Quizon v. Izkina, LLC, et al.

For Defendant Travelers: Aaron C. Agness, Shadie Maghareh Issue Motion for Leave to file 2AC.

The Motion is GRANTED. The Complaint was filed 5/1/25; Plaintiff alleges it suffered a series of water intrusions at its premises at 1150 Laurel Lane, San Luis Obispo, California, during a renovation project and incurred extensive damage to its building and the interior. Filed suit [50 page complaint - 2 counts] for breach of the contractual duty to pay a covered insurance claim, and the breach of the implied covenant of good faith and fair dealing. On 6/11/25 Plaintiff filed a FAC and on 7/11/25 Travelers filed its answer.

On 4/27/26, Plaintiff Laurel Creek, LP, filed this motion for leave to file a second amended complaint. Reported at length why it could not be filed earlier. On 7/10/26, Defendant Travelers filed its statement of non-opposition to the motion. The motion should be granted. Plaintiff shall file and serve the second amended complaint, in a form substantially the same as attached to the motion, on or before 7/23/26. This is not complicated litigation for the very experienced lawyers in this case. The Court has spent considerable time on the issues already.

The Court assumes the answer to the FAC will be adequate for a response to the SAC and no new responsive pleading needs to be filed by Travelers. Please confirm. ALERT: The Court has just signed the very recent stipulation to continue the trial date; the Court will not do so again.

Tentative Ruling: Quizon v. Izkina, LLC, et al. Tentative Ruling: Quizon v. Izkina, LLC, et al. Case Number

Case Type Civil Law & Motion Hearing Date / Time Wed, 08/19/2026 - 10:00 Nature of Proceedings 1. Defendants Izkina, LLC and Suretec Insurance Company's Demurrer to Plaintiff's Second Amended Complaint 2. Defendants Izkina, LLC and Suretec Insurance Company's Motion to Strike Portions of Plaintiff's Second Amended Complaint Tentative Ruling For Plaintiff Rex Quizon, doing business as Key Zone Construction: Min N. Thai, Splinter & Thai, PC For Defendants/Cross-Complainant Izkina, LLC, and Suretec Insurance Company: Brant H.

Dveirin, Caroline E. Chan, Joshua Hodas, Lewis Brisbois Bisgaard & Smith LLP RULING For all reasons stated herein: The demurrer to Plaintiff's second amended complaint is overruled. The motion to strike requests for punitive damages is denied. The motion to strike requests for attorney's fees and costs is sustained with leave to amend. Plaintiff shall file and serve his third amended complaint no later than August 26, 2026. The Pretrial Conference of 11/4/26 at 11:30 am with the trial to commence on 11/5/26 and the MSC of 10/9/26

and the final CMC of 9/2/26 are all confirmed. This case was filed 7/1/25 and the Answer was filed 8/22/25; Plaintiff contends Defendant owes Plaintiff $70,400 for construction labor and materials for which Plaintiff recorded a mechanic's lien; Plaintiff estimates a 3-day Court trial; defense estimates a 4-day Court trial. FAC filed 11/13/25; answered 12/5/25 plus a cross-complaint; SAC filed 4/22/26. Do not request a continuance of the trial date on this routine collections case with such very experienced trial lawyers.

Background

On July 1, 2025, Plaintiff Rex Quizon, doing business as Key Zone Construction (Key Zone), filed the complaint in this action against Defendants Izkina, LLC (Izkina) and Meadows Bank (Meadows). This action pertains to a contract (Contract) for property improvement work performed by Key Zone at 30 East Victoria Street in Santa Barbara (Property) on behalf of Izkina. As alleged in the complaint, Key Zone performed the work under the Contract as agreed, but Izkina failed to pay an outstanding balance of $70,400. (Compl., P.P. 8-10.)

Key Zone recorded a mechanic's lien on the Property in the amount of $70,400. (Compl., P.P. 14-23.) The complaint sets forth five causes of action for (1) breach of contract, (2) foreclosure on mechanic's lien, (3) quantum meruit, (4) account stated, and (5) open book account. On November 13, 2025, Plaintiff filed a first amended complaint (FAC), which added Suretec Insurance Company (Suretec) as a Defendant and removed Meadows as a named Defendant. The FAC sets forth five causes of action for (1) enforcement against bond to release mechanic's lien (against Izkina and Suretec), (2) breach of written contract (against Izkina), (3) quantum meruit (against Izkina), (4) account stated (against Izkina), and (5) open book account (against Izkina).

On December 5, 2025, Izkina filed an answer to the FAC generally denying the allegations therein and setting forth 37 affirmative defenses. That same day, Izkina also filed a cross complaint (CC) against Key Zone. The CC alleges that Key Zone breached the Contract by failing to provide a timely and complete work schedule, delaying the coordination of the Contract despite architectural approval, failing to comply with the Project Disbursement Group (PDG) draw procedures, issuing invoices and demands for payment absent documentation, submitting work schedules and invoices and demands for payment of work not done and materials not provided, failing to maintain transparent communication, miscommunicating with PDG, and filing a mechanic's lien absent justification. (CC, P.P. 5-17.)

The CC alleges that Izkina was then forced to hire a new contractor on May 5, 2025, and incur unnecessary expenses. (CC, P. 18.) The CC sets forth four causes of action for (1) breach of contract, (2) breach of the covenant of good faith and fair dealing, (3) intentional misrepresentation, and (4) negligent misrepresentation. On January 14, 2026, Suretec filed an answer to the FAC generally denying the allegations therein and setting forth 14 affirmative defenses. On January 21, 2026, counsel for Key Zone requested that Izkina stipulate to the filing of a second amended complaint (SAC). (Thai Decl., P. 7.)

On February 18, 2026, Key Zone filed an answer to the CC generally denying the allegations therein and setting forth 29 affirmative defenses. On February 18, 2026, Plaintiff filed a motion for leave to file a SAC, which sought to add a sixth cause of action (COA) for fraud against Izkina. On April 22, 2026, the Court granted the motion and Plaintiff filed the SAC on the same date. The fraud COA alleges that Key Zone was required to submit its invoices under the Contract to Izkina, who would then submit these invoices to PDG for payment from the lender (Meadows). (SAC, P.P. 42-46.)

The fraud COA alleges that Izkina engaged in a scheme to abscond with the construction funds for its own use by secretly forging Key Zone's signature on payment forms submitted to PDG and using the disbursed funds for Izkina's own purposes rather than paying Key Zone's invoices. (SAC, 48.) The SAC alleges that this forgery scheme was not disclosed to Key Zone and that Izkina affirmatively misrepresented to Key Zone that Key Zone's invoices were being processed for payment. (SAC, P.P. 49-50.) As alleged in the SAC, Key Zone was unaware that Izkina intended to fraudulently take these funds for its own use rather than paying Key Zone's invoices. (SAC, P. 51.)

Had Key Zone known about this forgery scheme and Izkina's intentional misrepresentations about the invoices upon which Key Zone relied, the SAC alleges that Key Zone would not have continued working under the Contract. (SAC, P.P. 51-52.)

On May 18, 2026, Izkina and Suretec filed the present demurrer to the sixth cause of action for fraud. The demurrer is opposed. Also on May 18, 2026, Izkina and Suretec filed the present motion to strike portions of the SAC, specifically related to requests for attorney's fees and punitive damages. The motion to strike is opposed. On July 28, 2026, Plaintiff filed a notice of errata regarding an incorrect reference to Civil Code section 1717. Plaintiff wishes to correct that reference to allege violations of Civil Code section 1717.5.

Analysis

Demurrer "When any ground for objection to a complaint, cross-complaint, or answer appears on the face thereof, or from any matter of which the Court is required to or may take judicial notice, the objection on that ground may be taken by a demurrer to the pleading." (Code Civ. Proc., Sec. 430.30, subd. (a).) "The party against whom a complaint or cross-complaint has been filed may object, by demurrer or answer as provided in Section 430.30, to the pleading on any one or more of the following grounds: "(a) The Court has no jurisdiction of the subject of the cause of action alleged in the pleading. "(b) The person who filed the pleading does not have the legal capacity to sue. "(c) There is another action pending between the same parties on the same cause of action. "(d) There is a defect or misjoinder of parties. "(e) The pleading does not state facts sufficient to constitute a cause of action. "(f) The pleading is uncertain.

As used in this subdivision, "uncertain" includes ambiguous and unintelligible. "(g) In an action founded upon a contract, it cannot be ascertained from the pleading whether the contract is written, is oral, or is implied by conduct. "(h) No certificate was filed as required by Section 411.35." (Code Civ. Proc., Sec. 430.10.) "[A] Court must treat a demurrer as admitting all material facts properly pleaded, it does not, however, assume the truth of contentions, deductions or conclusions of law." (Travelers Indem.

Co. of Connecticut v. Navigators Specialty Ins. Co. (2021) 70 Cal.App.5th 341, 358, citing Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.) "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.) Defendants argue that the fraud cause of action cannot survive because the fraud allegations are based upon the same factual allegations as the breach of contract claim, and that Plaintiff cannot show that the duty giving rise to tort liability is completely independent of the contract.

The allegations of fraud include: "In and about February and March of 2025, Defendants Izkina, LLC, and each of Defendants Does 61 through 70, engaged in fraudulent activity to deceive Plaintiff Key Zone to continue to provide labor and materials while diverting construction funds, including but not limited to the following: a. Defendants completely forged Key Zone Construction's signature on AIA Document G702, allegedly signing on or about March 1, 2025. Without this form and Key Zone's forged signature, Plaintiff is informed and believes that Project Disbursement Group would not have issued a first payment, or " 'Draw 1,' " to Izkina. b.

Defendants instructed Project Disbursement Group to void and withdraw Key Zone's validly signed Payment Request Form dated March 1, 2025, without informing Key Zone and concealing the fact that Defendants were withdrawing applications for payment for Key Zone's work. c. Defendants thereafter completely altered the same March 1, 2025 Payment Request Form and removed line itemizations for work, changed prices, removed invoices the package submitted to Project Disbursement Group, removed pages from the package submitted to Project Disbursement Group, removed receipts, and altered the

package submitted to Project Disbursement Group, again, without informing Key Zone and concealing those facts from Key Zone. d. Defendants further completely thereafter removed and completely forged Key Zone's signature to the altered Payment Request Form and package dated March 1, 2025 and submitted said altered package to Project Disbursement Group, and according to information, Izkina was thereafter paid on said Payment Request Form package." (SAC, P. 48.) In contrast, the breach of contract cause of action alleges that Izkina did not pay Plaintiff for construction work and materials as required by written agreement.

Forgery is criminal fraud. "(a) Every person who, with the intent to defraud, knowing that he or she has no authority to do so, signs the name of another person or of a fictitious person to any of the items listed in subdivision (d) is guilty of forgery. (b) Every person who, with the intent to defraud, counterfeits or forges the seal or handwriting of another is guilty of forgery. (c) Every person who, with the intent to defraud, alters, corrupts, or falsifies any record of any will, codicil, conveyance, or other instrument, the record of which is by law evidence, or any record of any judgment of a Court or the return of any officer to any process of any Court, is guilty of forgery. (d) Every person who, with the intent to defraud, falsely makes, alters, forges, or counterfeits, utters, publishes, passes or attempts or offers to pass, as true and genuine, any of the following items, knowing the same to be false, altered, forged, or counterfeited, is guilty of forgery: any check, bond, bank bill, or note, cashier's check, traveler's check, money order, post note, draft, any controller's warrant for the payment of money at the treasury, county order or warrant, or request for the payment of money, receipt for money or goods, bill of exchange, promissory note, order, or any assignment of any bond, writing obligatory, or other contract for money or other property, contract, due bill for payment of money or property, receipt for money or property, passage ticket, lottery ticket or share purporting to be issued under the California State Lottery Act of 1984, trading stamp, power of attorney, certificate of ownership or other document evidencing ownership of a vehicle or undocumented vessel, or any certificate of any share, right, or interest in the stock of any corporation or association, or the delivery of goods or chattels of any kind, or for the delivery of any instrument of writing, or acquittance, release or discharge of any debt, account, suit, action, demand, or any other thing, real or personal, or any transfer or assurance of money, certificate of shares of stock, goods, chattels, or other property whatever, or any letter of attorney, or other power to receive money, or to receive or transfer certificates of shares of stock or annuities, or to let, lease, dispose of, alien, or convey any goods, chattels, lands, or tenements, or other estate, real or personal, or falsifies the acknowledgment of any notary public, or any notary public who issues an acknowledgment knowing it to be false; or any matter described in subdivision (b)." (Pen.

Code, Sec. 470, subds. (a)-(d).) Defendants' characterization of the holding in Rattagan v. Uber Technologies (2024) 17 Cal.5th 1 (Rattagan) is misleading. Defendants imply that in Rattagan the determining factor, allowing for recovery on a claim independent of the contract cause of action, was a special relationship between Plaintiff and Defendant. Not so. Rattagan imposes no requirement that there be a "special relationship" to recover on an independent tort. " 'California decisions . . . have long recognized that a wrongful act committed in the course of a contractual relationship may afford both tort and contractual relief, and in such circumstances the existence of the contractual relationship will not bar the injured party from pursuing redress in tort.' " [Citation.]

The Court characterized an independent tort action arising during contractual relationship as " ' " 'ex delicto' " ' " or " ' " 'aris[ing] from a breach of duty growing out of the contract ' " ' " (italics omitted) as opposed to an " ' " 'ex contractu' " ' " cause of action that " ' " 'arises from a breach of a promise set forth in the contract ' " ' ". [Citation.] In other words, the simple existence of a contractual relationship between two parties does not mean one party can tortiously injure the other but limit its liability to a contract remedy.

If a party breaches a contractual duty but also commits an independent tort, the injured party may recover under both theories." (Rattagan, supra, 17 Cal.5th at p. 24.) Here, the alleged forgery, and other fraud allegations such as altering documents and removing pages, are

clearly independent tort actions that do not arise from any breach of a promise set forth in the contract. By way of the contract, Izkina did not promise to forgo forging Plaintiff's signature on documents or committing the other alleged actions. The demurrer will be overruled. Motion to Strike By way of the motion to strike portions of the SAC, Defendants seek to strike requests for attorney's fees and costs in paragraph Nos. 14, 26, 37, 41, 55, and prayer for damages No.

4. Defendants also seek to strike requests for damages at paragraph No. 54 and prayer for damages No. 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." (Code Civ. Proc., Sec. 436.) "Irrelevant matter" includes a "demand for judgment requesting relief not supported by the allegations of the complaint." (Code Civ. Proc., Sec. 431.10, subds. (b)(3), (c).) "The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the Court is required to take judicial notice." (Code Civ.

Proc., Sec. 437, subd. (a).) "In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties." (Code Civ. Proc., Sec. 452.) "[J]udges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth." (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.) "In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the Defendant has been guilty of oppression, fraud, or malice, the Plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the Defendant." (Civ.

Code, Sec. 3294, subd. (a).) "As used in this section, the following definitions shall apply: "(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 part of the Defendant of thereby depriving a person of property or legal rights or otherwise causing injury." (Civ.

Code, Sec. 3294, subd. (c).) Punitive damages are recoverable for fraud actions involving intentional misrepresentation. (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1241.) "[F]raud alone is an adequate basis for awarding punitive damages." (Glendale Fed. Sav. & Loan Assn. v. Marina View Heights Dev. Co. (1977) 66 Cal.App.3d 101, 135.) "A fraud cause seeking punitive damages need not include an allegation that the fraud was motivated by the malicious desire to inflict injury upon the victim.

The pleading of fraud is sufficient." (Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 610.) As the demurrer to the fraud cause of action is being overruled, the prayer for punitive damages will not be stricken. Defendants argue that the attorney's fees request are not authorized by Civil Code section 1717, which is what is set forth in the SAC. "In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs." (Civ.

Code, Sec. 1717, subd. (a).) Plaintiff does not dispute that the contract does not have an attorney fees provision. Rather, Plaintiff argues that the SAC should have stated Civil Code 1717.5, and that the notice of errata filed on July 28, 2026, cures the