Case Number: EC062427    Hearing Date: July 18, 2014    Dept: NCB

20. EC062427
HIM & HER, INC. v EVERGREEN CONSTRUCTION & REMODELING
Demurrer and Motion to Strike

The Complaint alleges that the parties entered into a written construction contract for the Defendants to build an addition to the Plaintiff’s commercial building at 9724 Factorial Way, South El Monte. The Defendants breached the agreement by failing to perform the services in a good and workmanlike manner and by abandoning the work.

Plaintiff pleads the following causes of action in the Complaint:
1) Breach of Contract
2) Breach of Implied Covenant of Good Faith and Fair Dealing
3) Unjust Enrichment
4) Contractual Indemnity
5) Fraud – Intentional Misrepresentation
6) Negligent Misrepresentation
7) Fraud – Promise without Intent to Perform
8) Negligence
9) Revocation of License
10) Release of Mechanic’s Lien
11) Release of Mechanic’s Lien
12) Release of Mechanic’s Lien
13) Release of Mechanic’s Lien

This hearing concerns the Defendants’ demurrer and motion to strike.

1. Demurrer to Third 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.
Therefore, the Court sustains the demurrer to the third cause of action. It does not appear reasonably possible to correct this by amendment because unjust enrichment is a remedy. Accordingly, the Court does not grant leave to amend.

2. Demurrer to Fourth Cause of Action for Contractual Indemnity
The Defendants argue that this cause of action lacks sufficient facts because the copy of the contract attached to the Complaint does not contain an indemnity clause. Ordinarily on demurrer the allegations of the complaint must be accepted as true. But this does not apply to allegations expressing mere conclusions of law, or allegations contradicted by the exhibits to the complaint or by matters of which judicial notice may be taken. Vance v. Villa Park Mobilehome Estates (1995) 36 Cal. App. 4th 698, 709. Facts appearing in exhibits attached to the complaint are given precedence over inconsistent allegations in the complaint. Dodd v. Citizens Bank (1990) 222 Cal.App.3d 1624, 1627.

The Plaintiff’s fourth cause of action includes allegations in paragraph 32 to 35 that the Plaintiff has performed its duties under the contract, but the Defendants have breached their duty to indemnity and hold harmless the Plaintiff from claims by the subcontractors on the project. The Plaintiff alleges in paragraph 10 that the parties entered into a written construction contract and that a copy is attached as exhibit A.
A review of the contract in exhibit A reveals that it includes estimates for concrete, framing, material, and labor and the price for the contract. There is no agreement to indemnity the Plaintiff.
These facts in the contract attached to the Complaint as an exhibit are given precedence over the inconsistent allegations in the fourth cause of action for contractual indemnity. Since the contract does not contain an agreement to indemnify, the Plaintiff has not pleaded a claim for contractual indemnity.

Therefore, the Court sustains the Defendants’ demurrer to the fourth cause of action because the facts in the exhibit attached to the Complaint reveal that there was no contractual agreement to indemnity.

It does not appear reasonably possible to correct this defect because the contract between the parties does not contain an agreement to indemnify. The Plaintiff has the burden of showing the manner in which it can amend its complaint to correct this defect and how that amendment will change the legal effect of its pleading. Goodman v. Kennedy (1976) 18 Cal.3d 335, 349. The Plaintiff did not file any opposition papers. Since it does not appear reasonably possible for the Plaintiff to correct this by amendment, the Court does not grant leave to amend.

3. Demurrer to Fifth Cause of Action for Fraud – Intentional Misrepresentation, Sixth Cause of Action for Negligent Misrepresentation, and Seventh Cause of Action for Fraud – Promise without Intent to Perform
The Defendants argue that the Plaintiff did not plead these claims with the particularity needed to state causes of action for 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. In addition, fraud pleadings against a corporation must allege the names of the persons who made the misrepresentations, their authority to speak for the corporation, to whom they spoke, what they said or wrote, and when it was said or written. Tarmann v. State Farm Mutual Automobile Insurance Co. (1991) 2 Cal.App.4th 153, 157.
The elements of negligent misrepresentation are the following:

1) a misrepresentation of a past or existing material fact;
2) without reasonable grounds for believing it to be true;
3) with intent to induce another’s reliance on the fact misrepresented;
4) ignorance of the truth and justifiable reliance thereon by the party to whom the misrepresentation was directed; and
5) damages.
B.L.M. v. Sabo & Deitsch (1997) 55 Cal. App. 4th 823, 834.

Negligent misrepresentation is a separate and distinct tort, a species of the tort of fraud. Bily v. Arthur Young & Co. (1992) 3 Cal. 4th 370, 407. Since it is a tort of fraud, facts constituting each element 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.
A cause of action for fraud based on a false promise is a fraud claim in which the plaintiff must specifically allege and prove that the promisor did not intend to perform at the time he or she made the promise and that it was intended to deceive or induce the promisee to do or not do a particular thing. Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal. App. 4th 153, 159.
Each of these causes of action is based on the Defendants making false representations to the Plaintiff. The legal authority requires that the element be pleaded with particularity, i.e., how, when, where, to whom, and by what means the representations were tendered.

A review of the fifth, sixth, and seventh causes of action reveals that the Plaintiff did not plead the element of a false representation with particularity. In paragraph 39 of the fifth cause of action for fraud by intentional misrepresentation, the Plaintiff alleged that the Defendants made false representations. There are no allegations that identify how, when, where, or by what means the representations were tendered.
Further, the Plaintiff is a business entity. There are no allegations identifying the person to whom the representations were tendered. This is insufficient.
In paragraph 47 of the sixth cause of action for negligent misrepresentation, the Plaintiff alleged that the Defendants made false representations. There are no allegations that identify how, when, where, or by what means the representations were tendered.
Further, the Plaintiff is a business entity. There are no allegations identifying the person by whom the representations were tendered. This is insufficient.
In paragraph 54 of the seventh cause of action for fraud by false promise, the Plaintiff alleged that the Defendants made false promises. There are no allegations that identify how, when, where, or by what means the promises were tendered. Nor does Plaintiff identify the person by whom the false promises were tendered and its authority to speak for the corporation. This is insufficient.

Therefore, the Court sustains the Defendants’ demurrers to the fifth, sixth, and seventh causes of action because the Plaintiff did not plead the causes of action with the required particularity.

The Plaintiff has the burden of showing the manner in which it can amend its complaint to correct this defect and how that amendment will change the legal effect of its pleading. Goodman v. Kennedy (1976) 18 Cal.3d 335, 349. The Plaintiff did not file any opposition papers. Since the Plaintiff did not demonstrate that it is possible to amend, the Court does not grant leave to amend.

4. Demurrer to Ninth Cause of Action for Revocation of License
The Defendants argue that the Plaintiff is seeking an administrative remedy and that the Plaintiff has not pleaded that it exhausted its administrative remedies prior to bringing this action.
The Plaintiff seeks relief in the ninth cause of action under Business and Professions Code section 7106. Section 7106 permits a Court hearing an action regarding a contractor’s performance of legal obligations as a contractor to determine whether to suspend or revoke the contractor’s license. Case law holds that disciplinary matters regarding a contractor’s license should be left to the licensing board. Judson Pacific-Murphy Corp. v. Durkee (1956) 144 Cal. App. 2d 377, 386. Accordingly, there are grounds to determine that a cause of action lacks sufficient facts if it fails to plead that an available administrative remedy had been exhausted. Id.

A review of the ninth cause of action reveals no allegation that the Plaintiff exhausted its administrative remedies before bringing this claim. Since the Plaintiff did not plead that it had exhausted its administrative remedies, the cause of action lacks sufficient facts.

Therefore, the Court sustains the Defendants’ demurrers to the ninth cause of action because the Plaintiff did not plead that it had exhausted its administrative remedies.

The Plaintiff has the burden of showing the manner in which it can amend its complaint to correct this defect and how that amendment will change the legal effect of its pleading. Goodman v. Kennedy (1976) 18 Cal.3d 335, 349. The Plaintiff did not file any opposition papers. Since the Plaintiff did not demonstrate that it is possible to amend, the Court does not grant leave to amend.

5. Motion to Strike
The Defendants request that the Court strike the claims for attorney’s fees because there are no allegations identifying a basis for awarding attorney’s fees. The Plaintiff filed opposition papers on July 7, 2014 in which it agreed that the Complaint lacks allegations identifying the statutory basis for its claim for attorney’s fees. The Plaintiff requests leave to amend to add the applicable code sections.

Therefore, the Court strikes the plaintiff’s claim for attorney’s fees with 10 days leave to amend.