Judge: Helen Zukin, Case: 20SMUD00869, Date: 2023-01-26 Tentative Ruling
Case Number: 20SMUD00869 Hearing Date: January 26, 2023 Dept: 207
Background
Plaintiff American Financial Center, Inc. (“Plaintiff”)
brings this action against Defendants Birgitta Lauren and Eric Yohan aka Eric
Knipe (collectively “Defendants”). This case was originally filed as an
unlawful detainer action concerning the real property located at 2010 S.
Beverly Blvd., #101, Los Angeles, California 90025. Plaintiff obtained a
default judgment against Defendants for possession of the premises. Defendants
moved to vacate or set aside this judgment, which was denied by the Court on August
9, 2021.
On October 18, 2021, Plaintiff moved to reclassify the
action as an unlimited civil action and for leave to file an amended complaint.
The motion was granted by the Court and on February 23, 2022, Plaintiff filed a
First Amended Complaint (“FAC”) alleging causes of action for breach of
contract, breach of the implied covenant of good faith and fair dealing, and
waste on real property. The Court sustained Defendants’ demurrer with leave to
amend and on September 28, 2022, Plaintiff filed the operative Second Amended
Complaint (“SAC”). Defendants bring this demurrer to the same three causes of
action alleged in the SAC pursuant to Code Civ. Proc. § 430.10(e), arguing the
allegations in the SAC fail to state a cause of action against them.
Demurrer Standard
When considering demurrers, courts read the allegations
liberally and in context. (Wilson v. Transit Authority of City of Sacramento
(1962) 199 Cal.App.2d 716, 720-21.) In a demurrer proceeding, the defects must
be apparent on the face of the pleading or via proper judicial notice. (Donabedian
v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the
pleading alone, and not on the evidence or facts alleged.” (E-Fab, Inc. v.
Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such,
the court assumes the truth of the complaint’s properly pleaded or implied
factual allegations. (Id.) However, it does not accept as true
deductions, contentions, or conclusions of law or fact. (Stonehouse Homes
LLC v. City of Sierra Madre (2008) 167 Cal.App.4th 531, 538.)
A special demurrer for uncertainty under Section 430.10(f) is disfavored
and will only be sustained where the pleading is so unintelligible a defendant
cannot reasonably respond—i.e., cannot reasonably determine what issues must be
admitted or denied, or what counts or claims are directed against him/her. (Khoury
v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.) Moreover, even
if the pleading is somewhat vague, “ambiguities can be clarified under modern
discovery procedures.” (Id.)
Analysis
1. Meet and
Confer Requirement
Before filing a
demurrer or a motion to strike, the demurring or moving party is required to
“meet and confer in person or by telephone” with the party who filed the
pleading demurred to or the pleading subject to the motion to strike for the
purposes of determining whether an agreement can be reached through a filing of
an amended pleading to resolve the objections to be raised in the demurrer.
(C.C.P. §§ 430.41 and 435.5.) Defendants have
not filed such a declaration and thus have not complied with the requirements
of Code Civ. Proc. §§ 430.41(a), 435.5(a).
The Court notes it
specifically advised Defendants’ counsel of the meet and confer obligations
imposed by Code Civ. Proc. § 430.41 in its August 8, 2022, ruling on
Defendants’ prior demurrer. Nonetheless, the Court will consider the merits of
Defendants’ demurrer, however the Court cautions the parties that any further
failure to comply with such meet and confer requirements will result in the
moving party’s motion or application being taken off calendar. (C.C.P. §§
430.41(a)(4), 435.5(a)(4).)
2. Timeliness
of Opposition
Defendants argue the last day for
Plaintiff to file and serve an opposition to their demurrer was January 12,
2023, pursuant to Code Civ. Proc. § 1005(b), and thus Plaintiff was untimely in
serving its opposition on January 14 and filing it with the Court on January
17. The Court agrees Plaintiff’s opposition was untimely filed and served.
Defendants urge the Court to
strike and disregard Plaintiff’s opposition. However, the Court is not
free to disregard Plaintiff’s opposition simply because it is untimely.
California Rules of Court, rule 3.1300(d) expressly prohibits the Court from
doing so: “No paper may be rejected for filing on the ground that it was
untimely submitted for filing. If the court, in its discretion, refuses to
consider a late filed paper, the minutes or order must so indicate.” Defendants
do not claim they suffered any prejudice as a result of the untimeliness of
Plaintiff’s filings. The Court notes Plaintiff’s opposition amounts to less
than two pages of generalized argument and Defendants filed a reply responding
to the substance of Plaintiff’s opposition without moving for an extension of
their time to reply. The Court in its discretion will consider Plaintiff’s
opposition.
3. Breach of
Contract
To state a cause of action for
breach of contract, Plaintiff must be able to establish “(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 sustaining Defendants’ prior
demurrer, the Court found the FAC failed to specify whether the purported
contract was oral, written, or implied. (August 8, 2022, Order at 3.) The Court
further found Plaintiff had “failed to include sufficient factual allegations
concerning the terms of the contract and the parties’ performance:” (Id.
at 3-4.) Specifically, the Court noted:
Plaintiff alleges Defendants rented the subject property
(FAC at ¶ 6), the fair market value of the rent for the property is $3,000 per
month (id at ¶ 7), and one of the Defendants breached the rental
contract by failing to pay $3,000 per month for several months (id at ¶¶
18-32). However, Plaintiff does not allege Defendants ever agreed to pay $3,000
per month rather than some other amount.
(Id. at 4.)
The SAC now alleges Defendants
rented the property pursuant to an oral contract. (SAC at ¶6.) However,
Plaintiff has not cured the other defects identified in the Court’s prior
ruling. The SAC again alleges the fair market value of the rent for the
property is $3,000 per month, without alleging Defendants ever agreed to pay
this, or any, amount as rent. Plaintiff has thus again not alleged what terms
of the contract Defendants are alleged to have breached. The Court also notes
the SAC does not allege Plaintiff’s performance or excuse from performance
under the oral contract.
The Court finds this is information
which Plaintiff can provide by way of amendment. Accordingly, the Court
SUSTAINS Defendants’ demurrer to this cause of action with leave to amend.
4. Breach of
Implied Covenant of Good Faith and Fair Dealing
“A breach of the implied covenant
of good faith and fair dealing involves something beyond breach of the
contractual duty itself and it has been held that bad faith implies unfair
dealing rather than mistaken judgment.” (Careau & Co. v. Security
Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1394.) “If the
allegations do not go beyond the statement of a mere contract breach and,
relying on the same alleged acts, simply seek the same damages or other relief
already claimed in a companion contract cause of action, they may be disregarded
as superfluous as no additional claim is actually stated … [T]he only
justification for asserting a separate cause of action for breach of the
implied covenant is to obtain a tort recovery.” (Id. at 1394-1395.) To
recover in tort for breach of the implied covenant, the defendant must “have
acted unreasonably or without proper cause.” (Id. at 1395 [citations and
italics omitted].)
“Thus, allegations which assert
such a claim must show that the conduct of the defendant, whether or not it
also constitutes a breach of a consensual contract term, demonstrates a failure
or refusal to discharge contractual responsibilities, prompted not by an honest
mistake, bad judgment or negligence but rather by a conscious and deliberate
act, which unfairly frustrates the agreed common purposes and disappoints the
reasonable expectations of the other party thereby depriving that party of the
benefits of the agreement. Just what conduct will meet these criteria must be
determined on a case-by-case basis and will depend on the contractual purposes
and reasonably justified expectations of the parties.” (Careau & Co. v.
Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1395.)
The Court sustained Defendant’s
prior demurrer to the cause of action for breach of the implied covenant of
good faith and fair dealing because the only such breach alleged in the FAC was
for failure to pay rent without alleging any unreasonable or improper conduct
by Defendants beyond this alleged failure to pay rent. The Court concluded the
cause of action for breach of the implied covenant of good faith and fair
dealing was thus wholly duplicative of Plaintiff’s cause of action for breach
of contract for failure to pay rent. The SAC adds the allegation that Defendants
breached the implied covenant “by filing an unmeritorious motion to set aside
the default judgment” in this action. (SAC at ¶42.) However, the SAC does not
allege this motion was filed unreasonably or without proper cause, merely that
it was not ultimately successful. The Court sustains Defendants’ demurrer to
this cause of action, but will grant Plaintiff leave to amend to assert factual
allegations showing Defendants acted unreasonably in seeking relief from the
default judgment entered against them on the issue of possession.
5. Waste on
Real Property
Waste is an unlawful
act or omission of duty by a person in possession of real property that results
in an injury to the property. (Schellinger Brothers v. Cotter (2016) 2
Cal.App.5th 984, 1000; Cal. Civ. Proc. Code, § 732.) Waste occurs only when the
injury to real property is “sufficiently substantial and permanent.” (Avalon Pacific—Santa Ana, L.P. v. HD Supply
Repair & Remodel, LLC
(2011) 192 Cal.App.4th 1183, 1215.)
“‘Permanent’ does not inflexibly mean eternal; instead, ‘permanent’
means a degree of irremediableness sufficient to cause injury to a reversion
interest that will not become a possessory interest until the end of the lease
term.” (Id.)
In sustaining Defendants’ prior
demurrer, the Court found Plaintiff had not sufficiently alleged injury to the
property to constitute waste:
The FAC does
not allege any substantial or permanent injury to real property. The FAC
alleges three factual bases for Plaintiff’s claim of waste: (1) the property
required professional cleaning after Defendants departed, (2) installation of
child safety clamps, the removal of which required refinishing cabinets and
drawers, and (3) the property needed to be repainted. (FAC at ¶ 45.) Plaintiff
does not allege this damage was in any way permanent and indeed Plaintiff
alleges they have already been fully repaired by Plaintiff. (Id. at ¶
46.)
(Order at 5.) The SAC does not add
any substantive allegations to the cause of action for waste. Rather, the SAC
adds the conclusory statement that the damage caused by Defendants “was
substantial and permanent,” even though the list of alleged damage is based on
the same cleaning, cabinet refinishing, and repainting which the Court
previously held to be deficient to state a cause of action for waste. (SAC at
¶46.) The SAC also adds allegations that the refinishing of cabinets and
drawers and repainting were caused by “abusive use by Defendants.” (Id.)
These additional, unsupported characterizations of the claimed damages do not
cure the defects identified in the Court’s prior order. As before, the SAC does
not allege any permanent injury to property as Plaintiff acknowledges these
issues have been repaired. (Id. at ¶¶47-48.) Accordingly, the Court
SUSTAINS Defendants’ demurrer to this cause of action.
Plaintiff bears the
burden of demonstrating it can cure the defects in the FAC through further
amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) Plaintiff has
made no such showing here. As Plaintiff was previously given the opportunity to
cure the defects identified by the Court and Plaintiff has failed to do so, the
Court finds granting Plaintiff further leave to amend this claim would be
fruitless and therefore sustains Defendant’s demurrer to this cause of action
without leave to amend.
Conclusion
Defendants’ demurrer to Plaintiff’s first and second causes
of action is SUSTAINED with 30 days’ leave to amend. Defendants’ demurrer to
Plaintiff’s third cause of action is SUSTAINED without leave to amend.