Case Name: ICTLV, Inc. & Axis Clinical Trials, Inc. v. Anacor Pharmaceuticals, Inc.
Case No.: 16CV293925

This is an action primarily for breach of contract brought by Plaintiffs ICTLV, Inc. and Axis Clinical Trials, Inc. (“Plaintiffs”). Presently before the Court is the demurrer to Plaintiffs’ original (form) Complaint by Defendant Anacor Pharmaceuticals, Inc. (“Defendant”). The form Complaint states claims for: 1) Breach of written contract; 2) Common Counts, and; 3) “Unjust enrichment and Quasi-Contract in Equity.” The third cause of action is listed in Paragraph 8 on page 2 of the form complaint (which begins by stating “The following causes of action are attached . . .”) but is not stated in its own attachment to the form complaint.

Request for Judicial Notice
With its demurrer Defendant has submitted a request for the Court to take judicial notice of a copy of the Complaint pursuant to Evidence Code §§452(d) and (h). Notice is GRANTED under Evidence Code §452(d) (court records) only and the Complaint can only be noticed as to its existence and filing date, and not as to its contents. This request is largely redundant, as the Court in ruling on a demurrer already considers the contents of the pleading under attack and assumes the truth of its factual allegations.

Demurrer to Complaint
In ruling on a demurrer the Court treats it “as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.” (Piccinini v. Cal. Emergency Management Agency (2014) 226 Cal.App.4th 685, 688, citing Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “A demurrer tests only the legal sufficiency of the pleading. It admits the truth of all material factual allegations in the complaint; the question of plaintiff’s ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court.” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213-214.)

Defendant’s demurrer to the entire complaint and to each cause of action on grounds of uncertainty is OVERRULED. Uncertainty is a disfavored ground for demurrer and is typically sustained only where the pleading is so bad the responding party cannot reasonably respond. (See Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal.App.4th 612, 616 [“A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.”]) Here it is apparent from its other arguments that Defendant understands what the Complaint and each cause of action at least attempts to allege and there is no true uncertainty.

Defendant’s demurrer to the first cause of action for breach of contract on the ground that it fails to state sufficient facts is OVERRULED. Contrary to Defendant’s arguments, a Plaintiff is not required to attach a copy of the contract or quote its terms verbatim in order to adequately state a breach of contract claim. (See Construction Protective Services v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 199 [“plaintiff may plead the legal effect of the contract rather than its precise language” in an action based on a written contract.]) Pleading the “legal effect” of an alleged contract does not require pleading specific facts. The allegations in the Complaint’s breach of contract attachment that in 2012 Plaintiffs and Defendant entered into a written contract where “Plaintiffs would provide clinical drug studies in exchange for compensation by the defendant,” and that on “4/16/2012” Defendant breached by “failing to pay in full,” and that Plaintiffs suffered $29,000 in damages proximately caused by that breach are sufficient to state a claim.

Defendant’s demurrer to the second cause of action for Common Counts on the ground that it fails to state sufficient facts is OVERRULED. The only argument made by Defendant as to why the claim fails to state sufficient facts is the (incorrect) argument that the breach of contract claim it is pled in the alternative to fails to state sufficient facts. The only essential allegations of a common count are: (1) the statement of indebtedness in a certain sum; (2) the consideration – i.e., goods sold, work done, etc.; and (3) nonpayment. (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460.) These are adequately stated on the Common Count attachment to the Complaint.

Defendant’s demurrer to the third cause of action for “Unjust Enrichment and Quasi-Contract in Equity” on the ground that it fails to state sufficient facts is SUSTAINED with 10 days’ leave to amend.

California authorities do consistently recognize a common law claim based on principles of reimbursement and restitution due to unjust enrichment. (See, e.g., Hartford Cas. Ins. Co. v. J.R. Mktg., LLC (2015) 61 Cal.4th 988, 998 [discussing cause of action for unjust enrichment entitling plaintiff to reimbursement]; Hirsch v. Bank of America (2003) 107 Cal.App.4th 708, 721-722 [plaintiffs stated “a valid cause of action for unjust enrichment based on” defendants’ unjust retention of fees at the expense of plaintiffs]; Lectrodryer v. SeoulBank (2000) 77 Cal.App.4th 723, 726 [plaintiff “satisfied the elements for a claim of unjust enrichment” by alleging receipt and unjust retention of a benefit at the expense of another].) Also, it is permissible at the pleading stage to allege both an express contract and a “quasi-contract” theory. While Defendant is correct that Plaintiffs may not ultimately recover on both a contract and a quasi-contract theory, Plaintiff may plead alternative legal theories at this stage just as they have done with the common count claim.

However, as noted above, Plaintiffs have failed to do anything more than list the third cause of action on page 2 of the Complaint and refer to it elsewhere; no attachment for the third cause of action is provided. Having chosen to allege the claim as a distinct third cause of action it is insufficient to merely refer to it on page 2 of the Complaint and on the Common Count attachment (at CC-1b(6)). “The Judicial Council pleading forms have simplified the art of pleading, and have made the task of drafting much easier. Nevertheless, in some cases more is required than merely placing an ‘X’ in a box. . . . [I]n order to be demurrer-proof, a form ‘complaint must contain whatever ultimate facts are essential to state a cause of action under existing statutes or case law.’” (People ex rel. Dept. of Transportation v. Superior Court (1992) 5 Cal.App.4th 1480, 1484 [internal citations omitted, emphasis in original].)