Judge: Thomas D. Long, Case: 23STCV11385, Date: 2023-11-09 Tentative Ruling

Case Number: 23STCV11385    Hearing Date: January 23, 2024    Dept: 48

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

On May 19, 2023, Plaintiff Casa Golondrina, Inc. filed this action against Defendants City of Los Angeles (“City”), UNITE HERE Local 11, and Kevin De Leon, alleging (1) breach of contract; (2) breach of the covenant of good faith and fair dealing; (3) declaratory relief; (4) interference with contract; and (5) interference with prospective economic advantage.

On July 28, 2023, City filed a demurrer to the first two causes of action and a motion to strike.

REQUESTS FOR JUDICIAL NOTICE

City’s Request for Judicial Notice and Supplemental Request for Judicial Notice are denied.  City relies on these documents for the truth of their contents, of which the Court cannot take judicial notice.

DEMURRER

A demurrer for sufficiency 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, accepting the alleged facts as true.  (Nolte v. Cedars-Sinai Medical Center (2015) 236 Cal.App.4th 1401, 1406.)  “Because a demurrer challenges defects on the face of the complaint, it can only refer to matters outside the pleading that are subject to judicial notice.”  (Arce ex rel. Arce v. Kaiser Found. Health Plan, Inc. (2010) 181 Cal.App.4th 471, 556.)

For the first cause of action for breach of contract, City argues that Plaintiff does not allege (1) City’s breach of the Concession Agreement, or (2) Plaintiff’s performance of the Concession Agreement or excuse for failure to perform.  (Demurrer at p. 6.)  The standard elements of a claim for breach of contract are (1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff therefrom.  (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178.)

Plaintiff alleges that City breached Section 18.1 of the Concession Agreement by refusing to maintain and repair the pipes and mains serving the Café.  (Complaint ¶¶ 63, 71, 75.)  As City notes, that Section imposes a duty on City when “any regulatory or municipal agency determines that repair or construction of roofs, foundations, structural components of buildings, the exterior surface of outside walls, main plumbing lines, main natural gas lines, and electrical lines up to the main circuit box is necessary to bring the Premises into compliance with applicable building codes.”  (Complaint ¶ 63; Demurrer at p. 7.)  The Complaint does not allege such a determination.  Plaintiff concedes that these allegations are absent, but it contends that it can amend to allege that the General Services Department did make a determination.  (Opposition at p. 2, fn. 1.)

Plaintiff does not allege its performance or excuse for non-performance.  (See Complaint ¶¶ 62-76; Demurrer at pp. 3-4.)  In fact, the Complaint alleges facts showing that Plaintiff never paid rent under the Concession Agreement.  (See Complaint ¶¶ 55, 72.)  Plaintiff concedes that “the specific allegation that its performance has been excused is not alleged,” but it can amend “to allege that its performance has been excused by the breach of the City and the disparate treatment which Plaintiff has received.”  (Opposition at p. 2, fn. 2.)

Accordingly, the demurrer to the first cause of action is sustained with leave to amend.

The second cause of action alleges breach of the covenant of good faith, based on the same allegations supporting the breach of contract claim.  (Complaint ¶¶ 77-79.)  “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.’”’  [Citation.]  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.)

Because the Complaint does not sufficiently allege a breach of contractual obligations, the demurrer to the second cause of action is also sustained with leave to amend.

The demurrer is SUSTAINED with 30 days’ leave to amend.

MOTION TO STRIKE

The court may, upon a motion or at any time in its discretion: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court.  (Code Civ. Proc., § 436, subds. (a)-(b).)

City moves to strike Paragraph 6 (in full), Paragraph 8 (in full), Paragraph 14 (lines 19-22), Paragraph 21 (in full), Paragraph 31 (line 24), Paragraph 31 (lines 26- 27), Paragraph 32 (in full), Paragraph 33 (in full), Paragraph 34 (in full), Paragraph 35 (in full), Paragraph 36 (in full), Paragraph 37 (in full), Paragraph 47 (lines 9-10), Paragraph 43 (in full), Paragraph 51 (in full), Paragraph 52 (line 9), Paragraph 54 (lines 21-25), Paragraph 60 (lines 23- 27), Paragraph 61 (in full), and Paragraph 75 (line 10).

City argues that Paragraphs 6 and 8 purported to hold each Defendant liable for the actions of the other Defendants, but the City cannot be held liable for the acts of UNITE HERE Local 11.  (Motion at pp. 2-3.)  On July 11, 2023, Plaintiff dismissed Kevin De Leon.  On November 22, 2023, the Court granted UNITE HERE Local 11’s anti-SLAPP motion and dismissed it from this action.  Accordingly, City is the only named Defendant, and the Complaint does not impermissibly allege City’s liability based on the actions of UNITE HERE Local 11.  However, the motion is denied on this ground because there are still Doe Defendants.

City argues that Paragraphs 14 (lines 19-22), 21, 31 (line 24), and 47 (lines 9-10), alleging that it failed to keep Plaintiff informed or provide Plaintiff with requested information, are irrelevant and false.  (Motion at p. 4.)  This argument largely relies on inadmissible exhibits to argue the merits of the allegations.  The motion is denied on this ground.

City argues that Paragraphs 31 (lines 26-27) and 32-37, alleging that City unreasonably required the prior tenant to pay back rent, are also irrelevant and false.  (Motion at p. 5.)  This argument relies on the interpretation of the Concession Agreement and the validity of Plaintiff’s allegations of disparate treatment.  The motion is denied on this ground.

City argues that Paragraph 43’s allegations are improper and false because City cannot be liable for UNITE HERE Local 11’s interference and the information was not confidential.  Because UNITE HERE Local 11 and the claims against it have been dismissed, this allegation is improper and irrelevant.  The motion is granted on this ground.

City argues that Paragraph 51, 52 (line 9), 54 (lines 21- 25), 60 (lines 23-27), and 61 are irrelevant.  (Motion at pp. 6-7.)  But as City acknowledges, “Plaintiff uses these allegations to reach the conclusion that the City has treated it in a ‘discriminatory and prejudicial’ manner.”  (Id. at p. 7.)  These allegations are relevant to Plaintiff’s contention that its non-performance under the contract was excused.  (See Opposition at pp. 5-6; Opposition to Demurrer at p. 2, fn. 2)  The motion is denied on this ground.

Finally, City argues that Paragraph 75’s language of “delays in signing the Concession Agreement” should be stricken because the allegation is improper and cannot support a breach of contract claim.  (Motion at pp. 7-8.)  Plaintiff contends that this relates to the disparate treatment of Plaintiff compared to other merchants at Olvera Street, which relates to breach of contract and breach of the implied covenant.  (Opposition at pp. 3, 6.)  This Paragraph is within the first cause of action, and the Court concurrently grants Plaintiff leave to amend that cause of action.  The motion is denied on this ground.

The motion to strike is GRANTED as to Paragraph 43 without leave to amend.  The motion is otherwise DENIED.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit.  If all parties in the case submit on the tentative ruling, no appearances before the Court are required unless a companion hearing (for example, a Case Management Conference) is also on calendar.

         Dated this 23rd day of January 2024