Judge Salvatore Sirna, Case Number: 23PSCV00504, Date: 2023-08-16 Tentative Ruling

Judge: Salvatore Sirna, Case: 23PSCV00504, Date: 2023-08-16 Tentative Ruling

The Court may change tentative rulings at any time. Therefore, counsel are advised to check this website periodically to determine whether any changes or updates have been made to the tentative ruling. Counsel may submit on a tentative ruling by calling the clerk in Department G at (909) 802-1104 prior to 8:30 a.m. the morning of the hearing.

Case Number: 23PSCV00504 Hearing Date: October 4, 2023 Dept: G

Defendants Ronald A. Gershman, Catherine J. Gershman, and Gershman Properties LLC’s Demurrer to First Amended Complaint by Plaintiff and Request for Monetary Sanctions

Respondent: NO OPPOSITION

TENTATIVE RULING

Defendants Ronald A. Gershman, Catherine J. Gershman, and Gershman Properties LLC’s Demurrer to First Amended Complaint by Plaintiff is SUSTAINED with ten (10) days leave to amend to the first, second, third, fifth, and sixth causes of action and without leave to amend as to the fourth cause of action.

Furthermore, Defendants Ronald A. Gershman, Catherine J. Gershman, and Gershman Properties LLC’s Request for Sanctions is DENIED without prejudice for failure to comply with Code of Civil Procedure section 128.5, subdivision (f)(1)(A).

BACKGROUND

This is a breach of lease agreement action. From February 2012 to January 2016, Ruthas Gin International Corp. (Ruthas Gin) leased a Baldwin Park property from Gershman Properties LLC (Gershman Properties) for the purposes of operating a hair salon. In January 2016, Plaintiff Yanqiu Zhang took ownership of the hair salon from Ruthas Gin and assumed Ruthas Gin’s lease with Gershman Properties. From 2019 to 2021, Zhang alleges Gershman Properties began increasing Zhang’s pro rata share of common area maintenance costs and failed to explain the increases. Zhang also alleges Gershman Properties refused to repair the Baldwin Park property’s HVAC system when it broke down during the summer of 2021.

On February 21, 2023, Zhang filed a complaint against Gershman Properties, Ronald A. Gershman, and Catherine J. Gershman (collectively, the Gershman Defendants) as well as Does 1-50, alleging the following causes of action: (1) breach of written lease agreement, (2) breach of written lease agreement for failure of consideration and failure to perform, (3) injunctive relief, (4) breach of fiduciary duty, (5) breach of implied covenant of good faith and fair dealing, and (6) intentional infliction of emotional distress (IIED). On June 21, the court sustained the Gershman Defendants’ demurrer to Zhang’s Complaint with leave to amend.

On June 26, 2023, Zhang filed a First Amended Complaint (FAC) alleging the same causes of action against the same defendants.

On July 20, 2023, the Gershman Defendants filed the present demurrer. On August 16, the court continued a hearing on the demurrer so parties could further meet and confer. On September 12 and September 13, the Gershman Defendants’ counsel telephonically met and conferred with Zhang’s counsel. (Weinberg Suppl. Decl., ¶ 4-5.)

A hearing on the present demurrer is set for October 4, 2023, along with a case management conference.

ANALYSIS

The Gershman Defendants demur to Zhang’s entire FAC. For the following reasons, the court SUSTAINS the demurrer in its entirety.

Legal Standard

A party may demur to a complaint on the grounds that it “does not state facts sufficient to constitute a cause of action.” (Code Civ. Proc., § 430.10, subd. (e).) A demurrer tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747 (Hahn).) When considering demurrers, courts accept all well pleaded facts as true. (Fox v. JAMDAT Mobile, Inc. (2010) 185 Cal.App.4th 1068, 1078.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “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.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) “The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.” (Hahn, supra, at p. 747.)

Breach of Contract Claims (First, Second, Third, and Fifth Causes of Action)

The Gershman Defendants argue Zhang’s first and second causes of action for breach of contract, third cause of action for injunctive relief, and fifth cause of action for breach of implied covenant of good faith and fair dealing fail to plead sufficient facts to state a claim and are uncertain. The court agrees.

Legal Standard

To state a cause of action for breach of contract, a 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.)

Discussion

In this case, the Gershman Defendants argue Zhang fails to allege the existence of a specific contract between the parties. Zhang alleges the parties “entered a valid, binding, and enforceable written Lease Agreement.” (FAC, ¶ 62.) Zhang also alleges “[t]he written Lease Agreement, and the subsequent First Amended Lease Agreement and related documents are in effect.” (FAC, ¶ 63.) But Zhang still fails to provide a copy of the actual lease agreement that Zhang assumed.

This failure is particularly fatal to Zhang’s cause of action which is based in part on the Gershman Defendants’ alleged repair or maintenance obligations. (FAC, ¶ 31, 39, 48.) And while Zhang provides copies of the assignment agreement and two lease amendments, they do not include any provisions covering maintenance or repair obligations.

Next, it appears Zhang does not have standing to bring this action. According to the lease amendments provided by Zhang, the lease agreement at issue was between Gershman Properties and KC International Inc. (KC International) following Zhang’s assignment of the lease to KC International on April 25, 2017. (FAC, Ex. 2, 3.) Accordingly, it appears Zhang was not a party to the lease agreement. While Zhang did sign a “guaranty of lease” in support of the 2017 least amendment, that is insufficient to convey standing. (See Stevenson v. Oceanic Bank (1990) 223 Cal.App.3d 306, 315 [holding where plaintiff was not personally party to loan agreement, “[P]laintiff's personal claim of a breach of contract by [Defendant] must be based on the guaranty agreement, not the loan agreement”].)

Last, of all the Gershman Defendants in this action, only Gershman Properties appears to be a party to the lease agreement. While Zhang appears to suggest Gershman Properties is the other Gershman Defendants’ alter ego, Zhang fails to adequately allege such as set out in Turman v. Superior Court of Orange County (2017) 17 Cal.App.5th 969, 980-981.

Accordingly, the Gershman Defendants’ demurrer to Zhang’s first and second cause of action is SUSTAINED with leave to amend. Because Zhang’s third cause of action for injunctive relief and fifth cause of action for breach of the implied covenant of good faith and fair dealing are based on the same breach of contract claims, the Gershman Defendants’ demurrer to these causes of action is also SUSTAINED.

Breach of Fiduciary Duty (Fourth Cause of Action)

The Gershman Defendants contend Zhang’s fourth cause of action for breach of fiduciary duty fails to plead sufficient facts to state a claim and is uncertain. The court agrees.

In previously sustaining the Gershman Defendants’ demurrer to Zhang’s Complaint, the court noted a landlord-tenant relationship is insufficient to impose fiduciary duties. (6/21/23 Ruling, p. 3, citing Frances T. v. Village Green Owners Assn. (1986) 42 Cal.3d 490, 513; Girard v. Delta Towers Joint Venture (1993) 20 Cal.App.4th 1741, 1749.) Nonetheless, Zhang’s FAC repeats the same allegations and still fails to allege the existence of another fiduciary relationship outside of the contractual landlord-tenant relationship. Because Zhang does not even attempt to allege the existence of any other type of relationship that could qualify as a fiduciary relationship, the court treats this as an admission that none exists and finds further amendment to be futile. (See Shaw v. Los Angeles Unified School District (Sept. 19, 2023, B315814) __ Cal.App.5th __ [2023 WL 6118536, *6] [“Typically, the failure to amend a complaint constitutes an admission that the plaintiffs have stated the case as strongly as they could have, and no additional facts could be alleged to cure the defect.”].)

Accordingly, the Gershman Defendants’ demurrer to Zhang’s fourth cause of action is SUSTAINED without leave to amend.

IIED (Sixth Cause of Action)

The Gershman Defendants maintain Zhang’s sixth cause of action for IIED fails to plead sufficient facts to state a claim and is uncertain. Because Zhang’s IIED claim is based on allegations surrounding how the Gershman Defendants carried out or failed to carry out their obligations pursuant to the alleged lease agreements, Zhang’s failure to adequately allege those contractual claims also dooms Zhang’s IIED claim.

Accordingly, the Gershman Defendants’ demurrer to Zhang’s sixth cause of action is SUSTAINED with leave to amend.

Request for Sanctions

The Gershman Defendants request $3,785 in sanctions pursuant to Code of Civil Procedure section 128.5. Because this request for sanctions must be made in a separately noticed motion pursuant to Code of Civil Procedure section 128.5, subdivision (f)(1)(A), the Gershman Defendants’ request is DENIED without prejudice.

CONCLUSION

Based on the foregoing, the Gershman Defendants’ demurrer to Zhang’s FAC is SUSTAINED in its entirety with ten (10) days leave to amend to the first, second, third, fifth, and sixth causes of action and without leave to amend as to the fourth cause of action.

Furthermore, the Gershman Defendants’ request for sanctions is DENIED without prejudice for failure to comply with Code of Civil Procedure section 128.5, subdivision (f)(1)(A).