fail to meet this burden. They fail to point to any legal theory or facts they can add to their allegations to state a cause of action against Murphy. Instead, the Tindells merely assert: "Here, there is no evidence that the pleading was not susceptible of amendment to correct the defect and the court should have granted the demurrer with leave to amend. In doing so, Plaintiffs could have amended the complaint to cure any defect alleged."
By failing to explain what additional information they could provide to support their causes оf action against Murphy, the Tindells do not meet their burden. The trial court did not err in denying leave to amend.
I
A motion for summary judgment must be granted if the submitted papers show there is no triable issue as to any material fact and the moving party is entitled to judgment as a matter of law. ( Aguilar v. Atlantic Richfield Co. (2001)
We review dе novo the record and the determination of the trial court. First, we identify the issues raised by the pleadings, since it is these allegations to which the motion must respond. Second, we determine whether
II
The trial court found no triable issue of fact to support the Tindells' action for negligence. According to the court, "[A]s a matter of law, borrowers [Plaintiffs] cannot sue an appraiser [Bradley] for negligence where the appraisal was prepared for a lender. There is no privity of contract between Bradley and Plaintiffs, such that this cause of action fails as a matter of law." The elements of a negligence cause of action are the existence of a legal duty of care, breach of that duty and proximate cause resulting in injury. ( McIntyre v. The Colonies-Pacific, LLC (2014)
In addition, the trial court found the Tindells' cause of action for negligent misrepresentation against Bradley "fails because the representation was made to the lender, not Plaintiffs. Additionally, there is no reliance by Plaintiffs because the representаtion was made after they signed a binding purchase agreement and was known to Plaintiff[s] prior to completing the purchase."
The elements of a 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." Negligent misrepresentation does not require knowledge of falsity, unlike a cause of action for fraud. ( Apollo Capital Fund LLC v. Roth Capital Partners, LLC (2007)
In regards to their negligence claim, the Tindells state "case law is clear that an appraiser has a duty of care to all people that the appraiser[ ] knows will rely on the appraiser's report." Similarly, in conjunction with their action for negligent misrepresentation, the Tindells argue "It is well established that an appraiser owes a duty
However, Soderberg does not support the Tindells' argument that the trial court erred in granting summary judgment. Instead, we find the Tindells' position analogous to that of the plaintiff in Willemsen v. Mitrosilis (2014)
In Willemsen , a property buyer filed suit against his broker and appraisers alleging negligence, breach of fiduciary duty, and negligent misrepresentation. ( Willemsen, supra , 230 Cal.App.4th at pp. 624-625,
The plaintiff in Willemsen also argued the appraiser knew or must have known there was a loan transaction involving them. The court held: "Here, the appraisal report demonstrates on its face that the ... Defendants were aware of the contemplated loan transaction and that the appraisal report was
We are not convinced by the Tindells' efforts to distinguish Willemsen. As the trial court noted, the appraisal was prepared for the lender, not the Tindells.
Finally, the trial court found no triable issue of fact to support the unjust enrichment cause of action against Bradley. An individual is required to make restitution if he or she is unjustly enriched at the expense of another. ( First Nationwide Savings v. Perry (1992)
III
The Tindells also argue the court erred in sustaining Bradley's objection to the declaration оf Paul Shepherd and her objections to portions of Linda Tindell's declaration. We review the trial court's ruling on objections to evidence in connection with a summary judgment motion for an abuse of discretion. ( Carnes v. Superior Court (2005)
The trial court found the declaration of Paul Shepherd as "irrelevant to the instant Motion under Evidence Code [section] 210." Shepherd provided an opinion as to Bradley's failure to meet the standard of care under a negligence cause of action. However, we agree with the trial court that the Tindells' negligence cause of action fails as a matter of law, making Shepherd's declaration irrelevant.
The trial сourt also sustained Bradley's objections to Linda Tindell's statements that she was never made aware that the property was a manufactured home and several statements that contradicted her deposition testimony
DISPOSITION
The judgments are affirmed. Murphy and Bradley shall recover costs on appeal. ( Cal. Rules of Court, rule 8.278(a)(1) & (2).)
We concur:
HOCH, J.
NICHOLSON, J.
Notes
These facts are taken from our previous nonpublished opinion in Tindell et al. v. Shaw et al . (June 13, 2013, C068453,
Retired Associate Justice of the Court of Appeal, Third Appellate District, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.