Lark Ann Cobb etc. v. Todd H. Temanson etc.

Case Number

23CV04113

Case Type

Hearing Date / Time

Wed, 09/18/2024 - 10:00

Nature of Proceedings

Motion of Defendant Todd H. Temanson to Strike Portions of Second Amended Complaint

Tentative Ruling

For Plaintiff Lark Ann Cobb, individually and as trustee of the LarkTown Trust: Brant K. Berglund, John J. Thyne, Thyne Taylor Fox Howard, LLP                                   

For Defendant Todd H. Temanson, individually and as trustee of the HotAirJazz Living Trust: Robert A. Aronson                                  

RULING

Both of the following matters will be called on the 10 am Calendar; no appearance required on the 8:30am calendar.

Law & Motion matter:

For the reasons set forth herein, the motion of defendant Todd H. Temanson to strike portions of the second amended complaint is denied.

Defendant Todd H. Temanson shall file and serve his answer to plaintiff’s second amended complaint on or before October 2, 2024.

Case Management Conference Matter:

CMCS filed by Plaintiff 9/3/2024; All parties served; jury trial requested, 5-7 day estimate; no trial date set; (1) Breach of Fiduciary Duty; (2) Constructive Fraud; (3) Negligence; (4) Unjust Enrichment/Restitution; (5) Negligence; In May 2021, with TEMANSON acting as her real estate agent, COBB began pursuing a home purchase (1051 Holly, Carpinteria, CA 93013). TEMANSON coerced COBB into putting him on title to the property as a 50% owner despite COBB being responsible for 100% of the payments towards the mortgage and loans. COBB requests compensatory, exemplary, and punitive damages where applicable. She also requested injunctive relief. Filed a 2^nd amended complaint 6/18/24.

Motion to strike filed 8/7 and set for 9/18.

CMCS by Defendant filed 9/16/24; acknowledges trial and MSC date; court trial – 4 day estimate; discovery will be completed on time.

At the 3/20/24 the Court set a trial date. A MSC date and this final CMC date. MSC set for 2/21/2025; TCC set for 3/19/2025.

Background

This action commenced on September 20, 2023, by the filing of the original complaint by plaintiff Lark Ann Cobb (“Cobb”) against defendant Todd H. Temanson (“Temanson”) setting forth causes of action for breach of fiduciary duty, fraud and negligence.

On March 15, 2024, Cobb filed his first amended complaint (“FAC”) against Temanson, setting forth causes of action for breach of fiduciary duty, constructive fraud, extortion, unjust enrichment/restitution, and negligence.

Cobb filed a demurrer to the FAC and a motion to strike allegations and the prayer for punitive damages in the FAC. On June 5, 2024, the demurrer was sustained, with leave to amend, as to the second cause of action for constructive fraud and the third cause of action for extortion. It was overruled in all other respects. The motion to strike was granted with leave to amend.

Cobb filed the operative second amended complaint (“SAC”) on June 18, 2024, setting forth causes of action for: (1) breach of fiduciary duty; (2) constructive fraud; (3) unjust enrichment/restitution; and (4) negligence. Cobb again seeks to strike allegations and the prayer for punitive damages.  Temanson opposes the motion.

As alleged in the SAC:

Plaintiff Lark Ann Cobb and defendant Todd H. Temanson met in early 2018. (SAC, ¶ 10.) Temanson is and was a licensed real estate broker and developer. (Ibid.) Cobb and Temanson began dating in June 2020. (Ibid.)

In August 2020, Temanson offered to assist Cobb’s friends with buying a house. (SAC, ¶ 11.) Temanson waived his broker’s fee, which was applied to the buyers’ closing costs. (Ibid.) This process led Cobb and her friends to believe that Temanson was an honest and trustworthy friend. (Ibid.)

In May 2021, Cobb began looking to purchase a home in Carpinteria where she lived and worked. (SAC, ¶ 12.) Temanson offered to act as Cobb’s agent, as he had done with Cobb’s friends. (Ibid.)

At that time, Cobb worked as a registered nurse and had enough income to qualify for a bank loan, but lacked a down payment. (SAC, ¶ 13.) Cobb’s mother offered to contribute toward a down payment and Cobb’s friend Renee Henry (“Henry”) offered to lend her money if needed. (Ibid.) With Temanson acting as her real estate agent, Cobb made offers on two properties which were not accepted. (SAC, ¶ 14.)

On July 6, 2021, Cobb saw a “for sale” sign on a house across the street from her work. (SAC, ¶ 16.) Later that day, Cobb told Temanson about that house, located at 1051 Holly Lane, Carpinteria (the Property), and said she wanted to move forward with an offer. (SAC, ¶¶ 4, 16.)

On July 7, 2021, Cobb signed an Indemnify and Hold Harmless Agreement at the request of Temanson, that pertained to one of those unaccepted offers, which stated that Temanson would not take a commission from the purchase even though he is a licensed broker. (SAC, ¶ 15.) The agreement was similar to the agreement Temanson had Cobb’s friend sign. (Ibid.)

On July 12, 2021, Temanson presented an offer on behalf of Cobb to buy the Property for $830,000. (SAC, ¶ 17.) The offer included a provision that that the Buyer had the sole and exclusive right to assign the entire purchase agreement at any time prior to the close of escrow to any entity or joint ownership which still included Cobb as a buyer. (SAC, ¶ 18.) Cobb always intended to be the sole owner of the Property. (Ibid.) When Cobb questioned Temanson about this language, Temanson assured Cobb that there was nothing to worry about and that this was not unusual when making an offer. (SAC, ¶ 19.) The same day that the offer was presented, Temanson asked Cobb to sign another indemnity agreement similar to the first indemnity agreement but including additional language of a waiver of claims of theft and misrepresentation. (SAC, ¶ 20.)

The money for the down payment came from three sources. $30,000 came from Cobb’s birth mother, who signed a gift letter, which was deposited directly into escrow. (SAC, ¶ 21.) $23,500 came from a first loan from Renee Henry, signed by Cobb as the sole borrower. (Ibid.) $136,643.23 came from a second loan from Henry. (Ibid.) Henry said she would feel more comfortable if someone co-signed the larger loan. (Ibid.) Temanson agreed to be a co-signer. (Ibid.) Temanson did not condition his co-signing the loan with receiving an ownership interest in the property but rather made it seem as if he was agreeing to co-sign out of the goodness of his heart as a favor to his girlfriend. (Ibid.)

Cobb would have chosen a different co-signor if Temanson had requested a 50 percent share in the Property. (SAC, ¶ 22.) This was not discussed at the time Temanson co-signed the loan. (Ibid.)

Temanson offered to personally draft the loan documents, arranging for the funds to be wired directly to his own bank account. (SAC, ¶ 23.) Instead of distributing the

funds to Cobb or the escrow company, Temanson structured the loan to be sent directly to him, in order to gain leverage and coerce Cobb later in the transaction. (Ibid.)

Per Temanson’s instructions, the money was wired from Henry’s account into Temanson’s account in two installments, and then wired to escrow. (SAC, ¶ 24.) The rest of the purchase price, $660,100 was funded through a mortgage held solely by Cobb. (Ibid.)

On August 30, 2021, Temanson signed two gift letters. One gift letter was for $24,900, previously transferred to escrow on August 23—it is unclear where the additional $1,400 came from. (SAC, ¶ 25.) The second gift letter was for $170,000, stating that the money would be gifted at close of escrow (Ibid.) In the gift letters, Temanson referred to himself as Cobb’s fiancé, but they were not engaged to be married. (Ibid.) Temanson was deliberately using his romantic relationship with Cobb as a manipulation tactic to unduly influence Cobb and gain an advantage in COBB’s real estate transaction. (Ibid.)

On August 31, 2021, without Cobb’s knowledge, Temanson sent an email instructing escrow to put title to the Property as tenants in common with 50 percent to Larktown Trust (Cobb’s trust) and 50 percent to HotAirJazz Trust (Temanson’s trust). (SAC, at p. 1 & ¶¶ 2, 26.) This was the first time Temanson revealed that he wanted to be on the deed at all rather than Cobb being the 100 percent owner. (Ibid.) The email was sent at a time when Cobb had limited access to her personal email and was sent with over 80 other emails, by Temanson, in two days. (SAC, ¶ 27.)

Around September 2, 2021, the escrow officer contacted Cobb to verify and discuss the vesting information. (SAC, ¶ 28.) Cobb responded that she would discuss the matter with Temanson. (Ibid.) Temanson told Cobb that he believed he had to be on title for the sale to go through. (SAC, ¶ 29.) Cobb asked the escrow officer and the loan broker if this was true; they both said it was not true and advised Cobb to seek legal counsel. (Ibid.) On September 3, Temanson took Cobb to see Temanson’s attorney, Dan Higson, to establish a trust and prepare estate planning documents for Cobb. (SAC, ¶ 30.) Cobb asked about Temanson’s request to be on title 50 percent, to which Higson told Cobb that she should retain an attorney of her own and that he could not advise her. (Ibid.)

After Cobb and Temanson left Higson’s office Cobb told Temanson that she was going to contact attorney Dana Longo. (SAC, ¶ 31.) Temanson objected to the idea of Cobb consulting a lawyer, arguing that it was unnecessary and that Cobb could not afford it. (Ibid.) Temanson insisted that consulting an attorney showed that Cobb did not trust him. (Ibid.) As a result, Cobb did not consult an attorney. (Ibid.)

On September 6, 2021, Cobb signed documents establishing the Larktown Trust. (SAC, ¶ 32.) Cobb also signed documents giving Temanson power of attorney for healthcare and durable power of attorney for financial purposes. (Ibid.) Cobb’s estate planning documents have since been revised to remove Temanson’s name. (Ibid.)

On September 7, 2021, Cobb sent an email to the escrow officers and others, including Temanson, with instructions to place 100 percent ownership in the Larktown Trust. (SAC, ¶ 33.) Temanson did not respond to this email. (Ibid.) This began a 24-hour period of intensified pressure by Temanson, including a campaign of threats, manipulation, confusion, coercion, and extortion via hours of phone call with Cobb during her workday and late into that night. (SAC, ¶ 34.) That same day, the $136,000 from the second loan from Henry posted to Temanson’s account. (Ibid.) Temanson became overtly threating, stating that if he was not on title, the entire transaction would fall through. (SAC, ¶ 35.) Temanson had not transferred the borrowed funds to escrow, and he made it clear that being on title was his requirement. (Ibid.)

Several people advised Cobb to seek separate legal counsel. (SAC, ¶ 36.) When Cobb relayed this to Temanson, Temanson appeared angry and made it clear that if Cobb did not agree to putting him on title for fifty percent, Temanson would not transfer the money wired to him by Henry and Cobb would lose the money she had already contributed towards the purchase. (Ibid.) When Cobb questioned Temanson, Temanson told Cobb that she did not understand real estate and that “this is how real estate works.” (Ibid.) Temanson also said that having him on title would make things easier for both of them when they got married in the future. (Ibid.) Temanson told Cobb that the arrangement could always be easily changed if she did not like it and threatened that if Cobb did not put him on title, she would lose the Property, all the down payment money, and their relationship. (Ibid.) Cobb explained that this arrangement would not protect her children. (Ibid.)

Later that night, Temanson told Cobb holding the property as tenants in common would protect her children. (SAC, ¶ 37.) Temanson followed up with four emails containing attachments of agreements that Cobb found convoluted and difficult to understand. (Ibid.) In reality, the agreements did not protect Cobb or her children. (SAC, ¶ 38.) Temanson deceived Cobb about the tenants in common agreement in order to manipulate Cobb into changing the vesting instructions to put Temanson on title to the Property as a fifty percent owner. (Ibid.)

After employing significant and various forms of persuasion and coercion, Temanson convinced Cobb to reverse the vesting instructions Cobb had sent. (SAC, ¶ 39.) On September 8, 2021, Temanson dictated to Cobb what to write in an email to escrow to add Temanson as a fifty percent owner. (Ibid.)

On September 16, 2021, the loan documents were fully executed and Temanson transferred the money he was holding into escrow. (SAC, ¶ 40.) Escrow closed on September 22. (Ibid.)

Soon thereafter, Cobb received a check for approximately $21,000. (SAC, ¶ 41.) Temanson led Cobb to believe that this was the money he was giving her from his commission to pay for renovations. (Ibid.) Later Cobb found out from the loan broker that this money was reimbursement for escrow overpayment. (Ibid.) Cobb also learned that Temanson applied $9,507 of his commission to closing costs and he received a check for approximately $11,243 from escrow as commission. (Ibid.)

On November 24, 2021, Cobb received the notice for payment of property taxes. (SAC, ¶ 42.) Cobb emailed Temanson indicating that she would take care of the bill, but Temanson paid the $8,738 in property taxes. (Ibid.)

On August 7, 2024, Temanson filed the present motion to strike allegations and the prayer for punitive damages in the SAC.

Cobb opposes the motion.

Analysis

“A notice of motion to strike a portion of a pleading must quote in full the portions sought to be stricken except where the motion is to strike an entire paragraph, cause of action, count, or defense. Specifications in a notice must be numbered consecutively.” (Cal. Rules of Court, rule 3.1322(a).)

Temanson moves to strike “the punitive damages allegations in paragraphs 75, in paragraph 4 in the Prayer For Relief, and any claims for punitive damages in the First and Fourth Causes of Action for Breach of Fiduciary Duty and Negligence, respectively, of the Second Amended Complaint.” (Notice of Motion, p. 2, ll. 1-4.) Temanson does not quote in full, as required, the language sought to be stricken from the first and fourth causes of action. As such, the court’s analysis will pertain to paragraph 75 of the SAC and the prayer for relief.

Paragraph 75 of the SAC alleges:

“COBB alleges that in making the false representations referenced herein to COBB and engaging in the actions and inactions described above, TEMANSON acted fraudulently, maliciously, and oppressively, with knowledge COBB would rely upon his false representations. Consequently, COBB is entitled to punitive and exemplary damages in an amount to be determined at trial which will be sufficient to punish TEMANSON.”

“The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading.” (Code Civ. Proc., § 436.) “Irrelevant matter” includes a “demand for judgment requesting relief not supported by the allegations of the complaint.” (Code Civ. Proc., § 431.10, subds. (b)(3), (c).) “The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.” (Code Civ. Proc., § 437, subd. (a).)

“[J]udges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.” (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.) To survive a motion to strike allegations of punitive damages, ultimate facts showing an entitlement to such relief must be pleaded. (Ibid.) In addition, the facts and circumstances constituting the claim for punitive damages must be set forth “with sufficient particularity to apprise the opposite party of what he is called on to answer, and to enable the court to determine whether, on the facts pleaded, there is any foundation [for the claim].” (Lehto v. Underground Construction Company (1977) 69 Cal.App.3d 933, 944.)  

“In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.” (Civ. Code, § 3294, subd. (a).) “ ‘Malice’ means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (Civ. Code, § 3294, subd. (c)(1).) “ ‘Oppression’ means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Civ. Code, § 3294, subd. (c)(2).) “ ‘Fraud’ means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.” (Civ. Code, § 3294, subd. (c)(3).)

While the term “despicable” is not defined in Civil Code section 3294, subdivision (c), the term includes “circumstances that are ‘base,’ ‘vile,’ or ‘contemptible.’ [Citation.]” (College Hospital Inc. v. Superior Court (1994) 8 Cal.4th 704, 725.)

The paragraph that Temanson seeks to strike, paragraph 75, is contained under the second cause of action, but for each subsequent cause of action that paragraph is also incorporated by reference. Temanson argues that his counsel sought clarification as to whether Cobb was seeking punitive damages as to only the second cause of action for constructive fraud, and was told that they were being sought as to the first, second, and fourth causes of action. (Motion, p. 3, ll. 13-16.)

By way of the motion, Temanson’s argument primarily focuses on what Temanson is alleged to have known or understood regarding the ownership of the property, stating that “because Defendant was not aware that Plaintiff intended to own the house alone, and because Defendant was requiring to be on title to protect his obligation to repay the Henry Loan, there was no evil intent on the part of Defendant, and no malice, fraud, or oppression can be found, and Defendant’s conduct cannot be considered despicable.” (Motion, p. 6, ll. 4-8.) To a large extent, in both the motion and the reply, Temanson improperly argues the merits of his case rather than the sufficiency of the allegations in the SAC.

As noted above, the punitive damages language is included in the SAC under the second cause of action for constructive fraud. Punitive damages are recoverable for fraud actions involving intentional misrepresentation. (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1241.) “[F]raud alone is an adequate basis for awarding punitive damages.” (Glendale Fed. Sav. & Loan Assn. v. Marina View Heights Dev. Co. (1977) 66 Cal.App.3d 101, 135.) 

“ ‘The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘ “scienter” ’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.’ [Citations.]” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) Cobb has pled all of the essential elements of fraud.

To the extent that there are other facts that Temanson argues should have been pled by Cobb: “Less specificity should be required of fraud claims “ ‘when ‘it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy,’ ” [citation]; “ ‘[e]ven under the strict rules of common law pleading, one of the canons was that less particularity is required when the facts lie more in the knowledge of the opposite party. . . .’ ” [Citation.] (Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384.)

 

Allegations of “knowledge” and “intent” are allegations of facts, which are sufficiently alleged through use of the term. (See City of Pomona v. Superior Court (2001) 89 Cal.App.4th 793, 803 [“Allegations of the defendant’s knowledge and intent to deceive may use conclusive language.”].)

The court has reviewed the allegations contained in the SAC, takes them as a whole, the subparts in context, assumes their truth, and finds that they are sufficient, at the pleading stage, to overcome the motion to strike. The allegations are sufficiently pled with particularity. A reasonable trier of fact could determine that punitive damages are appropriate based on the facts as alleged. Of course, it is still incumbent on Cobb to prove, by clear and convincing evidence, that Temanson acted with oppression, fraud, or malice. The motion to strike will be denied.