Judge: Virginia Keeny, Case: 22VECV00818, Date: 2022-09-26 Tentative Ruling
Case Number: 22VECV00818 Hearing Date: September 26, 2022 Dept: W
DAROLD M. SHIRWO v. CAPITAL
ONE, INC., ET AL.
DEMURRER TO PLAINTIFF’S COMPLAINT
Date of Hearing: September 26, 2022 Trial Date: None
set.
Department: W Case
No.: 22VECV00818
Moving Party: Defendant
Capital One Bank (USA), N.A.
Responding Party: Plaintiff Darold M. Shirwo
Meet and Confer: 7-25-22
Decl., 8-24-22 Decl.
BACKGROUND
Plaintiff claims Defendant
canceled his credit card without notice and opportunity to be heard and did so
to deprive Plaintiff of credit/business usage and incur unnecessary charges.
(Compl. p. 1-4)
On June 16, 2022, Plaintiff filed
a complaint, naming Capital One, Inc. (erroneously named, with the correct name
being Capital One Bank (USA), N.A.) and unnamed defendants, Does 1-20 as
defendants. (Compl., 7-25-22 Decl.)
On July 18, 2022, Defendant’s
counsel attempted to contact Plaintiff prior to filing a demurrer as required
by California Code of Civil Procedure[1]
section 430.41, also known as the “meet and confer” requirement. (7-25-22
Decl.)
On August 24, 2022, Defendant filed
this instant demurrer on the grounds that Plaintiff fails to state facts
sufficient to constitute a cause of action for the first (breach of contract),
second (interference with business opportunities), and third (fraud) causes of
action. On the same day, Defendant requested judicial notice of Plaintiff’s
prior filed complaints against American Express Company, JPMorgan Chase Bank,
Charter Communications Inc., and Capital One, Inc. under California Evidence
Code section 452(d). (Exhibs. A-D.)
On September 13, 2022, Plaintiff
filed an Opposition to Defendant’s demurrer. On the same day, Plaintiff objected
to Defendant’s request for Judicial Notice on the grounds that the complaints
from other actions were irrelevant and immaterial to the instant demurrer.
On September 16, 2022, Defendant
replied to Plaintiff’s Opposition.
No Reply Papers available as of
September 19, 2022, 3:36 pm.
[Tentative] Ruling
1.
Defendant’s Demurrer to Plaintiff’s First Cause
of Action (Breach of Contract) is SUSTAINED with LEAVE TO AMEND.
2.
Defendant’s Demurrer to Plaintiff’s Second Cause
of Action (Interference With Business Opportunity) is SUSTAINED with LEAVE TO
AMEND.
3.
Defendant’s Demurrer to Plaintiff’s Third Cause
of Action (Fraud) is SUSTAINED with LEAVE TO AMEND.
ANALYSIS
Request for Judicial
Notice
Defendant
requests the Court take judicial notice of Exhibits A through D, which seek
notice of prior complaints filed by Plaintiff with this court. (Req. Judic.
Notic.) Plaintiff argues taking judicial notice of Plaintiff’s prior filed complaints
are irrelevant and immaterial to the instant Demurrer. (Oppo. Judic. Notic.)
Here,
Plaintiff’s prior filed complaints are irrelevant and immaterial to the instant
Demurrer because they do not provide support for Defendants’ demurrer that
Plaintiff fails to state a cause of action. Thus, Defendants’ Request for
Judicial Notice is GRANTED pursuant to Evid. Code §452(d).
Meet and Confer
Prior
to filing a demurrer, the demurring party is required to satisfy their “meet
and confer” obligations pursuant to CCP, section 430.41, and demonstrate that
they so satisfied their meet and confer obligation by submitting a declaration
pursuant to CCP, section 430.41, subdivisions (a)(2) and (a)(3).
Here,
the Court finds that Defendant has submitted a declaration in substantial
compliance of CCP, section 430.41, such that the moving party satisfied its
meet and confer obligations.
First Cause of Action
(Breach of Contract)
“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.)
(1) Existence
of the Contract
“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 …. In order 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, citations
omitted.) “An oral contract may
be pleaded generally as to its effect, because it is rarely possible to allege
the exact words ….” (Khoury v. Maly's of California, Inc., (1993) 14 Cal. App. 4th
612, 616, citations omitted)
Here, Plaintiff
fails to satisfy the requirement for existence of a written contract because he
does not set out the terms of the contract verbatim or attach a copy of the
contract. (Compl. ¶ 14-20.) As Defendant points out, plaintiff “does not
identify any contract, much less a contractual provision – at all.” (Demur. p.
5-6.) Plaintiff may satisfy the requirement for an oral contract because he
claims he had an “honest and valid banking relationship and that [Defendant]
would not intentionally, or otherwise, interfere with the usage of his cards,” which
can be sufficient since oral contracts may be pleaded generally and this shows
Defendant’s representations to Plaintiff. (Compl. ¶ 15.) However, Plaintiff’s
failure to specify what kind of contract he and Defendant entered into is cause
for finding this element not met.
(2) Plaintiff’s
Performance or Excuse for Nonperformance
Here,
Plaintiff seems to satisfy the performance element because he claims he was
current on his payments and that he “performed all obligations he has agreed to
with [Defendant] except those obligations he was prevented, or excused, from
performing of which he has no knowledge of control,” which would be sufficient
to show that he kept his end of the “bargain.” (Compl. ¶¶ 10, 19.) However, Plaintiff’s
failure to identify a contract with Defendant is still a problem and Plaintiff cannot
to point to the terms with which he complied. Thus, Plaintiff fails to satisfy
the requirement for performance or excuse for nonperformance.
(3) Defendant’s
Breach
Plaintiff has
adequately alleged breach since he claims that Defendant did not fulfill “their
implied and express obligations to provide appropriate credit card usage,
banking and service to Plaintiff” (Compl. ¶ 4.), Defendant canceled Plaintiff’s
credit card “intentionally, arbitrarily, capriciously and maliciously, and
without notice” (Compl. ¶ 8.), Defendant “failed and refused to process”
Plaintiff’s timely credit card payment and charged him interest and service
fees (Compl. ¶ 10.), and Defendant tried to make an unauthorized withdrawal
from Plaintiff’s savings account which resulted in fees. (Compl. ¶ 11.) However,
since Plaintiff fails to identify a contract and Defendant’s obligations, these
allegations of breach do not remedy the other problems with the complaint.
(4) Resulting
Damages
Here, Plaintiff
satisfies the resulting damages element since he claims he “relies on his
credit line, banking functions and access to payment for services on his
business and personal accounts and other benefits from the usage of the said
credit card” and that Defendant’s actions would have “a detrimental and
longlasting negative effective on his business and personal affairs.” (Compl. ¶
13.) Such allegations are sufficient provided he can amend to cure the other
deficiencies.
Accordingly, the Demurrer is SUSTAINED
with LEAVE TO AMEND.
Second Cause of Action
(Interference with Business Opportunities)
As Defendant points out in its demurrer, California does not recognize
a cause of action for interference with business opportunities, so the Court
will analyze Plaintiff’s second cause of action under the claim of interference
with prospective economic advantage. (Demur. pp. 6-7.)
“The elements of a claim of interference with economic
advantage and prospective economic advantage are: (1) an economic relationship
between the plaintiff and some third party, with the probability of future
economic benefit to the plaintiff; (2) the defendant’s knowledge of the
relationship; (3) intentional [or negligent] acts on the part of the defendant
designed to disrupt the relationship (4) actual disruption of the relationship;
and (5) economic harm to the plaintiff proximately caused by the acts of the
defendant ….” (Crown Imports, LLC v. Superior Court (2014) 223
Cal.App.4th 1395, 1404, citations omitted.)
(1) Economic Relationship
In Westside Ctr. Assocs. v. Safeway Stores 23, Inc.,
the court held that the plaintiff failed to satisfy the economic relationship
element in a claim of interference with economic advantage by failing to
properly identify a third-party relationship. ((1996) 42 Cal.App.4th 507.)
There, the plaintiff tried to claim that the defendant interfered with “the
class of all potential buyers for its property and thereby reduced the
property’s market value.” (Id. at 523.) The court reasoned that the
plaintiff’s “interference with the market” theory “fail[ed] to provide any
factual basis upon which to determine whether the plaintiff was likely to have
actually received the expected benefit,” and that the plaintiff’s “expectation
of a future sale was ‘at most a hope for an economic relationship and a desire
for future benefit.’ [citation.]” (Id. at 527.)
Here, Plaintiff fails to satisfy the economic relationship
element because he fails to identify the existence of a third-party
relationship, and only references “an honest banking relationship” with
Defendant. (Compl. ¶ 22.) However, even if Plaintiff intended to claim a
relationship with his potential customers, that would fail under Safeway
Stores 23, where such relationships were deemed insufficient in a claim for
interference with economic advantage. (Westside Ctr. Assocs. v. Safeway
Stores 23, Inc., supsra, 42 Cal.App.4th at 527.)
(2) Defendant’s Knowledge of Relationship
Here, Plaintiff cannot satisfy Defendant’s knowledge of the
relationship requirement since Plaintiff’s relationship with Defendant cannot
constitute an economic relationship between Plaintiff and a third-party.
Additionally, even if Plaintiff were to claim a relationship with potential
customers, this would not satisfy this element since Plaintiff did not claim
Defendant knew of such a relationship. Thus, Plaintiff fails to satisfy
Defendant’s knowledge of relationship requirement.
(3) Intentional or Negligent Acts of Defendant
“[T]he alleged interference must have been wrong by some
measure beyond the fact of the interference itself …. For an act to be independently
wrongful, it must be ‘unlawful, that is, …it is proscribed by some
constitutional, statutory, regulatory, common law, or other determinable legal
standard.’ …. The independently wrongful act must be the act of interference
itself, but such act must itself be independently wrongful. That is,
‘[a] plaintiff need not allege the interference and a second act independent of
the interference. Instead, the plaintiff must plead and prove that the conduct
alleged to constitute interference was independently wrongful, i.e., unlawful
for reasons other than that it interfered with a prospective economic
advantage.’ …” (Crown Imports, LLC v. Superior Court, supra, 223
Cal.App.4th at 1404, citations omitted.)
Plaintiff has not alleged a separately cognizable wrongful
act to support his claim for intentional interference.
(4) Actual Disruption of Relationship
Here, Plaintiff does not satisfy the actual disruption of
relationship requirement because he states, “as a result of [Defendant’s]
misconduct Plaintiff will be damaged in his ability to maintain a reasonable
business operation and personal uses.” This is insufficient to show actual
disruption of a relationship since it is referring to an event to occur in the
future. Thus, Plaintiff fails to show actual disruption of a relationship with
the third party.
(5) Economic Harm
Here, Plaintiff also does not satisfy the economic harm
requirement because he only vaguely asserts that he “has, and will, incur
related interruptions and expenses in an amount to be determined at the time of
trial.” (Compl. ¶ 25.) This is insufficient to show economic harm at the
demurrer stage.
Accordingly,
the Demurrer is SUSTAINED with LEAVE TO AMEND.
Third Cause of Action
(Fraud)
“The¿elements¿of¿fraud¿are
(1) misrepresentation, (2) knowledge of falsity, (3) intent to induce reliance
on the misrepresentation, (4) justifiable reliance on the misrepresentation,
and (5) resulting damages. [Citation.]” (Cansino v. Bank of America (2014)
224 Cal.App.4th 1462, 1469.) “Fraud allegations must be pled with more
detail than other causes of action. The facts constituting the fraud, including
every element of the cause of action, must be alleged ‘factually and
specifically.’” (Apollo Cap. Fund, LLC v. Roth Cap. Partners, LLC,
(2007) 158 Cal.App.4th 226, 240.)
(1) Misrepresentation
“The
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.)
Here,
Plaintiff’s claim for fraud against Defendant is an action against a
corporation since Defendant is a corporation, duly licensed to operate under
the laws of the State of California and in the County of Los Angeles. (Compl. ¶
2.) Therefore, Plaintiff is required to specifically plead Defendant’s
fraudulent misrepresentations by identifying the persons’ names, their
authority to speak, and what they said, but he fails to do so. He claims that
Defendant “would not intentionally, or otherwise, interfere with the usage of
the cards, the alternative credit implication thereto and an honest banking
relationship and that he would be provided adequate, reasonable and fair credit
card and banking usage, service and access to his account(s) without any
unreasonable interference,” but this is insufficient to satisfy the specificity
requirement. (Compl. ¶ 15.) Thus, Plaintiff fails to satisfy the
misrepresentation element in his claim for fraud against Defendant.
(2) Knowledge
of Falsity, Intent to Induce Reliance
Here,
Plaintiff satisfies the knowledge of falsity and intent to induce reliance requirements
because he alleges that he is “informed and believes that this conduct by [Defendant]
is a pattern of illegal and improper business conduct meant to unfairly and
unreasonable [sic] deny Plaintiff of services and benefits and is an ongoing
pattern of misconduct by [Defendant],” and this is sufficient to infer that
Defendant knew their representations were false and intended that Plaintiff
rely on them. (Compl. ¶ 18.)
(3) Justifiable
Reliance
Here,
Plaintiff satisfies the justifiable reliance element because he alleges that he
“relies/relied on usage of his valid Cap card(s)” and had an “honest and valid
banking relationship” with Defendant who represented it “would not
intentionally, or otherwise, interfere with the usage of the cards, the
alternative credit implication thereto and an honest banking relationship and
that he would be provided adequate, reasonable and fair credit card and banking
usage, service and access to his account(s) without any unreasonable
interference.” (Compl. ¶ 15.) These allegations plead adequate facts to satisfy
the element of reasonable reliance.
(4) Resulting
Damages
Here, Plaintiff
satisfies the resulting damages element because he states Defendant’s actions
“will have a detrimental and longlasting negative effect on his business and
personal affairs,” which is sufficient at the demurrer stage. (Compl. ¶ 13.)
Therefore,
Plaintiff fails to make a claim for fraud. Accordingly, the Demurrer is SUSTAINED with LEAVE TO AMEND.