Judge: Daniel S. Murphy, Case: 23STCV09930, Date: 2025-03-12 Tentative Ruling

Case Number: 23STCV09930    Hearing Date: March 12, 2025    Dept: 32

BACKGROUND

            On May 3, 2023, Plaintiff Alexander Khazai filed this action against numerous Defendants, asserting 16 causes of action arising from a business transaction. Plaintiff alleges that Defendants failed to properly compensate him for his services. Plaintiff filed the operative Second Amended Complaint on June 24, 2024, asserting claims for (1) breach of written contract, (2) breach of oral contract, (3) fraud, and (4) accounting.  

            On February 18, 2025, Defendant Sammy’s Warehouse filed the instant motion for judgment on the pleadings. Plaintiff filed his opposition on February 27, 2025. Defendant filed its reply on March 5, 2025.

LEGAL STANDARD

A motion for judgment on the pleadings may be made on the same grounds as those supporting a general demurrer, i.e., that the pleading fails to state facts sufficient to constitute a legally cognizable claim or defense. (Stoops v. Abbassi (2002) 100 Cal.App.4th 644, 650.) A motion for judgment on the pleadings performs the same function as a general demurrer, and hence attacks only defects disclosed on the face of the pleadings or by matters that can be judicially noticed. (Cloud v. Northrop Grumman Corp. (1999) 67 Cal.App.4th 995, 999.) Judgment on the pleadings must be denied where there are material factual issues that require evidentiary resolution. (Schabarum v. Calif. Legislature (1998) 60 Cal.App.4th 1205, 1216.) 

DISCUSSION

“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.) In the case of a corporate defendant, the plaintiff must “allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.” (Ibid.)

Plaintiff’s fraud allegations are attributed to the “Zablen Parties,” defined as Sammy Zablen and Sammy’s Warehouse. (SAC ¶ 3.) This is insufficient to satisfy the heightened requirement to plead fraud with specificity. First, “Zablen Parties” includes two parties, making it unclear who specifically made each alleged statement. Second, Sammy’s Warehouse is a corporate defendant, and Plaintiff’s generic reference to “Zablen Parties” fails to specify “the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.” (See Lazar, supra, 12 Cal.4th at p. 645.)

Plaintiff argues it should be inferred that “Zablen Parties” refers to Sammy Zablen speaking on behalf of Sammy’s Warehouse. However, no such inference can be drawn from the complaint, especially in light of the heightened requirement. “Zablen Parties” is defined as Sammy Zablen “and” Sammy’s Warehouse, not Sammy Zablen “on behalf of” Sammy’s Warehouse. (See SAC ¶ 3.) There may be any number of people authorized to speak on behalf of Sammy’s Warehouse besides Sammy Zablen.  

Plaintiff also argues that the alter ego and agency allegations make clear that Sammy Zablen was speaking on behalf of Sammy’s Warehouse. (See SAC ¶¶ 26-27.) However, these allegations state that all of the defendants are alter egos and agents of each other. They do not suggest that Sammy Zablen is the only person authorized to speak on behalf of Sammy’s Warehouse. Ultimately, these tangential references are insufficient under the heightened requirement for fraud. If Sammy Zablen made a particular statement on behalf of Sammy’s Warehouse, Plaintiff should simply allege that. Plaintiff should also allege specifically what the statement was, how it was made, when it was made, the person’s authority to speak, how the statement was false when made, and how Plaintiff relied on the statement.          

The allegations also lack the requisite specificity aside from the “Zablen Parties” issue. The complaint uses generic terms such as “promised,” “warranted,” and “represented” without specifying precisely how each statement was made. (See, e.g., SAC ¶¶ 42, 73.) Moreover, the SAC alleges that Defendants made promises “both orally and via written contract.” (SAC ¶ 74.) Promises made in contract are simply contractual terms, and the failure to fulfill the “promise” is simply a breach of contract. (See Erlich v. Menezes (1999) 21 Cal.4th 543, 551 [“conduct amounting to a breach of contract becomes tortious only when it also violates a duty independent of the contract arising from principles of tort law. An omission to perform a contract obligation is never a tort, unless that omission is also an omission of a legal duty”].)

In sum, the fraud claim is inadequately pled.

CONCLUSION

            Defendant Sammy’s Warehouse’s motion for judgment on the pleadings is GRANTED with leave to amend.