Judge: Anne Richardson, Case: 24STCV09515, Date: 2024-11-07 Tentative Ruling

Case Number: 24STCV09515    Hearing Date: November 7, 2024    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

I. Background

A. Pleadings

Plaintiffs Sonya Dove, Inc. and Sonya Dove (collectively, Dove) sue Defendants Juno and Taylor APC, James E. Junio, Kurtus Altergott, and Does 1 through 10 (collectively, Defendants) pursuant to an April 16, 2024, Complaint alleging causes of action for: (1) Professional Negligence; (2) Fraud; (3) Breach of Contract; and (4) Breach of Fiduciary Duty.

The claims arise out of a dispute between the parties regarding Defendants’ preparation and submission of Dove’s tax returns.  Dove hired the Defendants to prepare personal and business tax returns for 2019 through 2022. In late 2023, Dove discovered a $22,000 penalty associated with Dove’s business tax return caused by Defendants alleged failure to file proper tax filings. In December 2021, Dove sold real property belonging to her in her individual capacity. Between December 2021 and January 2022, Dove inquired with Defendants about the capital gains taxes that the sale triggered and requested that such capital gains taxes be timely paid by the January 15, 2022, deadline. Dove alleges that the capital gains taxes were not paid by the deadline and as a result she was subject to $17,238.00 in federal penalties and $10,718.00 in state penalties.

B. Motion Before the Court

On June 24, 2024, Defendants demurred to the Complaint. That same day, Defendants also filed a motion to strike portions of the Complaint.

On October 22, 2024, Dove filed oppositions to both the demurrer and motion to strike.

On October 31, 2024, Defendants filed replies to both oppositions.

The Defendants’ demurrer and motion to strike are now before the Court. 

II. Demurrer

A. Meet and Confer

The Defendants have satisfied the meet and confer requirement pursuant to Code of Civil Procedure section 430.41 subdivision (a)(3)(A). (Pearse Decl. ¶ 2.) 

B. 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; see Code Civ. Proc., § 430.10, subd. (e).) 

To sufficiently allege a cause of action, a complaint must allege all the ultimate facts—that is, the facts needed to establish each element of the cause of action pleaded. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 212, superseded by statute as stated in Branick v. Downey Savings & Loan Assn. (2006) 39 Cal.4th 235, 242.) “[E]ach 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, 966-67.) 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.) 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.)  

A demurrer for uncertainty 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, disapproved on other grounds in Quelimane Co. v. Stewart Title Guar. Co. (1998) 19 Cal.4th 26, 46 [holding claims for unfair business practices need not be pled specifically, impliedly disapproving Khoury].) 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, disapproved on other grounds in Jefferson v. J.E. French Co. (1960) 54 Cal.2d 717, 719-720 [statute of limitations question].) 

Where a complaint is sufficient to state a cause of action and to apprise a defendant of issues he is to meet, 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”].) 

C. Analysis

The Defendants demur to all four causes of action in the Complaint, although only the fourth cause of action for breach of fiduciary duty and the second cause of action for fraud are discussed in any detail. Defendants also demur on the ground that the individually named employees should be dismissed as they are not proper parties to the contract or tort claims.

As an initial matter, upon review of the Complaint, the first, third and fourth causes of action are brought pursuant to Corporations Code sections 5231 and 5237 which govern non-profit public benefit corporations and their directors and managers, not for-profit corporations. (See Corp. Code §§ 5231, 5237.) Yet the Complaint states that Defendant Junio & Taylor, APC is a certified public accounting firm and Defendants James E. Junio and Kurtus Altergott are both employees of the accounting firm. (Compl., ¶¶ 6-8.) Thus, Corporations Code sections 5231 and 5237 are inapplicable to the causes of action and parties in this action. As fiduciary duties only arise in certain technical, legal relationships, there is no other fiduciary relationship or statute as alleged here that gives rise to a fiduciary duty by these Accountant defendants. (Oakland Raiders v. National Football League (2005) 131 Cal.App.4th 621, 632-634.) Accordingly, the demurrer is sustained as to the first, third, and fourth causes of action.

As to the second cause of action for fraud, Defendants contend that it is not plead with specificity and there is no additional damage alleged other than the same damage that was suffered for the professional negligence claim. (Mot., pp. 9-11.) They contend that the complaint is “an overpled and exaggerated attempt to improperly expand an alleged negligence claim.” (Reply at p. 1.)

While a party may seek alternate forms of relief, the Court agrees that the second cause of action for fraud does not sufficiently “show how, when, where, to whom, and by what means the representations were tendered.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645 [citations omitted].)

For the foregoing reasons, the Complaint does not sufficiently state a cause of action for the first, second, third and fourth cause of action.

Thus, the demurrer is SUSTAINED, with leave to amend.

III. Motion to Strike

A.    Legal Standard

The court may, upon a motion or at any time in its discretion and upon terms it deems proper: (a) strike out any irrelevant, false, or improper matter inserted in any pleading; or (b) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (Code Civ. Proc. § 436, subds. (a), (b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [“Matter in a pleading which is not essential to the claim is surplusage; probative facts are surplusage and may be stricken out or disregarded”].) 

For the purposes of a motion to strike pursuant to Sections 435 to 437 of the Code of Civil Procedure, the term “pleading” generally means a demurrer, answer, complaint, or cross-complaint, (Code Civ. Proc., § 435, subd. (a)), and an immaterial allegation or irrelevant matter in a pleading entails (1) an allegation that is not essential to the statement of a claim or defense, (2) an allegation that is neither pertinent to nor supported by an otherwise sufficient claim or defense, or (3) a demand for judgment requesting relief not supported by the allegations of the complaint or cross-complaint (Code Civ. Proc., § 431.10, subds. (b)(1)-(3), (c)). 

In analyzing a motion to strike, California courts “accept as true the well-pleaded allegations” in the challenged pleadings, as well as “well-pleaded allegations admitted in” the responsive “answer.” (Atwell Island Water Dist. v. Atwell Island Water District (2020) 45 Cal.App.5th 624, 628 (Atwell); Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255 [California courts “read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth”].) 

B.    Analysis

Here, because the demurrer has been sustained in its entirety, the motion to strike is MOOT.

IV. Conclusion

Defendant’s Demurrer is SUSTAINED, with leave to amend within 14 days.

Defendant’s Motion to Strike is denied as MOOT.