Judge: Robert B. Broadbelt, Case: 23STCV13063, Date: 2024-06-14 Tentative Ruling

Case Number: 23STCV13063    Hearing Date: June 14, 2024    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTIES:              Defendants B.A.C.C.O. Mechanical Inc., Jeffrey S. McGowan, and Alex Barrera

RESPONDING PARTY:       Plaintiff Traditional Trio Holdings LLC

Demurrer to Complaint

The court considered the moving and opposition papers filed in connection with this demurrer.  No reply papers were filed.  

DISCUSSION

Defendants B.A.C.C.O. Mechanical Inc. (“B.A.C.C.O.”), Jeffrey S. McGowan (“McGowan”), and Alex Barrera (“Barrera”) (collectively, “Defendants”) move the court for an order sustaining their demurrer to the third cause of action for promissory fraud alleged in the Complaint filed by plaintiff Traditional Trio Holdings LLC (“Plaintiff”) on June 7, 2023.

The court overrules Defendants’ demurrer to the third cause of action for promissory fraud because it states facts sufficient to constitute a cause of action.  (Code Civ. Proc., § 430.10, subd. (e).)

First, the court finds that this cause of action is not barred by the economic loss rule since (1) the economic loss rule bars claims when they arise from, or are not independent of, an underlying contract, and (2) this cause of action is based on McGowan and Barrera’s affirmative, false promises of performance and therefore is independent of the alleged breach of contract.  (Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 923 [tort claims for monetary losses between contractual parties are barred by the economic loss rule “when they arise from – or are not independent of – the parties’ underlying contracts”]; Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 991 [holding that “the economic loss rule does not bar [the] fraud and intentional misrepresentation claims because they were independent of [the] breach of contract”].)

Second, the court finds that Plaintiff has alleged, with the requisite particularity, facts establishing that (1) in or around early 2022, defendants McGowan and Barrera made a promise to Plaintiff’s representatives regarding a material fact without any intention of performing it, i.e., that B.A.C.C.O. would be able to complete the work on the property required (Compl., ¶¶ 18, 51), (2) Defendants did not intend to perform the promise at the time that the promise was made (Compl., ¶ 52 [“The representations made by Defendants were false at the time they were made”]), (3) Defendants intended to deceive Plaintiff and to induce it to enter into the contract and make installation payments to Defendants (Compl., ¶ 52), (4) Plaintiff reasonably relied on the representations by entering into the contract with Defendants and making installation payments thereunder (Compl., ¶ 53), (5) Defendants did not perform pursuant to the terms of the parties’ agreement (Compl., ¶ 29), and (6) Plaintiff has been damaged because it has suffered substantial losses in revenues and profits and will be required to incur additional costs and expenses as a result of Defendants’ wrongful conduct (Compl., ¶ 56).  (Missakian v. Amusement Industry, Inc. (2021) 69 Cal.App.5th 630, 654 [elements of promissory fraud]; Rossberg v. Bank of America, N.A. (2013) 219 Cal.App.4th 1481, 1498 [“each element of a promissory fraud claim must be alleged with particularity”]; Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1060 [“the falsity of that promise is sufficiently pled with a general allegation the promise was made without an intention of performance”].)

ORDER

            The court overrules defendants B.A.C.C.O. Mechanical Inc., Jeffrey S. McGowan, and Alex Barrera’s demurrer to plaintiff Traditional Trio Holdings LLC’s third cause of action for promissory fraud.

            The court orders defendants B.A.C.C.O. Mechanical Inc., Jeffrey S. McGowan, and Alex Barrera to file an answer to plaintiff Traditional Trio Holdings LLC’s Complaint within 10 days of the date of this ruling.

            The court orders plaintiff Traditional Trio Holdings LLC to give notice of this ruling.

IT IS SO ORDERED.

DATED:  June 14, 2024

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court