YOU ARE HEREBY NOTIFIED THAT ON February 10, 2006 at 9:00 a.m. or as soon thereafter as counsel can be heard in department No. 16 of this Court located at 111 North Hill Street, Los Angeles, Defendant Ivan Newman’s Demurrer will be heard. The demurrer will be based on this notice, the points and authorities set forth herein-below, and the complete file and records of this action.

1. Introduction

Plaintiffs’ Nevil Green and Eugene Detchemendy allege that the defendants refused to pay the plaintiffs’ real estate commissions owed them. They further allege that the defendants used deceit and fraud, and failed to deal with them in good faith. In addition to the usual claim of breach of contract, they have thrown in breach of implied contract, two common counts and a promissory estoppel.

Plaintiff Eugene Detchemendy was practicing real estate business without a license and never had a written contract with any of the parties of this action. In fact, without a license he could not have a valid contract with any of the parties to this action.

Plaintiff Eugene Detchemendy conspired with Nevil Green and an employee of Autozone to extract from the Defendants a commission which the plaintiffs did not earn. Furthermore, even if Plaintiffs had been acting in good faith, the contract requirements necessary to earn a commission had never been satisfied.

2. Statement Of Facts

In the beginning of 2002, the Defendant Newmans started looking for a new lessee for their property on Adams Blvd. They put up 6 billboards on their premises and two very large roof signs on the property with their phone number and advertising the property open for lease. At or around this time Autozone was loosing a lease for property across from the Newmans’ Adams property. Randy Wilson works for Autozone and is responsible for finding and leasing property for use by Autozone. He could not help but see the Newmans’ lease by owner signs that were visible from the Santa Monica Freeway and the heavily traveled boulevards of La Brea and Adams. These signs generated many inquires from interested companies.

Plaintiff Eugene Detchemendy is a friend and former business associate of Randy Wilson. They both in the past worked for Chief Auto Parts. Eugene was neither a licensed real estate broker nor a real estate salesman working for a broker. Plaintiff Nevil Green was a licensed real estate salesman working for the broker, Grubb and Ellis. Mr. Green had been previously acquainted with Eugene Detchemendy and/or Randy Wilson.

On or around June of 2002, Plaintiff Nevil Green began aggressively pursing the Newmans to hire him as a real estate agent. The Newmans were reluctant to sign with him since they were already getting inquiries on their own and saw no reason to hire a real estate agent. Mr. Green assured them that he could quickly find them a lessee who would pay them much more that they could get on their own.

The Newman’s were still reluctant to sign and did so only with the stipulation that Mr. Green would have only four months and that if he needed more time to get a customer to sign a lease, that Mr. Green would have to secure a written offer for $125,000 or better by October 26, 2002. He also agreed that the Newmans would not have to pay him a commission for unsolicited offers that they received independently of him.

In regards to an Autozone-Newman lease, it is not known when discussions between Randy Wilson, Eugene Detchemendy, and Nevil Green began. There is certainly a good possibility that they began before Nevil Green started to pursue the Newmans for a listing. Never-the-less, Randy Wilson on behalf of Autozone, could have contacted the Newmans directly. Instead, he contacted his friend Eugene Detchemendy, who got an agreement from Nevil Green to evenly split any commission they might get from an Autozone-Newman lease.

Shortly after obtaining the listing agreement from the Newman’s, Autozone was presented to the Newmans. Negotiations started but Autozone upper management was not willing to make an offer close to $125,000. In August of 2002, Mr. Green attempted to get an addendum to the June 24, 2002 contract. The addendum was an attempt to get the Newmans to agree to pay Mr. Green a commission on unsolicited offers, if Mr. Green could negotiate and get a better offer. Ivan Newman being suspicious rejected the proposed addendum. Mr. Green did not give up and contacted Barbara Newman in Palm Springs and was able to obtain a signature from her.

Mr. Green failed to get a written offer from any company by October 26, 2002. Ivan had Mr. Green contacted after at the beginning of November 2002 for the return of the keys for the Adams property. Mr. Green sent a letter to the Newmans on November 25, 2002 with a "registration list." The list contained one hundred or more company names. Mr. Green apparently had made a mass mailing of brochures with the Newmans’ Adams property advertised in them. The letter informed the Newmans that if any of the companies signed a lease with them, that they would owe Mr. Green a commission.

It should be noted that neither Green, nor Wilson are now working for the companies that employed them at the time of the attempted real estate transaction. Grubb & Ellis never sent an invoice or statements to the Newman’s nor did Grubb & Ellis legal department ever make a demand or filed a claim for the alleged commissions owed from the Newmans. Instead these claims were assigned to their salesman Nevil Green at or around the time he left their employment.

3. Defendant Demurs all of Plaintiff Eugene Detchemendy’s Causes of Action On The Grounds, That In Order To "Bring Or Maintain Any Action" Requiring A Real Estate Brokers License, A Person Must Allege And Prove "That He Was Duly Licensed."

The State of California in order to protect its citizens from unscrupulous business persons, requires that those individuals conducting real estate business as defined in Business and Professions Code (BPC) §§ 101.30, 101.31(b) be either a licensed real estate broker or a licensed real estate salesman employed by a licensed real estate broker.

BPC §10130 states that, " It is unlawful for any person to engage in the business, act in the capacity of, advertise or assume to act as a real estate broker or a real estate salesman within this state without first obtaining a real estate license from the department." BPC § 10131 "A real estate broker within the meaning of this part is a person who, for a compensation or in expectation of a compensation, regardless of the form or time of payment, does or negotiates to do one or more of the following acts for another or others: . . . (b) Leases or rents or offers to lease or rent, or places for rent, or solicits listings of places for rent, or solicits for prospective tenants, or negotiates the sale, purchase or exchanges of leases on real property, or on a business opportunity, or collects rents from real property, or improvements thereon, or from business opportunities." BPC §10132.states that "A real estate salesman within the meaning of this part is a natural person who, for a compensation or in expectation of a compensation, is employed by a licensed real estate broker to do one or more of the acts set forth in Sections 10131, 10131.1, 10131.2, 10131.3, 10131.4, and 10131.6." BPC §10136 states that, "No person engaged in the business or acting in the capacity of a real estate broker or a real estate salesman within this State shall bring or maintain any action in the courts of this State for the collection of compensation for the performance of any of the acts mentioned in this article without alleging and proving that he was a duly licensed real estate broker or real estate salesman at the time the alleged cause of action arose."
According to BPC § 10136 to bring a cause of action for the collection of compensation for acts requiring a license one must allege that he was duly licensed. While Paragraph 1 of the amended complaint states that Plaintiff Green was a "real estate agent duly licensed", Paragraph 2 of the amended complaint alleges that Plaintiff Detchemendy was an "independent real estate consultant doing business in the City of Los Angeles." Section 10130 makes it illegal to practice Real Estate business without a license. Section 10131(4) defines some of the acts requiring a real estate license as soliciting or negotiating leases. BPC §10132 defines someone as being a real estate salesman as one employed by a licensed real estate broker. Since the complaint fails to allege that Plaintiff Detchemendy was a licensed real estate broker or licensed real estate salesman working for a licensed real estate broker, Plaintiff Detchemendy can not bring an action for the commission alleged in this complaint.

4. Defendant Demurs all of Plaintiff Eugene Detchemendy’s Causes of Action On The Ground That Civil Code § 1624 (A)(4) Requires That The Agreement Involving A Real Estate Lease Be In Writing And That Plaintiff Detchemendy Was Never A Party To A Written Agreement With The Defendants.

Plaintiff Detchemendy was not included in the first four causes of action. The first three causes of action reference a written listing agreement with Grubb and Ellis. It was never alleged in the complaint that Mr. Detchemendy was a party to said agreement. Therefore, any other agreement between he and the Newmans is unenforceable.

Civil Code §1624 states that, "(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 lease real estate for a longer period than one year, or to procure, introduce, or find a purchaser or seller of real estate or a lessee or lessor of real estate where the lease is for a longer period than one year, for compensation or a commission."

It is clear that Plaintiff Detchemendy can not claim breach of contract since the contract had to be in writing and he had none. Instead, he claims breach of implied contract, promissory estoppel and quantum meruit. This is not the first time a plaintiff has tried to plead around the prohibitions of Civil Code § 1624 when that plaintiff had no written contract. The courts ruled against those attempts.

In regards to Plaintiff Detchemendy’s fifth cause of action for breach of implied contract, Civil Code § 1624 does not distinguish between express and implied contracts, it simply states that the "contracts are invalid. . . .."

In regards to quantum meruit and promissory estoppel the courts have ruled against a broker without a written contract. "Unless a broker's employment is evidenced by a writing, he cannot recover either under an oral contract or in quantum meruit.. . [Citations]. The procurement of a purchaser is not such performance as will entitle a broker to recover a commission in the absence of a compliance with the requirements of section 1624. .[Citations] . " (Augustine v. Trucco , 124 Cal.App.2d 229, 238)

The courts have held that in actions for unpaid real estate commissions, the actions that fail to satisfy the writing requirements of the statute of frauds, also fail to state a cause of action for promissory estoppel. These cases are based on the holding that it is not considered unjust enrichment, because a real estate broker is assumed to have knowledge of the writing requirements and that a contrary holding would undermine the purpose of the writing requirement. "[A]n estoppel to plead the statute of frauds cannot be predicated upon the ... refusal to comply with an oral promise to pay a [real estate] commission." (Keely v. Price (1972) 27 Cal.App.3d 209, 212)

"[R]elating to agreements for real estate brokers' commissions. The law has traditionally had little sympathy with the broker who has failed to sign up his client."( (Augustine v. Trucco (1954) 124 Cal.App.2d 229, 237-238)

5. Defendant Demurs Plaintiff Greens First Cause Of Action, Breach Of Contract On The Grounds That Exhibits Attached To The Complaint Show That The Cause Of Action Is Fatally Defective.

Plaintiff Green in paragraph 10 of the First Amended Complaint references Exhibit A in support of the breach of contract cause of action. This exhibit includes a listing agreement between Grubb and Ellis, and the Defendants, and a proposed addendum dated August 26, 2002. When the allegations of the amended complaint are taken together with the documents attached in Exhibit A of the amended complaint, it is evident that the listing agreement expired without a commission being earned by Grubb and Ellis.

"[F]acts appearing in exhibits attached to the complaint will also be accepted as true and, if contrary to the allegations in the pleading, will be given precedence. ((Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604)

The rules of contract interpretation are defined in the civil code sections 1635 through 1661.

CC §1640. States, " When, through fraud, mistake, or accident, a written contract fails to express the real intention of the parties, such intention is to be regarded, and the erroneous parts of the writing disregarded."

Plaintiff in paragraph 10 of the complaint quotes the listing agreement which is attached as exhibit A. The quote expresses the conditions upon which a commission would be paid; "during the Listing Period:. . . (b) a tenant is procured by or through Broker, Owner or any other person who is ready, willing and able to lease the Property . . . "(Note: the punctuation of paragraph 10 accurately quotes paragraph number 7 of the Listing Agreement)

If one reads the quote as punctuated, the restrictive clause "who is ready, willing and able . . . " follows "Broker, Owner or any other person." A correct grammatical reading of this sentence would indicate that the person through whom the tenant is procured must be "ready, willing and able." Since Plaintiff Green is alleging that he procured the tenant, then he must allege that he was ready willing and able to lease the property. He has not done this.

Plaintiff might argue that the above interpretation was incorrect and that Grubb and Ellis’s listing agreement form contained a grammatical error. If plaintiff, so argued then he would be admitting that he printed agreement contains mistakes, ambiguities, and uncertainties. He would have to argue that a strict and literal interpretation of the words did not accurately reflect the intentions of the parties.

Paragraph number 7 of the Listing Agreement, is in fine print, wordy, and confusing. It might be argued that this confusion is intentional and obscures the intent of the broker to get paid a commission whether or not the Broker procured the tenant. What the Broker probably meant by the quoted material in paragraph 7 was ‘ tenant who is ready . . . procured by any person’. The problem with such a wording for the Broker is that it makes transparent that if a willing tenant was had by means other than through the Broker, that the Newman’s would nonetheless owe the Broker a commission.

Conspicuously absent from the allegations in the amended complaint are the typed-in words added at the end of the Listing Agreement’s, paragraph number 7: "This clause applies only if Broker secures a written offer to lease or Buy prior to October 26, 2002 unless extended or mutually agreed otherwise." Since the typed in material was added "under special directions of the parties" to a printed material, the added material controls. (CC §1651)

Civil Code § 1651 states that "Where a contract is partly written and partly printed, or where part of it is written or printed under the special directions of the parties and with a special view to their intention, and the remainder is copied from a form originally prepared without special reference to the particular parties and the particular contract in question, the written parts control the printed parts, and the parts which are purely original control those which are copied from a form. And if the two are absolutely repugnant, the latter must be so far disregarded."

The typed-in, added wording is obviously intended to restrict Broker by requiring him to "secure a written offer to lease . . . " by October 26. Such a restriction prevents the broker from merely claiming that he was negotiating with a prospective lessee as a way of extending the agreement indefinably. Failure to secure the written offer by October 26, 2002, terminates the agreement unconditionally.

Furthermore, paragraph 7 of the listing agreement which contains the quote contained in paragraph 12 of the amended complaint defines the conditions upon which a commission must be paid. The material added by the Newmans requiring a "written offer to lease .." by October 26, 2002, not only defines when the listing agreement expires, but the overriding condition upon which the commission is to be earned. Merely procuring a tenant who is "ready, willing, and able" prior to the expiration of the listing agreement is insufficient: A written offer is required. Plaintiff Green failed to allege that such written offer had been secured prior October 26, 2002.

In Paragraph 14 Defendant Green alleges that negotiations with Autozone "continued uninterrupted" from the date of initial procurement until December 8, 2003. Plaintiff thus is claiming that negotiations went on uninterrupted and continuous for one year and a month, or over 400 days past the October 26, 2002 expiration date. Plaintiff is claiming in paragraph 27 of the amended complaint that the Defendants "intentionally dragged out the negotiations" in order to "evade" the obligation to pay a commission. He is, thus, alleging the Defendants in order to evade paying a $62,923.09 commission would give up over a year/s lease payments amounting to over $125,000 resulting in a loss of over $62,000.

Plaintiff failed to allege that a written offer to lease had been secured prior to October 26, 2002 as required. Plaintiff failed to allege this, because Plaintiff never received such an offer. Plaintiff had agreed to present such offers to the Defendants. Such written offer had never been presented.

CC §1654 state that " in cases of uncertainty not removed by the preceding rules, the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist".

6. Defendants Demure To The Second Cause Of Action For Breach Of Implied Covenant Of Good Faith And Fair Dealing On The Grounds That Plaintiff Fails To Allege Facts Sufficient To State A Cause Of Action.

The courts have held that in order to state a cause of action for breach of implied covenant of good faith and fair dealing, it must be alleged that there exits a special type of relationship between the parties: the defendant must be in a superior bargaining position to plaintiff(Rogoff v. Grabowski (1988) 200 Cal. App. 3d. 624, 631). Most cases alleging such a breach are brought against insurance companies or large institutions. In all such cases the alleged breaching party is the large institution or insurance company. Here, Plaintiff Green is asserting a claim assigned to him from an international real estate broker, Grubb and Ellis, against two individuals. In this case the larger of the unequal parties is alleging a breach by the smaller party. Since the Defendant is not in a vastly superior bargaining position to the Plaintiff, no cause of action for breach of implied covenant of good faith and fair dealing can be stated as a matter of law.

 

7. Defendant Demurs To Plaintiff Green For The Third Cause Of Action For Intentional Misrepresentation In Violation Of Civil Code §17104, On The Grounds That Plaintiff Failed To Allege With The Required Specificity Facts Necessary To State A Cause Of Action For Deceit, Civil Code §17104.

plaintiff Green alleges in paragraph 31 of the amended complaint that the Defendants when making the promise to pay a commission if earned never really intended to pay a commission if earned. No specific facts are alleged to support this allegation. Plaintiff merely alleges in a conclusory manner that Defendants did not pay because they never intended to pay. If allegations of fraud or deceit were that easy to claim, then every breach of contract complaint could contain a companion cause of action for fraud or deceit, by merely alleging that the defendant did not fulfil his or her promise, because he or she never intended to.

"In California, fraud must be pled specifically; general and conclusory allegations do not suffice. [Citations.] 'Thus " 'the policy of liberal construction of the pleadings . . . will not ordinarily be invoked . . . .' " [Citation.] []requirement necessitates pleading facts which "show how, when, where, to whom, and by what means the representations were tendered. [Citation.] " Murphy v. BDO Seidman (2003)113 Cal.App.4th 687, 692.

" Fraud is a charge that is easily made but less often substantiated. In order to establish a cause of action for fraud a plaintiff must plead and prove in full, factually and specifically, all of the elements of the cause of action. (Wilhelm v. Pray, Price, Williams & Russell (1986) 186 Cal.App.3d 1324, 1331 )

"General and conclusory claims of fraud will not suffice. (Ibid.; see also 5 Witkin, Cal. Procedure (3d ed. 1985) Pleading, § 662, p. 111.) . . .if plaintiff adduces no further evidence of fraudulent intent than proof of nonperformance . . . " (Conrad v. Bank of America (1996) 45 Cal.App.4th 133, 156-157) "Something more than nonperformance is required to prove the defendant's intent not to perform his promise." ((People v. Ashley (1954) 42 Cal.2d 246, 263).

8. Defendant Demurs To Plaintiff Green’s Fourth Cause Of Action For The Common Count, Restitution, Money Had And Received, On The Grounds That Plaintiff Fails To State Facts Sufficient To Constitute A Cause Of Action.

Plaintiff Green fails to allege any facts in his complaint that indicate the Defendants had received any money from Grubb and Ellis. Plaintiff, also failed to allege that defendants refused to return said money, it they had received it.

9. Defendant Demurs To The Fifth Cause Of Action For Both Plaintiffs For Breach Of Implied Contract On The Grounds That Implied Conduct Does Not Satisfy The Requirements Of Civil Code § 1624 (A)(4).

A contract is defined as being either express or implied. (CC§1619) An express contract is defined as one whose terms are in words. (CC§1620) An implied contract is one, the existence and terms of which are manifest by conduct. (CC§1621) A written contract is an expression in words. Therefore an implied contract does not satisfy the writing requirements of CC§1624(a)(4).

10. Defendant Demurs To The Fifth Cause Of Action For Both Plaintiffs For Breach Of Implied Contract On The Grounds That The Complaint Is Uncertain As The Time And Nature Of The Alleged Implied Facts Required To State Of Cause Of Action. (Code of Civil Procedure § 430.10(F)).

"Mere recitals, references to or allegations of material facts which are left to surmise are subject to a special demurrer for uncertainty." (Bernstein V. Piller, 98 Cal.App.2d 441,444)

11. Defendant Demurs To Plaintiff Green For Sixth Cause Of Action For Promissory Estoppel On The Grounds That Promissory Estoppel Can Not Be Asserted When The Alleged Promise Is Based Entirely Upon Promises Contained Within An Expressed Contract.

The courts have held that promissory estoppel is a substitution for consideration. The sixth cause of action alleges no promises not alleged in the written contract between Grub & Ellis, and the Defendants. Therefore all promises in regards to commissions were a part of a bargained for exchange and can not be used as the basis for promissory estoppel.

"In other words, where the promisee 's reliance was bargained for, the law of consideration applies; and it is only where the reliance was unbargained for that there is room for application of the doctrine of promissory estoppel." (Healy v. Brewster , 59 Cal.2d 455,463)

12. Defendant Demurs Plaintiff Green’s Fourth Cause Of Action, Restitution, Money Had And Received And Plaintiff Greens Seventh Cause Of Action Quantum Meruit On The Grounds Both Are Common Counts Based Entirely Upon An Express Contract That Is Defective.

"It is the established law of California that, if plaintiff is not entitled to recover under one count in a complaint wherein all the facts upon which his demand is based are specifically pleaded, it is proper to sustain a demurrer to a common count set forth in the complaint, the recovery under which is obviously based on the set of facts specifically pleaded in the other count." ( Hays v. Temple, 23 Cal.App.2d 690, 395)

13. Conclusion

Ivan Newman in pro per