Judge: Robert B. Broadbelt, Case: 22STCV32207, Date: 2024-11-26 Tentative Ruling

Case Number: 22STCV32207    Hearing Date: November 26, 2024    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTIES:              Defendants Sergio Moreno Morales, a/k/a Sergio Moreno, Michael Yuan Lee, a/k/a Michael Yuan Li, ASE Construction, Inc., Fremont Cabinet Imports, Inc., Francisco Puertas, and Sandy Segovia          

RESPONDING PARTIES:    Plaintiffs Alan M. Bagamaspad and Elenita A. Bagamaspad, individually and as trustees of the Bagamaspad Revocable Living Trust

Demurrer to Second Amended Complaint

The court considered the amended moving, opposition, and reply papers filed in connection with this demurrer.

DISCUSSION

Plaintiffs Alan M. Bagamaspad and Elenita A. Bagamaspad, individually and as trustees of the Bagamaspad Revocable Living Trust (“Plaintiffs”), filed the operative Second Amended Complaint in this action on May 14, 2024, against defendants Sergio Moreno Morales, a/k/a Sergio Moreno, Michael Yuan Lee, a/k/a Michael Yuan Li, ASE Construction, Inc., Fremont Cabinet Imports, Inc., Ten Advisors, Inc., Francisco Puertas, and Sandy Segovia.        

Defendants Sergio Moreno Morales, a/k/a Sergio Moreno (“Morales”), Michael Yuan Lee, a/k/a Michael Yuan Li (“Lee”), ASE Construction, Inc. (“ASE”), Fremont Cabinet Imports, Inc., Francisco Puertas, and Sandy Segovia (“Segovia”) (collectively, “Defendants”) now move the court for an order sustaining their demurrer to Plaintiffs’ sixth, seventh, and eighth causes of action.

The court overrules defendant Morales’s demurrer to the sixth cause of action for intentional misrepresentation because (1) the court has already overruled his demurrer to this cause of action, and (2) the court again finds that it states facts sufficient to constitute a cause of action against defendant Morales because Plaintiffs have alleged that (i) in 2019, Morales represented himself to Plaintiffs as a licensed contractor (SAC ¶¶ 25, 100, 102), (ii) Morales proposed a business agreement pursuant to which Plaintiffs and Morales would create a construction company, Morales would transfer his real properties to ASE, and Morales would purchase construction equipment to be used for its business operations (SAC ¶¶ 26-27, 104),  (iii) those representations were false (SAC ¶ 75, subd. (iii), 106), Morales knew they were false when he made them (SAC ¶ 108), and Morales intended that Plaintiffs rely on the representations to induce Plaintiffs to invest funds in excess of $1,000,000 (SAC ¶ 109), (iv) Plaintiffs reasonably relied on these representations (SAC ¶¶ 103, 106), and (v) Plaintiffs were harmed as a result of their reliance on Morales’s false representations (SAC ¶ 110).  (Code Civ. Proc., § 430.10, subd. (e); April 24, 2024 Order, pp. 2:5-19, 5:5-6; Lauckhart v. El Macero Homeowners Assn. (2023) 92 Cal.App.5th 889, 903 [elements of intentional misrepresentation].)

The court overrules defendant Segovia’s demurrer to the sixth cause of action for intentional misrepresentation because it states facts sufficient to constitute a cause of action since Plaintiffs have alleged that (1) Segovia made misrepresentations to Plaintiffs from 2019 to 2022, including (i) that information, resources, and the capital contributions were for the benefit of the business agreement and that Morales would transfer his real properties to ASE, would purchase construction equipment to be used for its business operations, and would deposit a sum of money into ASE’s business account (SAC ¶¶ 35, 104), and (ii) that Morales was a licensed contractor (SAC ¶¶ 50, 100), (2) Segovia knew the representations were false and intended to mislead Plaintiffs by making the representations regarding the investment agreement (SAC ¶¶ 106-108), (3) Plaintiffs reasonably relied on Segovia’s representations by moving forward in their dealings with Morales (SAC ¶¶ 50, 103, 109), and (4) Plaintiffs have suffered harm as a result of Segovia’s misrepresentations (SAC ¶ 110).  (Code Civ. Proc., § 430.10, subd. (e); Lauckhart, supra, 92 Cal.App.5th at p. 903 [elements of intentional misrepresentation].) 

The court overrules defendants Morales and Segovia’s demurrer to the seventh cause of action for negligent misrepresentation (1) because, as to defendant Morales, (i) the court already overruled his demurrer to this cause of action, and (ii) the court again finds that it states facts sufficient to constitute a cause of action against Morales for the same reasons set forth in connection with the court’s ruling on the sixth cause of action, and (2) because, as to defendant Segovia, it states facts sufficient to constitute a cause of action for the same reasons set forth in connection with the court’s ruling on the sixth cause of action.  (Code Civ. Proc., § 430.10, subd. (e); April 24, 2024 Order, pp. 3:9-15, 5:5-6; Borman v. Brown (2021) 59 Cal.App.5th 1048, 1060 [elements of negligent misrepresentation].)

The court overrules defendant Morales’s demurrer to the eighth cause of action for conversion because (1) the court already overruled Morales’s demurrer to this cause of action, and (2) the court again finds that it states facts sufficient to constitute a cause of action against Morales (SAC ¶¶ 127, 129, 130).  (Code Civ. Proc., § 430.10, subd. (e); April 24, 2024 Order, pp. 3:23-28, 5:5-6; Foster v. Sexton (2021) 61 Cal.App.5th 998, 1020-1021 [elements of conversion].)

The court overrules defendant Lee’s demurrer to the eighth cause of action for conversion because it states facts sufficient to constitute a cause of action since Plaintiffs have alleged that (1) Plaintiffs deposited funds of at least $164,271.12 into ASE’s bank account for its operations (SAC ¶ 128), and (2) defendant Lee converted those funds (SAC ¶ 128) by using those funds for his personal benefit.  (Code Civ. Proc., § 430.10, subd. (e); Foster, supra, 61 Cal.App.5th at pp. 1020-1021 [elements of conversion].)  The court acknowledges, as Defendants have argued, that generalized claims for money are not actionable as conversion.  (Sanowicz v. Bacal (2015) 234 Cal.App.4th 1027, 1042.)  However, money can be the subject of a conversion claim if there is a specific, identifiable sum involved.  (Ibid.)  Here, as set forth above, Plaintiffs have alleged the conversion of a specific, identifiable sum in the amount of $162,271.12, such that it may support a cause of action for conversion against defendant Lee.  (Ibid.; SAC ¶ 128.)

            The court notes that (1) the eighth cause of action is also alleged against defendant ASE, and (2) defendant ASE is identified to be a moving party in connection with this demurrer.  However, Defendants’ moving papers appear to address the sufficiency of this cause of action as alleged against defendants Morales and Lee only.  (SAC p. 24:1-3 [identifying ASE as defendant to this cause of action]; Dem., pp. 2:1-7 [identifying ASE as a moving party], 9:16-17 [“Plaintiffs Allege to Fail Conversion Against Lee & Morales”].)  Thus, Defendants have not shown that this cause of action does not state facts sufficient to constitute a cause of action for conversion against defendant ASE.

ORDER

The court overrules defendants Sergio Moreno Morales, a/k/a Sergio Moreno, Michael Yuan Lee, a/k/a Michael Yuan Li, ASE Construction, Inc., Fremont Cabinet Imports, Inc., Francisco Puertas, and Sandy Segovia’s demurrer to the Second Amended Complaint.

The court orders defendants Sergio Moreno Morales, a/k/a Sergio Moreno, Michael Yuan Lee, a/k/a Michael Yuan Li, ASE Construction, Inc., Fremont Cabinet Imports, Inc., Francisco Puertas, and Sandy Segovia to file an answer to plaintiffs Alan M. Bagamaspad and Elenita A. Bagamaspad, individually and as trustees of the Bagamaspad Revocable Living Trust’s Second Amended Complaint within 10 days of the date of this order.

            The court orders plaintiffs Alan M. Bagamaspad and Elenita A. Bagamaspad, individually and as trustees of the Bagamaspad Revocable Living Trust to give notice of this ruling.

IT IS SO ORDERED.

DATED:  November 26, 2024

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court