HERNANDEZ vs TITA P. PADAYAO TRUST, et al.

Court noted that it "finds support for both positions in the record." (June 16, 2026 Minute Order.) Therefore, the appropriate interpretation is left to the trier of fact, not for the Court's sole determination on demurrer. Accordingly, Defendants' Demurrer as to the Second Amended Complaint is OVERRULED.

PADAYAO TRUST, et al. CASE NO.: 25NWCV02265 HEARING: 9/2/26 @ 9:30 AM #15

Defendants EXCELLENCE RE REAL ESTATE, INC. and CARLOS HERNANDEZ's Demurrer to Plaintiff LUSILA HERNANDEZ's Complaint is SUSTAINED with 20 days leave to amend. Defendants' Motion to Strike is GRANTED in part and DENIED in part as set forth below. Moving Party to give NOTICE. Defendants EXCELLENCE RE REAL ESTATE, INC. and CARLOS HERNANDEZ (Defendants) demur to the First Cause of Action for Breach of Contract, Second Cause of Action for Breach of the Implied Covenant of Good Faith and Fair Dealing, Seventh Cause of Action for Accounting, and Eighth Cause of Action for Lost Profits in Plaintiff LUSILA HERNANDEZ's (Plaintiff) Complaint.

Background

The operative Complaint filed on June 23, 2026 alleges that on November 8, 2022, Plaintiff and Defendant Tita P. Padayao Trust entered into a written Commercial Lease Agreement for the property located at 3809 Gage Avenue, Bell, California, for use as a Botanica and spiritual services business. The other Defendants executed the agreement as agents. Plaintiff paid the security deposit and rent, made significant improvements to the premises, and attempted to commence lawful business operations. Defendants breached the contract by leasing premises that were not properly zoned for the agreed use. (Complaint, P.P. 20-22.)

As a result, Plaintiff suffered damages including loss of security deposit ($16,200), rent payments, over $23,000 in business improvements and moving costs, lost business income, prejudgment interest, and attorneys fees and costs. (Complaint, P. 23.) Based thereon Plaintiff asserts the following causes of action: 1. BREACH OF CONTRACT 2. BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING 3. BREACH OF FIDUCIARY DUTY 4. NEGLIGENCE 5. VIOLATION OF BUSINESS & PROFESSIONS CODE Sec.17200 ET SEQ.

6. NEGLIGENT MISREPRESENTATION 7. ACCOUNTING

8. LOST PROFITS Legal Standard A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters.

Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (CCP Sec.Sec. 430.30, 430.70.) At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) A "demurrer does not, however, admit contentions, deductions or conclusions of fact or law alleged in the pleading, or the construction of instruments pleaded, or facts impossible in law." (S.

Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732, internal citations omitted.) "Liberality in permitting amendment is the rule, if a fair opportunity to correct any defect has not been given." (Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1227.) It is an abuse of discretion for the court to deny leave to amend where there is any reasonable possibility that plaintiff can state a good cause of action. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) The burden is on plaintiff to show¿ in what manner ¿plaintiff can amend the complaint, and¿ how ¿that amendment will change the legal effect of the pleading. ¿(Id.)

Discussion 1 st CAUSE OF ACTION - BREACH OF CONTRACT; 2 nd CAUSE OF ACTION - BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING BREACH OF CONTRACT: Establishing a breach of contract claim requires a showing of (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. (D'Arrigo Bros. of California v. United Farmworkers of America (2014) 224 Cal.App.4th 790.) A breach of the covenant of good faith and fair dealing does not give rise to a cause of action separate from a cause of action for breach of the contract containing the covenant. (Smith v.

International Brotherhood of Electrical Workers (2003) 109 Cal.App.4th 1637.) Although California courts recognize that an implied covenant claim may, in limited circumstances, proceed alongside a contract claim, such as where a party with contractual discretion exercises that discretion in bad faith. (Hewlett-Packard Co. v. Oracle Corp. (2021) 65 Cal.App.5th 506, 534.) A plaintiff must plead specific facts showing conduct that goes beyond a mere failure to perform an express contractual obligation. (Id.)

Defendants

argue that Plaintiff has not pled any contract other than the Lease, and because Defendants are not parties to the Lease Agreement, there can be no breach of contract or breach of the covenant of good faith and fair dealing. In opposition, Plaintiff argues that Paragraph 8 of the Complaint alleges that all Defendants, "inclusive of DOES 1 through 50, were authorized and empowered by each other to act, and did so act, as agents of each other," and that the acts alleged "were done in the capacity of such agency."

Paragraph 20 specifically alleges that Plaintiff and the Tita P. Padayao Trust entered into the Commercial Lease Agreement and that "The other Defendants executed the agreement as agents." Plaintiff further argues that the First and Second Causes of Action remain viable because the Broker Defendants owe independent fiduciary and professional duties under California law. The Court finds Plaintiff has failed to state a cause of action for breach of contract against Defendants given Plaintiff fails to allege that Defendants were signatories to the contract, via the Lease.

Plaintiff alleges that, "On or about November 8, 2022, Plaintiff and Defendant Tita P. Padayao Trust entered into a written Commercial Lease Agreement for the property located at 3809 Gage Avenue, Bell, California, for use as a Botanica and spiritual services business known [sic]. The other Defendants executed the agreement as agents." (Complaint, P. 20.) Plaintiff's argument that the breach of contract-derived causes of action survive because Defendants owed an independent fiduciary duty to Plaintiff is unavailing as those allegations fail to demonstrate Defendants entered into a contract with Plaintiff.

The allegations regarding Defendants' role as agents are relevant to the breach of fiduciary cause of action which is not at issue in the underlying demurrer. Moreover, the implied covenant claim seeks the same relief and rests on the same alleged failure as the contract claim. Plaintiff does not identify any independent duty or separate wrongful act. Accordingly, the demurrer to the first and second causes of action is SUSTAINED with 20 days leave to amend. 7 th CAUSE OF ACTION: Accounting; 8 th CAUSE OF ACTION: Lost Profits An action for an accounting has two elements: (1) that a relationship exists between the plaintiff and defendant that requires an accounting and (2) that some balance is due the plaintiff that can only be ascertained by an accounting. (Sass v.

Cohen (2020) 10 Cal.5th 861, 869.) As stated above, Plaintiff entered into a Lease Agreement with Tita P. Padayao Trust. Therefore, Plaintiffs fail to state a cause of action under Accounting as to Defendants in their individual capacity. Lost profits are a contract remedy, not a cause of action, and are generally not recoverable in tort. (See Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 515.) Nonetheless, Plaintiff is granted leave to amend so that the allegations may be re-pleaded as part of the damages sought

under the remaining causes of action. Accordingly, the demurrer as to the seventh and eigth causes of action are SUSTAINED with 20 days leave to amend. Motion to Strike 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. (CCP Sec.436.) In order to plead a prima facie claim for punitive damages, a plaintiff must plead the ultimate facts from which it can reasonably be inferred that a defendant acted with "oppression, fraud, or malice" against the plaintiff within the meaning of Civil Code Sec. 3294. (Coil.

Hosp., Inc. v. Superior Court (1994) 8 Cal.4th 704, 721; Cyrus v. Haveson (1976) 65 Cal.App.3d 306, 316-317.) Defendants request an order striking: · Emotional distress and/or general damages · Punitive and/ or exemplary damages allegations · Attorney's fees and costs. As to punitive damages (CCP Sec. 3294), California Civil Code section 3294 authorizes the recovery of punitive damages where "the defendant has been guilty of oppression, fraud, or malice . . . ." (Civ. Code Sec. 3294(a).) Here, Plaintiff alleges Carlos Hernandez as Plaintiff's real estate agent and Excellence RE Real Estate, Inc. as her broker--owed fiduciary duties of utmost care, integrity, honesty, and loyalty. (Complaint P.P. 5-6, 29-31.)

Defendants misrepresented or failed to disclose material facts concerning the zoning of the premises and the suitability of the property for Plaintiff's intended use as a spiritual-services and botanica business; that Plaintiff reasonably relied on their professional guidance and representations; that she signed the lease and invested substantial sums in moving, improvements, and business operations; and that she suffered significant harm as a result. (Complaint P.P. 13-18, 42.) Therefore, the Court finds Plaintiff's allegation that Defendants acted with malice, oppression, or fraud conclusory.

Plaintiff has not alleged any specific interactions with Defendants or differentiated their conduct from the other defendants. Defendants' motion to strike the punitive damages allegation is GRANTED with 20 days leave to amend. As to emotional distress and/or general damages, Plaintiff alleges economic losses, lost investments in the lease and improvements, lost income, and other harm proximately caused by the Defendants' conduct. (Complaint P.P. 13-18, 27, 46.) These allegations support a prayer for general damages.

However, a plaintiff "incurring neither physical impact nor physical damage, and whose loss (other than

emotional distress) is solely economic, is entitled neither to punitive damages nor to a recovery for emotional distress." (Branch v. Homefed Bank (1992) 6 Cal. App. 4th 793, 799, 800.) Accordingly, Defendants' motion to strike general damages is DENIED. The motion to strike emotional distress damages is GRANTED with 20 days leave to amend. As to attorney's fees, Plaintiff fails to set forth a statutory or contractual basis for their recovery from Defendants. Accordingly, Defendants' motion to strike attorney's fees is GRANTED with 20 days leave to amend.

Case Number: VC065187 Hearing Date: September 2, 2026 Dept: C NATIONAL COLLEGIATE STUDENT LOAN v. ALDANA CASE NO.: VC065187 HEARING: 9/2/26 @ 9:30 AM #16 TENTATIVE ORDER On the Court's own motion, Pro Per Defendant MARTHA A ALDANA's Motion to Set Aside Default is CONTINUED September 16, 2026 at 9:30 a.m. in Dept. SE-C. Clerk to give NOTICE. | Home -->)" -->