Judge: Theresa M. Traber, Case: 23STCV27640, Date: 2024-08-07 Tentative Ruling
Case Number: 23STCV27640 Hearing Date: August 7, 2024 Dept: 47
Tentative Ruling
Judge Theresa M. Traber, Department 47
HEARING DATE: August 7, 2024 TRIAL
DATE: NOT SET
CASE: Memory Buss, et al. v. John Montgomery,
et al.
CASE NO.: 23STCV27640 
DEMURRER
TO COMPLAINT
MOVING PARTY: Defendants John Montgomery, Erica Montgomery (Doe 2);
Montgomery Enterprise, Inc.
RESPONDING PARTY(S): No response on
eCourt as of 8/5/24
CASE
HISTORY:
·
11/13/23: Complaint filed.
STATEMENT
OF MATERIAL FACTS AND/OR PROCEEDINGS:
This is an action for breach of contract, fraud, and conversion. Plaintiffs
allege that Defendants agreed to sell the application rights for a cannabis
retail license to Plaintiffs for $100,000, but, after receiving the money, demanded
a further $60,000 for the application number necessary to make use of those
rights.
Defendants demur to the Complaint
in its entirety.
TENTATIVE RULING:
Defendants
John Montgomery, Erica Montgomery, and Montgomery Enterprises, Inc.’s Demurrer
to the Complaint is SUSTAINED in its entirety.
Plaintiffs
shall have 20 days leave to amend the Complaint.
DISCUSSION:
Defendants 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).)
The
Declaration of J. Raza Lawrence attached to the Demurrer states that the parties
met and conferred telephonically on February 6, 2024, but were unable to
resolve this dispute. (Declaration of J. Raza Lawrence ISO Demurrer ¶ 2.)
Defendants have therefore satisfied their statutory meet-and-confer
obligations.
Plaintiffs’ Improper First Amended Complaint
As stated
in the Court’s August 5, 2024 Minute Order, Plaintiffs filed a putative First
Amended Complaint on July 30, 2024. Pursuant to Code of Civil Procedure section
472, a party may file a first amended complaint without leave of court at any
time before the opposing party demurs to the complaint or, after the demurrer
is filed, before the time to oppose the demurrer has expired. (Code Civ. Proc.
§§ 472, 1005(b).) The time to oppose this demurrer expired on July 25, 2024,
and leave of court was not sought to file a late amended complaint. The Court
therefore struck the First Amended Complaint. (August 5, 2024.) Consequently,
that amended pleading will not be considered in this ruling.
First Cause of Action: Breach of Contract
Defendants
demur to the first cause of action for breach of contract for failure 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 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, as 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 the first
cause of action is inadequately pled because it alleges the breach of a written
contract without setting forth its specific terms or attaching a copy of the
contract. Further, Defendants argue that Plaintiffs have not pled facts
establishing that these Defendants were party to any contract with Plaintiffs. The
Court concurs: while the Complaint alleges the existence of a contract between
Plaintiffs, on the one hand, and Defendants Daniel Wise and Mary Witherspoon on
the other (FAC ¶ 22), the Complaint does not allege that these Defendants are
parties to that agreement. Moreover, the Complaint alleges a written contract
which it purports to furnish as Exhibit A, but fails to include that exhibit. (Id.)
The Complaint therefore fails to state sufficient facts to constitute a cause
of action for breach of contract.
Accordingly, Defendants’ Demurrer
to the first cause of action is SUSTAINED.
Second Cause of Action: Fraud
Defendants
demur to the second cause of action for fraud for failure to state facts
sufficient to constitute a cause of action.
“The
elements of fraud that will lead to a tort action are: (a) misrepresentation;
(b) knowledge of falsity; (c) intent to defraud, i.e., to induce reliance; (d)
justifiable reliance; and (e) resulting damage. (Engalla v. Permanente
Medical Group, Inc. (1997) 15 Cal.4th 951, 974.) Every element of the cause
of action for fraud must be alleged in the proper manner and the facts
constituting the fraud must be alleged with sufficient specificity to allow
defendant[s] to understand fully the nature of the charge made. (Stansfield
v. Starkey (1990) 220 Cal.App.3d 59, 73.) “This particularity requirement
necessitates pleading facts which show how, when, where, to whom, and by what
means the representations were tendered.” (Ibid.) “[G]eneral and
conclusory allegations do not suffice.” (Lazar v. Superior Court (1996)
12 Cal.4th 631, 645.)
Defendants
contend that the Complaint discloses no representations which were made by the demurring
parties to Plaintiffs. The Complaint only alleges that “Defendants are all in
partnership together and do business together” and that “Daniel Wise and Mary
Amanda Witherspoon promised to furnish Plaintiffs with the cannabis licenses
underlying their agreement with Plaintiffs upon Plaintiffs’ furnishing $100,000
to Mr. Wise.” There are no allegations specifically identifying any representations
made by these Defendants save the assertion that Defendant John Montgomery
“brokered the deal and was an accomplice to the fraud.” (FAC ¶ 16.) The Court
concurs that these conclusory allegations do not meet the heightened pleading
standard for fraud.
Accordingly,
Defendants’ Demurrer to the second cause of action is SUSTAINED.
Third Cause of Action:
Conversion
Defendants
demur to the third cause of action for conversion.
To
state a claim for conversion, a plaintiff must plead “(1) the plaintiff’s
ownership or right to possession of the property; (2) the defendant’s
conversion by a wrongful act or disposition of property rights; and (3)
damages.” (Lee v. Hanley (2015) 61 Cal.4th 1225, 1240.)
Defendants
contend that the Complaint is deficient as to this cause of action because it
does not allege any facts supporting the contention that these Defendants
wrongfully took possession of Plaintiffs’ money. While paragraph 41 of the
Complaint asserts in conclusory fashion that Defendants have improperly taken
possession of Plaintiffs’ $100,000, the factual contentions allege only that
Defendant Wise took possession of those funds. (FAC ¶ 26.) The Court concurs
with Defendants that these allegations are insufficient to establish that the
Montgomery Defendants have possession of that money merely because they
allegedly do business with the party who received that money.
Accordingly,
Defendants’ Demurrer to the third cause of action is SUSTAINED.
Fourth Cause of Action: Breach
of Implied Covenant of Good Faith
Defendants
demur to the fourth cause of action for breach of the implied covenant of good
faith and fair dealing for failure to state facts sufficient to constitute a
cause of action.
“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].) (“there is no obligation to
deal fairly or in good faith absent an existing contract.” (Racine &
Laramie, Ltd. v. Department of Parks & Recreation (1992) 11 Cal.App.4th
1026, 1032.)
Defendants
argue that because Plaintiffs have not adequately pled the existence of a
contract with these Defendants, they cannot assert a claim for breach of the
implied covenant of good faith and fair dealing arising out of that contract.
The Court concurs.
Accordingly,
Defendants’ Demurrer to the fourth cause of action is SUSTAINED.
Uncertainty
Defendants
also demur to the Complaint in its entirety as uncertain.
Demurrers¿for uncertainty are disfavored,
because discovery can be used for clarification, and they apply only where
defendants cannot reasonably determine what issues or claims are stated.¿(Chen
v. Berenjian (2019) 33 Cal.App.5th 811, 822; Khoury v. Maly's of Cal.,
Inc.¿(1993) 14 Cal.App.4th 612, 616.) If the complaint is sufficiently
comprehensible that Defendant can reasonably respond, the complaint is not
uncertain. (Mahan v. Charles W. Chan Ins. Agency, Inc. (2017) 14
Cal.App.5th 841, 848 n.3.)
As should
be apparent from the Court’s discussion of each cause of action, the Complaint
is not so uncertain that Defendants could not be reasonably expected to
respond, notwithstanding the absence of sufficient facts to support the claims
asserted against them.
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.)
Plaintiffs,
having not responded to the Demurrer, do not demonstrate how the Complaint
might be amended. However, the deficiencies in the Complaint arise entirely out
of Plaintiffs’ failure to plead their claims in sufficient detail to support
any of their causes of action as to these Defendants. The Court therefore finds
that the manner in which the Complaint might be amended is self-evident, and,
thus, will exercise its discretion to permit Plaintiffs to amend the Complaint.
//
CONCLUSION:
Accordingly,
Defendants John Montgomery, Erica Montgomery, and Montgomery Enterprises,
Inc.’s Demurrer to the Complaint is SUSTAINED in its entirety.
Plaintiffs
shall have 20 days leave to amend the Complaint.
Moving
Parties to give notice.
IT IS SO ORDERED.
Dated: August 7, 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.