Judge: Maurice A. Leiter, Case: 22STCV06085, Date: 2025-02-06 Tentative Ruling

Case Number: 22STCV06085    Hearing Date: February 6, 2025    Dept: 54

Hearing Date: February 6, 2025

Department 54, Judge Maurice Leiter

Demurrer to Second Amended Cross-Complaint;

Moving Party: Plaintiff/Cross-Defendant Cartwright Termite & Pest Control, Inc.

Responding Party: Cross-Complainant Shmuel Erde

T/R:     CROSS-DEFENDANT'S DEMURRER IS OVERRULED.

CROSS-DEFENDANT TO FILE AND SERVE AN ANSWER TO THE SECOND AMENDED CROSS-COMPLAINT WITHIN 10 DAYS OF NOTICE OF RULING.

CROSS-DEFENDANT TO NOTICE

If the parties wish to submit on the tentative, please email the courtroom at SMCdept54@lacourt.org with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

The Court considers the moving papers, opposition, and reply.

BACKGROUND

On February 16, 2024, Defendant Shmuel Erde filed a cross-complaint against Plaintiff Cartwright Termite & Pest Control, Inc., Defendant Balboa, LLC, and Dolores Golden, asserting causes of action for (1) breach of agreement to postpone foreclosure sale; (2) failure to comply with foreclosure statutes; (3) conspiracy to divest cross-complainant of a broker’s commission; (4) divesting cross-complainant of a broker’s commission; (5) conspiracy to divest cross-complainant of equity in real property; (6) divesting cross-complainant of equity in real property; and (7) refusal to comply with discovery efforts.

Following the Court’s sustaining of Cross-Defendant Cartwright’s demurrer, on July 11, 2024, Erde filed the first amended cross-complaint, asserting causes of action for (1) breach of contract; (2) setting aside trustee’s sale; (3) breach of the implied covenant of good faith and fair dealing; (4) common counts – money had and recieved; (5) breach of promise to expunge lis pendens; (6) common counts – meruit and quantum valebant; (7) common counts – lack of consideration.

On October 2, 2024, Erde filed the operative second amended complaint for (1) breach of contract; (2) set aside trustee’s sale; (3) breach of the implied covenant of good faith and fair dealing; and (5) breach of promise to expunge lis pendens.

Erde, via the entity Crenshaw LLC, is the former owner of real property on Crenshaw Blvd. Cross-Defendant Balboa had a lien on the property that had gone into default for the property’s entity owner’s failure to make payments. Balboa noticed a trustee’s sale of the property. Erde then purchased the entity which owned the property. Erde alleges that the parties agreed that Erde would sell the property to Liberty for $1,800,000, with $175,000 going to Carwright to expunge its lis pendens and $1,198,000 going to Balboa to repay the lien instead of going through the trustees’ sale. Erde alleges Balboa changed the date of the trustee’s sale and sold the property to Liberty directly for less money in violation of the parties’ previous agreement. Erde alleges Cross-Defendants went through with the sale without him to deprive him of his broker’s commission on the sale.

ANALYSIS

A demurrer to a complaint may be taken to the whole complaint or to any of the causes of action in it.  (CCP § 430.50(a).)  A demurrer challenges only the legal sufficiency of the complaint, not the truth of its factual allegations or the plaintiff's ability to prove those allegations.  (Picton v. Anderson Union High Sch. Dist. (1996) 50 Cal. App. 4th 726, 732.)  The court must treat as true the complaint's material factual allegations, but not contentions, deductions or conclusions of fact or law.  (Id. at 732-33.)  The complaint is to be construed liberally to determine whether a cause of action has been stated.  (Id. at 733.)

A. First Cause of Action for Breach of Contract

“The standard elements of a claim for breach of contract are: ‘(1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff therefrom.’” (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178.)

Cartwright demurs to the first cause of action on the ground that Erde has not previously alleged the first cause of action against Cartwright. Though Erde has not placed Cartwright’s name in the caption of the first cause of action, Erde has alleged that Cartwright breached contracts with Erde in each iteration of the complaint. The Court will allow Erde to allege this cause of action against Cartwright.

The demurrer to the first cause of action is OVERRULED.

B. Third Cause of Action for Breach of the Implied Covenant of Good Faith and Fair Dealing, Fifth Cause of Action for Breach of Promise to Ex Punge Lis Pendens

Cartwright demurs to the third and fifth causes of action on the ground that Erde has failed to allege contracts between Erde and Cartwright. Erde alleges Cartwright agreed to expunge the lis pendens on the property in exchange for $175,000.00 from the proceeds of the sale of the property from Erde to Liberty. Erde alleges Cartwright then conspired with the other Cross-Defendants to sell the property to Liberty without including Erde. Cartwright asserts that this cause of action fails because Erde has not alleged whether the contract was written, oral, or implied, and Erde has not alleged conduct that goes beyond a mere breach.

Erde generally alleges that these contracts were written, oral, and implied in fact. The specific allegations show that the contracts were oral and/or implied-in-fact. This is sufficient to allege the existence of contracts. Erde alleges the parties acted in bad faith by conspiring without Erde to sell the property directly to Liberty. This is sufficient to allege breach of the implied covenant of good faith and fair dealing.

The demurrer to the third and fifth causes of action is OVERRULED.