Timberlake v. Schwank

COUGHLIN, J. Plaintiffs appeal from a judgment dismissing their action upon motion of defendants Trailer ancho Corporation, and Herb Schwank, its agent. The action was premised upon a complaint setting forth six causes of action. Defendants answered. Subsequently plaintiffs dismissed the second, fifth and sixth causes of action. Thereafter defendants moved to dismiss the remaining causes of action, i.e., the first, third and fourth, upon the ground neither of them stated facts sufficient to constitute a cause of action. The court granted the motion and entered judgment of dismissal.

An action may be dismissed upon motion where the [710]complaint does not state a cause of action and cannot be amended to state such. (McKay v. County of Riverside, 175 Cal.App.2d 247, 249 [345 P.2d 949] ; Monahan v. Blossom, 88 Cal.App.2d 951, 952 [199 P.2d 738].) The motion is in the nature of a general demurrer. (Lavine v. Jessup, 48 Cal.2d 611, 615 [311 P.2d 8].) An order granting the motion is tantamount to an order sustaining a demurrer without leave to amend. (Id.) Where it is possible to amend the complaint to state a cause of action and the plaintiff is not afforded an opportunity to amend, a dismissal, whether upon motion or demurrer, is error. (Pacific Paving Co. v. Vizelich, 141 Cal. 4, 10 [74 P. 352]; Covo v. Lobue, 220 Cal.App.2d 218, 221 [33 Cal.Rptr. 828]; Miller v. McLaglen, 82 Cal.App. 2d 219, 228 [186 P.2d 48].)

Plaintiffs concede the dismissal of the fourth cause of action in their complaint was proper, but contend the dismissal of the first and third causes of action was improper.

The first cause of action sets forth facts that possibly could be the basis for recovery under two different legal theories; one, upon the ground of fraud; and the other upon a breach of contract to enter into a joint venture. The defendants contend the purported cause of action thus asserted is for breach of a joint venture agreement; recovery on account thereof can be had only upon dissolution and an accounting; and plaintiffs’ attempt to recover disregards this requirement.

The first cause of action alleges false representations by defendant corporation through its agent to plaintiffs; in reliance thereon plaintiffs entered into a joint venture agreement with the corporation; as a result thereof contributed $200,000 to the joint venture; and “by reason of the fraud of defendants” have been damaged in the sum of not less than $200,000. The alleged false representations were that (1) the cost of construction of a trailer park, apparently to be built as a joint venture undertaking, would be $428,000; (2) plaintiffs would contribute one-fourth of that amount, the corporation would contribute one-fourth, and the corporation would finance the balance; and (3) plaintiffs would make $14,000 per year profit from the undertaking. It was alleged these representations were false. In addition, it was alleged the trailer park did not cost in excess of $200,000; the corporation did not advance its one-fourth of the cost but instead borrowed $201,600 upon a note by or assumed by the joint venture; and “it is impossible for the joint venture to earn