Glendale Kia v. Mercury Insurance

you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue. If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court will adopt the tentative as the final order, or take the matter off calendar at its discretion.

Conditioning et al.,

Plaintiff's Consolidated Motion to Compel Further Responses to Plaintiff's Form Interrogatories and Special Interrogatories and Request for Monetary Sanctions (CRS #s 4914 and 1625) is GRANTED. Defendant Lions is to serve further substantive and verified responses to Form Interrogatories Set One, and to Special Interrogatories within 10 days of this Order. Sanctions are awarded against Lions and their counsel of record, Jeremy Lee Ross and Law Offices of Jeremy L. Ross, P.C. jointly and severally in the amount of $1,260.

Sanctions are payable within 30 days. ANALYSIS At an informal discovery conference on May 4, 2026, pursuant to agreement of the parties, the Court ordered Defendant Lions to produce substantive responses by June 5, 2026. (Minute Order 5/4/2026.) Plaintiff's request for sanctions for having to bring this Consolidated Motion for Defendant's failure to serve further responses as ordered on May 4, 2026, is GRANTED. Plaintiff's counsel's hourly rate is $300/hour and she expended 3 hours preparing the instant Consolidated motion, Declaration and Separate Statement.

Plaintiff's counsel did not have to prepare a reply as there was no opposition. Plaintiff paid a $60 filing fee. (Declaration of Kara Nunez, 6/19/2026.) Plaintiff will spend one hour of time appearing at the hearing. Accordingly, sanctions are awarded against Lions and their counsel of record, Jeremy Lee Ross and Law Offices of Jeremy L. Ross, P.C. jointly and severally in the amount of $1,260. Sanctions are payable within 30 days.

Conclusion

Plaintiff's Consolidated Motion to Compel Further Responses to Plaintiff's Form Interrogatories and Special Interrogatories and Request for Monetary Sanctions (CRS #s 4914 and 1625) is GRANTED. Defendant Lions is to serve further substantive and verified responses to Form Interrogatories Set One, and to Special Interrogatories within 10 days of this Order. Sanctions are awarded against Lions and their counsel of record, Jeremy Lee Ross and Law Offices of Jeremy L. Ross, P.C. jointly and severally in the amount of $1,260.

Sanctions are payable within 30 days. Moving party to give notice. Parties who intend to submit on this tentative must send an email to the Court at [email protected] indicating intention to submit on the tentative, and copying all parties in the email communication. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue.

If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court will adopt the tentative as the final order, or take the matter off calendar at its discretion. Case Number: 25STCV34110 Hearing Date: August 18, 2026 Dept: 224 Glendale Kia v. Mercury Insurance TENTATIVE RULING The demurrer is SUSTAINED WITHOUT LEAVE TO AMEND as to the Second Cause of Action (General Negligence) as duplicative of the First Cause of Action, and is OVERRULED as to the First, Third, Fourth, Fifth, Sixth, Seventh, Eighth, and Ninth Causes of Action.

The Motion to Strike is DENIED as to Defendant Shahrokh "Sean" Shideh, and is GRANTED WITH LEAVE TO

AMEND as to Defendant Shideh Engineering, Inc., limited to the allegations required to impose punitive damages on a corporate employer under Civil Code section 3294, subdivision (b). Plaintiff shall file and serve any amended complaint within 30 days. The Case Management Conference is continued to December 21, 2026 at 8:30 a.m. ANALYSIS Introduction On November 21, 2025, Plaintiff Glendale K, Inc. dba Car Pros Kia Glendale filed a Complaint in this action against Defendants Mercury Insurance Company, Shahrokh "Sean" Shideh, and Shideh Engineering, Inc., arising from Shideh's forensic inspections of customer vehicles serviced at Plaintiff's dealership and his reports attributing rodent damage to man-made causes.

On February 18, 2026, Defendants Engineering, Inc. filed the instant Demurrer to the Complaint. On February 24, 2026, the same Defendants filed the instant Motion to Strike Portions of Complaint. On August 5, 2026, Plaintiff filed its Opposition to the Demurrer and Opposition to the Motion to Strike. Request for Judicial Notice Plaintiff requests judicial notice of two documents filed in the Westlake Coach Company action, Los Angeles Superior Court Case No. 24STCV24230: (A) Defendants' Motion for Judgment on the Pleadings as to Punitive Damages; and (B) the Second Amended Complaint.

The request is GRANTED as to the existence, filing, and contents of these court records for the purpose of establishing what was filed and argued in that action. (Evid. Code, Sec. 452, subd. (d); Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1117.) The Court does not take judicial notice of the truth of any factual assertion contained in either document. (Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1565.) Plaintiff's opposition to the Motion to Strike also cites an "Exhibit C," identified as SEI's 2026 Statement of Information filed with the California Secretary of State.

No Exhibit C is identified in or attached to the Request for Judicial Notice as filed. The Court therefore takes no judicial notice of that document. Meet and Confer Before filing a demurrer or a motion to strike, the demurring or moving party is required to meet and confer with the party who filed the pleading demurred to or the pleading that is subject to the motion to strike for the purposes of determining whether an agreement can be reached through a filing of an amended pleading that would resolve the objections to be raised in the demurrer. (CCP Sec.Sec. 430.41) The Declaration of Bayan Salehi, executed on February 18, 2026, sets forth the meet and confer efforts of counsel for the Defendant, and counsel's attempts to resolve the dispute informally through written correspondence.

The Court finds that the declaration does not satisfy the requirement of Code of Civil Procedure section 430.41, that "... the demurring party shall meet and confer in person, by telephone, or by video conference with the party who filed the pleading that is subject to demurrer." The Court will exercise its discretion to address the merits.

Legal Standard

A demurrer for sufficiency tests whether the complaint states a cause of action.¿ (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)¿When considering demurrers, courts read the allegations liberally and in context.¿ (Wilson v. Transit Authority of City of Sacramento (1962) 199 Cal.App.2d 716, 720-21.)¿In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice.¿(Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.)¿"A demurrer tests the pleading alone, and not on the evidence or facts alleged." (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes the truth of the complaint's properly pleaded or implied factual allegations. (Id.) The only issue a demurrer is concerned with is whether the complaint, as it stands, states a cause of action. (Hahn, supra, 147 Cal.App.4th at 747.)

First Cause of Action: Professional Negligence Defendants demur on the grounds that the Complaint fails to allege what professional engineering standards govern forensic vehicle inspections, how Shideh's conduct fell below those standards, or what he should have done differently. "The elements of a cause of action for professional negligence are (1) the existence of the duty of the professional to use such skill, prudence, and diligence as other members of the profession commonly possess and exercise; (2) breach of that duty; (3) a causal connection between the negligent conduct and the resulting injury; and (4) actual loss or damage resulting from the professional negligence." (Oasis West Realty, LLC v.

Goldman (2011) 51 Cal.4th 811, 821.) Here, the Complaint alleges that Shideh is a licensed professional engineer retained by Mercury to inspect vehicles serviced at Plaintiff's facility. (Complaint P.P. 115, 120.) It alleges that he owed a duty of care to Plaintiff under a multi-factor balancing test, because his reports were intended to influence and affect Plaintiff's operations, certification status, warranty eligibility, and ability to conduct business, because harm to Plaintiff was foreseeable and certain, and because there was a close connection between his conduct and that harm. (Complaint P.P. 116, 121; see Biakanja v.

Irving (1958) 49 Cal.2d 647.) As to breach, the Complaint alleges that Shideh prepared and disseminated false and misleading inspection reports mischaracterizing rodent damage as man-made, without a factual or evidentiary basis, and engaged in conduct that failed to meet accepted engineering and automotive standards of care. (Complaint P. 117.) It alleges that he applied recycled boilerplate phrases without meaningful testing, objective analysis, or supporting data, relying instead on superficial photographic interpretation. (Complaint P.P. 49-50, 72, 210.)

It alleges that he inspected vehicles long after repairs were completed and routinely ignored evidence of rodent activity such as nests, chew marks, and technician photographs. (Complaint P. 211.) It alleges that on December 7, 2023 he opined that the washer hoses were damaged by human hands while simultaneously acknowledging that those hoses had been removed before his inspection. (Complaint P. 110.) It alleges that his conclusions contradicted the findings of Mercury's own field inspector on the same vehicles. (Complaint P.P. 103-108.)

Further, it alleges that his conduct fell below the standard applicable to inspectors and engineers in the same trade and industry. (Complaint P. 123.) As to causation and damages, the Complaint alleges that Mercury relied on the reports to deny claims and to issue a $759,457.43 demand, and that Plaintiff suffered lost repair revenue, canceled work, damaged commercial relationships, reputational harm, and costs incurred in responding to the demand. (Complaint P.P. 74, 118, 124-125.) Negligence may ordinarily be pleaded in general terms, provided the plaintiff indicates the acts or omissions said to have been negligently performed. (Berkley v.

Dowds (2007) 152 Cal.App.4th 518, 527.) The legal conclusion that a 'duty' exists is not necessary." (Pultz v. Holgerson, 184 Cal. App. 3d 1110, 229 Cal. Rptr. 531 (Ct. App. 1986).) Duty can instead be inferred from the ultimate facts alleged -- for example, the fact that a defendant owned and managed property is sufficient to imply a duty to exercise reasonable care without any further legal characterization. (Pultz v. Holgerson, 184 Cal. App. 3d 1110, 229 Cal. Rptr. 531 (Ct. App. 1986).) The Complaint identifies Shideh's role as an engineer retained by Mercury, his conduct in the underlying investigative processes, and that his conduct fell below the standard of care.

Based on the above, a duty can be inferred, and no further legal characterization of that duty is required at the pleading stage. Plaintiff has therefore alleged facts to support duty, breach, causation, and damages. The demurrer to the First Cause of Action is OVERRULED. Second Cause of Action: General Negligence In California, a plaintiff generally cannot bring separate causes of action for both professional negligence and general negligence based on the same alleged breach of duty. "[W]ith respect to questions of substantive law," ordinary and professional negligence "comprise essentially one form of action." (Flowers v.

Torrance Mem'l Hosp. Med. Ctr., 8 Cal. 4th 992, 884 P.2d 142 (1994).) Here, the Complaint alleges the Second Cause of Action against the same defendants, arising from the same

conduct, and resting on the same duty, breach, causation, and damages as the First Cause of Action for professional negligence. Accordingly, the Court finds the Second Cause of Action to be duplicative as pled. The demurrer to the Second Cause of Action is SUSTAINED WITHOUT LEAVE TO AMEND. Third Cause of Action: Fraud Defendants demur on the grounds that the Complaint fails to allege that Plaintiff relied on Shideh's statements or that Shideh intended Plaintiff to rely on them. "The elements of fraud are (a) a misrepresentation (false representation, concealment, or nondisclosure); (b) scienter or knowledge of its falsity; (c) intent to induce reliance; (d) justifiable reliance; and (e) resulting damage." (Lazar v.

Superior Court (1996) 12 Cal.4th 631, 638.) Fraud must be pleaded with particularity as to how, when, to whom, and by what means the representations were made. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) As to intent to induce reliance, the Complaint alleges that Defendants intended Car Pros, its customers, and its third-party business partners to rely on the fabricated findings in commercial contexts to justify denials, initiate reimbursement demands, and damage Plaintiff's reputation. (Complaint P.P. 129, 132, 135-136.)

It alleges that Defendants intended Plaintiff to rely on the representations in evaluating and responding to Mercury's March 2024 demand in the amount of $759,457.43. (Complaint P. 212.) As to reliance, the Complaint alleges that between late November 2023 and April 2024 the representations were made to Car Pros through inspection reports and related communications. (Complaint P. 208.) It alleges that, in response, Car Pros launched internal investigations, delayed or halted claim submissions, reevaluated its repair protocols, and ceased performing rodent-damage repair work. (Complaint P.P. 101, 137, 213.)

As to damages, it alleges economic loss, reputational injury, and legal fees incurred in defending against the demand. (Complaint P. 131.) Defendants' contention that Plaintiff could not have relied on reports it did not possess until March 2025 raises a factual dispute the Complaint does not resolve against Plaintiff on its face. The Complaint distinguishes between general awareness of the accusations in April 2024 and receipt of the reports themselves in March 2025. (Complaint P.P. 112, 208, 213.)

Justifiable reliance is normally a question of fact. (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1239.) At the pleading stage, Plaintiff has alleged facts to support intent to induce reliance, justifiable reliance, and damages. The demurrer to the Third Cause of Action is OVERRULED. Fourth Cause of Action: Intentional Interference with Prospective Economic Relations Defendants demur on the grounds that the Complaint fails to allege independently wrongful conduct and fails to identify specific prospective economic relationships that were disrupted.

The elements are "(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant." (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153.)

The defendant's conduct must also be independently wrongful, meaning proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard. (Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 393; Korea Supply Co. v. Lockheed Martin Corp., supra, 29 Cal.4th at p. 1159.) Here, the Complaint alleges an economic relationship with current and prospective customers and insurance partners carrying probable future economic benefit, including repeat rodent-repair work and ongoing service referrals. (Complaint P. 140.)

It identifies particular relationships through the itemized repair orders, customer transactions, dates, and dollar amounts incorporated by reference. (Complaint P.P. 102-112.) It alleges that Defendants knew of these relationships through their dealings with Car Pros, their knowledge of the repair

industry, and their involvement in claims inspections connected to Car Pros' operations. (Complaint P. 141.) As to independently wrongful conduct, the Complaint alleges the fabrication of inspection reports, the false attribution of rodent damage to man-made causes, and the dissemination of those falsehoods to customers and third parties. (Complaint P. 142.) That conduct is, as alleged, independently actionable as fraud, trade libel, and negligent misrepresentation. (Complaint P.P. 126-137, 146-153, 207-213.)

The Complaint alleges that Defendants intended to disrupt those relationships, or knew that disruption was substantially certain to result, in order to suppress rodent-repair claims and retaliate against Car Pros. (Complaint P. 143.) It alleges actual disruption in the form of canceled service appointments, non-renewal of customer relationships, and a decline in referrals and claim-related repair volume. (Complaint P. 144.) It alleges resulting economic harm, including lost revenue, reputational damage, and legal costs. (Complaint P. 145.)

Defendants' argument that a professional disagreement over inspection conclusions cannot be independently wrongful assumes the falsity of Plaintiff's allegations. The Complaint alleges knowing falsity, not disagreement, and the Court must accept that allegation as true. (Complaint P.P. 128, 132, 142.) Plaintiff has therefore alleged facts to support the existence of prospective relationships, knowledge, independently wrongful intentional acts, disruption, and harm. All challenged elements are supported by the facts alleged in the Complaint.

The demurrer to the Fourth Cause of Action is OVERRULED. Fifth Cause of Action: Trade Libel Defendants demur on the grounds that the Complaint fails to identify specific customers who refrained from dealing with Plaintiff or the particular transactions lost, and fails to allege publication by Shideh, since any communication to customers was made by Mercury. "A cause of action for trade libel includes the following elements: (1) the defendant published a statement that tended to disparage the plaintiff's product or property; (2) the statement was provably false; (3) the defendant either knew the statement was false or acted with reckless disregard for its falsity; and (4) the statement caused actual pecuniary damage." (ZF Micro Solutions, Inc. v.

TAT Capital Partners, Ltd. (2022) 82 Cal.App.5th 992, 1002; see also Nichols v. Great American Ins. Companies (1985) 169 Cal.App.3d 766, 773.) Here, the Complaint alleges the publication of false and disparaging statements about Plaintiff's business operations, including inspection reports and verbal representations asserting that Plaintiff's personnel were responsible for damage inconsistent with observed repair needs. (Complaint P. 147.) It alleges that the statements were disseminated to third parties including current and prospective customers, vendors, and industry participants for commercial purposes. (Complaint P.P. 135-136, 148-149.)

It further alleges that Shideh published the statements to Mercury -- a person other than Plaintiff -- knowing Mercury would rely on them to deny otherwise valid rodent-damage claims. (Complaint P.P. 50-51, 98, 112, 132.) As to falsity, the Complaint alleges that the statements were provably false factual assertions rather than opinion, because the damage was in fact rodent-caused as confirmed by factory-certified technicians and by Mercury's own field inspector. (Complaint P.P. 103-108, 187, 210.)

As to knowledge, it alleges that Defendants knew the statements were false or acted with reckless disregard for their truth or falsity. (Complaint P.P. 128, 150.) As to pecuniary damage, the Complaint alleges the loss of specific customer relationships, financial harm from canceled work and lost future business, and reputational damage. (Complaint P. 152.) It supplies supporting particulars in the form of itemized transactions identifying the vehicles, repair order numbers, dates, and dollar amounts at issue, including the $7,143.41, $6,824.81, $1,950, $871.28, and $440.11 transactions and the resulting denials and non-payments. (Complaint P.P. 103-112.)

The authority Defendants invoke for the proposition that particular purchasers must be identified addressed the sufficiency of proof following trial, not the sufficiency of a pleading. (Erlich v. Etner (1964) 224 Cal.App.2d 69, 73.) As to publication, a defendant who supplies a disparaging statement knowing and intending that it be republished to the persons whose conduct it will influence may be liable for that republication, and whether Mercury's transmittal of the findings to insureds and customers was foreseeable is a question of fact.

The Complaint alleges that Shideh knew and intended precisely that. (Complaint P.P. 129, 132.)

Plaintiff has therefore alleged facts to support publication, falsity, knowledge of falsity, and pecuniary damage. All challenged elements are supported by the facts alleged in the Complaint. The demurrer to the Fifth Cause of Action is OVERRULED. Sixth Cause of Action: Unfair Competition (Bus. & Prof. Code Sec. 17200) Defendants demur on the grounds that the UCL claim is wholly derivative of the predicate tort claims, all of which they contend fail, and that the "fraudulent" prong fails because Shideh's confidential opinions to a single client could not have deceived members of the public.

The UCL prohibits any unlawful, unfair, or fraudulent business act or practice. (Bus. & Prof. Code, Sec. 17200.) The "unlawful" prong borrows violations of other laws and treats them as unlawful practices that the unfair competition law makes independently actionable. (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.) A plaintiff must also have suffered injury in fact and lost money or property as a result of the unfair competition. (Bus. & Prof. Code, Sec. 17204.)

As to the "unlawful" prong, as discussed above, the predicate claims survive this demurrer, and in any event the Eleventh and Twelfth Causes of Action against Shideh are unchallenged. That alone supports overruling the demurrer to this claim. As to the "fraudulent" prong, the authority Defendants cite sustained a demurrer where the pleading identified no particular statutory violation and described no manner of public deception in what was fundamentally a contract dispute. (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 619.)

The fraudulent prong is one of three independent bases for liability under the UCL, written in the disjunctive so that a practice need only satisfy one prong to constitute unfair competition. (Sepanossian v. Nat'l Ready Mixed Concrete Co., 97 Cal. App. 5th 192, 315 Cal. Rptr. 3d 373 (2023).) Plaintiff has therefore alleged facts to support unlawful, unfair, and fraudulent business practices and statutory standing at the pleading stage. All challenged elements are supported by the facts alleged in the Complaint.

The demurrer to the Sixth Cause of Action is OVERRULED. Seventh Cause of Action: Aiding and Abetting Fraud Defendants demur on the grounds that the Complaint fails to allege that Mercury committed an underlying fraud and fails to allege that Shideh provided substantial assistance to any such fraud. "Liability may... be imposed on one who aids and abets the commission of an intentional tort if the person (a) knows the other's conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other to so act or (b) gives substantial assistance to the other in accomplishing a tortious result and the person's own conduct, separately considered, constitutes a breach of duty to the third person." (Casey v.

U.S. Bank National Assn. (2005) 127 Cal.App.4th 1138, 1144.) As discussed above, the Court overruled Defendants' demurrer to Plaintiff's fraud cause of action. As to knowledge and substantial assistance, the Complaint alleges that Shideh's role in the scheme was central, that his reports were neither independent nor objective, and that he was brought in specifically to help manufacture a justification for denial after the fact. (Complaint P. 98.) It alleges that he tailored his reports to fulfill Mercury's objectives and to give the appearance of technical legitimacy to otherwise baseless allegations. (Complaint P. 174.)

It alleges that he implicitly understood what outcome was expected and was financially motivated to accommodate Mercury's interests. (Complaint P. 12.) It alleges that he fabricated findings knowing they would be used to justify fraudulent denials. (Complaint P. 132.) It alleges resulting financial harm, reputational injury, and legal and investigative expenses. (Complaint P. 175.) Whether Shideh's provision of engineering opinions was legitimate professional service or knowing participation in a scheme is precisely the factual dispute the Complaint frames, and it cannot be resolved on demurrer.

Plaintiff has therefore alleged facts to support an underlying tort, knowledge, and substantial assistance. All challenged elements are supported by the facts alleged in the Complaint. The demurrer to the Seventh Cause of Action is OVERRULED.

Eighth Cause of Action: Conspiracy to Commit Fraud Defendants demur on the grounds that the Complaint fails to allege any agreement between Shideh and Mercury, pleading only the legal conclusion that an agreement existed without alleging when it was formed, how it was communicated, what terms it contained, or what consideration was exchanged, and on the further ground that the alleged overt acts are merely the professional services Shideh was retained to perform. To plead civil conspiracy, a plaintiff must allege "(1) the formation and operation of the conspiracy, (2) wrongful conduct in furtherance of the conspiracy, and (3) damages arising from the wrongful conduct." (AREI II Cases (2013) 216 Cal.App.4th 1004, 1022; see Applied Equipment Corp. v.

Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510-511.) Here, the Complaint alleges that Mercury and Shideh formed an agreement, express or implied, to attribute rodent damage to man-made causes regardless of the actual evidence, with the shared objective of fabricating justification for claim denials and retroactively shifting financial responsibility to repair facilities like Car Pros. (Complaint P. 178.) It alleges that Mercury, aware of Shideh's longstanding pattern of issuing denial-supportive reports, retained him specifically to produce findings that could support the $759,457.43 demand and suppress future rodent- repair claims. (Complaint P. 133.)

It alleges that Shideh implicitly understood what outcome was expected and was financially motivated to deliver it. (Complaint P. 12.) It alleges that Mercury did not merely retain Shideh in good faith, but directed and relied upon his fabricated findings to execute a predetermined strategy of denial. (Complaint P. 51.) As to wrongful conduct in furtherance, the Complaint alleges that Shideh issued boilerplate inspection reports not based on the actual condition of the vehicles, and that Mercury used those reports to issue the reimbursement demand and to disseminate fabricated findings to Car Pros' customers, vendors, and potentially regulators outside any litigation or claims-processing setting. (Complaint P. 179.)

As to damages, it alleges a chilling of legitimate business activity, loss of rodent-related repair work, insurer reluctance to authorize claims, increased scrutiny from commercial partners, financial loss, and reputational damage. (Complaint P.P. 180-181.) A conspiracy need not be pleaded with the specificity Defendants demand. A conspiracy may be inferred from the nature of the acts done, the relationship of the alleged conspirators, the interests of the parties, and the individual circumstances surrounding each case. (Saxer v.

Philip Morris, Inc. (1975) 54 Cal.App.3d 7, 19.) General allegations of agreement have been held sufficient, and the conspiracy averment has even been held unnecessary provided the unlawful acts or civil wrongs are otherwise sufficiently alleged. (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 47-48.) Plaintiff has therefore alleged facts to support formation and operation of the conspiracy, wrongful conduct in furtherance, and damages. All challenged elements are supported by the facts alleged in the Complaint.

The demurrer to the Eighth Cause of Action is OVERRULED. Ninth Cause of Action: Conspiracy to Commit Trade Libel Defendants demur on the grounds that there is no underlying tort of trade libel and that the Complaint fails to allege any agreement between Shideh and Mercury to make disparaging statements to Car Pros' customers. Here, the Complaint alleges that Defendants formed an agreement, express or implied, to make and disseminate false and disparaging statements about Car Pros for commercial gain, giving rise to a coordinated campaign intended to damage Plaintiff's business reputation and relationships. (Complaint P. 184.)

It alleges that pursuant to that agreement Defendants engaged in overt acts including publishing and causing to be published false and disparaging statements concerning Plaintiff's goods, products, or services. (Complaint P. 185.) It alleges that Defendants made statements outside the scope of any formal proceeding, directed to commercial audiences, intended to divert business and discourage vendor and customer relationships. (Complaint P. 186.) It alleges that the statements were factual assertions about the quality and integrity of Plaintiff's services, presented as reliable findings despite lacking evidentiary support. (Complaint P. 187.)

It alleges that Defendants knew or should have known the statements were false and would cause harm to Plaintiff's business or economic interests. (Complaint P. 188.) It alleges that Plaintiff suffered lost customers, lost business opportunities, and damage to reputation,

and that the conspiracy was a substantial factor in causing that harm. (Complaint P.P. 189-190.) The underlying tort of trade libel is adequately pleaded for the reasons above. The agreement is adequately pleaded for the reasons stated above. Plaintiff has therefore alleged facts to support formation and operation of the conspiracy, wrongful conduct in furtherance, and damages. The demurrer to the Ninth Cause of Action is OVERRULED. Motion to Strike Defendants move to strike Paragraph 4 of the Prayer for Relief seeking exemplary and punitive damages, and all references to punitive or exemplary damages as they relate to Shideh and SEI.

Civil Code Section 3294(a) authorizes the recovery of punitive damages in non-contract cases "where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice... (1) "Malice" means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others. (2) "Oppression" means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights. (3) "Fraud" means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the party of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury. (Civ.

Code Sec. 3294(c)(1)-(3).) The motion argues that the Complaint alleges no more than the performance of professional services and disputed professional conclusions. Read as a whole, the Complaint alleges considerably more. Shideh The Complaint alleges that Shideh is a "hired gun" with a decade-long history of generating false findings to support insurers' claim denials. (Complaint P. 8.) It alleges that he has a proven track record of attributing legitimate damage to man-made causes, that he implicitly understood what outcome Mercury expected, and that he was financially motivated to deliver it. (Complaint P. 12.)

It alleges that he fabricated false evidence and lied about rodent damage in order to intimidate small businesses and chill the submission of rodent-damage claims. (Complaint P. 14.) It alleges that he supports denial in more than 90% of the claims he evaluates and disregards relevant data to fit a predetermined denial narrative. (Complaint P. 49.) It alleges that he issues reports drawn from incomplete investigations and superficial inspections. (Complaint P. 56.) Most significantly, the Complaint alleges that Shideh knowingly prepared and published reports accusing Plaintiff's technicians of deliberately cutting wiring harnesses with sharp tools or industrial razor blades and then falsely claiming rodent causation -- in substance, an accusation of criminal insurance fraud. (Complaint P.P. 110, 112, 147-149.)

It alleges that he did so for the purpose of disparaging Plaintiff's reputation and causing it financial loss. (Complaint P.P. 132, 150.) Knowingly publishing false accusations of criminal conduct against a business, for the purpose of harming that business's reputation and inflicting economic loss, satisfies both the intent-to-injure prong and the despicable-conduct prong of the statutory definition of malice, and states fraud as statutorily defined. (Civ. Code, Sec. 3294, subds. (c)(1), (c)(3).)

Punitive damages are not categorically unavailable in negligence-based claims where the defendant acted with malice or a fraudulent or evil motive, and malice may be established by inference from the defendant's conduct. (Taylor v. Superior Court (1979) 24 Cal.3d 890, 894-895; Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1228.) The Motion to Strike is DENIED as to Defendant Shahrokh "Sean" Shideh. Shideh Engineering, Inc. Defendants separately argue that the Complaint fails to allege facts satisfying the statutory prerequisites for imposing punitive damages on a corporate employer. (Civ.

Code, Sec. 3294, subd. (b).) That subdivision

provides that an employer is not liable for punitive damages based upon the acts of an employee unless the employer had advance knowledge of the unfitness of the employee and employed him with a conscious disregard of the rights or safety of others, or authorized or ratified the wrongful conduct, or was personally guilty of oppression, fraud, or malice, and it further requires that as to a corporate employer the advance knowledge, authorization, ratification, or act of oppression, fraud, or malice be on the part of an officer, director, or managing agent of the corporation. (Ibid.)

The Complaint alleges only that SEI is a California corporation with its principal place of business in Los Angeles County. (Complaint P. 23.) It elsewhere refers to Shideh and SEI collectively as active participants in the alleged conduct. (Complaint P. 60.) It does not allege that Shideh is an officer, director, or managing agent of SEI, nor does it allege advance knowledge, authorization, or ratification by any such person. Plaintiff's opposition responds that SEI's 2026 Statement of Information identifies Shideh as SEI's Chief Executive Officer and a director, citing "Exhibit C" to the Request for Judicial Notice.

No Exhibit C accompanies the Request for Judicial Notice as filed, and the Court cannot take judicial notice of a document that has not been submitted. The defect appears readily curable by amendment, and leave to amend is freely granted where a pleading defect can reasonably be cured. (Vaccaro v. Kaiman (1998) 63 Cal.App.4th 761, 768.) The Motion to Strike is GRANTED WITH LEAVE TO AMEND as to Defendant Shideh Engineering, Inc., limited to the allegations required as to a corporate employer. (Civ.

Code, Sec. 3294, subd. (b).

Conclusion

The demurrer is SUSTAINED WITHOUT LEAVE TO AMEND as to the Second Cause of Action (General Negligence) as duplicative of the First Cause of Action, and is OVERRULED as to the First, Third, Fourth, Fifth, Sixth, Seventh, Eighth, and Ninth Causes of Action. The Motion to Strike is DENIED as to Defendant Shahrokh "Sean" Shideh, and is GRANTED WITH LEAVE TO AMEND as to Defendant Shideh Engineering, Inc., limited to the allegations required to impose punitive damages on a corporate employer under Civil Code section 3294, subdivision (b).

Plaintiff shall file and serve any amended complaint within 30 days. The Case Management Conference is continued to December 21, 2026 at 8:30 a.m. Moving party to give notice. Parties who intend to submit on this tentative must send an email to the Court at [email protected] indicating intention to submit on the tentative, and copying all parties in the email communication. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter.

Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue. If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court will adopt the tentative as the final order, or take the matter off calendar at its discretion. | Home -->)" -->