Kerr v. Jeld-Wen

Filed 4/12/07 Kerr v. Jeld-Wen CA1/4

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FOUR

The trial court sustained respondent Jeld-Wen, Inc.s (Jeld-Wen) demurrer to appellant James Kerrs fraud cause of action without leave to amend. Later, it denied Kerrs motion for leave to amend his complaint. Kerr appeals from the subsequent judgment of dismissal, arguing that the trial court abused its discretion (1) by sustaining the demurrer without leave to amend and (2) by denying his motion to amend the complaint. We affirm the judgment.

I. FACTS^[1]

A. Underlying Case

In fall of 2004, appellant James Kerr went to the Ukiah branch of defendant Home Depot U.S.A., Inc. (Home Depot) to purchase windows and doors for his new home. He spoke with Randy Taylor, a Home Depot employee, and told him of his need for doors and windows of stain grade, of uniform color and without visible finger joints. Taylor assured Kerr that he could provide the specified products. A representative of Jeld-Wen, an Oregon corporation, made similar assurances to Kerr. On January 8, 2005, Kerr paid Home Depot approximately $25,000 for these Jeld-Wen products.

In late February 2005, the windows and doors were delivered to Kerrs existing home, although they were to have been delivered to the new home site. Delivery was made without Kerrs permission, damaging his landscaping. These items were not stain grade, were not uniformly colored and had visible wood joints throughout. Kerr complained to Home Depot, which reordered the products several times, but the store ultimately concluded that it was unable to obtain them as specified. Home Depot refused to refund his money or replace the merchandise with products more suitable for Kerrs needs. Kerr paid to have his contractor install some of the items that met his specifications, but later removed them and installed replacement windows and doors, purchased from another vendor at a higher cost than the Jeld-Wen items.

In June 2005, Kerr filed a complaint against Home Depot and Jeld-Wen alleging three causes of action: breach of contract against Home Depot; fraud against Home Depot and Jeld-Wen; and trespass against Home Depot. In July 2005, Home Depot and Jeld-Wen demurred to the fraud cause of action, asserting that it was legally and factually flawed. In August 2005, the trial court sustained the demurrer without leave to amend finding nothing in the allegation that would even come close to fraud . . . . In September 2005, Home Depot issued notice of entry of that order.^[2]

On November 7, 2005, Kerr filed a motion for leave to file a first amended complaint. (See Code Civ. Proc.,^[3] 473, subd. (a)(1).) The proposed amended complaint alleged a revised fraud cause of action against Jeld-Wen, and alleged two new causes of action against it for breach of warranty and trespass. Kerr accompanied his proposed amended complaint with a declaration, a supplemental declaration and his deposition testimony. (See former Cal. Rules of Court, rule 327(b) (hereafter former rule 327(b)) [renumbered as rule 3.1324(b) eff. Jan. 1, 2007].) He did not move for reconsideration of the trial courts August 2005 order sustaining the demurrer to the fraud cause of action. (See 1008, subd. (a).) On December 2, 2005, the trial court denied the motion to amend, finding that Kerr had failed to explain why the amended claims could not have been discovered before. It also chastised both sides about their unnecessary discovery disputes.^[4] On May 3, 2006, the trial court entered a judgment of dismissal for Jeld-Wen. On May 19, 2006, notice of entry of this dismissal was given to Kerr.

B. Related Proceedings

On March 17, 2006, Kerr filed a second action against Jeld-Wen in the trial court, alleging the same causes of action set out in his proposed amended complaintfraud, breach of warranty and trespass. In that action, Jeld-Wen moved to strike the complaint. The trial court granted the motion to strike as to the fraud and breach of warranty causes of action but allowed the trespass cause of action to stand.

II. APPEALABILITY

Preliminarily, we consider whether the judgment appealed from is appealable as a final judgment. (See 904.1, subd. (a)(1); see also Olson v. Cory (1983) 35 Cal.3d 390, 398.) An appeal may only be taken from one final judgment to avoid piecemeal appeals. (Tinsley v. Palo Alto Unified School Dist. (1979) 91 Cal.App.3d 871, 880; see also 9 Witkin, Cal. Procedure (4th ed. 1997) Appeal,  57-58, pp. 113-114.) If any cause of action remains between the parties after an appeal is filed, we lack jurisdiction to consider the merits of the appeal. (Morehart v. County of Santa Barbara (1994) 7 Cal.4th 725, 743.) However, in a multiparty suit, if there is a final judgment against one party, then the judgment is final as to that party. (Nguyen v. Calhoun (2003) 105 Cal.App.4th 428, 437; see also 9 Witkin, Cal. Procedure, supra, Appeal, 69, p. 126.)

In the underlying action, the trial court dismissed Kerrs action against Jeld-Wen in its May 2006 judgment. The only causes of action remaining in this action are alleged against Home Depot. Thus, the May 2006 judgment constitutes a final judgment of Kerrs claims against Jeld-Wen in the underlying action. The pendency of a separate action between Kerr and Jeld-Wen does not affect our jurisdiction in the appeal now before us.

III. DISCUSSION

A. Demurrer Without Leave to Amend

On appeal, Kerr first urges us to conclude that the trial court erred when it sustained Jeld-Wens demurrer to the fraud cause of action. A demurrer challenges whether a plaintiffs pleading states sufficient facts to state a cause of action. (See  430.10, subd. (e).) We make an independent review of an order sustaining a demurrer to determine if, as a matter of law, the complaint states facts sufficient to constitute a cause of action. (Montclair Parkowners Assn. v. City of Montclair (1999) 76 Cal.App.4th 784, 790.) We accept as true the factual allegations of the pleading but not any conclusions of fact or law contained in it. (Moore v. Conliffe (1994) 7 Cal.4th 634, 638.) We may also take judicial notice of facts subject to judicial notice. (Ibid.) The trial courts ruling on a demurrer will be upheld if supported by any ground, even one that was not relied on in that court. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.) On appeal, we assess if the factual allegations are sufficient to state a cause of action on any legal theory. (Ibid.)

Even if the demurrer was properly sustained, a trial court has discretion to grant or deny leave to amend. (Montclair Parkowners Assn. v. City of Montclair, supra, 76 Cal.App.4th at p. 790.) On appeal, a trial court may have abused its discretion if, after denying leave to amend, there is a reasonable possibility that a defect in the pleading can be corrected by an amended complaint. (Aubry v. Tri-City Hospital Dist., supra, 2 Cal.4th at p. 967.) The plaintiff must carry the burden of proving that an amended complaint could state facts sufficient to survive a demurrer. (See Hendy v. Losse (1991)54 Cal.3d 723, 742.)

Kerr claims that he stated two theories of fraudconcealment and promise without intent to performsufficient to withstand a demurrer. (See Aubry v. Tri-City Hospital Dist., supra, 2 Cal.4th at p. 967.) For its part, Jeld-Wen urges us to uphold the trial courts demurrer without leave to amend because it reasons inter alia that Kerrs fraud cause of action was based on facts alleging a future promise without evidence that Jeld-Wen had no intent to perform at the time the promise was made.

Fraud claims are subject to strict particularity of pleading requirements. A general pleading of fraud is not sufficient. Every element of a fraud cause of action must be alleged with specificity. The usual policy of liberal construction of a complaint does not apply if a fraud cause of action is defective in any material respect. This is so because a fraud claim constitutes a severe attack on character, and fairness dictates that the defendant receives a comprehensive warning of the charge to prepare a defense. (Committee on Childrens Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216.) The pleading must be sufficient to enable a court to determine if the fraud allegations have any foundation. (Id. at p. 217.)

The elements of fraud include an intent to induce the plaintiff to act or to refrain from action in reliance on the defendants false misrepresentation. (Barbara A. v. John G. (1983) 145 Cal.App.3d 369, 376.) A promise made without any intent of performing may constitute fraud. (See Civ. Code, 1710, subd. 4 [defining deceit]; Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 158-159 [action based on future promise is not fraud action] (Tarmann); see Building Permit Consultants, Inc. v. Mazur (2004) 122 Cal.App.4th 1400, 1414 (Building Permit).) The essence of this type of fraud is the existence of an intent not to perform at the time that the promise was made. (Building Permit, supra, 2 Cal.App.4th at p. 1414.)

An actionable allegation of fraud must pertain to past or existing material facts. Predictions of future events or actions are deemed to be opinions, not misrepresentations that could form the basis of a fraud action. Such opinions about future material facts are not actionable as fraud. (Tarmann, supra, 2 Cal.App.4th at p. 158.) To survive a demurrer, a fraud cause of action must specifically allege that at the time the defendant made the promise, he or she did not intend to perform it and that it was intended to induce the plaintiff to commit a particular act. (Building Permit, supra, 122 Cal.App.4th at p. 1414; Tarmann, supra, 2 Cal.App.4th at p. 159.) The mere failure to perform a promise made in good faith does not constitute fraud. [Citation.] (Building Permit, supra, 122 Cal.App.4th at p. 1414.) As a matter of law, making a promise with an honest but unreasonable intent to perform is not fraud. (See ibid.; Tarmann, supra, 2 Cal.App.4th at p. 159.)

In the case before us, Kerr notes that his original complaint alleged more than one theory of fraud. He seems to argue that even if he cannot state a cause of action for fraud as an intentional misrepresentation theory, the trial court erred in sustaining Jeld-Wens demurrer because he alleged other theoriesa promise made without intent to perform and concealment. His original complaint alleged that Jeld-Wen made a promise without intent to perform. However, the specific facts alleged do not support that theory of fraudthey are the same facts that Kerr alleged in support of his misrepresentation theory. These facts state nothing more than that Jeld-Wen made a promise that it had no reasonable grounds to believe it could deliver.

The original complaint alleged that Jeld-Wen made a future promisethat it represented that the interior wood on the windows and doors would be such that it would meet his requirements. It does not contain a necessary allegation that Jeld-Wen knew that this representation was falsethat is, that at the time that the promise was made, it had no intention to perform its promise. Instead, it alleged that Jeld-Wen had no reasonable ground for believing that the representation was true. Making a representation with an honest but unreasonable intent to perform is not fraud. (See Building Permit, supra, 122 Cal.App.4th at p. 1414; Tarmann, supra, 2 Cal.App.4th at p. 159.) As a matter of law, the facts alleged in the original complaint did not constitute fraud.^[5] Thus, the trial court properly sustained Jeld-Wens demurrer. Additionally, because there was no reasonable possibility that Kerr could amend his fraud cause of action to state that Jeld-Wen did not intend to perform at the time that it made its promise to perform, we find that the trial court did not abuse its discretion when sustaining the demurrer without leave to amend.

B. Motion for Leave to File an Amended Complaint

1. Fraud

First, Kerr urges this court to find that the trial court abused its discretion when it denied his subsequent motion for leave to amend his fraud cause of action. He argues that his proposed amended complaint included more specific information to bolster his original fraud cause of action. On appeal, we review a trial courts denial of a motion for leave to file an amended complaint under the abuse of discretion standard. Kerr, as the plaintiff, has the burden of proving that the trial court abused its discretion in this manner. (Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603, 612.)

Jeld-Wen argues inter alia that Kerr cannot amend his complaint in the face of the order sustaining its demurrer to that cause of action without first moving for reconsideration of that order. (See 1008.) When the trial court has entered an orderin this case, its August 2005 order sustaining the demurrer to the fraud cause of action without leave to amendand the affected party has received written notice of entry of that order, a motion for reconsideration is the exclusive means for setting aside that order. (Gilberd v. AC Transit (1995) 32 Cal.App.4th 1494, 1499.) Section 1008, subdivision (a) provides to any party affected by an order have an opportunity to seek reconsideration of it. The request for reconsideration must be made within 10 days of notice of the order and must be based on new or different facts. (See 1008, subd. (a).) In this matter, Kerr failed to move for reconsideration of the August 2005 order. His motion for leave to amend was not filed until November 7, 2005, well after written notice of entry of the order was given in September 2005. As Kerr did not challenge the order sustaining the demurrer without leave to amend, the trial court properly denied Kerrs motion to amend the fraud cause of action.

2. Breach of Warranty

Kerr also maintains that the trial court abused its discretion when it denied his motion to amend his complaint to add a breach of warranty cause of action against Jeld-Wen. (See 473, subd. (a)(1).) Jeld-Wen claims that Kerr cannot amend this cause of action because he did not justify why the matter was not pled in the original complaint. (See former rule 327(b).)

A motion to amend a pleading must be accompanied by a separate, supporting declaration specifying the effect of the amendment, why amendment is necessary and proper, when the facts giving rise to the amended allegations were discovered and why the request for amendment was not made earlier. (Former rule 327(b).) The trial court found that Kerrs motion failed to explain why the facts giving rise to the proposed amendment could not have been discovered earlier. In his November 7, 2005 declaration in support of his breach of warranty claim, Kerr asserts that he did not discover the basis of such a claim against Jeld-Wen until an October 14, 2005 deposition of Home Depot employee Randy Taylor. Although Kerr pled facts explaining when he discovered the basis for the amended allegation of breach of warranty against Jeld-Wen, neither his November 7, 2005 declaration nor his November 29, 2005 supplemental declaration adequately explained why he did not conduct this discovery earlier in the case, such that the request for amendment might have been brought in a more timely manner. (See former rule 327(b)(4).) The trial court was critical of both parties discovery practice. Under these circumstances, we cannot find that the trial court abused its discretion in denying Kerrs motion for leave to amend his complaint to add a cause of action for breach of warranty against Jeld-Wen.

3. Trespass

Finally, Kerr contends that the trial court should have granted him leave to amend to add a trespass cause of action against Jeld-Wen. Again, Jeld-Wen counters that the trial court properly denied this aspect of Kerrs motion because he did not justify his failure to include this claim in his original complaint. (See former rule 327(b)(4).) In his November 29, 2005 supplemental supporting declaration, Kerr admitted that he knew of Jeld-Wens trespass at the time that he filed his original complaint, and that its omission from the original complaint was an oversight. Kerrs failure to provide a satisfactory reason for failing to allege this claim against Jeld-Wen earlier was the reason why the trial court denied leave to amend. (See former rule 327(b)(4).) On appeal, Kerr has not satisfied his burden of proving that the trial court abused its discretion when it denied him leave to amend his complaint

to allege a new trespass cause of action against Jeld-Wen. (See, e.g., Leader v. Health Industries of America, Inc., supra, 89 Cal.App.4th at p. 612.)

The judgment is affirmed.

_________________________

Reardon, J.

We concur:

_________________________

Ruvolo, P.J.

_________________________

Sepulveda, J.

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^[1]As a demurrer assumes that the facts alleged in the challenged complaint are true, our statement of facts makes the same assumption. (See Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6.)

^[2]In his opening brief filed in September 2006, Kerr states that his remaining claims against Home Depot are now pending in the trial court. Home Depot is not a party to this appeal.

^[3]All statutory references are to the Code of Civil Procedure unless otherwise indicated.

^[4]In January 2006, Kerr filed a petition for writ of mandate in this court. We denied this petition on January 26, 2006, without opinion. (Case No. A112731.) Summary denial is not grounds for res judicata because the denial does not constitute a decision on the merits. (Hoversten v. Superior Court (1999) 74 Cal.App.4th 636, 640.)

^[5]Kerr also argues that his original complaint alleged fraud on a concealment theory. He offers no analysis of how his concealment theory differs from his other theories of fraud, nor does he cite any specific legal authority in support of that theory. When a point is merely asserted without argument or authority in support of a proposition, we deem the point to be without foundation. (See Atchley v. City of Fresno(1984) 151 Cal.App.3d 635, 647; French v. Construction Laborers Pension Trust (1975) 44 Cal.App.3d 479, 492; see also 9 Witkin, Cal. Procedure, supra, Appeal, 594, pp. 627-629.) Thus, we need not address this issue. (See, e.g., Atchley v. City of Fresno, supra, 151 Cal.App.3d at p. 647.)