Judge: Joseph Lipner, Case: 22STCV31416, Date: 2023-10-17 Tentative Ruling

Case Number: 22STCV31416    Hearing Date: October 17, 2023    Dept: 72

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES

DEPARTMENT 72

TENTATIVE RULING

Defendant Cherie Chen (“Defendant”) filed a demurrer to third cause of action in the First Amended Complaint (“FAC”).

Defendant’s demurrer to third cause of action in the FAC is SUSTAINED WITHOUT LEAVE TO AMEND.   Defendant shall answer the FAC within 10 days.  Defendant shall give notice.

Background

            On September 26, 2022, Plaintiff America Best Construction Inc. (“Plaintiff”) filed a complaint against Defendants Cherie Chen and Does 1 through 10, alleging causes of action for: (1) breach of oral contract; (2) breach of written contract; and (3) money had and received. The complaint arises from the alleged failure to pay money pursuant to a promissory note.

            On December 2, 2022, Defendant Cherie Chen (“Defendant”) filed a demurrer to the third cause of action in the complaint. The demurrer was made on the grounds that the third cause of action in the complaint was insufficient because it was preempted by the causes of action for breach of contract. Plaintiff opposed the demurrer.

            On April 20, 2023, after hearing and oral argument, the Court sustained Defendant’s demurer to the third cause of action in the complaint with 10 days leave to amend. The Court sustained the demurrer on the grounds that Plaintiff did not allege the absence of an enforceable agreement which would entitle Plaintiff to pursue the quasi-contractual claim of money had and received.

            On April 28, 2023, Plaintiff filed the operative First Amended Complaint (“FAC”) alleging causes of action for: (1) breach of oral contract; (2) breach of written contract; and (3) money had and received.

            On May 5, 2023, Defendant filed and served a demurrer to the third cause of action in the FAC. On July 5, 2023, Plaintiff filed and served its opposition. On July 10, 2023, Defendant filed and served a reply brief.  

Legal Standard

             “A demurrer tests the sufficiency of a complaint as a matter of law.”  (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1358.) “[T]he court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded.”  (Ibid.)  In testing the sufficiency of the complaint, the court must assume the truth of (1) the properly pleaded factual allegations; (2) facts that can be reasonably inferred from those expressly pleaded; and (3) judicially noticed matters. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) 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.) Accordingly, “[w]hether the plaintiff will be able to prove the pleaded facts is irrelevant to ruling upon the demurrer.” (Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 609-10.)

            Where a demurrer is sustained, leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the plaintiff to show the court that a pleading can be amended successfully. (Ibid.) However, “[i]f there is any reasonable possibility that the plaintiff can state a good cause of action, it is error to sustain a demurrer without leave to amend.” (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 245). 

Discussion

Defendant contends that Plaintiff’s breach of contract causes of action preclude a cause of action for money had and received. Plaintiff contends that it is entitled to plead inconsistent counts and allegations.

            “It is true that modern rules of pleading generally permit plaintiffs to set forth alternative theories in varied and inconsistent counts.” (Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1388.) A cause of action for money had and received “sounds in quasi-contract” and is not a contractual claim. (Hillco Inc. v. Stein (1978) 82 Cal.App.3d 322, 327.) “[A] plaintiff may plead inconsistent claims that allege both the existence of an enforceable agreement and the absence of an enforceable agreement.”  (Klein v. Chevron U.S.A., Inc., supra, 202 Cal.App.4th 1342, 1389.)  “A plaintiff may not, however, pursue or recover on a quasi-contract claim if the parties have an enforceable agreement regarding a particular subject matter.” (Id. at p. 1388.) [A]s a matter of law, a quasi-contract action . . . does not lie where, as here, express binding agreements exist and define the parties’ rights.” (California Medical Ass’n, Inc. v. Aetna U.S. Healthcare of California, Inc. (2001) 94 Cal.App.4th 151, 172.)

To maintain a claim rooted in quasi-contract, a plaintiff “must allege that the express contract is void or was rescinded in order to proceed with its quasi-contract claim.” (Lance Camper Manufacturing Corp. v. Republic Indemnity Co. (1996) 44 Cal.App.4th 194, 203.) A party will be precluded from asserting a quasi-contract claim where a party fails to deny the existence or enforceability of a contractual agreement. (Klein v. Chevron U.S.A., Inc., supra, 202 Cal.App.4th 1342, 1389-90.)

            The allegations in the FAC preclude a cause of action for money had and received. As to the alleged oral and written contracts, the FAC does not deny their validity or enforceability. (FAC, ¶¶ 12-15 and 17-23.) As to the third cause of action, the FAC alleges that “the oral and written agreements may be unenforceable, and in the event this is true alleges the equitable right to claim money had and pleads in the alternative.” (Id., ¶ 26.)  However, Plaintiff has not expressly alleged that the oral or written agreements are void, were rescinded, or are unenforceable. Indeed, Plaintiff has not asserted any reason that the agreements are unenforceable.  As in Klein, Plaintiff’s “pleadings and briefs do not provide any explanation as to why the. . . agreement referenced in their breach of contract claim might be unenforceable or otherwise not qualify as a contract.”  (Klein, supra, 202 Cal.App.4th at1389.  The “may be unenforceable” language that Plaintiff added does not mean anything substantive and does not meet the requirements of Klein.  As alleged by Plaintiff, the oral and written contracts define the parties’ rights and any entitlement to relief that may exist. The third cause of action in the FAC is therefore insufficient.

            The Court SUSTAINS the demurrer of Defendant to the third cause of action in the FAC without leave to amend. The opposition raises no argument as to how the FAC can be successfully amended to state a valid cause of action for money had and received. Plaintiff has not met its burden showing a reasonable possibility of amendment under Goodman v. Kennedy, supra, 18 Cal.3d 335, 348.

            Moving party is ordered to give notice.