Judge Joel R Wohlfeil, Case 37-2022-00048986-CU-BC-CTL 2023-09-15 Tentative Ruling

Judge: Joel R Wohlfeil, Case: 37-2022-00048986-CU-BC-CTL, Date: 2023-09-15 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - September 13, 2023

09/15/2023 09:00:00 AM C-73 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Joel R. Wohlfeil

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Civil - Unlimited Breach of Contract/Warranty Demurrer / Motion to Strike 37-2022-00048986-CU-BC-CTL RAZAVINE VS MOSHTAGHI [IMAGED] CAUSAL DOCUMENT/DATE FILED: Demurrer, 06/16/2023

1. The general Demurrer (ROA # 33, 51) of Plaintiff / Cross-Defendant Seyed Raza vine ('Cross-Defendant') to causes of action 1 - 3, 6 and 7 in the First Amended Cross-Complaint ('FACC') by Cross-Complainant / Defendant Mitch Moshtaghi ('Cross-Complainant'), is OVERRULED.

Cross-Defendant is ordered to file and serve an Answer within 20 days of this hearing.

This ruling is based on the analysis set forth below.

1st COA: BREACH OF CONTRACT There is a two-year limitations period for an 'action upon a contract, obligation or liability not founded upon an instrument of writing.' Code Civ. Proc. 339(1).

A contract cause of action does not accrue, and the statute of limitations does not begin to run, until the contract has been breached. Spear v. California State Auto. Assn. (1992) 2 Cal. 4th 1035, 1042.

The discovery rule may be applied to breaches of contract which can be, and are, committed in secret and, moreover, where the harm flowing from those breaches will not be reasonably discoverable by a plaintiff until a future time. Gryczman v. 4550 Pico Partners, Ltd. (2003) 107 Cal. App. 4th 1, 4, 5.

A demurrer based on a statute of limitations will not lie where the action may be, but is not necessarily, barred. Geneva Towers Ltd. Partnership v. City of San Francisco (2003) 29 Cal. 4th 769, 781.

In order for the bar of the statute of limitations to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows that the action may be barred. Id. The original Cross-Complaint was filed on February 3, 2023. This cause of action alleges breach of an oral contract that was entered into in mid-2019. The creation of this agreement, its breach and the resulting damages are alleged in sufficient detail. Paragraphs 27 - 39 of the FACC-C allege various events and discoveries within early to mid-2021. It is not clear from these allegations when the breach occurred and when it was discovered. Therefore, whether the limitations period expired prior to the date this cross-action was filed is a question of fact that cannot be adjudicated via this Demurrer.

2nd COA: IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING Calendar No.: Event ID: TENTATIVE RULINGS

3009036 CASE NUMBER: CASE TITLE: RAZAVINE VS MOSHTAGHI [IMAGED] 37-2022-00048986-CU-BC-CTL There is an implied covenant of good faith and fair dealing in every contract that neither party will do anything which will injure the right of the other to receive the benefits of the agreement. Comunale v. Traders & General Ins. Co. (1958) 50 Cal. 2d 654, 658.

This covenant is implied as a supplement to the express contractual covenants, to prevent a contracting party from engaging in conduct which (while not technically transgressing the express covenants) frustrates the other party's rights to the benefits of the contract. Racine & Laramie, Ltd. v. Department of Parks & Recreation (1992) 11 Cal. App. 4th 1026, 1031, 1032.

A breach of this covenant involves something beyond breach of the contractual duty itself. Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal. App. 3d 1371, 1394.

'If the allegations do not go beyond the statement of a mere contract breach and, relying on the same alleged acts, simply seek the same damages or other relief already claimed in a companion contract cause of action, they may be disregarded as superfluous as no additional claim is actually stated.' Id. at 1395.

The express terms of the oral agreement at issue in this action are unclear. There is a potential that the wrongful conduct alleged transcends the express terms of the agreement. Therefore, whether this action encompasses something beyond breach of the contractual duty itself is a question of fact that cannot be adjudicated via this Demurrer.

3rd COA: FRAUD Fraud must be pled specifically; general and conclusory allegations do not suffice. Lazar v. Superior Court (1996) 12 Cal. 4th 631, 645.

This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered. Id. In this action sufficiently detailed facts are alleged supporting fraud. Details are provided regarding when, where and how funds were embezzled through the preparation of false accounting records.

6th COA: CONCEALMENT The elements of an action for fraud and deceit based on concealment are: (1) Defendant must have concealed or suppressed a material fact, (2) Defendant must have been under a duty to disclose the fact to Plaintiff, (3) Defendant must have intentionally concealed or suppressed the fact with the intent to defraud Plaintiff, (4) Plaintiff must have been unaware of the fact and would not have acted as he did if they had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, Plaintiff must have sustained damage. Boschma v. Home Loan Center, Inc.

(2011) 198 Cal. App. 4th 230, 248.

There are four circumstances in which nondisclosure or concealment may constitute actionable fraud: (1) when Defendant is in a fiduciary relationship with Plaintiff; (2) when Defendant had exclusive knowledge of material facts not known to Plaintiff; (3) when Defendant actively conceals a material fact from Plaintiff; and (4) when Defendant makes partial representations but also suppresses some material facts. LiMandri v. Judkins (1997) 52 Cal. App. 4th 326, 336.

In this action, sufficiently detailed facts are alleged supporting a claim for fraud by concealment.

Arguably, all four circumstances cited above give rise to a duty. Even if the employment relationship between the parties did not give rise to a fiduciary duty, the FAC-C alleges exclusive knowledge, active concealment and partial representations regarding the accounting records. Also, as discussed above, details are provided regarding when, where and how funds were embezzled through the preparation of Calendar No.: Event ID: TENTATIVE RULINGS

3009036 CASE NUMBER: CASE TITLE: RAZAVINE VS MOSHTAGHI [IMAGED] 37-2022-00048986-CU-BC-CTL false accounting records.

7th COA: CONVERSION A cause of action for conversion requires allegations of Plaintiff's ownership or right to possession of property; Defendant's wrongful act toward or disposition of the property, interfering with Plaintiff's possession; and damage to Plaintiff. PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal. App. 4th 384, 395.

Money cannot be the subject of a cause of action for conversion unless there is a specific, identifiable sum involved, such as where an agent accepts a sum of money to be paid to another and fails to make the payment. Id. Paragraph 28 of the FAC-C alleges specific identifiable sums in 'cash envelopes.' Paragraph 41 alleges embezzlement of a specific sum: $400,000. Paragraph 97 alleges embezzlement of a specific sum: $600,000. Either amount is a specific sum capable of identification. The pleading as a whole appears to allege Cross-Defendant was an agent accepting payments (for parking) on behalf of Cross-Complainant. Therefore, conversion is sufficiently alleged.

_____ 2. The Motion (ROA # 34, 51) of Plaintiff / Cross-Defendant ('Cross-Defendant') for an order striking the punitive damages in the First Amended Cross-Complaint ('FACC') by Defendant / Cross-Complainant Mitch Moshtaghi ('Cross-Complainant'), is DENIED.

As stated within the concurrent ruling, the Demurrer to cause of action 3 has been overruled and cause of action 4 was not challenged. As a result, the FAC-C alleges causes of action based in fraud.

A properly pled fraud claim will itself support recovery of punitive damages. No allegations of 'malice' or intent to injure Plaintiff are required because fraud is an alternative and independent basis for recovery.

See Civ. Code 3294(a) and Stevens v. Superior Court (1986) 180 Cal. App. 3d 605, 610.

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3009036