Global Investments & International Holding, LLC v. Kuan Jung Lin, et al.

is not the function of the demurrer to challenge the truthfulness of the complaint; and for purposes of ruling on the demurrer, all facts pleaded in the complaint are assumed to be true. (Id. at pp. 993-994.) A demurrer can be used only to challenge defects that appear on the face of the pleading under attack; or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Donabedian, supra, 116 Cal.App.4th at p. 994.) No other extrinsic evidence can be considered. (Ion Equip.

Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881 [error for court to consider facts asserted in memorandum supporting demurrer]; see also Afuso v. United States Fid. & Guar. Co. (1985) 169 Cal.App.3d 859, 862, disapproved on other grounds in Moradi-Shalal v. Fireman's Fund Ins. Cos. (1988) 46 Cal.3d 287 [error to consider contents of release not part of court record].) A demurrer can be utilized where the "face of the complaint" itself is incomplete or discloses some defense that would bar recovery. (Guardian North Bay, Inc. v.

Superior Court (2001) 94 Cal.App.4th 963, 971-972.) The "face of the complaint" includes material contained in attached exhibits that are incorporated by reference into the complaint, or in a superseded complaint in the same action. (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94; see also Barnett v. Fireman's Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505 ["[W]e rely on and accept as true the contents of the exhibits and treat as surplusage the pleader's allegations as to the legal effect of the exhibits"].)

A demurrer can only be sustained when it disposes of an entire pleading, cause of action, or affirmative defense. (See Cal. Rules of Court, rule 3.1320, subd. (a); Poizner v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119; Kong v. City of Hawaiian Gardens Redev. Agency (2003) 108 Cal.App.4th 1028, 1046-1047.) PRELIMINARY ISSUES - Demurrer "Each ground of demurrer must be in a separate paragraph and must state whether it applies to the entire complaint, cross-complaint, or answer, or to specified causes of action or defenses." (Cal.

Rules of Court, rule 3.1320, subd. (a).) Defendants' Demurrer fails to comply with this requirement by combining multiple grounds for the Demurrer into one paragraph. (Demurrer, p. 8 of pdf.) The Court admonishes Defendants to comply with the California Rules of Court going forward. DISCUSSION - Demurrer Meet and Confer Per Code of Civil Procedure section 430.41, subdivision (a), Defendants were required to meet and confer in person, by telephone, or by video conference before bringing this demurrer. (Code Civ.

Proc., Sec. 430.41, subd. (a).) Defendants failed to meet and confer by any of these methods. (Chung Decl., P.P. 4-5.) Nevertheless, the Court may not overrule a demurrer for failure to adequately meet and confer. (Code Civ. Proc., Sec. 430.41, subd.

(a)(4).) The Court admonishes Defendants to comply with the Code of Civil Procedure going forward. Grounds for Demurrer Defendants demur to the entire SAC and each cause of action on the grounds that that they fail to state facts sufficient to constitute causes of action and on the grounds that they are uncertain under Code of Civil Procedure sections 430.10, subdivisions (e) and (f). First Cause of Action - Fraud: Intentional Misrepresentation To state a cause of action for fraudulent misrepresentation, the plaintiff must allege facts demonstrating: "(1) the defendant represented to the plaintiff that an important fact was true; (2) that representation was false; (3) the defendant knew that the representation was false when the defendant made it, or the defendant made the representation recklessly and without regard for its truth; (4) the defendant intended that the plaintiff rely on the representation; (5) the plaintiff reasonably relied on the representation; (6) the plaintiff was harmed; and (7) the plaintiff's reliance on the defendant's representation was a substantial factor in causing that harm to the plaintiff." (Graham v.

Bank of Am., N.A. (2014) 226 Cal.App.4th 594, 605-606, internal quotation marks and citation omitted.) "In California, fraud must be pled specifically; general and conclusory allegations do not suffice. Thus the policy of liberal construction of the pleadings ... will not ordinarily be invoked to sustain a pleading defective in any material respect. This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.

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." (Lazar v. Superior Ct. (1996) 12 Cal.4th 631, 645 (Lazar), internal quotation marks, paragraph mark, and citations omitted, italics in original.) Defendants contend the SAC still fails the fraud particularity standard because it pleads the statements only "in substance" and reserves the right to allege verbatim language after discovery, gives no specific dates beyond "mid-February" and "multiple occasions," and relies on unnamed speakers ("Brian" and Does) whose authority is not established.

Defendants argue justifiable reliance is absent as a matter of law because a sophisticated, twenty-year commercial tenant on a month-to-month tenancy could not reasonably rely on oral assurances of a long-term lease without demanding written confirmation. Defendants further argue causation is broken by the new owner's independent post-sale conduct (rent increases and vacate demands). Finally, they contend the lost-opportunity damages are speculative because the SAC does not allege a purchase price, financing, or identified alternative premises.

In opposition, Plaintiff contends the SAC answers the prior ruling point by point: it identifies the speaker (Daniel Zayes, Tryad's principal and managing agent), his authority (twenty-year exclusive manager acting with Lin's express and apparent authority, ratified by Lin), the listener (David Roodi), the timing and medium (identified February 2025 telephone calls), and the words

used. Plaintiff argues the law does not require a verbatim transcript, that the additional agents fall within the exception relaxing specificity where the facts are within the defendant's exclusive knowledge, and that each count stands on Zayes alone so a demurrer does not lie to the "Brian"/Does portion. Plaintiff contends justifiable reliance and proximate cause are questions of fact not resolvable on demurrer, and that much of the harm (equipment, CAM, rent, lost purchase opportunity) predates or bypasses the new owner.

Plaintiff argues damages are now concrete and incurred, curing the deficiency that decided the prior demurrer, and that evidentiary detail need not be pleaded. Plaintiff also asserts the reliance argument relies on language it says does not appear in Smyth v. Berman. In reply, Defendants contend that Plaintiff's own characterization confirms the defect -- it concedes only "mid-February" dates and that specific agents and additional speakers must be identified through discovery -- which the particularity standard forbids.

Defendants argue Khoury addressed contract pleading, not fraud, and that pleading statements "in substance" with a reservation to supply verbatim language later confirms rather than cures the deficiency. Defendants contend that reliance is unreasonable as a matter of law for a sophisticated month-to-month tenant, defend their Smyth citation as an accurate parenthetical summary rather than a direct quotation, and argue Tenzer does not make reliance on an oral promise per se justifiable. Defendants argue that the new owner's independent decisions break causation and that the alleged damages remain speculative, foregone opportunities rather than measurable out-of-pocket losses.

The Court finds the SAC alleges sufficient facts to state a cause of action for intentional misrepresentation. The SAC cures the pleading defects identified in the Court's prior ruling, namely the identity/identities of the speaker(s) who purportedly made the alleged misrepresentations to Plaintiff and damages. (See Order Re: Court Ruling (4/29/26).) The SAC alleges Daniel Zayes (Zayes) made various misrepresentations on behalf of both of the Defendants, that Zayes repeatedly claimed and demanded back CAM charges from Plaintiff in amounts exceeding $800,000.00, and that Zayes represented to Plaintiff on multiple occasions in February 2025 that the subject property was "not for sale," that Defendant Lin was "not selling the property," and that the status of the subject property was such that Plaintiff could continue to operate its nightclub business under a forthcoming new lease agreement. (SAC, P.P. 16, 25, 69.)

The SAC alleges Plaintiff incurred $50,000.00 in additional equipment and improvement expenditures and payment of back CAM charges under protest following the alleged misrepresentations. (SAC, P.P. 1, 23, 25, 29, 38, 43.) Based on the foregoing, the Court OVERRULES the Demurrer to the First Cause of Action. Second Cause of Action - Fraud: Concealment To plead a cause of action for fraudulent concealment, the plaintiff must allege facts demonstrating, "(1) concealment or suppression of a material fact; (2) by a defendant with a duty to disclose the fact to the plaintiff; (3) the defendant intended to defraud the plaintiff by intentionally

concealing or suppressing the fact; (4) the plaintiff was unaware of the fact and would not have acted as he or she did if he or she had known of the concealed or suppressed fact; and (5) plaintiff sustained damage as a result of the concealment or suppression of the fact. [Citation.]" (Hambrick v. Healthcare Partners Med. Grp., Inc. (2015) 238 Cal.App.4th 124, 162 (Hambrick).) "If the duty allegedly arose by virtue of the parties' relationship and defendant's exclusive knowledge or access to certain facts... the complaint must also include specific allegations establishing all the required elements, including (1) the content of the omitted facts, (2) defendant's awareness of the materiality of those facts, (3) the inaccessibility of the facts to plaintiff, (4) the general point at which the omitted facts should or could have been revealed, and (5) justifiable and actual reliance, either through action or forbearance, based on the defendant's omission." (Rattagan v.

Uber Techs., Inc. (2024) 17 Cal.5th 1, 43-44 (Rattagan).) Defendants contend this claim fails because Plaintiff has not alleged a duty to disclose independent of the landlord-tenant relationship, which they characterize as an arm's-length commercial relationship that is not fiduciary or confidential. Defendants argue the "partial representation" theory does not create a blanket duty to volunteer information about a potential sale, and that if the statements were affirmatively false the claim sounds in misrepresentation, not concealment.

Defendants further argue the omitted-fact allegations (the broker, the listing, the buyer) are pleaded on information and belief without specificity and are therefore impermissibly vague. In opposition, Plaintiff contends a duty to disclose arises outside fiduciary settings from exclusive knowledge, active concealment, and partial representations, all of which are pleaded and all of which are recognized in LiMandri and the Court's previously cited Rattagan decision. Plaintiff argues that, having chosen to speak ("the Property is not for sale"), Defendants were obliged to disclose the facts that made the statement misleading, and that no fiduciary relationship is required because a twenty-year contractual landlord-tenant relationship is the kind of transactional relationship LiMandri describes.

Plaintiff distinguishes Girard as involving a landlord who made no representations, and contends the omitted facts, the timing of the disclosure duty, the inaccessibility of the facts, and reliance are all specifically pleaded. In reply, Defendants reassert that a standard landlord-tenant relationship is arm's-length, not fiduciary, and that absent a fiduciary bond a landlord owes no duty to tell a month-to-month tenant it is considering selling. They argue LiMandri involved active negotiations for a binding transaction with exclusive knowledge, whereas here the parties were only in preliminary lease discussions.

Defendants contend the partial-representation theory does not convert every statement into a duty to disclose all related facts, and that the SAC impermissibly pleads both an affirmative misrepresentation and a concealment of the same subject without alleging what Defendants knew or decided, and when. The

Court finds the SAC alleges sufficient facts to state a cause of action for fraudulent concealment. The SAC alleges that Defendants had exclusive knowledge of an off-market private listing actively concealed through a misleading representation that the subject property was not for sale when Defendants were simultaneously negotiating its sale with a third party. (SAC, P.P. 18, 43.) The SAC alleges a preexisting transactional relationship based on the 20-year landlord-tenant agreement. (SAC, P.P. 11, 16, 43, 59, 71, 73; Rattagan, supra, 17 Cal.5th at p. 40.)

These allegations also satisfy Rattagan's requirements regarding the content of the omitted facts, their materiality, their inaccessibility, when disclosure was due, and reliance through action and forbearance. (See id. at pp. 43-44.) Accordingly, the Court OVERRULES the Demurrer to the Second Cause of Action. Third Cause of Action - Promissory Fraud To state a cause of action for promissory fraud, the plaintiff must allege facts demonstrating that "(1) the defendant made a representation of intent to perform some future action, i.e., the defendant made a promise, and (2) the defendant did not really have that intent at the time that the promise was made, i.e., the promise was false. [Citation.]" (Beckwith v.

Dahl (2012) 205 Cal.App.4th 1039, 1060.) Defendants contend Plaintiff has not alleged facts showing Defendants lacked a present intent to perform when the "great new lease" promise was made, arguing that marketing a property for sale while discussing a lease is routine and does not establish fraudulent intent. Defendants argue that Plaintiff impermissibly infers intent from subsequent nonperformance and the eventual sale. They further argue the promise of a "great new lease" is too indefinite -- lacking specified terms, duration, rent, or commencement date -- to constitute an actionable promise, and that the who/when/exact-words particulars are missing.

In opposition, Plaintiff contends promissory fraud requires only a promise made without contemporaneous intent to perform, and that intent may be shown by circumstantial evidence. Plaintiff argues it pleaded contemporaneous circumstances -- not mere nonperformance -- including that Lin had already engaged a broker, was marketing the Property, was negotiating a sale structured so the buyer would assume no lease obligation, never produced a draft lease or term sheet, and negotiated Tryad's retention as part of the sale consideration.

Plaintiff argues indefiniteness does not defeat the claim because deceit does not require an enforceable promise, distinguishes Rochlis as concerning aspirational employment promises, and notes the prior ruling sustained this count for want of damages alone -- a defect it says is now cured. In reply, Defendants contend that simultaneous marketing and lease discussion is routine commercial practice, that the SAC lacks definitive milestones (an executed purchase agreement, accepted offer, or opened escrow) that would have made lease negotiation impossible, and that the absence of a draft lease during brief preliminary talks does not prove a lack of intent.

Defendants argue that the promise of a "great new lease" on "favorable terms" is aspirational and too indefinite to establish what was promised or whether Defendants intended to perform, analogizing to the "appropriate raises" promise held too indefinite in Rochlis.

The Court finds the SAC alleges sufficient facts to state a cause of action for promissory fraud. The SAC alleges facts demonstrating a promise made without a present intent to perform, such as Defendant Lin having already engaged a broker at the time of the February 2025 promises, marketing the subject property off-market, and negotiating a sale so the buyer would not assume a lease obligation to Plaintiff. (See SAC, P. 50.) While the Court agrees there is some indefiniteness regarding the alleged promises of "a great new lease" and "favorable terms," it is still allegedly made in the context of the subject property with the false statement that no sale was pending, and a fraud claim does not require an enforceable promise. (See SAC, P. 14; Lazar, supra, 12 Cal.4th at p. 631.)

Accordingly, the Court OVERRULES the Demurrer to the Third Cause of Action. Fourth Cause of Action - Intentional Interference with Prospective Economic Relations To state a cause of action for intentional interference with prospective economic relations, the plaintiff must allege facts demonstrating: (1) an economic relationship between the plaintiff and a third party with a probable future economic benefit to the plaintiff; (2) defendant knows of the relationship; (3) the defendant acted intentionally to disrupt the relationship; (4) actual disruption; and (5) economic harm to the plaintiff. (Golden Eagle Land Inv., L.P. v.

Rancho Santa Fe Assn. (2018) 19 Cal.App.5th 399, 429-430.) Defendants contend Plaintiff must allege an actual economic relationship with a specific third party and has not, because the SAC identifies the promoters, supplier, vendor, and DJs only by category (except "Ruthless Americans") and -- Defendants assert -- "acknowledges" their identities are "presently unknown to Plaintiff." Defendants argue causation is inadequately pleaded because any disruption may have been caused by the new owner's conduct rather than Defendants' statements, and that the third parties are not alleged to have known of the alleged fraud.

Defendants further argue the independently wrongful conduct element collapses if the fraud claims fail, and that the disruption allegations are speculative, conclusory, and pleaded in the disjunctive. In opposition, Plaintiff contends the SAC pleads six existing, revenue-producing relationships -- two recurring event promoters, its alcoholic-beverage supplier tied to the on-premises ABC license, the named vendor "Ruthless Americans," and two DJs -- not a generalized hope of future custom. Plaintiff argues Defendants misquote paragraph 58, which states the identities are "presently known to Plaintiff," and that third parties need not be named in the complaint so long as they are specific and identifiable.

Plaintiff contends fraud and deceit supply the independently wrongful conduct, that specific intent is unnecessary because it suffices that disruption was substantially certain, that the third parties need not have known of the fraud, and that actual disruption is alleged relationship by relationship. In reply, Defendants argue that if the identities are "presently known," Plaintiff must plead them now, and that identifying parties only by category ("a recurring event promoter,"

"a disc jockey") is insufficient under Ramona Manor, where the unnamed party's identity was apparent from context. Defendants contend that the SAC does not allege any third party knew of the misrepresentations, so the fraud could not have caused the disruption, and that the more plausible inference is that any disruption resulted from the sale and tenancy uncertainty. Defendants contend that because the fraud claims fail, the interference claim has no independently wrongful conduct to support it.

The Court finds the SAC cures the defects identified in the Court's prior ruling and alleges sufficient facts to state a cause of action for intentional interference with prospective economic relations. The SAC alleges six specific existing relationships, including two recurring event promoters, the alcoholic-beverage supplier tied to the on-premises ABC license, the named vendor "Ruthless Americans," and two DJ's, each described as an existing recurring arrangement. (SAC, P. 58.) The SAC alleges a twenty-year relationship between the parties with Plaintiff running a nightclub, which ostensibly demonstrates Defendants' knowledge of potential disruption to Plaintiff's various business relationships and operations. (See SAC, P.P. 11, 16, 43, 59, 71, 73; Ramona Manor Convalescent Hosp. v.

Care Enters. (1986) 177 Cal.App.3d 1120, 1133 [third party need not be identified as long as the relationship is specific and existing and the defendant knew its acts would frustrate the specific yet unnamed party].) Moreover, the fraud allegations discussed above satisfy the independently wrongful element. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1158.) Based on the foregoing, the Court OVERRULES the Demurrer to the Fourth Cause of Action. Fifth 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...." (Hydro-Mill Co. v. Hayward, Tilton & Rolapp Ins. Assocs., Inc. (2004) 115 Cal.App.4th 1145, 1154, brackets in original, internal quotation marks and citation omitted.)

Defendants contend this claim is subject to the same heightened pleading requirements as intentional fraud and fails for the same specificity reasons. Defendants argue Plaintiff has not alleged facts showing Defendants lacked reasonable grounds for their statements -- e.g., that Lin had executed a binding purchase agreement or opened escrow -- and that it is not objectively unreasonable to discuss lease options while exploring a possible sale absent a binding sale agreement. Defendants further argue the claim is barred by the economic loss rule because the alleged losses are purely economic and arise from the landlord-tenant relationship, with no duty independent of that relationship.

In opposition, Plaintiff contends "the Property is not for sale" is a statement of existing fact pleaded with the particularity of paragraph 16, and that whether Lin (who listed his own building) or Tryad (his exclusive manager) had reasonable grounds is a question of fact. Plaintiff

argues the economic loss rule does not bar the claim because Robinson Helicopter permits tort recovery where a contract is fraudulently induced or the duty is independent of the contract, and Rattagan confirms fraud claims arising during a contractual relationship may proceed where their elements are established independently of the contract. Plaintiff contends Dhital -- cited by Defendants -- reversed an order sustaining a demurrer on economic loss grounds, that no lease term addresses statements about a sale, and that the duty not to make false statements is statutory and independent of any contract.

In reply, Defendants contend that the economic loss rule bars the claim because the representations concerned the property's status and lease prospects -- matters arising entirely from the landlord-tenant relationship -- and Plaintiff alleges no independent duty. Defendants argue Rattagan did not hold that all fraud claims arising during a contractual relationship escape the rule, but only those whose elements are established independently of the contract's rights and obligations, and that the duty Plaintiff asserts (not to lie during lease negotiations) arises from the negotiation itself.

Defendants characterize the alleged damages as disappointed commercial expectations rather than personal injury or property damage. The Court finds the SAC alleges sufficient facts to state a cause of action for negligent misrepresentation. As to the substance of Plaintiff's negligent misrepresentation claim, the SAC alleges a misrepresentation to Plaintiff that the subject property was not for sale and that Lin was not selling the property when Defendants were at the same time privately marketing the property for sale and negotiating a deal. (See SAC, P.P. 16, 25, 69.)

With respect to the economic loss rule, the Court finds its application unavailing at this time. A negligent misrepresentation claim is premised on the duty to communicate accurate information when: (1) providing false information poses risk of physical harm to person or property; and (2) in commercial contexts for business purposes. (Friedman v. Merck & Co. (2003) 107 Cal.App.4th 454, 477.) This cause of action arises in the context of a business transaction, i.e., ownership or leasing of a commercial property. (See SAC, P.P. 16, 22, 25, 69.)

To apply the economic loss rule to this cause of action as Defendants seek would effectively vitiate negligent misrepresentation claims in the context of business transactions where only economic losses are alleged. Additionally, as noted above, the SAC alleges sufficient facts demonstrating a claim for intentional misrepresentation, which the California Supreme Court held in Rattagan is not barred by the economic loss rule. (Rattagan, supra, 17 Cal.5th at p. 26.) Based on the foregoing, the Court OVERRULES the Demurrer to the Fifth Cause of Action.

LEGAL STANDARD - Motion to Strike " Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof, but this time limitation shall not apply to motions specified in subdivision (e) ." (Code Civ. Proc., Sec. 435, subd. (b)(2).) "The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading. (b) Strike out all or any

part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court." (Id., Sec. 436.) PRELIMINARY ISSUES - Motion to Strike "A notice of motion to strike a portion of a pleading must quote in full the portions sought to be stricken except where the motion is to strike an entire paragraph, cause of action, count, or defense." (Cal. Rules of Court, rule 3.1322, subd. (a).) Defendants' Notice of Motion to Strike fails to comply with this requirement. (See Notice of Motion to Strike, p. 2.)

The Court admonishes Defendants to comply with the California Rules of Court going forward. The Court also notes that Plaintiff attributes the phrase "malicious, fraudulent, or oppressive conduct" to Civil Code section 3294. While the words "oppression, fraud, or malice" are contained in section 3294, the phrase "malicious, fraudulent, or oppressive conduct" is not. (See Civ. Code, Sec. 3294.) Defendants' Reply also appears to improperly attribute the phrase "such malicious, fraudulent, and oppressive conduct" to Civil Code section 3294. (Reply, 5:23-25.)

The Court admonishes the parties to be more cautious going forward when purporting to quote from legal authorities. The Court further notes that Defendants' Reply states that a "'managing agent' is one who 'exercises substantial discretionary authority over decisions that ultimately determine corporate policy,'" but provides no citation for the source of that quotation. (Reply, 4:14-15.) Defendants' Reply contains numerous other quotations without citing the sources for those quotations. The Court admonishes Defendants to be more cautious going forward when purporting to quote something.

DISCUSSION - Motion to Strike Meet and Confer Per Code of Civil Procedure section 435.5, subdivision (a), Defendants were required to meet and confer in person, by telephone, or by video conference before bringing this demurrer. (Code Civ. Proc., Sec. 435.5, subd. (a).) Defendants failed to meet and confer by any of these methods. (Chung Decl., P.P. 4-5.) Nevertheless, the Court may not overrule a demurrer for failure to adequately meet and confer. (Code Civ. Proc., Sec. 435.5, subd. (a) (4).) The Court admonishes Defendants to comply with the Code of Civil Procedure going forward.

Punitive Damages A claim for punitive damages is subject to a motion to strike when the allegations fail to rise to the level of malice, oppression, or fraud necessary under Civil Code section 3294. (Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 64.) Defendants move to strike the punitive damages claim on the ground that the SAC fails to allege specific facts showing oppression, fraud, or malice as required by Civil Code section 3294. Defendants argue the SAC

re-alleges the underlying tort elements and appends conclusory labels -- "despicable," "conscious disregard," "oppression," "malice," and "fraud" (citing paragraphs 28 and 37) -- without specific facts demonstrating despicable conduct beyond ordinary commercial fraud, and that the disputed Common Area Maintenance allegations are pleaded speculatively, as signaled by the word "seemingly." Defendants further contend punitive damages are categorically unavailable for the Fifth Cause of Action for negligent misrepresentation, which lacks the requisite intent.

Finally, Defendants argue the pleading fails to establish corporate punitive liability against Tryad under section 3294, subdivision (b), because it does not allege specific facts that an officer, director, or managing agent authorized, ratified, or had advance knowledge of the wrongful conduct, relying instead on conclusory agency allegations. Defendants request that the allegations be stricken without leave to amend, contending further amendment would be futile. In opposition, Plaintiff contends that Civil Code section 3294 is disjunctive and that fraud alone is an adequate basis for punitive damages, so the well-pleaded intentional-fraud counts -- an identified speaker (Daniel Zayes), identified statements, an identified listener, an identified timeframe, and a concealed sale -- supply the necessary facts, and the motion fails together with the demurrer.

Plaintiff argues that "despicable conduct" is an element only of the oppression and conscious-disregard-malice prongs, not the fraud prong, and is adequately alleged in any event. Plaintiff contends the CAM allegations are factual -- a specific demand exceeding $800,000, no contractual obligation to pay, and partial payment under protest -- and that a single qualifying adverb does not render them speculative. As to Tryad, Plaintiff argues section 3294, subdivision (b), is satisfied because Zayes, alleged to be Tryad's principal and managing agent, personally committed the fraud, and managing-agent status is at minimum a question of fact.

Plaintiff further argues that the Fifth Cause of Action seeks no punitive damages, so there is nothing to strike; that the notice violates California Rules of Court, rule 3.1322(a), by quoting and identifying nothing to be stricken; and requests denial or, alternatively, leave to amend. In reply, Defendants reply that pleading fraud in the statutory language does not automatically satisfy section 3294; the complaint must still plead ultimate facts showing a specific intent to deprive Plaintiff of property or legal rights, and an intent to benefit oneself in a commercial transaction is not the same as an intent to injure.

They argue the pleading describes ordinary commercial fraud in a landlord-tenant dispute, distinguishable from the systemic scheme in the authority Plaintiff invokes, and that the "seemingly" CAM allegations remain speculative. On corporate liability, Defendants contend the pleading labels Zayes a principal and managing agent without alleging facts that he exercised substantial discretionary authority over corporate policy -- describing only authority over a single property -- so conclusory agency allegations cannot support punitive liability.

Defendants argue the Prayer seeks punitive damages "for the malicious, fraudulent, and oppressive conduct" without limitation to the first four causes of action, so the request improperly reaches the negligent misrepresentation count and must be stricken, and that any notice defect is technical and non-prejudicial. They request that the allegations be

stricken without leave to amend, contending further amendment would be futile. The Court finds the SAC alleges sufficient facts to support Plaintiff's prayer for punitive damages. As noted above in the Demurrer, the Court found the SAC alleged sufficient facts to support Plaintiff's fraud claims, and fraud is a basis for punitive damages. (Civ. Code, Sec. 3294, subd. (a).) The Court also finds the SAC alleges sufficient facts identifying Daniel Zayes as a managing agent of Tryad. (See SAC, P.P. 16, 25, 69.)

Based on the foregoing, the Court DENIES the Motion to Strike. CONCLUSION The Court OVERRULES Defendants Kuan Jung Lin and Tryad Properties, Inc.'s Demurrer to Plaintiff's Second Amended Complaint. The Court DENIES Defendants Kuan Jung Lin and Tryad Properties, Inc.'s Motion to Strike Punitive Damage Claim in Plaintiff's Second Amended Complaint. Defendants Kuan Jung Lin and Tryad Properties, Inc. must file and serve their Answer to the Second Amended Complaint within ten calendar days of the Court's order.

Plaintiff is ordered to give notice of the Court's ruling within five calendar days of this order. | Home -->)" -->