Court Opinion

ID: 6334418
Source: CourtListenerOpinion
Date Created: 2022-04-22 23:02:11.25824+00
Date Added: 2024-06-11T09:23:37.219066
License: Public Domain

Filed 4/22/22 Paule v. Asram Properties, LLC CA1/3

                  NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or
ordered published for purposes of rule 8.1115.

          IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                      FIRST APPELLATE DISTRICT

                                                DIVISION THREE

 IRENEE PAULE,
           Plaintiff and Appellant,
                                                                     A161797
 v.
 ASRAM PROPERTIES, LLC,                                              (Alameda County
                                                                     Super. Ct. No. RG1889665)
           Defendant and Respondent.

         Irenee Paule filed the underlying lawsuit against parties who allegedly
deprived her of her contractual right to purchase commercial property in San
Lorenzo (the property). In her complaint, Paule alleged causes of action
against Asram Properties, LLC, the current owner of the property, for
imposition of a constructive trust and civil conspiracy. Asram filed a motion
to strike these causes of action pursuant to Code of Civil Procedure section
436 governing motions to strike. (Undesignated statutory references are to
the Code of Civil Procedure.) The trial court granted Asram’s motion on the
ground that the parties executed a stipulation that obligates Paule to dismiss
her claims against Asram.
         We will reverse the judgment for two related reasons. First, section
436 does not authorize striking an entire cause of action on a non-procedural

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ground, and second Asram failed to demonstrate that Paule’s claims are
barred as a matter of law.
                                BACKGROUND
I. Paule’s Complaint
      In January 2018, Paule filed a complaint for constructive trust, specific
performance, and damages, which she amended the following month. The
complaint names four defendants: Teresita Laguna, a former owner of the
property; two real estate brokers associated with Laguna; and Asram, who
Paule described as a company that “purportedly” purchased the property
from Laguna in December 2017.
      Paule’s complaint alleges the following facts: In April 2016, Paule
leased the property from Laguna for a period of three years and secured the
contractual “ ‘right of refusal to renew the lease or if lessor decides to sell the
property.’ ” In January 2017, Laguna listed the property for sale at a price of
$999,000. In February, Paule made an offer to purchase the property for
$850,000, which Laguna rejected. Sometime later, Asram submitted an offer
for $905,000. In October, Laguna’s broker informed Paule that Asram had
submitted an offer that was higher than Paule’s offer and told Paule that if
she offered $905,000, the property would be hers. In response, Paule
exercised her right of first refusal and submitted an offer to purchase the
property for $905,000, pursuant to terms that were comparable to Asram’s
offer. When Paule made inquiries about the status of her offer, Laguna’s
broker concealed material facts, including that Laguna was proceeding with a
sale to Asram and that Laguna never intended to sell the property to Paule.
In late December 2017, Laguna sold the property to Asram with the
assistance of her broker.

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         Paule incorporated her factual allegations into causes of action against
Laguna and/or the broker defendants for breach of contract, breach of
statutory duties, specific performance, fraud, and civil conspiracy. Asram
was a named defendant in two causes of action: the conspiracy claim, which
was alleged against all defendants; and Paule’s third cause of action for
imposition of a constructive trust, which was alleged solely against Asram.
As additional support for her claims against Asram, Paule alleged that
Asram was aware, before it purchased the property, that Paule had exercised
her right of first refusal and that the other defendants had prevented Paule
from acquiring the property by breaching their contractual and statutory
duties and committing fraud.
II. Asram’s Unlawful Detainer Case
         In May 2019, Asram filed an unlawful detainer complaint against
Paule due to her failure to comply with a 3-day notice to pay rent or quit the
premises after she failed to pay rent in March and April of that year. Asram
sought $11,000 for past due rent, attorney’s fees, forfeiture of the rental
agreement, and other damages. Paule did not respond to the complaint. On
May 23, Asram obtained a default judgment for “restitution of the premises
only.”
         In June 2019, Paule filed a notice of related cases, informing the court
that Asram’s unlawful detainer case was related to her pending action, which
involved the same property. In July, the court set aside the default judgment
pursuant to a stipulation, which was signed by Paule’s counsel and Asram’s
counsel on July 2, 2019 (the 2019 Stipulation).
         The 2019 Stipulation consists of seven numbered paragraphs.
Paragraph one provides that the entry of default and default judgment in
Asram’s unlawful detainer case “shall be set aside and vacated by order of

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this court in accord with this stipulation.” Paragraphs two through six
provide that Paule shall take or refrain from taking various actions. As
relevant here, paragraph two provides that Paule’s answer to Asram’s
unlawful detainer complaint “shall” admit Paule’s failure to pay rent for two
months and shall allege only one affirmative defense: that Asram acquired
the property in constructive trust for the benefit of Paule, based on the
complaint allegations in Paule’s related case. Paragraph six precludes Paule
from objecting to a trial of the unlawful detainer case occurring “not later”
than October 2019, subject to various conditions, including that Paule
reserves “her right” to present her affirmative defense, to obtain a jury trial
of her affirmative defense, and to object to a trial date that would prevent her
from presenting all relevant evidence. Paragraph seven, the final term in the
stipulation, states: “If Asram prevails in the UD Case No. RG19-017177,
Paule shall promptly dismiss with prejudice her claim against Asram in Civil
Case No. BG18-889665.”
      On July 16, 2019, Paule filed her answer to the unlawful detainer
complaint, which included the affirmative defense that “Asram acquired the
property in constructive trust for the benefit of Paule with the duty to convey
the property to Paule and turn over full ownership to Paule, including the
further duty to return to Paule all rent payments collected in trust for her
benefit.”
      On September 12, 2019, the court sustained a demurrer to Paule’s
answer to the unlawful detainer complaint and denied as moot Asram’s
related motion to strike Paule’s affirmative defense. The demurrer was
sustained with leave to amend on the ground that Paule failed to state facts
sufficient to constitute a defense. The court based this ruling on authority
establishing that the ability to contest title through the summary proceeding

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of an unlawful detainer is strictly limited and that equitable grounds for
attacking an acquisition of title are generally not permitted. (Citing Cheney
v. Trauzettel (1937) 9 Cal.2d 158, 159-160.) The court found that an
exception to this general rule can be made only when no party objects, and
here Asram objected to Paule asserting this equitable defense. (Citing Vella
v. Hudgins (1977) 20 Cal.3d 251, 256-258.)
      The order sustaining the demurrer directed Paule to file an amended
answer no later than September 20, 2019, noting that the court was aware
that Paule’s ability to amend “may be constrained” by the 2019 Stipulation.
The court stated that its ruling had no bearing on the merits of Paule’s cause
of action to impose a constructive trust in her related case. Finally, the court
denied without prejudice a request by Paule to consolidate the unlawful
detainer action with her case, finding the matter had not been properly
presented to the court.
      Paule did not file an amended answer to Asram’s unlawful detainer
complaint. On October 7, 2019, Asram obtained another default judgment for
“restitution of the premises only.” Paule filed an appeal, which was not
successful. On June 3, 2020, the appellate division of the superior court
issued its ruling in a minute order, which states: “The order of the trial court
sustaining Asram Properties, LLC’s demurrer with leave to amend is
affirmed. The defendant failed to file an amended answer.” Paule’s petition
for rehearing was denied on August 18, 2020.
III. Asram’s Dismissal from Paule’s Case
      In October 2020, Asram filed a motion to strike Paule’s causes of action
against Asram pursuant to section 436 on the ground that Paule had violated
the 2019 Stipulation. Asram argued that these causes of action are improper
because Paule agreed to dismiss them with prejudice if Asram prevailed in

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the unlawful detainer case, Asram had prevailed in that case, and yet Paule
refused to dismiss her claims.
      Paule opposed the motion to strike on the ground that the 2019
Stipulation does not require her to dismiss her claims against Asram. Paule
argued, among other things, that: the parties intended the word “prevail[]”
in paragraph seven to mean prevail at a jury trial of the facts; Asram’s
proffered interpretation of paragraph seven is inconsistent with rules
governing contract interpretation; and Asram is judicially estopped from
asserting that it prevailed in the unlawful detainer case.
      On December 11, 2020, the trial court granted Asram’s motion to strike
and ordered that Paule’s claims against Asram be dismissed with prejudice.
The court found that under paragraph seven of the 2019 Stipulation, Paule
was obligated to dismiss her claims against Asram because Asram had
prevailed in the unlawful detainer case, which Paule had appealed
unsuccessfully and was now final. On December 17, 2020, the court entered
a final judgment dismissing Asram from Paule’s case. This timely appeal
followed.
                                 DISCUSSION
I. Issues Presented
      Paule contends that the order granting Asram’s motion to strike must
be reversed because the 2019 Stipulation does not require her to dismiss her
claims against Asram. Seeking de novo review of the trial court’s
interpretation of paragraph seven of the stipulation, Paule contends that her
claims against Asram should not be stricken because: she and Asram did not
mutually consent to the meaning of the word “prevails”; failing to clarify that
the word means “prevails at trial” was an excusable mistake; and Asram is

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judicially estopped from arguing that the 2019 Stipulation bars Paule’s
claims.
      Asram counters that the judgment must be affirmed because the trial
court did not abuse its discretion by granting Asram’s motion to strike.
According to Asram, all of Paule’s appellate arguments about why the 2019
Stipulation does not bar her claims are either forfeited or should be rejected
because she failed to prove them in the trial court.
      All of these contentions beg the question whether Asram’s motion to
strike was the proper vehicle for the court to resolve the parties’ dispute
about their respective obligations under the 2019 Stipulation.1 As we will
explain, Asram’s pleading challenge was not a valid motion to strike but a
substantive attack of Paule’s claims. Moreover, the trial court erred by
dismissing Paule’s claims when the record does not show that they are barred
as a matter of law by the 2019 Stipulation.
II. Asram Mislabeled Its Motion As A Motion to Strike
      Section 436 authorizes a court to strike allegations from a pleading in
two situations. Under subdivision (a) (section 436(a)), the court may: “Strike
out any irrelevant, false, or improper matter inserted in any pleading.” This
provision does not authorize striking an entire cause of action, but permits
the court to excise “superfluous or abusive allegations.” (Ferraro v.
Camarlinghi (2008) 161 Cal.App.4th 509, 528 (Ferraro).)
      Section 436, subdivision (b) (section 436(b)) provides that a court may:
“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.” This
provision “authorizes the striking of a pleading due to improprieties in its

      1 Because the parties originally overlooked this issue, we invited them
to address the matter in supplemental briefs.

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form or in the procedures pursuant to which it was filed” and “is commonly
invoked to challenge pleadings filed in violation of a deadline, court order, or
requirement of prior leave of court.” (Ferraro, supra, 161 Cal.App.4th at
p. 528.)
      In the present case, Asram filed its motion to strike under section 436
without specifying which subdivision of the statute allegedly applied.2 The
motion characterized the causes of action that Asram sought to strike as
“improper,” but Asram did not attack any “matter inserted” in Paule’s
complaint. (§ 436(a).) Nor did Asram contend that Paule’s pleading was
“drawn or filed” in violation of a deadline, court order, or other procedural
requirement. (§ 436(b).)
      Asram did argue that the trial court should strike Paule’s causes of
action against Asram because “the maintenance” of those claims
“contravenes” the prior court order that was entered in the unlawful detainer
case. Asram repeats this argument in it supplemental brief, contending that
Paule violated the July 2019 order, entered by the same trial judge in a
related case, by refusing to voluntarily dismiss her claims against Asram.
The premise of this argument is that the 2019 Stipulation that was
incorporated into the July 2019 order requires Paule to dismiss her claims
against Asram, a premise that Paule disputes. Asram’s motion to strike
under section 436 was not the proper mechanism for the trial court to resolve
this factual dispute for two distinct reasons.
      First, as Asram’s supplemental brief acknowledges, “[s]ection 436(b)
authorizes striking a pleading that was ‘filed in violation of a . . . court
order.’ ” (Quoting Ferraro, supra, 161 Cal.App.4th at p. 528.) There is no

      2The order granting Asram’s motion does not cite or discuss section
436. Nor does Asram’s 65-page Respondent’s Brief.

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disputing that Paule’s complaint was filed and answered by Asram more than
a year before the July 2019 order was issued in the unlawful detainer case.
Thus, Paule’s claims against Asram were not “drawn or filed” in violation of
the July 2019 order. (§ 436(b).)
      Second, Asram’s substantive contention—that Paule has violated an
enforceable covenant not to sue Asram—is a potential defense to Paule’s
causes of action. (Rosenstock v. Rosenstock (1971) 20 Cal.App.3d 847, 851.)
But the motion to strike procedure is not designed for challenging the legal
sufficiency of a cause of action; using this vehicle to strike a whole cause of
action on a substantive ground is error. (Quiroz v. Seventh Ave. Center (2006)
140 Cal.App.4th 1256, 1281; see also Ferraro, supra, 161 Cal.App.4th at
p. 529 [objection that complaint fails to state facts sufficient to constitute a
cause of action is ground for a general demurrer, not a motion to strike].)
III. The Trial Court Erred By Dismissing Paule’s Claims
      Some appellate courts treat a mislabeled motion to strike as a
demurrer or motion for judgment on the pleadings. (Ferraro, supra, 161
Cal.App.4th at p. 529; Brandwein v. Butler (2013) 218 Cal.App.4th 1485,
1497-1498.) Adopting the approach here, we do not apply the deferential
standard of review that ordinarily applies when a motion to strike was
granted on a ground authorized by section 436. (Ferraro, at p. 529 [order
striking cause of action for failure to state a claim treated as order sustaining
demurrer without leave to amend and reviewed de novo]; Brandwein, at
pp. 1497-1498 [independent review of trial court’s application of the law to
conclude that plaintiff failed to state a claim as a matter of law]; see also
Velez v. Smith (2006) 142 Cal.App.4th 1154, 1163 [de novo review when
petition stricken for failure to state a claim].)

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      Because the crux of Asram’s motion was that Paule’s claims are barred
as a matter of law by the 2019 Stipulation, we construe it as a general
demurrer attacking the pleading for failing to state a cause of action against
Asram. “In reviewing the sufficiency of a complaint against a general
demurrer, we treat the demurrer as admitting all material facts properly
pleaded, but not contentions or conclusions of law or fact. When court records
which the court may judicially notice provide ground for objection to a
complaint, a demurrer on that ground is proper.” (Britz, Inc. v. Dow
Chemical Co. (1999) 73 Cal.App.4th 177, 180; Evid. Code, § 452, subd. (d).)
Whether an “appellant’s complaint is barred on its face, or on the face of
judicially noticeable matter” are questions of law subject to independent
appellate review. (Ferraro, supra, 161 Cal.App.4th at p. 529.)
      We conclude that Paule’s claims should not have been dismissed on the
ground that they are barred as a matter of law by the 2019 Stipulation. The
2019 Stipulation was filed with the court, making its existence a proper
subject of judicial notice. (Evid. Code, § 452.) But material factual disputes
regarding the interpretation and proper application of paragraph seven of the
2019 Stipulation preclude a finding at this stage in the litigation that Paule’s
claims against Asram are necessarily barred.
      Paule opposed Asram’s motion on the ground that the 2019 Stipulation
does not bar her claims because the agreement she made was to dismiss her
claims only if Asram prevailed at trial in the unlawful detainer case. Paule’s
primary argument in support of this position was that the word “prevails,” as
used in the context of the 2019 Stipulation, is ambiguous and should be
construed in conformity with the parties’ mutual intent; according to Paule,
the parties mutually intended for Paule to receive a substantive ruling on her
constructive trust claim, either in the unlawful detainer case or in the case

                                       10
she previously filed. Asram disputed Paule’s position, arguing that the word
“prevails” is not ambiguous, and that Asram “did not ‘intend’ that the term
‘prevail’ would mean that Asram had to win at a jury trial.”
      The determination whether an ambiguity in contract language exists is
a question of law. (Wolf v. Superior Court (2004) 114 Cal.App.4th 1343, 1350-
1351 (Wolf).) Here, when the term “prevails” is considered in the context of
the entire contract, it is subject to more than one reasonable interpretation.
Paule takes the position that “prevails” means to prevail in a proceeding on
the merits of the constructive trust claim, an interpretation that finds
support in the context where this language is used. It appears in the
paragraph immediately following Paule’s undertaking not to object to a trial
date in the unlawful detainer case that was “without prejudice to Paule (1)
reserving her right to present all relevant evidence in support of her
affirmative defense” of constructive trust, and “(2) reserving her right to a
jury trial of her affirmative defense.” By contrast, Asram adopts a broader
meaning of prevails, encompassing a favorable judgment obtained on any
ground. This interpretation finds support in the absence of language
expressly limiting “prevails.” As paragraph seven of the contract is
reasonably susceptible to both readings, it is ambiguous. (Wolf, at pp. 1350-
1351; see e.g., Leadership Studies, Inc. v. Blanchard Training & Dev., Inc.
(S.D.Cal. 2017) 2017 U.S.Dist. Lexis 198975, *14, vacated in part on other
ground, 2018 U.S. Dist. Lexis 60959 [covenant not to sue that is reasonably
susceptible to multiple interpretations is ambiguous].)
      When, as here, there are two plausible interpretations of a disputed
contract term “ ‘ “parol evidence is admissible to aid in interpreting the
agreement, thereby presenting a question of fact.” ’ ” (Wolf, supra, 114
Cal.App.4th at p. 1351.) “The test of whether parol evidence is admissible to

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construe an ambiguity is not whether the language appears to the court to be
unambiguous, but whether the evidence presented is relevant to prove a
meaning to which the language is ‘reasonably susceptible.’ ” (Winet v. Price
(1992) 4 Cal.App.4th 1159, 1165.) Moreover, when there is a conflict in the
extrinsic evidence, “credibility determinations and the interpretation of the
contract are questions of fact” that are properly resolved by a trier of fact.
(City of Hope National Medical Center v. Genentech, Inc. (2008) 43 Cal.4th
375, 395; Wolf, at p. 1351.)
      These settled principles preclude Asram from proving that the 2019
Stipulation on its face bars Paule’s claims. Accordingly, the order striking
the causes of action alleged against Asram must be reversed.
IV. Unresolved Issues Pertaining To Judicial Estoppel
      In opposing Asram’s motion in the trial court, Paule argued that Asram
is judicially estopped from taking the position that the word “prevails” means
something other than prevails on the merits at trial. Although the trial court
did not address judicial estoppel in its order, the parties agree that the court
made an implicit finding that the doctrine does not apply by granting
Asram’s motion to strike. Paule appeals that ruling.
      “Judicial estoppel ‘prohibits a party from asserting a position in a legal
proceeding that is contrary to a position he or she successfully asserted in the
same or some earlier proceeding.’ ” (Victrola 89, LLC v. Jaman Properties
8 LLC (2020) 46 Cal.App.5th 337, 357 (Victrola 89).) The determination
whether judicial estoppel applies under the facts of a given case “is a question
of law for the trial court.” (Kelsey v. Waste Management of Alameda County
(1999) 76 Cal.App.4th 590, 597.) Absent a material factual dispute, the
matter may be resolved in a summary proceeding. (Ibid.) However, disputes

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about whether the factual elements of the doctrine are satisfied should be
resolved by a trier of fact. (Ibid.)
        “The elements of judicial estoppel are ‘(1) the same party has taken two
positions; (2) the positions were taken in judicial or quasi-judicial
administrative proceedings; (3) the party was successful in asserting the first
position (i.e., the tribunal adopted the position or accepted it as true); (4) the
two positions are totally inconsistent; and (5) the first position was not taken
as a result of ignorance, fraud, or mistake.’ [Citations.] Even if the necessary
elements of judicial estoppel are satisfied, the trial court still has discretion
to not apply the doctrine.” (Owens v. County of Los Angeles (2013) 220
Cal.App.4th 107, 121.)
        In the trial court, Paule argued that judicial estoppel applies because
Asram obtained a favorable ruling on its demurrer in the unlawful detainer
case by purporting to share Paule’s understanding that the word “prevails” in
the 2019 Stipulation had a limited meaning. Only later, Paule argued,
Asram changed its position about what prevails means to create a “ ‘gotcha’ ”
and claim that Paule had to dismiss her claims because Asram prevailed in
the unlawful detainer case. In responding to Paule’s judicial estoppel theory,
Asram disputed taking a different position in the unlawful detainer case and
also disputed that the trial court adopted the inconsistent position that Paule
attributes to Asram when it sustained the demurrer in the unlawful detainer
case.
        These arguments suggest that there may be an unresolved factual
dispute pertaining to one or more elements of judicial estoppel. However, we
cannot make that determination at this juncture because the appellate record
does not incorporate pertinent court records from the demurrer proceeding in
the unlawful detainer case. Nor can we determine from this record whether

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the trial court made a discretionary decision in this case not to apply the
judicial estoppel doctrine.3 Since we have already concluded that the order
striking Paule’s claims must be reversed, we leave these matters for the trial
court to consider on remand.
                                           DISPOSITION
         The judgment is reversed. Costs are awarded to appellant.

                                                    TUCHER, P.J.

WE CONCUR:

FUJISAKI, J.
RODRÍGUEZ, J.

Paule v. Asram Properties, LLC (A161797)

        We do note that the trial judge who granted Asram’s motion to strike
         3

also sustained the demurrer in the unlawful detainer case.

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