CNR Consulting Services, Inc. dba Party Plan Solutions v. Grace & Heart, LLC, et al

Case Number

23CV05752

Case Type

Hearing Date / Time

Wed, 07/02/2025 - 10:00

Nature of Proceedings

1. Defendants’ Demurrer to Plaintiff’s First Amended Complaint; 2. Defendants’ Motion to Strike Portions of Plaintiff’s First Amended Complaint

Tentative Ruling

For Plaintiff CNR Consulting Services, Inc. dba Party Plan Solutions: Ron Chow, Gardener Riechmann & Chow.

For Defendants Grace & Heart, LLC and Suzanne Garrett: Geoffrey G. Melkonian, Law Offices of Geoffrey G. Melkonian.

                       

RULING

For the reasons set forth below:

1. Defendants’ demurrer to Plaintiff’s first amended complaint is sustained with leave to amend. Plaintiff’s second amended complaint shall explain the discrepancy between paragraph one of the original complaint and paragraph one of the first amended complaint, as well as correct the other deficiencies discussed below.
2. Defendants’ motion to strike portions of Plaintiff’s first amended complaint is denied, without prejudice, as moot.
3. Plaintiff shall file and serve its second amended complaint no later than July 16, 2025.

Background

This action commenced on December 28, 2023, by the filing of the original complaint by Plaintiff CNR Consulting Services, Inc. dba Party Plan Solutions (“Plaintiff”) against Defendants Grace & Heart, LLC (“Grace & Heart”) and Suzanne Garrett (“Garrett”)(collectively “Defendants”), for: (1) Breach of Contract, (2) Open Book Account, (3) Account Stated, and (4) Quantum Meruit.

As alleged in the original complaint:

“Plaintiff is, and at all times herein mentioned was, a Virginia Corporation, qualified to do business in California.” (Compl., ¶ 1, italics added.)

“Plaintiff is informed and believes and thereon alleges that Defendant, GRACE & HEART, LLC, a California limited liability company; SUZANNE GARRETT, an individual, is and was an individual or company residing within this district.” (Compl., ¶ 2.)

“Plaintiff alleges that on or about July 20, 2015, a written agreement was made between Plaintiff and Defendants, and each of them. By the terms of said agreement, Plaintiff provided services and/or goods to Defendants. Defendants promised to pay Plaintiff for all services and/or goods provided. A copy of this agreement is attached hereto as Exhibit “A” and made a part hereof by this reference.” (Compl., ¶ 5.) [Note: Exhibit A is a contract between Plaintiff and Grace & Heart. It is signed by Garrett as “owner/president” of Grace & Heart.]

On October 4, 2022, Defendants breached the contract by failing to pay for services which had been provided on credit, at their insistence and request, in the amount of $31,537.50. (Compl., ¶ 6.)

“Plaintiff is entitled to attorney fees according to proof either by an agreement or [] by statute.” (Compl., ¶ 9.)

Following the filing of a demurrer and a motion to strike by Defendants, on April 2, 2025, Plaintiff filed its operative first amended complaint (“FAC”) against the same Defendants and alleging the same causes of action.

The FAC is identical to the original complaint except that paragraph 1 is replaced with: “Plaintiff is, at all times herein mentioned was, a Virginia Corporation, conducting only interstate business with no presence in the State of California.” (FAC, ¶ 1, italics added.) Additionally, although still alleged that the agreement is attached as Exhibit A, there is no attachment to the FAC.

Defendants now demur to the FAC on the grounds that Plaintiff does not have the capacity to sue, all four causes of action contained in the FAC are uncertain, and the first cause of action does not allege sufficient facts to constitute a cause of action for breach of contract as to Garrett.

Plaintiff opposes the demur.

Defendants also move to strike: (1) Paragraph 9, at page 2, line 1, which reads, “Plaintiff is entitled to attorney fees according to proof either by an agreement or [] by statute,” and prayer for damages at page 4, lines 24-25 which reads, “For reasonable attorney’s fees according to proof.”

Plaintiff has not filed opposition or any other response to the motion to strike.

Analysis

Demurrer

“When any ground for objection to a complaint, cross-complaint, or answer appears on the face thereof, or from any matter of which the Court is required to or may take judicial notice, the objection on that ground may be taken by a demurrer to the pleading.” (Code Civ. Proc., § 430.30, subd. (a).) “Our consideration of the facts alleged includes ‘those evidentiary facts found in recitals of exhibits attached to [the] complaint.’ [Citation.]” (Alexander v. Exxon Mobil (2013) 219 Cal.App.4th 1236, 1250.)

“The party against whom a complaint or cross-complaint has been filed may object, by demurrer or answer as provided in Section 430.30, to the pleading on any one or more of the following grounds:

“(a) The Court has no jurisdiction of the subject of the cause of action alleged in the pleading.

“(b) The person who filed the pleading does not have the legal capacity to sue.

“(c) There is another action pending between the same parties on the same cause of action.

“(d) There is a defect or misjoinder of parties.

“(e) The pleading does not state facts sufficient to constitute a cause of action.

“(f) The pleading is uncertain. As used in this subdivision, “uncertain” includes ambiguous and unintelligible.

“(g) In an action founded upon a contract, it cannot be ascertained from the pleading whether the contract is written, is oral, or is implied by conduct.

“(h) No certificate was filed as required by Section 411.35.” (Code Civ. Proc., § 430.10.)

“[A] Court must treat a demurrer as admitting all material facts properly pleaded, it does not, however, assume the truth of contentions, deductions or conclusions of law.” (Travelers Indem. Co. of Connecticut v. Navigators Specialty Ins. Co. (2021) 70 Cal.App.5th 341, 358, citing Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.)

“To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the Plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.)

Defendants’ first argument is that Plaintiff does not have the legal capacity to sue. This argument is first based on the fact that the original complaint identified Plaintiff as “a Virginia Corporation, qualified to do business in California,” while the FAC Plaintiff makes an inconsistent allegation that it is “a Virginia Corporation, conducting only interstate business with no presence in the State of California.” (Orig. Compl., ¶ 1 & FAC, ¶ 1.) Defendants’ first argument appears to be that the original complaint is a judicial admission and that the Court should ignore the FAC allegation that Plaintiff only conducts interstate business.

“The doctrine of judicial admissions also does not apply to allegations in pleadings that have been superseded by amendments, especially where the initial pleading was not verified and the Court granted permission to file the amended pleading to correct a potentially damaging admission in the initial pleading that was the result of mistake, inadvertence, or inadequate knowledge of the facts.” (Minish v. Hanuman Fellowship (2013) 214 Cal.App.4th 437, 456.

Here, it is unclear why the original complaint alleged that Plaintiff was qualified to do business in California, while the FAC alleges that it only conducts interstate business, but Plaintiff will be given the opportunity to file an amended complaint that explains why there is a discrepancy.

If Plaintiff satisfactorily explains the discrepancy, and it is in fact only conducting interstate business, it has the legal capacity to sue in California.

“The right of a foreign corporation to sue to collect the purchase price of merchandise sold in interstate commerce is succinctly stated by the United States supreme Court in Sioux Remedy Co. v. Cope, 235 U. S. 197, 204: “ ‘We think that when a corporation goes into a state other than that of its origin to collect, according to the usual or prevailing methods, the purchase price of merchandise which it has lawfully sold therein in interstate commerce, it is there for a legitimate purpose of such commerce, and that the state cannot, consistently with the limitation arising from the commerce clause, obstruct or hamper the attainment of that purpose.’ ” (W.W. Kimball Co. v. Read (1919) 43 Cal.App. 342, 345–346.)

Defendants next argue that the FAC is ambiguous and unintelligible, and therefore uncertain.

“Demurrers for uncertainty under Code of Civil Procedure section 430.10, subdivision (e) are disfavored. [Citation.] “ ‘A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.’ ” [Citation.] A demurrer for uncertainty should be overruled when the facts as to which the complaint is uncertain are presumptively within the Defendant’s knowledge. [Citation.] (Chen v. Berenjian (2019) 33 Cal.App.5th 811, 822.)

While the FAC could be a bit more specifically drafted, it is not so uncertain that Defendants are unable to appreciate the gravamen of Plaintiff’s action. The demurrer will not be sustained based on Defendants’ uncertainty argument.

Defendants’ final argument is that Plaintiff has failed to state facts sufficient to constitute a cause of action for breach of contract against Garrett. The Court agrees.

As noted above, while indicating that the contract is attached to the FAC, it is not.

“A contract is an agreement to do or not do a certain thing.” (Civ. Code, § 1549.)

“It is essential to the existence of a contract that there should be:

              “1. Parties capable of contracting;

              “2. Their consent;

              “3. A lawful object; and,

              “4. A sufficient cause or consideration.” (Civ. Code § 1550.)

The essential elements of a cause of action for breach of contract are “(1) the contract; (2) the Plaintiff’s performance of the contract or excuse for nonperformance; (3) the Defendant’s breach; and (4) the resulting damage to the Plaintiff.” (Richman v Hartley (2014) 224 Cal. App. 4th 1182, 1186.)

“A contract is either express or implied.” (Civ. Code, § 1619.) “An implied contract is one, the existence and terms of which are manifested by conduct.” (Civ. Code, § 1621.)

Implied contractual terms ordinarily stand on equal footing with express terms. (See, e.g., Kahsmiri v. Regents of University of California (2007) 156 Cal.App.4th 809, 829.)

Typically, in a breach of contract action, Plaintiffs either set out the terms of a contract verbatim, or, more frequently, include a copy of the contract as an exhibit to the complaint. Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972 (Heritage), addresses this often-argued issue. Heritage does not require Plaintiffs to plead all terms of the contract verbatim or to include a copy of the contact as an exhibit to the complaint. Heritage specifically holds that a contract may be pleaded by its legal effect. “In order to plead a contract by its legal effect, Plaintiff must allege the substance of its relevant terms.” (Id., at p. 993, italics added.)

Here, Plaintiff neither included a copy of the contract as an exhibit to the complaint, nor does Plaintiff adequately plead the substance of its relevant terms with respect to Garrett. The contract that was attached to the original complaint may have been signed by Garrett, as “owner/president” of Grace & Heart, but it does not appear that, as an individual, she was a party to the contract. The complaint provides no statutory authority or legal theory that would make the breach of contract action good as against Garrett. Therefore, the demurrer based on this argument will be sustained with leave to amend.

Motion to Strike

“The Court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading.” (Code Civ. Proc., § 436.) “Irrelevant matter” includes a “demand for judgment requesting relief not supported by the allegations of the complaint.” (Code Civ. Proc., § 431.10, subds. (b)(3), (c).) “The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the Court is required to take judicial notice.” (Code Civ. Proc., § 437, subd. (a).)

“In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.)

“[J]udges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.” (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.)

As the demurrer is being sustained with leave to amend, the motion to strike will be denied without prejudice as moot. The Court will note, however, that Plaintiff did set forth a statutory basis for seeking attorney fees at paragraph 12 of the FAC.