Judge Gail Killefer, Case 22STCV04334 2022-09-08 Tentative Ruling

MOTION: Demurrer to First Amended Complaint; Motion to Strike Portions of First Amended Complaint

MOVING PARTIES: Defendants, Marius Baiesc and My Ride, Inc. (erroneously sued as M Lux Exotic Luxury Car Rental and Autobody Shop)

TENTATIVE: Defendants’ demurrer is sustained as to the First Amended Complaint. Plaintiff is granted 30 days leave to amend. Having sustained Defendants’ demurrer, Defendants’ motion to strike is moot. Defendants are to give notice.

This is an action arising out of the tendering by Mais Karibyan (“Plaintiff”) of his Maserati (“Vehicle”) to Marius Baiesc and My Ride, Inc. (erroneously sued as M Lux Exotic Luxury Car Rental and Autobody Shop) (“Defendants”) for use as a part of Defendants’ rental fleet. Plaintiff alleges that on January 21, 2021, Plaintiff tendered his Vehicle to Defendants who offered to rent the Vehicle to customers through their rental company. According to Plaintiff, Defendants rented the vehicle to a customer, who crashed the Vehicle. The customer was later identified as an employee of Defendants.

Plaintiff’s initial Complaint alleged the following causes of action: (1) breach of contract; (2) conversion; (3) violation of Business and Professions Code § 17200; (4) breach of implied covenant of good faith and fair dealing; and (5) intentional misrepresentation.

On April 22, 2022, Defendants filed a demurrer to the Complaint. In response, Plaintiff filed the operative First Amended Complaint (“FAC”) on June 2, 2022.

The FAC alleges the following causes of action: (1) breach of contract and implied warranty of good faith and fair dealing; (2) conversion; and (3) intentional misrepresentation.

Defendants now demur to all causes of action and move to strike portions of the FAC. The motion is unopposed.

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.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) The court “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. . . .” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (CCP § 452; see also Stevens v. Sup. Ct. (1999) 75 Cal.App.4th 594, 601.) “When a court evaluates a complaint, the plaintiff is entitled to reasonable inferences from the facts pled.” (Duval v. Board of Trustees (2001) 93 Cal.App.4th 902, 906.)

The general rule is that the plaintiff need only allege ultimate facts, not evidentiary facts. (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550.) “All that is required of a plaintiff, as a matter of pleading, even as against a special demurrer, is that his complaint set forth the essential facts of the case with reasonable precision and with sufficient particularity to acquaint the defendant with the nature, source and extent of his cause of action.” (Rannard v. Lockheed Aircraft Corp. (1945) 26 Cal.2d 149, 156-157.) “[D]emurrers for uncertainty are disfavored and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Mahan v. Charles W. Chan Ins. Agency, Inc. (2017) 14 Cal.App.5th 841, 848, fn. 3, citing Lickiss v. Fin. Indus. Regulatory Auth. (2012) 208 Cal.App.4th 1125, 1135.) In addition, even where a complaint is in some respects uncertain, courts strictly construe a demurrer for uncertainty “because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.)

Demurrers do not lie as to only parts of causes of action where some valid claim is alleged but “must dispose of an entire cause of action to be sustained.” (Poizner v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119.) “Generally it is an abuse of discretion to sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment.” (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.)

As stated above, “demurrers for uncertainty … are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Mahan v. Charles W. Chan Ins. Agency, Inc., supra, 14 Cal.App.5th at p. 848, fn. 3.) “A special demurrer [for uncertainty] should not be sustained if the allegations are sufficiently clear to apprise the defendant of the issues that must be met, even if the allegations of the complaint may not be as clear and as detailed as might be desired.” (Bacon v. Wahrhaftig (1950) 97 Cal.App.2d 599, 605.)

Defendants initially demur to the entire Complaint, contending it is uncertain as to “who the purported parties are or why they are named as parties to this action.” (Demurrer, 1.) Specifically, Defendants contend that the FAC alleges that “Defendant” breached the contract for the rental purpose of the Vehicle, but “Plaintiff fails to identify who ‘Defendant’ is specifically.” (Demurrer, 4-5; citing FAC ¶¶1, 5, 23.) “Without providing further specificity it is impossible for moving Defendants or the Court to ascertain with whom Plaintiff contracted, which Defendant breached the purported contract, how the alleged breach caused Plaintiff’s damages, or why Plaintiff has asserted the contract claim against ‘All Defendants.’” (Id.) The court agrees.

Even though Plaintiff alleges the existence of a contract between the parties in his FAC, Plaintiff does not provide necessary terms, namely who the contracting parties were, to shed sufficient light on the circumstances such that defendants can reasonably respond and raise their defenses. As such, the court sustains Defendants’ demurrer to the entirety of the complaint and finds Plaintiff’s claims to be uncertain.

The court also finds each cause of action to be insufficiently plead, as explained below.

B. First Cause of Action: Breach of Contract & Implied Warranty of Good Faith and Fair Dealing

A cause of action for breach of contract consists of the following elements: (1) the existence of a contract; (2) the plaintiff’s performance or excuse for nonperformance; (3) the defendant’s breach; and (4) the resulting damages to the plaintiff.¿ (Oasis West Realty, LLC v. Goldman¿(2011) 51 Cal.4th 811, 821.)¿“The essence of a contract is the meeting of minds on the essential features of the agreement.” (Krasley¿v. Superior Court¿(1980) 101 Cal.App.3d 425, 431.) A contract “is unenforceable if the parties fail to agree on a material term or if a material term is not reasonably certain.” (Lindsay v. Lewandowski¿(2006) 139 Cal.App.4th 1618, 1623.)¿

A¿written¿contract must be pled verbatim in the body of the complaint, be attached to the complaint and incorporated by reference, or be pled according to its legal effect.¿¿(Bowden v. Robinson¿(1977) 67 Cal.App.3d 705, 718.)¿¿An allegation of an oral agreement must “set[] forth the substance of its relative terms.”¿ (Gautier v. General Tel. Co.¿(1965) 234 Cal.App.2d 302, 305.)¿¿¿

A breach of the implied covenant of good faith and fair dealing requires something more than breach of the contractual duty itself. (Careau¿& Co v. Security Pacific Business Credit, Inc.¿(1990) 222 Cal.App.3d 1371, 1394 (Careau).) “Thus, allegations which assert such a claim must show that the conduct of the defendant, whether or not it also constitutes a breach of a consensual contract term, demonstrates a failure or refusal to discharge contractual responsibilities, prompted not by an honest mistake, bad judgment or negligence but rather by a conscious and deliberate act, which unfairly frustrates the agreed common purposes and disappoints the reasonable expectations of the other party thereby depriving that party of the benefits of the agreement.” (Id.¿at 1395.)¿

Here, Defendants contend the first cause of action is duplicative in that Plaintiff alleges a claim for a breach of the implied covenant of good faith and fair dealing in an identical way to his breach of contract claim, as part of the same cause of action. (Demurrer, 4-5.) Defendants contend there is “no allegation of a separate extracontractual duty which would justify a separate claim for breach of implied covenant.” (Demurrer, 5.)

Second, Defendants contend the first cause of action is not sufficiently pled as Plaintiff alleges the contract between the parties was “oral,” but also suggests the covenants and warranties which Defendants allegedly breached were implied. (Demurrer, 5-6; FAC ¶¶23-26.) Defendants continue:

“Plaintiff should articulate, clearly, the express terms of the purported agreement (i.e., what was agreed-upon) and who breached the agreement. If any portions of the agreement were “implied” – those specific provisions should be articulated and they cannot contradict the expressed terms of the oral agreement. Plaintiff’s approach of combining everything into a single, uncertain allegation is improper.” (Id.)

The court agrees. The court finds that the FAC’s first cause of action is insufficiently pled because the FAC does not allege the terms of the agreement, identify the contracting parties to the agreement, or specify the relevant criteria for breach of the alleged agreement. The FAC further includes no allegations that support a claim for a breach of an implied covenant of good faith and fair dealing, namely any conscious or deliberate act by a Defendant which can operate as a basis for an extracontractual claim.

To plead a cause of action for conversion, one must allege (1) the plaintiff’s ownership or right to possession of personal property; (2) defendant’s disposition of the property inconsistent with plaintiff’s rights; and (3) resulting damages. (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119.) “Money may be the subject of conversion if the claim involves a specific, identifiable sum; it is not necessary that each coin or bill be earmarked.” (Welco Electronics, Inc. v. Mora (2014) 223 Cal.App.4th 202, 209.)

Defendants here contend that the second and third causes of action must fail since the FAC attempts “to convert this breach of contract action into a tort claim,” in violation of the economic loss rule. (Demurrer, 6-7; citing Food Safety Net Services v. Eco Safe Systems USA, Inc., (2012) 209 Cal. App. 4th 1118.) “Plaintiff does not allege any facts that create a duty or fiduciary relationship beyond those that would arise from a contractual relationship.” (Demurrer, 7.)

Defendants also contend that the conversion claim is also insufficiently pled in that there are no allegations that there was wrongful dispossession of the vehicle, and no allegations as to the resulting damage of any dispossession. (Demurrer, 7-8.)

The court agrees with Defendants that the second and third causes of action are insufficiently pled because the FAC does not allege sufficient facts to show how these tort claims are more than mere recasting of breach of contract claims. Further, the court agrees with Defendants that the second cause of action is insufficiently pled as it fails to allege any wrongful dispossession of the Vehicle and fails to allege how resulting damages are quantified beyond an alleged “full value” of the Vehicle. (FAC ¶¶33-34.)

The elements of a fraud cause of action are: (1)¿misrepresentation (false representation, concealment, or omission); (2) knowledge of falsity; (3) intent to induce reliance; (4) justifiable reliance; and (5) resulting damage. (Davis v. Southern California Edison Co. (2015) 236 Cal.App.4th 619.) Fraud must be pled in the complaint specifically. General and conclusory allegations are not sufficient. (Stansfield v. Starkey¿(1990)¿220 Cal.App.3d 59,¿74;¿Nagy v. Nagy¿(1989) 210 Cal.App.3d 1262, 1268.) Unlike most causes of action where the “the policy of liberal construction of the pleadings,” fraud requires particularity, that is, “pleading facts which show how, when, where, to whom, and by what means the representations were tendered.” (Stansfield, supra, 220 Cal.App.3d at 73;¿Lazar v. Superior Court¿(1996) 12 Cal.4th 631, 645.) Every element of a fraud cause of action must be alleged both factually and specifically. (Hall v. Department of Adoptions¿(1975) 47 Cal.App.3d 898, 904; Cooper v. Equity General Insurance¿(1990) 219 Cal.App.3d 1252, 1262.)¿

Aside from the economic loss rule as discussed above, Defendants also contend the third cause of action is insufficiently pled as the FAC “fails to allege what the specific misrepresentation was or who made supposedly made [sic] the misrepresentation to him.” (Demurrer, 8-9.) “There simply no specifics [sic] provided as to what the exact misrepresentation was, who made it, when it was made, by what means it was made, or why Plaintiff – an apparent complete stranger – ‘reasonably’ relied on the misrepresentation.” (Id.)

The court agrees with Defendants that the third cause of action is insufficiently pled. As discussed above, Plaintiff has failed to allege sufficient facts to show a basis for a tort claim beyond the breach of contract action in violation of the economic loss rule. Further, the FAC fails to allege sufficient facts in compliance with the heightened pleading standard of a fraud cause of action here.

Defendants’ demurrer is sustained as to the First Amended Complaint. Plaintiff is granted 30 days leave to amend. Defendants are to give notice.

Having sustained Defendants’ demurrer, the court finds Defendants’ motion to strike moot.

[1] Defendants submit the declaration of their counsel, Aren Derbarseghian (“Derbarseghian”) to demonstrate compliance with statutory meet and confer requirements. Derbarseghian attests that counsel corresponded with Plaintiff’s counsel “via phone and email providing details as to the substance and nature of the demurrer and motion to strike. [Plaintiff’s counsel] did not respond immediately due to being ill, but she eventually responded by email indicating that her client would not amend the first amended complaint.” (Derbarseghian Decl. ¶1.) The Derbarseghian Declaration is sufficient for purposes of CCP §§ 430.41 and 435.5.