Valence Surface Technologies, LLC v. Justine Gavin, LLC, et al.

(Stanley Mosk Courthouse: Dept. 413) September 9, 2026 DEPARTMENT 413 LAW AND MOTION RULINGS

HEARING DATE: Wednesday, September 9, 2026 CASE NUMBER: 23STCV23672 (related cases: 24STCV00695, 24STCV00708, 24STCV19499) CASE NAME: Valence Surface Technologies, LLC v. Justine Gavin, LLC, et al. MOVING PARTY: Cross-Defendants TCFI CP LLC, Trive Capital Management LLC, Trive Capital Fund I LP, and Trive Capital Fund I (Offshore) LP OPPOSING PARTY: Defendants/Cross-Complainants Justine Gavin, LLC, Triple Net Portfolio I Carson CA, LLC, Triple Net Portfolio I Gardena CA, LLC, and Patterson Drive Garden Grove CA, LLC PROCEEDING: DEMURRER TO THE THIRD AMENDED CROSS-COMPLAINT RULING SUMMARY: The Demurrer to the Third Amended Cross-Complaint is OVERRULED.

Cross-Defendants shall file their Answer within ten days of this Ruling, An OSC Re: Answer to TACC is set for ______________________ _____, 2026 at 8:30 a.m. and a Case Management Conference is set for ______________________ ____, 2026 at 8:30 a.m.

Background

This is a breach of contract action arising out of the lease agreement between plaintiff Valence Surface Technologies, LLC ("Plaintiff") and defendants Justine Gavin, LLC ("Gavin"), Triple Net Portfolio I Carson CA, LLC ("TNP Carson"), Triple Net Portfolio I Gardena CA, LLC ("TNP Gardena"), and Patterson Drive Garden Grove CA, LLC ("Patterson") (collectively, "Defendants").

Plaintiff alleges that Defendants have in bad faith attempted to wrongly hold Plaintiff responsible for rental payments and non-existent lease obligations for certain real properties.

On September 29, 2023, Plaintiff filed a Complaint against Defendants, alleging causes of action for (1) breach of contract; (2) money paid; and (3) declaratory relief.

On January 10, 2025, Defendants filed the Third Amended Cross-Complaint ("TACC") [1] against Plaintiff, Tracy Glende ("Glende"), TCFI CP LLC ("TCFI"), Trive Capital Management LLC ("Trive Capital"), Trive Capital Fund I LP, and Trive Capital Fund I (Offshore) LP (the three Trive cross-defendants collectively referred to as "Trive"), and Coast Plating Holdings, Inc. and Coast Plating, Inc. d/b/a Valence Paramount (the two Coast Plating cross-defendants collectively referred to as "Coast Plating"), and Coastline Metal Finishing Corporation d/b/a Valence Garden Grove ("Coastline Metal") (collectively, "Cross-Defendants"), alleging causes of action for (1) Breach of Contract - 2013 Master Lease; (2) Breach of Contract - 2021 Replacement Lease; (3) Breach of the Implied Covenant of Good Faith and Fair Dealing; (4) Waste; (5) Negligence/Gross Negligence; (6) Fraud; (7) Aiding and Abetting Tort; (8) Declaratory Relief; (9) Declaratory Relief; and (10) Unjust Enrichment.

Trive also filed their First Amended Cross-Complaint ("FACC") against Gavin, Plaintiff, Coast Plating, and Coastline Metal, alleging causes of action for (1) Breach of Express Indemnification Agreement; (2) Breach of Express Indemnification Agreement; (3) Breach of Express Indemnification Agreement; (4) Breach of Express Indemnification Agreement; and (5) Breach of Implied Indemnification Agreement.

On March 2, 2026, Trive filed the Demurrer to the TACC.

Defendants oppose.

Demurrer [2] I.

Legal Standard

Where pleadings are defective, a party may raise the defect by way of a demurrer. (Coyne v. Krempels (1950) 36 Cal.2d 257, 262.)

A demurrer tests the sufficiency of a pleading, and the grounds for a demurrer must appear on the face of the pleading or from judicially noticeable matters.¿ (Code Civ. Proc. Sec. 430.30(a); Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

In evaluating a demurrer, the court accepts the complainant's properly pled facts as true and ignores contentions, deductions, and conclusory statements. (Daar v. Yellow Cab Co. (1976) 67 Cal.2d 695, 713; Serrano v. Priest (1971) 5 Cal.3d 584, 591.)

Moreover, the court does not consider whether a plaintiff will be able to prove the allegations or the possible difficulty in making such proof. (Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 604.)

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.)¿The burden is on the complainant to show the Court that a pleading can be amended successfully. (Ibid.)

II.

Discussion

Trive demurs to the sixth cause of action of the TACC on the grounds that (1) it fails to state facts sufficient to constitute any cause of action; (2) is barred by the applicable statute of limitations; and (3) is barred by the economic loss rule.

A. Statute of Limitations

"The statute of limitations of section 338, subdivision (d) provides a limitations period for fraud of three years. (Code Civ. Proc., Sec. 338 (d).)

This section effectively codifies the delayed discovery rule for fraud causes of action, providing that a cause of action for fraud 'is not to be deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.' " (Britton v. Girardi (2015) 235 Cal.App.4th 721, 733-734.)

"The 'date the complaining party learns, or at least is put on notice, that a representation was false' is the date the statute starts running." (Id.)

However, "the California courts have consistently held that a demurrer which raises the defense that a statute of limitation bars the action cannot be sustained unless the facts alleged in the complaint show that the action is barred.

If all that appears from the facts alleged is that the action might be barred, the defense cannot be raised by demurrer". (Anderson v. McNally (1957) 150 Cal.App.2d 778, 783; see also Pike v. Zadig (1915) 171 Cal. 273, 277, disapproved of on other grounds by Decesare v. Lembert (1983) 144 Cal.App.3d 20, stating ["a demurrer on the ground of the bar of the statute of limitations does not lie, where the complaint merely shows that the action may have been barred.

It must appear affirmatively that, upon the facts stated, the right of action is necessarily barred."].)

The TACC alleges that TCFI actively misrepresented the environmental contamination at the real properties located at 417 W. 164th Street, Carson, CA and 433 W. 164th Street, Carson, CA (collectively, "Carson Property"). (TACC, P.P. 33-34, 75.)

On or around September 2020, Cross-complainants, defined as "Landlord" in the TACC, received a notice from the California EPA regarding contamination at the Carson Property. (Id.)

On September 15, 2020, Landlord emailed Glende, to inquire about the contamination and was told it, "goes back to when the property was owned by ANCO." (Id., Ex. 28.)

Glende also stated that the impacted soil "was not Valence's doing" and "was contaminated long before [Valence's] involvement." (Id. P. 339, Ex. 28.)

These statements were knowingly false, as the spike in the chromium contamination occurred only after Tenants began operating at the Carson Property under the Master Lease, which Glende and Tenants knew based on reports and communications with the relevant investigative authorities. (Id.)

The fraud and misrepresentations continued until well after execution of the Replacement Lease. (Id. P. 340, Ex. 29.)

In August 2021, Glende on behalf of TCFI repeated this misrepresentation. (Id.)

Taking the facts alleged as true, the TACC contains no allegation that demonstrates that Cross-complainants knew in 2020 or 2021 that the alleged representations made by Trive were false.

The TACC tends to allege that as early as 2020 and as late as 2021, Cross-complainants believed Trive's representations that the contamination predated Plaintiff's involvement with the Carson Property.

It does not appear on the face of the TACC that the fraud claim is time-barred.

B. Economic Loss Rule

The economic loss rule posits that a purchaser of a product that does not live up to the buyer's expectations can only recover in contract and not tort, "unless [the purchaser] can demonstrate harm above and beyond a broken contractual promise." (Food Safety Net Services v. Eco Safe Systems USA, Inc. (2012) 209 Cal.App.4th 1118, 1130, quoting Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988 (" Robinson Helicopter").)

In Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 843, the Court held that "the economic loss rule does not bar plaintiffs' claim here for fraudulent inducement by concealment.

Fraudulent inducement claims fall within an exception to the economic loss rule recognized by our Supreme Court (Robinson, supra, 34 Cal.4th at pp. 989-990), and plaintiffs allege fraudulent conduct that is independent of Nissan's alleged warranty breaches." (See also Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 991 [holding the economic loss rule does not bar fraud and intentional misrepresentation claims where the conduct alleged is independent of a breach of contract].)

In Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, the court clarified that Robinson did not announce an exception to the economic loss rule but rather "clarified the extent of the [economic loss rule] by demonstrating why the doctrine simply did not apply to the case at issue." (Rattagan, supra, 17 Cal.5th at 34.)

As a result, the Rattagan court concluded that, "[u]nder California law, a plaintiff may assert a cause of action for fraudulent concealment based on conduct occurring in the course of a contractual relationship, if the elements of the claim can be established independently of the parties' contractual rights and obligations and the tortious conduct exposes the plaintiff to a risk of harm beyond the reasonable contemplation of the parties when they entered into the contract." (Id. at 45.)

"The essential elements of fraud, generally, are (1) a misrepresentation; (2) knowledge of falsity; (3) intent to induce reliance; (4) justifiable reliance; and (5) resulting damage." (City of Industry v. City of Fillmore (2011) 198 Cal.App.4th 191, 211.)

"Each element must be pleaded with particularity so as to apprise the defendant of the specific grounds for the charge and enable the court to determine whether there is any basis for the cause of action, although less specificity is required if the defendant would likely have greater knowledge of the facts than the plaintiff." (Id.)

"This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered." (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

The TACC alleges that TCFI and/or Valence did not disclose to Cross-complainants that a 2015 spike in the chromium concentrations in monitoring wells was the result of a release and failure of secondary containment, which occurred while TCFI was a tenant at the properties. (TACC P. 73.)

In 2019, Trive Capital and/or TCFI disclosed to buyers that there was an environmental contamination at the Carson Property but this was not disclosed to Cross-complainants when asked to consent to the putative assignment and creation of the Replacement Lease. (Id. P.P. 74, 336-338.)

On September 15, 2020, Landlord emailed Glende, to inquire about the contamination mentioned in a notice from the EPA and was told it, "goes back to when the property was owned by ANCO." (Id. P. 75, Ex. 28.)

Glende also stated that the impacted soil "was not Valence's doing" and "was contaminated long before [Valence's] involvement." (Id. P. 339, Ex. 28.)

Glende on behalf of Trive knew these statements were false and repeated these misrepresentations until well-after the execution of the Replacement Lease, which occurred June 7, 2021. (Id. P.P. 76-77, 340, Exs. 1, 29.)

Trive also made representations regarding the interconnection between TCFI and Valence to induce Cross-complainants to execute the Replacement Lease. (Id. P.P. 344-345.)

Had Cross-complainants been informed of Trive's intent to sever all involvement from Valence's operations and Cross-complainants' properties, Cross-complainants would have insisted on materially different terms. (Id. P. 346.)

As a result, Cross-complainants suffered damages to the properties such as vandalism, squatting, broken door handles and windows. (Id. P.P. 365, 373.)

Taking the allegations as true, the TACC sufficiently alleges that Trive and/or TCFI made several misrepresentations to Cross-complainants to induce them to enter into a Replacement Lease; who on behalf of Trive made these misrepresentations; the content of the misrepresentations; how the misrepresentations were made; and when the misrepresentations were made.

The TACC also alleges specific facts as to the types of damages that have resulted due to Cross-complainants' reliance on these misrepresentations.

In light of the foregoing, the TACC is not barred by the economic loss rule because it alleges an independent basis for fraud outside of the parties' contractual rights and obligations.

Conclusion

For the reasons explained above, Cross-defendants TCFI CP LLC ("TCFI"), Trive Capital Management LLC ("Trive Capital"), Trive Capital Fund I LP, and Trive Capital Fund I (Offshore) LP's Demurrer to the Third Amended Cross-Complaint is OVERRULED.

Cross-Defendants shall file their Answer within ten days of this Ruling, An OSC Re: Answer to TACC is set for ______________________ _____, 2026 at 8:30 a.m. and a Case Management Conference is set for ______________________ ____, 2026 at 8:30 a.m.

Date: September 9, 2026 _______________________________ William E. Weinberger Judge, Los Angeles Superior Court

[1] These claims have been dismissed as to Cross-defendants Valence Surface Technologies, LLC, Coast Plating Holdings, Inc., Coastline Metal, Tracy Glende, and as to the first, second, fourth, fifth, seventh, eighth and ninth causes of action. (Requests for Dismissal, 2/28/25; 3/28/25; 4/9/25.)

Pursuant to Code Civ. Proc. Sec. 430.41, the meet and confer requirement has been met. | Home -->)" -->