Judge: Maurice A. Leiter, Case: 24STCV33191, Date: 2025-05-07 Tentative Ruling

Case Number: 24STCV33191    Hearing Date: May 7, 2025    Dept: 54

Hearing Date: May 7, 2025

Department 54, Judge Maurice A. Leiter

Demurrer to Cross-Complaint

Moving Party: Cross-Defendants Choice Foods, Inc., John Fovos and Marianna Fovos

Responding Party: Cross-Complainants Shoreline Foods,Inc., Amusement Foods, lnc., Freeway Foods, Inc., and La Breafo, Inc.

T/R:      CROSS-DEFENDANTS' DEMURRER IS OVERRULED.

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

CROSS-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, and reply.

BACKGROUND

On December 17, 2024, Plaintiff Choice Foods, Inc. filed a complaint against Defendants Shoreline Foods, Inc., et al., asserting causes of action for breach of contract, open book account, and account stated.

On February 5, 2025, Shoreline Foods,Inc., Amusement Foods, lnc., Freeway Foods, Inc., and La Breafo, Inc. filed a complaint against Choice Foods, Inc., John Fovos and Marianna Fovos, asserting causes of action for (1) UCL violations; (2) fraud; and (3) breach of contract.

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 UCL Violations

California Business and Professions Code section 17200 prohibits “any unlawful, unfair or fraudulent business act or practice.” (Bus. & Prof. Code § 17200; see Clark v. Superior Court (2010) 50 Cal.4th 605, 610.)

Cross-Defendants demur to the first cause of action on the ground that it fails to state sufficient facts. Cross-Complainants allege “Within the last four years, cross-complainants, and each of them, have discovered that cross-defendants Choice Foods, John Fovos, and Marianna Fovos have engaged in deceptive business practices with regard to Shoreline, Freeway, Amusement, and La Breafo by and through the use of deceptive and improper fraudulent billing statements, deceptive representations about the products being delivered to cross-complainants' restaurants, and deceptive pricing based on inflated representations about the wholesale prices that were charged for certain products.” (Cross-Compl. ¶21.) This is sufficient to allege a claim for UCL violations.

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.)

Cross-Defendants demur to the second cause of action on the ground that it is not pleaded with the requisite specificity. Cross-Complainants allege, “Cross-defendants John Fovos and Marianna Fovos, on behalf of themselves and their alter ego company, Choice Foods, made false and fraudulent representations to cross-complainants Shoreline, Freeway, Amusement, and La Breafo concerning the products that would be delivered to cross-complainants' restaurants, representing that ‘fresh’ chicken would be delivered and not ‘frozen’ chicken. Choice Foods further made false and fraudulent representations to cross-complainants by representing that cross-complainants had to pay the full price of certain orders to Choice Foods, even though the cross-complainants had already paid for such orders directly through the wholesale supplier, so that there was no bona fide charges for Choice Foods to ‘pass through’ to the cross-complainants. Similarly, Choice Foods would use false wholesale product prices as the basis for marking up shipments to reflect its storage and delivery services, when, in fact, the base product prices charged by the wholesaler or supplier were considerably lower than what was represented to cross-complainants by Choice Foods.” These allegations are sufficiently specific to state a claim for fraud.

The demurrer to the second cause of action is OVERRULED.

C. Third Cause of Action for Breach of Contract

“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.)

Cross-Defendants assert the third cause of action fails because it is uncertain. Cross-Complainants allege “Cross-defendant Choice Foods entered into contracts with Shoreline, Freeway, Amusement, and La Breafo to supply and deliver food commodities and related restaurant supplies to the restaurants operated by Shoreline, Freeway, Amusement, and La Breafo in Los Angeles and Orange Counties. Those contracts, which were partly written and partly oral and amended over time, called for Choice Foods to deliver such products and items and to charge Cross-Complainants prices that were to be based on the wholesalers' and suppliers prices for the relevant goods that Choke Foods stored and ultimately delivered to cross-complainants’ restaurants.” This is sufficient to allege the existence and breach of contracts.

The demurrer to the third cause of action is OVERRULED.