Case Number: BC613698??? Hearing Date: January 04, 2017??? Dept: 34
SUBJECT: Demurrer to first amended complaint

Moving Party: Defendant Edward Litvak
Resp. Party: Plaintiff Universal Card Inc.

Defendant?s demurrer to the first cause of action is SUSTAINED with leave to amend. The demurrer is otherwise OVERRULED.


Plaintiffs commenced this instant action on 3/14/16. After the Court sustained defendant?s demurrer, plaintiffs filed a first amended complaint on 9/29/16 against defendant for: (1) breach of contract; (2) quantum meruit; (3) open book account; and (4) breach of guaranty. Plaintiff alleges that on 1/8/13 the parties entered into an agreement whereby plaintiff would provide credit card processing services for defendant in return for defendant?s payment. Plaintiff alleges that defendant failed and refused to make payments, and $357.876.48 remains due and owing.


Defendant demurs to the entire first amended complaint and the four causes of action alleged therein on the grounds of failure to state facts and uncertainty.

First and fourth causes of action

?A cause of action for damages for breach of contract is comprised of the following elements: (1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to plaintiff.? (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1388.)

Defendant argues that the contract claims are not sufficiently alleged because plaintiff does not specifically allege the terms that defendant breached. This is not well taken because breach of contract claims do not need to be specifically alleged. Plaintiff alleges sufficient ultimate facts to show that the terms of the agreement and guaranty were breached. (See FAC ?? 9, 24.)

Defendant asserts that the subject agreement is not enforceable. Plaintiff alleges that on 1/8/13, the parties entered into a written Merchant Processing Application and Agreement and a personal guaranty. (See FAC ?? 6, 23.) The attached agreement states that it ?shall not take effect until Client has been approved and this Agreement has been accepted by Merchant Services, Inc. and Bank.? (Id., Exh. A.) The attached agreement does not appear to be signed by the Bank. However, plaintiff alleges that the Bank did otherwise accept the agreement by providing funds pursuant to the agreement to defendants. (See id., ? 8.) This is sufficient to allege that the agreement was in effect.

Defendant appears to be correct that plaintiff fails to allege sufficient facts to suggest that defendant was individually a party to the contract. The agreement states that the client is Home Furniture Mart, Inc. (See FAC Exh. A.) Though defendant is listed as the owner of Home Furniture Mart, Inc., defendant does not appear to be a party to the agreement. (See ibid.) The complaint does not allege facts suggesting that defendant and Home Furniture Mart, Inc., are alter egos.

The agreement does provide that defendant personally guarantees the performance of the agreement. (See FAC Exh. A.) Therefore, the fourth cause of action is sufficiently alleged against defendant. To the extent that the first cause of action is based on defendant?s breach of the guaranty, it is duplicative of the fourth cause of action.

Accordingly, defendant?s demurrer to the first cause of action is SUSTAINED with leave to amend. The demurrer to the fourth cause of action is OVERRULED.

Second and third causes of action

?[A] common count, by long continued practice is not subject to attack by general demurrer or by a special demurrer for uncertainty.? (Auckland v. Conlin (1928) 203 Cal. 776, 778. Accord Smith v. Bentson (1932) 127 Cal.App.Supp. 789, 791; Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460.) ?When a common count is used as an alternative way of seeking the same recovery demanded in a specific cause of action, and is based on the same facts, the common count is demurrable if the cause of action is demurrable.? (Berryman v. Merit Property Management, Inc. (2007) 152 Cal.App.4th 1544, 1560.)

The second and third causes of action are asserted as alternative ways of seeking the same recovery demanded in the contract claims and is based on the same facts. (See FAC ?? 14-21.) Because at least one contract claim is sufficiently alleged against defendant, the common counts are sufficient.

Accordingly, defendant?s demurrer to the second and third causes of action is OVERRULED.