Judge: Elaine W. Mandel, Case: 21SMCV01266, Date: 2022-09-15 Tentative Ruling

Case Number: 21SMCV01266    Hearing Date: September 15, 2022    Dept: P

Tentative Ruling

Elysienne, LLC Vincent Mehdizadeh et al., Case No. 21SMCV01266

Hearing Date September 15, 2022

Cross-Defendants Elysienne, LLC and Courtney Cohen’s Demurrer to FACC  

Plaintiff Elysienne contracted with cross-complainants Pineapple Ventures and Zadeh to perform interior design services. Pineapple and Zadeh cross-complained, alleging inadequate and negligently performed services. On April 27, 2022 the court sustained Elysienne’s demurrer to the fraud cause of action with leave to amend. Elysienne now demurs to the causes of action for fraud and unfair business practices in the first amended cross-complaint. On September 14, 2022 Zadeh and Pineapple filed an untimely opposition, which the court will consider in the interest of justice.

Fraud

Opinions are generally not actionable as fraud, unless accompanied by active misrepresentations or concealment or relate to a subject as to which the parties have no knowledge or means of ascertaining the truth. Dyke v. Zaiser (1947) 80 Cal.App.2d 639.

Elysienne argues the fraud cause of action is supported by statements of opinion, not fact—specifically that Elysienne was “qualified” to do the work. FACC ¶27. This opinion was made in a context of other alleged misrepresentations. Pineapple Ventures and Zadeh lacked means or knowledge to ascertain Elysienne’s qualifications. These allegations can be treated as actionable statements of fact, sufficient to support a cause of action for fraud.

The demurrer argues Elyssiene’s alleged false representation that it was licensed cannot the support a fraud claim, since the initial cross-complaint stated Elyssiene was a “licensed design professional,” contradicting the FACC. This is correct. Additionally, the FACC states “it is not clear if Cohen or Elysienne was ever a licensed design professional[.]” FACC ¶27. The FACC does not actually allege that Cohen or Elysienne misrepresented their licensing status. The FACC does allege Elysinenne intentionally misrepresented that it had “routinely done such work before,” which could constitute a misstatement of fact sufficient to support a fraud cause of action.

The demurrer argues the FACC fails to allege causation and damages. The FACC only alleges “[a]s a result of cross-defendants’ fraudulent statements, promises, and representations, cross-complainants were harmed[.]” FACC ¶29. There is no further explanation. This is not sufficiently specific. SUSTAINED with ten days leave to amend as to damages.

Unfair Business Practices

A cause of action for unfair business practice based on fraud “stand[s] or fall[s] depending on the fate of the antecedent substantive causes of action.” Krantz v. BT Visual Images, LLC (2001) 89 Cal.App.4th 164, 178. A claim for “unfairness” under the unfair competition law must be defined in connection with a legislatively declared policy. Schnall v. Hertz Corp. (2000) 78 Cal.App.4th 1144, 1166-67.

Elysienne argues Zadeh and Pineapple’s allegations regarding unfair business practices are based on fraud or unfairness. The FACC’s tort claim for fraud fails for the reasons stated above. However, as Zadeh and Pineapple note, the “fraudulent” prong of an unfair business practices claim “bears little resemblance to common law fraud or deception. Prata v. Superior Ct. (2001) 91 Cal.App.4th 1128, 1146. Zadeh and Pineapple adequately alleged conduct likely to deceive the public, so the UBP claim based on fraud can proceed. OVERRULED.