Judge: Robert B. Broadbelt, Case: 24STCV05892, Date: 2025-03-14 Tentative Ruling

Case Number: 24STCV05892    Hearing Date: March 14, 2025    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTIES:              Defendants Bedford Surgical Group, Inc., and Reconstructive Surgery Specialists, LLC      

RESPONDING PARTY:       Plaintiff Corcoran Administrators, Inc.

Motion for Judgment on the Pleadings

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

DISCUSSION

Defendants Bedford Surgical Group, Inc. (“Bedford”) and Reconstructive Surgery Specialists, LLC (“Reconstructive Surgery”) (collectively, “Defendants”) move the court for an order granting their motion for judgment on the pleadings as to the first through fourth causes of action alleged in the Complaint filed by plaintiff Corcoran Administrators, Inc. (“Plaintiff”).

The court denies Defendants’ motion for judgment on the pleadings as to the first cause of action for conversion because it states facts sufficient to constitute a cause of action since Plaintiff has alleged facts establishing (1) Plaintiff’s right to possession of the specific, identifiable sums of money ($114,636.21 as to defendant Reconstructive Surgery and $112,237.38 as to defendant Bedford), (2) Defendants’ disposition of the property in a manner inconsistent with Plaintiff’s property rights, based on Defendants’ wrongfully retaining those amounts of money, and (3) resulting damages in the amounts of $114,636.21 (as to Reconstructive Surgery) and $112,237.38 (as to Bedford).  (Code Civ. Proc., § 438, subd. (c)(1)(B)(ii); Voris v. Lampert (2017) 7 Cal.5th 1141, 1150 [elements of conversion]; Compl., ¶¶ 14-15, 6 [“Despite multiple attempts by Plaintiff to have Defendants pay the money back, Defendants have failed to do so”].)

The court notes that Defendants have argued that conversion is not actionable for the overcharging of money, relying primarily on McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457.  However, McKell did not concern circumstances similar to those at issue here, where a plaintiff has overpaid the defendant amounts of money to which the defendant was not entitled and that the defendant has refused to return.  (Compl., ¶¶ 14-15, 6.)  Instead, the McKell plaintiffs based their cause of action for conversion on the theory that the defendant overcharged them for underwriting, tax services, and wire transfer fees in connection with home loans by charging the plaintiffs more for those services than the defendants paid the service providers.  (McKell, supra, 142 Cal.App.4th at pp. 1465, 1467.)  On those facts, and in light of the fact that plaintiffs did not allege that the defendants were holding payments on behalf of another, the McKell Court concluded that a cause of action for conversion may not be based on an overcharge.  (Id. at p. 1491-1492.)  Thus, the court finds that Defendants have not shown that the reasoning in McKell applies to the facts alleged in Plaintiff’s Complaint.  (See Welco Electronics, Inc. v. Mora (2014) 223 Cal.App.4th 202, 216 [noting that, although McKell stated that the plaintiffs did not allege that the defendants were holding payments on behalf of another, the court “prefaced that quoted language by stating” the principle that money cannot be the subject of a conversion claim unless there is an identifiable sum involved, “such as where an agent accepts a sum of money to be paid to another and fails to make the payment[,]” which “is but one example of a conversion claim”] [emphasis in original].)

The court denies Defendants’ motion for judgment on the pleadings as to the second cause of action for unjust enrichment because it states facts sufficient to constitute a cause of action since Plaintiff has alleged facts establishing that Defendants (1) have retained a benefit, i.e., the funds that were overpaid to Defendants, and (2) have unjustly retained that benefit at Plaintiff’s expense.  (Code Civ. Proc., § 438, subd. (c)(1)(B)(ii); Compl., ¶¶ 8-10, 17-18; Lyles v. Sangadeo-Patel (2014) 225 Cal.App.4th 759, 769 [“‘The elements of a claim of unjust enrichment are “receipt of a benefit and unjust retention of the benefit at the expense of another”’”].)

The court denies Defendants’ motion for judgment on the pleadings as to the third cause of action for misappropriation because Defendants have not shown that it does not state facts sufficient to constitute a cause of action against them.  (Code Civ. Proc., § 438, subd. (c)(1)(B)(ii).)  Specifically, Defendants have not shown that a misappropriation claim may only be alleged if one party entrusts another party with funds that are then misappropriated.  While the court recognizes, as all parties acknowledge, that claims “for conversion of money typically involve those who have misappropriated . . . specific funds held for the benefit of others[,]” Defendants did not cite authority establishing that all misappropriation claims require the entrustment of funds for a third party and cannot be based on an allegation that the defendants used funds mistakenly sent to them for their own personal benefit, as alleged here.  (PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glasser, Weil & Shapiro, LLP (2007) 150 Cal.app.4th 384, 396 [emphasis added]; Compl., ¶ 22.)  

The court grants Defendants’ motion for judgment on the pleadings as to the fourth cause of action for accounting because it does not state facts sufficient to constitute a cause of action since Plaintiff has not alleged facts establishing that some balance is due to Plaintiff that can only be ascertained by an accounting.  (Code Civ. Proc., § 438, subd. (c)(1)(B)(ii); Sass v. Cohen (2020) 10 Cal.5th 861, 869 [“An action for accounting has two elements: (1) ‘that a relationship exists between the plaintiff and defendant that requires an accounting’ and (2) ‘that some balance is due the plaintiff that can only be ascertained by an accounting’”].)  Instead, the facts alleged show that Plaintiff has been able to calculate the balance allegedly owed by Defendants without an accounting.  (Compl., ¶¶ 9-10 [alleging the amounts that should have been paid but were mistakenly paid].)

The burden is on the plaintiff “to articulate how it could amend its pleading to render it sufficient.”¿ (Palm Springs Villas II Homeowners Assn., Inc. v. Parth (2016) 248 Cal.App.4th 268, 290.)¿ To satisfy that burden, a plaintiff “must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading.”¿ (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.)  The court finds that Plaintiff has not met its burden to show how it can amend its fourth cause of action for accounting to render it sufficient against Defendants.  The court therefore grants Defendants’ motion for judgment on the pleadings as to that cause of action without leave to amend.

ORDER

            The court denies defendants Bedford Surgical Group, Inc., and Reconstructive Surgery Specialists, LLC’s motion for judgment on the pleadings as to plaintiff Corcoran Administrators, Inc.’s first through third causes of action.

            The court grants defendants Bedford Surgical Group, Inc., and Reconstructive Surgery Specialists, LLC’s motion for judgment on the pleadings as to plaintiff Corcoran Administrators, Inc.’s fourth cause of action without leave to amend.

            The court orders defendants Bedford Surgical Group, Inc., and Reconstructive Surgery Specialists, LLC to give notice of this ruling.

IT IS SO ORDERED.

DATED:  March 13, 2025

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court