Judge Elaine Lu, Case Number: 23STCV14923, Date: 2023-10-16 Tentative Ruling

On June 27, 2023, Plaintiff Hoss Zargaran (“Plaintiff”) filed the instant action against Defendant Robert Abedian (“Abedian”) and Hnrick Nazarian aka Henrick Nazarian (“Nazarian”) (jointly “Defendants”). The complaint asserts four causes of action for (1) Accounting, (2) Common Count, (3) Conspiracy to Defraud, and (4) Fraud.

On September 25, 2023, Defendant Nazarian filed the instant demurrer to the complaint. On October 3, 2023, Plaintiffs filed an opposition. On October 12, 2023, Defendant Nazarian filed a reply.

Plaintiff is “a long-time experienced manager, marketer and supervisor of restaurants and culinary establishments in the County of Los Angeles, State of California.” (Complaint ¶ 2.)

Plaintiff assisted Defendants in managing, overseeing, and supervising their restaurant Miro – an upscale Italian restaurant in downtown Los Angeles – since 2018. (Id. ¶ 8.) Recently, Miro permanently closed. (Ibid.)

“Plaintiff is informed and believes, and thereon alleges, that at all times herein mentioned and during Plaintiff’s employment history with them at MIRO, Defendants ABEDIAN and HNRECK represented to ZARGARAN that they would pay Plaintiff a base salary of $ 4,000 (Increased to $5,500 after the General Manager was Fired.) per month for his work thereat and other appropriate and applicable’ employment benefit, compensation and income due him.” (Id. ¶ 10.)

“Within the last two (2) years, in the County of Los Angeles, State of California, Plaintiff is owed the sum of approximately $ 35,000 from said Defendants, pending further discovery and an accounting.” (Id. ¶ 11.) “It is necessary that [Plaintiff] obtain a proper and due accounting from [Defendants], so that he can receive the balance of any sums due and owed him, according to proof. To date, [Defendants], have failed and refused to provide the records, accounting and pay any sums owed and due Plaintiff, according to proof.” (Id. ¶ 12.)

“In or about January, 2023, and at all other times relevant hereto, [Defendants] entered into an overt act to defraud Plaintiff of monies and sums converted by said Defendants, to their unjust enrichment, as herein alleged.” (Id. ¶ 22.)

“In or about January, 2023, [Defendants] represented to Plaintiff that they would pay back any monies and sums and compensation owed by them to him. Plaintiff detrimentally relied upon said representation. The true facts were that [Defendants] had no intention of paying back same. Had Plaintiff known the true facts, he would not have relied upon said representation by these Defendants.” (Id. ¶ 25.)

A demurrer 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.) No other extrinsic evidence can be considered (i.e., no “speaking demurrers”). (Ion Equipment Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881.)

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 “give the complaint a reasonable interpretation, and read it in context.” (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.) 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.” (SKF Farms v. Superior Ct. (1984) 153 Cal. App. 3d 902, 905.) “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.)

Code of Civil Procedure § 430.41, subdivision (a) requires that “[b]efore filing a demurrer pursuant to this chapter, the demurring party 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.” The parties are to meet and confer at least five days before the date the responsive pleading is due and if they are unable to meet the demurring party shall be granted an automatic 30-day extension. (CCP § 430.41(a)(2).) The demurring party must also file and serve a declaration detailing the meet and confer efforts. (Id.¿at (a)(3).)¿ If an amended pleading is filed, the parties must meet and confer again before a demurrer may be filed to the amended pleading. (Id.¿at (a).)

Here, Defendant Nazarian has fulfilled the meet and confer requirements. (Mehdian Decl. ¶¶ 3-4, Exh. 1.)

Defendant Nazarian contends that all of Plaintiff’s claims are barred by the statute of limitations.

“A demurrer based on a statute of limitations will not lie where the action may be, but is not necessarily, barred. In order for the bar ... to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows that the action may be barred.” (Committee for Green Foothills v. Santa Clara County Bd. of Supervisors (2010) 48 Cal.4th 32, 42.) “The statute of limitations usually commences when a cause of action ‘accrues,’ and it is generally said that ‘an action accrues on the date of injury.’ [Citation.]” (Vaca v. Wachovia Mortgage Corp. (2011) 198 Cal.App.4th 737, 743.)

“[T]he nature of the right sued upon, not the form of action or the relief demanded, determines the applicability of the statute of limitations.” (Jefferson v. J. E. French Co. (1960) 54 Cal.2d 717, 718.) The first two causes of action are based on failure to pay an unspecified portion of Plaintiff’s salary. (Complaint ¶¶ 8-20.) As there is no allegation that the parties’ agreement was in writing, the statute of limitation would be two years. (CCP § 339.)

As to the third and fourth causes of action, the claim is based on allegations of fraud. (Complaint ¶¶ 21-27.) “An action for relief on the grounds of fraud or mistake must be commenced within three years.” (Kline v. Turner (2001) 87 Cal.App.4th 1369, 1373; CCP § 338(d).)

The alleged back salary is due from within the last two years. (Complaint ¶ 11, [“Within the last two (2) years, in the County of Los Angeles, State of California, Plaintiff is owed the sum of approximately $ 35,000 from said Defendants, pending further discovery and an accounting.”].) The alleged fraud occurred at some point in January of 2023 – again well within the limitations period. (Complaint ¶¶ 22, 25.) Thus, as alleged, the claims are not clearly barred by the statute of limitations.[1]

Accordingly, Defendant Nazarian’s demurrer to the complaint on the basis of statute of limitations is OVERRULED.

Defendant Nazarian contends that the complaint fails to allege a basis for accounting. The Court agrees.

“A cause of action for an accounting requires a showing that a relationship exists between the plaintiff and defendant that requires an accounting, and that some balance is due the plaintiff that can only be ascertained by an accounting.” (Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 179.) “‘Equitable principles govern, and the plaintiff must show the legal remedy is inadequate.... Generally, an underlying fiduciary relationship, such as a partnership, will support an accounting, but the action does not lie merely because the books and records are complex. [Citations.] Some underlying misconduct on the part of the defendant must be shown to invoke the right to this equitable remedy.’ [Citation.]” (Green Valley Landowners Assn. v. City of Vallejo (2015) 241 Cal.App.4th 425, 442.)

Here, the essential allegations are that Plaintiff was hired to oversee, manager, and supervise Defendants’ restaurant Miro for a monthly salary. (Complaint ¶¶ 8-10.) Within the last two years, Plaintiff is owed at least $35,000.00. (Id. ¶ 11.) Thus, as alleged, Plaintiff seeks backpay from the last two years from Defendants.

Though Plaintiff claims that an accounting is required, (Id. ¶¶ 11-12), Plaintiff fails to allege any basis for an accounting. There is no special relationship requiring an accounting; Defendants were merely Plaintiff’s employer. Moreover, there is nothing to account. Plaintiff had a fixed monthly salary and claims to have not been fully paid. Thus, the amount due can be plainly ascertained such that the legal remedy is adequate.

Accordingly, Defendant Nazarian’s demurrer to the first cause of action is SUSTAINED.

Defendant Nazarian contends that the second cause of action is not sufficiently alleged. The Court disagrees.

“‘A common count is not a specific cause of action ...; rather, it is a simplified form of pleading normally used to aver the existence of various forms of monetary indebtedness, including that arising from an alleged duty to make restitution under an assumpsit theory.’ [Citations.]” (Avidor v. Sutter's Place, Inc. (2013) 212 Cal.App.4th 1439, 1454.) “To recover on a claim for the reasonable value of services under [a common count], a plaintiff must establish both that he or she was acting pursuant to either an express or implied request for services from the defendant and that the services rendered were intended to and did benefit the defendant.” (Ochs v. PacifiCare of California (2004) 115 Cal.App.4th 782, 794.)

Though the complaint is extremely scant on factual allegations, Plaintiff alleges that he was hired to oversee, manage, and supervise Defendants’ restaurant Miro for a monthly salary. Plaintiff performed the work from 2018 onward and is owed some back pay. (Complaint ¶¶ 8-11.) Though more facts would be desirable, California follows a notice pleading standard, (See e.g., Morris v. JPMorgan Chase Bank, N.A. (2022) 78 Cal.App.5th 279, 305, Fn. 14), and the pleadings are generally liberally construed. (CCP § 452, [“In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.”].) The complaint gives notice that Plaintiff claims to have been hired by Defendants to oversee, manage, and supervise Defendants’ restaurant Miro since 2018 for a monthly salary but was not fully paid in the last two years.

Accordingly, Defendant Nazarian’s demurrer to the second cause of action is OVERRULED.

Defendant Nazarian asserts that the third cause of action is not sufficiently alleged. The Court agrees.

“Civil conspiracy is not an independent tort.” (City of Industry v. City of Fillmore (2011) 198 Cal.App.4th 191, 211.) Rather, it is “a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration.” (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510–511.) “The elements of liability under conspiracy are: (1) formation and operation of the conspiracy; (2) wrongful conduct in furtherance of the conspiracy; and (3) damages arising from the wrongful conduct.” (Spencer v. Mowat (2020) 46 Cal.App.5th 1024, 1037.)

Here, the complaint vaguely alleges that “[i]n or about January, 2023, and at all other times relevant hereto, [Defendants] entered into an overt act to defraud Plaintiff of monies and sums converted by said Defendants, to their unjust enrichment, as herein alleged. This conspiracy was a substantial factor in harming Plaintiff. As a direct, legal and proximate result thereof, Plaintiff has suffered general damages, including, without limitation, lost income and emotional distress and pain and suffering, according to proof.” (Complaint ¶ 22.) These allegations are woefully insufficient to state a civil conspiracy based on fraud.

There is no specific allegation of any overt act by Defendants – as required to state a claim for civil conspiracy. Similarly, there is no allegation of when any specific fraud occurred other than at some point in January 2023. There is no indication which Defendant did what unspecified overt act. Further there is no indication as to what the claimed fraud is.

Accordingly, Defendant Nazarian’s demurrer to the third cause of action is SUSTAINED.

Defendant Nazarian asserts that the third cause of action is not sufficiently alleged. The Court agrees.

“The elements of fraud are (a) a misrepresentation (false representation, concealment, or nondisclosure); (b) scienter or knowledge of its falsity; (c) intent to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.) As noted above, “Fraud allegations ‘involve a serious attack on character’ and therefore are pleaded with specificity. [Citation.] General and conclusory allegations are insufficient. [Citation.] The particularity requirement demands that a plaintiff plead facts which ‘‘‘show how, when, where, to whom, and by what means the representations were tendered.’’’ [Citation.]” (Cansino, supra, 224 Cal.App.4th at p.1469.)

Here, the allegations for fraud are deficient. The complaint merely alleges that “[i]n or about January, 2023, [Defendants] represented to Plaintiff that they would pay back any monies and sums and compensation owed by them to him. Plaintiff detrimentally relied upon said representation. The true facts were that [Defendants] had no intention of paying back same. Had Plaintiff known the true facts, he would not have relied upon said representation by these Defendants.” (Complaint ¶ 25.)

There is no indication of which Defendant made what specific representation to Plaintiff, how these misrepresentations were made, where these misrepresentations were made, or specifically when these misrepresentations were made. Further, there is no indication of what specifically was stated to Plaintiff or the context of such misrepresentation. Finally, there is no allegation of any reliance or harm caused by these misrepresentations. As alleged, Defendants already owed Plaintiff some unspecified sum of money. A representation that Defendants would pay Plaintiff back money already owed without some action taken by Plaintiff in response to said misrepresentations reflects a lack of reliance. Similarly, it is unclear what damages Plaintiff suffered because of Defendant’s misrepresentation(s) because Plaintiff was already owed the funds, and Plaintiff does not allege any harm caused by Plaintiff’s action(s) or inaction(s) in reliance on the unspecified misrepresentations.

Accordingly, Defendant Nazarian’s demurrer to the fourth cause of action is SUSTAINED.

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the plaintiff to show the court that a pleading can be amended successfully. (Goodman v. Kennedy, supra, 18 Cal.3d at p.348; Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.)

Here, it is unclear whether Plaintiff will be able to successfully amend the first, third, and fourth causes of action of the complaint. Nonetheless, given that this is original complaint and Plaintiff seeks to amend the complaint, there is no reason to presume that the complaint cannot be successfully amended. Accordingly, the court finds it is proper to allow Plaintiff an opportunity to cure the defects discussed in this order. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349; Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037.)

As noted in the Court’s prior order on October 16, 2023, the Court reemphasizes that a plaintiff cannot allege a specific amount of exemplary damages in a complaint – i.e., punitive damages. (Civ. Code, § 3295(e), [“No claim for exemplary damages shall state an amount or amounts.”.) Accordingly, in amending the complaint and seeking punitive damages, Plaintiff should remove the phrase “in the amount of $10,000,000” (Complaint ¶¶ 23, 27) in any amended pleading or Plaintiff must justify in briefing why such phrase is not improper despite the explicit statutory language prohibiting such allegations.

Based on the foregoing, Defendant Hnrick Nazarian’s demurrer to the complaint is SUSTAINED IN PART as to the first, third, and fourth causes of action WITH LEAVE TO AMEND and otherwise OVERRULED.

As noted in the Court’s October 16, 2023 Order, Plaintiff is to file an amended complaint between October 20, 2023 and November 16, 2023.

[1] At the hearing, Plaintiff stated that Defendants fired Plaintiff in May 2018, and Plaintiff stated that he will make this clear in his First Amended Complaint. If Plaintiff will be pleading delayed discovery in response to any statute of limitations bar, Plaintiff must also plead facts in support of any such theory of delayed discovery.

Superior Court of California

County of Los Angeles

Department 26