LIQIN PENG, et al. vs RYAN MICHAEL BURKE

On March 7, 2025, plaintiffs Liqin Peng ("Peng") and Jia Yu ("Yu" and, collectively, Plaintiffs) filed a Complaint against defendant Ryan Michael Burke DBA The Clear Choice Public Adjustors ("Defendant"). On May 29, 2025, Defendant filed a demurrer, which the Court sustained as to the Fifth Cause of Action (Fraudulent Misrepresentation) and otherwise overruled, on October 3, 2025.

The First Amended Complaint ("FAC") was filed on October 20, 2025, alleging nine causes of action for (1) Declaratory Relief (Agreement Invalidity); (2) Violation of California Insurance Code Sec. 15027 (Use of Unapproved Agreement Form and Lack of Cancellation Notice); (3) Failure to Disclose Material Information; (4) Unauthorized Representation; (5) Fraudulent Misrepresentation; (6) Illegal Kickback Arrangement; (7) Restitution (Unjust Enrichment/Money Had and Received); (8) Breach of Agreement (Failure to Achieve Agreement Goal); and (9) Accounting/Financial Inspection.

Plaintiffs allege as follows: They have owned the real property located at 23716 Decorah Road, Diamond Bar, California 91765 (the "Property") as community property with right of survivorship since August 2021 and had a rental insurance policy with CSAA Insurance Exchange (AAA Insurance) effective from May 2024. Yu, alone and without Peng's authorization, engaged Defendant on August 10, 2024, for a public adjusting agreement, but there were issues such as a violation of Insurance Code section 15027(e) regarding solicitation, pre-dating the agreement, inclusion of Defendant's name on all insurance payment checks, failure to include a notice of cancellation form, failure to describe the scope, and others.

Defendant engaged an environmental testing company on August 15, 2024, and a building company, IKON Builders ("IKON"), without authorization. Yu initiated a small claims court action in which the West Covina Small Claims Court determined Defendant was responsible for the disputed conduct and resulting damages. Yu was told IKON was an AAA referred contractor, relied on the statement and initiated emergency-service paperwork, but IKON performed work without obtaining permits and/or after applying for the wrong permits with the City of Diamond Bar and failed to complete the job. Plaintiffs found out through AAA that IKON was referred by Defendant.

On December 6, 2024, and January 26, 2025, Yu sent Defendant a notice of termination and requested disengagement from the insurance claim, and Defendant did not remove his name. Defendant had a kickback agreement with an engineering firm for referrals, which was not disclosed to Plaintiffs. On December 22, 2025, Defendant filed a Demurrer to the FAC. Plaintiffs filed their Opposition on April 7, 2026. On May 4, 2026, Defendant filed his Reply.

MEET AND CONFER

Before filing a demurrer or motion to strike, the moving party is required to meet and confer with the party who filed the pleading demurred to, in person or telephonically, to determine whether an agreement can be reached through a filing of an amended pleading that would resolve the objections to be raised in the demurrer. (Code Civ. Proc. Sec.Sec. 430.41, 435.5.)¿¿Alternatively, the moving party may file a declaration stating that the party who filed the pleading subject to the demurrer or motion to strike failed to respond to the meet and confer request of the moving party or otherwise failed to meet and confer in good faith. (Code Civ. Proc. Sec.Sec. 430.41(a)(3)(B), 435.5(a)(3)(B).)

Ben Ghargozli ("Ghargozli") has stated he attempted to meet and confer with Plaintiffs. (Decl. of Ghargozli P. 3.) There is no evidence that a meet and confer occurred or that Plaintiffs failed to respond. (See id. [generally].) The meet and confer requirement has not been met. However, "a determination by the court that the meet and confer process was insufficient shall not be grounds to overrule or sustain a demurrer." (Code Civ. Proc. Sec. 430.41(a)(4).) The Court addresses the Demurrer on the merits.

LEGAL STANDARD

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (Code Civ. Proc. Sec. 430.30(a); Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)¿"To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff's proof need not be alleged."¿(C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.)¿For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded.¿ (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.)¿A demurrer "does not admit contentions, deductions or conclusions of fact or law."¿(Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)

DISCUSSION

Defendant demurs to the Fifth Cause of Action (Fraudulent Misrepresentation) only, contending that Plaintiffs have not addressed the defects from the Court's previous ruling on the prior demurrer: (1) how, where, and by what means the representations were made; and (2) the economic loss rule. Defendant claims that Plaintiffs have failed to identify the nexus between IKON as an AAA-approved or recommended contractor and Plaintiff's purported damages.

Plaintiffs argue that the fraud theory rests on Defendant's own actions - that Defendant represented that IKON was referred, endorsed, or presented through AAA or the insurer, giving Plaintiffs a false sense of legitimacy. As such, Plaintiffs contend that the FAC adequately pleads fraud with particularity and addresses the elements of reliance, causation, and damages.

Regarding the economic loss rule, Plaintiffs note that the FAC alleges fraudulent conduct independent of mere contractual non-performance through the separate emergency service agreements with IKON and a separate contract with the environmental testing company that Defendant engaged. Plaintiffs further argue that their theory is consistent with the independent statutory and fiduciary duties imposed on Defendant as a public adjustor and that Defendant improperly seeks resolution of factual disputes.

In reply, Defendant reiterates that the Complaint needs to allege whether the purported representations were made by telephone, in person, via email, via text message, etc. Defendant reiterates that Plaintiffs have failed to overcome the economic loss rule and failed to identify the nexus between the alleged misrepresentations and their harm.

"The essential elements of a count for 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.) In Lazar v. Superior Court (1996) 12 Cal.4th 631, the California Supreme Court addressed the requirement that "fraud must be pled specifically; general and conclusory allegations do not suffice." (Lazar, supra, 12 Cal.4th at 645.)

Specificity "necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered." (Id. at p. 631.) Regarding specificity, "[a] plaintiff's burden in asserting a fraud claim against a corporate employer is even greater. In such a case, the plaintiff must 'allege the names of the persons 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.' (Tarmann v.

State Farm Mut. Auto. Ins. Co. (1991) 2 Cal. App. 4th 153, 157 [2 Cal. Rptr. 2d 861].)" (Id. at 645.)

The FAC pleads that Defendant told Plaintiff Yu that IKON was an AAA-referred contractor for emergency services and recommended that Plaintiffs retain IKON (FAC P. 32), and that Defendant portrayed himself as a public insurance adjustor (id. P.P. 9-10). These allegations are sufficient to meet the specificity requirement.

Regarding the economic loss rule, "[a] plaintiff may assert a tort claim for fraudulent concealment based on conduct occurring in the course of a contractual relationship, if the elements of the cause of action can be established independently of the parties' contractual rights and obligations and the tortious conduct exposes the plaintiff to a risk of harm beyond the reasonable contemplation of the parties when they entered into the agreement." (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 38.)

Here, while the clarity of the environmental testing company is unclear as the claim itself is not presented (see FAC, Exh. B [full policy only]), the contract between the parties does not discuss the scope of work (see id. at Exh. C), and the alleged damages related to the environmental testing is available coverage (see id. P. 26), it is clear from the allegations that Yu at least executed two emergency service agreements with IKON based on Defendant's representation. (I d. P. 33.) That is, at least two new contracts with IKON were beyond the reasonable contemplation of the parties when they entered into their agreement together.

Thus, as alleged, the misrepresentation is, in some respects, independent of a contract breach. (Robinson Helicopter Co. v. Dana Corp. (2004) 34 Cal.4th 979 [holding that economic loss rule, which in some circumstances bars tort action in absence of personal injury or physical damage to other property, applies to claims for intentional misrepresentation or fraud in performance of contract].)

The FAC addresses the essential elements of a count for intentional misrepresentation, that is, (1) a misrepresentation in the form of Defendant presenting IKON as AAA-referred contractors; (2) knowledge of falsity as Defendant referred IKON himself, (3) intent to induce reliance as Defendant is a public adjustor and was in charge of preparing and adjusting Plaintiffs' fire claim, (4) reliance at least by Yu on Defendant's statements, and (5) resulting damage in the form of two excess emergency service contracts and the resulting job that IKON did not finish. Accordingly, the Demurrer to the Fifth Cause of Action (Fraudulent Misrepresentation) is overruled.

Conclusion

Defendant Ryan Michael Burke DBA The Clear Choice Public Adjusters' Demurrer to the Fifth Cause of Action (Fraudulent Misrepresentation) in the First Amended Complaint is overruled. Defendant Ryan Michael Burke DBA The Clear Choice Public Adjusters is to file an Answer within 10 days of this Ruling. The Court continues the Case Management Conference to ___________, 2026, at 8:30AM. Date: 08/14/2026 _______________________________ William E. Weinberger Judge, Los Angeles Superior Court

Case Number: 26STCV13078 Hearing Date: August 14, 2026 Dept: 413 TENTATIVE RULING Hearing Date: August 14, 2026 New Century Building Supplies, Inc., et al. v. Jaguar Land Rover North America, LLC, Case No. 26STCV13078 Proceeding: Defendant's Motion to Strike Ruling: Defendant's Motion to Strike is granted with leave to amend. Plaintiffs shall file an amended complaint within 10 days of this Ruling. The Court sets an Order to Show Cause re Filing of Amended Complaint for September 15, 2026, at 8:30AM.

Defendant seeks an order striking Prayer for Relief paragraph 2: "For a civil penalty up to two times the amount of actual damages (est. $291,634.22)," on the grounds that Plaintiff failed to allege compliance with the conditions to seeking such relief. Those conditions, under section 871.24 of the Code of Civil Procedure, require a plaintiff, at least 30 days before commencing an action seeking civil penalties under Civil Code section 1794(c), to "(1) Notify the manufacturer of the consumer's name, the accurate Vehicle Identification Number ("VIN") of the motor vehicle, and a brief summary of the repair history and problems with the motor vehicle", and "[P.](2) Demand that the manufacturer repurchase or replace the motor vehicle."

While paragraph 11 of the Complaint alleges compliance with some of the provisions of section 871.24, full compliance is not alleged. Therefore, the motion to strike is granted with leave to amend. | Home -->