Judge: Frank M. Tavelman, Case: 23BBCV00102, Date: 2023-09-29 Tentative Ruling

Case Number: 23BBCV00102    Hearing Date: September 29, 2023    Dept: A

LOS ANGELES SUPERIOR COURT

NORTH CENTRAL DISTRICT - BURBANK

DEPARTMENT A

DEMURRER

ALLEGATIONS:

Landmark Construction and Development Group, Inc. (“Plaintiff”) brings this action against Christopher Conte (“Conte”), Laurel Ventura Place, LLC (“Ventura”), and Treadgruv, LLC (“Treadgruv”) (collectively “Defendants”). Plaintiff alleges Defendants owe approximately $240,244.46 for construction work Plaintiff conducted at 12080 Ventura Place, Unit 1, Studio City, California 91604 (“Property”). It is undisputed that Ventura is the owner of the property.

The Complaint contains causes of action against each Defendant for (1) Breach of Contract, (2) Services Rendered, (3) Unjust Enrichment, (4) Quantum Meruit, (5) Open Book Account, (6) Foreclosure of Mechanic’s Lien, (7) Intentional Misrepresentation, and (8) Negligent Misrepresentation.

Ventura now demurs to each cause of action. Conte and Treadgruv demur to the sixth cause of action. Plaintiff opposes and Defendants reply.

ANALYSIS:

I.            LEGAL STANDARD

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. (Id.)

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 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.            REQUEST FOR JUDICIAL NOTICE

Defendants request judicial notice of (1) a Recorded Mechanic’s Lien No. 20221061494, (2) the Grant Deed for the Property, (3) the agreement between the parties, (4) Ventura’s Articles of Organization, (5) Ventura’s Secretary of State (“SOS”) info, (6) further SOS info for Ventura, (7) Treadgruv’s Articles of Organization, (8) Treadgruv’s SOS info, and (9) further SOS info for Treadgruv. Defendants seek notice of these documents pursuant to Evidence Code § 452(h), which allows judicial notice of facts which are not reasonably disputable. Plaintiff does not object to the judicial notice.

Judicial notice will be granted of the agreement between parties to the extent that it establishes a contract exists between Conte and Plaintiff. Plaintiff does not dispute that the contract exists, and it appears their failure to attach the contract to the Complaint was an oversight.

As concerns the rest of the documents, the Court DENIES the request. These documents are irrelevant to the Court’s determination of whether Plaintiff’s pleadings state sufficient facts. It appears Defendants offer these documents to refute the factual allegations of the Complaint. Defendant’s purpose does not speak to the standard for a demurrer.

III.            MEET AND CONFER

C.C.P. §§ 430.41(a) requires that the moving party meet and confer with the party who filed the pleading that is subject to the demurrer. Upon review the Court finds the meet and confer requirements were met. (Lopez Decl. ¶¶ 4-5.)

IV.            MERITS

Breach of Contract – 1^st COA – Sustained with Leave to Amend

To state a cause of action for breach of contract, Plaintiff must be able to establish “(1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)

Ventura argues Plaintiff has not pled a contractual relationship between them. Ventura argues Plaintiff’s theory of contractual liability relies upon the allegation that Conte is an officer of Ventura and that a unity of interest exists between Ventura, Treadgruv, and Conte. Ventura points to the contract, judicially noticed as Exh. C, which does not name Ventura as a party. In essence, Ventura argues Plaintiff has inadequately pleaded its theory of alter ego liability.

To establish an “alter ego” theory at the pleading stage, sufficient facts must be alleged, and these facts must show (1) “unity of interest and ownership” and (2) an unjust result if the corporate entity is treated as a sole actor. (Leek v. Cooper (2011) 194 Cal. App. 4th 399, 417.) Ownership is just one of many factors that can be considered. (Leek supra, 194 Cal. 4th at 417-418.) “No single factor is determinative, and the result depends on the circumstance of each case.” (Id. at 418.) Additionally, evidentiary facts are not required to support an alter ego theory. (Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 236.)

Here, Plaintiff alleges that Ventura and Treadgruv were so undercapitalized as to render their capitalization illusory. (Compl. ¶ 11.) Plaintiff also alleges Conte was an officer of both Treadgruv and Ventura and that each had an interest in the subject property. (Compl. ¶¶ 4-6.) However, Plaintiff makes no allegations with respect to the disregard of corporate formalities, the comingling of funds, or how injustice would arise if the entities were treated separately. As such, the allegations of the Complaint fall below even the low pleading bar set by Rutherford and are insufficient on demurrer. The Court finds it reasonable that Plaintiff could amend these allegations with additional facts.

Accordingly, Ventura’s demurrer to the first cause of action is SUSTAINED with 20 days’ leave to amend. 

Services Rendered – 2^nd COA – Overruled

“To recover in quantum meruit, a party need not prove the existence of a contract, but it must show the circumstances were such that the services were rendered under some understanding or expectation of both parties that compensation therefor was to be made.” (Chodos v. Borman (2014) 227 Cal.App.4th 76, 96, citations and quotation marks omitted.) “[I]n order to recover under a quantum meruit theory, a plaintiff must establish both that he or she was acting pursuant to either an express or implied request for such services from the defendant and that the services rendered were intended to and did benefit the defendant.” (Day v. Alta Bates Medical Center (2002) 98 Cal.App.4th 243, 248.)

Ventura argues Plaintiff’s second cause of action must also be subject to demurrer on the basis that they fail to allege alter-ego. The Court disagrees. The cause of action for quantum meruit does not require the existence of a contract, only that an agreement for services existed in some capacity. Here, Plaintiff alleges that each of the Defendants requested services of Plaintiff which were thereafter performed. Ventura points to no authority that more specificity is required to plead a quantum meruit cause of action. Whether Plaintiff can ultimately prove Ventura requested services is irrelevant to the standard of a demurrer.

Accordingly, Ventura’s demurrer to the second cause of action is OVERRULED.

Unjust Enrichment – 3^rd COA – Overruled

“The elements for a claim of unjust enrichment are receipt of a benefit and unjust retention of the benefit at the expense of another. The theory of unjust enrichment requires one who acquires a benefit which may not justly be retained, to return either the thing or its equivalent to the aggrieved party so as not to be unjustly enriched.” (Lyles v. Sangadeo-Patel (2014) 225 Cal.App.4th 759, 769, quotation marks and citations omitted.)

Ventura argues that the Complaint does not allege a benefit conferred upon Ventura by Plaintiff. Ventura states that the documents in its request for judicial notice establish that Ventura was not a party to the contract. Ventura also argues Plaintiff has not alleged Conte had authority to bind Ventura to that agreement. The Court finds these arguments unpersuasive relative to a demurrer to this cause of action. Plaintiff alleges Ventura received the benefit of construction work Plaintiff performed and that Plaintiff was not paid for these services. (Compl. ¶¶ 24-26.)

Ventura also argues that there is a split in authority in California determining if unjust enrichment is a cause of action or simply a restitution claim. The Court finds this argument unpersuasive. The Supreme Court of California has stated, “If the complaint states a cause of action under any theory, regardless of the title under which the factual basis for relief is stated, that aspect of the complaint is good against a demurrer.” (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38 See also Sheehan v. San Francisco 49ers, Ltd. (2009) 45 Cal.4th 992, 998.)

Accordingly, Ventura’s demurrer to the third cause of action is OVERRULED.

Quantum Meruit – 4^th COA – Sustained without Leave to Amend

A demurrer may be sustained when a cause of action is duplicative of another cause of action and “thus adds nothing to the complaint by way of fact or theory of recovery.” (Rodrigues v. Campbell Industries (1978) 87 Cal.App.3d 494, 501; see Palm Springs Villas II Homeowners Association, Inc. v. Parth (2016) 248 Cal.App.4th 268, 290.)

Here, Plaintiff’s cause of action for quantum meruit is identical to its second cause of action for services rendered. The cause of action adds nothing in the way of theory of recovery to the Complaint.

Accordingly, Ventura’s demurer to the fourth cause of action is SUSTAINED without leave to amend.

Open Book Account – 5^th COA – Sustained with Leave to Amend

“The term ‘book account’ means a detailed statement which constitutes the principal record of one or more transactions between a debtor and a creditor arising out of a contract or some fiduciary relation, and shows the debits and credits in connection therewith, and against whom and in favor of whom entries are made, is entered in the regular course of business as conducted by such creditor or fiduciary, and is kept in a reasonably permanent form and manner and is (1) in a bound book, or (2) on a sheet or sheets fastened in a book or to backing but detachable therefrom, or (3) on a card or cards of a permanent character, or is kept in any other reasonably permanent form and manner.” (C.C.P. § 337a.)

“A book account is ‘open’ where a balance remains due on the account. (Eloquence Corp. v. Home Consignment Ctr. (2020) 49 Cal.App.5th 655, 664-65, citation omitted.)

Ventura argues Plaintiff has alleged no facts with respect to the existence of any account between them. Plaintiff argues in opposition that they have provided Defendants with the statements of the balance due and owing between them. The Court finds the allegations of this cause of action to be threadbare. Nowhere in the Complaint is an account mentioned, nor is any statement of an account attached. Such records may exist, but Plaintiffs have yet to even aver to their existence.

Accordingly, Ventura’s demurrer to the fifth cause of action is SUSTAINED with 20 days’ leave to amend.

Foreclosure Of Mechanic’s Lien – 6^th COA – Sustained with Leave to Amend

Defendants argue the cause of action for foreclosure of mechanic’s lien is insufficiently pled because the mechanic’s lien is defective. Defendants argue they did not receive notice of the lien mentioned in the Complaint pursuant to Cal. Civ. Code §8200. Whether or not Defendants received notice of the mechanic’s lien is irrelevant for purposes of a demurrer. The validity of the alleged mechanic’s lien has no bearing on the sufficiency of Plaintiff’s pleadings.

However, Plaintiff has attached no mechanic’s lien to their complaint despite the Complaint citing to the lien as Exhibit D. Defendants have sought judicial notice of a mechanics lien recorded against the Property on November 9, 2022. (RJI Exh. A.) Conversely, Plaintiff’s complaint refers to a lien filed August 23, 2021. (Compl. ¶35.) It is not clear to the Court that these two liens are one in the same. As it stands, Plaintiff’s complaint states insufficient facts as to the mechanic’ lien for failure to attach the document. Should Plaintiff attach that document, its allegations would likely be sufficient to survive demurrer.

Accordingly, Defendants’ demurrer to the sixth cause of action is SUSTAINED with 20 days’ leave to amend.

Intentional Misrepresentation – 7^th COA – Sustained with Leave to Amend

“The elements of a cause of action for intentional misrepresentation are (1) a misrepresentation, (2) with knowledge of its falsity, (3) with the intent to induce another’s reliance on the misrepresentation, (4) actual and justifiable reliance, and (5) resulting damage.” (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1166.) The facts constituting the alleged fraud must be alleged factually and specifically as to every element of fraud, as the policy of “liberal construction” of the pleadings will not ordinarily be invoked. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

To properly allege fraud against a corporation, the plaintiffs must plead the names of the persons allegedly making the false representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.)

Plaintiff’s allegations in this cause of action generally refer to “Defendants” rather than Ventura, Conte, or Treadgruv individually. Plaintiff alleges each Defendant misrepresented to Plaintiff the ability to pay for the construction on the Property. (Compl. ¶ 41.) Plaintiff also alleges each Defendant made misrepresentations of material fact to representatives of Plaintiff to ensure Plaintiff that Defendants had the necessary funds. (Compl. ¶ 43.)

The Court finds the factual allegations fall short of the specificity required to plead fraud against Ventura. Plaintiff makes no representations as to who at Ventura made these representations, to whom they were made, when they were made, or as to what facts they were made. Plaintiff may be able to make these allegations, but they have not done so here.

Accordingly, Ventura’s demurrer to the seventh cause of action is SUSTAINED with 20 days’ leave to amend.

Negligent Misrepresentation – 8^th COA – Sustained with Leave to Amend

The elements of a cause of action for negligent misrepresentation include “[m]isrepresentation of a past or existing material fact, without reasonable ground for believing it to be true, and with intent to induce another’s reliance on the fact misrepresented; ignorance of the truth and justifiable reliance on the misrepresentation by the party to whom it was directed; and resulting damage.” (Hydro-Mill Co., Inc. v. Hayward, Tilton & Rolapp Ins. Associates, Inc. (2004) 115 Cal.App.4th 1145, 1154, quotation marks omitted.) The same requirements of specificity for actions for intentional misrepresentation apply to actions for negligent misrepresentation. (See Lazar supra 12 Cal.4th 631 at 645; Tarmann supra 2 Cal.App.4th 153 at 157.)

Plaintiff’s eighth cause of action repeats verbatim the factual allegations in its seventh cause of action. As such, Plaintiff’s general allegation of misrepresentation by Ventura are similarly insufficient to support a cause of action for negligent misrepresentation.

Accordingly, Ventura’s demurrer to the eighth cause of action is SUSTAINED with 20 days’ leave to amend.

RULING:

In the event the parties request 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

Christopher Conte, Laurel Ventura Place, LLC, and Treadgruv, LLC 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 WITH 20 DAYS’ LEAVE TO AMEND AS TO THE FIRST, FIFTH, SIXTH, SEVENTH, AND EIGHTH CAUSES OF ACTION.

THE DEMURRER IS OVERRULED AS TO THE SECOND AND THIRD CAUSES OF ACTION.

THE DEMURRER IS SUSTAINED WITHOUT LEAVE TO AMEND AS TO THE FOURTH CAUSE OF ACTION.  

UNLESS ALL PARTIES WAIVE NOTICE, DEFENDANT LAUREL VENTURA PLACE, LLC TO GIVE NOTICE.

IT IS SO ORDERED.

DATE:  September 29, 2023                              

_______________________________

                                                                        F.M. TAVELMAN, Judge

                                                                        Superior Court of California

County of Los Angeles