Case Number: 18BBCV00178    Hearing Date: July 26, 2019    Dept: A

Danielian v Denogean

 Special Motion to Strike; Demurrer (x2); Motion to Compel Further Response to Discovery (x4)

Calendar: 3    
Case No.: 18BBCV00178    
Hearing Date: July 26, 2019    
Action Filed: December 03, 2018    
Trial Date: Not Set    

Special Motion to Strike

MP: Defendant Mission Properties
RP: Plaintiffs Massis Danielian and Armenui Danielian

 

Demurrer

MP: Defendant Richard Denogean
RP: Plaintiffs Massis Danielian and Armenui Danielian

 

Demurrer

MP: Defendant Hong Denogean
RP: Plaintiffs Massis Danielian and Armenui Danielian

 

Compel Further Production of Documents

MP: Defendants Richard Denogean and Hong Denogean
RP: Plaintiff Massis Danielian

 

Compel Further Production of Documents

MP: Defendants Richard Denogean and Hong Denogean
RP: Plaintiff Armenui Danielian

 

Compel Further Response to Form Interrogatories

MP: Defendants Richard Denogean and Hong Denogean
RP: Plaintiffs Massis Danielian

 

Compel Further Response to Form Interrogatories

MP: Defendants Richard Denogean and Hong Denogean
RP: Plaintiffs Armenui Danielian

 

 

ALLEGATIONS:

The instant action arises from certain improvements allegedly made to the property located at 10645 Art Street, Sunland, California 91040 (the “Property”) by Plaintiffs Armenui Danielian (“Armenui”) and Massis Danielian (“Massis” and collectively the “Plaintiffs”) between August 2015 and November 2018.  Plaintiffs allege that Defendants Mission Properties (“Mission”), Richard Denogean (“Richard”) and Hong Denogean (“Hong” and collectively the “Defendants”), owners of the Property, have benefitted from Plaintiff’s work in the amount of $80,000.00. (No disrespect is intended by referring to the parties by the first names.)

The initial Complaint was filed by Plaintiffs on December 03, 2018, and the operative First Amended Complaint (“FAC”) was thereafter filed on February 28, 2019.  In the FAC, Plaintiffs allege four causes of action sounding in (1) Breach of Implied Covenant, (2) Promissory Estoppel, (3) Quantum Meruit, and (4) Declaratory Relief.

On December 26, 2018, Defendants filed a Cross-Complaint against Cross-Defendants Massis, Armenui, and Albert Grigoryan (“Grigoryan” and collectively the “Cross-Defendants”) for: (1) Trespass to Real Property; (2) Negligence; and (3) Fraud.

PRESENTATION:

Mission filed its Special Motion to Strike under Code of Civ. Proc. §425.16 on May 01, 2019, Plaintiffs opposed the motion on May 21, 2019, and Mission filed its reply brief on May 23, 2019.  The motion came before the Court on May 31, 2019, and was continued to July 26, 2019.

The Demurrer by Richard and Hong was filed on March 29, 2019, (and the Court notes that although there is only one demurrer submitted, eCourt reflects two demurrers having been filed – presumably because there are two reservation numbers associated with the pleading).  Plaintiffs opposed the demurrer on July 15, 2019.

Richard and Hong filed four (4) motions to compel further responses to discovery from Plaintiffs on March 11, 2019, seeking to compel further responses to Requests for Production and Form Interrogatories from each Plaintiff, Massis and Armenui.  Plaintiffs opposed each motion on April 02, 2019.  The Court heard oral arguments related to these motions on April 12, 2019, when it continued the hearing to June 21, 2019 (and thereafter continued them to July 26, 2019).

RELIEF REQUESTED:     

Mission moves to strike the entire complaint pursuant to Code of Civ. Proc. §425.16.

Richard and Hong demur to each cause of action alleged in the FAC.

Richard and Hong move to compel further responses to Form Interrogatories and Requests for Production from Massis and Armenui, respectively.

DISCUSSION:

Standard of Review – Special Motion to Strike – Under the SLAPP statute, “[a] cause of action against a person arising from any act of that person in furtherance of the person’s right of petition or free speech under the United States or California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.”  Code of Civ. Proc. § 425.16(b)(1).  “As used in this section, ‘act in furtherance of a person’s right of petition or free speech under the United States or California Constitution in connection with a public issue’ includes: (1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law; (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law; (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest; (4) or any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.” Code of Civ. Proc. § 425.16(e).

“[T]he statutory phrase ‘cause of action . . . arising from’ means simply that the defendant’s act underlying the plaintiff’s cause of action must itself have been an act in furtherance of the right of petition or free speech.  [Citations.]  In the SLAPP context, the critical point is whether the plaintiff’s cause of action itself was based on an act in furtherance of the defendant’s right of petition or free speech.”  City of Cotati v. Cashman (2002) 29 Cal. 4th 69, 78.  The trial court engages in a two-step process in determining whether an action is a SLAPP. “The moving defendant’s burden is to demonstrate that the act or acts of which the plaintiff complains were taken ‘in furtherance of the [defendant]’s right of petition or free speech under the United States or California Constitution in connection with a public issue,’ as defined in the statute.  (§ 425.16, subd. (b)(1).) If the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim.”  Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal. 4th 53, 67.

“In deciding whether the ‘arising from’ requirement is met, a court considers ‘the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.’  (§ 425.16, subd. (b).)”  Cashman, supra, 29 Cal. 4th at p. 79.  “[I]t is the principal thrust or gravamen of the plaintiff’s cause of action that determines whether the SLAPP statute applies [citation], and when the allegations referring to arguably protected activity are only incidental to a cause of action based essentially on nonprotected activity, collateral allusions to protected activity should not subject the cause of action to the SLAPP statute.” Martinez v. Metabolife Int’l, Inc. (2003) 113 Cal. App. 4th 181, 188; In re Episcopal Church Cases (2009) 45 Cal. 4th 467, 477.  “The SLAPP statute’s definitional focus is not the form of the plaintiff’s cause of action but, rather, the defendant’s activity that gives rise to his or her asserted liability – and whether that activity constitutes protected speech or petitioning.”  Navellier v. Sletten (2002) 29 Cal. 4th 82, 92.

Arising From Protected Activity – The first prong of the analysis is whether the FAC’s claims arise out of a protected activity.  Whether the conduct sued upon arises from protected activity is determined from the gravamen of Plaintiffs’ cause of action or claim.  See Anderson v. Geist (2015) 236 Cal. App. 4th 79, 85 (“[I]t is the principal thrust or gravamen of the plaintiff’s cause of action that determines whether the SLAPP statute applies, and when the allegations referring to arguably protected activity are only incidental to a cause of action based essentially on nonprotected activity, collateral allusions to protected activity should not subject the cause of action to the SLAPP statute”) (internal citations omitted); see also Trilogy at Glen Ivy Maintenance Association v. Shea Homes, Inc. (2015) 235 Cal. App. 4th 361; Optional capital, Inc. v. Das Corporation (2014) 222 Cal. App. 4th 1388.

Mission contends that the entire action is predicated on their previous filing of an unlawful detainer action, which resulted in Plaintiffs eviction from the Property on or around October 2018.  Such petitioning activities are expressly covered under Code of Civ. Proc. §425.16(e)(1) & (2), which permit a special motion to strike to issue for litigation based on “any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law,” or “any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law.”  In further support of this argument, Mission relies on a series of cases that have generally held that litigation filed in retaliation for eviction is subject to a special motion to strike.  See Feldman v. 1100 Park Lane Associates (2008) 160 Cal. App. 4th 1467 (the gravamen of the allegations was that the landlords used judicial proceedings to wrongfully evict plaintiffs from their property); Birkner v. Lam(2007) 156 Cal. App. 4th 275 (an action based on a landlord’s refusal to rescind a notice to terminate a plaintiff’s tenancy is a communication constituting protected activity under §425.16).

On review of the FAC, it appears that Mission has failed to establish that the gravamen of the FAC is predicated on a protected activity pursuant to Code of Civ. Proc. §425.16(e)(1) & (2).  Specifically, it appears that the gravamen of the compliant is that Plaintiffs engaged in certain repair and replacement activities on the Property that resulted in $80,000.00 spent by Plaintiffs in the Property owned by Defendants.  Nothing in the FAC appears to relate to the previous unlawful detainer action, nor does it appear to be predicated on any privileged communications by Mission.  As such, Mission’s argument that the action is predicated on the filing of the unlawful detainer action is unavailing, and does not serve as a basis for granting a special motion to strike.

Demurrer – The grounds for a demurrer must appear on the face of the pleading or from judicially noticeable matters.  Code Civ. Proc. §430.30,(a); Blank v. Kirwan (1985) 39 Cal. 3d 311, 318.  Concerning the legal sufficiency of a pleading, the sole issue on demurrer is whether the facts pleaded, if true, state a valid cause of action – i.e., if the complaint pleads facts that would entitle the plaintiff to relief.  LiMandri v. Judkins (1997) 52 Cal. App. 4th 326, 339.

A general demurrer admits the truth of all factual, material allegations properly pled in the challenged pleading, regardless of possible difficulties of proof.  Blank,supra, 39 Cal. 3d at p. 318.  Thus, no matter how unlikely or improbable, plaintiff’s allegations must be accepted as true for the purpose of ruling on the demurrer. Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal. App. 3d 593, 604.  Nevertheless, this rule does not apply to allegations expressing mere conclusions of law, or allegations contradicted by the exhibits to the complaint or by matters of which judicial notice may be taken.  Vance v. Villa Park Mobilehome Estates (1995) 36 Cal. App. 4th 698, 709.  A general demurrer does not admit contentions, deductions, or conclusions of fact or law alleged in the complaint; facts impossible in law; or allegations contrary to facts of which a court may take judicial notice.  Blanksupra, 39 Cal. 3d at p. 318.

Pursuant to Code Civ. Proc. §430.10(e) and (f), the party against whom a complaint has been filed may object by demurrer to the pleading on the grounds that the pleading does not state facts sufficient to constitute a cause of action or that the pleading is uncertain, ambiguous and/or unintelligible.  It is an abuse of discretion to sustain a demurrer if there is a reasonable probability that the defect can be cured by amendment.  Schifando v. City of Los Angeles (2003) 31 Cal. 4th 1074, 1082, as modified (Dec. 23, 2003).

Meet and Confer – Prior to filing a demurrer, the demurring party is required to satisfy their meet and confer obligations pursuant to Code of Civ. Proc. §430.41, and demonstrate that they so satisfied their meet and confer obligation by submitting a declaration pursuant to Code of Civ. Proc. §430.41(a)(2) & (3).

The Court has reviewed the Declaration of Raymond Zakari, which satisfies Richard and Hong’s meet and confer obligations under the statute.

First Cause of Action (Breach of Implied Contract) – To plead breach of contract, the Plaintiff must allege (1) the existence of a contract, (2) plaintiff’s performance or excuse for non-performance, (3) defendant’s breach, and (4) resulting damage to plaintiff.  Lortz v. Connell (1969) 273 Cal. App. 2d 286, 290.  As for the first element, alleging the existence of a contract has its own additional pleading and proof requirements, or elements.  These are (1) parties capable of contracting, (2) their consent, (3) a lawful object, and (4) sufficient cause or consideration.  Civ. Code §1550; O’Byrne v. Santa Monica-UCLA Medical Center(2001) 94 Cal. App. 4th 797, 806-807.  Contracts may be written or oral, except when specified by law such as contracts falling under the statute of frauds.  Civ. Code §§1622 & 1624.

On review of the FAC, the Court concurs with Richard and Hong in that Plaintiffs have failed to establish a cause of action for breach of contract, as Plaintiffs have failed to establish the existence of a contract under the standards stated above.  The Court notes that the FAC identifies two possible contracts in (1) improvements to the Property, and (2) the option to purchase the Property.

As to the first theory of contract, the FAC is bereft of any factual allegations sufficient to establish the existence of a contract between themselves and Richard and Hong as to the $80,000 in alleged improvements, and the First Cause of Action cannot be maintained on that basis.

As to the second theory of contract, the Lease Agreement attached as Exhibit A to the FAC invalidates Grigoryan’s purchase option on its face by and through Grigoryan’s violation of the lease agreement related to subletting and assignment of rights.  Exhibit A, pp. 1 (“Both parties agree that this lease will be a lease with option to purchase above described property after a 3 years tenancy… Any failure of compliance or performance by Renter shall allow Landlord to forfeit Renter’s right to possession.”); pp. 1 (“J. Maximum Occupancy 1 Adult & 3 Children [¶] K. Named Renter(s) Albert Grigoryan [¶] Three minor children age five years old”); pp. 3, ¶5 (“The Premises shall not be occupied by more than the maximum number of ‘Agreement’ occupants set out in Section J, unless required by law, nor by any person other than the Named Renter set out in Section K without the advance written consent of the Landlord and at the additional rent set out in Section L or prescribed by Law.  Renter’s right to possession shall not be assigned or sublet.”); FAC, ¶16 (“PLAINTIFFS and each of them were sub-tenants of Grigoryan and occupied the Property from August 1, 2015 through November 2018.”); ¶17 (“On or about August 3, 2016, Grigoryan assigned his option in writing to purchase the Property to PLAINTIFFS giving them a ‘second option.’”).

As such, the allegations in the FAC establish that Grigoryan breached the Lease Agreement prior to his purported assignment of the option, rendering any assignment of his right to exercise a purchase option under the Lease Agreement without legal effect upon Richard and Hong’s decision to forfeit Grigoryan’s option under the express terms of the Lease Agreement.  To the extent that Plaintiffs argue in their opposition that Richard and Hong’s failure to object to Grigoryan’s assignment of the purchase option reflects their consent thereto (citing to FAC ¶¶18 & 19), the Court notes that silence does not imply consent to a contract.  See, e.g., Wold v. League of the Cross, Inc. (1931) 114 Cal. App. 474, 479 (“Ordinarily mere silence or inaction in the face of the offer of a contract cannot amount to an acceptance.  The circumstances must be such as to impose upon the offeree a duty to speak if he is to be held bound to a contract by remaining mute. ‘Silence alone does not give consent, even by estoppel, for there must not only be the right, but the duty, to speak before the failure so to do can estop a person from afterward setting up the truth.’”).  Here, Defendants are permitted to rely on the express terms of their written contract with Grigoryan making assignments invalid, and need not object under such circumstances.

Accordingly, the Court will sustain the demurrer to the First Cause of Action.

Second Cause of Action (Promissory Estoppel) – A promise that the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.  This principle, known as the doctrine of promissory estoppel, employs equitable principles to satisfy the requirement that consideration must be given in exchange for the promise sought to be enforced. The doctrine has as elements the following:  (1) a clear promise, (2) reliance, (3) substantial detriment, and (4) damages measured by the extent of the obligation assumed and not performed.  Toscano v. Greene Music (2004) 124 Cal. App. 4th 685, 692.

As with the First Cause of Action, Plaintiffs fail to establish that any promise was made by Richard and Hong to Plaintiffs regarding a purchase option for the Property.  As the pleading and arguments are substantively identical to the First Cause of Action for Breach of Contract, and are based on the same invalid assignment of an option by Grigoryan and silence by Richard and Hong, the Court adopts its analysis from the prior cause of action.

Accordingly, the demurrer will be sustained as to the Second Cause of Action.

Third Cause of Action (Quantum Meruit) – “Quantum meruit refers to the well-established principle that ‘the law implies a promise to pay for services performed under circumstances disclosing that they were not gratuitously rendered. [Citation].  To recover in quantum meruit, a party need not prove the existence of a contract [Citations], but it must show the circumstances were such that ‘the services were rendered under some understanding or expectation of both parties that compensation therefor was to be made [Citations].”  Chodos v. Borman (2014) 227 Cal. App. 4th 76, 96 (quoting Huskinson & Brown v. Wolf (2004) 32 Cal. 4th 453, 458).

Plaintiffs argue in opposition to the demurrer that they have satisfied this standard by alleging that “…Defendants were aware of the improvements and repairs and both Plaintiffs and Defendants understood and expected that Plaintiff would be compensated for those improvements and repairs.”  Opposition, 7: 19-21 (quoting FAC ¶17).  These allegations, however, remain deficient, as they are not allegations of facts, but are conclusions of law.  Seee.g., Kelly v. William Morrow & Co.(1986) 186 Cal. App. 3d 1625, 1630 (“A fact is: ‘[Something] that has actual existence . . . an occurrence, quality, or relation the reality of which is manifest in experience or may be inferred with certainty . . . .’ [Citation].”).  Merely rephrasing and reciting the legal standard required to allege the elements of a cause of action is insufficient to survive demurrer as such an exercise is only the recitation of conclusions of law; occurrences, actions, and events must also be pled.

Accordingly, the Court will sustain the demurrer to the Third Cause of Action.

Fourth Cause of Action (Declaratory Relief) – An action for declaratory relief the complaint is sufficient if it sets forth facts showing the existence of an actual controversy relating to the legal rights and duties of the respective parties under a contract and requests that the rights and duties be adjudged.  City Of Tiburon v. Northwestern Pac. R.R. Co. (1970) 4 Cal. App. 3d 160, 170; see Code of Civ. Proc. §1060 (identifying the remedy of declaratory relief).  If these requirements are met, the court must declare the rights of the parties whether or not the facts alleged establish that the plaintiff is entitled to a favorable declaration.  Declaratory relief is a broad remedy, and the rule that a complaint is to be liberally construed is particularly applicable to one for declaratory relief.

Further, a demurrer is a procedurally inappropriate method for disposing of a complaint for declaratory relief.  Lockheed Martin Corp. v. Continental Ins. Co.(2005) 134 Cal. App. 4th 187, 221.  This is based on the reasoning that an order sustaining the demurrer would leave the parties where they were, with no binding determination of their rights, to await an actual breach and ensuing litigation.  This would defeat a fundamental purpose of declaratory relief, which is to remove uncertainties as to legal rights and duties before breach and without the risks and delays that it involves.  The object of declaratory relief is not necessarily a beneficial judgment; instead, it is a determination, favorable or unfavorable, that enables the plaintiff to act with safety.  This reasoning has established the rule that the defendant cannot, on demurrer, attack the merits of the plaintiff’s claim.  Accordingly, a complaint is sufficient if it shows an actual controversy; it need not show that plaintiff is in the right.

The Fourth Cause of Action for Declaratory Relief is predicated entirely on the existence of the other causes of action, and Plaintiffs assert no independent basis for declaratory relief other than the alleged implied contract, estoppel, or quantum meruit bases previously alleged in the FAC.  As the Court’s tentative determination of the instant demurrer would resolve the three other causes of action, there would be no remaining controversy upon which a declaration of rights would need to occur.

Accordingly, the Court will sustain the demurrer to the Fourth Cause of Action.

Leave to Amend – While there is no possibility that Plaintiffs can amend their FAC to allege valid causes of action on the claims sounding in contract pursuant to the standards described above, the same is not true for the quantum meruit cause of action.  As quantum meruit only requires some factual basis for inferring that the parties had an understanding that Plaintiffs were undertaking certain projects with some expectation of remuneration from Defendants, and Plaintiffs have attempted to comply with this Court’s prior ruling by and through the FAC, the Court considers leave to amend proper under these circumstances.

As such, the Court will sustain the First and Second Causes of Action without leave to amend, and sustain the Third and Fourth Causes of Action with leave to amend.

Compel Further – The Court has reviewed the case file, and cannot identify any further briefing or notices supplied by either party informing the Court of the status of the discovery responses.  As such the Court requests an update on the status of discovery responses, and the Court will either deem the motions mooted by the provision of full, verified, and code-compliant responses, or else will issue an order granting the motions pursuant to the Court’s April 12, 2019, Minute Order.

RULING:

  1. Deny Mission’s Special Motion to Strike;
  2. Sustain Richard and Hong’s demurrer to the First Amended Compliant (a) without leave to amend on the First and Second Causes of Action, and (b) with leave to amend on the Third and Fourth Causes of Action; and
  3. Either deem Richard and Hong’s motions to compel further discovery responses moot, or else grant the motions pursuant to the Court’s April 12, 2019, Minute Order.—In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records.ORDERDefendants Richard Denogean and Hong Denogean Demurrer and Motions to Compel Further Discovery responses came regularly for hearing on July 26, 2019, together with Defendant Mission Properties’ Special Motion to Strike pursuant to Code of Civ. Proc. §425.16, with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows:DEFENDANT MISSION PROPERTIES’ SPECIAL MOTION TO STRIKE IS DENIED;MOTIONS TO COMPEL FURTHER ARE EITHER MOOTED PURSUANT TO PLAINTIFFS PROVIDING CODE-COMPLAINT RESPONSES OR GRANTED UPON PLAINTIFFS’ FAILURE TO PROVIDE CODE-COMPLAINT RESPONSES.
  4. DEFENDANTS RICHARD DENOGEAN AND HONG DENOGEAN’S DEMURRER IS SUSTAINED WITHOUT LEAVE TO AMEND AS TO THE FIRST AND SECOND CAUSES OF ACTION, AND WITH LEAVE TO AMEND AS TO THE THIRD AND FOURTH CAUSES OF ACTION; AND