Judge: David A. Hoffer, Case: 30-21-01215706, Date: 2022-07-25 Tentative Ruling

The demurrer by defendants Great American Logistics & Distribution, Inc., (“GALD”) Mayflower Transit, LLC (“Mayflower”) and Maria Guzman (“Guzman”) (together “defendants”) to the first amended complaint (“FAC”) by plaintiffs J. David Bournazian and Maureen Bournazian (together “plaintiffs”) is SUSTAINED in its entirety with 30 days leave to amend.

Preliminary Matter – Plaintiffs’ Request for Judicial Notice (“RJN”) is DENIED as to all Exhibits as they are not relevant to the determination of the demurrer/motion. (See State Compensation Ins. Fund v. ReadyLink Healthcare, Inc. (2020) 50 Cal.App.5th 422, 442.)

Procedural Deficiency

Plaintiffs’ opposition exceeds that maximum number of pages, and they failed to apply for permission to file a longer memorandum. (CRC Rule 3.1113 (d), (e)). A memorandum which exceeds the page limits is considered in the same manner as a late-filed paper. (Id. at subd. (g))

The court considers only the first 15 pages of plaintiffs’ 25 page opposition memorandum of points and authorities. However, the court notes that plaintiffs set forth their arguments in the first seven pages of their brief, and then repeated those arguments thereafter.

Statute of Limitations

Defendants contend that plaintiffs’ complaint is barred by the period of limitations set forth in Item 92 ¶14 of the Maximum Rate Tariff 4 (2021). They argue that per the Tariff, suit must be instituted against the mover within 2 years and 1 day from the date when notice in writing is given by the mover to the claimant that the mover has disallowed the claim, or any part or parts specified in the notice and that plaintiffs complaint was not instituted within this timeframe. Plaintiffs argue that the Tariff does not shorten the applicable statutes of limitation for their claims.

Assuming, without deciding, that Maximum Rate Tariff 4 applies, it does not bar plaintiffs’ complaint because neither the initial complaint nor the FAC plead that written notice was given by the defendants to plaintiffs, that their claim was disallowed, or a date for such notice.

Defendants also incorrectly argue that plaintiffs’ complaint is barred by the statute of limitations set forth in CCP §338(c)(1) for taking, detaining or injuring goods or chattels or for specific recovery of personal property. Because plaintiffs complaint alleges a breach of contract, namely failing to obtain an insurance policy (which was a contract term for which plaintiff paid) (FAC ¶¶19-23), the applicable period of limitations is four years, as plaintiff contends. (CCP §337(a))

A complaint is not subject to demurrer where nothing on its face suggests it is barred by the applicable statute of limitations. (Union Carbide Corp. v. Superior Court (1984) 36 Cal.3d 15, 25-26). “The running of the statute must appear “clearly and affirmatively” from the dates alleged.” (Roman v. County of Los Angeles (2000) 85 Cal.App.4th 316, 324)  If the dates which establish the running of the statute of limitations are not clearly pled in the compliant, there is no ground for general demurrer. (Id. at p. 325)

Here, the contract at issue was entered into in August 2017 (FAC ¶18), and the complaint was filed on 8/12/2021. The running of the 4 year statute of limitations does not clearly and affirmatively appear on the face of the complaint from the dates alleged.

Defendants’ objections to the FAC made on statute of limitations grounds are overruled.  Unless further allegations are made in an amended complaint, this challenge should not appear in any future pleading motions. 

Merits

C/A 1 – Breach of Contract

When an action is based on breach of a written contract, the terms of that contract must be set out verbatim in the body of the complaint or a copy of the written agreement must be attached and incorporated by reference into the pleading. (Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 307)

The FAC does not set out verbatim the terms of the contract entered into between the parties.  Nor is a copy of the contract attached to the complaint and incorporated therein by reference. The FAC therefore fails to plead the existence of a written contract.

The demurrer to the first cause of action is sustained with 30 days leave to amend.

C/A 2 – Breach of Implied Covenant of Good Faith and Fair Dealing

The implied covenant of good faith and fair dealing imposes upon the contracting parties the obligation to do everything that the contract presupposes they will do to accomplish the purpose of the contract. (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1393).  “It is an implied-in-law term of the contract.” (Ibid.) “The ‘precise nature and extent of the duty imposed…will depend on the contractual purposes.” (Ibid.)

Because the FAC fails to plead sufficient facts to establish the existence of a contract between plaintiffs and defendants, it necessarily follows that the FAC also fails to plead sufficient facts to state a cause of action for breach of the covenant of good faith and fair dealing

The demurrer to the second cause of action is sustained with 30 days leave to amend.

C/A 3 – Promissory Estoppel

“Promissory estoppel applies whenever a ‘promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance’ would result in an “injustice” if the promise were not enforced.  (Lange v. TIG Ins. Co. (1998) 68 Cal.App.4th 1179, 1185.)  The elements are (1) a clear promise, (2) reliance, (3) substantial detriment, and (4) damages “measured by the extent of the obligation assumed and not performed.”  (Toscano v. Greene Music (2004) 124 Cal.App.4th 685, 692.) 

The promise itself “is an indispensable element of the doctrine of promissory estoppel.” (Garcia v. World Sav., FSB (2010) 183 Cal.App.4th 1031, 1044) It must be “clear and unambiguous in its terms,” and cannot be based on an ambiguous statement. (Ibid.) 

Defendants argue the FAC lacks the requisite specificity to plead promissory estoppel, and that this case is nothing more than a breach of contract action. Plaintiffs counter that promissory estoppel is sufficiently pled by alleging that defendants offered the full value protection for plaintiff’s property, that the property was fully insured, and a policy of insurance existed.  Plaintiffs relied upon the promise which was false. (FAC ¶¶56-57, 66-71).

The FAC does not sufficiently factually plead the essential elements of promissory estoppel, including “a clear promise” and forbearance. Is the promise upon which plaintiffs relied to their detriment the promise made before the parties entered into the contract (that of the existence of insurance) or the promise defendants made after the fact (that they would pay for plaintiffs’ damages)? In either case, the FAC does not plead plaintiffs’ forbearance. What did plaintiffs do or forgo as a result of reliance on the promise of insurance or the promise to pay their claims? 

The demurrer to the third cause of action is sustained with 30 days leave to amend.

C/A 4 - Fraud

The elements of a fraud claim are: (a) a misrepresentation (false representation, concealment or nondisclosure); (b) knowledge of falsity/scienter; (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage. (Lazar v. Sup. Court (1996) 12 Cal.4th 631, 638) Every element must be alleged in full, factually and specifically. (Wilhelm v. Pray, Price, Williams & Russell (1986) 186 Cal.App.3d 1324, 1331) The policy of liberal construction of pleading will not be invoked to sustain a pleading defective in any material respect. (Ibid.)  The particularity requirement necessitates pleading facts that show how, when, where, to whom, and by what means the representations were tendered. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184) In addition, when fraud is alleged against a corporation, the complaint must also allege the names of the persons who made the misrepresentations, their authority to speak for the corporation, to whom they spoke, what they said or wrote, and when it was said or written. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.)  

The FAC alleges that “defendants and each of them repeatedly promised and reassured plaintiffs that payment for plaintiffs’ damages would be forthcoming.” (FAC ¶73) This allegation does not establish who spoke on behalf of the defendants, their authority to speak, when the statements were made and whether they were oral or written. Locke v. Warner Bros., Inc. (1997) 57 Cal.App.4th 354, 368, a summary judgment case cited by plaintiffs on fraudulent intent, does not address the necessary elements for pleading fraud against a corporation and is therefore inapposite.

The demurrer to the fourth cause of action is sustained with 30 days leave to amend.

C/A 5 – Declaratory Relief

The elements for a declaratory relief action are (1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to plaintiff’s rights or obligations.  (Brownfield v. Daniel Freeman Marina Hospital (1989) 208 Cal.App.3d 405, 410.)  The proper subjects of a declaratory relief action are set forth in CCP §1060 (Ibid.)

All that CCP §1060 requires is an actual controversy relating to the legal rights and duties of the respective parties. (Ludgate Ins. Co. v. Lockheed Martin Corp. (2000) 82 Cal.App.4th 592, 606).  In a declaratory relief action, the complaint is legally sufficient if it sets forth facts showing the existence of an actual controversy relating to the legal rights and duties of the parties under a written instrument and requests that the rights and duties of the parties be adjudicated by the court. (Ibid.)

The fifth cause of action for declaratory relief in the FAC pleads that from 8/2017 through the present the defendants lied to plaintiffs about the full value protection and insurance placed, lied about paying for damages, lied about settlement, and lied about GALD’s name change. (FAC ¶92). Then in conclusory fashion, the FAC pleads that an actual and justiciable controversy exists between plaintiffs and defendants. (FAC ¶94). Without the terms of the written contract set forth verbatim in the complaint or attached as an exhibit thereto, the FAC fails to establish the legal rights and duties of the contracting parties. That defendants lied to plaintiffs does not plead an actual controversy relating to such rights and duties.

The demurrer to the fifth cause of action is sustained with 30 days leave to amend.

Defendants’ motion to strike portions of the FAC is MOOT in light of the court’s ruling on the defendants’ demurrer.

Moving parties are ordered to give notice of this ruling.