Judge Salvatore Sirna, Case 22PSCV01728 2023-03-02 Tentative Ruling

Judge: Salvatore Sirna, Case: 22PSCV01728, Date: 2023-03-02 Tentative Ruling

The Court may change tentative rulings at any time. Therefore, counsel are advised to check this website periodically to determine whether any changes or updates have been made to the tentative ruling. Counsel may submit on the tentative rulings by calling the clerk in Department G at (909) 802-1104 prior to 8:30 a.m. the morning of the hearing.

Case Number: 22PSCV01728 Hearing Date: March 2, 2023 Dept: G

Defendants Atama Premier Foods LLC and Erwan Sutanto’s Demurrer to Plaintiff’s Complaint

Respondent: Plaintiff Tanera Transport LLC

TENTATIVE RULING

Defendants Atama Premier Foods LLC and Erwan Sutanto’s Demurrer to Plaintiff’s Complaint is SUSTAINED with twenty (20) days leave to amend.

BACKGROUND

This is a breach of contract action arising from shipment agreements. Between February and August 2022, Plaintiff Tanera Transport LLC entered into written agreements with Defendant Atama Premier Foods LLC (Atama Premier Foods) in which Plaintiff agreed to ship goods from Asian ports to Atama Premier Foods’s warehouses in exchange for payment. Plaintiff alleges Atama Premier Foods breached the agreement by failing to pay the full price for services in the amount of $128,987.04.

On November 8, 2022, Plaintiff filed a complaint against Atama Premier Foods and Erwan Sutanto (Sutanto, collectively Defendants) and Does 1-10, alleging the following causes of action: (1) breach of written contract, (2) account stated, (3) services rendered, (4) fraud, and (5) civil theft.

On January 9, 2023, Defendants filed the present demurrer. Prior to filing on January 5, Defendants’ counsel met and conferred telephonically with Plaintiff’s counsel and was unable to reach a resolution. (Niu Decl., ¶ 2-3.)

A hearing on the demurrer is set for March 2, 2023. A case management conference and OSC Re: Failure to File Proof of Service are also set for April 6.

ANALYSIS

Defendants demur to Plaintiff’s entire complaint as to Sutanto and demur to the fourth cause of action (fraud) and fifth cause of action (civil theft) against Atama Premier Foods. For the following reasons, the court SUSTAINS Defendants’ demurrer to Plaintiff’s entire complaint as to Sutanto and to the fifth cause of action against Atama Premier Foods with leave to amend. The court also OVERRULES Defendants’ demurrer to Plaintiff’s fourth cause of action against Atama Premier Foods.

Legal Standard

A party may demur to a complaint on the grounds that it “does not state facts sufficient to constitute a cause of action.” (Code Civ. Proc., § 430.10, subd. (e).) A demurrer tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747 (Hahn).) 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.)

Defendant Sutanto

Defendants argue Plaintiff’s complaint fails to allege sufficient facts against Sutanto. The court agrees.

“Two requirements must be met to invoke the alter ego doctrine: (1) ‘[T]here must be such a unity of interest and ownership between the corporation and its equitable owner that the separate personalities of the corporation and the shareholder do not in reality exist’; and (2) ‘there must be an inequitable result if the acts in question are treated as those of the corporation alone.’” (Turman v. Superior Court of Orange County (2017) 17 Cal.App.5th 969, 980-981, quoting Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538.) When making alter ego allegations, pleading with particularity is not required as a Plaintiff need only allege “ultimate rather than evidentiary facts.” (Rutherford Holdings, LLC v. Plaza del Rey (2014) 223 Cal.App.4th 221, 236, quoting Burks v. Poppy Construction Co. (1962) 57 Cal.2d 463, 474.)

In this case, Plaintiff alleges Sutanto is the alter ego of Atama Premier Foods. (Complaint, ¶ 3.) However, in the alter ego section of the Complaint, Plaintiff alleges Sutanto is the alter ego of Plaintiff, not Atama Premier Foods. (Complaint, ¶ 6-9.) Because there are no other allegations as to Sutanto and Plaintiff has not established Sutanto is the alter ego of Atama Premier Foods, Defendants’ demurrer to the entire Complaint as to Sutanto is SUSTAINED with leave to amend.

Fraud (Fourth Cause of Action)

Defendants contend Plaintiff’s fourth cause of action for fraud fails to plead sufficient facts to state a claim. The court disagrees.

“The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638, quoting 5 Witkin, Summary of Cal. Law (9th ed. 1988) Torts, § 676, p. 778.) 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. (Id., at p. 645.)

Here, Defendants contend Plaintiff failed to plead the alleged fraud with specificity, including the who, when, how, where, and by what means the alleged misrepresentation occurred. On August 26, 2022, Plaintiff alleges Atama Premier Foods, through Sutanto, tendered a $16,000 check to Plaintiff as payment on its debt and four days later, issued a stop payment on the check. (Complaint, ¶ 25-27.) Plaintiff alleges Atama Premier Foods intentionally concealed or misrepresented the fact that there were sufficient funds to cover its payment to Plaintiff or that it had any intention of making the payment. (Complaint, ¶ 27.) Because Plaintiff alleges specific facts establishing Atama Premier Foods either intentionally wrote a bad check or cancelled it, the court finds Plaintiff has alleged fraud with the requisite specificity.

Accordingly, Defendants’ demurrer to Plaintiff’s fourth cause of action is OVERRULED.

Civil Theft (Fifth Cause of Action)

Defendants maintain Plaintiff’s fifth cause of action for civil theft fails to plead sufficient facts to state a claim. The court agrees.

Penal Code section 496 provides in relevant part as follows:

“(a) Every person who buys or receives any property that has been stolen or that has been obtained in any manner constituting theft or extortion, knowing the property to be so stolen or obtained, or who conceals, sells, withholds, or aids in concealing, selling, or withholding any property from the owner, knowing the property to be so stolen or obtained, shall be punished by imprisonment in a county jail for not more than one year, or imprisonment pursuant to subdivision (h) of Section 1170….

…

(c) Any person who has been injured by a violation of subdivision (a) or (b) may bring an action for three times the amount of actual damages, if any, sustained by the plaintiff, costs of suit, and reasonable attorney’s fees.” (Pen. Code, § 496, subd. (a), (c).)

In this case, Plaintiff alleges Atama Premier Foods “received Goods that were obtained by theft of the Services” and “knew the Goods were obtained by theft of the Services.” (Complaint, ¶ 34-35.) However, as Defendants note, “theft of services” is not grounds for liability pursuant to Penal Code section 496. (Lacagnina v. Comprehend Systems, Inc. (2018) 25 Cal.App.5th 955, 970.) Accordingly, Defendants’ demurrer to Plaintiff’s fifth cause of action is SUSTAINED with leave to amend.

CONCLUSION

Based on the foregoing, Defendants’ demurrer to Plaintiff’s Complaint is SUSTAINED with twenty (20) days’ leave to amend as to all causes of action against Sutanto and as to the fifth cause of action against Atama Premier Foods.

The demurrer is OVERRULED as to the fourth cause of action against Atama Premier Foods.