Judge Theresa M. Traber, Case Number: 22STCV18323, Date: 2025-01-31 Tentative Ruling

Judge: Theresa M. Traber, Case: 22STCV18323, Date: 2025-01-31 Tentative Ruling

Case Number: 22STCV18323 Hearing Date: January 31, 2025 Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE: January 31, 2025 TRIAL DATE: June 3, 2025

CASE: Jeff Shin v. James Lai, et al.

CASE NO.: 22STCV18323

DEMURRER TO COMPLAINT

MOVING PARTY: Defendants James Lai, Kevin Lai, & Broadway Hill Investment Group, LLC

RESPONDING PARTY(S): Plaintiff Jeff Shin in pro per.

CASE HISTORY:

· 06/06/22: Complaint filed.

· 06/08/22: First Amended Complaint filed.

· 07/08/22: Cross-Complaint filed.

· 10/23/23: Second Amended Complaint filed.

· 09/11/24: Complaint filed in JC Business Center, Inc. v. Broadway Hill Investment Group, LLC, et al.; Case No. 24STCV23433.

· 09/17/24: Cases deemed related. This case (22STCV18323) designated as lead case.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This is an action for fraud and breach of contract arising out of a commercial lease dispute. Plaintiff alleges that Defendants breached the lease agreement by not allowing Plaintiff unfettered access to the rental property.

Defendants James Lai, Kevin Lai, and Broadway Hill Investment Group, LLC demur to the Complaint filed in the consolidated action JC Business Center, Inc. v. Broadway Hill Investment Group, et al. Case No. 24STCV23433.

TENTATIVE RULING:

Defendants’ Demurrer to the Complaint is OVERRULED in its entirety.

DISCUSSION:

Demurrer to Complaint

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 Jonathan Coleman attached to the demurrer states that he attempted to meet and confer with Plaintiff’s counsel via email on November 15 September 19, 2024, but received no response. (Declaration of Jonathan Coleman ISO Dem. ¶¶ 2-3.) This is not a compliant meet-and-confer declaration. Section 430.41 requires counsel to meet and confer in person or by telephone. A single email, even where no response is received, is not sufficient to demonstrate a proper good faith effort to informally resolve the dispute.

First Cause of Action: Breach of Contract

Defendants contend that the first cause of action for breach of contract fails to state facts sufficient to constitute a cause of action.

To state a cause of action for breach of contract, a plaintiff must plead the contract, the plaintiff’s performance of the contract or excuse for nonperformance, Defendant’s breach, and finally the resulting damage. (Otworth v. Southern Pac. Transportation Co. (1985) 166 Cal.App.3d 452, 458.) Further, the complaint must indicate whether the contract is written, oral, or implied by conduct. (Code Civ.Proc. § 430.10(g).) General allegations stating that defendants violated a contract are insufficient, and plaintiffs must state facts showing a breach. (Levy v. State Farm Mutual Automobile Ins. Co. (2007) 150 Cal.App.4th 1, 5-6.) For breach of a written contract, the essential terms must be set out verbatim in the body of the complaint or a copy of the written instrument must be attached and incorporated by reference. (Otworth v. Southern Pac. Transportation Co., supra, 166 Cal.App.3d at 459.)

Defendants contend that Plaintiff has not adequately alleged a breach of contract. The Complaint does not include a copy of the contract, but instead sets forth its relevant terms in paragraph 18. As pled, the parties entered into a commercial lease for the property located at 1811 S. Hill Street, Los Angeles, CA, 90015. (Complaint ¶ 18.) The contract stated that the premises comprised the entirety of the rentable space at the subject property and that Plaintiff leased the premises for $4,900 per month for the term from December 2, 2021, to December 31, 2022, with two unreserved parking spaces. (Id.) The central allegation is that Defendants only provided access to the premises from 10:00 a.m. to 1:30 p.m. daily, thereby preventing Plaintiff from maintaining its regular 7:30 a.m. to 5:00 p.m. business hours. (Complaint ¶¶ 12-14; 20.)

“When a dispute arises over the meaning of contract language, the first question to be decided is whether the language is ‘reasonably susceptible’ to the interpretation urged by the party. If it is not, the case is over.” (S. Cal. Edison Co. v. Super. Ct., (1995) 37 Cal.App.4th 839, 847-48.) “If the court decides the language is reasonably susceptible to the interpretation urged, the court moves to the second question: what did the parties intend the language to mean? ... Thus, where contract language is clear and explicit and does not lead to absurd results, we ascertain intent from the written terms and go no further. If the contract is capable of more than one reasonable interpretation, it is ambiguous.” (Department of Forestry & Fire Protection v. Lawrence Livermore National Security, LLC (2015) 239 Cal.App.4th 1060, 1066 [internal quotation marks, ellipses, and citations omitted].) Interpretation of an ambiguous contract requires the consideration of extrinsic evidence and is therefore not well-suited to resolution via demurrer. (See Brown v. Goldstein (2019) 34 Cal.App.5th 418, 432-33 [describing evidentiary considerations necessary for determination of the legal question of the meaning of a contract via motion for summary judgment].)

Defendants argue that nothing in the contract addresses the hours of access to the property and none of the allegations in the pleadings demonstrate that the hours of access were contemplated, negotiated, nor agreed upon. The Court finds Defendants’ view of the contract to be inappropriately constrained. “The distinguishing characteristics of a leasehold estate are that the lease gives the lessee the exclusive possession of the premises against all the world, including the owner.” (Howard v. County of Amador (1990) 220 Cal.App.3d 962, 972, citing Von Goerlitz v. Turner (1944) 65 Cal.App.2d 425, 429.) Plaintiff alleges that Defendants limited the rights of Plaintiff to access the property or to permit others to access the property despite ostensibly granting Plaintiff full possession by leasing the property. (Complaint ¶¶ 11-14.) Put differently, Plaintiff is alleging that Defendants breached a fundamental term of the lease agreement. Nothing more is required to state a cause of action for breach of contract.

Accordingly, Defendants’ Demurrer to the first cause of action for breach of contract is OVERRULED.

Second Cause of Action: Breach of Implied Covenant of Good Faith

Defendants also demur to the second cause of action for breach of the implied covenant of good faith and fair dealing.

“There is an implied covenant of good faith and fair dealing in every contract that neither party will do anything which will injure the right of the other to receive the benefits of the agreement.” (Comunale v. Traders & General Ins. Co. (1958) 50 Cal.2d 654, 658 [internal citations omitted].) “The covenant of good faith and fair dealing, implied by law in every contract, exists merely to prevent one contracting party from unfairly frustrating the other party’s right to receive the benefits of the agreement actually made. The covenant thus cannot be endowed with an existence independent of its contractual underpinnings. It cannot impose substantive duties or limits on the contracting parties beyond those incorporated in the specific terms of their agreement.” (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 349-350 [internal citations and quotation omitted, emphasis in original].)

Defendants contend that this cause of action is without merit because the agreement executed by the parties did not contemplate the window in which access would be provided. For the reasons stated above with respect to the first cause of action, the Court finds this argument unavailing.

Accordingly, Defendants’ Demurrer to the second cause of action is OVERRULED.

Third Cause of Action: Fraudulent Concealment

Defendants contend that the third cause of action for fraudulent concealment fails to state facts sufficient to constitute a cause of action because it is not pled with specificity.

The elements of fraudulent concealment are (1) concealment or suppression of a material fact; (2) by a defendant with a duty to disclose the fact to the plaintiff; (3) intent to defraud the plaintiff by intentionally concealing or suppressing the fact; (4) the plaintiff was unaware of the fact and would not have acted as he or she did if he or she had known of the concealed or suppressed fact; and (5) the plaintiff sustained damage as a result of the concealment or suppression of fact. (Hambridge v. Healthcare Partners Medical Group, Inc. (2015) 238 Cal.App.4th 124, 162.)

Defendants contend that the Complaint is defective because it does not allege with specificity any misrepresentations made by Defendants. Here, however, the Complaint alleges that Defendants did not disclose that access to the property would be limited to a three-and-a-half hour period each day, with the intent to induce Plaintiff into the contract by concealing that information, that Plaintiff would not have entered into the contract had that information been known, and that Plaintiff lost money as a result. (Complaint ¶¶ 32-37.) The Court finds these allegations to be sufficient to state a cause of action for fraudulent concealment.

Accordingly, Defendants’ Demurrer to the third cause of action is OVERRULED.

CONCLUSION:

Accordingly, Defendants’ Demurrer to the Complaint is OVERRULED in its entirety.

Moving Parties to give notice.

IT IS SO ORDERED.

Dated: January 31, 2025 __________________________________

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.