Judge Matthew C. Braner, Case Number: 37-2023-00025472-CU-FR-CTL, Date: 2024-06-21 Tentative Ruling

Judge: Matthew C. Braner, Case: 37-2023-00025472-CU-FR-CTL, Date: 2024-06-21 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - June 20, 2024

06/21/2024 09:00:00 AM C-60 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Matthew C. Braner

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Civil - Unlimited Fraud Demurrer / Motion to Strike 37-2023-00025472-CU-FR-CTL MURPHY VS MULVANEY BARRY BEATTY LINN & MAYERS LLP [IMAGED] CAUSAL DOCUMENT/DATE FILED:

The demurrer to the First Amended Complaint by Defendants Mulvaney Barry Beatty Linn & Mayers LLP, John A. Mayers, Patrick Prindle, Rex B. Beatty, and M. Todd Ratay is SUSTAINED.

Defendants' motion to strike portions of the First Amended Complaint is GRANTED.

Preliminary Matters Defendants' request for judicial notice of Exhibits A-D is granted. However, although the Court may take judicial notice of the existence of these court filings, it cannot accept the truth of their contents except for documents such as orders. (Garcia v. Sterling (1985) 176 Cal.App.3d 17, 22.) Plaintiffs' request for judicial notice of Exhibits 1-7 is denied. Nothing in the record shows Plaintiffs established a proper foundation for the exhibits. Additionally, a 'demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of documents whose truthfulness or proper interpretation are disputable.' (Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374.) Although the parties dispute whether the underlying facts set forth in Plaintiffs' exhibits (including trial transcripts, deposition testimony, and discovery responses) support or deny Plaintiffs' allegations in the pleadings, such factual determinations are outside the scope of a demurrer.

The court will disregard the 'evidence' in the Declaration of Richard C. Wildman, Jr. as outside the pleadings and not subject to judicial notice.

Plaintiffs' objection to Defendants' untimely served reply papers (electronically served one court day late) is overruled. However, the court is unlikely to consider future untimely served filings.

Demurrer A demurrer shall be sustained if complaint 'does not state facts sufficient to constitute a cause of action' or is 'uncertain.' (Code Civ. Proc., § 430.10 (e), (f).) To test the sufficiency of a cause of action, the court treats as true 'all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.' (Centinela Freeman Emergency Medical Associates v. Health Net of California, Inc. (2016) 1 Cal.5th 994, 1010.) The court may also consider matters that have been judicially noticed. (Id.) The court shall give the complaint a 'reasonable interpretation, reading it as a whole and its parts in their context.' (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) Finally, it is not necessary to 'plead evidentiary facts supporting [an] allegation of ultimate fact,' and a pleading 'is adequate so long as it apprises the Calendar No.: Event ID: TENTATIVE RULINGS

3045033 14 CASE NUMBER: CASE TITLE: MURPHY VS MULVANEY BARRY BEATTY LINN & MAYERS LLP 37-2023-00025472-CU-FR-CTL defendant of the factual basis for the claim.' (Birke v. Oakwood Worldwide (2009) 169 Cal.App.4th 1540, 1549.) Plaintiffs' operative First Amended Complaint ('FAC') alleges eighteen (18) causes of action against Defendants. Defendants demur to all causes of action in the FAC except for Plaintiffs' causes of action for legal malpractice (fifth and sixth).

As an initial matter, the parties dispute whether this action is primarily based in fraud or professional negligence. For the purposes of a demurrer, the court is not 'bound by the label attached to a cause of action' but should 'examine the factual allegations to determine whether a cause of action is (or can be) stated on any available legal theory.' (North American Chemical Co. v. Superior Court (1997) 59 Cal.App.4th 764, 786.) Defendants demur to the causes of action for intentional misrepresentation (second), false promise (tenth, labeled as 'Promise Without Intention to Perform'), concealment/suppression of fact (eleventh), and constructive fraud (sixteenth). As to the four fraud causes of action, Defendants argue these claims lack the required factual specificity to plead fraud against Defendants. The court agrees.

''The elements of fraud, which give rise to the tort action for deceit, are: (1) misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity; (3) intent to defraud, i.e., to induce reliance; (4) justifiable reliance; and (5) resulting damage.'' (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) The 'facts constituting the fraud must be alleged with sufficient specificity to allow defendant to understand fully the nature of the charge made.' (Roberts v. Ball, Hunt, Hart, Brown & Baerwitz (1976) 57 Cal.App.3d 104, 109.) That fraud must be alleged with specificity 'means: (1) general pleading of the legal conclusion of fraud is insufficient; and (2) every element of the cause of action for fraud must be alleged in full, factually and specifically, and the policy of liberal construction of pleading will not usually be invoked to sustain a pleading that is defective in any material respect.' (Wilhelm v. Pray, Price, Williams & Russell (1986) 186 Cal.App.3d 1324, 1331.) In practice, a cause of action for fraud '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 (quoting Hills Trans. Co. v. Southwest (1968) 266 Cal.App.2d 702, 707).) Here, the FAC lacks the factual specificity setting forth how, when, where, to whom, and by what means the allegedly fraudulent representations were tendered to Plaintiffs. Nor have Plaintiffs alleged with specificity how Defendants' conduct in encouraging Plaintiffs to falsely testify they are married, or representations that Plaintiffs lost at trial because the jury was 'biased' against them, caused Plaintiffs harm. Additionally, although the FAC alleges Defendants made misrepresentations regarding the outcome of trial in the underlying action, such statements regarding future events, as pled, are unactionable opinions. (See San Francisco Design Center Associates v. Portman Companies (1995) 41 Cal.App.4th 29, 43-44.) Moreover, to the extent the fraud causes of action are founded on allegations of Defendants' negligent conduct in rendering professional legal services to Plaintiffs (including allegations of Defendants' failure to apprise Plaintiffs of the true facts and Plaintiffs' legal rights in the underlying action), the fraud claims are duplicative of the legal malpractice claims. (Palm Springs Villas II Homeowners Assn., Inc. v. Parth (2016) 248 Cal.App.4th 268, 290 [duplicative cause of action may form the basis for sustaining a demurrer].) Accordingly, the demurrer is sustained with respect to the second, tenth, eleventh, and sixteenth causes of action. Plaintiffs have leave to amend.

Defendants also demur the cause of action for 'Conspiracy to Defraud' (first). 'Conspiracy is not a cause of action, but a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration.' (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510–511.) A civil conspiracy 'must be activated by the commission of an actual tort.' (Id. at p. 511.) Where the underlying tort is fraud, as here, the requirements of specificity remain; conclusory allegations do not suffice. (AREI II Calendar No.: Event ID: TENTATIVE RULINGS

3045033 14 CASE NUMBER: CASE TITLE: MURPHY VS MULVANEY BARRY BEATTY LINN & MAYERS LLP 37-2023-00025472-CU-FR-CTL Cases (2013) 216 Cal.App.4th 1004, 1022-24.) For the reasons set forth above, the FAC lacks the requisite factual specificity to support fraud causes of action. As a result, the allegations of conspiracy are not supported by sufficient factual allegations to establish fraud liability via a conspiracy theory.

Accordingly, the demurrer is sustained with respect to the first cause of action. Plaintiffs have leave to amend.

For similar reasons as the fraud and conspiracy causes of action, the FAC lacks the factual specificity to support Plaintiffs' cause of action for negligent misrepresentation (third). (Small v. Fritz Companies, Inc.

(2003) 30 Cal.4th 167, 184 [a cause of action for negligent misrepresentation must be pled with specificity].) Accordingly, the demurrer is sustained with respect to the third cause of action. Plaintiffs have leave to amend.

The court agrees with Defendants that Plaintiffs' causes of action for breach of contract (fourth and fifth), negligence (eighth), negligence per se (ninth), breach of fiduciary duty (thirteenth), and negligent infliction of emotional distress (fifteenth) are duplicative of Plaintiffs' causes of action for legal malpractice. (Palm Springs Villas II Homeowners Assn., Inc., supra, 248 Cal.App.4th at p. 290.) As pled, each of these claims not only sound in professional negligence, but are also founded on the same set of facts that form the basis of Plaintiffs' legal malpractice claims. The negligence, negligence per se, and negligent infliction of emotional distress claims are founded on Defendants' allegedly negligent conduct in rendering professional legal services to Plaintiff. The breach of fiduciary duty claim is also a repackaged legal malpractice claim, as Plaintiffs do not separately allege any violations of any fiduciary duties that Defendants owed to Plaintiffs (such as the duty of confidentiality or loyalty). The breach of contract claims are duplicative and insufficiently pled for similar reasons. (See Stanley v. Richmond (1995) 35 Cal.App.4th 1070, 1092, fn. 7 [stating proof the attorney violated the Rules of Professional Conduct and other fiduciary duties owed to her client is sufficient to support a claim the attorney's conduct amounted to a breach of contract as well].) Accordingly, Defendants' demurrer is sustained as to the fourth, fifth, eighth, ninth, thirteenth, and fifteenth causes of action. The court is inclined to sustain the demurrer with leave to amend as to the fourth, fifth, and thirteenth causes of action and without leave to amend as to the eighth, ninth, and fifteenth causes of action. The court will hear from the parties on this issue.

Defendants demur to the cause of action 'Violation of Covenant of Good Faith and Fair Dealing/Unfair Business' (twelfth) on the grounds this claim fails to state facts sufficient to constitute a cause of action and is uncertain. The court agrees. As currently plead, the twelfth cause of action does not plead the elements of a claim for the breach of the covenant of good faith and fair dealing or the Unfair Competition Law, but instead appears duplicative of the eighteenth cause of action (spoliation of evidence), as the substantive allegations concern Defendants' alleged handling of evidence.

Plaintiffs contend the references to spoliation of evidence were a typographical error and the twelfth cause of action can be amended to plead a breach of the covenant of good faith and fair dealing claim without any reference to unfair business practices. However, such a claim must be distinct from Plaintiffs' breach of contract claims. (See Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1395 ['absent those limited cases where a breach of a consensual contract term is not claimed or alleged, the only justification for asserting a separate cause of action for breach of the implied covenant is to obtain a tort recovery']; Guz v. Bechtel Nat. Inc. (2000) 24 Cal.4th 317, 351 and fn. 18 (breach of the covenant of good faith and fair dealing may be alleged where the plaintiff alleges that the defendant acted in bad faith to frustrate the contract's benefits].) Accordingly, the demurrer is sustained with respect to the twelfth cause of action. Plaintiffs have leave to amend.

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3045033 14 CASE NUMBER: CASE TITLE: MURPHY VS MULVANEY BARRY BEATTY LINN & MAYERS LLP 37-2023-00025472-CU-FR-CTL As to the cause of action for intentional infliction of emotional distress (fourteenth), the court agrees with Defendants that generally 'emotional distress damages are not recoverable when attorney malpractice leads only to economic loss.' (Camenisch v. Superior Court (1996) 44 Cal.App.4th 1689, 1691.) 'Where the interest of the client is economic, serious emotional distress is not an inevitable consequence of the loss of money and, as noted, the precedents run strongly against recovery.' (Id. at p. 1695.) Although Plaintiffs contend their IIED claim is also supported by and incorporates their fraud and breach of fiduciary duty causes of action, these causes of action are insufficiently pled for the reasons set forth above.

Accordingly, the demurrer is sustained with respect to the fourteenth cause of action. Plaintiffs have leave to amend.

As to the declaratory relief cause of action (seventeenth), the FAC does not plead sufficient facts to show the existence of an actual controversy or the facts supporting Plaintiffs' claims for indemnification, attorneys' fees, or an accounting. Additionally, where declaratory relief depends upon the other causes of action, the declaratory relief claim fails where the other causes of action fail to state a claim. (The Ratcliff Architects v. Vanir Construction Management, Inc. (2001) 88 Cal.App.4th 595, 607.) To the extent Plaintiffs' declaratory relief claim is based on their breach of contract claims, the declaratory relief claim fails to state sufficient facts for the reasons the Plaintiffs' breach of contract claims are insufficient.

Accordingly, the demurrer is sustained with respect to the seventeenth cause of action. Plaintiffs have leave to amend.

Finally, as to the cause of action for spoliation of evidence (eighteenth), Plaintiffs apparently concede this is not a cognizable claim. (ROA 41, Oppo., at p. 10: 24-27.) Accordingly, Defendants' demurrer is sustained as to this cause of action without leave to amend.

Motion to Strike A court may strike 'any irrelevant, false, or improper matter inserted in any pleading.' (Code Civ. Proc., § 436, subd. (a).) An improper claim for punitive damages can be stricken. (Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 163-64.) Punitive damages are not favored and are generally granted only 'with the greatest caution.' (Dyna-Med, Inc. v. Fair Employment and Housing Comm'n (1987) 43 Ca1.3d 1379, 1392.) A claim for punitive damages must also be pled with specificity; conclusory allegations unsupported by facts showing malicious, fraudulent, or oppressive intentions will not suffice. (G.D.

Searle & Co. v. Superior Court (1975) 49 Cal.App.3d 22, 32-33; Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1041-42.) As to the motion to strike, Plaintiffs' claims for exemplary and punitive damages are founded on their fraud claims, which are insufficiently pled. The FAC also fails to establish any contractual or statutory right to attorneys' fees or an accounting. Additionally, the FAC fails to establish a sufficient declaratory relief cause of action to support the declaration of facts requested in the prayer for relief. Consequently, the motion is granted as to Plaintiffs' claims for exemplary damages, punitive damages, attorneys' fees, accounting, and declaration of facts for declaratory relief. Plaintiffs have leave to amend.

Plaintiffs have 30 days from entry of this order to file and serve a second amended complaint.

The minute order is the order of the court.

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