Judge: Teresa A. Beaudet, Case: 21STCV47598, Date: 2023-08-22 Tentative Ruling

Case Number: 21STCV47598    Hearing Date: February 5, 2024    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

            Plaintiff Tine Nilsen (“Nilsen”) filed this action on December 30, 2021 against Defendants Joao Henriques (“Henriques”) and Anika Patel (“Patel”).

Nilsen filed the operative First Amended Complaint (“FAC”) on January 7, 2022. The FAC alleges one cause of action for breach of lease.

In the FAC, Nilsen alleges on or about November 17, 2018, she entered into a written lease agreement with Henriques and Patel for the property located at 2634 Barry Avenue, Los Angeles, CA 90064-2812. (FAC, ¶ 6.) Nilsen alleges that “[t]he lease term commenced on December 5, 2018 continuing until December 4, 2019 with Tenant agreeing to pay $8,750.00 month to month.” (FAC, ¶ 6.) “Pursuant to an Addendum signed and dated on November 27, 2019, the Lease term was extended through June 4, 2020, with Tenant agreeing to pay $9,100.00 per month starting December 1, 2019.” (FAC, ¶ 7.) Nilsen alleges that “[p]aragraph 3 of the Lease requires Tenant to pay rent to Landlord for the term of the Agreement and month to month, thereafter.” (FAC, ¶ 8.) Nilsen alleges that “Defendants failed to pay rent for the period of May 1, 2020 through March 31, 2021.” (FAC, ¶ 13.)

            On September 1, 2023, Henriques and Patel (jointly, “Cross-Complainants”) filed a Cross-Complaint against Nilsen. The Cross-Complaint alleges causes of action for (1) fraud and (2) “restitution of the security deposit and bad faith.”

            Nilsen now demurs to both causes of action of the Cross-Complaint. Nilsen also moves to strike portions of the Cross-Complaint. Cross-Complainants oppose both.  

Demurrer

A.    Legal Standard

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. ((Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” ((C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. ((Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.) A demurrer “does not admit contentions, deductions or conclusions of fact or law.” ((Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)

B.     Allegations of the Cross-Complaint  

In the Cross-Complaint, Cross-Complainants allege that they were residential tenants of the real property located at 2634 Barry Avenue, Los Angeles CA 90064 (the “Premises”) under a written lease with Nilsen. (Cross-Compl., ¶ 1.) Cross-Complainants allege that “[a]s part of the lease, Cross-complainants paid a $17,500 security deposit, for which Cross-defendant was required to account within 21 days of Cross-complainants vacating the premises…” (Cross-Compl., ¶ 3.)

Cross-Complainants allege that “[t]oward the end of their tenancy, Cross-complainants were approached by a film production company to use the premises for a film shoot, paying $15,000, and requiring that Cross-complainants leave the premises during that time to enable the production to complete.” (Cross-Compl., ¶ 4.) Cross-Complainants allege that “Cross-defendant said to Cross-complainants in an email dated January 30, 2021: I will agree on the condition that the agreement is made between me as homeowner and the production company. They will need to pay me directly, and I will have the funds available to you in the form of a money order when you return the keys upon move-out and walk-through of my property on Sunday February 21. This will leave you in the exact same financial position as your proposal to me.” (Cross-Compl., ¶ 7.)

Cross-Complainants allege that “the film company made their agreement with Cross-defendant instead of Cross-complainants, and paid Cross-defendant the $15,000 promised. However, Cross-defendant did not pay any portion of that $15,000 to Cross-complainants.” (Cross-Compl., ¶ 9.) Cross-Complainants further allege that “Cross-complainants vacated the premises, but Cross-defendant did not account for nor return any portion of the $17,500 security deposit paid by Cross-complainants.” (Cross-Compl., ¶ 10.)

C.     First Cause of Action for Fraud

In the first cause of action for fraud, Cross-Complainants allege that they “have been damaged by Cross-defendant’s fraud in the amount of $15,000 for the sum received and $20,000 more due to the foreseeable hardship caused by Cross-defendant’s failure to pay the money, whicfh [sic] was to be used for Cross-complainants’ relocation to Australia.” (Cross-Compl., ¶ 14.)

In the demurrer, Nilsen argues, inter alia, that Cross-Complainants “improperly recast their contract claim as a tort claim.” (Demurrer at p. 9:20.) Nilsen cites to Erlich v. Menezes (1999) 21 Cal.4th 543, 551-552, where the California Supreme Court noted that “conduct amounting to a breach of contract becomes tortious only when it also violates a duty independent of the contract arising from principles of tort law. An omission to perform a contract obligation is never a tort, unless that omission is also an omission of a legal duty. Tort damages have been permitted in contract cases where a breach of duty directly causes physical injury; for breach of the covenant of good faith and fair dealing in insurance contracts; for wrongful discharge in violation of fundamental public policy; or where the contract was fraudulently induced. In each of these cases, the duty that gives rise to tort liability is either completely independent of the contract or arises from conduct which is both intentional and intended to harm.” (Internal quotations and citations omitted.)

Nilsen asserts that here, “the facts alleged by Tenants in their Cross-Complaint are insufficient to establish that Landlord violated any legal duty independent of her contractual duties. The false promise alleged in the Cross-Complaint is based squarely on Landlord’s purported failure to perform her alleged contractual promise to deliver the $15,000 film payment to Tenants.” (Demurrer at p. 10:4-7, emphasis omitted.) Indeed, as set forth above, Cross-Complainants allege that “Cross-defendant said to Cross-complainants in an email dated January 30, 2021: I will agree on the condition that the agreement is made between me as homeowner and the production company. They will need to pay me directly, and I will have the funds available to you in the form of a money order when you return the keys upon move-out and walk-through of my property on Sunday February 21…” (Cross-Compl., ¶ 7.) Cross-Complainants allege that “the film company made their agreement with Cross-defendant instead of Cross-complainants, and paid Cross-defendant the $15,000 promised. However, Cross-defendant did not pay any portion of that $15,000 to Cross-complainants.” (Cross-Compl., ¶ 9.)

In the opposition, Cross-Complainants argue that “[t]he Robinson court relied upon its earlier decision in Erlich v. Menezes (1999) 21 Cal. 4th 543, 551, wherein it held, ‘Conduct amounting to a breach of contract becomes tortious only when it also violates a duty independent of the contract arising from principles of tort law.’ The independent duty does exist.” (Opp’n at p. 3:19-22.) But Cross-Complainants do not appear to point to any allegations in the Cross-Complaint concerning a “duty independent of the contract arising from principles of tort law” that was purportedly violated here. (Erlich v. Menezes, supra, 21 Cal.4th at p. 551.)

Cross-Complainants cite to Vasquez v. Residential Investments, Inc. (2004) 118 Cal.App.4th 269, 286, fn. 11, where the Court of Appeal noted that “[a]lthough the relationship of landlord and tenant traditionally has not been considered to be a special relationship creating a duty on the landlord to protect his or her tenant from the risk of crime (see Rest. 2d Torts, § 314A), the increase in urbanization, crime, and the number of people who rent and must rely on landlords to provide basic protection against crime has led to a growing tendency to recognize the circumstances in which a duty to provide some security will arise.” But the Cross-Complaint here does not contain any allegations concerning Nilsen’s purported failure to provide protection against crime.

Based on the foregoing, the Court sustains the demurrer to the first cause of action of the Cross-Complaint, with leave to amend.

D.    Second Cause of Action for “Restitution of the Security Deposit and Bad Faith”

Nilsen asserts that Cross-Complainants’ second cause of action for “restitution of the security deposit and bad faith” also fails. Nilsen notes that “[t]here is no freestanding cause of action for ‘restitution’ in California.” ((Munoz v. MacMillan (2011) 195 Cal.App.4th 648, 661)); (see also Reid v. City of San Diego (2018) 24 Cal.App.5th 343, 362, “although Plaintiffs seek ‘restitution,’ restitution is a remedy and not a freestanding cause of action.”)

In the opposition, Cross-Complainants assert that “the name of the cause of action is irrelevant.” (Opp’n at p. 5:16.) In support of this assertion, Cross-Complainants cite to Lee v. Amazon.com, Inc. (2022) 76 Cal.App.5th 200, 256, where the Court of Appeal noted that “[i]n evaluating whether a claim treats a provider as a publisher or speaker of user-generated content, what matters is not the name of the cause of action; instead, what matters is whether the cause of action inherently requires the court to treat the defendant as the publisher or speaker of content provided by another.” (Internal quotations omitted.) But the Cross-Complaint here does not concern “whether a claim treats a provider as a publisher or speaker of user-generated content.” The Court thus does not see how Lee is relevant here.

In addition, to the extent that the second cause of action involves a purported “quasi-contract,” Nilsen notes “it is well settled that an action based on an implied-in-fact or quasi-contract cannot lie where there exists between the parties a valid express contract covering the same subject matter.” ((Lance Camper Manufacturing Corp. v. Republic Indemnity Co. (1996) 44 Cal.App.4th 194, 203.) In Munoz v. MacMillan, supra, 195 Cal.App.4th at page 661, the Court of Appeal noted that “[c]ommon law principles of restitution require a party to return a benefit when the retention of such benefit would unjustly enrich the recipient; a typical cause of action involving such remedy is ‘quasi-contract.’” (Emphasis added.) Nilsen asserts that “[h]ere, Tenants’ own allegations establish that their security deposit was covered by a valid express contract, i.e., their lease with Landlord.” (Demurrer at p. 15:10-11.) As set forth above, Cross-Complainants allege that they “were residential tenants of the real property located at 2634 Barry Avenue, Los Angeles CA 90064…under a written lease…with Cross-defendant.” (Cross-Compl., ¶ 1.)

Based on the foregoing, the Court sustains the demurrer to the second cause of action for “restitution of the security deposit and bad faith” without leave to amend. As set forth above, “[t]here is no freestanding cause of action for ‘restitution’ in California.” (Munoz v. MacMillan, supra, 195 Cal.App.4th at p. 661.) In addition, as to the reference to “bad faith” in the name of the second cause of action, Cross-Complainants acknowledge in the opposition that “[t]he demurrer is improperly addressed to the bad faith penalty, which is only a remedy, not a cause of action.” (Opp’n at p. 6:2-3.) In addition, Cross-Complainants do not appear to have demonstrated any way that they could amend the second cause of action to alleviate the problems discussed above.

Motion to Strike

A court may strike any “¿irrelevant, false, or improper matter inserted in any pleading¿” or any part of a pleading “¿not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.¿” (¿¿Code Civ. Proc., § 436¿¿.)¿ 

Nilsen also moves to strike portions of the Cross-Complaint. (See Nilsen’s Notice of Motion at p. 1:7-16.) Because Nilsen’s demurrer to the Cross-Complaint is sustained in its entirety, the Court denies Nilsen’s motion to strike as moot.

Conclusion

Based on the foregoing, the Court sustains Nilsen’s demurrer to the first cause of action of the Cross-Complaint, with leave to amend. The Court sustains Nilsen’s demurrer to the second cause of action of the Cross-Complaint without leave to amend.

The Court denies Nilsen’s motion to strike as moot.

The Court orders Cross-Complainants to file and serve an amended cross-complaint, if any, within 20 days of the date of this order. If no amended cross-complaint is filed within 20 days, the Court orders Nilsen to file and serve a proposed judgment of dismissal within 30 days of the date of this order.¿ 

Nilsen is ordered to give notice of this order.   

DATED:  February 5, 2024                            ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court