Judge: Nick A. Dourbetas, Case: 2022-01251982, Date: 2023-07-21 Tentative Ruling

Demurrer to Amended Complaint

Defendant Dorothy Miller-Sublett’s (Miller-Sublett) demurrer to second amended complaint is OVERRULED in its entirety.

Miller-Sublett shall answer the second amended complaint (SAC) within 10 days of the date of this hearing.

The SAC properly states the first cause of action for breach of contract against Miller-Sublett in her individual capacity doing business as/under the fictitious business name of “Los Robles Mobile Home Estates.” (See SAC ¶¶ 7-8, 10, 12, 20, Ex. A; see also New Livable California v. Association of Bay Area Governments (2020) 59 Cal.App.5th 709, 714 (New Livable California) [on demurrer, the court accepts as true all facts properly pleaded, as well as those which reasonably arise by implication].) There is no legal distinction between an individual and the fictitious business name under which she does business. (See Pinkerton’s, Inc. v. Superior Court (1996) 49 Cal.App.4th 1342, 1348-1349.)

The SAC also properly asserts all other causes of action against Miller-Sublett in her capacity as “the owner of the Subject Property and ... Plaintiff’s landlord.” (SAC ¶ 10.)

Moreover, although the foregoing alone defeats Miller-Sublett’s demurrer in its entirety, the SAC also states sufficient facts in support of alter ego liability. (See Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538-539 [elements]; Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 235-236 [a plaintiff need only allege ultimate facts to support an alter ego theory; specific pleading is not required]; see also SAC ¶¶ 7-9, 11-19.)

The SAC alleges facts showing, inter alia, that Miller-Sublett disregarded corporate/limited liability company (LLC) formalities/commingled assets and treated the entity defendant’s assets as her own, such that the individuality or separateness of Miller-Sublett and the entity defendant ceased to exist. (See SAC ¶¶ 7-9, 11-19.) Taking these allegations as true as the court must on demurrer (New Livable California, supra, 59 Cal.App.5th at p. 714), this is sufficient to show that an inequitable result would follow if the acts were to be treated as those of the entity alone and Miller-Sublett was allowed to hide behind its legal form. Under these circumstances, refusing to recognize the entity as an alter ego of Miller-Sublett would be inequitable, as it would allow her to reap the benefits of her status as a landlord (treating the entity’s assets as her own) while escaping liability for her alleged failure to abide by the duties/warranties imposed on landlords under the law (e.g., implied warranty of habitability, implied covenant of quiet enjoyment). (See Misik v. D’Arco (2011) 197 Cal.App.4th 1065, 1074 [when the failure to recognize the unity of a corporation and an individual defendant would produce inequitable results, this is sufficient to apply the alter ego doctrine]; see also JPV I L.P. v. Koetting (2023) 88 Cal.App.5th 172, 195-197 [alter ego inquiry focuses on whether the corporate form was inequitably used under the particular circumstances of a given case; because it is founded on equitable principles, application of the alter ego is not made to depend upon prior decisions involving factual situations which appear to be similar, rather it is the general rule that the conditions under which a corporate entity may be disregarded vary according to the circumstances of each case].)

Moving party shall give notice.