Tazeroni vs. Mirbaz

Cross-Defendant’s Counsel also states that Cross- Complainant then filed a First Amended Cross- Complaint, but that “the deficiencies remain.” (See id., ¶¶ 3-4.)

Cross-Defendant’s Counsel does not identify any other efforts to meet and confer that were undertaken before filing this demurrer.

Here, Cross-Defendant failed to meet and confer in person, by telephone, or by video conference as required by Section 430.41(a).

In addition, Cross-Defendant failed to meet and confer again regarding the First Amended Cross- Complaint after Cross-Complainant filed an amended pleading.

Therefore, Cross-Defendant has failed to comply with the requirements of Section 430.41.

However, the matter has been fully briefed so that it appears unlikely that further meet and confer efforts would bear fruit.

Therefore, the court will consider the demurrer on the merits.

However, if Cross-Defendant fails to abide by the Civil Procedure Code in the future, that may delay consideration of Cross-Defendant’s motions, and the court may ignore Cross-Defendant’s filings or issue sanctions.

Standard for Demurrer

A demurrer challenges only the legal sufficiency of the affected pleading, not the truth of the factual allegations in the pleading or the pleader’s ability to prove those allegations. (Cundiff v. GTE Cal., Inc. (2002) 101 Cal.App.4th 1395, 1404-05.)

For this reason, the court will not decide questions of fact on demurrer. (See Berryman v. Merit Prop. Mgmt., Inc. (2007) 152 Cal.App.4th 1544, 1556.)

Instead, the court “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law . . . .” (Serrano v. Priest (1971) 5 Cal.3d

584, 591, citation omitted; see Blank v. Kirwan (1985) 39 Cal.3d 311, 318).

Therefore, the court will not consider facts that have not been alleged in the complaint unless they may be reasonably inferred from the matters alleged or are proper subjects of judicial notice. (Hall v. Great W. Bank (1991) 231 Cal.App.3d 713, 718 fn.7.)

However, “where facts appearing in attached exhibits or judicially noticed documents contradict, or are inconsistent with, the complaint's allegations, we must rely on the facts in the exhibits and judicially noticed documents.” (Jimenez vs. Mrs. Gooch’s Natural Foods Markets, Inc. (2023) 95 Cal.App.5th 645, 653.)

Although courts should take a liberal view of inartfully drawn pleadings, (see Code Civ. Proc., § 452), it remains essential that a pleading set forth the actionable facts relied upon with sufficient precision to inform the responding party of the matters that the pleading party is alleging, and what remedies or relief is being sought, (see Leek v. Cooper (2011) 194 Cal.App.4th 399, 413).

Bare conclusions of law devoid of any facts are insufficient to withstand demurrer. (Schmid v. City and County of San Francisco (2021) 60 Cal.App.5th 470, 481; see Code Civ. Proc., § 425.10, subd. (a).)

1st Cause of Action (Breach of Oral 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.)

For oral contracts, a party must allege that a promise was definite enough to “determine the scope of the duty and the limits of performance.” (Ladas v. Cal. State Auto. Ass’n (1994) 19 Cal. App. 4th 761, 770).

There must be a “meeting of the minds on all material points” for a contract to exist. (See Grove v. Grove Valve & Regulator Co. (1970) 4 Cal.App.3d 299, 312 [“The California law is clear

that there is no contract until there has been a meeting of the minds on all material points, despite the fact some terms have been agreed orally, or some action has been taken.”].)

It is not sufficient that the parties agree on “some of the terms.” (Bustamante v. Intuit, Inc. (2006) 141 Cal.App.4th 199, 215.) Nor is it enough that the “essential terms [are] sketched out, with their final form to be agreed upon in the future.” (Id. at p. 213.)

Here, the FAXC alleges that, in or around December 2023, Cross-Defendant purchased a 50% ownership interest in Ruby’s Diner Orange Depot, LLC from Cross-Complainant. (See FAXC, ¶¶ 7-9.)

The FAXC also pleads that, in or around November 2024, the parties entered into an oral agreement under which Cross-Defendant would purchase Cross-Complainant’s remaining 50% interest for $170,000, payable within 30 days. (See id., ¶¶ 11, 15.)

The FAXC asserts that the price was discounted because Cross-Defendant agreed to assume or pay outstanding debts of the company, except that Cross-Complainant would pay 50% of certain EDD and IRS liens and credit card debts from the sale proceeds. (See id., ¶¶ 16–17.)

The FAXC then alleges that Cross-Defendant failed and refused to pay the $170,000, leaving Cross- Complainant unable to pay the debts he agreed to cover and causing damages of at least $170,000. (See id., ¶¶ 18–20.)

Here, the FAXC alleges all the elements of the breach of contract cause of action, including that there was a meeting of the minds on all material points of the contract.

Cross-Defendant contends that the 1st Cause of Action fails because the FAXC does not specify how debts, offsets, accounting, reconciliation, or ownership transfer were to be handled.

However, Cross-Defendant cites to no authority for the proposition that the FAXC must plead the oral contract with that level of specificity.

It is sufficient the terms laid out in the complaint or cross-complaint “provide a basis for determining

the existence of a breach and for giving an appropriate remedy.” (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 811.)

The FAXC does exactly that by alleging that Cross- Defendant agreed to pay Cross-Complainant $170,000 for a 50% membership interest in the company and breached the oral agreement by failing to make payment.

Cross-Defendant also argues that the FAXC fails to allege Cross-Complainant’s performance or satisfaction of conditions precedent under the oral agreement.

Specifically, Cross-Defendant points to the fact that the FAXC does not allege that Cross-Complainant provided a full accounting, that all liabilities were disclosed, and that any conditions tied to debt reconciliation were satisfied.

With respect to the first two actions stated above, the FAXC does not contain any allegations that these were obligations or conditions precedent of the oral agreement. Thus, Cross-Complainant is not required to plead performance with respect to those actions.

With regard to the last action, Cross-Complainant may plead either performance or excuse for nonperformance.

Here, the FAXC asserts that “[b]ecause Cross- Complainant has not received the agreed upon sale price, he has been unable to pay any of the debts incurred by Ruby’s in 2024 that he agreed to pay.” (FAXC, ¶ 19.)

Reading the FAXC liberally, as the court must do, the FAXC adequately pleads excuse for nonperformance of Cross-Complainants obligations under the oral agreement.

Further, the FAXC alleges that Cross-Complainant agreed to sell his remaining 50% interest for $170,000, that payment was due within 30 days, and that Cross-Defendant failed to pay any amount. (See id., ¶¶ 15–20.)

The court may consider reasonable inferences from the facts alleged and it is a reasonable inference here that Cross-Complainant’s further performance

was excused by Cross-Defendant’s nonpayment of the amount due under the oral agreement.

Therefore, the court will overrule the demurrer to the 1st Cause of Action.

2nd Cause of Action (Fraud - Intentional Misrepresentation)

“’The elements of fraud, which gives rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.’” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638, quoting 5 Witkin, Summary of Cal. Law (9th ed. 1988) Torts, § 676, p. 778.)

Intentional misrepresentation is form of fraud, (Conte v. Wyeth, Inc. (2008) 168 Cal.App.4th 89, 101 fn.7), and the elements are nearly identical: “(a) misrepresentation, false representation, concealment, or nondisclosure; (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage,” (Charnay v. Cobert (2006) 145 Cal.App.4th 170, 184).

In this case, the FAXC alleges that, in or around November 2024, Cross-Defendant represented that he would pay Cross-Complainant $170,000 for his portion of the of the company, provided that Cross- Complainant would use part of that payment to pay Cross-Complainant’s share of debts owed to vendors, EDD, and the IRS. (See FAXC, ¶ 22.)

The FAXC then pleads that Cross-Defendant knew that Cross-Complainant lacked the funds to pay those debts without the buyout payment and was relying on Cross-Defendant’s payment to do so. (See id., ¶ 23.)

The FAXC also asserts that Cross-Defendant’s representations were false when made and that Cross-Defendant knew they were false because he had no intention of paying Cross-Complainant for his interest in the restaurant. (See id., ¶ 24.)

The FAXC alleges that Cross-Defendant used Cross- Complainant’s financial position to induce him to accept a reduced price for the 50% interest in the company, that Cross-Defendant intended for Cross-

Complainant to rely upon the misrepresentations, and that Cross-Complainant did rely on the misrepresentations because of the parties’ longstanding friendship. (See id., ¶¶ 25–27.)

Finally, the FAX pleads that Cross-Defendant’s misrepresentations caused Cross-Complainant to suffer harm, because among other things, Cross- Complainant was left unable to pay the agreed upon debts. (See id., ¶¶ 27–29.)

Cross-Defendant contends that the fraud claim merely restates the breach of contract claim.

However, the 2nd Cause of Action alleges that Cross-Defendant committed fraud to induce Cross- Complainant to enter into a contract, which is different and separate from the allegations that Cross-Defendant then breached that contract. (See Baker v. Superior Court (1983) 150 Cal.App.3d 140, 146 [explaining that “[The plaintiffs’] fraud in the inducement and breach of contract causes of action arise out of different obligations and different operative facts. [Defendants] Best, Chatham and Williams were obliged to deal honestly with the [plaintiffs] and to perform their contract with them. The fraud in the inducement of the remodeling contract allegedly perpetrated by [Defendants] Best, Chatham and Williams and [Defendant] Best's later breach violated those separate obligations and also involved separate acts at different points in time.”].)

Pleading Fraud with Specificity

Cross-Defendant also argues that the 2nd Cause of Action fails because it is not pleaded with the required specificity.

“In California, fraud must be pled specifically . . . .” (Lazar vs. Superior Court (1996) 12 Cal.4th 631, 645; see also Linear Technology Corp. v. Applied Materials, Inc. (2007) 152 Cal.App.4th 115, 132 [“Fraud must be pleaded with specificity.”].)

“Causes of action for intentional and negligent misrepresentation sound in fraud and, therefore, each element must be pleaded with specificity.” (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1166, overruled on other grounds, Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 919-920, 948, fn.12.)

As the Court of Appeal has explained:

This means: (1) general pleading of the legal conclusion of fraud is insufficient; and (2) every element of the cause of action for fraud must be alleged in full, factually and specifically, and the policy of liberal construction of pleading will not usually be invoked to sustain a pleading that is defective in any material respect.

(Wilhelm v. Pray, Price, Williams & Russell (1986) 186 Cal.App.3d 1324, 1331.)

“The specificity requirement means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made, and, in the case of a corporate defendant, the plaintiff must allege the names of the persons who made the representations, their authority to speak on behalf of the corporation, to whom they spoke, what they said or wrote, and when the representation was made.” (West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 793.)

However, “the requirement of specificity is relaxed when the allegations indicate that ‘the defendant must necessarily possess full information concerning the facts of the controversy’ or ‘when the facts lie more in the knowledge of the opposite party.’” (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 158, quoting Bradley v. Harford Acc. & Indem. Co (1973) 30 Cal.App.3d 818, 825 and Turner v. Milstein (1951) 103 Cal.App.2d 651, 658.)

Here, it is true that the FAXC does not provide every detail regarding how, when, where, to whom, and by what means the representations were made to Cross-Complainant.

However, this is information that should be within the knowledge of the Cross-Defendant and Cross- Defendant does not contend otherwise.

Further, the FAXC pleads specific facts establishing the falsity of the representations when made, Cross-Defendant’s knowledge of that falsity, and Cross-Complainant’s reasonable reliance on – namely, that Cross-Defendant knew that Cross- Complainant lacked the funds to pay the debts without the buyout payment, that Cross-Defendant

had no intention of paying Cross-Complainant and did not payment Cross-Complainant, and that Cross-Complainant relied upon the representations due to this financial position and friendship with Cross-Defendant.

Although the fraud cause of action could have been plead with greater specificity, the amount of specificity contained in the FAXC is just barely sufficient.

Thus, the court will overrule the demurrer to the 2nd Cause of Action.

Cross-Complainant shall give notice of this ruling.

2 Planet Beauty, Inc. Demurrer vs. New Receiptco Opco LLC Defendant New Receiptco Opco, LLC dba Domtar’s Demurrer to Plaintiff Planet Beauty, Inc.’s Complaint is taken OFF CALENDAR as moot. 30-2026- 01542120 Pending Action

Defendant New Receiptco Opco, LLC dba Domtar demurs to all causes of action of the Complaint filed by Plaintiff Planet Beauty, Inc.

Amending the Complaint Moots the Demurrer

A party may amend its complaint once without leave of the court at any time before the answer or demurrer is filed, or after a demurrer is filed but before the demurrer is heard if the amended complaint is filed and served no later than the date for filing an opposition to the demurrer. (Code Civ. Proc., § 472.)

In addition, “[t]he filing of [an] amended complaint render[s] [a] demurrer moot since ‘an amendatory pleading supersedes the original one, which ceases to perform any function as a pleading.’” (Sylmar Air Conditioning v. Pueblo Contracting Services, Inc. (2004) 122 Cal.App.4th 1049, 1054, quoting Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 884.)

When a plaintiff files an amended complaint in response to a demurrer, the demurrer should be taken off calendar since the