Case Number: BC688155 Hearing Date: August 08, 2018 Dept: 61

Defendants Farmers Market Plaza, LLC, Georgie Demircift, George Salman, and James Demircift’s Demurrer to the First Amended Complaint is SUSTAINED, without leave to amend, as to the Fourth and Fifth Causes of Action. It is SUSTAINED, without leave to amend, as to the First, Second, and Third Causes of Action as alleged against Defendants George Salman and James and George Demircift.

The Demurrer is OVERRULED as to the First, Second, and Third Causes of Action as alleged by Plaintiff Laundry Shop, Inc., and as against Defendant Farmers Market Plaza, LLC.

Defendants to give notice.

DEMURRER

A demurrer should be sustained only where the defects appear on the face of the pleading or are judicially noticed. (Code Civ. Pro., §§ 430.30, et seq.) A court should sustain a demurrer if a complaint does not allege facts that are legally sufficient to constitute a cause of action. (See id. § 430.10, subd. (e).) As the Supreme Court held in Blank v. Kirwan (1985) Cal.3d 311: “We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. . . . Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.” (Id. at p. 318; see also Hahn. v. Mirda (2007) 147 Cal.App.4th 740, 747 (“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.”))

“In determining whether the complaint is sufficient as against the demurrer … if on consideration of all the facts stated it appears the plaintiff is entitled to any relief at the hands of the court against the defendants the complaint will be held good although the facts may not be clearly stated.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 639.)

“A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal.App.4th 612, 616.) Such demurrers “are disfavored, and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Mahan v. Charles W. Chan Insurance Agency, Inc. (2017) 14 Cal.App.5th 841, 848.)

A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment. (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p. 1081.) The demurrer also may be sustained without leave to amend where the nature of the defects and previous unsuccessful attempts to plead render it probable plaintiff cannot state a cause of action. (Krawitz v. Rusch (1989) 209 Cal.App.3d 957, 967.)

BREACH OF CONTRACT, COVENANT OF QUIET ENJOYMENT, PROMISSORY ESTOPPEL — FIRST, SECOND, AND THIRD CAUSES OF ACTION

Defendants raise the follow arguments against the First through Third Causes of Action. First, they argue that only Laundry Shop and Farmers Market Plaza are parties to the lease, and thus that only Laundry Shop is the proper plaintiff for such an action, and only Farmers Market Plaza is a proper defendant. Defendants next argue that the Second Cause of Action for Breach of the Covenant of Quiet Enjoyment is superseded by a contractual term providing for the same. Defendants also argue that the Third Cause of Action for Promissory Estoppel is likewise superseded by the written lease. (Demurrer at pp. 4–5.)

“[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.) “Someone who is not a party to the contract has no standing to enforce the contract or to recover extra-contract damages for wrongful withholding of benefits to the contracting party.” (Hatchwell v. Blue Shield of California (1988) 198 Cal.App.3d 1027, 1034.) It appears that the lessor and lessee in the relevant lease agreement attached to the FAC are Farmers Market Plaza and Laundry Shop, Inc., not Fred Ayazi and Hyuana Oh. Likewise, Plaintiffs cannot prosecute a breach of contract claim against nonsignatories to the contract, without asserting some basis for finding them liable.

Although Plaintiffs plead theories of conspiracy and aiding and abetting (FAC ¶¶ 12, 51–55), these doctrines sound in tort, and presuppose that the defendant implicated via the doctrine “owes a duty to plaintiff recognized by law and is potentially subject to liability for breach of that duty.” (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 511.) Thus the individual Defendants, who were not signatories to the contract and thus not personally bound to it by any theory Plaintiffs have heretofore pleaded, cannot be liable for conspiring or aiding and abetting its breach.

Defendants next argue that the Second and Third Causes of Action for Breach of Covenant of Quiet Enjoyment and Promissory Estoppel are effectively superseded by the contract. (Demurrer at p. 4.) But Defendants do not support this argument with any authority.

Defendants also briefly argue that the lease agreement contains an integration clause which supersedes each of these causes of action based on representations extraneous to the contract. (Demurrer at p. 5.) The lease agreement does indeed contain an integration clause. (FAC Exh. A at p. 11 [¶ 22].) However, Defendants concede that the contract also contains an express covenant of quiet enjoyment, which Plaintiffs plead Defendants violated by the same conduct which constituted their breach of contract. (Demurrer at p. 4; FAC Exh. A at p. 13.) Defendants have not attacked the substantive viability of this claim. Accordingly, the court may not presently sustain the demurrer to these causes of action because of the integration clause.

The Demurrer is therefore SUSTAINED as to the First, Second, and Third Causes of Action as to Defendants George Salman and George and James Demircift, without leave to amend. (Jensen v. Home Depot, Inc. (2018) 24 Cal.App.5th 92, 97, internal quotation marks omitted.)

It is OVERRULED as to Defendant Farmers Market Plaza.

SHAM PLEADING — ENTIRE COMPLAINT

Defendants next argue that the entire FAC should be dismissed as a sham pleading, because certain items were changed from the previous Complaint. (Demurrer at p. 5.) These changes include the statement in the prior Complaint that the agreement was restated and updated no later than December 2013, which in the FAC has been changed to say that Defendants restated their promises as late as January 2016. (Demurrer at p. 5.) Defendants also argue that Plaintiffs failed to plead facts regarding the discovery of the relevant breaches in the original Complaint, but in the FAC have pleaded discovery in August 2016. (Demurrer at p. 5.)

“Under the sham pleading doctrine, plaintiffs are precluded from amending complaints to omit harmful allegations, without explanation, from previous complaints to avoid attacks raised in demurrers or motions for summary judgment.” (Deveny v. Entropin, Inc. (2006) 139 Cal.App.4th 408, 425.)

The court here sees no sham pleading. Plaintiffs have added allegations that Defendants re-affirmed their promises later than previously alleged, and have alleged a new discovery date. The court has no basis to conclude that these allegations are any more a “sham” then all amendments to complaints.

FRAUD — FOURTH CAUSE OF ACTION

Defendants next argue that the Fourth Cause of Action for Intentional Misrepresentation is not alleged with adequate specificity and is precluded by the parol evidence rule. (Demurrer at pp. 6–7.)

The court first notes that the parol evidence argument is without merit. The rule prohibiting the introduction of parol evidence of prior agreements is a rule designed to shape contract interpretation: “It provides that when parties enter an integrated written agreement, extrinsic evidence may not be relied upon to alter or add to the terms of the writing.” (Riverisland Cold Storage, Inc. v. Fresno-Madera Production Credit Assn. (2013) 55 Cal.4th 1169, 1174.) On the other hand, “Parol evidence is always admissible to prove fraud, and it was never intended that the parol evidence rule should be used as a shield to prevent the proof of fraud.” (Id. at p. 1180–81.) Thus Defendants may not rely on the parol evidence rule to defeat a fraud claim.

However, the court agrees that the allegations of fraud in the FAC are insufficiently specific. The elements of fraud are: (1) misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity (scienter); (3) intent to defraud or induce reliance; (4) justifiable reliance; and (5) damages. (See Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) It is well-established that “[t]o withstand a demurrer, the facts constituting every element of 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.) “This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.” (Lazar, supra, 12 Cal.4th at p. 645 (internal quotation marks omitted).)

In the present FAC, it is pleaded that “defendants” made promises related to the presence of a key tenant and the monitoring and maintenance of the plaza, but it is not stated who made these statements, when, how, and in what capacity. (FAC ¶ 16.)

Accordingly, the Demurrer is SUSTAINED as to the Fourth Cause of Action for Intentional Misrepresentation, without leave to amend. (Jensen v. Home Depot, Inc. (2018) 24 Cal.App.5th 92, 97, internal quotation marks omitted.)

CONSPIRACY — FIFTH CAUSE OF ACTION

Defendants argue that the Fifth Cause of Action for Conspiracy is defective because it is pleaded in conclusory fashion and because the participants in the conspiracy are alleged to be agents of the entity committing the wrong. (Demurrer at pp. 8–9.)

A civil conspiracy however atrocious, does not per se give rise to a cause of action unless a civil wrong has been committed resulting in damage. The elements of an action for civil conspiracy are the formation and operation of the conspiracy and damage resulting to plaintiff from an act or acts done in furtherance of the common design. In such an action the major significance of the conspiracy lies in the fact that it renders each participant in the wrongful act responsible as a joint tortfeasor for all damages ensuing from the wrong, irrespective of whether or not he was a direct actor and regardless of the degree of his activity.

(Doctors’ Co. v. Superior Court (1989) 49 Cal.3d 39, 44, internal citations, alterations, and quotation marks omitted.)

The court agrees that the conspiracy allegations as presently pleaded are insufficient, because they allege only a conspiracy of a corporation with its agents, i.e. an impermissible conspiracy of a corporation with itself. (See Black v. Bank of America (1994) 30 Cal.App.4th 1, 6.) Accordingly, no conspiracy is properly pleaded here.

The Demurrer is SUSTAINED as to the Fifth Cause of Action, without leave to amend. (Jensen v. Home Depot, Inc. (2018) 24 Cal.App.5th 92, 97, internal quotation marks omitted.)