Judge: Theresa M. Traber, Case: 24STCV26591, Date: 2025-06-11 Tentative Ruling

Case Number: 24STCV26591    Hearing Date: June 11, 2025    Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE:     June 11, 2025             TRIAL DATE: NOT SET

CASE:                         Alameda & 8^th Owner LLC v. Los Angeles Times Communications, LLC

CASE NO.:                 24STCV26591           

DEMURRER TO CROSS-COMPLAINT

MOVING PARTY:               Plaintiff and Cross-Defendant Alameda & 8^th Owner, LLC

RESPONDING PARTY(S): Defendant and Cross-Complainant Los Angeles Times Communications, LLC

CASE HISTORY:

·         10/11/24: Complaint filed.

·         11/27/24: Cross-Complaint filed.

·         01/17/25: First Amended Complaint filed.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

            This is an action for breach of a commercial lease. Plaintiff is the owner of an industrial property at 2000 East 8^th Street, Los Angeles which was previously leased to the Defendant Los Angeles Times Communications, LLC. Plaintiff alleges that, after terminating its tenancy, Defendant left the property in substantial disrepair.

Plaintiff, as Cross-Defendant, demurs to the second cause of action in the Cross-Complaint for breach of the implied covenant of good faith and fair dealing.

TENTATIVE RULING:

Cross-Defendant’s Demurrer to the Cross-Complaint is SUSTAINED without leave to amend.

DISCUSSION:

Plaintiff, as Cross-Defendant, demurs to the second cause of action in the Cross-Complaint for breach of the implied covenant of good faith and fair dealing.

Legal Standard

A demurrer tests whether the (cross-) 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 [cross-] 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 Cross-Defendant’s counsel in support of this demurrer states that the parties met and conferred telephonically on November 22, 2024, but were unable to resolve this dispute. (Declaration of Colin H. Roles ISO Dem. ¶ 2.) Cross-Defendant has satisfied its statutory meet-and-confer obligations.

Analysis

Plaintiff, as Cross-Defendant, demurs to the second cause of action in the Cross-Complaint for breach of the implied covenant of good faith and fair dealing. Cross-Defendant contends that this cause of action is duplicative of the first cause of action for breach of contract.

“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 omitted, emphasis in original].)

            The Cross-Complaint alleges that, beginning in March of 2024, during the tenancy, Cross-Defendant began serving notices claiming that Cross-Complainant was in default under the terms of the Lease Agreement, as amended. (Cross-Complaint ¶ 30.) Cross-Defendant’s alleged claims included, inter alia, failure to remove an improvement on the property known as the “Quiet Room” (¶¶ 31-32), failure to remove ductwork in the building (¶ 33), failure to maintain the parking lot (id.), and failure to provide invoices for work performed. (Id.) The Cross-Complaint alleges that these notices were both factually untrue and did not set forth valid “events of default” under the terms of the Lease. (Cross-Complaint ¶ 34.) Allegedly, Cross-Defendant employed these spurious default notices as a fig leaf to improperly draw down on a letter of credit provided pursuant to the lease, which could only be drawn upon in the event of a default. (Cross-Complaint ¶ 47.) The first cause of action for breach of contract claims that improperly drawing upon the Letter of Credit was a breach of the Lease. (Cross-Complaint ¶ 54.) The second cause of action for breach of the implied covenant of good faith and fair dealing alleges that the “campaign to manufacture an Event of Default, submission of numerous and frivolous Notices of Default, and/or its baseless draw on the Letter of Credit […] frustrated Tenant’s efforts to receive the benefits of the contract.” (¶ 62.)

            Cross-Defendant argues that the second cause of action is duplicative of the first cause of action because both claims are premised on the same legal and factual issue of whether the Notices of Default alleged in the Cross-Complaint were proper and justified. In response, Cross-Complainant contends that the second cause of action, although overlapping with the first cause of action, is not duplicative because it alleges separate damages, in the form of unspecified costs necessary to dispute Cross-Defendant’s default claims and halt the “campaign” to draw upon the Letter of Credit without justification. The Court disagrees with Cross-Complainant’s conclusion. As Cross-Defendant notes, both causes of action are concerned with Cross-Defendant’s compliance with an express contractual term. If Cross-Defendant served valid Notices of Default, then Cross-Defendant has complied with an express contractual term and cannot be in breach of an implied covenant because such a covenant cannot conflict with an express term. (See Guz, supra, 24 Cal.4th at 349-50.) If Cross-Defendant did not serve valid Notices of Default, then Cross-Defendant had no contractual right to draw upon the Letter of Credit and is in breach of the contract. Any costs incurred by Cross-Complainant in opposing Cross-Defendant’s conduct would necessarily be encompassed in the damages resulting from Cross-Defendant’s putative breach. Notably, the Cross-Complaint does not limit its alleged damages under the first cause of action solely to the drawn credit. (See Cross-Complaint ¶ 57.) The Court therefore concludes that the second cause of action is duplicative of the first cause of action, as the causes of action concern identical facts and claims for damages.

            Accordingly, Cross-Defendant’s Demurrer to the Cross-Complaint is SUSTAINED.

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.)

            As the Court has found that the second cause of action is duplicative of the first cause of action in the Cross-Complaint, leave to amend is not proper in this context. This ruling does not preclude Cross-Complainant from litigating the underlying facts or claims for damages on which the second cause of action is premised in the context of the first cause of action.

CONCLUSION:

            Accordingly, Cross-Defendant’s Demurrer to the Cross-Complaint is SUSTAINED without leave to amend.

            Moving Party to give notice.

IT IS SO ORDERED.

Dated:  June 11, 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.