Judge: Salvatore Sirna, Case: 23PSCV02093, Date: 2024-01-24 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: 23PSCV02093    Hearing Date: January 24, 2024    Dept: G

Defendants HLP ED Foundation, SVG Training Foundation, Inc., and San Gabriel Career Foundation, Inc.’s Demurrer to the First Amended Complaint

Respondent: Plaintiffs Anthony Duarte and Hacienda La Puente Unified School District

Defendants HLP ED Foundation, SVG Training Foundation, Inc., and San Gabriel Career Foundation, Inc.’s Motion to Strike Portions of the First Amended Complaint

Respondent: Plaintiffs Anthony Duarte and Hacienda La Puente Unified School District

Defendant Cynthia Parulan-Colfer’s Demurrer to Plaintiffs’ First Amended Complaint

Respondent: Plaintiffs Anthony Duarte and Hacienda La Puente Unified School District

Defendant Cynthia Parulan-Colfer’s Motion to Strike Portions of the First Amended Complaint

Respondent: Plaintiffs Anthony Duarte and Hacienda La Puente Unified School District

TENTATIVE RULING

Defendants HLP ED Foundation, SVG Training Foundation, Inc., and San Gabriel Career Foundation, Inc.’s Demurrer to the First Amended Complaint is SUSTAINED IN PART with twenty (20) days leave to amend as to the first, second, third, fifth, sixth, and eleventh causes of action and OVERRULED IN PART as to the fourth, seventh, eighth, ninth, tenth, and twelfth causes of action.

Defendants HLP ED Foundation, SVG Training Foundation, Inc., and San Gabriel Career Foundation, Inc.’s Motion to Strike Portions of the First Amended Complaint is deemed MOOT.

Defendant Cynthia Parulan-Colfer’s Demurrer to Plaintiffs’ First Amended Complaint is SUSTAINED IN PART with twenty (20) days leave to amend as to the fifth, sixth, and eleventh causes of action, as well as Plaintiff Anthony Duarte’s first cause of action. Furthermore, the Demurrer is OVERRULED IN PART as to the first, fourth, seventh, eighth, ninth, and tenth causes of action.

Defendant Cynthia Parulan-Colfer’s Motion to Strike Portions of the First Amended Complaint is deemed MOOT.

BACKGROUND

This is an action arising from alleged misappropriation of non-profit funds. Defendant HLP ED Foundation (HLP ED) was a non-profit public benefit corporation initially founded in August 2008. Its alleged purpose was to provide scholarships for the students of Hacienda La Puente Unified School District (HLPUSD) and fund special projects that enhanced students’ academic and co-curricular activities. Since HLP ED’s founding, Defendant Cynthia Parulan-Colfer served as a director. In 2016 and 2018, Parulan-Colfer and another HLP ED board member allegedly used HLP ED’s funds to provide scholarships for Parulan-Colfer’s children outside the normal scholarship review process. In 2019, HLP ED’s funds were allegedly used for Parulan-Colfer’s retirement party. And in July 2020, HLP ED’s funds were allegedly used to pay Parulan-Colfer’s husband’s law firm for legal services.

In September 2020, HLP ED was dissolved and Parulan-Colfer allegedly transferred its remaining funds to other non-profits founded by Parulan-Colfer including Defendants SVG Training Foundation, Inc. (SVG Training Foundation) and San Gabriel Career Foundation, Inc. (San Gabriel Career Foundation). As a result, at least one of HLP ED’s scholarship recipients was unable to cash a scholarship check.

On July 12, 2023, Anthony Duarte and HLPUSD filed a complaint against Parulan-Colfer, HLP ED, SVG Training Foundation, San Gabriel Career Foundation, and Does 1-50, alleging the following causes of action: (1) breach of fiduciary obligations and duties, (2) breach of contract, (3) breach of the covenant of good faith and fair dealing, (4) fraud, (5) conversion, (6) breach of charitable trust, (7) money had and received, (8) unfair business practices, (9) intentional interference with prospective economic advantage, (10) declaratory relief, and (11) accounting.

On October 3, 2023, Duarte and HLPUSD filed a First Amended Complaint (FAC) against the same defendants alleging the same causes of action with an additional twelfth cause of action for aiding and abetting breach of fiduciary duties.

On November 6, 2023, HLP ED, SVG Training Foundation, and San Gabriel Career Foundation (collectively, Entity Defendants) filed one of the two present demurrers and motions to strike. On the same day, Parulan-Colfer filed the other demurrer and motion to strike. Prior to filing on October 9, counsel for Parulan-Colfer and the Entity Defendants telephonically met and conferred with counsel for Duarte and HLPUSD and were unable to reach a resolution. (Watts Decl., ¶ 4; Brethen Decl., ¶ 2.) On November 14, the Entity Defendants filed a notice of joinder to Parulan-Colfer’s demurrer and motion to strike.

A hearing on the present motions is set for January 24, 2024, with a case management conference.

ANALYSIS

Parulan-Colfer demurs to Duarte and HLPUSD’s first cause of action (breach of fiduciary obligations and duties), fourth cause of action (fraud), fifth cause of action (conversion), sixth cause of action (breach of charitable trust), seventh cause of action (money had and received), eighth cause of action (unfair business practices), ninth cause of action (intentional interference with prospective economic advantage), tenth cause of action (declaratory relief), and eleventh cause of action (accounting). In addition to the causes of action demurred to by Parulan-Colfer, the Entity Defendants also demur to Duarte and HLPUSD’s second cause of action (breach of contract), third cause of action (breach of the covenant of good faith and fair dealing), and twelfth cause of action (aiding and abetting breach of fiduciary duties).

For the following reasons, the demurrers are SUSTAINED IN PART, OVERRULED IN PART as follows:

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 Fiduciary Obligations and Duties (First Cause of Action)

Parulan-Colfer and the Entity Defendants argue Duarte and HLPUSD’s first cause of action for breach of fiduciary obligations and duties fails as a matter of law because HLP ED and Parulan-Colfer did not owe any fiduciary duty to Duarte and HLPUSD. As to the Entity Defendants, the court agrees. As to Parulan-Colfer, the court agrees with regards to Duarte’s cause of action but disagrees with regards to HLPUSD’s cause of action.

Legal Standard

The elements of a cause of action for breach of fiduciary duty are the existence of a fiduciary relationship, breach of fiduciary duty, and damages.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 820.)

Parulan-Colfer’s Relationship with HLPUSD

The FAC alleges Parulan-Colfer owed HLPUSD fiduciary duties as HLPUSD’s employee. (FAC, ¶ 55.) Parulan-Colfer argues the law is contrary to this assertion, citing O’Byrne v. Santa Monica-UCLA Medical Center (2001) 94 Cal.App.4th 797 (O’Byrne), and Amid v. Hawthorne Community Medical Group, Inc. (1989) 212 Cal.App.3d 1383 (Amid). Both cases recognize that employer-employee relationships are generally not fiduciary ones. (O’Byrne, supra, 94 Cal.App.4th at p. 811; Amid, supra, 212 Cal.App.3d at p. 1391.) But notwithstanding this general rule, “officers of corporations who participate in the management of the corporation are considered fiduciaries as a matter of law.” (Los Angeles Memorial Coliseum Com. v. Insomniac, Inc. (2015) 233 Cal.App.4th 803, 834 (LAMCC); see also Angelica Textile Services, Inc. v. Park (2013) 220 Cal.App.4th 495, 509.) Furthermore, an employee may have a fiduciary relationship with an employer if the employee is acting as the employer’s authorized agent. (LAMCC, supra, 233 Cal.App.4th at p. 833.) In LAMCC, the court held an event coordinator for the Los Angeles Memorial Coliseum Commission had a fiduciary relationship with the commission because the event coordinator “had voluntarily undertaken to act on their behalf and for their benefit in negotiating the rental agreements with defendants.” (Id., at p. 834.)

Here, the FAC does not merely allege Parulan-Colfer was HLPUSD’s employee. It specifically alleges Parulan-Colfer became HLPUSD’s superintendent in 2013 and left their employ in 2020. (FAC, ¶ 12, 18.) Pursuant to Education Code section 35035, subdivision (a), the superintendent of a school district serves as “the chief executive officer of the governing board of the school district.” Thus, by alleging Parulan-Colfer was an executive officer for HLPUSD, the FAC has adequately alleged the existence of a fiduciary relationship.

Accordingly, Parulan-Colfer’s demurrer to HLPUSD’s cause of action on this ground is OVERRULED.

HLP ED’s Relationship with HLPUSD and Duarte

The FAC alleges HLP ED owed fiduciary duties to HLPUSD, Duarte, and student beneficiaries as a result of soliciting and accepting charitable contributions. (FAC, ¶ 55.) The FAC also alleges Parulan-Colfer owed similar fiduciary duties by acting as HLP ED’s agent. (FAC, ¶ 55.) HLP ED argues there is no authority establishing HLP ED owed fiduciary duties to third parties.

In opposition, HLPUSD and Duarte argue HLP ED’s fiduciary duties arose from the creation of a charitable trust pursuant to Business and Professions Code section 17510.8. This provision recognizes the existence of “a fiduciary relationship between a charity or any person soliciting on behalf of a charity, and the person from whom a charitable contribution is being solicited.” (Bus. & Prof. Code, § 17510.8.) It also recognizes that “[t]he acceptance of charitable contributions by a charity or any person soliciting on behalf of a charity establishes a charitable trust and a duty on the part of the charity and the person soliciting on behalf of the charity to use those charitable contributions for the declared charitable purposes for which they are sought.” (Bus. & Prof. Code, § 17510.8.)

Here, the FAC alleges HLP ED was organized as a non-profit public benefit corporation and acted as a charitable trust. (FAC, ¶ 77.) But as noted below with regards to the sixth cause of action, the FAC failed to establish Duarte or HLPUSD have standing to sue for breach of charitable trust. Accordingly, Parulan-Colfer’s demurrer to Duarte’s cause of action on this ground and the Entity Defendants’ demurrer to this cause of action are SUSTAINED with leave to amend for the same reasons.

Breach of Contract (Second Cause of Action)

The Entity Defendants contend HLPUSD’s second cause of action for breach of contract fails to plead sufficient facts to state a claim. The court agrees.

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 Entity Defendants contend the FAC fails to allege the existence of a contract. The FAC alleges the articles of incorporation for HLP ED formed a contract between HLP ED and HLPUSD. (FAC, ¶ 60.) In support of this allegation, HLPUSD cites Bushansky v. Soon-Shiong (2018) 23 Cal.App.5th 1000, for the premise that articles or certificates of incorporation are “a contractual agreement between the corporation and its shareholders.” (Id., at p. 1005.) But “unlike for-profit corporations, charitable organizations do not have shareholders with ownership interests in the charity.” (Turner v. Victoria (2023) 15 Cal.5th 99, 126.) Here, the articles of incorporation state HLP ED has no members and the FAC fails to allege otherwise. (FAC, Ex. A.) Thus, it is unclear who the articles of incorporation formed a contract with.

HLPUSD contends this case is comparable to Stocco v. Gemological Institute of America, Inc. (S.D. Cal. 2013) 975 F.Supp.2d 1170, 1180 (Stocco), where the court found plaintiffs had adequately alleged a cause of action for breach of contract. In that case, a gemological institute and chamber of commerce signed articles of incorporation that formed a science foundation. (Id., at p. 1177.) In forming the foundation, the chamber of commerce agreed to provide economic and financial support to third-party plaintiffs through the foundation in exchange for plaintiffs’ construction of a gem grading lab or gem drop-off location. (Id., at p. 1180.) As part of the agreement, plaintiffs would also be allowed to issue gem grading certificates authorized by the gemological institute. (Ibid.) And at the time the foundation was formed, the third-party plaintiffs were operating as an entity wholly owned by the gemological institute. (Ibid.) But while Stocco involved a clear agreement between the gemological institute and chamber of commerce to form a foundation, such an agreement is lacking here. In fact, the FAC does not even allege who was responsible for forming HLP ED initially and merely states Parulan-Colfer was the director when HLP ED was founded. (FAC, ¶ 11.)

HLPUSD also contends the articles of incorporation formed a contract between HLP ED and the state but fails to provide any legal authority to support this assertion. Because the FAC fails to establish that HLP ED’s articles of incorporation constitute a binding contract, the FAC cannot rely on them to claim to HLPUSD is a third-party beneficiary.

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

Breach of the Covenant of Good Faith and Fair Dealing (Third Cause of Action)

The Entity Defendants maintain HLPUSD’s third cause of action for breach of the covenant of good faith and fair dealing fails to plead sufficient facts to state a claim. Because this cause of action requires the existence of a contract, it fails for the same reasons noted above with regard to the second cause of action. (See Racine & Laramie, Ltd. v. Department of Parks & Recreation (1992) 11 Cal.App.4th 1026, 1032 [“There is no obligation to deal fairly or in good faith absent an existing contract.”].)

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

Fraud (Fourth Cause of Action)

Parulan-Colfer and the Entity Defendants argue Duarte and HLPUSD’s fourth cause of action for fraud fails to plead sufficient facts to state a claim. The court disagrees.

Legal Standard

“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.)

Discussion

In this case, Parulan-Colfer and the Entity Defendants both argue the FAC fails to allege they made misrepresentations with the required specificity. In alleging a cause of action for fraud, “[t]he 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 persons 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.” (West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 793.)

Here, the FAC alleges that in February 2019, Parulan-Colfer and Dr. Gary Matsumoto, a HLP ED board member, sent a letter to supporters stating that supporters could participate in raising funds for student scholarships and school programs by participating in the upcoming annual fundraising event. (FAC, ¶ 19.) The FAC alleges these representations or promises were false as Parulan-Colfer and HLP ED did not intend to use the donations as promised. (FAC, ¶ 70.) In response, Parulan-Colfer argues that the FAC fails to identify who these supporters are. But the FAC makes clear that Duarte and HLPUSD were recipients of these representations as they allegedly relied on them to their detriment. For example, the FAC alleges Duarte made a donation at the annual fundraising event in reliance on the February 2019 letter. (FAC, ¶ 24.) The FAC also alleges that both Duarte and HLPUSD relied on these representations in engaging in fundraising efforts for HLP ED and donating money to HLP ED. (FAC, ¶ 71.)

Parulan-Colfer also argues that the FAC seeks to hold Parulan-Colfer personally liable for the alleged misrepresentations of Dr. Matsumoto. But this argument misconstrues the FAC as the February 2019 letter was issued by both Dr. Matsumoto and Parulan-Colfer. (FAC, ¶ 19.)

Accordingly, the court finds the arguments by Parulan-Colfer and the Entity Defendants’ are unpersuasive as to this cause of action, and hereby OVERRULE the demurrers on this ground.

Conversion (Fifth Cause of Action)

Parulan-Colfer and the Entity Defendants contend Duarte and HLPUSD’s fifth cause of action for conversion fails to plead sufficient facts to state a claim. The court agrees.

Legal Standard

“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.” (Burlesci v. Petersen (1998) 68 Cal.App.4th 1062, 1066.) “Conversion is an intentional tort.” (Multani v. Knight (2018) 23 Cal.App.5th 837, 853.) “Because the act [of conversion] must be knowingly done, ‘neither negligence, active or passive, nor a breach of contract, even though it result in injury to, or loss of, specific property, constitutes a conversion.’” (Taylor v. Forte Hotels International (1991) 235 Cal.App.3d 1119, 1124.)

“[C]ases recognizing claims for the conversion of money ‘typically involve those who have misappropriated, commingled, or misapplied specific funds held for the benefit of others.’” (Voris v. Lampert (2019) 7 Cal.5th 1141, 1152, quoting PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384, 396.)

Discussion

In this case, Parulan-Colfer and the Entity Defendants contend the FAC fails to allege ownership or right of possession with regards to HLP ED’s funds. While the FAC alleges Duarte and HLPUSD possessed ownership interests in funds that were transferred to HLP ED, this conclusory allegation is insufficient to establish how Duarte and HLPUSD had an ownership interest in these funds. (FAC, ¶ 74-75.)

In opposition, Duarte contends Duarte possesses an actionable interest in sums donated to HLP ED pursuant to L.B. Research & Education Foundation v. UCLA Foundation (2005) 130 Cal.App.4th 171 (UCLA Foundation). There, the court found plaintiff had made a conditional gift. (Id., at p. 178, 180.) Here however, the FAC failed to allege any facts that establish how Duarte placed conditions on the donation given to HLP ED. Thus, the court finds that UCLA Foundation is inapplicable.

HLPUSD contends it has a sufficient interest in monies donated to HLP ED pursuant to San Diego ect. Boy Scounts of America v. City of Escondido (1971) 14 Cal.App.3d 189. In that case, the court held that the representative of a charitable trust’s beneficiaries could bring an action to enforce the trust. (Id., at p. 196.) But the court did not hold that the beneficiaries had ownership interests in the charitable trust and could bring a separate action for conversion.

Accordingly, because Duarte and HLPUSD have failed to adequately allege how they have an ownership interest in HLP ED’s funds, Parulan-Colfer and the Entity Defendants’ demurrers to this cause of action are SUSTAINED with leave to amend.

Breach of Charitable Trust (Sixth Cause of Action)

Parulan-Colfer and the Entity Defendants maintain Duarte and HLPUSD’s sixth cause of action for breach of charitable trust fails to plead sufficient facts to state a claim because Duarte and HLPUSD lack standing to sue for breach of charitable trust. The court agrees.

Legal Standard

Pursuant to Corporations Code section 5142, subdivision (a), an action for breach of charitable trust may be brought by “(1) [t]he corporation, or a member in the name of the corporation pursuant to Section 5710[,] (2) [a]n officer of the corporation[,] (3) [a] director of the corporation[,] (4) [a] person with a reversionary, contractual, or property interest in the assets subject to such charitable trust,” or the attorney general.”

Discussion

Here, because HLPUSD and Duarte do not allege they were members, officers, or directors of HLP ED, they must establish they have a reversionary, contractual, or property interest in HLP ED’s funds. The FAC alleges HLPUSD possesses a contractual interest in HLP ED’s funds “by virtue of the provisions in the Articles of Incorporation of the Foundation.” (FAC, ¶ 78.) But as noted above with regard to the second cause of action, the FAC has failed to adequately establish that these articles constituted a valid contract. Thus, the FAC fails to establish HLPUSD possess a contractual interest in HLP ED’s funds.

As to Duarte, the FAC alleges Duarte possess a “reversionary, contractual, or property interest, by virtual of his status as a donor of funds.” (FAC, ¶ 78.) But the FAC fails to expand on these generic and conclusory allegations by alleging how Duarte’s donation entitled Duarte to a reversionary, contractual, or property interest in HLP ED’s funds.

Accordingly, because Duarte and HLPUSD fail to allege sufficient facts to establish that they have standing to sue for breach of charitable trust, Parulan-Colfer and the Entity Defendants’ demurrers to this cause of action are SUSTAINED with leave to amend.

Common Counts (Seventh Cause of Action)

Parulan-Colfer and the Entity Defendants argue Duarte and HLPUSD’s seventh cause of action for common counts fails to plead sufficient facts to state a claim. The court disagrees.

Legal Standard

“A cause of action is stated for money had and received if 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.’” (Schultz v. Harney (1994) 27 Cal.App.4th 1611, 1623, quoting Pike v. Zadig (1915) 171 Cal. 273, 257-276.)

Discussion

In this case, Parulan-Colfer and the Entity Defendants argue the FAC fails to establish that they were indebted to Duarte and HLPUSD. But this argument ignores the fact that a “[a] common count may be used to recover money obtained by false and fraudulent representations.” (Ponti v. Farrell (1961) 194 Cal.App.2d 676, 679.) Because the FAC has adequately alleged Parulan-Colfer and HLP ED obtained funds or donations from Duarte and HLPUSD through fraud as noted above with regards to the fourth cause of action, the FAC adequately establishes they are indebted to Duarte and HLPUSD.

With regards to the SVG Training Foundation and San Gabriel Career Foundation, the Entity Defendants argue there is no allegation that any funds at issue were donated to them. But this argument fails to address the fact that the FAC alleges they were alter egos of Parulan-Colfer. (FAC, ¶ 45-46.)

Accordingly, Parulan-Colfer and the Entity Defendants’ demurrers to this cause of action are OVERRULED.

Unfair Business Practices (Eighth Cause of Action)

Parulan-Colfer and the Entity Defendants contend Duarte and HLPUSD’s eighth cause of action for unfair business practices fails to plead sufficient facts to state a claim. The court disagrees.

Legal Standard

To state a cause of action for unfair business practices, a plaintiff must establish defendant engaged in “unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.” (Bus. & Prof. Code, § 17200.) This section establishes three types of unfair competition, prohibiting “practices that are either ‘unfair,’ or ‘unlawful,’ or ‘fraudulent.’” (Pastoria v. Nationwide Ins. (2003) 112 Cal.App.4th 1490, 1496.) Thus, “An act or practice may be actionable as “unfair” under the unfair competition law even if it is not ‘unlawful.’” (Chavez v. Whirlpool Corp. (2001) 93 Cal.App.4th 363, 374.) However, despite the broad scope of Business and Professions Code section 17200, its remedies are limited to equitable relief and damages are not recoverable. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1144.)

Discussion

In this case, Parulan-Colfer and the Entity Defendants contend the FAC fails to establish how they engaged in unlawful, unfair, or fraudulent business practices. But because the FAC has adequately alleged Parulan-Colfer and HLP ED obtained funds or donations from Duarte and HLPUSD through fraud as noted above with regards to the fourth cause of action, the FAC has adequately alleged a cause of action for unfair business practices on the basis of fraud.

With regards to the SVG Training Foundation and San Gabriel Career Foundation, the Entity Defendants fail to address the fact that the FAC alleges they were alter egos of Parulan-Colfer. (FAC, ¶ 45-46.)

Accordingly, Parulan-Colfer and the Entity Defendants’ demurrers to this cause of action are OVERRULED.

Intentional Interference with Prospective Economic Advantage (Ninth Cause of Action)

Parulan-Colfer and the Entity Defendants maintain HLPUSD’s ninth cause of action for intentional interference with prospective economic advantage fails to plead sufficient facts to state a claim. The court disagrees.

Legal Standard

To state a cause of action for intentional interference with prospective economic advantage or relations, a plaintiff must establish: “(1) a relationship between the plaintiff and some third party with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) a wrongful act, apart from the interference itself, by the defendant designed to disrupt the relationship;¿(4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.”¿ (Salma v. Capon (2008) 161 Cal.App.4th 1275, 1290, quoting Arluk Medical Center Industrial Group, Inc. v. Dobler (2004) 116 Cal.App.4th 1324, 1340-1341.)

In addition to establishing the defendant interfered with a plaintiff’s prospective economic advantage, plaintiff must establish that defendant’s conduct “was wrongful by some legal measure other than the fact of interference itself.” (Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 393.)¿“To establish that the defendant's interfering conduct was¿independently¿wrongful, the plaintiff must instead prove that the conduct—whether directed at the plaintiff or someone else—was ‘proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.’” (Drink Tank Ventures LLC v. Real Soda in Real Bottles, Ltd. (2021) 71 Cal.App.5th 528, 538, quoting Ixchel Pharma, LLC v. Biogen, Inc. (2020) 9 Cal.5th 1130, 1142.)

Discussion

In this case, Parulan-Colfer maintains the FAC fails to allege how Parulan-Colfer interfered with the alleged relationship between HLPUSD and HLP ED. But the FAC does so by alleging Parulan-Colfer mismanaged HLP ED, causing it to lose its tax-exempt status and become dissolved, and engaged in fraud. (FAC, ¶ 50, 98-99.)

With regards to the SVG Training Foundation and San Gabriel Career Foundation, the Entity Defendants argue there is no allegation they interfered with the alleged relationship between HLPUSD and HLP ED. But this argument fails to address the fact that the FAC alleges they were alter egos of Parulan-Colfer. (FAC, ¶ 45-46.)

Accordingly, Parulan-Colfer and the Entity Defendants’ demurrers to this cause of action are OVERRULED.

Declaratory Relief (Tenth Cause of Action)

Parulan-Colfer and the Entity Defendants argue Duarte and HLPUSD’s tenth cause of action for declaratory relief fails to plead sufficient facts to state a claim. The court disagrees.

Legal Standard

“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.) “The courts do not issue advisory opinions about the rights and duties of the parties under particular agreements, if no actual, justiciable controversy has yet developed.” (Otay Land Co. v. Royal Indemnity Co. (2008) 169 Cal.App.4th 556, 563.)

Discussion

In this case, Parulan-Colfer and the Entity Defendants argue the FAC fails to identify a present controversy that would make the issues in dispute the proper subject for declaratory relief. The court disagrees since the FAC does so by alleging there is a present dispute over funds donated to or received by Parulan-Colfer and the Entity Defendants. (FAC, ¶ 100, 102.) While Parulan-Colfer also demurs to the requested remedy of constructive trust, this cause of action makes multiple requests for relief and a demurrer may not “lie to a part of a cause of action.” (Cornejo v. Lightbourne (2013) 220 Cal.App.4th 932, 944.)

Accordingly, Parulan-Colfer and the Entity Defendants’ demurrers to this cause of action are OVERRULED.

Accounting (Eleventh Cause of Action)

Parulan-Colfer and the Entity Defendants contend Duarte and HLPUSD’s eleventh cause of action for accounting fails to plead sufficient facts to state a claim. The court agrees.

Legal Standard

“A cause of action for an accounting requires a showing that a relationship exists between the plaintiff and defendant that requires an accounting, and that some balance is due the plaintiff that can only be ascertained by an accounting. [Citations.] An action for accounting is not available where the plaintiff alleges the right to recover a sum certain or a sum that can be made certain by calculation.” (Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 179.)

Discussion

In this case, Parulan-Colfer and the Entity Defendants argue the FAC fails to establish some balance is due to them. With regards to Duarte, the FAC alleges Duarte was fraudulently induced to donate $2,975 to HLP ED (FAC, ¶ 24, 70-71, 106.) But because Duarte alleges a sum certain, Duarte cannot allege a cause of action for accounting. As to HLPUSD, HLPUSD argues it is entitled to sue for an accounting as a beneficiary of a charitable trust and as a representative of student beneficiaries. But as noted above, the FAC has failed to allege causes of action for breach of fiduciary duties, breach of contract, and breach of charitable trust.

Accordingly, Parulan-Colfer and the Entity Defendants’ demurrers are SUSTAINED with leave to amend.

Aiding and Abetting Breach of Fiduciary Duties (Twelfth Cause of Action)

The Entity Defendants maintain HLPUSD’s twelfth cause of action for aiding and abetting breach of fiduciary duties fails to plead sufficient facts to state a claim because Parulan-Colfer did not owe fiduciary duties to HLPUSD. But as noted above with regards to the first cause of action, the FAC has adequately alleged Parulan-Colfer owed fiduciary duties to HLPUSD as HLPUSD’s officer. Accordingly, for the same reasons noted above, the Entity Defendants’ demurrer to this cause of action is OVERRULED.

CONCLUSION

Based on the foregoing, the court rules as follows.

Parulan-Colfer’s demurrer to the FAC as to Duarte is SUSTAINED with twenty (20) days leave  to amend as to the first, fifth, sixth, and eleventh causes of action. Furthermore, demurrer is OVERRULED as to the fourth, seventh, eighth, and tenth causes of action.

Parulan-Colfer’s demurrer to the FAC as to HLPUSD is SUSTAINED with twenty (20) days  leave to amend as to the fifth, sixth, and eleventh causes of action. Furthermore, the demurrer is OVERRULED as to the first, fourth, seventh, eighth, ninth, and tenth causes of action.

The Entity Defendants’ demurrer to the FAC is SUSTAINED with twenty (20) days leave to amend as to the first, second, third, fifth, sixth, and eleventh causes of action. Furthermore, the demurrer is OVERRULED as to the fourth, seventh, eighth, ninth, tenth, and twelfth causes of action.

Based upon the above analysis, the motions to strike by Parulan-Colfer and the Entity Defendants’ are DEEMED MOOT.