Judge: Stephen P. Pfahler, Case: 21CHCV00423, Date: 2023-05-17 Tentative Ruling

Case Number: 21CHCV00423    Hearing Date: May 17, 2023    Dept: F49

Dept. F-49

Date: 5-17-23

Case #21CHCV00423

Trial Date: Not Set

DEMURRER

MOVING PARTY:                Plaintiff, Win Partners, LLC

RESPONDING PARTY:       Defendants, World Tech Toys, Inc., et al.

RELIEF REQUESTED

Demurrer to the Amended Answer to the Second Amended Complaint

SUMMARY OF ACTION

Plaintiff Win Partners, LLC alleges a January 24 or 25, 2021, oral agreement, whereby defendants World Tech Toys, Inc., World Trading 23, Inc., and/or Kevork Kouyoumjian, agreed to deliver certain personal protective equipment (PPE) described as “medical grade disposable seamless rubber gloves.” Plaintiff alleges payment of five million dollars ($5,000,000), but only received non-medical grade, non-FDA approved, “counterfeit” equipment, which lacks any resale value. 

On June 2, 2021, Plaintiff filed a complaint for Breach of Contract, Unfair Business Practices, Breach of Fiduciary Duties, and Fraud. On February 18, 2022, the court granted Plaintiff’s motion for leave to amend. On February 28, 2022, Plaintiff substituted in Jacques Kouyoumjian for Doe 3. On March 2, 2022, Plaintiff filed a first amended complaint for Breach of Contract, Unfair Business Practices, Breach of Fiduciary Duties, and Fraud.

On August 4, 2022, the court granted Plaintiff leave to file a second amended complaint. On August 5, 2022, Plaintiff filed the second amended complaint for Breach of Contract, Unfair Business Practices, Beach of Fiduciary Duties, and Fraud. On September 7, 2022, World Tech Toys, Inc., et al. answered and filed a cross-complaint against Win Partners, LLC, et al. for Breach of Contract, Fraud/Deceit, Negligent Misrepresentation, and Quantum Meruit.

On January 11, 2023, the court sustained the demurrer of Jacques Kouyoumjian, Azniv Kouyoumjian, and Vicken Kouyoumjian to the second amended complaint. On February 10, 2023, Plaintiff dismissed Jacques Kouyoumjian, Azniv Kouyoumjian, and Vicken Kouyoumjian. On February 22, 2023, the court sustained the demurrer of Win Partners, LLC to the second and third causes of action in the cross-complaint of World Tech Toys, Inc., et al. On March 16, 2023, the court sustained demurrer of Numar Fakir and Hasham Hussain to World Tech Toys, Inc. and World Trading 23, Inc. cross-complaint on the breach of contract and quantum meruit causes of action with leave to amend.

On March 7, 2023, World Tech Toys, Inc., World Trading 23, Inc. and Kevork Kouyoumjian, filed an amended answer to the second amended cross-complaint. On April 3, 2023, World Tech Toys, Inc. and World Trading 23, Inc. filed their first amended cross-complaint Breach of Contract, Fraud/Deceit, Negligent Misrepresentation, and Quantum Meruit.

RULING: Sustained with Leave to Amend as to the Third Affirmative Defense/Overruled as to the Remainder.

The court declines to address any and all of the evidentiary objections to this demurrer. As summarized in the standard below, ANY and ALL such considerations are beyond the scope of the demurrer. The court declines to consider any discussion or argument over “discovery” practices for purposes of the subject demurrer.

Plaintiff submits the demurrer to each and every of the 34 affirmative defenses in the answer on grounds that the answer lacks supporting facts and instead only relies on unsupported conclusions. Defendants World Tech Toys, Inc., World Trading 23, Inc. and Kevork Kouyoumjian, in opposition describe the demurrer as a “waste of time and disingenuous.” Defendants challenge the sufficiency of the arguments, including legal citation addressing allegedly improper defenses. Defendants contend discovery continues, and the demurrer provides “sufficient notice,” within the applicable low pleading standard threshold. Plaintiff in reply reiterates the lack of factual support argument for the 34 affirmative defenses, and contends the answer merely parrots the cross-complaint without distinction. Plaintiff next denies the demurrer being a “waste of time,” contends Defendants are “misleading” the court on the law, and the discovery practices remain “evasive.”

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (Code Civ. Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.) The court “ ‘ “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law . . . .” ’ ” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.) In applying these standards, the court liberally construes the complaint to determine whether a cause of action has been stated.  (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726, 733.)

“A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616; Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139 [“[U]nder our liberal pleading rules, where the complaint contains substantive factual allegations sufficiently apprising defendant of the issues it is being asked to meet, a demurrer for uncertainty should be overruled or plaintiff given leave to amend.]

An “answer to a complaint must include ‘[a] statement of any new matter constituting a defense.’ The phrase ‘new matter’ refers to something relied on by a defendant which is not put in issue by the plaintiff. [Citation.] Thus, where matters are not responsive to essential allegations of the complaint, they must be raised in the answer as ‘new matter.’ [Citation.] Where, however, the answer sets forth facts showing some essential allegation of the complaint is not true, such facts are not ‘new matter,’ but only a traverse.” (Walsh v. West Valley Mission Community College District (1998) 66 Cal.App.4th 1532, 1546 (italics original).)

“Generally, a party must raise an issue as an affirmative defense where the matter is not responsive to essential allegations of the complaint. [Citations omitted.] Thus, where a defendant relies on facts not put in issue by the plaintiff, the defendant must plead such facts as an affirmative defense.” (Bevill v. Zoura (1994) 27 Cal.App.4th 694, 698; South Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 733–734 [In considering a demurrer to the answer, the defect in question need not appear on the face of the answer: “the determination of the sufficiency of the answer requires an examination the answer” in context of the operative complaint purportedly being answered].)

A party must allege any and all affirmative defenses or risk waiver. (Cal. Code Civ. Proc., § 430.80(a); See Roy v. Superior Court of County of San Bernardino (2005) 127 Cal.App.4th 337, 345.) An answering party must aver ultimate facts, rather than conclusions. (FPI Development, Inc. v. Nakashimi (1991) 231 Cal.App.3d 367, 384.) The “onus of proof” on any “new matter” alleged in the answer is the burden of the pleading defendant. (Harris v. City of Santa Monica (2013) 56 Cal.4th 203, 239.)

The demurrer offers a perfunctory address of each and every affirmative defense consisting of: identification of the defense, followed by a statement of insufficient facts based upon characterization of the affirmative defense as an insufficiently pled “negation of an element of Plaintiff’s cause of action,” with reliance on citation to a single case in support of the “negation” argument, and statutory authority regarding the right to submit a demurrer to an answer in the summary. While the statutory authority is referred to by incorporation of “See id.” (sic), Plaintiff only cites to the 1967 case in the first, fifteenth, sixteenth, seventeenth, eighteenth, twenty first, twenty second, twenty fifth, twenty eighth, and thirty third affirmative defenses. (See Erler v. Five Points Motors (1967) 249 Cal.App.2d 560, 565.) As to the twenty sixth affirmative defense, Plaintiff offers a challenge to the basis of consideration argument with a factual challenge. It’s not until the reply that Plaintiff offers more specific argument regarding the propriety of the pled statutes of limitations defenses to the third affirmative, but again this only one portion of the demurrer without specific identification and address of the remaining 33 identified defenses. The remainder of the reply emphasizes evidentiary objections and discovery practices. Both items fall beyond the scope of the demurrer, which only considers the sufficiency of the pleading.

Given the actual supported argument on the third affirmative defense, the court considers the merits. Defendants assert that Plaintiff’s claims are barred by “California Code of Civil Procedure Sections 335.1, 337, 338, 339, 340 and 343, and any other law.” (Amended Answer, 5:15-17.) Plaintiff correctly points out that all but one of the specific statutes identified in Defendants’ third defense can be invoked. Code of Civil Procedure section 335.1 addresses the two-year limitations period for assault, battery and wrongful death claims. Code of Civil Procedure section 337 concerns the four-year limitations period for breach of written contracts. Code of Civil Procedure section 338 applies the three-year limitations period for certain injuries to real and personal property. Code of Civil Procedure section pertains to the one-year limitations period for eminent domain, libel, and other tort claims that are not at issue in this suit. Code of Civil Procedure section relates to the four-year limitations period for other types of claims for which there is no other clear statute of limitations.

This leaves Code of Civil Procedure section 339, which directly tackles the two-year limitations period for breach of oral contracts. Although Code of Civil Procedure section, concerning the two-year limitations period for oral contracts, could be invoked in this case, the second amended complaint clearly alleges that the agreement at issue was made in January of 2021, and the instant suit was commenced in June of 2021, well within the two-year limitation. The court therefore finds the affirmative defense lacking in facial applicability. While the court appreciates the preservation of statute of limitations defenses, the court finds the lack of factual support supports the demurrer to the third affirmative defense ONLY.

The court otherwise finds no introduction of improper new matter, and concludes the answer consists of a series of well stated, factually articulated affirmative defenses. The court declines to make the factual arguments for Plaintiff regarding any deficiencies. The argument on the twenty sixth affirmative defense relies on conclusions outside the scope of the pleading. With the exception of the third affirmative defense in the reply, summary recitation and repeated conclusive arguments insufficiently addresses the actual factually pled claims, and apparently demonstrates a pro forma submission following the previously rendered moot demurrer in the effort to continue increasing costs for the opposing parties. The demurrer is therefore sustained with leave to amend as to the third affirmative defense ONLY, and overruled as to the remainder.

Defendants are granted 20-days leave to amend. If Defendants elect to forego a second amended answer, the first amended answer will become the operative answer. Defendants are NOT granted leave to add any new affirmative defenses or facts. If, and only if, Defendants add new material, Plaintiff may bring a FACTUALLY SPECIFIC motion to strike said additional material. If Defendants chose to file a second amended answer with the revised statute of limitations affirmative defenses, Plaintiff may ONLY address said affirmative defense in any subsequent demurrer. The court will categorically deny any efforts at a successive demurrer.

Demurrers, with one motion to strike, by different parties as to the same first amended cross-complaint, set for June 8, 2023, and August 7, 2023, respectively.

Plaintiff to give notice.