Judge Holly J. Fujie, Case Number: 23STCV03131, Date: 2025-05-13 Tentative Ruling

DEPARTMENT 56 JUDGE HOLLY J. FUJIE, LAW AND MOTION RULINGS. The court makes every effort to post tentative rulings by 5.00 pm of the court day before the hearing. The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)], and are also available in the courtroom on the day of the hearing [see CRC 3.1308(b)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) call Dept 56 by 8:30 a.m. on the day of the hearing (213/633-0656) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no telephone call is necessary and all parties should appear at the hearing in person or by Court Call. Court reporters are not provided, and parties who want a record of motions and other proceedings must hire a privately retained certified court reporter.

MOVING PARTY: Plaintiff/Cross-Defendant iSign International, Inc (“Plaintiff”)

This action arises out of an employment relationship. On February 14, 2023, Plaintiff filed a complaint against Defendant asserting the following causes of action: (1) Breach of Contract; (2) Breach of the Covenant of Good Faith and Fair Dealing; (3) Fraud and Deceit; (4) Breach of Fiduciary Duty; (5) Constructive Fraud; (6) Conversion; (7) Misappropriation of Trade Secrets in Violation of Civil Code § 3426, et seq.; (8) Violation of Business and Professions Code § 17200, et seq.; and (9) Declaratory Relief.

On January 12, 2024, Defendant filed a cross-complaint against Plaintiff. The operative second amended cross-complaint (the “SAXC”) asserts the following causes of action: (1) breach of contract; (2) negligence; (3) false promise; and (4) declaratory relief.

On January 2, 2025, Plaintiff filed the instant demurrer to the SAXC (“Demurrer”) as to the third cause of action for false promise. Defendant filed an opposition (“Opposition”) on April 28, 2025, and Plaintiff filed a reply (“Reply”) on May 6, 2025.

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747; see Code of Civil Procedure (“CCP”) § 430.10, subd. (e).)

To sufficiently allege a cause of action, a complaint must allege all the ultimate facts—that is, the facts needed to establish each element of the cause of action pleaded. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 212, superseded by statute as stated in Branick v. Downey Savings & Loan Assn. (2006) 39 Cal.4th 235, 242.) “[E]ach 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.)

In 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, 966-67.) Courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228, disapproved on other grounds, Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal.4th 1158, 1162.) A demurrer, however, “does not admit contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)

A claim for fraud must plead all of the following elements: (1) misrepresentation; (2) knowledge of falsity; (3) intent to induce reliance; (4) justifiable reliance; and (5) resulting damage. (Odorizzi v. Bloomfield School Dist. (1966) 246 Cal.App.2d 123, 128.) Fraud actions are subject to strict requirements of particularity in pleading. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216.) Particularity requires facts that show how, when, where, to whom, and by what means the representations were tendered. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) In addition, when a plaintiff is asserting fraud against a corporate defendant, the plaintiff must allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Tenet Healthsystem Desert, Inc. v. Blue Cross of California (2016) 245 Cal.App.4th 821, 838.)

“The facts essential to the statement of a cause of action in fraud or deceit based on a promise made without any intention of performing it are: (1) a promise made regarding a material fact without any intention of performing it; (2) the existence of the intent at the time of making the promise; (3) the promise was made with intent to deceive or with intent to induce the party to whom it was made to enter into the transaction; (4) the promise was relied on by the party to whom it was made; (5) the party making the promise did not perform; (6) the party to whom the promise was made was injured.” (Regus v. Schartkoff (1957) 156 Cal.App.2d 382, 389.)

Plaintiff demurs to the false promises cause of action on grounds that the SAXC fails to allege that Defendant lacked the intent to perform the contract at the time it was made. (Demurrer, p. 8:15-20.) In the Opposition, Defendant asserts that the SAXC “asserts the legal effect of [Plaintiff]’s false promises” and “alleges the knowing demands and misrepresentations by [Plaintiff].” (Opp., p. 3:15-21.) The SAXC alleges as follows: “[Defendant] challenged Taylor, telling Taylor that [Defendant] had questions as to the information set forth in the July 21 Contract. Taylor responded that [Defendant] was required to sign the settlement agreement “as-is” or Taylor would shut down [Plaintiff]. Taylor asserted this demand knowing that [Defendant] would rely on the promises and representations contained in the July 21 Contract.” (SAXC, ¶ 25.) The SAXC further alleges that “As [Plaintiff] continued to operate, [Defendant] relied on [Plaintiff] to honor the promises contained in the July 21 Contract, including the promises to pay [Defendant] a salary, to reimburse [Defendant] for expenses incurred for [Plaintiff]’s benefits, and other representations made in the July 21 Contract.” (SAXC, ¶ 27.)

This is insufficient to state a cause of action for false promise. The SAXC fails to allege facts suggesting that Plaintiff made a promise without any intention of performing it at the time the promise was made. While allegations in the SAXC are taken as true for the purposes of the Demurrer, this does not include allegations that set forth legal conclusions without alleging facts in support. Rather, Defendant must allege facts supporting the allegation that Plaintiff did not intend to perform the promise at the time it was made. The allegations suggest that Plaintiff breached a contract that the parties entered into, but they do not suggest with specificity that Plaintiff had more knowledge that it entered the contract intending to breach it.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court