West Valley Medical Partners, LLC v. Prime Surgical Affiliates, Inc. et al.

Case No.: 25STCV22377 Matter: Demurrer Moving Party: Plaintiff/Cross-Defendant West Valley Medical Partners, LLC Responding Party: Defendant/Cross-Complainant Prime Surgical Affiliates, Inc. Tentative Ruling: West Valley Medical Partners, LLC's demurrer is sustained in its entirety. Plaintiff/Cross-Defendant West Valley Medical Partners, LLC ("West Valley") filed this action against Defendant/Cross-Complainant Prime Surgical Affiliates, Inc. ("Prime"), and Does 1 through 10 for breach of contract.

On January 20, 2026, Prime filed a Cross-Complaint ("XC") against West Valley and Roes 1 through 10. The XC alleges five causes of action for: (1) breach of contract; (2) breach of implied covenant of good faith and fair dealing; (3) unfair business practices - Business and Professions Code sections 17200 et seq.; (4) fraud; and (5) accounting. On April 15, 2026, the Court sustained West Valley's demurrer with leave to amend as to

the first, second, third, and fourth causes of action. On May 15, 2026, Prime filed a First Amended Cross-Complaint ("FAXC") realleging the same causes of action. West Valley demurs to Prime's first, second, third, and fourth causes of action. Prime opposes.

Legal Standard

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice.¿(Code Civ. Proc., Sec. 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)¿The purpose of a demurrer is to challenge the sufficiency of a pleading by raising questions of law.¿(Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.)¿"In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties." (Code Civ.

Proc., Sec. 452.)¿The court " ' "treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law . . . ." ' "¿ (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.)¿In applying these standards, the court liberally construes the complaint to determine whether a cause of action has been stated.¿(Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726, 733.)

Analysis

Meet and Confer Pursuant to Code of Civil Procedure section 430.41, "a demurring party is required to meet and confer in person, by telephone, or video conference with the party that filed the pleading. . . ." (Code Civ. Proc. Sec. 430.41, subd. (a).) West Valley states that on May 26, 2026, the parties met and conferred over the telephone. (Goodfield Decl., P. 2.) Thus, the parties fulfilled their meet-and-confer obligations. Demurrer West Valley demurs to Prime's first, second, third, and fourth causes of action for failure to state sufficient facts.

Preliminary Issues Prime contends that the Court should not sustain West Valley's demurrer based on a procedural reason because West Valley has raised arguments that it did not previously raise pursuant to Code of Civil Procedure section 430.41, subdivision (b). Code of Civil Procedure section, 430.41, subdivision (b) states that: "[a] party demurring to a pleading that has been amended after a demurrer to an earlier version of the pleading was sustained shall not demur to any portion of the amended complaint, cross-complaint, or answer on grounds

that could have been raised by demurrer to the earlier version of the complaint, cross-complaint, or answer." (Code Civ. Proc., Sec. 430.41, subd. (b).) However, Code of Civil Procedure section 430.80, subdivision (a) provides that: "[i]f the party against whom a complaint or cross-complaint has been filed fails to object to the pleading, either by demurrer or answer, that party is deemed to have waived the objection unless . . . or an objection that the pleading does not state facts sufficient to constitute a cause of action.." (Code Civ.

Proc., Sec. 430.80, subd. (a).) West Valley is allowed to proceed with its demurrer because the demurrer is based on Prime's FAXC, which does not allege sufficient facts. Thus, Prime's argument is inapplicable. Failure to State Sufficient Facts First Cause of Action -Breach of Written Contract A cause of action for breach of contract has the following elements: "(1) the contract, (2) the plaintiff's performance of the contract or excuse for nonperformance, (3) the defendant's breach, and (4) the resulting damage to the plaintiff." (Richman v.

Hartley (2014) 224 Cal.App.4th 1182, 1186.) "Facts alleging a breach, like all essential elements of a breach of contract cause of action, must be pleaded with specificity." (Levy v. State Farm Mutual Automobile Ins. Co. (2007) 150 Cal.App.4th 1, 5.) West Valley contends that the Lease Agreement ("Agreement") between the parties bars Prime's cause of action for breach of contract. The Agreement states that: 19.1 Landlord shall not be in default hereunder unless Landlord fails to perform the obligations required of Landlord within a reasonable time, but in no event later than thirty (30) days after written notice by Tenant to Landlord in writing specifying wherein Landlord has failed to perform such obligation; provided, however, that if the nature of Landlord's obligation is such that more than thirty (30) days are required for performance, then Landlord shall not be in default if Landlord commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion.

Tenant waives any right to terminate this Lease and to vacate the Premises on Landlord's default under this Lease. Subject to limitations imposed elsewhere in this Lease, Tenant's sole remedy on Landlord's default is an action for damages or injunctive or declaratory relief. Tenant waives the benefits of Civil Code Sections 1941 and 1942. (Compl., Ex. A.) West Valley argues that Prime does not make allegations that it satisfied this condition precedent to allow West Valley the opportunity to cure.

In opposition, Prime argues that the obligations under the lease are terminated because the term of the Agreement expired.

"A contract that is terminated ceases to bind the parties. A terminated contract cannot be extended or modified; both extension and modification as those terms are commonly understood presuppose the existence of a valid contract to extend or modify. An "extension" is "[t]he continuation of the same contract for a specified period."" (Citizens for Amending Proposition L v. City of Pomona (2018) 28 Cal.App.5th 1159, 1189.) Prime cites Gueyffier v. Ann Summers, Ltd. (2008) 43 Cal.4th 1179 to argue that in certain circumstances the notice and cure condition of an agreement can be excused.

However, no case or legal argument is provided to show how this applies here because Gueyffier did not elaborate on such circumstances. (Gueyffier v. Ann Summers, Ltd. (2008) 43 Cal.4th 1179, 1187.) Prime also cites to Krainock v. Superior Court (1990) 216 Cal.App.3d 1473, 1479 to contend that notice is not required in his case. However, the Court finds Krainock inapplicable to Prime's proposition. The court in Krainock addressed claims under the Government Tort Claims Act, which is not the case here before this Court. (Id. at p. 1478-89.)

Moreover, Prime is relying on the Agreement between the parties as the basis for its claim against West Valley. Prime alleges that it has been overcharged for the duration of the Agreement. Prime has failed to allege a crucial allegation regarding notice of the alleged breach. Thus, the Court sustains the demurrer as to the first cause of action. Second Cause of Action - Breach of Implied Covenant of Good Faith and Fair Dealing "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 '[b]ad faith implies unfair dealing rather than mistaken judgment .... [Citation.]' [Citation.]"" (Careau & Co. v.

Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1393(Careau).) "[A]llegations which assert such a claim must show that the conduct of the defendant, whether or not it also constitutes a breach of a consensual contract term, demonstrates a failure or refusal to discharge contractual responsibilities, prompted not by an honest mistake, bad judgment or negligence but rather by a conscious and deliberate act, which unfairly frustrates the agreed common purposes and disappoints the reasonable expectations of the other party thereby depriving that party of the benefits of the agreement." (Id. at 1395.) "To apply the covenant to require a party to take one of two alternative actions expressly allowed by the contract and forgo the other would contravene the rule that the implied covenant of good faith and fair dealing may not be "read to prohibit a party from doing that which is expressly permitted by an agreement." ([Citation.]) No contractual obligation may be implied if it would obliterate "a right expressly given under a written contract."" (Bevis v.

Terrace View Partners, LP (2019) 33 Cal.App.5th 230, 256 (Bevis).)

Prime argues that it is alleging its second cause of action in the alternative to the breach-of-contract claim. However, the defect in Prime's FAXC is that it attempts to recharacterize a breach-of-contract claim under the Agreement. Per the Agreement, an express term in section 19.1 required Prime to give written notice. Per Bevis, no additional obligation may be implied. (Bevis, supra, 33 Cal.App.5th at p. 256.) Moreover, the FAXC alleges a pattern and conduct toward other tenants of the building. (FAXC, P.P. 15, 26.)

However, the allegations do not support the claim that the alleged actions by West Valley were not an "honest mistake, bad judgment or negligence." (Careau, supra, 222 Cal.App.3d at p. 1395.) Thus, the Court sustains the demurrer as to the second cause of action. Third Cause of Action - Unfair Business Practices ""'To bring a UCL claim, a plaintiff must show either an (1) "unlawful, unfair, or fraudulent business act or practice," or (2) "unfair, deceptive, untrue or misleading advertising." ' [Citation.]"" (Adhav v.

Midway Rent A Car, Inc. (2019) 37 Cal.App.5th 954, 970 (Adhav).) ""[The UCL] governs 'anti-competitive business practices' as well as injuries to consumers, and has as a major purpose 'the preservation of fair business competition.'"" (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.) "Because the UCL is written in the disjunctive, '"it establishes three varieties of unfair competition - acts or practices which are unlawful, or unfair, or fraudulent."'" [Citation.]" (Adhav, supra, 37 Cal.App.5th at p. 970.) "[T]he fraudulent prong, a plaintiff "'proceeding on a claim of misrepresentation as the basis of his or her UCL action must demonstrate actual reliance on the allegedly deceptive or misleading statements, in accordance with well-settled principles regarding the element of reliance in ordinary fraud actions.'" [Citation.]

Put another way, "a UCL fraud plaintiff must allege he or she was motivated to act or refrain from action based on the truth or falsity of a defendant's statement, not merely on the fact it was made."" (Adhav supra, 37 Cal.App.5th at p. 970.) "Prior to Cel-Tech, whether a practice was "unfair" under section 17200 required the court to engage in a balancing test." (Progressive West Ins. Co. v. Superior Court (2005) 135 Cal.App.4th 263, 285.) ""Determination of whether a business practice or act is 'unfair' within the meaning of the UCA entails examination of the impact of the practice or act on its victim, ' "... balanced against the reasons, justifications and motives of the alleged wrongdoer.

In brief, the court must weigh the utility of the defendant's conduct against the gravity of the harm to the alleged victim ... ." [Citation.]' [Citation.]" (Ibid.) "The UCL

was enacted "to protect both consumers and competitors by promoting fair competition in commercial markets for goods and services."" (Linear Technology Corp. v. Applied Materials, Inc. (2007) 152 Cal.App.4th 115, 135.) "[W]here a UCL action is based on contracts not involving either the public in general or individual consumers who are parties to the contracts, a corporate plaintiff may not rely on the UCL for the relief it seeks." (Ibid.) Here, Prime is a corporate entity, and the dispute centers on the Agreement between the parties. (FAXC, P.P. 11-15.)

Thus, under the unfair prong, Prime cannot allege a viable cause of action. As to the fraudulent prong, Prime must allege that members of the public were likely to be deceived. Prime argues that because it is likely that other tenants were overcharged, it has alleged sufficient facts. However, the Court is not persuaded. Prime alleges based on "information and belief." (FAXC, P.P. 32-33.) Additionally, the FAXC fails to allege that it relies on West Valley's statement. Thus, the Court sustains the demurrer as to the third cause of action.

Fourth Cause of Action - Fraud In California, "fraud must be pled specifically; general and conclusory allegations do not suffice." (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 993.) ""'[T]he elements of an action for fraud and deceit based on concealment are: (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.'"" (Boschma v.

Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248.) "The absence of any one of these required elements will preclude recovery." (Wilhelm v. Pray, Price, Williams & Russell (1986) 186 Cal.App.3d 1324, 1331.) At the previous hearing, the Court held that the Prime had not met the pleading requirement for its cause of action. Prime reasserts the same argument that, per Tarmann, the pleading requirement is relaxed because West Valley had all the information. However, the Court is not persuaded.

In Tarman, the court found the exception was inapplicable because there was no reason the defendant had reason to know more than the plaintiff. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.) Similarly here, Prime alleges that the process was complicated, and "Prime would be required to hire and pay for its own independent certified public accountant to review the materials and also to pay for the certified public accountant hired by West Valley to re-review and recalculate the amounts, address Prime's concerns." (FAXC, P. 14.)

There is no reason that West Valley had more reason to know than Prime; it had the ability to request the information.

Thus, the Court sustains the demurrer as to the fourth cause of action. Leave to Amend Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 [court shall not "sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment"]; Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037 ["A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment."]; Vaccaro v.

Kaiman (1998) 63 Cal.App.4th 761, 768 ["When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend."].) The burden is on the complainant to show the Court that the pleading can be successfully amended. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The Court finds that Prime has not met its burden of showing the Court that the pleading can be amended. This is the second demurrer on Prime's pleading, and Prime failed to address the previous defects that the Court previously raised.

Conclusion

West Valley Medical Partners, LLC's demurrer is sustained as to the first, second, third, and fourth causes of action without leave to amend. Case Number: 25STCV23864 Hearing Date: August 20, 2026 Dept: 516 GENERAL JURISDICTION DEFAULT JUDGMENT Case Name: Mulholland Security Centers, LLC v. Lepe