Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 205 

 

 

BACKGROUND 

This is a landlord-tenant dispute.  Plaintiff Yasam Legacy Inc. (“Landlord”) bought the multi-family building located at 3750 Jasmine Avenue, Los Angeles, California.  (Compl. ¶9.)  The building consists of 40 units and is governed by the City of Los Angeles Rent Stabilization Ordinance.  (Id.) 

Landlord entered into a “responsible person agreement” with Defendant Gayle Hooks.  (Id. ¶14.)  Under the agreement, Gayle’s only responsibility was to report nighttime emergencies and report any common area maintenance issues she observed.  (Id.)  The “responsible person agreement” prohibited Gayle from collecting rent.  (Id.)  Landlord claims Gayle breached the agreement by collecting rent, and worse still, she collected more rent than permitted by the Rent Stabilization Ordinance and kept it for herself.  (Id. ¶¶ 59-60.) 

Landlord entered into lease agreements with Defendants Kama Leonard, Christopher Hooks and Gayle Hooks.  (Id. ¶ 65.)  Landlord claims these defendants breached their respective lease agreements and the implied covenants therein by subleasing and/or assigning their units, keeping the difference, and causing the rents to exceed those rents permitted by the Rent Stabilization Ordinance.  (Id. ¶¶ 67, 74.) 

Landlord also claims fraud on the part of Defendants Gayle Hooks, Kama Leonard, Chaka Jamila Dodson and Christopher Hooks.  Defendants allegedly misrepresented that none of them were subleasing their units, that a tenant (Kiette Leonard) was alive and occupying Unit 204 when in fact the tenant had been dead for over 20 years, that Kama Leonard occupied Unit 201 (when in fact it was Chaka Jamila Dodson), that Gayle Hooks had a lease for Unit 202 when it was really Unit 205, and that Gayle Hooks was not collecting rent on Landlord’s behalf.  (Id. ¶ 80.) 

The operative complaint alleges claims for (1) breach of the responsible person agreement, (2) breach of the lease agreements, (3) breach of the implied covenant of good faith and fair dealing, (4) intentional misrepresentation, (5) conversion, and (6) violation of the Unfair Competition Law, Bus. & Prof. Code § 17200 (“UCL”).   

This hearing is on Defendants Gayle Hooks and Christopher Hooks’ (“Moving Defendants’”) demurrer to the Complaint.  Moving Defendants argue that (1) Landlord’s second cause of action for breach of the lease agreement against Christopher Hooks fails because none of the lease agreements attached to the Complaint contain Christopher’s signature, (2) Landlord’s third cause of action for breach of the implied covenant of good faith and fair dealing fails because the claim is completely covered by contract as to Gayle Hooks and as to Christopher, there is no contract, (3) Landlord’s fourth cause of action for intentional misrepresentation fails because the Complaint does not specify who made the misrepresentations, how they were made, when they were made, to whom they were made and by what means, and (4) Landlord’s fifth cause of action for conversion fails because the claim is clearly grounded in fraud but fails to allege fraud with specificity.   

LEGAL STANDARD 

“[A] demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.)  A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable.  (See Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994 (in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents).)  For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true, but the reviewing court does not assume the truth of conclusions of law. (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 967.)  

A demurrer to a complaint may be general or special.¿ A general demurrer challenges the legal sufficiency of the complaint on the ground it fails to state facts sufficient to constitute a cause of action. (Code Civ. Proc. § 430.10, subd. (e).)¿ A special demurrer challenges other defects in the complaint, including whether a pleading is uncertain. (Code Civ. Proc. § 430.10, subd. (f).)¿ The term “uncertain” means “ambiguous and unintelligible.”¿ (Id.)¿ A demurrer for uncertainty should be sustained if the complaint is drafted in such a manner that the defendant cannot reasonably respond, i.e., the defendant cannot determine what issues must be admitted or denied, or what counts are directed against the defendant.  (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616.)¿ 

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 (court shall not “sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment”); Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037 (“A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment.”).)  The burden is on the complainant to show the Court that a pleading can be amended successfully. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)  

MEET AND CONFER 

Code Civ. Proc. § 430.41 requires that before the filing of a demurrer the moving party “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. § 430.41(a).)  The parties are to meet and confer at least five days before the date the responsive pleading is due. (Code Civ. Proc. § 430.41(a)(2).)  Thereafter, the moving party shall file and serve a declaration detailing their meet and confer efforts. (Code Civ. Proc. § 430.41(a)(3).)  Moving Defendant submits the Declaration of Alex Spjute which shows the parties met and conferred by telephone. This satisfies the meet and confer requirements of § 430.41.   

DISCUSSION 

Breach of Lease 

Moving Defendants argue that Landlord fails to state a claim for breach of lease agreement against Christopher Hooks because it does not attach any lease agreement signed by Christopher.  The Court disagrees.   

Landlord has sufficiently alleged the existence of a lease agreement with Christopher.  (Compl. ¶ 65.)  While the agreement may not have been signed by Christopher, he manifested assent to the agreement by taking possession of his unit and paying the monthly rent. (Compl. ¶ 26.)      

Accordingly, the Court overrules the demurrer to the second cause of action.   

 

 

Implied Covenant of Good Faith and Fair Dealing 

Moving Defendants argue that Landlord fails to state a claim for breach of the implied covenant of good faith and fair dealing because as to Gayle, the claim is completely covered by the contract and as to Christopher, there is no valid contract.  The Court agrees in part. 

In every contract, there is an implied covenant of good faith and fair dealing by each party not to do anything which will deprive the other parties of the benefits of the contract, and a breach of this covenant by failure to deal fairly or in good faith gives rise to an action for damages.  (Sutherland v. Barclays American/Mortgage Corp. (1997) 53 Cal.App.4th 299, 314.)   

However, “[t]here can be no implied covenant where the subject is completely covered by the contract.”  (Third Story Music Inc. v. Waits (1995) 41 Cal.App.4th 798, 804 (noting this “long established” rule); see also City of Glendale v. Superior Court (1993) 18 Cal.App. 4th 1768, 1778 (1993) (stating the same and noting “[i]mplied covenants are not favored in the law because they interfere with the parties’ right to freely set such contractual terms as they choose”).)   

Here, the Complaint alleges Moving Defendants “breached the implied covenant of good faith and fair dealing by subleasing the units,” “assigning the units” and collecting rent above the Rent Stabilization Ordinance.  (Compl. ¶ 74.)  But because the lease agreements contain both anti-assignment and anti-sublease provisions, because the responsible person agreement contains the prohibition against collecting rent and because the Complaint already charges Moving Defendants on the same basis for breach of contract, Landlord’s breach of the implied covenant cause of action is already “completely covered by contract.”  As such, there can be no implied covenant allegedly breached by Moving Defendants.       

Accordingly, the Court sustains the demurrer to the third cause of action for breach of the implied covenant of good faith and fair dealing.   

Intentional Misrepresentation 

Moving Defendants argue that Landlord’s claim for intentional misrepresentation fails because Landlord has failed to allege the claim with the required specificity.  The Court agrees.   

The elements of a claim for intentional misrepresentation are (1) a misrepresentation, (2) knowledge of falsity, (3) intent to induce reliance, (4) actual and justifiable reliance, and (5) resulting damage.  (Lazar v. Superior Court (1996) 12 Cal.4th 631, 639.)  Each element of a fraud claim must be pleaded with specificity.  (Orcilla v. Big Sur, Inc. (2016) 244 Cal.App.4th 982, 1008.)  This specificity requirement means the “plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made.”  (Id.)    

Here, Landlord summarily lists a number of alleged misrepresentations made by Moving Defendants (Compl. ¶ 80), but fails to specify who made any of the misrepresentations, how they were made, when they were made, to whom they were made and by what means.  For example, the Complaints states Defendants misrepresented that “none of the Defendants were subleasing their units” but it does not specify who made this misrepresentation, to whom the misrepresentation was made, when the misrepresentation was made, how it was made or where it was made.  Plaintiff, therefore, fails to meet the specificity requirements for pleading fraud.   

Accordingly, the Court sustains the demurrer to Plaintiff’s fourth cause of action for intentional misrepresentation. 

Conversion 

Moving Defendants argue that Plaintiff’s claim for conversion fails because it is grounded in fraud and Plaintiff fails to allege the claim with the requisite specificity.    The Court agrees. 

Where the Plaintiff alleges a “unified course of fraudulent conduct and rel[ies] entirely on that course of conduct as the basis of a claim,” “the claim is said to be ‘grounded in fraud’” and the rules requiring fraud to be alleged with specificity apply.  (Vess v. Ciba-Geigy Corp. USA (9th Cir. 2003) 317 F.3d 1097, 1103-1104.)   

Here, Plaintiff’s conversion claim relies on the same “unified course of conduct “ as Plaintiff’s intentional misrepresentation claim and is grounded in fraud; therefore, it must be plead with specificity.  The conversion claim expressly incorporates the allegations from the intentional misrepresentation claim (Compl. ¶ 88), and moreover, explicitly states that “Defendants’ acts and/or omissions … is conduct that is fraudulent.”  (Compl. ¶ 92.)  Thus, Plaintiff’s conversion claim is clearly grounded in fraud and must be plead with particularity. 

Yet, the Complaint fails to provide any details that would establish the who, what, when, where and how of the alleged conversion.  Instead, Plaintiff makes a general allegation that “Defendants … have by the acts and omissions alleged herein, dispossessed Plaintiff of those rents and kept those rents to themselves”.  (Compl. ¶ 90.)  Such conclusory allegations are patently insufficient to support a claim that sounds in fraud. 

Accordingly, the Court sustains the demurrer to Plaintiff’s fifth cause of action for conversion.     

CONCLUSION 

Based on the foregoing, the Court SUSTAINS IN PART and OVERRULES IN PART Defendants Gayle Hooks and Christopher Hooks’ demurrer with 20 days’ leave to amend.   

 

IT IS SO ORDERED. 

 

DATED: January 30, 2024 ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court