Judge William A. Crowfoot, Case Number: 22AHCV00192, Date: 2023-09-20 Tentative Ruling

Judge: William A. Crowfoot, Case: 22AHCV00192, Date: 2023-09-20 Tentative Ruling

On April 4, 2022, plaintiff Pauline Yip (“Yip”) filed this action (the “Lead Case”) against Eastern Horizon LLC (“Eastern Horizon”) for breach of contract relating to a single-family residence located at 37 Twiggs in Irvine, California (the “Subject Property”). Yip alleges that Eastern Horizon refuses to sell the Subject Property to her at an agreed-upon price. On August 9, 2022, Eastern Horizon filed a cross-complaint relating to the Subject Property against Yip and Home Surface, Inc. dba Spectrum Realty (“Spectrum”) for breach of a lease agreement and listing agreement, breach of the implied covenant of good faith and fair dealing, breach of fiduciary duty, and declaratory relief.

On August 9, 2023, this action was deemed related to the action captioned Pauline Yip v. Eastern Horizon, LLC, et al. (Case No. 23STCV18152) (the “Related Case”). This Related Case is brought against Eastern Horizon, Chong Ding aka Virginia Ding (“Ding”), and Joy Wang as the trustee of the 2004 Anchen Gift Trust Dated December 23, 20024 (“Wang”). Yip asserts claims for: (1) fraud, (2) negligent misrepresentation, (3) quiet title, (4) cancellation of instrument, (5) declaratory relief, and (6) equitable indemnity relating to the same Subject Property underlying the Lead Case.

On August 23, 2023, Yip filed a motion to consolidate the Lead Case and the Related Case for all purposes, including trial. On September 20, 2023, the Court granted the motion to consolidate. On December 28, 2023, defendants Eastern Horizon, Ding, and Wang (collectively, “Defendants”) filed a notice of a new hearing date on their demurrer to the complaint in the Related Case. Defendants refiled their demurrer on January 3, 2024. Yip filed an opposition brief on February 2, 2024, and Defendants filed a reply brief on February 7, 2024.

Eastern Horizon and Ding demur to the First, Second, Third, Fourth, and Fifth Causes of Action on the grounds that: (1) there is another action pending between the parties and (2) it is a “sham pleading.” Wang also demurs to the Third, Fourth, and Fifth Causes of Action on those grounds, and separately demurs to these causes of action due to a “defect and/or a misjoinder of parties.” (Demurrer, pp. 3-4.)

Defendants request judicial notice of the complaint filed in the Lead Case. The request is GRANTED. (Evid. Code, § 452, subd. (d).)

A demurrer tests the legal sufficiency of the pleadings and will be sustained only where the pleading is defective on its face. (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 459.) “We treat the demurrer as admitting all material facts properly pleaded but not contentions, deductions or conclusions of fact or law. We accept the factual allegations of the complaint as true and also consider matters which may be judicially noticed. [Citation.]” (Mitchell v. California Department of Public Health (2016) 1 Cal.App.5th 1000, 1007; Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604 [“the facts alleged in the pleading are deemed to be true, however improbable they may be”].) Allegations are to be liberally construed. (Code Civ. Proc., § 452.) A demurrer may be brought if there is another action pending between the same parties on the same cause of action or if insufficient facts are stated to support the cause of action asserted. (Code Civ. Proc., § 430.10, subds. (c), (e).) A demurrer may also be brought if there is a defect or misjoinder of parties. (Id., subd. (d).)

The Lead Case and the Related Case have been consolidated into one action for all purposes, including trial. Therefore, Defendants’ demurrer to the complaint filed in the Related Case on the grounds that the Lead Case is pending is OVERRULED.

Defendants argue that the complaint in the Related Case is a “sham pleading” because it is premised on facts which are “fundamentally inconsistent” with the facts alleged in the complaint filed in the Lead Case. The Court disagrees. In the Lead Case, Plaintiff seeks to enforce the terms of a sale/leaseback agreement, which had an option to repurchase. In the Related Case, Plaintiff seeks to quiet title and asserts other claims rooted in fraud as alternatives in the event that no contract is found to exist. ‘“When a pleader is in doubt about what actually occurred or what can be established by evidence, the modern practice allows that party to plead in the alternative and make inconsistent allegations.” (Mendoza v. Continental Sales Co. (2006) 140 Cal.App.4th 1395, 1402.) As stated by Plaintiff, “[b]oth pleadings state that defendants, notwithstanding their representations made to Plaintiff and contractual obligation, failed to allow Plaintiff to buy back the Subject Property for the ‘original price’ in 2018, conduct which potentially gives rise to fraud or breach of contract. While both pleadings state different causes of action which might be legally inconsistent, the allegations in the pleadings are not contradictory.” (Opp., pp. 4-5.)

Last, Defendants argue that Wang is improperly joined in this action because Plaintiff fails to allege that Wang (or the Trust) claim an ownership interest in the Property. Wang argues she is improperly included as a defendant in Plaintiff’s Third Cause of Action for Quiet Title, Fourth Cause of Action for Cancellation of Instrument, and Fifth Cause of Action for Declaratory Relief.

Plaintiff alleges, as part of her Third Cause of Action for Quiet Title that all “[d]efendants [including Wang, as trustee of the Trust], and each of them, assert adverse claims of title in the Subject Property.” (Complaint, ¶ 95.) Therefore, Wang’s demurrer to the Third Cause of Action for Quiet Title is OVERRULED. As part of her Fifth Cause of Action, Plaintiff also alleges that “[a] dispute has arisen and an actual controversy exists between Plaintiff and Defendants, and each of them [including Wang, as trustee of the Trust], concerning the legal effect and existence of the recorded grant deed, as well as the ownership title of the Subject Property.” (Compl., ¶ 102.) The Court additionally notes in 2012, the Trust held title to the Property while Plaintiff was its trustee and paying off a loan to Ding. (Compl., ¶¶ 21-22.) (Compl., Ex. A.) Plaintiff’s complaint also attaches an executed grant deed transferring the legal title of the Property from the Trust to herself. (Compl., Ex. B.) Accordingly, Wang’s demurrer to the Fifth Cause of Action is OVERRULED.

Lastly, the Court agrees that Plaintiff fails to state sufficient facts to constitute a cause of action for cancellation of instrument against Wang or the Trust. The grant deed recorded on October 3, 2018, which Plaintiff seeks to cancel, transferred the property from Plaintiff to Eastern Horizon. Wang’s demurrer to the Fourth Cause of Action is sustained without leave to amend.

The demurrer is SUSTAINED without leave to amend only with respect to Plaintiff’s Fourth Cause of Action asserted against Wang. The demurrer is otherwise OVERRULED.

William A. Crowfoot

Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the Court at ALHDEPT3@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue. If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.