Defendants Christine K Schools, LLC and Christine Khuu’s demurrer to and motion to strike the second amended complaint

1. Demurrer

The demurrer of defendants Christine K Schools, LLC and Christine Khuu’s (collectively “Defendants”) to the seventh cause of action for declaratory relief is OVERRULED. Plaintiffs seek a declaration that they are 50% owners of the Christine K. Beauty School (the “School”) with the authority to direct and oversee its daily activities. (Second Amended Complaint (“SAC”), ¶ 71.) Defendants assert that Plaintiffs’ claim for declaratory relief is defeated by the rescission cause of action, as they cannot both assert that they are rescinding the agreement to purchase 50% of the School and then also request a declaration that they own that percentage of the School. Although a claim of rescission of the agreement seems incompatible with a declaration that Plaintiffs actually own a 50% interest in the School, if for some reason Plaintiffs are not able to successfully rescind the agreement because there is a defense to that request, then a request for a declaration of rights relating to the agreement may be appropriate.

Defendants’ demurrer to the ninth cause of action for declaratory relief is SUSTAINED WITHOUT LEAVE TO AMEND. Plaintiffs seek a declaration that Defendants are liable for all damages incurred and to be incurred by them pursuant to the guarantee on the lease as damages were caused by Defendants’ fraudulent misrepresentations which induced Plaintiffs to sign a guarantee on the lease. (Id., ¶ 82.) This cause of action is an improper attempt to recast Plaintiffs’ claims for indemnity and fraud as a claim for declaratory relief. (See California Ins. Guar. Ass’n v. Super. Ct. (1991) 231 Cal.App.3d 1617, 1623 [stating that a declaratory relief action will not lie to determine issues raised in other causes of action before the court].) Thus, this declaratory relief claim does not involve the existence of an actual present controversy between the parties. (See City of Cotati v. Cashman (2002) 29 Cal.4th 69, 80 [fundamental requirement of a request for declaratory relief the existence of an actual present controversy between the parties].) Plaintiffs impliedly concede the merits of Defendants’ argument by failing to address it in their opposition. Plaintiffs also fail to explain how they can cure this defect. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 [the burden is on plaintiffs to show in what manner they can amend the complaint, and how that amendment will change the legal effect of the pleading].)

2. Motion to Strike

Defendants’ motion to strike the first, third, fifth, and sixth causes of action is DENIED. The motion to strike suffers from a fatal deficiency in that Defendants are using it to strike entire causes of action rather than portions of the SAC. A pleading challenge to an entire cause of action is by demurrer rather than a motion to strike under Code of Civil Procedure sections 435 and 436. (See Quiroz v. Seventh Ave. Ctr. (2006) 140 Cal.App.4th 1256, 1281 [“where a whole cause of action is the proper subject of a leading challenge, the court should sustain a demurrer to the cause of action rather than grant a motion to strike”].)

Defendants’ motion to strike paragraphs 31, 35-36, 47-48, 60-62, and 66-67 from the first, third, fifth, and sixth causes of action is DENIED. Defendants are seeking what is in effect a ruling on the merits of Plaintiffs’ claims. “As stated by the court in PH II [, Inc. v. Super. Ct. (1995) 33 Cal.App.4th 1680,] ‘We recognize that in some cases a portion of a cause of action will be substantively defective on the face of the compliant. . . . We conclude that when a substantive defect is clear from the face of a complaint, such as a violation of the applicable statute of limitations or a purported claim of right which is legally invalid, a defendant may attack that portion of the cause of action by filing a motion to strike.’” (Caliber Bodyworks, Inc. v. Super. Ct. (2005) 134 Cal.App.4th 365, 385.) There is no “substantive defect” clear from the face of the SAC, such as the claims being barred by a statute of limitations or preempted by other law. (See PH II, Inc. supra, 33 Cal.App.4th at p. 1683 [“We emphasize that such use of the motion to strike should be cautious and sparing. We have no intention of creating a procedural ‘line item veto’ for the civil defendant.”].)

Defendants’ motion to strike paragraphs 38-45 from the second cause of action is DENIED. A motion to strike is not the proper mechanism to challenge the entirety of the second cause of action. (See Quiroz, supra, 140 Cal.App.4th at p. 1281.)

Defendants’ motion to strike the prayer for punitive damages is DENIED. Defendants’ argument to strike the prayer for punitive damages is tied to their improper argument as to the second cause of action. (See Motion to Strike at p. 10:1-2.)