2013-00149673-CU-BC

Rubicelia Sanchez vs. Gloria Orozco

Nature of Proceeding:   Hearing on Demurrer

Filed By:  Orozco, Gloria

Defendant’s Demurrer to the Complaint is sustained with leave to amend for failure to
state facts sufficient to constitute a cause of action.

Plaintiffs allege that they refinanced their house so they could loan money to
defendant Orosco so that she and plaintiff Samuel Sanchez could open a restaurant.
Plaintiffs trusted defendant because she had helped them interpret court documents in
an earlier legal matter.  The parties entered a written agreement on November 11,
2007 in which defendant agreed to pay plaintiffs $158,516.64 at an interest rate of
3.63%.  The agreement states in part, “The loan is going to be open, so no set day to
paid (sic) full amount. I will give as much as I can at a time until total amount is paid
off.”  In addition to the written contract, the parties verbally agreed that plaintiff Samuel
Sanchez would run the restaurant with Gloria Orozco.

On August 31, 2007 the parties agreed to terminate their previously made partnership
due to Samuel Sanchez’ medical issues.  Although the lease was in plaintiffs’ names,
defendant promised to have the lease changed to her name only.  The Complaint
alleges that the written agreement is attached as an exhibit but it is not.  Plaintiffs
allege in their tort cause of action that defendant promised them that she would begin
making payments on the November 11, 2007 loan on the first day of business of the
restaurant.   However, plaintiffs’ alleged written agreement contains no payment dates,
just the date that interest begins to accrue.

Plaintiffs allege that defendant told them in June of 2012 that if they wanted the money
they should “sue her.”  Defendant contends that the causes of action accrued in
September of 2008 when defendant stated that she had no money to make interest
payments in response to plaintiffs’ request for interest payments, but then later said
she would start making payments “right away.”  Plaintiffs allegedly continued to              demand payments until 2012 when defendant told them to sue her. (Complaint
paragraph 10)

The Complaint was filed on August 12, 2013.

1st cause of action Breach of Written Contract:  Sustained with leave to amend for
failure to state facts sufficient to constitute a cause of action.  The statute of limitations
on a written contract is four years.  CCP 337.  Where the time for performance is
indefinite, the law implies a promise to perform within a reasonable time.  Civil Code
1657.  On the face of the complaint, plaintiffs were no notice of the breach in
September of 2008 when defendant promised to make payments “right away” but did
not.

2nd cause of action Fraud and 3rd cause of action Intentional Misrepresentation :
Sustained with leave to amend for failure to state facts sufficient to constitute a cause
of action.  The statute of limitations for fraud is three years.  On the face of the
complaint, plaintiffs were no notice of the breach in September of 2008 when
defendant promised to make payments “right away” but did not.

4th cause of action Unjust Enrichment: Sustained with leave to amend for failure to
state facts sufficient to constitute a cause of action.  This claim is based on either the
contract or fraud claim and is likewise barred by the statute of limitations.

5th cause of action Breach of Covenant of Good Faith and Fair Dealing:
Sustained with leave to amend for failure to state facts sufficient to constitute a cause
of action.  The statute of limitations on a written contract is four years.  CCP 337.
Where the time for performance is indefinite, the law implies a promise to perform
within a reasonable time.  Civil Code 1657.  On the face of the complaint, plaintiffs
were on notice of the breach in September of 2008 when defendant promised to make
payments “right away” but did not.

Plaintiffs are given leave to amend to alleged more facts to support delayed discovery.
A plaintiff whose complaint shows on its face that his claim would be barred without
the benefit of the discovery rule must specifically plead facts to show (1) the time and
manner of the discovery and (2) the inability to have made earlier discovery despite
reasonable diligence.  The burden is on the plaintiff to show diligence, conclusionary
allegations will not withstand demurrer.  E-Fab Inc. v Accountants, Inc. Svcs (2007)
th
153 Cal.App.4   1308, 1319.

Plaintiffs may file and serve an Amended Complaint, with the written contract attached,
on or before February 28, 2014.  Response to be filed and served within 15 days of
service of the amended complaint, 20 days if served by mail.

The minute order is effective immediately.  No formal order pursuant to CRC Rule
3.1312 or further notice is required.