Leslie A. Andrews vs. Marcum Llp

Demurrer to Amended Complaint

Cal. Super. - 4th Dist.January 19, 2016

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 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(¢) 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 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 demurrerto 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 ofpoints and authorities. This Demurer is brought pursuant to Code ofCiv. 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 ofCiv. 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 ofthis motion, and all matters of which the Court may take judicial notice. Dated: July 14, 2016 ZUKERMAN GORE BRANDEIS & CROSSMAN, LLP By: eins . Frank C. Welzer Attorneys for Defendants Marcum LLP and Stan Lam 2 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IL. INTRODUCTION ....oiiiiiiiiiieiiesinisesesenesns sss sisssssssssssesissssssssssssssssssssssssessssssssssssssssssess 3 LEGAL ARGUMENTlaissssissmnvonessssnsssssusneiassssoninsssessns oss sevaemssessesss assy spestessmmarsosson 4 A. B. TABLE OF CONTENTS Plaintiff’s Claims Arise Under The Agreements. .........cccoevvevviiiniiivnninniiiesniseniennns 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 ofCiv. Proc. § 430.10(€). cecovvverininiciniiiiniins 6 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 ofCiv. Proc. § 0106miraBAAAVOSRERAessous 9 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 demurter under Code ofCiv. Proc. § 430.10(€).commremmmmnmenamserammmsatsensssesassanes 9 The Fourth Cause of Action for Fraud failsto state facts sufficient to constitute a cause of action and is subject to demurrer under Code of G17 1Ba:[HED10)EanieseeaseeeaSEGSs 10 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 ofCiv. Proc. § 430.10(€)......cccovvvviivinviinininiinienicinisinns 12 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 ofCiv. Proc. § 430.10(€)ussuiissismssssiosisasivsssssisssvissssavesissnisicissionassvisas 13 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 ofCiv. Proc. § 430.10(€)sxemmerccmmsesmssrsmsmmemuamrnssrersesssarenssssgssssamonsasns 14 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 ofCiv. Proc. § 430.10(€). .........susmsvssssssssisissvessessossussisasonssssssissisis 15 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 ofCiv. Proc. § 430.10(€)....ccccocvviviniiniininiiiiiiiiieninnne 16 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 ofCiv. Proc. § 430.10(€).......cccevvvrininiiiininininininins 16 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 ofCiv. Proc. § 430.10(€).......ccervrvrennnn. 17 0 0 ~ ~ O N w n k e W N \ 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 andis subject to demurrer under Code ofCiv. Proc. § 430.10(€)......cccoevrerrrrenen 18 CONCLUSTON .spinesssi aioe yes susecss sib issnsaeioomse sssssisssss sass viamssiass 19 ii NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM 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.2A 535 (1994) ....ueemereeieenerernnss oo ouldsssiiod eon emia sesis sa sds dasa essa sania sas ws 16 Alexander v. Westbury Union Free School Dist. , 829 F.Supp.2d 89 (E.D.N.Y. 2011) weevriiiiriiinicicciisissississssssssessansssssssssssssssses sen sasases 17 ATC Healthcare Inc. v. Goldstein, Golub & Kessler LLP, 28 Misc. 3d 1237(A) (Sup. Ct. Nassau County 2009) cicuuescsssssssonsrasassrssassassassrssnssassonns 15 Baumann v. Hanover Cmty. Bank, 100 A.D.3d 814 (2012) .....qupspassssssssionsnisssississsvsmasbisioisusnss sspusossiessbans sssossias das ws ssssasussassvan, 18 Bd. of Trustees ofIBEWLocal 43 Elec. Contractors Health and Welfare, Annuity and Pension Funds v. D'Arcangelo & Co., LLP, 124 A.D.3d 1358 (4th Dept 2015) .c.verremeeonrmerne snpssmsupusssssxmenspsemmmsvimmmenmmsvasmmmesserassessan 12 Black v. Bank ofAm., 30 Cal. App. 4th 1 (1994) siumasiissiommissivisissisassesame 17 Bouley v. Bouley, 19 A.D.3d 1049 (4th Dep’t 2005) ...cvveviiiieiiiniisiniessiisssisisssssssssaess sessessessansa 16 Cabral v. County ofGlenn, 624 F. Supp. 2d 1184 (E.D. Cal 2009).....ccuusismsissssasssssasssneronsnsssnsassassassasnsassssasssnsrsssssosssns 7 Calcuttiv. SBU, Inc., 224 F. Supp. 2d 691 (S.D.N.Y. 2002)...isusmsssssassssssnssisivsnissspsassvonsivsispssaonsonsvissssasssnisbanss 15 Citipostal, Inc. v. Unistar Leasing, 283 A.D.2d 916 (4th Dep't 2001) ...ccvevviviiiririericsininnnisinessesssseseseressnsses 13 Columbia Marine Servs., Inc. v. Reffet Ltd., 861 F.2d 18 (2d Cir, 1988).sssissvivsissisiscuvissnissnssisoasssnvsshustissastseisnssonssn se aminssisssmssans 14 Committee on Children’s Television, Inc. v. General Foods Corp., 35 Cal.3d 197 (1983) .......¢onssaruseesenesspsssonsasssnnoassovssasssssssisasissiassonssisssnonsiicbonseshasuapissvmsioiosas 10 Ctr. for Rehabilitation and Nursing at Birchwood, LLC v. S & L Birchwood, LLC, 92 A.D.3d 711 (2d Dep’t 2012) wsisssmnsnssomsissasssnssssnesasmamasmsrmsmmsnarecvsssrssmsmsresspsonpapossas 15 DG Liquidation, Inc. v. Anchin, Block & Anchin, 300 A.D:2d 70 (1st Dep't 2002) .............cusainiissivissiesmnsssiimsamsiiesiiisosisss 9 Farbstein v. Hicksville Pub. Library, 254 F. App’X 50 (2d Cir. 2007) .cccevvevririiisveseresneresesnsnsssssssresssssssassisssnssssasasssissisasrsssassassanes 17 Ferro Fabricators, Inc. v. 1807-1811 Park Ave. Dev. Corp., 127 A.D.3d 479 (1st DEPt 2015), .covcermrireiisiininessnnsisnsnssmansasonsssssensapsnsassasnsansasassusssyssoness 12 iii NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Friedman v. Anderson, 23 AD.3d 163 (1st Dept 2005) tovveuicreierrrriiiieciniiesstsiesisessessessssssssessessssssssesssssssssess 9,17 G.D. Searle & Co. v. Medicore Commc'ns, Inc., 843 F. Supp. 895 (S.D.N.Y. 1994)........ cccssssssisssvssassamssscsmssossnivossursomnssnssssisissnessaosssasos 14 Gregor v. Rossi, 120 A.D.3d 447 (15t Dept 2014) ..oomvssuimsssssiasspssoiosisiosssiciopovestirsssessssesnidssivainssamassisisviss 12 Lazar v. Superior Court, 12 Cal.4th 631 (1996) samummmsmccmmuisnsmasessinssnes antssmesymmssssasams 10 Lewis v. Friedman-Marks Clothing Co., 70 A.D.2d 866 (15t Dep’t 1979) ..cuusminssummsnasmimansimsiiiismiamsisaiiom 17 Lopresti v. Terwilliger, 126 F.3d 34 (2d Cir. 1997)...c..ccirrinesaserssssssonsssssasssssessassnessasssssassasssassnssnsssssssssasnssasssssbossases 13 Mackey Reed Elec., Inc. v. Morrone & Assoc., P.C., 125 A.D.3d 822 (2d Dep’t 2015) . sssssmsuisivmmmnsssensessenspusammmssmsemasisronsenessssssmmses 10, 12 Marine Midland Bank v. John E. Russo Produce Co., 65 A.D.2d 950 (1978) ...nverurreriecrerneneessssnenss iia defies siisasosaRAI edRaS ES SSReas 13 McKell v. Washington Mut., Inc., 142 Cal. App. 4th 1457 (2006) ...vovveiririiriieiiiinisisinsnesssiess sess sesses 14 McPartland v. American Broadcasting Companies, Inc., 623 F.Supp. 1334 (SDNY. 1985)...c.cciiiiiiiiisisssivissssnsussssisasisassssnsusassasnsnsssnsusssssssansssss 17 Michaan v. Gazebo Horticultural, Inc., 117 A.D.3d 692 (2d Dep’t 2014) ,..oosussessossssasssossimosnssisnsosssusssisomsssmsissssssoivossoiisisqissasiosiasss 10 Moses v. Martin, 360 F.Supp.2d 533 (S.D.N.Y. 2004) suusssssesensasonssassssssasnssarsosssasronmsansusvasnpsasaonssssassorasgsnsnos 14 Rodriquez v. City ofNew York, No. 05 Civ. 5117 (JFB), 2008 WL 420015 (E.D.N.Y. Feb. 11, 2005) ....ccccovviivivininnnes 17 Sanshoe Trading Corp. v. Mitsubishi Intern. Corp., 122 Misc. 2d 585 (Sup. Ct. N.Y. Cty. 1984) ...cccecssrerersessrssessssnesisssssassosassassssnsnssasossasissnss 16 Smith, Valentino & Smith, Inc. v. Superior Ct., 17 Cal. 3d 491 (1976) sussswssssassnissnsvusnisssioninies omens sess esomiosesssisson ides sesmeens assesses sammeres 4 Taggart v. Costabile, 131 A.D.3d 243 N.Y.S.3d 388 (2d Dep’t 2015) wsisisivssvasvssssssssssssisissisiviog 18 Taguinod v. World Sav. Bank, 755 F. Supp. 2d 1065 (C.D. Cal. 2010) ..cceeciivirmiiniieieiessiessssssssssssss ss: 6 Varnado v. Midland Funding LLC, 43 F. Supp. 3d 985 (N.D. Cal. 2014) ...cccccmisusssisssssrsrssssssnssasssssassasasusasrasesasasasronsassasassssaens 19 iv NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM c o 3 O N \ O 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Wilhelm. v. Pray, Price, Williams & Russell, 186 Cal. App.3d 1324 (1986)........0ouceo omsmmsmemsumonssornsssssmsssemsasrssyssmassarssssxmmssesssarmmssnavsnasy 10 Zepeda v. Paypal, Inc., 777 E. Supp. 2d 1215 (N.D. Cal. 2011) uussuissiisssstsmmsassmsimsmisassisinti. 15 Statutes Cal, Welf & Inst. Code § 15610.30..........c....commmusrsmasepomsmersppsemmmmseessmosmhommapasmmasspsessass: + 6,7 Code OfCiv. Proc. § 33901) ...vccuimenmeniiiiecoe isii bin assis cats ss aesab Exess sess smwyaanmassaissssnoss 10, 16 Code ofCiv. Proc. § 418.10(Q)(2).....cceeirerurnne ssisimsssiinessavins assesses sss sessss soso iis isasssstiistasnsnivn » oe ves 3 Code ofCiv. Proc. § 430.41(8) ...oevereeeemirerenienesisasamponsotsasestesusassasvensussisssssssaessmssaosssshsdonssasatang oso ne 3 Code ofCiv. Proc. § 410.30(2) ...oocvvevrirerrnirererssonsmsussasserssasnamessansmssnsmpsassesgonsonensaspasessosasassssasss sess 3 Code ofCiv. Proc. § 430.10(€) ....c.eovvviiininiieiissississsssesssnssnssaesessssssasasassmsssasusssonsvessssasassseses passim CIVIL COA § 3345 .nvrerieireiririreessees nee eeoN38NESSORR+1c 9 Vv NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEMURRER TO FIRST AMENDED COMPLAINT Defendants Marcum LLP and Stan Lam hereby demurto the First Amended Complaint (the “FAC”) on each ofthe 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 ofCiv. 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 ofCiv. 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 ofCiv. 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 ofCiv. Proc. § 430.10(e). Demurrer to Fifth Cause of Action 1. The Fifth Cause of Action fails to state facts sufficient to constitute a cause of Code ofCiv. 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 ofCiv. 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 ofCiv. 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 ofCiv. Proc. §430.10(e). 10 11 12 13 14 15 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 ofCiv. 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 ofCiv. 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 ofCiv. 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 ofCiv. Proc. § 430.10(e). July 14, 2016 ZUKERMAN GORE BRANDEIS & CROSSMAN, LLP By: om oe Frank C. Welzér- Attorneys for Defendants Marcum LLP and Stan Lam 2 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM 0 3 O N \ O 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 attemptto re-cast herself as “plaintiff” and avoid a lawsuit against her in the agreed- upon forum ofNew 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 ofCiv. 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 ofCiv. 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 asto the impropriety of plaintiff’s claims, because they can be addressed by the court in New York if Andrews choosesto assert counter-claims in the lawsuit pending against her in New York. In an abundance ofcaution, 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 O o c o 3 A N 10 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 ofthe 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 ofthis engagement letter, any course of conduct, course of dealing and/or action of this Firm and/or [Andrews] and ourrelationship with you shall be governed by the laws of the State ofNew 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 ofstate 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 121(B)); e 4.75 hours for accounting services billed “[i]n June, 2014” for Tustin Construction Co. (FACT 21(0)); e $19,880 billed “in 2014” for preparation ofstate and federal tax returns for three limited partnerships (FAC §21(D)); "The FAC is attached to the Welzer Declaration as Exh. D. 4 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM 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 November3, 2015 (sic) (FAC 21(E)); e 4.8 hours of work billed on November 21, 2014 (FAC § 21(F)); e 6.6 hours of work performed on October 8 and 9, 2014 (FAC § 21(G)); ¢ 1.4 hours billed on November 24, 2014 (FAC § 21(H)); o 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 49 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 4 52. Likewise, in the fifth cause of action for negligent misrepresentation, plaintiff alleges that “[t]hese invoices are fraudulent as explained above.” FAC 759. 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 doubtthat 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 9 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 saysit is the entire agreement, 5 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM 10 11 12 13 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 engagementletters, 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 orderto 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 herrights, 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. 2 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 ofthe statutes”). 6 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM A ~ O N W n 10 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 ofGlenn, 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 ofon 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 majorlife activities.” (FAC 1). However, the FAC does not allege that plaintiff lives underthe care of another orthat 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 c o ~ ~ O N \ O 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 limitations that restricted [her] ability to carry out normalactivities,” 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 notallege whether the “caregiver”is a medical or health care professional. It is not uncommon for person ofrelative 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 befatal 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 notto 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 © 0 1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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(e). Plaintiffs 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 “[pJursuant 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 9 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 accountantto 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 ofthe professional negligence cause of action, “since they arise from the same facts as those underlying the legal malpractice cause of action, and do notallege distinct damages.” 9 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM 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 offiduciary 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 ofaction 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 ofaction 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 statedin 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 yearstatute 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, 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 ofaction 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 ofliberal 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 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 9 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 allegesthat 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”). 6 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. Is] NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM 10 11 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 ofaction); Bd. ofTrustees ofIBEWLocal 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 ofaction 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.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”). 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 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 § In her conversion claim, plaintiff alleges that defendants charged her “excessive” and “unreasonable” fees. (FAC q 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 ofpleadings is not generally invoked to sustain a misrepresentation pleading defective in any material respect.” Id. 13 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (citation omitted). Toplead 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 Lid, 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 3 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 is a 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 10 11 12 13 14 15 16 17 18 19 20 21 22 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”).’ 1. 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 oftheir 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 wv. 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. Bowley 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”). 19 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 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 !' UnderCalifornia law, the two year statute oflimitations 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 o N ~ ~ O N W n 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 qq 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 oftheir agency or employment with Marcum. (FAC 916-17). 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 ofhis or her employment, are legally incapable of conspiring with each other.” Rodriquez v. City ofNew 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.”).'? 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(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). 12 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 ofAm., 30 Cal. App. 4th 1, 6, 35 Cal. Rptr. 2d 725, 729 (1994) (citations omitted). 17 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The FAC alleges no facts which could be grounds for an inference ofintent 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 offalls 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 ofCiv. Proc. § 430.10(e). To state a claim for negligent infliction of emotional distress, a plaintiff must allege: (1) a breach of the duty ofcare; (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 3 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). 18 NOTICE OF DEMURRER AND DEMURRER BY DEFENDANTS, MARCUM LLP AND STAN LAM c o 0 A N \ O 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)."* Plaintiff does not allege any such conduct. II. CONCLUSION Defendants Marcum LLP and Stan Lam respectfully request that the Court sustain their demurrerin its entirety without leave to amend. Dated: July 14, 2016 ZUKERMAN GORE BRANDEIS & CROSSMAN, LLP Frank C. Welzer 14 California law does not recognize the independenttort of negligent infliction of emotional distress. Varnado v. Midland Funding LLC, 43 F. Supp. 3d 985, 990 (N.D. Cal. 2014). Rather, “In]egligent infliction of emotional distress is a form ofthe tort of negligence, to which the elements of duty, breach of duty, causation and damages apply.” /d. 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.” Id. (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