A demurrer presents an issue of law regarding the sufficiency of the allegations set forth in the complaint. Lambert v. Carneghi (2008) 158 Cal.App.4th 1120, 1126. The challenge is limited to the “four corners” of the pleading (which includes exhibits attached and incorporated therein) or from matters outside the pleading which are judicially noticeable under Evidence Code §§ 451 or 452. The complaint is read as a whole: material facts properly pleaded are assumed true; contentions, deductions or conclusions of fact/law are not. Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Jenkins v. JP Morgan Chase Bank, NA (2013) 216 Cal.App.4th 497, 506. Critically here, where facts contained in attached exhibits contradict or raise doubt about factual averments in the body of the pleading, the former are given precedence. See Gilman v. Dalby (2009) 176 Cal.App.4th 606, 613; Holland v. Morse Diesel International, Inc. (2001) 86 Cal.App.4th 1443, 1447.

Here, the personal guaranty attached to the Complaint as Exhibit ‘D’ does indeed condition liability upon “prompt payment by” Sun Kim (she is not alleged to have failed to make any payments) or any payment due from a ‘Tenant’ (which at the time was limited to those whom Sun Kim received her assignment from). However, a number of provisions in the various agreements support the contention that Sun Kim signed a continuing guaranty capable of reaching the extended lease period:

 Lease ¶15.5(d): “No transfer relating to the lease or agreement … shall relieve tenant or guarantor of the lease from any liability and obligations under this lease.”

 Guaranty ¶2: “This guarantee is a continuing one and shall terminate only upon payment by Tenant of all the rents and other sums owing under the lease.”

 Assignment ¶4: “Transferor hereby agrees that all guarantees … remain in full force and effect.”

A surety or guarantor is one who promises to answer for the debt, default, or miscarriage of another. Guaranties of collection and continuing guarantees are forms of suretyship obligations. Civil Code §2787. A guaranty relating to a future liability under successive transactions, which either continue his liability or from time to time renew it after it has been satisfied, is called a continuing guaranty. Civil Code §2814.

As a general rule, unless the contracts provide otherwise, a tenant will remain liable under the lease despite its assignment of interest. Tsemetzin v. Coast Fed. Sav. & Loan Ass’n (1997) 57 Cal.App.4th 1334, 1345-1347; Standard Fireproof Bldg. Co. v. Carpenter (1947) 79 Cal.App.2d 330, 331. The assignor remains a primary obligor under the lease, and is not exonerated unless a substantial impairment of rights occurs thereafter. De Hart v. Allen (1945) 26 Cal.2d 829, 832; Bennett v. Leatherby (1992) 3 Cal.App.4th 449, 453 [lease guarantors exonerated from guarantor liability when lessor settles with sublessees and executes all-encompassing release, thereby impairing guarantors’ subrogation rights against sublessees].

If the lease contains an option to extend the term, the assignor remains liable for accruing rent during the option period in the event the assignee exercises the option. Realty & Rebuilding Co. v. Rea (1920) 45 Cal.App. 673, 674. This is not the same if the assignee holds over. Burroughs v. Ben’s Auto Park, Inc. (1945) 27 Cal.2d 449, 454; Meredith v. Dardarian (1978) 83 Cal.App.3d 248, 253-255.

Although the case did not involve an assignment, the scope of a continuing guarantee in the face of an option to extend was discussed in Central Building, LLC v. Cooper (2005) 127 Cal.App.4th 1053, 1059-1063 (in pertinent part):

“Guaranty agreements may be limited or continuing. A guaranty relating to a future liability of the principal, under successive transactions, which either continue his liability or from time to time renew it after it has been satisfied, is called a continuing guaranty. The guaranty of payment of a tenant’s present and future rent liability is an example of a continuing guaranty. In contrast to a continuing guaranty, the example of a limited guaranty in the above referenced California Continuing Education of the Bar publication provides, in part: ‘At the expiration of the Guaranty Period, the obligations of Guarantor under this Guaranty shall automatically terminate.’ The ‘guaranty period’ is specifically defined as the starting and ending date of the lease. No similar limiting language is present in the guaranty agreements in this case. The lease in this case contains clear language allowing modification by an agreement in writing. The language in the relevant documents plainly makes the guaranty applicable to modifications in the lease such as extensions of the lease term. Even without the express term in the guaranty allowing modification, a modification of the underlying obligation generally does not revoke a continuing guaranty, but only modifies the guaranty in the same way that the underlying obligation is modified. The guarantor is only discharged if the modification (other than an extension of time) creates a substituted contract or imposes risks on the secondary obligor fundamentally different from those imposed pursuant to the transaction prior to modification. The Restatement explains that a ‘substituted contract’ is a new contract that discharges or satisfies the original duty and therefore discharges the guarantor.”

So, in the end, this Court is left with contract provisions which appear to bind Kim to Goodanksi’s contractual obligations into the extended period. It may be that Kim never intended such an outcome since her contractual obligations were set to expire within seven months but for the assignment – which thereafter extended her obligations from seven months to potentially10 years.

At the pleading stage, the complaint is sufficient. It may be that admissible evidence brings about a different result on summary judgment or trial.

Demurrer overruled. Defendant to answer in 10 days.