Judge: Maurice A. Leiter, Case: 23STCV11308, Date: 2023-10-31 Tentative Ruling

Case Number: 23STCV11308    Hearing Date: November 27, 2023    Dept: 54

Hearing Date: November 27, 2023

Department 54, Judge Maurice A. Leiter

Demurrer to Complaint and Motion to Strike

Moving Party: Defendants Sweety High, Inc., Frank Simonetti and Veronica Zelle

Responding Party: Plaintiff Jena Rose Raphael

T/R:      DEFENDANTS’ DEMURRER IS OVERRULED.

DEFENDANTS’ MOTION TO STRIKE IS DENIED.

DEFENDANTS TO FILE AND SERVE ANSWERS TO THE COMPLAINT WITHIN 30 DAYS OF NOTICE OF RULING.

DEFENDANTS TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at SMCdept54@lacourt.org with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

The Court considers the moving papers, opposition, reply, and supplemental briefing.

BACKGROUND

On May 18, 2023, Plaintiff Jena Rose Raphael sued Defendants Sweety High, Inc., Frank Simonetti and Veronica Zelle, asserting causes of action for (1) violation of the Krekorian Talent Scam Prevention Act; (2) fraud; and (3) accounting.

Plaintiff alleges Defendants fraudulently collected advanced fees for talent management services in violation of the Krekorian Talent Scam Prevention Act.

ANALYSIS

A demurrer to a complaint may be taken to the whole complaint or to any of the causes of action in it.  (CCP § 430.50(a).)  A demurrer challenges only the legal sufficiency of the complaint, not the truth of its factual allegations or the plaintiff's ability to prove those allegations.  (Picton v. Anderson Union High Sch. Dist. (1996) 50 Cal. App. 4th 726, 732.)  The court must treat as true the complaint's material factual allegations, but not contentions, deductions or conclusions of fact or law.  (Id. at 732-33.)  The complaint is to be construed liberally to determine whether a cause of action has been stated.  (Id. at 733.)

A. First Cause of Action for Violation of the Krekorian Talent Scam Prevention Act

The Krekorian Talent Scam Prevention Act prohibits talent managers from collecting advance fees for management services. (Labor Code § 1702.1.)

Defendants demur to this claim on the grounds that Defendants did not provide management services to Plaintiff and that the cause of action is barred by the one-year statute of limitations of CCP § 340(a) for actions that allow for treble damages. In opposition, Plaintiff asserts a three-year statute of limitation should apply.

The Court previously continued the hearing on these motions to allow for supplemental briefing on (1) whether the statute of limitations for a Krekorian Act claim is one year or three years, and (2) whether the portions of Plaintiff’s Krekorian Act claim seeking to recover treble damages for payments she made more than one year before she filed suit are barred by the statute of limitations.

In the supplemental briefing, Plaintiff asserts that the claims are not barred by the statute of limitations under the continuing violations doctrine. The doctrine provides,

“The continuing violation doctrine aggregates a series of wrongs or injuries for purposes of the statute of limitations, treating the limitations period as accruing for all of them upon commission or sufferance of the last of them.” (Ibid., citing Richards v. CH2M Hill, Inc., supra, 26 Cal.4th 798, 811-818, 111 Cal.Rptr.2d 87, 29 P.3d 175 (Richards); see also Morgan v. Davidson (2018) 29 Cal.App.5th 540, 560, 240 Cal.Rptr.3d 235.) Consequently, the continuing violation doctrine “allows liability for unlawful ... conduct occurring outside the statute of limitations if it is sufficiently connected to unlawful conduct within the limitations period.” (Richards, at p. 802, 111 Cal.Rptr.2d 87, 29 P.3d 175; see also Yanowitz v. L'Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1056, 32 Cal.Rptr.3d 436, 116 P.3d 1123 (Yanowitz).) For the continuing violation doctrine to apply, a plaintiff must show the defendant engaged in “a pattern of reasonably frequent and similar acts [that] may, in a given case, justify treating the acts as an indivisible course of conduct actionable in its entirety, notwithstanding that the conduct occurred partially outside and partially inside the limitations period.” (Aryeh, at p. 1198, 151 Cal.Rptr.3d 827, 292 P.3d 871; see Morgan v. Davidson, at p. 560.)

(Willis v. City of Carlsbad (2020) 48 Cal.App.5th 1104, 1124.)

Plaintiff alleges an ongoing relationship between her and Defendants in which Defendants charged her illegal upfront fees from the beginning of their relationship in 2019 until it was terminated three and a half years later. Plaintiff also alleges Defendants actively misrepresented to her what the money was being used for. Plaintiff alleges an improper fee in June 2022 (Complt. ¶ 28), less than one year before the complaint was filed in May 2023. This is sufficient to allege a pattern of conduct justifying treating the individual acts as an indivisible course of conduct. The case is not barred by either a one-year or three-year statute of limitations.

The demurrer to the first cause of action is OVERRULED.

B. Second Cause of Action for Fraud

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.)

Defendants demur to the second cause of action for fraud on the ground that the parties had a purely contractual relationship. As stated, the Court must treat the allegations in the complaint as true. Plaintiff alleges Defendants misrepresented the need for and use of almost $2.5 million that Plaintiff paid Defendants since 2019. This is sufficient to state a claim for fraud.

The demurrer to the second cause of action is OVERRULED.

C. Third Cause of Action for Accounting

“The right to an accounting can arise from the possession by the defendant of money or property which, because of the defendant’s relationship with the plaintiff, the defendant is obliged to surrender.” (Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 179-80.) 

Plaintiff alleges Defendants misappropriated money belonging to Plaintiff and seeks an accounting to determine the amount. This is sufficient to state a claim for accounting.

The demurrer to the third cause of action is OVERRULED.

D. Motion to Strike

“Any party, within the time allowed to response to a pleading, may serve and file a notice of motion to strike the whole or any part" of that pleading. (CCP § 435(b)(1).) “The Court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false or improper matter asserted in any pleading; (b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the Court." (CCP § 436.)

Defendant moves to strike allegations of misconduct that occurred from 2019 to 2021 on the ground that they are barred by the one-year statute of limitations. As discussed, the complaint as pleaded is not barred by the statute of limitations.

The motion to strike is DENIED.