Judge Holly J. Fujie, Case 21STCV14481 2022-10-27 Tentative Ruling

This action arises out of a dispute concerning the ownership of real property (the “Property”). On April 16, 2021, Atlas filed a complaint (the “Complaint”) alleging: (1) fraud; (2) undue influence; (3) financial abuse; (4) quiet title; (5) cancellation of instruments; (6) return of real property to elder/dependent adult; and (7) intentional infliction of emotional distress.

Davidyan’s currently operative second amended cross-complaint (the “SAXC”) alleges: (1) breach of written contract; (2) breach of release agreement; and (3) promissory estoppel or equitable estoppel.

The relevant allegations of the SAXC are as follows: Atlas owned the Property, which was scheduled to be sold in a tax lien sale on or about October 17, 2016. (SAXC ¶ 6.) Due to her inability to make necessary tax payments and the forthcoming tax lien sale, Atlas met with Davidyan in October 2016 to discuss the sale of the Property. (SAXC ¶¶ 6-7.) Davidyan agreed to purchase the Property and assume its associated debts. (SAXC ¶ 7.) On October 10, 2016, Davidyan and Atlas entered into a purchase and sale contract for the Property (the “Purchase Agreement”). (SAXC ¶ 8, Exhibit A.) Atlas signed a grant deed (the “Deed”) transferring the Property to Davidyan and Davidyan recorded the Deed on October 14, 2016. (SAXC ¶ 9, Exhibit B.) Also on October 10, 2016, Atlas executed a release of claims agreement (the “Release Agreement”) which provided that she agreed to release all claims against Davidyan related to the Property. (See SAXC ¶ 10, Exhibit C.)

After selling the Property to Davidyan, Atlas continued to live at the Property. (SAXC ¶ 11.) In or around early 2018, Davidyan wrote Atlas a letter asking that she begin to pay him rent. (Id.) When Atlas failed respond to Davidyan’s letter, he visited the Property to discuss the matter further with her; during this visit, Davidyan was unable to access the door because Atlas had an aggressive dog. (Id.) While visiting the Property, Davidyan also noticed that the premises were severely unkempt and as a result, he asked Atlas to vacate. (SAXC ¶ 12.)

Because she refused to pay rent, vacate, or maintain the Property, Davidyan filed an unlawful detainer action in 2020. (SAXC ¶ 13.) Atlas thereafter initiated this lawsuit. (SAXC ¶ 14.) In addition, Davidyan has been sued by a third party who alleges that she was bit by a dog that Atlas keeps on the Property. (SAXC ¶ 15.)

Atlas filed a demurrer (the “Demurrer”) to the Complaint on the grounds that: (1) the SAXC fails to state sufficient facts to constitute a cause of action; (2) if it cannot be ascertained from the pleading whether the contract is written, oral or implied by conduct; and (3) the pleading is uncertain.

Atlas’s Request for Judicial Notice (“RJN”) is GRANTED as to Exhibit M and DENIED as to Exhibits J, K, and L. Davidyan’s RJN is GRANTED.

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.) While the allegations of a complaint must be accepted as true for purposes of demurrer, the facts appearing in exhibits attached to the complaint will also be accepted as true and, if contrary to the allegations in the pleading, will be given precedence. (Moran v. Prime Healthcare Management, Inc. (2016) 3 Cal.App.5th 1131, 1145-46.) 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.)

Demurrers for uncertainty are disfavored and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond. (Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1135.) 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. (Chen v. Berenjian (2019) 33 Cal.App.5th 811, 822.)

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.) 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.) On a demurrer, the court must consider the sufficiency of the allegations, including any parol evidence allegations, to determine whether the contract is reasonably susceptible to plaintiff’s alleged interpretation. (George v. Automobile Club of Southern California (2011) 201 Cal.App.4th 1112, 1128.)

The Court finds that the breach of contract claims are adequately alleged. With respect to the first cause of action and the Purchase Agreement, Atlas’s argument regarding the actual sufficiency of the consideration Atlas received from Davidyan requires a factual analysis inappropriate at the demurrer stage. The Court agrees that the Purchase Agreement does not expressly set forth the possessory rights of Davidyan or Atlas and contains a definition of “possession” that distinguishes it from ownership; however, the various drafting issues within the Purchase Agreement make the document ambiguous. (See, e.g., SAXC, Exhibit A § 25.) Read together with the Deed, which is a grant deed, rather than a quitclaim deed as stated in the Purchase Agreement,[1] and drawing all inferences in Davidyan’s favor, the Court finds that the Purchase Agreement is reasonably susceptible to the interpretation proposed by Davidyan in the SAXC.

The allegations in the SAXC are likewise sufficient with respect to the Release Agreement, which Davidyan alleges Atlas breached by filing this lawsuit. Whether Atlas was fraudulently induced into signing the Release Agreement, Purchase Agreement, or Deed is an issue outside the scope of the Demurrer. The Court therefore OVERRULES the Demurrer to the first and second causes of action.

The elements of promissory estoppel are: (1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) the reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance. (Flintco Pacific, Inc. v. TEC Management Consultants, Inc. (2016) 1 Cal.App.5th 727, 734.)

The Court finds that the SAXC adequately alleges promissory estoppel. The Court finds, however, that the allegations that Atlas is equitably estopped from asserting defenses to the enforcement of any of the contractual agreements at issue in this action are improper, and are more properly asserted by Davidyan as an affirmative defense to the Complaint. (See SAXC ¶¶ 46-48.)

The Court therefore OVERRULES the Demurrer to the SAXC. The Court, on its own motion, however, STRIKES the equitable allegations in Paragraphs 46-48 of the SAXC. (See CCP § 436.) Atlas is to file an answer to the SAXC within 20 days of the date of this order.

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.

[1] The Purchase Agreement indicates Atlas’s intent to convey a quitclaim deed to Davidyan although the Purchase Agreement only defines a grant deed and the Deed Davidyan recorded is a grant deed. (See SAXC, Exhibit A at §§ 2, 25; Exhibit B.)