Judge: Gregory Keosian, Case: 22STCV20177, Date: 2023-02-16 Tentative Ruling

Case Number: 22STCV20177    Hearing Date: February 16, 2023    Dept: 61

Defendants Jon Greenfield and 21326 Ventura, LLC’s Demurrer to the Complaint is SUSTAINED with 30 days leave to amend.

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.) In particular, as is relevant here, 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. [Citation.]”)

“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.)

Defendants Jon Greenfield and 21326 Ventura LLC (Defendants) demurrer to the Complaint filed by Plaintiff Garry Itkin (Plaintiff) on various grounds. Defendants argue that the breach of contract claim is barred by the statute of frauds, as the Letter of Intent (LOI) to sell real property that is at issue in this case is not signed by Defendants. (Demurrer at pp. 7–8.) Defendants further argue that they never accepted the agreement, because the emails referenced in the Complaint are conditioned upon review of the agreement by Defendants’ attorney. (Demurrer at pp. 8–9.) Defendants further argue that the alleged breach — their failure to open escrow — is not a provision of the LOI that Plaintiff seeks to enforce. (Demurrer at p. 10.) Defendants further argue that the claims against Jon Greenfield fail because he is not an owner of the property to be sold, and further argues that Plaintiff lacks standing to sue because the LOI indicates the purchasing party is not Plaintiff individually but rather the entity Love to Snack LLC, of which Plaintiff is the managing member. (Demurrer at pp. 12–13.)

Defendants’ arguments are persuasive. First, Defendants persuasively argue that the alleged agreement against them is barred by the statute of frauds, as it is an agreement for the sale of real property thus requiring a writing “subscribed by the party to be charged.” (Civ. Code § 1624, subd. (a)(3).) Here, Plaintiff alleges that the contract’s terms are contained in the LOI, and that Defendants subscribed to the LOI by virtue of emails indicating their acceptance of its terms. (Opposition at pp. 5–7.) But the emails do not indicate acceptance of the LOI. The LOI is dated March 21, 2022, and the emails purporting to accept it are dated February 8, 2022, more than a month before the LOI was prepared or executed. (Complaint ¶¶ 14, 17–19; Exh. 1.) Although Plaintiff contends that the emails’ references to an “offer” referred to “the terms of the LOI,” the emails themselves, executed beforehand, do not identify the subject of the parties’ agreement or state the terms with reasonable certainty. (See Sterling v. Taylor (2007) 40 Cal.4^th 757, 766 [stating essential elements of a written memorandum of agreement under the statute of frauds].) The emails do not serve as a memorandum under the statute of frauds, and do not refer to the LOI.

What’s more, the emails that Plaintiff relies upon to establish Defendants’ acceptance of the terms of the LOI — in addition to evidently being prepared before the LOI itself — do not indicate acceptance of any contractual term. “An acceptance must be absolute and unqualified, or must include in itself an acceptance of that character which the proposer can separate from the rest, and which will conclude the person accepting. A qualified acceptance is a new proposal.” (Civ. Code, § 1585.) Statements of acceptance that are conditional or qualified are not acceptance. (See Lisitsa Law Corp. v. United Nat. Ins. Co. (9^th Cir. 2013) 504 Fed.Appx. 598, 599 [no acceptance when conditioned on other party entering into stipulation].) Here, the first email expressed approval of the offer “pending our attorney’s review of the offer.” (Complaint ¶ 17.) The next email asked only for Plaintiff to prepare purchase documents for Defendants’ attorney to review. (Complaint ¶ 19.) These emails do not evidence unqualified acceptance, but only a tentative agreement pending further consideration of the terms described by Plaintiff.

Defendants are also correct that no claims are alleged against Jon Greenfield individually, as he is neither the owner of the property in question nor named as a party to the contract that Plaintiff alleges. Plaintiff in opposition argues only that Jon Greenfield was the agent of Defendant 21326 Ventura, LLC with the authority to bind the corporation. (Opposition at pp. 10–11.) But the fact that an agent is authorized to act on behalf of a corporation does not make the agent personally liable for the contracts he signs in the corporation’s name. (Cohen v. TNP 2008 Participating Notes Program, LLC (2019) 31 Cal.App.5th 840, 861 [“[U]nder ordinary rules of contract and agency law a representative who unambiguously signs a contract as a corporate officer or agent is not a party to the contract in his or her personal capacity.”].) Plaintiff further cites Civil Code § 2343, which allows in certain circumstances agents to be held liable to third persons as a principal for their acts. (Opposition at p. 11.) But Plaintiff does not identify in the Complaint or in opposition which of the circumstances named in the statute — credit extended to agent personally, agent enters transaction without a good faith belief in authority to act, or when agent acts wrongfully — applies to this case. (Civ. Code § 2343.)  

It is not clear as a matter of law, however, that Plaintiff lacks standing to sue on his own behalf. Although Plaintiff signed the LOI under a caption indicating his status as “managing member” for Love to Snack LLC, the terms of the agreement state that “Garry Itkin” is the “Buyer” of the property. (Complaint Exh. 1.)

For the above reasons, Plaintiff’s breach of contract claim is defectively pleaded. And because Plaintiff’s other causes of action for specific performance and declaratory relief are derivative of this claim, they too fail. The demurrer is therefore SUSTAINED as to all claims alleged against Defendants, with 30 days leave to amend.