Case Number: BC519804    Hearing Date: August 12, 2014    Dept: 73

Dept. 73
Rafael Ongkeko, Judge presiding
8/12/14

LIU vs. KU, et al. (BC519804)

Counsel for defendants/moving party: Justin Shrenger
Counsel for plaintiff/opposing party: Jeffrey Leo

Matter #1: Demurrer of defendants (filed 6/13/14) to first amended complaint
Matter #2: Motion for order imposing monetary sanctions pursuant to C.C.P. § 128.7, etc. (filed 7/21/14).

TENTATIVE RULINGS:
1. Demurrer: Defendant’s request for judicial notice is denied. Plaintiff’s discovery responses are not directly inconsistent with the FAC.
As to the first cause of action for unfair business practice under B&P 17500, and as to the second cause of action for fraud, the demurrer is sustained with leave to amend.
The demurrer is overruled as to the third and fourth causes of action.
See below for leave to amend instructions.

2. Motion for Sanctions:
The objections to the Garvin and Leo declarations are sustained. The motion is denied.

1st cause of action for unfair business practices (B&P 17500- bait and switch).

Section 17500 addresses false advertising. To plead such a cause of action, one must allege (1) the defendant intended to dispose of real or personal property or perform services; and (a) defendant publicly disseminated advertising containing an untrue or misleading statement; (b) defendant knew, or should have known, it was untrue or misleading; and (c) it concerned the real or personal property or services or their disposition or performance; or (d) defendant publicly disseminated advertising with the intent not to sell the property or services at the price stated or as advertised. Bus. & Prof. Code §17500; see also People v. Forest E. Olson, Inc. (1982) 137 Cal.App.3d 137, 139 – noting that intent to mislead is not required to state a claim under § 17500.

Plaintiff has not alleged any specific false statement, or that any statement relevant to this lawsuit is or was likely to deceive the public. The False Advertising Law – much like the UCL requires an allegation of injury-in-fact – in other words – that the plaintiff lost money or property. See B&P § 17535; Morgan v. AT&T Wireless Services, Inc. (2009) 177 Cal.App.4th 1235, 1259.

The complaint does not allege the dissemination of false information to the “public.” Here, plaintiff alleges only that she called and was quoted a false price for an airline ticket. (Inexplicably, plaintiff’s opposition, at 10:23-24, states plaintiff “found the pricing for the airline ticket online, on Lai Lai Travel’s website.”) As indicated in People v. Witzerman (1972) 29 Cal. App. 3d 169, 180 and Sassone v. Board of Chiropractic Examiners (1962) 201 Cal. App. 2d 165, 172, the use of “dissemination” and “advertising” in this statute indicates the advertisement must have been published in broader circulation than one individual and must have been likely to deceive the public.

Defendants ask the court improperly to take judicial notice of plaintiff’s discovery responses in which she stated that she did not buy a ticket for travel in June, 2013 from anyone other than Lai Lai and that she was unable to travel to China as planned, but these are not directly inconsistent with her allegation that she had to buy a ticket at higher cost (silent as to date of purchase).

The demurrer to the first cause of action is sustained with leave to amend. The court previously sustained defendants’ demurrer on precisely this basis and the new allegations in the FAC again fail to address this issue. One final amendment will be allowed.

2nd cause of action for fraud.

The complaint alleges “the misrepresentations made by Maggie Ku, on behalf of all defendants, were material and intended to have plaintiff Grace act and rely thereupon and obtain her airline ticket to Shanghai, China and return.” (¶15.) Plaintiff’s allegations are very similar to those previously asserted, except that she now alleges she did not know Ku’s misrepresentations were false at the time they were made, that her reliance was justifiable, and that Defendant knew her statements were false. (¶¶15-16.) She also alleges that had she known the representations were false, she would have purchased her ticket from a “reputable travel agency.” (¶16.)

Defendants challenge this cause of action on grounds plaintiff has not adequately alleged a misrepresentation, i.e., that either ticket price was incorrect; justifiable reliance or damages because ultimately she decided not to purchase a ticket from the defendants.

To plead a cause of action for fraud, one must allege (1) a misrepresentation; (2) knowledge of falsity (or “scienter”); (3) intent to defraud (induce reliance); (4) justifiable reliance; and, (5) resulting damage. Charnay v. Cobert (2006) 145 Cal.App.4th 170, 184. A complainant’s conclusory assertion of reliance on misrepresentations is insufficient to satisfy the requirement of specific pleading of fraud, and instead facts must be alleged that would indicate actual reliance on the misrepresentations. Small v. Fritz Companies, Inc. (2003) 30 Cal. 4th 167, 184. Complainants must plead that fraud has caused damages. Patrick v. Alacer (2008) 167 Cal.App.4th 995, 1016-17.

Plaintiff has incorporated paragraphs from which it can be inferred that defendant quoted two different ticket prices and two different means of payment. However, with the exception of damages, none of the elements of fraud have been alleged with any specificity.

As far as damages, plaintiff has adequately alleged damage, claiming that she had to purchase the ticket elsewhere for more than the $2,100 she was initially quoted. However, as she did previously, plaintiff seeks damages for “lost profits” and “emotional distress,” and now adds the allegation that she somehow lost income. (¶16) To the extent she now alleges that had she known defendant was misrepresenting the ticket price, she would have purchased a ticket from a reputable agency and been able to fly to Shanghai on the day she planned, it is not clear how this relates to her damage claims. Any further deficiencies might be subject to a motion to strike, but not by demurrer.

The demurrer to the second cause of action for fraud is sustained with a final opportunity of leave to amend.

3d cause of action for breach of contract.

This newly-alleged cause of action relies on the assertion that on June 14, 2013, plaintiff and defendant orally agreed plaintiff would pay for her round trip ticket to Shanghai and defendants would issue the roundtrip ticket. (¶18.) She alleges defendants breached the oral agreement and plaintiff has sustained damages “consisting of higher charges for a round-trip ticket…from a different provider and lost income…and other damages… (¶19.)

To plead a cause of action for breach of contract, one must allege (1) the existence of contract; (2) plaintiffs’ performance or excuse for nonperformance; (3) defendants’ breach (or anticipatory breach); and (4) resulting damage. Wall Street Network, Ltd. v. N. Y. Times Co. (2008) 164 Cal.App.4th 1171, 1178. General allegations stating that defendants violated a contract are insufficient, and instead pleaders must state facts showing a breach. Levy v. State Farm Mutual Automobile Ins. Co. (2007) 150 Cal. App. 4th 1, 5-6. “[A] pleader must state with certainty the facts constituting a breach of contract.” Melican v. Regents of Univ. of Cal. (2007) 151 Cal. App. 4th 168, 174.

Presumably, the contract alleged was that Plaintiff would pay $2,100 for the ticket and a ticket would be issued. Plaintiff does not explicitly allege what action constitutes a breach, but the FAC as a whole shows that the defendants breached by not issuing a ticket at the agreed price and instead demanding a higher price and immediate cash payment.

The demurrer improperly focuses on the issue of damages, arguing plaintiff’s claim is barred based on her failure to mitigate her damages. This is an inappropriate ground for demurrer.

The demurrer to the third cause of action for breach of contract is overruled.

4th cause of action for false imprisonment.

The complaint alleges “[a]s a result of the citizen’s arrest undertaken by defendants of plaintiff, plaintiff was falsely imprisoned and subject to criminal proceedings now terminated in her favor . . . Defendants caused Plaintiff to be physically restrained and confined on the basis of the citizen’s arrest that defendant Maggie Ku, on behalf of all defendants, conducted.” (¶25.) The FAC now alleges defendant Ku signed and authorized an “Arrest by a Private Person,” authorizing plaintiff’s imprisonment. (¶22.)

Defendants challenge this cause of action on grounds the allegations are vague and in any event, this cause of action is barred by the litigation privilege.

To plead a cause of action for false imprisonment, one must allege (1) the nonconsensual, intentional confinement of a person; (2) without lawful privilege; (3) for appreciable period. Lyons v. Fire Ins. Exch. (2008) 161 Cal.App.4th 880, 888.

Defendants argue that assuming the truth of these allegations, the litigation privilege bars this cause of action, relying on Civil Code §47(b)(2) and other authority such as Williams v. Taylor (1982) 129 Cal.App.3d 745, 753-54. [The citation for the Mulder v. Pilot, etc. case cited in defendants’ demurrer should have a cite of 32 Cal.4th 384.] The Second DCA has since held that a citizen’s arrest is not privileged as against a claim of false imprisonment. Kesmodel v. Rand (2004) 119 Cal.App.4th 1128, 1134.

The demurrer to the fourth cause of action is overruled.

Motion for sanctions.
The requirements of CCP 128.7 have not been met. While this action is being over-litigated in the extreme (by both sides), sanctions are not appropriate.

Leave to amend and red-line version:
Plaintiff is granted leave either to file and serve a writing by 8/22/14 indicating no intent to amend the complaint or to file and serve a second amended complaint by that date. If plaintiff elects the latter, a red-line copy of the amended complaint showing the changes from the previous complaint is to be concurrently provided to defendant. If defendant intends to file a demurrer to the amended complaint, defendant must lodge directly in Dept. 73 the red-line copy of the amended complaint with its demurrer.

Unless waived, notice of ruling by moving party.