Judge: Deborah C. Servino, Case: 30-2021-01211605, Date: 2022-11-18 Tentative Ruling

Defendants Constantin Lupu and Best Homes Remodeling & Repair, Inc.’s  general demurrer to the breach of contract cause of action in the First Amended Complaint (“FAC”) is overruled.

The elements for breach of contract are “(1) the existence of the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)

Defendants assert that the breach of contract cause of action is insufficient because it fails to allege that conditions precedent in the contracts were satisfied, i.e., completion of the project and payment of all costs.  “Where contractual liability depends upon the satisfaction or performance of one or more conditions precedent, the allegation of such satisfaction or performance is an essential part of the cause of action. [Citation.] This requirement can be satisfied by allegations in general terms.” (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1329.) However, “where the condition is an event . . . a specific allegation of the happening of the condition is a necessary part of pleading the defendant's breach. [Citations.]” (Ibid.)

Here, the FAC alleges: that the parties entered into contracts in which Defendants were loaned monies to purchase, rehab, and sell houses; the parties were to split the profits 50/50 after the loans and costs were paid; and Defendants purchased and sold three properties and paid Plaintiff $80K, identified as the profits, but has not repaid the $800K loan. Defendants argue that the FAC did not allege the completion of any project and payment of all costs. Although not expressly alleged, the satisfaction of those conditions precedent are reasonably inferred from the allegations that the three properties were sold and that Defendants paid Plaintiff $80,000 in profits. (Robertson v. Saadat (2020) 48 Cal.App.5th 630, 639 [on demurrer, courts adopt a liberal construction of the pleading and draw all reasonable inferences in favor of the asserted claims].)

Defendants also assert that the breach of contract cause of action fails to allege liability against Defendant Lupu because it appears from the contracts that Best Homes was the party to the contracts and no alter ego allegations were made. The FAC attached copies of two of the three alleged contracts, the January and May 2018 contracts (FAC, Exh. A). The first line in the January 2018 contract states: “The D & K Trapp Family Trust, here in referred to as The Trust, loans to Constantine ‘Steve’ Lupu Best Homes Remolding [sic], here in [sic] referred to as Lupu BHR, the sum of $400,000.00.” The first line of the May 2018 contract is substantially the same. Under the signature line of each contract, is “Best Home Remodeling” and underneath that is “Constantine Lupu.” There is one signature. The FAC alleges that the contracts were entered into with Defendants. The two attached contracts, while ambiguous as to whether there are one or two parties borrowing from Plaintiff, do not necessarily conflict with that allegation, nor definitively show that Defendant Best Home was the only contracting party. The demurrer is overruled.

Within 15 days, Defendants shall file their answer to the FAC.  Defendants shall serve their answer pursuant to the Code of Civil Procedure.

The Court notes that on August 10, 2022, the Court granted defense counsel’s motion to be relieved as counsel for Best Homes Remodeling & Repair, Inc., effective upon the filing of the proof of service of the signed order upon the client.  On August 23, 2022, defense counsel filed proof of service of the order granting the motion to be relieved as counsel.  It does not appear that since that time Best Homes Remodeling & Repair, Inc. has obtained counsel.  It must seek legal representation and have counsel file substitution of counsel forms. Failure to retain an attorney may lead to striking the pleadings, among other things.

Plaintiff to give notice of the ruling.

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