Moghadam v. Realty

1

MEHDI AMINI MOGHADAM et al., Plaintiffs and Appellants, v. RODEO REALTY et al., Defendants and. Respondents.

B319620

California Court of Appeals, Second District, Eighth Division

April 17, 2024

NOT TO BE PUBLISHED

APPEAL from a judgment of the Superior Court of Los Angeles County No. 20STCV47310 Richard J. Burdge, Jr., Judge. Affirmed.

Law Offices of Farrah Mirabel and Farrah Mirabel for Plaintiffs and Appellants.

Manning &Kass, Ellrod, Ramirez, Trester, Fredric W Trester and Charles A. Mollis for Defendants and Respondents.

STRATTON, P. J.

After Mehdi Moghadam and Parvin Mirabadi (plaintiffs) purchased a Sherman Oaks condominium, they brought this action against the listing agents for the property, Rodeo Realty and Sarah Kotler (collectively the listing defendants), their own real estate agents, and the sellers of the property. Plaintiffs alleged all defendants knew plaintiffs wanted to rent the unit as income property, yet failed to disclose to them that the unit could not be rented for the first two years of their ownership.^[1] The Second Amended Complaint (SAC) includes causes of action for professional negligence, breach of contract, concealment, negligent misrepresentation, and negligent infliction of emotional distress against the listing defendants. The trial court sustained without leave to amend the listing defendants' demurrer. Plaintiffs appeal from the judgment of dismissal entered upon that ruling.

Plaintiffs contend the trial court erred in sustaining the demurrer to all five causes of action. With respect to the tort causes of action, plaintiffs contend the trial court erred in finding that the listing defendants did not have a duty to disclose the rental restriction to them and that they did not sufficiently plead specific acts and knowledge on the part of those defendants. Plaintiffs also contend the trial court erred in finding that the listing defendants were not bound by the terms of the purchase agreement between plaintiffs and the sellers. We affirm the judgment.

BACKGROUND^[2]

Plaintiffs an elderly couple, hired defendants Keller Williams Realty Westlake Village and its agent Mark Rader to represent them in purchasing a property to generate rental income. In August 2019, plaintiffs made an offer to purchase a residential unit in a building located at 14960 Dickens Street, Sherman Oaks, California.

Specifically, plaintiffs executed a standard form residential purchase agreement on August 21, 2019. Trustees for the seller (a family trust) signed the agreement on August 23 and 24, 2019, subject to acceptance of their counteroffer, which sought a higher purchase price and made some additions and deletions to the terms of the purchase agreement. Plaintiffs made a counteroffer involving only the purchase price and seller accepted the purchase price but made another counteroffer adding two terms to the purchase agreement not relevant here. Plaintiffs accepted that counteroffer on August 26, 2019. The purchase agreement and counteroffers are attached as Exhibit 1 to the SAC.

Paragraph 9.A of the purchase agreement states that the buyer intends to occupy the property as buyer's primary residence. Both plaintiffs initialed the page on which this statement is found, as well as providing their full signatures at the end of the agreement.

In the SAC itself, plaintiffs allege they "informed all the Defendants, including real estate agent, Mark Rader, that the subject property was an investment purchase and they intended to use the purchased real estate for rental income. They had a tenant ready to rent the premises." Plaintiffs do not indicate when they communicated this intent to any defendant.

Escrow closed on September 11, 2019. "Right after close of escrow, on September 11, 2019, Defendant Mark Rader" listed the property for rent. "[O]n or about October 23, 2019, Defendant Mark Rader informed Plaintiffs that he just learned that Plaintiffs, as new owners, were not allowed to rent the newly purchased unit for rent, for the first two years of their ownership of the unit." Rader "admitted that he had failed to review or adequately inquire as to the subject property's Home Owner Association ('HOA') of Dickens Oaks Homeowners Association regulations, Covenants, Conditions, and Restrictions ('CC&R') and thus, did not know and failed to advise Plaintiffs that the HOA's CC&R banned new homeowners from renting the property for two (2) years." Plaintiffs allege Rader also failed to inform them that the CC&R limited the number of tenants to "35% of the building (18 owners) at any one time." The first page of the CC&R is attached to the SAC as Exhibit 2. Both restrictions are listed on this page.

Plaintiffs allege Rader "was aware that it was his fault and a serious failure to inquire and disclose material facts to the buyers so he told Plaintiffs to place a claim against his company to claim damages. He also volunteered to sell the subject property at a higher price and also find a similar rental unit without subject restrictions and without charging a commission. Plaintiffs agreed to and listed the subject property with Defendant Rader in order to sell as long as he finds a comparable unit to purchase but he was unsuccessful in finding a similar rental unit." Once COVID-19 struck, plaintiffs decided not to sell their unit because of their ages (87 and 76 years old) and "due to lockdown and their ages, they could not have had safe interactions(s) with anybody without endangering their lives."

Plaintiffs allege the trustees of the seller "clearly knew that the subject property was not rentable by Plaintiffs under the HOA's CC&R" but "failed to advise the Plaintiffs of such important restrictions and failed to provide them with a statement to apprise them of such a fact." Plaintiffs further allege the listing defendants "were aware of the rental restrictions prior to the close of escrow" but they "failed to make required statutory and contractual disclosures of producing the HOA's CC&R and also failed to provide to the Plaintiffs a statement, expressly informing Plaintiffs of the rental restriction forbidding them of renting the property for two years."

Plaintiffs allege five causes of action against the listing defendants and added more factual allegations as to these defendants. In the third cause of action for professional negligence, plaintiffs allege that listing defendant Kotler sent an email to Rader "dated September 3, 2019, confirming that as of that date escrow was awaiting receipt of the HOA's CC&R documents." They also allege that Rader "informed Plaintiffs that he did discuss Plaintiff's intention of buying [the unit] as a rental and investment property with the Defendant agent Kotler." Plaintiffs allege they discussed their intent with Rader before they made an offer, but do not disclose a date when Rader discussed their intent with Kotler. Plaintiffs further allege "[p]rior to close of escrow, each of the Defendants knew or should have known that the HOA regulations for the subject condominium and the CC&R covenants were material to the subject transaction."

In the fifth cause of action for concealment, plaintiffs allege "[e]ach Defendant had a duty to inform Plaintiffs and provide them with a statement about the HOA's CC&R restriction prior to the escrow closing date of September 11, 2019. Just sending an email with a link to HOA website for documents was inadequate to inform elderly Plaintiffs whose English was their second language and had absolutely no proficiency in real estate or legal terminology, of such an important restriction, buried in multiple HOA documents." Plaintiffs do not provide a date when the email was sent.

In the sixth cause of action for negligent misrepresentation, plaintiffs allege Rader "informed Plaintiffs that he talked to Defendants, Sellers' agent and broker, Sara Kotler and Rodeo Realty, about Plaintiffs' intention to rent the subject property and they told him that the property could be rented and there were no rental restrictions." Plaintiffs also allege "[e]ach Defendant represented to Plaintiffs directly or indirectly through their agents, that the subject property could be rented upon purchase but such representation was not true." Plaintiffs do not provide any information about when these conversations occurred.

After plaintiffs filed the action, the listing defendants demurred to both the complaint and the first amended complaint. The trial court sustained both demurrers with leave to amend. Plaintiffs filed the SAC, the listing defendants again demurred, and the trial court again sustained the demurrer, this time without leave to amend.

DISCUSSION

"A demurrer tests the legal sufficiency of the factual allegations in a complaint. We independently review the superior court's ruling on a demurrer and determine de novo whether the complaint alleges facts sufficient to state a cause of action or discloses a complete defense. [Citations.] We assume the truth of the properly pleaded factual allegations, facts that reasonably can be inferred from those expressly pleaded and matters of which judicial notice has been taken. [Citations.] We liberally construe the pleading with a view to substantial justice between the parties [citations]; but, '[u]nder the doctrine of truthful pleading, the courts "will not close their eyes to situations where a complaint contains allegations of fact inconsistent with attached documents, or allegations contrary to facts which are judicially noticed." '" (Ivanoff v. Bank of America, N.A. (2017) 9 Cal.App.5th 719, 725-726.)

"On appeal from a judgment of dismissal entered after a demurrer has been sustained without leave to amend, unless failure to grant leave to amend was an abuse of discretion, the...