Judge: Theresa M. Traber, Case: 24STCV06042, Date: 2024-11-18 Tentative Ruling

Case Number: 24STCV06042    Hearing Date: November 18, 2024    Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE:     November 18, 2024               TRIAL DATE: NOT SET

CASE:                         Junkers2Jewels LLC, et al. v. La-Doris McClaney, Trustee of the La-Doris McClaney Family Trust, et al.

CASE NO.:                 24STCV06042           

DEMURRER TO FIRST AMENDED COMPLAINT AND MOTION TO STRIKE (x3)

MOVING PARTY:               (1)(2); Defendant La-Doris McClaney, Trustee of the La-Doris McClaney Family Trust (3)(4) Defendant Gregory Bass; (5)(6) Defendant Patricia Grandison

RESPONDING PARTY(S): (1)-(6)Plaintiffs Junkers2Jewels, LLC and Matthew Pelanne.

CASE HISTORY:

·         03/11/24: Complaint filed.

·         03/25/24: Cross-Complaint filed.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

            This is an action for breach of contract. Plaintiffs allege that Defendants breached a purchase agreement for a parcel of real property by unilaterally cancelling escrow.

Defendants demur to the First Amended Complaint and move to strike portions of the complaint.

TENTATIVE RULING:

            Defendants’ Demurrers to the First Amended Complaint are SUSTAINED with leave to amend.

            Defendants’ Motions to Strike are DENIED as moot.  

            The Court sets a Hearing on Monday, December 2, 2024 at 8:30 AM on an Order to Show Cause Re: Why Attorney Phoenix Thottam, Counsel for Plaintiffs, should not be sanctioned and referred to the State Bar of California for disciplinary action for providing false citations to legal authority to this Court.

DISCUSSION:

Defendant Grandison’s Demurrer to First Amended Complaint

            Defendant La-Doris McClaney demurs to the First Amended 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 David M. Berger accompanying the Demurrer states that counsel for the parties met and conferred electronically on October 2, 2024, and via telephone on October 4, 2024, but were not able to resolve the disputes at issue in this demurrer. (Declaration of David. M. Berger ISO Dem. ¶¶ 2-3.) Defendant has satisfied her statutory meet-and-confer obligations.

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Lack of Standing

            Defendant demurs to the First Amended Complaint in its entirety on the grounds that the Plaintiffs have not properly alleged standing to sue based on the conduct that is alleged.

“In general terms, in order to have standing, the plaintiff must be able to allege injury—that is, some invasion of the plaintiff’s legally protected interests.” (Angelucci v. Century Supper Club (2007) 41 Cal.4th 160, 175 [internal quotations omitted].) All actions must be prosecuted in the name of the real party in interest. (Code Civ. Proc. § 367.) A real party in interest is one who owns or holds title to the claim or property involved. (E.g., Gantman v. United Pacific Ins. Co. (1991) 232 Cal.App.3d 1560, 1566.) For claims based upon a contract, the party must be a signatory to the contract or an intended third-party beneficiary. (Berclain Am. Latina v. Baan Co. (1999) 74 Cal.App.4th 401, 405.)

The First Amended Complaint alleges that Plaintiffs—i.e., Junkers2Jewels, LLC and Matthew Pelanne--entered into a commercial purchase agreement on January 23, 2024 with Defendant McClaney for the purchase of a multifamily apartment building at 8543 Cashio St., Los Angeles, CA 90035, for $900,000. (FAC ¶¶ 9-10.) As alleged, the Defendant McClaney and her broker and real estate agents, Defendants Bass and Grandison, did not provide accurate rent rolls, did not provide accurate tenant estoppel certificates and lease agreements, refused to provide signed Subordination, Non-Disturbance, and Attornment Agreements from the tenants, and instructed the tenants not to communicate with Plaintiffs. (FAC ¶¶ 12-17.) As a result, the sale has not been completed. (FAC ¶ 20.) Although Plaintiffs assert various claims ostensibly sounding both in contract and in tort, no other facts are alleged in the First Amended Complaint.

The attached Commercial Purchase Agreement states that the purchaser was neither of these parties, but rather a separate entity, FWA Properties, Inc. (FAC Exh. 3. § 1A.) Although the Agreement is signed by Matthew Pelanne, section 35 of the Agreement expressly states that the signature of the legally authorized signer (i.e., Plaintiff Pelanne) is in a representative capacity only, and not in an individual capacity unless otherwise indicated. (FAC Exh. 3 § 35.) No such indication is present in the Agreement. (Id.) “Where written documents are the foundation of an action and are attached to the complaint and incorporated therein by reference, they become a part of the complaint and may be considered on demurrer.” (Qualcomm, Inc. v. Certain Underwriters at Lloyd’s, London (2008) 161 Cal.App.4th 184, 191.) “Under the doctrine of truthful pleading, the courts ‘will not close their eyes to situations where a complaint contains allegations of fact inconsistent with attached documents, or allegations contrary to facts that are judicially noticed.’ [Citation.] ‘False allegations of fact, inconsistent with annexed documentary exhibits [citation] or contrary to facts judicially noticed [citation], may be disregarded.” (Trinity Park; L.P. v. City of Sunnyvale (2011) 193 Cal.App.4th 1014, 1027.)

Defendant argues that Plaintiffs have not adequately alleged standing to sue on any of their claims because Plaintiffs’ legal theories are all grounded in the Purchase Agreement and its execution, to which neither Plaintiff is a party. Thus, Defendant contends, Plaintiffs have not adequately alleged facts showing an injury to themselves rather than to the buyer, who is not a party. In opposition, Plaintiffs contend that FWA assigned its rights to these Plaintiffs. No such allegation is present in the pleadings, and Plaintiffs’ argument in opposition is premised entirely on extrinsic evidence, which is not admissible on demurrer.

Plaintiffs also assert that Matthew Pelanne has standing as the sole owner and principle of Junkers2Jewels who was personally involved and suffered individual harm. This contention is also unsupported by allegations in the pleadings.

More gravely, Plaintiffs purport to cite a 2021 case entitled Truong v. Diamond Valley Federal Credit Union, with a pin citation of 67 Cal.App.5th 263 at 276. The Court has searched for this case and has found no record of any opinion matching this citation. While 67 Cal.App.5th 263, 267 is a valid citation to a 2021 case, that reference points to the concluding page of Kim v. R. Consulting & Sales Inc., which has absolutely no bearing on this matter. California Rule of Professional Conduct 3.3(a)(1) states that a lawyer shall not “knowingly make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer.” (Cal. Rule of Professional Conduct 3.3(a)(1).) It appears that counsel for Plaintiffs may have done just that by providing false citations to nonexistent legal authority to this Court.

Setting the matter of Plaintiffs’ invalid citations aside for the moment, Plaintiffs also assert that they are entitled to bring these claims as intended third-party beneficiaries. As stated by our Supreme Court in Biakanja v. Irving, “[t]he determination whether in a specific case the defendant will be held liable to a third person not in privity is a matter of policy and involves the balancing of various factors, among which are the extent to which the transaction was intended to affect the plaintiff, the foreseeability of harm to him, the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant's conduct and the injury suffered, the moral blame attached to the defendant's conduct, and the policy of preventing future harm.” (Biakanja v. Irving (1958) 49 Cal.2d 647, 650.) Although Plaintiffs recite this authority and assert the presence of all six factors, they do not point to allegations in the pleadings or judicially noticeable matter which, even under the liberal construction of the pleadings employed on demurrer, would support a third-party beneficiary theory of liability. Similarly, Plaintiffs’ assertion that that Junkers2Jewels was “clearly” the disclosed principal and intended purchaser, and therefore entitled to enforce the contract, is likewise unsupported by the pleadings and therefore wholly unpersuasive.

Plaintiffs have not adequately alleged facts which would establish their right to assert the claims pled in the First Amended Complaint either as the assignees or the principals of FWA Properties, Inc. Defendant’s Demurrer to the First Amended Complaint must therefore be SUSTAINED in its entirety.

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 how 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 have not expressly demonstrated how the Complaint could be amended to cure the deficiencies identified here. Plaintiffs have, however, offered extrinsic evidence and multiple legal theories which, had they been set forth in the pleadings, would have offered colorable theories of liability by the Defendant to these Plaintiffs. The Court will therefore exercise its discretion to permit Plaintiffs to amend the pleadings to properly plead those theories.

Conclusion

            Accordingly, Defendant McClaney’s Demurrer to the First Amended Complaint is SUSTAINED with leave to amend.

Defendant McClaney’s Motion to Strike

            Defendant McClaney also moves to strike portions of the First Amended Complaint. As the Court has sustained her demurrer to the First Amended Complaint, Defendant McClaney’s Motion to Strike DENIED as moot.  

Defendant Grandison’s Demurrer to First Amended Complaint

            Defendant Grandison demurs to the First Amended Complaint on substantively identical grounds as Defendant McClaney. For the reasons stated above, Defendant Grandison’s Demurrer is SUSTAINED with leave to amend.

Defendant Grandison’s Motion to Strike

            Defendant Grandison also moves to strike portions of the First Amended Complaint. As the Court has sustained the demurrer, Defendant’s Motion to Strike is DENIED as moot.  

Defendant Bass’s Demurrer to First Amended Complaint

Defendant Bass demurs to the First Amended Complaint on substantively identical grounds as Defendant McClaney. For the reasons stated above, Defendant Bass’s Demurrer is SUSTAINED with leave to amend.

Defendant Grandison’s Motion to Strike

            Defendant Bass also moves to strike portions of the First Amended Complaint. As the Court has sustained his demurrer to the First Amended Complaint, Defendant Bass’s Motion to Strike is DENIED as moot.  

CONCLUSION:

            Accordingly, Defendants’ Demurrers to the First Amended Complaint are SUSTAINED with leave to amend.

            Defendants’ Motions to Strike are DENIED as moot.   

            The Court sets a Hearing on an Order to Show Cause Re: Why Attorney Phoenix Thottam, Counsel for Plaintiffs, should not be sanctioned and referred to the State Bar of California for disciplinary action for providing false citations to legal authority to this Court for Monday, December 2, 2024, at 8:30 AM.

            Moving Parties to give notice.

IT IS SO ORDERED.

Dated:  November 18, 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.