Case Name: Syed Nazim Ali v. Ventrum, LLC

Case No.: 18CV339366

I. Background

Syed Nazim Ali (“Plaintiff”), who is self-represented, alleges he turned down lucrative job opportunities and accepted an information-technology position through a staffing and recruitment agency, namely defendant Ventrum, LLC (“Ventrum”), based on the agency’s promise that his position would last for at least six months with the possibility of renewal. Plaintiff alleges the agency’s promise was false, as the project lasted for only three months. And so, he commenced this action against Ventrum and asserts causes of action against it for: (1) intentional misrepresentation; (2) intentional interference with prospective economic advantage; (3) negligent misrepresentation; and (4) promissory estoppel.

Currently before the Court is Ventrum’s demurrer to the complaint. Plaintiff opposes the demurrer and filed a request for judicial notice in support. Ventrum also filed a request for judicial notice in connection with its reply.

II. Requests for Judicial Notice

Plaintiff filed a document entitled “request for judicial notice,” which actually consists of evidence—a declaration and supporting exhibits—he wants the Court to consider for the purpose of the demurrer. A demurrer tests the legal sufficiency of the pleading, not the plaintiff’s ability to prove his or her claim. (Nguyen v. Western Digital Corp. (2014) 229 Cal.App.4th 1522, 1536–37.) A court may not consider evidence. (See Code Civ. Proc., § 430.30, subd. (a).) And, while a court may consider matters subject to judicial notice for the purpose of a demurrer (Code Civ. Proc., § 430.30, subd. (a)), Plaintiff does not establish the statements in and documents attached to his request are proper subjects of judicial notice. “Judicial notice may not be taken of any matter unless authorized or required by law.” (Evid. Code, § 450.) The Legislature specifically enumerated the matters of law and fact that are proper subjects of judicial notice in Evidence Code sections 451 and 452. It is not apparent that any of the matters encompassed by his request fall within either section 451 or section 452 of the Evidence Code. Accordingly, Plaintiff’s request for judicial notice is DENIED. His evidence is improper and will not be considered.

Ventrum’s request for judicial notice of Plaintiff’s discovery responses is also improper. It does not identify any particular subdivision of Evidence Code section 451 or 452 to support its request. Perhaps this is because there is no statutory authorization for judicial notice of discovery responses. Additionally, although the Evidence Code controls, Del E. Webb Corporation v. Structural Materials Company (1981) 123 Cal.App.3d 593 actually undercuts Ventrum’s request. In that case, the court did not purport to authorize judicial notice and consideration of discovery responses in connection with a demurrer. (Del E. Webb Corp., supra, 123 Cal.App.3d at pp. 604–05.) Rather, the court explained that documents filed by the plaintiff, i.e. court records, could be considered for the purpose of evaluating whether the plaintiff included sham allegations in the pleading. (Ibid.) The court explicitly stated “[t]he hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of affidavits, declarations, depositions, and other such material which was filed on behalf of the adverse party and which purports to contradict the allegations and contentions of the plaintiff.” (Id. at p. 605.) In other words, the court explicitly condemned the approach Ventrum takes here. Consequently, Plaintiff’s discovery responses are not subject to judicial notice. Ventrum’s request for judicial notice is, therefore, DENIED.

III. Demurrer

“The grounds for a demurrer are those listed in Code of Civil Procedure section 430.10,” which “differ from the reasons for sustaining a demurrer on a particular ground.” (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 111.) A party must set forth each statutory ground for a demurrer “in a separate paragraph and must state whether it applies to the entire complaint…or to specified causes of action….” (Cal. Rules of Court, rule 3.1320(a).) Ventrum sets forth the grounds for its demurrer, as well as the supporting reasons, with verbosity and odd syntax such that the scope of its demurrer is unclear.

Instead of stating, for example, the demurrer is to the first cause of action on the ground of failure to state facts sufficient to constitute a cause of action, Ventrum states “[t]he [c]omplaint fails to state facts sufficient to constitute a cause of action…, for the [first cause of action]…, as the [c]omplaint does not allege detrimental reliance….” (Dem. at p. 1:10–24.) This syntax—which is used elsewhere in its demurrer—as well as other statements (Dem. at p. 1:18) suggest Ventrum is demurring to the complaint as a whole. This is significant because a demurrer to a complaint as a whole is not sustainable if any cause of action therein is properly stated. (Warren v. Atchison, Topeka & Santa Fe Ry. Co. (1971) 19 Cal.App.3d 24, 36.) On the other hand, Ventrum does refer to individual causes of action in its demurrer. Despite its odd choice of prepositions, such as “for” and “under,” it seems as though it perhaps intended to demur, not just to the complaint as a whole, but to individual causes of action.

Under the circumstances, the Court treats the demurrer as a demurrer to the first, second, third, and fourth causes of action on the grounds of uncertainty and failure to state facts sufficient to constitute a cause of action.

A. Uncertainty

A demurrer on the ground of uncertainty tests whether the pleading is uncertain, ambiguous or unintelligible. (Code Civ. Proc., § 430.10, subd. (f).) “[D]emurrers for uncertainty are disfavored and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Lickiss v. Financial Industry Reg. Authority (2012) 208 Cal.App.4th 1125, 1135.) This is because “ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.)

Ventrum first argues Plaintiff fails to allege specific facts sufficient to state a fraud claim. This argument is misguided because a demurrer on the ground of uncertainty “is not intended to reach the failure to incorporate sufficient facts in the pleading, but is directed at the uncertainty existing in the allegations actually made.” (Butler v. Sequeira (1950) 100 Cal.App.2d 143, 145–46.) Although the Court will consider this argument in connection with the other statutory ground for Ventrum’s demurrer, this argument does not justify sustaining the demurrer on the ground of uncertainty.

Next, Ventrum argues Plaintiff’s use of terms such as “they” and “them” obfuscates the conduct upon which his claims are based. This argument is not well-taken. In the prefatory portion of the pleading, Plaintiff specifically identifies the individuals he spoke with, namely CEO Joyti Joshi and recruiter Mohan Chand, and the entities they are affiliated with. (Compl., ¶¶ 20–28.) Also, failure to clearly label claims or parties does not typically render a pleading so ambiguous a party cannot reasonably respond. (See, e.g., Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.)

Ventrum’s challenge to a number of seemingly superfluous allegations is improper. A motion to strike, not a demurrer, is the proper procedural vehicle for attacking individual allegations in a pleading. (See generally PH II, Inc. v. Super. Ct. (1995) 33 Cal.App.4th 1680, 1682 [“A demurrer does not lie to a portion of a cause of action.”]; Ferraro v. Camarlinghi (2008) 161 Cal.App.4th 509, 528 [distinguishing functions of demurrers and motions to strike].) Additionally, Ventrum does not demonstrate the individual allegations make the pleading so incomprehensible it cannot reasonably respond. For example, its contention that typographical errors render certain paragraphs incomprehensible is specious; the substance of these paragraphs is apparent notwithstanding these errors.

Finally, Ventrum’s assertion that there are inconsistent factual allegations is overstated and pertains, not to the existence of an ambiguity, but to whether the facts alleged state a claim. (See generally Manti v. Gunari (1970) 5 Cal.App.3d 442, 449.) And so, although its contentions are addressed in connection with the demurrer on the ground of failure to state sufficient facts, the Court is not persuaded the purported inconsistencies demonstrate the pleading is ambiguous, uncertain, or unintelligible.

For these reasons, Ventrum’s demurrer on the ground of uncertainty is OVERRULED.

B. Failure to State Sufficient Facts

1. First, Third, and Fourth Causes of Action

Ventrum addresses Plaintiff’s fraud and promissory estoppel claims collectively. It argues he fails to allege actual and reasonable reliance on its misrepresentations.

Promissory estoppel is “a doctrine which employs equitable principles to satisfy the requirement that consideration must be given in exchange for the promise sought to be enforced.” (Moncada v. West Coast Quartz Corp. (2013) 221 Cal.App.4th 768, 779–80 [internal quotation marks and citations omitted].) It “binds a promisor if the promisor should reasonably have expected a substantial change of position in reliance on the promise, and if injustice can be avoided only by the enforcement of the promise.” (Avidity Partners, LLC v. State of California (2013) 221 Cal.App.4th 1180, 1209.) “In other words, where the promisee’s reliance was bargained for, the law of consideration applies; and it is only where the reliance was unbargained for that there is room for application of the doctrine of promissory estoppel.” (Ibid.) “The elements of a promissory estoppel claim are (1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) [the] reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance.” (Orcilla v. Big Sur, Inc. (2016) 244 Cal.App.4th 982, 1007 [internal quotation marks and citations omitted].)

Reliance is an essential element of any species of fraud claim as well. (West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 792 [comparing elements of intentional and negligent misrepresentation].) The reliance must be both actual and reasonable. (OCM Principal Opportunity Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 863–64.)

Ventrum argues Plaintiff did not rely on its statements as an individual because he transacted business through his company Cybersecurity Associates, Inc. Ventrum does not provide any legal authority or meaningful analysis of agency law to support this assertion. Additionally, its characterization of the pleading is not fair and accurate. Email correspondence attached to the pleading reflect Plaintiff, using the pen name Alex Ali, was individually interviewing for and working with Ventrum to obtain a job. Additionally, although Plaintiff identifies himself as the President of Cybersecurity Associates, Inc. in the contract attached to the complaint, that contract does not clearly reflect Ventrum transacted with his company rather than him as an individual. Significantly, the contract identifies “Alex Ali” as the contractor and consultant and states he “needs to fill in his timesheets and get the same approved….” (Compl., Ex. 17.) In summary, the pleading and exhibits thereto do not clearly establish the transaction was between Ventrum and Plaintiff’s business. More significantly, Ventrum provides no legal basis for disregarding Plaintiff’s participation in the business transaction. Its argument is not well-taken.

Ventrum also takes issue with the specificity of Plaintiff’s allegations for the purposes of his first and third causes of action for intentional and negligent misrepresentation. It is true that a plaintiff must plead the elements of a fraud claim with specificity. (Lazar v. Super. Ct. (1996) 12 Cal.4th 631, 644–45.) But Ventrum’s argument is not persuasive because it mischaracterizes Plaintiff’s allegations. Contrary to what Ventrum asserts, Plaintiff does allege specific facts about who, when, and through what means the alleged misrepresentations were made. (Compl., ¶¶ 21–35.) Moreover, Plaintiff’s allegations about the expected duration of his employment are consistent. He repeatedly alleges he believed he would work for at least six months with a possibility of renewal. And so, the demurrer to the first and third causes of action is not sustainable based on a lack of specificity.

Based on the foregoing, the demurrer to the first, third, and fourth causes of action is OVERRULED.

2. Second Cause of Action

The essential elements of a claim for intentional interference with prospective economic advantage are: “(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134,1153 [internal quotation marks and citations omitted].)

The California Supreme Court has emphasized that courts should bring “‘a greater solicitude to those relationships that have ripened into agreements, while recognizing that relationships short of that subsist in a zone where the rewards and risks of competition are dominant.’” (Korea Supply Co., supra, 29 Cal.4th at p. 1157, quoting Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 392.) Accordingly, there must be “an existing economic relationship.” (Roy Allan Slurry Seal, Inc. v. American Asphalt South, Inc. (2017) 2 Cal.5th 505, 517–18, original italics.) This is because “the tort ‘protects the expectation that the relationship eventually will yield the desired benefit, not necessarily the more speculative expectation that a potentially beneficial relationship will eventually arise.’ [Citation.]” (Id. at pp. 516–17.) “[A] cause of action for tortious interference [will be] found lacking when either the economic relationship with a third party is too attenuated or the probability of economic benefit too speculative.” (Id. at p. 515; see also Westside Center Associates v. Safeway Stores 23, Inc. (1996) 42 Cal.App.4th 507, 526 [plaintiff cannot rely on potential relationship with entire market of purchasers].) A plaintiff cannot base a claim on “a hope for an economic relationship and a desire for future benefit.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 331.)

Here, as Ventrum articulates, Plaintiff’s allegations are inadequate. Plaintiff alleges that at the time he was negotiating with Ventrum and accepted its employment offer, he had an interview scheduled with another company. (Compl., ¶ 29 & Ex. 14.) This specific allegation reflects Plaintiff hoped to establish a relationship with the company, but did not yet have an existing relationship with the company at the time. And, this specific allegation, as well as the emails attached to the complaint, control over his subsequent contradictory allegation that he received an offer from the other company. (See Gentry v. eBay, Inc. (2002) 99 Cal.App.4th 816, 827.) Plaintiff’s anticipation of an offer of employment following an interview he had yet to complete is too attenuated and speculative to support a claim for intentional interference with prospective economic advantage. The same is true of Plaintiff’s vague allegations about other unspecified opportunities. Plaintiff does not respond to Ventrum’s argument or address these particular allegations. Accordingly, the second cause of action is subject to demurrer.

When a court sustains a demurrer, it may deny leave to amend if there is no reasonable possibility the plaintiff can amend the complaint to state a viable claim. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) A “[p]laintiff must show in what manner he [or she] can amend his [or her] complaint and how that amendment will change the legal effect of the pleading.” (Ibid.) Plaintiff did not respond to Ventrum’s argument and does not explain how he could cure this defect if given an opportunity to amend the complaint. Moreover, he has made affirmative allegations and attached exhibits to the pleading that reflect he cannot honestly and consistently allege new facts to show interference with an existing economic relationship as compared to an anticipated relationship with a prospective employer. Consequently, the demurrer to the second cause of action is SUSTAINED WITHOUT LEAVE TO AMEND.