Judge: Ronald F. Frank, Case: 21TRCV00715, Date: 2023-03-14 Tentative Ruling
Case Number: 21TRCV00715 Hearing Date: March 14, 2023 Dept: 8
Tentative Ruling¿
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HEARING DATE: March 14, 2022¿¿
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CASE NUMBER: 21TRCV00715
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CASE NAME: Mauro
Restrepo v. Sophie Adams, et al.
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MOVING PARTY: Defendants, Sophie Adams, George R. Adams, Tiffany Winston,
Christ Koutroumbus, Polly Koutroumbus
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RESPONDING PARTY: Plaintiff, Mauro Restrepo
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TRIAL DATE: None set¿
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MOTION:¿ (1) Demurrer to Second Amended
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Tentative Rulings: (1) Sustained as to the First and
Second Alleged Causes of Action without leave to amend. As to the Third Cause of Action, the Court
will consider one final attempt to amend as discussed below. The Court strongly encourages the parties and
especially counsel to consider a refund-based settlement before engaging in
another round of pleading motions. The
Court is mindful that depositions are scheduled to occur the day after this
hearing and the Court is NOT inclined to consider further postponement of those
depositions. Two different judges have
now reviewed the allegations and have come to similar conclusions as to the
viability of the attempts to alleged causes of action here.
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I. BACKGROUND¿¿
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A. Factual¿¿
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On October 1, 2021, Plaintiff
filed this action for alleged financial and emotional harm caused by alleged
misrepresentations by a psychic who plaintiff located on the Internet and then
met in person. On October 11, 2022, Plaintiff filed a First Amended Complaint
(“FAC”). The FAC alleged causes of action for: (1) Fraud; (2) Negligent Misrepresentation;
and (3) Unfair Competition. On January 19, 2023, Plaintiff filed a Second
Amended Complaint (“SAC”) against Defendants, Sophie
Adams aka Sophia Adams, Sofie Adams, Sophie Psychic Services dba Palos Verdes
Estates Psychic Love Specialist by Sophia, dba Psychic Reading Meditation
Center by Sophie, George R. Adams, Tiffany Johnson aka Tiffany Adams, Christ
Koutroumbus, Polly Koutroumbus, and DOES 1 through 20 (collectively “Defendants”.)
The SAC purports to state causes of action for: (1) Fraud; (2) Negligent
Misrepresentation; (3) Unfair Competition: Violation of Business &
Professions Code § 17200 et seq.
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B. Procedural¿¿
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On
February 3, 2023, Defendants filed this demurrer to Plaintiff’s SAC. On
February 27, 2023, Plaintiff filed an opposition. No reply was received by the day before the
hearing.
¿II. MOVING PARTY’S GROUNDS
FOR THE DEMURRER¿¿
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Defendants demur to Plaintiff’s SAC
on the grounds that: (1) The purported first cause of action for
fraud fails to state facts sufficient to state a cause. Code of Civil Procedure
§ 430.10(e). The demurrer asserts that none
of the alleged fraudulent statements amounts to actionable fraud, and the
amendment contains what defendants claim to be sham allegation; (2) The
purported second cause of action for negligent misrepresentation fails to state
facts sufficient to state a cause. Code of Civil Procedure § 430.10(e). The demurrer also asserts that none of the
alleged statements amounts to any actionable negligent misrepresentations.
Moreover, the cause of action is claimed to impermissibly contain facts
antagonistic to the allegations in the first cause of action; and (3) The
purported third cause of action for unfair business practices fails to state
facts sufficient to state a cause of action with respect to Defendants George
R. Adams, Tiffany Winston, Christ Koutroumbus and Polly Koutroumbus. Per the
demurring parties, none of the alleged facts suggest any involvement in or
liability for the misconduct alleged in the third purported case of action as
the Court has described the actionable conduct in its order overruling, in
part, Defendants’ demurrer to the First Amended Complaint. Code of Civil
Procedure § 430.10(e) and (f).
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¿III. REQUEST FOR JUDICIAL
NOTICE
Defendants
have requested that this Court take judicial notice of the fact that people do
not generally speak in capital versus lower case letters, with period between
the letters. This Court grants Defendants’ request and takes judicial notice of
that general fact.
IV. ANALYSIS¿
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A. Demurrer¿¿¿
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A demurrer can be used only to challenge defects that
appear on the face of the pleading under attack or from matters outside the
pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39
Cal.3d 311, 318.) “To survive a demurrer, the complaint need only allege facts
sufficient to state a cause of action; each evidentiary fact that might
eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v.
William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) For
the purpose of testing the sufficiency of the cause of action, the demurrer
admits the truth of all material facts properly pleaded. (Aubry v. Tri-City
Hospital Dist. (1992) 2 Cal.4th 962, 966-967.) A demurrer “does not admit
contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab
Co. (1967) 67 Cal.2d 695, 713.)¿¿¿
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Fraud
Defendants
argue that the First Cause of Action, for fraud, fails as to Mrs. Adams. “The elements of fraud are (a) a
misrepresentation (false representation, concealment, or nondisclosure); (b)
scienter or knowledge of its falsity; (c) intent to induce reliance; (d)
justifiable reliance; and (e) resulting damage.” (Hinesley v. Oakshade Town Ctr. (2005) 135 Cal.App.4th 289, 294.)
The facts constituting the alleged fraud must be alleged factually and
specifically as to every element of fraud, as the policy of “liberal construction”
of the pleadings will not ordinarily be invoked. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) To properly
allege fraud against a corporation, the plaintiffs must plead the names of the
persons allegedly making the false representations, their authority to speak,
to whom they spoke, what they said or wrote, and when it was said or written. (Tarmann v. State Farm Mut. Auto. Ins. Co.
(1991) 2 Cal.App.4th 153, 157.)
Here,
Plaintiff’s SAC claims that “the defendants made a false representation that
harmed him.” (SAC ¶ 41.) Plaintiff further asserts that “defendant
represented verbally and in writing that she would “save” him. On or about
September 17, 2021, Plaintiff asserts that he searched for “psychics” on
Google. Plaintiff notes he found the defendant’s website, and that the website
stated that Defendant is a “PHD” Life Coach. (SAC ¶ 41.) Moreover, Plaintiff claims that
when he and Defendant met in person, Defendant reiterated that “she has a Ph.D.
as a life coach therapist.” (SAC
¶ 41.) Plaintiff claims that he reasonably relied on Defendant’s
statements regarding her alleged doctoral degree as a life coach therapist and
ability to “save” him when he decided to utilize Defendant’s services. (SAC ¶ 41.) But plaintiff does not allege that Ms. Adams
promised that she would get him his money back on prior wagers that he had
made, nor that she would forever cure the curse of bad luck that had befallen
him, nor did she guarantee him success on his next speculative venture and more
than she could promise what animal or culture he would be reincarnated
into.
In Defendants’ demurrer, they
argue that the gravamen of the fraud claim is that Mrs. Adams advertised on a
website that she was a PHD and, in fact, did not possess an advanced doctorate
degree. Defendants assert that the defect is that the use of the
letters PHD, in all capital letters, has no secondary meaning, and, therefore,
those letters are incapable of being the basis for fraud, justifiable reliance
or damages. Defendants contend that Plaintiff would have a better chance at
this pleading if he claimed that Mrs. Adams was a “Ph.D,” as that would suggest
Mrs. Adams held a doctorate degree. However, Defendants note that Mrs. Adams
website does not state “Ph.D.” Instead, in all capital letters, the website
reads “PHD.” Defendants also note that this allegation is contrary to earlier
pleadings where Plaintiff alleged he relied on Mrs. Adam’s web page for the
information about her being a “PHD.”
Additionally,
Defendants argue that the new allegations about “Ph.D” are sham allegations.
Plaintiff’s SAC now states that when he and Defendant met in person, Defendant
reiterated that she has a Ph.D as a life coach therapist. (SAC ¶ 41.) Defendant argues that
this is Plaintiff’s attempt to cure the defect by claiming that Defendant, Mrs.
Adams, confirmed she was a “Ph.D.” Defendants also claim that
this allegation is contrary to earlier pleadings where Plaintiff alleged he
relied on Mrs. Adam’s web page for the information about her being a “PHD.” “Under
the sham-pleading doctrine, admissions in an original complaint that has been
superseded by an amended pleading remain within the court's cognizance and the
alteration of such statements by amendment designed to conceal fundamental
vulnerabilities in a plaintiff's case will not be accepted.” (Berg
& Berg Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1043, fn.
25 (Berg & Berg).) If a party files an amended pleading and
attempts to avoid defects of original complaint by either omitting facts that
rendered prior complaint defective or adding facts inconsistent with prior
allegations, the court may take judicial notice of prior pleadings and
disregard inconsistent allegations or read into amended complaint the
allegations of the superseded complaint. (Deveny v. Entropin, Inc.
(2006) 139 Cal.App.4th 408, 425-426, fn. 3 (Deveny).)
Next,
Defendants’ demurrer argues that Plaintiff’s allegations about Mrs. Adams fail
to explain “PHD” is not an indication of a doctorate degree are not actionable.
Plaintiff’s SAC alleges fraud based on the failure “to disclose
that “PHD” did not mean a doctorate degree awarded by an institution of higher
learning, a university . . ..” (SAC ¶ 44.) Defendants assert that the
fraudulent concealment theory fails because Plaintiff did not and cannot based
on the currently allege facts, plead a duty to disclose. Additionally,
Defendants assert that it may not be possible for Plaintiff to plead
justifiable reliance in the psychic industry.
In opposition, Plaintiff argues that
he specifically pleaded: (1) How – Plaintiff searched for psychics on Google
when he found defendant’s website; (2) When – September 17, 2021; (3) What means the representations were tendered
– Defendant’s website; and (4) Data from
which the falsity of defendant’s intentions could be inferred – the statement
on defendant’s website that she is a “PHD” Life Coach. Additionally, Plaintiff
argues that a reasonable person would assume adding the letters “P,” “H,” and
D” to the end of a name indicates that person has some sort of advanced degree.
In response to the sham pleading argument, Plaintiff asserts that Plaintiff
understood that Defendant was alleging she held some sort of advanced degree
when she stated she had a “Ph.D.”
The Court is not persuaded by
Plaintiff’s opposition. While the Court determines that the sham pleading rule
applies to these circumstances, the allegations of the now Second
amended complaint are insufficient as a matter of law to state a cause of
action for fraud. Courts must engage in
a screening function when reviewing allegations that are the subject of a demurrer,
especially allegations that seek to prove fraud with its elevated pleading
requirements and allegations seeking punitive damages which are subject to an
elevated burden of proof. Without much
more detailed specifics as to how plaintiff in particular -- and distinct from a
reasonable person -- could have reasonably relied on the specific allegations
alleged to made by a person known by Plaintiff to be holding herself out to be
a psychic or a life coach, the Court will sustain without leave to amend.
Negligent Misrepresentation
Defendants also demur to Plaintiff’s second cause of action
for negligent misrepresentation. The elements of a cause of action for
negligent misrepresentation include “[m]isrepresentation of a past or existing
material fact, without reasonable ground for believing it to be true, and with
intent to induce another’s reliance on the fact misrepresented; ignorance of
the truth and justifiable reliance on the misrepresentation by the party to
whom it was directed; and resulting damage.” (Hydro-Mill Co., Inc. v. Hayward, Tilton & Rolapp Ins. Associates,
Inc. (2004) 115 Cal.App.4th 1145, 1154, quotation marks omitted.) The facts
constituting the alleged fraud must be alleged factually and specifically as to
every element of fraud, as the policy of “liberal construction” of the
pleadings will not ordinarily be invoked. (Lazar
v. Superior Court (1996) 12 Cal.4th 631, 645.)
Here, Plaintiff’s SAC alleges that “Defendant had no
reasonable ground for believing that representations made to Plaintiff
regarding her alleged “Ph.D” and her ability to “save” Plaintiff were true.”
(SAC ¶ 48.) Plaintiff further claims that “Defendant intended for Plaintiff to
rely on her negligent representations to induce Plaintiff to utilize her
services in the first place.” (SAC ¶ 49.) Additionally, Plaintiff asserts that
he “relied on Defendant’s false representations to his detriment as he agreed
to utilize Defendant’s service. Plaintiff claims he did not know, nor could
have known, that Defendant’s advice was not based on her experience as a life
coach with a “Ph.D” and relied on Defendant’s false representations that she
was a trained professional life coach with a “Ph.D.” (SAC ¶ 50.) Lastly,
Plaintiff argues that his “reliance was reasonable because he had no reason to
suspect that Defendant was not actually a trained professional life coach with
a “Ph.D” since she both advertised that she had a “Ph.D” on her website and
verbally confirmed that she had a “Ph.D” as well.” (SAC ¶ 51.) Plaintiff claims
he “would not have utilized Defendant’s
services had he known that Defendant did not actually have any experience as a
professional life coach and did not actually have a “Ph.D”.” (SAC ¶ 51.)
Lastly, Plaintiff submits that “as a direct and proximate result of reasonable
reliance on Defendant’s false representations Plaintiff sustained general and
special damages to be proven at trial.” (SAC ¶ 51.)
Defendants
argue in their demurrer, that California courts have recognized a cause of
action for negligent misrepresentation in two circumstances: where providing
false information poses a risk and results in physical harm to person or
property; and where information is conveyed in a commercial setting for a
business purpose. (citing Hydro-Mill Co., Inc. v. Hayward, Tilton &
Rolapp Ins. Associates, Inc. (2004) 115 Cal.App.4th 1145, 1154.) Defendant assert
that Plaintiff’s SAC does not suggest
that either alleged misrepresentation “poses a risk and result in physical harm
to person or property.” Next, Defendants argue that the alleged statement about
an ability to “save” plaintiff is merely word smithing around the fact it is a
prediction of the future. Defendants assert that "[P]redictions as to
future events, or statements as to future action by some third party, are
deemed opinions, and not actionable fraud." (citing to Tarmann v. State
Farm Mut. Auto. Ins. Co., (1991) 2 Cal.App.4th 153, 158; 5 Witkin, Summary
of Cal. Law (9th ed. 1988) Torts, § 678, pp. 779-780; Richard P. v. Vista
Del Mar Child Care Service (1980) 106 Cal.App.3d 860, 865 .)
Additionally,
Defendants argue that, again, Plaintiff’s new allegations that Mrs. Adams spoke
and in her speech distinguished between “Ph.D” and “PHD” is a sham pleading.
Defendants also argue that the first cause of action and second cause of action
are impermissible antagonistic allegations because the first cause of action
pleads tat the statements were intentional. (SAC ¶ 41.) However, Defendants
note that, in contract, the second cause of action pleads that they were
without sufficient information, and therefore, negligent. (SAC ¶ 48.)
In
opposition, Plaintiff argues that his second cause of action is sufficiently
plead because the SAC provides that (1) Defendants made multiple
misrepresentations of a past or existing material fact, without reasonable
ground for believing it to be true, and with intent to induce another’s
reliance on the fact misrepresented when they advertised that they had a PHD,
never had any complaints against them, and that Plaintiff would “suffer greatly
if he didn’t listen to every word she said”; (2) Plaintiff was ignorant of the
truth and justifiably relied on the misrepresentations made by Defendants; and
(3) Plaintiff was harmed. Moreover, Defendant’s actions were made in a
commercial setting by advertising that she has a “PHD” and does not have any
complaints against her.
Without
much more detailed specifics as to how plaintiff in particular -- and distinct
from a reasonable person -- could have reasonably relied on the specific
allegations alleged to made by a person known by Plaintiff to be holding
herself out to be a psychic or a life coach, the Court will sustain without
leave to amend.
Unfair Competition
To
set forth a claim for a violation of Business and Professions Code section
17200 (“UCL”), Plaintiff must establish Defendant was engaged in an “unlawful,
unfair or fraudulent business act or practice and unfair, deceptive, untrue or
misleading advertising” and certain specific acts. (Bus. & Prof. Code, §
17200.) To state a cause of action for violation Bus. & Prof.
Code § 17200,¿et seq., plaintiff must show: (1) a business practice; (2)
that is unfair, unlawful, or fraudulent; and (3) authorized remedy.¿ (Bus.
& Prof. Code § 17200;¿see also Paulus v. Bob Lynch Ford, Inc. (2006)
139 Cal.App.4th 659, 676.)¿ “A plaintiff alleging unfair business practice
under these statutes must state with reasonable particularity the facts
supporting the statutory elements of the violation.”¿ (Khoury v.¿Maly's¿of
California, Inc.¿(1993) 14 Cal.App.4th 612, 619.)¿ To support this cause of
action, a plaintiff must specify the statutory section that has been violated
and describe with particularity the alleged violation.¿ (See¿5 Witkin,
Cal. Procedure (5th ed. 2008), § 779, p. 196.)¿
Here, Plaintiff’s SAC claims that “Defendant’s
business practices as alleged in this complaint qualify as “unfair” under the
UCL because they (a) offend public policy; (b) are immoral, unethical, oppressive,
and unscrupulous; (c) are substantially injurious; (d) are not justified by any
countervailing benefits; and (e) cause injuries that could not reasonably have
been avoided by the injured parties themselves.” (SAC ¶ 54.) Additionally, Plaintiff asserts that “Defendants’
business practices as alleged in this complaint qualify as “fraudulent” under
the UCL because they are likely to cause members of the public to be deceived.”
(SAC ¶ 55.)
Plaintiff contends that he “ has suffered economic injury because of the
Defendants’ unfair and fraudulent business practices.” (SAC ¶ 56.) Plaintiff further contends that “the money
lost by Plaintiff includes, but is not limited to, (a) transportation costs
incurred to appear at Defendants’ location; (b) the medical expenses related to
treatment for severe emotional distress and complications arising therefrom;
and (c) loss of employment caused by Plaintiff’s dependence on Defendants’
business practice.” (SAC ¶
56.) Further, Plaintiff asserts that “[o]n information and
belief, Defendants have adopted the unfair and fraudulent business practices
described herein as a business model and continue to engage in such unfair and
fraudulent business practices to this day because they generate significant
revenues and profits.” (SAC
¶ 57.)
In Defendants’ demurrer, they argue that the third cause of
action fails as to the peripheral defendants because the only conduct directed
to the public is related to Mrs. Adams’ website, and there are no allegations
in the SAC suggesting the peripheral defendants had any involvement in that
website. Furthermore, Defendants claim that Plaintiff fails to plead a proper
remedy, i.e., exactly what conduct or allegedly deceptive business practice is sought
to be enjoined? Does plaintiff seek to have
Ms. Adams remove the “PHD” reference from her website? Does Plaintiff seek to have Plaintiff
enjoined from advising future customers that she can cure them of curses? Does plaintiff seek to have Ms. Adams enjoined
from using or reading Tarot cards?
In opposition, Plaintiff argues that he properly
alleges the elements of an Unfair Competition claim in the SAC, because
Plaintiff came across Defendants’ services while surfing the web and looking
for a life coach. Plaintiff further argues that Defendant publicly advertised
that she has a “PHD”, which motivated Plaintiff to utilize her services. The
Court does not find that Plaintiff addresses in his opposition how the
peripheral defendants are liable under this cause of action. Nor is the specific injunctive relief Plaintiff
hopes to have the Court order detailed in sufficient fashion for the Court or
the Defendants know what remedy is being sought. The Third Cause of Action is thus vague and
uncertain. As such, this Court sustains
the demurrer as to this cause of action. The Court will entertain one last and
final amendment of this cause of action only if counsel will describe in detail
what amendments he believes can be made to cure these infirmities.
V. CONCLUSION¿¿
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For the foregoing reasons,
Defendants’ Demurrer is SUSTAINED. Leave to amend
will be considered as to the Third cause of action.