Judge: Jon R. Takasugi, Case: 21STCV20431, Date: 2023-09-11 Tentative Ruling

Case Number: 21STCV20431    Hearing Date: January 10, 2024    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendant Keaton Keller’s demurrer is OVERRULED in part, SUSTAINED in part. Defendant’s demurrer is OVERRULED as to the second cause of action, and SUSTAINED, WITHOUT LEAVE TO AMEND as to the third cause of action.

On 6/1/2021, Plaintiff Eian Beron, Jr. (Plaintiff) filed suit against Gas Media Group, LLA, Keaton Keller, and Oombrella Enterprises (collectively, Defendants). On 9/20/2023, Plaintiff filed a third amended complaint (TAC) alleging: (1) breach of oral contract: breach of the implied covenant of good faith and fair dealing; (2) promissory fraud (3) fraudulent concealment; and (4) breach of fiduciary duty.

Now, Defendant Keaton Keller (Defendant) demurs to the second and third causes of action.

Discussion

Defendant argues that Plaintiff cannot allege sufficient facts to support his fraud causes of action.

After review, the Court agrees and disagrees in part. 

In its ruling on the SAC, the Court had this to say about Plaintiff’s fraud claim:

As for the fraud causes of action, Defendants argue that Plaintiff has continued to improperly consolidate his fraud claims and has not alleged them with the requisite specificity.  The Court agrees. Promissory fraud and fraudulent concealment are not coextensive, and may not be pled as a single cause of action. Plaintiff must seek leave to amend to disentangle these claims. This is especially true given that Plaintiff’s concealment claim appears to be sufficiently pled, whereas Plaintiff’s fraudulent promise cause of action seems to be transforming a breach of a contractual promise into a fraudulent promise.

(Minute Order, p. 4.)

 Now, Plaintiff has alleged two separate causes of action: one for promissory fraud and one for concealment.

As for the promissory fraud claim, the Court finds it to be adequately pled. “The elements of promissory fraud . . . are: (1) a promise made regarding a material fact without any intention of performing it; (2) the existence of the intent not to perform at the time the promise was made; (3) intent to deceive or induce the promise to enter into a transaction; (4) reasonable reliance by the promisee; (5) nonperformance by the party making the promise; and (6) resulting damage to the promise.” (Rossberg v. Bank of America, N.A. (2013) 219 Cal.App.4th 1481, 1498.) Promissory fraud must be alleged with particularity. (Id.) “The particularity demands that a plaintiff plead facts which show how, when, where, to whom, and by what means the representations were tendered.” (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.) 

 Previously, the Court expressed concern that Plaintiff was merely transforming a breach of contract into a fraud claim. However, after review, the Court better understands that Plaintiff is alleging that Defendant knew at the time the promise was made that he had no intention of performing the promise, and made the promise to induce Plaintiff to, among other things, work for one year without compensation based on the promises in the agreement.  Moreover, while Defendant claims Plaintiff’s allegations are too unspecific, Plaintiff alleges that beginning in July 2018 though August 23, 2019, Defendant repeatedly made oral promises that he would not be deprived the benefits of his equity interest in GMG. This is sufficient at the pleading stage to show how, when, where, and to whom the alleged promise was made. 

  As for the concealment claim, Plaintiff alleges that “KELLER in his capacity as a fiduciary to the Plaintiff, fraudulently concealed and suppressed a material fact, i.e., that the Defendants would not do anything, or take any action for the purpose of depriving Plaintiff of any benefits of his membership interest in GMG, including but not limited to the full fair market value of his interest.” (TAC ¶ 42.) However, as noted by Defendant, this is the exact same thing that Plaintiff alleges that Defendant promised in the promissory fraud cause of action. In other words, Plaintiff’s promissory fraud claim is based on an allegation that Defendant promised Plaintiff that he would not do anything or take any action for the purpose of depriving him of any benefits of his equity interest in GMG. (TAC ¶ 31.) Then, in this cause of action, Plaintiff alleges that Defendant fraudulently concealed from him that Defendant would not do anything, or take any action for the purpose of depriving Plaintiff of any benefits of his membership interest in GMG. The Court agrees that Plaintiff cannot simultaneously allege that Defendant affirmatively promised him and concealed the same thing from him. “While inconsistent theories of recovery are permitted [citation] a pleader cannot blow hot and cold as to the facts positively stated. [Citations.]” (Gentry v. eBay, Inc. (2002) 99 Cal. App. 4th 816, 827–28 (emphasis in original, quoting Manti v. Gunari (1970) 5 Cal.App.3d 442, 449; see also Brown v. City of Fremont (1977) 75 Cal.App.3d 141, 146.)

Based on the foregoing, Defendant’s demurrer is overruled as to the second cause of action, and sustained as to the third cause of action. Given that this was Plaintiff’s third opportunity to allege fraudulent concealment, the Court declines to grant leave to amend.

It is so ordered.

Dated:  January    , 2024

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar.  For more information, please contact the court clerk at (213) 633-0517.