2017-00223509-CL-CL

JH Portfolio Debt Equities, LLC vs. Song Lim

Nature of Proceeding: Hearing on Demurrer

Filed By: Kwun, Richard

Appearance required by all parties, either in person or court-call:

This matter was continued from February 23, 2018, for counsel to meet and confer pursuant to Code of Civil Procedure section 430.41. Defendant Song Lim (“Defendant”) failed to file any meet and confer declaration as required by Code of Civil Procedure section 430.41. Accordingly, the parties were ordered to meet and confer, and Defendant was ordered to file a declaration no later than March 26, 2018, regarding the results of the meet and confer. Defendant has not filed any declaration in connection with this demurrer.

Prior to the hearing, the parties shall meet and confer in person or by telephone as required by Code of Civil Procedure section 430.41. The parties shall then be prepared to discuss the results of their meet and confer efforts at the hearing.

Assuming the parties persuade the Court at the hearing that they have satisfied the meet and confer requirements of section 430.41, and that those meet and confer efforts did not resolve any of the issues raised in the demurrer, the Court is inclined to rule as follows.

Defendant Song Lim’s (“Defendant”) demurrer to the complaint is OVERRULED.

Plaintiff JH Portfolio Debt Equities, LLC (“Plaintiff”) filed its complaint on December 8, 2017, alleging causes of action for account stated and open book account against Defendant.

Defendant now demurs to each cause of action on the ground that Plaintiff has failed to state a cause of action because it is not the real party in interest. Defendant

contends the real party in interest is PayPal.

The purpose of a demurrer is to test the legal sufficiency of a claim. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal. App. 4th 968, 994.)

The pleading rules applicable to demurrers are now familiar and well established. Pleadings are to be liberally construed. (Code Civ. Proc. § 452) A demurrer admits the truth of all material facts properly pled and the sole issue raised by a general demurrer is whether the facts pled state a valid cause of action – not whether they are true. ( Serrano v. Priest (1971) 5 Cal. 3d 584, 591.)

A demurrer may be sustained only if the complaint lacks any sufficient allegations to entitle the plaintiff to relief. (Financial Corp. of America v. Wilburn (1987) 189 Cal. App. 3d 764, 778.) “Plaintiff need only plead facts showing that he may be entitled to some relief . . . , we are not concerned with plaintiff’s possible inability or difficulty in proving the allegations of the complaint.” (Highlanders, Inc. v. Olsan (1978) 77 Cal. App. 3d 690, 696-697.) “[Courts] are required to construe the complaint liberally to determine whether a cause of action has been stated, given the assumed truth of the facts pleaded.” (Picton v. Anderson Union High School Dist. (1996) 50 Cal. App. 4th 726.)

Plaintiff has sufficiently pleaded facts to establish it is the successor in interest to the original creditor, Synchrony Bank, and the real party in interest. The Complaint alleges the following. Defendant applied for and received an application for credit with Synchrony Bank and over time, charged money on the account. (Complaint at ¶¶ 9, 12, and 14.) Defendant has maintained an outstanding balance on the account for the last four years. (Complaint at ¶¶ 15, 22, 23 and Exhs. B, C.) The account was assigned for value to Plaintiff and Plaintiff is the current holder of the debt. (Complaint at ¶¶ 10, 21, Exh. A.) The foregoing allegations must be accepted as true on a demurrer and the Court finds they are sufficient at this stage to establish Plaintiff is the real party in interest.

The Court notes the Declaration of Brooke Park submitted in opposition to this demurrer was not considered since a demurrer is necessarily limited to the face of the pleadings and may not involve extrinsic evidence. A demurrer “tests the pleadings alone and not the evidence or other extrinsic matters.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.” (McKenney v. Purepac Pharm. Co. (2008) 162 Cal.App.4th 72, 79.) Extrinsic evidence may not properly be considered on demurrer. (Ion Equipment Corp. v. Nelson (1980) 110 Cal. App. 3d 868, 881; Hibernia Savings & Loan Soc. v. Thornton (1897) 117 C. 481, 482.)

Defendant’s demurrer is OVERRULED.

Although not addressed, the Court would note that in California, it has long been settled the allegation of claims using common counts is good against special or general demurrers. (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460.)

Defendant shall file and serve his answer by April 16, 2018.