Judge: Sandy N. Leal, Case: 2020-01176795, Date: 2023-08-10 Tentative Ruling
Motion for Judgement on the Pleadings
Defendants’ (Ron Terry, Richard Garzilli, Teresa Kounin-Terry and Morace Films, Ltd.) Motion for Judgment on the Pleadings is GRANTED in part with leave to amend, and DENIED in part.
Defendants’ and Plaintiff’s Requests for Judicial Notice are GRANTED. Plaintiff John C. Loudon’s Evidentiary objections are OVERRULED. Defendants’ Evidentiary objections are OVERRULED.
1. General Authority Regarding Motions for Judgment on the Pleadings
Eckler v. Neutragena Corporation (2015) 238 Cal.App.4th 433, 439, states, “ ‘ “A motion for judgment on the pleadings serves the function of a demurrer, challenging only defects on the face of the complaint.’ [Citation.] As with a demurrer, ‘[t]he grounds for a motion for judgment on the pleadings must appear on the face of the complaint or from a matter of which the court may take judicial notice.’ [Citation.]” “A trial court’s determination of a motion for judgment on the pleadings accepts as true the factual allegations that the plaintiff makes. [Citations.] In addition, it gives them a liberal construction.” (Gerawan Farming, Inc. v. Lyons (2000) 24 Cal.4th 468, 515-516.”
Code Civ. Proc. § 438 states in relevant part: “(b)(1) A party may move for judgment on the pleadings. … (B) If the moving party is a defendant, that either of the following conditions exist: ¶ (i) The court has no jurisdiction of the subject of the cause of action alleged in the complaint. ¶ (ii) The complaint does not state facts sufficient to constitute a cause of action against that defendant. ¶ (2) The motion provided for in this section may be made as to either of the following: ¶ (A) The entire complaint or cross-complaint or as to any of the causes of action stated therein. ¶ (B) The entire answer or one or more of the affirmative defenses set forth in the answer. … ¶ (d) The grounds for motion provided for in this section shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice. Where the motion is based on a matter of which the court may take judicial notice pursuant to Section 452 or 453 of the Evidence Code, the matter shall be specified in the notice of motion, or in the supporting points and authorities, except as the court may otherwise permit.”
2. Meet and Confer
Code Civ. Proc. § 439 states: “(a) Before filing a motion for judgment on the pleadings pursuant to this chapter, the moving party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to the motion for judgment on the pleadings for the purpose of determining if an agreement can be reached that resolves the claims to be raised in the motion for judgment on the pleadings. If an amended pleading is filed, the responding party shall meet and confer again with the party who filed the amended pleading before filing a motion for judgment on the pleadings against the amended pleading.”
Here, moving party failed to meet and confer by telephone or in-person. The parties only met and conferred by email. This is not compliant with Code Civ. Proc. § 439(a). However, Code Civ. Proc. § 439(a)(4) states: “A determination by the court that the meet and confer process was insufficient shall not be grounds to grant or deny the motion for judgment on the pleadings.” Therefore, the Court addresses the merits. However, should the parties bring additional motions, the Court expects the parties to comply with Code Civ. Proc. § 439(a).
3. Merits
A. Seventh Cause of Action for Fraudulent Misrepresentation
Defendants Ron Terry, Richard Garzilli, Teresa Kounin-Terry and Morace Films, Ltd. bring a motion for judgment on the pleadings as to the Seventh Cause of Action for Fraudulent Misrepresentation because it is barred by the statute of limitations.
In California, the essential elements of a claim for fraud are “(a) a misrepresentation (false representation); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (In re Estate of Young (2008) 160 Cal.App.4th 62, 79 [(citations omitted].)
In California, fraud must be pled specifically; general and conclusory allegations do not suffice. (Alfaro v. Community Housing Imp. System & Planning Ass’n, Inc. (2009) 171 Cal.App.4th 1356, 1384.) This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered. (Id.) “The requirement of specificity in a fraud action against a corporation requires the plaintiff to allege the names of the persons who made the allegedly fraudulent 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; Gautier v. General Tel. Co. (1965) 234 Cal.App.2d 302, 308.) In addition, specific pleading requires facts that clearly allege every element of fraud. (Starfield v. Starkey (1990) 220 Cal.App.3d 59, 73.)
The statute of limitations for fraud is three years. (Code Civ. Proc. § 338(d).) “(d) An action for relief on the ground of fraud or mistake. The cause of action in that case is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.” (Code Civ. Proc. § 338(d).)
Comm. for Green Foothills v. Santa Clara Cty. Bd. of Supervisors, (2010) 48 Cal. 4th 32, 42 provides: “‘A demurrer based on a statute of limitations will not lie where the action may be, but is not necessarily, barred. [Citation.] In order for the bar ... to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows that the action may be barred. [Citation.]’ [Citation.]” (Geneva Towers Ltd. Partnership v. City and County of San Francisco (2003) 29 Cal.4th 769, 781, 129 Cal.Rptr.2d 107, 60 P.3d 692.)”
To the extent that plaintiff wishes to rely on the delayed discovery rule, the plaintiff must specifically plead facts that show “(1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence. [Citation.] Mere conclusory assertions that delay in discovery was reasonable are insufficient and will not enable the complaint to withstand general demurrer.” (Saliter v. Pierce Brothers Mortuaries, (1978) 81 Cal. App. 3d 292.)
Plaintiff alleges “GIWYC, Katz, [Ron] Terry and Garzilli made a number of misrepresentations to Plaintiff in order to induce him to agree to personally guarantee the Bridge Loan Obligation. These misrepresentations were made in the several months leading up to October 9, 2012 execution of the Guaranty Agreement with Chesterton.” (First Amended Complaint, ¶ 86.)
Based on the foregoing, the alleged wrongful misrepresentations by Terry and Garzilli occurred leading up to 2012. Without any exception, the statute of limitations would have run before 10-9-15. Plaintiff filed the current action on 12-31-20, which is after the statute of limitation ran according to the pleadings.
Plaintiff’s only allegation regarding a delayed discovery pertains to Wells Fargo “Plaintiff did not “discover” that Wells Fargo Bank actually perpetrated such a fraud until March 2018 when Plaintiff spoke with a high-ranking business representative of Sun Trust Bank.” (Complaint, ¶ 69.) The foregoing does not discuss any delayed discovery of the alleged wrongful misrepresentations by Terry and Garzilli. Thus, Plaintiff has failed to sufficiently plead delayed discovery as to the Intentional Misrepresentation cause of action against Terry and Garzilli.
Based on the foregoing, the Court GRANTS the Motion as to Ron Terry and Richard Garzilli. The Court GRANTS leave to amend to Plaintiff to allege a cause of action against Ron Terry and Richard Garzilli. Given that this is the first time Defendants have brought a motion on these grounds, and Plaintiff provides some facts that he could allege for delayed discovery, the Court will afford him a chance to cure the defects. The Court recognizes the judicial admission made by Plaintiff in the Massachusetts action, however, it is unclear at this time whether Plaintiff’s allegations in the amended complaint will be precluded by such admissions.
As Defendants correctly contend there are no allegations in the FAC of any conduct whatsoever by Defendants Teresa Kounin-Terry or Morace Films, LTD. and their names do not appear in it. However, Defendants brought their Motion on the grounds that the statute of limitations has run. While the Court recognizes that there are likely insufficient facts to support a cause of action and that the Complaint is uncertain against these Defendants, Defendants did not move on these grounds. A statute of limitations defense must be clear from the face of the pleadings.
Thus, the Court DENIES the motion as to these Defendants without prejudice to bring a motion on other grounds.
B. Eighth Cause of Action for Unfair Business Practices
The elements of a cause of action for unfair business practices are: (1) defendant engaged in unlawful, unfair or fraudulent business acts or practices, or unfair, deceptive, untrue or misleading advertising; (2) plaintiff’s entitlement to restitution and/or injunctive relief. (Business & Professions Code § 17200 and 17203.)
“An ‘unlawful’ business practice or act within the meaning of the UCL ‘is an act or practice, committed pursuant to business activity, that is at the same time forbidden by law. [Citation.]’ [Citation.] The California Supreme Court has explained that ‘[b]y proscribing “any unlawful” business practice, “[Business and Professions Code] section 17200 ‘borrows’ violations of other laws and treats them as unlawful practices” that the unfair competition law makes independently actionable. [Citation.]’ [Citation.]” (Bernardo v. Planned Parenthood Federation of America (2004) 115 Cal.App.4th 322, 351-352, Italics in Bernardo.)
A claim under the Unfair Competition Law must be brought within four years of when the cause of action accrues. (Business & Professions Code § 17208.)
The parties arguments regarding the statute of limitations are based on the same factual allegations and lack of delayed discovery.
Accordingly, the Court GRANTS the motion with leave to amend as to Ron Terry and Richard Garzilli and DENIES the Motion as to Defendants Teresa Kounin-Terry or Morace Films, LTD.
Defendants to give notice.