Judge: Joseph Lipner, Case: 24STCV13560, Date: 2024-10-31 Tentative Ruling
Case Number: 24STCV13560 Hearing Date: October 31, 2024 Dept: 72
SUPERIOR COURT OF CALIFORNIA
COUNTY OF LOS ANGELES
DEPARTMENT 72
TENTATIVE
RULING
|
XUE XI, Plaintiff, v. DOES 1 - 10, Defendant. |
Case No:
24STCV13560 Hearing Date: October 31, 2024 Calendar Number: 6 |
Defendants Yangying Ma (“Ma”) and Cheng Xi (“Xi”) (collectively,
“Defendants”) demur to the first and third claims in the First Amended
Complaint (“FAC”) filed by Plaintiff Xue Xi (“Plaintiff”). Defendants
additionally move to strike portions of the FAC relating to Plaintiff’s demand
for punitive damages.
The Court SUSTAINS the demurrer to the first claim WITH
LEAVE TO AMEND.
The Court OVERRULES the demurrer to the third claim.
The Court DENIES the motion to strike as moot.
This
is a fraud and conversion case. The following facts are taken from the
allegations of the FAC, which the Court accepts as true for the purposes of the
demurrer.
Plaintiff
is a Chinese individual and resides in Shandong Province, China.
Defendant Ma resides in West Covina, California. Ma is
Defendant Xi’s mother. Plaintiff alleges that Xi resides with Ma.
In December 2020, Plaintiff sold a house located in
Pasadena, California and obtained $848,000.00. At this time, Plaintiff’s
father, Jianyi Xi (“Plaintiff’s father”), resided in California. Plaintiff
asked her father to deposit the funds into his bank account at Bank of America,
which he then did. The bank account in question is Plaintiff’s father’s
personal account and had no joint owners. Jianyi was aware that the proceeds
deposited into his account belonged to Plaintiff.
Plaintiff’s father returned to China in September 203 and
passed away in China on January 15, 2024.
After her father’s death, Plaintiff initiated a legal
process to obtain the $848,000.00 which was stored in her father’s bank
account. Plaintiff discovered that the balance of the account was less than
$2,000.00.
Plaintiff issued a subpoena to Bank of America and
discovered that Ma had withdrawn large sums of money from her father’s bank
account.
Plaintiff alleges that Ma withdrew $25,000.00 from the bank
account from September 2022 to August 2023 under the name of “Mineral Hement
Group Corporation.”
Plaintiff alleges that Defendant Xi used $49,197.67 of
Plaintiff’s funds in purchasing a vehicle (the “Vehicle”) in April 2023.
Plaintiff alleges that Xi withdrew $12,500.00 from the
account from July 2023 to October 2023.
Plaintiff alleges that Ma withdrew $160,000.00 on January 1,
2024. Plaintiff alleges that Ma withdrew $190,000.00 on January 15, 2024, after
Plaintiff’s father passed away.
Plaintiff
filed this action on May 31, 2024. The operative complaint is now the FAC,
which raises claims for (1) fraud (against Yangying Ma); (2) conversion
(against Yangying Ma and Cheng Xi); and (3) unjust enrichment (against Yangying
Ma and Cheng Xi).
Plaintiff
seeks $848,000.00 from Defendants, as well as possession of the Vehicle.
Defendants
demurred to the FAC on September 9, 2024 and concurrently filed the motion to
strike. Plaintiff file an opposition to each. Defendants have not filed a
reply.
“The party against whom a complaint or cross-complaint has
been filed may object, by demurrer or answer as provided in Section 430.30, to
the pleading on any one or more of the following grounds:
(a) The court has
no jurisdiction of the subject of the cause of action alleged in the pleading.
(b) The person who filed the pleading does not have the
legal capacity to sue.
(c) There is
another action pending between the same parties on the same cause of action.
(d) There is a defect or misjoinder of parties.
(e) The pleading does not state facts sufficient to
constitute a cause of action.
(f) The pleading is
uncertain. As used in this subdivision, “uncertain” includes ambiguous and
unintelligible.
(g) In an action
founded upon a contract, it cannot be ascertained from the pleading whether the
contract is written, is oral, or is implied by conduct.
(h) No certificate was filed as required by Section 411.35.”
(Code Civ. Proc., § 430.10.)
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 court may, upon a motion, or at any time in its
discretion, and upon terms it deems proper, strike any irrelevant, false, or
improper matter inserted in any pleading. (Code Civ. Proc., § 436(a).) The
court may also strike all or any part of any pleading not drawn or filed in
conformity with the laws of this state, a court rule, or an order of the court.
(Code Civ. Proc., § 436(b).) The grounds for a motion to strike are that the
pleading has irrelevant, false or improper matter, or has not been drawn or
filed in conformity with laws. (Code Civ. Proc., § 436.) The grounds for moving
to strike must appear on the face of the pleading or by way of judicial notice.
(Code Civ. Proc., § 437.)
“The elements of fraud are (a) a misrepresentation (false
representation, concealment, or nondisclosure); (b) scienter or knowledge of
its falsity; (c) intent to induce reliance; (d) justifiable reliance; and (e)
resulting damage.” (Hinesley v. Oakshade
Town Ctr. (2005) 135 Cal.App.4th 289, 294.)
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.) 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.) “[Fraud’s] particularity requirement necessitates pleading
facts which ‘show how, when, where, to whom, and by what means the
representations were tendered.’ [Citation.]” (Stansfield v. Starkey
(1990) 220 Cal.App.3d 59, 73.)
Defendants argue that Plaintiff has not alleged specific
false representations. Plaintiff argues that she has stated a claim for fraud
by concealment.
“[T]he elements of an action for fraud and deceit based on
concealment are: (1) the defendant must have concealed or suppressed a material
fact, (2) the defendant must have been under a duty to disclose the fact to the
plaintiff, (3) the defendant must have intentionally concealed or suppressed
the fact with the intent to defraud the plaintiff, (4) the plaintiff must have
been unaware of the fact and would not have acted as he did if he had known of
the concealed or suppressed fact, and (5) as a result of the concealment or
suppression of the fact, the plaintiff must have sustained damage.” (Lovejoy
v. AT&T Corp. (2004) 119 Cal.App.4th 151, 157–158.)
A duty to disclose arises when “[1] a defendant owes a
fiduciary duty to a plaintiff … [2] when the defendant has exclusive knowledge
of material facts not known to the plaintiff; [3] when the defendant actively
conceals a material fact from the plaintiff; or [4] when the defendant makes
partial representations but also suppresses some material facts.” (Jones v.
ConocoPhillips Co. (2011) 198 Cal.App.4th 1187, 1199 [internal citations
and quotation marks omitted; cleaned up].)
“Each of the [latter] three circumstances in which
nondisclosure may be actionable presupposes the existence of some other
relationship between the plaintiff and defendant in which a duty to disclose
can arise.” (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336–337.)
“[S]uch a relationship can only come into being as a result of some sort of
transaction between the parties.” (Id. at p. 337.) “Thus, a duty to
disclose may arise from the relationship between seller and buyer, employer and
prospective employee, doctor and patient, or parties entering into any kind of
contractual agreement.” (Ibid.)
Here, Plaintiff has not alleged a relationship giving rise
to a duty to disclose, nor has Plaintiff alleged false representations.
Plaintiff contends that the fact that Defendants withdrew her funds from the
bank account gives rise to an inference that they did so by fraud. However,
more factual specificity is required to state a fraud claim, even at the
pleading stage.
The Court sustains the demurrer to this claim with leave to
amend.
“The elements for a claim of unjust enrichment are receipt
of a benefit and unjust retention of the benefit at the expense of another. The
theory of unjust enrichment requires one who acquires a benefit which may not
justly be retained, to return either the thing or its equivalent to the
aggrieved party so as not to be unjustly enriched.” (Lyles v. Sangadeo-Patel (2014) 225 Cal.App.4th 759, 769, quotation
marks and citations omitted.)
Defendants argue that Plaintiff’s claim fails because unjust
enrichment is not a theory of recovery. While this is true in the most
technical sense, courts understand unjust enrichment to be synonymous with a
restitution claim, which is a cognizable theory of recovery.
“The phrase ‘Unjust Enrichment’ does not describe a theory
of recovery, but an effect: the result of a failure to make restitution under
circumstances where it is equitable to do so.” (Lauriedale Associates, Ltd.
v. Wilson (1992) 7 Cal.App.4th 1439, 1448.) Unjust enrichment is ‘ “a
general principle, underlying various legal doctrines and remedies,” ’ rather
than a remedy itself. [Citation.] It is synonymous with restitution.
[Citation.]” (Melchior v. New Line Productions, Inc. (2003) 106
Cal.App.4th 779, 792.)
“Unjust enrichment is not a cause of action”; it is simply
“a restitution claim.” (Hill v. Roll
International Corp. (2011) 195 Cal.App.4th 1295, 1307.)
The Court overrules the demurrer to this claim.
Because the Court has sustained the demurrer to the fraud
cause of action with leave to amend, the
Court denies the motion to strike as moot.