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Demurrer; Request for Judicial Notice
supra, 106 Cal.App.4th 779, 793, quoting Dinosaur Development, Inc. v. White (1989) 216 Cal.App.3d 1310, 1315.)
An unjust enrichment cause of action may survive a demurrer where the claim adequately pleads a quasi-contractual claim. (See Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 231, quoting McBride v. Boughton (2004) 123 Cal.App.4th 379, 388, and Lance Camper Manufacturing Corp. v. Republic Indemnity Co. (1996) 44 Cal.App.4th 194, 203.)
A quasi-contract “‘“is an obligation . . . created by the law without regard to the intention of the parties[] and is designed to restore the aggrieved party to [its] former position by return of the thing or its equivalent in money. [Citations.]”’” (Welborne v. Ryman-Carroll Foundation (2018) 22 Cal.App.5th 719, 725, citing Unilab Corp. v. Angeles-IPA (2016) 244 Cal.App.4th 622, 639.) “‘Quasi-contract’ is simply another way of describing the basis for the equitable remedy of restitution when an unjust enrichment has occurred.
Often called quantum meruit, it applies ‘[w]here one obtains a benefit which he may not justly retain. . . . The quasi-contract, or contract “implied in law,” is an obligation created by the law without regard to the intention of the parties, and is designed to restore the aggrieved party to his former position by return of the thing or its equivalent in money.’ [Citation.] . . . “Quasi-contracts, unlike true contracts, . . . are obligations created by law for reasons of justice.” [Citation.]’ [Citation.]” (McBride v.
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Boughton (2004) 123 Cal.App.4th 379, 388 n. 6.)
Here, the Cross-Complaint alleges circumstances showing Cross- Defendants obtained a benefit that they may not justly retain. (See Cross-Compl. ¶¶ 26, 39.)
Should Cross-Complainant desire to file an amended complaint that addresses the issues in this ruling, he shall file and serve the amended cross-complaint within 30 days of service of the notice of ruling.
Cross-Defendant Kim to give notice.
3 David TENTATIVE RULING: Vassilian, as Successor For the reasons set forth below, Defendant Anna Poladian’s Trustee of the Demurrer is SUSTAINED with 30 days leave to amend. Charles Akoboff Family Trust dated The Request for Judicial Notice is GRANTED, with the caveat that September 9, the Court does not take judicial notice of the hearsay statements 1997, as included within the filings. Amended
January 16, 1998, vs. Standing Poladian In order to have standing to sue and the right to obtain relief in court, a plaintiff must be the “real party in interest” with respect to the claims sued upon. Code of Civil Procedure, section 367, states that, “[e]very action must be prosecuted in the name of the real party in interest, except as otherwise provided by statute.” (See also Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 1004 (California Code of Civil Procedure, section 367, requires, subject to exceptions not pertinent here, that every action be prosecuted in the name of the real party in interest)).
Generally, the real party in interest is the person who has the right to sue under the substantive law. It is the person who owns or holds title to the claim or property involved, as opposed to others who may be interested or benefited by the litigation. (Gantman v. United Pac. Ins. Co. (1991) 232 Cal.App.3d 1560, 1566). The real party in interest requirement goes to the existence of a cause of action; i.e., whether plaintiff has a right to relief. (Pillsbury v. Karmgard (1994) 22 Cal.App.4th 743, 757-758 (As noted, if “any person other than a real party in interest brings an action, it is subject to general demurrer [Citations]”); American Alternative Energy Partners II, 1985 v.
Windridge, Inc. (1996) 42 Cal.App.4th 551, 559).
When a party lacks standing to sue, the action must be dismissed, unless the complaint can be amended by substituting a party who has standing. (Cloud v. Northrop Grumman Corp., supra, 67 Cal.App.4th at 1004-1011).
Plaintiff asserts all five of the causes of action on the basis that he is a shareholder of CA Foods, Inc. (See, Complaint generally.)
Defendant contends Plaintiff does not have standing to bring these causes of action because the Settlement Agreement states he is not a shareholder and the Settlement Agreement must be given precedence given the conflicting allegations stated in the Complaint. “While the ‘allegations [of a complaint] must be accepted as true for pleading purposes of demurrer,’ the ‘facts appearing in exhibits attached to the complaint will also be accepted as true and, if contrary to the allegations in the pleading, will be given precedence. Brakke v. Economic Concepts, Inc. (2013) 213 Cal.App.4th 761, 767-768.
Defendant is correct. Within the Settlement Agreement, attached to the Complaint as Ex. 5, Plaintiff confirmed the terms of Lucik’s Trust and agreed to forever waive and release any right to contest or challenge it. The Settlement further admits that the asset schedule to
Lucik’s Trust, Schedule A, reports all shares of stock in CA Foods, Inc. as an asset of Lucik’s Trust. (Settlement Agreement, Recitals, section L (5); Consideration and Obligations of the Parties, Section 1 and 3.)
The Settlement Agreement provides, in relevant part:
RECITALS
L. On April 22, 2015, Lucik executed Lucik's Trust. Schedule A of Lucik's Trust states the following described assets of Lucik are being transferred to the foregoing trust, subject to all the terms and provisions thereof: ...
5. In [sic] and all interest in the stock issued by CA Foods, Inc..
CONSIDERATION AND OBLIGATIONS OF THE PARTIES
1. Incorporation of the Recitals. The foregoing recitals and definitions are included within this part of the Agreement and are hereby incorporated by this reference. ...
3. Confirmation of Estate Plan. The Parties hereby confirm the terms of the Family Trust as comprised within the original trust instrument dated September 9, 1997, and the First Amendment dated January 16, 1998. The Parties hereby confirm the terms of Lucik's Trust as comprised within the original trust instalment dated April 22, 2015, The Parties hereby forever waive and release any and all rights and claims to seek to invalidate or to assert any objection, contest, or challenge to the Family Trust or to Lucik's Trust.
4. Sale of Business & Real Estate, Within 30 days of complete execution of this Agreement. Anna and David shall cooperate in signing all documentation necessary to list CA Foods Inc., the Mountain View Property, and First Street Properties for sale... Consent of both Anna and David are required to accept an offer or issue a counter offer, and to execute the purchase and sale documents, which consent shall not be unreasonably withheld. The net sales proceeds realized from same ... shall be distributed as follows: 1) 35% to David as Trustee of the Family Trust — Administrative Trust (an amount which shall not be less than two million four hundred thousand dollars ($2,400,000.00); and 2) 65% to Anna as Trustee of Lucik's Trust (or the remainder after payment of the $2,400,000.00). Other than such sums, each Party
waives and releases all further claims to CA Foods Inc., the Mountain View Property, and the First Street Properties. ...
21. No Admission of Liability & Waiver of Future Claims. The Parties further understand and agree that no action on the part of any Party to this Agreement shall constitute or be construed as an admission of any liability whatsoever by such Party, and that each Party to the Agreement has consistently taken the position that he or she has no liability whatsoever in this matter. Rather, it is understood that this Agreement is a compromise of disputed claims and each Party hereby assumes the risk of any damages, injuries, expenses or losses which may now be latent or unexpected or which may hereafter appear, develop or occur, as related to the matters contemplated herein.
22. Releases. Excepting only those claims, obligations, representations and warranties expressly arising under or expressly preserved by this Agreement, the Parties, each for his/herself and his/her heirs and assigns, release and forever discharge each other and their respective agents, attorneys, companies, corporations, representatives, employees, insurers, predecessors, successors, successor trustees, heirs, beneficiaries and assigns ("Releasees") from any and all claims, demands, costs, liabilities, obligations, actions and causes of action of every nature, kind or description, whether legal or equitable, known or unknown, liquidated or unliquidated, contingent or noncontingent, suspected or unsuspected, related to or arising from the subject matter of this Agreement up to the date of execution of this Agreement.
The Parties hereby covenant and agree not to institute or prosecute any action or proceeding based on any of the claims that are released or intended to be released by this Agreement, ox which are otherwise referred to herein.
23. Waiver of Civil Code Section 1542. It is the Parties' intent to resolve any and all of their differences and disputes and potential differences and disputes, whether known or unknown, arising out of the Actions, the administration of the Family Trust, and all matters discussed herein once and for all. 23.1. Except as it relates to a violation of the Representation and Warranties contained in Section 22, no Party to this Agreement may invoke the benefits of section 1542 of Settlement Agreement & Mutual Release p, 10 of 13 the Civil Code, or any similar provision, in order to prosecute or assert in any manner any claims that are released under this Agreement.
Except as provided for herein, this Agreement is intended to resolve all of the Parties' differences and disputes and potential differences and disputes regarding the Actions, the administration of the Family Trust, and matters discussed in this Agreement, whether known or unknown,
once and for all; and therefore, the provisions of California Civil Code Section 1542 are hereby expressly waived, which statute provides that: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY."
The Settlement Agreement also provides that this agreement supersedes the Interim Agreement, and this is the final agreement between the parties. (Complaint, Ex. 5; Consideration and Obligations of the Parties; ¶¶ 15, 26-27.) Plaintiff signed this agreement and is contractually bound by its terms.
Accordingly, Plaintiff has already agreed that The Family Trust is not a shareholder of CA Foods and therefore it does not have standing to make an inspection demand under Cal. Corp C. § 1601, or to sue claiming a breach of an alleged duty, when no such duty exists.
Nowhere does the Settlement provide The Family Trust with an ownership interest in CA Foods. The Settlement agreement confirms that pursuant to The Family Trust, if Charlie predeceased Lucik (which he did), his 50% portion of the estate would be divided to include: “2) Charlies Foods shall be divided equally between Louie Abokoff [sic] and David Vassilian...; 5) All remaining assets and the Plaza Jewelry Mart shall go to [Lucik].” (Complaint, Ex. 5; Recitals; Section J(d).)
Charlies Foods, Inc. pursuant to The Family Trust, was to be distributed should Charlie predecease Lucik, this was confirmed in the Settlement Agreement. CA Foods, Inc. was not specifically identified in The Family Trust. The Complaint admits that Charlies Foods, Inc. and CA Foods, Inc. are two separate legal entities. Nowhere does the Settlement provide The Family Trust with a right to income or any further benefit in CA Foods.
The Family Trust is entitled to cash in the total sum of $2.4m or 35%, whichever is greater, in full and final release of all claims to CA Foods. It released any and all further claims to CA Foods, and all such further estate assets were expressly confirmed as passing to Lucik’s Trust.
Based upon the foregoing, Plaintiff does not have standing, as a shareholder, to pursue any of the asserted five causes of action. Accordingly, the Demurrer on this ground is well taken and is sustained.
Res Judicata
Res judicata precludes relitigation of matters that were, or could have been, resolved in an earlier judicial proceeding. (Pitzen v. Superior Court (2004) 120 Cal.App.4th 1374, 1381.) “ ‘It preserve[s] the integrity of the judicial system, promote[s] judicial economy, and protect[s] litigants from harassment by vexatious litigation.’ ” (Id.; see also Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 896– 897 [doctrine prevents “piecemeal litigation”].) California law focuses “on the ‘primary right’ at stake: if two actions involve the same injury to the plaintiff and the same wrong by the defendant then the same primary right is at stake even if in the second suit the plaintiff pleads different theories of recovery, seeks different forms of relief and/or adds new facts supporting recovery.” (Eichman v. Fotomat Corp. (1983) 147 Cal.App.3d 1170, 1174.)
Claim preclusion “bar[s] relitigation of [a] claim altogether” where a second suit involves: “(1) the same cause of action (2) between the same parties [or those in privity with them] (3) after a final judgment on the merits in the first suit.” (DKN Holdings (2015) 61 Cal.4th 813, 824.)
“ ‘In California the phrase “cause of action” is often used indiscriminately ... to mean counts which state [according to different legal theories] the same cause of action ....’ [Citation.] But for purposes of applying the doctrine of res judicata, the phrase ‘cause of action’ has a more precise meaning: The cause of action is the right to obtain redress for a harm suffered, regardless of the specific remedy sought or the legal theory (common law or statutory) advanced.” (Boeken, 48 Cal.4th at 798.)
“A clear and predictable res judicata doctrine promotes judicial economy. Under this doctrine, all claims based on the same cause of action must be decided in a single suit; if not brought initially, they may not be raised at a later date.” (Mycogen, 28 Cal.4th at 897; Federal Home Loan Bank of San Francisco v. Countrywide Financial Corp. (2013) 214 Cal.App.4th 1520, 1527 [“Res judicata bars a cause of action that was or could have been litigated in a prior proceeding”], italics added; Mycogen, 28 Cal.4th at 897 [“ ‘ “Res judicata precludes piecemeal litigation by splitting a single cause of action or relitigation of the same cause of
action on a different legal theory or for different relief.” ‘ ”].) “ ‘If the matter was within the scope of the action, related to the subject matter and relevant to the issues, so that it could have been raised, the judgment is conclusive on it despite the fact that it was not in fact expressly pleaded or otherwise urged. ... The reason for this is manifest. A party cannot by negligence or design withhold issues and litigate them in consecutive actions.’ ” (Tensor Group v. City of Glendale (1993) 14 Cal.App.4th 154, 160.)
The elements of res judicata are satisfied here as this Complaint hinges on whether Plaintiff is a shareholder. That claim was resolved and any attempt to re-raise this issue would require re-litigation of The Family Trust and the Lucik Trust. Accordingly, this action is barred by res judicata and the demurrer is sustained.
Leave to Amend
On demurrer, a court determines whether the complaint states facts sufficient to constitute a cause of action. If the court sustains the demurrer, it must decide whether to grant leave to amend. Leave to amend should be granted if there is a reasonable possibility that the defect can be cured by amendment. Plaintiff has the burden of proving that there is a reasonable possibility that the defect can be cured by amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)
The court has difficulty seeing how Plaintiff can amend to correct the deficiencies identified in this ruling. Nevertheless, given California’s liberal rules concerning the amendment of pleadings, and given that this is the first demurrer, Plaintiff is granted leave to amend.
Should Plaintiff desire to file an amended complaint that addresses the issues in this ruling, Plaintiffs shall file and serve the amended complaint within 30 days of service of the notice of ruling.
Moving Party to give notice.
4 Diaz vs. TENTATIVE RULING: Toyota Motor Sales, U.S.A., For the reasons set forth below, Defendant Toyota Motor Sales, Inc. U.S.A., Inc.’s demurrer to the sixth cause of action (fraudulent inducement-concealment) of the complaint by Plaintiff Ramon Diaz, Jr. is SUSTAINED with 30 days leave to amend.
Defendant Toyota Motor Sales, U.S.A., Inc.’s motion to strike portions of the complaint by Plaintiff Ramon Diaz, Jr. is GRANTED with 30 days leave to amend.