Judge: Elaine W. Mandel, Case: 24SMCV04069, Date: 2025-05-15 Tentative Ruling

Case Number: 24SMCV04069    Hearing Date: May 15, 2025    Dept: P

Tentative Ruling

Jewelry Theatre Building v. Banayan, Case no. 24SMCV04069

Hearing date May 15, 2025

Plaintiff JTB’s Demurrer to Second Amended Cross-Complaint

Plaintiff Jewelry Theatre Building, LLC (“JTB”) sues defendant Banayan for unpaid rent arising from an abandoned commercial lease. Banayan operated a booth in JTB’s building selling jewelry and precious stones. Banayan cross-complains for breach of contract, alleging JTB failed to maintain the premises. JTB demurs to the second amended cross-complaint.

Via the cross-complaint, Banayan alleges (1) breach of contract; (2) negligence; (3) breach of the covenant of quiet enjoyment; (4) nuisance; (5) constructive eviction; and (6) conversion. The first five causes of action arise from the same allegations: that JTB failed to repair a leak from the restroom over Banayan’s unit, and JTB was constantly conducting repairs immediately surrounding the unit. The sixth cause of action arises from allegations that JTB took or otherwise caused Banayan to lose $50,000 in merchandise.

“The function of a demurrer is to test the sufficiency of the complaint as a matter of law.” Holiday Matinee, Inc. v. Rambus, Inc. (2004) 118 Cal.App.4th 1413, 1420. A complaint “is sufficient if it alleges ultimate rather than evidentiary facts” Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550, but plaintiff must set forth the essential facts of the case “with reasonable precision and with particularity sufficient to acquaint [the] defendant with the nature, source and extent” of the claim. Doheny Park Terrace Homeowners Ass’n., Inc. v. Truck Ins. Exchange (2005) 132 Cal.App.4th 1076, 1099.

JTB argues the first five causes of action fail because the lease states the unit was taken “as-is.” SACC exh. 1 paras. 2.3, 4.3. The lease states:

At Para. 2.3 "The taking of possession of Premises by Tenant shall be conclusive evidence, as against Tenant, that Tenant accepts the same in its then "as is" condition and that the Premises were in good and satisfactory condition at the time such possession was so taken."

At Para. 4.3 "Upon Tenant taking possession of the Premises Tenant shall be deemed to have accepted the Premises as being in good, sanitary order, condition and repair. Tenant shall, at Tenant's sole cost and expense, keep the Premises and every part thereof in good condition and repair."

“When a plaintiff attaches a written agreement to his complaint, and incorporates it by reference into his cause of action, the terms of that written agreement take precedence over any contradictory allegations in the body of the complaint. ‘If facts appearing in the exhibits contradict those alleged, the facts in the exhibits take precedence.’” Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267.

JTB argues the lease prohibits liability from leaks and construction. SACC exh. 1 paras. 7.3, 8.1-8.3. JTB further argues Banayan was required to give written notice of any issues. SACC exh. 1 para. 8.1.

Banayan argues the SACC alleges issues arose after taking possession of the unit. See SACC paras. 10, 12. Banayan argues he has not alleged inconvenience, annoyance or injury to business, which are barred by the lease terms. This is inaccurate. Banayan alleges “prolonged repairs interfered with Cross-Complainant’s business.” SACC para. 12. The terms of the lease control; JTB is not liable for injuries to business, including interference, arising from leaking pipes or ongoing construction (see lease, above). Further, the SACC fails to allege Banayan submitted written notice as required.

JTB also argues Banayan pled a modification, implicating equitable estoppel. “Equitable estoppel precludes a party from asserting rights they otherwise would have had against another when their own conduct renders assertion of those rights inequitable.” Soltero v. Precise Distribution, Inc. (2024) 102 Cal.App.5th 887, 893. Banayan alleges the condition of the unit was such that he received a reduced rent modification “in or about March of 2020.” See SACC paras. 14-18. Banayan alleged he received financial compensation for his damages, equitably estopping him from raising those same issues here.

JTB argues the economic loss rule bars recovery on the second, fourth and fifth causes of action. “A person may not ordinarily recover in tort for the breach of duties that merely restate contractual obligations” Aas v. Superior Court (2000) 24 Cal.4th 627. Banayan fails to plead JTB breached any duties not enumerated in the lease agreement. See SACC exh. 1. Banayan fails to demonstrate why the economic loss rule does not apply.

Banayan is barred by the terms of the lease, equitable estoppel and the economic loss rule from pursuing the first five causes of action. Banayan’s alleged harms arise solely from liabilities and duties contemplated on the face of the lease, for which Banayan already received a modification. See Kim, supra; see also Soltero, supra. JTB’s demurrer to the first five causes of action is SUSTAINED without leave to amend.

JTB demurs to the sixth cause of action for conversion on the grounds that it fails to allege sufficient facts. Banayan alleges he owned jewelry worth $50,000, JTB exercised wrongful dominion over that jewelry and failed to return it. SACC paras. 58-60. Banayan alleges the jewelry was stored in locked cabinets in the unit when Banayan vacated. SACC paras. 21-22.

Banayan does not allege when he vacated or when he returned to attempt to collect the jewelry. Banyan alleges he gave notice of his intent to vacate but fails to allege when that notice was, the date of his alleged departure or the date of his attempted reclamation of the property. See SACC para. 20.

“Conclusory allegations will not withstand demurrer.” Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 808. Banayan offers conclusory allegations that JTB took possession of the jewelry without specific facts. Absent allegations showing how long the jewelry was stored in the unit or allegations establishing a link between JTB and the missing jewelry, the sixth cause of action is insufficiently pled. Further, the lease terms release JTB from damage to property left behind after the unit was vacated, making the dates relevant. See SACC exh. 1 para. 2.5. Banayan must make specific allegations as to date, time, and any link between JTB and the jewelry. Demurrer to the sixth cause of action SUSTAINED with 15 days leave to amend.