Judge: Olivia Rosales, Case: 22NWCV00158, Date: 2022-12-20 Tentative Ruling

Case Number: 22NWCV00158    Hearing Date: December 20, 2022    Dept: SEC

CHO v. SAMUEL

CASE NO.:  22NWCV00158

HEARING: 12/20/22 @ 1:30 PM

JUDGE:  OLIVIA ROSALES

#8

TENTATIVE RULING

I.             Cross-Defendant Cho’s demurrer is OVERRULED as to the 1^st cause of action, and SUSTAINED with 10 days leave to amend as to the 2^nd cause of action.

II.            Cross-Defendant Cho’s motion to strike is MOOT.

Moving Party to give NOTICE.

Cross-Defendant Cho demurs to the 1^st – 2^nd causes of action in the Cross-Complaint on the ground that it fails to state facts sufficient to constitute a cause of action.

The Complaint alleges a single cause of action for Breach of Contract.  Plaintiff Robert Cho alleges that on December 26, 2018, Plaintiff and Defendant Koshy Samuel entered into a promissory note, wherein Plaintiff agreed to advance funds on behalf of Defendant for the purchase of certain shares of stock.  Plaintiff alleges damages in the sum of $137,100.00.

On July 6, 2022, Defendant Samuel filed a Cross-Complaint, asserting causes of action for:

1.    Accounting

2.    Breach of Contract

1^st CAUSE OF ACTION

ACCOUNTING:  The elements are:  1) existence of a relationship requiring accounting, such as fiduciary; and 2) an unliquidated and unascertained balance is owed.  (St. James Church of Christ Holiness v. Superior Court (1955) 135 Cal.App.2d 352, 359; Raymond v. Independent Growers, Inc. (1955) 133 Cal.App.2d 154, 160.)

¶ 12 alleges that Samuel negotiated an equity partnership in PacWest ESCO at 30%, which would vest over a period of four years.  ¶ 17 alleges that Samuel was engaged as a partner in PacWest in 2016.

¶¶ 38-40 allege that Samuel had an agreement to repay Cho $170,000 pursuant to a 3-year repayment plan.  ¶ 41 alleges that the parties agreed the second payment was going to be made in December 2021 and would come from Samuel’s profit sharing.  ¶ 42 alleges that Cho claimed there was no profit. 

The court finds Samuel has alleged a relationship that requires an accounting, and there is an unascertained balance in the profits.  Accordingly, the demurrer is OVERRULED.

2^nd CAUSES OF ACTION

BREACH OF CONTRACT:  The elements for a breach of contract cause of action are: (1) the contract; (2) plaintiff’s performance or excuse for nonperformance; (3) defendant’s breach; and (4) resulting damages.  (Reichert v. General Ins. Co. (1968) 68 Cal.2d 822, 830.)  In alleging a breach of contract cause of action, it is necessary to specify whether the contract is written, oral or implied by conduct.  (CCP § 430.10(g).)  To plead a written contract, a plaintiff must do one of the following: (1) set forth the contract in haec verba; or (2) plead the contract’s legal effect by alleging the substance of its relevant terms.  (4 Witkin, California Procedure 4th Ed., 479-481.)  In order to plead an oral contract, a plaintiff must plead its legal effect, i.e., allege the substance of the contractual terms.  (Id. at 483.)

The court finds the Cross-Complaint fails to sufficiently allege the contract terms. Although ¶¶ 38-40 allege that Samuel had an agreement to repay Cho $170,000 pursuant to a 3-year repayment plan, the Cross-Complaint does not state whether this agreement was written, oral, or implied by conduct.  Further, it is unclear what terms were breached, and what damages Samuel suffered.

Accordingly, the demurrer is SUSTAINED with 10 days leave to amend. 

The accompanying motion to strike attorney’s fees and loss of income is MOOT in light of the court’s grant of leave to amend.