Judge: David Sotelo, Case: 22STCV10994, Date: 2022-08-09 Tentative Ruling
Case Number: 22STCV10994 Hearing Date: August 9, 2022 Dept: 40
MOVING PARTY: Defendants Norberto
Fregoso and Complete Industrial Repair, Inc.
Plaintiff Abel Nevarez sues Defendants Norberto Fregoso and Complete Industrial Repair, Inc.,
alleging Breach of Contract, Fraud, and other claims stemming from the
Defendants’ failure to comply with the terms of oral and written agreements
between Nevarez and Fregoso relating to the establishment of a thermal spray
services partnership between them.
Fregoso and
Industrial now bring this opposed Demurrer to the Complaint’s two Breach of
Contract and single Breach of Implied Covenant of Good Faith, Conversion, and
Fraud claims, as well as an opposed Motion to Strike the Complaint’s attorney’s
fees, Business and Professions Code penalties, and Labor Code penalties
allegations.
For the following
reasons, the Court (1) SUSTAINS, With Leave, the Demurrer as to the two Breach
of Contract claims and the single Breach of Implied Covenant of Good Faith and
Conversion claims as they relate to Fregoso and Industrial, (2) SUSTAINS, With
Leave, the Demurrer as to the Fraud claim only as to Industrial, (3) OVERRULES
the Demurrer as to the Fraud claim only as to Fregoso, and (4) GRANTS the
Motion to Strike in full.
Introduction: Nevarez and Norberto Fregoso met approximately in 2004 through their work in
the coating industry. Secretary of State
records show that Defendant Fregoso incorporated Defendant Complete Industrial
Repair, Inc. (“Industrial”) in June 2009.
Oral Agreement: In or around early to mid-2020,
Nevarez and Fregoso discussed the possibility of a joint venture or partnership
where Nevarez would bring his expertise and experience in thermal spray
techniques and business to grow a company (distinct from Industrial) in the Montebello,
California area and eventually expand to a location in Guadalajara, Mexico.
In July 2020, Nevarez left his employment relying on Fregoso
and their joint plan to develop a thermal spray business (distinct from
Industrial) and began working together.
Fregoso originally promised Nevarez that Fregoso would pay
Nevarez $25 per hour while working at Industrial until their thermal spray
venture progressed enough to generate sufficient income for them both. Nevarez
worked on the thermal spray project, and alleges that he invested his time,
money, and materials toward that end. However, Fregoso only paid Plaintiff
$13.50 per hour for Nevarez’s work at Industrial, lower than promised and
considerably lower than what Nevarez was earning at his previous employment.
Written Agreement: On February 14, 2021, Fregoso
prepared a “Partnership Agreement,” which Fregoso and Nevarez signed on March
13, 2021. Inter alia, the Agreement provided that:
“The partners … [formed] a partnership for the purpose of
operating a business known Thermal Spray Services.” (Hereafter, “TSS”)
“Nevarez [would] make … contribution of … Sulzer Metco
Diamond Jet DJF Flowmeter Unit Model HDJFF60613-1; Metco Perkin Elmer DJP
Diamond Jet Powder Feed AM89412888; 3MBTD for Plasma, 5G-100 Plasma Gun and
Extensions, HUUF / Diamond Jet; and Metco Spray Gun 12-E” to the Partnership.
“The Partners [Nevarez and Fregoso] [would] share business
profits and losses … [such that] Abel Pastrano Nevarez [would] receive 25% of
metal spray coating profits.”
“[Nevarez] … management powers and responsibility … [were] …
the preparation and application of coatings, learn how to prepare machine parts
to be coated, learn how to grind parts after coated, maintain equipment ready
for use, and install all equipment as agreed in the beginning of the project.”
Secretary of State records fail to show that a “Thermal
Spray Services” was ever incorporated, either as a corporation, LLC,
partnership, or otherwise.
By May 2021, Nevarez had invested more than an alleged
$100,000 of his own money and materials into Thermal Spray Services (distinct
from Industrial) while setting up the thermal spray business and at the same
time as he worked for Industrial for $13.50 per hour.
On May 29, 2021, Fregoso, abruptly and without notice,
locked Nevarez out of the property used for the Thermal Spray Services’
operations at 7403 Telegraph Road, Montebello, California. Fregoso told
Plaintiff that he “was terminated” and “not allowed on the premises.” Nevarez,
shocked, asked to be allowed to retrieve his personal materials, tools, and
effects, but Fregoso refused without explanation. Nevarez contacted the police,
who arrived, determined the matter was civil in nature, and left.
Plaintiff Nevarez has since requested that Fregoso and
Industrial return Nevarez’s personal property, but the Defendants have failed
to return such property or account for its whereabouts.
Plaintiff Nevarez has also requested that Fregoso provide
itemized accounting of the Thermal Spray Services/acquisition-related costs to
ensure a final accurate reconciliation and full accounting of what (1) payments
were owed Plaintiff under, the Agreement and (2) what happened with the
materials, machinery and other items Plaintiff brought to the partnership
arrangement. Fregoso and Industrial have repeatedly failed to properly respond
to such requests. (The Complaint fails to allege an Accounting cause of
action.)
Based on these facts, Nevarez sued alleging at least
$150,000 in damages and causes of action for:
(1.a.) Breach of Contract, Written Count One, Written
Contract, against Fregoso, for breach of the Partnership Agreement, insofar as
Fregoso has failed to properly reimburse Nevarez for expenses incurred,
compensate Nevarez his allotted 25% of net profits for Thermal Spray Services,
or allow Nevarez to participate in the management of Thermal Spray Services.
(1.b.) Breach of Contract, Count Two, Oral Contract, against
Fregoso and Industrial, for failure to pay Plaintiff Nevarez his promised $25
per hour salary or out-of-pocket expenses incurred in the Thermal Spray Services
project, amounting to at least $35,000 in damages.
(2) Breach of Implied Covenant of Good Faith and Fair
Dealing, against Fregoso, for failing to compensate Nevarez monies owed to him,
as agreed in the Oral and Written Agreements, and by failing to return to
Nevarez his personal property.
(3) Conversion, against All Defendants, based on the
Defendants wrongful acts in misappropriating thermal spray assers and other
personal items and assets belonging to Nevarez, including thermal spray
machinery and tools related to the thermal spray operations.
(4) Breach of Fiduciary Duty, against Fregoso, based on the
Partnership Agreement creating a fiduciary relationship between Nevarez and
Fregoso, and Fregoso failing provide Nevarez with any share to partnership
profits or losses for tax deduction purposes and has never reimbursed Nevarez
for payments made, or indemnified Plaintiff for any liabilities incurred by
Plaintiff, in the ordinary course of business operations of the thermal spray
business operation.
(5) Fraud and Deceit, against Fregoso and Industrial, for
making false representations of fact to Nevarez, orally and in written form, as
to Fregoso and Industrial’s intent to perform their obligations under the Oral
and Written Agreements, to Nevarez’s entitlement to management over and 25% of
the net profits for Thermal Spray Services, and to paying Nevarez $25 per hour
for his work at Industrial and in the nascent thermal spray operation, all to
induce Nevarez to provide Fregoso and Industrial with his expertise, equipment,
materials, strategic management skills under both the Oral and Written
(Partnership) Agreements.
Defendants Fregoso and Industrial now brings an opposed
Demurrer to the two Breach of Contract claims and single Breach of Implied
Covenant, Conversion, and Fraud claims on the grounds that these claims are
insufficiently and uncertainly pleaded within the meaning of Code of Civil
Procedure section 430.10, subdivision (e) and (f) respectively.
Defendants Fregoso and Industrial also bring an opposed
Motion to Strike attorney’s fees, Business and Professions Code penalties, and
Labor Code penalties allegations from the Complaint.
Sufficiency Standard: A demurrer for sufficiency
tests whether the complaint states a cause of action.¿ (Hahn v. Mirda
(2007) 147 Cal.App.4th 740, 747; see Code Civ. Proc., § 430.10, subd. (e).)¿
This device 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.¿ (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)¿
“To survive a [general] demurrer, the complaint need only allege facts
sufficient to state a cause of action; each evidentiary fact that might
eventually form part of the plaintiff’s proof need not be alleged.”¿ (C.A.
v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.)¿ In
testing the sufficiency of the cause of action, the demurrer admits the truth
of all material facts properly pleaded.¿ (Aubry v. Tri-City Hospital Dist.
(1992) 2 Cal.4th 962, 966-67.)¿ A demurrer, however, “does not admit
contentions, deductions or conclusions of fact or law.”¿ (Daar v. Yellow Cab
Co. (1967) 67 Cal.2d 695, 713.)¿ 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, disapproved on
other grounds, Jones v. Lodge at Torrey Pines Partnership (2008) 42
Cal.4th 1158, 1162.)¿ The face of the complaint includes exhibits attached to
the complaint.¿ (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94.)¿ If
facts appearing in the exhibits contradict those alleged, the facts in the
exhibits take precedence.¿ (Holland v. Morse Diesel Intern., Inc. (2001)
86 Cal.App.4th 1443, 1447.)
Uncertainty Standard: A demurrer to a pleading lies
where the pleading is uncertain, ambiguous, or unintelligible. (Code Civ. Proc.
§ 430.10, subd. (f).) “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.” (Khoury v. Maly's of
California, Inc. (1993) 14 Cal.App.4th 612, 616.) As a result, a special
demurrer for uncertainty is not intended to reach failure to incorporate
sufficient facts in the pleading but is directed only at uncertainty existing
in the allegations already made. (People v. Taliaferro (1957) 149
Cal.App.2d 822, 825.) Where complaint is sufficient to state a cause of action
and to apprise defendant of issues he is to meet, it is not properly subject to
a special demurrer for uncertainty. (See ibid.; see also Gressley v.
Williams (1961) 193 Cal.App.2d 636, 643 [“[a] special demurrer [for
uncertainty] should be overruled where the allegations of the complaint are
sufficiently clear to apprise the defendant of the issues which he is to
meet”].)
First Cause of Action, Count One, Breach of Written
Contract: SUSTAINED, With Leave.
Analysis: “A contract is a voluntary and lawful
agreement, by competent parties, for a good consideration, to do or not to do a
specified thing.” (Robinson v. Magee (1858) 9 Cal. 81, 83.) “To prevail
on a cause of action for breach of contract, the plaintiff must prove (1) the
contract, (2) the plaintiff’s performance of the contract or excuse for
nonperformance, (3) the defendant’s breach, and (4) the resulting damage to the
plaintiff.” (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.) ““A
written contract may be pleaded either by its terms—set out verbatim in the
complaint or a copy of the contract attached to the complaint and incorporated
therein by reference—or by its legal effect. [Citation.] In order to plead a
contract by its legal effect, plaintiff must ‘allege the substance of its
relevant terms. This is more difficult, for it requires a careful analysis of
the instrument, comprehensiveness in statement, and avoidance of legal
conclusions.’ [Citation.]” (Heritage Pacific Financial, LLC v. Monroy
(2013) 215 Cal.App.4th 972, 993 [citation omitted].)
On demur, Fregoso and Industrial argue various points
against Breach of Written Contract. The first position is that the terms of the
Partnership Agreement alleged in the Complaint are vague and unclear because
the Complaint did not specifically allege that Mr. Fregoso is liable under the
Partnership Agreement. (Demurrer, 4:16-5:2.) The second position is that the
Complaint’s allegations as to the breach of the Partnership Agreement are vague
or unclear because the quoted terms of the Partnership Agreement (referenced
ante) contradict allegations made elsewhere in the Complaint. (Demurrer,
5:3-8.) The Court with the latter argument.
The body of the Complaint and the First Cause of Action,
Count One, Written Contract, sufficiently allege that Fregoso is liable to
Nevarez for any breach of the Partnership Agreement based on the parties’
decision to enter into an agreement to operate the thermal spray business that
became Thermal Spray Services. (Complaint, ¶ 14.)
However, Fregoso and Industrial are correct in arguing that
the Complaint could be clearer as to the content of the Partnership Agreement.
Further, the Complaint could be clearer as to the terms of Fregoso’s
obligations and liability under the Agreement. For example, paragraph 25 of the
Complaint alleges that Fregoso breached the Partnership Agreement by failing to
permit Nevarez to manage the operation of Thermal Spray Services, but such a
term is never stated in paragraph 14 of the Complaint—the only paraphrased
terms of the Partnership Agreement provided in the Complaint, where the parties
altogether fail to provide a copy of the Partnership Agreement to the Court.
Nor are reimbursements contemplated in the Complaint’s terms for the
Partnership Agreement. (Complaint, ¶ 14.)
And while the Complaint alleges that Plaintiff was not paid
according to the terms of the Partnership Agreement (Complaint, ¶¶ 14, 25 [25%
net profit of the thermal spray business]), the Court finds that, at this time,
more of the terms of the Partnership Agreement need to be provided by Plaintiff
Nevarez as to properly analyze the legal effect of this instrument and the
obligations of the parties with respect to one another for this Breach of
Written Contract claim.
First Cause of Action, Count Two, Breach of Oral Contract:
SUSTAINED, With Leave.
Analysis: On demur, Defendants Fregoso and Industrial
argue that the Breach of Oral Contract claim is not sufficiently pleaded
because (1) the Complaint alleges that Nevarez continued working for Fregoso
and Industrial despite only being paid $13.50 per hour, (2) California case law
holds that an at-will employee’s salary may be modified, and (3) the Complaint
pleads such a modification by alleging that Fregoso suffered a $13.50 per hour
wage rate and continued to work for Industrial. (Demurrer, 5:12-6:25.)
A review of the First Cause of Action as premised on the
Oral Agreement shows that this claim is comprised of two breaches by Fregoso
and Industrial: failure to pay Nevarez $25 per hour as agreed on or before July
2020 and failure to reimburse Nevarez for out-of-pocket expenses and
expenditures pursuant to the Oral Agreement. (Complaint, ¶ 29.)
However, the Complaint does not plead that, as part of the
Oral Agreement spanning July 2020 and February 2021, Fregoso or Industry
promised to pay out-of-pocket expenses or expenditures by Nevarez. (Complaint, ¶¶
13, 22 [incorporation].) The Complaint only pleads that, as part of the Oral
Agreement, Nevarez was to be paid $25 per hour but was instead paid $13.50 per
hour by Fregoso and Industrial. (Complaint, ¶¶ 13, 22.)
As such, the only well-pleaded basis for the Breach of Oral
Contract claim is Fregoso and Industrial’s failure to pay Nevarez $25 per hour
as agreed in or before July 2020. (Complaint, ¶ 13, 22.)
Fregoso and Industrial argue that DiGiacinto v. Ameriko-Omserv
Corp. (1997) 59 Cal.App.4th 629 shows that a California employer of an
at-will employee may modify the employee’s salary at will and the employee’s
sufferance of the new wage while continuing to work for the employer
constitutes modification of the employment agreement between these parties. (Demurrer,
6:1-23.)
Employees in California are presumed to be employed at-will
and can be disciplined, up to termination, at will and without an evidentiary
hearing. (Lab. Code §2922; DiGiacinto v. Ameriko-Omserv Corp. (1997) 59
Cal.App.4th 629, 634 [because an employee may be discharged at will, it is
reasonable he or she may also be subject to lesser discipline at will].)
Here, the Complaint at paragraph 13 does not indicate that a
contract for term of years was reached by Nevarez on the one side and Fregoso
and Industrial on the other. At best, the Oral Agreement allegations (Complaint,
¶¶ 13, 22) show an at-will relationship because the oral agreement is not
alleged to have had a fixed term for the business relationship between Nevarez,
Fregoso, and Industrial or Nevarez, Fregoso, and the thermal spray business.
The Court of Appeal for the Second Appellate District
explained in DiGiacinto that “an at-will employee who continues in the
employ of the employer after the employer has given notice of changed terms or
conditions of employment has accepted the changed terms and conditions.” (DiGiacinto,
supra, 59 Cal.App.4th at p. 637.)
The Complaint pleads at paragraph 13 that while the parties
had agreed to paying Nevarez a salary of $25 per hour for his work at
Industrial, Nevarez was only paid $13.50 per hour and nevertheless continued
working for Fregoso and Nevarez.
Under such circumstances, the Court cannot but find that the
Oral Agreement portion of the Breach of Contract claim is not sufficiently pleaded.
Second Cause of Action, Breach of Implied Covenant of
Good Faith & Fair Dealing: SUSTAINED, With Leave.
Analysis: To prevail on a cause of action for breach
of the implied covenant of good faith and fair dealing, the plaintiff must
prove: (1) the existence of a contract between plaintiff and defendant; (2)
plaintiff performed his contractual obligations or was excused from performing
them; (3) the conditions requiring defendant’s performance had occurred; (4)
the defendant unfairly interfered with the plaintiff’s right to receive the
benefits of the contract; and (5) the plaintiff was harmed by the defendant’s
conduct. (Merced Irr. Dist. v. County of Mariposa (E.D. Cal. 2013) 941
F.Supp.2d 1237, 1280 [discussing California law].) Allegations must demonstrate
defendant’s conduct for failure or refusal to discharge contractual
responsibilities was a conscious and deliberate act, not an honest mistake, bad
judgment or negligence. (Id.) “‘[T]he 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.’” (Ragland v. U.S. Bank Nat. Assn. (2012) 209 Cal.App.4th 182,
206 [quoting Pasadena Live v. City of Pasadena (2004) 114 Cal.App.4th
1089, 1094].)
On demur, Defendants Fregoso and Industrial argue that the
Second Cause of Action fails because it (1) relies on incorporation of a
deficient First Cause of Action and (2) itself in insufficiently pleaded.
(Demurrer, 7:2-16.) The Court agrees with the first position.
The Second Cause of Action alleges that “Defendants have
breached the implied covenant of good faith and fair dealing contained in the
[Partnership] Agreement and in the separate oral agreement by failing to
compensate Plaintiff monies owed him, as agreed and by failing to return to him
his personal property.” (Complaint, ¶¶ 32 [incorporation], 34 [quoted text].)
Here, because the First Cause of Action failed (see
discussions supra), and because the Second Cause of Action is based on the same
allegations—failure to pay correct salary, return belongings, or share control
of Thermal Spray Services (compare Complaint, ¶¶ 25, 29, with Complaint, ¶ 34)—it
follows that the Second Cause of Action fails to plead that Fregoso unfairly
interfered with the plaintiff’s right to receive the benefits of Partnership
Agreement or Oral Agreement. (See Merced Irr. Dist., supra, 941
F.Supp.2d at p. 1280.)
Third Cause of Action, Conversion: SUSTAINED, With
Leave.
Analysis: “Conversion is the wrongful exercise of
dominion over the property of another” and is comprised of “(1) the plaintiff’s
ownership or right to possession of the property; (2) the defendant’s conversion
by a wrongful act or disposition of property rights; and (3) damages.” (Lee
v. Hanley (2015) 61 Cal.4th 1225, 1240.)
The Complaint’s Third Cause of Action alleges Conversion
against all Defendants based on the Defendants’ misappropriation of the thermal
spray assets and other personal items owned by Nevarez through the Written
(Partnership) and Oral Agreement, including thermal spray machinery and tools
related to thermal spray operation without right to do so. (Complaint, ¶ 38.)
On demur, Fregoso and Industrial argue that this claim is
not sufficiently pleaded because “Plaintiff alleges that the equipment that
Plaintiff alleges was converted was equipment that Plaintiff gave to the
partnership as his contribution to the formation of the partnership.”
(Demurrer, 8:3-5.) The Court agrees to a limited but sufficient degree.
Paragraph 14 of the Complaint alleges that Nevarez
contributed several thermal spray devices to the Thermal Spray Services
partnership between Nevarez and Fregoso and specifically names and describes
such devices.
Yet, paragraph 38 of the Complaint alleges that Nevarez has
a right to thermal spray machinery without clarifying what such devices are, whether
they fall within the ambit of the Partnership and Oral Agreement between
Nevarez and Fregoso, and whether Nevarez has a right to plead conversion over assets
that fall into the ambit of Nevarez’s contributions to Thermal Spray Services.
Under such circumstances, the Conversion claim is not only
insufficiently pleaded as to showing Nevarez’s right to the thermal spray tools
superior to that of Thermal Spray Services (the partnership), but also
uncertainly pleaded as to which tools are at issue—i.e., the Court cannot
determine whether any personal belongings of Nevarez were pleaded as stolen as
opposed to given to Thermal Spray Services under the Partnership Agreement and
later deemed converted.
Fifth Cause of Action, Fraud and Deceit: OVERRULED
as to Defendant Fregoso; SUSTAINED, With Leave, as to Industrial.
Analysis: “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; see also Odorizzi v. Bloomfield School Dist. (1966) 246 Cal.App.2d
123, 128; Wilhelm v. Pray, Price, Williams & Russell (1986) 186
Cal.App.3d 1324, 1332.)
Allegations of fraud “must be pled with more detail than
other causes of action.” (Apollo Capital Fund, LLC v. Roth Capital Partners,
LLC (2007) 158 Cal.App.4th 226, 240.) “Every element of the cause of action
for fraud must be alleged . . . factually and specifically[,] and the policy of
liberal construction of the pleadings . . . will not ordinarily be invoked to
sustain a pleading defective in any material respect. [Citations.]” (Committee
on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197,
216.) Accordingly, a plaintiff pleading fraud must plead facts showing “how,
when, where, to whom, and by what means” the allegedly fraudulent
representations were tendered. (Lazar v. Superior Court (1996) 12
Cal.4th 631, 645.)
The Fifth Cause of Action alleges fraud against Fregoso and
Industrial based on false representations that Nevarez “would receive 25% of
the profits from the thermal spray business operations, and that he would share
equal authority, management and responsibilities with Fregoso in the thermal
spray business.” (Complaint, ¶ 56.)
The Fifth Cause of Action also incorporates prior
allegations, including those related to Fregoso promising to pay Nevarez $25
per hour for his employment with Industrial and 25% profits from Thermal Spray
Services. (Complaint, ¶¶ 13, 14, 53 [incorporation].)
On Demur, Fregoso and Industrial erroneously argue that
Nevarez only pleads a single misrepresentation—not paying Fregoso his promised
$25 per hour—and insufficiently pleads any other misrepresentations as to the
Partnership Agreement. (Demurrer, 11:22-12:11.)
The Complaint’s Fraud claim sufficiently pleads Fraud
against Fregoso: Nevarez entered into the Partnership Agreement with Fregoso to
form Thermal Spray Services (Complaint, ¶¶ 14, 53); Fregoso drafted the
Partnership Agreement, which states that Nevarez was to receive 25% of the net
profits for Thermal Spray Services (Complaint, ¶ 14, 53); Fregoso and
Industrial knew they had no intention of complying with the terms of the
Partnership Agreement (including profits), and instead made promises to induce
Nevarez to contribute over $100,000.00 of his personal belongings and assets
into the Thermal Spray Business on or after July 2020, only for Fregoso to
“terminate” Nevarez from the Partnership in May 2021, without accounting,
sharing of net profits, or access to information regarding the state of Thermal
Spray Services (Complaint, ¶¶ 14, 15, 20, 53, 58-62); and such net profit
misrepresentations by Fregoso harmed Nevarez, i.e., Nevarez was never paid any
of the 25% of Thermal Spray Services’ net profits (Complaint, ¶¶ 56, 63).
To the extent that the remaining allegations of the Fifth
Cause of Action are not sufficiently pleaded toward Fregoso, the Court notes
that a party cannot demur to a portion of a cause of action. (Kong v. City of Hawaiian Gardens
Redevelopment Agency (2002) 108 Cal. App. 4th 1028, 1047 [“[a] demurrer
cannot rightfully be sustained to part of a cause of action or to a particular
type of damage or remedy.”].)
However, the Court finds that Fraud is not well pleaded
against Industrial. According to paragraph 14 of the Complaint, the Partnership
Agreement was entered only by Nevarez and Fregoso. Thus, Industrial is not
pleaded as a party that could have made misrepresentations as to the
Partnership Agreement. (See Complaint, ¶ 56.) To the extent that the Oral
Agreement supports a Fraud claim against Industrial, this support is not
sufficiently pleaded. (See First Cause of Action, Count One, Breach of Oral
Contract discussion supra [claim not sufficiently pleaded because the only supported
basis for claim—nonpayment of $25 per hour to Nevarez by Fregoso and
Industrial—fails as pleaded because the Complaint alleges conditions under
which the Court could determine that Nevarez acquiesced to a lower wage rate of
$13.50 per hour by continuing to work for Industrial as an at-will employee
earning this lower rate].)
Legal Standard: The court may, upon a motion or at
any time in its discretion and upon terms it deems proper: (1) strike out any
irrelevant, false, or improper matter inserted in any pleading; or (2) strike
out all or any part of any pleading not drawn or filed in conformity with the
laws of California, a court rule, or an order of the court.¿ (Code Civ. Proc.
§§ 435, 436, subd. (a)-(b); Stafford v. Shultz¿(1954) 42 Cal.2d 767,
782.)
Analysis: Defendants Fregoso and Industrial bring a
Motion to Strike (1) attorney’s fees allegations, (2) Business and Professions
Code civil penalties allegations, and (3) Labor Code penalties allegations on
the grounds that these claims are not supported by the pleadings. (Strike Mot.,
4:5-24.)
Plaintiff Nevarez stipulated to the deletion of attorney’s
fees allegations from the Complaint (Opp’n, 8:16-18), and thus, the Court
GRANTS the Motion to Strike to this effect.
The Court also GRANTS the Motion as to the Business and
Professions Code and Labor Code penalties because the Complaint does not allege
claims to this effect supporting such penalties. (See Complaint generally; see
also Demurrer, 4:10-24.)
Defendants Norberto Fregoso and Complete Industrial Repair,
Inc.’s Demurrer to Complaint is:
(1) SUSTAINED, With Leave, the Demurrer as to the two Breach
of Contract claims and the single Breach of Implied Covenant of Good Faith and
Conversion claims as they relate to Fregoso and Industrial.
(2) SUSTAINED, With Leave, the Demurrer as to the Fraud
claim only as to Industrial.
(3) OVERRULED the Demurrer as to the Fraud claim only as to
Fregoso.
Defendants Norberto Fregoso and Complete Industrial Repair,
Inc.’s Motion to Strike Attorney’s Fees From Complaint is also GRANTED in full
because (1) Plaintiff Nevarez stipulates to the deletion of attorney’s fees
allegations from the Complaint and (2) no claims support the Business and
Professions Code and Labor Code allegations in the Complaint.