Judge: Gail Killefer, Case: 20STCV40408, Date: 2022-12-20 Tentative Ruling
Case Number: 20STCV40408 Hearing Date: December 20, 2022 Dept: 37
HEARING DATE: December 20, 2022
CASE NUMBER: 20STCV40408
CASE NAME: Vadim Levotman v. Alexander Tishelman, et al.
MOVING PARTIES: Defendants, Alexander Tishelman and
TF Trust
OPPOSING
PARTY: Plaintiff/Cross-Defendant,
Vadim Levotman
TRIAL DATE: January 9, 2023
PROOF
OF SERVICE: OK
PROCEEDING: Defendant’s Demurrer to First
Amended Complaint
OPPOSITION: November 28, 2022
REPLY: December 6,
2022
TENTATIVE: Moving Defendants’ demurrer is sustained. Plaintiff is
granted 30 days leave to amend. Moving Defendants are to give notice.
Background
This action arises in connection with the sale of real
property located at 3943 Fredonia Drive, Los Angeles, California (the
“Property”). Plaintiff Vadim Levotman (“Levotman”) alleges that Defendant
Alexander Tishelman (“Tishelman”) failed to perform on an Option Agreement
dated August 16, 2019 (the “Agreement”) by failing to put the Property on the
market and disbursing 50 percent (50%) of the profits to Plaintiff as agreed.
The Complaint seeks a judgment granting sale of the Property.
Plaintiff’s Complaint, filed October 21, 2020, alleges the
following causes of action: (1) breach of written contract, (2) specific
performance, and (3) declaratory relief, with request for temporary,
preliminary and permanent injunctive relief.
On September 28, 2022, the court granted Plaintiff leave to
amend the Complaint. The operative First Amended Complaint (“FAC”) alleges the
following causes of action: (1) breach of written contract, (2) specific
performance, (3) declaratory relief, with request for temporary, preliminary
and permanent injunctive relief, and (4) violation of Penal Code § 496.
Defendants Tishelman and TF Trust (“Moving Defendants”) now
demur to the fourth cause of action of the FAC. Plaintiff opposes the motion.
Discussion
Request
for Judicial Notice
Moving
Defendants request judicial notice of the following in support of their demurrer:
Levotman
also requests judicial notice of the following in opposition to the demurrer:
Moving Defendants’
request is granted. The existence and legal significance of these documents are
proper matters for judicial notice. (Evidence Code § 452 (c), (d), (h).) However, the court may not take judicial notice of the truth of
the contents of the documents. (Herrera v. Deutsche Bank National
Trust Co. (2011) 196 Cal.App.4th 1366, 1375.) Documents are only
judicially noticeable to show their existence and what orders were made.
The truth of the facts and findings within the documents are not judicially
noticeable. (Lockley v. Law Office of Cantrell, Green, Pekich, Cruz
& McCort (2001) 91 Cal.App.4th 875, 885.)
Moving
Defendants further object to Levotman’s first request for judicial notice,
contending “there is no basis in statute to judicially notice,” as the attached
article “does not appear” to be noticeable under Evidence Code §§ 450, 452. The
court agrees. Levotman’s request as to Exhibit 1 is denied as Plaintiff has not
introduced a judicially noticeable exhibit, nor has provided sufficient grounds
for judicial notice of this document.
Levotman’s
second request for judicial notice is granted. The existence and legal
significance of these documents are proper matters for judicial notice.
(Evidence Code § 452(c), (d), (h).)
I.
Meet
and Confer Efforts
Moving Defendants submit the declaration of their counsel, Christopher
Ritter (“Ritter”), to demonstrate compliance with statutory meet and confer
requirements. Ritter attests that on October 25, 2022, the parties met and
conferred telephonically but did not reach an agreement. (Ritter Decl. ¶¶ 2-3.)
The Ritter Declaration is sufficient for purposes of CCP § 430.41. The court finds that the meet
and confer efforts of Moving Defendants are sufficient prior to filing the
instant demurrers and motions to strike.
(CCP § 430.41.)
II.
Legal
Standard
A
demurrer is an objection to a pleading, the grounds for which are apparent from
either the face of the complaint or a matter of which the court may take
judicial notice. (CCP § 430.30(a); see
also Blank v. Kirwan (1985) 39 Cal.3d
311, 318.) The purpose of a demurrer is
to challenge the sufficiency of a pleading “by raising questions of law.” (Postley
v. Harvey (1984) 153 Cal.App.3d 280, 286.)
The court “treat[s] the demurrer as admitting all material facts
properly pleaded, but not contentions, deductions or conclusions of fact or
law. . . .” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.) “In the construction of a pleading, for the
purpose of determining its effect, its allegations must be liberally construed,
with a view to substantial justice between the parties.” (CCP § 452; see also Stevens v. Sup. Ct. (1999) 75 Cal.App.4th 594, 601.) “When a court evaluates a complaint, the
plaintiff is entitled to reasonable inferences from the facts pled.” (Duval
v. Board of Trustees (2001) 93 Cal.App.4th 902, 906.)
The
general rule is that the plaintiff need only allege ultimate facts, not
evidentiary facts. (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550.) “All that is required of a plaintiff, as a
matter of pleading, even as against a special demurrer, is that his complaint
set forth the essential facts of the case with reasonable precision and with
sufficient particularity to acquaint the defendant with the nature, source and
extent of his cause of action.” (Rannard v. Lockheed Aircraft Corp.
(1945) 26 Cal.2d 149, 156-157.)
“[D]emurrers for uncertainty are disfavored and are granted only if the
pleading is so incomprehensible that a defendant cannot reasonably
respond.” (Mahan v. Charles W. Chan Ins. Agency, Inc. (2017) 14 Cal.App.5th
841, 848, fn. 3, citing Lickiss v. Fin.
Indus. Regulatory Auth. (2012) 208 Cal.App.4th 1125, 1135.) In addition, even where a complaint is in
some respects uncertain, courts strictly construe a demurrer for uncertainty
“because ambiguities can be clarified under modern discovery procedures.” (Khoury
v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.)
Demurrers do not lie as to only parts
of causes of action where some valid claim is alleged but “must dispose of an
entire cause of action to be sustained.”
(Poizner v. Fremont General Corp. (2007)
148 Cal.App.4th 97, 119.) “Generally it is an abuse of
discretion to sustain a demurrer without leave to amend if there is any
reasonable possibility that the defect can be cured by amendment.” (Goodman
v. Kennedy (1976) 18 Cal.3d 335, 349.)
III.
Analysis
A.
Fourth Cause of Action: Declaratory Relief
Penal Code § 496(a)
prohibits individuals from buying or receiving “any property that has been
stolen or that has been obtained in any manner constituting theft or extortion,
knowing the property to be so stolen or obtained. . . .” Subdivision (b)
prohibits swap meet vendors and persons “whose principal business is dealing
in, or collecting, merchandise or personal property, and every agent,
employee, or representative of that person” from buying or receiving any
property of a value in excess of $950 that has been stolen. California courts
have recognized that Penal Code § 496(c) provides a private right of action for
“[a]ny person who has been injured” by the sale of stolen property.
(Citizens of Humanity, LLC v. Costco Wholesale Corp. (2009) 171
Cal.App.4th 1, 17, disapproved on unrelated grounds in Kwikset
Corp. v. Superior Court (2011) 51 Cal.4th 310, 337.)
Moving Defendants
contend that the fourth cause of action of the FAC under Penal Code § 496(c) is
insufficiently pled because it fails to specifically allege any actionable
conduct by Moving Defendants under this section. (Demurrer, 7-8.) Specifically,
Moving Defendants contend “[t]he fact that Plaintiff paid Defendants money for
a one-half interest in the Property, without more, does not establish that
Defendants obtained the money or Property in a ‘manner constituting theft or extortion.’”
(Id.) Moving Defendants further point to paragraphs 41 and 42 of the
FAC, contending that any alleged defrauding for failure to pay rents, transfers
to other Defendants, or refusal of the sale of the Property do not amount to
“receiving stolen property” as required under Penal Code § 496. (Demurrer, 8.)
Further, Moving
Defendants contend Plaintiff’s new allegations of fraud in the fourth cause of
action do not meet the heightened pleading standard for fraud claims. (Dem.,
8.) “[T]he FAC includes no facts regarding Tishelman’s representations to
Plaintiff regarding rents or how Plaintiff came to understand that he was owed
50% of rents,” and Moving Defendants also contend Plaintiff failed to identify
any portion of an agreement between the parties which spoke to such a division
of collected rents. (Dem., 9.)
Lastly, Moving
Defendants contend Plaintiff’s cited authority, Siry Investment, L.P.
v. Farkhondehpour (2022) 13 Cal.5th 333, does not support Plaintiff’s
claims here. (Dem., 10.) Moving Defendants specify that “the alleged ‘stolen
property in this case’ is the option to purchase an undivided one-half interest
in the Property and right to sell the Property under paragraphs 3 and 4” of
their agreement. (Id.) “Plaintiff cited no authority indicating that
payments toward an option to purchase an interest in a Property, or that
transfer of one’s own property, qualifies as ‘stolen property’ under Penal Code
§ 496.” (Id.)
In Siry, a limited partner sued the remaining limited
partners and general partner, alleging that he had been underpaid pursuant to
the partnership agreement, bringing causes of action for an accounting,
dissolution and winding up of the partnership, damages for breach of the
agreement and damages for breach of fiduciary duty. (Id. at 340-341.)
After multiple appeals, the court entered judgment against defendants,
including compensatory damages, treble damages and attorney’s fees. (Id.)
Plaintiff was awarded attorney’s fees under Penal Code § 496 and CCP § 1029.8
and Defendants appealed. (Id.) The Court of Appeal reversed the judgment
and found 496(c) inapplicable. (Id. at 343.) However, the Supreme Court
of California granted review and reversed the Court of Appeal’s decision,
allowing for treble damages and attorney fees under section 496(c) when
property “has been obtained in any manner constituting theft.” (Id. at
339.)
In opposition, Plaintiff contends he “has plainly pled a
violation of Penal Code section 496 and request for treble damages. Plaintiff
asserts that while this case has been pending, Tishelman transferred the
Property to the [Trust] to defraud [Levotman] and obstruct him from exercising
the option.” (Opposition, 4.) Plaintiff further makes the conclusory claim that
relief under section 496 is available to Plaintiff “because Levotman has paid money or property
to Tishelman pursuant to the Option Agreement,” referencing paragraphs 40-56 of
the FAC. (Opp., 4.) However, Plaintiff fails to explain how the paying of
monies pursuant to an agreement between the parties constitutes theft in any
way under section 496. Lastly, Plaintiff references unpublished opinions to
conclude “the few Courts to evaluate the issue have held a 496 claim should not
be dismissed on the pleadings, and that such a claim is not the same as one for
common law fraud.” (Opp., 5.)
In reply, Moving Defendants contend Plaintiff has failed to
show any property has been stolen in any manner meriting treble damages under
Penal Code section 496. (Reply, 3.) Moving Defendants further contend
“there are no facts that establish Plaintiff owned even a
portion of the Property, only that he had an option to purchase it and sell it.
It is undisputed that Plaintiff paid only $150,000 — not the full $750,000
option price. The Property therefore could not have been taken
from him in a ‘manner constituting theft’ as he did not own it.” (Id.)
Moving Defendants
further explain that any alleged transfer of the Property from Tishelman to TF
Trust does not prevent Plaintiff from exercising his option, is
“unsupported by the
pleaded facts and contradicted by the Agreement which explicitly preserves the
Option in the event of Property transfer. If, upon paying the full price
and exercising the option to purchase, Defendants did not convey the Property
to Plaintiff by reason of the Property being held by TF Trust, at that point, a
California Penal Code § 496 (c) claim would be warranted. As that is not the
case here, the claim fails.” (Reply,
5.)
Moving Defendants
here also correctly contend Plaintiff has failed to plead sufficient facts
showing entitlement to a portion of the collected rents, as it is “undisputed
the Property has not been sold; therefore, Plaintiff is not owed any proceeds
under the Agreement.” (Reply, 5.) Lastly, Moving Defendants correctly contend
Plaintiff has failed to cite any authority for the contention that treble
damages are warranted for an alleged failure to comply with an option
agreement. (Reply, 5-6.)
Here, the FAC’s
fourth cause of action includes pleadings regarding Defendants’ alleged
transfer of the Property to Trust “to defraud [Levotman] and prevent him from
exercising the option.” (FAC ¶ 41.) However, Plaintiff has failed to allege how
the transfer of the Property would prevent him from exercising the
purchase/sale option, and Plaintiff has further failed to allege sufficient
facts showing he has paid the full amount, as agreed, to exercise the Option
Agreement. Further review of the fourth cause of action shows several
conclusory contentions regarding an attempt to “steal” the partial amount
Plaintiff has already paid towards the option, or an attempt to “defraud”
Plaintiff by failing to pay him 50% of collected rents. (FAC ¶¶ 44-52.)
However, Plaintiff has only paid a portion of the purchase price for the
option, and Plaintiff has failed to point to a section of the Agreement which
entitles him to collected rents under current circumstances—Plaintiff’s mere
conclusory statements will not be taken as true at the demurrer stage and do
not sufficiently merit treble damages against Moving Defendants.
Given the foregoing,
the court finds that the FAC’s fourth cause of action is insufficiently pled.
As discussed above, the FAC fails to allege how any property was stolen, and
further fails to allege how any property was taken in a manner constituting
theft—Plaintiff’s FAC only points to partial payment towards an option he has
yet to exercise, and conclusions regarding rents he has not shown he is
entitled to. Such allegations are insufficient to state a cause of action for
violation of Penal Code § 496.
Accordingly, Moving
Defendants’ demurrer to the fourth cause of action is sustained.
Conclusion
Moving Defendants’ demurrer is sustained. Plaintiff is
granted 30 days leave to amend. Moving Defendants are to give notice.