Israel Alcantara et al. v. CNC Properties, LLC et al.

to understand the nature of the documents and failed to consult an attorney until after default had been entered against him. This evidence shows the absence of ordinary care.

Further, although Corado attests he was managing health issues at the time he learned of this action, there is no evidence Corado's illness caused him to be unable to understand he was served with process. (See Corado Decl., P. 6; see also Kesselman v. Kesselman (1963) 212 Cal.App. 2d 196, 207-208.)

Although the Court is sympathetic to Corado's health issues, that he was preoccupied with the same is not ground for relief as he had the duty to promptly retain or consult counsel.

Thus, the Court DENIES Defendant's Motion to Set Aside Default.

V. CONCLUSION

Based on the foregoing, the Court DENIES Defendant's Motion to Set Aside Default.

IT IS SO ORDERED.

DATED: August 19, 2026

Hon. Michael R. Amerian

Judge, Superior Court

| [1] All statutory references are to California codes unless stated otherwise.

SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF LOS ANGELES - NORTHWEST DISTRICT

ISRAEL ALCANTARA, an individual, SUSANA PAROCUA, an individual, DANNY SEBASTIAN ALCANTARA, an individual, LOPEZ EMMANUEL ALEXANDER, an individual, ROCHA DIAZ JORGE ARMANDO, an individual, ANTONIO ZOQUITECATL ORTIZ, an individual, Plaintiff, vs. CNC PROPERTIES, LLC, a California limited liability company, ATLANTIC STAR, LLC, a California limited liability company, KYUNG MI CHOI, an individual, and DOES 1-10, inclusive, Defendants. |))))))))))))

))))))))))))) | CASE NO.: 26VECV01958

ORDER SUSTAINING IN PART DEFENDANTS' DEMURRER WITH AND WITHOUT LEAVE TO AMEND

ORDER GRANTING IN PART DEFENDANTS' MOTION TO STRIKE WITH AND WITHOUT LEAVE TO AMEND

| ATLANTIC STAR, LLC, a California limited liability company; and CNC PROPERTIES, LLC, a California limited liability company, Cross-Complainants, vs. ISRAEL ALCANTARA, an individual; SUSANA PAROCUA, an individual; and ROES 1 through 20, inclusive, Cross-Defendants. |)))))))))))))))))))) |

| I. BACKGROUND

Plaintiffs Israel Alcantara ("Alcantara"), Susana Parocua ("Parocua") (jointly, "Tenant Plaintiffs"), Danny Sebastian Alcantara, Lopez Emmanuel Alexander, Rocha Diaz Jorge Armando, and Antonio Zoquitecatl Ortiz (collectively, "Employee Plaintiffs") (collectively, "Plaintiffs") allege Defendants CNC Properties, LLC ("CNC"), Atlantic Star, LLC ("Atlantic Star"), and Kyung Mi Choi ("Choi") (jointly, "Defendants") created and maintained a hazardous and unsafe working environment at 15826 Ventura. Bl., Suite 110, Encino, CA 91436 (the "Property").

Plaintiffs own or are employed at a restaurant that operates from a unit at the Property. As a result of these violations, Plaintiffs allege they suffered serious health problems arising from issues, including but not limited to, massive water leakage, water damage, flooding, and mold exposure.

Atlantic Star and CNC have filed a Cross-Complaint alleging breach of contract related claims against Alcantara and Parocua.

Defendants demurrer to the FAC. ///

II. PROCEDURAL HISTORY

On April 2, 2026, Plaintiff filed a Complaint alleging (1) Breach of Contract; (2) Negligence; (3) Violation of California Civil Code section 1927 (Contractual and Tortious Breach of Covenant of Quiet Enjoyment); (4) Violation of California Civil Code section 1929; (5) Violation of California Health and Safety Code section 17920.3; (6) Negligent Misrepresentation; (7) Negligence Per Se (Violation of Building Codes and Health and Safety Codes); (8) Negligent Infliction of Emotional Distress; (9) Breach of the Implied Covenant of Good Faith and Fair Dealing; (10) Violation of Business and Professions Code sections 17200, et seq. (11) Premises Liability; and (12) Injunctive Relief.

On June 17, 2026, Plaintiffs filed a First Amended Complaint ("FAC") alleging (1) Breach of Contract; (2) Negligence; (3) Violation of California Civil Code section 1927 (Contractual and Tortious Breach of Covenant of Quiet Enjoyment); (4) Intentional Misrepresentation (Fraud); (5) Negligent Misrepresentation; (6) Negligence Per Se (Violation of Building Codes and Health and Safety Codes); (7) Negligent Infliction of Emotional Distress; (8) Breach of the Implied Covenant of Good Faith and Fair Dealing; (9) Nuisance; (10) Fraudulent Concealment; (11) Violation of Business and Professions Code sections 17200, et seq.: (12) Premises Liability; and (13) Injunctive Relief.

On July 23, 2026, the Court denied Plaintiffs' Motion to Compel Atlantic Star's and Choi's responses to their Special Interrogatories, Set One, Requests for Production of Documents, Set One, and Requests for Admissions, Set One.

On July 17, 2026, Defendants filed the instant Demurrer with Motion to Strike and Cross-Complaint.

On July 17, 2026, Cross-Complainants Atlantic Star and CNC filed a Cross-Complaint alleging (1) Breach of Contract; (2) Contractual Indemnity; (3) Implied Indemnity; (4) Negligence; (5) Contribution and Apportionment; and (6) Declaratory Relief against Alcantara and Parocua.

On August 5, 2026, Plaintiffs filed their Oppositions. [1]

On August 6, 2026, the Court denied Defendants' Motion for Discovery Sanction.

On August 12, 2026, Defendants filed their Replies.

III. MEET AND CONFER

Before filing a demurrer or motion to strike, the moving party shall meet and confer in person, by telephone, or by video conference with the party who filed the pleading subject to demurrer or motion to strike for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer or motion to strike. (See Code Civ. Proc. Sec. 430.41(a), Sec.435.5(a).)

A declaration must be filed with a demurrer regarding the results of the meet and confer process. (See Code Civ. Proc. Sec. 430.41(a)(3).)

Defendants' counsel satisfied their meet and confer obligation. (See Declaration of Jieun Park filed July 17, 2026, P. 3.)

IV. DEMURRER

A.

Legal Standard

A demurrer may be brought if insufficient facts are stated to support the cause of action asserted. (See Code Civ. Proc. Sec. 430.10(e).) [2] "A demurrer tests the sufficiency of a complaint as a matter of law." ¿ (Durell v. Sharp Healthcare ¿ (2010) 183 Cal.App.4th 1350, 1358.)

"[T]he court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded." ¿ (Id.)

Allegations are to be liberally construed. (See Code Civ. Proc. Sec. 452.)

In testing the sufficiency of the complaint, the court must assume the truth of (1) the properly pleaded factual allegations; (2) facts that can be reasonably inferred from those expressly pleaded; and (3) judicially noticed matters. (See Blank v. Kirwan ¿ (1985) 39 Cal.3d 311, 318.)

A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. (See SKF Farms v. Superior Court ¿ (1984) 153 Cal.App.3d 902, 905.)

Accordingly, "[w]hether the plaintiff will be able to prove the pleaded facts is irrelevant to ruling upon the demurrer." (Stevens v. Superior Court ¿ (1986) 180 Cal.App.3d 605, 609-610.)

To the extent factual allegations conflict with the content of the exhibits to the complaint, we rely on and accept as true the contents of the exhibits and treat as surplusage the pleader's allegations as to the legal effect of the exhibits. (See Barnett v. Fireman's Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505.)

A demurrer can only be sustained when it disposes of an entire cause of action. ¿ (See Poizner v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119; Kong v. City of Hawaiian Gardens Redev. Agency (2003) 108 Cal.App.4th 1028, 1046.)

A demurrer may be brought if the pleading is uncertain, ambiguous, or unintelligible. (See Code Civ. Proc. Sec. 430.10(f).)

"A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures." (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616.)

As a result, a special demurrer for uncertainty is not intended to reach failure to incorporate sufficient facts in the pleading but is directed only at uncertainty existing in the allegations already made. (See People v. Taliaferro (1957) 149 Cal.App.2d 822, 825.)

Where complaint is sufficient to state a cause of action and to apprise defendant of issues he is to meet, it is not properly subject to a special demurrer for uncertainty. (See ibid.; see also Gressley v. Williams (1961) 193 Cal.App.2d 636, 643 ["[a] special demurrer [for uncertainty] should be overruled where the allegations of the complaint are sufficiently clear to apprise the defendant of the issues which he is to meet"].) ¿

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.)

The burden is on the complainant to show the Court a pleading can be amended successfully. (See id.)

However, "[i]f there is any reasonable possibility that the plaintiff can state a good cause of action, it is error to sustain a demurrer without leave to amend." (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 245.)

B. Analysis

1. Demurrer to all Causes as to Choi

Defendants argue the FAC fails to state any cause of action against Choi as the FAC only alleges she is the owner of Atlantic. (See Dem. at 12:10-14 citing FAC P. 11; Reply at 3:11-14.)

Defendants argue the FAC fails to allege facts establishing any basis for personal liability against Choi and fails to allege facts sufficient to support application of the alter ego doctrine. (See id., at 12:25-27.)

Defendants argue it is insufficient to name Choi as a defendant and repeatedly refer to "Defendants" collectively. (See id., at 12:23-25.)

Plaintiffs argue the FAC sufficiently states its claims against Choi because it alleges Choi personally owned, managed, controlled, directed, authorized, approved, ratified, and participated in the acts and omissions giving rise to Plaintiffs' injuries. (See Opp. at 8:18-20.)

Plaintiffs also argue the FAC alleges Defendants possessed actual knowledge of the habitability issues. (See id., at 9:7-13.)

The Court agrees with Defendants.

The FAC insufficiently alleges its causes of action against Choi.

Here, Plaintiffs' claims are based upon the lease agreement--between Alcantara and Parocua (jointly, "Tenant Plaintiffs") and Atlantic --and Defendants' breach under the lease agreement. (See id., P. 16, Ex. 1.)

Specifically as to Choi, the FAC alleges "Atlantic holds the Property as an asset. Choi is the owner of the Property, through Atlantic, which she wholly owns." (FAC, P.P. 10-11.)

The FAC asserts multiple claims against multiple defendants and collectively refers to the three defendants as "Defendants" throughout the FAC without specifying which defendant is responsible for which act.

This pleading style is problematic here because there are three defendants and six plaintiffs with different relationships to each other.

For example, because the only defendant who is a party to the lease agreement is Atlantic, it is not reasonable to infer the allegations - as currently pled - collectively referring to Defendants under the first cause of action also implicate Choi. (See e.g. FAC, P. 70 ["Defendants breached their duties and obligations, under the Lease Agreement"].)

Further, there are no alter ego allegations to hold Choi, the owner of Atlantic, liable or ultimate facts supporting the legal conclusion that Choi is an agent of all other Defendants. (See FAC P. 13; see also Curci Investments, LLC v. Baldwin (2017) 14 Cal.App.5th 214, 220-221 [an LLC is a separate legal entity distinct from its members and managers; however, under the alter ego doctrine, that legal separation may be disregarded]; see also Corp. Code Sec. 17703.04(a)-(b).) .)

There are also no other allegations specific to Choi's personal liability.

The Court further finds it insufficient for the FAC to collectively allege "Defendants made representations to Plaintiffs" or "Defendants breached their duties" where each Defendant had a different role and relationship to each Plaintiff and the FAC lacks factual allegations of the representations each Defendant made and to whom and their respective duties.

The issue isn't that the causes of action or facts need to be pled with specificity.

Rather, the issue is Plaintiffs need to plead them with enough specificity so as to meet the bare minimum of this state's notice pleading requirements.

Thus, the Court SUSTAINS Defendants' Demurrer as to Choi WITH LEAVE TO AMEND.

2. Breach of Contract & Breach of Covenant of Quiet Enjoyment (By Tenant Plaintiffs as to Defendants)

To state a cause of action for breach of contract, Plaintiff must be able to establish "(1) the existence of the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to the plaintiff." (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)

If a breach of contract claim "is based on alleged breach of a written contract, the terms must be set out verbatim in the body of the complaint or a copy of the written agreement must be attached and incorporated by reference." (Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 307.)

"[E] very lease contains an implied covenant of quiet enjoyment, whereby the landlord impliedly covenants that the tenant shall have quiet enjoyment and possession of the premises. [Citations.] The covenant of quiet enjoyment 'insulates the tenant against any act or omission on the part of the landlord, or anyone claiming under him, which interferes with a tenants right to use and enjoy the premises for the purposes contemplated by the tenancy.'" (Andrews v. Mobile Aire Estates (2005) 125 Cal.App.4th 578, 588.)

The implied covenant of quiet enjoyment gives rise to a contractual duty. (See id. at 591.)

Defendants argue the breach of contract claim fails to state a claim against CNC and Choi.

Defendants argue the FAC fails to adequately allege the existence of a contract between Tenant Plaintiffs and CNC and Choi, as Exhibit 1 shows only Atlantic Star is a party to the lease agreement. (See Dem. at 13:10-15.)

Defendants argue the FAC contains no allegations CNC or Choi assumed obligations under the lease. (See id., at 13:16-20.)

Defendants also argue because the covenant of quiet enjoyment arises from the lease, the breach of the covenant of quiet enjoyment claim also fails for the foregoing reasons. (See Dem. at 14:19-20; Reply at 4:12-18.)

Plaintiffs argue whether CNC assumed contractual obligations through agency, management responsibilities, or other legal theories presents factual issues that cannot be resolved on demurrer. (See Opp. at 11:11-13, 12:7-12.)

Plaintiffs also argue Choi's liability is not limited to contractual privity and the FAC alleges Choi personally participated in and directed the conduct giving rise to Plaintiffs' injuries. (See id., at 11:16-18.)

Defendants argue Exhibit 1 controls over the allegations and the lease agreement shows the contractual party was Atlantic Star, not Choi or CNC. (See Reply at 4:1-2.)

Defendants argue pleading agency would not alter contractual privity nor an assumption of lease obligations. (See id., at 4:5-11, citing Stoiber v. Honeychuck (1980) 101 Cal.App.3d 903, 929-930 ["an agent is ordinarily not liable on the contract when he acts on behalf of a disclosed principal"].)

The Court finds the breach of contract and breach of the covenant of quiet enjoyment claims are insufficient as to Choi and CNC as the FAC fails to plead the existence of a contract with respect to these Defendants.

The Court accepts as true the contents of Exhibit 1, which show the contracting parties are Tenant Plaintiffs and Atlantic, and treat as surplusage the FAC's allegations that "Plaintiffs and Defendants entered into the lease agreement..." (FAC, P. 16, Ex. 1.)

While the Court is skeptical of Plaintiffs' ability to amend these causes of action to connect Choi or CNC to Atlantic Star so as to hold them liable for liability under the contract, e.g., through alter ego allegations, the Court also believes they should be afforded the opportunity to do so now that the defect in their approach has been laid bare.

Thus, the Court SUSTAINS Defendants' Demurrer to the First Cause of Action for Breach of Contract and Third Cause of Action for Breach of the Covenant of Quiet Enjoyment as to Choi and CNC WITH LEAVE TO AMEND.

3. Intentional Misrepresentation

"The elements of a cause of action for intentional misrepresentation are (1) a misrepresentation, (2) with knowledge of its falsity, (3) with the intent to induce another's reliance on the misrepresentation, (4) actual and justifiable reliance, and (5) resulting damage." (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1166.)

The facts constituting the alleged fraud must be alleged factually and specifically as to every element of fraud, as the policy of "liberal construction" of the pleadings will not ordinarily be invoked. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

To properly allege fraud against a corporation, the plaintiffs must plead the names of the persons allegedly making the false 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.)

Defendants argue the intentional misrepresentation claim makes conclusory allegations Defendants knew their representations were false and lacks specificity. (See Dem. at 15:6-9, 15:27.)

Plaintiffs argue the FAC alleges Choi withheld material information and although fraud must be pled with specificity, this requirement is relaxed where matters are exclusively within the knowledge of defendants. (See Opp. at 14:16-26.)

Plaintiffs argue the FAC alleges the subject of the misrepresentations, to whom the representations were directed, Plaintiff's reliance, and damages. (See id., at 15:7-11.)

Plaintiffs further argue the FAC alleges each Defendant acted as an agent of the other, and thus it is not necessary to allege who made each representation. (See id., at 17:3-10.)

In their Reply, Defendants argue the FAC fails to allege who said what, when, to whom, by what means, or why any statement was false when made. (See Reply at 5:2-3.)

Defendants argue the specificity requirement should not be relaxed here where Plaintiffs know who spoke to them, what representations were made, when it was said, and why Plaintiffs relied on those representations. (See id., at 5: 14-17.)

Defendants also argue general agency allegations do not satisfy the particularity requirement. (See id., at 5:25.)

The Court finds the knowledge of falsity element is insufficiently alleged as the FAC only makes the conclusory allegation "Defendants knew these representations were false when they made them." (FAC, P. 89; see Cansino v. Bank of Amer. (2014) 224 Cal.App.4th 1462, 1472 ["Nor is the knowledge element of fraud satisfied by the complaint's conclusory statement that defendants 'knew that the ... [r]epresentation[] [was] either false or at least highly speculative' because the allegation does not identify how defendants knew that the 2005 appraisal misrepresented the market value of the property at the time the property was appraised."]; Wilhelm v. Pray (1986) 186 Cal.App.3d 1324, 1331 ["the complaint fails to plead with specificity a factual basis for how Cohen 'knew' the representations she communicated to Goodman on behalf of Leedy were false."].)

The FAC also fails to allege facts as to "how, when, where, to whom, and by what means the representations were tendered." (See Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.)

Here, the FAC alleges "Defendants made false representations to Plaintiffs, regarding the rental of the Property, and the condition, maintenance, and safety of the Property, as set forth herein." (FAC, P. 87.)

The Court agrees with Defendants the specificity requirement is not relaxed in a claim for intentional misrepresentation.

Less specificity as to fraud claims is required if it appears from the nature of allegations that defendant must necessarily possess full information, or if the facts lie more in the knowledge of opposing parties. (Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384-1385.)

However, that is not the case here.

The Court agrees with Defendants that Plaintiffs would know the details of the representations made to them and which they base their claims upon.

Thus, the Court SUSTAINS Defendants' Demurrer to the Fourth Cause of Action for Intentional Misrepresentation WITH LEAVE TO AMEND.

4. Negligent Misrepresentation

The elements of negligent misrepresentation are: (1) misrepresentation of a past or existing material fact, without reasonable ground for believing it to be true, and with intent to induce another's reliance on the fact misrepresented; (2) ignorance of the truth and justifiable reliance on the misrepresentation by the party to whom it was directed; and (3) resulting damage. (See Hydro-Mill Co., Inc. v. Hayward, Tilton & Rolapp Ins. Associates, Inc. (2004) 115 Cal.App.4th 1145, 1154.)

California law is somewhat unsettled as to whether negligent misrepresentation must be pled specifically. (See Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184; see also National Union Fire Ins. Co. of Pittsburgh, PA v. Cambridge Integrated Services Group, Inc. (2009) 171 Cal.App.4th 35, 50 ["While there is some conflict in the case law discussing the precise degree of particularity required in the pleading of a claim for negligent misrepresentation, there is a consensus that the causal elements, particularly the allegations of reliance, must be specifically pleaded."]; but see Charnay v.

Cobert (2006) 145 Cal.App.4th 170, 185, fn. 14 [requiring pleading specificity]; Cadlo v. Owens-Illinois, Inc. (2004) 125 Cal.App.4th 513, 519 [requiring pleading specificity]; Foster v. Sexton (2021) 61 Cal.App.5th 998 ["For policy reasons, some causes of action, such as fraud and negligent misrepresentation, must be pleaded with particularity--that is, the pleading must set forth how, when, where, to whom, and by what means the representations were made."].)

Defendants argue the negligent misrepresentation claim makes conclusory allegations without factual support. (See Dem. at 17:5-10.)

The Court incorporates Plaintiff's opposition arguments and Defendants' reply arguments set forth above as they are advanced in support of the fourth, fifth, and tenth causes of action. (See Opp. at 14:12-14, 17:16-17; Reply at 5:4-17, 5:25-27.)

The Court finds Plaintiffs have not sufficiently alleged the element of lack of reasonable ground for belief.

Here, the FAC asserts the conclusory allegation "Defendants had no reasonable basis for believing these false representations were true when they made them." (FAC, P. 98.)

The FAC also alleges Plaintiffs put Defendants on notice of the water leaks and mold shortly after commencing their occupancy. (See FAC, P. 33.)

The FAC lacks factual allegations showing why Defendants reasonably should have known the representation they made concerning the Property were false at the time they were made.

As with Plaintiffs' intentional misrepresentation claim, the Court finds the negligent misrepresentation claim also fails to allege the how, when, where, to whom, and by what means the representations were made.

Although the law is somewhat unsettled as to whether negligent misrepresentation must be pled specifically, the Court is inclined to follow the reasoning of authorities that require specificity in negligent misrepresentation claims because they are akin to fraud.

Thus, the Court SUSTAINS Defendants' Demurrer to the Fifth Cause of Action for Negligent Misrepresentation WITH LEAVE TO AMEND.

5. Negligent Infliction of Emotional Distress

"[The] negligent causing of emotional distress is not an independent tort but the tort of negligence...The traditional elements of duty, breach of duty, causation, and damages apply.

Whether a defendant owes a duty of care is a question of law.

Its existence depends upon the foreseeability of the risk and upon a weighing of policy considerations for and against imposition of liability." (Marlene F. v. Affiliated Psychiatric Medical Clinic, Inc. (1989) 48Cal.3d 583, 588 [cleaned up].)

An NIED claim simply allows certain persons to recover damages for emotional distress only on a negligence cause of action even though they were not otherwise injured or harmed. (See Molien v. Kaiser Foundation Hospitals (1980) 27 Cal.3d 916, 928.)

"[D]uty is found where the plaintiff is a direct victim, in that the emotional distress damages result from a duty owed the plaintiff that is assumed by the defendant or imposed on the defendant as a matter of law, or that arises out of a relationship between the two." (McMahon v. Craig (2009) 176 Cal.App.4th1502, 1510 [internal quotations omitted].)

Defendants argue the NIED claim is insufficient because it merely incorporates preceding allegations and conclusorily alleges their conduct was negligent and caused "severe emotional distress, including anxiety, depression, and other symptoms that have impaired their ability to enjoy life, and to work and earn a living." (Dem. at 17:22-24; SAC, P. 108.)

Defendants argue the FAC also fails to identify which Defendant engaged in what conduct that gave rise to each Plaintiffs' emotional distress. (See id., at 18:7-12.)

In opposition, Plaintiffs argue their NIED claim alleges direct victim negligence based on Defendants' ownership, possession, control, maintenance, leasing, and management of the Property. (See Opp. at 18:10-11.)

In their Reply, Defendants argue the FAC fails to breach duty, breach, causation, and injury as to each Defendant. (See Reply at 7:3-5.)

Here, the only duty alleged under the NIED cause of action is a "duty of care to maintain the rental property in a safe and usable condition, under the terms of the Lease Agreement, and California authority, by failing to address, or adequately address, the very serious and hazardous water leakage, water damage, massive flooding, and extremely hazardous mold infestation, which conditions persist to the present, even after being notified by Plaintiff, in writing, as well as orally, on numerous occasions," (FAC, P. 76.)

As the Court discussed above, Choi is not a party to the lease agreement, thus this duty would not apply to Choi as currently pled.

The Court finds the NIED claim is insufficiently alleged as to Choi as the FAC asserts no alleged duty "assumed by the defendant or imposed on the defendant as a matter of law, or that arises out of a relationship between the two." (Burgess v. Superior Court (1992) 2 Cal.4th 1064, 1073.)

The Court finds the NIED claim is sufficiently alleged against CNC as it was the alleged property manager and owed some duty to Plaintiffs to cure defects they were notified about. (See FAC, P. 9.)

The Court also finds the NIED claim is sufficiently alleged as to Atlantic, as the FAC alleges a contractual duty and Atlantic's breach of the same. (See FAC, P. 76.)

The NIED claim alleges Defendants failed to cure the Property's issues and as a result, Plaintiffs suffered emotional distress. (See id., P.P. 46, 52, 59.)

Thus, the Court SUSTAINS Defendants' Demurrer to the Seventh Cause of Action for negligent infliction of emotional distress WITH LEAVE TO AMEND as to Choi and OVERRULES it as to CNC and Atlantic Star.

6. Breach of the Implied Covenant of Good Faith and Fair Dealing

The elements for breach of the implied covenant of good faith and fair dealing are: (1) existence of a contract between plaintiff and defendant; (2) plaintiff performed his contractual obligations or was excused from performing them; (3) the conditions requiring defendant's performance had occurred; (4) the defendant unfairly interfered with the plaintiff's right to receive the benefits of the contract; and (5) the plaintiff was harmed by the defendant's conduct. (Merced Irr. Dist. V. County of Mariposa (E.D. Cal. 2013) 941 F.Supp.2d 1237, 1280 [discussing California law].)

"A breach of the implied covenant of good faith and fair dealing involves something beyond breach of the contractual duty itself and it has been held that bad faith implies unfair dealing rather than mistaken judgment . . . ." (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1394 [internal quotations and citation thereto omitted].)

"If the allegations do not go beyond the statement of a mere contract breach and, relying on the same alleged acts, simply seek the same damages or other relief already claimed in a companion contract cause of action, they may be disregarded as superfluous as no additional claim is actually stated ... [T]he only justification for asserting a separate cause of action for breach of the implied covenant is to obtain a tort recovery." (Id., Careau & Co., 222 CalApp.3d at 1395; see also Guz v. Bechtel Nat. Inc. (2000) 24 Cal.4th 317, 352 [holding, on summary judgment, that where breach of an actual term is alleged, a separate implied covenant claim, based on the same breach, is superfluous].)

Defendants argue the breach of the implied covenant of good faith and fair dealing claim is duplicative because it relies on the same alleged conduct and seeks the same relief as the breach of contract claim. (See Dem. at 19:9-10; Reply at 6:9-13.)

Defendants also contend the FAC does not identify conduct separate from the alleged contractual breaches, nor does it allege interference with any contractual benefit independent of the obligations expressly governed by the lease. (See Dem., at 19:5-7; Reply at 6:14.)

Plaintiffs argue the FAC alleges more than a simple failure to perform contractual obligations, specifically, that Defendants knowingly allowed the dangerous conditions to continue. (See Opp. at 19:10-16.)

Once again, the Court finds the claim is insufficiently alleged as to CNC and Choi as there is no existing contract alleged between either defendant and Plaintiffs.

The Court finds the claim is duplicative as to Atlantic.

Here, the FAC alleges "Defendants breached the implied covenant of good faith and fair dealing by failing to repair the hazardous conditions at the Property and failing to maintain the Property in a usable condition." (FAC, P. 110)

This claim relies on the same facts--breach of the lease's terms providing for the landlord to make repairs after notice--and seeks the same damages as in the breach of contract claim asserted against Atlantic. (See id., P.P. 71, 73, 109.)

Thus, the claim is duplicative as to Atlantic.

Thus, the Court SUSTAINS Defendants' Demurrer to the Eighth Cause of Action for Breach of Implied Covenant of Good Faith and Fair Dealing as to Defendants WITHOUT LEAVE TO AMEND.

7. Nuisance

To establish an action for private nuisance, (1) "the plaintiff must prove an interference with his use and enjoyment of his property"; (2) "the invasion of the plaintiff's interest in the use and enjoyment of the land must be substantial, that is, that it causes the plaintiff to suffer substantial actual damage"; (3) "the interference with the protected interest must not only be substantial, but it must also be unreasonable, i.e., it must be of such a nature, duration, or amount as to constitute unreasonable interference with the use and enjoyment of the land." (Mendez v. Rancho Valencia Resort Partners, LLC (2016) 3 Cal.App.5th 248, 262-263, citations, italics, brackets, and quotation marks omitted.)

"[A] plaintiff bringing a cause of action for private nuisance must show harm to a property interest." (Orange County Water Dist. v. Sabic Innovative Plastics US, LLC (2017) 14 Cal.App.5th 343, 402; Stoiber v. Honeychuck (1980) 101 Cal.App.3d 903, 920, 162 Cal.Rptr. 194 [interference with use of a leasehold].)

Defendants argue the FAC fails to allege what conduct was undertaken by which Defendant, when it occurred, or how any particular Defendant allegedly created or maintained the conditions. (See Dem. at 19:25-27.)

Defendants also argue Employee Plaintiffs cannot bring this claim because they don't allege they owned or leased the Property. (See id., at 20:14-17.)

In their Opposition, Plaintiffs argue it is sufficient the FAC alleges Defendants collectively owned, leased, controlled, managed, maintained, repaired, possessed, and operated the Property. (See Opp. at 20:12-14.)

Plaintiffs argue the Employee Plaintiffs are alleged to have been lawful occupants of the Property during their employment and thus have standing to bring this claim. (See id., at 20:21-25.)

In their Reply, Defendants reassert the nuisance claim is defective because it is pled collectively and the Employee Plaintiffs lack standing. (See Reply at 7:18-26.)

Defendants also argue the FAC fails to allege facts showing how Choi or CNC is liable for any nuisance. (See id.)

The Court finds Employee Plaintiffs fail to state a claim for private nuisance as the FAC does not allege they had a property interest in the Property.

Exhibit 1 shows only Tenant Plaintiffs had a leasehold interest. (See FAC, 16, Ex. 1.)

Thus, the Court SUSTAINS Defendants' Demurrer as to the Ninth Cause of Action for Nuisance as to Employee Plaintiffs WITH LEAVE TO AMEND.

The Court also finds Tenant Plaintiffs insufficiently allege their nuisance claim against Choi.

The FAC alleges "Atlantic holds the Property as an asset. Choi is the owner of the Property, through Atlantic, which she wholly owns." (FAC, P.P. 10-11.)

Because the FAC pleads Atlantic holds the Property as an asset, and thus, that Atlantic owns the Property, Tenant Plaintiffs fail to state a claim against Choi because the FAC lacks alter ego allegations necessary to pierce the corporate veil and hold Choi liable. (See Curci Investments, LLC v. Baldwin (2017) 14 Cal.App.5th 214, 220-221 [an LLC is a separate legal entity distinct from its members and managers; however, under the alter ego doctrine, that legal separation may be disregarded]; see also Corp. Code Sec. 17703.04(a)-(b).)

There are also no factual allegations of Choi's individual liability to sustain a nuisance claim against her.

The Court finds Tenant Plaintiffs sufficiently state their claim against CNC, the alleged property manager, and Atlantic, the alleged landlord.

The FAC alleges CNC and Atlantic failed to cure the Property's water leakage and mold issues for over two years, even when Plaintiffs were required to close the restaurant to allow Defendants to attempt to repair.

And their failure to cure caused Plaintiffs substantial health issues and financial loss. (See FAC, P.P. 24, 34, 37, 45.)

Thus, the Court finds Tenant Plaintiffs sufficiently allege a substantial and unreasonable interference with their use and enjoyment of their leased Property. (See id., P.P. 114-117.)

Thus, the Court SUSTAINS Defendants' Demurrer to the Ninth Cause of Action for Nuisance as alleged by Tenant Plaintiffs against Choi WITH LEAVE TO AMEND but OVERRULES it as alleged by Tenant Plaintiffs against CNC and Atlantic.

8. Fraudulent Concealment

The elements of fraudulent concealment are: (1) a misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity (or scienter); (3) intent to defraud, i.e., to induce reliance; (4) justifiable reliance; and (5) resulting damage. (Lazar v. Sup. Ct. (1996) 12 Cal.4th 631, 638.)

Generally, fraud must be pled with particularity. (See Hills Transportation Co. v. Southwest Forest Ind., Inc. (1968) 266 Cal.App.2d 702, 707.)

In cases claiming fraud through non-disclosure, it's not practical to allege facts showing how, when and by what means something did not happen. (See Alfaro v. Community Housing Improvement System Planning Assn. (2009) 171 Cal.App.4th 1356, 1384.)

However, "If a fraud claim is based upon failure to disclose, and 'the duty to disclose arises from the making of representations that were misleading or false, then those allegations should be described.'" (Morgan v. AT&T Wireless Services, Inc. (2009) 177 Cal.App.4th 1235, 1262.)

One party's failure to disclose material facts unknown to another party is not fraud unless "unless there is ¿ some relationship ¿ between the parties which gives rise to a duty to disclose such known facts. " (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 337, quoting BAJI No. 12.36 (8th ed. 1994).)

"In transactions which do not involve fiduciary or confidential relations, a cause of action for non-disclosure of material facts may arise in at least three instances: (1) the defendant makes representations but does not disclose facts which materially qualify the facts disclosed, or which render his disclosure likely to mislead; ¿ (2) ¿ the facts are known or accessible only to defendant, and defendant knows they are not known to or reasonably discoverable by the plaintiff; ¿ (3) the defendant actively conceals discovery from the plaintiff." (Warner Constr. Corp. v. City of Los Angeles (1970) 2 Cal.3d 285, 294.) ¿

These three instances "presuppose[] the existence of some other relationship between the plaintiff and defendant in which a duty to disclose can arise...such a relationship can only come into being as a result of some sort of transaction between the parties... Thus, a duty to disclose may arise from the relationship between seller and buyer, employer and prospective employee, doctor and patient, or parties entering into any kind of contractual agreement...All of these relationships are created by transactions between parties from which a duty to disclose facts material to the transaction arises under certain circumstances." (LiMandri, 52 Cal.App.4th at 337, internal citations omitted.)

Defendants argue the FAC does not allege which Defendant possessed knowledge of the allegedly concealed facts, when any Defendant acquired such knowledge, what facts were allegedly concealed by each Defendant, or the basis for any alleged duty to disclose. (See Dem. at 21:6-8.)

Defendants argue the FAC fails to plead how each Plaintiff relied on the alleged nondisclosure. (See id., at 21:13.)

Defendants also argue the fraudulent concealment claim is duplicative of the other fraud claims. (See id., at 21:23-24.)

The Court incorporates Plaintiff's opposition arguments set forth above under the fourth and fifth causes of action as they are also advanced in support of their positions on the tenth cause of action. (See Opp. at 14:12-14, 17:16-17.)

In reply, Defendants argue the FAC collectively alleges "Defendants" concealed flooding, leaks, and mold instead of specifying which Defendant knew which fact, when that knowledge arose, what was withheld from which Plaintiff, the source of any disclosure duty to each Plaintiff, or reliance by each Plaintiff. (See Reply at 5:18-24.)

The Court finds the fraudulent concealment claim is not duplicative as it is based on a different theory than Plaintiffs' other fraud claims.

Here, the FAC alleges Defendants misrepresented the overall condition and safety of the Property but concealed the "condition of massive flooding following even moderate rainfall, extensive water leakage in plumbing, and extensive infestation of Stachybotris (Black Mold) throughout the unit." (FAC, P. 87, 119.)

As for duty to disclose, the Court finds Tenant Plaintiffs sufficiently allege Atlantic Star and CNC owed them a duty to disclose, but not Choi.

Here, the FAC alleges the first instance enumerated in Warner in which a duty to disclose may arise, that Defendants made representations about the Property's condition but did not disclose facts which materially qualified the facts disclosed. (See FAC, P.P. 87, 119.)

The Court finds a transactional relationship is alleged between Tenant Plaintiffs and Atlantic Star by way of their lease agreement.

The Court also finds the FAC sufficiently alleges CNC owed a duty to Tenant Plaintiffs.

The FAC alleges CNC was the Property's property manager and Atlantic's licensed real estate broker involved in the lease agreement transaction. (See FAC, P.P. 9, 16, Ex. 1 at Sec. 31 [alleging CNC is a broker representing Atlantic].)

Thus, the FAC also alleges a transaction relationship involving CNC and Tenant Plaintiffs.

However, the Court finds the FAC's allegation that "Defendants had a duty to disclose these facts to Plaintiffs" insufficiently alleges a duty to disclose as to the other, i.e., non-Tenant, Plaintiffs.

The FAC alleges no existing or anticipated transactional relationship between Employee Plaintiffs and Atlantic Star, CNC, or Choi that would give rise to a duty to disclose to these plaintiffs.

Thus, the Court SUSTAINS Defendants' Demurrer to the Tenth Cause of Action for Fraudulent Concealment as asserted by Plaintiffs against Choi, and SUSTAINS it as asserted by Employee Plaintiffs against Defendants WITH LEAVE TO AMEND.

The Court OVERRULES Defendants' Demurrer to the Fraudulent Concealment claim as asserted by Tenant Plaintiffs against Atlantic Star and CNC.

9. Business and Professions Code section 17200, et seq.

To set forth a claim for a violation of Business and Professions Code section 17200 ("UCL"), Plaintiff must establish Defendant was engaged in an "unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising" and certain specific acts. (See Bus. & Prof. Code Sec. 17200.)

A cause of action for unfair competition "is not an all-purpose substitute for a tort or contract action." (Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 173.)

"Under the UCL's 'unfair' prong, 'a practice may be deemed unfair even if not specifically proscribed by some other law.'" (Beverage v. Apple, Inc. (2024) 101 Cal.App.5th 736, 748 [quoting Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180].)

"A n action under the UCL 'is not an all-purpose substitute for a tort or contract action.'" (That v. Alders Maintenance Assn. (2012) 206 Cal.App.4th 1419, 1427.)

"Proposition 64 amended the UCL to provide a standing requirement for persons seeking relief under the UCL: a person bringing an action under the UCL must establish that he or she "has suffered injury in fact and has lost money or property as a result of the unfair competition." (Morgan v. AT&T Wireless Services, Inc. (2009) 177 Cal.App.4th 1235; see also Gray v. Dignity Health (2021) 70 Cal.App.5th 225, 237.)

Defendants argue the FAC does not allege what unlawful, unfair, or fraudulent business practice was committed by each Defendant or the injury allegedly suffered by each Plaintiff. (See Dem. at 22:15-16.)

Defendants also argue the claim is insufficient as to CNC and Choi because the FAC makes generalized allegations against "Defendants" and fails to allege specific conduct attributable to CNC and Choi. (See id., at 23:2-4.)

In opposition, Plaintiffs argue Defendants engaged in unlawful conduct by violating numerous statutory duties, common-law duties, and contractual obligations which support a UCL claim. (See Opp. at 21:20-24.)

Plaintiffs argue Plaintiffs suffered economic losses in the form of lost profits and lost income. (See id., at 22:1-5.)

Defendants' Reply reasserts their arguments, adding the FAC does not allege Plaintiffs suffered economic losses. (See Reply at 8:4-7.)

Here, the FAC's UCL claim is premised on Defendants' alleged unlawful, unfair, and fraudulent business practice of misrepresenting the condition of the Property and failing to maintain it. (See FAC, P.P. 126-127.)

The Court finds Tenant Plaintiffs sufficiently allege their UCL claim against Atlantic Star and CNC as the FAC alleges Atlantic Star breached their contract to maintain the Property and that CNC and/or Atlantic Star misrepresented the condition of the Property. (See Puentes v. Wells Fargo Home Mortg., Inc. (2008) 160 Cal.App.4th 638, 645 ["'[A] breach of contract may ... form the predicate for Section 17200 claims, provided it also constitutes conduct that is 'unlawful, or unfair, or fraudulent.'"] ["fraudulent" in section 17200 does not mean common-law fraud, but only that members of the public likely would be deceived].)

Tenant Plaintiffs allege they were dispossessed of the Property for one week, and thus they allege standing. (See FAC, P. 37.)

On the other hand, the Court finds Tenant Plaintiffs insufficiently allege their UCL claim as to Choi.

The Court finds the FAC's collective allegation that "Defendants made representations to Plaintiffs" insufficient as to Choi.

The Court can only infer from the FAC's allegations that Tenant Plaintiffs could have received representations from CNC, the broker, as part of the lease agreement transaction.

The FAC otherwise lacks factual allegations of any representations attributable to Choi during the transaction.

Thus, the FAC lacks allegations showing that the alleged business practices are attributable to Choi.

The Court also finds Employee Plaintiffs insufficiently allege their UCL claim, as an alleged loss of income does not satisfy the standing requirement. (See FAC, P. 19.)

"There are innumerable ways in which economic injury from unfair competition may be shown. A plaintiff may (1) surrender in a transaction more, or acquire in a transaction less, than he or she otherwise would have; (2) have a present or future property interest diminished; (3) be deprived of money or property to which he or she has a cognizable claim; or (4) be required to enter into a transaction, costing money or property, that would otherwise have been unnecessary." (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 323.)

Losing unearned, potential income is not money or property to which Employee Plaintiffs have a cognizable claim.

Thus, the Court SUSTAINS Defendants' Demurrer to the Eleventh Cause of Action for UCL as alleged by Employee Plaintiffs against Defendants WITH LEAVE TO AMEND, SUSTAINS it as asserted by Tenant Plaintiffs against Choi WITH LEAVE TO AMEND, and OVERRULES it as asserted by Tenant Plaintiffs against Atlantic Star and CNC.

10. Premises Liability

"The elements of a cause of action for premises liability are the same as those for negligence: duty, breach, causation, and damages." (Castellon v. U.S. Bancorp (2013) 220 Cal.App.4th 994, 998; see also Rowland v. Christian (1968) 69 Cal.2d 108.)

"Premises liability is grounded in the possession of the premises and the attendant right to control and manage the premises." (Kesner v. Superior Court (2016) 1 Cal.5th 1132, 1158, quotation marks omitted.)

Defendants argue the premises liability claim is duplicative of their negligence claim. (See Dem. at 24:3-9.)

Defendants argue the FAC collectively alleges Defendants engaged in conduct without specifying which conduct is attributable to each Defendant. (See id., at 23:19-22; Reply at 8:13-16.)

Plaintiffs argue they may plead their premises liability claim which is based on the theory of ownership, possession, or control of land. (See Opp. at 22:16-18.)

Plaintiffs contend the FAC alleges Defendants owned, leased, possessed, managed, maintained, repaired, controlled, and operated the Property. (See id., at 22:20-22.)

As the case law cited above indicates, Defendants' demurrer is well taken on this point.

Alleging Atlantic Star owns the Property and is Tenant Plaintiffs' landlord, CNC manages the Property, and Choi owns Atlantic Star, are not sufficient by themselves to survive demurrer on the grounds they are duplicative. (See FAC, P.P. 9-11, 17, Ex. 1.)

Thus, the Court SUSTAINS Defendants' Demurrer to the Twelfth Cause of Action for Premises Liability WITHOUT LEAVE TO AMEND.

11. Injunctive Relief (13 COA - Plaintiffs as to Defendants)

The Court SUSTAINS Defendants' Demurrer to the Thirteenth Cause of Action for Injunctive Relief WITHOUT LEAVE TO AMEND.

The parties acknowledge there is no cause of action for injunctive relief. (See Dem. at 24:15; Opp. at 23:8-10.)

Rather, this is a remedy Plaintiffs may elect to pursue under their other claims such as for negligence or fraud.

V. MOTION TO STRIKE

A.

Legal Standard

The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (See Code Civ. Proc. Sec. 436(a).)

The court may also strike all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (See id. at Sec. 436(b).)

This provision is for "the striking of a pleading due to improprieties in its form ¿ or in the procedures ¿ pursuant to which it was filed." ¿ (Ferraro v. Camarlinghi ¿ (2008) 161 Cal.App.4th 509, 528 [emphasis in original].)

The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (See Code Civ. Proc. at Sec. 437.) /// ///

B.

Analysis

Defendants Motion to Strike is technically moot as to any paragraph contained in any cause of action for the Court already sustained their Demurrer above.

However, due to the FAC's length and complexity, the Court will nevertheless address the Motion to Strike for the sake of judicial efficiency.

1. Allegations and Prayers for Damages for Personal Injury, Physical Injury, Medical Expenses, and Emotional Distress Arising From Plaintiffs' Contract Claims

Defendants argue, as an initial matter, the prayer for relief sets forth eleven categories of relief following thirteen causes of action but does not identify which item of relief is sought under which cause of action. (See Mot. at 5:23-25.)

Defendants argue the tort damages pled in paragraphs 61, 74, and 112 in the First Cause of Action for Breach of Contract and the Eighth Cause of Action for Breach of the Implied Covenant of Good Faith and Fair Dealing and Prayer paragraph 1 are unrecoverable as a matter of law. (See Mot. at 6:9-20 citing Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 515; Reply at 3:22-24.)

Defendants argue these damages are also improper as to all parties where Tenant Plaintiffs and Atlantic are the only contractual parties. (See Mot. at 6:24-26.)

Plaintiffs argue their tort claims support tort damages. (See Opp. at 10:21-26, citing Robinson Helicopter Co. v. Dana Corp. (2004) 34 Cal.4th 979, 989-991 (fraud independent of contract supports tort remedies).)

Plaintiffs also argue it is not required that each item of requested relief be separately assigned to each individual cause of action. (See Opp. at 11:13-15.)

A request for relief is not improper if it is supported by an otherwise sufficient claim. (See Code Civ. Proc. Sec. 431.10(b).)

The Court agrees the tort damages plead in the contract claims are not permissible, but can appropriately be sought in connection with their tort claims such as fraud.

Thus, the Court GRANTS Defendants' Motion to Strike tort damages in paragraphs 61, 74, and 112 pled in the First Cause of Action for Breach of Contract and the Eighth Cause of Action for Breach of the Implied Covenant of Good Faith and Fair Dealing WITHOUT LEAVE TO AMEND.

2. Allegations and Prayers for Damages for Property Damage

Defendants argue Plaintiffs seek recovery for "property damage" in paragraphs 19, 23, 61, 81, 85, 94, 102, 105, 112, 117, and 124, and Prayer paragraph 1, however, the FAC contains no factual allegations identifying the property allegedly damaged, the Plaintiff who owned or possessed the property, the nature of the alleged damage, or the extent of any resulting loss. (See Mot. at 7:15-20.)

Plaintiffs argue the FAC alleges damage to restaurant equipment, inventory, business property, improvements, and other personal property caused by sewage, flooding, water intrusion and mold. (See Opp. at 12:8-10.)

Paragraph 53 alleges Exhibit 7 contains a list of personal property that was damaged, however the contents of this exhibit are not attached. (See FAC, P. 53, Ex. 7.)

Accordingly the requested relief is unsupported and the Court GRANTS Defendants' Motion to Strike allegations and prayer for property damage WITH LEAVE TO AMEND.

3. Allegations and Prayers for Damages for Lost Business Income

Defendants argue the FAC alleges the lease does not authorize recovery of lost profits, lost revenue, business-interruption damages, or other alleged business-income losses. (See Mot. at 8:7-11, citing FAC, P. 17, Ex. 1, Sec. 11.2.)

Defendant argues the allegations of lost revenue and loss of income in paragraphs 19, 37, 61, 74, 81, 85, 94, 102, 105, 108, 112, 117, and 124, and Prayer paragraph 1 are thus unsupported.

In opposition, Plaintiffs argue Defendants improperly ask the Court to interpret disputed contractual language against Plaintiffs. (See Opp. at 12:17-18.)

Plaintiffs also argue they seek lost business income arising not merely from repair work but from Defendants' tortious conduct. (See id., at 12:19-22.)

Defendants argue the FAC alleges Plaintiffs closed the restaurant for one week "to allow Defendants to attempt to repair" the alleged conditions and lost $10,000 in revenue as a result. (See Reply at 4:1-2.)

Defendants argue this is the type of business loss that is not recoverable under the lease's provision that the landlord is not liable for injury to or interference with the tenant's business arising from repairs to the building or premises. (See id., at 3:27-4:8.)

Here, the FAC alleges "Plaintiffs were required to close the restaurant, in order to allow Defendants to attempt to repair the water leakage, water damage, flooding, and mold issues, which nonetheless were not repaired, costing Plaintiffs...ten thousand dollars ($10,000) in lost revenue." (FAC, P. 37.)

The lease provides " Landlord shall not be liable for any failure to make such repairs or to perform any maintenance unless such failure shall persist for an unreasonable time after written notice of the need of such repairs or maintenance is given to Landlord by Tenant.

Except as provided in Article 25 hereof, there shall be no abatement of rent and no liability of Landlord by reason of any injury to or interference with Tenant's business arising from the making of any repairs, alterations or improvements in or to any portion of the Building or the Premises or in or to fixtures, appurtenances and equipment therein." (FAC, P. 17, Ex. 1, Sec. 11.2 [emphasis added].)

Article 25 of the Lease, entitled "Reconstruction", allows for rent abatement when "the Premises are damaged by fire or other perils covered by extended coverage insurance" and other consequences occur as a result.

The FAC as currently framed does not invoke Article 25 so it doesn't apply.

The Court agrees with Defendants that the FAC's request for business revenue is unrecoverable under the lease's express terms.

As a result, Plaintiffs cannot recover lost business revenue under any of their causes of action which sound in contract.

They can, however, attempt to recover lost business revenue under non-contract causes of action.

Accordingly, the references to lost business revenue in Paragraphs 74 and 85 are incompatible with the lease terms as a matter of law and shall be stricken.

Thus, the Court GRANTS IN PART Defendants' Motion to Strike allegations of lost business revenue in Paragraphs 74 and 85 WITHOUT LEAVE TO AMEND.

4. Allegations Seeking Abatement, Refund, or Offset of Rent

Defendants move to strike these allegations for the same reasons as above. (See Mot. at 8:20-26.)

Rent abatement is only available under Plaintiffs' contract based causes of action and even then only under the specific scenario contemplated by Article 25 of the Lease.

Since they have not pleaded allegations which, if true, would support invocation of Article 25, the rent abatement allegations shall be stricken as well.

However, unlike the lost business revenue allegations, Plaintiffs may have leave to amend the FAC to make in consistent with the Lease's provisions.

Accordingly, the Court GRANTS the Motion to Strike allegations seeking abatement or rent refund WITH LEAVE TO AMEND to the extent they are contained in a contract based cause of action but WITHOUT LEAVE TO AMEND as to non-contract based causes of action.

5. Allegations and Prayers for Relief Seeking Restitution

Defendants argue Plaintiffs seek restitution as a category of relief at paragraph 128 and Prayer, paragraph 2, however, the FAC does not identify money or property allegedly obtained by any Defendant that is subject to restitution. (See Mot. at 9:8-10.)

Plaintiffs argue whether they are entitled to restitution cannot be resolved in the instant Motion. (See Opp. at 13:1-3.)

Defendants argue if Plaintiffs intend rent to serve as the basis for restitution, that theory would concern Tenant Plaintiffs and Atlantic Star, the parties identified in the lease.

Defendants argue the FAC alleges no basis for restitution as to Employee Plaintiffs or CNC and Choi. (See Reply, at 4:26-5:2.)

Because the allegations and prayer for restitution are otherwise sufficiently supported by the FAC's theory of Tenant Plaintiffs' entitlement "to refund or offset of their rental payments during this entire period" against Atlantic Star, the Court does not find that this allegation and prayer is improper.

Thus, the Court DENIES Defendants' Motion to Strike allegations and prayer seeking restitution.

6. Allegations and Prayers for Relief Seeking Punitive and/or Exemplary Damages

A complaint including a request for punitive damages must also include allegations showing the plaintiff is entitled to such an award. (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.)

A plaintiff may seek punitive damages for "oppression, fraud or malice" by the defendant. (See Civ. Code, Sec. 3294(a).)

"Fraud" means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury. (See id., Sec. 3294(c)(3).)

To recover punitive damages from a corporation, a plaintiff must also plead and prove that "authorization, ratification or act of oppression, fraud, or malice must be on the part of an officer, director, or managing agent of the corporation." (Civ. Code, Sec. ¿ 3294(b).)

Defendants argue the FAC lacks facts showing that any Defendant acted with malice, oppression, or fraud. (See Mot. at 10:19-23.)

Defendants also argue the FAC alleges in conclusory fashion that unidentified officers, managers, and directors knew of the conditions and ratified the refusal to repair. (See Reply at 5:14-16.)

Plaintiffs allege the FAC alleges Defendants concealed known dangerous conditions of the Property sufficient to support punitive damages. (See Opp. at 13:10-12.)

The Court above found Tenant Plaintiffs' claim for fraudulent concealment as to Atlantic survived demurrer, and thus their allegations and prayer for punitive damages is supported by an otherwise sufficient claim.

However, Plaintiffs fail to plead the fraud was on the part of any officer, director, or managing agent of Atlantic.

The only relevant allegation is conclusory and thus insufficient. (See FAC, P. 93.)

The Court GRANTS Defendants' Motion to strike punitive damages from paragraphs 63, 93, 94; Prayer, paragraph 4, WITH LEAVE TO AMEND.

7. Allegations and Prayers for Relief Seeking Attorneys' Fees

A plaintiff may only recover attorney fees when authorized by contract, statute, or other law. (See Code Civ. Proc., Sec. 1033.5(a)(10).)

Defendants argue the FAC does not identify the cause or causes of action under which attorneys' fees are sought, the contractual or statutory basis for such fees. (See Mot. at 11:7-8.)

Plaintiffs argue whether the lease ultimately authorizes attorney fees under Civil Code Sec. 1717 presents a legal question that should be resolved after adjudication of the contract claims. (See Opp. at 14:4-6.)

Defendants contend the lease is one basis for attorneys' fees for an action arising under the lease.

However, Defendants argue the lease does not authorize fees for the Employee Plaintiffs against CNC or Choi, or under claims for which no contractual or statutory fee basis is pleaded. (See Reply at 6:4-8.)

The lease contains an attorneys' fees provision, "In the event of any action or proceeding brought by either party against the other under this Lease the prevailing party shall be entitled to recover for the fees of its attorneys in such action or proceeding, including costs of appeal, if any, in such amount as the court may adjudge reasonable as attorneys' fees." (FAC, P. 17, Ex. 1, Sec. 32(xiv).)

Thus, Tenant Plaintiffs sufficiently support their claim for attorneys fees.

The Court DENIES Defendants' Motion to Strike allegations for attorneys' fees.

8. Allegations and Prayers for Relief Seeking Special Damages

Defendants argue the FAC does not allege the factual basis for or nature of the special damages pled and thus the requested relief is improper. (See Mot. at 11:26-27.)

Plaintiffs argue the FAC specifically alleges medical expenses, lost income, property damage, business interruption, repair expenses, and other pecuniary losses. (See Opp. at 14:12-16.)

Defendants argue the several categories of damages Plaintiffs identify in opposition is insufficient because the FAC does not identify which category constitutes the separately requested special damages, which Plaintiff incurred them, or which Defendant caused them. (See Reply at 5:4-6.)

Here, the FAC pleads Plaintiffs sought medical attention for their alleged mold exposure. (See FAC, P.P. 24-25.)

Because the FAC sufficiently pleads Plaintiffs are entitled to at least one type of special damages, the Motion to Strike allegations and prayer for special damages is DENIED.

Thus, the Court GRANTS in part Defendants' Motion to Strike as follows:

1. The Court GRANTS Defendants' Motion to Strike tort damages in paragraphs 61, 74, and 112 pled in the First Cause of Action for Breach of Contract and the Eighth Cause of Action for Breach of the Implied Covenant of Good Faith and Fair Dealing WITHOUT LEAVE TO AMEND.

2. The Court GRANTS Defendants' Motion to Strike allegations and prayer for property damage in paragraphs 19, 23, 61, 81, 85, 94, 102, 105, 112, 117, and 124, and Prayer, paragraph 1, WITH LEAVE TO AMEND.

3. The Court GRANTS Defendants' Motion to strike punitive damages from paragraphs 63, 93, 94, and Prayer, paragraph 4, WITH LEAVE TO AMEND.

4. The Court GRANTS Defendants' Motion to Strike allegations of lost business revenue to the extent they rely on contract based causes of action WITHOUT LEAVE TO AMEND.

5. The Court GRANTS Defendants' Motion to Strike allegations seeking abatement or rent refund WITHOUT LEAVE TO AMEND as to non-contract based causes of action but WITH LEAVE TO AMEND as to Plaintiffs' contract based causes of action.

6. The Court DENIES Defendants' Motion to Strike allegations and prayer seeking restitution; attorneys' fees, and special damages.

VI. CONCLUSION

Based on the foregoing, the Court SUSTAINS in part Defendants' Demurrer as follows:

Demurrer

1. The Court SUSTAINS Defendants' Demurrer as to Choi WITH LEAVE TO AMEND.

2. The Court SUSTAINS Defendants' Demurrer to the First Cause of Action for Breach of Contract and Third Cause of Action for Breach of the Covenant of Quiet Enjoyment as to Choi and CNC WITH LEAVE TO AMEND.

3. The Court SUSTAINS Defendants' Demurrer to the Fourth Cause of Action for Intentional Misrepresentation WITH LEAVE TO AMEND.

4. The Court SUSTAINS Defendants' Demurrer to the Fifth Cause of Action for Negligent Misrepresentation WITH LEAVE TO AMEND.

5. The Court SUSTAINS Defendants' Demurrer to the Seventh Cause of Action for NIED WITH LEAVE TO AMEND as to Choi and OVERRULES it as to CNC and Atlantic Star.

6. The Court SUSTAINS Defendants' Demurrer to the Eighth Cause of Action for Breach of Implied Covenant of Good Faith and Fair Dealing as to Defendants WITHOUT LEAVE TO AMEND

7. The Court SUSTAINS Defendants' Demurrer as to the Ninth Cause of Action for Nuisance as to Employee Plaintiffs WITH LEAVE TO AMEND.

8. The Court SUSTAINS Defendants' Demurrer to the Ninth Cause of Action for Nuisance as asserted by Tenant Plaintiffs against Choi WITH LEAVE TO AMEND but OVERRULES it as asserted by the Tenant Plaintiffs against CNC and Atlantic Star.

9. The Court SUSTAINS Defendants' Demurrer to the Tenth Cause of Action for Fraudulent Concealment as asserted by Plaintiffs against Choi, and SUSTAINS it as asserted by Employee Plaintiffs against Defendants WITH LEAVE TO AMEND.

The Court OVERRULES Defendants' Demurrer to the Fraudulent Concealment claim as asserted by Tenant Plaintiffs against Atlantic Star and CNC.

10. The Court SUSTAINS Defendants' Demurrer to the Eleventh Cause of Action for violation of Business and Professions Code section 17200 as alleged by Employee Plaintiffs against Defendants WITH LEAVE TO AMEND, SUSTAINS it as alleged by Tenant Plaintiffs against Choi WITH LEAVE TO AMEND, and OVERRULES it as alleged by Tenant Plaintiffs against Atlantic and CNC.

11. The Court SUSTAINS Defendants' Demurrer to the Twelfth Cause of Action for Premises Liability WITHOUT LEAVE TO AMEND.

12. The Court SUSTAINS Defendants' Demurrer to the Thirteenth Cause of Action for Injunctive Relief WITHOUT LEAVE TO AMEND.

Motion to Strike

The Court GRANTS IN PART Defendants' Motion to Strike WITH AND WITHOUT LEAVE TO AMEND as follows:

1. The Court GRANTS Defendants' Motion to Strike tort damages in paragraphs 61, 74, and 112 pled in the First Cause of Action for Breach of Contract and the Eighth Cause of Action for Breach of the Implied Covenant of Good Faith and Fair Dealing WITHOUT LEAVE TO AMEND.

2. The Court GRANTS Defendants' Motion to Strike allegations and prayer for property damage in paragraphs 19, 23, 61, 81, 85, 94, 102, 105, 112, 117, and 124, and Prayer, paragraph 1, WITH LEAVE TO AMEND.

3. The Court GRANTS Defendants' Motion to strike punitive damages from paragraphs 63, 93, 94, and Prayer, paragraph 4, WITH LEAVE TO AMEND.

4. The Court GRANTS Defendants' Motion to Strike allegations of lost business revenue to the extent they rely on contract based causes of action WITHOUT LEAVE TO AMEND.

5. The Court GRANTS Defendants' Motion to Strike allegations seeking abatement or rent refund WITHOUT LEAVE TO AMEND as to non-contract based causes of action but WITH LEAVE TO AMEND as to Plaintiffs' contract based causes of action.

6. The Court DENIES Defendants' Motion to Strike allegations and prayer seeking restitution; attorneys' fees, and special damages.

Plaintiff has leave to file an amended complaint by no later than September 4, 2026.

The Motion to Quash currently scheduled for September 29, 2026, shall be advanced to September 28, 2026, at 8:30 a.m.

The Case Management Conference shall be continued to December 17, 2026, at 8:30 a.m.

IT IS SO ORDERED.

DATED: August 19, 2026

Hon. Michael R. Amerian

Judge, Superior Court

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