Judge: Gail Killefer, Case: 23STCV08983, Date: 2023-11-17 Tentative Ruling

Case Number: 23STCV08983    Hearing Date: November 17, 2023    Dept: 37

HEARING DATE:                 Friday, November 17, 2023

CASE NUMBER:                   23STCV08983

CASE NAME:                        Ashara Youssef v. Kevin Y. Kanooni, et al.

MOVING PARTY:                 Defendants Kevin Y. Kanooni and K.P. Roberts & Associates

OPPOSING PARTY:             Plaintiff Ashraf Youssef

TRIAL DATE:                        Not Set

PROOF OF SERVICE:           OK

PROCEEDING:                      Demurrer with Motion to Strike

OPPOSITION:                        17 October 2023

REPLY:                                  30 October 2023

TENTATIVE:                         Defendants’ demurrer to the SAC is overruled. Defendants’ motion to strike is granted with leave to amend.

Background

 On April 24, 2023, Asharaf Youssef (“Plaintiff”) filed a Complaint against Kevin Y. Kanooni and K.P. Roberts & Associates (collectively “Defendants”) and Does 1 to 20.

Plaintiff filed a First Amended Complaint on June 16, 2023. By the parties’ stipulation, Plaintiff filed the operative Second Amended Complaint (“SAC”) on July 18, 2023. The SAC alleges three causes of action: (1) professional negligence – legal malpractice, (2) breach of fiduciary duty, and (3) breach of implied contract. The SAC alleges that Defendant’s professional negligence in an underlying action caused Plaintiff economic harm. (SAC ¶ 1.)

On November 2, 2023, the court granted Defendants’ motion to disqualify Plaintiff’s counsel.

On August 22, 2023, Defendants filed a demurrer with a motion to strike the SAC. Plaintiff filed opposing papers on October 17, 2023. Defendants filed a reply on October 30, 2023. The matter is now before the court.

Discussion

I.         Legal Standard

A.        Demurrer 

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, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)¿“To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.”¿(C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.)¿For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded.¿ (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.)¿A demurrer “does not admit contentions, deductions or conclusions of fact or law.”¿(Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)¿¿ 

B.        Motion to Strike 

¿Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof. (CCP, § 435(b)(1); CRC, rule 3.1322(b).) The court may, upon a motion or at any time in its discretion and upon terms it deems proper: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (CCP, § 436(a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [“Matter in a pleading which is not essential to the claim is surplusage; probative facts are surplusage and may be stricken out or disregarded”].)¿¿¿¿ 

C.        Leave to Amend 

“Where the defect raised by a motion to strike or by demurrer is reasonably capable of cure, leave to amend is routinely and liberally granted to give the plaintiff a chance to cure the defect in question.” (CLD Construction, Inc. v. City of San Ramon (2004) 120 Cal.App.4th 1141, 1146.) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.)¿¿¿ 

II.        Request for Judicial Notice

The Court may take judicial notice of records of any court of record of the United States. (Evid. Code, § 452(d)(2).) However, the court may only judicially notice the existence of the record, not that its contents are the truth. (Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1565.) 

Defendants request judicial notice of the following in support of their demurrer to the SAC:

1)     Plaintiff ASHRAF YOUSSEF’s substitution of attorney dated January 21, 2022 in the underlying action entitled Ashraf Youssef v. Malak A. Rezekalla, et al., Los Angeles Superior Court case no. 19TRCV00712 (hereinafter “underlying action”), a true and correct copy of which is attached hereto as EXHIBIT “A”.

2)     The Superior Court’s January 13, 2023 minute order regarding the January 13, 2023 voluntary settlement conference in the underlying action, a true and correct copy of which is attached hereto as EXHIBIT “B”.

Defendants’ request for judicial notice is granted.

Defendants request judicial notice of the following in support of their Motion to Strike the SAC:

1)     Plaintiff ASHRAF YOUSSEF’s response to request for civil harassment restraining orders, dated January 28, 2019, in the action entitled Malak Amin Rezekalla v. Ashraf Yousseff, LASC Case No. 19STR000275, a true and correct copy of which is attached hereto as EXHIBIT “A”.

Plaintiff objects to the above request for judicial notice on the basis that he does not allege that the amount in the promissory note is wrong, but that the amount in the complaint filed in the underlying action was wrong. Plaintiff asserts that Defendants are asking the court to take judicial notice of the Response filed by another attorney, Matthew Barhoma, on behalf of Plaintiff, in a separate civil action regarding the amount stated in the promissory note. Therefore, what was stated in the promissory note is not at issue but rather what was stated in the complaint in the underlying action.

The court disagrees with Plaintiff’s assertion that the court cannot take judicial notice of the Plaintiff’s response to a civil harassment restraining order because the response contains a copy of a promissory note at issue alleging that the amount due is $425,000.00 with the interest rate being $75,000.00. This is the same promissory note that was attached as “Exhibit B” to Plaintiff’s original Complaint in this action. (Compl. ¶ 12, Ex. B.)

In testing the sufficiency of the complaint, the court must assume the truth of (1) the properly pleaded factual allegations; (2) facts that can be reasonably inferred from those expressly pleaded; and (3) judicially noticed matters. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

Therefore, the court finds that the Plaintiff’s response to the request for a civil harassment restraining order is the proper subject for judicial notice and the court grants the Defendants’ request.

III.      Demurrer[1]

This malpractice action stems from the Defendants' alleged failure to state the correct loan amount in a complaint in the underlying action. The SAC alleges that Plaintiff’s wife notified Defendant Kanooni that Plaintiff had loaned a total of $350,000.00 to Mr. Malak A. Rezekalla, with an interest of $75,000.00 but that Defendant Kanooni negligently stated that the incorrect amount as being $425,000.00, plus interest of $75,000.00. (SAC ¶¶ 11-14, Ex. A.)

On January 21, 2022, Plaintiff substituted new counsel, Jerome A. Clay, who made a request to continue the trial and reopen discovery past the February 22, 2022, discovery cut-off, but the request was denied. (SAC ¶¶ 19, 20.) It was not until the January 13, 2023, settlement conference that Plaintiff discovered Defendants’ error, allegedly forcing Plaintiff to negotiate a lower settlement amount. (SAC ¶¶ 21, 23.) Plaintiff filed this action on April 24, 2023.

Defendants now demurrer to the SAC on the basis that it is barred by the applicable statute of limitations.

            A.        Plaintiff’s Claims are Barred by the Applicable Statute of Limitations

“In a legal malpractice action arising from a civil proceeding, the elements are (1) the duty of the attorney to use such skill, prudence, and diligence as members of his or her profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the breach and the resulting injury; and (4) actual loss or damage resulting from the attorney's negligence. [Citations.]” (Jones v. Whisenand (2017) 8 Cal.App.5th 543, 550.)

“‘The elements of a cause of action for breach of fiduciary duty are the existence of a fiduciary relationship, breach of fiduciary duty, and damages.’ ” (Safechuck v. MJJ Productions, Inc. (2023) 94 Cal.App.5th 675, 698.)

“The elements of a breach of oral contract cause are: ‘(1) existence of the contract; (2) plaintiff's performance or excuse for nonperformance; (3) defendant's breach; and (4) damages to plaintiff as a result of the breach.’ [Citations.]” (Aton Center, Inc. v. United Healthcare Ins. Co. (2023) 93 Cal.App.5th 1214, 1230.

Defendants demur to all three causes of action alleged in the SAC on the grounds that they are barred by the applicable statute of limitations.

CCP § 340.6 states:

An action against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performance of professional services shall be commenced within one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the facts constituting the wrongful act or omission, or four years from the date of the wrongful act or omission, whichever occurs first.

Here, the SAC alleges that “[o]n January 13, 2023, during the settlement conference, Plaintiff discovered that due to the Defendants’ negligence and carelessness, Plaintiff’s Complaint was not properly presented by Defendant KANOONI against Mr. Rezekalla.” (SAC ¶ 21.) Defendants assert that Mr. Jerome Clay, as Plaintiff’s new counsel in the underlying action, should have discovered Defendants’ error through reasonable diligence. Defendants further assert that Plaintiff fails to allege facts as to why he could not have discovered the error prior to January 13, 2023.

In opposition, Plaintiff asserts that his claims are not time-barred because his claims did not accrue until the January 13, 2023, settlement conference, when he sustained the injury by having to negotiate a lower settlement amount. (SAC ¶¶ 21, 23.)  In other words, while Plaintiff may have discovered Defendants’ error at an earlier time, Plaintiff did not suffer injury until the January 13, 2023, settlement conference when Plaintiff had to negotiate for a lower settlement amount due to Defendants' alleged error. “As a general rule, a statute of limitations accrues when the act occurs which gives rise to the claim [citation], that is, when ‘the plaintiff sustains actual and appreciable harm. [Citation.] Any ‘manifest and palpable’ injury will commence the statutory period. [Citation.]’ [Citation.]” (Marin Healthcare Dist. v. Sutter Health (2002) 103 Cal.App.4th 861, 879.)

Plaintiff claims he did not discover he had been damaged by Defendants’ conduct until January 13, 2023, such that the statute of limitations was tolled.

Under section 340.6, the one-year limitations period commences when the plaintiff actually or constructively discovers the facts of the wrongful act or omission, but the period is tolled until the plaintiff sustains actual injury. That is to say, the statute of limitations will not run during the time the plaintiff cannot bring a cause of action for damages from professional negligence.

(Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 751.)

The court agrees. 

Defendants’ demurrer to the SAC on the ground that Plaintiff’s claims are time-barred is overruled.

IV.       Motion to Strike

Defendants seek to strike the following from Plaintiff’s SAC:

1)     Paragraph 14 of the SAC, which states:

“Notwithstanding, in the Complaint, Defendant KANOONI negligently stated the incorrect amount of $425,000.00, plus interest amount of $75,000.”

2)     Paragraph 27A of the SAC, which states:

“Failed to state the correct amount loaned to Mr. Rezekalla, despite Mariam notifying Defendant KANOONI of the right amount before filing the Complaint.”

3)     Paragraph 33A of the SAC, which states:

“Failed to state the correct amount loaned to Mr. Rezekalla, despite Mariam notifying Defendant KANOONI of the right amount before filing the Complaint.”

4)     Paragraph 37A of the SAC, which states:

Failed to state the correct amount loaned to Mr. Rezekalla, despite Mariam notifying Defendant KANOONI of the right amount before filing the Complaint.”

Defendants seek to strike the portions of the SAC above on the basis that they are false and improper because $425,000.00 is the correct amount on the promissory note based on Plaintiff’s response to a separate civil harassment restraining order.  In that action, Plaintiff attested under penalty of perjury that the information was true and correct, including the statement that Plaintiff paid Mr. Malak about $425,000.000, which was reduced in writing in the attached promissory note. (See RJN Ex. A at p. 6.)

Plaintiff states that the issue is not that Defendants stated the wrong amount on the promissory note, but that Defendants stated the wrong amount in the complaint in the underlying action: they wrote $425,000.00 plus interest of $75,000.00 as amount owed, rather than the correct amount of $350,000.00 plus interest of $75,000.00. (SAC ¶¶ 13, 14.)

A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (CCP §§ 430.30, 430.70.)  “The demurrer tests the pleading alone, not evidence or other matters; defendants cannot set forth allegations of fact in their demurrers which, if true, would defeat plaintiff's complaint.” (Fuhrman v. California Satellite Systems (1986) 179 Cal.App.3d 408, 422–423 disapproved on other grounds by Silberg v. Anderson (1990) 50 Cal.3d 205.)

Defendants assert that Exhibit B to the original Complaint filed in this action, is a copy of the promissory note at issue and that it is the same promissory note attached to RJN Exhibit A, stating the principal amount due is $425,000.00 and the interest rate is $75,000.00. (RJN Ex. A; Complaint Ex. B.) A copy of the promissory note is not included in Plaintiff’s FAC or SAC.

“Under the sham pleading doctrine, plaintiffs are precluded from amending complaints to omit harmful allegations, without explanation, from previous complaints to avoid attacks raised in demurrers or motions for summary judgment.” (Deveny v. Entropin, Inc. (2006) 139 Cal.App.4th 408, 425.) Here, Plaintiff cannot amend the complaint to hide the fact that the promissory notes state that the correct amount due is $425,000.00 with $75,000.00 owed in interest, which is what Plaintiff alleges Defendants wrote in the complaint in the underlying action.

“The court may examine the prior complaint to ascertain whether the amended complaint is merely a sham.’ [Citation.] ... Moreover, any inconsistencies with prior pleadings must be explained; if the pleader fails to do so, the court may disregard the inconsistent allegations. [Citation.] Accordingly, a court is ‘not bound to accept as true allegations contrary to factual allegations in former pleading in the same case.’ [Citation.] [Citation.]” (Larson v. UHS of Rancho Springs, Inc. (2014) 230 Cal.App.4th 336, 343.)

Plaintiff fails to explain why the amount stated in the promissory note is not included in the SAC and why Defendants were negligent in relying on the amount stated in the promissory note as being the amount loaned rather than relying on what Plaintiff’s wife, Mariam Ayoub, stated was the correct loan amount, in an action premised on breach of promissory note. (SAC ¶¶ 13, 17.)

Based on the above, the court grants the Defendants’ motion to strike.

Conclusion

Defendants’ demurrer to the SAC is overruled. Defendants’ motion to strike is granted with leave to amend.

Defendants to give notice.