Judge Daniel M. Crowley, Case Number: 23STCV09051, Date: 2024-12-18 Tentative Ruling

Defendants Pacific Printex Corp.’s, Morad Ben Neman’s, Los Angeles ML, LLC’s, Shawn Simon Neman’s, and Brian Neman’s demurrer to Plaintiff Almost Nothing, Inc.’s Second Amended Complaint is sustained with 20 days leave to amend as to the 6^th cause of action and is sustained without leave to amend as to the 1st, 2nd, 3rd, 4th, 7th, 8th, and 9th causes of action.

Defendants Pacific Printex Corp. (“PPC” or “Printex”), Morad Ben Neman (“Morad”), Los Angeles ML, LLC (“LAML”), Shawn Simon Neman (“Shawn”), and Brian Neman (“Brian”) (collectively, “Moving Defendants”) demur Plaintiff Almost Nothing, Inc.’s (“Almost Nothing”) (“Plaintiff”) second amended complaint (“SAC”). (Notice of Demurrer, pg. 2.)

Moving Defendants’ 8/21/24 request for judicial notice of The Court’s Minute Order re: Hearing on Defendants’ Demurrer to Plaintiff’s First Amended Complaint filed on June 3, 2024, is denied because the Court does not need to take judicial notice of filings on the instant docket.

Plaintiff filed its initial Complaint against Moving Defendants and Non-Moving Defendant SCKS (collectively, “Defendants”) on January 3, 2023.

Plaintiff filed its first amended complaint (FAC”) against Defendants on June 27, 2023, alleging thirteen causes of action: (1) breach of joint venture; (2) breach of warranty of good faith and fair dealing; (3) breach of fiduciary duty; (4) declaratory relief; (5) constructive trust; (6) conspiracy to defraud; (7) negligence; (8) tortious interference with prospective economic advantage; (9) tortious interference with contract; (10) recission; (11) reformation; (12) attorney fees under tort of another doctrine; and (13) UCL- Violation of Business and Professional Code 17200.

On June 3, 2024, this Court sustained Moving Defendants’ demurrer to the FAC with 20 days leave to amend as to the 1st, 2nd, 3rd, 5th, 6th, 7th, 8th, 9th, 10th, 11th, 12th, and 13th causes of action, and overruled the demurrer to the 4th cause of action. (6/3/24 Minute Order.)

On June 21, 2024, Plaintiff filed the operative SAC against Defendants, alleging nine causes of action: (1) breach of joint venture [against PPC and Ben]; (2) breach of warranty of good faith and fair dealing [against PPC]; (3) breach of covenant of good faith and fair dealing [against Ben and PPC]; (4) breach of fiduciary duty [against Ben and PPC]; (5) declaratory relief [against Ben, PPC, and SCKs]; (6) conspiracy to defraud [against Ben, Shawn, PPC, Brian, and LAML]; (7) negligent interference with economic advantage [against Ben and PPC]; (8) intentional interference with economic advantage [against Ben, PPC, Brian, Shawn, and LAML]; and (9) UCL- Violation of Business and Professional Code 17200 [against LAML, PPC, and SCKS].

Plaintiff’s SAC arises from it, along with Printex, jointly holding a lease with SCKS which commenced as of July 17, 2000 (“2000 Lease”). (SAC ¶10.). Plaintiff alleges the 2000 Lease was with SCKS on the one hand and Plaintiff and Printex jointly and severally on the other hand, for 1620 S. Los Angeles, CA 90015 (“Premises”). (SAC ¶10.) Plaintiff alleges although it was a lease between SCKS and Printex/Plaintiff, it was actually a Sublease of that Master lease between the State of California Department of Transportation and Freeway Airspace Associates (“Freeway”), dated October 11, 1977 (“Master Lease”). (SAC ¶10.) Plaintiff alleges SCKS later became the successor in interests to the said Master Lease with the State of California, based on assignment by Freeway to SCKS on November 30, 1977. (SAC ¶10.)

On August 21, 2024, Moving Defendants filed the instant demurrer. On October 11, 2024, Plaintiff filed its opposition. On December 10, 2024, Moving Defendants filed their reply.

Before filing a demurrer pursuant to this chapter, the demurring party shall meet and confer in person, by telephone, or by video conference 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. (C.C.P. §430.41(a), emphasis added.) A declaration must be filed with a demurrer regarding the results of the meet and confer process. (C.C.P. §430.41(a)(3).)

Moving Defendants’ counsel declares his office made a good faith attempt to meet and confer via phone with Plaintiff’s counsel, wherein he discussed the grounds for the instant demurrer, and the parties were unable to agree. (Decl. of Zadeh ¶3.) Moving Defendants’ counsel’s declaration is sufficient under C.C.P. §430.41(a). Accordingly, the Court will consider the instant demurrer.

Moving Defendants demur to the 1st, 2nd, 3rd, 4th, 6th, 7th, 8th, and 9th causes of action on the basis that each fail to allege facts sufficient to allege a cause of action.[1] (Demurrer, pgs. 3-4; C.C.P. §430.10(e).) Moving Defendants demur to all causes of action on the basis they are uncertain. (Demurrer, pg. 4; C.C.P. §430.10(f).)

“[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.)

“An implied-in-fact contract is based on the conduct of the parties. Like an express contract, an implied-in-fact contract requires an ascertained agreement of the parties.” (Unilab Corp. v. Angeles-IPA (2016) 244 Cal.App.4th 622, 636, internal citation omitted.)

“To prevail on a cause of action for breach of contract, the plaintiff must prove (1) the contract, (2) plaintiff’s performance of the contract or excuse for nonperformance, (3) defendant’s breach, and (4) resulting damage to the plaintiff.” (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.)

“An oral contract may be pleaded generally as to its effect, because it is rarely possible to allege the exact words. [Citation.] A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures. [Citations.]” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.) That plaintiff could not allege with specificity the exact terms of the contract does not preclude statement of a cause of action. (Id.)

“‘There are three basic elements of a joint venture: the members must have joint control over the venture (even though they may delegate it), they must share the profits of the undertaking, and the members must each have an ownership interest in the enterprise.’ Where a joint venture is established, the parties to the venture are vicariously liable for the torts of the other in furtherance of the venture.” (Cochrum v. Costa Victoria Healthcare, LLC (2018) 25 Cal.App.5th 1034, 1053, internal citation omitted.)

Plaintiff alleges it on the one hand and Ben/Printex, on the other hand, agreed orally and based on their conduct as to the requirements for existence of joint ventures in California (a) to jointly share in the management and control; (b) joint decisions as to exploitation of the Lease, and; (c) equal sharing of profits and losses of their rental sublease business conducted at the Premises. (SAC ¶22.)

Plaintiff alleges that consistent with said joint venture, it and its principal Issac Kermani (“Kermani”), along with Printex and its principal Ben, orally agreed, as well as based on their conduct, that they would enter into a joint venture to administer their Lease with SCKS as follows: collect rent from subleases as well as each occupy a warehouse space/unit at the Premises for their own individual use while the Lease was in effect. (SAC ¶23.) Plaintiff alleges the Lease is in fact guaranteed by Plaintiff, Ben, the Kermani Family Trust, and Neman Family Trust. (SAC ¶23.)

Plaintiff alleges it and Printex/Ben each had an ownership interest in their rental business, each had joint control over the rental business albeit decided to delegate control of aspects of it to each other, and agreed to share the losses and profits of their rental business equally. (SAC ¶24.) Plaintiff alleges, however, the actual management, collection of rent, payment of bills and dividing up of the profits was or the majority of the relationship, handled by Plaintiff until Ben disrupted it. (SAC ¶24.)

Plaintiff alleges on information and belief that Printex through Ben, perpetrated a fraud on Plaintiff which resulted in Plaintiff agreeing to waive the Option to extend clause of the Lease, all so that Ben would then go and sign a new lease with SCKS commencing upon expiration of the Lease in 2025. (SAC ¶25.) Plaintiff alleges moreover, Ben through various entities and directly began taking over control of the Property without the consent of Plaintiff. (SAC ¶25.) Plaintiff alleges Ben engaged in the specific actions set forth in Paragraph 18. (SAC ¶25.) Plaintiff alleges all of these actions by Ben and Printex constituted a breach of joint venture opportunity. (SAC ¶25.) Plaintiff alleges as a result of this breach of agreement, Plaintiff has suffered subject to proof at trial plus interest, costs, and attorneys’ fees to the extent allowed by law. (SAC ¶26.)

Plaintiff fails to allege a cognizable cause of action. Fraud is not a breach, and must be alleged as a standalone cause of action with the requisite elements and specificity. (See Lazar v. Superior Court (1996) 12 Cal.4th 631, 638; Tarmann v. State Farm Mutual Automobile Insurance Co. (1991) 2 Cal.App.4th 153, 157.)

Accordingly, Moving Defendants’ demurrer to Plaintiff’s 1st cause of action is sustained without leave to amend.

“The implied covenant of good faith and fair dealing rests upon the existence of some specific contractual obligation. ‘The covenant of good faith is read into contracts in order to protect the express covenants or promises of the contract, not to protect some general public policy interest not directly tied to the contract’s purpose.’ . . . ‘In essence, the covenant is implied as a supplement to the express contractual covenants, to prevent a contracting party from engaging in conduct which (while not technically transgressing the express covenants) frustrates the other party’s rights to the benefits of the contract.’” (Racine & Laramie, Ltd. v. Department of Parks & Recreation (1992) 11 Cal.App.4th 1026, 1031-1032, internal citations omitted.)

“The prerequisite for any action for breach of the implied covenant of good faith and fair dealing is the existence of a contractual relationship between the parties, since the covenant is an implied term in the contract.” (Smith v. City and County of San Francisco (1990) 225 Cal.App.3d 38, 49.) “‘The implied covenant of good faith and fair dealing is limited to assuring compliance with the express terms of the contract and cannot be extended to create obligations not contemplated by the contract.’” (Pasadena Live v. City of Pasadena (2004) 114 Cal.App.4th 1089, 1094.)

Plaintiff alleges it and Printex’s Lease was set up so Plaintiff would collect rent, manage tenants, pay bills and do accounting, and parties would mutually decide as to any changes to this arrangement, and all decisions were to be made mutually. (SAC ¶31.)

Plaintiff alleges Printex herein breached this by unilaterally changing the above, and started collecting the rent and not distributing profits and not providing accounting. (SAC ¶32.) Plaintiff alleges they also excluded it from decisions regarding tenants. (SAC ¶32.)

Plaintiff alleges it and Printex are parties to the Lease, including supplemental addenda. (SAC ¶33.) Plaintiff alleges that as such, they owed each other a duty not to breach the covenant of good faith and fair dealing. (SAC ¶33.) Plaintiff alleges in addition, they were in a joint venture in so far as exploitation of the Lease opportunities with subleases to tenants wherein they would jointly share in the management, profit and losses of their rental sublease business conducted at the Premises. (SAC ¶33.)

Plaintiff alleges Printex engaged in various acts, activities and conduct which constituted breaches of the warranty of good faith and fair dealing inuring in Plaintiff’s behalf. (SAC ¶34.)

Plaintiff alleges these breaches caused Plaintiff harm. (SAC ¶35.) Plaintiff alleges Printex was aware their conduct in breaching Plaintiff’s rights under the Lease and Joint Venture would cause Plaintiff harm. (SAC ¶35.)

Plaintiff alleges that as a result of this breach of contract, Plaintiff has suffered damages subject to proof at trial. (SAC ¶36.)

Plaintiff fails to allege the express terms of the contract Printex breached. Plaintiff’s cause of action is uncertain as to the contract at issue—the Lease or the joint venture agreement. In the event Plaintiff’s allegation pertains to the joint venture agreement, this cause of action must fail because Plaintiff failed to allege a cause of action for breach of the joint venture agreement. (Smith, 225 Cal.App.3d at pg. 49.)

Accordingly, Defendant’s demurrer to Plaintiff’s 2nd and 3rd causes of action is sustained without leave to amend.

“A fiduciary relationship is ‘any relation existing between parties to a transaction wherein one of the parties is . . . duty bound to act with the utmost good faith for the benefit of the other party. Such a relation ordinarily arises where a confidence is reposed by one person in the integrity of another, and in such a relation the party in whom the confidence is reposed, if he voluntarily accepts or assumes to accept the confidence, can take no advantage from his acts relating to the interest of the other party without the latter’s knowledge or consent.’” (Wolf v. Superior Court (2003) 107 Cal.App.4th 25, 29.)

“Every agent owes his principal the duty of undivided loyalty. During the course of his agency, he may not undertake or participate in activities adverse to the interests of his principal. In the absence of an agreement to the contrary, an agent is free to engage in competition with his principal after termination of his employment, but he may plan and develop his competitive enterprise during the course of his agency only where the particular activity engaged in is not against the best interests of his principal.” (Sequoia Vacuum Systems v. Stransky (1964) 229 Cal.App.2d 281, 287.)

“The law of confidential relationships governs duties of trust that one is not obligated to assume. Once a person commits himself to a confidential relationship, the law requires him to fulfill the duties attendant to the relationship. Confidential relations protect the trust that is implicit in relationships between employers and employees, between masters and servants, and between principals and agents, rather than the information that may pass between these parties.” (Balboa Insurance Co. v. Trans Global Equities (1990) 218 Cal.App.3d 1327, 1350-1351, internal citation omitted.)

Plaintiff alleges it and Printex had a legal relationship of confidence with each other as stated above. (SAC ¶49.) Plaintiff alleges that also because the parties understood and agreed that whoever was collecting rent or any benefit under the Lease was doing so on behalf of themselves and on behalf of the other partner. (SAC ¶49.) Plaintiff alleges Printex also exerted undue influence on Plaintiff in that it was able to convince Plaintiff to waive the option to renew clause resulting in the 2025 Lease. (SAC ¶49.)

Plaintiff alleges their fiduciary duties to one another included: 1) cooperating with the other parties to the joint venture to achieve the set business goals; (2) avoiding disrupting the aims of the business relationship; (3) making use of the appropriate degree of skill and care when performing individual tasks; (4) informing the other parties of important decisions; (5) informing the other parties of business opportunities; (6) exercising prudence and diligence when investing shared funds; and, (7) not doing things that are motivated by selfishness and that could hurt the joint venture. (SAC ¶50.)

Plaintiff alleges it and Printex, through Ben, were in a fiduciary relationship under the circumstances outlined in this Complaint as parties running a joint venture. (SAC ¶51.) Plaintiff alleges both owed fiduciary duties and are duty bound to act with the utmost good faith for the benefit of the other party. (SAC ¶51.) Plaintiff alleges for example, as to the sublease business, both Plaintiff and Printex/Ben operated with a duty of strict confidence and in the integrity of each other and each accepted those confidences, and as such, each party is duty bound not to take no advantage from his acts relating to the interest of the other party without the latter’s knowledge or consent. (SAC ¶51.)

Plaintiff alleges it and Printex/Ben were in a joint venture in that they would jointly share in the management, profit and losses of their rental sublease business conducted at the Premises and would each own a warehouse space/unit at the Premises while the Lease was in effect. (SAC ¶52.) Plaintiff alleges consistent with their joint venture, Plaintiff and Printex/Ben each had an ownership interest in their rental business, each had joint control over the rental business albeit decided to delegate control of aspects of it to each other and agreed to share the losses and profits of their rental business equally. (SAC ¶52.)

Plaintiff alleges on information and belief that Printex and Ben, perpetrated a fraud on Plaintiff which resulted in Plaintiff agreeing to waive the Option to extend clause of the Lease, all so that Ben would then go and sign a new lease with SCKS commencing upon expiration of the Lease. (SAC ¶53.) Plaintiff alleges Ben through various entities and directly, began taking over control of the Property without the consent of Plaintiff. (SAC ¶53.)

Plaintiff alleges these actions by Printex and Ben, in addition to all the acts outlined above, constituted a breach of joint venture, the result of which PLAINTIFF has suffered damages subject to proof at trial plus interest, and costs. (SAC ¶54.)

Plaintiff fails to allege Printex has a legal relationship of confidence with Plaintiff. Plaintiff fails allege Printex does not deal on equal terms or is in a superior position to exert unique influence over Plaintiff.

Accordingly, Defendant’s demurrer to Plaintiff’s 4th cause of action is sustained without leave to amend.

“Conspiracy is not a separate tort, but a form of vicarious liability by which one defendant can be held liable for the acts of another. . . . A conspiracy requires evidence ‘that each member of the conspiracy acted in concert and came to a mutual understanding to accomplish a common and unlawful plan, and that one or more of them committed an overt act to further it.’ Thus, conspiracy provides a remedial measure for affixing liability to all who have ‘agreed to a common design to commit a wrong’ when damage to the plaintiff results. The defendant in a conspiracy claim must be capable of committing the target tort.” (IIG Wireless, Inc. v. Yi (2018) 22 Cal.App.5th 630, 652, internal citations omitted.)

“The elements of fraud that will give rise to a 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.’” (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 974, internal quotation marks omitted.)

“Fraud must be pled specifically; general and conclusory allegations do not suffice.” (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167.)

Plaintiff alleges that in the course of exploiting their rights under the Lease, Printex, through Ben, told Plaintiff that Printex would rent their warehouse to Plaintiff if they can get the Lease extended and rents lowered over next five years from SCKS. (SAC ¶61.) Plaintiff alleges that the parties agreed. (SAC ¶61.) Plaintiff alleges that Ben/Printex then met with SCKS about their needs. (SAC ¶61.) Plaintiff alleges SCKS agreed to extend the Lease to 2025 at agreed upon lowered rent, and assured Printex and Plaintiff, through Michael Salter, that he never evicts anyone and would continue to work with both of them. (SAC ¶61.) Plaintiff alleges a few days later, the Amendment to extend lease/deal with rent is presented by Ben to Plaintiff for signature. (SAC ¶61.) Plaintiff alleges that it for the first time saw that the option to extend was removed and objected to Ben. (SAC ¶61.) Plaintiff alleges Ben assured it that this was necessary in order to rent Printex’s warehouse to Plaintiff. (SAC ¶61.) Plaintiff alleges Ben also reminded it that SCKS assured him that it never evicts anyone and would work with both of them. (SAC ¶61.) Plaintiff alleges that in justifiable reliance on Ben’s representations, Plaintiff signed the document removing the option to extend. (SAC ¶61.) Plaintiff alleges it turns out, however, that Ben/Printex never intended to lease their Warehouse to Plaintiff, and that the representations of Ben and SCKS’ were untrue – it all was intended to coerce Plaintiff to sign the amendment which Plaintiff did. (SAC ¶61.) Plaintiff alleges thereafter, Printex/Ben refused to lease Plaintiff their warehouse, and the Shawn/Brian/LAML (as Ben/Printex strawmen) entered into the 2025 Lease with SCKS, excluding Plaintiff. (SAC ¶61.) Plaintiff alleges that Ben guaranteed that lease. (SAC ¶61.)

Plaintiff alleges the conspiracy, which was done orally, in writing and/or implied by the conduct of the parties, manifested itself in that all of these defendants entered into an agreement to enter into a new lease with SCKS commencing October 1, 2025, which they did do. (SAC ¶62.) Plaintiff alleges that lease is with LAML, Ben’s “straw man” company where his family members Shawn and Brian are principals and signatories to this new lease. (SAC ¶62.) Plaintiff alleges this is made clear by the fact that Ben guaranteed said lease. (SAC ¶62.) Plaintiff alleges on information and belief that Printex through Ben, perpetrated a fraud on Plaintiff which resulted in it agreeing to waive the “Option to extend” clause of the lease, all so that Ben would then go and sign this new lease with SCKS commencing upon expiration of the Lease. (SAC ¶62.)

Plaintiff alleges at the time of entering into the agreements intended to defraud Plaintiff by entering into the new lease with SCKS commencing 2025, these defendants were aware that they were defrauding Plaintiff and intended that such fraud be committed and perpetrated on Plaintiff. (SAC ¶63.)

Plaintiff alleges it discovered on or about 2023/2023 why Ben had fraudulently induced it to sign the 2019 Second Amendment removing the option to extend – Ben did so in order to then turn around and enter into a new lease with SCKS commencing October 1, 2025, using LAML as the “straw man” company run by Ben and where Ben’s family members Shawn and Brian are principals. (SAC ¶64.) Plaintiff alleges this is made clear by the fact that Ben guaranteed said lease. (SAC ¶64.) Plaintiff alleges if this lease is allowed to stand then Ben will be in a position to evict Plaintiff from the Premises, causing Plaintiff irreparable damages and losses. (SAC ¶64.)

Plaintiff alleges it was harmed by the conduct of Printex, Ben, Shawn, LAML and Brian as alleged herein, and these Defendants are responsible for the harm, because they were all part of a conspiracy with Ben and each other to defraud Plaintiff. (SAC ¶65.)

Plaintiff fails to allege facts that amount to wrongdoing or a conspiracy by Printex. Plaintiff’s SAC alleges that Pacific Eurotex (“Eurotex”) engaged in fraud by convincing Plaintiff to waive the option to extend the Lease and subsequently entering into the October 2025 Lease without Plaintiff. (SAC ¶¶15, 16.) Plaintiff fails to allege how Printex’s act of entering into the October 2025 Lease was wrongful. This is especially true since the removal of the option to extend occurred in 2019 as part of the Second Amendment to the Lease. The October 2025 Lease was only entered into in the year 2023.

Plaintiff fails to allege how Printex intentionally induced Plaintiff to remove the option to extend the Lease in 2019 to allow Printex to enter the October 2025 Lease in 2023.

Plaintiff fails to allege how Printex conspired to defraud Plaintiff by entering the October 2025 Lease without Plaintiff. Plaintiff fails to allege how Defendants SCKS, LAML, Shawn, and Brian were involved in the alleged conspiracy to defraud. The only allegation made by Plaintiff in this regard is that Printex used LAML as a “straw man” run by Shawn and Brian. (SAC ¶¶15, 64.) Plaintiff’s allegations, however, are conclusory as they fail to explain how SCKS, LAML, Shawn, and Brian participated or agreed to engage in the alleged conspiracy to defraud. Therefore, Plaintiff fails to allege an “agreement between two or more persons” for conspiracy. Finally, Plaintiff fails to make its allegations with the requisite specificity for a fraud cause of action. 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; West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 793.)

Accordingly, Moving Defendants’ demurrer to Plaintiff’s 6th cause of action is sustained with 20 days leave to amend.

“The tort of negligent interference with prospective economic advantage is established where a plaintiff demonstrates that (1) an economic relationship existed between the plaintiff and a third party which contained a reasonably probable future economic benefit or advantage to plaintiff; (2) the defendant knew of the existence of the relationship and was aware or should have been aware that if it did not act with due care its actions would interfere with this relationship and cause plaintiff to lose in whole or in part the probable future economic benefit or advantage of the relationship; (3) the defendant was negligent; and (4) such negligence caused damage to plaintiff in that the relationship was actually interfered with or disrupted and plaintiff lost in whole or in part the economic benefits or advantage reasonably expected from the relationship.” (North American Chemical Co. v. Superior Court (1997) 59 Cal.App.4th 764, 786.)

The “tort of negligent interference with economic relationship arises only when the defendant owes the plaintiff a duty of care.” (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 348.) “[A]mong the criteria for establishing [the existence of] a duty of care is the ‘blameworthiness’ of the defendant’s conduct. For negligent interference, a defendant’s conduct is blameworthy only if it was independently wrongful apart from the interference itself.” (Lange v. TIG Insurance Co. (1998) 68 Cal.App.4th 1179, 1187.)

Plaintiff alleges Ben/Printex secretly went to SCKS more than two years before the end of the 2000 Lease, in 2023 and secured the 2025 Lease without informing or inviting Plaintiff. (SAC ¶70.) Plaintiff alleges it never knew SCKS and Ben and his family members were entering into the 2025 Lease; Plaintiff only found that Ben and his family had executed the 2025 Lease with SCKS when, in 2023, SCKS called Plaintiff into his office to inform Plaintiff about the 2025 Lease, only after the 2025 Lease had been entered into without Plaintiff. (SAC ¶70.) Plaintiff alleges the wrongful act is that Ben, through the use of his family and company, misappropriated a joint venture opportunity for himself. (SAC ¶70.)

Plaintiff alleges Ben and Printex knew or should have known that Plaintiff was engaging in business dealings with the tenants that did and probably would have resulted in further an economic benefit to Plaintiff. (SAC ¶71.) Plaintiff alleges that as outlined above, Ben and Printex interfered and usurped Plaintiff’s opportunity for themselves both financially and otherwise. (SAC ¶71.) Plaintiff alleges Ben and Printex knew or should have known that Plaintiff’s relationship with the tenants would be disrupted if they failed to act with reasonable care. (SAC ¶71.) Plaintiff alleges Ben and Printex failed to act with reasonable care. (SAC ¶71.) Plaintiff alleges as a direct and proximate result of these Defendants’ negligent conduct, Plaintiff suffered compensatory, general, and special damages in amounts to be proven at trial. (SAC ¶71.)

Plaintiff fails to allege that there was an existing economic relationship between Plaintiff and SCKS with regards to the 2025 Lease. Plaintiff alleges that the parties added a Second Amendment to the 2000 Lease, and Plaintiff was aware that the option to extend was removed in the Second Amendment to the Lease on February 20, 2019, yet Plaintiff still proceeded with the agreement. (See SAC ¶14.) Because Plaintiff is not a party to the 2025 Lease, there could be no disruption or interference with the 2025 Lease between Plaintiff, SCKS, Printex, and the other Defendants. The 2025 Lease as a whole is a separate agreement independent of the 2000 Lease that Plaintiff, Printex, and SCKS were parties to. Plaintiff fails to allege that it is in privity to the 2025 Lease that was entered between SCKS and Defendants.

Accordingly, Moving Defendants’ demurrer to Plaintiff’s 7th cause of action is sustained without leave to amend.

“Intentional interference with prospective economic advantage has five elements: (1) the existence, between the plaintiff and some third party, of an economic relationship that contains the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentionally wrongful acts designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm proximately caused by the defendant’s action.” (Roy Allan Slurry Seal, Inc. v. American Asphalt South, Inc. (2017) 2 Cal.5th 505, 512.)

Plaintiff alleges Ben/Printex secretly went to SCKS more than two years before the end of the 2000 Lease, in 2023 and secured the 2025 Lease without informing or inviting Plaintiff. (SAC ¶74.) Plaintiff alleges it never knew SCKS and Ben and his family members were entering into the 2025 Lease; Plaintiff only found that Ben and his family had executed the 2025 Lease with SCKS when, in 2023, SCKS called Plaintiff into his office to inform Plaintiff about the 2025 Lease, only after the 2025 Lease had been entered into without Plaintiff. (SAC ¶74.) Plaintiff alleges the wrongful act is that Ben, through the use of his family and company, misappropriated a joint venture opportunity for himself. (SAC ¶74.)

Plaintiff alleges Defendants knew/were aware that Plaintiff was engaging in business dealings with the tenants that did and probably would have resulted in further an economic benefit to Plaintiff. (SAC ¶75.) Plaintiff alleges Ben and Printex interfered and usurped Plaintiff’s opportunity for themselves both financially and otherwise. (SAC ¶75.) Plaintiff alleges as a direct and proximate result of these Defendants’ conduct, Plaintiff suffered compensatory, general, and special damages in amounts to be proven at trial. (SAC ¶76.)

Plaintiff fails to allege it had an existing economic relationship with SCKS with regards to the 2025 Lease that was allegedly disrupted or interfered with by Defendants. (Roy Allan Slurry Seal, Inc., 2 Cal.5th at pg. 512.) Absent a contract between Plaintiff and SCKS there can be no grounds for an intentional interference with prospective economic advantage cause of action because Plaintiff is not a party to the 2025 Lease.

Accordingly, Moving Defendants’ demurrer to Plaintiff’s 8th cause of action is sustained without leave to amend.

An action for unfair business practices requires “an unlawful business practice or act which is an act or practice, committed pursuant to business activity, that is at the same time forbidden by law.” (Farmers Insurance Exchange v. Superior Court (1992) 2 Cal.4th 377, 383.)

Plaintiff alleges Defendants knowingly and intentionally engaged in unfair, unethical, and fraudulent business practices, for profit or otherwise, and have engaged in the following unlawful, unfair, deceptive, and misleading business practices, by, amongst other acts: misappropriating joint venture opportunities through fraud and deception, including entering into a new lease with SCKS behind Plaintiff’s back, misappropriating tenant rents, and renting the Premises for illegal activities, and conspiring to defraud Plaintiff. (SAC ¶81.)

Plaintiff alleges the foregoing wrongful activities have caused substantial harm, injury, and humiliation to Plaintiff and possibly others and had also caused harm to the recording system of the government. (SAC ¶82.) Plaintiff alleges that Defendants wrongfully acquired a new lease to effectively kick out Plaintiff by way of their unfair and unethical practices. (SAC ¶82.) Plaintiff alleges Defendants wrongfully acquired profits meant for the joint venture, for their own gain, by way of their unfair and unethical practices. (SAC ¶82.)

Accordingly, Moving Defendants’ demurrer to Plaintiff’s 9th cause of action is sustained without leave to amend.

Moving Defendants’ demurrer to Plaintiff’s SAC is sustained without 20 days leave to amend as to the 1st, 2nd, 3rd, 4th, 6th, 7th, 8th, and 9th causes of action.

Hon. Daniel M. Crowley

Judge of the Superior Court

[1] The Court notes Moving Defendants do not demur to the 5th cause of action on this basis.