Judge Thomas D. Long, Case Number: 23STCV00699, Date: 2023-07-13 Tentative Ruling

On January 12, 2023, Plaintiff Carl Rinsch filed this action against Defendants Jacob Koo, Damon Capital LLC, Kristofer Eriksson, and others.

The Court will not strike or deny the demurrer and motion to strike due to Defendants’ failure to include a statement of facts. (Opposition to Demurrer at pp. 6-7; Opposition to Motion to Strike at p. 4.)

Defendants demur to the third, fourth, fifth, sixth, seventh, eighth, and ninth causes of action.

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.

A. Plaintiff Does Not Allege Fraud With Specificity (Third, Fourth, Fifth Causes of Action).

The third and fourth causes of action are brought against Eriksson for intentional and negligent misrepresentation. The fifth cause of action is brought against all Defendants for false promise.

“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.) Promissory fraud is a subspecies of fraud and deceit. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 973-974.)

“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.] A plaintiff’s burden in asserting a fraud claim against a corporate employer is even greater. In such a case, the plaintiff must ‘allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.’ [Citation.]” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

Plaintiff alleges that Eriksson, an agent of Hastens and Damon Capital, falsely “represented to Mr. Rinsch that Hastens would be able to deliver the products requested according to the customizations that were agreed upon,” and falsely represented that Plaintiff would get a refund if the products were not in conformity. (Complaint ¶¶ 41, 51-52, 61-62.) Plaintiff also alleges that the Hastens website contains a returns and refunds policy. (Complaint ¶ 20.) This does not allege with specificity any misrepresentation by Damon Capital, Eriksson, or Koo.

B. Plaintiff Does Not Clearly Allege What Property Was Converted (Sixth Cause of Action).

Conversion requires (1) plaintiff’s ownership or right to possession of personal property, (2) defendant’s disposition of the property inconsistent with plaintiff’s rights; and (3) resulting damages. (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119)

Plaintiff alleges that Eriksson and Damon Capital wrongfully exercised control over his property. (Complaint ¶ 69.) There is no allegation about Koo’s involvement. Plaintiff “has a right to possess the customized mattresses and related accessories that he had already paid money for,” and Eriksson and Damon Capital have prevented Plaintiff from having access to the customized mattresses and related accessories and refused to return the payment he had already made. (Complaint ¶¶ 70-71.)

With respect to the customized mattresses and related accessories, it is not clear what property is the subject of this claim. Plaintiff purchased “mattresses and bedding accessories,” received a queen bed that was not according to the specifications, and received a partial delivery. (Complaint ¶¶ 16, 19, 21.)

With respect to the failure to return Plaintiff’s payment, Plaintiff cannot state a claim for conversion of this money. “Money cannot be the subject of a cause of action for conversion unless there is a specific, identifiable sum involved.” (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1491.) “California cases permitting an action for conversion of money typically involve those who have misappropriated, commingled, or misapplied specific funds held for the benefit of others.” (PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384, 396.) That is not alleged here.

C. Plaintiff Alleges A Sum Certain For Money Had And Received (Seventh Cause of Action).

The seventh cause of action against Damon Capital alleges money had and received.

“A cause of action for money had and received is stated if it is alleged the defendant ‘is indebted to the plaintiff in a certain sum “for money had and received by the defendant for the use of the plaintiff.”’ [Citation.]” (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460.)

Defendants argue that Plaintiff has not specifically alleged a sum of money is due in a sum certain. (Demurrer at p. 10.) Plaintiff alleges that he made a series of purchases totaling $637,768.80, and he details each payment made to Damon Capital. (Complaint ¶¶ 16-17.)

D. Plaintiff Does Not Properly Plead Promissory Estoppel (Eighth Cause of Action).

The eighth cause of action is brought against all Defendants for promissory estoppel.

“The elements of promissory estoppel are (1) a promise, (2) the promisor should reasonably expect the promise to induce action or forbearance on the part of the promisee or a third person, (3) the promise induces action or forbearance by the promisee or a third person, and (4) injustice can be avoided only by enforcement of the promise.” (Newport Harbor Ventures, LLC v. Morris Cerullo World Evangelism (2016) 6 Cal.App.5th 1207, 1225.) “Promissory estoppel is ‘a doctrine which employs equitable principles to satisfy the requirement that consideration must be given in exchange for the promise sought to be enforced.’” (Kajima/Ray Wilson v. Los Angeles County Metropolitan Transp. Authority (2000) 23 Cal.4th 305, 310.)

“Under this doctrine a promisor is bound when he should reasonably expect a substantial change of position, either by act or forbearance, in reliance on his promise, if injustice can be avoided only by its enforcement. [Citation.] The purpose of this doctrine is to make a promise binding, under certain circumstances, without consideration in the usual sense of something bargained for and given in exchange. If the promisee’s performance was requested at the time the promisor made his promise and that performance was bargained for, the doctrine is inapplicable.” (Youngman v. Nevada Irr. Dist. (1969) 70 Cal.2d 240, 249.)

Plaintiff alleges that Eriksson, as a representative of Hastens, promised that he would deliver customized mattresses and related accessories in exchange for a payment of money according to the contract. (Complaint ¶ 83.) Plaintiff relied on the promises and paid money according to the contract, and he was injured by not receiving the products or a refund. (Complaint ¶¶ 83-86.) There are no allegations about Plaintiff’s reliance on the promise, harm caused by that reliance, or injustice requiring enforcement of the promise. Instead, the Complaint alleges a standard breach of contract in which Plaintiff’s payment bargained-for consideration.

E. Plaintiff Does Not Allege A Basis For Unjust Enrichment (Ninth Cause of Action).

The ninth cause of action is brought against all Defendants for unjust enrichment.

Defendants argue that there is no such cause of action for unjust enrichment. (Demurrer at p. 11.) “The elements of an unjust enrichment claim are the ‘receipt of a benefit and [the] unjust retention of the benefit at the expense of another.’ [Citation.]” (Peterson v. Cellco Partnership (2008) 164 Cal.App.4th 1583, 1593.) Unjust enrichment is not a cause of action, but a court may construe a cause of action for unjust enrichment as a cause of action for quasi-contract seeking restitution. (Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 231.) Although a plaintiff usually cannot bring an action based on quasi-contract when there is an express contract covering the same matter, restitution may be awarded when an express contract was procured by fraud or is unenforceable. (Ibid.) “A claim for restitution is permitted even if the party inconsistently pleads a breach of contract claim that alleges the existence of an enforceable agreement.” (Ibid.)

Plaintiff alleges that there was an express contract, Defendants received money in exchange for products, Plaintiff did not receive the products, Defendants did not provide a refund, and Defendants misappropriated the money. (Complaint ¶¶ 19, 88-92.) This does not allege quasi-contract or a basis for restitution.

The demurrer to the seventh cause of action is OVERRULED. The demurrer is otherwise SUSTAINED with 10 days’ leave to amend.

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 Plaintiff’s prayer for punitive damages. (Motion at pp. 2-5.) A plaintiff can recover punitive damages in tort cases where “the defendant has been guilty of oppression, fraud, or malice.” (Civ. Code § 3294, subd. (a).) “The mere allegation an intentional tort was committed is not sufficient to warrant an award of punitive damages. [Citation.] Not only must there be circumstances of oppression, fraud or malice, but facts must be alleged in the pleading to support such a claim. [Citation.]” (Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166, fn. omitted.)

The Court concurrently sustains Defendants’ demurrer to the fraud causes of action. There are no other specific facts showing oppression or malice. Instead, Plaintiff alleges only a standard breach of contract, although framed as tort claims.

Defendants move to strike Plaintiff’s prayer for attorney fees. (Motion at p. 5.) A party is entitled to attorney fees only when specifically provided by statute or by agreement between the parties. (Code Civ. Proc., § 1021.) Plaintiff does not allege a statutory or contractual basis for attorney fees.

Plaintiff argues that this action “derives from Defendant Hasten Bed’s breach of their contract.” (Opposition at p. 6.) However, the Complaint does not attach or identify an attorney fees provision in the contract.

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