Credit Union of Southern California v. Nwafor Motorcars, et al.

(West Covina Courthouse: Dept. 6) September 3, 2026 DEPARTMENT 6 LAW AND MOTION RULINGS

NAME: Credit Union of Southern California v. Nwafor Motorcars, et al. Cross-Defendant Dream Motor Cars, Inc.'s Demurrer with Motion to Strike

The Court SUSTAINS in part and OVERRULES in part Cross-Defendant Dream Motor Cars, Inc.'s demurrer to Cross-Complainants Nwafor Motorcars and Chikezie Prince Nwafor's first amended cross-complaint. Cross-Complainants have previously been granted leave to amend and have not provided any showing as to how the FACC can be amended. Thus, the demurrer is sustained without leave to amend as to the third through fifth causes of action. The demurrer is overruled as to the first and second causes of action.

The Court DENIES Cross-Defendant Dream Motor Cars, Inc.'s motion to strike. Cross-Defendant Dream Motor Cars, Inc. is ordered to give notice of the Court's ruling within five calendar days of this order. BACKGROUND This is a lending dispute. On December 6, 2022, plaintiff Credit Union of Southern California (Plaintiff) filed this action against defendants Nwafor Motorcars, Chikezie Prince Nwafor aka Chikezie Nwafor, The State of California, acting by and through the California Department of Motor Vehicles (collectively, Defendants), and Does 1 through 20, alleging causes of action for breach of agreement, breach of statutory duty, declaratory relief, quiet title, and fraud.

On January 8, 2026, Plaintiff dismissed without prejudice the Second, Third, Fourth, and Fifth Causes of Action for breach of statutory duty, declaratory relief, quiet title, and fraud, respectively. On February 20, 2026, the Court entered judgment in favor of Plaintiff following Plaintiff's motion for summary adjudication to the First Cause of Action for breach of contract. On September 12, 2024, cross-complainants Nwafor Motorcars (Nwafor) and Chikezie Prince Nwafor (Chikezie)[1] (collectively, Cross-Complainants) filed a cross-complaint against cross-defendants All Valley Dealer Auto Auction, Dream Motor Cars, Inc. (Dream Motor Cars), and Does 30 through 50.

On November 5, 2024, the court clerk entered default against Dream Motor Cars and All Valley Dealer Auto Auction was dismissed from the cross-complaint. On January 8, 2026, the Court vacated the defaulted entered against Dream Motor Cars. On January 12, 2026, Dream Motor Cars, Inc. filed a cross-complaint against All Valley Dealer Auto Auction, Inc., Mark Antonio Tidwell, and Roes 1 through 10, alleging causes of action for expressed indemnity, implied indemnity, comparative indemnity, declaratory relief, equitable indemnity, and contribution.

On April 8, 2026, Dream Motor Cars' motion for judgment on the pleadings as to Cross-Complainants' cross-complaint was granted with 20 days leave to amend. On July 10, 2026, Cross-Complainants filed the first amended cross-complaint (FACC) against Dream Motor Cars, alleging causes of action for breach of contract, express indemnity, implied and equitable indemnity, negligent misrepresentation, and intentional misrepresentation. On August 10, 2026, Dream Motor Cars filed this demurrer with motion to strike as to the FACC.

No opposition has been filed. LEGAL STANDARD - Demurrer A demurrer is a pleading used to test the legal sufficiency of other pleadings.¿It raises issues of law, not fact, regarding the form or content of the opposing party's pleading (complaint, answer or cross-complaint).¿(Code Civ. Proc., Sec. 422.10; see Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994 (Donabedian).) It is not the function of the demurrer to challenge the truthfulness of the complaint; and for purposes of ruling on the demurrer, all facts pleaded in the complaint are assumed to be true.¿(Id. at pp. 993-994.)

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack; or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Donabedian, supra, 116 Cal.App.4th at p. 994.)¿No other extrinsic evidence can be considered.¿(Ion Equip. Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881 [error for court to consider facts asserted in memorandum supporting demurrer]; see also Afuso v. United States Fid. & Guar. Co. (1985) 169 Cal.App.3d 859, 862, disapproved on other grounds in Moradi-Shalal v.

Fireman's Fund Ins. Cos. (1988) 46 Cal.3d 287 [error to consider contents of release not part of court record].) A demurrer can be utilized where the "face of the complaint" itself is incomplete or discloses some defense that would bar recovery. (Guardian North Bay, Inc. v. Superior Court (2001) 94 Cal.App.4th 963, 971-972.)¿The "face of the complaint" includes material contained in attached exhibits that are incorporated by reference into the complaint, or in a superseded complaint in the same action. (Frantz v.

Blackwell (1987) 189 Cal.App.3d 91, 94; see also Barnett v. Fireman's Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505 ["[W]e 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"].) A demurrer can only be sustained when it disposes of an entire pleading, cause of action, or affirmative defense. (See Cal. Rules of Court, rule 3.1320, subd. (a); 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, 1046-1047.) DISCUSSION Meet and Confer The Court finds Dream Motor Cars' efforts to meet and confer sufficient. (Roshan-Zamir Decl., P. 5-6; Code Civ. Proc., Sec. 430.41, subd. (a).) First Cause of Action - Breach of Contract Standing To state a cause of action for breach of contract, the plaintiff must allege facts demonstrating "(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. [Citation.]" (Richman v.

Hartley (2014) 224 Cal.App.4th 1182, 1186.) "A cause of action for breach of contract requires pleading of a contract, plaintiff's performance or excuse for failure to perform, defendant's breach and damage to plaintiff resulting therefrom. [Citation.] A written contract may be pleaded either by its terms--set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference--or by its legal effect. [Citation.]" (McKell v. Washington Mut., Inc. (2006) 142 Cal.App.4th 1457, 1489.)

Dream Motor Cars demurs to the First Cause of Action for breach of contract on the grounds that it fails to state facts sufficient to constitute a cause of action. Dream Motor Cars contends it fails because Cross-Complainants are not parties to the auction contract attached as Exhibit 1 to the FACC, which identifies "Njaka Wholesale" as the purchaser, making Cross-complainants unable to sue on it. As relevant here, the FACC alleges that "Njaka Wholesale" was a fictitious business name, trade name, wholesale dealer license, and/or dealer-auction buyer account owned, controlled, and used by Cross-Complainants in the conduct of their motor-vehicle-dealer business, and did not constitute a legal entity separate or distinct from Cross-Complainants. "Njaka Wholesale" had no legal existence separate or apart from Cross-Complainants, but was merely a name, license, and/or account under and through which Cross-Complainants transacted their wholesale dealer-auction purchasing, including the purchase of the Vehicle.

Accordingly, Cross-Complainants are, and at all relevant times were, the PURCHASER identified in the Auction Agreement, and all right, title, and interest of the PURCHASER under Exhibit 1, including all warranty, guaranty, and indemnity rights, are held by, and/or were assigned and transferred to, Cross-Complainants. In the alternative, Cross-Complainants allege that "Njaka Wholesale" is their alter-ego. Cross-Complainants also allege that they are the express and/or intended third party beneficiaries of Dream Motor Car's covenants, warranties, and guaranty of title.

The Court finds the FACC alleges sufficient facts to state a cause of action for breach of contract. To assert a claim for breach of contract, one must either be a party to the contract or an intended third-party beneficiary. (Jones v. Aetna Cas. & Sur. Co. (1994) 26 Cal.App.4th 1717, 1722, 1724; Civ Code,

Sec. 1559.) The contract attached to the FACC indicates that the only parties to it are Njaka Wholesale, who is not otherwise named in the FACC, and Dream Motor Cars. (FACC, Ex. 1; Moran v. Prime Healthcare Mgmt., Inc. (2016) 3 Cal.App.5th 1131, 1145-1146 [facts appearing in exhibit take precedence over contradictory allegations in complaint].) However, the FACC alleges that Njaka Wholesale is their alter-ego, or that the rights were transferred or assigned to them. Dream Motor Cars has not addressed these allegations.

Thus, the demurrer is overruled on this ground. Statute of Frauds Next, Dream Motor Cars argues that the statute of frauds bars enforceability of the guaranty since it is not signed by it. Civil Code Sec. 1624 states: "(a) The following contracts are invalid, unless they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or by the party's agent: . . . . (2) A special promise to answer for the debt, default or miscarriage of another, except in the cases provided for in Section 2794."

But a seller warranting title to goods is making a promise as to its own obligations, not for another's debt. "[W]henever the leading and main object of the promisor is not to become surety or guarantor of another, but to subserve some purpose or interest of his own, his promise is not within the statute." (Michael Distrib. Co. v. Tobin (1964) 225 Cal. App. 2d 655, 665-666.) The dispositive question is "whether the promises made are in fact assumptions of another's liability, or the primary obligation of the promisor himself." (Regus v.

Schartkoff (1957) 156 Cal. App. 2d 382.) Thus, it does not appear that the statute of frauds applies here. The demurrer is overruled on this ground. Civil Code section 2819 Dream Motor Cars also argues that Civil Code section 2819 bars enforcement of the guaranty. Civil Code section 2819 states: " A surety is exonerated, except so far as he or she may be indemnified by the principal, if by any act of the creditor, without the consent of the surety the original obligation of the principal is altered in any respect, or the remedies or rights of the creditor against the principal, in respect thereto, in any way impaired or suspended. " The California Supreme Court has held section 2819 "is not applicable" where the promisor was really performing "its own obligation" rather than acting as a surety for a principal. (Merritt v.

J. A. Stafford Co. (1968) 68 Cal. 2d 619.) Thus, this section also does not apply here. Whether the Claims are Timely

Dream Motor Cars also contends that Paragraph 12 repeats the allegation that title is guaranteed for a period of four years from the sale. The purchase of the Lexus is alleged to have occurred on July 26, 2019. (FACC, P. 27.) Thus, it argues, by the nature of the guaranty, the contract of guaranty expired four years later on July 25, 2023, but the cross-complaint was filed on September 12, 2024, after the guaranty expired. However, the FACC alleges that the Auction Agreement provided a written "TITLE GUARANTEE" guaranteeing title to the Vehicle free and clear of all liens and encumbrances for a period of four years from the date of the transaction.

And that promptly, and within any time required under the Auction Agreement, after becoming aware of the title claim, Cross-Complainants notified AVDAA and/or DMC of the claim. Dream Motor Cars fails to submit any legal authority supporting its argument that this is a statue of limitations issue which would bar the lawsuit. The FACC does not reveal on its face that the claims were sought after the four years expired. Rather, it alleges it was timely under the agreement. Dream Motor Cars also argues that Cross-complainant Nwafor is not a validly formed corporation and therefore does not have the capacity to sue as well, and that the contract requires notices of the claim within five days of becoming aware.

But the Court may not consider extraneous matters. Dream Motor Cars does not point to anywhere in the FACC for these propositions and has not sought judicial notice of any documents. The demurrer to the first cause of action is overruled. Second Cause of Action - Express Indemnity Parties may expressly contract for a duty to indemnify. (See Valley Crest Landscape Development, Inc. v. Mission Pools of Escondido, Inc. (2015) 238 Cal.App.4th 468, 479.) Both breach of express contractual indemnity and breach of contract thus rely on the existence of a contract between the parties.

Dream Motor Cars demurs to the Second Cause of Action for indemnity on the grounds that it fails to state facts sufficient to constitute a cause of action. Dream Motor Cars contends this cause of action fails because it is entirely derivative of the same unenforceable guaranty contract that defeats the first cause of action, and since the Cross-Complainants are not parties to that contract, they cannot assert any indemnity rights arising from it. However, as noted above, the FACC alleges other theories as to standing that survive demurrer.

Primary Right Doctrine Dream Motor Cars also argues this claim is independently barred by the primary right

doctrine because it seeks the same relief for the same alleged breach already asserted under the breach of contract cause of action. But the primary right theory has a fairly narrow field of application. It is invoked to prevent a plaintiff from dividing one primary right across two suits, enforced through a plea in abatement (first suit pending) or res judicata (prior adverse judgment). (Crowley v. Katleman (1994) 8 Cal. 4th 666, 682.) Thus, because there is no second suit at issue, the doctrine does not apply.

The demurrer to the second cause of action is overruled. Third Cause of Action - Implied and Equitable Indemnity "Implied contractual indemnity is a type of equitable indemnity [citation], predicated on the indemnitor's breach of contract with the indemnitee." (Garlock Sealing Techs., LLC v. NAK Sealing Techs. Corp. (2007) 148 Cal.App.4th 937, 968. Implied contractual indemnity is available "when two parties in a contractual relationship were both responsible for injuring a third party." (Prince v.

Pacific Gas & Electric Co. (2009) 45 Cal.4th 1151, 1159.) "The right to indemnity flows from payment of a joint legal obligation on another's behalf." (Expressions at Rancho Niguel Association v. Ahmanson Developments, Inc. (2001) 86 Cal.App.4th 1135, 1139.) "The elements of a cause of action for indemnity are (1) a showing of fault on the part of the indemnitor and (2) resulting damages to the indemnitee for which the indemnitor is contractually or equitably responsible." (Id. (emphasis in original).)

Dream Motor Cars argues that the FACC alleges no tort liability on its part or any duty of care it owed to Credit Union. A review of the entire FACC demonstrates that Cross-Complainants allege only breach of contract and related claims arising from an auction agreement. The Court agrees. Equitable indemnity applies only among defendants who are jointly and severally liable to the plaintiff, and although that concept is "fairly expansive," "there must be some basis for tort liability against the proposed indemnitor." (BFGC Architects Planners, Inc. v.

Forcum/Mackey Constr., Inc. (2004) 119 Cal. App. 4th 848, 852.) "Generally, it is based on a duty owed to the underlying plaintiff." (Id.) Where a cross-complaint alleges only that the proposed indemnitor breached its own contract, it states "no cognizable claim" for equitable indemnity. "A person may not ordinarily recover in tort for the breach of duties that merely restate contractual obligations," and recasting a contract claim as tort provides "no basis for a finding of potential joint and several liability." (Id., at 853.)

The FACC does not plead any duty and bases its liability on the breach of contract claims. Finally,

the Court construes Cross-Complainants' lack of opposition as a concession that Dream Motor Cars' arguments are meritorious. (D.I. Chadbourne, Inc. v. Superior Court (1964) 60 Cal.2d 723, 728, fn. 4 [where nonmoving party fails to oppose a ground for a motion, "it is assumed that [nonmoving party] concedes" that ground].) Thus, the demurrer to third cause of action is sustained. Fourth and Fifth Causes of Action - Negligent and Intentional Misrepresentation "The elements of negligent misrepresentation are well established.

A plaintiff must prove the following in order to recover. [M]isrepresentation 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; ignorance of the truth and justifiable reliance on the misrepresentation by the party to whom it was directed; and resulting damage...." (Hydro-Mill Co. v. Hayward, Tilton & Rolapp Ins. Assocs., Inc. (2004) 115 Cal.App.4th 1145, 1154, brackets in original, internal quotation marks and citation omitted.) "The elements of intentional misrepresentation 'are (1) a misrepresentation, (2) knowledge of falsity, (3) intent to induce reliance, (4) actual and justifiable reliance, and (5) resulting damage.' [Citation.]" (Aton Ctr., Inc. v.

United Healthcare Ins. Co. (2023) 93 Cal.App.5th 1214, 1245.) Fraud must be pleaded with particularity showing "how, when, where, to whom, and by what means the representations were tendered." (Stansfield v. Starkey (1990) 220 Cal. App. 3d 59.) Against a corporate defendant, the plaintiff must "allege the names of the persons who made the ... representations, their authority to speak, to whom they spoke, what they said or wrote, and when." (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.

App. 4th 153.) Dream Motor Cars demurs to the fourth cause of action for negligent misrepresentation and fifth cause of action for intentional misrepresentation on the grounds that they fail to state facts sufficient to constitute causes of action. Dream Motor Cars contends that the fraud allegations fail because they are not pled with the required specificity, as Nwafor does not identify who made the alleged statements. The Court finds the FACC fails to allege sufficient facts to state a cause of action for negligent and intentional misrepresentation.

The FACC fails to allege who from Dream Motor Cars made the representations, nor does it allege the speaker's authority to speak. (Glaski v. Bank of Am. (2013) 218 Cal.App.4th 1079, 1090 [elements of fraud "may not be pleaded in a general or conclusory fashion"].) Further, while the FACC alleges that the representations were made to Cross-Complainants as the purchaser at the time and place of the auction sale and that the representations were made in writing (exhibit 1), their names are not on exhibit 1.

Thus, the attachment is in conflict with the allegations that the representations were made to

Cross-Complainants. Finally, the Court construes Cross-Complainants' lack of opposition as a concession that Dream Motor Cars' arguments are meritorious. (D.I. Chadbourne, Inc. v. Superior Court (1964) 60 Cal.2d 723, 728, fn. 4 [where nonmoving party fails to oppose a ground for a motion, "it is assumed that [nonmoving party] concedes" that ground].) Therefore, the Court sustains the demurrer as to the fourth and fifth causes of action. LEGAL STANDARD - Motion to Strike "Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof, but this time limitation shall not apply to motions specified in subdivision (e) ." (Code Civ.

Proc., Sec. 435, subd. (b)(2).) "The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading. (b) Strike out 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." (Id., Sec. 436.) Dream Motor Cars moves to strike the FACC, arguing that Cross-Complainants failed to file any amended pleading within that deadline and instead filed the FACC 73 days late, without seeking or obtaining leave of court.

An untimely amended pleading "is not a nullity"; it remains on file and precludes dispositive proceedings "unless it is stricken." (Gitmed v. Gen. Motors Corp. (1994) 26 Cal. App. 4th 824.) The court had discretion, after it sustained a demurrer, to accept the plaintiffs' late-filed amended complaint, even though plaintiffs did not move for leave to file late." (Harlan v. Dep't of Transportation (2005) 132 Cal. App. 4th 868, 869.) The Court notes that Dream Motor Cars has shown no prejudice from the delay.

Where there is no prejudice to the adverse party, it may be an abuse of discretion to deny leave to amend. (Thompson Pac. Constr., Inc. v. City of Sunnyvale (2007) 155 Cal. App. 4th 525, 544.) Thus, the Court exercises its discretion to accept the late-filed amended cross-complaint. CONCLUSION The Court SUSTAINS in part and OVERRULES in part Cross-Defendant Dream Motor Cars, Inc.'s demurrer to Cross-Complainants Nwafor Motorcars and Chikezie Prince Nwafor's first amended cross-complaint. Cross-Complainants have previously been granted leave to amend and have not provided any showing as to how the FACC can be amended.

Thus, the demurrer is sustained without leave to amend as to the third through fifth causes of action. The demurrer is overruled as to the first and second causes of action. The