Judge: Colin Leis, Case: 23STCV15889, Date: 2025-02-06 Tentative Ruling

Case Number: 23STCV15889    Hearing Date: February 6, 2025    Dept: 74

E Cargoway Logistics Korea Co, LTD. V. RC Concepts, Inc. et al

Cross-Defendant LA Cargo Express, Inc’s Demurrer to the Cross-Complaint

BACKGROUND 

            This motion arises from a contractual fraud complaint.

            Plaintiff E-Cargoway Logistics Korea Co., Ltd. (E-Cargoway) filed a complaint against defendants PR Concepts, Inc (PR); FIC INC; DE24 Logistics Inc; Paul Sang Yu; Kyong Meadows; Michael Ko; and Samuel Lee. 

            PR filed a cross-complaint against cross-defendants E-Cargoway Logistics Korea Co, Ltd.; E-Cargoway Logistics USC, Inc.; Chris Kim (Kim); and LA Cargo Express Inc. (LA Cargo).

            Cross-Defendant LA Cargo demurs to the Fourth Cause of Action, the only cause of action that names LA Cargo.

DISCUSSION

LA Cargo demurs to the Fourth Cause of Action for conspiracy on the grounds that (1) LA Cargo does not owe a duty to PR and (2) the cause of action is vague.

Conspiracy is not an independent tort. Conspiracy instead imposes liability “on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration.”  (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 504.)  Conspiracy does not give rise to an independent cause of action unless “a civil wrong has been committed, resulting in damage.”  (Ibid.) 

The elements of civil conspiracy are (1) Defendants’ agreement to the objective and course of action to injure; (2) a wrongful act pursuant to such an agreement; and (3) resulting damage.  (Berg & Berg Ent., LLC v. Sherwood Partners, Inc. (2005) 131 Cal.App.4th 802, 823.)  Co-conspirators must be legally capable of committing the tort, meaning, among other things, they must owe a duty to the plaintiff.  (Applied Equipment Corp., 7 Cal.4th at pp. 412.) At the same time, if the conspirator acts in furtherance of the conspirator’s own financial gain, the conspirator may be liable for conspiracy even without owing a duty to the plaintiff.  (Mosier v. Southern California Physicians Ins. Exchange (1998) 63 Cal.App.4th 1022, 1048.) 

PR alleges that cross-defendant Kim, the managing director of E-Cargoway, formed a new business entity (LA Cargo) to lure customers away from PR. (Cross-Complaint, ¶ 13, 44.)  PR alleges that cross-defendants engaged in fraudulent misrepresentation.  (Cross-Complaint, ¶ 43.)  PR alleges that the cross-defendant conspired to use the misrepresentations to damage PR.  (Cross-Complaint, ¶ 48.)  PR alleges that only E-Cargoway and Kim made the intentional misrepresentations.  (Cross-Complaint, ¶ 28-35.)  PR alleges that LA Cargo provided the same services as PR, but at a lower rate to lure away future and existing customers.  (Cross-Complaint, ¶ 44.)    PR does not allege that LA Cargo owed any duty to PR. 

PR has alleged that LA Cargo acted in its own financial interest when participating in the conspiracy.  Therefore, PR has alleged sufficient facts to state a cause of action for conspiracy.  

CONCLUSION

            The Court overrules Cross-Defendant’s demurrer to the Fourth Cause of Action.

            Cross-Defendant to give notice.