Judge: Wesley L. Hsu, Case: 22PSCV00430, Date: 2023-05-03 Tentative Ruling

Case Number: 22PSCV00430    Hearing Date: May 3, 2023    Dept: L

1. Defendants Gordes Hospitality Inc.’s, LVGEM Hotel Corporation’s and Ganyu Huang’s

Demurrer to Plaintiffs’ First Amended Complaint is SUSTAINED. The court will hear from counsel for Plaintiffs as to whether leave to amend is requested, and as to which cause(s) of action, and will require an offer of proof if so.

 

2. Defendants Gordes Hospitality Inc.’s, LVGEM Hotel Corporation’s and Ganyu Huang’s

Motion to Strike Portions of Plaintiffs’ First Amended Complaint is DENIED as MOOT.

 

Background   

 

Plaintiffs Zia Abhari (“Abhari”) and Amir Shamloo (“Shamloo”) (together, “Plaintiffs”) allege as follows: On May 2, 2020, Gordes Hospitality, Inc. (“Gordes”), through Ganyu Huang aka Gary Huang (“Huang”), and Shamloo, with Abhari serving as a silent partner, entered into an “Asset Purchase Agreement” and a “Security Agreement” with Gordes for the transfer of ownership of Hamilton’s Steakhouse (“Hamilton”) from Gordes, as seller, to Plaintiffs, as buyers. On June 18, 2020, LVGEM Hotel Corporation (“LVGEM”), through Huang, and Shamloo, with Abhari serving as a silent partner of Shamloo, entered into a “Lease Agreement” for the lease of the property upon which Hamilton is located. Gordes, LVGEM and Huang have refused to transfer the existing liquor license for Hamilton to Plaintiffs, failed to provide Plaintiffs with the insurance information and have undertaken efforts to deprive Plaintiffs of their real estate leasehold possessory interest in the premises upon which the Hamilton is located.

 

 

On January 30, 2023, Plaintiffs filed two “Amendment[s] to Complaint,” wherein Jing Qiu Kwok (“Kwok”) was named in lieu of Doe 1 and Winsome CPA, Inc. (“Winsome”) was named in lieu of Doe 2.

 

On February 27, 2023, Plaintiffs filed a First Amended Complaint, asserting causes of action against Gordes, LVGEM, Huang, Kwok, Winsome and Does 3-100 for:

 

1.      Breach of Written Contract

2.      Tortious Breach of the Implied Covenant of Good Faith and Fair Dealing

3.      Fraud by False Promise

4.      Inducing Breach of Contract

5.      Intentional Interference with Contractual Relations

6.      Negligent Misrepresentation

 

A Case Management Conference is set for May 18, 2023.

 

1. Demurrer to FAC

 

Legal Standard

 

A demurrer may be made on the grounds that the pleading, inter alia, does not state facts sufficient to constitute a cause of action and/or is uncertain. (Code Civ. Proc., § 430.10, subds. (e)&(f).)

 

When considering demurrers, courts read the allegations liberally and in context. 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 [citations omitted].) At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) “[A] demurrer does not, however, admit contentions, deductions or conclusions of fact or law alleged in the pleading, or the construction placed on an instrument pleaded therein, or facts impossible in law, or allegations contrary to facts of which a court may take judicial knowledge.” (S. Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732 [citations omitted].)

 

Discussion

 

Gordes, LVGEM and Huang demur, per Code of Civil Procedure § 410.30, subdivisions (e) and (f), to the first through third causes of action in Plaintiffs’ FAC.

 

First Cause of Action (i.e., Breach of Written Contract)

 

“[T]he elements of a cause of action for breach of contract are (1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)

 

Plaintiffs have alleged the existence of three written contracts, including an “Asset Purchase Agreement,” a “Security Agreement” and a “Lease Agreement.” Plaintiffs have not attached any of the aforesaid agreements to the FAC, but instead indicate that they were attached as Exhibits 1-3, respectively, to their original complaint and that “[e]ach of these three Exhibits is incorporated herein by reference, as though fully set forth here at. (FAC, ¶ 13, 4:11-12.) This is insufficient, inasmuch as this statement reflects that the FAC itself is not a full and complete pleading. “An amended complaint supersedes the original and furnishes the sole basis for the cause of action. The original complaint is dropped out of the case and ceases to have any effect as a pleading, or as a basis for a judgment.” (Anmaco, Inc. v. Bohlken (1993) 13 Cal.App.4th 891, 901 [quotation marks and citation omitted].) The parties and the court should not have to refer back to a pleading which has ben superceded to review the Agreements in issue.

 

Further, there are no allegations as to how each of the defendants allegedly breached each of the three Agreements; instead, they are lumped together.

 

Additionally, the court agrees that the instant cause of action should be separated into three separate and distinct causes of action in any future pleading.

 

Gordes’, LVGEM’s and Huang’s demurrer to the first cause of action is sustained.

 

Second Cause of Action (i.e., Tortious Breach of the Implied Covenant of Good Faith and Fair Dealing)

 

Gordes’, LVGEM’s and Huang’s demurrer to the second cause of action is summarily sustained on the basis that it is predicated on the defectively pled first cause of action.

 

Third Cause of Action (i.e., Fraud by False Promise)

 

“The essential allegations of an action for fraud are a misrepresentation, knowledge of its falsity, intent to defraud, justifiable reliance, and resulting damage.” (Roberts v. Ball, Hunt, Hart, Brown & Baerwitz (1976) 57 Cal.App.3d 104, 109.) “Fraud must be pleaded with specificity…[t]o withstand a demurrer, the facts constituting every element of the fraud must be alleged with particularity, and the claim cannot be salvaged by references to the general policy favoring the liberal construction of pleadings.” (Goldrich v. Natural Y Surgical Specialties, Inc. (1994) 25 Cal.App.4th 772, 782 [emphasis in original].) “This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.” (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73 [emphasis in original; quotation marks and citation omitted].)

 

“The requirement of specificity in a fraud action against a corporation requires the plaintiff to allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.” (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.)

Plaintiffs have failed to plead this cause of action with the required specificity. Plaintiffs have failed to identify the “how, when, where, to whom, and by what means” regarding the “promises” made to Plaintiffs, nor have they identified the individual who purportedly made these promises on behalf of the corporate defendants.

 

Incidentally, the court declines to address Gordes’, LVGEM’s and Huang’s contention that the third cause of action is barred by the economic loss rule inasmuch as they provide no discussion as to how this is so.

 

Gordes’, LVGEM’s and Huang’s demurrer to the third cause of action is sustained.

 

2. Motion to Strike Portions of FAC

 

Gordes’, LVGEM’s and Huang’s motion to strike is denied as moot, based on the ruling made on the demurrer.