Case Name:   Balaji Ramamurthy v. Cisco Systems, Inc., et al.

Case No.:       1-13-CV-246926

After full consideration of the arguments, authorities, and papers submitted by each party, the court makes the following rulings:

Cross-complainant Ascent Technologies, Inc. (“Ascent”) alleges that it hired plaintiff and cross-defendant Balaji Ramamurthy (“Plaintiff”) in 2010 and “provided him” to cross-defendant IDC Technologies, Inc. (“IDC”), who placed him with cross-defendant Cisco Systems, Inc. (“Cisco”) to work at Cisco’s premises at the direction of IDC.  (See Second Amended Cross-Complaint by Ascent Technologies, Inc. (“SACC”), ¶¶ 6-7.)  Plaintiff resigned when he was not paid, and Ascent alleges that IDC still owes it $54,162 for Plaintiff’s services.  (See SACC, ¶¶ 12-17.)  Plaintiff filed the underlying action for nonpayment of wages and related claims against Ascent, IDC, Tata Consultancy Services Limited (“Tata”), and Cisco on May 24, 2013.  (See SACC, ¶ 18.)  IDC, Tata, and Cisco settled with Plaintiff and Plaintiff dismissed all of the defendants from the underlying action.  (See SACC, ¶¶ 19, 21.)  Then, IDC cross-complained against Ascent for indemnity, breach of contract, and declaratory relief, although it had not tendered defense of the underlying action to Ascent or demanded indemnity from Ascent prior to settling with Plaintiff without Ascent’s knowledge.  (See SACC, ¶¶ 21-23.)  Ascent alleges that the settlement with Plaintiff was based on time sheets that were manipulated to inflate the hours actually worked, and IDC’s cross-complaint is an attempt to harass Ascent and to avoid paying the $54,162 in invoices it owes to Ascent for Plaintiff’s services.  (See SACC, ¶¶ 26, 27, 30.)

Currently before the Court is IDC’s demurrer to the third and fourth causes of action of the second amended cross-complaint (“SACC”) on the ground that they fail to allege facts sufficient to constitute a cause of action.  (See Code Civ. Proc., § 430.10, subd. (e).)

IDC’s demurrer to the fourth cause of action for fraud is SUSTAINED, with 10 days’ leave to amend.  In support of the fourth cause of action, Ascent alleges in vague terms that Ascent was induced to enter into its agreement with IDC “with the representations that Plaintiff (sic) [presumably Ascent itself] would benefit from this agreement,” and that cross-defendants “concealed or suppressed their intention to appropriate to themselves and convert Ascent’s interest for themselves.”  (SACC, ¶¶ 56 and 62.)  In addition, Ascent specifically alleges that IDC made the following representations to Ascent: IDC had a contract with Tata to provide personnel; Tata had a contract to provide personnel to Cisco for information technology services; Cisco would pay Tata for the services of the employees provided to Cisco, Tata would pay IDC, and IDC would pay Ascent; Plaintiff would get the time sheet signed and approved for the work done at Cisco, and provide the same to Ascent who would thereafter prepare invoices, attach the time sheets, and send the documentation to IDC for payment.  (See SACC, ¶ 57.)

These allegations are inadequate to state a claim for fraud because: there is no indication that the alleged representations that IDC had a contract with Tata and Tata had a contract with Cisco were false (see SACC, ¶ 8); the alleged representations that Cisco would pay Tata, Tata would pay IDC, and Plaintiff would obtain signed and approved time sheets are statements as to future actions by third parties and are not actionable fraud (see Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4^th 153, 158 [“statements as to future action by some third party, are deemed opinions, and not actionable fraud”]); and they do not state the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, the means by which the fraudulent representations were tendered, or when the fraudulent representations were made.  (See Stansfield v. Starkey (1990) 220 Cal. App. 3d 59, 73; see also Charnay v. Cobert (2006) 145 Cal.App.4th 170, 185, fn. 14.)  Moreover, the SACC fails to set forth any facts supporting the conclusion that IDC did not intend to perform its agreement with Ascent at the time it made the alleged representations.  (See Von Schrader v. Milton (1929) 96 Cal.App. 192, 200 [stating that “[a] mere promise to perform an act in the future is not, in a legal sense, a representation, nor does a failure to perform such promise convert it into a false representation”]; see also Magpali v. Farmers Group (1996) 48 Cal. App. 4th 471, 481 [finding that there was no evidence to support the claim that the alleged promise was false when made as the defendant performed in accordance with its promise for several years].)  Furthermore, IDC persuasively argues that any losses allegedly suffered by Ascent were not the result of the representations made by IDC as the SACC states that IDC stopped paying Ascent because Plaintiff stopped providing time sheets to Ascent and, as a result, Ascent could not bill IDC.  (See SACC, ¶¶ 12, 58; see also Zumbrun v. University of Southern California (1972) 25 Cal. App. 3d 1, 12 [“[a]llegations of damages without allegations of fact to support them are but conclusions of law, which are not admitted on demurrer. … In fraud, the pleading must show a cause and effect relationship between the fraud and damages sought; otherwise no cause of action is stated”].)

IDC’s demurrer to the third cause of action for conspiracy is SUSTAINED, with 10 days’ leave to amend.  As discussed above, Ascent fails to state a claim for any underlying tort and, consequently, also fails to allege a claim for conspiracy. (See Applied Equip. Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510-11 [“Conspiracy is not a cause of action, but a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration. … It must be activated by the commission of an actual tort”]; see also Tietz v. Los Angeles Unified School Dist. (1965) 238 Cal. App. 2d 905, 913 [“The long-established rule that a conspiracy, in and of itself, however atrocious, does not give rise to a cause of action unless a civil wrong has been committed resulting in damage … requires a determination of whether the pleaded facts show something was done which, without the conspiracy, would give rise to a right of action”] [internal citations omitted].)

The Court will prepare the order.