Judge Upinder S. Kalra, Case Number: 24STCV26604, Date: 2025-06-10 Tentative Ruling

1. Demurrer to the Second, Third, Fourth, and Fifth Causes of Action for failing to state sufficient facts to constitute a cause of action and for uncertainty;

2. Motion to Strike various portions of the Complaint pertaining to punitive damages, attorneys’ fees, restitution, prejudgment interest, and injunctive relief.

2. Demurrer to the Third, Fourth, and Fifth Causes of Action is SUSTAINED with leave to amend;

4. Plaintiffs to file their amended pleading within 21 days’ notice of this ruling.

On October 11, 2024, Plaintiffs Jack Eskenazi and Gail Eskenazi (Plaintiffs) filed a Complaint against Defendant ACS Security Inc (Defendant) with causes of action for: (1) Negligence; (2) Breach of Fiduciary Duty; (3) Unfair Business Practices and False Advertising; (4) Breach of Contract; and (5) Breach of the Implied Covenant of Good Faith and Fair Dealing.

According to the Complaint, Plaintiffs have used Defendant’s alarm monitoring and patrol services for their home for over nine years. Plaintiffs claim that several individuals burgled their home on August 16, 2024 and that Defendant failed to timely dispatch an armed or respond at all to the in progress burglary.

On February 10, 2025, Defendant filed the instant demurrer with motion to strike. On May 7, 2025, Plaintiffs filed oppositions. On May 19, 2025, the parties stipulated to continue the hearing date on the demurrer and motion to strike to allow Defendant time to prepare a reply. On June 3, 2025, Defendant filed replies.

CCP § 430.41(a) requires that the demurring party meet and confer with the party who filed the pleading that is subject to the demurrer at least 5 days before the date the responsive pleading is due, by telephone or in person, for the purpose of determining if the parties can resolve the objections to be raised in the demurrer. (Code Civ. Proc., § 430.41.) The demurring party must file and serve a declaration detailing their meet and confer efforts. Failure to meet and confer is not grounds to overrule or sustain a demurrer, or grant or deny a motion to strike. (Code Civ. Proc., §§ 430.41, subd. (a)(4); 435.5 subd. (a)(4).)

Here, the parties met and conferred via correspondence and telephonically. (Patterson Decl. ¶ 3.)

The grounds for a demurrer must appear on the face of the pleading or from judicially noticeable matters.¿ (Code Civ. Proc. § 430.30(a); Blank v. Kirwan(1985) 39 Cal. 3d 311, 318.) A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) The only issue involved in a demurrer hearing is whether the complaint states a cause of action. (Ibid.)

A demurrer assumes the truth of all factual, material allegations properly pled in the challenged pleading. (Blank v. Kirwan, supra, 39 Cal. 3d at p. 318.) No matter how unlikely or improbable, the plaintiff’s allegations must be accepted as true for the purpose of ruling on the demurrer. (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.¿ App. 3d 593, 604.) But this does not include contentions; deductions; conclusions of fact or law alleged in the complaint; facts impossible in law; or allegations contrary to facts of which a court may take judicial notice.¿ (Blank, supra, 39 Cal. 3d at p. 318.)

Pursuant to Code Civ. Proc. §§ 430.10(e), the party against whom a complaint has been filed may demur to the pleading on the grounds that the pleading does not state facts sufficient to constitute a cause of action. It is an abuse of discretion to sustain a demurrer if there is a reasonable probability that the defect can be cured by amendment. (Hahn v. Mirda, supra, 31 Cal. 4th at p. 745.)

The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (Code Civ. Proc., § 436(a).) The court may also strike all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Id., § 436(b).) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Id.¿§¿437.)¿“When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend.” (Vaccaro v. Kaiman¿(1998) 63 Cal.App.4th 761, 768.)¿

Defendant contends that this claim fails because Plaintiffs insufficiently alleged that there is a fiduciary duty between a home security company and its customer. Defendant further contends that this issue is a matter of law appropriately decided by demurrer. Plaintiffs argue they sufficiently alleged a fiduciary duty exists based on their reliance on Defendant to protect their safety and property over ten years. Alternatively, Plaintiffs argue they sufficiently alleged this claim to survive a demurrer and Defendant improperly seeks to resolve factual disputes. Defendant replies that Plaintiffs provided to show authority that a security services provider is a fiduciary.

The elements of a claim for breach of fiduciary duty are (1) the existence of a fiduciary relationship, (2) its breach, and (3) damage proximately caused by that breach.” (O'Neal v. Stanislaus County Employees' Retirement Assn. (2017) 8 Cal.App.5th 1184, 1215.) The Court of Appeals has defined a fiduciary relationship as:¿

“any relation existing between parties to a transaction wherein one of the parties is in duty bound to act with the utmost good faith for the benefit of the other party. Such a relation ordinarily arises where a confidence is reposed by one person in the integrity of another, and in such a relation the party in whom the confidence is reposed, if he voluntarily accepts or assumes to accept the confidence, can take no advantage from his acts relating to the interest of the other party without the latter's knowledge or consent....”

Here, Plaintiffs insufficiently stated a claim for breach of fiduciary duty. First, the Complaint fails to establish how the parties were in a fiduciary relationship, and only states conclusory allegations of a fiduciary relationship.[1] (Compl. ¶¶ 36, 37, 39, 40.) Second, this type of relationship, essentially where Plaintiffs place their “trust and confidence” in Defendant to perform under their contract, has already been found insufficient to establish a fiduciary relationship. (Wolf, supra, 107 Cal.App.4th at p. 31.) Finally, Plaintiffs’ own position is “that ACS assumed a quasi-fiduciary role” which belies existence of a fiduciary relationship. (Opp. 6:9.)

Accordingly, the court SUSTAINS Defendant’s demurrer to the First Cause of Action.

Defendant contends that this claim fails because the Alarm Company Act, on which Plaintiffs base their UCL claim, does not provide for a private right of action and improperly seeks damages that the UCL does not provide. Plaintiffs argue that they alleged actionable misrepresentations and omissions, alleged reliance on those misrepresentations, and alleged economic injury. Defendant replies that Plaintiffs have not alleged they lost money or property due to false advertising – instead, they allege they lost money and property due to their home being burgled. Defendant replies further that Plaintiffs did not allege a willful violation of section 7599.58 and the Alarm Company Act still does not provide a private right of action.

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.) A business practice is unfair when it offends an established public policy or when the practice is immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers." (Community Assisting Recovery, Inc. v. Aegis Security Ins. Co. (2001) 92 Cal.App.4th 886, 894.) A business practice is unlawful if it violates another law. (Berryman v. Merit Property Management, Inc. (2007) 152 Cal.App.4th 1544, 1554.) A business practice is fraudulent if “members of the public are likely to be deceived." (See Wang v. Massey Chevrolet (2002) 97 Cal. App. 4th 856, 871.) “A plaintiff alleging unfair business practices . . . 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.)

Bus. & Prof. Code section 7590, et seq., the Alarm Company Act, prohibits the following conduct by an alarm company from: “willfully fail[ing] to provide any service described in the agreement pursuant to Section 75599.54.[2]” (Bus. & Prof. Code § 7599.58(d).) Additionally, a licensee “shall not make any untrue or misleading statements in connection with the business of the licensee.” (Bus. & Prof. Code § 7599.55.) Those are defined as stating that: “[a]n alarm system is ‘Underwriters Laboratory approved or listed’ . . . unless the entire system . . . is in fact, UL approved or listed” or that “[a]n alarm system is insurance approved, police approved, or approved by the Department of Defense, unless in fact the approval has been obtained in writing.” (Ibid.)

Here, Plaintiffs insufficiently stated a claim for Unlawful Business Practices. As a threshold matter, Bus. & Prof. Code § 7599.55 does not apply to Plaintiffs’ claims because Plaintiffs do not claim untrue or misleading statements as defined by this statute. What remains is violation of Bus. & Prof. Code § 7599.58(d) – Defendant’s alleged willful failure to provide services in the agreement. (Compl. ¶¶ 14, 21, 23, 24, 25.) The Complaint generally alleges that Plaintiffs and Defendant’s predecessor entered a written contract for services and that Plaintiffs paid for security services. (Compl. ¶¶ 48.) They fail to specify the terms of the alleged agreement, what Defendant’s performance entailed, and what Plaintiffs performance entailed.

Accordingly, the court SUSTAINS Defendant’s demurrer to the Third Cause of Action.

Defendant contends that this claim fails because Plaintiffs did not set forth, verbatim, the terms of the written contract or attach it to the Complaint. Plaintiff argue they sufficiently plead this claim by alleging the material terms of the written contract. Defendant replies that Plaintiffs did not allege the legal effect of the contract either.

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.”¿ (Maxwell v. Dolezal (2014) 231 Cal.App.4th 93, 97-98 [internal citation omitted].) For a written contract, the plaintiff may “plead the legal effect of the contract rather than the price language.” (Ibid.) To “plead a contract by its legal effect, plaintiff must ‘allege the substance of its relevant terms. This is more difficult, for it requires a careful analysis of the instrument, comprehensiveness in statement, and avoidance of legal conclusions.’ ” (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489.)¿¿

For similar reasons articulated above, Plaintiffs failed to sufficiently allege breach of contract. As above, Plaintiffs failed to plead their written contract by its legal effect.[3] (Compl. ¶ 48.)

Accordingly, the court SUSTAINS Defendant’s demurrer to the Fourth Cause of Action.

Fifth Cause of Action – Breach of the Implied Covenant of Good Faith and Fair Dealing

Defendant contends that this claim fails because the underlying breach of contract claim was insufficiently plead. Plaintiff argues they did allege an underlying contract and, moreover, alleged Defendant withheld promised services and made representations about patrol availability and response knowing Plaintiffs relied on them, systemic understaffing, ignoring prior service complaints, and continuing to charge for services they did not provide. Defendant replies that Plaintiffs opposed arguments that did not exist and stands by their original argument that the underlying contract to support this claim is insufficiently plead. Defendant relies further that this claim is redundant of the breach of contract claim.[4]

Because the underlying contract claim fails, the court SUSTAINS Defendant’s demurrer to the Fifth Cause of Action.

1. “ACS breached its fiduciary duties to Plaintiffs with malice, oppression, fraud, and/or reckless disregard for Plaintiffs’ rights and safety. Accordingly, Plaintiffs are entitled to an award of punitive damages in an amount to be proven at trial.” Complaint, p. 8, ¶ 42.

3. “For attorney’s fees as provided by contract and as provided by statute.” Complaint, p. 9, ¶ 52.

4. The portion of the Prayer of the Complaint, p. 10, ¶ 3, stating: “For attorney’s fees (as provided by contract and as provided by statute).”

5. The portion of the Prayer of the Complaint, p. 10, ¶ 4, stating: “For prejudgment…interest.”

6. The portion of the Prayer of the Complaint, p. 10, ¶ 5, stating: “For punitive and exemplary damages in an amount to be ascertained at trial.”

7. The portion of the Prayer of the Complaint, p. 10, ¶ 6, stating: “For restitution of all monies paid by Plaintiffs to Defendants.

8. The portion of the Prayer of the Complaint, p. 10, ¶ 7, stating: “For injunctive relief prohibiting future false advertising, unfair business practices, and fraudulent and deceitful conduct by Defendants.”

Defendant contends that Plaintiffs are not entitled to punitive damages because they are tied to their failed breach of fiduciary duty claim, that Plaintiffs have not otherwise alleged facts of oppression, fraud, or malice, and that Plaintiffs’ failed to allege corporate ratification of employee action. Plaintiffs argue that Defendant improperly challenges factual sufficiency at this stage. Plaintiffs additionally argue they did sufficiently allege facts of malice and oppression (referring to Compl. ¶¶ 10-25, 19-23, 42) and do not need to name individual officers of proof of corporate ratification at this stage. Defendant replies that Plaintiffs cannot seek punitive damages for, what is essentially, their breach of contract case or for otherwise negligent conduct.[5]

Defendant contends that Plaintiffs are not entitled to attorneys’ fees because they failed to identify whether they are from contract or statute. Plaintiff argues that they sufficiently alleged the contract by its legal effect and that there is a potential statutory basis for attorneys’ fees via the UCL claim. Defendant replies that Plaintiffs did not allege the legal effect of the contract, there is no way to tell if the purported contract has an attorneys’ fees clause, and Plaintiffs do not satisfy CCP § 1021.5 provision for attorneys’ fees since they are suing to benefit themselves and not to confer a benefit on the public.

Defendant contends that Plaintiffs are not entitled to prejudgment interest because Plaintiffs’ damages are uncertain. Citing Cassinos v. Union Oil Co. (1993) 14 Cal.App.4th 1770, 1790, Plaintiffs argue that a portion of their damages are certain (the $100,000.00 in stolen personal property on August 16, 2024) so they can recover prejudgment interest on those. Defendant replies that Plaintiffs admit they only have an estimation of the value of the property stolen.

Defendant contends that Plaintiffs are not entitled to restitution because the underlying supporting claims for breach of fiduciary duty and UCL failed. Plaintiffs argue they seek to recover the amounts paid to Defendant for services that were not delivered which is classic restitutionary relief available under the UCL and for the breach of fiduciary duty claims. Defendant raises no new argument in reply.

Defendants contends that Plaintiffs are not entitled to injunctive relief because Plaintiffs’ underlying UCL claim supporting it failed. Alternatively, Defendant argues that Plaintiffs plead they are seeking damages which contradicts injunctive relief’s requirement for no adequate remedy at law and that Plaintiffs alleged past misconduct only. Plaintiffs argue this remedy is appropriate under their UCL claim and they alleged this conduct is likely to recur. Additionally, Plaintiffs argue they may plead alternative remedies since it is a future factual question whether they lack an adequate remedy at law. Defendant raises no new argument in reply.

In light of the ruling on the demurrer, the court DENIES Defendant’s motion to strike as moot.

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 burden is on Plaintiff to establish that the defect is reasonably capable of cure with leave to amend. (Hendy v. Losse (1991) 54 Cal.3d 723, 742.) Plaintiffs requested leave to amend. The court does not see how Plaintiffs can reasonably amend their breach of fiduciary duty claim. However, the remaining claims are reasonably capable of cure.

Accordingly, the court DENIES leave to amend as to the Second Cause of Action but GRANTS leave to amend as to the Third, Fourth, and Fifth Causes of Action.

2. Demurrer to the Third, Fourth, and Fifth Causes of Action is SUSTAINED with leave to amend;

4. Plaintiffs to file their amended pleading within 21 days’ notice of this ruling.

[1] Plaintiffs’ authorities do not help them as they concern different relationships than security services provider and customer. (Herbert v. Lankershim (1937) 9 Cal.2d 409 [debt]; Jones v. Grewe (1987) 189 Cal.App.3d 950 [liability insurance]; Barbara A. v. John G. (1983) 145 Cal.App.3d 369 [attorney-client]; Vai v. Bank of America (1961) 56 Cal.2d 329 [spouses].)

[2] The section concerns contents of the contract.

[3] As an aside, this contract must be in writing. (Bus. & Prof. Code § 7599.54(a).)

[4] The court disregards this argument because it appears newly asserted.

[5] The court disregards this argument, too, because it is not responding to arguments raised on opposition and was not raised in the motion to strike.