Judge Elaine W. Mandel, Case Number: 23SMCV04153, Date: 2024-01-17 Tentative Ruling

Judge: Elaine W. Mandel, Case: 23SMCV04153, Date: 2024-01-17 Tentative Ruling

Case Number: 23SMCV04153 Hearing Date: January 17, 2024 Dept: P

Tentative Ruling

Douglas Emmett 1997, LLC v. Manifest 3, LLC, et al., Case No. 23SMCV04153

Hearing date January 17, 2024

Defendants Manifest 3, LLC and Massa Lynda Sheridan’s Demurrer to the Complaint

Defendants demur to the breach of lease and breach of guaranty claims in this commercial unlawful detainer matter.

“A demurrer tests the sufficiency of a complaint as a matter of law.” Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1358. “[T]he court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded.” Ibid. A demurrer accepts as true all well pleaded facts and those facts of which the court can take judicial notice but not deductions, contentions, or conclusions of law or fact. Fox v. JAMDAT Mobile, Inc. (2010) 185 Cal.App.4th 1068, 1078.

Demurring party must meet and confer and file a declaration regarding those efforts. Code Civ. Proc., § 430.41. Though defendants have not filed a code-compliant meet and confer declaration (Afifi Decl., ¶¶ 2-3; Exhibits 1-2), the court will consider the merits.

Defendants request the Court take judicial notice of Executive Order N-33-20, enacted in March 2020. Plaintiff requests judicial notice of the January 25, 2022 Resolution of the Board of Supervisors of the County of Los Angeles Further Amending and Restating the County of Los Angeles COVID-19 Tenant Protections Resolution (the “ordinance”). GRANTED as to the existence of these documents. The court does not interpret either.

First Cause of Action for Breach of Office Lease

To prevail on a cause of action for breach of contract, plaintiff must prove (1) a contract, (2) performance or excuse for nonperformance, (3) breach and (4) damage. Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186. “[W]here . . . a duty alleged to be commanded by an ordinance is sought to be enforced . . . the pleading of the ordinance is necessary.” Thompson v. Guyer-Hays, supra, 207 Cal.App.2d 366, 373.“Where, however, the ordinance is a mere secondary incident of the cause of action, pleading it in the complaint . . . is not a vital prerequisite…” Id.

Defendants argue the complaint fails to allege compliance with the ordinance, so the contract claim fails. The complaint does not address the ordinance and simply alleges breach of contract.

The Court rejects defendants’ argument that because plaintiff is suing for nonpayment of rent, compliance with the ordinance should have been alleged. Plaintiff alleges defendant Manifest failed to pay its pro-rata share of operating expenses and late charges, as well as rent. Complaint, ¶¶ 14-15. The breach of the lease claim is not solely premised on nonpayment of rent.

Defendants argue impossibility bars the claim. “Impossibility is . . . not only strict impossibility but as impracticability because of extreme and unreasonable difficulty, expense, injury or loss involved.” Autry v. Republic Productions (1947) 30 Cal.2d 144, 148-49. “[I]mpossibility and impracticability . . . are common law defenses to contract performance.” West Pueblo Partners, LLC v. Stone Brewing Co., LLC (2023) 90 Cal.App.5th 1179, 1188. [A] demurrer based on an affirmative defense will be sustained only where the face of the complaint discloses that the action is necessarily barred by the defense.” Stella v. Asset Management Consultants, Inc. (2017) 8 Cal.App.5th 181, 191.

Defendants contend the ordinance required plaintiff to provide commercial tenants with notice of their rights, and, because of COVID-19, it was impossible for them to use the office building. This is an affirmative defense. The court, on demurrer, cannot consider such argument and must only consider the four corners of the complaint and allegations therein, not outside arguments.

The complaint is not uncertain and sufficiently apprises defendants of the allegations and issues. People v. Lim (1941) 18 Cal.2d 872, 882. The first cause of action pleads the required elements for breach of contract damage. Complaint, ¶¶ 8, 10, 15-20. OVERRULED.

Second Cause of Action for Breach of Guaranty of Lease

Defendants argue plaintiff failed to provide notice as required under the Ordinance, so cannot enforce a personal guarantee for rent incurred by a commercial tenant during the protected time period. Pleading compliance with the Ordinance is not a requirement for the second cause of action. On demurrer, the court cannot consider affirmative defenses of lack of compliance with the Ordinance.

“A lender is entitled to judgment on a breach of guaranty claim based upon undisputed evidence that (1) there is a valid guaranty, (2) the borrower has defaulted, and (3) the guarantor failed to perform under the guaranty. Gray1 CPB, LLC v. Kolokotronis (2011) 202 Cal.App.4th 480, 486.

Plaintiff alleges existence of the guaranty. Complaint, ¶¶ 21-26. Plaintiff states a valid cause of action for breach of guaranty of lease under Gray 1, supra, 202 Cal.App.4th 480, 486. OVERRULED.