Judge: David B. Gelfound, Case: 24CHCV01112, Date: 2024-09-06 Tentative Ruling

Case Number: 24CHCV01112    Hearing Date: September 6, 2024    Dept: F49

Dept. F49¿ 

Date: 9/6/24

Case Name: Young & Chris, Inc.,

dba Dragon Street v. Morrison

Studios Ltd., L.P., and Does 1-25

Case No. 24CHCV01112

LOS ANGELES SUPERIOR COURT

NORTH VALLEY DISTRICT

DEPARTMENT F49

DEMURRER

Motion filed: 8/23/24

MOVING PARTY: Defendant Morrison Studios Ltd., L.P.

RESPONDING PARTY: Plaintiff Young & Chris, Inc., dba Dragon Street 

NOTICE: OK.

RELIEF REQUESTED: An order sustaining the Demurrer to Plaintiff’s Complaint

TENTATIVE RULING: The Demurrer is SUSTAINED WITH LEAVE TO AMEND.

BACKGROUND

This is a breach of contract action brought by the commercial lease tenant plaintiff against the landlord.

On March 29, 2024, Plaintiff Young & Chris, Inc. dba Dragon Street (“Plaintiff”) filed its Complaint against Defendant Morrison Studios Ltd., L.P. (“Defendant”), alleging the following causes of action: (1) Breach of Contract, (2) Breach of Covenant of Good Faith and Fair Dealing, and (3) Breach of Quiet Enjoyment – Private Nuisance.

On June 3, 2024, Defendant filed this instant Demurrer. Subsequently, Plaintiff filed its Opposition on August 23, 2024, and Defendant submitted its untimely Reply on September 3, 2024.

ANALYSIS

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (Code Civ. Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.)

At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against them. (Semole v. Sansoucie (1972) 28 Cal.App.3d 714, 721.) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.) The court “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law[.]” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525 (Berkley).) In applying these standards, the court liberally construes the complaint to determine whether a cause of action has been stated. (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726, 733.)

“Where a pleading includes a general allegation, such as an allegation of an ultimate fact, as well as specific allegations that add details or explanatory facts, it is possible that a conflict or inconsistency will exist between the general allegation and the specific allegations. To handle these contradictions, California courts have adopted the principle that specific allegations in a complaint control over an inconsistent general allegation.” (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1235–36.)

A.    Meet and Confer

A party filing a demurrer “shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.” (Code Civ. Proc., section 430.41(a).) A failure to meet and confer does not constitute grounds to sustain or overrule a demurrer. (See Code Civ. Proc., sections 430.41 (a)(4).)

Here, Defendant’s counsel, Pamela A. Mozer, attests that she had conducted a number of discussions with Plaintiff’s counsel about the allegations in the Complaint. (Mozer Decl. ¶ 3.) Specifically, on March 11, 2024, outlining the issues raised in the Demurrer. (Mozer Decl. Ex. “A.”) She tried to conduct a telephonic meet and confer with Plaintiff’s counsel but was only able to leave a voicemail. (Id. ¶ 6.) She left several messages but never received a return call. (Id. ¶ 7.) On June 3, 2024, in responding to Plaintiff’s counsel’s email claiming that previous discussions did not constitute a viable meet and confer again, discussing the issues. (Id. ¶¶ 10-11, Ex “B.”) Despite these facts, she was unable to succeed meet and confer. (Id. ¶ 14.)

Consequently, the Court determines that the requirement for in person or telephonic meet and confer has not been satisfied. Nonetheless, the Court proceeds to examine the merits of the Demurrer.

B.     First Cause of Action – Breach of Contract

“To prevail on a cause of action for breach of contract, the plaintiff must prove (1) the contract, (2) the plaintiff's performance of the contract or excuse for nonperformance, (3) the defendant's breach, and (4) the resulting damage to the plaintiff.  (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.)  “A written contract may be pleaded either by its terms – set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference – or by its legal effect. [Citations.]  In order to plead a contract by its legal effect, plaintiff must ‘allege the substance of its relevant terms.  This is more difficult, for it requires a careful analysis of the instrument, comprehensiveness in statement, and avoidance of legal conclusions.’ [Citation.]”  (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489.) 

Defendant demurs to the First Cause of Action on the grounds that Plaintiff failed to state a cause of action, arguing that Defendant did not fail to conduct repairs because, as expressly stated in the Lease, all maintenance and repairs of the interior walls and ceiling are solely the duty of the tenant. (Dem. at p. 6.) Consequently, the Court will examine the sufficiency of the allegations pertaining to this element.

In the Complaint, Plaintiff alleges that “On August 3, 2022, law enforcement raided the Premises in pursuit of a suspect who had run through neighboring facilities and then hidden in the attic of the Premises.... [P]olice officers broke holes in the walls/ceiling of the Premises ... in order to gain access and release tear gas into the attic to flush out the suspect.” (Compl. PLD-C-001, ¶ 5.) “Defendant failed and refused to repair holes in the ceiling and wall, as required by Section 9.2 of the Lease.” (Compl. PLD-C-001(1), ¶ BC-2.)

The Lease is attached to the Complaint as Exhibit A, and Section 9.2 states in pertinent part, “Partial Damage – Insured Loss. If a Premises Partial Damage that is an Insured Loss occurs, then Lessor shall, at Lessor’s expenses, repair such damage ... as soon as reasonably possible ... however, that Lessee shall, at Lessor’s election, make the repair of any damage or destruction the total cost to repair of which is $10,000 or less, and, in such event, Lessor shall make any applicable insurance proceeds available to Lessee on a reasonable basis for that purpose.” (Compl. Ex. “A,” at pp. 8-9.)

Additionally, in the paragraphs leading to Section 9.2, the Lease states the following definition: (a) “ ‘Premises Partial Damages’ shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility installations, which can reasonably be repaired in 3 months or less from the date of the damage or destruction, and the coast thereof does not exceed a sum equal to 6 month’s Base Rent.... Notwithstanding the foregoing, Premises Partial Damage shall not include damage to windows, doors, and/or other similar items which Lessee has the responsibility to repair or replace pursuant to the provision of Paragraph 7.1.” (Compl. Ex. “A,” at p. 8.) (Underlines added.)

Paragraph 7.1 of the Lease states in pertinent part, “Lessee’s Obligations.... Lessee shall, at Lessee’s sole expense, keep the Premises, Utility Installations, ... and Alterations in good order, condition and repair (whether or not the portion of the Premises requiring repairs, or the means of repairing the same, are reasonably or readily accessible to Lessee, and whether or not the need for such repairs occurs as a result of Lessee’s use, any prior use, the elements of the age of such portion of the Premises), including, but not limited to, all equipment or facilities, such as plumbing, HVAC equipment, electrical, lighting facilities, boilers, pressure vessels, fixtures, interior walls, interior surfaces of exterior walls, ceilings, floors, windows, doors, plate glass, and skylights but excluding any items which are the responsibility of Lessor pursuant to Paragraph 7.2.” (Compl. Ex. “A,” at p. 6.)

1)      Defendant’s Responsibility of Repairing the Holes in the Ceiling

The Court notes that where a complaint is based on a written contract which it sets out in full, a 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. (Martinez v. Socoma Companies, Inc. (1974) 11 Cal.3d 394, 400.) The following principles govern the trial court’s review of the writing in ruling on demurrer: “ ‘Ordinarily, a written contract is sufficiently pleaded if it is set out in full or its terms alleged according to their legal effect.... But if the instrument is ambiguous, the pleader must allege the meaning he ascribes to it. [Citations.]’ [Citation.] Where a written contract is pleaded by attachment to and incorporation in a complaint, and where the complaint fails to allege that the terms of the contract have any special meaning, a court will construe the language of the contract on its face to determine whether, as a matter of law, the contract is reasonably subject to a construction sufficient to sustain a cause of action for breach.” (Hillsman v. Sutter Community Hospitals (1984) 153 Cal.App.3d 743, 749–750(Hillsman).)

Here, the Court construes the language of the Lease based on its plain language and finds that the responsibility to repair the holes in the interior ceiling falls on the lessee. This interpretation is based on the express terms of Paragraph 7.1, which states in pertinent part, “Lessee shall ... repair ... including, but not limited to, ... interior walls, interior surfaces of exterior walls, ceilings ...” Additionally, the Court finds the definitions in Paragraph 9.1 persuasive. Read with these definitions in mind, Paragraph 9.2, which Plaintiff relies on, does not itself impose a repair or restore obligation on the lessor for “damage to windows, doors, and/or other similar items which Lessee has the responsibility to repair or replace pursuant to the provision of Paragraph 7.1.”

In its Opposition, Plaintiff appears to argue that the holes, caused by an external force – namely, the police pursuit of a suspect – should be categorized as “Premises Partial Damage,” thereby invoking the lessor’s repair obligation under Paragraph 9.2. (Opp’n. at p. 6.) However, this interpretation is not supported by the plain language of the Lease. The burden lies with the “pleader [who] must allege the meaning it ascribes to the instrument” to show the ambiguity. (Hillsman, supra, 153 Cal.App.3d at p. 749.) Here, Plaintiff has failed to meet this burden, as there is no allegation or showing that Paragraph 9.2 has any special or alternative meaning that would shift the repair responsibility from the lessee under Paragraph 7.1 based on the circumstances under which the damages occurred.

By failing to assert or demonstrate any ambiguity, Plaintiff has not sufficiently stated a claim that Defendant has breached the contract under a term that is reasonably susceptible to an alternative interpretation. 

2)      Defendant Allegedly Prohibited Plaintiff from Making Any Repairs

When considering exhibits to the complaint, the Court only relies on the exhibit’s contents to the extent that they conflict with the complaint's factual allegations. In such cases, the Court gives precedence to the exhibits’ contents and treats as “surplusage” the complaint's conflicting factual allegations. (Foxen v. Carpenter (2016) 6 Cal.App.5th 284, 288.)

Here, Plaintiff alleges that Defendant has explicitly prohibited Plaintiff from making any repairs without first obtaining Defendant’s consent, which Defendant allegedly refused to give. (Opp’n. at p. 4.) Plaintiff refers to Exhibit D of the Complaint to support its claim, showing that when Plaintiff complained to Defendant about leaks during rainstorms, Defendant’s previous property manager stated, “[Plaintiff is] not allowed to fix anything without landlords [sic] Approval.,” and instructed “Do not do anything ...” (Compl. Ex. “D.”)

Plaintiff correctly asserts that the exhibit attached to the Complaint takes precedence over the allegation in the body of the Complaint in this instance. (Opp’n. at pp. 4-5.) However, as Defendant points out, the exchange referenced in Exhibit “D” pertains specifically to repairs to the roof, not the ceiling. This distinction is crucial, as Defendant concedes responsibility for exterior roof repairs, whereas the gravamen of the dispute only centers on the repair of the holes in the interior ceiling.

Accordingly, based on the precedence of the exhibit, the Court determines that Plaintiff’s allegations regarding Defendant’s prohibition of repair are surplusage with respect to the gravamen of the case, and do not provide an independent legal basis to overrule Defendant’s demurrer.

Accordingly, the Court SUSTAINS with LEAVE TO AMEND the Demurrer as to the First Cause of Action.

C.    Second Cause of Action – Breach of Covenant of Good Faith and Fair Dealing

The law implies a covenant of good faith and fair dealing in every contract. (Wilson v. 21st Century Ins. Co. (2007) 42 Cal.4th 713, 720.) The obligations imposed by the implied covenant are imposed by law to govern the manner in which the express contractual obligations must be discharged – i.e., fairly and in good faith. (Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566, 573; California Shoppers, Inc. v. Royal Globe Ins. Co. (1985) 175 Cal.App.3d 1, 54; Chateau Chamberay Homeowners Ass’n v. Associated Int’l Ins. Co. (2001) 90 Cal.App.4th 335, 346.) (Underlines added.)

Importantly, the implied covenant is limited to assuring compliance with the express terms of the contract, and cannot be extended to create obligations not contemplated in the contract. (Gibson v. Government Employees Ins. Co. (1984) 162 Cal.App.3d 441, 448.)

Here, as the Court has determined that there is no obligation on Defendant to repair the holes in the interior ceiling – either based on the plain language of the Lease or through any alternative meaning sufficiently asserted by Plaintiff – the implied covenant is not implicated here.

Accordingly, the Court SUSTAINS with LEAVE TO AMEND the Demurrer as to the Second Cause of Action.

D.    Third Cause of Action – Breach of Quiet Enjoyment – Private Nuisance

“‘In the absence of language to the contrary, every lease contains an implied covenant of quiet enjoyment, whereby the landlord impliedly covenants that the tenant shall have quiet enjoyment and possession of the premises. [Citations.] The covenant of quiet enjoyment “insulates the tenant against any act or omission on the part of the landlord, or anyone claiming under him, which interferes with a tenant’s right to use and enjoy the premises for the purposes contemplated by the tenancy. [Citations.]” [Citation.]’ (Andrews v. Mobile Aire Estates (2005) 125 Cal.App.4th 578, 588.)

To be actionable, the landlord's act or omission must substantially interfere with a tenant’s right to use and enjoy the premises for the purposes contemplated by the tenancy. (Petroleum Collections Inc. v. Swords, supra, 48 Cal.App.3d at p. 846, 122; see, e.g. Pierce v. Nash (1954) 126 Cal.App.2d 606, 614 [landlord breached tenants right to quiet enjoyment by installing interior building supports which unnecessarily interfered with tenants billiards business]; Sierad v. Lilly (1962) 204 Cal.App.2d 770, 775, 22 [landlord breached the covenant of quiet enjoyment by denying retail tenant use of adjoining parking spaces which were essential to tenants use and enjoyment of the property.])

As the Court has previously determined that Paragraph 7.1 of the Lease requires the repairs of the holes to be done by the lessee, Plaintiff’s Complaint lacks any allegations of any actionable act or omission by Defendant that substantially interfered with Plaintiff’s right to use and enjoy the Premises.

Consequently, the Court SUSTAINS with LEAVE TO AMEND the Demurrer as to the Third Cause of Action.

CONCLUSION

Defendant Morrison Studios Ltd., L.P.’s Demurrer to the Complaint is SUSTAINED.

Plaintiff is GRANTED LEAVE TO AMEND and is ordered to serve and file its First Amended Complaint within 30 days of this order.

Moving party to give notice.