Judge: Robert S. Draper, Case: 21STCV13326, Date: 2022-09-01 Tentative Ruling

Case Number: 21STCV13326    Hearing Date: September 1, 2022    Dept: 78

Superior Court of California 

County of Los Angeles 

Department 78 

Cross-Defendants Beverly OB & GYN’s Medical Center, Inc. and Dr. Edward Ahn’s Demurrer to the First Amended Cross-Complaint is SUSTAINED. Cross-Complainant is granted twenty days leave to amend.

FACTUAL BACKGROUND 

This is an action for a landlord/tenant disagreement. Plaintiffs Beverly OB & GYN Medical Center, Inc.(“Beverly”) and Dr. Edward Ahn (“Dr. Ahn”) (“Plaintiffs”) allege the following in the operative First Amended Complaint.

Beverly, owned by Dr. Ahn, is a tenant on the first floor of the property located at 4620 Beverly Boulevard, Los Angeles (the “Premises”). (FAC ¶¶ 9-10.) Defendant Gyoung Jae Park (“Park”) was the owner of the Premises from approximately 2013 to 2020 and operates a medical facility on the second floor. (Id., ¶ 11.) Currently, Plaintiffs believe Defendant Gyoung Jae Park and Yoon Hee Choe Life Estate trust (the “Trust”) to be the owner of the Premises. (Id., ¶ 12.) The Trustees of the Trust are believed to be Defendants Hannah Park and David Park, the children of Defendant Park. (Id., ¶ 13.) Defendant Felipa R. Richland, acting through her law firm, defendant Richland & Associates, is the property manager for the Premises. (Id., ¶ 14.)

Plaintiffs allege that Park wants to expel Dr. Ahn from the Premises so that Park can take over Dr. Ahn’s offices. (Id., ¶ 2.) To force Plaintiffs to vacate the Premises, Plaintiffs allege that Defendants have taken various actions in violation of the Lease and zone variances. (Id., ¶ 3.)

The First Amended Cross-Complaint (“FAXC”), filed by Defendants / Cross-Complainants Gyoung Jae Park and Yoon Hee Choe Life Estate Trust alleges as follows.

In early 2020, Cross-Claimant informed Cross-Defendants Beverly and Dr. Ahn that Cross-Defendants last day of tenancy was approaching. (FAXC ¶ 8.) Cross-Defendants responded that they had an additional five-year option under the Second Amendment to the Master Lease. (Ibid.) A lawsuit ensued (the “Underlying Action”) in which Cross-Claimant sought declaratory relief as to the rights and obligations of the parties under the Second Amendment to the Master Lease. (FAXC ¶ 9.) In the underlying action, Cross-Defendants presented an invented document (“Forged Second Amendment”) that was never part of the executed agreements between any of the parties. (FAXC ¶ 10.) The Court in the underlying action determined that the Second Amendment was operative, and that the Forged Second Amendment was not valid. (FAXC ¶ 12.)

PROCEDURAL HISTORY

On April 7, 2021, Plaintiffs filed the Complaint asserting eight causes of action against Defendants.

On July 20, 2021, the Court considered the Demurrer and Motion to Strike filed by Defendants. The Court sustained the Demurrer to the first through third and seventh causes of action as to Felipa Richland (both individually and doing business through her law firm Richland & Associates). The Court sustained the Demurrer to the Eighth Cause of Action for Fraud with leave to amend. The Court overruled the Demurrer for all remaining causes of action as to Park, Hannah Park, David Park, and the Trust.

On August 13, 2021, Plaintiffs filed their First Amended Complaint against Defendants Gyoung Jae Park, Gyoung Jae Park and Yoon Hee Choe Life Estate Trust, Hannah Park, David Park, Felipa Richland, and Richland & Associates.

Plaintiffs’ First Amended Complaint asserts the following eight causes of action:

1.    Breach of Lease Agreement;

2.    Breach of Implied Covenant of Good Faith and Fair Dealing:

3.    Breach of Covenant of Quiet Enjoyment;

4.    Violation of Americans with Disabilities Act and Unruh Civil Rights Act;

5.    Intentional Infliction of Emotional Distress;

6.    Intentional Interference with Prospective Economic Advantage;

7.    Negligence; and

8.    Fraud.

On February 17, 2022, Gyoung Jae Park and Yoon Hee Choe Life Estate Trust filed the Cross-Complaint against Cross-Defendants Beverly and Dr. Ahn asserting three causes of action:

1.    Breach of Contract;

2.    Breach of the Covenant of Good Faith and Fair Dealing; and

3.    Ejectment.

On April 6, 2022, Cross-Defendants filed a Demurrer to the Cross-Complaint.

On June 6, 2022, the Court sustained the Demurrer as to the First Cause of Action and overruled the Demurrer as the Second and Third Causes of Action. Cross-Complainant was granted thirty days leave to amend.

On July 6, 2022, Cross-Complainant filed the First Amended Cross-Complaint asserting one cause of action for Breach of the Implied Covenant of Good Faith and Fair Dealing against Cross-Defendants Beverly and Dr. Ahn.

On July 26, 2022, Cross-Defendants Beverly and Dr. Ahn filed a Demurrer to the First-Amended Cross-Complaint.

No Opposition has been filed.

DISCUSSION

I.               DEMURRER

Defendants Demur to the sole Cause of Action for Breach of the Implied Covenant of Good Faith and Fair Dealing.

A demurrer should be sustained only where the defects appear on the face of the pleading or are judicially noticed. (Code Civ. Pro., §§ 430.30, et seq.) As is relevant here, a court should sustain a demurrer if a complaint does not allege facts that are legally sufficient to constitute a cause of action. (See id. § 430.10, subd. (e).) As the Supreme Court held in Blank v. Kirwan (1985) Cal.3d 311: “We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. . . . Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.” (Id. at p. 318; see also Hahn. v. Mirda (2007) 147 Cal.App.4th 740, 747 [“A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. [Citation.]”)

“In determining whether the complaint is sufficient as against the demurrer … 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.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 639.)

A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment. (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p. 1081.) The demurrer also may be sustained without leave to amend where the nature of the defects and previous unsuccessful attempts to plead render it probable plaintiff cannot state a cause of action. (Krawitz v. Rusch (1989) 209 Cal.App.3d 957, 967.

Here, Cross-Complainant demurs to the Second Cause of Action for Breach of the Implied Covenant of Good Faith and Fair Dealing.

A.  Second Cause of Action – Breach of the Implied Covenant of Good Faith and Fair Dealing

Beverly argues that the First Amended Cross-Complaint fails to allege facts sufficient to state a claim for Breach of the Implied Covenant of Good Faith and Fair Dealing.

The elements for breach of the implied covenant of good faith and fair dealing are: (1) existence of a contract between plaintiff and defendant; (2) plaintiff performed his contractual obligations or was excused from performing them; (3) the conditions requiring defendant’s performance had occurred; (4) the defendant unfairly interfered with the plaintiff’s right to receive the benefits of the contract; and (5) the plaintiff was harmed by the defendant’s conduct. (Merced Irr. Dist. V. County of Mariposa (E.D. Cal. 2013) 941 F.Supp.2d 1237, 1280 (discussing California law).)

Allegations must demonstrate defendant’s conduct or failure or refusal to discharge contractual responsibilities was a conscious and deliberate act, not an honest mistake, bad judgment or negligence. (Id.) “‘[T]he implied covenant of good faith and fair dealing is limited to assuring compliance with the express terms of the contract and cannot be extended to create obligations not contemplated by the contract.’” (Ragland v. U.S. Bank Nat. Assn. (2012) 209 Cal.App.4th 182, 206 (quoting Pasadena Live v. City of Pasadena (2004) 114 Cal.App.4th 1089, 1094).) 

Here, Cross-Defendants argue that the First Amended Cross-Complaint states no facts demonstrating that Dr. Ahn’s alleged creation of the Forged Second Amendment, the act upon which the claim is brought, interfered with Cross-Complainant’s ability to receive the benefits of the lease. Cross-Defendants note that the parties have been operating exclusively under the Second Amendment, not the Forged Second Amendment, and therefore Cross-Complainants have received all the benefits they envisioned when entering into the Second Amendment. Cross-Defendants contend that the purported forgery caused no harm to Cross-Complainants, and therefore Cross-Complainants’ claim is defective. 

Cross-Defendants’ argument is well-taken. Upon review of the First Amended Cross-Complaint, there are ample allegations regarding the creation of the Forged Second Amendment, which, as the Court noted in its previous ruling on Demurrer, may constitute a Breach of the Implied Covenant of Good Faith and Fair Dealing. However, the only damages alleged in the First Amended Cross-Complaint are:

Cross-Defendants obtained the benefit of Cross-Claimant’s belief that a Second Amendment was valid and ongoing, while Cross-Defendants were aware that they maintained a Forged Second Amendment which they could use to avoid certain obligations of the Second Amendment. Cross-Defendants’ conduct also created a failure of consideration, as Cross-Claimant’s [sic] were unable [to know] Cross-Defendants had no intention of abiding by the terms of the Second Amendment. (FAXC ¶ 17.)

Cross-Claimant’s [sic] were harmed by Cross-Defendants’ conduct, which was a substantial factor in the harm and damages Cross-Claimant has incurred, in an amount to be proven at trial, but not less than $25,000.00. (FAXC ¶ 23.)

As to paragraph 17, though Cross-Claimant is correct that Dr. Ahn’s creation of the Forged Second Amendment could evince his intent to defraud Cross-Complainant, there is no allegation that this fraud was perpetrated. It is not enough to say that Cross-Defendants entered into the lease in bad faith; Cross-Complainant must show that the bad faith caused Cross-Complainant to suffer harm.

As to paragraph 23, the allegations are conclusory and provide no facts demonstrating what harm Cross-Complainant actually incurred as a result of the Forged Second Amendment.

Cross-Complainant fails to rebut these arguments with an Opposition.

Accordingly, Cross-Defendants’ Demurrer to the First Amended Cross-Complaint is SUSTAINED. However, as the First Amended Cross-Complaint does contain allegations regarding behavior that could constitute a Breach of the Implied Covenant of Good Faith and Fair Dealing, Cross-Complainant is granted twenty days leave to amend.

DATED: September 1, 2022                _____________________

Hon. Robert S. Draper 

Judge of the Superior Court