Judge: Stephen P. Pfahler, Case: 21CHCV00423, Date: 2023-03-16 Tentative Ruling


Case Number: 21CHCV00423    Hearing Date: March 16, 2023    Dept: F49

Dept. F-49

Date: 3-16-23 c/f 11-21-22

Case #21CHCV00423

Trial Date: Not Set

 

DEMURRER

 

MOVING PARTY:                Cross-Defendants, Numair Fakir, et al.

RESPONDING PARTY:       Cross-Complainants, World Tech Toys, Inc., et al.

 

RELIEF REQUESTED

Demurrer to the Cross-Complaint

·         1st Cause of Action: Breach of Contract

·         2nd Cause of Action: Fraud/Deceit

·         3rd Cause of Action: Negligent Misrepresentation

·         4th Cause of Action: Quantum Meruit

 

SUMMARY OF ACTION

Plaintiff Win Partners, LLC alleges a January 24 or 25, 2021, oral agreement, whereby defendants World Tech Toys, Inc., World Trading 23, Inc., and/or Kevork Kouyoumjian, agreed to deliver certain personal protective equipment (PPE) described as “medical grade disposable seamless rubber gloves.” Plaintiff alleges payment of five million dollars ($5,000,000), but only received non-medical grade, non-FDA approved, “counterfeit” equipment, which lacks any resale value. 

 

On June 2, 2021, Plaintiff filed a complaint for Breach of Contract, Unfair Business Practices, Breach of Fiduciary Duties, and Fraud. On February 18, 2022, the court granted Plaintiff’s motion for leave to amend. On February 28, 2022, Plaintiff substituted in Jacques Kouyoumjian for Doe 3. On March 2, 2022, Plaintiff filed a first amended complaint for Breach of Contract, Unfair Business Practices, Breach of Fiduciary Duties, and Fraud.

 

On August 4, 2022, the court granted Plaintiff leave to file a second amended complaint. On August 5, 2022, Plaintiff filed the second amended complaint for Breach of Contract, Unfair Business Practices, Beach of Fiduciary Duties, and Fraud. On September 7, 2022, World Tech Toys, Inc., et al. answered and filed a cross-complaint against Win Partners, LLC, et al. for Breach of Contract, Fraud/Deceit, Negligent Misrepresentation, and Quantum Meruit.

 

On January 11, 2023, the court sustained the demurrer of Jacques Kouyoumjian, Azniv Kouyoumjian, and Vicken Kouyoumjian to the second amended complaint. On February 10, 2023, Plaintiff dismissed Jacques Kouyoumjian, Azniv Kouyoumjian, and Vicken Kouyoumjian. On February 22, 2023, the court sustained the demurrer of Win Partners, LLC to the second and third causes of action in the cross-complaint of World Tech Toys, Inc., et al.

 

RULING: Sustained with Leave to Amend.

Cross-Defendants Numar Fakir and Hasham Hussain submit the demurrer to World Tech Toys, Inc. and World Trading 23, Inc. cross-complaint on the for Breach of Contract, Fraud/Deceit, Negligent Misrepresentation, and Quantum Meruit. Cross-Defendants challenge the cross-complaint on grounds of no basis of individual liability, and insufficiently pled facts for the individual causes of action. Cross-Complainants in opposition counter that the motion lacks a sufficient meet and confer effort, the cross-complaint sufficiently articulates alter ego liability, and the individual causes of action are sufficiently pled. Cross-Defendant in reply reiterates the lack of factual sufficiency, including the alter ego claims.

 

Notwithstanding the potential argument at the hearing, the court first notes Cross-Complainants have remaining days to file their amended first amended cross-complaint following the successful February 22, 2023, demurrer of Win Partners, LLC. Given the lack of any amended pleading, or dismissal of Win Partners, LLC at the time of the tentative ruling publication cutoff, the court first determines the demurrer to the second and third causes of action are MOOT. The parties are welcome to bring any and all disputes at the time of oral argument should the status change and/or the parties disagree for whatever reason. As of now, because the prior demurrer was sustained with leave to amend, and no other action appears on the docket, the court finds the second and third causes of action in the operative pleading against all parties, including moving cross-defendants not currently part of the action. If the status of the action changes and the court otherwise lacks notice of any potentially late filed items posted on the court electronic filing system, which may not show up on the system for multiple days after the filing date, the parties are welcome to present any such proof of filing.

 

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (Code Civ. Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.) The court “ ‘ “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law . . . .” ’ ” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.) In applying these standards, the court liberally construes the complaint to determine whether a cause of action has been stated.  (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726, 733.)

 

“A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616; Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139 [“[U]nder our liberal pleading rules, where the complaint contains substantive factual allegations sufficiently apprising defendant of the issues it is being asked to meet, a demurrer for uncertainty should be overruled or plaintiff given leave to amend.]

 

The court declines to overrule the demurrer due to the lack of a sufficient meet and confer effort. (Code Civ. Proc., § 430.41, subd. (a)(4).)

 

Cross-Defendants initially challenge the cross-complaint on grounds of a lack of individual liability under both the “immunity rule” for agents and employees of a corporate entity, and lack of any pled exemption from the rule, or a valid alter ego claim.

 

 

While the opposition argues for the right to allege alter ego liability, the cross-complaint appears to lack any such allegation. Cross-Complainant in opposition apparently concedes to the lack of any alter ego, and instead cites to a standard for finding alter ego liability following adjudication on the merits. The court declines to consider this standard given the challenge arises from within the pleading itself, and is therefore currently put in issue before the court regarding a basis of individual liability.

 

Cross-Complainant also offers argument regarding the right to allege a claim for individual liability incurred due to actions on behalf of the corporate entity. Like the alter ego claim, the cross-complaint lacks sufficient articulation of any exemption. (Corp. Code, § 17703.04.)

 

The demurrer is therefore sustained with leave to amend on this basis. Nothing prevents Cross-Complainant from alleging such a claim, and nothing in the lack of said allegations in the current iteration of the cross-complaint in any way prevents cross-complainant, as a matter of law, from later alleging this claim.

 

Without a sufficiently established basis of liability, the court declines to consider any additional challenges regarding the separate and independent merits of the contract and quantum meruit claims. [Cross-Comp., ¶¶ 17, 39.]

 

In summary, the demurrer to the fraud and negligent misrepresentation causes of action in the cross-complaint MOOT. The demurrer to the breach of contract and quantum meruit causes of action is sustained with leave to amend.

 

The time for the filing of the first amended complaint against moving parties shall conform to the EXACT SAME DATE as the date due following the demurrer on February 22, 2023. NOTHING IN THIS RULING IN ANY WAY GRANTS AN EXTENSION FOR THE AMENDMENT DUE DATE ON THE CROSS-COMPLAINT. One first amended cross-complaint will be filed representing all claims against all defendants. If Cross-Complainants elect to dismiss the prior demurring parties and/or causes of action, the due date still remains the same in conformance with the prior amendment date. If cross-complainant fails to file an amended pleading within the conforming date of both orders, moving cross-defendants and former successful cross-defendants may seek an ex parte dismissal of any and all applicable defendants.

 

Moving Cross-Defendants to give notice to all parties.