Judge: Curtis A. Kin, Case: 21STCV23196, Date: 2023-04-11 Tentative Ruling

Case Number: 21STCV23196    Hearing Date: April 11, 2023    Dept: 72

DEMURRER TO

FIRST AMENDED CROSS-COMPLAINT

Date:             4/11/23 (9:30 AM)                 

Case:            Enriched Design, Inc. v. Federated Mut. Ins. Co., et al. (21STCV23196)

TENTATIVE RULING:

Cross-Defendant Enriched Design, Inc.’s Demurrer to First Amended Cross-Complaint is OVERRULED.

Cross-defendant Enriched Design, Inc. (“Enriched Design”) demurs to the third cause of action for unjust enrichment and the fourth cause of action for declaratory relief in the First Amended Cross-Complaint.

With respect to the third cause of action, Enriched Design argues that unjust enrichment is not a cause of action. Unjust enrichment has been recognized as a cause of action in the relatively recent case of Professional Tax Appeal v. Kennedy-Wilson Holdings, Inc. (2018) 29 Cal.App.5th 230, which was cited by cross-complainant HSD Investors, LLC (“HSD Investors”). (Professional Tax Appeal, 29 Cal.App.5th at 238 [“The elements of a cause of action for unjust enrichment are simply stated as ‘receipt of a benefit and unjust retention of the benefit at the expense of another’”]; see also Lectrodryer v. SeoulBank (2000) 77 Cal.App.4th 723, 726 [“[T]he elements for a claim of unjust enrichment [are] receipt of a benefit and unjust retention of the benefit at the expense of another”]; Lyles v. Sangadeo-Patel (2014) 225 Cal.App.4th 759, 769 [same as Lectrodryer].) No quasi-contrast between Enriched Design and HSD Investors is necessary to state an unjust enrichment cause of action. (Professional Tax Appeal, 29 Cal.App.5th at 240, quoting Kossian v. American Nat. Ins. Co. (1967) 254 Cal.App.2d 647, 650 [“‘[T]he obligation is imposed because good conscience dictates that under the circumstances the person benefited should make reimbursement.’ [Citation.]”)

Here, HSD Investors sufficiently alleges that Enriched Design received the benefit of occupying the subject premises without paying $392,000 in rent due under the governing lease agreement. (FAXC ¶¶ 24, 45.) Enriched Design also allegedly received the benefit of the repairs to the premises that HSD Investors performed, which were necessitated by flooding caused by cross-defendant’s Arthur Bislamyan’s employee. (FAXC ¶¶ 25, 28, 46.) Enriched Design was allegedly liable for damage caused by the breakage of pipes in the subject premises under the lease. (FAXC ¶¶ 22, 27 & Ex. A at § 8.8.)

Enriched Design’s retention of funds due for rent and repairs is allegedly unjust because, even though it was not a party to the lease, it was allegedly the principal of Bislamyan, the signatory to the lease. (FAXC ¶¶ 12, 56; Civ. Code § 2334 [“A principal is bound by acts of his agent, under a merely ostensible authority, to those persons only who have in good faith, and without want of ordinary care, incurred a liability or parted with value, upon the faith thereof”].)

For the foregoing reasons, HSD Investors sufficiently alleges a cause of action for unjust enrichment against Enriched Design. The demurrer to the third cause of action is OVERRULED.

With respect to the fourth cause of action, “[a]ny person interested…under a contract, or who desires a declaration of his or her rights or duties with respect to another…may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for…a determination of any question of construction or validity arising under the instrument or contract.” (CCP § 1060.) No breach of contract is required for a declaratory relief cause of action. (Meyer v. Sprint Spectrum L.P. (2009) 45 Cal.4th 634, 647.) A general demurrer to a cause of action for declaratory relief must be overruled as long as an actual controversy is alleged; the pleader need not establish any entitlement to a favorable judgment. (Ludgate Ins. Co. v. Lockheed Martin Corp. (2000) 82 Cal.App.4th 592, 606.) Here, even though Enriched Design is not alleged to be a party under the lease, HSD Investors sufficiently alleges the existence of an actual controversy regarding whether Enriched Design is liable for the amounts that Bislamyan owes under the lease, including $392,000 in unpaid rent and amounts due for repairs. (FAXC ¶¶ 50-52.) As stated above, Enriched Design may be interested under the lease as Bislamyan’s principal. (FAXC ¶¶ 12, 56.)

The demurrer to the fourth cause of action is OVERRULED.

Ten (10) days to answer.