Judge: Daniel S. Murphy, Case: 23STCV00624, Date: 2023-05-17 Tentative Ruling

Case Number: 23STCV00624    Hearing Date: May 17, 2023    Dept: 32

BACKGROUND

            On January 11, 2023, Plaintiff Aleksandr Gruzman filed this action against Defendants David Notowitz, Michael Masarof, Matthew Gabler, and National Center for Audio and Video Forensics, Inc., asserting (1) fraud, (2) negligent misrepresentation, (3) unfair competition, (4) declaratory and injunctive relief, and (5) professional negligence.

            Plaintiff is an attorney who hired Defendants to prepare and enhance certain deposition exhibits. Defendants did not do so adequately, resulting in this action. Plaintiff alleges that Defendants fraudulently induced Plaintiff into paying for services and providing confidential information.

            On March 17, 2023, Defendants filed the instant demurrer and motion to strike.

LEGAL STANDARD

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice. (Code Civ. Proc., § 430.30, subd. (a).) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (Ibid.) The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action. (Hahn, supra, 147 Cal.App.4th at 747.)

Any party, within the time allowed to respond to a pleading, may serve and file a notice of motion to strike the whole or any part of that pleading. (Code Civ. Proc., § 435, subd. (b).) The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike (1) any irrelevant, false, or improper matter inserted in any pleading and (2) all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Id., § 436.) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Id., § 437.)

MEET AND CONFER

Before filing a demurrer or a motion to strike, the demurring or moving party is required to meet and confer with the party who filed the pleading demurred to or the pleading that is subject to the motion to strike for the purposes of determining whether an agreement can be reached through a filing of an amended pleading that would resolve the objections to be raised in the demurrer. (Code Civ. Proc., §§ 430.41, 435.5.) The Court notes that Defendant has complied with the meet and confer requirement. (See Dzharatanyan Decl. ¶ 3.)

DISCUSSION

I. Fraud

            “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, quoting Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) Fraud must be pleaded with specificity rather than with general and conclusory allegations. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) The specificity requirement means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made. (Lazar, supra, 12 Cal.4th at p. 645.)

            The complaint alleges that Defendants advertise themselves as video and audio experts capable of enhancing recordings. (Compl. ¶ 8.) Around August 21, 2022, Defendants allegedly promised that they would inform Plaintiff about “what is possible—and what is not possible and do an assessment of the evidence and determine what we can and can’t do enhance and give you the results you need.” (Ibid.) In an email on August 24, 2022, Defendant Notowitz stated they would charge for an initial evaluation to provide Plaintiff with a quote and determine what can and cannot be done. (Id., ¶ 10.) Defendants never provided a detailed analysis of what could and could not be done and simply issued a quote for $9,000. (Id., ¶ 12.) Defendants’ work was allegedly subpar, resulting in grainy and blurry images. (Ibid.) Defendants allegedly did not intend to perform the promises they made and also concealed that they were understaffed—allegedly, “everyone was on vacation,” and Defendant Notowitz was travelling abroad at the time. (Id., ¶¶ 9, 13.) Defendants allegedly made these misrepresentations to induce Plaintiff to pay money and disclose confidential information. (Id., ¶ 14.)  

            Defendants’ alleged promise to provide a detailed analysis of possible work and to provide a quote has no logical connection to Plaintiff’s alleged reliance—being induced into retaining Defendants for the video enhancement. The complaint reveals on its face that after Defendants had already failed to provide the promised analysis, Plaintiff nonetheless decided to hire them. (See Compl. ¶ 12.) Plaintiff alleges that he “was under time pressure to use the exhibit in a deposition.” (Ibid.) However, that is not Defendants’ doing and does not contribute to the alleged fraud. Ultimately, Plaintiff was already aware that Defendants had broken their promise by the time Plaintiff decided to retain their services. Therefore, Plaintiff could not have been induced into hiring Defendants.

            Moreover, the general advertising as competent video and audio enhancers constitutes mere puffery and is not actionable. (See Consumer Advocates v. Echostar Satellite Corp. (2003) 113 Cal.App.4th 1351, 1361 [generic statements about work quality “are not factual representations that a given standard is met. Instead, they are boasts, all-but-meaningless superlatives . . . which no reasonable consumer would take as anything more weighty than an advertising slogan”].) And Defendants had no duty to keep customers apprised of the whereabouts of their staff; therefore, the failure to inform Plaintiff that employees were on vacation is not actionable either. (See Lopez v. Nissan North America, Inc. (2011) 201 Cal.App.4th 572, 596 [“misrepresentation claim may be based on an omission, but it must be an omission of fact one has a duty to disclose”].) Therefore, the demurrer is SUSTAINED as to the first and second causes of action.

II. Unfair Competition

Business and Professions Code section 17200 prohibits unlawful, unfair, or fraudulent business acts or practices. Each of the three prongs is an independent basis for relief. (Smith v. State Farm Mutual Automobile Insurance Co. (2001) 93 Cal.App.4th 700, 718.) Unlawful conduct is defined as any practice forbidden by law. (Farmers Ins. Exchange v. Superior Court (1992) 2 Cal.4th 377, 383.) UCL actions alleging unlawful conduct “borrow” from other statutes or common law causes of action outside Section 17200. (Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1383.)

As discussed above, Plaintiff has not pleaded a valid fraud claim. Therefore, the demurrer is SUSTAINED as to the third cause of action.

III. Professional Negligence

The elements of negligence are: (1) a duty to exercise ordinary care; (2) breach of that duty; (3) causation; and (4) damages. (Ladd v. County of San Mateo (1996) 12 Cal.4th 913, 917.) In the context of professional negligence, the duty is “to use the skill and care that a reasonably careful professional operating in the field would have used in similar circumstances.” (Thomson v. Canyon (2011) 198 Cal.App.4th 594, 604.)

The facts in the complaint, discussed above, sufficiently establish that Defendants failed to exercise ordinary care in handling the deposition exhibits they were charged with enhancing. Defendants’ only arguments against this claim are that it duplicates the other claims and that Plaintiff is attempting to create enhanced liability by labeling the claim “professional” negligence.

However, negligence is distinct from fraud; therefore, the claim is not duplicative. The fact that Plaintiff has labeled the claim “professional negligence” has no bearing on whether the complaint alleges sufficient facts to state a claim for negligence. There is no indication that Plaintiff is seeking enhanced liability. The demurrer is OVERRULED as to the fifth cause of action.

IV. Punitive Damages

“In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.” (Civ. Code, § 3294, subd. (a).) “‘Malice’ means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (Id., subd. (c)(1).) “‘Oppression’ means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Id., subd. (c)(2).) Fraud is “intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.” (Id., subd. (c)(3).)

            As discussed above, Plaintiff has failed to allege a fraud claim. Negligence does not support punitive damages. (See Nolin v. National Convenience Stores, Inc. (1979) 95 Cal.App.3d 279, 285-286 [“Conduct classified only as unintentional carelessness, while it may constitute negligence or even gross negligence, will not support an award of punitive damages”].) Therefore, punitive damages are stricken.

V. Attorneys’ Fees

“Except as attorney’s fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties . . . .” (Code Civ. Proc., § 1021.) “Upon motion, a court may award attorneys’ fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement, or of enforcement by one public entity against another public entity, are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any.” (Id., § 1021.5.)

Plaintiff argues that he is entitled to attorneys’ fees under Section 1021.5 because this is an action to enforce an important right affecting the public interest. However, this case arises from a private transaction and does not confer a significant benefit to the general public or a large class of persons. (See Serrano v. Stefan Merli Plastering Co., Inc. (2011) 52 Cal.4th 1018, 1026 [“section 1021.5 was not intended to impose fees on an individual seeking a judgment that determines only his or her private rights”].) Therefore, attorneys’ fees are stricken.

CONCLUSION

            Defendants’ demurrer is SUSTAINED without leave to amend as to the first, second, and third causes of action and OVERRULED as to the fifth cause of action. Defendants’ motion to strike is GRANTED with leave to amend.          

Furthermore, it appears that Plaintiff has suffered less than $25,000 in damages. (See Compl. ¶ 12 [Plaintiff was charged $9,000 for Defendants’ services].) A Walker hearing is set for June 7, 2023 for Plaintiff to demonstrate why this case should not be in a court of limited jurisdiction.