2013-00144063-CU-BT

Dan Arriola vs. Vinculums Services, Inc.

Nature of Proceeding:  Hearing on Demurrer

Filed By: Calderon, David R.

Defendant Vinculums Services, Inc.’s demurrer to Plaintiff Dan Arriola’s second
amended complaint (“SAC”) is sustained with leave to amend.

Defendant’s request for judicial notice is granted.

In this action, Plaintiff alleges that Defendant , a telecommunications company that
bids on projects requiring a California General Contractor’s License, used his name to
qualify it for a license with the Contractors’ State Licensing Board (“CSLB”) during
such times when he was no longer employed by Defendant.  He alleges that during
such times, he was not compensated by Defendant and did not know that Defendant
listed him as its qualifying individual for the purposes of maintaining its General
Contractor’s License with the CSLB.

The Court previously sustained Defendant’s demurrer to Plaintiff’s previous complaint
which contained causes of action for fraud, for violation of Business and Professions
Code § 17200 and unjust enrichment.  The SAC removed the fraud and Business and
Professions Code § 17200 causes of action and left the unjust enrichment cause of
action.  The factual allegations stated above are essentially unchanged from the
complaint.  Importantly, in its ruling on the previous demurrer, the Court found that the
causes of action for fraud and violation of Business and Professions Code § 17200
were insufficiently pled.  In addition, in sustaining the demurrer to the unjust
enrichment cause of action, the Court clearly stated that the unjust enrichment cause
of action, which relies upon an underlying wrong, was sustained for the same reasons
that the demurrers to the other causes of action were sustained.

Here, the SAC did nothing more than remove the fraud and Business & Professions
Code causes of action from the complaint and left the derivative unjust enrichment
cause of action.

Defendant demurs to the SAC on the basis that there is no independent cause of
action for unjust enrichment and in any event, the SAC does not allege any underlying
wrong.  While there are cases stating that unjust enrichment is not a stand alone
cause of action (e.g., Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th
779, 794) there are, as Plaintiff points out in opposition, cases that indicate that there
is a cause of action for unjust enrichment (e.g., Lectrodryer v. Seoul Bank (2000) 77
th
Cal.App.4   723, 726.)  It has been noted that Courts have observed “a split of authority
in California as to whether a claim for unjust enrichment is recognized as an
independent cause of action.”  (Concorde Equity II, LLC v. Miller (N.D. Cal. 2010) 732
F. Supp. 2d 990, 1001.)   California courts agree that ‘unjust enrichment’ is in effect,
‘the result of a failure to make restitution under circumstances where it is equitable to
do so.’”  (Concorde Equity II, LLC v. Miller, 732 F. Supp. 2d 990, 1001 (N.D. Cal.
2010), quoting Melchior v. New Line Prods., Inc., (2003) 106 Cal. App. 4th 779, 793.)
Unjust enrichment is synonymous with the term “restitution.”  (Dinosaur Development,
Inc. v. White (1989) 216 Cal.App.3d 1310, 1314.)  However, even the cases indicating
that there is such a cause of action recognize that it must be premised on an
th
underlying wrong.  (Lectrodryer, supra, 77 Cal.App.4   723.)  Here, however, the
underlying wrongs which were insufficiently alleged in the previous versions of the
complaint, specifically the fraud and Business & Professions Code Causes of Action,
have now been removed.  While the factual allegations remain, the Court already
found that those facts were insufficient to allege an underlying wrong.

While Plaintiff argues that an underlying wrong has been pled because the facts show
that Defendant violated Business & Professions Code §§ 7065, 7068.2, and 7083
when it continued to list Plaintiff as its responsible managing employee with the CSLB
and failed to notify the registrar of Plaintiff’s disassociation, the problem with Plaintiff’s
argument is that is essentially ignores the Court’s ruling on the prior demurrer.  Indeed,
the Court found, for example, that Plaintiff’s cause of action for violation of Business &
Professions Code § 17200, based on essentially the identical facts as the unjust
enrichment cause of action, was deficient because Plaintiff failed to identify what laws
Defendant violated.  The SAC does not identify any specific law or statute that
Defendant allegedly violated (e.g., there is no reference in the SAC to Business &
Professions Code §§ 7065, 7068.2, and 7083).  Indeed, the SAC does not even allege
that Defendant conduct was wrongful.  That is, while he alleges that Defendant should
have compensated him for using his name because it was using his name as its
qualifying individual for the purposes of maintaining its General Contractor’s License
with the CSLB, there is no specific allegation that such conduct was wrongful.  Thus,
even assuming that there is a separate cause of action for unjust enrichment, Plaintiff
has not alleged facts demonstrating any underlying wrong on which it could be based.
As a result, Defendant’s demurrer is sustained.

Leave to amend is given as the Court is not yet convinced Plaintiff will be unable to
state a cause of action based on these facts.  Plaintiff indicates that he would like to
assert an additional cause of action (separate from the unjust enrichment cause of
action) based on the same set of facts and the Court grants Plaintiff leave to do so.

Plaintiff may file and serve an amended complaint no later than June 9, 2014.
Defendant shall file and serve its response within 10 days thereafter, 15 days of the
amended complaint is served by mail.  (Although not required by any statute or rule of
court, Plaintiff is requested to attach a copy of the instant minute order to the amended
complaint to facilitate the filing of the pleading.)

The minute order is effective immediately.  No formal order pursuant to CRC Rule
3.1312 or other notice is required.