Judge Daniel M. Crowley, Case Number: 22STCV28315, Date: 2023-08-21 Tentative Ruling

Defendant JP Morgan Chase Bank, N.A.’s demurrer to Plaintiff Emmanuel C. Amuchie d/b/a Caremax Medical’s complaint is sustained as to the 1st and 2nd causes of action with leave to amend.

Defendant JP Morgan Chase Bank, N.A. (“Chase”) (“Defendant”) demurs to the 1st and 2nd causes of action in Plaintiff Emmanuel C. Amuchie d/b/a Caremax Medical’s (“Amuchie”) (“Plaintiff”) complaint (“Complaint”).[1] (Notice of Demurrer, pg. 2.)

Defendant’s 6/16/23 request for judicial notice of April 16, 2021 Warrant to Seize Property Subject to Forfeiture, signed by United States Magistrate Judge Scott T. Varholak (“Seizure Warrant”), is granted. (D-RJN, Exh. A.)

Before filing a demurrer, the moving party must meet and confer in person or by telephone with the party who filed the pleading to attempt to reach an agreement that would resolve the objections to the pleading and obviate the need for filing the demurrer. (C.C.P. §430.41.)

Defendant failed to submit a meet and confer declaration. However, a determination by the court that the meet and confer process was insufficient shall not be grounds to overrule or sustain a demurrer. (C.C.P. §430.41(a)(4).) Therefore, the Court will consider the instant demurrer.

Plaintiff filed the operative Complaint on August 30, 2022, alleging eight causes of action against Defendant: (1) breach of contract; (2) breach of contract arising from Bank’s failure to act in good faith; (3) slander and libel; (4) negligent, wanton, and/or intentional hiring and supervision of incompetent employees or agents; (5) negligent, wanton, and intentional conduct; (6) violating the Fair Credit Reporting Act and California Consumer Reporting Agencies Act, 1785.1 et seq.; (7) invasion of privacy; and (8) conversion, arising from Defendant allegedly closing Plaintiff’s account and taking Plaintiff’s funds in the account. (Complaint ¶10.)

On October 19, 2022, Defendant filed a notice of removal of this action to federal court. On May 3, 2023, the U.S. District Court of the Central District of California filed a notice of remand indicating the federal court entered an order of remand on April 25, 2023, remanding the instant matter to this Court.

Defendant filed the instant demurrer on June 16, 2023. Plaintiff filed his opposition on July 31, 2023. Defendant filed its reply on August 14, 2023.

Defendant demurs on the basis that Plaintiff’s 1st and 2nd causes of action fail to state facts sufficient to constitute causes of action against Defendant. (Demurrer, pg. 2; C.C.P. §430.10(e).)

“[A] demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.) A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (See Donabedian v. Mercury Insurance Co. (2004) 116 Cal.App.4th 968, 994 [in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents].) For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true, but the reviewing court does not assume the truth of conclusions of law. (Aubry v. Tri-City Hospital District (1992) 2 Cal.4th 962, 967.)

A cause of action for breach of contract requires the following elements: (1) existence of contract; (2) plaintiffs’ performance or excuse for nonperformance; (3) defendants’ breach (or anticipatory breach); and (4) resulting damage to plaintiff. (Reichert v. General Insurance Co. (1968) 68 Cal.2d 822, 830; Hale v. Sharp Healthcare (2010) 183 Cal.App.4th 1373, 1387.) Plaintiff must plead the contract, plaintiff’s performance or excuse for non-performance, defendant’s breach, and damage to plaintiff therefrom. (Acoustics, Inc. v. Trepte Construction Co. (1971) 14 Cal.App.3d 887, 913.) Although a written contract is usually pleaded by alleging its making and attaching a copy which is incorporated by reference, a written contract can also be pleaded by alleging the making and the substance of the relevant terms. (Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198-199; Perry v. Robertson (1988) 201 Cal.App.3d 333, 341.)

Plaintiff alleges he entered into a written contract with Defendant as evidenced in Exhibit 1 to the Complaint. (Complaint ¶16.) Plaintiff alleges based on this contract, Plaintiff deposited money into his bank account with Defendant; asked the Small Business Administration (“SBA”) to deposit his COVID-19 Relief Funds into this account; withdrew money from his account with Defendant; and transferred funds into and from his account with Defendant. (Complaint ¶16.) Plaintiff alleges the parties understood that Defendant will only report Plaintiffs to any third-party agency or government based on truthful and honest information. (Complaint ¶16.)

Plaintiff alleges the consideration set in the agreement was fair and reasonable. (Complaint ¶17.) Plaintiff alleges the covenant of good faith and fair dealing was implied in the contract. (Complaint ¶17.) Plaintiff alleges based on the written contract or oral representations and promises and/or conduct of defendant’s employees, Plaintiff had a contract with Defendant that provided he could make deposits, withdrawals, transfers in his bank account, and then defendant would not close or freeze his account. (Complaint ¶17.)

Plaintiff alleges he at all times fulfilled his duties and conditions under the contract and has been ready, willing, and able to continue performing them in a competent and satisfactory manner. (Complaint ¶18.) Plaintiff alleges Defendant breached this agreement by doing the following acts: notwithstanding the implied promise not to close Plaintiff s bank account, Defendant closed Plaintiff’s account with the bank; Defendant took Plaintiff’s COVID-19 Relief funds; Defendant took plaintiff’s money; and Defendant reported Plaintiff to government agencies which caused derogatory reports on his credit report. (Complaint ¶19.)

Plaintiff alleges by reason of Defendant’s breach of the contract, Plaintiff has suffered damages in the sum according to proof. (Complaint ¶20.) Plaintiff alleges as a proximate result of Defendant’s breach of the contract, Plaintiff has suffered and continues to suffer losses in his credit ratings, has been subjected to paying higher interest rate for loans he applied for, has been subjected to unnecessary scrutiny, and is being investigated by authorities in the federal government. (Complaint ¶20.)

Plaintiff fails to attach the deposit account agreement to the Complaint. Plaintiff fails to plead the written contract in lieu of attaching the contract to the Complaint by alleging the substance of the relevant terms. (Construction Protective Services, Inc., 29 Cal.4th at pgs. 198-199; Perry, 201 Cal.App.3d at pg. 341.)

Plaintiff fails to allege the requisite element of breach because the Seizure Warrant obligated Defendant to decline to return funds to Plaintiff, as the Seizure Warrant ordered Defendant to turn over the funds in Plaintiff’s account to the federal government by April 30, 2021. (D-RJN, Exh. A [“An application by federal law enforcement officer or an attorney for the government requests that certain property located in the Southern District of New York be seized as being subject to forfeiture to the United States of America. The property is described as follows: Funds held by JPMorgan Chase & Co. in the accounts listed in Attachment A, up to the amount identified in column C of Attachment A for each respective account.”].)

Defendant’s demurrer to Plaintiff’s Complaint is sustained with 20 days leave to amend.

A cause of action for breach of implied covenant of good faith and fair dealing requires the following elements: (1) the parties entered into a contract (contractual relationship); (2) plaintiff fulfilled his/her contractual obligations; (3) any conditions precedent to defendant’s performance occurred; (4) defendant unfairly interfered with plaintiff’s right to receive the benefits of the contract; and (5) plaintiff was harmed by defendant’s conduct. (CACI 325.)

As stated with regard to the 1st cause of action, Plaintiff’s Complaint fails to attach the deposit account agreement to the Complaint. Plaintiff fails to plead the written contract in lieu of attaching the contract to the Complaint by alleging the substance of the relevant terms.

Accordingly, Cross-Defendant’s demurrer to Cross-Complainants’ 2nd cause of action is sustained with 20 days leave to amend.

Defendant’s demurrer to Plaintiff’ 1st and 2nd causes of action is sustained with 20 days leave to amend.

Hon. Daniel M. Crowley

Judge of the Superior Court

[1] To avoid confusion and reflect the documents filed on the docket, this Court refers to Plaintiff’s operative Complaint as the “Complaint” rather than the “First Amended Complaint.”