Judge: Mark E. Windham, Case: 23STLC00223, Date: 2024-09-30 Tentative Ruling

Case Number: 23STLC00223    Hearing Date: September 30, 2024    Dept: 26

PRC Restoration, Inc. v. Vivian, et al.

DEMURRER

(CCP § 430.10, et seq.)

TENTATIVE RULING:

Cross-Defendant PRC Restoration, Inc.’s Demurrer to the Cross-Complaint is SUSTAINED WITH 20 DAYS’ LEAVE TO AMEND.

ANALYSIS:

On January 12, 2023, Plaintiff PRC Restoration, Inc. (“Cross-Defendant”) filed the instant action against Defendant Ardine Vivian (“Cross-Complainant”). The Complaint alleges causes of action for breach of contract, common counts, and enforcement of mechanic’s lien. Cross-Complainant filed the Cross-Complaint on July 26, 2024, alleging causes of action for breach of contract, breach of the implied covenant for good faith and fair dealing, intentional misrepresentation, false promise, and unfair business practices.

Cross-Defendant filed the instant demurrer to the Cross-Complaint on August 26, 2024. Cross-Complainant filed an opposition on September 13, 2024 and Cross-Defendant replied on September 20, 2024.

Discussion

Allegations in the Complaint

The Complaint alleges the following facts: Cross-Complainant is the owner and occupier of the property located at 1720 E 2nd Street, #5, Long Beach, California. (Compl., ¶3.) On April 8, 2022, Cross-Complainant entered into a written contract with Cross-Defendant, pursuant to which Cross-Defendant “agreed to and did provide fire emergency services, including setting up negative air pressure, removing affected materials, HEPA vacuum affected areas, encapsulate areas, apply smoke and soot degreaser, relating to damage at the Property.” (Id. at ¶7.) Under the contract, Cross-Complaint was obligated to pay for services rendered and the cost of materials supplied. (Ibid.) The sum of $29,984.59 was initially owed for the services and supplies provided by Cross-Defendant. (Id. at ¶8.) Cross-Complainant made partial payments totaling $13,494.00 but the sum of $16,490.59 remains due and owing since approximately September 2, 2022. (Ibid.) Cross-Complainant has acknowledged that $16,490.59 remains due and owing but has not paid the balance owing. (Ibid.) Cross-Defendant has performed all obligations required under the contract, except those it has been prevented or excused from performing. (Id. at ¶9.)

Allegations in the Cross-Complaint

On April 8, 2022, Cross-Complainant entered into a written contract with Cross-Defendant, pursuant to which Cross-Defendant “agreed to and did provide fire emergency services, including setting up negative air pressure, removing affected materials, HEPA vacuum affected areas, encapsulate areas, apply smoke and soot degreaser, relating to damage at the Property.” (Cross-Compl., ¶3.) Cross-Defendant never provided an estimate for the work to be completed to Cross-Complainant, nor was an amount of payment for the services stated in the contract. (Id. at ¶5.) Cross-Defendant agreed to provide the services to Plaintiff for payment in the amount of $13,494.00. (Id. at ¶6.) After Cross-Defendant did the agreed upon work, it also knocked down walls and restructured them, painted the walls and did additional cleanup and hauling work without Cross-Complainant’s consent. (Id. at ¶7.) Cross-Complainant made the promised payment of $13,494.00, which has been acknowledged by Cross-Defendant. (Id. at ¶8.)

Demurrer to the Cross-Complaint

The Demurrer is accompanied by a meet and confer declaration as required by Code of Civil Procedure section 430.41. (Declaration of Demurring Party, filed 08/26/24.) Cross-Defendant demurs on the grounds that the Cross-Complaint fails to allege facts sufficient to state a cause of action and is uncertain. (Citing Code Civ. Proc., § 430.10, subds. (e), (f).) Special demurrers, however, are not permitted in the limited jurisdiction court. (Code Civ. Proc., § 92, subd. (c).) Therefore, the Court will not consider the demurrer for uncertainty.

Cross-Defendant demurs to the entire Cross-Complaint on the grounds that it is premised on the filing of this action and on the filing of a mechanic’s lien on the Property, both of which are protected by the litigation privilege set forth at Civil Code section 47. The demurrer, however, does not cite any specific allegation in the Cross-Complaint that refers to the the filing of this action or the mechanic’s lien as the basis of Cross-Complainant’s damages, except in the fifth cause of action for unfair business practices. (See Cross-Compl., ¶45.) Accordingly, the litigation privilege does not provide a basis to demur to the entire Cross-Complaint. Instead, the Court will consider the demurrer as to each cause of action in the Cross-Complaint.

1st Cause of Action for Breach of Contract

A cause of action for breach of contract must allege “(1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (D’Arrigo Bros. of California v. United Farmworkers of America (2014) 224 Cal.App.4th 790, 800.) The Cross-Complaint alleges that Cross-Defendant breached the parties’ agreement “[b]y attempting to charge Vivian more than was required under the contract.” (Cross-Compl., ¶12.) The contract states that Cross-Complainant agrees to pay Cross-Defendant pursuant to its price list, a copy of which is attached and incorporated into the contract. (Id. at Exh. 1, ¶2.) No price list is attached to the copy of the agreement attached to the Cross-Complaint, however. (Id. at Exh. 1.) Cross-Complainant alleges that the parties agreed to a price of $13,494.00. (Id. at ¶8.)

Overcharging or overbilling may constitute a breach in the sense that it violates a term of the parties’ agreement, namely the price, but Cross-Defendant is correct to point out that there is no allegation showing recoverable damages as a result of this attempt to overcharge. The Cross-Complaint alleges that Cross-Complainant suffered “economic damages, as well as mental and emotional distress.” (Id. at ¶13.) Emotional distress damages are not available for breach of contract. (See McMahon v. Craig (2009) 176 Cal.App.4th 1502, 1513.) Nor are any facts alleged to show what economic damages Cross-Complainant incurred as a result of the attempted overcharging. The Cross-Complaint alleges that Cross-Complainant only paid $13,494.00. The opposition argues that Cross-Complainant can recover the attorney’s fees she incurred in this action as damages but fails to provide clear citation to authority for this rule. Instead, Cross-Complainant cites broadly to Monster, LLC v. Superior Court (2017) 12 Cal.App.5th 1214, without page citation or any further analysis. (Opp., p. 9:9-12.) In any event, attorney’s fees are not alleged as damages in the breach of contract cause of action. Therefore, the demurrer to the first cause of action for breach of contract is sustained.

            2nd Cause of Action for Breach of Implied Covenant of Good Faith and Fair Dealing

The implied covenant prevents one side from unfairly frustrating the other's right to receive the benefits of the agreement actually made. (Guz v. Bechtel Nat. Inc. (2000) 24 Cal.4th 317, 349–350, 100 Cal.Rptr.2d 352, 8 P.3d 1089; 1 Witkin, Summary of Cal. Law (2022) Contracts, § 822.) The covenant does not impose substantive terms beyond those of the contract. (Guz, at pp. 349–350, 100 Cal.Rptr.2d 352, 8 P.3d 1089.) A plaintiff claiming breach must allege the defendant's wrongful conduct was contrary to the contract's purpose and the parties’ legitimate expectations. (Avidity Partners, LLC v. State of California (2013) 221 Cal.App.4th 1180, 1204, 165 Cal.Rptr.3d 299.)

(Cordoba Corp. v. City of Industry (2023) 87 Cal.App.5th 145, 156.) The demurrer is brought on the grounds that the second cause of action is merely an improper restatement of the cause of action for breach of contract. (Citing Careau & Co. v. Sec. Pac. Bus. Credit, Inc. (1990) 222 Cal. App. 3d 1371, 1394.) The Cross-Complaint alleges that Cross-Defendant represented that it would accept $13,494.00 for the services provided, then “took advantage of the ambiguity in the contract regarding what was to be done under the contract, the amount required for its services, as well as Vivian’s age, economic status, the exigent nature of the situation creating her lack of bargaining power, and provided unnecessary services and/or charged Vivian excessive amounts for the services rendered.” (Cross-Compl., ¶¶17-18.)

The opposition to the demurrer argues this is separate from a simple breach of contract because it alleges that Cross-Defendant was invested with discretionary power in determining the services to be provided and took advantage by providing services that were not needed. (Citing Carma Developers (Cal.), Inc. v. Marathon Development California, Inc. (1992) 2 Cal.4th 342, 372 [“The covenant of good faith finds particular application in situations where one party is invested with a discretionary power affecting the rights of another. Such power must be exercised in good faith.”].) This is sufficient to state a duty owed separate from those owed expressly under the contract. Cross-Defendant’s reply does not address this case law and instead makes arguments outside of the pleadings regarding the reasonableness of its conduct. (Reply, pp. 2:29-3:2.) This is not proper on demurrer.

However, as with the first cause of action for breach of contract, the Cross-Complaint does not allege what damages Cross-Complainant sustained from the breach of the implied covenant. The allegations that Cross-Complainant suffered economic damages is at odds with the earlier allegation that she paid the price to which she had agreed. Therefore, the demurrer to the second cause of action is also sustained.

            3rd Cause of Action for Intentional Misrepresentation; 4th Cause of Action for False Promise

“Fraud actions... are subject to strict requirements of particularity in pleading. The idea seems to be that allegations of fraud involve a serious attack on character, and fairness to the defendant demands that he should receive the fullest possible details of the charge in order to prepare his defense.” (Committee on Children's Television v. Gen. Foods Corp. (1983) 35 Cal.3d

197, 211.) “This particularity requirement necessitates pleading facts which “show how, when, where, to whom, and by what means the representations were tendered.” ’ ” (Lazar, supra, 12 Cal.4th at p. 645, 49 Cal.Rptr.2d 377, 909 P.2d 981.)” (Tenet Healthsystem Desert, Inc. v. Blue Cross of California (2016) 245 Cal.App.4th 821, 837.)

The Cross-Complaint does not allege facts showing how, when, where, to whom, and by what means the representation regarding the contract price was tendered. It simply alleges that Cross-Defendant falsely represented it would accept $13,494.00 as payment for the services rendered. (Cross-Compl., ¶¶22-23, 30-31.) This is not sufficient for fraud causes of action. Cross-Complainant makes the argument that fraud may be based on conduct that is designed to mislead, not just on verbal or written statements, but this is irrelevant to the lack of specificity here. The Cross-Complaint is so vague that it cannot be determined how Cross-Defendant made the allegedly false representations and promises. Finally, as discussed above, the Cross-Complaint does not allege what economic damages Cross-Complainant sustained as a result of the allegedly false representations and/or promises. (Id. at ¶¶27, 35.)

            5th Cause of Action for Unlawful Business Practices

Business and Professions Code section 17200 authorizes a civil action for any unlawful, unfair or fraudulent business act or practice. In order to allege an unlawful business practice, the plaintiff must specify the law that was purportedly violated. (Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.) The Cross-Complaint does not allege that any law was violated by Cross-Defendant’s conduct.

The demurrer does not explain what Cross-Complainant must allege in order to state a cause of action based on unfair business practices. It simply contends that it “cannot be based upon general common law principles.” (Citing Textron Financial Corp. v. National Union Fire Insurance Co. of Pittsburgh (2004) 118 Cal.App.4th 1061,1072.) Plaintiff’s opposition contends that she is only required to allege that “members of the public are likely to be deceived.” (Citing Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1266-1267.) The allegations that Cross-Defendant took advantage of the ambiguity in the contract to represent that it would accept a certain contract price and then later sought more than that price are sufficient does not meet this standard because it is specific to Cross-Complainant’s experience with Cross-Defendant. The Cross-Complaint does not allege that this was practice used by Cross-Defendant in its dealings with anyone else. Also, the question of alleging damages as a result of this purportedly unfair business practice, as with all the other causes of action, remains. The demurrer to the fifth cause of action is sustained.

Leave to Amend

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Id.) Cross-Complainant has cited case law that suggests it is possible to allege attorney’s fees as damages. Leave to amend is granted.

Conclusion

Cross-Defendant PRC Restoration, Inc.’s Demurrer to the Cross-Complaint is SUSTAINED WITH 20 DAYS’ LEAVE TO AMEND.

Moving party to give notice.