Judge: Michael Shultz, Case: 23CMCV00906, Date: 2023-10-05 Tentative Ruling
Case Number: 23CMCV00906 Hearing Date: January 23, 2024 Dept: A
23CMCV00906
Ronda Joyce, et al v. Bonnie Renee Joyce
Thursday,
October 5
[TENTATIVE] ORDER
SUSTAINNG DEMURRER TO THE FIRST AMENDED COMPLAINT WITHOUT LEAVE TO AMEND
On October 5, 2023, the Court sustained
demurrer by Defendants 9GP Industries, LLC (“9GP”) and Alvaro Zavala (“Zavala”)
(collectively, “the Buyers”) to the complaint with leave to amend the claims
for fraud, conspiracy, and for unfair competition, essentially because Plaintiffs
did not allege actionable facts against the Buyers.
Plaintiffs filed their first amended
complaint on October 25, 2023, asserting the same claims for unfair
competition, fraud, and conspiracy to commit fraud. Plaintiffs allege that they
and Defendant, Bonnie Joyce (“Bonnie”), are siblings and were co-trustees and
co-beneficiaries of their mother’s trust, the Joyce Living Trust U.D.T 1/1/2002
(the “Trust”). Plaintiffs allege Bonnie conspired with a realtor and the Buyers
to deceive Plaintiffs by selling the property for significantly less than the
property was worth without consulting Plaintiffs.
The Buyers argue that all claims remain
insufficiently alleged against them. Plaintiffs argue that the fraud claim is
not alleged against the Buyers, and the remaining claims are adequately stated.
The Buyers argue in reply that the alter
ego allegations and the conspiracy claims remain defective.
The bases for demurrer are limited by
statute and may be sustained for reasons including failure to state facts
sufficient to state a cause of action and uncertainty. (Code
Civ. Proc., § 430.10.) A demurrer “tests the sufficiency
of a complaint as a matter of law and raises only questions of law.” (Schmidt
v. Foundation Health (1995) 35 Cal.App.4th 1702, 1706.)
The court must assume the truth of (1) the properly pleaded factual
allegations; (2) facts that can be reasonably inferred from those expressly
pleaded; and (3) judicially noticed matters. (Blank
v. Kirwan (1985) 39 Cal.3d 311, 318.) The court may not
consider contentions, deductions, or conclusions of fact or law. (Moore
v. Conliffe (1994) 7 Cal.4th 634, 638.)
As a preliminary matter, Plaintiffs
amended the fraud claim to exclude the Buyers as Defendants. The FAC renders
Defendants’ contentions moot.
A.
Demurrer to the third cause of action for
conspiracy to commit fraud is SUSTAINED.
Civil
conspiracy is a legal doctrine that imposes liability on persons who did not
actually commit a tort but acted in concert with another tortfeasor. To support
this claim, Plaintiffs must allege "1) the formation and operation of the
conspiracy, (2) wrongful conduct in furtherance of the conspiracy, and (3)
damages arising from the wrongful conduct.” (AREI II Cases (2013) 216
Cal.App.4th 1004, 1022.) A conspiracy “must be activated by the
commission of an actual tort." (Applied Equipment Corp. v. Litton
Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 511.) Where
fraud is alleged to be the object of the conspiracy, the claim must be pleaded
with particularity. " (Favila v. Katten Muchin Rosenman LLP (2010) 188
Cal.App.4th 189, 211.)
Plaintiffs
allege that Bonnie told the Buyers that Bonnie had represented to Plaintiffs
that they would each have a vote concerning disposition of the asset and would
equally share in the profits from the sale. (FAC ¶ 43.) The addition of this
sentence does not cure the defect. Plaintiffs must allege that the Buyers knew
of Bonnie’s alleged intent to sell the property quickly for a lower price
notwithstanding her representations to Plaintiffs. The allegations must “elaborate
on the mutual understanding arrived at by defendants,” that defendants acted
jointly, and “according to a preconceived plan." (Schessler v. Keck (1954) 125
Cal.App.2d 827, 833.)
The
existence of a conspiracy is often inferred and “circumstantially derived from
the character of the acts done, the relations of the parties and other facts
and circumstances suggestive of concerted action." (Schessler at 833.) Plaintiffs do not allege facts that would allow
an inference that Buyers had a mutual understanding with Bonnie to sell the
property for less than its value. A “naked” allegation of conspiracy is not
enough. (Schessler at 833.)
B. Demurrer
to the first cause of action for unfair competition is SUSTAINED.
As defined by statute, “unfair competition”
includes “any unlawful, unfair or fraudulent business act or practice.” (Bus.
& Prof. Code, § 17200 “UCL”). Its
purpose is to protect both consumers and competitors by promoting fair
competition in commercial markets for goods and services.” (Gutierrez
v. Carmax Auto Superstores California (2018) 19
Cal.App.5th 1234, 1265.)
The UCL is construed broadly to include "any
unlawful, unfair or fraudulent business act or practice. (§ 17200.) Its
coverage is ‘sweeping, embracing’ anything that can properly be called a
business practice and that at the same time is forbidden by law." (Cel-Tech
Communications, Inc. v. Los Angeles Cellular Telephone
Co. (1999) 20 Cal.4th 163, 180.)
Because the practices embraced by the statute is in the disjunctive, “a
practice may be deemed unfair even if not specifically proscribed by some other
law.” (Cel-Tech at
181).
Plaintiffs
have not alleged that the Buyer defendants engaged in an underlying unlawful,
unfair, or fraudulent activity. The adequacy of the alter ego allegations
contending that Defendant 9GP is an alter ego of Zavala does not change the
outcome; Plaintiffs have not alleged facts establishing that the Buyers engaged
in a conspiracy with Bonnie or other wrongful conduct.
Based on the foregoing, demurrer to the FAC
is SUSTAINED. The Court previously gave Plaintiffs an opportunity to adequately
allege their claims, however, the FAC remains defective as alleged against the
Buyers. Accordingly, leave to amend is DENIED.