Judge Upinder S. Kalra, Case 22STCV18674 2023-02-27 Tentative Ruling

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MOVING PARTY: Defendant Moon & Dorsett, PC, Dana Moon, Jeffrey Dorsett, and Jeremy Cook

1. An order sustaining the demurrer to the 1^st, 2^nd, 3^rd, and 4^th causes of action.

On June 7, 2022, Plaintiff Andrew Milder (“Plaintiff”) filed a complaint against Defendants Moon & Dorsett, PC, Dana Moon, Jeffrey Dorsett & Jeremy Cook (“Defendants.”) The complaint alleges TWO causes of action: (1) Fraud and (2) Breach of Contract.[1] Plaintiff alleges that Defendants failed to notify Plaintiff when the retainer fees exceeded $10,000 and did not provide professional services.

On September 16, 2022, Defendant Jeremy Cook filed a Declaration of Demurring Party in Support of Automatic Extension.

On October 7, 2022, Defendants Moon & Dorsett, PC, and Jeremy Cook filed a Demurrer, which was SUSTAINED, with leave to amend.

On December 28, 2022, Plaintiff filed a First Amended Complaint alleging FOUR Causes of Action.

On January 3, 2023, Plaintiff filed a document labeled “ERRATA Re Filed First Amended Complaint” purporting to add a Fifth Cause of Action.

The current Demurrer without a Motion to Strike was filed on January 30, 2023. Plaintiff’s Opposition was filed on February 14, 2023. Defendants’ Reply was filed on February 16, 2023.

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. 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. …. 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 147 Cal.App.4th at 747.)

Prior to filing a demurrer, the demurring party is required to satisfy their meet and confer obligations pursuant to Code of Civ. Proc. §430.41, and demonstrate that they so satisfied their meet and confer obligation by submitting a declaration pursuant to Code of Civ. Proc. §430.41(a)(2) & (3). No Declaration has been provided as to whether the parties met and conferred. However, the failure to meet and confer is insufficient for this Court to Overrule or Sustain a demurrer. (CCP § 430.41(a)(4).)

Plaintiff requests that the Court take judicial notice of the following documents:

1. Ruling and Order Granting Plaintiff’s Motion for New Trial, dated May 29, 2018, by Hon. Yvette Palazuelos, Dept. 28 Los Angeles Superior Court

2. Defendant’s Jeremy Cook’s Declaration in Support of Plaintiff’s Motion for a New Trial, signed on April 24, 2018, filed in Milder v. Holey et al. LASC Case No. BC581072 in April 2018

3. Cal. R. app. I Emergency Rule 9 (California Judicial Council Emergency Rule 9)

4. Plaintiff’s Record of Electronic Submission of Filing of Summons and Complaint for Electronic Filing through Los Angeles Superior Court E-File Service Provider Countrywide Process on 05/31/22

The Court may take judicial notice of the existence of the records, but not the truth of matters asserted in such records. (Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1565). As a result, although the court may take judicial notice that the documents exists, the Court may not take judicial notice of the truth of the facts in the documents.

Additionally, Evidence Code only allows the Court to take judicial notice of certain types of documents. The court may take judicial notice of “official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States,” “[r]ecords of (1) any court of this state or (2) any court of record of the United States or of any state of the United States,” and “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Evid. Code § 452, subds. (c), (d), and (h).) The Evidence Code does not allow the Court to take judicial notice of discovery responses or parts of cases, such as depositions.

While the Court may take judicial notice of the existence of documents, it may not take judicial notice of the truth of the facts in the documents. Here, it is evident that Plaintiff is seeking to have the truth of certain documents be judicially noticed.

Therefore, the Request for Judicial Notice is DENIED, as to Nos. 1, 2, 4, and GRANTED, as to Nos. 3.

Defendants demur on the grounds that the four causes of action all fail for various reasons.

Defendants argue that all causes of action are time barred under the various statute of limitations. First, Defendants argue that the cause of action for breach of contract and UCL causes of action fail because they are all time barred under CCP § 340.6 since this cause of action is based on allegations of billing dispute and attorney malpractice. The latest date in the FAC is March 2018 and Defendants withdrew as counsel on April 9, 2018. Second, Defendants argue that the cause of action for fraud is time-barred. Under CCP §§ 335 and 338, a three-year statute of limitation is imposed for cause of action based in fraud. The latest date in the FAC is March 2018 and Defendants withdrew as counsel on April 9, 2018.

Plaintiff argues that the statute of limitations as to all causes of action must take into consideration the Judicial Council Emergency Rule 9, which extended the statutes of limitations by 180 days. (RJN B.) Additionally, the Court can take judicial notice of the fact that Plaintiff, acting in pro per, filed the initial complaint on May 31, 2022, and therefore, the four year-statute of limitations is met. (RJN C.) Additionally, Plaintiff asserts that the Court can judicial notice of the May 29, 2018 ruling (RJN A) and therefore, “it is a question of fact whether, despite the granting of Defendants’ motion to withdraw on April 9, 2018, Defendants were still representing Plaintiff through May 29, 2018.”[2] (Opp. 26: 3-5.)

The Court finds that the Plaintiff’s arguments about the statute of limitations fail. First, the statute of limitations for breach of contract for fee disputes is the same as legal malpractice. (Bird, Marell, Boxer Wolpert v. Superior Court (2003) 106 Cal.App.4th 419, 429-431.) Thus, Under the facts of the relevant statute of limitation is one year for the breach of contract causes of action. (CCP § 340.6) Second, the statute of limitations for fraud is three years, not four years. (CCP § 338(d).) Even based on a May 2018 date, and accounting for Emergency Rule 9, the statute of limitations ran in 2021.Thus, whether or not . it was a question of fact whether Defendants were representing Plaintiff through May 29, 2018 is of no legal significance. (The Court also notes that this information was not included in the FAC, but rather in the Opposition.)

1. Breach of Contract Cause of Action – Breach of Covenant of Good Faith and Fair Dealing

Even if the cause of action was not time barred, the complaint fails to allege essential elements. Specifically, the FAC fails to allege damages in that it fails to allege how the judgment harmed Plaintiff. The FAC alleges that Plaintiff suffered by having to incur expenses to fix the remedy, which is “essentially the same as the prior allegation of suffering “by forcing plaintiff to file this case” which the court determined was insufficient. Lastly, the FAC is not alleged against individual Defendants.

Plaintiff argue that the FAC adequately alleges a breach of contract: the parties entered a contract whereby Defendant promised that Plaintiff would not incur excessive fees; Defendants breached this contract by misleading Plaintiff and failing to keep Plaintiff informed of their representation. Additionally, Plaintiff argues that the cause of action is not time-barred by the four-year statute of limitations.

“To establish a cause of action for breach of contract, the plaintiff must plead and prove (1) the existence of the contract, (2) the plaintiff’s performance or excuse for nonperformance, (3) the defendant’s breach, and (4) resulting damages to the plaintiff. [Citation.]” (Maxwell v. Dolezal (2014) 231 Cal.App.4th 93, 97-98.)

A review of the complaint indicates that the second cause of action for breach of contract does not sufficiently allege the required elements. First, as stated above, the cause of action is timed barred, as the latest date in the FAC is March 2018. Second, Plaintiff fails to allege sufficient injury, arguing that Plaintiff was harmed by casing a judgment entered against plaintiff and having to incur an expense to remedy the harm. Previously, this Court stated that “by forcing Plaintiff to file this case” was insufficient to constitute a cause of action for breach of contract; the Court finds no distinction between the previous alleged injury and the current alleged injury paragraph 44 of the FAC.

Demurrer as to the Breach of Contract Cause of Action is SUSTAINED, without leave to amend.

Even if the cause of action was not time barred, Defendants argue that the UCL causes of action are vague and conclusory. Defendants assert that Plaintiff is attempting to reframe a malpractice action into a UCL claim, but this fails. CCP § 340.6 applies to “all claims the merits of which necessarily depend on proof that the attorney violated a professional obligation in the course of providing professional services…” (Demurrer 7: 22-24.) Even still, the FAC lacks the required particularity. Additionally, Plaintiff was allowed to amend the breach of contract and fraud causes of action, and thus, Plaintiff cannot amend without having obtained permission to do so.

Plaintiff argues that the these causes of action are governed by the four-year statute of limitation and thus are not timed barred. Additionally, Plaintiff argues that the FAC alleges that Defendants engaged in “misleading and deceptive conduct, falsely represented its billing practices, engaged in extortive and exploitive invoicing tacitcs at the expense of their client’s vulnerability, and took oppressive actions in an attempt to extract themselves from executing their promises services.” (Opp. 14: 3-7, FAC ¶¶ 57-72.)

California Business and Professions Code section 17200 prohibits “any unlawful, unfair or fraudulent business act or practice.” (Bus. & Prof. Code § 17200; see Clark v. Superior Court (2010) 50 Cal.4th 605, 610.) “An unlawful business practice or act is an act or practice, committed pursuant to business activity, that is at the same time forbidden by law.” (Klein v. Earth Elements, Inc. (1997) 59 Cal.App.4th 965, 969.) A violation of other laws is deemed independently actionable under the UCL. (See Law Offices of Mathew Higbee v. Expungement Assistance Services (2013) 214 Cal.App.4th 544, 554.) “‘Virtually any law—federal, state or local—can serve as a predicate for a section 17200 action.’” (Id. (quoting Troyk v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1335).) “A plaintiff alleging unfair business practices under these statutes must state with reasonable particularity the facts supporting the statutory elements of the violation.” (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 619).

After a review of the complaint, the Court finds that the third and fourth cause of action under the Business & Professions Code §§ 17200 and 17500 both fail. First, they are time-barred under the applicable statute of limitation as stated above. Second, the previous complaint only factually alleged two causes of action, breach of contract and fraud, which were both sustained. There were facts or causes of action properly alleging UCL claims. Plaintiff did check a box under Other (See BOX 8), listing UCL sections, but no facts. Thus, to add these causes of action, Plaintiff need to permission. The Court of Appeal in Zakk stated:

Following an order sustaining a demurrer or a motion for judgment on the pleadings with leave to amend, the plaintiff may amend his or her complaint only as authorized by the court's order. The plaintiff may not amend the complaint to add a new cause of action without having obtained permission to do so, unless the new cause of action is within the scope of the order granting leave to amend. (Zakk v. Diesel (2019) 33 Cal.App.5th 431, 456.)

Here, this cause of action does was not within the scope of the order granting leave to amend.

Therefore, the UCL Causes of Action, Violation of Business & Professions Code § 17200 and 17500, is SUSTAINED, without leave to amend.

Even still, Defendants argue that the essential elements are not alleged. Here, there are no factual allegations of a specific date or specific person who made the purported representation. Previously, this Court stated that Plaintiff failed to allege the who and the when; the FAC did not cure this defect. Lastly, the FAC fails to allege damages based on the alleged misrepresentation.

Plaintiff argues that Defendants’ demurrer as to this cause of action is moot because this cause of action is eclipsed “by the allegations that the conduct constitute an overt breach of fiduciary duty to their client Milder, which carries a four-year statute of limitations.” (Opp. 16: 1-5.)

“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.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.)

“In California, fraud must be pled specifically; general and conclusory allegations do not suffice…this particularity requirements necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tenders.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)“[W]hen averments of fraud are made, the circumstances constituting the alleged fraud must be specific enough to give defendants notice of the particular misconduct so that they can defend against the charge and not just deny that they have done anything wrong.” (Vess v. Ciba–Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir.2003) (internal quotations and citations omitted).

A review of the Complaint indicates that the cause of action for fraud is not sufficiently pleaded. As stated above, a fraud cause of action must be pleaded with specificity and particularity. First, there are no facts that indicate when the alleged misrepresentation was made. Paragraphs 6 and 48 state that Defendant Moon made various representations during discussions, but fails to indicate when these took place. Additionally, Plaintiff has failed to specifically allege damages. The complaint states that Plaintiff was required to expend money to engage other legal assistance and “continued to incur damage on account of Defendants’ actions through the time that the courts were inaccessible due to the covid related restrictions.” (FAC ¶ 55.) However, if Plaintiff was required to engage in other legal assistance, then Plaintiff is likely to know how much was required to retain new counsel, or at the very minimum, how much Plaintiff has paid to new counsel. This is insufficient for a fraud cause of action. Second, the cause of action is time-barred. CCP § 338 provides which actions must be brought within three years. Subsection (d) deals with fraud, stating” “an action for relief on the ground of fraud or mistake. The cause of action in that case is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.”This Court previously stated that the complaint’s latest date was April 2018. Here, the FAC’s latest date was March 2018. Therefore, this is outside the three-year statute of limitation. Even under Plaintiff’s argument that there is a four-year statute of limitation, this is still barred.

Demurrer as to the Fraud Cause of Action is SUSTAINED, without leave to amend.

As for the fifth cause of action, Plaintiff filed a Notice of Errata on January 3, 2023, to include a fifth cause of action, which was erroneously left off the FAC filed on December 29, 2022.

However, as stated above regarding adding new causes of action after a sustained demurrer, Plaintiff was required to obtain permission from the court. Here, this is an additional cause of action that was not part of the demurrer, but was part of the Motion to Strike, which was GRANTED.

Demurrer as to the for Breach of Fiduciary Duty Cause of Action is SUSTAINED, without leave to amend.

Leave to amend should be liberally granted if there is a reasonable possibility an amendment could cure the defect. (County of Santa Clara v. Superior Court (2022) 77 Cal.App.5th 1018,1035.) The Plaintiff has the burden of demonstrating that leave to amend should be granted, and that the defects can be cured by amendment. (“Plaintiff must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading.” Goodman v. Kennedy (1976) 18 Cal.3d 335, 349). Here, it is unlikely that Plaintiff will be able to cure the defects. Here, it is evident that the causes of action are time-barred under applicable statute of limitations. The Court permitted Plaintiff to amend the original complaint, but Plaintiff has failed to cure the defects, especially those related to the statute of limitations.

Demurrer is SUSTAINED, without leave to amend as to all causes of action. Pursuant to CCP § 581d, this written order of dismissal constitutes a judgment and shall be effective for all purposes. The Clerk shall note this judgment in the register of actions in this case.

[1] In section 8 of the complaint, Plaintiff also alleges Breach of fiduciary, malpractice, B&P 17200&17500, CLRA CC 1750, intentinal [sic] & negligent inflic [sic] of emotional distress. In section 9, Plaintiff also alleges unjust enrichment, civil rights violations class action.

[2]Interestingly this allegation is inconsistent with the Declaration of Jeremy Cook that Plaintiff sought to have this Court take judicial notice. In that April 24, 2018 declaration, Cook declares that he was Plaintiff’s former attorney.