Judge: Joel L. Lofton, Case: 21GDCV01150, Date: 2023-01-12 Tentative Ruling

Case Number: 21GDCV01150    Hearing Date: January 12, 2023    Dept: X

   Tentative Ruling

Judge Joel L. Lofton, Department X

HEARING DATE:     January 12, 2023                                 TRIAL DATE:  June 13, 2023

CASE:                         MARCO LOPEZ, an individual, v. PAUL ARGUETA, an individual, CESAR HARO, an individual, ROBERT SILVA, an individual, JOSH CHAIREZ, an individual; REAL ESTATE HEAVEN INTERNATIONAL, INC.; COVERED WAGON INVESTMENTS, INC., a California Corporation and DOES 1 through 50, inclusive.

CASE NO.:                 21GDCV01150

DEMURRER

DEMURRING PARTY:       Defendants Paul Argueta, Cesar Haro, Robert Silva, and Josh Chairez (“Demurring Parties”)

RESPONDING PARTY:      Plaintiff Marco Lopez (“Plaintiff”)   

SERVICE:                              Filed August 17, 2022

OPPOSITION:                       Filed December 28, 2022

REPLY:                                   Filed January 5, 2023

RELIEF REQUESTED

            Demurring Parties object to Plaintiff’s second cause of action for fraud.

BACKGROUND

Plaintiff Marco Lopez (“Plaintiff”) claims that Defendants Paul Argueta (“Argueta”), Cesar Haro (“Haro”), Robert Silva (“Silva”), and Josh Chairez (“Chairez”) induced him to make a payment of over $159,000 under the pretense that the money would be used to fund investments for Plaintiff’s retirement. Plaintiff alleges that the Defendants personally retained the funds. Plaintiff further asserts that the Defendants prepared Plaintiff with a written statement titled “Personal Guarantee” that states Defendants would repay Plaintiff a total of $175,000 by June 31, 2020, a date that does not exist. Plaintiff alleges that Defendants have failed to pay back the money.

Plaintiff filed a second amended complaint (“SAC”) on July 18, 2022, alleging nine causes of action for (1) breach of contract – written contract (personal guarantee), (2) fraud, (3) negligent misrepresentation, and (4) promissory estoppel.

TENTATIVE RULING

            Demurring Parties’ demurrer to Plaintiff’s second cause of action for fraud is SUSTAINED with 20 days leave to amend.

LEGAL STANDARD

A general demurrer may be taken to a complaint where “[t]he pleading does not state facts sufficient to constitute a cause of action.” (Code of Civ. Proc. § 430.10(e).) A demurrer for sufficiency tests whether the complaint states a cause of action.  (Hahn v. Mirda (2007) 147 Cal. App. 4th 740, 747.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice.  (Code Civ. Proc. section 430.30(a).)  A demurrer tests the pleadings alone and not the evidence or other extrinsic matters.  (SKF Farms v. Superior Court (1984) 153 Cal. App. 3d 902, 905.)  The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.  (Hahn v. Mirda, supra, 147 Cal.App.4th 740, 747.)

DISCUSSION

            Demurring Parties object to Plaintiff’s cause of action for fraud on the grounds that the statute of limitations has run and that the cause of action is not pled with the required specificity.

            Statute of Limitations

            Demurring Parties argue Plaintiff’s fraud cause of action is barred by the statute of limitations because the alleged conduct occurred in 2016 and 2017 while the original complaint was not filed until September 8, 2021.

            Code of Civil Procedure section 338, subdivision (b), provides that a three-year statute of limitations is applicable to claims “on the ground of fraud or mistake.” “In general, a cause of action accrues when it is complete with all of its elements. [Citation.] But section 338(d) provides that a cause of action based on fraud or mistake ‘is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.’ ” (Vera v. REL-BC, LLC (2021) 66 Cal.App.5th 57, 68.)

            Plaintiff argues that the statute of limitations does not bar his claim for fraud because he alleges he did not discover the alleged fraud until June 2020, when Defendants failed to pay. “[W]ell pleaded facts of [a] complaint must be taken as true for the purposes of the demurrer.” (Weitzenkorn v. Lesser (1953) 40 Cal.2d 778, 785.) However, Plaintiff’s SAC does not allege any facts supporting his discovery of the alleged fraud within the statute of limitations. Plaintiff alleges the fraudulent conduct took place between 2016 and 2017. (SAC ¶¶ 33-40.) Plaintiff alleges that the parties agreed to a personal guarantee on June 8, 2017. (Id. ¶ 42.) Plaintiff alleges Defendants failed to repay under the guarantee. (Id. ¶¶ 47-48.)

            Although Plaintiff argues in opposition that he did not discover the alleged fraud until June 2020, when Defendants failed to repay under the personal guarantee, the SAC does not allege any facts to support that position. Thus, because the alleged fraud occurred latest in 2017, and the complaint was not filed until four years later, as currently alleged, Plaintiff’s cause of action for fraud is barred by the statute of limitations.

            Specificity

            Demurring Parties also argue that Plaintiff failed to plead the elements of fraud with the required specificity.

“The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1060, citations omitted.

“Fraud is required to be pleaded with specificity.” (People ex rel. Harris v. Rizzo (2013) 214 Cal.App.4th 921, 947.) “Fraud allegations must be pled with more detail than other causes of action. The facts constituting the fraud, including every element of the cause of action, must be alleged factually and specifically. The objectives are to give the defendant notice of definite charges which can be intelligently met, and to permit the court to determine whether, on the facts pleaded, there is any foundation, prima facie at least, for the charge of fraud.” (Apollo Capital Fund, LLC v. Roth Capital Partners, LLC (2007) 158 Cal.App.4th 226, 240, internal quotation marks omitted.)

Although Plaintiff’s previous complaint had failed to identify the specifics of the alleged misrepresentations, the SAC has remedied that flaw. Plaintiff provides a narrower scope of when each representation was made, what the representation consisted of, and who made the representation at issue.

Plaintiff has pleaded his cause of action for fraud with the required specificity. However, because Plaintiff’s cause of action fails to address the issue of the statute of limitations, Demurring Parties’ demurrer is sustained with leave to amend.

CONCLUSION

            Demurring Parties’ demurrer to Plaintiff’s second cause of action for fraud is SUSTAINED with 20 days leave to amend.

            Moving party to give notice.

Dated:   January 12, 2023                               ___________________________________

                                                                                    Joel L. Lofton

                                                                                    Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court indicating their

intention to submit.  Parties intending to appear are strongly encouraged to appear remotely.  alhdeptx@lacourt.org