Case Number: BC547567    Hearing Date: October 20, 2014    Dept: 40

GOLDEN TEXTILE, INC. v. SEONG CHUL MIN, et.al.
DEMURRER TO THE COMPLAINT (x2)

Case No: BC547567
Date: October 20, 2014
Tentative Ruling: The demurrer of Catch-153 is sustained with 10 days leave to amend as to the first cause of action. The demurrer of Min is sustained in its entirety with 10 days leave to amend.

Defendant Catch-153 and Defendant Seong Chu Min each filed a demurrer to the complaint. The grounds are identical and the opposition filed is a joint opposition. Moving parties filed a joint reply.

While each demurrer states that it is challenges all eight causes of action individually for uncertainty and failure to state a cause of action, the demurrers do not address each cause of action in its own right. Instead, each Defendant raises three arguments. The demurrer argues each cause of action must fail because (1) no contract or agreement is attached and no terms are set out; (2) Plaintiff provides no facts alleging Defendant Seong Chul Min’s alter ego liability; and (3) Plaintiff’s common count causes of action fail because they all rely on breach of contract and it is not clear there is a contract.

The Court finds that the complaint is not uncertain.

A demurrer for failure to state a cause of action lies as to an “action founded upon a contract,” on the ground that one cannot ascertain “whether the contract is written, is oral, or is implied by conduct.” (CCP §430.10(g).) “In an action based on a written contract, the plaintiff may plead the legal effect of the contract rather than its precise language.”(Ochs v. PacifiCare of Cal. (2004) 115 Cal. App. 4th 782, 795. Contract terms may be alleged generally according to legal intendment. (Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198-199.) Terms of an oral contract may be pleaded generally as to its effect, because it is rarely possible to allege the exact words. (Scolinos v. Kolts (1995) 37 Cal. App. 4th 635, 640.)

The complaint alleges Defendants entered into a contract with Plaintiff for the purchase of fabrics. (¶¶16, 10.) It is alleged the contract is evidenced by the written Terms and Conditions and invoices received by Defendants. (¶16.) Plaintiff alleges that pursuant to the contract, Defendants were to pay Plaintiff within 60 days of the goods being dispatched. (¶16.) The written Terms and Conditions attached to the complaint do not appear to bear the names of any of the parties. Neither of the two invoices attached to the complaint contain terms but do bear Defendant Catch-153’s name. The Court finds that while the other terms of the contract are sufficiently clear and that the complaint states that both defendants entered into the contract, the complaint does not specifically say that the contract was oral, or written, or implied by conduct and who specifically entered into the agreement on Defendants’ behalf. The Court notes that it is unclear whether Min entered into the oral or written agreement on behalf of Catch-153 or himself or both or whether someone else entered into the agreement on behalf of Catch-153. The invoice exhibit B only bears the name of Catch-153. The demurrers are sustained for failure to state a cause of action on this basis.

As to the issue of Seong Chul Min’s alter ego liability, the complaint alleges that Min and Catch 153 are alter egos. Defendant argues that throughout the complaint, because Plaintiff alleges the facts therein as to defendants generally, it is unclear who the contracting parties are. That argument is addressed above. To allege alter ego, plaintiffs must plead a unity of interest and ownership such that the separate personalities of the corporation and individuals do not exist, and that an inequity will result if the corporate entity is treated as the sole actor. (Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal. App. 4th 1269, 1285.). While Plaintiffs have pled generally the elements of alter ego liability, no specific facts have been set forth. Plaintiffs state they need to obtain discovery from Defendants in that regard. That underlying facts and evidence regarding alter ego would be specifically within the purview of the Defendants, however the pleading should include at a minimum Plaintiff’s information and belief as to Min’s role.

As to the second through sixth causes of action, Defendant argues that where these causes of action rely on the same facts underlying the contract claims these causes of action fail as well. (See Hays v. Temple (1974) 23 Cal.App.2d 690) This is not well taken as to Catch-153. Here, the allegations are sufficient as to Catch-153, but due to the question of Min’s role as a contracting and/or as an alter ego the remaining causes of action are sustained as to Min.