Interface Rehab, Inc. vs. 4545 Shelley Court Opco, LLC

“‘[I]f upon a consideration of all the facts stated it appears that the plaintiff is entitled to any relief . . ., the complaint will be held good, although the facts may not be clearly stated, or may be intermingled with a statement of other facts irrelevant to the cause of action shown, or although the plaintiff may demand relief to which he is not entitled under the facts alleged.’” (Chase Chemical Co. v. Hartford Accident & Indemnity Co. (1984) 159 Cal.App.3d 229, 242, quoting Matteson v. Wagoner (1905) 147 Cal.739, 742.) “Erroneous or confusing labels attached by the inept pleader are to be ignored if the complaint pleads facts which would entitle the plaintiff to relief.” (Saunders v.

Cariss (1990) 224 Cal.App.3d 905, 908; see also Martinez v. City of Clovis (2023) 90 Cal.App.5th 193, 262 [considering claim under different label because “courts examine the entire complaint and are not limited by the labels and structure used in the pleading”].)

A complaint “ordinarily is sufficient if it alleges ultimate rather than evidentiary facts,” as “a plaintiff is required only to set forth the essential facts with particularity sufficient to acquaint a defendant with the nature, source, and extent of the plaintiff’s cause of action.” (Thomas v. Regents of University of Cal. (2023) 97 Cal.App.5th 587, 610-611, internal quotes & citations omitted.) “A complaint will be upheld ‘so long as the pleading gives notice of the issues sufficient to enable preparation of a defense.’” (Id. at p. 611.)

Moreover, “[t]he particularity required in pleading facts depends on the extent to which the defendant in fairness needs detailed information that can be conveniently provided by the plaintiff; less particularity is required where the defendant may be assumed to have knowledge of the facts equal to that possessed by the plaintiff.” (Doheny Park Terrace Homeowners Assn., Inc. v. Truck Ins. Exchange (2005) 132 Cal.App.4th 1076, 1099.) “There is no need to require specificity in the pleadings because ‘modern discovery procedures necessarily affect the amount of detail that should be required in a pleading.’” (Ibid.)

1st cause of action for breach of contract - OVERRULED. Defendants first demur to this cause of action on the ground that “[a]s established in Otworth v. Southern Pac. Transportation Co. (1985) 166 Cal.App.3d 452, a written contract must either be set forth verbatim in the complaint or attached and incorporated by reference,” and here, “Plaintiff simply failed to set forth verbatim the terms of the contract or attach the written contracts at issue to the complaint.” (Dem. P&A, p. 5.) Therefore, Defendants contend Plaintiff has failed to state facts to constitute a cause of action under CCP section 430.10(e). (Id.)

In its opposition, Plaintiff correctly points out that Otworth has been implicitly overruled by the California Supreme Court in Construction Protective Services, Inc. v. TIG Specialty Insurance Co. (2002) 29 Cal.4th 189, 198-199, which held that a written contract’s terms need not be pleaded precisely in haec verba; instead, “[i]n an action based on a written contract, a plaintiff may plead the legal effect of the contract rather than its precise language.” (See Miles v. Deutsche Bank National Trust Co. (2015) 236 Cal.App.4th 394, 402 [recognizing that Construction Protective Services implicitly overruled Otworth v. Southern Pacific Transportation Co. (1985) 166 Cal.App.3d 452, 459 and Wise v. Southern Pacific Co. (1963) 223 Cal.App.2d 50, 59 to the extent they require verbatim pleading or attaching copy of contract].)

Here, as Defendants acknowledge, the complaint alleges:

34. By and through their common ownership, in 2024 and 2025 the Facility Defendants each entered written contracts with Interface, whereby Interface would provide rehabilitation services at their facilities, for which the Facility Defendants would pay. These written contracts call for attorneys’ fees to be awarded to the prevailing party in any litigation over the contracts.

(Dem. P&A, p. 5, citing Compl., ¶ 34.) These allegations sufficiently plead the legal effect of the contract to put Defendants on notice of the issues and to enable Defendants’ preparation of a defense.

In reply, Defendants concede Plaintiff may plead the legal effect of the agreement in lieu of quoting it verbatim or attaching it to the complaint, but Defendants contend that Plaintiff has failed to “allege which specific entity entered into which agreement, for what services, and for what amounts.” (ROA #379 [Reply], pp. 2-3.) However, as Defendants also acknowledge, ¶ 34 of the complaint adequately alleges that “the Facility Defendants each entered [into] written contracts with Interface” (emphasis added). This is sufficient to put Defendants on notice that Plaintiff alleges each Defendant entered into a contract with Interface for Interface to provide rehabilitation services at each Defendant’s facility. No further specificity is required at this stage, and discovery is available to determine additional details.

Defendants also demurs to this cause of action as “uncertain” under CCP section 430.10(f). Defendants contend that it is unclear from the complaint how many contracts were entered into between the parties, and “[t]he naming of all the defendant(s) under this cause of action also renders the complaint ‘uncertain’, which includes ambiguous and unintelligible . . . .” (Dem. P&A at p. 5.)

Uncertainty is a disfavored ground for demurrers because “ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal.App.4th 612, 616.) Demurrers for uncertainty should be “granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (A.J. Fistes Corp. v. GDL Best Contractors, Inc. (2019) 38 Cal.App.5th 677, 695, internal quotes omitted.) Also, a “‘demurrer for uncertainty will not lie where the ambiguous facts alleged are presumptively within the knowledge of the demurring party.’” (Bacon v. Wahrhaftig (1950) 97 Cal.App.2d 599, 605, quoting Merlino v. West Coast Macaroni Mfg. Co. (1949) 90 Cal.App.2d 106, 108.)

Here, the complaint is not so incomprehensible that Defendants cannot reasonably respond.

2nd cause of action for account stated - OVERRULED. Defendants demur to this cause of action for failure to state facts to constitute a cause of action because:

[i]t is well-established in California that a debt which is predicated upon the breach of the terms of an express contract cannot be the basis of an account stated. Moore v. Bartholomae Corp. (1945) 69 Cal.App.2d 477-478. Nonetheless, Plaintiff, in its second cause of action. incorporates all prior allegations contained within the Complaint, including its count for breach of, among other things, the written agreements. Accordingly, Plaintiff cannot both allege its first cause of action for breach of contract and its equally deficient second cause of action for account stated.

(Dem. P&A, pp. 5-6.)

The court in Moore cited Rio Linda Poultry Farms v. Fredericksen (1932) 121 Cal.App. 433, 435 to hold that “a debt which is predicated upon the breach of the terms of an express contract cannot be the basis of an account stated.” (Moore, supra, at p. 477.) In Rio Linda, the court explained the rationale behind this rule:

An account stated has been defined as an agreed balance of accounts; an account which has been examined and accepted by both parties.

It is not every debt which can form the basis of an account stated or an action thereon. It cannot become a substitute for an action of debt upon a specialty, such as a promissory note. In such a case no subsequent statement of the amount due thereon, although agreed to by the payer, can supersede the special promise so as to form the basis of an action as upon an account stated to recover the original debt. The written promise being higher evidence of the debt and the debtor being already bound thereby, there could be no necessity for a resort to a subsequent statement and promise to pay.

Moreover, the debtor being already completely bound for a specified sum, there is no element of uncertainty to be settled, and no difficulty in ascertaining the balance upon conflicting claims, which could constitute a consideration for a new promise to pay, and therefore such promise would be a nudum pactum.

(Rio Linda, supra, 121 Cal.App. at pp. 435-436, internal citations omitted, emphasis added.)

Here, according to the complaint, the parties entered into written contracts whereby Plaintiff would provide services for which Defendants would pay. (Compl., ¶ 34.) No specified sum is alleged to be stated in the applicable contracts. Instead, Plaintiff alleges it sent invoices to Defendants for the amounts due each month based upon the services provided by Plaintiff. (See id. at ¶¶ 36-38.) Plaintiff also alleges that “[w]ithin the last four years, Defendants became indebted to Interface because accounts were stated in writing between Interface and Defendants in which it was agreed that Defendants were indebted to Interface.” (Id. at ¶ 48, emphasis added].)

The Court must accept these allegations as true for purposes of the demurrer. Moreover, these allegations are sufficient to support an account stated cause of action. (Farmers Insurance Exchange v. Zerin (1997) 53 Cal.App.4th 445, 459-460, citing Pike v. Zadig (1915) 171 Cal. 273, 276-277 [“In California, it has long been settled the allegation of claims using common counts is good against special or general demurrers” and “may be stated in conclusional fashion”]; Western Title Insurance & Guaranty Co. v. Bartolacelli (1954) 124 Cal.App.2d 690, 694 [common counts can “state[] simply a conclusion of law and disclose none of the facts upon which it is predicated”].)

3rd cause of action for open book account - OVERRULED. In their opening brief, Defendants contend that this is because “the breach of contract clause is defective and subject to demurrer, making the common counts also

subject to demurrer” because “[t]he common counts cause of action . . . is simply derivative and duplicative of the breach of contract cause of action.” (Dem. P&A, pp. 3, 6.) However, since the recommendation is to overrule the demurrer as to the 1st cause of action of action for breach of contract, it does not follow that the open book account cause of action must also fail as a merely “derivative” claim.

In Defendants’ reply, Defendants raise a different argument:

“An express contract, which defines the duties and liabilities of the parties, whether it be oral or written, is not, as a rule, an open account.” Eloquence Corp. v. Home Consignment Ctr., 49 Cal.App.5th 655, 665 (2020). “This general rule has been applied in cases where money is owed pursuant to the terms of an express contract.” Id.

Here, the Agreements are written contracts regarding Defendants’ obligation to pay. Therefore, where Plaintiff alleges an express contract governing the same subject matter and does not plead in the alternative, the open book account cause of action is improperly duplicative and subject to demurrer.

(Reply at p. 5.)

“An open book account for money due” is also a type of “common count.” (CCP, § 425.30, subd. (a)(2).) “A book account is a detailed statement which constitutes the principal record of one or more transactions between a debtor and a creditor arising out of a contract or some fiduciary relation, and shows the debits and credits in connection therewith. The creditor must keep these records in the regular course of its business and in a reasonably permanent form, such as a book or card file. A book account is open where a balance remains due on the account.” (Professional Collection Consultants v. Lujan (2018) 23 Cal.App.5th 685, 690-691, internal quotes & citations omitted.)

Again, it is well-established that common counts are excepted from fact pleading requirements. (Farmers, supra, 53 Cal.App.4th at pp. 459-460; Western Title Insurance, supra, 124 Cal.App.2d at p. 694.) The only essential allegations of a common count, which may be stated “in conclusional fashion” are “(1) the statement of indebtedness in a certain sum, (2) the consideration, i.e., goods sold, work done, etc., and (3) nonpayment.” (Farmers, supra, 53 Cal.App.4th at p. 460.) Thus, common counts are generally not subject to general demurrers for failure to state facts sufficient to constitute a cause of action or special demurrers for uncertainty. (Id., citing Pike, supra, 171 Cal. at pp. 276-277; Smith v. Randall (1942) 51 Cal.App.2d 195, 197.)

The only exception is when a common count is either (1) contradicted by other facts alleged in the same cause of action or (2) based on the same facts as a specific cause of action and pleaded as an alternative way of seeking the same relief demanded in that specific cause of action, and that cause of

action is demurrable. (Farmers, supra, at 53 Cal.App.4th p. 460; McBride v. Boughton (2004) 123 Cal.App.4th 379, 394.)

Here, Plaintiff’s open book account claim is not necessarily contradicted by Plaintiff’s allegations of an express contract, particularly since Plaintiff also alleges in ¶ 52 of the complaint that “[w]ithin the last four years, Defendants became indebted to Interface on an open book account for money due.” Moreover, the court, “based on the principle that a party may plead alternative theories that are inconsistent with one another, cannot conclude that the complaint stated one theory to the exclusion of the other”; rather, the court may conclude that the allegations of the complaint “are sufficient to present both . . . theor[ies].” (Mendoza v. Continental Sales Co. (2006) 140 Cal.App.4th 1395, 1403.)

Further, as discussed above, Plaintiff has properly alleged a breach of contract cause of action. Therefore, Plaintiff also has not based its open book account cause of action on the same facts of a specific cause of action (breach of contract) that is demurrable.

4th and 5th causes of action for quantum meruit and unjust enrichment - OVERRULED. Plaintiff’s complaint pleads both a 4th cause of action for “quantum meruit” and a separate 5th cause of action for “unjust enrichment.” (Compl., p. 10.)

Defendants demur to these cause of action on the grounds that unjust enrichment is not a proper standalone cause of action but is instead a basis for restitution. (Dem. P&A at pp. 7-8.)

Technically, “[t]here is no cause of action in California labeled ‘unjust enrichment.’” (City of Oakland v. Oakland Raiders (2022) 83 Cal.App.5th 458, 477; see also McBride v. Boughton (2004) 123 Cal.App.4th 379, 387, internal quotes, ellipses, & citations omitted [“Unjust enrichment is not a cause of action, however, or even a remedy, but rather a general principle, underlying various legal doctrines and remedies.”].)

However, “[u]njust enrichment is synonymous with restitution. There are several potential bases for a cause of action seeking restitution. For example, restitution may be awarded in lieu of breach of contract damages when the parties had an express contract, but it was procured by fraud or is unenforceable or ineffective for some reason. Alternatively, restitution may be awarded where the defendant obtained a benefit from the plaintiff by fraud, duress, conversion, or similar conduct. In such cases, the plaintiff may choose not to sue in tort, but instead to seek restitution on a quasi-contract theory.” (Id., internal quotes and citations omitted.)

Moreover, on a demurrer, courts also “ignore erroneous or confusing labels if the complaint pleads facts which would entitle the plaintiff to relief.” (McBride, supra, 123 Cal.App.4th at p. 387.)

“The elements for a claim of unjust enrichment are receipt of a benefit and unjust retention of the benefit at the expense of another. 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.” (Lyles v. Sangadeo-Patel (2014) 225 Cal.App.4th 759, 769, internal quotes & citations omitted.)

Here, Plaintiff has sufficiently alleged that Plaintiff performed services for Defendants at their request, yet Defendants have failed to pay Plaintiff for those services, thereby unjustly enriching Defendants. Although the complaint does not specify that the 4th and 5th causes of action are pleaded as an alternative to Plaintiff’s other theories, the complaint can nevertheless be fairly interpreted as doing so. (See Mendoza, supra, 140 Cal.App.4th at p. 1403; see also id. at p. 1402 [“When a pleader is in doubt about what actually occurred or what can be established by the evidence, the modern practice allows that party to plead in the alternative and make inconsistent allegations”].)

Additionally, although Defendants’ notice of demurrer and demurrer state that Defendants also demur to these two causes of action on the ground of uncertainty, Defendants’ memorandum of points and authorities fails to address how this cause of action is uncertain. A demurrer for uncertainty must “specify in what particulars the complaint was uncertain.” (Fenton v. Groveland Community Services Dist. (1982) 135 Cal.App.3d 797, 809; see also Niko v. Foreman (2006) 144 Cal.App.4th 344, 368 [rejecting party’s arguments made “without supporting legal or factual analysis”]; Badie v.

Bank of America (1998) 67 Cal.App.4th 779, 784-785 [when a party “fails to raise a point, or asserts it but fails to support it with reasoned argument and citations to authority,” the point is “waived”]; City of Monterey v. Carrnshimba (2013) 215 Cal.App.4th 1068, 1099 [the court “therefore need not consider undeveloped challenges”]; Cal. Rules of Court (CRC), rules 3.1113(a) [“court may construe absence of memorandum as an admission that the motion . . . is not meritorious and cause for its denial”], 3.1113(b) [a memorandum of points and authorities “must contain . . . a concise statement of the law . . . and a discussion of the statutes, cases and textbooks cited in support of the position advanced”].)

2. Motion to Strike Defendants’ motion to strike portions of Plaintiff’s complaint is DENIED. (Code Civ. Proc. [CCP], § 436, subd. (a).)

Upon a motion made pursuant to CCP section 435, the court may strike “any irrelevant . . . matter inserted in any pleading.” (CCP, § 436, subd. (a).)

A motion to strike is the proper vehicle for attacking a claim for damages where the claim sued upon does not support such an award. (See Commodore Home Systems, Inc. v. Super. Ct. (1982) 32 Cal.3d 211, 214- 215.)

Defendants move to strike the following 5 items from the complaint because they are irrelevant:

1. “Attorneys’ fees”, (Compliant at ¶ 46).

2. “Interface in entitled to attorneys’ fees under the contracts according to proof.” (Complaint at ¶ 50). 3. “Interface in entitled to attorneys’ fees under the contracts according to proof.” (Complaint at ¶ 60). 4. “Interface in entitled to attorneys’ fees under the contracts according to proof.” (Complaint at ¶ 65). 5. “For reasonable attorneys’ fees and costs according to proof pursuant to the terms of the respective agreements and Civil Code section 1717.5.” Page [11], “Relief Requested,” Section C.

Defendants contend that these 5 items constitute “immaterial allegations[s]” under CCP section 431.10(b)(3) because they are “[a] demand for judgment requesting relief not supported by the allegations of the complaint,” and CCP section 431.10(c) provides that “[a]n ‘immaterial allegation’ means ‘irrelevant matter’ as that term is used in Section 436.”

Defendants’ primary argument is the same as Defendants’ argument in support of their demurrer as to the complaint’s 1st cause of action for breach of contract—namely, that “Plaintiff generally pleads that somewhere in the contracts (unclear which ones) there is an attorney’s fees provision. However, the paragraph this language exists is unclear. As stated above, and in Defendant’s Demurrer, the Complaint has failed to properly identify attorneys’ fees provision in the contract and thus this motion must be granted.” (Mot. P&A at p. 2.)

However, as discussed above, Plaintiff has adequately pleaded that the relevant contracts contain attorneys’ fees provisions. (Compl., ¶ 34 [“These written contracts call for attorneys’ fees to be awarded to the prevailing party in any litigation over the contracts.”].) Again, “[i]n an action based on a written contract, a plaintiff may plead the legal effect of the contract rather than its precise language.” (Construction Protective Services, Inc. v. TIG Specialty Insurance Co. (2002) 29 Cal.4th 189, 198-199; see also Miles v. Deutsche Bank National Trust Co. (2015) 236 Cal.App.4th 394, 402 [recognizing that Construction Protective Services implicitly overruled Otworth v. Southern Pacific Transportation Co. (1985) 166 Cal.App.3d 452, 459 and Wise v. Southern Pacific Co. (1963) 223 Cal.App.2d 50, 59 to the extent they require verbatim pleading or attaching copy of contract].)

Also, as Plaintiff points out in opposition, “Plaintiff has also alleged the recovery of attorney’s fees pursuant to statute and specifically cited to Civil Code section 1717.5 which allows for the recovery of attorneys fees on certain common count allegations. Defendants’ Motion to Strike does not address that request in any fashion.” (Opp. at p. 4.)

Defendants’ reply then belatedly seeks to argue that Plaintiff’s complaint fails to adequately allege attorneys’ fees under CCP section 1717.5 because that section “precludes an award of attorneys’ fees if there is a written agreement between the parties.” (Reply at p. 3, citing CCP, § 1717.5, subd. (a)(4).) Defendants contend that “there is no allegation that the agreements between the parties invoke Section 1717.5.” (Id.)

At bottom, there are cases holding that since there is no need to plead attorney’s fees, there is even less need to strike them. (See Snatchko v. Westfield LLC (2010) 187 Cal.App.4th 469, 497 [“As there was no requirement they be pled at all, the trial court erred in striking [plaintiff’s] prayer for attorney fees based on a failure to adequately plead their basis”]; Chinn v. KMR Property Management (2008) 166 Cal.App.4th 175, 194]“Attorney fees based on a contract provision do not need to be demanded in the complaint” because they are recoverable under section 1033.5, subdivision (a)(10) as an element of costs]; Faton v.

Ahmedo (2015) 236 Cal.App.4th 1160, 1169 [“statutory attorney fees need not be pleaded and proved at trial and may properly be awarded after entry of judgment”]; see also Civ. Code, § 3532 [“The law neither does nor requires idle acts.”]; Camenisch v. Superior Court (1996) 44 Cal.App.4th 1689, 1699 [trial court did not err in refusing to strike prayer for attorney’s fees because court is “not required to strike the prayer before [the plaintiff] has had a full opportunity to determine, through discovery, whether a basis for recovery exist”].)

Plaintiff shall give notice of all of the above. 106 Ramirez De Santos vs. S.K.B. Corporation

2024-01386790 Motion for Final Approval

The court has reviewed and considered the papers filed in support of plaintiff’s motion for final approval of a $2,250,000 class action and PAGA settlement. Upon submission of a revised proposed order, as explained below, the court will grant the motion as follows:

$6,000.00 for enhancement award to plaintiff;

$675,000.00 for attorneys’ fees;

$ 18,210.20 for litigation costs;

$11,500.00 for settlement administration costs; and

$60,000.00 total PAGA penalties ($39,000.00 to the LWDA).

Plaintiff to submit a revised proposed order reflecting the above disbursements and all revisions identified below. Plaintiff must also submit a redline version showing all changes.

1. The left margin is missing a vertical line to the right of the line numbers on pages 2-6. ROA 125.

2. Add the ROA number for the settlement amendment. ROA 125 at 1.

3. Paragraph 20 should include the “Aggrieved Employees,” and also state that any unclaimed funds will be sent in the name of the Class Member and/or Aggrieved Employee.

The final accounting hearing is scheduled for June 24, 2027 at 2:00 p.m. in Department CX102. Plaintiff shall submit a final accounting report at least 16 court days before the final accounting hearing regarding the status of the settlement administration. The final report must include all information necessary for the court to determine