Judge Barbara M. Scheper, Case 20STCV20194 2023-04-14 Tentative Ruling

Judge: Barbara M. Scheper, Case: 20STCV20194, Date: 2023-04-14 Tentative Ruling

Case Number: 20STCV20194 Hearing Date: April 14, 2023 Dept: 30

Dept. 30

Calendar No.

Flores vs. Long Beach Container Transport, Inc., et. al., Case No. 20STCV20195

Tentative Ruling re: Cross-defendant’s Demurrer to First Amended Cross-complaint; Motion to Strike

Cross-Defendant Josety Flores (Cross-Defendant) demurs to and moves to strike the First Amended Cross-Complaint (FACC) of Cross-Complainant Jose Elias Flores (Cross-Complainant). The demurrer is sustained with ten (10) days leave to amend. The motion to strike is denied as moot.

In reviewing the legal sufficiency of a complaint against a demurrer, a court will treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions, or conclusions of law. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318 (Blank); C & H Foods Co. v. Hartford Ins. Co. (1984) 163 Cal.App.3d 1055, 1062.) It is well settled that a “demurrer lies only for defects appearing on the face of the complaint[.]” (Stevens v. Superior Court (1999) 75 Cal.App.4th 594, 601.) “The rules by which the sufficiency of a complaint is tested against a general demurrer are well settled. We not only treat the demurrer as admitting all material facts properly pleaded, but also give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.” (Guclimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38 (internal quotes omitted).) For purposes of ruling on a demurrer, the complaint must be construed liberally by drawing reasonable inferences from the facts pleaded. (Wilner v. Sunset Life Ins. Co. (2000) 78 Cal.App.4th 952, 958.)

When ruling on a demurrer, the Court may only consider the complaint’s allegations or matters which may be judicially noticed. (Blank, supra, 39 Cal.3d at p. 318.) The Court may not consider any other extrinsic evidence or judge the credibility of the allegations plead or the difficulty a plaintiff may have in proving his allegations. (Ion Equip. Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881.) A demurrer is properly sustained only when the complaint, liberally construed, fails to state facts sufficient to constitute any cause of action. (Kramer v. Intuit Inc. (2004) 121 Cal.App.4th 574, 578.)

Cross-Defendant allegedly worked for Long Beach Container Transport, Inc. from November 2001 to August 2019, when she quit her job. (FACC ¶¶ 8-9.) In early August 2019, Cross-Defendant allegedly made oral representations to Cross-Defendant that money transfers and checks prepared by Cross-Defendant would be used to pay vendors, creditors, and employees of Long Beach Container Transport. (FACC ¶ 12.) However, the money transfers and checks instead went to accounts controlled by Cross-Defendant. (FACC ¶ 13.) Cross-Defendant learned of Cross-Complainant’s fraud in mid-August 2019, from a bank employee. (FACC ¶ 16.)

Cross-Defendant demurs to the first and second causes of action for Fraud and Negligent Misrepresentation.

The elements of fraud are: (1) misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity (scienter); (3) intent to defraud or induce reliance; (4) justifiable reliance; and (5) damages. (See Civil Code §1709.) Fraud actions are subject to strict requirements of particularity in pleading. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216.) “The particularity requirement demands that a plaintiff plead facts which show how, when, where, to whom, and by what means the representations were tendered.” (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.)

“[T]here are two causation elements in a fraud cause of action. First, the plaintiff's actual and justifiable reliance on the defendant's misrepresentation must have caused him to take a detrimental course of action. Second, the detrimental action taken by the plaintiff must have caused his alleged damage.” (Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1062.) “In addition to pleading actual reliance, the plaintiff must set ‘forth facts to show that his or her actual reliance on the representations was justifiable, so that the cause of the damage was the defendant's wrong and not the plaintiff's fault.’ [Citation.] There must be more pled than a simple statement plaintiff justifiably relied on the statements.” (Id. at 1066-67.)

To plead fraud by negligent misrepresentation, a plaintiff must allege: (1) a misrepresentation of a past or existing material fact; (2) made without reasonable grounds for believing it to be true; (3) made with the intent to induce another’s reliance on the fact misrepresented; (4) justifiable reliance on the misrepresentation; and (5) resulting damage. (Ragland v. U.S. National Bank Assn. (2012) 209 Cal.App.4th 182, 196.)

Both the first and second causes of action fail because the FACC fails to allege any act by Cross-complainant taken in detrimental reliance on Cross-defendant’s alleged misrepresentations. The allegations that “Cross-Complainant relied on the false representations made by Cross-Defendant” and that “Cross-Complainant’s reliance on the false representations . . . is a substantial factor in Cross-Complainant’s economic injury” are wholly conclusory. (FACC ¶ 15.) Relatedly, because the FACC has not pled any detrimental act taken by Cross-Complainant, it also fails to allege that Cross-Complainant incurred damages caused by reliance on the misrepresentations. Accordingly, the demurrer is sustained as to the first and second causes of action.

Cross-Defendant moves to strike the allegations in the FACC related to recovery of punitive damages. (FACC ¶¶ 17, 24.) Because the demurrer is sustained, the motion to strike is moot.