Judge: Frank M. Tavelman, Case: 20BBCV00507, Date: 2022-07-29 Tentative Ruling

Case Number: 20BBCV00507    Hearing Date: July 29, 2022    Dept: A

ALLEGATIONS:

Milan REI VIII, LLC, a Delaware Limited Liability Company ("Plaintiff") filed suit against Green Solar Technologies, Inc., a California Corporation ("GST."); Green Solar Tech California, a California Corporation ("GSTCA"); Green Solar Enterprises, LLC, a Nevada Limited Liability Company ("GSE", and together with GST and GSTCA, "GST Defendants"); Nicki Zvik ("Zvik"); and Shay Yavor ("Yavor", and collectively, "Defendants"), alleging that GST Defendants, controlled by Zvik and Yavor, breached the lease agreement between the parties and held unlawful possession of Plaintiff's real property, located at 6400 Laurel Canyon Boulevard, Suites 400, 450, 460, and 490, North Hollywood ("Subject Property").

Plaintiff filed a Complaint on August 8, 2020, alleging 3 causes of action: (1) Breach of Lease; (2) Trespass; and (3) Interference with Contractual Relations.

PRESENTATION:

The Court received the Motion for Judgment on the Pleadings filed by GST Defendants on July 18, 2022; the opposition filed by Plaintiff also on July 18, 2022; and the reply filed by GST Defendants on July 21, 2022.

The Court received the Motion for Leave to Amend Answer filed by GST Defendants on June 29, 2022; the opposition filed by Plaintiff on July 18, 2022; and the reply filed by GST Defendants on July 19, 2022.

RELIEF REQUESTED:

GST Defendants move for judgment on the pleadings as to the Complaint.

GST Defendants move for leave to file a first amended answer.

ANALYSIS:

Judgment on the Pleadings

I.          LEGAL STANDARD

A defendant may move for judgment on the pleadings when the “complaint does not state facts sufficient to constitute a cause of action against that defendant.” (CCP §438(b)(1) & (c)(1)(B)(ii).) “A motion for judgment on the pleadings may be made at any time either prior to the trial or at the trial itself. [Citation.]” (Ion Equipment Corp. v. Nelson (1980) 110 Cal.App.3d 868, 877.) “A motion for judgment on the pleadings performs the same function as a general demurrer, and hence attacks only defects disclosed on the face of the pleadings or by matters that can be judicially noticed. Presentation of extrinsic evidence is therefore not proper on a motion for judgment on the pleadings.” (Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 999 (Citations Omitted).) The standard for ruling on a motion for judgment on the pleadings is essentially the same as that applicable to a general demurrer, that is, under the state of the pleadings, together with matters that may be judicially noticed, it appears that a party is entitled to judgment as a matter of law. (Bezirdjian v. O'Reilly (2010) 183 Cal.App.4th 316, 321-322 (citing Schabarum v. California Legislature (1998) 60 Cal.App.4th 1205, 1216).)

II.        REQUEST FOR JUDICIAL NOTICE

GST Defendants request the Court take judicial notice of Exhibits A and B, represented as an Unlawful Detainer Complaint for Case No. 19BBCV00827 (“Prior Unlawful Detainer”) and a Judgment on Special Verdict for the same case, respectively.

The Court takes judicial notice of Exhibits A and B pursuant to Evid. Code § 452(d).

III.       MERITS

First, GST Defendants argue that each claim in the instant action is barred by res judicata, collateral estoppel, and the one-action rule because Plaintiff has already successfully sued GST Defendants in the Prior Unlawful Detainer and obtained holdover damages in the amount of $92,163.12, as well as an award of attorney’s fees and costs. GST Defendants argue that each claim in this complaint is based on the same holdover damages, and so the complaint cannot be maintained. Second, GST Defendants argue that Plaintiff cannot pursue a trespass claim after successfully litigating an unlawful detainer action based on holdover as a matter of law, citing to Drybread v. Chipain Chiropractic (2007) 151 Cal.App.4th 1063 and Vandenberg v. Superior Court (Centennial Insurance Company) (1999) 21 Cal.4th 815. Third, GST Defendants argue that Plaintiff has failed to state a claim for the tortious interference of contract cause of action. Fourth and finally, GST Defendants argue that the complaint does not properly plead the alter ego allegation, and so the two individual defendants, Zvik and Yavor should be dismissed from the action.

In opposition, Plaintiff argues that this action seeks damages that accrued after entry of the Prior Unlawful Detainer judgment, that were not recoverable in the Prior Unlawful Detainer. Plaintiff asserts that the Prior Unlawful Detainer did not determine whether GST Defendants committed misconduct after judgment was entered, and that those claims are brought in the instant action. Plaintiff argues that this action is proper because unlawful detainer actions are summary proceedings with limited preclusive effect.

A.    Procedural Context and Case History

On July 2, 2015, Plaintiff filed suit against all Defendants involving the same Subject Property in a prior action with Case No. BC586898 (“Prior Action”), alleging that they breached the lease by failing to pay rent. In September of 2016, the parties settled their claims and requested the Court retain jurisdiction.

On September 16, 2019, Plaintiff filed a commercial unlawful detainer suit involving the same Subject Property against only GST with Case No. 19BBCV00827 (“Prior Unlawful Detainer”). The court entered judgment for Plaintiff in this case on November 26, 2019 for possession of the Subject Property and holdover damages in the sum of $92,163.12 as a result of Defendant remaining in possession after August 15, 2019.

B.     Res Judicata; Collateral Estoppel; One-Action Rule

Res judicata, or claim preclusion, prevents the relitigation of the same cause of action in a second suit between the same parties or parties in privity with them. (Gabriel v. Wells Fargo Bank, N.A. (2010) 188 Cal. App. 4th 547, 556.) For collateral estoppel, prior judgment operates in a second suit based on a different cause of action as an estoppel as to issues in the second action that were actually litigated and determined in the first action. (People v. Barragan (2004) 32 Cal.4th 236, 252.) Res judicata or collateral estoppel apply if: “(1) A claim or issue raised in the present action is identical to a claim or issue litigated in a prior proceeding; (2) the prior proceeding resulted in a final judgment on the merits; and (3) the party against whom the doctrine is being asserted was a party or in privity with a party to the prior proceeding.”  (Boekenn v. Philip Morris USA, Inc. (2010) 48 Cal. 4th 788, 797.)

The Complaint requests holdover damages and other fees against Defendants for alleged unlawful possession from November 23, 2019 through December 18, 2019, as well as other associated costs and legal fees incurred. The damages associated with this period of possession differs from the damages awarded in the Prior Unlawful Detainer for the period of August 15, 2019 through the November 21, 2019 jury verdict. Plaintiff is correct in that an unlawful detainer action generally has a very narrow preclusive effect limited to issues that were fully tried. (Gombiner v. Swartz (2008) 167 Cal.App.4th 1365, 1371.) As the Prior Unlawful Detainer tried only the issues of possession and holdover damages relating to the period of August 15, 2019 through November 21, 2019, the judgment does not bar the instant action, which, on review of the Complaint, seeks holdover and other associated damages relating to alleged unlawful possession from November 23, 2019 through December 18, 2019. (Complaint, ¶¶ 35, 43, 46.) The same rationale applies to GST Defendants’ trespass estoppel argument.

GST Defendants argue that the one-action rule precludes Plaintiff from “seeking a second bite of the apple when asserting a claim based upon the exact legal theory and claim for damages previously sought and fully adjudicated.” (Mov., 6:19-21.) This definition describes a term more akin to res judicata. The one-action rule bars creditors from initiating more than one form of action for the recovery of debt secured by a mortgage or deed of trust on real property. (Walker v. Community Bank (1974) 10 Cal.3d 729, 733-34.) No such debt is alleged here.

C.     Third Cause of Action (Interference with Contractual Relations)

Intentional interference with contract requires proof of (1) a valid and existing contract between the plaintiff and a third party, (2) the defendant’s knowledge of the contract and intent to induce breach, (3) the plaintiff’s breach of contract (4) caused by defendant’s unjustified or wrongful conduct, and (5) damages. (Dryden v. Tri-Valley Growers (1977) 65 Cal.App.3d 990, 995.)

GST Defendants argue that the elements of intent, breach, and damages are not met.

On review of the Complaint, the Court finds that the pleading sufficiently alleges: (1) a valid lease agreement between Plaintiff and a new lessee (Complaint, ¶ 49); (2) GST Defendant’s knowledge of the contract and intent to induce a breach (Complaint, ¶¶ 50, 52); (3) Plaintiff’s breach of the lease agreement (Complaint, ¶ 51) (4) caused by GST Defendants’ wrongful conduct (Complaint, ¶ 51); and (5) Plaintiff’s damages (Complaint, ¶ 53). None of the damages are facially related to the holdover damages relating to the Prior Unlawful Detainer.

D.    Claims Against Zvik and Yavor

Zvik and Yavor were dismissed without prejudice from the action on July 12, 2022. This issue is thus moot.

IV.       CONCLUSION

Accordingly, the Court denies the instant motion.

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Leave to File Amended Answer

I.          LEGAL STANDARD

California courts employ a liberal approach to amendment of pleadings in light of a strong policy favoring resolution of all disputes between parties in the same action. (Nestle v. Santa Monica (1972) 6 Cal.3d 920, 939.) Pursuant to this policy, requests for leave to amend will normally be granted unless (a) the party seeking to amend has been dilatory in bringing the proposed amendment; and (b) the delay in seeking leave to amend will cause prejudice to an opposing party. (Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 490.) Absent a showing of prejudice, delay in seeking an amendment alone does not justify denial of leave to amend. (Higgins v. Del Faro (1981) 123 Cal.App.3d 558, 564-65.)

III.       MERITS

GST Defendants assert that current counsel was substituted in on June 23, 2021 and has only recently discovered facts that led to the proposed First Amended Answer (“FAA”). (Decl. Stanley, ¶ 2.) GST Defendants argue that they did not file the instant motion sooner because Plaintiff never filed a Notice of Related Case, and because their counsel assumed that the case would be dismissed or settled prior to trial, due to the lack of activity in the case during the past year. (Decl. Stanley, ¶ 2.)

GST Defendants have been dilatory in seeking amendment. It is the responsibility of counsel to adequately prepare for a case when assuming responsibility as counsel for a party: GST Defendants’ arguments concerning the lack of a Notice of Related Case and their assumption that the case would easily be dismissed or settled are thus unavailing. It is further no fault of Plaintiff’s that GST Defendants’ past counsel somehow missed the prior case history between Plaintiff and GST Defendants. This case is coming up on two full years, with trial set to begin within three weeks of the instant hearing date. However, given that Plaintiff is seeking a 120 day continuance for discovery related matters, the Court believes denying the leave to amend would not be appropriate considering California’s policy of liberality in allowing amended pleadings, as well as the large number of discovery motions coming up on calendar, and grants the instant motion, along with a continuance of trial.

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RULING:

In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records.

ORDER

Defendants Green Solar Technologies, Inc., a California Corporation; Green Solar Tech California, a California Corporation; Green Solar Enterprises, LLC, a Nevada Limited Liability Company's Motion for Judgment on the Pleadings and Motion for Leave to File Amended Answer came on regularly for hearing on July 29, 2022, with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows:

THE MOTION FOR JUDGMENT ON THE PLEADINGS IS DENIED.

THE MOTION FOR LEAVE TO FILE AMENDED ANSWER IS GRANTED. 

IT IS SO ORDERED.

DATE:  July 29, 2022                                   _______________________________

                                                                        F.M. TAVELMAN, Judge

                                                                        Superior Court of California

County of Los Angeles