Fundulea vs. Divine

38.) Here, the allegations of APM’s fraud are independent of APM’s obligations under its contract with the HOA to update addresses and send out notices properly. They are based on APM’s obligation not to make misrepresentations, whether intentionally or negligently, to Plaintiffs. Thus, the economic loss rule does not apply.

Motion to Strike The prayer for punitive damages is supported by the fraud-based claims. (Civil Code, § 3294(a).)

APM to file an answer to the FAC within 20 days.

Moving party to give notice.

105 Fundulea vs. Divine, 2024-01375051 Demurrer to Amended Cross-Complaint – OVERRULED IN PART AND SUSTAINED IN PART WITH 20 DAYS LEAVE TO AMEND Motion to Strike Portions Of Complaint – DENIED

This case arises out of the sale of a small business by Anca and Eugen Fundulea (Sellers) to The Renaissance Company et al (Buyers). Sellers sued Buyers for multiple causes of action, including breach of contract and fraud, and Buyers filed a cross-complaint for essentially the same causes of action. Before the court are Sellers’ demurrer to Buyers’ first amended crosscomplaint (FACC) and Sellers’ motion to strike portions of the FACC.

“A complaint, with certain exceptions, need only contain a ‘statement of the facts constituting the cause of action, in ordinary and concise language’ (Code Civ. Proc., § 425.10, subd. (a)(1)) and will be upheld ‘ “so long as [it] gives notice of the issues sufficient to enable preparation of a defense.” ’ [Citation.]” (Morris v. JPMorgan Chase Bank, N.A. (2022) 78 Cal.App.5th 279, 292.)

“[T]o withstand a demurrer, a complaint must allege ultimate facts, not evidentiary facts or conclusions of law.’ [Citation.]” (Morris v. JPMorgan Chase Bank, N.A. (2022) 78 Cal.App.5th 279, 292.) “However, ‘ “[t]he fact that a party has alleged more than is required to justify

his right does not obligate him to prove more than is essential, and the unnecessary allegations will be treated as surplusage unless the opposing party would be prejudiced.”” (Ibid.)

“No error or defect in a pleading is to be regarded unless it affects substantial rights.” (Harris v. City of Santa Monica (2013) 56 Cal.4th 203, 240.) “The primary function of a pleading is to give the other party notice so that it may prepare its case [Citation], and a defect in a pleading that otherwise properly notifies a party cannot be said to affect substantial rights.” (Ibid.)

1 st Cause of Action – Breach of Contract “[T]he elements of a cause of action for breach of contract are (1) the existence of the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.) “[T]he complaint must indicate on its face whether the contract is written, oral, or implied by conduct.” (Otworth v. Southern Pac. Transportation Co. (1985) 166 Cal.App.3d 452, 458–459.)

Express and implied “contract[s] are identical in that they require a meeting of minds or an agreement [citation].” (Aton Center, Inc. v. United Healthcare Ins. Co. (2023) 93 Cal.App.5th 1214, 1230.) “Thus, it is evident that both the express contract and contract implied in fact are founded upon an ascertained agreement or, in other words, are consensual in nature, the substantial difference being in the mode of proof by which they are established.” (Ibid.)

Moreover, “[i]n order to plead a contract by its legal effect, plaintiff must allege the substance of its relevant terms.” (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489.) “This is more difficult, for it requires a careful analysis of the instrument, comprehensiveness in statement, and avoidance of legal conclusions.” (Ibid.)

Here, Buyers allege that the parties entered into a written stock purchase agreement (FACC, ¶ 6.), identify

the section of the agreement Sellers allegedly breached and allege facts setting forth how those sections were allegedly breached (FACC, ¶¶ 8-14 and 18), allege their own performance or excuse from performance (FACC, ¶ 17), and allege damages. (FACC, ¶ 19.)

This is sufficient to state a cause of action for breach of contract at this stage in the litigation, and the demurrer to this cause of action is OVERRULED.

2 nd Cause of Action – Breach of the Implied Covenant Sellers’ argument as to this cause of action rests entirely on the Court sustaining the demurrer as to the first cause of action and therefore must be overruled. The Court finds that in any event, the allegations in the FACC sufficiently state a cause of action for breach of implied covenant of good faith and fair dealing. (FACC, ¶¶ 20 -24 and 40.) the demurrer to this cause of action is OVERRULED.

3 rd Cause of Action – Fraud Fraud causes of action must be pled with specificity. “This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the false representations were made.” (State ex rel. Edelweiss Fund, LLC v. JPMorgan Chase & Co. (2023) 90 Cal.App.5th 1119, 1136–1137.) “The complaint must plead the time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby.” (Ibid.)

Here, Buyers allege that “Cross Defendants promises to provide TRC with Company emails and other data and intellectual property as part of the SPA were false when made and that Cross-Defendants had no intent to honor such promises when they were made. Cross- Complainant is further informed and believe and based thereon allege that Cross-Defendants made the promises with the intent to induce Cross-Complainant to rely on them.” (FACC, ¶ 27.) These allegations fail to specify the “how, when, where, to whom, and by what means the false representations were made” as required for fraud causes of action.

The demurrer to the third cause of action for fraud is SUSTAINED WITH LEAVE TO AMEND for failure to allege the requisite specificity regarding the “the time, place, and contents of the false representations.”

4 th Cause of Action – Unjust Enrichment Buyers have agreed to dismiss this cause of action.

5 th Cause of Action -UCL Sellers demurred to this cause of action, but have not addressed it in the memorandum of points and authorities. They have not carried their burden and the demurrer is OVERRULED as to this cause of action.

6 th Cause of Action – Pen. Code § 502 Penal Code section 502 authorizes a civil suit against anyone who “(1) Knowingly accesses and without permission alters, damages, deletes, destroys, or otherwise uses any data, computer, computer system, or computer network in order to either (A) devise or execute any scheme or artifice to defraud, deceive, or extort, or (B) wrongfully control or obtain money, property, or data. . . .[¶] (4) Knowingly accesses and without permission adds, alters, damages, deletes, or destroys any data, computer software, or computer programs which reside or exist internal or external to a computer, computer system, or computer network. . . . [¶] (11) Knowingly accesses and without permission adds, alters, damages, deletes, or destroys any data, computer software, or computer programs which reside or exist internal or external to a public safety infrastructure computer system computer, computer system, or computer network.” (Pen.

Code, § 502(c)(1), (4) &(11);Garrabrants v. Erhart (2023) 98 Cal.App.5th 486, 507.)

Here, Buyers allege that Sellers “knowingly, intentionally, maliciously and fraudulently deleted the Company’s emails in violation of the express and implied terms of the SPA and in violation of Section 502” (FACC, ¶ 40) and that “Cross-Complainant is informed and believes and on that basis alleges that notwithstanding the parties’ express understanding,

based on both the written SPA and oral representations regarding company emails, on April 8, 2022, just one day after the SPA was fully executed and the rights and ownership of the emails and other intellectual property were transferred to TRC, Cross-Defendants intentionally deleted all of the Company’s emails and related data and information.” (FACC, ¶ 13.)

Based on these allegations, the demurrer to the sixth cause of action for violation of Penal Code section 502 is OVERRULED.

7 th Cause of Action – Pen. Code § 496 “While section 496(a) covers a spectrum of impermissible activity relating to stolen property, the elements required to show a violation of section 496(a) are simply that (i) property was stolen or obtained in a manner constituting theft, (ii) the defendant knew the property was so stolen or obtained, and (iii) the defendant received or had possession of the stolen property.” (Switzer v. Wood (2019) 35 Cal.App.5th 116, 126.)

“Theft, in turn, is defined in section 484, subdivision (a), as follows: ‘Every person who ... shall knowingly and designedly, by any false or fraudulent representation or pretense, defraud any other person of money, labor or real or personal property ... is guilty of theft.’” (Johnson v. Connie, LLC (2025) 113 Cal.App.5th 850, 855.) “To prove theft, a plaintiff must establish criminal intent on the part of the defendant beyond ‘mere proof of nonperformance or actual falsity.’” (Siry Investment, L.P. v. Farkhondehpour (2022) 13 Cal.5th 333, 361–362.) “This requirement prevents ‘[o]rdinary commercial defaults’ from being transformed into a theft.” (Id., 362.) “If misrepresentations or unfulfilled promises ‘are made innocently or inadvertently, they can no more form the basis for a prosecution for obtaining property by false pretenses than can an innocent breach of contract.’” (Ibid.)

Here, the FACC alleges that Sellers “knowingly, intentionally, maliciously and fraudulently deleted the Company’s emails in violation of the express and implied terms of the SPA and in violation of Section 496.”

(FACC, ¶ 45.) It also alleges that this occurred after Buyers owned the company and the emails belonging to the company: “Cross-Complainant is informed and believes and on that basis alleges that notwithstanding the parties’ express understanding, based on both the written SPA and oral representations regarding company emails, on April 8, 2022, just one day after the SPA was fully executed and the rights and ownership of the emails and other intellectual property were transferred to TRC, Cross-Defendants intentionally deleted all of the Company’s emails and related data and information.” (FACC, ¶ 13.)

The demurrer to the seventh cause of action for violation of Penal Code section 496 is OVERRULED.

Motion to Strike The Motion is DENIED in its entirety.

The Court will address each allegation that Defendant seeks to strike.

1. FAC ¶19, page 7, lines 2-5, which state: “. . . reimbursement of attorneys’ fees paid to cover the Company’s legal fees forwarded by Plaintiffs for the successful litigation against The Build Group, Inc.. . ”

As to this allegation, Defendant argues that “[n]othing in the SPA requires Defendants to reimburse Plaintiffs for attorneys’ fees Plaintiffs allegedly incurred on behalf of the Company.”

However, the SPA appears to have an indemnification clause that allows the sellers to recover losses incurred arising out of or related to: “(a) any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement or the other Transaction Documents; or (b) any breach or nonfulfillment of any covenant, agreement, or obligation to be performed by Buyer pursuant to this Agreement. (c) Any loss, liability, damage or claim against the Seller Indemnitees arising from the conduct of the Company after the Closing Date including, without limitation, the Company’s continued use of the California Contractor

License held by Eugen Fundulea.” Moreover, Plaintiffs also argue and the FAC alleges that Plaintiffs are entitled to these fees pursuant to the transition clause contained in the SPA.

The FACC appears to allege that Plaintiffs are entitled to fees related to the Build Group, Inc. litigation matters. Whether those fees violate the transition clause of the SPA or are subject to indemnification pursuant to the SPA are at issue in this case. The Court will not strike such allegations.

The Motion to Strike is DENIED as to this allegation.

2. FAC ¶49, page 9, lines 9-10, which state: “... failing to reimburse for attorneys’ fees expended on behalf of the Company in litigation, failing to pay the sums recovered through litigation with Build Group, Inc .. . .”

For the reasons discussed above, the Motion to Strike is DENIED as to this allegation.

3. FAC ¶70.a, page 16, lines 1-3, which state: “$175,000 in cash from the settlement proceeds derived from the Build Group, Inc. litigation (Los Angeles Superior Court Case No. 22LBCV00220 and Case No. 22LBCV00317).”

Defendants argue that this allegation should be stricken because it is not a grounds for conversion.

“Conversion is the wrongful exercise of dominion over the property of another.” (Los Angeles Federal Credit Union v. Madatyan (2012) 209 Cal.App.4th 1383, 1387.) “The elements of a conversion claim are: (1) the plaintiff’s ownership or right to possession of the property; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages. Conversion is a strict liability tort.” (Ibid.)

Importantly, “the foundation of the action rests neither in the knowledge nor the intent of the defendant” and “[t]herefore, questions of the defendant’s good faith, lack of knowledge, and motive are ordinarily immaterial.”

(Los Angeles Federal Credit Union v. Madatyan (2012) 209 Cal.App.4th 1383, 1387.)

“Money can be the subject of a conversion action if a specific, identifiable sum is involved.” (Ortega v. Toyota Motor Sales, USA, Inc. (S.D. Cal. 2008) 572 F.Supp.2d 1218, 1220.) However, “the simple failure to pay money owed does not constitute conversion.” (Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 284.) Similarly, “a mere contractual right of payment, without more, will not suffice.” (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 452.)

Rather, “[a] cause of action for conversion of money can be stated only where a defendant interferes with the plaintiff’s possessory interest in a specific, identifiable sum, such as when a trustee or agent misappropriates the money entrusted to him.” (Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 284.)

Here, Plaintiffs allege that Defendants “wrongfully acquired from Plaintiffs $175,000 in cash from the settlement proceeds derived from the Build Group, Inc. litigation (Los Angeles Superior Court Case No. 22LBCV00220 and Case No. 22LBCV00317).” This is an identifiable sum of money, which can be the subject of a conversion claim. Moreover, Plaintiffs are alleging that this payment was owed to Plaintiffs but was wrongfully distributed to Defendants. (FAC, ¶¶ 39-41.) This is sufficient to state a cause of action for conversion.

The Motion to Strike is DENIED as to this allegation.

4. FAC ¶70.b, page 16, lines 4-7, which state: “Tens of thousands of dollars in legal fees ANCA FUNDULEA and EUGEN FUNDULEA, as former owners of A1 QUALITY BLINDS, paid to A1 QUALITY BLINDS’s legal counsel, Schwartz Semerdjian law firm for the Build Group, Inc. litigation matters (Case No. 22LBCV00220 and Case No. 22LBCV00317).”

For the reasons discussed above, the Motion to Strike is DENIED as to this allegation.

5. FAC ¶70.c, page 16, line 8, which states: “EUGEN FUNDULEA’s California Contractor’s License, No. 1009294.”

The Motion is DENIED as to this allegation for the reasons discussed above regarding conversion. (See also Holistic Supplements, LLC v. Stark (2021) 61 Cal.App.5th 530, 552 [holding that certain government certificates and licenses can be converted and therefore subject to a claim for conversion.)

Moreover, Defendant relies on the Court taking judicial notice of the A1 Quality Blinds contractor’s license information available through the California Contractors License Board public online license records

“Courts can take judicial notice of the existence, content and authenticity of public records and other specified documents, but do not take judicial notice of the truth of the factual matters asserted in those documents.” (Dominguez v. Bonta (2022) 87 Cal.App.5th 389, 400, as modified (Jan. 6, 2023) [emphasis in original].) Based on this authority, the Court will not strike this allegation from the Complaint.

6. FAC ¶83, page 17, lines 20-21, which state: “acquiring 100% of the corporate shares of A1 QUALITY BLINDS from Plaintiffs through promissory fraud without paying in full for them.”

For the reasons discussed above, the Motion to Strike is DENIED as to this allegation.

7. FAC, ¶83, page 17, lines 21-22, which state: “stealing and converting $175,000 from Plaintiffs by rerouting and converting settlement proceeds.”

For the reasons discussed above, the Motion to Strike is DENIED as to this allegation.

8. FAC, ¶83, page 17 lines 22-24, which state: “by taking Plaintiff EUGEN FUNDULEA’s contractor’s license without permission or consent.”

For the reasons discussed above, the Motion to Strike is DENIED as to this allegation.

9. FAC, ¶110.c, page 21, lines 17-19, which state: “175,000 in cash from the settlement proceeds derived from the Build Group, Inc. litigation (Los Angeles Superior Court Case No. 22LBCV00220 and Case No. 22LBCV00317).

The Motion to Strike is DENIED as to this allegation. The Court notes that “[u]njust enrichment is not a cause of action, ... or even a remedy, but rather a general principle, underlying various legal doctrines and remedies.” (Bank of New York Mellon v. Citibank, N.A. (2017) 8 Cal.App.5th 935, 955, as modified (Mar. 1, 2017).)

Still, the “elements for a claim of unjust enrichment are receipt of a benefit and unjust retention of the benefit at the expense of another.” (Prakashpalan v. Engstrom, Lipscomb & Lack (2014) 223 Cal.App.4th 1105, 1132, as modified on denial of reh'g (Feb. 27, 2014).) “The theory of unjust enrichment requires one who acquires a benefit which may not justly be retained, to return either the thing or its equivalent to the aggrieved party so as not to be unjustly enriched.” (Ibid.) “It is not, strictly speaking, a theory of recovery, but an effect: the result of a failure to make restitution under circumstances where it is equitable to do so.” (Ibid.) “It is synonymous with restitution.” (Ibid.) “Ordinarily, restitution is required only if the benefits were conferred by mistake, fraud, coercion or request.’ ” (Ibid.)

This allegation puts Defendants on notice that Plaintiffs seek restitution for the “175,000 in cash from the settlement proceeds derived from the Build Group, Inc. litigation (Los Angeles Superior Court Case No. 22LBCV00220 and Case No. 22LBCV00317)” that Defendants received by “mistake, fraud, coercion or request.” The Motion to Strike is DENIED as to this allegation.

10. FAC, ¶110.d., page 21, lines 20-24, which state: “Tens of thousands of dollars in legal fees ANCA

FUNDULEA and EUGEN FUNDULEA, as former owners of A1 QUALITY BLINDS, paid to A1 QUALITY BLINDS’s legal counsel, Schwartz Semerdjian law firm for the Build Group, Inc. litigation matters (Case No. 22LBCV00220 and Case No. 22LBCV00317).

For the reasons discussed above, the Motion to Strike is DENIED as to this allegation.

11. FAC, ¶110.e., page 21, line 26, which states: “EUGEN FUNDULEA’s California Contractor’s License, No. 1009294.”

For the reasons discussed above, the Motion to Strike is DENIED as to this allegation.

Moving party to give notice.

106 Hamidi vs. Manheim Investments, Inc., 2020-01145159 Motion for Reconsideration – DENIED

Plaintiff Khalil Rahman Hamidi (“Plaintiff”) moves for reconsideration of the court’s 02/24/2026 order granting the motion for summary judgment filed by Defendants On Demand Staffing, Inc. (“On Demand”) and John Jeffers (“Jeffers”) (collectively, “Defendants”).

A motion for reconsideration must be: (1) brought before the same judge who made the order; (2) “made within 10 days after service upon the party of notice of entry of the order”; (3) based on “new or different facts, circumstances or law” than those before the court at the time of the original ruling; (4) supported by declaration stating the previous order, by which judge it was made, and the new or different facts, circumstances or law claimed to exist; and (5) made and decided before entry of judgment. (Code Civ. Proc., § 1008.)

A motion for reconsideration involves a two-step process. First, if the motion meets the requirements of § 1008 (as outlined above), the court grants reconsideration. Second, the court then proceeds to the merits of the motion—which may result in reaffirmation of the