Case Number: BC688108 Hearing Date: May 25, 2018 Dept: 47

Jim Goudarzi dba Universal Collection Co. v. Duk Hwan Kim, et al.

DEMURRER TO COMPLAINT

MOVING PARTY: Defendants Duk Hwan Kim, Gyu Ha Choi and Adeline LA, Inc.

RESPONDING PARTY(S): No opposition filed.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This is an action for breach of a textile and clothing credit account and continuing personal guaranty thereof.

Defendants Duk Hwan Kim, Gyu Ha Choi and Adeline LA, Inc. demur to the Complaint.

TENTATIVE RULING:

Defendants Duk Hwan Kim, Gyu Ha Choi and Adeline LA, Inc.’s demurrer to the Complaint is SUSTAINED with leave to amend as to the first and fifth causes of action, SUSTAINED without leave to amend as to the fourth cause of action, and OVERRULED as to the sixth cause of action.

Plaintiff is given 30 days leave to amend, consistent with this ruling.

DISCUSSION:

Demurrer

Meet and Confer

The Declaration of Ryan J. Derose reflects that the meet and confer requirement set forth in CCP § 430.41 was satisfied.

Analysis:

1, First Cause of Action(Breach of Contract).

The Credit Acceptance Application and Continuing Personal Guaranty which forms the basis of the breach of contract cause of action is attached as Exhibit 1 to the Complaint[1]. However, that written contract does not set forth the terms alleged at ¶ 17 that Defendant Adeline LA Inc. could place orders for merchandise and would thereafter pay for such merchandise in a timely manner. If such language was included on the reverse side of the form, it must be attached.

Moreover, Demurring Defendant Gyu Ha Choi did not sign that document. Plaintiff must address the statute of frauds set forth in Civil Code § 1624(a)(2), requiring a memorandum signed by the party to be charged for a special promise to answer for the debt or default of another.

Generally speaking, leave to amend must be allowed where there is a reasonable possibility of successful amendment. Goodman v. Kennedy (1976) 18 Cal.3d 335, 348. Such is the case here for this particular cause of action.

The demurrer to the first cause of action is SUSTAINED with leave to amend.

2. Fourth Cause of Action (Breach of Covenant of Good Faith and Fair Dealing).

This cause of action merely realleges a breach of contract. Where a cause of action for BICGFFD merely realleges the breach of contract, it is superfluous and may be disregarded. Bionghi v. Metro. Water Dist. (1999) 70 Cal.App.4th 1358, 1370.

The demurrer to the fourth cause of action is SUSTAINED without leave to amend.

3. Fifth Cause of Action (Unjust Enrichment/Restitution/Disgorgement).

“Unjust enrichment is not a cause of action, however, or even a remedy, but rather ‘ “ ‘a general principle, underlying various legal doctrines and remedies’ ” … . [Citation.] It is synonymous with restitution.’ ” (McBride v. Boughton (2004) 123 Cal.App.4th 379, 387 [20 Cal. Rptr. 3d 115].) Like the trial court, we will construe the cause of action as a quasi-contract claim seeking restitution.

“[A]n action based on an implied-in-fact or quasi-contract cannot lie where there exists between the parties a valid express contract covering the same subject matter.” (Lance Camper Manufacturing Corp. v. Republic Indemnity Co. (1996) 44 Cal.App.4th 194, 203 [51 Cal. Rptr. 2d 622].) However, “restitution may be awarded in lieu of breach of contract damages when the parties had an express contract, but it was procured by fraud or is unenforceable or ineffective for some reason.” (McBride v. Boughton, supra, 123 Cal.App.4th at p. 388.) Thus, a party to an express contract can assert a claim for restitution based on unjust enrichment by “alleg[ing in that cause of action] that the express contract is void or was rescinded.” (Lance Camper Manufacturing Corp. v. Republic Indemnity Co. supra, at p. 203.) A claim for restitution is permitted even if the party inconsistently pleads a breach of contract claim that alleges the existence of an enforceable agreement. (Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1389 [137 Cal. Rptr. 3d 293].)

Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 231 (bold emphasis added).

Here, the fifth cause of action does not allege that the express contract between the parties was void or rescinded.

Generally speaking, leave to amend must be allowed where there is a reasonable possibility of successful amendment. Goodman v. Kennedy (1976) 18 Cal.3d 335, 348. Such is the case here for this particular cause of action.

The demurrer to the fifth cause of action is SUSTAINED with leave to amend.

4. Sixth Cause of Action (Unfair Competition Law).

A breach of contract in turn may form the predicate for a UCL claim, “ ‘provided it also constitutes conduct that is “unlawful, or unfair, or fraudulent.” ’ [Citations.]” (Puentes v. Wells Fargo Home Mortgage, Inc. (2008) 160 Cal.App.4th 638, 645 [72 Cal. Rptr. 3d 903].) With respect to the unfairness prong of Business and Professions Code section 17200, [*490] appellate courts have recognized that “a systematic breach of certain types of contracts (e.g., breaches of standard consumer or producer contracts involved in a class action) can constitute an unfair business practice under the UCL. [Citations.]” (Citations omitted.) Consequently, Arce’s allegations that Kaiser systematically breached its health plan contract by refusing to provide all putative class members with contractually covered services is sufficient to state a class action claim under the UCL.

Arce v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471, 489-90 (bold emphasis added).

Here, the Complaint alleges that Defendants systematically breached the contract by issuing five checks that were not honored by the bank. See Complaint, ¶¶ 46, 48. These are sufficient allegations that Defendants engaged in unlawful or unfair systematic breaches of contract by paying with checks drawn on insufficient funds.

The demurrer to the sixth cause of action is OVERRULED.

Plaintiff is given 30 days leave to amend, consistent with this ruling.

Moving Party to give notice, unless waived.

IT IS SO ORDERED.

Dated: May 25, 2018 ___________________________________

Randolph M. Hammock

Judge of the Superior Court