Case Number: BC658853 Hearing Date: May 24, 2018 Dept: 53

allison banks herbert vs. home management care, inc. , et al.; BC658853, May 24, 2018

[Tentative] Order RE: DEFENDANTS’ DEMURRER TO PLAINTIFF’S SECOND AMENDED COMPLAINT

Defendants’ Demurrer to the Second Amended Complaint is SUSTAINED WITH LEAVE TO AMEND as to the second, third, and fourth causes of action. The Demurrer to the first cause of action is SUSTAINED WITHOUT LEAVE TO AMEND.

Background

Plaintiff Allison Banks Herbert (“Plaintiff”) filed this action on April 21, 2017 against Defendants Home Management Care, Inc. (“HMCI”) and its owner, Lawrence Appel (“Appel”) (jointly, “Defendants”). The gravamen of the operative Second Amended Complaint (“SAC”) is that Defendants breached an agreement with Plaintiff which provided that she would be paid $15 per hour for providing in-home care services for her parents. Plaintiff alleges that Defendants told her a nonparty insurance company, Genworth (“Genworth”) ultimately responsible for the payments to Plaintiff would only pay for 41 hours a week. Plaintiff further alleges this was an intentional and knowing misrepresentation, as Defendants actually billed Genworth for 56 hours a week for 124 weeks, which Plaintiff in fact worked, and kept the payment for the balance of the hours for themselves. Defendants allegedly forged Plaintiff’s signature on timesheets submitted to Genworth so they could receive the excess pay.

Defendants demur to each cause of action on the grounds that the Complaint is uncertain and unintelligible and fails to allege the elements of any of the causes of action pled. Plaintiff opposes.

LEGAL STANDARD

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 966-967.) A demurrer “does not admit contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)

DISCUSSION

(1) Uncertainty of Complaint

As an initial matter, Defendants argue that Plaintiff’s SAC fails as it is fatally uncertain. However, demurrers for uncertainty are strictly construed, because discovery can be used for clarification, and apply where defendants cannot reasonably determine what issues or claims are stated. (Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal.App.4th 612, 616.) Here the causes of action and their bases are reasonably determinable. Accordingly, Defendants’ demurrer is overruled on this ground.

(2) First Cause of Action for Breach of Oral Contract

“The elements of a breach of oral contract claim are the same as those for a breach of written contract: a contract; its performance or excuse for nonperformance; breach; and damages.” (Stockton Mortgage, Inc. v. Tope (2014) 233 Cal.App.4th 437, 453.) Defendants argue that it is unclear what the precise terms of the contract(s) were, whether there was in fact a contract, and how the contracts were allegedly breached.

The Court finds that Plaintiff has alleged the existence of an oral agreement between HMCI and Plaintiff, and that the terms of the oral agreement were that Plaintiff would provide in-home care to her parents for 56 hours per week for the lifetime of each of her parents. In exchange, HMCI would pay Plaintiff $15 per hour. (SAC, ¶ 8.) However, the Court finds that Plaintiff has still failed to properly plead a breach of the agreement. Plaintiff alleges that Defendants breached the agreement by falsely representing to Plaintiff that Genworth would only pay for 41 hours per week and by forging time sheets submitted to Genworth. (SAC, ¶ 15.) However, there is no allegation that any term of the oral agreement included truthfully representing how many hours per week Plaintiff would be paid for. Similarly, there is no allegation that any term of the oral agreement included providing authentic time sheets to Genworth. Rather, HMCI agreed to pay Plaintiff $15 per hour for seven days a week for in-home care services, and Plaintiff makes no allegation that HMCI failed to pay Plaintiff $15 per hour for seven days a week for in-home care services. Therefore, the demurrer to this cause of action is sustained. Further, because Plaintiff has been provided multiple opportunities to amend this cause of action, the Court finds that there is no reasonable possibility that Plaintiff can state a viable claim for breach of contract on the facts as pled. Therefore, the demurrer to this cause of action is sustained without leave to amend.

(3) Second and Third Causes of Action for Fraudulent Inducement and Fraud

To plead a cause of action for fraud, Plaintiff must plead facts showing the following elements: (1) misrepresentation, (2) knowledge of falsity, (3) intent to defraud, (4) justifiable reliance, and (5) resulting damage. (Charnay v. Cobert (2006) 145 Cal.App.4th 170, 184.) Fraud must be pleaded specifically. To survive demurrer, plaintiff must plead facts that “show how, when, where, to whom, and by what means the representations were tendered.” (Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, 1614.) “An action for promissory fraud may lie where a defendant fraudulently induces the plaintiff to enter into a contract.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.)

In the SAC, Plaintiff alleges that in or about April 2014, after receiving her first payment, she called Appel to complain that her check was only for 41 hours instead of 56 hours. (SAC, ¶ 11.) Plaintiff alleges that Appel falsely represented to her that Genworth would only pay for 41 hours. (SAC, ¶ 11.) The Court finds that this allegation is sufficient to plead misrepresentation. The Court also finds that knowledge of falsity is sufficiently alleged because Plaintiff alleges that HMCI submitted invoices to Genworth for 56 hours per week and accepted payment from Plaintiff worked 56 hours per week from March 2014 until August 2016. (SAC, ¶ 11.) Plaintiff further alleges that she agreed to modify her oral agreement with HMCI as a result of Appel’s representations. (SAC, ¶ 11.) The modification is essentially that while Plaintiff worked 56 hours per week, she agreed to be paid only for 41 of those hours. The Court finds that there are insufficient facts showing actual reliance. Plaintiff does not allege that she changed her position as a result of the alleged misrepresentations. Rather, she was working 56 hours per week before the misrepresentation and continued working 56 hours per week after the misrepresentation. There is no allegation of how the misrepresentation influenced Plaintiff’s subsequent conduct or that Plaintiff would not have engaged in certain conduct without the misrepresentation. Without actual reliance, there is no justifiable reliance. (See Mirkin v. Wasserman (1993) 5 Cal.4th 1082, 1088 [“It is settled that a plaintiff, to state a cause of action for deceit based on a misrepresentation, must plead that he or she actually relied on the misrepresentation.”].) Therefore, the demurrer to the second and third causes of action is sustained with leave to amend.

(4) Fourth Cause of Action for Money Had and Received

Defendants argue that Plaintiff’s common count claim fails as based on the facts purported to support the breach of contract and fraud claim which both also fail, citing, inter alia, Hays v. Temple (1937) 23 Cal.App.2d 690, 695. Plaintiff does not address the cited authority. The Court finds that, because it sustained Defendants’ demurrer as to the first three causes of action, the demurrer must be sustained to the fourth cause of action based on the same facts.

CONCLUSION

Defendants’ demurrer is SUSTAINED as to all causes of action, but leave to amend is granted only as to the second, third, and fourth causes of action.

The Court orders Plaintiff to file any amended complaint within 20 days of this order.

Defendants are ordered to provide notice of this ruling.

DATED: May 24, 2018

_____________________________

Howard L. Halm

Judge of the Superior Court