Judge: Bruce G. Iwasaki, Case: 22STCV18275, Date: 2023-11-08 Tentative Ruling

Case Number: 22STCV18275    Hearing Date: November 8, 2023    Dept: 58

Judge Bruce G. Iwasaki

Department 58

Hearing Date:             November 8, 2023

Case Name:                Rhee v. Travelers Commercial Insurance Company   

Case No.:                    22STCV18275

Motion:                       Demurrer and Motion to Strike

Moving Party:             Defendant Travelers Commercial Insurance Company

Opposing Party:          Unopposed

            This case arises from an insurance coverage dispute. The Complaint alleges that, on June 7, 2020, Plaintiff Jonathan Rhee’s property was partially destroyed by a fire that started in the garage of his residence located at 907 Larker Ave., Los Angeles, CA. At the time of the fire, Plaintiff’s property was insured by Defendant Travelers Commercial Insurance Company (Defendant). After the fire, Plaintiff was unable to immediately locate the notarized deed showing ownership to the Property had passed from Plaintiff’s mother to Plaintiff. As a result, Defendant has failed to re-issue a check in Plaintiff’s name for a fire claim that was originally issued to the estate of Plaintiff’s mother. On June 3, 2022, Plaintiff, individual and as successor in interest to the estate of Changsil Rhee, filed a Complaint for (1.) breach of contract, (2.) breach of covenant of good faith and fair dealing, (3.) unfair business practices, (4.) declaratory relief, and (5) injunctive relief.  

            On June 20, 2022, Defendant demurred to the entire Complaint. Defendant also moved to strike the request for punitive damages from the Complaint. No opposition was filed.

            The Court sustains the demurrer in its entirety with leave to amend. The motion to strike is moot.

Demurrer

            A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (Code Civ. Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.) The court “ ‘ “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law . . ..” ’ ” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.) 

Analysis

First Cause of Action:

To prevail on a breach of contract cause of action, a plaintiff must prove: (1) the existence of a contract; (2) plaintiff's performance or excuse for nonperformance; (3) defendant's breach; and (4) resulting damages to plaintiff. (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1388.)

            Here, Plaintiff alleges Defendant provided an insurance policy that covered the damage to his Property from a fire. However, the Complaint does not allege who was a party to this insurance contract at issue; as such, it is unclear from the allegation whether a contract exists between Plaintiff and Defendants.

            Moreover, although the terms of a contract need not be alleged verbatim or attached, a plaintiff must “plead the legal effect of the contract rather than its precise language.” (Miles v. Deutsche Bank National Trust Co. (2015) 236 Cal.App.4th 394, 402.) Plaintiff has failed to plead the material terms of the contract; thus, the precise basis for the breach is unclear where the terms of the contract are not pled.

            The demurrer to this cause of action is sustained.[1]

Second Cause of Action:

            Defendant argues the second cause of action must fail for the same reasons as the first cause of action.

            “The implied covenant of good faith and fair dealing rests upon the existence of some specific contractual obligation.” (Racine & Laramie, Ltd. v. Department of Parks & Recreation (1992) 11 Cal.App.4th 1026, 1031.) “The covenant of good faith and fair dealing, implied by law in every contract, exists merely to prevent one contracting party from unfairly frustrating the other party's right to receive the benefits of the agreement actually made. [Citation.]” (Guz v.. Bechtel National, Inc. (2000) 24 Cal.4th 317, 349.)

Thus, in the absence of adequate allegations of the existence of a contract between the parties and its terms, this claim cannot withstand the demurrer. The demurrer is sustained.

Third and Fourth Causes of Action:

The third cause of action for unfair business practices pursuant to Business and Professions Code section 17200 and the declaratory relief claims are entirely derivative of Plaintiff’s other claims.

A claim for declaratory relief fails when it is “ ‘ “wholly derivative” of other failed claims.’ ” (Smyth v. Berman (2019) 31 Cal.App.5th 183, 191-192 [quoting Ball v. FleetBoston Financial Corp. (2008) 164 Cal.App.4th 794, 800].) Here, Plaintiff’s claim for declaratory relief fails as dependent on and derivative of Plaintiff’s defective contract claims. (Compl., ¶¶ 34-41.)

With respect to the fourth cause of action, the UCL does not proscribe specific activities, but in relevant part broadly prohibits “any unlawful, unfair or fraudulent business act or practice.” (Bus. & Prof. Code, § 17200.) “Because . . . section 17200 is written in the disjunctive, it establishes three varieties of unfair competition—acts or practices which are unlawful, or unfair, or fraudulent. In other words, a practice is prohibited as ‘unfair’ or ‘deceptive’ even if not ‘unlawful’ and vice versa.” (Aleksick v. 7-Eleven, Inc. (2012) 205 Cal.App.4th 1176, 1184 [citing Cel–Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180].)

            “[W]hen the underlying legal claim fails, so too will a derivative UCL claim.” (AMN Healthcare, Inc. v. Aya Healthcare Services, Inc. (2018) 28 Cal.App.5th 923, 950.) Here, Plaintiff’s Section 17200 claim fails as dependent on and derivative of Plaintiff’s defective contract claims. (Compl., ¶¶ 27-33.)

            The demurrer to the third and fourth causes of action are sustained.

Fifth Cause of Action:

Defendant argues the claim for injunctive relief under Section 17200 is a remedy, not a cause of action. This argument is correct. 

            It is well settled that injunctive relief is an equitable remedy, not a cause of action. (Shell Oil Co. v. Richter (1942) 52 Cal.App.2d 164, 168 [“Injunctive relief is a remedy and not, in itself, a cause of action, and a cause of action must exist before injunctive relief may be granted.”]; Venice Coalition to Preserve Unique Community Character v. City of Los Angeles (2019) 31 Cal.App.5th 42, 54 [“An injunction is a remedy, not a cause of action.”]; Wong v. Jing (2010) 189 Cal.App.4th 1354, 1360, fn. 2 [same; anti-SLAPP appeal].)

Thus, the demurrer to this cause of action is sustained.

Conclusion

            The demurrer is sustained in its entirety. Plaintiff shall have leave to amend with respect to the first through fourth causes of action; with respect to the fifth cause of action, leave to amend is limited to alleging the injunctive relief as a remedy. An amended complaint shall be filed and served by December 8, 2023.