Leslie A. Andrews vs. Marcum LlpReply OtherCal. Super. - 4th Dist.January 19, 2016OO 0 NN ON 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 JOHN M, HAMILTON (SBN 155381) HAMILTON LAW OFFICES 5757 W. Century Blvd., Suite 700 Los Angeles, California 90045 Telephone: (310) 348-2938 Facsimile: (310) 348-7288 FRANK C. WELZER (SBN 155403) ZUKERMAN GORE BRANDEIS & CROSSMAN, LLP Eleven Times Square New York, New York 10036 Telephone: (212) 223-6700 Facsimile: (212) 223-6433 Attorneys for Defendants Marcum LLP and Stan Lam ELECTRONICALLY FILED Superior Court of California, County of Orange 0818/2016 at 01:40:00 PM Clerk of the Superior Court By Waria Gina Barr, Deputy Clerk SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ORANGE-CENTRAL JUSTICE CENTER LESLIE A. ANDREWS, Plaintiff, V. MARCUM LLP, a limited liability partnership; STAN LAM, an individual; and DOES 1 through 100, inclusive, Defendants. CASE NO.: 30-2016-00830847 ASSIGNED FOR ALL PURPOSES TO: JUDGE: James J. Di Cesare DEPT: C16 REPLY DECLARATION OF FRANK C, WELZER IN FURTHER SUPPORT OF DEFENDANTS’ MOTION TO DISMISS AND REQUEST FOR ATTORNEYS’ FEES AND COSTS Code of Civ. Proc. §§ 410.30(a), 418.10(a)(2) Court Reservation No. 72409092 Date: August 25, 2016 Time: 1:30 p.m. Dept: C16 B O W N Oo © ~~ O N W n 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 REPLY DECLARATION OF FRANK C. WELZER I, FRANK WELZER, declare the facts set forth herein as true and correct as to my own personal knowledge, and I could and would competently testify thereto under oath: 1. I am an attorney at Zukerman Gore Brandeis & Crossman, LLP, which is counsel for defendants Marcum LLP and Stan Lam in this matter. We are also counsel to Marcum in the collection action pending against Leslie Andrews in New York, entitled: Marcum LLP v. Leslie A. Andrews, et al., Supreme Court of the State of New York, County of Suffolk, Index No. 601235/2016 (the “New York Action”). 2. I submit this Reply Declaration in connection with Marcum and Mr. Lam’s Motion to Dismiss the First Amended Complaint filed by plaintiff Leslie Andrews (“Andrews”) in this lawsuit under Code of Civ. Proc. §§ 410.30(a) and 418.10(a)(2) because venue in California is improper. 3, On February 26, 2016, concurrently with the filing of their Motion to Dismiss plaintiffs original Complaint, defendants filed a demurrer. A true and correct copy of the Notice of Demurrer and Demurrer is attached hereto as Exhibit A. In the demurrer, defendants pointed out that among other things, plaintiff’s First Cause of Action for Financial Abuse of a Dependent Adult fails to state facts sufficient to constitute a cause of action. See Exhibit A, Memorandum of Point and Authorities, at pp. 5-6. 4, On July 14, 2016, concurrently with the filing of their Motion to Dismiss plaintiff’s First Amended Complaint (“FAC”), defendants filed a demurrer to the FAC. A true and correct copy of the Notice of Demurrer and Demurrer is attached hereto as Exhibit B. 5. I have read the Declaration by plaintiff’s first attorney in connection with this lawsuit, Sherri Shafizadeh. I stand by all of my statements as set forth in my Declaration executed on July 14, 2016. 6. Notably, Ms. Shafizadeh took issue with only one of my statements about her representations to me in the course of our three-month’s worth of pre-litigation discussions, when Ms. Shafizadeh urged that Marcum hold-off on filing its Complaint so that we could resolve the 1 REPLY DECLARATION OF FRANK C. WELZER IN SUPPORT OF DEEFENDANTS MARCUM LLP AND STAN LAM’S MOTION TO DISMISS OO © ~~ ON 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 matter without litigation. The only point of my Declaration that Ms. Shafizadeh contests is that Ms. Shafizadeh claims that she “specifically told [me] that Ms. Andrews suffered from severe bipolar mental disorder.” (Shafizadeh Decl. at p. 3:3-4). This is false. Ms. Shafizadeh never told me anything of the sort. If she had, I most certainly would have taken note. as In addition, Ms. Shafizadeh never mentioned anything to me about her client having ever been in a hospital, at any time, apart from her reference in her January 12, 2016 email. I had no idea what she was referring to, and I did not ask. By this point in time, Ms. Shafizadeh had strung out our pre-litigation settlement discussions for almost nine weeks, based upon excuses such as the holidays, and I understood this as just another in what seemed to be becoming a series of excuses, the result of which I had already written to Ms. Shafizadeh that “patience is wearing thin.” 8. It is telling that a mere seven days after she sent her January 12 email, Ms. Shafizadeh abruptly ended our settlement discussions and filed plaintiff's lengthy original Complaint, which included twelve causes of action, and which it seems Ms. Shafizadeh must have been working on while she was urging that Marcum not file its suit against her client because of Shafizadeh’s representations that she and her client wanted to resolve this dispute without litigation. 9. In connection with the New York Action, plaintiff is being represented by the Manatt, Phelps & Phillips, LLP law firm’s New York offices. This is the same law firm that is representing Ms. Andrews in the present action, through its Orange County office. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed August 18, 2016 at New York, New York. GF Ze Frank C. Welzer 2 REPLY DECLARATION OF FRANK C. WELZER IN SUPPORT OF DEEFENDANTS MARCUM LLP AND STAN LAM’S MOTION TO DISMISS EXHIBIT A JOHN M. HAMILTON (SBN 155381) HAMILTON LAW OFFICES 5757 W. Century Blvd., Suite 700 Los Angeles, California 90045 Telephone: (310) 348-2938 Facsimile: (310) 348-7288 FRANK C. WELZER (SBN 155403) ZUKERMAN GORE BRANDEIS & CROSSMAN, LLP Eleven Times Square New York, New York 10036 Telephone: (212) 223-6700 Facsimile: (212) 223-6433 Attorneys for Defendants Marcum LLP and Stan Lam ELECTRONICALLY FILED Superior Court of Galifomia, County of Orange 02/26/2016 at 04:38:00 PM Clerk of the Superior Court By Trinity hai, Deputy Clerk SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ORANGE-CENTRAL JUSTICE CENTER LESLIE A. ANDREWS, Plaintiff, Vi MARCUM LLP, a limited liability partnership: STAN LAM, an individual: and DOES 1 through 100. inclusive, Defendants. CASE NO.: 30-2016-00830847 ASSIGNED FOR ALL PURPOSES TO: JUDGE: James J. Di Cesare DEPT: C16 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS MARCUM LLP AND STAN LAM [Filed Concurrently With Motion To Dismiss] Code of Civ. Proc. §430.10(¢) Court Reservation No. 72327302 Date: April 14,2016 Time: 1:30 p.m. Dept: C16 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD HEREIN: PLEASE TAKE NOTICE that on April 14, 2016, at 1:30 p.m., or as soon thereafter 10 11 12 13 14 15 16 17 19 20 21 22 23 24 25 26 27 28 as this matter may be heard in Department C16 of the Orange County Superior Court, Central Justice Center, located at 700 Civic Center Drive West, Santa Ana, California, 92701, defendants Marcum LLP and Stan Lam will bring on for hearing the appended demurrer to the plaintiff's First through Twelfth causes of action in the complaint on file herein, on the grounds set forth in the attached demurrer and supporting memorandum of points and authorities. This Demurer is brought pursuant to Code of Civ. Proc. § 430.10(e), and is based on this Notice, the accompanying Demurrer and Memorandum of Points and Authorities, the Declaration of Frank C. Welzer with its exhibits, all records, papers and pleadings on file in this action, such oral argument as may be presented at the hearing of this motion, and all matters of which the Court may take judicial notice, Dated: February 26, 2016 ZUKERMAN GORE BRANDEIS & CROSSMAN, LLP 7, By: Fle Frank C. Welzer Attorneys for Defendants Marcum LLP and Stan Lam 2 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM No w l TABLE OF CONTENTS TABLE OF AUTHORITHES oomsammnsennosnmmssmeinssvessnomsasssnss ass (von eis ost o idns haa i i paias iii DEMURRER. TO COMPLAINT cuscsnosesmemmsrmmmudin sissies so oui ivi gstesioy visas sissess 1 MEMORANDUM OF POINTS AND AUTHORITIES ....cisssssssimssasssrsisevossivsissvisvssscsssasiniviss 3 I. II. INTRODUCTION sussesprsamsnssassspesmisnmsssdnssnassssntiesisssorsiuesieiomiisises vspiasvisiv s 3 LEGAL ARGUMENT y.cossnrsencmmmnssnens sts sos issn essa olin (uss wisismn min assassins 3 A, B. G. H. New York Law ADDIES wma iihiississs ied isis disso soso naisacss 3 Plaintiff Invokes The Agreements, Yet Seeks To Plead Around The Choice of New York Law and New York Forum ......ccccoeene 4 Plaintiff Alleges That Defendants Rendered Services Starting More Than Six Years Ago, But Does Not Specify The Dates Of The Supposed Wrengdoing .....suws sss 4 The First Cause of Action for Financial Abuse of a Dependent Adult fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cow. Proc, § 430.1008) ausmesso sess nus sopesres iis shaiasitess dbs ghia boo iam vsonetys 5 The Sccond Cause of Action for Deceptive Acts against a Dependent Adult fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cov. Proc. § 430,108) issms cxsasssassisbivs betes osssonts bia bsrisameeaiss asi insimirss 6 The Third Cause of Action for Breach of Fiduciary Duty tails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cov. Proc. § 304 1DL8Y: + conssmmnrvonsusenmsssiosnsrisuy ores so vsns asa dsons he hiadsivsns oasis ai ARCS AEH 7 The Fourth Cause of Action for Fraud fails to state facts sufficient to constitulc a cause of action and is subject to demurrer under Code of Cov. Proc. § 430.10(€)..cviivvviviiiiniiniiiniiinii 7 The Filth Cause of Action for Negligent Misrepresentation fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cov. Proc. § B30,10(L): + esererersasensncserssssssaseressssssssssnssassssssassoressssnsarssnssnsen d disFma sRb TORSI SAEED 9 The Sixth Cause of Action for Conversion fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cov. Proc. § 430.10(€)..ccivviiiininiiiiinnn. 10 The Seventh Cause of Action for Negligence fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cov. Proc. § 430.10(€)......cccvvviiivnivinesnenes 12 wn BE W N OS NO x Na 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 F 28 III. NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM The Eighth Cause of Action for Accounting fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cov. Proc. § 430.10(€)...ccccvcriemcriininnns The Ninth Cause of Action for Professional Negligence fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cov. Proc. § 430.10(e). ............. The Tenth Cause of Action for Conspiracy to Commit Fraud fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cov. Proc. § sa 13 430, 1070). ,. mumssisemmsconssmesaioamsmmtesssrsssssismmsm saa 14 The Eleventh Cause of Action for Intentional Infliction of Emotional Distress fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Lov. Prog, § 430, LOBBY, i.ocgwiim ami smsminsmmomss sass wo The Twelfth Cause of Action for Negligent Infliction of Emotional Distress fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cor. Prov, § 830, 1008). «comomimnei snaps asin sii ios CONCLUSION ii rh Ee EERE Ee Ere e ERE REE ree TARR REINER re - 15 TABLE OF AUTHORITIES Cases Ackerman v. Price Waterhouse, G4 N.Y. 20 535 (1999) ccvommnpmrsporssonsasnsasonsssionsnsi sais oaaioinis ess sors ais iamn ma ares havssins eas 15 Albert Apartment Corp. v. Corbo Co., 182 A.D.2d 500, 582 N.Y.5.2d 409 (1st Dep't 1992) .........ommmumsssmminiismnsses 8 Alexander v. Westbury Union Free School Dist. , 829 F.Supp. 2d 89; 111 (EDN.Y. 2011) corscerssnes imsliveissiemassiimsaisisistiosisasean senses 17 ATC Healthcare Inc. v. Goldstein, Golub & Kessler LLP. 28 Misc. 3d 1237(A), 958 N.Y.S.2d 59 (Sup. Ct. Nassau County 2009) .....ccvviivnicrnnvnnns 13 Baumann v. Hanover Cmiy. Bank, 100 A.D.3d 814, 957 N.Y.5.2d 111 (2012). .cosssmionssonisavsinisnsssosivisissssind aoansseasves on m 18 Bd. of Trustees of IBEW Local 43 Elec. Contractors Health and Welfare, Annuity and Pension Funds v. D'Arcangelo & Co., LLP, 124 A.D.3d 1358; 1 N.Y.S.3d 659 (4th Dept 2015) civvsirecrvrvesissssisisiisommmsimmasmonsrorse 10 Black v. Bank of Am., 30 Cal. App. 4th 1, 6, 35 Cal. Rptr. 2d 725 (1994)......ccoiriiinisisnimsissusisasissnsnsssnssessorss 17 Bouley v. Bouley, 19 A.D.3d 1049, 797 N.Y.S5.2d 221 (4th Dept 2005). cccucierssossssisisvivisorisissmosssumsassaspnenass 14 Cabral v. County of Glenn, 624 F. Supp. 2d 1184 (E.D. Cal 2009)........ccccmmrermimireniiiniiimimiiisiasssnsssnssnssss 5,6 I Calcutti v. SBU, Inc., 224 F, Supp. 2d 691 (S.DN.Y. 2002)..0cruiiviiimeninciscniemiesisiis sess nis 13 Citipostal, Inc. v. Unistar Leasing, 283 A.D.2d 916, 724 N.Y.S.2d 555 (4th Dep’t 2001)......cccvvermmesiesisssisisssnsisssnomsaoransasssss 11 Columbia Marine Servs., Inc. v. Reffet Ltd., 861 F.2d 18 (2d Cir. 1988) .uevrecucirieereriiemiisiaibine r s bess sas sass senses 12 Committee on Children's Television, Inc. v. General Foods Corp., 35 Cal.3d 197 (1983) iiviieroirerieemieinmenirrcacsiussenssssseias rss esess ses aeas sas nasas bestia sass as is sassasnsns 9 Ctr. for Rehabilitation and Nursing at Birchwood, LLC'v. S & L Birchwood, LLC, 92 A.D.3d 711,939 N.Y.S.2d 78 (2d Dep't 2012) ...cooveevmmmriminssensssisinsssisisansinsimnsssnens 14 DG Liquidation, Inc. v. Anchin, Block & Anchin, 300 A.D.2d 70, 750 N.Y.S8.2d 753 (15t Dep’t 2002) ....svsumersunssassersissssssssesnsessasssnsrsansassssanse 7 Farbstein v. Hicksville Pub. Library, 254 F. App X 50 (2d Cir. 2007) covevvemeemeeesimnsusesssisisssiisisisssimssassssisssissssmssnsss assesses 16 Ferro Fabricators, Inc. v. 1807-1811 Park Ave, Dev. Corp., 127 A.D.3d 479, 11 N.Y.S.3d 548 (1st Dep’t 2015), coriciiivimiiiniinninimnsnmssnninississsains 11 iil NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM tN w n ~ N Friedman v. Anderson, 23 A.D.3d 163, 803 N.Y.S.2d 514 (1st Dep't 2005) ... maemo 7: 16 G.D. Searle & Co. v. Medicore Commc'ns, Inc., 843 F. Supp. 895 (S.DIN. Ys FOP) iciuiss svivmmncosammionsnsn dessins sess aio sith siamese suis Seonmaaisnasp ss 12 Gregor v. Rossi, 120. A.B.3d 447,992 N.Y.8.2d 17 (135t Dep't 2014) ... sussinimississansnsmmmsoicns 11 Lazar v. Superior Court, 12 Cal. 4th 631 (1996) ....cmmmmiisssmsssninissins sions sins imiasins Cima Gs Es mish sos sh om 9 Lewis v. Friedman-Marks Clothing Co., 70 A.D.2d 866,418 N.Y.S.2d 60 (151 Dep't 1979) .....uipieismiviummimasssissininmseieomy 16 Lopresti v. Terwilliger, 126 F.3d 342d Cit. 1997). c0voeenencresininss sions sin isin soon is iioissiioasssbi iss asain isons sim suamsiatiis 12 Mackey Reed Elec., Inc. v. Morrone & Assoc. P.C., 125 A.D.:3d 822, 6 N.Y.8.3d 65 (2d Dep't 2015). cv cimpssnssasimssnsismsmniiasoesssi 8,10 Marine Midland Bank v. John E. Russo Produce Co., 65 A.D.2d 950, 410 N.Y.S.2d 730 (1978) c.ccocousisis corvarsiviosvisaiarimswsiavmssnimissssssnvmersniramesron 11 MceKell v. Washington Mul., Inc., 142 Cal, App. 4th 1457, 49 Cal. Rptr. 3d 227 (2006)......cccceummissemsanereimrmississoersnenissinsens 13 McPartland v. American Broadcasting Companies, Inc., 623 F.Supp. 1334 (SDNY. 1985)....ccccuirrnunremsmsmrsnnrisssssssssssssssnssssianisaminsansinisssssasanssessass 16 Michaan v. Gazebo Horticultural, Inc., 117 A.D.3d 692, 985 N.Y.S5.2d 601, 602 (2d Dep’t 2014) ....cvvurivuiuesissisivnsasnssisnsssrsmmsessossos 9 Moses v. Martin, 360 F.Supp.2d 533 (SDNY. 2004).....ccieriiniiiniisicceimi issn 12 Rodriquez v. City of New York, No. 05 Civ. 5117.(JFB), 2008 WL 420015 (E.D.N.Y. Feb. 11, 2005)......cscnssenorssrassarse 16 Sanshoe Trading Corp. v. Mitsubishi Intern. Corp., 122 Misc. 2d 585 (Sup. Ct. N.Y. Cty. 1984) ccc 14 Sheth v. New York Life Ins. Co., 273 A.D.2d 72, 709 N.Y.S.2d 74 (1st Dep’t 2000) .......ommuivsserssnssvsasisassassansiasonivsssaansonsios 11 Smith, Valentino & Smith, Inc. v. Superior Ct., 17 Cal. 3d 491 (1976) cuvvverereeiericusresisiosmusserssisiasissiessssssbanssasbnssssisssusiiassnssisvsvossonsonstonsiansay 4 Taggart v. Costabile, 131 A.D.3d 243, 14 N.Y.S.3d 388 (2d Dep’t 2015) ......aussmasssisnssismsssossaormmssagersress 18 Taguinod v. World Sav. Bank, 755 F. Supp. 2d 1065 (C.D. Cal. 2010) .ioiimmmiesmerimiiiiiminiiisiismmiis issn sass 6 1v NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM NN O N nn Bs Ww 10 11 12 14 15 16 18 19 20 21 22 23 25 26 27 28 Tutak v. Tulak, 123 A.D.28 758, 507 N.Y.5.2d 232 (2d Dep't 1986) ..cwunsvvmsmssaseniisrsissisomssiimiisassmsits 8 Varnado v. Midland Funding LLC, 43 F. Sigh. 38985 (N.D. Cal, 2004)...ummmpmnsosraonessamons saison sess session 18 Wilhelm. v. Pray. Price, Williams & Russell, 186 Cal. AppiSd 1329 (1986) ccusunssmrrsupvesnssmestascesmran sui ionis isms sss somos is someo e 10 Zacharia v. Schlossberg, 187 N.Y. S.2d 15, 187 N.Y.5.2d 15 (Sup. Ct. N.Y. County 1959) causes 12 Zepeda v. Paypal, Inc., 777 F.'8opp. 2d 1215 (M.D. Cal. 201 1) sumer moi sis aammasmmia as 14 Zimmer-Masiello, Inc. v. Zimmer, Inc., 159 A.D.2d 363, 552 N.Y.S.2d 935 (1st Dep't 1990) ..uusiser issn miming 8 Statutes Cal, Civ. Proc. Code § 3301 )u.ecmmmmmemnmomsessessnmpnbsssn i iiss se esis fsa vay 15 Cal. Civ. Proe. Code § 418.10(a)(2) suscuwanmmnvesrsrssonssmmnsssosssssmstaismapussstivasssarssysaurinivsessss snionss is 3 Cal. Civ. Proc. Code § 430. 10(€) .....cuswmmonmsrrsssrnssssussmassersnspybonssissssssssisasianssipngesdssisisseisbionsvs passim Cal. Civ, Proc. Code §§ 410.30() ...scvsummsrssomsvessespenpussssssomosssonssorisisasassussdyssiassssvisssin subssassanson 3 Cal. Welf, & Inst. Code § 15610,30 curuisisssscsssnsasnssersansonssnsssnsssrsssosassansasssissisesasiivissasvarsvasasassass 5 Civil COAE § 3345 ..uvererssiinissassninssusissssamsassorsassssissssssnsssnssress thrsnsmssvsiussih hidssassssnsissassnsvessomasssy 6,7 v NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM 2 wh S S WO c e N S DEMURRER TO COMPLAINT Defendants Marcum LLP and Stan Lam hereby demur to the complaint on each of the following grounds: action. action. action, action. action. action, action, action. Demurrer to First Cause of Action 1. The First Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(e). Demurrer to Second Cause of Action 1. The Second Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(e). Demurrer to Third Cause of Action 1. The Third Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(e). Demurrer to Fourth Cause of Action I. The Fourth Cause of Action [ails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(¢). Demurrer to Fifth Cause of Action 1. The Fifth Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(e). Demurrer to Sixth Cause of Action 1. The Sixth Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(e). Demurrer to Seventh Cause of Action I. The Seventh Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(e). Demurrer to Eighth Cause of Action I. The Eighth Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(¢). ~~ 10 11 13 14 Is 16 17 18 19 20 21 23 24 25 26 27 28 action. action. action, action. Dated: Demurrer to Ninth Cause ol’ Action 1. The Ninth Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(e). Demurrer to Tenth Cause of Action 1. The Tenth Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(¢). Demurrer to Eleventh Cause of Action I. The Eleventh Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(e). Demurrer to Twelfth Cause of Action 1. The Twelfth Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(e). February 26, 2016 ZUKERMAN GORE BRANDEIS & CROSSMAN, LLP By: Frank C. Welzer Attorneys for Defendants Marcum LLP and Stan Lam 2 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM ro MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION Leslie Andrews (“Andrews”) owes Marcum LLP (“Marcum”) more than $110,000 for accounting services rendered. The relationship between Marcum, the accounting firm, and Andrews, its client, is governed by written agreements. In accordance with the exclusive forum selection clause in the agreements, Marcum has filed suit against Andrews in New York. In an attempt to re-cast herself as “plaintiff” and avoid a lawsuit against her in the agreed- upon forum of New York, Andrews violated the mandatory forum selection clause by filing the present Complaint in Orange County. Immediately prior to filing this demurrer, Marcum LLP and Stan Lam filed a motion to dismiss pursuant to Code of Civ. Proc. §§ 410.30(a) and 418.10(a)(2) because venue in California is improper. Defendants file this demurrer now, so that in the unlikely event that Andrews’ case is not dismissed in light of the forum selection clause, the impropriety of Andrews’ supposed claims is addressed at the outset by demurrer. Given the exclusive New York forum selection clause, this Court need not decide the issues of New York law presented in this demurrer, and they can be addressed by the court in New York if Andrews chooses to assert counter-claims in the lawsuit pending against her in New York. II. LEGAL ARGUMENT A. New York Law Applies Marcum is an accounting firm with its headquarters in New York. Each of the three agreements governing the relationship between Andrews and Marcum contain a broad provision requiring disputes to be resolved under the laws of New York. The agreements each state that: “The terms and provisions of this engagement letter, any course of conduct, course of dealing and/or action of this Firm and/or [Andrews] and our relationship with you shall be governed by the laws of the State of New York...” Exhibits A. B, and C to Declaration of Frank Welzer (the “Agreements™), at Attachment A, § 11. “Such choice of law provisions are usually respected by ~ J NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS. MARCUM LLP AND STAN LAM 2 = Ww California courts.” Smith, Valentino & Smith, Inc. v. Superior Cr., 17 Cal. 3d 491, 494 (1976) (upholding forum selection clause under law of state set forth in agreement) (citation omitted). B. Plaintiff Invokes The Agreements, Yet Seeks To Plead Around The Choice of New York Law and New York Forum In her Complaint, Andrews specifically relies on the Agreements as the source of defendants’ duties. At the outset, Andrews alleges that her claims arise from her having “retained Defendants™ to provide “tax compliance, accounting services,” and that “in connection with these Services” defendants committed wrongful acts. (Complaint § 2). In the claim for conversion, the Complaint alleges that defendants “informed Ms. Andrews that they would charge her fair and reasonable amounts, and in accordance with the retainer agreement...” (Complaint § 57). In the claim for negligence, the Complaint alleges that defendants owed a duty to Andrews “in accordance with the retainer agreement...” (Complaint ¢ 61), Although the Complaint cites to the Agreements as the source of the defendants’ duties, it conspicuously omits a claim for breach of contract. Instead, in what smacks of an attempt to avoid the forum selection clauses, Andrews alleges a dozen non-contractual claims, each based on vague, generalized allegations of wrongdoing that make it difficult to understand exactly what wrongdoing is being alleged. Cc. Plaintiff Alleges That Defendants Rendered Services Starting More Than Six Years Ago, But Does Not Specify The Dates Of The Supposed Wrongdoing Andrews alleges that Marcum performed accounting work for her “beginning in the carly (sic) 2009” (Complaint 49 5, 12). The Complaint then alleges wrongdoing generally, but it does not specify the date of any of the supposed wrongdoing. Thus, given this vague pleading, it is impossible to determine from this Complaint whether any of the plaintiff’s twelve causes of action are timely. As set forth in detail below, with respect to the claim for professional negligence, plaintift’s failure to plead an act of professional negligence within three years of filing of the Complaint renders the claim delective, 4 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM 2 D. The First Cause of Action for Financial Abuse of a Dependent Adult fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cov. Proc. § 430.10(e). Plaintiff has failed to plead facts sufficient to show that she is a “dependent adult” within the meaning of the statute, Cal. Welf. & Inst. Code § 15610.30. In construing the term “dependent adults,” courts look to the legislative history of § 15610.30, which indicates that its major objective “was the protection of residents of nursing homes and other health care facilities” and that “[w]hile the definition of ‘dependent adult’ is not limited to persons living in such facilities, it reasonably should extend only Lo persons whose disabilities and needs are comparable to persons who are compelled to live in nursing homes and other health care facilities.” Cabral v. County of Glenn, 624 F. Supp. 2d 1184, 1194 (E.D. Cal 2009) (citations omitted). In Cabral, the court addressed this legislative history, and then cited to an unpublished appellate court decision finding the plaintiff not to be a “dependent adult” despite the fact “he was 56 years of age, was blind in one eye and partially blind in the other eye, suffered from posttraumatic stress disorder, was disabled due to his medical and psychiatric problems, suffered from neurological ‘sequelae’ from a rifle wound to the head, was facially disfigured and had been rated as 100 percent disabled by the United States Department of Veterans Affairs.” /d. at 1194, The court then dismissed the claim of dependent adult abuse before it, because “[a]side from allegations that he was mentally ill and psychotic,” plaintiff made only conclusory assertions that “[a]t all relevant times” he “was a dependent adult.” Jd. at 1195. Here, the Complaint alleges that plaintitt “is a disabled person because she is a person with an actual and/or perceived mental disability, i.e. bipolar disorder, anxiety and depression” and that “at all relevant times, Ms, Andrews’ mental impairments affected her immunological and neurobiological body systems, and limited her abilily to participate in major life activities.” (Complaint 2). However, the Complaint does not allege that she lives under the care of another, or that she no longer handles her own finances, or that she needs assistance with most activities of daily life. Rather, as in Cabral, plaintiff makes only the conclusory assertions that that plaintiff “had mental limitations that restricted [her] ability to carry out normal activities, or to protect [her] 2 NOTICE OF DEMURRIER AND DEMURRER BY DEFENDANTS. MARCUM LLP AND STAN LAM a W e rights,” and, as in Cabral, “[t]hese allegations are simply insufficient to establish that Plaintiff was a dependent adult as that term is used in the Elder Abuse Act.” Cabra, 624 F. Supp. 2d at 1195. In addition, plaintiff fails to identify the specific allegedly abusive conduct. The Complaint alleges that defendants “provided fraudulent invoices,” “excessively overcharged,” “intentionally concealed all such excess fees and transactions,” “failed to competently work as a CPA,” and “engaged in a fraudulent scheme.” (Complaint at 99 14, 15, 18). However, such conclusory allegations lack the specificity required in order to state a claim for dependent adult abuse. See, e.g, Taguinod v. World Sav. Bank, 755 F. Supp. 2d 1065. 1074 (C.D. Cal. 2010) (dismissing complaint where plaintiffs failed “to identify how Defendant has violated the referenced California statutes,” and to state with sufficient specificity “what actions taken by Defendants constituted such elder financial abuse within the purview of the statutes™). I. The Second Cause of Action for Deceptive Acts against a Dependent Adult fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cov. Proc. § 430.10(e). Plaintiff's claims for deceptive acts against a dependent adult under Civil Code § 3345 fail because such claims are “not an independent cause of action and will only apply if Plaintiff [ | successfully prove(s] liability under [another] claim.” Johnston v Allstate Ins. Co., 13-CV-574- MMA BLM, 2013 WL 2285361, at *5 (S.D. Cal. May 23, 2013) (citations omitted). In addition, plaintifT’s second cause incorporates by reference and relies upon the allegations contained in her first cause of action, and suffers from the same pleading deficiencies as the first. PlaintifT has failed 10 identify how defendants violated the referenced statutes; plaintiff has failed to plead that she is a “dependent adult” within the meaning of California Welfare and Institution Code § 15610.27 or California Civil Code § 3345, and plaintiffs fails to specify what actions taken by defendants constituted such dependent adult abuse within the purview of the statutes. Thus, plaintiff”s second cause of action, seeking treble damages under Civil Code § 3345, should be dismissed along with the first. 6 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS. MARCUM LLP AND STAN LAM F. The Third Cause of Action for Breach of Fiduciary Duty fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cov, Proc. § 430.10(e). Plaintiff alleges that *[p]ursuant to the business CPA/accountant-client relationship” and “by virtue of the relationship of confidence and trust between Ms. Andrews and Defendants as Ms. Andrews’ CPA and accountant, defendants owed, and continue to owe, Ms. Andrews a fiduciary duty.” (Complaint at {9 12, 38). However, under New York law, there is no fiduciary relationship in general between an accountant and his client. DG Liquidation, Inc. v. Anchin, Block & Anchin, 300 A.D.2d 70, 70-71, 750 N.Y.S.2d 753 (1st Dep't 2002) (dismissing breach of fiduciary duty claim “since the duty owed by an accountant to a client is generally not fiduciary in nature”). “A conventional business relationship, without more, does not become a fiduciary relationship by mere allegation.” Friedman v. Anderson, 23 A.D.3d 163, 166, 803 N.Y.S.2d 514 {1st Dep’t 2005) (dismissing clients breach of fiduciary duty claim against accountants)(citation omitted). The cause of action for breach of fiduciary duty is also subject to dismissal because it is duplicative of the professional negligence cause of action, “since they arise from the same facts as those underlying the legal malpractice cause of action, and do not allege distinct damages.” Mackey Reed Elec., Inc. v. Morrone & Assoc., P.C., 125 A.D.3d 822, 823, 6 N.Y.8.3d 65 (2d Dep’t 2015) (dismissing breach of fiduciary duty and fraud counts as duplicative of professional negligence cause of action). G. The Fourth Cause of Action for Fraud fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cov, Proc. § 430.10(¢). The Complaint’s fourth cause of action relies upon general allegations that defendants, through Lam, made “false promises” that “they were capable of handling Ms. Andrews’s personal and business finances,” that they “were handling her finances for her benefit and in her best interest” and “would charge her fairly...” (Complaint § 44). Plaintiff fails to state a claim for fraud because at most, she alleges non-actionable statements of future intention, and not a false statement of existing fact. Under New York law, facts allegedly misrepresented or concealed must be both existing and material to constitute a basis 7 NOTICE OF DEMURRIER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM for traud. Zimmer-Masiello, Inc. v. Zimmer, Inc., 159 A.D.2d 363, 367, 552 N.Y.S.2d 935 (Ist Dep't 1990). Mere speculation about future events, or expressions of hope for the future, are not actionablc as fraud because they are not existing facts, Albert Apartment Corp. v. Corbo Co., 182 A.D.2d 500, 501, 582 N.Y.S.2d 409 (Ist Dep't 1992). An action for fraud “may not be based upon a statement of future intentions, promises or expectations which were speculative, or an expression of hope at the time when made.” Turak v. Tutak, 123 A.D.2d 758, 760, 507 N.Y.S.2d 232,233 (2d Dep’t 1986). Here, the supposedly fraudulent statements concern (1) defendants’ ability to handle personal and business finances, and (2) the amounts that defendants would charge for their services. These are non-actionable statements of future intent and expressions of hope for the future, and cannot form the basis for a claim of fraud. [n addition, to the extent that plaintitl may argue that defendants made a fraudulent statement as to an existing fact in their “handling her finances for her benefit and in her best interest,” in that scant allegation Andrews fails to plead any of the “who, what, where and when” type of details required in order to meet the heightened pleading requirements for fraud under New York law, as set forth in N.Y. Civil Practice Law and Rules 3016(b): Fraud or mistake. Where a cause of action is based upon misrepresentation, fraud, mistake, willful deceit, breach of trust, or undue influence, the circumstances constituting the wrong shall be stated in detail. N.Y.C.P.L.R. 3016(b) (emphasis added). Under New York law, “[t]o properly plead a cause of action to recover damages lor fraud, a plaintitl must allege that (1) the defendant made a false representation of fact, (2) the defendant had knowledge of the falsity, (3) the misrepresentation was made in order to induce the plaintiff's reliance, (4) there was justifiable reliance on the part of the plaintiff, and (5) the plaintiff was injured by the reliance.” Michaan v. Gazebo Horticultural, Inc, 117 A.D.3d 692, 692, 985 N.Y.S.2d 601, 602 (2d Dep't 2014) (affirming dismissal where “complaint asserted only in conclusory terms that the estimates provided by the defendants were too low, and failed to adequately plead facts from which it could be inferred that the defendants knew their estimates were false at the time they were provided”). The factual allegations 8 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM U n ~ N O n describing each element of the claimed fraud must “be stated in detail.” N.Y. C.P.L..R. 3016(b); Michaan, 117 A.D.3d at 692. A claim for fraud asserted merely in conclusory terms should be dismissed. /d.' In addition. while plaintiff makes a vague reference to “fraudulent invoices” (Complaint at 14), Andrews fails to provide the necessary details concerning those invoices, such as the date, services rendered, persons who performed the work, and amount. The cause of action for fraud is also subject to dismissal because it is duplicative of the professional negligence cause of action, “since they arise [rom the same facts as those underlying the [] malpractice cause of action, and do not allege distinct damages.” Mackey Reed Elec., Inc, v. Morrone & Assoc., P.C., 125 A.D.3d 822, 823, 6 N.Y.S.2d 65 (2d Dep’t 2015) (dismissing breach of fiduciary duty and fraud counts as duplicative of professional negligence cause of action); Bd. of Trustees of IBEW Local 43 Elec. Contractors Health and Welfare, Annuity and Pension Funds v. D'dArcangelo & Co., LLP, 124 A.D.3d 1358, 1360, 1 N.Y.S.3d 659 (4th Dep’t 2015) (“we agree with defendant that the third through sixth causes of action should be dismissed as duplicative of the professional malpractice cause of action, including the causes of action for fraud”). H. The Fifth Cause of Action for Negligent Misrepresentation fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Coy. Proc. § 430.10(c). As with the fraud claim, plaintif’s negligent misrepresentation claim fails because it is based on non-actionable expressions of future expectation concerning (1) defendants’ ability to handle her personal and business finances, and (2) the amounts that defendants would charge for their services. (Complaint 51). “[P]Jurported misrepresentations relied upon by plaintiffs may not form the basis of a claim for fraudulent and/or negligent misrepresentation since they are conclusory and/or constitute mere puffery, opinions of value or future expectations.” Sheth v. New York Life Ins. Co., 273 A.D.2d 72. 74, 709 N.Y.S.2d 74 (1st Dep't 2000) (citations omitted). : Likewise, under California law, fraud must be pleaded with particularity. Committee on Children's Television, Inc. v. General Foods Corp., 35 Cal.3d 197, 216 (1983). Every element of the cause of action must be supported by facts, showing how. when, where, to whom and by what means any alleged representations were made. Lazar v. Superior Court, 12 Cal.4th 631, 645 (1996). The policy of liberal construction of pleadings will not act to save a defective claim for fraud. Wilhelm. v. Pray, Price, Williams & Russell, 186 Cal. App.3d 1324, 1332 (1986). 9 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM wm o s W N «oR N S 19 Likewise, the negligent misrepresentation claim fails (as does the fraud claim) because it does not plead the supposed misrepresentation with the requisite particularity required under New York law, i.e., who made the representation, when, and what exactly was said. N.Y. C.P.L.R, 3016(b). Ferro Fabricators, Inc. v. 1807-1811 Park Ave. Dev. Corp., 127 A.D.3d 479, 479, 11 N.Y.S.3d 548 (1st Dep't 2015), citing Gregor v. Rossi, 120 A.D.3d 447, 992 N.Y.S.2d 17 (1st Dep't 2014) (holding that fraud and negligent misrepresentation claims were not pleaded with requisite particularity “because the words used by defendants and the date of the alleged false representations are not set forth™), k The Sixth Cause of Action for Conversion fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cov. Proc. § 430.10(e). In her conversion claim, plaintiff alleges that defendants charged her “excessive” and “unreasonable” fees, and that defendants refused to refund her money. (Complaint 19 2, 16). Andrews also alleges generally that “Defendants were paid hundreds of thousands of dollars in excessive fees.” (Complaint 9 14), Run-of-the-mill damages claims based on contracts or debts owed cannot form the basis of a claim for conversion, Marine Midland Bank v. John FE. Russo Produce Co., 65 A.D.2d 950, 952, 410 N.Y.S.2d 730 (1978), modified on other grounds, 50 N.Y.2d 31 (1980) (holding that “a mere claim of moneys paid out by mistake based upon contract will not support an action for conversion”); Citipostal, Inc. v. Unistar Leasing, 283 A.D.2d 916, 919, 724 N.Y.S.2d 555 (4th Dep't 2001) (dismissing conversion claim where lessee mistakenly made additional payments that were not actually due); Zacharia v. Schlossberg, 187 N.Y.S.2d 15, 18, 187 N.Y.S8.2d 15 (Sup. Ct. N.Y. County 1959) (no conversion action lies “when there is no contractual or other legal obligation to return the identical funds allegedly converted, but a mere relationship of debtor and creditor exists between the parties™). The Complaint’s allegations demonstrate that plaintiff’ simply wants some unspecified portion of her money back. This allegation cannot support a conversion claim as a matter of law. Conversion is the “exercise of unauthorized dominion over the property of another in interference 10 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM 10 11 12 14 15 16 18 19 21 22 23 24 26 27 28 with a plaintiffs legal title or superior right of possession.” Lopresti v. Terwilliger, 126 F.3d 34, 41 (2d Cir. 1997) (citation omitted). To plead a cause of action for conversion, plaintiff must allege that “*(1) the property subject to conversion is a specific identifiable thing; (2) plaintiff had ownership, possession, or control over the property before its conversion; and (3) defendant exercised an unauthorized dominion over the thing in question, to the alteration of its condition or to the exclusion of the plaintiff s rights.” Moses v. Martin, 360 F.Supp.2d 533, 541 (S.D.N.Y. 2004). The conversion claim fails because plaintiff does not allege the existence cf a specific sum of money that should have been handled by defendants in a particular manner. “[I]t is well settled that an action will lie for the conversion of money where there is an obligation to return or otherwise treat in a particular manner the specific money in question, and such money can be described or identified in the same manner as a specific chattel,” G.D. Searle & Co. v. Medicore Comme'ns, Inc , 843 F. Supp. 895, 912 (S.D.N.Y. 1994) (citations omitted). “[M]oney can be the subject of conversion and a conversion action only when it can be described, identified, or segregated in the manner that a specific chattel can be.” Id; Columbia Marine Servs., Inc. v. Reffet Ltd., 861 F.2d 18, 23 (2d Cir. 1988) (“a mere claim that a sum of money, not specifically identifiable, has been paid out of general funds” is insufficient). Here, plaintiff does not allege that she was deprived of a specific sum; she merely alleges generally that she overpaid. That does . > . 2 not make a claim for conversion.” N > The same result is mandated by California law, McKell v. Washington Mur, Inc., 142 Cal. App. 4th 1457, 1467, 49 Cal. Rptr. 3d 227, 236 (2006) (sustaining demur to a conversion claim where the conversion claim was based upon defendant overcharging for the services and refusing to provide a refund; and observing that “[p]laintiffs cite no authority for the proposition that a cause of action for conversion may be based on an overcharge™); Kim v. Westmoore Partners, Inc., 201 Cal. App. 4th 267, 284, 133 Cal. Rptr. 3d 774, 789 (2011) (citation and quotation omitted) (“Money cannot be the subject of a cause of action for conversion unless there is a specific, identifiable sum involved, such as where an agent accepts a sum of money to be paid to another and [ails to make the payment”). 11 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM No ro > 2 on J. The Seventh Cause of Action for Negligence fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cov. Proc. § 430.10(e). It is unclear why plaintiff asserts one cause of action for negligence, then a second separate cause of action, based on the same allegations, for professional malpractice. The cause of action for negligence is improper because professional malpractice, as opposed to ordinary negligence, is the appropriate cause of action to bring against a professional who allegedly performed his or her professional duties negligently. Calcutti v. SBU, Inc., 224 F. Supp. 2d 691, 700 (S.D.N.Y. 2002) (citation omitted). The negligence count should be dismissed as redundant. ATC Healthcare Inc. v. Goldstein, Golub & Kessler LLP, 28 Misc. 3d 1237(A), 958 N.Y.S.2d 59 (Sup. Ct. Nassau County 2009) (“where the allegations ... negligence are premised on the same allegations of a professional’s failure to exercise duc care or to abide by general professional standards that give rise to a professional malpractice claim, the claims for ... negligence will be dismissed as being duplicative”). K. The Eighth Cause of Action for Accounting fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cov, Proc. § 430.10(e). Because accountants are not fiduciaries of their clients, plaintiffs claim for an accounting fails. “The right to an accounting is premised upon the existence of a confidential or fiduciary relationship and a breach of the duty imposed by that relationship respecting property in which the party seeking the accounting has an interest.” Cir. for Rehabilitation and Nursing at Birchwood, LLC v. S & L Birchwood, LLC, 92 A.D.3d 711, 713, 939 N.Y.S.2d 78 (2d Dep't 2012)(citation omitted). With the dismissal of the claim for breach of liduciary duty, the claim for an accounting . i also fails, 2 Similarly, under California law, an accounting is a remedy and not a separate and distinct cause of action. Any “right to accounting is derivative and depends on the validity of a plaintiff’s underlying claims.” Zepeda v. Paypal, Inc., 777 F. Supp. 2d 1215, 1221(N.D. Cal. 2011) (internal brackets and quotations omitted). Here, plaintiff has failed to plead any claim where an accounting would be needed, and her accounting claim should be dismissed with prejudice. 12 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM wn ES S 2 ro OO © 93 oO In addition, even if there was a fiduciary relationship (and there is not), at most plaintiff has stated a claim for damages on the theory that the Agreements were breached and she was over- charged. That does not entitle one to an accounting. Bouley v. Bouley, 19 A.D.3d 1049, 1051, 797 N.Y.S.2d 221 (4th Dep't 2005) (“Plaintiff fails to allege ... that he has entrusted money or property to defendant, nor does he allege that defendant holds money or property with respect to which he owes a duty of accounting to plaintiff. We thus conclude that plaintiff has alleged sufficient facts to entitle him only to monetary damages”) (citations omitted); Sanshoe Trading Corp. v. Mitsubishi Intern. Corp., 122 Misc. 2d 585, 587 (Sup. Ct. N.Y. Cty. 1984) (“The mere fact that the proceeds from the sale of the footwear were collected and were to be distributed by the defendants and that the plaintiff is unaware of the exact amount to which he is entitled does not make the defendants fiduciaries” justifying the equitable relief of an accounting ), aff’d, 104 A.D.2d 337 (1st Dep’t 1984). L. The Ninth Cause of Action for Professional Negligence fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cov, Proc. § 430.10(e). Plaintiff alleges that defendants performed accounting work for her “beginning in the early (sic) 2009.” (Complaint § 5). Plaintiff then alleges wrongdoing generally, but does not specify the date of any supposed wrongdoing. In specific, plaintiff alleges in general terms that defendants “negligently and erroneously liled her tax returns, causing her new CPA to incur additional time and expense to rectify and remedy the returns.” (Complaint § 73). Plaintiff gives no details concerning this claim, such as the year of the return, the type supposed error, the date of the alleged error, or when discovered it. “A cause of action charging that a professional failed to perform services with due care and in accordance with the recognized and accepted practices of the profession is governed by the three-year Statute of Limitations applicable to negligence actions (see, CPLR 214[6] ). A malpractice cause of action sounds in tort and, therefore, absent fraud, accrues when an injury occurs, even if the aggrieved party is then ignorant of the wrong or injury.” Ackerman v. Price Waterhouse, 84 N.Y.2d 535, 541 (1994)(citations omitted). 13 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS. MARCUM LLP AND STAN LAM 1 Thus, under New York law, any professional negligence claims based on events that 2 | occurred before January 19, 2013 are barred by the three-year statute of limitations. Because 3 | plaintiff has not specifically alleged any wrongdoing occurring within three years of her filing the 4 | Complaint on January 19, 2016, the claim should be dismissed as time-barred. > M. The Tenth Cause of Action for Conspiracy to Commit Fraud fails to 6 state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cov. Proc. § 430.10(¢). E In its claim for conspiracy to commit fraud, the Complaint broadly alleges that ° “Defendants” falsely promised they were capable of handling plaintiff's accounting services and ’ that they would not overcharge her. (Complaint 4 77-78). The Complaint groups within the ’ definition of “Defendants” each of: Mr. Lam (a partner of Marcum); the entity Marcum; and a unspecified, fictitious “DOE Defendants” who were allegedly acting within the scope of their B agency or employment with Marcum. (Complaint §Y 10-11). = Plaintift’s cause of action alleging conspiracy should be dismissed because of the ¢ “intracorporale conspiracy doctrine,” which provides (hat “the officers, agents, and employees of a . single corporate , . . entity, each acting within the scope of his or her employment, are legally B incapable of conspiring with each other.” Rodriguez v. City of New York, No, 05 Civ. 5117 (JFB), kl 2008 WL 420015, at *25 (E.D.N.Y. Feb. 11, 2005) (citing Farbstein v. Hicksville Pub. Library, . 254 FF. App’x 50, 51 (2d Cir. 2007) (affirming dismissal of a conspiracy claim “at the first step of h analysis” because the complaint made reference only to employees of same corporation); . MecPartland v. American Broadcasting Companies, Inc., 623 F.Supp. 1334, 1340 {(S.D.N.Y.1985) ; (invoking the doctrine with respect to a corporation, directors, officers, and employees); Lewis v. Bh Friedman-Marks Clothing Co., 70 A.D.2d 866, 866, 418 N.Y.S.2d 60 (1st Dep't 1979) y (dismissing conspiracy claims against individual defendants and the corporation because “[iJt is a 25 26 ) Under California law, the two year statute of limitations applies to the claim of 27 | professional negligence. Cal. Civ. Proc. Code § 339(1). 28 14 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM tenet basic to our law that no one may conspire with himself.”).” Plaintiff’s conspiracy claim should be dismissed because Marcum cannot conspire with its employees as a matter of law. N. The Eleventh Cause of Action for Intentional Infliction of Emotional Distress fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cav. Proc. § 430.10(e). A claim of intentional infliction of emotional distress must include four elements: “that the defendants (1) engaged in extreme and outrageous conduct; (2) with the intent to cause severe emotional distress; (3) with a causal connection between the conduct and the injury; and (4) severe emotional distress.” Alexander v. Westbury Union Free School Dist., 829 F.Supp.2d 89, 111 (E.D.N.Y. 2011) (citation omitted). The complaint alleges no facts which could be grounds for an inference of intent to cause plaintiff severe emotional distress through the alleged over-billing. In addition, plaintiff does not allege “severe emotional distress.” To the contrary, plaintiff merely alleges that she generally suffered distress and anguish including “disturbing mental reactions such as fright, nervousness, [and] grief. . .” because defendants allegedly overbilled her (Complaint § 89), and such allegations are insufficient to state a claim. 0. The Twelfth Causc of Action for Negligent Infliction of Emotional Distress fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cov, Proc. § 430.10(c). Similarly, to state a claim [or negligent infliction of emotional distress, a plaintiff must allege: (1) a breach of the duty of care; (2) that results in a mental injury that “is a direct, rather than a consequential,” result of the breach; and (3) the claim “possesses some guarantee of genuineness.” Taggart v. Costabile, 131 A.D.3d 243, 255-256, 14 N.Y.S.3d 388 (2d Dep’t 2015) (citations omitted). Generally, a contractual relationship does not give rise to a duty which can form the basis for liability for negligent infliction of emational distress. See Baumann v. Hanover 8 Similarly, “[i]t has long been the rule in California that *[a]gents and employees of a corporation cannot conspire with their corporate principal or employer where they act in their official capacities on behalf of the corporation and not as individuals for their individual advantage.” Black v. Bank of Am., 30 Cal. App. 4th 1, 6, 35 Cal. Rptr. 2d 725, 729 (1994) (citations omitted). ) Moreover, California law does not generally recognize a cause of action for emotional distress, as pled here, stemming solely from a financial loss. Taguinod v. World Sav, Bank, FSB, 755 F. Supp. 2d 1064, 1074 (C.D. Cal. 2010). 15 NOTICE OF DEMURRIER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM No Cmity. Bank, 100 A.D.3d 814, 816, 957 N.Y.S.2d 111 (2012) (finding a duty did not exist to support a negligent infliction ol emotional distress claim involving borrower and a bank). Moreover, the required “guarantee of genuineness” may be satisfied, unlike here, “where the particular type of negligence is recognized as providing an assurance of genuineness, as in cases involving the mishandling of a corpse or the transmission of false information that a parent or child had died.” /d. Additionally, although physical injury is not a necessary element, “the guarantee of genuineness ‘generally requires that the breach of the duty owed directly to the injured party must have at least endangered the plaintiff’s physical safety or caused the plaintiff to fear for his or her own physical safety.” Jd 7 Plaintiff does not allege that her physical safety was in jeopardy. III. CONCLUSION Defendants Marcum LLP and Stan Lam respectfully request that the Court sustain their demurrer in its entirety without leave to amend. Dated: February 26, 2016 ZUKERMAN GORE BRANDEIS & CROSSMAN, LLP gun ; = By: Cc BN en Frank C. Welzer California law also provides that ““[r]ecovery for emotional distress in negligence cases is generally not available ‘unless malice, breach of a fiduciary duty, physical injury or impact, or some other unusually extreme or outrageous circumstance, can be shown, . .. such asa crematorium mishandling the remains of plaintiffs’ close relative.” Varnado v. Midland Funding LLC, 43 TF. Supp. 3d 985, 990 (N.D. Cal. 2014) (holding that unfair debt collection practices are insufficient lo state a claim). Additionally, California law does not recognize the independent tort of negligent infliction of emotional distress. /d. Rather, “[n]egligent infliction of emotional distress is a form of the tort of negligence, to which the elements of duty, breach of duty, causation and damages apply.” /d. And California law does not generally recognize a cause of action for emotional distress stemming solely from a [inancial loss. Taguinod v. World Sav. Bank, FSB, 755 F. Supp. 2d 164, 1074 (C.D. Cal. 2010). 16 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM ~~ S N Wu» B w o N PROOF OF SERVICE STATE OF NEW YORK COUNTY OF NEW YORK - N r a Sa I am employed in the County of New York, State of New York. | am over the age of 18 and not a party to the within action. My business address is Zukerman Gore Brandeis & Crossman, LLP, Eleven Times Square, New York, New York, 10036. Of February 26, 2016. | served the forgoing documents(s) described as NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS MARCUM LLP AND STAN LAM; DECLARATION OF FRANK C. WELZER IN SUPPORT OF DEFENDANTS’ DEMURRER (with cxhibits); DEFENDANTS’ OUT OF STATE CASES CITED IN SUPPORT OF THEIR DEMURRER on the interested parties in this action: by facsimile transmission __.m. pursuant to Rule 2008 of the California Rules of Court, | transmitted a true copy thereof to the fax number(s) as stated below. The telephone number of the sending facsimile machine was A transmission report was properly issued by the sending facsimile machine, and the transmission was reported as complete and without error, AND by placing the true copies thereof enclosed in sealed envelope(s) addressed as stated in the attached mailing list, __X__by placing a true copy thereof enclosed in sealed envelope(s) addressed as follows: SEE ATTACHED SERVICE LIST BY FACSIMILE I caused such envelope(s) to be delivered by hand to the office(s) al the addresses as follows: BY MAIL I am readily familiar with the firm's practice of collection and processing documents for mailing. It is deposited with the U.S. postal service on that same day in the ordinary course of business. | am aware that on motion of any party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing an affidavit. ~~ X__ BY OVERNIGHT by depositing one complete set of copies of the document in a box or other facility regularly maintained by the express service carrier, or by delivering them to an authorized courier or driver authorized by the express service carrier to receive documents, in an envelope or package designated by the express service carrier with delivery fees paid or provided for, addressed to: SEE ATTACHED SERVICE LIST BY EMAIL At the email address associated with the attorney. _ X__ STATE 1declare under penalty of perjury under the laws of the State of California that the above is true and correct, FEDERAL 1 declare that | am employed in the office of a member of the bar of this Court at whose direction the service was made, OO OO OX N N N nn e w 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Executed on February 26, 2016, at New York, New York. en FRANK C. WELZER, Declarant SERVICE LIST Sherri S. Shafizadeh, Esq. Law Offices of Sherri S. Shafizadeh 4 Park Plaza, Suite 1100 Irvine, CA 92614 ExaisiT B OO © ~~ O N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 JOHN M. HAMILTON (SBN 155381) HAMILTON LAW OFFICES 5757 W. Century Blvd., Suite 700 Los Angeles, California 90045 Telephone: (310) 348-2938 Facsimile: (310) 348-7288 FRANK C. WELZER (SBN 155403) ZUKERMAN GORE BRANDEIS & CROSSMAN, LLP Eleven Times Square New York, New York 10036 Telephone: (212) 223-6700 Facsimile: (212) 223-6433 Attorneys for Defendants Marcum LLP and Stan Lam ELECTRONICALLY FILED Superior Court of California, County of Orange 0TM4/2016 st 01:33:00 Phd Clerk of the Superior Court By Diana Cuevas, Deputy Clerk SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ORANGE-CENTRAL JUSTICE CENTER LESLIE A. ANDREWS, Plaintiff, v. MARCUM LLP, a limited liability partnership; STAN LAM, an individual; and DOES 1 through 100, inclusive, Defendants. CASE NO.: 30-2016-00830847 ASSIGNED FOR ALL PURPOSES TO: JUDGE: James J, Di Cesare DEPT: C16 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS MARCUM LLP AND STAN LAM [Filed Concurrently With Motion To Dismiss] Code of Civ, Proc. §430.10(e) Court Reservation No. 72409093 Date: August 25, 2016 Time: 1:30 p.m. Dept: C16 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD HEREIN: PLEASE TAKE NOTICE that on August 25, 2016, at 1:30 p.m., or as soon thereafter w Oo 0 N N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 as this matter may be heard in Department C16 of the Orange County Superior Court, Central Justice Center, located at 700 Civic Center Drive West, Santa Ana, California, 92701, defendants Marcum LLP and Stan Lam will bring on for hearing the appended demurrer to the plaintiff's First through Twelfth causes of action in the First Amended Complaint on file herein, on the grounds set forth in the attached demurrer and supporting memorandum of points and authorities. This Demurer is brought pursuant to Code of Civ. Proc. § 430.10(¢), and is based on this Notice, the accompanying Demurrer and Memorandum of Points and Authorities, the Declaration of Frank C. Welzer (including Code of Civ. Proc. § 430.41(a)(3)(A) statement) with its exhibits, all records, papers and pleadings on file in this action, such oral argument as may be presented at the hearing of this motion, and all matters of which the Court may take judicial notice. Dated: July 14, 2016 ZUKERMAN GORE BRANDEIS & CROSSMAN, LLP By: J sr _ Frank C. Welzer Attorneys for Defendants Marcum LLP and Stan Lam 2 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM OO © 3 Oo »u BH 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 II. INTRODUCTION LEGAL ARGUMENT A. B. TABLE OF CONTENTS Plaintiff's Claims Arise Under The Agreements; iiiicsssassssiissssion voioies The First Cause of Action for Financial Abuse of a Dependent Adult fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ. Proc. § 430.10(€). ....covviirivniniiinns The Second Cause of Action for Deceptive Acts against a Dependent Adult fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ. Proc. § BL Corenia isos ae Be The Third Cause of Action for Breach of Fiduciary Duty fails to state facts sufficient to constitute a cause of action and is subject to demiirrer under Code of Civ. Proe. § 430.100€).ucmscrsommmsnssmuserisigin The Fourth Cause of Action for Fraud fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Cv. Prog. § 330, J0(E) tcitirmmepvrrbivinipsp duis tom snm ens seissass vais ts ssi sensemmunesn The Fifth Cause of Action for Negligent Misrepresentation fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ. Proc. § 430.10(€)..c.crursrsesssvisusssssrsnrimesssvasasens The Sixth Cause of Action for Conversion fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ. Proc. § 430.10(€). isuismsasivsasssnsvsvsssosesmsnnsassarsensrssnspssses The Seventh Cause of Action for Negligence fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ. Prac. § 430.10(6€). ssvawsvmsmmmmensrmemmmpsnsnoimessiiss The Eighth Cause of Action for Accounting fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ. Proc. § 430.10(€). 1.c.cr.srvnspserssassssasssssssonsassasiopessaissntisnsess The Ninth Cause of Action for Professional Negligence fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ. Proc. § 430.10(€)..cccccivrivmminiinieiinmiinnninininiaiins The Tenth Cause of Action for Conspiracy to Commit Fraud fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ. Proc. § 430.10(€)....c.coveeveniivninsvimmarisinenianins The Eleventh Cause of Action for Intentional Infliction of Emotional Distress fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ. Proc. § 430.10(€)........crevre. NEA EERE ean ah ga aE ada Eada aa he R aR ira aaa a a Nana T TTA R RRR RRR RANI R RRR bay ER Ee eee ese AE EEE PRET ARENT ATO eT EERE RRP TERA haart pr 4 - 6 SSH 9 - 13 iA 14 cans 15 0 NN Wn B R A W L BN \O 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 III. M. The Twelfth Cause of Action for Negligent Infliction of Emotional Distress fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ. Proc. § 430.10(€)..ecvvverniuiinns CONCLUSION cs i555 yssm05 ewes oyna mesos msss 505 Br SFE FR SHEA SESS ERAT RNB ii NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM © 9 oO 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Cases Ackerman v. Price Waterhouse, 84 N.Y 2d 535 (1998) «cpnsenonis tins smommsciassmainiessnss dvi simone sss suaisis ois ius aries Alexander v. Westbury Union Free School Dist. , 829 F.Supp. 2d 8D [E.D.N.Y. 2011) ammonia ATC Healthcare Inc. v. Goldstein, Golub & Kessler LLP, 28 Misc, 3d 1237(A) (Sup. Ct. Nassau County 2009) ... cuwscecrssesmsmsonsssmmmunnonssssensssspsmess Baumann v. Hanover Cmty. Bank, 100 A.D.3d 814 (201) iiuiscuussmisossnimmmsuamssmsmmsssimmmmomnsmussmmsasssrios 55s my issies Bd. of Trustees of IBEW Local 43 Elec. Contractors Health and Welfare, Annuity and Pension Funds v. D'Arcangelo & Co., LLP, 124 A.D.3d 1358 (Ath Dep't FULT) emma pasesissoasmon dosisosvamssimmpassrenshissbosion Black v. Bank of Am., 30 Cal. App. 4th 1 (1994) ruvecsersasesnsassssassssssnsssisssansasonsanissssntousssnsasisionsronssnissnsssssionsaasisss Bouley v. Bouley, 19 AD:3d 1049 (4th Dep't 2005) suisisimessssisssosbsionsivssiiosasnisssosssessissibesesoss havesiammenssssons Cabral v. County of Glenn, GHLE. Bonn, 2d 1180 (ED, Cl 200 isms sem ns moses esos Calcutti v. SBU, Inc., 224 F, Supp. 2d 691 (S8.D.N.Y. 2002). ssssinussisssssssissssssnessassimssmmesosessmmeraonsmsssnssrsasnisoss Citipostal, Inc. v. Unistar Leasing, 283 A.D. 2d 616 ORE Dept 2001) ons vss evn Columbia Marine Servs., Inc. v. Reffet Ltd., 861 F.2d 18 {24 Cit, FO88 is ummonses oraipmstoisti spss webu iiss ioesssnest Sumas Committee on Children’s Television, Inc. v. General Foods Corp., 35 Cal.3d 197 (1983) .ccisurmssrsrsesnosersrasasasusneroppsasssasunsssasssssssssnsonspessssasnssnsissississsiosionssonssanses Ctr. for Rehabilitation and Nursing at Birchwood, LLC v. § & L Birchwood, LLC, 92. AD3d 711 (2d Dept 2012) .....cvucmisisinsimsnsiugiiisosinvivesiingssismimsa isis menses DG Liquidation, Inc. v. Anchin, Block & Anchin, HRI TH TO (1 SEIS BROUID sscesossmsissssnss G00 HSE RINSE OSA Farbstein v. Hicksville Pub. Library, 254 F. App’X 50 (2d Cir. 2007) ......coivississssssssisssnissaronsrsnsonsssesansnssssssassnsonsasssnssssbsssonsarsssis Ferro Fabricators, Inc. v. 1807-1811 Park Ave. Dev. Corp., 127 A.D.3d 479 (15t Dep’t 2015), ..cusissssnssssrsonasasrsnsensassonsasssssssapsonspissaspadassossassisansissasess iii NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM OO 0 NN YN L i B A W ND N O N N O N NN N N N N mm e m e t e m e m e a e a e a p m 0 0 NN O N nh A L N D = O D E N N O N B Y R A E N - oO Friedman v. Anderson, 23 £:.D.34 163 (18: Dept 2005) scvomsnmenmamanmummos osama 9,17 G.D. Searle & Co. v. Medicore Commc'ns, Inc., 843 F. Supp. 895 (S.D.IN.Y. 1994).....c.cuusrsmemmsrpsasssnrusspsesssnsnessssnsssnssnsaobisssososansassasonssionss 14 Gregor v. Rossi, 120 A.1).3d 447 (18t Dep’t 2014) ...mrenmesssrepisissispmssnsissasins soo ouasndses sass psis ipemsioiiassionnsy 12 Lazar v. Superior Court, 12 Cal Ath 631 (1998) .....cuummurisssmrmiaiisissmimimir ins iat Sissi inans 10 Lewis v. Friedman-Marks Clothing Co., 70 A.D.2d 866 (15t DEP t 1 DTD) nsumnisisiin iviuessiansiasssnssis oasis oss ssbosssinss sus dues srs snis ecm 17 Lopresti v. Terwilliger, 126 F.3d 34 [2d Cir. 1997) ussite sadness sss orn igrssessos 13 Mackey Reed Elec., Inc. v. Morrone & Assoc., P.C., 125 A.D.3d 822 (24D t 201 5)uccarmmimnssomsmsmimesmsissmseosemomss s asmast sryms sm sasss 10, 12 Marine Midland Bank v. John E. Russo Produce Co., 65 A.D. 2d. 550 {1 978) ccm arn sae ae 13 McKell v. Washington Mut., Inc., 142 Cal. App. 4th 1457 (2006) weresrssasurerrsasssasssssssaresssessessisassessonsensasosisssnsssassarvussssdsisssnsiasia 14 McPartland v. American Broadcasting Companies, Inc., 623 F.Supp. 1334 (S.D.N.Y, 1985) useessesssesssssssusavorasissssossivsssspsssasinssssaisnasisessisisnsassssrocrasss 17 Michaan v. Gazebo Horticultural, Inc., 117 A. D.3d 692 (2d Dep't 2014) iimimmmsssinsiinsiiassiviissesimesssi sa asec 10 Moses v. Martin, 360 F.Supp.2d 533 (S.D.N.Y. 2004).......cccimummimmnumrinninerernsnssnssmsensanismsssssasssnpssssssgsnsrssons 14 Rodriquez v. City of New York, No. 05 Civ. 5117 (JFB), 2008 WL 420015 (E.D.N.Y. Feb. 11, 2005)......ccceeerururinmrrniinnns 17 Sanshoe Trading Corp. v. Mitsubishi Intern. Corp., 122 Mise. 2d 585 (Sup: Ct. N.Y. Cty. 198%) cvuscsermmmarossrosvasnrospsonsssnssssispossssrioissoassssasiposs 16 Smith, Valentino & Smith, Inc. v. Superior Ct., 17 Cal. 3d 491 (1976) suisivssisersssnssessumssssreusssressransenssromorssnsssssssosssssnsisnsessasassanssssissiisnsosins 4 Taggart v. Costabile, 131 AD:3d243 N,Y.S.3d 388 (2d Dep't 201 5) w..asismssimiusmissssmncssisnson dvsan swisss cos a smnensss 18 Taguinod v. World Sav. Bank, 755 F. Supp. 2d 1065 (C.D. Cal. 2010) ....ccoiimmimssisimrarmmsinisssisisisismsssrsusmssisassssassessasasarsasiss 6 Varnado v. Midland Funding LLC, 43 F. Supp. 3d 985 (N.D. Cal. 2014) ......cccovimevsusisnisnimanansunmsssessrmssmusmsississimasssss 19 iv NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM OO © 3 O N n n Ba W N N N O N N N O N N N NN N o e a e a e m p m a a e a a p a © N N A hh B A W = O V N N W N -~ Oo Wilhelm. v. Pray, Price, Williams & Russell, 186 Cal, App.3d 1324 (1986). num csv uss ps seis ove 10 Zepeda v. Paypal, Inc., 777 F000: 2d 1215 IND, Cal. 201 wasesmsnacemmonmmmeemssmmmpaimsp anise d 15 Statutes Cal. Welt, & Inst, Code § 15610.30....smmmroommmesssssamsssons manning ah ais aioaiosivassts oxisswinssiios 6,7 Code of Civ, Prov. § 3391)... rrremmarsssioss uppupensassss sonmsmasisss roa bauismss iwissssesin is sss so Savon 10, 16 Code of Civ. Proc. § 418. 10{8)(2)ssssssesscssscssssasarssssnrsssnsss sovuas nsonsasinsions samiisons soissami asiiaiaamms s emo 3 Code of Civ, Prac. § A30A108) oionsims sis miiibssss sommes sais srs crosses os sess isos paavan Hasns 3 Code of Civ. Proc. § 10,3008) v..ovaesssivissssinnssnsnsiassisaiissssissasstsahssssismn bas ss simsios n 9 Code of Civ. Proc. § 430, 1006) cssusasvessisivisissesississatssiiss irom isan csmsismotissas pS ssisas vi ess passim CIvIl COE § 334 1s nssesesss feo esiabiits sss asst asada ass sass HE EEN EAN RAE SHAS BMRA ESSAY 9 v NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM 10 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 23 28 DEMURRER TO FIRST AMENDED COMPLAINT Defendants Marcum LLP and Stan Lam hereby demur to the First Amended Complaint (the “FAC”) on each of the following grounds: action. action. action. action, action. action. action. action. Demurrer to First Cause of Action 1. The First Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. $ 430.10(e). Demurrer to Second Cause of Action 1. The Second Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(¢). Demurrer to Third Cause of Action 1. The Third Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(e). Demurrer to Fourth Cause of Action 1. The Fourth Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(¢). Demurrer to Fifth Cause of Action 1. The Fifth Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(e). Demurrer to Sixth Cause of Action 1. The Sixth Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(e). Demurrer to Seventh Cause of Action 1. The Seventh Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(e). Demurrer to Eighth Cause of Action 1. The Eighth Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(¢). XX 9 h n W wW DN O O 11 12 13 14 13 16 17 18 19 20 21 22 23 24 25 26 27 28 action. action, action, action. Dated: Demurrer to Ninth Cause of Action 1. The Ninth Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(e). Demurrer to Tenth Cause of Action 1. The Tenth Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(e). Demurrer to Eleventh Cause of Action 1. The Eleventh Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(e). Demurrer to Twelfth Cause of Action 1. The Twelfth Cause of Action fails to state facts sufficient to constitute a cause of Code of Civ. Proc. § 430.10(e). July 14,2016 ZUKERMAN GORE BRANDEIS & CROSSMAN, LLP ms a By C&T 22 Frank C. Welzér Attorneys for Defendants Marcum LLP and Stan Lam 2 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM Ww OO 0 0 9 OO 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES L INTRODUCTION Leslie Andrews (“Andrews”) owes Marcum LLP (“Marcum”) more than $110,000 for accounting services rendered. The relationship between Marcum, the accounting firm, and Andrews, its client, is governed by written agreements. In accordance with the exclusive forum selection clause in the agreements, Marcum has filed suit against Andrews in New York. In an attempt to re-cast herself as “plaintiff” and avoid a lawsuit against her in the agreed- upon forum of New York, Andrews violated the mandatory forum selection clause by filing her Complaint in Orange County. Immediately prior to filing this demurrer, Marcum LLP and Stan Lam filed a motion to dismiss pursuant to Code of Civ. Proc. §§ 410.30(a) and 418.10(a)(2) because venue in California is improper. This is plaintiff's second attempt to state facts sufficient to constitute a cause of action in a complaint. In response to plaintiff's original complaint, defendants filed: (a) a motion to dismiss based on the New York forum selection clause, and (b) a demurrer. On June 2, 2016, the Court sustained defendants’ demurrer with leave to amend. Plaintiff now proceeds under her First Amended Complaint (the “FAC”). Prior to filing this motion, and in accordance with Code of Civ. Proc. § 430.41(a), the undersigned engaged in meet and confer efforts with plaintiff’s counsel, during which the undersigned walked through the issues in this demurrer with specific reference to the pleading deficiencies discussed herein, The parties did not reach an agreement resolving the objections raised in the demurrer. Given the exclusive New York forum selection clause, this Court need not decide the issues presented in this demurrer as to the impropriety of plaintiff’s claims, because they can be addressed by the court in New York if Andrews chooses to assert counter-claims in the lawsuit pending against her in New York. In an abundance of caution, defendants file this demurrer now, so that in the unlikely event that Andrews’ case is not dismissed in light of the exclusive New York forum selection clause, the impropriety of Andrews’ supposed claims is addressed at the outset by demurrer. 3 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM S O c o N N D N 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 II. LEGAL ARGUMENT A, Plaintiff’s Claims Arise Under The Agreements. Marcum is an accounting firm with its headquarters in New York. Each of the three agreements governing the relationship between Andrews and Marcum contain a broad provision requiring disputes to be resolved in New York and under New York laws. The agreements each state that: “The terms and provisions of this engagement letter, any course of conduct, course of dealing and/or action of this Firm and/or [Andrews] and our relationship with you shall be governed by the laws of the State of New York...” Exhibits A, B, and C to Declaration of Frank Welzer (the “Agreements”), at Attachment A, § 11. “Such choice of law provisions are usually respected by California courts.” Smith, Valentino & Smith, Inc. v. Superior Ct., 17 Cal. 3d 491, 494 (1976) (upholding forum selection clause under law of state set forth in agreement) (citation omitted). For completeness, where applicable, defendants have also discussed California law to show that the result is the same. The FAC takes issue only with work that defendants performed in 2014, after the execution of the Agreements on February 26, 2014, which marked the beginning of the plaintiff’s engagement of Marcum. In particular, the FAC alleges ten specific acts of wrongdoing in 2014, after the parties entered into the Agreements, as follows: o “Defendants’ 2014 invoices reflected multiple Marcum personnel billing...” and “ a ‘team billing approach’ (FAC 21(A); e “Marcum’s 2014 Unreasonable and Excessive Invoices” regarding Sunset Ranch, Ltd, (FAC 21(B)); e 4.75 hours for accounting services billed “[i]n June, 2014” for Tustin Construction Co. (FAC §21(C)); o $19,880 billed “in 2014” for preparation of state and federal tax returns for three limited partnerships (FAC § 21(D)); I" The FAC is attached to the Welzer Declaration as Exh. D. 4 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN [LAM Ww o e J O ° \O 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 e 5.5 hours in work performed on October 20, 2014 and November 3, 2015 (sic) (FAC § 21(E)); o 4.8 hours of work billed on November 21, 2014 (FAC 21(F)); * 6.6 hours of work performed on October 8 and 9, 2014 (FAC § 21(G)); e 1.4 hours billed on November 24, 2014 (FAC § 21(H)); « four tenths of an hour billed after a November 24, 2014 meeting (FAC § 21(I)); and e 2.5 hours billed on July 2, 2014 (FAC § 21(J)). Apart from these ten allegations regarding alleged overbillings in 2014, the FAC alleges no other specific acts of misconduct. The above-listed entries in Marcum’s 2014 invoices constitute the basis for each of the twelve causes of action that follow. Each cause of action incorporates by reference the specific allegations in FAC § 21(A)-(J). FAC at 29, 42, 45, 51, 58, 64, 68, 74,77, 84, 94 and 100. Furthermore, in the fourth cause of action for fraud, plaintiff alleges that “[t]hese invoices are fraudulent as explained above.” FAC § 52. Likewise, in the fifth cause of action for negligent misrepresentation, plaintiff alleges that “[t]hese invoices are fraudulent as explained above.” FAC 959. And in the sixth cause of action for conversion, plaintiff alleges that “[t]hese invoices are fraudulent as explained above.” FAC 59. Similarly, the seventh cause of action for negligence is “[b]ased on the events described above...” FAC { 71. The FAC leaves no doubt that its claims arise under the Agreements, as the FAC expressly challenges the forum selection clauses contained in these Agreements by alleging, at the outset, that “Defendants’ forum selection clauses in their retainer agreements is unenforceable...” FAC at 7 6-7. During pre-motion meet and confer efforts, defense counsel pointed this out and asked plaintiff's counsel if they could point to any alleged wrongdoing that preceded February 2014, and plaintiff’s counsel could not. Even if plaintiff had alleged any pre-February 2014 alleged misconduct - and she has not - the Agreements contain merger clauses indicating that the Agreements comprise “the complete and exclusive” agreements between the parties and “supersede” all written or oral proposals and communications between the parties. “Because the contract says it is the entire agreement, 5 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM H W O N ~ N O N W n 10 11 12 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 common sense dictates that it supersedes other prior agreements.” Grey v. Am. Mgt. Services, 204 Cal. App. 4th 803, 807-08 (2012). Thus, it is clear that plaintiff's claims arise from, relate to, or are in connection with the engagement letters, and that by agreement, these disputes shall be resolved in New York under New York law. B. The First Cause of Action for Financial Abuse of a Dependent Adult fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ. Proc. § 430.10(e). Statutory causes of action must be pleaded with particularity. Covenant Care, Inc. v. Superior Court , (2004) 32 Cal.4th 771, 790, 11 Cal.Rptr.3d 222, 236, 86 P.3d 290, 301 (2004). In her FAC, in order to address a deficiency in her initial complaint, the plaintiff identified the specific allegedly abusive conduct - alleged overbilling - to an extent not done in her original complaint. In her original complaint, plaintiff alleged generally that defendants “provided fraudulent invoices,” “excessively overcharged,” “intentionally concealed all such excess fees and transactions,” “failed to competently work as a CPA,” and “engaged in a fraudulent scheme.” In recognition that such conclusory allegations lack the specificity required in order to state a claim for dependent adult abuse,’ plaintiff amended her complaint and specified the bills that she is challenging. As discussed supra, the billings at issue were issued in 2014. However, the FAC still fails to plead facts sufficient to show that plaintiff is a “dependent adult” within the meaning of the statute, Cal. Welf. & Inst. Code § 15610.30. The statute defines a “dependent adult” as a person “between the ages of 18 and 64 years ... who has physical or mental limitations that restrict his or her ability to carry out normal activities or to protect his or her rights, including, but not limited to, persons who have physical or developmental disabilities, or whose physical or mental abilities have diminished because of age” and persons who are “admitted as an inpatient to a 24-hour health facility.” Cal. Welf. & Inst. Code § 15610.23. > Taguinod v. World Sav. Bank, 755 F. Supp. 2d 1065, 1074 (C.D. Cal. 2010) (dismissing complaint where plaintiffs failed “to identify how Defendant has violated the referenced California statutes” and to state with sufficient specificity “what actions taken by Defendants constituted such elder financial abuse within the purview of the statutes™). 6 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM A L N S S LO c e 3 O N Wn 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 In construing the term “dependent adults,” courts look to the legislative history of § 15610.30, which indicates that its major objective “was the protection of residents of nursing homes and other health care facilities” and that “[w]hile the definition of ‘dependent adult’ is not limited to persons living in such facilities, it reasonably should extend only to persons whose disabilities and needs are comparable to persons who are compelled to live in nursing homes and other health care facilities.” Cabral v. County of Glenn, 624 F. Supp. 2d 1184, 1194 (E.D. Cal 2009) (citations omitted), quoting from Delaney v. Baker, 20 Cal. 4th 23, 82 Cal.Rptr.2d 610, 971 P.2d 986 (1999). In Cabral, the court addressed this legislative history, and then cited to an unpublished appellate court decision finding the plaintiff not to be a “dependent adult” despite the fact “he was 56 years of age, was blind in one eye and partially blind in the other eye, suffered from posttraumatic stress disorder, was disabled due to his medical and psychiatric problems, suffered from neurological ‘sequelae’ from a rifle wound to the head, was facially disfigured and had been rated as 100 percent disabled by the United States Department of Veterans Affairs.” Id. at 1194. The court then dismissed the claim of dependent adult abuse before it, because “[a]side from allegations that he was mentally ill and psychotic,” plaintiff made only conclusory assertions that “[a]t all relevant times” he “was a dependent adult.” Id. at 1195. Conversely, a 77 year old woman who was no longer walking, needed assistance with most activities of daily living including cooking, banking, bathing, and toileting, was found to be a dependent adult. Estate of Shinkle , 97 Cal. App.4th 990, 1005, 119 Cal.Rptr.2d 42, 53 (2002), disapproved of on other grounds by Bernard v. Foley, 39 Cal.4th 794, 47 Cal .Rptr.3d 248, 139 P.3d 1196 (2006). Here, the FAC alleges that plaintiff “is a disabled person because she is a person with an actual and/or perceived mental disability, i.e. bipolar disorder, anxiety and depression” and that “[at] all relevant times, Ms. Andrews’ mental impairments affected her immunological and neurological body systems, and limited her ability to participate in major life activities,” (FAC 1). However, the FAC does not allege that plaintiff lives under the care of another or that she is unable to care for herself (such as in matters of banking, cooking, bathing and toileting). Rather, as in Cabral, plaintiff makes only the conclusory assertions that that plaintiff “had mental 7 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM ~ OO 0 3 O N Wn 10 11 12 13 14 15 16 17 18 19 20 21 2 23 24 25 26 27 28 limitations that restricted [her] ability to carry out normal activities,” and, as in Cabral, “[t]hese allegations are simply insufficient to establish that Plaintiff was a dependent adult as that term is used in the Elder Abuse Act.” Cabral, 624 F. Supp. 2d at 1195. The FAC makes a general allegation about plaintiff having a “caregiver during the week” to “assist her with most activities...” (FAC § 1). Given the statute’s objective to protect “residents of nursing homes and other health care facilities,” this general allegation is insufficient to adequately allege that plaintiff was a dependent adult as that term is used in the Elder Abuse Act. For example, and as pointed out to plaintiff's counsel during the meet and confer process, the FAC does not allege whether the “caregiver” is a medical or health care professional. It is not uncommon for person of relative means to hire assistants. Something more is needed before plaintiff can be considered “dependent” akin to a person who is compelled to live in a nursing home or similar health care facility, The FAC does not allege when the caregiver was first retained. The FAC speaks most often in the present tense: that plaintiff “has a caregiver.” (FAC 1).> However, the FAC does not allege that plaintiff had a caregiver during the time that Marcum provided the questioned accounting services. Naturally, if plaintiff retained the caregiver only after defendants pointed out the pleading inadequacies in their demurrer to her initial complaint, this would be fatal to plaintiff's claim. In addition, the FAC does not allege how much time the caregiver spent with plaintiff during the time of the alleged acts of misconduct. As the statute is designed to protect persons who are in nursing homes or similar health care facilities, is critical for the plaintiff to allege that she was cared for in a situation akin to that of a nursing home resident during the time of the alleged overbilling. The FAC does not contain such an allegation, and notwithstanding our pointing this out to the plaintiff’s counsel during the meet and confer process, plaintiff has declined to amend. This leads to the conclusion that plaintiff cannot make such an allegation in good faith, and that is why she has chosen not to make such an allegation in an amended complaint. 3 Indeed, the FAC most often speaks in the present tense (e.g., plaintiff “is a disabled person” and plaintiff “is an individual with a mental disability” (FAC 9 1, 12)). To state a claim, however, plaintiff must allege to have been disabled at the time of the alleged misconduct. 8 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM © LO 0 N N N Un BAA W N = B R O N O N N N O N N N O N OD N O N m= o m a p d p d w h p d md pe pe d pe a cc N N A N Un B W = C Y 0 0 N D Wn R W C. The Second Cause of Action for Deceptive Acts against a Dependent Adult fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ. Proc. § 430.10(¢). Plaintiff’s claims for deceptive acts against a dependent adult under Civil Code § 3345 fail because such claims are “not an independent cause of action and will only apply if Plaintiff [ ] successfully prove[s] liability under [another] claim.” Johnston v. Allstate Ins. Co., 13-CV-574- MMA BLM, 2013 WL 2285361, at *5 (S.D. Cal. May 23, 2013) (citations omitted). In addition, plaintiff’s second cause of action incorporates by reference and relies upon the allegations contained in her first cause of action, and suffers from the same pleading deficiencies as the first. Plaintiff has failed to properly plead that she is a “dependent adult” within the meaning of California Welfare and Institution Code § 15610.27 or California Civil Code § 3345. Thus, plaintiff’s second cause of action, seeking treble damages under Civil Code § 3345, should be dismissed along with the first. D. The Third Cause of Action for Breach of Fiduciary Duty fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ. Proc. § 430.10(e). Plaintiff alleges that “[p]Jursuant to the business CPA/accountant-client relationship” and “by virtue of the relationship of confidence and trust between Ms. Andrews and Defendants as Ms, Andrews’ CPA and accountant, Defendants owed ... a fiduciary duty.” (FCA {4 13, 46). However, under New York law, there is no fiduciary relationship in general between an accountant and his client. DG Liquidation, Inc. v. Anchin, Block & Anchin, 300 A.D.2d 70, 70-71, 750 N.Y.S.2d 753 (1st Dep’t 2002) (dismissing breach of fiduciary duty claim “since the duty owed by an accountant to a client is generally not fiduciary in nature). “A conventional business relationship, without more, does not become a fiduciary relationship by mere allegation.” Friedman v. Anderson, 23 A.D.3d 163, 166, 803 N.Y,S.2d 514 (1st Dep’t 2005) (dismissing clients breach of fiduciary duty claim against accountants)(citation omitted). The cause of action for breach of fiduciary duty is also subject to dismissal because it is duplicative of the professional negligence cause of action, “since they arise from the same facts as those underlying the legal malpractice cause of action, and do not allege distinct damages.” 9 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM © 3 A N Un As W N Oo 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Mackey Reed Elec., Inc. v. Morrone & Assoc., P.C., 125 A.D.3d 822, 823, 6 N.Y.S.3d 65 (2d Dep’t 2015) (dismissing breach of fiduciary duty and fraud counts as duplicative of professional negligence cause of action).* E. The Fourth Cause of Action for Fraud fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ, Proc. § 430.10(e). Fraud must be pled with specificity. As set forth in N.Y, Civil Practice Law and Rules 3016(b): Fraud or mistake. Where a cause of action is based upon misrepresentation, fraud, mistake, willful deceit, breach of trust, or undue influence, the circumstances constituting the wrong shall be stated in detail. N.Y.C.P.L.R. 3016(b) (emphasis added). “To properly plead a cause of action to recover damages for fraud, a plaintiff must allege that (1) the defendant made a false representation of fact, (2) the defendant had knowledge of the falsity, (3) the misrepresentation was made in order to induce the plaintiff's reliance, (4) there was justifiable reliance on the part of the plaintiff, and (5) the plaintiff was injured by the reliance.” Michaan v. Gazebo Horticultural, Inc., 117 A.D.3d 692, 692, 985 N.Y.S.2d 601, 602 (2d Dep’t 2014) (affirming dismissal where “complaint asserted only in conclusory terms that the estimates provided by the defendants were too low, and failed to adequately plead facts from which it could be inferred that the defendants knew their estimates were false at the time they were provided”). The factual allegations describing each element of the claimed fraud must “be stated in detail.” N.Y. C.P.L.R. 3016(b); Michaan, 117 A.D.3d at 692. A claim for fraud asserted merely in conclusory terms should be dismissed. Id.’ Under California law, the two year statute of limitations applies to the claim of breach of fiduciary duty. Cal. Civ. Proc. Code § 339(1). Thus, if California law were to apply, any breach of fiduciary duty claims based on events that occurred before January 19, 2014 are barred by the two-year statute of limitations. * Likewise, under California law, [raud must be pleaded with particularity, Committee on Children's Television, Inc. v. General Foods Corp., 35 Cal.3d 197,216 (1983). Every element of the cause of action must be supported by facts, showing how, when, where, to whom and by what means any alleged representations were made. Lazar v. Superior Court, 12 Cal.4th 631, 645 (1996). The policy of liberal construction of pleadings will not act to save a defective claim for fraud. Wilhelm. v. Pray, Price, Williams & Russell, 186 Cal. App.3d 1324, 1332 (1986). 10 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM w N N n b 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The FAC’s fourth cause of action relies upon general allegations that defendants, through Mr, Lam, “sent out false invoices” to plaintiff that “reflected excessive and unreasonable charges” and “were fraudulent as explained above.” (FAC § 52). The only invoices that plaintiff refers to are the so-called “2014 Excessive and Fraudulent Invoices” described in FAC § 21(A)-(J). However, in those allegations, plaintiff alleges that she was “unreasonably and excessively overcharged... for CPA and accounting fees.” (FAC § 53). This is insufficient to state a claim for fraud. Platinum Partners Value Arbitrage Fund LP v. Kroll Associates, Inc., 102 A.D.3d 483, 483,957 N.Y.S.2d 336, 337 (1st Dep’t 2013) (“These allegations fail to state causes of action for fraud ... They indicate, at the most, errors or simple oversight on defendant’s part, and do not give rise to an inference of fraudulent intent”); Giant Group, Ltd. v. Arthur Andersen, LLP., 2 A.D.3d 189, 190, 770 N.Y.S.2d 291, 292 (1st Dep’t 2003) (“the court properly dismissed plaintiff's claims of fraud against [accountants] on the ground that plaintiff's allegations of scienter are not pleaded with the requisite particularity, but are conclusory, failing to set forth facts from which scienter may be inferred”). In addition, plaintiff has not adequately alleged damages. The FAC alleges that plaintiff “has incurred substantial damages” as a “proximate result of defendants’ fraudulent promises.” But plaintiff has not alleged that she paid the 2014 invoices that she claims are fraudulent. She cannot make such an allegation in good faith, as those unpaid bills are the subject of the collection action pending against her in New York. Thus, plaintiff has not adequately pled damages because she never paid the bills that she claims represent over-charging. Wagner Davis, P.C. v. Siskopoulos, 2013 WL 582253, *5 (Sup. Ct. New York Cnty. 2013) (“Defendants also fail to identify what damages they suffered as a result of the alleged overbilling as it is undisputed that they have not paid for most of plaintiff's invoices and they do not show that there were any erroneous charges on the invoices they paid”); Busino v. Meachem, 270 A.D.2d 606, 608, 704 N.Y.S.2d 690, 693 (3d Dep’t 2000) (dismissing fraud claim where “the bills were never paid”). ¢ The FAC does not allege any fraudulent “promises.” This appears to be an inadvertent remnant of plaintiff's original complaint. Plaintiff appears to have removed the allegations concerning “fraudulent promises” from the FAC in recognition that they amounted to, at most, non-actionable statements of future intent. 11 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM 10 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 These 2014 invoices are the only invoices that plaintiff has described with any degree of specificity. In the preceding paragraph, plaintiff makes a vague reference to “fraudulent invoices” (FAC 920). However, plaintiff fails to provide the necessary details concerning those invoices, such as the date, services rendered, persons who performed the work, and amount. As a result, to the extent that plaintiff may purport to assert a fraud claim based on any conduct apart from the 2014 invoices, any such claim fails to state a claim. The cause of action for fraud is also subject to dismissal because it is duplicative of the professional negligence cause of action, “since they arise from the same facts as those underlying the [] malpractice cause of action, and do not allege distinct damages.” Mackey Reed Elec., Inc. v. Morrone & Assoc., P.C., 125 A.D.3d 822, 823, 6 N.Y.S.2d 65 (2d Dep’t 2015) (dismissing breach of fiduciary duty and fraud counts as duplicative of professional negligence cause of action); Bd. of Trustees of IBEW Local 43 Elec. Contractors Health and Welfare, Annuity and Pension Funds v. D'Arcangelo & Co., LLP, 124 A.D.3d 1358, 1360, 1 N.Y.S.3d 659 (4th Dep’t 2015) (“we agree with defendant that the third through sixth causes of action should be dismissed as duplicative of the professional malpractice cause of action, including the causes of action for fraud”). F. The Fifth Cause of Action for Negligent Misrepresentation fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ. Proc. § 430.10(e). The FAC’s negligent misrepresentation claim relies solely upon the “false invoices” that plaintiff alleges defendants “sent out” to her. (FAC { 59). As with the fraud claim, plaintiff's negligent misrepresentation claim fails because it does not plead the supposed misrepresentation with the requisite particularity. N.Y. C.P.L.R. 3016(b). Ferro Fabricators, Inc. v. 1807-1811 Park Ave. Dev, Corp., 127 A.D.3d 479,479, 11 N.Y.8.3d 548 (1st Dep’t 2015), citing Gregor v. Rossi, 120 A.D.3d 447, 992 N.Y.S.2d 17 (Ist Dep’t 2014) (holding that fraud and negligent misrepresentation claims were not pleaded with requisite particularity “because the words used by defendants and the date of the alleged false . 7 representations are not set forth”). 7 Likewise, under California law, negligent misrepresentation “must be factually and specifically alleged.” Cadlo v. Owens-Illinois, Inc. (2004) 125 Cal. App.4th 513, 519 (23 Cal.Rptr.3d 1, 5), as 12 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM W n ~ N O N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The only purportedly improper invoices that the FAC describes with any specificity are the 2014 invoices described in FAC § 21. As for those invoices, the negligent misrepresentation claim fails (as does the fraud claim) because plaintiff has not pled damages, in that plaintiff has not alleged that she paid the 2014 invoices. Plaintiff cannot in good faith plead damages, because plaintiff has not paid the 2014 invoices and they are subject of the collection action pending against plaintiff in New York. The FAC makes reference to alleged “negligent promises.” (FAC § 62). However, the FAC contains no allegations about “negligent promises,” and this reference appears to be another inadvertent remnant of plaintiff's initial complaint, G. The Sixth Cause of Action for Conversion fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ. Proc. § 430.10(e). In her conversion claim, plaintiff alleges that defendants charged her “excessive” and “unreasonable” fees. (FAC § 65). Run-of-the-mill damages claims based on contracts or debts owed cannot form the basis of a claim for conversion. Marine Midland Bank v. John E. Russo Produce Co., 65 A.D.2d 950, 952, 410 N.Y.S.2d 730 (1978), modified on other grounds, 50 N.Y.2d 31 (1980) (holding that “a mere claim of moneys paid out by mistake based upon contract will not support an action for conversion”); Citipostal, Inc. v. Unistar Leasing, 283 A.D.2d 916, 919, 724 N.Y.S.2d 555 (4th Dep’t 2001) (dismissing conversion claim where lessee mistakenly made additional payments that were not actually due). The FAC’s allegations demonstrate that plaintiff is claiming that she has been over- charged. This allegation cannot support a conversion claim as a matter of law. Conversion is the “exercise of unauthorized dominion over the property of another in interference with a plaintiffs legal title or superior right of possession.” Lopresti v. Terwilliger, 126 F.3d 34, 41 (2d Cir. 1997) modified (Dec. 30, 2004). “The policy of liberal construction of pleadings is not generally invoked to sustain a misrepresentation pleading defective in any material respect.” Id. 13 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LIP AND STAN LAM Ww ~~ 10 11 12 13 14 15 16 17 18 12 20 21 22 3 24 25 26 27 28 (citation omitted). To plead a cause of action for conversion, plaintiff must allege that “(1) the property subject to conversion is a specific identifiable thing; (2) plaintiff had ownership, possession, or control over the property before its conversion; and (3) defendant exercised an unauthorized dominion over the thing in question, to the alteration of its condition or to the exclusion of the plaintiff's rights.” Moses v. Martin, 360 F.Supp.2d 533, 541 (S.D.N.Y. 2004). The conversion claim fails because plaintiff does not allege the existence of a specific sum of money that should have been handled by defendants in a particular manner. “[I]t is well settled that an action will lie for the conversion of money where there is an obligation to return or otherwise treat in a particular manner the specific money in question, and such money can be described or identified in the same manner as a specific chattel.” G.D. Searle & Co. v. Medicore Commc'ns, Inc., 843 F. Supp. 895, 912 (S.D.N.Y. 1994) (citations omitted). “[M]oney can be the subject of conversion and a conversion action only when it can be described, identified, or segregated in the manner that a specific chattel can be.” Id.; Columbia Marine Servs., Inc. v. Reffet Ltd, 861 F.2d 18, 23 (2d Cir. 1988) (“a mere claim that a sum of money, not specifically identifiable, has been paid out of general funds” is insufficient). Here, plaintiff does not allege that she was deprived of a specific sum; she merely alleges generally that she was overcharged. That does not make a claim for conversion? H. The Seventh Cause of Action for Negligence fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ. Proc, § 430.10(e). It is unclear why plaintiff asserts one cause of action for negligence, then a second separate cause of action, based on the same allegations, for professional malpractice. The cause of action 8 The same result is mandated by California law. McKell v. Washington Mut., Inc., 142 Cal. App. 4th 1457, 1467, 49 Cal, Rptr. 3d 227, 236 (2006) (sustaining demurrer to a conversion claim where the conversion claim was based upon defendant overcharging for the services and refusing to provide a refund; and observing that “[p]laintiffs cite no authority for the proposition that a cause of action for conversion may be based on an overcharge”); Kim v. Westmoore Partners, Inc., 201 Cal. App. 4th 267, 284, 133 Cal. Rptr. 3d 774, 789 (2011) (citation and quotation omitted) (“Money cannot be the subject of a cause of action for conversion unless there isa specific, identifiable sum involved, such as where an agent accepts a sum of money to be paid to another and fails to make the payment.”). 14 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM HS ~N Wn 10 11 12 13 14 15 16 17 18 19 20 21 33 23 24 25 26 27 28 for negligence is improper because professional malpractice, as opposed to ordinary negligence, is the appropriate cause of action to bring against a professional who allegedly performed his or her professional duties negligently. Calcutti v. SBU, Inc., 224 F, Supp. 2d 691, 700 (S.D.N.Y. 2002) (citation omitted). The negligence count should be dismissed as redundant, ATC Healthcare Inc. v. Goldstein, Golub & Kessler LLP, 28 Misc. 3d 1237(A), 958 N.Y.S.2d 59 (Sup. Ct. Nassau County 2009) (“where the allegations ... negligence are premised on the same allegations of a professional’s failure to exercise due care or to abide by general professional standards that give rise to a professional malpractice claim, the claims for ... negligence will be dismissed as being duplicative™).® L The Eighth Cause of Action for Accounting fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ. Proc. § 430.10(e). Because accountants are not fiduciaries of their clients, plaintiff’s claim for an accounting fails. “The right to an accounting is premised upon the existence of a confidential or fiduciary relationship and a breach of the duty imposed by that relationship respecting property in which the party seeking the accounting has an interest.” Ctr. for Rehabilitation and Nursing at Birchwood, LLC v. S & L Birchwood, LLC, 92 A.D.3d 711, 713, 939 N.Y.S.2d 78 (2d Dep’t 2012)(citation omitted). With the dismissal of the claim for breach of fiduciary duty, the claim for an accounting also fails. ' In addition, even if there was a fiduciary relationship (and there is not), at most plaintiff has stated a claim for damages on the theory that the Agreements were breached and she was over- charged. That does not entitle one to an accounting. Bouley v. Bouley, 19 A.D.3d 1049, 1051, ? The result is the same under California law. Holcomb v. Wells Fargo Bank, N.A. (2007) 155 Cal. App.4th 490, 501 [66 Cal.Rptr.3d 142, 150], as modified (Oct. 22, 2007) (“These [negligence] allegations are merely duplicative of [plaintiff’s] negligent misrepresentation cause of action, and therefore insufficient to support a separate cause of action”). '% Similarly, under California law, an accounting is a remedy and not a separate and distinct cause of action. Any “right to accounting is derivative and depends on the validity of a plaintiff's underlying claims.” Zepeda v. Paypal, Inc., 777 F. Supp. 2d 1215, 1221(N.D. Cal. 2011) (internal brackets and quotations omitted). Here, plaintiff has failed to plead any claim where an accounting would be needed, and her accounting claim should be dismissed with prejudice. 15 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM Oo o e 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 797 N.Y.S.2d 221 (4th Dep’t 2005) (“Plaintiff fails to allege ... that he has entrusted money or property to defendant, nor does he allege that defendant holds money or property with respect to which he owes a duty of accounting to plaintiff. We thus conclude that plaintiff has alleged sufficient facts to entitle him only to monetary damages”) (citations omitted); Sanshoe Trading Corp. v. Mitsubishi Intern. Corp., 122 Misc. 2d 585, 587 (Sup. Ct. N.Y. Cty. 1984) (“The mere fact that the proceeds from the sale of the footwear were collected and were to be distributed by the defendants and that the plaintiff is unaware of the exact amount to which he is entitled does not make the defendants fiduciaries” justifying the equitable relief of an accounting ), aff'd, 104 A.D.2d 337 (1st Dep’t 1984). J, The Ninth Cause of Action for Professional Negligence fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ. Proc. § 430.10(e). “A cause of action charging that a professional failed to perform services with due care and in accordance with the recognized and accepted practices of the profession is governed by the three-year Statute of Limitations applicable to negligence actions (see, CPLR 214[6] ). A malpractice cause of action sounds in tort and, therefore, absent fraud, accrues when an injury occurs, even if the aggrieved party is then ignorant of the wrong or injury.” Ackerman v. Price Waterhouse, 84 N.Y.2d 535, 541 (1994)(citations omitted). Thus, under New York law, any professional negligence claims based on events that occurred before January 19, 2013 are barred by the three-year statute of limitations. '' K. The Tenth Cause of Action for Conspiracy to Commit Fraud fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ. Proc. § 430.10(e). In its claim for conspiracy to commit fraud, the FAC broadly alleges that “Defendants” falsely promised they were capable of handling plaintiff’s accounting services and that they were 1" Under California law, the two year statute of limitations applies to the claim of professional negligence. Cal. Civ. Proc. Code § 339(1). Thus, if California law were to apply, any professional negligence claims based on events that occurred before January 19, 2014 are barred by the three-year statute of limitations. 16 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM No © 0 N N N nn BA Ww 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 charging reasonable and fair fees. (FAC {{ 77-78). The FAC groups within the definition of “Defendants” each of: Mr. Lam (a partner of Marcum); the entity Marcum; and unspecified, fictitious “DOE Defendants” who were allegedly acting within the scope of their agency or employment with Marcum. (FAC qf 16-17). Plaintiff's cause of action alleging conspiracy should be dismissed because of the “intracorporate conspiracy doctrine,” which provides that “the officers, agents, and employees of a single corporate . . . entity, each acting within the scope of his or her employment, are legally incapable of conspiring with each other.” Rodriquez v. City of New York, No. 05 Civ. 5117 (JFB), 2008 WL 420015, at *25 (E.D.N.Y. Feb. 11, 2005) (citing Farbstein v. Hicksville Pub. Library, 254 F. App’x 50, 51 (2d Cir. 2007) (affirming dismissal of a conspiracy claim “at the first step of analysis” because the complaint made reference only to employees of same corporation); McPartland v. American Broadcasting Companies, Inc., 623 F.Supp. 1334, 1340 (S.D.N.Y.1985) (invoking the doctrine with respect to a corporation, directors, officers, and employees); Lewis v. Friedman-Marks Clothing Co., 70 A.D.2d 866, 866, 418 N.Y.S.2d 60 (1st Dep’t 1979) (dismissing conspiracy claims against individual defendants and the corporation because “[i]t is a tenet basic to our law that no one may conspire with himself.”). 12 Plaintiff's conspiracy claim should be dismissed because Marcum cannot conspire with its employees as a matter of law. L. The Eleventh Cause of Action for Intentional Infliction of Emotional Distress fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ. Proc. § 430.10(¢). A claim of intentional infliction of emotional distress must include four elements: “that the defendants: (1) engaged in extreme and outrageous conduct; (2) with the intent to cause severe emotional distress; (3) with a causal connection between the conduct and the injury; and (4) severe emotional distress.” Alexander v. Westbury Union Free School Dist., 829 F.Supp.2d 89, 111 (E.D.N.Y. 2011) (citation omitted). '2_ Similarly, “[i]t has long been the rule in California that ‘[a]gents and employees of a corporation cannot conspire with their corporate principal or employer where they act in their official capacities on behalf of the corporation and not as individuals for their individual advantage.” Black v. Bank of Am., 30 Cal. App. 4th 1, 6, 35 Cal. Rptr. 2d 725, 729 (1994) (citations omitted). 17 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LIP AND STAN LAM 10 11 12 13 14 15 16 17 18 19 20 21 22 25 24 25 26 27 28 The FAC alleges no facts which could be grounds for an inference of intent to cause plaintiff severe emotional distress through the alleged over-billing. To the contrary, plaintiff merely alleges that she generally suffered distress and anguish including “disturbing mental reactions such as fright, nervousness, [and] grief. . .” because defendants allegedly overbilled her (FAC 1 89), and such allegations are insufficient to state a claim." In addition, the claim for intentional infliction of emotional distress relies on the same allegations as the earlier claims. (FAC 93). “It is well-settled that a cause of action for intentional infliction of emotional distress should not be entertained where the conduct complained of falls well within the ambit of other traditional tort liability.” Butler v. Delaware Otsego Corp., 203 A.D.2d 783, 784 (3d Dept 1994). M. The Twelfth Cause of Action for Negligent Infliction of Emotional Distress fails to state facts sufficient to constitute a cause of action and is subject to demurrer under Code of Civ. Proc. § 430.10(e). To state a claim for negligent infliction of emotional distress, a plaintiff must allege: (1) a breach of the duty of care; (2) that results in a mental injury that “is a direct, rather than a consequential,” result of the breach; and (3) the claim “possesses some guarantee of genuineness,” Taggart v. Costabile, 131 A.D.3d 243, 255-256, 14 N.Y.S.3d 388 (2d Dep’t 2015) (citations omitted). The required “guarantee of genuineness” may be satisfied, unlike here, “where the particular type of negligence is recognized as providing an assurance of genuineness, as in cases involving the mishandling of a corpse or the transmission of false information that a parent or child had died.” Id. Conversely, a contractual relationship generally does not give rise to a duty which can form the basis for liability for negligent infliction of emotional distress. Baumann v. Hanover Cmty. Bank, 100 A.D.3d 814, 816,957 N.Y.S.2d 111 (2012) (finding a duty did not exist to support a negligent infliction of emotional distress claim involving borrower and a bank). Additionally, while physical injury is no longer a necessary element of a cause of action to recover Moreover, California law does not generally recognize a cause of action for emotional distress, as pled here, stemming solely from a financial loss. Taguinod v. World Sav. Bank, F'SB, 755 F. Supp. 2d 1064, 1074 (C.D. Cal. 2010). 18 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM A N Wn Bb ~J 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 damages for negligent infliction of emotional distress, “such a cause of action must generally be premised upon conduct that unreasonably endangers the plaintiff’s physical safety.” Losquadro v Winthrop Univ. Hosp., 216 A.D.2d 533, 534 (2d Dep’t 1995). 14 Plaintiff does not allege any such conduct. III. CONCLUSION Defendants Marcum LLP and Stan Lam respectfully request that the Court sustain their demurrer in its entirety without leave to amend. Dated: July 14, 2016 ZUKERMAN GORE BRANDEIS & CROSSMAN, LLP FD By: © Fi Frank C. Welzer 14 California law does not recognize the independent tort of negligent infliction of emotional distress. Varnado v. Midland Funding LLC, 43 F. Supp. 3d 985, 990 (N.D. Cal. 2014). Rather, “[n]egligent infliction of emotional distress is a form of the tort of negligence, to which the elements of duty, breach of duty, causation and damages apply.” Jd. Additionally, California law provides that “[r]ecovery for emotional distress in negligence cases is generally not available ‘unless malice, breach of a fiduciary duty, physical injury or impact, or some other unusually extreme or outrageous circumstance, can be shown, . . . such as a crematorium mishandling the remains of plaintiffs’ close relative.” /d. (holding that unfair debt collection practices are insufficient to state a claim). And California law does not generally recognize a cause of action for emotional distress stemming solely from a financial loss. Taguinod v. World Sav. Bank, FSB, 755 F. Supp. 2d 164, 1074 (C.D. Cal. 2010). 19 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM OO OO Le N N N Un A W N PROOF OF SERVICE STATE OF NEW YORK COUNTY OF NEW YORK os 1 am employed in the County of New York, State of New York. I am over the age of 18 and not a party to the within action. My business address is Zukerman Gore Brandeis & Crossman, LLP, Eleven Times Square, New York, New York, 10036. On July 14, 2016, T served the forgoing documents(s) described as NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS MARCUM LLP AND STAN LAM; DECLARATION OF FRANK C. WELZER IN SUPPORT OF DEFENDANTS’ DEMURRER; DEFENDANTS’ OUT OF STATE CASES CITED IN SUPPORT OF THEIR DEMURRER on the interested parties in this action: by facsimile transmission .m, pursuant to Rule 2008 of the California Rules of Court, I transmitted a true copy thereof to the fax number(s) as stated below. The telephone number of the sending facsimile machine was .\ transmission report was properly issued by the sending facsimile machine, and the transmission was reported as complete and without error, AND by placing the true copies thereof enclosed in scaled envelope(s) addressed as stated in the attached mailing list. by placing a true copy thereof enclosed in sealed envelope(s) addressed as follows: SEE ATTACHED SERVICE LIST BY FACSIMILE I caused such envelope(s) to be delivered by hand to the office(s) at the addresses as follows: ~~ BYMAIL 1 am readily familiar with the firm’s practice of collection and processing documents for mailing. It is deposited with the U.S. postal service on that same day in the ordinary course of business, I am aware that on motion of any party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing an affidavit, BY OVERNIGHT by depositing one complete set of copies of the document in a box or other facility regularly maintained by the express service carrier, or by delivering them to an authorized courier or driver authorized by the express service carrier to receive documents, in an envelope or package designated by the express service carrier with delivery fees paid or provided for, addressed to: SEE ATTACHED SERVICE LIST Xx BY EMAIL At the email address associated with the attorney. _ X__ STATE declare under penalty of perjury under the laws of the State of California that the above is true and correct. FEDERAL I declare that I am employed in the office of a member of the bar of this Court at whose direction the service was made, OW 0 3 OO wn BB WwW N e N N N N N N N N N N m m m d p s e s e m e e e e e s 0 3 O N WL BA WL N = O O WwW N N N R A W ND -~ Oo Executed on July 14, 2016, at New York, New York. Ce a FRANK C. WELZER, Declarant SERVICE LIST Sherri S. Shafizadeh, Esq. Law Offices of Sherri S. Shafizadeh 4 Park Plaza, Suite 1100 Irvine, CA 92614 Kenneth Julian Manatt, Phelps & Phillips, LLP Park Tower 695 Town Center Drive, 14th Floor Costa Mesa, CA 92626
