Judge: Joel R Wohlfeil, Case: 37-2023-00009531-CU-MC-CTL, Date: 2024-03-15 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - March 12, 2024

03/15/2024  09:00:00 AM  C-73 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Joel R. Wohlfeil

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Civil - Unlimited  Misc Complaints - Other Demurrer / Motion to Strike 37-2023-00009531-CU-MC-CTL HAKAKHA VS NOBEL [IMAGED] CAUSAL DOCUMENT/DATE FILED: Demurrer, 12/01/2023

The general Demurrers (ROA # 58, 87, 91) of Defendants MAHIN NOBEL, as Co-Trustee of the Nobel Family Trust under that certain Declaration of Trust dated February 18, 1998 ('Trust)', and as Successor-in-Interest of John Iradj Nobel, Deceased; MELODY ABELES, as Co-Trustee of the Trust; MELISSA GALICOT, as Co-Trustee of the Trust; and JN FINANCIAL SERVICES, INC. ('Defendants') to causes of action 3 - 5 in the Second Amended Complaint ('SAC') by Plaintiffs PARVIZ HAKAKHA and JUDY HAKAKHA ('Plaintiffs'), is SUSTAINED.

Leave to amend will not be permitted to allege the same causes of action unless plaintiffs are able to articulate the ability to 'plead around' the applicable limitations periods.

This ruling is premised on the analysis set forth below: General Demurrer: 3rd COA -- Breach of Written Contract A four year limitations period applies to '[a]n action upon any contract, obligation or liability founded upon an instrument in writing ....' Code Civ. Proc. 337(a).

A two year limitations period applies to '[a]n action upon a contract, obligation or liability not founded upon an instrument of writing ....' Code Civ. Proc. 339(1).

A contract may be 'in writing' for purposes of the statute of limitations even though it was accepted orally or by an act other than signing. Amen v. Merced County Title Co. (1962) 58 Cal. 2d 528, 532.

'An action is on a written contract, even though it is based on a promise implied from the writing.' Id. In Lucioni v. Bank of America, N.A. (2016) 3 Cal. App. 5th 150, Plaintiff alleged that Bank of America breached a contract with him by failing to grant him a promised loan modification. The pleading alleged that in 2009 Bank of America filed a Notice of Default, but after a telephone conversation with Bank of America's representative, Plaintiff entered into a trial payment program. Bank of America represented it would offer a permanent loan modification if he successfully made three required monthly payments.

Plaintiff successfully made those payments, but he never received a loan modification. Id. at 156. The trial court sustained a demurrer and this was affirmed on appeal. The opinion states: 'The statute of limitations on a claim for a breach of an oral contract is two years (Code Civ. Proc., § 339) and Lucioni does not argue that the lawsuit was timely filed under that provision. Instead, Lucioni Calendar No.: Event ID:  TENTATIVE RULINGS

3080999 CASE NUMBER: CASE TITLE:  HAKAKHA VS NOBEL [IMAGED]  37-2023-00009531-CU-MC-CTL argues that the four-year statute of limitations for written contracts (Code Civ. Proc., § 337) applies because he has check receipts that demonstrate that he performed on the oral contract. His claim is that the written evidence of performance converts the oral contract into a written one.

To support this argument, Lucioni relies on Amen v. Merced County Title Co. (1962) 58 Cal. 2d 528, in which the buyers and sellers of a tavern executed a written sales contract. Our Supreme Court held that the buyers' lawsuit against the defendant escrow company for violating the written escrow instructions was 'on a written contract' for purposes of the statute of limitations, even though the company orally agreed to perform the escrow instructions. (Id. at p. 533.) Central to the Supreme Court's reasoning was that the longer limitations period for actions on written contracts was warranted where a writing provided 'evidence in permanent form of the terms of the agreement.' (Id. at pp.

532–533.) Here, in contrast, there was never a written agreement providing evidence in permanent form of the contract terms Lucioni alleges, including a promise by Bank of America to offer a permanent loan modification if Lucioni made three monthly trial payments. Amen supports the proposition that in some cases a written contract may be accepted orally, but not the proposition that an oral contract is treated as a written contract for statute of limitations purposes simply because a party offers some written evidence of performance. The terms (or even existence) of the contract may be in dispute here, where they could not have been in Amen. The cause of action is barred by the two-year statute of limitations applicable to an alleged breach of an oral contract, and such a defect cannot be cured by amendment.

The trial court did not err in sustaining without leave to amend the demurrer to the breach of contract cause of action.' Id. at 164, 165.

Paragraph 14 of the FAC alleges as follows: 'The October 2018 meeting led to the preparation, by John Nobel and/or David Patel of a written 'Summary for owner Distribution 2012 - 2018' setting forth the distributions of income from the Properties to Plaintiffs and to the Nobel Trust during the referenced period (the 'Summary'). The Summary also set forth the amount of rents and profits which was due to plaintiffs at that time, and an implied promise to make payment of that amount to plaintiffs. A true and correct copy of the Summary is attached to this complaint as Exhibit 1 and by this reference incorporated herein.' (emphasis added) Paragraphs 37 - 41 within the third cause of action allege that a breach of the 'Summary' agreement solely gives rise to the present action. It is not alleged that any prior written management contract constitutes the purported agreement.

The 'Summary' document attached to the SAC as 'Exhibit 1' is a spreadsheet setting forth columns of numbers. There is no language within this document reciting the terms of an agreement, and it is not signed or acknowledged by any person or entity. In addition, new paragraphs 15 - 17 and 19 describe meetings in which oral representations were made concerning the import and meaning of the Summary.

As alleged, representations were made concerning amounts due to Plaintiffs as reflected within the Summary.

The attached 'Summary' document does not set forth any conditions, covenants, obligations or 'sums due.' It instead is limited to listing income, expenses and distributions for each of the three properties.

This document does not recite the terms of an offer, acceptance or consideration, which are required in order for a document to be enforced as a contract. Instead, these contract terms are stated in the alleged oral representations. As alleged, there existed a promised to pay to Plaintiffs the 'undistributed net income for the period from 2012 through 2018 .... John Nobel further explained that commitment on behalf of the Nobel Trust would involve payments over a period of time, rather than in a single lump sum.' SAC at ¶ 17.

As alleged, further oral representations were made 'to Plaintiffs that the periodic payments of the amount shown to be due by the Summary would be made monthly in the amount of at least $100,000 per month.' SAC at ¶ 19.

Calendar No.: Event ID:  TENTATIVE RULINGS

3080999 CASE NUMBER: CASE TITLE:  HAKAKHA VS NOBEL [IMAGED]  37-2023-00009531-CU-MC-CTL 'The Nobel Trust ceased making periodic payments to Plaintiffs without explanation after the payment of April 23, 2020, in breach of the Summary and the partial performance of the Summary through April 23, 2020.' SAC at ¶ 21.

As stated, the longer limitations period for actions on a written contract is warranted where a writing provides evidence in permanent form of the terms of the agreement. Here, as in Lucioni v. Bank of America, there is no written agreement providing evidence in permanent form of the contract terms. As a result, the SAC alleges the existence of an oral agreement. This agreement was breached in April 2020, which is more than two years before this action was commenced. As a result, this cause of action is time barred and the Demurrer is sustained on this basis.

General Demurrer: 4th COA -- Book Account 'A book account is defined as a detailed statement, kept in a book, in the nature of debit and credit, arising out of contract or some fiduciary relation .... A necessary element is that the book shall show against whom and in whose favor the charges are made.' Biltmore Press v. Usadel (1970) 6 Cal. App. 3d 896, 900 (internal citations omitted).

A four year limitations period applies to '[a]n action to recover (1) upon a book account whether consisting of one or more entries; (2) upon an account stated based upon an account in writing, but the acknowledgment of the account stated need not be in writing; (3) a balance due upon a mutual, open and current account, the items of which are in writing ....' Code Civ. Proc. 337(b).

In Filmservice Laboratories, Inc. v. Harvey Bernhard Enterprises, Inc. (1989) 208 Cal. App. 3d 1297, 1307, 1308, the opinion states: 'Filmservice argues that the first and second causes of action are timely since they properly plead, respectively, a cause of action for open book account and account stated, which are subject to a four-year statute of limitations ... as opposed to a two-year statute of limitations applicable to oral contracts .... Filmservice urges us to disregard the prior pleading of an oral contract on the ground that such contract was superseded by the pleading of an open book account and an account stated.

We reject Filmservice's assertion that these causes of action are not barred by the two-year statute of limitations applicable to oral contracts. We again find Filmservice's underlying premise to be fatally flawed. The facts alleged in the third amended complaint do not give rise to a reasonable inference that the oral contract between Filmservice and Producers was superseded by an open book account or account stated.

The record clearly establishes what Filmservice is attempting to do is transmute an untimely action for breach of an oral contract into a timely action based on the above common counts. Its effort must fail.

In the original complaint Filmservice alleged a cause of action based on an oral contract. The statute of limitations began to run on that cause of action on June 27, 1983, the date when Producers allegedly breached the oral contract by failing to pay Filmservice the sum of $39,115.84.

Both common counts in the first and second causes of action are based on the same basic facts as the oral contract cause of action, i.e., the failure of Producers to pay the sum of $39,115.84 which became due on June 27, 1983. In fact, Filmservice conceded in the third amended complaint that the action was based on a contract, i.e., Producers and Bernhard 'contracted to perform the obligation upon which this action is brought....' Contrary to Filmservice's claim otherwise, no facts have been alleged which give rise to any reasonable inference that the oral contract was superseded by an open book account or account stated agreement. The mere existence of two invoices addressed to Producers and prepared by Filmservice ...

do not evidence such accounts. Those invoices simply memorialize the oral contract .... There is in fact Calendar No.: Event ID:  TENTATIVE RULINGS

3080999 CASE NUMBER: CASE TITLE:  HAKAKHA VS NOBEL [IMAGED]  37-2023-00009531-CU-MC-CTL no allegation that Producers/Bernhard and Filmservice agreed to forego the oral contract and proceed on the basis of an existing account ....' (emphasis added, internal citations omitted) This cause of action incorporates and relies on the preliminary allegations regarding the existence of the 'Summary for owner Distribution 2012 - 2018.' However, this spreadsheet does not constitute an account book stating a list of debits and credits arising out of some kind of fiduciary relation (e.g., vendor/customer). The alleged oral representations summarized above do not constitute a statement kept in a book of debits and credits. The written spreadsheet does not transmute the oral agreement into an account stated. The Demurrer is sustained on this basis.

General Demurrer: 5th COA -- Account Stated An account stated is a written document which exhibits the state of account between parties and the balance owing one to the other; and when assented to, either expressly or impliedly, it becomes a new contract. Biltmore Press v. Usadel, supra at 900.

This cause of action also incorporates and relies on the preliminary allegations regarding the existence of the 'Summary for owner Distribution 2012 - 2018.' However, this spreadsheet does not exhibit a written statement of the account between parties and the balance owing one to the other. The Demurrer is sustained on this basis.

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