Judge Joel L. Lofton, Case 23BBCV00494 2023-05-17 Tentative Ruling

Judge: Joel L. Lofton, Case: 23BBCV00494, Date: 2023-05-17 Tentative Ruling

Case Number: 23BBCV00494 Hearing Date: May 17, 2023 Dept: X

Tentative Ruling

Judge Joel L. Lofton, Department X

HEARING DATE: May 17, 2023 TRIAL DATE: No date set.

CASE: SRM STUDIO CITY, LLC, a Washington limited liability company, v. MEGNA HOLDINGS, INC., dba JINKY’S CAFÉ and DOES 1 to 10, inclusive.

CASE NO.: 23BBCV00494

MOTION TO STRIKE

MOVING PARTY: Defendant Megna Holdings, Inc.

RESPONDING PARTY: Plaintiff SRM Studio City

SERVICE: Filed May 1, 2023

OPPOSITION: Filed May 4, 2023

REPLY: Filed May 12, 2023

RELIEF REQUESTED

Defendant moves to strike Plaintiff’s prayer for “late charges and statutory prejudgment interest”. (Complaint at p. 4, section 19(i).)

BACKGROUND

This case arises out of Plaintiff SRM Studio City, LLC’s (“Plaintiff”) unlawful detainer claim against Defendant Megna Holdings, Inc (“Defendant”). Plaintiff alleges it entered into a five-year lease with Defendant for property located at 4000 Colfax Avenue, Studio City, County of Los Angeles, California (“Subject Property”). Plaintiff filed this complaint on March 2, 2023.

TENTATIVE RULING

Defendant’s motion to strike Plaintiff’s prayer for prejudgment interest and late fees is DENIED.

LEGAL STANDARD

Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike a pleading or any part thereof. (Code Civ. Proc., § 435, subd. (b)(1).) The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (Code Civ. Proc., § 436, subd. (a).) The court may also strike all or any part of any pleading not drawn or filed in conformity with California law, a court rule, or an order of the court. (Code Civ. Proc., § 436, subd. (b).) An immaterial or irrelevant allegation is one that is not essential to the statement of a claim or defense; is neither pertinent to nor supported by an otherwise sufficient claim or defense; or a demand for judgment requesting relief not supported by the allegations of the complaint. (Code Civ. Proc., 431.10, subd. (b).) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Code Civ. Proc., § 437.)

DISCUSSION

Defendant moves to strike Plaintiff’s prayer for prejudgment interest and late fees. Defendant’s primary contention is that Plaintiff is not entitled to those measures of damages in an unlawful detainer case.

The first issue is whether Plaintiff may seek prejudgment interest.

“A person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in the person upon a particular day, is entitled also to recover interest thereon from that day, except when the debtor is prevented by law, or by the act of the creditor from paying the debt.” (Civ. Code section 3287, subd. (a).) “The owner of land, the possession of which is wrongfully detained by another, may, as we have seen, recover the rents collected during the period of detention. The court may award him interest thereon at the legal rate, at least where, as here, the rents are certain and fixed in amount.”(Sullivan v. Wellborn (1948) 32 Cal.2d 214, 220.)

Defendant has not established that Plaintiff’s prayer for prejudgment interest is improper here. Defendant does not argue that the specific interest Plaintiff seeks is improper but rather that any prayer for interest is not allowed. However, pursuant to statute and case law, Plaintiff is entitled to seek interest in some circumstances, and Defendant has not shown that Plaintiff’s prayer is outside of the allowable instances.

The next issue is whether Plaintiff’s prayer for late fees are improper. As stated by Plaintiff, the late fees at issue are part of a contractual agreement where Defendant would pay 10% late charges on all late payments of rent. (Opposition at p. 2:8-15.) Defendant argues that such recovery is now allowed in this present action.

Civil Code section, subdivision (b), provides: “Except as provided in subdivision (c), a provision in a contract liquidating the damages for the breach of the contract is valid unless the party seeking to invalidate the provision establishes that the provision was unreasonable under the circumstances existing at the time the contract was made.”

“The California Supreme Court has held that a ‘liquidated damages clause will generally be considered unreasonable, and hence unenforceable under [Civil Code] section 1671 [subdivision] (b), if it bears no reasonable relationship to the range of actual damages that the parties could have anticipated would flow from a breach.’ ” (Jade Fashion & Co., Inc. Harkham Industries, Inc. (2014) 229 Cal.App.4th 635, 646.) “ ‘Whether an amount to be paid upon breach is to be treated as liquidated damages or as an unenforceable penalty is a question of law.’ ” (Ibid.)

Defendant has not established that the late fees provision is unreasonable so as to be an unenforceable penalty. Further, because this is the pleading stage, the deficiencies must appear on the face of the pleadings. (Code Civ. Proc., section 437.) Defendant has not established Plaintiff’s prayer for late fees is invalid.

Lastly, Defendant’s reliance on Los Angeles Municipal Code section 49.99.3 is unavailing at the pleading stage. In order to make a finding that section 49.99.3 applies, this court would need to consider extrinsic evidence, which is improper at the pleading stage. Thus, Defendant’s motion to strike is denied.

CONCLUSION

Defendant’s motion to strike Plaintiff’s prayer for prejudgment interest and late fees is DENIED.

Moving Party to give notice.

Dated: May 17, 2023 ___________________________________

Joel L. Lofton

Judge of the Superior Court