Judge: Ronald F. Frank, Case: 22TRCV00900, Date: 2023-05-02 Tentative Ruling
Case Number: 22TRCV00900 Hearing Date: May 2, 2023 Dept: 8
Tentative Ruling¿
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HEARING DATE: May 2, 2023¿¿
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CASE NUMBER: 22TRCV00900
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CASE NAME: Puente Hills
Financing, LLC v. Repossession Empire, Inc., et al.
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MOVING PARTY: Defendants, Lloyd Joseph Collins Repossession Empire, Inc.
dba Legion
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RESPONDING PARTY: Plaintiff, Puente Hills Financing, LLC.
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TRIAL DATE: None
set.¿
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MOTION:¿ (1) Demurrer¿
(2)
Motion to Strike
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Tentative Rulings: (1) Defendants’ Demurrer is SUSTAINED
in part and DENIED in part. ARGUE as to
the inclusion of Mr. Collins as a defendant in the conversion cause of
action. 30 days’ leave to amend is
granted as to most of the sustained claims, without leave to amend as to the labeled
“possession of personal property” and “claim and delivery” claims that are not viable
causes of action but instead are remedies.
(2)
Defendants’ Motion to Strike is mooted by the sustaining of the fraud cause of
action with leave to amend.
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I. BACKGROUND¿¿
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A. Factual¿¿
On October 6, 2022, Plaintiff filed
a complaint in this case. On March 16, 2023, Plaintiff filed a First Amended
Complaint (“FAC”) against Defendants, Repossession Empire, Inc. dba Legion and
Lloyd Joseph Collins (collectively, “Defendants”), and Does 1 through 10. The
FAC alleges causes of action for: (1) Fraud; (2) Breach of Contract; (3) Common
Count; (4) Claim and Delivery; (5) Conversion; (6) Possession of Personal
Property; and (7) Declaratory Relief.
Defendants
filed a Demurrer each cause of action arguing that Plaintiff failed to state
facts sufficient to constitute a cause of action, and each cause of action is
uncertain.
Defendants
also filed a motion to strike.
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B. Procedural¿¿
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On April 7, 2023, Defendants filed their Demurrer and Motion to
Strike. On April 19, 2023, Plaintiff filed oppositions to both motions. On
April 20, 2023, Defendants filed reply briefs to both opposition motions.
¿II. MOVING PARTY’S GROUNDS
FOR THE DEMURRER¿& MOTION TO STRIKE¿
¿
Defendants
filed a Demurrer each cause of action arguing that Plaintiff failed to state
facts sufficient to constitute a cause of action, and that each cause of action
is uncertain.
Defendant’s
Motion to Strike is based on striking Plaintiff’s request for punitive damages,
as well as Plaintiff’s alter ego allegations.
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III. REQUEST FOR JUDICIAL
NOTICE
In
Defendants’ moving papers, they have asked this Court to take judicial notice
of the related case of Collins, et al. v. Kara Imbriani, et al.,
Case No. 19STCV41528, and representations made by the plaintiff here, defendant
there, Puente Hills Financing, LLC, including those attached to this demurrer
as Defendants’ Exhibit 1.
The Court also notes that Plaintiff
has opposed and objected to this request. The Court GRANTS the Request for Judicial
Notice of the 2019 Collins case, but does not and cannot judicially notice the
truth of any allegations in that case.
IV. ANALYSIS¿¿
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A. Demurrer
¿¿
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.)¿¿¿¿
¿¿¿
A pleading is uncertain if it is ambiguous or
unintelligible. (Code Civ. Proc., § 430.10, subd. (f).) A demurrer for
uncertainty may lie if the failure to label the parties and claims renders the
complaint so confusing defendant cannot tell what he or she is supposed to
respond to.¿ (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d
135, 139, fn. 2.) However, “[a] demurrer for uncertainty is strictly construed,
even where a complaint is in some respects uncertain, because ambiguities can
be clarified under modern discovery procedures.” (Khoury v. Maly's of
California, Inc. (1993) 14 Cal.App.4th 612, 616.)¿¿¿
Fraud
“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.)
Plaintiff’s FAC alleges that Defendants entered into
an oral agreement with the Plaintiff through Ms. Imbriani, whereby Defendants
represented to Plaintiff that they would repossess certain vehicles owned by
Plaintiff for a fee and return said vehicles to Plaintiff who is the rightful
owner. (FAC, ¶ 24.) Plaintiff further alleges that Defendants made this
representation with the intent to induce the Plaintiff into entering into an
agreement with them for the repossession of vehicles. (FAC, ¶ 25.) Plaintiff
claims it justifiable relied upon this representation, and that Defendants knew
at the time of the representation that it was false. (FAC, ¶¶ 26-27.) Plaintiff
further notes that based on that information and belief, it alleges Defendants
acted in concert with one another with the intent to repossess the vehicles,
collect the repossession fees and retain possession of the vehicles
indefinitely, so as to charge high storage fees on the vehicles. (FAC, ¶ 28.)
In Defendants’ Demurrer, they argue that Plaintiff’s
fraud claim is insufficiently plead because it fails to allege with specificity
what misrepresentations Collins or Legion made to Imbriani
(Finance Director or Manager of Puente Hills Financing, LLC), and when
he or it made them. However, Defendants argue that there is no explanation of
how either she, or Puente Hills Financing, LLC relied upon alleged statements
by Collins, or why such reliance was “justifiable.” Defendants assert that with
regards to Defendant, Lloyd Joseph Collins, the first cause of action is
entirely silent as to his role or why he is a defendant. Defendants claim it is
uncertain whether Plaintiff is relying on its alter ego allegations to include
Collins.
In
opposition, Plaintiff simply restates portions of its FAC. However, the Court
makes notes that earlier in Plaintiff’s pleading, there are more specific
allegations. For example, Plaintiff notes that Defendant Collins verbally
represented to Ms. Imbriani that Defendants would repossess and return vehicles
for free, which addresses Defendants’ contention that the first cause of action
is entirely silent as to Defendant Collins’ role in the fraud cause of action.
The Court agrees that Plaintiff can and should include more specific details as
to when a specifically identified Defendant made the repossession and return representation
or other misrepresentations to Imbriani, as well as the date or approximate
date of that representation or representations. Plaintiff has alleged that it justifiable
relied upon the Defendants’ representations, but should provide more specificity
as to why that reliance was justified rather than the bare
conclusion that it was. As such, the Court SUSTAINS THE DEMURRER as to this fraud
cause of action and allows Plaintiff 30 days leave to amend to add more
specific allegations as to any other purportedly false statements or promises, and
the date or dates they were made.
Breach
of Contract
To state a cause of action for breach of oral contract,
Plaintiff must be able to establish “(1) the existence of the contract, (2) plaintiff’s
performance or excuse for nonperformance, (3) defendant’s breach, and (4) the
resulting damages to the plaintiff.” (Oasis
West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.) If a breach of
contract claim “is based on alleged breach of a written contract, the terms
must be set out verbatim in the body of the complaint or a copy of the written
agreement must be attached and incorporated by reference.” (Harris v. Rudin, Richman & Appel (1999)
74 Cal.App.4th 299, 307.) In some circumstances, a plaintiff may also “plead
the legal effect of the contract rather than its precise language.” (Construction Protective Services, Inc. v.
TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198-199.)
Plaintiff’s FAC alleges that Plaintiff, through Manger
Kara Imbriani, and Defendants through Defendant Collins, acting on behalf of Defendants,
entered into an oral agreement “at some time after Kara Imbriani’s employment
in 2013,” whereby it was agreed that Defendants would repossess certain vehicles
owned by Plaintiff. (FAC, ¶ 31.) Plaintiff contends that it was further agreed
that these vehicles were to be returned to Plaintiff, and that in accordance
with this agreement Defendants repossessed the vehicles on behalf of Plaintiff.
(FAC, ¶ 31.) Plaintiff further states that Defendants charged a repossession
fee, and Plaintiff paid in full. (FAC, ¶ 31.) However, on or about April 2021,
Plaintiff asserts that it became aware that certain vehicles had not been
returned to it, but instead, had been kept by Defendants. (FAC, ¶ 32.) However,
Plaintiff asserts it is the legal owner of said vehicles. (FAC, ¶ 33.)
Plaintiff claims it demanded the return of the vehicles. (FAC, ¶ 34.) However,
Plaintiff asserts that since the time of repossession of each vehicle until now
and including from the date of the demand for their return, Defendants have
defaulted in the terms, conditions, and covenants of the agreement by failing
and refusing to return the vehicles, resulting in incurred costs to Plaintiff.
(FAC, ¶ 35.)
Defendants also argue that Plaintiff’s breach of
contract claim is deficiently pleaded because Plaintiff’s assertion in the
related case is that Kara Imbriani is the one who breached a contract with
Plaintiff, not Repossession Empire or Collins. Defendants contend that even if
they could have been somehow charged with a breach of oral agreement, it
appears that Kara Imbriani, whose knowledge as Director of Finance is
attributable to Puente Hills Financing, LLC, would have known of such a breach
well before the two-year statute of limitations will have run.
Again,
in opposition, Plaintiff only restates its FAC. The Court finds the contract
cause of action to be vague and uncertain.
It is vague to allege that an oral contract was entered into some time
in the last decade, because it prevents the Court and the defendant from
understanding whether the breach occurred within two years of the filing of
suit for statute of limitations purposes, or whether there are facts alleged to
extend or toll the running of the two-year statute. It could be that as to some of the cars or repossessions
the statute has elapsed but as to others they are within the two-year
period. Is the April 2021 date alleged in
FAC ¶¶ 32 and 34 the first time Plaintiff alleges to have discovered the breach,
or is that the date a prior breach was discovered as to other vehicles? More specificity in pleading is
required. The FAC is also uncertain as
to the material terms of the alleged oral contract, i.e., was it agreed to charge
and pay a repossession fee, what was the price to be paid, and was the fee per vehicle,
per truckload or something else. As such, the demurrer is SUSTAINED as to
breach of contract.
Common
Count
The required elements of a common count claim are “(1)
the statement of indebtedness in a certain sum, (2) the consideration, i.e.,
goods sold, work done, etc., and (3) nonpayment. A cause of action for money
had and received is stated if it is alleged the defendant is indebted to the
plaintiff in a certain sum for money had and received by the defendant for the
use of the plaintiff.” (Farmers Insurance
Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460, citation and quotation
marks omitted.)
Plaintiff’s FAC alleges that within the last four (4)
years, Defendants became indebted to Plaintiff in the net sum of $698,920.68
for money expended for the benefit of Defendants and Defendants’ instance and
request for the original vehicle. (FAC, ¶ 39.) Plaintiff contends that no part
of said sum has been paid, even though payment has been demanded. (FAC, ¶ 40.)
As such, Plaintiff argues that there is now due, owing and unpaid to PLAINTIFF
the sum of $ 698,920.68 (plus the newly discovered vehicles in Exhibit 2), plus
interest at the highest legal rate allowed by law from and after said vehicles
were repossessed until paid in full or date of entry of judgment. (FAC, ¶ 40.)
Lastly, Plaintiff asserts it has duly performed all the conditions precedent on
its part to be performed.
Defendants also argue that Plaintiff’s allegations for
common count, claim and delivery, and possession of personal property rise and
fall with the claims for fraud and breach of oral contract as they are not
specific causes of action.
In
opposition, Plaintiff contends that the fraud and breach of contract causes of
action have sufficiently been pleaded. However, as noted above, both of the first
two causes of action need to be amended to be pleaded with more specificity. While the Court would not independently sustain
the demurrer as to the common count, the Court encourages plaintiff to coordinate
the amended pleading as to the common count with changes made to the first two
claims. The Demurrer to the third cause
of action is thus OVERRULED.
Claim
and Delivery
Plaintiff’s FAC alleges that pursuant to the agreement, upon
payment of the repossession fees, Plaintiff is entitled to take possession of
the vehicles. (FAC, ¶ 44.) Additionally, Plaintiff argues that pursuant to
Defendants’ breach, Plaintiff is entitled to take possession of the vehicles
immediately. (FAC, ¶ 44.) Further, Plaintiff claims that Defendants have
wrongfully withheld the vehicles, Plaintiff is entitled to reasonable
attorneys’ fees, and the actual value of the vehicle with is $698,920.68, plus
accrued interest thereon, until paid in full or the date of entry of judgment.
(FAC, ¶ 45.) Lastly, Plaintiff notes that it has duly performed all the
conditions precedent on its part to be performed.
The Demurrer alleges that Plaintiff’s
allegation for claim and delivery rise and fall with the claims for fraud and
breach of oral contract as claim and delivery is not a specific causes of
action. The Court agrees with the latter
argument.
Claim and delivery is not a tort or a cause of
action, but rather “a remedy by which a party with a superior right to a
specific item of personal property (created, most commonly, by a contractual
lien) may recover possession of that specific property before judgment. This
remedy is “grounded in the concept of interference with personal property
rights.” (Ananda Church of Self-Realization v. Massachusetts Bay Ins. Co.¿(2002)
95 Cal.App.4th 1273, 1281.) Typically, claim and delivery are the
remedies sought for other causes of action such as conversion of personal
property or foreclosure on a lien. The
FAC does allege a conversion claim. As
such, the pleading of the claim and delivery purported cause of action is
deficient. The Court SUSTAINS the
Demurrer to the fourth cause of action without leave to amend, but claim and
delivery may be alleged as remedies for the conversion cause of action in plaintiff’s
amended pleading, just not as a separate cause of action.
Conversion
“Conversion is the
wrongful exercise of dominion over the property of another. The elements of a
conversion claim are: (1) the plaintiff’s ownership or right to possession of
the property; (2) the defendant’s conversion by a wrongful act or disposition
of property rights; and (3) damages.” (Lee
v. Hanley (2015) 61 Cal.4th 1225, 1240.)
Throughout
Plaintiff’s FAC, it alleges that it is the rightful owner of the vehicles.
Additionally, Plaintiff’s FAC alleges that Defendants, prior to the
commencement of this action, wrongfully sold or otherwise converted the
vehicles for their own use. (FAC, ¶ 47.)
Plaintiff further alleges that because Defendants have wrongfully
withheld the vehicles, Plaintiff is entitled to reasonable attorney’s fees, and
the actual value of the vehicles which is $ 698,920.68 (Unpaid Principal), plus
the newly discovered vehicles in Exhibit 2, plus accrued interest at the legal
rate until paid in full or the date of entry of judgment. Plaintiff asserts it is
also entitled to punitive damages according to proof. (FAC,
¶ 49.)
Defendants argue
that Plaintiff’s claim for conversion is insufficiently pled to include
Defendant, Lloyd Joseph Collins, because other than the previous allegations of
alter ego liability, Plaintiff have not pled anything else to explain why
Defendant, Lloyd Joseph Collins should be included as a defendant in this cause
of action. The Court will take oral argument
as to why the individual defendant Collins is a proper defendant to the
conversion cause of action.
Possession
of Personal Property
Here, Plaintiff asserts that It is, and at all times
mentioned was, the registered owner and title holder of the vehicles. (FAC, ¶ 51.) Plaintiff further contends that it is
entitled to the immediate and exclusive possession of the vehicles. (FAC, ¶ 52.)
Plaintiff claims that Defendants are in
possession and control of the vehicles, and that it demanded that Defendants
return the vehicles to Plaintiff, but that Defendants refused and failed to
return the vehicles in violation of its rights to its immediate and exclusive
possession. (FAC, ¶ 53.) Plaintiff asserts that during Defendants’ wrongful
possession and detention of the vehicles, Plaintiff suffered the loss of the
use and enjoyment of its personal property. (FAC, ¶ 54.) Plaintiff contends that by reason of the
wrongful withholding of the vehicles by Defendants, Plaintiff is entitled to
reasonable attorney's fees, costs, and the actual value of the vehicles, plus
accruing interest thereon, until paid in full or the date of entry of judgment.
(FAC, ¶ 54.) Additionally, Plaintiff
contends that during, and as a further proximate result of Defendants wrongful
possession and detention of the vehicles described above, and identified in
Exhibits 1 and 2, Plaintiff suffered the diminution in value of the vehicles to
its damage according to proof. (FAC, ¶ 55.)
Defendants argue that
Plaintiff’s allegation for possession of personal property rise and fall with
the claims for fraud and breach of oral contract as they are not specific
causes of action.
The Court agrees. Restoring possession of personal property, or
monetary restitution, “may be awarded where the defendant obtained a benefit
from the plaintiff by fraud, duress, conversion, or similar conduct. In such
cases, the plaintiff may choose not to sue in tort, but instead to seek
restitution on a quasi-contract theory.”
(McBride v. Boughton (2004) 123 Cal.App.4th 379, 388.) Here, plaintiff asserts cause of action on
fraud, contract, and conversion theories, but there is no separate cause of
action for “possession of personal property” just as in an unlawful detainer
case, there is not separate cause of action for possession of real property
even if the plaintiff proves the right to an eviction. The purported cause of action for possession
is SUSTAINED without leave to amend.
Declaratory
Relief ¿¿¿
“To qualify for
declaratory relief, a party would have to demonstrate its action presented two
essential elements: (1) a proper subject of declaratory relief, and (2) an
actual controversy involving justiciable questions relating to the party’s
rights or obligations.” (Jolley v. Chase
Home Finance, LLC (2013) 213 Cal.App.4th 872, 909, quotation marks and
brackets omitted.)
Defendants argue
that Plaintiff’s claim for Declaratory Relief is insufficiently pled to include
Defendant, Lloyd Joseph Collins, because other than the previous allegations of
alter ego liability, Plaintiff have not pled anything else to explain why
Defendant, Lloyd Joseph Collins should be included as a defendant in this cause
of action. The Court disagrees. There is a justiciable controversy as to the
rights and obligations of the parties as to the motor vehicles at issue, so the
demurrer is overruled.
B. Motion to Strike¿¿
¿
The court may,
upon a motion, or at any time in its discretion, and upon terms it deems
proper, strike any irrelevant, false, or improper matter inserted in any
pleading.¿ (Code Civ. Proc., § 436(a).)¿ The court may also strike all or any
part of any pleading not drawn or filed in conformity with the laws of this
state, a court rule, or an order of the court.¿ (Id., § 436(b).)¿ The
grounds for a motion to strike are that the pleading has irrelevant, false
improper matter, or has not been drawn or filed in conformity with laws.¿ (Id.,
§ 436.)¿ The grounds for moving to strike must appear on the face of the
pleading or by way of judicial notice.¿ (Id., § 437.)¿ “When the defect
which justifies striking a complaint is capable of cure, the court should allow
leave to amend.”¿ (Vaccaro v. Kaiman (1998) 63 Cal.App.4th 761, 768.)¿ ¿
Punitive
Damages
Civil Code section 3294, subdivision (a) authorizes
punitive damages in non-contract cases “where the defendant has been guilty of
oppression, fraud, or malice.”
“In order to survive a motion to strike an allegation of
punitive damages, the ultimate facts showing an entitlement to such relief must
be pled by a plaintiff. In passing on the correctness of a ruling on a motion
to strike, judges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth. In ruling
on a motion to strike, courts do not read allegations in isolation.” (Clauson
v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.) “The mere allegation
an intentional tort was committed is not sufficient to warrant an award of
punitive damages. Not only must there be circumstances of oppression, fraud or
malice, but facts must be alleged in the pleading to support such a claim.” (Grieves
v. Superior Court (1984) 157 Cal.App.3d 159, 166.) Something more than the
mere commission of a tort is always required for punitive damages. There must
be circumstances of aggravation or outrage, such as spite or ‘malice,’ or a
fraudulent or evil motive on the part of the defendant, or such a conscious and
deliberate disregard of the interests of others that his conduct may be called
willful or wanton.” (Taylor v. Superior Court (1979) 24 Cal.3d 890,
894.)
Defendants argue that Plaintiff’s
request for punitive damages is insufficiently pleaded, and therefore, should
be stricken. To support this contention, Defendants assert that punitive
damages are not recoverable in breach of contract actions, not are they
recoverable in a fraud action where the fraud case of action states no more in
compensatory damages than are recoverable in the related contract action. In opposition, Plaintiff merely alleges it has
properly pled a cause of action for fraud.
Here, where the Court is sustaining
causes of action predicated on intentional torts with leave to amend, the motion
to strike is mooted pending the filing of a second amended complaint.