Judge: Jon R. Takasugi, Case: 23STCV05448, Date: 2023-08-25 Tentative Ruling

Case Number: 23STCV05448    Hearing Date: August 25, 2023    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendants’ demurrer is SUSTAINED. Defendants’ demurrer is SUSTAINED, WITHOUT LEAVE TO AMEND, as to the tenth cause of action. Defendants’ demurrer is SUSTAINED, WITH 20 DAYS LEAVE TO AMEND as to the remaining causes of action.  

Accordingly, Defendants’ motion to strike is MOOT.

On 3/10/2023, Plaintiffs Marvin Pietruszka M.D., Compremed Medical Group, Inc., and Bridgetone Holdings, LLC filed suit against Koruon Daldalyan, M.D., and Del Carmen Medical Center (collectively, Defendants). On 5/23/2023, Plaintiffs filed a first amended complaint (FAC), alleging: (1) fraud and deceit by intentional misrepresentation; (2) fraud and deceit by negligent misrepresentation; (3) fraud and deceit by suppression of facts; (4) constructive fraud; (5) breach of duty of loyalty/violation of California Labor code section 2863; (6) breach of assert purchase agreement; (7) conversion; (8) injunctive relief; (9) violation of the unfair competition law; (10) constructive trust; (11) an accounting; and (12) breach of lease.

            Now, Defendants demur to the first, second, third, fourth, fifth, seventh, and tenth causes of action.

Discussion

            Defendants argue that Plaintiffs cannot state a claim for the first, second, third, fourth, fifth, seventh, and tenth causes of action. In particular, Defendants argue that: (1) Plaintiff has not satisfied the heightened pleading standards to state a claim for fraud; (2) Plaintiffs have not alleged facts which could show a fiduciary duty existed; (3) have not alleged sufficient facts as to Plaintiff Pietruszka’s conversion claim; and (4) constructive trust is a remedy and not an independent cause of action.

            After review, the Court agrees.

            As for the fraud causes of action, they suffer either from uncertainty or insufficient particularity. As to the first cause of action, this claim is based on the alleged misrepresentation that “Defendants represented in the Asset Purchase Agreement that Daldalyan desired to purchase specified assets from Compremed, Daldalyan would forthwith make the initial payment of a minimum of $1 million for the Del Carmen medical practice as well that he would qualify for a loan to make the initial payment. orally represented many times both before the signing of the Asset Purchase Agreement and afterwards that Daldalyan would quickly and easily qualify for a loan of at least $1 million.” (FAC ¶ 55.) However, as noted by Defendants, the Asset Purchase Agreement contained no representations or warranties regarding the ability of Dr. Daldalyan to obtain a loan nor does it state when a loan would be obtained. (See, Ex. 3 to the FAC.) The Asset Purchase Agreement contained an integration clause of Section 11(b) which provided that it “contains the entire agreement between the parties respecting the subject matter contained herein,” and that it “may be amended or modified only in a writing signed by the party to be charged.” (Ex. 3 to FAC, § 11(b), p. 4.) As such, Plaintiffs must allege facts which reconcile this discrepancy.

            As for the second and third causes of action, it is unclear what alleged misrepresentations or concealment support these causes of action because Plaintiffs’ supporting allegations are conclusory. (See ¶¶ 65, 71.) Plaintiffs must allege these causes of action with specificity to provide notice as the substance of the additional claims of fraud separate and apart from those related to the loan misrepresentation.

            As for the fiduciary duty claim, Plaintiff alleges that “Daldalyan, as a partner of Pietruszka, owed fiduciary duties to the partnership and Pietruszka as the other partner.” (FAC, ¶ 86.) However, Plaintiff alleged at Paragraphs 14 and 20 of the First Amended Complaint that the partnership was terminated when the Asset Purchase Agreement was signed in August 2020. (See e.g. “The Asset Purchase Agreement effectively terminated the Partnership Agreement. Pietruszka continued to operate the Del Carmen medical practice in the same manner as before January 1, 2020, while he waited for Daldalyan to make the initial minimum payment of $1 million….”) As such, Plaintiffs must allege facts which could show that Defendants’ conduct after the Asset Purchase Agreement was executed and the partnership creating the fiduciary duty was dissolved, could still constitute a breach of fiduciary duty. 

            As for the conversion claim, it is asserted by both Plaintiffs Compremed and Pietruszka, and is based on an allegation that “Defendants have “wrongfully, unlawfully, and illegally taken and received checks made payable to the Del Carmen medical practice and other monies intended to be provided to the Del Carmen medical practice.” While this allegation is sufficient to show Compremed’s ownership or right to possession of the alleged controverted property, this does not show that Plaintiff Pietruszka had an  individual right to possession over the property. That the property at issue belonged to Compremed, and not Pietruszka as an individual is reinforced by the fact that Plaintiffs elsewhere in the First Amended Complaint have alleged that billings were sent under a tax identification number belonging to Compremed. (See, FAC, ¶ 2 – Del Carmen is a registered fictitious name of Compremed; FAC, ¶ 8 – taxpayer identification number 95-XXXXXXX used for all billings of Del Carmen.) Plaintiffs must allege facts which could show that Plaintiff Pietruszka individually (as opposed to Compremed) billed, owned or had the right to possession of the funds at the time they were allegedly taken.

            Finally, as for the constructive trust claim, the Court agrees that constructive trust is a remedy and not a cause of action. (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 76.) In sustaining the demurrer as to this cause of action, Plaintiffs may still pursue a constructive trust as a form of relief.

            Based on the foregoing, Defendants’ demurrer is sustained. Defendants’ demurrer is sustained, without leave to amend, as to the tenth cause of action. Defendants’ demurrer is sustained, with 20 days leave to amend, as to the remaining causes of action.  

It is so ordered.

Dated:  August    , 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.  For more information, please contact the court clerk at (213) 633-0517.