Judge Elaine W. Mandel, Case Number: 24SMCV01124, Date: 2024-07-18 Tentative Ruling

Judge: Elaine W. Mandel, Case: 24SMCV01124, Date: 2024-07-18 Tentative Ruling

Case Number: 24SMCV01124 Hearing Date: July 18, 2024 Dept: P

Tentative Ruling

Rickfors, et al. v. Nassir, et al., Case No. 24SMCV01124

Hearing Date July 18, 2024

Defendants Mountainfield P01, LLC, Nassir, and Alfa Real Estate Group LLC’s Demurrer

Plaintiff investors partnered with defendants to purchase and develop a property in Beverly Hills. Plaintiffs allege defendant Nassir changed the equity structure of the venture, signed loan documents on plaintiff Toxboe's behalf without permission and undermined plaintiffs’ interests.

Plaintiffs sue for breach of contract, quasi-contract, promissory estoppel, false promise fraud, dissolution of partnership, declaratory relief, cancellation of written instrument, judicial foreclosure and partition. Defendants demur to the fifth, eighth, and ninth causes of action.

Request for Judicial Notice

Defendants’ request for judicial notice of the property deed (RJN Exh. 1) and Redemption Agreement (RJN Exh. 2) is granted as to existence of the documents only.

On demurrer, a court’s function is limited to testing the legal sufficiency of the complaint. A demurrer is not the appropriate procedure for determining the truth of disputed facts. Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 113-114. It is error to sustain a demurrer where plaintiff “has stated a cause of action under any possible legal theory. In assessing the sufficiency of a demurrer, all material facts pleaded in the complaint and those which arise by reasonable implication are deemed true.” Bush v. Cal. Conservation Corps (1982) 136 Cal.App.3d 194, 200. In determining a demurrer, the court assumes the truth of the facts alleged in the complaint and the reasonable inferences that may be drawn from those facts. Miklosy v. Regents of University of California (2008) 44 Cal.4th 876, 883. On demurrer, the court must determine if the factual allegations are adequate to state a cause of action under any legal theory. Barquis v. Merchants Collection Ass’n. (1972) 7 Cal.3d 94, 103.

Dissolution of Partnership

A cause of action for dissolution is proper when “it is not reasonably practicable to carry on the activities of the limited partnership in conformity with the partnership agreement.” Panakosta, Partners, LP v. Hammer Lane Mgmt., LLC (2011) 199 Cal.App.4th 612, 628.

The complaint alleges defendant Nassir made representations to plaintiffs “that he would be entitled to only an equal division of the profits of Mountainfield P01, LLC’s share from the venture upon completion, that he would promptly finish construction on the real property, and that he was on board with the plan to sell the real property and split equity therefrom.” Compl. ¶121. The complaint alleges “Plaintiffs and Defendant Nassir thus all own a percentage of Defendant Mountainfield P01, LLC, for which they seek dissolution and unwinding.” Compl. ¶122. The complaint asserts plaintiffs seek dissolution of Alfa. Compl. ¶¶123-124.

Defendants argue the Redemption Agreement states the only members of Mountainfield at its inception were Nassir and Toxboe, who relinquished his interest, leaving Nassir as sole owner. Defendants argue plaintiffs have no interest in Mountainfield or Alfa and have no standing to seek dissolution.

This argument rests on the consideration of the contract submitted for judicial notice. In light of the ruling on RJN Exh. 2, to the extent that arguments in the demurrer rely on outside evidence, these challenges are overruled. Code Civ. Proc. §430.10(e). Defendants’ arguments rest on a factual finding as to contract interpretation, outside the four corners of the complaint; this the court cannot do on demurrer. OVERRULED.

Judicial Foreclosure

A demurrer for uncertainty means the pleading is ambiguous or unintelligible. Code Civ. Proc., §430.10(f). “[D]emurrers for uncertainty are disfavored, and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” A.J. Fistes Corp. v. GDL Best Contractors, Inc. (2019) 38 Cal.App.5th 677, 695.

Defendant argues the cause of action is uncertain because the complaint is unclear as to whether it seeks nonjudicial or judicial foreclosure, as both are referenced. And if plaintiffs intended to state nonjudicial foreclosure, defendants assert a demurrer should be sustained because no such cause of action exists.

The judicial foreclosure claim is based on allegations that plaintiffs invested with Nassir and recorded liens against the property in the form of Deeds of Trust to secure their notes. Compl. ¶147. However, Nassir anticipatorily repudiated his agreement to sell the property and pay investors their equity shares. Compl. ¶149. Plaintiffs issued Notices of Default to the Nassir for the sums due under the notes secured by the Deeds of Trust, but he failed to pay. Compl. ¶150. As a result, plaintiffs seek a “judicial order of foreclosure on the real property, and a sale of the same pursuant to Cal. Code of Civ. Pro. 725a, et seq.” Compl. ¶151.

The complaint’s mention of “nonjudicial foreclosure” appears to be in error; the briefing and other allegations indicate the claim is for judicial foreclosure. OVERRULED.

Partition of Real Property

“A partition action may be commenced and maintained by” an owner of real property that “is owned by several persons concurrently or in successive estates.” Code Civ. Proc., § 872.210(a). The elements are: (a) description of the property; (b) all interests plaintiff has or claims in the property; (c) all interests of record or actually known to plaintiff that persons other than plaintiff have or claim; (d) the estate as to which partition is sought and a prayer for partition; and (e) where plaintiff seeks sale of the property, an allegation of the facts justifying such relief. Code Civ. Proc., § 872.230.

Defendants argue plaintiffs fail to state a claim because they do not have any ownership in the property; Mountainfield holds title as demonstrated by the grant deed, RJN, Exh. 1. The court cannot consider defendants’ other argument which relies on evidence not judicially noticed.

In opposition, plaintiffs agree Mountainfield holds title to the property, but argue plaintiff investors have an interest in Mountainfield. Compl. ¶151. Plaintiff’s allegations, if true, would establish all elements of partition. Again, the court cannot make factual findings on demurrer. OVERRULED.