AMERICAN ELITE, INC., A NEVADA CORPORATION, et al. vs JASRAJ SINGH

2025CUBC046693: AMERICAN ELITE, INC., A NEVADA CORPORATION, et al. vs JASRAJ SINGH 08/20/2026 in Department 43 Demurrer to Third Amended Complaint Motion to Strike Punitive Damages

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The signed order shall be served on all parties and a proof of service filed with the court. A "notice of ruling" in lieu of this procedure is not authorized. Motions: 1. Defendant Jasraj Singh’s Demurrer to Third Amended Complaint 2. Defendant Jasraj Singh’s Motion to Strike Punitive Damages Tentative Rulings: 1. Defendant Jasraj Singh’s Demurrer to Third Amended Complaint is ruled on as follows: A. The Demurrer is OVERRULED as to the Second Cause of Action for Intentional Misrepresentation. The allegations concern Defendant’s promise before the 2023 agreement to cooperate and provide financial information as part of the effort to remove Defendant’s guaranty (TAC at ¶¶68-85.)

While Plaintiffs could not recover tort and contract damages for the same conduct, Plaintiffs have now pled a promise that existed prior to the 2023 agreement. Lazar v.

2025CUBC046693: AMERICAN ELITE, INC., A NEVADA CORPORATION, et al. vs JASRAJ SINGH

Superior Court (1996) 12 Cal.4th 631, 638 (“Recovery, however, may be limited by the rule against double recovery of tort and contract compensatory damages” citing Tavaglione v. Billings (1993) 4 Cal.4th 1150, 1159.) The economic loss rule (which was discussed by the court in prior rulings) no longer forecloses this cause of action because Plaintiffs have pled promissory fraud prior to the creation of the contract. B. The Demurrer is OVERRULED as to the Third Cause of Action for Fraudulent Concealment.

The allegation is of concealment of Defendant’s actual intent as opposed to misrepresentation. The difference allows for a second species of fraud. The analysis of why the economic loss rule no longer apples is the same as with the Second Cause of Action, above. Defendant’s argument that the allegations of duty are insufficient overlooks the broad scope of how such duty can arise. (See LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336 identifying four circumstances in which nondisclosure may constitute actionable fraud: “(1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations but also suppresses some material facts.”) (TAC ¶¶92&93) C.

The Demurrer is SUSTAINED with leave to amend as to the Fourth Cause of Action for Intentional Interference with Contractual Relations which remains insufficiently pled. Defendant’s argument that a contracting party cannot interfere with its own contract overlooks the allegations that Defendant sold all of his interest in the Company prior to entering into the 2023 agreement (1st WHEREAS clause of Ex B to the TAC and also TAC at ¶23 (stating “Plaintiffs relied on Defendant's December 2022 and January 2023 representations not only in entering into the 2023 Agreement, but also in proceeding with the buyout transaction and paying Defendant $175,000 for his shares.”)) However, the allegations of intentional interference are the same as the allegations of contractual non-performance and despite multiple opportunities, Plaintiffs have not overcome the economic loss rule problem previously identified.

C. The Demurrer is SUSTAINED with leave to amend as to the Fifth Cause of Action for Negligent Interference with an Economic Relationship which is still insufficiently pled. Plaintiffs have not pled a negligent interference that is separate and apart from the contractual nonperformance. The economic loss rule applies.

2. Defendant Jasraj Singh’s Motion to Strike Punitive Damages is moot, based on the demurrer being sustained to Fourth Cause of Action for Intentional Interference with Contractual Relations. It is therefore denied. Plaintiff is granted leave to amend on or before September 5, 2026. Moving party is ordered to serve notice of the Court’s rulings.

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