Judge: Theresa M. Traber, Case: 22STCV35156, Date: 2023-09-13 Tentative Ruling

Case Number: 22STCV35156    Hearing Date: September 13, 2023    Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE:     September 13, 2023               TRIAL DATE: NOT SET

CASE:                         Crown Staffing Services, LLC v. Day to Day Imports, Inc., et al.

CASE NO.:                 22STCV35156           

DEMURRER TO COMPLAINT

MOVING PARTY:               Defendants Yaakov, Yosef, Yehuda, and Akiva Nourollah, joined by Defendant Pharmedoc Inc.

RESPONDING PARTY(S): Plaintiff Crown Staffing Services, LLC

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

            This is an action for breach of contract that was filed on November 4, 2022. Plaintiff alleges that the Defendants have failed to pay Plaintiff for payroll and staffing services rendered to Defendants.

Defendants Yaakov, Yosef, Yehuda, and Akiva Nourollah, joined by Defendant Pharmedoc, Inc., demur to the Complaint in its entirety.

TENTATIVE RULING:

Defendants Yaakov, Yosef, Yehuda, and Akiva Nourollah and Pharmedoc Inc.’s Demurrer to the Complaint is OVERRULED.

DISCUSSION:

Defendants Yaakov, Yosef, Yehuda, and Akiva Nourollah, joined by Defendant Pharmedoc, Inc., demur 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).)

Counsel for the moving Defendants filed with the moving papers a declaration stating that counsel for the parties met and conferred on January 19, 2022, and that Plaintiff’s counsel declined to amend the Complaint. (Declaration of Aryeh Kaufman ISO Demurrer ¶¶ 3-4.) The Court finds that the moving Defendants have therefore satisfied their statutory meet and confer obligations.

Counsel for the joining Defendant states that he met and conferred with Plaintiff’s counsel on February 7, 2023, and at that time Plaintiff’s counsel likewise declined to amend the Complaint. (Declaration of Jacob Unger ISO Demurrer ¶¶ 3-4.) The Court therefore finds that the joining Defendant has satisfied its statutory meet-and-confer obligations.

First Cause of Action: Breach of Contract

            Defendants demur to the first cause of action for breach of contract on the grounds that Plaintiff has failed to state facts sufficient to constitute a cause of action against these Defendants.

            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.)

            The Complaint does not allege that either the individual Defendants or Pharmedoc entered into a contract for services with Plaintiff. Rather, the Complaint alleges that Plaintiff contracted for staffing and payroll services with Defendants Day to Day and Virgin Scent (Complaint ¶ 22), and that each of the various corporate entities named in the Complaint, including the contracting Defendants, are alter egos of the individuals named in the Complaint. (Complaint ¶¶ 16-20.)

            Defendants contend that Plaintiff has failed to allege facts sufficient to constitute a cause of action against any of these Defendants because Plaintiff’s alter ego allegations are “boilerplate.” The Court is not persuaded. Plaintiff has alleged that the Individual Defendants exercised complete control over the various corporate entities in this litigation (Complaint ¶ 17), and that they commingled assets and business operations to avoid their debts and liabilities from the corporate entities, which Plaintiff alleges were undercapitalized. (¶ 18.) Construed in the light most favorable to Plaintiff, as required on demurrer, the Court finds that these allegations are sufficient to sustain an invocation of the alter ego doctrine.

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

Second Cause of Action: Services Rendered

            Defendants demur to the second cause of action for services rendered on the same basis as the first cause of action. Accordingly, for the foregoing reasons, Defendants’ demurrer to the second cause of action is OVERRULED.

Third Cause of Action: Account Stated

            Defendants demur to the third cause of action for account stated on the same basis as the first cause of action. Accordingly, for the foregoing reasons, Defendants’ demurrer to the third cause of action is OVERRULED.

CONCLUSION:

            Accordingly, Defendants Yaakov, Yosef, Yehuda, and Akiva Nourollah and Pharmedoc Inc.’s Demurrer to the Complaint is OVERRULED.

            Moving Parties to give notice.

IT IS SO ORDERED.

Dated: September 13, 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.