Judge: Joel L. Lofton, Case: 20GDCV00609, Date: 2023-03-30 Tentative Ruling
Case Number: 20GDCV00609 Hearing Date: March 30, 2023 Dept: X
Tentative Ruling
Judge Joel L. Lofton, Department X
HEARING DATE: March 30, 2023 TRIAL DATE: No date set.
CASE: LIDD ENTERPRISES INC., DANNY LAO, BESSIE LAO, individually and as Trustees of the DANNY AND BESSIE LAO FAMILY TRUST DATED MAY 5, 2005, v. AUTO BUYLINE SYSTEMS INC., ABS AUTO AUCTIONS, REMARKETIMS INC., OPENTRADE INC., CLEARMARKET INC., AUCTIONLANE INC., ABS OPEN TRADE INC., KEVIN AZZOUZ, MIKE RHEE AND LENNARD MENGWALL AND DOES 1 through 100, inclusive.
CROSS: AUTO BUYLINE SYSTEMS, INC. dba ABS AUTO AUCTIONS, v. LIDD ENTERPRISES INC., a California Corporation; DANNY LAO, an individual; KEVIN AZZOUZ, an individual; MIKE RHEE, an individual; REMARKETIMS INC., a Delaware Corporation; OPENTRADE INC., a Delaware Corporation; CLEARMARKET INC. a Delaware Corporation; AUCTIONLANE, INC., a Delaware Corporation; ABS OPENTRADE, INC., a Delaware corporation; LENNART MENGWALL, an individual and ROES 1-20, inclusive.
CASE NO.: 20GDCV00609
DISCOVERY
MOTIONS
MOVING PARTY: Defendant and Cross-Complainant Auto BuyLine
Systems Inc.
RESPONDING PARTY: No
response filed.
SERVICE: Motions to compel further filed February
3, 2023
Motion to compel compliance March 6, 2023
RELIEF
REQUESTED
Cross-Complainant moves for an order
compelling Cross-Defendants RemarketIMS Inc., Kevin Azzouz, Mike Rhee,
and AuctionLane, Inc. (“Cross-Defendants”) to produce further responses to its
requests for the production of documents, form interrogatories, and special
interrogatories.
Cross-Complainant
also moves for an order compelling compliance with Cross-Defendants’ responses.
BACKGROUND
This case arises out of a dispute
for the lease of property located at 110 E. Holly Street, Pasadena, California
91103 (“Property”). Plaintiffs filed a third amended complaint (“TAC”) on
August 11, 2022, alleging eleven causes of action for (1) breach of contract,
(2) waste, (3) negligence, (4) common count, (5) breach of oral agreement, (6)
promissory estoppel, (7) conversion, (8) reformation, (9) fraudulent
conveyance, (10) fraudulent conveyance, and (11) aiding and abetting.
TENTATIVE RULING
Motions are continued to April 26, 2023, at 8:30am
LEGAL STANDARD
“If a party filing a response to a
demand for inspection, copying, testing, or sampling under Sections 2031.210,
2031.220, 2031.230, 2031.240, and 2031.280 thereafter fails to permit the
inspection, copying, testing, or sampling in accordance with that party’s
statement of compliance, the demanding party may move for an order compelling
compliance.” (Code Civ. Proc. section 2031.320, subd. (a).)
On receipt of a response to discovery requests, the party requesting may
move for an order compelling further responses for interrogatories (Code Civ. Proc.
2030.300), requests for admission (Cod. Civ. Proc. section 2033.290), and
request for production (Code Civ. Proc. section 2031.310). “Unless notice of
this motion is given within 45 days of the service of the verified response, or
any supplemental verified response, or any specific later date to which the
requesting party and the responding party have agreed in writing, the
requesting party waives any right to compel further response to the requests
for admission.” (Code Civ. Proc. section 2033.290, subd. (c).)
DISCUSSION
Cross-Complainant provides it served Cross-Defendants
with special interrogatories and form interrogatories on December 9, 2021.
(Harvey Decl. ¶ 3.) Cros-Complainant provides
it served requests for the production of documents on Cross-Defendant on March
10, 2022. (Id. ¶¶ 4-5.) Cross-Complainant provides that it moved for an
order compelling a response against Cross-Defendants, which was granted. (Id.
¶ 7.) Cross-Complainant provides that on November 9, 2022, Cross-Defendants
served their discovery responses. (Id. ¶ 10.) Cross-Complainant provides
that after conferring with Cross-Defendants’ counsel, the parties agreed to
extend the deadline to file a motion to compel further responses to February 3,
2023. (Id. ¶ 14.)
Cross-Complainant provides that
Cross-Defendant’s responses contain 28 agreements to comply and allow the
inspection, copying, and production of documents. (Harvey Decl. ¶ 21.) Cross-Complainant provides only 6
categories of the requested documents have been produced. (Ibid.)
COURTS ORDER
On the Court’s own motion, all the above-referenced discovery motions
are to be heard on 04/26/23 at 8:30 a.m.
Kevin Azzouz and Mike Rhee for each motion may voluntarily serve
(not file) supplemental responses to any of the discovery request at issue in
the motion by 04/12/23. Based upon this
Court’s cursory review of the responses at issue, the responding party is
strongly urged to do so at least in part to mitigate future monetary sanctions.
If the moving/propounding party still
wants this Court to compel a further response to any discovery item, that party
shall file and serve a “Supplemental Separate Statement” (“SSS”) for each
motion, which contains the following: (1) The specific discovery request(s)
verbatim; (2) Each and every response, verbatim, given to that request by the
responding party.
If there was no supplemental response
given subsequently to this Order, the moving party shall indicate that “no
further response was given” to that particular discovery request. THERE SHALL NOT BE ANY FURTHER WRITTEN
DISCUSSION AS TO WHY OR WHY NOT A FURTHER RESPONSE SHOULD BE COMPELLED.
Counsel will be able to orally argue at
the hearing, if needed by the Court.
This SSS must be filed and served by 04/20/23. If there is no SSS filed as to any discovery
motion, this Court will consider that motion to be moot/resolved. However, even if mooted, at the hearing any
party may still request a monetary sanction award.
Additionally, the court will set
and OSC re: striking the answers for RemarketIMS., and AuctionLane Inc. on April
26, 2023, at 8:30 am, as they are both unrepresented corporations.
DEMURRER
DEMURRING PARTY: Defendants Autobuyline Systems Inc. Annette Harmon, and Thomas Harmon (“Demurring Partie”)
RESPONDING PARTY: Plaintiffs Lidd Enterprises, Inc., Danny Lao, and Bessie Lao (“Plaintiffs”)
SERVICE: Filed November 10, 2022
OPPOSITION: Filed March 14, 2023
REPLY: Filed March 23, 2023
RELIEF REQUESTED
Demurring Parties object to Plaintiffs’ first and eighth causes of action.
BACKGROUND
This case arises out of a dispute for the lease of property located at 110 E. Holly Street, Pasadena, California 91103 (“Property”). Plaintiffs filed a third amended complaint (“TAC”) on August 11, 2022, alleging eleven causes of action for (1) breach of contract, (2) waste, (3) negligence, (4) common count, (5) breach of oral agreement, (6) promissory estoppel, (7) conversion, (8) reformation, (9) fraudulent conveyance, (10) fraudulent conveyance, and (11) aiding and abetting.
TENTATIVE RULING
Demurring Parties’ demurrer to Plaintiffs first and eighth causes of action is OVERRULED.
LEGAL STANDARD
A general demurrer may be taken to a complaint where “[t]he pleading does not state facts sufficient to constitute a cause of action.” (Code of Civ. Proc. § 430.10(e).) A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal. App. 4th 740, 747.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice. (Code Civ. Proc. section 430.30(a).) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. (SKF Farms v. Superior Court (1984) 153 Cal. App. 3d 902, 905.) The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action. (Hahn v. Mirda, supra, 147 Cal.App.4th 740, 747.)
DISCUSSION
First Cause of Action for Breach of Contract
Demurring Parties object to Plaintiffs’ first cause of action for breach of contract by arguing they are not parties to the lease.
The essential elements of a breach of contract are: (1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) the defendant’s breach, and (4) the resulting damages to the plaintiff. (Green Valley Landowners Assn. v. City of Vallejo (2015) 241 Cal.App.4th. 425, 433.)
In Plaintiffs’ previous complaints they attached a copy of the commercial lease construction. For some reason, Plaintiffs did not include the lease agreement in their TAC. The agreement contains a signature block for the tenant, which was purportedly signed by Thomas Harmon on behalf of ABS Auto Auctions, Inc. Demurring Parties argue that they are not ABS Auto Auctions, Inc. and that therefore Plaintiffs’ first cause of action fails to state a claim against them.
In their TAC, Plaintiffs allege that Auto Buyline Systems Inc. does business as ABS Auto Auctions Inc. (TAC ¶ 11.) They further contend that ABS Auto Auctions Inc. is the fictious business name of Auto Buyline Systems and that there is not entity named ABS Auto Systems Inc. (Id. ¶12.) Plaintiffs also allege that from November 2017 through May 2019, Auto Buyline Systems made payments and performed other obligations pursuant to the lease. (Id. ¶ 12.1.) Plaintiffs also allege that Auto Buyline Systems, Inc. was the alter ego of Thomas Harmon and Annette Harmon. (Id ¶ 8.)
Plaintiffs’ allegations, at the pleading stage, are sufficient to allege that they entered into a contract with Demurring Parties. Demurring Parties arguments, such as their reference, “for context”, to their assertion that Thomas Harmon never signed the lease, are factual arguments, which are inapplicable at the present stage.
Demurring Parties’ demurring to Plaintiffs’ first cause of action for breach of contract is overruled.
Eighth Cause of Action for Reformation
Demurring Parties also object to Plaintiff’s eighth cause of action for reformation on the grounds that Plaintiff cannot seek reformation to add new parties.
“Reformation is an equitable remedy the essential purpose of which is to ensure the contract, as reformed, reflect the parties’ mutual intention.” (Komorsky v. Farmers Ins. Exchange (2019) 33 Cal.App.5th 960, 974.)
In Panterra GP, Inc. v. Superior Court of Kern County (2022) 74 Cal.App.5th 697, 716, the Court of Appeals issues a peremptory writ directing the superior court to set aside its order sustaining a demurrer. Part of the issues raised on demurring was whether the plaintiff has sufficiently alleged facts sufficient to seek reformation. The plaintiff, Pantera GP, had sought recovery of work for a construction project. (Id. at p. 701.) The construction contract, however, had mistakenly listed a different entity – Panterra Development Ltd., L.L.P as the contractor for the project. (Id. at p. 702.) The Court held that “[t]he operative complaint alleged a prima facie case for reformation. The complaint alleged that [the defendants] intended for Panterra GP to perform the work and that, despite this mutual intent, defendants drafted a contract that mistakenly listed Panterra Development as the contractor for the project.” (Id. at p. 714.)
“Civil Code section 3399 permits reformation of a contract upon application of any aggrieved party. Under this statute, ‘[t]he right to reformation of an instrument is not restricted to the original parties to the transaction [citation].’ [Citation.] Thus, ‘the proposition that a person cannot be made a party to a written instrument by reformation is an overstatement.’ (5 Witkin, Cal. Procedure (5th ed. 2020) Pleading, § 805.) ‘No “new contract” is made when the plaintiff, on a proper showing of ... mistake, asks to have the writing conform to the original oral agreement’ concerning the parties to the contract.” (Panterra GP, Inc, supra, 74 Cal.App.5th 697, 714.)
Demurring Parties argue that the present case is distinguishable from Panterra because here, Plaintiff drafted the lease agreement, while in Panterra, the defendants had drafted the contract. Demurring Parties’ argument is rejected. The ruling and facts from Panterra demonstrate that Plaintiffs can seek the remedy of reformation to correct a mistake in the name of the party to a contract.
Demurring Parties’ demurrer to Plaintiffs’ eighth cause of action is overruled.
CONCLUSION
Demurring Parties’ demurrer to Plaintiffs first and eighth causes of action is OVERRULED.
Moving Parties to give notice.
Dated: March 30, 2023 ___________________________________
Joel L. Lofton
Judge of the Superior Court
Parties who intend to submit on this tentative must send an email to the court indicating their
intention to submit. Parties intending to appear are strongly encouraged to appear remotely. alhdeptx@lacourt.org