Judge Gail Killefer, Case 22STCV04334 2023-01-11 Tentative Ruling

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

OPPOSITION: December 30, 2022—Untimely Filed with an incorrect proof of service. Opposition was due December 28, 2022. (C.C.P., § 1005)

TENTATIVE: Defendants’ demurrer is sustained as to the Second Amended Complaint. Plaintiff is granted 30 days leave to amend. 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 section 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 First Amended Complaint (“FAC”) on June 2, 2022.

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

On September 8, 2022, the court sustained Defendants’ demurrer to the entirety of the FAC and granted Plaintiff leave to amend. (“September 8 Order”)

On October 7, 2022, Plaintiff filed the operative Second Amended Complaint (“SAC”) alleging the following causes of action: (1) breach of contract, (2) conversion, (3) intentional misrepresentation, and (4) implied warranty of good faith and fair dealing.

Defendants now demur to all causes of action of the SAC. On December 30, 2022, Plaintiff filed an opposition with a defective proof of service, showing service in a different matter to different counsel.

Plaintiff’s opposition is untimely, as a timely opposition was due December 28, 2022. (CCP §§ 1005(b), 1013(c).) The court does not consider this opposition in making its ruling. (Cal. Rules of Court, Rule 3.1300(d).)

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 again demur to the entire SAC, contending it is uncertain as to “who the purported parties are or why they are named as parties to this action.” (Demurrer, 2.) Specifically, Defendants contend that the SAC again 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 SAC ¶¶1, 5, 23.) Yet again, Defendants contend,

“[w]ithout 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.)

“Even though Plaintiff alleges the existence of a contract between the parties yet again 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.”

A review of the SAC shows the circumstances remain unchanged, despite this court’s description of the issues inherent in the FAC. Therefore, the court again sustains Defendants’ special demurrer to the entirety of the SAC and finds Plaintiff’s claims to be uncertain.

The court also finds each cause of action to be insufficiently pled on their own, as discussed below.

B. First & Fourth Causes 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 again contend the fourth 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, without further allegations of extracontractual claims. (Demurrer, 5-6.) Defendants contend there is “no allegation of a separate ‘warranty,’ ‘covenant,’ or extracontractual relationship that would justify a separate claim.” (Demurrer, 6.)

Second, Defendants again contend the first cause of action is not sufficiently pled as it remains uncertain for the same reasons as explained above. (Dem., 3-4.) The use of the singular “Defendant” when alleging the first and fourth causes against “all Defendants” creates serious ambiguities and uncertainties which prevent Defendant from clearly responding to Plaintiff’s claims. (Id.) In their reply, Defendants also correctly explain that an ownership chain between Defendants does not help to clarify the allegations, as the question remains: “with whom did Plaintiff did contract (and in what capacity)?” (Reply, 2-3.)

The court agrees. The court again finds that the SAC’s first and fourth causes of action are insufficiently pled because the SAC does not sufficiently allege the contracting terms and parties and the relevant facts to establish breach. The SAC further includes no allegations that support a claim for a breach of an implied covenant of good faith and fair dealing again, namely any allegations of something more than a breach of the alleged contract itself.

For these reasons, Defendants’ demurrer to these cause of action are sustained.

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.)

“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.)”

Defendants here again contend that the second and third causes of action must fail since the SAC 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 again 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, 4-5.)

The court agrees with Defendants again that the second cause of action is insufficiently pled because the SAC fails to plead sufficient facts to show any wrongful possession and further fails again to quantify resulting damages beyond “full value.” (SAC ¶42.) Lastly, the court again agrees SAC does not allege sufficient facts to show how these tort claims are more than mere recasting of breach of contract claims. A review of the SAC shows no further allegations beyond an alleged breach of contracting terms by Defendants.

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 again insufficiently pled as the SAC “fails to allege what the specific misrepresentation was or who made supposedly made [sic] the misrepresentation to him.” (Demurrer, 5; Stansfield, supra, 220 Cal.App.3d at 73.) “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.) As Defendants correctly explain in their reply papers, Plaintiff’s attempts to introduce new allegations in a declaration in opposition to the demurrer cannot be considered, since this court looks at defects apparent on the face of the pleadings at this demurrer stage. (Reply, 4.)

The court agrees with Defendants again that the third cause of action is insufficiently pled. As discussed above, Plaintiff has again 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 SAC again 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 Second Amended Complaint. Plaintiff is granted 30 days leave to amend. Defendants are to give notice.

[1] Defendants submit the declaration of their counsel, Aren Derbarseghian (“Derbarseghian”) to demonstrate compliance with statutory meet and confer requirements. Derbarseghian attests counsel sent an email to Plaintiff’s counsel but received no response. (Derbarseghian Decl. ¶2.) The Derbarseghian Declaration is insufficient for purposes of CCP §§ 430.41 and 435.5, as it makes clear the parties have failed to meet and confer around the issues raised in this demurrer yet again. However, as failure to meet and confer does not constitute grounds for overruling a demurrer, the court continues with the merits of the parties’ arguments.