Judge: Frank M. Tavelman, Case: 21BBCV00321, Date: 2023-12-15 Tentative Ruling

Case Number: 21BBCV00321    Hearing Date: December 15, 2023    Dept: A

LOS ANGELES SUPERIOR COURT

NORTH CENTRAL DISTRICT - BURBANK

DEPARTMENT A

DEMURRER

NOTICE:

The Court is not requesting oral argument on this matter.  Pursuant to California Rules of Court, Rule 3.1308(a)(1) notice of intent to appear is required.  Unless the Court directs argument in the Tentative Ruling, no argument will be permitted unless a “party notifies all other parties and the court by 4:00 p.m. on the court day before the hearing of the party’s intention to appear and argue.  The tentative ruling will become the ruling of the court if no notice of intent to appear is received.”  

Notice may be given either by email at BurDeptA@LACourt.org or by telephone at (818) 260-8412.

ALLEGATIONS: 

Commodity Trucking Acquisition, LLC ("Plaintiff") filed suit against Yvette Pena (“Yvette”) and Pena Construction Services, Inc. (“Pena”) (collectively “Defendants”) alleging that Pena entered into an agreement on August 5, 2020 to perform construction work at 777 N. Front Street, Burbank, California 91502. Plaintiff alleges that Peña then entered into an agreement with Plaintiff for Plaintiff to provide trucking, transportation, and leasing services for the Project. Plaintiff alleges that it performed such work, for it is still unpaid, in the amount of $100,712.60.

Plaintiffs Second Amended Complaint added a ninth cause of action for Breach of Personal Guaranty as against Yvette. This cause of action is in connection with a Credit Application made by Pena Construction Services to Plaintiff on September 11, 2020. (SAC Exh. A.)

Yvette now demurs to the ninth cause of action on grounds that the cause of action for breach of personal guaranty does not state sufficient facts. Yvette argues that there is no personal guarantee in the written contract upon which to base this cause of action. Plaintiff opposes and Defendant replies.

ANALYSIS: 

I.                    LEGAL STANDARD 

The grounds for a demurrer must appear on the face of the pleading or from judicially noticeable matters. (C.C.P. § 430.30(a); Blank v. Kirwan (1985) 39 Cal. 3d 311, 318.) A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) The only issue involved in a demurrer hearing is whether the complaint states a cause of action. (Id.)

A demurrer assumes the truth of all factual, material allegations properly pled in the challenged pleading. (Blank v. Kirwan, supra, 39 Cal. 3d at p. 318.) No matter how unlikely or improbable, the plaintiff’s allegations must be accepted as true for the purpose of ruling on the demurrer. (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.  App. 3d 593, 604.) But this does not include contentions; deductions; conclusions of fact or law alleged in the complaint; facts impossible in law; or allegations contrary to facts of which a court may take judicial notice.  (Blank, supra, 39 Cal. 3d at 318.)

Pursuant to Code of Civil Procedure (“C.C.P.”) §§ 430.10(e) and (f), the party against whom a complaint has been filed may demur to the pleading on the grounds that the pleading does not state facts sufficient to constitute a cause of action, or that the pleading is uncertain, ambiguous and/or unintelligible. It is an abuse of discretion to sustain a demurrer without leave to amend if there is a reasonable probability that the defect can be cured by amendment. (Schifando v. City of Los Angeles (2003) 31 Cal. 4th 1074, 1082.)

II.                 MERITS

“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. Kolodotronis (2011) 202 Cal.App.4th 480, 486 citing Torrey Pines Bank v. Superior Court (1986) 216 Cal.App.3d 813, 819.)

The contract at issue is a Credit Application between Pena Construction Services, Inc. and Plaintiff. (SAC Exh. A.) The agreement was signed by “Yvette Pena, President”. (Id.)  Pena argues that she was signing this contract in her capacity as the president of Pena Construction Services and was not personally guaranteeing the loan. The credit application contains the following language:

I/We personally and unconditionally guarantee any and all obligations incurred by applicant [PEÑA] to [CTA] and I/We further promise to pay reasonable attorney’s fees and expenses which may be incurred in the collection of this account

Plaintiff argues this language unambiguously states that Pena, as the signatory to the document, agreed to personally guarantee the loan. Pena argues the opposite, that the nature of the contract is not one of a personal guaranty and the contract cannot be interpreted to bind Pena personally.

The Court need not reach a determination on the interpretation of the contract at this time. 

“Where a complaint is based on a written contract which it sets out in full, a general demurrer to the complaint admits not only the contents of the instrument but also any pleaded meaning to which the instrument is reasonably susceptible.” (Aragon–Haas v. Family Security Ins. Services, Inc. (1991) 231 Cal.App.3d 232, 239.) “[W]here an ambiguous contract is the basis of an action, it is proper, if not essential, for a plaintiff to allege its own construction of the agreement. So long as the pleading does not place a clearly erroneous construction upon the provisions of the contract, in passing upon the sufficiency of the complaint, we must accept as correct plaintiff's allegations as to the meaning of the agreement.” (Id. [internal quotation marks omitted].)

Here, the Court finds Plaintiff’s assertion of a personal guaranty as to Pena is not a clearly erroneous construction. As such, Plaintiff has provided a reasonable interpretation of the written Credit Application sufficient to survive demurrer.  Extrinsic evidence and contract interpretation principles remain irrelevant on demurrer. It may be that Plaintiff will not be able to show the personal guaranty is valid, but such questions are not properly raised on demurrer.

Accordingly, the demurrer to the ninth cause of action is OVERRULED.

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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 

Yvette Pena’s Demurrer came on regularly for hearing on December 15, 2023, 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 DEMURRER TO THE NINTH CAUSE OF ACTION IS OVERRULED.

UNLESS ALL PARTIES WAIVE NOTICE, DEFENDANT TO GIVE NOTICE.

IT IS SO ORDERED. 

DATE:  December 15, 2023                          _______________________________ 

                                                                        F.M. TAVELMAN, Judge 

Superior Court of California 

County of Los Angeles