Judge: Virginia Keeny, Case: 22VECV01536, Date: 2023-02-09 Tentative Ruling

Case Number: 22VECV01536    Hearing Date: February 9, 2023    Dept: W

ALEN COHEN, et al. v. MOSHE ZEMACH, et al.

DEMURRER

Date of Hearing:        February 9, 2023                   Trial Date:       None set.  

Department:              W                                            Case No.:        22VECV01536

Moving Party:            Defendants David Zemach, LivinitUp, LLC, IO Lifetime Builders, Inc., and Chai Group, LLC

Responding Party:     Plaintiffs Alen Cohen and Nastran Cohen

Meet and Confer:      Yes. (Hanigan Decl. ¶3.)

BACKGROUND

On October 11, 2022, Plaintiffs Alen Cohen and Nastran Cohen filed a complaint against Defendants Moshe Zemach, David Zemach, Maya Librush, Oded Zemach, Livinit Up, LLC, UrbinoConstruction Services LLC, IO Lifetime Builders, Inc., Chai Group, LLC, Serrano Demolition, Inc., Expert Decking and Waterproofing, Inc., and The Ohio Casualty Insurance Company asserting causes of action for (1) Breach of Contract; (2) Breach of Contract; (3) Negligence; (4) Negligence; (5) Negligence; (6) Breach of Express Warranty; (7) Breach of Implied Warranty; (8) Violations of Civil Code Sections 895, et seq.; (9) Intentional Misrepresentation; (10) Negligent Misrepresentation; (11) Promissory Fraud; (12) Breach of Contract – Third Party Beneficiary; (13) Breach of Contract – Third Party Beneficiary; (14) Recovery on Contractor’s Bond; (15) Declaratory Relief; and (16) Rescission.

Plaintiffs allege Defendants LivinIt Up, LLC, Moshe Zemach, David Zemach, Maya Librush, Oded Zemach, UrbinoConstruction Services, LLC, IO Lifetime Builders, Inc., and Chai Group, LLC (“Zemach Defendants”) misrepresented the condition of certain real property sold to Plaintiff. The Zemach Defendants purchased the real property in 2015 and had substantially remodeled the property. Plaintiffs further allege Serrano Demolition was not a licensed contractor nor otherwise qualified to perform the required work and caused damaged to the property. Plaintiffs further allege Defendant Expert Decking and Waterproofing not only delayed substantial completion of its scope of work, Defendant Expert Decking also defectively and negligently performed its work causing Plaintiffs to sustain even further damages.

On January 3, 2023, Expert Decking and Watering Proofing, Inc. filed a cross-complaint against Roes 1 -100 for (1) equitable indemnity; (2) contribution; (3) comparative fault; and (4) declaratory relief.

[Tentative] Ruling

Defendants David Zemach, LivinitUp, LLC, IO Lifetime Builders, Inc., and Chai Group, LLC’s Demurrer is SUSTAINED WITH LEAVE TO AMEND.

ANALYSIS

Defendants David Zemach, LivinitUp, LLC, IO Lifetime Builders, Inc., and Chai Group, LLC demur to the complaint on the grounds that it is fatally uncertain. Defendants argue the ninth, tenth, and eleventh causes of action fails to meet the strict pleading requirements associated with fraud claims.

Claims for fraud must be plead with specificity. (Charnay v. Cobert¿(2006) 145 Cal.App.4th 170, 185, fn. 14.) “[T]hat is, a plaintiff must plead facts that show with particularity the elements of the cause of action.” (Glaski v. Bank of Am., Nat'l Ass’n (2013) 218 Cal. App. 4th 1079, 1090.) In other words, a plaintiff must plead “facts which show how, when, where, to whom, and by what means the representations were tendered.” (Lazar v. Super. Ct. (1996) 12 Cal.4th 631, 645 [emphasis in original].) “Less specificity is required when ‘it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy....’ ” (Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216; see¿Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 47 [the pleading rule for fraud “is relaxed when it is apparent from the allegations that the defendant necessarily possesses knowledge of the facts”].) Similarly, less specificity is required for fraud claims based on omission or concealment. (Alfaro v. Community Housing Imp. System & Planning Ass’n, Inc.¿(2009) 171 Cal.App.4th 1356, 1384) [“This statement of the rule [of specificity] reveals that it is intended to apply to affirmative misrepresentations . . . it is harder to apply this rule to a case of simple nondisclosure. How does one show ‘how’ and ‘by what¿means’ something didn’t happen, or ‘when’ it never happened, or ‘where’ it never happened?”].)  

Defendants argue the complaint identifies eight separate defendants as the “Zemach Defendants” in paragraph 15. However, in the ninth and tenth causes of action, the complaint then alleges that the “Zemach Defendants” made several misrepresentations, without breaking down who said what to whom, when it was said, how it was said, etc. Similarly, the Complaint alleges that the “Zemach Defendants” made certain promises, without breaking down who said what to whom, etc.

In opposition, Plaintiffs argue the fraud claims are alleged with the requisite specificity. Plaintiffs recite their allegations in an attempt to show the fraudulent representations and promises are pled in detail. However, the court finds Plaintiffs allegations do not meet the heightened pleading standard for fraud.

Although there are exceptions to the particularity rule, alter ego allegations do not lower the pleading standard for fraud claims. As noted by Defendants, if Plaintiffs do not allege with specificity what Defendants made what misrepresentations, then Defendants do not know if the claims against them are limited solely to alter ego liability or not. As a result, Plaintiffs eleventh cause of action must allege which Defendant promised they would fix the defects. Was it all eight “Zemach Defendants” who made the promise? When did they make the promise and how? Similarly, Plaintiffs ninth and tenth causes of action must allege who made the misrepresentations.

As for Plaintiffs contention that Defendants possess all of the information concerning the facts of the fraud claims, this argument fails as well. “’Less specificity is required when “it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy.”’ ” (Citizens of Humanity, LLC v. Costco Wholesale Corp. (2009) 171 Cal.App.4th 1, 20.) However, that is not the case here as Plaintiffs’ allegations are based on affirmative misrepresentations and fraudulent promises. (See Alfaro v. Community Housing Imp. System & Planning Ass’n, Inc.¿(2009) 171 Cal.App.4th 1356, 1384) [“This statement of the rule [of specificity] reveals that it is intended to apply to affirmative misrepresentations . . . it is harder to apply this rule to a case of simple nondisclosure. How does one show ‘how’ and ‘by what¿means’ something didn’t happen, or ‘when’ it never happened, or ‘where’ it never happened?”].)

Accordingly, Defendants’ demurrer to the ninth, tenth, and eleventh causes of action are SUSTAINED WITH LEAVE TO AMEND.