Opinion
B226782
10-21-2011
BRIAN KAISER, Plaintiff and Appellant, v. DAN MATSON, Defendant and Respondent.
Lurie & Park, Barak Lurie and Stephen J. Weaver for Plaintiff and Appellant.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. BC416532)
APPEAL from a judgment of the Superior Court of Los Angeles County, Zaven V. Sinanian, Judge. Affirmed.
Lurie & Park, Barak Lurie and Stephen J. Weaver for Plaintiff and Appellant.
No appearance for Defendant and Respondent.
INTRODUCTION
Plaintiff Brian Kaiser appeals from a judgment dismissing his action against defendant Dan Matson after the grant of Matson's motion for judgment on the pleadings. We conclude that the order granting the motion for judgment on the pleadings did not violate Code of Civil Procedure section 438, subdivision (g)(1) because that motion was brought on different grounds than were present in Matson's earlier demurrer. We also find that the trial court correctly determined that the statute of frauds made the oral contract between Kaiser and Matson unenforceable and that Kaiser has not shown either the unjust enrichment of Matson or the unconscionable injury to himself required to estop defendant from pleading the statute of frauds. Therefore the trial court correctly granted the motion for judgment on the pleadings as to claims for breach of fiduciary and negligence which derived from the unenforceable oral contract. We affirm the judgment.
Unless otherwise specified, statutes will refer to the Code of Civil Procedure.
FACTUAL AND PROCEDURAL HISTORY
The operative complaint is Kaiser's first amended complaint. Pursuant to the standard of review, the complaint contained the following allegations. In May 2006, Kaiser and Matson entered into an oral agreement pursuant to which Matson would act as real estate broker for the sale of Kaiser's house at 6201 Fair Avenue, North Hollywood, California and Kaiser would pay a commission on the sale of that property. Matson told Kaiser he would list the property on the Multiple Listing Service (MLS), the main method realtors and buyers and sellers of houses use to locate properties for sale. Despite Kaiser's repeated requests, Matson did not list the property for sale on the MLS. Kaiser did not discover Matson's failure to put the property on the MLS until August 2007. Matson's failure to advertise Kaiser's property resulted in no offers for that property, whose value fell in the downturn in the real estate market.
"A judgment on the pleadings in favor of the defendant is appropriate when the complaint fails to allege facts sufficient to state a cause of action. (Code Civ. Proc., § 438, subd. (c)(3)(B)(ii).) A motion for judgment on the pleadings is equivalent to a demurrer and is governed by the same de novo standard of review. [Citations.] All properly pleaded, material facts are deemed true, but not contentions, deductions, or conclusions of fact or law; judicially noticeable matters may be considered. [Citations.]" (Kapsimallis v. Allstate Ins. Co. (2002) 104 Cal.App.4th 667, 672.)
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The complaint alleged that Matson breached the oral contract by failing to list the real property for sale on the MLA and by failing to take steps reasonably necessary to advertise the sale of the property. A cause of action for breach of fiduciary duty alleged that Matson breached his fiduciary duty to Kaiser to take reasonable steps to facilitate the sale of the property by failing to list the property on the MLS or to take meaningful steps to facilitate its sale. A cause of action for negligence alleged that by entering into the oral agreement and representing to Kaiser that he would take steps to effectuate the sale of the property (including listing the property on the MLS), Matson owed Kaiser a duty of care to take action to facilitate the sale of the property and breached that duty by failing to take reasonable steps to list the property for sale.
On March 5, 2010, the trial court sustained a demurrer to the cause of action for breach of oral contract without leave to amend, but overruled the demurrer to the causes of action for breach of fiduciary duty and negligence. After filing an answer, on May 25, 2010, Matson filed a motion for judgment on the pleadings. The trial court granted the motion for judgment on the pleadings, and on June 24, 2010, entered a judgment dismissing the action.
Kaiser filed a timely notice of appeal.
ISSUES
Kaiser claims on appeal that:
1. Defendant Matson violated section 438, subdivision (g)(1) by bringing a motion for judgment on the pleadings without first seeking reconsideration of the trial court's earlier decision; and
2. The trial court incorrectly determined that the statute of frauds bars all causes of action deriving from an oral agreement to sell property, and therefore improperly dismissed the action.
DISCUSSION
1. Matson's Motion for Judgment on the Pleadings Was Made on Different Grounds Than Matson's Demurrer, and Therefore the Grant of the Motion for Judgment on the Pleadings Did Not Violate Section 438, Subdivision (g)(1)
Kaiser claims that by granting Matson's motion for judgment on the pleadings, the trial court violated section 438, subdivision (g)(1). It states that a motion for judgment on the pleadings "may be made even though either of the following conditions exist: [¶] (1) The moving party has already demurred to the complaint . . . on the same grounds as is the basis for the motion provided for in this section and the demurrer has been overruled, provided that there has been a material change in applicable case law or statute since the ruling on the demurrer." (Ibid.)
Matson demurred to the breach of contract action as barred by the statute of frauds (Civ. Code, § 1624, subd. (a)(4)) and the statute of limitations. Matson demurred to the causes of action for breach of fiduciary duty and negligence as barred by the statute of limitations. The trial court sustained the demurrer to the breach of contract action as barred by the statue of frauds, but overruled the demurrer to the breach of fiduciary duty and negligence causes of action because Kaiser did not discover that Matson failed to list the property on the MLS until after filing the complaint.
Matson moved for judgment on the pleadings, by contrast, on the ground that Kaiser's causes of action for breach of fiduciary duty and for negligence failed because they were premised on an oral agreement for the sale of real property which the law required to be in writing. Thus Matson, the party moving for judgment on the pleading, had not "already demurred to the complaint . . . on the same grounds as is the basis for the motion provided for in this section[.]" (§ 438, subd. (g)(1).) Matson's motion for judgment on the pleadings was made on a different ground, which was not the basis for Matson's earlier demurrer. Therefore the requirement that the motion for judgment on the pleadings had to be based on a "material change in applicable case law or statute since the ruling on the demurrer" (ibid.) did not prohibit Matson from bringing such a motion as to the causes of action for breach of fiduciary duty and for negligence.
2. The Trial Court Correctly Granted the Motion for Judgment on the Pleadings
Kaiser claims that the trial court erroneously granted the motion for judgment on the pleadings because it incorrectly found that the statute of frauds barred causes of action deriving from an oral agreement to sell property.
The statute of frauds states, in relevant part: "(a) The following contracts are invalid, unless they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or by the party's agent: [¶] . . . [¶] (4) An agreement authorizing or employing an agent, broker, or any other person to purchase or sell real estate . . . or to procure, introduce, or find a purchaser or seller of real estate . . . for compensation or a commission." (Civ. Code, § 1624, subd. (a)(4).)
Kaiser argues that individuals can assert estoppel to prevent application of section 1624, subdivision (a)(4) to defeat enforcement of the oral contract, relying on Tenzer v. Superscope, Inc. (1985) 39 Cal.3d 18 (Tenzer). In Tenzer, plaintiff was not a licensed real estate broker, although he had extensive personal and business contacts among real estate investors. Tenzer was a member of the board of directors of defendant Superscope, and was asked by Tushinsky, the president of Superscope and chairman of its board of directors, to seek a buyer for the Superscope corporate headquarters building and other property. Tenzer found a buyer, and Tushinsky agreed to pay a finder's fee of 10 percent of the price upon consummation of the sale of the property. Tenzer and Tushinsky did not have a written finder's fee agreement. The Superscope board accepted the buyer's offer and the sale closed. Subsequently, however, the board voted against a resolution authorizing payment of finders' fees, and Tenzer never received a finder's fee from the sale of the Superscope property. (Id. at pp. 22-24.)
Although Tenzer concluded that the statute of frauds would ordinarily bar plaintiff's action for breach of contract, it held that under the circumstances an unlicensed real estate broker acting as a "finder" could invoke the doctrine of estoppel to plead the statute of frauds. "The doctrine of estoppel to plead the statute of frauds may be applied where necessary to prevent either unconscionable injury or unjust enrichment." (Tenzer, supra, 39 Cal.3d at p. 27.) Where Superscope received the benefit of Tenzer's performance but relied on the statute of frauds to avoid paying the agreed price, the unjust enrichment of Superscope estopped it from asserting the statute of frauds. (Id. at pp. 27-28.)
The doctrine of estoppel to assert the statute of frauds is applied to prevent the fraud that would result from refusing to enforce oral contracts. "Such fraud may inhere in the unconscionable injury that would result from denying enforcement of the contract after one party has been induced by the other seriously to change his position in reliance on the contract [citations], or in the unjust enrichment that would result if a party who has received the benefits of the other's performance were allowed to rely upon that statute." (Monarco v. Lo Greco (1950) 35 Cal.2d 621, 623-624.) Thus two alternate grounds can support estoppel to assert the statute of frauds: unjust enrichment of the defendant, or unconscionable injury to the plaintiff.
Here no unjust enrichment occurred. Kaiser's home was not sold. Matson was not paid a commission and would not be unjustly enriched by relying on the statute of frauds; he was not paid a commission that he would keep as a result of his assertion of the statute of frauds.
Unconscionable injury requires "unusual, even extraordinary, circumstances demonstrating that unless the agreement is carried out, unconscionable injury would result to the party asserting the agreement." (Dini v. Dini (1961) 188 Cal.App.2d 506, 514.) The allegation that Kaiser lost the opportunity to sell the property when the real estate market was relatively strong does not amount to a change of position on the part of Kaiser. (Carlson v. Richardson (1968) 267 Cal.App.2d 204, 208.) The allegation that the property decreased in value is not sufficient to show a serious change of position in reliance on the contract; these effects were caused by market conditions rather than from any act or forbearance to act on the part of Kaiser. (Ibid.) Matson therefore did not induce Kaiser to seriously change his position in reliance on the contract, and denying enforcement of the oral contract would not result in unconscionable injury.
The conditions supporting application of the doctrine of estoppel to plead the statute of frauds therefore do not exist in this case. The statute of frauds makes the oral contract invalid and unenforceable. Consequently Matson did not owe Kaiser the fiduciary duty a broker owes to his client (Michel v. Moore & Associates, Inc. (2007) 156 Cal.App.4th 756, 762) and the trial court correctly granted the motion for judgment on the pleadings on the cause of action for breach of fiduciary duty.
The cause of action for negligence alleged that having entered into the agreement, Matson owed a duty of care to act to facilitate the sale of Kaiser's property. (See North American Chemical Co. v. Superior Court (1997) 59 Cal.App.4th 764, 774 [contract to perform services gives rise to duty of care requiring performance of services in a competent, reasonable manner]. Because the oral contract was invalid and unenforceable, it imposed no duty on Matson and Matson breached no duty to Kaiser. Thus the trial court correctly granted the motion for judgment on the pleadings on the negligence cause of action.
DISPOSITION
The judgment is affirmed. Costs on appeal are awarded to defendant Dan Matson.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
KITCHING, J.
We concur:
CROSKEY, Acting P. J.
ALDRICH, J.