Judge: Elaine Lu, Case: 22STCV08500, Date: 2023-04-13 Tentative Ruling
Case Number: 22STCV08500 Hearing Date: April 13, 2023 Dept: 26
|
astred
rodriguez, Plaintiff, v. 3.0
Outdoor llc, a California
limited liability company; 3.0 OUTDOOR, LLC, a New Jersey limited liability
company; CAMBER RANSOM; SAMANTHA RANSOM,
et al., Defendants. |
Case No.: 22STCV08500 Hearing Date: April 13, 2023 [TENTATIVE]
order RE: Defendants’ demurrers to the first Amended complaint |
Procedural
Background
On March 9, 2022, Plaintiff Astred
Rodriguez (“Plaintiff”) filed the instant action for breach of oral joint
venture agreement against Defendants 3.0 Outdoor LLC (A California LLC) (“3.0
Outdoor – Cal.”) , 3.0 Outdoor, LLC (A New Jersey LLC) (“3.0 Outdoor – NJ”),
Camber Ransom, and Samantha Ransom (collectively “Defendants”).
On October 24, 2022, Plaintiff filed the
operative First Amended Complaint (“FAC”) against Defendants. The FAC asserts six causes of action for (1)
Breach of Oral Joint Venture Agreement, (2) Declaratory Relief, (3) Intentional
Misrepresentation, (4) Common Counts, (5) Breach of 3d and La Jolla Joint Venture,[1]
and (6) Breach of Hyperion Joint Venture Agreement.
On December 16, 2022, Defendants each
filed identical demurrers to the FAC. On
December 21, 2022, the Court consolidated the hearings for the instant
demurrers and motions to strike and advanced the hearing to April 13,
2023. (Minute Order 12/21/22.) On April 3, 2023, Plaintiff filed a
consolidated opposition. On April 5,
2023, Defendants filed a reply.
Allegations
of the Operative Complaint
The FAC alleges in relevant part
that:
In 2019, Defendant Camber Ransom on
behalf of 3.0 Outdoor – NJ entered into an oral joint venture to identify and
develop signage locations in the City of West Hollywood. (FAC ¶ 14.)
“Under the terms of the West Hollywood Joint Venture Agreement, 3.0
Outdoor - NJ and Plaintiff Rodriguez agreed to share equally all out-of-pocket
costs incurred in applying for and obtaining permits for the three locations
subject to the West Hollywood Joint Venture Agreement, and Plaintiff Rodriguez
agreed to provide such services as necessary to apply for and attempt to secure
permits for these locations. In return, 3.0 Outdoor -NJ and Plaintiff Rodriguez
agreed that any signs permitted and developed under the West Hollywood Joint
Venture Agreement would be owned 50-50 by [Plaintiff] and 3.0 Outdoor - NJ and
the profits distributed equally between the parties.” (FAC ¶ 15.)
From 2019 through February 2022, to
induce Plaintiff to assist in applying for the permits and sharing in the out
of pocket costs to obtain these permits, 3.0 Outdoor – NJ through Camber Ransom
represented that that, if Plaintiff Rodriguez provided services in applying for
and securing sign permits for these locations and shared equally in these out
of pocket costs, that Plaintiff would be a 50% owner in the signs and share
equally in the profits. (FAC ¶ 31.) However, these representations were false as
Defendants had no intention of recognizing Plaintiff as a 50% partner in these
locations. (FAC ¶¶ 33-35.)
On February 20, 2020, Defendant 3.0
Outdoor – NJ formed 3.0 Outdoor – Cal. “for the purpose of applying for the
permits for the three locations covered by the West Hollywood Joint Venture
Agreement. Plaintiff is informed and believes and thereon alleges that, after
its formation, 3.0 Outdoor - Cal, by and through Defendant Samantha Ransom, joined
in the West Hollywood Joint Venture Agreement, approved and ratified the terms
of the joint venture agreement agreed to by 3.0 Outdoor - NJ and approved and
ratified the representations of Defendants 3.0 Outdoor - NJ and Camber Ransom
in connection therewith.” (FAC ¶ 16.) Plaintiff has performed under the agreement and
has spent substantial time over the last two years consisting of “approximately
700 hours spent in preparing the permit applications, attending in-person
meetings and conference calls with city planning officials concerning these
permits, coordinating with Yesco for the design of the signs, locating and
hiring a landscape architect required by the City, hiring drone operators to
photograph the locations and preparing and submitting the supporting
documentation required by the City to process these sign permit applications.” (FAC ¶ 17.)
Plaintiff has also paid in excess of $100,000 in out-of-pocket costs in
furtherance of the joint venture agreement.
(FAC ¶ 19.)
However, “in or about early March
2022, at a time when permits for two of the locations were on the verge of
being finalized and the application for the third sign was being re-submitted,
Defendant Camber Ransom, through an attorney representing her and 3.0 Outdoor,
repudiated and breached the West Hollywood Joint Venture Agreement, denied that
there was any partnership/joint venture relationship between the parties, and
characterized Plaintiff Rodriguez's efforts to secure permits from the City as
merely those of a ‘permit expediter,’ Thereafter, 3.0 Outdoor has excluded
Plaintiff from the permitting . ..... process and, on information and belief,
has hired Jerod Helt to resubmit the application at Sunset and Clark and
finalize the permits for the two other locations. (FAC ¶ 21.)
Plaintiff lost any profits that
would have been gained under the joint venture.
(FAC ¶ 22.) Nor has Plaintiff
been paid for the costs or time she has incurred for her services. (FAC ¶¶ 41-43.)
Legal Standard
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. (Blank v. Kirwan (1985)
39 Cal 3d 311, 318.) No other extrinsic evidence can be considered (i.e., no
“speaking demurrers”). (Ion Equipment Corp. v. Nelson (1980) 110
Cal.App.3d 868, 881.)
A
demurrer for sufficiency tests whether the complaint states a cause of action.
(Hahn v. Mirda (2007) 147 Cal. App.
4th 740, 747.) When considering
demurrers, courts “give the complaint a reasonable interpretation, and read it
in context.” (Schifando v. City of
Los Angeles (2003) 31 Cal.4th 1074, 1081.) 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 pleadings alone and not
the evidence or other extrinsic matters.
Therefore, it lies only where the defects appear on the face of the
pleading or are judicially noticed.” (SKF
Farms v. Superior Ct. (1984) 153 Cal. App. 3d 902, 905.) “The only issue involved in a demurrer
hearing is whether the complaint, as it stands, unconnected with extraneous
matters, states a cause of action.” (Hahn,
supra, 147 Cal.App.4th at 747.)
Meet and Confer
Requirement
Code
of Civil Procedure § 430.41, subdivision (a) requires that “[b]efore filing a
demurrer pursuant to this chapter, the demurring 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.” The parties
are to meet and confer at least five days before the date the responsive
pleading is due and if they are unable to meet the demurring party shall be
granted an automatic 30-day extension. (CCP § 430.41(a)(2).) The
demurring party must also file and serve a declaration detailing the meet and
confer efforts. (Id.¿at
(a)(3).)¿ If an amended pleading is filed, the parties must meet and confer
again before a demurrer may be filed to the amended pleading. (Id.¿at (a).)
Here, Defendants have fulfilled the meet
and confer requirements. (Brown Decl. ¶¶
3-12.)
Discussion
Defendants
demurrer to the first, second, third, and fourth causes of action of the FAC.
First Cause of Action: Breach of Oral Joint Venture
Defendants
contend that the first cause of action fails because (1) the oral joint venture
is barred by the statute of frauds and (2) Plaintiff fails to allege damages.
“The elements of a cause of action
for breach of contract are: ‘(1) the contract, (2) plaintiff's performance or
excuse for nonperformance, (3) defendant's breach, and (4) the resulting
damages to plaintiff.’” (Coles v.
Glaser (2016) 2 Cal.App.5th 384, 391 [internal citations omitted].)
Statute of Frauds
“A general
demurrer may be interposed when the complaint shows on its face that the
agreement sued on is within the statute of frauds and does not comply with its
requirements.” (Parker v. Solomon (1959)
171 Cal.App.2d 125, 136.) “The statute of frauds declares several types of agreements
‘invalid’ unless ‘they, or some note or memorandum thereof, are in writing and
subscribed by the party to be charged or by the party's agent.’ (§ 1624,
subd. (a).)” (Westside Estate Agency,
Inc. v. Randall (2016) 6 Cal.App.5th 317, 323.) “A court applying the statute of frauds is
accordingly presented with two questions: (1) does the statute apply to the
contract at issue?; and if so, (2) are the statute's requirements of a properly
subscribed writing met?” (Ibid.)
“An agreement that by
its terms is not to be performed within a year from the making thereof” is
subject to the statute of frauds. (Civ.
Code, § 1624(a)(1).) However, “[t]he
fact that performance within one year is not probable under the terms of the
agreement does not bring it within the statute of frauds.” (Lacy v. Bennett (1962) 207
Cal.App.2d 796, 800–801.) An oral or
implied contract is only invalid under the statute of frauds if it cannot be
fully performed within one year. (Columbia
Pictures Corp. v. De Toth (1948) 87 Cal.App.2d 620, 634.) “The test for determining whether an oral
contract is not to be performed within a year lies wholly within its
terms. [Citation.] The terms of the oral agreement may by express provision
specify that the duty is not to be performed within a year, or by clear
implication make it evident from the subject matter of the contract that a
period longer than one year was contemplated by the parties.” (Lacy, supra, 207 Cal.App.2d at
p.800.)
“A joint venture agreement may be informal or oral,”
and nothing inherently prohibits a joint venture agreement from being an oral
agreement. (Pellegrini v. Weiss (2008)
165 Cal.App.4th 515, 525.) The sole
basis for the statute of frauds to be applicable would be if the agreement were
an oral contract not to be performed within a year. However, as alleged, the statute of frauds
would not be applicable on this basis.
Here, the alleged
joint venture is for the parties to share equally “all out-of-pocket costs
incurred in applying for and obtaining permits for the three locations subject
to the West Hollywood Joint Venture Agreement, and Plaintiff Rodriguez agreed
to provide such services as necessary to apply for and attempt to secure permits
for these locations” with the parties
agreeing to share profits. (FAC ¶
15.) Nothing in this alleged agreement
requires that the agreement take place over more than a year. Though unlikely, Plaintiff could have potentially
obtained the permits within a year. The
fact that compensation would exist in perpetuity through profit sharing does
not make the agreement void. Per the
alleged agreement, Plaintiff’s performance could take place over a year. However, the mere fact that Plaintiff’s
performance could span over more than a year, and payment could accordingly take
place over a year does not make the statute of frauds applicable. (White Lighting Co. v. Wolfson (1968)
68 Cal.2d 336, 344, [“Nor does the statute of frauds apply to employment
contracts because the compensation for the services is to be measured by their
value to the employer over a period of more than one year.”].)
Accordingly, the
statute of frauds is inapplicable to and does not bar the first cause of
action.
Damages
Defendants contend
that the alleged damages are speculative.
In general, “[n]o damages can be recovered for a breach of contract which
are not clearly ascertainable in both their nature and origin,” and breach of
contract damages must thus be certain. (Civ.
Code, § 3301.)
Here,
the FAC alleges that “[a]s a direct and proximate result of Defendants'
wrongful conduct, Plaintiff Rodriguez has suffered general damages, including
the value of her interest in the West Hollywood Joint Venture Agreement and
other loss of profits, loss of business reputation and goodwill and other
general damages in g:tn amount which is not currently known but believed to be
in excess of $5,000,000.00.” (FAC ¶
22.) “Lost profits may be recoverable as
damages for breach of a contract.” (Sargon
Enterprises, Inc. v. University of Southern California (2012) 55
Cal.4th 747, 773.) At trial “[s]uch
damages must ‘be proven to be certain both as to their occurrence and their
extent, albeit not with “mathematical precision.”’” (Id. at p.774.) Though the FAC fails to quantify the amount
of lost profits that Plaintiff would have earned, nothing more is necessary for
purposes of pleading because Plaintiff has sufficiently alleged the existence
of damages – i.e., lost profits – due to Defendant’s conduct.
Accordingly,
Defendants’ demurrer to the first cause of action is OVERRULED.
Second Cause of Action: Declaratory Relief
Defendants
contend that the second cause of action fails because Plaintiff fails to allege
the existence of the signs.
The elements of declaratory relief are “‘(1) a proper subject
of declaratory relief, and (2) an actual controversy involving
justiciable questions relating to [Plaintiff’s] rights or
obligations.... [Citation.]’” (Wilson
& Wilson v. City Council of Redwood City (2011) 191 Cal.App.4th
1559, 1582.) Declaratory relief is proper “in cases of actual controversy relating to
the legal rights and duties of the respective parties[.]” (CCP § 1060.) However, “[t]he court may refuse to exercise
the power granted by this chapter in any case where its declaration or
determination is not necessary or proper at the time under all the
circumstances.” (CCP § 1061.) “The broad discretionary power of the trial
court to deny declaratory relief may be invoked by general demurrer.” (General of America Ins. Co. v. Lilly (1968)
258 Cal.App.2d 465, 471.)
“ ‘ “The purpose
of a declaratory judgment is to ‘serve some practical end in quieting or
stabilizing an uncertain or disputed jural relation.’ ” [Citation.] “Another
purpose is to liquidate doubts with respect to uncertainties or controversies
which might otherwise result in subsequent litigation [citation].” [Citation.]'
[Citation.] ‘ “One test of the right to institute proceedings for declaratory
judgment is the necessity of present adjudication as a guide for plaintiff’s
future conduct in order to preserve his legal rights.” ’ ” (Meyer v. Sprint Spectrum L.P. (2009)
45 Cal.4th 634, 647.) “Code of Civil
Procedure section 1060 does not require a breach of contract in order to obtain
declaratory relief, only an ‘actual controversy.’ Declaratory relief pursuant
to this section has frequently been used as a means of settling controversies
between parties to a contract regarding the nature of their contractual rights
and obligations.” (Ibid.)
“
‘Declaratory relief operates prospectively, serving to set
controversies at rest. If there is a controversy that calls for a declaration
of rights, it is no objection that past wrongs are also to be redressed; but
there is no basis for declaratory relief where only past wrongs
are involved. Hence, where there is an accrued cause of action for an actual
breach of contract or other wrongful act, declaratory relief may be
denied.’ [Citation.]” (Osseous
Technologies of America, Inc. v. DiscoveryOrtho Partners LLC (2010)
191 Cal.App.4th 357, 366.)
“Where a trial
court has concluded the plaintiff did not state sufficient facts to support a
statutory claim and therefore sustained a demurrer as to that claim, a demurrer
is also properly sustained as to a claim
for declaratory relief which is ‘wholly derivative’ of the
statutory claim.” (Ball v.
FleetBoston Financial Corp. (2008) 164 Cal.App.4th 794, 800.)
Here,
the FAC seeks a declaration that Plaintiff owns a 50% interest in the profits
and equity/ownership of the subject signs.
(FAC ¶ 27.) Though there is no
allegation that directly states that Defendants own the signs at this time, the
FAC does allege that the permit process was being finalized and that Defendants
would own such signs. (FAC ¶ 21.) Thus, there is a clear controversy
alleged. Defendants’ demurrer to the
second cause of action is overruled.
Third Cause of Action: Fraud
Defendants
contend that the third cause of action fails to sufficiently allege
damages.
“The elements of fraud are (a) a misrepresentation (false representation,
concealment, or nondisclosure); (b) scienter or knowledge of its falsity; (c)
intent to induce reliance; (d) justifiable reliance; and (e) resulting
damage.” (Hinesley v. Oakshade Town
Center (2005) 135 Cal.App.4th 289, 294.)
Here,
the FAC alleges that Plaintiff lost the profit that she would have obtained
from the joint venture. (FAC ¶¶ 22, 38.) Moreover, the FAC alleges that Plaintiff spent
hundreds of hours of her time in reliance on Defendants representations and has
not been compensated for such time. (FAC
¶¶ 41-43.) The FAC is sufficiently clear
and specific as to what damages Plaintiff has suffered due to Defendants’
wrongful conduct. Accordingly,
Defendants demurrer to the third cause of action is overruled.
Fourth Cause of Action: Common Counts
Defendants
contend that the fourth cause of action fails for the same reason as the first
cause of action.
“‘A common count is not a specific cause of
action ...; rather, it is a simplified form of pleading normally used to aver
the existence of various forms of monetary indebtedness, including that arising
from an alleged duty to make restitution under an assumpsit theory.’
[Citations.]” (Avidor v. Sutter's Place, Inc. (2013) 212
Cal.App.4th 1439, 1454.) “When a common
count is used as an alternative way of seeking the same recovery demanded in a
specific cause of action, and is based on the same facts, the common count is demurrable
if the cause of action is demurrable.” (McBride
v. Boughton (2004) 123 Cal.App.4th 379, 394.)
For
the reasons discussed above, the Court has overruled Defendants’ demurrer to the
first cause of action. The fourth cause
of action similarly does not fail.
Accordingly, Defendants’ demurrer to the fourth cause of action is
overruled.
CONCLUSIONS AND
ORDER
For the foregoing reasons, Defendants 3.0
Outdoor LLC, 3.0 Outdoor, LLC, Camber Ransom, and Samantha Ransom’s demurrer is
OVERRULED.
Defendants are to file and serve an answer
to the First Amended Complaint within thirty (30) days of today.
The case management conference is
continued to May 18, 2023 at 8:30 am.
Moving Parties are to give notice and file
proof of service of such.
DATED:
April 13, 2023 ___________________________
Elaine
Lu
Judge
of the Superior Court