Judge: David B. Gelfound, Case: 23CHCV02102, Date: 2024-03-11 Tentative Ruling

Case Number: 23CHCV02102    Hearing Date: March 11, 2024    Dept: F49

LOS ANGELES SUPERIOR COURT

NORTH VALLEY DISTRICT

DEPARTMENT F49

DEMURRER

Motion filed: 10/19/23

MOVING PARTY: Defendants Razi Dental, Inc. and Saeid Razi

RESPONDING PARTY: Plaintiff Tourney Professional Partners, LLC (“Plaintiff”) 

NOTICE: ok 

RELIEF REQUESTED: An order from this Court granting the demurrer to Plaintiff’s Complaint

TENTATIVE RULING: The demurrer is OVERRULED as to the First and Second Causes of Action. The Demurrer is SUSTAINED WITHOUT LEAVE TO AMEND for the Third Cause of Action.

BACKGROUND

This action arises from a dispute over a written lease agreement between the parties.

On July 17, 2023, Plaintiff initiated this action, alleging against Defendants Razi Dental, Inc., Saeid Razi, Daniel D. Durchslag, and Does 1 to 10, for the following causes of action: (1) breach of written contract; (2) quantum meruit; and (3) declaratory relief.

On October 19, 2023, Defendants Razi Dental, Inc., and Saeid Razi (the “moving Defendants”) filed the instant Demurrer.

On February 27, 2024, Plaintiff filed its Opposition. Subsequently, on March 4, 2024, the moving Defendants filed their Reply.

ANALYSIS

Code of Civil Procedure section 430.20 subdivision (a) provides, in part, that “When any ground for objection to a complaint, cross-complaint, or answer appears on the face thereof, or from any matter of which the court is required to or may take judicial notice, the objection on that ground may be taken by a demurrer to the pleading.”

Code of Civil Procedure § 425.10 subdivision (a)(1) requires a complaint to contain a “statement of facts constituting the cause of action, in ordinary and concise language.” Where the complaint fails to state facts sufficient to constitute a cause of action or discloses a defense that bars recovery, a demurrer is proper. Johnson v. Superior Court, 25 Cal.App.4th 1564, 1567 (1994).

“A demurrer tests the legal sufficiency of the factual allegations in a complaint.” Regents of Univ. of California v. Superior Court, 220 Cal.App.4th 549, 558 (2013). Therefore, it tests the “pleadings alone and not the evidence or other extrinsic matters ... [I]t lies only where the defects appear on the face of the pleading or are judicially noticed.”  (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) 

A.    Procedural Requirements Are Not Satisfied

1.      Meet and Confer

Before filing a demurrer, the demurring party is required to meet and confer in person or by telephone with the party who filed the pleading demurred to for the purposes of determining whether an agreement can be reached through a filing of an amended pleading that would resolve the objections to be raised in the demurrer.  (Code Civ. Proc. § 430.41, subd. (a).)

            Here, the moving Defendant met the requirement by filing a Declaration of Meet and Confer (CIV-140) form concurrently with the Motion.

2.      Timeliness

Code of Civil Procedure section 430.40 subdivision (a) states, “A person against whom a complaint or cross-complaint has been filed may, within 30 days after service of the complaint or cross-complaint, demur to the complaint or cross-complaint.”

            “If the parties are not able to meet and confer at least 5 days before the date the responsive pleading is due, the demurring party shall be granted an automatic 30-day extension of time within which to file a responsive pleading, by filing and serving, on or before the date on which a demurrer would be due, a declaration stating under penalty of perjury that a good faith attempt to meet and confer was made and explaining the reasons why the parties could not meet and confer. The 30-day extension shall commence from the date the responsive pleading was previously due, and the demurring party shall not be subject to default during the period of the extension. Any further extensions shall be obtained by court order upon a showing of good cause[.]”(Code Civ. Proc., § 430.41, subd. (a), par. (2).) (Underlines added.)

            Here, the moving Defendants, Razi Dental, Inc., and Saeid Razi, were personally served with the Complaint on July 21 and July 24, 2023, respectively (7/21/23 Proof of Service, 7/25/23 Proof of Service), establishing the deadline for filing a joint demurrer on behalf of both moving Defendants as August 21, 2023.

            Here, the moving Defendants’ declaration of meet and confer establishes that “[a]t least five days before the date a responsive pleading was due ...I met and conferred with the party who filed the pleading[.]” Consequently, the automatic 30-day extension is inapplicable in this case. Additionally, the Court notes that the case files do not reflect any records of granted extensions for the Court’s consideration.

The Demurrer was filed on October 19, 2023, thereby missing the August 21, 2023 deadline, pursuant to Code of Civil Procedure section 430.40 subdivision (a).

The Court observes that the issue of timeliness was not raised in Plaintiff’s Opposition. Therefore, the Court will proceed to assess the merits of the Demurrer, operating under the assumption that the parties stipulated an extension during their meet and confer process.

B.     First Cause of Action – Breach of Contract

The Demurrer argues that Defendant Saeid Razi (“Razi DDS”) is not a party to the alleged lease contract. Additionally, it is argued that the alleged lease contract, by its own terms, expired on June 30, 2020. (Dem. at 5.) The moving Defendants assert that these two points demonstrate that the Complaint fails to state facts sufficient to constitute a cause of action and is uncertain, ambiguous, and unintelligible, citing Code of Civil Procedure sections 430.10 subdivisions (e) and (f).

In response, Plaintiff maintains that Defendant Razi DDS was indeed a party to the contract, as “evidenced by his signature on the AIR Commercial Real Estate Association Guaranty of Lease, Paragraph 1.11.” This, according to Plaintiff, indicates that Defendant Razi DDS is a guarantor of the lease despite his “inadvertently failed to sign.” (Opp’n., at 3.)

Paragraph 1.11 of the “Standard Multi-Tenant Office Lease—Net” (“Standard Lease”) specifies, “Guarantor: The obligations of the Lessee under this Lease shall be guaranteed by Seid Razi, DDS and Daniel D. Durchslag, DDS, individually and collectively (“Guarantor”). (See also Paragraph 37 and Exhibit G.)” (Compl., Ex. “1,” at 1.).

Paragraph 37, a preprinted section pertaining to the Guarantor provision, states, in part, “The Guarantors, if any, shall each execute a guaranty in the form most recently published by the AIR Commercial Real Estate Association.” (Underlines added.) (Compl., Ex. “1,” at 12.)

The Court notes that the AIR COMMERCIAL REAL ESTATE ASSOCIATION GUARANTY OF LEASE (“Guaranty of Lease”) clearly states in its first paragraph, “Saeid Razi, DDS, and Daniel D. Durchslag, DDS, (individually and collectively) hereinafter ‘Guarantors’ have a financial interest in the Lease [.]” (Compl., at 65, Ex.”1.”)

The Court further observes that Razi DDS’s signatures appear on the signature lines of both the Standard Lease (Compl., Ex. “1,” at 13), and the Guaranty of Lease. (Compl., at 65, Ex.”1.”) Additionally, the Court notes that the execution date of the Standard Lease is recorded as “6/8/10” (Compl., Ex. “1,” at 13), whereas the Guaranty of Lease specifies “On: June ____, 2010,” leaving the exact date within June 2010 unspecified. (Compl., at 65, Ex.”1.”)

“As the guaranty was joint and several, the action would lie against either or both of the guarantors.” (Davenport v. Stratton (1944) 24 Cal.2d 232, 238 (Davenport).) Where a contract of guaranty executed in consideration of the execution of the lease expressly recited that it was annexed to and formed part of the lease and agreement referring to the lease, the guarantor was estopped from denying liability on the ground that the lease was not physically attached to the guaranty at the time, guarantor signed latter document. (Id., at 243.)

“While the ‘allegation [of a complaint] must be accepted as true for purpose of demurrer,’ the ‘facts appearing in exhibits attached to the complaint will also be accepted as true and, if contrary to the allegations in the pleading, will be given precedence.” (Moran v. Prime Healthcare Management, Inc. (2016) 3 Cal.App.5th 1131, 1145-1146 (Moran).)

Here, the Complaint includes a copy of the alleged lease agreement and guaranty of lease. Contrary to the moving Defendants’ contention, the Court finds that both documents bear Defendant Razi DDS’s signature. (See Compl., Ex. “1.”) Even if Defendants’ claim that the signature was missing on the guaranty of lease form were true, the Court determines that this omission would not be fatal. Paragraph 37 of the Standard Lease, which Razi DDS undisputedly signs, explicitly lists him as one of the guarantors. This is consistent with the information stated in the Guaranty of Lease.

In accordance with established rules in Davenport and Moran, the Court finds the moving Defendants’ argument unpersuasive as there is no contradiction in the Complaint’s attachments that would warrant giving precedence to render the allegations in the Complaint insufficient to state the first cause of action.

Concerning the moving Defendants’ second argument that the alleged lease contract, by its own terms, expired on June 30, 2020, Plaintiff correctly points out that this assertion does not meet the standard required for a demurrer. In the Complaint, Plaintiff alleges that Defendants “leased the OFFICE from Plaintiff from July 2010 to September 2022.” (Compl., ¶ 10.) This assertion of a contractual relationship beyond the original expiration date is substantiated by the terms of the Standard Lease. Specifically, Section 26 of the lease contemplates a permissible automatic extension by stating, “In the event that Lessee holds over, then the Base Rent shall be increased[.]” This position is further supported by the evidence that the moving Defendants continued to make lease payments for the period between January 2020 and August 2022, although the sufficiency of the amount is disputed. (Compl., Ex. “2.”). Consequently, the Court finds this argument to lack merit.

Accordingly, the Court concludes that the Demurrer does not demonstrate sufficient grounds to establish that the Complaint fails to state sufficient facts or is uncertain as to the first cause of action.

The Court OVERRULES the Demurrer as to the first cause of action.

C.    Second Cause of Action – Quantum Meruit

“‘Quantum meruit refers to the well-established principle that “the law implies a promise to pay for services performed under circumstances disclosing that they were not gratuitously rendered.” [Citation.] To recover in quantum meruit, a party need not prove the existence of a contract [citations], but it must show the circumstances were such that “the services were rendered under some understanding or expectation of both parties that compensation therefor was to be made.”’” (Miller v. Campbell, Warburton, Fitzsimmons, Smith, Mendel & Pastore (2008) 162 Cal.App.4th 1331, 1344.) “The underlying idea behind quantum meruit is the law's distaste for unjust enrichment. If one has received a benefit which one may not justly retain, one should ‘restore the aggrieved party to his [or her] former position by return of the thing or its equivalent in money.’ [Citation.]” (Maglica v. Maglica (1998) 66 Cal.App.4th 442, 449, italics omitted.)

            “[Plaintiff] cannot recover for both breach of contract and quantum meruit (see Hedging Concepts, Inc. v. First Alliance Mortgage Co. (1996) 41 Cal.App.4th 1410, 1419–1420,), but they can plead both causes of action.” (Newport Harbor Ventures, LLC v. Morris Cerullo World Evangelism (2016) 6 Ca.App.5th 1207, 1223 (New Harbor).)

            Here, the moving Defendants argue that the present case should be distinguished from the Newport Harbor decision. Specifically, they contend that the Newport Harbor addresses situations where “a pleader may be in doubt about what actually occurred, the modern practice allows a party to plead the two causes of action alternatively and make inconsistent allegations that a reasonable attorney would find legally tenable.” (Reply, at 3-4, citing Newport Harbor.) They contend that in this case,  “Plaintiff does not allege inconsistent facts in its Quantum Meruit claims from those alleged relative to the breach of contract cause of action.” (Reply, at 4.)

            The Court, however, disagrees with this interpretation. The Newport Habor ruling states, “[the plaintiffs] were permitted to plead inconsistent counts” in response to the defendants’ assertion that “the quantum meruit allegations were inconsistent with the breach of contract allegations.” (Newport Harbor, at 1221-1222.) Similar to Newport Harbor, the inconsistency is considered inherent to the causes of action themselves, between the breach of contract and quantum merit. Furthermore, Newport Harbor elaborates that “when a pleader is in doubt about what actually occurred or what can be established by the evidence, the modern practice allows that party to plead in the alternative and make inconsistent allegations. (Id., at 1222, citing Mendoza v. Continental Sales Co. (2006) 140 Cal.App.4th 1395, 1402.) (Underlines added.) Here, Plaintiff is permitted to please Quantum Meruit in the alternative, as it cannot be definitely stated that there is no doubt what can be established by the evidence regarding the breach of contract cause of action.

            Therefore, the Court OVERRULES the Demurrer as to the second cause of action – quantum meruit.

D.    Third Cause of Action – Declaratory Relief

Code of Civil Procedure section 1060 authorizes actions for declaratory relief under a “written instrument” or “contract.” Declaratory relief generally operates prospectively to declare future rights, rather than to redress past wrongs. (Babb v. Superior Court (1971) 3 Cal.3d 841, 848.)

“The fact that the procedure operates prospectively does not create a conflict with the established principle that redress for past wrongs may be had in a proper action for declaratory relief.” (Travers v. Louden (1967) 254 Cal.App.2d 926, 931.)

“In Columbia Pictures Corp. v. DeToth, 26 Cal.2d 753, and Ermolieff v. R.K.O. Radio Pictures, 19 Cal.2d 543, the right to redress for past breaches of contract was recognized, but in each case the contract had some time to run and there was need for a declaration as to the future conduct of the parties thereunder. Of course, neither case stands for the proposition that a declaration with respect to past wrongs would be proper when there was no occasion to define respective rights which would govern the future conduct of the parties.” (Ibid.) (Underlines added.)

In the current case, while the Complaint adequately demonstrates a controversy as to the payments owed by Defendants, it is uncontested that the alleged lease agreement concluded in September 2022. (Compl., ¶ 10.) Consequently, declaratory relief is not appropriate when it does not pertain to the future actions of Defendants.

Moreover, the Court determines that there is no reasonable prospect that the identified deficiency can be cured by an amendment. Therefore, leave to amend is NOT GRANTED.

Accordingly, in accordance with established California rules, the Court SUSTAINS WITHOUT LEAVE TO AMEND the Demurrer as to the third cause of action - declaratory relief.

CONCLUSION

The Demurrer is OVERRULED as to the First and Second Causes of Action. The Demurrer is SUSTAINED WITHOUT LEAVE TO AMEND for the Third Cause of Action.

Moving party is ordered to provide notice of this order.