Judge: Frank M. Tavelman, Case: 22BBCV01162, Date: 2023-09-29 Tentative Ruling

Case Number: 22BBCV01162    Hearing Date: September 29, 2023    Dept: A

LOS ANGELES SUPERIOR COURT

NORTH CENTRAL DISTRICT - BURBANK

DEPARTMENT A

DEMURRER & MOTION TO STRIKE

MP      Mercury Casualty Insurance Company (Defendant)

RP:     Alpha Steam Pro, Natalex Enterprise Inc. dba Jumpin' Java, Healthy Bites Inc. (Plaintiffs)

ALLEGATIONS:

On December 12, 2023, Alpha Steam Pro, Natalex Enterprise Inc. dba Jumpin' Java, Healthy Bites Inc. (Collectively “Plaintiffs”) filed suit against Mercury Casualty Insurance Company (“Defendant”) alleging Defendant failed to pay out insurance benefits pursuant to an insurance agreement between the parties (“the Agreement”). The Complaint contained causes of action for (1) Breach of Contract, (2) Breach of The Covenant of Good Faith and Fair Dealing, (3) Unfair Business Practices Under Business and Professions Code § 17200, Et Seq., (4) Unjust Enrichment, (5) Negligent Misrepresentation, and (6) Declaratory Relief.

On May 5, 2023 the Court sustained a previous demurrer with leave to amend for Negligent Misrepresentation and to each of the remaining causes of action without leave to amend.

Plaintiffs subsequently filed their First Amended Complaint (“FAC”) which contains a singular cause of action for Negligent Misrepresentation to which Defendant now demurs.

The Court notes that Defendant move to strike portions of the FAC which repeat allegations in connection with the causes of action to which demurrer was sustained without leave. While a declaration was filed in connection with this motion to strike, the motion to strike itself was not filed.

ANALYSIS:

I.                    LEGAL STANDARDS

The grounds for a demurrer must appear on the face of the pleading or from judicially noticeable matters.  (C.C.P. § 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 Code of Civil Procedure (“C.C.P.”) §§ 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 without leave to amend 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.)

II.                 MEET & CONFER

C.C.P. §§ 430.41(a) and 435.5(a) requires that the moving party meet and confer with the party who filed the pleading that is subject to the demurrer and/or motion to strike. Upon review the Court finds the meet and confer requirements were met. (Duque Decl. ¶¶ 7-9.)

III.              MERITS

Plaintiff’s sole remaining cause of action is premised on alleged misrepresentations with respect to virus exclusions in Plaintiff’s insurance policies. The Court previously sustained Defendant’s demurrer to this cause of action for failure to plead misrepresentation with sufficient particularity.

While there is some conflict in the case law discussing the precise degree of particularity required in the pleading of a claim for negligent misrepresentation, there is a consensus that the causal elements, particularly the allegations of reliance, must be specifically pleaded. (National Union Fire Ins. Co. of Pittsburgh, PA v. Cambridge Integrated Services Group, Inc. (2009) 171 Cal.App.4th 35, 50.) For policy reasons, some causes of action, such as fraud and negligent misrepresentation, must be pleaded with particularity, that is, pleading must set forth how, when, where, to whom, and by what means representations were made. (Foster v. Sexton (2021) 61 Cal.App.5th 998, 1028.)

Defendant argues Plaintiffs have not alleged misrepresentation with sufficient particularity to sustain the cause of action. Defendant further argues no changes have been made to the FAC which addresses the Court’s previous concerns about particularity in the pleadings. The allegations in the FAC with respect to representations made to Plaintiffs are as follows:

·         Defendant represented to Plaintiffs that all loss of income in case of business closure and/or loss of business would be covered;

·         [T[hat such coverage would be for the length of period stated in the subject insurance policy and declarations page.

·         At the time of purchasing the policies and throughout subsequent renewals, Defendant explicitly communicated to Plaintiffs that their coverage would encompass all forms of loss of income, without any disqualifying factors.

·         Specifically, Defendant made explicit representations regarding the coverage provided under the insurance policies, assuring Plaintiffs that their loss of business income would be fully compensated even in the event of closures or disruptions.

(FAC ¶ 78.)

The Court agrees that these allegations remain insufficient to support a cause of action for negligent misrepresentation. The Complaint only contains conclusory allegations that Defendant misrepresented the scope of the insurance coverage without averring to the particulars of this misrepresentation. There are no allegations as to where these misrepresentations were made, who made them, when they were made, or by what means they were made. Plaintiffs simply state that Defendant misrepresented the scope of the coverage without any detail. The Court clearly signaled to Plaintiffs during the previous hearing which facts needed to be added to their complaint, yet none were added. Given this failure, the Court concludes there is no reasonable possibility Plaintiffs can further amend to add sufficient factual allegations

As such, the Court SUSTAINS the demurrer to cause of action for Negligent Misrepresentation without leave to amend.

Given the Court has sustained the demurrer to all causes of action without leave to amend, the motion to strike the certain factual allegations is MOOT.

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

Mercury Casualty Insurance Company’s Demurrer came on regularly for hearing on September 29, 2023, 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 WITHOUT LEAVE TO AMEND.

THE MOTION TO STRIKE IS MOOT.

UNLESS ALL PARTIES WAIVE NOTICE, DEFENDANT TO GIVE NOTICE.

IT IS SO ORDERED.

DATE:  September 29, 2023                              

_______________________________

                                                                        F.M. TAVELMAN, Judge

                                                                        Superior Court of California

County of Los Angeles