TENTATIVE RULING

Plaintiff/Cross-Defendant Maroon Society, Inc.’s Demurrer to Cross-Complaint is OVERRULED.

Plaintiff/Cross-Defendant Maroon Society, Inc. shall file and serve an answer to Defendant/Cross-Complainant Nisha Shah’s Cross-Complaint within ten (10) days of entry of this order. (Cal. Rules of Court, rule 3.1320(j).)

Plaintiff/Cross-Defendant Maroon Society, Inc. to give notice. 

REASONING

“[A] demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.) A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (See Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994 [in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents].) For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true, but the reviewing court does not assume the truth of conclusions of law. (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 967.)

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 [court shall not “sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment”]; Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037 [“A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment.”]; Vaccaro v. Kaiman (1998) 63 Cal.App.4th 761, 768 [“When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend.”].) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

Service Issues

Plaintiff/Cross-Defendant Maroon Society, Inc. (“Plaintiff”) begins by arguing that Defendant/Cross-Complainant Nisha Shah (“Defendant”)’s cross-complaint must be dismissed in its entirety because the cross-complaint was not served on Cross-Defendant Aaaron Celious. This argument is improper in a demurrer, and Plaintiff lacks standing to contest service issues as to Celious. Thus, the demurrer is OVERRULED on this basis.

First Cause of Action: Trade Libel

“A cause of action for trade libel includes the following elements: (1) the defendant published a statement that tended to disparage the plaintiff's product or property; (2) the statement was provably false; (3) the defendant either knew the statement was false or acted with reckless disregard for its falsity; and (4) the statement caused actual pecuniary damage.” (ZF Micro Solutions, Inc. v. TAT Capital Partners, Ltd. (2022) 82 Cal.App.5th 992, 1002, fn. 5.)

Defendant alleges that Plaintiff published various statements to third parties, including statements that the third parties were in violation of the law or in breach of contract if they did business with Defendant, and that Defendant was not properly attributing work to Plaintiff. (Cross-Compl. ¶ 19.) Elsewhere in the cross-complaint, Defendant describes the specific statements that were made by Celious, acting on Plaintiff's behalf, and the date of the email. (Cross-Compl. ¶¶ 14-16.) Plaintiff argues that Defendant has not alleged any particular customers or transactions, but this is not required to state a claim for trade libel. While Defendant has not alleged the specific nature of the losses she has suffered due to this publication, she has alleged harm, and the exact nature may be revealed during the course of litigation. The Court finds that Defendant has properly stated a claim for trade libel. Accordingly, Plaintiff’s demurrer to the first cause of action is OVERRULED.

Second Cause of Action: Intentional Interference with Contractual Relations

The elements of a cause of action for intentional interference with contractual relations are “(1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (I-CA Enterprises, Inc. v. Palram Americas, Inc. (2015) 235 Cal.App.4th 257, 289.)

Defendant alleges that valid and enforceable contracts existed between her and third parties, Plaintiff had knowledge of those relationships, and Plaintiff acted to interfere with those relationships. (Cross-Compl. ¶¶ 25-26.) While Defendant does not allege the specific contractual relationships, Defendant is not required to do so where Plaintiff has knowledge of the contractual relationships which may have been disrupted. (Edler v. Pacific Bell Telephone Co. (2012) 205 Cal.App.4th 841, 858.) Thus, Plaintiff’s demurrer to the second cause of action is OVERRULED.

Third Cause of Action: Fraudulent Misrepresentation

On November 13, 2024, Defendant voluntarily dismissed her third cause of action for fraudulent misrepresentation.

Fourth Cause of Action: Unfair Business Practices

To set forth a claim for a violation of Business and Professions Code section 17200, Defendant must establish Plaintiff was engaged in an “unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising” and certain specific acts. (Bus. & Prof. Code, § 17200.)

Defendant alleges that Plaintiff engaged in a campaign to make false statements to third parties so they would not do business with Defendant. (Compl. ¶¶ 14-16, 19, 25-26, 36.) This constitutes conduct supporting a claim for unfair business practices. Accordingly, Plaintiff’s demurrer to the fourth cause of action is OVERRULED.