Judge: Randall J. Sherman, Case: 2021-01201461, Date: 2022-08-19 Tentative Ruling

Cross-Defendant UMB Bank, N.A.’s Demurrer to the First Amended Cross-Complaint of Cross-Complainant Synrgo, Inc. is overruled as to the 1st-5th and 8th-9th causes of action, and is sustained with 15 days leave to amend as to the 6th-7th and 10th causes of action.  UMB’s Request for Judicial Notice is denied.

The first cause of action for breach of contract adequately alleges the elements of breach, performance and causation.  To the extent that UMB asserts it was excused from performance due to Synrgo’s alleged breach, that is a factual dispute not to be decided at the demurrer stage.  The second cause of action for breach of the implied covenant of good faith and fair dealing is not duplicative of the breach of contract cause of action, and Synrgo has alleged sufficient facts to state this cause of action.  The implied covenants of providing notice and opportunity to cure do not contradict the express terms of the agreement.  As to the third cause of action for breach of fiduciary duty, the legal question of whether a fiduciary relationship exists between the two parties depends on disputed factual issues and may not be decided at the demurrer stage.  Synrgo has pled with adequate particularity the elements of its fourth and fifth causes of action for fraudulent inducement and fraudulent concealment.  The economic loss doctrine does not necessarily apply, since the alleged wrongful conduct is based on acts and injury outside of the contract terms.

In its sixth cause of action for tortious interference with contractual relations, Synrgo has failed to allege adequate facts showing that UMB’s conduct was done with the intent to interfere with the contracts between Synrgo and its customers and the counties.  In its seventh cause of action for tortious interference with prospective economic advantage, Synrgo has not adequately pled facts showing that the conduct alleged constitutes independently wrongful or unlawful conduct.  Whether California’s usury laws apply to the eighth cause of action for violation of California’s usury laws, and whether waiver of this cause of action is valid, depend on disputed factual issues that may not be decided at the demurrer stage.  Synrgo has alleged adequate facts to state its ninth cause of action for violations of the UCC.  Finally, Synrgo has not shown that its tenth cause of action for equitable subordination is a cognizable cause of action under either California or Minnesota law.

A Case Management Conference is also set for today and will go forward.

UMB is ordered to give notice unless notice is waived.