Judge Gail Killefer, Case Number: 20STCV38914, Date: 2024-02-13 Tentative Ruling

CASE NAME: Emsaffa Corporation, a Delaware Corporation v. Steven Powers, as trustee under Amended and Restated Trust Agreement for R.E.I. 401(k) Trust entered into December 29, 2009 and effective as of January 1, 2009, et al.¿

MOVING PARTY: Cross-Defendants Ahmad M. Alomani and Markab Capital General Trading Co. SPC

TENTATIVE: Cross-Defendants Alomani and Markab’s demurrer to the FACC is sustained in its entirety with leave to amend as to the seventh, eighth, ninth, and eleventh causes of action and without leave to amend as to the tenth cause of action. Cross-Defendants motion to strike punitive damages from the FACC is granted without leave to amend and granted with leave to amend as attorney’s fees and costs as they relate to Cross-Defendants Alomani and Markab.

Cross-Complainant is granted __ days leave to amend. The OSC re: Amended Complaint is set for __. Cross-Defendants to give notice.

This is an action for quiet title arising in connection with various properties with APN numbers 4419-015-196, 4419-015-197, 4419-015-022 and 4419-015-026 (the “Properties”). Plaintiff Emsaffa Corporation (“Emsaffa”) alleges that Defendants, Steven Powers, as trustee under Amended and Restated Trust Agreement for R.E.I. 401(k) Trust entered into December 29, 2009, and effective as of January 1, 2009 (“Powers”), Marcos Vivian (“Vivian”) and Marquez Pacific View, LLC (“MPV”) each claim an interest in the Properties. Emsaffa alleges that because it is the lender and beneficiary of the Properties, it holds a Deed of Trust secured by the Properties and now seeks to secure that interest.¿¿

Emsaffa’s Complaint alleges two causes of action: (1) quiet title; and (2) declaratory relief.¿¿

On January 20, 2021, Marquez filed a Cross-Complaint against Emsaffa and Cross-Defendants, Ahmad M. Alomani (“Alomani”), Vicino Limited Partnership (“Vicino”), Markab Capital Will, a Kuwait Company (“Markab”). According to the Cross-Complaint, Cross-Defendants, who are lenders and investors, have allegedly implemented a scheme to obtain property owned by Marquez by preventing Marquez from redeeming on the loan, charging usurious interest, and conducting other improper lending practices.¿¿

The Cross-Complaint alleges ten causes of action: (1) declaratory relief as to the existence of usury and amount due on usurious contract against Emsaffa, (2) declaratory relief as to the 18% default interest rate against Emsaffa, (3) declaratory relief as to other amounts demanded by Emsaffa, (4) declaratory relief as to notice of default against Emsaffa, (5) cancellation of instrument against Emsaffa, (6) breach of contract against Emsaffa, (7) intentional interference with prospective economic relations against all cross-defendants, (8) intentional interference with economic relations against Alomani and Markab, (9) fraudulent concealment against all cross-defendants, (10) conspiracy against all cross-defendants, (11) unfair, unlawful and fraudulent business acts and practices against all cross-defendants.¿¿

On June 29, 2021, Emsaffa’s demurrer to the Cross-Complaint was sustained as to the eighth cause of action. On July 29, 2021, MPV filed the operative First Amended Cross-Complaint. (“FACC”).¿

On October 1, 2021, Emsaffa filed the operative Second Amended Complaint (“SAC”) alleging identical causes of action.

On June 8, 2022, Emsaffa filed its Motion for summary judgment or, in the alternative, Summary Adjudication. Defendant Powers opposed the motion. On November 8, 2022, the court denied the motion for summary judgment and summary adjudication.

On December 1, 2023, Cross-Defendants Ahmad M. Alomani (“Alomani) and Markab Capital General Trading Co. SPC (“Markab”) filed a demurrer to the seventh, eighth, ninth, tenth, and eleventh causes of action in the FACC with a motion to strike attorneys’ fees as to Alomani and Markab and punitive damages. Cross-Complainant MPV opposes the demurrer and motion to strike. The matter is now before the court.

demurrer[1]

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (CCP § 430.30(a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)¿“To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.”¿(C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.)¿For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded.¿ (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.)¿A demurrer “does not admit contentions, deductions or conclusions of fact or law.”¿(Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)¿¿

¿Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof. (CCP § 435(b)(1); CRC, rule 3.1322(b).) The court may, upon a motion or at any time in its discretion and upon terms it deems proper: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (CCP § 436(a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [“Matter in a pleading which is not essential to the claim is surplusage; probative facts are surplusage and may be stricken out or disregarded”].)¿¿¿¿

“Where the defect raised by a motion to strike or by demurrer is reasonably capable of cure, leave to amend is routinely and liberally granted to give the plaintiff a chance to cure the defect in question.” (CLD Construction, Inc. v. City of San Ramon (2004) 120 Cal.App.4th 1141, 1146.) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.)¿¿¿

“A recorded deed is an official act of the executive branch, of which this court may take judicial notice.” (Ragland v. U.S. Bank National Assn. (2012) 209 Cal.App.4th 182, 194; see also Evid. Code, §§ 452(c), 459(a).) “Taking judicial notice of a document is not the same as accepting the truth of its contents or accepting a particular interpretation of its meaning.” (Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374.)

1) That certain NOTICE OF DEFAULT AND ELECTION TO SELL UNDER DEED OF TRUST, which was recorded in the official records of the Los Angeles County Recorder’s Office on December 14, 2018, as Instrument No.: 20181268882, a copy of which is attached hereto as Exhibit A.

2) That certain ASSIGNMENT OF DEED OF TRUST, which was recorded in the official records of the Los Angeles County Recorder’s Office on October 25, 2019, as Instrument No.: 20191147840, a copy of which is attached hereto as Exhibit B.

Cross-Complainant MPV objects to Cross-Defendants request for judicial notice on the basis that Exhibit 2 is not properly authenticated and that Exhibit B “does not bear adequate evidence of recording or that it correlates with the original document recorded.

There is no requirement that documents subject to judicial notice “be sworn or certified before a court can take judicial notice of the documents.” (Thayer v. Kabateck Brown Kellner LLP (2012) 207 Cal.App.4th 141, 156.) Cross-Complainant MPV fails to explain how the above documents are reasonably subject to dispute such that the court may not take judicial notice of these records. (Evid. Code § 451(f).)

“Where, as here, judicial notice is requested of a legally operative document—like a contract—the court may take notice not only of the fact of the document and its recording or publication, but also facts that clearly derive from its legal effect. [Citation.] Moreover, whether the fact derives from the legal effect of a document or from a statement within the document, the fact may be judicially noticed where, as here, the fact is not reasonably subject to dispute.” (Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 754 [italics original].)

The court overrules Cross-Complainant MPV’s objections to the request for judicial notice and grants Cross-Defendants’ request for judicial notice.

1) The Court’s (Judge Burdge) June 29, 2022, Minute Order. (See Declaration of Benjamin S. Tragish in Support of Request for Judicial Notice, ¶ 3.)

A court may take judicial notice of contents of its own records. (Dwan v. Dixon (1963) 216 Cal.App.2d 260, 265; Foster v. Gray (1962) 203 Cal.App.2d 434, 439.)

Accordingly, the court grants Cross-Complainant MPV’s request for judicial notice.

The FACC alleges that Cross-Defendant Alomani is the Chairman of Cross-Defendant Markab. (FACC ¶ 4.) Cross-Defendant Alomani is also the Chief Executive Officer, Secretary, and Chief Financial Officer of Plaintiff Emsaffa. (FACC ¶ 3.)

On August 5, 2015, Cross-Complainant MPV borrowed $1,600,00 from Cross-Defendant Vicino pursuant to a Promissory Note Secured by Deed of Trust (the “Promissory Note”). (FACC ¶ 10, Ex. A.) MPV asserts that the 12% interest rate on the Promissory Note “was usurious under California law. (FACC ¶ 15, Ex. A, ¶ 1.1.) Moreover, the Promissory Note contains an “Interest on Default” provision of 18% that amounts to “unenforceable liquidated damages under California law and is unconscionable.” (FACC ¶ 19.) The FACC alleges that Streit Capital, the broker who made or arranged the loan, is the alter ego of Vicino. (FACC ¶¶ 12, 13, 16.) Concurrently with the Promissory Note, MPV executed a Deed of Trust, Assignment of Leases, Rents, Fixture Filing, and Security Agreement (the “Deed of Trust”) on several parcels of land owned by MPV described as APN Nos. 4419-015-196, 4419-015-197, 4419-015-022, and 4419-015-026 (the “Property”). (FACC ¶ 14, Ex.B.)

In 2016, Cross-Defendants Alomani and Markab purchased a membership interest in PMV via their affiliates, the Alomani Members. (FACC ¶ 33.) The FACC alleges that Alomani and Markab brokered the investments without proper licensing from the state of California and that Alomani and Markab represent the Alomani Members in their dealings with MPV. (FACC ¶ 34.)

In August 2017, the Third Modification of the Promissory Note and Deed of Trust was executed between MPV and Vicino, but Vicino withheld $624,600.00 from the load and because those funds were not disbursed, it “damaged [MPV’s] ability to develop the Property and prevented it from fulfilling its loan obligations.” (FACC ¶ 24.) The parties entered into a fourth loan modification on May 11, 2018, but the loan was never recorded and the maturity date of the Promissory Note was extended to August 1, 2018. (FACC ¶ 26.)

MPV was in negotiations with Vicino regarding a modification and/or forbearance of the Promissory Note when, in December 14, 2018, Best Alliance Foreclosure and Lien Service, Corp. (“Best Alliance”), pursuant to instructions from Vicino, recorded a Notice of Default and Election to Sell Under Deed of Trust against the Property (the “Notice of Default”), asserting that MPV had defaulted under the loan. (FACC ¶ 27; Cross-Defendants RJN Ex. A.)

On April 1, 2019, MPV entered into a Forbearance Agreement, wherein Vicino agreed to forbear filing a Notice of Trustees Sale or any other remedy under the loan documents until October 1, 2019. (FACC ¶ 38.) During this time, MPV and Vicino continued to discuss another modification or forbearance of the loan, negotiations of which Alomani and Markab were aware of (FACC ¶40.)

In September 2019, Vicino stopped any further discussions with MPV about the loan because Emsaffa informed Vicino it was interested in purchasing the Property. (FACC ¶¶ 41-44.) On September 26, 2019, Vicino and Emsaffa entered a Letter of Intent (“LOI”) whereby Emsaffa would purchase the loan from Vicino for $3,384,484.02, a fact that was not disclosed to MPV. (FACC ¶ 48.) Alomani negotiated the Loan Sale Agreement with Vicino, which consummated the purchase on or about October 3, 2019. (FACC ¶ 49.) This fact was also not disclosed to MPV. (FACC ¶ 49.) Emsaffa recorded an Assignment of Deed of Trust of the First, Second, and Third Modification from Vicino to Emsaffa Corp on or about October 25, 2019. (FACC ¶ 52.) The FACC alleges that because the Assignment of the Deed of Trust does not assign the Fourth Modification from Vicino to Emsaffa, Emsaffa is not the true owner or beneficial holder of the Loan. (FACC ¶53.)

The FACC alleges that in March 2019, Alomani and Markab tried to purchase the Loan but the sale fell through. Then, Alomani and Marab created Emsaffa to purchase the Property knowing that an invalid and void Notice of Default had been recorded. (FACC ¶¶ 56, 58.) Alomani, Markab, and Emsaffa threatened to foreclose on the loan unless PMV sold the Property at a greatly reduced price. (FACC ¶ 59.)

On November 3, 2020, MPV offered to redeem the loan, but the itemized payoff statement included miscellaneous charges that were unexplained, unsupported, and failed to reflect “several hundred thousand dollars or payments.” (FACC ¶¶ 61, 62, 74.) The December 22, 2020, and December 30, 2022, payoffs also included fees and a usurious interest rate that MPV was not required to pay under the loan. (FACC ¶¶ 65, 66.) “Emsaffa Corp.’s gamesmanship and refusal to provide an accurate accounting of the Loan is wrongful and transparently designed to prevent Marquez Pacific from redeeming the Loan so that Alomani and Markab Capital can obtain a favorable purchase price for the Property either in negotiations or at a wrongful foreclosure sale.” (FACC ¶ 67, see also ¶ 69.)

Cross-Defendants Alomani and Markab (hereinafter “Cross-Defendants”) demur to the seventh, eighth, ninth, tenth, and eleventh causes of action as alleged against them in the Cross-Complaint on the grounds that those causes of action fail to state sufficient facts to constitute a cause of action and it is uncertain and vague. (CCP § 430.10(e), (f).)

B. Seventh Cause of Action - Intentional Interference with Prospective Economic Relations

The tort of intentional interference with prospective economic relations is the tort of intentional interference with prospective economic advantage. (See Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 378 [Analyzing the burden of proof and the “the elements of the tort variously known as interference with ‘prospective economic advantage,’ ‘prospective contractual relations,’ or ‘prospective economic relations’[.]”].) Subsequently, in Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153 and Ixchel Pharma, LLC v. Biogen, Inc. (2020) 9 Cal.5th 1130, 1141, the California Supreme Court reiterated that the correct name of the tort was intentional interference with prospective economic advantage.

To state a claim for the tort of intentional interference with prospective economic advantage (IIPEA), the claimant must allege: (1) an economic relationship between the claimant and some third party, with the probability of future economic benefit to the claimant; (2) the defendant or cross-defendant’s knowledge of the relationship; (3) intentional acts on the part of the defendant or cross-defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the claimant proximately caused by the acts of the defendant.¿(Marsh v. Anesthesia Services Medical Group, Inc. (2011) 200 Cal.App.4th 480, 504.)

“[A]s our Supreme Court has said time and again, an actor’s breach of contract, without more, is not ‘wrongful conduct’ capable of supporting a tort [citations], including the tort of intentional interference with a prospective economic advantage.” (Drink Tank Ventures LLC v. Real Soda in Real Bottles, Ltd. (2021) 71 Cal.App.5th 528, 533.). “[A]n act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.” (Korea Supply, supra, 29 Cal.4th at p. 1138.) “[W]e treat[] interference with contractual relations and interference with prospective economic advantage as two species of the same tort. [Citation.] Each tort contained the same elements with the exception that interference with contractual relations required the existence of a binding contract.” (Ixchel Pharma, supra, 9 Cal.5th at p. 1141.)

The FACC alleges that MPV has an existing contractual relationship with Vicino consisting of the Loan and Forbearance Agreement and that MPV was in “negotiations with Vicino regarding a further forbearance and/or modification of the Loan that would have been beneficial to [MPV].” (FACC ¶ 108.) Emsaffa and Cross-Defendants knew or should have known of MPV’s contractual relationship with Vicino and induced Vicino to conceal the sale of the Loan to Emsaffa and cease negotiations regarding forbearance and modification of the loan so that MPV was unable to secure forbearance and/or modification under the loan. (FACC ¶¶ 109, 110.) Cross-Defendants acted wrongfully to conceal the sale of the Loan to Emsaffa. (FACC ¶ 110.)

Cross-Defendants’ demurrer asserts that the seventh cause of action fails to plead an independent wrongful act that Cross-Defendants engaged in a wrongful act as “proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.” (Korea Supply, supra, 29 Cal.4th at p. 1159.) “[S]uch an act must be wrongful by some legal measure, rather than merely a product of an improper, but lawful, purpose or motive.” (Id, at fn. 11.) The court agrees the FACC fails to allege how Cross-Defendants engaged in an independent wrongful act sufficient to support a cause of action for IIPEA. The mere assertion that Cross-Defendants acted wrongfully to conceal the sale of the Loan is insufficient to show an independent wrongful act, because Cross-Complaint fails to explain why the concealment by Cross-Defendants was unlawful.

In opposition, Cross-Complainant MPV alleges that a UCL claim and both fraudulent and misrepresentation and fraudulent concealment, are sufficient wrongful conduct to support an IIPEA claim. While the court agrees that such conduct would constitute an independent wrongful act, such allegations are conclusory and not pled in the seventh cause of action. Facts not alleged in the pleading are presumed to not exist. (Schick v. Lerner (1987) 193 Cal.App.3d 1321, 1327.) Moreover, to the extent that MPV asserts that Cross-Defendants caused Vicino to misrepresent its intentions regarding the Loan, the legal doctrine of conspiracy may be used to impose liability on persons who do not actually commit the tort but share with the immediate tortfeasor a common plan or design in the preparation of the tort. (See City of Industry v. City of Fillmore (2011) 198 Cal.App.4th 191, 211–212.) However, no claims of a conspiracy by Cross-Defendant to perpetrate fraudulent misrepresentations are alleged in the seventh cause of action to show an independent wrongful act by Cross-Defendants.

Accordingly, the demurrer to the seventh cause of action is sustained with leave to amend.

C. Eighth Cause of Action - Intentional Interference with Economic Relations

The FACC alleges that Cross-Defendants intentionally interfered with MPV’s relationship with Emsaffa by causing Emsaffa Corp. to improperly inflate that amounts due under the Loan to force MPV to sell the Property to Cross-Defendants at a reduced price. (FACC ¶ 114-116.)

In addition, Cross-Defendants knew that MPV had an existing contractual relationship with the Alomani Members and intentionally interrupted this relationship by requiring MPV to use over $1,000,000 of the money invested by the Alomani members to purchase an unrelated loan from “Shata Family Holdings Limited” at an inflated price. (FACC ¶ 120.)

Cross-Defendants again demur to the eighth cause of action on the grounds that it fails to allege what independent wrongful act Cross-Defendants engaged in to support an IIPEA claim. Even if the loan is usurious, the FACC fails to allege that Cross-Defendants were responsible for the usurious loan or induced MPV to accept a usurious loan. Similarly, with respect to “Shata Family Holdings Limited,” Cross-Complainant MPV fails to allege what in wrongful independent act Cross-Defendants engaged in that related to this transaction. Cross-Complainant also fails to explain how agreeing to this loan disrupted the contractual relationship with the Alomani Members.

Moreover, the FACC alleges that Cross-Defendants own and control Emsaffa. (FACC ¶¶ 3, 45, 58.) The Cross-Defendants are also alleged to control the Alomani Members. (FACC ¶¶ 33, 34.)

“The tort duty not to interfere with the contract falls only on strangers—interlopers who have no legitimate interest in the scope or course of the contract's performance.” (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 514 (Applied Equipment).) For this reason, a party who is not a stranger to the contract or economic relationship cannot be held liable in tort for conspiring to interfere with its own contract. (Asahi Kasei Pharma Corp. v. Actelion Ltd. (2013) 222 Cal.App.4th 945, 961; Mintz v. Blue Cross of California (2009) 172 Cal.App.4th 1594, 1603.) As IIPEA is part of the same tort as intentional interference with contract rights, the Cross-Complainant cannot allege that Cross-Defendants interfered with their own prospective economic relationships because Cross-Defendants and Emsaffa and the Alomani Members are alleged to be controlled and represented by Cross-Defendants.

In opposition, Cross-Complainant MPV alleges that Cross-Complainants caused Emsaffa to improperly inflate the amounts due under the loan and that this was legally and ethically wrong. (FACC ¶ 116.) However, this allegation is conclusory and devoid of facts to show how such conduct was wrongful as “proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.” (Korea Supply, supra, 29 Cal.4th at p. 1159.)

Based on the above, the demurrer to the eighth cause of action is sustained with leave to amend.

“[T]he elements of an action for fraud and deceit based on a concealment are:(1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.” (Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248.) “In California, fraud must be pled specifically; general and conclusory allegations do not suffice.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) Specificity “necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.” (Id. at 631.)

The FACC alleges that Cross-Defendants fraudulently concealed from MPV that (1) they were in discussions regarding the sale of the Loan to Emsaffa, (2) that the sale was consummated, (3), that the interest rate on the Loan was usurious, (4) that the 18% default interest rate was inapplicable to MPV’s alleged default, and (5) that Vicino never disbursed all the Loan Proceeds. (FACC ¶¶ 123-124.) Cross-Defendants assert the ninth cause of action fails because they owed no duty to disclose to Cross-Complainant MPV. MPV argues that a duty to disclose may arise out of the existence of a confidential relationship, even if there is no fiduciary duty. (See Richelle L. v. Roman Catholic Archbishop (2003) 106 Cal.App.4th 257, 272.)

While the court agrees that the existence of a confidential relationship is a question of fact, the court finds that the FACC contains no facts that would permit the court to conclude that a confidential relationship exists between Cross-Defendants and MPV. The fact that Alomani Members bought membership interests in MPV is not sufficient to support a finding that a confidential relationship exists between the parties. Cross-Complainant MPV fails to cite case law showing that the purchasing of a membership interest in an entity creates a confidential relationship between the members and that entity.

“The prerequisite of a confidential relationship is the reposing of trust and confidence by one person in another who is cognizant of this fact.” (Vai v. Bank of America National Trust & Savings Ass'n (1961) 56 Cal.2d 329, 338.) A confidential relationship also “refers to an unequal relationship between parties in which one surrenders to the other some degree of control because of the trust and confidence which he reposes in the other.” (Richelle L., supra, 106 Cal.App.4th at p. 272.) Here, there are no facts to show that MPV placed trust and confidence in the Cross-Defendants or the Alomani Members and that they accepted the relationship, such that a confidential relationship existed between the parties.

“Conspiracy is not a cause of action, but a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves share with the immediate tortfeasors a common plan or design in its perpetration.” (Applied Equipment, supra, 7 Cal.App. at pp. 510-511.) “Standing alone, a conspiracy does no harm and engenders no tort liability. It must be activated by the commission of an actual tort.” (Id. at p. 511.)

The Cross-Defendants’ demurrer asserts that the tenth cause of action is not a cause of action. In City of Industry v. City of Fillmore (2011) 198 Cal.App.4th 191, the appellate court construed “the fifth count for fraud and the tenth count for conspiracy together as a single count for fraud.” (Id. at pp. 211-212.) The court finds that the conspiracy cause of action must be subsumed into the applicable tort cause(s) of action and cannot be pled independently.

F. Eleventh Cause of Action – Unlawful, Unfair, and Fraudulent Business Acts and Practices

Business & Professions Code § 17200 (“UCL”) prohibits “any unlawful, unfair or fraudulent business act or practice.” (Bus. & Prof. Code, § 17200; see Clark v. Superior Court (2010) 50 Cal.4th 605, 610.) To plead this statutory claim, the pleadings must state with reasonable particularity the facts supporting the statutory elements of the violation. (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 619.)

“An unlawful business practice or act is an act or practice, committed pursuant to business activity, that is at the same time forbidden by law.” (Klein v. Earth Elements, Inc. (1997) 59 Cal.App.4th 965, 969.) “A business practice is unfair within the meaning of the UCL if it violates established public policy or if it is immoral, unethical, oppressive or unscrupulous and causes injury to consumers which outweighs its benefits.” (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1473.) Lastly, a fraudulent business practice claim under section 17200 “is not based upon proof of the common law tort of deceit or deception, but is instead premised on whether the public is likely to be deceived.” (Pastoria v. Nationwide Ins. (2003) 112 Cal.App.4th 1490, 1499.)

The eleventh cause of action states that Cross-Defendants “committed acts constituting unfair, unlawful, and fraudulent business acts and practices pursuant to Business and Professions Code section 17200 by, among other things, (1) interfering with Marquez Pacific’s negotiations with Vicino regarding an extension and/or modification of the Loan, (2) brokering a business opportunity without a California real estate license, and (3) requiring over $1,000,000 of the money the Alomani Members purported “invested” in Plaintiff be used to purchase an unrelated loan from “Shata Family Holdings Limited” at an inflated price.” (FACC ¶ 141.)

Cross-Defendants assert that none of the conduct Cross-Defendants allegedly engaged in is wrongful sufficient to support a UCL claim. While the brokering of a business opportunity without a license is wrongful, Cross-Complainant fails to allege if this conduct violates the unfair, unlawful, or fraudulent prong of the UCL. The specificity requirement of pleading a UCL requires that each wrongful act must be pled under either the unlawful, unfair, or fraudulent prong of the UCL. Neither the court nor the Cross-Defendants should have to guess under which prong of the UCL is the conduct alleged to be wrongful. Moreover, because the demurrer has been sustained as to the other causes of action and the UCL claim relies on those causes of action, the demurrer to the eleventh cause of action is sustained with leave to amend.

2) Page 26, ¶ 9: “For punitive and exemplary damages” as to Alomani and Markab Capital;

4) Page 26, ¶ 11: “For reasonable attorneys’ fees and costs” as to Alomani and Markab Capital.

In their opposition, Cross-Complainants admit that they do not pray for attorney’s fees as to Cross-Defendant Alomani and Markab. Accordingly, the motion to strike attorney’s fees as to Cross-Defendants is granted without leave to amend.

As the demurrer to the FACC is sustained, the motion to strike punitive damages is granted with leave to amend.

Cross-Defendants Alomani and Markab’s demurrer to the FACC is sustained in its entirety with leave to amend as to the seventh, eighth, ninth, and eleventh causes of action and without leave to amend as to the tenth cause of action. Cross-Defendants motion to strike punitive damages from the FACC is granted with leave to amend and granted without leave to amend as attorney’s fees and costs as they relate to Cross-Defendants Alomani and Markab.

Cross-Defendants Alomani and Markab. Cross-Complainant is granted __ days leave to amend. The OSC re: Amended Complaint is set for __.

[1] Pursuant to CCP §§ 430.41 and 435.5(a), counsel for Cross-Defendants attempted to meet and confer with counsel for Cross-Complanants but the effort were unsuccessful. (Corelius Decl. ¶¶ 3, 4, Ex. 1.) “Any determination by the court that the meet and confer process was insufficient shall not be grounds to overrule or sustain a demurrer.” (CCP § 430.41(a)(4).) As the failure to meet and confer does not constitute grounds to overrule a demurrer, the court continues to the merits.