Romo v. Croskrey

(37) Tentative Ruling

Re: Romo v. Croskrey Superior Court Case No. 25CECG03158

Hearing Date: September 1, 2026 (Dept. 403)

Motion: Cross-Defendant Tony Romo’s Demurrer and Motion to Strike as to the First Amended Cross-Complaint

Tentative Ruling:

To overrule the demurrer, with cross-defendant Tony Romo granted 10 days’ leave to file his answer to the First Amended Cross-Complaint. The time in which the answer can be filed will run from service by the clerk of the minute order.

To deny the motion to strike.

Explanation:

Demurrer

The function of a demurrer is to test the sufficiency of a pleading by raising questions of law. (Plumlee v. Poag (1984) 150 Cal.App.3d 541, 545.) The test is whether a plaintiff has succeeded in stating a cause of action; the court does not concern itself with the issue of a plaintiff’s possible difficulty or inability in proving the allegations of the complaint. (Highlanders, Inc. v. Olsan (1978) 77 Cal.App.3d 690, 697.) In assessing the sufficiency of the complaint against the demurrer, we treat the demurrer as admitting all material facts properly pleaded, bearing in mind the appellate courts’ well established policy of liberality in reviewing a demurrer sustained without leave to amend, liberally construing the allegations with a view to attaining substantial justice among the parties. (Glaire v. LaLanne-Paris Health Spa, Inc. (1974) 12 Cal.3d 915, 918.)

Timeliness

A cross-complaint must be filed “before or at the same time” as an answer, otherwise leave of the court must be sought. (Code Civ. Proc., § 428.50.) Romo asserts that the answer and the accompanying initial cross-complaint were untimely filed on September 17, 2025 following a Notice of Acknowledgment and Receipt signed August 11, 2025 by defense counsel. The court would note that the code section requires leave only where the cross-complaint is not filed concurrently with the answer. That the answer was filed after the time in which it should have been has no bearing, particularly where no entry of default had been sought. Thus, the cross-complaint was filed appropriately.

Breach of Contract

To plead a breach of contract, a complaint must allege 1) an agreement, 2) performance by the plaintiff or excuse for nonperformance, 3) defendant’s breach, and

4) damages. (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178; Abdelhamid v. Fire Ins. Exchange (2010) 182 Cal.App.4th 990, 999.) Here, the First Amended Cross-Complaint (“FACC”) alleges an oral agreement wherein Romo was authorized to use a credit card for business purposes and would be required to show receipts for these expenses. (FACC, ¶ 9.) It is also alleged that Romo would receive cash advances, interest free, with the understanding that these would need to be repaid if they were not for business expenses. (FACC, ¶ 10.)

The FACC sufficiently alleges the terms of both agreements. The FACC also alleges that Croskrey performed his obligations by providing the credit card and the advances. (FACC, ¶ 11.) The FACC alleges a breach by making unauthorized purchases on the credit card and failing to repay the advances or provide receipts to demonstrate business expenses. (FACC, ¶ 12.) The FACC alleges damages exceeding $6,000. (FACC, ¶ 13.)

Romo argues that the terms of the agreement are insufficient. A contract that is uncertain and indefinite is void. (Cheema v. L.S. Trucking, Inc. (2019) 39 Cal.App.5th 1142, 1149.) However, this does not mean that the terms must be set out in minute detail in order to be valid. (Ibid.) “The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy.” (Moncada v. West Coast Quartz Corp. (2013) 221 Cal.App.4th 768, 777.) Here, the terms are sufficiently clear. Romo would have authority to use a credit card for business expenses and would have to provide receipts. (FACC, ¶ 9.) Croskrey would provide cash advances to Romo and Romo would pay these back, without interest, or show that funds were used for business expenses. (FACC, ¶ 10.) Both of these would be in the context of employment. (FACC, ¶¶ 9-10.)

Breach of contract is sufficiently alleged. The court overrules the demurrer as to this cause of action.

Conversion

To plead conversion, a complaint must allege 1) plaintiff’s ownership or right to possession, 2) a wrongful act or disposition of property rights by defendant, and 3) damages. (Greif v. Sanin (2022) 74 Cal.App.5th 412, 449.) Conversion is a strict liability tort which does not rest on defendant’s knowledge or intent. (Ibid.) Further, California law now holds that the property at issue can be intangible. (Voris v. Lampert (2019) 7 Cal.5th 1141, 1151.) However, “money cannot be the subject of an action for conversion unless a specific sum capable of identification is involved.” (Ibid, quoting Haigler v. Donnelly (1941) 18 Cal.2d 674, 681.) This does not mean that the money at issue must be “earmarked”. (Ibid.)

As already stated, the plaintiff must show a right to possession or ownership which has been interfered with by the defendant. (Ibid.) “[S]imple failure to pay money owed does not constitute conversion.” (Ibid, quoting Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 284.) Cases involving conversion of money “typically involve those who have misappropriated, commingled, or misapplied specific funds held for the benefit of others.” (Id. at p. 1152, quoting PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384, 396.)

The court in Welco Electronics, Inc. v. Mora (2014) 223 Cal.App.4th 202, 211 acknowledged that the plaintiff “had a property right in its credit card account because plaintiff’s interest was specific, plaintiff had control over its credit card account, and plaintiff had an exclusive claim to the balance in the account.” Where a defendant obtained monies from the credit card company, the “plaintiff became indebted to the credit card company.” (Ibid.) Misappropriating the credit card meant that the balance was taken and was an unauthorized transfer. (Ibid.) While the unauthorized use in Welco involved a more overt action, use of a credit card on a credit card terminal, the court’s reasoning is persuasive here. (Id. at p. 205.) Further, the court noted, “[c]redit card, debit card, or PayPal information may be the subject of a conversion.” (Id. at p. 213.)

Damages are based on the detriment to the plaintiff. (Greif v. Sanin, supra, 74 Cal.App.5th at p. 449.) Where a showing is made of malice, fraud, or oppression, punitive damages may be recovered. (Voris v. Lampert (2019) 7 Cal.5th 1141, 1151.) In “appropriate circumstances” so too are emotional distress damages. (Ibid.)

Romo cites to Voris v. Lampert, supra, 7 Cal.5th 1141 for the position that employment related debts cannot be asserted as a cause of action for conversion. There, the California Supreme Court was addressing whether the tort of conversion was cognizable with regard to an employee claim for unpaid wages. (Id. at p. 1144.) The Supreme Court determined it was not. (Ibid.) Here, while the underlying complaint alleges wage and hour claims, the cross-complaint does not. Nor does it involve an employee asserting such claims. Rather, the cross-complaint alleges an employee made unauthorized charges on a company credit card and took cash advances with the intent of not paying these back. (FACC, ¶ 15.)

The court overrules the demurrer as to this cause of action.

Penal Code Section 496

Penal Code section 496 articulates the unlawfulness of knowingly receiving stolen property. It also provides for treble damages and attorney’s fees. (Pen. Code, § 496, subd. (c).) The elements are 1) property was stolen, 2) defendant’s knowledge that the property was stolen, and 3) defendant’s possession of the stolen property. (Lacagnina v. Comprehend Systems, Inc. (2018) 25 Cal.App.5th 955, 970.) Ultimately, “receiving, buying, or withholding property ‘that has been obtained in any manner constituting theft’” comes under the purview of Penal Code section 496. (Bell v. Feibush (2013) 212 Cal.App.4th 1041, 1044.) It includes theft by false pretenses. (Id. at p. 1048.) Here, the FACC alleges Romo knowingly used the company credit card to make personal purchases and knowingly accepted cash advances with no intent to repay these. (FACC, ¶ 21.)

Employment Labor Disputes

Romo asserts that Penal Code section 496 is not available for employment labor disputes. The court in Lacagnina v. Comprehend Systems, Inc., supra, 25 Cal.App.5th at pp. 968-969 did address that receipt of stolen property does not include labor, because labor is not property. This case might be relevant if Romo was making such claims in his own wage and hour complaint. Romo, however, is challenging his employer’s cross- 14

complaint, which has not alleged any theft related to labor. Thus, the court will not use it as a bar to Croskrey’s claims here.

Statute of Limitations

A one-year statute of limitations is imposed for “statutes that provide for recovery of actual damages and a mandatory additional penalty.” (Prudential Home Mortgage Co. v. Superior Court (1998) 66 Cal.App.4th 1236, 1242.) In the context of a civil claim asserting Penal Code section 496, a one-year statute of limitations would apply to a request for treble damages pursuant to subdivision (c). However, the remaining claims pursuant to Penal Code section 496 have a three-year statute of limitations.

The filing of a complaint tolls the statute of limitations for cross-complaints. (Paredes v. Credit Consulting Services, Inc. (2022) 82 Cal.App.5th 410, 431; ZF Micro Devices, Inc. v. TAT Capital Partners, Ltd. (2016) 5 Cal.App.5th 69, 92.) Plaintiff’s complaint was filed July 3, 2024. Thus, July 3, 2024 is the date used to determine whether the claims in the cross-complaint are made beyond the applicable statute of limitations.

The running of the statute of limitations must appear clearly and affirmatively on the face of the complaint. (Committee for Green Foothills v. Santa Clara County Bd. of Supervisors (2010) 48 Cal.4th 32, 42.) The statute of limitations accrues “when a party knows or should know the facts essential to his claim. (Love v. Fire Ins. Exchange (1990) 221 Cal.App.3d 1136, 1143, emphasis in original.) Here, it is not clear from the face of the complaint or the cross-complaint whether the statute of limitations had run.

The crosscomplaint alleges Romo was employed from “approximately July 2021 through July 2024”. (FACC, ¶ 4, emphasis added.) It further alleges discovery of unauthorized charges on July 12, 2024. (FACC, ¶ 6.) The complaint alleges the employment relationship as “from July 2, 2021 through July 5, 2024.” (Complaint, ¶ 23.) Further, the Reply concedes at least one charge in question would be within the statute of limitations. (Reply, p. 7.)

Particularity

Romo captions an argument “The FACC Fails to Allege Theft With Particularity.” (Demurrer Memorandum, p. 9.) Romo presents no legal authority for the position that particularity is required for pleading Penal Code section 496 claims. Conclusions of fact or law are insufficient for pleading purposes. (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.) Counsel appears to confuse pleading conclusions with a standard of pleading with particularity. The court finds that the facts discussed above are sufficient for alleging a violation of Penal Code section 496.

Absurd Results

Civil Code section 3528 does prohibit absurd results. However, Romo cites to no authority for his position that treble damages and attorney’s fees would accomplish absurd results in the context of allegations of unauthorized uses of a credit card.

The court overrules the demurrer as to the third cause of action.

Common Counts 15

A claim for money had and received is pled by alleging 1) indebtedness in a certain sum, 2) consideration, and 3) nonpayment. (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460.) Thus, the cause of action is alleged where “the defendant is indebted to the plaintiff in a certain sum ‘for money had and received by the defendant for the use of the plaintiff.’” (Gutierrez v. Girardi (2011) 194 Cal.App.4th 925, 937, quoting Schultz v. Harney (1994) 27 Cal.App.4th 1611, 1623.) It is appropriately pled where a person receives money which belongs to another and “which in equity and good conscience should be paid over to the latter.” (Ibid, quoting Weiss v. Marcus (1975 51 Cal.App.3d 590, 599.) Here, the FACC alleges that Romo received money belonging to Croskrey and that it should be paid to Croskrey. (FACC, ¶¶ 28-30.) The court overrules the demurrer to this cause of action.

Strike

A motion to strike may be used to address defects in pleadings otherwise not challengeable by a demurrer. (See Code Civ. Proc., § 435.) Code of Civil Procedure section 436 provides that a court may strike irrelevant, false, or improper matters, or parts of pleadings not filed in conformity with the rules of court. A motion to strike can be used to attack either a portion or the entirety of a pleading. (Baral v. Schnitt (2016) 1 Cal.5th 376, 393.)

Litigation Privilege

Civil Code section 47, subdivision (b) provides that statements made in legislative, judicial, other official proceedings, or in initiation or course of proceedings authorized by law are privileged publications. None of the claims made in the cross-complaint have anything to do with publications or communications made in connection with a judicial proceeding. Rather, the cross-complaint alleges wrongful taking of funds. The court will not strike the cross-complaint based on litigation privilege.

Penal Code Section 496

For the same reasons as those discussed in the Demurrer section above, the court declines striking Penal Code section 496, the request for treble damages, and the request for attorney’s fees. Additionally, Romo presents an argument, without any legal authority, for striking the request for treble damages because Penal Code section 496, subdivision (c) uses the word “may” and the FACC uses the word “entitled”. This argument lacks authority or merit.

Punitive Damages

Civil Code section 3294, subdivision (a) provides that plaintiffs may recover punitive damages where there is clear and convincing evidence the defendant has engaged in oppression, fraud, or malice. Here, plaintiff has prayed for punitive damages based on malice and fraud. Malice is conduct which is intended to cause injury or “despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (Civ. Code, § 3294, subd. (c)(1).) Fraud is intentional misrepresentation, deceit, or concealment of a material fact. (Civ. Code, § 16

3294, subd. (c)(3).) The FACC alleges that Romo knew he would be quitting after obtaining cash advances and that these were requested with no intent to repay them. (FACC, ¶ 7.) This is sufficient. The court will not strike the punitive damages.

Emotional Distress Damages

Emotional distress damages are an available remedy for a conversion claim. (Gonzales v. Personal Storage, Inc. (1997) 56 Cal.App.4th 464, 477.) The court has overruled the demurrer as to the cause of action for conversion. Thus, the court will not strike the request for emotional distress damages.

Labor Code Policies and Retaliation

Labor Code section 98.6 makes it unlawful to retaliate against an employee for bringing a wage dispute. However, Romo has not pointed to a portion of the Labor Code which prevents an employer from bringing claims against an employee regarding funds allegedly wrongfully taken by the employee. Additionally, Romo asserts, without citing to any authority, that the FACC must be stricken as retaliatory. The court will not strike the FACC based on either of these assertions.

Pursuant to California Rules of Court, rule 3.1312(a), and Code of Civil Procedure section 1019.5, subdivision (a), no further written order is necessary. The minute order adopting this tentative ruling will serve as the order of the court and service by the clerk will constitute notice of the order.

Tentative Ruling

Issued By: SMC on August 31, 2026. (Judge’s initials) (Date)

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