2017-00223561-CU-BC

Williams Blanas vs. Howard Baldwin

Nature of Proceeding: Hearing on Demurrer

Filed By: Keaster, Robert W.

Defendant Baldwin Entertainment Group, Limited’s (“Defendant”) demurrer to Plaintiff’s First Amended Complaint is SUSTAINED with leave to amend.

Defendant’s Notice of Demurrer does not provide notice of the Court’s tentative ruling system, as required by Local Rule 1.06(D). Defendant’s counsel is directed to contact Plaintiff’s counsel forthwith and advise counsel of Local Rule 1.06 and the Court’s tentative ruling procedure. If Defendant’s counsel is unable to contact Plaintiff’s counsel prior to the hearing, Defendant’s counsel shall be available at the hearing, in person or by telephone, in the event Plaintiff’s counsel appears without following the procedures set forth in Local Rule 1.06(B).

Request for Judicial Notice

Plaintiff’s request for judicial notice is denied. The Complaint filed by a different plaintiff in a separate action, and the allegations contained therein, are irrelevant to the Court’s decision on Defendant’s demurrer in this action.

Discussion

Plaintiff alleges in the First Amended Complaint (“FAC”) a single cause of action for

damages pursuant to the California Uniform Commercial Code. (FAC, ROA # 8.) In

essence, Plaintiff alleges he loaned Defendant and Co-Defendant Howard Baldwin

$125,000 on March 1, 2011, pursuant to an amended non-negotiable promissory note;

Plaintiff demanded payment on the outstanding indebtedness on June 22, 2017; and

Defendants have failed to perform in accordance with the demand, forcing Plaintiff to

file this action. (Id.)

Defendant demurs to the FAC on the ground that it fails to state a cause of action because the sole cause of action “is barred by the four (4) year statute of limitations set forth in California Code of Civil Procedure Section 337, which began to run upon execution of the note (March 2011).” (Not. of Demurrer 2:4-9.)

Plaintiff “is in agreement that the current cause of action . . . is barred by the statute of limitations; however, Plaintiff . . . requests leave to amend the FAC . . . to assert a cause of action for fraud, which will . . . cure the statute of limitations defect.” (Pl.’s Opp’n 1:25-2:2.) Plaintiff states: “The proposed fraud cause of action is related to the same general set of facts as detailed in the FAC, and is to include additional allegations of intentional misrepresentation, concealment, and/or false promises made by Defendants.” (Id. at 2:25-27.) Plaintiff continues, a three-year statute of limitations applies to a fraud claim, but it does not accrue until the discovery by the aggrieved party of the facts constituting the fraud or mistake. (Id. at 5:14-17.) Plaintiff asserts he “will allege that the Fraud cause of action did not begin to accrue until at least Plaintiff learned that Defendant . . . had no intention of repaying the loan, after Plaintiff’s June 22, 2017, demand went unanswered.” (Id. at 5:23-25.)

Defendant replies that leave to amend should not be granted because Plaintiff’s purported allegations of fraud “are patently false” and would be contrary to the Exhibits attached to the FAC. (Reply 1:11-2:8.) Defendant further argues Plaintiff’s “vague and conclusory allegations . . . fail to meet the high pleading standard required for a fraud claim.” (Id. at 3:4-12.)

Since it is undisputed the FAC’s single cause of action for damages under the California Uniform Commercial Code is barred by the applicable statute of limitations, the Court SUSTAINS Defendant’s demurrer. However, Plaintiff is granted leave to amend, as this is the first challenge to the pleadings. (See City of Stockton v. Super. Ct. (2007) 42 Cal.4th 730, 747 [“If the plaintiff has not had an opportunity to amend the complaint in response to [a] demurrer, leave to amend is liberally allowed as a matter of fairness, unless the complaint shows on its face that it is incapable of amendment.”];

Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 [“Generally it is an abuse of discretion to sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment.”].) The Court declines to prejudge Plaintiff’s ability to allege a cause of action for fraud, as requested by Defendant’s reply.

Plaintiff may file and serve a Second Amended Complaint no later than 1/14/2019.

Although not required by court rule or statute, Plaintiff is directed to present a copy of this order when the amended complaint is presented for filing.

The responsive pleading is due to be filed and served within 30 days if the amended complaint is personally served, 35 days if served by mail.

This minute order is effective immediately. No formal order or other notice is required. (Code Civ. Proc., §1019.5; Cal. Rules of Court, rule 3.1312.)