TENTATIVE RULING

Defendant Malibu Dream Resort, LLC’s Demurrer to Second Amended Complaint of Plaintiff Shabana Arman is SUSTAINED with twenty (20) days leave to amend.

Plaintiff Shabana Arman may amend her complaint only as authorized by the Court’s order and may not amend the complaint to add a new party or cause of action without having obtained permission to do so. (Harris v. Wachovia Mortgage, FSB (2010) 185 Cal.App.4th 1018, 1023.)

Defendant Malibu Dream Resort, LLC to give notice. 

REASONING

Request for Judicial Notice

Plaintiff Shabana Arman (“Plaintiff”) requests judicial notice of two Los Angeles County ordinances. Plaintiff’s request is GRANTED pursuant to Evidence Code section 452, subdivision (b).

Legal Standard

“[A] demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.) A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (See Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994 [in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents].) For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 967), but the Court does not “assume the truth of contentions, deductions, or conclusions of fact or law” (Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125).

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 [court shall not “sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment”]; Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037 [“A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment.”]; Vaccaro v. Kaiman (1998) 63 Cal.App.4th 761, 768 [“When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend.”].) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

First Cause of Action: Rescission

A party to a contract may rescind it where the contract is unlawful, was the result of mistake, duress, menace, fraud, or undue influence, or will prejudice the public interest if permitted to stand, or if there was a failure of consideration. (Civ. Code, § 1689, subd. (b).)

In the first cause of action, Plaintiff alleges that Defendant suppressed or concealed the applicable noise ordinances despite the fact Defendant knew of the ordinances, and they misrepresented the terms and application of those ordinances by warranting they would not affect Plaintiff’s enjoyment of the property as contemplated under the Vacation Rental Agreement (“VRA”). (Second Am. Compl. (“SAC”) ¶¶ 22-24.) Plaintiff alleges she paid a deposit of $50,000 in reliance on Defendant’s representations, and she seeks rescission of the VRA and a return of her deposit. (SAC ¶¶ 24-26.)

In the SAC, Plaintiff again acknowledges that she reviewed the VRA and contacted Defendant Malibu Dream Resort, LLC (“Defendant”) about the noise ordinance, so any allegations that the ordinances were concealed is belied by Plaintiff’s own allegations that the VRA made her aware that no music may be played after 10:00 p.m. (SAC ¶¶ 7-10.) Plaintiff alleges that Defendant’s representative stated that the curfew was old,” and he made revisions to the VRA to indicate music could be played until 12:00 a.m., which Plaintiff then signed. (SAC ¶¶ 10-12.)

Plaintiff has again not provided a proper basis for rescission. The music curfew was Defendant’s own music curfew, and Defendant is not alleged here to have made any representations about local noise ordinances. Further, Plaintiff alleges only that the decibel of the music had to be reduced under the noise ordinances, not that it had to be discontinued altogether. (SAC ¶ 23.) There are no allegations that Defendant made any misrepresentations to this effect. The Court will allow Plaintiff a final opportunity to cure the defects in this claim. Thus, Defendant’s demurrer to the first cause of action is SUSTAINED with twenty (20) days leave to amend. 

Second Cause of Action: Breach of the Implied Covenant of Good Faith

“A breach of the implied covenant of good faith and fair dealing involves something beyond breach of the contractual duty itself and it has been held that bad faith implies unfair dealing rather than mistaken judgment.” (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1394.) “If the allegations do not go beyond the statement of a mere contract breach and, relying on the same alleged acts, simply seek the same damages or other relief already claimed in a companion contract cause of action, they may be disregarded as superfluous as no additional claim is actually stated . . . [T]he only justification for asserting a separate cause of action for breach of the implied covenant is to obtain a tort recovery.” (Id. at pp. 1394-1395.) To recover in tort for breach of the implied covenant, the defendant must “have acted unreasonably or without proper cause.” (Id. at p. 1395, citations and italics omitted.)

In the second cause of action, Plaintiff alleges that Defendant deliberately presented the VRA to Plaintiff for the purpose of hosting a large event with the purpose of having live music until 12:00 a.m., but Defendant’s misrepresentations frustrated the purpose of the VRA. (SAC ¶¶ 31-32.) Again, Plaintiff has not sufficiently alleged concealment or misrepresentations by Defendant, as she alleges she was aware of the noise ordinances, the curfew could be extended by Defendant, and she was not prohibited entirely from playing music after 10:00 p.m. Further, section 36 of the VRA permits Defendant to retain a deposit upon Plaintiff’s termination. (SAC ¶ 11, Ex. C.) Thus, Plaintiff has failed to sufficiently allege any breach of the implied covenant by Defendant. The Court will allow Plaintiff a final opportunity to cure the defects in this claim. Accordingly, Defendant’s demurrer to the second cause of action is SUSTAINED with twenty (20) days leave to amend.

Third Cause of Action: Conversion

“Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff’s ownership or right to possession of the property; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages.” (Lee v. Hanley (2015) 61 Cal.4th 1225, 1240.)

In the third cause of action, Plaintiff alleges that Defendant retained the deposit paid and converted the deposit for its own use. (SAC ¶ 36.) First, the nature of Defendant’s purported wrongful act remains unclear because Plaintiff has not sufficiently alleged concealment or misrepresentations by Defendant, it appears Plaintiff knowingly gave Defendant the sum of $50,000 pursuant to the contract such that Plaintiff consented to Defendant’s receipt of the money, and the VRA permitted Defendant to retain the deposit until Plaintiff’s termination of the agreement. The Court will allow Plaintiff a final opportunity to cure the defects in this claim. Thus, Defendant’s demurrer to the third cause of action is SUSTAINED with twenty (20) days leave to amend.

Fourth Cause of Action: Deceit

“The elements of fraud are (a) a misrepresentation (false representation, concealment, or nondisclosure); (b) scienter or knowledge of its falsity; (c) intent to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Hinesley v. Oakshade Town Ctr. (2005) 135 Cal.App.4th 289, 294.) The facts constituting the alleged fraud must be alleged factually and specifically as to every element of fraud, as the policy of “liberal construction” of the pleadings will not ordinarily be invoked. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) To properly allege fraud against a corporation, the plaintiffs must plead the names of the persons allegedly making the false representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.)

First, Plaintiff has not sufficiently alleged fraud or concealment of any facts by Defendant, as discussed herein, because Defendant could change the terms of music playing at the resort, and there are no allegations that Defendant made any representations or concealment as to applicable noise ordinances. Further, Plaintiff does not allege any conduct with the required specificity, i.e., while Plaintiff names Lior Totaiv as a representative of Defendant, she fails to allege what specific statements this person said or wrote to her, when the statements were said or written, and how the statements were communicated. The Court will allow Plaintiff a final opportunity to cure the defects in this claim. Accordingly, Defendant’s demurrer to the fifth cause of action is SUSTAINED with twenty (20) days leave to amend.