Judge: Frank M. Tavelman, Case: 22BBCV00461, Date: 2022-09-02 Tentative Ruling

Case Number: 22BBCV00461    Hearing Date: September 2, 2022    Dept: A

DEMURRER

ALLEGATIONS:

Mikayel Israyelyan ("Plaintiff") filed suit against Krikor Bardakjian, DDS (as an individual) (“Dr. Bardakjian”); Krikor Bardakjian DDS, Inc., a California Corporation (“KBDDS”); Noho Dental Group by Dr. Bardakjian DDS, Inc., a California Corporation (“NDG”); Sherman Oaks Dental Group by Krikor Bardakjian, a California Corporation (“SODG”); and 485 Cliff Dr., LLC, a California Limited Liability Company (“Cliff LLC”, and together, “Defendants”), alleging that Plaintiff partnered with Dr. Bardakjian from 2013, but that Dr. Bardakjian misappropriated partnership revenue.

Plaintiff filed a Complaint on June 24, 2022, alleging nine causes of action: (1) Breach of Contract; (2) Breach of Covenant of Good Faith and Fair Dealing; (3) Intentional Interference with Prospective Economic Advantage; (4) Slander; (5) Unjust Enrichment; (6) Conversion; (7) Accounting; (8) Fraud; and (9) Theft (Penal Code § 496).

Defendants filed a Cross-Complaint (“BXC”) on August 2, 2022, alleging fifteen causes of action sounding in: (1) Breach of Fiduciary Duty; (2) Conspiracy to Commit Fraud; (3) Fraud; (4) Intentional Misrepresentation; (5) Forgery; (6) Theft – Embezzlement (Penal Code §§ 484, 496); (7) Theft – Receipt of Stolen Property (Penal Code § 496); (8) Conversion; (9) Breach of the Covenant of Good Faith and Fair Dealing; (1) Unjust Enrichment; (11) Defamation – Slander; (12) Assault; (13) Battery; (14) Intentional Infliction of Emotional Distress; and (15) Negligent Infliction of Emotional Distress

HISTORY:

The Court received the Demurrer filed by Defendants on August 2, 2022; and the opposition filed by Plaintiff on August 22, 2022. The Court has not received any reply.

RELIEF REQUESTED:

Defendants demur to the first, third, fourth, sixth, seventh, eighth, and ninth causes of action of the operative Complaint.

ANALYSIS:

I.          LEGAL STANDARD

The grounds for a demurrer must appear on the face of the pleading or from judicially noticeable matters.  (CCP § 430.30(a); Blank v. Kirwan (1985) 39 Cal. 3d 311, 318.) A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) The only issue involved in a demurrer hearing is whether the complaint states a cause of action. (Ibid.)

A demurrer assumes the truth of all factual, material allegations properly pled in the challenged pleading. (Blank v. Kirwan, supra, 39 Cal. 3d at p. 318.) No matter how unlikely or improbable, the plaintiff’s allegations must be accepted as true for the purpose of ruling on the demurrer. (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.  App. 3d 593, 604.) But this does not include contentions; deductions; conclusions of fact or law alleged in the complaint; facts impossible in law; or allegations contrary to facts of which a court may take judicial notice.  (Blank, supra, 39 Cal. 3d at p. 318.)

Pursuant to CCP §§ 430.10(e) and (f), the party against whom a complaint has been filed may demur to the pleading on the grounds that the pleading does not state facts sufficient to constitute a cause of action, or that the pleading is uncertain, ambiguous and/or unintelligible. It is an abuse of discretion to sustain a demurrer if there is a reasonable probability that the defect can be cured by amendment. (Schifando v. City of Los Angeles (2003) 31 Cal. 4th 1074, 1082, as modified (Dec. 23, 2003).)

II.        MEET AND CONFER

CCP § 430.41(a) requires that the demurring party meet and confer with the party who filed the pleading that is subject to the demurrer at least 5 days before the date the responsive pleading is due, by telephone or in person, for the purpose of determining if the parties can resolve the objections to be raised in the demurrer. (CCP § 430.41.) The demurring party must file and serve a declaration detailing their meet and confer efforts. Failure to meet and confer is not grounds to overrule or sustain a demurrer, or grant or deny a motion to strike. (CCP §§ 430.41(a)(4) & 435.5(a)(4).)

The Court finds that meet and confer requirements have been satisfied to code. (Decl. Samson, ¶ 4.)

III.       MERITS

A.    First Cause of Action (Breach of Contract)

Defendants argue that the Letter of Intent (“LOI”) alleged by Plaintiff does not exist, and that Plaintiff did not attach the LOI to the Complaint or otherwise plead the operative words of the LOI, as required. Defendants also argue that the first cause of action does not specifically establish which contract terms were breached.

On review of the Complaint, the Court finds that the pleading sufficiently states a breach of contract cause of action. A plaintiff alleging a written breach of contract cause of action must attach the contract at issue to the complaint or plead the material terms. (Construction Protective Servs., Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198–99; San Diego Housing Comm’n v. Indust. Indem. Co. (1998) 68 Cal.App.4th 526, 536.) The pleading does allege the material terms of the LOI in paragraph 51, subsections a through e. The pleading also alleges that Defendants breached the LOI by depriving Plaintiff of the full benefits of her partnership, and by intentionally underreporting and concealing cash income. (Complaint, ¶ 53.) Finally, to the extent Defendants argue that the LOI does not exist, they are estopped from taking this position without further explanation because they have themselves alleged the existence of an LOI as an agreement in the BXC. (BXC, ¶ 28; see Valerio v. Andrew Youngquist Construction (2002) 103 Cal.App.4th 1264, 1271.)

The Court thus overrules the demurrer as to the first cause of action.

B.     Third Cause of Action (Intentional Interference with Prospective Economic Advantage)

The elements for the tort of intentional interference with prospective economic advantage are: “(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153.) The plaintiff must also plead that the defendant’s conduct was “wrongful by some legal measure other than the fact of interference itself.” (Ibid., citing Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 393.)

Defendants argue that the Complaint fails to sufficiently allege any prospective economic advantage lost and includes only speculative allegations. Defendants also argue the claim is vague, uncertain, and ambiguous.

On review of the Complaint, the Court finds that the Complaint only specifically references Dr. Bardakjian’s attempt to hire away employees and partners to support the intentional interference claim, and otherwise makes only general allegations. Plaintiff fails to set forth how Dr. Bardakjian’s actions are “wrongful by some legal measure other than the fact of interference itself”. (Ibid.)

The Court thus sustains the demurrer as to the third cause of action, with 20 days’ leave to amend.

C.     Fourth Cause of Action (Slander)

Slander is defined as a false and unprivileged publication, orally uttered, which, by natural consequence, causes actual damage. (Civ. Code § 46.) Slander must be alleged by way of the specific words or the substance of the defamatory statements, not merely the conclusion that statements were made that “intimated and suggested” the plaintiff had done wrong. (Ellenberger v. Espinosa (1994) 30 Cal.App.4th 943, 951.) Such language not defamatory on its face is also not actionable unless the plaintiff alleges that he has suffered special damage as a proximate result thereof. (See Pulver v. Avco Financial Services (1986) 182 Cal.App.3d 622, 638-39 (superseded by statute on other grounds).)

Defendants argue that Plaintiff cannot show that any alleged defamatory statements caused him legally cognizable damages. Defendants also argue the claim is vague, uncertain, and ambiguous.

On review of the Complaint, the Court finds that the pleading sufficiently alleges that Dr. Bardakjian called Plaintiff a “thief” to mutual acquaintances, friends, employees, and business associates. (Complaint, ¶ 70.) Labeling Plaintiff a “thief” qualifies as slander per se in that it tends to impute a negative association to her business relationships that has a natural tendency to lessen her profits. (Gonzalez v. Fire Ins. Exchange (2015) 234 Cal.App.4th 1220, 1240, fn. 5.) There is thus no requirement to plead special damages. (Ibid.) The Court also finds that the claim is not vague, uncertain, or ambiguous.

The Court thus overrules the demurrer as to the fourth cause of action.

D.    Sixth Cause of Action (Conversion)

Conversion is the wrongful exercise of dominion over the property of another. Money can be the subject of an action for conversion if a specific sum capable of identification is involved. (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 451-452.)

Defendants argue that Plaintiff does not allege an actual interference with Plaintiff’s ownership or right of possession, that Plaintiff does not allege a specific identifiable sum, and that Plaintiff has further waived her right to the money and is estopped by the doctrine of laches. Defendants also argue the claim is vague, uncertain, and ambiguous.

On review of the Complaint, the Court finds that the pleading alleges that Defendants converted partnership funds but does not identify a specific identifiable sum that was converted.

The Court thus sustains the demurrer as to the sixth cause of action, with 20 days’ leave to amend.

E.     Seventh Cause of Action (Accounting)

“An action for an accounting is equitable in nature. It may be brought to compel the defendant to account to the plaintiff for money or property, (1) where a fiduciary relationship exists between the parties, or (2) where, even though no fiduciary relationship exists, the accounts are so complicated that an ordinary legal action demanding a fixed sum is impracticable. [Citations].” (Los Defensores, Inc. v. Gomez (2014) 223 Cal.App.4th 377, 401) (quoting 5 Witkin, Cal. Procedure (2008) Pleading, § 819, p. 236.) “To plead a request for an accounting, a complaint “need only state facts showing the existence of the relationship which requires an accounting and the statement that some balance is due the plaintiff.” (Ibid.)

Defendants make substantially the same arguments for both the conversion and the accounting causes of action. Unlike a claim for conversion, an equitable claim for accounting, however, may be sustained through the Complaint’s allegations that Defendants are required to provide an accurate accounting of Dr. Bardakjian’s financial status, and that Plaintiff is owed more than $3,000,000. (Complaint, ¶¶ 81-84.)

The Court thus overrules the demurrer as to the seventh cause of action.

F.      Eighth Cause of Action (Fraud)

‘Fraud’ ‘concealment’ and ‘intentional misrepresentation’ are causes of action based on “deceit from an intentional misrepresentation. (Manderville v. PCG&S Group (2007) 146 Cal. App. 4th 1486, 1498, fn. 4.) The elements of fraud are: “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Charnay v. Cobert (2006) 145 Cal.App.4th 170, 184.) In California, fraud, including negligent misrepresentation, must be pled with specificity. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) “The particularity demands that a plaintiff plead facts which show how, when, where, to whom, and by what means the representations were tendered.” (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.) Fraud allegations need not be liberally construed, general pleading of the legal conclusion of fraud is insufficient, and every element of the cause of action for fraud must be alleged fully, factually and specifically. (Wilhelm v. Pray, Price, Williams & Russell (1986) 186 Cal. App. 3d 1324, 1331; see also Quelimane Co., Inc. v. Stewart Title Guaranty Co. (1998) 19 Cal. 4th 26, 47) (Specific to fraud is the rule of particularity in pleading; fraud is the only remaining cause of action in which specific pleading is required to enable the court to determine, on the basis of the pleadings alone, whether a foundation exists for the cause.)

Defendants argue that Plaintiff does not allege facts sufficient to sustain a fraud claim.

On review of the Complaint, the Court finds that while Plaintiff sufficiently alleges facts concerning the transfer of Cliff LLC, the facts concerning the other alleged fraudulent conduct, including the concealment of cash revenues, and the concealment of the Onyx Hospice ownership, require further specificity in the pleadings to maintain a fraud claim.

The Court thus sustains the demurrer as to the eighth cause of action, with 20 days’ leave to amend.

G.    Ninth Cause of Action (Penal Code § 496)

Penal Code § 496(a) provides that “[e]very person who buys or receives any property that has been stolen or that has been obtained in any manner constituting theft or extortion, knowing the property to be so stolen or obtained, or who conceals, sells, withholds, or aids in concealing, selling, or withholding any property from the owner, knowing the property to be so stolen or obtained” is subject to potential criminal and civil liability.

The wording of the statute indicates that a person who steals the property and the person who receives the stolen property must be two separate people: “Every person who buys or receives any property that has been stolen . . . .” (Penal Code § 496(a) (emphasis added).) If the same party performs both actions, this represents a theft claim, rather than a violation of Penal Code § 496. Plaintiff argues that Defendants obtained Plaintiff’s money and property through fraud and false pretense. (Oppo., 13:3-4.) Plaintiff may thus allege these facts through fraud claims.

The Court thus sustains the demurrer as to the ninth cause of action. Although Plaintiff has not shown that the addition of any facts will sufficiently support a Penal Code § 496 claim, the Court will grant leave to amend, as the Complaint has not been amended.

IV.       CONCLUSION

The Court thus sustains the demurrer as to the third, sixth, eighth, and ninth causes of action, with 20 days’ leave to amend; and overrules the demurrer as to the first, fourth, and seventh causes of action.

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RULING:

In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records.

ORDER

Defendants Krikor Bardakjian; Krikor Bardakjian DDS, Inc.; Noho Dental Group by Dr. Bardakjian DDS, Inc.; Sherman Oaks Dental Group by Krikor Bardakjian; and 485 Cliff Dr., LLC’S Demurrer came on regularly for hearing on September 2, 2022, with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows:

THE DEMURRER IS SUSTAINED AS TO THE THIRD, SIXTH, EIGHTH, AND NINTH CAUSES OF ACTION, WITH 20 DAYS’ LEAVE TO AMEND; AND OVERRULED AS TO THE FIRST, FOURTH, AND SEVENTH CAUSES OF ACTION.

IT IS SO ORDERED.

DATE:  September 2, 2022                           _______________________________

                                                                        F.M. TAVELMAN, Judge

                                                                        Superior Court of California

County of Los Angeles