Judge: Jon R. Takasugi, Case: 24STCV12627, Date: 2025-02-13 Tentative Ruling

Case Number: 24STCV12627    Hearing Date: February 13, 2025    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Cross-Defendant Cieffe’s demurrer is OVERRULED IN PART, SUSTAINED IN PART. Cieffe’s demurrer is OVERRULED as to the first cause of action, and SUSTAINED, WITH 20 DAYS LEAVE TO AMEND, as to the second and third causes of action.

Accordingly, Cieffe’s motion to strike is moot.

            On 5/20/2024, Plaintiff Confezioni E Facon SRL aka Cieffe SRL (Plaintiff) filed suit against EZR Brand, Eli Azran, and Moshe Azran, alleging: (1) breach of written contract; (2) breach of implied-in-fact contract; (3) quantum meruit; (4) breach of the covenant of good faith and fair dealing; (5) fraud and intentional deceit; and (6) unjustment enrichment and constructive trust.

            On 9/4/2024, EZR, Inc. (EZR) filed a cross-complaint (XC) against Confezioni E Facon SRL aka Cieffe SRL (Cross-Defendant or Cieffe). On 11/8/2024, EZR filed a first amended cross-complaint (FAXC) alleging: (1) breach of contract; (2) fraud; and (3) unfair business practices.

            On 12/9/2024, Cieffe demurred to the EZR’s FAXC.

Factual Background

EZR allegedly sought out Cieffe’s services for creating a collection of apparel goods for wholesale distribution/sale. (FAXC ¶ 11.) To that end, EZR provided “designs, color schemes, cut-outs and…apparel goods” to Plaintiff, for the creation of a multi-piece collection. (Id. ¶ 12.)

Discussion

            Cieffe argues that EZR’s XC is uncertain, and fails to allege sufficient facts as to any of the three causes of action.

            As for the first cause of action, EZR alleges that the contract was implied by conduct and confirmed in writing. Cieffe argues that EZR’s allegations are uncertain because EZR alleges that the contract is based on “past…experience in creating the samples” and the hope that Plaintiff “would charge EZR a small premium on top of the cost of labor and materials”. (Id. ¶13.)  As such, Cieffe argues that EZR is alleging an agreement based only on EZR’s understanding, past experience, and expectations, rather than actual conduct allegations. However, EZR alleges:

Between February and April, 2023, EZR and Cieffe entered into an agreement in which Cieffe agreed to produce a collection of 29 apparel pieces in leather, denim and various other fabrics for EZR based on designs and specs provided by EZR by no later than early June, 2023. In exchange for Cieffe producing the 29 pieces, EZR agreed to pay Cieffe at a price of cost plus 25% based on full transparency. As set forth in California Commercial Code § 2207(3), the terms of the agreement were implied by the conduct of Cieffe and EZR and were ratified in emails between the parties (the “EZR Agreement”)

            (FAXC ¶ 25.)

            As such, EZR alleges actual concrete terms and conduct to support its contention that an implied contract was formed. This is sufficient at the pleading stage. Whether the contract, in fact, included terms that were based only on EZR’s unilateral wishes and expectations is a factual determination not properly made at this stage. Moreover, whether or not EZR’s damages are speculative is a factual determination. EZR’s FAXC alleges that EZR has lost profits, lost future business, and has had its goodwill and reputation damaged. (FAXC ¶ 25.)

As for the second cause of action, Cieffe argues that EZR’s fraud cause of action lacks the requisite specificity. The Court agrees. A breach of contract and fraudulent promise are not synonymous. Something more than nonperformance is required to show the defendant's intent not to perform his promise. (See Baxter v. Petersion (2007) 150 Cal.App.4th 673.) Moreover, the specificity requirement means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made, and, in the case of a corporate defendant, the plaintiff must allege the names of the persons who made the representations, their authority to speak on behalf of the corporation, to whom they spoke, what they said or wrote, and when the representation was made. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)” (West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 793.)

Here, not only does EZR not allege any specific misrepresentations or any facts which could show more than an intent not to perform, but EZR alleges only on information and belief that Cieffe made misrepresentations, without any facts to explain why this is only on information and belief. This is insufficient to support a claim for fraud.

As for the third cause of action, Cieffe argues that this claim is unintelligible because a “single instance of overcharging a consumer is not a ‘business practice’, or actionable per se in a free market enterprise.” (Demurrer, 12: 25-26.) The Court disagrees. There is no per se rule that a single incident is insufficient to constitute unfair conduct. However, the Court agrees here that EZR has not alleged sufficient facts, with the requisite particularity, to show an Unfair Competition Law (UCL) violation.  A common law violation such as breach of contract is insufficient to show “unlawful” business conduct under the UCL.  (See Shroyer v. New Cingular Wireless Services, Inc. (9th Cir. 2010) 622 F.3d 1035, 1044.) To show “unfair” conduct under the UCL, EZR must allege facts which could show “conduct that threatens an incipient violation of an antitrust law, or violates the policy or spirit of one of those laws because its effects are comparable to or the same as a violation of the law, or otherwise significantly threatens or harms competition.”

Based on the foregoing, Cieffe’s demurrer is sustained in part, overruled in part. Cieffe’s demurrer is overruled as to the first cause of action, and sustained, with 20 days leave to amend, as to the second and third causes of action. Accordingly, Cieffe’s motion to strike is moot.

It is so ordered.

Dated:  February    , 2025

   Hon. Jon R. Takasugi
   Judge of the Superior Court

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