Judge: Teresa A. Beaudet, Case: 22STCV15510, Date: 2023-05-16 Tentative Ruling

Case Number: 22STCV15510    Hearing Date: May 16, 2023    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

Plaintiff JC 2020 Corp. (“JC 2020”) filed this action on May 10, 2022 against Defendants New Hampshire BBL, LLC (“New Hampshire BBL”) and Robert Lee, an individual dba Landpac Properties.

JC 2020 filed the operative First Amended Complaint (“FAC”) on July 27, 2022, asserting causes of action for (1) breach of written contract, (2) promissory estoppel, (3) fraudulent concealment, (4) fraudulent misrepresentation, and (5) fraudulent transfer.

On July 20, 2022, Robert Lee (“Lee”) and New Hampshire BBL filed a Cross-Complaint against Cross-Defendants J.C. 2020, Jeannie Yoon (“Yoon”), Benjamin Ahn, and James Mortensen (“Mortensen”). The Cross-Complaint asserts causes of action for (1) indemnification, (2) apportionment of fault, (3) intentional tort, and (4) intentional tort.

In the FAC, JC 2020 alleges that New Hampshire BBL and Lee offered for sale the property known as 982 S. New Hampshire Ave., Los Angeles, CA 90006 (the “Property”). (FAC, ¶ 2.) JC 2020 made an offer for the Property based on the rent roll provided by Hampshire BBL and Lee. (FAC, ¶ 16.) JC 2020 alleges that “[t]he Rent Roll identified the rent for apartments 105 and 204 as being far below market, but also month to month, so that rent could be increased to market rates. After negotiation, [Hampshire BBL] accepted the offer but demanded that [JC 2020] post a large nonrefundable earnest money deposit of a million dollars to guarantee the deal would go though [sic] unconditionally...” (FAC, ¶ 16.) JC 2020 alleges that Lee “created two secret new leases for the two apartments before or after the deposit…which were not disclosed on the rent roll or during escrow.” (FAC, ¶ 17.) More specifically, JC 2020 alleges that Hampshire BBL “created leases for the two units extending the under market rent to six and eight year respectively…and concealed that information from [JC 2020] until after [JC 2020] signed the purchase agreement and deposited a large nonrefundable earnest money deposit demanded by,” inter alia, Hampshire BBL. (FAC, ¶ 39.)

In their Cross-Complaint, Lee and Hampshire BBL (jointly, “Cross-Complainants”) allege, inter alia, that “Cross-Defendants knowingly and designedly, by false and fraudulent representations, induced Cross-Complainant LLC’s reliance upon their fraudulent representations, pretending a conventional purchase of said real property, whereas the true facts are that Cross-Defendants’ real aim was securing the participation of Cross-Complainants LLC and Robert Lee in a scheme to violate California Penal Code § 186.10, money laundering, and Title 18, United States Code, § 1956, money laundering on behalf of the Cross-Defendants.” (Cross-Compl., p. 4, ¶ 3.) Cross-Complainants allege that “[o]n June 9, 2021, Cross-Defendants explained to Cross-Complainant Robert Lee at the Yellow House Cafe in Los Angeles that their goal was to avoid a transaction reporting requirement under State and Federal law for $600,000.00 in United States currency.” (Ibid.)

Yoon, Benjamin “An,” JC 2020, and Mortensen (collectively, “Cross-Defendants”) now demur to each of the causes of action of the Cross-Complaint. No opposition to the demurrer was filed.

Discussion

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.)

A pleading is uncertain if it is ambiguous or unintelligible. (Code Civ. Proc., § 430.10, subd. (f).) A demurrer for uncertainty may lie if the failure to label the parties and claims renders the complaint so confusing defendant cannot tell what he or she is supposed to respond to.  (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.) However, “[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.) 

First Cause of Action for Indemnification

In support of the first cause of action for indemnification, Cross-Complainants allege, inter alia, that “[i]f I am found in some manner responsible to plaintiff or to anyone else as a result of the incidents and occurrences described in plaintiff’s complaint, my liability would be based solely upon a derivative form of liability not resulting from my conduct, but only from an obligation imposed upon me by law; therefore, I would be entitled to complete indemnity from each cross-defendant.” (Cross-Compl., p. 2, ¶ 7(c).)

In the demurrer, Cross-Defendants cite to Prince v. Pacific Gas & Electric Co. (2009) 45 Cal.4th 1151, 1157, where the California Supreme Court noted that “we now recognize there are only two basic types of indemnity: express indemnity and equitable indemnity. Though not extinguished, implied contractual indemnity is now viewed simply as a form of equitable indemnity.” (Internal quotations and citations omitted.) As Cross-Defendants note, the Cross-Complaint does not allege whether express indemnity and/or equitable indemnity is purportedly applicable here.

“Express indemnity refers to an obligation that arises by virtue of express contractual language establishing a duty in one party to save another harmless upon the occurrence of specified circumstances.” (Prince v. Pacific Gas & Electric Co., supra, 45 Cal.4th at p. 1158 [internal quotations omitted].) Cross-Defendants note that the Cross-Complaint “identifies no indemnitor, no agreement, and no agreed risk to be indemnified.” (Demurrer at p. 9:28.)

In addition, “[u]nlike express indemnity, traditional equitable indemnity requires no contractual relationship between an indemnitor and an indemnitee. Such indemnity is premised on a joint legal obligation to another for damages, but it does not invariably follow fault.” (Prince v. Pacific Gas & Electric Co., supra, 45 Cal.4th at p. 1158 [internal quotations omitted].) As Cross-Defendants note, the Cross-Complaint does not identify any “joint legal obligation.”

Based on the foregoing, the Court sustains the demurrer to the first cause of action.

Second Cause of Action for Apportionment of Fault

In support of the second cause of action for apportionment of fault, Cross-Complainants allege that “[e]ach cross-defendant was responsible, in whole or in part, for the injuries, if any, suffered by plaintiff,” and that “[i]f I am judged liable to plaintiff, each cross-defendant should be required: (1) to pay a share of plaintiffs judgment which is in proportion to the comparative negligence of that cross-defendant in causing plaintiff’s damages; and (2) to reimburse me for any payments I make to plaintiff in excess of my proportional share of all cross-defendants’ negligence.” (Cross-Compl., p. 2, ¶ 8.)

In the demurrer, Cross-Defendants assert that the second cause of action for apportionment of fault is “an affirmative defense, not a cause of action.” (Demurrer at p. 10:9-10.) However, Cross-Defendants do not cite to any legal authority to support this assertion. Cross-Defendants also assert that “the cause of action does not identify any defendants from the complaint to apportion fault to.” (Demurrer at p. 10:11-12.) But Cross-Complainants allege that “[i]f I am judged liable to plaintiff, each cross-defendant should be required: (1) to pay a share of plaintiffs judgment which is in proportion to the comparative negligence of that cross-defendant in causing plaintiff’s damages.” (Cross-Compl., p. 2, ¶ 8(b).)

The Court does not find that Cross-Defendants have demonstrated that the second cause of action is deficient and thus overrules the demurrer to the second cause of action.

Third Cause of Action for “Intentional Tort”

Cross-Complainants’ third cause of action is for “intentional tort.” As noted by Cross-Defendants, the third cause of action does not specify what exact cause of action is alleged. Rather, the Cross-Complaint simply states “intentional tort” next to “third cause of action.” (Cross-Compl., p. 4.) Cross-Defendants surmise that the third cause of action may be one for “interference with prospective advantage,” but the Court notes that no such claim is asserted in the third cause of action. Moreover, Cross-Complainants do not oppose the demurrer and thus do not address the foregoing points.

As the third cause of action does not identify what specific cause of action is being alleged, the Court agrees with Cross-Defendants that this cause of action is uncertain. As set forth above, “[t]he party against whom a complaint or cross-complaint has been filed may object, by demurrer or answer as provided in Section 430.30, to the pleading on any one or more of the following grounds:…(f) The pleading is uncertain. As used in this subdivision, ‘uncertain’ includes ambiguous and unintelligible.” (Code Civ. Proc., § 430.10, subd. (f).) The Court finds that the third cause of action is ambiguous.

Based on the forgoing, the Court sustains the demurer to the third cause of action.

Fourth Cause of Action for “Intentional Tort”

Cross-Complainants’ fourth cause of action is also for “intentional tort.” As noted by Cross-Defendants, the fourth cause of action also does not specify what exact cause of action is alleged. Cross-Complainants do not oppose the demurrer and do not address this point. Thus, the Court finds that the fourth cause of action is also uncertain and sustains the demurrer to this cause of action.  

Conclusion

Based on the foregoing, the Court sustains Cross-Defendants’ demurrer to the first, third, and fourth causes of action of the Cross-Complaint, with leave to amend. The Court overrules Cross-Defendants’ demurrer to the second cause of action.

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 of this Order, Cross-Defendants are ordered to file and serve their answer within 30 days of the date of this Order.¿¿ 

Cross-Defendants are ordered to give notice of this Order. 

DATED:  May 16, 2023                                

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Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court