Case Name: Hang Nguyen v. Kimberly Nguyen, et al.

Case No.: 19CV344129

Demurrer to Plaintiff’s [First Amended] Complaint

Factual and Procedural Background

In approximately January 2017, defendant Kimberly Nguyen (“Defendant”), individually and in her capacity as principal shareholder, director, officer, and manager of defendant Silicon Specialists, Inc. (“SSI”), obtained a loan of $400,000 from plaintiff Hang Nguyen (“Plaintiff”). (First Amended Complaint (“FAC”), ¶¶4 and 7.) Defendant falsely induced Plaintiff to provide additional sums of money with the understanding that Plaintiff could become a legal immigrant to the United States if she invested $1 million or more in a U.S. company that employed at least 15 persons. (FAC, ¶7.)

Defendant provided false financial data and documents relative to SSI to induce Plaintiff to provide money. (FAC, ¶8.) Over the following months, defendants caused Plaintiff to pay over to them a total sum exceeding $1.1 million. (FAC, ¶9.) In or about November 2017, Defendant promised to pay Plaintiff the sum of $20,000 per month, increased in 2019 to $30,000 per month. (FAC, ¶10.) After making one or more payments of $20,000 to Plaintiff, Defendant and other defendants stopped paying Plaintiff. (Id.)

On March 5, 2019, Plaintiff filed a complaint against Defendant and SSI.

On April 22, 2019, Defendant and SSI filed a demurrer to Plaintiff’s complaint.

On July 30, 2019, there being no opposition, the court sustained the defendants’ demurrer with leave to amend.

On August 6, 2019, Plaintiff filed the operative FAC which asserts causes of action for:

(1) Fraud
(2)
(3) Concealment
(4)
(5) Promise Without Intent to Perform
(6)
(7) Common Counts
(8)

On October 1, 2019, defendants filed the motion now before the court, a demurrer to Plaintiff’s FAC.

I. Procedural violations.
II.

As a preliminary matter, the court notes that defendants failed to comply with Code of Civil Procedure section 430.41. That section provides that the demurring party must meet and confer with the party who filed the challenged pleading “for the purpose of determining whether an agreement could be reached that would resolve the objections to be raised in the demurrer.” (Code Civ. Proc., §430.41, subd. (a).) During this process, the demurring party must identify all causes of action it believes are subject to demurrer, identify the bases for the demurrer, and provide legal support. (Code Civ. Proc., §430.41, subd. (a)(1).) In turn, the opposing party shall provide legal support for its position that the pleading is legally sufficient or any identified defects may be cured. (Code Civ. Proc., §430.41, subd. (a)(1).) The demurring party shall file and serve with its demurrer a declaration stating that: (1) the means by which the demurring party met and conferred and that the parties did not reach agreement; or (2) that the party who filed the pleading failed to respond or otherwise failed to meet and confer in good faith. (Code Civ. Proc., § 430.41, subd. (a)(3).) If a demurring party fails to file the requisite declaration, the court may continue the hearing and order the parties to meet and confer. (Assem. Com. on Judiciary, Rep. on Sen. Bill No. 383 (2015-2016 Reg. Sess.), p. 2.) A court may not sustain a demurrer based on the insufficiency of the meet and confer process. (Code Civ. Proc., §430.41, subd. (a)(4).)

Defendants failed to file a meet and confer declaration as required by Code of Civil Procedure section 430.41. In furtherance of judicial economy, the court will overlook defendants’ failure to comply with Code of Civil Procedure section 430.41 in this instance but hereby places defendants and their counsel on notice that they are required to comply with the Code of Civil Procedure in the future.

As a further preliminary matter, the court notes that Plaintiff’s opposition is untimely filed. Code of Civil Procedure section 1005, subdivision (b) states, “All papers opposing a motion … shall be filed with the court and a copy served on each party at least nine court days … before the hearing.” Based on a hearing date of December 17, 2019, Plaintiff’s opposition had to be filed and served no later than December 4, 2019. Plaintiff did not file the opposition until December 9, 2019, three court days late.

California Rules of Court, rule 3.1300, subdivision (d) states, “No paper may be rejected for filing on the ground that it was untimely submitted for filing. If the court, in its discretion, refuses to consider a late filed paper, the minutes or order must so indicate.” Since the court has discretion to consider a late filed paper, since Moving Defendants have not claimed any prejudice from the late filing, and to avoid the expenditure of any further judicial resources, the court will look past this procedural violation and consider the opposition on its merits. However, Plaintiff and Plaintiff’s counsel are hereby admonished for the procedural violation. Any future violation may result in the court’s refusal to consider the untimely filed papers.

III. Defendants’ demurrer to the Plaintiff’s FAC is OVERRULED.
IV.

“Fraud actions are subject to strict requirements of particularity in pleading. … Accordingly, the rule is everywhere followed that fraud must be specifically pleaded.” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216.) “The pleading should be sufficient to enable the court to determine whether, on the facts pleaded, there is any foundation, prima facie at least, for the charge of fraud.” (Commonwealth Mortgage Assurance Co. v. Superior Court (1989) 211 Cal.App.3d 508, 518.) The court in Lazar v. Superior Court (1996) 12 Cal.4th 631, 645 did not comment on how these particular allegations met the requirement of pleading with specificity in a fraud action, but the court did say that “this particularity requirement necessitates pleading facts which ‘show how, when, where, to whom, and by what means the representations were tendered.’ A plaintiff’s burden in asserting a claim against a corporate employer is even greater. In such a case, the plaintiff must ‘allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.”

Defendant SSI demurs to the first cause of action by arguing the pleading does not provide such specifics as who spoke on behalf of SSI, their authority to speak on behalf of SSI, and whether the misrepresentations were made orally or in writing. However, such specifics can be found at paragraph 8 which alleges that Kimberly Nguyen, in her individual capacity and on behalf of the other defendants, including SSI, provided false financial data and documents. The allegation also states that these were both “oral and written.”

Defendant, individually, demurs by arguing that there is no allegation that Plaintiff lacked knowledge of the concealed facts or that Plaintiff would have behaved differently had she known the concealed information. “[T]he 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.” (Marketing West, Inc. v. Sanyo Fisher (USA) Corp. (1992) 6 Cal.App.4th 603, 612 – 613.)

However, in looking at the FAC, there are allegations that Plaintiff lacked knowledge of the concealed facts. (See FAC, ¶15—“The true facts were known only to, and were accessible only by, Defendant KIMBERLY NGUYEN and the remaining Defendants, who knew that same were unknown and were not reasonably discoverable by Plaintiff.”) Allegations of Plaintiff’s reliance can be found at paragraph 15 (“Plaintiff, in ignorance of the true facts, acted in justifiable reliance…) and paragraph 17 (“As a direct and proximate result of the … concealment by Defendant KIMBERLY NGUYEN and the remaining Defendants, Plaintiff was induced to expend and pay over $1.1 million….”).

Defendants make the additional argument that the concealment cause of action fails because Plaintiff has not alleged the existence of a fiduciary duty to disclose. Defendants’ assertion is an incomplete statement of the law. “There are ‘four circumstances in which nondisclosure or concealment may constitute actionable fraud: (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.) Here, Plaintiff has alleged defendants had exclusive knowledge of material facts. (See FAC, ¶15—“The true facts were known only to, and were accessible only by, Defendant KIMBERLY NGUYEN and the remaining Defendants….”)

With regard to Plaintiff’s claim for promissory fraud, defendants make the additional argument that Plaintiff has not alleged defendants’ intention not to perform. “Fraud is an intentional tort; it is the element of fraudulent intent, or intent to deceive, that distinguishes it from actionable negligent misrepresentation and from nonactionable innocent misrepresentation. It is the element of intent which makes fraud actionable, irrespective of any contractual or fiduciary duty one party might owe to the other.” (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 482.) Something more than nonperformance is required to prove the defendant’s intent not to perform his promises. “A promise of future conduct is actionable as fraud only if made without a present intent to perform. (Civ. Code, §1710, subd. 4; [Citation omitted.]) Defendants overlook paragraph 18 of the FAC which specifically alleges defendants made promises “without any present intention on their part of performance.”

Finally, defendants demur to the fourth cause of action for common counts. Defendants contend common counts must be based upon an implied contract and a claim for common count will not lie where the obligation of the defendant is something other than the payment of money. Defendants’ arguments and authority are not persuasive.

The only essential allegations of a common count are “(1) the statement of indebtedness in a certain sum, (2) the consideration, i.e., goods sold, work done, etc., and (3) nonpayment.” [Citation omitted.] A cause of action for money had and received is stated if it is alleged 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 omitted.]

(Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460.)

Plaintiff has made such allegations at paragraphs 7, 10, and 20 of the FAC.

For all the reasons stated above, defendants’ demurrer to Plaintiff’s FAC is OVERRULED.