Judge: Maurice A. Leiter, Case: 22STCV25435, Date: 2023-01-24 Tentative Ruling

Case Number: 22STCV25435    Hearing Date: January 24, 2023    Dept: 54

Hearing Date: January 24, 2023

Department 54, Judge Maurice A. Leiter

(2) Demurrers to Complaint

Moving Party: (1) Defendants NTB Acquisitions LLC, Tamar Hamparsomian and Sako Hamparsomian; and (2) Defendant Starcrest Escrow, Inc.

Responding Party: Plaintiff Stockpile Property Ventures LLC

T/R:     DEFENDANTS NTB ACQUISITIONS LLC, TAMAR HAMPARSOMIAN AND SAKO HAMPARSOMIAN’S DEMURRER IS OVERRULED.

DEFENDANT STARCREST’S DEMURRER IS SUSTAINED WITH LEAVE TO AMEND.

PLAINTIFF TO FILE AND SERVE A FIRST AMENDED COMPLAINT WITHIN 30 DAYS OF NOTICE OF RULING. DEFENDANTS TO FILE AND SERVE A RESPONSE WITHIN 30 DAYS THEREAFTER.

            DEFENDANTS 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 August 5, 2022, Plaintiff Stockpile Property Ventures LLC filed a complaint against Defendants Starcrest Escrow, Inc., NTB Acquisitions LLC, Tamar Hamparsomian and Sako Hamparsomian, asserting causes of action for (1) breach of contract; (2) breach of the covenant of good faith and fair dealing; (3) breach of contract (by Escrow); (4) negligence; and (5) money had and received. Plaintiff alleges it entered into a contract with the NTB Defendants to sell certain real property to Defendants. NTB deposited $35,000.00 into escrow with Defendant Starcrest and thereafter failed to close escrow. Plaintiff alleges that NTB breached the contract by failing to close escrow and that Plaintiff is entitled to the $35,000.00 deposit as liquidated damages. Starcrest has refused to release the deposit to Plaintiff.

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. Defendants NTB Acquisitions LLC, Tamar Hamparsomian and Sako Hamparsomian’s Demurrer to Complaint

            The NTB Defendants demur to Plaintiff’s complaint on the ground that Plaintiff did not own the real property it was attempting to sell to NTB. The NTB Defendants also assert that the individual Defendants were not parties to sales contract and cannot be held liable for its breach.

A demurrer challenges the legal sufficiency of the complaint. The Court is bound by the four corners of the complaint and/or any judicially noticeable documents. Plaintiff alleges that it performed its obligations under the contract between Plaintiff and Defendants. (Compl. ¶ 24.) Defendants’ assertion that Plaintiff did not own the subject property is not supported by the allegations or any judicially noticeable documents. The demurrer cannot be sustained on this basis.

Plaintiff alleges the individual Defendants are alter egos of entity Defendant NTB. (Comp. ¶¶ 5-7.) This is sufficient to state a cause of action for breach of contract against the individual Defendants.

The NTB Defendants’ demurrer is OVERRULED.

B. Defendant Starcrest Escrow, Inc.’s Demurrer to Complaint

Starcrest demurs to the third, fourth and fifth causes of action on the ground that Plaintiff cannot show a breach of contract or duty. Plaintiff alleges Starcrest has refused to disburse the $35,000 deposit to Plaintiff. The relevant contract portion provides:

Upon any termination of the Contract for any reason except where the Contract expressly provides for the return of the Deposit to Buyer, Buyer and Seller hereby irrevocably instruct and authorize the Closer to immediately release the Deposit to Seller upon request from Seller without any further action or instruction required by Buyer. Neither a Joint Escrow Instruction (defined below), nor any other written instruction from Buyer, shall be required for the Closer to release the Deposit to Seller.

Notwithstanding the foregoing, in the event the Closer requires Buyer to execute a joint escrow instruction in order to release the Deposit to Seller (a “Joint Escrow Instruction”), Buyer shall promptly execute same. If Buyer fails to execute any Joint Escrow Instruction within 2 days following Seller or Closer’s written request therefor, Seller may make a written demand to Closer for the Deposit and Closer shall promptly deliver notice of the demand to Buyer. If, within 10 days after Closer’s notice, Buyer does not object to the demand, then Closer shall disburse the Deposit to Seller, and Buyer is hereby deemed to have authorized Closer to so disburse the Deposit. Buyer may be subject to a civil penalty of up to $1,000 for refusal to sign a Joint Escrow Instruction if no good faith dispute exists as to who is entitled to the deposited funds.

(Compl. Exh. 1 Addenum A § 23, emphasis in original.)

Plaintiff alleges, “Notwithstanding STARCREST’s receipt of the Cancellation, STARCREST has refused to cancel the escrow and provide the $35,000.00 deposit to Plaintiff, claiming that STARCREST will not do so absent either NTB’s written authorization, which NTB refuses to provide, or a court order.” (Compl ¶ 22.) Plaintiff argues it is entitled to the funds without NTB’s consent, citing the first paragraph above. Starcrest asserts the sales contract allows Starcrest to require both Plaintiff and NTB to provide written consent to disburse the funds, citing the second paragraph.

Starcrest’s interpretation is persuasive. “Notwithstanding the foregoing, in the event the Closer requires Buyer to execute a joint escrow instruction in order to release the Deposit to Seller (a “Joint Escrow Instruction”)…” means that despite the parties agreement to forego a joint escrow instruction, the Closer (Starcrest) may still require a joint escrow instruction. The provision then sets forth the procedure should the Closer require a joint escrow instruction. Based on the language of the addendum, Plaintiff has failed to allege a breach by Starcrest.

Starcrest’s demurrer is SUSTAINED with leave to amend.