Judge: Michelle Williams Court, Case: 20STCV31461, Date: 2022-09-07 Tentative Ruling

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Case Number: 20STCV31461    Hearing Date: September 7, 2022    Dept: 74

20STCV31461           KATY SILVESTER vs THE RESERVE LOUNGE

Plaintiff’s Motion for Summary Adjudication of the Complaint’s (2) Second Cause of Action for Negligent Misrepresentation and (4) Fourth Cause of Action for Common Count

TENTATIVE RULING:  The motion is DENIED.

Background

On August 17, 2020, Plaintiff Kathy Silvester dba Under Raidar filed this action against Defendants The Reserve Lounge, LLC and Eric Cloutier. On October 23, 2020, Plaintiff filed the First Amended Complaint adding Devon Spierling as a Defendant and asserting causes of action for: (1) breach of contract; (2) fraud in the inducement; (3) negligent interference with prospective economic advantage; and (4) common count for money had and received.

On January 22, 2021, Plaintiff lodged a second amended complaint, without leave of Court, that was not filed. On January 26, 2021, the Court overruled Eric Cloutier’s demurrer to the First Amended Complaint.

On May 25, 2021 Defendant The Reserve Lounge filed its First Amended Cross-Complaint against Kathy Silvester asserting causes of action for: (1) unfair competition; and (2) unjust enrichment. On June 25, 2021, the Court sustained Silvester’s demurrer to the second cause of action without leave to amend and overruled the demurrer as to the first cause of action.

Motion

On June 27, 2022, Plaintiff filed this motion seeking summary adjudication of “[t]he Second Cause of Action for negligent misrepresentation against Defendants [and t]he Fourth Cause of Action for common count money had and received against Defendants” asserted in the operative complaint.

Opposition

In opposition, Defendants argue Plaintiff has not demonstrated a claim for negligent misrepresentation, the second cause of action is actually a claim based upon a false promise, Defendants did not make any misrepresentations or the promise alleged, and Plaintiff did not reasonably rely upon the promise alleged.

Defendants’ opposition lacks the required page numbers on the bottom of each page. (Cal. R. Ct., rule 2.109.)

Reply

Plaintiff’s reply consists of a four-page separated “Statement of Facts” and a fifteen-page “Points and Authorities,” bringing the reply memorandum to a total of nineteen pages. Pursuant to California Rules of Court, rule  3.1113(d), “[n]o reply or closing memorandum may exceed 10 pages.” The reply memorandum significantly exceeds the 10-page limitation.

Accordingly, the Court exercises its discretion to refuse to consider the reply papers in ruling on the motion. (Cal. R. Ct., rules 3.1113(g); 3.1300(d).)

Plaintiff’s reply also lacks the required page numbers on the bottom of each page. (Cal. R. Ct., rule 2.109.)

Motion for Summary Adjudication

Standard

The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial.¿(Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) In analyzing such motions, courts must apply a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent's claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.”¿(Hinesley¿v.¿Oakshade¿Town Center¿(2005) 135 Cal.App.4th 289, 294.)¿Thus, summary judgment or summary adjudication is granted when, after the Court’s consideration of the evidence set forth in the papers and all reasonable inferences accordingly, no triable issues of fact exist and the moving party is entitled to judgment as a matter of law.¿(Code Civ. Proc. § 437c(c);¿Villa v.¿McFarren¿(1995) 35 Cal.App.4th 733, 741.) ¿ 

¿ 

Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.”¿(Dore v. Arnold Worldwide, Inc.¿(2006) 39 Cal.4th 384, 389.) A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty. (Code Civ. Proc. § 437c(f)(1).)

“A plaintiff or cross-complainant has met his or her burden of showing that there is no defense to a cause of action if that party has proved each element of the cause of action entitling the party to judgment on the cause of action.” (Code Civ. Proc. § 437c(p)(1).)

Negligent Misrepresentation

Plaintiff’s motion repeatedly and exclusively refers to the second cause of action as one for negligent misrepresentation. However, the caption of the operative First Amended Complaint refers to the second cause of action as one for “fraud” and the heading for the second cause of action is stated as one for “Fraud in the Inducement.” (FAC at 6:17.) In the motion Plaintiff relies upon authority related to negligent misrepresentations. (Mot. at 4:16-25.)

As noted by Defendants in their opposition, the allegations in the second cause of action are based upon a false promise, not negligent misrepresentation. (FAC ¶ 30 (“the Defendant, RESERVE, . . . promised the Plaintiff that, in the event the Plaintiff arranged to have her client lease the Defendant, RESERVE, for its event and pay a non-refundable deposit and in the event the client cancelled, the Defendant, RESERVE, would return 50% of the deposit paid to it by the client to the Plaintiff in 60 days from any cancellation.”); FAC ¶ 31 (“At the time the Defendant, RESERVE, made its promise to the Plaintiff, the Defendant, RESERVE, had no intention of performing as agreed.”).) Defendants argue “[t]his alleged promise by Defendant is not a ‘fact’, but instead, if true which it isn’t, would be construed as a promise which might, if properly alleged by Plaintiff, form the basis of a claim for Inducement or False Promise which is an entirely different cause of action and not one that Plaintiff is requesting summary adjudication of.” (Opp. at 4:2-6.)

“Summary judgment cannot be granted on a ground not raised by the pleadings.”  (Bostrom v. County of San Bernardino (1995) 35 Cal.App.4th 1654, 1663 (internal citations omitted).) The second cause of action, based upon an alleged promise of what Defendants “would return,” (FAC ¶ 30), does not state a cause of action for negligent misrepresentation. (See Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 158 (“To be actionable, a negligent misrepresentation must ordinarily be as to past or existing material facts. . . . Here, the gist of both Tarmann’s fraud and negligent misrepresentation claims is that State Farm said it would pay for her repairs immediately upon their completion, it failed to do so, Tarmann could not complete the repairs or redeem her vehicle, and she lost the use of it until State Farm settled the case. The critical alleged misrepresentation as to immediate payment upon completion did not involve a past or existing material fact. Rather, it involved a promise to perform at some future time.”).) California does not recognize a claim for “negligent false promise.” (Id. at 159.)

Accordingly, as urged by Defendants, Plaintiff’s failure to seek summary adjudication of the second cause of action that is actually asserted in the operative complaint is fatal to the motion.

Moreover, “[a]n action based on a false promise is simply a type of intentional misrepresentation, i.e., actual fraud.” (Tarmann, supra, 2 Cal.App.4th at 159.) “To maintain an action for deceit based on a false promise, one must specifically allege and prove, among other things, that the promisor did not intend to perform at the time he or she made the promise and that it was intended to deceive or induce the promisee to do or not do a particular thing.” (Ibid.) Plaintiff’s motion is not supported by sufficient evidence of an intent not to perform. Plaintiff provides a series of emails that she contends evidence a promise to refund 50% of the deposit and Defendants’ failure to provide the refund. “[T]he intent element of promissory fraud entails more than proof of an unkept promise or mere failure of performance.” (Riverisland Cold Storage, Inc. v. Fresno-Madera Production Credit Assn. (2013) 55 Cal.4th 1169, 1183.) Plaintiff’s evidence, which attempts to support Defendants’ failure to perform the alleged promise, is not sufficient to meet Plaintiff’s burden.

As noted by Defendants, the email relied upon proposed a question to Plaintiff: “Is 50% of the 50% deposit within 60 days fair to you?” to which Plaintiff replied “Thank you Devon that’s extremely fair and acceptable to me.” (Silvester Decl. Ex. 1.) Defendants provide evidence that the final deposit was 30%, not 50%. (Cloutier Decl. Ex. A.) Accordingly, there is a triable issue of fact as to whether Defendants failed to perform a promise to refund 50% of a 50% deposit when only a 30% deposit was paid. (Behnke v. State Farm General Ins. Co. (2011) 196 Cal.App.4th 1443, 1453 (“The elements of promissory fraud (i.e., of fraud or deceit based on a promise made without any intention of performing it) are . . . nonperformance by the party making the promise.”).)

Defendants further provide evidence that Plaintiff was informed “any negotiations . . . were subject to approval by Eric Cloutier, The Reserve Lounge, LLC’s, manager and subject to confirmation in a written, signed agreement” and “we all understood that these emails negotiations were subject to confirmation by a written agreement.” (Spierling Decl. ¶¶ 6, 15.) The parties entered into a written agreement that the deposit was nonrefundable. (Cloutier Decl. Ex. A §§ 3-4.) Accordingly, there is also a triable issue of fact as to whether Plaintiff’s reliance upon the emails was justified. (Riverisland Cold Storage, supra,  55 Cal.4th at 1183 (“promissory fraud, like all forms of fraud, requires a showing of justifiable reliance on the defendant’s misrepresentation.”).)

Summary adjudication is DENIED as to the second cause of action.

Money Had and Received (Fourth Cause of Action)

“The essential elements of an action for money and/or goods had and received are (1) a statement of indebtedness of a certain sum, (2) the consideration made by the plaintiff, and (3) nonpayment of the debt.” (First Interstate Bank v. State of California (1987) 197 Cal.App.3d 627, 635.)

The fourth cause of action asserts a right to 50% of the deposit amount, or $32,610.59. (FAC ¶¶ 52-55.) As noted above and argued by Defendants, there are triable issues of fact as to whether any amount is owed because the final deposit was only 30% rather than 50%. The Court also notes Plaintiff, who does business as Under Raidar, signed a fully integrated agreement that stated the deposit was non-refundable. (Cloutier Decl. Ex. A § 3(a) (“Lessee shall pay the total Fees in consideration for the Rental of the Venue $65,221.18. This Initial Deposit shall secure the Event Date and is non-refundable and non-transferable after 60 days upon signing.”); Ex. A § 4 (“In the event that Lessee [Under Raidar and Healthcare Partners] cancels the Event for any reason following the execution of this Agreement . . .  RES shall be entitled to retain the Initial Deposit . . .”).) The individual Defendants also provide evidence they did not receive funds from Plaintiff. (Spierling Decl. ¶¶ 22-23; Cloutier Decl. ¶¶ 21-22.) There are triable issues of fact that preclude the entry of judgment in Plaintiff’s favor.

Summary adjudication is DENIED as to the fourth cause of action.