Judge: Ronald F. Frank, Case: 23TRCV03033, Date: 2024-01-09 Tentative Ruling
Case Number: 23TRCV03033 Hearing Date: March 22, 2024 Dept: 8
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HEARING DATE: March 22, 2024¿
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CASE NUMBER: 23TRCV03033
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CASE NAME: Automobile Driving Museum; Historic Automobile
Preservation Entity v. The Zimmerman Trust of 1978, et al.
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MOVING PARTY: (1) Defendants,
Jay Zimmerman and Thomas Zimmerman, as co-trustees of The Zimmerman Trust of
1978
RESPONDING PARTY: (1) Plaintiffs,
Automobile Driving Museum and Historic Automobile Preservation Entity
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TRIAL DATE: Not
Set
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MOTION:¿ (1) Demurrer
Tentative Rulings: (1) Defendants’
Demurrer is SUSTAINED, tentatively without leave to amend. Plaintiff should come to the hearing prepared
to explain what type of further amendment might cure the pleading defect.
I. BACKGROUND¿¿
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A. Factual¿¿
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On September
13, 2023, Plaintiffs, Automobile Driving Museum and Historic Automobile
(“Plaintiffs”) filed a Complaint against Defendants, The Zimmerman Trust of
1978, Myrna Zimmerman, Jay Zimmerman, as co-trustee of the Zimmerman Trust of
1978, Thomas Zimmerman, as co-trustee of The Zimmerman Trust of 1978, and DOES
1 through 10. The Complaint alleged one cause of action for: (1) Breach of
Written Contract.
On January 9,
2024, this Court sustained the demurrer to the original complaint noting it its
tentative ruling that the “upon the earlier” language in the agreement
suggested to the Court that there were two options that may end the Pledge
agreement earlier – one option and another option, and that the first of the
two to present itself earlier, could, on its own, terminate the Pledge
agreement early.
On January
30, 2024, Plaintiffs filed a First Amended Complaint (“FAC”) alleging the an
amended cause of action for Breach of Written Contract. Defendants, Jay and Thomas Zimmerman, as
co-trustees of The Zimmerman Trust of 1978 (“Co-Trustees”) now file a Demurrer
to the FAC.
B. Procedural¿¿
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On February 27, 2024, Defendants,
Jay Zimmerman and Thomas Zimmerman, as Co-Trustees filed a demurrer to the FAC.
On March 8, 2024, Plaintiffs filed an opposition brief. On March 14, 2024, Defendants,
Jay Zimmerman and Thomas Zimmerman, as Co-Trustees filed a reply brief.
II. REQUEST FOR JUDICIAL NOTICE
Co-Trustees requested this
Court take judicial notice of the following documents:
1.
This Court’s Tentative Ruling on Demurrer to Complaint,
a true and correct copy of which is attached hereto as Exhibit 1. Cal. Evid.
Code § 452(c).
The Court GRANTS this request and takes
judicial notice of the above.
III. ANALYSIS
A. Legal Standard
“The primary function of a pleading is to
give the other party notice so that it may prepare its case [citation], 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.) “A¿demurrer¿tests the legal sufficiency of the factual
allegations in a complaint.” (Ivanoff v. Bank of America, N.A.¿(2017)
9 Cal.App.5th 719, 725.) The Court looks to whether “the complaint alleges facts
sufficient to state a cause of action or discloses a complete defense.” (Id.)
The Court does not “read passages from a complaint in isolation; in reviewing a
ruling on a demurrer, we read the complaint ‘as a whole and its parts in
their context.’ [Citation.]” (West v. JPMorgan Chase Bank, N.A. (2013)
214 Cal.App.4th 780, 804.) The Court “assume[s] the truth of the properly
pleaded factual allegations, facts that reasonably can be inferred from
those expressly pleaded and matters of which judicial notice has been
taken.” (Harris, supra, 56 Cal.4th p. 240.) “The court does
not, however, assume the truth of contentions, deductions or conclusions
of law. [Citation.]” (Durell v. Sharp Healthcare (2010) 183
Cal.App.4th 1350, 1358.)
A general demurrer may be brought under Code
of Civil Procedure section 430.10, subdivision (e) if insufficient facts are
stated to support the cause of action asserted or under section 430.10, subdivision
(a), where the court has no jurisdiction of the subject of the cause of action
alleged in the pleading. All other grounds listed in Section 430.10, including
uncertainty under subdivision (f), are special demurrers. Special demurrers are
not allowed in limited jurisdiction courts. (Code Civ. Proc., § 92, subd.
(c).)
Leave to amend must be allowed where there
is a reasonable possibility of successful amendment. (Goodman v. Kennedy
(1976) 18 Cal.3d 335, 348.) The burden is on the complainant to show the
Court that a pleading can be amended successfully. (Id.)
Finally, Code of Civil Procedure section
430.41 requires that “[b]efore filing a demurrer pursuant to this chapter, the
demurring party shall meet and confer in person or by telephone with the party
who filed the pleading that is subject to demurrer for the purpose of
determining whether an agreement can be reached that would resolve the
objections to be raised in the demurrer.” (Code Civ. Proc., § 430.41, subd.
(a).) The parties are to meet and confer at least five days before the date the
responsive pleading is due. (Code Civ. Proc., § 430.41, subd. (a)(2).)
Thereafter, the demurring party shall file and serve a declaration detailing
their meet and confer efforts. (Code Civ. Proc., § 430.41, subd.
(a)(3).)
B.
Discussion
Here,
Defendant Co-Trustees demur to Plaintiffs’ only cause of action in the FAC,
for breach of contract, on the grounds
that they argue it is fails to state facts sufficient to constitute a cause of
action.
Breach of Contract
To state a cause of action for breach of
contract, Plaintiff must be able to establish “(1) the existence of the
contract, (2) plaintiff’s performance or excuse for nonperformance, (3)
defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011)
51 Cal.4th 811, 821.) If a breach of contract claim “is based on alleged breach
of a written contract, the terms must be set out verbatim in the body of the
complaint or a copy of the written agreement must be attached and incorporated
by reference.” (Harris v. Rudin, Richman
& Appel (1999) 74 Cal.App.4th 299, 307.) In some circumstances, a
plaintiff may also “plead the legal effect of the contract rather than its
precise language.” (Construction
Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189,
198-199.)
Previously, this Court stated in its tentative
ruling that the plain language of the Pledge Agreement, even when interpreting
the language of the contract most strongly against Defendants, that the “upon
the earlier” language seems clear and unambiguous as to the meaning of
paragraph 1(a) in the Pledge Agreement. This Court further noted that despite
the term “and” being between paragraphs 1(a)(i) and 1(a)(ii), the Court’s
reading of “upon the earlier” suggests that there were two circumstances the happening
of which would end the Pledge Agreement.
Plaintiffs’ FAC does not address the “upon the
earlier” meaning, but instead, highlights that Stanley, Myrna, and The
Zimmerman Trust of 1978 (Restated) are named as the Donors in the Pledge
Agreement. (FAC, ¶ 5.) Plaintiffs use this fact to address paragraph 1(a)(ii),
the later end of the of the clause at issue, which states: “…written notice
from a Donor terminating the Pledge after the last day of the calendar year in
which the notice is delivered…” Here, the Court appreciates this argument as
the Court discussed in the previous tentative ruling, that paragraph 1(a)(i)
and paragraph 1(a)(ii) -- read in the way Plaintiff implores this Court to do --
would not allow a donor to satisfy the claimed second step because both Stanley
and Myrna would have had to be deceased and would not be able to provide
written notice. Thus, Plaintiff suggests that because The Zimmerman Trust is
also a Donor, The Zimmerman Trust would be able to satisfy the second portion
of paragraph 1(a) and could provide notice after the death of both Myrna and
Stanley.
However, the Court still notes that while its
previous tentative ruling discussed this argument, much of the Court’s January
9, 2024 ruling focused on the “upon the earlier” discussion. The Court
maintains that pursuant to Civil Code section 1654, even when interpreting the
language of the contract most strongly against Defendants, it seems
unreasonable and illogical that the parties would intend to mandate a prefatory
time period – the “earlier” of the two conditions subsequent – while at the
same time requiring (as Plaintiffs maintain) BOTH rather than either of the conditions
to have occurred before the annual pledge obligation could be terminated.
In Plaintiffs’ opposition, they assert that
paragraph 11 of the FAC discusses a mid-2019 meeting with Stanley Zimmerman
pursuant to an agenda of specific items to be discussed, and that the parties
also discussed how to continue to make payments upon the death of individuals
Stanley and Myra, properly reflecting that the Zimmerman Trust was also a
donor. The Court does note that Plaintiffs’ FAC contends that at this meeting, the
parties discussed a $500,000 testamentary final payment upon the death of the
final survivor of Stanley and Myrna, and that negotiations between the parties
were that upon the death of the last donor, the testamentary payment would become
activated and that there are no other preconditions. (FAC, ¶ 11.) Plaintiffs
contend that paragraph 1(b) of the Pledge Agreement accounts for this.
Paragraph 1(b) states: “Testamentary Pledge: Five Hundred Thousand
($500,000) cash within two years of the death of the survivor of Stanley and
Myrna.”
This Court – still – does not interpret these
provisions of the pledge agreement to mean what Plaintiff is interpreting it to
mean. Paragraph 1, section (b) does not, in the Court’s view, have anything to
do with the “upon the earlier” clause in section (a). Instead, paragraph 1
indicates that it is an agreement that the Donors jointly and severally agree
and irrevocably promise to give to HAPE: (a) Annual Pledge; and (b)
Testamentary Pledge. This does not mean that termination of the pledge via
written notice from a donor terminating the pledge after the last date of the
calendar year in which the notice is delivered (Paragraph 1(a)(ii)) invalidates
the Testamentary pledge found in paragraph 1(b). Such a scenario is not being raised by
Plaintiffs in their FAC. Instead, the issue Plaintiffs have raised in their FAC
is a single issue for a breach of contract and seeks to recover damages for the
annual pledges under the terms of the written contract. Because this Court
still finds that the use of the phrase “upon the earlier” presents a clear and
unambiguous meaning of paragraph 1(a) -- which the Court views as meaning the
earlier of the two options laid out in paragraph 1(a)(i) and 1(a)(ii) -- the
Court is tentatively inclined to SUSTAIN demurrer without leave to amend.
However, this Court will allow oral argument on whether Plaintiffs’ allegations
about the oral discussions in paragraph 11 can be substantiated by any written
document, meeting minutes, etc.
IV.
CONCLUSION¿¿
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For the foregoing reasons,
Defendants’ Demurrer to the Complaint is SUSTAINED without leave to amend.
Moving party is to give
notice.