Case Name: Leon’s Powder Coating, Inc. v. Bowles, Eckstrom & Assoc., LLC
Case No.: 18CV337008

I. Background

This action arises from a dispute over a commercial lease between tenant Leon’s Powder Coating, Inc. (“Plaintiff”) and landlord Bowles, Eckstrom & Associates, LLC (“Defendant”).

According to the allegations in the first amended complaint (“FAC”), Plaintiff leased a commercial space at 2365-2 Lafayette Street in Santa Clara, California, since 2014 to operate a powder coating business. (FAC, ¶ 10.) In 2015, Defendant acquired the building from Plaintiff’s previous landlord. (FAC, ¶ 10.) Plaintiff alleges Defendant modified the building’s parking lot in a manner that precluded safe and convenient access by delivery trucks. (FAC, ¶¶ 15–17.) Additionally, in April 2018, Defendant wrongfully demanded payment of $49,362.19 in back taxes and gave Plaintiff a three-day notice to quit. (FAC, ¶¶ 11–13.) Six months later, Plaintiff paid Defendant under protest. (FAC, ¶ 20.) According to Plaintiff, Defendant wrongfully demanded the taxes as well as expenses for maintenance of common areas notwithstanding the reduction in Plaintiff’s access to those areas and for the purpose of forcing Plaintiff to move so the property could be sold for a large profit. (FAC, ¶¶ 19–22.) Also, when Plaintiff attempted to exercise its option to renew the lease, Defendant proposed an exorbitant rent increase instead of negotiating rent for the new lease term in good faith. (FAC, ¶ 23a.)

Plaintiff asserts causes of action against Defendant for: (1) public nuisance; (2) private nuisance; (3) negligence; (4) “unjust enrichment—assumpsit”; (5) breach of contract; (6) money had and received; (7) declaratory relief; (8) constructive trust; (9) injunctive relief; and (10) breach of warranty.

Currently before the Court is Defendant’s demurrer to each cause of action asserted in the FAC. Defendant demurs to the fifth cause of action on the ground of uncertainty (Code Civ. Proc., § 430.10, subd. (f)) and to the remaining causes of action on the ground of failure to state facts sufficient to constitute a cause of action (Code Civ. Proc., § 430.10, subd. (e)).

II. Discussion

A. First and Second Causes of Action

Defendant argues Plaintiff does not properly plead claims for public and private nuisance because it does not allege there was an unreasonable interference with its use and enjoyment of the commercial space that caused substantial actual damage. But Plaintiff does include allegations to that effect. (FAC, ¶¶ 26–30, 37–40, 44.) And, to the extent Defendant intended to argue that the facts alleged do not amount to an unreasonable interference causing substantial damage as a matter of law, its argument is unsubstantiated and premature. Such a determination is a question of fact that must be resolved by the trier of fact based on a holistic review of the circumstances of a particular case. (San Diego Gas & Electric Co. v. Super. Ct. (1996) 13 Cal.4th 893, 938–39.) To be sure, Defendant does not cite any case in which a court made such a determination at the pleading stage. Accordingly, Defendant’s argument is not well-taken.

Otherwise, Defendant asserts in a conclusory manner that “because a nuisance claim is based upon the same factual predicates as Plaintiff’s negligence claim, it is an improper duplication of that claim.” (Mem. of Pts. & Auth. at p. 6:3–6.) This argument is not persuasive. The cases cited by Defendant do not espouse the broad, categorical rule upon which it purports to rely. (See Melton v. Boustred (2010) 183 Cal.App.4th 521, 542, citing El Escorial Owners’ Assn. v. DLC Plastering, Inc. (2007) 154 Cal.App.4th 1337, 1348.) Moreover, Defendant provides no explanation to support the conclusion that the first and second causes of action are duplicative. And, in any event, the Sixth District has explained that the fact that causes of action are duplicative “is not a ground on which a demurrer may be sustained.” (Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 889–90, citing Code Civ. Proc., § 430.10.) “A quarter-century ago the code authorized a motion to strike ‘irrelevant and redundant’ matter from a pleading. [Citation.]” (Id. at p. 890, original italics.) “But the parallel provision now empowers the court only to ‘[s]trike out any irrelevant, false, or improper matter inserted in any pleading.’” (Ibid., quoting Code Civ. Proc., § 436, subd. (a).) “The elimination of the reference to redundancy may have rested on the irreproachable rationale that it is a waste of time and judicial resources to entertain a motion challenging part of a pleading on the sole ground of repetitiveness. (See Civ. Code, § 3537 [‘Superfluity does not vitiate.’].)” (Ibid.) “This is the sort of defect that, if it justifies any judicial intervention at all, is ordinarily dealt with most economically at trial, or on a dispositive motion such as summary judgment.” (Ibid.)

Based on the foregoing, Defendant does not establish the demurrer to the first and second causes of action is sustainable. The demurrer is therefore OVERRULED.

B. Third Cause of Action

The third cause of action is for negligence. More specifically, Plaintiff denominates its claim as “negligent maintenance of premises.” (FAC at p. 10:2.)

First, Defendant argues Plaintiff fails to allege it breached an independent legal duty. It is true that “[c]onduct amounting to a breach of contract becomes tortious only when it also violates an independent duty arising from principles of tort law…” like the independent duty to refrain from injuring the person or property of another. (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 515, citing Civ. Code, § 1708.) But Defendant’s assertion that Plaintiff does not allege the breach of an independent duty here is incorrect. Plaintiff explicitly alleges Defendant owed and breached a duty of reasonable care as the landowner. (FAC, ¶¶ 46–49.) And, Defendant does not otherwise dispute that the lessor of commercial real estate owes a legal duty to the lessee as well as third parties. (Lopez v. Super. Ct. (1996) 45 Cal.App.4th 705, 714–15.) Consequently, Defendant’s argument lacks merit.

Defendant also argues Plaintiff cannot seek punitive damages in connection with a claim for breach of the implied covenant of good faith and fair dealing. (Mem. of Pts. & Auth. at p. 8:1–2.) It is unclear how this point pertains to Plaintiff’s negligence claim. More significantly, a demurrer is not the proper procedural vehicle for challenging the sufficiency of punitive damages allegations. (Grieves v. Super. Ct. (1984) 157 Cal.App.3d 159, 163; see also Caliber Bodyworks, Inc. v. Super. Ct. (2005) 134 Cal.App.4th 365, 385.) “The adequacy of [ ] punitive damage allegations [may be] tested by motion to strike.” (Grieves, supra, 157 Cal.App.3d at p. 164.)

For these reasons, the demurrer to the third cause of action is OVERRULED.

C. Fifth Cause of Action

Defendant demurs to the fifth cause of action for breach of contract on the ground of uncertainty. A demurrer on the ground of uncertainty tests whether a pleading is ambiguous, uncertain, or unintelligible. (Code Civ. Proc., § 430.10, subd. (f).) “[D]emurrers for uncertainty are disfavored and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Lickiss v. Financial Industry Reg. Authority (2012) 208 Cal.App.4th 1125, 1135.) A demurrer on the ground of uncertainty “is not intended to reach the failure to incorporate sufficient facts in the pleading, but is directed at the uncertainty existing in the allegations actually made.” (Butler v. Sequeira (1950) 100 Cal.App.2d 143, 145–46.) Defendant’s demurrer lacks merit because it does not identify any ambiguity in the pleading. The demurrer to the fifth cause of action on the ground of uncertainty is, therefore, OVERRULED.

Instead, Defendant asserts Plaintiff fails to allege all of the elements of its claim. But a defendant must specify the statutory grounds for a demurrer in the demurrer itself. (Code Civ. Proc., § 430.60; Cal. Rules of Court, rule 3.1320(a).) “Unless it does so, it may be disregarded.” (Code Civ. Proc., § 430.60.) Defendant specified uncertainty as the sole ground for its demurrer in the demurrer itself. Thus, while Defendant’s argument heading states Plaintiff fails to state sufficient facts, that ground was not properly raised and will not be considered.

Ultimately, even assuming Defendant demurred on the ground of failure to state sufficient facts, its supporting argument lacks merit. It states Plaintiff does not “identify the breach of any specific contractual term” and focuses—not on the element of breach—but on whether the terms of the parties’ agreement are adequately pleaded. (Mem. of Pts. & Auth. at p. 9:8–16.) “A written contract may be pleaded either by its terms—set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference—or by its legal effect.” (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489; accord Miles v. Deutsche Bank Nat. Trust Co. (2015) 236 Cal.App.4th 394, 401–02.) Plaintiff attached the parties’ lease to the FAC. Thus, Defendant’s argument lacks merit.

D. Fourth and Sixth Causes of Action

In the fourth cause of action for “unjust enrichment—assumpsit” and sixth cause of action for money had and received, Plaintiff appears to seek the return of the tax payment it made under duress. Defendant advances several arguments in support of its demurrer.

First, Defendant argues unjust enrichment is not a cause of action. It is true that “unjust enrichment is not a cause of action.” (Jogani v. Super. Ct. (2008) 165 Cal.App.4th 901, 911.) Unjust enrichment describes the “result of failure to make restitution under circumstances where it is equitable to do so.” (Lauriedale Associates, Ltd. v. Wilson (1992) 7 Cal.App.4th 1439, 1448.) Even so, this fact merely establishes that Plaintiff’s cause of action is inaptly labeled, which is not a basis for sustaining the demurrer. (See Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38.) In actuality, “[i]f the complaint states a cause of action under any theory, regardless of the title under which the factual basis for relief is stated, that aspect of the complaint” withstands the pleading challenge. (Ibid.) And so, Defendant’s argument is not persuasive.

The fourth cause of action is presumably a claim seeking restitution based on an alternative, equitable theory. (See McBride v. Boughton (2004) 123 Cal.App.4th 379, 388.) As the First District has explained:

There are several potential bases for a cause of action seeking restitution. For example, 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. [Citations.] Alternatively, restitution may be awarded where the defendant obtained a benefit from the plaintiff by fraud, duress, conversion, or similar conduct. In such cases, the plaintiff may choose not to sue in tort, but instead to seek restitution on a quasi-contract theory (an election referred to at common law as “waiving the tort and suing in assumpsit”). [Citations.] In such cases, where appropriate, the law will imply a contract (or rather, a quasi-contract), without regard to the parties’ intent, in order to avoid unjust enrichment.

(McBride, supra, 123 Cal.App.4th at p. 388.) With this context in mind, the Court turns to Defendant’s remaining arguments.

Defendant also argues Plaintiff cannot assert a common count claim because there is still an “executory contract….” (Mem. of Pts. & Auth. at pp. 8–9.) This argument is unsubstantiated. There is a general rule that an action on an express contract and a common count claim are mutually exclusive, but that rule does not apply “if the plaintiff owes no further performance under the contract and nothing remains to be done thereunder except the payment of money by the defendant.” (Ferro v. Citizens Nat. Trust & Savings Bank (1955) 44 Cal.2d 401, 409.) Additionally, a common count is also proper where the defendant has prevented complete performance. (Rains v. Arnett (1961) 189 Cal.App.2d 337, 343.) Defendant provides no analysis of the allegations, lease, and law to support the conclusion that there is an executory agreement covering the money Plaintiff seeks to recover. The absence of any analysis is particularly problematic given Plaintiff is alleging Defendant is not entitled to the payment it made under the lease and merely gave Defendant the money to avoid eviction during the pendency of this litigation. And so, Defendant’s argument is not well-taken.

Finally, Defendant argues the fourth and sixth causes of action are redundant. It provides no reasoned explanation to support this argument. And, as stated above, redundancy is not a basis for sustaining a demurrer. (Blickman Turkus, LP, supra, 162 Cal.App.4th at pp. 889–90.)

In conclusion, the demurrer is not sustainable for the reasons Defendant articulates. Its demurrer to the fourth and sixth causes of action is, therefore, OVERRULED.

E. Seventh Cause of Action

Defendant asserts—without any reasoned explanation or authority—that the “seventh cause of action fails because declaratory relief is manifestly a form of relief and not an independent cause of action.” (Mem. of Pts. & Auth. at p. 10:12–13.) “‘Where a point is merely asserted [ ] without any argument of or authority for its proposition, it is deemed to be without foundation and requires no discussion.’ [Citation.]” (People v. Dougherty (1982) 138 Cal.App.3d 278, 282; accord Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784–85; see also Quantum Cooking Concepts, Inc. v. LV Associates, Inc. (2011) 197 Cal.App.4th 927, 934.) Also, Defendant is incorrect. (See generally Centex Homes v. St. Paul Fire and Marine Insurance Co. (2015) 237 Cal.App.4th 23, 29.) The demurrer to the seventh cause of action is, therefore, OVERRULED.

F. Eighth and Ninth Causes of Action

The eighth and ninth causes of action are labeled as claims for constructive trust and injunctive relief. Defendant’s sole objection to these causes of action is that they are remedies and not independent causes of action. Defendant is correct. “A constructive trust is an involuntary equitable trust created by operation of law as a remedy to compel the transfer of property from the person wrongfully holding it to the rightful owner.” (Communist Party v. 522 Valencia, Inc. (1995) 35 Cal.App.4th 980, 990.) An injunction is also a remedy. (Marlin v. Aimco Venezia, LLC (2007) 154 Cal.App.4th 154, 162) With that said, Defendant’s position is, in essence, that Plaintiff should not have set out its requests for these remedies in separate counts or “causes of action.” Put differently, Defendant is objecting solely to the organization and labeling of the counts in the pleading, which is not a basis for sustaining a demurrer. (See Quelimane Co., supra, 19 Cal.4th at p. 38.) Thus, the demurrer to the eighth and ninth causes of action is OVERRULED.

G. Tenth Cause of Action

In Plaintiff’s tenth cause of action for breach of warranty, it asserts Defendant maintained the building in a manner that breached the implied warranty of habitability. Defendant argues, and Plaintiff seemingly does not dispute, that there is no implied warranty of habitability in a commercial lease. (Muro v. Super. Ct. (1986) 184 Cal.App.3d 1089, 1096–97, distinguishing Green v. Super. Ct. (1974) 10 Cal.3d 616.) And so, the demurrer to the tenth cause of action is sustainable. To be sure, while Plaintiff states in opposition that it is not relying on the implied warranty of habitability and is, instead, relying on the implied warranty of fitness and merchantability (Opp. at p. 14:18), its assertion is not supported by the FAC in which it explicitly references the “warranty of habitability” (FAC, ¶ 94). Moreover, Plaintiff’s argument lacks merit because while the warranty of fitness and merchantability inspired the California Supreme Court to recognize the implied warranty of habitability, the warranty of fitness and merchantability applies to contracts for the sale of goods, not lease agreements. (Green, supra, 10 Cal.3d at p. 626.) Ultimately, although Plaintiff does not articulate how it could state a viable claim, it does cite a case involving the distinct covenant of quiet enjoyment. (See Petroleum Collections, Inc. v. Swords (1975) 48 Cal.App.3d 841, 848.) And so, despite Plaintiff’s conflation of distinct legal concepts, the Court will allow it to amend the pleading. The demurrer to the tenth cause of action is, thus, SUSTAINED with 10 days’ leave to amend.