Judge: Glenn R. Salter, Case: 23-1323598, Date: 2023-08-17 Tentative Ruling
Demurrer
The demurrer of defendants to the First, Second, Third, and Fourth Causes of Action of the First Amended Complaint is OVERRULED. The demurrer to the Fifth Cause of Action is SUSTAINED without leave to amend.
First Cause of Action—Breach of Contract
Plaintiff alleges it entered into a written contract with defendant OdysseyVR to perform construction services at an address in Irvine. Defendants argue the first cause of action is insufficient because defendants did not enter into any agreement with plaintiff contractor.
The contract identifies the client as the address “@Odyssey VR.” It was signed by “Lei Zhao,” and even though it does not identify his capacity, the amended complaint alleges that he was “Defendants’ Chief Operating Officer at the time of execution.” A check for the initial payment was also cut by Irvine Management Company “to the order of: Odyssey VR & Good Tree Construction.”
Those allegations are sufficient for pleading purposes to establish a contract. The remaining allegations of this cause of action plead the elements of a breach.
Defendants also allege the alter ego allegations are insufficient. But they are almost identical to the allegations approved in Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 235-236.)
Second Cause of Action—Common Counts
Plaintiff alleges defendants promised to pay $400,000 for construction services; plaintiff completed the construction; but defendants failed to pay the remaining balance of $230,000.
Those allegations meet the elements of a common counts cause of action. (See Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460.)
Third Cause of Action—Fraud/False Promise
Plaintiff alleges that defendants entered into the construction but had no intention of paying. (Civ. Code, § 1710, subd. (4).)
The amended complaint specifically alleged that plaintiff was induced to perform under the contract so the defendants would obtain “tenant improvement construction service for their own use and/or benefit, either directly or indirectly, to the exclusion of Plaintiff and to Plaintiff’s detriment and injury [].”
These allegations are sufficiently specific to state allegations of fraud.
Fourth Cause of Action—Fraud/Intentional Misrepresentation
This cause of action includes the same basic allegations as the third cause of action.
Fifth Cause of Action—Conversion
Plaintiff alleges that the defendants have not paid on the contract.
“Conversion is the wrongful exercise of dominion over the property of another.” (Hodges v. County of Placer (2019) 41 Cal.App.5th 537, 551.) Such a cause of action for money is viable when it involves a claim of misappropriation or commingling. It is not viable where it simply claims a failure to pay money. (Kim v. Westmore Partners, Inc. (2011) 201 Cal.App.4th 267, 284.)
A “mere contractual right of payment, without more, will not suffice to support a claim for conversion.” (Rutherford Holdings, Inc. v. Plaza Del Rey, supra, 223 Cal.App.4th at p. 233.)
No cause of action has been stated here, and there is no indication as to what additional facts could be pleaded that would.
Motion to Strike
Defendants’ motion to strike is GRANTED in part and DENIED in part.
Attorney Fees
Plaintiff does not address the claim that attorney fees are not recoverable under the agreement. The failure to oppose a motion to strike a portion of a complaint may be deemed an abandonment of that claim. (See Herzberg v. County of Plumas (2005) 133 Cal.App.4th 1, 20.)
The court notes that it could not find any place in the text of the complaint where the plaintiff seeks attorney fees. The only place a request for fees appears is in the prayer. But the court reviewed the agreement attached to the First Amended Complaint and was unable to find any provision for attorney fees.
The motion to strike the claim for attorney fees is GRANTED.
Alter Ego Allegations
The alter ego allegations are sufficiently pled, as noted above. The motion to strike those allegations is therefore DENIED.
Punitive Damages
The defendants waited until after construction was completed and they had received the benefit of the bargain to assert there was no binding contract. Those allegations are sufficient to show malice, oppression, and fraud.
The motion to strike the claim for punitive damages is DENIED.
Notice
The plaintiff shall give notice.