Judge: Lee W. Tsao, Case: 22NWCV00831, Date: 2023-02-16 Tentative Ruling

Case Number: 22NWCV00831    Hearing Date: February 16, 2023    Dept: C

NATIONAL COMMERCIAL RECOVERY, INC. v. AMECA MARKET, INC.

CASE NO.:  22NWCV00831

HEARING:  02/16/23

#2

TENTATIVE RULING

Defendant YELLOW OWL PROPERTIES MANAGEMENTS, INC.’s Demurrer to Plaintiff’s First Amended Complaint is SUSTAINED without leave to amend in part and SUSTAINED with 20 days leave to amend in part.

Moving Party to give Notice.

This collections action was filed by Plaintiff NATIONAL COMMERICAL RECOVERY, INC. on September 14, 2022. On September 15, 2022, the operative First Amended Complaint (“FAC”) was filed. Plaintiff alleges the following relevant facts: “Beginning on or about June 21, 2022, and continuing through on or about August 8, 2022, defendants purchased wholesale meats from Plaintiff’s Assignor which Plaintiff’s Assignor delivered to defendants at defendants’ request on an open book account, whereby defendants became indebted to Plaintiff’s Assignor in the net principal amount of $46,795.49.” (FAC ¶12.) “[D]efendants, and each of them, have failed and neglected to pay said sum….” (FAC ¶13.)

The FAC asserts the following causes of action: (1) Open Book Account; (2) Goods Sold and Delivered; (3) Account Stated; and (4) Fraudulent Transfer of Real Property.

Defendant YELLOW OWL PROPERTIES MANAGEMENTS, INC. (“Yellow Owl”) generally and specially demurs to each cause of action.

First through Third Causes of Action

The demurrer to the first through third causes of action is SUSTAINED without leave to amend. In Opposition, “Plaintiff concedes that only the fourth cause of action is alleged against Defendant Yellow Owl.” (Opp. 4:7-22.)

Fourth Cause of Action – Fraudulent Transfer of Real Property

Yellow Owl argues that this cause of action is barred by the statute of limitations.

The statute of limitations for a fraudulent transfer claim is four years after the transfer was made. (Cal. Civ. Code §3439.09.)

In certain cases, the statute may be tolled by plaintiff’s failure to discover the transfer, provided plaintiff files within one year after the transfer was or reasonably could have been discovered; however, in no case may the total time elapsed between transfer and claim amount to more than seven years. (Id.)

If it is shown that an action would otherwise be time-barred, a plaintiff wishing to avoid the statute of limitations bar may rely on the delayed discovery rule. Such a plaintiff bears the burden of proving its application. (Investors Equity Life Holding Co. v. Schmidt (2011) 195 Cal.App.4th 1519, 1533.) “In order to rely on the discovery rule for delayed accrual of a cause of action, a plaintiff whose complaint shows on its face that his claim would be barred without the benefit of the discovery rule must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite a reasonable diligence.” (Fox Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 808.) In assessing the sufficiency of the allegations of delayed discovery, the court places the burden on the plaintiff to “ ‘show diligence; ‘conclusory allegations will not withstand demurrer.’” (Id.)

Here, Plaintiff alleges that the purported fraudulent transfer occurred on October 31, 2016. (FAC ¶22.) This action was not filed until 2022, and Plaintiff does not allege any facts to support a tolling of the statute or the applicability of the delayed discovery rule to bypass the statute of limitations defense.  Facts must be alleged—unsupported conclusory statements do not suffice.

The demurrer to the fourth cause of action is SUSTAINED with 20 days leave to amend.