Judge Michael E. Whitaker, Case Number: 23SMCV01755, Date: 2024-07-29 Tentative Ruling

Judge: Michael E. Whitaker, Case: 23SMCV01755, Date: 2024-07-29 Tentative Ruling

Plaintiff Cyrus J. Nownejad (“Plaintiff”) is an inactive attorney proceeding in this litigation in pro per. Plaintiff originally filed suit, purportedly on his own behalf and on behalf of Cyrus S. Nownejad and the Cyrus S. Nownejad Living Trust.

Upon being informed during meet and confer discussions that only an active attorney can represent others, Plaintiff filed the operative First Amended Complaint solely in his own capacity, alleging six causes of action for (1) declaratory relief; (2) third party beneficiary of the lease contract; (3) breach of contract and implied covenant of good faith and fair dealing; (4) conversion; (5) private and publican [sic] nuisance brought by private person; and (6) unfair & fraudulent business practices.

Defendants David Shadpour and Social Native, LLC (“Defendants”) demur to all six causes of action alleged in Plaintiff’s First Amended Complaint on the grounds that Plaintiff lacks legal standing to sue, fails to state facts sufficient to constitute a cause of action, and uncertainty, pursuant to Code of Civil Procedure section 430.10, subdivisions (b), (e), and (f), respectively. Defendants also move to strike from the FAC allegations pertaining to and requests for punitive damages and attorneys’ fees. Plaintiff opposes both motions.

“It is black letter law that a demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.) In testing the sufficiency of a cause of action, a court accepts “[a]s true all material facts properly pled and matters which may be judicially noticed but disregard contentions, deductions or conclusions of fact or law. [A court also gives] the complaint a reasonable interpretation, reading it as a whole and its parts in their context.” (290 Division (EAT), LLC v. City & County of San Francisco (2022) 86 Cal.App.5th 439, 450 [cleaned up]; Hacker v. Homeward Residential, Inc. (2018) 26 Cal.App.5th 270, 280 [“in considering the merits of a demurrer, however, “the facts alleged in the pleading are deemed to be true, however improbable they may be”].)

Further, in ruling on a demurrer, a court must “liberally construe” the allegations of the complaint “with a view to substantial justice between the parties.” (See Code Civ. Proc., § 452.) “This rule of liberal construction means that the reviewing court draws inferences favorable to the plaintiff, not the defendant.” (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238.)

In summary, “[d]etermining whether the complaint is sufficient as against the demurrer on the ground that it does not state facts sufficient to constitute a cause of action, the rule is that if on consideration of all the facts stated it appears the plaintiff is entitled to any relief at the hands of the court against the defendants the complaint will be held good although the facts may not be clearly stated, or may be intermingled with a statement of other facts irrelevant to the cause of action shown, or although the plaintiff may demand relief to which he is not entitled under the facts alleged.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 639.)

Defendants first argue that the entire FAC is a sham pleading because Plaintiff originally brought the claims on behalf of other litigants and now brings them on his own behalf “without explanation.” The Court notes that the original complaint was also brought by Plaintiff in his individual capacity and is therefore consistent with the prior pleading, notwithstanding that he amended it to omit the other plaintiffs, who he is not currently licensed to represent. Therefore, the Court determines that Defendants’ contention is not a basis to sustain the demurrer to the entire FAC.

Defendants next contend that Plaintiff lacks standing to assert the breach of contract causes of action because Plaintiff is not a party to the contract, nor is he a clearly intended third party beneficiary, based on the language of the agreement attached to the FAC.

“California law permits third party beneficiaries to enforce the terms of a contract made for their benefit.” (Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1021 (hereafter Sprinks).) However, “[t]he circumstance that a literal contract interpretation would result in a benefit to the third party is not enough to entitle that party to demand enforcement. The contracting parties must have intended to confer a benefit on the third party.” (Id. at p. 1022.) But “the third person need not be named or identified individually to be an express beneficiary.” (Id. at p. 1023.) “A third party may enforce a contract where he shows that he is a member of a class of persons for whose benefit it was made.” (Ibid.)

“Ultimately, the determination turns on the manifestation of intent to confer a benefit on the third party.” (Sprinks, supra, 171 Cal.App.4th at p. 1023.) But “there is no requirement that both of the contracting parties must intend to benefit the third party.” (Ibid.) It suffices that the promisor understood the promise had such intent at the time of contracting. (Ibid.) “Ascertaining intent is a question of ordinary contract interpretation.” (Ibid.)

“Intent is to be inferred, if possible, solely from the language of the written contract.” (Sprinks, supra, 171 Cal.App.4th at p. 1023.) However, “[i]n determining the meaning of a written contract allegedly made, in part, for the benefit of a third party, evidence of the circumstances and negotiations of the parties in making the contract is both relevant and admissible.” (Id. at p. 1024.)

Here, the contract at issue is a commercial lease agreement between Cyrus S. Nownejad as landlord and Defendant Social Native LLC as tenant, and is signed by Defendant Shadpour as manager of Social Native LLC. (Ex. B to FAC.) Plaintiff alleges he is a third party beneficiary to the lease agreement because he maintained and managed the family business, which is sustained by Defendants’ rental payments under the agreement. (FAC at p. 8.)

Thus, Plaintiff has adequately pleaded that he has standing to bring the breach of contract causes of action as a third party beneficiary. Whether Plaintiff is in fact a third party beneficiary to the contract involves the resolution of factual issues to be determined at later stages of the litigation.

“[D]emurrers for uncertainty are disfavored.” (Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1135.) A demurrer for uncertainty will be sustained only where the pleading is so bad that the responding party cannot reasonably respond - i.e., he or she cannot reasonably determine what issues must be admitted or denied, or what claims are directed against him or her. (Khoury v. Maly’s of California (1993) 14 Cal.App.4th 612, 616.) Where a demurrer is made upon the ground of uncertainty, the demurrer must distinctly specify exactly how or why the pleading is uncertain, and where such uncertainty appears by reference to page and line numbers. (See Fenton v. Groveland Comm. Services Dist. (1982) 135 Cal.App.3d 797, 809.)

Although Defendants argue that the second cause of action for third party beneficiary for damages for breach of contract is uncertain, Defendants do not demonstrate that any portions of the FAC, or of the second cause of action specifically, are so bad that Defendants cannot reasonably determine what issues must be admitted or denied, or what claims are directed against them. The Court thus declines to sustain Defendants’ demurrer to the second cause of action on the basis of uncertainty.

Defendants argue that Defendant Shadpour is not liable because he was not a party to the agreement, having signed it only on behalf of Defendant Social Native LLC. However, Plaintiff alleges that Shadpour and Social Native LLC are alter egos. (See FAC at pp. 3-4.) Therefore, Plaintiff has adequately alleged individual liability as to Shadpour.

Plaintiff seeks declaratory relief that Plaintiff is a third-party beneficiary of the commercial lease agreement. Defendant demurs to the first cause of action on the grounds that it is duplicative of Plaintiff’s breach of contract cause of action and because it does not operate prospectively to prevent future conflict.

“Generally, an action in declaratory relief will not lie to determine an issue which can be determined in the underlying tort action. The declaratory relief statute should not be used for the purpose of anticipating and determining an issue which can be determined in the main action. The object of the statute is to afford a new form of relief where needed and not to furnish a litigant with a second cause of action for the determination of identical issues.” (California Ins. Guarantee Assn. v. Superior Court (1991) 231 Cal.App.3d 1617, 1623–1624.)

The Court agrees that a preliminary determination as to whether Plaintiff is a third-party beneficiary of the lease agreement such that Plaintiff has standing to raise the claims is necessary to the resolution of Plaintiff’s contractual claims, and thus the Declaratory relief is entirely duplicative.

Therefore, the Court sustains Defendants’ demurrer to the first cause of action.

iii. Second and Third Causes of Action – Third Party Beneficiary Breach of Contract/Breach of Implied Covenant of Good Faith and Fair Dealing

“To prevail on a cause of action for breach of contract, the plaintiff must prove (1) the contract, (2) the plaintiff's performance of the contract or excuse for nonperformance, (3) the defendant's breach, and (4) the resulting damage to the plaintiff.” (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.)

Defendants demur to the second cause of action on the grounds that it fails to allege the elements of breach of contract and to the third cause of action on the grounds that it fails to indicate Plaintiff is a third-party beneficiary of the contract.

The Court agrees that the second and third causes of action are inartfully pleaded. Under the heading for the second cause of action, as discussed above, Plaintiff chiefly explains the reasons why he is an intended third-party beneficiary of the contract, and under the heading for the third cause of action, Plaintiff alleges the elements for breach of contract. Under the third cause of action, Plaintiff alleges:

Plaintiffs re-allege each paragraph of this Complaint as though fully set forth herein.

1. Plaintiff and Defendants entered into a contract on or about April 23, 2017 to rent the premises at 9935 South Santa Monica, Blvd., Beverly Hills 90212 with an adjoining parking until April 23, 2020. Said contract is attached hereto and incorporated herein by reference as “EXHIBIT “A”.

2. Plaintiff did all, or substantially all, of the significant things that the contract required Plaintiff to do because Plaintiff provided the premises at 9935 South Santa Monica, Blvd., Beverly Hills 90212 with an adjoining parking lot to rent to Defendant from April 23, 2017 to April 23, 2020. See Clause “6.1. Uses.”… “The taking of possession of the Premises by Tenant shall conclusively establish that the Premises and the Building were at such time in satisfactory condition.” Plaintiffs performed all conditions, covenants, and promises required on their part to be performed in accordance with the said contract, with the exception of those conditions which Plaintiffs were prevented and/or relieved from performing by the acts and omissions of the Defendants. Implicit in the parties' contract was the requirement to perform such contractual obligations competently with relevant disclosures, to not act dishonestly, and to comply with all City, State, and Federal laws (and other applicable laws). Consequently, the “implied good faith and fair dealing” in this contract was breached by defendants as articulated below.

3. Defendants materially breached the following, but not limited to, contract clauses below, especially the bolded sections. First, Defendants materially breached the following contract clauses “3.” and “3.A.” because Defendants failed to pay rent timely and failed to pay the entire amount of rent and late fees. The amounts owed to Plaintiff for said damages caused by Defendants are articulated in detail under the “fifth breach of contract section” herein.

Second, Defendants materially breached the contract clause “4.” below because Defendant did not restore the Security Deposit as required due to Defendants failure to pay all of the rent and other contractual obligations addressed herein below.

Third, Defendants materially breached the below contract clauses “5.”, “5.2”, and “5.3” because defendants failed to pay taxes and insurance payments timely and failed to pay all of the taxes and insurance payments. Note, the definition of a Triple Net Lease (NNN) is “a commercial lease where the lessee pays rent and utilities as well as three other types of property expenses: insurance, maintenance, and taxes.” The amounts owed to Plaintiff for said damages caused by Defendants are articulated in detail under the “fifth breach of contract section” herein.

Fourth, Defendants materially breached the below contract clause “6.1 USES” and “6.3(a)(b)(c) and “8 (c)” because defendants failed to use the premises for a lawful purpose because Defendants failed to: 1) pay relevant taxes as required by clauses “5.2”, “5.3”, and “7.1”; 2) obtain construction permits with the City of Beverly Hills to tear down walls on the west inside portion of the building and then did not restore the walls to their original condition thereby causing great structural damage; and 3) pay insurance timely and failed to pay all the insurance. 4) failed to make repairs as required by City, State, and Federal laws and codes.

*Fifth, Defendants materially breached the below contract clauses “7.”, “7.1”, “11.3.”, and “11.4.”, “8.”, “8.1(b)(i) a., b., c, 8.1(b)(ii)”, and “18.15.” because defendants failed to pay for, maintain, repair, restore, and or replace the bolded contractual obligations articulated below. Moreover, pursuant to clauses “11.3 and 11.4.” below, Landlord is not liable for Tenants’ breached obligations to prudently maintain and repair the Premises. The amounts owed to Plaintiff for said damages caused by Defendants are articulated in detail under the “fifth breach of contract section” herein.

Consequently, due to Defendants materially breaching the above clauses and the other clauses mentioned herein, Defendants are liable to Plaintiffs for, but not limited to, the damages articulated below in the following open book account of unpaid amounts owed to Plaintiff.

Sixth, Defendants materially breached the below contract clause 8.1(b)(iv) because defendants failed to pay: “Any amount so expended by Landlord shall be paid by Tenant to Landlord promptly after demand with interest at ten percent (10%) from the date of such work.” for Defendants breaches articulated herein. The amounts owed to Plaintiff for said damages caused by Defendants are articulated in detail under the “fifth breach of contract section” herein.

Seventh, Defendants materially breached the below contract clauses below, “8.2 (a.), (b.), (c), (d), (e)” because defendants failed to comply with it, and failed to get Landlords consent for, pay for, repair, and restore the property to its original condition from Defendants’ alleged tenant property improvements (TPI). The amounts owed to Plaintiff for said damages caused by Defendants are articulated in detail under the “fifth breach of contract section” herein.

Eighth, Defendants materially breached the bolded contract clause below, “10 LIENS”, because defendants failed to comply with the bolded sections and failed to pay for the “Tax liens” and “obligations incurred by Tenant” “plus 10% interests from the dates that Landlord had to pay for such expenses. The amounts owed to Plaintiff for said damages caused by Defendants are articulated in detail under the “fifth breach of contract section” herein.

Nineth, Defendants materially breached the contract clauses: “12. INSURANCE”; “12.1.(a), (b), (c) Fire and Other Insurances – Tenant reimburses Landlord., Insurance Coverage that Tenant pays for.”; and “12.2 Insurance Policies:” because Defendant failed to pay for and procure a $2,000,000 insurance policy for the period of Defendants Lease, failed to reimburse Landlord for paying for such insurance policy, and failed to pay to Landlord an additional 25% of the cost of the insurance policy as a handling fee for Landlord obtaining and paying for such policy because Defendant failed to do this. The amounts owed to Plaintiff for said damages caused by Defendants are articulated in detail under the “fifth breach of contract section” herein.

Tenth, Defendants materially breached the below contract clauses below, “13.5 Landlord's Obligations.” and “13.6.” below because defendants failed to “repair or restore such damage or destruction at Tenant's sole cost and expense and incompliance with the requirements of then-applicable codes, regulations and laws, and this Lease.” Defendants failed to “restore and replace railings and floor coverings, office fixtures or any other improvements.” The amounts owed to Plaintiff for said damages caused by Defendants are articulated in detail under the “fifth breach of contract section” herein.

Eleventh, Defendants materially breached the below contract clauses, “15.” and “15.1. Landlord’s Consent Required.” because defendants failed to obtain Landlords’ written consent to assign and sublease the Premises, and failed to pay Landlord rent and late fees for doing this. The amounts owed to Plaintiff for said damages caused by Defendants are articulated in detail under the “fifth breach of contract section” herein.

Twelfth, Defendants materially breached contract clause “15.3. Subletting.” because Defendants failed to provide Landlord: “…along with a request for the Landlord's consent, Tenant shall submit in writing ("Sublet Notice") to Landlord (a) the name(s), address(s) and legal composition(s) of the proposed subtenant(s), (b) the nature of the business(s) proposed to be carried on the Premises by the subtenant(s), (c) the terms and provisions of the proposed sublease(s), and (d) such reasonable, financial information as Landlord may request concerning the proposed subtenant(s) such as income and credit score for the last five years.”

Thirteenth, Defendants materially breached the below contract clause “15.3. Subletting. (4) Sublease Rent Collection By Landlord.” because Defendants failed to pay Landlord subleasee’s (sic) rent payments for other obligations owed by Defendants to Landlord under the Lease. The amounts owed to Plaintiff for said damages caused by Defendants are articulated in detail under the “fifth breach of contract section” herein.

Fourteenth, Defendants materially breached the below contract clause “17.”, 17.1(a), (c ) because Defendants failed to “pay the rent or any other monetary sums required to be paid” for other obligations owed by Defendants to Landlord under the Lease. The amounts owed to Plaintiff for said damages caused by Defendants are articulated in detail under the “fifth breach of contract section” herein.

Fifteenth, Defendants materially breached the below contract clause “17.2(a) (b)”, because Defendants failed to pay Landlord the amounts owed to Plaintiff for said damages caused by Defendants are articulated in detail under the “fifth breach of contract section” herein. Therefore, Landlord exercises Landlord’s remedies under, but not limited to, 17.2 (a) and (b) (i), (ii), (ii), (iii), (iv), and (v) below. The amounts owed to Plaintiff for said damages caused by Defendants are articulated in detail under the “fifth breach of contract section” herein.

Sixteenth, Defendants materially breached the below contract clause “17.3”, because Defendants failed to pay Landlord all amounts owed under this Lease contract “plus ten percent (10%) annual interest on the said overdue amounts owed to Landlord.” The amounts owed to Plaintiff for said damages caused by Defendants are articulated in detail under the “fifth breach of contract section” herein.

Seventeenth, Defendants materially breached the below contract clause “18.14”, because Defendants failed to comply with it and pay Landlord all amounts owed under this Lease contract “plus ten percent (10%) annual interest on the said overdue amounts owed to Landlord.” The amounts owed to Plaintiff for said damages caused by Defendants are articulated in detail under the “fifth breach of contract section” herein.

Eighteenth, Defendants materially breached the below contract clause “18.8”, because Defendants failed to pay Landlord all amounts owed under this Lease timely and failed to perform all the contract clauses alleged herein timely, if at all.

Nineteenth, Defendants materially breached the below contract clauses “18.15. 2) and 8)” because defendants failed to obtain written consent of Landlord to change the front door lock, failed to install the electrical front door key pad handle lock correctly as per code, Defendant brook the front door lock and electrical operating system that opens the door contrary to code, and failed to pay for repairing it. Moreover, Defendants failed to give Plaintiff the front door key (i.e., the key pad combination to enter the front door of the building) after numerous written and phone call requests for over two months after the termination date of the Lease on April 23, 2020. Furthermore, the following email was sent on May 14, 2020 to Defendants with numerous phone calls articulating the same as below with no response which was typical with most communications from Gita Nownejad and Cyrus John Nownejad to Defendants. The amounts owed to Plaintiff for said damages caused by Defendants are articulated in detail under the “fifth breach of contract section” herein.

Twentieth, Defendants materially breached the below contract clauses “18.12.” because Defendant was a “Hold Over Tenant” because the front door key described above was not returned (key pad combination was not disclosed) for over two months after the termination date of the Lease on April 23, 2020. Accordingly, for the aforementioned reasons, but not limited to, Defendants are deemed in control of the Premises and therefore subject to rent liability until all keys in Defendants possession are returned and landlord is not locked out of the building. Consequently, Defendant owes Plaintiff $19,000 the two+ months that Defendants were a holdover tenants plus 10% annual interest on that rent. The amounts owed to Plaintiff for said damages caused by Defendants are articulated in detail under the “fifth breach of contract section” herein.

Twenty-first, Defendants materially breached the below contract clauses “18.15. 11)” because Defendant failed to pay for and failed to maintain and replace the fire-extinguishers for three years at $90 each year ($270) and failed to pay the yearly Beverly Hills Fire Department inspection fee of $434 in the building from April 23, 2017 to April 23, 2020 thereby causing Landlord to pay for this. The amounts owed to Plaintiff for said damages caused by Defendants are articulated in detail under the “fifth breach of contract section” herein.

Twenty-second, Defendants materially breached the below contract clause “18.15. 14)” because Defendant failed to “comply with the changes and additions to these rules and regulations that Landlord made” and failed to comply with the “implied covenant of good faith and fair dealing that lies in every contract.” This was because Gita Nownejad and Cyrus John Nownejad, as trustees of Cyrus S. Nownejad and the Cyrus S. Nownejad Living Trust, became the Landlord instead of Cyrus S. Nownejad. Cyrus S. Nownejad was about 89 years of age or older and was a dependent adult at the time of Defendants misconduct (April 23, 2017 to April 23, 2020 and thereafter), was permanently mentally incapacitated with a severe case of dementia, was permanently physically incapacitated with a heart valve transplant, was permanently bed ridden in assisted care living and at home, was hard of hearing, and had a broken hip. Consequently, Cyrus S. Nownejad was no longer able to handle any of his own business or medical affairs as per his very concerned Neurologist, Orthopedic, and Cardiovascular doctors. Said incapacities were so pronounced, instantly apparent, and obvious by viewing and or listening to Cyrus S. Nownejad for merely a moment that any lay person that was a non-medical professional would realize them. Said incapacities were observed by Defendants from time to time. Moreover, Cyrus J. Nownejad and Gita Nownejad informed Defendants of the permanent mental and permanent physical incapacities from the start of the Lease in 2017 and thereafter numerous times through the end of the Lease date on or about April 2020. These notices to Defendants were given daily, weekly, monthly, and or every several months. Similarly, for these reasons, Cyrus J. Nownejad and Gita Nownejad informed defendants to exclusively communicate with Cyrus J. Nownejad as the relevant trustee to deal with on all Lease matters that had to do with the rented Premises instead of Cyrus S. Nownejad since Cyrus S. Nownejad was incapable of making such decisions due to his mental and physical incapacities. Nevertheless, Defendants refused to exclusively communicate with Cyrus J. Nownejad many times and communicated with Cyrus S. instead in order to escape and conceal Defendants’ contractual obligations articulated herein. Therefore, Defendants materially breached the below contract clause “18.15. 14)” because Defendant failed to “comply with the changes and additions to these rules and regulations that Landlord made” and failed to comply with the “implied covenant of good faith and fair dealing that lies in every contract.”

7. Defendant’s breach of contract was a substantial factor in causing Plaintiff’s harm. As a direct and proximate result of Defendants said contractual breaches, Plaintiffs have suffered compensatory damages in an amount to be proven at trial, but estimated to be approximately $765,720.70 times three pursuant to Civil Code 3345 for financial elder abuse (i.e., $2,297,162.10) plus attorney fees and costs of litigation.

In analyzing pleadings, Courts elevate substance over form. (See Plumlee v. Poag (1984) 150 Cal.App.3d 541, 546 [“Courts under the reformed system of procedure look to the substance of things rather than to form”].) Further “Providing access to justice for self-represented litigants is a priority for California courts.” (California Rules of Court, rule 10.960(b).)

Therefore, elevating substance over form, the Court finds that Plaintiff has adequately alleged that he is a third party beneficiary, the requisite elements for a breach of contract claim, and that Defendants breached the implied covenant of good faith and fair dealing. As such, the Court overrules Defendants’ demurrer to the second and third causes of action.

“Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff's ownership or right to possession of the property; (2) the defendant's conversion by a wrongful act or disposition of property rights; and (3) damages.” (Welco Electronics, Inc. v. Mora (2014) 223 Cal.App.4th 202, 208.)

Defendant demurs to the fourth cause of action on the grounds that Plaintiff’s allegations are “boilerplate conclusions without sufficient factual support.” (Demurrer at p. 13.)

1. Plaintiff owned and had an immediate right to possess to the personal property below at the time Defendants converted it.

2. Defendants Intentionally, knowingly, wrongfully, and unlawfully exercised dominion and control over plaintiff’s personal property below by Ralidis substantially interfering with plaintiff’s possession and control of plaintiff’s personal property by all of the following:

d. “refusing to return it at the end of Defendants’ lease on June 24, 2020, after plaintiff demanded its return,”

As a result of Defendants aforementioned unlawful conduct, plaintiff’s (Cyrus John’s) personal property that was converted and or removed from the premises was as follows:

13) electrical closet wires from a fire Defendant caused from failing to maintain and repair the premises, and

3. Plaintiff did not consent to Defendants’ aforementioned unlawful conduct or the conversion of plaintiff’s said personal property.

There is no heightened pleading requirement to state a cause of action for conversion. As such, Plaintiff has adequately pleaded “ultimate facts” to withstand demurrer.[1]

A “nuisance” is “[a]nything which is injurious to health, including, but not limited to, the illegal sale of controlled substances, or is indecent or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property, or unlawfully obstructs the free passage or use, in the customary manner, of any navigable lake, or river, bay, stream, canal, or basin, or any public park, square, street, or highway, is a nuisance.” (Civ. Code, § 3479.)

A nuisance may be public, private, or both. (Koll-Irvine Center Property Owners Assn. v. County of Orange (1994) 24 Cal.App.4th 1036, 1041.) “Unlike public nuisance, which is an interference with the rights of the community at large, private nuisance is a civil wrong based on disturbance of rights in land.” (Ibid.) “So long as the interference is substantial and unreasonable, and such as would be offensive or inconvenient to the normal person, virtually any disturbance of the enjoyment of the property may amount to a nuisance.” (Ibid.)

Defendants argue that Plaintiff fails to allege a public nuisance that is separate and apart from the alleged private nuisance. As Defendants acknowledge, the FAC alleges that Defendants failed to adequately maintain sewer pipes and air conditioners on the property. (See Demurrer at p. 13.) This caused sewage to overflow onto the property, causing property damage and a public health hazard, as well as intolerable temperatures and an electrical fire on the premises. (FAC at pp. 51-52.) Plaintiff also alleges Defendants installed hidden spy cameras in the ceilings of the bathrooms of the premises, creating a public nuisance. (Id. at p. 52.) As such, Plaintiff alleges a private nuisance with respect to the leased premises, as well as a nuisance to the public at large. Therefore, the Court overrules Defendants’ demurrer to the fifth cause of action.

Business and Professions Code section 17200, known as the Unfair Competition Law, or “UCL,” bars unfair competition, defined as “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by Chapter 1 (commencing with Section 17500) of Part 3 of Division 7 of the Business and Professions Code. “An ‘unlawful’ business practice or act within the meaning of the UCL is an act or practice, committed pursuant to business activity, that is at the same time forbidden by law.” (Bernardo v. Planned Parenthood Federation of Am. (2004) 115 Cal.App.4th 322, 351.) “By proscribing ‘any unlawful’ business practice, section 17200 borrows violations of other laws and treats them as unlawful practices that the unfair competition law makes independently actionable.” (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.) Moreover, “a practice may be deemed unfair even if not specifically proscribed by some other law.” (Ibid.)

Defendants demur to Plaintiff’s sixth cause of action on the grounds that (1) Plaintiff lacks standing because he does not allege an economic injury; and (2) Plaintiff lacks standing because he does not allege he is a consumer or a competitor of Defendants, as required under the fraudulent prong.

The FAC alleges several predicate violations of law, including nuisance, conversion, and elder abuse, and Plaintiff alleges to have incurred over $75,000 in damages (FAC at p. 62) as well as lost property in connection with the conversion claim.

Any party, within the time allowed to respond to a pleading, may serve and file a motion to strike the whole pleading or any part thereof. (Code Civ. Proc., § 435, subd. (b)(1); Cal. Rules of Court, rule 3.1322, subd. (b).) On a motion to strike, the court may: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (Code Civ. Proc., § 436, subd. (a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782.) Here, Defendants move to strike from the FAC, allegations and requests for punitive damages and attorneys’ fees.

In ruling on a motion to strike punitive damages, “judges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.” (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.) To state a prima facie claim for punitive damages, a plaintiff must allege the elements set forth in the punitive damages statute, Civil Code section 3294. (College Hosp., Inc. v. Superior Court (1994) 8 Cal.4th 704, 721.) Per Civil Code section 3294, a plaintiff must allege that the defendant has been guilty of oppression, fraud, or malice. (Civ. Code, § 3294, subd. (a).) As set forth in the Civil Code,

(1) “Malice” means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others. (2) “Oppression” means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights. (3) “Fraud” means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.

Further, a plaintiff must assert facts with specificity to support a conclusion that a defendant acted with oppression, fraud or malice. To wit, there is a heightened pleading requirement regarding a claim for punitive damages. (See Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1041-1042.) “When nondeliberate injury is charged, allegations that the defendant’s conduct was wrongful, willful, wanton, reckless or unlawful do not support a claim for exemplary damages; such allegations do not charge malice. When a defendant must produce evidence in defense of an exemplary damage claim, fairness demands that he receive adequate notice of the kind of conduct charged against him.” (G. D. Searle & Co. v. Superior Court (1975) 49 Cal.App.3d 22, 29 [cleaned up].) In Anschutz Entertainment Group, Inc. v. Snepp, the Court of Appeal noted that the plaintiffs’ assertions related to their claim for punitive damages were “insufficient to meet the specific pleading requirement.” (Anschutz Entertainment Group, Inc. v. Snepp (2009) 171 Cal.App.4th 598, 643 [plaintiffs alleged “the conduct of Defendants was intentional, and done willfully, maliciously, with ill will towards Plaintiffs, and with conscious disregard for Plaintiff's rights. Plaintiff's injuries were exacerbated by the malicious conduct of Defendants. Defendants' conduct justifies an award of exemplary and punitive damages”]; see also Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166 [“The mere allegation an intentional tort was committed is not sufficient to warrant an award of punitive damages. Not only must there be circumstances of oppression, fraud, or malice, but facts must be alleged in the pleading to support such a claim”].)

Moreover, “the imposition of punitive damages upon a corporation is based upon its own fault. It is not imposed vicariously by virtue of the fault of others.” (City Products Corp. v. Globe Indemnity Co. (1979) 88 Cal.App.3d 31, 36.) “Corporations are legal entities which do not have minds capable of recklessness, wickedness, or intent to injure or deceive. An award of punitive damages against a corporation therefore must rest on the malice of the corporation’s employees. But the law does not impute every employee’s malice to the corporation. Instead, the punitive damages statute requires proof of malice among corporate leaders: the officers, directors, or managing agents.” (Cruz v. Home Base (2000) 83 Cal.App.4th 160, 167 [cleaned up].)

Plaintiff’s request for punitive damages is premised on his causes of action for conversion and nuisance only. (Opposition at p. 2.) In support of his position, Plaintiff cites to Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166. Grieves explained, “The mere allegation an intentional tort was committed is not sufficient to warrant an award of punitive damages.” (Ibid.)

Here, although Plaintiff alleges the conversion was intentional, Plaintiff fails to assert specific facts amounting to oppressive, fraudulent, or malicious conduct on the part of Defendants in connection with the conversion cause of action.

However, in connection with the nuisance cause of action, Plaintiff alleges Defendants overloaded the electrical circuits with too many plugs, which was an “abnormally dangerous activity” that caused an electrical fire and that Defendant installed hidden spy cameras in the ceiling of the bathrooms on the premises. As such, Plaintiff has adequately alleged malice and/or oppression by Defendant Shadpour, as manager of Defendant Social Native LLC to allege punitive damages.

Plaintiff premises his request for attorneys’ fees on the breach of contract and UCL causes of action.

“A third party beneficiary can only claim benefits that contracting parties intended it to receive, and cannot recover benefits intended to benefit only contracting parties.” (Sessions Payroll Management v. Noble Constr. Co. (2000) 84 Cal.App.4th 671, 674.)

“18.7 Costs of Suit. If Tenant or Landlord shall bring any action for, any relief against the other, declaratory or otherwise, arising out of this Lease, including any suit by Landlord for the recovery of rent or possession of the Premises, the losing party shall pay the successful party a reasonable sum for attorneys' fees which shall be deemed to have accrued on the commencement of such action and shall be paid whether or not such action is prosecuted to judgment.”

It is unclear from the pleadings whether the parties intended that the attorneys’ fee provision should extend to Plaintiff as a third party beneficiary or not. The language “Tenant or Landlord” suggests they did not, but the language pertaining to “the recovery of rent” suggests they may have. Because the Court cannot definitively determine that the parties did not intend to extend the attorneys’ fee provision to Plaintiff as a third party beneficiary at this stage of the litigation, it denies Defendants’ motion to strike the request for attorneys’ fees requested in connection with Plaintiffs’ breach of contract causes of action.

With regard to the UCL cause of action, a Plaintiff may recover attorneys’ fees on a UCL cause of action brought as a private attorney general. In this regard, Code of Civil Procedure section 1021.5 provides:

a court may award attorneys' fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement, or of enforcement by one public entity against another public entity, are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any.

Plaintiff contends he seeks a significant benefit to the public because his action would require Defendants to pay city, county, state, and federal taxes, liability insurance for the premises, and to remedy a public nuisance. The Court disagrees that a single property’s taxes, liability insurance, and nuisance remedy confers a sufficiently significant benefit to the public to warrant private attorney general fees. Therefore, the Court grants Defendants’ motion to strike Plaintiff’s request for attorneys’ fees in connection with the UCL cause of action.

A plaintiff has the burden of showing in what manner the complaint could be amended and how the amendment would change the legal effect of the complaint, i.e., state a cause of action. (See The Inland Oversight Committee v. City of San Bernardino (2018) 27 Cal.App.5th 771, 779; PGA West Residential Assn., Inc. v. Hulven Int'l, Inc. (2017) 14 Cal.App.5th 156, 189.) A plaintiff must not only state the legal basis for the amendment, but also the factual allegations sufficient to state a cause of action or claim. (See PGA West Residential Assn., Inc. v. Hulven Int'l, Inc., supra, 14 Cal.App.5th at p. 189.) Moreover, a plaintiff does not meet his or her burden by merely stating in the opposition to a demurrer or motion to strike that “if the Court finds the operative complaint deficient, plaintiff respectfully requests leave to amend.” (See Major Clients Agency v Diemer (1998) 67 Cal.App.4th 1116, 1133; Graham v. Bank of America (2014) 226 Cal.App.4th 594, 618 [asserting an abstract right to amend does not satisfy the burden].)

Here, Plaintiff fails to meet that burden, as he merely requests six weeks to amend the complaint, but does not specify what additional factual allegations he could add to correct the deficiencies identified above.

For the reasons stated, the Court sustains Defendants’ Demurrer to the First Cause of Action without leave to amend, but overrules Defendants’ Demurrer to the Second, Third, Fourth, Fifth, and Sixth causes of action.

Further, the Court grants in part and denies in part Defendants’ motion to strike. The Court strikes from the FAC Plaintiff’s request for attorneys’ fees in connection with the Sixth cause of action for Unfair & Fraudulent Business Practices and Plaintiff’s request for punitive damages in connection with the Fourth cause of action for conversion without leave to amend. The Court denies Defendants’ motion to strike Plaintiff’s request for attorneys’ fees in connection with the Second and Third causes of action for breach of contract and Plaintiff’s request for punitive damages in connection with the Fifth cause of action for nuisance.

Further, the Court orders Defendants to file and serve an Answer to the FAC on or before August 19, 2024.

Further, on the Court’s own motion, the Court continues the Case Management Conference to October 30, 2024 at 8:30 A.M. in Department 207. All parties shall comply with California Rules of Court, rules 3.722, et seq., regarding Initial and Further Case Management Conferences. In particular, all parties shall adhere to the duty to meet and confer (Rule 3.724) and to the requirement to prepare and file Case Management Statements (Rule 3.725).

Defendants shall provide notice of the Court’s ruling and file the notice with a proof of service forthwith.

[1] Ultimate facts are those “constituting the cause of action” or those upon which liability depends, e.g., duty of care, breach of the duty and causation (damages). (See Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550.) “[T]he term ultimate fact generally refers to a core fact, such as an essential element of a claim. Ultimate facts are distinguished from evidentiary facts and from legal conclusions.” (Central Valley General Hosp. v. Smith (2008) 162 Cal.App.4th 501, 513 [cleaned up]; see also Rodriguez v. Parivar, Inc. (2022) 83 Cal.App.5th 739, 750–751 [“The elements of a cause of action constitute the essential or ultimate facts in a civil case”].)

DEPARTMENT	207
HEARING DATE	July 29, 2024
CASE NUMBER	23SMCV01755
MOTIONS	Demurrer and Motion to Strike Portions of First Amended Complaint
MOVING PARTIES	Defendants David Shadpour and Social Native, LLC
OPPOSING PARTY	Plaintiff Cyrus J. Nownejad