Judge: Teresa A. Beaudet, Case: 22STCV24084, Date: 2023-02-17 Tentative Ruling

Case Number: 22STCV24084    Hearing Date: February 17, 2023    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

On July 26, 2022, Plaintiff Houman Reyhanian (“Plaintiff”) filed this action against Defendants Joyce Moussouros (“Moussouros”) and Ares Management (jointly, “Defendants”). The Complaint asserts one cause of action for breach of contract.

Moussouros now demurs to the first cause of action for breach of contract. Plaintiff opposes.

Discussion  

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 Complaint

In the Complaint, Plaintiff alleges that on or about November 22, 2019, a written agreement was made between Defendants as the lessors and Plaintiff as the lessee. (Compl.,        ¶ BC-1.) Plaintiff leased premises located at 1331 S. Los Angeles Street, Los Angeles, California 90015 (the “Premises”). (Compl., Attachment BC-2.)

On or about May 1, 2022, a fire erupted at the building next door to the Premises. (Compl., Attachment BC-2.) Following the fire, the exterior entrances to the Premises were breached and accessible to third parties. (Ibid.) Pursuant to Plaintiff’s lease with Defendants, Defendants were required to maintain the integrity and security of the exterior portions of the Premises at all times. (Ibid.) Despite notice, Defendants failed to fulfill this duty and allowed the Premises to remain open and unsecured. (Ibid.) Plaintiff alleges that as a proximate result of Defendants’ breach of their duties under the lease, unknown third parties entered the Premises and took Plaintiff’s property including inventory and other personal property in the sum of $336,739.43, or according to proof. (Ibid.)

C.    First Cause of Action for Breach of Contract

Moussouros asserts that the first cause of action for breach of contract fails because the subject lease precludes her from liability for Plaintiff’s stolen property. A copy of the alleged lease agreement is attached as Exhibit A to Plaintiff’s Complaint. (Compl., ¶ BC-1, Ex. A.) Moussouros notes that Paragraph 8.8 of the lease provides as follows:

“8.8 Exemption of Lessor from Liability. Lessor shall not be liable for injury or damage to the person or goods, wares, merchandise or other property of Lessee, Lessee’s employees, contractors, invitees, customers, or any other person in or about Premises, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC, or lighting fixtures, or from any other cause, whether the said injury or damage results from conditions arising upon the Premises or upon other portions of the Building, or from other sources or places. Lessor shall not be liable for any damages arising from any act or neglect of any other tenant of Lessor nor from the failure of Lessor to enforce the provisions of any other lease in the Project. Notwithstanding Lessor’s negligence or breach of this Lease, Lessor shall under no circumstances be liable for injury of Lessee’s business or for any loss of income or profit therefrom.” (Compl., ¶ BC-1, Ex. A, emphasis added.)

Moussouros asserts that Paragraph 8.8 accordingly absolves her of liability for injury or damage to Plaintiff’s property, “whether the said injury or damage results from conditions arising upon the Premises or upon other portions of the Building, or from other sources or places.” (Compl., ¶ BC-1, Ex. A, ¶ 8.8.) As set forth above, Plaintiff alleges in the Complaint that “[a]s a proximate result of Defendants’ breach of their duties under the lease, unknown third parties entered the Premises and took Plaintiff’s property including inventory and other personal property in the sum of $336,739.43, or according to proof.” (Compl., Attachment BC-2.)

In the opposition, Plaintiff notes that Paragraph 7.2 of the lease provides as follows:

“7.2 Lessor’s Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 4.2 (Common Area Operating Expenses), 6 (Use), 7.1 (Lessee’s Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessor, subject to reimbursement pursuant to Paragraph 4.2, shall keep in good order, condition and repair the foundations, exterior walls, structural condition of interior bearing walls, exterior roof, fire sprinkler system, Common Area fire alarm and/or smoke detection systems, fire hydrants, parking lots, walkways, parkways, driveways, landscaping, fences, signs and utility systems serving the Common Areas and all parts thereof, as well as providing the services for which there is a Common Area Operating Expense pursuant to Paragraph 4.2. Lessor shall not be obligated to paint the exterior or interior surfaces of exterior

walls nor shall Lessor be obligated to maintain, repair or replace windows, doors or plate glass of the Premises. Lessee expressly waives the benefit of any statute now or hereafter in effect to the extent it is inconsistent with the terms of the Lease.” (Compl., ¶ BC-1, Ex. A, ¶ 7.2.)

Plaintiff asserts that “[s]ection 8.8 is NOT included in the Paragraph 7.2 list of exclusions of Lessor’s Obligations…” (Opp’n at p. 6:5-6.) However, the Court agrees with Moussouros that Paragraph 7.2 does not list “exclusions” of the lessors’s obligations, rather, it lists provisions to be read in concert with Paragraph 7.2 related to the lessor’s obligations under the lease (i.e., “[s]ubject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 4.2 (Common Area Operating Expenses), 6 (Use), 7.1 (Lessee’s Obligations), 9 (Damage or Destruction), and 14 (Condemnation)…” (Compl., ¶ BC-1, Ex. A, ¶ 7.2.)

Moussouros also counters that Paragraph 7.2 of the lease contemplates Moussouros’s responsibility, as landlord, to maintain the upkeep of the property, not the security of the property. Indeed, Paragraph 7.2 provides that “Lessor…shall keep in good order, condition and repair the foundations, exterior walls, structural condition of interior bearing walls…” (Compl., ¶ BC-1, Ex. A, ¶ 7.2.) In the Complaint, Plaintiff does not allege that Moussouros failed to keep in good order, condition, and/or repair the foundations, exterior walls, or structural condition of interior bearing walls. Rather, Plaintiff alleges that “Lessors, were required to maintain the integrity and security of the exterior portions of the Premises at all times. Despite notice Defendants failed to fulfill this duty and allowed the Premises to remain open and unsecured…” (Compl., Attachment BC-2, emphasis added.)

Plaintiff also contends that Paragraph 7.2 and Paragraph 8.8 of the lease are inconsistent and should be construed against Moussouros, who drafted the lease. However, Plaintiff fails to cite to any legal authority in support of this assertion. Moussouros also notes that “[t]he whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other.” ((Civ. Code, § 1641.)

In the demurrer, Moussouros also notes that Paragraph 8.2(a) of the lease provides in pertinent part:

“Carried by Lessee. Lessee shall obtain and keep in force a Commercial General

Liability policy of insurance protecting Lessee and Lessor as an additional insured

against claims for bodily injury, personal injury and property damage based upon or arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto.” (Compl., ¶ BC-1, Ex. A.)

In addition, Moussouros notes that Paragraph 8.4(a) of the lease provides in pertinent part:

“Property Damage. Lessee shall obtain and maintain insurance coverage on all of

Lessee’s personal property, Trade Fixtures, and Lessee Owned Alterations and Utility Installations. Such insurance shall be full replacement cost coverage with a deductible of not to exceed $1,000 per occurrence. The proceeds from any such insurance shall be used by Lessee for the replacement of personal property, Trade Fixtures and Lessee Owned Alterations and Utility Installations. Lessee shall Provide Lessor with written evidence that such insurance is in force.” (Compl., ¶ BC-1, Ex. A.)

Moussouros asserts that pursuant to paragraphs 8.2 and 8.4 of the lease, Plaintiff was required to obtain and keep current a policy of insurance for claims that arise out of property damage. Moussouros contends that “to the extent that Plaintiff collected proceeds for the stolen property from the insurance policy Plaintiff was required to maintain, the damages sought against Defendant should be reduced by the amount of the collection.” (Demurrer at p. 9:23-25.) The Court finds that this is a factual argument that is not appropriate for demurrer. The purpose of a demurrer is to “test[] the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.)[1]  

In any event, the Court finds that Moussouros has demonstrated that Plaintiff failed to state facts sufficient to constitute a cause of action for breach of contract based on Moussouros’s arguments pertaining to Paragraph 8.8 of the lease. Plaintiff requests that leave to amend be granted in the event the Court sustains the demurrer, “in order to set forth additional facts that the Court may believe lacking, including, but not limited to specifically referring to Paragraph 7.2…” (Opp’n at p. 7:8-11.)

Conclusion

Based on the foregoing, Moussouros’s demurrer to the first cause of action is sustained, with leave to amend.

The Court orders Plaintiff 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 Moussouros to file and serve a proposed judgment of dismissal within 30 days of the date of this order.   

Moussouros is ordered to give notice of this Order.

DATED:  February 17, 2023 

                        ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court