Judge Lynne M. Hobbs, Case Number: 24STCV10311, Date: 2024-09-04 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 24STCV10311, Date: 2024-09-04 Tentative Ruling

Case Number: 24STCV10311 Hearing Date: September 4, 2024 Dept: 61

GUANGZHOU BEAVER COSMETIC CO. LTD., A CHINESE CORPORATION, et al. vs LUSETA BEAUTY INC., A CALIFORNIA CORPORATION

TENTATIVE

Defendant Luseta Beauty, Inc.’s Demurrer to the Complaint is OVERRULED.

Plaintiffs to give notice.

DISCUSSION

A demurrer should be sustained only where the defects appear on the face of the pleading or are judicially noticed. (Code Civ. Pro., §§ 430.30, et seq.) In particular, as is relevant here, a court should sustain a demurrer if a complaint does not allege facts that are legally sufficient to constitute a cause of action. (See id. § 430.10, subd. (e).) As the Supreme Court held in Blank v. Kirwan (1985) 39 Cal.3d 311: “We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. . . . Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.” (Id. at p. 318; see also Hahn. v. Mirda (2007) 147 Cal.App.4th 740, 747 [“A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. [Citation.]”)

“In determining whether the complaint is sufficient as against the demurrer … if on consideration of all the facts stated it appears the plaintiff is entitled to any relief at the hands of the court against the defendants the complaint will be held good although the facts may not be clearly stated.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 639.)

“A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal.App.4th 612, 616.) Such demurrers “are disfavored, and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Mahan v. Charles W. Chan Insurance Agency, Inc. (2017) 14 Cal.App.5th 841, 848.)

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. (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p. 1081.) The demurrer also may be sustained without leave to amend where the nature of the defects and previous unsuccessful attempts to plead render it probable plaintiff cannot state a cause of action. (Krawitz v. Rusch (1989) 209 Cal.App.3d 957, 967.)

Defendant Luseta Beauty Inc. (Defendant) demurrers to the first cause of action for breach of contract contained in the Complaint of Plaintiffs Guangzhou Beaver Cosmetic Co., Ltd., Guangzhou Beaver Industrial Co., Ltd., Guangzhou Evergreen Brands Co., Ltd., and Guangzhou Fortune Brands Management, Co., Ltd.(Plaintiffs) on the grounds that the contract claim is uncertain, violates the statute of limitations, and violates the statute of frauds. (Demurrer at pp. 3–10.)

Each of Defendant’s arguments is without merit. Generally, a plaintiff pleading breach of contract must either attach a copy to the complaint, state its terms verbatim, or plead its legal effect. (See Miles v. Deutsche Bank National Trust Co. (2015) 236 Cal.App.4th 394, 401–02.) Plaintiff has done that here by pleading the legal effect of the oral agreement at issue: Plaintiffs agreed to sell products to Defendant for set prices, which Defendant has failed to pay, yielding an amount owed of 6,236,854.73. (Complaint ¶¶ 18–22.)

Defendant argues that the Complaint fails to plead a number of helpful details: the date of the agreement’s execution, consideration for the agreement, the product types at issue, the terms and conditions of performance, warranties, and the dates of all amendments to the agreement or their number. (Demurrer at pp. 4–7.) But the Complaint pleads the required elements to establish a breach of contract claim, and Defendant presents no authority for the proposition that such a claim must be pleaded with the detail it here desires. Consideration is alleged: Plaintiffs agreed to sell Defendant various cosmetic goods, and Defendant agreed to pay for them. (Complaint ¶ 18.) Defendant argues that the alleged agreement is indistinguishable from preliminary negotiations. (Demurrer at pp. 4–5.) But the allegations of the Complaint, which the court accepts as true on demurrer, states an agreement was reached in 2012 to sell goods to Defendant at “specific prices.” (Complaint ¶ 18.) Defendant argues that Plaintiffs fail to plead performance. (Demurrer at p. 6.) Yet Plaintiffs do plead their own performance. (Complaint ¶ 25.) Plaintiff has pleaded the legal effect of the contract, and the claim is not so uncertain that Defendant cannot reasonably respond. (Mahan, supra, 14 Cal.App.5th at p.848.)

Defendant’s argument as to the statute of limitations is also without merit. The statute of limitations for breach of oral contract is two years. (Code Civ. Proc. § 339.) But the statute for an oral contract for the sale of goods is four years. (Com. Code § 2725, subd. (a).) The Complaint alleges that the contractual relationship persisted from 2012 through 2023, and that Defendants made only partial payments for goods within the limitations period, beginning in July 2022. (FAC ¶¶ 19–21.) Any such failures to pay may be independently actionable under the continuing accrual doctrine. (See State of California ex rel. Metz v. CCC Information Services, Inc. (2007) 149 Cal.App.4th 402, 418 [“[W]hen an obligation or liability arises on a recurring basis, a cause of action accrues each time a wrongful act occurs, triggering a new limitations period.”].) Thus, even if some failures to pay occurred beyond the applicable limitations period, the court cannot conclude that the “entire cause of action” is time barred based on Defendant’s argument, and cannot sustain the demurrer on this basis. (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 1191.)

Defendant’s final argument based on the statute of frauds fares no better. There is no basis for the application of Civil Code § 1624’s written memorandum requirement for “[a]n agreement that by its terms is not to be performed within one year from the making thereof.” (Civ. Code § 1624, subd. 9a)(1).) The Complaint alleges only that the contractual relationship extended for 12 years — not that the contract required such a duration, or that it could not have been performed within one year.

And although Defendant cites Commercial Code § 2201, subd. (1), for the proposition that “a contract for the sale of good for the price of five hundred dollars ($500) or more” requires a writing to be enforceable (Demurrer at pp. 9–10), partial performance — i.e. delivery and acceptance of the goods in question, as is alleged here (Complaint ¶ 1) — provides an exception to this requirement. (See Siskin v. Dembroff (1932) 121 Cal.App. 730, 739 [“We believe the evidence shows that this oral agreement comes within another exception provided for in the statute of frauds (Civ. Code, § 1739, subd. 2); namely, that there was a partial performance of the contract, in that the buyer accepted and received part of the furniture.”]; see also Com. Code § 2201, Comment 2 [discussing partial performance as exception to the statute of frauds].) The Complaint thus discloses no basis to find the statute of frauds applicable to Plaintiffs’’ first cause of action for breach of contract.

The demurrer is therefore OVERRULED.