Case Number: BC685519 Hearing Date: March 21, 2018 Dept: 32

ARSINEH AGHAKHANI,

Plaintiff,

v.

HADI EDWARD RAMSEY. et al.,

Defendants.

Case No.: BC685519

Hearing Date: March 21, 2018

[TENTATIVE] order RE:

(1) DEFENDANTS’ DEMURRER

(2) DEFENDANTS’ MOTION TO STRIKE PUNITIVE DAMAGES

BACKGROUND

The complaint in this action was filed by Arsineh Aghakhani (“Plaintiff”) against Los Angeles City Law, APLC (“LA CITY LAW”), a California corporation, and Hadi Edward Ramsey (“RAMSEY”), collectively referred to as (“Defendants”), on December 4, 2017. Plaintiff alleges she entered into an agreement with Defendants to provide legal representation for the clients of LA CITY LAW in exchange for compensation. Plaintiff alleges the each of the Defendants was the agent, servant, employee, and/or co-conspirator of the other. The causes of action alleged are (1) Breach of Oral Contract; (2) Common Counts: Open Book Account, Account Stated, Services Rendered; (3) Promissory Fraud; (4) Unfair Competition Cal. Bus. & Prof. Code §17200 et seq.; and (5) Intentional Interference with Prospective Economic Advantage.

DISCUSSION

A demurrer challenges only the legal sufficiency of the complaint, not the truth of its factual allegations or the plaintiff’s ability to prove those allegations. (Picton v. Anderson Union High Sch. Dist. (1996) 50 Cal. App. 4th 726, 732.) The court must treat as true all of the complaint’s material factual allegations, but not contentions, deductions or conclusions of fact or law. (Id. at 732–33.) The complaint is to be construed liberally to determine whether a cause of action has been stated. (Id. at 733.)

A. First Cause of Action – Breach of Oral Contract

“The standard elements of a claim for breach of contract are: “(1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff therefrom.” (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal. App. 4th 1171, 1178.) “An oral contract may be pleaded generally as to its effect, because it is rarely possible to allege the exact words.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal. App. 4th 612, 616.)

Plaintiff alleges that on or about August 1, 2015 Defendants and Plaintiffs (hereinafter the “Parties”) entered into “a working arrangement whereby Plaintiff agreed to assist RAMSEY in providing legal representation for clients of LA CITY LAW in exchange for compensation.” (Complaint ¶10.) However, Plaintiff also alleges Defendants did not intend to perform certain “promises” made, namely that “Defendants represented to Plaintiff that they wished to transition LA CITY LAW into a boutique firm specializing in more complex and catastrophic matters thereby increasing the firm’s revenues which would in turn elevate Plaintiff’s financial position and that of Defendants.” (Complaint ¶10; 55.) It is unclear from the pleadings whether such “promises” are terms of the alleged oral contract.

Plaintiff fails to allege the essential terms of the contract, and as a consequence, fails to allege which terms of the purported contract were breached. Plaintiff does not allege the length of the term of employment. Further, Plaintiff fails to allege the terms of Plaintiff’s performance according to the agreement, except to summarily conclude that “Plaintiff has at all times performed all conditions, covenants and promises required on her part…” (Complaint ¶35.) As such, the allegation that Defendants failed to remit payment to Plaintiff for rendering services on matters that had settled between February 2017 and June 8, 2017 does not necessarily constitute a breach. (Complaint ¶36.)

For the above reasons, the demurrer to the first cause of action is SUSTAINED WITH LEAVE TO AMEND.

B. Second Cause of Action – Common Counts

The only essential allegations of a common count are (1) the statement of indebtedness in a certain sum; (2) the consideration; and (3) nonpayment. (Farmers Ins. Exchange v. Zerin (2007) 53 Cal.App.4th 445, 460.) Where a common count is pleaded as an alternative way of seeking the same relief demanded in a specific cause of action, and is based on the same facts, the common count is demurrable if the cause of action is demurrable. (McBride v. Boughton (2004) 123 Cal.App.4th 379, 394.)

Plaintiff alleges common counts for open bank account, account stated and services rendered based on the same facts as alleged in Plaintiff’s Breach of Contract claim so the results are inextricably tied. Based on the foregoing, the Court sustains the demurrer to the second cause of action with leave to amend.

The demurrer to the second cause of action is SUSTAINED WITH LEAVE TO AMEND.

C. Third and Fourth Causes of Action – Promissory Fraud and Unfair Competition

To prevail on a promissory fraud cause of action, Plaintiff must plead and prove the following: (1) a promise made regarding a material fact without any intention of performing it; (2) the existence of the intent not to perform at the time the promise was made; (3) intent to deceive or induce the promise to enter into a transaction; (4) reasonable reliance by the promise; (5) nonperformance by the party making the promise; and (6) resulting damage to the promisee. (Behnke v. State Farm General Ins. Co. (2011) 196 Cal.App.4th 1443, 1453.) As with any other form of fraud, each element of a promissory fraud claim must be alleged with particularity. (Rossberg v. Bank of America, N.A. (2013) 219 Cal.App.4th 1481, 1498.)

In California, fraud must be pled specifically; general and conclusory allegations do not suffice. (Lazar v. Superior Court (1996) 12 Cal. 4th 631, 645.) The particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered. (Ibid.) The plaintiff’s burden in asserting a fraud claim against a corporate employer is even greater as the Plaintiff must allege the names of the person who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Ibid.)

Plaintiff alleges “Defendants represented to Plaintiff that they wished to transition LA CITY LAW into a boutique firm specializing in more compel and catastrophic matters thereby increasing the firm’s revenues which would in turn elevate Plaintiff’s financial position and that of Defendants.” (Complaint ¶55.) Plaintiff does not allege the name of any person making such promise, their authority, or when the alleged promise was said or written. As such, Plaintiff fails to state a cause of action for promissory fraud.

Plaintiff’s fourth cause of action alleges unfair competition under Cal. Bus. & Profs. Code §17200, however the underlying fraudulent business act was not properly alleged for the reasons discussed above. Plaintiff uses conclusory language in allegations that Defendants violated additional underlying laws CCP §1709 and CCP §1565 and as such Plaintiff’s fourth cause of action necessarily fails as well. (Complaint ¶¶63-64.)

Based on the foregoing, the demurrer to the third and fourth causes of action are SUSTAINED WITH LEAVE TO AMEND.

D. Fifth Cause of Action – Intentional Interference with Prospective Economic Advantage

To establish a cause of action for interference with prospective economic relationship, a plaintiff must plead and prove: “(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.)

Further, “[a] plaintiff seeking to recover for an alleged interference with prospective contractual or economic relations must plead and prove as part of its case-in chief that the defendant not only interfered with the plaintiff’s expectancy, but engaged in conduct that was wrongful by some legal measure other than the fact of interference itself.” (Della Penna v. Toyota Motor Sales, U.S.A. Inc. (1995) 11 Cal.4th 376, 393.) Plaintiff’s allegations do not sufficiently allege such facts and only allege that the “conduct is disruptive to Plaintiff’s relationship with clients” in a conclusory matter. (Complaint ¶74.)

For the foregoing reasons, the demurrer to the fifth cause of action is SUSTAINED WITH LEAVE TO AMEND.

E. Motion to Strike Punitive Damages

Punitive damages are available in noncontract cases where the defendant is guilty of “oppression, fraud, or malice.” (Civil Code § 3294(a).) Punitive damages are not recoverable in actions for breach of contract, even if defendant’s conduct was willful, oppressive or malicious. (See, Myers Bldg. Indus., Ltd. v. Interface Technology, Inc. (1993) 13 CA4th 949, 960.) Conclusory allegations are insufficient to support a claim for punitive damages. (See, e.g., Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal. App. 3d 590, 620.) However, “the stricken language must be read not in isolation, but in the context of the facts alleged in the rest of petitioner’s complaint.” (Perkins v. Superior Court (1981) 117 Cal. App. 3d 1, 6.)

Defendants move to strike Plaintiff’s prayer/allegations for punitive damages from the Complaint. With regards to punitive damages, the Complaint fails to state a cause of action for fraud or intentional interference with prospective economic advantage for the reasons discussed above. Thus, when the prayer/allegations for punitive damages are read in the context of the facts alleged in the Complaint, Plaintiff’s allegations are insufficient to support a claim for punitive damages at the pleading stage.

Based on the foregoing, the motion to strike ¶¶ 60, 78 and the Prayer for Relief subsection (3) for punitive damages on page 15, lines 7-8 is GRANTED.

F. Notice

Pursuant to California Rules of Court 3.1320(c) a party filing a demurrer must service and file a notice of hearing that must specify a hearing date in accordance with the provisions of Code of Civil Procedure §1005. Defendants noticed the demurrer and motion to strike on February 28, 2018 via email, fax and by mail. Though there was no stipulation for electronic service (CCP §1010.6), the Court exercises it discretion to hear this motion as the Plaintiff was on notice of the demurrer since the meet and confer on February 9, 2018, was provided actual notice on February 28, 2018 via email and filed an opposition to both the motion to strike and demurrer. The Court finds no prejudice against the Plaintiff would occur by ruling on these motions at this time.

G. Conclusion

The demurrer to the first through fifth causes of action is SUSTAINED WITH LEAVE TO AMEND.

The motion to strike ¶¶ 60, 78 and the Prayer for Relief subsection (3) for punitive damages on page 15, lines 7-8 is GRANTED.