Judge: William A. Crowfoot, Case: 22AHCV00668, Date: 2023-02-08 Tentative Ruling
Case Number: 22AHCV00668 Hearing Date: February 8, 2023 Dept: 3
SUPERIOR COURT OF THE STATE OF
CALIFORNIA
FOR THE COUNTY OF LOS ANGELES - NORTHEAST
DISTRICT
|
Plaintiff, vs. Defendants. |
) ) ) ) ) ) ) ) ) ) ) |
[TENTATIVE]
ORDER RE: DEFENDANTS’ DEMURRERS Dept.
3 8:30
a.m. February
8, 2023 |
I.
INTRODUCTION
On
On October 14, 2022, Dilys Jones, Trustee of the
Louis C. Petrie Separate Property Trust (“LP Trust”) filed a demurrer as to
each cause of action (“LP Trust Demurrer”). On November 14, 2022, Defendant
Tang (“Tang”) filed a demurrer as to the entire complaint and a motion to
strike (“Tang Demurrer” and “Tang Motion to Strike”). On January 10, 2023, Plaintiff
filed an opposition to each demurrer and to the motion to strike. On January
19, 2023, Defendant Tang filed a reply.
This ruling addresses each of the LP Trust and
Tang Demurrers and the Tang Motion to Strike.
II.
LEGAL
STANDARD
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
insufficient facts are stated to support the cause of action asserted. (Code Civ. Proc., § 430.10, subd. (e).)
Leave to amend must be allowed where there is a
reasonable possibility of successful amendment.
(Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the complainant to show the
Court that a pleading can be amended successfully. (Ibid.)
III.
DISCUSSION
Meet and Confer
Before filing a demurrer or motion to strike, the
demurring or moving party shall meet and confer with the party who has filed
the pleading and shall file a declaration detailing their meet and confer
efforts. (Code Civ. Proc., §§ 430.41, subd. (a); 435.5, subd.
(a).)
Both Defendants have filed the appropriate meet and confer declaration.
(Holman Decl. ¶¶ 2-3; Lo Decl. ¶¶ 5-7.)
First Cause of Action: Breach of Contract
To state a cause of action for breach of
contract, Plaintiff must be able to establish “(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.) If a breach of contract claim “is based on alleged breach
of a written contract, the terms must be set out verbatim in the body of the
complaint or a copy of the written agreement must be attached and incorporated
by reference.” (Harris v. Rudin, Richman
& Appel (1999) 74 Cal.App.4th 299, 307.) In some circumstances, a
plaintiff may also “plead the legal effect of the contract rather than its
precise language.” (Construction
Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189,
198-199.)
In the Complaint, Plaintiff alleges that “Defendants,
and each of them, breached said agreement, and, in particular, Paragraph 36
thereof, by failing to respond to Plaintiff as required thereunder, failing to
provide any notice of acceptance or denial in writing, by unreasonably
withholding its consent, by delaying any response, by failing to cooperate and
refusing to act in good faith.” (Complaint ¶ 19.)
The subject lease agreement is attached to the
complaint as Exhibit 1. Paragraph 26 states, in pertinent part, that “wherever
in this Lease the consent of a Party is required to an act by or for the other
Party, such consent shall not be unreasonably withheld or delayed.” (Complaint
Exhibit 1 ¶36.)
Defendant LP Trust
Defendant LP Trust argues that Plaintiff has not
properly plead a claim for breach of contract because it is unclear to whom the
alleged actions are attributed because Plaintiff does not distinguish between
the parties. However, Plaintiff puts forward Exhibit 1, which shows that the
contract was made with Louis Petrie Separate Property Trust as the Lessor.
Plaintiff appropriately alleges that LP Trust, which appears to be a party to
the agreement, breached paragraph 36 of the lease agreement.
LP Trust argues that there is no breach under the
plain reading of Paragraph 36 because Paragraph 36 also allows for the lessor
to impose conditions on its consent. LP Trust argues that defendants had
legitimate financial concerns over Plaintiff’s prospective buyers, and thus they
had to request more documents and withhold their consent. However, the Court
only considers the facts on the face of the pleading. The complaint
sufficiently alleges that Defendant LP Trust breached the lease agreement by
unreasonably withholding and delaying consent of Plaintiff’s proposed lease
assignment.
Defendant LP Trust’s demurrer as to the first
cause of action is overruled.
Defendant Tang
Defendant Tang argues that the first cause of
action fails as to him because the attached lease agreement fails to identify
Tang as a party to the contract with Plaintiff. From the face of the lease
agreement, it appears that the only party to the lease agreement is Louis
Petrie Separate Property Trust. (Complaint Exhibit 1.) The complaint does not
clarify Defendant Tang’s relationship to Defendant LP Trust, nor does the
complaint allege a separate contract between Plaintiff and Tang.
In opposition, Plaintiff does not point to the
actual terms of the contract or present any substantive argument explaining why
the complaint is sufficient.
Thus, Defendant Tang’s demurrer to the first
cause of action is sustained with leave to amend.
Second Cause of Action: Breach of Implied
Covenant
“A breach of the implied
covenant of good faith and fair dealing involves something beyond breach of the
contractual duty itself and it has been held that bad faith implies unfair
dealing rather than mistaken judgment.” (Careau
& Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d
1371, 1394.) “If the allegations do not go beyond the statement of a mere
contract breach and, relying on the same alleged acts, simply seek the same
damages or other relief already claimed in a companion contract cause of
action, they may be disregarded as superfluous as no additional claim is
actually stated … [T]he only justification for asserting a separate cause of
action for breach of the implied covenant is to obtain a tort recovery.” (Id. at pp. 1394-1395.) To recover in
tort for breach of the implied covenant, the defendant must “have acted
unreasonably or without proper cause.” (Id.
at p. 1395, citations and italics omitted.)
The Complaint alleges that the lease agreement
“was subject to an implied covenant of good faith and fair dealing…includ[ing]
the covenant that Defendants, and each of them, would act fairly and in good
faith in carrying out its contractual obligations in the subject lease agreement.
(Complaint ¶ 24.) Additionally, it alleges that “Defendant breached the implied
covenant of good faith and fair dealing and, in particular, Paragraph 36
thereof…” (Complaint ¶ 25.)
Defendant LP Trust
Defendant LP Trust argues
that this cause of action is based on the same allegations that underlie the
contract claim.
The Court agrees that
this cause of action is based on the same conduct as the breach of contract
cause of action. Specifically, the wrongful conduct alleged is the breach of
Paragraph 36 of the lease agreement.
Defendant LP Trust’s
demurrer as to the second cause of action is sustained with leave to amend.
Defendant Tang
Tang argues that this
cause of action fails because, as mentioned above, Exhibit 1 fails to identify
Tang as a party to the contract. Thus, the complaint has alleged no contractual
duty as to Defendant Tang.
Additionally, like above, the claim would also
fail because it relies on the same alleged facts as the breach of contract
claim.
Defendant Tang’s demurrer as to the second cause
of action is sustained with leave to amend.
Third and Fourth
Causes of Action: Intentional/Negligent Interference with Prospective Economic
Advantage
The elements of a claim
for intentional interference with prospective economic advantage include “(1)
an economic relationship between the plaintiff and some third party, with the
probability of future economic benefit to the plaintiff; (2) the defendant’s
knowledge of the relationship; (3) intentional or negligent acts on the part of
the defendant designed to disrupt the relationship; (4) actual disruption of
the relationship; and (5) economic harm to the plaintiff proximately caused by
the acts of the defendant.” (Crown
Imports, LLC v. Superior Court (2014) 223 Cal.App.4th 1395, 1404,
citations, brackets, and quotation marks omitted.) Further, for intentional
interference, “the alleged interference must have been wrongful by some measure
beyond the fact of the interference itself. For an act to be sufficiently
independently wrongful, it must be unlawful, that is, it is proscribed by some
constitutional, statutory, regulatory, common law, or other determinable legal
standard.” (Ibid., citation, ellipsis, and quotation marks omitted.)
Plaintiff alleges that
Defendants intentionally/negligently “disrupted and interfered with Plaintiff’s
prospective economic advantage by refusing, in particular, to comply with
Paragraph 36 of the subject agreement…The ultimate purpose of which was so that
Defendants…could put economic pressure on Plaintiff to agree to sell the
business to Defendants and/or their agents.” (Complaint ¶ 30, 38.)
Defendant LP Trust
Defendant LP Trust argues
that there was no intent by Defendant to commit a wrongful act or negligent
interference. Defendant LP Trust argues that LP Trust required conditions as to
Plaintiff’s assignment of the lease that were not wrongful, but fair. LP Trust
also argues that they offered to buyout Plaintiff’s Lease and have their buyer
sign a new lease.
LP Trust’s argument is
not based on the facts plead on the face of the complaint, but rather an
interpretation of the lease agreement and whether LP Trust’s conditions of the
assignment were “fair.” This is an inappropriate argument at the demurrer
stage.
Defendant LP Trust’s
demurrer as to the third and fourth causes of action is overruled.
Defendant Tang
Tang argues that these
causes of action fail because they again involve the lease agreement which
fails to identify Tang as a party. The wrongful conduct alleged is the failure
to comply with paragraph 36 of the lease agreement. The Court agrees that
because the wrongful conduct stems from the contractual duty, and Plaintiff has
not shown that Tang is a party to the lease agreement, these causes of action
also must fail.
Defendant Tang’s demurrer
to the third and fourth causes of action is sustained with leave to amend.
Fifth Cause of Action:
Injunctive Relief
“The elements of a cause of action for injunctive relief are (1) a tort
or other wrongful act constituting a cause of action; and (2) irreparable
injury, i.e., a factual showing that the wrongful act constitutes an actual or
threatened injury to property or personal rights which cannot be compensated by
an ordinary damage award.” (Brownfield v.
Daniel Freeman Marina Hospital (1989) 208 Cal.App.3d 405, 410, citation
omitted.) Notably, “injunctive relief is a remedy and not, in itself, a cause
of action, and a cause of action must exist before injunctive relief can be
granted.” (Camp v. Board of Supervisors (1981)
123 Cal.App.3d 334, 356.)
Defendant
LP Trust
Although Defendant LP
Trust states that it demurs to this cause of action at the beginning of the Demurrer,
Defendant LP Trust offers no substantive argument as to why this cause of
action fails.
Thus,
Defendant LP Trust’s demurrer to the fifth cause of action is overruled.
Defendant
Tang
Defendant Tang demurs to this cause of action
arguing that injunctive relief is a remedy and not a cause of action. Because
the court has sustained all of Tang’s demurrers, there is no existing cause of
action from which injunctive relief can be granted.
Thus, Defendant Tang’s demurrer as to the fifth
cause of action is sustained with leave to amend.
Sixth Cause of Action:
Declaratory Relief
“To qualify for declaratory relief, a party
would have to demonstrate its action presented two essential elements: (1) a
proper subject of declaratory relief, and (2) an actual controversy involving
justiciable questions relating to the party’s rights or obligations.” (Jolley v. Chase Home Finance, LLC (2013)
213 Cal.App.4th 872, 909.)
Defendant LP Trust
Although Defendant LP
Trust states that it demurs to this cause of action at the beginning of the
Demurrer, LP Trust offers no substantive argument as to why this cause of
action fails.
Thus,
Defendant LP Trust’s demurrer to the sixth cause of action is overruled.
Defendant Tang
The complaint seeks
declaratory relief for “resolution of the parties’ respective rights and duties
under the subject lease agreement” (Complaint ¶ 50.)
As Defendant Tang has
shown, the Complaint does not show that Tang is a party to the lease agreement.
Thus, declaratory relief cannot be granted as to his respective rights under
the lease agreement if he is not a party.
Defendant Tang’s demurrer
to the sixth cause of action is sustained with leave to amend.
Defendant Tang’s Motion to Strike
Defendant Tang moves to strike the following:
·
Page 6, lines 5-8: “The actions of Defendants were…malicious, fraudulent and oppressive.
Said actions were done with a conscious disregard for Plaintiff’s rights and
with the intent to harm and injure Plaintiff’s business and reputation.
Punitive and exemplary damages should therefore be assessed in an amount
appropriate to punish and make an example of Defendants. Defendants’ unlawful
and fraudulent conduct…”
·
Page 8,
lines 25-27: “An award of punitive damages pursuant to statute...as well as
Plaintiff’s reasonable attorneys’ fees and costs of prosecuting this action…”
Because the demurrer to the complaint has been
granted as to Defendant Tang, the motion to strike is MOOT.
IV.
CONCLUSION
Defendant LP Trust’s demurrer to the
second cause of action is SUSTAINED with leave to amend. Defendant LP Trust’s
demurrer as to the first, third, fourth, fifth, and sixth causes of action is
OVERRULED.
Defendant Tang’s demurrer to the first,
second, third, fourth, fifth, and sixth causes of action is SUSTAINED with
leave to amend.
Defendant Tang’s motion to strike is
MOOT.
Plaintiff is to file an amended
complaint within 20 days of this ruling.
Moving party to give notice.
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.