Judge: Mark E. Windham, Case: 22STLC05572, Date: 2023-10-19 Tentative Ruling
Case Number: 22STLC05572 Hearing Date: October 19, 2023 Dept: 26
Pafundi Law Firm v. Vera Roca, LLC, et al.
DEMURRER;
MOTION TO STRIKE
TENTATIVE RULING:
Cross-Defendant Pafundi
Law Firm’s Demurrer to the fraud cause of action in the Second Amended Cross-Complaint
is SUSTAINED WITHOUT LEAVE TO AMEND.
Cross-Defendant Pafundi
Law Firm’s Motion to Strike Portions of the Second Amended Cross-Complaint is
PLACED OFF CALENDAR AS MOOT.
ANALYSIS:
Plaintiff Pafundi
Law Firm (“Cross-Defendant”) filed the instant action for breach of contract,
fraud, promissory estoppel, and conversion against Defendants Vera Roca, LLC (“Cross-Complainant
Vera Roca”) and Pablo Vera (“Cross-Complainant Vera”) on August 23, 2022.
Cross-Complainants filed a Cross-Complaint for breach of contract and fraud
against Cross-Defendant on January 20, 2023. On February 3, 2023,
Cross-Complainants filed a First Amended Cross-Complaint.
On July 13,
2023, the Court sustained Cross-Defendant’s demurrer to the fraud cause of
action in the First Amended Cross-Complaint with leave to amend. (Minute Order,
07/13/23.) Cross-Complainants filed the Second Amended Cross-Complaint on August
22, 2023.
Cross-Defendant
filed the instant Demurrer to, and Motion to Strike Portions of, the Second
Amended Cross-Complaint on September 19, 2023. Cross-Complainants filed and
served a joint opposition on October 2, 2023 and Cross-Defendant replied on
October 10, 2023.
Discussion
Allegations in the Complaint and Second Amended Cross-Complaint
This action arises out of an oral agreement between the parties for Cross-Complainants
to completely rebuild Cross-Defendant’s website and launch the rebuilt
website after Cross-Defendant’s approval, in exchange for $5,000.00, reached on
March 2, 2022. (Compl., ¶5.) On March 23, 2022 and March 29, 2022, the parties
reached a further agreement that Cross-Complainants would create a landing page
website while the full website was being rebuilt, in exchange for $1,250.00. (Id.
at ¶6.) Cross-Complainants allege that on or about July 5, 2022, the website
was about 85 percent completed but Cross-Defendant materially breached the
agreement by refusing to provide the content necessary to complete and launch
the website. (SACC, ¶9.) Cross-Defendant also allegedly failed to pay the
$1,250.00 owed for completing the landing page website. (Ibid.)
Cross-Defendant is allegedly estopped from claiming Cross-Complainants’ failure
to complete the website as a defense. (Ibid.)
On or about March 29, 2022,
Cross-Complainant Vera and Robert Pafundi met in person and Robert Pafundi
promised to pay $1,250.00 for the completed landing page, which he had approved
by text message earlier that day. (Id. at ¶10.) Robert Pafundi’s
representations on March 29, 2022 were intentional and false and he had no
intention of paying for the landing page. (Id. at ¶¶12-13.) In reliance
on the representations, Cross-Complainants entered into the agreement and
expended time, resources, and funding to complete their obligations. (Id.
at ¶14.) Robert Pafundi also knowingly and intentionally interfered with
Cross-Complainants’ ability to complete its obligations under the agreement. (Id.
at ¶15.) As a result of the misrepresentations, Cross-Complainants suffered
damages. (Id. at ¶16.)
Demurrer to Second Amended Cross-Complaint
Cross-Defendant demurs to the second cause of action for fraud on grounds
of failure to allege facts sufficient to state a cause of action.
(Citing Code Civ. Proc., § 430.10, subd. (e).) The Demurrer is accompanied by a meet and confer declaration that
complies with Code of Civil Procedure section 430.41. (Demurrer, Pafundi Decl.,
¶¶3-6 and Exh. B.)
The elements of
fraud are (1) misrepresentation; (2) knowledge of falsity (or “scienter”); (3) intent
to defraud (induce reliance); (4) justifiable reliance; and (5) resulting
damage. (Conroy v. Regents of Univ. of Cal. (2009) 45 Cal.4th 1244, 1255.)
It is also black letter law that fraud must be alleged with specificity,
meaning that the pleadings must allege facts as to “‘how, when, where,
to whom, and by what means the representations were tendered.” (Stansfield
v. Starkey (1990) 220 Cal. App. 3d 59, 73.) Cross-Defendant first demurs on
the grounds that the fraud cause of action is not alleged with the requisite
particularity. However, the Second Amended Cross-Complaint sufficiently details
Cross-Defendant’s alleged misrepresentation by stating that Cross-Complainant
Vera and Robert Pafundi met in person, on March 29, 2022, regarding the landing
page agreement. (SACC, ¶10.) Robert Pafundi allegedly was a member of
Cross-Defendant and acted as its agent. (Id. at ¶2.)
Cross-Defendant also argues that the Second Amended
Cross-Complaint does not sufficiently allege the element of causation because
there are no facts alleging reliance on the alleged misrepresentation or that
Cross-Complainants took a course of action to their detriment. The Second
Amended Cross-Complaint, however, does allege that Cross-Complainants
reasonably relied on Robert Pafundi’s misrepresentation by entering into the landing
page agreement with Cross-Defendant. (Id. at ¶14.) As a result,
Cross-Complainants were allegedly damaged in the expenditure of their time,
resources, and funds. (Ibid.) The element of causation is sufficiently
alleged.
Finally, Cross-Defendant argues that Cross-Complainants are
improperly attempting to allege the first cause of action for breach of
contract claim as a tort. (See Applied Equip. Corp. v. Litton Saudi Arabia
Ltd. (1994) 7 Cal.4th 503, 517-18 [“[c]onduct amounting to a breach of
contract becomes tortious only when it also violates an independent duty
arising from principles of tort law”].) The same facts support
Cross-Complainants’s causes of action for breach of contract and fraud, save
for the allegation that Robert Pafundi had no intention of paying for the
landing page at the time the parties made the agreement. (SACC, ¶13.) This does
not allege that Cross-Defendant breached an independent duty under tort law.
Nor does Cross-Complainants’ opposition make any argument regarding how the
breach of an independent tort duty is, or could be alleged, to support the
fraud cause of action. Accordingly, the Demurrer to the second cause of action
for fraud is sustained.
Motion to Strike Portions of Cross-Complaint
Cross-Defendant moves to strike the allegations in support
of, and the request for, damages based on its allegedly fraudulent conduct. The
Court having sustained Cross-Defendant’s Demurrer to the fraud cause of action,
the Motion to Strike is deemed moot.
Leave to Amend
Leave to amend must be allowed
where there is a reasonable possibility of successful amendment, however, the burden
is on the complainant to show the Court that a pleading can be amended
successfully. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.)
Cross-Complainants were previously given a chance to amend and it remains that
the fraud causes of action is insufficiently pled. Nor do Cross-Complainants
request leave to amend in the opposition. Therefore, leave to amend is denied.
Conclusion
Cross-Defendant Pafundi
Law Firm’s Demurrer to the fraud cause of action in the Second Amended Cross-Complaint
is SUSTAINED WITHOUT LEAVE TO AMEND.
Cross-Defendant Pafundi Law
Firm’s Motion to Strike Portions of the Second Amended Cross-Complaint is
PLACED OFF CALENDAR AS MOOT.
Moving party to give notice.