Case Name:   Stroev v. Kor, et al.

Case No.:       1-13-CV-258392

After full consideration of the arguments and authorities submitted by each party, the court makes the following rulings:

In the complaint, plaintiff/cross-defendant Igor Stroev (“Stroev”) alleges that he did business as SI Engineering (“SI”) until defendant/cross-complainant Alex Kor (“Kor”) promised to grow his business and convinced him to form defendant/cross-defendant Precision Design and Machine, Inc. (“PDM”) in 2013.  Stroev allegedly moved his equipment into a space Kor rented (“Space”) and continued serving SI’s clients, but Kor misappropriated PDM’s funds and failed to generate business.  In November 2013, Stroev alleges that he told Kor that he wanted to dissolve the business, and on November 28, 2013, Kor announced that everything in the Space belonged to PDM and locked Stroev out.  Plaintiff asserts a claim against PDM for dissolution and various claims against Kor, including causes of action for conversion and breach of contract.

In the first amended cross-complaint (“FACC”), Kor alleges that he agreed to contribute capital and to work for PDM, and Stroev agreed to provide equipment and customers.  (FACC, ¶ 10.)  Kor allegedly managed PDM full time from February-November 2013, and PDM paid him $10 per hour.  (Id., ¶ 11.)  On information and belief, Kor alleges that in November 2013, Stroev converted PDM’s funds, removed equipment from the Space, and stole customers, resulting in PDM being unable to pay his wages.  (Id., ¶¶ 12-13.)  Kor asserts causes of action against Stroev and PDM for (1) breach of fiduciary duty, (2) breach of contract, (3) quantum meruit, (4) conversion, and (5) accounting.

Stroev demurs to the second and third causes of action on the ground of failure to allege sufficient facts, and to the second cause of action on the ground of uncertainty.  (See Code Civ. Proc. [“CCP”], § 430.10, subds. (e)-(f).)

In opposition, Kor—a self-represented litigant—centers his arguments on the complaint and presents evidence in support of his assertions.[1]  A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters that are judicially noticeable; courts cannot consider other evidence.  (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.)  Thus, the contents of the complaint and other evidence are not relevant to the Court’s analysis.[2]

The demurrer for uncertainty to the second cause of action is OVERRULED.  (See Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616 [demurrer for uncertainty is strictly construed because ambiguities can be clarified under modern discovery procedures].)

The demurrer for failure to allege sufficient facts to the second cause of action is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND.  Kor adequately alleges performance by stating that he “performed all of the terms and conditions required of him” by the contract.  (FACC, ¶ 21; see also CCP, § 457 [“it may be stated generally that the party duly performed all the conditions on his part”].)  That being said, Kor does not allege how Stroev breached any contract; rather, he alleges that Stroev “refused and continue[s] to refuse to perform.”  (FACC, ¶ 22.)  This is insufficient to support the breach element.  (See Melican v. Regents of Univ. of Calif. (2007) 151 Cal.App.4th 168, 174-175 [pleader must state with certainty the facts constituting the breach].)

Turning to the demurrer for failure to allege sufficient facts to the third cause of action, Kor alleges that “[w]ithin the last two years, [Stroev and PDM] have become indebted to Kor for work, labor, services and materials rendered at the special instance and request of [Stroev and PDM] and for which [Stroev and PDM] promised Kor would be paid the reasonable value.”  (FACC, ¶ 25.)

To the extent Kor alleges that Stroev is indebted to him for materials, it is unclear whether Kor alleges that he gave PDM money that it used to purchase materials, or whether he actually gave materials to PDM.  Whether Kor alleges to be owed compensation for capital or materials is crucial, since he alleges that Stroev promised to provide reasonable compensation for Kor’s labor and initial capital, but not materials.  (FACC, ¶¶ 9-10.)  If Kor allegedly provided capital that PDM used to purchase materials and Stroev has possession of those materials, then it is reasonably possible that Kor will be able to amend his pleading to state a quantum meruit claim against Stroev.  (See MKB Management, Inc. v. Melikian (2010) 184 Cal.App.4th 796, 805 [“a plaintiff may recover money paid for the benefit of the defendant and at the defendant’s request”].)

As for Kor’s quantum meruit claim based on services, Kor does not allege that his services were intended to and did benefit Stroev, and his general allegation that Stroev became indebted to him for his services is inconsistent with his specific allegations.  (See Palmer v. Gregg (1967) 65 Cal.2d 657, 660-661 [to recover in quantum meruit, the defendant must receive the benefits]; see also Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App. 4th 1228, 1236 [specific allegations control over an inconsistent general allegation].)  Since Kor alleges that he did not begin working for PDM and Stroev until February 2013, he cannot also allege that they owe him compensation for his services before that date.  (FACC, ¶¶ 9-10.)  Also, Kor alleges that PDM paid him for his labor from February-November 2013 (id., ¶ 11), and thus, he has already received compensation for that work.  (See generally, Spinney v. Griffith (1893) 98 Cal. 149, 153 [“he who has received” a service “should pay a reasonable compensation therefore”].)  Lastly, Kor alleges that in November 2013, “Stroev began questioning the balances in PDM’s bank account and Kor’s wages,” then essentially stopped working for PDM, and as a result, PDM could not afford to pay Kor’s wages.  (FACC, ¶¶ 12-13.)  However, the labor Kor provided for PDM after Stroev stopped working for PDM was not performed with the intent to benefit, or for the benefit of, Stroev, and thus, Kor cannot assert a quantum meruit claim against Stroev for work performed after Stroev left PDM.  (See Palmer v. Gregg, supra, 65 Cal.2d, at pp. 660-661.)  Thus, Kor does not adequately state a claim for quantum meruit based on services, and since his allegations demonstrate that Stroev does not owe him compensation for services, these defects cannot reasonably be cured by amendment.  (See Balikov v. S. Cal. Gas Co. (2001) 94 Cal.App.4th 816, 819-820 [pleader must show reasonable possibility that defect can be cured by amendment].)

In light of the foregoing, Stroev’s demurrer for failure to allege sufficient facts to the third cause of action is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND; however, leave to amend is only granted to the extent the quantum meruit claim is based on Kor allegedly furnishing capital or materials.

The Court will prepare the order.

[1] Kor’s papers violate numerous provisions of the California Rules of Court (“CRC”).  (See Burnete v. La Casa Dana Apartments (2007) 148 Cal.App.4th 1262, 1267 [aself-represented litigant is “entitled to the same, but no greater, consideration than other litigants and attorneys …. [and] is held to the same restrictive rules of procedure as an attorney”].)  Kor’s papers are double-sided and lack line numbers in violation of CRC, rules 2.102 (“only one side of each page may be used”) and 2.108 (lines must be numbered).  Kor also submits exhibits without an index or tabs as required by CRC, rule 3.1110(f).  Furthermore, the 39-page opposition violates the 15-page limit set forth in CRC, rule 3.1113(d).  Kor did not submit an application to file a longer memorandum (see CRC, rule 3.1113(e)), and does not include a table of contents or authorities and a summary of argument as required by CRC, rule 3.1113(f).  Due to their excessive length, the Court could refuse to consider Kor’s papers, but in this instance, exercises its discretion to consider them.  (See CRC, rules 3.1113(g) [a memorandum that exceeds the page limits must be filed and considered in the same manner as a late-filed paper] & 3.1300 [the court has the discretion to refuse to consider a late-filed paper].)  However, the Court warns Mr. Kor that in the future any pleadings that do not conform to the Rules may not be considered by the Court.

[2] Also, the Court will not take judicial notice of the exhibits submitted with the opposition because Kor did not make a proper request for judicial notice (see CRC, rule 3.1113(l) [request for judicial notice must be in a separate document]), and the matters contained in his exhibits are not subject to judicial notice.  (See Evid. Code, § 450 [courts may only take judicial notice of matters as authorized or required by law].)