Hearing DemurrerCal. Super. - 6th Dist.March 30, 2017SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER Sashi Kalia et al vs Florence Sordello Hearing Start Time: 9:00 AM 17CV308052 Hearing Type: Hearing: Demurrer Date of Hearing: 11/30/2017 Comments: 1 Heard By: Kirwan, Peter Location: Department 19 Courtroom Reporter: Courtroom Clerk: Shantel Hernandez Court Interpreter: Court Investigator: Parties Present: Future Hearings: Exhibits: - Tentative Ruling Not Contested. Adopted. See Below: Case Name: Sashi Kalia, et al. v. Florence Sordello, as Trustee of the Sordello Family Trust B dated October 3, 2008 under Agreement dated April 29, 1993 Case No.: 17-CV-308052 Currently before the Court is the demurrer by defendant Florence Sordello ( Defendant ), as Trustee of the Sordello Family Trust B dated October 3, 2008 under Agreement dated April 29, 1993, to the verified complaint of plaintiffs Sashi Kalia ( Kalia ) and Jerry Vignato ( Vignato ) (collectively, Plaintiffs). Factual and Procedural Background This case arises from a fire that occurred at a strip mall located in Santa Clara County. (Complaint, 7, 11, 15.) Defendant owns the strip mall, which consists, in part, of real property located at 2035 White Oak Lane and 2041 White Oak Lane. (Id. at 7 and 11.) On October 1, 2014, Kalia entered into a written agreement with Defendant to lease the premises located at 2035 White Oak Lane for a period of five years. (Complaint, 7.) Kalia operated a unique liquor store, KP Liquor, at the premises. (Ibid.) On October 29, 2014, Vignato entered into a written agreement with Defendant to lease the premises located at 2041 White Oak Lane for a period of five years (Complaint, 11.) Vignato operated a unique sports bar, Poinciana Lounge, at the premises. (Ibid.) Section 15.01 of Plaintiffs lease agreements states: Primed: 11/30/2017 11/30/2017 Hearing: Demurrer - 17CV308052 Page 1 of7 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER If the leased premises shall be damaged by fire, the elements, or unavoidable accident of other casualty, but are not thereby rendered untenable in whole or in part, Owner shall at its own expense cause such damage to be repaired, and the rent shall not be abated. If by reason of such occurrence, the premises shall be rendered untenable only in part, Owner shall at its own expense cause the damage to be repaired, and the fixed minimum rent meanwhile shall be abated proportionately as to the portion of the premises rendered untenable. If the premises shall be rendered wholly untenable by reason of such occurrence, the Owner shall at its own expense cause such damage to be repaired, and the fixed minimum rent received by Owner from rent insurance for which the premiums have been paid by Tenant, except that Owner shall have the right to be exercised by notice in writing delivered to the Tenant within sixty (60) days from and after said occurrence, to elect not to reconstruct the destroyed premises, and in such event this Lease and the tenancy hereby created shall cease as of the date of said occurrence, the rent to be adjusted as of such date. (Complaint, 8 and 12.) Next, section 15.02 of Plaintiffs lease agreements provides: In the event that fifty percent (50%) or more of the rentable area of the Shopping Center shall be damaged or destroyed by fire or other cause, notwithstanding that the leased premises may be unaffected by such fire or other cause, Owner shall have the right, to be exercised by notice in writing delivered to Tenant within sixty (60) days from and after said occurrence to elect to cancel and terminate this Lease. Upon the giving of such notice to Tenant, the term of this Lease shall expire by lapse of time upon the third day after such notice is given, and Tenant shall vacate the leased premises and surrender the same to Owner. Nothing in this Section 15.02 nor in Section 15.01 hereof shall be construed as a limitation of Tenant s liability for such occurrence, should such liability otherwise exist. (Complaint, 9 and 13.) Lastly, section 17.02 of Plaintiffs lease agreements reads, [i]n the event Owner or Tenant retains an attorney to enforce the provisions of this Lease agreement against the other, the party which established a breach of this Lease shall be entitled to recover from the other reasonable attorney s fees and costs incidental to such enforcement regardless of whether or not suit is brought. (Complaint, 10 and 14.) On August 26, 2015, the KP Liquor and Poinciana Lounge businesses operating at 2035 White Oak Lane and 2041 White Oak Lane, respectively, were destroyed entirely by a fire caused by a hit-and-run collision. (Complaint, 15.) [T]he property located at 2035 White Oak Lane was rendered wholly untenable by the fire. (|bid.) [T]he property located at 2041 White Oak Lane was also rendered wholly untenable by the fire. (|bid.) In addition, fifty percent or more of the rentable area of the strip mall was damaged and/or destroyed by the fire. (Id. at 7 and 15.) Nonetheless, Defendant did not exercise her right under section 15.01 of the lease agreements to elect not to reconstruct the destroyed premises. (Complaint, 16 and 17.) Since August 2015, Plaintiffs have been waiting for Defendant to reconstruct the destroyed strip mall. (|bid.) Plaintiffs made numerous inquiries with Defendant as to when and whether Defendant intended to reconstruct the property, but as of the date of the Primed: 11/30/2017 11/30/2017 Hearing: Demuner - 17CV308052 Page 2 of7 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER filing of the complaint Plaintiffs were given no such information in violation of the lease agreements. (Id. at 17.) On October 26, 2015, Defendant breached the lease agreements by refusing to reconstruct the strip mall and failing to deliver possession of the strip mall to Plaintiffs. (Complaint, 19.) Defendant also breached the lease agreements by apparently seeking to abandon the lease and sell the [strip mall] to a third party. (Ibid.) As a result of Defendant s conduct, Plaintiffs have been damaged, and seek a decree that [they] have performed all obligations under the [lease agreements], and that Defendant be ordered and directed to reconstruct the [strip mall] and redeliver possession of the [strip mall] to Plaintiffs in compliance with all terms and conditions is the [lease agreements], and to perform all other conditions of the [lease agreements] to be performed by Defendant. (Id. at 20.) Based on the foregoing, Plaintiffs filed a verified complaint against Defendant on March 30, 2017, alleging causes of action for: (1) breach of contract; (2) specific performance; (3) quiet title; and (4) declaratory relief. On September 18, 2017, Defendant filed the instant demurrer to the complaint. Plaintiffs filed papers in opposition to the demurrer on November 15, 2017. Discussion Defendant demurs to the complaint, and each and every cause of action alleged therein, on the grounds of failure to allege facts sufficient to constitute a cause of action and another action pending between the same parties on the same cause of action. (See Code Civ. Proc., 430.10, subds. (c) and (e).) |. Request forJudicial Notice Defendant asks the Court to take judicial notice of the complaint filed in the case of Mario Hidalgo, et al. v. Pacific Gas and Electric Co., et al. (Santa Clara County Superior Court, Case No. 16-CV-297926) (Hidalgo). Because the complaint filed in Hidalgo is a court record relevant to material issues raised by the pending demurrer, it is a proper subject ofjudicial notice. (See Evid. Code, 452, subd. (d); see also People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2 [the court may properly take judicial notice of court records if those records are deemed to be necessary and relevant to the disposition of the motion]; People v. Woodell (1998) 17 Cal.4th 448, 455 [courts may take judicial notice of the existence ofjudicial opinions and court documents, along with the truth of the results reached in the documents such as orders, statements of decision, and judgments but [the court] cannot take judicial notice of the truth of hearsay statements in decisions or court files, including pleadings, affidavits, testimony, or statements of fact. ].) Accordingly, Defendant s request forjudicial notice is GRANTED. IL Legal Standard Primed: 11/30/2017 11/30/2017 Hearing: Demuner - 17CV308052 Page 3 of7 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER The function of a demurrer is to test the legal sufficiency of a pleading. (Trs. Of Capital Wholesale Elec. Etc. Fund v. Shearson Lehman Bros. (1990) 221 Cal.App.3d 617, 621.) Consequently, [a] demurrer reaches only to the contents of the pleading and such matters as may be considered under the doctrine ofjudicial notice. (South Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732, internal citations and quotations omitted; see also Code Civ. Proc., 430.30, subd. (a).) It is not the ordinary function of a demurrer to test the truth of the [] allegations [in the challenged pleading] or the accuracy with which [the plaintiff] describes the defendant s conduct. [ ] Thus, [] the facts alleged in the pleading are deemed to be true, however improbable they may be. (Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 958, internal citations and quotations omitted.) However, while [a] demurrer admits all facts properly pleaded, [it does] not [admit] contentions, deductions or conclusions of law or fact. (George v. Automobile Club of Southern California (2011) 201 Cal.App.4th 1112, 1120.) III. Failure to Allege Facts Sufficient to Constitute a Cause of Action Defendant argues that Plaintiffs fail to allege facts sufficient to state a claim because the allegations set forth in the Hidalgo complaint contradict Plaintiffs allegations in the operative complaint. Defendant asserts: The allegations of the [complaint] state that the purported basis for Plaintiffs right to specific performance and restoration of their leasehold interests is the ongoing existence of [their] leasehold rights which [they] now claim were not lost in the fire. Such claims directly contradict those previously asserted in the [Hidalgo complaint], where Plaintiffs alleged the total loss of their real property interests and demanded monetary compensation for their permanently lost rights, and for their need to move to a new location, possibly with higher rent. [T]hese allegations in the [Hidalgo complaint] presume the total extinction of any leasehold or possessory rights under [the lease agreements]. (Mem. Ps. & As., p. 6:8-15.) Defendant states that [i]fthese interests had not been completely obliterated, Plaintiffs would have been under an obligation to include some sort of allegation in the [Hidalgo complaint] indicating a limit to their damages, that their loss of the leasehold was temporary and not permanent, and they could not have lawfully demanded damages for relocation and increased rent costs. (Id. at p. 6:17-21.) Defendant concludes that Plaintiffs cannot reconcile the factual inconsistencies of their two lawsuits and the present suit should therefore be dismissed with prejudice. (Id. at pp. 2:2-4 and 7:11-14.) |n opposition, Plaintiffs argue that the allegations in the two complaints are not inconsistent. Plaintiffs assert that [t]he [Hidalgo complaint] alleges a total loss by fire of the property which they had a right to use and enjoy under the terms of the lease and [j]ust because the property was destroyed in a fire does not mean that [their] rights under [the lease agreements] were also destroyed. (Opp n., p. 2:21-26.) Plaintiffs also point out that Defendant cites no legal authority in support of her contention that a party would have no right to relocation expenses or increased rent damages if he or she expected to eventually return to the premises. Both trial and appellate courts may properly take judicial notice of a party s earlier pleadings and positions as well as established facts from both the same case and other cases. [Citations.] A plaintiff may not avoid a demurrer by pleading facts or positions in an amended complaint that contradict the facts pleaded in the original complaint or by suppressing facts which prove the pleaded facts false. [Citation.] Likewise, the plaintiff may not plead facts that contradict the facts or positions that the plaintiff pleaded in earlier actions or suppress facts that prove the pleaded facts false. [Citation.] [] When the plaintiff pleads inconsistently in separate actions, the plaintiff s complaint is nothing more than a sham that seeks to avoid the effect of a demurrer. [Citations.] Under such circumstances, the court will disregard the falsely pleaded facts and affirm Primed: 11/30/2017 11/30/2017 Hearing: Demuner - 17CV308052 Page 4 of7 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER the demurrer. (Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 877 78, italics omitted.) As is relevant here, Plaintiffs allege in the Hidalgo complaint that: the fire destroyed the entire strip mall and the City of Santa Clara condemned the property; as a result, they suffered damages to real and/or personal property, such as business assets; they incurred damages related to their fire-damaged property, such as storage, disposal, repair, replacement, and/or clean-up costs; they were also displaced and suffered the loss of use, benefit, goodwill, and/or enjoyment of real property; they suffered interruption of their businesses, lost wages, lost earning capacity, lost profits; and they incurred displacement expenses, such as relocation costs and increased rent. (Hidalgo Complaint, 30-32.) As is readily apparent, the allegations of the Hidalgo complaint do not expressly contradict the allegations of the complaint in this action. Contrary to Defendant s assertion otherwise, Plaintiffs do not allege a total loss of their real property interests, i.e., their leasehold interests, in the Hidalgo complaint. Nowhere in the Hidalgo complaint do Plaintiffs allege facts demonstrating that their leasehold interests in the premises have been terminated. Moreover, Plaintiffs position in the complaint is not necessarily inconsistent with their position in Hildago. The instant complaint seeks relief from Defendant s alleged breach of the lease agreements, i.e., Defendant s alleged refusal to acknowledge Plaintiffs leasehold interests in the premises and rebuild the subject premises in accordance with her obligations under the lease agreements. The fact that Plaintiffs seek to recover damages related to their loss of use of the premises due to the fire in the Hidalgo complaint does not, as Defendant asserts, presume the total extinction of any leasehold or possessory rights under [the lease agreements]. (Mem. Ps. & As., p. 6:8-15.) As Plaintiffs persuasively argue, the Hildago complaint may be reasonably interpreted as seeking damages related to loss of use (an incidental damages) for the time period of the fire until the rebuild (which has not yet occurred) while the complaint in this action seek[s] decrees confirming that [Plaintiffs] still maintain leasehold interests, and that they are entitled to have the property rebuilt, with possession redelivered. (Opp n., p. 6:10-18.) For these reasons, Defendant s demurrer on the ground of failure to allege facts sufficient to constitute a cause of action is OVERRU LED. IV. Another Action Pending Between the Same Parties on the Same Cause of Action Defendant argues that there is another action pending between the same parties on the same cause of action because Plaintiffs filed the Hidalgo complaint against her and the complaint in this action involves the same primary right as the claims for premises liability and nuisance set forth in the Hidalgo complaint. Defendant contends that the Hidalgo complaint sets out a specific case that the primary right of the quiet enjoyment and possession ofthe leasehold interest had been irretrievably and permanently lost by reason of Defendant s failure to perform its duty to preserve the leaseholds, with Plaintiffs forced to relocate and incur expenses thereby, and seeks monetary compensation only for these losses. (Mem. Ps. & As., p. 4:5-9.) Defendant contends that the complaint in this action asserts demands for relief from the same primary right, namely the loss of the quiet enjoyment and possession of Plaintiffs leasehold interests. (Id. at p. 5:19-22.) A demurrer on the ground that there is another action pending between the same parties on the same cause of action is notjudicially favored. (Conservatorship of Pacheco (1990) 224 Cal.App.3d 171, 176.) A demurrer raising this objection to a second action between the same parties is strictly limited so that . . . the defendant must show that the parties, cause of action, and issues are identical, and that the same evidence would Primed: 11/30/2017 11/30/2017 Hearing: Demuner - 17CV308052 Page 5 of7 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER support thejudgment in each case. (Pitts v. City of Sacramento (2006) 138 Cal App 4th 853, 856, italics omitted.) As explained by another case: A plea in abatement pursuant to section 430.10, subdivision (c), may be made by demurrer or answer when there is another action pending between the same parties on the same cause of action. In determining whether the causes of action are the same for purposes of pleas in abatement, the rule is that such a plea may be maintained only where a judgment in the first action would be a complete bar to the second action. Where a demurrer is sustained on the ground of another action pending, the proper order is not a dismissal, but abatement of further proceedings pending termination of the first action. (Plant Insulation Co. v. Fibreboard Corp. (1990) 224 Cal. App. 3d 781, 787-788, citations omitted.) The rule that the pendency of one action abates another is based in part upon the practical supposition that the first suit is effective and affords an ample remedy to the party and that the second is unnecessary and vexatious, and in part upon the legal principle that the law abhors a multiplicity of actions. (National Auto. Ins. Co. v. Winter (1943) 58 Cal.App.2d 11, 16.) To determine whether two proceedings involve identical causes of action, California courts have consistently applied the primary rights theory. (Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 792 (Boeken); see DKN Holdings LLC v. Faerber (2015) 61 Cal.4th 813, 827, fn.1; see also Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 904.) Under this theory, [a] cause of action arises out of an antecedent primary right and corresponding duty and the delict or breach of such primary right and duty by the person on whom the duty rests. Of these elements, the primary right and duty and the delict or wrong combined constitute the cause of action in the legal sense of the term (Boeken, supra, 48 Cal.4th at pp. 797-98.) [F]or purposes of applying the doctrine of res judicata, [t]he 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. (Id., at p. 798.) [T]he cause of action is based upon the harm suffered, as opposed to the particular theory asserted by the litigant. Even where there are multiple legal theories upon which recovery might be predicated, one injury gives rise to only one claim for relief. Hence a judgment for the defendant is a bar to a subsequent action by the plaintiff based on the same injury to the same right, even though he presents a different legal ground for relief. Thus, under the primary rights theory, the determinative factor is the harm suffered. When two actions involving the same parties seek compensation for the same harm, they generally involve the same primary right. (Boeken, supra, 48 Cal.4th at p. 798, internal citations and emphasis omitted.) In this action, Plaintiffs seek decrees that [they] have performed all obligations under the [lease agreements], and that Defendant be ordered and directed to reconstruct the [strip mall] and redeliver possession ofthe [strip mall] to Plaintiffs in compliance with all terms and conditions is the [lease agreements], and to perform all other conditions of the [lease agreements] to be performed by Defendant. (Complaint, 20, 28, 34, 37 and Prayer for Relief, 2-6.) They also seek damages incidental to the delay in reconstruction. (Id. at 29.) Consequently, the primary right involved in this case is Plaintiffs right to receive the benefits of their contracts with Defendant, and the corresponding duty is Defendant s duty to perform its obligations under the lease agreements. Defendant allegedly breached this duty by refusing to acknowledge the validity of Plaintiffs leasehold interests and rebuild the subject premises anew. On the other hand, as alleged in the Hidalgo complaint, Plaintiffs alleged harm is the fire damage to their personal property, their loss of use and enjoyment of the premises as they previously existed, and the costs incurred as a result of the subject premises being untenable. Consequently, the primary right involved in the Hidalgo case is Plaintiffs right to be free from legally impermissible interference with the integrity of their real and personal property, Primed: 11/30/2017 11/30/2017 Hearing: Demuner - 17CV308052 Page 6 of7 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER and the corresponding duty was Roberts duty not to wrongfully interfere with the same. Defendants allegedly breached that duty by negligently causing a nuisance and injury to the subject premises and Plaintiffs business assets. Based on the foregoing, this lawsuit and the Hidalgo case do not involve the same causes of action. Accordingly, Defendants demurrer on the ground of another action pending between the same parties on the same cause of action is OVERRULED. Primed: 11/30/2017 11/30/2017 Hearing: Demuner - 17CV308052 Page 7 of7