Judge Margaret L. Oldendorf, Case 23AHCV00492 2023-04-06 Tentative Ruling

Judge: Margaret L. Oldendorf, Case: 23AHCV00492, Date: 2023-04-06 Tentative Ruling

This is an unlawful detainer action concerning commercial real property at 132 W. Las Tunas in the City of San Gabriel. Plaintiff Max Investments, LLC (Max) previously filed a forcible detainer action against Defendant Fan Xu (Xu). Max later dismissed that action and filed this one. Xu argues the current complaint is a sham pleading and bases his demurrer thereon. However, a comparison of the forcible detainer complaint and the present complaint does not support Xu’s argument. The demurrer is therefore overruled.

Code Civ. Proc. §430.10 (e) provides for a demurrer on the basis that a complaint fails to state a cause of action.

A demurrer admits, provisionally for purposes of testing the pleading, all material facts properly pleaded. Tindell v. Murphy (2018) 22 Cal.App.5th 1239, 1247.

A demurrer tests the legal sufficiency of a complaint. Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994. A plaintiff’s allegations must be accepted as true for purposes of demurrer, no matter how “improbable” they are. Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604 (Del E. Webb).

“The court will take judicial notice of records such as admissions, answers to interrogatories, affidavits, and the like, when considering a demurrer, only where they contain statements of the plaintiff or his agent which are inconsistent with the allegations of the pleading before the court.” Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 605.

Code Civ. Proc. §430.10(f) provides for a demurrer where a pleading is uncertain.

Only where a pleading is so uncertain a defendant cannot determine what must be admitted or denied is a demurrer for uncertainty appropriate. Khoury v. Maly’s of California (1993) 14 Cal.App.4th 612, 616.

The current demurrer asserts the complaint is a sham pleading. A sham pleading is one that omits earlier admissions in another pleading. “Under the sham pleading doctrine, plaintiffs are precluded from amending complaints to omit harmful allegations, without explanation, from previous complaints to avoid attacks raised in demurrers or motions for summary judgment.” Deveny v. Entropin, Inc. (2006) 139 Cal.App.4th 408, 425. For example, in Owens v. Kings Supermarket (1988) 198 Cal.App.3d 379, the plaintiff initially alleged he was injured on the street adjacent to the market; when the demurrer was sustained with leave to amend the plaintiff alleged he was injured on defendant’s property. Under that circumstance the trial court was permitted to disregard the latter allegation.

In support of the request for judicial notice, Xu cites Evid. Code §452(h). This section provides for notice of “facts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to resources of reasonably indisputable accuracy.” A contract is not such a document. Xu also relies on Evans v. California Trailer Court, Inc. (1994) 28 Cal.App.4th 540, 549, a case which supports judicial notice of recorded deeds. It does not support taking judicial notice of a contract.

Here, there is a dispute between the parties as to whether a contract was formed and if so, what the contract terms are. Under these circumstances, taking judicial notice of a contract is not proper. Gould v. Maryland Sound Industries, Inc. (1995) 31 Cal.App.4th 1137, 1145-1146.

However, the Court does take judicial notice of Exhibit B, the forcible detainer complaint, pursuant to Evid. Code §452(d).

The following is a quick summary of the material facts alleged in the Complaint:

¶6 – In November 2022, Max was looking for a new tenant, as its current tenant was set to vacate December 1, 2022. On November 17, Xu submitted a proposed lease through an agent. The lease contained no handwritten terms. Max agreed to the lease and executed it on November 18. Xu then allegedly revised the lease and sent it (through his agent) back to Max. “Upon reviewing the proposed revisions, Plaintiff immediately informed Defendant’s agent that the revisions were not accepted and that there was no lease on the terms proposed by Defendant. Plaintiff instructed its agent to communicate that the revisions proposed by Defendant were not accepted and that if Defendant wanted to proceed with the lease without such revisions, the parties could continue to discuss the same.” Max also allegedly told Xu’s agent that if they were going to move forward Xu would need to provide the following: a clean, unrevised lease; additional financial information, insurance information, and licensing information (Pre-Lease Documentation). Xu was informed of these things on or around November 20.

¶7 – At about that same time, Max learned that its current tenant was not going to vacate on time, but would need until December 15 to vacate. Max communicated that information to Xu’s agent.

¶8 – Max learned through Xu’s agent that Xu was requesting permission to park 2 or 3 cars on the property that he would be offering for sale or lease once the contract was finalized. Xu’s agent requested a key from the existing tenant. The existing tenant, believing he was acting in good faith since he could not move out on time, gave the agent a key.

¶9 – On December 1, 2022, Xu allegedly moved several cars onto the property (not just one or two). Xu began performing mechanical and/or repair work on the vehicles. Xu was cited by the city three times for violation of the municipal code related to this activity.

¶10 – The proposed/unenforceable lease allegedly expressly provides there is to be no repair work performed on the premises. Despite that, Xu has been illegally operating an auto repair and body shop on the premises, without insurance, all of which places Max at risk.

¶11 – On December 6, Max’s agent communicated to Xu’s agent that if the Pre-Lease Documentation was not provided by the next day, lease negotiations would cease. The documents were not provided.

¶12 – On December 15, Max went to the premises to inform Xu personally that he was no longer negotiating the lease, and that Xu needed to vacate immediately and remove all of his personal property. Max attempted to hand back to Xu the previously tendered checks for rent and security deposit, which Max had not deposited because the lease terms had not been finalized. Xu refused to accept the checks.

The demurrer raises two arguments: (1) this is a sham pleading; and (2) there can be no tenancy at will because Max admits there is a written lease. Both arguments fail.

Xu urges that the current complaint is a sham pleading because it differs in material ways from the forcible detainer complaint. It does not.

Paragraph 6 of the forcible detainer complaint and the current complaint contain the allegations about contract formation. Both of them allege that Xu (through his agent) presented Max with a written lease agreement, that Max agreed to the terms and signed the lease, and that after the lease was returned to Xu he made changes to it that Max did not agree to. Both pleadings contain “on or about” allegations, so whether it was November 17 or 18, there is no sham. Both pleadings allege that no contract was formed because Max did not agree to the changes Xu made following Max’s signing.

In the forcible detainer action, Max alleges at ¶7 that on or about December 1, Xu made an unlawful forcible entry onto the premises and expelled Max. Max alleges that since that day Xu has held and detained possession and has refused to quit the premises or return them to Max. It is alleged that Xu holds possession by force in that he has changed the locks and not provided a copy to Max; and he intimidates Max’s principals every time they attempt to obtain possession.

The complaint in the current action adds some factual context in ¶¶7 and 8. But the means by which Xu obtained entry is not an admission Max must distance itself from. The forcible detainer complaint alleges that Xu “fraudulently obtained a key” to the gated portion of the premises and parked cars there. The current pleading alleges Xu’s agent obtained a key from the then-current tenant.

The current pleading omits the allegation that Xu broke into the office portion of the premises and changed the locks (forcible detainer complaint at ¶6). But this is not the sort of pleading admission that Max must “plead around” to survive demurrer.

Neither pleading alleges the type of tenancy. The 5-Day Notice to Quit attached to the forcible detainer complaint states, “there is no valid lease . . . because Owner did not accept your counter-offer . . . As such, you have no legal right, claim, and/or basis for your possession of the Premises.”

The 30-Day Notice to Quit attached to the current complaint states, “Owner does not intend to accept a payment of rent from you regarding your tenancy-at-will.”

That alternate legal theories may have been pursued by Max does not demonstrate the existence of a sham pleading. A sham pleading involves harmful facts in one pleading that were avoided in a subsequent pleading.

In sum, to the extent there are differences between the forcible detainer action and the current complaint, they are not material. More to the point, there are no “harmful” facts alleged in the forcible detainer pleading that Max omitted here in order to save a claim.

Xu argues that the pleading contains an admission by Max that it signed a five-year lease. This is simply a misreading of the complaint. What is clearly alleged is that Xu made changes to the lease after Max signed it, such that no contract was formed.

The request for judicial notice is granted in part and denied in part. Judicial notice is taken of Exhibit B pursuant to Evid. Code §452(d). Judicial notice of Exhibit A is declined.

[1] This document indicates that “Defendants Sameer Bhavnani and Jasmine Bhavnani” request judicial notice. The Court presumes this is a typographical error.