Judge: Jon R. Takasugi, Case: 22STCV31403, Date: 2023-04-14 Tentative Ruling

Case Number: 22STCV31403    Hearing Date: April 14, 2023    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

            Defendants’ demurrer is OVERRULED as to the sixth cause of action for quantum meruit, and SUSTAINED as to all remaining causes of action with 20 days’ leave to amend.

            On September 26, 2022, Plaintiffs Jonathan Karsh and Rebecca Rosichan (collectively, “Plaintiffs”) filed a complaint against Defendants Endeavor Content, LLC, Film 45, LLLC, Michael Antinoro, and Max Wagner (collectively, “Defendants”), for breach of oral contract, anticipatory breach of contract, breach of fiduciary duty (partnership), and fraud.

            On December 15, 2022, Defendants demurred to the complaint. On January 27, 2023, Plaintiffs filed the operative First Amended Complaint (“FAC”), which mooted the previously filed demurrer. Plaintiffs allege causes of action for breach of contract, breach of fiduciary duty, fraud, negligent misrepresentation, unfair business practices § 17200, quantum meruit, and breach of implied covenant of good faith and fair dealing.

            Defendants now demur to all causes of action in the FAC for failure to state claim and also for uncertainty as to the first cause of action for breach of contract. Plaintiffs opposed the motion and Defendants have replied.

Legal Standard

A demurrer for sufficiency tests whether the complaint states a cause of action.¿ (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747 (Hahn).) ¿When considering demurrers, courts read the allegations liberally and in context.¿  (Taylor v. City of Los Angeles Dept. of Water and Power¿(2006) 144 Cal.App.4th 1216, 1228.)¿ 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.)¿ “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters.¿ Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.” (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, supra, 147 Cal.App.4th at p. 747.)

Discussion

Plaintiffs allege that they entered into an agreement with Defendants to help produce a certain TV show referred to as “Doha Debates Live” (the “Series”). Plaintiffs allege that they helped Defendants secure a production agreement with a third party, i.e., the Qatar Foundation, but that Defendants have ignored them with respect to the status of the production. Plaintiffs seek compensation for the services they claim to have rendered for Defendants.

a.      Breach of Contract

The elements of a cause of action for breach of contract are: (1) existence of contract; (2) plaintiffs’ performance or excuse for nonperformance; (3) defendants’ breach (or anticipatory breach); and (4) resulting damage. (Wall Street Network, Ltd. v. N. Y. Times Co. (2008) 164 Cal.App.4th 1171, 1178.)

Plaintiffs have failed to state a claim for breach of contract. Plaintiffs allege that they are to be compensated $25,000 per episode of Series plus a certain percentage of the Defendants’ compensation received in connection with the production and broadcast of the show. (FAC, ¶27.) However, Plaintiffs have failed to allege whether any such shows have been produced or broadcast. If no shows have been broadcast or produced, then there is no breach or resulting damages. Accordingly, this claim necessarily fails and the demurrer is sustained with leave to amend.

Since the demurrer has been sustained as to this cause of action on the basis of failure to state a claim, the Court declines to address Plaintiff’s demurrer on the basis of uncertainty.

b.      Breach of Fiduciary Duty

The elements of a cause of action for breach of fiduciary duty are: (1) the existence of a fiduciary duty; (2) breach of the duty;  and (3) damage caused by the breach. (Charnay v. Cobert¿(2006) 145 Cal.App.4th 170, 182.)

Plaintiffs have failed to state a claim for breach of fiduciary duty. This cause of action suffers from the same problems as the prior cause of action for breach of contract, namely whether any such shows of the Series have been produced or broadcast. This necessarily undermines any claims for breach or damages. Additionally, Plaintiffs did not oppose the demurrer as to this cause of action, which tends to show that Defendants’ argument here are meritorious. Nevertheless, the Court will grant Plaintiffs an additional opportunity to amend.

Therefore, the Court sustains the demurrer with leave to amend.

c.      Fraud

The elements of a claim for fraud are: (1) misrepresentation; (2) knowledge of falsity (or "scienter"); (3) intent to defraud (induce reliance); (4) justifiable reliance; and, (5) resulting damage. (Conroy v. Regents of Univ. of Cal. (2009) 45 Cal. 4th 1244, 1255.)

Plaintiffs have failed to state a claim for fraud. As stated above with the preceding causes of action, Plaintiffs have failed to allege whether any shows of the Series have been produced or broadcast. This necessarily undermines any damage claims. Moreover, Plaintiffs have not alleged any facts to show whether Defendants knowingly misrepresented anything to Plaintiffs. Plaintiffs’ lone allegation of Defendants’ intent not to perform is conclusory and at most evidences a failure to perform as promised, which is not actionable fraud. (See Building Permit Consultants, Inc. v. Mazur (2004) 122 Cal.App.4th 1400, 1414 [mere failure to perform as promised is not fraud].)

Therefore, the Court sustains the demurrer with leave to amend.

d.      Negligent Misrepresentation

The elements of a claim for negligent misrepresentation are: (1) Assertion of an untrue fact; (2) believed by defendant to be true; (3) lack of reasonable ground for the belief; (4) defendant’s intent to induce plaintiff’s reliance upon the representation; (5) plaintiff’s justifiable reliance upon the representation;  and (6) resulting damage. (Melican v. Regents of Univ. of Cal. (2007) 151 Cal.App.4th 168, 182.)

Plaintiffs have failed to state a claim for negligent misrepresentation for the same reasons set forth above, namely the failure to allege whether any shows of the Series have been produced or broadcast and the absence of resulting damages.

Therefore, the Court sustains the demurrer with leave to amend.

e.      Unfair Business Practices

The elements of a claim for fraud under the Unfair Business Practices Act are: (1) Defendant’s affirmative misrepresentation, conduct, or business practice, or omission in violation of a duty of  defendant to disclose; and (2) that is likely to deceive members of the public. (Buller v. Sutter Health¿ (2008) 160 Cal.App.4th 981, 986.) A breach of contract claim without some additional element of wrongfulness will not support a claim for breach of contract under the Unfair Business Practices Act. (Puentes v. Wells Fargo Home Mortgage, Inc. (2008) 160 Cal.App.4th 638, 645.)

Plaintiffs have failed to state a claim for fraud under the Unfair Business Practices Act. Plaintiffs have failed to allege any type of fraud for the reasons set forth above. They also have failed to allege anything evidencing some sort of fraud on the public. Additionally, they have failed to allege a cause of action for breach of contract for the reasons set forth above. Even if they had alleged a breach of contract claim, all they have alleged is a breach of a single isolated private agreement, not a standard form agreement regularly used with the public.

Therefore, Plaintiffs have failed to state a claim for fraud under the Unfair Business Practices Act. The demurrer is sustained with leave to amend.

f.       Quantum Meruit

The elements of a claim for quantum meruit are: (1) the plaintiff acted per a request for services by the defendant, and (2) the services conferred a benefit on the defendant. (Port Med. Wellness, Inc. v. Connecticut Gen. Life Ins. Co. (2018) 24 Cal. App. 5th 153, 180, 233.) A plaintiff may not pursue or recover on a claim for quantum meruit if there is an enforceable contract regarding the particular subject matter. (Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1388.)

The Court finds that Plaintiffs have made sufficient allegations to withstand a demurrer as to their claim for quantum meruit. Plaintiffs allege that they provided services to Defendants at their request in connection with the Series and helped Defendants secure a production agreement with the Qatar Foundation. (FAC, ¶¶ 18-22, Exs. C-D.) While this claim overlaps with Plaintiffs’ claim for breach of contract, the Klein case cited by Defendants seemed to be focused on the allegations of the complaint in that case alleging the existence of a valid agreement. (Klein, supra, 202 Cal.App.4th at p. 1388) [emphasis added]. Here, while the Plaintiffs have alleged the existence of an agreement, they have not necessarily alleged the existence of a valid agreement, which allows them to allege quantum meruit in the alternative. (Id.) Defendants also contended in their moving papers that Plaintiffs had not alleged the existence of a valid agreement, so Defendants cannot have it both ways.

As for Defendants’ claim that this cause of action is barred by the statute of limitations, the FAC lacks sufficient allegations to determine when that statute began to run. Accordingly, the demurrer is overruled on this basis as well.

Therefore, the demurrer is overruled as to this cause of action.

g.      Breach of the Implied Covenant of Good Faith and Fair Dealing.

The elements of a claim for breach of the implied covenant of good faith and fair dealing are: (1) existence of contractual relationship; (2) implied duty; (3) breach; and (4) causation of damages. (Smith v. San Francisco (1990) 225 Cal.App.3d 38, 49.)

For the reasons set forth above, namely the lack of allegations regarding whether any episodes of the Series have been produced or broadcast and lack of damages, Plaintiff’s claim for breach of the implied covenant of good faith and fair dealing also fails.

Therefore, the Court sustains the demurrer with leave to amend.

Conclusion

The Court OVERRULES the demurrer as to the sixth cause of action for quantum meruit.

The Court SUSTAINS the demurrer as to all remaining causes of action, with 20 days’ leave to amend.

Defendants to give notice.

It is so ordered.

Dated: April     , 2023

   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. 

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