Case Number: BC635331 Hearing Date: May 14, 2019 Dept: 4A

Demurrer with a Motion to Strike

The Court considered the demurring and moving papers. No opposition was filed.

BACKGROUND

On September 26, 2016, Plaintiff Maria Luz Perez Cervantes (“Plaintiff”) filed a complaint against Defendants Kulwinder Singh and Singh Tajender Singh for motor vehicle negligence and negligence based on an incident that occurred on July 26, 2016.

On March 1, 2017, Plaintiff filed an amendment designating Defendant Sky Blue Trans, Inc. as Doe 1.

On May 9, 2017, Plaintiff filed an amendment designating Defendant Nevada Interstate Trucking, Inc. as Doe 2.

On December 5, 2018, Wilshire Insurance Company filed an answer in intervention on behalf of Nevada Interstate Trucking, Inc. dba Nit Trans. in response to Plaintiff’s complaint.

On January 2, 2019, Cross-Complainants Sky Blue Trans, Inc. and Tajender Singh filed a cross-complaint against Cross-Defendants Kulwinder Singh, Nevada Interstate Trucking, Inc. dba Nit Trans., and Wilshire Insurance Company alleging indemnification, apportionment of fault, two breaches of contract, breach of implied covenant of good faith and fair dealing, and declaratory relief.

On January 2, 2019, Cross-Complainants Sky Blue Trans, Inc. and Tajender Singh filed a first amended cross-complaint and then on March 4, 2019, a second amended cross-complaint.

On April 3, 2019, Defendant and Cross-Defendant Kulwinder Singh filed a demurrer and motion to strike Cross-Complainants Sky Blue Trans, Inc.’s and Tajender Singh’s second amended cross-complaint (“SACC”) on the grounds that the breach of contract claims do not provide sufficient facts and the claim for attorney’s fees and costs are unwarranted.

Trial is set for July 18, 2019.

PARTY’S REQUESTS

Defendant and Cross-Defendant Kulwinder Singh (“Moving Defendant”) requests the Court to sustain its demurrer to the SACC because: (1) the SACC fails to state sufficient facts for its breach of contract causes of action, and (2) the SACC’s breach of contract causes of action are uncertain.

Moving Defendant also requests the Court for an order striking attorney’s fees and costs from the SACC as there is no basis for such an award.

LEGAL STANDARD

Demurrer

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “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.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) “The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.” (Hahn, 147 Cal.App.4th at p. 747.)

Motion to Strike

Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof. (Code of Civ. Proc. § 435, subd. (b)(1); Cal. Rules of Court, rule 3.1322, subd. (b).) The court may, upon a motion or at any time in its discretion and upon terms it deems proper: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (Code Civ. Proc. § 436, subd. (a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [“Matter in a pleading which is not essential to the claim is surplusage; probative facts are surplusage and may be stricken out or disregarded”].)

California Code of Civil Procedure section 435.5 requires that, before filing a motion to strike, the moving party shall meet and confer¿in person or by telephone¿with the party who filed the pleading that is subject of the motion for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer. The parties are to meet and confer at least five days before the date the responsive pleading is due. (Code Civ. Proc. § 435.5, subd. (a)(2).) The party must also file and serve a declaration detailing the meet and confer efforts. (Code Civ. Proc. § 435.5, subd. (a)(3).)

DISCUSSION

Meet and Confer

The Court notes that Moving Defendant has failed to meet and confer in person or by telephone prior to filing this demurrer and motion to strike. Moving Defendant’s attempt to meet and confer by way of email is not a code-compliant method. (See Case Declarations, ¶ 4, Exh. B.) The Court finds it is in the interest of justice to hear these motions on the merits given that trial is imminent. Nevertheless, the Court cautions that such failure to meet and confer pursuant to the Code of Civil Procedure prior to filing future motions will generally result in the relevant motion’s hearing date being taken off-calendar.

Failure to State Facts

“[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.” (Thrifty Payless, Inc. v. The Americana at Brand, LLC (2013) 218 Cal.App.4th 1230, 1244.) Only ultimate facts alleging the existence of liability based on an alter ego theory are required to be alleged in a complaint to overcome a demurrer. (Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 236.)

A third person can enforce a contract only when that contract was made expressly for the benefit of that third person. (See Southern California Gas Co. v. ABC Const. Co. (1962) 204 Cal.App.2d 747, 750.) “In determining whether a contract was made for the benefit of a third person we look to the terms of the contract.” (The H.N. & Frances C. Berger Foundation v. Perez (2013) 218 Cal.App.4th 37, 44 (citation omitted).)

Attacking the third cause of action for breach of contract, Moving Defendant first argues that the SACC contains no allegations that Cross-Complainants entered into a contract with him. Instead, it is argued that the first breach of contract claim rests entirely on the allegation that Cross-Complainants have a contract with Nevada Interstate Trucking, Inc. dba Nit Trans, and the supporting theory that Moving Defendant is the alter ego of Nevada Interstate Trucking, Inc. Moving Defendant attacks the SACC as lacking in sufficient fact to establish alter ego status. (Demurrer, p. 6:3-6:20.) The Court agrees.

In their cross-complaint, Cross-complainants have asserted bald allegations of alter ego status without any underlying factual allegations to support them. While it is true that a plaintiff alleging alter ego need not provide specific evidentiary allegations to support their claim, there is a requirement that an alter ego theory be supported by the ultimate facts the proponent seeks to prove. (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550). Thus, in Rutherford Holdings, LLC at 236, the Court approved alter ego allegations that asserted that the defendant there “dominated and controlled” the other entity, “that a unity of interest and ownership existed between” the two entities, that the controlled entity was “a mere shell and conduit for [named defendant’s] affairs” and was “inadequately capitalized.” that the controlled entity “failed to abide by the formalities of corporate existence,” that the defendant used the controlled entity’s assets as its own, and that “recognizing the separate existence of [the controlled entity] would promote injustice.” In this case, Cross-complainants have alleged none of these ultimate facts but rather only the bare accusation of alter ego status. As a result, the Court sustains the demurrer as to the allegation of alter ego status and the concomitant failure to allege an actionable contract between the Cross-complainants and Moving Defendant.

Moving Defendant next argues that the SACC fails to allege specific allegations as to how Moving Defendant breached the contract. (Demurrer, p. 6:21-6:25.) The Court finds such facts have been alleged because the SACC states the following in paragraph 30 and is re-alleged in paragraph 35 and 38:

“Cross- Defendants failed to perform Defendant’s obligations under the Tractor Lease including, but not limited to: ¶2 failing to be responsible for insurance losses including damages to vehicle as stated; ¶9 failing to insure the tractor truck under the Nevada Interstate Trucking insurance policy with proper coverage that would provide Cross- Complainants with a defense and indemnification against third party liability.

The Court rules that these allegations describe a breach of contract with sufficient certainty to withstand the demurrer.

Moving Defendant further argues that the SACC fails to allege facts that demonstrate Cross-Complainants Sky Blue Trans, Inc. and Tajender Singh performed according to the contract or have an excuse for nonperformance. (Demurrer, p. 7:1-7:20.) The SACC states that such performance was performed except for performance that had been excused, waived, or prevented by the representations, acts or omissions of Cross Defendants. (SACC, ¶¶ 29, 35, 39.) These broad statements are sufficient to allege performance of conditions as an element of a cause of action for a breach of contract. (See Code of Civil Procedure section 457 (“In pleading the performance of conditions precedent in a contract, it is not necessary to state the facts showing such performance, but it may be stated generally that the party duly performed all the conditions on his part, and if such allegation be controverted, the party pleading must establish, on the trial, the facts showing such performance.”)

Turning to the fourth cause of action for breach of contract as a third-party beneficiary, Moving Defendant argues that the claim fails to plead that the contract was made expressly for the benefit of either Cross-Complainant Sky Blue Trans, Inc. or Cross-Complainant Tajender Singh. It is immaterial that the SACC conclusorily states in paragraph 37 that the contract was made for the benefit of Cross-Complainants, as the Court must look to the contract itself to determine whether they are in fact intended beneficiaries of the contract. The Court can find no indication that the attached contract that it is for the benefit of either Cross-Complainant. The only possible foundation for such a contention is Paragraph 4,which states Cross-Complainant “. . . SKY BLUE TRANS INC management want run all owner operators safely under their DOT,” but this sentence is unintelligible. Accordingly, the third-party breach of contract cause of action is deficient as neither Cross-Complainant Sky Blue Trans, Inc. nor Cross-Complainant Tajender Singh are intended beneficiaries of the operative contract.

Based on the analysis above, the Court finds the SACC fails to allege sufficient allegations to support an alter ego theory of liability because it does not include any ultimate factual allegations necessary to plead alter ego status. Because the existence of a contract between Cross-Complainants and Moving Defendant apparently depends on the alter ego allegations, the Court sustains the demurrer to the third cause of action for breach of contract. The Court also finds that the SACC fails to allege a cause of action for a breach of contract for the benefit of a third party as the attached contract does not indicate that the contract was for Cross-Complainants Sky Blue Trans, Inc.’s or Tajender Singh’s benefit.

Thus, the SACC fails to allege an actionable breach of contract claim. Because there is no asserted basis for attorney’s fees other than a provision in the contract between Cross-Complainants and Nevada Interstate Trucking, Inc., the absence of an actionable contract also invalidates the prayer for attorney’s fees. (See Code Civ. Proc. § 1033.5, subd. (a)(10).)

Accordingly, the demurrer is SUSTAINED with 20 days’ leave to amend.

The motion to strike is GRANTED, with 20 days’ eave to amend. The Court strikes the language in paragraphs 6 and 8 on page 11 of the SACC.

Moving Defendant is ordered to give notice of this ruling.