Joseph Plasencia v. Uriel Gonzalez, et al.

(Santa Monica Courthouse: Dept. P) August 19, 2026 DEPARTMENT P LAW AND MOTION RULINGS

Ruling Joseph Plasencia v. Uriel Gonzalez, et al. Case No. 23SMCV05503 Felco General Construction's Demurrer to Plaintiff's Third Amended Complaint Hearing Date: August 19, 2026 Background Plaintiff Joseph Plasencia sues Defendants Uriel Gonzalez ("Gonzalez"), Felipe Dejesus Carillo Cobian an individual ("Cobain") and d/b/a Felco General Construction ("Felco") (collectively, "Defendants"), and Philadelphia Indemnity Insurance Company for breach of contract, negligence, and fraud arising out of Defendants' allegedly below-standard remodel of Plaintiff's property at 100 S.

Westgate Ave., Los Angeles, CA 90049. (Third Amended Complaint ["TAC"], P. 2, 41.) Plaintiff filed the initial complaint in November 2023. In July 2024, the Court granted default judgment against Gonzalez, which Gonzalez set aside in September 2024. Gonzalez filed a cross-complaint against Plaintiff in November 2024. Plaintiff filed a Cross-Complaint for interpleader against Gonzalez in December 2024. In April 2025, the Court granted Gonzalez's motion for judgment on the pleadings against Plaintiff's cross-complaint and granted Plaintiff leave to amend his initial complaint.

Plaintiff filed the First Amended Complaint on April 25, 2025. Defendants filed a demurrer on July 24, 2025, following an automatic extension. The Court overruled Defendant's demurrer in part and sustained in part, with leave to amend. Plaintiff filed a Second Amended Complaint on February 11, 2026. The Court, however, granted a stipulation on March 17, 2026, allowing Plaintiff to file a Third Amended Complaint to state additional facts to the causes of action alleged against Defendants. On April 1, 2026, Plaintiff filed the TAC, alleging causes of action for: (1) breach of contract; (2) negligence; (3) unjust enrichment; (4) breach of implied warranty; (5) violation of Business and Professions Code section 17200; (6) violation of Business and Professions Code section 7031; (7) surety bond; (8) conspiracy to defraud; and (9) fraud.

On June 3, 2026, following an extension, Defendants filed a demurrer as to the TAC's fifth, eighth, and ninth causes of action, and a motion to strike portions of the TAC as to disgorgement claims. As to the fifth cause of action, Defendants argue that the TAC fails to state sufficient

facts to constitute a cause of action and is uncertain against Cobain because the TAC fails to establish a duty to disclose or that Plaintiff relied on any statement or conduct by Cobain. (Demurrer, p. 1.) As to the eighth cause of action, Defendants argue that TAC lacks sufficient facts to maintain a conspiracy claim against Cobain because conspiracy is not an independent tort and the fraud claim fails. (Ibid.) Lastly, Defendants demur to the ninth cause of action on the grounds that the TAC does not allege that Cobain made any representation directly to Plaintiff, nor does the TAC adquetely allege that Cobain had a duty to make any disclosures under the four Heliotis factors. (Demurrer, p. 2.) (Heliotis v.

Schuman (1986) 181 Cal.App.3d 646). In response, Plaintiff argues that the TAC states sufficient facts to constitute causes of action for fraud, conspiracy to defraud, and violation of Business and Professions Code section 17200. (Opp., p. 5-11.) Plaintiff also argues that it cured the deficiencies identified in the Court's January 27, 2026 ruling sustaining the demurrer to the conspiracy and section 17200 causes of action. (Opp., at p. 11.) In reply, Defendants argue that even if Cobain was holding himself out as a subcontractor, this does not constitute an affirmative misrepresentation. (Reply at pp. 3-4.)

Defendants further maintain that Plaintiff fails to establish any duty do make a disclosure under the Heliotis exceptions and Plaintiff's reliance on Gonzalez cannot be imputed to Defendants. (Reply at p. 6.) Lastly, Defendants argue that the conspiracy and UCL claims fail because the underlying fraud claim fails and the TAC fails to allege that Defendants personally violated any statute. (Reply at pp. 6-9.) Demurrer In a demurrer proceeding, the defects in the complaint 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 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. (Ibid.) The only issue a demurrer is concerned with is whether the complaint, as it stands, states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) Where a demurrer is sustained, leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v.

Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the plaintiff to show the court that a pleading can be amended successfully. (Id.; Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.) However, "[i]f there is any reasonable possibility that the plaintiff can state a good cause of action, it is error to sustain a demurrer without leave to amend." (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 245). Before filing a demurrer, parties must meet and confer in person or by phone. (Code Civ.

Proc. Sec. 430.41.)

Discussion

Meet and Confer Defendants submit the Mellor Declaration, attesting that the parties met and conferred via letter exchanges and were unable to resolve the demurrer before filing. (Mellor Declaration, P.P. 5-6.) This satisfies the meet and confer requirement. (Code Civ. Proc. Sec. 430.41.) Fraud Defendants argue that the TAC does not allege that Cobain made any representations directly to Plaintiff, who contracted and had contact with Gonzalez only. (Demurrer, p. 7.) Defendants also argue that any nondisclosure is not actionable because none of the four exceptions outlined in Heliotis v.

Schuman are present here. (Heliotis v. Schuman (1986) 181 Cal.App.3d 646). Specifically, Defendants argue that: (1) the FAC does not allege a fiduciary relationship between Plaintiff and Cobain; (2) the FAC contains no allegation that Cobain had exclusive knowledge of any material fact unknown to Plaintiff; (3) Plaintiff admits he knew or should have known about Gonzalez's license status; and (4) the TAC only alleged silence, which is not considered active concealment without a duty to speak. (Ibid.)

In reply, Defendants argue that Plaintiff's reliance on Cobain's posturing as a subcontractor through his conduct on the project is not an affirmative misrepresentation. (Reply at pp. 3-4.) Defendants also maintain that Plaintiff fails to establish any of the Heliotis exceptions. (Reply at pp. 4-5.) Lastly, Defendants argue that Plaintiff's reliance on Gonzalez's misrepresentations does not extend to reliance on Cobain. (Reply at pp. 5-6.) Plaintiff's TAC alleges that Cobain knew Gonzalez was not qualified and lacked the necessary licensure, and that Plaintiff was unaware of such facts. (TAC, P. 26.)

The FAC further alleges that Defendants fraudulently claimed and represented that they were subcontractors even though they were hired to work under Gonzalez's name and to act as the licensed contractors. (TAC, P.P. 26-28.) Gonzalez allegedly told Cobain not to have contact with Plaintiff and Cobain agreed and promised not to disclose to Plaintiff that Defendants were the only licensed contractors and that Gonzalez was defrauding him. (TAC, P. 29.) Plaintiff further alleges that Cobain had a duty to disclose Gonzalez's licensure status as "the true general contractor," but instead participated in the fraudulent scheme to his economic advantage. (TAC, P.P. 30-32.)

Cobain allegedly knew that his nondisclosure would induce Plaintiff's reliance in hiring Gonzalez to his detriment; Plaintiff alleges that without said nondisclosure, he would not have hired Gonzalez. (TAC, P.P. 34-37.) Plaintiff, however, fails to allege a direct transactional relationship between Defendants and himself. Plaintiff alleges that Cobain did "not have personal contact" with him at any time. (TAC, P. 29.) The second, third, and fourth circumstances in Heliotis v. Schuman (1986) 181 Cal.App.3d 646 presuppose an existing relationship between the plaintiff and defendant that creates a duty to disclose. (See Rattagan v.

Uber Techs., Inc. (2024) 17 Cal.5th 1, 41 ["Such a transaction must necessarily arise from direct dealing between the plaintiff and the defendant; it cannot arise between the defendant and the public at large."].) Plaintiff does not allege a direct dealing between Defendants and himself. Thus, because Plaintiff fails to allege a direct, transactional relationship between Defendants and himself, a duty to disclose does not arise. (See Hoffman v. 162 N. Wolfe LLC (2014) 228 Cal.App.4th 1178, 1193 ["Based upon the absence of a relationship between the Hoffmans and 162 LLC, we conclude that there was no triable issue of material fact as to the second cause of action of the Cross-Complaint for fraudulent concealment/suppression of facts."].)

The Demurrer to Plaintiff's fraud cause of action is SUSTAINED without leave to amend. Conspiracy to Defraud Defendants argue that the conspiracy claim is derivative of the fraud claim and thus fails. Defendants further argue that even if the Court finds the fraud claim to be sufficient, the TAC fails to allege facts showing an agreement between Gonzalez and Cobain to defraud Plaintiff or that Cobain took any actions with the specific intent to further a fraudulent scheme beyond completing his construction work. (Demurrer at p. 8.)

In reply, Defendants maintain that the conspiracy claim fails because the underlying fraud claim fails and that an agreement to defraud has not been alleged. (Reply at p. 7.) Plaintiff alleges that Defendants "contracted with" Gonzalez "to do the work under Gonzalez's name and to act as the licensed contractor without the knowledge of or disclosure to" Plaintiff. (TAC, P. 26.) Plaintiff also alleged that Cobain "knew that Gonzalez was not a licensed contractor or qualified, skilled or competent to perform the remodel." (TAC, P. 28.)

Specifically, Plaintiff alleges that Gonzalez and Defendants "agreed and conspired" to have Defendants perform the construction work and to conceal Gonzalez's lack of licensure. (TAC, P. 86.) Plaintiff alleges that Defendants and Gonzalez also agreed to a certain fixed price and allowed Gonzalez to inflate the price for his own profit and to Plaintiff's detriment. (Ibid.) Said conspiracy was allegedly designed to unfairly extract money from Plaintiff for Gonzalez's enrichment. (TAC, P. 89.) The TAC alleges that in furtherance of the conspiracy, Defendants failed to disclose material facts to Plaintiff and worked on the remodel knowing that Gonzalez was not licensed. (TAC, P. 90.)

Because of the conspiracy, Plaintiff was harmed. (TAC, P. 91.) Although the Court finds that Plaintiff did not sufficiently plead fraud as to Defendants (see above), Plaintiff did sufficiently plead facts showing the commission of fraud by Gonzalez, the primary tortfeasor, who had a legal relationship with Plaintiff and is a coconspirator. (See Los Angeles Memorial Coliseum Com. v. Insomniac, Inc. (2015) 233 Cal.App.4th 803, 834 ["Given that the alleged facts showed the commission of an underlying tort by one of the alleged coconspirators, the allegations that defendants conspired

with DeStefano to conceal the existence of the consulting agreement from plaintiffs were sufficient to state a cause of action against defendants for fraud based on a conspiracy theory of liability. Thus, the trial court erred by sustaining the demurrers to the conspiracy to defraud claim against defendants."].) Thus, the allegations that Defendants conspired with Gonzalez to conceal Gonzalez's unlicensed status and to "pad" billing is sufficient to state a cause of action against Defendants for fraud based on a conspiracy theory of liability.

Defendants' demurrer to Plaintiff's cause of action for conspiracy to defraud is OVERRULED. Violation of Business & Professions Code Sec. 17200 Defendants argue that Plaintiff's complaint fails to allege unlawful, unfair, or fraudulent business practices because Plaintiff does not allege reliance on Cobian's conduct. Also, because the underlying fraud and conspiracy claims fail, so does the UCL claim. In reply, Defendants argue that the TAC does not sufficiently allege fraudulent business practices because it lacks allegations of Plaintiff's reliance on Defendants' conduct. (Reply at pp. 7-8.)

In a similar vein, Defendants argue that the TAC fails to allege unlawful business practices by Defendant because Plaintiff does not allege that Defendants personally violated a statute. (Reply at pp. 8-9.) Plaintiff argues that the conduct alleged violates the Contractors State License Law's licensing and disclosure requirements. (Opp., at p. 10.) Under Business and Professions Code section 7118, "[e]ntering into a contract with a contractor while such contractor is not licensed as provided in this chapter constitutes a cause for disciplinary action."

In addition, under section 7114, subdivision (a), "[a]iding or abetting an unlicensed person to evade the provisions of this chapter or combining or conspiring with an unlicensed person...or acting as agent or partner or associate, or otherwise, of an unlicensed person with the intent to evade the provisions of this chapter constitutes a cause for disciplinary action." Plaintiff alleges that Defendants "contracted with" Gonzalez "to do the work under Gonzalez's name and to act as the licensed contractor without the knowledge of or disclosure to" Plaintiff. (TAC, P. 26.)

Plaintiff also alleged that Cobain "knew that Gonzalez was not a licensed contractor or qualified, skilled or competent to perform the remodel." (TAC, P. 28.) Sections 7114, subdivision (a) and 7118 fall under the UCL's unlawful prong's broad coverage. (See Cel-Tech Commc'ns, Inc. v. Los Angeles Cellular Tel. Co. (1999) 20 Cal.4th 163, 180 ["'anything that can properly be called a business practice and that at the same time is forbidden by law.'"]; see also Gutierrez v. Carmax Auto Superstores California (2018) 19 Cal.App.5th 1234, 1265 ["[v]irtually any statute or regulation (federal or state) can serve as a predicate for a UCL unlawful practice cause of action.'"].)

Thus, Plaintiff successfully alleges Defendants engaged in unlawful business practices. Defendants' demurrer to Plaintiff's cause of action under the UCL is OVERRULED.

Leave to Amend The Court sustains the demurrers to the fraud cause of action without leave to amend because based on the facts alleged (i.e. that Plaintiff never spoke or dealt directly with Defendants), Defendants did not have a duty to disclose Gonzalez's unlicensed status. Because a duty to disclose is a required fraud pleading element, and Plaintiff has unsuccessfully attempted to cure the deficiencies with previous amendments, the Court finds that there is not a reasonable possibility that the defect can be cured with an amendment.

Motion To Strike Defendants move to strike the following portions of Plaintiff's TAC: 1. "disgorgement of all revenues, earnings, profits, compensation, and benefits" in paragraph 72. 2. "disgorgement" from the Prayer for Relief, page 16, paragraph 1. The Court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (Code Civ. Proc., Sec. 436, subd. (a).) The Court may also strike 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, subd. (b).)

The grounds for a motion to strike are that the pleading has irrelevant, false or improper matter, or has not been drawn or filed in conformity with laws. (Id., Sec. 436.) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Id., Sec. 437.) Defendants argue that non-restitution disgorgement is not an available remedy under the UCL for a private plaintiff. (Mot. to Strike, at p. 4.) Defendants further argue that Plaintiff seeks all profits, rendering the disgorgement request improper. (Ibid.)

In reply, Defendant argues that Plaintiff's opposition mischaracterizes Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, because the language here is broader than limiting recovery to Plaintiff's own money. (Reply at p. 3.) Defendants further argue that County of San Bernardino v. Walsh (2007) 158 Cal.App.4th 533, does not support Plaintiff's claim because Cobain is not a fiduciary. (Reply at p. 4.) Defendants conclude that the challenged language is not reasonably susceptible to a proper restitution construction, which is not the standard for a motion to strike. (Reply at p. 5.)

The Court agrees with Defendants that the plain language of the two phrases Defendants' move to strike is broader than mere restitution as described in Korea Supply Co. (supra, 29 Cal.4th at 1148-1149.) The plain language of the phrases here does not limit the sought disgorgement to the monies associated

with the "padded" billing and markups. Accordingly, the Court Grants the motion to strike with leave to amend so that Plaintiffs can clarify the remedies they seek.

Conclusion

Defendants' Demurrer is OVERRULED in part and SUSTAINED in part without leave to amend. Defendants' Motion to Strike is GRANTED with leave to amend. | Home -->)" -->