Judge: Douglas W. Stern, Case: 21STCV42444, Date: 2022-08-25 Tentative Ruling

Case Number: 21STCV42444    Hearing Date: August 25, 2022    Dept: 52

Tentative Ruling:

Defendant Michelman & Robinson, LLP’s Demurrer and Motion to Strike Portions of First Amended Complaint

I.                   Demurrer

Defendant Michelman & Robinson, LLP demurs to the fourth cause of action for negligent misrepresentation and the fifth cause of action for fraudulent concealment alleged in plaintiff Spitz Technologies Corporation’s first amended complaint.

Plaintiff alleges sufficient facts for the fourth and fifth causes of action.  Defendant contends plaintiff alleges no actionable misrepresentation of fact.  “[A]ctionable misrepresentations must pertain to past or existing material facts. …   Statements or predictions regarding future events are deemed to be mere opinions which are not actionable.”  (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.)  General statements about quality are puffery and not actionable, unlike factual representations.  (Consumer Advocates v. Echostar Satellite Corp. (2003) 113 Cal.App.4th 1351, 1361 [“crystal clear” and “CD quality” are puffery].) 

However, “[u]nder certain circumstances, expressions of professional opinion are treated as representations of fact.  When a statement, although in the form of an opinion, is ‘not a casual expression of belief’ but ‘a deliberate affirmation of the matters stated,’ it may be regarded as a positive assertion of fact.  [Citation.]  Moreover, when a party possesses or holds itself out as possessing superior knowledge or special information or expertise regarding the subject matter and a plaintiff is so situated that it may reasonably rely on such supposed knowledge, information, or expertise, the defendant's representation may be treated as one of material fact.”  (Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370, 408 (Bily.)) 

Many of the alleged misrepresentations constitute puffery.  But a demurrer must dispose of an entire cause of action. (Southern California Pizza Co., LLC v. Certain Underwriters at Lloyd's, London etc. (2019) 40 Cal.App.5th 140, 154.)  In addition to the allegations that constitute puffery about the attorneys’ qualifications and skill, plaintiff alleges a misrepresentation of fact: “At [a] meeting, which took place at a restaurant called the Barrel Room, Jan Weir affirmatively represented that that Spitz had ‘done very well’ on the claim construction ruling and had ‘succeeded’ in its goals for claim construction.  Subsequently… while sharing the same car, Jan Weir represented to Gregory Spitz that Gregory Spitz that Spitz had ‘won’ claim construction.”  (FAC, ¶ 84.)  Plaintiff alleges that representation was false: “After the district court claims construction ruling, which was in reality, adverse to Spitz on critical language that foreclosed any reasonable chance to prevail on literal infringement against Nobel, by concealing the true result of the court’s order by claiming that Spitz had “won” claim construction.”  (FAC, ¶¶ 182.b., 199.b.)  .

Whether Spitz “succeeded” or “ ‘won’ on claim construction” is an expression of professional opinion that can be treated as a positive assertion of fact.  Winning or losing is a falsifiable assertion of a past material fact, unlike general assertions of the quality of defendant’s attorneys.  This alleged misrepresentation is analogous to those in other cases treating professional opinions as assertions of fact.  (See, e.g., Gagne v. Bertran (1954) 43 Cal.2d 481, 488–489 [professional stated soil had 12 to 16 inches of fill when it had three to six feet of fill]; Bily, supra, 3 Cal.4th at p. 408 [accountant’s audit opinion was actionable]; Crandall v. Parks (1908) 152 Cal. 772, 776 [“statement as to the value of property” was actionable]; Shafer v. Berger, Kahn, Shafton, Moss, Figler, Simon & Gladstone (2003) 107 Cal.App.4th 54, 75 [attorney “misrepresented the scope of insurance coverage”].) 

Defendant’s demurrer is overruled.

II.                Motion to Strike

Defendant moves to strike 20 portions of the first amended complaint.  Defendant contends these portions are irrelevant and pertain to attorney Jan Weir’s purported misconduct in other cases, which the court struck from the initial complaint.

Courts may strike allegations that are “not essential to the statement of a claim or defense,” “neither pertinent to nor supported by an otherwise sufficient claim or defense,” or “[a] demand for judgment requesting relief not supported by the allegations.”  (CCP § 431.10(b).)  Courts also have the “inherent authority to strike scandalous and abusive statements in pleadings.”  (Oiye v. Fox (2012) 211 Cal.App.4th 1036, 1070.)

As the court ruled on defendant’s prior motion to strike, allegations about Weir’s purported misconduct in other cases “would only be pertinent to plaintiff’s claims if defendant had a duty to disclose Weir’s purported misconduct. Defendant had no such duty. A law firm does not owe its clients a duty to disclose all sanctions or discipline against its attorneys. That Weir may have been facing sanctions in unrelated cases is not a material fact that defendant owed a duty to disclose.”  (April 25, 2022 Order, p. 7.)

Eighteen of the twenty portions defendant seeks to strike, however, are pertinent and at most only tangentially related to Weir’s purported misconduct.  For example, defendant moves to strike the following portions: “He also represented that they would have sufficient time, resources, and focus to dedicate the necessary attention to Spitz’s case against Nobel”  (FAC, ¶ 19); “… and that he had the necessary time and resources to effectively and competently handle the representation” (¶ 23); “… and ability… ” (¶ 32); “By failing to advise the client properly before Defendant’s retention as counsel of Weir’s inability to handle such matters and to devote the necessary time and attention to the Spitz’ case . . .” (¶ 148); and “…and availability…” (¶ 206).

Except for two portions of the first amended complaint, the challenged allegations do not include statements that Weir committed misconduct in other cases or was facing sanctions.   The only portions subject to striking are paragraph 203 and part of paragraph 238. 

Paragraph 203 provides, “As set forth herein above, at the time that Spitz retained Defendant, including M&R partner Jan Weir, to handle its case against Nobel, Weir was embroiled in serious allegations of professional misconduct, which he needed to continue to litigate concurrently with his representation of Spitz.”  That Weir was allegedly embroiled in serious allegations of professional conduct in other cases is not pertinent to any of plaintiff’s causes of action. 

The challenged portion of paragraph 238 provides, “Defendant obtained benefits from this concealment: by concealing Weir’s professional misconduct and ongoing legal issues, Defendant was able to convince Spitz to retain them to handle the Nobel matter and thereby obtain substantial fees.”  This portion of the first amended complaint also makes irrelevant allegations of professional misconduct against Weir.

Disposition

Defendant’s motion to strike is granted in part as to the following portions of the first complaint: (1) all of paragraph 203, and (2) “Defendant obtained benefits from this concealment: by concealing Weir’s professional misconduct and ongoing legal issues, Defendant was able to convince Spitz to retain them to handle the Nobel matter and thereby obtain substantial fees” in paragraph 238 at page 54, lines 14 to 16.

Defendant is ordered to answer within 20 days.