Judge: Stephen P. Pfahler, Case: 21CHCV00760, Date: 2023-02-16 Tentative Ruling

Case Number: 21CHCV00760    Hearing Date: February 16, 2023    Dept: F49

Dept. F-49

Date: 2-16-23

Case # 21CHCV00760

Trial Date: N/A

DEMURRER

MOVING PARTY: Cross-Defendants, Maya Shulman dba Shulman Family Law Group

RESPONDING PARTY: Cross-Complainant, Olga Kapustin

RELIEF REQUESTED

Demurrer to the Cross-Complaint

·         1^st Cause of Action: Fraud

Motion to Strike

Joinder of Maya Shulman dba Shulman Family Law Group

SUMMARY OF ACTION

Plaintiff Maya Shulman dba. Shulman Family Law Group alleges Defendant Olga Kapustin owes $93,931.48 for legal services rendered.

On September 30, 2021 and January 14, 2022, Plaintiff filed a complaint and first amended complaint for Breach of Contract, and Common Counts. Defendant answered and filed a cross-complaint for fraud and declaratory relief on June 6, 2022.

On September 26, 2022, the case was assigned from Department 49 to Department 51. Following a 170.6, the case was assigned back to Department 49 on October 25, 2022.

RULING

Demurrer: Sustained with Leave to Amend.

1^st Cause of Action: Fraud

Cross-Defendant Maya Shulman dba Shulman Family Law and “Plaintiff Maya Shulman, a Law Corporation” submit the subject demurrer to the fraud cause of action in the cross-complaint of cross-complainant Olga Kasputin, on grounds of insufficient factual particularity. Cross-Complainant alleges fraud is pled with sufficient particularity.

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.)

The court only addresses the actual operative document, the cross-complaint of Olga Kasputin, and the named parties—Maya Shulman dba Shulman Family Law Group and Maya Shulman, a Law Corporation. The cross-complaint alleges “The Shulman Family Law Group” identified itself as the “attorney” in the fee agreement, when in fact it is neither a licensed attorney “nor a proper fictitious business entity.” Cross-Defendant checked the “concealment” box on the form portion of the cross-complaint. 

“‘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.’” … [¶] ‘Promissory fraud’ is a subspecies of the action for fraud and deceit. A promise to do something necessarily implies the intention to perform; hence, where a promise is made without such intention, there is an implied misrepresentation of fact that may be actionable fraud.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.)

“‘Active concealment or suppression of facts by a nonfiduciary “is the equivalent of a false representation, i.e., actual fraud.” [Citation.] (Citation).)’ A fraud claim based upon the suppression or concealment of a material fact must involve a defendant who had a legal duty to disclose the fact. (Civ.Code, § 1710, subd. (3) [a deceit includes “[t]he suppression of a fact, by one who is bound to disclose it, or who gives information of other facts which are likely to mislead for want of communication of that fact”]; Citation.)” (Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4th 1178, 1186.) “[T]he elements of an action for fraud and deceit 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.” (Marketing West, Inc. v. Sanyo Fisher (USA) Corp. (1992) 6 Cal.App.4th 603, 612–613.)

Cross-Defendants offer no argument to dispelling the apparent existence of the attorney client relationship thereby establishing a fiduciary duty, and subsequent duty of disclosure. Cross-Defendant instead focuses on the intent, causation, and damages elements of the claim. The argument essentially challenges the lack of facts regarding an intent to deceive. Cross-Defendant then questions whether the information regarding the state of the existence of the contracting legal firm was actually material, and therefore whether Cross-Complainant sustained damages as a result of the wording in the retainer agreement.

The cross-complaint only alleges a conclusive series of allegations regarding the failure to disclose the apparent distinctions. While the agreement may allegedly misrepresent or conceal facts regarding legal operations, nothing in the conclusions presented supports both an intent to deceive, and actual damages as a result of an apparent member or employee of the entity rendering legal services instead of an entity with no identified member of the state bar capable of actually directly representing a client either way. The court finds the demurrer properly challenges the paucity of facts and therefore sustains the demurrer.

Motion to Strike: Moot/Denied.

To the extent Plaintiff challenges the fraud and punitive damages under the fraud claim, the motion to strike is MOOT.

The motion to strike the claim for a “Declaration that the Fee Agreement is void” lacks any support challenging the basis of the claim within the second cause of action for declaratory relief. The motion is therefore DENIED as to Prayer for relief section B.

In summary, the demurrer to the fraud cause of action in the cross-complaint is sustained with 30 days leave to amend. The motion to strike sections A & C of the Prayer is MOOT, and the motion to strike section C is denied. If cross-complainant fails to file an amended pleading within 30 days of this order, cross-defendants are ordered to answer the remaining cause of action for declaratory relief.

Moving party to give notice.