Judge: Stephen I. Goorvitch, Case: 20STCV47798, Date: 2023-08-17 Tentative Ruling

Case Number: 20STCV47798    Hearing Date: February 7, 2024    Dept: 39

James Copping v. Burt M. Arnold, et al.

Case No. 20STCV47798

Demurrer

Case Management Conference

            Plaintiff James Copping (“Plaintiff”), a self-represented party, filed this action against Defendants Burt M. Arnold and BMA Securities, LLC (collectively, “Defendants”).  Plaintiff alleges that he is a stockbroker and provides financial, securities and investment services and advice to clients.  (Second Amended Complaint, ¶ 2.)  Plaintiff alleges that he worked for Defendants, earning significant “commissions, revenue and income.”  (Id., ¶ 10.)  Plaintiff alleges that Defendants have refused to pay him owed commissions since January 15, 2020.  (Ibid.)  Accordingly, Plaintiff asserts causes of action for accounting, fraud, and common counts.  Defendants demur to the second cause of action, fraud.   

            Plaintiff must allege fraud with particularity.  “This means: (1) general pleading of the legal conclusion of fraud is insufficient; and (2) every element of the cause of action for fraud must be alleged in full, factually and specifically, and the policy of liberal construction of pleading will not usually be invoked to sustain a pleading that is defective in any material respect.”  (Wilhelm v. Pray, Price, Williams & Russell (1986) 186 Cal.App.3d 1324, 1331.)  The elements of promissory fraud are as follows: (1) Defendant made a misrepresentation, i.e., a false promise; (2) Defendant knew the promise was false when it was made; (3) Defendant intended to defraud Plaintiff, i.e., induce Plaintiff’s reliance on the false promise; (4) Plaintiff relied on the false promise and the reliance was justifiable; and (5) Plaintiff was damaged.  (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.)

There are two problems with Plaintiff’s case.  First, as discussed, to state a claim for promissory fraud, Plaintiff must allege specific factual circumstances beyond a contractual breach, which reflect Defendant’s contemporaneous intent not to perform.  (Hills Transportation Co. v. Southwest Forest Ind., Inc. (1968) 266 Cal.App.2d 702, 707.)  In this case, Plaintiff alleges that Defendants promised to pay commissions owed, but failed to do so.  (Second Amended Complaint, ¶¶ 15-16.)  Plaintiff does not allege specific facts to show that Defendants did not intend to pay him the commissions when they promised to do so.  Second, there are no factual allegations suggesting that Plaintiff relied on the false promise to his detriment.  Plaintiff does not explain how his reliance on the allegedly false promise resulted in “loss [of] income and earnings” or caused other economic damages.  Plaintiff alleges that Defendants “[i]ssued a false and fraudulent 2020 1099 Tax Form to Plaintiff missing major wages and earnings made by Plaintiff.”  (Id., ¶ 17.)  Again, these allegations reflect only a failure to pay wages, because there are no facts suggesting fraud. 

Defendants also argue that Plaintiff waived the right to pursue his second cause of action because he failed to amend his complaint in a timely manner after the Court granted Defendants’ motion for judgment on the pleadings.  The Court need not reach this argument in order to resolve the motion. 

Finally, Defendants argue that Plaintiff cannot satisfy the monetary threshold to proceed in an unlimited civil court without the fraud claim.  The complaint alleges that Defendants owe Plaintiff “the sum of approximately $25,000, with legal interest thereon from the date of breach, on account services and work done on their behalf and at their request.”  (Id., ¶ 23.)  Defendants did not file a motion for reclassification so the Court need not reach this issue at this stage.

Based upon the foregoing, the Court orders as follows:

1.         The Court sustains Defendants’ demurrer to the second cause of action. 

2.         The Court denies leave to amend.  Plaintiff has had multiple opportunities to amend, to no avail.

3.         The Court sets the following dates:

            Final Status Conference:        July 25, 2025, at 9:00 a.m.

            Trial:                                       August 5, 2025, at 9:30 a.m.

The parties shall prepare and file joint trial documents on or before July 18, 2025.  The parties shall disclose all witnesses they intend to call in their respective case-in-chief, and identify and produce all exhibits they intend to introduce in their respect case-in-chief, on or before July 18, 2025.  Jury fees shall be posted on or before February 29, 2024, or the parties shall waive jury.  The parties shall follow all courtroom procedures for Department #39.

            4.         Defendants’ counsel shall provide notice and file proof of such with the Court.