Avia Spa Property, Inc. vs Carlyle Salon & Style Bar, LLC
Case No: 19CV01622
Hearing Date: Fri May 31, 2019 9:30

Nature of Proceedings: Demurrer to First Amended Complaint

TENTATIVE RULING: The demurrer is sustained, with leave to amend on or before June 7, 2019.

Background: This is a commercial unlawful detainer action, which was filed on March 26, 2019. It followed a previous commercial unlawful detainer action which had been filed on December 18, 2018, and which, after the filing of a demurrer, motion to strike, and motion to quash, was dismissed without prejudice on January 28, 2019.

In the current action, a First Amended Complaint (FAC) was filed on April 15, 2019, to correct the defect in the original complaint, which impermissibly been filed without having been verified. The FAC alleged that the parties entered into a written agreement under which defendant was to pay $2,900/month for a period of 5 years. It alleged further that a 3-day Notice to Quit had been hand served upon defendant on March 20, 2019, and that the period expired on March 25, 2019. The Notice included an election of forfeiture. The Notice to Quit was based upon defendant’s alleged breach of the lease, by failing to comply with Section 12.1 of the commercial lease agreement, which prohibited defendant from assigning, transferring, mortgaging or encumbering or subletting any part of the its interest in the premises without the Lessor’s prior written consent. Attached as Exhibit 1 to the FAC is an AIR Commercial Real Estate Association Standard Industrial/Commercial Multi-Tenant Lease-Gross, which purports to have been entered into between plaintiff and defendant, along with an Option to Extend the lease term, and a Right of First Refusal to Purchase, related to a portion of the premises which, if it became available, would be first offered to defendant to lease. The lease attached to the FAC is unsigned by any party. Attached as Exhibit 2 to the FAC is the 3-Day Notice to Quit, which sets forth the provision of the lease agreement which prohibited the assignment or subletting of any portion of the leased premises without the landlord’s prior written consent, and which provided that any violation of the provision could be treated by the landlord as a noncurable breach, for which the landlord could seek termination of the lease. The Notice also elects to terminate and declare a forfeiture of the lease. Attached as Exhibit 3 to the FAC is the proof of service of the 3-day notice.

On April 22, 2019, defendant filed a Demurrer, along with its Answer. Describing the unlawful detainer action as an attempt to strong-arm defendant out of a lease which plaintiff no longer deems to be financially advantageous, defendant contends that the FAC is uncertain because the Lease it incorporates is unsigned, un-initialed (each page includes lines for initials), and incomplete (since it indicates it has an Addenda consisting of ¶¶ 50 through 52, and a site plan, but the attached lease does not include any addenda identified as ¶ 51 or a site plan). Defendant contends that, at best, the document equates to a proposed contract, or support for an oral contract, but that contradicts ¶ 6.b. which alleges the parties entered into a written agreement. Additionally, deeming it an allegation of an oral contract would violate the statute of frauds. The uncertainty and ambiguity is magnified by the fact that plaintiff’s prior unlawful detainer action pleaded the existence of an entirely different written lease between the parties, and then subsequently presented yet another version of a lease (also unsinged, un-initialed, and incomplete) with a Notice of Errata. (Defendant seeks judicial notice of the documents in the prior action.)

Plaintiff has opposed the demurrer, contending that defendant’s assertion that the attachment of the unsigned lease rendered the FAC uncertain is disingenuous, given that defendant produced a signed copy of the complaint in discovery, and plaintiff properly alleged that the written agreement attached as Exhibit 1 was the agreement between plaintiff and defendant. Plaintiff asserts that defendant’s arguments about plaintiff’s motivations (in filing the UD action because defendant has an under-market rent under the lease) is irrelevant, given defendant’s incurable breach of the lease. Plaintiff contends it only filed the UD complaint with an unsigned copy of the lease, because it did not have a signed copy, and asserts that defendant acted in bad faith in asserting uncertainty based upon the unsigned lease, when had an exact copy of the signed lease. Plaintiff asserts that defendant has admitted that it was in incurable breach of the lease by subletting the premises in direct violation of the terms of the lease. Plaintiff contends the unsigned lease “would have satisfied the Statute of Frauds if necessary,” since defendant admitted that a contract had been made by providing a copy of the signed lease in discovery. The opposition is accompanied by the declaration of plaintiff’s counsel, who attaches a copy of the signed lease, and states that he received it from defense counsel in response to discovery requests.

In its reply, defendant asserts that plaintiff’s opposition contained new facts and a new exhibit which did not appear anywhere in the complaint, and should be treated as an acknowledgment of the FAC’s defects, and a request for leave to file a further amended complaint. It reiterates that the FAC is uncertain in that it is unclear if plaintiff intended to allege a written or oral lease, and it is unclear if plaintiff is disavowing the missing portions of the lease, and that the ambiguity is compounded by the fact that plaintiff pleaded three different versions of the lease without ever explaining how or why it had done so. Where a version of the lease is alleged to be controlling, the fact that defendant possesses a different version does not correct the defect in the FAC. None of the versions plaintiff has alleged completely match the copy attached to the opposition declaration. Defendant urges the court to disregard the opposition papers, which were filed 8 court days prior to the hearing, rather than the required 9, and asserts that plaintiff has not met its burden to show a basis for leave to amend.

ANALYSIS: Taking into consideration the matters of which judicial notice is proper, in conjunction with the unsigned lease agreement which is incorporated into the FAC, the Court finds the complaint to be uncertain, and will sustain the demurrer, with leave to amend. The Court does not find any uncertainty in the allegations in ¶ 15, and in fact finds those allegations necessary to a proper understanding of the complaint.

The court’s task in ruling on a demurrer is to determine whether the complaint states a cause of action. (People ex rel. Lungren v. Superior Court (1996) 14 Cal.4th 294, 300.) A demurrer admits the truth of all material facts properly pleaded (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 966-967), no matter how unlikely or improbable they may be (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604), or how unlikely it will be that plaintiff will be able to prove the claim (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213-214). The court also assumes the truth of all reasonable inferences that may be drawn from the properly pleaded facts. (Reynolds v. Bement (2005) 36 Cal.4th 1075, 1083.) The assumption of truth does not apply, however, to contentions, deductions, or conclusions of law or fact. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters, and therefore lies only where the defects appear on the face of the pleading or are judicially noticed. (Id.) A demurrer for uncertainty will be sustained only where the complaint is so bad that defendant cannot reasonably respond—i.e., he or she cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him or her. (Khoury v. Maly’s of Calif., Inc. (1993) 14 CA4th 612, 616.)

While it is seldom appropriate for a court to sustain a demurrer for uncertainty, the Court believes that this is an appropriate case for it to do so. In having alleged multiple different versions of the lease agreement in various verified pleadings, both in this action and in the prior unlawful detainer action, plaintiff made it impossible for defendant to ascertain precisely which lease agreement plaintiff contended was controlling and formed the basis for the unlawful detainer action. That defendant possessed a signed copy of the lease agreement did not remove this uncertainty, particularly given that it differed in some respects from the versions which plaintiff had verified under penalty of perjury were controlling with respect to the landlord-tenant relationship between the parties.

The Court notes, however, that it find no uncertainty or ambiguity in the allegations of ¶ 15 of the FAC, and in fact notes that these allegations are essential to a proper understanding of the basis of the complaint. Without those allegations, both the court and the defendant are left to wonder about the basis for the 3-day notice to quit which was served upon defendant, and are left to guess the nature of the purported breach of condition giving rise to the unlawful detainer action. The Court also finds defendant’s arguments that the action is an attempt to strong-arm it out of a lease that is no longer financially advantageous to plaintiff, to be irrelevant to the demurrer.

The Court will sustain the demurrer, with leave to amend on or before June 7, 2019. In any further amended complaint which plaintiff files, plaintiff shall attach the version of the lease agreement which it now contends is the operative version which underlies the unlawful detainer action, and either explain in the complaint why it is that it now relies on this version rather than the previous versions which were also attached to verified pleadings, or expressly disavow any other versions of the complaint other than the one attached to the amended pleading it files.