This case was last updated from Los Angeles County Superior Courts on 09/05/2021 at 03:10:56 (UTC).

BEE INVESTMENT, INC., A CORPORATION VS LYNN KIM

Case Summary

On 07/25/2019 BEE INVESTMENT, INC , A CORPORATION filed a Contract - Other Contract lawsuit against LYNN KIM. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    *******5968

  • Filing Date:

    07/25/2019

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Other Contract

  • County, State:

    Los Angeles, California

 

Party Details

Plaintiffs and Cross Defendants

BEE INVESTMENT INC. A CORPORATION

BEE INVESTMENT INC.

LIM SHI YOUNG

CHUNG KENNY

JUNG JOON

Defendant and Cross Plaintiff

KIM LYNN AKA LYNN CHOI KIM AN INDIVIDUAL

Attorney/Law Firm Details

Plaintiff and Cross Defendant Attorneys

PARK DALE J

DEROSE RYAN JOSHUA

DEROSE RYAN

 

Court Documents

Notice of Case Reassignment and Order for Plaintiff to Give Notice

7/1/2021: Notice of Case Reassignment and Order for Plaintiff to Give Notice

Reply - REPLY REPLY TO OPPOSITION TO DEMURRERS TO THIRD AMENDED CROSS-COMPLAINT

7/13/2021: Reply - REPLY REPLY TO OPPOSITION TO DEMURRERS TO THIRD AMENDED CROSS-COMPLAINT

Minute Order - MINUTE ORDER (HEARING ON DEMURRER - WITHOUT MOTION TO STRIKE AS TO THE THIR...)

7/22/2021: Minute Order - MINUTE ORDER (HEARING ON DEMURRER - WITHOUT MOTION TO STRIKE AS TO THE THIR...)

Declaration - DECLARATION CROSS COMPLAINANT LYNNN KIMS RESPONSIVE DECLARATION TO OPPOSE EXPARTE REQUEST TO CONTINUE TRIAL

3/1/2021: Declaration - DECLARATION CROSS COMPLAINANT LYNNN KIMS RESPONSIVE DECLARATION TO OPPOSE EXPARTE REQUEST TO CONTINUE TRIAL

Unknown - (AMENDED)

8/17/2020: Unknown - (AMENDED)

Request for Judicial Notice

9/9/2020: Request for Judicial Notice

Notice of Ruling

8/7/2020: Notice of Ruling

Request for Judicial Notice

7/13/2020: Request for Judicial Notice

Minute Order - MINUTE ORDER (COURT ORDER)

7/9/2020: Minute Order - MINUTE ORDER (COURT ORDER)

Minute Order - MINUTE ORDER (COURT ORDER)

4/24/2020: Minute Order - MINUTE ORDER (COURT ORDER)

Amended Complaint - (AMENDED)

1/21/2020: Amended Complaint - (AMENDED)

Reply - REPLY IN SUPPORT OF MOTION TO STRIKE

1/23/2020: Reply - REPLY IN SUPPORT OF MOTION TO STRIKE

Request for Entry of Default / Judgment

12/4/2019: Request for Entry of Default / Judgment

Proof of Personal Service

12/4/2019: Proof of Personal Service

Notice of Rejection Default/Clerk's Judgment

12/18/2019: Notice of Rejection Default/Clerk's Judgment

Request for Judicial Notice

12/19/2019: Request for Judicial Notice

Other - - CHANGE OF ADDRESS

10/21/2019: Other - - CHANGE OF ADDRESS

Summons - SUMMONS ON CROSS COMPLAINT

10/21/2019: Summons - SUMMONS ON CROSS COMPLAINT

61 More Documents Available

 

Docket Entries

  • 12/15/2021
  • Hearing12/15/2021 at 10:00 AM in Department 24 at 111 North Hill Street, Los Angeles, CA 90012; Non-Jury Trial

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  • 12/02/2021
  • Hearing12/02/2021 at 09:30 AM in Department 24 at 111 North Hill Street, Los Angeles, CA 90012; Final Status Conference

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  • 08/03/2021
  • DocketAnswer (ANSWER TO THIRD AMENDED CROSS- COMPLAINT); Filed by Bee Investment, Inc. (Cross-Defendant); Kenny Chung (Cross-Defendant); Joon Jung (Cross-Defendant)

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  • 07/22/2021
  • Docketat 08:30 AM in Department 24; Hearing on Demurrer - without Motion to Strike - Held - Motion Granted

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  • 07/22/2021
  • DocketCertificate of Mailing for ((Hearing on Demurrer - without Motion to Strike as to the Thir...) of 07/22/2021); Filed by Clerk

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  • 07/22/2021
  • DocketMinute Order ( (Hearing on Demurrer - without Motion to Strike as to the Thir...)); Filed by Clerk

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  • 07/13/2021
  • DocketReply (REPLY TO OPPOSITION TO DEMURRERS TO THIRD AMENDED CROSS-COMPLAINT); Filed by Bee Investment, Inc. (Cross-Defendant); Kenny Chung (Cross-Defendant); Joon Jung (Cross-Defendant)

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  • 07/07/2021
  • DocketOpposition (of Demurrer to Third Amended Cross Complaint); Filed by Lynn Kim (Cross-Complainant)

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  • 07/01/2021
  • DocketNotice of Case Reassignment and Order for Plaintiff to Give Notice; Filed by Clerk

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  • 04/06/2021
  • Docketat 10:00 AM in Department 24; Jury Trial - Not Held - Advanced and Vacated

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75 More Docket Entries
  • 10/21/2019
  • DocketOrder on Court Fee Waiver (Superior Court); Filed by Clerk

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  • 10/21/2019
  • DocketAnswer; Filed by Lynn Kim (Defendant)

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  • 10/21/2019
  • DocketCross-Complaint; Filed by Lynn Kim (Cross-Complainant)

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  • 09/30/2019
  • DocketProof of Service by Substituted Service; Filed by Bee Investment, Inc. (Plaintiff)

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  • 09/03/2019
  • DocketDeclaration (of Non-Service); Filed by Bee Investment, Inc. (Plaintiff)

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  • 08/05/2019
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 07/25/2019
  • DocketNotice of Case Assignment - Unlimited Civil Case; Filed by Clerk

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  • 07/25/2019
  • DocketCivil Case Cover Sheet; Filed by Bee Investment, Inc. (Plaintiff)

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  • 07/25/2019
  • DocketSummons (on Complaint); Filed by Bee Investment, Inc. (Plaintiff)

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  • 07/25/2019
  • DocketComplaint; Filed by Bee Investment, Inc. (Plaintiff)

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Tentative Rulings

Case Number: 19STCV25968    Hearing Date: January 19, 2021    Dept: 24

Cross-Defendant Bee Investment Inc., Kenny Chung, and Joon Jung’s demurrer to the Second Amended Cross-Complaint is SUSTAINED as to the first cause of action without leave to amend and SUSTAINED with leave as to the second cause of action.

On July 25, 2019, Plaintiff Bee Investment Inc. (“BII”) filed a complaint against Defendant Lynn Kim (“Kim”), stating three causes of action for 1) breach of contract; 2) reimbursement; and 3) common counts – money had and received. The Complaint alleges that BII and Kim entered into a written independent contractor agreement wherein BII would be a real estate broker and Kim would be an associate-licensee (i.e. a real estate agent). On November 13, 2017, third-party Dewey Properties LLC filed a suit against BII and Kim regarding the sale and purchase of property located at 1057 S. Dewey Ave., Los Angeles (the “Property”). After the filing of the suit, BII and Kim entered into a second agreement in which they agreed that they will not claim to E&O insurance but instead will have Real Estate Risk Management coverage maximum $10,000.00 for the case, and that Kim would be responsible for payment of any and all amounts of any settlement. The parties settled the suit for $30,000.00. Thus, pursuant to the agreements, Kim was required to pay $20,000.00, plus attorneys’ fees and costs. Jenny Kang, another real estate agent, contributed 50% of the sum, leaving $28,589.00 for Kim to pay.  

On October 21, 2019, Kim answered and filed a cross-complaint against BII, Kenny Chung (“Chung”), Joon Jung (“Jung”), and Shi Young Lim (“Lim”). The operative Second Amended Cross-Complaint generally states that the second agreement was illegal and unconscionable. Kim also claims that Cross-Defendants entered into the agreement with Kim without disclosing the existence of the underlying suit. The SACC states three causes of action for: 1) negligence; 2) defective contract; and 3) breach of contract.

On September 9, 2020, BII, Chung and Jung (“Bee Defendants”) filed a demurrer to the SACC’s first and second causes of action. On November 30, 2020, Kim filed an opposition to Bee Defendants’ demurrer. On December 7, 2020, Bee Defendants flied a reply. 

Legal Standard

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (CCP §§ 430.30, 430.70.) At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) A “demurrer does not, however, admit contentions, deductions or conclusions of fact or law alleged in the pleading, or the construction of instruments pleaded, or facts impossible in law.” (S. Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732 [internal citations omitted].)

A special demurrer for uncertainty, CCP section 430.10(f), is disfavored and will only be sustained where the pleading is so bad that defendant cannot reasonably respond—i.e., cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him/her. (Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.) Moreover, even if the pleading is somewhat vague, “ambiguities can be clarified under modern discovery procedures.” (Ibid.)

Meet and Confer

Before filing a demurrer or motion to strike, the moving party must meet and confer in person or by telephone with the party who filed the pleading to attempt to reach an agreement that would resolve the objections to the pleading. (CCP §§ 430.41, 435.5.) Counsel’s declaration satisfies the meet and confer requirement. (Park Decl. ¶¶ 2-4.)

Request for Judicial Notice

Bee Defendant’s request for judicial notice is GRANTED. (Evid. Code § 452(d).)

First Cause of Action for Negligence

Bee Defendants demurrer to the first cause of action on the grounds that no duty is stated as to them. Further, none of the allegations support breach, causation or damages from the stated duty. 

The elements for negligence are: (1) a legal duty owed to the plaintiff to use due care; (2) breach of duty; (3) causation; and (4) damage to the plaintiff.  (County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal.App.4th 292, 318.) “Ordinarily, negligence may be alleged in general terms, without specific facts showing how the injury occurred, but there are ‘limits to the generality with which a plaintiff is permitted to state his cause of action, and . . . the plaintiff must indicate the acts or omissions which are said to have been negligently performed.  He may not recover upon the bare statement that the defendant’s negligence has caused him injury.’ [Citation].”  (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 527.) However, there is no requirement that plaintiff identify and allege the precise moment of the injury or the exact nature of the wrongful act. (Hahn, supra, 147 Cal.App.4th at 747.) The existence and scope of duty are questions of law for the court. (Artiglio v. Corning Inc. (1998) 18 Cal.4th 604, 61.)

The SACC’s allegations remain substantially similar to the FACC. Here, the SACC still allegs that licensed real estate brokers have a legal duty to supervise their agents, such as Kim, in the course of employment, citing to 10 CCR 2725. (SACC ¶¶ 12-14.) The SACC further alleges that Bee Defendants fell below this standard of care by exonerating themselves of their duties through their contracts. (SACC ¶ 15.)  

As discussed, the Court does not find that 10 CCR 2725 states any duty that runs from Bee Defendants to Kim. This regulation states:

A broker shall exercise reasonable supervision over the activities of his or her salespersons. Reasonable supervision includes, as appropriate, the establishment of policies, rules, procedures and systems to review, oversee, inspect and manage: 

(a) Transactions requiring a real estate license. 

(b) Documents which may have a material effect upon the rights or obligations of a party to the transaction. 

(c) Filing, storage and maintenance of such documents. 

(d) The handling of trust funds. 

(e) Advertising of any service for which a license is required. 

(f) Familiarizing salespersons with the requirements of federal and state laws relating to the prohibition of discrimination. 

(g) Regular and consistent reports of licensed activities of salespersons. 

The form and extent of such policies, rules, procedures and systems shall take into consideration the number of salespersons employed and the number and location of branch offices. 

A broker shall establish a system for monitoring compliance with such policies, rules, procedures and systems. A broker may use the services of brokers and salespersons to assist in administering the provisions of this section so long as the broker does not relinquish overall responsibility for supervision of the acts of salespersons licensed to the broker. 

Given the nature of the duties, the listed duties would run to the consumer, not the supervisee. Again, even if such duties ran to Kim, the SACC does not allege that Bee Defendants breached any duty found in 10 CCR 2725. The FACC only offers conclusory allegations to that end. (SACC ¶¶ 15-19.) The FACC does not explain how Bee Defendants’ failure to supervise their agents properly lead to Kim’s damages, which stem from allegedly illegal contracts or settlement agreement. 

Accordingly, Bee Defendant’s demurrer is SUSTAINED without leave to amend. Leave to amend will only be granted if Plaintiff provides sufficient facts that demonstrate a reasonable probability of successful amendment given the deficiencies discussed above. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 347.)

Second Cause of Action for Defective Contract

Bee Defendants demur to the second cause of action on the grounds that there are no factual allegations showing that the contracts were fraudulently formed or a defect in the consideration.

The Court interprets this cause of action as a declaratory relief request, where Kim seeks to invalidate the two contracts at issue due to unconscionability as to the first agreement and fraud as to the second. (CCP 1060; see SACC ¶¶ 21-38; Prayer ¶ 1.)

A plaintiff’s declaratory relief complaint must specifically allege that an actual, present controversy exists, and must state the facts of the respective claims concerning the disputed subject matter. (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 79.) The complaint will be found sufficient if it sets forth facts showing the existence of an actual controversy relating to the parties’ legal rights and duties, and requests the court to adjudge these rights and duties. (Ludgate Ins. Co. v. Lockheed Martin Corp. (2000) 82 Cal.App.4th 592, 606; Qualified Patients Ass’n v. City of Anaheim (2010) 187 Cal.App.4th 734, 751.) A declaratory relief claim should not be used to determine issues that are already engaged by other causes of action. (Hood v. Superior Court (1995) 33 Cal.App.4th 319, 324.) 

“Strictly speaking, 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 [disapproved on other grounds].) DeLaura

Here, the Court does not find sufficient facts demonstrating that the sought declaration would be necessary or proper. Kim alleges, in a conclusory manner, that the first agency agreement was unconscionable. (SACC ¶¶ 21-31.) First, the citation to Civ. Code section 1608 is unsupported by any facts alleged; there is no allegation as to the illegality of any consideration. Second, Kim does not allege any facts supporting any of the unconscionability factors, beyond the unilateral nature of the contract. (See Grand Prospect Partners, L.P. v. Ross Dress For Less, Inc. (2015) 232 Cal.App.4th 1332, 1345-1354.) More facts supporting unconscionability should be alleged.

As to the second contract, Kim pivots in opposition and states that the contract was procured by fraud. Kim asserts that Bee Defendants presented a blank piece of paper and demanded Kim to sign. This is unalleged. (See SACC ¶¶ 32-38.) If alleged, this would likely support a declaration invalidating the second contract for fraud. Therefore, the Court finds a reasonable probability of successful amendment.

Accordingly, Bee Defendant’s demurrer is SUSTAINED with leave to amend as to this cause.

Moving party is ordered to give notice.

Case Number: 19STCV25968    Hearing Date: September 02, 2020    Dept: 24

Defendant Lynn Kim’s motion for judgment on the pleadings is DENIED.

On July 25, 2019, Plaintiff Bee Investment Inc. (“BII”) filed a complaint against Defendant Lynn Kim (“Kim”), stating three causes of action for 1) breach of contract; 2) reimbursement; and 3) common counts – money had and received. The Complaint alleges that BII and Kim entered into a written independent contractor agreement wherein BII would be a real estate broker and Kim would be an associate-licensee (i.e. a real estate agent). On November 13, 2017, third-party Dewey Properties LLC filed a suit against BII and Kim regarding the sale and purchase of property located at 1057 S. Dewey Ave., Los Angeles (the “Property”). After the filing of the suit, BII and Kim entered into a second agreement in which they agreed that they will not claim to E&O insurance but instead will have Real Estate Risk Management coverage maximum $10,000.00 for the case, and that Kim would be responsible for payment of any and all amounts of any settlement. The parties settled the suit for $30,000.00. Thus, pursuant to the agreements, Kim was required to pay $20,000.00, plus attorneys’ fees and costs. Jenny Kang, another real estate agent, contributed 50% of the sum, leaving $28,589.00 for Kim to pay.

On October 21, 2019, Kim answered and filed a cross-complaint against BII, Kenny Chung (“Chung”), Joon Jung (“Jung”), and Shi Young Lim (“Lim”). The Cross-Complaint generally states that the second agreement was illegal and unconscionable. Kim also claims that Cross-Defendants entered into the agreement with Kim without disclosing the existence of the underlying suit.

On June 25, 2020, Kim filed a motion for judgment on the pleadings. On July 13, 2020, Plaintiff filed an opposition. On August 5, 2020, Kim filed a reply.

Legal Standard

A defendant’s motion for judgment on the pleadings may be made after the time to demur has expired and an answer has been filed. (CCP § 438(f).) A motion by a defendant may be made on the grounds that (1) the court “lacks jurisdiction of the subject of one or more of the causes of action alleged” or (2) the complaint or cross-complaint “does not state facts sufficient to constitute a cause of action against that defendant.” (CCP § 438(c).)

A motion for judgment on the pleadings has the same function as a general demurrer but is made after the time for demurrer has expired. Except as provided by statute, the rules governing demurrers apply. (See Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 999.) “A motion for judgment on the pleadings is akin to a general demurrer; it tests the sufficiency of the complaint to state a cause of action. [Citations.] The court must assume the truth of all factual allegations in the complaint, along with matters subject to judicial notice.” (See Wise v. Pacific Gas and Elec. Co. (2005) 132 Cal.App.4th 725, 738.)

Like a general demurrer, “ordinarily, a [motion for judgment on the pleadings] does not lie as to a portion of a cause of action, and if any part of a cause of action is properly pleaded, the [motion] will be overruled.” (Fire Ins. Exchange v. Superior Court (2004) 116 Cal.App.4th 446, 452.) In considering a motion for judgment on the pleadings, courts consider whether properly pled factual allegations—assumed to be true and liberally construed—are sufficient to constitute a cause of action. (Stone Street Capital, LLC v. Cal. State Lottery Com’n (2008) 165 Cal.App.4th 109, 116.)

Meet and Confer Requirement

Before filing a statutory motion for judgment on the pleadings, a moving party's counsel must meet and confer, in person or by telephone, with counsel for the party who filed the pleading subject to the judgment on the pleadings motion “for the purpose of determining if an agreement can be reached that resolves the claims to be raised in the motion for judgment on the pleadings.” (CCP § 439(a).)

Request for Judicial Notice

 

Plaintiff requests that the Court take judicial notice of the FACC. (Evid. Code § 452(d).) This request is GRANTED.

Discussion

Kim demurs to the first through third causes of action on the grounds that the contracts are illegal.

To allege a breach of contract, a plaintiff must plead the contract, plaintiff’s performance or excuse for non-performance, defendant’s breach, and damage to plaintiff therefrom. (Acoustics, Inc. v. Trepte Constr. Co. (1971) 14 Cal.App.3d 887, 913.) A pleader’s legal characterization of a contract is not controlling, particularly when the contract is attached to the pleading. (Morris v. Redwood Empire Bancorp (2005) 128 Cal.App.4th 1305, 1314, citing Barnett v. Fireman’s Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505.) However, courts will defer to plaintiffs’ reasonable interpretations. (Performance Plastering v. Richmond American Homes of Cal., Inc. (2007) 153 Cal.App.4th 659, 672.)

Kim argues that the contracts are illegal because they attempt to exonerate certain statutory duties between Kim and BII. Particularly, Kim cites to 10 CCR 2725, which provides in full:

A broker shall exercise reasonable supervision over the activities of his or her salespersons. Reasonable supervision includes, as appropriate, the establishment of policies, rules, procedures and systems to review, oversee, inspect and manage:

(a) Transactions requiring a real estate license.

(b) Documents which may have a material effect upon the rights or obligations of a party to the transaction.

(c) Filing, storage and maintenance of such documents.

(d) The handling of trust funds.

(e) Advertising of any service for which a license is required.

(f) Familiarizing salespersons with the requirements of federal and state laws relating to the prohibition of discrimination.

(g) Regular and consistent reports of licensed activities of salespersons.

The form and extent of such policies, rules, procedures and systems shall take into consideration the number of salespersons employed and the number and location of branch offices.

A broker shall establish a system for monitoring compliance with such policies, rules, procedures and systems. A broker may use the services of brokers and salespersons to assist in administering the provisions of this section so long as the broker does not relinquish overall responsibility for supervision of the acts of salespersons licensed to the broker.

The Court does not find that the above regulation makes the contracts at issue illegal as Kim asserts. Given the nature of the listed duties above, 10 CCR 2725 would be for the benefit of the consumer, not a supervisee. Even if such duties ran to Kim, the contracts do not attempt to abdicate any of these duties. Kim otherwise provides no substantive argument that the contracts are illegal or unconscionable.

Accordingly, Kim’s motion for judgment on the pleadings is DENIED.

Moving party is ordered to give notice.

Case Number: 19STCV25968    Hearing Date: August 04, 2020    Dept: 24

Cross-Defendant Shi Young Lim’s demurrer to the third cause of action is SUSTAINED without leave to amend.

Plaintiff/Cross-Defendants Bee Investment Inc., Kenny Chung and Joon Jung’s demurrer is SUSTAINED with 20 days leave to amend as to the first and second causes of action; SUSTAINED without leave as to the fourth cause of action; and OVERRULED as to the third cause of action.

On July 25, 2019, Plaintiff Bee Investment Inc. (“BII”) filed a complaint against Defendant Lynn Kim (“Kim”), stating three causes of action for 1) breach of contract; 2) reimbursement; and 3) common counts – money had and received. The Complaint alleges that BII and Kim entered into a written independent contractor agreement wherein BII would be a real estate broker and Kim would be an associate-licensee (i.e. a real estate agent). On November 13, 2017, third-party Dewey Properties LLC filed a suit against BII and Kim regarding the sale and purchase of property located at 1057 S. Dewey Ave., Los Angeles (the “Property”). After the filing of the suit, BII and Kim entered into a second agreement in which they agreed that they will not claim to E&O insurance but instead will have Real Estate Risk Management coverage maximum $10,000.00 for the case, and that Kim would be responsible for payment of any and all amounts of any settlement. The parties settled the suit for $30,000.00. Thus, pursuant to the agreements, Kim was required to pay $20,000.00, plus attorneys’ fees and costs. Jenny Kang, another real estate agent, contributed 50% of the sum, leaving $28,589.00 for Kim to pay.

On October 21, 2019, Kim answered and filed a cross-complaint against BII, Kenny Chung (“Chung”), Joon Jung (“Jung”), and Shi Young Lim (“Lim”). The operative First Amended Cross-Complaint (“FACC”) states five causes of action for 1) violation of Real Estate Commissioner’s Regulation 2725; 2) violation of Bus. & Prof. Code section 10176 and 10177; 3) fraud of material facts (in conspiracy); 4) abuse of process (in conspiracy); and 5) negligence. The Cross-Complaint generally states that the second agreement was illegal and unconscionable. Kim also claims that Cross-Defendants entered into the agreement with Kim without disclosing the existence of the underlying suit.

On February 28, 2020, Lim filed a demurrer to the third cause of action and motion to strike punitive damages against the FACC. On March 13, 2020, BII, Chung and Jung (“Bee Defendants”) filed a demurrer to the FACC. On June 26, 2020, Kim filed an opposition to Bee Defendants’ demurrer. On July 13, 2020, Bee Defendants flied a reply. On July 28, 2020, Lim filed a reply/notice of non-opposition.

Legal Standard

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (CCP §§ 430.30, 430.70.) At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) A “demurrer does not, however, admit contentions, deductions or conclusions of fact or law alleged in the pleading, or the construction of instruments pleaded, or facts impossible in law.” (S. Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732 [internal citations omitted].)

A special demurrer for uncertainty, CCP section 430.10(f), is disfavored and will only be sustained where the pleading is so bad that defendant cannot reasonably respond—i.e., cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him/her. (Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.) Moreover, even if the pleading is somewhat vague, “ambiguities can be clarified under modern discovery procedures.” (Ibid.)

Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof. (CCP § 435(b)(1); Cal. Rules of Court, Rule 3.1322(b).) The court may, upon a motion or at any time in its discretion and upon terms it deems proper: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (CCP §§ 436(a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [“Matter in a pleading which is not essential to the claim is surplusage; probative facts are surplusage and may be stricken out or disregarded”].)

 

Meet and Confer

Before filing a demurrer or motion to strike, the moving party must meet and confer in person or by telephone with the party who filed the pleading to attempt to reach an agreement that would resolve the objections to the pleading. (CCP §§ 430.41, 435.5.) The Court finds counsels’ declarations satisfactory. (DeRose Decl. ¶¶ 2-5; Park Decl., ¶ 3.)

Lim’s Demurrer to the Third Cause of Action

Lim demurrers to the third cause of action on the grounds that he is a not a party to the contract.

To allege a breach of contract, a plaintiff must plead the contract, plaintiff’s performance or excuse for non-performance, defendant’s breach, and damage to plaintiff therefrom. (Acoustics, Inc. v. Trepte Constr. Co. (1971) 14 Cal.App.3d 887, 913.) A pleader’s legal characterization of a contract is not controlling, particularly when the contract is attached to the pleading. (Morris v. Redwood Empire Bancorp (2005) 128 Cal.App.4th 1305, 1314, citing Barnett v. Fireman’s Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505.) However, courts will defer to plaintiffs’ reasonable interpretations. (Performance Plastering v. Richmond American Homes of Cal., Inc. (2007) 153 Cal.App.4th 659, 672.)

First, there is some ambiguity over which contracts are at issue here. In any event, the FACC and attached exhibit do not allege that Lim is party to any contract with Kim. The two contracts discussed in the FACC are: 1) the Independent Contractor Agreement (FACC ¶ 9); and 2) the settlement agreement/Agreement II (FACC ¶ 13). The FACC does not allege that Lim is a party to those contracts. The only allegation against Lim is that Bee and Chung unilaterally retained him without Kim’s consent, and that Kim never retained him. (FACC ¶ 57.)

This is insufficient to state a claim against Lim for breach of contract. Accordingly, Lim’s demurrer is SUSTAINED. Based on the allegations concerning the contracts, the Court is not inclined to grant leave unless Lim was a party to the contracts at issue. Leave to amend will only be granted if Plaintiff provides sufficient facts that demonstrate a reasonable probability of successful amendment given the deficiencies discussed. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 347.)

Lim’s motion to strike is MOOT per the ruling on demurrer.

Bee Defendants Demurrer: First Cause of Action for Negligence Per Se

 

Bee Defendants demurrer to the first cause of action on the grounds that no duty is stated as to them. Further, none of the allegations support breach, causation or damages from the stated duty.

The elements for negligence are: (1) a legal duty owed to the plaintiff to use due care; (2) breach of duty; (3) causation; and (4) damage to the plaintiff. (County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal.App.4th 292, 318.) “Ordinarily, negligence may be alleged in general terms, without specific facts showing how the injury occurred, but there are ‘limits to the generality with which a plaintiff is permitted to state his cause of action, and . . . the plaintiff must indicate the acts or omissions which are said to have been negligently performed. He may not recover upon the bare statement that the defendant’s negligence has caused him injury.’ [Citation].” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 527.) However, there is no requirement that plaintiff identify and allege the precise moment of the injury or the exact nature of the wrongful act. (Hahn, supra, 147 Cal.App.4th at 747.)

 

Under the doctrine of negligence per se, the plaintiff “borrows” statutes to prove the duty of care and standard of care. However, plaintiff must still demonstrate causation. (Quiroz v. Seventh Ave. Center (2006) 140 Cal.App.4th 1256, 1285 [negligence per se is not an independent cause of action]; California Service Station and Auto. Repair Ass’n v. Amer. Home Assur. Co. (1998) 62 Cal.App.4th 1166, 1180 [“the Evidence Code § 669 presumption of negligence applies only after determining that the defendant owes the plaintiff an independent duty of care.”].)

 

Here, the FACC alleges that licensed real estate brokers have a legal duty to supervise their agents, such as Kim, in the course of employment. (FACC 22.) The FACC specifically cites 10 CCR 2725, which provides in full:

A broker shall exercise reasonable supervision over the activities of his or her salespersons. Reasonable supervision includes, as appropriate, the establishment of policies, rules, procedures and systems to review, oversee, inspect and manage:

(a) Transactions requiring a real estate license.

(b) Documents which may have a material effect upon the rights or obligations of a party to the transaction.

(c) Filing, storage and maintenance of such documents.

(d) The handling of trust funds.

(e) Advertising of any service for which a license is required.

(f) Familiarizing salespersons with the requirements of federal and state laws relating to the prohibition of discrimination.

(g) Regular and consistent reports of licensed activities of salespersons.

The form and extent of such policies, rules, procedures and systems shall take into consideration the number of salespersons employed and the number and location of branch offices.

A broker shall establish a system for monitoring compliance with such policies, rules, procedures and systems. A broker may use the services of brokers and salespersons to assist in administering the provisions of this section so long as the broker does not relinquish overall responsibility for supervision of the acts of salespersons licensed to the broker.

The FACC further alleges that Bee Defendants fell below this standard of care by exonerating themselves of their duties through their contracts. (FACC ¶¶ 27-29, 34.)

Reviewing the cited duty, the Court cannot conclude that Bee Defendants owed such a duty to Kim. Given the nature of the duties, Bee Defendants appear correct that the listed duties would be for the benefit of the consumer, not the supervisee. Even if such duties ran to Kim, the FACC does not allege that Bee Defendants breached any duty found in 10 CCR 2725. The FACC only offers conclusory allegations to that end. (See FACC 34.) The FACC does not explain how Bee Defendants’ failure to supervise their agents properly lead to Kim’s damages, which stem from allegedly illegal contracts or settlement agreement.

Accordingly, Bee Defendant’s demurrer is SUSTAINED with leave to amend.

Bee Defendants Demurrer: Second Cause of Action for Illegal Contract

 

Bee Defendants demur to the second cause of action on the grounds that there are no allegations making the consideration unlawful or otherwise making the agreement illegal.

First, the Court agrees that the there refence to Civ. Code section 1608 is irrelevant to the issues presented in the FACC. The FACC does not allege that consideration fails as to any contract.

As to the substantive allegations, the FACC alleges that the first agency agreement illegally exonerated BII’s duty. (FACC ¶ 44.) Specifically, BII breached the “brokers duty” by having indemnification terms in their favor (FACC ¶¶ 44, 45) and retaining the sole authority to settle claims or disputes (FACC ¶ 46). Further, the FACC alleges that the second agreement also exonerated their duty after a court action occurred. (FACC ¶ 48.) The FAC concludes that the agreements are against the policies of Contract Law and are unconscionable. (FACC ¶¶ 47, 49.)

Considering these allegations, the Court is uncertain regarding what specifically Kim wants to do about this. As discussed, Kim does not provide any authority on what duty Bee Defendants breached by including those terms in the contract. 10 CCR 2725 makes no statements on attorneys fees, indemnification, or assigning authority to settle a dispute.

The Court, frankly, does not understand what legal theory, relief, or even contracts are at issue. The FACC notes that illegal contracts can be deemed void or voidable. (FACC ¶ 42.) However, the FACC does not request a declaration that the Court deem any particular contract void. CCP section 1060 could provide a basis to declare a particular contract or instrument void. However, there are insufficient facts alleged here to determine whether a present controversy exists over the validity of a specific contract.

Accordingly, Bee Defendants’ demurrer is SUSTAINED with leave to amend. The Court needs more clarity in the purpose of the third cause of action, i.e. what relief Kim wants, and the legal basis of that relief.

Bee Defendants Demurrer: Third Cause of Action for Breach of Contract

Bee Defendants demur to the third cause of action on the grounds that the allegations only amount to fraud, as opposed to breach of contract. They argue that the allegations imply that Cross-Defendants paid the settlement amount, but that Cross-Complainant breached by not paying her share as required.

Bee Defendants fail to demonstrate that the alleged breach of contract cause fails. They only conclusively argue, without authority, that the cause of action doesn’t make sense, that she was merely defrauded into signing an agreement, and that there are no allegations of an agreement, performance, or breach.

To the contrary, the FACC alleges that Kim and BII entered into an agreement to settle an ongoing lawsuit with a third party. (FACC ¶¶ 56-60.) BII (presumably Chung) and Lim represented that Kim would not actually pay any settlement amount or attorneys fees. (FACC ¶ 59.) In reliance on that additional term, Kim entered into the settlement agreement. (FACC ¶ 60.) In clear violation of that additional term, BII charged Kim for a settlement amount of $30,000.00 and attorneys fees of $37,178.00. (FACC ¶ 61.) Bee Defendants do not explain how the contract, performance, and breach are not alleged in light of those allegations. They do not explain or argue that the breached term (that Kim would not actually pay for fees or the settlement amount) would not be a part of the settlement contract. Thus, Bee Defendants fail to meet their burden that the claim fails to state a cause of action.

Accordingly, the demurrer is OVERRULED.

Bee Defendants Demurrer: Fourth Cause of Action for Abuse of Process

Bee Defendants demur to the fourth cause of action on the grounds that it is an improper claim for malicious prosecution, rather than abuse of process.

“To establish a cause of action for abuse of process, a plaintiff must plead two essential elements: that the defendant (1) entertained an ulterior motive in using the process and (2) committed a wilful act in a wrongful manner.” (Coleman v. Gulf Insurance Group (1986) 41 Cal.3d 782, 792.) “The common law tort of abuse of process arises when one uses the court’s process for a purpose other than that for which the process was designed. [Citations.] It has been ‘interpreted broadly to encompass the entire range of ‘procedures' incident to litigation.’ [Citation.]” (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1057.) The tort has diminished significance in modern proceedings given that most actions that would constitute abuse of process are now protected by the Civ. Code section 47(b) litigation privilege. (Id. at 1063; see also JSJ Ltd. Partnership v. Mehrban (2012) 205 Cal.App.4th 1512, 1523.)

The FACC alleges that BII retained an attorney and entertained other ulterior purposes (harassment, threats) against Kim without legal issues. (FACC ¶ 66.) BII should have known that the contracts at issue were illegal, yet they launched the underlying action for reimbursement of their fees. (FACC ¶ 68.)

The Court finds that this cause of action runs afoul of the purpose of abuse of process. The FACC unambiguously alleges that BII maintains the underlying lawsuit for an improper purpose. However, “the mere filing or maintenance of a lawsuit—even for an improper purpose—is not a proper basis for an abuse of process action.” (Mehrban, supra, 205 Cal.App.4th at 1523.) Moreover, the litigation privilege facially applies.

Accordingly, Bee Defendants’ demurrer is SUSTAINED without leave as to this cause.

Moving party is ordered to give notice.

Case Number: 19STCV25968    Hearing Date: January 30, 2020    Dept: 24

Cross-Defendant Shi Young Lim’s demurrer to the Cross-Complaint by Defendant/Cross-Complainant Lynn Kim is SUSTAINED with leave to amend.

On July 25, 2019, Plaintiff Bee Investment Inc. (“BII”) filed a complaint against Defendant Lynn Kim (“Kim”), stating three causes of action for 1) breach of contract; 2) reimbursement; and 3) common counts – money had and received. The Complaint alleges that BII and Kim entered into a written independent contractor agreement wherein BII would be a real estate broker and Kim would be an associate-licensee (i.e. a real estate agent). On November 13, 2017, third-party Dewey Properties LLC filed a suit against BII and Kim regarding the sale and purchase of property located at 1057 S. Dewey Ave., Los Angeles (the “Property”). After the filing of the suit, BII and Kim entered into a second agreement in which they agreed that they will not claim to E&O insurance but instead will have Real Estate Risk Management coverage maximum $10,000.00 for the case, and that Kim would be responsible for payment of any and all amounts of any settlement. The parties settled the suit for $30,000.00. Thus, pursuant to the agreements, Kim was required to pay $20,000.00, plus attorneys’ fees and costs. Jenny Kang, another real estate agent, contributed 50% of the sum, leaving $28,589.00 for Kim to pay.

On October 21, 2019, Kim answered and filed a cross-complaint against BII, Kenny Chung (“Chung”), Joon Jung (“Jung”), and Shi Young Lim (“Lim”). The Cross-Complaint stated five causes of action for 1) violation of Real Estate Commissioner’s Regulation 2725; 2) violation of Bus. & Prof. Code section 10176 and 10177; 3) fraud of material facts (in conspiracy); 4) abuse of process (in conspiracy); and 5) negligence. The Cross-Complaint generally states that the second agreement was illegal and unconscionable. Kim also claims that Cross-Defendants entered into the agreement with Kim without disclosing the existence of the underlying suit.

On December 19, 2020, Lim filed the instant demurrer and motion to strike to the Cross-Complaint. On January 21, 2020, Kim filed a First Amended Cross-Complaint (“FACC”) in lieu of an opposition. The FACC states four causes of action for 1) negligence; 2) illegal contract; 3) breach of contract; and 4) abuse of process. On January 23, 2020, Lim filed a reply.

The filing of the FACC would normally moot the demurrer/mts. “A party may amend its pleading once without leave of the court at any time before the answer, demurrer, or motion to strike is filed, or after a demurrer or motion to strike is filed but before the demurrer or motion to strike is heard if the amended pleading is filed and served no later than the date for filing an opposition to the demurrer or motion to strike…” (CCP § 472(a).)

Lim correctly notes that the FACC was filed two court days late, as it was due on January 16, 2020 (not counting the court holiday on January 20). Thus, the FACC was untimely filed. The Court finds that since Plaintiff has filed a FACC in lieu of an opposition, Plaintiff essentially concedes that the demurrer was meritorious to the extent that the Cross-Complaint needed to be amended to add additional allegations. Further, the FACC attempts to address several issues presented in the presently filed demurrers. Accordingly, Lim’s demurrer is SUSTAINED with 20 days leave to amend. The Court will deem the FACC to be filed as of the date of this order. (CCP § 473(a).) The motion to strike is moot. The parties are given thirty days from the date of this order to file a responsive pleading.    

Moving party is ordered to give notice.

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