David Ferguson vs. Joshua Bryant

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Once the form is signed it must be filed with the clerk. If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk

34-2021-00311493-CU-FR-GDS: David Ferguson vs. Joshua Bryant 10/31/2024 Hearing on Demurrer to 1st Amended Complaint in Department 53

will forward the form to the Court Reporter’s Office and an official reporter will be provided.

TENTATIVE RULING:

Defendants Joshua Bryant, Miranda Bryant and Element 26 Contracting, Inc.’s (“Element”) (collectively, “Defendants”) demurrer to Plaintiff David Ferguson’s (“Plaintiff”) first amended complaint (“1AC”) is ruled upon as follows.

Background

This action arises out of a business relationship between Plaintiff and Defendants. Plaintiff alleges that Defendants offered him a thirty percent ownership interest in Element in exchange for his relocation from California to Colorado and employment with Element. (1AC ¶2.) This offer was memorialized in writing. (1AC ¶16.) Plaintiff further alleges that in or about June of 2011, he loaned Element $100,000.00 at zero interest. (1AC ¶19-20.) The loan was to be paid back after one year, but the parties extended that period by oral agreement. (1AC ¶21.)

Ultimately, Defendants terminated Plaintiff’s employment, refused to provide him a thirty percent ownership interest in Element, and failed to tender payment on an outstanding balance of his loan. Plaintiff brings causes of action for (1) breach of contract, (2) fraud - intentional misrepresentation, (3) fraud – concealment, (4) constructive fraud, and (5) for an accounting.

Defendants now demurs to the first cause of action for breach of contract. Plaintiff opposes.

Legal Standard

The function of a demurrer is to test the sufficiency of the pleading it challenges by raising questions of law. (Salimi v. State Comp. Ins. Fund (1997) 54 Cal.App.4th 216, 219; Nordlinger v. Lynch (1990) 225 Cal.App.3d 1259, 1271.) A demurrer “tests the pleadings alone and not the evidence or other extrinsic matters.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) “If the complaint states a cause of action under any theory, regardless of the title under which the factual basis for relief is stated, that aspect of the complaint is good against demurrer.” (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38-39; Bagatti v. Dept. of Rehabilitation (2002) 97 Cal.App.4th 344, 352.)

For the purpose of determining the effect of a complaint, its allegations are liberally construed, with a view toward substantial justice. (Code Civ. Proc. § 452; Amarel v. Connell (1988) 202 Cal.App.3d 137, 140-141; Quelimane Co., supra, 19 Cal.4th at 43, fn. 7.) In this respect, the Court treats the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law, and considers matters which may be judicially noticed. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1111-1112.) The Court treats as true not only

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00311493-CU-FR-GDS: David Ferguson vs. Joshua Bryant 10/31/2024 Hearing on Demurrer to 1st Amended Complaint in Department 53

the complaint’s material factual allegations, but also facts that may be implied or inferred from those expressly alleged. (Amarel, supra, 202 Cal.App.3d at 141.) “A court will not consider facts which have not been alleged in the complaint unless they may be reasonably inferred from the matters which have been pled or are proper subjects of judicial notice.” (Hall v. Great Western Bank (1991) 231 Cal.App.3d 713, 722, fn. 7.) The Court is to give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. (Blank, supra, 39 Cal.3d at 318.)

A demurrer may be sustained only if the complaint lacks any sufficient allegations to entitle the plaintiff to relief. (Financial Corp. of America v. Wilburn (1987) 189 Cal. App. 3d 764, 778.) “Plaintiff need only plead facts showing that he may be entitled to some relief, we are not concerned with plaintiff's possible inability or difficulty in proving the allegations of the complaint.” (Highlanders, Inc. v. Olsan (1978) 77 Cal.App.3d 690, 696-697.)

Nonetheless, “[t]he plaintiff has the burden of showing that the facts pleaded are sufficient to establish every element of the cause of action.” (Martin v. Bridgeport Community Assn., Inc. (2009) 173 Cal.App.4th 1024, 1031; see Sui v. Price (2011) 196 Cal.App.4th 933, 938.) “Allegations must be factual and specific, not vague or conclusionary.” (Rakestraw v. California Physicians' Service (2000) 81 Cal.App.4th 39, 43–44, internal citations omitted.)

Discussion

At the outset, the Court sustains Plaintiff’s objection to any extrinsic evidence Defendants seek to introduce in their opposition. As noted earlier, a demurrer “tests the pleadings alone and not the evidence or other extrinsic matters.” (SKF Farms, supra, 153 Cal.App.3d at 905.) Defendants have not properly sought judicial notice of extrinsic evidence. Nor could they in this instance as the materials at issue – excerpts from a deposition and a copy of a loan contract – are not proper subjects for judicial notice.

Defendants demur to Plaintiff’s first cause of action “for failure to state facts sufficient to constitute a cause of action and is uncertain and ambiguous and otherwise cannot be ascertained from the allegations whether the loan agreement was written or oral.” (Not. of Mot. at 1:25-27.) Defendants argue that the Court must sustain the demurrer because (1) “it cannot be ascertained whether the Loan agreement was written or oral” (MPA at 4:1-2) and (2) “Plaintiff failed to attach the Loan as an exhibit to the amended complaint and/or failed to set forth the material terms in haec verba or verbatim” (MPA at 5:1-3) or otherwise sufficiently allege the Loan agreement’s material effect. (MPA at 5:16-18.)

Defendants’ general demurrer under Code of Civil Procedure section 420.10(e) (i.e., for failure to state facts sufficient to constitute a cause of action) is OVERRULED. Plaintiff brings a single cause of action for breach of contract on what appears to be two separate contracts: the employment contract and the loan agreement. Defendants demurrer only to allegations involving the loan agreement. However, a general demurrer does not lie to only a part of a cause of action and if there are sufficient allegations to entitle the plaintiff to relief, other allegations cannot be

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00311493-CU-FR-GDS: David Ferguson vs. Joshua Bryant 10/31/2024 Hearing on Demurrer to 1st Amended Complaint in Department 53

challenged by general demurrer. (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th1150, 1167.) “[A] demurrer cannot rightfully be sustained to a part of a cause of action or to a particular type of damage or remedy.” (Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1047; see also PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1682 [“trial court could not property sustain the demurrer as to only” a portion of a single cause of action].) Thus, even assuming that Plaintiff failed to state facts sufficient to constitute a cause of action for the loan agreement, nothing in the moving papers argues that Plaintiff also failed to state a cause of action for breach of the employment contract. Defendants’ general demurrer is overruled on that basis alone.

Defendants’ also specially demur to the first cause of action on the basis of uncertainty. A demurrer will lie if the pleading is uncertain, ambiguous and unintelligible. (Code Civ. Proc. § 430.10, subd. (f).) “[D]emurrers for uncertainty are disfavored, and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Lickiss v. Financial Inds. Reg. Auth. (2012) 208 Cal.App.4th 1125, 1135.) The favored approach is to clarify theories in the complaint through discovery. (See Khoury v.

Maly's of Calif., Inc. (1993) 14 Cal.App.4th 612, 616; 1 Weil & Brown, Civil Procedure Before Trial (Rutter Group 2014), §. 7:85, at p. 7(l)-39.) Nevertheless, a demurrer for uncertainty may be sustained when a defendant cannot reasonably determine what it is required to respond to; for example, when a plaintiff joins multiple causes of action as one, fails to properly identify each cause of action, or fails to state against which party each cause of action is asserted if there are multiple defendants. (Ibid.)

Defendants also demur on separate grounds under Code of Civil Procedure section 430.10, subdivision (g), which provides that “[i]n an action founded upon contract, it cannot be ascertained from the pleading whether the contract is written, is oral, or is implied by conduct.”

Defendants argue that the 1AC fails to allege whether the Loan agreement is oral or written, and that even if it is written, Plaintiff alleges contrary terms (e.g., a zero-interest loan while asserting no waiver of accrued interest, agreement between all parties while indicating that Defendant Miranda Bryant did not have knowledge of any loan agreement) that do not provide the sufficient legal effect of the contract. The Court agrees that based on the lack of any allegations regarding whether the loan agreement was oral or written, the contradictory recitation of terms (and parties to the agreement), and the multiple contracts at issue in this single cause of action, the first cause of action for breach of contract is uncertain.

Accordingly, Defendants’ demurrer to the first cause of action under Code of Civil Procedure sections 430.10, subdivisions (f) and (g) is SUSTAINED. Since Plaintiff may amend the complaint to allege facts sufficient to cure any uncertainty, leave to amend is GRANTED.

Disposition

Defendants’ general demurrer to Plaintiff’s first cause of action for breach of contract is OVERRULED. Defendants’ special demurrer to the same cause of action is SUSTAINED, with

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00311493-CU-FR-GDS: David Ferguson vs. Joshua Bryant 10/31/2024 Hearing on Demurrer to 1st Amended Complaint in Department 53

leave to amend. Plaintiff may file and serve an amended complaint within 10 day of this order per California Rule of Court, Rule 3.1320, subdivision (g).

This minute order is effective immediately. No formal order or other notice is required. (Code Civ. Proc. §1019.5; CRC, Rule 3.1312.)