Judge: Colin Leis, Case: 22STCV36736, Date: 2023-02-15 Tentative Ruling

Case Number: 22STCV36736    Hearing Date: February 15, 2023    Dept: 74

Superior Court of California

County of Los Angeles – CENTRAL District

Department 74

MOVING PARTIES: Defendants Cozy Town Realty LLC and JK Space Investments, Inc.     

RESPONDING PARTY: Plaintiff Bella Development LLC

Demurrer

The court considered the moving papers, opposition, and reply papers filed in connection with this motion.

BACKGROUND

            On November 21, 2022, Plaintiff Bella Development LLC (“Plaintiff”) filed a complaint against Defendants Wonill Kim, Won Kim, Cozy Town Realty LLC, JK Space Investments, Inc. and Does 1 through 20. The complaint stems from an alleged breach of an oral contract agreed upon in September of 2019. (See Form complaint, BC-1). In the complaint Plaintiff alleges that Defendant Wonill Kim who holds title to 1422 S. Norton Avenue in Los Angeles, California (“the property”) “entered into an oral agreement to remodel said property and maintain an Airbnb during the interim prior to re-sale.” (Ibid.) Defendant Wonill Kim’s alleged breach occurred when two offers to purchase the property were rejected.

            Defendants Cozy Town Realty LLC and JK Space Investments, Inc. (“Defendants”) filed the instant Demurrer on December 29, 2022.

            Plaintiff filed Opposition Papers to the Demurrer on January 30, 2023.

            Defendants filed Reply Papers on February 7, 2023.

            Note that Defendant Wonill Kim and/or Defendant Won Kim did not file any papers in relation to the demurrer in their individual capacity.

REQUEST FOR JUDICIAL NOTICE

            Plaintiff requests the Court to take judicial notice of Exhibits 1 and 2 in their separate Request for Judicial Notice.

Pursuant to Evidence Code § 452(h) the court takes judicial notice of Exhibit 1: Secretary of State, Statement of Information (Limited Liability Company) LLC-12 filed under 19-D44786 on September 11, 2019 by Cozy Town Realty LLC demonstrating that Cozy Town Realty LLC is a registered limited liability company in the state of California.

Pursuant to Evidence Code § 452(h) the court takes judicial notice of Exhibit 2: Secretary of State, Statement of Information (Domestic Stock and Agricultural Cooperative Corporations) Form S filed under G925859 on September 10, 2019 by JK Space Investment, Inc. 

LEGAL STANDARD OF A DEMURRER

“[A] demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.) A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (See Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994 [in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents].) For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true, but the reviewing court does not assume the truth of conclusions of law. (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 967.)

DISCUSSION

A.    Cause of Action – Breach of Contract

To state a cause of action for breach of contract, Plaintiff must be able to establish “(1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)

Here, Plaintiff fails to establish any elements of a breach of contract. Plaintiff argues that demurrers for uncertainty are disfavored unless the pleading is so incomprehensible that a defendant cannot reasonably respond, citing Lickiss v. Financial Industry Reg. Authority (2012) 208 Cal.App.4th 1125, 1135. Here, we have such a pleading.

First, Plaintiff does not establish the existence of a contract. The four elements to create a contract under California law are: (1) parties capable of contracting, (2) their consent, (3) a lawful object, and (4) consideration. (See Cal. Civ. Code § 1550). The alleged agreement is that Defendant Wonill Kim would remodel the property and maintain an Airbnb prior to resale of the property. However, there is no mention of consideration in the complaint. “Consideration is present when the promisee confers a benefit or suffers a prejudice.” (Diaz v. Tesla (2022) 589 F.Supp.3d 809). In Diaz, the jury ruled that the parties had an implied contract because the plaintiff agreed to provide labor in exchange for being employed. Here, we can distinguish because nowhere in the complaint does Plaintiff specify what was to be exchanged for Defendant’s remodeling of the property. Lack of consideration is fatal to contract formation.  

Second, the complaint lacks any mention of the Plaintiff’s performance, duties, or obligations. Additionally, with no mention of consideration it is unclear to Defendant and the Court what benefit or prejudice is being exchanged.

Third, Plaintiff alleges that the apparent breach was when “two offers to purchase the property was rejected by Wonill Kim”. (See complaint, BC-1). However, nowhere in the complaint does it state the terms of the alleged oral contract and how the rejected offers manifest a breach of contract.

Fourth, although the Plaintiff’s complaint does include an exhibit of itemized accounting to demonstrate damages, it is unclear to the Court how these damages have come to be calculated. With no evidence of an initial contract in existence, damages are purely speculative.

   Finally, Defendants have made clear in their Demurrer that at no point were demurring Defendants Cozy Town Realty LLC and JK Space Investments, Inc. ever alleged to be part of the contract nor alleged to have breached the contract. If a contract does exist and any breach occurred, it was that of Defendant Wonill Kim. (See, complaint, BC-1). Plaintiff does not address this point in their Opposition Papers. 

CONCLUSION

            A. Leave to Amend

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 [court shall not “sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment”]; Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037

Here, Defendant reached out to Plaintiff to meet and confer, attempting to clarify the allegations within the complaint. Defendant received no response on three separate occasions. (See, Demurrer, Declaration of John Heath, ¶ 3-5). When Defendant finally received a response, Plaintiff opted not to amend the initial complaint. Because the complaint is deficient, and there may be a reasonable possibility of successful amendment, the Court will grant Plaintiff leave to amend the initial complaint.

Based on the foregoing, the court sustains with leave to amend the Demurrer of Defendants Cozy Town Realty LLC and JK Space Investments, Inc. Plaintiff shall file its amended complaint within 20 days of this order.

Defendant is ordered to give notice of this order.

IT IS SO ORDERED.

DATED:  February 15, 2023

_____________________________

Colin Leis

Judge of the Superior Court