Judge: Douglas W. Stern, Case: BC701546, Date: 2023-08-11 Tentative Ruling

Case Number: BC701546    Hearing Date: August 11, 2023    Dept: 68

Denise Brown, et al. vs. FAME Housing Corporation, et al., BC701546

Motion for Judgment on the Pleadings

Moving Parties: Defendants FAME Assistance Corporation, FAME Housing Corporation, FAME Good Shepherd Center, and Housing Development Corporation

Background

            The Defendant Corporations (Defendants) filed this motion for judgment on the pleadings because of a prior Settlement Agreement from 2014 that Plaintiff Denise Brown had entered into with Defendants concerning another matter. Defendants argue that the release clause in the 2014 Settlement Agreement that included future earnings and statutory damages would bar Plaintiffs’ current suit against Defendants. It is worth noting that Defendants’ motion is based entirely on Plaintiff Denise Brown and makes no mention of Plaintiffs Dean E. Brown or Solon Escobar.

            Plaintiffs argue that because their current complaint is based on the alleged November 2017 breach of Denise Brown’s Employment Agreement by virtue of the termination of her employment, then the 2014 Settlement Agreement with Denise Brown would not apply to the current case. Plaintiffs argue that because the breach of contract claim that Denise Brown is alleging would have accrued after the Settlement Agreement was signed, then it would not have been contemplated by the Settlement Agreement, and the Settlement Agreement would not apply to it. Plaintiffs also argue that it does not matter that the 2014 Settlement Agreement contained a waiver of CCP § 1542 because that section only applies to unknown, yet existing claims at the time of the waiver and would not apply to a claim that did not yet exist.

            In their reply, Defendants make a confusing argument regarding this Court’s granting of Plaintiffs’ Motion In Limine Number 5 as applied to certain set-off arguments that Defendants had made in relation to the prior settlement. Defendants also bring up arguments that were made in the Church complaints which led to the 2014 Settlement Agreement. It is not evident how these are relevant to the current proceeding.

Legal Standard

            A motion for judgment on the pleadings functions as a general demurrer, challenging whether a complaint alleges sufficient facts to state a cause of action. (See CCP § 438(c).) The rules governing demurrers therefore apply. (Orange Unified School Dist. v. Rancho Santiago Community College Dist. (1997) 54 Cal.App.4th 750, 764.) It is well settled that, in assessing a demurrer, a complaint must be liberally construed, drawing all reasonable inferences from the pleaded facts. (Wilner v. Sunset Life Ins. Co. (2000) 78 Cal.App.4th 952, 958.) Thus, the complaint must be given a reasonable interpretation, “reading it as a whole and its parts in their context.” (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38.) A motion for judgment on the pleadings may only challenge defects apparent on the face of the pleadings or by matters judicially noticed, drawing all reasonable inferences from the facts alleged. (See CCP § 438(d); Burnett v. Chimney Sweep (2004) 123 Cal.App.4th 1057.) This is consistent with the Court’s policy of adjudicating matters on the merits. (See Lopez v. Smith (9th Cir. 2000) 203 F.3d 1122, 1127 (leave to amend should be granted “when justice so requires” to “facilitate decision on the merits, rather than on the pleadings or technicalities”); Liberty Mutual Ins. Co. v. Workers’ Comp. Appeals Bd. (1980) 109 Cal.App.3d 148 (dismissals based on pleading technicalities are disfavored).) 

Analysis

            A cause of action for breach of contract “accrues at the time of the breach.” (Ram’s Gate Winery, LLC v. Roche (2015) 235 Cal.App.4th 1071, 1084; see Cochran v. Cochran (1997) 56 Cal.App.4th 1115, 1120 [“A cause of action for breach of contract accrues at the time of breach.”].)

A party could not release a claim for breach of contract that had not yet occurred. (See Villacres v. ABM Indus. Inc. (2010) 189 Cal.App.4th 562, 589 [“The rule for releases is that absent special vitiating circumstances, a general release bars claims based upon events occurring prior to the date of the release”].)

While the release signed by Denise Brown in 2014 mentions future earnings and statutory damages, that would likely have no affect on the current complaint. The current complaint is based on a breach of contract claim under Denise Brown’s employment agreement that accrued in November 2017 when her employment was terminated. Further, her termination does not appear to have been related to the prior case involving the Settlement Agreement, as she was told that she was being terminated due to a restructuring. (Comp., ¶ 18.)

Because the current action is unrelated to the circumstances surrounding the 2014 Settlement Agreement, the Court denies Defendants’ motion for judgment on the pleadings.

Order