Filed 2/16/24 Terranova v. Simba Growth CA4/2 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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
FOURTH APPELLATE DISTRICT
DIVISION TWO
CLINT TERRANOVA,
Plaintiff, Cross-defendant, and E078764 Appellant, (Super. Ct. No. CVPS2102798) v. OPINION SIMBA GROWTH, LLC,
Defendant, Cross-complainant, and Respondent;
ANGEL GARCIA,
Defendant and Respondent.
APPEAL from the Superior Court of Riverside County. Ronald L. Johnson,
Judge. (Retired judge of the San Diego Super. Ct. assigned by the Chief Justice pursuant
to art. VI, § 6 of the Cal. Const.) Affirmed.
Law Office of Brian C. Unitt, and Brian C. Unitt, for Plaintiff, Cross-defendant
and Appellant.
1 Lewis Brisbois Bisgaard & Smith, and Wendy S. Dowse, Defendants, Cross-
complainant and Respondents.
I.
INTRODUCTION
Clint Terranova entered into a contract with Simba Growth, LLC, agreeing to sell
his property to Simba for $470,000. A week later, Terranova backed out of the agreement
because he learned the fair market value (FMV) of the property was $600,000. He then
sued Simba and its managing member, Angel Garcia, for various claims all sounding in
fraud. Simba and Garcia (collectively, Defendants) responded by filing a cross-complaint
against Terranova alleging one cause of action for specific performance. After Terranova
amended his complaint, the trial court sustained Defendants’ demurrer to Terranova’s
operative First Amended Complaint (FAC) without leave to amend. The trial court then
granted defendant’s motion for summary judgment on their cross-complaint and entered
judgment for them on the cross-complaint and the FAC.
Terranova appeals, and we affirm.
II.
FACTUAL AND PROCEDURAL BACKGROUND 1 A. The FAC’s Allegations and Defendants’ Demurrers
1 We assume the truth of the facts as alleged in the FAC unless contradicted by judicially noticeable facts. (Stevens v. Superior Court (1999) 75 Cal.App.4th 594, 601.)
2 Terranova owns a house on North Avenida Caballeros in Palm Springs. In March
2021, Armand Arello and Oscar (last name unknown) came to Terranova’s home and
discussed buying it on behalf of Simba. During the discussions, Arello and Oscar
represented the FMV of the property to Terranova. They explained that they worked
with a real estate agent (Garcia) and “their own market comparisons of other properties in
the area proved the [FMV]” of Terranova’s property.
Terranova later spoke with Garcia by phone. Garcia, as an agent of Simba,
offered to buy Terranova’s house for $470,000. Garcia explained that the offer was FMV
based on market comparisons that he and his staff had compiled, as well as his own
experience as an experienced real estate agent and his own market comparisons. Garcia
said that Terranova did not need to hire a real estate agent because Simba’s offer was
FMV and he would save money by not hiring an agent.
Terranova accepted Garcia’s offer and the parties entered into a purchase
agreement for Terranova to sell his property to Simba for $470,000. Terranova signed
the agreement with the understanding that, based on Garcia’s representations, the FMV
for the property was $470,000.
A few days after signing the purchase agreement, however, other parties contacted
Terranova and told him the FMV of the property was $600,000, or $130,000 more than
Garcia represented. Terranova thus determined that Garcia had lied to him about the
FMV of the property to induce him into selling it at a below-FMV price. Terranova
demanded that escrow be canceled, but Simba refused and moved forward with the sale.
3 Terranova responded by suing Defendants for (1) breach of the covenant of good
faith and fair dealing, (2) unjust enrichment, (3) fraud, and (4) rescission and cancellation
of instruments based on fraud. The thrust of the complaint and its four causes of action is
that Defendants fraudulently misrepresented the FMV of Terranova’s property.
Defendants demurred to the complaint. The trial court sustained the demurrer,
with leave to amend, because Terranova “failed to allege facts other than a representation
of the seller’s opinion of fair market value.”
Terranova then filed the operative FAC, alleging the same four causes of action
based on the same material allegations. Like the complaint, the thrust of the FAC and its
four causes of action is that Defendants fraudulently misrepresented the FMV of
Terranova’s property.
Defendants demurred again, arguing that the FAC failed to state a viable cause of
action because its four claims “are based solely on the allegation that [they] were
obligated to provide their opinion as to the fair market value of the parcel of real property
owned by [Terranova].” The trial court sustained the demurrer, this time without leave to
amend.
B. Cross-Complaint and Summary Judgment
While their first demurrer was pending, Defendants filed a cross-complaint against
Terranova alleging one cause of action for breach of contract and seeking specific
performance of the parties’ purchase agreement. After the trial court sustained their
4 demurrer to the FAC without leave to amend, Defendants moved for summary judgment
on their cross-complaint.
Defendants argued in their summary judgment motion that Terranova breached the
purchase agreement—a valid and enforceable contract—by backing out of it during
escrow without justification. They presented evidence that Terranova had bought five
properties in the past, as well as text messages between him and Garcia from before their
phone conversation. During that exchange, Terranova said Garcia’s offering price of
between $430,000 and $530,000 was in Terranova’s “ballpark range.” Defendants also
submitted a declaration from Garcia stating that Simba offered $470,000 for Terranova’s
property, but the declaration did not mention anything about FMV beyond generically
stating that representations about FMV are opinions.
Terranova opposed the motion on several grounds, including that Garcia
fraudulently induced him to sign the purchase agreement by falsely representing the FMV
and that the agreement was invalid due to mutual and unilateral mistake. Terranova did
not dispute that the parties had entered into a contract, but argued that it was
unenforceable because of Garcia’s fraud and/or mistake.
Terranova submitted a declaration in support of his opposition largely mirroring
the FAC’s allegations. Among other things, Terranova declared that Garcia represented
that the FMV for the property was $470,000, and that Garcia reached this figure based on
his “experience in the area and expertise as a licensed professional.” Terranova thus
5 signed the purchase agreement based on his understanding that Garcia’s offer accurately
reflected the property’s FMV.
In a supplemental declaration submitted with Defendants’ reply, Garcia stated that
he never told Terranova his opinion as to the FMV of Terranova’s property. Garcia
denied that anyone from Simba, including himself, would use their professional judgment
to determine the FMV of the property. Instead, Garcia (on behalf of Simba) only offered
to buy the property for $470,000. Garcia also denied that Armand and Oscar visited
Terranova’s property or spoke to him about selling it.
The trial court granted Defendants’ motion for summary judgment. The court
found that Defendants met their burden of proving Terranova breached the purchase
agreement, and then found that Terranova failed to prove a valid defense. In rejecting 2 Terranova’s fraudulent inducement defense, the court found that Garcia’s
representations as to the FMV of the property were not actionable as fraud because “a
statement regarding the fair market value of a property is only actionable as fraud if it is
accompanied by other material false misrepresentations,” and “[a] statement regarding
the fair market value of property by itself is not enough to support a claim for fraud.”
2 The trial court’s rulings on Terranova’s other defenses are not relevant because he has abandoned them on appeal.
6 The trial court thus entered judgment for Defendants on their cross-complaint and
the FAC. Terranova timely appealed.
III.
DISCUSSION
Terranova argues the trial court erroneously sustained the demurrer to the FAC
without leave to amend because (1) the FAC stated a valid claim for fraud and thus he
was entitled to rescission, and (2) he should have been granted leave to amend to allege
additional facts to support his claims and an additional cause of action under the unfair
competition law (UCL) (Bus. & Prof. Code, § 17200). He argues the trial court
erroneously granted summary judgment because (1) Defendants failed to plead and prove
adequacy of consideration, a necessary element for specific performance, and (2) there
are triable issues of fact as to his defense of fraud. We find no error and affirm.
A. Standards of Review
“‘On appeal from a judgment dismissing an action after sustaining a demurrer
without leave to amend, the standard of review is well settled. The reviewing court gives
the complaint a reasonable interpretation, and treats the demurrer as admitting all
material facts properly pleaded. [Citations.] The court does not, however, assume the
truth of contentions, deductions or conclusions of law.” (McAllister v. Los Angeles
Unified School Dist. (2013) 216 Cal.App.4th 1198, 1206.) When a trial court has
sustained a demurrer without leave to amend, “we decide whether there is a reasonable
possibility that the defect can be cured by amendment: if it can be, the trial court has
7 abused its discretion and we reverse; if not, there has been no abuse of discretion and we
affirm.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The plaintiff bears the burden of
proving the complaint may be amended to state a viable cause of action. (Dudley v.
Department of Transportation (2001) 90 Cal.App.4th 255, 259-260.)
“A party moving for summary judgment bears the burden of persuasion there is no
triable issue of material fact and is entitled to judgment as a matter of law. [Citation.]
We strictly construe the moving party’s affidavits and liberally construe the opposing
party’s affidavits. We accept as undisputed facts only those portions of the moving
party’s evidence that are not contradicted by the opposing party’s evidence.” (City of San
Diego v. Superior Court (2006) 137 Cal.App.4th 21, 25.) Thus, “[w]hen deciding
whether to grant summary judgment, the court must consider all of the evidence set forth
in the papers (except evidence to which the court has sustained an objection), as well as
all reasonable inferences that may be drawn from that evidence, in the light most
favorable to the party opposing summary judgment.” (Avivi v. Centro Medico Urgente
Medical Center (2008) 159 Cal.App.4th 463, 467.)
B. Demurrer to FAC
Defendants argued, Terranova agrees, and the trial court found that the FAC’s four
causes of action turn on Terranova’s allegation that Defendants fraudulently induced him
into signing the purchase agreement by misrepresenting the FMV of his property.
Terranova thus concedes (if implicitly) that the FAC’s claims, all of which sound in
fraud, rise and fall with that allegation. We agree with Defendants that the FAC fails to
8 state a viable claim for fraud, and thus the trial court properly sustained their demurrer to
the FAC.
The elements of fraud are: “‘(1) misrepresentation of a material fact (consisting of
false representation, concealment or nondisclosure); (2) knowledge of falsity (scienter);
(3) intent to deceive and induce reliance; (4) justifiable reliance on the misrepresentation;
and (5) resulting damage.’” (Bower v. AT&T Mobility, LLC (2011) 196 Cal.App.4th
1545, 1557.) “Fraud allegations ‘involve a serious attack on character’ and therefore are
pleaded with specificity. [Citation.] General and conclusory allegations are insufficient.
[Citation.]” (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.) The
normal policy of liberally construing pleadings against a demurrer will not be invoked to
sustain a fraud cause of action that fails to set forth such specific allegations. (Lazar v.
Superior Court (1996) 12 Cal.4th 631, 645.)
Defendants argue the FAC fails to allege sufficient facts to satisfy the first and
fourth elements of fraud (misrepresentation and justifiable reliance) because the
statements Garcia and Simba employees made about Terranova’s property’s FMV are
nonactionable opinions and, even if they made a misrepresentation, Terranova did not
justifiably rely on them. We agree on both points.
Expressions of opinion are generally not considered statements of fact and
therefore they usually cannot support a fraud claim. (Neu-Visions Sports, Inc. v.
Soren/McAdam/Bartells (2000) 86 Cal.App.4th 303, 308 (Neu-Visions).) “A
representation is an opinion ‘“if it expresses only (a) the belief of the maker, without
9 certainty, as to the existence of a fact; or (b) his judgment as to quality, value . . . or other
matters of judgment.”’” (Graham v. Bank of America, N.A., supra, 226 Cal.App.4th at
pp. 606-607) Statements concerning a product’s value thus are generally nonactionable
statements of opinion, not fact. (Neu-Visions, supra, at p. 308.) Instead, “[a] statement
of value may become a basis for fraud claims only if coupled with other facts,
circumstances or false representations.” (Kahn v. Lischner (1954) 128 Cal.App.2d 480,
488 (Kahn).)
For instance, misrepresentations about a rental property’s value, coupled with false
statements about the income it produced the year before, supported a fraud claim.
(Stumpf v. Lawrence (1935) 4 Cal.App.2d 373.) In another case, allegations that a
defendant fraudulently appraised a property using outdated, incomparable home sales to
induce a plaintiff to buy the property with a mortgage more favorable to the defendant,
stated a viable claim for fraud. (Fuller v. First Franklin Financial Corp. (2013) 216
Cal.App.4th 955, 959.) On the other hand, allegations that a home appraised higher than
the defendant’s appraisal from five years before did not support a fraud claim. (Cansino
v. Bank of America, supra, 224 Cal.App.4th at pp. 1471-1472.)
The FAC makes no allegations about other “facts, circumstances, or false
representations” that suggest Defendants’ statements about the FMV of Terranova’s
property were anything other than their opinion. The FAC alleges only that Defendants
told Terranova that the FMV of his property was $470,000 based on their market analysis
and expertise. This, without more, fails to allege sufficient facts showing that
10 Defendants’ statements were actionable misrepresentations of fact instead of
nonactionable statements as to the property’s value, which is “quintessentially a matter of
opinion, not a statement of fact.” (Neu-Visions, supra, 86 Cal.App.4th at p. 310; see also
id. at pp. 308-310 [accountant’s statement that property would appraise at $3 million was
nonactionable opinion in part because plaintiffs knew the accountant was not a
professional appraiser]; Padgett v. Phariss (1997) 54 Cal.App.4th 1270 [real estate
agents’ misrepresentations about property’s FMV not actionable because they were
opinions].) This is particularly true given that Terranova had the opportunity and ability
to verify the accuracy of Defendants’ statements. (See Alberda v. Smith (1934) 2
Cal.App.2d 74, 79 [“It is the general rule that statements as to value, where they are given
as mere matters of opinion and where the opportunity is present to ascertain the truth
thereof and to ascertain the real value, are matters of opinion only.”].) These principles
apply with greater force in the context of home values, which are inherently based in part
on opinion. (See Graham v. Bank of America, N.A. (2014) 226 Cal.App.4th 594, 607
[“An appraisal is ‘an opinion as to the market value’ of a property . . . .”]; see also Kahn,
supra, 128 Cal.App.2d at p. 487 [noting that property owner may testify to property’s
value “even though experts have testified to widely varying valuations”].) In short, the
FAC fails to allege sufficient facts suggesting that Defendants’ statements were
statements of fact, not opinion.
11 Terranova points to an exception to the general rule that a statement purporting to
express an opinion may support a fraud claim when made by someone with “superior
knowledge or special information.” Putting aside our conclusion that the FAC fails to
allege facts showing that Defendants’ representations were anything other than their
opinions, this exception applies only “‘when one of the parties possesses, or assumes to
possess, superior knowledge or special information regarding the subject matter of the
representation, and the other party is so situated that he may reasonably rely upon such
supposed superior knowledge or special information.’” (Jolley v. Chase Home Finance,
LLC (2013) 213 Cal.App.4th 872, 893, italics added.) Neither element is alleged in the
FAC.
Examples where a defendant’s superior knowledge of the subject matter made the
defendant’s purported opinion actionable include (1) a sales agent’s representations that a
condominium building with serious, hazardous structural problems was nonetheless
“luxurious” and “outstanding investment” (Cooper v. Jevne (1976) 56 Cal.App.3d 860,
865), (2) a realtor’s opinion that the purchaser of a particular lot had an enforceable
access easement (Southern California etc. Assemblies of God v. Shepherd of Hills etc.
Church (1978) 77 Cal.App.3d 951, 959), and (3) credit rating agencies’ ratings of
investment products based on non-public, confidential information (Public Employees’
Retirement System v. Moody’s Investors Services, Inc. (2014) 226 Cal.App.4th 643, 646-
666).
12 Here, however, the FAC fails to allege facts showing that Defendants had superior
knowledge about the value of Terranova’s own property. Terranova points to the FAC’s
allegations that Garcia claimed his offer was based on his real estate expertise and
research, but the value of a property for sale is “generally [contingent upon] factors
within the knowledge of the seller or easily ascertainable by the seller.” (Greif v. Sanin
(2022) 74 Cal.App.5th 412, 435; see Evid. Code, § 813, subd. (a) [property owner may
testify as to property’s value]; Kahn, supra, 128 Cal.App.2d at p. 487 [“[T]he law
generally assumes one will have some knowledge of the value of that which he owns.”].)
Simply put, there are no allegations that suggest an “inequality of knowledge” between
Defendants and Terranova about his own property that would render Defendants’
opinions actionable misrepresentations of fact. (Neu-Visions, supra, 86 Cal.App.4th at p.
310.)
What’s more, Terranova did not reasonably rely on Defendants’ statements,
regardless of whether they were Defendants’ honest opinions or misrepresentations.
Justifiable reliance exists only when the circumstances make it reasonable for the plaintiff
to accept the defendant’s statements without an independent inquiry or investigation.
(OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157
Cal.App.4th 835, 864.) “The reasonableness of the plaintiff’s reliance is judged by
reference to the plaintiff’s knowledge and experience.” (Ibid.) “[I]f the conduct of the
[plaintiff] in the light of his own intelligence and information, or ready availability of
information, was manifestly unreasonable, he will be denied a recovery.” (Kahn, supra,
13 128 Cal.App.2d at p. 489, italics added.) “Justifiable reliance is ordinarily a question of
fact that is not properly determined on demurrer, but ‘whether a party’s reliance was
justified may be decided as a matter of law if reasonable minds can come to only one
conclusion based on the facts,’ which facts include consideration of ‘the knowledge,
education and experience’ of the person whose reliance is at issue.” (Amiodarone Cases
(2022) 84 Cal.App.5th 1091, 1111.)
As pled in the FAC, Terranova’s reliance on Defendants’ statements about his
property’s FMV was unreasonable as a matter of law. According to the FAC, Simba
employees Armand and Oscar approached Terranova unprompted and told him that their
employer, a real estate agent (Garcia), wanted to buy his property. Garcia then spoke
with Terranova and stated that the property’s FMV was $470,000. Based on these
interactions—and nothing more—Terranova agreed to sell his property for $470,000,
believing it was a fair offer. Terranova then signed the purchase agreement, which stated
in relevant part: “[Terranova] understand(s) that [Simba] is a private investment
company that is buying real estate to make a profit and may be purchasing the Property
for immediate resale and profit even as soon as the day of closing . . . [Simba] is a
professional real estate investor that holds an active real estate license. Neither [Simba]
nor any of [its] officers or employees represents [Terranova] in this transaction.”
The FAC thus makes clear that Defendants were trying to buy Terranova’s
property to make a profit. In our view, it was entirely unreasonable as a matter of law for
Terranova to blindly rely on their representations about the FMV of his own property
14 without taking any steps to verify whether their offer was fair before signing the purchase
agreement. (See Konda v. Fay (1913) 22 Cal.App. 722, 726 [a party “should not be
permitted to blindly rely upon statements of interested parties when means of correct
information was at hand.”].) As the FAC states, Terranova learned from “other parties”
days after signing the agreement that his property’s FMV was considerably higher, which
suggests he could have easily learned the true value of his property before agreeing to sell
it to Simba, making his reliance on Defendants’ representations even more unreasonable.
(See Kahn, supra, 128 Cal.App.2d at p. 489 [reliance on representation not justifiable
when readily available information refutes it].) “When the parties have an equal
opportunity to determine value, and both are of common intelligence, the fact that one
party neglects to take an opportunity to determine the property’s value does not allow that
party to avoid the contract merely because the other party has fixed an inflated value to
the property . . . . The transaction does not become fraudulent merely because a party
made a bad bargain.” (1 Miller & Star, Cal. Real Est. § 1:152; Kahn, supra, at p. 490.)
These principles fully apply here.
Because we conclude the FAC failed to sufficiently plead a misrepresentation of
material fact and justifiable reliance, none of its causes of action states a valid claim. The
trial court thus properly sustained Defendants’ demurrer to it.
We also conclude the trial court properly denied Terranova leave to amend. When
opposing Defendants’ demurrer to the FAC, Terranova asked for leave to amend if the
trial court sustained the demurrer, so that he could allege additional facts concerning “(1)
15 his right to cancel the [purchase] agreement; (2) the specifics of the fraud allegations . . . ;
and (3) . . . an unfair businesses practice claim disgorging any unjust enrichment.” On
appeal, Terranova notes that he made this argument in the trial court, but only argues that
he should have been granted leave to amend to allege a UCL claim. We therefore
address only that issue.
“‘[T]he UCL prohibits as unfair competition “any unlawful, unfair or fraudulent
business act or practice.” [Citation.] The statute has been found to prohibit “wrongful
business conduct in whatever context such activity might occur.” [Citation.]’” (People
ex rel. City of Santa Monica v. Gabriel (2010) 186 Cal.App.4th 882, 888.) The statute
“‘“borrows” violations from other laws by making them independently actionable as
unfair competitive practices.’ [Citation.]” (Id. at p. 889.) Any actionable violation of the
law is actionable under the UCL. (See People ex rel. Bill Lockyer v. Fremont Life Ins.
Co. (2003) 104 Cal.App.4th 508; State Farm Fire & Casualty Co. v. Superior Court
(1996) 45 Cal.App.4th 1093, 1102-1103 [“Virtually any law—federal, state or local—can
serve as a predicate for a section 17200 action.”].)
Terranova argues Defendants’ alleged misrepresentations violated a realtor’s duty
not to misrepresent the value of real property (Bus. & Prof. Code, § 10117.3, subd. (a)
[“No [real estate] licensee shall knowingly or intentionally misrepresent the value of real
property”]), and the realtor’s statutory duty of candor imposed by Business and
16 3 4 Professions Code section 10176, subdivisions (a) , (b), (c), and (g). Terranova thus
seeks to assert a UCL claim against Defendants based on their alleged violations of these
statutes.
For the reasons outlined above, the FAC fails to allege facts suggesting that
Defendants’ representations were statements of fact, not their opinion. The FAC also
alleges no facts (and Terranova does not offer any he could allege) showing that
Defendants knew that their representations about the FMV value of Terranova’s property
were false or misleading. The FAC’s conclusory allegation that Defendants “had lied to”
Terranova about the property’s FMV to induce him to sell at a lower price is insufficient
to show that Defendants knowingly or intentionally made false representations, because
the allegation does not identify how Defendants knew their offer misrepresented the
property’s true FMV. (See Cansino v. Bank of America, supra, 224 Cal.App.4th at p.
1472; Goodman v. Kennedy (1976) 18 Cal.3d 335, 347 [conclusory allegations that
omissions were intentional and for the purpose of defrauding plaintiffs to purchase stock
3 Terranova’s opening brief first cites “subdivision (1)” of the statute, which does not exist. We assume he meant to cite subdivision (a). 4 These provisions state that the Real Estate Commissioner may, under certain circumstances, suspend or revoke a realtor’s license if the licensee is “guilty” of “(a) Making any substantial misrepresentation,” “(b) Making any false promises of a character likely to influence, persuade, or induce,” (c) “A continued and flagrant course of misrepresentation or making of false promises through licensees,” and “(g) The claiming or taking by a licensee of any secret or undisclosed amount of compensation, commission, or profit or the failure of a licensee to reveal to the buyer or seller contracting with the licensee the full amount of the licensee's compensation, commission, or profit under any agreement . . . .”
17 insufficient to state fraud claim].) Terranova’s proposed UCL claim turns on the same
general, conclusory, and insufficient allegations of fraud, and likewise fails to state a
viable claim under the UCL based on purported violations of Business and Professions
Code sections 10117.3 and 10176.
Because Terranova’s proposed UCL claim rests on the same premise as his
insufficiently pled fraud claims, and because he fails to show how he could plead
additional facts to cure these deficiencies and state a viable UCL claim, we conclude the
trial court properly denied him leave to amend. We therefore affirm the judgment
sustaining Defendants’ demurrer to the FAC without leave to amend.
C. Summary Judgment
The trial court granted summary judgment to Defendants on their cross-complaint
alleging one claim for breach of contract, finding that the parties had a valid contract (the
purchase agreement), Terranova breached it by refusing to go forward with the sale of his
property, and he had no valid defenses that would excuse his nonperformance or permit
him to rescind the contract. The court thus ordered specific performance of the purchase
agreement. We find no error.
Terranova effectively conceded in his opposition to Defendants’ summary
judgment motion that Defendants had met their initial burden of proving their breach of
contract claim. He instead raised various defenses to enforcing the contract, including
that (1) the contract was unenforceable due to fraud, bilateral mistake, and unilateral
mistake, (2) he was entitled to cancel the contract because it was a unilateral option to
18 purchase, and (3) Garcia violated his duty as Terranova’s agent. Terranova also argued
Defendants’ motion should be denied because their separate statement was deficient.
On appeal, Terranova argues for the first time that Defendants failed to meet their
initial burden because they did not plead and prove adequate consideration, which is a
necessary element for specific performance. He also reasserts his argument that the
purchase agreement is unenforceable because he was fraudulently induced into it by
defendants’ misrepresentations.
Terranova forfeited his adequate-consideration argument because he did not raise
it in the trial court. We therefore decline to consider it. (See DiCola v. White Brothers
Performance Products, Inc. (2008) 158 Cal.App.4th 666, 676.)
As for Terranova’s argument that defendants fraudulently induced him into
signing the purchase agreement, we conclude he failed to show a triable issue of material
fact.
A party to a contract may rescind the contract if that party was fraudulently
induced into it. (Civ. Code § 1689, subd. (b)(1); Hinesley v. Oakshade Town Center
(2005) 135 Cal.App.4th 289, 301.) Like a cause of action for fraud, the contract defense
of fraudulent inducement requires a showing of justifiable (reasonable) reliance.
(Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 974.) Whether a
plaintiff’s reliance was reasonable is a question of fact except when the undisputed facts
do not permit a reasonable difference of opinion. (West v. JPMorgan Chase Bank, N.A.
(2007) 214 Cal.App.4th 780, 794.)
19 Even assuming Terranova’s version of events is accurate and that Defendants
misrepresented the FMV of his property to induce him to sell it at a discounted price, the
record shows that his reliance on their alleged misrepresentations was unreasonable as a
matter of law. A plaintiff’s experience, intelligence, and sophistication are relevant
factors in determining whether the plaintiff relied on a defendant’s misrepresentations.
(Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4th 1178, 1196.) Terranova has
bought at least five properties since 1995. He thus knew, or should have known, that the
sale of property—particularly when it involves a sale approaching half a million
dollars—is a significant transaction that requires each party to do its own due diligence.
Assuming Defendants made the representations Terranova claims they made, Terranova
unreasonably relied on them without doing any research into his own property’s FMV.
Terranova “knew or should have known the value of his own property before selling it.”
(Greif v. Sanin, supra, 74 Cal.App.5th at p. 433.)
Text messages between Terranova and Garcia reinforce our conclusion that
Terranova’s reliance on Defendants’ purported misrepresentations was unreasonable.
Garcia texted Terranova asking if he was interested in selling his property, to which
Terranova replied, “Which house are you making an offer on and how much?” Garcia
responded that he wanted to buy the Caballeros property and make an offer on it.
Terranova replied, “I am not looking to sell unless someone offers me a price that will
make me get out of bed. [¶] I get at least 3 offers a week on my house. If anything
might just talk to a real estate agent and put it on the market as is.” Garcia explained,
20 “As Investors we will pay for all the closing costs so you [won’t] have to worry about
tens of thousands of dollars in junk fees and commissions. Our offer would have to be in
the range of $430,000 - $530,000. Are we in your ballpark range?” Terranova replied,
“That seems within the ballpark since [I] would [have] put it up for 580k since people
like to talk down a little and then paid the fees myself.”
This exchange shows that Terranova (1) owned at least two properties at the time,
(2) people routinely made offers on his property before Defendants made theirs, (3)
$470,000 seemed like a fair price to Terranova, (4) he knew he would save money if he
sold the property without a real estate agent, and (5) he knew that property buyers
generally offer below the seller’s asking price. All of this suggests that Terranova knew
well how property sales usually work—including that buyers often want to pay less than
the seller asks—which makes his blind acceptance of Defendants’ offer and purported
representations about the property’s FMV all the more unreasonable.
Because we conclude Terranova’s reliance on Defendants’ alleged
misrepresentations was unreasonable as a matter of law, he failed to show that he was
fraudulently induced into the purchase agreement such that it was unenforceable or he
was entitled to rescind it. The trial court thus properly granted Defendants’ motion for
summary judgment and entered judgment for them on their cross-complaint.
21 IV.
DISPOSITION
The judgment is affirmed. Defendants may recover their costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
CODRINGTON J.
We concur:
McKINSTER Acting P. J.
MENETREZ J.