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LAW & MOTION CALENDAR
Wednesday, August 23, 2017, 3:00 p.m.
Courtroom 19 – Hon. Allan D. Hardcastle
3055 Cleveland Avenue, Santa Rosa
CourtCall is available for all Law & Motion appearances, EXCEPT parties in small claims cases and motions for claims of exemption which are mandatory appearances. Please contact CourtCall directly at (888) 882-6878.
The following tentative rulings will become the ruling of the Court unless a party desires to be heard. If you desire to appear and present oral argument as to any motion, YOU MUST notify the Court by telephone at (707) 521-6730, and all other opposing parties of your intent to appear by 4:00 p.m. today, Tuesday, August 22, 2017. Parties in small claims cases and motions for claims of exemption are exempt from this requirement.
PLEASE NOTE: The court no longer provides Court Reporters for motion hearings. If they wish, the parties may confer and arrange for one of the parties to bring a privately retained Certified Shorthand Reporter to serve in the matter.
1. SCV-257717, Kanazawa v. Singler-Ernster, Inc.
This case has a long and overly contentious history, especially considering it is only one year old. Additionally, it should be noted that Defendant and Cross-Complainant SEI is owned by Peter A. Singler, a local attorney and until only recently, SEI was being represented by his law firm Singler Professional Law Corporation. The law corporation withdrew on June 14, 2016 but has apparently continued to appear and file papers on SEI’s behalf, including the stipulation that continued the initial hearing of this demurrer and the opposition to the demurrer. These filings could have been (and probably should have been) rejected by the clerk.
Plaintiffs and Cross-Defendants Karen McCoy, individually and as Trustee of the Karen K. McCoy Trust, Charles McCoy, and Toyoko Kanazawa (collectively “Cross-Defendants”) demurrer to the Third Amended Cross-Complaint (“TACC”) filed by Defendant and Cross-Complainant Singler Professional Law Corporation, as assignee in interest of Singler-Ernster, Inc. (“SEI”). Cross-Defendants’ demurrer to the first cause of action for breach of contract, second cause of action for breach of implied-in-fact contract, third cause of action for promissory estoppel, fourth cause of action for goods and services rendered, and fifth cause of action for breach of implied warranty of authority. Cross-Defendants bring this demurrer under Code of Civil Procedure section 430.10 and on the grounds that the TACC fails to state facts sufficient to constitute a valid cause of action against Cross-Defendants and on the grounds that the TACC is uncertain. SEI opposes the demurrer and argues that the amendments made to the complaint cure the defects found by the Court in its SACC and therefore, the demurrer should be overruled.
Cross-Defendants’ demurrer is SUSTAINED in part, without leave to amend, and OVERRULED in part.
1. General Rules on a Demurrer.
A demurrer is directed at the face of the complaint, exhibits attached to the complaint, and matters of which the court may take judicial notice. (Code Civ. Proc. § 430.30(a); see also, Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Hensler v. City of Glendale (1994) 8 Cal.4th 1, 8, fn. 3; Mead v. Sanwa Bank California (1998) 61 Cal.App.4th 561, 567–568.) The issue to resolve on a demurrer is whether the complaint, standing alone, states a cause of action. (Gervase v. Superior Court (1995) 31 Cal.App.4th 1218, 1224.) “Regardless of the title or label attached by the plaintiff to an alleged cause of action, if the factual allegations of the complaint state a cause of action on any available legal theory, that aspect of the complaint is good against a demurrer.” (Lee Newman, M.D., Inc. v. Wells Fargo Bank (2001) 87 Cal.App.4th 73, 78–79; see also, Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38.)
For the purpose of testing the sufficiency of the complaint, the court accept as true all the material allegations of the complaint, reasonable inferences that can be drawn from those allegations, and facts that may properly be judicially noticed. (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 966-967; see also, Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.) Thus, no matter how unlikely or improbable, plaintiff’s allegations must be accepted as true for the purpose of ruling on the demurrer. (Berg & Berg Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1034.) However, the court does not accept as true contentions, deductions, or conclusions of fact or law. (Ibid, see also, Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125.) A complaint must be “liberally construed, with a view to substantial justice between the parties” and the court should give the complaint “a reasonable interpretation, reading it as a whole and its parts in their context.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; see also, Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238; Rossberg v. Bank of America, N.A. (2013) 219 Cal.App.4th 1481, 1490.)
2. SEI’s First Cause of Action for Breach of Contract and Second Cause of Action for Breach of Implied-In-Fact Contract.
Cross-Defendants’ demurrer to the first and second causes of action for breach of contract and breach of implied-in-fact contract is SUSTANIED, without leave to amend.
The well-established elements of a cause of action for breach of contract are (1) the existence of the contract, i.e., offer, acceptance, and consideration; (2) plaintiff’s performance or excuse for nonperformance; (3) defendant’s breach; and (4) damages to the plaintiff. (Oasis W. Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821, citing Reichert v. General Ins. Co. (1968) 68 Cal.2d 822, 830.) “An implied contract is one, the existence and terms of which are manifested by conduct.” (Civ. Code §1621; see also, Unilab Corp. v. Angeles-IPA (2016) 244 Cal.App.4th 622, 636 [“An implied-in-fact contract is based on the conduct of the parties. Like an express contract, an implied-in-fact contract requires an ascertained agreement of the parties.”].) The elements of breach of contract and breach of implied contract are generally the same. (Division of Labor Law Enforcement v. Transpacific Transportation Co. (1977) 69 Cal.App.3d 268, 275; see also Friedman v. Friedman (1993) 20 Cal.App.4th 876, 888.)
In this case, SEI’s causes of action for breach of contract and breach of implied-in-fact contract are based on the allegation that “SEI wrote to [Cross-Defendants]…and proposed several options to contract: (1) SEI would sell its restaurant business to a known potential buyer with an assignment of the lease for $275,000; (2) SEI and [Cross-Defendants] would jointly sell ‘the building with all [SEI’s] stuff and assignment of beer license’ to the same known potential buyer for $800,000, with [Cross-Defendants] taking $600,000 and SEI taking $200,000; (3) SEI and [Cross-Defendants] would look for a new third-party buyer for the building and restaurant assets, and then split the proceeds of any sale to that buyer 75% / 25%, with 75% going to [Cross-Defendants] and 25% to SEI; or (4) SEI removes its assets and [Cross-Defendants] sells the building shell and land to a developer.” (TACC at ¶ 12.) SEI alleges that Cross-Defendants “accepted SEI’s offer to sell the building with the restaurant assets together and then split the proceeds 75% / 25%.” (Id. at ¶ 13.) SEI contends that it “performed under the Sale Agreement” and that “[Cross-Defendants] breached the Sale Agreement” and as a result, “SEI suffered damages of at least $193,750.” (Id. at ¶¶ 14-16.) For several reasons, some of which the Court has discussed in its rulings on Cross-Defendants’ prior demurrers, SEI’s TACC fails to states facts sufficient to constitute a valid cause of action for breach of contract or breach of implied-in-fact contract and therefore, the demurrer is sustained.
A. The TACC Fails to State a Valid Cause of Action for a Breach of Contract for the Sale of Real Property.
“A contract will [only] be enforced if it is sufficiently definite (and this is a question of law) for the court to ascertain the parties’ obligations and to determine whether those obligations have been performed or breached.” (Ersa Grae Corp. v. Fluor Corp. (1991) 1 Cal.App.4th 613, 623; see also, Moncada v. W. Coast Quartz Corp. (2013) 221 Cal.App.4th 768, 777 [to be enforceable, the essential terms of a contract must be “reasonably certain.”].) Thus, to be “enforceable, a promise must be definite enough that a court can determine the scope of the duty[,] and the limits of performance must be sufficiently defined to provide a rational basis for the assessment of damages.” (Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 770; see also, Robinson & Wilson, Inc. v. Stone (1973) 35 Cal.App.3d 396, 407.) Conversely, where a contract is so uncertain and indefinite that the intention of the parties in material particulars cannot be ascertained, the contract is void and unenforceable. (Bustamante v. Intuit, Inc. (2006) 141 Cal.App.4th 199, 209; see also, Cal. Lettuce Growers v. Union Sugar Co. (1955) 45 Cal.2d 474, 481; Civ. Code, §1598; Ladas, supra, 19 Cal.App.4th at 770.)
Specifically with respect to real property transactions, the essential terms necessary to create a binding contract are “the seller, the buyer, the price to be paid, the time and manner of payment, and the property to be transferred, describing it so it may be identified.” (Doryon v. Salant (1977) 75 Cal.App.3d 706, 711.) “An action for damages for breach of contract for the purchase or sale of real property will not lie unless [a] writing contains the essential terms and material elements of such an agreement without recourse to parole evidence of the intention of the contracting parties.” (Laks v. Coast Fed. Sav. & Loan Assn. (1976) 60 Cal.App.3d 885, 892.) Thus, the mutual intention of the parties must be determined from the language of the writing or writings alone and whether a certain or undisputed state of facts establishes a contract is an issue of law for the court. (See, Allen v. Smith (2002) 94 Cal.App.4th 1270, 1277.)
Here, SEI’s allegation that it made an offer to Cross-Defendants for the sale of the property, which included four distinct and materially different options, is not sufficiently certain to state a valid and enforceable contract for the sale of real property. In particular, the proposed agreement is not definite enough for the Court to determine the scope of the parties’ duties; the limits of performance; and determine a rational basis for the assessment of damages. Moreover, there are no allegations in the TACC with respect to the parties’ conduct that would support a cause of action for breach of an implied-in-fact contract, as opposed to a mere breach of contract.
Furthermore, “[i]t is a fundamental principle of California contracts law that no contract is formed where essential elements are reserved for future agreements.” (City Solutions, Inc. v. Clear Channel Commc'ns, Inc. (N.D. Cal. 2001) 201 F.Supp.2d 1035, 1040–1041; see also, Copeland v. Baskin Robbins U.S.A. (2002) 96 Cal.App.4th 1251, 1255–1256 [“It is still the general rule that where any of the essential elements of a promise are reserved for the future agreement of both parties, no legal obligation arises (until such future agreement is made).”].) “Preliminary negotiations or [agreements] for future negotiations are not the functional equivalent of a valid, subsisting agreement” and a “manifestation of willingness to enter into a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent.” (Bustamante, supra, 141 Cal.App.4th 199, 213–214; see also, Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 812; Beck v. American Health Group Internat., Inc. (1989) 211 Cal.App.3d 1555, 1562.) Here, even if the allegations alleged in the TACC are taken as true, any potential “agreement” between the parties was clearly part of an ongoing preliminary negotiation to enter into a contract for the sale of the property but not a final and binding agreement in and of itself. Indeed, the parties had not documented the exact property to be sold, the price to be paid, or the time and manner for payment to be made. Thus, there could be no enforceable contract.
B. The Allegations in SEI’s TACC are Inconsistent with its Prior Allegations.
An admission of fact in a pleading constitutes a judicial admission. (See, Valerio v. Andrew Youngquist Construction (2002) 103 Cal.App.4th 1264, 1271) This rule has been adopted into the “sham pleading doctrine.” Where, as in this case, there is a demurrer to an amended complaint, the Court may consider the factual allegations of prior complaints and a plaintiff cannot discard or avoid those prior allegations by making contradictory averments in a superseding, amended pleading. (People ex rel. Gallegos v. Pacific Lumber Co. (2008) 158 Cal.App.4th 950, 957.) Thus, “[b]oth trial and appellate courts may properly take judicial notice of a party’s earlier pleadings and positions.... A plaintiff may not avoid a demurrer by pleading facts or positions in an amended complaint that contradict the facts pleaded in the original complaint or by suppressing facts which prove the pleaded facts false.” (Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 877.) “Under the sham-pleading doctrine, admissions in an original complaint that has been superseded by an amended pleading remain within the court’s cognizance and the alteration of such statements by amendment designed to conceal fundamental vulnerabilities in a plaintiff’s case will not be accepted.” (Berg & Berg Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1043, fn. 25.) Alternatively stated, “plaintiffs are precluded from amending complaints to omit harmful allegations, without explanation, from previous complaints to avoid attacks raised in demurrers....” (Deveny v. Entropin, Inc. (2006) 139 Cal.App.4th 408, 425.) “If a party files an amended complaint and attempts to avoid the defects of the original complaint by either omitting facts which made the previous complaint defective or by adding facts inconsistent with those of previous pleadings, the court may take judicial notice of prior pleadings and may disregard any inconsistent allegations.” (Colapinto v. County of Riverside (1991) 230 Cal.App.3d 147, 151.)
In this case, SEI’s breach of contract cause of action has been evolving though its various amendments however, based on the sham pleading rule, the Court cannot ignore the prior inconsistent allegations made in SEI’s previous pleadings. In its original and first amended cross-complaints, SEI’s breach of contract claim was based on an alleged agreement whereby Cross-Defendant purportedly agreed to “accept an offer to sell the Property from a buyer…at any price ‘between giving it away and home run.’” (See, Complaint at ¶ 10 and FAC at ¶ 11.) SEI attached an email to the complaint to support this alleged agreement. The Court sustained Cross-Defendant’s demurrer based on the fact that such an agreement was so uncertain and indefinite that it could not possibly form a valid and enforceable contract for the sale of real property. In its SAC, SEI omitted the vague language of “any price between giving it away and home run” and instead alleged merely that “[a]ny purchase price for the Property and Restaurant Equipment would be split 75/25, with 75% of the price going to the [Cross-Defendant] and 25% to SEI.” (SAC at ¶ 12.) SEI also omitted several pages of emails that had been attached as exhibits to the prior pleadings. The Court recognized in its tentative ruling that SEI had “deleted some of the allegations of the Amended Complaint and omitted six pages of the document which previously was alleged to be the contract in question. No explanation is given as to why these changes were made or why the Court should not conclude that they were made simply in the attempt to deploy disingenuous pleading in order to avoid another demurrer being sustained.” Based in part of on these findings, the Court sustained the demurrer again, with leave to amend.
SEI’s TACC suffers from the same defects as its prior complaints, i.e., that SEI cannot escape the allegations made in its prior cross-complaints by omitting those facts from its TACC and cannot avoid the facts contained in the exhibits to those prior cross-complaints simply by removing them from the TACC. Accordingly, based on all the facts before the Court, SEI’s allegations of an agreement between the parties to sell the property are not sufficiently certain or definite to constitute a valid and enforceable contract. Therefore, the demurrer is sustained. Moreover, because it is obvious that SEI cannot amend this cause of action to cure the defects, the demurrer to these causes of action is sustained without leave to amend.
3. Third Cause of Action for Promissory Estoppel.
“The elements of a promissory estoppel claim are ‘(1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) [the] reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his [or her] reliance.’” (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1178, quoting Jones v. Wachovia Bank (2014) 230 Cal.App.4th 935, 945.) “[A] promise is an indispensable element of the doctrine of promissory estoppel” and “[t]he cases are uniform in holding that this doctrine cannot be invoked and must be held inapplicable in the absence of a showing that a promise had been made upon which the complaining party relied to his prejudice…” (Granadino v. Wells Fargo Bank, N.A., (2015) 236 Cal.App.4th 411, 417, citing Garcia v. World Savings, FSB (2010) 183 Cal.App.4th 1031, 1044.) “The promise must, in addition, be ‘clear and unambiguous in its terms” and “[e]stoppel cannot be established from ... preliminary discussions and negotiations.” (Ibid.)
Here, SEI’s cause of action for promissory estoppel is based on the allegation that on or about August 17, 2015, Cross-Defendants contacted SEI and “promised to split the proceeds of a sale of the Property and Rental Equipment 75/25, with [Cross-Defendants] taking 75% and SEI taking 25%, if SEI left its equipment, furnishings, fixtures, and the permits or licenses associated with operating the restaurant…in place to be sold along with the Property.” (TACC at ¶ 24.) SEI contends that it left its equipment in place to be sold along with the property and that when Cross-Defendant sold the property, it did not pay SEI 25% of the sale price. (Id. at ¶¶ 25-26.) Again, these allegations are not sufficient to support a cause of action for promissory estoppel. To start, SEI has not alleged that it relied on Cross-Defendants’ promise or that its reliance was “reasonable and foreseeable,” both of which are essential elements of a cause of action. More importantly however, the underlying promise, i.e., that Cross-Defendants would split the proceeds of the sale 75/25, suffers from the same infirmities as its claim for breach of contract: that it is not sufficiently certain or definite; that it was clearly part of a preliminary negotiation as opposed to a final and enforceable agreement; and that it is contradicted by allegations and exhibits to prior pleadings. Accordingly, for the same reasons that SEI has failed to state a cause of action for breach of contract, its promissory estoppel claim fails as well.
Accordingly, Cross-Defendants’ demurrer to SEI’s third cause of action for promissory estoppel is sustained, without leave to amend.
4. Fourth Cause of Action for Goods and Services Rendered.
“To recover on a claim for the reasonable value of [goods or] services under a quantum meruit theory, a plaintiff must establish both that he or she was acting pursuant to either an express or implied request for services from the defendant and that the [goods or] services rendered were intended to and did benefit the defendant.” (Ochs v. PacificCare of California (2004) 115 Cal.App.4th 782, 794.) “A common count is proper whenever the plaintiff claims a sum of money due, either as an indebtedness in a sum certain, or for the reasonable value of services, goods, etc., furnished. (See, Utility Audit Co., Inc. v. City of Los Angeles (2003) 112 Cal.App.4th 950, 958.) “In the common law action of general assumpsit, it is customary to plead an indebtedness using ‘common counts’ and in California, it has long been settled the allegation of claims using common counts is good against special or general demurrers. (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460.) The only essential allegations of a common count are ‘(1) the statement of indebtedness in a certain sum, (2) the consideration, i.e., goods sold, work done, etc., and (3) nonpayment.” (Ibid.)
Here, SEI alleges that Cross-Defendant “requested that SEI leave its equipment, furnishings, fixtures, and the permits or licenses associated with operating the restaurant…in place on the Property for the benefit of [Cross-Defendants]” and that SEI left is equipment in place as requested, and that Cross-Defendants have failed to pay SEI for the value of the equipment. (See, TACC at ¶¶ 28-31.) Taking those allegations as true and construing the TACC as a whole with a view towards substantial justice, the allegations are sufficient to support a common count for goods and services rendered. Accordingly, the demurrer to SEI’s fourth cause of action for goods and services rendered is overruled.
5. Fifth Cause of Action for Breach of Implied Warranty of Authority.
A fundamental element to a cause of action based upon breach of warranty of authority is the existence of a contract or agreement that the agent warranted he had authority to enter into on behalf of the principal. (Yoakum v. Tarver (1967) 256 Cal.App.2d 202, 206-207 [“The general rule is that, whenever a party assumes to act as agent for another if he has no authority, or if he exceed his authority, he will be held to be personally liable to the party with whom he deals, for the reason that by holding himself out as having authority he misleads the other party into making the agreement…”]; see also Jeppi v. Brockman Holding Co. (1949) 34 Cal.2d 11, 18-19 [“Although one is not liable personally on a contract executed by him as the officer of a corporation, he may, if he acted without authority, be held to account on a theory of breach of the implied warranty of authority.”].) “The detriment caused by the breach of a warranty of an agent’s authority, is deemed to be the amount which could have been recovered and collected from his principal if the warranty had been complied with, and the reasonable expenses of legal proceedings taken, in good faith, to enforce the act of the agent against his principal.” (See, Civ. Code §§ 3318, 2342, 2343.)
In this case, because SEI has not sufficiently alleged the existence of an underlying contract, SEI’s claim for Breach of the Implied Warranty of Authority also fails. Accordingly, Cross-Defendants’ demurrer to SEI’s fifth cause of action for breach of implied warranty of authority is sustained, without leave to amend.
A responsive pleading to be filed not later than September 22, 2017.
Cross-Defendants’ counsel shall submit a written order to the Court consistent with this tentative ruling and in compliance with Rule of Court 3.1312.
2. SCV-258001, Verducci v. AAA Northern California
Defendant Clean Performance Restoration, Inc. dba Servpro of Santa Rosa S.E./Sonoma and Servpro Industries, Inc. (collectively “Defendants”) bring this application for a determination of good faith settlement with Plaintiff, Mona Verducci (“Plaintiff”). Defendants bring this motion pursuant to Code of Civil Procedure section 877.6 and on the grounds that the proposed settlement between Plaintiff and Defendants, which includes a payment to Plaintiff in the amount of $25,000 in exchange for a full release of all claims for liability against Defendants, was reached in “good faith,” after an arm’s length negotiation, and reflects a reasonable approximation of Defendants’ potential share of liability in this case. No opposition has been filed to this application for a finding that it was reached in “good faith.”
Accordingly, and for good cause shown, Defendants’ application for determination of good faith settlement is GRANTED.
Defendants’ counsel shall submit a written order to the Court consistent with this tentative ruling and in compliance with Rule of Court 3.1312.
The three motions to compel filed by Defendant CSAA Insurance Exchange have been DROPPED from calendar pursuant to the Declaration of Alyssa T. Dang to Withdraw Without Prejudice CSAA Insurance Exchanges’ Motions to Compel filed August 21, 2017.
3. SCV-258344, Nelson v. Nationstar Mortgage, LLC
This matter is on calendar for Plaintiff’s motion to compel verified responses to its form interrogatories, set one, special interrogatories, set one, requests for admissions, set one, and requests for production of documents, set one, served to Defendant on January 17, 2017. Plaintiff brings this motion pursuant to Code of Civil Procedure sections 2030.300, 2031.310, and 2033.290, and on the grounds that Defendant’s responses consist solely of boilerplate and unmeritorious objections and contain no substantive information. Plaintiff also requests an award of monetary sanctions in the amount of $4,330 for his attorney’s fees and costs related to this motion. Defendant has not opposed the motion.
For good cause shown, Plaintiff’s motion is GRANTED. Defendant shall serve verified and substantive responses to Plaintiff’s discovery within ten (10) days of the Court’s final ruling on this motion. Additionally, Plaintiff’s request for monetary sanctions is GRANTED, in part. Although an award of sanctions is clearly warranted, based on the fact that there is no opposition and the filing fee is only $60, the Court orders Defendant to pay $2,480 in monetary sanctions to Plaintiff, which includes the attorney’s fees incurred to date and the $60 filing fee. Defendant shall pay the sanctions within 10 days of the Court’s final ruling on this motion.
Plaintiff’s counsel shall submit a written order to the Court consistent with this tentative ruling and in compliance with California Rule of Court 3.1312.
4. SCV-258521, Lambert v. Nguyen
As to Defendants Richard Sternberg and Coval Molecular Coatings, Inc.’s Special and General Demurrer to First Amended Complaint, Defendants bring this demurrer to the First Amended Complaint (“FAC”) filed by Plaintiffs Theresa Lambert, Edward Spaulding, and Diamond Tech Surfaces, Inc. (collectively “Plaintiffs). Defendants bring a special demurrer under “C.C.P §43010(f)” [which is presumably section 430.10(f)] and on the grounds that each of Plaintiff’s causes of action is uncertain, ambiguous and unintelligible, and on that basis, Defendants cannot ascertain what specific claims Plaintiffs are asserting against them and what specific relief Plaintiffs are seeking.
Additionally, Defendants assert a general demurrer under Code of Civil Procedure section 430.10(e) and on the grounds that Plaintiff Lambert lacks standing to assert any cause of action against Defendants; Plaintiff Spaulding lacks standing to assert the first though sixth causes of action against Defendants; and Plaintiff Diamond Tech lacks standing to assert the seventh and eighth causes of action against Defendants. Defendants also assert a general demurrer under “C.C.P. § 430.109(e)” on the grounds that Plaintiffs have failed to allege the proper elements and factual basis to support any of the claims in the FAC. However, the Court notes that there is no section 430.109(e) in the Code of Civil Procedure and therefore, this argument is itself uncertain.
Plaintiffs oppose the demurrer and argue that the FAC is sufficiently certain and unambiguous to put Defendants on notice of the claims asserted against them, the relief sought, and to allow Defendants to prepare a defense. With respect to the standing issue, Plaintiffs contend that Defendants’ standing argument lacks merit because in their own cross-complaint, Defendants assert a similar cause of action for breach of contract against “all Cross-Defendants,” which includes Lambert, Spaulding and Diamond Tech. Plaintiffs point out that Defendants’ breach of contract claim against Lambert, Spaulding and Diamond Tech is founded on the exact same contract alleged by Plaintiffs in their complaint. Additionally, Plaintiffs argue that they have sufficiently alleged all facts necessary to support each of the causes of action asserted but that if the Court finds any defects in the complaint, Plaintiffs request leave to amend to cure the deficiencies.
Defendants’ Request for Judicial Notice in support of the demurrer is GRANTED. Plaintiff’s Request for Judicial Notice in opposition to the demurrer is GRANTED. Defendants’ special demurrer under Code of Civil Procedure section 430.10(f) on the grounds the FAC is uncertain, ambiguous and unintelligible is OVERRULED. Defendant’s general demurrer based on standing is also OVERRULED as to all Plaintiffs and all causes of action. Defendants’ general demurrer for failure to state sufficient facts to constitute a valid cause of action is OVERRULED as to Plaintiffs’ first cause of action for breach of contract, second cause of action for money had and received, third cause of action for a constructive trust, and eighth cause of action for violation of Penal Code section 502(e)(1). Defendants’ demurrer for failure to state sufficient facts is SUSTAINED, with leave to amend, as to Plaintiffs’ fourth cause of action for international interference with economic advantage, fifth cause of action for interference with contract, and seventh cause of action for violation of Penal Code section 496. Plaintiffs have ten (10) days from the Court’s final ruling on this demurrer to file its Second Amended Complaint.
1. Special Demurrer Based Uncertainty
Defendants’ special demurrer based on uncertainty is OVERRULED. A demurrer for uncertainty is disfavored and should only be sustained where the complaint is so awful that defendant cannot reasonably respond – i.e., he or she cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him or her. (Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616; see also, Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139.) In other words, it is not enough to sustain a demurrer for uncertainty simply because the complaint does not clearly identify the parties or claims, or creates some confusion as to an inconsequential matter. (Ibid.) Additionally, a demurrer for uncertainty must specify precisely how, why, and where the complaint is uncertain. (See, Fenton v. Groveland Community Services Dist. (1982) 135 Cal.App.3d 797, 809.) Here, although the FAC is short on facts and long on contentions, deductions and conclusions, it is not so uncertain that Defendants cannot reasonably ascertain the basis of the claims asserted against them.
2. General Demurrer for Lack of Standing
Defendants’ general demurrer based on standing is also OVERRULED. “Standing generally requires that the plaintiff be able to allege injury, that is, an invasion of a legally protected interest.” (Coldren v. Hart, King & Coldren, Inc. (2015) 239 Cal.App.4th 237, 245.) Further, “[t]o have standing, a party must be beneficially interested in the controversy, and have some special interest to be served or some particular right to be preserved or protected.” (Iglesia Evangelica Latina, Inc. v. S. Pac. Latin Am. Dist. of Assemblies of God (2009) 173 Cal.App.4th 420, 445.) This interest must be concrete and actual, and must not be conjectural or hypothetical.” (Ibid.) Here, each of the Plaintiffs named in the FAC has sufficient standing to pursue this action. Specifically with respect to Theresa Lambert and Edward Spaulding, the FAC alleges that “[i]n 2014, Lambert began working at DTSI providing independent consulting for sales and marketing, as well as assistance in developing uses for the chemistry used in the products.” (FAC at ¶ 12.) Mr. Spaulding signed the contract with Defendants on behalf of Diamond Tech. (FAC at Ex. A.) Thereafter the FAC alleges that Defendants “directed Spaulding and Lambert to perform services under the MRA for Coval” and that Lambert and Spaulding performed significant work under the DTSI MRA with Coval, at the ongoing direction of Strenberg and Tribble.” (Id. at ¶ 13.) Plaintiffs allege that “[i]nvoices totaling approximately $147,000 remain due and owing from Coval, which include both pre- and post-JVA obligations to DTSI.” (Id. at ¶ 15.) Additionally, “Lambert, Spaulding and DTSI have also never been paid $120,000 in commissions due and owing to them from Coval related to work in securing a master distributor in China.” (Id. at ¶ 16.) Finally, the FAC alleges that “Lambert, Spaulding, DTSI have lost sales and market entry points as a result of Strenberg’s, Tribble’s and Coval’s actions and interference.” (Id. at ¶ 17.)
Thus, these allegations, when accepted as true for the purposes of this demurrer and when construed liberally with a view to substantial justice between the parties, are sufficient to establish that Lambert, Spaulding and Diamond Tech have sufficiently alleged a beneficial interest in this controversy such that they have standing to bring this action.
3. General Demurrer for Failure to State Sufficient Facts
Under California’s liberal pleading rules, a complaint, with certain exceptions, need only contain a “statement of the facts constituting the cause of action, in ordinary and concise language.” (Code Civ. Proc., § 425.10(a)(1).) As a general rule, a complaint will be upheld against a demurrer “so long as [it] gives notice of the issues sufficient to enable preparation of a defense.” (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 549-550.) “[T]o withstand a demurrer, a complaint must allege ultimate facts, not evidentiary facts or conclusions of law.” (Logan v. Southern California Rapid Transit District (1982) 136 Cal.App.3d 116, 126; see also, Committee on Children's Television, Inc. v. General Food Corp. (1983) 35 Cal.3d 197, 212.)
Based on these pleading requirements and the facts alleged in the FAC, Defendants’ demurrer to Plaintiffs’ first cause of action for breach of contract, second cause of action for money had and received, third cause of action for a constructive trust, and eighth cause of action for violation of Penal Code section 502(e)(1) is OVERRULED. The facts alleged in the FAC are sufficiently certain for Defendants to ascertain the specific claims that Plaintiffs are asserting against them, the specific relief Plaintiffs are seeking, and for Defendants to prepare a defense. However, Defendants’ demurrer to Plaintiffs’ fourth cause of action for international interference with economic advantage, fifth cause of action for interference with contract, and seventh cause of action for violation of Penal Code section 496 is SUSTAINED, with leave to amend. With respect to these claims, Plaintiffs’ “threadbare recitals” of the basic elements of the respective causes of action through unsupported contentions, deductions and conclusions of fact and law, without any properly plead supporting facts, are not sufficient to state valid causes of action. Any amended complaint to be filed not later than September 15, 2017.
Defendants’ counsel shall submit a written order to the Court consistent with this tentative ruling and in compliance with Rule of Court 3.1312.
Plaintiffs’ motion to compel has been DROPPED from calendar at the request of counsel for moving parties.
5. SCV-259394, Ryan v. Schalich
CONTINUED by stipulation of all parties to September 27, 2017.
6. SCV-260531, Armstrong v. City of Sebastopol
DROPPED from calendar at the request of counsel for moving party; first amended complaint filed August 8, 2017.