Judge Lynette Gridiron Winston, Case Number: 24PSCV02974, Date: 2025-02-04 Tentative Ruling

Judge: Lynette Gridiron Winston, Case: 24PSCV02974, Date: 2025-02-04 Tentative Ruling

CASE NAME: Steve S. Demircift v. Universal Plastics Recycling, Inc., et al.

Cross-Defendant Steve S. Demircift’s Demurrer to First Amended Cross-Complaint

The Court OVERRULES the demurrer of Cross-Defendant Steve S. Demircift to the First Amended Cross-Complaint. Cross-Defendant Steve S. Demircift must file an answer within 10 days of the Court’s order.

Cross-Complainant Universal Plastics Recycling, Inc. must give notice of the Court’s ruling within five calendar days of this order.

This is an industrial lease dispute. On September 11, 2024, plaintiff Steve S. Demircift (Plaintiff or Demircift) filed this action against defendants Universal Plastics Recycling, Inc., Baohong Tang (collectively, Defendants) and Does 1 through 10, alleging causes of action for breach of written lease and breach of guaranty of lease.

On October 16, 2024, Universal filed a cross-complaint. On November 7, 2024, Universal Plastics Recycling, Inc. (Universal or Cross-Complainant) filed the operative First Amended Cross-Complaint (FACC) against cross-defendants Steve S. Demircift, Southern California Edison Company, ADU Engineering, Inc. (collectively, Cross-Defendants), and Roes 1 to 10. Only the first cause of action for breach of contract is alleged against Demircift.

On December 9, 2024, Demircift demurred to the FACC. On January 21, 2025, Universal opposed the motion. On January 27, 2025, Demircift replied.

A demurrer is a pleading used to test the legal sufficiency of other pleadings. It raises issues of law, not fact, regarding the form or content of the opposing party's pleading (complaint, answer or cross-complaint). (Code Civ. Proc., § 422.10; see Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994 (Donabedian).) It is not the function of the demurrer to challenge the truthfulness of the complaint; and for purposes of ruling on the demurrer, all facts pleaded in the complaint are assumed to be true. (Id. at pp. 993-994.)

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. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Donabedian, supra, 116 Cal.App.4th at p. 994.) No other extrinsic evidence can be considered. (Ion Equip. Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881 [error for court to consider facts asserted in memorandum supporting demurrer]; see also Afuso v. United States Fid. & Guar. Co. (1985) 169 Cal.App.3d 859, 862, disapproved on other grounds in Moradi-Shalal v. Fireman’s Fund Ins. Cos. (1988) 46 Cal.3d 287 [error to consider contents of release not part of court record].)

A demurrer can be utilized where the “face of the complaint” itself is incomplete or discloses some defense that would bar recovery. (Guardian North Bay, Inc. v. Superior Court (2001) 94 Cal.App.4th 963, 971-972.) The “face of the complaint” includes material contained in attached exhibits that are incorporated by reference into the complaint, or in a superseded complaint in the same action. (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94; see also Barnett v. Fireman’s Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505 [“[W]e rely on and accept as true the contents of the exhibits and treat as surplusage the pleader’s allegations as to the legal effect of the exhibits”].)

A demurrer can only be sustained when it disposes of an entire pleading, cause of action, or affirmative defense. (See Cal. Rules of Court, rule 3.1320, subd. (a); Poizner v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119; Kong v. City of Hawaiian Gardens Redev. Agency (2003) 108 Cal.App.4th 1028, 1046-1047.)

The Court GRANTS Demircift’s request for judicial notice as to Exhibit E. (Evid. Code §, 452, subd. (d).) However, the Court takes judicial notice of the foregoing documents only as to “the existence, content and authenticity of public records and other specified documents”; it does not take judicial notice of the truth of the factual matters asserted in those documents. (Dominguez v. Bonta (2022) 87 Cal. App. 5th 389, 400.) The Court DENIES Demircift’s remaining requests for judicial notice, as the documents submitted do not appear to be certified copies. (People v. Rodriguez (2012) 55 Cal. 4th 1125, 1129, fn. 4 [denied judicial notice even though documents bore “Legislative Intent Service” stamp because they were not certified copies].)

Per Code of Civil Procedure section 430.41, subdivision (a), Demircift was required to meet and confer in person, by telephone, or by video conference before bringing this demurrer. (Code Civ. Proc., § 430.41, subd. (a).) The Court does not find Demircift’s efforts to meet and confer sufficient, since communication was only through written correspondence. (Whitman Decl., ¶ 3.) Nevertheless, the Court may not overrule a demurrer for failure to adequately meet and confer. (Code Civ. Proc., § 430.41, subd. (a)(4).)

“A cause of action for breach of contract requires pleading of a contract, plaintiff's performance or excuse for failure to perform, defendant's breach and damage to plaintiff resulting therefrom. 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.” (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489, internal citations omitted.) “There is an implied covenant of good faith and fair dealing in every contract that neither party will do anything which will injure the right of the other to receive the benefits of the agreement. [Citation.]” (Comunale v. Traders & Gen. Ins. Co. (1958) 50 Cal.2d 654, 658.) “The interpretation of a contract is a question of law unless the interpretation turns upon the credibility of extrinsic evidence. [Citation.]” (Meyers v. Guarantee Sav. & Loan Assn. (1978) 79 Cal.App.3d 307, 311.)

Demircift demurs to the First Cause of Action for breach of contract on the grounds that it fails to state a cause of action. Demircift contends that paragraph 7.1, subdivision (a), and paragraph 7.2 of the underlying lease agreement that forms the subject of this action (the Lease Agreement) put the onus of repairing the premises on Universal, so Demircift had no obligations to perform maintenance of repairs concerning the electrical junction box of which Universal complains. Demircift contends Universal performed unauthorized installations on the premises. Demircift contends that warranties stated in paragraph 2.3 of the Lease Agreement were limited to Demircift’s knowledge of the condition of the premises at that time, and that Universal had to provide written notice of any problems with the premises within six months of the start of the lease, which notice Universal does not allege having given to Demircift. Demircift further contends the FACC fails regarding Universal’s blended claim involving breach of the implied covenant of good faith and fair dealing, as the implied covenant does not impose substantive terms and conditions beyond those to which the parties actually agreed.

In opposition, Universal contends that the failure to pay rent does not relieve Demircift’s duty to apply for the permit to connect the wire to the junction box, but Demircift acted in bad faith by intentionally delaying applying for the permit required to connect the wire to the junction box, and that Southern California Edison and the City of Glendora required Demircift as landlord to apply for that permit. Universal then contends the Lease Agreement warrants the existing electrical elements in the premises shall be in good operating condition, but there was a substantial defect in the junction box that led to the fire. Universal contends the duty to repair does not relieve Demircift’s duty to cooperate with necessary repairs. Universal further contends that whether it complied with requirements to obtain permits for operating certain machines on the premises has nothing to do with the cause of the fire.

The Court finds the FACC alleges sufficient facts to state a cause of action for breach of the implied covenant of good faith and fair dealing, but not for breach of contract.[1] Since the first cause of action does state a cause of action, it is sufficient to survive the demurrer.

The elements of breach of contract are “(1) the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to plaintiff.” (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1388.) Paragraph 2.2 of the Lease Agreement provides that Demircift warrants that the existing electrical systems are in good working condition on the start date of the lease. (FACC, Ex. A, ¶ 2.2.) The FACC alleges that Demircift breached that provision of the Lease Agreement because the junction box of the electrical system was defective on the start date of the lease and such defect caused Universal damage. (FACC, ¶¶ 24-28.) However, Paragraph 2.2 of the Lease Agreement further provides that the warranty period was 30 days and that Universal was required to give written notice to Demircift of the specific nature and extent of the defect. (FACC, Ex. A. ¶ 2.2.) The FACC fails to allege any facts showing Universal performed its obligations under the Lease Agreement or was excused from doing so. Thus, the first cause of action fails to allege sufficient facts to state a cause of action for breach of contract.

However, "[i]f the complaint states a cause of action under any theory, regardless of the title under which the factual basis for relief is stated, that aspect of the complaint is good against a demurrer." (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38; accord Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967 (demurrer overruled if complaint states cause of action on any legal theory).)

Paragraph 7.1, subdivision (a), of the Lease Agreement provides that Universal is generally responsible for maintaining and repairing the premises. (FACC, Ex. A, ¶ 7.1, subd. (a).) Paragraph 7.2 of the Lease Agreement further provides that Demircift is not responsible for maintaining or repairing the premises or the equipment therein, except for the surface and certain structural elements, which require written notice to Demircift. (FACC, Ex. A, ¶ 7.2.) While these provisions make clear that the burden of repairing and maintaining the premises is on Universal and not Demircift, Universal correctly contends that the implied covenant of good faith and fair dealing requires Demircift to not prevent Universal from obtaining the benefits provided under the Lease Agreement, which in this case involved cooperating with Universal’s efforts to obtain the permit.

The FACC alleges that the City of Glendora and Southern California Edison required the landlord to apply for the permit to connect the electrical junction box. (FACC, ¶¶ 15-16.) The FACC alleges that Universal attempted to repair the junction box after the fire, but needed Demircift as landlord to apply for the permit to connect the junction box so Universal could finish those repairs. (FACC, ¶¶ 12-16, 30-31.) The FACC then alleges that despite being told of Demircift’s need to apply for the permit, Demircift failed or refused to do so for a couple months, which led to Universal’s loss of use of the building on the premises. (FACC, ¶ 32.) The Court finds these allegations sufficient to demonstrate that Demircift interfered with Universal’s repair obligations under the Lease Agreement and thereby deprived Universal of its use of its rights to use the subject property under the Lease Agreement, and thereby state a cause of action for breach of the implied covenant of good faith and fair dealing. (See Comunale v. Traders & Gen. Ins. Co., supra, 50 Cal.2d at p. 658.)

With respect to the permitting obligations under paragraph 7.3, Demircift raised that argument in the reply and not in the moving papers, which is generally improper. (Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537-1538 [new evidence or arguments generally not permitted on reply unless they fill in gaps in the evidence or respond to issues raised in the opposition; otherwise, a further hearing would be required to permit the opposing party to respond].) Even if the Court were to consider that argument, the Court would find it unavailing because paragraph 7.3 of the Lease Agreement pertains to alterations or utility installations, not repairs. (See FACC, Ex. A, ¶ 7.3.)

The Court declines to address the parties’ remaining arguments. Based on the foregoing, the Court OVERRULES the demurrer.

Cross-Complainant Universal Plastics Recycling, Inc. must give notice of the Court’s ruling within five calendar days of this order.

[1] The Court acknowledges Universal’s improper combination of a claim for breach of contract and claim for breach of the implied covenant of good faith and fair dealing into one cause of action, as they are different causes of action. (See Careau & Co. v. Sec. Pac. Bus. Credit, Inc. (1990) 222 Cal.App.3d 1371, 1395.) However, Demircift demurred only on the basis for failure to state a cause of action, not for uncertainty, which addresses improper combinations of causes of action into one. (See Zumbrun v. Univ. of S. California (1972) 25 Cal.App.3d 1, 9.)