Judge: Robert C. Longstreth, Case: 37-2023-00033738-CU-FR-CTL, Date: 2024-01-12 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - January 11, 2024

01/12/2024  08:30:00 AM  C-65 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Robert Longstreth

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Civil - Unlimited  Fraud Demurrer / Motion to Strike 37-2023-00033738-CU-FR-CTL RUDDER VS SIGBJORN GROUP [IMAGED] CAUSAL DOCUMENT/DATE FILED: Demurrer, 11/20/2023

Defendants Sigbjorn Group dba Aztec Supply, J. Eric Berge, Mary Allen Palomino, and Brandon Berge's Demurrer to Plaintiffs' First Amended Complaint (ROA 20) is OVERRULED IN PART and SUSTAINED IN PART, with leave to amend as to the first, second, fourth, sixth, tenth, and thirteenth causes of action only.

As to the first cause of action for breach of contract, the second cause of action for breach of the covenant of good faith and fair dealing, and the tenth cause of action for rescission, the demurrer is sustained with leave to amend as to J. Eric Berge, Mary Allen Palomino, and Brandon Berge. These individual Defendants are not parties to the contract at issue, as evidenced by the contract itself, which is attached to the First Amended Complaint as Exhibit 1. '[W]hen there is a conflict between a complaint's allegations and exhibits that is direct and indisputable, the exhibit will prevail.' (Panterra GP, Inc. v. Superior Court (2022) 74 Cal.App.5th 697, 712, fn. 13.) Moreover, Plaintiffs have not sufficiently alleged facts of potential alter ego liability against the individual Defendants. (FAC ¶ 3.) 'To recover on an alter ego theory, a plaintiff need not use the words 'alter ego,' but must allege sufficient facts to show a unity of interest and ownership, and an unjust result if the corporation is treated as the sole actor.' (Leek v. Cooper (2011) 194 Cal.App.4th 399, 415.) Merely alleging that someone is an officer, director, or shareholder is insufficient. Leave to amend is granted to allow Plaintiffs an opportunity to sufficiently allege facts of alter ego against the individual Defendants.

As to Plaintiffs' third cause of action for negligence, the demurrer is overruled. Although Defendants contend the claim is barred by the economic loss rule, the court finds that the cause of action is sufficiently pled in tort as opposed to contract and survives demurrer.

As to Plaintiffs' fourth cause of action for intentional fraud, the demurrer is sustained with leave to amend as to Defendants J. Eric Berge, Palomino, and Brandon Berge. Plaintiffs are required to plead the facts of the alleged fraud with specificity. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) As to Defendants J. Eric Berge and Palomino, Plaintiffs have not alleged their fraud claim with sufficient specificity, they do not allege who made the alleged misrepresentations, when they were made, or what they were (indeed, they argue that alternative, inconsistent misrepresentations were made). (FAC ¶ 37-38; Opposition Br., ROA 22, at 5.) While plaintiffs are entitled to advance inconsistent factual allegations at the pleading stage, they must do so in a way that meets the pleading standards for fraud claims. Finally, as to Defendant Brandon Berge, Plaintiffs have not pled any facts at all.

As to Plaintiffs' sixth cause of action for negligent misrepresentation, the demurrer is overruled as to Defendants J. Eric Berge and Palomino but sustained with leave to amend as to Defendant Brandon Calendar No.: Event ID:  TENTATIVE RULINGS

3054508  14 CASE NUMBER: CASE TITLE:  RUDDER VS SIGBJORN GROUP [IMAGED]  37-2023-00033738-CU-FR-CTL Berge. As to Defendants J. Eric Berge and Palomino, Plaintiffs have alleged the claim sufficient to survive demurrer. However, as to Defendant Brandon Berge, Plaintiffs have not pled any facts of fraud.

As to Plaintiffs' twelfth cause of action for failure to warn of and repair breach of cybersecurity, the demurrer is sustained without leave to amend as to all Defendants. Defendants assert they are aware of no such cause of action under common law and point out Plaintiffs have not identified any statutory basis for the claim. Moreover, to the extent Plaintiff is attempting to assert a products liability claim, Plaintiffs did not plead Defendants are manufacturers, suppliers, or distributors of a product. In opposition, Plaintiff fails to identify any valid legal theory under which this claim might be stated.

Accordingly, the court concludes it is not a valid separate cause of action.

As to Plaintiffs' thirteenth cause of action for promissory fraud, the demurrer is sustained with leave to amend as to Defendants Palomino and Brandon Berge. As with their other fraud claims, Plaintiffs are required to plead their promissory fraud claim with specificity. (Lazar, supra.) As to Defendants Palomino and Brandon Berge, Plaintiffs have not sufficiently alleged facts of a promise made by these Defendants without intent to perform.

Plaintiffs are to file a Second Amended Complaint on or before February 2, 2024.

Once confirmed, this ruling shall be the final ruling of the court and no further written order is required.

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