Judge Holly J. Fujie, Case 21STCV06334 2022-08-30 Tentative Ruling

DEPARTMENT 56 JUDGE HOLLY J. FUJIE, LAW AND MOTION RULINGS. The court makes every effort to post tentative rulings by 5.00 pm of the court day before the hearing. The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)], and are also available in the courtroom on the day of the hearing [see CRC 3.1308(b)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) call Dept 56 by 8:30 a.m. on the day of the hearing (213/633-0656) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no telephone call is necessary and all parties should appear at the hearing in person or by Court Call. Court reporters are not provided, and parties who want a record of motions and other proceedings must hire a privately retained certified court reporter.

MOVING PARTY: Plaintiff//Cross-Defendant 6759 Hollywood Associates, LLC (“Moving Cross-Defendant”)

RESPONDING PARTY: Defendants/Cross-Complainants Museum of Selfies, Inc. and Azariy Lapidus (collectively, “Cross-Complainants”)

This action arises out of a commercial landlord/tenant relationship. The currently operative first amended cross complaint (the “FAXC”) alleges: (1) breach of contract; (2) promissory fraud; (3) professional negligence; and (4) declaratory relief.

In relevant part, the FAXC alleges: On or about July 2, 2018, Cross-Complainants and Moving Cross-Defendant entered into a commercial lease agreement (the “Lease”) pursuant to which Cross-Complainants leased premises (the “Premises”) for the purpose of operating a museum and exposition. (See FAXC ¶¶ 8-9, Exhibit A.) Moving Cross-Defendant repeatedly failed to make repairs to the Premises, including to the roof, elevator, and fire alarm system, despite repeated requests from Cross-Complainants and Moving Cross-Defendant’s repeated assurances that it would address these problems. (See FAXC ¶¶ 9, 12, 14-16.) As a result of the unaddressed repairs, Cross-Complainants had to close their business on several occasions. (See FAXC ¶¶ 12, 14-15.)

Moving Cross-Defendant filed a demurrer (the “Demurrer”) to the first and second causes of action of the FAXC on the grounds that the FAXC fails to state facts sufficient to constitute a cause of action.

A demurrer tests the sufficiency of a complaint as a matter of law. (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1358.) The court accepts as true all material factual allegations and affords them a liberal construction, but it does not consider conclusions of fact or law, opinions, speculation, or allegations contrary to law or judicially noticed facts. (Shea Homes Limited Partnership v. County of Alameda (2003) 110 Cal.App.4th 1246, 1254.) With respect to a demurrer, the complaint must be construed liberally by drawing reasonable inferences from the facts pleaded. (Rodas v. Spiegel (2001) 87 Cal.App.4th 513, 517.) A demurrer will be sustained without leave to amend if there exists no reasonable possibility that the defect can be cured by amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

The elements of a cause of action 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.)

Moving Cross-Complainant argues that the FAXC fails to allege a breach of contract because the alleged breaches identified in the FAXC do not constitute breaches pursuant to the terms of the Lease and/or an exculpatory clause in the Lease precludes liability for any properly alleged breaches.

Where a complaint is based on a written contract which it sets out in full, a general demurrer to the complaint admits not only the contents of the instrument but also any pleaded meaning to which the instrument is reasonably susceptible. (Aragon-Haas v. Family Security Ins. Services Inc. (1991) 231 Cal.App.3d 232, 240.) While a plaintiff’s interpretation of the contract ultimately may prove invalid, it is improper to resolve the issue against them on their own pleading. (Id.)

For an agreement to be construed as precluding liability for “active” or “affirmative” negligence, there must be express and unequivocal language in the agreement which precludes such liability. (Burnett v. Chimney Sweep (2004) 123 Cal.App.4th 1057, 1066 (“Burnett”).) An agreement which seeks to limit liability generally without mentioning negligence is construed to shield a party only for passive negligence, not for active negligence. (Id.) The “active-passive dichotomy,” however, is not “wholly dispositive” of the issue. (Id.) Whether an exculpatory clause covers a given case turns primarily on contractual interpretation, and it is the intent of the parties as expressed in the agreement that should control. (Id.) When the parties knowingly bargain for the protection at issue, the protection should be afforded. (Id.) This requires an inquiry into the circumstances of the damage or injury and the language of the contract; of necessity, each case will turn on its own facts. (Id.)

“Lessor shall, at its own expense, maintain in good condition and repair the structural elements of the Building of which the Premises is a part. Structural elements shall mean the exterior roof (except second floor window glass,) structural supports, and foundation of the Building. Lessor shall also be responsible for maintaining the second floor exterior walls of the property on Hollywood Blvd., which is not to include the second floor exterior walls of the rear patio. Lessor shall not be liable for any damages to Lessee or its property resulting from Lessor’s failure to make any repairs required by this section. Lessee shall reimburse to Lessor the full cost of any repairs made pursuant to this section required because of the negligence or other fault of Lessee, its employees, agents or subtenants, if any.” (Complaint, Exhibit A § 14.)

Section 14 does not specify if its limitation on liability extends to damages caused by a negligent failure to make repairs. The FAXC alleges that Moving Cross-Defendant caused multiple unscheduled closures of the Premises due to the failure to repair the roof leaks. (FAXC ¶ 14.) The FAXC also alleges that Cross-Complainants had to repair portions of their exhibit caused by damage from the leaking roof. (Id.) These allegations indicate active negligence and therefore, under the standard articulated in Burnett, the provision is reasonably susceptible to the interpretation articulated in the FAXC. (See Aragon-Haas v. Family Security Ins. Services Inc. (1991) 231 Cal.App.3d 232, 240.) At the demurrer stage, the Court accepts this interpretation as true. (See id.) The Court therefore finds that the FAXC sufficiently alleges breach of contract and OVERRULES the Demurrer to the first cause of action. [1]

The elements of promissory fraud¿ are: (1) a promise made regarding a material fact without any intention of performing it; (2) the existence of the intent not to perform at the time the promise was made; (3) intent to deceive or induce the promisee to enter into a transaction; (4) reasonable reliance by the promisee; (5) nonperformance by the party making the promise; and (6) resulting damage to the promisee. (Rossberg v. Bank of America, N.A. (2013) 219 Cal.App.4th 1481, 1498.) Promissory fraud must also be alleged with particularity. (Id.) The particularity requirement necessitates pleading facts which “show how, when, where, to whom, and by what means” the representations were tendered. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

Although the FAXC alleges that Moving Cross-Defendant represented that it would address certain defects such as the elevator and fire alarm both before and after the Lease’s execution, the promissory fraud claim is based on Cross-Complainants’ entering into the Lease in reliance on these representations. (See FAXC ¶ 30.) Although Cross-Complainants’ argument that Moving Cross-Defendant’s intent not to perform its promise may be inferred by its repeated subsequent promises to make the repairs is well-taken, the allegations in the FAXC concerning these other promises fail to satisfy the pleading standard for fraud-based claims because the FAXC does not specify how, when, where, to whom, and by what means these promises were made. As a result, the FAXC fails to sufficiently allege that Moving Cross-Defendant did not intend to perform its initial promise at the time it was made. (See Reeder v. Specialized Loan Servicing LLC (2020) 52 Cal.App.5th 795, 804 (it is insufficient to show an unkept but honest promise, or mere subsequent failure of performance.).) The Court therefore SUSTAINS the Demurrer to the second cause of action with 20 days leave to amend.

In consideration of the current COVID-19 pandemic situation, the Court¿strongly¿encourages that appearances on all proceedings, including this one, be made by LACourtConnect if the parties do not submit on the tentative.¿¿If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to¿SMC_DEPT56@lacourt.org¿stating your intention to appear in person.¿ The Court will then inform you by close of business that day of the time your hearing will be held. The time set for the hearing may be at any time during that scheduled hearing day, or it may be necessary to schedule the hearing for another date if the Court is unable to accommodate all personal appearances set on that date.¿ This rule is necessary to ensure that adequate precautions can be taken for proper social distancing.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court

[1] A general demurrer does not lie as to a portion of a cause of action, and since a part of the cause of action is properly pleaded, the Court need not consider the remainder of the arguments raised by Moving Cross-Defendant. (See Fire Ins. Exchange v. Superior Court (2004) 116 Cal.App.4th 446, 452.)