Judge: Gail Killefer, Case: 23STCV15841, Date: 2024-10-22 Tentative Ruling

Case Number: 23STCV15841    Hearing Date: October 22, 2024    Dept: 37

HEARING DATE:                 Tuesday, October 22, 2024

CASE NUMBER:                   23STCV15841

CASE NAME:                        Tannaz Fotowatjah Jah v. YBM Properties, Inc.

MOVING PARTY:                 Defendant YBM Properties, Inc.

OPPOSING PARTY:             Plaintiff Tannaz Fotowatjah

TRIAL DATE:                        Not set.

PROOF OF SERVICE:           OK

PROCEEDING:                      Demurrer to FAC

OPPOSITION:                        07 October 2024

REPLY:                                  14 October 2014

TENTATIVE:                         Defendant YBM Properties, Inc.’s demurrer is sustained with leave to amend. Plaintiff is granted 10 days leave to amend. The court sets a Non-Appearance OSC RE: Filing of Amended Complaint for November 8, 2024, at 8:30 a.m. Defendant to give notice.

Background

This action arises out of a ceiling collapse that injured the tenant of a residential unit. On July 7, 2023, Tannaz Fotowatjah (“Plaintiff”) filed a Complaint against YBM Properties, Inc. (“YBM Inc.”) .; and Does 1 to 50. Doe 1 has been identified as YBM Danur, LLC (“YBM LLC”).

The operative First Amended Complaint (“FAC”) alleges six causes of action:

1)     General Negligence;

2)     Premises Liability;

3)     Common Counts;

4)     Breach of Contact;  and

5)     Brech of Warranty of Habitability.

Defendant YBM Inc. filed a demurrer to the FAC. Plaintiff opposes the demurrer. The matter is now before the court.

request for JUDICIAL notice

The court may take judicial notice of “official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States,” “[r]ecords of (1) any court of this state or (2) any court of record of the United States or of any state of the United States,” and “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Evid. Code § 452, subds. (c), (d), and (h).) “Taking judicial notice of a document is not the same as accepting the truth of its contents or accepting a particular interpretation of its meaning.” (Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374.)

Defendant YBM Inc. requests judicial notice of the following:

1)     Exhibit 1: The residential lease agreement entered into between Plaintiff and the property Owner YBM Danur, LLC executed by both parties on March 15, 2018, including each attachment to the lease agreement and the facts, statements and propositions made therein.

As the Residential Lease Agreement is part of the FAC, Defendant YBM Inc.’s request for judicial notice is granted.

Demurrer[1]

I.         Legal Standard

Where pleadings are defective, a party may raise the defect by way of a demurrer. (Coyne v. Krempels (1950) 36 Cal.2d 257, 262.) A demurrer tests the sufficiency of a pleading, and the grounds for a demurrer must appear on the face of the pleading or from judicially noticeable matters.¿ (CCP, § 430.30(a); Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) In evaluating a demurrer, the court accepts the complainant’s properly pled facts as true and ignores contentions, deductions, and conclusory statements. (Daar v. Yellow Cab Co. (1976) 67 Cal.2d 695, 713; Serrano v. Priest (1971) 5 Cal.3d 584, 591.) Moreover, the court does not consider whether a plaintiff will be able to prove the allegations or the possible difficulty in making such proof. (Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 604.) 

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.)¿ The burden is on the complainant to show the Court that a pleading can be amended successfully. (Ibid.)

II.        Discussion

A.        Summary of Allegations in FAC

The FAC alleges that Defendant YBM Inc. and YBM LLC are related to each other  and have an agency relationship. (FAC, ¶¶ 11, 5.) Plaintiff entered into a Residential Lease Agreement (the “Lease”) with YBM LLC. (Id., ¶ 11, Ex. A.) Plaintiff alleges that the term “Lessor” under the Lease includes both Defendants YBM Inc. and YBM LLC  and “Plaintiff is informed and believes that the Defendants are one and the same for the purposes of this complaint.” (Id., ¶ 39.) The FAC further alleges that YBM Inc. along with YBM LLC acted as the landlords of the unit. (Id., ¶ 34.) The FAC alleges that each Defendant “owned, controlled, maintained, and leased” the subject unit to Plaintiff. (Id., ¶ 48.)

On May 25, 2021 and December 18, 2021, Plaintiff reported ceiling cracks appearing over her bed to Defendant YBM Inc. (FAC, ¶¶ 18, 19.) Defendants took no action, and the ceiling collapsed on December 23, 2021. (Id., ¶ 28.) Plaintiff alleges she supplied a rent deposit that was supposed to be returned when she moved out. (Id.) Plaintiff made a demand on YBM Inc. as agent of YBM LLC for return of the rent deposit, in the sum of $1,350.00, the deposit has not been returned. (Id., ¶ 35.)

Plaintiff alleges that her monthly rent was collected electronically by Defendant YBM Inc. on behalf of both Defendants and communications were with Defendant YBM Inc., including notice of the need to inspect and repair the ceiling. (Id., ¶ 39.)

Accordingly, both Defendants are liable for “failing to maintain the premises in a reasonable manner to protect the safety of the tenants from an unreasonable risk of harm from a failing ceiling system after warning to the Defendants[.]” (FAC, ¶ 39.) Defendants breached the Lease by failing to inspect and repair the ceiling after being given reasonable notice and failing to refund the deposit owed to Plaintiff after the ceiling collapses. (Id., ¶¶ 40, 41.)

Defendant YBM Inc. now demurs to the third, fourth, and fifth causes of action on the basis there are no allegation of an agency relationship between YBM Inc. and YBM LLC.

B.        Third  and Fourth Causes of Action – Common Counts and Breach of Contract

In California, it has long been settled the allegation of claims using common counts is good against special or general demurrers. [Citation.] The only essential allegations of a common count are ‘(1) the statement of indebtedness in a certain sum, (2) the consideration, i.e., goods sold, work done, etc., and (3) nonpayment.’ [Citations.] A cause of action for money had and received is stated if it is alleged the defendant ‘is indebted to the plaintiff in a certain sum ‘for money had and received by the defendant for the use of the plaintiff.’ ”

(Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460 [internal citations omitted].)

The elements of a claim for breach of contract are: “(1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal. 4th 811, 821.) In addition, the complaint must demonstrate damages proximately caused by the breach. (St. Paul Ins. v. American Dynasty (2002) 101 Cal.App.4th 1038, 1060.) Furthermore, “the complaint must [also] indicate on its face whether the contract is written, oral, or implied by conduct.” (Otworth v. Southern Pac. Transportation Co. (1985) 166 Cal.App.3d 452, 458-59 citing CCP, § 430.10(g).)

Defendant YBM Inc. asserts there is no Lease between it and Plaintiffs, as the Lease states the agreement is only with Defendant YBM LLC. (Compl., Ex. A; RJN, Ex. 1.) Therefore, the third and fourth cause of action fail. The court agrees that the FAC fails to allege that YBM Inc. as the agent of YBM LLC can be held liable for the breaches of its principal.

“[A]n agent is ordinarily not liable on the contract when he acts on behalf of a disclosed principal.” (Dones v. Life Insurance Company of North America (2020) 55 Cal.App.5th 665, 689 citing Stoiber v. Honeychuck (1980) 101 Cal.App.3d 903, 929, 162; see also Filippo Industries, Inc. v. Sun Ins. Co. of New York (1999) 74 Cal.App.4th 1429, 1443 [“The only contract in the lawsuit is the insurance policy. Sun was a disclosed principal and subject to liability for its agent's actions and it is not disputed that McGee was the agent for Sun. Thus, McGee cannot be held liable for Sun's breach of the contract and concomitant duty of good faith.”].)

Plaintiff fails to show that YBM Inc. did not disclose the identity of YBM LLC such that Plaintiff did not know if was entering into a contract with YBM LLC. Therefore, under agency principles, YBM Inc. is not liable for breaches under the Lease when acting as an agent of YB MLCC.

In order for an agent to avoid personal liability on a contract negotiated in his principal's behalf, he must disclose not only that he is an agent but also the identity of his principal, regardless of whether the third person might have known that the agent was acting in a representative capacity. It is not the third person's duty to seek out the identity of the principal; rather, the duty to disclose the identity of the principal is on the agent. The disclosure of an agency is not complete for the purpose of relieving the *796 agent from personal liability unless it embraces the name of the principal; without that, the party dealing with the agent may understand that he intended to pledge his personal liability and responsibility in support of the contract and for its performance. Furthermore, the use of a tradename is not necessarily a sufficient disclosure of the identity of the principal and the fact of agency so as to protect the agent against personal liability.

(W. W. Leasing Unlimited v. Commercial Standard Title Ins. Co. (1983) 149 Cal.App.3d 792, 795–796.)

While the FAC alleges that YBM Inc. is an agent of YBM LLC, the FAC fails to allege that it did not know that YBM Inc. was an agent of YBM LLC, such that YBM Inc. can be held separately liable for any breaches under the Lease. Moreover, the FAC fails to allege that when YBM Inc. received the security deposit it was acting for its own benefit, rather than that of YBM LLC, such that it should be liable for refusing to return the security deposit. In other words, Plaintiff fails to allege that YBM Inc. owed Plaintiff certain legal obligations that arose separately from the Lease agreement. Plaintiff also fails to show that the under the Lease, YBM Inc. was a party rather than a mere agent of YBM LLC. (See Banis Restaurant Design, Inc. v. Serrano (2005) 134 Cal.App.4th 1035, 1044–1045 [“Facts appearing in exhibits attached to a complaint will also be accepted as true and will be given precedence over any contrary allegations in the pleadings.”].)

Moreover, Plaintiff fails to allege that YBM Inc. can be held liable as the alter ego of YBM, LLC because a unity  of interest exits between such that they are not separate entities, and an inequitable result would occur if YBM Inc. and YBM LLC are treated as separate entities. (See Leek v. Cooper (2011) 194 Cal.App.4th 399, 417.) The fact that YBM Inc. and YBM LLC share the same office is irrelevant to the agency analysis and question of agent liability.

Therefore, because Plaintiff fails to show that YBM Inc. can be held liable for breaches of the contract by YBM LLC as a matter of law, the demurrer to the third and fourth causes of action is sustained with leave to amend.

C.        Fifth Cause of Action – Breach of Warranty of Habitability

To state a claim for breach of the implied warranty of habitability, a plaintiff must show: (1) the existence of a materially defective condition affecting habitability; (2) notice to the landlord of the condition within a reasonable time after the tenant's discovery of the condition; and (3) the landlord was given a reasonable time to correct the deficiency and resulting damages. (See Erlach v. Sierra Asset Servicing, LLC (2014) 226 Cal.App.4th 1281, 1297.) “The California Supreme Court has held that because “under contemporary conditions, public policy compels landlords to bear the primary responsibility for maintaining safe, clean and habitable housing in our state,” there is a warranty of habitability implied in residential leases in California.” (Id., at p. 1296.)

Defendant YBM Inc. asserts that because it is the agent of YBM LLC, it cannot be  held liable for breaches of the warranty of habitability because the duty to provide a habitable residency falls on YBM LLC under the Lease. “In sum, the claim for breach of warranty of habitability was on the contract.” (Hjelm v. Prometheus Real Estate Group, Inc. (2016) 3 Cal.App.5th 1155, 1169. “Since the suit for breach of the implied warranty is essentially a contractual one, the trial court correctly ruled the agents could not be held liable on the breach of warranty because an agent is ordinarily not liable on the contract when he acts on behalf of a disclosed principal [citation].” (Stoiber, supra, 101 Cal.App.3d at p. 929.) Accordingly, Stoiber, stands for the proposition that “the existence of a contractual relationship does not immunize a tortfeasor from tort liability for his wrongful acts in breach of the contract.” (Id., at p. 929.)

Therefore, YBM Inc. may be held liable for breach of any duty owed to Plaintiff but when the duty owed is based on contract, the agent is immune from liability because it is the principal who owes the contractual duties unless the principal’s identity was not disclosed to the Plaintiff. (See Dones, supra, 55 Cal.App.5th at p. 698; Filippo Industries, Inc.; supra, 74 Cal.App.4th at p. 1443.) For example, in Hjelm v. Prometheus Real Estate Group, Inc. (2016) 3 Cal.App.5th 1155, the appellate court rejected Prometheus’ argument that it was not contractually liable for breaches of the lease because it was a property manager when “[t]he fact is, it signed the lease.” (Id., at p. 1164.) Here, the FAC’s copy of the Lease shows that it was YBM LLC, and not YBM Inc., who signed the Lease. Thus, all contractual duties are owed by YBM LLC as the principal of YBM Inc.

Therefore, under agency principles, only YBM LLC can be held liable for breaches of the Lease, including contractual claims related to the breach, such as breach of the implied covenant of habitability. Plaintiff fails to cite case law that would permit the court to extend contractual liability independently to agents when the plaintiffs contracted with the principal and not the agent.

The demurrer to the fifth cause of action is sustained.

Conclusion

Defendant YBM Properties, Inc.’s demurrer is sustained with leave to amend. Plaintiff is granted 10 days leave to amend. The court sets a Non-Appearance OSC RE: Filing of Amended Complaint for November 8, 2024, at 8:30 a.m. Defendant to give notice.