Case Number: BC674892 Hearing Date: March 07, 2018 Dept: 46

Case Number: BC674892
RAZMIG BODOZIAN VS ARTHUR DEMURCHYAN ET AL

Filing Date: 09/07/2017
Case Type: Contractual Fraud

03/07/2018
Conference-Case Management
Motion for Judgment on the Pleadings
Case Management Conference

TENTATIVE RULING

Defendants’ Request for Judicial Notice is GRANTED to the extent of the existence of the document.

Arthur Demuchyan, Ruben Demurchyan, and Total Floor Covering, Inc.’s Motion for Judgment on the Pleadings as to the Complaint is GRANTED pursuant to CCP §438 with 10 days leave to amend.

Motion to Strike portions of the Complaint are off calendar as moot in light of the ruling on the motion which will require the filing of an amended superseding pleading. See discussion.

Matter is not ready for trial setting as the First Amended Cross-Complaint is still not at issue. Therefore the Case Management Conference is continued to 4/20/2018 at 8:30 a.m. to permit Cross-Complainants to complete service as referenced in the declaration of David Davidson. Total Floor Covering to give notice of the continued CMC date.

DISCUSSION

CCP § 438 provides, in relevant part, the following:

(b)(1) A party may move for judgment on the pleadings.
(2) The court may upon its own motion grant a motion for judgment on the pleadings.
(c)(1) The motion provided for in this section may only be made on one of the following grounds:

. . .

(B) If the moving party is a defendant, that either of the following conditions exist:

(i) The court has no jurisdiction of the subject of the cause of action alleged in the complaint.

(ii) The complaint does not state facts sufficient to constitute a cause of action against that defendant.

(2) The motion provided for in this section may be made as to either of the following:

(A) The entire complaint or cross-complaint or as to any of the causes of action stated therein.

. . .

(d) The grounds for motion provided for in this section shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice. Where the motion is based on a matter of which the court may take judicial notice pursuant to Section 452 or 453 of the Evidence Code, the matter shall be specified in the notice of motion, or in the supporting points and authorities, except as the court may otherwise permit.

(e) No motion may be made pursuant to this section if a pretrial conference order has been entered pursuant to Section 575, or within 30 days of the date the action is initially set for trial, whichever is later, unless the court otherwise permits.

(f) The motion provided for in this section may be made only after one of the following conditions has occurred:

. . .

(2) If the moving party is a defendant, and the defendant has already filed his or her answer to the complaint and the time for the defendant to demur to the complaint has expired.

. . .

(h)(1) The motion provided for in this section may be granted with or without leave to file an amended complaint or answer, as the case may be.

(2) Where a motion is granted pursuant to this section with leave to file an amended complaint or answer, as the case may be, then the court shall grant 30 days to the party against whom the motion was granted to file an amended complaint or answer, as the case may be.

. . . .”

However, “a nonstatutory motion for judgment on the pleadings apparently survives without such limitations: “A motion for judgment on the pleadings may be made at any time either prior to the trial or at the trial itself.” [Stoops v. Abbassi (2002) 100 CA4th 644, 650, 122 CR2d 747, 752 (citing pre-CCP § 438 case of Ion Equip. Corp. v. Nelson (1980) 110 CA3d 868, 877, 168 CR 361, 365); see also Smiley v. Citibank (South Dakota) N.A. (1995) 11 C4th 138, 145, 44 CR2d 441, 445, fn. 2—“common law motion for judgment on the pleadings” upheld despite fact CCP § 438 had been enacted during course of proceedings; and Saltarelli & Steponovich v. Douglas (1995) 40 CA4th 1, 5, 46 CR2d 683, 686—treating defective motion for summary judgment as “nonstatutory motion for judgment on the pleadings”]…Case authority for the nonstatutory motion is rather thin. None of the cited cases expressly deal with this issue; they simply assume its existence. But these cases reach a practical result. A court should be able to decide there is no valid cause of action at any time. There is no point in forcing a case to go to trial because the motion was made too late or otherwise failed CCP § 438 requirements.” Weil & Brown, et al. CAL. PRAC. GUIDE: CIV. PROC. BEFORE TRIAL (The Rutter Group 2017) ¶ 7:277 (emphasis in original).

2nd Cause of Action (“COA”): Intentional Misrepresentation

The elements of intentional misrepresentation, or actual fraud, are: “(1) misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity (scienter); (3) intent to defraud (i.e., to induce reliance); (4) justifiable reliance; and (5) resulting damage. Anderson v. Deloitte & Touche (1997) 56 C.A.4th 1468, 1474. Fraud must be specifically pled, and the particularity requirement necessitates the pleading of facts that “show how, when, where, to whom, and by what means the representations were tendered.” Stansfield v. Starkey (1990) 220 C.A.3d 59, 73. The purpose of the rules of fraud pleading is to inform the defendant and the court of the specific grounds of the charge and enable them to evaluate it. See Chapman v. Skype Inc. (2013) 220 C.A.4th 217, 231.

The Complaint alleges in relevant part as follows:

“4. Defendant Total Floor Covering Inc. (here after referred to as “TFC’). TFC’s principal office is located in Glendale, California.

5. Defendant Ruben Demurchyan (hereby referred to as “Ruben”) was represented as the principle owner of TFC. Ruben was one of the principle agents in contracting with Plaintiff.

6. Defendant Arthur Demurchyan (hereby referred to as “Arthur”) was an agent of

TFC. Arthur was one of the principle agents in conracting with Plaintiff. Arthur held himself out to be a general contractor of TFC.

8. Defendants entered into a series of construction contracts with Plaintiffs in regards to renovating the property he owns at 18795 Algiers St., Porter Ranch, CA 91326. The first contract was entered into on February 13, 2017 and a total of twenty-seven (27) subsequent contracts were entered into between the parties.

9. Defendants are only licensed as Floor Contractors identified by license number 1004676 with the Contractors State License Board for the State of California.

10. Defendants license number 1004676 coincides with a C15 classification for flooring and floor covering, not as a general contractor.

…

18. Defendants’ represented to Plaintiff that they were duly licensed General Contractor’s and that they were capable of remodeling a home.

19. Defendants’ are not licensed as General Contractors, but in fact are only Floor Contractors.

20. Defendants’ knew that they were not licensed General Contractors when they made the statement and made them recklessly to induce Plaintiff to hire them.

21. Plaintiff relied on Defendants’ representation that they were General Contractors when deciding to hire them over other contractors.

22. Plaintiff was harmed with a house that was not completed and work that was not done up to standard. Plaintiff has had to hire other properly licensed contractors to repair damage done by the Defendants.

23. Plaintiffs reliance on Defendants’ representation of being General Contractors was a substantial factor in why Defendants were hired for the job.” (Complaint ¶¶ 4-10, 18-23).

Defendants’ argument hinges on uncertainty and particularity. In contrast to the 1st COA, Plaintiff does not state which Defendants he intends to assert the 2nd COA against. Nor does Plaintiff state who made the false representation to him, when it was made, how it was made, or even the means by which it was made. In other words, Plaintiff has met none of the particularity criteria set forth above. Defendants have been informed about what their supposed lie was, but none of the circumstances have been filled in. This is insufficient.

Plaintiff appeals to the doctrine of less particularity. Yet, as Plaintiff’s own quoted authority states, that doctrine applies when the defendant is more likely than the plaintiff to possess the relevant information. (Opposition p. 5:18-20); Chapman, supra, 220 C.A.4th at 231 (less specificity is required if the defendant would likely have greater knowledge of the facts than the plaintiff) (emphasis added). At best here, the parties have equal knowledge of the information. The burden is on Plaintiff to identify at least a time frame and the exact person who made these representations, so that Defendants do not have to make an encyclopedic search of records and memories of every time any of them ever interacted with Plaintiff. Defendants are entitled to that much notice so that they can evaluate the claim.

For the foregoing reasons, Defendants’ motion is GRANTED, with leave as to this COA.

3rd COA: Breach of Contract

“’A cause of action for damages for breach of contract is comprised of the following elements: (1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to plaintiff.’ (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 C.A.3d 1371, 1388).” Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 C.A.4th 221, 228. “Further, the complaint must indicate on its face whether the contract is written, oral, or implied by conduct. (Code Civ.Proc., § 430.10, subd. (g).).” Otworth v. Southern Pac. Transportation Co. (1985) 166 C.A.3d 452, 458-459 (implicitly overruled on other grounds as recognized by Miles v. Deutsche Bank National Trust Company (2015) 236 C.A.4th 394, 401-402).

“’A written contract may be pleaded either by its terms—set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference—or by its legal effect. [Citation.] In order to plead a contract by its legal effect, plaintiff must “allege the substance of its relevant terms. This is more difficult, for it requires a careful analysis of the instrument, comprehensiveness in statement, and avoidance of legal conclusions.” [Citation.]’ (McKell v. Washington Mutual, Inc. (2006) 142 C.A.4th 1457, 1489.).” Heritage Pacific Financial, LLC v. Monroy (2013) 215 C.A.4th 972, 993.

“A written contract which is the foundation of a cause of action may be pleaded in haec verba rather than according to its legal effect, either by setting forth a copy in the body of the pleading or by attaching a copy as an exhibit and incorporating it by reference.” Bates v. Daley’s, Inc. (1935) 5 C.A.2d 95, 101 (Emphasis added). The court in Gilmore v. Lycoming Fire Ins. Co. (1880) 55 C. 123, 124 adds that “[w]here a party relies upon a contract in writing, and it affirmatively appears that all the terms of the contract are not set forth in haec verba, nor stated in their legal effect, but that a portion which may be material has been omitted, the complaint is insufficient.”

The Complaint alleges in relevant part as follows:

“25. Plaintiff and Defendants’ Arthur, Ruben and TFC entered into approximately twenty-seven (27) contracts beginning February 13, 2017 until approximately

June of 2017.

26. Plaintiff was required to pay Defendant money and Plaintiffs were required to complete construction by April 19, 2017 as noted in the contract signed April 14, 2017. Defendants’ added a penalty clause for non-compliance with the completion date. There were approximately Thirty-Nine (39) items that had to be completed. (EXHIBIT 2). The clause held that Defendants’ would be liable for

$50.00 a day that a particular item was not completed

27. Defendants did not complete the items by the completion date.

28. Defendant breach of contract amounted to $89,150.00.” (Complaint ¶¶ 25-28).

Plaintiff argues that objections based on failure to allege whether the contract was written, oral, or implied by conduct under CCP § 430.10(g) may not be raised in a motion for judgment on the pleadings. Plaintiff is technically correct; Section 430.10 governs answers and demurrers only, while Section 438 governs judgment on the pleadings. However, Section 438 permits a motion on the basis of failure to state a cause of action. So, in the instance where the substance of the contract is properly alleged, failure to allege the form of the contract cannot be raised by a motion for judgment on the pleadings. But where the substance of the contract is in doubt, lack of information regarding the form of the contract may well be part of the deficiency in the COA. That is the situation here. Defendants have not waived this objection in this instance.

Plaintiff has alleged a breach of 27 contracts. The only terms of the contracts alleged are a completion date and a penalty clause. The exhibits attached purport to be the lists of tasks to be achieved, but not one of them is a full contract. The relevant terms (most notably including the price Plaintiff agreed to pay for this work) have not been alleged. And the damages have been alleged in a wholly conclusory fashion. Therefore, Defendants’ motion is GRANTED, with leave as to this COA.

MOTION TO STRIKE

Ds now move this court per CCP §§ 435 and 436 for an order striking the attorney’s fees and punitive damages, requests from the prayer in the Complaint.

Recommendation

Per the recommendation above, this motion should be TAKEN OFF-CALENDAR as MOOT.