Judge: Frank M. Tavelman, Case: 24BBCV00268, Date: 2024-08-30 Tentative Ruling
Case Number: 24BBCV00268 Hearing Date: August 30, 2024 Dept: A
LOS
ANGELES SUPERIOR COURT
NORTH
CENTRAL DISTRICT - BURBANK
DEPARTMENT
A
TENTATIVE
RULING
AUGUST 30,
2024
DEMURRER
AND MOTION TO STRIKE
Los Angeles Superior Court
Case # 24BBCV00268
|
MP: |
A&E Development Corporation
(Defendant) |
|
RP: |
The Teen Project Inc. (Plaintiff) |
The Court is not
requesting oral argument on this matter. The Court is guided by
California Rules of Court, Rule 3.1308(a)(1) whereby notice of intent to appear
is requested. Unless the Court directs argument in the Tentative Ruling,
no argument is requested and any party seeking argument should notify 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 argument is received.
Notice may be given
either by email at BurDeptA@LACourt.org or by telephone at (818) 260-8412.
ALLEGATIONS:
The Teen Project Inc.
(Plaintiff) brings this action against A&E Development Corporation
(A&E). Plaintiff alleges that A&E breached the terms of a commercial
lease agreement (the Lease) for the property located at 8140 Sunland Boulevard
(the Premises). (FAC ¶ 3.) Plaintiff was using the premises as a
rehabilitation facility for underserved women. (FAC ¶ 12.) Plaintiff
alleges that A&E refused to rectify material defects of the Premises such
that on December 4, 2023, the facility was shut down by the Los Angeles Fire
Department. (FAC ¶ 16.) Plaintiff alleges that A&E continues to demand rent
pursuant to the Lease, despite A&E’s refusal to rectify the defects. (FAC
¶ 25.)
Plaintiff’s First
Amended Complaint (FAC) states causes of action for (1) Breach of Contract, (2)
Rescission, and (3) Declaratory Relief.
A&E now demurs to
each cause of action on grounds that Plaintiff fails to allege sufficient
facts. A&E also moves to strike allegations that it breached the Lease and Plaintiff’s
cause of action for Rescission, arguing both are improper. Plaintiff opposes
the demurrer and motion to strike. A&E replies.
ANALYSIS:
I.
LEGAL
STANDARD
Demurrer
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 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.)
Motion to Strike
Motions to strike are
used to reach defects or objections to pleadings that are not challengeable by
demurrer, such as words, phrases, and prayers for damages. (See C.C.P. §§ 435,
436, and 437.) The proper procedure to attack false allegations in a pleading
is a motion to strike. (C.C.P. § 436(a).) In granting a motion to strike made
under C.C.P. § 435, “[t]he court may, upon a motion made pursuant to Section
435 [notice of motion to strike whole or part of complaint], or at any time in
its discretion, and upon terms it deems proper: (a) Strike out any irrelevant,
false, or improper matter inserted in any pleading.” (C.C.P. § 436(a).)
Irrelevant matters include immaterial allegations that are not essential to the
claim or those not pertinent to or supported by an otherwise sufficient claim.
(C.C.P. § 431.10.)
The court may also “[s]trike
out all or any part of any pleading not drawn or filed in conformity with the
laws of this state, a court rule, or an order of the court.” (C.C.P. § 436
(b).)
II.
MERITS
Meet and Confer
C.C.P. §§ 430.41(a) and 435.5(a) requires that the moving
party meet and confer with the party who filed the pleading that is subject to
the demurrer and/or motion to strike. Upon review the Court finds the meet and
confer requirements were met. (Johnson Decl. ¶ 2.)
Relevant Lease Conditions
Below
are the relevant portions of the Lease contract which A&E utilizes in
making their demurrer.
[A&E] warrants
that to the best of its knowledge the improvements on the Premises and the
Common Areas comply with the building codes that were in effect at the time
that each such improvement, or portion thereof, was constructed, and also with
all applicable laws, covenants or restrictions of record, regulations. and
ordinances in effect on the Start Date (“Applicable Requirements”). Said
warranty does not apply to the use to which [Plaintiff] will put the Premises,
modifications which may be required by the Americans with Disabilities Act or
any similar laws as a result of [Plaintiff]’s use (see Paragraph 49), or to any
Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or
to be made by [Plaintiff].
NOTE: [Plaintiff] is
responsible for determining whether or not the Applicable Requirements, and
especially the zoning are appropriate for [Plaintiff]’s intended use and
acknowledges that past uses of the Premises may no longer be allowed. If the
Premises do not comply with said warranty, [A&E] shall, except as otherwise
provided, promptly after receipt of written notice from [Plaintiff] setting
forth with specificity the nature and extent of such non-compliance, rectify
the same at [A&E]'s expense, If [Plaintiff] does not give [A&E] written
notice of a non-compliance with this warranty within 6 months following the
Start Date, correction of that non-compliance shall be the obligation of
[Plaintiff] at [Plaintiff]'s sole cost and expense.
If the Applicable
Requirements are hereafter changed so as to require during the term of this
Lease the construction of an addition to or an alteration of the Unit, Premises
and/or Building, the remediation of any Hazardous Substance, or the
reinforcement or other physical modification of the Unit, Premises and/or
Building (“Capital Expenditure”) [A&E] and [Plaintiff] shall allocate the
cost of such work as follows:
(a)
If…required as a result of [Plaintiff]’s specific and
unique use of the Premises…[Plaintiff] shall be fully responsible…
(b)
If…not the result of the specific and unique use of the
Premises…[Plaintiff] shall pay…an amount equal to 1/144th of the
portion of such costs reasonably attributable to the premises.
(FAC
Exh. A ¶ 2.3)
[Plaintiff] has been
advised by [A&E] and/or Brokers to satisfy itself with respect to the size
and condition of the Premises (including but not limited to the electrical,
HVAC, and fire systems, security, environmental aspects, and compliance with Applicable
Requirements and the Americans with Disabilities Act), and their suitability
for [Plaintiff]’s intended use . . . [Plaintiff] has made such investigation as
it deems necessary with reference to such matters and assumes all
responsibility therefore as the same relate to the occupancy of the Premises.
(FAC
Exh. A ¶ 2.4)
[Plaintiff] shall, at
[Plaintiff]’s sole expense, fully, diligently, and in a timely manner,
materially comply with all Applicable Requirements, the requirements of any
applicable fire insurance underwriter or rating bureau, and the recommendations
of Lessor’s engineers and/or consultant which relate in any manner to such
Requirements, without regard to whether said Requirements are now in effect or
become effective after the start date. [Plaintiff] shall, within 10 days after
receipt of [A&E]’s written request, provide [A&E] with copies of al
permits and other documents and other information evidencing [Plaintiff]’s
compliance with any Applicable Requirements specified by [A&E], and shall
immediately upon receipt notify [A&E] in writing (with any copies of an
documents involved) of any threatened or actual claim, notice, citation,
warning, complaint, or report pertaining to or involving the failure of
[Plaintiff] or the Premises to comply with any Applicable Requirements.
Likewise, [Plaintiff] shall immediately give notice to [A&E] of (i) any
water damage to the premises…(ii) any mustiness or other odors that might
indicate the presence of mold at the Premises.
(FAC
Exh. A ¶ 6.3)
First COA - Breach of Contract – Overruled
A&E
demurs to the first cause of action, arguing that Plaintiff fails to state
facts sufficient to state a claim. A&E argues that Plaintiff’s allegations
of breach are directly contradicted by the terms of the Lease. A&E reasons
that because the Lease disavows any liability for specific use of the Premises
as a rehabilitation facility, Plaintiff’s claim for breach of contract cannot
stand.
While
the allegations of a complaint must be accepted as true for purposes of
demurrer, the facts appearing in exhibits attached to the complaint will also
be accepted as true, and, if contrary to the allegations in the pleading, will
be given precedence. (Moran v. Prime Healthcare Management, Inc. (2016)
3 Cal.App.5th 1131, 1145-46.)
A&E’s
argument that the terms of the Lease are contrary to Plaintiff’s allegations is
unpersuasive. Alongside the defects which caused the facility to be shut down, Plaintiff
also alleges the following violations of their quiet enjoyment of the property:
·
Failing to cure several defects at 8140 Sunland that are
necessary to operate its intended use on the Property;
·
Failing to address and abate numerous rat and maggot
infestations at the Property;
·
Failing to address and abate nuisances created by
neighboring tenants;
·
Failing to address unauthorized trailers in A&E’s
shared parking lot with other sites;
·
Failing to address homelessness in the shared parking lot,
creating an unsafe condition for The Teen Project, its employees, residents,
and invitees;
·
Failing to repay costs related to The Teen Project’s
employees’ illnesses caused by insect/rodent infestations.
·
Failing to repay costs incurred by The Teen Project for the
complete replacement of HVAC systems and other tenant improvement costs funded
towards 8140 Sunland.
(FAC
¶ 15.)
None
of the above allegations are particular to Plaintiff’s use of the Premises as a
rehabilitation facility. Unless expressly provided otherwise, every lease
contains an implied covenant of quiet enjoyment, whereby the landlord impliedly
covenants that the tenant shall have quiet enjoyment and possession of the
premises. (Andrews v. Mobile Aire Estates (2005) 125 Cal.App.4th 578,
587.) Here, there is no provision in the Lease expressly providing that A&E
disclaims the warranty of quiet enjoyment. Paragraphs 2.3 and 2.4 disclaim the
warranty of fitness for Plaintiff’s use of the facility as a rehabilitation
facility. Plaintiff’s allegations that A&E breached the covenant of quite
enjoyment as applicable to any tenant is sufficient to sustain their cause of
action for breach of contract. This is true even if Plaintiff’s claim for
breach is partially based on A&E’s alleged failure to ensure Plaintiff
could operate their rehab facility. (See Poizner v. Fremont General Corp.
(2007) 148 Cal.App.4th 97, 119 [holding that a demurrer does not lie as to only
part of a cause of action.].)
Second,
the Court does not view the terms of the Lease as constituting facts which
inherently contradict Plaintiff’s claim. A&E argues that the Lease requires
Plaintiff to give notice of unfitness for a specific purpose within six months
of formation. (See Exh. A ¶ 2.3) A&E improperly categorizes the
existence of this requirement as evidence that Plaintiff provided no such
notice. Whether Plaintiff provided A&E notice within six months of
formation is a fact not readily apparent from the FAC nor its attached
exhibits. As such, the resolution of this dispute is inappropriate on demurrer.
Accordingly,
the demurrer to the first cause of action is OVERRULED.
Second COA – Rescission of Contract – Overruled
There
is a split in authorities regarding whether rescission is a cause of action or
a remedy. Some cases hold, “Rescission is not a cause of action; it is a
remedy.” (See, e.g., Nakash v. Superior Court (1987) 196 Cal.App.3d 59,
70.) Other cases hold, “A rescission is enforced by a civil action for relief
based on rescission.” (Southern Ins. Co. v. Workers' Comp. Appeals Bd.
(2017) 11 Cal.App.5th 961, 963-964; accord C.C.P, § 1692 [ “When a contract has
been rescinded … any party to the contract may seek relief based upon such
rescission by (a) bringing an action to recover any money or thing owing to him
… or (b) asserting such rescission by way of defense or cross-complaint”].)
Whether
it is a cause of action or a remedy, a party seeking rescission must allege “a
valid substantive ground for rescission.” (Wong v. Stoler (2015) 237
Cal.App.4th 1375, 1387.) Grounds for unilateral rescission include
where the “consideration for the obligation of the rescinding party fails, in
whole or in part, through the fault of the party as to whom he rescinds.”
(C.C.P. § 1689(b)(2).)
The
Court finds it matters little whether the claim for rescission is labeled as a
cause of action or as requested remedy. So long as Plaintiff has pled the
requisite facts, there appears to be little reason to require they plead rescission
as one or the other.
Here,
Plaintiff has alleged sufficient facts that the consideration (use of the
Premises) failed by virtue of A&E’s failure to observe the covenant of
quiet enjoyment. (See FAC ¶ 15.) Whether the failure to rectify the
various conditions alleged by Plaintiff constitutes failure of consideration is
a matter not resolvable upon demurrer. The same can be said as concerns
allegations that Plaintiff is unable to use the Premises as a rehabilitation
facility. In short, Plaintiff has pled facts sufficient to allege that
consideration for their payment of rent has failed such that grounds for rescission
are properly alleged.
Accordingly,
the demurrer to the second cause of action is OVERRULED.
Third COA – Declaratory Relief – Sustained without Leave to
Amend
“To qualify for declaratory relief, a party
would have to demonstrate its action presented two essential elements: (1) a
proper subject of declaratory relief, and (2) an actual controversy involving
justiciable questions relating to the party’s rights or obligations.” (Jolley v. Chase Home Finance, LLC (2013)
213 Cal.App.4th 872, 909, [quotation marks and brackets omitted].)
An action for declaratory relief requires
that the plaintiff seeking the relief allege the existence of an actual,
present controversy. (City of Cotati v. Cashman (2002) 29 Cal.4th
69, 80.) This requirement cannot be met in such a bootstrapping manner. (Id.)
In other words, Plaintiff cannot point to the current law suit as the basis for
injunctive relief.
Here,
Plaintiff’s cause of action for Declaratory Relief is entirely derivative of the
previous causes of action. Plaintiff asks the Court for a judicial
determination of the following:
a)
The Lease constitutes a fully binding and enforceable
agreement between the parties thereto;
b)
A&E are obligated under the Lease to provide The Teen
Project with a leased premises fit for the purpose and intent of the Lease;
c)
A&E breached the Lease by failing to provide a leased
premises that was fit for the purposes and intent of the Lease when it failed
to cure the default as set forth in The Teen Project’s December 6, 2023,
letter, and failed to pay for the Capital Expenditures necessary to bring the
Property into compliance.
d)
The Lease has now been rescinded or terminated; and
e)
The Teen Project is entitled to damages from A&E,
including attorneys’ fees and costs, according to proof, but no less than
$5,000,000.
The
Court finds that a determination on the merits of the causes of action for
Breach of Contract and Rescission would necessarily result in the determination
of all of the above requests. Plaintiff does not identify any matter which
requires judicial determination that falls outside the purview of their other
causes of action.
Accordingly,
the demurrer to the third cause of action is SUSTAINED with 20 days’ leave to
amend. Leave to amend is granted only insofar as Plaintiff can plead the
necessity of a judicial determination regarding matters outside the contract
dispute.
Motion to Strike
A&E
seeks to strike the various portions of Plaintiff’s FAC which allege that
A&E breached the material terms of the Lease. A&E’s argument is the
same as their argument on demurrer to the breach cause of action. A&E
argues that the facts presented by the Lease demonstrate that Plaintiff’s claim
of breach is materially false. The Court maintains that this argument is
unpersuasive. The Lease only demonstrates that Plaintiff had an obligation to
notify A&E within six months of any defect which rendered the Premises
unfit of its purposes. The Lease does not present any facts that Plaintiff
failed to do so. Further, this argument leaves unaddressed Plaintiff’s
allegations of breach of the implied warranty of quiet enjoyment. A&E
presents no argument as to why these allegations should be stricken as contrary
to law.
A&E
also moves to strike the cause of action for rescission, again arguing that it
is not a recognized cause of action. As previously stated, some courts in the
State of California have recognized and upheld a cause of action for rescission.
Further, Plaintiff has pled the necessary elements of such a claim. As such,
the Court does not view this cause of action to be in nonconformity with the
law.
Accordingly,
the motion to strike is DENIED in its entirety.
---
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
A&E Development
Corporation’s Demurrer and Motion to Strike came on
regularly for hearing on August 30, 2024, 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 FIRST AND SECOND CAUSES OF
ACTION IS OVERRULED.
THE DEMURRER TO THE THIRD CAUSE OF ACTION IS
SUSTAINED WITH 20 DAYS’ LEAVE TO AMEND.
THE MOTION TO STRIKE IS DENIED IN ITS ENTIRETY.
UNLESS ALL PARTIES WAIVE NOTICE, A&E TO GIVE
NOTICE.
IT IS SO
ORDERED.
DATE:
August 30, 2024 _______________________________
F.M.
TAVELMAN, Judge
Superior Court of California
County of
Los Angeles