Judge Michael P. Linfield, Case 22STCV34740 2023-02-24 Tentative Ruling

Judge: Michael P. Linfield, Case: 22STCV34740, Date: 2023-02-24 Tentative Ruling

Case Number: 22STCV34740 Hearing Date: February 24, 2023 Dept: 34

SUBJECT: Demurrer to Plaintiffs’ First Amended Complaint and Motion to Strike Portions of Plaintiffs’ First Amended Complaint

Moving Party: Defendants Daniel Moaddel and Moaddel Law Firm, APC

Resp. Party: Plaintiffs Meriel Arcega and Faith Arcega

Defendants’ Demurrer is OVERRULED.

Defendants’ Motion to Strike is DENIED.

BACKGROUND:

On October 31, 2022, Plaintiffs Meriel Arcega and Faith Arcega filed their Complaint against Defendants Daniel Moaddel and Moaddel Law Firm, APC on causes of action regarding alleged legal malpractice.

On November 10, 2023, Plaintiffs filed their First Amended Complaint against Defendants, which included the following causes of action:

(1) Attorney malpractice;

(2) Breach of fiduciary duty;

(3) Fraud; and

(4) Violation of Business and Professions Code section 17200.

On December 28, 2022, Defendants filed their Demurrer to Plaintiffs’ First Amended Complaint and their Motion to Strike Portions of Plaintiffs’ First Amended Complaint. Defendants concurrently filed proposed orders with each of these filings.

On February 9, 2023, Plaintiffs filed their Opposition to the Demurrer and their Opposition to the Motion to Strike.

On February 16, 2023, Defendants filed their Reply to the Demurrer and their Reply to the Motion to Strike.

ANALYSIS:

I. Demurrer

A. Legal Standard

A demurrer is a pleading used to test the legal sufficiency of other pleadings. It raises issues of law, not fact, regarding the form or content of the opposing party’s pleading. It is not the function of the demurrer to challenge the truthfulness of the complaint; and for purpose of the ruling on the demurrer, all facts pleaded in the complaint are assumed to be true, however improbable they may be. (Code Civ. Proc., §§ 422.10, 589.)

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack; or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311.) No other extrinsic evidence can be considered (i.e., no “speaking demurrers”). A demurrer is brought under Code of Civil Procedure section 430.10 (grounds), section 430.30 (as to any matter on its face or from which judicial notice may be taken), and section 430.50(a) (can be taken to the entire complaint or any cause of action within).

A demurrer may be brought under Code of Civil Procedure section 430.10, subdivision (e) if insufficient facts are stated to support the cause of action asserted. A demurrer for uncertainty (Code of Civil Procedure section 430.10, subdivision (f)), is disfavored and will only be sustained where the pleading is so bad that defendant cannot reasonably respond—i.e., cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him/her. (Khoury v. Maly's of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.) Moreover, even if the pleading is somewhat vague, “ambiguities can be clarified under modern discovery procedures.” (Id.)

B. Discussion

Defendants demur to the second and third causes of action in the First Amended Complaint.

1. Breach of Fiduciary Duty

a. Legal Standard

“The elements of a cause of action for breach of fiduciary duty are the existence of a fiduciary relationship, its breach, and damage proximately caused by that breach.” (City of Atascadero v. Merrill Lynch, Pierce, Fenner, & Smith, Inc. (1998) 68 Cal.App.4th 445, 483.)

“There are¿two kinds¿of fiduciary duties — those imposed by law and those undertaken by agreement.” (Gab Bus. Servs. v. Lindsey & Newsom Claim Servs. (2000) 83 Cal.App.4th 409, 416, emphasis omitted, overruled in part on other grounds by Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1154.)

“Fiduciary duties are imposed by law in certain technical, legal relationships such as those between partners or joint venturers, husbands and wives, guardians and wards, trustees and beneficiaries, principals and agents, and attorneys and clients.” (Id., citations omitted.) ¿

“A fiduciary duty is undertaken by agreement when one person enters into a confidential relationship with another.” (Id. at 417.)

b. Discussion

Defendants demur to the second cause of action for breach of fiduciary duty, arguing: (1) that the cause of action is insufficiently pled; (2) that Plaintiffs have failed to state any facts which reflect that they have suffered any actual damages; and (3) that this is actually a cause of action for fraud, which requires a heightened pleading standard. (Demurrer, pp. 14:16–19, 15:2–4, 5–7.)

Plaintiffs disagree, arguing that the second cause of action is sufficiently pled. (Opposition to Demurrer, p. 3:2–5.)

Defendants reiterate their arguments in their Reply.

Among other things, Plaintiffs allege: (1) that Defendants were Plaintiffs’ attorneys; (2) that as Plaintiffs’ attorneys, Defendants had a fiduciary relationship with Plaintiffs; (3) that Defendants breached the fiduciary relationship by repeatedly failing to advise Plaintiffs correctly, by repeatedly failing to take any action to submit timely applications on Plaintiffs’ behalf, and by intentionally making false and incorrect statements of law and fact to Plaintiffs; and (4) that as a foreseeable and proximate result of these breaches, that Plaintiffs have suffered the loss of their nonimmigrant status and right to lawfully reside and work in the United States, as well as incurring additional attorney’s fees and costs and suffering other damages. (First Amended Complaint, ¶¶ 9–10, 21–22, 25.)

For the purposes of a demurrer, these allegations are sufficiently certain to constitute a cause of action for breach of fiduciary duty. Further, a cause of action for breach of fiduciary duty is separate from a cause of action for fraud. A heightened pleading standard is not a requirement for this cause of action.

The Court DENIES Defendants’ Demurrer to the second cause of action for breach of fiduciary relationship.

2. Fraud

a. Legal Standard

“The elements of fraud are (a) a misrepresentation (false representation, concealment, or nondisclosure); (b) scienter or knowledge of its falsity; (c) intent to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Hinesley v. Oakshade Town Ctr. (2005) 135 Cal.App.4th 289, 294.)¿¿

The facts constituting the alleged fraud must be alleged factually and specifically as to every element of fraud, as the policy of “liberal construction” of the pleadings will not ordinarily be invoked. (Lazar v. Super. Ct. (1996) 12 Cal.4th 631, 645.)¿¿

To properly allege fraud against a corporation, the plaintiffs must plead the names of the persons allegedly making the false representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.)¿

b. Discussion

Defendants demur to the third cause of action for fraud, arguing: (1) that the cause of action is insufficiently pled; and (2) that Plaintiffs have not met the heightened pleading standard for fraud. (Demurrer, pp. 16:4–6, 17:12–28.)

Plaintiffs disagree, arguing that the second cause of action is sufficiently pled. (Opposition to Demurrer, p. 5:6.) Plaintiffs then list multiple alleged statements that Defendants made, organized by date, which Plaintiffs argue they relied upon. (Id., pp. 3–5.)

Defendants reiterate their arguments in their Reply.

Among other things, Plaintiffs allege: (1) that Defendants made multiple false statements to Plaintiffs; (2) that Defendants knew these statements were false at the time they made them; (3) that Defendants made these statements with the intent for Plaintiffs to rely on them; (4) that Plaintiffs did reasonably rely on the statements; and (5) that Plaintiffs were actually harmed because of their reliance on the statements, in the ways the Court listed above with the prior cause of action. (Complaint, ¶¶ 28–30.) Plaintiffs also listed the alleged statements, including who stated them and when they were stated. (Complaint, ¶ 28.)

For the purposes of a demurrer, these allegations are sufficiently certain to constitute a cause of action for fraud and to meet its heightened pleading standard.

The Court DENIES Defendants’ Demurrer to the third cause of action for fraud.

C. Conclusion

Defendants’ Demurrer is OVERRULED.

II. Motion to Strike

A. Legal Standard¿

Any party, within the time allowed to respond to a pleading, may serve and file a notice of motion to strike the whole or any part thereof. (Code Civ. Proc., § 435(b)(1)). The notice of motion to strike a portion of a pleading shall quote in full the portions sought to be stricken except where the motion is to strike an entire paragraph, cause of action, count or defense. (California Rules of Court Rule 3.1322.)¿¿¿¿

¿¿

The grounds for a motion to strike shall appear on the face of the challenged pleading or form any matter of which the court is required to take judicial notice. (Code Civ. Proc., § 437(a)). The court then may strike out any irrelevant, false, or improper matter inserted in any pleading and 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. (Code Civ. Proc., § 436.) When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend. (Perlman v. Municipal Court (1979) 99 Cal.App.3d 568, 575.)¿¿¿¿

B. Discussion

Defendants move the Court to strike 14 items (including the First Amended Complaint in its entirety, the causes of actions Defendants demurred to, various allegations, and Plaintiff’s prayer for punitive damages) from the First Amended Complaint. (Motion to Strike, pp. 2–3.) Defendants argue that this is appropriate because Plaintiffs have allegedly (1) used outlandish and inflammatory claims and comments without any support, (2) used language through the First Amended Complaint which constitutes conclusions of law, and (3) used language that is irrelevant and unnecessary. (Id. at pp. 6:22–24, 7:6–17.)

Plaintiff disagrees, arguing among other things that Plaintiff has alleged facts, not conclusions. (Opposition to Motion to Strike, p. 3:1–2.)

Defendants reiterate their arguments in their Reply.

The Court disagrees with Defendants’ arguments. There is no basis for the Court to strike Plaintiffs’ First Amended Complaint in its entirety. Moreover, Defendants simply repeat here their same arguments from their Demurrer regarding the causes of action for breach of fiduciary duty and fraud; the Court is similarly unpersuaded. Finally, none of Plaintiffs’ allegations, or their prayer for punitive damages, are improper, legal conclusions, or irrelevant. Plaintiffs are entitled to make allegations. It will ultimately be their burden to prove that they are entitled to the relief they seek.

The Court DENIES Defendants’ Motion to Strike.

C. Conclusion

Defendants’ Motion to Strike is DENIED.