Department 58

Hearing Date: May 22, 2024

Case Name: Westlake Services, LLC v. Chaim Perl

Case No.: 24STCV00706

Motions: Defendant Chaim Perl’s Demurrer to Plaintiff Westlake Services, LLC’s First Amended Complaint

Moving Party: Defendant Chaim Perl

Responding Party: Plaintiff Westlake Services, LLC, dba Westlake Financial Services

Tentative Ruling: SUSTAIN with leave to amend.

Background

This is a breach of contract case. Plaintiff Westlake Services, LLC dba Westlake Financial Services (“Plaintiff”) contends Defendant Chaim Perl (“Defendant”) owes Plaintiff $51,177.01 in connection with a Master Dealer Agreement entered into on August 11, 2020. On January 10, 2024, Plaintiff filed a complaint against Defendant and Does 1 to 10, alleging causes of action for breach of contract and common counts. On March 14, 2024, Plaintiff filed the operative First Amended Complaint (“FAC”), alleging the same causes of action against Defendant and Does 1 to 10.

On April 15, 2024, Defendant demurred to the FAC. On May 6, 2024, Plaintiff opposed the demurrer. On May 15, 2024, Defendant replied.

Discussion

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.)

First Cause of Action – Breach of Contract

To state a cause of action for breach of contract, the plaintiff must allege facts demonstrating, “’(1) the contract, (2) the plaintiff's performance of the contract or excuse for nonperformance, (3) the defendant's breach, and (4) the resulting damage to the plaintiff.’ [Citation.]” (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.)

Defendant demurs to the first cause of action in the FAC for breach of contract on the grounds that it fails to allege facts sufficient to constitute a cause of action and is uncertain. Defendant contends the FAC fails to allege the underlying facts necessary to have triggered Defendant’s alleged breach. Defendant contends the Master Dealer Agreement (the “Agreement”) describes 32 different warranties and representations related to the financing of vehicles thereunder, and that the FAC does not allege any facts indicating which one of those warranties or representations was purportedly breached. Defendant contends the FAC contains no description of the terms of the sale to the third party purchaser in this matter, Tiffany Hill, or any description of what she did that may have caused Defendant to breach the Master Dealer Agreement. Defendant also contends the FAC fails to allege facts showing how Plaintiff calculated its alleged damages of more than $51,000.

In opposition, Plaintiff contends to have alleged all necessary facts to state a cause of action for breach of contract. Plaintiff notes that it attached a copy of the Agreement to the FAC, and argues that the FAC alleges Defendant breached the Agreement on approximately May 12, 2023 by failing to make the payments required thereunder. Plaintiff argues that the FAC alleges Plaintiff performed all of its obligations or was otherwise excused, and that Plaintiff was harmed in the amount of $51,177.01, plus costs and attorney fees. Plaintiff contends it already it amended the purported issue with the original complaint regarding the name of the customer involved in the original transaction and related details, and any disputes regarding these details are best reserved for trial, not a demurrer.

The Court finds the FAC fails to allege sufficient facts demonstrating a breach of contract. While the FAC alleges that Defendant sold a vehicle to the third party, Tiffany Hill, and that Plaintiff financed that sale, it does not allege any facts indicating what actions Defendant engaged in to trigger an alleged breach. (FAC, ¶ BC-2.) It merely alleges in a conclusory fashion that, “[d]ue to a breach of the representations and warranties in the Master Dealer Agreement, Defendant was required to buy-back the loan.” (Id.) This is insufficiently specific. Paragraph 6 of the Agreement provides the conditions under which Defendant may be obligated to repurchase and take reassignment of the loan, such as the customer failing to pay as agreed. (Id., Ex. A, ¶ 6.) The Agreement makes clear that there must be a triggering event before Plaintiff proceeds to make a demand on Defendant to repurchase a loan. (Id., italics added.) Thus, it is not enough for Plaintiff to have made a demand for repurchase against Defendant; Plaintiff needs to allege the specific obligation identified in the Agreement that forms the predicate basis upon which Plaintiff can even make the demand for repayment. (See Id.; Byrne v. Harvey (1962) 211 Cal.App.2d 92, 113, italics in original [“‘If a condition precedent imposed by the contract is an act to be performed by the plaintiff he may allege such performance in general terms. ... But if the condition is an event which must happen before the defendant's duty of performance accrues, a specific allegation of the happening of the condition is a necessary part of the pleading of the defendant's breach.’ [Citation.]”)

Based on the foregoing, the Court sustains the demurrer to the First Cause of Action with leave to amend.

Second Cause of Action – Common Counts

“[A] common count, to be sufficiently pleaded, must state not only the indebtedness of the defendant but also directly or impliedly the relationship or the express or implied legal principle upon which a promise to plaintiff is predicated.” (Vaughn v. Certified Life Ins. Co. of Cal. (1965) 238 Cal.App.2d 177, 181.) While common count claims are generally not subject to demurrer, they are subject to demurrer when they are based on the same facts as the specifically pleaded claims. (Orloff v. Metropolitan Trust Co. (1941) 17 Cal.2d 484, 489.)

Defendant demurs to the Second Cause of Action for common counts on the grounds that the FAC fails to allege facts sufficient to constitute a cause of action and is uncertain. Defendant contends the Second Cause of Action is based on the same facts as the First Cause of Action for breach of contract and therefore fails. Plaintiff’s opposition does not address this argument.

The Court finds the FAC fails to allege sufficient facts to state a cause of action for common counts. The Court agrees with Defendant that the Second Cause of Action for common counts is based on the same facts since they seek the exact same amount of money, i.e., $51,177.01. (See FAC, ¶¶ BC-4, CC-2.) The Court further construes Plaintiff’s lack of opposition to this argument as a tacit admission that it is meritorious. (Sexton v. Superior Court (1997) 58 Cal.App.4th 1403, 1410.)

Based on the foregoing, the Court sustains the demurrer to the Second Cause of Action with leave to amend.

Conclusion

The Court sustains the demurrer to the First and Second Causes of Action in the First Amended Complaint. Plaintiff shall serve and file its amended complaint on or before June 21, 2024.