Judge: Margaret L. Oldendorf, Case: 23AHCV00457, Date: 2023-11-28 Tentative Ruling

Case Number: 23AHCV00457    Hearing Date: November 28, 2023    Dept: P

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

NORTHEAST DISTRICT

          I.        INTRODUCTION

          In the main action, Plaintiff Bishnu Neupane (Neupane) sues his former employers, Defendants JPJS Inc. dba Foremost Liquor Market (Foremost) and Pritpal Sidhu (Sidhu), for claims stemming from alleged violations of the Labor Code. Sidhu has since been dismissed from the action.

          Defendant Foremost filed a cross-complaint alleging that Neupane, a long-term employee, embezzled from the business for many years by failing to ring up transactions on the register; and instead keying a “no sale” transaction and keeping the money.

          Before the Court are Neupane’s challenges to the operative First Amended Cross-Complaint (FAXC). For the reasons that follow, the demurrer is sustained in part. The motion to strike is granted.

II. REQUEST FOR JUDICIAL NOTICE

Foremost seeks judicial notice of the First Amended Cross-Complaint and the Complaint in this action, pursuant to Evidence Code Section 452.

Though it is not necessary to take judicial notice of papers already in the court file, the request is granted. (See Evid. Code § 452, subd. (d), Evid. Code § 453; Scott v. JP Morgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 754-755.)

Accordingly, judicial notice is taken of Exhibits 1 and 2 to the Opposition.

III.     SUMMARY OF FACTS ALLEGED IN THE FIRST AMENDED CROSS-COMPLAINT

¶2       Neupane was at all relevant times an employee of Foremost.

¶6       In this action, Foremost seeks recovery of Neupane’s allegedly ill-gotten gains from his employment at Foremost.

¶7       Neupane was employed by Foremost for 15 years. Foremost owns and operates a convenience store. As a long-term employee, Neupane had unfettered access to the books and records, the cash register and cash drawer, and the safe.

¶8       While employed, and without the knowledge or consent of Foremost and/or its principal, Neupane allegedly embezzled money from Foremost and manipulated the records to present a façade that Foremost was generating money all the while eating into the inventory by recording cash transactions as a “no sale.”

¶9       Based on the inaccurate accounting records and the store’s surveillance footage, Foremost is informed and believes that Neupane embezzled from Foremost for several years.

¶10     Neupane engaged in a systematic practice of embezzling funds from Foremost by failing to ring up transactions on the register and instead keying the transaction as a “no sale” and ultimately pocketing the cash.

          On these facts, Foremost alleges the following causes of action:

1. Unjust Enrichment

2. Conversion

3. Fraud

4. Improper Disposition of Money.

IV.     DEMURRER

A. Legal Standard

Code Civ. Proc. Section 430.10(e) provides for a demurrer on the basis that a complaint fails to state a cause of action. (CCP § 430.10(e).) A demurrer tests the legal sufficiency of a complaint. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) 

Code Civ. Proc. Section 430.10(f) provides for a demurrer where a pleading is uncertain. (CCP § 430.10(f).) Demurrers for uncertainty are disfavored and are only sustained where a pleading is so incomprehensible a defendant cannot reasonably respond. (A.J. Fistes v. GDL Best Contractors, Inc. (2019) 38 Cal.App.5th 677, 695; Khoury v. Maly’s of California (1993) 14 Cal.App.4th 612, 616.)

          B. Meet and Confer Requirement Not Met

          The Declaration of David Greene is offered in support of counsel’s compliance with the meet and confer requirements of Code Civ. Proc. Section 430.41. However, Greene does not state either (a) the means by which the parties met and conferred or (b) that the party who filed the pleading subject to demurrer failed to respond to the meet and confer request. (CCP § 430.31(a)(3).) Consequently, there is an insufficient showing that the meet and confer requirement has been met. This, in and of itself however, is not a sufficient basis for overruling the demurrer. (CCP § 430.41(a)(4).)

          C. The Demurrer To The First and Second Causes of Action Are Overruled

          Neupane demurs to each of the four causes of action on the ground that the claims lack sufficient facts and are ambiguous.

          With regard to the 1st cause of action for unjust enrichment, the only argument raised is that the alleged conduct is not defined by “time, scope, or any other matter,” by which anyone can determine “how, when, or in what manner” the conduct allegedly occurred. This argument is unpersuasive as to this claim. There is no requirement that the time of the events be alleged. Neupane may believe that portions of the claim are time-barred, but if so that defense is not apparent on the face of the pleading. “A demurrer based on a statute of limitations will not lie where the action may be, but is not necessarily, barred. In order for the bar ... to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows that the action may be barred.” (Stueve Bros. Farms, LLC v. Berger Kahn (2013) 222 Cal.App.4th 303, 321, internal quotation marks and citations omitted.) As to the argument that the pleading has not alleged in what manner the conduct occurred, this argument is also unpersuasive.  Neupane is directed to ¶¶6-10 of the FAXC. (See Opposition p.4: 5-8.)

          The same arguments are raised regarding the 2nd cause of action for conversion, and they lack merit for the same reasons. One additional argument Neupane interposed here is here is that conversion is the wrongful exercise of dominion over the personal property of another (with legal citations). But the legal argument is made in a conclusory fashion, and is not tied to the facts alleged. The pleading does allege Neupane’s wrongful dominion over the personal property of Foremost.  This is sufficient.

D. The Demurrer to The Third and Fourth Causes of Action Are Sustained

          Neupane is correct that fraud is subject to a heightened pleading standard. Each element must be pleaded with particularity. (Glaski v. Bank of America (2013) 218 Cal.App.4th 1079, 1090.) That particularity is missing here. Foremost fails to allege specific facts supporting a claim for fraud.    

As for the fourth cause of action, a claim for improper disposition of property is sometimes used in other civil actions; but its applicability here is unclear.  In both the 3rd and 4th causes of action, Foremost alleges that Neupane owed a “duty of loyalty” to it as an employee. however, there are insufficient facts alleged here to support a separate claim for improper disposition of property.    

V.       MOTION TO STRIKE

          A. Legal Standard

          Code Civ. Proc. Section 436: “The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper:

(a) Strike out any irrelevant, false, or improper matter inserted in any pleading.

(b) Strike out 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.” (CCP § 436.)

          B. The Motion to Strike is Granted in Part

Neupane seeks to strike the prayer for damages pursuant to Penal Code Section 496(c). This statute does provide for heightened remedies in a private action for, inter alia, theft.  These remedies do appear to be available to Foremost under its second cause of action for conversion.  However, they are not available under the other causes of action.  Therefore, the motion to strike the prayer for attorney’s fees and treble damages is granted in part, as to the First, Third, and Fourth Causes of Action of the First Amended Cross-Complaint. 

VI.     CONCLUSION AND ORDER

           The demurrer is sustained as to the 3rd and 4th causes of action, with leave to amend. The demurrer is overruled as to the 1st and 2nd causes of action. The motion to strike is granted in part and denied in part.

          Foremost is given 20 days’ leave to amend.

Neupane is ordered to provide notice of ruling.

Dated:                                                              _______________________________

                                                                              MARGARET L. OLDENDORF

                                                                       JUDGE OF THE SUPERIOR COURT