Case Number: VC063974    Hearing Date: July 15, 2014    Dept: SEC

GESHTI v. MAHDAVI
CASE NO.: VC063974
HEARING: 07/15/14

#4
TENTATIVE ORDER

Defendants ALI ASGHAR MAHDAVI (“Asghar”) and RAHIM MAHDAVI HEZAVEH (“Ali”)’s demurrer is SUSTAINED WITH 20 DAYS LEAVE TO AMEND as to the 8th and 9th causes of action; otherwise OVERRULED. C.C.P. § 430.10(e).

Defendant ZAHRA AKBARI’s demurrer is SUSTAINED WITH 20 DAYS LEAVE TO AMEND as to all causes of action. C.C.P. § 430.10(e).

The motion to strike is DENIED. C.C.P. §§ 435, 436.

Plaintiff GHOLAMREZA GESHTI asserts 9 causes of action arising out of two remodeling contracts with defendant Ashgar, allegedly entered into in December 2013. Comp., ¶8. He introduced the other defendants (“Ali” and Hezaveh) as licensed contractors hired to assist him complete the project. ¶9. Approximately 3 weeks after work commenced, plaintiff notified defendants that he no longer wanted them to continue because of the alleged substandard work and material waste. ¶10. Plaintiff later learned that defendant Asghar’s contractor’s license had been cancelled in August 2013 and that the other defendants were not licensed at all. ¶12.

Defendants demur to the 2nd (fraud), 5th (conversion), 6th (unfair business practices), 7th (conspiracy), 8th (unjust enrichment) and 9th (disgorgement) causes of action and seek to have stricken the claim for punitive damages. Although the notices of demurrer reference subsection (c), the notices also reference the “failure to state sufficient facts,” and thus the statutory basis for the demurrers is clear.

Defendant Zahra
There are no charging allegations against defendant Zahra. See Comp., ¶5 (naming Zahra as a defendant). She is not alleged to be part of the construction crew, or a party who misrepresented that she held a contractor’s license. See ¶9. The nature of the claims against her is wholly unclear. Leave to amend is granted.

2nd—fraud
Plaintiff alleges that defendants misrepresented the fact that they were licensed and able to complete the project. ¶¶22-23. He contends that he relied on that intentional representation to his detriment. Although defendants cite to the rule that fraud must be specifically pled, they do not articulate how the pleading is defective except to state that all defendants are “lumped together.” Plaintiff alleges that each defendant misrepresented his status with respect to the license. The pleading is sufficient, and the demurrer overruled.

5th—conversion
Plaintiff’s conversion cause of action is based on the allegations that defendants took building material from the jobsite. ¶41. Defendants again argue that there are no charging allegations against defendants (other than contracting party Asghar). Plaintiff argues he is not required to identify each defendant, as each engaged in the conversion. Under these facts, because the defendants were working on the project together, it is unlikely plaintiff could allege more specific facts as to each defendant (who presumably have knowledge of their own actions). The demurrer is overruled.

6th—unfair business practices
Plaintiff’s unfair business practices cause of action is also based on the allegation that each of the defendants represented that he held a valid contractor’s license and they performed the work without the proper licensure. Those allegations satisfy the “unlawful” and “fraudulent” prongs of the statutory claims.

7th—conspiracy
The moving defendants are each alleged to have committed the wrongful acts. It appears the conspiracy claim is alleged as an alternative theory in the event that the charging allegations of each defendant cannot be proven, so that each could be held liable under a joint tortfeasor theory. Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503. It may properly be pled as a separate cause of action.

8th—unjust enrichment
Plaintiff contends that defendants obtained a benefit to which they were not entitled, and that under equitable principles, he is entitled to compensatory damages in the amount of $100,000. Plaintiff does not, however, allege that he paid defendants that amount. Unjust enrichment, although sometimes allowable as a cause of action, is a legal theory under which a plaintiff can recover the benefit which was wrongfully obtained by another. Compensatory damages are not the appropriate relief. It appears the claim is duplicative of the damages sought in connection with the actionable causes of action. However, the Court will allow plaintiff to amend the pleading to properly allege a request for damages under an unjust enrichment theory.

9th—disgorgement
Disgorgement is a theory of recovery and not a cause of action. However, from the body of the pleading, it is clear that plaintiff is alleging a violation of Business and Professions Code section 7031. Defendants argue that there is no allegation that each of the defendants received profits. Subsection (b) of the statute allows a plaintiff to seek return of “all compensation paid.” It is unclear, however, whether each of the defendants received compensation from plaintiff, as only Ashghar was the contracting party. Leave to amend is granted so that plaintiff may allege, if the facts so support, that she paid each of the defendants.

Motion to strike
Plaintiff’s allegations (1) that each defendant represented that he held a license, and (2) that each converted construction materials are sufficient to support fraud, and thus are also supportive of a punitive damages claim. The motion to strike is denied.