DEPARTMENT C33 LAW AND MOTION
Judge James L. Crandall
These are the Court’s tentative rulings. They may become orders if the parties do not appear at the hearing. The Court also might make a different order at the hearing. (Lewis v. Fletcher Jones Motor Cars, Inc. (2012) 205 Cal.App.4th 436, 442, fn. 1.)
If counsel wish to submit on the tentative ruling, please call the Court Clerk (657-622-5233) to notify the Court that all parties are submitting on the tentative and no appearance will be necessary. The tentative will then become the final ruling. If no one appears at the hearing the tentative will be the final ruling. Either side may appear and argue the Court’s tentative ruling.
PREVAILING PARTY SHALL GIVE NOTICE OF THE FINAL RULING TO EACH PARTY and PREPARE AN ORDER/JUDGMENT FOR THE COURT’S SIGNATURE IF THE MOTION IS DISPOSITIVE OF A PARTY OR THE CASE.
The Orange County Superior Court has implemented administrative orders, policies, and procedures noted on the Court’s website to address the limitations and restrictions presented during the COVID-19 pandemic at Civil Covid-19. Due to the fluid nature of this crisis, you are encouraged to frequently check the Court’s website at https://www.occourts.org/ for the most up to date information relating to Civil Operations.
APPEARANCES: “Unless otherwise ordered by the Court, all Unlimited and Complex proceedings will be conducted via telephonic appearance through CourtCall with each party/attorney having the option to appear by CourtCall video if the [Court], in [its] discretion, permits a video appearance instead of an audio appearance.” Based on Orange County Superior Court Third Amended Administrative Order No. 2020/06, paragraph 12(c), the Court requests that the parties appear by way of CourtCall. If a party is unable to appear by way of CourtCall, please contact the Court Clerk. Please see, Civil Limited Unlimited & Complex Appearance Process at:
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· Civil Court Reporter Pooling; and
· For additional information, please see the court’s website at Court Reporter Interpreter Services for additional information regarding the availability of court reporters.
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TENTATIVE RULINGS ON LAW & MOTION MATTERS
Date: April 15, 2021 - NOW AT 10:00 a.m.
Macabasco vs. CHI SIGMA PHI
Motion to Appear Pro Hac Vice filed by Plaintiffs Edgardo Castro and Jennifer Macabasco
The unopposed application of attorney Douglas E. Fierberg to appear pro hac vice for Plaintiffs Jennifer Macabasco and Edgardo Castro is hereby GRANTED pursuant to California Rules of Court, Rule 9.40.
Moving attorney to give notice.
2 Motions to Appear PHV: 6/3/21
Jury Trial: 8/9/21
Laguna Design Dunhill LLC vs. Sunset Premier Partners, Inc.
Motion for Leave to File Amended Complaint filed by Plaintiffs De Laguna Design Borrower, LLC and Laguna Design Dunhill LLC
Plaintiffs Laguna Dunhill LLC and DE Laguna Design Borrower, LLC’s motion to file a First Amended Complaint is GRANTED.
Code of Civil Procedure section 473, subdivision (a)(1), states in part, “The court may likewise, in its discretion, after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading or proceeding in other particulars; and may upon like terms allow an answer to be made after the time limited by this code.” Code of Civil Procedure section 576 states, “Any judge, at any time before or after commencement of trial, in the furtherance of justice, and upon such terms as may be proper, may allow the amendment of any pleading or pretrial conference order.”
The court's discretion should be exercised liberally in favor of amendments. (Nestle v. Santa Monica (1972) 6 Cal.3d 920, 939.) “If the motion to amend is timely made and the granting of the motion will not prejudice the opposing party, it is error to refuse permission to amend and where the refusal also results in a party being deprived of the right to assert a meritorious cause of action or a meritorious defense, it is not only error but an abuse of discretion.” (Morgan v. Superior Court (1959) 172 Cal.App.2d 527, 530.)
Plaintiffs state that the case when filed was brought as a breach of lease action for failure to pay charges due under the lease. Defendant has now vacated possession; therefore, Plaintiffs seek to amend the complaint to assert the additional breach and modify the request for damages.
Defendants have not opposed the Motion. Accordingly, leave to file an amended complaint is GRANTED.
Plaintiffs are to electronically file and serve the Second Amended Complaint within 10 court days.
Plaintiffs to give notice.
Jury Trial: 9/6/22
Moore vs. Moore
Demurrer to Second Amended Cross-Complaint filed by Cross-Defendant Richard J. Moore
The demurrer filed by cross-defendants Richard J. Moore, as Trustee of the Moore Marital Trust UA DTD 12/23/1986, The Moore Marital Trust UA DTD 12/23/1986 and Richard J. Moore, individually, to the tenth, eleventh and twelfth causes of action alleged in the Second Amended Cross-Complaint (“SACC”) filed by Cross-Complainant Michael Moore is MOOT, in part, OVERRULED, in part, and SUSTAINED, in part, with 20 days leave to amend.
Demurrer as to Richard D. Moore (“Richard”), individually:
The demurrer of Cross-Defendants to Cross-Complainant’s entire SACC on the grounds that there is a defect or misjoinder of party for Richard, individually, is MOOT. On March 25, 2021, Cross-Defendant Richard, as an individual was dismissed from the Cross-Complaint. (Opp., 2:12-14; ROA 147.)
Demurrer to the Tenth, Eleventh and Twelfth causes of action:
Cross-Defendants argue that the tenth, eleventh and twelfth causes of action related to the Salton Sea Loans violate the statute of frauds because they are based on an alleged modified note that is not signed by the parties to be charged. Paragraph 32 of the SACC alleges that on “August 12, 2009, Cross-Defendant the Moore Trust and Richard Sr. reduced the total amount of the Salton Sea Loan to $240,000, forgave any and all prior interest due (if any) on the Salton Sea Loan, and agreed to a five-year note at 2.76% which could be rolled over for another five years if needed.” (SACC, ¶ 32.) The Cross-Complaint states that this modification is attached to the SACC as Exhibit D, however, Exhibit D is not attached to the SACC. “An agreement to modify a contract that is subject to the statute of frauds is also subject to the statute of frauds.” (Secrest v. Sec. Nat'l Mortg. Loan Tr. 2002- 2 (2008) 167 Cal. App. 4th 544, 553.) Since no written agreement is attached to reflect the modification of the Salton Sea Note, the alleged agreement reducing the amount of the Note violates the statute of frauds.
Cross-Complainant argues that Cross-Defendants are estopped from asserting the statute of frauds because an exception to the statute of frauds applies. Specifically, Cross-Complainant contends that the SACC alleges the exceptions of promissory estoppel and partial performance.
“The doctrine of estoppel has been applied where an unconscionable injury would result from denying enforcement after one party has been induced to make a serious change of position in reliance on the contract or where unjust enrichment would result if a party who has received the benefits of the other’s performance were allowed to invoke the statute.” (Redke v. Silvertrust (1971) 6 Cal. 3d 94, 101; Ruinello v. Murray (1951) 36 Cal. 2d 687, 689.) “The party pleading estoppel must allege the facts giving rise thereto, and all the essential elements must be pleaded.” (Gressley v. Williams (1961)193 Cal. App. 2d 636, 641.)
In support of estoppel, the SACC alleges that “Cross-Complainant changed his position by not pursuing other repayment options/courses and on or about September 28, 2018, Cross-Complainant made a partial payment of approximately $14,000 towards the Salton Sea Loan to Richard Jr. and Moore Trust.” (SACC, ¶ 33.) The SACC further alleges that “Cross-Complainant parted with consideration in the amount of $14,000 in reliance upon the modification. If Cross-Defendants are allowed to keep the $14,000 and the modification is not enforced, Cross-Defendants will have been unjustly enriched.” (SACC, ¶ 34.) “Unconscionable injury results from denying enforcement of a contract after one party is induced by another party to seriously change position relying upon the oral agreement.” (Allied Grape Growers v. Bronco Wine Co. (1988) 203 Cal.App.3d 432, 444.) Here, Cross-Complainant has sufficiently alleged unconscionable injury since the SACC alleges that Cross-Complainant changed his position by not pursuing other repayment options and by making a partial payment. Accordingly, the SACC sufficiently alleges estoppel to estop Cross-Defendants from relying on the statute of frauds.
Tenth cause of action for declaratory relief:
To qualify for declaratory relief, a party has to demonstrate two essential elements: (1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the party’s rights or obligations. (Jolley v. Chase Home Financing, LLC (2013) 213 Cal.App.4th 872, 909.)
Cross-Defendants contend that the SACC does not allege an actual controversy. The SACC sufficiently alleges that an actual controversy exists as to the validity and actual amount owing under the Salton Sea Loan because “the actual amount owing, if any, under the Salton Sea Loan is substantially less than the amounts that have been claimed and continue to be claimed by Cross-Defendants.” (SACC, ¶ 36.)
Accordingly, the demurrer to the declaratory relief cause of action is OVERRULED.
Eleventh cause of action for accounting:
To state a cause of action for an accounting, a plaintiff must show that “a relationship exists between the plaintiff and defendant that requires an accounting, and that some balance is due the plaintiff that can only be ascertained by an accounting.” (Teselle v. McLoughlin (2009) 173 Cal. App. 4th 156, 179.) However, “a fiduciary relationship between the parties is not required to state a cause of action for accounting.” (Id.)
The SACC does not sufficiently allege that the alleged balance due can only be ascertained by an accounting. As Cross-Defendants contend, Cross-Complainant knows or can find out from his financial institutions how much he paid towards the debt. Therefore, the SACC does not sufficiently allege an accounting cause of action.
Accordingly, the demurrer to the accounting cause of action is SUSTAINED.
Twelfth cause of action for common counts:
“In California, it has long been settled the allegation of claims using common counts is good against special or general demurrers. [Citation.] The only essential allegations of a common count are ‘(1) the statement of indebtedness in a certain sum, (2) consideration, . . . , and (2) nonpayment.’ [Citation.] A cause of action for money had and received is stated if it is alleged that the defendant ‘is indebted to the plaintiff in a certain sum “for money had and received by the defendant for the use of the plaintiff.” ’[Citation.]” (Farmers Ins. Exch. v. Zerin (1997) 53 Cal.App.4th 445, 460.)
The SACC alleges that “Cross-Defendants became indebted to Cross-Complainant for money paid, laid out, and expended to Wiskenski for Cross-Defendants at Cross-Defendants’ special instance and request” and that “the amount remains due and unpaid despite Cross-Complainant’s demand. . .” (SACC, ¶ 41.)
Therefore, the SACC sufficiently alleges a cause of action for common counts.
Accordingly, the demurrer to the common counts cause of action is OVERRULED.
Cross-Defendants to give notice.
Jury Trial: 8/2/21
Adelhelm vs. Kia Motors America, Inc.
1. Demurrer to Complaint filed by Defendant Kia Motors America, Inc.
2. Motion to Strike Complaint filed by Defendant Kia Motors America, Inc.
Defendant Kia Motors America, Inc.’s Demurrers to the Third Fifth, Sixth and Seventh Causes of Action are SUSTAINED with ten days leave to amend.
Defendant Kia Motors America, Inc. demurs to the 3rd Cause of action, (Violation of the Song-Beverly Act § 1793.2(a)(3)), 6th cause of action (Fraud by Omission) and 7th cause of action (Violation of Consumers Legal Remedies Act) on that ground that each fails to state facts sufficient to constitute a cause of action.
Defendant also demurs to the 5th (Breach of the Implied Warranty of Merchantability), 6th and 7th causes of action on the ground that each is barred by the applicable statute of limitations.
Third Cause of Action for Violation of Song-Beverly Act § 1793.2(a)(3). Defendant demurs to the 3rd cause of action on the ground that it fails to state facts sufficient to constitute a cause of action because it “fails to identify any facility relevant to Plaintiffs’ claims or to allege in even cursory fashion what literature or replacement parts supposedly were unavailable to any such repair facilities. Merely alleging that KMA ‘failed to make available. . . sufficient service literature and replacement parts to effect repairs during the express warranty period’ (Complaint, ¶ 99), is insufficient to support an allegation under the Song-Beverly Act. It is merely a “contention” or “conclusion” that will not suffice to state a claim.”
In support of this argument, Defendant cites Blank v. Kirwan (1985) 39 Cal.3d 311, 318.
Pursuant to CC § 1793.2(a)(3), every manufacturer of expressly warranted goods must: “[m]ake available to authorized service and repair facilities sufficient service literature and replacement parts to effect repairs during the express warranty period.”
Plaintiffs allege that they took the Sportage in for a repairs on three occasions. Plaintiffs first took the car in for a knocking noise on 9/27/17. Complaint, ¶ 61. According to the complaint, the next repair was not until 6/7/19—almost two years later and it was for a jump start. Complaint, ¶ 62. The next repair was only six days later (6/13/19) but it was for a third problem, i.e. “complaints of the Vehicle only cranking intermittently.” Although Plaintiffs assert that they “continued to experience symptoms of the Engine Defect” after the third visit, they provide no specifics. There is no factual allegation to support the assertion that Defendant failed to “make available . . . sufficient service literature and replacement parts to effect repairs . . .”
Accordingly, Plaintiffs do not plead sufficient facts to constitute the cause of action and Defendant’s demurrer to the 3rd c/a is SUSTAINED with ten days leave to amend.
Fifth Cause of Action for Breach of the Implied Warranty of Merchantability. Defendant argues the 5th cause of action is barred by the applicable four-year statute of limitations found in delayed discovery, fraudulent concealment and tolling arguments are insufficient to plead around the statute of limitations defense.
The four-year statute of limitations under Comm. Code § 2725 applies to claims under the Song-Beverly Act, including a claim for breach of warranty. Krieger v. Nick Alexander Imports, Inc. (1991) 234 Cal.App.3d 205, 215. Section 2725 reads, in pertinent parts:
(1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it.
(2) A cause of action accrues when the breach occurs, regardless of the aggrieved party’s lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.
. . .
(4) This section does not alter the law on tolling of the statute of limitations nor does it apply to causes of action which have accrued before this code becomes effective.
However, although claims under § 2725 typically arise upon tender of delivery, a Song-Beverly claim is different. The Song-Beverly Act provides: “[t]he duration of the implied warranty of merchantability ... shall be coextensive in duration with an express warranty which accompanies the consumer goods, provided the duration of the express warranty is reasonable; but in no event shall such implied warranty have a duration of less than 60 days nor more than one year following the sale of new consumer goods to a retail buyer.” CC § 1791.1(c).
As the court explained in Mexia v. Rinker Boat Company, Inc. (2009) 174 Cal.App.4th 1297, 1309: “By giving the implied warranty a limited prospective existence beyond the time of delivery, the Legislature created the possibility that the implied warranty could be breached after delivery. As discussed above, this is a change from the California Uniform Commercial Code, under which the implied warranty could be breached only at the time of delivery.” Section 1791.1(c) recognizes that a warranty on goods subject to Song-Beverly is a warranty that extends to future performance. Krieger v. Nick Alexander Imports, Inc. (1991) 234 Cal.App.3d 205, 217 (“A promise to repair defects that occur during a future period is the very definition of express warranty of future performance, not only under the Act (Civ. Code, § 1791.2), but also in the California Uniform Commercial Code section 2313.”) However, under § 1791.1(c), the implied warranty does not extend “more than one year from the sale.”
Therefore, any claim for a breach of implied warranty of merchantability claim must be filed no later than five years from the date of tender of delivery or, in this case, 10/2/19. This action was not filed until 9/18/20.
In their complaint, Plaintiffs attempt to plead delayed discovery, fraudulent concealment and tolling. If successfully alleged, any one of those theories could extend the statute of limitations beyond 10/2/19.
Delayed discovery. “[U]nder the delayed discovery rule, a cause of action accrues and the statute of limitations begins to run when the plaintiff has reason to suspect an injury and some wrongful cause, unless the plaintiff pleads and proves that a reasonable investigation at that time would not have revealed a factual basis for that particular cause of action. In that case, the statute of limitations for that cause of action will be tolled until such time as a reasonable investigation would have revealed its factual basis.” Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 803 (Fox). A plaintiff asserting delayed discovery, “must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence. In assessing the sufficiency of the allegations of delayed discovery, the court places the burden on the plaintiff to show diligence; conclusory allegations will not withstand demurrer.” Fox, 35 Cal.4th at 808 (internal quotation marks and citations omitted).
Plaintiffs make the conclusory statement that they could not have discovered the facts giving rise to their claims until “shortly before this action was filed” but the allegations do not show the “time and manner of discovery” nor is there any showing of diligence. See Complaint, ¶¶ 55-58
Fraudulent concealment. “A close cousin of the discovery rule is the well accepted principle ... of fraudulent concealment. It has long been established that the defendant’s fraud in concealing a cause of action against him tolls the applicable statute of limitations, but only for that period during which the claim is undiscovered by plaintiff or until such time as plaintiff, by the exercise of reasonable diligence, should have discovered it.” Bernson v. Browning-Ferris Industries (1994) 7 Cal.4th 926, 931.
“When a plaintiff alleges the fraudulent concealment of a cause of action, the same pleading and proof is required as in fraud cases: the plaintiff must show (1) the substantive elements of fraud, and (2) an excuse for late discovery of the facts. With respect to ... the belated discovery, the complaint must allege (1) when the fraud was discovered; (2) the circumstances under which it was discovered; and (3) that the plaintiff was not at fault for failing to discover it or had no actual or presumptive knowledge of facts sufficient to put him on inquiry.” Community Cause v. Boatwright (1981) 124 Cal.App.3d 888, 900.
Plaintiffs’ allegations of fraudulent concealment are generic and seem unrelated to Plaintiffs’ individual claims. Plaintiffs allege: “Defendant knew since 2009, if not earlier, that the 2011-2019 KIA Optima, 2011-2019 KIA Sportage, 2012-2019 KIA Sorento, 2011-2019 Hyundai Sonata, and 2013-2019 Hyundai Santa Fe vehicles equipped with a 2.0 or 2.4L engine . . . contained one or more design and/or manufacturing defects in their engines” that caused a knocking in the engine and led to catastrophic engine failure and non-collision fires. Complaint, ¶ 16. See also Complaint, ¶¶ 17-41. Plaintiffs allege that Defendant actively concealed this defect by conducting one or more recall campaigns and other efforts directed to problems with the engines. Complaint, ¶¶ 42-47, 51 and 53. Plaintiffs allege that they “had no way of knowing about Defendant’s deception with respect to the Engine Defect until the defect manifested itself and Defendant was unable to repair it after a reasonable number of repair attempts.” Complaint, ¶ 55.
However, none of the defects to Plaintiffs’ car involved a fire and only one involved an engine. The other defects involved the battery and the starter so it is unclear how the repair attempts either kept Plaintiffs from learning of the concealed defect or led them to discover the concealed defect. Complaint, ¶¶ 61-63. Plaintiffs do not allege when or how they learned of the concealed defect, only that they learned of it “shortly before this action was filed.” Complaint, ¶ 56.
Fraudulent concealment is not sufficiently alleged.
Tolling. Plaintiffs allege three forms of tolling: (1) tolling due to repairs; (2) equitable estoppel; and (3) tolling under American Pipe & Construction Co. v. Utah (1974) 414 U.S. 538, 554. Plaintiff does not sufficiently allege facts to support any assertion of tolling.
“A defendant may be equitably estopped from asserting a statutory or contractual limitations period as a defense if the defendant’s act or omission caused the plaintiff to refrain from filing a timely suit and the plaintiff’s reliance on the defendant’s conduct was reasonable.” Superior Dispatch, Inc. v. Insurance Corp. of New York (2010) 181 Cal.App.4th 175, 186 (internal citations omitted). “A party claiming an estoppel must prove four elements: (1) the party to be estopped must know the facts; (2) the estopped party must intend that his conduct shall be acted upon, or must act in a way that causes the other party to believe that was his intent; (3) the party asserting estoppel must be unaware of the true facts; and (4) he must detrimentally rely on the other party’s conduct.” Estate of Bonzi (2013) 216 Cal.App.4th 1085, 1106. “Tolling during a period of repairs generally rests upon the same legal basis as does an estoppel to assert the statute of limitations, i.e., reliance by the plaintiff on the words or actions of the defendant that repairs will be made.” Cardinal Health, 169 Cal.App.4th at 133-134.
Plaintiffs do not allege that they refrained from filing suit based on Defendant’s words or actions that repairs would be made. They do not allege how they relied on Defendant’s words or actions or how they were damaged by any reliance.
Plaintiffs also argue that the applicable statutes of limitations were tolled under the class action tolling rule articulated in American Pipe & Construction Co. v. Utah (1974) 414 U.S. 538, 554 under which “the commencement of a class action suspends the applicable statute of limitations as to all asserted members of the class who would have been parties had the suit been permitted to continue as a class action.” Plaintiffs argue the statutes of limitations were tolled by two federal class actions: (1) Wallis v. Kia Motors America, Inc. (C.D. Cal. No. 8:16-cv-01033), filed on 6/2/16 and dismissed on 11/7/16; and (2) In re: Kia Engine Litigation (C.D. Cal. No. 8:17-cv-00838), filed on 5/10/17 and still pending. Complaint, ¶¶ 71-79.
These allegations do not help Plaintiffs. A recent case from our appellate district, Montoya v. Ford Motor Company (2020) 46 Cal.App.5th 493, 503, held that the statute of limitations is not tolled during a second class action, particularly where it would defeat “the efficient class action feature that seeks to bind all members of the class into one judgment.”
As the Montoya court stated at the outset of the case (p. 494): “The question of whether the equitable tolling made possible in American Pipe should extend to a second class action is a question our federal compatriots have addressed at some length, and we find ourselves in agreement with their resolution of the issue. Therefore, in this case we determine that to toll the statute of limitations during the period of a second class action contravenes the judicial economy and efficiency that American Pipe was trying to achieve.”
Thus, Plaintiffs are only entitled to just over five months of tolling from the Wallis action.
Defendant’s demurrer to the 5th cause of action is SUSTAINED with ten days leave to amend.
Sixth Cause of Action for Fraud by Omission and Seventh Cause of Action for Violation of Consumers Legal Remedies Act. The sixth and seventh causes of action are both based on Defendant’s alleged concealment of a defective engine “susceptible to sudden and premature failure.” Complaint, ¶¶ 110-131, quoted portion at ¶ 122. Defendant argues the 6th c/a and 7th c/a are barred by the applicable three-year statute of limitations. CC § 338; CC § 1783. The claims are subject to a three-year statute of limitations and, absent any delayed discovery, equitable estoppel or tolling, they are time-barred. As set forth above, Plaintiffs’ allegations of delayed discovery, equitable estoppel and tolling are not sufficient to plead around the time bar.
Defendant also argues that the sixth and seventh causes of action fail to plead facts sufficient to state the causes of action. Plaintiffs claim that Defendant concealed the fact that the engine used in Plaintiffs’ car was faulty. “The elements of an action for fraud and deceit based on concealment are: (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage. Fraud must be pleaded with specificity rather than with general and conclusory allegations.” Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248 (internal quotation marks and citations omitted); see also Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1472 (“the requirement that ‘fraud must be pleaded with specificity . . .’ applies equally to a cause of action for fraud and deceit based on concealment”).
A duty to disclose supporting a claim of fraud by concealment only arises in four circumstances: “(1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations but also suppresses some material facts.” LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336. As the court explained in Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 311: “Where, as here, a fiduciary relationship does not exist between the parties, only the latter three circumstances may apply. These three circumstances, however, presuppose the existence of some other relationship between the plaintiff and defendant in which a duty to disclose can arise. A duty to disclose facts arises only when the parties are in a relationship that gives rise to the duty, such as seller and buyer, employer and prospective employee, doctor and patient, or parties entering into any kind of contractual arrangement.” (Internal quotation marks and citations omitted.)
In other words, the duty to disclose only arises where there is a fiduciary relationship or there is a “transaction” between the plaintiff and defendant. Bigler-Engler, 7 Cal.App.5th at 311-312. “Such a transaction must necessarily arise from direct dealings between the plaintiff and the defendant; it cannot arise between the defendant and the public at large.” Bigler-Engler, 7 Cal.App.5th at 312.
Plaintiffs fail to allege a “transaction” between themselves and Defendant. Plaintiffs allege that Defendant “manufactured and or distributed” the Sportage. Complaint, ¶ 9. They further allege that the purchased the Sportage “from a person or entity engaged in the business of manufacturing, distributing, or selling consumer goods at retail.” They do not allege that they entered into any direct transaction or other relationship with Defendant.
In the absence of a transaction, Plaintiffs’ claim of fraudulent concealment is not sufficiently pled.
Further, Plaintiffs argue they sufficiently alleged, in ¶¶ 15-53, 61-63, 113-116, that Defendant had exclusive knowledge of material facts which it did not disclose and actively concealed those material facts. Those paragraphs generally allege that Defendant knew or should have known, since 2009, that certain of its 2011-2019 vehicles included an engine defect that led to stalling while driving and non-collision fires. Plaintiffs do not allege that the Sportage they purchased stalled or caught fire. They do not allege that their vehicle suffered from the alleged “Engine defect.” Plaintiffs fail to allege exactly what Defendant failed to disclose or actively concealed relating to their purchase of their car. The allegations of concealment are not sufficiently tied to Plaintiffs’ individual claims. Compare Gutierrez v. Carmax Auto Superstores California (2018) 19 Cal.App.5th 1234, 1239, 1239, 1261 (the facts not disclosed were "the existence of the recall” and the fact that the part had not been replaced in accordance with the recall.")
Finally, Plaintiffs’ fraud by omission cause of action is barred by the economic loss rule. Under California’s economic loss rule, “where a purchaser’s expectations in a sale are frustrated because the product [she] bought is not working properly, her remedy is said to be in contract alone, for she has suffered only economic losses.” Robinson Helicopter, Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988 (internal quotation marks and citations omitted).
Economic loss consists of “damages for inadequate value, costs of repair and replacement of the defective product or consequent loss of profits—without any claim of personal injury or damages to other property.” Id. (internal quotation marks and citations omitted). “The economic loss rule requires a purchaser to recover in contract for purely economic loss due to disappointed expectations, unless [she] can demonstrate harm above and beyond a broken contractual promise.” Id.
Here, the alleged fraud by omission resulted in purely economic loss. The Complaint does not claim that the Sportage’s alleged defects caused any personal injury or damage to property other than the vehicle, only that Plaintiffs were induced to enter into the purchase of the vehicle. Complaint, ¶ 117.
Defendant’s demurrers to the 6th and 7th causes of action are SUSTAINED with 10 days leave to amend.
Defendant’s motion to strike Plaintiffs’ prayer for punitive damages is MOOTED by the ruling on the demurrer.
Jury Trial: 6/19/23
Duarte vs. Lawrence Roll Up Doors, Inc.
1.Motion to Compel Production filed by Plaintiff Ezra Duarte
2.Motion to Compel Further Responses to Special Interrogatories filed by Plaintiff Ezra Duarte
Plaintiff’s motion to compel further responses and responses and responsive documents to requests for production of documents, set one is GRANTED.
Plaintiff served requests for production, set one on 6/12/20. Defendant served responses on 8/7/20. The parties met and conferred and agreed to extend Plaintiff’s deadline to move to compel to 1/7/21 in order to facilitate review of supplemental responses. This motion was timely filed on 1/7/21.
Code of Civil Procedure section 2031.210(a) states:
“(a) The party to whom a demand for inspection, copying, testing, or sampling has been directed shall respond separately to each item or category of item by any of the following:
(1) A statement that the party will comply with the particular demand for inspection, copying, testing, or sampling by the date set for the inspection, copying, testing, or sampling pursuant to paragraph (2) of subdivision (c) of Section 2031.030 and any related activities.
(2) A representation that the party lacks the ability to comply with the demand for inspection, copying, testing, or sampling of a particular item or category of item.
(3) An objection to the particular demand for inspection, copying, testing, or sampling.”
Code of Civil Procedure 2031.310, states, in part, “On receipt of a response to a demand for inspection, copying, testing, or sampling, the demanding party may move for an order compelling further response to the demand if the demanding party deems that any of the following apply: (1) A statement of compliance with the demand is incomplete. A representation of inability to comply is inadequate, incomplete, or evasive. An objection in the response is without merit or too general.
(b) A motion under subdivision (a) shall comply with both of the following: (1) The motion shall set forth specific facts showing good cause justifying the discovery sought by the demand. (2) The motion shall be accompanied by a meet and confer declaration.
(c) Unless notice of this motion is given within 45 days of the service of the verified response, or any supplemental verified response, or on or before any specific later date to which the demanding party and the responding party have agreed in writing, the demanding party waives any right to compel a further response to the demand.”
Code of Civil Procedure section 2017.010 states, “Unless otherwise limited by order of the court in accordance with this title, any party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action or to the determination of any motion made in that action, if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence. Discovery may relate to the claim or defense of the party seeking discovery or of any other party to the action. Discovery may be obtained of the identity and location of persons having knowledge of any discoverable matter, as well as of the existence, description, nature, custody, condition, and location of any document, electronically stored information, tangible thing, or land or other property.”
Here, the only remaining disputed RFP is No. 25, which states:
“All DOCUMENTS REFLECTING the qualifications and performance of the person(s) who have worked in PLAINTIFF’S position(s) since PLAINTIFF’S termination, including resumes, CVs, job applications, work histories, education, performance evaluations, write-ups, warnings, and written confirmations of verbal counseling.”
Defendant’s amended written response to RFP No. 25, served on 4/2/21, states in part, “Responding Party will produce all non-privileged documents responsive to this request in Responding Party’s possession, custody and/or control that Responding Party has been able to locate following a diligent search and reasonable inquiry.”
Defendant’s amended response complies with Code of Civil Procedure section 2031.210(a). If Defendant has not already done so, Defendant shall produce all documents responsive to RFP No. 25 within ten days.
Defendant shall pay sanctions in the amount of $450 to Plaintiff for causing Plaintiff to bring this motion. (Code of Civ. Proc. § 2031.300(c).)
Motion No. 2 – Motion to Compel Further Responses to Plaintiff’s Special Interrogatories, Set One
Withdrawn by moving party.
Jury Trial: 9/7/21
Verduzco vs. Concerto Health Services, Inc.
1. Motion to Compel Production filed by Plaintiff Patricia Verduzco
2. Motion to Compel Production filed by Plaintiff Patricia Verduzco
Plaintiff served Requests for Production, Set Two on Defendant Concerto Health Services, Inc. Forootan Dec., ¶ 2, Exhibit A.
Defendant served objections and responses on July 27, 2020. Forootan Dec., (ROA 50), ¶ 3, Exhibit B.
On August 31, 2020, Plaintiff’s counsel sent a meet and confer letter regarding the responses. Forootan Dec., (ROA 50), ¶ 4, Exhibit C.
On September 21, 2020, Plaintiff’s counsel spoke with Defendant’s counsel who offered to look into information to be provided to Plaintiff so that Concerto Health Services, Inc. could be dismissed. However, the information was not provided, so Plaintiff followed up and learned that Defendant was “unable to move forward to provide substantive responses.” Forootan Dec., (ROA 50), ¶ 6, Exhibit E.
By this motion, Plaintiff seeks to compel further responses to Requests 46-155.
Requests 46-107 seek documents supporting Defendant’s 1st-63rd affirmative defenses. The requests seek relevant documents. Defendant’s responses to each of the requests assert various objections and conclude with the following statement: “Subject to and without waiving the foregoing objections and General Objections: Defendant is unable to respond to this request because CONCERTO HEALTH SERVICES, INC. was not Plaintiff’s employer of record.”
The responses fail to comply with the requirements of CCP §§ 2013.210-2031.240.
Further, Defendant did not file an objection to the motion to compel and, accordingly, has not supported any of the objections. The motion (ROA 48) is GRANTED as to Requests 46-107.
Defendant Concerto Health Services has 14 days form notice of this ruling to provide supplemental responses without objection that fully comply with CCP §§ 2013.210-2031.240.
Requests 108-155 relate to Defendant’s knowledge of Plaintiff’s claimed disability, accommodation communications and efforts, a corrective action issued to Plaintiff, Plaintiff’s leaves of absence, Plaintiff’s resignation, communications between specified individuals regarding or with Plaintiff, job titles and duties for specified individuals, Plaintiff’s job duties, the termination of Plaintiff’s employment and internal investigations into the claim of disability discrimination.
The requests seek relevant documents. Defendant’s responses to each of the requests assert various objections and conclude with the following statement: “Subject to and without waiving the foregoing objections and General Objections: Defendant is unable to respond to this request because CONCERTO HEALTH SERVICES, INC. was not Plaintiff’s employer of record.”
The responses fail to comply with the requirements of CCP §§ 2013.210-2031.240.
Further, Defendant did not file an objection to the motion to compel and, accordingly, has not supported any of the objections. The motion (ROA 48) is GRANTED as to Requests 108-155. Defendant Concerto Health Services has 14 days from notice of this ruling to provide supplemental responses without objection that fully comply with CCP §§ 2013.210-2031.240.
On September 22, 2020, Plaintiff Patricia Verduzco served Requests for Production of Documents, Set One on Defendants Concerto Healthcare, Inc. Forootan Dec. (ROA 43) ¶ 2, Exhibit A.
Responses were due on October 26, 2020. Defendant never responded. Forootan Dec. (ROA 43), ¶ 3.
Plaintiff’s counsel contacted Defendant’s counsel regarding the missing responses. Defendant did not reply. Forootan Dec., (ROA 43), ¶ 4.
Pursuant to CCP § 2031.320, the motion is granted.
Defendant Concerto Healthcare, Inc. has 14 days from notice of this ruling to provide responses without objection that fully comply with CCP §§ 2013.210-2031.240.
Plaintiff to give notice.
Motion to be Relieved: 6/17/21
Court Trial: 4/11/22
Victoria vs. Toyota Motor Corporation
Motion for Determination of Good Faith Settlement filed by Defendant Britax Child Safety, Inc.
The motion for determination of good faith settlement filed by Defendant Britax Child Safety, Inc. (“Britax”) is GRANTED.
Code of Civil Procedure section 877.6 provides in pertinent part:
(a)(1) Any party to an action in which it is alleged that two or more parties are joint tortfeasors or co-obligors on a contract debt shall be entitled to a hearing on the issue of the good faith of a settlement entered into by the plaintiff or other claimant and one or more alleged tortfeasors or co-obligors, upon giving notice in the manner provided in subdivision (b) of Section 1005. … [¶] … [¶]
(b) The issue of the good faith of a settlement may be determined by the court on the basis of affidavits served with the notice of hearing, and any counter affidavits filed in response, or the court may, in its discretion, receive other evidence at the hearing.
(c) A determination by the court that the settlement was made in good faith shall bar any other joint tortfeasor or co-obligor from any further claims against the settling tortfeasor or co-obligor for equitable comparative contribution, or partial or comparative indemnity, based on comparative negligence or comparative fault.
(d) The party asserting the lack of good faith shall have the burden of proof on that issue.
Here, Defendant Britax seeks an order determining that its settlement with Plaintiffs was made in good faith. This action arises out of a car accident in which Plaintiffs, a father and his minor child, were injured. The minor child sustained a traumatic brain injury, allegedly as the result of striking his head on either the inadequately padded wing of the child car seat or the improperly tethered side curtain airbag. Britax is the alleged manufacturer of the car seat. Plaintiffs allege two claims against Britax – the third cause of action for Strict Liability and the fourth cause of action for Negligence. Britax contends the child car seat was misused, i.e. not correctly installed in the car or properly adjusted for the child’s height. Britax has submitted evidence including testimony of Santa Ana Police Safety Officer Laufer in support of its contention that the car seat was not installed properly.
Britax entered into a confidential settlement agreement with Plaintiffs and asks this Court to approve that settlement. The settlement funds will be allocated between the two plaintiffs, 10% to Michael Adam Royer and 90% to the minor, Hudson Royer, via his guardian ad litem.
This hearing was previously set for 3/18/21 and was continued to 4/15/21. Britax was ordered to submit the confidential settlement agreement to the Court no less than seven court days before the continued hearing. Britax has filed the requested document under seal as ROA 184 on 3/18/21.
A party seeking a determination of good faith may file a “bare bones” motion, stating the grounds on which the determination is sought and supporting the motion with a declaration setting forth a brief background of the case and the settlement terms. (City of Grand Terrace v. Superior Court (1987) 192 Cal.App.3d 1251, 1261.) The moving party need not address all the factors relevant to the determination of good faith. (Id. at 1258.) “The party asserting the lack of good faith shall have the burden of proof on that issue." (Code Civ. Proc. § 877.6(d).) Accordingly, where there is no opposition, “a barebones motion which sets forth the ground of good faith, accompanied by a declaration which sets forth a brief background of the case is sufficient.” (City of Grand Terrace v. Superior Court, supra, 192 Cal.App.3d at 1261.)
Here, Britax has filed a motion and supporting declaration setting forth the background of the case and the grounds for good faith settlement.
No opposition to Britax’s motion for determination of good faith settlement has been filed.
Having reviewed the moving papers, supporting declaration, and confidential settlement agreement, the Court finds that the settlement agreement between Defendant Britax Child Safety, Inc. and Plaintiffs Hudson Clay Victoria Royer, a minor by and through Miranda Rose Victoria as his Guardian ad Litem, and Michael Adam Royer, was made in good faith pursuant to Code of Civil Procedure section 877.6.
Jury Trial: 6/1/21
2 Motions to Quash/Motion to Appear PHV: 6/17/21
3 Motions to Quash: 6/24/21
Motion to Quash: 7/1/21
De Waard vs. Hyundai Motor America
Motion for Attorney Fees filed by Plaintiffs Jeramy De Waard and Dulce De Waard
Plaintiffs’ Dulce De Waard and Jeramy De Waard Motion for Attorney’s Fees against Defendant Hyundai Motor America is GRANTED.
Plaintiffs’ Dulce De Waard and Jeramy De Waard sought an award of reasonable attorneys’ fees and costs in the amount of $19,108.73 ($18560.00 in attorneys’ fees and $548.73 in costs). For the below reasons, the Court awards Plaintiffs $12,757.50 in attorneys’ fees and $548.73 in costs, for a total award of $13,306.13.
1. Basis for Fees
When authorized by contract, statute or law, reasonable attorney fees are “allowable costs.” (Code Civ. Proc. § 1033.5(a)(10)(A), (B) & (C); Santisas v. Goodin (1998) 17 Cal.4th 599, 606; Pacific Custom Pools, Inc. v. Turner Const. Co. (2000) 79 Cal.App.4th 1254, 1268; see Harris v. Wachovia Mortg., FSB (2010) 185 Cal.App.4th 1018, 1027.) The Song–Beverly Consumer Warranty Act states: “If the buyer prevails in an action under this section, the buyer shall be allowed by the court to recover as part of the judgment a sum equal to the aggregate amount of costs and expenses, including attorney's fees based on actual time expended, determined by the court to have been reasonably incurred by the buyer in connection with the commencement and prosecution of such action.” (Civ. Code § 1794(d).)
Here, on 12/28/20 Plaintiffs signed a 998 offer that stated in relevant part:
8. HMA will pay Plaintiffs’ attorney's fees, expenses and costs in an amount of $8,000.00, or should the $8,000.00 be refused, at Plaintiffs’ election, Plaintiffs may file a motion to be determine by the Court whether she is entitled to fees and costs and to determine the amount reasonably, actually, and necessarily incurred pursuant to Civil Code Section 1794(d). This is a settlement offer. There is no admission of liability by this Offer.
(Exhibit 1 to Declaration of Thomas K. Ledbetter (“Ledbetter Decl.”) Thus, there is no dispute that Plaintiffs are entitled to attorneys’ fees as part of the settlement.
Accordingly, Plaintiffs have shown a proper basis for fees.
2. Determining the Amount of Fees
Civil Code § 1794(d) further requires the attorney fees to be based on “actual time expended” and to have been “reasonably incurred.” This statutory language conforms with the lodestar method. (Robertson v. Fleetwood Travel Trailers of California, Inc. (2006) 144 Cal.App.4th 785, 818-819.)
i. Number of Hours Reasonably Expended After Acceptance of the Statutory Offer to Compromise
Plaintiffs contend that their counsel spent a total of 50.6 hours (17 hours of Thomas K. Ledbetter’s time and 33.6 hours of Amie Jacoby’s time) litigating the case through the fee motion. Defendant contends that fees incurred after acceptance of the statutory offer to compromise should not be awarded, which would reduce the number of hours by 14.4 hours of Thomas K. Ledbetter’s time and 1.3 hours of Ms. Jacoby’s time.
Plaintiffs contend that an attorney fee award should “include compensation for all hours reasonably spent, including those necessary to establish and defend the fee claim ....” (Serrano v. Unruh (1982) 32 Cal.3d 621, 639; Robertson v. Fleetwood Travel Trailers of California, Inc. (2006) 144 Cal.App.4th 785, 817 (affirming an award of “$13,566.70 in fees attributable to [a] motion for attorney fees.”).) Defendant does not provide authority to dispute this contention.
Defendant contends that Plaintiffs do not attempt to show how this additional amount of billing was necessary.
According to Exhibit 2 of the Ledbetter Decl., at the time the Plaintiffs accepted the statutory offer to compromise, Plaintiffs’ counsel had billed $12,893.73 in attorneys’ fees to litigate the matter. This amount is also reflective of the rate Plaintiffs’ counsel “charges” for these matters.
Accordingly, Plaintiffs chose to pursue the difference of $4,893.73 between the $8,000.00 offered in the statutory offer to compromise and the amount that had been incurred. Thus, it is reasonable that Plaintiffs would pursue a fee motion.
Accordingly, the Court awards attorneys’ fees for the reasonable hours spent after Plaintiffs’ acceptance of the 998 offer. However, it would have been ideal is if Plaintiffs’ counsel communicated the difference in fees as of 12/28/20, and the parties resolved the payment of attorneys’ fees without court intervention and incurring more fees.
After the acceptance of the offer on 12/28/20, Plaintiffs’ attorneys spent or expected to spend the following hours.
Mr. Ledbetter spent:
1. 1.6 hours on “Prepare audit of invoice for attorneys' fees and costs for plaintiff's motion for attorneys' fees and costs”
2. 3.8 hours “For plaintiff's motion for attorneys' fees and costs, prepare the points and authorities (2.9); declaration of TKL (0.8); and proposed order (0.1)”
3. 3.00 hours on “(Future billings) Analyze KMA's opposition brief re plaintiffs' motion for attorneys' fees and costs”
4. 3.00 hours on “(Future billings) prepare plaintiffs' reply brief in support of motion for attorneys' fees and costs”
5. 3.00 hours on “(Future billings) prepare for and telephonically attend the hearing for plaintiffs' motion for attorneys' fees and costs”
The Court will not award Mr. Ledbetter’s 1.6 hours to “Prepare audit of invoice for attorneys' fees and costs for plaintiff's motion for attorneys’ fees and costs.” Attorneys cannot bill for administrative tasks and do not bill their clients to prepare the bill. This is actually a supervisory task that partners at law firms do not bill their clients for. As such, Defendant should not pay for this time.
Moreover, 3 hours to analyze the Opposition, another 3 hours to prepare the reply and another 3 hours to prepare for the hearing and attend is excessive. The court reduces these entries to 1.0 hour to analyze the Opposition, 1.5 hours to prepare the reply, and 1.5 hours to prepare for the hearing.
Additionally, Ms. Jacoby signed the Reply brief and, therefore, analyzing the Opposition and preparation of the Reply brief should be attributed to her and her rate.
After acceptance of the statutory offer, Ms. Jacoby spent:
1. .3 of an hour on “Analyze and respond to email correspondence from C. MUllen with payoff quote, payment quote, payment history, and vehicle registration” and
2. 1.0 hour on “(Future billings) Telephonic conference calls with D. De Waard re review and analysis of documents to transfer title of the subject vehicle to HMA pursuant to the parties' buyback settlement.”
Defendant contends that Plaintiffs should not be awarded 1.0 hour for Ms. Jacoby’s “Telephonic conference calls with D. De Waard re review and analysis of documents to transfer title of the subject vehicle to HMA pursuant to the parties' buyback settlement.”
In Reply, Plaintiffs explain that the telephone calls past the 998 Offer relate to Defendant’s repeated requests for updated financial information from Plaintiffs due to Defendant’s delay in scheduling a vehicle surrender. Plaintiffs further contend that the vehicle surrender has still not occurred after nearly 4 months. This seems reasonable that Defendant’s delay of the settlement and the phone calls necessary to resolve the issue is compensable. Thus, the 1.0 hour anticipated by Ms. Jacoby is awarded along with the .3 actually spent.
ii. Number of Hours Reasonably Expended Before Acceptance of the Statutory Offer to Compromise
Defendant contends that Ms. Jacoby expended excessive hours and performed duplicative work. Plaintiffs contend that because these cases are taken on a contingency fee that the parties attorneys litigate the case as efficiently as possible.
Defendant specifically contends that Ms. Jacoby billed for fifteen phone calls with Plaintiffs up to settlement for a total of 9.4 hours. Defendant further contends that the descriptions for emails to the client substantially matched the descriptions entered for her phone calls, which demonstrates that Ms. Jacoby was likely billing for inefficient, duplicative work.
After reviewing the entries, none of them appear excessive or duplicative. Some of them appear substantive such as “Conference call with D. De Waard and J. De Waard re deposition preparation meeting and review of documents responsive to requests for production for deposition prep” for 2.9 hours. In that one call Ms. Jacoby prepared both Plaintiffs for their depositions, which is extremely reasonable.
Also, it is common to follow up phone calls with emails or emails with phone calls during litigation due to the client usually being a layperson.
Accordingly, the full number of hours prior to the acceptance of the 998 should be awarded.
iii. Thomas K. Ledbetter’s Fee
Defendant does not specifically contend that Mr. Ledbetter’s rate of $400 an hour is excessive. Mr. Ledbetter is the managing partner of the firm and has practiced lemon law for approximately 15 years. Accordingly, his rate is not be reduced.
iv. Amie Jacoby’s Fee
Defendant specifically contends that Ms. Jacoby’s rate of $350 an hour is excessive. While Ms. Jacoby has been practicing for 30 years, she has only been litigating lemon law cases since October 2018. Ms. Jacoby’s hourly rate is reduced to $275 an hour.
By way of the statutory offer, the parties agreed that Defendant would pay costs. (Exhibit 1 to Ledbetter Decl.) Thus, Plaintiffs should be awarded costs. However, the Court must determine which costs are allowable.
Code Civ. Proc. § 1033.5(a) provides that the following are allowable costs: “Filing, motion, and jury fees,” (Code Civ. Proc. § 1033.5(a)(1)), “Service of process by a public officer, registered process server, or other means …” (Code Civ. Proc. § 1033.5(a)(4).) “Fees for the electronic filing or service of documents through an electronic filing service provider if a court requires or orders electronic filing or service of documents.” (Code Civ. Proc. § 1033.5(a)(14).)
Plaintiffs submit the following costs: (1) $461.98 for e-filing the summons and complaint; (2) $75.00 for service of process on Defendant; and (3) $11.75 e-filing proof of service of summons
According to the statute, costs in the amount of $548.73 are awarded.
Based, on the foregoing, Plaintiffs’ Dulce De Waard and Jeramy De Waard Motion for Attorney’s Fees against Defendant Hyundai Motor America is GRANTED and they are awarded $12,757.50 in attorneys’ fees and $548.73 in costs, for a total award of $13,306.13.
Plaintiffs are ordered to give notice.
Jury Trial: 6/20/22
Ingate Systems, Inc. vs. Uvnv, Inc.
1. OSC re: Dismissal
2. Demurrer to Second Amended Complaint filed by Defendants UVNV, Inc. DBA Ultra Mobile, Primo Connect, Inc., Ka’ena Corporation, and David Glickman
3. Motion to Quash Deposition Notice filed by Defendants UVNV, Inc. DBA Ultra Mobile, Primo Connect, Inc., and Ka’ena Corporation
4. Motion for Leave to File Third Amended Complaint filed by Plaintiff Ingate Systems, Inc.
On 12/2/20, after granting the motion of counsel for Plaintiff Ingate Systems, Inc. (“Ingate”) to withdraw, the Court ordered Ingate to retain new counsel within 60 days.
As of 4/6/21, new counsel has not appeared on behalf of Ingate. On 4/1/21, Ingate attempted to file a substitution of attorney, which was rejected by the Clerk due to Plaintiff’s failure to complete the substitution form.
If Ingate has retained counsel, counsel shall make an appearance on Ingate’s behalf at the OSC Re: Dismissal.
Motion No. 1 – Demurrer to Second Amended Complaint
The demurrer of Defendants UVNV, Inc. dba Ultra Mobile; Primo Connect, Inc.; Ka’ena Corporation; and David Glickman (“Defendants”) to Ingate’s second amended complaint (“SAC”) is SUSTAINED without leave to amend.
Ingate’s SAC alleges causes of action for (1) quantum meruit and quantum valebant, (2) breach of contract, (3) breach of implied contract, and (4) fraud. Defendants demur to the second and third causes of action on grounds of uncertainty and failure to state facts sufficient to constitute a cause of action.
The elements of a cause of action for breach of contract are: (1) the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to plaintiff. (Coles v. Glaser (2016) 2 Cal.App.5th 384, 391.) Defendants contend Ingate has failed to adequately allege the terms of the contract and the identities of the parties to the contract. Defendants also argue Ingate has failed to allege Ingate’s performance of the contract.
It is not the ordinary function of a demurrer to test the truth of the plaintiff's allegations or the accuracy with which he describes the defendant's conduct. A demurrer tests only the legal sufficiency of the pleading. (Whitcombe v. County of Yolo (1977) 73 Cal.App.3d 698, 702.) It “admits the truth of all material factual allegations in the complaint ...; the question of plaintiff's ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court.” (Alcorn v. Anbro Engineering, Inc. (1970) 2 Cal.3d 493, 496.)
Here, Defendants contend Ingate fails to allege a meeting of the minds as to material contract terms. “[T]he failure to reach a meeting of the minds on all material points prevents the formation of a contract even though the parties have orally agreed upon some of the terms, or have taken some action related to the contract.” (Banner Entertainment, Inc. v. Superior Court (Alchemy Filmworks, Inc.) (1998) 62 Cal.App.4th 348, 359.)
Ingate fails to allege the existence of a binding contract or breach thereof by Defendants. At paragraph 23 of the complaint, Ingate alleges it provided products and services pursuant to a 2015 purchase order, and in paragraph 34, Ingate alleges Defendants paid approximately $79,000 under the terms of the 2015 order. Ingate alleges at paragraphs 26 through 30 of the complaint that in 2016 it requested higher license fees than Defendants had agreed to pay, but Defendants did not agree to pay for the usage fees proposed by Ingate. Defendants used technology from another provider instead.
Ingate fails to allege that Defendants breached the terms of a binding contract. Assuming Plaintiff’s allegations to be true, there was a 2015 purchase order which was filled by Ingate and paid for by Defendants. The parties then attempted to negotiate a further agreement regarding licenses for Ingate’s technology, but they did not reach a meeting of the minds and Defendants chose another supplier.
Plaintiff has had two prior opportunities to amend the complaint in this case which was filed more than four years ago. Plaintiff has failed to show that it can amend the complaint to state a viable cause of action for breach of contract. Therefore, the demurrer is sustained without leave to amend.
Motion No. 2 – Motion to Quash Deposition Notice
Defendants’ motion to quash deposition notice, filed on 10/7/20 is DENIED without prejudice. On 11/19/20, the Clerk of the Court issued a notice to Defendants’ counsel (ROA 553) stating that the motion was voided due to failure to pay the required fee. Defendants have apparently failed to remedy this defect.
Motion No. 3 – Motion for Leave to File a Third Amended Complaint
Plaintiff’s motion for leave to file a third amended complaint is DENIED.
On December 2, 2020, the Court granted the motion of Ingate’s prior attorney Mr. Robinson to withdraw as its attorney of record. The Court also ordered the following:
(1) The new trial date (the eighth in this matter) will not be continued based on the appearance of new counsel for Ingate;
(2) the last day for Ingate to seek leave to amend its operative pleading is 30 days from the date Ingate’s next counsel substitutes in;
(3) Ingate is obligated to bring the order containing these rulings to the attention of Ingate’s new counsel prior to such counsel filing a substitution; and
(4) Ingate is obligated to retain new counsel and have such counsel file an appearance 60 days from the date of the Court’s Ruling.
On 2/8/21, the Court denied the ex parte application of Plaintiff’s CEO Karl Erik Stahl to substitute Plaintiff Ingate Systems Inc. for individual Karl Erik Stahl or to allow Mr. Stahl to plead the case through trial without an attorney.
On 2/10/21, the Court considered Mr. Stahls’ ex parte application to add him as a Plaintiff party or in the alternative to advance the hearing date on Plaintiff’s motion for leave to file a third amended complaint. The Court granted the request to advance the hearing on the motion to amend the complaint and set the hearing for 3/4/21. On 3/4/21, the Court denied Plaintiff’s motion to file a third amended complaint. Now, Plaintiff again moves for leave to file a revised third amended complaint.
As of 4/6/21, new counsel has not appeared on Plaintiff’s behalf.
“[U]nder a long-standing common law rule of procedure, a corporation, unlike a natural person, cannot represent itself before courts of record in propria persona, nor can it represent itself through a corporate officer, director or other employee who is not an attorney. It must be represented by licensed counsel in proceedings before courts of record.” (CLD Const., Inc. v. City of San Ramon (2004) 120 Cal.App.4th 1141, 1145.) The court has authority to dismiss an action “if an unrepresented corporation does not obtain counsel within reasonable time.” (Id. at 1150.)
Without an attorney representing it, Ingate cannot file or prosecute a third amended complaint at this late stage of proceedings. In CLD Const., Inc. v. City of San Ramon, supra, 120 Cal.App.4th at 1150, the appellate court granted leave to amend to show corporate representation by counsel only because the case was at an “early stage.” This case is at a much later stage, and Ingate has not shown that it will be represented by counsel in prosecuting the proposed third amended complaint.
Moreover, Ingate provides no explanation for the long unexcused delay in seeking to file the third amended complaint over four years after the initial complaint was filed, which is likely to result in surprise and undue prejudice to Defendants. (See Fisher v. Larsen (1982) 138 Cal.App.3d 627, 649 [leave to amend may be denied where there has been a long delay in seeking the amendment]; Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 297 [unfair surprise to the opposing party to be considered in motion to amend].)
Jury Trial: 6/14/21
Motion for Leave to File Amended Complaint: 7/1/21
Motion for Leave to Amend: 7/15/21