SIPSY vs WASH GRAND EXCHANGE, LLC

ground for withdrawal: A breakdown in the attorney-client relationship (or personality clash). (Estate of Falco v. Decker (1987) 188 Cal.App.3d 1004, 1014.)

Finally, no opposing document is filed in order to show any prejudice caused by attorney withdrawal. (See Rules Prof. Conduct, rule 1.16(d); Vann v. Shilleh (1975) 54 Cal.App.3d 192, 197.)

Therefore, the Court grants the Motion and will sign the proposed Order counsel submitted.

COURT OF CALIFORNIA, COUNTY OF LOS ANGELES Civil Division Central District, Stanley Mosk Courthouse, Department 311 Tentative Ruling

SIPSY vs WASH GRAND EXCHANGE, LLC | August 20, 2026 8:30 AM | | | NATURE OF PROCEEDINGS: DEFENDANT'S DEMURRER TO PLAINTIFFS' FIRST AMENDED COMPLAINT. DEFENDANT'S MOTION TO STRIKE PORTIONS OF THE FIRST AMENDED COMPLAINT.

RULING: The Court overrules the Demurrer and denies the Motion to Strike. Twenty days to answer. Plaintiff to give notice.

I. BACKGROUND

On June 10, 2025, SIPSY (Plaintiff) filed a Complaint against WASH GRAND EXCHANGE, LLC (Defendant).

On February 10, 2026, Plaintiff filed the First Amended Complaint (FAC), listing Causes of Action for: 1. BREACH OF CONTRACT 2. BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING 3. SPECIFIC PERFORMANCE 4. FRAUD AND DECEIT 5. DECLARATORY RELIEF 6. PROMISSORY ESTOPPEL.

Plaintiff alleges that, Defendant, as Lessor, did not deliver possession of a commercial premises to Plaintiff, reportedly because a holdover tenant refused to vacate, and Defendant eventually notified Plaintiff that it was terminating their Lease based on a failure of conditions precedent, whereas Defendant had an unwanted Lease, and breached Lease paragraph 3.3, by failing to use commercially reasonable efforts to remove the holdover tenant from possession, done to buy time to assert a deadline for possession, and to frustrate Plaintiff from completing the liquor-license transfer for that location.

On May 5, 2026, Defendant filed the Demurrer to each Cause of Action of the FAC, on grounds including that pleading exhibits are inconsistent with allegations of contract breach, a sham Plaintiff has been substituted as the lessee, the implied covenant cannot be based on contract terms, specific performance fails to show performance of conditions, fraud includes no reliance or caused damages, declaratory relief is duplicative, and promissory estoppel is inapplicable where an express contract governs.

Additionally, Defendant moves to strike on the ground that punitive damages are not supported by an insufficient contract claim.

Also, Defendant filed a Request for Judicial Notice of the declaration of Plaintiff's President, which Plaintiff had filed, on July 2, 2026, in support of an ex parte application.

Plaintiff filed an Opposition, arguing positions including the following: 1. As for contract breach, whether Defendant prevented and excused a liquor license transfer, by not making "commercially reasonable efforts" to deliver possession of the premises by the deadline, relates to sufficiently plead allegations, and issues of fact.

2. Without being a sham pleading, the FAC adequately alleges that Plaintiff LF BEV, is the proper lessee and real party in interest, based on the Lease and the Lease Amendment.

3. Regarding Breach of the Implied Covenant of Good Faith and Fair Dealing, the FAC and exhibits contain reasonable inferences that Defendant in bad faith decided that the Lease was a bad deal and to cancel it, which the Lease terms do not address.

4. As for Promissory Estoppel, excuses for the condition precedent are sufficiently alleged as with Breach of Contract. Also, this claim is properly pled in the alternative.

5. Regarding Fraud theories, the FAC well alleges that Defendant had no intention to perform the Lease when agreed, and Defendant manipulatively made misrepresentations to keep inducing performance and forbearance, until it went past the asserted deadline.

6. Declaratory Relief is not duplicative, but partly differs from Breach of Contract, by seeking adjudications of the parties' rights and duties under the Lease.

7. In support of punitive damages, the allegations show fraudulent, malicious, or oppressive conduct within the meaning of Civil Code section 3294.

8. Alternatively, Plaintiff requests leave to amend.

II. LEGAL STANDARD

Demurrers are to be sustained where a pleading fails to plead adequately any essential element of the cause of action. (Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 879-880.)

A complaint does not necessarily need to be a model of pleading but needs sufficient factual allegations. (E.g., State v. The Superior Court (2001) 87 Cal.App.4th 1409, 1411.)

In ruling upon demurrers, courts treat as being true "not only the complaint's material factual allegations, but also facts that may be implied or inferred from those expressly alleged." (Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1111-1112. Accord, Schauer v. Mandarin Gems of Cal., Inc. (2005) 125 Cal.App.4th 949, 953.)

"'[J]udicial notice of matters upon demurrer will be dispositive only in those instances where there is not or cannot be a factual dispute concerning that which is sought to be judicially noticed.'" (Unruh-Haxton v. Regents of Univ. of Cal. (2008) 162 Cal.App.4th 343, 365.)

Judicial notice is improper to resolve the very dispute over the fact that occasioned the request for judicial notice. (Cruz v. County of Los Angeles (1985) 173 Cal.App.3d 1131, 1134.)

As to demurrers, "if the exhibits are ambiguous and can be construed in the manner suggested by plaintiff, then we must accept the construction offered by plaintiff." (SC Manufactured Homes, Inc. v. Liebert (2008) 162 Cal.App.4th 68, 83.)

The rule of giving precedence to exhibits that conflict with pleading allegations is not applied in every context. (Mead v. Sanwa Bank Cal. (1998) 61 Cal.App.4th 561, 568 ["If written instruments attached to a pleading were always given precedence, then a supposed principal would be foreclosed from exercising the statutory right to prove that he or she was actually a surety."].)

"Under the sham pleading doctrine, allegations in an original pleading that rendered it vulnerable to demurrer or other attack cannot simply be omitted without explanation.... The purpose of the doctrine is to enable the courts to prevent an abuse of process.... The doctrine is not intended to prevent honest complainants from correcting erroneous allegations or to prevent the correction of ambiguous facts...." (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 751.)

The rule against sham pleadings is inapposite to an amended complaint omitting allegations of a prior pleading, or adding inconsistent facts, where they are immaterial to the legal theories, and do not undermine the causes of action. (Berman v. Bromberg (1997) 56 Cal.App.4th 936, 946-947, 949 ["the 'sham pleading rule' should not be applied in a case ... where the plaintiff seeks to change his legal theory of recovery and the legal conclusions he seeks to draw from underlying factual events, and also seeks to omit factual allegations that are irrelevant and immaterial to the new legal theories asserted."].)

The sham pleading rule is not intended to prevent honest complainants from filing an amended pleading, but to prevent untruthfully stated allegations that impugn the credibility of the cause of action. (JPMorgan Chase Bank, N.A. v. Ward (2019) 33 Cal.App.5th 678, 690-691.)

Where a pleading contradicts, or omits facts pled in, prior complaints, judges have discretion to take judicial notice of the earlier allegations and disregard inconsistent ones, absent the pleader's satisfactory explanation. (State of Cal. ex rel. Metz v. CCC Information Services, Inc. (2007) 149 Cal.App.4th 402, 412; Holland v. Morse Diesel Internat. (2001) 86 Cal.App.4th 1443, 1447.)

In amending a complaint, parties "must explain inconsistencies between the prior and proposed pleadings." (Oakland Raiders v. National Football League (2005) 131 Cal.App.4th 621, 653. Accord, Leasequip, Inc. v. Dapeer (2002) 103 Cal.App.4th 394, 404 ["Here, the allegations in the second amended complaint amplified, but did not contradict, those in the first amended complaint. We cannot conclude the second amended complaint was a sham."].)

The rule that pleaders cannot without explanation omit allegations, "does not mean that every word dropped in a pleading becomes a binding admission by which the pleader is forever bound." (Schmidlin v. City of Palo Alto (2007) 157 Cal.App.4th 728, 755.)

"Inconsistent general statements are modified and limited by specific factual allegations." (Cansino v. Bank of Amer. (2014) 224 Cal.App.4th 1462, 1468.)

"In considering a demurrer, the court is not required to ignore controlling law merely because the plaintiff does not rely on it." (Dey v. Continental Central Credit (2008) 170 Cal.App.4th 721, 730.)

The grounds for a motion to strike are that the pleading has irrelevant, false or improper matter, or has not been drawn or filed in conformity with laws. (Code Civ. Proc., Sec. 436.)

The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Ibid., Sec. 437.)

III. ANALYSIS

A. Demurrer

1. Breach of Contract

Defendant contends (1) Plaintiff failed to satisfy conditions precedent to possession-- the liquor license by the 120-day deadline-- and (2) Plaintiff filed a sham FAC that substitutes LF BEV, Inc. as the Plaintiff lessee. (FAC, P.P. 4-5).

Courts defer to plaintiffs' reasonable interpretations of contracts, in ruling upon demurrers. (Performance Plastering v. Richmond American Homes of Cal., Inc. (2007) 153 Cal.App.4th 659, 672 [lack of essential terms in agreement not properly resolved on demurrer where related to complainants' reasonable interpretations]; Aragon-Haas v. Family Security Services, Inc. (1991) 231 Cal.App.3d 232, 239; Davies v. Sallie Mae, Inc. (2008) 168 Cal.App.4th 1086, 1091.)

In ruling upon demurrers, courts do not defer to pleaders' legal characterizations of agreements if the allegations conflict with the content of the pleading exhibits. (Morris v. Redwood Empire Bancorp (2005) 128 Cal.App.4th 1305, 1314 [citing Barnett v. Fireman's Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505].)

"On a demurrer, the court must consider the sufficiency of the allegations, including any parol evidence allegations, to determine whether the contract is reasonably susceptible to the plaintiff's alleged interpretation." (George v. Automobile Club of So. Cal. (2011) 201 Cal.App.4th 1112, 1128.)

Where contractual liability depends on performing conditions precedent, an allegation of performance is essential, which may be stated generally to the effect that plaintiffs performed all the conditions, except that specific allegations are required as to occurrences of events, and pleadings revealing specific facts that do not constitute performance. (Careau & Co. v. Sec. Pac. Bus. Credit, Inc. (1990) 222 Cal.App.3d 1371, 1389-1390.)

"'[W]here, after a contract is made, a party's performance is made impracticable without his fault by the occurrence of an event the nonoccurrence of which was a basic assumption on which the contract was made, his duty to render that performance is discharged, unless the language or the circumstances indicate the contrary.' " (In re Marriage of Benjamins (1994) 26 Cal.App.4th 423, 432, fn.3 [quoting Rest.2d Contracts, Sec. 261].) (Underscoring added.)

Judicial notice of the pleading attachments (Demurrer, pp. 5-6, and 8), which contain self-serving statements and debates via exchanged via emails, does not conclusively establish that Defendant used all commercially reasonable efforts to remove a holdover tenant and provide possession.

And the exhibits consistently include an assertion from Plaintiff's expeditor that possession ending would enable liquor licenses to be surrendered. (See Demurrer, 9:12-13.)

In that regard, the FAC does not admit that the liquor license application would have been unaffected by possession.

To the contrary, the FAC alleges: "Plaintiff alleges that Defendant's non-delivery of possession--and Defendant's failure to secure exclusive possession--materially prevented Plaintiff from completing the liquor-license transfer condition referenced in Paragraph 1.3 of the Lease within any timeframe Defendant later attempted to impose as a pretext for termination."

"Plaintiff alleges it was ready, willing, and able to complete remaining tenant-side performance, including completing the liquor-license transfer and paying rent when due, upon Defendant's delivery of exclusive possession...." (FAC, P. 40.)

From such allegations, there is a reasonable inference that a holdover tenant would want to keep the financial benefit of a liquor license to use while still in business, but as a tenant out of possession and out of business at the location, the holdover tenant would have no incentive to continue to keep the license to make money.

And the Request for Judicial Notice of the entire Declaration helps to bolster a conclusion that the FAC does not admit Defendant's acting commercially reasonably, but instead, paragraph 23 of the Declaration infers that Defendant was "interfering with our right to possession under the lease."

Moreover, from Defendant's email statement that the Lease "was a big mistake...", there is a reasonable inference that Defendant was motivated to maneuver whatever grounds to cancel the lease, by needlessly dragging things out past the deadline for possession. (See FAC, Exhibit 6.)

In summary, it is not clear from the evidence that, "the obstacle was ... an existing license held by the current tenant whom is an independent third party and beyond the control of Defendant,..." (Demurrer, 12:12-14.)

So, the Court determines that the exhibits are not inconsistent with the allegations. (Cf. Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604, 606 ["We can find nothing in this evidence which constitutes admissions so inconsistent with facts alleged ... that would render the complaint demurrable."].)

As for contract interpretation, the definition of "commercially reasonable efforts", which has been historically included in business lease agreements, is a flexible standard both under the subject Lease and the state of unrefined law, as shown by the Court's own independent research.

That "Defendant made diligent efforts to deliver possession, including serving a 30-Day Notice to Vacate on the tenant and negotiating with the existing tenant" does not automatically equate with contract performance.

For example, the pleading and exhibits do not specify what Defendant communicated during "negotiating" or what court proceedings were considered or pursued to evict the holdover tenant.

There is no sham pleading involved here, as, notwithstanding judicial notice of the declaration of Plaintiff's President, the FAC explains in detail preincorporation and an Amended Lease making LF BEV the lessee. (E.g., FAC, P.P. 9-14; FAC, Exhibit 3.)

"[A] corporation can enforce preincorporation contracts made in its behalf, as long as the corporation 'has adopted the contract or otherwise succeeded to it.' " (02 Dev., LLC v. 607 S. Park, LLC (2008) 159 Cal. App. 4th 609, 612. Cf. Berman v. Bromberg (1997) 56 Cal.App.4th 936, 946 [perceiving no inconsistency or sham pleading].)

2. Breach of Implied Covenant of Good Faith and Fair Dealing

Defendant contends that this claim cannot be based upon express contract provisions.

"When a pleader is in doubt about what actually occurred or what can be established by the evidence, the modern practice allows that party to plead in the alternative and make inconsistent allegations." (Mendoza v. Continental Sales Co. (2006) 140 Cal.App.4th 1395, 1402 ["factually and legally inconsistent theories allowed."]. Cf. Tenet Healthsystem Desert, Inc. v. Blue Cross of California (2016) 245 Cal.App.4th 821, 845 [properly alleged intentional fraud suffices to allege an alternative claim for negligent misrepresentation.].)

Generally, complainants may plead, in the alternative, inconsistent facts or theories. (Crowley v. Katleman (1994) 8 Cal.4th 666, 690; Adams v. Paul (1995) 11 Cal.4th 583, 593.)

"Inconsistencies between alternative counts cannot be attacked by demurrer, since each count stands on its own allegations, unaffected by those contained in other counts." (Penziner v. West American Finance Co. (1933) 133 Cal.App. 578, 582. See also Benach v. County of L. A. (2007) 149 Cal.App.4th 836, 855 ["Breach of a specific contractual provision is not a prerequisite to asserting this cause of action."]; 300 DeHaro St. Investors v. Dept. of Hous. & Community Dev. (2008) 161 Cal.App.4th 1240, 1253 ["'[W]here a contract confers on one party a discretionary power affecting the rights of the other, a duty is imposed to exercise that discretion in good faith and in accordance with fair dealing.'"]; Locke v.

Warner Bros. (1997) 57 Cal.App.4th 354, 363, 367 [where agreement gave ... discretion, party was obligated to exercise it "honestly and in good faith."]; Steiner v. Thexton (2010) 48 Cal.4th 411, 419 ["While ... all contracts impose a duty of good faith and fair dealing and that the covenant particularly applies when 'one party is invested with a discretionary power affecting the rights of another' ..., it has also noted the implied covenant does not trump an agreement's express language...."]; Hicks v.

E. T. Legg & Assocs. (2001) 89 Cal.App.4th 496, 509 [implied covenant has no clear definition, and instead is determined case-by-case as to the conduct prohibited by the covenant, as circumscribed by the purposes and express terms of the particular contract].)

The pertinent allegations include these: "Rather than prosecuting the steps commercially necessary to secure possession--particularly after its own notice period expired--Defendant allowed the situation to persist...." (FAC, P. 24.)

Here, the pleading permissibly alleges, in the alternative, Breach of the Implied Covenant, where Defendant contends that the contract terms do not apply, and Plaintiff alleges that the contract implies more than it provides, such as Defendant's trying with all sincerity to exercise discretionary means to remove a holdover tenant to assist with liquor license surrender.

3. Specific Performance

Defendant argues that Plaintiff's specific performance claim fails because of failure to satisfy a condition precedent under Section 1.3 of the Lease, requiring Plaintiff to complete the transfer of a liquor license.

Defendant cites Britschgi v. McCall (1953) 41 Cal.2d 138, requiring satisfying condition precedents.

The Court has already addressed sufficient allegations regarding excuses for Plaintiff not performing the conditions precedent of obtaining a liquor license transfer by a deadline, in analyzing the First Cause of Action for Breach of Contract.

4. Fraud And Deceit

Defendant contends that elements of reliance, causation and damages, are not alleged, where Plaintiff's costs were incurred months before the alleged May 12, 2025 communication.

But the pleading alleges later damages, such as the following excerpts: "Defendant continued to communicate in a manner designed to keep Plaintiff committed to the transaction and to discourage Plaintiff from pursuing alternative premises." (FAC, P. 33.)

"Defendant's May 12, 2025 communications were ... representations intended to induce continued reliance and continued performance efforts by Plaintiff--particularly continued licensing expenditures...." (Ibid., P. 35.)

(See Schuster v. Gardner (2005) 127 Cal.App.4th 305, 314 ["[I]f the effect of a misrepresentation is to induce forbearance--to induce persons not to take action--and those persons are damaged as a result, they have a cause of action for fraud or negligent misrepresentation."]; Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 174 ["California law has long recognized the principle that induced forbearance can be the basis for tort liability."]; Wald v. Truspeed Motorcars, LLC (2010) 184 Cal.App.4th 378, 394 [defendant's repudiation of a contract after plaintiff performs, while knowing of a reason of unenforceability, can infer defendants' promissory fraud].)

5. Declaratory Relief

Defendant maintains that the Cause of Action for Declaratory Relief is completely duplicative of other claims.

A demurrer may be sustained as to a claim that duplicates another. (Levy v. Only Cremations for Pets, Inc. (2020) 57 Cal.App.5th 203, 215; Hood v. Superior Court (1995) 33 Cal.App.4th 319, 324 [declaratory relief duplicated other cause of action]. See also See also Osseous Technologies of Amer., Inc. v. DiscoveryOrtho Partners LLC (2010) 191 Cal.App.4th 357, 364 ["'The mere circumstance that another remedy is available is an insufficient ground for refusing declaratory relief, and doubts regarding the propriety of an action for declaratory relief ... generally are resolved in favor of granting relief.'"]; Ibid., at p. 372 ["'in a dispute involving an alleged breach of contract, courts may provide declaratory relief under section 1060 if the relief sought would also govern the future conduct of the parties....'"].

But see Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 890 [that a claim is duplicative is not a ground upon which demurrers may be sustained]; Tracfone Wireless, Inc. v. L. A. County (2008) 163 Cal.App.4th 1359, 1368 [if one cause of action of a complaint, restating duplicative causes of action, is good as against a general demurrer, then all of them will stand]; Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 253, fn. 12 [claims for fraud an unfair business practices were not subject to demurrer where separate remedies exist for each claim].)

Here, the claims differ by focusing upon past damages for contract breach, verses governing the parties' future performance of the Lease based on declaratory relief. (E.g., FAC, P. 77 ("Plaintiff seeks a judicial declaration determining the parties' rights and duties,....").)

6. Promissory Estoppel

Defendant contends that the Statute of Frauds applies without the written contract and, "[b]ecause Plaintiff relies on an express written contract covering the identical subject matter, promissory estoppel is inapplicable as a matter of law. (Demurrer, 19:25-27).

First, there are fraud and partial performance exceptions to the Statute of Frauds, not revealed by the FAC. (See, e.g., Garcia v. World Sav., FSB (2010) 183 Cal.App.4th 1031, 1041, fn.10; Secrest v. Security Nat'l Mortgage Loan Trust 2002-2 (2008) 167 Cal.App.4th 544, 555.)

"A general demurrer may be interposed when the complaint shows on its face that the agreement sued on is within the statute of frauds and does not comply with its requirements." (Parker v. Solomon (1959) 171 Cal.App.2d 125, 136.)

Second, "a plaintiff cannot state a claim for promissory estoppel when the promise was given in return for proper consideration. The claim instead must be pleaded as one for breach of the bargained-for contract." (Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 275, disapproved on other grounds by Yvanova v. New Century Mortg. Corp. (2016) 62 Cal.4th 919, 937.)

Nevertheless, promissory estoppel may be alleged in the alternative with breach of contract. (Fleet v. Bank of America N.A. (2014) 229 Cal.App.4th 1403, 1413.)

Plaintiff properly alleges this claim in the alternative.

B. Motion to Strike

Defendant seeks to strike allegations because Plaintiff is alleging claims arising from an alleged breach of a Lease, without specifically alleging factual support of a tort including fraud to justify punitive damages.

"In order to survive a motion to strike an allegation of punitive damages, the ultimate facts showing an entitlement to such relief must be pled by a plaintiff." (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255. (Underscoring added.) Accord, Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1055; Blegen v. Superior Court (1981) 125 Cal.App.3d 959, 962.)

"[I]f the action is one in tort, punitive damages may be recovered upon a proper showing of malice, fraud or oppression even though the conduct constituting the tort also involves a breach of contract." (Fletcher v. Western National Life Ins. Co. (1970) 10 Cal.App.3d 376, 400.)

Here, the Court determines that the FAC adequately alleges ultimate facts of fraudulent inducement of forbearance and promissory fraud, as analyzed with regard to the Demurrer.

IV. CONCLUSION

The Court overrules the Demurrer, and denies the Motion, while allowing 20 days' to answer.

Case Number: 25STCV36240 Hearing Date: August 20, 2026 Dept: 311 SUPERIOR COURT OF CALIFORNIA, COUNTY OF LOS ANGELES Civil Division Central District, Stanley Mosk Courthouse, Department 311 Tentative Ruling 25STCV36240 VERONICA BYNUM, AN INDIVIDUAL RESIDING IN CALIFORNIA, et al. vs GARDAWORLD SECURITY SERVICES OF CALIFORNIA, INC., A CALIFORNIA CORPORATION, et al. | August 20, 2026 8:30 AM | | | NATURE OF PROCEEDINGS: PLAINTIFF VERONICA BYNUM'S MOTION FOR A PROTECTIVE ORDER. PLAINTIFF LETICA IRVIN'S MOTION FOR A PROTECTIVE ORDER.

RULING: The Court grants both Motions. The Court enters a Protective Order precluding Defendants from inspecting, and/or accessing data