Judge Randolph M. Hammock, Case 20STCV17338 2023-03-15 Tentative Ruling

Judge: Randolph M. Hammock, Case: 20STCV17338, Date: 2023-03-15 Tentative Ruling

Plaintiff Anie Piliguin alleges she entered into a written consulting agreement with Defendants Quantum Management Company, LLC, Daniel Hernandez, and Afrack Vargas. Under the agreement, Defendants were to obtain necessary local licenses and permits for either a grow facility, extraction facility, or a dispensary; Plaintiff paid them a $50,000 retainer fee. Plaintiff alleges Defendants failed to perform under the agreement and refuse to return her retainer. Plaintiff brings causes of action against each Defendant for (1) breach of contract, (2) actual fraud, (3) constructive fraud, (4) intentional misrepresentation of fact, (5) promise made without intention to perform, (6) breach of implied covenant of good faith and fair dealing, (7) conversion, (8) accounting, (9) constructive trust, (10) and unfair business practices.

The rules applicable to demurrers also apply to motions for judgment on the pleadings. (County of Orange v. Association of Orange County Deputy Sheriffs (2011) 192 Cal.App.4th 21, 32.) The trial court must accept as true all material facts properly pleaded, but does not consider conclusions of law or fact, opinions, speculation, or allegations contrary to law or facts that are judicially noticed. (Stevenson Real Estate Services, Inc. v. CB Richard Ellis Real Estate Services, Inc. (2006) 138 Cal.App.4th 1215, 1219-20.) “A motion for judgment on the pleadings may be made at any time either prior to the trial or at the trial itself.” (Stoops v. Abbassi (2002) 100 Cal.App.4th 644, 650.)

Defendant moves for judgment on the pleadings “pursuant to Code of Civil Procedure section 438 and/or alternatively based upon common law as set forth in Stoops v. Abassi (2002) 100 Cal.App.4th 644, 65, Smiley v. Citibank N.A. (1995) 11 Cal.4th 138, 145, Cordova v. 21st Century Ins. Co. (2005) 129 Cal.App.4th 89, 109, and Tarin v. Lind (2020) 47 Cal.App.5th 395, 402.” (Notice 2: 5-8.) Notably, “[t]he common law ground for a motion for judgment on the pleadings is identical to the statutory ground: “The complaint does not state facts sufficient to constitute a cause of action.” (Korchemny v. Piterman (2021) 68 Cal. App. 5th 1032, 1055.) Therefore, a court may consider an MJOP brought under section 438 as one brought under common law, and vice versa. (Id.)

While Plaintiff objects to the timelines of the motion, “[a] motion for judgment on the pleadings may be made at any time either prior to the trial or at the trial itself.” (Stoops v. Abbassi (2002) 100 Cal.App.4th 644, 650.) As the trial date in this matter has been vacated, the motion is timely and will be considered.

There are three Defendants in this action: individuals Daniel Hernandez (“Hernandez”) and Afrack Vargas (“Vargas”), and the entity Quantum Management Company, LLC (“Quantum”). The individuals are each alleged to have been “the CEO, a managing member, owner, officer, director and shareholder” of Quantum. (Compl. ¶¶ 4, 5.) Plaintiff further alleges that all Defendants were engaged in “a joint venture, partnership and common enterprise, and acting within the course and scope of, and in pursuance of said joint venture, partnership and common enterprise;” that all Defendants “condoned and/or otherwise ratified each and every one of the acts and/or omissions alleged”; and that each Defendant “aided and abetted the acts and omissions of each and every one of the other Defendants (Id. ¶¶ 9, 11, 12.)

Each cause of action in the Complaint is based on the same underlying facts. Plaintiff alleges she entered into a Quantum Consulting Agreement (“consulting agreement”) with Defendants on or about May 11, 2017, under which “Defendants were to obtain necessary local licenses and permits for either a grow facility, extraction facility or a dispensary.” (Id. ¶¶ 15, 16.) For her part, Plaintiff was to “deposit a fifty-thousand dollar ($50,000.00) retainer with Defendants to be held in trust with a term period of twelve (12) months when if no City issued a required license then the funds were to be returned to Plaintiff.” (Id. ¶ 17.) Plaintiff alleges she made the required deposit, but Defendants “thereafter did nothing to perform under the consulting agreement.” (Id. ¶ 19.) Defendants refuse to return Plaintiff’s deposit. (Id. ¶¶ 22, 23.)

Defendant Vargas contends the first, third, sixth, seventh, eighth, ninth, and tenth causes of action fail to state facts sufficient to constitute legally cognizable claims against him. As the defects in the Complaint here are common to all causes of action, the court addresses them together.

Defendant Vargas first argues the breach of contract cause of action fails against him because he is not a party to the contract. The basis for the claim is the written consulting agreement, attached to the Complaint as Exhibit 1. That Agreement was “made by and between [Plaintiff] and Quantum Management LLC.” (See Compl., Exh. 1.) The Agreement is signed by Plaintiff on one hand, and by Defendant Daniel Hernandez, Quantum’s President, on the other. (Id.) It does not appear that Defendant Vargas signed or is otherwise named in the Agreement. Likewise, Plaintiff’s receipt showing her paid funds lists only Defendant Quantum Management, but does not list Defendant Vargas.

Indeed, the Complaint largely fails to state any specific facts against the moving Defendant. The closest Plaintiff gets to alleging facts against Defendant Vargas are the conclusory allegations that all named Defendants were “the CEO, a managing member, owner, officer, director and shareholder” of Quantum; that all Defendants were engaged in “a joint venture, partnership and common enterprise, and acting within the course and scope of, and in pursuance of said joint venture, partnership and common enterprise;” that all Defendants “condoned and/or otherwise ratified each and every one of the acts and/or omissions alleged”; and that each Defendant “aided and abetted the acts and omissions of each and every one of the other Defendants.” (Id. ¶¶ 4, 5, 9, 11, 12.) Notably, the pleading does not allege that Quantum was the alter ego of the Defendants.

In opposition, Plaintiff asserts that her Complaint “does state facts sufficient to constitute various causes of action against Defendant VARGAS, especially the constructive fraud and conversion causes of action to name a few.” (Opp. 3: 2-4.) Plaintiff also improperly attempts to raise new evidence not alleged in the pleading, such as her declaration submitted with her motion to amend judgment. She otherwise mounts no further defense to the motion. Instead, she asserts the Complaint “is capable of amendment” and that “[s]ignificant amounts of additional facts can be easily pled against Defendant VARGAS should the need arise.” (Opp. 3: 4-5.)

Absent some facts alleging Defendant Vargas was a party to the contract, Plaintiff has failed to plead a breach of contract between her and said Defendant. Plaintiff’s unsupported allegations of a “joint venture,” ratification, or aiding and abetting alone are insufficient to state a claim against the moving Defendant. While the “trial court must accept as true all material facts properly pleaded,” it “does not consider conclusions of law or fact, opinions, speculation, or allegations contrary to law or facts that are judicially noticed.” (Stevenson Real Estate Services, Inc. v. CB Richard Ellis Real Estate Services, Inc. (2006) 138 Cal.App.4th 1215, 1219-20.) The first cause of action therefore fails.

For the same reasons, the remaining causes of action—all largely based on the existence of the contract involving Defendant Vargas—also fail. As currently pled, there are no facts alleged against Defendant Vargas to support the causes of action for (3) constructive fraud, (6) breach of the implied covenant of good faith and fair dealing, (7) conversion, (8) accounting, (9) constructive trust, or (10) unfair business practices. At most, the pleading contains allegations directed toward only the other Defendants.

Accordingly, Defendant Vargas’s MJOP is GRANTED in full, with 30 days leave to amend. Plaintiff must amend to include specific allegations against Defendant Vargas demonstrating Defendant’s involvement in the underlying transaction, as to each of these causes of action, consistent with this ruling.

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept49@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.