Judge: Virginia Keeny, Case: 22VECV00712, Date: 2022-09-30 Tentative Ruling
Case Number: 22VECV00712 Hearing Date: September 30, 2022 Dept: W
USb leasing lt VS. BENJAMIN
GABAYAN; B&F PARADISE INC., DBA STAR MOTORS
defendants’ demurrer to plaintiff’s complaint
Date of Hearing: Sept. 30, 2022 Trial
Date: None Set
Department: W Case
No.: 22VECV00712
Moving
Party: Defendants BENJAMIN
GABAYAN; B&F PARADISE INC. dba STAR MOTORS
Responding Party: Plaintiff USC LEASING LT
BACKGROUND
This action arises from defendants’ alleged
wrongful possession of a 2019 Range Rover (“the vehicle”). Plaintiff claims to
be the lienholder and legal owner of the vehicle. (Compl. ¶¶ 13-14 and 21.)
Plaintiff alleges defendants have been
in wrongful possession of the vehicle since April 21, 2022. (Id. ¶ 15.) Why
or how defendants took possession of it is somewhat unclear from the complaint.
In fact, plaintiff alleges it has not been “provided any explanation as to how
Plaintiff’s Vehicle came into [defendants’] possession.” (Id. ¶ 21.)
However, plaintiff alleges that on April 22 it learned “the Vehicle was still
located at Defendants’ body shop” (Id. ¶ 16, italics added), suggesting
there is some prior explanation for how the vehicle got to the shop. Plaintiff
also briefly chronicles its efforts to contact “Defendants’ employee … who
handles impounds,” but does not explain why the vehicle might have been
impounded. (Id. ¶ 16.)
Regardless, plaintiff allegedly
attempted to negotiate a return of the vehicle beginning April 22, 2022, the
day after defendants took possession. (Id. ¶¶ 16-19.) Negotiations were
unsuccessful, and so plaintiff filed its complaint on May 26, 2022.
Plaintiff alleges seven causes of
action against the defendants: for (1) claim and delivery; (2) violation of
Civil Code section 3068; (3) violation of Vehicle Code section 10652.5; (4)
violation of Civil Code section 3071; (5) violation of Vehicle Code section
22651.07; (6) conversion; and (7) declaratory relief (as to only the corporate
defendant).
Plaintiff has sued Benjamin Gabayan,
and individual, and B&F Paradise, Inc. d/b/a Star Motors (“Star Motors”). Plaintiff
alleges Star Motors operates as an alter ego to Gabayan for the purposes of its
complaint. (Compl. ¶¶ 6-7.)
Defendants demurred to and moved to
strike portions of plaintiff’s complaint on August 24, 2022. No opposition has
been filed with the court. Defendants filed notices of non-opposition to their
demurrer on September 22.
Simultaneously with their
non-opposition notices, defendants filed a reply. The reply states they were
served with opposition papers September 21, two calendar days after the
deadline for filing and service had passed. However, no opposition was ever
filed with the Court.
[Tentative] Ruling
Defendants’ demurrer is SUSTAINED
WITHOUT leave to amend the complaint.
Defendants’ motion to strike is DENIED
as moot.
LEGAL
STANDARD
Where
pleadings are defective, a party may raise the defect by way of a demurrer. (Coyne
v. Krempels (1950) 36 Cal.2d 257, 262.) A demurrer for sufficiency tests
whether the complaint alleges facts sufficient to constitute a cause of action.
(Cal. Code Civ. Proc. § 430.10; Young v. Gannon (2002) 97 Cal.App.4th
209, 220.) A demurrer for uncertainty lies where the pleading is uncertain,
including where the pleading is ambiguous or unintelligible. (Code Civ. Proc. §
430.10, subd. (f); Landau v. Salam (1971) 4 Cal.3d 901, 909.) To survive
demurrer, a plaintiff must set forth the essential facts of his case with
reasonable precision and with particularity sufficient to acquaint a defendant
with the nature, source, and extent of his cause of action. (See Semole v.
Sansoucie (1972) 28 Cal.App.3d 714, 719.)
The
grounds for the demurrer must appear on the face of the pleading or from
judicially noticeable matters. (Cal. Code. Civ. Proc. § 430.30, subd.
(a); Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The court “may consider
all material facts pleaded in the complaint and those arising by reasonable
implication therefrom; it may not consider contentions, deductions or
conclusions of fact or law.” (Young v. Gannon (2002) 97 Cal.App.4th 209,
220, citing Moore v. Conliffe (1994) 7 Cal.4th 634, 638; Montclair Parkowners’ Association
v. City of Monclair (1999) 76
Cal.App.4th 784, 790.) For the purposes of demurrer, the court treats all facts
alleged in the complaint as true. (Picton v. Anderson Union High School District
(Picton) (1996) 50
Cal.App.4th 726, 732.) The court does not consider whether a plaintiff will be
able to prove the allegations, or the possible difficulty in making such proof.
(Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 604.)
As
a general matter, when considering demurrers, courts “are required to construe
the complaint liberally to determine whether a cause of action has been stated,
given the assumed truth of the facts pleaded.” (Picton, supra,
at p. 733, citing Rogoff v. Grabowski (1988) 200 Cal.App.3d 624, 628.) As long as a party
shows there is “a reasonable possibility any defect identified by the defendant
can be cured by amendment,” the trial court should grant leave to amend the
pleadings when sustaining a demurrer. (Aubry v. Tri-City Hospital District (1992)
2 Cal.4th 962, 967.) However,
“[d]oubt in the complaint may be resolved against [the] plaintiff and facts not
alleged are presumed not to exist”, (Kramer v. Intuit, Inc. (2004) 121
Cal.App.4th 574, 579), and “[t]he burden is on the
plaintiff to demonstrate the manner in which the complaint can be amended” such
that it can survive demurrer. (Ross v. Creel Printing & Publishing
Company (2002) 100 Cal.App.4th 736, 748.)
ANALYSIS
Plaintiff’s
complaint is fatally uncertain because it fails to distinguish between the defendants.
Defendant demurs to all plaintiffs’ causes of
action on the grounds that plaintiff “has filed this lawsuit … against TWO
different parties” but only refers to “ ‘defendants’ (the plural)”, causing “absolute
uncertainties as to which specific ‘defendant’ committed what alleged act.”
(Dem. 5:21-24.)
A party may demur to a complaint where “[t]he
pleading is uncertain,” meaning also that it is “ambiguous [or] unintelligible.”
(Cal. Code Civ. Proc. § 430.10, subd. (f).) The law encourages courts to
liberally construe pleadings and disfavors demurrers for uncertainty. (Morris v. JPMorgan Chase Bank, N.A. (2022) 78 Cal.App.5th 279. 292.) That said, where the complaint does
not properly distinguish between multiple defendants, such that it is not clear
which factual allegations are made as to which parties, the complaint fails for
ambiguity. (See Hawley Bros.
Hardware Co. v. Brownstone (1899) 123 Cal. 643, 646-647.) Similarly,
allegations made against multiple defendants are fatally uncertain where plaintiff
alleges the same harm against multiple defendants but makes no effort to either
apportion their liability or show why it cannot be apportioned in the
complaint. (See Landau v.
Salam (1971) 4 Cal.3d 901, 909.)
Here, plaintiff has named Benjamin Gabayan and his
company both as defendants. However, plaintiff refers to both defendants
collectively throughout the complaint, even where the collective reference
renders the facts inconsistent or nonsensical. The defendants note, for
instance, that plaintiff alleges it sent a demand letter to “defendants,” but
the letter, attached as an exhibit to the complaint, is addressed only to Star
Motors. (Dem. 5:27-28; Compl. Ex. 3.) Plaintiff also refers to conversations it
had with “Defendants’ employee”, raising uncertainty as to whether the person
in question was employed by Star Motors, by Gabayan in his individual capacity,
or both. Plaintiff repeatedly alleges that “defendants” took possession of his
vehicle, leaving open the question of whether Gabayan did so individually or
somehow in association with Star Motors.
Such uncertainty does not provide defendants
adequate opportunity to respond to plaintiffs’ complaint or admit or deny the
allegations therein. A proper pleading must “as a whole apprise[ ] the
adversary of the factual basis of the claim.” (4 Witkin, Cal. Proc. (6th ed.
2022) Pleading, § 392.) Plaintiff’s complaint does not do so here.
Plaintiff’s
allegations of alter ego liability fail for lack of specificity.
Plaintiff alleges that the two co-defendants acted
as alter egos of one another, which may explain its reference to them
collectively throughout the complaint. (See Compl. ¶¶ 5-7.) However, plaintiff
makes no factual allegations regarding the defendants’ purported alter-ego
relationship. “ ‘To recover on an alter ego theory, a plaintiff … 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 (2019) 38 Cal.App.5th 677, 696, quoting
Leek v. Cooper (2011) 194 Cal.App.4th 399, 415,
italics added.) In the relevant portion of its complaint plaintiff states only
conclusions. It lists the requisite legal factors for alter-ego liability, but
alleges no concrete facts in support of its claims.
Additionally, even if plaintiff were to plead
concrete facts supporting its conclusory allegations of alter-ego liability, the
generally stated allegations would not be sufficient to rescue the complaint as
it is currently pled. Piercing the corporate veil to prevent injustice in a
particular cause of action does not establish a complete unity of personality
between an individual and a corporation in all circumstances. (See Shapoff v. Scull (1990) 222 Cal.App.3d 1457, 1469-1470.)
Thus, even if the plaintiff alleged Gabayan should be held liable here as the
alter ego of Star Motors, that shared liability would not mean that they shared
every action alleged in the complaint. It would remain ambiguous and uncertain from
the facts alleged whether, for instance, as noted above, Star Motors wrongfully
took possession of plaintiffs’ vehicle, and Gabayan is liable for Star Motors’
actions; or whether Star Motors and Gabayan together conspired to take the
vehicle; or whether Gabayan took the vehicle himself as an individual, but he is
joined here because he caused plaintiff injuries that arise from shared facts.
Plaintiffs’
seventh cause of action suffers from the same uncertainty even though it is
alleged only against Star Motors.
Plaintiff claims declaratory relief only from Star
Motors in its seventh cause of action, and refers to “Defendant” in the singular
in that portion of the complaint, which partially clarifies the ambiguities
noted above. (Compl. ¶¶ 70-73.) However, the seventh cause of action suffers
from similar ambiguity because it rests largely on allegations incorporated
from the rest of the complaint. (See id. ¶ 70.) Apart from the incorporated portion, the seventh cause of
action only recites the elements necessary for a declaratory judgment. A
demurrer lies where “[a] pleading does not state facts sufficient to constitute
a cause of action.” (Code Civ. Proc. § 430.10, subd. (e).) Plaintiff’s seventh
cause of action cures some ambiguity by referring specifically to a single
defendant, but it contains no factual allegations at all, and it therefore
fails to state a cause of action.
Plaintiff has
not demonstrated that the defects in the complaint may be cured by amendment.
As set forth above, while
the courts grant parties leave liberally to amend pleadings, the burden is on
the party responding to a demurrer to show the defects in its pleading can be
cured by amendment. (Ross v. Creel Printing & Publishing Company
(2002) 100 Cal.App.4th 736, 748.) Plaintiff here has not filed an
opposition or requested leave to amend, and therefore has not demonstrated that
its pleading can be amended to survive demurrer. The Court does not offer
plaintiff leave to amend its complaint.
CONCLUSION
Plaintiff’s
complaint fails for uncertainty, primarily because it does not distinguish
between its two named defendants in any of its factual allegations. Plaintiff’s
conclusory allegations of an alter-ego relationship between the defendants does
not satisfy pleading standards for such a relationship. Even if the
relationship were sufficiently pled, it would not justify joining the two
defendants for the purpose of every factual allegation in the complaint. In
addition, plaintiff has not filed an opposition or requested leave to amend,
and therefore has not carried its burden to demonstrate it can cure the defects
in the complaint by amendment.
The
Court SUSTAINS defendants’ demurrer to all plaintiff’s causes of action WITHOUT
leave to amend the complaint.