DemurrerCal. Super. - 6th Dist.July 9, 2020\OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O Electronically Filed §4HANSHAN ZOU, State Bar #263214 by Superior Court of CA, erca Law Group 456 Montgomery Street, Suite 1300 county 0f santa Clara: San Francisco, California 94104 0n 6/25/2021 10:38 AM Télephonei 415-677-4497 Reviewed By: L Del Munc Case #20CV3681 90 Attorney for Plaintiff _ 02 Valley Corporation EnveloPe' 6724011 SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF SANTA CLARA UNLIMITED JURISDICTION 02 VALLEY CORPORATION, Case N0. 20CV368190 NOTICE OF DEMURRER; DEMURRER TO FIRST THROUGH TENTH CAUSES OF ACTION IN THIRD AMENDED COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITY IN SUPPORT OF DEMURRER; PROOF OF SERVICE Datezmégm 10'7'21 Time: 9:00 am. Dept.:19 Judge: Hon. Peter H. Kirwan Plaintiff, vs. FRANK CHENG JR. aka FRANKIE CHENG, C&T SUNNYVALE, INC., and DOES 1 to 10, inclusive, Defendants. And Related Cross-Complaint. vvvvvvvvvvvvvvvvvv TO ALL PARTIES AND THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE that 0n JEflg-ZéfileQ-l, at 9:00 a.m. or as soon as thereafter as the matter may be heard in Department 19, before Honorable Peter H. Kirwan, at the Santa Clara Superior Court, 161 First Street, San Jose, CA 951 13, Plaintiff and Cross-Defendant 02 Valley Corporation and Cross-Defendants Mingyi Lai aka Jasmine Lai and Arthur Lu (collectively, “Cross-Defendants”) will and hereby move the Court for an order sustaining a Demurrer to the First through Tenth Causes 0f Action in Third Amended Cross-Complaint (“TACC”) filed by Defendant and Cross-Complainants FRANK CHENG JR. aka FRANKIE CHENG and C&T SUNNYVALE, INC. 0n following ground: 1 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT O \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O This Demurrer is brought per Code of Civil Procedure section 430.10 and is based 0n this Notice of Demurrer and Demurrer, the attached Memorandum of Points and Authorities, the pleadings and supporting Declaration of Shanshan Zou in Support of Demurrer filed in this action, and such other papers, pleadings, and arguments at this Court shall admit. The Cross-Defendants demurs First through Tenth Causes 0f Action 0f TACC 0n the following grounds: 1. The First Cause of Action of Breach of Contract fails to allege facts sufficient to constitute a cause of action and contains uncertainty and ambiguity. CCP §430.10(e), §430.10 (f) 2. The Second Cause 0f Action 0f Breach of Implied Covent fails t0 allege facts sufficient t0 constitute a cause 0f action and contains uncertainty and ambiguity. CCP §430.10(e), §430.10 (f) 3. The Third Cause of Action 0f Anticipatory fails t0 allege facts sufficient to constitute a cause 0f action and contains uncertainty and ambiguity. CCP §430.10(e), §430.10 (f) 4. The Fourth Cause of Action 0f Conversion fails t0 allege facts sufficient to constitute a cause of action and contains uncertainty and ambiguity. CCP §430.10(e), §430. 10 (f) 5. The Fifth Cause 0f Action if Unjust Enrichment fails to allege facts sufficient to constitute a cause of action and contains uncertainty and ambiguity. CCP §430.10(e), §430.10 (f) 6. The Sixth Cause of Action of Declaratory Relief fails t0 allege facts sufficient t0 constitute a cause 0f action and contains uncertainty and ambiguity. CCP §430.10(e), §430.10 (f) 7. The Seventh Cause 0f Action 0f Defamation Relationship fails t0 allege facts sufficient t0 constitute a cause 0f action and contains uncertainty and ambiguity. CCP §430.10(e) 2 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O 8. The Eighth Cause of Action 0f Concealment fails t0 allege facts sufficient to constitute a cause of action and contains uncertainty and ambiguity. CCP §430.10(e), §430.10 (f) 9. The Ninth Cause 0f Action 0f Common Count fails t0 allege facts sufficient t0 constitute a cause 0f action and contains uncertainty and ambiguity. CCP §430.10(e), §430.10 (f) 10. The Tenth Cause of Action of Violation 0f Business and Professional Code fails to allege facts sufficient to constitute a cause 0f action and contains uncertainty and ambiguity. CCP §430.10(e), §430.10 (f) Dated: June 23, 2021 Merca Law Group /S/Shanshan Zou Shanshan Zou Attorney for Plaintiff and Cross-Defendants 3 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O Table 0f Contents I. SUMMARY ...................................................................................................................................... 7 II. INTRODUCTION ............................................................................................................................ 8 III. STATEMENT OF FACTS ............................................................................................................... 8 Agreements Between Parties .................................................................................................................... 8 Early Termination by Cheng/C&T ........................................................................................................... 9 Cheng/C&T’s Continuous Promises ....................................................................................................... 11 Cheng/C&T Interference 0f02 Valley’s Online Orders ........................................................................ 12 Cheng’s Attack 0n 02 Valley after Taking Over.................................................................................... 12 IV. PROCEDURE HISTORY ............................................................................................................... 12 V. LEGAL ARGUMENT .................................................................................................................... 14 A. Legal Authorities for Demurrer ...................................................................................................... 14 B. The Demurrer against TACC’s Breach 0f Contract should be sustained. ...................................... 15 1. C&T claims n0 damage suffered from the alleged Breach of Contract ............................ 15 2. C&T failed t0 allege the contractual terms in support 0f its allegation 0f Breach 0f Contract. ..................................................................................................................................... 17 3. C&T cannot assert unascertained damages in Breach 0f Contract. .................................. 17 4. This Cause of Action was alleged between wrong parties and therefore n0 relief can be grant. .......................................................................................................................................... 1 8 5. The First Cause 0f Action shall be dismissed in its entirety. ............................................ 19 F. TACC failed to state a sufficient cause of action of Unjust Enrichment. ....................................... 24 G. TACC failed to state a sufficient cause of action of Declaratory Relief. ........................................ 25 H. TACC failed t0 state a sufficient cause 0f action of Defamation With certainty............................. 25 I. TACC failed t0 state a sufficient cause of action of Concealment. ................................................ 26 J. TACC failed t0 state a sufficient cause of action ofCommon Count. ............................................ 27 I. TACC failed to state a sufficient cause of action of Violation 0f California Business & Professional Code Section 17200. .......................................................................................................... 27 K. TACC prayer does not cure any deficiency of the above-mentioned causes of action. 28 VI. CONCLUSION ............................................................................................................................... 28 4 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O TABLE OF AUTHORITIES w Morton v. Loveman (1968) 267 Cal.App.2d 712, 717-719 12 Chavez v. TimeS-Mirror C0. (1921) 185 Cal. 20, 23 12 Colapinto v. County ofRiverside (1991) 230 Cal.App.3d 147 12 Doe v. City ofLos Angeles (2007) 42 Cal.4th 531, 550 12 Evans v. City ofBerkeley (2006) 38 Cal.4th 1, 6, 40 Cal.Rptr.3d 205, 129 P.3d 394 ------------------------ 12 Doe v. City ofLos Angeles 15 Windham at Carmel Mountain Ranch Assn. v. Superior Court 15 Blank v. Kirwan (1985) 39 Cal.3d 311, 318. 16 Ladas v. California State Automobile Assn. (1993) 19 Cal.App.4th 761, 770 16 Maxwell v. Dolezal (2014) 231 Ca1.App.4th 93, 98. 16 Faulkner v. California Toll Bridge Authority, 4O Cal. 2d 317, 329 [253 P.2d 659] 17 Fischer v. Machado (1996) 50 Ca1.App.4th 1069, 1072-1074 .................................................................. 18 Gruber v. Pacific States Sav. & Loan C0. (1939) 13 Ca1.2d 144, 148 ....................................................... 18 Freeman & Mills, Inc. v. Belcher Oil C0. (1995) 11 Cal.4th 85, 106, 44 Cal.Rptr.2d 420, 900 P.2d 669 18, 19 Fischer v. Machado (1996) 50 Ca1.App.4th 1069, 1072-1074 .................................................................. 18 Gruber v. Pacific States Sav. & Loan C0. (1939) 13 Cal.2d 144, 148 ....................................................................... 18 Id. .......................................................................................................................................................... 21, 22 Kaldenbach v. Mutual Omeaha Life Ins. C0. (2009) 178 Ca1.App.4th 830, 850 ..................................... 21 Maguire v. Hibernia S. & L. $00., 23 Cal. 2d 719, 728 .............................................................................. 20 Droz v. Pacific National Insurance C0. (1982) 138 Ca1.App.3d 181, 187 20 Shin v. Kong (2000) 80 Ca1.App.4th 498, 509 ............................................................................................ 23 Warner Construction Corp. v. City OfLos Angeles (1970) 2 Cal.3d 285, 294 ........................................... 23 Haigler v. Donnelly (1941) 18 Cal.2d 674, 681 23 Hodges v. Cly. ofPlacer (2019) 41 Ca1.App.5th 537, 55 1 23 5 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O McKell v. Washington Mutual, Inc. (2006) 142 Ca1.App.4th 1457, 1491 23 Kim v. Westmoore Partners, Inc. (201 1) 201 Ca1.App.4th 267, 284-85 Weiss v. Marcus (1975) 51 Ca1.App.3d 590, 599 23, 24 24 25Ajaxo Inc. v. E Trade, 187Cal.App.4th 1305 STATUTES CCP §430.10(e) 20 20CCP §430.10(t) Chavez v. Times-Mirror C0. (1921) 185 Cal. 20, 23 Civ. Code, §3300 16 18 18Civ.C0de, §3301 Code CiV. Proc. § 425.10(a) 15 Evid. Code, § 452; Code Civ.Proc., § 430.70 16 Other Authority Rest, Restitution, § 1 ...................................................................................................... 6 ............................ 20 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O MEMORANDUM OF POINTS AND AUTHORITIES Plaintiff and Cross-Defendant 02 Valley Corporation (“02 Valley”) and Cross- Defendants Mingyi Lai aka Jasmine Lai and Arthur Lu (collectively, “02 Valley Owners”) hereby submit this Demurrer against First through Tenth Causes 0f Action 0fTACC filed by Defendants and Cross-Complainants Frank Cheng Jr. aka Frankie Cheng (“Cheng”) and C&T Sunnyvale, Inc. (“C&T”). I. SUMMARY Since Cheng and C&T had n0 real claims against Plaintiffs 02 Valley and 02 Valley Owners, after several generously granted extensions and written meet and confer letters with all deficiencies spelled out by Plaintiffs counsel, after almost one year and four submissions 0f their cross claim pleadings, TACC continuously contains major defects and fails to state any sufficient and intelligent causes of actions against 02 Valley and 02 Valley Owners in its First through Tenth Causes of Action in TACC. T0 be more specific, these causes 0f action in length and redundant TACC can be group in the following categories: Group One: Causes 0f Action claim n0 damage. - First Cause of Action: Breach 0f Contract; - Second Cause 0f Action: Breach 0f Implied Covent 0f Good Faith and Fair Dealing; - Third Cause 0f Action: Anticipatory Breach; - Eighth Cause of Action: Concealment; Group Two: Causes of Action onlv claim $2,746.88 but has other defects. - Fourth Cause of Action: Conversion - Fifth Cause of Action: Unjust Enrichment - Ninth Cause of Action: Common Count Group Three: Causes 0f Action for Which n0 relief can be granted. - Sixth Cause 0f Action: Declaratory Relief - Seventh Cause 0f Action: Defamation 7 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O II. INTRODUCTION 02 Valley and 02 Valley Owners demur the First through Tenth Causes 0f Action in Third Amended Cross-Complaint (“TACC”) filed by Cheng and C&T on the basis that those Causes 0f Action contained in TACC failed t0 state a sufficient claim and are uncertain and ambiguous as following: - TACC misuses terms “Cross-Complainants” and “Cross-Defendants” Which render all causes 0f action ambiguous and uncertain. - None of causes of action 0fTACC states the required elements t0 sufficiently state a claim. - TACC fails t0 state specific factual basis but only makes conclusive statements Which does not provide claim with particularity. - After four unsuccessful attempts made by Cheng and C&T, as the fourth version 0f cross-complaint, TACC’s defects are incurable and a Demurrer to TACC should be sustained With all First through Tenth Causes 0f action. III. STATEMENT OF FACTS Agreements Between Parties In the end of 2018, 02 Valley Owners, as new immigrants from Taiwan, were introduced t0 Cheng. Cheng has been restaurant business for a few years and operated two restaurants selling Taiwan style snacks, such as fried chicken, bento meals, and milk tea, at Milpitas and Sunnyvale. Cheng offered to help 02 Valley Owners to start restaurant business and insisted that 02 Valley should (1) use C&T’s brand Chick & Tea and G-Piel, (2) adopt C&T’s menu and recipe and (3) sublease C&T’s commercial rental premises at its Sunnyvale location. Since Cheng had not previously obtained his landlord’s permission for such sublease, Cheng tried t0 disguise 02 Valley operation as his own at the premises. Therefore, in May 2019, Cheng prepared the Sublease Agreement and an Addendum for the sublease terms dictated by Cheng and presented t0 02 Valley Owners. The Addendum was 1 Cheng previously registered G-Pie as a trademark but before C&T entered the sublease agreement with 02 Valley, Cheng had abandoned such trademark for over two years, therefore it is not a valid trademark anymore. 8 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O prepared by Cheng both in English and Chinese since 02 Valley Owners are lacking English reading skills. 02 Valley had paid the security deposit of $23,400.00 in May 2010 and started to operate at the Sunnyvale location in July 2019, Which has been noted on the Sublease Agreement in writing. The Sublease Agreement and Addendum provided a three-year fixed term, With early termination penalty and promise to refund the security deposit due t0 the aged condition of the premises and equipment. Early Termination by Cheng/C&T After running the business commencing July 2019, 02 Valley experienced difficulties in its first half year of operation due to the many preexisting issues such as aged conditions 0f equipment and premises. Cheng also made strictly requests t0 reduce 02 Valley’s food serving sizes so he could disguise 02 Valley as his own operation. Under the stress created by Cheng’s “micromanagement” and aged conditions 0f equipment and premises, 02 Valley Owners had a self-doubting moment and thought restaurant business may not be a good fit for them in the end of 20 1 9. Thereafter, O2 Valley Owners had an informal communication with Cheng and his Wife to discuss the possibility of having an early termination and offered t0 pay the early termination penalty under the Addendum. Cheng unequivocally refused such proposal and specifically requested 02 Valley to perform their agreed 3-year term in full. After Chang’s rej ection for early termination, O2 Valley Owners decided that they would continue the operation at the Sunnyvale and thereafter increased their investment in operation and branding for the business by engaging more intensive online marketing, purchased commercial photograph and brand design services from Taiwan advertising agents and authentic ingredients from Taiwan to improve the taste and quality of their food. 02 Valley Owners and their staff put in more hard work to boost the sales at the restaurant. With growing experience 0f the restaurant management, 02 Valley improved its standard 0f procedure in many aspects of its operation. As one of the key factors, 02 Valley contracted multiple online order portals for its takeout orders, such as Grubhub, UberEats and etc. When C&T under Cheng’s management, C&T only had a barely used DoorDash account. 9 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O But 02 Valley set up many online portals from scratch, including Grubhub, UberEats, Postmaster, and updated DoorDash account. 02 Valley entered contracts, rented the devices, setting up the payment processing features with 02 Valley’s business bank account. Those hard work and business investment turned out to be rewarding especially after the Pandemic started. Despite the Shelter-in-Place order, 02 Valley started see its business being profitable With its takeout orders and received a significant amount 0f positive customers’ feedbacks in the first quarter of 2020. Cheng had noticed the improvement 0f business made by 02 Valley. Without 02 Valley Owners’ permission, Cheng even secretly logged 0n O2 Valley’s account to check its revenue information Which 02 Valley Owners objected upon finding and warned him not t0 d0 it again. In early April 2020, Cheng claimed that for tax purpose 02 Valley should produce its revenue information for the last quarter 0f 2019 and first quarter of 2020. 02 Valley produced its financial records to Cheng Which showed the approximately over $100,000.00 increase in the revenue despite 0f the Shelter-in-Place order’s negative effects. Immediately after, 0n April 17, 2020, through his Wife Cheuh Ping Fan (“Fan”), with nick name Fanfan, in a four people group chatz designated t0 discuss the operation at the Sunnyvale location, Fan told 02 Valley Owners that Cheng and Fan had found a buyer for C&T’s business and therefore they wanted t0 early terminate the sublease and take back the premises. Fan also promised to pay for the early termination in writing. 02 Valley Owners were totally caught in surprise by this request and immediately informed Cheng and Fan that O2 Valley just recently ordered a container 0f ingredients and raw materials from Taiwan and they were expecting the container at the Sunnyvale location in July, otherwise they may have approximately $39,000.00 in loss related t0 the imports. However, 02 Valley’s request to operate until the end of July was rejected and Cheng only agreed 02 Valley t0 operate at the Sunnyvale Location through May 24, 2020. 2 The four people chat group contained Cheng, Fan, 02 Valley Owners, Jasmine Lai and Arthur Lu. Cheng later quit from the chat group but has produced many screenshots to show he was in the chat group. 1 0 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O When 02 Valley Owners requested the early termination penalty, Cheng and Fan advised them such payment would come out from the funds paid by C&T’s buyers. They also repeated promised in person that the early termination penalty would be paid, and the deposit would be refunded to 02 Valley upon their surrender of the premises. Relying on Cheng and Fan’s repeated promises and trying to prevent the loss cost by the forced relation, 02 Valley Owners started t0 look for a new business location in late April. In the end of April, Fan specifically asked on behalf 0fC&T and Cheng whether 02 Valley Owners would take their online order devices With them to the new location in the four people chat group. 02 Valley Owners unequivocally informed her that they for sure would bring those devices With them since 02 Valley rented those devices and the devices linked t0 02 Valley’s bank account. Thereafter, Cheng and Fan did not ask about the online order accounts or devices through May 25, 2020. Cheng/C&T’s Continuous Promises Thereafter, Cheng and Fan continuously communicated With 02 Valley Owners and repeatedly promised during the in-person meetings that the early termination penalty under the Addendum and the refund deposit would be paid by 02 Valley, totaling $46,800.00. Therefore, even though the early termination caused direct and significant damages for 02 Valley for its loss 0f revenue, increased import costs, relying on Cheng and Fan’s promises, 02 Valley Owners vacated the premises 0n May 25, 2020, as they agreed. On May 25, 2020, both parties scheduled to meet at the Sunnyvale location for the final walk through and the handover of the restaurant. During the walk through, Cheng and his wife had no complaint about the condition 0f the restaurant since it had been thoroughly cleaned but only pointed out they need t0 repaint some parts of the wall. Thereafter, 02 Valley Owners returned the restaurant keys to Cheng after Cheng conducted inspection of the premises and took over the restaurant Without raising any issue during the Whole process but only promised 02 Valley Owners that after the attorneys finalize the agreement and both sides’ execution, they would pay the early penalty and refund the deposit. 1 1 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O Cheng/C&T Interference 0f 02 Valley’s Online Orders Soon after 02 Valley Owners left 0n May 25, 2020, Cheng started t0 operate C&T and process orders at the restaurant he just took back. Instead, without informing 02 Valley or any kind of communication, or even having the proper devices to process orders, Cheng took orders Which submitted to 02 Valley’s online portals soon after 02 Valley Owners’ departure. In addition, Cheng contacted all the online order portals and tried t0 claim ownership of 02 Valley’s accounts and redirect sales proceeds therein to C&T’s account. Due t0 Cheng’s operation of the online order accounts, some 02 Valley’s sale proceed disbursement and sale information from DoorDash for May 22nd, 23rd, and 24th, prior t0 Cheng’s taking over the restaurant were disbursed t0 the account in Cheng’s account Without 02 Valley’s knowledge. When 02 Valley opened new accounts with these online order vendors for its new restaurant location, in middle 0f June 2020, 02 Valley discovered Cheng again made false ownership claims 0n O2 Valley new online order accounts Which has n0 relation With the C&T. In addition, Cheng had taken the products images and designs paid by 02 Valley Without consent 0r knowledge and used them for C&T’s website. Cheng also tried to take 02 Valley’s website. Cheng’s Attack 0n 02 Valley after Taking Over To avoid paying the early penalty and deposit and to further sabotage O2 Valley Which Cheng Viewed as a competitor, Cheng commenced months long attacks on 02 Valley and 02 Valley Owners 0n his social media with false statements. In responding t0 Chang’s false statements, 02 Valley and 02 Valley Owners had to respond online to protect their reputation and made formal cease and desist demand through their counsel. IV. PROCEDURE HISTORY The captioned lawsuit was filed by 02 Valley in July 2020 With 02 Valley’s claims based on the disputes caused by C&T’s failure t0 pay early termination penalty and deposit refund as required by the Sublease Agreement and Addendum, and Cheng’s intention t0 defraud 02 Valley and wrongful action to sabotage 02 Valley’s business after he caused the early termination of the Sublease Agreement and Addendum. 12 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O On September 3, 2020, Defendants Cheng and C&T, collectively referred as “Cross- Complainants”, filed a Cross-Complaint against 02 Valley and 02 Valley Owners With the following causes 0f action: (1) Breach of Contract, (2) Breach of the Implied Covent of Good Faith and Fair Dealing, (3) Anticipatory Breach, (4) Accounting (deleted in SACC and TACC), (5) Conversion, (6) Unjust Enrichment, (7) Declaratory Relief, (8) Defamation, (9) Concealment, (10) Common Count, (1 1) Violations 0f California Business & Professions Code Section 17200 Et Seq. The Cross-Complaint was very lengthy, unintelligent and completely failed to distinguish Who sues Whom sued for What, considering 0n one side there is Cheng and C&T, and 0n the other side, 02 Valley and 02 Valley Owners, totaling 3 individuals and 2 corporations. 02 Valley’s counsel sent multiple meet and confer letters pointing out the clear defects in those causes 0f actions and they were subjected t0 Demurrer and Motion to Strike. After over 5 months for two amendments, even with a Stipulation entered by parties t0 allow t0 further amend, Defendants filed their Second Amended Cross-Complaint (“SACC”) in this lawsuit. However, those claims made in such amendment. i.e., SACC were still not sufficient nor intelligent, as t0 who sued for what and 0n What legal basis despite its convoluted allegations Which fail t0 state any sufficient claim as discussed below. Therefore, 02 Valley and 02 Valley Owners filed their Demurrer against SACC with a hearing date scheduled for April 30, 2021. Cheng and C&T did not oppose 02 Valley and 02 Valley Owners’ Demurrer to SACC nor raised any obj ections to the defects raised in meet and confer. Instead, on April 29, 2021, Cheng and C&T’s counsels requested to further stipulate for a court’s order to allow them t0 file their Third Amended Cross-Complaint [TACC] taking advantage 0f 02 Valley encountered a filing issue of its Second Amended Complaint3. On May 10, 2021, this Court entered an Order based 0n both sides’ Stipulation under which, again, 02 Valley and 02 Valley Owners agreed t0 allow Cheng and C&T to file their 3 02 Valley’s original complaint was filed as a mistake since the clerk filed an unsigned and n0 exhibit version. 02 Valley’s First Amended Complaint was merely a same version With signature and exhibits. Cheng and C&T’s counsels were aware 0f those and agreed t0 stipulate for 02 Valley to file its Second Amended Complaint in return of all extensions and stipulations 02 Valley agreed. 1 3 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O Third Amended Cross Complaint [TACC] per their request. However, Cheng and C&T failed t0 make a timely filing pursuant to the Court’s Order. The Court’s clerk accepted the filing of TACC by mistake against the Court’s order on May 28, 2021. Due to the Court’s backlog, the Demurrer t0 SACC did not come in front 0f the Court for hearing until June 15, 2021. Even With the extended time to oppose, nothing was filed by Cheng and C&T even though 02 Valley’s counsel pointed out that their filing 0fTACC was not timely, and they have admitted so in front of the Court. On June 15, 2021, the Court held hearing and for the efficiency ofjudicial proceeding decided that the Demurrer to SACC was moot after TACC was filed and Demurrer and Motion to Strike may be filed against TACC. The Court requested Defendants’ counsel t0 prepare the proposed Order. But Defendants’ counsel altered the Court’s statements and ruling in their proposed Order. O2 Valley and 02 Valley Owners’ counsel had t0 submit the correct version proposed order to the Court With false and errors statements from Defendants’ counsel removed. Thereafter, on June 16, 2021, 02 Valley and O2 Valley Owners’ counsel sent the meet and confer letter t0 Cheng and C&T’s counsel t0 point out TACC’S defects one by one with analysis and legal authorities. 02 Valley and 02 Valley Owners’ meet and confer requested a written reply by 5 pm. June 18, 2021, or voluntary dismissal of those clearly defective causes of action. But n0 response was received. V. LEGAL ARGUMENT A. Legal Authorities for Demurrer Objection t0 a complaint Via demurrer is sustainable if “[t]he “A demurrer tests the legal sufficiency of factual allegations in a complaint.” (Windham at Carmel Mountain Ranch Assn. v. Superior Court (2003) 109 Cal.App.4th 1162, 1168.) “[A] complaint is sufficient if it contains ‘[a] statement 0f the facts constituting the cause of action, in ordinary and concise language.” (Doe v. City ofLos Angeles (2007) 42 Ca1.4th 531, 550, citing Code Civ. Proc. § 425.10(a).) At the pleading stage, the burden 0n the demurring party is Whether 0n the facts pleaded, Which are taken as true, the plaintiff fails t0 state facts sufficient t0 constitute a valid cause 0f action. (Blank v. Kirwan (1985) 39 Cal.3d 31 1, 318.) “While all properly pleaded facts are taken as 14 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O true, the same does not apply to logical inferences, contentions, or conclusions 0f fact 0r law.” (Winn v. Pioneer Med. Grp., Inc. (2016) 63 Ca1.4th 148, 152, citing Evans v. City ofBerkeley (2006) 38 Ca1.4th 1, 6, 40 Ca1.Rptr.3d 205, 129 P.3d 394.) A court may properly take judicial notice 0f a party’s earlier pleadings and positions from both the same case and other cases. (Evid. Code, § 452; Code Civ.Proc., § 430.70; Colapinto v. County ofRiverside (1991) 230 Cal.App.3d 147; Morton v. Loveman (1968) 267 Cal.App.2d 712, 717-719.) The complaint should be read as containing the judicially noticeable facts, “even when the pleading contains an express allegation to the contrary.” (Chavez v. Times- Mirror C0. (1921) 185 Cal. 20, 23.) B. The Demurrer against TACC’s Breach 0f Contract should be sustained. 1. C&T claims n0 damage suffered from the alleged Breach of Contract 0r other required elements. TACC First Cause of Action is Breach of Contract fails state a sufficient cause 0f action 0f Breach 0f Contract With certainty. T0 establish breach 0f contract, each plaintiff must prove (1) the existence of the contract, (2) the plaintiff’s performance 0r excuse for nonperformance, (3) the defendant’s breach, and (4) resulting damages to the plaintiff. [emphasis added] (Maxwell v. Dolezal (2014) 231 Ca1.App.4th 93, 98.) Further, t0 be enforceable, a promise must be definite enough that a court can determine the scope of the duty and the limits 0fperformance must be sufficiently defined t0 provide a rational basis for the assessment of damages.” [emphasis added] (Ladas v. California State Automobile Assn. (1993) 19 Cal.App.4th 761, 770.) Alleged promises that are too vague and indefinite do not give rise t0 an enforceable contractual duty. (Ibid.) TACC states in paragraph 15 that the “[parties] entered into a sublease agreement” and “the Sublease Agreement and Addendum is attached as Exhibit 1” [emphasis added]. But n0 exhibit was attached t0 TACC, neither the Sublease Agreement nor the Addendum. Such defect was pointed out in the Demurrer t0 SACC, but again Cheng and C&T did not correct such mistake Which renders this cause 0f action insufficient as TACC alleged a written contract. 1 5 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O With the entire Cause of Action 0f Breach 0f Contract for over 12 pages 0f allegations, TACC is unclear, lacks logic or fails to state what the terms of contract, What was C&T’s performance has satisfied the condition precedent, what was 02 Valley’s unexcused breaches and What were damages caused by those alleged breaches, if any. The Cause of Action of Breach 0f Contract in TACC hodgepodge many allegations in lengthy but unintelligent paragraphs. TACC merely made conclusive conclusion 0f “material breach” without showing why and how those allegations were “material breach” by repeating its self-defined terms under the Sublease Agreement (1) emergency contact information, (2) security deposit, (3) safe and clan conditions 0f premises, (4) waste, nuisance 0r unlawful use, (5) logo, licensing and trademark, (6) liquidate damages. (see TACC paragraphs 46-74). “While respondent's demurrer admits all facts well pleaded, however improbable the allegations may be (Woodroofv. Howes, 88 Cal. 184, 189 [26 P. 111]), matters improperly pleaded such as conclusions of law are not admitted by the demurrer. (Faulkner v. California Toll Bridge Authority, 40 Cal. 2d 3 17, 329 [253 P.2d 659] Therefore, for the purpose 0f Demurrer, TACC could not only plead legal conclusions 0f material breach While using those conclusions t0 replace sufficient and clear factual allegations. Even though this Cause 0f Action is very lengthy, it is unintelligent What are the alleged breaches and the respective damages resulting from those so called “material breaches”, if any. TACC alleged TACC alleges that most alleged breaches “allowing Cross-Complainant C&T tom all and any portion of the security deposit of $23,400.00 to correct the default as specified contract damages” as the reliefs sought by C&T (see TACC paragraphs 54, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 67, 68, 71). But as a matter of fact, as set forth in the Sublease Agreement based 0n Which C&T made its allegation of Breach of Contract, 02 Valley paid the $23,400.00 security deposit t0 C&T. C&T did not refund the security deposit and only sues t0 “wall and any portion of the security deposit of $23,400.00” [emphasis added] throughout all its pleadings for the original Cross-Complain t0 now, after three amended versions, TACC. By its own allegations in this cause 0f action, C&T confirms it suffers n0 damage after it retained the security deposit regardless 0f whether C&T has any factual ground t0 retain the 1 6 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O security deposit. Without damage, C&T has n0 legal 0r factual basis t0 seek any relief under its Breach of Contract Cause of Action, nor the Court could make any ruling to address this baseless breach so the entire Cause of Action should be dismissed. 2. C&T failed t0 allege the contractual terms in support 0f its allegation 0f Breach 0f Contract. C&T’s Breach of Contract alleged some additional “breaches” in other paragraphs (see TACC paragraphs 66), but the TACC even fails to claim on which were agreed terms those allegations were based. For paragraph 66, C&T alleged it processed online orders submitted to “02 Valley registered at Chick & Tea Sunnyvale Location” While “O2 Valley took away the DoorDash devices”, and therefore caused C&T “t0 lose revenue 0f at least $3,000 0n that day” after C&T took over its Sunnyvale location. The entire Sublease Agreement and Addendum is completely silent as t0 the ownership 0f online order account and online order devices, nor contains any clause to address damage related to lost revenue related to online orders after the Sublease Agreement was terminated. Nor TACC pled any additional written agreement, oral agreement, 0r modification addressing there were any contractual obligations for either side. Therefore, even such allegations were true, C&T failed t0 allege 0n Which term 0f the contract entered between C&T and 02 Valley provide such contractual basis for its allegation 0f breach. In addition, if such contractual obligation were in existence, it has t0 be “definite enough that a court can determine the scope of the duty and the limits of performance” (Ladas) For paragraph 67, C&T also failed to state any valid claim under breach of contract for an uncertain loss of venue “at least $3,000”. 3. C&T cannot assert unascertained damages in Breach 0f Contract. In an action for breach 0f contract, the measure 0f damages is “the amount which will compensate the party aggrieved for all the detriment proximately caused thereby, 01‘ which, in the ordinary course of things, would be likely to result therefrom” (Civ.C0de, § 3300), provided the damages are “clearly ascertainable in both their nature and origin” (Civ.C0de, § 3301). While the purposes behind contract and tort law are distinct, and “the distinction between the remedies for each is not ‘found ready made.’” (Freeman & Mills, Inc. v. Belcher Oil C0. (1995) 1 7 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O 11 Ca1.4th 85, 106, 44 Ca1.Rptr.2d 420, 900 P.2d 669) Therefore, if a breach 0f contract claim includes tort claim, it should be subject for demurrer based on the uncertainty. In this case, C&T alleges that 02 “C&T could not deny orders improperly sent t0 its account for hours” on May 25, 2020, 0n C&T’s “first day of business” and “caused it to lose revenue of at least of $3,000 0n that day” (see TACC paragraph 66). As discussed above such allegation is not based 0n breach 0f any agreed term between parties and pursuant t0 the Sublease Agreement and Addendum. As matter of fact, the Sublease Agreement and Addendum are completely silent as to how C&T should operate after the termination of the Sublease Agreement and Addendum and there is n0 allegation 0r legal basis t0 show how any contractual obligation survived after the termination 0f Sublease Agreement. Therefore, it is only reasonable t0 conclude that C&T intended t0 make a tortious claim Which is improperly and entirely misplaced under the Cause 0f Action 0f Breach of Contract. As addressed in the above-mentioned case laws, the key differences between tortious claim and breach 0f contract claim is the later can be pled With ascertain damages based 0n mutually agreed terms. Therefore, a Breach 0f Contract claim is subject t0 demurrer and should be dismissed if it does not contain contractual basis 0r alleged harm “found ready made”. 4. This Cause 0f Action was alleged between wrong parties and therefore no relief can be grant. TACC made allegations not on behalf ofC&T but “Cross-Complainants”. (see TACC Paragraphs 72, 74) TACC contains definition of Cross-Complainants as C&T and Cheng. (see TACC Paragraphs 1, 2, 3) 02 Valley has repeatedly reminded Defendants that their Breach of Contract is not valid claim for the parties Who are not in the contractual relationship, and the Court could not render a relief while no ascertain damage claimed 0r for allegations between parties who had n0 contractual relationship. TACC also included two new paragraphs but irrelevant allegations which ambiguously and unintelligently claim, based on “information and belief” that Paul Huang and Daniel Lu, two unrelated individuals t0 C&T and O2 Valley, had something t0 d0 some unclear breach in this Cause 0f Action. TACC’s inclusive allegations made the alleged claims and breaches all unintelligent and uncertain. 1 8 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O 5. The First Cause 0f Action shall be dismissed in its entirety. A demurrer should be sustained Without leave t0 amend if the conduct complained of imposes n0 liability under substantive law. (Droz v. Pacific National Insurance C0. (1982) 138 Cal.App.3d 181, 187.) As discussed above, throughout the First Cause 0f Action, C&T failed to state the required elements of Breach 0f Contract, d0 not meet the requirement t0 state facts sufficient to constitute a cause 0f action under CCP §430.10(e) and t0 avoid uncertainty and unambiguity under CCP §430.10(f). Nor the Court could possibly to render any relief since this cause of action claimed no damage, included wrong parties and failed to make sufficient allegations. Considering all incurable defects in this Breach 0f Contract, a Demurrer t0 this Cause 0f Action should be sustained and it should be dismissed in its entirety. C. TACC failed t0 state a sufficient cause 0f action of Breach of Implied Convent 0f Good Faith and Fair Dealing. The entire Second Cause 0f Action 0f Breach of Implied Covenant of Good Faith and Fair Dealing was alleged by both C&T and Cheng. What contractual relationship Which Cheng, as an individual, may have with 02 Valley were not alleged in this four-paragraphs cause 0f action 0r throughout TACC. Therefore, the allegations in this cause 0f action are uncertain and unintelligent. TACC paragraphs 78 alleged that “Cross-Complainants”, i.e., not only C&T but also Cheng, “have been harmed by Cross-Defendants 02 Valley” as the conclusion of the entire cause of action without any allegation of damages. The whole cause of action is grossly insufficient to survive a Demurrer. In addition, this cause of action only alleged that the breach was 0n “a covenant of good faith and fair dealing obligating Cross Defendant 02 Valley t0 refrain from doing anything to destroy 0r injury Cross-Complainants’ rights t0 receive the benefits of this Sublease Agreement”. The entire allegation is unintelligent as t0 the boilerplate and unclear definitions and statements 0f “rights”, “benefits” and “doing anything”. It also failed t0 claim any proximate cause and damage. Therefore, the Demurrer t0 this Cause of Action should be 1 9 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O sustained Without leave to amend since Cross-Complainants would not be able to state a sufficient and intelligent cause of action. D. TACC failed to state a sufficient cause of action 0f Anticipatory Repudiation. 1. TACC alleged a modification 0f the Sublease Agreement Which does not support its Cause 0f Action of Anticipatory Breach. TACC’s Cause 0f Action of Anticipatory Repudiation/Anticipatory Breach contains self- contracting, unclear and intelligent allegations as follows: - Paragraph 80: “Cross-Complainants [Cheng and C&T] successfully found a business owner interested in taking over the Sublease Agreement within a week [after December 23, 2019]” [emphasis added] - Paragraph 81: “Cross-Defendants informed Cross-Complainants that they would vacate the premises of Chick & Tea Sunnyvale 0n May 20, any not 0n March 20, 2020 as agreed by Parties.” - Paragraph 81: “Cross-Complainants agreed and reached out t0 the prospective sub-tenant for an equivalent extension.” - Paragraph 87: “they [Cheng and C&T] decided t0 let Cross-Defendants [02 Valley and O2 Valley Owners] know that they should move out on 0r around May 20, 2020, without further extensions, as previously agreed by Parties. Therefore, by the allegation set forth in TACC, it appears to be that C&T and 02 Valley reached the modification so a third party, as referred as “prospective subtenant” would step in “taking over the Sublease Agreement” s0 the Sublease Agreement would be performed in full. If so, these allegations have shown that no anticipatory breach may be claimed. “In the event the promisor repudiates the contract before the time for his 0r her performance has arrived, the plaintiff has an election 0f remedies - he or she may ‘treat the repudiation as an anticipatory breach and immediately seek damages for breach 0f contract, thereby terminating the contractual relation between the parties, or he [0r she] can treat the repudiation as an empty threat, wait until the time for performance arrives and exercise his [or her] remedies for actual breach if a breach does in fact occur at such time.’ ” 20 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O [emphasis added] (Romano v. Rockwell Internal, Inc. (1996) 14 Cal.4th 479, 489 [59 Ca1.Rptr.2d 20, 926 P.2d 1114].) In current case, the allegations With the Cause of Action 0f Anticipatory Breach did not show “Cross-Complainants” C&T and/or Cheng did not “treat” their alleged early termination request or requests made by “Cross-Defendants” 02 Valley and/or 02 Valley Owners as an anticipatory breach, rather “Within a week” identified a new “sub-tenant” for “taking over the Sublease Agreement”. (See TACC paragraph 80). Nor there was even one sentence in TACC alleging C&T and/or Cheng “immediately seek damages”, either by demanding further performance, 0r requesting a payment 0f liquidate damage. With all allegations merely suggest a modification 0f the Sublease Agreement With a new sub-tenant stepping into 02 Valley’s shoe t0 continue perform the remaining term “as agree by Parties”, there was no claim under Anticipatory Repudiation 0r Anticipatory Breach. As provided by case law in Romano, for anticipatory breach, C&T should have an option “t0 treat the repudiation as an empty threat, wait until the time for performance arrives and exercise his [0r her] remedies for actual breach if a breach does in fact occur at such time.” But Clearly C&T did not act accordingly nor fully perform its obligation under the Sublease Agreement Which required C&T to sublease its Sunnyvale location for a full three years, but as it alleged C&T “within one week” identified a new sub-tenant. In other paragraphs, C&T and Cheng also alleged that they ran the business immediately after 02 Valley vacated the Sunnyvale location Which also demonstrated that they had no intention t0 treat it as an Anticipatory Breach. However, as in the First Cause of Action 0f Breach 0f Contract, C&T and Cheng have clearly treated that the Sublease Agreement had been terminated, without explaining how many terms survived the termination. Again, with alleging both Breach 0f Contract and Anticipatory Repudiation 0r Anticipatory Breach, C&T and Cheng haver rendered TACC, in its entirety, more ambiguous and uncertain since these two causes of action are simply self-contradicting. 2 1 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O 2. This Cause of Action was alleged between wrong parties with n0 ascertain damage claimed and therefore n0 relief can be grant. In addition, TACC continuously uses inclusive terms of “Cross-Complainants” and “Cross-Defendants” Which render allegations related contractual relationship ambiguous and uncertain as t0 Who did What and Who should be liable for What. This Cause of Action, by including those individual parties, is unintelligent and unclear as t0 What relief against Whom is sought under its claim. This cause 0f action also did not plead an ascertain amount damage by using vague terms 0f “unpaid rent” and “liquidated damage”. Therefore, Demurrer t0 this Cause 0f Acton should be sustained. E. TACC failed t0 state a sufficient cause 0f action 0f Conversion. “Conversion is the wrongful exercise 0f dominion over the property 0f another. The elements of a conversion claim are: (1) the plaintiff‘s ownership 0r right t0 possession of the property; (2) the defendant’s conversion by a wrongful act 0r disposition of property rights; and (3) damages...” (Hodges v. Cly. ofPlacer (2019) 41 Ca1.App.5th 537, 551; see also Gruber v. Pacific States Sav. & Loan C0. (1939) 13 Ca1.2d 144, 148 [“Conversion is any act 0f dominion wrongfully exerted over the personal property 0f another.”].) The simple failure to pay money owed does not constitute conversion. (Kim v. Westmoore Partners, Inc. (201 1) 201 Ca1.App.4th 267, 284-85.) Rather, a cause of action for conversion of money can be stated only where a defendant interferes with the plaintiffs possessory interest in a specific, identifiable sum, such as When a trustee 0r agent misappropriates the money entrusted t0 him. “Money cannot be the subject of a cause 0f action for conversion unless there is a specific, identifiable sum involved, such as where an agent accepts a sum 0fmoney to be paid t0 another and fails t0 make the payment.” (McKell v. Washington Mutual, Inc. (2006) 142 Ca1.App.4th 1457, 1491.) Those California cases that have permitted an action for conversion ofmoney typically involve misappropriation, commingling, 0r misapplication 0f specific funds held for the benefit 0f others. (See, e.g., Haigler v. Donnelly (1941) 18 Cal.2d 674, 681 [real estate broker]; Fischer v. Machado (1996) 50 Ca1.App.4th 1069, 1072-1074 [sales agent for consigned farm products]; 22 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O Weiss v. Marcus (1975) 51 Cal.App.3d 590, 599 [attorney's claim for $6,750 fees from proceeds of settlement subject to lien]. TACC did not allege that any misconducts of “misappropriation, commingling, or misapplication of specific funds held for the benefit 0f others” actually were done by “Cross- Defendants” in this Cause of Action, but the allegations under this Cause 0f Action simply does not make any sense. First part, as set forth in paragraph 91, TACC alleged “Cross-Complainants - while running their first day of business. .. received quite a few orders through DoorDash”. .. “[u]pon information and belief” that “Cross-Defendants had taken away all the DoorDash devices”. However, rather than clarifying Whether Cross-Complainants have any ownership 0f those device, TACC changed the course and claimed the lost revenue of “at least $3,000 0n that day”. Second part, however, in the following paragraph 92, this cause of action instead 0f the DoorDash account, but claimed “Cross-Complainants failed t0 receive a check from Grubhub” and “based 0n Grubhub, $2,746.88 was deposited into Cross-Defendants’ account.” While Cross-Complainants also confirmed that the account was registered under “02 Valley, Inc. Grubhub ID 1401613 -Registered under Ming Yi Lai”. So, it seems that Cheng and/or C&T alleged that 02 Valley has the ownership 0f an account to Which Grubhub made a deposit. Therefore, While Cross-Complainants have n0 ownership 0f the account registered by O2 Valley Owners for 02 Valley, and 02 Valley or 02 Valley Owners did not do anything t0 cause the alleged $2,746.88 to be deposited their account but Grubhub did so. Therefore, no elements 0f conversion were pled, and the conversion claim Will fail in its entirety. The third part, in paragraph 94, Cross-Complaints claimed that Cross-Defendants “have not paid any portion of the security deposit of $23,400.00.” The simple failure t0 pay money owed does not constitute conversion. (Kim v. Westmoore Partners, Inc. (201 1) 201 Cal.App.4th 267, 284-85.) The Sublease Agreement which TACC alleged contains a handwritten part clearly stating that $23,400.00 security deposit had been paid in May 2019. Claiming the security deposit has not been paid is simply self-contradicting since the Breach 0f Contract cause 0f action repeatedly requested t0 “retain any and all portion 0f the security deposit. 23 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O In addition, throughout TACC, including this Cause 0f Action, Cross-Complaints did not make any allegations to pierce of corporate veil based on which 02 Valley Owners should be personally liable for any claims. Therefore, all claims made against 02 Valley Owners lack any legal basis and also render the Cause 0f Action 0f Conversion in TACC unintelligent and uncertain so n0 relief could be grant based 0n these claims. F. TACC failed t0 state a sufficient cause 0f action 0f Unjust Enrichment. In general, ‘[a] person who has been unjustly enriched at the expense of another is required to make restitution to the other.’ (Rest, Restitution, § 1.) “The phrase ‘unjust enrichment’ is used in law t0 characterize the result or effect 0f a failure t0 make restitution 0f or for property 0r benefits received under such circumstances as t0 give rise t0 a legal 0r equitable obligation t0 account therefor.” (Ajaxo Inc. v. E Trade, 187Cal.App.4th 1305) Through paragraphs 99 t0 109, this cause 0f action apparently cut and pasted some irrelevant paragraphs previously alleged without alleging unjust enrichment. Then from paragraph 110, TACC claims that Cross-Defendants were enriched for $2,746.88 because “Cross-Defendants registered their own account at the chick & Tea Sunnyvale location, without seeking Cross-Complaints’ advance approval or even inform Cross-Complaints, constituting a breach 0f the Sublease Agreement.” This Cause of Action shares many same defects 0f other causes 0f action: (1) this Cause of Action hodgepodge multiple parties Without specific claims to each or claim to Whose account the alleged deposit was made, (2) this Cause of Action mingled breach of contract claims, (3) this Cause of Action failed t0 state elements of Unjust Enrichment, especially What wrongful actions by Cross-Defendants give rise t0 a legal 0r equitable obligation While Cross- Complainants acknowledged that Grubhub made the alleged deposit after C&T took over the operation 0f its Sunnyvale location. To further confuse the allegation, paragraphs 111 and 112 claimed there was an “implied -in-fact contract” was breached Without identifying What are the underlying terms 0f such implied contact. With all the defects, allegations going all over places without clarity and 24 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O certainty, Demurrer against this Cause of Action of Unjust Enrichment in TACC should be sustained. G. TACC failed to state a sufficient cause of action 0f Declaratory Relief. C&T also asserted their Cause 0f Action 0f Declaratory Relief. "A complaint for declaratory relief is legally sufficient if it sets forth facts showing the existence 0f an actual controversy relating t0 the legal rights and duties of the respective parties under a written instrument and requests that these rights and duties be adjudged by the court." (Maguire v. Hibernia S. & L. 500., 23 Cal. 2d 719, 728) However, Within this Cause 0f Action, Cross-Complainants neither pled any facts nor any legal rights and duties 0f respective parties, Le. C&T and 02 Valley. This Cause 0f Action is entirely unclear What remedy 0f Declaratory Relief is sought by C&T after it had repeatedly claimed that the Sublease Agreement had been terminated and C&T took repossession 0f the Sunnyvale location immediately after 02 Valley vacated the Sunnyvale Location. Also, in paragraph 117, C&T claimed “monetary damage alone would not be sufficient t0 remedy Cross-Complainants’ injuries”. This cause 0f action not only did not spell out what C&T and Cheng’s injuries, if any. Meanwhile, this cause of action basically repeated the same Therefore, Demurrer against this Cause of Action shall be sustained Without leave t0 amend. H. TACC failed t0 state a sufficient cause 0f action 0f Defamation with certainty. In addition to a Special Motion to Strike may be filed to the Seventh Cause of Action of Defamation pursuant t0 the California Anti-Slapp Law, the Defamation Cause 0f Action is subj ect t0 Demurrer because it is ambiguous and unintelligible and completely failed to state a Cause 0f Action. Throughout the entire Cause of Action, Cross-Defendants claimed “Cross-Defendants made a number of untruthful statements 0n Facebook” Without identifying time, specific content, posting party, posting link, defamatory intention, readers, readers’ reliance of alleged false statement, and specific damages. The entire Cause 0f Action not only violates and suppresses the right Freedom 0f Speech, but also renders the allegations unclear and uncertain, since, t0 start With, n0 one could identify Which postings were TACC alleged “false statements”. 25 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O This Cause 0f Action also did not specify who heard those alleged “false statements”, Whether they believed such “false statements” were true, and What were the direct harm caused by those audience’ belief 0f false statement. Without any factual allegation, but merely claiming a defamation is not sufficient stated Cause 0f Action, Which should be dismissed in its entirety. I. TACC failed t0 state a sufficient cause 0f action 0f Concealment. "[T]he elements of a cause of action for fraud based on concealment are: ' "(1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact With the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known 0f the concealed 0r suppressed fact, and (5) as a result 0f the concealment 0r suppression of the fact, the plaintiff must have sustained damage.". . . '. . . ." [emphasis added] (Kaldenbach v. Mutual Omeaha Life Ins. C0. (2009) 178 Ca1.App.4th 830, 850) Fraud must be pleaded with specificity, rather than with general and conclusory allegations. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) HOW the cause of action 0f Concealment was constructed demonstrates that Cheng and C&T misunderstand such claim in its entirety and have n0 claims therein. This cause 0f action merely repeats the same alleged breach 0f contract without showing (1) Why the so-called concealed information was material, (2) why 02 Valley and 02 Valley Owners were under the duty t0 disclose, (3) Whether 02 Valley and 02 Valley Owners had intention to defraud, and (4) most importantly, if such information was not concealed, how would Cheng and C&T act differently. As matter of fact, all the allegations in this cause 0f action concerning the alleged breach under the Sublease Agreement during its performance phase. Therefore, even if the allegations were true, it is clear that at the time 0f entry 0f the Sublease Agreement, n0 concealment was made t0 cause Cheng and C&T’s reliance of omitted information, if any. The Whole cause 0f 26 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O action also did not allege that Cheng and C&T would do anything different or even sought recoveries of the material breaches they alleged. Under Civil Code section 1710, subd. (3), fraud may consist of a suppression of a material fact in circumstances in Which the defendant has a legal duty 0f disclosure. "A duty t0 disclose facts arises only When the parties are in a relationship that gives rise t0 the duty, such as ' "seller and buyer, employer and prospective employee, doctor and patient, 0r parties entering into any kind of contractual arrangement." (Shin v. Kong (2000) 80 Ca1.App.4th 498, 509.) J. TACC failed t0 state a sufficient cause 0f action of Common Count. The Cause 0f Action 0fCommon Count in TACC essentially repeats a part 0f the Cause 0f Action 0f Unjust Enrichment, but did not allege how Cross-Defendants, i.e. not only 02 Valley but also 02 Valley Owners, became indebted to Cross-Complainants, i.e., not only C&T but also Cheng, and what basis, it was for money used for benefit 0f Cross-Claimants. How was the open count created 0r for work, services, 0r good requested by 02 Valley and 02 Valley Owners and promised to pay, 0r money lent t0 02 Valley and 02 Valley Owners. Like other causes 0f action, by misusing the conclusive term 0f “Cross-Complainants” and “Cross- Defendants”, renders this cause of action uncertain and ambiguous and therefore insufficient t0 state a claim. In addition, the allegations in this Cause of Action shows that Cross-Complainants had no idea whether C&T’s sale proceeds went but intended to claim 02 Valley’s Grubhub account. Therefore, the Common Count cause of action is not sufficient and subject to be demurred. I. TACC failed t0 state a sufficient cause 0f action 0f Violation 0f California Business & Professional Code Section 17200. California Business & Professions Code §17200 prohibits any “unlawful, unfair 0r fraudulent business act 0r practice” and any “unfair, deceptive, untrue or misleading advertising.” California Business & Professions Code §17200 “is not confined t0 anticompetitive business practice but is equally directed toward ‘the right 0f the public t0 protection from fraud and deceit.” (Stoiber v. Honeychuck, (1980) 101 Cal.App.3d 903, 927). “[A]ny unlawful, unfair 0r 27 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O fraudulent business act 0r practice is deemed t0 be unfair competition.” (Podosky v. First Healthcare Corp, (1996) 50 Ca1.App.4th 632, 647). The basis of these theories center on conduct that is unlawful, unfair, or fraudulent. However, this Cause 0f Action 0fTACC did not allege any specific conducts against Cross-Defendants but also unintelligently allege “assuming Without conceding that the Complaint states a claim, Plaintiffs’ claims are barred, in whole or in part, under the statute 0f limitation.” (see TACC paragraphs 137). Further, Cross-Complainants claimed Cross- Defendants unjustly enriched and suffered “an irreparable harm”. This Cause of Action is simply a non-sense which was asserted Without any adequate allegation 0r claim. Therefore, it must be dismissed in its entirety. K. TACC prayer does not cure any deficiency 0f the above-mentioned causes 0f action. TACC’S prayer states Cross-Complainants, against Without distinguish the different roles 0f Cheng and C&T made boilerplate prayer for damages and other reliefs without any item is specified. VI. CONCLUSION After multiple meet and confer letters from 02 Valley, four versions including three amendments and one formal Demurrer, TACC still fails t0 assert any sufficient claim against correct party to alleged elements for proper causes 0f action and meet the legal requirements 0f First through Tenth Causes of Action against 02 Valley and 02 Valley Owners. As discussed above, the defects of Cross-Complainants’ claim are inherent and cannot be cured. Therefore, Cross-Defendants respectfully request that the Court finds the below: o The First Cause of Action of Breach of Contract fails to allege facts sufficient t0 constitute a cause of action and contains uncertainty and ambiguity. o The Second Cause 0f Action 0f Breach 0f Implied Covent fails t0 allege facts sufficient t0 constitute a cause of action and contains uncertainty and ambiguity. o The Third Cause of Action 0f Anticipatory Breach fails t0 allege facts sufficient t0 constitute a cause 0f action and contains uncertainty and ambiguity. 28 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQQUI-RUJNH NNNNNNNNNHr-tr-tr-tr-tr-tr-tr-tr-tr-t OOQONUl-hUJNh-‘OKOOOQONUl-bUJNF-‘O The Fourth Cause 0f Action if Conversion fails t0 allege facts sufficient t0 constitute a cause of action and contains uncertainty and ambiguity. The Fifth Cause of Action of Unjust Enrichment with Prospective Relationship fails to allege facts sufficient to constitute a cause 0f action and contains uncertainty and ambiguity. The Sixth Cause 0f Action of Declaratory Relief fails t0 allege facts sufficient t0 constitute a cause of action and contains uncertainty and ambiguity. The Seventh Cause 0f Action 0f Defamation Relationship fails t0 allege facts sufficient t0 constitute a cause 0f action and contains uncertainty and ambiguity. The Eighth Cause of Action 0f Concealment fails t0 allege facts sufficient to constitute a cause 0f action and contains uncertainty and ambiguity. The Ninth Cause 0f Action 0f Common Count fails t0 allege facts sufficient t0 constitute a cause of action and contains uncertainty and ambiguity. The Tenth Cause of Action of Violation of Business and Professional Code fails t0 allege facts sufficient t0 constitute a cause 0f action and contains uncertainty and ambiguity. Based 0n these finds, the Court may order the Demurrer against all causes of action listed above sustained without leave t0 amend. Dated: June 23, 2021 Merca Law Group /s/Shanshan Zou Shanshan Zou Attorney for Plaintiff and Cross-Defendants 29 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT \OOOQONUIAUJNH NNNNNNNNNHHr-tr-KHHHr-tr-tr-t OOQQUIAUJNP-‘OKOOOQONUIAUJNF-‘O PROOF OF SERVICE Case Name: 02 Valley V. Frank Cheng Jr. et a1. Court: Santa Clara Superior Court, Civil Unlimited Case No. 20CV368 1 90 I, Shanshan Zou, declare that I am employed in the City and County of San Francisco, California. My business address is 456 Montgomery Street, Suite 1300, San Francisco, California 94104. On June 24, 2021, I serve the following document attached t0 this Proof 0f Service: NOTICE OD DEMURRER AND DEMURRER TO THIRD AMENDED CROSS- COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITY IN SUPPORT OF DEMURRER to the following parties at the following address: Arnold C. Wang Amold(a)aswtlawvers.com Craig S. Momita Craig@aswtlawvers.com Arias Sanguinetti Wang & Torrijos LLP 6701 Center Drive West, suite 1400 Los Angeles, CA 90045 Via email t0 confirmed email address to Amold@aswtlawers.com and Craig@aswtlawyers.com only by e-mailing the documents to the persons at the email address(es) listed as accepted service method by all parties in this lawsuit. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct and that the attached documents are genuine. This declaration was executed 0n June 24, 2021, at San Francisco, CA 94104. /s/Shanshan Zou Shanshan Zou 30 DEMURRER TO FIRST THROUGH TENTH CAUSE OF ACTION IN THIRD AMENDED CROSS COMPLAINT