Judge Michael P. Linfield, Case Number: 23STCV29070, Date: 2024-04-12 Tentative Ruling

Judge: Michael P. Linfield, Case: 23STCV29070, Date: 2024-04-12 Tentative Ruling

Case Number: 23STCV29070 Hearing Date: April 12, 2024 Dept: 34

SUBJECT: Demurrer

Moving Party: Defendant Southern California Edison Company

Resp. Party: Plaintiff Pacific Weed Control, Inc.

SUBJECT: Motion to Strike

Moving Party: Defendant Southern California Edison Company

Resp. Party: Plaintiff Pacific Weed Control, Inc.

The Demurrer is OVERRULED.

The Motion to Strike is DENIED.

BACKGROUND:

On November 29, 2023, Plaintiff Pacific Weed Control, Inc. filed its Complaint against Defendant Southern California Edison Company on causes of action arising from the Parties’ contract and contractual relations.

On March 8, 2024, Defendant filed its Demurrer and its Motion to Strike. Defendant concurrently filed: (1) Request for Judicial Notice; (2) Declaration of Julia A. Mosel (in support of the Demurrer); (3) Declaration of Julia A. Mosel (in support of the Motion to Strike); (4) Proposed Order (for Demurrer); and (5) Proposed Order (for Motion to Strike).

On March 29, 2024, Plaintiff filed its Oppositions to the Demurrer and the Motion to Strike. Plaintiff concurrently filed its Objections to the Request for Judicial Notice.

On April 5, 2024, Defendant filed its Replies in support of the Demurrer and Motion to Strike. Defendant concurrently filed: (1) Response to Objections; and (2) Custodian of Records Declaration.

ANALYSIS:

I. Request for Judicial Notice

Defendant requests that the Court take judicial notice of various emails.

The Court GRANTS Defendant’s Request for Judicial Notice of Exhibits A, B and C, and DENIES Defendant’s Request for Judicial Notice of Exhibit D.

II. Demurrer

A. Legal Standard

“The party against whom a complaint or cross-complaint has been filed may object, by demurrer or answer as provided in Section 430.30, to the pleading on any one or more of” various grounds listed in statute. (Code Civ. Proc., § 430.10.)

“When any ground for objection to a complaint, cross-complaint, or answer appears on the face thereof, or from any matter of which the court is required to or may take judicial notice, the objection on that ground may be taken by a demurrer to the pleading.” (Code Civ. Proc., § 430.30, subd. (a).)

“A demurrer to a complaint or cross-complaint may be taken to the whole complaint or cross-complaint or to any of the causes of action stated therein.” (Code Civ. Proc., § 430.50, subd. (a).)

“In reviewing the sufficiency of a complaint against a general demurrer, we are guided by long-settled rules. We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. We also consider matters which may be judicially noticed. Further, we 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, citations and internal quotation marks omitted.)

B. Discussion

Defendant demurs to the third through fifth causes of action in the Complaint.

1. Intentional Misrepresentation

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 plaintiff 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

Defendant argues that the third cause of action for intentional misrepresentation fails because Plaintiff did not plead with particularity facts as to each element of the cause of action. (Demurrer, p. 4:24–25.)

The Court disagrees with this argument.

Among other things, Plaintiff alleges: (1) that Defendant’s contract manager made multiple representations to Plaintiff, including representations about Plaintiff’s level of effort, whether a unit rate would require an increase, and whether Plaintiff could recover increased costs incurred; (2) that these representations were false; (3) that at the time Defendant’s contract manager made these representations, the contract manager knew the representations were false or made them recklessly without any regard for their truth; (4) based on the Parties’ history with each other, the contract manager and others within Defendant had sufficient information to know that additional effort would be involved to incorporate a project into the workflow; (5) that the contract manager intended that Plaintiff would rely on these representations; (6) that Plaintiff reasonably relied on the representations; and (7) that Plaintiff was harmed by the misrepresentations. (Complaint, ¶¶ 52–57.)

These allegations meet the heightened pleading standard for intentional misrepresentation, and they also sufficiently plead each of the elements of a cause of action for intentional misrepresentation.

“The courts should not ... seek to absolve the defendant from liability on highly technical requirements of form in pleading. Pleading facts in ordinary and concise language is as permissible in fraud cases as in any others, and liberal construction of the pleading is as much a duty of the court in these as in other cases.” (Appollo Capital Fund, LLC v. Roth Capital Partners, LLC (2007) 158 Cal.App.4th 226, 242.)

The Court OVERRULES the Demurrer to the third cause of action for intentional misrepresentation.

2. Fraudulent Concealment

a. Legal Standard

b. Discussion

Defendant demurs to the fourth cause of action for fraudulent concealment, arguing: (1) that Plaintiff does not plead facts showing Defendant had a duty to disclose; (2) that Plaintiff does not allege with specificity what facts were concealed; and (3) that the alleged facts negate any justifiable reliance. (Demurrer, pp. 12:7, 13:11, 14:4, 14:9–10.)

The Court disagrees with these arguments.

First, the Court is not aware of a legal requirement that Parties’ must have specific duties (e.g., a fiduciary duty) toward each other for causes of action of fraudulent concealment. Rather, the “duty” to not conceal facts arises when a party with knowledge of facts knows that those facts are untrue and conceals them anyway to induce reliance. When that party actually induces justifiable reliance and causes harm, that is textbook fraud.

Second, Plaintiff did allege with specificity the facts that were concealed, including: (1) that additional work would be necessitated; and (2) that there would be costs increases for the work. (Complaint, ¶ 63.)

Finally, Plaintiff alleged that it would have acted differently had it known about the concealed facts, that it would not have agreed upon the unit rate, or that it would not have entered the contract at all. (Complaint, ¶ 64.) Whether or not this reliance was actually reasonable involves a question of fact that is not suitable for resolution on a demurrer.

The Court OVERRULES the Demurrer to the fourth cause of action for fraudulent concealment.

3. Negligent Misrepresentation

a. Legal Standard

The elements of a cause of action for negligent misrepresentation include “[m]isrepresentation of a past or existing material fact, without reasonable ground for believing it to be true, and with intent to induce another’s reliance on the fact misrepresented; ignorance of the truth and justifiable reliance on the misrepresentation by the party to whom it was directed; and resulting damage.” (Hydro-Mill Co., Inc. v. Hayward, Tilton & Rolapp Ins. Associates, Inc. (2004) 115 Cal.App.4th 1145, 1154, quotation marks omitted.)

b. Discussion

Defendant demurs to the fifth cause of action for negligent misrepresentation, arguing that it is a restatement of the fraud claim and fails for the same reasons.

The Court disagrees with Defendant’s argument.

These causes of action are not simple restatements of each other. Even if they were, “it is a waste of time and judicial resources to entertain a motion challenging part of a pleading on the sole ground of repetitiveness. (See Civ.Code, § 3537 [“Superfluity does not vitiate”].) This is the sort of defect that, if it justifies any judicial intervention at all, is ordinarily dealt with most economically at trial, or on a dispositive motion such as summary judgment.” (Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 890.)

Regardless, the Court overruled the Demurrer to the third and fourth causes of action. The Demurrer to the fifth cause of action must be overruled for the same reasons discussed for those causes of action.

The Court OVERRULES the Demurrer to the fifth cause of action for negligent misrepresentation.

C. Conclusion

The Demurrer is OVERRULED.

III. 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, but this time limitation shall not apply to motions specified in subdivision (e).” (Code Civ. Proc., § 435, subd. (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 inserted 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.”

(Code Civ. Proc., § 436.)

“The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.” (Code Civ. Proc., § 437, subd. (a).)

“A notice of motion to strike a portion of a pleading must 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. Specifications in a notice must be numbered consecutively.” (Cal. Rules of Court, rule 3.1322(a).)

B. Discussion

Defendant moves the Court to strike various allegations from the Complaint, arguing: (1) that the Complaint does not allege any facts showing malice or oppression; (2) that the Complaint does not state any causes of action for fraud; (3) that Plaintiff did not allege any wrongful conduct on the part of Defendant’s officers, directors, or managing agents; and (4) that the contract between the Parties’ precludes allegations that Defendant deprive Plaintiff of lost revenue due to underutilization of Plaintiff’s services. (Motion to Strike, pp. 3:24–25, 5:3, 13:6–7, 14:16–17.)

The Court disagrees with these arguments.

Allegations of fraud (including intentional misrepresentation and fraudulent concealment) do not depend on what exists in a contract when the allegations are that the fraud induced the contract. Such allegations are made here.

Furthermore, Plaintiff has sufficiently pleaded causes of action for fraud. It will ultimately be Plaintiff’s burden to prove that it is entitled to the relief that it seeks.

C. Conclusion

The Motion to Strike is DENIED.