TREMIN CORPORATION VS. MICHAEL HARBOUR, ET AL.

July 14, 2026 Law and Motion Calendar PAGE 24 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ provide evidence that subcontractors and material suppliers were paid, and then stopped work prior to completion leaving the property in a state of disrepair.

On May 15, 2026, Cross-Defendants Tremin Corporation and Derek Gray demurred to all five causes of action raised in the cross-complaint for failing to allege any facts regarding why Gray is individually liable for any causes of action and because the Cross-Complaint in its entirety fails to allege a sufficient factual basis pursuant to Code of Civil Procedure section 430.10, subdivision (e) for any of the causes of action. Additionally, the cross-complaint fails to sufficiently allege the fraud and negligent misrepresentation causes with the specificity required by the law. Lastly, the negligent misrepresentation claim fails because it is based on a promise to perform in the future and not a past or existing material fact. (See Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 158.) Cross defendants contend that demurrer should be sustained without leave to amend.

The motion is opposed that Gray not merely an agent employed by the corporation; he is the responsible managing officer, without whom the corporation could not engage in the construction business, and he was the one who made the misrepresentations and committed the torts alleged in the Cross-Complaint and that a sufficient factual basis for each cause of action has been pled.

B. Legal Standard

“[I]t is well settled that a general demurrer admits the truth of all material factual allegations in the complaint [citation]; that the question of plaintiff’s ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court [citations]; and that plaintiff need only plead facts showing that he may be entitled to some relief [citation].” (John's Grill, Inc. v. The Hartford Financial Services Group, Inc. (2024) 16 Cal.5th 1003, 1013 [quoting Alcorn v.

Anbro Engineering, Inc. (1970) 2 Cal.3d 493, 496].) A court reviewing a demurrer accepts as true the facts alleged in the complaint as well as those of which it may take judicial notice (Id. at 1008, citing Blank v. Kirwan (1985) 39 Cal.3d 311, 318), but does not “assume the truth of contentions, deductions or conclusions of law.” (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 967.) Rather, the “demurrer tests the sufficiency of the plaintiff’s complaint, i.e., whether it states facts sufficient to constitute a cause of action upon which relief may be based.” (Villarroel v.

Recology, Inc. (2023) 97 Cal.App.5th 762, 772, quoting McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1469.) Courts “assume the truth of the properly pleaded factual allegations, facts that reasonably can be inferred from those expressly pleaded, and matters of which judicial notice has been taken.” (Fremont Indemnity Co v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 111.) “All that is required of a plaintiff, as a matter of pleading ... is that his complaint set forth the essential facts of the case with reasonable precision and with sufficient particularity to acquaint the defendant with the nature, source and extent of his cause of action.” (Rannard v.

Lockheed Aircraft Corp. (1945) 26 Cal.2d 149, 156-157 [Citation and internal quotations omitted].)

July 14, 2026 Law and Motion Calendar PAGE 25 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ C.

Discussion

Initially, the Court finds the parties satisfied their meet and confer requirement but were unable to reach a resolution. (Declaration of Patrick J. Whitethorn iso Demurrer, ¶ 5.)

First Cause of Action: Violation of Business & Professions Code, section 7159

The cross-complaint alleges Cross-Defendants violated each and every one of the requirements of California Business & Professions Code Section 7159 (section 7159) in at least the following ways:

a. Failing to provide a written contract; b. Failing to provide a fixed price for the work of construction; c. Failure to provide a detailed payment schedule for the work; d. Failing to provide a start of estimated completion date; e. Failing to provide for a change order process; f. Failing to obtain written subcontracts; g. Billing for work not performed and for materials not delivered to the site; h. Obtaining deposits in excess of $1,000; i. Failing to adequately supervise and manage the project; j. Failing to complete the project; and k. Charging excessive labor rates and subcontractor markup.

(Cross-Defendant’s Request for Judicial Notice, Ex. A, Cross-Complaint “CC” ¶ 23.)

Business and Professions Code section 7159 requires that home improvement contracts between a contractor and owner for work upon a building for repair or remodeling where the aggregate contract price exceeds $500 shall be in writing. The statute applies to “ ‘home improvement contracts' between a contractor and an ‘owner or tenant’ for ‘work upon a building or structure for proposed repairing [or] remodeling’ where the aggregate contract price exceeds $500.” (Hinerfeld-Ward, Inc. v. Lipian (2010) 188 Cal.App.4th 86, 91.)

None of the cases the parties cite are directly on point and the parties do not analyze whether section 7159 creates a private cause of action. Cross-Defendants’ case, Swickheimer v. King (1971) 22 Cal.App.3d 220, holds that other sections of the Business & Professions Code do not state a cause of action, but Cross-Defendants do not explain how the reasoning in the case extends to section 7159, a different statute. Cross-complainants’ cases stand for the proposition that a contractor can collect, under certain circumstances, based upon an oral contract notwithstanding section 7159.

The cases did not address whether a private right of action existed. In the Court’s experience, section 7159 is used as a defense by a homeowner to a suit by a contractor for unpaid amounts under the contract. The parties do not cite, and the Court is not aware of any case deciding the issue of whether section 7159 provides a private right of action for affirmative relief.

July 14, 2026 Law and Motion Calendar PAGE 26 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ As our Supreme Court has explained:

A violation of a state statute does not necessarily give rise to a private cause of action. Instead, whether a party has a right to sue depends on whether the Legislature has “manifested an intent to create such a private cause of action” under the statute. Such legislative intent, if any, is revealed through the language of the statute and its legislative history.

A statute may contain “ ‘clear, understandable, unmistakable terms,’ ” which strongly and directly indicate that the Legislature intended to create a private cause of action. For instance, the statute may expressly state that a person has or is liable for a cause of action for a particular violation. Or, more commonly, a statute may refer to a remedy or means of enforcing its substantive provisions, i.e., by way of an action. If, however, a statute does not contain such obvious language, resort to its legislative history is next in order.

(Lu v. Hawaiian Gardens Casino, Inc. (2010) 50 Cal.4th 592, 596–597 [citations omitted].)

Following this analytical framework, on the face of the statute, there is no language expressly stating that a homeowner or other aggrieved party has a cause of action for a contractor's violation of its requirements and the statute also does not refer to any remedy or means of enforcing its provisions by way of a private action. The Court does not have the Legislative History.

Since it is Cross-Complainants’ burden to show they can state a cause of action under section 7159 and that showing has not yet been made, the Court SUSTAINS with leave the demurrer to this cause of action. Further research, especially into the Legislative history, may support Cross- Complainants’ position. This ruling is not to preclude Cross-Complainants from arguing noncompliance, as set forth in the case law, assuming that defense has been properly pled.

Second Cause of Action: Violation of Business & Professions Code, section 17200

“California’s unfair competition law (UCL) ([Business & Professions Code] § 17200 et seq.) defines ‘unfair competition’ to mean and include “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by [the false advertising law (§ 17500 et seq.)].’ (§ 17200.) The UCL's purpose is to protect both consumers and competitors by promoting fair competition in commercial markets for goods and services. (Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 110, 101 Cal.Rptr. 745, 496 P.2d 817.) [¶]The UCL’s scope is broad.

By defining unfair competition to include any “unlawful ... business act or practice” (§ 17200, italics added), the UCL permits violations of other laws to be treated as unfair competition that is independently actionable. (Cel–Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180, 83 Cal.Rptr.2d 548, 973 P.2d 527.)” (Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 949 (Kasky).) Fraudulent practices extend beyond those covered by the common law tort and include any practices that are likely to deceive members of the public. (Buller v.

Sutter Health (2008) 160 Cal.App.4th 981, 986.) The UCL may only be privately enforced “by a person who has suffered

July 14, 2026 Law and Motion Calendar PAGE 27 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ injury in fact and has lost money or property as a result of the unfair competition.” (Bus. & Prof. Code § 17204.)

The cross-complaint bases the UCL claim on the violation of Business & Professions Code 7159 by engaging in the conduct that is a violation of that section as described in the first cause of action. (CC ¶ 26.)

Cross-defendants contend that section 7159 cannot form the basis for the UCL claim because a violation of section 7159 is not an unlawful act. However, the failure to comply with section 7159 is a violation of the law and even if it just subjects the cross-defendants to discipline with the contractor’s board, the statute can serve as the basis for a cause of action. (Kasky, supra, 27 Cal.4th at p. 949-950; Bus. & Prof.C. §§ 7.5 et seq. (TRG (Oct. 2025 update) [and cases cited therein].)

The cross-complaint alleges that both cross-defendants committed the unlawful acts and thus both can be held liable.

Accordingly, demurrer as to the second cause of action for unfair business practices as to both cross-defendants is OVERRULED. The court notes, however, that the cause of action seeks damages, which are not allowed under the UCL—only restitution or injunction are allowed. (Kasky, supra, 27 Cal.4th at p. 950.) Since cross-defendants did not raise this argument, the court does not consider it for ruling on this demurrer, but to bring it to the parties attention to avoid unnecessary motion practice in the future.

Third Cause of Action: Fraud

“The elements of intentional misrepresentation ‘are (1) a misrepresentation, (2) knowledge of falsity, (3) intent to induce reliance, (4) actual and justifiable reliance, and (5) resulting damage.’ (Chapman v. Skype Inc. (2013) 220 Cal.App.4th 217, 230–231 [162 Cal.Rptr.3d 864].).” (Aton Center, Inc. v. United Healthcare Ins. Co. (2023) 93 Cal.App.5th 1214, 1245.)

Fraud must be alleged with sufficient specificity for defendant to fully understand the nature of the charge. (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.) Generally, such specificity requires pleading facts that “show how, when, where, to whom, and by what means the representations were tendered.” (Ibid.) Less specificity, however, is required then the defendant “must necessarily possess full information concerning the facts of the controversy. (Tenet Healthsystem Desert, Inc. v. Blue Cross of California (2016) 245 Cal.App.4th 821, 838; see also Committee On Children's Television, Inc. v.

General Foods Corp. (1983) 35 Cal.3d 197, 217; Tarmann v. State Farm Mutual Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 158.) Further, a single representation is sufficient to support a fraud claim. (OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 854; Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1248.)

Cross-Defendants contend that the cross-complaint lacks the requisite specificity regarding when and who made misrepresentations about the project. The cross-complaint alleges that Cross-

July 14, 2026 Law and Motion Calendar PAGE 28 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ Defendants represented in 2021 that they would value engineer the project and materially reduce costs. (CC ¶ 30.) It also alleges that cross-defendants “represented in 2021 that they would value engineer the project and materially reduce the cost for the addition and new ADU” (CC ¶ 13) and they “repeatedly promised to provide a fixed price for the work, which they never delivered.” (CC ¶ 19.)

While less specificity is required when the Cross-Defendant has full knowledge of the facts, which is true in this case, the allegations are so general that even a cross-defendant with full knowledge of the facts cannot determine the specifics of the representations. At a minimum, the cross-complaint must identify by name or some other identifying representation who made the representation, to whom it was made and some more specific date (or other information to help cross-defendants determine when the alleged representation was made) other than during a year, i.e., 2021, or state that the representations were made “repeatedly.” Thus the court SUSTAINS with leave to amend the demurrer to the third cause of action.

The court does not reach the other arguments raised by Cross-Defendants to this cause of action.

Fourth Cause of Action: Negligent Misrepresentation

“The elements of negligent misrepresentation are well established. A plaintiff must prove the following in order to recover. ‘[M]isrepresentation of a past or existing material fact, without reasonable ground for believing it to be true, and with intent to induce another's reliance on the fact misrepresented; ignorance of the truth and justifiable reliance on the misrepresentation by the party to whom it was directed; and resulting damage....’ ” (Shamsian v. Atlantic Richfield Co. (2003) 107 Cal.App.4th 967, 983, 132 Cal.Rptr.2d 635.)

(Hydro-Mill Co., Inc. v. Hayward, Tilton & Rolapp Ins. Associates, Inc. (2004) 115 Cal.App.4th 1145, 1154.)

Here, for the same reasons as the fraud cause of action, the court SUSTAINS with leave the demurrer to the fourth cause of action, which cause of action is plead as an alternative ground to the first cause of action. Based upon the lack of specificity, the court cannot tell if alleged representations regarding future events are sufficient under the law to constitute a case of action.

Fifth Cause of Action: Declaratory Relief

To qualify for declaratory relief under section 1060, cross-complainants must show

“(1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the rights or obligations of a party.” (Brownfield v. Daniel Freeman Marina Hospital (1989) 208 Cal.App.3d 405, 410, 256 Cal.Rptr. 240 (Brownfield).) “The ‘actual controversy’ language in ... section 1060 encompasses a probable future controversy relating to the legal rights and duties of the parties.” (Environmental Defense Project of Sierra County v. County of Sierra

July 14, 2026 Law and Motion Calendar PAGE 29 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ (2008) 158 Cal.App.4th 877, 885, 70 Cal.Rptr.3d 474.) It does not embrace controversies that are “conjectural, anticipated to occur in the future, or an attempt to obtain an advisory opinion from the court.” (Brownfield, at p. 410, 256 Cal.Rptr. 240.)

(Lee v. Silveira (2016) 6 Cal.App.5th 527, 546.)

Here, cross-defendants argue there is no actual controversy because “[a]djudication of the other causes of action will necessarily determine the rights and duties of the parties, making a Declaratory Relief claim superfluous.” Superfluousness, however, is not the test on demurrer. Rather, the Court determines whether the allegations and facts set forth in the cross-complaint place cross-defendants on notice of the charge against them. Here, the cross-plaint alleges that there is an actual controversy between cross complainants and cross-defendants regarding their rights and duties under the alleged oral agreement, what is owed, whether the contract is illegal and therefore unenforceable, whether cross-defendants overcharged for the work they did and if cross-complainants are entitled to a refund. (CC ¶¶ 38, 39.)

Accordingly, the Court OVERRULES the demurrer as to the fifth cause of action.

Cross-complainants have ten (10) days from service of written notice of entry of order to file and serve a First Amended Cross Complaint. (Cal. Rules of Court, rule 3.1320(g); Code Civ. Proc., § 472b.)

If the tentative ruling is uncontested, it shall become the order of the Court. Thereafter, counsel for cross-defendants shall prepare a written order consistent with the Court’s ruling for the Court’s signature, pursuant to California Rules of Court, rule 3.1312, and provide written notice of the ruling to all parties who have appeared in the action, as required by law and the California Rules of Court.