Judge Thomas D. Long, Case Number: 24STCV31788, Date: 2025-06-17 Tentative Ruling

On December 3, 2024, Plaintiff Laurel Center Group (“Plaintiff”) filed a complaint against Defendants Salt & Pepper Group LLC (“S&P”), Igor Dermenzhi (“Dermenzhi”), Brian Lenzo (“Lenzo”), David Almaraz, Steve Almaraz, Richard Raskin (“Raskin”) and DOES 1-20, alleging a single cause of action for breach of contract.

On February 20, 2025, defendants S&P and David Almaraz filed a joint answer to the complaint.

On April 17, 2025, defendants Lenzo and Raskin filed a joint answer to the complaint.

May 23, 2025, defendants S&P, David Almaraz, Steve Almaraz, Raskin, and Lenzo (collectively, “Moving Defendants”) filed the instant motion for judgment on the pleadings. The motion is made on the grounds that the cause of action asserted against defendants David Almaraz, Steve Almaraz, Raskin, and Lenzo “fails to state facts sufficient to constitute a cause of action against them.” (Not. of Mot. at p. 2:3-6.)

“In ruling on a common law motion for judgment on the pleadings made by a defendant, a trial court determines what has been called a pure question of law.” (Smiley v. Citibank (1995) 11 Cal.4th 138, 145.) In assessing a common law motion for judgment on the pleadings, “the trial court generally confines itself to the complaint and accepts as true all material facts alleged therein . . . .” (Id. at p. 146.) “As appropriate, however, it may extend its consideration to matters that are subject to judicial notice.” (Ibid.) “In this, it essentially performs the same task it would undertake in ruling on a general demurrer.” (Ibid.) “A common law motion for judgment on the pleadings ha[s] the purpose and effect of a general demurrer.” (Ibid.) A non-statutory motion for judgment on the pleadings may be made prior to trial. (Sofias v. Bank of America (1985) 172 Cal.App.3d 583, 585.) “[T]o prevail on a motion for judgment on the pleadings, a defendant must show a complaint fails to state a cause of action.” (Id. at p. 586.)

Before filing a motion for judgment on the pleadings, the moving party shall meet and confer in person, by telephone, or by video conference with the party who filed the pleading that is subject to the motion for judgment on the pleadings for the purpose of determining if an agreement can be reached that resolves the claims to be raised in the motion for judgment on the pleadings. (Code Civ. Proc., § 439, subd. (a).) “A determination by the court that the meet and confer process was insufficient shall not be grounds to grant or deny the motion for judgment on the pleadings.” (Code Civ. Proc., § 439, subd. (a)(4).)

Counsel for Moving Defendants, Thomas Dreblow (“Dreblow”), provides a declaration in support of the motion. Mr. Dreblow attests that “[o]n April 16, 2025, the Individual Defendants’ counsel sent a letter to Plaintiff’s counsel identifying their failure to properly allege alter ego.” (Dreblow Decl. ¶ 2, Exh. A.) On April 25, 2025, counsel for Plaintiff indicated that Plaintiff would “not only not withdraw their claim but will continue to pursue the alter ego allegation against the Individual Defendants.” (Dreblow Decl. ¶ 3, Exh. B.)

The Court finds that the meet and confer requirement has not been satisfied as the parties did not meet and confer in person, by telephone, or by video conference prior to Moving Defendants filing the instant motion. The Court, however, will still consider the merits of the motion. The parties are reminded to comply with the requirements of the Code of Civil Procedure.

The Court finds it necessary to set forth the pertinent allegations of the complaint. The complaint alleges, inter alia, that “Plaintiff is, and at all times herein was, the owner of the property located at 12050 Ventura Blvd., Suite A207, Studio City, California (‘the premises’).” (Compl. ¶ 2.) Defendants Dermenzhi, Lenzo, Raskin, David Almaraz, and Steve Almaraz (collectively, the “Individual Defendants”) are alleged to be “members, principals, or otherwise have or had ownership interests in [defendant S&P].” (Compl. ¶ 4.) Plaintiff alleges that the Individual Defendants were liable for the acts of defendant S&P and that the Individual Defendants are each alter egos of defendant S&P. (Compl. ¶ 6.)

“[The Individual Defendants] dominated and controlled [S&P] and created a unity of interest and ownership between themselves and [S&P], such that the individuality or separateness of them from [S&P] has ceased and their separate personalities do not exist in reality. Plaintiff is informed and believes and based thereon alleges that, among other things, [the Individual Defendants] have failed adequately capitalize [S&P]; commingled their funds and assets with [S&P’s] for their own convenience and to assist in evading [S&P’s] obligations; diverted funds and other assets of [S&P] to other than LLC uses; treated the assets of [S&P] as their own; failed to maintain LLC documents, records and other formalities; controlled [S&P] for their own individual benefit; used [S&P] as a mere shell, instrumentality, or conduit to avoid liability; diverted assets from [S&P] to themselves; and contracted with Plaintiff and other parties with the intent to avoid performance by use of the LLC entity as a shield against liability. Plaintiff is further informed and believed that [the Individual Defendants] have drained [S&P] of its assets such that there are no funds to pay [S&P’s] debts to Plaintiff or others. Recognition of the privilege of [S&P] as an entity separate from [the Individual Defendants] would be to approve of fraud and/or promote injustice and lead to inequitable results.”

Plaintiff further alleges that, “[o]n or about June 21, 2019, Plaintiff and [S&P] entered

into a ten (10) year commercial lease for possession of the premises (the ‘Lease’). The Lease term was set for December 21, 2019 through December 21, 2029.” (Compl. ¶ 9, Exh. 1.) “On or about June 1, 2022, the Lease was amended by the ‘First Amendment to Lease.’ The First Amendment provided for partial abatement of rent, which was credited to tenant.” (Compl. ¶ 10, Exh. 2.) “On or about May 1, 2023, the Lease was further amended by the ‘Second Amendment to Lease.’ The Second Amendment to the Lease allowed for change of use and provided a rent deferment for the months of May, June and July, 2023, to be paid back by payments starting in January, 2024.” (Compl. ¶ 11, Exh. 3.) “On or about August, 2023, Defendants began paying less than the amount of the monthly sums due pursuant to the Lease.” (Compl. ¶ 12.)

Plaintiff alleges that “[o]n or about June 25, 2024, Plaintiff filed an Unlawful Detainer action against [S&P] in the Los Angles Superior Court, case number 24 NNCV 02488 (the ‘Unlawful Detainer’)[.]” (Compl. ¶ 13.) “On or about September 4, 2024, Plaintiff and [S&P] entered into a Stipulation for Judgment in the Unlawful Detainer action, for possession of the premises only. All rights were reserved to collect rent and other damages due and to file a civil action for damages.” (Compl. ¶ 14, Exh. 4.) “On or about September 18, 2024, [S&P] vacated the premises. At the time of vacating the premises, [S&P] owed approximately $209,054.00 in back rent and other charges.” (Compl. ¶ 15.) Plaintiff alleges that “Plaintiff has used all reasonable commercial efforts and diligently to re-lease the space, but as of this date, the premises remain vacant. The future rent and other charges owed for the premises through the end of the lease is approximately $975,000.00.” (Compl. ¶ 16.)

Moving Defendants contend that the alter ego allegations are insufficient as it concerns the Individual Defendants. Plaintiff asserts that the complaint satisfies California’s pleading standards in alleging alter ego.

“To recover on an alter ego theory, a plaintiff need not use the words ‘alter ego,’ but must allege sufficient facts to show a unity of interest and ownership, and an unjust result if the corporation is treated as the sole actor.” (A.J. Fistes Corp. v. GDL Best Contractors, Inc. (2019) 38 Cal.App.5th 677, 687.) As stated in Ming-Hsiang Kao v. Holiday (2020) 58 Cal.App.5th 199:

“Factors a trial court may consider when deciding unity of interest and whether the

fiction of a separate existence would promote fraud and injustice include the following:

commingling of funds and other assets . . . ; the treatment by the individual of the assets of the corporation as his own [citations]; . . . the failure to maintain . . . adequate corporate records . . . ; . . . sole ownership of all the stock in a corporation by . . . the members of a family [citations]; . . . the use of a corporation as a mere shell, instrumentality or conduit for a single venture or the business of an individual . . . ; . . . [the] concealment of personal business activities [citations]; the use of the corporate entity to procure labor, services or merchandise for another person or entity [citations]; . . . or the use of a corporation as a subterfuge of illegal transactions.” (Ming-Hsiang Kao v. Holiday, supra, 58 Cal.App.5th 199, 206.)

“Alter ego is an extreme remedy, sparingly used.” (Highland Springs Conference &

Training Center v. City of Banning (2016) 244 Cal.App.4th 267, 281 (Highland Springs).) “The standards for the application of alter ego principles are high, and the imposition of [alter ego] liability . . . is to be exercised reluctantly and cautiously.” (Ibid.)

Initially, the Court finds that Plaintiff’s reliance on Doe v. City of Los Angeles (2007) 42 Cal.4th 531, Thomas v. Regents of University of California (2023) 97 Cal.App.5th 587, and Smith v. Kern County Land Co. (1958) 51 Cal.2d 205 are all inapposite as neither case addressed the pleading requirements for the imposition of alter ego liability.

The Court references its recitation of the allegations of the complaint from above and incorporates such recitation herein. The Court finds that the alter ego allegations are much too conclusory. Plaintiff has merely articulated the factors for imposition of alter ego liability in a conclusory manner. (Compl. ¶ 6.) However, sufficient facts must be alleged for the imposition of alter ego liability pursuant to Highland Springs, supra, 244 Cal.App.4th 267, 281.

Moving Defendants assert that Plaintiff is estopped from making alter ego allegations against the Individual Defendants because “Plaintiff previously sued [S&P] alone in the UD without alleging it was the alter ego of any of the Individual Defendants.” (Memo. of Ps and As at p. 6:13-14.) Plaintiff contends that estoppel does not apply because unlawful detainer cases do not prevent Plaintiff from asserting causes of action in a later breach of contract suit. (Opp’n at pp. 6-8.)

“An estoppel to deny corporate existence may arise from an express or implied admission of the fact in an action or proceeding brought by or against an alleged corporation.” (Wynn v. Treasure Co. (1956) 146 Cal.App.2d 69, 76.) “One who sues an alleged corporation as such thereby necessarily admits that it is a corporation, and is estopped to deny its corporate existence either in that action, or in a subsequent action against the members or corporators on the same liability based upon the ground that the corporation was not legally organized.” (Ibid.) “The remedy of unlawful detainer is designed to provide means by which the timely possession of premises which are wrongfully withheld may be secured to the person entitled thereto.” (Knowles v. Robinson (1963) 60 Cal.2d 620, 625.) “The summary character of the action would be defeated if, by cross-complaint or counterclaim, issues irrelevant to the right of immediate possession could be introduced.” (Ibid.) “The rule is firmly established in California that neither a cross-complaint nor a counterclaim may be properly filed in a suit for unlawful detention of property, even though the alleged cause therein grows out of the subject matter involved in the original suit.” (Ibid.) “The requirement to allege all related claims does not apply in unlawful detainer actions, however, unless one of two things happens: the tenant (1) files a cross-complaint or (2) files an answer to any amended complaint the landlord files after the case becomes a regular civil action.” (Duncan v. Kihagi (2023) 96 Cal.App.5th 703, 710.)

The Court finds that the unlawful detainer action does not preclude Plaintiff from making alter ego allegations in the instant action. In the unlawful detainer action, Plaintiff and S&P stipulated that “Plaintiff reserves all rights to any damages from [S&P’s] tenancy and the Lease . . . and nothing contained herein shall be a waiver of Plaintiff’s rights to claim and/or collect damages.” (Compl., Exh. 4 at p. 2.) Here, there is no indication that S&P filed a cross-complaint in the unlawful detainer action or that S&P filed an answer to an amended complaint in the instant action. Thus, under Duncan v. Kihagi, supra, 96 Cal.App.5th 703, 710, Plaintiff was not required to name the Individual Defendants in the underlying unlawful detainer action.

Therefore, the Court finds that Plaintiff is not estopped from making alter ego allegations in the instant action.

“[T]rial courts should exercise great liberality in permitting amendments to pleadings in order that cases be tried on their merits . . . .” (Robinson & Wilson, Inc. v. Stone (1973) 35 Cal.App.3d 396, 413.) “The right to amend a pleading should be denied if it appears to a certainty that no relief could possibly be granted under the amended pleading.” (Ibid.)

The Court finds that leave to amend is appropriate. Plaintiff may allege facts which, if proven true, would state sufficient alter ego allegations.

As such, the Court GRANTS Moving Defendants’ motion for judgment on the pleadings with leave to amend.

Accordingly, the motion for judgment on the pleadings is GRANTED with 20 days leave to amend.

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.

Hon. Thomas D. Long

Judge of the Superior Court