Lacher v. Superior Court, No. G009348

• Court: California Court of Appeals
• Writing for the Court: MOORE; WALLIN
• Citation: 230 Cal.App.3d 1038,281 Cal.Rptr. 640
• Parties: Clyde LACHER, et al., Petitioners, v. SUPERIOR COURT of California, County of Orange, Respondent; SOUTHWEST DIVERSIFIED, INC., et al., Real Parties in Interest.
• Decision Date: 29 May 1991
• Docket Number: No. G009348

Page 640

281 Cal.Rptr. 640 230 Cal.App.3d 1038 Clyde LACHER, et al., Petitioners,
v.
SUPERIOR COURT of California, County of Orange, Respondent;
SOUTHWEST DIVERSIFIED, INC., et al., Real Parties in Interest. No. G009348. Court of Appeal, Fourth District, Division 3, California. May 29, 1991.
Review Denied Sept. 26, 1991.

[230 Cal.App.3d 1042] Darryl J. Paul, Laguna Niguel, for petitioners.

No appearance for respondent.

Hamilton & Samuels, Paul R. Hamilton, Newport Beach and Jeffrey S. Grider, Los Angeles, for Real Parties in Interest.

OPINION

MOORE, Associate Justice.

Petitioners Clyde and Maurine Lacher seek review of an order sustaining a demurrer, without leave to amend, to causes of action for fraud and negligent misrepresentation in an action arising out of a residential development being built near their home. They allege the developer fraudulently induced their support and acquiescence to obtain the required governmental approval for the project. We conclude the trial court erred in holding [230 Cal.App.3d 1043] the facts alleged in the first amended complaint failed to establish the developer owed a duty of care to petitioners.

In addition, we reject claims by the real parties in interest that the amended complaint does not adequately allege justifiable reliance or proximate cause, and that the causes of action are barred by either the Planning and Zoning Law (Govt.Code, § 65000 et seq.), the Subdivision Map Act (Govt.Code, § 66410 et seq.), or the statute of frauds (Civ.Code, § 1624). We emphasize that, notwithstanding the repeated characterizations made by real parties and our dissenting colleague, this case involves an action based on false representations allegedly made to petitioners. It does not involve an action against any governmental body or agent thereof, nor is it grounded on any alleged misrepresentation made to a governmental body or agent. ¹

FACTS

Extraordinary relief is generally not granted at the pleading stage. But an appellate court can do so when it concludes the trial court has deprived a party of an opportunity to plead his or her cause of action or defense and granting the petition will prevent a needless and expensive trial and reversal. (Taylor v. Superior Court (1979) 24 Cal.3d 890, 894, 157 Cal.Rptr. 693, 598 P.2d 854. See also Freedman v. Superior Court (1989) 214 Cal.App.3d 734, 735-736, 263 Cal.Rptr. 1.) We are required to assume the truth of all properly pleaded material allegations contained in the amended complaint, give it a reasonable interpretation by reading the pleading as a whole and all of its parts in context, and are prohibited from considering whether petitioners will be able to prove their allegations or the possible difficulty in doing so. (Garcia v. Superior Court (1990) 50 Cal.3d 728, 732, 268 Cal.Rptr. 779, 789 P.2d 960; Phillips v. Desert Hospital Dist. (1989) 49 Cal.3d 699, 702, 263 Cal.Rptr. 119, 780 P.2d 349; Ochoa v. Superior Court (1985) 39 Cal.3d 159, 162, fn. 2, 216 Cal.Rptr. 661, 703 P.2d 1; Freedman v. Superior Court, supra, 214 Cal.App.3d at p. 736, 263 Cal.Rptr. 1.)

Petitioners allege they own and live on property located in Dana Point, California and are "novices in the building and development industry." Real party in interest Southwest Diversified, Inc. (Southwest) owns APPROXIMATELY[230 Cal.App.3d 1044] 25 acres of land in Dana Point located across the street from and generally southeast of petitioners' residence.

Prior to the City of Dana Point's incorporation, the County of Orange prepared an environmental impact report covering the Dana Point area and adopted the Dana Point Specific Plan (DPSP). Both the report and DPSP recognized one of the area's primary natural resources was its scenic views of the harbor, coast and mountains. The area where petitioners' property is located was designated as having a "secondary view-potential primary inland view," facing in a generally southeasterly direction.

In conformity with the DPSP, land use regulations were adopted restricting the nature and type of development permitted in Dana Point. The regulations covering Southwest's property imposed limitations that included minimum building site area, building width and height restrictions, and building set-back requirements.

Seeking to build a residential development on its Dana Point property, Southwest filed a tentative tract map with the county's Environmental Management Agency, and applied for a use permit, zoning permit, and a coastal permit. By applying for these permits, Southwest subjected its project to a public hearing review process before the DPSP Board of Review, and the Orange County Planning Commission, among others.

Southwest's development proposal requested certain concessions it was not otherwise entitled to receive and to which there was substantial opposition in the neighboring community. To achieve the necessary approval, Southwest actively solicited the support of nearby residents, including the petitioners. The neighbors' primary concerns lay in protecting their views. During the latter part of 1987 through the summer of 1988 Southwest, through its agents Richard Garlinghouse and Mark Buell (sometimes collectively referred to as Southwest), conducted and attended several meetings with interested neighbors.

Southwest's agents allegedly misrepresented material facts relating to the project. At a November 1987 meeting, Buell promised he would try to satisfy petitioners' request that Southwest build on the natural, existing grade of the property along Calle La Primavera, the street between petitioners' and Southwest's lots. At a meeting held January 9, 1988, Buell stated the houses built along that street would be limited to one story above street level.

During two subsequent meetings, Southwest's agents asserted the homes built in the development would be erected on the natural, existing grade, [230 Cal.App.3d 1045] without using fill dirt, set back from the street some 25 feet, and situated to maximize petitioners' view. On both occasions, Garlinghouse accompanied petitioners to the lots directly across the street from their property and pointed out where structures would be located.

At another meeting, Garlinghouse claimed no structure built on Southwest's property would exceed one story in height above the street level of Calle La Primavera. Also, during the permit approval process, Southwest represented to the county's planning commission it would (1) provide split-level building pads and step-down units to preserve the natural form of the property's terrain, and (2) limit homes along Calle la Primavera to single-story plans using structural designs that preserved the views of nearby residents.

In reliance on Southwest's representations, petitioners acquiesced in the development plans and, at hearings before the DPSP review board and the county's planning commission, recommended approval of the project. Only after the project was approved and construction began did petitioners discover the alleged fraud. They assert all of the representations that the project would be built to protect and preserve their view were false; that Southwest had no intention of building on the existing grade, but had planned to bring in fill dirt to raise certain sites and did so; that the promised one-story homes are in fact significantly higher; and that Southwest exploited the property's terrain to increase its view potential without consideration of the harm to the views of petitioners and others.

Petitioners allege that if they, other residents, and the administrative review agencies had known the true facts about the development, "approval of the then proposed project would not have been obtained by ... Southwest without conditions imposed" protecting the views of nearby residents. As a result, petitioners have been deprived of "substantial ocean, coastline and mountain views from their residence that are otherwise protected under the DPSP," causing a diminution in their property's value and severe emotional distress.

The court sustained Southwest's demurrer to petitioners' first amended complaint with leave to amend causes of action for injunctive relief and unfair business practices. But as to fraud and negligent misrepresentation counts, the trial court sustained the demurrer without leave to amend, concluding Southwest owed petitioners no "duty." Petitioners seek an order directing the trial court to overrule the demurrer or, at least, allow them an opportunity to amend the complaint.

230 Cal.App.3d 1046

DISCUSSION

I

The trial court did not distinguish between the fraud and negligent misrepresentation causes of action, concluding Southwest did not owe petitioners a duty of care. As we shall explain, Southwest had a duty to refrain from making intentional and negligent misrepresentations in this factual context.

Civil Code section 1709 proscribes deceit generally: "One who willfully deceives another with intent to induce him to alter his position to his injury or risk, is liable for any damage which he thereby suffers." Civil Code section 1710 delineates four types of deceit: "A deceit, within the meaning of the last section, is either: 1. The suggestion, as a fact, of that which is not true, by one who does not believe it to be true; 2. The assertion, as a fact, of that which is not true, by one who has no reasonable ground for believing it to be true; 3. The suppression of a fact, by one who is bound to disclose it, or who gives information of other facts which are likely to mislead for want of communication of that fact; or, 4. A promise, made without any intention of performing it."

Intentional fraud is actionable because of the knowing intent to induce someone's action to his or her detriment with false representations of fact. "Fraud is an intentional tort, and the element of fraudulent intent, or intent to deceive, distinguishes it from actionable negligent misrepresentation and from nonactionable...