Judge: Gregory Keosian, Case: 21STCV43201, Date: 2023-12-14 Tentative Ruling

Case Number: 21STCV43201    Hearing Date: December 14, 2023    Dept: 61

Cross-Defendants Aaron Serruya and Yogen Fruz USA, Inc.’s Demurrer and Motion to Strike Portions of Cross-Complainant David Bogner’s Cross-Complaint is SUSTAINED with leave to amend as to the third cause of action for wrongful lockout, and GRANTED with leave to amend as to the prayer for punitive damages. The demurrer and motion to strike are otherwise OVERRULED and DENIED.

Plaintiff and Cross-Defendant Jill Greenberg as Trustee of Jill Greenberg 2019 Trust’s Demurrer to David Bogner’s Cross-Complaint and Motion for Judgment on the Pleadings are SUSTAINED as to the fifth cause of action for intentional infliction of emotional distress, with leave to amend, and otherwise OVERRULED and DENIED.

I.                   DEMURRER

A demurrer should be sustained only where the defects appear on the face of the pleading or are judicially noticed. (Code Civ. Pro., §§ 430.30, et seq.) A court should sustain a demurrer if a complaint does not allege facts that are legally sufficient to constitute a cause of action. (See id. § 430.10, subd. (e).) As the Supreme Court held in Blank v. Kirwan (1985) Cal.3d 311: “We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. . . . Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.” (Id. at p. 318; see also Hahn. v. Mirda (2007) 147 Cal.App.4th 740, 747 (“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.”))

“In determining whether the complaint is sufficient as against the demurrer … if on consideration of all the facts stated it appears the plaintiff is entitled to any relief at the hands of the court against the defendants the complaint will be held good although the facts may not be clearly stated.”  (Gressley v. Williams (1961) 193 Cal.App.2d 636, 639.)

“A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal.App.4th 612, 616.) Such demurrers “are disfavored, and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Mahan v. Charles W. Chan Insurance Agency, Inc. (2017) 14 Cal.App.5th 841, 848.)

A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment. (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p. 1081.) The demurrer also may be sustained without leave to amend where the nature of the defects and previous unsuccessful attempts to plead render it probable plaintiff cannot state a cause of action. (Krawitz v. Rusch (1989) 209 Cal.App.3d 957, 967.)

Plaintiff Jill Greenberg (Plaintiff) seeks judgment in favor of her own Complaint on the grounds that Default Judgment has been entered in her favor as to co-defendant Ernest Financial, LLC, and the same issues found against Ernest warrant judgment against Defendant Bogner, and militate against entertaining his cross-claims. (Plaintiff Motion at pp. 5–6.) Plaintiff also demurrers to each cause of action in Bogner’s cross-complaint on the grounds that the operative lease was with the now-suspended Ernest Financial, and Bogner lacks standing to assert his claims. (Demurrer at pp. 6–12.)

Much of Plaintiff’s motion and demurrer consist of mere denials of the allegations contained in Bogner’s pleadings, and as such furnish little basis to either grant judgment in Plaintiff’s favor or sustain her demurrer. Plaintiff argues that Bogner abandoned the premises at issue, a fact neither contained in the Cross-Complaint nor subject to judicial notice. (Demurrer at p. 6.) It is alleged that the property subject to conversion belonged to Ernest, not to Bogner, when the contrary is alleged in the Cross-Complaint. (Demurrer at p. 8.) Plaintiff contends that its lease was with Ernest and not with Bogner; yet the lease expressly stated that “[t]he Premises are for the sole use as a personal residence by the following named person(s) only: David Bogner.” (XC ¶ 3 [incorporating lease attached as Exh. 1 to Plaintiff’s Complaint.].) Bogner has alleged sufficient facts to state his possession or control over the relevant property for the purposes of his trespass and nuisance claims. (See Ralphs Grocery Co. v. Victory Consultants, Inc. (2017) 17 Cal.App.5th 245, 262 [trespass elements]; Today's IV, Inc. v. Los Angeles County Metropolitan Transportation Authority (2022) 83 Cal.App.5th 1137, 1176 [nuisance elements].)

Plaintiff argues that Bogner’s possession and control ended once Plaintiff terminated the operative lease. (Demurrer at p. 4.) There are no allegations or judicially noticeable matters to support this fact. Plaintiff argues that the lease, executed with Defendant Ernest, became voidable when Ernest was suspended by the Franchise Tax Board on October 1, 2021. (Demurrer at p. 7; RJN Exh. A.) But while it is true that a contract with a suspended corporation is voidable at the option of the other party, a party “may exercise that right only in a lawsuit brought by either party with respect to the contract in a court of competent jurisdiction.” (Rev. & Tax Code § 23304.5.) Although Plaintiff contends that its lease with Bogner was ended on September 1, 2021, and that Bogner’s sublease with Cross-Defendants was terminated later, Plaintiff does not claim that either contract was voided under the above statute, and locates no allegation in the Cross-Complaint or judicially noticeable matters to support these arguments. (Demurrer at p. 5.)

The sole cause of action to which the demurrer advances a persuasive argument is the fifth cause of action for intentional infliction of emotional distress. The elements of an IIED claim are: (1) extreme and outrageous conduct by defendant; (2) made with intent to cause, or with reckless disregard of the probability of causing, emotional distress; (3) severe emotional suffering; and (4) actual and proximate causation. (Huntingdon Life Sciences, Inc. v. Stop Huntingdon Animal Cruelty USA, Inc. (2005) 129 Cal.App.4th 1228, 1259; Bogard v. Employers Casualty Company (1985) 164 Cal.App.3d 602, 616.) The level of distress required to state a claim for IIED is distress of “such substantial quality or enduring quality that no reasonable [person] in civilized society should be expected to endure it.” (Hughes v. Pair (2009) 46 Cal.4th 1035, 1051.) “Whether a defendant’s conduct can reasonably be found to be outrageous is a question of law that must initially be determined by the court; if reasonable persons may differ, it is for the jury to determine whether the conduct was, in fact, outrageous.” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 534.)

Plaintiff does not allege facts amounting to outrageous conduct. Although the lease at issue provided for Plaintiff’s residential use of the property, Plaintiff at no point alleges that it served as his residence. The wrongful conduct alleged consists of making Plaintiff’s subtenants in possession of the property  — Cross-Defendants Serruya and Yogen Fruz USA, Inc. — into tenants in possession of the property. Plaintiff’s alleged deprivation is that of a “reversionary” interest, maintained pursuant to a voidable lease with a suspended corporation. (XC ¶ 19.) These allegations do not amount to outrageous conduct.

Plaintiff’s demurrer is therefore SUSTAINED with leave to amend as to the fifth cause of action for intentional infliction from emotional distress, and is otherwise OVERRULED.

Plaintiff’s motion for judgment on the pleadings — offered in support of her own complaint, rather than against the Cross-Complaint — is without merit. Its argument is simply that, with a default judgment entered against Ernest Financial, LLC on December 6, 2021, Defendant Bogner cannot deny crucial elements of Plaintiff’s claims. (Motion at pp. 5–6.) Plaintiff does not define which claims these are, or what elements have heretofore been satisfied. More importantly, Plaintiff is mistaken as to the entry of a default judgment; only a default was entered on December 6, 2021, and Plaintiff’s request for default judgment was expressly denied on August 30, 2022, on the grounds that Defendant Bogner had filed an answer contesting Plaintiff’s claims. Plaintiff’s motion is DENIED.

This leaves Cross-Defendants’ demurrer and motion to strike. Cross-Defendants begin by arguing that the Cross-Complaint’s first cause of action for conversion fails because Cross-Defendants did not know the offending property belonged to Defendant, because Defendant did not initiate a wrongful retainer action, and because Defendant failed to return Cross-Defendants’ security deposit. (Demurrer at pp. 6–8.)

Each argument fails. Cross-Defendants’ argument from intent is contradicted both by the Cross-Complaint — which alleges that Plaintiff demanded the return of his property (XC ¶ 16) — and applicable authority, which states that “questions of the defendant's good faith, lack of knowledge, and motive are ordinarily immaterial” to the tort of conversion. (Regent Alliance Ltd. v. Rabizadeh (2014) 231 Cal.App.4th 1177, 1181.)  Cross-Defendants’ reliance on Civil Code § 789.3 is also misplaced, as this statute merely prohibits a landlord from “willfully” removing items from the premises “with intent to terminate the occupancy” without either the tenant’s consent or proper statutory procedures. (Civ. Code § 789.3, subd. (b)(3).) The Cross-Complaint here alleges that Cross-Defendants refused to turn over Bogner’s property after the ouster of his tenancy, i.e. that Cross-Defendants’ consent was unreasonably withheld, and that resort to ordinary statutory procedures for landlord entry would not have been effectual. Finally, Cross-Defendants’ arguments with respect to the security deposit or beyond the bounds of the pleading. (Demurrer at pp. 7–8.)

Cross-Defendants’ arguments as to the trespass and nuisance claims are likewise unpersuasive. They claim, like Plaintiff, that Bogner’s lease had expired when Cross-Defendants formed their own lease with Plaintiff. (Demurrer at pp. 9, 13.) As with Plaintiff’s demurrer, however, this argument rests upon facts not subject to judicial notice regarding the termination of Defendant’s lease and the abandonment of the property. Cross-Defendants also argue that the Cross-Complaint does not allege their “intentional, reckless, or negligent entry onto the property,” or their lack of permission for the entry or acts in excess of permission.” (Demurrer at p. 9; Ralphs Grocery Co. v. Victory Consultants, Inc. (2017) 17 Cal.App.5th 245, 262.) Yet Cross-Defendants’ arguments that they “reasonabl[y]” exercised possession over the premises, and that they possessed an equivalent right to possession, are once again contradicted by allegations in the Cross-Complaint that Cross-Defendants engaged in “mutual self-help” to exclude Bogner from the property, as well as Bogner’s allegation that Cross-Defendants’ right to the premises ended with the termination of their sublease. (XC ¶¶ 4, 20.) Cross-Defendants’ identical arguments with respect to the nuisance claim are equally unpersuasive. (Demurrer at pp. 12–13.)

Cross-Defendants argue that Bogner’s sole remedy for nuisance or trespass would have been an unlawful detainer action. (Demurrer at pp. 10–11, 13–14.) But Cross-Defendants’ argument is unsupported by authority, save one case stating that unlawful detainer procedures “are given in lieu of his common law rights and remedies which included the right to enter and expel the tenant by force.” (Childs v. Eltinge (1973) 29 Cal.App.3d 843, 853.) This authority stands for the proposition that unlawful detainer procedures replace prior common law means of restoring possession of real property to the owner, which is the primary remedy afforded by an unlawful detainer claim. (See Drybread v. Chipain Chiropractic Corp. (2007) 151 Cal.App.4th 1063, 1072 [“The remedy of unlawful detainer is designed to provide means by the timely possession of premises which are wrongfully withheld may be secured to the person entitled thereto.”].) It does not mean that unlawful detainer claims displace civil actions for damages. (See Hudec v. Robertson (1989) 210 Cal.App.3d 1156, 1164 [landlord could bring “independent civil action” after unsuccessful unlawful detainer action])

Cross-Defendants’ demurrer is persuasive, however, with respect to the third cause of action for wrongful lockout. This is because Civil Code § 789.3 subd. (b), prohibits a “landlord” specifically from interfering with tenant access to the leased premises, while Cross-Defendants are not alleged to have been Cross-Complainant’s landlord at any point. (Demurrer at pp. 11–13.)

Cross-Defendants’ demurrer is therefore SUSTAINED with leave to amend as to the third cause of action, and otherwise OVERRULED.

II.                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. (Code Civ. Proc., § 435(b)(1)). The notice of motion to strike a portion of a pleading shall quote in full the portions sought to be stricken except where the motion is to strike an entire paragraph, cause of action, count or defense. (California Rules of Court Rule 3.1322.)

The grounds for a motion to strike shall appear on the face of the challenged pleading or form any matter of which the court is required to take judicial notice. (Code Civ. Proc., § 437(a)). The court then may strike out any irrelevant, false, or improper matter inserted in any pleading and strike 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. (Code Civ. Proc., § 436.) When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend. (Perlman v. Municipal Court (1979) 99 Cal.App.3d 568, 575.)

Cross-Defendants moves to strike Plaintiff’s prayer for punitive damages. (Motion at pp. 8–11.)

Punitive damages are allowed in non-contract cases when a defendant is guilty of “oppression, fraud, or malice . . . .” (Civ. Code § 3294, subd. (a).) The terms are defined as:

“Malice” means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.

“Oppression” means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights.

“Fraud” means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.

(Civ. Code § 3294, subd. (c).)

Something more than the mere commission of a tort is always required for punitive damages. (Taylor v. Superior Court (1979) 24 Cal.3d 890, 894.) Proof of negligence, gross negligence, or recklessness is insufficient to warrant an award of punitive damages. (Dawes v. Sup.Ct. (Mardian) (1980) 111 Cal.App.3d 82, 88–89.) Punitive damages may be recovered in an action for negligence or other nonintentional torts if the plaintiff pleads and proves that the defendant acted with the state of mind described as “conscious disregard” of the potential dangers to others. (Pfeifer v. John Crane, Inc. (2013) 220 Cal.App.4th 1270, 1299.) When malice is based on a defendant’s conscious disregard of Plaintiff’s rights, the conduct must be both despicable and willful. (College Hospital v. Superior Court (1994) 8 Cal.4th 794, 713 (“College Hospital”).)

Bogner does not allege facts sufficient to state a claim for punitive damage, because the facts alleged do not constitute malice, oppression, or fraud. Plaintiff alleges that he was prevented from exercising a reversionary right to possess the property at issue when his former subtenant collaborated his landlord to supplant him as tenant. Plaintiff does not allege facts to show that this conduct was despicable or malicious.

Cross-Defendants also move to strike the prayer for attorney fees, on the grounds that fees are sought pursuant to a lease between Ernest and Plaintiff, to which Cross-Defendants are not a party. (Motion at pp. 11–12.) Defendant argues that the sublease with Cross-Defendants contains an attorney fees provision, a fact which Cross-Defendants concede. (Motion at p. 12, fn. 2.) The motion is therefore DENIED as to the prayer for attorney fees.

Accordingly, the motion is GRANTED with leave to amend as to the prayer for punitive damages, and DENIED as to the prayer for attorney fees.