TENTATIVE RULING

Defendants Mega Solutions, Inc. and Gal David Halabi’s Demurrer to First Amended Complaint is OVERRULED as to the second cause of action and SUSTAINED with thirty (30) days leave to amend as to the third and fourth causes of action.

Defendants Mega Solutions, Inc. and Gal David Halabi’s Motion to Strike is DENIED as moot as to the third and fourth causes of action and paragraph 27 and otherwise GRANTED with thirty (30) days leave to amend.

Plaintiff Kyle Madison may amend his 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.)

Defendants Mega Solutions, Inc. and Gal David Halabi to give notice. 

REASONING

Defendants Mega Solutions, Inc. and Gal David Halabi (“Defendants”) demur to the second, third, and fourth causes of action alleged in Plaintiff Kyle Madison (“Plaintiff”)’s First Amended Complaint (“FAC”). Defendants also move to strike Plaintiff’s claims for punitive damages and treble damages and Plaintiff’s claims for fraud and intentional misrepresentation.

Legal Standard

“[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).

Further, the court may, upon 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, subd. (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, subd. (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.)

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.)

Second Cause of Action: Money Had and Received

“A cause of action for money had and received is stated if it is alleged that the defendant is indebted to the plaintiff in a certain sum for money had and received by the defendant for the use of the plaintiff. The claim is viable wherever one person has received money which belongs to another, and which in equity and good conscience should be paid over to the latter.” (Avidor v. Sutter’s Place, Inc. (2013) 212 Cal.App.4th 1439, 1454, brackets, quotation marks, and citations omitted.) Plaintiff must establish “that the defendant received money intended to be used for the benefit of the plaintiff, that the money was not used for the plaintiff’s benefit, and that the defendant has not given the money to the plaintiff.” (Ibid., brackets and quotation marks omitted.)

Plaintiff alleges that Defendants became indebted to Plaintiff in the sum of $170,000 for money had and received for Plaintiff’s benefit, and Defendants have refused to repay the sum. (FAC ¶¶ 16-17.) Defendants argue that Plaintiff is improperly using this cause of action to complicate the case, and Plaintiff’s claims to breach of contract and conversion are sufficient to recover any unpaid money for the alleged failures to complete the contract. While the claims for breach of contract and conversion may seek the same damages as this claim, the Court finds it proper to allow this claim to move forward, as this claim is an alternate theory of recovery, i.e., if the Court finds that no proper contract existed or that Defendants are not liable under a conversion theory, a claim for money had and received may provide a means for Plaintiff to recover the amount in dispute. Accordingly, Defendants’ demurrer to the second cause of action is OVERRULED.

Third Cause of Action: Fraud and Fourth Cause of Action: Intentional Misrepresentation

“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 elements of a cause of action for intentional misrepresentation are (1) a misrepresentation, (2) with knowledge of its falsity, (3) with the intent to induce another’s reliance on the misrepresentation, (4) actual and justifiable reliance, and (5) resulting damage.” (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1166.) 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.)

In the third and fourth causes of action, Plaintiff alleges only that Defendants made representations to Plaintiff that they would complete the remodeling work, but the representations were false and made with the intent to induce Plaintiff to rely on them, causing harm to Plaintiff. (FAC ¶¶ 20-24, 29.) These allegations are insufficient to support a fraud claim, as Plaintiff provides no specificity to allegations, i.e., Plaintiff fails to allege who said what to him, that person’s authority to speak on behalf of the corporate entity, what was said, and when it was said. Thus, Defendants’ demurrer to the third and fourth causes of action is SUSTAINED with thirty (30) days leave to amend.

Motion to Strike

Punitive damages may be recovered upon a proper showing of malice, fraud, or oppression. (Civ. Code, § 3294, subd. (a).) “Malice” is defined as conduct intended to cause injury to a person or despicable conduct carried on with a willful and conscious disregard for the rights or safety of others. (Turman v. Turning Point of Cent. Cal., Inc. (2010) 191 Cal.App.4th 53, 63.) “Oppression” means despicable conduct subjecting a person to cruel and unjust hardship, in conscious disregard of the person’s rights. (Ibid.) “Fraud” is an intentional misrepresentation, deceit, or concealment of a material fact known by defendant, with intent to deprive a person of property, rights or otherwise cause injury. (Ibid.) Conclusory allegations, devoid of any factual assertions, are insufficient to support a conclusion that parties acted with oppression, fraud, or malice. (Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1042.)

Plaintiff has insufficiently stated a claim for punitive damages arising out of fraud, as he has failed to sufficiently set forth fraud as stated above. Insofar as Plaintiff simply alleges, “Punitive damages,” this does not put the trier of fact on notice of the basis for a claim for punitive damages. As to Plaintiff’s prayer for treble damages under Penal Code section 496, Plaintiff has failed to describe the basis for such damages, and the Court will not determine a basis for such damages on its own. Accordingly, Defendants’ motion to strike is DENIED as moot as to the third and fourth causes of action and paragraph 27 and otherwise GRANTED with thirty (30) days leave to amend.