Judge Katherine Chilton, Case 22STLC07163 2023-02-22 Tentative Ruling

Judge: Katherine Chilton, Case: 22STLC07163, Date: 2023-02-22 Tentative Ruling

Case Number: 22STLC07163 Hearing Date: February 22, 2023 Dept: 25

PROCEEDINGS: DEMURRER

MOVING PARTY: Defendant Haven Brown

RESP. PARTY: None

DEMURRER

(CCP §§ 430.10)

TENTATIVE RULING:

Defendant Haven Brown’s Demurrer is OVERRULED.

SERVICE:

[ X ] Proof of Service Timely Filed (CRC, rule 3.1300) OK

[ X ] Correct Address (CCP §§ 1013, 1013a) OK

[ X ] 16/21 Court Days Lapsed (CCP §§ 12c, 1005(b)) OK

OPPOSITION: None filed as of February 19, 2023. [ ] Late [X] None

REPLY: None filed as of February 19, 2023. [ ] Late [X] None

ANALYSIS:

I. Background

On October 28, 2022, Plaintiff Dea Hackett (“Plaintiff”) brought an action against Defendant Haven Brown (“Defendant”) for breach of contract.

On January 4, 2023, Defendant filed the instant Demurrer (“Demurrer”) to Plaintiff’s Complaint.

No opposition has been filed.

II. Judicial Notice

Defendant requests that the Court take judicial notice of the dismissal filed in Hackett v. Brown, Los Angeles Superior Court Case No. 21STCV07058, Exhibit A. (Demurrer p. 2.)

According to Evidence Code § 452, the Court may take judicial notice of matters that include records or rules of another court and facts or propositions of common knowledge, among other matters. Thus, Defendant’s Request is GRANTED.

III. Legal Standard

A demurrer is a pleading that may be used to test the legal sufficiency of the factual allegations in the complaint. (Code of Civ. Proc. § 430.10.) There are two types of demurrers – general demurrers and special demurrers. (See McKenney v. Purepac Pharmaceutical Co. (2008) 167 Cal.App.4th 72, 77.)

General demurrers can be used to attack pleadings for failure to state facts sufficient to constitute a cause of action or for lack of subject matter jurisdiction. (Code Civ. Proc. § 430.10(e); McKenney, 167 Cal.App.4th at 77.) Such demurrers can be used only to challenge defects that appear on the face of the pleading or from matters outside the pleading that are judicially noticeable; evidence or extrinsic matters are not considered. (Code of Civ. Proc. §§ 430.30, 430.70; Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) For the purpose of testing the sufficiency of the cause of action, the Court admits “all material facts properly pleaded” and “matters which may be judicially noticed,” but does not consider contentions, deductions, or conclusions of fact or law. [Citation].” (Blank, 39 Cal.3d at 318.) It gives these facts “a reasonable interpretation, reading it as a whole and its parts in their context.” (Ibid.). At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) The face of the complaint includes exhibits attached to the complaint. (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94.) "If facts appearing in the exhibits contradict those alleged, the facts in the exhibits take precedence." (Holland v. Morse Diesel Intern., Inc. (2001) 86 Cal.App.4th 1443, 1447.)

Special demurrers can be used to attack the pleadings on grounds that the pleading is uncertain, ambiguous, and unintelligible, or in a contract case, for failure to allege whether a contract is oral or written. (Code Civ. Proc., § 430.10(f).) However, special demurrers are not allowed in limited jurisdiction civil actions and any grounds for special demurrers must be raised as affirmative defenses in the answer. (Code Civ. Proc., § 92(c).)

Moreover, Code of Civil Procedure § 430.41 requires that “[b]efore filing a demurrer pursuant to this chapter, the demurring party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.” (Code Civ. Proc., § 430.41(a).) The parties are to meet and confer at least five days before the date the responsive pleading is due. (Code Civ. Proc., § 430.41(a)(2).) Thereafter, the demurring party shall file and serve a declaration detailing their meet and confer efforts. (Code Civ. Proc., § 430.41(a)(3).)

IV. Discussion

A. Meet and Confer Requirement

On December 20, 2022, Defendant’s counsel filed a declaration regarding his efforts to meet and confer with Plaintiff. (12-20-22 Alexander Decl.) Another declaration was filed along with the Demurrer on January 4, 2023.

In reviewing both declarations, the Court makes the following findings.

On December 2, 2022, Defendant’s counsel sent a meet and confer letter to Plaintiff’s attorneys identifying the reasons why the Complaint was deficient. (12-20-22 Alexander Decl. ¶ 2, Ex. A.) Defense counsel did not receive a response to the letter. (Ibid.) Subsequently, defense counsel attempted to reach Plaintiff’s attorneys by telephone, but was unable to reach them and left messages for each of them. (Ibid. at ¶ 3.)

On December 21, 2022, defense counsel received a written response indicating that Plaintiff “is unable or unwilling to address the defects in her claims.” (1-4-23 Alexander Decl. ¶ 3, Ex. C.)

The Court finds that Defendant’s counsel’s declarations are sufficient to satisfy the meet and confer requirement.

B. Cause of Action – Breach of Contract

a. Plaintiff’s Allegations

According to the Complaint, Plaintiff and Defendant “lived together representing themselves to each other and others socially as ‘husband and wife’ in a single-family residence located 23123 Galva Avenue, Torrance, California 90505 since 1999.” (Compl. ¶ 5.) Plaintiff states that on February 23, 2019, Defendant physically attacked her causing her significant physical and psychological injuries. (Ibid. at ¶¶ 7-8.) Defendant was criminally charged and prosecuted. (Ibid. at ¶¶ 10-12.) In November 2020, Defendant Brown filed an unlawful detainer action against Plaintiff Hackett in the Los Angeles Superior Court, Case No. 20IWUD00802. (Ibid. at ¶ 14.) In February 2021, Plaintiff Hackett filed a civil lawsuit against Defendant Brown “for 11 causes of action, including, but not limited to assault, battery, intentional infliction of emotional distress” arising out of the incident in February 2019, Case No. 21STCV07058. (Ibid. at ¶ 18.) Plaintiff Hackett has attached the First Amended Complaint as Exhibit 1 to the Complaint. (Ibid.) On or about October 13, 2021, immediately prior to trial, Plaintiff Hackett and Defendant Brown entered into a stipulation and settled the unlawful detainer action, Case No. 20IWUD00802, as follows:

· Brown to pay Hackett the sum of $15,000.00 within 15 days of October 14, 2021.

· If Brown pays Hackett on or before October 29, 2021, Hackett will vacate premises within (30) days of October 14, 2021, i.e., November 15, 2021.

· Court shall retain jurisdiction pursuant to CCP 664.6.

· Settlement is not an admission of liability for either party. Brown’s payment to Hackett will constitute an off-set of any "monetary damages that may be awarded" in Los Angeles County Case # 21STCV07058.

(Ibid. at ¶ 20, Ex. 2.) Both parties adhered to the settlement. (Ibid.)

On or about July 25, 2021, prior to the civil trial in Case No. 21STCV07058, the parties agreed to a settlement of $200,000 through mediation. (Ibid. at ¶ 21.) Plaintiff alleges that “[d]uring the mediation, it was made unequivocally clear that the settlement was ‘NEW MONEY’ and that the settlement amount of $200,000.00 did not include the credit of $15,000.00” that Brown paid to Hackett according to the settlement in the unlawful detainer action.” (Ibid. at ¶ 22.) Given that “[n]o monetary damages were ‘awarded’ because the matter was resolved/settled through the mediation process,” the sum paid in the unlawful detainer action did not off-set the settlement in the civil action. (Ibid. at ¶¶ 22-23.) Brown and Hackett signed the Settlement Agreement in Case No. 21STCV07058 on August 2 and 3, 2022, respectively. (Ibid. at ¶¶ 24-25.)

On September 4, 2022, Hackett’s counsel sent an email to Brown’s counsel regarding the settlement check that had been due on September 2, 2022. (Ibid. at ¶ 26, Ex. 4.) On September 7, 2022, Brown’s counsel responded with a photo of a check written by Brown in the amount of $185,000, dated September 3, 2022. (Ibid. at ¶ 27, Ex. 5.) Hackett’s attorney responded to the email on September 7, 2022. (Ibid. at ¶ 28, Ex. 6.) He received the check in the amount of $185,000.00 on September 9, 2022. (Ibid. at ¶ 29.) Hackett’s attorney sent another email to Brown’s attorney demanding the full amount of $200,000.00 as agreed during the mediation, by September 14, 2022. (Ibid. at ¶ 30, Ex. 7.) On September 15, 2022, Hackett’s attorney “crossed-out BROWN'S language ‘Final Payment’ and wrote ‘Under Protest - Payment Not Accepted As Payment In Full’ on the front and back of the check” and deposited the check in the amount of $185,000.00 into the attorney/client trust account. (Ibid. at ¶ 31, Ex. 8.) On or about September 26, 2022, Hackett’s representatives sent another letter to Brown’s attorneys regarding receiving the full payment by September 30, 2022, and informing “that the check was deposited ‘under protest.’” (Ibid. at ¶ 32, Ex. 9.) On September 26, 2022, Brown’s attorney responded to Hackett’s attorneys stating that the $185,000.00 check “was in accordance with the unlawful detainer settlement agreement.” (Ibid. at ¶ 33, Ex. 10.) Plaintiff disagrees and states that there is “absolutely “No Mention” of the any [sic] credit regarding the Unlawful Detainer Settlement Agreement” in the civil lawsuit agreement. (Ibid.)

Plaintiff alleges that “BROWN continues to harass Hackett by ‘intentionally’, ‘knowingly’ and in ‘bad-faith’, making a payment that was less than the contractually agreed upon amount of $200,000.00” as both Brown and his attorneys are aware that the $15,000 credit was not included in the settlement for the civil lawsuit. (Ibid. at ¶ 34.)

Pursuant to these allegations, Plaintiff claims that Defendant has breached the Settlement Agreement in Case No. 21STCV07058 by failing to tender the payment to Hackett pursuant to the Agreement. (Ibid. at ¶ 38.) As a result, Plaintiff has “suffered damages in the amount of $15,000.00, plus costs and interest in accordance to applicable law.” (Ibid. at ¶ 39.)

b. Defendant’s Demurrer

Defendant demurs to Plaintiff’s cause of action for breach of contract on the ground that it fails to state facts sufficient to constitute a cause of action. (Demurrer pp. 2-3.) Defendant argues that “Hackett’s allegations, coupled with the documents attached to the Complaint, show that the debt she is suing on has been discharged or is otherwise barred.” (Demurrer p. 6.) He states that “Hackett ignores a key exception to section 1526(a)’s application,” as § 1526(c) provides that “acceptance of a draft constitutes an accord and satisfaction if the check is issued in conjunction to the release of a claim.” (Ibid. at p. 7.) Alternatively, “Hackett has plead an accord and satisfaction of her claim under Commercial Code § 3311.” (Ibid. at p. 7.) Commercial Code § 3311 supersedes Civil Code § 1526 and states that “an accord and satisfaction exists when a debtor in good faith tenders a check as full satisfaction of a claim, the amount of the claim was subject to a bona fide dispute, and the claimant cashed the check.” (Ibid. at pp. 6-7.) Moreover, “if the amount tendered was offered in full satisfaction of the claim, and the amount was not returned within 90 days, the debt is discharged” pursuant to Commercial Code § 3311(b).” (Ibid. at p. 7.) Here, Hackett accepted the check tendered in September 2022, as final payment and, thus, Brown’s debt under the Civil Settlement has been discharged. (Ibid. at p. 8.)

Moreover, Plaintiff’s claims are barred under the Civil Settlement, as “Hackett agreed to dismiss her then pending lawsuit after her receipt of Brown’s payment.” (Ibid. at p. 9.) Hackett agreed that the “‘dismissal shall operate as an adjudication upon the merits and a bar to any subsequent lawsuits arising out of or in any way relating in any manner whatsoever to the facts set forth [in the Civil Settlement]’” citing to the Civil Settlement ¶ 3. (Ibid.) Defendant argues that the allegations in the civil lawsuit are incorporated into the instant Complaint for breach of contract and thus, barred by the dismissal of the civil lawsuit. (Ibid.)

c. Analysis

“To prevail on a cause of action for breach of contract, the plaintiff must prove (1) the contract, (2) the plaintiff's performance of the contract or excuse for nonperformance, (3) the defendant's breach, and (4) the resulting damage to the plaintiff. (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.) “A written contract may be pleaded either by its terms – set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference – or by its legal effect. [Citations.] In order to plead a contract by its legal effect, plaintiff must ‘allege the substance of its relevant terms. This is more difficult, for it requires a careful analysis of the instrument, comprehensiveness in statement, and avoidance of legal conclusions.’ [Citation.]” (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489.)

Here, Plaintiff alleges that following mediation in Case No. 21STCV07058, a civil lawsuit filed for Plaintiff’s personal injuries, Plaintiff and Defendant entered into a Settlement Agreement whereby Defendant was to pay Plaintiff the settlement amount of $200,000 by September 2, 2022. (Compl. ¶ 25, Ex. 3.) Plaintiff states that Defendant breached the Settlement Agreement by failing to make a timely payment and issuing a check for less than the settlement amount. (Ibid. at ¶¶ 26-34.) Once Defendant issued the late check, Plaintiff’s counsel crossed-out the phrase “Final Payment” and noted “Under-Protest – Payment Not Accepted As Payment In Full” and deposited the check into the attorney/client trust account. (Ibid. at ¶ 31.) Plaintiff also communicated her opposition to Defendant regarding the amount tendered. (Ibid. at ¶¶ 28-32.) Plaintiff alleges that Defendant wrote the check “‘intentionally’, ‘knowingly’ and in ‘bad-faith’, making a payment that was less than the contractually agreed upon amount of $200,000.00” as Defendant and his attorneys are aware that the $15,000 credit was not included in the settlement for the civil lawsuit. (Ibid. at ¶ 34.) As a result of Defendant’s breach, Plaintiff has incurred damages in the amount of $15,000, plus costs and interest. (Ibid. at ¶ 39.)

Defendant argues that Plaintiff’s cause of action for breach of contract is barred pursuant to Civil Code § 1526(c) and Commercial Code § 3311, as Plaintiff’s attorneys accepted the check as full satisfaction of the debt, thus, discharging all of Defendant’s debt to Plaintiff.

Courts have held that conflicting provisions of Commercial Code § 3311 supersede Civil Code § 1526. (Woolridge v. J.F.L. Electric, Inc. (2002) 96 Cal.App.4th. Supp. 52, 59; Directors Guild of Am. v. Harmony Pictures, Inc. (C.D. Cal. 1998) 32 F. Supp. 2d 1184, 1192.) Commercial Code § 3311 states:

(a) If a person against whom a claim is asserted proves that (1) that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, (2) the amount of the claim was unliquidated or subject to a bona fide dispute, and (3) the claimant obtained payment of the instrument, the following subdivisions apply.

(b) Unless subdivision (c) applies, the claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.

(1) The claimant, if an organization, proves that (A) within a reasonable time before the tender, the claimant sent a conspicuous statement to the person against whom the claim is asserted that communications concerning disputed debts, including an instrument tendered as full satisfaction of a debt, are to be sent to a designated person, office, or place, and (B) the instrument or accompanying communication was not received by that designated person, office, or place.

(2) The claimant, whether or not an organization, proves that within 90 days after payment of the instrument, the claimant tendered repayment of the amount of the instrument to the person against whom the claim is asserted. This paragraph does not apply if the claimant is an organization that sent a statement complying with subparagraph (A) of paragraph (1).

(d) A claim is discharged if the person against whom the claim is asserted proves that within a reasonable time before collection of the instrument was initiated, the claimant, or an agent of the claimant having direct responsibility with respect to the disputed obligation, knew that the instrument was tendered in full satisfaction of the claim.

First, the Court finds that Plaintiff has pleaded sufficient facts to assert a cause of action for breach of contract. Second, Plaintiff’s claim is not barred by Commercial Code § 3311 as Plaintiff alleges that Defendant has tendered the check in bad faith “intentionally” and “knowingly” that the Settlement Agreement for $200,000 in the civil lawsuit did not include the $15,000 tendered for the unlawful detainer lawsuit.

Finally, the Court finds that Plaintiff’s dismissal of the Case No. 21STCV07058 without prejudice in December 2022 does not bar the instant lawsuit for breach of contract. The Settlement Agreement states that “Plaintiff hereby agrees to dismiss with prejudice any and all suits arising out of or related in any manner whatsoever to the facts set forth above and the pleadings contained in said lawsuits, with prejudice, including case number 21STCV07058 now pending in the Superior Court of the State of California for the County of Los Angeles within five (5) days of the date of receipt of the settlement monies and such dismissal shall operate as an adjudication upon the merits and a bar to any subsequent lawsuits arising out of or in any way relating in any manner whatsoever to the facts set forth above.” (Compl., Ex. 3 at ¶ 3.) However, the instant action is brought pursuant to the Settlement Agreement as a breach of contract cause of action and does not depend on facts alleged in Plaintiff’s civil lawsuit for bodily injuries.

For these reasons, the Court finds that the Complaint states sufficient facts for a breach of contract cause of action. Accordingly, Defendant’s Demurrer is OVERRULED.

V. Conclusion & Order

For the foregoing reason,

Defendant Haven Brown’s Demurrer is OVERRULED.

Moving party is ordered to give notice.