Judge Teresa A. Beaudet, Case 22STCV18736 2023-01-25 Tentative Ruling

On June 8, 2022, Plaintiffs Eugene Chorny (“Chorny”) and Irina Ermakova (“Ermakova”) (jointly, “Plaintiffs”) filed the instant action against Defendants Samuel Ohana (“Ohana”), Tamim, LLC (“Tamim”), The Barbara Willa Johanna Katt Living Trust (the “Trust”), and Marks and Associates, a California Accountancy Corporation (“Marks and Associates”) (collectively, “Defendants”). The operative First Amended Complaint (“FAC”) was filed on August 18, 2022, and asserts causes of action for (1) breach of covenant of good faith and fair dealing, (2) fraud, (3) cancellation of title, and (4) intentional interference with prospective economic advantage.

On September 13, 2022, Tamim filed an Unlawful Detainer Action against Plaintiffs in the case Tamim, LLC v. Eugene Chorny, et al., Case No. 22VECV01348 (the “UD Action”).

On October 17, 2022, the Court in the instant action issued a minute order providing, inter alia, that “[t]he Court finds that the following cases, 22STCV18736 and 22VECV01348, are related within the meaning of California Rules of Court, rule 3.300(a). 22STCV18736 is the lead case.”

Plaintiffs now move for an order consolidating the instant case with the UD Action for purposes of trial, or in the alternative, staying the trial in the UD Action. Ohana and Tamim (jointly, the “Ohana Defendants”) oppose. In addition, the Trust and Marks and Associates (jointly, the “Marks and Associates Defendants”) oppose.

Code of Civil Procedure section 1048 grants discretion to trial courts to consolidate actions involving common questions of law or fact. “Consolidation is not a matter of right; it rests solely within the sound discretion of the trial judge. . .” ((Fisher v. Nash Bldg. Co. (1952) 113 Cal.App.2d 397, 402.) There are two types of consolidation under section 1048: “a consolidation for purposes of trial only, where the two actions remain otherwise separate; and a complete consolidation or consolidation for all purposes, where the two actions are merged into a single proceeding under one case number and result in only one verdict or set of findings and one judgment.” ((Hamilton v. Asbestos Corp. (2000) 22 Cal.4th 1127, 1147.) “The purpose is to enhance trial court efficiency (i.e., to avoid unnecessary duplication of evidence and procedures); and to avoid the substantial danger of inconsistent adjudications (i.e., different results because tried before different juries, or a judge and jury, etc.)” (Weil & Brown, Cal. Practice Guide: Civ. Proc. Before Trial (The Rutter Group 2022) ¶ 12:340.)

Plaintiffs indicate that they seek to consolidate the instant action with the UD Action for purposes of trial. Plaintiffs contend that the instant action and the UD Action arise out of the same set of facts and circumstances and involve the same commercial real property located at 13300 Burbank Blvd., Sherman Oaks, California 91401.

In the FAC in the instant case, Plaintiffs allege that Chorny owns the shop “Dad and I” located at 13300 Burbank Boulevard, Sherman Oaks, California 91401 (the “Subject Property”). (FAC, ¶¶ 1, 13.) On or about June 3, 2021, Chorny received a phone call from the manager of the property, Becca Paredes (“Paredes”), of Marks and Associates, informing him that the owner of the property was approached to sell the building at the Subject Property. (FAC, ¶ 13.) Under the first addendum to Plaintiffs’ lease agreement (Right of First Refusal to Purchase), Plaintiffs had 5 days to give the lessor written notice of their right of first refusal to purchase after receiving a notice of sale from the lessor. (FAC, ¶ 14, Ex. 1.) On June 5, 2021, Chorny sent an email to Paredes expressing Plaintiffs’ intent to purchase the Subject Property. (FAC, ¶ 15.)

About two weeks later, when Plaintiffs were in the process of obtaining a loan, Paredes provided Chorny with a “Standard Offer, Agreement and Escrow instructions For Purchase of Real Estate,” naming Chorny as a buyer. (FAC, ¶ 16.) Paredes’s email set the deadline to sign the offer as June 27, 2021, with the condition that “all terms of the agreement must be met.” (FAC, ¶ 16.) On or about June 29, 2021, Chorny realized that his loan could not be approved within such a short time, and sent an email to Paredes stating that Chorny could not purchase the Subject Property at that time. (FAC, ¶ 17.) The next day, Chorny called Paredes to inform her that he changed his mind after receiving good news about the reapproval of his loan. (FAC, ¶ 18.)

On July 2, 2021, Ohana, Chorny’s client and friend, indicated to Chorny that Plaintiffs should buy the Subject Property with Ohana and his partner Yaniv Cohen (“Cohen”). (FAC, ¶ 19.) On July 2, 2021, Ohana sent an email to Paredes informing her that “as communicated to you yesterday” he and Chorny were “able and willing to purchase said property at its full price,” and signed the email with the names Chorny and Ohana. (FAC, ¶ 20.) On the same date, Chorny emailed Paredes asking her to ignore Ohana’s email, informing her that he did not authorize Ohana to act in his behalf. (FAC, ¶ 21.)

Thereafter, neither Ohana nor Paredes returned Plaintiffs’ phone calls, and a month later, Plaintiffs became aware that the Subject Property was sold to Tamim. (FAC, ¶ 22.) Plaintiffs allege that Ohana and Cohen are managers of Tamim. (FAC, ¶ 22.)

In the UD Action, Tamim alleges that it is the owner of the premises that it the subject of the Complaint in the instant action (13300 Burbank Boulevard, Sherman Oaks, California 91401). (Compl., ¶¶ 3-4.) Tamim alleges that Chorny and Ermakova agreed to a 10 year lease, and that the lease term was subsequently extended through June 30, 2022. (Compl., ¶¶ 6(a)(1), 6(d).) Chorny and Ermakova allegedly became holdover tenants as of July 1, 2022. (Compl., ¶ 6(d).) Tamim alleges that at the time the 3-day notice to pay rent or quit was served, the amount of rent due was $21,480.75. (Compl., ¶ 12.)

Plaintiffs assert that consolidation is appropriate here because both actions involve the same property. Plaintiffs assert that “[t]he legal and factual questions in both actions both involve the fundamental issue of title to the property and therefore, the right of Tamim, LLC to go forward with the UD. Because the Defendants have allegedly acquired the property in violation of the law, Tamim, LLC should not be allowed to proceed summarily in the UD and thereby causing Plaintiffs irreparable harm prior to that issue being determined fully and completely in this case.” (Mot. at pp. 11:27-12:4.)

Plaintiffs cite to Martin-Bragg v. Moore (2013) 219 Cal.App.4th 367, 370, where “Ivan Rene Moore appeal[ed] in propria persona from the superior court’s judgment following trial on the unlawful detainer complaint of Kimberly Martin-Bragg seeking forfeiture of a lease and possession of a property. The judgment…awarded Martin-Bragg possession of the disputed property,” along with certain specified damages. “Moore appeal[ed] from the judgment on a number of grounds, most notably the trial court’s refusal to consolidate the unlawful detainer case against him with another action then pending in the superior court, brought by Moore, seeking quiet title to the property based on allegations that Martin-Bragg’s title to the property was actually held in trust for Moore’s benefit.” ((Ibid.) The Court of Appeal concluded that “the trial court abused its discretion in refusing Moore’s request to consolidate the unlawful detainer and quiet title actions for trial and that Moore was prejudiced by being forced to litigate the complex issue of title to the property under the summary procedures that govern actions for unlawful detainer.” ((Id. at pp. 370-371.) Plaintiffs argue that similar circumstances exist here, specifically, that “fraudulent misrepresentation would make the defendants’ deed to the…property voidable, stripping Defendant Tamim, LLC…of standing in the eviction proceeding. [Such] broad question of title cannot be raised and litigated in a summary proceeding of an unlawful detainer…” (Reply at p. 3:22-26.)

The Martin-Bragg Court noted that “the trial court has the power to consolidate an unlawful detainer proceeding with a simultaneously pending action in which title to the property is in issue. That is because a successful claim of title by the tenant would defeat the landlord’s right to possession. When an unlawful detainer proceeding and an unlimited action concerning title to the property are simultaneously pending, the trial court in which the unlimited action is pending may stay the unlawful detainer action until the issue of title is resolved in the unlimited action, or it may consolidate the actions. If it does neither and instead tries the issue of title under the summary procedures that constrain unlawful detainer proceedings, the parties’ right to a full trial of the issue of title may be unfairly expedited and limited. If complex issues of title are tried in the unlawful detainer proceeding, the proceeding loses its summary character; defects in the plaintiff’s title are neither properly raised in this summary proceeding for possession, nor are they concluded by the judgment.” ((Martin-Bragg v. Moore, supra, 219 Cal.App.4th at p. 385 [internal quotations and citations omitted].)

The Court notes that the Ohana Defendants and the Marks and Associates Defendants do not address the Martin-Bragg case in their respective oppositions.

Plaintiffs also assert that there is a risk of inconsistent results if the two actions are not consolidated. In addition, Plaintiffs contend that judicial economy will be served by consolidating the actions for trial, because “[t]he witnesses called by both sides in both actions will, presumably, be the same. The experts retained by Plaintiffs (and presumably, Defendants) will be the same in both actions. The evidence presented will be substantially the same.” (Mot. at p. 12:23-28.) The Ohana Defendants counter that the witnesses in each action are not the same, as “[t]he First Action will likely call as witnesses the former seller, its agents/accountants/manager, Defendant Ohana and Plaintiffs. Plaintiffs’ experts will likely testify about the value of Plaintiffs’ business. The witnesses for the Eviction Action will be Plaintiffs and a member of Defendant Tamim, LLC. No experts will be called in the Eviction Action.” (Opp’n at p. 9:1-6.)

The Ohana Defendants also assert that consolidation would not promote efficiency here, because the two cases involve different parties, and three of such parties (but not all parties) overlap. The Ohana Defendants also assert that combining the cases for trial would require more time and increased costs for discovery, and would “require a voluminous number of limiting instructions regarding what evidence the jury may consider as to particular issues and claims.” (Opp’n at p. 10:12-13.)

(A) List all named parties in each case, the names of those who have appeared, and the names of their respective attorneys of record;

(B) Contain the captions of all the cases sought to be consolidated, with the lowest numbered case shown first; and

The Ohana Defendants assert that Plaintiffs failed to file the notice of motion to consolidate in the UD Action. The Court notes that on November 30, 2022, after the Ohana Defendants’ opposition was filed, Plaintiffs filed a notice of the motion to consolidate in the UD Action.

Next, the Ohana Defendants assert that title is not at issue in the instant action because Plaintiffs do not have standing to contest title. The Ohana Defendants also note that Plaintiffs’ prayer for relief in the instant action indicates that Plaintiffs seek, inter alia, general damages in the amount of $500,000.00, punitive and exemplary damages, and “[p]ursuant to the Third Cause of Action for Cancellation of Deed, a judgment from this Court that the Grand Deed [sic] of the transfer of the property to Defendant TAMIM be canceled.” (FAC, p. 13:20-23.) The Ohana Defendants thus assert that title is also not at issue in the instant action, because “even if Plaintiffs were to be successful in the lead case, Plaintiffs would only be awarded their monetary damages, not title.” (Opp’n at p. 6:17-18.) But irrespective of whether Plaintiffs have standing or are awarded title of the subject property, the FAC in the instant action still alleges a cause of action for cancellation of title. Thus, title of the subject property is at issue in the instant action. As set forth above, pursuant to Code of Civil Procedure section 1048, subdivision (a), “[w]hen actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.”

The Ohana Defendants also assert that Plaintiffs cannot satisfy the statute of frauds to force a sale to them. Again, the Court notes that the relevant question at issue here is whether the instant action and the UD Action involve a common question of law or fact and whether consolidation is proper, not the merits of the instant action.

In addition, the Ohana Defendants assert that the relevant evidence will not be the same in the two actions, because all of the relevant facts and events in the UD Action occurred a year after the sale of the subject property. But as discussed, both actions involve title to the same property.

Lastly, the Ohana Defendants assert that Tamim would be prejudiced if the two matters are consolidated. They contend that “[f]orcing Tamim, LLC to wait years to have the issue of possession and whether Plaintiffs failed to pay rent resolved in a consolidated trial would be verv prejudicial and would award Plaintiffs two to three years of free rent.” (Opp’n at p. 10:25-11:1, emphasis omitted.) Plaintiffs counter that consolidation “is the only procedurally appropriate remedy available to ensure that Plaintiffs (and the other parties) is not made to incur the costs and dislocations of two law suits involving substantially the same facts, witnesses, evidence, and issues, and the potential consequences of the premature adjudication of the unlawful detainer action.” (Reply at p. 7:16-22.) Plaintiffs also assert that they will be prejudiced if consolidation is not granted, as they would “suffer irreparable harm if they are wrongfully evicted from the Property.” (Mot. at p. 6:17-18.)

In their opposition, the Marks and Associates Defendants assert that the two cases do not involve common questions of law or fact, because the only commonality shown by Plaintiffs is that they are Plaintiffs in the instant action and defendants in the UD action. But as discussed, both actions also concern the same subject property.

The Marks and Associates Defendants also assert that consolidation would be prejudicial to them. Specifically, they assert that “[i]f the two cases are consolidated, the trial of the unlawful detainer action would involve the introduction of evidence that is irrelevant to the claims against Defendants in the civil action. Defendants would be required to prepare to address the unrelated evidence relating to the other claims to ensure that the trier of fact is not confused or influenced by such evidence, resulting in more work for defense counsel, longer cross-examination of witnesses, and a longer trial than would be required if the cases were tried separately.” (Opp’n at p. 4:27-5:5.)

The Marks and Associates Defendants also assert that “[s]ince the unlawful detainer action is tried on an expedited basis, Defendants would not have sufficient time to complete

discovery in the civil case before the trial is set in the unlawful detainer action,” resulting in prejudice to them. (Opp’n at p. 5:8-10.) But this argument appears to demonstrate that consolidation would be appropriate here.

Lastly, the Marks and Associates Defendants assert that the instant case and the UD Action cannot be related. As set forth above, the Court already ordered on October 17, 2022 that the two matters are related within the meaning of California Rules of Court, rule 3.300(a).

Based on a consideration of the arguments presented by the parties, the Court finds it appropriate to consolidate the two actions. As set forth above, “[w]hen an unlawful detainer proceeding and an unlimited action concerning title to the property are simultaneously pending, the trial court in which the unlimited action is pending may stay the unlawful detainer action until the issue of title is resolved in the unlimited action, or it may consolidate the actions. If it does neither and instead tries the issue of title under the summary procedures that constrain unlawful detainer proceedings, the parties’ right to a full trial of the issue of title may be unfairly expedited and limited.” ((Martin-Bragg v. Moore, supra, 219 Cal.App.4th at p. 385 [internal citation omitted].)

For the foregoing reasons, the Court grants Plaintiffs’ motion to consolidate.

Superior Court of California

County of Los Angeles

Department 50

On June 8, 2022, Plaintiffs Eugene Chorny (“Chorny”) and Irina Ermakova (jointly, Plaintiffs”) filed the instant action against Defendants Samuel Ohana (“Ohana”), Tamim, LLC (“Tamim”), The Barbara Willa Johanna Katt Living Trust (the “Trust”), and Marks and Associates, a California Accountancy Corporation (“Marks and Associates”) (collectively, “Defendants”).

The operative First Amended Complaint (“FAC”) was filed on August 18, 2022, and asserts causes of action for (1) breach of covenant of good faith and fair dealing, (2) fraud, (3) cancellation of title, and (4) intentional interference with prospective economic advantage.[1]

Ohana and Tamim (jointly, the “Ohana Defendants”) now demur to the second, third, and fourth causes of action of the FAC. Plaintiffs oppose.

In addition, the Trust and Marks and Associates (jointly, the “Marks and Associates Defendants”) demur to the first, third, and fourth causes of action. Plaintiffs oppose.

In the FAC, Plaintiffs allege that Chorny owns the shop “Dad and I” located at 13300 Burbank Boulevard, Sherman Oaks, California (the “Subject Property”). (FAC, ¶ 13.) On or about June 3, 2021, Chorny received a phone call from the manager of the property, Becca Paredes (“Paredes”), of Marks and Associates, informing him that the owner of the property was approached to sell the building at the Subject Property. (FAC, ¶ 13.) Under the first addendum to Plaintiffs’ lease agreement (Right of First Refusal to Purchase), Plaintiffs had 5 days to give the lessor written notice of their right of first refusal to purchase after receiving a notice of sale from the lessor. (FAC, ¶ 14, Ex. 1.) On June 5, 2021, Chorny sent an email to Paredes expressing Plaintiffs’ intent to purchase the Subject Property. (FAC, ¶ 15.)

“A complaint for fraud must allege the following elements: (1) a knowingly false representation by the defendant; (2) an intent to deceive or induce reliance; (3) justifiable reliance by the plaintiff; and (4) resulting damages.” ((Service by Medallion, Inc. v. Clorox Co. (1996) 44 Cal.App.4th 1807, 1816.) “In California, fraud must be pled specifically; general and conclusory allegations do not suffice.¿Thus the policy of liberal construction of the pleadings . . . will not ordinarily be invoked to sustain a pleading defective in any material respect…This particularity requirement necessitates pleading¿facts¿which¿show how, when, where, to whom, and by what means the representations were tendered.” ((Lazar v. Superior Court (1996) 12 Cal.4th 631, 645 [internal quotations, citations, and emphasis omitted].)

The Ohana Defendants contend that Plaintiffs’ second cause of action for fraud must fail because it has not been plead with sufficient specificity. They contend that Plaintiffs have failed to specifically state what representations Ohana made, to whom, when, and where.

As to the alleged misrepresentation, Plaintiffs note that the FAC alleges that on July 2, 2021, Ohana “advised Chorny that he and his wife should instead buy the property with him (Ohana) and his partner Yaniv Cohen,” and that “[o]n July 2, 2021 at 3:35PM Mr. Ohana sent the email to [Paredes] informing her that ‘as communicated to you yesterday’ he and Mr. Chorny are ‘able and willing to purchase said property at its full price’…” (FAC, ¶¶ 19, 20, emphasis omitted.) Plaintiffs allege that Ohana signed the email with both Chorny’s and Ohana’s names. (FAC, ¶ 20, Ex. 6.)

However, it is unclear how Plaintiffs justifiably relied to their detriment on the foregoing alleged misrepresentations made by Ohana to Paredes (not Plaintiffs). Chorny allegedly emailed Paredes “asking her to ignore Ohana’s email and disregard Ohana’s statement of partnership, informing her that he did not authorize Ohana to act in his behalf.” (FAC, ¶ 21.) Thus, Chorny allegedly knew Ohana’s statements were false and corrected Ohana’s alleged misrepresentation, as noted by the Ohana Defendants.

Based on the foregoing, the Court sustains the Ohana Defendants’ demurrer to the second cause of action, with leave to amend.

Pursuant to Civil Code section 3412, “[a] written instrument, in respect to which there is a reasonable apprehension that if left outstanding it may cause serious injury to a person against whom it is void or voidable, may, upon his application, be so adjudged, and ordered to be delivered up or canceled.” In support of their third cause of action for cancellation of title, Plaintiffs allege that they “seek cancellation of the Grand Deed [sic] which was obtained by fraud by Defendants and will continue to cause serious injury to Plaintiffs by cancelling, among other things, his business, goodwill and his livelihood.” (FAC, ¶ 35.)

The Ohana Defendants first assert that Ohana is not the owner of the Subject Property and thus not a proper defendant to this cause of action. They contend that the Subject Property was purchased by Tamim, and in support of this assertion cite to an Exhibit “B” attached to their demurrer. The Court notes that “the limited role of a demurrer…[is] to test the legal sufficiency of a complaint. In reviewing the ruling on a demurrer, a court cannot consider…the substance of declarations, matter not subject to judicial notice, or documents judicially noticed but not accepted for the truth of their contents.” ((Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994 [internal citations omitted].)

In any event, Plaintiffs allege in the FAC that the property was sold to Tamim. (FAC, ¶ 22.) Plaintiffs allege that they seek, “[p]ursuant to the Third Cause of Action for Cancellation of Deed, a judgment from this Court that the Grand Deed [sic] of the transfer of the property to Defendant TAMIM be canceled.” (FAC, p. 13:20-23.) Although Plaintiffs allege that Ohana is listed as a manager of Tamim with the California Secretary of State (FAC, ¶ 22), they do not appear to allege that Ohana owns the subject property. The Ohana Defendants note that “a member in a limited liability company does not hold any interest in the real property owned by the limited liability company.” ((Fashion Valley Mall, LLC v. County of San Diego (2009) 176 Cal.App.4th 871, 886.)

The Ohana Defendants also assert that Plaintiffs do not have a beneficial interest in the Subject Property and thus cannot prosecute a claim for cancellation of title. “To have standing, a party must be beneficially interested in the controversy; that is, he or she must have some special interest to be served or some particular right to be preserved or protected over and above the interest held in common with the public at large. The party must be able to demonstrate that he or she has some such beneficial interest that is concrete and actual, and not conjectural or hypothetical.” (Holmes v. Cal. Nat. Guard (2001) 90 Cal.App.4th 297, 315 [internal quotations and citations omitted].)

The Ohana Defendants assert that Plaintiffs have admitted in the FAC that they waived any interest in purchasing the Subject Property via a right of first refusal. As set forth above, Plaintiffs allege that “[u]nder the First Addendum to the Lease Agreement, Right of First Refusal, Plaintiffs had 5 days, after receiving the Notice of Sale from a Lessor, to give a Lessor a written notice to confirm their exercise of the Right of First Refusal to Purchase.” (FAC, ¶ 14, Ex. 1) Plaintiffs attach as Exhibit 1 to the FAC an Addendum with the title “Right of First Refusal to Purchase.” (Ibid.) The Addendum provides, inter alia, that “[f]or a period of 5 calendar days after receipt by Lessee of the Notice of Sale, Lessee shall have the right to give written notice to the Lessor of Lessee’s exercise of Lessee’s right to purchase the Premises…In the event that Lessor does not receive written notice of Lessee’s exercise of the right herein granted within said 5 day period, there shall be a conclusive presumption that Lessee has elected NOT to exercise Lessee’s right hereunder, and Lessor may complete the sale to the prospective purchaser, on the same terms set forth in the Notice of Sale.” (Ibid., ¶ 55(c).)

The Ohana Defendants note that the FAC alleges that on June 22, 2021, Paredes sent an email to Chorny indicating, “[p]er the addendum to your lease titled Right of First Refusal to Purchase, we are giving you the option to exercise the purchase. Per this right, we are offering identical terms to the offer from the prospective buyer. Please review the attached Purchase Sales Agreement. If you would like to proceed with the purchase please return a signed copy back to me prior to the deadline of 6/27/2021…” (FAC, ¶ 16, Ex. 3.) Plaintiffs allege that on or about June 29, 2021, Chorny sent an email to Paredes stating, inter alia, “[u]nfortunately, my financial situation does not allow me to purchase the property at this time. However, I’d like to offer to extend the current lease at a higher rate for a few more years with options…” (FAC, ¶ 17, Ex. 4.)

Thus, as the Ohana Defendants note, Plaintiffs allege that on June 29, 2021, two days after the June 27, 2021 deadline, Plaintiffs declined to exercise their right of first refusal to purchase. The Ohana Defendants assert that Plaintiffs accordingly lost any right to force a sale of the Subject Property to Plaintiffs; and that Plaintiffs thus do not have an interest in the controversy or a particular right to be preserved or protected for purposes of the third cause of action.

Plaintiffs assert that the FAC also alleges that on or about June 3, 2021, Chorny received a call from Paredes informing him that the owner of the property was approached to sell

the building at the Subject Property. (FAC, ¶ 13.) Plaintiffs allege that on June 5, 2021, they wrote an email to Paredes indicating, “[t]his is to confirm that we, Eugene Chorny & Irina Emakova Partnership, are executing our right to purchase the real property our business has been occupying at above mentioned address…” (FAC, ¶ 15, Ex. 2.)[2]

The Ohana Defendants counter that these allegations show that the previous owner of the Subject Property had not provided written notice of their intent to sell, as required for Plaintiffs to exercise their right of first refusal, before Plaintiffs sent the June 5, 2021 email. Indeed, Plaintiffs allege that “[o]n or about June 3, 2021, Eugene Chorny…received a phone call from the manager of the property Becca Paredes…of Marks and Associates, informing him that the owner of the property was approached to sell the building…” (FAC, ¶ 13, emphasis added.) Plaintiffs allege that the subject Right of First Refusal to Purchase provides that, “[f]or a period of 5 calendar days after receipt by Lessee of the Notice of Sale, Lessee shall have the right to give written notice to Lessor of Lessee’s exercise of Lessee’s right to purchase the Premises…” (FAC, ¶ 14, Ex. 1, ¶ 55(c), emphasis added.) The Right of First Refusal to Purchase also provides that “Lessor shall not, at any time prior to the expiration of the Original Term of this Lease, sell the Premises, or any interest therein, without first giving written notice thereof to Lessee, which notice is hereinafter referred to as ‘Notice of Sale’.” (FAC, ¶ 14, Ex. 1, ¶ 55(a), emphasis added.) In addition, “[t]he Notice of Sale shall include the exact and complete terms of the proposed sale and shall have attached thereto a copy of the bona fide offer and counteroffer, if any, duly executed by both Lessor and the prospective purchaser.” (FAC, ¶ 14, Ex. 1, ¶ 55(b).)

Plaintiffs do not allege that they received a written Notice of Sale on June 3, 2021. In addition, as discussed, Plaintiffs allege that on or about June 29, 2021, Chorny sent an email to Paredes stating Chorny could not purchase the Subject Property at that time. (FAC, ¶ 17.)

Based on the foregoing, the Court sustains the Ohana Defendants’ demurrer to the third cause of action, with leave to amend.

C. Fourth Cause of Action for Intentional Interference with Prospective Economic Advantage

The elements of the tort of intentional interference with prospective economic advantage are: “(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153.)

The Ohana Defendants assert that the fourth cause of action must fail. They contend that because Plaintiffs failed to exercise their right of first refusal within five days of receiving the subject notice, any prospective economic advantage or relationship did not exist, and therefore, could not be interfered with by anyone. The Ohana Defendants also assert that Plaintiffs declined to exercise their right of first refusal before the Ohana Defendants’ alleged involvement, such that any actions allegedly taken by the Ohana Defendants could not have interfered with Plaintiffs’ purported economic advantage.

Plaintiffs counter that they had a “long term an [sic] economic relationship with Lessor with a future economic benefits in term of the ROFR or extension of lease.” (Opp’n at p. 14:21-23.) However, in the fourth cause of action, Plaintiffs solely allege that Defendants “were aware of Plaintiffs’ First Right of Refusal, placing the Plaintiffs in the first position to purchase the Subject property and of the Plaintiffs’ desire and true intent to acquire the Subject Property. Defendants, nevertheless, maliciously disregarded the Plaintiffs’ rights, taking this opportunity from the Plaintiffs, depriving the Plaintiffs of receiving the benefits from the property…” (FAC, ¶ 37.) Plaintiffs do not specifically allege that the Ohana Defendants intentionally disrupted Plaintiffs’ right to extend their lease with the previous owner of the Subject Property.

Based on the foregoing, the Court sustains the Ohana Defendants’ demurrer to the fourth cause of action, with leave to amend.

In support of the first cause of action for breach of covenant of good faith and fair dealing, Plaintiffs allege that “Defendants, knowingly of Plaintiffs’ univocal intent to exercise their right under the First Addendum to the lease agreement, failed, among other things, to efficiently communicate with Plaintiffs about their options, to give them a reasonable time to obtain a loan, to disclose the agreement with Ohana and Tamim, to honor Irina Ermakova’s right to the agreement, and to lawfully handle the First Addendum to Lease Right to First Refusal, have breached the implied covenant of good faith and fair dealing implicit within their Grand [sic] Deed.” (FAC, ¶ 26.)

The Marks and Associates Defendants assert that the first cause of action for breach of covenant of good faith and fair dealing must fail. They contend that “Plaintiffs failed to timely exercise their right of first refusal, a material breach of the Lease. As such, they did not do all or substantially all of the things they were obligated to do under the Lease and the performance by Defendants was excused.” (Demurrer at p. 8:21-23.) Indeed, the first cause of action does not contain any allegations that Plaintiffs did all or substantially all of the significant things that the subject lease required them to do (i.e. that they performed under the lease), or that they were excused from having to do those things.

Based on the foregoing, the Court sustains the Marks and Associates Defendants’ demurrer to the first cause of action, with leave to amend.

The Marks and Associates Defendants assert that they are not owners of the Subject Property and therefore are not proper parties to the third cause of action for cancellation of title. Plaintiffs do not appear to respond to this point in the opposition. The Court also does not see how the third cause of action concerns the Marks and Associates Defendants. As set forth above, Plaintiffs allege that they seek “[p]ursuant to the Third Cause of Action for Cancellation of Deed, a judgment from this Court that the Grand [sic] Deed of the transfer of the property to Defendant TAMIM be canceled.” (FAC, p. 13:20-23.)

Based on the foregoing, the Court sustains the Marks and Associates Defendants’ demurrer to the third case of action, with leave to amend.

C. Fourth Cause of Action for Intentional Interference with Prospective Economic Advantage

The Marks and Associates Defendants assert that the FAC does not allege that they engaged in intentional acts designed to disrupt an economic relationship between Plaintiffs and a third party. As set forth above, the elements of the tort of intentional interference with prospective economic advantage are: “(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.” (Korea Supply Co. v. Lockheed Martin Corp., supra, 29 Cal.4th at p. 1153.)

In the fourth cause of action, Plaintiffs allege that “Defendants knew or reasonably should have known that by assuring that he represented the Plaintiffs in the transaction and then buying the property with another party, Defendants’ deprived the Plaintiffs of their opportunity.” (FAC, ¶ 38.) This allegation appears to refer to Ohana, not the Marks and Associates Defendants. The Court notes that the subject Addendum attached as Exhibit 1 to the FAC is between “The Katt Family Trust C” (Lessor) and Plaintiffs (Lessee). (FAC, ¶ 14, Ex. 1.) Plaintiffs do not allege how the Trust intentionally acted to disrupt Plaintiffs relationship with it. Plaintiffs also do not specifically allege how Marks and Associates intentionally acted to disrupt Plaintiffs’ relationship with “The Katt Family Trust C.”

Based on the foregoing, the Court sustains the Marks and Associates Defendants’ demurrer to the fourth cause of action, with leave to amend.

A court may strike any “irrelevant, false, or improper matter inserted in any pleading” or all 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.) “The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.” (Code Civ. Proc., § 437.)

The Marks and Associates Defendants move to strike Plaintiffs’ request for punitive damages in connection with the fourth cause of action. (FAC, ¶ 42, FAC, pp. 13:28-14:1.) Because the Marks and Associates Defendants’ demurrer to the fourth cause of action (and the other causes of action alleged against them) is sustained, the Court denies the Marks and Associates Defendants’ motion to strike as moot.

Based on the foregoing, the Ohana Defendants’ demurrer is sustained in its entirety, with leave to amend.

In addition, the Marks and Associates Defendants’ demurrer is sustained in its entirety, with leave to amend. The Marks and Associates Defendants’ motion to strike is denied as moot.

The Court orders Plaintiffs to file and serve an amended complaint, if any, within 20 days of the date of this order. If no amended complaint is filed within 20 days, the Court orders

the Ohana Defendants and the Marks and Associates Defendants to file and serve proposed judgments of dismissal within 30 days of the date of this order.

[1]The first cause of action is alleged against the Trust and Marks and Associates, the second cause of action is alleged against Ohana, and the third and fourth causes of action are alleged against all Defendants.

[2]Plaintiffs’ opposition also references email correspondence that is not alleged in the FAC, and certain documents are attached to the opposition. The Court notes that “[t]he purpose of a demurrer is to test the legal sufficiency of a pleading, not to test the evidence or other extrinsic matters.” (McHugh v. Howard (1958) 165 Cal.App.2d 169, 173-174.)

[3]In addition, the Marks and Associates Defendants note that pursuant to CACI No. 325, to establish a claim for breach of implied covenant of good faith and fair dealing, the plaintiff must prove all of the following: (1) that plaintiff and defendant entered into a contract; (2) that plaintiff did all, or substantially all of the significant things that the contract required him/her to do, or that he/she was excused from having to do those things; (3) that all conditions required for defendant’s performance had occurred or were excused; (4) that defendant engaged in conduct that plaintiff claims prevented plaintiff from receiving the benefits under the contract; (5) that by doing so, defendant did not act fairly and in good faith; and (6) that plaintiff was harmed by defendant’s conduct. (CACI No. 325.)

EUGENE CHORNY, et al., Plaintiffs, vs. SAMUEL OHANA, et al., Defendants.	Case No.:	22STCV18736 [r/w 22VECV01348]
	Hearing Date:	January 25, 2023
	Hearing Time:	10:00 a.m.
	[TENTATIVE] ORDER RE: MOTION TO CONSOLIDATE ACTIONS FOR TRIAL; IN THE ALTERNATIVE, MOTION FOR AN ORDER STAYING THE UNLAWFUL DETAINER TRIAL

EUGENE CHORNY, et al. Plaintiffs, vs. SAMUEL OHANA, et al. Defendants.	Case No.:	22STCV18736
	Hearing Date:	January 25, 2023
	Hearing Time:	10:00 a.m.
	[TENTATIVE] ORDER RE: DEFENDANTS SAMUEL OHANA AND TAMIM, LLC’S DEMURRER TO PLAINTIFFS FIRST AMENDED COMPLAINT; DEMURRER BY DEFENDANTS THE BARBARA WILLA JOHANNA KATT LIVING TRUST AND MARKS & ASSOCIATES, AN ACCOUNTANCY CORPORATION, TO PLAINTIFF’S FIRST AMENDED COMPLAINT; MOTION TO STRIKE PORTIONS OF THE PLAINTIFFS’ FIRST AMENDED COMPLAINT