Case Number: EC061245 Hearing Date: June 13, 2014 Dept: B

Demurrer and Motion to Strike

The Cross-Complainant alleges that he entered into a contract with Cross-Defendant, Tommy’s Remodeling, to complete a remodeling project at 7923 Beckett St. Sunland, CA. The Cross-Defendant breached the agreement by constructing the project with defects and deficiencies. Further, the Cross-Defendants induced the Cross-Complainants into the contract with false representations about the price and the quality of the work that would be provided.

The Causes of action in the First Amended Cross-Complaint are:
1) Breach of Contract
2) Negligence
3) Breach of Express Warranty
4) Fraud
5) Recovery of Performance Bond
6) Recovery on Contractor’s State License Bond

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

1. Demurrer
a. Fourth Cause of Action for Fraud

First, the Defendants argue that the allegations in the pleadings are contradicted by the affidavit of completion. Under CCP section 430.30, the grounds for a demurrer must appear on the face of the pleadings or in facts of which the Court may take judicial notice. The Defendant’s affidavit of completion does not appear on the face of the pleadings. Further, the Defendant did not establish that it is a matter of which the Court may take judicial notice in a separate request for judicial notice, as required under CRC rules 3.1113 and 3.1306.

Accordingly, this is not a proper ground for a demurrer.

Second, the Defendants argue that the fraud claim lacks the particular facts needed to plead fraud. The elements of a fraud cause of action are the following:

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.

Facts constituting each element of fraud must be alleged 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 Cross-Complainant alleges in paragraphs 35 and 36 that Robert Keshishian, under the direction and on behalf of Tommy’s Remodeling and Hilda Tahmasian, made representations in person on September 10, 2012 and through a written contract for services dated September 10, 2012 at the property, 7923 Beckett St., Sunland, CA, to Cross-Complainant, Soorik Kashani, that the price for the contract included everything necessary to complete the project and that all work would be completed in a substantial and workmanlike manner. These allegations identify how, when, where, to whom, and by what means the representations were made.

However, the cause of action lacks the particular allegations regarding the remaining elements. There are no particular allegations demonstrating that each Cross-Defendant had knowledge of falsity or had an intent to defraud. There are no particular facts to identify the manner in which the Cross-Complainant relied upon the statements or demonstrating that the reliance was justified. There are no particular allegations that identify the resulting damages. Instead, the Cross-Complainant merely quoted these essential elements in paragraph 35 without any supporting, particular facts

This is insufficient to plead the cause of action for fraud.

The Defendant then argues that the pleadings are insufficient with regards to the individual Cross-Defendants, Robert Keshishian and Hilda Tahmasian. The Cross-Complainant alleges that Robert Keshishian personally made the fraudulent statements. Since the Cross-Complaint includes allegations that Robert Keshishian engaged in the wrongful conduct, this indicates that he is personally liable.

However, there are no particular allegations identifying the theory under which Tommy’s Remodeling and Builders, Inc. or Hilda Tahmasian are liable for the alleged fraud of Robert Keshishian. There are no particular allegations identifying Robert Keshishian’s authority to speak on behalf of Tommy’s Remodeling and Builders, Inc.

Also, speaking “on behalf” of another individual is not grounds to hold the individual liable. Instead, the Cross-Complainant must allege facts identifying some legal theory under which one person is liable for the tort of another, e.g., conspiracy or respondeat superior. There are no particular allegations that identify the theory under which Hilda Tahmasian is liable for the alleged fraud of Robert Keshishian.

The opposition papers are less than useful. The Cross-Complainant argues that the facts are within the knowledge of the Cross-Defendants, ascertainable through discovery, not dispositive, or “purely relevant” to final judgment. None of these arguments offer any grounds to find that the cause of action pleads the particular facts needed to plead a fraud claim against three different Cross-Defendants.

Accordingly, the Court sustains the demurrer to the fourth cause of action.

California law imposes the burden on the Cross-Complainant to demonstrate the manner in which the Cross-Complainant can amend the pleadings to correct the defects in the Cross-Complaint. Goodman v. Kennedy (1976) 18 Cal.3d 335, 349. Although the Cross-Complainant makes a generic request for leave to amend on pages 5 and 6 of the opposition, the Cross-Complainant makes no effort to meet this burden by identifying any means by which the numerous defects can be corrected by amendment.

Accordingly, the Court will want such information at the hearing in order to grant leave to amend.

2. Motion to Strike

The Cross-Defendants request that the Court strike the claim for punitive damages and the request for attorney’s fees from the prayer for relief. CCP section 436 permits the Court to strike any portions of a pleading that are improper.

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. Under Civil Code section 3294, a plaintiff may recover an award of punitive damages on a showing that the defendant acted with malice, oppression, or fraud. Civil Code section 3294 defines these terms in the following manner. “Malice” means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others. “Oppression” means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights. “Fraud” means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.

A review of the Cross-Complaint reveals that it contains no allegations showing that the Cross-Complainant is entitled to an award of punitive damages. The Cross-Complainant included the request in the prayer, but did not support the request with any allegations in the fourth cause of action for fraud or any other cause of action.

Accordingly, the Court strikes the claim for punitive damages from the prayer for relief.

Under CCP section 1033.5, a party may recover attorney’s fees when authorized by law, contract, or statute. A review of the Cross-Complaint reveals no allegations identifying any law, contract, or statute that authorizes the recovery of attorney’s fees.

Accordingly, the Court strikes the claim for attorney’s fees.

The opposition papers offer no basis for finding that the Cross-Complainant can add facts to support the claim. With respect to the claim for fraud, if the Court grants leave to amend the fourth cause of action, leave to amend the claim for punitive damages will also be granted.