Judge Thomas D. Long, Case Number: 22STCV31749, Date: 2024-01-02 Tentative Ruling

On May 16, 2023, Plaintiff Jia Chen, Inc. filed a second amended complaint (“SAC”) against Defendants Deyuan Decoration Inc., Jiang Lin, and Ying Xiong.

On June 13, 2023, each Defendant filed nearly identical demurrers and motions to strike.

A demurrer for sufficiency 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, accepting the alleged facts as true. (Nolte v. Cedars-Sinai Medical Center (2015) 236 Cal.App.4th 1401, 1406.) A special demurrer for uncertainty under Code of Civil Procedure section 430.10, subdivision (f) is disfavored and will only be sustained where the pleading is so bad that defendant or plaintiff cannot reasonably respond—i.e., cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him or her. (Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.)

All Defendants demurrer to the ninth cause of action for fraudulent inducement for lack of specificity. This cause of action alleges both negligent misrepresentation, intentional misrepresentation, and concealment. (SAC ¶¶ 104-107, 109, 112-113.)

“The essential elements of a count for intentional misrepresentation are (1) a misrepresentation, (2) knowledge of falsity, (3) intent to induce reliance, (4) actual and justifiable reliance, and (5) resulting damage. [Citations.] The essential elements of a count for negligent misrepresentation are the same except that it does not require knowledge of falsity but instead requires a misrepresentation of fact by a person who has no reasonable grounds for believing it to be true. [Citations.]” (Chapman v. Skype Inc. (2013) 220 Cal.App.4th 217, 230-231.) “Causes of action for intentional and negligent misrepresentation sound in fraud and, therefore, each element must be pleaded with specificity.” (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1166.) “‘This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.’ [Citation.]” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645 (Lazar).)

Fraud based on concealment requires that “(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.” (Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 310-311.)

Plaintiff alleges that in a contract signed on November 21, 2021, Lin and Xiong (under Deyuan’s business name) represented that the materials used for the construction project would be imported from Europe and were of higher quality than what would be typically purchased domestically. (SAC ¶¶¶ 14-17.) At an unspecified time and “on multiple occasions,” Defendants orally negligently misrepresented that Deyuan and Lin were licensed contractors and that Xiong had the expertise to design the tenant improvements. (SAC ¶¶ 19, 104-105.) Defendants concealed their lack of a contractor’s license. (SAC ¶ 113.) Defendants orally negligently misrepresented that they would perform the design and construction within the standard of care for the industry professionals. (SAC ¶ 107.) Defendants also orally negligently misrepresented the country of origin and manufacturer price for the various materials used for the construction project. (SAC ¶ 109.) Defendants knew the representations were false and intended for Plaintiff to rely on the false representations when entering into the service contracts. (SAC ¶¶ 111-112.) Plaintiff alleges that Defendants “acted with malice, oppression, and/or fraud with a willful and conscious disregard of the rights and welfare of Plaintiff.” (SAC ¶ 114.)

These allegations lack specific facts about how, when, where, to whom, and by what means each misrepresentation was made. (See Lazar, supra, 12 Cal.4th at p. 645.) Plaintiff alleges both misrepresentation and concealment regarding contractors’ licenses. Plaintiff alleges that Defendants negligently misrepresented certain facts, but they also intentionally deceived Plaintiff such that they may be liable for punitive damages. Plaintiff still does not allege who made certain misrepresentations on behalf of the entity, Deyuan. This cause of action is therefore uncertain and lacking the required particularity.

The court may, upon a motion or at any time in its discretion: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (Code Civ. Proc., § 436, subds. (a)-(b).)

Defendants move to strike the SAC’s ninth cause of action “because Plaintiff in bad faith once again failed to honor California standard for pleading a fraud case(We comprehensively discussed it in Defendant’s demurrer to Second amended complaint).” This is duplicative of the demurrers.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. If all parties in the case submit on the tentative ruling, no appearances before the Court are required unless a companion hearing (for example, a Case Management Conference) is also on calendar.

Hon. Thomas D. Long

Judge of the Superior Court