Judge Teresa A. Beaudet, Case 22STCV18736 2023-04-12 Tentative Ruling

Plaintiffs filed a First Amended Complaint (“FAC”) on August 18, 2022, which asserted 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”) demurred to the second, third, and fourth causes of action of the FAC. In addition, the Trust and Marks and Associates (jointly, the “Marks and Associates Defendants”) demurred to the first, third, and fourth causes of action of the FAC. On January 25, 2023, the Court issued an Order sustaining the Ohana Defendants’ and the Marks and Associates Defendants’ respective demurrers in their entirety.

On February 14, 2023, Plaintiffs filed a Second Amended Complaint (“SAC”), alleging 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 February 21, 2023, Plaintiffs filed a notice of errata to the SAC. The first and third causes of action of the SAC are alleged against all Defendants, and the second and fourth causes of action of the SAC are alleged against just the Ohana Defendants.

The Ohana Defendants now demur to the second, third, and fourth causes of action of the SAC. Plaintiffs oppose.

The Marks and Associates Defendants demur to the first and third causes of action of the SAC. Plaintiffs oppose.

The Court grants the Marks and Associates Defendants’ amended request for judicial notice as to Exhibits 1 and 2. By reviewing the motion to consolidate filed herein, the Court was able to determine that Exhibit 2 to the request for judicial notice reflects Exhibit 1 to the Chorny Declaration in support of Plaintiffs’ motion for consolidation filed on 11/8/22.

The Court denies the Ohana Defendants’ request for judicial notice filed in support of the reply. The Court notes that “¿[t]he general rule of motion practice…is that new evidence is not permitted with reply papers.¿” (¿Jay v. Mahaffey¿(2013) 218 Cal.App.4th 1522, 1537¿.)

As an initial matter, the Court notes that the Court’s January 25, 2023 Order regarding Defendants’ demurrers to the FAC provides, inter alia, that “[t]he 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…” (Order at p. 13.)

Thereafter, Plaintiffs filed the operative SAC on February 14, 2023. On February 21, 2023, Plaintiffs filed a “Notice of Errata to Plaintiffs’ Second Amended Complaint.” The notice of errata indicates, inter alia, “Plaintiffs’ Second Amended Complaint changed one paragraph to the Third cause of Action of the First Amended Complaint, numbered 49. However, inadvertently the line 49 of the Second Amended Complaint was not changed in the [sic] filed to the court and served copy of the Second Amended Complaint.” (Notice at p. 2:5-9.)

The Ohana Defendants’ counsel’s declaration in support of the instant demurrer indicates, inter alia, that “[u]pon receiving the SAC, Defendants attempted to meet and confer with [Plaintiff’s counsel]” and that “[d]uring the telephonic meet and confer, [the Ohana Defendants’ counsel] put [Plaintiffs’ counsel] specifically on notice that despite Defendants’ demurrer being granted on all grounds, Plaintiffs had failed to amend their 3rd cause of action. In response, [Plaintiffs’ counsel] not only acknowledged the fact that she intended not to amend said cause of action, but also, defended this action by claiming that our demurrer had not been granted and thus, there was no need to amend the facts in the 3rd cause of action.” (Lavaee Decl., ¶ 3.) The Ohana Defendants’ counsel states that “on the same day as [the parties’] meet and confer, Plaintiffs filed a Notice of Errata to the SAC, claiming that they had inadvertently filed the wrong version of the SAC, which coincidentally sought to add new allegations to the 3rd cause of action.” (Ibid.)

The Ohana Defendants accordingly object to Plaintiffs’ notice of errata. The Court agrees with the Ohana Defendants that through the notice of errata, Plaintiffs appear to be attempting to file another amended complaint outside of the 14-day period prescribed by the Court’s January 25, 2023 Order. Plaintiffs did not obtain leave to amend to file a third amended complaint. Accordingly, the Court sustains the Ohana Defendants’ objection to Plaintiffs’ “Notice of Errata to Plaintiffs’ Second Amended Complaint.”

In the SAC, Plaintiffs allege that Chorny is the owner of the business Dad and Me Auto Repair located at 13300 Burbank Boulevard, Sherman Oaks, California (the “Subject Property”). (SAC, ¶ 1.) Plaintiffs allege that the Trust was an owner of the Subject Property until August 24, 2021. (SAC, ¶ 5.)

On March 8, 2021, Becca Paredes (“Paredes”) of Marks and Associates received a third-party offer for sale of the Subject Property. (SAC, ¶ 13.) Under the 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. (SAC, ¶ 14, Ex. 2.)

On June 4, 2021, Paredes sent an email to Chorny indicating, inter alia, “[t]he purchase price is $1,350,000…We please need to have a preapproval letter from your lender for the purchase price of $1,350,000 by Tuesday June 8th…” (SAC, ¶ 15, Ex. 3.) On June 5, 2021, Chorny sent an email to Paredes indicating, inter alia, “[t]his is to confirm that we, Eugene Chorny & Irina Ermakova Partnership, are executing our right to purchase the real property our business has been occupying at above mentioned address for the agreed price of $1,350,000. We have engaged 2 competing institutional lenders to provide the best available purchase money loan, and are currently drafting the purchase agreement for your review and acceptance…” (SAC, ¶ 16, Ex. 4.)

Plaintiffs allege that “[t]he Trust, nevertheless, had continued to exercise a third-party offer and completed the Phase I of the Environmental Report regardless of the [P]laintiffs univocal intent to exercise their right of first refusal.” (SAC, ¶ 17.)

On June 23, 2021, Paredes emailed Plaintiffs a Notice of Sale and informed Chorny that he “needed to provide the Trust with a lender’s letter of approval immediately, or decline to buy, otherwise, their lease will not be extended.” (SAC, ¶¶ 18-19, emphasis omitted.) Plaintiffs allege that “[n]ot being able to provide a loan approval within a such short time,” Chorny wrote an email to Paredes on June 29, 2021 indicating, 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…” (SAC, ¶ 19, Ex. 6.)

On June 30, 2021, Ohana, Chorny’s former customer and friend, “offered to help with the sale buying the property together, as partners.” (SAC, ¶ 20.)

On July 1, 2021, Plaintiffs received the approval from the lender and called Paredes to inform her of this development. (SAC, ¶ 21.) Paredes responded on July 1, 2021 in an email to Chorny stating, inter alia, “[w]e will need to consult with our attorney because you did miss the Right of First Refusal deadline and we signed escrow paperwork with the other buyers.” (SAC, ¶ 21, Ex. 8.) Plaintiffs contend that the “offer was accepted three months prior and the buyer had been performing inspections since.” (SAC, ¶ 21.)

On July 2, 2021, Ohana sent an email to Paredes informing her that “as communicated to you yesterday” Ohana and Chorny were “able & willing to purchase said property at its full price,” and signed the email with the names Chorny and Ohana. (SAC, ¶ 22, Ex. 9.) On the same date, Chorny emailed Paredes asking her to ignore Ohana’s email, informing her that he did not authorize Ohana to represent him. (SAC, ¶ 23, Ex. 10.)

Plaintiffs allege that on or about August 5, 2021, a “first third-party buyer” cancelled the sale because the Trust decided not to proceed with “the Phase II of Environmental report.” (SAC, ¶ 25.)

Plaintiffs also allege that they were not informed about a new third-party offer from Tamim, and had not received a Notice of Sale regarding the same. (SAC, ¶ 27.) Plaintiffs allege that this violated the subject Addendum (Right of First Refusal to Purchase), which provides, inter alia, “[i]n the event that Lessee declines to exercise its right of first refusal after receipt of the Notice of Sale, and thereafter, the proposed transfer or sale is not consummated, the Lessee’s right of first refusal shall apply to any subsequent transaction…” (SAC, ¶ 27, Ex. 2, ¶ 55(d).)

In the end of August of 2021, Ohana and “Mr. Cohen” visited Plaintiffs’ shop, and explained that they bought the Subject Property. (SAC, ¶ 29.)

“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].)

In support of the second cause of action for fraud, Plaintiffs allege that “Ohana represented to the plaintiffs that they will be buying the property together,” and that “Ohana’s representation was false.” (SAC, ¶¶ 39-40.) The Ohana Defendants assert, inter alia, that the fraud cause of action must fail because the SAC does not sufficiently allege that Ohana made a false representation.

More specifically, the Ohana Defendants assert that Ohana allegedly performed his alleged promise to “help” purchase the Subject Property with Plaintiffs. (SAC, ¶ 20.) Indeed, as the Ohana Defendants note, Plaintiffs allege that on June 30, 2021 Ohana emailed Paredes indicating, inter alia, “[m]y name is Samuel Ohana [sic] am a real estate broker…and I’m related to Eugene Chorny…The owners of said building have offered to sell it to Eugene Chorny…for the price of $1,350,000.00…Now Eugene Chorny the tenant together with his relative Samuel Ohana are able and willing to exercise this offer to buy said building for said price of $1,350.000.00...” (SAC, ¶ 41, Ex. 7.) Ohana also allegedly emailed Paredes on July 2, 2021, indicating, inter alia, “[j]ust as communicated to you yesterday by Mr. Eugene Chorny that we are able & willing…to purchase said property at its full price…” (SAC, ¶ 41, Ex. 9)

Plaintiffs do not appear to address this point in the opposition. As the Ohana Defendants note, Plaintiffs do not allege that Ohana agreed to never purchase the Subject Property, or that he agreed to never purchase the Subject Property without Plaintiffs’ involvement.

The Ohana Defendants also assert that Plaintiffs admit that they did not justifiably rely on Ohana’s alleged misrepresentation. Indeed, Plaintiffs allege that Ohana falsely represented to Plaintiffs that they would be buying the Subject Property together. (SAC, ¶¶ 39, 40.) However, Plaintiffs also allege that Chorny corrected Ohana’s alleged statement to Paredes that Ohana and Chorny were willing to purchase the Subject Property. (SAC, ¶¶ 22-23.)

Plaintiffs also allege that “[r]elying on Ohana’s promises that he will help Chorny with the sale, Chorny provided Ohana with Becca’s email and the information about the sale. Instead, Ohana used Eugene’s position to obtain the knowledge, to change his own and Tamim’s position and to purchase the property with Tamim, LLC, behind Plaintiffs’ back, infringing on the Plaintiffs’ lawful right to acquire the property and keep their business.” (SAC, ¶ 43.) Plaintiffs assert that “[t]he complaint alleged that Defendant Ohana misrepresented the fact of his intent to buy the property with the Plaintiffs. The purpose of misrepresentation was to obtain the contact information of the seller which was not available otherwise…” (Opp’n at p. 11:1-4.) As the Ohana Defendants note, the SAC does not allege that the seller’s information was not otherwise available.

The Ohana Defendants also contend that “[a]ny claim by Plaintiffs that they relied on Ohana in connection with the Property after judicially admitting that Ohana did not represent them is objectively unreasonable.” (Demurrer at p. 15:20-22.) Plaintiffs do not address this point in the opposition. The Court agrees with the Ohana Defendants that Plaintiffs allegations in the SAC do not adequately demonstrate Plaintiffs’ “justifiable reliance” on Ohana’s alleged representation that they would be buying the Subject Property together. (SAC, ¶ 39.) As discussed, Plaintiffs admit Chorny corrected Ohana’s alleged representation to Paredes that Ohana and Chorny would be willing to purchase the Subject Property by telling Paredes to ignore Ohana’s email. (SAC, ¶¶ 22-23, Exs. 9-10.) The Court thus does not see how Plaintiffs justifiably relied on Ohana’s alleged representation to Plaintiffs that “they will be buying the property together.” (SAC, ¶ 39.)

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

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.”

The Ohana Defendants assert that the third cause of action must fail because Plaintiffs “do not have an interest in the controversy or some particular right to be preserved or protected. Plaintiffs are not seeking title to the Property.” (Demurrer at p. 17:26-28.) In the prayer for relief, 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.” (SAC, p. 15:16-17.) The Ohana Defendants cite to Holmes v. Cal. Nat. Guard (2001) 90 Cal.App.4th 297, 315, where the Court of appeal noted that “[t]o 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.” (Internal quotations and citations omitted.) In the opposition, Plaintiffs assert that their “property right warrant [sic] their standing.” (Opp’n at p. 13:21-22.) However, to the extent Plaintiffs are contending that such property right is their lease of the Subject Property, Plaintiffs allege that “on or about May of 2022, Plaintiffs received a Notice of Termination of Lease, signed by Samuel Ohana of Tamim, LLC.” (SAC, ¶ 29.)

The Ohana Defendants also assert that “Plaintiffs have failed and cannot demonstrate that they will be injured if the grant deed is not canceled. Plaintiffs’ damages are allegedly a result of losing their business because the Lease will not be renewed, and not because the Lessor sold the Property to Tamim, LLC.” (Demurrer at p. 18:4-6.) Indeed, Plaintiffs allege that they “seek cancellation of the Grand [sic] Deed which was obtained by fraud by Defendants Ohana and Tamim and will continue to cause serious injury to Plaintiffs by cancelling, among other things, his business, good will and his livelihood.” (SAC, ¶ 49.) Plaintiffs do not respond to this point in the opposition.

Lastly, the Ohana Defendants assert that the third cause of action is “based on a claim that Defendants obtained the grant deed by fraud,” and “Plaintiffs have failed to state facts sufficient to plead fraud.” (Demurrer at p. 17:22-24.) As set forth above, the Court sustains the Ohana Defendants’ demurrer to the second cause of action for fraud.

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

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.)

In support of the fourth cause of action, Plaintiffs allege that “Defendants have known of Plaintiffs’ First Right of Refusal, placing the Plaintiffs in the first position to purchase the Property and of the Plaintiffs’ desire and true intent to acquire the Property. Defendants, nevertheless, maliciously disregarded the Plaintiffs’ rights, taking this opportunity from the Plaintiffs, depriving the Plaintiffs of receiving the benefits from the property, including, without limitation, operating his business, refinancing, sale, or other use and/ or disposition of the Property.” (SAC, ¶ 52.)

The Ohana Defendants assert that Plaintiffs’ fourth cause of action must fail. They assert that “Plaintiffs have judicially admitted that they declined the [right of first refusal] as it related to the First Transaction days before Defendants were aware of the sale of the Property. As such, this ‘prospective economic advantage’ was extinguished by Plaintiffs once they declined to exercise their option to match the terms set forth in the Notice of Sale.” (Demurrer at p. 19:2-5.)

As set forth above, Plaintiffs attach as Exhibit 2 to the SAC an Addendum with the title “Right of First Refusal to Purchase.” (SAC, ¶ 14, Ex. 2) 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).)

Plaintiffs allege that on June 23, 2021, Paredes “emailed the plaintiffs a Notice of Sale.” (SAC, ¶¶ 18-19.) 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…” (SAC, ¶ 19, Ex. 6.) 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.

As set forth above, Plaintiffs now also allege that “Plaintiffs were not informed about a new third-party offer from Tamim, neither they had received a Notice of Sale in a direct violation of the plaintiffs right of first refusal…” (SAC, ¶ 27.) Plaintiffs allege that this violated the subject Addendum (Right of First Refusal to Purchase), which provides, inter alia, “[i]n the event that Lessee declines to exercise its right of first refusal after receipt of the Notice of Sale, and thereafter, the proposed transfer or sale is not consummated, the Lessee’s right of first refusal shall apply to any subsequent transaction…” (SAC, ¶ 27, Ex. 2.)

As to this second transaction, the Ohana Defendants assert that “[w]ithout the Notice of Sale, there was nothing for Plaintiffs to exercise and no prospective economic advantage or relationship to be interfered with by Defendants.” (Demurrer at p. 19:7-9.)

The Ohana Defendants also assert that they could not interfere with Plaintiff’s right of first refusal to purchase the Subject Property, because any such right could only be exercised during the “original term” of the lease, which ended in 2015.

As set forth above, Plaintiffs attach the Addendum to the SAC. (SAC, ¶ 14, Ex. 2.) The Addendum provides, inter alia, 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…” (Id., ¶ 55(a), emphasis added.) The Addendum is dated July 1, 2005. (SAC, ¶ 14, Ex. 2.) The Ohana Defendants further note that Plaintiffs attach a “Declaration of Eugene Chorny” to the SAC. Mr. Chorny’s Declaration alleges, inter alia, that “[m]y wife Irina Ermakova and I are the business owners of the auto shop Dad and Me Auto, located at 13300 Burbank Blvd, Sherman Oaks, California, 91401. We opened out [sic] business at this location and signed the lease with the owners, The Barbara Willa Johanna Katt Living Trust in June of 2005. The lease was for ten years with the option to extend. We extend the lease in 2015 and then in 2017. In 2015, the Lease was amended with the First Right of Refusal.” (Emphasis added.)

The Ohana Defendants assert that due to the language in the 2005 Addendum referring to “Original Term of this Lease,” the lessor was only required to provide a Notice of Sale to Plaintiffs for any third purchase that it was willing to accept from 2005 to 2015. (Demurrer at p. 7:10-11.) As set forth above, Mr. Chorny’s declaration attached to the Complaint alleges that the lease was for ten years. The Ohana Defendants assert that given that both of the transactions alleged in the SAC occurred after 2015 and after the expiration of the “Original Term,” Plaintiffs no longer had a right of first refusal per the terms of the Addendum and the lease.

In the opposition, Plaintiffs assert that “Plaintiffs lawfully exercised their right under the Option to extend the lease, they were not holdover tenants. The letter from Marks and Associates clearly indicated that the lease was extended until June 30, 2022.” (Opp’n at p. 6:1-4, emphasis omitted.) However, this does not address the Ohana Defendants’ point that the Addendum references obligations pertaining to the “Original Term” of the lease. Moreover, Plaintiffs’ rely on an exhibit attached to the opposition in support of the foregoing argument. As discussed, “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., supra, 116 Cal.App.4th at p. 994 [internal citations omitted].) Plaintiffs do not appear to point to any allegation of the SAC indicating that their right of first refusal was extended outside of the “Original Term” of Plaintiffs’ lease.

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

In support of the first cause of action for breach of covenant of good faith and fair dealing, Plaintiffs allege that “Defendants Trust and Marks and Associates failed to inform Plaintiffs, within a reasonable time, about a first third-party offer, which the owner accepted in March of 2021, but the Notice of Sale was provided to Plaintiffs in June of 2021, intentionally forcing the plaintiffs to decline their right by not given them sufficient time to obtain the loan.” (SAC, ¶ 33, internal emphasis omitted.)

Plaintiffs also allege that “Defendants Trust and Marks and Associates grossly failed to inform Plaintiffs about a second third-party offer from Tamim, LLC or provide them with a Notice of Sale, as required under the contract, thus, egregiously depriving the plaintiffs of the opportunity to exercise their right of first refusal, even though the plaintiffs fully performed their part under the contract.” (SAC, ¶ 34.)

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. 9:23-25.) As discussed above in connection with the Ohana Defendants’ demurrer, Plaintiffs allege in connection with the first transaction that on June 29, 2021, two days after the June 27, 2021 deadline, Plaintiffs declined to exercise their right of first refusal to purchase at that time. (SAC, ¶¶ 18-19.)

The Marks and Associates Defendants also assert that “[t]he Addendum to the lease attached as Exhibit 2 to the SAC states that Defendants could not, at any time prior to the expiration of the ‘Original Term of the Lease,’ sell the Property without first giving written notice to the Plaintiffs. The pleadings show that the original term of the lease expired in 2015 or 2020 based on the Option to Extend. Based upon the pleadings, there was no right to exercise the option to buy in 2021.” (Demurrer at p. 10:3-7.) As set forth above, Plaintiffs do not allege that the “Right of First Refusal to Purchase” set forth in the July 1, 2005 Addendum was extended beyond the “Original Term” of the Lease. As also discussed above, the “Declaration of Eugene Chorny” attached to the SAC alleges that Plaintiffs signed the lease in June of 2005 and that “[t]he lease was for ten years with the option to extend. We extend [sic] the lease in 2015 and then in 2017. In 2015, the Lease was amended with the First Right of Refusal.”

In their opposition to the Marks and Associates Defendants’ demurrer, Plaintiffs cite to an exhibit attached to the opposition in support of the assertion that Plaintiffs were entitled to a right of first refusal in 2021. (Opp’n at p. 6:1-11.) As discussed, “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., supra, 116 Cal.App.4th at p. 994 [internal citations omitted].)

The Marks and Associates Defendants also note that Plaintiffs allege that on July 29, 2021, Chorny email Paredes, “[u]nfortunately, my financial situation does not allow me to purchase the property at this time…” (SAC, ¶ 19, Ex. 6.) The Marks and Associates Defendants assert that “[t]his intentional relinquishment or abandonment of a known right constituted a waiver of the right of first refusal.” (Demurrer at p. 10:15-16.) The Marks and Associates Defendants cite to 30 Cal. Jur. 3d Estoppel and Waiver § 1, which provides, inter alia, “[e]quitable estoppel precludes a party from asserting rights the party otherwise would have had against another when the party’s own conduct renders the assertion of those rights contrary to equity.” (Jarboe v. Hanlees Auto Group (2020) 53 Cal.App.5th 539, 555.) Plaintiffs do not address this point in their opposition.

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

As argued in their demurrer to the FAC, the Marks and Associates Defendants again 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. 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.” (SAC, p. 15:16-17.) In the opposition, Plaintiffs concede that the third cause of action should be dismissed as to the Marks and Associates Defendants, as they state, “an action for cancellation of deed against Defendant Marks and Associates and Katt Trust should be dismissed.” (Opp’n at p. 11:12-15.)

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

Based on the foregoing, the Ohana Defendants’ demurrer to the second, third, and fourth causes of action of the SAC is sustained in its entirety. The Court sustains the demurrer without leave to amend because the Court previously sustained the Ohana Defendants’ demurrer to these cause of action in the FAC (See January 25, 2023 Order), and because Plaintiffs have not proffered any basis for such amendment.

In addition, the Marks and Associates Defendants’ demurrer to the first and third causes of action is sustained in its entirety. The Court sustains the demurrer without leave to amend because the Court previously sustained the Marks and Associates Defendants’ demurrer to these cause of action in the FAC (See January 25, 2023 Order), and because Plaintiffs have not proffered any basis for such amendment.

The Court orders the Ohana Defendants to file their answer to the SAC within 10 days of this Order.¿As set forth above, the first cause of action of the SAC is alleged against all Defendants, and the Ohana Defendants do not demur to this cause of action.

The Court orders the Marks and Associates Defendants to file and serve a proposed judgment of dismissal within 30 days of the date of this Order.

[1]The first cause of action of the FAC 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]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
	Hearing Date:	April 12, 2023
	Hearing Time:	2:00 p.m.
	[TENTATIVE] ORDER RE: DEFENDANTS SAMUEL OHANA AND TAMIM, LLC’S DEMURRER TO PLAINTIFFS SECOND AMENDED COMPLAINT; DEMURRER BY DEFENDANTS THE BARBARA WILLA JOHANNA KA TT LIVING TRUST AND MARKS & ASSOCIATES, AN ACCOUNTANCY CORPORATION, TO PLAINTIFF'S SECOND AMENDED COMPLAINT

Superior Court of California

County of Los Angeles

Department 50