Judge: Elaine W. Mandel, Case: 23SMCV05232, Date: 2024-02-20 Tentative Ruling

Case Number: 23SMCV05232    Hearing Date: February 20, 2024    Dept: P

Tentative Ruling

Ari Pourat v. Arias Sanguinetti Wang & Torrijos, LLP, Case No. 23SMCV05232

Hearing Date February 20, 2024

Defendants Arias Sanguinetti Wang & Team LLP (ASWT) and Mickel Montalban Arias’ Demurrer to Complaint

Plaintiff attorney Pourat represented third party Jane Doe in a lawsuit. Doe signed a fee sharing agreement under which Pourat’s firm would split contingency fees with Doe’s other counsel, defendant Arias Sanguinetti Wang & Team LLP (ASWT) and Janet Janet & Suggs (JJS). After the underlying case settled, Pourat alleges Doe and the defendants failed to pay his fees.

ASWT and managing partner Arias demur, stating they were not party to any fee sharing agreement with Pourat and are required by ethics rules to hold the disputed fees in trust until Pourat’s fee dispute with Doe is resolved.

Service and Filing of Demurrer

Pourat argues the demurrer should be stricken because it was filed on January 26, 2024, one day after the due date. The court file stamp shows the demurrer was filed at 12:04 AM on January 26, 2024, a de minimis delay.

Pourat argues the demurrer was improperly served by email, but does not claim prejudice. The court will address the merits, while reminding defendants to abide by Rule 8.78 regarding service.

Meet and Confer

Daniels’ declaration states the parties met and conferred on November 28, 2023. Daniels decl. ¶5. Pourat states the declaration is false, as the demurrer was not discussed during the meeting. Nazarian decl. ¶¶4-6, Pourat decl. ¶¶4-6. In the interest of a hearing on the merits, the court will not strike the demurrer due to the disagreement regarding the subject of that meeting.

Breach of Contract (Retainer Agreement)

A cause of action for breach of contract requires the existence of an agreement between the parties. Reichert v. Glen. Ins. Co. of Am. (1968) 68 Cal.2d 822, 830. At the demurrer phase, all well-pleaded factual allegations in the complaint are treated as true. Redfearn v. Trader Joe’s (2018) 20 Cal.App.5th 989, 1005.

Defendants ASWT and Arias state they are not parties to the retainer agreement underlying the first cause of action. Arias’ declaration states “[a]t the time the retainer agreement was executed between Plaintiff and Defendant Jane Doe, I was not a party to the retainer agreement nor was ASWT,” and “[a]t no point did I, ASWT, Defendant Jane Doe and/or Arias ever sign any form of addendum to the retainer agreement.” Arias decl. ¶¶7, 8. The declaration is extrinsic evidence and is not judicially noticeable. The court cannot rely on such evidence when ruling on a demurrer. All allegations in the pleading – including allegations that Arias and ASWT were parties to an agreement with Pourat – must be treated as true on demurrer.

Nonetheless, the first cause of action is uncertain. It alleges “plaintiff entered into a written contract (contingency fee agreement) with Jane Doe, entitling plaintiff to 40% of the recovered damages[,]” then states “plaintiff entered into a written agreement with Arias and JJS[.]” Complaint ¶¶22, 23. It is unclear if these two alleged contracts are separate and if the cause of action is based on one or both. Additionally, though the claim is brought against all defendants, neither contract names ASWT as a party. The contract alleged in paragraph 22 is between Pourat and Doe; the contract in paragraph 23 is with Pourat, Arias and JJS. ASWT is not a party to either.

Paragraph 14 of the complaint references a fee sharing agreement and names all defendants as parties. If that contract is the basis of the first cause of action, Pourat must so state. SUSTAINED with 10 days leave to amend.

Breach of Contract (Fee Sharing Agreement)

This cause of action is uncertain. Paragraph 30 references a fee sharing agreement between Pourat, Arias, JJS and Doe; paragraph 31 references a fee sharing agreement between Pourat, Arias and JJS. It is unclear whether Pourat’s contract claim is based on two contracts or one, and which defendants were parties to each contract. SUSTAINED with ten days leave to amend.

Conversion

The elements of conversion are (1) plaintiff’s ownership or right to possession of property, (2) defendant’s conversion by a wrongful act or disposition of property rights, and (3) damages. Welco Electronics, Inc. v. Mors (2014) 223 Cal.App.4th 202, 208.

Arias and ASWT argue the complaint fails to allege Pourat’s ownership or a property right to possession of the settlement funds or conversion by a wrongful act or disposition. The court agrees as to the first objection. The conversion cause of action is derivative of the breach of contract claims, since Pourat’s alleged right to the funds derives from his contract (or contracts) with Doe and defendants. The complaint is uncertain as to how many contracts existed and the parties to each. Pourat must allege the contract or contracts that gives rise to his alleged property right in the disputed funds. SUSTAINED with ten days leave to amend.

Unjust Enrichment

This cause of action fails for vagueness. The complaint states “[t]he economic benefit derived from JANE DOE’s claims is a direct and proximate result of DEFENDANT’S unlawful practices,” but fails to clearly state these alleged unlawful practices. Complaint ¶44. Additionally, it is not clear which contract forms the basis of Pourat’s alleged right to receive the funds retained by defendants. SUSTAINED with ten days leave to amend.

Intentional Interference with Contractual Relations

As with the conversion claim, this cause of action is derivative of the breach of contract claims and fails for the same reason. The complaint contains numerous references to various contracts, with different parties – a retainer agreement, a fee sharing agreement with Arias, JJS and Doe, and an apparent second fee sharing agreement with JJS and Doe only. E.g., complaint ¶¶22, 23, 30, 31. The intentional interference cause of action references “its/their contract” and “the contract,” without clarifying which contracts it means. SUSTAINED with ten days leave to amend.

Fraud

The elements of a fraud cause of action are (1) misrepresentation, (2) knowledge of falsity, (3) intent to defraud, (4) justifiable reliance, and (5) damage. Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.

Defendants argue Pourat fails to allege a misrepresentation. The complaint alleges “Arias represented to plaintiff that Jane Doe does not want to pay Plaintiff’s attorney fee and does not consent to the share of the attorney fee,” but does not allege that representation was false. Complaint, pg. 8. The other causes of action rely on the assumption that the representation was true, and Doe did not want to pay the attorney fee. The complaint further alleges “defendants fraudulently colluded . . . to defraud plaintiff,” but does not allege any misrepresentation. SUSTAINED with ten days leave to amend.

Motion to Strike

Because the demurrer has been sustained as to all causes of action, the motion to strike is MOOT.