Judge: Lee W. Tsao, Case: 22NWCV01025, Date: 2023-09-21 Tentative Ruling

Case Number: 22NWCV01025    Hearing Date: September 21, 2023    Dept: C

TIANYI INTERNATIONAL TRADE, INC. v. SH, LLC

CASE NO.:  22NWCV01025

HEARING:  09/21/23

#7

Plaintiff/Cross-Defendant TIANYI INTERNATIONAL TRADE, INC.’s Demurrer to SH LLC’s Cross-Complaint is OVERRULED.  Cross-Defendant to answer within 20 days. 

Opposing Party to give Notice.

Cross-Defendant TIANYI INTERNATIONAL TRADE, INC.’s Request for Judicial Notice is GRANTED as to the existence of the documents, but not as to any hearsay statements contained therein. (Cal. Ev. Code §452.)

This breach of contract action was filed by Plaintiff/Cross-Defendant TIANYI INTERNATIONAL TRADE, INC. (“Cross-Defendant” or “Tianyi”)) against Defendant/Cross-Complainant SH, LLC (“Cross-Complainant” or “SH”) and Defendant HUA LIU on October 17, 2022.

On March 7, 2023, the subject Cross-Complaint (“XC”) was filed by Cross-Complainant SH, LLC.

The XC alleges the following relevant facts: “On or about August 30, 2021, Cross-Complainant SH, LLC and Cross-Defendant TIANYI entered into a Standard Industrial/Commercial Multi-Tenant Lease- Gross Agreement where Cross-Defendant TIANYI agreed to rent an approximately 4880 square feet of leasable commercial space, located at 6846 Suva Street, Bell Gardens, California 90201 (hereinafter the ‘Premises’) owned by Cross-Complainant….” (XC ¶4.) “Pursuant to Paragraph 1.3 of the Lease, Cross-Complainant… leased the Premises to Cross-Defendant… for a term of three (3) years, commencing on September 1, 2021 and ending on August 31, 2024. The ‘Base Rent’ at the commencement of the Lease to be paid was for the amount of $5,124.00 per month.” (XC ¶5.) “On or about July 31, 2022, Cross-Defendant TIANYI improperly and unilaterally terminated without proper cause and without valid authorization and consent granted at the time of its termination of the subject lease entered into with Cross-Complainant… and unilaterally and improperly vacated the subject Premises.” (XC ¶6.) “As part of executing this Lease and pursuant to Paragraph 1.7, Cross-Complainant… accepted Cross-Defendant[‘s]… $20,496.00 Security Deposit in rental of the subject Premises. As discussed herein, pursuant to Paragraph 5, ‘If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any portion of said Security Deposit for the payment of any amount already due Lessor, for Rents which will be due in the future, and/or to reimburse or compensate Lessor for any liability, expense, loss or damage which Lessor may suffer or incur by reason thereof.’… Cross-Complaint… and Defendant… have thus, under the subject terms and conditions of the Lease… properly and legitimately retained complete possession of Cross-Defendant[‘s] paid security deposit in proper application for and compensation for the unpaid remainder business rent owed under the subject lease term entered.” (XC ¶7.) “On or about October 17, 2022, Cross-Complainant… and Defendant HUA LIU were served with the subject lawsuit filed by Cross-Defendant TIANYI, seeking its alleged damages arising from this matter involving the subject Leased Premises and alleged failure to return the security deposit previously paid under the terms and conditions of the Lease….” (XC ¶8.) “[I]t is Cross-Defendant… who actually and legitimately owes to [Cross-Complainant] and Defendant HUA LI certain payment of its certain alleged monetary damages for the remainder unpaid business rent owed under the subject Lease entered arising from Cross-Defendant’s improper and unilateral termination and unauthorized and non-consented termination of the lease and subsequent vacating of the subject Premises….” (XC ¶9.)

The XC asserts one sole cause of action for Breach of Contract.

Cross-Defendant generally demurs, arguing that the XC fails for the following reasons:

·        SH, LLC has not established their lawful performance of the Lease as SH, LLC failed to provide Tianyi any required Abatement of rent, nor did SH, LLC timely commence the required substantial and meaningful repair and restoration of the Premises;

·        Under the express terms of the Lease, SH’s claims against Tianyi are foreclosed. Tianyi lawfully terminated the Lease pursuant to the explicit remedies afforded Tianyi flowing from SH’s breach of the Lease and failure to perform;

·        SH is estopped from any allegation that Tianyi breached the Lease because SH provided written consent to Tianyi that it could vacate the Premises and terminate the Lease prior to the Lease Expiration Date; and

·        The common law doctrines of Frustration of Purpose, Impossibility, and Impracticability excused Tianyi of further performance of its obligations under the Lease.

In Opposition, Cross-Complainant argues that the claim for breach of contract is adequately pled for purposes of surviving demurrer.

First Cause of Action– Breach of Contract

Whether it is written, oral, or implied, the elements of a cause of action for breach of contract are as follows: (1) the existence of a contract; (2) Plaintiff’s performance or excused non-performance; (3) Defendants’ breach; and (4) resulting damage to Plaintiff. (Reichert v. General Ins. Co. (1968) 68 Cal.2d 822, 830.) “If an action is based on a breach of written contract, the terms must be set forth verbatim in the body of the complaint or a copy of the contract must be attached and incorporated by reference.” (Id. at 459.) Alternatively, if the claim is based on a written contract, then “a plaintiff may plead the legal effect of the contract rather than its precise language.” (Construction Protective Services, Inc. v. TIG Specialty Ins. Co., (2002) 29 Cal.4th 189, 198-199.)

Cross-Complainant alleges: the existence of a written lease agreement between the parties. (XC ¶¶4-5); Cross-Complainant’s performance. (XC ¶15); Cross-Defendant’s breach. (XC ¶¶11, 12, 17, and 18); and Cross-Complainant’s resulting damages (XC ¶¶17-19.)

The demurrer to the first cause of action is OVERRULED. Cross-Complainant’s allegations are sufficient. The arguments raised by Cross-Defendant in the instant Demurrer raise factual determinations inappropriately decided at this stage in the proceedings.  Cross-Defendant to answer within 20 days.