Case Number: 19STCV29010    Hearing Date: May 2, 2023    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

Background

Plaintiff Abraham Lopez sues, among others, former employer Defendants Alexander Demolition and Hauling (Alexander Demo) and its owner and operator Felipe Davila—with all the Defendants tied together through allegations of integrated enterprise—pursuant to various claims, including: (1) Retaliation under Qui Tam/California False Claims Act on the grounds that, inter alia, Plaintiff Abraham Lopez blew the whistle against the Defendants’ violation of the AB 939 (requiring Solid Waste Haulers pay 10% of Gross Annual Receipts for landfill disposal of materials exceeding 1,000 tons per year) where the Defendants instructed waste drivers to lie in various ways to avoid meeting the 1,000 ton limit; (2) Disability Discrimination under the Fair Employment and Housing Act (“FEHA”) based on discrimination against Abraham Lopez as a result of his stress eating, weight, and emotional eating; (3) FEHA Failure to Reasonably Accommodate or Engage in the Interactive Process as to Plaintiff Abraham Lopez’s protected conditions; (4) FEHA Retaliation on various grounds, including disabilities, reporting of harassment, and whistleblowing; (5) FEHA Harassment; (6) Failure to Prevent FEHA Discrimination, Harassment, and Retaliation; (7) Wrongful Termination—either directly or constructively—on January 19, 2018; (8) Labor Code Whistleblower Retaliation; (9) Labor Code Failure to Provide or Pay Meal and Rest Breaks; (10) Labor Code Non-Payment of Wages; (11) Labor Code Failure to Provide Itemized Wage Statements; (12) Labor Code Failure to Pay Wages Upon Discharge and Associated Penalties; (13) Common Law Assault and Battery by ratification of conduct of a supervisor named “John” in grabbing at Plaintiff Abraham Lopez’s chest and making comments to the effect that Abraham Lopez had breasts like a girl, inter alia; (14) Negligent Hiring and Retention of John; (15) Intentional Infliction of Emotional Distress based on the foregoing torts against and violations of the rights of Plaintiff Abraham Lopez; and (16) Violation of Business and Professions Code section 17200, et seq. through the ABA 939 and Labor Code violations described ante. The initial Complaint was filed by Plaintiff Abraham Lopez on August 16, 2019, and his First Amended Complaint thereto was filed on August 5, 2020.

In turn, Defendants Alexander Demo—a Solid Waste Hauler company that disposes(d) of solid, construction, and demolition waste in landfills—and Felipe Davila—owner and operator of Alexander Demo—filed a December 5, 2022 Cross-Complaint against Plaintiff/Cross-Defendant Abraham Lopez and Cross-Defendants Omar Lopez (Abraham’s Lopez’s brother and his alleged Supervisor while employed by Alexander Demo and the other Defendants), Elias Gonzalo Davila (Felipe Davila’s brother, who owned a stake in Alexander Demo from 2006 to 2016 but later sold this to Felipe Davila), and L.D. Construction and Demolition (company competing with Alexander Demo founded by Abraham and Omar Lopez [Lopez Brothers] and Elias Gonzalo Davila, to which the Lopez Brothers and Elias Gonzalez Davila allegedly redirected money, equipment, and clients belonging to Alexander Demo). The Cross-Complaint alleges: (1) Tortious Claim for Breach of the Employee’s Duty of Loyalty (essentially, Breach of Fiduciary Duty) against Plaintiff Abraham Lopez and Oscar Lopez based on the Lopez Brothers allegedly stealing, taking, or otherwise misusing funds, monies, and property belonging to Alexander Demo, removing documents from Alexander Demo to cover their acts, and redirecting clients to L.D. Construction; (2) Breach of Fiduciary Duty against Gonzalo Davila based on the same or similar conduct; (3) Conversion against all Cross-Defendants based on the foregoing conduct; (4) Fraud against all Cross-Defendants based on misrepresentations or concealments relating to misuse of Alexander Demo monies and documents, inter alia; and (5) Intentional Infliction of Emotion Distress (IIED) against the Cross-Defendants based on the Cross-Defendants’ conduct, including allegations of extortion of Felipe Davila by the individual Cross-Defendants.

On January 9, 2023, Cross-Defendant Elias Gonzalo Davila filed an Answer to Cross-Complaint.

On January 18, 2023, Cross-Defendant Omar Lopez filed an Answer to Cross-Complaint.

On February 23, 2023, Plaintiff/Cross-Defendant Abraham Lopez demurred on various grounds to either the entire Cross-Complaint as a whole or to the Cross-Complaint’s first and third through fifth causes of action individually, i.e., the only claims alleged in the Cross-Complaint against Abraham Lopez, where the second cause of action is pleaded against Elias Gonzalo Davila alone.

On April 5, 2023, Alexander Demo and Felipe Davila opposed the demurrer.

On April 25, 2023, Abraham Lopez replied to the opposition.

The demurrer is now before the Court.

Timeliness

The Court first admonishes Plaintiff/Cross-Defendant Abraham Lopez for filing a late demurrer to the Cross-Complaint. A party served with a cross-complaint may within 30 days after service move, demur, or otherwise plead to the cross-complaint in the same manner as to an original complaint. (Code Civ. Proc., § 432.10.) The Cross-Complaint was personally served on Abraham Lopez on December 8, 2022. (12/23/22 Proof of Service, Abraham Lopez.) 30 days after December 8, 2022 was Saturday, January 7, 2023, pushing Abraham Lopez’s final date to demur to the Cross-Complaint to Monday, January 9, 2023. (Cal. Rules of Court, rule 1.10.) Yet, the demurrer was not made until February February 23, 2023, a full month and a half later. (See Demurrer, 1:1.)

Despite such late filing, the Court will hear the demurrer for several reasons. First, the 30-day requirement is not mandatory, where the words ‘may demur’ connotes a permissive standard. (See Code Civ. Proc., §§ 430.40, 432.10; see McAllister v. County of Monterrey (2007) 147 Cal.App.4th 253, 280 [making this observation and further noting this statutory section only applies to the first round of demurrers, i.e., to original and not amended pleadings].) Second, case law holds that “[t]here is no absolute right to have a pleading stricken for lack of timeliness in filing where no question of jurisdiction is involved, and where … the late filing was a mere irregularity,” such that “the granting or denial of the motion is a matter [that] lies within the discretion of the court.” (McAllister v. County of Monterrey, supra, at pp. 281-282, citations omitted.) Last, “[t]he court may, in furtherance of justice, and on any terms as may be proper, … enlarge the time for answer or demurrer.” (Code Civ. Proc., § 473, subd. (a)(1).) “The trial court may exercise this discretion so long as its action does ‘not affect the substantial rights of the parties.’” (McAllister v. County of Monterrey, supra, at p. 282, citations omitted; see Vitkievica v. Valverde (2012) 202 Cal.App.4th 1306, 1314 [regardless of whether demurrer was timely filed, judge, in interests of justice, may rule on merits of statute of limitations defense; any procedural defect with respect to such untimely pleading does not affect parties’ substantial rights (Code Civ. Proc., § 475) and therefore, late filing is not grounds for reversal].) Here, Alexander Demo and Felipe Davila’s substantial rights cannot be said to have been affected where they opposed Abraham Lopez’s demurrer on the merits.

As such, the Court proceeds with an analysis of Abraham Lopez’s demurrer.

Demurrer

Demurrer Sufficiency Standard 

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747; see Code Civ. Proc., § 430.10, subd. (e).) This device 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.) “To survive a [general] demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) In testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.) A demurrer, however, “does not admit contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228, disapproved on other grounds, Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal.4th 1158, 1162.) The face of the complaint includes exhibits attached to the complaint. (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94.) If facts appearing in the exhibits contradict those alleged, the facts in the exhibits take precedence. (Holland v. Morse Diesel Intern., Inc. (2001) 86 Cal.App.4th 1443, 1447, superseded by statute on other grounds as stated in White v. Cridlebaugh (2009) 178 Cal.App.4th 506, 521.)

Demurrer Uncertainty Standard 

A demurrer to a pleading lies where the pleading is uncertain, ambiguous, or unintelligible. (Code Civ. Proc. § 430.10, subd. (f).) “A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616.) As a result, a special demurrer for uncertainty is not intended to reach failure to incorporate sufficient facts in the pleading but is directed only at uncertainty existing in the allegations already made. (People v. Taliaferro (1957) 149 Cal.App.2d 822, 825.) Where a complaint is sufficient to state a cause of action and to apprise defendant of issues to be met, it is not properly subject to a special demurrer for uncertainty. (See ibid.; see also Gressley v. Williams (1961) 193 Cal.App.2d 636, 643 [“A special demurrer [for uncertainty] should be overruled where the allegations of the complaint are sufficiently clear to apprise the defendant of the issues which he is to meet”].)

Entire Cross-Complaint, Uncertainty: OVERRULED.

Cross-Defendant Abraham Lopez first argues that his demurrer should be sustained as to the entire Cross-Complaint based on the ground of uncertainty in pleading because the Cross-Complaint lumps together various allegations against four cross-defendants without sufficiently apprising Abraham Lopez what he did as opposed to the other three Cross-Defendants, when he did it, how his actions caused harm, and the connection between conduct and harm. (Demurrer, pp. 3-4 [general argument regarding uncertainty]; see Demurrer, pp. 7, 10, 15 [uncertainty arguments to first, third, and fifth causes of action].)

In opposition, Alexander Demo and Felipe Davila do not explicitly rebut this uncertainty argument, instead focusing their arguments on why the Cross-Complaint’s first and third through fifth causes of action are sufficiently stated against Abraham Lopez. (See Opp’n, generally.)

In reply, Abraham Lopez briefly repeats the uncertainty arguments. (See Reply, p. 2.)

The Court finds that the Cross-Complaint is not uncertainly pleaded as to Abraham Lopez.

Aside from the fraud claim, which is subject to higher standard of pleading and is further discussed below, the first, third, and fifth causes of action for breach of fiduciary duty, conversion, and IIED are properly supported by allegations in the Cross-Complaint sufficiently apprising Abraham Lopez of the tortious conduct being attributed to him and its connection to the claims against him. (See, e.g., Cross-Complaint, ¶¶ 35 [Abraham Lopez stole equipment, supplies, customers, and generally embezzled from Alexander Demo], 36 [Abraham Lopez diverted income received for work contracts belonging to Alexander Demo by requesting or receiving cash payments], 37 [Abraham Lopez destroyed Alexander Demo company records to conceal work orders indicating jobs had been performed for a client], 38 [Abraham Lopez redirected waste haul loads to hide or falsify documentation concerning work orders not reported], 39-40 [Abraham Lopez created profiles for and made payments to employees that did not exist on the payroll roster], 47 [Abraham Lopez redirected clients of Alexander Demo to L.D. Construction], 56 [Abraham Lopez attempted to extort Felipe Davila for $150,000]; see also Gressley v. Williams, supra, 193 Cal.App.2d at p. 643 [“A special demurrer [for uncertainty] should be overruled where the allegations of the complaint are sufficiently clear to apprise the defendant of the issues which he is to meet”].)

Abraham Lopez’s demurrer to the entire Cross-Complaint on the ground of uncertainty is thus OVERRULED.

First Cause of Action, Tortious Claim for Breach of the Employee’s Duty of Loyalty: SUSTAINED, With Leave to Amend, as to Abraham Lopez Only.

I. Sufficiency of Pleading, No Valid Cause of Action

The Cross-Complaint’s first cause of action against Plaintiff Abraham Lopez and Oscar Lopez pleads “Tortious Claim for Breach of the Employee’s Duty of Loyalty” based on incorporated allegations, references to three cases involving breach of a duty of loyalty, and a comparison of the Cross-Complaint’s pleadings against these Cross-Defendants and the cited cases. (Complaint, ¶¶ 59-70.) Incorporated and stated pleadings include the Lopez Brothers allegedly stealing, taking, and misusing funds, monies, and property belonging to Alexander Demo, removing documents from Alexander Demo to cover their acts, and redirecting clients to L.D. Construction. (See, e.g., Cross-Complaint, ¶¶ 35-40, 47 [incorporated pleadings], 59, 61, 63 [first cause of action incorporation and pleadings].)

Abraham Lopez challenges the Cross-Complaint’s first cause of action on the ground that “Tortious Claim for Breach of the Employee’s Duty of Loyalty” is not a valid claim upon which relief can be granted. (Demurrer, pp. 4-5.) The argument is that, at most, what is being alleged is a breach of fiduciary duty, and that Abraham Lopez is pleaded as too low level of an employee to properly uphold a breach of fiduciary duty claim against him. (Demurrer, pp. 4-5.) Abraham Lopez also argues that the cases cited in the text of the first cause of action are distinguishable for various reasons. (Demurrer, p. 5.)

In opposition, Alexander Demo and Felipe Davila argue that the title of the claim is not as important as the nature of the cause of action alleged—i.e., breach of fiduciary duty. (Opp’n, p. 8.) Alexander Demo and Felipe Davila then argue that the first cause of action properly alleges breaches of fiduciary duty against Abraham Lopez by citing to Labor Code sections 2860 and 2863 and by alleging that Abraham Lopez violated these statutory sections by stealing money, stealing client list and giving them to L.D. Construction, stealing and destroying payroll records, misusing funds, redirecting trucks, allowing L.D. Construction to dump trash using Alexander Demo’s accounts, and misusing property belonging to Alexander Demo and Felipe Davila, as well as taking and destroying documents belonging to Alexander Demo and Felipe Davila in order to hide these actions. (Opp’n, pp. 8-9.)

In reply, Abraham Lopez argues that no breach of fiduciary duty claim exists against Abraham Lopez because he is not alleged as an employee capable of having a fiduciary duty to Alexander Demo, and that the opposition arguments offer nothing to remedy this shortcoming because the Labor Code sections cited do not offer a private right of action for their violation. (Reply, pp. 2-3.)

The elements of a claim for breach of fiduciary duty are (1) the existence of a fiduciary duty, (2) breach, and (3) damages proximately caused by the breach. (Stanley v. Richmond (1995) 35 Cal.App.4th 1070, 1086.) As to the first element, the basic fiduciary obligations are twofold: undivided loyalty and confidentiality. (Pierce v. Lyman (1991) 1 Cal.App.4th 1093, 1102, superseded by statute on different issue as stated in Pavicich v. Santucci (2000) 85 Cal.App.4th 382, 396.) A fiduciary or confidential obligation or relationship can arise when confidence is reposed by persons in the integrity of others, and if the latter voluntarily accepts or assumes to accept the confidence, he or she may not act to take advantage of the other’s interest without that person’s knowledge or consent. (Oates v. City of Lincoln (2001) 93 Cal.App.4th 25, 35.) Because of the vagueness of the common law definition of the confidential relation that gives rise to a fiduciary duty, and the range of the relationships that can potentially be characterized as fiduciary, the “essential elements” have been distilled as follows: (1) the vulnerability of one party to the other which (2) results in the empowerment of the stronger party by the weaker which (3) empowerment has been solicited or accepted by the stronger party and (4) prevents the weaker party from effectively protecting itself. (Persson v. Smart Inventions, Inc. (2005) 125 Cal.App.4th 1141, 1161.) Vulnerability, in short, is the necessary predicate of a confidential relation, and the law treats it as essential. (Ibid.)

Here, the Court finds that the first cause of action is not sufficiently pleaded. While the Cross-Complaint could be read to plead Abraham Lopez as an employee capable of owing fiduciary duties to Alexander Demo (see Cross-Complaint, ¶ 61 [pleading Abraham Lopez as a “managing agent”]; contra. Cross-Complaint, ¶ 33 [Abraham Lopez hired “part-time as a payroll clerk”])—something the Court does not conclusively find either way—the opposition to demurrer filed by Alexander Demo and Felipe Davila premises fiduciary duty on Abraham Lopez based on Labor Code sections 2860 and 2863 (Opp’n, p. 8), which, although perhaps stating duties owed to an employee to an employer, do not amount to a private cause of action for breach of fiduciary duty.

Abraham Lopez’s demurrer to the Cross-Complaint’s first cause of action is thus SUSTAINED, With Leave to Amend, as to himself alone.

II. Statute of Limitations

Having sustained the demurrer on other grounds, the statute of limitations arguments directed at the first cause of action are moot. (See Demurrer, pp. 5-7.)

Third Cause of Action, Conversion: OVERRULED.

I. Sufficiency of Pleading

“Conversion is the wrongful exercise of dominion over the property of another … [and its] elements … are: (1) the plaintiff’s ownership or right to possession of the property; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages.” (Lee v. Hanley (2015) 61 Cal.4th 1225, 1240.) However, “the simple failure to pay money owed does not constitute conversion”; “[a] cause of action for conversion of money can be stated only where a defendant interferes with the plaintiff’s possessory interest in a specific, identifiable sum, such as when a trustee or agent misappropriates the money entrusted to him. [Citation.]” (Weiss v. Marcus (1975) 51 Cal.App.3d 590, 599, citing Haigler v. Donnelly (1941) 18 Cal.2d 674, 681.)

The second cause of action in the Cross-Complaint pleads conversion against all Cross-Defendants and, in relevant part, arises from incorporated pleadings and allegations that Abraham Lopez engaged in self-dealing by using his position in Alexander Demo to collect and keep for himself cash payments from Alexander Demo clients and to pay and collect for himself employee wages paid out to fake/false employees. (Complaint, ¶¶ 79-82; see also Complaint, ¶¶ 36, 39-40.) The Cross-Complaint also alleges that Abraham Lopez took documents belonging to Alexander Demo. (Cross-Complaint, ¶ 83; see Cross-Complaint, ¶¶ 37-38 [incorporated allegations], 79 [incorporation].)

In his demurrer, Abraham Lopez argues that the third cause of action is not sufficiently pleaded against him because it does not specify a sum certain converted from Alexander Demo and because it is otherwise not sufficiently pleaded as to the conduct Abraham Lopez engaged in constituting conversion. (Demurrer, pp. 7-8.) The demurrer also argues that the third cause of action cannot be supported by conversion of Alexander Demo company documents because Plaintiff was an employee of the company and thus had authority to take or use company documents, and because the Cross-Complaint insufficiently details which documents were taken and how the documents were wrongfully converted rather than lawfully used by Abraham Lopez as an employee. (Demurrer, pp. 8-9.)

In opposition, Alexander Demo and Felipe Davila do not rebut the specific sum argument advanced in the demurrer. (See Opp’n, p. 9.) Instead, and in relevant part, the opposition argues that the conversion claim is sufficiently supported by pleadings that Abraham Lopez wrongfully converted company documents from Alexander Demo.

In reply, Abraham Lopez reiterates his demurrer arguments. (Reply, p. 5.)

The Court finds that the conversion claim is sufficiently pleaded as to conversion of company documents.

While Abraham Lopez argues that the Cross-Complaint is not sufficiently stated as to what he converted (Demurrer, pp. 8-9; Reply, p. 5), a review of the Cross-Complaint provides the allegations that Abraham Lopez wrongfully took and hid away or destroyed work order documentation belonging to Alexander Demo showing what jobs had been completed for Alexander Demo clients in order to ensure that Alexander Demo would not be apprised of the conversion of monies for these projects. (See Complaint, ¶¶ 37-38 [allegations], 79 [incorporation into third cause of action].) Further, California case law has found that the wrongful taking of company documents can constitute conversion. (Angelica Textile Services, Inc. v. Park (2013) 220 Cal.App.4th 495, 508 [conversion claim for wrongful taking of company documents not displaced where the claim not premised on the existence of a trade secret]; see also Church of Scientology v. Armstrong (1991) 232 Cal.App.3d 1060, 1072-1074 [sufficient evidence supported finding that church worker’s conversion of church documents was justified by his reasonable belief that church intended to cause him harm and that he could prevent the harm only by taking the documents], abrogated on other grounds in In re Marriage of Nicholas (2010) 186 Cal.App.4th 1566, 1578 [relating to sealing of records]; Ananda Church of Self-Realization v. Massachusetts Bay Ins. Co. (2002) 95 Cal.App.4th 1273, 1282 [no conversion of documents that were left in garbage because placement of documents in garbage renounced key incidents of ownership, i.e., title, possession, and control].)

Because the conversion claim is properly supported by its conversion of document ground, a demurrer cannot be sustained to the third cause of action based on any lack of specificity as to the alleged sum certain converted by Abraham Lopez from Alexander Demo. (Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1047 [“A demurrer cannot rightfully be sustained to part of a cause of action or to a particular type of damage or remedy”].)

II. Statute of Limitations

Abraham Lopez further demurs to the Cross-Complaint’s third cause of action as alleged against him on the ground that the claim has run its limitations period. (Demurrer, pp. 9-10.) More specifically, Abraham Lopez argues that conversion has a three-year statute of limitations, that any conversion by way of conspiracy with Omar Lopez and Elias Gonzalo Davila would have occurred as of 2016 when these individuals ceased working for Alexander Demo, and that any individual conversion by Abraham Lopez would have needed to take place on or before January 19, 2018 when Lopez ceased working for Alexander Demo. (Demurrer, p. 9 [citing to Cross-Complaint, ¶¶ 27-29 for dates of employment cited in the demurrer].) Based on these observations, Abraham Lopez argues that that the limitations period ran on joint conversion as of 2019, before this action was filed on August 16, 2019 and well before the filing of the Cross-Complaint on December 5, 2022. (Demurrer, p. 9.) Abraham Lopez then argues that even if the Cross-Complaint relates back to the filing of the Complaint on August 16, 2019, the conversion alleged in the Cross-Complaint can only have related to joint conversion of Alexander Demo property by Abraham Lopez, Omar Lopez, and Elias Gonzalo Davila, which necessarily must have occurred in 2016—i.e., before the latter two Cross-Defendants ceased working for Alexander Demo—placing the conversion claim beyond three years of the filing of the Complaint on August 16, 2019. (Demurrer, pp. 9-10.) Last, Abraham Lopez argues that any recent discovery of the grounds for conversion is not pleaded in the Cross-Complaint and is undercut by the knowledge pleaded in the Cross-Complaint vis-à-vis Alexander Demo and Felipe Davila’s knowledge of the conversion scheme by Abraham Lopez, Omar Lopez, and Elias Gonzalo Davila. (Demurrer, p. 10.)

In opposition, Alexander Demo and Felipe Davila seek harbor in the discovery rule by arguing that either (1) recent discovery responses by Abraham Lopez admitting to part ownership of L.D. Construction triggered the discovery of the alleged grounds for this cause of action or (2) this Court’s November 30, 2022 ruling on their motion for leave to file cross-complaint establishes that the harms alleged in the Cross-Complaint were not, until recently, discovered by Alexander Demo and Felipe Davila. (Opp’n, pp. 5-6.) Alexander Demo and Felipe Davila also argue that the Cross-Complaint’s compulsory and permissive crossclaims relate back to the filing of the original Complaint on August 16, 2019, bringing them within their respective statute of limitations. (See Opp’n, pp. 6-7.)

In reply, Abraham Lopez reiterates his demurrer arguments. (Reply, pp. 5-6.)

The Court first finds that no discovery date is pleaded in the Complaint as to the third cause of action, for which reason the discovery rule does not save or fatally undercut the claim from a demurrer based on a statute of limitations argument. (See Cross-Complaint generally.)

However, the Court finds that the statute of limitations argument raised by Abraham Lopez fails due to the relation back argument raised in Alexander Demo and Felipe Davila’s opposition. “[A] defendant’s cross-complaint against the plaintiff, irrespective of whether it is related to the matters asserted in the complaint [i.e., regardless of whether the claim is compulsory or permissive], is entitled to the benefit of the tolling doctrine,” which takes effect at time of filing of the pending action against which the cross-complaint is directed. (ZF Micro Devices, Inc. v. TAT Capital Partners, Ltd. (2016) 5 Cal.App.5th 69, 92-93; see also generally id. at pp. 87-93 [historical discussion of this rule].) Here, the Complaint was filed by Plaintiff Abraham Lopez on August 16, 2019. For this conversion claim to fail on demurrer based on its statute of limitations, Abraham Lopez must point to pleadings in the Cross-Complaint showing the factual allegations supporting the conversion claim took place more than three years before August 16, 2019. (Code Civ. Proc., § 338, subd. (c)(1) [conversion claim has three-year statute of limitations]; see Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 881 [“It must appear clearly and affirmatively that, upon the face of the complaint, the right of action is necessarily barred”].) Yet, Abraham Lopez’s argument is that any conversion pleaded in the Complaint must have taken place at some point in time in 2016 because the Complaint pleads that the conversion perpetrated by Cross-Defendants was effected in concert with one another. (See Demurrer, pp. 9-10.) The Court finds this argument insufficient to sustain the demurrer for at least three reasons. First, even though the Cross-Complaint alleges Cross-Defendants Omar Lopez and Elias Gonzalo Davila ceased working for Alexander Demo in 2016 (Cross-Complaint, ¶¶ 28-29), the Cross-Complaint is unclear as to whether this occurred before or after August 16, 2016. As such, it cannot be clearly and affirmatively stated that any joint conversion by Cross-Defendants pleaded in the Cross-Complaint is outside the limitations period. Second, Abraham Lopez need not have converted documents or monies belonging to Alexander Demo in concert with Cross-Defendants Omar Lopez and Elias Gonzalo Davila. Indeed, he could have converted Alexander Demo’s personal property through 2018, the year in which the Cross-Complaint alleges Abraham Lopez ceased working for Alexander Demo. (Complaint, ¶ 27.) Third, because the conversions pleaded in the Cross-Complaint against Abraham Lopez could have continued through 2018, even if the Cross-Complaint alleges some wrongful conduct commencing at a time barred by the statute of limitations, the date of the last overt act supporting the tort controls the trigger date for the statute of limitations. (See Wyatt v. Union Mortg. Co. (1979) 24 Cal.3d 773, 786 [holding that the statute of limitations on continuing tort cause of action does not begin to run until commission of last overt act].) With a possible last overt act date of January 2018, and the filing of the original Complaint in this action on August 16, 2019, it cannot be said that the Cross-Complaint shows that the statute of limitations clearly and affirmatively ran on the conversion claim alleged therein against Abraham Lopez.

Abraham Lopez’s demurrer to the Cross-Complaint’s third cause of action is thus OVERRULED.

Fourth Cause of Action, Fraud: SUSTAINED, With Leave to Amend, as to Abraham Lopez Only.

I. Sufficiency of Pleading

“The elements of fraud that will give rise to a tort action for deceit are: “‘(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.’” (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 974; see also Odorizzi v. Bloomfield School Dist. (1966) 246 Cal.App.2d 123, 128; Wilhelm v. Pray, Price, Williams & Russell (1986) 186 Cal.App.3d 1324, 1332.)

Allegations of fraud “must be pled with more detail than other causes of action.” (Apollo Capital Fund, LLC v. Roth Capital Partners, LLC (2007) 158 Cal.App.4th 226, 240.) “Every element of the cause of action for fraud must be alleged … factually and specifically[,] and the policy of liberal construction of the pleadings … will not ordinarily be invoked to sustain a pleading defective in any material respect. [Citations.]” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216, superseded by statute as stated in Branick v. Downey Savings & Loan Assn. (2006) 39 Cal.4th 235, 242.) A plaintiff pleading fraud must plead facts showing “how, when, where, to whom, and by what means” the allegedly fraudulent representations were tendered. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

The Cross-Complaint’s fourth cause of action alleges Fraud against all Cross-Defendants by incorporating pleadings and alleging that Elias Gonzalo Davila, Omar Lopez, and Abraham Lopez engaged in false representations, concealments, and nondisclosures related to monies taken from Alexander Demo, the misuse of the Alexander Demo client list—used by Cross-Defendants to divert business from Alexander Demo to Cross-Defendant L.D. Construction, owned by the Lopez Brothers and Elias Gonzalo Davila—and the concealment, alternation, and taking of documents from Alexander Demo. (Cross-Complaint, ¶¶ 86-87.) The Cross-Complaint further alleges reliance on the representations of these Cross-Defendants without much more elaboration, and damages exceeding $1 million. (Cross-Complaint, ¶¶ 93-94.)

In his demurrer, Abraham Lopez argus that the Cross-Complaint fails to plead fraud according to the heightened pleading standard because the pleadings allege only that a group of people made various misrepresentations at various times with no specificity as to when specific misrepresentations were made and by whom, where they were made, or to whom they were made, instead conflating entire categories of misrepresentations. (Demurrer, p. 11.)

In opposition, Alexander Demo and Felipe Davila point to paragraphs 36 to 40 of the Cross-Complaint for the how and by what means, paragraphs four, 27, and 32 to 33 for the when and where, and paragraphs 35 and 55 for the to whom. (Opp’n, pp. 9-10.)

In reply, Abraham Lopez reiterates his heightened pleading standard argument. (Reply, pp. 6-7.)

 The Court finds that the fourth cause of action pleads concealment but with insufficient detail.

“[T]he elements of an action for fraud and deceit based on a concealment are: (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.” (Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248; see also Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 665-666.)

The Cross-Complaint alleges: (1) concealments of conversion of documents and monies belonging to Alexander Demo by Abraham Lopez (Cross-Complaint, ¶¶ 36-40 [incorporated pleadings], 86-90 [incorporation and cause of action]); (2) an inferable duty to disclose based on an employer-employee relationship (Cross-Complaint, ¶¶ 27, 86, 90); (3) intentional suppression of conversion with the intent to defraud inferable from the monetary gain received by Abraham Lopez (see Cross-Complaint, ¶¶ 36-40, 86-90); and (5) damages exceeding $1 million as a result (Cross-Complaint, ¶¶ 92, 94). However, the Cross-Complaint does not adequately plead (4) lack of awareness by Alexander Demo and Felipe Davila coupled with a position that these Cross-Complainants would have otherwise acted if they had known about the conversions. (See Cross-Complaint, ¶ 94 [pleading reliance characterizing intentional misrepresentation fraud claims but not lack of knowledge coupled with allegations that they would have otherwise acted had they had knowledge of the conversions and other wrongful acts].)

Abraham Lopez’s demurrer to the Cross-Complaint’s fourth cause of action is thus SUSTAINED, With Leave to Amend, as to himself alone.

II. Statute of Limitations

Having sustained the demurrer on other grounds, the statute of limitations arguments directed at the fourth cause of action are moot. (See Demurrer, pp. 11-12.)

Fifth Cause of Action, IIED: OVERRULED.

I. Sufficiency of Pleading

“A cause of action for intentional infliction of emotional distress exists when there is ‘(1) extreme and outrageous conduct by the defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress; (2) the plaintiff’s suffering severe or extreme emotional distress; and (3) actual and proximate causation of the emotional distress by the defendant’s outrageous conduct.’ A defendant’s conduct is ‘outrageous’ when it is so ‘extreme as to exceed all bounds of that usually tolerated in a civilized community.’ And the defendant’s conduct must be ‘intended to inflict injury or engaged in with the realization that injury will result.’” (Hughes v. Pair (2009) 46 Cal.4th 1035, 1050-1051].)

The fifth cause of action alleges IIED to Felipe Davila by all Cross-Defendants based on incorporated pleadings and allegations that Cross-Defendants Elias Gonzalo Davila, Omar Lopez, and Abraham Lopez acted intentionally or recklessly, extorting Felipe Davila, causing Felipe Davila to lose his home, and almost causing Alexander Demo to go bankrupt, and that these Cross-Defendants further concealed documents necessary for Alexander Demo and Felipe Davila’s defense and prosecution of this case, actions which caused Felipe Davila severe emotional distress. (Cross-Complaint, ¶¶ 95-101.)

In his demurrer, Abraham Lopez argues that the IIED is not sufficiently pleaded against him because the Cross-Complaint merely alleges conclusory allegations of severe or extreme emotional distress and because the Cross-Complaint fails to allege what Abraham Lopez did—as opposed to Omar Lopez and Elias Gonzalo Davila—to cause such distress, how Abraham Lopez’s actions in fact caused emotional distress, or the symptoms underlying the claims of emotional distress. (Demurrer, p. 13.)

In opposition, Alexander Demo and Felipe Davila argue that the grounds for IIED are properly pleaded at paragraphs 96 to 97, 99, and 101 of the Cross-Complaint. (Opp’n, pp. 10-11.)

In reply, Abraham Lopez reiterates his arguments related to conclusions of law and fact and failure to plead conduct specifically attributable to Abraham Lopez or the symptoms underlying the claims of emotional distress. (Reply, p. 8.)

The Court finds that the Cross-Complaint sufficiently alleges IIED based on extortion. Paragraphs 55, 56, and 99 allege that in or about 2018, Elias Gonzalo Davila, Omar Lopez, and Abraham Lopez extorted $40,000 from Felipe Davila, which were paid by Felipe Davila, and that Omar Lopez and Abraham Lopez further attempted to extort an additional $150,000 from Felipe Davila, which Felipe Davila did not pay, prompting Abraham Lopez to file this action. (Cross-Complaint, ¶¶ 55-56 [incorporated pleadings], 95, 99 [incorporation and cause of action].)

Because the IIED claim survives on allegations of extortion, the Court cannot sustain the demurrer based on any alleged insufficiency of the remaining allegations supporting this cause of action. (Kong v. City of Hawaiian Gardens Redevelopment Agency, supra, 108 Cal.App.4th at p. 1047 [“A demurrer cannot rightfully be sustained to part of a cause of action or to a particular type of damage or remedy”].)

II. Statute of Limitations

In his demurrer, Abraham Lopez further argues that the fifth cause of action fails because it is subject to a two-year statute of limitations, which expired sometime in 2018, well before this action was filed in August 2019, and before the Cross-Complaint was filed in December 2022, thus defeating any relation back argument. (Demurrer, pp. 13-15.) Abraham Lopez also argues that the discovery rule fails to save the fifth cause of action because no discovery date is pleaded as to this claim and because the Cross-Complaint pleads knowledge of the scheme by Abraham Lopez, Omar Lopez, and Elias Gonzalo Davila. (Demurrer, p. 15.)

In opposition, Alexander Demo and Felipe Davila seek harbor in the discovery rule by arguing that either (1) recent discovery responses by Abraham Lopez admitting to part ownership of L.D. Construction triggered the discovery of the alleged grounds for this cause of action or (2) this Court’s November 30, 2022 ruling on their motion for leave to file cross-complaint establishes that the harms alleged in the Cross-Complaint were not, until recently, discovered by Alexander Demo and Felipe Davila. (Opp’n, pp. 5-6.) Alexander Demo and Felipe Davila also argue that the Cross-Complaint’s compulsory and permissive crossclaims relate back to the filing of the original Complaint on August 16, 2019, bringing them within their respective statute of limitations. (See Opp’n, pp. 6-7.)

In reply, Abraham Lopez reiterates his demurrer arguments. (Reply, pp. 8-9.)

The Court first finds that a discovery date for extortion is pleaded in the Complaint: 2018. (See Complaint, ¶ 55 [extortion of $40,000 by Cross-Defendants Elias Gonzalo Davila, Omar Lopez, and Abraham Lopez in or about 2018].)

The Court further adopts its discussion as to the statute of limitations vis-à-vis the third cause of action pleaded in the Cross-Complaint to determine that the IIED claim relates back to the August 16, 2019 Complaint. (See Third Cause of Action, § II. discussion supra.)

Based on these two conclusions, it can hardly be said that any two-year statute of limitations on the IIED claim (see Code Civ. Proc., § 335.1 [limitation for personal injury claims]) expired prior to the filing of this action on August 16, 2019 because the alleged extortion occurred in 2018, necessarily within two years of the filing of Abraham Lopez’s original Complaint. (See Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort, supra, 91 Cal.App.4th at p. 881 [“It must appear clearly and affirmatively that, upon the face of the complaint, the right of action is necessarily barred”].)

Abraham Lopez’s demurrer to the Cross-Complaint’s fifth cause of action is thus OVERRULED.

Conclusion

Plaintiff and Cross-Defendant Abraham Lopez’s Demurrer to Cross-Complaint is OVERRULED in Part and SUSTAINED in Part as follows:

(1) OVERRULED as to the demurrer’s uncertainty in pleading challenge to the entire Cross-Complaint;

(2) OVERRULED as to the demurrer’s sufficiency of pleading challenge to the Cross-Complaint’s third and fifth causes of action; and

(3) SUSTAINED, With Leave to Amend, as to the demurrer’s sufficiency of pleading challenge to the Cross-Complaint’s first and fourth causes of action, insofar as these claims are directed at Abraham Lopez alone.

Alexander Demo and Felipe Davila are given 14 DAYS LEAVE TO AMEND their Cross-Complaint in conformity with this order.