DEMURRER & MOTION TO STRIKE

Calendar: 8
Case No: EC061182
Date: 2/21/14

MP: Defendants, Mohammad Asadia and Law Offices of Asadi and Associates, APC
RP: Plaintiffs, Boghos Babadjanian and Sara Babadjanian

ALLEGATIONS IN FIRST AMENDED COMPLAINT:
The Plaintiffs retained the Defendants to provide legal services in an action, EC052471, concerning the Plaintiffs’ property and claims against Deutsche Bank Indymac Mortgage Services, and Quality Loan Services. As a result of the Defendants’ professional negligence, the Plaintiffs suffered damages when their case was dismissed and a judgment was entered in favor of Deutsche Bank Indymac Mortgage Services, and Quality Loan Services. Further, the Defendants caused additional damages when they abandoned the Plaintiffs’ appeal of the judgment.

CAUSES OF ACTION IN FIRST AMENDED COMPLAINT:
1) Professional Negligence
2) Unjust Enrichment
3) Fraud
4) Breach of Written Contract
5) Negligent Infliction of Emotional Distress
6) Intentional Infliction of Emotional Distress

[The caption for the First Amended Complaint is incorrect and the above list is based on the order that the causes of action are set forth in the body of the pleadings.]

RELIEF REQUESTED:
1. Demurrer to each cause of action.
2. Strike seven portions from the First Amended Complaint.

DISCUSSION:
This hearing concerns the Defendants’ demurrer and motion to strike directed at the First Amended Complaint.

1. Demurrer based on Statute of Limitations
The Defendants argue that the first, second, fourth, fifth, and sixth causes of action are barred by the statute of limitations because they arise from the origination of the loan in 2007. When the dates alleged in the complaint show the action is barred by the statute of limitations, a general demurrer lies. Saliter v. Pierce Bros. Mortuaries (1978) 81 Cal.App.3d 292, 300.
The Complaint is an action against an attorney that arises from the attorney’s performance of legal services. CCP section 340.6(a) provides that an action against an attorney for a wrongful act or omission, other than for actual fraud, arising in the performance of professional services shall be commenced within one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the facts constituting the wrongful act or omission, or four years from the date of the wrongful act or omission, whichever occurs first. For any wrongful act or omission of an attorney arising in the performance of professional services, an action must be commenced within one year after the client discovers or through the use of reasonable diligence should have discovered the facts constituting the wrongful act or omission. Levin v. Graham & James (1995) 37 Cal. App. 4th 798, 805. In all cases other than actual fraud, whether the theory of liability is based on the breach of an oral or written contract, a tort, or a breach of a fiduciary duty, the one-year statutory period applies. Id.
A review of the pleadings reveals that the Plaintiffs allege in paragraph 18 that the Defendants filed a notice of appeal in the underlying case on October 18, 2011. In paragraph 20, the Plaintiffs allege that on May 21, 2012, the Defendants filed an abandonment of the appeal without the Plaintiffs’ authorization. The Plaintiffs allege in paragraphs 24 and 25 that they discovered that their appeal had been abandoned on September 11, 2012 when they consulted with a new attorney about their case.
These allegations indicate that the Plaintiffs discovered the facts constituting the Defendants’ wrongful acts or omissions by September 11, 2012 when their consulted with a new attorney and discovered that the Defendants had abandoned the appeal. Under CCP section 340.6, the Plaintiffs had one year, or until September 11, 2013 to commence an action based on the Defendants’ allegedly wrongful conduct.
A review of the Court file reveals that the Plaintiffs commenced this action on August 27, 2013. Since the Plaintiffs commenced their action within the one-year period, the allegations in the pleadings do not indicate that the statute of limitations bars their claims.

The Defendants argue that the time should begin to run on October 11, 2011 because this is when the Plaintiffs’ underlying case was dismissed and a judgment was entered against the Plaintiffs. However, the Plaintiffs do not allege any facts to indicate that they had discovered the facts underlying the Defendants’ negligence on October 11, 2011. There are no allegations indicating that the Plaintiffs knew or had any suspicions that the Defendants had acted negligently on October 11, 2011.
Instead, the allegations in the pleadings reveal that the Plaintiffs maintained the attorney-client relationship by requesting that the Defendants represent them for the appeal of the judgment. The Plaintiffs allege facts in paragraph 25 that demonstrate that they discovered the facts regarding the Defendants’ alleged negligence on September 11, 2012 when they discovered that the Defendants had abandoned the appeal. Since the Plaintiffs commenced the pending action within one year of September 11, 2012, the dates alleged in the pleadings do not indicate that the statute of limitations bars the Plaintiff’s claim.

Therefore, the Court will overrule the demurrer based on the statute of limitations.

2. Demurrer to First Cause of Action
The Defendants argue that the Plaintiffs failed to plead causation. California law permits the Plaintiff to state a negligence claim in general terms, without stating the facts constituting such negligence. Smith v. Beauchamp (1945) 71 Cal. App. 2d 250, 254-255 (holding it is sufficient to plead that the thing done was negligently done).
The Plaintiffs allege in their first cause of action that they suffered damages as a result of the Defendants’ negligence and that the Defendants breached their duties of professional conduct by failing to competently represent the Plaintiffs and by filing an abandonment of the appeal without their authorization. These allegations are sufficient to plead the negligence cause of action.

Therefore, the Court will overrule the demurrer to the first cause of action.

3. Demurrer to Second Cause of Action for Unjust Enrichment
The Defendants argue that this is not a cause of action. Under California law, there is no cause of action for unjust enrichment. Melchior v. New Line Productions, Inc. (2003) 106 Cal. App. 4th 779, 794. The phrase “unjust enrichment” does not describe a theory of recovery, but a general principle underlying various legal doctrines and remedies. Id. It is synonymous with restitution. Id. Accordingly, the second cause of action does plead a cause of action.

Therefore, the Court will sustain the demurrer to the second cause of action. It does not appear reasonably possible to correct this by amendment because unjust enrichment is a remedy. Accordingly, the Court will not grant leave to amend.

4. Demurrer to Third Cause of Action for Fraud
The Defendants argue that this cause of action lacks the particular facts needed to plead fraud. The cause of action for fraud must include the following elements:

1) a representation, usually of fact, which is false;
2) knowledge of its falsity;
3) intent to defraud;
4) justifiable reliance upon the misrepresentation; and
5) damage resulting from that justifiable reliance
Stansfield v. Starkey (1990) 220 Cal. App. 3d 59, 72-73.

A cause of action for fraud must plead the facts constituting each element with particularity; the claim cannot be saved by referring to the policy favoring liberal construction of pleadings. Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216. Since fraud must be pleaded with particularity, the complaint must allege facts showing how, when, where, to whom, and by what means the representations were tendered. Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.

The Plaintiffs’ pleadings lack any particularity. The Plaintiffs allege in paragraph 50 that the Defendants promised that the Plaintiffs would succeed in their action, to appeal the dismissal, and to take all reasonable steps to inform the Plaintiffs of their progress. There are no allegations identifying how, when, where, or by what means these representations were tendered. This is insufficient.
Further, there are no particular allegations regarding the Defendants’ knowledge of falsity or intent to defraud when they made the alleged false representations. This is insufficient.

The Plaintiffs argue that the particular facts are alleged elsewhere in the First Amended Complaint. A civil plaintiff may, for the sake of convenience, incorporate by reference previous portions of his pleading for informational purposes only. Cal-West Nat. Bank v. Superior Court (1986) 185 Cal. App. 3d 96, 101. Here, the Plaintiffs are not incorporating portions for informational purposes. Instead, the Plaintiffs are attempting to plead the essential elements of their claims by incorporation, e.g., the particular facts needed to state their fraud claim. This is an improper use of incorporation.

Therefore, the Court will sustain the demurrer to the third cause of action. Since the Plaintiffs can amend this defect by pleading the particular facts within the cause of action for fraud, the Court will grant leave to amend.

5. Demurrer to Fourth Cause of Action for Breach of Contract
The Defendants argue that this cause of action is duplicative with the first cause of action. Under California law, there are grounds for a demurrer to a cause of action that adds nothing to a complaint by way of fact or theory. Rodrigues v. Campbell Industries (1978) 87 Cal. App. 3d 494, 501.
The first cause of action is based on the theory of negligence. The fourth cause of action is based on the theory of breach of contract. Since the fourth cause of action is based on a different legal theory, it adds something to the complaint. Accordingly, it is not duplicative.

Therefore, the Court will overrule the demurrer to the fourth cause of action.

6. Demurrer to Fifth Cause of Action for Negligent Infliction of Emotional Distress
The Defendants argue that this cause of action lacks sufficient facts. A review of the fifth cause of action reveals that the Plaintiffs allege in paragraph 81 that the Defendants engaged in negligent conduct as described in paragraphs 11 to 14, 15 to 32, 36 to 44, 46 to 56, and 71 to 76. This is an improper use of incorporation because it is using incorporation to plead essential elements. Accordingly, the cause of action lacks sufficient facts to plead any claim.

Therefore, the Court will sustain the demurrer to the fifth cause of action. Further, it is not possible to correct these defects by amendment because the fifth cause o action is duplicative with the first cause of action.
The fifth cause of action for negligent infliction of emotional distress (“NIED”). This is not an independent tort in California, but is regarded simply as the tort of negligence. Burgess v. Superior Court (1992) 2 Cal. 4th 1064, 1072. Whether plaintiffs can recover damages for NIED is dependent upon traditional tort analysis, and the elements of duty, breach of duty, causation and damages must exist to support the cause of action. Burgess, 2 Cal. 4th at 1072. Under California law, plaintiffs may state their negligence claims in general terms, without stating the facts constituting such negligence. Smith v. Beauchamp (1945) 71 Cal. App. 2d 250, 254-255 (holding it is sufficient to plead that the thing done was negligently done).
The first cause of action is a claim in negligence and seeks damages for the Defendants’ breach of their duty to the Plaintiff. The fifth cause of action is a claim in negligence and seeks damages for the Defendants’ breach of their duty to the Plaintiffs. The fifth cause of action adds nothing by way of fact or theory. Since the fifth cause of action adds nothing by way of fact or theory, the Court will not grant the Plaintiffs leave to amend.

7. Demurrer to Sixth Cause of Action for Intentional Infliction of Emotional Distress
The Defendants argue that this cause of action lacks facts demonstrating that they engaged in outrageous conduct. The elements of the tort of intentional infliction of emotional distress are the following:

1) extreme and outrageous conduct by the defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress;
2) the plaintiff’s suffering severe or extreme emotional distress; and
3) actual and proximate causation of the emotional distress by the defendant’s outrageous conduct. Conduct to be outrageous must be so extreme as to exceed all bounds of that usually tolerated in a civilized community.
Christensen v. Superior Court (1991) 54 Cal.3d 868, 903

The Plaintiffs allege that the Defendants engaged in outrageous conduct as described in paragraphs 11 to 14, 15 to 32, 36 to 44, 46 to 56, and 71 to 76. This is an improper use of incorporation because it is using incorporation to plead essential elements. Accordingly, the cause of action lacks any allegations identifying outrageous conduct, i.e., conduct “so extreme as to exceed all bounds of that usually tolerated in a civilized community.”

Therefore, the Court will sustain the demurrer to the sixth cause of action. The Plaintiffs have the burden of identifying the manner in which he can amend his complaint and how that amendment will change the legal effect of his pleading. Goodman v. Kennedy (1976) 18 Cal.3d 335, 349. The Plaintiffs argue that the Defendants engaged in outrageous conduct when they engaged in fraudulent billing. Accordingly, the Court will grant leave to amend.

8. Motion to Strike
CCP section 436 permits the Court to strike any portions of a pleading that are improper. When a motion to strike is made, the Court evaluates the pleadings by assuming the truth of all allegations. Id. Accordingly, for purposes of ruling on a motion to strike, the Court assumes the truth of all well-pleaded allegations of a complaint and reads the complaint as a whole. Courtesy Ambulance Serv. v. Superior Court (1992) 8 Cal.App.4th 1504, 1519.
The Defendants request that the Court strike the following portions from the First Amended Complaint:

1) the allegation in paragraph 44 of the second cause of action that the Defendants violated the Rules of Professional Conduct 3-110;
2) the request for punitive damages in the amount of $3,435,000 in paragraph 70 of the third cause of action;
3) the request for punitive damages in paragraph 84 of the fifth cause of action
4) the request for punitive damages in paragraph 90 of the sixth cause of action;
5) the request for interest in the prayer for relief;
6) the request for punitive damages in the prayer for relief;
7) the request for attorney’s fees in the prayer for relief; and

The requests to strike allegations in the second, third, fifth, and sixth causes of action are moot because these causes of action should be removed by the demurrer.

The request for punitive damages in the prayer for relief is unsupported by any allegations. A complaint including a request for punitive damages must include allegations showing that the plaintiff is entitled to an award of punitive damages. Clauson v. Superior Court (1998) 67 Cal. App. 4th 1253, 1255. Since there are no allegations showing that the Plaintiffs are entitled to an award of punitive damages, the Court will strike the request for punitive damages from the prayer for relief.

The request for attorney’s fees is not accompanied by any allegations identifying grounds for an award of attorney’s fees. CCP section 1033.5 states that a prevailing party may recover attorney’s fees only when permitted by law, statute, or contract. Since there are no allegations showing that the Plaintiffs are permitted by law, statute, or contract to recover attorney’s fees, the Court will strike the request for attorney’s fees from the prayer for relief.

The request for interest is not accompanied by any facts showing that the Plaintiffs may recover interest on any of their claims. The remaining causes of action, i.e., the first and fourth, do not include any allegations identifying any basis for an award of interest. Further, the Plaintiffs’ opposition papers do not offer any explanation for seeking interest. Since the Plaintiffs did not plead any basis for an award of interest, the Court will strike the request for interest from the prayer for relief.

Therefore, the Court will grant the motion to strike in its entirety and strike the requests for punitive damages, for attorney’s fees, and for interest. The Court will grant the Plaintiffs leave to amend. However, the Court directs the attention of the Plaintiffs’ attorney to Civil Code section 3295(e) which states “no claim for exemplary damages shall state an amount or amounts.” This bars the Plaintiffs from claiming any amount of punitive damages, such as the request for $3,435,000 in punitive damages in paragraph 70.
RULING:
OVERRULE demurrer to first and fourth causes of action.
SUSTAIN demurrers to second and fifth causes of action without leave to amend.
SUSTAIN demurrers to third and sixth causes of action with leave to amend.
GRANT motion to strike with leave to amend.