Judge: Erick L. Larsh, Case: 2023-01310244, Date: 2023-08-31 Tentative Ruling

Defendants BLD Brands, LLC and Doug Pak’s Demurrer to Plaintiff Fernando Wang’s First Amended Complaint (“FAC”) is SUSTAINED, with 20-days leave to amend, as follows.

As to the 2nd causes of action for intentional misrepresentation, the Court finds that the FAC fails to sufficiently and particularly allege the element of justifiable reliance as required. Here, the FAC in paragraph 27 alleges that Defendant PAK, individually and as the manager of Defendant BLD, made certain representations, either orally or in writing, to Plaintiff on either February 24, 2018 or March 23, 2018. The FAC also alleges that the representations made by Defendants were false and incorrect at the time they were made; that Defendants knew them to be false when the representations were made; that the statements were made with the intent to deceive and defraud Plaintiff in order to induce him to enter into and continue performance of the purchase and sales contract (“PSA) and lease; and that Plaintiff was ignorant of the falsity of the representations and reasonably and justifiable relied on the representations as he was “induced to enter into and continue performance of the PSA and Lease”. (See FAC, ¶¶ 28-30.) As to the statements made on February 24, 2018, the FAC sufficiently pleads the elements of fraud as required. However, as to the oral representations made on or about March 23, 2018, the FAC fails to allege justifiable reliance because Plaintiff had already entered into and executed the PSA and Lease. (See FAC, Exhibit A, p. 15 which shows Lease dated 2/28/2018 was executed by Defendants on “3/16/2018”.) Plaintiff could not have “relied” on the representations made after the Lease was executed in entering into the PSA and Lease and the FAC fails to allege how these representations induced him to “continue performance of the PSA and Lease.”

As to the 3rd cause of action for negligent misrepresentation, the Court sustains the demurrer for the same reasons as noted above. The FAC fails to allege justifiable reliance.

As to Defendants’ contention that the claims are barred by the three-year statute of limitations and Economic Loss Rule, the Court OVERRULES these grounds for demurrer.