Judge: David B. Gelfound, Case: 23CHCV03291, Date: 2024-05-02 Tentative Ruling

Counsel wishing to submit on a tentative ruling may inform the clerk or courtroom assistant in North Valley Department F49, 9425 Penfield Ave., Chatsworth, CA 91311, at (818) 407-2249.  Please be aware that unless all parties submit, the matter will still be called for hearing and may be argued by any appearing/non-submitting parties. If the matter is submitted on the court's tentative ruling by all parties, counsel for moving party shall give notice of ruling. This may be done by incorporating verbatim the court's tentative ruling. The tentative ruling may be extracted verbatim by copying and pasting, as unformatted text, from the Los Angeles Superior Court’s website, http://www.lasuperiorcourt.org.
All hearings on law and motion and other calendar matters are generally NOT transcribed by a court reporter unless one is provided by the party(ies). 

Case Number: 23CHCV03291    Hearing Date: May 2, 2024    Dept: F49

LOS ANGELES SUPERIOR COURT

NORTH VALLEY DISTRICT

DEPARTMENT F49

DEMURRER

Motion filed: 3/25/24

MOVING PARTY: Defendant The Matt Horn Group (“Defendant”)

RESPONDING PARTY: None

NOTICE: OK 

RELIEF REQUESTED: An order from this Court granting Defendant’s demurrer to the complaint.

TENTATIVE RULING: The demurrer is SUSTAINED with LEAVE TO AMEND.

BACKGROUND

On October 30, 2023, Plaintiff Rodolfo Arreola (“Plaintiff”) initiated this action against Defendant and Does 1-10. The Complaint alleges three causes of action: (1) Negligence, (2) Conversion, and (3) Unfair Business Practices.

On March 25, 2024, Defendant filed the instant Demurrer (the “Demurrer”).

No opposition papers have been received by the Court.

ANALYSIS

“It is black letter law that a demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.) A general demurrer is proper, and typically used, where the plaintiff fails to allege “facts sufficient to constitute a cause of action.” (Code Civ. Proc., § 430.10, subd. (e); Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 1004.)

“The sufficiency of a cause of action is evaluated by presuming all of the material factual allegations in the complaint are true.” (Aubry v. TriCity Hospital Dist. (1992) 2 Cal 4th 962, 966 – 967 (Aubry).) In ruling on a demurrer, a court may consider facts that are properly subject to judicial notice.” (Arroyo v. Plosay, 225 Cal. App. 4th 279.) In ruling on a demurrer, the allegations of the complaint must be liberally construed, with a view to substantial justice between the parties. (Glennen v. Allergan, Inc. (2016) 247 Cal.App.4th 1, 6.) Nevertheless, while "[a] demurrer admits all facts properly pleaded, [it does] not [admit] contentions, deductions or conclusions of law or fact." (George v. Automobile Club of Southern California (2011) 201 Cal.App.4th 1112, 1120, 135.) Additionally, “[a] complaint otherwise good on its face is subject to demurrer when facts judicially noticed render it defective.” (Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6.)

“It is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. (Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 103.) And it is an abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)” Aubry, supra, 2 Cal. 4th at 967.)

A.    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., section 430.41(a).) A failure to meet and confer does not constitute grounds to sustain or overrule a demurrer. (See Code Civ. Proc., sections 430.41 (a)(4).)

On February 26, 2024, Defendant’s counsel telephonically met and conferred with Plaintiff, discussing issues raised in the Demurrer. (Landaverde Decl., ¶ 4.) A few days later, a second meet and confer session took place during which Plaintiff refused to amend the Complaint, resulting in no resolution. (Id., ¶ 5.)

Therefore, the Court concludes that the meet and confer requirement has been satisfied.

B.     First Cause of Action – Negligence

'The elements of a cause of action for negligence are well established. They are "(a) a legal duty to use due care; (b) a breach of such legal duty; [and] (c) the breach was the proximate or legal cause of the resulting injury [damages]." (Laddv. County of San Mateo (1996) 12 Cal.4th 913, 917.) The absence of any one of the elements is fatal to a negligence claim. (See Gilmer v. Ellington (2008) 159 Cal.App.4th 190, 195.)

            “Ordinarily, negligence may be alleged in general terms, without specific facts showing how the injury occurred, but there are ‘limits to the generality with which a plaintiff is permitted to state his cause of action, and ... the plaintiff must indicate the acts or omissions which are said to have been negligently performed. He may not recover upon the bare statement that the defendant’s negligence has caused him injury.’ [Citation].” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 527.) However, there is no requirement that plaintiff identify and allege the precise moment of the injury or the exact nature of the wrongful act. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)

Here, Defendant argues Plaintiff’s pleading does not constitute a tort cause of action but arises from a contract as the Complaint states that “an Agreement with Defendants was signed by plaintiff on or about between the 1st and the 15th of November of the year 2022 for Subject Property to be sold by defendants[.]”) (Dem., at p. 6, Compl., ¶ 7.) Additionally, Defendant contends that the balance of the first cause of action alleges facts more typically associated with a fraud cause of action rather than a negligence claim. (Dem., at p. 6.)

The Court notes that Plaintiff alleges misrepresentations were made by Defendant. (Compl., ¶ 9.) The Complaint explicitly asserts that “[t]he verbal and written representations were that all Defendants had many years of experience in the real estate industry, and that Defendants would apply their expertise in the sell [sic] of the ‘Subject Property[.]’” (Ibid.) Based on these records, the Court agrees with Defendant that these allegations are associated with elements of a misrepresentation or a fraud claim.

The Court further observes that Plaintiff does not allege any duty owed by Defendant other than the implied duty of performance in the Agreement. However, contract duties do not implicate a cause of action for negligence as these are distinct causes of action. Furthermore, the only allegation about an omission that Defendant has negligently performed is that Plaintiff did not receive a copy of said Agreement from Defendant. (Dem. at p. 6.)

            Consequently, the Court finds that the Complaint is severely deficient in stating the first cause of action for negligence.

            Therefore, the Court SUSTAINS WITH LEAVE TO AMEND the Demurrer as to the first cause of action.

C.    Second Cause of Action – Conversion

“Conversion is the wrongful exercise of dominion over the property of another.  The elements of a conversion are: (1) the plaintiff's ownership or right to possession of the property at the time of the conversion; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages. It is not necessary that there be a manual taking of the property; it is only necessary to show an assumption of control or ownership over the property, or that the alleged converter has applied the property to his own use.”  (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 451-452; see also Prakashpalan v. Engstrom, Lipscomb and Lack (2014) 223 Cal.App.4th 1105, 1135.)

“While money cannot be the subject of an action for conversion unless a specific sum capable of identification is involved, it is not necessary that each coin or bill be earmarked.” (Weiss v. Marcus (1975) 51 Cal.App.3d 590, 599.)  Funds deposited in an escrow account by the plaintiff are identifiable specific sums and the delay of releasing the funds can constitute a cause of action for conversion. (See Greif v. Sanin (2022) 74 Cal.App.5th 412.)

Here, the Complaint alleges that “plaintiff is entitle [sic] to be awarded the sum amount of $115.000.00 from defendants THE MATT HORN GROUP thus to the fact, that defendants under sold the Subject Property for the amount mentioned above[.]” (Compl., ¶ 15.) However, this allegation is insufficient to show either ownership or identification of the funds. Consequently, the second cause of action does not state required elements of a conversion claim.

Therefore, the Court SUSTAINS WITH LEAVE TO AMEND the Demurrer as to the second cause of action.

D.    Third Cause of Action – Violation of Unfair Business Practices Statutes

California Business and Professions Code sections 17200 et seq are commonly referred to as California’s Unfair Competition Law (“UCL”), which prohibits “any unlawful, unfair or fraudulent business act or practice.” (Bus. & Prof. Code § 17200; see Clark v. Superior Court (2010) 50 Cal.4th 605, 610.) “An unlawful business practice or act is an act or practice, committed pursuant to business activity, that is at the same time forbidden by law.” (Klein v. Earth Elements, Inc. (1997) 59 Cal.App.4th 965, 969.)¿

By proscribing “any unlawful” business act or practice, the UCL “borrows” rules set out in other laws and makes violations of those rules independently actionable. (Zhang v. Superior Court (2013) 57 Cal.4th 364, 370.) A “violation of another law is a predicate for stating a cause of action under the UCL’s unlawful prong.” (Berryman v. Merit Property Management, Inc. (2007) 152 Cal.App.4th 1544, 1554.) Plaintiff must allege a violation of law to support a UCL claim. If there is no violation of another law, a defendant cannot be held liable for an “unlawful” business practice. (Graham v. Bank of America, N.A. (2014) 226 Cal.App.4th 594, 610 (Graham).

“To state a cause of action based on an unlawful business act or practice under the UCL, a plaintiff must allege facts sufficient to show a violation of some underlying law.” (Prakashpalan, supra, 223 Cal.App.4th at 1133.)

Here, the Complaint alleges that “Plaintiff is informed and believes, and based thereon allege that Defendants, and each of them have violated the Unfair Business Practices Statutes contained in Business and Professions Code § 17200, et seq., by the actions herein alleged.” (Compl., ¶ 18.)

Additionally, Plaintiff alleges that “Defendants and each of them violated the rights of Plaintiff by their actions in perpetrating a fraud against Plaintiff, by their deceptions, and by reason of the fraudulent and otherwise wrongful manner in which the Defendants, or any of them, obtained their alleged right, and claim or interest. Said actions of defendants, and each of them did deceive Plaintiff, and are likely to deceive other members of the public unless enjoined by this Court.” (Compl., ¶ 19.) “By reason of Defendants and each of them, fraudulent, deceptive, unfair, and other wrongful conduct as herein alleged, said Defendants have violated Business and Professions Code § 17200 et seq., by consummating an unlawful, unfair, and fraudulent business practice, designed to deprive Plaintiff of the sum of $ 11 5.000.00 and also designed to deceive other members of the public.” (Id., ¶ 21.)

As the Court has previously sustained the Demurrer as to the first and second causes of action, these two claims may not be considered the “violation of law” on which the UCL claim is predicated. Furthermore, the Court finds that the remaining allegations under the third cause of action consist of conclusory statements without a sufficient factual basis.

Consequently, in alignment with the ruling in Graham and Prakashpalan, the Court must conclude that Plaintiff has failed to state the cause of action under the UCL.

Therefore, the Court SUSTAINS WITH LEAVE TO AMEND the Demurrer as to the third cause of action.

CONCLUSION

Defendants’ Demurrer is SUSTAINED WITH LEAVE TO AMEND.

Plaintiff is ordered to file a First Amended Complaint within 30 days.

Moving party to give notice.