Judge: Teresa A. Beaudet, Case: 23STCV08473, Date: 2023-11-27 Tentative Ruling

Case Number: 23STCV08473    Hearing Date: April 11, 2024    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

On April 17, 2023, Plaintiff Lawrence Adams (“Plaintiff”) filed this action against Defendants Neutral Ground, Corey Sims (“Sims”), City of Los Angeles, and Los Angeles Housing Department. The Complaint alleged causes of action for (1) abuse of process, (2) “Civil Code § 1714(A) (Negligence and Duty of Care)” (3) “Govt. Code § 814 (Breach of Contract)” (4) “Govt. Code § 815.2 (Government Entity Respondeat Superior Liability…)” (5) declaratory relief, (6) civil conspiracy, (7) replevin, (8) breach of an express contract, (9) deceit based on concealment, (10) conversion, (11) promissory fraud, (12) negligence, and (13) promissory estoppel/detrimental reliance.[1] 

City of Los Angeles (the “City”) demurred to each of the causes of action of the Complaint. On November 27, 2023, the Court issued a minute order sustaining the City’s demurrer to each of the causes of action of the Complaint, with leave to amend.

On December 15, 2023, Plaintiff filed a First Amended Complaint (“FAC”), alleging causes of action for (1) declaratory relief, (2) breach of contract, (3) breach of the implied covenant of good faith and fair dealing, and (4) common counts-account stated. The first and fourth causes of action of the FAC are alleged against the City.

The City now demurs to the first and fourth causes of action of the FAC. Plaintiff opposes. 

Request for Judicial Notice

The Court grants the City’s request for judicial notice.

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 FAC

In the FAC, Plaintiff alleges, inter alia, that on or about November 18, 2005, Neutral Ground, Inc. was granted title to real property known as 5972 S. Normandie Avenue, Los Angeles, CA 90044 (herein, the “Normandie Property”). (FAC, ¶ 7.) On or about June 12, 2012, Neutral Ground “conveyed title to Corey Sims to the [Normandie Property]…” (FAC, ¶ 8.) “On or about February 19, 2016 Corey Sims conveyed title to [Plaintiff] to the [Normandie Property]…” (FAC, ¶ 9.) Plaintiff further alleges that “[o]n or about November 17, 2021 a grant deed conveyed title to [Plaintiff] to the [Normandie Property]…” (FAC, ¶ 10.)

            Plaintiff alleges that “[d]ue to certain building deficiencies the subject property was placed in the REAP program with the City of Los Angeles Housing Department. All rent now would be paid directly into a REAP Account and would not be disbursed back to the landlord until the repairs were made and approved upon review by various agencies of the City of Los Angeles.” (FAC, ¶ 15.) Plaintiff alleges that “this REAP money is his money as it was collected during his period of ownership.” (FAC, ¶ 16.)

            Plaintiff further alleges that “Neutral Ground and Sims and [Plaintiff] agreed to settle and resolve the controversies between them as to the Normandie Property in exchange for a total payment of $30,000 by Defendants Neutral Ground and execution of reconveyance or deed revesting title in Sims as to the Normandie Property by [Plaintiff].” (FAC, ¶ 19.) Plaintiff alleges that he “is entitled to this money collected by REAP because all parties signed the settlement agreement permitting and assenting to [Plaintiff] receiving all back rent.” (FAC, ¶ 21.) Plaintiff alleges that “all defendants are refusing to distribute these funds to Plaintiff Adams.” (FAC, ¶ 22.) Plaintiff further alleges that he “seeks an injunctive order that the City of Los Angeles REAP program office send the payment to his address and should not be split up by any other party.” (FAC, ¶ 24.)

C.    Fourth Cause of Action for Common Counts – Account Stated

In the fourth cause of action for common counts – account stated, Plaintiff alleges that “certain REAP funds have been collected by the REAP Program and…these funds are now in dispute as to [sic] its rightful owner is.” (FAC, ¶ 46.) Plaintiff alleges that he “is entitled to all REAP funds and Defendant Sims differs with this position.” (FAC, ¶ 47.) Plaintiff alleges that “defendant owes Plaintiff these REAP funds from previous rent collected.” (FAC, ¶ 49.)

In the demurrer, the City argues, inter alia, that Plaintiff’s “account stated cause of action…fails because he still has not alleged compliance with California’s Tort Claims Act.” (Demurrer at p. 5:2-3.) As noted in the Court’s November 27, 2023 minute order on the City’s demurrer to Plaintiff’s original Complaint, in State of California v. Superior Court (2004) 32 Cal.4th 1234, 1239, the California Supreme Court noted as follows:

“Under [Government Code] section 911.2, ‘[a] claim relating to a cause of action for death or for injury to person or to personal property … shall be presented as provided in Article 2 (commencing with Section 915) of this chapter not later than six months after the accrual of the cause of action.’ Section 945.4 then provides that ‘no suit for money or damages may be brought against a public entity on a cause of action for which a claim is required to be presented in accordance with Chapter 1 (commencing with Section 900) and Chapter 2 (commencing with Section 910) of Part 3 of this division until a written claim therefor has been presented to the public entity and has been acted upon by the board, or has been deemed to have been rejected by the board, in accordance with Chapters 1 and  2 of Part 3 of this division.’…(Italics added.) Thus, under these statutes, failure to timely present a claim for money or damages to a public entity bars a plaintiff from filing a lawsuit against that entity.” (Emphasis in original.)

In State of California v. Superior Court, the California Supreme Court “conclude[d] that a plaintiff must allege facts demonstrating or excusing compliance with the claim presentation requirement. Otherwise, his complaint is subject to a general demurrer for failure to state facts sufficient to constitute a cause of action.” (State of California v. Superior Court, supra, 32 Cal.4th at p. 1243.)

As noted by the City, Plaintiff’s FAC still does not appear to allege facts demonstrating or excusing compliance with the claim presentation requirement. In the opposition, Plaintiff does not appear to point to any allegations in the FAC concerning Plaintiff’s compliance with the claim presentation requirement. As noted by the City, Plaintiff’s opposition does not argue that Plaintiff presented a government claim to the City.

Rather, Plaintiff argues that “sufficient basis exist [sic] in which Plaintiff has demonstrated sufficient facts to excuse compliance with the claims presentation requirement.” (Opp’n at p. 3.) Plaintiff argues that “between the original filing of the complaint back in April of 2023 as well as Plaintiff prevailing in an ‘attachment hearing’ to obtain a [sic] injunction against the distribution of funds [sic]. That this was [sic] adjudicated by a [sic] impartial body who ruled that plaintiff did have a legitimate gripe against the City of Los Angeles and its Housing Department. And this was achieved without the City of Los Angeles or even the Court at the time concerning the procedural issue of a claim form.” (Opp’n at p. 3.) Plaintiff argues that “Defendants have tried to put up a shield that this Demurrer and prior Compliant filed have no standing to move forward because a claim form was not initially filed with the City of Los Angeles. Yet given this action is nearly a year old and Plaintiff was successful in an [sic] restraining order to prevent the distribution of funds, Plaintiff has demonstrated sufficient evidence to justify the non-compliance with this requirement.” (Opp’n at p. 1.) However, Plaintiff does not cite any legal authority demonstrating that such circumstances excuse Plaintiff’s compliance with the claim presentation requirement.[2] As discussed, “a plaintiff must allege facts demonstrating or excusing compliance with the claim presentation requirement. Otherwise, his complaint is subject to a general demurrer for failure to state facts sufficient to constitute a cause of action.” (State of California v. Superior Court, supra, 32 Cal.4th at p. 1243.)[3]

The City also asserts that “Plaintiff cannot allege an account stated common count against the City.” (Demurrer at p. 6:12.) The City cites to Zinn v. Fred R. Bright Co. (1969) 271 Cal.App.2d 597, 600, where the Court of Appeal noted that “[t]he essential elements of an account stated are: (1) previous transactions between the parties establishing the relationship of debtor and creditor; (2) an agreement between the parties, express or implied, on the amount due from the debtor to the creditor; (3) a promise by the debtor, express or implied, to pay the amount due.” The City asserts that Plaintiff’s “common counts-account stated” cause of action fails because Plaintiff “has identified no agreement between him and the City or any previous transactions demonstrating that the City owes [Plaintiff] any amount of ‘debt.’” (Demurrer at p. 6:20-21.) In the opposition, Plaintiff asserts that “this cause of action is appropriate the City owes the money to the party who got the party out of REAP.” (Opp’n at p. 5.) But Plaintiff does not appear to point to any allegations in the FAC demonstrating any “previous transactions between the parties establishing the relationship of debtor and creditor,” or “an agreement between the parties, express or implied, on the amount due from the debtor to the creditor.” (Zinn v. Fred R. Bright Co., supra, 271 Cal.App.2d at p. 600.)

In light of the foregoing, the Court sustains the City’s demurrer to the fourth cause of action for common counts – account stated.  

D.    First Cause of Action for Declaratory Relief

The City also asserts that declaratory relief is not a proper cause of action against the City. In the first cause of action for declaratory relief, Plaintiff alleges, inter alia, that “a Settlement Agreement and General Release Agreement was singed [sic] by Adams, Sims and Neutral Grounds which included a signed addendum that [Plaintiff] was to collect all back rents from the property, 5972 Normandie Avenue, Los Angeles, CA 90044.” (FAC, ¶ 30.) Plaintiff alleges that “[t]he City of Los Angeles seeks to pay all remaining REAP fuds [sic] to Sims as well which is counter to this agreement.” (FAC, ¶ 32.) Plaintiff alleges that he requests “a judicial declaration as to the issue of damages, contribution and indemnification and who should get the REAP monies held by the agency.” (FAC, ¶ 33.) 

The City asserts that “[d]eclaratory relief is not the appropriate vehicle for judicial review of the administrative actions that [Plaintiff] challenges—that is, the decision to place the Normandie Property in REAP and [the Los Angeles Housing Department’s] actions with the REAP escrow account.” (Demurrer at p. 5:21-23.)

The City again cites to State v. Superior Court (1974) 12 Cal.3d 237, 249, where the California Supreme Court found that “[i]t is settled that an action for declaratory relief is not appropriate to review an administrative decision. Veta’s attempt in the third cause of action to obtain review of the Commission’s denial of the permit by means of declaratory relief is improper, and the demurrer should have been sustained insofar as Veta alleged that it met the requirements for issuance of the permit and that the Commission lacked jurisdiction to hear the appeal from the decision of the regional commission.” (Internal citations omitted.) The City also cites to Tri-County Special Educ. Local Plan Area v. County of Tuolumne (2004) 123 Cal.App.4th 563, 576, where the Court of Appeal noted that “[t]he declaratory relief provisions do not independently empower the courts to stop or interfere with administrative proceedings by declaratory decree.” In the opposition, Plaintiff does not address the foregoing legal authority.  

The City also assert that “[e]ven if [Plaintiff] were not barred from proceeding based on the above, his declaratory relief action fails as a matter of law.” (Demurrer at p. 6:4-5.) The City cites to Los Angeles Municipal Code section 162.08, which concerns “Termination of REAP,” and provides, inter alia, that “[a]ny escrow funds remaining after the expenditures as provided herein, and upon City Council removing the Property from REAP, shall be returned to the property owner who owned the property at the time the City Council authorizes the termination of the escrow account. The Department shall refund any remaining escrow account balance to the property owner recorded with the Los Angeles County Recorder’s Office.” (City’s RJN, Ex. A, Los Angeles Mun. Code, § 162.08, subd. D.)

The City asserts that here, Plaintiff “admits he was not the property owner at the time the Normandie Property was released from REAP.” (Demurrer at p. 6:9-10.) The City points to paragraph 23 of the FAC, which alleges that “Plaintiff is no longer on title as due to the settlement agreement entered into in December of 2022, he came off title as required by the settlement terms and as a consequence he would not be on title on the day of distribution.” (FAC, ¶ 23.) In the opposition, Plaintiff does not appear to dispute that he admits in the Complaint that he was not the property owner at the time the Normandie Property was released from REAP.        

Based on the foregoing, the Court sustains the City’s demurrer to the first cause of action for declaratory relief.

Conclusion

Based on the foregoing, the Court sustains the City’s demurrer to the first and fourth causes of action of the FAC.

As set forth above, the Court sustained the City’s demurrer in its entirety as to the original Complaint. In addition, Plaintiff has not demonstrated any way that he could amend the first and fourth causes of action of the FAC to alleviate the issues discussed above. Accordingly, the Court finds that it is appropriate to sustain the instant demurrer without leave to amend. 

The Court orders the City to file and serve a proposed judgment of dismissal within 30 days of the date of this order. (¿Donald v. Cafe Royale, Inc. (1990) 218 Cal.App.3d 168, 186 [“An order sustaining a demurrer without leave to amend is not a final judgment; a judgment of dismissal follows such an order as a matter of course.”]¿.)¿ 

The City is ordered to give notice of this Order.

DATED:  April 11, 2024       

                        ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court