Judge: David A. Rosen, Case: 23GDCV00055, Date: 2023-04-21 Tentative Ruling

Case Number: 23GDCV00055    Hearing Date: April 21, 2023    Dept: E

Case No: 23GDCV00055
Hearing Date:  04/21/2023 – 10:00am

Trial Date: Unset

Case Name: VAHAN DER GRIGORIAN v. BENY SARKSIAN; E CHE PIZZA & PASTA & More LLC; and DOES 1-20

TENTATIVE RULING ON DEMURRER AND MOTION TO STRIKE

Moving Party: Defendant, Beny Sarksian

Responding Party: Plaintiff, Vahan Grigorian

(Oppo and Reply Submitted)

Proof of Service Timely Filed (CRC Rule 3.1300): Ok
16/21 Court Days Lapsed (CCP 1005(b)): Ok
Proper Address: Ok

RELIEF REQUESTED
Defendant, Beny Sarksian moves this Court for an order sustaining the demurrer, generally and specially, to the Complaint of Vahan Der Grigorian.

Defendant requests this Court to take judicial notice, pursuant to Evidence Code §452 and 453, of the existence of the date of the filing of this action, being January 11, 2023.

[The Court notes that moving Defendant indicates on his notice page that he is demurring generally and specially to the Complaint. However, as indicated on pages 3-4, Defendant only appears to be demurring to the first, second, fourth, fifth, sixth, eighth, and ninth causes of action. Defendant also confirms this on page 13 wherein Defendant states, “Defendant Sarksian has demurred to the First, Second, Fourth, Fifth, Sixth, Eighth, and Ninth Causes of Action of the Complaint.]

BACKGROUND
Plaintiff, Vahan Der Grigorian, filed his Complaint against Defendants on January 11, 2023. The Complaint alleges nine causes of action: (1) Damages for Breach of Oral Agreement, (2) Damages for Breach of Written Agreement, (3) Damages for Breach of Fiduciary Duty, (4) Damages for Fraud, (5) Damages for Fraud, (6) Promissory Estoppel, (7) Accounting, (8) Damages for Unjust Enrichment, and (9) Dissolution of Partnership.

The first through sixth causes of action are alleged only against Defendant Beny Sarksian. The seventh through ninth causes of action are alleged against all Defendants.

This case arises from a disagreement between Plaintiff and Defendants with respect to an alleged restaurant business agreement.

PROCEDURAL
Meet and Confer
A party filing a demurrer “shall meet and confer in person or by telephone 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.”  (Code Civ. Proc., §430.41, subd. (a).)  “The parties shall meet and confer at least five days before the date the responsive pleading is due. If the parties are not able to meet and confer at least five days prior to the date the responsive pleading is due, the demurring party shall be granted an automatic 30-day extension of time within which to file a responsive pleading, by filing and serving, on or before the date on which a demurrer would be due, a declaration stating under penalty of perjury that a good faith attempt to meet and confer was made and explaining the reasons why the parties could not meet and confer.”  (Code Civ. Proc., §430.41, subd. (a)(2).) Failure to sufficiently meet and confer is not grounds to overrule or sustain a demurrer. (Id., §430.41(a)(4).)

Here, moving party submitted the declaration of Jay Stein which alleged a meet and confer by telephone. However, an agreement was not reached. (Decl. Stein p.1.)

LEGAL STANDARDS FOR DEMURRERS
Demurrer – Sufficiency
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.)  The court “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law ….”  (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.)  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 pleadings alone and not the evidence or other extrinsic matters; therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.  (Code Civ. Proc., §§ 430.30, 430.70.)  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.) 

The general rule is that the plaintiff need only allege ultimate facts, not evidentiary facts.  (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550.)  “All that is required of a plaintiff, as a matter of pleading … is that his complaint set forth the essential facts of the case with reasonable precision and with sufficient particularity to acquaint the defendant with the nature, source and extent of his cause of action.”  (Rannard v. Lockheed Aircraft Corp. (1945) 26 Cal.2d 149, 156-157.) 

On demurrer, a trial court has an independent duty to “determine whether or not the … complaint alleges facts sufficient to state a cause of action under any legal theory.”  (Das v. Bank of America, N.A. (2010) 186 Cal.App.4th 727, 734.)  “A demurrer does not lie to a portion of a cause of action.” (PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1682.)  “Generally it is an abuse of discretion to sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment.”  (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.)

Demurrer – Uncertainty
A special demurrer for uncertainty, CCP section 430.10(f), is disfavored and will only be sustained where the pleading is so bad that defendant cannot reasonably respond—i.e., cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him/her.  (Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.)  Moreover, even if the pleading is somewhat vague, “ambiguities can be clarified under modern discovery procedures.” (Ibid.)

ANALYSIS
First (Damages for Breach of Oral Contract) and Second (Damages for Breach of Written Contract) Causes of Action
Defendant demurred to the first and second causes of action on grounds of uncertainty, failure to state facts sufficient to constitute a cause of action, and on grounds it is not discernable whether the alleged agreement is written or oral. Defendant also demurred to the first cause of action on the basis that it is barred by the statute of limitations.

To state a cause of action for breach of contract, Plaintiff must allege “(1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) resulting damages to the plaintiff.”  (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)  A cause of action for breach of contract is subject to demurrer if “it cannot be ascertained from the pleading whether the contract is written, is oral, or is implied by conduct.”  (Code Civ. Proc., §430.10(g).)

Here, although Plaintiff’s first and second causes of action explicitly note that the first cause of action is an oral contract (¶17) and that the second cause of action is a written contract (¶33), problematic with this is that both causes of action incorporate paragraphs 1-15. Paragraphs 1-15 reference “the parties’ agreement” several times. However, those references don’t indicate whether that agreement is written or oral, and considering the fact that both the first and second causes of action are for two different types of contracts, yet they incorporate this same alleged agreement in Paragraphs 1-15, the Court finds these allegations uncertain.

The Court will not address the Defendant’s other arguments as to these two causes of action except Defendant’s statute of limitations argument as to the first cause of action.

Statute of Limitations
Defendant argues that the breach of oral contract is barred by the statute of limitations because the Complaint alleges that the breach occurred in 2019 and this Complaint was not filed until January 11, 2023.

Breach of oral contract claims are subject to a two-year statute of limitations. (See Code Civ. Proc., § 339(1).)  

The general rule for defining the accrual of a cause of action sets the date as the time when, under the substantive law, the wrongful act is done, or the wrongful result occurs, and the consequent liability arises. (Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 397.) An exception to the general rule for defining the accrual of a cause of action is the discovery rule. (Id.) It postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action. (Id.) The plaintiff discovers the cause of action when he at least suspects a factual basis, as opposed to a legal theory, for its elements, even if he lacks knowledge thereof, when, simply put, he at least suspects that someone has done something wrong to him. (Id.) In order to rely on the discovery rule for delayed accrual of a cause of action, a plaintiff whose complaint shows on its face that his claim would be barred without the benefit of the discovery rule must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence. (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 808.)

Plaintiff alleged that Defendant breached the parties’ oral agreement beginning in 2019. (Compl. ¶23.) However, Plaintiff also alleged, “This breach, by Defendants’ and each of them, as alleged herein, of the oral agreement between Plaintiff and Defendant-Sarksian, did not become known to Plaintiff until mid-2022 when he became aware that the rent on the restaurant had been delinquent for months.” (Compl. ¶27.)

Here, Plaintiff’s claim for breach of oral agreement does in fact appear as if it would be barred based on the face of the Complaint. While Plaintiff attempts to plead facts showing it can rely on the delayed discovery rule, Plaintiff does not fully address each factor as cited in Fox v. Ethicon Endo-Surgery, Inc. In order to rely on the discovery rule for delayed accrual of a cause of action, a plaintiff whose complaint shows on its face that his claim would be barred without the benefit of the discovery rule must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence. (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 808.)

TENTATIVE RULING FIRST AND SECOND CAUSES OF ACTION
Defendant’s demurrer to the first and second causes of action are sustained on grounds of uncertainty. Defendant’s demurrer as to the first cause of action is sustained for failure to fully plead the delayed discovery rule when the claim appeared barred on its face by the statute of limitations on its face. 20 days’ leave to amend is GRANTED as to both causes of action.

Fourth Cause of Action – Damages for Fraud – Intentional Misrepresentation
Legal Standard Fraud Intentional Misrepresentation
“ ‘The elements of fraud, which gives rise to the 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.’ “ (Small v. Fritz Companies, Inc. (2003) 30Cal.4th  167, 173 citing Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.)

(1)   Misrepresentation

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, 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.)

Here, Defendant is not a corporate defendant; however, Plaintiff still did not meet the specificity requirements of alleging facts showing how, when, where, to whom, and by what means the representations were made.

Plaintiff simply alleged, “When in 2019, Defendant-Sarksian represented to Plaintiff that Defendant-Sarksian would operate the parties' restaurant business and pay all creditors, including Plaintiff, from the proceeds of the business, he knew that that representation was false.” (Compl. ¶53.)

The Court will not address the remaining elements of fraud, as Plaintiff at the very least did not sufficiently plead the first element.

TENTATIVE RULING FOURTH CAUSE OF ACTION
Defendant’s demurrer to the fourth cause of action for fraud-intentional misrepresentation is sustained for failure to allege facts sufficient to constitute the cause of action. Plaintiff is granted 20 days’ leave to amend.

Fifth Cause of Action – Damages for Fraud – Negligent Misrepresentation
“The elements of negligent misrepresentation are well established. A plaintiff must prove the following in order to recover. ‘Misrepresentation of a past or existing material fact, without reasonable ground for believing it to be true, and with intent to induce another’s reliance on the fact misrepresented; ignorance of the truth and justifiable reliance on the misrepresentation by the party to whom it was directed; and resulting damage…’” (Hydro-Mill Co., Inc. v. Hayward, Tilton & Rolapp Ins. Associates, Inc. (2004) 115 Cal.App.4th 1145, 1154.)

(1)Misrepresentation

Plaintiff alleges as follows, “When in 2019, Defendant-Sarksian represented to Plaintiff that Defendant-Sarksian would operate the parties' restaurant business and pay all creditors, including Plaintiff, from the proceeds of the business, he should have known that that representation was false.” (Compl. ¶65.)

Defendant first argues that there is uncertainty in the Complaint based on ¶53 of the fraud cause of action alleging “he knew that the representation was false,” and ¶65 of the negligent misrepresentation cause of action alleging “he should have known that the representation was false”. Defendant argues there is uncertainty because ¶53 is incorporated in the negligent misrepresentation cause of action. The Court finds this argument unavailing.

Defendant also argues as follows:

Moreover, negligent misrepresentation is a form of fraud and, therefore, requires the same specificity as the intentional misrepresentation cause of action. Continental Airlines, Inc. v. McDormell Douglas Corp. (1989) 216 Cal App 3d 388, 403-404. The cause of action must allege the "how, when, where, to whom, and by what means the representations were tendered." Lazar, supra, at p. 645. The Complaint's failure to do so makes it subject to demurrer for failure to state facts sufficient to constitute a cause of action. (CCP §430.10(e))

Problematic with Plaintiff’s Opposition is that Plaintiff does not address Defendant’s argument.

As to the Defendant’s argument, the Court first notes that the Continental case that Defendant cited does not support its argument that Plaintiff must allege how, when, where, to whom, and by what means the representations were tendered. The portion of Continental that Defendant cited simply stood for the proposition that negligent misrepresentation is a form of fraud. This case did not mention anything about the specificity requirements for pleading negligent misrepresentation. 

Further, problematic with Defendant citing Lazar is that Lazar did not deal with negligent misrepresentation. Lazar dealt with fraudulent inducement of an employment contract.

At the very least, there appears to be conflicting authority as to whether or not the specificity in pleading fraud requirements apply in a negligent misrepresentation cause of action. In Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, the Second District affirmed the trial court’s judgment dismissing borrowers’ complaint in connection with a lender’s foreclosure of a residential mortgage loan after sustaining lender’s demurrer.  In Hamilton, the Second District treated the claims for fraud and negligent misrepresentation together, and set forth the particularity requirements referring to fraud and deceit claims, but did find the demurer had been properly sustained to both causes of action on the ground the conclusory allegations were not specific enough to state a claim for fraud. (Hamilton, at 1615. ) “ Plaintiffs' fraud and negligent misrepresentation claims are likewise defective… The particularity requirement “ ‘necessitates pleading facts which “show how, when, where, to whom, and by what means the representations were tendered.” ’ [Citation.] A plaintiff's burden in asserting a fraud claim against a corporate employer is even greater. In such a case, 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.)” . (Hamilton, at 1614.)

However, Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184 indicates that the specificity requirements may not apply here for negligent misrepresentation. “California courts have never decided whether the tort of negligent misrepresentation, alleged in the complaint here, must also be pled with specificity…because of the potential for false claims, we hold that a complaint for negligent misrepresentation in a holder’s action should be pled with the same specificity required in a holder’s action for fraud. (We express no view on whether this pleading requirement would apply in other actions for negligent misrepresentation.)” (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.)

Here, although this action does not appear to be a holder’s action for fraud; the Court is persuaded by the holding in Hamilton, supra, that the specificity requirements apply to this negligent misrepresentation action, but Plaintiff did allege the claimed misrepresentation with sufficient specificity.

(2) Without Reasonable ground for believing it to be true

Here, Plaintiff alleged, “he [Defendant] should have known that that representation was false.” (Compl. ¶65.

Here, Plaintiff alleged this element of negligent misrepresentation.

(3) Intent to induce another’s reliance on the fact misrepresented
Here, Plaintiff alleged, “At the time Defendant-Sarksian made the representations as alleged herein, Defendant-Sarksian intended that Plaintiff rely on those representations and allow himself to become a partner with Defendant-Sarksian, give him substantial funds towards the joint business, expose Plaintiff to liability as a joint venturer with Defendant-Sarksian, and provide for himself a source of funds.” (Compl. ¶68.)

Here, Plaintiff alleged this element of negligent misrepresentation.

(4) Ignorance of the truth and justifiable reliance on the misrepresentation by the party to whom it was directed
Here, Plaintiff alleged, “Plaintiff could not, through the exercise of reasonable diligence, have discovered that the representations as alleged herein were false. Had Plaintiff known that the representations made by Defendant-Sarksian, as alleged herein, were false, he would not have entered into the oral and written contracts as alleged herein nor provide Defendant-Sarksian funds for the parties’ joint venture.”

Here, Plaintiff alleged this element of negligent misrepresentation.

(5) Resulting Damage

Here, Plaintiff alleged, “As a direct and proximate result of Defendant-Sarksian’s fraud, as alleged herein, Plaintiff has been damaged in an amount within the jurisdictional limit of this court, in excess of $25,000.00, all according to proof at trial. The acts and omissions of Defendant-Sarksian, as alleged herein were oppressive, fraudulent and/or malicious, as defined by California Civil Code $ 3294, so as to justify the imposition of punitive damages, in an amount to be proven at trial.” (Compl. ¶74-75.)

Here, Plaintiff alleged this element of negligent misrepresentation.

TENTATIVE RULING FIFTH CAUSE OF ACTION:  Demurrer hereto is overruled.

Sixth Cause of Action – Promissory Estoppel
“The elements of a promissory estoppel claim are (1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) [the] reliance must be both reasonable and foreseeable; and (4) detriment-the party asserting the estoppel must be injured by his reliance.” (Jones v. Wachovia Bank (2014) 230 Cal.App.4th 935, 945.)

“Because promissory estoppel is an equitable doctrine to allow enforcement of a promise that would otherwise be unenforceable, courts are given wide discretion in its application. (US Ecology, Inc. v. State of California (2005) 129 Cal.App.4th 887, 902.)

Defendant argues in relevant part:

Since detrimental reliance is an essential feature of promissory estoppel, that doctrine cannot be invoked where the promisee's reliance was bargained for, the law of consideration being applicable in such a case; "it is only where the promisee's reliance was unbargained for that there is room for the application of the doctrine of promissory estoppel." Healy v. Brewster (1963) 59 Cal. 2d 455, 463.

The only factual scenario alleged in Plaintiff's Complaint is that Plaintiff and Defendant Sarksian bargained for their business relationship; entered into either or both an oral agreement and a written agreement governing the terms of the business partnership. Defendant Sarksian did not gratuitously promise to do something upon which Plaintiff relied. According to Plaintiff, all of the promises were mutual promises, bargained-for contractual promises. Plaintiff has failed to state facts sufficient to constitute a cause of action.

(Def. Mot. p.11-12.)

Here, the Court does not find Defendant’s argument convincing.

Although a cause of action for promissory estoppel is inconsistent with a cause of action for breach of contract based on the same facts (see, e.g. Money Store Investment Corp. v. Southern Cal. Bank (2002) 98 Cal.App.4th 722, 732, 120 Cal.Rptr.2d 58), “[w]hen a pleader is in doubt about what actually occurred or what can be established by the evidence, the modern practice allows that party to plead in the alternative and make inconsistent allegations.” (Mendoza v. Continental Sales Co. (2006) 140 Cal.App.4th 1395, 1402, 45 Cal.Rptr.3d 525; see also Crowley v. Katleman (1994) 8 Cal.4th 666, 690, 34 Cal.Rptr.2d 386, 881 P.2d 1083.)

(1) a promise clear and unambiguous in its terms

Here, Plaintiff alleged, “Defendant-Sarksian made clear and unambiguous promises to Plaintiff in 2019, as alleged herein.” (Compl. ¶77.)

Although ¶76 incorporated ¶1-75, it is unclear as to what promises specifically made.

This element was not sufficiently alleged.

(2) reliance by the party to whom the promise is made
Here, Plaintiff sufficiently alleged this element by stating, “In reliance on the clear and unambiguous promises made by Defendant-Sarksian, to Plaintiff, as alleged herein, Plaintiff expended thousands of dollars in creating, operating and maintaining what Plaintiff believed to be a restaurant business and exposed himself to liability from creditors of the restaurant business. On information and belief, it is alleged that from in or about July, 2019 through the present, in reliance on the promises of Defendant-Sarksian, Plaintiff has made substantial financial contributions to create, operate and manage the parties' joint restaurant.” (Compl ¶78-79.)

(3) [the] reliance must be both reasonable and foreseeable

Plaintiff failed to allege these two elements of promissory estoppel.

(4) detriment-the party asserting the estoppel must be injured by his reliance

Here, Plaintiff  sufficiently alleged this element by stating, “As a direct result of Defendant-Sarksian's failure and refusal to honor his promises to Plaintiff, Plaintiff has been damaged in an amount within the jurisdictional limit of this Court, in excess of $25,000.00, all according to proof at trial.” (Compl. ¶83.)

TENTATIVE RULING SIXTH CAUSE OF ACTION
Defendant’s demurrer as to the sixth cause of action is sustained with 20 days’ leave to amend.

Eighth Cause of Action – Unjust Enrichment
Defendant argues as follows:

"The elements of an unjust enrichment claim are the 'receipt of a benefit and [the] unjust retention of the benefit at the expense of another." Peterson v. Celico Partnership (2008) 164 Cal.App.4th 1583, 1593 (quoting Lectrodryer v. SeoulBank (2000) 77 Ca1.App.4th 723, 726).

 "As a matter of law, an unjust enrichment claim does not lie where the parties have an enforceable express contract." Durell v. Sharp Health Care, (2010) 183 Ca1.App.4th 1350, 1370.

 Because, according to the Complaint, the parties bargained for their arrangement, any damages to be awarded are awardable to a breach of contract cause of action, either as direct damages or restitution. Thus, demurrer must be sustained to the cause of action for "unjust enrichment," And, because the unjust enrichment cause of action cannot co-exist with the factual allegations of a breached contract, the demurrer must be sustained without leave to amend.

(Def. Mot. p. 12.)

In Opposition, Plaintiff argues:

An unjust enrichment cause of action can co-exist with a breach of contract cause of action. (Hernandez v. Lopez (2009) 180 Cal.App.4th 932, 939.)

Therefore, all Plaintiff must show, to have the instant demurrer overruled, is to allege the necessary elements of a cause of action for unjust enrichment. The Plaintiff did satisfy his burden as follows:

- Promise made by Defendant (Complaint ¶90; ¶89 incorporating the previous allegations regarding the promise made to induce action on the part of Plaintiff)

 - The promise induced Plaintiff to act as intended by Defendant (Complaint ¶91; ¶89 incorporating the previous allegations regarding the promise made to induce action on the part of Plaintiff)

- Injustice will result if the promise is not enforced (Complaint ¶94; ¶89 incorporating the previous allegations regarding the promise made to induce action on the part of Plaintiff)

 -Damage(Complaint¶95)

(Pl. Oppo. p.6.)

When appellate decisions are in conflict on a point, the court exercising inferior jurisdiction must choose between the conflicting decisions. (Auto Equity Sales, Inc. v. Superior Court of Santa Clara County (1962) 57 Cal.2d 450, 456.)

“The elements of an unjust enrichment claim are the receipt of a benefit and the unjust retention of the benefit at the expense of another. (Peterson v. Cellco Partnership (2008) 164 Cal.App.4th 1583, 1593.)

“There is no cause of action in California for unjust enrichment.” (Everett v. Mountains Recreation & Conservancy Auth. (2015) 239 Cal.App.4th 541, 553 citing Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th 779, 793.) “Unjust enrichment is synonymous with restitution.” (Levine v. Blue Shield of California (2010) 189 Cal.App.4th 189 Cal.App.4th 1117, 1138.)

In California, there is no cause of action for unjust enrichment. (See Rutherford Holdings LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 231; Levine v. Blue Shield of California (2010) 189 Cal.App.4th 1117, 1138.) The Court notes that while Plaintiff cites a case recognizing an unjust enrichment claim under California law, the more recent cases of Rutherford Holdings and Levine have confirmed that unjust enrichment is not a cause of action in California.  “Unjust enrichment is not a cause of action, however, or even a remedy, but rather a general principle, underlying various legal doctrines and remedies…it is synonymous with restitution.” (Rutherford Holdings LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 231.)

“Under the law of restitution, an individual is required to make restitution if he or she is unjustly enriched at the expense of another. A person is enriched if the person receives a benefit at another’s expense. However, the fact that one person benefits another is not, by itself, sufficient to require restitution. The person receiving the benefit is required to make restitution only if the circumstances are such that, as between the two individuals, it is unjust for the person to retain it.” (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1370 citing McBride v. Boughton (2004) 123 Cal.App.4th 379, 388.)

“There are several potential bases for a cause of action seeking restitution. For example, restitution may be awarded in lieu of breach of contract damages when the parties had an express contract, but it was procured by fraud or is unenforceable or ineffective for some reason.” (McBride v. Boughton (2004) 123 Cal.App.4th 379, 388.) Thus, a party to an express contract can assert a claim for restitution based on unjust enrichment by alleging in that cause of action that the express contract is void or was rescinded. (Rutherford Holdings LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 231 citing Lance Camper Manufacturing Corp.v. Republic Indemnity Co. (1996) 44 Cal.App.4th 194, 203.)

Here, even if this Court were to construe Plaintiff’s unjust enrichment cause of action as a breach of contract claim seeking restitution, Plaintiff failed to statute sufficient facts sufficient to constitute a cause of action for both of its contract claims. Further, the Complaint did not allege that the express contract was void or rescinded. Further, the Complaint did not seek restitution.

“Alternatively, restitution may be awarded where the defendant obtained a benefit from the plaintiff by fraud, duress, conversion or similar conduct. In such cases, the plaintiff may choose not to sue in tort, but instead to seek restitution on a quasi-contract theory (an election referred to at common law as “waiving the tort and suing in assumpsit”). In such cases, where appropriate, the law will imply a contract (or rather, a quasi-contract), without regard to the parties’ intent, in order to avoid unjust enrichment.” (McBride v. Boughton (2004) 123 Cal.App.4th 379, 388.)

Here, Plaintiff does not allege in the Complaint that it is alleging a cause of action based on a quasi-contract theory, and the Plaintiff does not allege it is seeking restitution.

TENTATIVE RULING EIGHTH CAUSE OF ACTION

Defendant’s demurrer as to the eighth cause of action is sustained with 20 days’ leave to amend. On amendment, Plaintiff may seek, if properly pled, restitution with any underlying causes of action that permit Plaintiff to seek restitution and/or Plaintiff may attempt to properly assert a cause of action for unjust enrichment.

Ninth Cause of Action – Dissolution of Defendant LLC
Defendant demurs to the ninth cause of action on grounds of uncertainty and failure to statute sufficient facts.

Defendant argues:

In the Ninth Cause of action, Plaintiff seeks a court-ordered involuntary dissolution of the parties' limited liability company.

Such a cause of action is one entirely governed by statute — Corporations Code § 17351. Yet, nowhere in the Ninth Cause of action is it alleged that the dissolution is being sought pursuant to Corporations Code §17351, and nowhere in the Ninth Cause of Action is it alleged the grounds under which the dissolution is sought. Being put on notice of the precise statutory grounds is essential to afford a defendant the basis to respond appropriately. Therefore, the Ninth Cause of Action fails to state facts sufficient to constitute a cause of action and it is uncertain, and demurrer must be sustained to it.

(Def. Mot. p. 13.)

The Court notes that CA Corporations Code, section 17351 was repealed as of 2014.

In Opposition, Plaintiff argues:

What Defendant believes is the basis for a demurrer to the Dissolution of partnership cause of action is that, even though all necessary elements are present, Plaintiff did not cite to a corporation code. What is being requested is clear. Plaintiff desires that the entity in which he has an equal interest to Defendant be dissolved and a full accounting, by Defendant who holds all the corporate records, be made upon dissolution.

In California, pleading allegations are liberally construed, with a view to substantial justice. (California Code of Civil Procedure §452.) To request that the parties remain in a partnership which is not functioning as intended, through Defendant’s malfeasance, does not lead to any justice, let alone substantial justice.

While overruling the demurrer to this cause of action is proper, Plaintiff has no objection to amending this cause of action to include the code section Defendant wishes to see in the pleading.

(Pl. Oppo. p. 6.)

“Corporations Code section 4651(d) permits the dissolution where there is ‘internal dissension and two or more factions of shareholders . . . are so deadlocked that its business cannot longer be conducted with advantage to its shareholders.’ (Emphasis ours.) These requirements are in the conjunctive, therefore both factual elements must exist to establish a basis for a dissolution. Both must be pleaded and proved (Buss v. J. O. Martin Co., 241 Cal.App.2d 123, 135—136, 50 Cal.Rptr. 206).” (Fuimaono v. Samoan Congregational etc. Church of Oceanside (1977) 66 Cal.App.3d 80, 84.)

TENTATIVE RULING NINTH CAUSE OF ACTION

The Demurrer hereto is sustained with 20 days’ leave to amend.