Judge: Armen Tamzarian, Case: 24STCV31629, Date: 2025-03-21 Tentative Ruling

Case Number: 24STCV31629    Hearing Date: March 21, 2025    Dept: 52

Defendants William H. Lu and Profuse Solutions, Inc. demur to plaintiff PSI Premier Holdings LLC’s entire complaint for uncertainty and generally demur to the sixth, seventh, and eighth causes of action.

Uncertainty

A demurrer for uncertainty is sustained when the pleading fails to sufficiently apprise defendants of the claims against them.  (A.J. Fistes Corp. v. GDL Best Contractors, Inc. (2019) 38 Cal.App.5th 677, 695.)  “Demurrers for uncertainty are disfavored, and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.”  (Ibid, internal quotes omitted.)

Defendants argue, “Plaintiff does not describe the identity of the third party, the specific relationship between Plaintiff and the third party, or how Moving Defendants allegedly disrupted that relationship. . . .This lack of specificity prejudices Moving Defendants by preventing them from adequately understanding the claim and preparing a defense.” (Demurrer, pp. 6-7).  Plaintiff alleges ultimate facts regarding these matters with sufficient clarity for defendants to respond.  (See Complaint, ¶¶ 68-70).

Defendants repeatedly argue that a “lack of specificity” makes the claims uncertain.  (Demurrer p. 8:6-7, see also Id. page. 9:27-28, Id. page. 6:20-21.)  But lack of specificity is not the test.  Uncertainty is about whether a defendant can reasonably respond to a pleading.  (A.J. Fistes Corp., supra, 38 Cal.App.5th 677, at 695.)  Plaintiff’s complaint is not uncertain.

General demurrer

Seventh Cause of Action: Inducing Breach of Contract

The elements of inducing breach of contract are: (1) a valid and existing contract with a third party; (2) defendant knew of the contract and intended to induce its breach; (3) breach by the contracting party; (4) the breach was caused by defendant’s unjustified or wrongful conduct; and (5) damages.  (Little v. Amber Hotel Company (2011) 202 Cal.App.4th 280, 291.)

Plaintiff alleges sufficient ultimate facts on each element.  First, plaintiff alleges that the Offer Letter and Employment Agreement were valid contracts between itself and Guymon.  (Complaint ¶ 76.)

Second, plaintiff alleges that defendants knew about these agreements, and that they intended to induce Guymon’s breach.  (Id. at ¶ 77-78.) 

Third, plaintiff alleges that Guymon breached the Offer Letter and Employment Agreement when he diverted the Amazon Deal to defendants and concealed this transaction from plaintiff.  (Id. at ¶ 79.)  Guymon had a contract with plaintiff that prevented him from diverting business to other companies.  (Id. at 23.)  This allegation clearly indicates a breach.

Fourth, plaintiff alleges that Guymon’s breach was caused by defendants’ unjustified and wrongful conduct because defendants offered to pay and did pay Guymon to induce him to breach his contracts with plaintiff.  (Id. at ¶ 78.) 

Finally, plaintiff alleges that it suffered a minimum of $3,500,000 in damages because of Defendants’ wrongful conduct and Guymon’s breach.  (Id. at ¶ 81.) 

Defendants argue these allegations are insufficient because “fraud must be pled with specificity.”  (Demurrer, p. 6:12-13.)  This is not a fraud cause of action.

Defendants argue that plaintiff failed to allege “independently wrongful” conduct.  There is no such requirement for this cause of action.  (See Little v. Amber Hotel Company (2011) 202 Cal.App.4th 280, 291, fn. 7.) 

Eighth Cause of Action: Unfair Business Practices under Bus. & Prof. Code §17200

To support a private action under the UCL, a plaintiff must: (1) establish an economic injury; and (2) show that that economic injury was caused by unfair business practice or false advertising. . .”  (Moran v. Prime Healthcare Management, Inc. (2016) 3 Cal.App.5th 1131, 1143.)  To establish an “unfair business practice,” a plaintiff must allege one of three things: (1) an unlawful business act, (2) an unfair business act, or (3) deceptive or misleading advertisement.  (Bus. & Prof. Code, § 17200.)  A business practice need only meet one of the three criteria to be considered unfair competition.  (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1471.)

Plaintiff alleges sufficient facts for this cause of action.  Plaintiff alleges an economic injury of at least $3.5 million.  (Complaint ¶ 23.)  This number comes from the amount defendants paid Guymon for facilitating the Amazon Deal.

For causes of action under the “unlawful” prong, the UCL “‘borrows’ violations from other laws by making them independently actionable as unfair competitive practices.”  (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1143 (Korea Supply).)  A “common law ‘wrong’ . . . constitute[s] a statutory ‘unlawful’ business practice.  (CRST Van Expedited, Inc. v. Werner Enterprises, Inc. (9th Cir. 2007) 479 F.3d 1099, 1107 (CRST).)  As discussed above, plaintiff has alleged defendants intentional interfered with plaintiff’s contractual relations.  This is sufficient to state an UCL claim.  (Ibid. [“We conclude that CRST adequately alleged that Werner violated the UCL because CRST adequately alleged that Werner engaged in an “unlawful” business act or practice that allegedly harmed CRST, namely, intentional interference with CRST's employment contracts”].)

Sixth Cause of Action: Intentional Interference with Prospective Economic Relations

To state a cause of action for intentional interference with prospective economic relations, a plaintiff must allege: (1) the existence, between the plaintiff and some third party, of an economic relationship that contains the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentionally wrongful acts designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm proximately caused by the defendant’s action.” (Roy Allen Slurry Seal, Inc. v. American Asphalt South, Inc. (2017) 2 Cal.5th 505, 512.)

Plaintiff alleges ultimate facts to satisfy each element.  First, plaintiff alleges that, Guymon, a third party, worked for plaintiff as a Sales Executive and Vice President of Sales.  (Complaint ¶ 68.)  This kind of relationship may contain the probability of future economic benefit to plaintiff.  (Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1152.)

Second, plaintiff alleged that defendants knew Guymon was plaintiff’s employee.  (Complaint, ¶ 69.)  

Third, plaintiff alleges that defendants engaged in intentionally wrongful acts to disrupt the relationship by paying Guymon to divert Plaintiff’s business.  (Complaint, ¶ 71.)  Defendants argue that plaintiff does not sufficiently allege the intent aspect of this claim.  (Demurrer ¶ 6:4-6.)  “To satisfy the intent requirement for this tort, it is sufficient to plead that the defendant knew that the interference was certain or substantially certain to occur as a result of its action.”  (Korea Supply, 29 Cal.4th 1134 at p. 1153.)  Intent and knowledge are ultimate facts.  Plaintiff need not allege evidentiary facts showing intent or knowledge. 

Fourth, plaintiff alleges that defendants’ actions disrupted its relationship with Guymon for two reasons.  First, their deal with Guymon caused him to divert business like the Amazon Deal away from plaintiff.  (Id. at 70.)  Second, after learning about the deal, plaintiff fired Guymon  (Id. at ¶ 72.)

Finally, Plaintiff alleges that it was economically harmed by defendants’ actions. Plaintiff alleges that defendants’ interference in a deal between Plaintiff and Amazon caused Plaintiff to incur no less than $3,500,000 in damages, as they could have been the one to broker that deal.  (Id. at ¶ 73.)

Plaintiff argues that defendants’ conduct was not independently wrongful.  To establish a claim for interference with prospective economic advantage, a plaintiff must plead that the defendant’s conduct was wrongful “ ‘by some measure beyond the fact of the interference itself.’ ”  (Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 393.)  This case is analogous to CRST.  There, the United States Court of Appeals for the Ninth Circuit, interpreting California law, held that this requirement is satisfied where, as here, the plaintiff alleges the defendant induced a breach of contract.  (CRST, supra, 479 F.3d at p. 1108-1109.)  The court finds CRST persuasive.

Disposition

The demurrer of defendants William H. Lu and Profuse Solutions, Inc. is overruled.  These defendants shall file answers within 14 days.