Judge: Salvatore Sirna, Case: 22PSCV00496, Date: 2022-10-11 Tentative Ruling

Case Number: 22PSCV00496    Hearing Date: October 11, 2022    Dept: A

Defendants William Chun Tseng, International Professional Management Organization of U.S.A., Supermed Health Inc., and Southwestern Saint Paul University’s DEMURRER TO PLAINTIFF’S COMPLAINT

Respondent: Plaintiff Wei Guo

       I.            TENTATIVE RULING

Defendants William Chun Tseng, International Professional Management Organization of U.S.A., Supermed Health Inc., and Southwestern Saint Paul University’s demurrer to Plaintiff’s Complaint is OVERRULED.

    II.            BACKGROUND

Breach of Contract and Fraud. Plaintiff alleges the Defendants William Chun Tseng (Tseng), International Professional Management Organization of U.S.A. (IPMO), Supermed Health Inc. (Supermed), and Southwestern Saint Paul University (Southwestern) promised to provide her and her son U.S. passports and social security cards for a sum of $400,000.  Defendants promised a full refund if the passports or social security cards were invalid. After Plaintiff paid $350,000 to Defendants, they provided Plaintiff with passports and social security cards. When Plaintiff discovered the documents were invalid, Defendants refused to refund Plaintiff’s money in full. The Complaint, filed May 23, 2022, asserts causes of action for:

1.      Fraud

2.      Breach of contract and implied covenant of good faith and fair dealing

3.      Conversion

4.      Common count (money had and received)

5.      Violation of Business & Professions Code section 17200 et seq.

Hearing on demurrer is set for October 11, 2022. CMC is set for October 17, 2022.

 III.            ANALYSIS

Defendants William Chun Tseng, International Professional Management Organization of U.S.A., Supermed Health Inc., and Southwestern Saint Paul University’s demurrer to Plaintiff’s Complaint is OVERRULED. Defendants have 10 days to file their answer.

Judicial Notice

Defendants request and the court takes judicial notice of Plaintiff’s complaint. (Evid. Code, §§ 452-453.)

Legal Standard

A demurrer tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts accept all well pleaded facts as true. (Fox v. JAMDAT Mobile, Inc. (2010) 185 Cal.App.4th 1068, 1078.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) “The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.” (Hahn, supra, at p. 747.)

Defendants demur to the Plaintiff’s first cause of action for fraud, contending Plaintiff fails to state facts sufficient to constitute fraud because the pleadings are uncertain, do not establish justifiable reliance, and contain no allegations of fraudulent representations by the Defendants IPMO, Supermed, and Southwestern.

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.)

Fraud actions are subject to strict requirements of particularity in pleading. (Goldrich v. Natural Y Surgical Specialties, Inc. (1994) 25 Cal.App.4th 772, 782.) Fraud must be pled with specificity rather than with general and conclusory allegations. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) The specificity requirement means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made, and in the case of a corporate defendant, the plaintiff must allege the names of the person who made the representations, their authority to speak

on behalf of the corporation, to whom they spoke, what they said or wrote, and when the representation was made. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

The court finds Plaintiff’s cause of action for fraud sufficiently pled with reasonable particularity because Plaintiff stated allegations that establish Defendant Tseng made oral representations to her from 2020 to 2021 and provided an agreement, notes, and letters to support his (Defendant Tseng) claims that he could obtain passports and social security cards for Plaintiff, or Defendant Tseng refund Plaintiff’s money.  Plaintiff stated that in March 2020, Defendant Tseng told her he “would obtain U.S. passports and related social security cards for Plaintiff and her son through a process that entailed applying for an Honorary Doctoral Degree from Columbia University and collecting Plaintiff’s biometrics through a place authorized by the United States Citizenship and Immigration Services (“USCIS”) in exchange for the sum of $400,000.00.” (Compl., ¶ 17)

On March 10, 2020, Defendant Tseng provided an agreement on IPMO’s letterhead and told Plaintiff “that if for any reason the passports or social security cards that he would obtain for her are deemed to be invalid, then he would personally issue her a full refund for all amounts paid.” (Compl., ¶ 18) Additionally, Defendant Tseng provided real property he did not own as collateral to guarantee his performance. (Compl., ¶ 18) When Plaintiff discovered the documents were invalid, Defendant Tseng advised Plaintiff the documents would become valid when she filed for taxes after one year and provided letters purported to be from the United Nations Office for the Coordination of Humanitarian Affairs authorizing IPMO to provide Plaintiff with valid passports. (Compl., ¶ 23-24)

In May 2021, Defendant Tseng informed Plaintiff that her documents were not valid and promised to provide her with a full refund.  On October 15, 2021, Defendant Tseng provided Plaintiff with a note promising to refund the amount of $275,000 by the end of 2021. (Compl., ¶ 25-26)

The court finds that these facts, as set forth in the complaint, establish how, when, where, to whom, and by what means Defendant Tseng made the alleged fraudulent representations.  Accordingly, Plaintiff met the strict pleading requirements for fraud  causes of action.

The court also finds that Plaintiff sufficiently alleged facts to establish that Defendant Tseng had authority to make the representations on behalf of IPMO, Supermed, and Southwestern. Plaintiff pled that these entities were solely owned and operated by Defendant Tseng (Compl., ¶ 10), that they were the alter egos of Defendant Tseng (Compl., ¶ 12), that Plaintiff received and signed an agreement with Defendant Tseng on IPMO’s official letterhead (Compl., ¶ 18), and that Plaintiff made payments to Southwestern and IPMO at Defendant Tseng’s direction. (Compl., ¶ 20) Accordingly, Plaintiff pled sufficient facts to establish IPMO, Supermed, and Southwestern as proper defendants in this case.

Lastly, Plaintiff pled facts to establish that she justifiably relied on Defendant Tseng’s representations. Defendants argue that her reliance was unjustified because a U.S. citizen can obtain a passport for less than $200 and non-citizens cannot obtain passports. However, Plaintiff stated she was told by another defendant in this case that Defendants Tseng and IPMO were “highly experienced and qualified in acquiring U.S. passports and related social security cards.” (Compl., ¶ 16)  Plaintiff detailed how Defendant Tseng described the process by which he would obtain her documents through an application for an honorary doctoral degree from Columbia University and by submitting biometrics through USCIS. (Compl., ¶ 17) Additionally, Plaintiff signed an agreement with Defendant Tseng on IPMO letterhead in front of a notary public (Compl., ¶ 19), received an assurance that Defendant Southwestern would provide valid social security cards (Compl., ¶ 21), and was provided letters purportedly from the United Nations Office for the Coordination of Humanitarian Affairs that assured her Defendant IPMO was authorized to issue her passports. (Compl., ¶ 24) By alleging these facts, the court finds that Plaintiff sufficiently pled her cause of action for fraud.

Therefore, Defendants’ demurrer to the Plaintiff’s cause of action for fraud is OVERRULED.

Pursuant to C.R.C. Rule 3.1320(g), Defendants Tseng, IPMO, Supermed, and Southwestern have 10 days to file their answer.