Judge: Margaret L. Oldendorf, Case: 23AHCV01260, Date: 2024-04-03 Tentative Ruling
Case Number: 23AHCV01260 Hearing Date: April 3, 2024 Dept: P
I. INTRODUCTION
In this breach of contract action, Plaintiff Golden Bull
LLC dba My Noble Gold Investments (Plaintiff) alleges that Defendant Lawrence
Torres individually and dba And We Know (Torres) signed an agreement for Torres
to exclusively promote Plaintiff. Torres is an influencer with a YouTube
audience and other social media accounts. Plaintiff alleges that Torres then
breached that agreement by promoting Plaintiff’s competitor. The first amended
complaint contains five causes of action: (1) Breach of Contract, (2) Restitution,
(3) Promissory Estoppel, (4) Breach of the Implied Covenant, and (5) Fraud-Deceit.
Before the Court are Defendant Torres’ challenges to the First
Amended Complaint. Defendant demurs to the second through fifth causes of
action on the grounds that these causes of action fail to state sufficient
facts. This demurrer was filed December 20, 2023. Plaintiff filed an opposition
on March 20, 2024. Defendant filed his reply on March 25, 2024. For the
following reasons, the demurrer is sustained.
II. 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.) A demurrer is treated as “admitting all
material facts properly pleaded,” but not the truth of “contentions, deductions
or conclusions of law.” (Aubry v. Tri-City Hospital Dist. (1992) 2
Cal.4th 962, 966-967.) The general rule on demurrer is that the pleadings are
“deemed to be true, however improbable they may be.” (Del E. Webb Corp. v.
Structural Materials Co. (1981) 123 Cal.App.4th 593, 604.) Questions
of plaintiff’s ability to prove unlikely allegations are of no concern. (Committee
on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197,
213-214.)
Allegations
need not be accepted as true if they are contradicted by judicially noticeable
facts. (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1474.)
“We
treat the demurrer as admitting all the properly pleaded material facts and
consider matters which may be judicially noticed, but we do not treat as
admitted contentions, deductions, or conclusions of fact or law. (Align
Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 958.) Further, ‘ “ ‘we
give the complaint a reasonable interpretation, reading it as a whole and its
parts in their context.’ ”’ (Ibid.) Because a demurrer tests only the
legal sufficiency of the pleading, we accept as true even the most improbable
alleged facts, and we do not concern ourselves with the plaintiff's ability to
prove its factual allegations. (Ibid.) ‘“Facts appearing in exhibits
attached to the first amended complaint also are accepted as true and are given
precedence, to the extent they contradict the allegations.”’ (Paul v. Patton
(2015) 235 Cal.App.4th 1088, 1091.) Although a demurrer does not ordinarily
reach affirmative defenses, it ‘“will lie where the complaint ‘has included
allegations that clearly disclose some defense or bar to recovery.’ ”’ (Casterson
v. Superior Court (2002) 101 Cal.App.4th 177, 183, Nolte v. Cedars-Sinai
Medical Center (2015) 236 Cal.App.4th 1401, 1406. )
B. Meet and Confer Requirement Met
The Declaration of Thomas M. Geher is offered in support
of counsel’s compliance with Code Civ. Proc. Section 430.41. Geher declares
that he met and conferred with Plaintiff’s Counsel on the phone on December 12,
2023. (Geher Decl. ¶¶ 4-5.) He further declares that parties did not reach a
resolution. (Id.) Consequently, the meet and confer requirement has been
met.
C.
Second Cause of Action for Restitution
Paragraph 20 of the FAC alleges that Plaintiff and
Defendant signed an Exclusive Endorsement Agreement in which Plaintiff paid
Defendant to exclusively promote Plaintiff and its products. ¶ 21 alleges that
Plaintiff paid $150,000 for Defendant’s endorsement services and ¶ 22 alleges
that Defendant did not keep up his end of the bargain. (Complaint ¶¶ 20-22.) The
Court finds that this cause of action is duplicative of the first cause of
action for breach of contract because it seeks to recover on the same agreement
for the same damages. Defendant also argues that this cause of action is
defective because restitution is a remedy and not a cause of action. (See
Demurrer p. 12: 13-21.)
Plaintiff argues that “[t]he claim for restitution
properly presents a quasi-contract theory of recovery.” (Opposition p. 2:
10-11.) Plaintiff cites McBride v. Boughton (2004)123 Cal.App.4th 379,
388-389 and Federal Deposit Ins. Corp. v. Dintino (2008) 167 Cal.App.4th
333, 346 for the proposition that restitution is a remedy available on a
contract. McBride v. Boughton (2004) 123 Cal.App.4th 379, 388, internal
citations omitted, states “restitution may be awarded in lieu of breach of contract
damages when the parties had an express contract, but it was procured by fraud
or is unenforceable or ineffective for some reason.” However, Moran v. Prime
Healthcare Mgmt., Inc. (2016) 3 Cal.App.5th 1131, 1145-1146 holds that “in
the case of an express contract reasonable value [quantum meruit/quasi
contract] applies only when the agreement ‘does not determine the amount of
consideration, nor [provide] the method by which it is to be ascertained.’” (Moran
v. Prime Healthcare Mgmt., Inc. (2016) 3 Cal.App.5th 1131, 1145-1146,
internal citations omitted, cited on Reply.) Here, there is an express
agreement between the parties (Exh. 1 to the FAC) that provides consideration
for the agreement (Plaintiff to receive Defendant’s promotion, Defendant to
receive $150,000).
The Court holds that there is no basis for the second
cause of action. Therefore, the demurrer to the second cause of action for
restitution is sustained without leave to amend.
D. Third Cause of Action for Promissory Estoppel
A cause of action for promissory estoppel is a claim
in equity that substitutes reliance on a promise for consideration “in the
usual sense of something bargained for and given in exchange.” (Fleet v.
Bank of America (2014) 229 Cal.App.4th 1403, 1413) (citations omitted). If
actual consideration was given by the promisee, promissory estoppel does not
apply. Id. (citations omitted). Here, the First Amended Complaint alleges
that there was an Exclusive Endorsement Agreement between the parties (FAC ¶
25), Plaintiff paid $150,000 for Defendant's promotion services (¶ 26) and Defendant
broke the agreement. (¶ 24.) Therefore, there cannot be a cause of action for
promissory estoppel.
Plaintiff
argues that its promissory estoppel claim is pled in the alternative to its
first cause of action for breach of contract. However, “it is only where the
promisee's reliance was unbargained for that there is room for the application
of the doctrine.” (Hilltop Properties, Inc. v. State of California
(1965) 233 Cal.App.2d 349, 363, internal citations omitted, cited on Reply.)
Here, there is an agreement with bargained-for consideration on both sides.
(Exh. 1 to FAC: Exclusive Endorsement Agreement; Paul v. Patton (2015)
235 Cal.App.4th 1088, 1091.)
The demurrer to the third cause of action for promissory
estoppel is sustained without leave to amend.
E. Fourth Cause of Action for Breach of Implied
Covenant of Good Faith and Fair Dealing
In the fourth cause of action, Plaintiff alleges that
Plaintiff and Defendant signed an Exclusive Endorsement Agreement in which Plaintiff
paid Defendant to exclusively promote Plaintiff and its products. (FAC ¶ 29.) ¶ 30 alleges that Defendant did
not keep up his end of the bargain. This cause of action is duplicative of the
first cause of action for breach of contract because it seeks to recover on the
same agreement and for the same damages. The Court will not allow Plaintiff to
pursue two causes of action for the same relief on the same agreement. (See Careau
& Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d
1371, 1392; Bionghi v. Metropolitan Water District of Southern California
(1999) 70 Cal.App.4th 1358, 1370.)
Plaintiff urges that it is trying to recover for the
damages it sustained from Defendant removing the past endorsement of Plaintiff
from his website. However, this damage is addressed in the first cause of
action for breach of contract. The parties had an express written contract for
Defendant to promote Plaintiff for one year, Defendant stopped promoting
Plaintiff and Plaintiff was damaged. (See Reply p. 7: 2-8.) Therefore, the demurrer to the fourth cause
of action for breach of the implied covenant of good faith is sustained without
leave to amend.
F. Fifth Cause of Action for Fraud-Deceit
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; Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th
972, 989.) Fraud actions are subject to “strict requirements of particularity
in pleading. . . . Accordingly, the rule is everywhere followed that
fraud must be specifically pleaded. The effect of this rule is twofold: (a)
General pleading of the legal conclusion of ‘fraud’ is insufficient; the facts
constituting the fraud must be alleged. (b) Every element of the cause of
action for fraud must be alleged in the proper manner (i.e., factually and
specifically), and the policy of liberal construction of the pleadings ... will
not ordinarily be invoked to sustain a pleading defective in any material
respect.” (Committee on Children’s Television, Inc. v. General Foods Corp.
(1983) 35 Cal.3d 197, 216, superseded by statute on other grounds.) A
fraud cause of action must contain: “(1) a knowingly false representation by
the defendant; (2) an intent to deceive or induce reliance; (3) justifiable
reliance by the plaintiff; and (4) resulting damages.” (Service by
Medallion, Inc. v. Clorox Co. (1996) 44 Cal.App.4th 1807, 1816.) “This
particularity requirement necessitates pleading facts which show how, when,
where, to whom, and by what means the representations were tendered.” (Stansfield
v. Starkey (1990) 220 Cal.App.3d 59, 73, citations omitted.)
Here,
the first amended complaint alleges that Defendant agreed to exclusively
promote Defendant (¶ 34), Defendant intended to promote Plaintiff’s competitor
(¶ 34), Plaintiff reasonably relied on Defendant’s promise (¶ 35), and
Plaintiff was harmed (¶ 36.) Even assuming arguendo that the first amended
complaint sufficiently pleads a knowingly false representation (that Defendant
would promote Plaintiff exclusively on his platforms), missing is any
allegation as to how, when, where and to whom and by what means the
representation was made. (See Stansfield v. Starkey (1990) 220
Cal.App.3d 59, 73, citations omitted.) This fraud claim lacks the required
specificity. (See Demurrer p. 18: 26-28.)
Defendant urges that this cause of action is patently
incurable as the FAC pleads in ¶¶ 11 and 12 that he did perform as required for
six months. However, performance for six months does not foreclose the
possibility that Defendant did not intend to perform the remainder of the yearlong
endorsement. (See Opposition p. 5: 15-18.) This issue may be cured by
amendment. The demurrer to fifth cause of action fraud-deceit is sustained with
leave to amend.
III. CONCLUSION AND ORDER
Defendant Torres’ demurrer to the second,
third and fourth causes of action is sustained without leave to amend. The
demurrer to the fifth cause of action for fraud is sustained with leave to
amend. Plaintiff is ordered to file a second amended complaint within 20 days’
notice of this ruling.
Defendant
Lawrence Torres is ordered to give notice of this ruling.
JARED D. MOSES
JUDGE
OF THE SUPERIOR COURT