Opinion
NOT TO BE PUBLISHED
Sup.Ct.No. CV019920
MORRISON, Acting P.J.
Plaintiffs, prospective real estate purchasers, sued the intended sellers for specific performance or breach of contract after a real estate purchase fell through. They also sued defendants Ray Axton (Axton) and Ward Real Estate and Foreclosure Services, Inc. (Ward) and others for fraud and various other torts. After plaintiffs settled with L & M Partners (L & M), the intended seller, and rescinded the purchase contract, Axton and Ward brought a nonstatutory motion to dismiss, contending the settlement agreement eliminated any damages. The trial court granted the motion and plaintiffs appeal.
We reverse. We treat the motion to dismiss as a motion for judgment on the pleadings. Although the settlement rescinded the purchase contract, it did not effect the tort claims against Axton and Ward. Further, the complaint alleged damages beyond the deposit, which was returned to plaintiffs under the settlement agreement.
FACTS
In 2000, Michael Vieira (Vieira) entered into a contract with L & M to sell a 75-acre parcel of land. Vieira owned two parcels of unimproved land in Tracy and was in the process of obtaining a parcel split. After the split, he would sell the southern parcel to L & M for $1,125,000. Axton was Vieira’s broker.
In 2002, L & M entered into a contract to sell the same 75-acre parcel to United Capital Investments (UCI) for $1,200,000. The contract called for a $30,000 deposit, of which $10,000 was to be released to the seller. UCI associated with Austiaj Limited Partnership for purposes of the purchase. Poorooshasb Parineh is the general partner of Austiaj Limited.
Neither contract was completed.
UCI brought suit against Vieira and L & M for breach of contract, specific performance, and interference with contract. The complaint was amended; the operative complaint for this appeal is the third amended complaint.
The third amended complaint named UCI and Parineh as plaintiffs. In addition to Vieira and L & M, the general partners of L & M (David Lebeouf and Peter Marek), Axton and Ward were named as defendants. Axton was a salesperson or broker affiliated with Ward. Axton and Ward represented Vieira in the sale. The complaint alleged that Axton and Ward, as real estate licensees, had a fiduciary duty to plaintiffs to disclose true facts, and to investigate and use due care.
The complaint alleged the 2000 purchase contract did not close because L & M was unable to raise the purchase price. Vieira, through Axton and Ward, negotiated for the 75-acre parcel to be sold to someone else without cancelling the 2000 contract. This was accomplished through the 2002 contract between plaintiffs and L & M. The negotiations with plaintiffs were handled principally by Axton. Axton represented that Vieira was willing to sell the property to L & M and ultimately to plaintiffs. L & M would receive $75,000. The transfer would occur pursuant to a “double escrow.”
As part performance of the contracts, plaintiffs deposited $30,000 into escrow and agreed to release $10,000 for engineering and to release the remainder for engineering in connection with the lot split. UCI associated with Parineh to purchase the property. Parineh placed the $30,000 in escrow. The amended complaint alleged that plaintiffs were ready and willing to perform the 2002 contract, but defendants (except Axton and Ward) refused to perform. It further alleged that defendants (except Axton and Ward) breached the warranty in both the 2000 and 2002 contracts that the property had adequate utility services or that such services would be provided by the seller before closing.
The third amended complaint sought specific performance of the 2000 and 2002 contracts or damages for breach of contract against Vieira, L & M, Lebeouf and Marek. It also sought declaratory relief as to the defendants’ duties under the contract.
The fifth, eighth and ninth causes of action were against all defendants for fraud. The complaint alleged defendants fraudulently induced plaintiffs to enter into the 2002 contract and falsely promised to sell the property with utility services sufficient for residential and industrial use. Defendants induced plaintiffs to deposit $30,000 into escrow for the use of Vieira and L & M. The defendants induced plaintiffs to do these things so that Vieira and L & M could obtain funds for the parcel map and keep the property at a higher value and sell it to others or sell it to plaintiffs without the utility services, thereby defrauding plaintiffs. The complaint alleged plaintiffs had made “substantial investment in time and money” and now faced “the potential loss of property, money, and investment [as] well as damage to [] other investments as a result.” An exact amount of damages was not alleged, but it was over $30,000.
Additional causes of action against all defendants were based on negligence, breach of fiduciary duty, intentional interference with prospective economic advantage, and conspiracy. The complaint sought damages according to proof and punitive damages. The cause of action for “conspiracy to interfere with [livelihood]” alleged plaintiffs had lost revenue, reputation and title to the property and had lost use and profits.
Axton and Ward demurred to the third amended complaint. Apparently, the demurrer was overruled. Axton and Ward answered, denying the allegations and asserting 27 affirmative defenses.
The ruling is not in the record on appeal.
Vieira moved for summary judgment and the motion was granted.
Plaintiffs reached a settlement with L & M. Pursuant to the settlement agreement, both L & M and plaintiffs would give up all rights under the 2002 contract and the lawsuit brought by plaintiffs. The $30,000 deposited into escrow was to be returned to plaintiffs.
A dispute arose as to whether there was an enforceable settlement agreement. L & M moved to enforce this settlement. Just before the date the matter was set for trial, the court granted the motion.
On the date set for trial, plaintiffs moved to vacate the trial date; they planned to file a motion to reconsider or to appeal the order enforcing the settlement. Counsel for Axton and Ward objected to vacating the trial date; he was prepared to move to dismiss the case against his clients. He had faxed a motion to dismiss to the attorney for plaintiffs the night before. Plaintiffs objected they had not had an opportunity to respond to the motion. The court noted there was no procedure for bringing the motion. Counsel for Axton and Ward responded, “It’s just a practical motion[.]” The court set a hearing date on the motion the next month.
The motion to dismiss claimed the court’s order enforcing the settlement agreement effectively eliminated all claims against Axton. The motion reasoned that a settlement agreement releasing all rights under a contract was a rescission of the contract. A contract is extinguished by rescission and ceases to exist. After rescission a party cannot enforce contract rights in the guise of a tort duty. The motion relied on Larsen v. Johannes (1970) 7 Cal.App.3d 491. The motion contended all of plaintiffs’ damages were based on the claim that the property would have been worth more if L & M had installed certain services; plaintiffs could no longer recover the benefit of their bargain. Their out of pocket expenses were limited to the $30,000 deposit, which was being returned.
In opposition, plaintiffs argued (1) the check for the deposit had not yet cleared; (2) the settlement agreement did not apply to Axton and Ward; and (3) plaintiffs’ appeal from the order enforcing the settlement stayed any dismissal.
At the hearing on the motion to dismiss, the court again indicated it was not familiar with the procedure for such a motion. Counsel replied there might not be an actual motion set forth in the code; the closest was a motion for judgment on the pleadings. Axton and Ward conceded plaintiffs did not have to prove damages at this point, “but there ought to be some representation that we do have some kind of damages and that we have evidence that will sustain those damages.”
The court granted the motion to dismiss.
DISCUSSION
I. Standard of Review
In reviewing the trial court’s ruling on Axton and Ward’s motion to dismiss, we must first determine the nature of the motion to determine the proper standard of review. (See Taylor v. Lockheed Martin Corp. (2000) 78 Cal.App.4th 472, 479.) The motion to dismiss was not brought pursuant to any statutory authority. The primary reason for an involuntary dismissal is a delay in prosecution. (See Code Civ. Proc., §§ 581 et seq.) Other reasons, such as failure to appear or lack of jurisdiction, may provide a basis for dismissal. (See 6 Witkin, Cal. Procedure (4th 3d. 1997) Proceedings Without Trial, § 459, pp. 889-891.) Axton and Ward’s motion does not fall within any of these categories.
Counsel conceded the motion did not come within a specific code section, but suggested it was similar to a motion for judgment on the pleadings. “Review of an order granting a motion for judgment on the pleadings is governed by the same standard applicable to reviewing an order sustaining a general demurrer. This court will examine only the face of the pleadings, together with matters subject to judicial notice, to determine whether such facts are sufficient to constitute a cause of action. A defendant is entitled to a judgment on the pleadings when it appears from the face of the complaint (or on those matters judicially noticed) that the complaint is barred as a matter of law.” (California Water Impact Network v. Newhall County Water Dist. (2008) 161 Cal.App.4th 1464, 1476.)
The other candidate for classifying the motion to dismiss is a motion for summary judgment. A motion supported by facts outside the pleadings is a speaking motion (Lerner v. Ehrlich (1963) 222 Cal.App.2d 168, 171), which is now treated as a motion for summary judgment. (Vesely v. Sager (1971) 5 Cal.3d 153, 167-169; Pianka v. State of California (1956) 46 Cal.2d 208, 211.) “When a trial court considers matters outside the pleadings in ruling on a motion for judgment on the pleadings, resulting judgments are reviewed as judgments arising from motions for summary judgment.” (Rangel v. Interinsurance Exchange (1992) 4 Cal.4th 1, 19, fn. 1; see also Shapiro v. Wells Fargo Realty Advisors (1984) 152 Cal.App.3d 467, 475, fn. 3 [treating demurrer and request for judicial notice of stock agreement as a motion for summary judgment].) The practical difference between the a judgment on the pleadings and a summary judgment is that a trial court may grant leave to amend when the motion is one for judgment on the pleadings even if there is no motion to amend. (Taylor v. Lockheed Martin Corp., supra, 78 Cal.App.4th 472, 479; Hansra v. Superior Court (1992) 7 Cal.App.4th 630, 647.) Plaintiffs do not contend they should be allowed to amend the complaint.
In ruling on a motion for judgment on the pleadings, the court considers only the face of the complaint and matters of which it may take judicial notice. (Smiley v. Citibank (1995) 11 Cal.4th 138, 146; Code Civ. Proc., § 438, subd. (d).) Axton and Ward’s motion was based on the settlement agreement, but they did not request the court take judicial notice of it. A court may take judicial notice of such an agreement where there is no factual dispute as to its contents. (Performance Plastering v. Richmond American Homes of California, Inc. (2007) 153 Cal.App.4th 659, 666, fn. 2; Evid. Code, § 452, subd. (h).) Plaintiffs had challenged enforcement of the settlement agreement because L & M had not performed its terms, primarily returning the $30,000. At the time of the motion to dismiss, however, the trial court had issued an order that the settlement agreement be enforced. Further, plaintiffs did not object to the trial court considering the settlement agreement. We may consider evidence outside the pleadings which the trial court considered without objection. (Baughman v. State of California (1995) 38 Cal.App.4th 182, 187; O’Neil v. General Security Corp. (1992) 4 Cal.App.4th 587, 594, fn. 1.)
Plaintiffs subsequently appealed from this order. This appeal was subsequently dropped. Plaintiffs no longer challenge the validity of the settlement agreement.
Axton and Ward presented the motion to dismiss on the day set for trial. A motion for judgment on the pleadings should not be filed within 30 days of the date the action is set for trial, “unless the court otherwise permits.” (Code Civ. Proc., § 438, subd. (e).) Whether to grant leave to file an untimely motion for judgment on the pleadings is within the trial court’s discretion. (Burnett v. Chimney Sweep (2004) 123 Cal.App.4th 1057, 1063.) There is no requirement of good cause. (Ibid.) Here there was good cause -- the resolution of the enforceability of the settlement agreement. Accordingly, the trial court did not abuse its discretion in permitting the filing of an untimely motion.
The motion to dismiss, which we treat as a motion for judgment on the pleadings, asserted the settlement agreement eliminated all claims against Axton and Ward by rescission of the 2002 contract and plaintiffs could not prove any damages other than the $30,000 deposit, which was returned. We consider each argument in turn.
II. The Settlement Agreement Did Not Preclude
a Fraud Action Against Axton and Ward
Plaintiffs contend the settlement agreement did not release any claims against Axton and Ward because they were not parties to the agreement. By its express terms, the settlement agreement only released claims against the UCI parties and L & M. A party may settle with one tortfeasor without releasing claims against other tortfeasors. (Code Civ. Proc., § 877.)
Axton and Ward contend the settlement agreement rescinded the 2002 contract and all of plaintiffs’ claims against Axton and Ward were based on the 2002 contract. Relying on Larsen v. Johannes, supra, 7 Cal.App.3d 491, they contend plaintiffs cannot maintain a tort action after rescission of the 2002 contract.
In Larsen, an architect prepared plans for a large apartment project. Before construction began, the owners purported to terminate his contract. Thereafter, the parties mutually rescinded the contract and entered into a mutual accord and satisfaction and covenant not to sue. (Larsen v. Johannes, supra, 7 Cal.App.3d at pp. 495, 502.) The builder later sued the owners for balance due and the owners cross-complained, adding the architect as a cross-defendant. As to the architect, the owners alleged he was negligent in the design and supervision of the work, resulting in defective construction. (Id. at p. 497.) The architect secured summary judgment on the basis of the rescission of the contract and the release. The appellate court affirmed, finding that once the contract had been rescinded, the owners could not reassert its contractual duties “in the guise of a tort duty.” (Id. at p. 502.)
We find Larsen distinguishable. First, the Larsen decision was based on the release between the architect and the owners. Here Axton and Ward were not parties to the settlement agreement that contained the release. Second, in Larsen, the owners’ tort allegations against the architect were based on duties under the rescinded contract; the owners alleged the architect negligently performed the contract. In contrast, plaintiffs’ allegations against Axton and Ward were based, in part, on actions before the 2002 contract was signed. Plaintiffs alleged Axton and Ward fraudulently induced them to enter into the contract. These tort claims are separate from the provisions of the contract.
This case is similar to Whistler v. Ondulando Highlands Corp. (1970) 13 Cal.App.3d 108, in which a homeowner, whose house was in danger of collapsing because it was built on fill, sued the seller, the real estate broker and the contractor on multiple counts, including rescission of the purchase agreement, negligence, fraud and misrepresentation, and strict liability. After a judgment was entered against the seller on the rescission issues, the other defendants successfully moved for summary judgment. The appellate court reversed, finding rescission of the contract did not bar the tort claims against the other defendants. “A joint and several judgment could be rendered against any one or could be rendered against any one or all of the defendants named in these causes of action. Plaintiffs, however, having elected their remedy of rescission as against Ondulando, the seller under the contract, may not now further pursue their remedy against Ondulando under the causes of action in tort. This does not mean that they are estopped from proceeding further against the other alleged joint tortfeasors against whom they may, if successful, obtain a several judgment.” (Id. at p. 118.) Just as Whistler could proceed against the broker on tort claims after rescission of the contract, so too may plaintiffs here.
The premise of Axton and Ward’s motion to dismiss was that, by rescission of the 2002 contract and return of the $30,000 deposit, plaintiffs had been made whole and suffered no further damages. We turn now to the issue of damages.
III. Axton and Ward Failed to Establish the Lack of Damages
Plaintiffs contend the trial court erred in accepting Axton and Ward’s claim that plaintiffs’ recovery was limited to their out-of-pocket expenses and those expenses were limited to the $30,000 deposit that had been returned. Plaintiffs contend that the motion to dismiss, which counsel suggested was similar to a judgment on the pleadings, tested only the sufficiency of the pleadings. To survive that motion, plaintiffs had only to allege damages, not prove them. We agree.
At the hearing, Axton and Ward conceded plaintiffs did not yet have to prove damages, but argued plaintiffs ought to make some representation about damages. On appeal, they contend that plaintiffs’ failure in the trial court to claim additional damages precludes them from claiming there are additional damages on appeal. Axton and Ward offer no authority for the proposition that an offer of proof is required to withstand an attack on the pleadings.
While the parties disagree on the proper measure of damages, they agree that plaintiffs are entitled to their out-of-pocket expenses. (Civ. Code, § 3343 [permitting recovery of amounts actually and reasonably expended in reliance upon fraud in a real estate transaction].) Axton and Ward assert plaintiffs’ only out-of-pocket expense was the $30,000 deposit, but they cite to nothing in the pleadings or the settlement agreement that establishes this as the only expense. The third amended complaint alleged plaintiffs suffered “substantial pecuniary losses” “exceeding $30,000.”
In reviewing a judgment entered on pleadings, we must accept factual allegations as true. (Angelucci v. Century Supper Club (2007) 41 Cal.4th 160, 176; Nelson v. Superior Court (2006) 144 Cal.App.4th 689, 692.) A fraud cause of action must be pled with specificity, but it need not state a specific dollar amount of damages; it is sufficient to allege the type of damage caused by the fraud. (Furia v. Helm (2003) 111 Cal.App.4th 945, 956.) The complaint alleged plaintiffs had expended money in reliance on the allegedly fraudulent representations. Plaintiffs were entitled to prove these damages. For example, in a declaration in opposition to expunge lis pendens, plaintiff Parineh stated he incurred costs in refinancing other real property in order to obtain the cash necessary for the purchase price. In addition, the complaint alleged other elements of damages, including losses to other investments, harm to reputation, and punitive damages.
“A defendant is entitled to a judgment on the pleadings when it appears from the face of the complaint (or on those matters judicially noticed) that the complaint is barred as a matter of law.” (California Water Impact Network v. Newhall County Water Dist., supra, 161 Cal.App.4th 1464, 1476.) The third amended complaint and the settlement agreement do not establish that the action against Axton and Ward is barred as a matter of law. The trial court erred in granting the motion to dismiss.
DISPOSITION
The judgment is reversed. Plaintiffs shall recover their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(2).)
We concur: ROBIE, J., CANTIL-SAKAUYE, J.