Judge: Maurice A. Leiter, Case: 23STCV25542, Date: 2024-03-01 Tentative Ruling

Case Number: 23STCV25542    Hearing Date: April 8, 2024    Dept: 54

Hearing Date: April 8, 2024

Department 54, Judge Maurice A. Leiter

Demurrer to First Amended Complaint

Moving Party: Defendant Pacific Coast Energy Company, LP

Responding Party: Plaintiff Bridgeland Resources, LLC

T/R:      DEFENDANT’S DEMURRER IS OVERRULED.

DEFENDANT TO FILE AND SERVE AN ANSWER TO THE FIRST AMENDED COMPLAINT WITHIN 30 DAYS OF NOTICE OF RULING.

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 December 29, 2023, Plaintiff filed the operative first amended complaint against Defendant, asserting nine causes of action for breach of contract, breach of the covenant of good faith and fair dealing, lien foreclosure, cancellation of instruments, tortious interference, and declaratory and injunctive relief. The parties jointly operate oil fields.

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 and Second Causes of Action for Breach of Joint Operating Agreement

“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.)

Defendant demurs to the first and second causes of action on the grounds that Plaintiff has failed to allege Plaintiff has performed under the contract. Defendant asserts Plaintiff did not comply with the requirement to mediate before this case was filed and seek reimbursement for expenses that Plaintiff failed to timely submit to Defendant under the contract. In opposition, Plaintiff asserts that whether mediation occurred prior to the filing of the complaint is outside the four corners of the complaint. Plaintiff also asserts that any untimely invoices are not material breaches.

The Court is limited on demurrer to the facts of the complaint. Plaintiff alleges that it performed its obligations under the contract; the Court must accept this as true at this stage. Defendant’s arguments require consideration of evidence and facts not before the Court.

The demurrer to the first and second causes of action is OVERRULED.

B. Third Cause of Action for Breach of the Settlement Agreement

Defendant demurs to the third cause of action for breach of the settlement agreement on the grounds that Plaintiff failed to perform under the contract and that the provision in settlement agreement allegedly breached by Defendant is ambiguous.

Plaintiff alleges it complied with the settlement agreement. Plaintiff alleges Defendant breached the agreement by recording a lien before the time allowed under the agreement. That Defendant has a different interpretation of the applicability of the time limits does not defeat this a cause of action.

The demurrer to the third cause of action is OVERRULED.

C. Fifth Cause of Action for Lien Foreclosure

Defendant asserts the fifth cause of action fails because the liens are for amounts incurred more than six months before the liens were recorded under CCP §1203.52. In opposition, Plaintiff argues the demurrer cannot be sustained on this basis because a demurrer must dispose of an entire cause of action. Defendant’s argument applies to some but not all the liens at issue under the fifth cause of action. The Court agrees.

The demurrer to the fifth cause of action is OVERRULED.

D. Sixth, Eighth and Ninth Causes of Action for Cancellation of Instruments, Declaratory Relief, and Injunction

Defendant demurs to the sixth, eighth and ninth causes of action on the grounds that they are derivative of the causes of action for breach of contract. As discussed, Plaintiff has sufficiently alleged claims for breach of contract.

The demurrer to the sixth, eighth, and ninth causes of action is OVERRULED.