Judge: David Sotelo, Case: 21STCV34247, Date: 2022-08-18 Tentative Ruling
Case Number: 21STCV34247 Hearing Date: August 18, 2022 Dept: 40
MOVING PARTY: Plaintiff/Cross-Defendant
FBA International USA, Inc.
Plaintiff/Cross-Defendant FBA International USA, Inc.
(“FBA”) and Defendant/Cross-Complainant
Supra National Express, Inc. (“Supra”) bring cross actions against one another
based on a shipping and carrier agreement(s) to transport cargo from ocean port
to a separate destination.
Today FBA brings (1) an unopposed Demurrer to the twelve
(12) affirmative defenses raised by Supra in its Answer to FBA’s First Amended
Complaint, (2) an unopposed Demurrer to Supra’s Cross-Complaint’s Five causes
of action, and (3) an unopposed Motion to Strike attorney’s fees allegations
and prayers from the Supra Cross-Complaint.
The Court (1) SUSTAINS, With Leave to Amend, FBA’s Demurrer
to the Supra Answer for insufficient pleading, (2) SUSTAINS, With Leave to
Amend, FBA’s Demurrer to the Supra Cross-Complaint’s Five causes of action for
insufficient and duplicative pleading, and (3) GRANTS, With Leave to Amend,
FBA’s Strike because the attorney’s fees allegations and prayers therein are
irrelevant and improper where the Cross-Complaint fails to plead a proper basis
for contractual attorney’s fees.
Plaintiff/Cross-Defendant FBA is a company specializing in the
global delivery of homewares and household storage products to its wholesale customers.
Defendant/Cross-Complainant Supra National Express, Inc. (“Supra”)
is a Los-Angeles-based trucking, distribution, and logistics provider, offering
services such as drayage, bulk storage, cross-docking, and warehousing.
On January 26, 2021, FBA retained Supra to provide drayage services
for FBA, i.e., transport of freight from an ocean port to a destination or general
transport of goods over short distances.
Beginning in or around April 2021, FBA discovered errors in Supra’s
invoices. Specifically, FBA observed incorrectly applied congestion fees, incorrectly
billed invoices, and multiple reports of containers that were not picked up for
delivery or return by Supra. FBA repeatedly reported these errors to Supra, but
Supra ignored the correspondence.
On April 22, 2021, FBA began to incur detention fees from a shipping
line when Supra failed to pick up and return four empty containers. FBA advised
Supra that, not only were four containers incurring fees, but an additional five
containers needed to be picked up and returned the same day, and two shipments from
the port were awaiting delivery to a La Mirada, CA location.
Further, fifteen more empty containers that Supra had failed
to pick up from FBA’s La Mirada and Riverside, CA locations had to be placed on
public streets to accommodate other incoming shipments and deliveries. The fifteen
containers incurred parking ticket fees and caused additional congestion. FBA emphasized
to Supra that delayed shipments result in extreme congestion at its facilities
and that it was critical that all shipments were promptly delivered to and picked
up from FBA’s facilities.
In addition to its failure to pick up empty containers, Supra
made errors in delivery. FBA’s operations were disrupted when Supra delivered a
container that blocked FBA’s only outbound dock at its Riverside location for a
considerable time, causing a traffic pileup of six outbound trucks, and forcing
FBA to incur additional expenses and delayed delivery to its other customers.
On April 26, 2021, Supra notified FBA that it had placed a hold
on FBA’s account for an outstanding balance. FBA reminded Supra that charges on
the past due invoices were disputed, and Supra had never responded to the disputes.
FBA further noted that several empty containers remained waiting for pick up.
On or about April 27, 2021, Supra took possession of seven containers
to be delivered to FBA. Supra demanded that FBA make payment in full before it would
deliver the containers. On May 5, 2021, FBA affirmed its intent to pay its open
balance, confirmed the amount Supra claimed was due and owing, and requested that
Supra confirm delivery of the withheld containers after payment. Supra refused to
confirm and not only demanded payment in full once more but demanded payment for
invoices that had not yet been created by Supra.
On May 6, 2021, FBA paid the full amount that Supra claimed as
the open balance on the account. However, at or about the time the alleged balance
due was paid off, Supra sent additional invoices of more than $6,400, which it said
accounted for older shipments it had neglected to bill. Although FBA disputed some
of the charges, it paid the invoices.
Meanwhile, FBA began incurring detention fees of more than $1,000
a day on the seven containers held by Supra. In addition, FBA missed delivery deadlines
to its customers, suffering both economic and reputational harm. Supra subsequently
demanded an additional payment of more than $23,000, which it said represented yet
another past due balance. It later became clear that the balance included the payment
of approximately $6,400 FBA had already remitted. Supra initially failed to acknowledge
or account for the payment.
After finally acknowledging its error about the $6,400 payment,
Supra continued to demand $16,593.50 to cover fees it allegedly anticipated incurring
in the future from various shipping lines. Supra refused to provide documentation
of the fees or even to explain how it had arrived at the demanded figure.
FBA refused to capitulate to Supra’s demand without written confirmation
that the seven containers would be delivered immediately upon payment. Supra’s counsel
agreed in principle. However, when FBA presented a draft memorandum setting forth
the agreement, Supra further demanded a full release of claims—without consideration—before
it would agree to deliver FBA’s freight. Considering Supra’s billing errors and
what it viewed as bad faith tactics from Supra, FBA refused to release its claims.
Supra refused to sign the agreement as drafted.
On May 27, 2021—a month after it took possession of FBA’s containers—Supra’s
counsel finally affirmed by email that, upon confirmation of the wire transfer of
$16,593.50, Supra would “immediately deliver all seven (7) containers to FBA tomorrow
with no further demands or delay.”
On May 28, 2021, FBA paid Supra $16,593.50, and immediately provided
proof of the transfer to Supra and its counsel.
Despite its promises, Supra refused to make an immediate delivery
of the freight it was holding. In fact, delivery of the containers did not begin
until June 2—five days later—and was not completed until June 3. Supra thereafter
failed to pick up the containers and return them within 24 hours, as agreed by the
parties. The last container was not returned to the port until June 8—42 days after
Supra took custody of it.
Based on these facts, on September 16, 2021, FBA filed the original
Complaint in this action, alleging (1) Breach of Implied-in-Fact Contract, (2) Conversion,
(3) Negligence, (4) Intentional Interference with Economic Relations, and (5) Negligent
Interference with Economic Relations. The Complaint was served on Supra’s registered
agent for service of process on September 17, 2021, but Supra failed to answer or
other move against the Complaint, prompting FBA to move for entry of default, which
the Clerk of Court entered on October 28, 2021.
On November 30, 2021, FBA filed a First Amended Complaint (“FAC”)
alleging the same five causes of action stated in the Complaint but in different
order—(1) Negligence, (2) Intentional Interference with Economic Relations, (3)
Negligent Interference with Economic Relations, (4) Conversion, and (5) Breach of
Implied-in-Fact Contract—with minimally modified factual support and specific dollar
amounts alleged for damages in each cause of action. Service was effected by substituted
service on Supra on December 7, 2021.
On January 18, 2022, Supra
filed an Answer is response to the FBA First Amended Complaint and asserting a
general denial and twelve affirmative defenses. On the same day, Supra filed a Cross-Complaint
alleging five causes of action against FBA, as based on an outstanding debt from
FBA to Supra in the amount of $28,276.25 for services rendered: (1) Breach of Written
Shipping Agreements; (2) Open Book Account; (3) Account Stated; (4) Reasonable Value
of Services Rendered; and (5) Breach of Carrier Agreement.
On February 10, 2022, the Parties filed with the Court a Stipulation
regarding Amendment of Pleadings in Lieu of Demurrer, wherein they agreed that Supra
would file any Amended Answer or Amended Cross-Complaint before February 18, 2022,
and if Supra failed to file amendments, FBA would be allotted ten (10) days from
February 18, 2022 to demur to the original Supra Answer and thirty (30) days from
February 18, 2022 to demur to the original Cross-Complaint.
No Amended Answer or Cross-Complaint was filed by Supra before
February 18, 2022 or since.
On February 23, 2022, FBA filed a Demurrer to Supra’s Answer
to FBA’s First Amended Complaint on the grounds that the Answer’s twelve (12) affirmative
defenses are insufficiently pleaded and fail to set forth the causes of action they
answer, in contravention of Code of Civil Procedure sections 430.10, subdivision
(e) and 431.30 (g).
On March 8, 2022, FBA filed (1) a Demurrer to Supra’s Cross-Complaint’s
five causes of action on the grounds that the claims are unclear as to the type
of contract pleaded, insufficiently pleaded, and/or duplicative of a prior cause
of action, and (2) a Motion to Strike attorney’s fees allegations and prayers from
the Cross-Complaint.
As of this hearing, Supra has failed to file an Opposition or
in any way respond to either the Demurrers or the Motion to Strike.
First through Twelfth Affirmative Defenses: SUSTAINED,
With Leave.
Code Civ. Proc.,
§¿430.20 (a) – Sufficiency of Answer’s Pleadings
Legal Standard: A general demurrer to an answer can be
based on the ground that the answer does not state facts sufficient to constitute
a defense. (Code Civ. Proc., § 430.20, subd. (a); Timberidge Enters. v. City
of Santa Rosa (1978) 86 Cal.App.3d 873, 880; see e.g., Richard B. Levine
v. Higashi (2005) 131 Cal.App.4th 566, 573 n. 4 [answer that pled statute of
limitations as defense but did not comply with pleading requirement in Code of Civil
Procedure section 458 was subject to demurrer]; Universal Land Co. v. All Persons
(1959) 172 Cal.App.2d 739, 741-43 [demurrer to answer appropriate where defense
is barred by statute of limitations or laches].)
The general demurrer to an answer admits all facts well pleaded
in the answer, including denials. (Warren v. Harootunian (1961) 189 Cal.App.2d
546, 548.) The critical inquiry when a plaintiff demurs to an answer is whether
the answer raises a defense to plaintiff’s stated cause of action. (Timberidge
Enterprises, Inc. v. City of Santa Rosa (1978) 86 Cal.App.3d 873, 879-80.)
The same pleading of “ultimate facts” rather than evidentiary matter or legal
conclusions is required as in pleading the complaint, i.e., the answer must
aver facts as carefully and with as much detail as the facts that constitute
the cause of action and that are alleged in the complaint. (FPI Development,
Inc. v. Nakashimi (1991) 231 Cal.App.3d 367, 382, 384.)
Code of Civil Procedure section 431.30, subdivision (g) also
provides that the various affirmative defenses must be separately stated and
must refer to the causes of action to which they relate “in a manner by which
they may be intelligently distinguished.” (Code Civ. Proc., § 431.30, subd.
(g).)
Analysis: FBA demurs to Supra’s Answer’s twelve (12)
affirmative defenses where the Answer consists of a general denial and the
twelve (12) challenged defenses. (Demurrer to Answer, 7:20-11:18; see Supra Answer
generally.) More specifically, FBA demurs to Supra’s affirmative defenses on
the grounds that they are insufficiently pleaded and do not specify the cause
of action to which they are directed. (Demurrer to Answer, 7:20-11:18.) The
Court agrees.
First, the allegations in the Answer’s Affirmative Defenses’
do not clearly indicate to which cause of action they are directed. (See
Answer, 1-4; see also Code Civ. Proc., § 431.30, subd. (g).)
Further, the twelve affirmative defenses provide only
factual and legal conclusions without substantive factual support to buttress
them. (See Answer, 1-4.) For example: the Fourth and Ninth Affirmative Defenses
respectively plead superseding acts broke the chain of causation and that
negligence of other parties caused FBA’s damages without specifying the
relevant who, what, when, and how of the alleged third parties that caused
FBA’s injuries (Answer, 2:12-16, 3:17-21); the Sixth Affirmative Defense pleads
that FBA failed to exercise reasonable care in avoiding loss and damages
without describing how this lack of reasonable care occurred (Answer,
2:24-3:2); and the Seventh Affirmative Defense claims protections stated under
any and all provisions contained in the parties’ past agreements and receipts
without clarifying what these protections are or alleging sufficient facts to
flesh out their nature (Answer, 3:4-10). Simply, the answer must aver facts as
carefully and with as much detail as the facts that constitute the cause of
action and that are alleged in the operative complaint (FPI Development,
Inc., supra, 231 Cal.App.3d at p. 384), and here, Supra’s defenses
have failed to meet this standard.
First Cause of Action, Breach of Written Shipping
Agreements: SUSTAINED, With Leave.
Code Civ. Proc.,
§¿430.10 (g) – Type of Contract Unascertainable
Legal Standard: In a contract action, a defendant can
file a special demurrer to a complaint on the ground that it cannot be
determined from the pleadings whether the contract is written, oral, or implied
by conduct. (Code Civ. Proc., §¿430.10, subd. (g); see Holcomb v. Wells
Fargo Bank (2007) 155 Cal.App.4th 490, 500-01.)
Analysis: FBA demurs to the Cross-Complaint’s five
causes of action on the grounds that they all equally do not properly plead the
type of contract at issue, i.e., written, oral, or implied-in-fact. (Demurrer
to Cross-Complaint, 5:25-6:25.) However, the first cause of action sufficiently
names itself a “Breach of Written Shipping Agreements” claim to put FBA on
notice as the type of agreement at issue, i.e., a written agreement, pursuant
to which Supra provided freight, warehousing, and associated services to FBA,
and pursuant to which Supra invoiced its services, $28,276.25 of which remains
unpaid. (Cross-Complaint, ¶¶ 1-2, 3-9; see also Demurrer to Cross-Complaint,
6:22-25.) The fact that this cause of action pleads one of various alternative
causes of action for the same wrong does not in any way undercut the fact that
the cause of action clearly identifies itself as being based on a written
agreement between the parties.
To the extent that FBA challenges paragraph 9 of the
Cross-Complaint on uncertainty grounds (Demurrer to Cross-Complaint, 6:15-16, 6
n. 1; see Code Civ. Proc., §¿430.10, subd. (f)), the Court notes that a party
cannot demur to a portion of a cause of action. (Kong v. City of Hawaiian
Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1047 [“A demurrer
cannot rightfully be sustained to part of a cause of action or to a particular
type of damage or remedy.”].)
Thus, this ground for demur against the Cross-Complaint’s
first cause of action fails.
Code Civ. Proc.,
§¿430.10 (e) – Sufficiency
Legal Standard: A demurrer for sufficiency tests
whether the complaint states a cause of action. (Hahn v. Mirda (2007)
147 Cal.App.4th 740, 747; see Code Civ. Proc., § 430.10, subd. (e).) “To
survive a [general] demurrer, the complaint need only allege facts sufficient
to state a cause of action; each evidentiary fact that might eventually form
part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart
Union High School Dist. (2012) 53 Cal.4th 861, 872.) In testing the
sufficiency of the cause of action, the demurrer admits the truth of all
material facts properly pleaded. (Aubry v. Tri-City Hospital Dist.
(1992) 2 Cal.4th 962, 966-67.) A demurrer, however, “does not admit
contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab
Co. (1967) 67 Cal.2d 695, 713.)
Analysis: FBA also demurs to all the Cross-Complaint’s
causes of action on the grounds that the claims all fail to plead the terms or
effect of the contracts at issue. (Demurrer to Cross-Complaint, 7:12-24.) For
this discussion, the Court agrees insofar as this argument is directed toward
the first cause of action.
“A contract is a voluntary and
lawful agreement, by competent parties, for a good consideration, to do or not
to do a specified thing.” (Robinson v. Magee (1858) 9 Cal. 81, 83.) “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. [Citation.] 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.]” (Heritage Pacific Financial, LLC v. Monroy
(2013) 215 Cal.App.4th 972, 993 [affirming general demur for sufficiency
because pleading did not set forth with specificity that any assignment of tort
claims existed, for which reason trial court properly instructed party to
attach written agreement to pleading] (“Monroy”).)
The Cross-Complaint’s facts and its first cause of action do
not state the terms of the contract(s) between the parties verbatim nor does
the Cross-Complaint attach any contract(s) between Supra and FBA. (See
Cross-Complaint, ¶¶ 1-2, 3-9.)
As a result, the Cross-Complaint must plead the legal effect
of its contract(s) with FBA. (Monroy, supra,
215 Cal.App.4th at p. 993.) Supra fails to do so.
At paragraph 6 of the Cross-Complaint, Supra pleads
allegations that appear to go toward the second element of breach of
contract—performance or excuse of plaintiff’s or cross-complainant’s
contractual duties—but these allegations fail to plead or imply that Supra
satisfied Supra’s duties under the Supra-FBA written agreement. While the Court
recognizes that his paragraph pleads that Supra “transported and delivered …
cargo as requested by [FBA],” the Cross-Complaint also pleads that Supra
“performed each act required” by the contract between the parties. (Cross-Complaint,
¶ 6.) Such allegations leave room for the Court to conclude that Supra had
additional duties under its written agreement(s) with FBA, and without more
detail as to contractual terms, the Court cannot be satisfied that Supra has
pleaded that it has fulfilled its obligations under one or more written
agreements with FBA.
The Court advises Supra to provide a copy of any written
agreement(s) between the parties as to properly incorporate and support this
cause of action.
Second to Fourth Causes of Action [Open Book Account, Account
Stated, Reasonable Value of Services Rendered]: SUSTAINED, With Leave.
Code Civ. Proc.,
§¿430.10 (e) – Sufficiency
Analysis: FBA demurs to the Cross-Complaint’s common
counts claims— Open Book Account, Account Stated, Reasonable Value of Services
Rendered—on the grounds that these claims must fail where the First and Fifth
causes of action failed. (Demurrer to Cross-Complaint, 7:25-8:9) The Court
agrees.
The essential elements of any common count are: (1) that
defendant is indebted to plaintiff in a certain sum; (2) for some consideration
from plaintiff (i.e., goods sold, work done, money paid); and (3) defendant’s
nonpayment. (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445,
460.) Generally, a complaint that pleads a common count is not subject to
demurrer for not alleging sufficient facts to state a cause of action. (Ibid.)
This general rule does not apply, however, where the common count claim is
based on the same facts asserted in a specific cause of action and the specific
cause of action is defective. (Draper v. Patterson (1958) 156 Cal.App.2d
606, 609.) In that situation, the specific count and the common count are both
subject to demurrer. (Ibid. [“When common counts are based on the same
cause as the specific count, and the specific count is defective, the entire
complaint is demurrable”].)
Here, the damages sought—$28,275.25 for services rendered by
Supra to FBA under various agreements—and the facts underlying the
Cross-Complaint’s first cause of action for breach of contract and the
Cross-Complaint’s second to fourth common counts claims are identical. (Compare
Cross-Complaint, ¶¶ 6-7 [Breach of Written Shipping Agreements] with ¶¶ 11-12 [Open
Book], ¶¶ 15-16 [Account Stated], ¶¶ 18-21 [Services Rendered].)
As a result, because the Breach of Written Shipping
Agreements cause of action was subject to demur (see discussion supra), and because
the fifth cause of action for Breach of Carrier agreement fails (see discussion
infra), the Cross-Complaint’s second through fourth causes of action (all
common counts claims) are also subject to demur. (Draper, supra,
156 Cal.App.2d at p. 609.)
Fifth Cause of Action, Breach of Carrier Agreement: SUSTAINED,
With Leave.
Code Civ. Proc.,
§¿430.10 (e) – Sufficiency
Analysis: A general demurrer for sufficiency may be
sustained against duplicative claims. (Palm Springs Villas II Homeowners
Assn., Inc. v. Parth (2016) 248 Cal.App.4th 268, 290 [duplicative nature of
“a cause of action for breach of governing documents [that] appear[ed] to be
duplicative of [a] cause of action for breach of fiduciary duty” is “recognized
… as a basis for sustaining a demurrer”] (“Parth”); see also Award
Metals, Inc. v. Superior Ct. (1991) 228 Cal.App.3d 1128, 1135, modified
Apr. 10, 1991 [demurrer should have been sustained as to duplicative causes of
action].)
Here, a comparison between the Cross-Complaint’s First and Fifth
causes of action show that they are both premised upon agreements entered by
Supra and FBA through which Supra would provide carrier services to FBA and
which resulted in $28,276.25 owing to Supra by FBA. (Compare, Compare
Cross-Complaint, ¶¶ 3-9 [Breach of Written Shipping Agreements], with Cross-Complaint,
¶¶ 22-25 [Breach of Carrier Agreement]; see also Demurrer to Cross-Complaint,
5:25-7:24 [FBA’s arguments on demur made equally to first and fifth causes of
action without meaningful distinction].)
The fifth cause of action does not go into greater factual
detail as to the parties’ agreement; instead, this claim fails to include the
terms of the agreement(s) between the Supra and FBA in the same way as the
Cross-Complaint’s first cause of action. The Breach of Carrier Agreement claim
is therefore duplicative of the Cross-Complaint’s Breach of Written Shipping
Agreements claim and subject to general demurrer. (Parth, supra,
248 Cal.App.4th at p. 290.) Further, because the First and Fifth causes of
action pleaded in the Cross-Complaint are identical in damages and lack of
specificity, the Court adopts its analysis as to the former claim in sustaining
FBA’s demur to the latter (fifth) cause of action. (See discussion supra.)
Legal Standard: Any party, within the time allowed to
respond to a pleading may serve and file a notice of motion to strike the whole
or any part thereof. (Code of Civ. Proc. § 435, subd. (b)(1); Cal. Rules of
Court, rule 3.1322, subd. (b).) The court may, upon a motion or at any time in
its discretion and upon terms it deems proper: (1) strike out any irrelevant,
false, or improper matter inserted in any pleading; or (2) strike out all or
any part of any pleading not drawn or filed in conformity with the laws of
California, a court rule, or an order of the court. (Code Civ. Proc. § 436,
subd. (a)-(b); Stafford v. Shultz¿(1954) 42 Cal.2d 767, 782.)
Attorney’s Fees: FBA moves to strike allegations and
prayers for attorney’s fees contained in the Supra Cross-Complaint on the
grounds that the Complaint does not allege any contractual terms entitling
Supra to attorney’s fees, making such allegations and prayers irrelevant and
improper. (Strike Mot., 3:27-4:21.) The Court agrees and GRANTS the Motion to
Strike on these grounds.
Plaintiff/Cross-Defendant FBA International USA, Inc.’s unopposed
Demurer to Defendant’s Answer is SUSTAINED because none of the Answer’s twelve
(12) affirmative defenses are sufficiently pleaded within the meaning of Code
of Civil Procedure section 430.20, subdivision (a).
Plaintiff/Cross-Defendant FBA International USA, Inc.’s unopposed
Demurer to Defendant’s Cross-Complaint is:
(1) SUSTAINED as to the Breach of Written Shipping
Agreements claims because this claim is not sufficiently pled within the
meaning of Code of Civil Procedure section 430.10, subdivision (e);
(2) SUSTAINED as to the Open Book Account, Account Stated,
Reasonable Value of Services Rendered claims because these claims (all common
counts claims) are based on the same factual grounds as the Breach of Written
Shipping Agreements cause of action and thus fail under established case law; and
(3) SUSTAINED as to the Breach of Carrier Agreement claim
because this cause of action is duplicative of the Breach of Written Shipping
Agreements claim and is similarly insufficiently pleaded.
Plaintiff/Cross-Defendant FBA International USA, Inc.’s unopposed
Motion to Strike Provisions [i.e., Attorney’s Fees] of Defendant’s
Cross-Complaint is GRANTED because the Cross-Complaint fails to allege
contractual terms supporting an attorney’s fees award, making allegations and
prayers to this effect irrelevant and improper.
Plaintiff/Cross-Defendant FBA International USA, Inc.’s
unopposed Motion to Compel Discovery Responses is GRANTED, along with statutory
costs/sanctions against Supra and counsel for Supra in the amount of $6,810.00.
Amendment pleadings and sanctions due and to be paid with 30
days.