Judge Holly J. Fujie, Case Number: 24STCV02125, Date: 2024-10-03 Tentative Ruling

RESPONDING PARTY: Defendant/Cross-Complainant BEN AMIN ASSIL, dba BILTMORE INC, dba BUILDMORE CONSTRUCTION & REMODELING (“Defendant”)

On April 2, 2024, Plaintiff filed the operative First Amended Complaint asserting the following causes of action: (1) breach of written contract; (2) breach of implied warranty; (3) for money paid; (4) open book account; (5) unjust enrichment; (6) negligence; (7) intentional misrepresentation; (8) false promise; (9) fraudulent suppression of material fact; (10) disgorgement – violation of B & P Code §§ 7031, et seq.; (11) unfair competition and business practices (B & P Code § 17200); (12) declaratory relief; and (13) action on contractor’s license bond.

On June 10, 2024, Defendant filed a cross-complaint (“Cross-Complaint”) asserting the following causes of action: (1) breach of contract; (2) open book account; (3) negligence; (4) intentional misrepresentation; (5) unjust enrichment; (6) violation of Business and Professions Code section 17200 et seq.; (7) retaliation; and (8) injunctive relief.

On July 2, 2024, Plaintiff filed the instant demurrer to Defendant’s Cross-Complaint (“Demurrer”). Defendant filed a late opposition on October 1, 2024. The Court, in its discretion, will consider the late-filed opposition.

2. The Court’s Order dated May 28, 2024 releasing the mechanic’s lien (Exh. B);

3. Printout from the website of the Contractors State Licensing Board (“CSLB”) confirming licensed contractor “Biltmore Inc” is under license #1061499 (“Exh. C);

4. Printout from the CSLB’s website for the Personnel List of Biltmore Inc (Exh. D);

5. Printout from the Secretary of State’s website for the corporate entity “Biltmore Inc” (Exh. E);

6. Printout from the Secretary of State’s website for all registered corporations with the name “Buildmore” (Exh. F);

7. Printout from the CSLB’s website for all licensed contractors with the name “Buildmore” (“Exh. G”); and

8. Printout from the California Secretary of State’s website for all registered corporations with the name “Biltmore” (Exh. H).

Plaintiff’s requests pertaining to the Court’s orders (Nos. 1 and 2) are GRANTED. Plaintiff’s requests pertaining to printouts from the Secretary of State and CSLB websites (Nos. 2 – 8) are GRANTED AS TO THE EXISTENCE of the documents only and not as to truth of any hearsay statements contained within.

“The primary function of a pleading is to give the other party notice so that it may prepare its case [citation], and a defect in a pleading that otherwise properly notifies a party cannot be said to affect substantial rights.” (Harris v. City of Santa Monica (2013) 56 Cal.4th 203, 240.) “A demurrer tests the legal sufficiency of the factual allegations in a complaint.” (Ivanoff v. Bank of America, N.A. (2017) 9 Cal.App.5th 719, 725.) The Court looks to whether “the complaint alleges facts sufficient to state a cause of action or discloses a complete defense.” (Id.) The Court does not “read passages from a complaint in isolation; in reviewing a ruling on a

demurrer, we read the complaint ‘as a whole and its parts in their context.’ [Citation.]” (West v.

JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 804.) The Court “assume[s] the truth

of the properly pleaded factual allegations, facts that reasonably can be inferred from those

expressly pleaded and matters of which judicial notice has been taken.” (Harris, supra, 56 Cal.4^th p. 240.) “The court does not, however, assume the truth of contentions, deductions or

conclusions of law. [Citation.]” (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350,

As a general matter, in a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “The only issue a demurrer is concerned with is whether the complaint, as it stands, states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 (court shall not “sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment”); Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037 (“A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment.”).) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

As a preliminary matter, the Court addresses the issue of ambiguity in Defendant’s business name. Plaintiff asserts that Defendant cannot maintain this action under the entity names under which Defendant is suing, and requests judicial notice of printouts of the Secretary of State and CSLB websites to support his assertions. In the Cross-Complaint, Defendant attached a screenshot purportedly showing that it holds a valid and active license status. It is therefore evident that Defendant’s business name is in dispute.

A demurrer, however, is not the appropriate procedure for determining the truth of disputed facts, including disputes regarding the name of an entity or business name. Although the existence of a document may be judicially noticeable, the truth of statements contained in the document and its proper interpretation are not subject to judicial notice if those matters are reasonably disputable. (StorMedia, Inc. v. Superior Court (1999) 20 Cal.4th 449, 457, fn. 9.) StorMedia stated: “In ruling on a demurrer, a court may consider facts of which it has taken judicial notice. (Code Civ. Proc., § 430.30, subd. (a).) This includes the existence of a document. When judicial notice is taken of a document, however, the truthfulness and proper interpretation of the document are disputable. (Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374.)

Joslin stated: “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. (See Middlebrook–Anderson Co. v. Southwest Sav. & Loan Assn. (1971) 18 Cal.App.3d 1023, 1038 [96 Cal.Rptr. 338].) On a demurrer a court's function is limited to testing the legal sufficiency of the complaint. (Marina Tenants Assn. v. Deauville Marina Development Co. (1986) 181 Cal.App.3d 122, 127 [226 Cal.Rptr. 321].) ‘A demurrer is simply not the appropriate procedure for determining the truth of disputed facts.’ (Ramsden v. Western Union (1977) 71 Cal.App.3d 873, 879 [138 Cal.Rptr. 426].) The hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of documents whose truthfulness or proper interpretation are disputable. (See Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 605 [176 Cal.Rptr. 824].)” Joslin, supra, at page 375, 228 Cal.Rptr. 878 stated further, “ ‘judicial notice of matters upon demurrer will be dispositive only in those instances where there is not or cannot be a factual dispute concerning that which is sought to be judicially noticed.’ (Cruz v. County of Los Angeles (1985) 173 Cal.App.3d 1131, 1134 [219 Cal.Rptr. 661].)”

Thus, Plaintiff’s assertions regarding any ambiguity in Defendant’s entity or business name can be more properly addressed through discovery, and is not properly the subject of this demurrer.

“The standard elements of a claim for breach of contract are: ‘(1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff therefrom.’” (Wall Street Network, Ltd. v. New York Times Co.¿(2008) 164 Cal.App.4th 1171, 1178.)¿

The Cross-Complaint alleges that Plaintiff and Defendant “entered into a written/oral construction contract (hereinafter “the Contract”), wherein [Defendant] agreed to perform certain construction work, and [Plaintiff] agreed to pay for said construction work” (Cross-Complaint, ¶ 9), that “[t]he total agreed-upon cost for the construction work under the Contract was $175,000.00” (Id., ¶ 10), that “[Defendant] performed all conditions, covenants, and promises required on their part” (Id., ¶ 11), and that “[Plaintiff] breached the Contract by failing to pay the full amount owed for the construction work. Specifically, [Plaintiff] has only paid $117,155.00 and has failed and refused to pay the remaining balance, of $57,845, and there is now due, owing, and unpaid the sum of $73,317.30” (Id., ¶ 12). The Cross-Complaint further alleges that “As a result of [Plaintiff’s] breach, [Defendant] has suffered damages in an amount to be proven at trial, but not less than $73,317.30.” (Id., ¶ 24.)

Here, the Court finds that Defendant has sufficiently alleged the elements of a breach of contract. Complainants alleging breach of contract are not required to attach the contract, or to plead terms verbatim. (Miles v. Deutsche Bank Nat’l Trust Co. (2015) 236 Cal.App.4th 394, 402.)

“The elements of an open book account cause of action are: 1. That plaintiff and defendant had financial transactions ... ; 2. That plaintiff ... kept an account of the debits and credits involved in the transactions; 3. That defendant owes plaintiff money on the account; and 4. The amount of money that defendant owes plaintiff.” (State Comp. Ins. Fund v. ReadyLink Healthcare, Inc. (2020) 50 Cal. App. 5th 422, 449 [internal brackets, quotation marks, and paragraph references omitted].)

Plaintiff demurs to this cause of action, arguing that a cause of action for an open book account is a common count theory of recovery, and that a quantum meruit recovery is inconsistent with recovery for breach of written contract. Plaintiff asserts that quantum meruit recovery that is contrary to an express contractual term is not allowed.

A pleading, however, may properly set forth alternative theories in varied and inconsistent counts. (Rader Co. v. Stone (1986) 178 Cal. App. 3d 10, 15, 223.) Thus, a party is not precluded by law from alleging in one cause of action the breach of a contract and an inconsistent theory of recovery in another cause of action. (Id.)

Here, Defendant has sufficiently alleged the above elements of an open book account cause of action. (Cross-Complaint, ¶¶ 27-29.) The demurrer as to the second cause of action is, therefore, OVERRULED.

“In order to state a cause of action for negligence, the complaint must allege facts sufficient to show a legal duty on the part of the defendant to use due care, a breach of such legal duty, and the breach as the proximate or legal cause of the resulting injury.” (Bellah v. Greenson (1978) 81 Cal.App.3d 614, 619.)

Here, the Cross-Complaint states: “[Plaintiff] owed a duty of care to [Defendant] to [describe the duty] (Cross-Complaint, ¶ 31), and that “[Plaintiff] breached that duty by [describe the negligent act]” (Id., ¶ 32) (Emphasis added.) Clearly thus, the Cross-Complaint fails to state the duty of care and a breach of duty, which are essential elements of a negligence cause of action.

Thus, the demurrer as to the third cause of action is SUSTAINED with thirty days leave to amend.

“The elements of a negligent misrepresentation are ‘(1) the misrepresentation of a past or existing material fact, (2) without reasonable ground for believing it to be true, (3) with intent to induce another's reliance on the fact misrepresented, (4) justifiable reliance on the misrepresentation, and (5) resulting damage.’ (Borman v. Brown (2021) 59 Cal. App. 5th 1048, 1060.)

Here, Defendant attempts to state a claim for intentional misrepresentation based on the allegations that Plaintiff “filed a frivolous complaint and sought an injunction for the removal of the mechanic’s lien, falsely asserting that [Defendant] was not a duly licensed contractor in the State of California and that [Defendant] had breached the Contract.” (Cross-Complaint, ¶¶ 35-36.)

California’s litigation privilege is broad and provides substantial protection against derivative lawsuits arising from judicial proceedings. (People v. Potter Handy, LLP (2023) 97 Cal.App.5th 938.) Importantly, the privilege covers even statements that are false, fraudulent, or made with malice. (Olsen v. Harbison (2010) 191 Cal.App.4th 325; Herterich v. Peltner (2018) 20 Cal.App.5th 1132). This means that, generally, intentional misrepresentations made in the course of judicial proceedings are protected from tort claims, including those for intentional misrepresentation.

Thus here, even assuming the truth of Defendant’s allegations that Plaintiff made false statements in filing a complaint and seeking an injunction against Defendant, a claim for intentional misrepresentation based on those allegations fails.

Accordingly, the demurrer to the fourth cause of action is SUSTAINED without leave to amend.

The elements of unjust enrichment are 1) receipt of a benefit, 2) unjust or wrongful retention of the benefit, and 3) at the expense of another. (Peterson v. Cellco Partnership (2008) 164 Cal.App.4th 1583, 1593; Lectrodryer v. SeoulBank (2000) 77 Cal.App.4th 723, 726; Marina Tenants Assn. v. Deauville Marina Development Co. (1986) 181 Cal.App.3d 122, 134; Hirsch v. Bank of Amer. (2003) 107 Cal.App.4th 708, 716, 722.)

Here, the Cross-Complaint alleges: “[Plaintiff] has been unjustly enriched at the expense of [Defendant] by receiving [describe the benefit] without providing fair compensation.” (Cross-Complaint, ¶ 42.) (Emphasis added.) The Cross-Complaint evidently fails to state the benefit received by Plaintiff, and thus does not sufficiently state a cause of action.

Accordingly, the demurrer to the fifth cause of action is SUSTAINED with thirty days leave to amend.

Sixth Cause of Action: Violation of Business and Professions Code Section 17200

The elements for this cause of action are: 1) a business practice; 2) that is unfair, unlawful or fraudulent; and 3) authorized remedy. (Bus. & Prof. Code, § 17200; Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 676; People ex rel. Dept. of Motor Vehicles v. Cars 4 Causes (2006) 139 Cal.App.4th 1006, 1016 (“An ‘unlawful’ practice requires violation of another statute, and a business practice may be ‘unfair’ even if not otherwise proscribed by statute as long as the practice is not expressly authorized by law.”); Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1266 (“The Unfair Business Practices Act defines ‘unfair competition’ as any ‘unlawful, unfair or fraudulent business practice and unfair, deceptive, untrue or misleading advertising….’ (§ 17200.) (Puentes v. Wells Fargo Home Mortg., Inc. (2008) 160 Cal.App.4th 638, 645 (“‘[A] breach of contract may ... form the predicate for Section 17200 claims, provided it also constitutes conduct that is ‘unlawful, or unfair, or fraudulent.”’”); ibid. (“fraudulent” in section 17200 does not mean common-law fraud, but only that members of the public likely would be deceived); ibid. at pp. 646-649 (apart from practices based upon fraud, the definition of “unfair” is uncertain, and has been defined in several ways, including harm to consumers, and threats to competition); Consumer Advocates v. Echostar Satellite Corp. (2003) 113 Cal.App.4th 1351, 1362 (to be actionable unfair business practices, representations must be likely to deceive a reasonable consumer, and not akin to puffing); Cansino v. Bank of Amer. (2014) 224 Cal.App.4th 1462, 1473-1474 (section 17200 claim does not require anticompetitive business practices, but also encompasses the public's right to protection from unlawful conduct)

Here, the Cross-Complaint merely alleges in a vague and conclusory manner that Plaintiff’s “conduct as described above constitutes unlawful, unfair, and/or fraudulent business acts and practices in violation of California Business and Professions Code Section 17200 et seq.” Defendant fails to allege any specific facts showing how Plaintiff performed any unlawful, unfair or fraudulent business act or practice.

Thus, the demurrer to the sixth cause of action is SUSTAINED with thirty days leave to amend.

The Cross-Complaint does not allege an employment relationship. Rather, Defendant alleges having entered into a construction contract with Plaintiff where Defendant agreed to perform construction work for Plaintiff for pay. (Cross-Complaint ¶ 9.)

Hence, Defendant’s retaliation claim fails and the demurrer is SUSTAINED without leave to amend.

“Injunctive relief is a remedy not a cause of action. [Citations.] A cause of action must exist before a court may grant a request for injunctive relief.” (Allen v. City of Sacramento (2015) 234 Cal.App.4th 41, 65; accord, City of South Pasadena v. Department of Transportation (1994) 29 Cal.App.4th 1280, 1293 (“A permanent injunction is merely a remedy for a proven cause of action. It may not be issued if the underlying cause of action is not established.”’); Roberts v. Los Angeles County Bar Assn. (2003) 105 Cal.App4th 604, 618; McDowell v. Watson (1997) 59 Cal.App.4th 1155,1159.)

Therefore, the Court SUSTAINS the demurrer to the sixth cause of action for injunctive relief without leave to amend.

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