Case Number: BC541323    Hearing Date: September 03, 2014    Dept: 58

JUDGE ROLF M. TREU
DEPARTMENT 58
________________________________________
Hearing Date: Wednesday, September 3, 2014
Calendar No: 6
Case Name: Carballo v. Geovest Corporation, et al.
Case No.: BC541323
Motion: Demurrer
Moving Party: Cross-Defendant Faustino Carballo
Responding Party: Cross-Complainant Geovest Corporation dba ACP Management Company
Notice: OK

Tentative Ruling: Demurrer is overruled. Cross-Defendant Faustino Carballo to answer within 10 days.
________________________________________

On 4/2/14, Plaintiff Faustino Carballo filed this action against Defendants Geovest Corporation, ACP Management Company, American California Property Management Company, B.G.N. Acquisitions Sierra Gardens, LP, and George Kallins arising out of his employment and termination. Plaintiff alleges that he worked as a resident manager for Defendants’ Sierra Gardens Apartment Complex located at 16245 Lakewood Blvd., Bellflower, CA 90706; that on 9/27/12, Defendants created two written warnings against Plaintiff and terminated him at the age of 69, replacing Plaintiff with someone approximately 30 years younger than Plaintiff. Plaintiff asserts causes of action for (1) FEHA age discrimination, (2) FEHA failure to prevent discrimination, (3) FEHA retaliation, (4) intentional infliction of emotional distress, and (5) wrongful termination in violation of public policy.

On 6/2/14, Defendants filed an answer and Geovest dba ACP Management Co. (“ACP”) filed a cross-complaint against Plaintiff. On 7/18/14, in response but prior to the hearing on Plaintiff’s demurrer to the cross-complaint, ACP filed a First Amended Cross-Complaint.

Pertinent Factual Allegations of the FACC –
On 2/10/11, Plaintiff was hired as a resident manager for the Sierra Gardens Apartments. ¶ 18. On 9/1/12, ACP received a report from a “mystery shopper” concerning negative impressions of interactions with Plaintiff as a prospective tenant. ¶ 20. On 9/6/12, ACP hired an independent marketing consultant Naomi Bailey to help Plaintiff covert his email and internet leads: Ms. Bailey reported that Plaintiff was uninterested, did not check leads, and Plaintiff’s wife responded to faxes. ¶ 22. After providing training, Ms. Bailey returned on 9/12/12 and reported that Plaintiff did not promptly respond to internet leads, responding only in the evenings. ¶ 23. Ms. Bailey also noted that Plaintiff’s wife answered all calls and conducted tours for prospective tenants. ¶ 24.

ACP learned that from January 2012 to September 2012, Plaintiff only opened approximately 7 out of 497 email leads from marketing vendors for prospective tenants to which he only responded to 2: Plaintiff should have responded to these paid leads to address vacancies and future availability at the Sierra Gardens Apartments or gauge interest for sister properties in the area. ¶ 25.

On 9/17/12, ACP’s regional manager Jennifer Barragan gave Plaintiff a performance evaluation highlighting his lack of use of the computer. ¶ 26. On 9/19/12, ACP received a letter from Raul Parvu, an approved painting contractor, stating that Plaintiff had asked for a commission on all work done at Sierra Gardens Apartments. ¶ 27. ACP also learned that Plaintiff removed the exclusive carpet cleaning vendor without authorization, replacing a vendor that agreed to pay Plaintiff kickbacks. ¶ 28.

On 9/27/12, Ms. Barragan wrote up Plaintiff for soliciting kickbacks, using unauthorized vendors, and for failure to properly manage the property with respect to prospective tenants. ¶ 29. ACP therefore terminated Plaintiff’s employment. ¶ 30.

The FACC asserts causes of action for (1) fraud, (2) negligent misrepresentation, (3) intentional interference with contractual relations, and (4) breach of the duty of loyalty.

Demurrer –
Plaintiff demurs to the FACC on several grounds.

1. Misrepresentation Claims
Plaintiff argues that the fraud and negligent misrepresentation claims are not alleged with particularity. However, Plaintiff’s citations to the fraud specificity pleading requirements (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 72-73; Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184) are intended to apply to affirmative misrepresentations (Alfaro v. Community Housing Improvement System & Planning Ass’n, Inc. (2009) 171 Cal.App.4th 1356, 1384). In contrast, the FACC’s fraud claims are based on Plaintiff’s alleged concealment of Plaintiff’s progress in responding to leads and Plaintiff’s solicitation of kickbacks. FACC ¶¶ 33-36, 45-48. At the pleading stage, ACP has alleged sufficient facts to support the elements of the fraud and negligent misrepresentation claims.

The Court notes that Plaintiff has also asserted arguments based on inactionable opinions and promises of future conduct (Tarmann v. State Farm Mutual Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 158), constructive fraud (Odorizzi v. Bloomfield School Dist. (1966) 246 Cal.App.2d 123, 129), and the purchase of claims (Sanborn v. Doe (1891) 92 Cal. 152, 154). However, these arguments do not apply to the claims alleged in the FACC.

2. Intentional Interference with Contractual Relations
Plaintiff argues that ACP fails to allege facts that Plaintiff intended to cause interference with contractual relations (Ramona Manor Convalescent Hospital v. Care Enterprises (1986) 177 Cal.App.3d 1120, 1130). The Court disagrees. ACP alleges that Plaintiff solicited kickbacks from approved contractors and replaced such contractors with vendors who did pay Plaintiff kickbacks without ACP’s authorization. FACC ¶¶ 27-28. At the pleading stage, this is sufficient to support intent to disrupt ACP’s contractual relations with its approved contractors.

Plaintiff argues that the alleged conduct is not actionable as a matter of law because he only persuaded contractors to breach their contracts. Plaintiff’s argument is based on the privilege of competition (see, e.g., A-Mark Coin Co. v. General Mills, Inc. (1983) 148 Cal.App.3d 312, 323); however, this improperly attempts to dispute the allegations of the FACC at the pleading stage.

3. Breach of Loyalty
Plaintiff argues that ACP fails to allege facts of a contractual relationship between Plaintiff and ACP. However, ACP has alleged that Plaintiff was employed as a resident manager. See FAC ¶ 18, Ex. H. This supports the existence of a relationship giving rise to a duty of loyalty. See Huong Que, Inc. v. Luu (2007) 150 Cal.App.4th 400, 410.

To the extent Plaintiff raises arguments based on breach of contract or common counts, these arguments do not apply to the claims alleged in the FACC.

4. Ruling
The demurrer is overruled. Plaintiff to answer the FACC within 10 days.