Judge Theresa M. Traber, Case 22STCV14482 2023-01-11 Tentative Ruling

Judge: Theresa M. Traber, Case: 22STCV14482, Date: 2023-01-11 Tentative Ruling

Case Number: 22STCV14482 Hearing Date: January 11, 2023 Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE: January 11, 2023 TRIAL DATE: NOT SET

CASE: Kulwinder Tak et al. v. Amarjit Singh Gakhal

CASE NO.: 22STCV14482

DEMURRER TO COMPLAINT

MOVING PARTY: Defendant Amarjit Singh Gakhal

RESPONDING PARTY(S): Plaintiffs Kulwinder Tak and Tak & Bhawana, Inc.

CASE HISTORY:

· 05/03/22: Complaint filed.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This is an action on a promissory note. In their Complaint filed on May 3, 2022, Plaintiffs allege that Defendant failed to make any payments on a security agreement executed by the parties in August of 2012.

Defendant demurs to the Complaint in its entirety.

TENTATIVE RULING:

Defendant’s demurrer is SUSTAINED without leave to amend as to the second and third causes of action and otherwise OVERRULED.

DISCUSSION:

Defendant demurs to the Complaint in its entirety.

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 Adam S. Rossman states that counsel for the parties met and conferred extensively between June 9 2022 and July 8, 2022 by e-mail and telephone in an effort to resolve this dispute, but were ultimately unsuccessful in doing so. (Declaration of Adam S. Rossman ISO Demurrer ¶¶ 3-4, Exhs. 3-4.) The Court therefore finds that Defendant has satisfied his statutory meet and confer obligations.

First Cause of Action: Claim on Promissory Note

Defendant demurs to the first cause of action for failure to state facts sufficient to constitute a cause of action, and on the grounds that the claim is time-barred.

1. Statute of Limitations

Defendant demurs to the first cause of action on the ground that it is time-barred.

A claim to enforce a promissory note must be brought within six years of the due date or dates stated in the note. (Comm. Code § 3118(a).) When money owed on a promissory note is payable in installments, the duty to pay each installment is independent, and the statute of limitations begins to run when each installment becomes due. (See White v. Moriarty (1993) 15 Cal.App.4th 1290, 1299.)

Defendant contends that, because the Complaint alleges that Defendant failed to pay any of the agreed-upon monthly installment payments on the promissory note beginning on October 1, 2012, and continuing through September 1, 2017, the six-year statute of limitations bars recovery on any payments due before May 3, 2016, as Plaintiffs filed this action on May 3, 2022. (Complaint ¶ 14.) As Defendant concedes, however, Plaintiffs are still entitled to seek recovery on payments due between May 3, 2016 and September 1, 2017, because the six-year statute of limitations had not expired as to those payments when the Complaint was filed. Therefore, Defendant has not established that this entire cause of action fails as a matter of law.

2. Accord and Satisfaction

Defendant also demurs to this cause of action for failure to state facts sufficient to constitute a cause of action on the basis of the defense of accord and satisfaction.

To assert a defense of accord and satisfaction, the defendant must establish “(1) that there was a ‘bona fide dispute’ between the parties, (2) that the debtor made it clear that acceptance of what he tendered was subject to the condition that it was to be in full satisfaction of the creditor’s unliquidated claim, and (3) that the creditor clearly understood when accepting what was tendered that the debtor intended such remittance to constitute payment in full of the particular claim in issue.” (Thompson v. Williams (1989) 211 CalApp.3d 566, 571.)

Defendant contends that the face of the Complaint establishes the defense of accord and satisfaction. Defendant correctly observes that the copy of the underlying Security Agreement attached to the Complaint contains a handwritten note stating “Recvd $18000.00 for inventory this is final payment. Recvd Kulwinder Singh Tak.” (Complaint Exh. A. p.2) Exhibits attached to the Complaint are treated as the face of the Complaint. (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94.) Further, exhibits attached to the complaint which contradict allegations in the body of the complaint are treated as controlling. (See, e.g., Barnett v. Fireman’s Fund Ins. Co. 2001) 90 Cal.App.4th 500, 505.) Defendant construes this note as indicating a payment of $18,000 in satisfaction of Defendant’s debt under the promissory note. According to Defendant, this handwritten note contradicts the essential allegation in the Complaint that Defendant never made any payments under the Security Agreement. However, in opposition, Plaintiff contends that the payments for inventory indicated in the note were separate from the payments under the security agreement, and therefore that there is no contradiction between the exhibit and the allegation that Defendant did not make a single payment under the promissory note. In his reply, Defendant stands on his position that the Complaint is defective because of the attached note.

As stated above, the Court is obligated to construe the allegations in the Complaint in the light most favorable to Plaintiff. (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238.) Plaintiff has set forth an alternative interpretation of the handwritten note on the Security Agreement that harmonizes it with the allegations in the Complaint. Indeed, the fact that the note refers to the $18,000 payment as payment for “inventory” and not for “payment of promissory note” lends credibility to Plaintiff’s interpretation. Applying this interpretation, there is no conflict between the exhibits and the allegations, and therefore Defendant has not established that the first cause of action fails to state facts sufficient to constitute a cause of action on this basis.

As Defendant has not established that the first cause of action fails on either of the bases set forth, Defendant’s demurrer to the first cause of action is OVERRULED.

Second Cause of Action: Breach of Contract

Defendant demurs to the second cause of action for breach of contract as time-barred. In general, a claim for breach of contract must be brought within four years of the occurrence of the breach. (Code Civ. Proc. § 337(a).) Defendant contends that, since full payment on the contract was due on September 1, 2017, the statute of limitations elapsed on September 1, 2021. As the Complaint was filed in May 2022, Defendant contends that this cause of action is time-barred. Plaintiffs do not address this argument in the opposition brief, instead only addressing the six-year statute of limitations for claims on a promissory note. The Court agrees with Defendant that this cause of action is barred by the four-year statute of limitations, as Plaintiffs’ claim accrued no later than September 1, 2017 and necessarily expired four years later.

Accordingly, Defendant’s demurrer to the second cause of action is SUSTAINED.

Third Cause of Action: Money Lent (Common Count)

Defendant demurs to the third cause of action for money lent as time barred. Claims to recover on a book account or account stated must be brought within four years. (Code Civ. Proc. § 337(b).) Therefore, for the reasons stated above in connection with the second cause of action, this cause of action is likewise time-barred.

Accordingly, Defendant’s demurrer to the third cause of action is SUSTAINED.

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, Plaintiffs’ second and third causes of action are time-barred by a four-year statute of limitations which elapsed in September 2021. Thus, even under the liberal presumption in favor of permitting leave to amend, any amendment of the second or third causes of action would be futile. The Court has no alternative, therefore, but to deny leave to amend as to the second and third causes of action.

CONCLUSION:

Accordingly, Defendant’s demurrer is SUSTAINED without leave to amend as to the second and third causes of action and otherwise OVERRULED.

Moving Party to give notice.

IT IS SO ORDERED.

Dated: January 11, 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.