Judge: Martha K. Gooding, Case: 2022-01248497, Date: 2022-10-10 Tentative Ruling
1) Demurrer to Complaint
2) Case Management Conference
Demurrer to Complaint
The Demurrer by Defendant Custom Autosound Manufacturing, Inc. (“Defendant”) to the first and second causes of action in the Complaint filed by Plaintiff Julio Baeza (“Plaintiff”) is OVERRULED in its entirety.
As noted by Plaintiff, “[a] demurrer is simply not the appropriate procedure for determining the truth of disputed facts…” (Cruz v. County of Los Angeles (1985) 173 Cal.App.3d 1131, 1134). Instead, the function of a demurrer is limited to testing the legal sufficiency of a complaint. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994). Consequently, in reviewing a Demurrer, “a court cannot consider…the substance of declarations, matter not subject to judicial notice, or documents judicially noticed but not accepted for the truth of their contents.” (Id.). Stated more simply, “[i]t is ‘black-letter law’ a demurrer tests the pleading alone.” (Gould v. Maryland Sound Industries, Inc. (1995) 31 Cal.App.4th 1137, 1144). “’[D]efendants cannot set forth allegations of fact in their demurrers which, if true, would defeat plaintiff’s complaint.’” (Id.).
Here, Defendant demurs to the Complaint, asserting Plaintiff’s claims must be dismissed because Plaintiff “settled and released all claims against Custom Autosound Manufacturing…” (Demurrer: 1:16-17).
It is true that, “[w]here the complaint shows the plaintiff does not possess the substantive right or standing to prosecute the action, ‘it is vulnerable to a general demurrer on the ground that it fails to state a cause of action.’” (Schauer v. Mandarin Gems of Cal., Inc. (2005) 125 Cal.App.4th 949, 955). But this principle is unavailing to Defendant where, as here, Defendant is seeking to establish a lack of standing via extrinsic evidence.
Notably, Defendant cites to no allegations in the Complaint to establish a settlement and release of Plaintiff’s claims. Instead, the Demurrer relies solely on the Declaration of Sandra Sprague, an Officer of Defendant Custom Autosound Manufacturing, Inc. (Demurrer: 1:9-15).
As noted by Plaintiff, Defendant failed to timely request judicial notice of the above Declaration. Pursuant to Code of Civil Procedure (“CCP”) section 430.70, “[w]hen the ground of a demurrer is based on a matter of which the court may take judicial notice pursuant to Section 452 or 453 of the Evidence Code, such matter shall be specified in the demurrer, or in the supporting points and authorities for the purpose of invoking such notice…” Here, Defendant’s moving papers did not request judicial notice.
Although a Request for Judicial Notice was included with Defendant’s Reply, Evidence Code §453(a) requires judicial notice only where the requesting party “[g]ives each party sufficient notice of the request…” “The general rule of motion practice, which applies here, is that new evidence is not permitted with reply papers.” (Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537-1538). Similarly, “[i]t is elementary that points raised for the first time in a reply brief are not considered by the court.” (Magic Kitchen LLC v. Good Things Intern. Ltd. (2007) 153 Cal.App.4th 1144, 1161).
In any event, the Court concludes there is no basis for taking judicial notice of the Declaration or Exhibit thereto.
As noted in Gould, supra, “the existence of a contract between private parties cannot be established by judicial notice under Evidence Code section 452, subdivision (h).” (31 Cal.App.4th at 1145). “As in this case, the ‘fact’ a contract exists between the parties is frequently the subject of reasonable dispute.” (Id. at 1145). “Furthermore, when such disputes arise there are no ‘sources of reasonably indisputable accuracy’ such as treatises or encyclopedias to which the court can turn to resolve the issue. Rather, the court must rely on the testimony of the parties and their witnesses whose perceptions, memory and bias may be the subject of vigorous dispute.” (Id. at 1145-1146). “Moreover, before a trial court could find that the existence of a contract was not reasonably subject to dispute the court would have to engage in the kind of fact-finding appropriate for a trial on the merits, not for a hearing on demurrer.” (Id. at 1146).
Defendant cites Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743 for the proposition that the Court may take judicial notice of contracts. The circumstances in Scott are distinguishable. The contract at issue in Scott was posted on the official FDIC website and was not reasonably subject to dispute. (Id. at 753-754). In contrast, the meaning and legal effect of the offered “Settlement Agreement” is very much disputed and is not appropriate for judicial notice pursuant to Evidence Code §452(h).
Indeed, Defendant appears to concede the “Settlement Agreement” is disputed, as the Reply repeatedly acknowledges that parole evidence may be necessary to determine its meaning. (Reply: 2:15-16 and 4:25-26). Citing Hayter Trucking, Inc. v. Shell Western E&P, Inc. (1993) 18 Cal.App.4th 1, Defendant argues that parole evidence is permitted in the context of a demurrer. The Court disagrees with Defendant’s reading of Hayter.
In Hayter the court found that an order sustaining a demurrer without leave to amend was improper, because the plaintiff had adequately pled a reasonable interpretation of the agreement that supported the Plaintiff’s claim. (Id. at 18). It was precisely because parole evidence could be admitted as to the meaning of the agreement that an order sustaining the Demurrer was found to be improper.
Indeed, the court in Hayter reaffirmed that “[i]n ruling on a demurrer, the court must assume the truth of the factual allegations of the complaint” and “[t]he function of a demurrer is to test the legal sufficiency of the challenged pleading by raising questions of law.” (Id. at 17). “The demurrer tests the pleading alone and not the evidence or other extrinsic matters. The demurrer lies only where the defects appear on the face of the pleading.” (Id.).
Defendant argues that in Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, “a ruling on a demurrer was overturned because the court failed to properly consider extrinsic evidence,” (Reply: 5:5-6). Again, the Court disagrees with Defendant’s reading of the case. As noted in Freemont: “For a court to take judicial notice of the meaning of a document submitted by a demurring party based on the document alone, without allowing the parties an opportunity to present extrinsic evidence of the meaning of the document, would be improper. A court ruling on a demurrer therefore cannot take judicial notice of the proper interpretation of a document submitted in support of the demurrer.” (Id.) “In short, a court cannot by means of judicial notice convert a demurrer into an incomplete evidentiary hearing in which the demurring party can present documentary evidence and the opposing party is bound by what that evidence appears to show.” (Id.). In short, the Fremont dourt held that the necessity of parole evidence to demonstrate the proper interpretation of an agreement prevented judicial notice.
Similarly, as stated in Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369 (also cited by Defendant), “[t]he hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of documents whose truthfulness or proper interpretation are disputable.” (Id. at 374).
For all these reasons, Defendant’s Request for Judicial Notice (ROA No. 58) is DENIED.
Because Defendant’s Demurrer relies entirely on a Declaration that cannot properly be considered, the Demurrer is OVERRULED. Defendant shall file and serve its Answer to the Complaint within 15 days.
Plaintiff is ordered to give notice.