Judge: Colin Leis, Case: 23STCV27313, Date: 2024-12-27 Tentative Ruling

Case Number: 23STCV27313    Hearing Date: December 27, 2024    Dept: 74

Melnick v. Restocrete, Inc. et al.

Defendant Restocrete, Inc.’s Demurrer with Motion to Strike.

BACKGROUND 

            This motion arises out of the negligent breach of contract and fraud claim.

            Plaintiff Edward Melnick alleges that defendants RestoCrete, Inc (RestoCrete) and Mauricio Marenco breached their contract and committed fraudulent business practices. 

            Plaintiff alleges six causes of action: (1) Breach of Contract; (2) Breach of Implied Covenant of Good Faith and Fair Dealing; (3) Violation of Business and Profession code section 17200; (4) Misrepresentation; (5) Negligence; and (6) Negligent Infliction of Emotional Distress.

            RestoCrete demurs to the Second, Third, Fourth, Fifth and Sixth Cause of Action.

LEGAL STANDARD

Demurrer

As a general matter, 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 pleading alone, and not the evidence or facts alleged.”  (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.)  As such, the court assumes the truth of the complaint’s properly pleaded or implied factual allegations.  (Id.)  The only issue a demurrer is concerned with is whether the complaint, as it stands, states a cause of action.  (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)

Where a demurrer is sustained, leave to amend must be allowed where there is a reasonable possibility of successful amendment.  (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.)  The burden is on the plaintiff to show the court that a pleading can be amended successfully.  (Id.; Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.)  However, “[i]f there is any reasonable possibility that the plaintiff can state a good cause of action, it is error to sustain a demurrer without leave to amend.”  (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 245).

Motion to Strike

A court may strike any “¿irrelevant, false or improper matter¿inserted in any pleading¿” or any part of a pleading “¿not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.¿” (¿Code Civ. Proc., § 436¿.) “¿The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.¿” (¿Code Civ. Proc., § 437¿.)¿ 

DISCUSSION

Demurrer

            RestoCrete, Inc demurs to the Second, Third, Fourth, Fifth and Sixth Cause of Action on the grounds that Plaintiff fails to state sufficient facts and is too uncertain to constitute a cause of action. 

Implied Covenant of Good Faith and Fair Dealing – Second Cause of Action

            The elements of implied covenant of good faith and fair dealing are (1) the existence of a contractual relationship; (2) an implied duty; (3) breach; and (4) causation of damages.  (Smith v. San Francisco (1990) 225 Cal.App.3d 38, 49.)  RestoCrete demurs on the basis that Plaintiff does not allege a sufficient cause of action because Plaintiff fails to allege that (1) all conditions required for performance were met, (2) RestoCrete interfered with Plaintiff’s right to receive benefits, and (3) the cause of action for breach of implied covenant of good faith does not rise to a separate cause of action from the breach of contract.

            Plaintiff alleges that (1) RestoCrete and Plaintiff entered into a contract to supply and install polished concrete flooring, including a warranty that the floor would be free of material defects.  (Complaint, ¶ 10-11.)  The parties entered into a written contract, but RestoCrete failed to provide Plaintiff with a fully executed copy.  (Complaint ¶ 12.) (2) RestoCrete warrantied that the flooring would be free of defects.  (Complaint, ¶ 11.)  (3) Plaintiff paid RestoCrete a portion upfront for the services, and made an additional payment when services were complete.  (Complaint, ¶ 13-14.)  About six months after installation, Plaintiff noticed defects.  (Complaint, ¶ 15-17.) An inspection discovered the cause of the defect was “improper preparation, curing and/or water content in the mixture of materials during installation.  (Complaint, ¶ 18.)  After being notified of the breach of contract, RestoCrete failed to remedy the defect.  (Complaint, ¶ 44.)  (4) Defendant suffered damages.  (Complaint, ¶ 26.)

            Plaintiff’s allegations are sufficiently certain to allege a cause of action.

            In its reply, RestoCrete raises a new argument that the Second Causes of Action is barred by the economic loss doctrine.  The court declines to consider this new argument.

The Court overrules the demurrer to the second cause of action.

            Violation of the Business and Professions Code section 17200 – Third Cause of Action

            There are three prongs to Business and Professions Code section 17200.  Plaintiff alleges the unfair business practices prong.

            The elements of an unfair business practice are (1) a business practice, (2) that is unfair, unlawful or fraudulent, and (3) an authorized remedy.  (Bus. & Prof. Code § 17200.) 

            Plaintiff alleges that (1) defendant failed to properly and professionally do the work contracted for, failed to investigate the defective work, and failed to repair, remedy or refund the damaged flooring.  (Complaint, ¶ 50.)  (2) This was a pattern of unfair and deceptive business practices.  (Complaint, ¶¶ 49, 51.)  The fraud is evidenced by the provision of the warranty and failure to remedy the issue.  (Complaint, ¶¶ 11, 44.)

            Plaintiff has sufficiently pleaded the second cause of action; therefore, the Court overrules the demurrer to the Third Cause of Action.

            Misrepresentation – Fourth Cause of Action

            The elements of misrepresentation are (1) assertion of an untrue fact; (2) believed by defendant to be true; (3) lack of reasonable grounds for the belief; (4) defendant’s intent to induce plaintiff’s reliance upon the representation; (5) plaintiff’s justifiable reliance upon the representation; and (6) resulting damage.  (Melican v. Regents of Univ. of Cal. (2007) 151 Cal.App.4th 168, 182.) 

            Plaintiff pleads (1) RestoCrete asserted that it would provide quality service and that the defects Plaintiff noticed were “normal and temporary.”  (Complaint, ¶ 55.)  (2) Plaintiff believed these misrepresentations.  (Complaint, ¶ 55.)  (3) RestoCrete was informed of the defect in the installation process and continued to assert that the issue was with Plaintiff.  (Complaint, ¶ 19.)  (4) RestoCrete intended to induce Plaintiff to pay for its services.  (Complaint, ¶ 55.)  (5) Plaintiff relief on these assurances when Plaintiff purchased Restocrete’s services.  (Complaint, ¶ 55.)  (6) Plaintiff was damaged.  (Complaint, ¶ 58.) 

            Plaintiff pleads both intentional and negligent misrepresentation in the complaint.  The elements of fraudulent misrepresentation are (1) misrepresentation; (2) knowledge of falsity; (3) intent to defraud (induce reliance); (4) justifiable reliance; and (5) resulting damage.  (Conroy v. Regents of Univ. of Cal. (2009) 45 Cal.4th 1244, 1255.)  Fraudulent misrepresentation must be pleaded with heightened specificity.  (Hills Transportation Co. v. Southwest Forest Ind., Inc. (1968) 266 Cal.App.2d 702, 707.)  Fraud must plead facts as to “how, when, where, to whom, and by what means.”  (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.) 

            Plaintiff alleges that RestoCrete made written and verbal representations, including a quality warranty.  (Complaint, ¶ 11.)  These representations occurred on July 16, 2018, August 9, 2018, and March 1, 2020.  (Complaint, ¶¶ 11, 12, 15.)  Representations were made to Plaintiff directly.  (Complaint, ¶ 11.)  This meets the heightened pleading requirement.

            Therefore, the Court overrules demurer to the Fourth Cause of Action.

            Negligence – Fifth Cause of Action

            The Statute of Limitations for negligence is 3 years.  The complaint alleges that the work was completed around November 11, 2019.  (Complaint, ¶ 14.)  Plaintiff discovered that the flooring was installed defectively sometime after March 1, 2020.  (Complaint, ¶¶ 15, 18.)  Plaintiff filed the complaint on November 07, 2024.  Plaintiff fails to allege that the discovery rule applies, the date of discovery, or that the statute of limitations has tolled.

            The Court sustains the demurrer with leave to amend.

            Negligent Infliction of Emotional Distress – Sixth Cause of Action

            The elements of negligent infliction of emotional distress are (1) a legal duty to use due care; (2) breach of that duty; (3) damage or injury; and (4) causation.  (Huggins v. Longs Drug Stores California, Inc. (1993) 6 Cal.4th 124, 129.)

            Like the Fifth Cause of Action, the Sixth Cause of Action fails under the statute of limitations.  Therefore, the Court sustains the demurrer to the Sixth Cause of Action with leave to amend.

Motion to Strike

            RestoCrete requests the Court strike three sections requesting punitive damages and a prayer for pre- and post- judgement interest.  Because the Court overrules the demurrer to the cause of action for fraud, the Court denies the motion to strike the demand for punitive damages in the Second Cause of Action and the Prayer for Relief.  The Court sustained the demurer to the Sixth Cause of Action, therefore, the motion to strike is moot. 

            In a cause of action alleging oppression, fraud or malice, pre-judgment interest does not require “presence of previously determinate damages.”  (Greenfield v. Insurance Inc. (1971) 19 Cal.App.3d 803, 813.)  Therefore, the Court denies the motion to strike.

CONCLUSION

            The Court sustains in part and overrules in part Defendant’s Demurrer.  The Court sustains the demurrer to the Fifth and Sixth Causes of Action with leave to amend.  The Court overrules the demurrer to the remaining causes of action. 

            The Court denies the Motion to Strike.

            Defendant to give notice.