Judge: Theresa M. Traber, Case: 23STCV11610, Date: 2024-04-24 Tentative Ruling

Case Number: 23STCV11610    Hearing Date: April 24, 2024    Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE:     April 24, 2024                        TRIAL DATE: NOT SET

CASE:                         Roberto Diaz, et al. v. Krystal Alfaro Canty

CASE NO.:                 23STCV11610           

DEMURRER TO SECOND AMENDED COMPLAINT

MOVING PARTY:               Defendant Krystal Alfaro Canty

RESPONDING PARTY(S): Plaintiffs Roberto Diaz, Skin Body Lounge, LLC, and Skin Body Lounge Med Spa, Inc.

CASE HISTORY:

·         05/22/23: Complaint filed.

·         12/18/23: First Amended Complaint filed.

·         02/27/24: Second Amended Complaint filed.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

            This is an action for breach of contract and conversion. Plaintiffs allege that Defendant failed to adhere to an oral agreement between the parties and misappropriated corporate assets and trade secrets.

Defendant demurs to portions of the Second Amended Complaint.

TENTATIVE RULING:

Defendant’s Demurrer to the Complaint is OVERRULED.

DISCUSSION:

Defendant demurs to portions of the Second Amended Complaint.

Missing Proof of Service

            The Court observes that Defendant did not provide a proof of service with the moving papers for this demurrer. However, since Plaintiffs responded to the demurrer and do not object that the demurrer was improperly served, the Court finds this deficiency was not prejudicial.

Requests for Judicial Notice

            Defendant requests that the Court take judicial notice of (1) the Complaint; (2) the Demurrer to the Complaint; (3) the First Amended Complaint; and (4) the Demurrer to the First Amended Complaint. Defendant’s requests are GRANTED pursuant to Evidence Code section 452(d) (court records).

            Defendant has not provided a declaration describing her efforts to informally resolve this dispute and has not complied with her statutory meet-and-confer obligations. However, as failure to comply with this requirement does not bear on the disposition of the demurrer, the Court addresses Defendant’s demurrer on its merits.

First Cause of Action: Breach of Lease

            Defendant demurs to the first cause of action for breach of a lease agreement on the grounds that it violates the statute of frauds and therefore fails to state facts sufficient to constitute a cause of action.

            Under the statute of frauds, codified in section 1624 of the Civil Code, certain transactions, including, as relevant here, an agreement that cannot be performed within one year of its execution, must be reduced to writing and subscribed by the party to be charged to be enforceable. (Civ. Code § 1624(a)(3).)  However, equitable estoppel permits enforcement of an oral agreement to prevent fraud when one party has detrimentally relied on an oral promise or another party has been unjustly enriched. (Juran v. Epstien (1994) 23 Cal.App.4th 882, 892). Equitable estoppel may preclude a statute of frauds defense. (Byrne v. Laura (1997) 51 Cal.App.4th 1054, 1068). Whether the doctrine of equitable estoppel should be applied in a given case is a question of fact. (Id.)

            Defendant contends that the statute of frauds bars the first cause of action because it expressly seeks to recover on an oral contract with a seven-year term. (SAC ¶ 8.) In opposition, Plaintiffs argue that the Second Amended Complaint alleges that Defendant was unjustly enriched and that Plaintiffs have pled sufficient facts to argue that Defendant is equitably estopped from asserting the statute of frauds. In reply, Defendant argues that the Complaint does not allege a change in position by the Plaintiffs.  Close examination of the Second Amended Complaint supports Plaintiffs’ argument and belies Defendant’s contention. Plaintiffs allege that, notwithstanding the oral agreement, Defendant has failed to pay her half of the rent, which Plaintiff Diaz has been forced to cover. (SAC ¶ 9.) Put differently and construed in the light most favorable to Plaintiffs, Diaz alleges that he relied upon Defendant’s promise in entering into the lease agreement and has been forced to incur pecuniary losses as a result of Defendant’s nonperformance of the agreement. The Court finds this allegation sufficient to assert a defense to the statute of frauds for the purposes of a demurrer.

            Accordingly, Defendant’s Demurrer to the First Cause of Action is OVERRULED.

Second Cause of Action: Breach of Loan Agreement

            Defendant demurs to the second cause of action for breach of a loan agreement on the grounds that it violates the statute of frauds and therefore fails to state facts sufficient to constitute a cause of action.

            Defendant argues that the agreement to pay half of the payments on the underlying loan agreement is likewise subject to the statute of frauds because, by its terms, payments would not begin for 12 months from the date of the note and would continue for thirty years. (SAC ¶¶ 10, Exh. B. p.2) However, close reading of the Second Amended Complaint shows that Plaintiffs allege that they have been forced to cover the loan payments as a result of Defendant’s failure to adhere to the oral agreement. (SAC ¶ 10.) Thus, for the reasons stated above with respect to the first cause of action, the Court finds that Plaintiffs have stated sufficient facts to assert equitable estoppel as a defense to the statute of frauds.

            Accordingly, Defendant’s Demurrer to the Second Cause of Action is OVERRULED.

CONCLUSION:

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

            Moving Party to give notice.

IT IS SO ORDERED.

Dated:  April 24, 2024                                    ___________________________________

                                                                                    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.