Judge Daniel M. Crowley, Case Number: 24STCV27313, Date: 2025-02-19 Tentative Ruling

Defendants James A. Kay, Jr, and Communications Relay Corp.’s Demurrer is OVERRULED. Defendants to answer in 20 days.

Defendants James A. Kay, Jr, and Communications Relay Corp. demur to Plaintiff Southern California Gas Company’s (“SoCal”) First Amended Complaint (“FAC”).

Since 1969, Plaintiff SoCal has licensed certain parcel of property located at or near the mountain peak known as Oat Mountain in Los Angeles County, California (the “Property”) to James A. Kay Jr. d/b/a Communications Relay Corp. Plaintiff licensed the property to Defendants pursuant to a written agreement entered into on February 17, 2000 with an initial term of ten years beginning in April 1, 2000 (the “Agreement”). The Agreement could be extended pursuant to two separate, consecutive options to extend for two additional five year periods. Plaintiff alleges Defendants exercised the first option to extend on March 7, 2007 and the second option to extend on September 13, 2014. The Agreement terminated on March 31, 2020.

Plaintiff sent Defendants’ notice of termination of the agreement on February 23, 2021 and informed them that they would have to vacate the Property. Defendants did not vacate the Property and informed Plaintiff on February 9, 2023 through the present that Plaintiff does not have the right to terminate the Agreement. Plaintiff informed Defendants again on November 2, 2023 that the Agreement was terminated and Defendants would have to vacate the Property by January 1, 2024. Defendants continue to refuse to vacate the Property.

On February 7, 2024, Plaintiff filed this action against Defendant James A. Kay, Jr. d/b/a Communications Relay Corp. On October 18, 2024, Plaintiff filed a First Amended Complaint against Defendants James A. Kay, Jr., Communications Relay Corp. and Communications Relay LLC alleging (1) breach of contract; (2) trespass; (3) ejectment; and (4) quiet title.

Plaintiff initially filed this action in San Diego County Superior Court (“San Diego Action”). Defendant Communications Relay, LLC filed a Motion for Change of Venue. The court in the San Diego Action granted the Motion for Change of Venue and transferred the matter to this Court.

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, the defects must be apparent on the face of the pleading or via proper judicial notice. (Code Civ. Proc., §§ 430.30, 430.70; Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) The court assumes the truth of the complaint’s properly pleaded or implied factual allegations. (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) A “demurrer does not, however, admit contentions, deductions or conclusions of fact or law alleged in the pleading, or the construction of instruments pleaded, or facts impossible in law.” (S. Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732.)

Defendants demur to the FAC on grounds that Defendant James Kay, Jr., an individual, is not a party to the Agreement and is therefore not liable thereon. Defendants also demur on grounds that Communications Relay Corp. was dissolved while the Agreement was in effect and is therefore not a proper party to this action.

In response, Plaintiff argues the Agreement is between SoCal Gas and Kay in his individual capacity and his d/b/a Communications Relay Corp. Plaintiff argues Communications Relay LLC also admits that it is still occupying and using the Property. Plaintiff also argues the FAC alleges claims independent of the alleged breach of contract, including trespass, ejectment and quiet title. Plaintiff argues it may also sue Defendant Communications Relay Corp., even though it is a dissolved corporation. Finally, Plaintiff argues Defendants Kay and Communications Relay LLC are successors-in-interest to the “Licensee” under the Agreement. Plaintiff argues the demurrer should be overruled in its entirety.

In reply, Defendants argue Defendant Kay was not a party to the license agreement. Defendants argue that only Communications Relay Corp. was a licensee. Defendants argue the allegation of their status as successors-in-interest is unsupported by any facts. Defendants argue Kay is an improper party to this action because there are insufficient facts to make him personally liable for any breach of contract. Defendants argue the remaining causes of action fail as to Kay because there are no allegations that he personally is occupying or refusing to relinquish possession. Defendants argue Plaintiff is also precluded from suing Communications Relay Corp., because it was dissolved 15 years ago.

“Licensee” is defined in the Agreement as “James A. Kay, Jr. d/b/a; Communications Relay Corp., a California corporation.” (FAC, Ex. A, p. 1.) The Agreement is signed by the “Licensee,” “Communications Relay Corp” and the signor is James A. Kay, Jr. as President of Communications Relay Corp. (FAC, Ex. A, p. 12.)

Based on these allegations, Kay was using Communications Relay Corp. as his “dba.” “Use of a fictitious business name does not create a separate legal entity distinct from the person operating the business. The business name is a fiction, and so too is any implication that the business is a legal entity separate from its owner.” (Ball v. Steadfast-BLK (2011) 196 Cal.App.4th 694, 701 (sole proprietor plaintiff was proper entity to foreclose on lien (1) where lien claimant was sole proprietor plaintiff’s d/b/a and (2) sole proprietor plaintiff signed the lien as “owner” of d/b/a).)

It is therefore unambiguous that Kay individually was an intended licensee. From the express language of the Agreement, Kay was using Communications Relay Corp., whether properly or improperly, as his “dba.” Thus, it is unambiguous from the Agreement that Kay is a party to the Agreement. Plaintiff’s allegation that Kay and Communications Relay Corp. were both intended parties to the Agreement is a reasonable interpretation of this ambiguity and must be accepted as true on demurrer. (Aragon-Haas v. Family Security Ins. Services, Inc. (1991) 231 Cal.App.3d 232, 239 (“general demurrer to the complaint admits not only the contents of the instrument but also any pleaded meaning to which the instrument is reasonably susceptible”).) As such, the breach of contract claim is sufficiently alleged against Defendant Kay as an individual.

The FAC also alleges that Defendants Kay and Communications Relay LLC. succeeded to the Agreement “at some time between April 1, 2000 and present.” (FAC, ¶11.) Based on this allegation and Defendants’ RJN, Ex. 1 evidencing Communications Relay Corp.’s dissolution in 2009, there are sufficient facts to allege that Kay and Communications Relay LLC are successors to Communications Relay Corp. on the Agreement.

Defendants also fail to identify any defect in the remaining causes of action as to Defendant Kay. The trespass, ejectment and quiet title claims are independent of the breach of contract claim. Plaintiff alleges that “Defendants,” which includes Kay individually, (1) have continued to remain on the Property without Plaintiff’s consent and are trespassing (FAC, ¶31); (2) have repeatedly refused to relinquish possession and leave the Property, requiring their ejectment from the premises (FAC, ¶¶37-38); and (3) have asserted adverse claims to the Property based on a claim of right to a leasehold or other interest, requiring an order quieting title (FAC, ¶¶42-43.) These claims are sufficiently stated as to Kay.

As to Defendant Communications Relay Corp., it was dissolved on December 17, 2009. (Defendants’ RJN, Ex. 1.) Plaintiff does not dispute this fact. The alleged wrongful holdover of the Property occurred after the Agreement allegedly terminated in 2020, eleven years after Communications Relay Corp. was dissolved. The second option to extend the Agreement was also exercised in September 2014, five years after Communications Relay Corp. was dissolved. (FAC, ¶13.)

“A corporation which is dissolved nevertheless continues to exist for the purpose of winding up its affairs, prosecuting and defending actions by or against it and enabling it to collect and discharge obligations, dispose of and convey its property and collect and divide its assets, but not for the purpose of continuing business except so far as necessary for the winding up thereof.” (Corp. Code, §2010(a).) Communications Relay Corp.’s status as a dissolved corporation alone is therefore not grounds for demurrer.

Hon. Daniel M. Crowley

Judge of the Superior Court