Judge: Theresa M. Traber, Case: 20STCV46144, Date: 2023-04-24 Tentative Ruling

Case Number: 20STCV46144    Hearing Date: April 24, 2023    Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE:     April 24, 2023                        TRIAL DATE: NOT SET

CASE:                         Edward Allen v. Lloyd Kraus et al.

CASE NO.:                 20STCV46144 consolidated with 22STCV18652           

DEMURRER TO COMPLAINT AND MOTION TO STRIKE

MOVING PARTY:               Defendants Lloyd Kraus, an individual, and Electroease Inc. d/b/a Electropedic Beds.

RESPONDING PARTY(S): No response on eCourt as of 4/20/23

CASE HISTORY:

·         12/02/20: Complaint filed in lead case.

·         06/14/21: First Amended Complaint filed in lead case.

·         09/13/21: Second Amended Complaint filed in lead case.

·         06/07/22: Complaint filed by Plaintiff Nancy Allen in this case.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

            This is an action for breach of contract, fraud, product liability, and negligence arising from a defective stair lift.

Defendants demur to the Complaint filed by Nancy Allen in its entirety as it pertains to Lloyd Kraus, and move to strike the prayer for punitive damages in the Complaint.

TENTATIVE RULING:

            Defendants’ Demurrer to the Complaint is SUSTAINED.

            Plaintiff shall have 30 days leave to amend the Complaint.

            Defendants’ Motion to Strike is DENIED AS MOOT.

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DISCUSSION:

Demurrer to Complaint

            Defendants demur to Nancy Allen’s Complaint in its entirety as it pertains to Defendant Lloyd Kraus.

Legal Standard

A demurrer tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) “The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.” (Hahn, supra, 147 Cal.App.4th at p. 747.) The ultimate facts alleged in the complaint must be deemed true, as well as all facts that may be implied or inferred from those expressly alleged. (Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403; see also Shields v. County of San Diego (1984) 155 Cal.App.3d 103, 133 [stating, “[o]n demurrer, pleadings are read liberally and allegations contained therein are assumed to be true”].) “This rule of liberal construction means that the reviewing court draws inferences favorable to the plaintiff, not the defendant.” (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238.)

Meet and Confer

Before filing a demurrer, the demurring party shall meet and confer in person or by telephone with the party who has filed the pleading subject to the demurrer and file a declaration detailing their meet and confer efforts.  (Code Civ. Proc., § 430.41(a).) However, an insufficient meet and confer process is not grounds to overrule or sustain a demurrer.  (Code Civ. Proc., § 430.41(a)(4).)

The declaration of Jennifer A. Schwarz provides little in the way of description of Defendants’ meet and confer efforts beyond a single telephone conversation on June 8, 2022 and a meet-and-confer letter on September 7, 2022. (Declaration of Jennifer A. Schwarz ISO Demurrer ¶¶ 3-4.) Although the declaration refers to “further telephonic meet and confers,” Defendants provide no specifics of how many attempts were made, when those attempts took place, or their duration. This evidence is not sufficient to satisfy Defendants’ meet and confer obligations. Nevertheless, the Court will address the demurrer on its merits.

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Alter Ego

            Defendants contend that the Complaint fails to state facts sufficient to constitute a cause of action against Defendant Kraus as a matter of law with respect to any of the five causes of action asserted against him because the Complaint alleges no facts that would permit Plaintiff to hold Kraus personally liable for the acts of Electroease.

            To hold an owner of a corporation personally liable for the acts of the corporation as an alter ego of the owner, “[f]irst, there must be such a unity of interest and ownership between the corporation and its equitable owner that the separate personalities of the corporation and the shareholder do not in reality exist. Second, there must be an inequitable result if the acts in question are treated as those of the corporation alone.” (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 539.)

Defendants contend that the Complaint makes no effort to allege any facts demonstrating a unity of interest and ownership. A review of the Complaint confirms Defendants’ contention. The Complaint generally treats the Defendants as a unit and does not allege any conduct by Defendant Kraus separate from the contract with Electroease. (See generally Complaint.) Further, Plaintiff does not address the question of unity of interest or ownership between Defendants beyond a boilerplate allegation that Electroease is a fictitious name under which Kraus was doing business. (Complaint ¶¶ 3-4.)  The Complaint also alleges generally that each of the named and fictitious defendants is the alter ego of all the others.  (Id., ¶ 6.) Boilerplate allegations without additional factual allegations in support are insufficient to invoke the alter ego doctrine as a matter of law. (See, e.g., Norins Realty Co. v. Consol. A. & T.G. Co. (1947) 80 Cal.App.2d 879, 883.) That said, a plaintiff need only allege ultimate facts, not evidentiary facts, and may be able to simply allege the existence of relevant factors recognized in case law. (Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 236; Doe v. City of Los Angeles (2007) 42 Cal. 4th 531, 550.)  Plaintiff’s allegations do not satisfy this pleading standard.  

            Defendants also contend that Plaintiff’s contractual claims separately fail against Defendant Kraus because the Complaint does not properly allege the form of any contract made with Defendant Kraus as an individual. A demurrer lies where, “in an action founded upon a contract, it cannot be ascertained from the pleading whether the contract is written, is oral, or is implied by conduct. (Code Civ. Proc. § 430.10(g).) The Court agrees. Although the Complaint makes a blanket reference to a “written and oral” contract evidenced by an attached Exhibit A, no exhibit is attached to the Complaint, and none of the allegations in the Complaint evidence any contractual relationship outside of the purchase and installation agreement. What is more, the Court independently observes that the Complaint in this action is substantially identical to the operative Second Amended Complaint in the lead case, 20STCV46114, which does include an attached Exhibit A. Taking judicial notice of that pleading under Evidence Code section 452(d) and construing that exhibit as also intended for this Complaint, the Court observes that the exhibit appears to be an invoice for a Vertical Lift Residential from Electropedic, bearing Electropedic’s branding, slogan, website, and mailing address. (SAC Exh. A.) The only reference to Defendant Kraus individually is the inclusion of his email address. (Id.) Even construing the allegations in the light most favorable to Plaintiff, this is not sufficient to establish the existence or form of a contract between Plaintiff and Defendant Kraus, separate and distinct from a contract with Electropedic.

            Plaintiff has therefore failed to state facts sufficient to constitute a cause of action with respect to Defendant Kraus as to all causes of action asserted in the Complaint.

Leave to Amend

When a demurrer is sustained, the Court determines whether there is a reasonable possibility that the defect can be cured by amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318).  When a plaintiff “has pleaded the general set of facts upon which his cause of action is based,” the court should give the plaintiff an opportunity to amend his complaint, since plaintiff should not “be deprived of his right to maintain his action on the ground that his pleadings were defective for lack of particulars.” (Reed v. Norman (1957) 152 Cal.App.2d 892, 900.) Accordingly, California law imposes the burden on the plaintiffs to demonstrate the manner in which they can amend their pleadings to state their claims against a defendant.  (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) “Denial of leave to amend constitutes an abuse of discretion unless the complaint shows on its face it is incapable of amendment.  [Citation.]  Liberality in permitting amendment is the rule, if a fair opportunity to correct any defect has not been given." (Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1227.)

            Here, Plaintiff has not explained how the Complaint might be amended to cure the defects.  In light of the strong presumption in favor of permitting leave to amend, and given the nature of the defects in the Complaint, the Court will exercise its discretion to permit Plaintiff to amend the Complaint.

Conclusion

            Defendants’ Demurrer to the Complaint is SUSTAINED with leave to amend.

Motion to Strike

            As the Court has sustained the Demurrer to the Complaint with leave to amend, Defendants’ motion to strike is DENIED AS MOOT.

CONCLUSION:

            Accordingly, Defendants’ Demurrer to the Complaint is SUSTAINED.

            Plaintiff shall have 30 days leave to amend the Complaint.

            Defendants’ Motion to Strike is DENIED AS MOOT.

            Moving Parties to give notice.

IT IS SO ORDERED.

Dated:  April 24, 2023                                    ___________________________________

                                                                                    Theresa M. Traber

                                                                                    Judge of the Superior Court

            Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.