Judge: Douglas W. Stern, Case: 22STCV08051, Date: 2023-02-06 Tentative Ruling
Case Number: 22STCV08051 Hearing Date: February 6, 2023 Dept: 68
Gavrieli Brands LLC v. Empire Container Freight Station, Inc., Case No. 22STCV08051
MOTION: Demurrer to First Amended Cross-Complaint with Motion to Strike
MOVING PARTY: Plaintiff/Cross-Defendant Gavrieli Brands LLC (Cross-Defendant)
RESPONDING PARTY: Defendant/Cross-Complainant Empire Container Freight Station, Inc. (Cross-Complainant)
I. BACKGROUND
It is generally a poor practice to entirely ignore a motion filed against a party. At a minimum, the failure to file anything deprives the Court of the benefits of the view of the party.
“By failing to oppose the motion in the trial court, Stewart has forfeited his arguments that the trial court's ruling on the motion was erroneous. “A failure to oppose a motion may be deemed a consent to the granting of the motion.” (Cal. Rules of Court, rule 8.54(c).)”. Stewart v. Extended Stay America (Cal. Ct. App., Sept. 18, 2017, No. B272333) 2017 WL 4118064, at *5.
This failure is compounded by the fact that Cross-Complainant avoided a hearing on the first demurrer by filing a First Amended Cross-Complaint one day prior to the hearing on the earlier demurrer. Thus, although Cross-Complainant has filed two cross-complaints, it has chosen to not provide the Court any information to support either filing.
A. Factual
Cross-Complainant’s First Amended Cross-Complaint (FACC) alleges three causes of action against Cross-Defendant for (1) Breach of Contract; (2) Open Book Account; and (3) Unfair Business Practices. Cross-Complainant filed this action in response to Cross-Defendant’s action against Cross-Complainant for fraud and theft of Cross-Defendant’s merchandise that was stored in Cross-Complainant’s warehouse.
B. Procedural
This original action was filed by Cross-Defendant on March 7, 2022. Cross-Complainant filed its Cross-Complaint on June 14, 2022. Cross-Defendant filed its demurrer as to Cross-Complainant’s Cross-Complaint on October 7, 2022. Cross-Complainant filed a FACC on December 7, 2022. Cross-Defendant demurred to the FACC on January 10, 2023. As of February 1, 2023, no opposition has been filed.
II. MOVING PARTY’S GROUNDS FOR THE DEMURRER
Pursuant to CCP § 430.10(e), Cross-Defendant demurs as to Cross-Complainant’s three causes of action on the basis that they fail to state facts sufficient to constitute a cause of action against Cross-Defendant, the pleading is uncertain, and it does not provide grounds to ascertain whether the alleged contract is written, oral, or implied by conduct.
III. ANALYSIS
A. The Demurrer
As a general matter, in a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleading alone, and not the evidence or facts alleged.” (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes the truth of the complaint’s properly pleaded or implied factual allegations. (Id.) The only issue a demurrer is concerned with is whether the complaint, as it stands, states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)
Where a demurrer is sustained, leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the plaintiff to show the court that a pleading can be amended successfully. (Id.; Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.) However, “[i]f there is any reasonable possibility that the plaintiff can state a good cause of action, it is error to sustain a demurrer without leave to amend.” (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 245).
1. Cause of Action for Breach of Contract
To properly state a breach of contract claim, a cross-complaint must allege: 1) the existence of a (valid) contract; 2) cross-complainant’s performance or excuse for nonperformance; 3) cross-defendant’s breach; and 4) damage to cross-complainant resulting from that breach. (Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 228 [citing Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1388].) “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.” (Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 993 [citing McKell v. Washington Mut., Inc. (2006) 142 Cal.App.4th 1457, 1489].) To plead a contract by its legal effect, the cross-complainant “must allege the substance of its relevant terms.” (Ibid.) “This is more difficult, for it requires a careful analysis of the instrument, comprehensiveness in statement, and avoidance of legal conclusions. (Ibid. [citing 4 Witkin, Cal. Procedure (4th ed. 1997) Pleading, § 480, p. 573].)
Cross-Complainant fails to plead the terms of the alleged contract with any specificity. Cross-Complainant does not include anything in its FACC as to the term, the basis for the termination, or the pricing. Cross-Complainant only includes a vague invoice with the FACC, and this invoice does not mention a contract with Gavrieli, or even mention Gavrieli at all.
Accordingly, Cross-Defendant’s demurrer as to the First Cause of Action for Breach of Contract is SUSTAINED with 20 days leave to amend.
2. Cause of Action for Open Book Account
A book account is a “detailed statement which constitutes the principal record of one or more transactions between a debtor and creditor arising out of a contract or some fiduciary relation, and shows the debits and credits in connection therewith, and against whom and in favor of whom entries are made, is entered in the regular course of business … and is kept in a reasonably permanent form ….” (Code of Civil Procedure, section 337(a).) A book account is “open” where a balance remains due on the account. (Interstate Group Administrators, Inc. v. Cravens, Dargan & Co. (1985) 174 Cal.App.3d 700, 708.)
A party alleging an open book account must demonstrate “the debits and credits” of the transactions between the parties. (Eloquence Corp. v. Home Consignment Ctr. (2020) 49 Cal.App.5th 655, 665 [accounts receivable statement, a billing history listing all of the invoices, a computer printout listing all of the invoices, and a computer printout listing two unpaid invoices are insufficient to constitute a book account when the documents were merely secondary or incidental records (of the supposed book account itself) and were not kept in the regular course of business].)
Cross-Complainant has not alleged the “debits and credits” between the parties. The invoice provided by Cross-Complainant is not sufficient to demonstrate this. Nor has Cross-Complainant adequately alleged that an open book account exists between the two parties. As such, Cross-Complainant has not plead sufficient facts to maintain a cause of action for an open book account against Cross-Defendant.
Cross-Defendant’s demurrer as to the Second Cause of Action for Open Book Account is sustained with 20 days leave to amend.
3. Cause of Action for Unfair Business Practice
Cross-Defendant demurs to Cross-Complainant’s cause of action for unfair business practice on the basis that it fails to state facts sufficient to constitute a cause of action under CCP § 430.10(e). Cross-Defendant also argues that this cause of action is uncertain.
To state a claim under the “unfair” prong of the UCL (California Business and Professions Code section 17200), a party has to show that the other party’s action “threatens an incipient violation of an antitrust law or violates the policy or spirit of one of those laws because its effects are comparable to or the same as a violation of the law, or otherwise significantly threatens or harms competition.” (Cel-Tech Commc'ns, Inc. v. Los Angeles Cellular Tel. Co. (1999) 20 Cal.4th 163, 187.)
The basic allegation to support this claim is that cross defendants refused to pay accumulated storage and other fees thereby gaining an unfair advantage in the marketplace. This allegation does not allege unfair competition.
Cross-Complainant has failed to allege any facts sufficient to show a cause of action for unfair business practice. Cross-Complainant’s FACC mentions that the alleged unfair business practice involved fraud (FACC, ¶ 26), but nowhere in the FACC does Cross Complainant detail what the fraud was. As such, Cross-Complainant cannot maintain a cause of action for unfair business practice.
Accordingly, Cross-Defendant’s demurrer as to Cross-Complainant’s Third Cause of Action for Unfair Business Practice is sustained. The Court will hear argument on the question of whether leave to amend should be granted for this claim, as it appears to the Court that there is no reason to believe that this commercial case involving claimed unpaid storage charges can support a claim under B&P Code § 17200.
B. Motion to Strike
Cross-Defendant requests that the Court use its discretion to strike Cross-Complainant’s entire FACC because the FACC was filed late on December 7, 2022, one day before the hearing on Cross-Defendant’s demurrer to Cross-Complainant’s original cross-complaint on December 8, 2022.
At the hearing on December 8, the Court took the original demurrer hearing off calendar because the FACC had been filed. In all likelihood, if the Court had heard the demurrer that day, the Court would have granted leave to amend. As such, for purposes of judicial economy it made more sense to take the matter off calendar and instead let the FACC stand as the operative pleading. The Court is not now going to strike the FACC and instead rule on the original cross-complaint.
Accordingly, Cross-Defendant’s motion to strike the FACC in its entirety is DENIED.