Judge: Mark H. Epstein, Case: 23SMCV01139, Date: 2023-12-06 Tentative Ruling

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Case Number: 23SMCV01139    Hearing Date: January 26, 2024    Dept: I

Putting rhetoric to one side, the issue in this case and this motion is relatively straightforward.  Plaintiff slipped and was injured on property owned by a trust (she was a resident living at that property).  Rochelle Sterling is the trustee of the trust and has been sued in that capacity.  She has answered in that capacity.  The manager of the property is (or might be) Beverly Hills Properties.  It, too, was sued although it has been dismissed.  However, Donald Sterling is also a named defendant.  He demurs, claiming that there are no allegations (other than boilerplate alter ego stuff) that tie him into anything.  His claim is that he is named for the publicity it brings to harass him, and for no other reason.  Plaintiff contends that Beverly Hills Properties is a part of the case, but it is only a DBA.  Accordingly, those who are humans behind the DBA are properly named, and, according to plaintiff, those people are Rochelle and Donald Sterling.

To be honest, a demurrer is not the best way to attack this.  The court is bound by the allegations in the complaint and matters of which the court can take judicial notice. 

To a large degree, the answer lies as to the status of Beverly Hills Properties.  If it is a jural entity, then it ought to be sued and not its individual owners unless there are a lot better alter ego allegations than are present here.  But if it is not a jural entity—if it is in fact just a DBA—then those who are doing business as Beverly Hills Properties are the proper named parties.  It seems that all parties agree that Beverly Hills Properties is not a jural entity.  Here, both Rochelle and Donald Sterling are registered as doing business as Beverly Hills Properties.  And normally, that would make them proper parties.  The demurring defendant’s theory is that, for various reasons, Donald Sterling has the “right” to do business as Beverly Hills Properties, but in fact only Rochelle is doing so.  That might or might not be correct, but how is the court to know that from the face of the complaint or matters of which the court can take judicial notice?  Exhibit 4 to the RJN request is a Fictitious Business Name Statement filed with the City of Beverly Hills on June 26, 2019, which the demurring party candidly attached to the motion so as to be transparent with the court (and which the court appreciates).  It lists both Donald and Rochelle Sterling as the registered owners of the DBA.  Defendant’s explanation is that there is “but one operator/landlord for the Building” and that is Rochelle Sterling.  The court has no idea why that is correct.  It might well be that defendant is trying to argue that the manager is simply not liable; only the owner is liable.  If that is the argument, it is not one easily resolved on the pleadings.  And the court does not believe that is the actual argument, for the brief states that “there is no reason or legitimate basis upon which to require two people to both appear on behalf of the same landlord/manager DBA BHP, particularly when the DBA registrants are husband and wife in a community property state.”  Thus, the real argument is that there is no practical need to name both owners when naming one will provide all of the relief necessary.  That may be true as a practical matter—having one owner is sufficient to ensure that any judgment gets paid where the other is a spouse in a community property state.  But it is not legally correct.  Two people operating together are both liable for whatever it is they do together in the jointly owned unincorporated business. 

The court is sympathetic to defendant’s argument.  The court sees no practical justification for naming Donald Sterling other than the publicity it might garner.  But the court does not believe it has the authority, on demurrer, to dismiss him from the case.  It could also be that Beverly Hills Properties is a name that has never surfaced.  In other words, it could be that Beverly Hills Properties has never purported to be the property’s manager or management company and really has nothing to do with anything.  But that is not apparent from the complaint.  The issue is easy enough to demonstrate eventually.  Were there letters written on Beverly Hills Properties’ letterhead or signed by a person purporting to work for Beverly Hills Properties?  Did Beverly Hills Properties hold itself out to plaintiff as the property’s manager?  Were checks made out to Beverly Hills Properties?  There are other ways to prove or disprove Beverly Hills Properties’ involvement.  But those things cannot easily be reached on demurrer.  For now, the court urges the parties to discuss the matter further.  And the court will ask plaintiff exactly what role Beverly Hills Properties allegedly has in this case.  But if Beverly Hills Properties is held out to be the property’s manager, then those who are the people behind the name (in the context of a DBA) are not improper parties, at least at the pleading stage. 

Thus, while sympathetic to the demurring defendant’s position, the court believes that it must OVERRULE the demurrer.  That does not mean that the matter will survive summary judgment, when the court can consider evidence to determine what role, if any, Beverly Hills Properties and Donald Sterling actually had in anything.  It could well turn out that there simply is no management company or management entity at all, and that the only entity liable for plaintiff’s alleged injury is the property’s owner, which is the trust properly represented by its trustee, Rochelle Sterling, and her alone.  Demurring defendant has 30 days to answer.