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Saul Reiss, SBN 48528 ELECTRONICALLY FILED
1 Superior Court of California
reisslaw@verizon.net
Fay Pugh, SBN 198708 County of Santa Barbara
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fay.pugh@outlook.com Darrel E. Parker, Executive Officer
3 11835 W. Olympic Blvd., Suite 415E 6/10/2021 2:51 PM
Los Angeles, Ca 90064 By: Jazmine Teimori, Deputy
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Santa Monica, CA 90405
5 Tel.: 310-450-2888 Fax.: 310-450-2885
Attorney for Defendants
6 ARA BALJIAN and LE PHUQUE, LLC
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8 SUPERIOR COURT OF THE STATE OF CALIFORNIA
9 FOR THE COUNTY OF SANTA BARBARA – COOK BRANCH
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GARY E. HAUENSTEIN, an individual, ) Case No.: 20CV03544
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GWEN J. HAUENSTEIN, an individual, [Assigned to the Honorable James F. Rigali –
)
12 ) Dept. SM 2]
Plaintiffs, )
13 ) NOTICE OF GENERAL AND SPECIAL
vs. ) DEMURRER AND GENERAL AND
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) SPECIAL DEMURRER BY
15 ARA BALJIAN, an individual; LE ) DEFENDANTS ARA BALJIAN AND LE
PHUQUE, LLC, a business entity; ) PHUQUE, LLC TO THE COMPLAINT;
16 NATIONSTAR MORTGAGE CO., a ) MEMORANDUM OF POINTS AND
17 business entity, and DOES 1-50, inclusive, ) AUTHORITIES; DECLARATION OF
)
) FAY PUGH IN SUPPORT THEREOF
18 Defendants. )
) [Concurrently filed with Motion to Strike and
19 ) Request for Judicial Notice]
)
20 )
) Date: August 3, 2021
21 ) Time: 8:30 a.m.
) Place: Dept. SM 2
22 )
) Complaint Filed: October 27, 2020
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Trial Date: None
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NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS
ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT
1 TO ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD HEREIN:
2 PLEASE TAKE NOTICE THAT on the 3rd day of August, 2021, at the hour of 8:30
3 a.m. or as soon thereafter as the matter may be heard in Department SM 2 of the above-entitled
4 Court located at 312-C East Cook Street, Bldg. E., Santa Maria, California 93454, Defendants
5 ARA BALJIAN and LE PHUQUE, LLC (“Defendants”) will and hereby do demurrer to the
6 First, Second, Third, Fourth, Fifth and Sixth Causes of Action of Plaintiffs GARY E.
7 HAUENSTEIN and GWEN J. HAUENSTEIN’s (“Plaintiffs”) Complaint.
8 This General and Special Demurrer is made on the grounds that Plaintiffs cannot assert
9 the First Cause of Action for Breach of Contract, the Second Cause of Action for Fraud, the
10 Third Cause of Action for Fraud in the Inducement, the Fourth Cause of Action for Fraud in
11 the Concealment, the Fifth Cause of Action for Quiet Title and the Sixth Cause of Action for
12 Declaratory Relief since the Complaint fails to state sufficient facts to constitute any cause of
13 action against Defendants, the allegations are uncertain, ambiguous and unintelligible and the
14 claims are time barred. Code of Civil Procedure Section 430.10(e) and (f).
15 This General and Special Demurrer is based upon this Notice, the accompanying
16 Memorandum of Points and Authorities, the concurrently filed Motion to Strike and Request
17 for Judicial Notice, the Declaration of Fay Pugh, the entire records and files in this action,
18 those additional matters subject to judicial notice, and such oral and documentary evidence as
19 may be presented at or before the hearing on this Demurrer.
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21 Dated: June 7, 2021 LAW OFFICES OF SAUL REISS, P.C.
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________________________________
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Saul Reiss, Esq.
25 Fay Pugh, Esq.
Attorneys for Defendants
26 ARA BALJIAN and LE PHUQUE, LLC
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NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS
ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT
1 DEMURRER TO THE COMPLAINT
2 1. Defendants demurrer to the First Cause of Action of the Complaint for Breach
3 of Contract on the ground that it fails to state facts sufficient to constitute a cause of action
4 against Defendants. Code of Civ. Proc. §430.10(e).
5 2. Defendants demurrer to the First Cause of Action of the Complaint for Breach
6 of Contract on the ground that it is uncertain, ambiguous and unintelligible. Code of Civ.
7 Proc. §430.10(f).
8 3. Defendants demurrer to the Second Cause of Action of the Complaint for
9 Fraud on the ground that it fails to state facts sufficient to constitute a cause of action against
10 Defendants. Code of Civ. Proc. §430.10(e).
11 4. Defendants demurrer to the Second Cause of Action of the Complaint for
12 Fraud on the ground that it is uncertain, ambiguous and unintelligible. Code of Civ. Proc.
13 §430.10(f).
14 5. Defendants demurrer to the Third Cause of Action of the Complaint for Fraud
15 in the Inducement on the ground that it fails to state facts sufficient to constitute a cause of
16 action against Defendants. Code of Civ. Proc. §430.10(e).
17 6. Defendants demurrer to the Third Cause of Action of the Complaint for Fraud
18 in the Inducement on the ground that it is uncertain, ambiguous and unintelligible. Code of
19 Civ. Proc. §430.10(f).
20 7. Defendants demurrer to the Fourth Cause of Action of the Complaint for Fraud
21 in the Concealment on the ground that it fails to state facts sufficient to constitute a cause of
22 action against Defendants. Code of Civ. Proc. §430.10(e).
23 8. Defendants demurrer to the Fourth Cause of Action of the Complaint for Fraud
24 in the Concealment on the ground that it is uncertain, ambiguous and unintelligible. Code of
25 Civ. Proc. §430.10(f).
26 9. Defendants demurrer to the Fifth Cause of Action of the Complaint for Quiet
27 Title on the ground that it fails to state facts sufficient to constitute a cause of action against
28 Defendants. Code of Civ. Proc. §430.10(e).
NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS
ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT
1 10. Defendants demurrer to the Fifth Cause of Action of the Complaint for Quiet
2 Title on the ground that it is uncertain, ambiguous and unintelligible. Code of Civ. Proc.
3 §430.10(f).
4 11. Defendants demurrer to the Sixth Cause of Action of the Complaint for
5 Declaratory Relief on the ground that it fails to state facts sufficient to constitute a cause of
6 action against Defendants. Code of Civ. Proc. §430.10(e).
7 12. Defendants demurrer to the Sixth Cause of Action of the Complaint for
8 Declaratory Relief on the ground that it is uncertain, ambiguous and unintelligible. Code of
9 Civ. Proc. §430.10(f).
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Dated: June 7, 2021 LAW OFFICES OF SAUL REISS, P.C.
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________________________________
14 Saul Reiss, Esq.
Fay Pugh, Esq.
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Attorneys for Defendants
16 ARA BALJIAN and LE PHUQUE, LLC
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NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS
ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT
1 TABLE OF CONTENTS
2 PAGE
3 I. STATEMENT OF FACTS/PROCEDURAL HISTORY. 1
4 A. THE ALLEGATIONS OF THE COMPLAINT. 1
5 B. MATTERS SUBJECT TO JUDICIAL NOTICE. 1
6 1. The Property’s History. 1
7 2. Plaintiffs’ Bankruptcy Petitions. 2
8 II. APPLICABLE LAW. 3
9 III. PLAINTIFFS LACK STANDING TO BRING THIS ACTION. 4
10 IV. THE BREACH OF CONTRACT CLAIM LACKS MERIT. 5
11 V. THE FRAUD CLAIMS ARE DEFECTIVE. 8
12 VI. PLAINTIFFS’ CLAIM FOR QUIET TITLE IS SUBJECT TO
13 A DEMURRER. 9
14 VII. THE CAUSE OF ACTION FOR DECLARATORY RELIEF
15 LACKS MERIT. 10
16 VIII. LEAVE TO AMEND SHOULD BE DENIED. 13
17 IX. CONCLUSION. 13
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NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS
ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT
1 TABLE OF AUTHORITIES
2 PAGE
3 CASES
4 Astenius v. State (2005) 126 Cal.App.4th 472 3
5 Blank v. Kirwan (1985) 39 Cal.3d 311 3
6 Cansino v. Bank of America (2014) 224 Cal.App.4th 1462 3
7 Careau & Co. v. Security Pac. Bus. Credit, Inc. (1990) 222 Cal.App.3d 1371 13
8 Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593 3
9 Dickinson v. Indiana State Election Board (7th Cir. 1991) 933 F.2d 497 12
10 Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951 9
11 Estate of Moss (2012) 204 Cal.App.4th 521 3
12 Guardian North Bay, Inc. v. Sup.Ct. (Myers) (2001) 94 Cal.App.4th 963 3
13 Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc.
14 (9th Cir. 1989) 896 F.2d 1542 12
15 Heimann v. National Elevatory Industry Pension Fund
16 (5th Cir. 1999) 187 F.3d 493 12
17 Kong v. City of Hawaiian Gardens Red. Agency (2002) 108 Cal.App.4th 1028 3
18 Larson v. UHS of Rancho Springs, Inc. (2014) 230 Cal.App.4th 336 3
19 Lazar v. Sup. Ct. (1996) 12 Cal.App.4th 631 9
20 Lortz v. Connell (1969) 273 Cal.App.2d 286 6
21 McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457 3
22 Okun v. Sup.Ct. (1981) 29 Cal.443 13
23 Perlman v. Municipal Ct. (1979) 99 Cal.App.3d 568 13
24 Semole v. Sansoucie (1972) 28 Cal.App.3d 714 3
25 Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167 8
26 Societe de Conditionnement en Aluminum v. Hunter Eng. Co., Inc.
27 (9th Cir. 1981) 655 F.2d 938 12
28 Sony Electronics, Inc. v. Guardian Media Technologies, Ltd.
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NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS
ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT
1 (Fed. Cir. 2007) 497 F.3d 1271 12
2 Sprinkles v. Associated Indem. Corp. (2010) 188 Cal.App.4th 69 13
3 Tarmann v. State Farm Mut. Auto Ins. Co. (1991) 2 Cal.App.4th 153 8
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5 STATUTES
6 Code of Civ. Proc. §339(1) 6
7 Code of Civ. Proc. §761.020 9-10
8 Code of Civ. Proc. §1060 11
9 Code of Civ. Proc. §1061 12
10 Evid. Code §452 3
11 Evid. Code §453 3
12 Evid. Code §622 7, 9
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14 OTHER AUTHORITIES
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16 CACI 300 6
17 CACI 303 6
18 Cal. Judges Benchbook Civ. Proc. Before Trial §10.26 (April 2021 update) 4
19 5 Witkin, Cal. Proc. 5th Plead §711 (2008) 8
20 5 Witkin, Cal. Proc. 5th Plead §850 (2008) 11
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NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS
ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT
1 MEMORANDUM OF POINTS AND AUTHORITIES
2 I. STATEMENT OF FACTS/PROCEDURAL HISTORY.
3 A. THE ALLEGATIONS OF THE COMPLAINT.
4 Plaintiffs allege that they are the owners of the real properties located at 3333 Avena
5 Road, Lompoc, California (APN 099-330-004) and adjacent parcels (the “Property”).
6 Plaintiffs allege that in or about June of 2017, they entered into an oral agreement with
7 Defendant Baljian whereby he agreed to facilitate a loan to pay off or bring current the then
8 existing debt to Defendant Nationstar Mortgage Company1 as owed by Plaintiffs. The
9 purpose of the loan by Defendant Baljian to Plaintiffs was to allow the tenant on the Properties
10 to continue to operate its business and the tenants, Plaintiffs and Defendant Baljian would
11 “financially benefit therefrom”. Defendant Baljian allegedly assured Plaintiffs that the loan
12 was not to be repaid and would be recouped from the tenant’s operation profits. Plaintiffs
13 claim that Baljian used some of the loan proceeds to pay himself, without disclosing the same
14 to Plaintiffs.
15 Based on these allegations, Plaintiffs allege causes of action for breach of contract,
16 fraud, fraud in inducement, fraud in concealment, quiet title and declaratory relief.
17 B. MATTERS SUBJECT TO JUDICIAL NOTICE.
18 1. The Property’s History.
19 As of June 2006, Plaintiffs were the owners of the Property, which they had
20 encumbered with two loans in the amounts of $150,000 and $115,000. (Request for Judicial
21 Notice (“RJN”), Exhibits 1, 2 and 3).
22 As of December 10, 2015, Plaintiffs were in default of one of the loans, which resulted
23 in the lender Defendant Nationstar Mortgage Co. recording a Notice of Default and Election
24 to Sell Under Deed of Trust. (RJN, Exhibit 4).
25 On March 18, 2016, the Notice of Trustee’s Sale was recorded. (RJN, Exhibit 5).
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Defendants are informed that Defendant Nationstar Mortgage Co. was dismissed.
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NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS
ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT
1 On May 22, 2017, a second Notice of Trustee’s Sale was recorded to take place on
2 July 5, 2017. (RJN, Exhibit 6).
3 On or about June 22, 2017, Plaintiffs borrowed the sum of $168,500 from Defendant
4 Le Phuque, LLC in writing pursuant to a note, secured by a Deed of Trust against the Property.
5 The Note provided that Plaintiffs would repay the principal sum with interest from June 26,
6 2017 until paid at the rate of five percent per annum payable at maturity or upon sale
7 whichever to occur first. (RJN, Exhibit 7 and 8).
8 On May 31, 2019, Plaintiffs executed a Grant Deed transferring the Property to their
9 attorney, The Monterrosa Firm, Inc. (RJN, Exhibit 9).
10 On November 27, 2019, The Monterrosa Firm Inc. executed a Grant Deed transferring
11 the Property to Golden Phoenix, LLC. (RJN, Exhibit 10).
12 On December 26, 2019, Defendant Le Phuque, LLC caused to be recorded a Notice
13 of Default and Election to Sell Under Deed of Trust. (RJN, Exhibit 11).
14 On or about April 30, 2020, Notice of Trustee’s Sale to take placed on June 3, 2020
15 was recorded. (RJN, Exhibit 12).
16 On November 11, 2020, the Trustee’s Deed Upon Sale was recorded. (RJN, Exhibit
17 13).
18 2. Plaintiffs’ Bankruptcy Petitions.
19 After the March 18, 2016 Notice of Trustee’s Sale was recorded (RJN, Exhibit 5), on
20 April 21, 2016, Plaintiffs filed a Chapter 13 bankruptcy petition, which was dismissed less
21 than two months later on June 10, 2016. (RJN, Exhibit 14).
22 After the Notice of Trustee’s Sale was recorded on April 30, 2020 (RJN, Exhibit 12),
23 Plaintiffs filed several bankruptcy petitions, which were all dismissed, as follows:
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Date of Filing Date of Dismissal
25 June 3, 2020 June 22, 2020
June 30, 2020 July 20, 2020
26 August 4, 2020 August 24, 2020
September 2, 2020 September 21, 2020
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(RJN, Exhibits 15-18).
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NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS
ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT
1 II. APPLICABLE LAW.
2 “A demurrer tests the sufficiency of the plaintiff’s complaint, i.e., whether it states
3 facts sufficient to constitute a cause of action upon which relief may be based.” McKell v.
4 Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457; Kong v. City of Hawaiian Gardens
5 Red. Agency (2002) 108 Cal.App.4th 1028. In determining the sufficiency of a complaint, the
6 court may not assume the truth of contentions, deductions, or conclusions of fact or law or
7 deductions drawn from those legal or factual contentions or conclusions. Astenius v. State
8 (2005) 126 Cal.App.4th 472; Blank v. Kirwan (1985) 39 Cal.3d 311, 318. In Semole v.
9 Sansoucie (1972) 28 Cal.App.3d 714, the Court held that although pleadings are to be liberally
10 construed, they must nonetheless set forth essential facts with reasonable precision.
11 The allegations of the complaint are not accepted as true if they contradict or are
12 inconsistent with facts judicially noticed by the court. In ruling on a demurrer, the court may
13 consider matters outside the complaint if they are judicially noticeable under Evid. Code
14 §§452 and 453. See Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1474.
15 In ruling on a demurrer, a court may take judicial notice of admissions or inconsistent
16 statements by plaintiff in earlier pleadings in the same lawsuit, in prior similar lawsuits that
17 plaintiff had voluntarily dismissed, or in discovery documents, and may disregard conflicting
18 factual allegations in the complaint. Del E. Webb Corp. v. Structural Materials Co. (1981)
19 123 Cal.App.3d 593, 604—“Thus, a pleading valid on its face may nevertheless be subject to
20 demurrer when matters judicially noticed by the court render the complaint meritless”; Larson
21 v. UHS of Rancho Springs, Inc. (2014) 230 Cal.App.4th 336, 344.
22 A demurrer can be utilized where the complaint itself is incomplete or discloses some
23 defense that would bar recovery, e.g., dates pleaded in complaint show statute of limitations
24 has run. Guardian North Bay, Inc. v. Sup.Ct. (Myers) (2001) 94 Cal.App.4th 963, 971-972;
25 Estate of Moss (2012) 204 Cal.App.4th 521, 535 (citing text).
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NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS
ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT
1 III. PLAINTIFFS LACK STANDING TO BRING THIS ACTION.
2 Plaintiffs lack standing to bring this action because they are not the real party in
3 interest, having deeded the Property to a third party, which in turn deeded the Property to yet
4 another party. (RJN, Exhibits 9 and 10). Cal. Judges Benchbook Civ. Proc. Before Trial
5 §10.26 (April 2021 update) provides in relevant part:
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“General principles. All civil actions must be prosecuted in the name of the
7 real party in interest, except as otherwise provided by statute. CCP § 367.
The phrase ‘except as otherwise provided by statute’ means that the action must
8 be prosecuted in the name of the person who has the right to prosecute the
matter under the relevant statute. 321 Henderson Receivables Origination LLC
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v Red Tomahawk (2009) 172 CA4th 290, 301–302, 91 CR3d 232. …
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A party who is not the real party in interest does not have standing to sue,
11 because the claim belongs to someone else. In such a case, the complaint is
12 subject to a general demurrer under CCP § 430.10. City of Brentwood v
Campbell (2015) 237 CA4th 488, 504, 188 CR3d 88; The H.N. & Frances C.
13 Berger Found. v Perez (2013) 218 CA4th 37, 42, 159 CR3d 434. See § 12.21.
The plaintiff’s lack of standing is a fatal jurisdictional defect that requires
14 a judge to render judgment against the plaintiff. Scott v Thompson (2010)
15 184 CA4th 1506, 1510, 109 CR3d 846. See Sipple v City of Hayward (2014)
225 CA4th 349, 358, 170 CR3d 199 (standing is jurisdictional). See
16 also Marriage of Marshall (2018) 23 CA5th 477, 485–486, 232 CR3d
879 (judge’s determination that party lacks standing precludes party from
17 litigating any issue).
18 …
Allegations in complaint. The plaintiff must allege sufficient facts in
19 the complaint to establish standing to sue. Codoni v Codoni (2002) 103
CA4th 18, 21, 126 CR2d 423. On a matter as fundamental as a
20 party’s standing to sue, the allegations should be direct and unequivocal,
21 not inferential. Kline Hawkes Cal. SBIC, L.P. v Superior Court (2004) 117
CA4th 183, 194, 11 CR3d 581.
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The plaintiff may satisfy this requirement by showing that
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24 • The plaintiff (or the person the plaintiff properly represents) has suffered or is
threatened with an injury of sufficient magnitude to reasonably ensure that the
25 relevant facts and issues will be adequately represented in the litigation. City of
Irvine v Irvine Citizens Against Overdevelopment (1994) 25 CA4th 868, 874,
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30 CR2d 797.
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NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS
ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT
• The plaintiff holds the claim or owns the property that is the subject of
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the litigation. Gantman v United Pac. Ins. Co. (1991) 232 CA3d 1560, 1566,
2 284 CR 188.
3 • The plaintiff has the right to file suit under the substantive law. Personnel
Comm'n v Barstow Unified Sch. Dist. (1996) 43 CA4th 871, 877, 50 CR2d
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797; Saks v Damon Raike & Co. (1992) 7 CA4th 419, 427, 8 CR2d 869.
5 See Vaughn v Dame Constr. Co. (1990) 223 CA3d 144, 147–149, 272 CR
261 (there may be as many real parties in interest as there are rights of action
6 under substantive law).
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Determination of standing. A litigant’s standing to sue is a threshold issue
8 that a judge must resolve before considering the case on the
merits. Mendoza v JPMorgan Chase Bank, N.A., supra, 6 CA5th at
9 810; Boorstein v CBS Interactive, Inc., supra, 222 CA4th at 465; Iglesia
10 Evangelica Latina, Inc. v Southern Pac. Latin Am. Dist. of Assemblies of God
(2009) 173 CA4th 420, 445, 93 CR3d 75 (justiciable controversy
11 requires standing). The standing inquiry requires a careful judicial examination
of the allegations of the complaint to determine whether the particular plaintiff
12 is entitled to an adjudication of the asserted claims. Whether a plaintiff
13 has standing generally revolves around the question of whether the plaintiff has
rights that may suffer some actual or threatened injury. Clifford S. v Superior
14 Court (1995) 38 CA4th 747, 751, 45 CR2d 333. The judge must also consider
whether the plaintiff has a sufficient interest in the issues to ensure that the case
15 will be pursued vigorously. City of Cupertino v City of San Jose (1995) 33
16 CA4th 1671, 1675, 40 CR2d 171.
17 Because the elements for standing are not merely pleading requirements
but are an indispensable part of the plaintiff’s case, each element must be
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supported in the same way as any other matter on which the plaintiff bears
19 the burden of proof, i.e., with the manner and degree of evidence required
at the successive stages of the litigation. Troyk v Farmers Group, Inc. (2009)
20 171 CA4th 1305, 1343, 90 CR3d 589.”
21 Plaintiffs do not have any interest in the Property having executed a Grant Deed
22 transferring the ownership of the Property to The Monterrosa Firm, Inc. (RJN, Exhibit 9),
23 which transferred the same to yet another entity. (RJN, Exhibit 10).
24 IV. THE BREACH OF CONTRACT CLAIM LACKS MERIT.
25 Plaintiffs allege that in or about June 2017, they entered into an oral agreement
26 whereby Defendant Baljian would pay off or bring current a then existing debt owed by
27 Plaintiffs to Defendant Nationstar Mortgage Co. The loan was intended to allow the current
28 tenant at the Property to operate its business and the tenant, Defendant Baljian and Plaintiffs
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NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS
ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT
1 “would financially benefit therefrom.” Defendant Baljian allegedly assured Plaintiffs that the
2 loan was not required to be repaid and would be recouped from the tenant’s business’ profits.
3 Plaintiffs believe that Defendants Baljian allegedly used some of the loan proceeds to pay
4 himself without disclosing the same to Plaintiffs. Plaintiffs further believe Defendants kept
5 secret their true intentions for use of the loan to Plaintiffs’ detriment.
6 The essential elements to be pleaded in an action for breach of contract are (i) the
7 existence of the contract, (ii) plaintiff’s performance of the contract or excuse for
8 nonperformance, (iii) defendant’s breach of the contract and (iv) the resulting damage to the
9 plaintiff. Lortz v. Connell (1969) 273 Cal.App.2d 286, 290; CACI 300 and 303.
10 First, there is no allegation that Plaintiffs entered into an agreement with Defendant
11 Le Phuque, LLC. The alleged agreement was between Defendant Baljian and Plaintiffs.
12 Therefore, Defendant Le Phuque, LLC is improperly named in this cause of action.
13 The alleged agreement was entered into in June of 2017. The Complaint was not filed
14 until almost four years later on October 27, 2020. Accordingly, the claim is time barred. The
15 statute of limitation for an oral agreement is two years. Code of Civ. Proc. §339(1).
16 Based on the documents, which the Court can judicially notice, the loan was made in
17 June of 2017. (RJN, Exhibits 7 and 8). Any obligation that Defendant Baljian had to pay off
18 or bring current the then existing loan arose at the time the loan was made in June of 2017 or
19 shortly thereafter. That is because if Defendant Baljian had not paid off the loan or had not
20 brought it to date before the scheduled trustee’s sale on July 5, 2017 (RJN, Exhibit 6), the
21 Property would have been sold. Accordingly, by no later than July 5, 2017, Plaintiffs were
22 aware whether Defendant Baljian had performed his obligation or breached the same.
23 Plaintiffs would have also known whether he had taken some of the proceeds of the loan for
24 himself. Accordingly, any breach by Defendant Baljian took place on or about July 5, 2017
25 and the statute of limitations expired two years later in July of 2019, long before the Complaint
26 was filed in this action.
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NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS
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1 Third, it is vague and ambiguous what the exact terms of the alleged oral agreements
2 were, i.e., what were Plaintiffs’ obligations. Furthermore, there is no allegation that Plaintiffs
3 performed their obligations under the alleged oral agreement.
4 From the vague and ambiguous allegations of the Complaint, it appears that Plaintiffs’
5 obligation under the oral agreement was to allow the tenant to continue operating at the
6 Property. Plaintiffs breached their obligation when they transferred the ownership of the
7 Property to a third party (RJN, Exhibit 9), which transferred it to yet another entity. (RJN,
8 Exhibit 10). Accordingly, Plaintiffs no longer had the right to allow the tenant to continue to
9 operate at the Property, which was their obligation under the alleged agreement. Accordingly,
10 Plaintiffs did not perform their obligations and breached the same.
11 Fourth, it is vague and ambiguous what Defendant Baljian’s obligations were under
12 the alleged oral agreement and there are no allegation of how he breached the same. Plaintiffs
13 may argue that his obligation was to pay off or bring current the then existing debt. There is
14 no allegation that he did not perform that obligation. In fact, based on the fact that the trustee’s
15 sale did not proceed as scheduled on July 5, 2017 (RJN, Exhibit 6), Defendant Baljian
16 performed his obligation by either paying off or bringing the debt current. Furthermore,
17 Plaintiffs have not alleged how much was owed on the then existing debt to determine if there
18 was any money left over.
19 Fifth, it is vague and ambiguous how Plaintiffs were harmed as a result of any action
20 on the part of Defendant Baljian, as there is no such allegation in the Complaint.
21 Finally, Plaintiffs’ allegation that Defendant Baljian assured them that the loan was
22 not to be repaid is contradicted by the Note and Deed of Trust. Evid. Code §622 provides
23 “The facts recited in a written instrument are conclusively presumed to be true as between the
24 parties thereto, or their successors in interest; but this rule does not apply to the recital of a
25 consideration.” In the Note, Plaintiffs promised to repay the loan with interest. (RJN, Exhibit
26 7). The allegations to the contrary are improper.
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NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS
ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT
1 V. THE FRAUD CLAIMS ARE DEFECTIVE.
2 From the allegations of the Complaint, it is completely vague and ambiguous who
3 committed the alleged fraud. In California, fraud must be pled with specificity. Small v. Fritz
4 Companies, Inc. (2003) 30 Cal.4th 167, 184. “The particularity demands that a plaintiff plead
5 facts which show how, when, where, to whom, and by what means the representations were
6 tendered.” Cansino, supra, 224 Cal.App.4th at 1469. The Complaint fails to allege how, when,
7 where, to whom and by what means alleged misrepresentations were made.
8 5 Witkin, Cal. Proc. 5th Plead §711 (2008) provides:
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“1) Nature of Rule. Fraud actions have been classed as ‘disfavored,’ and are
10 subject to strict requirements of particularity in pleading. The idea seems to be
that because allegations of fraud involve a serious attack on character, fairness
11 requires that the defendant receive the fullest possible details of the charge to
12 prepare a defense.
13 Accordingly, fraud must be specifically pleaded. ‘It is essential that the facts
and circumstances which constitute the fraud should be set out clearly,
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concisely, and with sufficient particularity to apprise the opposite party of what
15 he is called on to answer, and to enable the court to determine whether, on the
facts pleaded, there is any foundation, prima facie at least, for the charge of
16 fraud.” (Scafidi v. Western Loan & Bldg. Co. (1946) 72 C.A.2d 550, 553, 165
P.2d 260 [quoting Corpus Juris Secundum].)
17
18 The effect of this rule is twofold: (1) General pleading of the legal conclusion
of “fraud” is insufficient; the facts constituting the fraud must be alleged; and
19 (2) every element of the cause of action for fraud must be alleged in the proper
20 manner (i.e., factually and specifically), and the policy of liberal construction
of the pleadings (see supra, § 442) will not ordinarily be invoked to sustain a
21 pleading defective in any material respect. (See 37 Am.Jur.2d, Fraud and Deceit
§ 424; for exceptions, see infra, § 714.)”.
22
Furthermore, the Complaint fails to allege a proper claim against the entity Defendant
23
Le Phuque, LLC. “The requirement of specificity in a fraud action against a corporation
24
requires the plaintiff to allege the names of the persons who made the allegedly
25
fraudulent representations, their authority to speak, to whom they spoke, what they said or
26
wrote, and when it was said or written.” Tarmann v. State Farm Mut. Auto Ins. Co. (1991) 2
27
Cal.App.4th 153, 157.
28
8
NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS
ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT
1 The Complaint does not properly allege and in fact does not even allege the requisite
2 elements of a fraud claim. To establish a fraud cause of action, plaintiff must allege (1)
3 misrepresentation, (2) knowledge of falsity, (3) intent to defraud or to induce reliance, (4)
4 justifiable reliance, and (5) resulting damage. See Engalla v. Permanente Medical Group, Inc.
5 (1997) 15 Cal.4th 951, 974. Lazar v. Sup. Ct. (1996) 12 Cal.App.4th 631, 638 held:
6
“The elements of fraud, which give rise to the tort action for deceit, are (a)
7 misrepresentation (false representation, concealment, or nondisclosure); (b)
knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance;
8 (d) justifiable reliance; and (e) resulting damage.” (5 Witkin, Summary of
9 Cal.Law (9th ed. 1988) Torts, **985 ***381 §676, p. 778; see also Civ.Code,
§1709; Hunter, supra, 6 Cal.4th 1174, 1184, 26 Cal.Rptr.2d 8, 864 P.2d 88;
10 Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1108, 252 Cal.Rptr. 122, 762
P.2d 46.)”.
11
Plaintiffs falsely assert that Defendants intentionally did not disclose to them that they
12
intended to demand repayment of the loan. The Court’s attention is respectfully directed to
13
the Note and Deed of Trust (RJN, Exhibits 7 and 8), which clearly provide that Plaintiffs
14
agreed in writing to repay the loan. “The facts recited in a written instrument are conclusively
15
presumed to be true as between the parties thereto, or their successors in interest; but this rule
16
does not apply to the recital of a consideration.” Evid. Code §622.
17
As to the alleged use of the profits from the operation of the farm, as stated above,
18
once Plaintiffs deeded the Property to a third party, who in turn deeded the same to yet another
19
party, Plaintiffs were no longer able to lease the Property to the tenant, which could make
20
profit from the operation of the farm.
21
VI. PLAINTIFFS’ CLAIM FOR QUIET TITLE IS SUBJECT TO A DEMURRER.
22
Plaintiffs’ claim for quiet title is defective since the Complaint is not verified, does
23
not contain a description of the property at issue, the title claimed by Plaintiffs, the claims
24
adverse to Plaintiffs’ alleged title, the date as to which the determination is sought and a prayer
25
for the determination of the Plaintiffs’ title against the adverse claim as required by Code of
26
Civ. Proc. §761.020, which provides as follows:
27
///
28
9
NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS
ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT
“The complaint shall be verified and shall include all of the following:
1
2 (a) A description of the property that is the subject of the action. … In the case
of real property, the description shall include both its legal description and its
3 street address or common designation, if any.
4
(b) The title of the plaintiff as to which a determination under this chapter is
5 sought and the basis of the title. …
6 (c) The adverse claims to the title of the plaintiff against which a determination
7 is sought.
8 (d) The date as of which the determination is sought. If the determination is
sought as of a date other than the date the complaint is filed, the complaint shall
9 include a statement of the reasons why a determination as of that date is sought.
10
(e) A prayer for the determination of the title of the plaintiff against the adverse
11 claims.”
12 As stated above, Plaintiffs are not the owners of the Property, having deeded the same
13 to a third party, who deeded the same to yet another third party. (RJN, Exhibits 9 and 10).
14 Accordingly, Plaintiffs have no standing to bring this claim.
15 In paragraph 25 of the Complaint, Plaintiffs assert that they secured a mortgage from
16 Defendant Nationstar Mortgage Co. in or about 2017 for the approximate sum of $138,000.
17 However, the history of the Property does not include any such loan. (RJN, Exhibit 1).
18 In paragraph 26, Plaintiffs falsely allege that Defendant Baljian asserts he is the owner
19 of a deed of trust. As the history of the Property reflects, Defendant Baljian does not claim
20 an interest in the Property. (RJN, Exhibit 1). In June of 2017, Plaintiffs executed a deed of
21 trust and note in favor of Defendant Le Phuque, LLC. (RJN, Exhibits 7 and 8).
22 VII. THE CAUSE OF ACTION FOR DECLARATORY RELIEF LACKS MERIT.
23 Plaintiffs allege that an actual controversy exists between them and Defendants with
24 respect to their respective rights and duties regarding the Note and Trust Deed. (Complaint,
25 ¶33). It is completely vague and ambiguous which Defendants and which “Note” and “Trust
26 Deed” Plaintiffs are referring to. Additionally, Plaintiffs are alleging that Defendants did not
27 have the authority or legal right to foreclose upon and sell the Properties. (Complaint, ¶34).
28 Once again, it is unclear which “Defendants” Plaintiffs are referring to.
10
NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS
ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT
1 Assuming that Plaintiffs are referring to the Note and Deed of Trust in favor of
2 Defendant Le Phuque, LLC (RJN, Exhibits 7 and 8), Defendant Le Phuque, LLC foreclosed
3 on the Property. (RJN, Exhibit 11). Defendant Baljian has been improperly named in this
4 cause of action. The Property was deeded away by Plaintiffs, accordingly, the Deed of Trust
5 secured by the Property is no longer at issue between Plaintiffs and Defendant Le Phuque,
6 LLC.
7 As set forth above, having deeded the Property to a third party, who deeded the same
8 to yet another third party (RJN, Exhibits 9 and 10), Plaintiffs have no standing to bring this
9 claim.
10 The purpose of a declaratory relief action is to seek declaration of rights before an
11 actual invasion of those rights have occurred, e.g., a contract has been breached and an action
12 instituted. 5 Witkin, Cal. Proc. 5th Plead §850 (2008) in relevant part provides:
13
“(2) Purpose and Scope. The action is unusual in that it may be brought to
14 determine and declare rights before an actual invasion of those rights has
occurred. Thus, it operates prospectively, rather than merely to redress past
15 wrongs. (Gafcon v. Ponsor & Associates (2002) 98 C.A.4th 1388, 1403, 120
C.R.2d 392, 1Cal. Proc. (5th), Attorneys, § 386; Canova v. Trustees of Imperial
16
Irr. Dist. Employee Pension Plan (2007) 150 C.A.4th 1487, 1497, 59 C.R.3d
17 587.).”
18 Code of Civ. Proc. §1060 provides:
19 “Any person interested under a written instrument, excluding a will or a trust,
20 or under a contract, or who desires a declaration of his or her rights or duties
with respect to another, or in respect to, in, over or upon property, or with
21 respect to the location of the natural channel of a watercourse, may, in cases of
actual controversy relating to the legal rights and duties of the respective parties,
22 bring an original action or cross-complaint in the superior court for a declaration
23 of his or her rights and duties in the premises, including determination of any
question of construction or validity arising under the instrument or contract. He
24 or she may ask for a declaration of rights or duties, either alone or with other
relief; and the court may make a binding declaration of these rights or duties,
25 whether or not further relief is or could be claimed at the time. The declaration
26 may be either affirmative or negative in form and effect, and the declaration
shall have the force of a final judgment. The declaration may be had before
27 there has been any breach of the obligation in respect to which said declaration
is sought.” [Emphasis Added].
28
11
NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS
ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT
1 In this action, Plaintiffs have alleged breach of contract, fraud and quiet title, therefore,
2 their declaratory relief claim relating to the parties’ rights and duties is an improper cause of
3 action since there is already a pending action for breach of contract, fraud and quiet title.
4 Declaratory relief “[i]n effect, it brings to the present a litigable controversy, which
5 otherwise might only be tried in the future.” Societe de Conditionnement en Aluminum v.
6 Hunter Eng. Co., Inc. (9th Cir. 1981) 655 F.2d 938, 943; see also Dickinson v. Indiana State
7 Election Board (7th Cir. 1991) 933 F.2d 497. The dispute between the parties regarding their
8 rights as to the Property and the agreement are before the Court through Plaintiffs’ other
9 causes of action and will be tried now, accordingly, nothing is left for the future. “The court
10 may refuse to exercise the power granted by this chapter in any case where its declaration or
11 determination is not necessary or proper at the time under all the circumstances.” Code of
12 Civ. Proc. §1061.
13 None of the purposes for a declaratory relief cause of action are present in this action.
14 An action for declaratory relief serves several purposes: The Declaratory Judgment Act is
15 “intended to fix the problem that arises when the other side does not sue.” Sony Electronics,
16 Inc. v. Guardian Media Technologies, Ltd. (Fed. Cir. 2007) 497 F.3d 1271, 1284; see Hal
17 Roach Studios, Inc. v. Richard Feiner & Co., Inc. (9th Cir. 1989) 896 F.2d 1542, 1555—
18 relieves potential defendants from “Draconian threat of impending litigation which a
19 harassing adversary might brandish”]. It permits parties uncertain of their obligations to avoid
20 incurring liability for damages by obtaining a declaratory judgment in advance of
21 performance. Societe, supra, 655 F.2d at 943. It prevents avoidable damages from being
22 incurred by a person who is not certain of his or her rights, “and affords him (or her) an early
23 adjudication of his (or her) rights without waiting until his (or her) adversary takes injurious
24 action against him (or her).” [Parentheses Added]. Heimann v. National Elevatory Industry
25 Pension Fund (5th Cir. 1999) 187 F.3d 493, 511. It promotes judicial efficiency by avoiding
26 multiplicity of actions between the parties. Societe, supra, 655 F.2d at 943.
27
28
12
NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS
ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT
1 In sum, in light of the fact that Plaintiffs have instituted an action against Defendants
2 regarding contract, fraud and the Property, the declaratory relief cause of action lacks merit
3 and serves no purpose.
4 VIII. LEAVE TO AMEND SHOULD BE DENIED.
5 A demurrer may be sustained without leave to amend where there are no circumstances
6 under which an amendment would serve any useful purpose. Okun v. Sup.Ct. (1981) 29 Cal.443,
7 460; Careau & Co. v. Security Pac. Bus. Credit, Inc. (1990) 222 Cal.App.3d 1371, 1381 (it is
8 proper to sustain a demurrer without leave to amend when the plaintiff cannot show there is a
9 “reasonable possibility that the defect can be cured by amendment.”).
10 Plaintiffs have the burden of establishing that their Complaint could be amended to cure
11 the defect. Sprinkles v. Associated Indem. Corp. (2010) 188 Cal.App.4th 69. When the defect
12 justifies striking a complaint is capable of cure, the court should allow leave to amend. Perlman
13 v. Municipal Ct. (1979) 99 Cal.App.3d 568, 575. In light of the nature of the defects in the
14 Complaint, e.g., lack of standing and statute of limitation, Plaintiffs are unable to cure the defects.
15 Accordingly, Defendants’ demurrer should be sustained without leave to amend.
16 IX. CONCLUSION.
17 Based on the foregoing, Defendants respectfully request that the Court sustain their
18 demurrer to the Complaint, without leave to amend.
19
Dated: June 7, 2021 LAW OFFICES OF SAUL REISS, P.C.
20
21
22
________________________________
23 Saul Reiss, Esq.
Fay Pugh, Esq.
24
Attorneys for Defendants
25 ARA BALJIAN and LE PHUQUE, LLC
26
27
28
13
NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS
ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT
1 DECLARATION OF FAY PUGH
2 I, Fay Pugh, declare:
3 1. I am an attorney licensed to practice before all Courts in the State of California.
4 I am an attorney with the Law Offices of Saul Reiss, the attorney of record for Defendants in
5 this action.
6 2. I have personal knowledge of the matters discussed herein. If called upon as
7 a witness, I could and would competently testify the
Preview
Saul Reiss, SBN 48528 ELECTRONICALLY FILED 1 Superior Court of California reisslaw@verizon.net Fay Pugh, SBN 198708 County of Santa Barbara 2 fay.pugh@outlook.com Darrel E. Parker, Executive Officer 3 11835 W. Olympic Blvd., Suite 415E 6/10/2021 2:51 PM Los Angeles, Ca 90064 By: Jazmine Teimori, Deputy 4 Santa Monica, CA 90405 5 Tel.: 310-450-2888 Fax.: 310-450-2885 Attorney for Defendants 6 ARA BALJIAN and LE PHUQUE, LLC 7 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 FOR THE COUNTY OF SANTA BARBARA – COOK BRANCH 10 GARY E. HAUENSTEIN, an individual, ) Case No.: 20CV03544 11 ) GWEN J. HAUENSTEIN, an individual, [Assigned to the Honorable James F. Rigali – ) 12 ) Dept. SM 2] Plaintiffs, ) 13 ) NOTICE OF GENERAL AND SPECIAL vs. ) DEMURRER AND GENERAL AND 14 ) ) SPECIAL DEMURRER BY 15 ARA BALJIAN, an individual; LE ) DEFENDANTS ARA BALJIAN AND LE PHUQUE, LLC, a business entity; ) PHUQUE, LLC TO THE COMPLAINT; 16 NATIONSTAR MORTGAGE CO., a ) MEMORANDUM OF POINTS AND 17 business entity, and DOES 1-50, inclusive, ) AUTHORITIES; DECLARATION OF ) ) FAY PUGH IN SUPPORT THEREOF 18 Defendants. ) ) [Concurrently filed with Motion to Strike and 19 ) Request for Judicial Notice] ) 20 ) ) Date: August 3, 2021 21 ) Time: 8:30 a.m. ) Place: Dept. SM 2 22 ) ) Complaint Filed: October 27, 2020 23 ) Trial Date: None 24 25 26 27 28 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT 1 TO ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD HEREIN: 2 PLEASE TAKE NOTICE THAT on the 3rd day of August, 2021, at the hour of 8:30 3 a.m. or as soon thereafter as the matter may be heard in Department SM 2 of the above-entitled 4 Court located at 312-C East Cook Street, Bldg. E., Santa Maria, California 93454, Defendants 5 ARA BALJIAN and LE PHUQUE, LLC (“Defendants”) will and hereby do demurrer to the 6 First, Second, Third, Fourth, Fifth and Sixth Causes of Action of Plaintiffs GARY E. 7 HAUENSTEIN and GWEN J. HAUENSTEIN’s (“Plaintiffs”) Complaint. 8 This General and Special Demurrer is made on the grounds that Plaintiffs cannot assert 9 the First Cause of Action for Breach of Contract, the Second Cause of Action for Fraud, the 10 Third Cause of Action for Fraud in the Inducement, the Fourth Cause of Action for Fraud in 11 the Concealment, the Fifth Cause of Action for Quiet Title and the Sixth Cause of Action for 12 Declaratory Relief since the Complaint fails to state sufficient facts to constitute any cause of 13 action against Defendants, the allegations are uncertain, ambiguous and unintelligible and the 14 claims are time barred. Code of Civil Procedure Section 430.10(e) and (f). 15 This General and Special Demurrer is based upon this Notice, the accompanying 16 Memorandum of Points and Authorities, the concurrently filed Motion to Strike and Request 17 for Judicial Notice, the Declaration of Fay Pugh, the entire records and files in this action, 18 those additional matters subject to judicial notice, and such oral and documentary evidence as 19 may be presented at or before the hearing on this Demurrer. 20 21 Dated: June 7, 2021 LAW OFFICES OF SAUL REISS, P.C. 22 23 ________________________________ 24 Saul Reiss, Esq. 25 Fay Pugh, Esq. Attorneys for Defendants 26 ARA BALJIAN and LE PHUQUE, LLC 27 28 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT 1 DEMURRER TO THE COMPLAINT 2 1. Defendants demurrer to the First Cause of Action of the Complaint for Breach 3 of Contract on the ground that it fails to state facts sufficient to constitute a cause of action 4 against Defendants. Code of Civ. Proc. §430.10(e). 5 2. Defendants demurrer to the First Cause of Action of the Complaint for Breach 6 of Contract on the ground that it is uncertain, ambiguous and unintelligible. Code of Civ. 7 Proc. §430.10(f). 8 3. Defendants demurrer to the Second Cause of Action of the Complaint for 9 Fraud on the ground that it fails to state facts sufficient to constitute a cause of action against 10 Defendants. Code of Civ. Proc. §430.10(e). 11 4. Defendants demurrer to the Second Cause of Action of the Complaint for 12 Fraud on the ground that it is uncertain, ambiguous and unintelligible. Code of Civ. Proc. 13 §430.10(f). 14 5. Defendants demurrer to the Third Cause of Action of the Complaint for Fraud 15 in the Inducement on the ground that it fails to state facts sufficient to constitute a cause of 16 action against Defendants. Code of Civ. Proc. §430.10(e). 17 6. Defendants demurrer to the Third Cause of Action of the Complaint for Fraud 18 in the Inducement on the ground that it is uncertain, ambiguous and unintelligible. Code of 19 Civ. Proc. §430.10(f). 20 7. Defendants demurrer to the Fourth Cause of Action of the Complaint for Fraud 21 in the Concealment on the ground that it fails to state facts sufficient to constitute a cause of 22 action against Defendants. Code of Civ. Proc. §430.10(e). 23 8. Defendants demurrer to the Fourth Cause of Action of the Complaint for Fraud 24 in the Concealment on the ground that it is uncertain, ambiguous and unintelligible. Code of 25 Civ. Proc. §430.10(f). 26 9. Defendants demurrer to the Fifth Cause of Action of the Complaint for Quiet 27 Title on the ground that it fails to state facts sufficient to constitute a cause of action against 28 Defendants. Code of Civ. Proc. §430.10(e). NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT 1 10. Defendants demurrer to the Fifth Cause of Action of the Complaint for Quiet 2 Title on the ground that it is uncertain, ambiguous and unintelligible. Code of Civ. Proc. 3 §430.10(f). 4 11. Defendants demurrer to the Sixth Cause of Action of the Complaint for 5 Declaratory Relief on the ground that it fails to state facts sufficient to constitute a cause of 6 action against Defendants. Code of Civ. Proc. §430.10(e). 7 12. Defendants demurrer to the Sixth Cause of Action of the Complaint for 8 Declaratory Relief on the ground that it is uncertain, ambiguous and unintelligible. Code of 9 Civ. Proc. §430.10(f). 10 Dated: June 7, 2021 LAW OFFICES OF SAUL REISS, P.C. 11 12 13 ________________________________ 14 Saul Reiss, Esq. Fay Pugh, Esq. 15 Attorneys for Defendants 16 ARA BALJIAN and LE PHUQUE, LLC 17 18 19 20 21 22 23 24 25 26 27 28 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT 1 TABLE OF CONTENTS 2 PAGE 3 I. STATEMENT OF FACTS/PROCEDURAL HISTORY. 1 4 A. THE ALLEGATIONS OF THE COMPLAINT. 1 5 B. MATTERS SUBJECT TO JUDICIAL NOTICE. 1 6 1. The Property’s History. 1 7 2. Plaintiffs’ Bankruptcy Petitions. 2 8 II. APPLICABLE LAW. 3 9 III. PLAINTIFFS LACK STANDING TO BRING THIS ACTION. 4 10 IV. THE BREACH OF CONTRACT CLAIM LACKS MERIT. 5 11 V. THE FRAUD CLAIMS ARE DEFECTIVE. 8 12 VI. PLAINTIFFS’ CLAIM FOR QUIET TITLE IS SUBJECT TO 13 A DEMURRER. 9 14 VII. THE CAUSE OF ACTION FOR DECLARATORY RELIEF 15 LACKS MERIT. 10 16 VIII. LEAVE TO AMEND SHOULD BE DENIED. 13 17 IX. CONCLUSION. 13 18 19 20 21 22 23 24 25 26 27 28 i NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT 1 TABLE OF AUTHORITIES 2 PAGE 3 CASES 4 Astenius v. State (2005) 126 Cal.App.4th 472 3 5 Blank v. Kirwan (1985) 39 Cal.3d 311 3 6 Cansino v. Bank of America (2014) 224 Cal.App.4th 1462 3 7 Careau & Co. v. Security Pac. Bus. Credit, Inc. (1990) 222 Cal.App.3d 1371 13 8 Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593 3 9 Dickinson v. Indiana State Election Board (7th Cir. 1991) 933 F.2d 497 12 10 Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951 9 11 Estate of Moss (2012) 204 Cal.App.4th 521 3 12 Guardian North Bay, Inc. v. Sup.Ct. (Myers) (2001) 94 Cal.App.4th 963 3 13 Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc. 14 (9th Cir. 1989) 896 F.2d 1542 12 15 Heimann v. National Elevatory Industry Pension Fund 16 (5th Cir. 1999) 187 F.3d 493 12 17 Kong v. City of Hawaiian Gardens Red. Agency (2002) 108 Cal.App.4th 1028 3 18 Larson v. UHS of Rancho Springs, Inc. (2014) 230 Cal.App.4th 336 3 19 Lazar v. Sup. Ct. (1996) 12 Cal.App.4th 631 9 20 Lortz v. Connell (1969) 273 Cal.App.2d 286 6 21 McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457 3 22 Okun v. Sup.Ct. (1981) 29 Cal.443 13 23 Perlman v. Municipal Ct. (1979) 99 Cal.App.3d 568 13 24 Semole v. Sansoucie (1972) 28 Cal.App.3d 714 3 25 Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167 8 26 Societe de Conditionnement en Aluminum v. Hunter Eng. Co., Inc. 27 (9th Cir. 1981) 655 F.2d 938 12 28 Sony Electronics, Inc. v. Guardian Media Technologies, Ltd. ii NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT 1 (Fed. Cir. 2007) 497 F.3d 1271 12 2 Sprinkles v. Associated Indem. Corp. (2010) 188 Cal.App.4th 69 13 3 Tarmann v. State Farm Mut. Auto Ins. Co. (1991) 2 Cal.App.4th 153 8 4 5 STATUTES 6 Code of Civ. Proc. §339(1) 6 7 Code of Civ. Proc. §761.020 9-10 8 Code of Civ. Proc. §1060 11 9 Code of Civ. Proc. §1061 12 10 Evid. Code §452 3 11 Evid. Code §453 3 12 Evid. Code §622 7, 9 13 14 OTHER AUTHORITIES 15 16 CACI 300 6 17 CACI 303 6 18 Cal. Judges Benchbook Civ. Proc. Before Trial §10.26 (April 2021 update) 4 19 5 Witkin, Cal. Proc. 5th Plead §711 (2008) 8 20 5 Witkin, Cal. Proc. 5th Plead §850 (2008) 11 21 22 23 24 25 26 27 28 iii NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT 1 MEMORANDUM OF POINTS AND AUTHORITIES 2 I. STATEMENT OF FACTS/PROCEDURAL HISTORY. 3 A. THE ALLEGATIONS OF THE COMPLAINT. 4 Plaintiffs allege that they are the owners of the real properties located at 3333 Avena 5 Road, Lompoc, California (APN 099-330-004) and adjacent parcels (the “Property”). 6 Plaintiffs allege that in or about June of 2017, they entered into an oral agreement with 7 Defendant Baljian whereby he agreed to facilitate a loan to pay off or bring current the then 8 existing debt to Defendant Nationstar Mortgage Company1 as owed by Plaintiffs. The 9 purpose of the loan by Defendant Baljian to Plaintiffs was to allow the tenant on the Properties 10 to continue to operate its business and the tenants, Plaintiffs and Defendant Baljian would 11 “financially benefit therefrom”. Defendant Baljian allegedly assured Plaintiffs that the loan 12 was not to be repaid and would be recouped from the tenant’s operation profits. Plaintiffs 13 claim that Baljian used some of the loan proceeds to pay himself, without disclosing the same 14 to Plaintiffs. 15 Based on these allegations, Plaintiffs allege causes of action for breach of contract, 16 fraud, fraud in inducement, fraud in concealment, quiet title and declaratory relief. 17 B. MATTERS SUBJECT TO JUDICIAL NOTICE. 18 1. The Property’s History. 19 As of June 2006, Plaintiffs were the owners of the Property, which they had 20 encumbered with two loans in the amounts of $150,000 and $115,000. (Request for Judicial 21 Notice (“RJN”), Exhibits 1, 2 and 3). 22 As of December 10, 2015, Plaintiffs were in default of one of the loans, which resulted 23 in the lender Defendant Nationstar Mortgage Co. recording a Notice of Default and Election 24 to Sell Under Deed of Trust. (RJN, Exhibit 4). 25 On March 18, 2016, the Notice of Trustee’s Sale was recorded. (RJN, Exhibit 5). 26 27 28 1 Defendants are informed that Defendant Nationstar Mortgage Co. was dismissed. 1 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT 1 On May 22, 2017, a second Notice of Trustee’s Sale was recorded to take place on 2 July 5, 2017. (RJN, Exhibit 6). 3 On or about June 22, 2017, Plaintiffs borrowed the sum of $168,500 from Defendant 4 Le Phuque, LLC in writing pursuant to a note, secured by a Deed of Trust against the Property. 5 The Note provided that Plaintiffs would repay the principal sum with interest from June 26, 6 2017 until paid at the rate of five percent per annum payable at maturity or upon sale 7 whichever to occur first. (RJN, Exhibit 7 and 8). 8 On May 31, 2019, Plaintiffs executed a Grant Deed transferring the Property to their 9 attorney, The Monterrosa Firm, Inc. (RJN, Exhibit 9). 10 On November 27, 2019, The Monterrosa Firm Inc. executed a Grant Deed transferring 11 the Property to Golden Phoenix, LLC. (RJN, Exhibit 10). 12 On December 26, 2019, Defendant Le Phuque, LLC caused to be recorded a Notice 13 of Default and Election to Sell Under Deed of Trust. (RJN, Exhibit 11). 14 On or about April 30, 2020, Notice of Trustee’s Sale to take placed on June 3, 2020 15 was recorded. (RJN, Exhibit 12). 16 On November 11, 2020, the Trustee’s Deed Upon Sale was recorded. (RJN, Exhibit 17 13). 18 2. Plaintiffs’ Bankruptcy Petitions. 19 After the March 18, 2016 Notice of Trustee’s Sale was recorded (RJN, Exhibit 5), on 20 April 21, 2016, Plaintiffs filed a Chapter 13 bankruptcy petition, which was dismissed less 21 than two months later on June 10, 2016. (RJN, Exhibit 14). 22 After the Notice of Trustee’s Sale was recorded on April 30, 2020 (RJN, Exhibit 12), 23 Plaintiffs filed several bankruptcy petitions, which were all dismissed, as follows: 24 Date of Filing Date of Dismissal 25 June 3, 2020 June 22, 2020 June 30, 2020 July 20, 2020 26 August 4, 2020 August 24, 2020 September 2, 2020 September 21, 2020 27 (RJN, Exhibits 15-18). 28 2 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT 1 II. APPLICABLE LAW. 2 “A demurrer tests the sufficiency of the plaintiff’s complaint, i.e., whether it states 3 facts sufficient to constitute a cause of action upon which relief may be based.” McKell v. 4 Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457; Kong v. City of Hawaiian Gardens 5 Red. Agency (2002) 108 Cal.App.4th 1028. In determining the sufficiency of a complaint, the 6 court may not assume the truth of contentions, deductions, or conclusions of fact or law or 7 deductions drawn from those legal or factual contentions or conclusions. Astenius v. State 8 (2005) 126 Cal.App.4th 472; Blank v. Kirwan (1985) 39 Cal.3d 311, 318. In Semole v. 9 Sansoucie (1972) 28 Cal.App.3d 714, the Court held that although pleadings are to be liberally 10 construed, they must nonetheless set forth essential facts with reasonable precision. 11 The allegations of the complaint are not accepted as true if they contradict or are 12 inconsistent with facts judicially noticed by the court. In ruling on a demurrer, the court may 13 consider matters outside the complaint if they are judicially noticeable under Evid. Code 14 §§452 and 453. See Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1474. 15 In ruling on a demurrer, a court may take judicial notice of admissions or inconsistent 16 statements by plaintiff in earlier pleadings in the same lawsuit, in prior similar lawsuits that 17 plaintiff had voluntarily dismissed, or in discovery documents, and may disregard conflicting 18 factual allegations in the complaint. Del E. Webb Corp. v. Structural Materials Co. (1981) 19 123 Cal.App.3d 593, 604—“Thus, a pleading valid on its face may nevertheless be subject to 20 demurrer when matters judicially noticed by the court render the complaint meritless”; Larson 21 v. UHS of Rancho Springs, Inc. (2014) 230 Cal.App.4th 336, 344. 22 A demurrer can be utilized where the complaint itself is incomplete or discloses some 23 defense that would bar recovery, e.g., dates pleaded in complaint show statute of limitations 24 has run. Guardian North Bay, Inc. v. Sup.Ct. (Myers) (2001) 94 Cal.App.4th 963, 971-972; 25 Estate of Moss (2012) 204 Cal.App.4th 521, 535 (citing text). 26 /// 27 /// 28 /// 3 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT 1 III. PLAINTIFFS LACK STANDING TO BRING THIS ACTION. 2 Plaintiffs lack standing to bring this action because they are not the real party in 3 interest, having deeded the Property to a third party, which in turn deeded the Property to yet 4 another party. (RJN, Exhibits 9 and 10). Cal. Judges Benchbook Civ. Proc. Before Trial 5 §10.26 (April 2021 update) provides in relevant part: 6 “General principles. All civil actions must be prosecuted in the name of the 7 real party in interest, except as otherwise provided by statute. CCP § 367. The phrase ‘except as otherwise provided by statute’ means that the action must 8 be prosecuted in the name of the person who has the right to prosecute the matter under the relevant statute. 321 Henderson Receivables Origination LLC 9 v Red Tomahawk (2009) 172 CA4th 290, 301–302, 91 CR3d 232. … 10 A party who is not the real party in interest does not have standing to sue, 11 because the claim belongs to someone else. In such a case, the complaint is 12 subject to a general demurrer under CCP § 430.10. City of Brentwood v Campbell (2015) 237 CA4th 488, 504, 188 CR3d 88; The H.N. & Frances C. 13 Berger Found. v Perez (2013) 218 CA4th 37, 42, 159 CR3d 434. See § 12.21. The plaintiff’s lack of standing is a fatal jurisdictional defect that requires 14 a judge to render judgment against the plaintiff. Scott v Thompson (2010) 15 184 CA4th 1506, 1510, 109 CR3d 846. See Sipple v City of Hayward (2014) 225 CA4th 349, 358, 170 CR3d 199 (standing is jurisdictional). See 16 also Marriage of Marshall (2018) 23 CA5th 477, 485–486, 232 CR3d 879 (judge’s determination that party lacks standing precludes party from 17 litigating any issue). 18 … Allegations in complaint. The plaintiff must allege sufficient facts in 19 the complaint to establish standing to sue. Codoni v Codoni (2002) 103 CA4th 18, 21, 126 CR2d 423. On a matter as fundamental as a 20 party’s standing to sue, the allegations should be direct and unequivocal, 21 not inferential. Kline Hawkes Cal. SBIC, L.P. v Superior Court (2004) 117 CA4th 183, 194, 11 CR3d 581. 22 … The plaintiff may satisfy this requirement by showing that 23 24 • The plaintiff (or the person the plaintiff properly represents) has suffered or is threatened with an injury of sufficient magnitude to reasonably ensure that the 25 relevant facts and issues will be adequately represented in the litigation. City of Irvine v Irvine Citizens Against Overdevelopment (1994) 25 CA4th 868, 874, 26 30 CR2d 797. 27 28 4 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT • The plaintiff holds the claim or owns the property that is the subject of 1 the litigation. Gantman v United Pac. Ins. Co. (1991) 232 CA3d 1560, 1566, 2 284 CR 188. 3 • The plaintiff has the right to file suit under the substantive law. Personnel Comm'n v Barstow Unified Sch. Dist. (1996) 43 CA4th 871, 877, 50 CR2d 4 797; Saks v Damon Raike & Co. (1992) 7 CA4th 419, 427, 8 CR2d 869. 5 See Vaughn v Dame Constr. Co. (1990) 223 CA3d 144, 147–149, 272 CR 261 (there may be as many real parties in interest as there are rights of action 6 under substantive law). 7 Determination of standing. A litigant’s standing to sue is a threshold issue 8 that a judge must resolve before considering the case on the merits. Mendoza v JPMorgan Chase Bank, N.A., supra, 6 CA5th at 9 810; Boorstein v CBS Interactive, Inc., supra, 222 CA4th at 465; Iglesia 10 Evangelica Latina, Inc. v Southern Pac. Latin Am. Dist. of Assemblies of God (2009) 173 CA4th 420, 445, 93 CR3d 75 (justiciable controversy 11 requires standing). The standing inquiry requires a careful judicial examination of the allegations of the complaint to determine whether the particular plaintiff 12 is entitled to an adjudication of the asserted claims. Whether a plaintiff 13 has standing generally revolves around the question of whether the plaintiff has rights that may suffer some actual or threatened injury. Clifford S. v Superior 14 Court (1995) 38 CA4th 747, 751, 45 CR2d 333. The judge must also consider whether the plaintiff has a sufficient interest in the issues to ensure that the case 15 will be pursued vigorously. City of Cupertino v City of San Jose (1995) 33 16 CA4th 1671, 1675, 40 CR2d 171. 17 Because the elements for standing are not merely pleading requirements but are an indispensable part of the plaintiff’s case, each element must be 18 supported in the same way as any other matter on which the plaintiff bears 19 the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation. Troyk v Farmers Group, Inc. (2009) 20 171 CA4th 1305, 1343, 90 CR3d 589.” 21 Plaintiffs do not have any interest in the Property having executed a Grant Deed 22 transferring the ownership of the Property to The Monterrosa Firm, Inc. (RJN, Exhibit 9), 23 which transferred the same to yet another entity. (RJN, Exhibit 10). 24 IV. THE BREACH OF CONTRACT CLAIM LACKS MERIT. 25 Plaintiffs allege that in or about June 2017, they entered into an oral agreement 26 whereby Defendant Baljian would pay off or bring current a then existing debt owed by 27 Plaintiffs to Defendant Nationstar Mortgage Co. The loan was intended to allow the current 28 tenant at the Property to operate its business and the tenant, Defendant Baljian and Plaintiffs 5 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT 1 “would financially benefit therefrom.” Defendant Baljian allegedly assured Plaintiffs that the 2 loan was not required to be repaid and would be recouped from the tenant’s business’ profits. 3 Plaintiffs believe that Defendants Baljian allegedly used some of the loan proceeds to pay 4 himself without disclosing the same to Plaintiffs. Plaintiffs further believe Defendants kept 5 secret their true intentions for use of the loan to Plaintiffs’ detriment. 6 The essential elements to be pleaded in an action for breach of contract are (i) the 7 existence of the contract, (ii) plaintiff’s performance of the contract or excuse for 8 nonperformance, (iii) defendant’s breach of the contract and (iv) the resulting damage to the 9 plaintiff. Lortz v. Connell (1969) 273 Cal.App.2d 286, 290; CACI 300 and 303. 10 First, there is no allegation that Plaintiffs entered into an agreement with Defendant 11 Le Phuque, LLC. The alleged agreement was between Defendant Baljian and Plaintiffs. 12 Therefore, Defendant Le Phuque, LLC is improperly named in this cause of action. 13 The alleged agreement was entered into in June of 2017. The Complaint was not filed 14 until almost four years later on October 27, 2020. Accordingly, the claim is time barred. The 15 statute of limitation for an oral agreement is two years. Code of Civ. Proc. §339(1). 16 Based on the documents, which the Court can judicially notice, the loan was made in 17 June of 2017. (RJN, Exhibits 7 and 8). Any obligation that Defendant Baljian had to pay off 18 or bring current the then existing loan arose at the time the loan was made in June of 2017 or 19 shortly thereafter. That is because if Defendant Baljian had not paid off the loan or had not 20 brought it to date before the scheduled trustee’s sale on July 5, 2017 (RJN, Exhibit 6), the 21 Property would have been sold. Accordingly, by no later than July 5, 2017, Plaintiffs were 22 aware whether Defendant Baljian had performed his obligation or breached the same. 23 Plaintiffs would have also known whether he had taken some of the proceeds of the loan for 24 himself. Accordingly, any breach by Defendant Baljian took place on or about July 5, 2017 25 and the statute of limitations expired two years later in July of 2019, long before the Complaint 26 was filed in this action. 27 28 6 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT 1 Third, it is vague and ambiguous what the exact terms of the alleged oral agreements 2 were, i.e., what were Plaintiffs’ obligations. Furthermore, there is no allegation that Plaintiffs 3 performed their obligations under the alleged oral agreement. 4 From the vague and ambiguous allegations of the Complaint, it appears that Plaintiffs’ 5 obligation under the oral agreement was to allow the tenant to continue operating at the 6 Property. Plaintiffs breached their obligation when they transferred the ownership of the 7 Property to a third party (RJN, Exhibit 9), which transferred it to yet another entity. (RJN, 8 Exhibit 10). Accordingly, Plaintiffs no longer had the right to allow the tenant to continue to 9 operate at the Property, which was their obligation under the alleged agreement. Accordingly, 10 Plaintiffs did not perform their obligations and breached the same. 11 Fourth, it is vague and ambiguous what Defendant Baljian’s obligations were under 12 the alleged oral agreement and there are no allegation of how he breached the same. Plaintiffs 13 may argue that his obligation was to pay off or bring current the then existing debt. There is 14 no allegation that he did not perform that obligation. In fact, based on the fact that the trustee’s 15 sale did not proceed as scheduled on July 5, 2017 (RJN, Exhibit 6), Defendant Baljian 16 performed his obligation by either paying off or bringing the debt current. Furthermore, 17 Plaintiffs have not alleged how much was owed on the then existing debt to determine if there 18 was any money left over. 19 Fifth, it is vague and ambiguous how Plaintiffs were harmed as a result of any action 20 on the part of Defendant Baljian, as there is no such allegation in the Complaint. 21 Finally, Plaintiffs’ allegation that Defendant Baljian assured them that the loan was 22 not to be repaid is contradicted by the Note and Deed of Trust. Evid. Code §622 provides 23 “The facts recited in a written instrument are conclusively presumed to be true as between the 24 parties thereto, or their successors in interest; but this rule does not apply to the recital of a 25 consideration.” In the Note, Plaintiffs promised to repay the loan with interest. (RJN, Exhibit 26 7). The allegations to the contrary are improper. 27 /// 28 /// 7 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT 1 V. THE FRAUD CLAIMS ARE DEFECTIVE. 2 From the allegations of the Complaint, it is completely vague and ambiguous who 3 committed the alleged fraud. In California, fraud must be pled with specificity. Small v. Fritz 4 Companies, Inc. (2003) 30 Cal.4th 167, 184. “The particularity demands that a plaintiff plead 5 facts which show how, when, where, to whom, and by what means the representations were 6 tendered.” Cansino, supra, 224 Cal.App.4th at 1469. The Complaint fails to allege how, when, 7 where, to whom and by what means alleged misrepresentations were made. 8 5 Witkin, Cal. Proc. 5th Plead §711 (2008) provides: 9 “1) Nature of Rule. Fraud actions have been classed as ‘disfavored,’ and are 10 subject to strict requirements of particularity in pleading. The idea seems to be that because allegations of fraud involve a serious attack on character, fairness 11 requires that the defendant receive the fullest possible details of the charge to 12 prepare a defense. 13 Accordingly, fraud must be specifically pleaded. ‘It is essential that the facts and circumstances which constitute the fraud should be set out clearly, 14 concisely, and with sufficient particularity to apprise the opposite party of what 15 he is called on to answer, and to enable the court to determine whether, on the facts pleaded, there is any foundation, prima facie at least, for the charge of 16 fraud.” (Scafidi v. Western Loan & Bldg. Co. (1946) 72 C.A.2d 550, 553, 165 P.2d 260 [quoting Corpus Juris Secundum].) 17 18 The effect of this rule is twofold: (1) General pleading of the legal conclusion of “fraud” is insufficient; the facts constituting the fraud must be alleged; and 19 (2) every element of the cause of action for fraud must be alleged in the proper 20 manner (i.e., factually and specifically), and the policy of liberal construction of the pleadings (see supra, § 442) will not ordinarily be invoked to sustain a 21 pleading defective in any material respect. (See 37 Am.Jur.2d, Fraud and Deceit § 424; for exceptions, see infra, § 714.)”. 22 Furthermore, the Complaint fails to allege a proper claim against the entity Defendant 23 Le Phuque, LLC. “The requirement of specificity in a fraud action against a corporation 24 requires the plaintiff to allege the names of the persons who made the allegedly 25 fraudulent representations, their authority to speak, to whom they spoke, what they said or 26 wrote, and when it was said or written.” Tarmann v. State Farm Mut. Auto Ins. Co. (1991) 2 27 Cal.App.4th 153, 157. 28 8 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT 1 The Complaint does not properly allege and in fact does not even allege the requisite 2 elements of a fraud claim. To establish a fraud cause of action, plaintiff must allege (1) 3 misrepresentation, (2) knowledge of falsity, (3) intent to defraud or to induce reliance, (4) 4 justifiable reliance, and (5) resulting damage. See Engalla v. Permanente Medical Group, Inc. 5 (1997) 15 Cal.4th 951, 974. Lazar v. Sup. Ct. (1996) 12 Cal.App.4th 631, 638 held: 6 “The elements of fraud, which give rise to the tort action for deceit, are (a) 7 misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; 8 (d) justifiable reliance; and (e) resulting damage.” (5 Witkin, Summary of 9 Cal.Law (9th ed. 1988) Torts, **985 ***381 §676, p. 778; see also Civ.Code, §1709; Hunter, supra, 6 Cal.4th 1174, 1184, 26 Cal.Rptr.2d 8, 864 P.2d 88; 10 Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1108, 252 Cal.Rptr. 122, 762 P.2d 46.)”. 11 Plaintiffs falsely assert that Defendants intentionally did not disclose to them that they 12 intended to demand repayment of the loan. The Court’s attention is respectfully directed to 13 the Note and Deed of Trust (RJN, Exhibits 7 and 8), which clearly provide that Plaintiffs 14 agreed in writing to repay the loan. “The facts recited in a written instrument are conclusively 15 presumed to be true as between the parties thereto, or their successors in interest; but this rule 16 does not apply to the recital of a consideration.” Evid. Code §622. 17 As to the alleged use of the profits from the operation of the farm, as stated above, 18 once Plaintiffs deeded the Property to a third party, who in turn deeded the same to yet another 19 party, Plaintiffs were no longer able to lease the Property to the tenant, which could make 20 profit from the operation of the farm. 21 VI. PLAINTIFFS’ CLAIM FOR QUIET TITLE IS SUBJECT TO A DEMURRER. 22 Plaintiffs’ claim for quiet title is defective since the Complaint is not verified, does 23 not contain a description of the property at issue, the title claimed by Plaintiffs, the claims 24 adverse to Plaintiffs’ alleged title, the date as to which the determination is sought and a prayer 25 for the determination of the Plaintiffs’ title against the adverse claim as required by Code of 26 Civ. Proc. §761.020, which provides as follows: 27 /// 28 9 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT “The complaint shall be verified and shall include all of the following: 1 2 (a) A description of the property that is the subject of the action. … In the case of real property, the description shall include both its legal description and its 3 street address or common designation, if any. 4 (b) The title of the plaintiff as to which a determination under this chapter is 5 sought and the basis of the title. … 6 (c) The adverse claims to the title of the plaintiff against which a determination 7 is sought. 8 (d) The date as of which the determination is sought. If the determination is sought as of a date other than the date the complaint is filed, the complaint shall 9 include a statement of the reasons why a determination as of that date is sought. 10 (e) A prayer for the determination of the title of the plaintiff against the adverse 11 claims.” 12 As stated above, Plaintiffs are not the owners of the Property, having deeded the same 13 to a third party, who deeded the same to yet another third party. (RJN, Exhibits 9 and 10). 14 Accordingly, Plaintiffs have no standing to bring this claim. 15 In paragraph 25 of the Complaint, Plaintiffs assert that they secured a mortgage from 16 Defendant Nationstar Mortgage Co. in or about 2017 for the approximate sum of $138,000. 17 However, the history of the Property does not include any such loan. (RJN, Exhibit 1). 18 In paragraph 26, Plaintiffs falsely allege that Defendant Baljian asserts he is the owner 19 of a deed of trust. As the history of the Property reflects, Defendant Baljian does not claim 20 an interest in the Property. (RJN, Exhibit 1). In June of 2017, Plaintiffs executed a deed of 21 trust and note in favor of Defendant Le Phuque, LLC. (RJN, Exhibits 7 and 8). 22 VII. THE CAUSE OF ACTION FOR DECLARATORY RELIEF LACKS MERIT. 23 Plaintiffs allege that an actual controversy exists between them and Defendants with 24 respect to their respective rights and duties regarding the Note and Trust Deed. (Complaint, 25 ¶33). It is completely vague and ambiguous which Defendants and which “Note” and “Trust 26 Deed” Plaintiffs are referring to. Additionally, Plaintiffs are alleging that Defendants did not 27 have the authority or legal right to foreclose upon and sell the Properties. (Complaint, ¶34). 28 Once again, it is unclear which “Defendants” Plaintiffs are referring to. 10 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT 1 Assuming that Plaintiffs are referring to the Note and Deed of Trust in favor of 2 Defendant Le Phuque, LLC (RJN, Exhibits 7 and 8), Defendant Le Phuque, LLC foreclosed 3 on the Property. (RJN, Exhibit 11). Defendant Baljian has been improperly named in this 4 cause of action. The Property was deeded away by Plaintiffs, accordingly, the Deed of Trust 5 secured by the Property is no longer at issue between Plaintiffs and Defendant Le Phuque, 6 LLC. 7 As set forth above, having deeded the Property to a third party, who deeded the same 8 to yet another third party (RJN, Exhibits 9 and 10), Plaintiffs have no standing to bring this 9 claim. 10 The purpose of a declaratory relief action is to seek declaration of rights before an 11 actual invasion of those rights have occurred, e.g., a contract has been breached and an action 12 instituted. 5 Witkin, Cal. Proc. 5th Plead §850 (2008) in relevant part provides: 13 “(2) Purpose and Scope. The action is unusual in that it may be brought to 14 determine and declare rights before an actual invasion of those rights has occurred. Thus, it operates prospectively, rather than merely to redress past 15 wrongs. (Gafcon v. Ponsor & Associates (2002) 98 C.A.4th 1388, 1403, 120 C.R.2d 392, 1Cal. Proc. (5th), Attorneys, § 386; Canova v. Trustees of Imperial 16 Irr. Dist. Employee Pension Plan (2007) 150 C.A.4th 1487, 1497, 59 C.R.3d 17 587.).” 18 Code of Civ. Proc. §1060 provides: 19 “Any person interested under a written instrument, excluding a will or a trust, 20 or under a contract, or who desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property, or with 21 respect to the location of the natural channel of a watercourse, may, in cases of actual controversy relating to the legal rights and duties of the respective parties, 22 bring an original action or cross-complaint in the superior court for a declaration 23 of his or her rights and duties in the premises, including determination of any question of construction or validity arising under the instrument or contract. He 24 or she may ask for a declaration of rights or duties, either alone or with other relief; and the court may make a binding declaration of these rights or duties, 25 whether or not further relief is or could be claimed at the time. The declaration 26 may be either affirmative or negative in form and effect, and the declaration shall have the force of a final judgment. The declaration may be had before 27 there has been any breach of the obligation in respect to which said declaration is sought.” [Emphasis Added]. 28 11 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT 1 In this action, Plaintiffs have alleged breach of contract, fraud and quiet title, therefore, 2 their declaratory relief claim relating to the parties’ rights and duties is an improper cause of 3 action since there is already a pending action for breach of contract, fraud and quiet title. 4 Declaratory relief “[i]n effect, it brings to the present a litigable controversy, which 5 otherwise might only be tried in the future.” Societe de Conditionnement en Aluminum v. 6 Hunter Eng. Co., Inc. (9th Cir. 1981) 655 F.2d 938, 943; see also Dickinson v. Indiana State 7 Election Board (7th Cir. 1991) 933 F.2d 497. The dispute between the parties regarding their 8 rights as to the Property and the agreement are before the Court through Plaintiffs’ other 9 causes of action and will be tried now, accordingly, nothing is left for the future. “The court 10 may refuse to exercise the power granted by this chapter in any case where its declaration or 11 determination is not necessary or proper at the time under all the circumstances.” Code of 12 Civ. Proc. §1061. 13 None of the purposes for a declaratory relief cause of action are present in this action. 14 An action for declaratory relief serves several purposes: The Declaratory Judgment Act is 15 “intended to fix the problem that arises when the other side does not sue.” Sony Electronics, 16 Inc. v. Guardian Media Technologies, Ltd. (Fed. Cir. 2007) 497 F.3d 1271, 1284; see Hal 17 Roach Studios, Inc. v. Richard Feiner & Co., Inc. (9th Cir. 1989) 896 F.2d 1542, 1555— 18 relieves potential defendants from “Draconian threat of impending litigation which a 19 harassing adversary might brandish”]. It permits parties uncertain of their obligations to avoid 20 incurring liability for damages by obtaining a declaratory judgment in advance of 21 performance. Societe, supra, 655 F.2d at 943. It prevents avoidable damages from being 22 incurred by a person who is not certain of his or her rights, “and affords him (or her) an early 23 adjudication of his (or her) rights without waiting until his (or her) adversary takes injurious 24 action against him (or her).” [Parentheses Added]. Heimann v. National Elevatory Industry 25 Pension Fund (5th Cir. 1999) 187 F.3d 493, 511. It promotes judicial efficiency by avoiding 26 multiplicity of actions between the parties. Societe, supra, 655 F.2d at 943. 27 28 12 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT 1 In sum, in light of the fact that Plaintiffs have instituted an action against Defendants 2 regarding contract, fraud and the Property, the declaratory relief cause of action lacks merit 3 and serves no purpose. 4 VIII. LEAVE TO AMEND SHOULD BE DENIED. 5 A demurrer may be sustained without leave to amend where there are no circumstances 6 under which an amendment would serve any useful purpose. Okun v. Sup.Ct. (1981) 29 Cal.443, 7 460; Careau & Co. v. Security Pac. Bus. Credit, Inc. (1990) 222 Cal.App.3d 1371, 1381 (it is 8 proper to sustain a demurrer without leave to amend when the plaintiff cannot show there is a 9 “reasonable possibility that the defect can be cured by amendment.”). 10 Plaintiffs have the burden of establishing that their Complaint could be amended to cure 11 the defect. Sprinkles v. Associated Indem. Corp. (2010) 188 Cal.App.4th 69. When the defect 12 justifies striking a complaint is capable of cure, the court should allow leave to amend. Perlman 13 v. Municipal Ct. (1979) 99 Cal.App.3d 568, 575. In light of the nature of the defects in the 14 Complaint, e.g., lack of standing and statute of limitation, Plaintiffs are unable to cure the defects. 15 Accordingly, Defendants’ demurrer should be sustained without leave to amend. 16 IX. CONCLUSION. 17 Based on the foregoing, Defendants respectfully request that the Court sustain their 18 demurrer to the Complaint, without leave to amend. 19 Dated: June 7, 2021 LAW OFFICES OF SAUL REISS, P.C. 20 21 22 ________________________________ 23 Saul Reiss, Esq. Fay Pugh, Esq. 24 Attorneys for Defendants 25 ARA BALJIAN and LE PHUQUE, LLC 26 27 28 13 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS ARA BALJIAN AND LE PHUQUE, LLC TO THE COMPLAINT 1 DECLARATION OF FAY PUGH 2 I, Fay Pugh, declare: 3 1. I am an attorney licensed to practice before all Courts in the State of California. 4 I am an attorney with the Law Offices of Saul Reiss, the attorney of record for Defendants in 5 this action. 6 2. I have personal knowledge of the matters discussed herein. If called upon as 7 a witness, I could and would competently testify the