Judge: Joseph Lipner, Case: 24STCV07196, Date: 2024-11-07 Tentative Ruling
Case Number: 24STCV07196 Hearing Date: November 7, 2024 Dept: 72
SUPERIOR COURT OF CALIFORNIA
COUNTY OF LOS ANGELES
DEPARTMENT 72
TENTATIVE
RULING
|
APPRIZA PAY LLC, Plaintiffs, v. SIGUE CORPORATION, et al., Defendant. |
Case No:
24STCV07196 Hearing Date: November 7, 2024 Calendar Number: 5 |
Defendant Victor Cohen Arazi (“Cohen”) (collectively, the
“Individual Defendants”) demur to the second claim of the First Amended
Complaint (“FAC”) filed by Plaintiff Appriza Pay LLC (“Appriza”).
The Court OVERRULES the demurrer.
This is a commercial contract case. The following facts are
taken from the allegations of the Complaint, which the Court accepts as true
for the purposes of this demurrer.
Defendant Sigue Corporation (“Sigue”) (collectively with the
Individual Defendants, “Defendants”) is an international money transmitter. Its
business is to originate remittance transactions from customers who desire to
transfer funds internationally. In a remittance transaction, Sigue would
receive funds from its customers for remittance to specific beneficiaries.
Sigue would hold the funds in trust until the completion of the transaction.
Defendant Guillermo de la Viña (“de la Viña) is Sigue’s CEO, board chair, and
largest shareholder. Cohen is the CFO of Sigue.
Appriza provides payment services for use in international
money transfers. Appriza and Sigue entered into an agreement whereby Appriza
would facilitate money transfers originated by Sigue (the “Agreement”).
The Agreement initially provided that Appriza would not make
the transfer until Sigue deposited the corresponding remittance funds into a
bank account controlled by Appriza. Appriza and Sigue agreed to several
amendments to the Agreement, whereby Appriza could advance funds to complete a
transaction before Sigue deposited the remittance funds in Appriza’s account.
Appriza alleges that in 2023, Sigue continued requesting
advances, but stopped transferring remittance funds to Appriza, resulting in a
negative balance.
Appriza alleges that on December 7, 2023, Cohen met with
Appriza’s CFO, Jorge Garcia. At the meeting, Cohen allegedly stated that
Appriza’s credit analysis of Sigue did not accurately reflect Sigue’s liquidity
position. Cohen allegedly stated that Sigue’s liquidity position had improved
compared with the previous year because it had sold receivables and “the money
was in transit”, which Sigue would apply to Appriza’s future advances. (FAC ¶
28.) Appriza alleges that Cohen knew that Sigue would not respect its duty not
to take the remittance funds that would be owed to Appriza. (FAC ¶ 28.) Appriza alleges that Cohen knew that cash was
not in transit and that Sigue was still facing liquidity concerns. (FAC ¶ 31.)
Sigue alleges that Cohen knew that Sigue would be unable to repay the amounts
Appriza advanced to the beneficiaries of Sigue’s remittance customers. (FAC ¶
32.)
Appriza alleges that it relied on Cohen’s representations by
continuing to advance funds to Sigue until around January 10, 2024. (FAC ¶ 29.)
Appriza alleges that it was not contractually obligated to advance any of the
funds requested by Sigue because it had discretion under the Agreement to deny
the requests for advancement if it believed Sigue was insolvent. (FAC ¶ 3; see
also FAC, Ex. 4 at Exhibit B § I.A.ii.) Appriza alleges that did not repay Appriza.
(FAC ¶ 33.)
Appriza alleges that de la Viña is liable for Sigue’s
conduct as an alter-ego of Sigue. (FAC ¶ 8.) Appriza does not raise any alter
ego allegations against Cohen.
Plaintiff filed this action on March 31, 2024, raising
claims for (1) breach of contract (against Sigue); (2) fraud – intentional
misrepresentation (against Sigue and Cohen); (3) money had and received
(against Sigue and de la Viña); (4) conversion (against Sigue and de la Viña);
(5) unjust enrichment (against Sigue); (6) civil theft under Penal Code,
section 496 (against Sigue and de la Viña); and (7) fraudulent transfer under
Civil Code, sections 3439.01-3439.14 (against Sigue and de la Viña).
The Individual Defendants filed this demurrer on May 30,
2024. Plaintiff filed an opposition, and the Individual Defendants filed a
reply.
As a general matter, 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 pleading
alone, and not the evidence or facts alleged.” (E-Fab, Inc. v. Accountants,
Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) The court assumes the truth
of the complaint’s properly pleaded or implied factual allegations. (Ibid.) The only issue a demurrer is
concerned with is whether the complaint, as it stands, states a cause of
action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)
Where a demurrer is sustained, leave to amend must be
allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335,
348.) The burden is on the plaintiff to show the court that a pleading can be
amended successfully. (Ibid.;
Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.) However, “[i]f
there is any reasonable possibility that the plaintiff can state a good cause
of action, it is error to sustain a demurrer without leave to amend.” (Youngman v. Nevada Irrigation Dist.
(1969) 70 Cal.2d 240, 245).
The facts
constituting the alleged fraud must be alleged factually and specifically as to
every element of fraud, as the policy of “liberal construction” of the
pleadings will not ordinarily be invoked. (Lazar
v. Superior Court (1996) 12 Cal.4th 631, 645.) To properly allege
fraud against a corporation, the plaintiffs must plead the names of the persons
allegedly making the false representations, their authority to speak, to whom
they spoke, what they said or wrote, and when it was said or written. (Tarmann v. State Farm Mut. Auto. Ins. Co.
(1991) 2 Cal.App.4th 153, 157.)
“Less specificity is required when it appears from the
nature of the allegations that the defendant must necessarily possess full
information concerning the facts of the controversy.” (Wald v. TruSpeed
Motorcars, LLC (2010) 184 Cal.App.4th 378, 394 [quotation marks omitted].)
Appriza alleges that Cohen made two key false
representations: (1) that “Sigue’s liquidity position had in fact improved
compared with last year because it had sold receivables” and (2) that “the
money [from the sale] was in transit” and would be applied to Appriza’s future
advances. (FAC ¶ 28.)
The Court concludes that Appriza has adequately pled both representations. There is nothing unclear about the substance
of these representations. This is particularly
true in the context of the other allegations in the case.
Appriza has adequately pled knowledge of falsity. As Sigue’s
CFO, Cohen would be aware of Sigue’s financial position. The particular facts
of how Cohen learned specific financial facts are facts that would necessarily
be possessed by Cohen and Sigue, and not Appriza. Appriza is therefore not
required to make a more specific allegation than what it has already alleged.
Cohen argues that Appriza cannot allege justifiable reliance
because Sigue had already failed to make numerous payments owed. Appriza argues
that it justifiably relied on Cohen’s representation because “at least
initially Sigue did, in fact, true up on its obligations to repay Appriza.”
(FAC ¶ 27.) The Court concludes that Appriza has adequately alleged justifiable
reliance at the pleading stage.
Appriza has also identified its damages in the form of cash
advances after December 7, 2023. (FAC ¶¶
46-57.) Appriza has alleged that it was
not obligated under the Agreement to subsequently advance money, but that it
did so in reliance on Cohen’s representations. Appriza has alleged that Sigue
never repaid Appriza.
Cohen’s arguments about the chart “undercutting” the damage
claim are substantive arguments that can be litigated on their merits. They are not a reason to sustain the
demurrer.
The Court therefore overrules the demurrer.