2013-00146107-CU-PN

Baph3 Inc. vs. Joseph A. Salazar

Nature of Proceeding:    Hearing on Demurrer

Filed By:   Mille-Henricks, Christine

Defendants Lewis Brisbois Bisgaard & Smith LLP (“LBBS”) and Joseph A. Salazar’s
Demurrer to the 1st amended complaint is sustained/overruled as follows:

Plaintiffs’ Amended complaint sets forth six causes of action: the 1st for professional
negligence, the 2nd for breach of fiduciary duty, the 3rd for intentional infliction of
emotional distress, the 4th for Breach of contract, the 6th for fraud (Concealment), and
the 7th for unfair business practices pursuant to California Business & Professions
Code sections 17200, et seq.

Defendants LBBS and Salazar demur to the 3rd, 6th and 7th causes of action.
Salazar alone demurs to the 4th cause of action.

The allegations of the complaint arise from the alleged legal malpractice by defendants
in their representation of plaintiffs in the underlying action.  Plaintiffs contend that the
present defendants, during their representation of plaintiff, added a defendant to the
underlying action without their knowledge and that counsel was not physically present
at the time the jury was instructed, causing the jury to misunderstand the verdict form,
resulting in a verdict that they [the jury] did not intend.  Plaintiffs allege that the jury
meant to award them the option to purchase a truck stop for $1,600,000.   Because of
the mistaken verdict, plaintiffs allege that they paid $3,700,000 for the truckstop.
Plaintiffs allege they were assessed $75,000 in attorneys fees that were awarded to
the defendant who was dismissed, and that defendants still seek additional attorneys
fees from them.

The demurrer for uncertainty as to all causes of action is overruled.

3rd cause of action Intentional Infliction of Emotional Distress:  Sustained without
leave to amend for failure to state facts sufficient to constitute a cause of action.  An
attorney malpractice action is basically a tort action premised on the attorney’s
negligence. The acts alleged involve no affirmative wrongdoing, but merely
carelessness and inattention to duty by defendants. Under such circumstances
recovery of emotional suffering damages is unwarranted.  As stated in the earlier ruling
sustaining the demurrer to the original complaint:

“The elements of the tort of intentional infliction of emotional distress are: (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. Potter v. Firestone Tire & Rubber Co. (1993) 6 Cal. 4th 965, 1001. The
defendant must have engaged in “conduct intended to inflict injury or engaged in with
the realization that injury will result.” Christensen v. Superior Court (1991) 54 Cal. 3d
868, 903. “Outrageous conduct” denotes conduct which is so extreme as to exceed all
bounds of decency and which is to be regarded as “atrocious, and utterly intolerable in
a civilized community.'” (Bartling v.Glendale Adventist Medical Center (1986) 184
Cal.App.3d 961, 970, quoting Bogard v. Employers Casualty Co. (1985) 164
Cal.App.3d 602, 616.) “Whether a defendant’s conduct can reasonably be
found to be outrageous is a question of law that must initially be determined by the
Court; if reasonable persons may differ, it is for the jury to determine whether the
conduct was, in fact, outrageous.” (Berkley v. Dowds (2007) 152 Cal.App.4th 518,
534.)

After being given leave to amend, Plaintiffs have failed to allege facts to show
outrageous conduct or that either defendant intended to cause emotional distress to
plaintiffs, or that they suffered severe emotional distress.  The facts alleged, including
“intentional overbilling” or continuing to seek an additional $200,000 amount to no
more than legal malpractice and cannot support a claim for emotional distress
damages.  Emotional distress damages are ordinarily not available for legal
malpractice.  Friedman v Merck & Co. (2003) 107 Cal.App.4th 454, 472-473 [“It may
be foreseeable that a client who is the victim of legal malpractice will suffer emotional
distress. But the lawyer’s obligation to the client, at least absent knowledge of any
unusual susceptibility, is economic; the lawyer does not assume an obligation to
protect the client’s emotional state.”].

4th cause of action Breach of Contract (Salazar demurrer): Sustained without
leave to amend as to defendant Salazar for failure to state facts sufficient to constitute
a cause of action.  Plaintiffs have not opposed the demurrer to this cause of action,
which is based on the argument that the contract is between plaintiffs and LBBS only.

6th cause of action Fraud (concealment): Sustained without leave to amend for
failure to state facts sufficient to constitute a cause of action.
The elements of fraud are (1) representation; (2) falsity; (3) knowledge of falsity; (4)
intent to deceive; and (5) reliance and resulting damage (causation). City of
Atascadero v. Merrill Lynch (1998) 68 Cal. App 4th 445, 481.  However, when a
fiduciary relationship is alleged, concealment is a form of fraud that does not require
an affirmative representation.

In California, fraud must be pled specifically; general and conclusory allegations do not
suffice. Thus the policy of liberal construction of the pleadings will not ordinarily be
invoked to sustain a pleading defective in any material respect. This particularity
requirement necessitates pleading facts which ‘show how, when, where, to whom, and
by what means the representations were tendered. Lazar v. Superior Court (1996) 12
Cal. 4th 631, 645.

Conclusory allegations as to what was concealed in the First Amended Complaint,
void of any specific facts to support the legal conclusion reached, do not suffice. See
Roberts v. Ball, Hunt, Hart, Brown & Baervitz (1976) 57 Cal.App.3d 104, 109; Wilhelm
v. Pary, Price, Williams & Russell, supra, 186 Cal.App.3d at 1331.

The cases relied on by plaintiff concern tolling of the statute of limitations for             negligence or malpractice based on the fiduciary concealing the cause of action.
Those cases do not support plaintiffs’ belief that they can state a cause of action for
fraud.

7th cause of action Violation of Business & Professions Code 17200:  Overruled.
Although the Court previously found that the plaintiffs had failed to allege facts to show
that the defendants’ conduct was unlawful, unfair, or fraudulent, the court finds that the
allegations are sufficient for pleading purposes to state a cause of action.

Defendants’ Motion to Strike punitive damages language is granted, without leave to
amend.  Although punitive damages can conceivably be obtained for breach of
fiduciary duty, the facts here alleged are not sufficient under Civil Code 3294(c).

Where sustained, no further leave to amend is granted on the ground plaintiff has not
set forth any facts in the opposition that would cure the defects.  A demurrer must be
sustained without leave to amend absent a showing by plaintiff that a reasonable
possibility exists that the defect can be cured by amendment. Blank v Kirwan (1985)
39 Cal.3d 311, 318. The burden of proving such reasonable possibility rests squarely
th
on the plaintiff.  Torres v City of Yorba Linda (1993) 13 Cal.App.4   1035, 1041.  Plaintiff
has not met that burden.

Answer to remaining counts to be filed and served no later than February 28, 2014.

The minute order is effective immediately.  No formal order pursuant to CRC Rule
3.1312 or further notice is required.