JPMorgan Chase Bank NA vs Logan Schubert

Case Number

24CV00885

Case Type

Hearing Date / Time

Mon, 05/20/2024 - 10:00

Nature of Proceedings

Motion: Dismiss

Tentative Ruling

JPMorgan Chase Bank, N.A. v. Logan Schubert     

Limited Civil Case No. 24CV00885

Hearing Date: May 20, 2024                                                    

HEARING:              Plaintiff’s Motion To Dismiss

                                                           

ATTORNEYS:        For Plaintiff JPMorgan Chase Bank, N.A.: Donald Sherrill, Alexander Balzer Carr, Hunt & Henriques, LLP

                                    For Defendant Logan Schubert: Self Represented

TENTATIVE RULING:

The motion of defendant Logan Schubert to dismiss the complaint of plaintiff is denied. Defendant shall file and serve his answer to plaintiff’s complaint on or before June 4, 2024.

Background: 

On February 20, 2024, plaintiff JPMorgan Chase Bank, N.A., filed this limited civil action against defendant Logan Schubert alleging causes of action for common counts based on an open book account and an account stated. (See Compl., ¶ CC-1(a)(1) & (2).) As alleged in the complaint, within the last four years, defendant became indebted to plaintiff on an open book account for money due and because an account was stated in writing between plaintiff and defendant in which it was agreed that defendant was indebted to plaintiff. (Ibid.) The reasonable value due from and unpaid by defendant despite plaintiff’s demand is $13,975.52. (Id. at ¶ CC-2.)

On March 27, 2024, in response to the complaint, defendant filed five documents: (1) a “Motion To Dismiss” (the motion); (2) an “Answer … and Memorandum Of Law In Support” (the answer); (3) a “List Of Exhibits In Support Of Answer, Motion To Dismiss, and Memorandum Of Law In Support” (the exhibits); (4) an “Affidavit In Support Of Answer, Motion To Dismiss, And Memorandum Of Law In Support” (the affidavit); and (5) an “Affidavit Of Notice [of Discharge]” (the notice).

Notwithstanding the manner in which the documents filed by defendant and further described above are titled, in the answer and the motion to dismiss, defendant requests an order under Rule 12(b)(6) of the Federal Rules of Civil Procedure dismissing plaintiff’s complaint on the grounds that “payment was already tendered, in accord with Title 48 C.F.R. Ch. 1, §53.228, UCC 3-307 and CISG.” (See Motion To Dismiss at p. 1, ll. 18-25; Answer at p. 5, ll. 16-25.) Defendant further asserts that, because a “discharge” was previously served and tendered, there exists a question as to whether the court has subject matter jurisdiction to entertain the present action because, defendant argues, there exists no present controversy or cause of action based on the discharge or settlement previously tendered to plaintiff by defendant. (Answer at p. 6, ll. 9-14.)

Plaintiff has filed an opposition to the motion to dismiss of defendant.

Analysis:

Under Rule 12 of the Federal Rules of Civil Procedure, a party may file a pretrial motion to challenge an opposing party’s pleadings by raising defenses based on a lack of subject matter jurisdiction and a failure to state a claim upon which relief can be granted. (Fed. Rules Civ.Proc., rule 12(b)(1) & (6), 28 USC.) Notwithstanding whether the Federal Rules of Civil Procedure permit a party to raise these defenses by filing a motion to dismiss, the present action is brought in state court. Therefore, the Federal Rules of Civil Procedure do not apply here. (Quiles v. Parent (2017) 10 Cal.App.5th 130, 145 [also noting that state procedural rules apply to federal causes of action as well].)

Under the California Code of Civil Procedure, a motion to dismiss is expressly permitted on certain grounds including those specified in Code of Civil Procedure section 581. (Note: Undesignated code references shall be to the Code of Civil Procedure unless otherwise indicated.) Under subdivision (f) of section 581, the court may dismiss a complaint if either party moves for dismissal after a demurrer is sustained without leave to amend or with leave to amend and the plaintiff fails to amend within the time permitted. (Code Civ. Proc., § 581, subd. (f)(1) & (2).) Moreover, the provisions of section 581 “shall not be deemed to be an exclusive enumeration of the court’s power to dismiss an action or dismiss a complaint as to a defendant.” (Code Civ. Proc., § 581, subd. (m).)

Considering the arguments asserted by defendant in the documents entitled as an answer and a motion to dismiss, and because a motion to dismiss filed under Rule 12(b)(6) of the Federal Rules of Civil Procedure is closely related in substance and functions in effect as a demurrer filed in state court, the court will construe the documents filed by defendant, collectively, as a general demurrer filed for the purpose of obtaining a determination as to whether the complaint filed by plaintiff states facts sufficient to constitute a cause of action. (Code Civ. Proc., § 430.10, subd. (e); Laguna Village, Inc. v. Laborers’ Internat. Union of North America (1983) 35 Cal.3d 174, 182 [also noting that the “policy favoring resolution of disputes on their merits suggests flexibility rather than mechanical adherence to motion and pleading labels”]; see also Code Civ. Proc., § 128, subds. (a)(3) & (8); Cottle v. Superior Court (1992) 3 Cal.App.4th 1367, 1377-1378 [discussing the court’s inherent powers to fashion procedures to ensure the orderly and efficient conduct of its business].)

In ruling on a demurrer, the court determines whether the complaint states a cause of action. (Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125.) The pleading subject to demurrer is given a reasonable interpretation and is read as a whole, with all its parts in their context. (Ibid.) A demurrer assumes the truth of properly pleaded material allegations, but not of contentions, deductions, or conclusions of fact or law. (Ibid.) The court also accepts as true facts that may be inferred from those expressly alleged and facts appearing in exhibits attached to the complaint. (McMahon v. Craig (2009) 176 Cal.App.4th 1502, 1509; Mead v. Sanwa Bank California (1998) 61 Cal.App.4th 561, 567.) “If the complaint states a cause of action under any theory, regardless of the title under which the factual basis for relief is stated, that aspect of the complaint is good against a demurrer.” (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38.)

As further discussed above, the claim alleged by plaintiff in the complaint is based on an open book account and an account stated in writing. The elements of these claims are effectively similar but not identical. (See Leighton v. Forster (2017) 8 Cal.App.5th 467, 491 [setting forth the essential elements of an account stated]; State Compensation Insurance Fund v. ReadyLink Healthcare, Inc. (2020) 50 Cal.App.5th 422, 449 [setting forth the elements of a cause of action for open book account].)

To the extent the present motion is directed solely to the cause of action for common counts alleged in the complaint (see Answer at p. 3, ll. 4-15 [effectively directing the present motion to a common count cause of action], “[t]he common law, from which we derive our forms of pleading known as the ‘common counts,’ knew a count for ‘money lent’ which was the appropriate form in which to state a cause of action for money loaned.” (Jones v. Re–Mine Oil Co. (1941) 47 Cal.App.2d 832, 843.) To state a common count for money lent, the plaintiff need only allege that the defendant is indebted in a certain sum for money loaned by the plaintiff and that the defendant has not repaid the money. (Pleasant v. Samuels (1896) 114 Cal. 34, 36-38.) If a plaintiff specifically pleads facts upon which the common count is based, a common count cause of action is subject to demurrer. (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 601.)

Though defendant agrees and effectively does not dispute that he became indebted to plaintiff for a specified sum and that the debt alleged in the complaint is owed for some consideration, defendant disputes that plaintiff has not been paid because defendant claims that he tendered payment and discharged the debt as set forth in the notice. (See Answer at pp. 3-4 & p. 5, ll. 5-14 [disputing only “element three” of the common count cause of action on the grounds that the debt was discharged].) To support his contention, defendant submits the affidavit, the notice, the exhibits, and what defendant characterizes as “bonds for discharge” of the subject debt. (Id. at pp. 5-7 & 13-16.) Because defendant has paid or discharged the debt alleged in the complaint, defendant argues, plaintiff has failed to state a claim upon which relief can be granted. (Id. at p. 5.)

The role of a demurrer is limited to testing the legal sufficiency of a complaint considering only those matters which are alleged on the face of the pleading or subject to judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994; Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The “face of the complaint” includes the allegations of the challenged pleading, matters shown in exhibits attached thereto and incorporated by reference, or matters appearing in a superseded complaint in the same action. (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94.) “[A] demurrer will be sustained only where the pleading is defective on its face.” (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 459.)

The face of the complaint does not disclose whether defendant paid or otherwise discharged the debt allegedly owed to plaintiff. In addition, the exhibits and other evidence offered by defendant to support his contentions and arguments constitute matters extrinsic to the complaint which the court cannot consider on demurrer. (See Ion Equipment Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881 [error for court to consider matters raised in memorandum and not otherwise pleaded]; Executive Landscape Corp. v. San Vicente Country Villas IV Assn. (1983) 145 Cal.App.3d 496, 499-500 [also noting that the court is precluded from weighing disputed facts on demurrer].) Furthermore, on demurrer, the court does not consider whether or not a plaintiff can prove his allegations. (Berg & Berg Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1034.) For these reasons, and for present purposes only, defendant’s motion is without merit. To the extent defendant contends that he has paid or otherwise caused to be discharged the debt alleged in the complaint, defendant may raise any appropriate defense in his answer to the complaint.

Defendant offers no further reasoned argument demonstrating that the complaint otherwise fails to state facts sufficient to constitute a cause of action for common counts, open book account, or an account stated. Therefore, and for all reasons discussed above, the court will deny defendant’s motion for an order dismissing the complaint and order defendant to file and serve his answer to plaintiff’s complaint on or before June 4, 2024.