Judge: Ashfaq G. Chowdhury, Case: 24GDCV00091, Date: 2024-05-03 Tentative Ruling
Case Number: 24GDCV00091 Hearing Date: May 3, 2024 Dept: E
Case
No: 24GDCV00091
Hearing Date: 05/03/2024 – 8:30am
Trial Date: UNSET
Case Name: CALIFORNIA BALCONY, INC., a California
corporation; v. DIALOG GROUP, INC., a California corporation; NORAYR GALOYAN,
an individual; and DOES 1-10 inclusive
[TENTATIVE RULING
DEMURRER AND MOTION TO STRIKE]
RELIEF REQUESTED
Defendants, Dialog Group, Inc. and Norayr Galoyan demur to the verified
Complaint and each cause of action pursuant to CCP § 430.10(e) & (f) on the
grounds that each alleged cause of action fails to state a cause of action and
is uncertain.
In
addition to demurring to each cause of action based on uncertainty and failure
to state sufficient facts, Defendants demur to each cause of action because
Defendants argue that each cause of action is premised on an illegal contract
which is void as a matter of law.
BACKGROUND
Plaintiff, California
Balcony, Inc., filed the instant action on 1/19/2024.
Plaintiff’s
Complaint alleges four causes of action.
The
first cause of action for breach of contract is alleged only against Dialog.
The
second cause of action (Unjust Enrichment – Contract Implied in Law), the third
cause of action (Intentional Misrepresentation), and the fourth cause of action
(Negligent Misrepresentation) are alleged against both Defendants Dialog and
Norayr.
Plaintiff
alleges that the instant dispute arises from Defendants refusal to pay certain
fees pursuant to the parties’ written agreement. (Compl. ¶1.) Plaintiff alleges
it was organized in 2022 and provides referrals to contractors for construction
and repair work required pursuant to California Civil Code §5551, SB721, and
SB326. (Compl. ¶2.) Plaintiff alleges it entered into a Referral Agreement with
Dialog whereby Plaintiff agreed to provide referrals and Dialog agreed to
provide copies of all contracts entered into with Customers referred by
Plaintiff to Dialog. (Compl. ¶3.)
Plaintiff alleges Dialog received referrals from Plaintiff and entered
into contracts and performed work for such individuals as a result of the
referrals but has failed to provide copies of such contracts or pay the
commission/referral fee pursuant to the terms of the Referral Agreement.
(Compl. ¶4.)
PROCEDURAL ANALYSIS
Moving Party:
Defendants, Dialog Group, Inc. and Norayr Galoyan
Responding Party: Plaintiff,
California Balcony, Inc.
Moving Papers: Notice/Demurrer
Opposition Papers: Opposition
Reply Papers: No Reply.
Reply due 4/26/2024.
Proof of
Service Timely Filed (CRC Rule 3.1300):Ok
16/21 Court Days Lapsed (CCP 1005(b)): Ok
Proper Address (CCP §1013, §1013a, §1013b): Ok
Meet and Confer
A party filing a
demurrer “shall meet and confer in person or by telephone with the party who
filed the pleading that is subject to demurrer for the purpose of determining
whether an agreement can be reached that would resolve the objections to be
raised in the demurrer.” (Code Civ.
Proc., §430.41, subd. (a).) “The parties
shall meet and confer at least five days before the date the responsive
pleading is due. If the parties are not able to meet and confer at least five
days prior to the date the responsive pleading is due, the demurring party
shall be granted an automatic 30-day extension of time within which to file a
responsive pleading, by filing and serving, on or before the date on which a
demurrer would be due, a declaration stating under penalty of perjury that a
good faith attempt to meet and confer was made and explaining the reasons why
the parties could not meet and confer.”
(Code Civ. Proc., §430.41, subd. (a)(2).)
Failure
to sufficiently meet and confer is not grounds to overrule or sustain a
demurrer. (Code Civ. Proc., § 430.41(a)(4).)
Here,
Defendants’ counsel, Keropian, alleges that a meet and confer occurred. (See
Keropian Decl. ¶2.)
LEGAL STANDARDS FOR DEMURRERS
Demurrer
– Sufficiency
A demurrer for
sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda, (2007) 147 Cal.App.4th
740, 747.) 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.) The court “treat[s]
the demurrer as admitting all material facts properly pleaded, but not
contentions, deductions or conclusions of fact or law ….” (Berkley v. Dowds (2007) 152
Cal.App.4th 518, 525.) In a demurrer
proceeding, the defects must be apparent on the face of the pleading or via
proper judicial notice. (Donabedian
v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) A demurrer tests the pleadings alone and
not the evidence or other extrinsic matters; therefore, it lies only where the
defects appear on the face of the pleading or are judicially noticed. (Code Civ. Proc., §§ 430.30, 430.70.) The only issue involved in a demurrer hearing
is whether the complaint, as it stands, unconnected with extraneous matters,
states a cause of action. (Hahn, supra, 147 Cal.App.4th at
747.)
The
general rule is that the plaintiff need only allege ultimate facts, not
evidentiary facts. (Doe v. City of
Los Angeles (2007) 42 Cal.4th 531, 550.)
“All that is required of a plaintiff, as a matter of pleading … is that
his complaint set forth the essential facts of the case with reasonable
precision and with sufficient particularity to acquaint the defendant with the
nature, source and extent of his cause of action.” (Rannard v. Lockheed Aircraft Corp.
(1945) 26 Cal.2d 149, 156-157.)
On
demurrer, a trial court has an independent duty to “determine whether or not
the … complaint alleges facts sufficient to state a cause of action under any
legal theory.” (Das v. Bank of
America, N.A. (2010) 186 Cal.App.4th 727, 734.) Demurrers do not lie as to only parts of
causes of action, where some valid claim is alleged but “must dispose of an
entire cause of action to be sustained.”
(Poizner v. Fremont General Corp. (2007) 148 Cal.App.4th 97,
119.) “Generally
it is an abuse of discretion to sustain a demurrer without leave to amend if
there is any reasonable possibility that the defect can be cured by
amendment.” (Goodman v. Kennedy
(1976) 18 Cal.3d 335, 349.)
Demurrer – Uncertainty
A special demurrer for
uncertainty, CCP § 430.10(f), is disfavored and will only be sustained where
the pleading is so bad that defendant cannot reasonably respond—i.e., cannot
reasonably determine what issues must be admitted or denied, or
what counts or claims are directed against him/her. (Khoury
v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.)
Moreover, even if the pleading is somewhat vague, “ambiguities can be clarified
under modern discovery procedures.” (Ibid.)
ANALYSIS
Illegal/Void
Contract
Defendants argue that each
cause of action in the Complaint is subject to general demurrer because the
Complaint is premised on an illegal contract.
Defendants
cite to a portion of Business and Professions (B&P) Code § 7031(a) and
Civil Code § 5551(e)-(g)(1). Defendants argue as follows:
The contract (attached to the complaint as
exhibit “A”) is void rendering the entire complaint defective, because the
contract attached to the complaint expressly provides that plaintiff is not
merely engaging in business as a referral company, but that it is in the
business of conducting inspections of balconies to confirm that it had some
construction defect or required repair/construction to bring it up to
standards. This determination involves construction knowledge, analysis, and a
conclusion, of a licensed contractor, engineer or architect under the statute
that sanctions and requires the inspections. California Balcony, Inc., however,
is not a licensed contractor, engineer or architect and it does not allege that
it is. It cannot truthfully allege that it is licensed as a contractor,
engineer or architect, because the public records reflect that it was never
licensed. This condition is so expressly interwoven into the terms of the
contract and so material to the contract that it cannot be severed from the
contract. The condition so completely taints the contract with illegality that
the entire contract is void. The illegal contract, Exhibit “A,” is incorporated
into each alleged cause of action rendering them subject to general demurrer,
which, here, should be sustained without leave to amend.
(Dem. p.8.)
As
stated in B&P § 7031(a):
Except as provided in subdivision (e), no person
engaged in the business or acting in the capacity of a contractor, may bring or
maintain any action, or recover in law or equity in any action, in any court of
this state for the collection of compensation for the performance of any act or
contract where a license is required by this chapter
without alleging that they were a duly licensed contractor at all times during
the performance of that act or contract regardless of the merits of the cause
of action brought by the person, except that this prohibition shall not apply
to contractors who are each individually licensed under this chapter but who
fail to comply with Section 7029.
(B&P §7031(a).)
Defendants
seem to be arguing that since Plaintiff did not allege it was a licensed
contractor, engineer, or architect, and since Plaintiff is not a licensed
contractor, engineer, or architect, Plaintiff is barred from bringing a cause
of action under B&P § 7031(a). Defendants seem to be arguing that Plaintiff
is considered a general contractor under § 7031(a) based on the Recitals in the
alleged Referral Agreement (contract that this Complaint is based on) on page 1
which states:
WHEREAS, the Company is in the business of providing
inspection and other services for properties requiring compliance with
California Civil Code Section 5551, California SB721, and California SB326,
hereinafter referred to as “the Balcony Law” for which the Company’s customers
or projects from time to time require the services of a licensed contractor to
perform remediation services; and
(Compl., Ex. A., p.1.)
Defendants’
arguments are unavailing for several reasons.
First,
although Defendants argue that Plaintiff did not allege it was a licensed
contractor and that Plaintiff is not a licensed contractor under the B&P
Code, Defendants not only fail to cite a single section of the B&P Code
that defines what is considered a “contractor”, Defendants also fail to explain
how Plaintiff meets the definition of “contractor” as defined under the B&P
Code.
Further,
§ 7031(a) also mentions how it applies to instances “…where a license is
required by this chapter….” Defendants make no attempt to explain when a
license is required under the B&P Code.
Instead
of attempting to explain how Plaintiff is a “contractor” under the B&P
Code, Defendants instead seem to be relying on the plain language of the
Recitals cited above that state “providing inspection and other services for
properties requiring compliance with California Civil Code Section 5551,
California SB721, and California SB326…”
This
argument is unavailing for two reasons. One, it isn’t rooted in any legal
authority that Plaintiff is considered a “contractor” based on the language in
the Recitals because Defendants make no legal argument as to how Plaintiff is a
“contractor” under the B&P code. Second, Defendants’ interpretation of the
contract attached as Exhibit A relies on a strained reading of a minor portion
of the Recitals and fails to take into consideration several other portions of
the contract.
For
example, the first sentence of the contract in Exhibit A on page one states,
“This Referral Agreement (the “Agreement”) is entered into as of July 1, 2022
(the “Effective Date”) by and between Dialog Group, Inc., a California
Professional Corporation (the “Contractor”), and California Balcony.Inc, a
California corporation (the “Company” and together with the Contractor, the
“Parties”).”
As
can be seen in the contract, Defendant Dialog is defined as the Contractor, not
the Plaintiff. The Plaintiff is defined as the Company.
Further,
the second paragraph in the Recitals on page 1 states, “WHEREAS,
Contractor is a licensed contractor qualified to provide the remediation and
other services desired by Company’s customers; and…”
Further,
¶2 of the contract on page 2 states, “RESPONSIBILITIES OF THE COMPANY.
The Company’s only role shall be referring Customers to the Contractor. The
Company shall have no other obligations to the Contractor.”
Therefore,
even using Defendants’ faulty reasoning – wherein Defendants try to argue that
Plaintiff is a contractor based on the plain language of the contract as
opposed to rooting their argument in law based on the B&P – Plaintiff does
not appear to be a contractor based on the contract attached to the Complaint.
Further,
Defendants argue:
Civil Code §5551 requires that the inspections cannot be conducted
by a layperson. Any visual inspection requires that the inspector have
construction knowledge to determine if conditions exist that pose a threat to
the structural integrity of the balcony and load bearing components of the
building.
(Dem. p.7.)
Defendants
then cite to Civil Code § 5551(e)-(g)(1):
(e)Based upon the inspector’s visual
inspections, further inspection, and construction and materials expertise, the
inspector shall issue a written report containing the following information:
(1) The identification of the building
components comprising the load-bearing components and associated waterproofing
system.
(2) The current physical condition of the
load-bearing components and associated waterproofing system, including whether
the condition presents an immediate threat to the health and safety of the
residents.
(3) The expected future performance and
remaining useful life of the load-bearing components and associated
waterproofing system.
(4) Recommendations for any necessary
repair or replacement of the load-bearing components and associated
waterproofing system.
(f) The report issued pursuant to
subdivision (e) shall be stamped or signed by the inspector, presented to the
board, and incorporated into the study required by Section 5550.
(g) (1) If, after inspection of any
exterior elevated element, the inspector advises that the exterior elevated
element poses an immediate threat to the safety of the occupants, the inspector
shall provide a copy of the inspection report to the association immediately
upon completion of the report, and to the local code enforcement agency within
15 days of completion of the report.
(Civil
Code § 5551(e)-(g)(1).
Defendants
arguments as to Civil Code § 5551 is unavailing for several reasons.
First,
B&P Code § 7031(a) pertains to “…where a license is required by this
chapter…”
Not
only is Civil Code § 5551 not in the same chapter as B&P § 7031, Civil
Code § 5551 is part of a completely different Code than B&P § 7031 – the
Civil Code is a completely different code than the Business and Professions
Code.
Second,
nothing in Civil Code § 5551(e)-(g)(1) that Defendants cited states
anything about what must be alleged in a Complaint like B&P § 7031(a).
Tentative Ruling – Illegal/Void Contract
Defendants’ argument
that the demurrer should be sustained based on the Complaint being based on an
illegal/void contract is OVERRULED as previously explained.
Tentative Ruling – First Cause of Action and Second Cause of
Action
The First Cause of
Action for Breach of Contract was alleged only against Defendant Dialog. The
Second Cause of Action for Unjust Enrichment (Contract Implied in Law) was
alleged against both Defendants.
Aside
from the prior arguments that the Court previously addressed with respect to an
illegal/void contract, Defendants make no arguments as to how the first and
second causes of action fail to state facts sufficient, nor do they make
arguments as to how those causes of action are uncertain. Therefore,
Defendants’ demurrer to the first and second causes of action is OVERRULED.
Third Cause of Action – Intentional Misrepresentation
The third cause of action for fraud (intentional misrepresentation) is alleged
against both Defendants (Dialog Group, Inc, a corporation, and Norayr Galoyan,
an individual). Both Defendants demur to the third cause of action.
Legal Standard Fraud Intentional Misrepresentation
“ ‘The elements of
fraud, which gives rise to the 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.’ “ (Small v.
Fritz Companies, Inc. (2003) 30Cal.4th
167, 173 citing Lazar v. Superior Court (1996) 12 Cal.4th 631,
638.)
(1) Misrepresentation
Fraud
must be pleaded with specificity rather than with “‘general and conclusory
allegations.’” (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167,
184.) The specificity requirement means a plaintiff must allege facts showing
how, when, where, to whom, and by what means the representations were made,
and, in the case of a corporate defendant, the plaintiff must allege the names
of the persons who made the representations, their authority to speak on behalf
of the corporation, to whom they spoke, what they said or wrote, and when the
representation was made. (Lazar v. Superior Court (1996)12 Cal.4th 631,
645.)
In
relevant part with respect to what misrepresentations were made, Plaintiff
alleged, “DEFENDANTS represented to CA BALCONY that they desired to enter into
a referral fee agreement for the mutual benefit of the parties, whereby
DEFENDANTS would obtain lucrative construction contracts and CA BALCONY would
receive referral fees.” (Compl. ¶27.)
Here,
Plaintiff did not allege facts showing how, when, where, to whom, and by what
means the representations were made.
Further,
with respect to the corporate defendant, Plaintiffs did not allege the names of
the persons who made the representations, their authority to speak on behalf of
the corporation, to whom they spoke, what they said or wrote, and when the
representation was made.
Tentative Ruling – Third Cause of Action Intentional
Misrepresentation
Defendants’ demurrer to
the third cause of action is SUSTAINED for failure to state facts sufficient to
constitute a cause of action, and leave to amend is GRANTED.
“It
is often said that leave to amend a complaint should be liberally granted,
particularly with respect to a party’s initial complaint.” (City of Torrance v. Southern California Edison Company (2021)
61 Cal.App.5th 1071, 1091.) “The policy favoring amendment is so strong
that it is a rare case in which denial of leave to amend can be justified.” (City
of Torrance v. Southern California Edison Company (2021) 61 Cal.App.5th
1071, 1091 citing Howard v. County of San Diego (2010) 184 Cal.App.4th
1422, 1428.) “If there is any reasonable possibility that plaintiff can state a
good cause of action, it is error and an abuse of discretion to sustain the
demurrer without leave to amend.” (City of Torrance v. Southern California
Edison Company (2021) 61 Cal.App.5th 1071, 1091 citing Campaign for
Quality Education v. State of California (2016) 246 Cal.App.4th 896, 904.)
Fourth Cause of Action -
Negligent Misrepresentation
“The elements of
negligent misrepresentation are well established. A plaintiff must prove the
following in order to recover. ‘Misrepresentation of a past or existing
material fact, without reasonable ground for believing it to be true, and with
intent to induce another’s reliance on the fact misrepresented; ignorance of
the truth and justifiable reliance on the misrepresentation by the party to
whom it was directed; and resulting damage…’” (Hydro-Mill Co., Inc. v.
Hayward, Tilton & Rolapp Ins. Associates, Inc. (2004) 115 Cal.App.4th
1145, 1154.)
“To be actionable, a negligent misrepresentation must
ordinarily be as to past or existing material facts.” (Tarmann v. State Farm
Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 158.) “[P]redictions as to future
events, or statements as to future action by some third party, are deemed
opinions, and not actionable fraud.” (Id.)
Tentative Ruling – Fourth Cause of Action
Negligent Misrepresentation
Plaintiffs allege in relevant part:
27. DEFENDANTS represented to CA BALCONY
that they desired to enter into a referral fee agreement for the mutual benefit
of the parties, whereby DEFENDANTS would obtain lucrative construction
contracts and CA BALCONY would receive referral fees.
28. DEFENDANTS made the representations
set forth above with the intention of inducing CA BALCONY to enter into a
referral agreement, thereby causing CA BALCONY to provide DEFENDANTS with
valuable referrals of individuals and entities that required repair,
remodeling, or construction of balconies and exterior elevated elements in
Southern California.
…
38. When DEFENDANTS made the
representations set forth in paragraph 27 above, they had no reasonable grounds
for believing the representations to be true.
(Compl. ¶¶ 27-28 &
38.)
Here, Plaintiff’s fourth cause of action appears to
rely not on misrepresentations of past or then current facts, but on a belief
that Defendants would enter into a contract in the future and would obtain lucrative
construction contracts and Plaintiff would receive referral fees in the future.
(See Compl. ¶¶ 27-28.) This suggests that the cause of action is one for
negligent false promise, a claim not recognized as actionable.
In relevant part of Tarmann:
To maintain an
action for deceit based on a false promise, one must specifically allege and
prove, among other things, that the promisor did not intend to perform at the
time he or she made the promise and that it was intended to deceive or induce
the promisee to do or not do a particular thing. [Citations omitted.] Given
this requirement, an action based on a false promise is simply a type of intentional misrepresentation,
i.e., actual fraud. The specific intent requirement also precludes
pleading a false promise claim as a negligent misrepresentation, i.e., “The
assertion, as a fact, of that which is not true, by one who has no reasonable
ground for believing it to be true.” [Citation omitted.] Simply put, making a
promise with an honest but unreasonable intent to perform is wholly different
from making one with no intent to perform and, therefore, does not constitute a
false promise. Moreover, we decline to establish a new type of actionable deceit:
the negligent false promise.
(Tarmann v.
State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 159; italics in
original, footnote omitted)
Plaintiff’s fourth cause of action for
negligent misrepresentation was alleged against both Defendants. Defendants’ demurrer
to the fourth cause of action for failure to state sufficient facts is
SUSTAINED. The Court will hear argument as to if leave to amend should be
granted, but the Court is tentatively planning to deny leave to amend.
Economic Loss Rule
Defendants’ arguments on
the economic loss rule on pages 11-12 of the demurrer are borderline incomprehensible.
Further, Defendants’ citation to federal law in the ninth circuit is not
binding on this Court. Further, it is unclear what Defendants are seeking to accomplish
with their arguments with respect to the pleading stage.
Further,
Defendants’ citation to Robinson Helicopter Co., Inc. does not seem to
support Defendants’ argument that the intentional misrepresentation claim is
barred by the economic loss rule because as the Court in Robinson noted,
“Robinson contends the Court of Appeal erred in its decision because the
economic loss rule does not bar its fraud and intentional misrepresentation
claims. We conclude that, with respect to Dana's provision of false
certificates of conformance, Robinson is correct.” (Robinson
Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988.) Therefore,
it seems as if Robinson would not bar the intentional misrepresentation
claim here. Further, the Court previously noted that the demurrer to the
intentional misrepresentation claim was sustained with leave to amend granted.
Further,
because of Defendants paying short shrift to their own argument on the economic
loss rule, it is unclear to the Court if the economic loss rule is even
applicable here.
As
stated in Robinson:
We begin with a brief background on the economic loss rule.
Economic loss consists of “ ‘ “ ‘damages for inadequate value, costs of repair
and replacement of the defective product or consequent loss of profits—without
any claim of personal injury or damages to other property....’ ” '
[Citation.]” (Jimenez v. Superior Court (2002) 29 Cal.4th
473, 482, 127 Cal.Rptr.2d 614, 58 P.3d 450.) Simply stated, the economic
loss rule provides: “ ‘ “[W]here a purchaser's expectations in a sale are
frustrated because the product he bought is not working properly, his remedy is
said to be in contract alone, for he has suffered only ‘economic’ losses.” '
This doctrine hinges on a distinction drawn between transactions involving the
sale of goods for commercial purposes where economic expectations are protected
by commercial and contract law, and those involving the sale of defective
products to individual consumers who are injured in a manner which has
traditionally been remedied by resort to the law of torts.” (Neibarger
v. Universal Cooperatives, Inc. (1992) 439 Mich. 512, 486 N.W.2d 612,
615, fns. omitted.) The economic loss rule requires a purchaser to recover
in contract for purely economic loss due to disappointed expectations, unless
he can demonstrate harm above and beyond a broken contractual promise. (Redarowicz
v. Ohlendorf (1982) 92 Ill.2d 171, 65 Ill.Dec. 411, 441 N.E.2d 324,
327.) Quite simply, the economic loss rule “prevent[s] the law of contract
and the law of tort from dissolving one into the other.” (Rich
Products Corp. v. Kemutec, Inc. (E.D.Wis.1999) 66 F.Supp.2d 937,
969.)
(Robinson Helicopter Co., Inc. v. Dana Corp. (2004)
34 Cal.4th 979, 988.)
This action does not seem to be based on a
contract pertaining to the sale of goods or defective products but instead appears
to pertain to a contract providing a service.
MOTION TO STRIKE
Moving Party: Defendants, Dialog Group, Inc., and Norayr
Galoyan
Responding Party:
Plaintiff, California Balcony, Inc.
Moving Papers: Notice/Motion
Opposition Papers: Opposition
Reply Papers: No Reply.
Reply due 4/26/2024.
Proof of Service
Timely Filed (CRC Rule 3.1300): Ok
16/21 Court Days Lapsed (CCP 1005(b)): Ok
Proper Address: Ok
RELIEF REQUESTED
Defendants, Dialog Group, Inc. and Norayr
Galoyan, move for an order striking portions of the Complaint and claim for
punitive damages as hereinafter referenced (all paragraph numbers herein refer
to those in the complaint):
¶ 36. “The conduct of
DEFENDANTS was an intentional misrepresentation and was despicable conduct that
has subjected CA BALCONY to a cruel and unjust hardship in conscious disregard
of CA BALCONY's rights, so as to justify an award of exemplary and punitive
damages.”
And prayer for “b)
punitive damages” at 8:4 (intentional misrepresentation) and at 8:18 (negligent
misrepresentation) of the complaint
This motion is based
upon Code of Civil Procedure § 430.30 (e) and (f) et seq., upon the attached
Memorandum of Points and Authorities, the Declaration of Ara Joe Keropian
regarding meeting and conferring prior to filing this motion, the records and
files in this action, and upon such further evidence and argument as may be
presented prior to or at the time of hearing on the demurrer.
Meet and
Confer
Before filing a motion
to strike pursuant to this chapter, the moving party shall meet and confer in
person or by telephone with the party who filed the pleading that is subject to
the motion to strike for the purpose of determining if an agreement can be
reached that resolves the objections to be raised in the motion to strike. If
an amended pleading is filed, the responding party shall meet and confer again
with the party who filed the amended pleading before filing a motion to strike
the amended pleading. (CCP §435.5(a).)
Defendants’ counsel
alleged that a meet and confer occurred. (Keropian Decl. ¶2.)
The grounds for moving to strike must appear on
the face of the pleading or by way of judicial notice. (Code. Civ. Proc.
§ 437; Turman v. Turning Point of Central California, Inc. (2010)
191 Cal.App.4th 53, 63 [“judges read allegations of a pleading subject to a
motion to strike as a whole, all parts in their context, and assume their
truth”].)
Further, CCP § 431.10(a)-(c) states as follows:
(a) A material
allegation in a pleading is one essential to the claim or defense and which
could not be stricken from the pleading without leaving it insufficient as to
that claim or defense.
(b) An immaterial
allegation in a pleading is any of the following:
(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.
(3) A demand for
judgment requesting relief not supported by the allegations of the complaint or
cross-complaint.
(c) An “immaterial
allegation” means “irrelevant matter” as that term is used in Section 436.
(CCP §431.10(a)-(c).)
LEGAL STANDARD – Punitive Damages
In an action for the breach of an
obligation not arising from contract, where it is proven by clear and
convincing evidence that the defendant has been guilty of oppression, fraud, or
malice, the plaintiff, in addition to the actual damages, may recover damages
for the sake of example by way of punishing the defendant. (Cal. Civ. Code
§3294(a).)
“‘Malice’ means conduct which is
intended by the defendant to cause injury to the plaintiff or despicable
conduct which is carried on by the defendant with a willful and conscious
disregard of the rights or safety of others.” (CCP §3294(c)(1).)
“‘Oppression’ means despicable conduct
that subjects a person to cruel and unjust hardship in conscious disregard of
that person’s rights. (CCP §3294(c)(2).)
“‘Fraud’ means an intentional
misrepresentation, deceit, or concealment of a material fact known to the
defendant with the intention on the part of the defendant of thereby depriving
a person of property or legal rights or otherwise causing injury. (CCP §3294(c)(3).)
“In order to survive a motion to strike
an allegation of punitive damages, the ultimate facts showing an entitlement to
such relief must be pled by a plaintiff.” (Clauson v. Superior Court
(1998) 67 Cal. App. 4th 1253, 1255.) Conclusory allegations, devoid of any
factual assertions, are insufficient to support a conclusion that parties acted
with oppression, fraud or malice. (Smith v. Sup. Ct. (1992) 10 Cal. App.
4th 1033, 1042.)
Tentative Ruling Motion to Strike
Defendants
seek to strike the punitive damages request in ¶36 in the third cause of action
(intentional misrepresentation) and the punitive damages request in ¶38 in the fourth
cause of action (negligent misrepresentation).
Defendants’ motion to strike the punitive damages
request in ¶36 is GRANTED with leave to amend since the third cause of action
was sustained with leave to amend.
Defendants’ motion to strike the punitive damages
request in ¶38 is GRANTED because the demurrer to the fourth cause of action
was sustained. The Court will hear argument as to if leave to amend is granted
based on how it rules as to whether or not the demurrer to the fourth cause of
action will or will not be granted leave to amend.