Case Number: BC705529 Hearing Date: January 10, 2019 Dept: 26
Superior Court of California
County of Los Angeles
Department 26
CPES MEDIA INC et al.;
Plaintiffs,
vs.
DENISE GERSHON et al.;
Defendants.
Case No.: BC705529
Hearing Date: January 10, 2019
[TENTATIVE] order RE:
PLAINTIFFS’/CROSS defendanTS’ Demurrer to THE CROSS complaint
MOVING PARTIES: Plaintiffs/Cross Defendants CPES Media Inc (“CPES”) and Samson Okhade (“Okhade”) (jointly “Moving Parties”).
RESPONDING PARTY: Defendants/Cross Complainants Denise Gershon; H & R Gordon; Lesley S. Gordon as Trustee of the Renee W. Gordon Trust; Lesley S. Gordon individually; Brian Gordon; Lynn R. Goodman, Amy Goodman DOV and Stacey Goodman Eaton as Trustees of the Harry A. Goodman M.D. Living Trust; and Hannah Gordon as the Trustee of the Hannah Gordon Living Trust, (collectively “Cross Complainants”).
The Court has considered the moving, opposing and reply papers[1].
Background
On May 8, 2018, plaintiffs/cross defendants (hereinafter “Cross Defendants”) filed a complaint against defendants/cross complainants (hereinafter “Cross Complainants”) alleging causes of action for: (1) wrongful eviction, (2) conversion, (3) negligence, (4) slander and (5) violation of Civil Code sections 51 and 52.[2]
On July 27, 2018, Cross Complainants filed a cross complaint against CPES, Okhade, Sale Mercado Agency (“Agency”) and Sal Mercado (“Mercado”) alleging causes of action for: (1) indemnity, (2) partial indemnity, (3) declaratory relief, (4) express contractual indemnity, (5) breach of contract, (6) negligence, (7) unfair business practices, (8) nuisance, (9) fraud, (10) defamation, (11) malicious prosecution, (12) intentional interference with contract, (13) intentional infliction of emotional distress (“IIED”) and (14) trespass.
The cross complaint alleges the following: (1) Cross Complainants leased an office at 1424 4th St. Santa Monica CA 90401 (“Subject Property”) to Mercado. (Cross Complaint at 2:17-18.) (2) Even though the lease prohibited sub-letting, Mercado subleased the Subject Property to the Agency, and the Agency then entered into a lease with CPES. (Id. at 2:18-20.) (3) CPES performed unsanctioned and unpermitted work on the Subject Property that damaged the unit and endangered the other tenants on the property, and as a result, Cross Complainants were forced to repair the damage done to the Subject Property on behalf of CPES. (Id. 2:21-25.) (4) Okhade with the consent of CPES made a false report to the police in which Okhade told the police and other third parties that Cross Complainants stole CPES’s property and that Cross Complainants were racially insensitive. (Id. at 2:27-3:2-3.) (5) The police initiated a criminal investigation that terminated in Cross Complainants’ favor. (Id.)
On September 6, 2018, Moving Parties filed a demurrer to the cross complaint. Specifically, Moving Parties demurred to the sixth through fourteenth causes of action. On December 21, 2018, Cross Complainants filed an opposition. On January 3, 2019, Moving Parties filed a reply.
LEGAL STANDARD
Meet and Confer Requirement
CCP Section 430.41(a) requires that “[b]efore filing a demurrer pursuant to this chapter, the demurring party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.” (Emphasis added.) The parties are to meet and confer at least five days before the date the responsive pleading is due. (C.C.P. § 430.41, subd. (a)(2).) The demurring party must also file and serve a declaration detailing the meet and confer efforts. (Id. at subd. (a)(3).) If an amended pleading is filed, the parties must meet and confer again before a demurrer may be filed to the amended pleading. (Id. at subd. (a).) A similar meet and confer process and declaration is required for motions to strike. (See CCP § 435.5.)
Demurrer Standard
A demurrer can be used only to challenge defects that appear on the face of the pleading under attack; or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal 3d 311, 318.) No other extrinsic evidence can be considered (i.e., no “speaking demurrers”).
A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal. App. 4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dep’t of Water & Power (2006) 144 Cal. App. 4th 1216, 1228.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal. App. 4th 968, 994.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.” (SKF Farms v. Superior Ct. (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.” (Hahn, 147 Cal.App.4th at 747.)
A special demurrer for uncertainty, Code of Civil Procedure §430.10(f), is disfavored and will only be sustained where the pleading is so bad that defendant cannot reasonably respond—i.e., cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him/her. (Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.) Moreover, even if the pleading is somewhat vague, “ambiguities can be clarified under modern discovery procedures.” (Ibid.)
DISCUSSION
Meet and Confer Requirement
Per CCP section 430.41(a), “[b]efore filing a demurrer pursuant to this chapter, the demurring party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer…” (CCP § 430.41(a) [emphasis added].)
Here, counsel’s declaration regarding a letter sent via mail and email correspondence with opposing counsel does not satisfy CCP § 430.41(a)’s requirement that the parties meet and confer in person or by telephone. (Salomons Decl. ¶¶ 2-3.) Furthermore, as noted by Cross Complainants, the correspondence between Moving Parties’ counsel and Cross Complainants’ counsel only concerned four of the causes of action that are subject to demurrer. (Moving Papers, Exs. A and B.) CCP section 430.41(a)(1) provides that the “demurring party shall identify all of the specific causes of action that it believes are subject to demurrer and identify with legal support the basis of the deficiencies.” Thus, Moving Parties’ meet and confer declaration is insufficient for this reason as well.
However, CCP § 430.41(a)(4) provides that any determination by the Court that the meet and confer process was insufficient shall not be grounds to overrule or sustain a demurrer. On this occasion, the Court will proceed to address the merits of the demurrer despite the insufficiency of the meet and confer. However, for any future demurrers or other motions that may require a meet and confer effort, the Court cautions that an insufficient meet and confer will result in the motion being placed off calendar.
Subject Pleadings
Initially, the Court notes that Moving Parties’ demurrer includes a variety of facts outside the pleading that is subject to the demurrer, namely the Cross Complaint. (See e.g. Moving Papers at 6:6-25.) At the pleadings stage, the Court may not consider those facts. (Blank v. Kirwan (1985) 39 Cal 3d 311, 318.) Thus, the improperly inserted facts will not factor into the Court’s analysis for the demurrer.
Sixth Cause of Action: Negligence
Moving Parties contend that the cross complaint fails to sufficiently allege the existence of a duty and/or a breach of that duty. Furthermore, Moving Parties contend that the pleadings are uncertain in that it is unclear what duty is allegedly owed by a sub-tenant to a landlord and how that duty was breached.
In opposition, Cross Complainants contend that the cross complaint sufficiently alleges the elements of negligence. In particular, Cross Complainants contend that the cross complaint sufficiently alleges that breach of duty was comprised of Cross Defendants’ failure to prevent damage to the property as exemplified by the allegation that CPES performed unsanctioned and unpermitted work on the Subject Property that damaged the property thereby forcing Cross Complainants to repair the damage on CPES’S behalf. (Cross Complaint at 2:21-26.)
In reply, Moving Parties assert that the opposition fails to identify what allegations in the cross-complaint constitute duty and breach.
The elements of a negligence cause of action are the existence of a legal duty of care, breach of that duty, and proximate cause resulting in injury. (Ladd v. County of San Mateo (1996) 12 Cal.4th 913, 917–918.) As a general rule, each person has a duty to use ordinary care and is liable for injuries caused by his failure to exercise reasonable care in the circumstances. (Romero v. Superior Court (2001) 89 Cal. App. 4th 1068, 1080.)
Here, the cross complaint in relevant part alleges that Cross Complainants leased the Subject Property to Mercado, and Mercado then subleased the Subject Property to the Agency. (Cross Complaint at 2:17-18.) The cross complaint further alleges that the Agency then entered into a lease with CPES, and under this new lease, CPES performed unsanctioned and unpermitted work on the Subject Property that damaged the unit. (Id. at 2:18-20 and 2:21-25.) The cross complaint essentially alleges that that CPES and Okhade owed Cross Complainants a duty to not damage the Subject Property when they were in possession of it. The Court acknowledges that as it relates to contractual matters, such as breaches of covenants and breaches of leases, a “sublessee is liable only to his own lessor, that is, the sublessor, since he does not acquire the whole estate, but only a portion of the unexpired term.” (Hartman Ranch Co. v. Associated Oil Co. (1937) 10 Cal.2d 232, 242.) However, Moving Parties fail to cite authority which provides that sublessees, such as CPES and Okhade, do not owe a master landlord a duty to not damage the subject premises when a sublessee is in possession of the premises. Furthermore, the basis of the cross complaint is that the sublease was improper and that the construction performed by CPES and Okhade was unsanctioned. Notably, the sole authority cited by Moving Parties is to show the general elements of negligence. No authority or analysis is provided in the moving or reply papers to establish that the cross complaint fails to state a claim for negligence.
As such, the demurrer to the sixth cause of action is overruled.
Seventh Cause of Action: Unfair Business Practices
Moving Parties demur to the seventh cause of action on the ground that the cross complaint fails to sufficiently allege all of the necessary elements of an unfair business practices claim. In particular, Moving Parties appear to contend that the cross complaint fails to sufficiently allege that Moving Parties’ actions were unlawful. In addition, Moving Parties appear to contend that the seventh cause of action asserts a claim for “all statutory remedies,” but a claim for unfair business practices solely allows a plaintiff to recover in restitution and injunctive relief.
The opposition contends that the cross complaint sufficiently alleges that Moving Parties engaged in unlawful and deceptive acts by participating in unpermitted construction on the Subject Premises as well as by entering into a sub-lease that is prohibited by a lease agreement. Cross Complainants further contend that they are seeking restitution in the form of (1) the difference between the market rate rent and the below market rate rent paid and (2) the money Cross Complainants were forced to pay to repair the property that was damaged by Moving Parties.
The reply reasserts the arguments made in the moving papers.
California’s Unfair Competition Law (“UCL”) prohibits unlawful, unfair or fraudulent business acts or practices. (Bus. & Prof. Code, § 17200.) Section 17200’s “unlawful” prong “borrows violations of other laws … and makes those unlawful practices actionable under the UCL.” (Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1383.) “[V]irtually any law or regulation—federal or state, statutory or common law—can serve as [a] predicate for a … [section] 17200 ‘unlawful’ violation.’” (Id.) “A business practice is “fraudulent” within the meaning of section 17200 if it is “likely to deceive the public.” (Id. at 1380.) “Unfair” business practices are those which offend an “established public policy” that is tethered to “specific constitutional, statutory, or regulatory provisions.” (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1365.)
The UCL does not proscribe specific acts, but broadly prohibits “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising….” (Bus. & Prof.Code, § 17200.) “The scope of the UCL is quite broad. [Citations.] Because the statute is framed in the disjunctive, a business practice need only meet one of the three criteria to be considered unfair competition.” (Citation.)
(Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1359.)
In order to plead a claim under Business and Professions Code section 17200, there must be allegations showing an unlawful, unfair, or fraudulent business act or practice. (Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal. App. 4th 659, 676-677.) To plead this statutory claim, the pleadings must state with reasonable particularity the facts supporting the statutory elements of the violation. (Khoury v. Maly’s of California, Inc. (1993) 14 Cal. App. 4th 612, 619.)
Here, Cross Complainants allege that Cross Defendants’ conduct of performing unpermitted construction on the Subject Premises was an unlawful business practice. (Opposition at 4:3-5.) Cross Complainants further contend that entering into a sub-lease that was prohibited by a lease agreement was deceptive and unfair. (Id.)
Neither the cross complaint nor the opposition papers identify a statute which would support the notion that the alleged unpermitted construction on the Subject Property was “unlawful.” (See Sandoz Inc. v. Amgen Inc. (2017) 137 S.Ct. 1664, 1673 [“A business act or practice” is “unlawful” under the unfair competition law if it violates a rule contained in some other state or federal statute.].) Thus, the cross complaint fails to allege sufficient facts to state a claim under the unlawful prong.
The cross complaint also fails to allege a claim under the fraudulent prong. Notably, the cross complaint alleges that Mercado leased the Subject Property from Cross Complainants and that the lease between these parties included several restrictions, including a prohibition against sub-letting. (Cross Complaint at 2:17-20.) However, this demurrer is brought by CPES and Okhade. There are no allegations that CPES or Okhade were parties to the lease that prohibited a sublease. Further, while it could potentially be inferred that Mercado misrepresented to Cross Complainants that he would not sublease the Subject Property, there is no allegation that CPES or Okhade made such misrepresentations to Cross Complainants. The Cross Complaint does not include any other allegation to suggest that CPES and Okhade deceived Cross Complainants.
However, the Court finds that the allegations that CPES and its alter ego Okhade damaged the Subject Property by performing unsanctioned and unpermitted work are sufficient to state a claim for a UCL violation based on such an act being unfair. Notably, whether a business practice is unfair is generally a question of fact which requires consideration and weighing of evidence from both sides and which usually cannot be made on demurrer. (Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1376, 1380-1381.) Moving Parties fail to provide authority pursuant to which the Court could rule as a matter of law that contrary to the allegations in the cross complaint, Moving Parties’ actions were not unfair.
Moving Parties also take issue with the prayer for “all statutory damages” in the cross complaint. Essentially, it appears that Moving Parties are challenging Cross Complainants’ standing to bring a UCL claim. In opposition, Cross Complainants seem to contend that because Moving Parties damaged Cross Complainants’ property, Cross Complainants were deprived of the proper market value of the Subject Property as well as the cost to repair the Subject Property.
An individual can only bring a Section 17200 claim if she has “suffered injury in fact” and have “lost money or property as a result of the unfair competition.” (Bus. & Prof. Code § 17204.) To establish standing, a private plaintiff needs to establish a loss or deprivation of money or property sufficient to qualify as an injury in fact, i.e., economic injury. (Law Offices of Mathew Higbee v. Expungement Assistance Services (2013) 214 Cal.App.4th 544, 555–556.) There are innumerable ways in which economic injury from unfair competition may be shown. (Id. at 561.) A plaintiff may (1) surrender in a transaction more, or acquire in a transaction less, than he or she otherwise would have; (2) have a present or future property interest diminished; (3) be deprived of money or property to which he or she has a cognizable claim; or (4) be required to enter into a transaction, costing money or property, that would otherwise have been unnecessary. (Id.) The foregoing list is not exhaustive and the notion of “lost money” under the UCL is not limited. (Ibid.)
Here, the cross complaint in relevant part alleges that Cross Complainants were forced to repair the damages that Moving Parties caused to the Subject Property. (Cross-Complaint at 2:21-25.) Such allegations are sufficient to allege standing especially when the “object of restitution is to restore the status quo by returning to the plaintiff funds in which he or she has an ownership interest.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1149.)
Accordingly, the Court overrules the demurrer to the seventh cause of action.
Eighth Cause of Action: Nuisance
Moving Parties contend that the cross complaint lacks allegations of (i) an interference with the use and enjoyment of the Subject Property, (ii) substantial invasion of one’s enjoyment of property and (iii) an unreasonable interference with a protected interest. In opposition, Cross Complainants contends that the cross complaint sufficiently alleges all elements of a private nuance claim. The reply reasserts the arguments made in the moving papers.
In order to bring a private nuisance claim:
First, the plaintiff must prove an interference with his use and enjoyment of his property. Second, “the invasion of the plaintiff’s interest in the use and enjoyment of the land [must be] substantial, i.e., that it cause[s] the plaintiff to suffer ‘substantial actual damage.’ ” Third, “ ‘[t]he interference with the protected interest must not only be substantial, but it must also be unreasonable’ [citation], i.e., it must be ‘of such a nature, duration or amount as to constitute unreasonable interference with the use and enjoyment of the land. (Mendez v. Rancho Valencia Resort Partners, LLC (2016) 3 Cal.App.5th 248, 262–263 citing San Diego Gas & Electric Co. v. Superior Court (1996) 13 Cal. 4th 893, 938.)
Whether interference was substantial and unreasonable are questions of fact that turns on the circumstances of each case. (San Diego Gas & Electric Co. v. Superior Court (1996) 13 Cal. 4th 893, 938.)
Here, the very basis of Cross Complainants nuisance claim is that Moving Parties performed unsanctioned and unpermitted work on the Subject Property without Cross Complainants’ consent. (Cross Complaint at 2:21-22, 7:14-15.) As such, Cross Complainants are in essence alleging that Moving Parties trespassed on the Subject Property. However, private nuisance is “a nontrespassory interference with the private use and enjoyment of land.” (San Diego Gas & Electric Co. v. Superior Court (1996) 13 Cal.4th 893, 937 citing Civ.Code, §§ 3479–3481 [emphasis added.].) Therefore, the cross complaint fails to state a claim for private nuisance. Further, the Court finds that the cross-complaint fails to sufficiently allege facts to support the contention that Moving Parties created a private nuisance. It is entirely unclear what the alleged nuisance was or how, for example, it created a fire hazard. A review of the cross complaint shows that Cross Complainants have merely parroted the CACI instructions for private nuisance without alleging actual facts to support such allegations.
Therefore, the demurrer to the eighth cause of action for nuisance is sustained. Because nuisance is a nontrespassory claim, and because the basis of Cross Complainants’ nuisance claim is that Cross Defendants trespassed onto the Subject Property and performed unsanctioned construction, this cause of action cannot be reasonably amended. Thus, no leave to amend is granted as to this cause of action.
Ninth Cause of Action: Fraud
Moving Parties assert that the cross complaint fails to allege specific facts to support the fraud claim. In particular, as it relates to CPES, Moving Parties assert that the cross complaint fails to allege how, when, where to whom and by what means the alleged false representations were made. Though brief in analysis, the opposition seems to argue that the cross complaint sufficiently alleges a claim for fraud based on the allegations that even though the lease agreement prohibited subleases, Moving Parties entered into a sublease. The reply reasserts the arguments made in the moving papers.
The well-known elements of a cause of action for fraud are (1) a misrepresentation, which includes a concealment or nondisclosure; (2) knowledge of the falsity of the misrepresentation, i.e., scienter; (3) intent to induce reliance on the misrepresentation; (4) justifiable reliance; and (5) resulting damages. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 173.)
Fraud must be pleaded with specificity rather than with “general and conclusory allegations.” (Id. at 184.) The specificity requirement means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made, and, in the case of a corporate defendant, the plaintiff must allege the names of the persons who made the representations, their authority to speak on behalf of the corporation, to whom they spoke, what they said or wrote, and when the representation was made. (West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 793.)
Here, the Court finds that the cross complaint fails to allege sufficient facts to state a claim for fraud. Apart from conclusory allegations, the cross complaint fails to allege in relevant part what representations were made either by Okhade or a representative of CPES, when such representations were made, and to whom such representations were made. Notably, the preamble in the cross complaint to which Cross Complainants refer in the opposition states that Mercado leased the Subject Property from Cross Complainants and that the lease between these parties included several restrictions including on prohibiting sub-letting. (Cross Complaint at 2:17-20.) However, this demurrer is brought by CPES and Okhade. There is no allegation that CPES or Okhade were parties to the lease that prohibited a sublease. Moreover, while it could potentially be inferred that Mercado misrepresented to Cross Complainants that he would not sublease the Subject Property, there is no allegation that CPES or Okhade made such misrepresentations to Cross Complainants. Rather, as it relates to CPES and Okhade, apart from conclusory allegations, the cross complaint fails to allege sufficient facts to state a claim for fraud.
Thus, the demurrer to the ninth cause of action for fraud is sustained.
Tenth Cause of Action: Defamation
Moving Parties contend that the cross complaint fails to sufficiently identify whether the defamatory statement was made orally or in writing. Furthermore, Moving Parties contend that the cross complaint fails to allege that the defamatory statement was made about each of the Cross Complainants. Finally, Moving Parties assert that the cross complaint fails to allege facts establishing that the defamatory statements are not barred by the litigation privilege set forth in Civil Code section 47(b). The opposition appears to assert that the cross complaint sufficiently alleges a claim for defamation based on the allegations that CPES through Okhade falsely reported to the police and other third parties that CPES’S property was stolen by Cross Complainants. The reply reasserts the arguments made in the moving papers.
The elements of a defamation claim are (1) a publication that is (2) false, (3) defamatory, (4) unprivileged, and (5) has a natural tendency to injure or causes special damage. (Wong v. Jing (2010) 189 Cal.App.4th 1354, 1369.) Civil Code section 45 provides, “Libel is a false and unprivileged publication by writing, printing, picture, effigy, or other fixed representation to the eye, which exposes any person to hatred, contempt, ridicule, or obloquy, or which causes him to be shunned or avoided, or which has a tendency to injure him in his occupation.”
Here, the cross complaint in relevant part alleges that Okhade, with the consent of CPES, falsely reported to police that CPES’S property was stolen and told the police and other third parties that Cross Complainants stole the property. (Cross Complaint at 2:27-3:3.) Additionally, Okhade allegedly reported to third parties that Cross Complainants were racially insensitive. (Id.)
First, the Court notes that Moving Parties fail to offer authority which requires that a party must specifically allege that the defamatory statement was made either orally or in writing. As such, Moving Parties’ first argument is unpersuasive. Second, the cross complaint generally alleges that the defamatory statements were made regarding all of the members of the opposing party. (See Cross Complaint at 2:27-3:3.) As such, the Court is unconvinced by Moving Parties’ contention that the cross complaint fails to allege that the defamatory statement was made about all of the members of the Cross Complainants.
Third, Moving Parties contend that the cross complaint fails to allege facts which establish that the litigation privilege pursuant to Civil Code section 47(b) does not bar the defamation claim. Under subdivision (b) of Civil Code section 47 (section 47), the litigation privilege protects any “publication or broadcast … made … [i]n any … judicial proceeding.” The privilege is absolute and precludes a claimant from establishing a probability of prevailing on the merits of his claim. (Argentieri v. Zuckerberg (2017) 8 Cal.App.5th 768, 780.)
The litigation privilege generally applies to “any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action.” (Silberg v. Anderson (1990) 50 Cal.3d 205, 212, 266 (Silberg).) The privilege pertains not only to statements made during a trial, but also to steps taken before trial and statements made “to achieve the objects of the litigation, even though the [statement] is made outside of the courtroom and no function of the court or its officers is invoked.” (Albertson v. Raboff (1956) 46 Cal.2d 375, 381, 295 P.2d 405.) The privilege is intended to “afford litigants and witnesses … the utmost freedom of access to the courts without fear of being harassed subsequently…. [¶] [with] protracted and costly lawsuits.”
(Argentieri v. Zuckerberg (2017) 8 Cal.App.5th 768, 780–781.)
The Court notes that in reviewing the allegations in the cross complaint, the Court finds that the cross complaint sufficiently alleges a cause of action for defamation. In particular, the cross complaint alleges that Okhade, with CPES’s consent,[3] made (1) a false report to the police alleging that Cross Complainants stole CPES’s property, and (2) falsely told other third parties that members of the Cross Complainants stole CPES’s property and that these members were racially insensitive. (Cross Complaint at 2:27-3:3.) Such allegations are sufficient to state a claim for defamation as there is no indication that such statements to third parties were privileged.[4] To the extent that Moving Parties contend that such statements were made prior to litigation in order achieve the objects of the litigation, no facts are before the Court to determine that the litigation privilege applies.
Therefore, the demurrer to the tenth cause of action for defamation is overruled.
Eleventh Cause of Action: Malicious Prosecution
Moving Parties contend that the cross complaint fails to sufficiently allege all of the elements of a malicious prosecution claim, and in particular, the element that Cross Complainants obtained termination of a prior litigation in their favor. The opposition contends that the cross complaint sufficiently alleges a claim for malicious prosecution per CACI 1500. The reply reasserts the arguments made in the moving papers.
Generally, to establish a cause of action for the malicious prosecution of a civil proceeding, a plaintiff must plead and prove that the prior action (1) was commenced by or at the direction of the defendant and was pursued to a legal termination in his, plaintiff’s, favor [citations]; (2) was brought without probable cause [citations]; and (3) was initiated with malice [citations]. (Lanz v. Goldstone (2015) 243 Cal.App.4th 441, 458 quoting Bertero v. National General Corp. (1974) 13 Cal.3d 43, 50.)
As it relates to the instant matter, malicious prosecution consists of initiating or procuring the arrest and prosecution of another under lawful process, but from malicious motives and without probable cause. (Cedars-Sinai Medical Center v. Superior Court (1988) 206 Cal.App.3d 414, 417.) The test is whether the defendant was actively instrumental in causing the prosecution. (Id.) Cases dealing with actions for malicious prosecution against private persons require that the defendant has at least sought out the police or prosecutorial authorities and falsely reported facts to them indicating that plaintiff has committed a crime. (Cedars-Sinai Medical Center v. Superior Court (1988) 206 Cal.App.3d 414, 417.)
Here, the Court finds that these allegations are sufficient to state a claim for malicious prosecution. The cross complaint in relevant part alleges that pursuant to the false police report made by Okhade and CPES, the police initiated criminal investigation that terminated in Opposing Party’s favor. (Cross Complaint at 3:1-3.) The cross complaint also alleges that the criminal action was (i) commenced by or at the direction of the cross defendants, (ii) pursued to a legal termination in Cross Complainants’ favor and (iii) brought without probable cause and initiated with malice. (Id. at 8:12-18.) Such allegations are sufficient for demurrer purposes. Notably, while malice and probable cause are alleged generally, whether Moving Parties acted without probable cause and with malice are factual questions not suited to be determined by demurrer. (See e.g. Greene v. Bank of America (2013) 216 Cal.App.4th 454, 465.)
Accordingly, the demurrer to the eleventh cause of action for malicious prosecution is overruled.
Twelfth Cause of Action: Intentional Interference with Contract
Moving Parties generally contend that the Cross Complaint fails to set forth the necessary allegations to state a claim of intentional interference with contract. Cross Complainants in opposition generally argue that the cross complaint sufficiently alleges the elements for a claim for intentional interference with contract. The reply reasserts the arguments made in the moving papers.
The elements of a cause of action for intentional interference with contractual relations are the following: 1) the existence of a valid contract between the plaintiff and a third party; 2) the defendant’s knowledge of that contract; 3) the defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; 4) actual breach or disruption of the contractual relationship; and 5) resulting damage. (Redfearn v. Trader Joe’s Co. (2018) 20 Cal.App.5th 989, 997.)
Here, the Court finds that the cross complaint fails to allege sufficient facts to state claim for intentional inference with a contract. First, the cross complaint fails to allege that Moving Parties, namely CPES and Okhade, knew about the lease between Mercado and Cross Complainants. As analyzed previously in the fraud section, the cross complaint alleges that Mercado and Cross Complainants entered into a lease. However, there are no facts which establish that CPES and Okhade knew about the lease. Next, except for conclusory allegations in paragraph 32, the cross complaint fails to allege facts which establish that CPES and Okhade intended to induce a breach or disruption of the contractual relationship.
Therefore, the demurrer to the twelfth cause of action for intentional interference with contract is sustained.
Thirteenth Cause of Action: IIED
Moving Parties assert that the cross complaint fails to allege sufficient facts to establish that the alleged wrongful conduct was extreme and outrageous. Moving Parties also argue that the cross complaint fails to allege that each of the Cross Complainants suffered severe emotional distress or that each of the Cross Complainants was damaged by the alleged wrongful conduct.
The opposition contends that the cross complaint sufficiently alleges the elements of IIED based on the allegations of the false police report and defamatory statements made to third parties. The reply reasserts the arguments made in the moving papers.
A cause of action for IIED exists when there is “(1) extreme and outrageous conduct by the defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress; (2) the plaintiff’s suffering severe or extreme emotional distress; and (3) actual and proximate causation of the emotional distress by the defendant’s outrageous conduct.” (Hughes v. Pair (2009) 46 Cal.4th 1035, 1050-51.) A defendant’s conduct is “outrageous” when it is so extreme as to exceed all bounds of that usually tolerated in a civilized community. (Id.) With regard to the first element, IIED calls for intentional, or at least reckless conduct—conduct intended to inflict injury or engaged in with the realization that injury will result. (Davidson v. City of Westminster (1982) 32 Cal.3d 197, 210.)
Here, the basis of Cross Complainants’ IIED claim is that Okhade and CPES made a false police report stating that Cross Complainants stole CPES’S property. (Cross Complaint at 2:27-3:2.) The cross complaint also alleges that the cross-defendants, including Moving Parties, intended to cause Denise Gershon and other cross-complainants emotional distress. (Id. at 9:7-13.)
The Court finds that whether the act of intentionally making a false police report despite having knowledge of its falsity constitutes extreme or outrageous conduct can be reasonably debated. Thus, it is for the jury to determine whether such conduct has been sufficiently extreme and outrageous to result in liability. (Alcorn v. Anbro Engineering, Inc. (1970) 2 Cal.3d 493, 499.) Further, the Court finds that the cross complaint sufficiently alleges that Cross Complainants, including Denise Gershon, were injured by Cross Defendants’ wrongful conduct. For demurrer purposes, the Court assumes as true all of the allegations in the cross-complaint. (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604.)
Therefore, the demurrer to the thirteenth cause of action for IIED is overruled.
Fourteenth Cause of Action: Trespass
Moving Parties contend that the cross complaint fails to allege that Cross Defendants entered onto the Subject Property without authorization. Rather, Moving Parties argue that cross defendants took possession of the Subject Property and timely paid rent from August 2017 through April 2018. As such, Moving Parties contend that cross defendants had authrotiy to be on the Subject Property.
The opposition contends that the cross complaint sufficiently alleges a claim for trespass satisfying CACI 2201 based on the allegations that cross defendants entered the subject premises and performed improper construction to the property and that such use and construction exceeded any permission granted by Opposing Party. The reply reasserts the arguments made in the moving papers.
The elements of a trespass claim are (1) the plaintiff’s ownership or control of the property; (2) the defendant’s intentional, reckless or negligent entry on the property; (3) lack of permission to enter the property, or acts in excess of the permission; (4) actual harm; and (5) the defendant’s conduct as a substantial factor in causing the harm. (Ralphs Grocery Co. v. United Food & Commercial Workers Union Local 8 (2010) 186 Cal.App.4th 1078, 1085.)
The Court notes that Moving Parties’ argument is based on extrinsic evidence not alleged in the cross-complaint. Notably, there is no allegation in the cross complaint that Cross Defendants, in particular CPES and Okhade, paid rent in taking possession of the Subject Property. The Court finds that the Cross Complaint sufficiently alleges that (1) Cross Complainants owned the Subject Property; (2) CPES and its alter ego Okhade entered the Subject Property; (3) CPES and Okhade performed construction even though cross complainants did not give permission for the entry or the construction and (4) CPES and Okhade caused cross complainants harm as a result. (Cross Complaint at 2:21-26, 9:17-23.)
As such, the demurrer to the fourteenth cause of action for trespass is overruled.
Uncertainty
Moving Parties also contend that the causes of action subject to demurrer are uncertain. With regard to the causes of action to which the Court sustained the demurrer for failure to state sufficient facts, a demurrer for uncertainty is moot. As to the remaining causes of action, the Court OVERRULES the demurrer for uncertainty on the grounds that (a) demurrers for uncertainty are disfavored and should only be sustained where the complaint is so uncertain that the demurring defendant cannot reasonably respond thereto (see, e.g., Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616); and (b) here, except for the claims to which the Court sustained the demurrer, as analyzed above, the causes of action in the cross complaint are not so uncertain that Moving Parties cannot reasonably respond.
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Conclusion and ORDER
Moving Parties’ demurrer is overruled as to the sixth (negligence), seventh (unfair business practices), tenth (defamation), eleventh (malicious prosecution), thirteenth (IIED) and fourteenth (trespass) causes of action. The demurrer is sustained as to the eighth (nuisance) cause of action without leave to amend. The demurrer is sustained as to the ninth (fraud) and twelfth (intentional interference with contract) causes of action with fifteen days’ leave to amend. Cross-Complainants are to file an amended Cross-Complaint within 15 days.
Moving Parties to give notice and file proof of service of such.
DATED: January 10, 2019 ___________________________
Elaine Lu
Judge of the Superior Court
[1] The Court notes that the proof of service attached to the reply papers is not signed.
[2] On December 7, 2018, the Court granted Plaintiffs’/Cross Defendants’ motion for leave to file a second amended complaint.
[3] Okhade and CPES are alleged to be alter egos of each other. (Cross Complaint at 3:4-11.)
[4] The Court acknowledges that calling the police is a protected activity. (Hagberg v. California Federal Bank FSB (2004) 32 Cal.4th 350, 364 [stating that the overwhelming majority of cases conclude that when a citizen contacts law enforcement personnel to report suspected criminal activity and to instigate law enforcement personnel to respond, the communication enjoys an unqualified privilege under Civil Code section 47(b).].) However, the cross complaint alleges (1) that Okhade and CPES falsely and with malicious intent made the report to the police and more importantly (2) Okhade and CPES made statements to other third parties as well. (Cross Complaint at 2:27-3:3.)