Case Number: KC068474    Hearing Date: December 19, 2016    Dept: J

Re: Homey Design, Inc. v. Metropolitan Warehouse & Delivery Corp. (KC068474)

DEMURRER TO FIRST AMENDED COMPLAINT

Moving Party: Defendant Metropolitan Warehouse & Delivery Corp.

Respondent: Plaintiff Homey Design, Inc.

POS: Moving OK; Opposing OK

Plaintiff is in the business of selling high-end luxury furniture, specializing in upholstered living room sets. Plaintiff alleges that the defendant carrier damaged or destroyed furniture that it was supposed to deliver to plaintiff’s customers. The complaint was filed on 5/31/16. The First Amended Complaint, filed on 10/4/16, asserts causes of action for:

1. Breach of Written Contract
2. Conversion

A Case Management Conference is set for 12/19/16.

Defendant Metropolitan Warehouse & Delivery Corp. demurs, per CCP § 430.10(e), to the first and second causes of action in Plaintiff Homey Design, Inc.’s First Amended Complaint, on the basis that they both fail to state facts sufficient to constitute causes of action.

FIRST CAUSE OF ACTION (BREACH OF WRITTEN CONTRACT):

“[T]he elements of a cause of action for breach of contract are (1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff. (Reichert v. General Inc. Co. (1968) 68 Cal.2d 822, 830).” Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.

“A written contract may be pleaded either by its terms—set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference—or by its legal effect. ([4 Witkin, Cal. Procedure (4th ed. 1997)] §§ 479, 480, pp. 572–573.) In order to plead a contract by its legal effect, plaintiff must ‘allege the substance of its relevant terms….’ (Id., § 480, p. 573.).” McKell v. Washington Mut., Inc. (2006) 142 Cal.App.4th 1457, 1489.

Both facts alleged in the text of the complaint and facts appearing in exhibits attached to it are accepted as true for purposes of a demurrer; however, “[i]f the facts appearing in the attached exhibit contradict those expressly pleaded, those in the exhibit are given precedence.” Mead v. Sanwa Bank California (1998) 61 Cal.App.4th 561, 568.

Plaintiff Homey Design, Inc. (“plaintiff”) has attached the same pricing structure and delivery rates document from its original complaint as Exhibit “1” to the First Amended Complaint (“FAC”). In the allegations, plaintiff lists the supposed terms that Defendant Metropolitan Warehouse & Delivery Corp. (“defendant”) agreed to and breached. For instance, in ¶ 14, plaintiff alleges that “[i]n the event the furniture was damaged during shipment or delivery, METROPOLITAN agreed to repair or replace the furniture in accordance with the following terms and conditions set forth in the agreement: a. Metropolitan provides 30 minutes of repair prior to delivery at no charge. b. Any repair in excess of 30 minutes will be quoted and approved by shipper. c. Metropolitan will only repair product at one of our facilities. d. Metropolitan will be liable for repair and/or replacement of products at 1.5% of value. e. If Metropolitan cannot repair PIECE Metropolitan will assume liability for actual wholesale value. f. Metropolitan can repair any Case Good or Upholstered Goods on site at any Metropolitan Facility.”

In reviewing Exhibit “A,” however, it is unclear whether defendant actually obligated itself to the terms that plaintiff claims defendant breached. Exhibit “A” is merely a list of the services that defendant provides, not a document that binds defendant to perform; as such, it is unclear whether it obligates defendant to actually perform those terms, particularly since defendant did not sign it.

Accordingly, defendant’s demurrer to the first cause of action is sustained.

SECOND CAUSE OF ACTION (CONVERSION):

“’Conversion is generally described as the wrongful exercise of dominion over the personal property of another. [Citation.] The basic elements of the tort are (1) the plaintiff’s ownership or right to possession of personal property; (2) the defendant’s disposition of the property in a manner that is inconsistent with the plaintiff’s property rights; and (3) resulting damages. [Citation.]’ (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119).” Regent Alliance Ltd. v. Rabizadeh (2014) 231 Cal.App.4th 1177, 1181. “A party need only allege it is ‘entitled to immediate possession at the time of conversion. [Citations.]’ (Bastanchury v. Times-Mirror Co. (1945) 68 Cal.App.2d 217, 236, italics in original.) However, a mere contractual right of payment, without more, will not suffice.” Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 452.

Plaintiff has alleged that, “[o]n numerous occasions,” its customers would reject its furniture shipments because defendant damaged or destroyed the product during shipping and delivery.” (FAC, ¶ 24). Plaintiff has further alleged that, upon this rejection, ownership of the furniture transferred back to it and that it was entitled to possession of same. (Id., ¶ 25). Plaintiff has alleged that instead of returning the rejected furniture to plaintiff, defendant took possession of same and refuses to return it. (Id., ¶¶ 26-28). These allegations are sufficient for purposes of a demurrer.

Defendant’s demurrer to the second cause of action is overruled.

The court will hear from counsel for plaintiff as to whether leave to amend the first cause of action is again requested, and will require an offer of proof if so.