Judge Mark E. Windham, Case Number: 23STLC03879, Date: 2023-12-06 Tentative Ruling

Judge: Mark E. Windham, Case: 23STLC03879, Date: 2023-12-06 Tentative Ruling

Case Number: 23STLC03879 Hearing Date: January 2, 2024 Dept: 26

Rusnak/Pasadena v. Liu, et al.

DEMURRER

(CCP §§ 430.10, et seq.)

TENTATIVE RULING:

Defendant Xiaoxia Liu’s Demurrer to the Complaint is SUSTAINED WITHOUT LEAVE TO AMEND AS TO THE SECOND CAUSE OF ACTION FOR FRAUD, AND OVERRULED AS TO THE FIRST CAUSE OF ACTION FOR BREACH OF CONTRACT AND THIRD CAUSE OF ACTION FOR MONEY HAD AND RECEIVED. DEFENDANT IS TO FILE AN ANSWER TO THE COMPLAINT WITHIN 20 DAYS OF THIS ORDER.

ANALYSIS:

On June 16, 2023, Plaintiff Rusnak/Pasadena (“Plaintiff”) filed this action for breach of contract and fraud against Defendant Xiaoxia Liu (“Defendant”). On October 18, 2023, Defendant filed the instant Demurrer to the Complaint. Plaintiff filed an opposition on November 21, 2023 and Defendant replied on November 29, 2023. The Demurrer initially came for hearing on December 6, 2023 and was continued to allow the Court an opportunity to review the reply. (Minute Order, 12/06/23.)

Discussion

The Complaint alleges that the parties entered into a motor vehicle purchase agreement that included an export policy and agreement. (Compl., ¶¶7-8.) The export policy prohibits the purchaser, Defendant, from exporting the vehicle within six months of purchase and includes a liquidated damages provision in the amount of $20,000.00 for violation of the policy. (Id. at ¶8.) Defendant breached the export provision and as a result, Plaintiff suffered damages of $20,000.00. (Id. at ¶¶9-11.) Defendant knowingly and willingly, agreed and conspired to fraudulently obtain the vehicle and to export it outside of the United States in direct breach of the terms of the Agreement. (Id. at ¶14.) Defendant expressly represented that they would honor the export policy at the time of purchase and at the time the representations were made, knew them to be false and to induce Plaintiff’s reasonable reliance. (Id. at ¶¶16-18.) Plaintiff reasonably relied on the representations and was damaged in an amount to be proven. (Id. at ¶19.)

The Demurrer is accompanied by a meet and confer declaration as required by Code of Civil Procedure section 430.41. (Demurrer, Declaration of Demurring Party, filed 10/18/23.) Defendant demurs to the Complaint for failure to allege sufficient facts. (Citing Code Civ. Proc., §430.10, subd. (e).) To the extent the Demurrer is brought on grounds of uncertainty, Plaintiff is correct that special demurrers are not permitted in a court of limited jurisdiction. (Code Civ. Proc., § 92, subd. (c).) Plaintiff is also correct to point out that Defendant’s version of facts as set forth in the Demurrer—including the argument that the agreement not to export the vehicle was improperly made a month after the purchase agreement—are irrelevant to the sufficiency of the pleading.

1st Cause of Action for Breach of Contract

The elements of a cause of action for breach of contract are (1) the contract, (2) the plaintiff’s performance of the contract or excuse for nonperformance, (3) the defendant’s breach, and (4) the resulting damage to the plaintiff.” (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.) Defendant demurs on the grounds that the Complaint does not sufficiently allege causation of damages and that the allegations of damages are merely legal conclusions. In opposition, Plaintiff argues that only ultimate facts are required and have been pled. (Citing McCaughey v. Schuette (1897) 117 Cal. 223, 225; Green v. Palmer, 15 Cal. 411 (1860) 414-15.) The Complaint alleges the ultimate facts of Defendant’s breach of the contract and Plaintiff’s resulting damages. (Compl., ¶¶7-11.) These factual conclusions are the types of ultimate facts that sufficiently support a cause of action. (See Krug v. Meehan (1952) 109 Cal.App.2d 274, 277.) The Complaint does not merely allege the legal conclusion that Defendant is liable for breach of contract, which alone, would be insufficient.

Plaintiff goes on to argue that these damages are properly alleged based on the mutually agreed upon sum in accordance with Civil Code section 1671. Civil Code section 1671 provides that liquidated damages are permitted when parties to an agreement “ may agree therein upon an amount which shall be presumed to be the amount of damage sustained by a breach thereof, when, from the nature of the case, it would be impracticable or extremely difficult to fix the actual damage.” (Civ. Code, § 1671, subd. (d).) In reply, Defendant argues that the actual damages from breach of the vehicle export agreement are determinable, rendering the liquidated damages provision void. That the Complaint contends Plaintiff has suffered damages in a sum to be proven at trial, however, is not an indication that the damages provision is void. It is a generic allegation that addresses all the damages Plaintiff seeks, including attorney’s fees, costs, and interest. (Compl., ¶19 and Prayer for Damages.)

Defendant also argues that the agreement not to export the vehicle violates Civil Code section 2981.9, which requires every conditional sale contract to “contain in a single document all of the agreements of the buyer and seller with respect to the total cost and the terms of payment for the motor vehicle . . . . (Citing Civ. Code, § 2981.9.) The Complaint, however, alleges that the export policy agreement is an integral and material term of the RISC. (Compl., ¶8.) It cannot be determined from the Complaint itself that the vehicle export agreement violates Civil Code section 2981.9. Defendant’s argument that they are entitled to recover the entire amount paid for the motor vehicle based on Plaintiff’s purported violation of Civil Code section 2981.9 would be grounds for a counter-claim by Defendant to recover the sales price of $94,371.37, not a demurrer to the entire Complaint. Furthermore, Defendant’s request to transfer this action to a court of unlimited jurisdiction based on their alleged damages of $94,371.37 is also not proper on demurrer. (See Code Civ. Proc., §430.10.)

Therefore, the first cause of action is sufficiently alleged to state a claim for breach of contract. The Demurrer to the first cause of action is overruled.

2nd Cause of Action for Fraud

Regarding the second cause of action for fraud, the elements (1) misrepresentation; (2) knowledge of falsity (or "scienter"); (3) intent to defraud (induce reliance); (4) justifiable reliance; and (5) resulting damage. (Conroy v. Regents of Univ. of Cal. (2009) 45 Cal. 4th 1244, 1255.) Defendant demurs on the grounds that opinions, which include statements of future events, are not actionable. (Citing Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469 “Statements or predictions regarding future events are deemed to be mere opinions which are not actionable.”).] In opposition, Plaintiff does not address this case law and instead focuses on the elements of the cause of action. Therefore, the Demurrer to the second cause of action is sustained without leave to amend.

3rd Cause of Action for Money Had and Received

The third cause of action is for money had and received on the allegation that Defendant became indebted to Plaintiff in the amount of $20,000.00. (Compl., ¶22.) Defendant demurs to this cause of action on the grounds that they paid the full sales price and has not received anything of value for which they did not pay. This does not address the allegations in the Complaint, however. Therefore, the Demurrer for failure to sufficiently allege the third cause of action is overruled.

Conclusion

Defendant Xiaoxia Liu’s Demurrer to the Complaint is SUSTAINED WITHOUT LEAVE TO AMEND AS TO THE SECOND CAUSE OF ACTION FOR FRAUD AND OVERRULED AS TO THE FIRST CAUSE OF ACTION FOR BREACH OF CONTRACT AND THIRD CAUSE OF ACTION FOR MONEY HAD AND RECEIVED. DEFENDANT IS TO FILE AN ANSWER TO THE COMPLAINT WITHIN 20 DAYS OF THIS ORDER.

Moving party to give notice.