Judge: Theresa M. Traber, Case: 21STCV34020, Date: 2023-03-01 Tentative Ruling

Case Number: 21STCV34020    Hearing Date: March 1, 2023    Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE:     March 1, 2023                        TRIAL DATE: NOT SET

CASE:                         Trio Renewable Gas, Inc. v. Steaman Group LLC, et al.

CASE NO.:                 21STCV34020           

DEMURRER TO FIRST AMENDED COMPLAINT

MOVING PARTY:               Defendant Jack Fierstadt

RESPONDING PARTY(S): No opposition on eCourt as of February 27, 2023

CASE HISTORY:

·         09/14/21: Complaint filed.

·         07/07/22: First Amended Complaint filed.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

            This is an action for breach of contract and negligent misrepresentation. Plaintiff alleges that Defendants failed to pay Plaintiff compensation for work done as agreed in a contract between the parties.

Defendant Jack Fierstadt demurs to the First Amended Complaint.

TENTATIVE RULING:

            Defendant Jack Fierstadt’s Demurrer to the First Amended Complaint is SUSTAINED.

            Plaintiff shall have 30 days leave to amend the Complaint.

DISCUSSION:

            Defendant Jack Fierstadt demurs to the First Amended Complaint in its entirety as it pertains to him.

A demurrer tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228.) 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, 147 Cal.App.4th at p. 747.) The ultimate facts alleged in the complaint must be deemed true, as well as all facts that may be implied or inferred from those expressly alleged. (Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403; see also Shields v. County of San Diego (1984) 155 Cal.App.3d 103, 133 [stating, “[o]n demurrer, pleadings are read liberally and allegations contained therein are assumed to be true”].) “This rule of liberal construction means that the reviewing court draws inferences favorable to the plaintiff, not the defendant.” (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238.)

Meet and Confer

Before filing a demurrer, the demurring party shall meet and confer in person or by telephone with the party who has filed the pleading subject to the demurrer and file a declaration detailing their meet and confer efforts.  (Code Civ. Proc., § 430.41(a).) However, an insufficient meet and confer process is not grounds to overrule or sustain a demurrer.  (Code Civ. Proc., § 430.41(a)(4).)

The Declaration of Jack Fierstadt in support of this motion states that he made several attempts to meet and confer with Plaintiff’s counsel between September 21, 2022 and September 26, 2022, both electronically and by telephone. (Declaration of Jack A. Fierstadt ISO Mot. ¶ 3.) Despite these efforts, Defendant did not receive substantive responses from Plaintiff’s counsel. (Id.) The Court therefore finds that Defendant has satisfied his statutory meet and confer obligations.

Sham Pleading

Defendant contends that the entire First Amended Complaint is invalid as to Defendant Fierstadt because it is a sham pleading. Under the sham pleading doctrine, “[a] plaintiff may not avoid a demurrer by pleading facts or positions in an amended complaint that contradicts facts pleaded in the original complaint, or by suppressing facts which prove the pleaded facts false.” (Cantu v. Resolution Trust Corporation (1992) 4 Cal.App.4th 857, 877-878.) Defendant contends that the original Complaint alleged that he was an agent of Defendant Steaman Group LLC, an allegation that is not present in the First Amended Complaint. (See Complaint ¶ 39; FAC ¶ 39.) Defendant contends that the pleadings are contradictory on this basis, or that the removed allegations would disprove Plaintiff’s claims. These arguments are not well-taken. Defendant Fierstadt’s alleged agency status is immaterial as to his liability under theories of breach of contract or negligent misrepresentation. An individual may simultaneously contract on behalf of themselves and act as the agent of another, and is always liable for his own tortious misconduct, regardless of his agency status. (See Fleet v. Bank of America N.A. (2014) 229 Cal.App.4th 1403, 1411.) The Court is not persuaded that the First Amended Complaint constitutes a sham pleading.

First Cause of Action: Breach of Contract

Defendant demurs to the first cause of action for breach of contract for failure to state facts sufficient to constitute a cause of action.

To state a cause of action for breach of contract, a plaintiff must plead the contract, the plaintiff’s performance of the contract or excuse for nonperformance, Defendant’s breach, and finally the resulting damage. (Otworth v. Southern Pac. Transportation Co. (1985) 166 Cal.App.3d 452, 458.) Further, the complaint must indicate whether the contract is written, oral, or implied by conduct. (Code Civ.Proc. § 430.10(g).) General allegations stating that defendants violated a contract are insufficient, and plaintiffs must state facts showing a breach. (Levy v. State Farm Mutual Automobile Ins. Co. (2007) 150 Cal.App.4th 1, 5-6.) For breach of a written contract, the essential terms must be set out verbatim in the body of the complaint or a copy of the written instrument must be attached and incorporated by reference. (Otworth v. Southern Pac. Transportation Co., supra, 166 Cal.App.3d at 459.)

“Where written documents are the foundation of an action and are attached to the complaint and incorporated therein by reference, they become a part of the complaint and may be considered on demurrer.” (Qualcomm, Inc. v. Certain Underwriters at Lloyd’s, London (2008) 161 Cal.App.4th 184, 191.) “When a dispute arises over the meaning of contract language, the first question to be decided is whether the language is ‘reasonably susceptible’ to the interpretation urged by the party. If it is not, the case is over.” (S. Cal. Edison Co. v. Super. Ct., (1995) 37 Cal.App.4th 839, 847-48.) “Under the doctrine of truthful pleading, the courts ‘will not close their eyes to situations where a complaint contains allegations of fact inconsistent with attached documents, or allegations contrary to facts that are judicially noticed.’ [Citation.] ‘False allegations of fact, inconsistent with annexed documentary exhibits [citation] or contrary to facts judicially noticed [citation], may be disregarded.” (Trinity Park; L.P. v. City of Sunnyvale (2011) 193 Cal.App.4th 1014, 1027.)

Here, Defendant argues that the First Amended Complaint fails to state a cause of action for breach of contract against him personally because Defendant, in his individual capacity, was not a party to any of the agreements alleged in the First Amended Complaint. The First Amended Complaint bases this cause of action on an alleged breach of a Services Agreement, which is attached to the First Amended Complaint. (FAC ¶¶ 16, 39, Exh. B.) Although the body of First Amended Complaint alleges that both Steaman Group and Defendant Fierstadt contracted with Plaintiff, the plain language of the Services Agreement attached to the Complaint states that the only parties to the agreement are Plaintiff and Steaman Group. (FAC Exh. B.) Defendant Fierstadt is not mentioned. (Id.) The Services agreement is certainly “reasonably susceptible” to the interpretation offered by Defendant Fierstadt that he is not a party to the Agreement. As Plaintiff has not responded to this demurrer, Plaintiff has set forth no alternative interpretation of the Agreement which might comport with the allegations in the body of the Complaint. Even drawing all reasonable inferences in light of the non-moving party, as required on demurrer, the Court can find no allegations supporting an alternative interpretation. Indeed, the First Amended Complaint even concedes that the Agreement states that it “constitutes the sole and entire agreement for all subject matter contained therein, superseding any previous understandings.” (FAC ¶ 19.) The Court therefore finds that Defendant has demonstrated that Plaintiff has not adequately alleged the existence of a contract between Plaintiff and Defendant Fierstadt in his individual capacity. Therefore, Plaintiff has failed to state facts sufficient to constitute a cause of action.

Accordingly, Defendant Fierstadt’s demurrer to the first cause of action is SUSTAINED.

Second Cause of Action: Breach of Contract

Defendant demurs to the second cause of action for breach of contract for failure to state facts sufficient to constitute a cause of action.

Defendant contends that the second cause of action for beach of the Non-Circumvention and Non-Disclosure Agreement (NCNDA) fails for the same reasons as the first cause of action. The NCNDA is likewise attached to the First Amended Complaint, and, again, lists the parties as Plaintiff and Defendant Steaman Group, without reference to Defendant Fierstadt. (FAC Exh. A.) For the reasons stated above in connection with the first cause of action, the Court likewise finds that Plaintiff has failed to allege a contract between Plaintiff and Defendant Fierstadt, and has therefore failed to state facts sufficient to constitute a cause of action.

Accordingly, Defendant Fierstadt’s demurrer to the second cause of action is SUSTAINED.

Third Cause of Action: Breach of Implied Covenant of Good Faith and Fair Dealing

Defendant demurs to the third cause of action for breach of the implied covenant of good faith and fair dealing for failure to state facts sufficient to constitute a cause of action.

A claim for breach of the covenant of good faith and fair dealing “is nothing more than a cause of action for breach of contract.” (Habitat Trust for Wildlife Inc. v. City of Rancho Cucamonga (2009) 175 Cal.App.4th 1306, 1344.)

As the Court has already concluded that Plaintiff has failed to allege a cause of action for breach of either of the two contracts identified in the First Amended Complaint, the Court likewise concludes that Plaintiff has failed to allege a cause of action for breach of the implied covenant of good faith and fair dealing.

Accordingly, Defendant’s demurrer to the third cause of action for breach of the implied covenant of good faith is SUSTAINED.

Fourth Cause of Action: Negligent Misrepresentation

            Defendant demurs to the fourth cause of action for negligent misrepresentation for failure to state facts sufficient to constitute a cause of action.

“Negligent misrepresentation requires an assertion of fact, falsity of that assertion, and the tortfeasor’s lack of reasonable grounds for believing the assertion to be true. It also requires the tortfeasor’s intent to induce reliance, justifiable reliance by the person to whom the false assertion of fact was made, and damages to that person. An implied assertion of fact is ‘not enough’ to support liability.” (SI 59 LLC v. Variel Warner Ventures, LLC (2018) 29 Cal.App.5th 146, 154.) “As is true of negligence, responsibility for negligent misrepresentation rests upon the existence of a legal duty, imposed by contract, statute or otherwise, owed by a defendant to the injured person. The determination of whether a duty exists is primarily a question of law.” (Eddy v. Sharp (1988) 199 Cal.App.3d 858, 864.)

Defendant Fierstadt contends that the fourth cause of action fails because Plaintiff has not alleged any legal duty violated by Defendant other than the alleged contractual obligations, which are invalid for the reasons stated above. The Court concurs. A review of the First Amended Complaint reveals no allegations of any legal duty owed by Defendant Fierstadt to Plaintiff with respect to the negligent misrepresentation claim. Indeed, the only obligations alleged are the obligations arising out of the alleged contractual agreement, which the Court has already concluded are insufficient as to Defendant Fierstadt. (See, e.g., FAC ¶ 11.) The Court therefore finds that Plaintiff has failed to state facts sufficient to constitute a cause of action for negligent misrepresentation.

Accordingly, Defendant Fierstadt’s demurrer to the fourth cause of action is SUSTAINED.

Leave to Amend

When a demurrer is sustained, the Court determines whether there is a reasonable possibility that the defect can be cured by amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318).  When a plaintiff “has pleaded the general set of facts upon which his cause of action is based,” the court should give the plaintiff an opportunity to amend his complaint, since plaintiff should not “be deprived of his right to maintain his action on the ground that his pleadings were defective for lack of particulars.” (Reed v. Norman (1957) 152 Cal.App.2d 892, 900.) Accordingly, California law imposes the burden on the plaintiffs to demonstrate the manner in which they can amend their pleadings to state their claims against a defendant.  (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) “Denial of leave to amend constitutes an abuse of discretion unless the complaint shows on its face it is incapable of amendment.  [Citation.]  Liberality in permitting amendment is the rule, if a fair opportunity to correct any defect has not been given." (Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1227.)

Here, Plaintiff, having not responded to the demurrer, has not demonstrated how the complaint could be amended to cure these defects. Further, Plaintiff has already amended the Complaint once in lieu of opposing a demurrer that raised similar issues. However, as this is the first instance where the Court has ruled on the adequacy of Plaintiff’s allegations, the Court will exercise its discretion to grant Plaintiff leave to amend the Complaint once more.

CONCLUSION:

            Accordingly, Defendant Jack Fierstadt’s Demurrer to the First Amended Complaint is SUSTAINED.

            Plaintiff shall have 30 days leave to amend the Complaint.

            Moving Party to give notice.

IT IS SO ORDERED.

Dated:  March 1, 2023                                    ___________________________________

                                                                                    Theresa M. Traber

                                                                                    Judge of the Superior Court

            Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.