Judge Michael Shultz, Case 22CMCV00346 2023-02-02 Tentative Ruling

[TENTATIVE] ORDER SUSTAINING IN PART AND OVERRULING IN PART DEMURRER TO DEFENDANTS’ ANSWER

[TENTATIVE] ORDER SUSTAINING IN PART DEMURRER TO THE CROSS-COMPLAINT AND MOTION TO STRIKE

The complaint filed on October 3, 2022, alleges that Plaintiffs entered into a commercial lease agreement with Defendants on March 27, 2020. Defendants forcefully and wrongfully evicted and locked Plaintiffs out from the premises without complying with the requirements for unlawful detainer. Plaintiffs had the right of first refusal with respect to purchase of the premises, however, Defendants failed to give written notice to Plaintiffs about the sale. Plaintiffs allege claims for breach of contract and declaratory relief.

Plaintiffs demur to Defendant’s answer on grounds it fails to state facts to constitute a defense, is uncertain and does not allege whether the contract at issue is written or oral. The defenses are “boilerplate” and are unsupported by any facts. The 12^th Affirmative defense purporting to claim that Defendants may have other affirmative defenses is superfluous, since Defendants have a statutory right to seek leave to amend. Despite meeting and conferring with defense counsel, the parties have not resolved their differences.

In opposition, Defendants argue that this is a frivolous motion. The answer is sufficient to survive demurrer and are required in order to avoid waiver. Plaintiffs have not asserted what elements of the affirmative defenses are not alleged. Alternatively, Defendants ask for leave to amend.

A demurrer reaches defects that appear on the face of the pleading. The court considers the allegations and matters that are subject to judicial notice. All facts are accepted as true. Saunders v. Superior Court (1994) 27 Cal.App.4th 832, 837–838. A demurrer tests the legal sufficiency of the allegations. It does not test their truth, the plaintiff’s ability to prove them, or the possible difficulty in making such proof. Saunders v. Superior Court (1994) 27 Cal.App.4th 832, 840.

California is a fact pleading jurisdiction. The critical inquiry when a plaintiff demurs to an answer is whether the answer raises a defense to plaintiff’s stated cause of action. Timberidge Enterprises, Inc. v. City of Santa Rosa (1978) 86 Cal.App.3d 873, 880. The demurrer raises the objection that the answer does not state facts sufficient to constitute a defense. Id. at 880. The answer to a complaint must include any statement of any new matter constituting a defense. Code Civ. Proc., § 431.430(b)(2).

“New matter” refers to “something relied on by a defendant which is not put in issue by the plaintiff. [Citation.] Thus, where matters are not responsive to essential allegations of the complaint, they must be raised in the answer as “new matter.” Walsh v. West Valley Mission Community College Dist. (1998) 66 Cal.App.4th 1532, 1546. Thus, “new matter” is “any ground urged in avoidance of the complaint, ie., some independent reason why plaintiff should be barred from recovery, even if everything alleged in the complaint was true.” Walsh at 1546. [“Thus, where matters are not responsive to essential allegations of the complaint, they must be raised in the answer as 'new matter.' [Citation.] Where, however, the answer sets forth facts showing some essential allegation of the complaint is not true, such facts are not 'new matter,' but only a traverse.” Walsh v. West Valley Mission Community College Dist. (1998) 66 Cal.App.4th 1532, 1546 [italics in original].

The answer is liberally construed with a view to substantial justice between the parties. The answer should make clear what issues the adverse parties must meet such that when taken in connection with the complaint, “no reasonable person could be in any doubt about the issues to be met.” Hoelzle v. Fresno County (1958) 159 Cal.App.2d 478, 483.

Plaintiffs rely in part on FPI Development, Inc. v. Nakashima (1993) 231 Cal. App. 3d 367 which involved a summary judgment motion and whether or not affirmative defenses raised in the answer sufficiently placed facts at issue for purposes of the motion since the facts material to the motion were limited by the allegations of the pleading. FPI at 380. Since the affirmative defenses raised in FPI were not fact specific, the court found no facts were placed at issue for purposes of the motion for summary judgment. Furthermore, the particular defenses that the FPI court determined “would not survive demurrer” were defenses asserting fraud in the inducement and failure of consideration. FPI at 385. Causes of action for fraud typically require specificity in pleading. Nagy v. Nagy (1989) 210 Cal.App.3d 1262, 1268.

Ultimately, FPI observed that the pleading must “minimally advise the opposing party of the nature of the defense even if defective as conclusory. FPI at 385. Specificity in pleading is not required since “modern discovery procedures necessarily affect the amount of detail that should be required in a pleading.” Ludgate Ins. Co. v. Lockheed Martin Corp. (2000) 82 Cal.App.4th 592, 608.

A pleading is required to assert general allegations of ultimate fact. Evidentiary facts are not required. Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 47. Accordingly, Plaintiffs’ contention that the fifth affirmative defense regarding Defendants’ performance requires more specificity is not supported. Similarly, Plaintiffs’ assertion that the first, the second and the sixth affirmative defenses fail to state facts sufficient to constitute a defense or are uncertain is also unpersuasive. Finally, the first and second affirmative defense are not duplicative of the sixth affirmative defense.

As to the 10^th affirmative defenses. It is replete with factual new matter in defense of the claim for breach of contract. Defendants contend they are forced to guess what the facts mean. This is properly addressed in discovery.

A demurrer for uncertainty is strictly construed because ambiguities can be clarified under modern discovery procedures. It is inequitable to require Defendant to allege specific evidentiary facts where discovery has not yet been completed. “A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616.

Finally, the court must disregard errors in pleadings or proceedings, which do not affect the substantial rights of the parties. Cal Code Civil Procedure § 475. The primary function of a pleading is to give the other party notice, “and a defect in a pleading that otherwise properly notifies a party cannot be said to affect substantial rights.” Harris v. City of Santa Monica (2013) 56 Cal.4th 203, 240; Code Civ. Proc., § 475.

Here, Defendants will suffer greater prejudice if the demurrer is sustained since “a party who fails to plead affirmative defenses waives them.” California Academy of Sciences v. County of Fresno (1987) 192 Cal.App.3d 1436, 1442. Moreover, “[d]iscovery necessarily serves the function of ‘testing the pleadings,’ i.e., enabling a party to determine what his opponent's contentions are and what facts he relies upon to support his contentions." Burke v. Superior Court of Sacramento County (1969) 71 Cal.2d 276, 281. Plaintiffs are entitled to serve discovery requiring Defendants to explain the facts asserted.

In view of the foregoing, the affirmative defenses are sufficient as alleged except for the following defenses which do not raise new matter, a cognizable defense, and/or are defective as alleged: The seventh affirmative defense is a prayer for attorney’s fees and costs. The 11^th affirmative defense denies Plaintiffs’ allegations which is not new matter. Defendants generally denied all allegations. Answer ¶ 1. The 12^th affirmative defense is not a defense. It reserves Defendants’ right to assert additional defenses. This right is protected by Civil Procedure section 473, which permits amendment to pleadings.

Based on the foregoing, Plaintiffs’ Demurrer to Defendants’ Answer is sustained in part without leave to amend as to the seventh, 11^th and 12^th affirmative defenses. In all other respects, the demurrer is OVERRULED.

[TENTATIVE] ORDER SUSTAINING DEMURRER TO CROSS-COMPLAINT IN PART AS TO THE FRAUD CLAIM ONLY AND GRANTING THE MOTION TO STRIKE IN PART AS TO PARAGRAPH 18 WITH LEAVE TO AMEND

With the answer to Plaintiffs’ complaint, Defendant, Mohummed S. Islam, filed a cross-complaint on November 17, 2022, against RHDM Oil, Inc., and Mohammed Ehtesham Ansari. Cross-Complainant asserts the parties entered into the same commercial lease agreement on March 27, 2020, which is attached to Plaintiff’s complaint. Cross-Complainant alleges that Cross-Defendants breached the contract by failing to pay for rent and taxes. Cross-Complainant also alleges a claim for fraud in that Cross-Defendants never intended to fulfill their promises to Cross-Complainant as demonstrated by their conduct.

Cross-Defendant Islam argues that the cross-complaint is uncertain because it alleges conduct against both Cross-Defendants without distinguishing Islam’s conduct from those of RHDM, which is a corporation. The claim for breach of contract is not adequately alleged. Cross-Complainant did not attach the contract it to the cross-complaint.

Islam asserts that the fraud claim is not alleged with required specificity. Leave to amend should not be granted. Islam separately moves to strike irrelevant and improper allegations

Cross-Complainant argues that the demurrer to the breach of contract claim is absurd since the contract at issue is attached to Plaintiff’s complaint. It is incorporated by reference. The fraud claim is adequately alleged.

Cross-Defendant argues that Cross-Complainant did not oppose the motion to strike which should be granted. Cross-Defendant reiterates the arguments made in the demurrer.

A demurrer tests the sufficiency of a complaint as a matter of law and raises only questions of law. Schmidt v. Foundation Health (1995) 35 Cal.App.4th 1702, 1706. In testing the sufficiency of the pleading, the court must assume the truth of (1) the properly pleaded factual allegations; (2) facts that can be reasonably inferred from those expressly pleaded; and (3) judicially noticed matters. Blank v. Kirwan (1985) 39 Cal.3d 311, 318.

The court may not consider contentions, deductions, or conclusions of fact or law. Moore v. Conliffe (1994) 7 Cal.4th 634, 638. Because a demurrer tests the legal sufficiency of pleading, the plaintiff must show that the factual allegations are sufficient to establish every element of each cause of action. Rakestraw v. California Physicians Service (2000) 81 Cal.App.4th 39, 43. Sufficient facts are the essential facts of the case stated, "with reasonable precision and with particularity sufficiently specific to acquaint the defendant with the nature, source, and extent of his cause of action.” Gressley v. Williams (1961) 193 Cal.App.2d 636, 643-644. Whether the Plaintiff will be able to prove the pleaded facts is irrelevant. Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 609–610.

A demurrer may also be sustained for uncertainty, which exists where the factual allegations are so confusing, they do not sufficiently apprise the opposing party of the issues it is being asked to meet. Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2; Code Civ. Proc., § 430.10(f).

A pleading is required to assert general allegations of ultimate fact. Evidentiary facts are not required. Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal. 4th 26, 47; Lim v. The.TV Corp. Internat. (2002) 99 Cal. App. 4th 684, 690. However, unlike federal courts, California state courts are not a notice pleading jurisdiction, and notice alone is not a sufficient basis for any pleading. California is a fact pleading jurisdiction. Merely putting an opposing party on notice is not sufficient. Bach v. County of Butte (1983) 147 Cal.App.3d 554, 561; see Diodes, Inc. v. Franzen (1968) 260 Cal.App.2d 244, 250.

The court may, upon motion or at any time in its discretion and upon terms it deems proper: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of the 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). Grounds for the motion to strike are limited to matters that appear on the face of the pleading or on any matter which the court shall or may take judicial notice. Code Civ. Proc., § 437.

The elements of a claim for breach of contract are (1) the existence of a valid and existing contract between the parties, (2) Plaintiff’s performance or excuse for non-performance, (3) Defendant’s breach; and (4) resulting damage. Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.

Cross-Complainant alleges that the breach of contract claim is predicated on the same contract at issue in the Complaint and is attached thereto. Cross-complaint, ¶ 8. The contract is incorporated by reference. Cross-complaint, ¶ 12. Cross-Complainant describes the breach based on Cross-Defendants’ failure to pay contracted-for sums in rent and unpaid taxes. Cross-complaint ¶ 13. Cross-Complainant alleges his performance and resulting damage. Cross-Complainant, ¶¶ 15-16.

Cross-Defendant does not cite any authority that Cross-Complainant must also attach the same contract to the cross-complaint, which would be superfluous given both parties allege that the other breached the same contract.

A claim for fraud requires facts to support the following elements: (1) a misrepresentation, (2) made with knowledge of its falsity, (3) Defendant intended to defraud Plaintiff, i.e., induce Plaintiff’s reliance, (4) Plaintiff justifiably relied on the misrepresentation, (5) causing damage. Nagy v. Nagy (1989) 210 Cal.App.3d 1262, 1268. Fraud claims are subject to strict requirements of particularity in pleading. Id. The particularity requirements necessitate pleading facts showing “how, when, where, to whom, and by what means the representations were tendered." Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73. The requirement “applies not only to the alleged misrepresentation, but also to the elements of causation and damage Moncada v. West Coast Quartz Corp. (2013) 221 Cal.App.4th 768, 776.

Where fraud is alleged against a corporation, the pleading standards are even greater. Plaintiff must allege “the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written." Lazar v. Superior Court (1996) 12 Cal. 4th 631, 645.

Cross-Complainant does not specifically allege the misrepresentations purportedly made, or by whom, and when or by what means. As Cross-Defendant observes, the cross-complaint alleges the claim against both Cross-Defendants without identifying who made the purported misrepresentations individually or on behalf of RHDM. The cross-complaint does not allege how Cross-Complainant’s reliance on un-alleged misrepresentations caused damage. The cross-complaint refers to certain financial statements and a rental application, but it is not clear what promises were made or who made them. Cross-complaint, ¶ 20. Cross-Complainant also refers to stolen identity, however, it is not clear how this alleged fact relates to the fraud claim. Cross-complaint, ¶ 22. As alleged, the fraud claim is fatally uncertain.

Paragraph 18 generally concludes that RHDM and Ansari are “somehow engaged in substantial fraud, perjury, and attempted theft.” Cross-complaint, ¶ 18. As stated in the Court’s analysis with respect to the demurrer to the cross-complaint, the fraud claim is inadequately pleaded, and there are no specific factual allegations to support these conclusions as is required in fraud claims. Therefore, the Court grants the request to strike paragraph 18 with leave to amend.

With respect to the prayer for attorney’s fees, it is not an abuse of discretion to refuse to strike a claim for attorney fees where Cross-Complainant has not had a full opportunity to determine the basis for such fees. Camenisch v. Superior Court (1996) 44 Cal.App.4th 1689, 1699. Yassin v. Solis (2010) 184 Cal.App.4th 524, 533 ["There is no requirement that a party plead that it is seeking attorney fees, and there is no requirement that the ground for a fee award be specified in the pleadings."]. The request to strike Paragraph 3 is denied.

The allegation for “such other and further relief” is not improper. Therefore, the request to strike Paragraph 5 of the prayer is denied.

Based on the foregoing, the Court SUSTAINS demurrer in part as to the second cause of action for fraud only, with leave to amend. The motion to strike Paragraph 18 is GRANTED with leave to amend. The Court denies the request to strike Paragraphs 3 and 5 of the prayer.