Judge: Michael E. Whitaker, Case: 23SMCV05145, Date: 2024-01-30 Tentative Ruling

Case Number: 23SMCV05145    Hearing Date: January 30, 2024    Dept: 207

TENTATIVE RULING

MOTION

Defendants DRM Marketing International, LLC and Derek White (“Defendants”) demur to the first cause of action alleged in Plaintiff Scott Reiter’s (“Plaintiff”) First Amended Complaint (“FAC”) for Breach of Written Contract for failure to state a cause of action and uncertainty, pursuant to Code of Civil Procedure section 430.10, subdivisions (e) and (f). 

Plaintiff opposes the demurrer.

ANALYSIS

1.      DEMURRERS

“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 one 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.)

A.    UNCERTAINTY

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.) 

Defendants argue that Plaintiff’s first cause of action for breach of written contract is uncertain because Plaintiff pleads a second cause of action for breach of oral contract in the alternative.  Defendants do not demonstrate that any portions of the FAC is so bad that they cannot reasonably determine what issues much be admitted or denied, or what claims are directed against them.  Moreover, at this stage of the litigation, Plaintiff may “plead in the alternative and make inconsistent allegations.”  (Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1388.)

The Court thus declines to sustain Defendants’ demurrer to the first cause of action on the basis of uncertainty. 

B.     FAILURE TO STATE A CAUSE OF ACTION

                                                                    i.            First Cause of Action – Breach of Contract

“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.) 

Here, Plaintiff alleges, in relevant portion:

8. On or around March 10, 2014, Plaintiff and Defendants’ predecessor in interest, Hoorsenbuhs, Inc., entered into that AIR Commercial Real Estate Association Standard Industrial/Commercial Single-Tenant Lease –Net for the Main Property (“Main Lease”). A true and correct copy of the Main Lease is attached hereto as Exhibit A.

9. The term of the Main Lease was from April 1, 2014 to March 31, 2019. On or around March 2019 and before the Main Lease expired, Defendants took over possession of the Main Property, assumed the Main Lease, and began paying rent.

10. Defendants remained in possession of the Main Property after the Main Lease expired, and thereafter became month-to-month tenants subject to the terms of the Main Lease. Defendants defaulted under the Main Lease and eventually vacated the Main Property on September 15, 2023, after they were served with a 3 Days’ Notice to Pay or Quit and failed to timely pay within three days of being served with the notice.

[…]

26. Defendants assumed the Main Lease and became tenants of the Main Property.

27. Plaintiff did all, or substantially all, of the significant things that the Main Lease required it to do.

28. Defendants materially breached the Main Lease, by, among other things, failing to pay multiple months of rent, failing to pay real property taxes owed for the Main Property, failing to properly and adequately maintain the Main Property, and damaging the Main Property. As a direct and proximate result of Defendants’ breaches of the Main Lease, Plaintiff has been damaged in a sum according to proof, but in the minimum amount and exceeding $25,001.00.

29. Section 31 of the Main Lease provides, in relevant part, that “[i]f any party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys’ fees.”

(FAC ¶¶ 8-10; 26-29.)  In addition, Plaintiff describes various specific requirements of the written agreement and breaches by Defendants.  (See FAC ¶¶ 11-17.)  Thus, Plaintiff has adequately pleaded a cause of action for breach of written contract.

            Defendants contend that Plaintiff has not adequately pleaded a cause of action for breach of written contract, because the only contract attached to the FAC is the original lease agreement, which expired on March 31, 2019, before Defendants’ alleged breaches occurred, not the assignment agreement. 

            With regard to the proper pleading standard for a breach of written contract, “[t]he correct rule is that a plaintiff may plead the legal effect of the contract rather than its precise language.”  (Miles v. Deutsche Bank National Trust Co. (2015) 236 Cal.App.4th 394, 402.)  In Miles, the Court of Appeal noted “where a written instrument is the foundation of a cause of action it may be pleaded in haec verba by attaching a copy as an exhibit and incorporating it by proper reference.”   (Ibid., emphasis in original & quoting Wise v. Southern Pacific Co. (1963) 223 Cal.App.2d 50, overruled on other grounds.)  Thus, attaching a copy of the written agreement and/or pleading the contents of a written agreement verbatim are two ways of pleading a breach of contract claim, but not “the exclusive means of pleading a contract.”  (Ibid., emphasis in original). To wit, a “plaintiff's failure either to attach or to set out verbatim the terms of the contract was not fatal to his breach of contract cause of action.”  (Ibid.)  “A [written] contract should be pleaded either in haec verba or according to its legal intendment and effect.”  (Scolinos v. Kolts (1995) 37 Cal.App.4th 635, 640 [cleaned up].) 

Moreover, whether the written agreement at issue in fact expired prior to Defendants’ alleged breach or was extended by virtue of the assumption, is a factual issue to be determined at later stages of the litigation.  For purposes of withstanding a demurrer, Plaintiff has alleged sufficient “ultimate facts” at this stage of the litigation.[1]

CONCLUSION AND ORDER

For the reasons stated, the Court overrules Defendants’ Demurrer to the First Cause of Action. 

The Court orders Defendants to file an Answer to the First Amended Complaint on or before February 13, 2024. 

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

DATED:  January 30, 2024                                                    ___________________________

                                                                                          Michael E. Whitaker

                                                                                          Judge of the Superior Court