DANIELS TIRE SERVICE v. CROWN WORLDWIDE

Defendant CROWN WORLDWIDE INDUSTRIAL’s demurrer is SUSTAINED WITH 20 DAYS LEAVE TO AMEND as to the 1st (breach of contract), 2nd (intentional misrepresentation), 4th (concealment) and 9th (breach of implied covenant) causes of action; SUSTAINED WITHOUT LEAVE TO AMEND as to the 7th (fraud) cause of action and OVERRULED as to the 6th (common counts) cause of action. C.C.P. § 430.10(f).

As alleged, the parties entered into oral agreements whereby plaintiff agreed to purchase from defendants $97,020 worth of “A grade” tire casings. Comp., ¶7. In September 2012, plaintiff tendered full payment. ¶8. As part of the agreements, defendant was obligated to return unused monies if it failed to provide the tire casings as promised. ¶10. Plaintiff alleges that defendant breached its obligation by only providing a portion of the product and failing to return any of the monies upon plaintiff’s demand, and by attempting to sell tire casings of a lesser grade. ¶11. Plaintiff alleges damages in excess of $60,000. ¶15.

Plaintiff asserts causes of action for breach of contract (1st), intentional misrepresentation (2nd), negligent misrepresentation (3rd), concealment (4th), violation of Business and Professions Code section 17200 (5th), common counts (6th), fraud (7th), quantum meruit (8th) and breach of implied covenant of good faith and fair dealing (9th). Defendant demurs to all but the negligent misrepresentation, 17200 and quantum meruit claims on the ground of uncertainty.

At the outset, the Court finds that the 7th cause of action for fraud is duplicative of the 2nd through 4th causes of action, which specify the particular “types” of fraud plaintiff seeks to assert. The 7th cause of action does not set forth an additional theory of liability, and thus adds nothing to the pleading. The demurrer to the 7th cause of action is sustained without leave to amend.

The causes of action for intentional misrepresentation and concealment are challenged on the ground that they lack the requisite specificity. Plaintiff has not identified who made the statements (or failed to disclose the material facts) on behalf of defendant Crown Worldwide or to whom they were made within the plaintiff corporation. See Stansfield v. Starkey (1990) 220 Cal.App.3d 59. Because of the serious nature of a fraud claim, those facts must be alleged with particularity. Id. Here, plaintiff is alleging various tort claims arising out of a purchase agreement. Additional facts are warranted. The demurrer is sustained with leave to amend as to the 2nd and 4th causes of action.

Defendant also demurs to the breach of contract and common counts claims. It argues that the breach of contract cause of action is barred by the statute of frauds. C.C. §1622; Comm. Code §2201. The alleged oral contract appears to fit within the confines of section 2201 (sale of goods over $500). It is unclear from the facts alleged whether any of the exceptions to the statute apply, and thus plaintiff’s ability to assert a breach of contract cause of action is not evident. See Secrest v. Security Nat’l Mort. Loan Trust 2002-02 (2008) 167 Cal.App.4th 544. The Court will allow plaintiff an opportunity to amend the pleading.

The demurrer is overruled to the common counts cause of action. Defendant argues that plaintiff has not pled facts showing that the money received by defendant was intended for plaintiff’s use. That is an element of “money had and received,” a type of common count. See, e.g. Avidor v. Sutter’s Place, Inc. (2013) 212 Cal.App.4th 439. A common count claim may be generally pled where the facts state an entitlement to recovery of money. See, e.g. Utility Audit Co., Inc. v. City of Los Angeles (2003) 112 Cal.App.4th 950, 958. Plaintiff has stated facts which, taken as true, entitle it to relief on equitable grounds.

Finally, defendant demurs to the breach of implied covenant cause of action on the ground that the underlying contract may not be enforceable. Defendant correctly argues that the cause of action requires the existence of a valid contract. Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371. The claim for breach of the implied covenant also involves something beyond the breach of a contractual duty. The complaint, as alleged, fails in both respects. Leave to amend is granted.

Print Friendly, PDF & Email
Copy the code below to your web site.
x 

Leave a Reply

Your email address will not be published. Required fields are marked *