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April 18, 2003
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Case No: GIS11535 - Colburn vs Eastlake Shores, Peters & Freedman, Carlos Sosa
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California
Superior Court
County of San Diego County
Branch: San Diego County
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Melissa Colburn
Represented by: Walt er A. Taylor, Taylor & White
v.
Villas at Eastlake Shores Owners Association
a corporation
Peters & Freedman and Carlos Sosa an individual et al
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Causes of Action: See below
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Judge: The Honorable LUIS R. VARGAS
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Lawsuit Text
The following is a TELEPHONIC, ruling for 4/18/2003,
Department 12, the Honorable LUIS R. VARGAS presiding.
Defendants Peters & Freedman and Carlos Sosa's demurrer to the First Amended Complaint is sustained, in part, and overruled, in part. Defendants' demurrer to the ninth cause of action for fraud is sustained with ten days' leave to amend to allege specific facts showing Plaintiff's reliance on the alleged representations or misrepresentations of Defendants.
The allegation at paragraph 60 of the First Amended Complaint that "but for the enterprise, agreement, and conclusion [sic] between Defendants Peters & Freedman and Sosa, Plaintiff's Home [sic] would not have been foreclosed upon", even if true, does not demonstrate reliance as that term is contemplated as an element of a fraud claim.
Defendant Sosa's demurrers to the fifth and sixth causes of action for negligence and for breach of the covenant of good faith and fair dealing are overruled as moot due to the incorporating language of those causes of action, which does not include paragraph 2, identifying Defendant Sosa.
Defendant Peters & Freedman's demurrer to the sixth cause of action is also overruled inasmuch as the allegations paragraphs 12 and 15 that Peters & Freedman was retained by the homeowner's association, of which Plaintiff was a member, to handle assessment collections and to conduct lien foreclosure actions, are sufficient allegations of the requisite contractual relationship between the parties.
Defendant Sosa's demurrer to the seventh cause of action for unfair business practices is overruled as that cause of action incorporates certain preceding paragraphs, including paragraph 20, which detail five transactions involving Defendants Peters & Freedman and Sosa in which Defendants are alleged to have acted unfairly and/or unlawfully.
Defendants' demurrer to the eighth cause of action for RICO violations is overruled.
The RICO statute (18 U.S.C. Section 1962) renders it unlawful to
(1) use income derived from a pattern of 'racketeering activity' to acquire an interest in or to establish or operate an enterprise engaged in or affecting interstate commerce;
(2) acquire or maintain an interest in such an enterprise through a pattern of racketeering activity;
(3) conduct or participate in the conducting of such an enterprise through a pattern of racketeering activity; and
(4) conspire to do any of the foregoing. The courts have recognized a broad application of the RICO statutes (see Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 499 (1985), and California courts have held that specificity is not necessarily required to sustain a claim of RICO violations at the pleading stage, as long as the defendant has been sufficiently apprised of the allegations against him in that cause of action. (Douglas v. Superior Court [1989] 215 Cal.App.3d 155, 159.)
Here the first amended complaint contains allegations that Defendants engaged in multiple unlawful and fraudulent acts for their financial gain in connection with foreclosure sales of real property, that such acts could arguably give rise to disciplinary action by virtue of Defendants' status as California attorneys, and that they used the U.S. mails in doing so (in providing the notices, etc.). The Court finds these allegations to be sufficiently specific to sustain a claim of RICO violations at this stage of the proceedings.
This ruling constitutes the order of the Court and no formal written ruling is required. The court will not entertain oral argument.
This ruling file posted to web server: Thu, Apr 17, 2003, 5:26 PM
This ruling file retrieved by browser: Fri, Jun 27, 2003, 6:03 PM
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