Judge Upinder S. Kalra, Case Number: 24STCV06863, Date: 2024-08-27 Tentative Ruling

MOVING PARTY: Defendants Othman Salem Holdings, LLC, Salem Property Holding, L.P. a.k.a. Salem Property Holdings, LLC, Riffat D. Salem, and Nabil D. Salem.

1. Demurrer to the entire Complaint for failure to state sufficient facts to constitute a cause of action and for uncertainty.

On March 19, 2024, Plaintiff ADR Engineers, Inc. (Plaintiff) filed a Complaint against Defendants Othman Salem Holdings, LLC, Salem Property Holdings LP a.k.a. Salem Property Holdings, LLC, Riffat D. Salem, and Nabil D. Salem (Defendants) with three causes of action for: (1) Breach of Contract; (2) Intentional Misrepresentation; and (3) Negligent Misrepresentation.

According to the Complaint, the parties entered into a service on contract on January 3, February 7, and July 5, 2023 concerning a property located at4051-4055 Jackson Ave., Culver City, CA 90232. Plaintiff alleges that Defendants have not paid the outstanding amount of $30,100.00.

On May 28, 2024, Defendants filed the instant demurrer. On August 14, 2024, Plaintiff filed an opposition. On August 20, 2024, Defendants filed a reply.

Prior to filing a demurrer, the demurring party is required to satisfy their meet and confer obligations pursuant to Code of Civ. Proc. (CCP) §430.41 and demonstrate that they so satisfied their meet and confer obligation by submitting a declaration pursuant to CCP §430.41(a)(2) & (3).¿Here, the parties met and conferred telephonically on May 3, 2024 without reaching a resolution. (Flores Decl. ¶¶ 5-7.)

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.)¿

Moving Parties contend that the court should sustain their demurrer because Defendants Othman Salem Holdings, LLC, Riffat D. Salem, and Nabil D. Salem are not parties to the contract.[1] Plaintiff argues that it alleged alter ego and agency claims concerning the Defendants such that the breach of contract claim applies to all of them.[2]

“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 written contract may be pleaded either by its terms – set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference – or by its legal effect. [Citation.] In order to plead a contract by its legal effect, plaintiff must ‘allege the substance of its relevant terms.’” (Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 993.) “The elements of a breach of oral contract are the same as those for breach of a written contract. [Citations.]” (Stockton Mortgage, Inc. v. Tope (2014) 223 Cal.App.4th 437, 453.)

Upon reviewing the Complaint, the court agrees that Plaintiff has insufficiently alleged a claim for breach of contract as to Defendants Othman Salem Holdings, LLC, Riffat D. Salem, and Nabil D. Salem. Notably, the contracts attached to the Complaint are with Project Owner Salem Property Holdings, LLC. (Complaint, Exhibit A.) When there is a conflict between the allegations of a complaint and the exhibits attached to that complaint, the exhibits control. (Moran v. Prime Healthcare Mgmt., Inc. (2016) 3 Cal.App.5th 1131, 1145.1146.) The court does not see anything in the attached Proposals for Design Services that show the contracts are also with the other Defendants.

Accordingly, the court SUSTAINS Defendants’ demurrer to the first cause of action with leave to amend.

Moving Parties contend that Plaintiff failed to plead their fraud claim with the requisite specificity. Moving Parties additionally contend that Plaintiff must allege facts other than nonpayment to support their fraud claim. Plaintiff does not address the specificity argument at all and argues that the parties’ history shows justifiable reliance.

“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. [Citation.] (Chapman v. Skype, Inc. (2013) 220 Cal.App.4th 217, 230-31.) “ ‘ “The elements of negligent misrepresentation are similar to intentional fraud except for the requirement of scienter; in a claim for negligent misrepresentation, the plaintiff need not allege that the defendant made an intentionally false statement, but simply one as to which he or she lacked any reasonable ground for believing the statement to be true.” [Citations.] [Citation.]’ ” (Bains v. Moores (2009) 172 Cal.App.4th 445, 454.) “Causes of action for intentional and negligent misrepresentation sound in fraud and, therefore, each element must be pleaded with specificity. [Citations.]” (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1166, disapproved of on other grounds by Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905.)

A cause of action for fraud must be alleged with specificity such that Plaintiff pleads facts that “show how, when, where, to whom, and by what means the representations were tendered.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) Similarly, “[t]he requirement of specificity in a fraud action against a corporation requires the plaintiff to 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.” (Tarmann v. State Farm Mutual Automobile Insurance Co. (1991) 2 Cal.App.4th 153, 157.)

Upon reviewing the Complaint, the court agrees that Plaintiff insufficiently alleged a claim for intentional misrepresentation. Notably, Plaintiff did not allege facts showing the “how, when, where, to whom, and by what means the representations were tendered” as required under Lazar.

Accordingly the court SUSTAINS Defendants’ demurrer to the second cause of action with leave to amend.

Accordingly, the court SUSTAINS Defendants’ demurrer to the third cause of action with leave to amend.

1. Demurrer to the Complaint is SUSTAINED in its entirety with 20 days leave to amend.

[1] Moving Parties also contend that this claim is limited to Defendant Salem Property Holding, LP a.k.a. Salem Property Holdings, LLC only. (Demurrer 12:4-5.)

[2] Plaintiff cites no authority supporting this argument. Additionally, the allegations on which Plaintiff relies are legal conclusions, not facts.

[3] Moving Parties assert a new argument on reply concerning duty and breach of duty. As it is not in response to any argument Plaintiff raised in opposition, the court disregards it. (See In re Marriage of Ackerman (2006) 146 Cal.App.4th 191, 214 [“we need not consider new issues raised for the first time in a reply brief in the absence of good cause . . . .”])