Winster Investment, Inc. vs. Pureco USA LLC

8. Winster Investment, 1. Demurrer to Cross-Complaint Inc. vs. Pureco USA 2. Motion to Strike Portions of Cross-Complaint LLC 3. Case Management Conference

25-01520180 Plaintiff/Cross-Defendant Winster Investment, Inc.’s demurrer to Defendant/Cross-Complainants Pureco USA, LLC and Eric Kondarovskis is SUSTAINED as to the Fifth, Sixth and Seventh Causes of Action and otherwise OVERRULED. (Code Civ. Proc. §430.10, subd. (e).)

First, Second, Third, and Fourth Causes of Action

Cross-Defendants argue that each of the first through fourth causes of action fail to state facts sufficient to constitute a cause of action because the terms of the lease that Cross-Complainant seeks to enforce in the First through Fourth causes of action clearly provides that the duty to repair the damage that led to the loss of electrical power to the premises was Cross-Complainant’s. The Court has assessed the various provisions of the subject lease agreement and finds that the provisions are capable of several reasonable interpretations, including the interpretation Cross-Complainant has set forth in the Cross-Complaint.

In assessing a pleading against a demurrer, the court must construe an exhibit capable of various interpretations in the manner suggested in the challenged pleading. (See SC Manufactured Homes, Inc. v. Liebert (2008) 162 Cal.App.4th 68, 83.) Accordingly, the Court finds that it would be inappropriate to accept Cross-Defendant’s preferred reading of the lease for purposes of an attack on the pleadings.

Fifth Cause of Action – Negligence

The economic loss doctrine bars tort claims that arise from a breach of contract unless the plaintiff shows that the claim is independent of the contractual duty. (See Robinson Helicopter Co., Inc. v. Dana Copr. (2004) 34 Cal.4th 979, 989-990. [Tort damages are only permitted in contract cases where duty is completely independent of contract or claims are based upon intentional tortious conduct.])

Here, the Cross-Complaint fails to allege a breach of duty that is independent of Cross-Defendant’s contractual duties. Rather, this cause of action is premised upon allegations that Cross-Defendant failed to perform its contractual duties to repair, or pay for repair, following an event of “Premises Partial Damage” in violation of ¶9.2 of the subject lease agreement. (See, e.g. Cross Complaint at ¶¶ 24-26; 33; and 36.) Cross-Complainant fails to identify a duty independent of the contractual duty as a basis for its claim of negligence.

Accordingly, this cause of action, as alleged, is barred by the economic loss doctrine. Since there is a possibility Cross-Complainant could allege a breach of a duty independent of Cross-Defendant’s contractual duties under the subject lease agreement, the Court finds that leave to amend is warranted.

Sixth Cause of Action – Fraud

To plead a legally sufficient cause of action for fraud, the pleader must allege (1) a misrepresentation; (2) the defendant’s knowledge of the falsity of the misrepresentation; (3) intent to induce plaintiff’s reliance on the misrepresentation; (4) actual reliance upon the misrepresentation; (5) causation; and (6) resulting damages. (Robinson Helicopter Co., Inc. v. Dana Corp. (2005) 35 Cal.4th 979, 990.)

Fraud must be plead specifically to withstand a general demurrer. Thus, to state a legally sufficient cause of action for fraud, a plaintiff must plead specific facts that “show how, when, where, to whom, and by what means the representations were tendered.” (Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, 1614.) Moreover, to state a cause of action for false promise, Plaintiff must also specifically allege an intent, on the part of Defendants, not to perform the promise at the time it was made. (See Gruber v. Gruber (2020) 48 Cal.App.5th 529, 540 [elements of false promise].)

To this Court, Cross-Complainant has failed to allege the fraud cause of action to the required level of specificity. Cross-Complainant does not specifically allege the contents of any alleged false statement made upon which the cause of action is based. Furthermore, the Cross- Complaint fails to specify who made any such false representation, when it was made, and the means by which the representation was made.

Seventh Cause of Action – Declaratory Relief

To state a cause of action for declaratory relief, the pleader must allege “(1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the rights or obligations of a party.” (Lee v. Silveira (2016) 6 Cal.App.5th 527, 546.)

Code Civ. Proc. §1060 provides the scope of subjects for which declaratory relief may be properly sought. Section 1060 provides in relevant part that “[a]ny person interested under ... a contract, or who

desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property, ... may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his or her rights and duties ... including a determination of any question of construction or validity arising under the instrument or contract.”

To plead an actual controversy, a pleader may not rely upon allegations concerning past wrongs. (see Cordoba Corp. v. City of Industry (2023) 87 Cal.App.5th 145, 157 [“There is no basis for declaratory relief where only past wrongs are involved”]; see also Gafcon, Inc. v. Ponsor & Associates (2002) 98 Cal.App.4th 1388, 1403 [declaratory relief “operates prospectively, and not mrerely for the redress of past wrongs. It serves to set controversies at rest before they lead to repudiation of obligations, invasion of rights or commission of wrongs...”].)

Here, declaratory relief is not necessary or proper. The Cross- Complaint does not allege an ongoing ripe controversy that could serve as the proper subject of declaratory relief. Cross-Complainant’s tenancy has terminated. There is no controversy regarding an ongoing duty to repair any aspect of the premises. Cross-Complainant’s claim for declaratory relief is based entirely on seeking a declaration regarding the legal effect of allegations of past wrongdoing that serves as the basis of this lawsuit.

Cross-Defendant’s Motion to Strike Punitive Damages

In light of the ruling on the demurrer, the motion to strike punitive damages allegations is DENIED as MOOT.

Cross-Complainants have 30 days leave to file a First Amended Cross-Complaint.

The Case Management Conference is CONTINUED to January 21, 2027, at 9:30 a.m. in Department C12.

Cross-Defendant shall provide notice of this ruling.