Elite MD, Inc. v. Chandel

# Case Name Tentative

Johnston shall serve and file a formal order of dismissal for the court’s signature within 10 days.

Johnston shall give notice of all of the above. 52.

53. Elite MD, Defendants Amit Chandel and Focus Group CPA, Inc.’s Inc. v. Demurrer to the First Amended Complaint (“FAC”) is Chandel SUSTAINED.

2025- Defendants demur to the first and fourth causes of action in 01504466 the First Amended Complaint.

First Cause of Action – Professional Negligence

The elements of a claim for professional negligence are: (1) the duty of the professional to use such skill, prudence, and diligence as other members of his profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the negligent conduct and the resulting injury; and (4) actual loss or damage resulting from the professional's negligence. (Paul v. Patton (2015) 235 Cal.App.4th 1088, 1095.)

The FAC alleges Defendants breached a duty to Plaintiffs to keep their financial and business records confidential. (FAC, ¶ 39.) Plaintiffs do not allege any supporting facts regarding the purported disclosure, i.e., what, when, who or how. They also do not allege how the breach of confidentiality caused the $1,000,000 in damages.

Accordingly, the demurrer to the first cause of action is SUSTAINED.

Fourth Cause of Action – Breach of Fiduciary Duty

“A fiduciary relationship is any relation existing between parties to a transaction wherein one of the parties is bound to act with the utmost good faith for the benefit of the other party.” (Gilman v. Dalby (2009) 176 Cal.App.4th 606, 613.)

The elements of a claim for breach of fiduciary duty are (1) the existence of a fiduciary relationship, (2) its breach, and (3) damage proximately caused by that breach. (Mendoza v. Continental Sales Co. (2006) 140 Cal.App.4th 1395, 1405.)

“[B]reach of fiduciary duty is a species of tort distinct from a cause of action for professional negligence” (Stanley v.

# Case Name Tentative

Richmond (1995) 35 Cal.App.4th 1070, 1086.) No California reported decisions have ever found that an accountant and client engagement creates a fiduciary relationship.

“The creation of a fiduciary obligation or duty must, at a minimum, arise from facts demonstrating the formation of a confidential relationship.” (Richard B.. LeVine, Inc. v. Higashi (2005) 131 Cal.App.4th 566, 586.) “A fiduciary relationship is created where a person reposes trust and confidence in another and the person in whom such confidence is reposed obtains control over the other person's affairs.” (Ibid.) “The mere placing of a trust in another person does not create a fiduciary relationship.” (Ibid.) Further, “an agreement to communicate one’s knowledge, exercising his special knowledge and skill in the area of learning concerned, does not create a trust but only a contractual obligation.” (Ibid.)

The FAC alleges Plaintiffs entered into an agreement with Defendant Chandel for him to serve as outsourced CFO for Plaintiff Elite pursuant to which Defendant Chandel was to perform bookkeeping, accounting, financial planning and tax preparation services, perform advisory and supervisory services, perform management and oversight services on behalf of Plaintiff Elite, and provide consulting and advisory services to all Plaintiffs in strategic business, tax and estate planning. (FAC, ¶ 62.) “The agreement obligated Defendants Chandel and/or Focus to prepare [sic] perform all of the services described herein (1) correctly, and (2) with the skill and care of a certified public accountant.” (FAC, ¶ 63.)

As alleged by Plaintiffs in the FAC, such agreement created nothing more than an obligation by Defendants to exercise their skill and special knowledge. This is insufficient to establish that Defendants were acting as fiduciaries with respect to the accounting services it provided to Plaintiffs.

Accordingly, the demurrer to the fourth cause of action is SUSTAINED.

Plaintiffs have 10 days leave to amend the FAC.

The case management conference is continued to February 22, 2027 at 9:00 a.m.

Defendants shall give notice of this ruling.

54. Gonzalez v. Plaintiff Salvador Gonzalez’s Motion for Attorney fees is General GRANTED. Motors LLC Defendant General Motors, LLC shall pay $17,385.00 in reasonable attorney fees and $721.24 in costs and expenses