Case Number: EC066178 Hearing Date: January 12, 2018 Dept: NCD

TENTATIVE RULING

DEMURRER

Calendar: 5

Date: 1/12/18

Case No. EC 066178 Trial Date: None Set

Case Name: Yepremian v. Samuels

Moving Party: Defendant Joseph Samuel

Responding Party: Plaintiff Karo Yepremian (No Opposition)

RULING:

[No Opposition]

The meet and confer declaration filed by defendant indicates that in violation of plaintiff’s obligations under CCP § 430.41, plaintiff failed to respond to a meet and confer telephone message and emailed correspondence from defendant. The parties are ordered to meet and confer in good faith in the hallway, plaintiff is ordered to prepare the required declaration under CCP § 430.41 that sets forth the results of the meet and confer, and the parties are then ordered to return to the courtroom with the declaration.

Defendant Samuel’s UNOPPOSED Demurrer to Plaintiff’s First Amended Complaint is OVERRULED as the third cause of action for intentional interference with economic relationship.

Demurrer is SUSTAINED WITHOUT LEAVE TO AMEND as to the fifth cause of action for negligence, which continues to allege only deliberate misconduct, and as to the 1st cause of action for a failure to identify a specific statute or law, or series of incidents, which constitute an unfair business practice, as opposed to one time deliberate conduct directed against one competitor, i.e. the plaintiff.

Ten days to answer.

RELIEF REQUESTED:

Sustain demurrer to first, third and fifth causes of action of First Amended Complaint

MEET AND CONFER? Plaintiff’s counsel did not respond

CAUSES OF ACTION: From First Amended Complaint

1) Unfair Competition

2) Slander of Title

3) Interference with Economic Relation

4) Negligent Interference with Prospective Economic Relations

5) Negligence

6) Tortious Interference with Prospective Business Advantage

SUMMARY OF FACTS:

Plaintiff Karo Yepremian alleges that Studio City Hospice, Inc. (“the Corporation”) was originally incorporated in January of 2011, and issued 100 shares of stock, with defendant Joseph Samuel as the original sole officer, director, and one hundred percent shareholder. The Corporation was located on premises in Studio City owned or controlled by Samuel.

In December of 2012, the Corporation was sold to Anush Miduryan, who became the sole officer, director and one hundred percent shareholder, so that Samuel from that time had no ownership interest in the Corporation or authority to act on its behalf. In December of 2014, Miduryan sold the Corporation to plaintiff Yepremian, who became the sole officer, director, and one hundred percent shareholder.

Plaintiff alleges that on December 31, 2014, without authorization, consent or authority of the Corporation, Samuel unlawfully executed a purported State of California Secretary of State “Domestic Stock Corporation Certificate of Dissolution,” in which Samuel falsely claimed the Corporation had elected to wind up and dissolve, that the Corporation had not issued any shares, and that the election was made by the board of directors of the Corporation. In March of 2015, without authorization, consent or authority, Samuel filed these Dissolution Forms with the California Secretary of State, as a result of which the Corporation has been deemed by the Secretary of State to have been dissolved.

Plaintiff alleges that he was engaged in selling the Corporation when he was made aware of the fraudulent dissolution, and was unable to complete the sale, and that due to the dissolved status, the Corporation did not have authority to employ anyone to care for its patients and perform standard functions, and that plaintiff was unable to bill for services provided, causing lost revenue and business. Plaintiff alleges that upon dissolution of the Corporation, the corporate name was taken by another party, requiring plaintiff to expend time and money to regain control of the corporate name, which was necessary to continue operating as a hospice.

Defendant filed a demurrer in response to the original complaint, which was heard on October 20, 2017. The demurrer was overruled to several causes of action and sustained with leave to amend as to the first, third and fifth causes of action.

Defendant now challenges the sufficiency of those three causes of action as stated in the First Amended Complaint.

ANALYSIS:

Procedural

The meet and confer declaration submitted with the moving papers indicate that counsel for plaintiff failed to respond to a meet and confer telephone message, and a detailed email correspondence.

CCP § 430.41 requires that before filing a demurrer, the demurring party must meet and confer, and that the party filing the pleading must respond:

“(a) Before filing a demurrer pursuant to this chapter, the demurring party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer. If an amended complaint, cross-complaint, or answer is filed, the responding party shall meet and confer again with the party who filed the amended pleading before filing a demurrer to the amended pleading.

(1) As part of the meet and confer process, the demurring party shall identify all of the specific causes of action that it believes are subject to demurrer and identify with legal support the basis of the deficiencies. The party who filed the complaint, cross-complaint, or answer shall provide legal support for its position that the pleading is legally sufficient or, in the alternative, how the complaint, cross-complaint, or answer could be amended to cure any legal insufficiency.
…

(4) Any determination by the court that the meet and confer process was insufficient shall not be grounds to overrule or sustain a demurrer.”

Plaintiff’s counsel here did not provide legal support for plaintiff’s position, or otherwise respond to the meet and confer efforts. The demurrer may be continued or the hearing postponed until plaintiff has properly met and conferred.

Substantive

First Cause of Action—Unfair Competition

The demurrer to this cause of action was previously sustained

“on the ground that in connection with this statutory cause of action pleadings must state with reasonable particularity the facts supporting the elements of the alleged violation. Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 619. It is not clear which preceding wrongful act supports this cause of action, and, to the extent plaintiff is making some claim that defendant directly eliminated a competitor, this should be clearly alleged in the pleading. Demurrer on all other grounds is OVERRULED.”

The demurrer again argues that the pleading still does not state with particularity the facts supporting the statutory elements of a violation.

To state a cause of action for Unfair Business Practices, a plaintiff must allege the following elements:

1) Defendant has engaged in more than one unlawful, unfair, or fraudulent transaction, including unfair, deceptive, untrue or misleading advertising

2) Plaintiff’s right to restitution, if any. Damages are not recoverable.

3) Plaintiff’s right to injunctive relief, if any.

Bus. & Prof. Code § 17200 et seq.; Dean Witter Reynolds, Inc. v. Superior Court (1989) 211 Cal.App.3d 758.

To state a claim, there must be allegations showing unlawful, unfair or fraudulent business acts or practices. Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 676-677. Pleadings must state with reasonable particularity the facts supporting the statutory elements of the violation, including the particular section of the statutory scheme violated and the particular facts showing that the statute was violated. Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 619.

The pleading now specifies that conduct which is alleged to have constituted an unfair or fraudulent practice, alleging that defendant owns and operates a hospice, and that “By dissolving Plaintiff’s corporation, Defendant has taken out a potential competitor in the field.” [Para. 26]. There are allegations that this conduct was wrongful, and the general allegations allege that the dissolution forms were executed and submitted by defendant in which he “falsely claimed under penalty of perjury that the Corporation had elected to wind up and dissolve.” [Para. 15]. It is not clear why there is no opposition filed here. The court therefore considers the lack of opposition as a concession that plaintiff is abandoning this cause of action, and sustains the demurrer without further leave to amend.

Third Cause of Action—Intentional Interference with Economic Relationship

The demurrer to this cause of action was previously sustained:

“on the ground the pleading fails to clearly allege an intent to induce a breach. Demurrer on all other grounds is OVERRULED.”

To plead a claim for intentional interference with an existing economic relationship, the required elements are:

a) contract between plaintiff and a third party

b) defendant had knowledge of the contract

c) defendant wrongfully intended to induce a breach without justification

d) contract breached

e) causing injury to plaintiff (proximate cause)

f) damage

Freed v. Manchester Service (1958) 165 Cal.App.2d 186, 189.

Defendant argues that plaintiff has again failed to allege that defendant intended to induce some breach.

The cause of action now alleges that the actions of defendant which caused the dissolution “were committed intentionally,” and that “based on Defendants’ knowledge of the workings of a Hospice, he knew that the dissolution would cause Plaintiff to be in breach of all the contracts Plaintiff had with terminally ill patients and their health insurance.” [Para. 40]. This now appears sufficient to allege facts from which an intent to induce a breach can be reasonably inferred, and the demurrer is overruled.

Fifth Cause of Action—Negligence

The demurrer to this cause of action was previously sustained:

“on the ground the conduct alleged does not appear to be negligent, but deliberate. To the extent plaintiff intends to allege that a duty was owed by defendant by virtue of his position as plaintiff’s landlord, the pleading should allege these facts, and a breach of the standard of care which is not intentional misconduct. Demurrer on all other grounds is OVERRULED.

To state a claim for negligence, plaintiff must allege the following elements: Defendant owed a legal duty of care to plaintiff; defendant breached the duty (negligent act or omission); plaintiff was injured as a result (proximate or legal cause); and damages. Palmer v. Crafts (1936) 16 Cal.App.2d 370, 375.

Defendant argues that the cause of action fails to allege any legal duty, but only alleges a conclusion of law, and that the FAC also fails to state a breach of a standard of care that is not intentional misconduct.

The pleading alleges that persons have a duty to use ordinary care, and that defendant was plaintiff’s landlord with “knowledge of Plaintiff’s ownership of the Corporation.” [Para. 50]. The problem remains that the conduct alleged to have been reckless or negligent, the execution and filing of false dissolution forms, particularly if done with alleged knowledge of plaintiff’s ownership, remains intentional misconduct, not negligence. [Paras. 50, 51]. The demurrer accordingly is sustained without leave to amend.