Judge: Salvatore Sirna, Case: 24PSCV03023, Date: 2025-03-26 Tentative Ruling

Case Number: 24PSCV03023    Hearing Date: March 26, 2025    Dept: G

Defendants KBS Holdco, LLC, Outdoor Associates, LLC, and Flair Olney EM Investments, LLC’s Demurrer to Complaint

Respondent: No opposition as of 03/19/2025

TENTATIVE RULING

Defendants KBS Holdco, LLC, Outdoor Associates, LLC, and Flair Olney EM Investments, LLC’s Demurrer to Complaint is DEEMED MOOT.

BACKGROUND

This is an action for declaratory relief. On September 11, 2024, plaintiff Riddle Legacy, LLC (Plaintiff) filed a complaint against defendants KBS Holdco, LLC dba Regency Outdoor Advertising (Regency), Outdoor Associates LLC (Outdoor Associates), Flair Olney EM Investments LLC (Flair Olney), and Does 1 to 20 for declaratory relief. Plaintiff alleges the following.

Plaintiff, Regency, and the City of El Monte (the City) were parties to two billboard lease agreements concerning Plaintiff’s two properties (the Freeway Sign Sites) in El Monte, California. In 2018, Regency stopped paying rent and overstayed beyond the expiration of the leases. In anticipation of removing Regency’s signs, Plaintiff and the City negotiated agreements (Development Agreements) for two new digital LED signs on these parcels with another operator, Outdoor Associates. Outdoor Associates formed Flair Olney for this project.

Plaintiff and the City brought two unlawful detainer actions against Regency. On the eve of trial, Regency stipulated to possession in Plaintiff’s favor. At the same time, Flair Olney failed to replace the existing billboards with digital billboards, resulting in hundreds of thousands of dollars in lost rent revenue.

In 2024, Regency acquired ownership of Outdoor Associates and Flair Olney, assuming Flair Olney’s interest in the Freeway Sign Sites and Development Agreements in circumvention of express anti-assignment provision. On July 9, 2024, Plaintiff notified Flair Olney that Development Agreements were terminated for delay, failure to perform, and unauthorized assignment/fraudulent proxy. On August 16, 2024, Regency responded, disputing that Flair Olney had materially breached the Development Agreements.

On March 4, 2025, defendants Regency, Outdoor Associates, and Flair Olney (collectively, Defendants) filed the present demurrer. On January 14, 2025, Defendants’ counsel participated in a meet and confer conference with Plaintiffs’ counsel but were unable to reach a resolution. (Steinbach Decl., ¶ 2.)

On March 14, 2025, Plaintiff filed its First Amended Complaint (FAC) against Defendants and Does 1 to 20 for (1) declaratory relief, (2) breach of contract, (3) breach of implied covenant of good faith and fair dealing, (4) fraudulent misrepresentation/inducement, (5) rescission of contract, (6) tortious interference with contract, (7) civil conspiracy, (8) unjust enrichment, and (9) accounting.

A hearing on the present demurrer is set for March 26, 2025, along with a case management conference.

ANALYSIS

Defendants demur to Plaintiff’s entire complaint. For the following reasons, the court¿overrules Defendants' demurrer to the complaint.

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.)

“All papers opposing a motion so noticed shall be filed with the court and a copy served on each party at least nine court days, and all reply papers at least five court days before the hearing.” (Civ. Code, § 1005, subd. (b).)

Discussion

Defendants argue Plaintiff’s cause of action for declaratory relief fails to plead sufficient facts to state a claim, because the claim relates to past wrongs, Plaintiff has other potential forms of relief available, the claim is premised on fraud allegations that are not adequately pled, and Regency and Outdoor Associates are not parties to the contract at issue. The court does not reach these issues as the demurrer is moot.

“A party may amend its pleading once without leave of the court at any time before the answer, demurrer, or motion to strike is filed, or after a demurrer or motion to strike is filed but before the demurrer or motion to strike is heard if the amended pleading is filed and served no later than the date for filing an opposition to the demurrer or motion to strike.” (Code Civ. Proc., § 472, subd. (a).) When plaintiff files an amended complaint after a demurrer is filed, but before it is decided, the demurrer must be overruled as moot. (JKC3H8 v. Colton, (2013) 221 Cal.App.4th 468, 477.)

As set forth above, on March 14, 2025, Plaintiff filed the operative FAC, ten (10) calendar days after Defendants filed their demurrer. The court finds that Plaintiff timely filed the FAC.   Accordingly, Defendants’ demurrer to the initial complaint is DEEMED MOOT.

CONCLUSION

Based on the foregoing, Defendants’ demurrer to the complaint is DEEMED MOOT.