Filed 7/24/13 Bassil v. Sarkis CA1/1 NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 ONE

GERMAN BASSIL, Plaintiff and Appellant,

v. STEFAN SARKIS et al., Defendants and Respondents. A136401
(Alameda County Super. Ct. No. RG10534730)

Plaintiff German Bassil appeals from a judgment dismissing his second amended complaint against defendants Stefan Sarkis and Alexandra Moari following the sustaining of defendants’ demurrer. We reverse the judgm ent as to plaintiff’s cause of action for
fraud and affirm the dismissal of his other causes of action.
I. BACKROUND On September 2, 2010, plaintiff sued defendants Sarkis and Moari for fraud, breach of oral contract, and breac h of the implied covenant of good faith and fair dealing. He sued Tetyana Segadina in the same action. Defendants demurred to the complaint as it related to them. Plaintiff filed a nonoppo sition to defendants’ demurrer, and filed his first amended complaint on the same day. De fendants again demurred to the first, second and third causes of action, as they related to them. The trial court sustained the demurrer with leave to amend. The court’s ruling stated, among other things, plaintiff should “allege a fraud claim with requisite specific ity and indicate how Plaintiff’s reliance on [defendants’] alleged misreprese ntations was justifiable.”2 Plaintiff thereafter filed his second am ended complaint (SAC) adding new causes of action against defendant Moari for false acknowledgement and ne gligence, to which defendants again demurred.
A. The SAC The SAC alleges in pertinent part as follows:
Plaintiff is a resident of the State of Pe nnsylvania. Moari is a licensed real estate agent and notary public in California. Sarkis is married to Moari and acted as her agent in the real estate transactions alleged in the SAC. On August 1, 2007, Sarkis approached plaintiff to enter into a transaction whereb y plaintiff would take title to certain real property in Oakland as a joint tenant along with Segadina. Sarkis informed him Segadina
needed to take out a loan in the amount of $380,000 agains t the subject property but had been unable to obtain financing due to a low credit score. Sa rkis represented the property generated rental income and operated at a pr ofit. Sarkis asked plaintiff to cosign for a $380,000 loan against the property, and represented he wa s authorized to act as a real estate broker in the transaction, and he an d Moari would draft the necessary documents. Plaintiff initially declined the transaction, stating he did not want to acquire an interest in the property and was not interest ed in signing loan do cuments for which he would be personally liable. Sarkis stated th e loan would be only a short-term one, and
would be refinanced in thr ee months, at which time plain tiff’s name woul d be removed from title and he would no longer be personally liable for the loan. He represented he was familiar with Segadina’s competence as a property manager, and she would manage the property for plaintiff’s be nefit and share the rents and other income from operation of the property with plai ntiff. Plaintiff agreed to execute the loan docume nts under these
conditions. On or about September 1, 2007, Sarkis traveled to Philadelphia, Pennsylvania and presented the loan document s to plaintiff for his signa ture. Plaintiff signed the documents. Sarkis also presented him with Mo ari’s notary book to sign. Plaintiff noticed Moari had already countersigned the book a ffirming she had already witnessed plaintiff signing the loan documents and notary book, which was not true. On November 7, 2007,3 Segadina executed a grant deed transferring title to the propert y from herself to plaintiff and Segadina as joint tenants. The grant deed was recorded on N ovember 21, 2007, and
the loan was finalized and re corded on the same day.
Plaintiff is informed and believes the lo an proceeds were thereafter distributed to defendants and Segadina. Under the terms of the oral agreement between plaintiff and defendants, February 21, 2008 was the three-month deadline for refinancing the loan.
The loan was not refinanced on that date. Plaintiff contacted Sa rkis on May 21, 2008,
and asked him when the loan would be refinanced and he would be taken off title and removed from pers onal liability. Sarkis repeated th e loan would be refinanced and plaintiff would be removed fro m personal liability and from title to the property. Plaintiff contacted Sarkis thereafter on September 1, 2008, and again on Nove mber 1, 2008, about
the refinance. Sarkis told him he was work ing on the refinance and repeated the loan would be refinanced so that plaintiff woul d be removed from persona l liability and title to the property. Despite repeated requests, plaintiff’s na me was not taken off title, no refinance has taken place, and defendan ts have made no effort to rem ove plaintiff’s obligations on the loan. Segadina has not paid any income generated from the property to plaintiff. Segadina reported to plaintiff on June 1, 2010, the monthly income from the property was $3,400, monthly expenses were $4,100, and she was no longer able to make mortgage payments on the loan. Plaintiff demanded Se gadina agree to either remove his name from title or put the title in his name alone. She demanded plaintiff pay her $165,900 to obtain her signature on a quitcla im deed, reflecting her losses in managing the property.
In connection with his fraud cause of ac tion against Moari and Sarkis, plaintiff alleged he entered into the transaction in actual and justifiable reliance on Moari and Sarkis’s false representations, acting in con cert with Segadina, that (1) the property operated at a profit, would be managed for his benefit, and plaintiff would share in its income; and (2) the loan would be refinanced within three months a nd plaintiff would be removed from title and personal liability for the loan at that time. He alleged his reliance was justifiable because (1) the defendants, in cluding Segadina, repres ented themselves to4 him as real estate professionals, experien ced in brokering loans and managing real property; (2) Sarkis represented he was an e xperienced real estate professional familiar with the property and familiar with Segadi na’s competence as a property manager; (3) plaintiff was not himself a real estate pr ofessional; and (4) the promise of a refinance
within three months addressed the concerns plaintiff had raised about minimizing his exposure to liability fo r the loan. Plaintiff alleged fi nancial and emo tional detriment stemming from his personal liability on the lo an, Segadina’s default in making loan payments, her failure to pay him any proceeds from the operation of the property, and her demand that he pay her more than $165,000 for signing a quitclaim deed in his favor.
In his second cause of action for breach of contract, plaintiff alleges the above transactions constituted an oral agreement which defendants breached by, among other things, failing to refinance th e loan or remove him from title within the promised threemonth time frame, retaining for themselves the proceeds of th e loan, and failing to share with plaintiff the rents and other income de rived from management of the property. In his third cause of action, plaintiff alleged defendants’ failure to refinance within the promised time frame, and failure to share rents and income from the property with him also breached the covenant of go od faith and fair dealing.
In his sixth and seventh causes of action for false acknowledgement and negligence, 1 plaintiff alleges defendant Moari was responsible for his losses because she notarized plaintiff’s signature on the loan docu ments without observing him signing his

name. B. Judgment and Appeal At the hearing on defendants ’ demurrer to the SAC, plaintiff represented that if the court provided him leave to amend his SAC, he would amend his fraud cause of action to allege he justifiably relied on defendants’ statements becaus e he and Sarkis were lifelong
friends and had worked for the same real estate company. Plaintiff also argued he could

1 Plaintiff’s fourth and fifth causes of action for partition and accounting are alleged against Segadina alone.5 amend his complaint against defendants to in clude a breach of fiduciary duty cause of
action on the basis that defendant Moari is a re al estate agent. The trial court sustained
defendants’ demurrer without leave to amend. The court found plaintiff had not adequately alleged justifiable reliance on the alleged represen tations of defendants. It found the oral contract claim time-barred by the two-year statute of limitations for such claims. It found no conduct alleged sufficien t to support the cause of action for breach of the covenant of good faith and fair deali ng, and ruled the fals e acknowledgement and negligence causes of action failed for lack of damage. This appeal followed fro m the ensuing judgment dismissing his claims against
Moari and Sarkis. 2
II. DISCUSSION
Plaintiff contends the court erred in su staining the demurrer, and in denying him one more opportunity to amend his complaint to state a viable cause of action. We agree plaintiff has sufficiently alleged intentional fraud, and should be allo wed to proceed with
that cause of action. As to all other causes of action, the demurrer was properly sustained, and plaintiff has not shown he can plead facts ove rcoming the defects in these
causes of action.
A. Fraud/Intentional Misrepresentation The trial court found plaintiff’s fraud cl aim failed because he had not adequately alleged justifiable reliance on defendant’s representations. Here, defendants allegedly falsely represen ted the property operated at a profit and generated income in which he would share, the loan would be refi nanced within three months, and plaintiff would th en be removed from title and re lieved of personal liability for the loan. He alleged his reliance on th ese representations was justifiable because (1) defendants, including Segadi na, represented themselves as real estate professionals experienced in brokering loans and managing r eal property; (2) Sarkis represented he was an experienced real estate professional who was familiar with the property and familiar

2 Plaintiff’s claims agains t Segadina were not challe nged by defendants’ demurrer.6 with Segadina’s competence as a property manager; and (3) plaintiff was not himself a real estate professional. He further a lleges his reliance was justifiable because defendants’ promise of a refinance within th ree months addressed the concerns he had raised about minimizing his expos ure to liability for the loan. “In addition to pleading actual reliance, th e plaintiff must set ‘forth facts to show that his or her actual reliance on the representa tions was justifiable, so that the cause of the damage was the defendant’s wrong and not the plaintiff’s fault.’ [Citation.] There must be more pled than a si mple statement plaintiff justif iably relied on the statements. [Citation.] The compla int must contain ‘allegations of facts showing that the actual inducement of plaintiffs . . . was justifiable or reasonable.’ ” ( Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 10 66–1067.) In an intentional misrepresentation case, the plaintiff’s negligence in failing to discover the falsity of a statement is no defense, and the plaintiff is not held to th e standard of precaution of a hypothetical, reasonable man. ( Id. at p. 1067, citing Whiteley v. Philip Morris, Inc. (2004) 117 Cal.App. 4th 635, 684.) Although the plaintiff “ ‘may not put faith in representations which are preposterous, or which are shown by facts within his observation to be so patently an d obviously false that he must have closed his eyes to avoid discovery of the truth’ ” ( Seeger v. Odell (1941) 18 Cal.2d 409, 415 ( Seeger )), this is not generally a determ ination that can be made on the pleadings alone. “ ‘Except in the rare case where the un disputed facts leave no room for a reasonable difference of opinion, the que stion of whether a plaintiff’s reliance is reasonable is a question of fact.’ ” ( Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1239, 1248 [holding factual questi on of whether reliance was manifestly
unreasonable could not be made on the pleadings alone].) In our view, the trial court erred in th is case in holding plaintiff failed to sufficiently plead facts showing his reliance wa s justifiable. He alleged in substance defendants had superior knowledge and expe rience concerning the property’s income, Segadina’s managerial skills, a nd their ability to refinance th e property in the time frame promised. Superior knowledge, if proven, can support a finding of justifiable reliance. ( McClain v. Octagon Plaza, LLC (2008) 159 Cal.App.4th 784, 794.) “ ‘It is . . . well7 settled that when a fact is peculiarly within the knowle dge of the person making the representation and not within th e knowledge of the person to whom it is made, the latter has the right to rely upon the representations of the former respecting such fact.’ ” ( Brownlee v. Vang (1965) 235 Cal.App.2d 465, 475 ( Brownlee ), quoting Bank of
America v. Greenbach (1950) 98 Cal.App.2d 220, 234.) Plaintiff further alleged he was reassured by defendants’ representation they would refinance the property within three months, a representation buttressed by defendan ts’ status as real estate professionals experienced in brokering real estate loans. A party’s suspicions or concerns may be reasonably allayed by the ot her party’s positive reassura nces or representations. ( Brownlee
, at p. 476.) While a reasonably prudent person in pl aintiff’s position might have performed his own investigation or demanded more documentation before putting himself at risk on a loan, reasonable minds could differ about whether the repres entations made to alleviate his concerns were so obviously false or basele ss he “ ‘must have closed his eyes to avoid discovery of the truth.’ ” ( Seeger , supra , 18 Cal.2d at p. 415.) With the benefit of hindsight, and assuming the truth of plain tiff’s allegations, he was certainly overly trusting and imprudent. But whether his re liance was “manifestly unreasonable” cannot be determined from those allegations alone. ( Ibid. ) Even assuming for the sake of analysis plaintiff pleaded insufficient facts showing justifiable reliance, he should still have been allowed to ame nd his complaint to allege he and Sarkis were lifelong friends . Friendship creates a relation of trust and confidence. ( Brownlee
, supra , 235 Cal.App.2d at p. 476.) Nume rous cases find friendship weighs heavily in favor of a finding of justifiable reliance. (See Lance v. Tillman ( In re Tillman ) (Bankr. D.C. 1996) 197 B.R. 165 , 171, and cases cited therein .) “The courts reason that [people] are not to be fau lted for relying on the honesty of close friends who take advantage of them.” ( Ibid. ) The trial court failed to take this factor into account in denying leave to amend. Defendants also claim plaintiff failed to sufficiently allege their representations were false when made, or defendants’ knowledge of their falsity. We disagree. Plaintiff8 alleged, “Each of the representations made by DEFENDANTS was false.” Regarding the property’s profitability specifi cally, plaintiff alleged, “The PROPERTY has not generated any income,” and the property “operates at a loss, as the monthl y expenses are $4,100 and the monthly income is $3,400.” He a lleged Segadina demande d he pay her $165,900 for a quitclaim deed reflecting her losses in ma naging the property. He alleged Segadina had paid no rental or other income to him from the property whatsoever. He alleged she told him “she was no longer able to continue making mortgage payments on the loan because the PROPERTY was not generating su fficient income.” Regarding the promise to refinance within three months, plaintiff alle ged repeatedly no such refinance occurred. Plaintiff was not required to pl ead falsity with any greater sp ecificity or repetition than he
did. Plaintiff’s allegations re garding defendants’ knowledge of the falsity of their representations were also sufficient. Rega rding defendants’ knowled ge of the property’s lack of profitability, he alle ged the defendants “in doing the things alleged herein” acted as agents for one another “with the knowledge , consent, and permissi on of each other.” Under this allegation, Segadina’s knowledge c oncerning the true facts about the property as well as her liability for the falsity of stat ements she made about it to plaintiff can be imputed equally to Sarkis and Moari. ( Alhino v. Starr (1980) 112 Cal.App.3d 158, 174.) Plaintiff further alleged Sarkis “presented himself as an experienced real estate professional familiar with the PROPERTY,” and defendants acted in concert and as agents for each other. These allegations of concerted action by a ll three defendants to defraud plaintiff were reinforced by other fra ud allegations showing all three defendants took actions and/or made representations to lu re plaintiff into cosi gning for the loan, and all three received proceeds once the loan clos ed. Regarding knowledg e of the falsity of the promise to refinance within three months, plaintiff alle ged defendants proposed to refinance the loan solely to lure him into the loan, certa inly suggesting they did not
believe the refinance could or wo uld take place in that time frame. He alleged defendants represented themselves as real estate professionals knowledgeable about brokering loans. He alleged Sarkis repeatedly reassured him he was working on the refinance. It may be9 inferred from these allegations Sarkis knew the promise of refinancing within three
months was false when he made it.
We find the trial court erred in sustaini ng defendants’ demurrer to plaintiff’s first cause of action for intentional misrepresent ation, and will revers e and remand on that
basis.
B. Breach of Contract
The trial court sustained defendants’ de murrer to plaintiff’s breach of contract cause of action on statute of limitations grou nds. The alleged contract was an oral agreement whereby plaintiff ag reed to take title to the pr operty as a join t tenant and assume personal liability for a $380,000 loan secu red by the property, and defendants promised they would refinan ce the property within three m onths after the execution of the loan so plaintiff would no longer be pers onally liable on the loan. The statute of
limitations for breach of oral contracts is tw o years from the date of breach. (Code Civ. Proc., § 339, subd. (1).) The trial court found the breach wa s alleged to have occurred in May 2008, when no refinance had taken place as promised. 3 The court reasoned that by the time the original complain t in this case was filed in September 2010, the two-year
statute of limitations had run out on plaintiff’s breach of c ontract claim several months
earlier.
Plaintiff contends the breach of contract is not barred by the statute of limitations because, as alleged in the SA C, defendants’ promise to re finance was “renewed” on or about November 1, 2008, when he contac ted Sarkis, reminded him the deadline for removing him from title on the property had pa ssed, asked Sarkis when that would occur,
and Sarkis reiterated that he would refinance the loan. Plai ntiff states his conversation
with Sarkis in November 2008 was “[t]he most recent renewal.”
A cause of action for breach of contract ordinarily accrues at the time of breach, and the statute begins to run at that time rega rdless of whether any da mage is apparent or

3 Actually, plaintiff alleged the three-mont h period for refinancing the loan expired on February 21, 2008, under the terms of the oral contract. He fi rst contacted Sarkis about this in May 2008 to remind him the deadline had already passed.10 whether the injured party is aware of his or he r right to sue. (3 Witkin, Cal. Procedure (5th ed. 2008) Actions, § 520, p. 664.) The oral contract alleged in this case was
breached no later than February 21, 2008. 4 As alleged in the SAC, what occurred on November 1 is that plaintiff inquired about the status of the refinance, and Sarkis told him he was still working on it a nd would refinance the loan. No facts are pleaded showing
new consideration was tendered fo r Sarkis’s November 2008 prom ise to refinance, or that
a new contract was formed at that time. He makes no claim Sarkis was trying to cure the breach. (See Cardinal Health 301, Inc. v. Tyco Electronics Corp. (2008) 169 Cal.App.4th 116, 133–134.) In fact, plai ntiff specifically alleged, “none of the DEFENDANTS have made any e ffort to remove his obligati ons on the loan.” Plaintiff also makes no claim Sarkis’s representation in November 2008 in duced him to forbear from filing suit until after the statute of limitati ons had run, nearly two years later. (See
Battuello v. Battuello (1998) 64 Cal.App.4th 842, 847–8 48.) Thus, no facts are pleaded that, if true, would have started a new limitations period for plain tiff’s breach of oral contract claim after Septembe r 2008, or delayed or tolled the limitations period that otherwise expired by February 21, 2010, at the latest. The trial court properly sustained defend ants’ demurrer to plaintiff’s breach of contract claim against them.
C. Breach of the Covenant of Good Faith and Fair Dealing Plaintiff alleged defendants breached th e covenant of good faith and fair dealing implied in every contract by (1) inducing him to execute the lo an documents with a promise to refinance the loan after three m onths, and then failing to do so; and (2) failing to share rent and income from manage ment of the property with him.

4 Plaintiff alleged defendants breached the oral contract by , among other things, retaining to themselves the proceeds of the loan and not sharing w ith plaintiff the rents and income from the property. These allege d breaches occurred before February 21, 2008.11 The trial court sustained defendants’ demurrer without leave to amend since plaintiff did not identify any conduct that frustrated the purpose of the underlying contract beyond those facts that simply allege a breach of the contract. On appeal, plaintiff contends Sarkis and Moari “frustrated the purpose of the contract by failing to refinance the loan.” By repeating this argument, plaintiff merely confirms he cannot identify conduct by defendants suppor ting his breach of implied
covenant claim other than the same conduct alleged as the basis for his breach of oral contract claim. “[E]very contract imposes upon each party a duty of good faith and fair dealing in the performance of the contract su ch that neither party shall do anything which
will have the effect of destr oying or injuring the ri ght of the other party to receive the fruits of the contract.” ( Storek & Storek, Inc. v. Citicorp Real Estate, Inc. (2002) 100 Cal.App.4th 44, 55.) If merely failing to perform an express contractual promise
could constitute a breach of the covenant of good faith and fa ir dealing, every contract
breach claim would violate the c ovenant. A covenant of good faith and fair dealing must
be implied from the terms of the contract. It is distinct from the contract’s express promises. Thus, there can be no implied covenant of good faith as to a subject completely covered by the contract. ( Third Story Music, Inc. v. Waits (1995) 41 Cal.App.4th 798, 804.) A claim for breach of the covenant that merely repeats and realleges the same allegations set forth in a companion claim for breach of contract is properly dismissed as superfluous. (See Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 352–353.) The trial court properly sustained defe ndants’ demurrer to plaintiff’s cause of
action for breach of the covenant of good faith and fair dealing.
D. False Acknowledgement and Negligence Plaintiff alleges Moari falsely or neg ligently certified he personally appeared before her to sign the loan documents when, in fact, he was not in her presence when he signed them. He alleges the loan was r ecorded “[b]y virtue” of Moari’s false certification, and he was therefore damaged as a proximate result of her fraudulent or negligent certification. The tr ial court sustained defendants’ demurrer to these causes of12 action on the grounds no specific damage coul d be attributed to the documents not being properly notarized, since he admits he di d sign the documents and knew what he was signing. We agree plaintiff has not pled fact s connecting Moari’s allegedly improper notarization to any damage or detriment he has suffered. Under the facts as alleged in the SAC, plaintiff became liable for the loan because he agreed to sign and did sign the loan documents, not because Moari falsely notarized his signature. Plaintiff does not deny the genuineness of his signatures on the loan do cuments. He does not allege Moari caused him to become liable for the loan by imprope rly notarizing his signature, nor does he allege any other facts showing how Moari’s a lleged breach of her duties was a proximate cause of damages he incurred.
Plaintiff cites Iselin-Jefferson Financial Co . v. United California Bank (1976) 16 Cal.3d 886 ( Iselin-Jefferson ) for the proposition that the breach of a duty by a notary can lead to liability . The issue in Iselin-Jefferson was “whether a notary public may be liable to a purchaser of accounts rece ivable for negligen tly acknowledging a forged signature on a guaranty agreement.” ( Id. at p. 888, italics added.) In that case, the purchaser of accounts receivable demanded written guarantees signed and acknowledged by the four principals of the company owing on the accounts, including a Mrs. Durkin. ( Ibid. ) The notary falsely acknowledged the presen ce and signature of Mrs. Durkin, even though she had refused to sign and her signa ture had been forged to her purported guarantee. ( Ibid. ) The evidence showed the plaintiff relied upon and would not have agreed to purchase the accounts receivabl e without Mrs. Durkin’s guarantee. ( Id. at p. 889.) The defendants asserted Mrs. Durk in’s guarantee was valueless since she had no assets at the time of trial and, therefore, th e notary’s negligence di d not proximately cause the plaintiff’s damage. ( Ibid. ) The Supreme Court rejected that premise, finding Mrs.
Durkin’s financial circumstances at the time of trial did not mean a judgment against her, enforceable for at least 10 y ears, could not have some fu ture value, and because the notary’s negligent act “must be viewed as a pr oximate cause of plain tiff’s injury because13 the act induced plaintiff to enter into an agreement it w ould not otherwise have made resulting in its substantial losses.” ( Id. at pp. 889–890.) Iselin-Jefferson underscores the problem with plainti ff’s pleading in this case. It is apparent from the Supreme Court’s careful analysis of proximate cause in IselinJefferson that a notary cannot be civilly liable for breach of duty abse nt facts showing the notary’s breach caused damage to the plainti ff. Here, plaintiff’s alleged damages were caused by his assuming personal liability for a loan secured by the property. He cannot allege Moari’s alleged negligence or breach of duty misled him into entering the loan transaction, as the plaintiff in Iselin-Jefferson did. In fact, plaintiff alleges he was aware of the problem with Moari’s notarization at the time he signed the loan documents. Plaintiff cites no legal authority for the prop osition a notary can be liable to the signator in that fact pattern, and he pleads no facts show ing such liability could exist in this case. The trial court properly sustained Moari’ s demurrer to the sixth and seventh causes
of action.
III. DISPOSITION We reverse the judgment and remand to th e trial court for further proceedings on plaintiff’s first cause of action for fraud/inte ntional misrepresentation. In all other respects, we affirm the order sustaining defendants’ demurrer to the second amended complaint. Each si de shall bear its own costs on appeal.

_ ____________ ____________ Margulies, Acting P.J.

We concur:

_____________ ____________ Dondero, J.

_____________ ____________ Banke, J.