TENTATIVE RULING

Defendant Brian Freeman’s Demurrer to Complaint is SUSTAINED with thirty (30) days leave to amend.

Plaintiff Lighter Capital, Inc. may amend its complaint only as authorized by the Court’s order and may not amend the complaint to add a new party or cause of action without having obtained permission to do so. (Harris v. Wachovia Mortgage, FSB (2010) 185 Cal.App.4th 1018, 1023.)

Defendant Brian Freeman 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 (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 967), but the Court does not “assume the truth of contentions, deductions, or conclusions of fact or law” (Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125).

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.)

First Cause of Action: Breach of Contract/Monies Due

Defendant Brian Freeman (“Defendant”) demurs to the first cause of action, but the complaint only brought this claim against former Defendant Heartbeat Technologies, Inc., who was dismissed on July 10, 2023. Both the demurrer and opposition assume this claim is now brought against Defendant, but he is not named in the complaint as to this claim, nor has any amendment been filed naming him in this cause of action. The Court declines to analyze whether a claim against him is proper where it has not been alleged. Should Plaintiff wish to allege a claim for breach of contract against Defendant, the Court will allow Plaintiff leave to amend this claim to allege it against either of the already named Defendants, if proper. The Court will then consider whether the claim has been properly stated should Defendant choose to challenge that claim in a future motion.

Second Cause of Action: Fraudulent Inducement and Third Cause of Action: Negligent Misrepresentation

“The elements of fraud,” including a cause of action for fraudulent inducement, “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 elements of a cause of action for negligent misrepresentation include “[m]isrepresentation of a past or existing material fact, without reasonable ground for believing it to be true, and with intent to induce another’s reliance on the fact misrepresented; ignorance of the truth and justifiable reliance on the misrepresentation by the party to whom it was directed; and resulting damage.” (Hydro-Mill Co., Inc. v. Hayward, Tilton & Rolapp Ins. Associates, Inc. (2004) 115 Cal.App.4th 1145, 1154, quotation marks omitted.) 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.)

Notably, neither the second nor third causes of action have any specific statements alleged in the body of the cause of action. Instead, Plaintiff alleges certain statements made by Defendant, without specificity, elsewhere in the complaint (Compl. ¶¶ 36-53), then asking the Court to determine the specific statements which may serve as the basis for each claim. The Court declines to form Plaintiff’s complaint for it. Plaintiff shall amend the complaint to specifically state the representations or omissions which serve as the basis for each cause of action. Such allegations shall be specific to each Defendant, and the allegations must meet the specificity requirements of a fraud claim. Accordingly, Defendant’s demurrer to the second and third causes of action is SUSTAINED with thirty (30) days leave to amend.

Fourth Cause of Action: Violation of California Business & Professions Code § 17200, et seq.

To set forth a claim for a violation of Business and Professions Code section 17200 (“UCL”), Plaintiff must establish Defendant 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.) A cause of action for unfair competition “is not an all-purpose substitute for a tort or contract action.” (Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 173.)

Plaintiff’s claim for violation of the UCL relies on the same allegations asserted in the prior claims, i.e., that Defendant misrepresented certain facts, but, as stated above, Plaintiff has not sufficiently stated fraud by Defendant. It follows that Plaintiff’s claim for violation of the UCL based on this fraud cannot succeed for the same reason. Thus, Defendant’s demurrer to the fourth cause of action is SUSTAINED with thirty (30) days leave to amend.