Judge: John J. Kralik, Case: 24NNCV06558, Date: 2025-03-21 Tentative Ruling
Case Number: 24NNCV06558 Hearing Date: March 21, 2025 Dept: NCB
North
Central District
|
got
liens, inc., Plaintiff, v. zeb medical
corp., inc.,
et al., Defendants. |
Case No.:
24NNCV06558 Hearing Date: March 21, 2025 [TENTATIVE]
order RE: demurrer |
BACKGROUND
A.
Allegations
Plaintiff Got Liens, Inc. (“Plaintiff”) alleges
that it provides business development, scheduling, assistance with records
management, and lien negotiation, among other services, to doctors. Defendant Zeb Medical Corp., Inc. (“Zeb”) is
alleged to be a medical service provider, Defendant Primitivo Cabral “Cabral is
alleged to be an independent contractor or employee of Zeb, and Defendant Mitch
Rubin (“Rubin”) is alleged to be an employee and officer of Zeb.
Plaintiff alleges that Cabral introduced Plaintiff
to Zeb and identified himself as partner with Rubin for business. Plaintiff alleges that on February 6, 2023,
Plaintiff and Zeb (via Rubin) entered into a Business Development Agreement
whereby Plaintiff would provide services to Zeb and Zeb would compensate
Plaintiff with 20% of amounts paid on liens for patients that Plaintiff
referred to Zeb. Plaintiff alleges that
it performed more services to Zeb that required in the agreement and also
referred over 500 patients to Zeb.
Plaintiff alleges that Rubin told Plaintiff that Zeb did not want
Plaintiff to negotiate liens on its behalf, which Plaintiff believes was so
that Zeb would not have to comply with its obligation to compensate Plaintiff
under the agreement. Plaintiff is
informed and believes that Defendant received payments for liens from many
patients referred by Plaintiff, but Defendant did not inform Plaintiff of
this. Plaintiff alleges that it started
demanding records, accountings, and payments from Zeb and Rubin since July
2024, but they have delayed for months to provide documents. Plaintiff alleges that it has not received
records or accountings and has not received any compensation for its services.
The complaint, filed December 23, 2024, alleges
causes of action for: (1) intentional misrepresentation; (2) breach of
contract; (3) breach of covenant of good faith and fair dealing; (4) services
rendered; (5) implied-in-fact contract; and (6) unformalized agreement.
B.
Demurrer on Calendar
On February 13, 2025, Zeb filed a demurrer
to the complaint.
On March 14, 2025, Plaintiff filed an
untimely opposition brief. The
opposition papers were due by March 10, 2025.
Plaintiff states in the papers that it was unable to timely file an
opposition brief because it was a suspended corporation, but it has now been
revived.
REQUEST FOR JUDICIAL NOTICE
Zeb requests
judicial notice of the Secretary of State’s Certificate of Status regarding
“Got Liens,” wherein the record reflects that Got Liens is “Suspended – FTB as
of 05/01/2024.” (Dem., Ex. A.)
Plaintiff
requests judicial notice of the Certificate of Revivor Issued by the State of
California Franchise Tax Board, which has an effective date of March 11,
2025.
The requests are
granted.
DISCUSSION
Zeb demurs to the 1st to
6th causes of action in the complaint.
A.
Suspended Corporation
Zeb argues that
Plaintiff is a suspended corporation and thus lacks the ability to sue.
“The suspension of the corporate powers, rights,
and privileges means a suspended corporation cannot sue or defend a lawsuit
while its taxes remain unpaid. [Citation.] Once a suspended corporation
pays its taxes and obtains a certificate of revivor, however, the corporation
may be allowed to carry on the litigation.”
(Travelers Property Casualty Co. of America v.
Engel Insulation, Inc. (2018) 29 Cal.App.5th 830, 834.)
Zeb provided Plaintiff’s Certificate of Status, which
shows that as of May 1, 2024, it was a suspended corporation. However, in opposition, Plaintiff provides
the Certificate of Revivor, which states: “This corporation was relieved of
suspension or forfeiture and is now in good standing with the Franchise Tax
Board.” (Pl.’s RJN, Ex. A.) Plaintiff’s document is dated March 11,
2025.
While Plaintiff was a suspended corporation at the time
of filing the complaint, it has now cured its suspended status, such that it
currently has the ability to sue and maintain an action. As such, the demurrer on this ground is
overruled.
B.
1st cause of action for intentional
misrepresentation
To allege a cause of action for fraud, the
requisite elements are: (1) a representation,
usually of fact, which is false; (2) knowledge of its falsity; (3) intent to defraud; (4) justifiable reliance upon the misrepresentation;
and (5) damage resulting from that justifiable reliance. (Stansfield
v. Starkey (1990) 220 Cal. App. 3d 59, 72-73.) This cause of action is a tort of
deceit and the facts constituting each element must be alleged with
particularity; the claim cannot be saved by referring to the policy favoring
liberal construction of pleadings. (Committee on Children's Television, Inc. v. General Foods Corp.
(1983) 35 Cal.3d 197, 216.) Since the claim
must be pleaded with particularity, the cause of action based on
misrepresentations must allege facts showing how, when, where, to whom, and by
what means the misrepresentations were tendered. (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.)
In the 1st cause of action,
Plaintiff alleges that Defendants intentionally withheld information,
documents, and accounting from Plaintiff to purposefully avoid paying
Plaintiff. (Compl., ¶22.) Plaintiff alleges that Defendants knew that
without the information, documents, and/or accounting information for liens for
patients that Plaintiff referred to Zeb, Plaintiff would not know when it was
owed money or how much was owed. (Id.) Plaintiff alleges that Defendants never
wanted to or intended to pay Plaintiff for its services, but wanted Plaintiff
to rely on the fraudulent representations to defraud Plaintiff and avoid paying
Plaintiff to pursue the payments owed. (Id.,
¶23.)
Zeb argues that the allegations for fraud
are not pled with specificity. The
allegations fail to allege specific facts regarding the misrepresentation(s)
made, such as how, when, where, to whom, and by what means the
misrepresentations were made. As such,
the demurrer is sustained as to the 1st cause of action with leave
to amend.
C.
2nd cause of action for breach of contract
The essential elements of a cause of
action for breach of contract are: “(1) the
existence of the contract, (2) plaintiff's performance or excuse for
nonperformance, (3) defendant's breach, and (4) the resulting damages to
plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.) “A
written contract may be pleaded either by
its terms—set out verbatim in the complaint or a copy of
the contract attached to the complaint and incorporated therein
by reference—or by its legal effect.” (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489.)
In the 2nd cause of action,
Plaintiff alleges that it entered into a written agreement with Zeb for
Plaintiff’s services and Plaintiff performed all of its obligations under the
agreement. (Compl., ¶28.) Plaintiff alleges that the agreement did not
state a particular quantity of services that needed to be provided for
Plaintiff to be owed compensation. (Id.) Plaintiff alleges that Zeb breached the
agreement by failing to pay for Plaintiff’s services, such that Plaintiff was
harmed. (Id., ¶¶29-30.)
Zeb argues that the 2nd cause
of action fails because the terms of the written contract were not alleged and a
copy of the written contract was not provided.
Plaintiff argues that the contract was sufficiently alleged.
Reading the complaint as a whole, the
allegations of the material terms of the agreement are not adequately pled. The complaint alleges that Plaintiff and Zeb
entered into an agreement whereby Zeb would compensate Plaintiff with 20% of
amounts paid on liens for patients that Plaintiff referred to Zeb. (Compl., ¶14.) However, no other terms have been provided,
such as when such payments would be made, whether and when status of liens or
accountings must be provided, etc. Upon amendment, Plaintiff should provide a
copy of the written agreement with the amened complaint or plead further facts
regarding the material terms of the contract.
The demurrer to the 2nd cause
of action is sustained with leave to amend.
D.
3rd cause of action for breach of covenant
of good faith and fair dealing
“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.) “Without a contractual underpinning, there is no independent
claim for breach of the implied covenant.”
(Fireman's Fund Ins. Co. v.
Maryland Casualty Co. (1994) 21 Cal.App.4th 1586, 1599.)
In the 3rd cause of action,
Plaintiff alleges that Zeb breached the agreement and intentionally withheld
information, documents, and accounting from Plaintiff to purposely avoid paying
Plaintiff. (Compl., ¶32.) Plaintiff alleges that Zeb never wanted to or
intended to pay Plaintiff for its services and Zeb did not act fairly or in
good faith. (Id., ¶¶33-34.)
For the same reasons discussed with
respect to the 2nd cause of action, the demurrer is sustained as to
the 3rd cause of action.
E.
4th cause of action for services rendered, 5th
cause of action for implied-in-fact contract, and 6th cause of action for
unformalized agreement
Zeb demurs to the 4th, 5th,
and 6th causes of action, arguing that they are superfluous as they
seek the same damages as the breach of contract cause of action.
The 4th cause of action is
alleged against Zeb, Cabral, and Rubin. Plaintiff
alleges that Defendants requested that Plaintiff perform services to benefit
Zeb, which Plaintiff substantially performed.
(Compl., ¶37.) Plaintiff alleges
that it has not been paid for the services and that Cabral and/or Rubin may
have acted for their personal gain, such that they are personally liable. (Id., ¶¶38-39.) To the extent this cause of action is alleged
against Zeb, it appears to be duplicative of the breach of contract cause of
action. There are no new theories of
liability alleged against Zeb except a breach of contract (as opposed to the
allegations directed against Cabral and Rubin).
The demurrer to the 4th cause of action is sustained with
leave to amend.
The 5th cause of action is
alleged against Zeb only. The 6th
cause of action is alleged against Zeb, Cabral, and Rubin. Plaintiff alleges that it is informed and
believes that Zeb may contend that Plaintiff did not sign the written agreement
and on the basis Zeb believes the agreement is not valid. (Compl., ¶¶42, 48.) Plaintiff alleges that if this is the case,
then Plaintiff alleges there was an implied-in-fact contract or an unformalized
contract. (Id., ¶¶42, 48.) Plaintiff alleges that Zeb knew the terms of
the written agreement proceeded to work as if the agreement’s terms
applied. (Id., ¶¶43, 49.) For the 6th cause of action,
Plaintiff alleges that if the agreement was not signed, then Plaintiff believes
that it was unintentional, and the parties intended it to govern their
relationship. (Id., ¶50.) The 4th and 5th causes
of action are pled in the alternative to a breach of written contract
cause of action. Ordinarily, the Court
would allow such causes of action to go forward in the event that written
contract cannot be established. However,
as discussed above, the material terms of the contract (whether written, oral,
or implied-in-fact) have not been alleged.
As such, the demurrer to the 5th and 6th causes of
action is sustained with leave to amend.
CONCLUSION AND ORDER
Defendant Zeb Medical Corp., Inc.’s
demurrer to the complaint is sustained with 20 days leave to amend.
Defendant shall
provide notice of this order.
DATED: March 21,
2025 ___________________________
John
Kralik
Judge
of the Superior Court