Demurrer To First Amended ComplaintDemurrerCal. Super. - 4th Dist.April 3, 201810 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Katherine J. Odenbreit (SBN: 184619) kodenbreit@mahoney-law.net Edward E. Kim (SBN: 183022) ekim @mahoney-law.net Shooka Dadashzadeh (SBN: 317134) sdadashzadeh @mahoney-law.net MAHONEY LAW GROUP, APC 249 East Ocean Boulevard, Suite 814 Long Beach, CA 90802 Telephone No.: (562) 590-5550 Facsimile No.: (562) 590-8400 ELECTROMICALLY FILED Superior Court of California, County of Orange 08/30/2018 at 04:37:00 FM Clerk of the Superior Court By Jeanette Torres-Mendoza, Deputy Clerk Attorneys for Defendants JANSAN FACILITY SOLUTIONS, INC. and CHRISTINA VOLD SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF ORANGE CENTRAL JUSTICE CENTER ADAN ALVAREZ SERVICES & MAINTENANCE, a California business entity, Plaintiff, v. JANSAN FACILITY SOLUTIONS, INC. a California corporation, CHRISTINA VOLD, an individual, and DOES 1 through 10, inclusive, Defendants. Case No.: 30-2018-00983709-CU-BC-CJC DEFENDANT JANSAN FACILITY SOLUTIONS, INC.’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES Assigned for all purposes to: Hon. Theodore Howard, Dept.: C18 Date: October 4, 2018 Time: 1:30 p.m. Dept.: C18 Reservation No.: 72881069 Complaint Filed: ~~ April 3, 2018 Trial Date: None Yet Set 1 DEFENDANTS’ NOTICE OF DEMURRER TO PLAINTIFF'S FIRST AMENDED COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TO THE HONORABLE COURT, ALL PARTIES, AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on October 4, 2018 at 1:30 p.m., or as soon thereafter as the matter may be heard, in Department C18 of the Orange County Superior Court, Defendants JANSAN FACILITY SOLUTIONS, INC., a California corporation (hereinafter “JANSAN”) “DEFENDANT”), will and hereby do demur, generally and specially, to Plaintiff ADAN ALVAREZ SERVICES & MAINTENANCE’s (hereinafter “ADAN” or “Plaintiff”) unverified First Amended Complaint for Breach of Contract, Breach of Covenant of Good Faith and Fair Dealing, Fraudulent Inducement and Unfair Business Practices. This demurrer is made pursuant to California Code of Civil Procedure section 430.10(e) because Plaintiff has failed to state facts sufficient to constitute a cause of action as to Plaintift’s first, second, third and fourth causes of action. This demurrer is further made pursuant to California Code of Civil Procedure section 430.10(f) in that the FAC is uncertain and ambiguous. Plaintiff also lacks standing such that the demurrer should be sustained without leave to amend. (Code Civ. Proc., § 430.10,(b)). Pursuant to California Code of Civil Procedure section 430.41(a), counsel for Defendants attempted to meet and confer with counsel for Plaintiff on June 22, 2018. (Declaration of Katherine J. Odenbreit (“Odenbreit Dec.”) 9 2). Counsel for Plaintiff requested Defendants send an email identifying the issues for the demurrer. (/d.). On June 28, 2018, Defendants sent a detailed email to Plaintiff's counsel setting forth the issues to be addressed in the demurrer and invited counsel to discuss the matters further. (Odenbreit Dec., Ex. 1). Plaintiff did not respond to Defendant’s email but did file an amended complaint on August 3, 2018, the day its opposition to the previously filed demurrer was due. The only issue addressed by the first amended complaint was the removal of Christina Vold, an individual, as a named defendant. Otherwise the first amended complaint is identical to the originally filed complaint and the remaining issues raised by Defendant’s previous demurrer remain unchanged. (Odenbreit Dec., 3). Defendant informed Plaintiff’s counsel of its intention to file a demurrer and motion to strike on the issues not cured by the FAC. (Odenbreit Dec., Ex. 2). 2 DEFENDANTS’ NOTICE OF DEMURRER TO PLAINTIFF'S FIRST AMENDED COMPLAINT This demurrer is based upon this Notice of Demurrers and Demurrers, Memorandum of Points and Authorities, Declarations of Katherine J. Odenbreit and Christina Vold, all records, papers, and pleadings on file with this Court and all arguments presented to the court at the 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 hearing. Dated: August 30, 2018 By: 3 MAHONEY LAW GROUP, APC /s/Katherine J. Odenbreit Katherine J. Odenbreit Attorneys for Defendants JANSAN FACILITY SOLUTIONS, INC. and CHRISTINA VOLD DEFENDANTS’ NOTICE OF DEMURRER TO PLAINTIFF'S FIRST AMENDED COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEMURRERS TO PORTIONS OF PLAINTIFE’S FIRST AMENDED COMPLAINT Defendant JANSAN hereby demurs pursuant to California Code of Civil Procedure section 430.10, ef seq. and relevant case law on each of the following grounds set forth below: FIRST CAUSE OF ACTION 1. Defendant JANSAN generally demurs to Plaintiff’s first cause of action for Breach of Contract on the grounds that it fails to state facts sufficient to constitute a cause of action for breach of contract. (Cal. Code Civ. Pro. §430.010(e).) 2 Defendant JANSAN generally demurs to the first cause of action on the ground that Plaintiff lacks standing. (Cal. Code Civ. Pro. §430.010(b).) 3x Defendant JANSAN specially demurs to Plaintiff’s first cause of action on the ground that it is uncertain. (Cal. Code Civ. Pro. §430.010(f).) SECOND CAUSE OF ACTION I. Defendant JANSAN generally demurs to Plaintiff’s second cause of action for Breach of Covenant of Good Faith and Fair Dealing on the grounds that it fails to state facts sufficient to constitute a cause of action. (Cal. Code Civ. Pro. §430.010(e).) THIRD CAUSE OF ACTION 1. Defendant JANSAN generally demurs to Plaintiff's third cause of action for Fraudulent Inducement on the grounds that it fails to state facts sufficient to constitute a cause of action. (Cal. Code Civ. Pro. §430.010(e).) 2. Defendant JANSAN specially demurs to Plaintiff’s third cause of action for Fraudulent Inducement on the grounds that it is uncertain. (Cal. Code Civ. Pro. §430.010(f).) FOURTH CAUSE OF ACTION 1 Defendant JANSAN generally demurs to Plaintiff's fourth cause of action for Unfair Business Practices on the grounds that it fails to state facts sufficient to constitute a cause of action. (Code Civ. Proc., § 430.10,(e).) 111 111 111 1 DEFENDANTS’ DEMURRERS TO PLAINTIFF'S COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2, Defendant JANSAN specially demurs to Plaintiff’s Fourth cause of action on the ground that it is uncertain. Cal. Code Civ. Pro. §430.010(f). Dated: August 30, 2018 By: 2 MAHONEY LAW GROUP, APC /s/Katherine J. Odenbreit Katherine J. Odenbreit Attorneys for Defendants JANSAN FACILITY SOLUTIONS, INC. and CHRISTINA VOLD DEFENDANTS’ DEMURRERS TO PLAINTIFF'S COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION On April 3, 2018, Plaintiff ADAN ALVAREZ SERVICES & MAINTENANCE (“ADAN”) filed a complaint against JANSAN FACILITY SOLUTIONS, INC., a California corporation alleging four causes of action :(1) breach of contract; (2) breach of covenant of good faith and fair dealing; (3) fraudulent inducement; and (4) unfair business practices. ADAN further alleged against Defendant CHRISTINA VOLD, an individual, a cause of action for fraudulent inducement. On July 9, 2018, Defendants filed a Demurrer and Motion to Strike. (Odenbreit Dec., 12). On August 3, 2018, in lieu of an opposition, Plaintiff filed and served a first amended complaint. (Odenbreit Dec., 9 3). The first amended complaint (“FAC”) is nearly identical in that it contains the same number of pages and paragraphs. The only differences are as follows: introductory paragraph, pagel omits Defendant Christina Vold. (FAC, p. 1:23-27); paragraphs 35 and 36 are slightly modified to eliminate allegations against Christina Vold as an individual. (FAC, 935-35, 6:2-8). On August 9, 2018, Defendant’s counsel confirmed with Plaintiff’s counsel that the amendment removes Ms. Vold as an individual defendant from the action. (Odenbreit Dec., 3). The FAC does not address any of remaining issues set forth in Defendant’s previously filed demurrer or motion to strike necessitating this demurrer and accompanying motion to strike. The foundation of Plaintiff’s action is an alleged “agreement” between two business entities: Adan Alvarez Services and JanSan Facility Solutions. (See Docket No. 59, FAC). Attached as Exhibit 1 to the FAC is the alleged written agreement between the parties that is unsigned by Plaintiff. (FAC 10, Ex. 1). Plaintiff did not sign the agreement and the Defendant subsequently requested amendments to the terms for the special services set forth in the alleged agreement. However, the agreement alleged in the FAC was never finalized by the parties and therefore, there is no valid written contract upon which suit can be brought. The FAC does not specify whether the contract is written, oral, or implied rendering the FAC uncertain. (Code Civ. Proc., § 430.10, sub. (f) and (g).) Further, the invoices submitted in Exhibit 1 of the FAC, to the extent they are purported to be part of the “contract”, are payable to a different entity, “AA 1 MEMORANDUM OF POINTS AND AUTHORITIES 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Services & Maintenance.” (FAC, Exhibit 1). As set forth herein, this entity’s fictitious business statement does not belong to Plaintiff and there is no such fictitious business name registered to Plaintiff precluding its ability to maintain this action and Plaintiff lacks standing. Plaintiff’s second cause of action for breach of the covenant of good faith and fair dealing also fails to state sufficient facts upon which such a claim may be brought. There is no additional remedy or alleged facts distinct from the breach of contract claim to support this cause of action. This cause of action is supported by the same facts as the breach of contract claim. As set forth below, every contract contains a covenant of good faith and fair dealing yet to support a cause of action there must be something more than a failure to comply with the terms of the contract. Plaintiff brings its third cause of action for fraudulent inducement against Defendant. Plaintiff provides no facts to support a cause of action for fraudulent inducement. There are no facts to establish defendant entered into the contract with the intend to not to perform. In fact, in the FAC, Plaintiff alleges payments were made under the “contract” which evidences that Defendant formed no such intent at the time the contract was allegedly entered into. (FAC | 14.). Therefore, the third cause of action fails for failure to state facts sufficient to support a claim against Defendant. Plaintiff’s fourth cause of action fails to state facts sufficient to support the alleged “unfair and unlawful business practice” of misrepresentation as indicated with regard to the fraudulent inducement. As that claim fails, there is no “unfair or unlawful” business practice upon which to base this cause of action. Further, disgorgement of profits and Plaintiff’s prayer for attorneys’ fees under the UCL are barred as a matter of law and should be stricken. As set forth in detail below, Defendants’ general and special demurrers should be granted with prejudice and leave to amend should be denied. II. APPLICABLE STANDARDS A general demurrer challenges the legal sufficiency of the complaint on the grounds it fails to state facts sufficient to constitute a cause of action. (Code Civ. Proc., § 430.10,(e)). While a demurrer accepts as true all properly pled allegations of a complaint, “[ T]he court does not, however, assume the truth of contentions, deductions or conclusions of law.” (Aubry v. Tri-City 2 MEMORANDUM OF POINTS AND AUTHORITIES 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Hospital Dist. (1992) 2 Cal.4th 962, 967.) A plaintiff “must state with reasonable particularity the facts supporting the statutory elements of the violation” and those facts must not be vague or conclusory. (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 619; Rakestraw v. California Physicians’ Service (2000) 81 Cal.App.4th 39, 43.) A special demurrer challenges other defects in the complaint, including whether a pleading is uncertain. (Code Civ. Proc., § 430,(f)). The term “uncertain” includes the issue of whether a pleading is “ambiguous and unintelligible” and should be sustained if the complaint is drafted in such a manner that the defendant cannot reasonably respond. (Code Civ. Proc., § 430,(f); Khoury, supra, 14 Cal.App.4th 612). In addition, the Court may strike a request for punitive damages and attorneys’ fees if the facts alleged do not support this relief. (Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166; Code Civ. Proc., § 436,(a) [authorizing Court to “[s]trike out any irrelevant, false or improper matter inserted in any pleading.”) III. PLAINTIFF'S FIRST CAUSE OF ACTION FOR BREACH OF CONTRACT] FAILS TO STATE SUFFICIENT FACTS A VALID CONTRACT EXISTS A cause of action for breach of contract requires the pleading of a valid contract. A written contract may be pleaded either by its terms set out verbatim in the complaint or a copy of the contract attached and properly incorporated by reference. (Otworth v. Southern Pac. Transportation Co. (1985) 166 Cal. App.3d 452, 459.) Code of Civil Procedure section 430.10(g) provides a demurrer should be sustained “In an action founded upon a contract, it cannot be ascertained from the pleading whether the contract is written, is oral, or is implied by conduct.” The elements for a breach of contract action are: (1) parties are capable of contracting; (2) mutual consent; (3) a lawful object; (4) sufficient cause or consideration; (5) plaintiff's performance or excuse for failure to perform; (6) defendant’s breach; and (7) damages. ! The alleged “contract” is not signed by Plaintiff. (FAC, Ex. 1). In fact, JanSan subsequently repudiated the contract, including the specific term upon which Plaintiff relies heavily in its FAC: the 5% late fee charges. (Declaration of Christina Vold (“Vold Dec.”) § 3, Ex. 1 Civ. Code, § 1550, 1605; Stockton Mortgage, Inc. v. Tope (2014) 233 Cal.App.4th 437, 453; Gomez v. Lincare, Inc. (2009) 183 Cal. App.4™" 508, 525. 3 MEMORANDUM OF POINTS AND AUTHORITIES 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1). Because the contract is not signed by Plaintiff and Defendant subsequently disputed the contract, the agreement was never finalized by the parties and therefore is no written contract upon which this claim can be based. Therefore, it is uncertain from the pleadings whether Plaintiff alleges their contract is written, oral or implied. At the demurrer stage, the court must conditionally consider parol evidence to determine if it would be relevant to determine whether the agreement is susceptible to the interpretation alleged by the plaintiff in the complaint. (George v. Automobile Club of Southern California (2011) 201 Cal.App.4th 1112, 1122.) Here, the email from Ms. Vold shows the alleged contract unsigned by Plaintiff was repudiated, or at best still being negotiated, by Defendants such that there is no written contract upon which suit can be brought. Where a defendant negates any essential element of a particular cause of action the court should sustain the demurrer as to that cause of action. (Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 880.) The alleged “written agreement” does not constitute a valid contract and therefore cannot be the basis of the breach of contract cause of action. We are left without facts to determine whether Plaintiff contends the contract is written, oral or implied and as such the demurrer to the first cause of action should be sustained. A. Plaintiff Cannot Lawfully Maintain this Action and Lacks Standing: As part of the “agreement” and allegations of breach, Plaintiff submits various invoices it alleges were unpaid by JanSan constituting the breach of contract. (FAC, Ex. 1). However, the alleged unpaid invoices list the “supplier” as “AA Services & Maintenance,” and not Plaintiff Adan Alvarez Services. In fact, AA Services & Maintenance is a business entity that does not exist on file with the Orange County Recorder. (Defendant’s Request for Judicial Notice (“RIN Ex. 1). Bus. & Prof. Code Section 17918 prohibits any person from maintaining an action in any court under a fictitious business name until the fictitious business name statement has been filed, executed, and published as required by law. Here, the alleged unpaid invoices are in the name of AA Services & Maintenance which is different from Plaintiff’s entity name, Adan Alvarez Services. No such fictitious business name exists for AA Services & Maintenance in the County of Orange. (RJN Ex. 1). The fictitious business name of “AA Services” is not registered to Mr. Alvarez but is registered to Adolfo Arenas with an entirely different address listed. (RIN Ex. 2). 4 MEMORANDUM OF POINTS AND AUTHORITIES 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 As Plaintiff is prohibited by law from maintaining any action for recovery by a fictitious business name that is not properly registered and therefore lacks standing, the demurrer should be sustained as to all causes of action with prejudice. IV. PLAINTIFF'S BREACH OF COVENANT OF GOOD FAITH AND FAIR DEALING CLAIM FAILS TO STATE SUFFICIENT FACTS TO SUPPORT THE ALLEGATION The covenant of good faith and fair dealing exists in every contract and while a breach of the covenant will always result in a breach of the contract, the breach of a contract term will not necessarily result in a breach of the covenant. (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1393-94.) In order to support a cause of action for breach of the covenant of good faith and fair dealing, the alleged breach must involve something beyond the breach of a contractual duty itself. (Id. at p. 1394.) Here, Plaintiff’s allegation to support its cause of action for breach of the covenant of good faith and fair dealing rests on the same facts as the breach of contract: alleged non-payment of invoices for services. (FACqq 23-25, 30). Since this cause of action cannot be maintained upon the breach of a contractual term and Plaintiff’s FAC contains no other allegations beyond the non-payment, the demurrer to this cause of action should be sustained without leave to amend. V. PLAINTIFF’S THIRD CAUSE OF ACTION FAILS TO ALLEGE DEFENDANTS INTENDED NOT TO PAY TIMELY AT THE TIME THE CONTRACT WAS FORMED An action for promissory fraud must allege: (1) a knowingly false representation by defendant; (2) an intent to deceive or induce reliance; (3) justifiable reliance by the plaintiff; and (4) resulting damages®. Every element must be specifically pleaded to survive a demurrer.? It must be pled specifically that at the time the promise was made the defendant’s intent was not to perform the promise.* A party alleging fraud or deceit in connection with a contract must establish tortious conduct independent of the breach itself and the conduct is in violation of some independent duty arising from tort law. (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 2 Service by Medallion, Inc. v. Clorox Co. (1996) 44 Cal.App.4th 1807, 1816. 3 Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal. App.4th 153, 157. * Food Safety Net Services v. Eco Safe Systems USA, Inc. (2012) 209 Cal.App.4th 1118, 1131. 5 MEMORANDUM OF POINTS AND AUTHORITIES 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Cal.4th 979, 990.) Promissory fraud is a subspecies of fraud and deceit. An action for promissory fraud may lie where a defendant fraudulently induces the plaintiff to enter into a contract. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 973-974.) However, a promise of future conduct is actionable as fraud only if made without a present intent to perform. (Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 481.) More than a simple breach of contract must be alleged. Plaintiffs specific allegations indicate the “intent” not to pay timely arose sometime after the contract was formed and not at the time of formation. Plaintiff claims “Defendants” continued failure to fulfill its written and oral promises made at the time of contracting with Plaintiff, which makes them liable for fraudulent inducement.” (FAC 9 34). This statement indicates at some point after the agreement was made, Defendant decided not to pay timely. Plaintiff admits there were payments made to it by JanSan which contradict its allegations of fraudulent inducement. (FAC 917). Fraud must be pled with specificity and not in a general or conclusory way and the case of fraudulent inducement, it must be pled specifically that the intent to defraud was formed at the time the agreement was formed.’ Here, there are no facts to support a claim for fraudulent inducement and the demurrer should be sustained without leave to amend. A. Plaintiff’s Claim for Fraud Fail Under the Economic Loss Rule: Under the economic loss rule, a plaintiff suffering only economic damages is precluded from recovering in tort for a breach of contract by merely restating the contractual obligations.® The purpose of the economic loss rule is to prevent the laws of contract and torts from dissolving one another by precluding a claim in tort seeking recovery of purely economic loss due to disappointed expectations when the claim is based on a breach of a contractual term.” When a plaintiff seeks the same economic losses arising from the alleged breach of contract without setting forth facts to show the breach of a duty independent from the contract, fraud claims are barred and should > Lazar v. Superior Court (1996) 12 Cal.4th 631, 644. ¢ Aas v. Superior Court (2000) 24 Cal.4th 627, 643, superseded by statute on other grounds. 7 Robinson Helicopter Co., Inc., supra, 34 Cal.4th at p. 988; Marshall v. Galvanoni (E.D. Cal., Nov. 8, 2017, No. 2:17CV00820KIMCKD) 2017 WL 5177764, at *5-6. 6 MEMORANDUM OF POINTS AND AUTHORITIES 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 not be permitted to proceed.® Here, Plaintiff bases the fraudulent inducement claim on the same facts as its breach of contract claim, failure to pay on a timely basis. (FAC { 35-36). There is no independent breach alleged and Plaintiff is only seeking the economic damages as a result of the alleged failure to pay timely and the same damages are sought. Therefore, the demurrer should be sustained without leave to amend. VI. PLAINTIFF'S FOURTH CAUSE OF ACTION FAILS AS IT IS BASED ON ALLEGATIONS OF FRAUDULENT INDUCEMENT It is uncertain whether Plaintiff seeks to base its fourth cause of action on the “unfair”, “unlawful” or “fraudulent” prong of Business & Professions Code § 17200. (Code Civ. Proc., § 430.010(f)). Plaintiff alleges Defendant JanSan violated California’s Unfair Competition Law (“UCL”) by “misrepresenting to Plaintiff that it would pay Plaintiff for its services rendered, according to the terms of the Agreement but failing to do so.” (FAC 9 41). Plaintiff furthers this allegation by stating “Defendant has violated the UCL by failing and refusing to pay Plaintiff for services rendered, according to the terms of the Agreement between the parties and fraudulently inducting Plaintiff to enter into the Agreement, based upon Defendant’s false promises.” (FAC 44). As set forth in detail above, a fraudulent inducement claim cannot proceed unless it can be shown there has been a breach independent of the contract terms themselves.? As such, the UCL claim also fails. The UCL does not independently proscribe specific acts, but broadly prohibits any unlawful or unfair business practice and borrows the “violations” from other acts forbidden by law or deemed to be unfair acts or practices. (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1359; Gregory v. Albertson's, Inc. (2002) 104 Cal. App.4th 845, 851.) The test for fraud under the UCL is there the public is likely to be deceived. (Nolte v. Cedars-Sinai Medical Center (2015) 236 Cal.App.4th 1401, 1409.) Plaintiff has failed to allege facts to show the public was likely to be deceived such that this claim must fail. (Bardin v. DaimlerChrysler Corp. (2006) 136 Cal.App.4th 1255, 1271.) Also, as set forth above, Plaintiff has failed to plead sufficient facts to 8 Arena Restaurant and Lounge LLC v. Southern Glazer's Wine and Spirits, LLC (N.D. Cal., Apr. 16, 2018, No. 17-CV-03805-LHK) 2018 WL 1805516, at *6. ® Robinson Helicopter Co., Inc., supra, 34 Cal.4th 979. 7 MEMORANDUM OF POINTS AND AUTHORITIES 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 support a claim for fraudulent inducement upon which its UCL claim rests. As the predicate claim fails, so does the UCL claim. (Bardin, supra, 136 Cal. App.4th 1255.) A. Disgorgement of Profits Is Not an Available Remedy Under the UCL in an Individual Action Plaintiff seeks disgorgement of “ill-gotten gains” through its UCL claim. (FAC 9 46, Prayer, {7). Disgorgement of profits is not an available remedy in an individual action under the UCL. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1148-49.) As such, Plaintiff's fourth cause of action fails to state a claim upon which such relief can be granted and Defendant’s demurrer should be sustained, without leave to amend. VII. PLAINTIFF IS NOT ENTITLED TO PUNITIVE DAMAGES/ATTORNEYS’FEES A. Attorneys’ Fees: Plaintiff seeks attorneys’ fees under the UCL, fourth cause of] action. (FAC 946). Under the “American Rule” attorneys’ fees are only recoverable if authorized by statute or expressly under contract. (Code Civ. Proc., § 1021; Downen's, Inc. v. City of Hawaiian Gardens Development Agency (2001) 86 Cal.App.4th 856, 860; County of Santd Barbara v. David R. (1988) 200 Cal.App.3d 98, 101.) Here, the alleged contract does not expressly provide for attorneys’ fees. (FAC, Ex. 1). No reference is made in the FAC to any statute that permits recovery of attorneys’ fees. The UCL does not provide for attorney fees. The relief is limited to injunctive relief and restitution.'? Therefore, Plaintiff’s prayer for attorneys’ fees should be stricken without leave to amend. B. Punitive Damages: Plaintiff seeks punitive damages but has failed to allege the] predicate facts necessary to support such an award. (FAC 39). Mere assertions an intentional tort was committed are not sufficient to warrant a claim for punitive damages. (Grieves, supra, 157 Cal. App.3d at p. 166.) Without any factual assertions to support a claim for punitive damages, the Court should strike this prayer for relief. (Grieves, supra, 157 Cal. App.3d 159 (reversing denial of motion to strike punitive damage claim because “[n]ot only must there be circumstances of oppression, fraud or malice, but facts must be alleged in the pleading to support such a claim”); © Davis v. Ford Motor Credit Co. LLC (2009) 179 Cal.App.4th 581, 600; Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 179. 8 MEMORANDUM OF POINTS AND AUTHORITIES 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1042 (directing Superior Court to strike prayer for punitive damages because the complaint was “devoid of any factual assertions supporting conclusion [defendants] acted with oppression, fraud, or malice.”). As set forth above, Plaintiff's FAC does not state facts sufficient to support a claim for fraudulent inducement resulting in no basis for a prayer of punitive damages and Defendants’ demurrer should be sustained without leave to amend and any reference to punitive damages stricken. VIII. DEFENDANTS’ SPECIAL DEMURRER FOR UNCERTAINTY SHOULD BE SUSTAINED A special demurrer challenges other defects in the complaint, including whether the pleading is uncertain. (Code Civ. Proc., § 430.10,(f)). “Uncertainty” includes the issue whether the pleading is “ambiguous and unintelligible”. (/bid.) A demurrer for uncertainty should be sustained if the complaint is drafted in such a manner that the defendant cannot reasonably respond, i.e., the defendant cannot determine what issues must be admitted or denied. (Khoury, supra, 14 Cal.App.4th at p. 616.) To defeat a special demurrer, the complaint must contain essential facts of the case with reasonable precision and with particularity sufficiently specific to acquaint defendant with the nature, source, and extent of each cause of action.!' Tt is an issue of fairness so as to give defendant such notice by the complaint that he may prepare his case. (Bauer, supra, 45 Cal.2d at p. 291; Wise v. Southern Pac. Co. (1963) 223 Cal.App.2d 50, 63.) Plaintiff’s first, third, and fourth causes of action consist of conclusory and vague statements related to alleged fraud. Plaintiff’s fourth cause of action is based exclusively on its fraud allegations. The FAC fails to state any facts to specifically identify the statements made and how it was “induced” into the contract by these statements. Lazar, supra, 12 Cal.4th at p. 644 [fraud must be pled with more specificity]. The FAC further fails to allege any facts other than conclusory statements to show Defendants formed the intent not to pay as the contract provided at the time it was formed. Based on these general statements Defendants are unable to determine the basis for any fraud allegations and therefore are unable to respond. As such, Defendants’ 1 Goldstein v. Healy (1921) 187 Cal. 206, 210; Smith v. Kern County Land Co. (1958) 51 Cal.2d 205, 209. 9 MEMORANDUM OF POINTS AND AUTHORITIES 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 special demurrer should be sustained. IX. PLAINTIFF SHOULD NOT BE GRANTED LEAVE TO AMEND There is no abuse of discretion to sustain a demurrer without leave to amend when there is no cause of action stated by law and where there is no possibility the defect can be cured. (Id. at 1332; Johnson v. County of Los Angeles (1983) 143 Cal.App.3d 298, 306.) In denying leave to amend the Court can consider a previous opportunity to amend and belated presentation of further amendments. (Del Mar Beach Club Owners Assn. v. Imperial Contracting Co. (1981) 123 Cal.App.3d 898, 914.) It is the plaintiff’s burden to propose how the complaint can be properly amended and if plaintiff declines to do so, leave to amend is appropriately denied. (Grossmont Union High School Dist. v. State Dept. of Education (2008) 169 Cal.App.4th 869, 875-76.) As set forth herein, all of Plaintiff’s claims are based on the premise there is a valid contract. If there is no valid contract, there are no claims such that any amendment would be futile. Additionally, if Plaintiff has no standing to enforce the alleged contract because of its failure to properly register a fictitious business name as required by law, the action cannot be maintained and likewise any amendment would be futile. (Bus. & Prof. Code, § 17918). Faced with these arguments, including supporting legal authority, Plaintiff only chose to amend and omit Defendant Christina Vold as an individual. The FAC does not attempt to provide more specific allegations of fraud, clarify Plaintiff’s entity status or address any of the remaining issues raised in this nearly identical second demurrer. These defects cannot be cured by an amendment. As such, Defendants’ demurrers should be sustained in their entirety and leave to amend should be denied. X. CONCLUSION For the reasons set forth herein, Defendants respectfully request the Court sustain its demurrer and dismiss the first amended complaint with prejudice. Dated: August 30, 2018 MAHONEY LAW GROUP, APC By: /s/Katherine J. Odenbreit Katherine J. Odenbreit Attorneys for Defendants 10 MEMORANDUM OF POINTS AND AUTHORITIES
