This case was last updated from Los Angeles County Superior Courts on 12/08/2019 at 16:14:14 (UTC).

KRISTINA KROSS, ET AL. VS. OFEK HOLDINGS, LLC, ET AL.

Case Summary

On 10/31/2017 KRISTINA KROSS filed a Property - Other Real Property lawsuit against OFEK HOLDINGS, LLC. This case was filed in Los Angeles County Superior Courts, Burbank Courthouse located in Los Angeles, California. The Judges overseeing this case are DONNA FIELDS GOLDSTEIN and BENNY C. OSORIO. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****7545

  • Filing Date:

    10/31/2017

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Property - Other Real Property

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Burbank Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

DONNA FIELDS GOLDSTEIN

BENNY C. OSORIO

 

Party Details

Plaintiffs

KROSS KRISTINA

ZATIKIAN MARINE

Defendants

OFEK HOLDINGS LP

OFEK HOLDINGS LLC

Attorney/Law Firm Details

Plaintiff Attorneys

HASSANPOUR M MICHAEL

HASSANPOUR M ICHAEL

HASSANPOUR MAJEED MICHAEL

Defendant Attorneys

ANDREW JAY KULICK ESQ.

KULICK ANDREW JAY

 

Court Documents

Other - - OTHER - STATEMENT OF POLICIES AND PROCEDURES FOR MANDATORY SETTLEMENT CONFERENCES; ACKNOWLEDGMENT OF RECEIPT AND STIPULATION (TRIAL JUDGE CONDUCTING SETTLEMENT CONFERENCE)

11/8/2019: Other - - OTHER - STATEMENT OF POLICIES AND PROCEDURES FOR MANDATORY SETTLEMENT CONFERENCES; ACKNOWLEDGMENT OF RECEIPT AND STIPULATION (TRIAL JUDGE CONDUCTING SETTLEMENT CONFERENCE)

Minute Order - MINUTE ORDER (MANDATORY SETTLEMENT CONFERENCE (MSC))

11/8/2019: Minute Order - MINUTE ORDER (MANDATORY SETTLEMENT CONFERENCE (MSC))

Minute Order - MINUTE ORDER (POST-ARBITRATION STATUS CONFERENCE)

9/24/2019: Minute Order - MINUTE ORDER (POST-ARBITRATION STATUS CONFERENCE)

Other - - NOTICE OF DEFENDANTS SUBMISSION OF EVIDENCE MADE PURSUANRT TO THE COURTS AUGUST 28, 2OI9 RULING ON SUBMITTED MATTER

9/3/2019: Other - - NOTICE OF DEFENDANTS SUBMISSION OF EVIDENCE MADE PURSUANRT TO THE COURTS AUGUST 28, 2OI9 RULING ON SUBMITTED MATTER

Opposition - OPPOSITION TO MOTION TO EXPUNGE LIS PENDENS

9/9/2019: Opposition - OPPOSITION TO MOTION TO EXPUNGE LIS PENDENS

Order - ORDER COURT'S ORDER RE: MOTION TO EXPUNGE PLAINTIFF'S NOTICE OF PENDENCY OF ACTION

8/28/2019: Order - ORDER COURT'S ORDER RE: MOTION TO EXPUNGE PLAINTIFF'S NOTICE OF PENDENCY OF ACTION

Opposition - OPPOSITION TO MOTION TO EXPUNGE PLAINTIFFS' NOTICE OF PENDENCY OF ACTION, MEMORANDUM OF ...

8/21/2019: Opposition - OPPOSITION TO MOTION TO EXPUNGE PLAINTIFFS' NOTICE OF PENDENCY OF ACTION, MEMORANDUM OF ...

Motion to Expunge Lis Pendens

7/24/2019: Motion to Expunge Lis Pendens

Minute Order - MINUTE ORDER (POST-ARBITRATION STATUS CONFERENCE)

3/20/2019: Minute Order - MINUTE ORDER (POST-ARBITRATION STATUS CONFERENCE)

Summons -

10/31/2017: Summons -

Legacy Document -

10/31/2017: Legacy Document -

Legacy Document -

10/31/2017: Legacy Document -

Legacy Document -

6/5/2018: Legacy Document -

Legacy Document -

8/3/2018: Legacy Document -

Notice of Ruling - WITH PROOF OF SERVICE

8/29/2018: Notice of Ruling - WITH PROOF OF SERVICE

Motion to Strike (not initial pleading) -

8/10/2018: Motion to Strike (not initial pleading) -

Case Management Statement -

7/3/2018: Case Management Statement -

Case Management Statement -

7/3/2018: Case Management Statement -

33 More Documents Available

 

Docket Entries

  • 03/16/2020
  • Hearing03/16/2020 at 09:30 AM in Department B at 300 East Olive, Burbank, CA 91502; Jury Trial

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  • 03/05/2020
  • Hearing03/05/2020 at 08:30 AM in Department B at 300 East Olive, Burbank, CA 91502; Final Status Conference

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  • 12/13/2019
  • Hearing12/13/2019 at 13:30 PM in Department B at 300 East Olive, Burbank, CA 91502; Mandatory Settlement Conference (MSC)

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  • 11/08/2019
  • Docketat 1:30 PM in Department B; Mandatory Settlement Conference (MSC) - Held - Continued

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  • 11/08/2019
  • DocketMinute Order ( (Mandatory Settlement Conference (MSC))); Filed by Clerk

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  • 11/08/2019
  • DocketRequest For Copies; Filed by OFEK Holdings LP (Defendant)

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  • 11/08/2019
  • DocketOther - (Statement of Policies and Procedures for Mandatory Settlement Conferences; Acknowledgment of Receipt and Stipulation (Trial Judge Conducting Settlement Conference)); Filed by Clerk

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  • 10/09/2019
  • DocketOrder (On Defendant's Motion To Expunge Plaintiff's Lis Pendens Filed In This Action); Filed by OFEK Holdings, LLC (Defendant)

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  • 09/24/2019
  • Docketat 08:30 AM in Department B; Post-Arbitration Status Conference - Held

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  • 09/24/2019
  • DocketMinute Order ( (Post-Arbitration Status Conference)); Filed by Clerk

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50 More Docket Entries
  • 02/20/2018
  • DocketMinute order entered: 2018-02-20 00:00:00; Filed by Clerk

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  • 02/06/2018
  • DocketProof of Service of Summons and Complaint; Filed by Kristina Kross (Plaintiff); Marine Zatikian (Plaintiff)

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  • 01/22/2018
  • Docketat 08:30 AM in Department B; Order to Show Cause Re: Failure to File Proof of Service (OSC-Failure to File Proof of Serv; Matter continued) -

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  • 01/22/2018
  • DocketMinute order entered: 2018-01-22 00:00:00; Filed by Clerk

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  • 01/22/2018
  • DocketEx-Parte Application

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  • 10/31/2017
  • DocketCivil Case Cover Sheet; Filed by Kristina Kross (Plaintiff); Marine Zatikian (Plaintiff)

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  • 10/31/2017
  • DocketSummons; Filed by Kristina Kross (Plaintiff); Marine Zatikian (Plaintiff)

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  • 10/31/2017
  • DocketOSC-Failure to File Proof of Serv; Filed by Court

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  • 10/31/2017
  • DocketNotice of Case Management Conference; Filed by Court

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  • 10/31/2017
  • DocketComplaint filed-Summons Issued; Filed by Kristina Kross (Plaintiff); Marine Zatikian (Plaintiff)

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Tentative Rulings

Case Number: EC067545    Hearing Date: October 30, 2020    Dept: NCB

Superior Court of California

County of Los Angeles

North Central District

Department B

KRISTINA A KROSS, et al.,

Plaintiffs,

v.

ofek holdings, llc, et al.,

Defendants.

Case No.: EC067545

Hearing Date: October 30, 2020

[TENTATIVE] order RE:

(1) petition to enforce parties’ binding arbitration agremeent;

(2) demurrer; and

(3) motion to strike

BACKGROUND

A. Allegations

In this action, Plaintiffs Kristina A Kross and Marine Zatikian (“Plaintiffs”) allege that on July 28, 2016, they entered into a written Commercial Property Purchase Agreement and Escrow Instructions (“Agreement”) with Defendants Ofek Holdings, LLC and Ofek Holdings, LP (“Defendants”). In the Agreement, Plaintiffs agreed to buy and Defendants agreed to sell property located at 10446 Scoville Avenue in Sunland, California. Under the provisions of the Agreement, the anticipated closing date of the sale was 60 days after acceptance of the Agreement. Plaintiffs allege that Defendants materially breached the agreement by attempting to cancel the Agreement.

The first amended complaint (“FAC”), filed March 25, 2020, alleges causes of action for: (1) breach of contract – anticipatory repudiation; (2) breach of contract; (3) specific performance; (4) concealment/fraud/deceit; (5) negligent interference with economic advantage; and (6) violation of Business & Professions Code, § 17200.

B. Relevant Background

On August 10, 2018, the Court by Judge Benny Osorio (ret.) granted Defendants’ motion to compel arbitration and stay the action, and took Defendants’ demurrer and motion to strike portions of the complaint off-calendar.

The minute order dated December 10, 2018 for the Post-Arbitration Statute Conference states that Plaintiffs’ counsel represented that “the parties have not yet participated in arbitration because defendant is refusing to pay for half of the arbitrator.” The Court then ordered the petitioner as claimant to pay for the arbitration and ordered Defendant to pay for half of the costs if ordered by the arbitrator.

Though this Court has conducted several post-arbitration status conferences, the parties indicated that as of March 20, 2019, they have had telephone conferences with the arbitrator, Judge Crispo, but no arbitration hearing has been scheduled. The Court advised the parties to discuss a motion for lis pendens with Judge Crispo.

On September 24, 2019, the Court held another Post-Arbitration Status Conference. The minute order reflects that Judge Crispo did not make any rulings on the motion for lis pendens and did not set a future date because neither side has paid any additional fees. The Court found that the arbitration was abandoned, ordered the arbitration terminated, and ordered the lis pendens expunged.

Thereafter, the parties attended Mandatory Settlement Conferences with the Court on November 8, 2019 and December 13, 2019. However, the parties did not reach a resolution on this action.

C. Motions on Calendar

On June 5, 2020, Defendant Ofek Holdings, LLC (“Ofek”) filed a petition to enforce parties’ binding arbitration agreement, a demurrer to the FAC, and a motion to strike portions of the FAC.

On September 9, 2020, Plaintiffs filed an opposition the demurrer. On September 10, 2020, Plaintiffs filed oppositions to the motion to compel arbitration and motion to strike.

On October 5, 2020, Ofek filed reply briefs to each of the oppositions.

REQUEST FOR JUDICIAL NOTICE

With the petition to enforce the arbitration agreement, demurrer, and motion to strike papers, Ofek filed a single request for judicial notice. Ofek seeks judicial notice of: (A) Contingency Removal 1, filed in support of the motion to expunge lis pendens, filed 8/28/19; (B) the Court’s 8/28/19 order re motion to expunge lis pendens; (C) notice of ruling on the motion to enforce binding arbitration, demurrer, and motion to strike, filed 8/29/18; (D) and (F) the reporter’s transcript of the 2/18/19 telephonic proceedings before Judge/Arbitrator Lawrence W. Crispo; and (E) the court’s 9/24/19 minute order. The request for judicial notice is granted, but not for the truths of the matters stated therein.

PETITION TO ENFORCE BINDING ARBITRATION AGREEMENT

This is Ofek’s second motion to compel arbitration.

By way of background, the Court previously granted the first motion to enforce arbitration agreement, finding that it was undisputed by the parties were bound to the Agreement and the arbitration provision. Plaintiffs had filed a notice of non-opposition to the first motion, wherein they stated that they previously expressed their desire and agreement to arbitrate the subject dispute with Defendants. (See Ofek RJN, Ex. C.)

Now, Ofek moves again to compel arbitration of this matter. Ofek argues that Judge Crispo ordered Plaintiffs to pay for ADR services. (Pet. at p.3, lines 20-21.) Ofek cites to Judge Crispo’s statement that his orders were not discretionary and that to the extent the parties sought relief from an order, they may apply ex parte. (Ofek RJN, Ex. F [2/18/19 Transcript of Telephonic Proceedings].)

However, the Court notes that no support has been provided for Judge Crispo’s order regarding the allocation of payment for ADR services. Plaintiffs also argue in opposition that Exhibit F reveals that no such statement was made by Judge Crispo on the allocation of payment. Leading up to the arbitration, Plaintiffs paid arbitration fees and attended several arbitration hearings, but that they could no longer keep up with the costs of arbitration. In its moving papers, Ofek makes no mention of paying fees or offering to pay a portion of the fees so that the arbitration may go forward. (See CCP § 1284.2.)

The Court has amply discussed the matter of arbitration with the parties. In its September 24, 2019 minute order, the Court found that the arbitration has been abandoned, such that that the arbitration order was terminated. In light of its finding, the Court offered to aid the parties in mediating the case and set the matter for trial. The Court still finds that Ofek has waived its right to arbitrate the matter during the conduct of the arbitration and thereafter.

Thus, the motion to compel arbitration is denied.

DEMURRER

A. Breach of Contract – Anticipatory Repudiation (1st cause of action)

The essential elements of a cause of action for breach of contract are: “(1) the existence of the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)

“[A]n anticipatory breach of contract occurs when the contract is repudiated by the promisor before the promisor's performance under the contract is due.” (Central Valley General Hospital v. Smith (2008) 162 Cal.App.4th 501, 514.) When a promisor repudiates the contract, the injured party can: (a) “treat the repudiation as an anticipatory breach and immediately (Id. at 515.)

In the 1st cause of action, Plaintiffs allege that on July 21, 2017, while the parties were in escrow, Defendant without notice or warning demanded and issued a cancellation instruction and instructed escrow to cancel the transaction. (FAC ¶25.) Plaintiff alleges that Defendant failed to follow the procedures in: (a) section 14E of the agreement, which provides that notice to the buyer or seller to perform must be in writing, signed by the applicable buyer or seller, and give the party at least 2 days to after delivery to take applicable action; and section 14G, which provides that before the buyer or seller may cancel the agreement for failure of the other party to close escrow, the buyer or seller must first deliver to the other party a demand to close escrow, which is signed by the applicable buyer or seller and give the other party at least 3 days after delivery to close escrow. (Id., ¶¶26-27.) Plaintiffs allege Defendant breached the agreement by failing to follow its instructions and that by their improper delivery of the cancelation instruction, anticipatorily repudiated the agreement. (Id., ¶¶28-29.) Plaintiffs allege that they waited 14 months for the benefit of Defendant, in order for them to settle and remove a lis pendens from their property. (Id., ¶31.)

Defendant demurs to the 1st cause of action arguing that the parties agreed the transaction would close 60 days after Defendant accepted Plaintiff’s offer and that it did not anticipatorily breach the parties’ agreement 14 months after the agreement expired. Defendant argues that Plaintiff alleged the closing became lax and the parties had agreed orally and in writing to postpone the closing several times (FAC, ¶¶21-22), but Defendant argues that the Extensions of Time Addendums attached as Exhibit 9 to the FAC were never signed by Defendant/seller.

“If facts appearing in the exhibits [attached to the compliant] contradict those alleged, the facts in the exhibits take precedence.” (Holland v. Morse Diesel Intern., Inc. (2001) 86 Cal.App.4th 1443, 1447.) According to the purchase agreement, the transaction was to close in 60 days. (FAC, Ex. 1 [Purchase Agreement at p. 1, §1.D].) The agreement also states that time is of the essence and that agreement is the final, complete, and exclusive expression of their agreement with respect to the subject matter and may not be contradicted by evidence of any prior agreement or contemporaneous oral agreement. (Purchase Agreement at p.9, §38.) The agreement also states that neither the agreement nor any of its provisions may be extended, amended, modified, altered or changed, except in writing signed by the buyer and seller. (Id.) Exhibit 9 of the FAC includes the Extension of Time Addendums, but they are signed solely by Plaintiffs/buyers on September 29, 2016 and October 22, 2016, and not by Defendant/seller.

Plaintiff argues that the extension of time addendums are but one example of how the close of escrow was extended and that they believe the extensions were signed by the parties, which will be shown in discovery. However, as the FAC currently stands, Plaintiffs have not alleged facts showing that both parties signed the extensions of time in compliance with the Purchase Agreement. Further, according to the Purchase Agreement, oral extensions of time or oral modifications of the Purchase Agreement are not allowed. As such, Plaintiff has not alleged sufficient facts to show that Defendant anticipatorily breached the agreement.

Thus, the demurrer to the 1st cause of action is sustained with leave to amend.

B. Breach of Contract (2nd cause of action)

In the 2nd cause of action, Plaintiffs allege that the agreement required Defendant to take certain steps prior to canceling the contract, including using mediation and arbitration, but Defendant failed to do so. (FAC ¶¶34, 17-19.) Plaintiffs also allege that Defendants breached their contractual duties by failing to follow certain steps to cancel the agreement and to remodel and do construction work. (Id., ¶35.)

Defendant demurs to the 2nd cause of action arguing that Plaintiff signed a Contingency Removal No. 1 that all buyers’ contingencies were removed except the loan contingency. (RJN, Ex. 1.) Defendant/seller argues that it fulfilled all conditions required on its part and that it was relieved of further duties when Plaintiff failed to fulfill a condition precedent regarding the loan contingency.

However, though Defendant argues in its demurrer that it satisfied all conditions required under the agreement by the parties, this is an argument that is outside of the pleadings and cannot be considered as true at the pleading and demurrer stage. Further, even if Plaintiffs’ failure to satisfy loan contingencies may have relieved Defendant of fulfilling certain conditions, the Purchase Agreement still required that notice to perform and cancellation of the agreement to be provided under certain notice procedures, which Plaintiff alleges Defendant failed to properly meet. Further, Plaintiffs allege other breaches of the agreement, such as the mediation and arbitration provisions. Thus, Plaintiffs still have separate grounds upon which their breach of contract cause of action is based on.

The demurrer to the 2nd cause of action is overruled.

C. Specific Performance (3rd cause of action)

“Specific performance of a contract may be decreed whenever: (1) its terms are sufficiently definite; (2) consideration is adequate; (3) there is substantial similarity of the requested performance to the contractual terms; (4) there is mutuality of remedies; and (5) plaintiff's legal remedy is inadequate.” (Union Oil Co. of California v. Greka Energy Corp.

In the 4th cause of action, Plaintiffs allege that Defendants anticipatorily repudiated the agreement by instructing escrow the cancel the transaction, and they have breached the agreement by failing to convey the property to Plaintiffs. (FAC, ¶¶39-40.) Plaintiffs allege they have performed all obligations, but Defendants have failed to perform under the agreement. (Id., ¶41.) They allege they do not have an adequate remedy at law to enforce the provisions of the agreement other than demanding specific performance. (Id., ¶42.)

Defendant demurs to this cause of action, arguing that it is under no duty to convey the property because Plaintiffs have not fulfilled all conditions required under the agreement, nor did they timely satisfy the condition despite the time is of the essence provision.

The allegations of specific performance are dependent on both the 1st and 2nd causes of action. Because the demurrer to the 2nd cause of action has been overruled, the demurrer to this cause of action is overruled as well.

D. Concealment/Fraud/Deceit (4th cause of action)

To allege a cause of action for fraud, the requisite elements are: (1) a representation, usually of fact, which is false; (2) knowledge of its falsity; (3) intent to defraud; (4) justifiable reliance upon the misrepresentation; and (5) damage resulting from that justifiable reliance. (Stansfield v. Starkey (1990) 220 Cal. App. 3d 59, 72-73.) This cause of action is a tort of deceit and the facts constituting each element must be alleged with particularity; the claim cannot be saved by referring to the policy favoring liberal construction of pleadings.  (Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216.)  Since the claim must be pleaded with particularity, the cause of action based on misrepresentations must allege facts showing how, when, where, to whom, and by what means the misrepresentations were tendered.  (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.)

In the 4th cause of action, Plaintiffs allege that before and after July 28, 2016, Defendants falsely represented to Plaintiffs that they could transfer the property free from clouds on title, deliver the property as called for in the agreement at close of escrow, and complete remodeling and construction within 60 days after acceptance. (FAC ¶¶48-49.) Plaintiffs allege that Defendants were not licensed contractors and could not perform the construction work required. (Id., ¶50.) Plaintiffs allege that Defendants’ failed to deliver the promised property, started taking advantage of the work they had done by collecting rent and getting loans, and did not finish the work on the property. (Id., ¶¶52-53.) Plaintiffs allege that they were unfamiliar with construction requirements and Defendants induced their reliance by misrepresenting their ability. (Id., ¶¶55-56.)

The allegations of the fraud cause of action are not pled with the requisite specificity. Plaintiffs have not alleged when the various alleged misrepresentations were made, who made the misrepresentations, by what means, etc. To the extent this cause of action is directed at Ofek, “[t]he requirement of specificity in a fraud action against a corporation requires the plaintiff to allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.” (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.)

The demurrer to the 4th cause of action is sustained with leave to amend.

E. Negligent Interference with Economic Advantage (5th cause of action)

“The tort of negligent interference with prospective economic advantage is established where a plaintiff demonstrates that (1) an economic relationship existed between the plaintiff and a third party which contained a reasonably probable future economic benefit or advantage to plaintiff; (2) the defendant knew of the existence of the relationship and was aware or should have been aware that if it did not act with due care its actions would interfere with this relationship and cause plaintiff to lose in whole or in part the probable future economic benefit or advantage of the relationship; (3) the defendant was negligent; and (4) such negligence caused damage to plaintiff in that the relationship was actually interfered with or disrupted and plaintiff lost in whole or in part the economic benefits or advantage reasonably expected from the relationship.” (Venhaus v. Shultz

The 5th cause of action alleges that Plaintiffs could not use their cash that the set aside for the purchase during the escrow period and could not make any investment with those funds. (FAC, ¶69.) However, Plaintiffs have not alleged any facts regarding an economic relationship that existed between Plaintiffs and a third party that contained a reasonably probable future economic benefit or advantage to Plaintiffs.

In opposition, Plaintiffs argue that Defendants knew that they had negotiated a lucrative agreement with the medical center for the subject property, but this is not alleged in the complaint.

Thus, the demurrer to the 5th cause of action is sustained with leave to amend.

F. Violation of Business & Professions Code, §17200 (6th cause of action)

The purpose of the UCL is to protect both consumers and competitors by promoting fair competition in commercial markets for goods and services. (Buller v. Sutter Health (2008) 160 Cal.App.4th 981, 986.) Section 17200 defines unfair competition to mean and include “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by [the false advertising law (§ 17500 et seq.)].” (Id.) Since section 17200 is written in the disjunctive, a business act or practice need only meet one of the three criteria, i.e., unlawful, unfair, or fraudulent, to be considered unfair competition under the UCL. (Id.)

In order to plead a claim under Business and Professions Code § 17200, there must be allegations demonstrating that Defendants engaged in an unlawful, unfair, or fraudulent business act or practice. (Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 676-77.) Further, to plead this statutory claim, the pleadings must state with reasonable particularity the facts supporting the statutory elements of the violation. (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 619.)

A violation of the unfair prong of section 17200 involves an examination of the impact of the business practice on its alleged victim balanced against the reasons, justifications and motives of the alleged wrongdoer. (Searle v. Wyndham Int'l (2002) 102 Cal.App.4th 1327, 1334.) An unfair business practice occurs when it offends an established public policy or when the practice is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers. (Id.) In general the unfairness prong has been used to enjoin deceptive or sharp practices. (Id.) However, the unfairness prong does not give the Courts a general license to review the fairness of contracts. (Id.) A review of the pleadings reveals no allegations that identify a particular business practice that offends established public policy or that is immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers.

A violation of the unlawful prong includes anything that can properly be called a business practice and that at the same time is forbidden by law. (Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal. App. 4th 659, 676-677.) A review of the pleadings reveals no allegations that identify a law, regulation, or statute and the particular business practices directed at Plaintiffs that violated the identified law, regulation, or statute. At most, Plaintiffs allege that Defendants acted unlawfully in a conclusory fashion. (FAC, ¶¶83-84.)

A violation of the fraudulent prong of section 17200 can be shown with allegations that the fraudulent practice was likely to deceive members of the public. (Schnall v. Hertz Corp. (2000) 78 Cal.App.4th 1144, 1167.) A review of the pleading reveals no allegations that identify a particular business practice that was a fraudulent practice likely to deceive the public. Further, as discussed above, the 4th cause of action is not adequately pled.

The demurrer to the 6th cause of action is sustained with leave to amend.

MOTION TO STRIKE PORTIONS OF THE FAC

Defendant moves to strike the allegations for punitive damages and attorney’s fees in the FAC.

A. Punitive Damages

In the FAC, Plaintiffs request punitive damages in connection with the 3rd, 4th, and 5th causes of action.

With regard to the 3rd cause of action for specific performance based on breach of contract, the Court grants the motion to strike. Punitive damages are not recoverable in breach of contract actions. (Purcell v. Schweitzer (2014) 224 Cal.App.4th 969, 976.) In opposition, Plaintiffs argue that the Court should deem this cause of action as an extreme case that warrants punitive damages. The Court does not find that the facts rise to such a level. Thus, the motion to strike the request for punitive damages in connection with the 3rd cause of action is granted without leave to amend.

With regard to the 4th and 5th causes of action for fraud and negligent interference with economic advantage, the motion to strike is moot as the allegations for these causes of action are not sufficient to allege such claims. Further, Plaintiffs have not shown how punitive damages are allowed for the 5th cause of action based on negligent conduct. Accordingly, the allegations for punitive damages are also lacking. The motion to strike the request for punitive damages in connection with the 4th and 5th causes of action is granted with 20 days leave to amend.

B. Attorney’s Fees

In the FAC, Plaintiffs seek attorney’s fees in connection with each cause of action.

CCP § 1021 states that attorney’s fees are recoverable if allowed under statute and/or by agreement.

The Purchase Agreement states in section 26 that the parties agree to mediate their disputes before resorting to arbitration. The section states that if the parties commence an action without first resolving the matter through mediation, that party shall be entitled to recover attorney’s fees. The agreement also states that the filing of a court action to preserve the statute of limitations, to enable the recording of a notice of pending action or other provisional remedy, or the filing of mechanic’s lien does not constitute a waiver or violation of the mediation or arbitration provisions.

Plaintiffs allege in the FAC that they filed this present action in order to preserve their rights and claims, including their right to file a Notice of Pendency of Action on the property. (FAC, ¶¶16-20.) As currently alleged, Plaintiffs’ commencement of this action does not constitute a waiver of the mediation or arbitration provisions.

Thus, as currently alleged, the Court declines to strike the allegations for attorney’s fees in the FAC.

CONCLUSION AND ORDER

Ofek’s motion to enforce the arbitration agreement is denied.

Ofek’s demurrer to the FAC is overruled as to the 2nd and 3rd causes of action, and sustained with 20 days leave to amend as to the 1st, 4th, 5th, and 6th causes of action.

Ofek’s motion to strike the request for punitive damages in connection with the 3rd cause of action is granted without leave to amend. The motion to strike the request for punitive damages in connection with the 4th and 5th causes of action is granted with 20 days leave to amend. The motion to strike the request for attorney’s fees is denied.

Defendants shall provide notice of this order.