Kronsberg v. Wershow

• Decision Date: 17 November 1965
• Citation: 238 Cal.App.2d 170,47 Cal.Rptr. 592
• Court: California Court of Appeals Court of Appeals
• Parties: Ray KRONSBERG and Abbotwares, a corporation, Plaintiffs and Appellants, v. Milton J. WERSHOW and Milton J. Wershow Co., a corporation, Defendants and Respondents. Civ. 28352.

Page 592

47 Cal.Rptr. 592

238 Cal.App.2d 170

Ray KRONSBERG and Abbotwares, a corporation, Plaintiffs and Appellants, v. Milton J. WERSHOW and Milton J. Wershow Co., a corporation, Defendants and Respondents.

Civ. 28352.

District Court of Appeal, Second District, Division 1, California.

Nov. 17, 1965.

Sax & Grossman and Robert J. Grossman, Los Angeles, for appellants.

Gendel, Raskoff, Shapiro & Quittner, Frank C. Christl and G. Merle Bergman, Los Angeles, for respondents.

LILLIE, Justice.

This is an appeal from a judgment of dismissal following an order granting a motion to strike plaintiffs' fourth amended complaint. Plaintiffs have also attempted to appeal from a nonappealable order denying their motion for reconsideration of the above ruling (Genis v. Krasne, 47 Cal.2d 241, 249, 302 P.2d 289) and have additionally argued the merits of their appeal from a formal order dismissing the action as to defendant Wershow individually. It appears, however, that timely notice of appeal from such latter order was not given; on respondents' motion, therefore, the appeal therefrom was dismissed by this court. Thereafter a remittitur to that effect issued on August 10, 1964, providing that the appeal 'from all orders other than that of March 23, 1964, is dismissed,' the March 23 order being the judgment dismissing the action in its entirety. Thus, all such other matters having become moot, no consideration will be given to further argument by plaintiffs with respect thereto. ¹

In April of 1962 the parties entered into a written agreement, supplemented by another writing executed the same day, for the sale at auction by defendant corporation of plaintiffs' property consisting of machinery, other items of personalty and certain parcels of real property. Pursuant thereto, title to the property was conveyed to defendant and an auction was conducted on June 20 of the above year. While various items of personal property were sold, a certain item, referred to in the pleadings as the 'air facility,' was not sold and, it is alleged, never redelivered to plaintiffs. As for the real property, defendant accepted bids therefor but, according to plaintiffs, never arranged for the consummation of such sales. In view of the above omissions, the gross proceeds of the sale (approximately $21,000) represented but a small fraction of defendant's advances as well as its commissions and expenses ($112,000).

Plaintiffs' first two complaints, to which demurrers were sustained, were in three counts: breach of contract, conversion (of the air facility) and fraud. The demurrer to the first amended complaint having been sustained with leave to amend, a second amended complaint was filed by plaintiffs. A demurrer thereto, both general and special, was again sustained with leave to amend; a motion to strike numerous portions of the pleading was also granted. In allowing plaintiffs 20 days to amend, the trial court filed a seven-page memorandum in support of its rulings. When it sustained a demurrer to the third amended complaint, the court filed a minute order reciting that its written views respecting the deficiencies in plaintiffs' prior pleading were still 'largely disregarded.' Being of the same view when the fourth amended complaint was filed, specifically, 'It does not in fact nor in spirit conform to the previous rulings of the Court,' the trial court considered defendants' motion to dismiss as a motion to strike, ordered the pleading stricken and gave plaintiffs 20 days to amend. No such amendment was filed, and defendants' motion to dismiss was thereupon granted.

Plaintiffs have drafted five different complaints to which either demurrers were sustained or motions to strike granted. If the rulings prior to that relating to the fourth amended complaint were correct, it cannot be doubted that the trial court had jurisdiction to strike such pleading on the ground that it was frivolous and a sham. "The fundamental principle running through the cases is that a court is not required to tolerate a purported amended complaint which fails to amend the previous pleading, is not filed in good faith, is filed in disregard of established procedural requirements, or is otherwise violative of orderly judicial administration. * * *" (Tostevin v. Douglas, 160 Cal.App.2d 321, 331, 325 P.2d 130, 136.) It is plaintiffs' contentions that their third and fourth amended complaints conformed to the ruling on the second amended complaint as to matters specially demurrable; ² they admit their refusal, however, to conform to 'certain major points' or rulings which are stated to be erroneous.

As to the first count, in all five complaints the agreements assertedly breached are set forth in haec verba, being annexed to each pleading as exhibits. In its ruling with respect to the second amended complaint, the trial court observed that 'Exhibits A and B constitute the contract between the parties. All contrary allegations in the complaint as to the agreement are superseded by the agreement itself, and are to be disregarded and may be stricken.' Cited is Washer v. Bank of America, 21 Cal.2d 822, 829-830, 136 P.2d 297, 302, 155 A.L.R. 1338: 'The general rule is that when a written instrument which is the foundation of a cause of action or defense is attached to a pleading as an exhibit and incorporated into it by proper reference, the court may, upon demurrer, examine the exhibit and treat the pleader's allegations of its legal effect as surplusage.' Paragraph 11 of the second amended complaint contains the charging allegations in breach of the agreement. It is therein alleged that the auction sale took place on June 20, 1962; while some sales were made, defendants failed to account for expenses, receipts and disbursements within 30 days thereafter; also, defendants failed to reconvey the unsold property within 30 days of the sale, or at all. But the supplement to the agreement (Exh. B) specifically provides that 'if the proceeds of the sales of the property referred to in the agreement are not sufficient to reimburse me [defendant company] for my advances, expenses, commission and costs, and if the air facility is not sold, I will arrange for sufficient financing on the air facility to cover the amounts that will be owed to me. Such loan will be for at least a period of one year.' The present action was filed before the expiration of that period. As the trial court correctly noted, 'If the Wershow Company secures a loan upon such property, it can only do so because it holds title. If it holds title, it cannot reconvey it; at least not subject to the loan.' Paragraph 4 of the fourth amended complaint contains substantially the same charging allegations despite the defects above pointed out. We thus have an amended complaint which fails, and in fact does not attempt, to remedy the defects in the previous pleading; it is proper, therefore, to strike such pleading from the files on the ground that it 'is in all its essential averments but a repetition' of a complaint previously found to be deficient. (Wilson v. Shea, 194 Cal. 653, 659, 229 P. 945, 947.)

The same is true of the count for conversion wherein the two agreements are repleaded by reference. In its memorandum opinion, the trial court noted that the equipment had been conveyed to the defendants and therefore 'plaintiffs are not the owners of and entitled to the possession of such property.' Continuing, 'If there is a duty to reconvey, then that duty must be predicated upon the satisfaction of the auctioneer's charges as indicated above.' Notwithstanding such ruling, plaintiffs' subsequent complaints continue to allege ownership of the personalty as of July 21, 1962, when defendants' 'lawful possession' is said to have terminated and plaintiffs' demand for reconveyance was refused. ³ It is settled, of course, that the gist of the right of recovery in an action for conversion is derived from ownership with the right of possession, or...