Judge Salvatore Sirna, Case Number: 23PSCV02024, Date: 2024-01-08 Tentative Ruling

Judge: Salvatore Sirna, Case: 23PSCV02024, Date: 2024-01-08 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 a tentative ruling by calling the clerk in Department G at (909) 802-1104 prior to 8:30 a.m. the morning of the hearing.

Case Number: 23PSCV02024 Hearing Date: March 25, 2024 Dept: G

Defendants California Pools, Inc., Ryder Wayne Steimle, and Pacific Flux, Inc.’s Demurrer to Plaintiff’s First Amended Complaint

Respondent: Plaintiff Scott Easley

Defendants California Pools, Inc., Ryder Wayne Steimle, and Pacific Flux, Inc.’s Motion to Strike Portions of Plaintiff’s First Amended Complaint

Respondent: Plaintiff Scott Easley

TENTATIVE RULING

Defendants California Pools, Inc., Ryder Wayne Steimle, and Pacific Flux, Inc.’s Demurrer to Plaintiff’s First Amended Complaint is SUSTAINED IN PART, OVERRULED IN PART.

The Demurrer is SUSTAINED with twenty (20) days leave to amend as to the Third and Fourth Causes of Action, and OVERRULED as to the First, Second, and Sixth Causes of Action.

Defendants California Pools, Inc., Ryder Wayne Steimle, and Pacific Flux, Inc.’s Motion to Strike Portions of Plaintiff’s First Amended Complaint is deemed MOOT.

BACKGROUND

This is an action for breach of contract arising from a franchise agreement. From the 1970s to 1990, Roy Easley was a franchisee of Defendant California Pools, Inc. (CPI) On March 30, 1990, Roy Easley entered into a franchise termination agreement with CPI in which Easley agreed to sell the franchise back to CPI for $375,100. According to their agreement, CPI agreed to make the payments in increments of $300 for each pool it constructed in the area that Roy Easley had previously worked.

While CPI made payments pursuant to the agreement, CPI allegedly concealed the total number of eligible pools it constructed from Roy Easley. CPI then allegedly sold the franchise to Defendant Sweetwater Pools, Inc. (Sweetwater Pools) and failed to pay the remaining amount owed to Roy Easley. In April 2021, Roy Easley died.

On July 6, 2023, Scott Easley, individually and as successor-in-interest to Roy Easley, representative of the Estate of Roy Easley, and trustee of the Roy Easley Living Trust, filed a complaint against Defendants CPI, Ryder Wayne Steimle, Sweetwater Pools, Wyatt Stewart, Vanz M. Steimle, Pacific Flux, Inc. (Pacific Flux), and Does 1-15, alleging the following causes of action: (1) breach of contract, (2) concealment, (3) conspiracy, (4) interference with contractual relations, (5) accounting, and (6) elder abuse. On January 8, the court sustained a demurrer to the Complaint by CPI, Ryder Steimle, and Pacific Flux (collectively, CPI Defendants).

On February 9, 2024, Scott Easley filed a First Amended Complaint (FAC) against the same defendants alleging the same causes of action.

On February 26, 2024, the CPI Defendants filed the present demurrer and motion to strike. Prior to filing on February 22, the CPI Defendants’ counsel met and conferred telephonically with Scott Easley’s counsel and was unable to reach a resolution. (Boufadel Decl., ¶ 7.)

A hearing on the demurrer and motion to strike is set for March 25, 2024, along with a case management conference and OSC Re: Failure to File Proof of Service.

ANALYSIS

CPI Defendants demur to Scott Easley’s first cause of action (breach of contract), second cause of action (concealment), third cause of action (conspiracy), fourth cause of action (interference with contractual relations), and sixth cause of action (elder abuse). For the following reasons, the court SUSTAINS the CPI Defendants’ demurrer to Scott Easley’s third and fourth causes of action with leave to amend and OVERRULES their demurrer to Scott Easley’s first, second, and sixth causes of action.

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.)

Breach of Contract (First Cause of Action)

The CPI Defendants argue Scott Easley’s first cause of action for breach of contract fails to plead sufficient facts to state a claim. The court disagrees.

Legal Standard

To state a cause of action for breach of contract, a 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.) “[T]he vital elements of a cause of action based on contract are mutual assent (usually accomplished through the medium of an offer and acceptance) and consideration.” (Division of Labor Law Enforcement v. Transpacific Transportation Co. (1977) 69 Cal.App.3d 268, 275.)

Discussion

In this case, the CPI Defendants argue the FAC fails to allege facts establishing how CPI breached the franchise termination agreement. The FAC alleges CPI agreed to pay Roy Easley a total of $375,000 in installments by paying a total of $200 and $100 for each pool sold and constructed within the boundaries of the “Glendora Office.” (FAC, ¶ 20.) The FAC then alleges that while the CPI made partial payments pursuant to the agreement, CPI failed to make payments at the rate of $200 per pool sold and constructed within the boundaries of the Glendora Office. (FAC, ¶ 21.) Based on this allegation, the court finds Scott Easley has adequately alleged CPI breached the agreement by failing to pay per pool at the agreed-upon rate.

Accordingly, the CPI Defendants’ demurrer to this cause of action is OVERRULED.

Concealment (Second Cause of Action)

The CPI Defendants contend Scott Easley’s second cause of action for concealment fails to plead sufficient facts to state a claim. The court disagrees.

Legal Standard

“[T]he elements of a cause of action for fraud based on concealment are: ‘(1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.’” (Kaldenbach v. Mutual of Omaha Life Ins. Co. (2009) 178 Cal.App.4th 830, 850, quoting Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 665-666.)¿ Furthermore, 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.)

Discussion

In this case, the CPI Defendants contend Scott Easley has failed to allege their alleged concealment with the requisite specificity. But “[l]ess specificity in pleading fraud is required ‘when it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy.’” (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469, quoting Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 217.) Here, the FAC alleges that the CPI Defendants intentionally concealed the actual number of pools built in the Glendora area. (FAC, ¶ 26.) The FAC also alleges that the CPI Defendants intentionally concealed the fact that CPI sold its franchise to Sweetwater Pools. (FAC, ¶ 26.) Because these allegations involve the CPI Defendants’ own conduct, Scott Easley is not required to specifically plead when, where, and how the CPI Defendants concealed information regarding the actual number of pools constructed and the new franchise agreement with Sweetwater Pools.

The CPI Defendants also contend Scott Easley has failed to demonstrate the CPI Defendants were under a duty of disclosure. In addition to transactions involving fiduciary or confidential relationships, a duty of disclosure arises when “ (1) the defendant makes representations but does not disclose facts which materially qualify the facts disclosed, or which render his disclosure likely to mislead;(2) the facts are known or accessible only to defendant, and defendant knows they are not known to or reasonably discoverable by the plaintiff; [or] (3) the defendant actively conceals discovery from the plaintiff.” (Warner Constr. Corp. v. City of Los Angeles (1970) 2 Cal.3d 285, 294.) Here, the FAC alleges facts involving the actual number of pools built in the Glendora area were only known by the CPI Defendants and that the CPI Defendants knew the facts were not known or reasonably discoverable by Roy Easley. (FAC, ¶ 26.) Based on these allegations, Scott Easley has adequately established the CPI Defendants were under a duty to disclose the actual number of pools they constructed.

Accordingly, the CPI Defendants’ demurrer to this cause of action is OVERRULED.

Conspiracy (Third Cause of Action)

The CPI Defendants maintain Scott Easley’s third cause of action for conspiracy fails because it is not an independent cause of action. It is well established that “[c]onspiracy is not an independent cause of action, but rather a doctrine imposing liability for a tort upon those involved in its commission.” (1-800 Contacts, Inc. v. Steinberg (2003) 107 Cal.App.4th 568, 590.) Here, the FAC attempts to allege conspiracy as a stand-alone cause of action and fails to identify which tort it is seeking to apply civil conspiracy liability. (FAC, ¶ 29-31.)

Accordingly, the CPI Defendants’ demurrer to this cause of action is SUSTAINED. Scott Easley is granted leave to amend the FAC by including these conspiracy allegations where proper in the remaining causes of action.

Interference with Contractual Relations (Fourth Cause of Action)

The CPI Defendants argue Scott Easley’s fourth cause of action for interference with contractual relations fails to plead sufficient facts to state a claim. The court agrees.

Legal Standard

The elements of a cause of action for intentional interference with contractual relations are “(1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (I-CA Enterprises, Inc. v. Palram Americas, Inc. (2015) 235 Cal.App.4th 257, 289.)

Discussion

In this case, the CPI Defendants argue this cause of action is barred by the applicable two-year statute of limitations. But the court must first determine if Scott Easley’s cause of action is sufficiently pled. Here, the FAC fails to allege how Ryder Steimle and Pacific Flux engaged in intentional acts that were designed to induce a breach or disruption to Roy Easley and CPI’s contractual relationship. While the FAC alleges they engaged in conduct “to interfere and disrupt the contractual relationship,” it fails to specifically allege (1) what their conduct was and (2) how their conduct was intentionally aimed at disrupting Roy Easley and CPI’s contractual relationship. (FAC, ¶ 33.) Furthermore, the FAC fails to allege how their relationship was actually breached or disrupted. While the FAC alleges CPI still owes payments to Roy Easley’s estate, it fails to allege when and how CPI stopped making the payments. In fact, the FAC appears to allege that CPI is still making payments on pools that have been recently constructed. (FAC, ¶ 15.)

Accordingly, the CPI Defendants’ demurrer to this cause of action is SUSTAINED with leave to amend.

Elder Abuse (Sixth Cause of Action)

The CPI Defendants contend Scott Easley’s sixth cause of action for elder abuse fails to plead sufficient facts to state a claim. The court disagrees.

Legal Standard

Pursuant to the Elder Abuse and Dependent Adult Civil Protection Act (EADACPA), an elder or dependent adult may bring a civil action for physical abuse, neglect, or abandonment pursuant to Welfare and Institutions Code section 15657. An elder or dependent adult may also bring a civil action for financial abuse pursuant to Welfare and Institutions Code section 15657.5. For the purposes of the EADACPA, “elder” is defined as “any person residing in this state, 65 years of age or older.” (Welf. & Inst. Code, § 15610.27.) “Dependent adult” is defined as any person “regardless of whether the person lives independently, between the ages of 18 and 64 years who resides in this state and who has physical or mental limitations that restrict his or her ability to carry out normal activities or to protect his or her rights, including, but not limited to, persons who have physical or developmental disabilities, or whose physical or mental abilities have diminished because of age.” (Welf. & Inst. Code, §15610.23, subd. (a).)

The EADACPA defines financial abuse as the taking, secreting, appropriating, obtaining, or retaining of an elder or dependent adult’s real or personal property “for a wrongful use or with intent to defraud, or both.” (Welf. & Inst. Code, § 15610.30, subd. (a).) Property is deemed taken for a wrongful use if “the person or entity knew or should have known that this conduct is likely to be harmful to the elder or dependent adult.” (Welf. & Inst. Code, § 15610.30, subd. (b).) Financial abuse may also occur when the taking, secreting, appropriating, obtaining, or retaining of an elder or dependent adult’s real or personal property is the result of undue influence as defined in Welfare and Institutions Code section 15610.70. (Welf. & Inst. Code, § 15610.30, subd. (a)(3).)

Discussion

In this case, Scott Easley’s sixth cause of action for elder abuse is based on the allegations supporting Scott Easley’s second cause of action for concealment. In particular, the FAC alleges that “[d]espite knowing that Roy Easley was owed money under the Agreement, these defendants hid information and money from Roy Easley and refused to pay Roy Easley in an attempt to defraud him of the proper amount of money owed under the Agreement.” (FAC, ¶ 37.) The CPI Defendants contend the FAC fails to allege fraud with specificity. But as noted above, the court has found that the FAC properly alleges a cause of action for concealment against the CPI Defendants.

Accordingly, the CPI Defendants’ demurrer to this cause of action is OVERRULED.

CONCLUSION

Based on the foregoing, the CPI Defendants’ demurrer to Scott Easley’s FAC is SUSTAINED IN PART with twenty (20) days leave to amend as to the third and fourth causes of action. The demurrer is OVERRULED IN PART as to the first, second, and sixth causes of action.

Based on the above analysis, the CPI Defendants’ motion to strike portions of Scott Easley’s FAC is deemed MOOT.