Judge: Douglas W. Stern, Case: 22STCV13568, Date: 2022-09-26 Tentative Ruling
Case Number: 22STCV13568 Hearing Date: September 26, 2022 Dept: 52
Tentative Ruling:
Defendant MAZ
Construction/Golden Coolers’ Demurrer to First Amended Complaint
Defendant MAZ Construction/Golden Coolers demurs to both causes of action alleged
in the first amended complaint by plaintiff Juana Velazquez, as an individual
doing business as Tacos Los 3 Potrillos.
First Cause of Action for Breach of Contract
Plaintiff alleges sufficient facts for breach of
contract. Defendant argues she has no
standing to enforce the contract because it is between defendant and “Tacos Los
3 Potrillos”—not plaintiff Juana Velazquez. “Someone who is not a party to the contract
has no standing to enforce the contract.”
(Hatchwell v. Blue Shield of California (1988) 198
Cal.App.3d 1027, 1034.) The contract
provides that it is between defendant and “Tacos Los 3 Potrillos.” (FAC, Ex. 2.)
The first
amended complaint, however, alleges plaintiff Juana Velazquez is an individual
doing business as Tacos Los 3 Potrillos.
(FAC, ¶ 1.) “The designation of ‘DBA’
or ‘doing business as’ simply indicates [someone] operates under a fictitious
business name. (See Bus. & Prof. Code,
§ 17900 et seq. [regulating fictitious business names].) Use of a fictitious business name does not
create a separate legal entity.” (Pinkerton's, Inc. v. Superior Court (1996) 49 Cal.App.4th 1342, 1348.)
The first
amended complaint specifically alleges Juana Velazquez “has complied with the
fictitious business name laws and is doing business under the fictitious name: Tacos
Los 3 Potrillos.” (FAC, ¶ 3.b.a.) This allegation suffices to establish
plaintiff Juana Velazquez does business under the fictitious name Tacos Los 3
Potrillos and is therefore a party to the contract.
Moreover, under
the contract’s signature line for “Owner: Tacos Los 3 Potrillos,” it states
“Luis / Juana Velasquesz [sic].” FAC,
Ex. 2.) The signature line has two
separate signatures. (Ibid.)
Defendant also argues
the first amended complaint is a sham pleading because the initial complaint
did not allege plaintiff was doing business as Tacos Los 3 Potrillos. Under the sham pleading doctrine, courts may
disregard allegations when the amended complaint “seeks to avoid the defects of
a prior complaint by omitting the facts that rendered the complaint defective
or by pleading facts inconsistent with the allegations of the prior
pleadings.” (Owens v. Kings Supermarket (1988) 198 Cal.App.3d 379, 383-84.) The doctrine is not “intended
to prevent honest complainants from correcting erroneous allegations of generic
terms which may have legal implications but which are also loosely used by
laymen or to prevent the correction of ambiguous statements of fact.” (Contreras
v. Blue Cross of California (1988) 199 Cal.App.3d 945, 950.)
The sham
pleading doctrine does not apply. The
allegation that Juana Velasquez does business as Tacos Los 3 Potrillos is not
inconsistent with the initial complaint, which merely omitted that
allegation. As discussed above, doing
business under a fictitious name does not establish a separate legal entity. Alleging plaintiff is an individual is not
inconsistent with alleging she is an individual doing business under a
fictitious name. The amendment was an
honest correction.
Second Cause of Action for Fraud
Plaintiff alleges sufficient facts for fraud. The first amended complaint indicates she
asserts fraud by concealment (FAC, PLD-C-001(3), ¶ FR-3) and promise without
intent to perform (Id., ¶ FR-4).
Fraud
requires more specific pleading than other causes of action. (Alfaro v. Community Housing Improvement
System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384.) Fraud by concealment requires: (1) the
defendant concealed or suppressed a material fact; (2) defendant had a duty to
disclose the fact to plaintiff; (3) defendant intentionally concealed or
suppressed the fact with intent to defraud plaintiff; (4) plaintiff must have
been unaware of the fact and would have acted otherwise if she had known of the
concealed fact; and (5) plaintiff suffered damage as a result of the
concealment. (Boschma v. Home Loan
Center, Inc. (2011) 198 Cal.App.4th 230, 248.)
Plaintiff
alleges concealment with sufficient particularity. The first amended complaint alleges defendant
concealed or suppressed material facts “[t]hat all defendants were not properly
licensed to perform work and defendants lack skill and knowledge to properly
and timely complete work.” (FAC, ¶ FR-3.a.)
Promissory
fraud requires that “(1) the defendant made a representation of intent to
perform some future action, i.e., the defendant made a promise, and (2) the
defendant did not really have that intent at the time that the promise was
made, i.e., the promise was false.” (Beckwith
v. Dahl (2012) 205 Cal.App.4th 1039, 1060.)
Plaintiff
alleges promissory fraud with sufficient particularity. The first amended complaint alleges “[d]efendant
made a promise about a material matter without any intention of performing it
as follows: That work would be finished by date set forth in Contract by and
between parties by December 14, 2020.”
(FAC, ¶ FR-4.a.) The first
amended complaint also attaches a copy of a written contract dated September 7,
2020, signed on behalf of “Contractor: Golden Coolers / Maz Construction” by “Jorge
Alvarez, Owner.” (FAC, Ex. 2.)
For
both forms of fraud, plaintiff alleges, “In justifiable reliance upon
defendant’s conduct, plaintiff was induced to act as follows: Entered into
agreement with defendants and made payments for work.” (FAC, ¶ FR-5.) Finally, plaintiff further alleges, “Because
of plaintiff’s reliance upon defendant’s conduct, plaintiff has been damaged as
follows: In excess of $250,000 for delays in completing work and failure to
properly perform work.”
Disposition
Defendant MAZ Construction / Golden
Coolers’ demurrer to plaintiff Juana Velazquez, an individual doing business as
Tacos Los 3 Potrillos’s first amended complaint is overruled. Defendant is ordered to answer within
20 days.