Port Loading Services, Inc. v. Carlos Hernandez, Alliance Specialized Inc. and Terminal Lift Services LLC

(Governor George Deukmejian Courthouse: Dept. S28) September 9, 2026 DEPARTMENT S28 LAW AND MOTION RULINGS

BACKGROUND On December 30, 2025, Plaintiff Port Loading Services, Inc. ("Plaintiff" or "PLS") filed a complaint against Defendants Carlos Hernandez, Alliance Specialized Inc. and Terminal Lift Services LLC ("Defendants"), alleging it is the owner of five forklifts which Defendant Hernandez unlawfully removed from its possession. On April 30, 2026, Plaintiff filed the operative first-amended complaint ("FAC") after the Court sustained Defendants' demurrer for failing to state in each separately stated cause of action the party against whom each cause of action is directed to.

The Court declined to rule on the remaining grounds for demurrer in the interest of judicial economy, which Defendants assert in the instant Demurrer. On June 2, 2026, Defendants filed the instant Demurrer and Motion to Strike. On July 14, 2026, the Court denied Plaintiff's application for writ of possession. On August 24, 2026, Plaintiff filed oppositions to the Demurrer and Motion to Strike. As of September 8, 2026, Defendant has not filed a reply. DISCUSSION Applicable Law Code of Civil Procedure ("CCP") section 430.10 subdivision (e) is grounds for a demurrer when the complaint fails to state facts sufficient to constitute a cause of action.

CCP Sec. 430.10(f) is grounds for a demurrer when the complaint is uncertain (vague and ambiguous). For purposes of ruling on a demurrer, material facts properly pleaded in the complaint must be taken as true. (Serrano v. Priest (1971) 5 Cal.3d 584, 491.) A demurrer may challenge only defects that appear on the face of the pleading or from matters which are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 31; Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994; California Practice Guide, Civil Procedure Before Trial, P.7:8 (The Rutter Group 2024).)

The function of a demurrer is to test the legal sufficiency of a complaint, but not the truthfulness of the allegations. (Donabedian v. Mercury Ins. Co., supra, 116 Cal.App.4th at 994; Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388; SJJC Aviation Services, LLC v. City of San Jose (2017) 12 Cal.App.5th 1043, 1051-1052; California Practice Guide, Civil Procedure Before Trial, P.7:5 (The Rutter Group 2024).) Demurrers are to be sustained where a pleading fails to plead adequately any essential element of the cause of action. (Cantu v.

Resolution Trust Corp. (1992) 4 Cal.App.4th 857, 879-80.)

"'A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed (Code Civ. Proc., Sec.Sec. 430.30, 430.70). The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.'" (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747; Accord McKenney v. Purepac Pharmaceutical Co. (2008) 162 Cal.App.4th 72, 79.)

When considering demurrers, courts read the allegations liberally and in context. (McKenney, supra, 167 Cal.App.4th at 77; Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4 th 1216, 1228.) "If the complaint states a cause of action under any theory, regardless of the title under which the factual basis for relief is stated, that aspect of the complaint is good against a demurrer." (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38.) Analysis re: Demurrer A.

Demurrer for Uncertainty Demurrers for uncertainty are disfavored because ambiguities can be clarified through discovery. (Chen v. Berenjian (2019) 33 Cal.App.5th 811, 822.) The purpose of California's pleading standards is not to substitute for discovery, it is "to acquaint a defendant with the nature, source and extent of [the plaintiff's] cause of action." (Youngman v. Nevada Irrigation District (1969) 70 Cal.2d 240, 245; Doheny Park Terrace Homeowners Assn., Inc. v. Truck Ins. Exchange (2005) 132 Cal.App.4th 1076, 1099.)

Defendants claim that each cause of action is uncertain, but they make no legal argument as to how. Here, demurrers for uncertainty are disfavored and the Court finds that the FAC adequately acquaints Defendants with the nature, source and extent of the FAC. Thus, Defendants' demurrer is OVERRULED on the grounds of uncertainty. B. First Cause of Action: Intentional Fraud; Second Cause of Action: Negligent Misrepresentation "The elements of fraud are (a) a misrepresentation (false representation, concealment, or nondisclosure); (b) scienter or knowledge of its falsity; (c) intent to induce reliance; (d) justifiable reliance; and (e) resulting damage." (Hinesley v.

Oakshade Town Ctr. (2005) 135 Cal.App.4th 289, 294.) The facts constituting the alleged fraud must be alleged factually and specifically as to every element of fraud, as the policy of "liberal construction" of the pleadings will not ordinarily be invoked. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) To properly allege fraud against a corporation, the plaintiffs must plead the names of the persons allegedly making the false representations, their authority to speak, to whom

they spoke, what they said or wrote, and when it was said or written. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.) The elements of a cause of action for negligent misrepresentation include "[m]isrepresentation of a past or existing material fact, without reasonable ground for believing it to be true, and with intent to induce another's reliance on the fact misrepresented; ignorance of the truth and justifiable reliance on the misrepresentation by the party to whom it was directed; and resulting damage." (Hydro-Mill Co., Inc. v.

Hayward, Tilton & Rolapp Ins. Associates, Inc. (2004) 115 Cal.App.4th 1145, 1154, quotation marks omitted.) The facts constituting the alleged fraud must be alleged factually and specifically as to every element of fraud, as the policy of "liberal construction" of the pleadings will not ordinarily be invoked. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) To properly allege fraud against a corporation, the plaintiff must plead the names of the persons allegedly making the false representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Tarmann v.

State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.) Defendants argue that the FAC fails to allege fraud with particularity as it fails to sufficiently allege how, where, and by what means the alleged fraudulent representations were made. Defendants contend that the FAC alleges when the representation was made and who made the representation (Hernandez) but there are no facts as to 1) how the representations were made or 2) where they were made. Defendants further argue that the negligent misrepresentation cause of action fails for the same reason.

Plaintiff argues that the following allegations are sufficient: Plaintiff alleges that on or about June 29, 2020, Hernandez falsely represented that he would assist him with obtaining financing to purchase forklifts for PLS to begin operations and provide a $10,000 startup loan in exchange for PLS to refer trucking jobs to his company, Alliance. (FAC P. 24.) Plaintiff also alleges that Hernandez falsely claimed that PLS could make the monthly financing payments on the lifts and eventually own them outright. (Ibid.)

Plaintiff alleges that Defendants intended to defraud Plaintiff, that these representations were false and that Hernandez either knew them to be false or had no reasonable grounds to believe them to be true. (FAC P.P. 25, 30.) Plaintiff further alleges that it justifiably relied on these misrepresentations by agreeing to accept the loan and repaying it and by making financing payments on the forklifts. (Id. at P.P. 26, 31.) Plaintiff alleges it suffered harm as a result in that Defendants seized the forklifts and claimed to own them, disrupted its business operations, and took its employees and customers. (Id. at P.P. 27, 32.)

Here, the first and second causes of action are adequately alleged with particularity. Plaintiff identifies who made the misrepresentation, when the misrepresentation was made, and how Plaintiff relied on it. While Defendants claim that Plaintiff must allege "where" the misrepresentations were made, Defendants put forth no legal basis for this claim. Defendants also state the standard for the economic loss rule but makes no argument. Thus, Defendants' Demurrer is OVERRULED as to the First and Second Causes of Action.

C. Third Cause of Action: Intentional Interference with Contract Relations; Fourth Cause of Action: Intentional Interference with Prospective Economic Relations The elements of a cause of action for intentional interference with contractual relations are "(1) a valid contract between plaintiff and a third party; (2) defendant's knowledge of this contract; (3) defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage." (I-CA Enterprises, Inc. v.

Palram Americas, Inc. (2015) 235 Cal.App.4th 257, 289.) The elements of a claim for intentional interference with prospective economic advantage include "(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional or negligent acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant." (Crown Imports, LLC v.

Superior Court (2014) 223 Cal.App.4th 1395, 1404, citations, brackets, and quotation marks omitted.) Further, "the alleged interference must have been wrongful by some measure beyond the fact of the interference itself. For an act to be sufficiently independently wrongful, it must be unlawful, that is, it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard." (Ibid., citation, ellipsis, and quotation marks omitted.) Defendants argue that (1) the FAC fails to identify a single specific contract with any specific party; (2) the FAC alleges in Paragraph 36 that defendant's conduct "prevented performance of the contracts or made performance of the contract more difficult" but there must be an actual breach or disruption of the contract; (3) the FAC alleges in Paragraph 38 the FAC states "performance of the contract was disrupted" but it does not state the contract(s) were disrupted; and (4) no facts are alleged that Defendants Alliance Specialized Inc. and Terminal Lift Services took any action to cause breach of contract or disruption of contracts.

Plaintiff argues that the FAC's allegations are sufficient, as follows: Plaintiff alleges that it had contracts for loading services with third parties, that Defendants knew of these contracts, and that defendants prevented performance of these contracts or made performance more difficult when they seized Plaintiff's forklifts, took its employees, and slandered its reputation to existing customers. (FAC P.P. 34-36.) Plaintiff further alleges that Defendants intended to disrupt performance of these contracts or knew that disruption of performance was certain or substantially certain to occur, and that Plaintiff was harmed as a result of Defendants' conduct. (Id.

P.P. 37-39.) Plaintiff further alleges it was in an economic relationship with third parties that would have resulted in an economic benefit to Plaintiff, that Defendants knew of these relationships and engaged in the aforementioned wrongful conduct intended to disrupt the economic relationships, resulting in harm. (Id. at P.P.41-46.) Here, the third and fourth causes of action are sufficiently plead. Defendant fails to put forth any authority for

the proposition that Plaintiff is required to identify a specific contract with any specific party at the pleading stage. Regardless, Plaintiff identifies an oral contract between the parties regarding ownership of forklifts. Plaintiff also establishes that allegations of merely making performance more difficult are sufficient as the Judicial Council of California Civil Jury Instructions explicitly state both preventing performance of a contract or merely making performance more difficult or expensive is sufficient to support the claim. (See CACI No. 2201; Pacific Gas & Electric Co. v.

Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126.) Overall, Plaintiff has adequately pleaded its interference with contract claims. Thus, Defendants' Demurrer is OVERRULED as to the Third and Fourth Causes of Action. D. Fifth Cause of Action: Trade Libel The elements of a cause of action for trade libel are (1) a statement made to a third party by defendant that would clearly or necessarily be understood to have disparaged the quality of plaintiff's services; (2) that the statement is untrue; (3) that defendant knew the statement to be untrue or acted with reckless disregard of the truth or falsity of the statement; (4) that defendant knew or should have recognized that someone else might act in reliance on the statement, causing plaintiff financial loss; (5) that plaintiff suffered direct financial harm because someone else acted in reliance on the statement; and (6) causation. (See CACI No. 1731; City of Costa Mesa v.

D'Alessio Investments, LLC (2013) 214 Cal.App.4th 358, 376.) Defendants argue that Paragraph 47 of the Trade Libel cause of action incorporates all previous allegations, including Paragraph 21, which states that "Hernandez also made false statements regarding PLS to terminal employees and PLS customers in the process, including that PLS had stolen money, drained accounts, defrauded him, failed to pay its employees, and forced loaders to operate in dangerous conditions." Defendants argue that there are no facts alleging that defendant Alliance Specialized Inc. or Terminal Lift Services LLC made any statements whatsoever.

Plaintiff argues that the allegations are sufficient, as follows: Defendants made statements to third parties in October 2025 that Plaintiff stole money, drained accounts, defrauded Defendants, failed to pay employees, and forced loaders to use dangerous equipment. (FAC P. 48.) Plaintiff further alleges that these statements were false and disparaged the quality of the services offered by Plaintiff. (Ibid.) Plaintiff also alleges that Defendants knew such statements were untrue and knew or should have known that third parties would rely on them. (Id. at P.P. 49-50.)

Finally, Plaintiff alleges that it suffered direct financial harm as a result of Defendants' false statements, including the loss of its employees and customers. (Id. at P. 51.) Here, while there are no facts alleging that defendant Alliance Specialized Inc. or Terminal Lift Services LLC made any statements, the FAC adequately alleges that Hernandez dominated and controlled defendants Alliance and Terminal Lift, such that a unity of interest and ownership existed between Defendants, and Alliance and Terminal Lift are and were mere shells and conduits for Hernandez's affairs. (FAC, P.P. 7-8.)

Thus, Defendants' Demurrer is OVERRULED as to the Fifth Cause of Action. E. Sixth Cause of Action: Conversion "Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff's ownership or right to possession of the property; (2) the defendant's conversion by a wrongful act or disposition of property rights; and (3) damages." (Lee v. Hanley (2015) 61 Cal.4th 1225, 1240.) Here, Defendants again attack this cause of action for failing to allege that Alliance Specialized Inc. or Terminal Lift Services LLC handled any of plaintiff's property.

The Court again finds that the FAC adequately alleges that Hernandez dominated and controlled defendants Alliance and Terminal Lift, such that a unity of interest and ownership existed between Defendants, and Alliance and Terminal Lift are and were mere shells and conduits for Hernandez's affairs. Defendants further argue that a claim solely for conversion of funds is not allowed unless it is a specific amount, citing PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384, 395.

Plaintiff points out that this case upheld the trial court's grant of summary judgment on a conversion claim where the plaintiff was unable to identify a definite sum. (Id. at 395.) The Court agrees with Plaintiff that PCO, Inc is inapposite as the instant case is at the early pleading stage, and there is no pending motion for summary judgment before the Court. Plaintiff further contends that if such a Motion arises, Plaintiff can and will identify a definite sum that Defendants misappropriated by reviewing banking records and other business records.

That issue is not before the Court on the instant Motion. Thus, Defendants' Demurrer is OVERRULED as to the Sixth Cause of Action. F. Seventh Cause of Action: Breach of Oral Contract; Eighth Cause of Action: Breach of Implied Covenant of Good Faith and Fair Dealing To state a cause of action for breach of contract, Plaintiff must be able to establish "(1) the existence of the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to the plaintiff." (Oasis West Realty, LLC v.

Goldman (2011) 51 Cal.4th 811, 821.) "A breach of the implied covenant of good faith and fair dealing involves something beyond breach of the contractual duty itself and it has been held that bad faith implies unfair dealing rather than mistaken judgment." (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1394.) "If the allegations do not go beyond the statement of a mere contract breach and, relying on the same alleged acts, simply seek the same damages or other relief already claimed in a companion contract cause of action, they may be disregarded as superfluous as no additional claim is actually stated ... [T]he only justification for asserting a separate cause of action for breach of the implied covenant is to obtain a tort recovery." (Id. at pp. 1394-1395.)

To recover in tort for breach of the

implied covenant, the defendant must "have acted unreasonably or without proper cause." (Id. at p. 1395, citations and italics omitted.) Defendants argue that in order to properly allege breach of contract, Plaintiff had to establish that Defendants 1) did not provide the $10,000 loan and 2) did not assist with obtaining forklifts for plaintiff to utilize. Defendants contend that the FAC, however, makes no such allegations as Paragraph 15 clearly states a loan of $10,000 was provided to plaintiff and paragraphs 17 and 18 allege that Hernandez assisted with ensuring equipment financing obligations were met on the forklifts and that PLS acquired 5 forklifts.

Defendants further contend that the alleged breach consists of allegations that have nothing to do with the terms of the contract: Plaintiff alleges in Paragraph 61 that defendants 1) secretly misappropriated company funds belonging to Plaintiff for their own use 2) claimed ownership of forklifts seizing them 3) communicated false and damaging statements regarding plaintiff to third parties. Defendants further argue that there are no facts alleged that Defendant Terminal Lift Services, Inc. entered into the agreement.

Plaintiff argues that the FAC adequately alleges these causes of actions as follows: Plaintiff pleads the existence of a contract with Defendants under which Defendants would assist PLS with a startup loan and financing for equipment in return for Plaintiff referring trucking jobs to Alliance. (FAC at P.P. 59, 65.) Plaintiff pleads its performance under the contract and Defendants' breach and resulting damages. (Id. at P.P. 60-63, 67-70.) As to Defendants' argument that in order to properly allege its contract claims Plaintiff must "establish that defendants 1) did not provide the $10,000 loan and 2) did not assist with obtaining forklifts for plaintiff to utilize," Plaintiff argues that Defendants apply the incorrect burden of proof at this early pleading stage where material facts pleaded by Plaintiff must be treated as true.

Here, these causes of actions are adequately pled. The FAC alleges that Defendants breached an oral contract by secretly misappropriating company funds belonging to Plaintiff for their own use, claiming ownership of the forklifts and seizing them, claiming ownership of PLS, and diverting PLS customers to Defendants. (FAC, P. 61.) This is sufficient at the pleading stage. Thus, Defendants' Demurrer is OVERRULED as to the Seventh and Eighth Causes of Action. G. Ninth Cause of Action: Unjust Enrichment "The elements for a claim of unjust enrichment are receipt of a benefit and unjust retention of the benefit at the expense of another.

The theory of unjust enrichment requires one who acquires a benefit which may not justly be retained, to return either the thing or its equivalent to the aggrieved party so as not to be unjustly enriched." (Lyles v. Sangadeo-Patel (2014) 225 Cal.App.4th 759, 769, quotation marks and citations omitted.) Notably, "[u]njust enrichment is not a cause of action";

it is simply "a restitution claim." (Hill v. Roll International Corp. (2011) 195 Cal.App.4th 1295, 1307; see also Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th 779, 793 ["there is no cause of action in California for unjust enrichment"].) Defendants argue that Unjust Enrichment is not a proper cause of action. Plaintiff does not dispute this in opposition. Thus, Defendants' Demurrer is SUSTAINED as to the Ninth Cause of Action. H. Tenth Cause of Action: Unfair Business Practices The Court notes that Defendants make no argument as to the Tenth Cause of Action.

I. Eleventh Cause of Action: Breach of Fiduciary Duty "The elements of a cause of action for breach of fiduciary duty are the existence of a fiduciary relationship, breach of fiduciary duty, and damages." (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 820.) Defendants argue that there are no facts alleging that any Defendants owed any fiduciary duty of any type to Plaintiff. Plaintiff argues that the eleventh cause of action is sufficiently plead, as follows: P laintiff pleads that Defendants had access to Plaintiff's bank account such that there was a fiduciary duty to handle corporate funds with care and for the benefit of Plaintiff. (FAC at P. 80.)

Plaintiff further alleges that Defendants failed to act reasonably under the circumstances, breached their fiduciary duty to Plaintiff, and caused harm to Plaintiff. (Id. at P.P.81-82.) Here, the Court finds that the FAC's allegations are sufficient to support Plaintiff's cause of action for breach of fiduciary duty. Plaintiff alleges that Defendants were entrusted with disbursing moneys and are thus fiduciaries under the law and can be held liable for misappropriating company funds for their own benefit.

This is sufficient at the pleading stage. Thus, Defendants' Demurrer is OVERRULED as to the Eleventh Cause of Action. Analysis re: Motion to Strike Defendants ask the Court to strike the Ninth Cause of Action for Unjust Enrichment "because is it does not set forth sufficient allegations, as described in greater detail in Defendant's demurrer, to set forth a cause of action and was not filed in conformity with state law." (Mot. to Strike, p. 2.) This issue is MOOT given the Court's ruling sustaining the demurrer without leave to amend as to the Ninth Cause of Action.

CONCLUSION Defendants' Demurrer to the FAC is SUSTAINED without leave to amend as to the Ninth Cause of Action for unjust enrichment, and OVERRULED as to the remaining Causes of Action.

Defendants' Motion to Strike is DENIED as MOOT. | Home -->)" -->