Judge: Mark A. Young, Case: 22SMCV00382, Date: 2023-04-19 Tentative Ruling
Case Number: 22SMCV00382 Hearing Date: April 19, 2023 Dept: M
CASE NAME: Adhoot, et
al., v. Hoffman, et al.
CASE NO.: 22SMCV00382
MOTION: Demurrer
to the Complaint
HEARING DATE: 4/19/2023
Legal
Standard
A
demurrer for sufficiency tests whether the complaint states a cause of action.
(Hahn v. Mirda (2007)
147 Cal.App.4th 740, 747.) When considering demurrers, courts read the
allegations liberally and in context. In a demurrer proceeding, the defects
must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co.
(2004) 116 Cal.App.4th 968, 994.) A demurrer tests the pleadings alone and not
the evidence or other extrinsic matters. Therefore, it lies only where the
defects appear on the face of the pleading or are judicially noticed. (CCP §§
430.30, 430.70.) At the pleading stage, a plaintiff need only allege ultimate
facts sufficient to apprise the defendant of the factual basis for the claim
against him. (Semole v. Sansoucie
(1972) 28 Cal. App. 3d 714, 721.) A “demurrer does not, however, admit
contentions, deductions or conclusions of fact or law alleged in the pleading,
or the construction of instruments pleaded, or facts impossible in law.” (S. Shore Land Co. v. Petersen
(1964) 226 Cal.App.2d 725, 732, internal citations omitted.)
A
special demurrer for uncertainty is disfavored and will only be sustained where
the pleading is so bad that defendant cannot reasonably respond—i.e., cannot
reasonably determine what issues must be admitted or denied, or what counts or
claims are directed against him/her. (CCP § 430.10(f); Khoury v. Maly’s
of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.) Moreover, even if
the pleading is somewhat vague, “ambiguities can be clarified under modern
discovery procedures.” (Ibid.)
Any party, within the time allowed
to respond to a pleading may serve and file a notice of motion to strike the
whole or any part thereof. (CCP § 435(b)(1); Cal. Rules of Court, Rule
3.1322(b).) The court may, upon a motion or at any time in its discretion and
upon terms it deems proper: (1) strike out any irrelevant, false, or improper
matter inserted in any pleading; or (2) strike out all or any part of any
pleading not drawn or filed in conformity with the laws of California, a court
rule, or an order of the court. (CCP §§ 436(a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [“Matter in a
pleading which is not essential to the claim is surplusage; probative facts are
surplusage and may be stricken out or disregarded”].)
“Liberality in permitting amendment
is the rule, if a fair opportunity to correct any defect has not been given.” (Angie
M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1227.) It is an abuse of
discretion for the court to deny leave to amend where there is any reasonable
possibility that plaintiff can state a good cause of action. (Goodman v.
Kennedy (1976) 18 Cal.3d 335, 349.) The burden is on plaintiff to
show in what manner plaintiff can amend the complaint,
and how that amendment will change the legal effect of the
pleading. (Id.)
REQUEST
FOR JUDICIAL NOTICE
Defendant Regan requests judicial
notice of the fact that he was licensed during the period of the construction
project. Although Regan cites Evidence Code § 452(d), which does not apply,
subsection (c) may apply. This subsection allows for judicial notice of “Official
acts of the legislative, executive, and judicial departments of the United
States and of any state of the United States.” The cited document is a
certified copy of Regan’s contractor’s license history, given by the California
Licensed Contractors Board, showing his active contractor’s license during the
period specified in the first amended complaint (FAC). As an official act of
the State of California, the license is properly noticed.
Plaintiffs
argue that notice is improper, because facts “contained in documents from state
agencies are not subject to judicial notice.” (Citing Lent v. California
Coastal Com., (2021) 62 Cal.App.5th 812, 854 [holding that facts contained
in documents from state agencies are not subject to judicial notice].) Indeed,
in Lent, the Court of Appeal recognized that although court may take
judicial notice of official acts of state agencies, the truth of matters
asserted in such documents is not subject to judicial notice. The purpose
of the notice in Lent was to establish certain disputed facts within the
presented memoranda. The memoranda were authored by members of the Commission
and the State Coastal Conservancy, which owned the easement at issue. The
requesting party improperly sought to use the memoranda to prove the truth of facts
stated within the documents, including that the Conservancy made various
expenditures from a violation remediation account to the Commission, and that
the budget described in the memoranda was the approved budget. (Id., at
854-855.) This substantially differs from the notice requested here, which does
not request that the Court notice hearsay facts contained within the license. Furthermore,
Plaintiffs do not explain why this document or the license itself would be
subject to any reasonable dispute. Thus, the Court may, and does, properly
notice this document.
Analysis
Defendants Omer Hoffman, Andrew Regan, and Jeannette Hoffman individually
demur to each cause of action alleged against them in the FAC.
First Cause of
Action for Breach of Contract
Defendants demur to the Breach of Contract cause of action on the
grounds that the FAC does not allege facts supporting the breach of contract
cause of action, and do not attach the alleged written contract to the
Complaint. “The standard elements of a
claim for breach of contract are: ‘(1) the contract, (2) plaintiff’s
performance or excuse for nonperformance, (3) defendant’s breach, and (4)
damage to plaintiff therefrom.’” (Wall Street Network, Ltd. v. New York
Times Co. (2008) 164 Cal.App.4th 1171, 1178.) “A written contract may be
pleaded by its terms—set out verbatim in the complaint or a copy of the
contract attached to the complaint and incorporated therein by reference—or by
its legal effect.” (McKell v. Washington Mutual, Inc. (2006) 142
Cal.App.4th 1457, 1489.) “In order to plead a contract by its legal effect,
plaintiff must allege the substance of its relevant terms.” (Id.) Pleading
a contract to its legal effect is more difficult, since it requires careful
analysis of the instrument, comprehensiveness in statement, avoidance of legal
conclusions, and involves the danger of variance where the instrument proved
differs from that alleged. (Construction Protective Services, Inc. v. TIG
Specialty Ins. Co. (2002) 29 Cal.4th 189, 199.)
The FAC does not attach the written
contract. Thus, Plaintiffs must provide the legal effect of the material,
relevant terms of the agreement. However, the FAC does not provide the material
terms of the contract by pleading the substance of the relevant terms. The FAC
alleges that the parties entered into a contract, “part written and part oral”
to perform unspecified construction work for the remodeling and renovation of
the Subject Property. (FAC ¶ 13.) Defendants “represented” that the remodeling
and renovation of the Subject Property would take between twelve to eighteen
months. (Id.) Moreover, pursuant to the express and implied terms, Defendants
promised to perform and complete the renovation and remodeling of the Subject
Property “in a good and workmanlike manner and in compliance with the
professional drawings and specification and all building codes, industry
standards and customs, and applicable laws and regulations.” (Id.) Defendants breached
the agreement by not performing and completing the renovation and remodeling
properly, failing to obtain applicable permits, failing to complete the remodel
and renovation of The Property within 12-18 months and abandoning the
remodeling project. (FAC ¶¶ 14, 16.) While the FAC claims that Defendants
breached the general terms of the contract, the FAC does not state the terms
with the requisite specificity. For example, there are no terms pled as to the
work that was supposed to be done. Moreover, the FAC does not delineate which
terms were expressed through writing or through an oral agreement, and which terms
were implied. These deficiencies apply to all Defendants. Since these
deficiencies apply to the entity defendants (O-Project/Triple 5) as well, Defendants’
alleged alter ego relationship with such entities would not support Defendants’
individual liability.
Accordingly, Defendants’ demurrer
is SUSTAINED with leave to amend.
Second Cause of Action for Breach of Implied Warranty
Defendants demur to the breach of
implied warranty claim. Defendants argue that the FAC does not provide any
specifications on what materials were supposed to be furnished, when those
materials were allegedly to be furnished, which materials were not furnished, or
what work Defendants failed to do.
Construction contracts for labor
and material ordinarily give rise to an implied warranty that the product will
be fit for its intended use both as to workmanship and materials. (Aced v.
Hobbs-Sesack Plumbing Co. (1961) 55 Cal.2d 573, 582; see Pollard v. Saxe
& Yolles Development (1974) 12 Cal.3d 374 [holding that a requirement “similar
to” Com. Code, § 2607, subd. (3) should apply in construction contracts, where
a plaintiff must give reasonable notice regarding defects, giving defendant a
reasonable opportunity to repair said defect].)
The Court concurs that the
averments are conclusory in nature. The FAC alleges that the subject
construction contract contained implied warranties, pursuant to which
Defendants “warranted all materials used in the renovation and remodeling of
the Subject Property were of the type and quality suitable for such work and
promised to perform and complete the renovation and remodeling work at the
Subject Property in a good and workmanlike manner and in compliance with the
plans and specifications, all building codes, industry standards and customs,
and applicable laws and regulations.” (FAC ¶20.) Defendants breached this
implied warranty by “failing to furnish materials for the renovation and
remodeling of the Subject Property of the type and quality suitable for such
work and failing to perform and complete the renovation and remodeling work at
the Subject Property in a good and workmanlike manner and in compliance with
the plans and specifications, all building codes, industry standards and
customs, and applicable laws and regulations.” (FAC ¶ 21.) The FAC fails to
provide the underlying facts showing that Defendants breached the warranty,
i.e., how Defendants failed to perform and complete the renovation and
remodeling work at the Subject Property in a good and workmanlike manner and in
compliance with the plans and specifications, etc. Instead, the FAC simply
offers the conclusion that they failed to do so.
The FAC does allege that Plaintiffs
“notified” defendants of the breaches of the implied warranties, and requested
that they correct the defective work, but Defendants refused to correct the
defective work. (FAC ¶ 22.) The FAC does
not specify that such notice was “reasonable notice” such that defendants were
granted a reasonable opportunity to repair the defect. Thus, further facts
should be stated as to this element.
Accordingly, Defendants’ demurrer
is SUSTAINED with leave to amend.
Third Cause of Action – Negligence
Defendants
demur to the negligence on the grounds that it fails to state sufficient facts
to support their breach of duty. To
plead a cause of action for negligence, one must allege (1) a legal duty owed
to plaintiffs to use due care; (2) breach of duty; (3) causation; and (4)
damage to plaintiff. (County of Santa Clara v. Atlantic Richfield Co. (2006)
137 Cal. App. 4th 292, 318.) “In order to state a cause of action for
negligence, the complaint must allege facts sufficient to show a legal duty on
the part of the defendant to use due care, a breach of such legal duty, and the
breach as the proximate or legal cause of the resulting injury.” (Bellah v.
Greenson (1978) 81 Cal.App.3d 614, 619.)
“Ordinarily, negligence may be
alleged in general terms, without specific facts showing how the injury
occurred, but there are ‘limits to the generality with which a plaintiff is
permitted to state his cause of action, and . . . the plaintiff must indicate
the acts or omissions which are said to have been negligently performed. He may not recover upon the bare statement
that the defendant’s negligence has caused him injury.’ [Citation].” (Berkley v. Dowds (2007) 152
Cal.App.4th 518, 527.)
Even considering the liberal
pleading standard of negligence, Plaintiffs only proffer bare conclusions
regarding Defendants’ purported negligence. The FAC alleges that Defendants
“are contractors, subcontractors, and/or material suppliers and performed work,
provided services, supplied materials and goods or otherwise agreed to perform
renovation and remodeling work at the Subject Property.” (FAC ¶ 26.) Further,
Defendants were under a “duty to furnish materials and to perform and complete
the renovation and remodeling work in a workmanlike manner and in compliance
with the plans and specifications, all building codes, industry standards and
customs, and applicable laws and regulations, and not to cause damage to the
Subject Property or otherwise cause injury and/or damage the Ahddoots’ personal
property or other components of the Subject Property.” (Id.) Defendants
“breached their duty by negligently, carelessly, and recklessly furnishing
materials and performing their renovation and remodeling work and operations at
the Subject Property.” (FAC ¶ 27.) As a result, Plaintiffs suffered damage to
other components of the subject Property, and their other personal property. (FAC
¶ 28.) These allegations only effectively state that Defendants’ negligence
caused Plaintiffs damages to their property. This threadbare statement is
insufficient. Plaintiffs must at least plead the acts or omissions which were
negligently performed.
Accordingly, Defendants’ demurrer
is SUSTAINED with leave to amend.
Fourth Cause of Action – Negligence Per Se
Defendants demur to this cause of
action because it is not a true cause of action, but an evidentiary rule. It is true
negligence per se is not a separate tort cause of action. Rather, it is an
evidentiary doctrine whereby negligence may be presumed if the evidentiary
requirements are met. (Quiroz v. Seventh Ave. Center (2006) 140
Cal.App.4th 1256, 1285 [“the doctrine of negligence per se does not establish
tort liability. Rather, it merely codifies the rule that a presumption of
negligence arises from the violation of a statute which was enacted to protect
a class of persons of which the plaintiff is a member against the type of harm
that the plaintiff suffered as a result of the violation”].) “Accordingly, to
apply negligence per se is not to state an independent cause of action.
The doctrine does not provide a private right of action for violation of a
statute. [Citation.] Instead, it operates to establish a presumption
of negligence for which the statute serves the subsidiary function of providing
evidence of an element of a preexisting common law cause of action.” (Ibid.)
To the extent that the Court would
entertain such a cause of action, Plaintiffs fail to allege the required facts.
First, an underlying claim of negligence must be viable before the presumption
of negligence can be employed. It is the tort of negligence, and not the
violation of the statute itself, which entitles a plaintiff to recover civil
damages. Naturally,
Plaintiff cannot obtain damages for both negligence and negligence per se
arising out of the same accident. As discussed above, the
allegations concerning Defendants’ negligence is conclusory. As such, any
negligence per se based on the same would inherently fail.
Ignoring this preliminary and fatal
issue, there are four basic facts which must be shown for the presumption to
apply: (1) the violation; (2) the violation as a proximate cause of the injury;
(3) an injury resulting from an occurrence of the nature which the statute was
designed to prevent; and (4) the injured party being a member of the class of
persons for whose protection the statute was adopted. [Citation.] (Salinero
v. Pon (1981) 124 Cal.App.3d 120, 134.) Here, the FAC does not clearly
state the violation of a statute designed for the protection of Plaintiffs, that
caused Plaintiffs’ injuries. The FAC generally cites unspecified building
codes, statutes, etc., but does not actually identify any specific rule. At a
minimum, Plaintiffs need to identify the violation at issue.
Accordingly, Defendants’ demurrer
is SUSTAINED without leave to amend. Plaintiff may include allegations of
negligence per se as a part of the underlying negligence cause of action.
Fifth and Sixth Causes of Action for Disgorgement
Defendants demur to the
disgorgement causes of action because there is no reference to Defendants
allegedly being unlicensed and that there “is a good probability” that the
Plaintiffs’ claims for disgorgement are barred by the statute of limitations. Business and Professions Code section
7031(b) provides “a person who utilizes the services of an unlicensed
contractor may bring an action in any court of competent jurisdiction in this
state to recover all compensation paid to the unlicensed contractor for performance
of any act or contract.”
The FAC alleges that Defendants “did
not hold a valid contractor’s license within the classification appliable to
the work and/or services performed at the Subject Property.” (FAC ¶ 36.) Generally,
the Court would consider this an averment of ultimate fact. Defendants do
not provide any authority or argument which would show they were not required
to be licensed for the construction work at issue. Thus, the Court is not
inclined to sustain a demurrer on such a basis.
In addition, there are no facts suggesting
that the cause of action is barred by the one-year statute of limitations. Unless
a complaint affirmatively discloses on its face that the statute of limitations
has run, demurrer must be overruled. (See Lockley v. Law Office of Cantrell,
Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 881 [“It must
appear clearly and affirmatively that, upon the face of the complaint, the
right of action is necessarily barred”]; see also Moseley v. Abrams
(1985) 170 Cal.App.3d 355, 359 [“A demurrer on the ground of the bar of the
statute of limitations will not lie where the action may be, but is not
necessarily barred”].) In Eisenberg
Village of the Los Angeles Jewish Home for the Aging v. Suffolk Construction
Company, Inc. (2020) 53 Cal. App. 5th 1201, 1215, the Second
District held that a disgorgement claim is complete, and thus accrues, when an
unlicensed contractor completes or ceases performance of the act or contract at
issue, regardless of the delayed-discovery rule. As Defendants
concede, whether the statute of limitations has run does not affirmatively show
on the face of the FAC. While the FAC does allege that Defendants failed to
complete the remodeling within 18 months, the FAC does not allege when
Defendants ceased working on the contract at issue.
Defendant Regan argues that he, as
an individual, was licensed. Indeed, based on the requested judicial notice,
Regan was licensed during the relevant time frame. The state records show that he was
licensed as a B General Building Contractor from 1/2019-9/2022. Given this
noticeable fact, the FAC’s conclusory allegation to the contrary must be
ignored. Plaintiffs have the burden to show how this cause of action might
survive against Regan, given that he was licensed over the preceding three
years.
Accordingly, Regan’s demurrer is
SUSTAINED. Leave to amend will only be granted if Plaintiffs show a reasonable
probability of amendment. Otherwise, Defendants’ demurrer is OVERRULED as to
these causes of action.
Seventh Cause of Action for Recission under Civil Code §
1689.5
Defendants demur to the recission cause of action on the grounds that the
FAC fails to meet the elements of a contract, and that the cited statutes do
not provide such a remedy.
First, the Court is not convinced that failing to plead a valid breach
of contract cause of action would invalidate the recission cause of action.
There is no requirement in the cited sections that the contract be breached, or
that the contract be stated on certain terms.
The
statutory scheme provides the following definitions. A “contractor” is any
person who undertakes to construct, alter, repair, improve, or demolish any
building or other structure, project or development. (§7026.) “Home improvement” means the
repairing, remodeling, and altering of a residential property. (§7151.) A “home
improvement contract” means an agreement, whether oral or written, between a
contractor and an owner for the performance of a home improvement and includes
all labor, services, and materials to be furnished and performed thereunder.
(§7151.2.) Section 7159 provides for items that shall be included in
such contracts, including:
(c) In addition
to the specific requirements listed under this section, every home improvement
contract and any person subject to licensure under this chapter or their agent
or salesperson shall comply with all of the following:
[¶¶]
(3) (A) Before
any work is started, the contractor shall give the buyer a copy of the contract
signed and dated by both the contractor and the buyer. The buyer’s receipt of
the copy of the contract initiates the buyer’s rights to cancel the contract
pursuant to Sections 1689.5 to 1689.14, inclusive, of the Civil Code.
Despite failing to state a cause of
action for breach of contract, the FAC provides sufficient facts showing that
the contract at-issue is a home improvement contract within the meaning of the
statute. The contract was allegedly for the renovation and remodeling of the
Subject Property, a single-family residence. (FAC ¶¶ 12-13.) Business and Professions
Code section 7159 thus required Defendants to give Plaintiffs a copy of a “Home
Improvement Contract” dated and signed by the parties before furnishing
material or labor for the renovation and remodeling work at the Subject
Property. (FAC ¶ 43.) Defendants allegedly never provided Plaintiffs with the Home
Improvement Contract, notifying them in writing of their Three-Day Right to
Cancel, and a Notice of Cancelation. (FAC ¶ 44.)
However, the FAC does not state
facts supporting a buyer’s rights to cancel pursuant to Sections 1689.5 to
1689.14. Those sections concern “home solicitation
contracts”, which are any contracts for the sale, lease, or rental of goods or
services made at other than appropriate trade premises. (Civ. Code
§1689.5(a).) The term “services” means work, labor and services furnished,
among other things, in connection with the repair, restoration, and alteration
of residential premises. (Civ. Code §1689.5(d).) A buyer has the right to
cancel a home solicitation contract until midnight of the third business day
after the day on which the buyer signs an agreement. (Civ. Code §1689.6.)
“It was undoubtedly the Legislature's purpose in enacting [Civil Code section
1689.5 et seq.] to protect consumers against the types of pressures that
typically can arise when a salesman appears at a buyer's home.” (Weatherall
Aluminum Products Co. v. Scott,¿(1977) 71 Cal.App.3d 245, 248.) Weatherall warns “Caveat Vendor”—if the contract is a
home solicitation contract and does not provide the notification required by
section 1689.7(a)-(c), then the homeowners “retain a right to cancel.” (Id.)
Logically, if no notice was given,
then Plaintiffs would retain the right to cancel under section 1689.5 et. seq.
(FAC¶43.) However, the FAC does not state facts that this was a home solicitation contract. There are no allegations concerning
whether the contract was made outside of an appropriate trade premises, such as
at the premises. (FAC ¶ 13.) Therefore, the FAC fails to state sufficient facts
to support the rescission claimed.
Accordingly,
Defendants’ demurrers are SUSTAINED with leave to amend.
Eighth and Ninth
Cause of Action for Unfair Competition (Bus. & Prof. Code § 17200)
Defendants demur to the unfair competition claims. Business and
Professions Code section 17200 prohibits “any unlawful, unfair or fraudulent business
act or practice.” (Bus. & Prof. Code § 17200.) “An unlawful business practice or act is an act or
practice, committed pursuant to business activity, that is at the same time
forbidden by law.” (Klein v. Earth Elements, Inc. (1997) 59 Cal.App.4th
965, 969.) A
violation of other laws is deemed independently actionable under the UCL. (Law
Offices of Mathew Higbee v. Expungement Assistance Services (2013)
214 Cal.App.4th 544, 554.) “‘Virtually any law—federal, state or local—can
serve as a predicate for a section 17200 action.’” (Id.) If a business practice is alleged to be
“unlawful, then the complaint “must state facts supporting the statutory
elements of the alleged violation.” (G.H.I.I. v. MTS (1983) 147
Cal.App.3d 256; Khoury v. Maly’s of Calif. (1993) 14 Cal.App.4th
612, 619.)
These claims allege that Defendants
have engaged and continue to engage in unlawful or unfair business acts and
practices in violation of Business & Professions Code, Section 17200. These
unlaw and unfair business acts and practices include, but are not limited to:
a. failing to provide customers with a Home Improvement Contract containing the
provisions contained in Section 7159 of the Business & Professions Code
prior to furnishing work and/or materials; b. failing to notify customers in
writing of their Three-Day Right to Cancel and providing a Notice of
Cancelation pursuant to California Civil Code, Section 1689.5 et. seq. and
Business & Professions Code, Section 7159; c. failing to hold a valid a
contractor’s license within the classification applicable to the work or
services performed as required by Division 3 of the Business & Professions
Code; e. hiring contractors, subcontractors and other persons that did not hold
a valid contractor’s license within the classification applicable to the work
or services performed as required by Division 3 of the Business &
Professions Code. (FAC ¶¶ 48, 53.)
As discussed, the FAC does not establish that Defendants unlawfully
failed to provide Plaintiffs with the Home Improvement Contracts as required
by section 1689.5, et seq. Plaintiff
also provides no specific facts regarding subcontractors’ licenses. That said,
the FAC does provide facts that the Hoffmans did not hold licenses as required.
In addition, the Hoffmans have not shown that they were not required to hold
valid contractor’s licenses. As such, the Hoffmans have not shown that the UCL
claim fails regarding their failure to hold a valid contractor’s license. However, since Regan was licensed, the UCL
claim is not well-stated against him. Further facts are required as to the
non-licensing issues.
Defendants also argue that the UCL claim seeks damages. Under section
17200 et. seq., plaintiff may seek disgorgement, restitution, or both. (Heller
v. Norcal Mut. Ins. Co. (1994) 83 Cal.4th 30, 45.) here, the eighth
cause of action, for injunctive relief requests injunctive relief. The ninth
cause of action does request damages according to proof, but also requests
disgorgement, and thus does not fail to state a claim. The fact that the UCL
claim requests damages would not support a demurrer. Instead, the improper
remedy should have been targeted with a motion to strike.
Accordingly, the Hoffmans’
demurrers are OVERRULED. Regan’s demurrer is SUSTAINED with leave to amend.
Tenth Cause of
Action for Fraud (against Omer Hoffman)
Omer Hoffman demurs to the fraud cause of action. The elements of fraud are: “(a)
misrepresentation (false representation, concealment, or nondisclosure); (b)
knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce
reliance; (d) justifiable reliance; and (e) resulting damage.” (Charnay v.
Cobert (2006) 145 Cal.App.4th 170, 184.) In California, fraud, including
negligent misrepresentation, must be pled with specificity. (Small v. Fritz
Companies, Inc. (2003) 30 Cal.4th 167, 184.) “The particularity demands
that a plaintiff plead facts which show how, when, where, to whom, and by what
means the representations were tendered.” (Cansino v. Bank of America
(2014) 224 Cal.App.4th 1462, 1469.)
The FAC fails to allege the misrepresentations with the required
specificity. The FAC alleges that Omer “on multiple occasions prior to
and after entering into the Contract represented to the AHDOOTS that he had
held a valid Class B general contractor’s license. For example, in or about
December 2020, OMER represented to the AHDOOTS that he had held a valid Class B
general contractor’s license. Another example is where on June 18, 2021, OMER
represented to the AHDOOTS that he had held a valid Class B general
contractor’s license. The AHDOOTS reasonably relied on OMER’S representations
of holding a valid Class B general contractor’s license and entered into the
Contract with DEFENDANTS and made and continue to make payments to OMER and the
businesses he controlled and/or operated, including the O PROJECT and TRIPLE 5.”
(FAC ¶ 56.) Further, Plaintiffs “reasonably relied on OMER’S representations of
that the O PROJECT was a licensed Class B general contractor and entered into
the Contract with DEFENDANTS and made and continue to make payments to OMER and
businesses he controlled and operated, the O PROJECT and TRIPLE 5. (FAC ¶ 57.)
However, Omer’s representations were false. (¶ 58.) Omer knew his
representations were false because he has never held a Class B general
contractor’s license. (Id.) Plaintiffs detrimentally relied on OMER’S
misrepresentations. (¶ 59.) These allegations do not provide specificity as to how,
when, where, and by what means Omer represented his licensure. As such, further
facts are required.
Accordingly, Omer’s demurrer is
SUSTAINED with leave to amend.
Eleventh Cause of Action for Penal Code § 496
Defendants demur to this cause on
the grounds that no specific facts alleged regarding how Defendants obtained
any funds from Plaintiffs by any misrepresentations or false pretenses. Penal Code section 496 “defines the criminal
offense of what is commonly referred to as receiving stolen property.” (Siry
Inv., L.P. v. Farkhondehpour (2022) 13 Cal.5th 333, 346-47.) “Every person
who buys or receives any property that has been stolen or that has been
obtained in any manner constituting theft or extortion, knowing the property to
be so stolen or obtained, or who conceals, sells, withholds, or aids in
concealing, selling, or withholding any property from the owner, knowing the
property to be so stolen or obtained,” is subject to incarceration. (Pen. Code,
§ 496(a).) Subdivision (c) of Section 496, in turn, “articulates a right to
special civil remedies when a violation of section 496(a) has occurred.” (Siry,
supra, 13 Cal.5th 346-47.) Subdivision (c) states that a person injured by
a violation of section 496 “may bring an action for three times the amount of
actual damages, if any, sustained by the plaintiff, costs of suit, and
reasonable attorney’s fees.” (Pen. Code, § 496(c).) Theft is the “knowingly and
designedly, by any false or fraudulent representation or pretense, defraud[ing]
any other person of money, labor or real or personal property.” (Pen. Code,
§484.)
Here, the FAC alleges that
Defendants “obtained, and/or are concealing, withholding, aiding in the
concealing and/or withholding of property obtained from the AHDOOTS in a manner
constituting theft based on OMER’s false and fraudulent representations.” (FAC ¶
62.)
As this cause sounds in fraud, and is a statutory claim,
additional specificity is required. As discussed, additional facts are required
to establish Omer’s misrepresentations.
Accordingly, Defendants’ demurrers are SUSTAINED with leave to amend.
Conclusion
Defendants’ demurrers are SUSTAINED
with leave to amend as to the first, second, third, fourth, seventh, and
eleventh causes of action.
Defendant Omer’s demurrer to the
tenth cause of action is SUSTAINED with leave to amend.
Defendant Regan’s demurrer to the fifth
and sixth causes of action is SUSTAINED without leave to amend.
Defendant Regan’s demurrer to the eighth
and ninth causes are SUSTAINED with leave to amend.
Defendant Hoffman’s demurrers to the
fifth, sixth, eighth and ninth causes of action are OVERRULED.
Plaintiffs have
10 days to file an amended complaint.