FIRST TRUST, et al. vs ACTION ENTERPRISES NEVADA LLC, et al.

A Stipulation and Appointment of Official Reporter Pro Tempore (CV/E-206) is required to be signed by each party, the private court reporter, and the Judge prior to the hearing, if not using a reporter from the Court’s Approved Official Reporter Pro Tempore list.

Once the form is signed it must be filed with the clerk. If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk

24CV009934: FIRST TRUST, et al. vs ACTION ENTERPRISES NEVADA LLC, et al. 01/16/2025 Hearing on Demurrer to plfs Answer to Cross-Complaint in Department 53

will forward the form to the Court Reporter’s Office and an official reporter will be provided.

TENTATIVE RULING: Self-represented Cross-Complainant Jon Mehl’s demurrer to Cross-Defendant First Trust, Carl Dexter, Trustee’s (“First Trust”) answer is overruled.

First Trust filed its complaint on May 20, 2024, against Howard Smith, Mehl, and Action Enterprises Nevada, LLC. First Trust alleges cause of action for breach of contract and common counts. First Trust alleges that Howard Smith was the sole member of Action Enterprises Nevada, LLC. It alleges that it entered into an agreement with Smith and Mehl pursuant to which First Trust would lend them money in connection with work needed to close a mine.

Mehl filed a verified cross-complaint on July 31, 2024 for declaratory relief, along with an answer to the complaint. In the cross-complaint, Mehl seeks various declarations, including that he is not a proper party to the action because he had no control or involvement over Action Enterprises Nevada, LLC, or Howard Smith, and that he is not liable for the alleged breach of contract or common counts.

On August 29, 2024, First Trust filed its verified answer to Mehl’s cross-complaint. First Trust generally and specifically denied certain factual allegations and asserted a single affirmative defense. That defense stated that “[t]he entire cross-complaint is irrelevant in that cross-complaint’s championed position in this cross-complaint is completely set out in his Answer to the complaint filed on 20 May 2024, and therefore such crosscomplaint is unnecessary and amounts to nothing more that [sic] busy work for the parties, and for the Court.” (Answer [italics in original].)

Mehl now demurs to the answer on the basis that it fails to state facts sufficient to constitute a defense and also is uncertain.

CCP § 430.20(a) provides for a demurrer to an answer, where “The answer does not state facts sufficient to constitute a defense.” Here, First Trust specifically and generally denied all of Mehl’s cross-complaint’s factual allegations and thus put all the material allegations of that pleading at issue. Thus, at the very most, Mehl can only challenge the affirmative defense set forth in the answer, and it appears that this is what the demurrer challenges. Mehl cites to FPI Development, Inc. v. Nakashima (1991) 231 Cal.

App. 3d 367 as support for his argument that the affirmative defense is pled as a terse legal conclusion, rather than averred as carefully and with as much detail as the facts which constitute the cause of action and are alleged in the complaint. (Id. at 384.) The Court would note that FPI states that “[a] pleading may be defective in failing to allege an element of a cause of action or in failing to intelligibly identify a defense

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV009934: FIRST TRUST, et al. vs ACTION ENTERPRISES NEVADA LLC, et al. 01/16/2025 Hearing on Demurrer to plfs Answer to Cross-Complaint in Department 53

thereto. In such a case, the moving party need not address a missing element or, obviously, respond to assertions which are unintelligible or make out no recognizable legal claim.” (Id. at 382.) However, the FPI decision did not address the manner in which one might properly plead affirmative defenses, but rather was an appeal from a grant of summary judgment. In that context the Court addressed the adequacy of pleadings to put in issue a defense, after the previous quoted language, stating, “[t]hus, a defect in the answer may entitle the moving party plaintiff to a summary judgment if the only matter in dispute is a defense that has not been intelligibly asserted in the answer.” (Id.)

Here, First Trust’s answer meets the standard for pleading its affirmative defense, when read in context of Mehl’s Cross-Complaint, and the answer provides fair notice of its defenses. “The determination of the sufficiency of the answer requires an examination of the complaint because its adequacy is with reference to the compliant it purports to answer.” (South Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 733.) A cardinal rule of pleading is that only the ultimate facts need be alleged. (Semole v.

Sansoucie (1972) 28 Cal. App. 3d 714, 719.) The rules applicable to pleading a proper affirmative defense are similar. The particularity required in pleading facts depends on the extent to which the plaintiff/cross-complainant in fairness needs detailed information that can be conveniently provided by the defendant/cross-defendant; less particularity is required where the plaintiff/cross-complainant may be assumed to have knowledge of the facts equal to that possessed by the defendant/cross-defendant.

There is no need to require specificity in the pleadings because modern discovery procedures necessarily affect the amount of detail that should be required in a pleading. (Ludgate Ins. Co. v. Lockheed Martin Corp., (2000) 82 Cal. App. 4th 592, 608.) The affirmative defense is clear with respect to the facts upon which it is based. First Trust contends that Mehl’s cross-complaint for declaratory relief is unnecessary because in essence it does nothing more than repeat Mehl’s answer and does not actually set forth a basis for relief.

Thus, the facts upon which the affirmative answer is premised are plainly set forth. No further factual detail is needed. Indeed, declaratory relief may be denied in cases where it is not necessary or proper under the circumstances. (CCP § 1061.) Thus, the affirmative defense, although perhaps not artfully pled, sets forth a valid defenses with sufficient detail.

Mehl also argues that the affirmative defense is uncertain. The Court disagrees. Demurrers for uncertainty are disfavored and only sustained where the pleading is so muddled that a party cannot reasonably respond. The favored approach is to clarify any uncertainty or ambiguity through discovery. (Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.) First Trust’s answer is not so muddled with respect to its affirmative defense. Any uncertainty may be clarified in discovery.

In short, the demurrer is overruled in its entirety.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV009934: FIRST TRUST, et al. vs ACTION ENTERPRISES NEVADA LLC, et al. 01/16/2025 Hearing on Demurrer to plfs Answer to Cross-Complaint in Department 53

The minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or further notice is required.