Steven Hernandez, et al. vs Charles Wu, et al.

Demurrer without Motion to Strike

Cal. Super. - 2nd Dist.November 5, 2018

Electronicall NO 0 NN A N Wn BA W N N N O N ND N N DN N N O N O N O N mm e m e m e m e d e d e m em e d 00 N N Un A W N = O VO N N N B R A W N = o FILED by Superior Court of California, County of Los Angeles on 12/05/2018 11:51 AM Sherri R. Carter, Executive Officer/Clerk of Court, by K. Hung,Deputy Cler] Thomas J. Borchard, Esq., SBN: 104008 tborchard@borchardlaw.com Janelle M. Dease, Esq., SBN: 226198 jdease@borchardlaw.com BORCHARD & CALLAHAN, APC 25909 Pala, Suite 300 Mission Viejo, CA 92691 Telephone: (949) 457-9505 Attorneys for Defendants CHARLES WU and MING H. WU IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF LOS ANGELES STEVEN HERNANDEZ and AMERENE Case No. 18STCV03713 HERNANDEZ, Assigned for all purposes to Judge Holly E. Plaintiffs, Kendig, Dept. Dept. 42 DEFENDANTS CHARLES WU and MING H. A WU’S NOTICE OF DEMURRER AND DEMURRER TO VERIFIED COMPLAINT CHARLES WU, MING H. WU, and DOES 1 - 10, inclusive, HEARING: Defendants. Date: January 17,2019 Time: 8:30 a.m. Dept.: 47 RES ID: 759211616163 542396419799 Date Action Filed: November 5, 2018 Trial Date: None. TO ALL INTERESTED PARTIES AND THEIR ATTORNEYS OF RECORD HEREIN: NOTICE IS HEREBY GIVEN that on January 17, 2019, at 8:30 a.m., or soon thereafter as this matter mat be heard, in Dept. 42 of the Los Angeles County Superior Court, located at 111 North Hill Street, Los Angeles, CA 90012, defendants CHARLES WU and MING H. WU will, and hereby i DEFENDANTS CHARLES WU and MING H. WU’S NOTICE OF DEMURRER AND DEMURRER TO VERIFIED COMPLAINT Oo 0 NN O N Ln BAA W N N O N N N N N O N O N O N m= o m mm p m md p m md p d p m pe NR N N nn BRA W N = O VO N N N N R W N = o do, demur to the Verified Complaint of plaintiffs STEVEN HERNANDEZ and AMERENE HERNANDEZ, filed in this action. This demurrer is based on this Notice of Demurrer and Demurrer, the concurrently filed Memorandum of Points and Authorities, on the papers and records on file herein, and such oral and documentary evidence as may be presented at the time of hearing. DEMURRER TO COMPLAINT Defendants CHARLES WU and MING H. WU demur to the following: 1. First Cause of Action of the Complaint, on the on the grounds that it fails to state facts sufficient to constitute a cause of action, because the contract which is the subject matter of the cause of has been terminated. Code Civ. Proc. § 430.10(¢). 2. Second Cause of Action of the Complaint, on the on the grounds that it fails to state facts sufficient to constitute a cause of action, because the contract which is the subject matter of the cause of has been terminated. Code Civ. Proc. § 430.10(e). Dated: 12/4/2018 BORCHARD & CALLAHAN, APC. Thomas J. Borchard, Esq. Janglle M. Dease, Esq. Attorneys for Defendants CHARLES WU and MING H. WU ii DEFENDANTS CHARLES WU and MING H. WU’S NOTICE OF DEMURRER AND DEMURRER TO VERIFIED COMPLAINT O O ® 9 O N Un A W N N N N N ND N N ND O N mm mm e m em e m e m e m e m pe 0 N A Wn BR W N = O VO N N N D D W N N D = MEMORANDUM OF POINTS AND AUTHORITIES IL INTRODUCTION The matter arises from a defaulted real estate sale between Defendants, Charles and Ming Wu (“Defendants) and plaintiffs, Steven and Amerene Hernandez (“Plaintiffs”) for the purchase of real property owned by Defendants at 1713 W. Olympic Blvd. in Montebello (“the Property”). Defendants, as sellers, made a written demand that the Plaintiffs close escrow on the date agreed, a procedure prescribed by the terms of the purchase contract. Plaintiffs failed to perform, and Defendants rightfully cancelled the contract, terminating all obligations of performance. These facts are established by the pleading of the Verified Complaint and the terms of the attached exhibits. As Plaintiffs cannot establish the existence of an enforceable contract, both the first and second causes of action, which are based on performance of the contract, must fail and the action be dismissed. IL. BACKGROUND The Complaint alleges that on October 1, 2018, Defendants, as sellers, and Plaintiffs, as buyers, entered into a Residential Income Property Purchase Agreement and Joint Escrow Instructions (“the Contract”) for the purchase of the Property, the terms of which are evidenced by a series of written offers and counter-offers which are attached to the Complaint as Exhibits 1 — 7. [Complaint, § 13] Pursuant to the Contract, Escrow was to close on October 31, 2018. [Complaint, § 15; Exhibit 1, § 1D] On October 28, 2018, Defendants delivered a “Demand to Close Escrow,” demanding that the Plaintiffs close escrow within three days of receipt of the Demand, but not earlier than the agreed upon close of escrow date (October 31, 2018). [Complaint, § 16; Exhibit 8] Although the Complaint alleges that three days of said demand is November 1, 2018 [Complaint, 9 16], three days after receipt of the demand on October 28, 2018 is October 31, 2018 [Request for Judicial Notice (“RIN”), A], the agreed upon close of escrow date. The Demand states that “If you do not close escrow by the end of the time period specified in this Demand to Close Escrow, and Seller has fully performed, Seller may (i) immediately cancel the Agreement...” [Exhibit 8] Plaintiffs allege that they potentially needed more time to close, so on October 30, 2018, Plaintiffs sent Defendants a Demand to Close Escrow within five days — or November 4, 2018. [Complaint, § 19; RIN, B] This date was beyond the agreed closing date of October 31, 2018, which -1- DEFENDANTS CHARLES WU and MING H. WU’S NOTICE OF DEMURRER AND DEMURRER TO VERIFIED COMPLAINT O O 0 9 O N Un A W N N N O N N N N N N N N N N N N o o m o m p m p d md p m p d p m pe 00 N N nn R E W I N D = O VL NN ND R A W = OO could not be extended except by a writing signed by both parties [Exhibit 1,9 38], and beyond the expiration of the Defendants Demand to Close Escrow on October 31, 2018. The Complaint makes allegations of Plaintiffs’ taking steps to close escrow [Complaint, § 20, 21], however acknowledges that Plaintiff could not and did not close escrow on October 31, 2018. [Complaint, §f 22, 23] On November 1, 2018, the day after the three-day Demand to Close Escrow expired, Defendants sent a signed “Cancellation of Contract, Release of Deposit and Joint Escrow Instruction,” cancelling the Contract [Complaint, § 24; Exhibit 9] However, in direct contradiction to the Contract [Complaint, § 15; Exhibit 1, § 1D] and the Demand to Close Escrow [Exhibit 8], the Complaint alleges that November 1, 2018 was the agreed escrow closing date. Based on this fallacy, Plaintiffs allege that they performed their obligations set forth in the Contract, and that Defendants breached the Contract by cancelling it on the day it was to close. III. BECAUSE THE CONTRACT HAS BEEN INDISPUTABLY TERMINATED, PLAINTIFFS CAN NOT STATE A CAUSE OF ACTION ARISING FROM THE CONTRACT A demurrer can be utilized where the complaint itself is incomplete or discloses some defense that would bar recovery, and may be taken where any ground for objection to a complaint appears on the face thereof, or from any matter of which the court is required to or may take judicial notice. Estate of Moss (2012) 204 Cal.App.4th 521, 535; Code Civ. Proc. § 430.30. The “face of the complaint” includes evidentiary facts found in recitals of exhibits attached to a complaint. Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94. If the facts appearing in the attached exhibit contradict those expressly pleaded, those in the exhibit are given precedence. Sarale v. Pacific Gas & Electric Co. (2010) 189 Cal. App.4th 225, 244-245. The pleader’s allegations as to the legal effect of the exhibits are treated as surplusage. Barnett v. Fireman's Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505. Further, Evid. Code § 452 allows the Court to take judicial notice of a fact or proposition not reasonably subject to dispute, that cannot reasonably be controverted, even if it negates an express allegation of the pleading. Jenkins v. JPMorgan Chase Bank, N.A. (2013) 216 Cal.App.4th 497, 536 [disapproved on other grounds]. _2. DEFENDANTS CHARLES WU and MING H. WU’S NOTICE OF DEMURRER AND DEMURRER TO VERIFIED COMPLAINT NO 0 9 A N ni BA W N [\ ] N N N N Y NY N Y [\ ] nN — — pd — — t — — — — 0 N N nn RA W N N = O O N N N R R N D = O Here, the Plaintiffs’ pleading, the attached exhibits, and those facts subject to judicial notice unequivocally demonstrate that the Contract was terminated by Defendants’ proper exercise of their right to cancel, therefore discharging any future performance or obligation. Pursuant to 19F of the Contract, either the buyer or seller may cancel the Contract for the failure of the other party to close escrow, after having delivered a demand to close escrow giving the other party at least three days to perform. Defendants did just that [Exhibit 8], Plaintiff’s failed to timely close [Complaint, Y 22, 23], and the Contract was cancelled [Complaint, § 24; Exhibit 9]. A termination or cancellation of a conditional contract means to abrogate so much of it as remains unperformed ... doing away with an existing agreement upon the terms and with the consequences mentioned in the writing. See Sanborn v. Ballanfonte (1929) 98 Cal. App. 482, 488. ; Cancellation occurs when either party puts an end to the contract for breach by the other and its effect is the same as that of ‘termination’ except that the canceling party also retains any remedy for breach of the whole contract or any unperformed balance. 1 Witkin, Summary 11th Contracts § 955 (2018). Upon Defendants’ cancellation of the Contract as a result of Plaintiffs’ default, there is no longer any performance due to Plaintiff. A. SPECIFIC PERFORMANCE In order to state a cause of action for specific performance, a plaintiff must plead performance, or tender of performance, or ability and willingness to perform, within the time required by the contract. Cockrill v. Boas (1931) 213 Cal. 490, 492. “Where time is made of the essence of an agreement to pay money an allegation that the promisor was at all times ready, willing and able to make the payment is not the equivalent of payment. Not only was plaintiff obliged by the agreement to make the deposit as provided, but defendant's refusal to convey after the time for his performance had elapsed did not excuse his failure.” Pitt v. Mallalieu (1948) 85 Cal.App.2d 77, 84. The Contract contains a provision which states “Time if of the essence.” [Exhibit 1, § 38] Further, as to the Demand to Close Escrow within three days of receipt of the demand, which was made pursuant to § 19 of the Contract, time is the essence of the agreement. Plaintiffs failed to deposit the balance of the purchase money and close escrow within the time provided, by October 31, 2018. [Complaint, 4 22, 23] Plaintiff cannot plead that they did perform by closing escrow on October 31, -3- DEFENDANTS CHARLES WU and MING H. WU’S NOTICE OF DEMURRER AND DEMURRER TO VERIFIED COMPLAINT OO OX NN AN Un B R A W N N N N N N N N N N N m m e m md e m e m m d pe d p d e d 0 NN A N Ln BRA W N = O VO N N N N B D W N D = O 2018 or that they were able to close escrow on October 31, 2018. Rather, Plaintiffs plead the opposite - that they could not close until November 1, 2018 [Complaint, 4 22, 23], defeating this necessary element of the cause of action. “Failure to pay the money within the specified time deprives the vendee of his right of action to enforce performance of the vendor who holds the privilege of terminating the agreement of sale. Upon his failure to make payment the vendee committed a breach, and no affirmative act by the vendor was necessary to terminate the vendee’s right of enforcement.” Pitt v. Mallalieu at 81 [internal citations omitted]. Pursuant to the terms of the Contract and as a matter of law, Plaintiffs have no right of enforcement. Their willingness to perform on November 1, 2018 was too late. “Once an option to terminate a contract is exercised, the contract is extinguished and discharged; it cannot thereafter be revived by the other party through an offer to perform the act, the nonperformance of which gave rise to the option to terminate.” Siegel v. Lewis (1946) 74 Cal.App.2d 86, 91 B. DECLARATORY RELIEF Declaratory relief may be sought where a person interested under a contract desires a declaration of his or her rights or duties with respect to another, in cases of actual controversy relating to the legal rights and duties of the respective parties. Code Civ. Proc. § 1060. The court may refuse to exercise jurisdiction over the controversy in any case where “its declaration or determination is not necessary or proper at the time under all the circumstances.” Code Civ. Proc. § 1061. The Court in Osseous Technologies of America, Inc. v. DiscoveryOrtho Partners LLC characterized declaratory relief is forward-looking: “Declaratory relief operates prospectively, serving to set controversies at rest. If there is a controversy that calls for a declaration of rights, it is no objection that past wrongs are also to be redressed; but there is no basis for declaratory relief where only past wrongs are involved. Hence, where there is an accrued cause of action for an actual breach of contract or other wrongful act, declaratory relief may be denied.” Osseous Technologies of America, Inc. v. DiscoveryOrtho Partners LLC (2010) 191 Cal.App.4th 357, 366 [citing 5 Witkin, Cal. Proc. 5th Plead § 869 (2008)] This sentiment is reflected in Travers v. Louden, where the Court found that “there is unanimity of authority to the effect that the declaratory procedure operates prospectively, and not merely for the -4- DEFENDANTS CHARLES WU and MING H. WU’S NOTICE OF DEMURRER AND DEMURRER TO VERIFIED COMPLAINT NO © NN AN nn B R A W N N N ND N N N N O N N N = o m e m e m e m e m e m e d e d 0 NN A N Ln BA W N = O DO N N N N R E W N = O 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; in short, the remedy is to be used in the interests of preventive justice, to declare rights rather than execute them.” Travers v. Louden (1967) 254 Cal. App.2d 926, 931. In those cases where the redress for past wrongs may be proper in a declaratory relief action, in such circumstances the contract had some time to run and there was need for a declaration as to the future conduct of the parties thereunder. “Of course, neither case stands for the proposition that a declaration with respect to past wrongs would be proper when there was no occasion to define respective rights which would govern the future conduct of the parties.” Travers v. Louden at 931 — 932. Here, Plaintiffs allege an actual controversy concerning the Contract and the Plaintiffs’ right to the Property, and seek a declaration that “Plaintiffs have the right for an order of Specific Performance and a judgment decreeing conveyance of the SUBJECT PROPERTY to Plaintiffs.” [Complaint, § 33, Prayer for relief] Effectively, Plaintiffs are seeking a declaration that they have a right to the remedy sought in the first cause of action. As set forth above, the Complaint spells out and defeats the Plaintiffs’ right to Specific Performance under the Contract. The Contract was properly cancelled, and there is no continuing relationship between the parties under the contract, as future performance is discharged. There is no future conduct of the parties to be governed, only the execution of remedies. Trial courts have discretion at the demurrer stage of a dispute to weed out disputes in which a declaration would not be necessary or proper at the time, and the focus on future, practical consequences is applicable to a case in which the parties’ contractual relationship has already ended. Osseous Technologies of America, Inc. v. DiscoveryOrtho Partners LLC at 372. Where facts appear from the face of the complaint which would justify a trial court in concluding that its determination is not necessary or proper, it has been held that the court may sustain a general demurrer to the complaint for declaratory relief. Moss v. Moss (1942) 20 Cal.2d 640, 642. Further, a demurrer will stand “if it is clear from the face of the complaint that the plaintiff's position is untenable and that a declaration adverse to the plaintiff will end the matter.” Jones v. Daly (1981) 122 Cal.App.3d 500, 511. In Jones v. Daly, the complaint showed on its face that the subject -5- DEFENDANTS CHARLES WU and MING H. WU’S NOTICE OF DEMURRER AND DEMURRER TO VERIFIED COMPLAINT O O 0 9 AN Un A W N = N N O N N N N N N O N O N m m e m e t p m md b m e m e d pe e m WW N O N nt BR W N = O DD N N N N R W = o agreement was unenforceable, conferred no rights on plaintiff and imposed no duties upon defendants. Id. Thus, to entertain a declaratory relief action under such circumstances would simply constitute an idle act. IV. CONCLUSION Plaintiffs’ verified Complaint establishes as a matter of law that Plaintiffs are not entitled to Specific Performance, nor are there any means to plead around these admissions. The pleading undermines any “actual controversy” under the Contract, rendering Declaratory Relief unnecessary and improper. For the foregoing reasons, Defendants respectfully request that their demurrer be sustained as to the first and second causes of action of the Complaint. Dated: 12/5/2018 BORCHARD & CALLAHAN, APC. — THoyhs J. Borchard, Esq. lle M. Dease, Esq. Attorneys for Defendants CHARLES WU and MING H. WU = 1 = DEFENDANTS CHARLES WU and MING H. WU’S NOTICE OF DEMURRER AND DEMURRER TO VERIFIED COMPLAINT \ O o o ~ ND Wn E > w N Y N N N N N N N N N O N O N = mm e m e d e m e m p m md p m je 0 NN O N nn BRA W N = DO VO N N N N R A W N = o PROOF OF SERVICE C.C.P. § 1013(a) At the time of service, I was over the age of 18 and not a party to this action. My business address is BORCHARD & CALLAHAN, APC, 25909 Pala, Suite 300, Mission Viejo, California 92691. On December 5, 2018, I served the following documents: DEFENDANTS CHARLES WU and MING H. WU’S NOTICE OF DEMURRER AND DEMURRER TO VERIFIED COMPLAINT on the person or persons below, as follows: Darin R. Dominguez, Esq. drdlawfirm@gmail.com Law Office of Darin R. Dominguez 18000 Studebaker Rd., Suite 700 Cerritos, CA 90703 The documents were served by the following means: (X) BY MAIL: I enclosed the documents in a sealed envelope or package addressed to the persons at the addresses above, and ( ) deposited the sealed envelope with the United States Postal Service, with the postage fully prepaid. ( X) placed the envelope for collection and mailing following our ordinary business practice. I am readily familiar with this business’s practice of collecting and processing correspondence for mailing. On the same day that correspondence is placed for collection or mailing, it is deposited in the ordinary course of business with the United States Postal Service, in a sealed envelope with postage fully prepaid. Iam a resident or employed in the county where they mailing occurred. The envelope or package was placed in the mail at Mission Viejo, California. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on December 5, 2018, at Mission Viejo, California. Deglarant 1 Proof of Service Reservation Receipt | e-Delivery Project https://portal-lasc.journaltech.com/public-portal/?q=calendar/receip... Journal Technologies Court Portal Reservation Receipt Reservation Reservation ID: 542396419799 Status: RESERVED Reservation Type: Demurrer - without Motion to Strike Number of Motions: 1 Case Number: 18STCV03713 Case Title: STEVEN HERNANDEZ, et al. vs CHARLES WU, et al. Party(s): Ming H. Wu (Defendant) Location: Stanley Mosk Courthouse - Department 42 Date/Time: January 17th 2019, 8:30AM Confirmation Code: CR-ZIARZDCHTPS6GQRLJ Fees Description Fee Qty Amount First Paper Fees (Unlimited Civil) 435.00 1 435.00 Credit Card Percentage Fee (2.75%) 11.96 1 11.96 TOTAL $446.96 Payment 1of2 Reservation Receipt | e-Delivery Project https://portal-lasc.journaltech.com/public-portal/?q=calendar/receip... Amount: $446.96 Type: MasterCard Account Number: XXXX2343 Authorization: 00448E Instructions Please print this receipt and attach it to the corresponding motion/document as the last page. Indicate the Reservation ID on the motion/document face page (see example). The document will not be accepted without this receipt page and the Reservation ID. E515: 131112001088 A COPY OF THIS RECEIPT MUST BE ATTACHED TO THE CORRESPONDING MOTION/DOCUMENT AS THE LAST PAGE AND THE RESERVATION ID INDICATED ON THE MOTION/DOCUMENT FACE PAGE. ¢ Back Print Page Copyright © Journal Technologies, USA. All rights reserved. 20f2 Reservation Receipt | e-Delivery Project https://portal-lasc.journaltech.com/public-portal/?q=calendar/receip... Journal Technologies Court Portal Reservation Receipt Reservation Reservation ID: 759211616163 Status: RESERVED Reservation Type: Demurrer - without Motion to Strike Number of Motions: 1 Case Number: 18STCV03713 Case Title: STEVEN HERNANDEZ, et al. vs CHARLES WU, et al. Party(s): Charles Wu (Defendant) Location: Stanley Mosk Courthouse - Department 42 Date/Time: January 17th 2019, 8:30AM Confirmation Code: CR-PGN5SQT6WAH2B68BW Fees Description Fee Qty Amount First Paper Fees (Unlimited Civil) 435.00 1 435.00 Credit Card Percentage Fee (2.75%) 11.96 1 11.96 TOTAL | $446.96 Payment 1of2 eservafiont Receipt | e-Delivery Project https://portal-lasc.journaltech.com/public-portal/?q=calendar/receip... mount: $446.96 Type: MasterCard Account Number: XXXX2343 Authorization: 00447E Instructions Please print this receipt and attach it to the corresponding motion/document as the last page. Indicate the Reservation ID on the motion/document face page (see example). The document will not be accepted without this receipt page and the Reservation ID. ALIFORNIA, OGUNTY OF LOS ANGELES CASE NO: BCOOGHOD ABD ANSWERED INTERROGATDRI N20 ) ) ) ) ) ) ) ) ) A COPY OF THIS RECEIPT MUST BE ATTACHED TO THE CORRESPONDING MOTION/DOCUMENT AS THE LAST PAGE AND THE RESERVATION ID INDICATED ON THE MOTION/DOCUMENT FACE PAGE.