EC061089

Demurrer and Motion to Strike

Case Management Conference

Rong Cheng Trading, Inc. purchased crawfish from the Defendants. The Defendants delivered the crawfish; however, the crawfish was very poor quality and not fit for human consumption. This action was brought because the Defendants have refused to refund the $72,214.80 that was paid for the substandard crawfish.

The Plaintiffs are the assignees of claims from Rong Cheng Trading, Inc.

The First Amended Complaint alleges causes of action for 1) Breach of Written Contract and 2) Common Counts.

This hearing concerns the Defendant’s demurrer and motion to strike directed at the First Amended Complaint.

1. Demurrer
a. First Cause of Action for Breach of Written Contract

The Defendants argue that the first cause of action lacks allegations demonstrating that they breached the contract. This cause of action must include allegations showing the following:

1) the contract,
2) plaintiff’s performance or excuse for nonperformance,
3) defendant’s breach, and
4) the resulting damages to plaintiff.
Reichert v. General Ins. Co. (1968) 68 Cal. 2d 822, 830.

The Plaintiffs allege in paragraph 17 that a contract existed between the parties for the purchase of the crawfish. In paragraph 18, the Plaintiffs allege that the contract contained an express warranty that the crawfish would be fit for human consumption. In paragraph 19, the Plaintiffs allege that the Defendants breached the contract by delivering crawfish that smelled bad, that was of very poor quality, that was not fit for resale to restaurant customers, and that was not fit for human consumption. The Plaintiffs allege in paragraph 21 that as a result, the Plaintiffs suffered damages of $74,214.80.

These allegations are sufficient to plead that the Defendants breached the contract by delivering crawfish that smelled bad, that was of very poor quality, that was not fit for resale to restaurant customers, and that was not fit for human consumption. Accordingly, this is not grounds for a demurrer.

The Defendants argue that they performed their duties by delivering the goods in a timely manner. However, the Plaintiffs’ claim is that the Defendants breached the express warranty in the contract by delivering crawfish that was not fit for human consumption. This is sufficient to plead the breach.

The Defendants also argue that it cannot be ascertained whether the contract is oral, written, or implied by fact. This is not correct. The Plaintiffs allege in paragraph 17 that a written contract existed based on an invoice. Since the Plaintiffs expressly identify the contract as written, it can be readily ascertained from the pleadings that the contract was written.

The Defendants then argue that the Plaintiffs did not plead that they breached the implied covenant of good faith and fair dealing. The Plaintiffs’ first cause of action pleads that the Defendants breached the contract by delivering crawfish that was not fit for human consumption. The Plaintiffs allege that this breached an express warranty and the implied warranty of good faith and fair dealing in that the Defendants’ delivery of crawfish not fit for human consumption thwarted the purpose of the contract, which was to obtain crawfish that could be resold to restaurants for human consumption. These allegations are sufficient to identify the breach.

The Defendants next argue that the Plaintiffs did not plead that they lost profits with sufficient particularity. However, this argument does not demonstrate that there are grounds for a demurrer to the cause of action because it does not identify any missing element in the first cause of action. Since the Plaintiffs alleged that they had damages of $74,214.80 for the value of the contract, they have pleaded the elements of damages.

Further, a review of the pleadings reveals that the Plaintiffs alleged in paragraph 10 that they lost profits of $11,132.22 because they had to refund this amount of money to the restaurants to which the Plaintiffs had delivered the crawfish. This is sufficient to identify the basis for seeking lost profits.

Therefore, the Court overrules the demurrer to the first cause of action.

b. Second Cause of Action for Common Count

The Defendants argue that there are grounds for a demurrer to the common counts cause of action because the demurrer to the first cause of action should be sustained. This argument is based on case law finding that if a plaintiff is not entitled to recover under one count in a complaint, it is proper to sustain a demurrer to a common count set forth in the complaint when it is obviously based on the set of facts specifically pleaded in the first count. Zumbrun v. University of Southern California (1972) 25 Cal. App. 3d 1, 14.

However, as discussed above, there are no grounds to sustain a demurrer to the first cause of action. Accordingly, the Defendants have not identified any grounds for a demurrer to the second cause of action for common count.

Therefore, the Court overrules the demurrer to the second cause of action.

2. Motion to Strike

The Defendants argue that the Defendant, Sammi Hsu, is not a proper party the case because he was not a party to the contract. However, the Plaintiffs alleged in paragraph 17 that the contract was with both Defendants, Pacific Marine Foods, Inc. and Sammi Hsu. These allegations are assumed true for the purposes of ruling on the motion to strike. Courtesy Ambulance Serv. v. Superior Court (1992) 8 Cal.App.4th 1504, 1519. Since the Plaintiffs allege that Sammi Hsu was a party to the contract, the First Amended Complaint pleads facts demonstrating that he is a proper party to this case.

Therefore, the Court denies the motion to strike.

RULING: Overrule demurrers to first and second causes of action. Deny motion to strike.