Case Name: Singh v. Okkoronkwo, et al.
Case No.: 1-14-CV-267123

On January 20, 2015, the Court issued its tentative ruling on the demurrer to the first amended cross-complaint, stating:

On November 7, 2014, Cross-Complainants filed the operative first amended cross-complaint (“FACC”) against Cross-Defendant, alleging causes of action for: (1) fraud; (2) breach of contract; (3) “unfair business practices/unjust enrichment;” (4) negligence; (5) “violation of implied covena[n]t of quiet enjoyment/harassment;” (6) “violation of implied covenant of fair dealing;” (7) intentional infliction of emotional distress; and (8) aiding and abetting.

Cross-Defendant demurs to each cause of action of the FACC on the ground that they fail to allege facts sufficient to constitute a cause of action (see Code Civ. Proc., § 430.10, subd. (e)) and moves to strike the FACC on the ground that it was not filed in conformity with the laws of this state. (See Code Civ. Proc., § 437, subd. (a).)

I. Demurrer

“In reviewing the sufficiency of a complaint against a general demurer, we are guided by long settled rules. ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. We also consider matters which may be judicially noticed.’” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “A demurrer tests only the legal sufficiency of the pleading. It admits the truth of all material factual allegations in the complaint; the question of plaintiff’s ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court.” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213–214.)

As a preliminary matter, Cross-Complainants’ papers—including the FACC—do not comply with California Rules of Court, rules 2.108, 2.111, and 3.1110(b) and (f). Cross-Complainants are reminded that all papers, including pleadings and law and motion papers, must comply with the California Rules of Court.

The demurrer to the first cause of action for fraud is SUSTAINED with 10 days’ leave to amend. Cross-Complainants fail to allege their claim for fraud with the requisite specificity because the nature of the alleged intentional misrepresentations, as well as when, where, and how the misrepresentations were made are unclear. (See West v. JPMorgan Chase Bank, N.A., (2013) 214 Cal.App.4th 780, 793 [“[f]raud must be pleaded with specificity rather than with general and conclusory allegations,” which “means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made.”].) Instead, Cross-Complainants merely assert vague and conclusory allegations that Cross-Defendant: made representations to them about “the business” (FACC, ¶ 2); “fraudulently shifted all his liabilities to [Cross-Complainants], without orderly transfer of the business or orderly transfer of the electronic cash payments …, or third party interests in the store” (FACC, ¶ 5); “committed fraud by transferring all the expired or soon to be expired commodities from his main store into the store he purportedly sold to [Cross-Complainants]” (FACC, ¶ 19); found someone else who wanted to buy that store and brought the other buyer to the landlord and the escrow officer, but the escrow officer refused to “replace [Cross-Complainants]” (FACC, ¶¶ 11, 22); and “engaged in fraud by intentionally misleading [Cross-Complainants] that he will help [them] in starting the business while [he] was clandestinely working behind the scene to under mine [sic] the start up business ….” (FACC, ¶ 34.) These allegations are not sufficient to state a claim for fraud.

Additionally, while it appears that Cross-Complainants also attempt to allege fraud based on nondisclosure and/or concealment of a material fact, in which case the specificity requirement is usually relaxed (see Alfaro v. Community Housing Improvement System and Planning Assn. (2009) 171 Cal.App.4th 1356), Cross-Complainants fail to specify the particular material fact that Cross-Defendant allegedly failed to disclose. (See FACC, ¶ 3 [“[v]aluable information that was needed for informed business decision about the purchase of the … stores was fraudulently not disclosed to [Cross-Complainants]”].)

The demurrer to the second cause of action for breach of contract is SUSTAINED, with 10 days’ leave to amend. Cross-Complainants do not adequately plead the existence of a contract. If the contract is written, “the terms must be set out verbatim in the body of the complaint or a copy of the written instrument must be attached and incorporated by reference.” (Otworth v. Southern Pacific Transportation Co. (1985) 166 Cal.App.3d 452, 459.) Alternatively, “[i]n an action based on a written contract, a plaintiff may plead the legal effect of the contract rather than its precise language.” (Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 199.) In order to plead a contract by its legal effect, the plaintiff must allege the substance of its relevant terms. (See Heritage Pacific Financial, LLC v. Monrov (2013) 215 Cal.App.4th 972, 993; see also McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489.) Cross-Complainants allege that they entered into a written contract with Cross-Defendant on or about March 2012. (See FACC, ¶ 1.) Based on the totality of the allegations of the FACC, it appears that the alleged contract pertained to the sale of a business. However, the alleged written contract is not attached to the FACC, the terms are not set out verbatim of the body of the FACC, and Cross-Complainants do not sufficiently allege the substance of the relevant terms of the contract to plead the contract by its legal effect.

Moreover, Cross-Complainants do not allege that they fully performed their obligations under the written contract or that they were excused from performance. (See Bushell v. JPMorgan Chase Bank, N.A. (2013) 220 Cal.App.4th 915, 921 [stating that the elements of breach of contract are (1) the existence of a contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) resulting damage to plaintiff.].)

The demurrer to the third cause of action for “unfair business practices/unjust enrichment” is SUSTAINED, with 10 days’ leave to amend. Since the third cause of action is based upon the same allegations of wrongdoing as the first and second causes of action and the demurrer as to those claims is sustained, Cross-Complainants’ cause of action for unfair business practices also fails. (See Krantz v. BT Visual Images, LLC (2001) 89 Cal.App.4th 164, 178 [the viability of a UCL claim stands or falls with the antecedent substantive causes of action]; see also Wolski v. Fremont Investment & Loan (2005) 127 Cal.App.4th 347, 357 [unfair business practices claim fails where it is based on a violation of law that also fails].)

Moreover, unjust enrichment is a general principle that underlies various legal doctrines and remedies, and is most often described as the result of party’s failure to make restitution. (See McBride v. Boughton (2004) 123 Cal.App.4th 379, 387.) While it is not a cause of action per se, the Court ignores “[e]rroneous or confusing labels … if the complaint pleads facts which would entitle the plaintiff to the relief. [Citations.]” (Id.) Upon review of the FACC, it appears the third cause of action may be an attempt to plead a cause of action giving rise to a right to restitution. However, Cross-Complainants have not stated such a cause of action because they have not asserted a claim alleging that Cross-Defendant engaged in wrongful conduct and thereby received a benefit. (See McBride v. Boughton, 123 Cal.App.4th at 388 [stating that “there are several potential bases for a cause of action seeking restitution …. [R]estitution may be awarded where the defendant obtained a benefit from the plaintiff by fraud, duress, conversion, or similar conduct”].)

The demurrer to the fourth cause of action for negligence is SUSTAINED, with 10 days’ leave to amend. Cross-Complainants do not allege sufficient facts establishing that Cross-Defendant had a duty to “transfer the state lottery services” or the liquor license to them. (FACC, ¶¶ 55-577.) (See Ladd v. County of San Mateo (1996) 12 Cal.4th 913, 917 [stating that the elements of negligence include “a legal duty to use due care”].) Moreover, Cross-Complainants do not allege that they were damaged as a result of Cross-Defendant’s alleged failure to transfer the state lottery services and liquor license to them. (See Ladd v. County of San Mateo (1996) 12 Cal.4th 913, 917 [stating that damages are an element of negligence].)

The demurrer to the fifth cause of action for “violation of implied covena[n]t of quiet enjoyment/harassment” is SUSTAINED, with 10 days’ leave to amend. The implied covenant of quiet enjoyment is the doctrine that a landlord impliedly promises to allow the tenant possession and “quiet enjoyment” of the premises during the term of the rental agreement and not to, through act or omission, disturb the tenant’s possession and beneficial enjoyment of the premises for the purposes contemplated by the rental agreement. (Andrews v. Mobile Aire Estates (2005) 125 Cal.App.4th 578, 588.) Minor inconveniences and annoyances are not actionable breaches; the landlord’s act or omission must be substantial- i.e., so serious as to render the premises unfit for the purposes contemplated by the lease or which substantially affect the tenant’s enjoyment of a material part of the premises. (See Civ. Code, § 1927; see also Kulawitz v. Pacific Woodencare & Paper Co. (1944) 25 Cal.2d 664, 668.) Cross-Complainants fail to allege facts showing that Cross-Defendant was bound by and/or breached the implied covenant of quiet enjoyment because there is no allegation that Cross-Defendant was Cross-Complainants’ landlord or that Cross-Defendant was a party to a lease agreement containing such a covenant.

Moreover, under California law, harassment (and related hostile work environment) is a “creature of statute,” specifically the Fair Employment and Housing Act (“FEHA”), and thus there is no common law cause of action. (See Medix Ambulance Serv., Inc. v. Superior Court (2002) 97 Cal.App.4th 109, 119 [stating that there is no common law cause of action for harassment and that FEHA is the only source for a harassment cause of action].) Cross-Complainants do not assert a statutory cause of action under FEHA let alone plead the claim with the requisite particularity. (See Covenant Care, Inc. v. Super. Ct. (Inclan) (2004) 32 Cal.4th 771, 790 [“the general rule [is] that statutory causes of action must be pleaded with particularity”].)

The sixth cause of action for “violation of implied covenant of fair dealing” is SUSTAINED, with 10 days’ leave to amend. As articulated above, Cross-Complainants have not sufficiently alleged facts pleading the existence of a contract. Since a claim for breach of the implied covenant of good faith and fair dealing is predicated upon the existence of a valid contract, this claim fails as well. (See Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 683 [“Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.”]; see also Smith v. City and County of San Francisco (1990) 225 Cal.App.3d 38, 49 [“The prerequisite for any action for breach of the implied covenant of good faith and fair dealing is the existence of a contractual relationship between the parties, since the covenant is an implied term in the contract.”]; see also Fireman’s Fund Ins. Co. v. Maryland Casualty Co. (1994) 21 Cal.App.4th 1586, 1599 [“Without a contractual underpinning, there is no independent claim for breach of the implied covenant.”].)

The seventh cause of action for intentional infliction of emotional distress is SUSTAINED, with 10 days’ leave to amend. “The elements of the tort of intentional infliction of emotional distress are: (1) extreme and outrageous conduct by the defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress; (2) the plaintiff suffering severe or extreme emotional distress; and (3) actual and proximate causation of the emotional distress by the defendant’s outrageous conduct …. Conduct to be outrageous must be so extreme as to exceed all bounds of that usually tolerated in a civilized community.” (Potter v. Firestone Tire & Rubber Co. (1993) 6 Cal.4th 965, 1001 [internal quotations omitted].) Cross-Complainants allege that they suffered severe emotional distress due to the removal of the state lottery equipment from their store. (See FACC, ¶¶ 68-69.) These allegations do not rise to the level of extreme and outrageous conduct as required to state a claim for emotional distress. (See Newby v. Alto Riviera Apartments (1976) 60 Cal.App.3d 288, 297 [“The modern rule [defining outrageous conduct] is that there is liability for conduct exceeding all bounds usually tolerated by a decent society, of a nature which is especially calculated to cause, and does cause, mental distress. [Citations.] . . . Behavior may be considered outrageous if a defendant (1) abuses a relation or position which gives him power to damage the plaintiff’s interest; (2) knows the plaintiff is susceptible to injuries through mental distress; or (3) acts intentionally or unreasonably with the recognition that the acts are likely to result in illness through mental distress. [Citations.]”]; see also Hughes v. Pair (2009) 46 Cal.4th 1035, 1051 (noting that [“[w]ith respect to the requirement that a plaintiff show severe emotional distress, [the California Supreme C]ourt has set a high bar” and stating that “[l]iability for intentional infliction of emotional distress does not extend to mere insults, indignities, threats, annoyances, petty oppressions, or other trivialities”].)

The eighth cause of action for aiding and abetting is SUSTAINED, with 10 days’ leave to amend. “California has adopted the common law rule for subjecting a defendant to liability for aiding and abetting a tort. Liability may … be imposed on one who aids and abets the commission of an intentional tort [committed by another] if the person (a) knows the other’s conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other to so act or (b) gives substantial assistance to the other in accomplishing a tortious result and the person’s own conduct, separately considered, constitutes a breach of duty to the third person. [Citations.]” (Casey v. U.S. Bank Nat. Assn (2005) 127 Cal.App.4th 1138, 1144 [internal quotations omitted].) Cross-Complainants allege that “[Cross-Defendant] aided and abetted, encouraged, and rendered substantial assistance to the Land Lord [sic] in breaching their obligations to the [Cross-Complainants] as alleged herein.” (FACC, p. 11, ¶¶ 4-5.) In light of the Court’s rulings that Cross-Complainants have not sufficiently alleged causes of action for fraud and intentional infliction of emotional distress, and the fact that Cross-Complainants have not alleged the underlying and primary intentional tort purportedly committed by the landlord, Cross-Complainants are unable to state a claim for aiding and abetting.

(January 20, 2015 order re: demurrer to second amended cross-complaint, pp.1-4.)

On April 24, 2015, cross-complainants and defendants Christopher and Queendlyn Okoronkwo (collectively, “cross-complainants”) filed a third amended cross-complaint (“TAXC”), entitled “Ameded [sic] cross complaint to cross complaint’s second amended complaint.” The TAXC appears to assert causes of action for: fraud; breach of contract; unfair business practices; negligence; “harassment/electronic surveillance”; violation of the implied covenant of fair dealing; and, negligent infliction of emotional distress. Cross-defendant and plaintiff Khushvinder Pal Singh (“cross-defendant”) demurs to each cause of action of the TAXC on the grounds that they are both uncertain and fail to state facts sufficient to constitute a cause of action. In opposition, cross-complainants filed a 50-page opposition to the demurrer in violation of Rule of Court 3.1113, subdivision (d). (See Rule of Court 3.1113, subd. (d) (stating that “[e]xcept in a summary judgment or summary adjudication motion, no opening or responding memorandum may exceed 15 pages”).) Both parties fail to include a table of contents and a table of authorities in violation of Rule of Court 3.1113, subdivision (f). (See Rule of Court 3.1113, subd. (f) (stating that “[a] memorandum that exceeds 10 pages must include a table of contents and a table of authorities”).) Cross-complainants also violate Rule of Court 3.1113, subdivision (f) by failing to include an opening summary of argument. (Id. (stating that “[a] memorandum that exceeds 15 pages must also include an opening summary of argument”).) Both parties are warned that the Court may refuse to consider pleadings that are filed in violation of the rules.

As to the TAXC itself, cross-defendant is correct that much of the first 5 pages appears to be formatted as an opposition to a demurrer. The SAC’s first sentence is that “Cross complaint oppose the Demurrer and Motion to Strike the Second amended cross-complaint Against cross defense….” Page 4 is entitled “Applicable standards” with subheadings “The standard for ruling on a Demurrer is Liberal construction” and “Cross Defendant Bear a Heavy Burden On A General Demurrer.” Nevertheless, the inclusion of irrelevant allegations is more properly the subject of a motion to strike, not a demurrer.

As to the first cause of action for fraud, the first cause of action still fails to state facts sufficient to constitute a cause of action. (See West v. JPMorgan Chase Bank, N.A., (2013) 214 Cal.App.4th 780, 793 [“[f]raud must be pleaded with specificity rather than with general and conclusory allegations,” which “means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made.”].) It appears that the first cause of action may be premised on a false stated value of the inventory of the store; however, there are no allegations as to when, where, by what means and to whom the allegedly false value was presented. The demurrer to the first cause of action is SUSTAINED with 10 days leave to amend.

The second cause of action is uncertain. There are multiple contracts alleged. The terms of each agreement are not presented such that it can be determined as to which contract is referenced. (See Otworth v. Southern Pacific Transportation Co. (1985) 166 Cal.App.3d 452, 459; see also Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 199.) The sixth cause of action is dependent on the second cause of action. The demurrer to the second and sixth causes of action is SUSTAINED with 10 days leave to amend so that cross-complainants can plainly identify and allege the terms of the contract that they contend was breached.

The third cause of action is dependent on the first cause of action. Likewise, the demurrer to the third cause of action is SUSTAINED with 10 days leave to amend.

The fourth cause of action for negligence and the seventh cause of action for negligent infliction of emotional distress which is apparently a variation of the tort of negligence, appear to be based on a contractual duty rather than a duty of care. (See TAXC, ¶¶ 47 (alleging that “[a] special relationship exists between cross defense and cross complains by reasons of our contract”), 55 (alleging that “he failed in his duty of orderly transfer with the state lottery that would have benefitted this contract”), 56 (alleging that “he failed in derogations of his promise in the bill of sale that he will help us and train us in the business”), 59 (alleging that “[b]ecause of his interest in the store, he had a duty of care and diligence because we were required to pay him certain amount of money every month, he had a duty and owes us the duty of care for orderly transfer of the lottery and the alcohol license to us because of interest too”), 61 (alleging that “[h]ere, we have alleged that cross defense breached the contract with cross complain with specificities”; also alleging that “[w]e further alleged that cross defense was negligent by breaching its duty to use reasonable care in performing the obligations under the contract when a reasonable prudent business person who has interest in the store through the monthly installment paying of $2,100 every month as good will would have done otherwise to protect his or her interest”), 74 (alleging that “[t]he tort of negligent infliction of emotional distress is a variation of the tort of negligence”), 75 (alleging that “[a] breach of emotional damages does not give rise to tort liability unless there is a special relationship between cross defense and cross complain… [t]his requirement has been established through contract”).) The seventh cause of action also includes allegations of fraud. (See TAXC, ¶ 77 (alleging “Cross Defense cooked the books on how much the store produces every day and every month”), 78 (alleging a “non-disclosure of the asked and needed information needed to make informed business decisions”), 79 (alleging “fraudulent behavior” and “fraud and concealment engineered by cross defense”).)

Allegations of intentional conduct and breach of contract do not support a negligence cause of action. (See Stop Loss Ins. Brokers, Inc. v. Brown & Toland Medical Group (2006) 143 Cal.App.4th 1036, 1041 (stating that “[a] person may not ordinarily recover in tort for the breach of duties that merely restate contractual obligations… [i]nstead, ‘courts will generally enforce the breach of a contractual promise through contract law, except when the actions that constitute the breach violate a social policy that merits the imposition of tort remedies”); see also BFGC Architects Planners, Inc. v. Forcum/Mackey Construction, Inc. (2004) 119 Cal.App.4th 848, 853 (stating same).) Accordingly, the demurrer to the fourth and seventh causes of action is SUSTAINED without leave to amend.

The demurrer to the fifth cause of action is OVERRULED.

Cross-complainants are advised that if they are unable to state valid claims, that demurrer may be sustained to the amended causes of action without leave to amend.

The Court will prepare the order.