Kristen Lopez, et al. v. Herrera Construction, Inc., et al.

Kristen Lopez, et al. v. Herrera Construction, Inc., et al., 25CV0470

Hearing: Demurrer to SAC

Date: August 20, 2026

Kristen and Christopher Lopez (Plaintiffs) filed this action against Herrera Construction, Jerome Frank Herrera, and Alexis Maria Herrera (Defendants) for breach of contract and related causes of action arising from contracts for interior and exterior construction of a single-family home. Plaintiffs filed a First Amended Complaint (FAC) on August 15, 2025, alleging six causes of action.

The Court sustained with leave to amend Defendants’ demurrer to the Fifth Cause of Action for Negligent Misrepresentation in Plaintiff’s FAC on the ground that it was duplicative of the intentional fraud cause of action in that it alleged an intent to defraud and deceive and did not allege Defendants acted negligently in making the alleged misrepresentation.

Defendants now demur to the Fifth Cause of Action for Negligent Misrepresentation in Plaintiffs’ Second Amended Complaint (SAC). Defendants assert that the SAC (1) continues to allege Defendants made misrepresentations with an intent to deceive and is therefore duplicative of the Fourth Cause of Action for Promise Without Intent to Perform; (2) fails to allege justifiable reliance with sufficient specificity; and (3) fails to allege negligent misrepresentation damages with sufficient specificity.

I.

Legal Standard

A demurrer tests the legal sufficiency of the allegations in a complaint.1 It raises issues of law, not fact, regarding the complaint’s form or content. (Code Civ. Proc., §§ 422.10, 589; Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994; Lewis v. Safeway (2015) 235 Cal.App.4th 385, 388.) A demurrer “admits the truth of all material factual allegations in the complaint...the question of plaintiff’s ability to prove these allegations, or the possible difficulty in making such proof, does not concern the reviewing court.” (Alcorn v. Anbro Engineering, Inc. (1970) 2 Cal.3d 493, 496.)

“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.) When reviewing a demurrer, a court must draw all reasonable inferences in favor of the plaintiff. (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1239). Moreover, “[t]he facts alleged in the pleading are deemed to be true, however improbable they may be.” (Berg & Berg Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1034.)

1 The Court grants Plaintiffs’ and Defendants’ Requests for Judicial Notice, which seek judicial notice of specified documents in the Court’s file.

II. Negligent Misrepresentation

The Fifth Cause of Action for Negligent Misrepresentation in the SAC alleges in relevant part as follows:

62. On or about August 21, 2024, Defendants, by and through Mr. Herrera, falsely, and fraudulently represented to Plaintiffs that Defendants would complete certain exterior work at the Project for the fixed price of $311,200.00, and that the irrigation and landscaping for the Project would cost $125,000.00 of that sum.

63. The representations made by Defendants were in fact false, and Defendants knew or should have known that they would be unable to perform the line items in the Exterior Contract, including the Irrigation/Landscape line item, for the prices stated, and made these representations without reasonable grounds for believing them to be true.

64. Ms. Herrera has admitted to Ms. Lopez that she knew the line items in the Exterior Contract were not accurate, that the $125,000.00 landscape line item was not realistic and that other line items were "padded" to account for the manufactured landscaping shortfall.

65. Plaintiffs are informed and believe, and thereon allege, that Defendants negligently misrepresented the line items in the Exterior Contract, and induced Plaintiffs to execute the Exterior Contract.

66. At the time these representations were made, Plaintiffs were ignorant of the falsity of Defendants’ representations and believed them to be true. In reliance on these representations, Plaintiff agreed to enter into, and did enter into, the Exterior Contract and paid Defendants for services performed thereunder. Plaintiffs could not, in the exercise of reasonable diligence, have discovered the falsity of Defendants' representations. If Plaintiffs had known the actual facts, they would not have taken the actions alleged.

67. As a direct and proximate cause of Defendants’ fraud, Plaintiffs have been damaged in the form of economic losses and incidental expenses in an amount according to proof at trial.

Defendants argue these allegations restate the Fourth Cause of Action for Promise Without Intent to Perform. However, a party may plead alternative theories based on the same set of facts. (Riverside County Transportation Com. v. S. California Gas Co. (2020) 54 Cal.App.5th 823, 840.) The Court sustained the demurrer to the negligent misrepresentation claim in the FAC because it did not state an alternative theory to the promissory fraud claim. In contrast, the SAC alleges distinct promissory fraud and negligent misrepresentation claims. The intentional fraud claim alleges “Defendants misrepresented the line items in the Exterior Contract with no intention of performing the work for the price stated, but rather with the intention of billing and demanding additional sums from Plaintiffs....” (SAC, ¶ 56.) The negligent misrepresentation claim alleges

the misrepresentations were made “without reasonable grounds for believing them to be true.” (SAC, ¶ 63.)

The SAC states a negligent misrepresentation claim.

III. Justifiable Reliance

“To allege actual reliance with the requisite specificity, ‘[t]he plaintiff must plead that he believed the representations to be true ... and that in reliance thereon (or induced thereby) he entered into the transaction. [Citation.]’” (Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1063 [citations omitted].) Plaintiffs have adequately pled justifiable reliance. (SAC, ¶ 66.)

IV. Negligent Misrepresentation Damages

Defendants assert that the Court orally agreed with their position that fraud damages were not pled with sufficient specificity and that the SAC suffers from this problem. They cite Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979 (Robinson), for the proposition, “[w]hen a plaintiff alleges fraud in connection with a contract, the plaintiff must allege damages that are distinct from ordinary breach of contract damages.” (Points and Authorities in Support of Demurrer, p. 8, lns. 1-4.)

Robinson did not involve a demurrer and held that the plaintiff could recover tort damages for misrepresentations made in the performance of a contract that caused damages not contemplated by the contract. In doing so the California Supreme Court stated, “[a] party to a contract cannot rationally calculate the possibility that the other party will deliberately misrepresent terms critical to that contract.” (Id. at 993 [citation omitted].) “Courts generally permit tort suits if the defendant allegedly violated a duty rooted in tort principles that is independent of the parties’ contractual rights and obligations and exposed the plaintiff to a risk of harm beyond the parties’ reasonable contemplation when they entered into the contract.” (Rattagan v.

Uber Techs., Inc. (2024) 17 Cal.5th 1, 23.) Further, the economic loss rule does not bar a claim for fraudulently inducing the plaintiff to enter into a contract where the fraudulent conduct is independent of the alleged breach of contract. (Dhital v. Nissan N. Am., Inc. (2022) 84 Cal.App.5th 828, 843.)

However, a fraud claim must allege a cause and effect relationship between the fraud and damages sought. (Zumbrun v. Univ. of S. California (1972) 25 Cal.App.3d 1, 12 [demurrer sustained where pleading did not explain how fraud caused damages].) The guiding and distinguishing principle is that a claim based on failure to perform the terms of a contract sounds only in contract while a claim based on misconduct exclusive of the contract which results in consequences not reasonably contemplated when the contract was formed may lie in tort. (Rattagan v. Uber Techs., Inc., supra, 17 Cal.5th at 27.)

Plaintiffs allege they would not have entered into the contract had they not been fraudulently induced to do so. (SAC, ¶ 66.) They do not allege how entering into the contract resulted in tort damages that are distinct from breach of contract damages. For example, did Plaintiffs, by entering into the contract, forego other opportunities to their detriment or were they unable to use their property for periods not contemplated in the contract, etc.” Absent allegations specifying the types

of non-contract damages resulting from the alleged misrepresentations the claim lacks required specificity.

V. Ruling

The demurrer to the Fifth Cause of Action is sustained with leave to amend on the ground that negligent misrepresentation damages are not pled with sufficient specificity. Plaintiffs are directed to file an amended complaint within fifteen (15) days from service of notice of ruling. Defendants are directed to serve the notice of ruling. (Code Civ. Proc., § 1019.5.)

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