Defendants Western Association of Schools (“WASC”) and Accrediting Commission for Schools (“WASC-ACS”) (collectively, “Defendants”) demur to all five causes of action in plaintiff Institute of Medical Education, Inc.’s (“Plaintiff”) first amended complaint (“FAC”) on the ground of failure to allege facts sufficient to constitute a cause of action. (See Code of Civ. Proc., § 430.10, subd. (e).)
Defendants argue that the FAC fails to allege facts sufficient to support the first and second causes of action because Plaintiff did not plead verbatim recitation of the terms of the alleged contract (“Agreement”) or attach a copy of the Agreement to the FAC. However, Plaintiff pled the legal effect of the Agreement, and pleading the legal effect is sufficient. (See Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198-199; see also FAC, ¶¶ 12-15, 17, and 31.) In addition, Defendants argue that the FAC does not allege any consideration for the Agreement, but consideration does not need to be specifically alleged. (See Bushell v. JPMorgan Chase Bank, N.A. (2013) 220 Cal.App.4th 915, 921 [a breach of contract claim must allege (1) the existence of a contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) resulting damage to plaintiff].) Defendants persuasively argue that since the FAC does not allege that it ever promised to notify Plaintiff of any change in WASC-ACS’s status as a nationally recognized accrediting agency, the allegation that Defendants breached the agreement by failing to notify Plaintiff that WASC-ACS was losing its national recognition does not constitute a breach of contract. However, the FAC also alleges that WASC-ACS’s national recognition as an accrediting agency was essential to the legal effect of the Agreement, and by allowing it to lose that national recognition, Defendants breached the contract. (FAC, ¶¶ 12-15, 17, and 31-33.) Such allegations are sufficient for a breach of contract claim. (See Kong v. City of Hawaiian Gardens Redevelop. Agency (2003) 108 Cal.App.4th 1028, 1047 [“Kong”] [“a demurrer cannot rightfully be sustained to part of a cause of action”]; see also PH II, Inc. v. Super. Ct. (Ibershof) (1995) 33 Cal.App.4th 1680, 1681 [stating that “a party may not demur to a portion of a cause of action”].)
Defendants’ demurrer to the first and second causes of action is therefore OVERRULED.
Defendants argue that their demurrer to the third cause of action should be sustained because the FAC does not allege specific facts concerning each of the contracts that they allegedly intentionally interfered with; however, a plaintiff is not required to specifically plead the terms of its contracts with which the defendants allegedly interfered. (See Pac. Gas & Elec. Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126.) Defendants also assert that the FAC does not allege that they intended to interfere with Plaintiff’s contracts, but the intent element only requires the defendant to have knowledge that interference with the plaintiff’s contract is a necessary consequence of its actions, and the FAC includes such allegations. (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal. 4th 26, 56, citation omitted; FAC, ¶¶ 40-44.) Lastly, Defendants insist that FAC does not allege that Plaintiff breached its contracts with third parties. This argument is unavailing because the plaintiff must plead either an actual breach or disruption of the contractual relationship. (Pac. Gas & Elec. Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126.) The FAC alleges that Defendants disrupted Plaintiff’s contractual relationships. (FAC, ¶¶ 26-29 and 41-45.)
Accordingly, Defendants’ demurrer to the third cause of action is OVERRULED.
Defendants maintain that the FAC does not allege facts sufficient to support the fourth cause of action because it includes “other persons” as parties with whom Plaintiff had a prospective economic advantage. In addition to “other persons,” the FAC alleges that Plaintiff had economic relationships with prospective students and faculty members. (FAC, ¶ 47; see also, e.g., Kong, supra, at p. 1047.) Defendants also contend that the FAC does not allege with specificity the duty that Defendants allegedly breached. Although the legal conclusion that “a duty” exists is neither necessary nor proper to include in a complaint, facts that cause it to arise (or from which it is “inferred”) are essential to a negligence claim. (See, e.g., Guilliams v. Hollywood Hosp. (1941) 18 Cal.2d 97, 99, [allegation sufficient]; Vescovo v. New Way Enterprises, Ltd. (1976) 60 Cal.App.3d 582, 589, [facts from which duty is inferred are sufficient].) Here, the FAC alleges sufficient facts for the Court to infer that Defendants owed Plaintiff a duty to exercise reasonable care and to maintain WASC-ACS’s national recognition as an accrediting agency. (FAC, ¶¶ 12-15, 17, and 31.)
Therefore, Defendants’ demurrer to the fourth cause of action is OVERRULED.
Defendants argue that the demurrer to the fifth cause of action should be sustained because the FAC alleges that Defendants promised to accredit Plaintiff, but does not allege that WASC-ACS ever ceased to accredit Plaintiff. However, the promissory estoppel claim is predicated on the allegations that Defendants unequivocally promised that WASC-ACS was a nationally recognized accrediting agency and Plaintiff reasonably and foreseeably relied on the promises. (FAC, ¶¶ 21, 54, and 56-57; see also Laks v. Coast Fed. Sav. & Loan Assn. (1976) 60 Cal.App.3d 885, 890.) Defendants proffer factual arguments to refute the factual allegations set forth in the FAC; however, for the purposes of a demurrer, the facts in the FAC are presumed to be true. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213–214.) Defendants also contend that WASC-ACS “never represented to [Plaintiff] that it would remain recognized by the BPPE,” but whether Defendants promised to “remain recognized by the BPPE” is immaterial to the promissory estoppel analysis.
Defendants’ demurrer to the fifth cause of action is accordingly OVERRULED.