Judge: Andrew E. Cooper, Case: 23CHCV03607, Date: 2024-05-21 Tentative Ruling

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Case Number: 23CHCV03607    Hearing Date: May 21, 2024    Dept: F51

DEMURRER w/o MTS

Motion filed: 03/08/24

MOVING PARTY: Defendants LA Solar Group, Inc. (“LA Solar”) and Smart Main Panel Inc. dba LA/YX Solar Group (“TX Solar”) (collectively “Defendants”)

RESPONDING PARTY: Plaintiff SolarSesame Inc. (“Plaintiff”)

NOTICE: ok

RELIEF REQUESTED: Defendants demur to the First Amended Complaint’s (“FAC”) third and fourth causes of action for breach of the implied covenant of good faith and fair dealing against LA Solar and TX Solar, pursuant to California Code of Civil Procedure § 430.10(e).

TENTATIVE RULING: The demurrer is SUSTAINED WITH LEAVE TO AMEND.

BACKGROUND

            On 02/09/24, Plaintiff filed the operative FAC against Defendants asserting (1) breach of contract (against LA Solar); (2) breach of contract (against TX Solar); (3) breach of the implied covenant of good faith and fair dealing (against LA Solar); and (4) breach of the implied covenant of good faith and fair dealing (against TX Solar).

            On 03/08/24, Defendants filed the instant demurrer to the FAC. On 05/08/24, Plaintiff filed its opposition brief. On 05/16/24, Defendants filed their reply brief.

ANALYSIS

Defendants demur to the FAC’s third and fourth causes of action for breach of the implied covenant of good faith and fair dealing against LA Solar and TX Solar, pursuant to California Code of Civil Procedure § 430.10(e).

1.      Meet and Confer

The Court finds the preliminary meet and confer requirements of Code of Civil Procedure section 430.41, subdivision (a) have been satisfied. 

2.      Third Cause of Action for Breach of the Implied Covenant of Good Faith and Fair Dealing (Against LA Solar) and Fourth Cause of Action for Breach of the Implied Covenant of Good Faith and Fair Dealing (Against TX Solar)

Plaintiff’s third and fourth cause of action alleges against Defendants a breach of the implied covenant of good faith and fair dealing. Every contract contains an implied covenant of good faith and fair dealing that neither party will do anything to interfere with the other party’s right to receive the benefits of the agreement. (Howard v. American Nat'l Fire Ins. Co. (2010) 187 Cal.App.4th 498, 528.) The precise nature and extent of the duty depends on the nature and purpose of the underlying contract and the parties’ legitimate expectations arising from the contract. (Ibid.) “A breach of the implied covenant of good faith is a breach of the contract … and breach of a specific provision of the contract is not … necessary to a claim for breach of the implied covenant of good faith and fair dealing.” (Thrifty Payless, Inc. v. The Americana at Brand, LLC (2013) 218 Cal.App.4th 1230, 1244.)

However, “if the allegations [of breach of implied covenant of good faith and fair dealing] do not go beyond the statement of a mere contract breach and, relying on the same alleged acts, simply seek the same damages or other relief already claimed in a companion contract cause of action, they may be disregarded as superfluous as no additional claim is actually stated.” (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1395.)

Here, the FAC alleges, among other things, that defendant LA Solar prevented Plaintiff from receiving additional benefits under the Agreement.  by:

(1)   “no-showing regular reporting meetings with Plaintiff”;

(2)   “failing to provide Plaintiff ‘with other support services reasonably appropriate under this Agreement and/or customary in the solar industry’”;

(3)   “refusing to convert customer projects that had been submitted prior to the (premature) termination date of October 1, 2023, despite stating in writing that such projects would remain in development”;

(4)   “singling out Plaintiff amongst Defendant LA Solar’s dealers for disparate treatment, revoking Plaintiff’s access to certain of Defendant La Solar’s systems;” and

(5)   “causing its automated text messaging services (so-called “auto-bots”) to message customers that had pending solar projects under contracts executed by Plaintiff (as sales representative for LA Solar). On information and belief, these were attempts to sell such customers solar services directly and cut Plaintiff out of the transaction.” (FAC ¶¶ 52-56.)

Further, the FAC alleges that defendant TX Solar denied Plaintiff the same additional

benefits under the Agreement. (FAC ¶¶ 64-68.)  

Upon review of the FAC, the Court finds that the underlying factual allegations relied upon in Plaintiff’s third and fourth causes of action are identical those alleged in his second cause of action for Breach of Contract. Accordingly, the Court sustains the demurrer.

3.      Leave to Amend

Where a demurrer is sustained, leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) Under the Court’s liberal policy of granting leave to amend, the Court grants Plaintiff 30 days leave to amend his FAC to cure the defects set forth above. Plaintiff is cautioned that “following an order sustaining a demurrer … with leave to amend, the plaintiff may amend his or her complaint only as authorized by the court's order. … The plaintiff may not amend the complaint to add a new cause of action without having obtained permission to do so, unless the new cause of action is within the scope of the order granting leave to amend.” (Zakk v. Diesel (2019) 33 Cal.App.5th 431, 456.)

CONCLUSION

The demurrer is sustained as to Plaintiff’s third and fourth causes of action with 30 days leave to amend.