2014-00157193-CU-BC
Lanset America Corporation vs. Skout, Inc.
Nature of Proceeding: Hearing on Demurrer
Filed By: Hawley, Ruth
Defendant’s Demurrer to Plaintiff’s original Complaint is OVERRULED in part and
SUSTAINED with leave to amend, in part.
The notice of motion does not provide notice of the Court’s tentative ruling system as
required by with C.R.C., Rule 3.1308 and Local Rule 1.06(D). Local Rules for the
Sacramento Superior Court are available on the Court’s website at
ordered to notify opposing party immediately of the tentative ruling system and to be
available at the hearing, in person or by telephone, in the event opposing party
appears without following the procedures set forth in Local Rule 1.06(B).
Defendant’s Request for Judicial Notice is DENIED. The document [“Terms of
Service”] sought to be judicially noticed is not attached to and incorporated into the
pleading, but constitutes extrinsic evidence, which may not be considered on
demurrer. It is not judicially noticeable. A hearing on a demurrer cannot be turned into
a contested evidentiary hearing through the guise of having the court take judicial
notice of documents whose truthfulness or proper interpretation are disputable. (
Unruh-Haxton v. Regents of Univ. of Cal. (2008) 162 Cal.App.4th 343, 365.)
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Plaintiff’s Complaint sets forth four causes of action: the 1 for breach of contract, 2
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for deceit, 3 for constructive fraud and 4 for unjust enrichment. Defendant demurs to
each on the grounds that it fails to state facts sufficient to constitute a cause of action.
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The demurrer to the 1 cause of action for breach of contract is OVERRULED, as it
relies upon the extrinsic evidence.
The demurrer to the 2nd for deceit is SUSTAINED, with leave to amend.
The elements of an action for fraud and deceit based on concealment are: (1) the
defendant must have concealed or suppressed a material fact, (2) the defendant must
have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have
intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4)
the plaintiff must have been unaware of the fact and would not have acted as he did if
he had known of the concealed or suppressed fact, and (5) as a result of the
concealment or suppression of the fact, the plaintiff must have sustained damage.
Marketing West, Inc. v. Sanyo Fisher (USA) Corp. (1992) 6 Cal.App.4th 603, 612-613.
The Court declines to rely upon the extrinsic evidence provided; however it finds the
allegations of a special relationship between Lanset and Skout to be insufficient to
establish defendant’s duty to disclose the defendant’s creation of a server farm to the
plaintiff. Plaintiff may have leave to amend.
The demurrer to the 3rd for constructive fraud is SUSTAINED, with leave to amend.
Civil Code, sec. 1573, and the case law interpreting it, require the existence of duty,
based upon a confidential or fiduciary relationship.
As above, the Court finds that the facts alleged in the complaint are insufficient to
establish that duty based on a confidential or fiduciary relationship.
Plaintiff may have leave to amend.
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The demurrer to the 4 for unjust enrichment is SUSTAINED, with leave to amend.
Defendant demurs on the grounds that unjust enrichment is not a recognized cause of
action, and that even if it were, plaintiff has failed to allege what service Skout received
from Lanset that Skout did not adequately pay for. On the latter point, the Court
agrees.
While there are cases stating that unjust enrichment is not a stand alone cause of
action (e.g., Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th 779, 794)
there are, as Plaintiff points out in opposition, cases that indicate that there is a cause
of action for unjust enrichment (e.g., Lectrodryer v. Seoul Bank (2000) 77 Cal.App.4th
723, 726.) It has been noted that Courts have observed “a split of authority in
California as to whether a claim for unjust enrichment is recognized as an independent
cause of action.” (Concorde Equity II, LLC v. Miller (N.D. Cal. 2010) 732 F. Supp. 2d
990, 1001.) California courts agree that ‘unjust enrichment’ is in effect, ‘the result of a
failure to make restitution under circumstances where it is equitable to do so.’” (
Concorde Equity II, LLC v. Miller, 732 F. Supp. 2d 990, 1001 (N.D. Cal. 2010), quoting
Melchior v. New Line Prods., Inc., (2003) 106 Cal. App. 4th 779, 793.) Unjust
enrichment is synonymous with the term “restitution.” Dinosaur Development, Inc. v.
White (1989) 216 Cal.App.3d 1310, 1314. However, even the cases indicating that
there is such a cause of action recognize that it must be premised on an underlying
wrong. (Lectrodryer, supra, 77 Cal.App.4th 723.)
Plaintiff shall file and serve his First Amended Complaint not later than Thursday, June
12, 2014. The responsive pleading shall be due filed and served 10 days later (15
days if service is by mail).
The minute order is effective immediately. No formal order pursuant to CRC Rule
3.1312 or further notice is required.
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