American Health Capital v. Redfield Corp., et al.

While the Court acknowledges a declaration of due diligence also accompanies the Motion's proof of service, the Court does not find that the Sunset Plaza Address is listed in the declaration of due diligence either. Further, Plaintiff's supplemental declaration filed in support of the Motion stating that Plaintiff believes Defendant is in actual receipt of the Motion from the parties' communication on "WeChat" does not demonstrate legally adequate service of the Motion and notice of hearing. The Court may not rule on the Motion absent proper service and notice of hearing.

Furthermore, the Court notes that Plaintiff's counsel fails to provide evidence demonstrating how Plaintiff's counsel incurred $2,500 to enforce the Stipulation, such as Plaintiff's counsel's hours incurred and hourly billing rate. Thus, the Motion is CONTINUED to allow Plaintiff an opportunity to address the deficiencies noted herein. III. Conclusion & Order Plaintiff Yi Ping Lu's unopposed Motion to Enter Judgment Pursuant to Code of Civil Procedure section 664.6 is CONTINUED to Monday, October 12, 2026 at 9:00 a.m. in Department 512 of the Stanley Mosk Courthouse.

At least 16 court days prior to the next scheduled hearing, Plaintiff is to file and serve supplemental papers addressing the deficiencies noted herein. Moving party is ordered to give notice.

September 10, 2026 JUDGE /DEPT: Mkrtchyan/512 CASE NAME: American Health Capital v. Redfield COMP. FILED: 12-19-25 Corp., et al. CASE NUMBER: 25STCV37202 FAC FILED: 04-23-26 NOTICE: OK PROCEEDINGS: DEMURRER AND MOTION TO STRIKE MOVING PARTY: Defendants Redfield Corporation and Andrew Gould RESP. PARTY: None DEMURRER WITH MOTION TO STRIKE (CCP Sec.Sec. 430.10, et seq.; 435; 436) TENTATIVE RULING:

Defendants Redfield Corporation and Andrew Gould's Demurrer to the third, fourth, fifth, sixth, seventh, eighth, and ninth causes of action in the First Amended Complaint is SUSTAINED IN PART and OVERRULED IN PART. The Demurrer is SUSTAINED WITH 20 DAYS' LEAVE TO AMEND as to the third and seventh causes of action. The Demurrer is OVERRULED as to the fourth, fifth, sixth, eighth, ninth, and tenth causes of action. Defendants' Motion to Strike is DENIED. Moving parties are ordered to give notice. SERVICE: [X] Proof of Service Timely Filed (CRC, rule 3.1300) OK [X] Correct Address (CCP Sec.Sec. 1013, 1013a) OK [X] 16/21 Court Days Lapsed (CCP Sec.Sec. 12c, 1005(b)) OK OPPOSITION: Filed on August 7, 2026 [] Late [] None REPLY: Filed on September 2, 2026 [] Late [] None ANALYSIS: I.

Background

On December 19, 2025, Plaintiff American Health Capital ("Plaintiff") filed the instant action against Defendants Redfield Corporation and Andrew Gould ("Defendants") and Does 1-20. (Compl.) On April 23, 2026, Plaintiff filed a First Amended Complaint ("FAC") against Defendants, alleging causes of action for Breach of Contract; Breach of the Covenant of Good Faith and Fair Deling; Fraudulent Concealment; Conversion; Quantum Meruit/Restitution; Common Count (Services Rendered); Declaratory Relief; Intentional Interference with Contractual Relations; Intentional Interference with Prospective Economic Advantage; and Accounting. (FAC, p. 1.)

On May 26, 2026, Defendants filed a Declaration of Demurring or Moving Party in Support of Automatic Extension and an Amended Declaration of Demurring or Moving Party in Support of Automatic Extension. On June 26, 2026, Defendants filed the instant Demurrer to the FAC (the "Demurrer") and Motion to Strike (the "Motion"). Defendants also filed a request for judicial notice in support of the Motion. On August 7, 2026, Plaintiff filed an Opposition to the Demurrer and an Opposition to the Motion.

On August 11, 2026, the Court held as follows: "Ex parte application to (1) consider plaintiff's late-filed Opposition and (2) continue hearing on Defendants' Demurrer and Motion to Strike is GRANTED IN PART. Defendants Redfield Corporation and Andrew Gould's Demurrer and Motion to Strike are CONTINUED to Thursday, September 10, 2026, at 9:00 a.m. in Department 512 of the Stanley Mosk Courthouse. Defendants are to file Reply briefs per the Code." (8/11/26 Order.) That same day, Plaintiff filed and served notice of ruling.

On September 2, 2026, Plaintiff filed a Reply to the Demurrer and a Reply to the Motion. II. Request for Judicial Notice In conjunction with the Motion, Defendants request the Court take judicial notice of the FAC filed in this matter. (See Motion, RJN, p. 1, Exh. 1.) The Court GRANTS this request pursuant to Evidence Code section 452, subdivision (d). III. Legal Standard "As a general matter, in a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v.

Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) "A demurrer tests the pleading alone, and not the evidence or facts alleged." (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes the truth of the complaint's properly pleaded or implied factual allegations. (Ibid.) The only issue a demurrer is concerned with is whether the complaint, as it stands, states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) A general demurrer may be brought under Code of Civil Procedure section 430.10, subdivision (e) if insufficient facts are stated to support the cause of action asserted or under section 430.10, subdivision (a), where the court has no jurisdiction of the subject of the cause of action alleged in the pleading.

All other grounds listed in Section 430.10, including uncertainty under subdivision (f), are special demurrers. Special demurrers are not allowed in limited jurisdiction courts. (Code Civ. Proc., Sec. 92, subd. (c).) Where a demurrer is sustained, leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the plaintiff to show the court that a pleading can be amended successfully. (Id.; Lewis v.

YouTube, LLC (2015) 244 Cal.App.4th 118, 226.) However, "[i]f there is any reasonable possibility that the plaintiff can state a good cause of action, it is error to sustain a demurrer without leave to amend." (Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 245).

IV.

Discussion

A. Meet and Confer Code of Civil Procedure section 430.41 requires that "[b]efore filing a demurrer pursuant to this chapter, the demurring party shall meet and confer in person, by telephone, or by video conference with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer." (Code Civ. Proc., Sec. 430.41, subd. (a).) The parties are to meet and confer at least five days before the date the responsive pleading is due. (Code Civ.

Proc., Sec. 430.41, subd. (a)(2).) Thereafter, the demurring party shall file and serve a declaration detailing their meet and confer efforts. (Code Civ. Proc., Sec. 430.41, subd. (a)(3).) The Demurrer is accompanied by a meet and confer declaration as required by Code of Civil Procedure section 430.41, subdivision (a). (Demurrer, Puritsky Decl.) According to the declaration, Plaintiffs failed to respond to Defendants' request to meet and confer or otherwise failed to meet and confer in good faith. (Demurrer, Puritsky Decl., P. 2.)

The Court finds the meet and confer requirement is satisfied. B. Demurrer Defendants demur to the third, fourth, fifth, sixth, seventh, eighth, and ninth causes of action in the FAC for failure to allege sufficient facts to state each cause of action. In Opposition, Plaintiff contends all challenged causes of action are adequately pled. (Opp., pp. 3-10.) Further, Plaintiff contends the economic loss rule does not bar an intentional fraud claim; the manager's privilege does not bar the eighth cause of action; and the fifth and sixth causes of action are properly pled in the alternative. (Opp., pp., 3-10.)

Should the Court sustain the Demurrer in any way, Plaintiff requests leave to amend as any identified defect can be cured. (Opp., p. 10.) In Reply, Defendants emphasize arguments raised in the Demurrer, distinguishes the case law relied upon by Plaintiff, and states Plaintiff concedes various of the Demurrer's points in the Opposition. (See Reply, pp. 2-10.) Third Cause of Action - Fraudulent Concealment The elements of fraud are: " '(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or 'scienter'); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.' " (Charnay v.

Cobert (2006) 145 Cal.App.4th 170, 184, citing Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) A cause of action for fraud must be " 'pled specifically; general and conclusory allegations do not suffice. ... " 'This particularity requirement necessitates pleading facts which " 'show how, when, where, to whom, and by what means the representations were tendered.' " ' " (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184,

citing Lazar, supra, 12 Cal.4th at p. 645.) "A plaintiff may assert a fraudulent concealment cause of action based on conduct occurring in the course of a contractual relationship if the elements of the claim can be established independently of the parties' contractual rights and obligations, and the tortious conduct exposes the plaintiff to a risk of harm beyond the reasonable contemplation of the parties when they entered into the contract." (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 13.) "[U]nder the economic loss rule, tort recovery for breach of a contract duty is generally barred (but see generally fns. 3 & 5 at pp. 19, ante, & 23, post) unless two conditions are satisfied.

A plaintiff must first demonstrate the defendant's injury-causing conduct violated a duty that is independent of the duties and rights assumed by the parties when they entered the contract. Second, the defendant's conduct must have caused injury to persons or property that was not reasonably contemplated by the parties when the contract was formed." (Rattagan, supra, 17 Cal.5th at pp. 20-21.) Here, the FAC alleges facts to show that the scope of the contract between the parties is inclusive of the notification and compensation requirement alleged to form the basis of the Fraudulent Concealment cause of action. (See FAC, pp. 16-19, Exh.

A, P.P. 3, 12.) Given the scope of the parties' contract, the FAC fails to allege any duty independent of the rights and duties assumed by the parties when they entered the contract that would support the Fraudulent Concealment cause of action. (See FAC, Exh. A, P.P. 3, 12; Rattagan, supra, 17 Cal. 5th at pp. 13, 20-21.) To the extent the FAC contains a conclusory statement that additional duties are alleged, this vague reference is insufficient to plead a specific duty beyond the scope of the contract.

The FAC also fails to allege any tortious conduct that exposed Plaintiffs to a risk of harm beyond the reasonable contemplation of the parties when they entered into the contract. (Ibid.) Insofar as the Opposition states LiMandri v. Judkins 91997) 52 Cal.App.4th 326, abrogated in part, supports the contention that the FAC here contains sufficient allegations to plead fraud, the Court disagrees. The Court finds the instant FAC and the claims therein distinguishable from those in LiMandri, and the Court is not persuaded that the FAC alleges sufficient facts to demonstrate "defendant actively conceal[ed] a material fact from the plaintiff" that would serve as the basis for actionable fraud. (Id., at p. 336-337.)

Thus, the Court finds the FAC fails to state sufficient facts to constitute a Fraudulent Concealment cause of action. Accordingly, the Demurrer is SUSTAINED as to the third cause of action. Fourth 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.) " 'Money cannot be the subject of a cause of action for conversion unless there is a specific, identifiable sum involved, such as where an agent accepts a sum of money to be paid to another and fails to make the payment.' [Citation.]" (PCO, Inc. v.

Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384, 395.) "California cases permitting an action for conversion of money typically involve those who have misappropriated, commingled, or misapplied specific funds held for the benefit of others." (Id., at p. 396.) "In contrast, actions for the conversion of money have not been permitted when the amount of money involved is not a definite sum." (Ibid.) Here, the Court finds the FAC alleges Plaintiff's ownership or right to possession of "8% commission (approximately $120,000 based on the $1,500,000 sale price) [that] constituted a specifically identified, earmarked sum held for AHC's benefit - not a mere general contractual debt.

This identifiable res was segregated by agreement and was to be paid to AHC prior to any disbursement to Defendants. Defendants wrongfully intercepted and retained this specific, identified fund for their own benefit." (FAC, P.P. 52, Prayer; see PCO, Inc., supra, 150 Cal.App.4th at pp. 395-396.) Thus, the FAC alleges sufficient facts to constitute a conversion cause of action. Accordingly, the Demurrer is OVERRULED as to the fourth cause of action. Fifth Cause of Action - Quantum Meruit The elements of a cause of action for quantum meruit are "(1) the plaintiff acted pursuant to 'an explicit or implicit request for the services' by the defendant, and (2) the services conferred a benefit on the defendant." (Port Medical Wellness, Inc. v.

Connecticut General Life Insurance Company (2018) 24 Cal.App.5th 153, 180.) Said alternatively, the party "must show the circumstances were such that 'the services were rendered under some understanding or expectation of both parties that compensation therefor was to be made.' " (Chodos v. Borman (2014) 227 Cal.App.4th 76, 96.) Here, the FAC pleads a breach of contract claim and then pleads a quantum meruit claim that states, "[t]o the extent this cause of action is deemed inconsistent with a contract-based claim, it is pleaded in the alternative." (FAC, P. 57.)

In the quantum meruit portion of the FAC, the FAC pleads that Plaintiff acted pursuant to Defendants' request to provide services in 2024-2025 in connection with the Redfield's business, including "marketing the Redfield business opportunity to potential buyers; identifying and contacting qualified prospects; and introducing potential buyers to Redfield. [Plaintiff] rendered all such services with the reasonable expectation of being compensated if a sale of the business was consummated. Defendants knew or should have known

that [Plaintiff] expected to be paid for its efforts - indeed, no reasonable person in [Plaintiff's] position would provide these extensive services for free." (FAC, P.P. 58, 60-61.) The FAC also alleges that Plaintiff provided these services to Defendants; Defendants accepted and benefitted from Plaintiff's services; and Defendants, as a result of Plaintiff's services and efforts, were "able to secure a purchaser and complete a lucrative sale of Redfield's business (for approximately $1.5 million, or another substantial sum to be proven). [Plaintiff's] industry contacts and preliminary work significantly contributed to the sale by either producing the buyer directly or by creating competitive interest that led to the sale." (FAC, P.P. 58-59.)

Accordingly, the Court finds the FAC states sufficient facts to state a quantum meruit cause of action. (See Advanced Choices, Inc. v. Dept. of Health Services (2010) 182 Cal.App.4th 1661, 1673 [" '[A] plaintiff must establish both that he or she was acting pursuant to either an express or implied request for such services from the defendant and that the services rendered were intended to and did benefit the defendant' "], emphasis in original; MKB Management, Inc. v. Melikian (2010) 184 Cal.App.4th 796, 805 ["Recovery in quantum meruit or for money paid at the defendant's request does not require the existence of an enforceable contract ...

Even if the entire contract was illegal and unenforceable, a plaintiff may recover the reasonable value of services rendered provided that those particular services were not legally prohibited"].) Thus, the Demurrer is OVERRULED as to the fifth cause of action. Sixth Cause of Action - Common Count The required elements of a common count claim are " '(1) the statement of indebtedness in a certain sum, (2) the consideration, i.e., goods sold, work done, etc., and (3) nonpayment. A cause of action for money had and received is stated if it is alleged 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.' " (Farmers Insurance Exchange v.

Zerin (1997) 53 Cal.App.4th 445, 460, citations omitted.) "A common count is not a specific cause of action, however; rather, it is a simplified form of pleading normally used to aver the existence of various forms of monetary indebtedness, including that arising from an alleged duty to make restitution under an assumpsit theory. When a common count is used as an alternative way of seeking the same recovery demanded in a specific cause of action, and is based on the same facts, the common count is demurrable if the cause of action is demurrable." (McBride v.

Boughton (2004) 123 Cal.App.4th 379, 394.) Here, the FAC states Defendants are indebted to Plaintiff for approximately $120,000 for the use of Plaintiff's services, and Defendants have not paid Plaintiff the amount owed despite demand. (See FAC, P.P. 25-33, 57-61, 67-72.) Further, the Court finds the common count is seeking the same recovery demanded in the quantum meruit cause of action and is based on the same facts, and the Demurrer is overruled as to that cause of action; further, the common count is seeking the same recovery as the breach

of contract cause of action and is based on the same facts, and there is no challenge in the Demurrer to the breach of contract cause of action. (See McBride, supra, 123 Cal.App.4th at p. 394.) Thus, the Demurrer is OVERRULED as to the sixth cause of action. Seventh Cause of Action - Declaratory Relief The sole challenge Defendants raise to the seventh cause of action is that the FAC fails to plead facts "indicating there is any future controversy that declaratory relief would mitigate. Declaratory relief is unnecessary and improper in these circumstances." (See Demurrer, pp. 9-10.)

A complaint must show a proper subject for declaratory relief and an actual controversy involving justiciable questions relating to the rights or obligations of a party.... Declaratory relief operates prospectively--a remedy 'to be used in the interests of preventive justice, to declare rights rather than execute them.' [Citation.] A proper subject includes a declaration of one's rights and duties under a contract. (Sec. 1060.) A controversy is ripe when it has reached, but has not passed, the point that the facts sufficiently have congealed to permit the court to issue a useful decision. [Citation.]

The purpose of the declaration is to allow the parties to shape their conduct to avoid a breach.... There is no basis for declaratory relief where only past wrongs are involved. (Cordoba Corp. v. City of Industry (2023) 87 Cal.App.5th 145, 156-157.) Here, the FAC seeks "a declaratory judgment that Defendants are liable to Plaintiff under the Finder's Fee Agreement ... including declarations that the Agreement (Exhibit A) is enforceable, that Plaintiff is entitled to an 8% finder's fee (plus $799) on the sale of Redfield's business, that Defendants are obligated to pay said fee, and that Defendants' failure to disclose the buyer's identity triggers contractual liquidated damages of up to 50% of the fee under Paragraph 14 of the Agreement...; for an order compelling an accounting of all consideration received by Defendants in connection with the sale; and for the imposition of a constructive trust as an equitable remedy over all commission funds wrongfully withheld from [Plaintiff].) (FAC, Prayer; see FAC, P.P. 77-80.)

The Court finds the FAC's basis for declaratory relief only involves past wrongs and methods to remedy past wrongs. The FAC fails to show a proper subject for declaratory relief that would "allow the parties to shape their conduct to avoid a breach." (See Cordoba Corp., supra, 87 Cal.App.5th at pp. 156-157.) As such, the Court finds the FAC fails to state sufficient facts to state a declaratory relief cause of action. Thus, the Demurrer is SUSTAINED as to the seventh cause of action. Eighth Cause of Action - Interference with Contractual Relations " 'The elements of a cause of action for intentional interference with contractual relations

are "(1) the existence of a valid contract between the plaintiff and a third party; (2) the defendant's knowledge of that contract; (3) the 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." ' " (Jenni Rivera Enterprises, LLC v. Latin World Entertainment Holdings, Inc. (2019) 36 Cal.App.5th 766, 782.) "The tort of inducing breach of contract requires proof of a breach, whereas the tort of interference with contractual relations requires only proof of interference." (Ibid.) "It is also well established that corporate agents and employees acting for and on behalf of a corporation cannot be held liable for inducing a breach of the corporation's contract." (Shoemaker v.

Myers (1990) 52 Cal.3d 1, 24.) "[W]hen a manager [stands] to reap a tangible personal benefit from the principal's breach of contract, so that it is at least reasonably possible that the manager acted out of self-interest rather than in the interest of the principal, the manager should not enjoy the protection of the manager's privilege unless the trier of fact concludes that the manager's predominant motive was to benefit the principal." (Huynh v. Vu (2003) 111 Cal.App.4th 1183, 1198.) Here, the FAC alleges that a valid contract existed between Plaintiff and Redfield; Gould knew of said agreement; Gould intentionally engaged in acts designed to induce a breach of the agreement including concealing negotiations and a sale from Plaintiff; deliberately excluding Plaintiff from the transaction; closing the sale without Plaintiff's participation; and advising or causing Redfield to repudiate the fee obligation; Redfield breached the agreement as a result of Gould's actions; and Plaintiff suffered harm as a result in the amount of approximately $120,000. (FAC, P.P. 81-90.)

The FAC pleads that Gould is "the owner and principal of Redfield, and he personally signed the Agreement on Redfield's behalf as 'Owner' of the company." (FAC, P.P. 5, 83.) "It is ... well established that corporate agents and employees acting for and on behalf of a corporation cannot be held liable for inducing a breach of the corporation's contract." (Shoemaker, supra, 52 Cal.3d at p. 24.) However, the Court finds the FAC adequately pleads facts demonstrating the exception to this general rule as outlined in Huynh, supra, 111 Cal.App.4th 1183.

Indeed, P.P. 85-87 of the FAC suffice to plead Gould had mixed motives and/or a predominant motive of Gould's own separate and apart from that of Redfield. (See ibid.) Thus, the Demurrer is OVERRULED as to the eighth cause of action. Ninth Cause of Action - Intentional Interference with Prospective Economic Advantage "The elements of the tort of interference with prospective economic advantage are '(1) a

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) a wrongful act, apart from the interference itself, by 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.' " (Salma v. Capon (2008) 161 Cal.App.4th 1275, 1290.) "It is also well established that corporate agents and employees acting for and on behalf of a corporation cannot be held liable for inducing a breach of the corporation's contract." (Shoemaker, supra, 52 Cal.3d at p. 24.)

Here, the FAC alleges that there was a relationship between Plaintiff and Redfield with the probability of future economic benefit to Plaintiff "with respect to the transaction it arranged for Redfield"; Gould knew of said relationship and that Plaintiff was expected to economically benefit from the transaction; Gould committed independent wrongful acts to interfere with Plaintiff's expected economic advantage through the relationship such as concealing and suppressing material facts, and wrongfully proceeding with the sale without Plaintiff's involvement; the relationship was actually disrupted; and Plaintiff was damaged in the loss of anticipated commission amidst other costs. (FAC, P.P. 91-96.)

The FAC pleads that Gould is "the owner and principal of Redfield, and he personally signed the Agreement on Redfield's behalf as 'Owner' of the company." (FAC, P.P. 5, 83.) "It is ... well established that corporate agents and employees acting for and on behalf of a corporation cannot be held liable for inducing a breach of the corporation's contract." (Shoemaker, supra, 52 Cal.3d at p. 24.) However, the Court finds the FAC adequately pleads facts demonstrating the exception to this general rule as outlined in Huynh, supra, 111 Cal.App.4th 1183.

Indeed, P.P. 85-87 of the FAC suffice to plead Gould had mixed motives and/or a predominant motive of Gould's own separate and apart from that of Redfield. (See ibid.) Thus, the Demurrer is OVERRULED as to the ninth cause of action. Tenth Cause of Action - Accounting "A right to an accounting is derivative; it must be based on other claims." (Janis v. Cal. State Lottery Com. (1998) 68 Cal.App.4th 824, 833-834.) Here, the first cause of action for breach of contract is unchallenged by the Demurrer, and the tenth cause of action is at least derivative of the breach of contract claim. (Ibid.)

Further, the Court finds the FAC alleges facts demonstrating that the total amount due in this action cannot be ascertained merely by calculation given the complexity of the consideration. (See FAC, P.P. 98-99; Tesell v. McLoughlin (2009) 173 Cal.App.4th 156, 179.) Thus, the Demurrer is OVERRULED as to the tenth cause of action.

Leave to Amend Where a demurrer is sustained, leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman, supra, 18 Cal.3d at p. 348.) As this is the first demurrer to the operative complaint, and Plaintiff requests leave to amend in the Opposition, the Court finds leave to amend appropriate at this time. Thus, the Demurrer is SUSTAINED WITH LEAVE TO AMEND as to the third and seventh causes of action. The Demurrer is otherwise OVERRULED. C. Motion to Strike Defendants seek to strike all allegations regarding the fifty percent liquidated damages provision in the parties' agreement and punitive damages from the FAC. (Motion.)

In Opposition, Plaintiff contends that the liquidated damages allegations are presumptively valid under the Civil Code and may not be determined on a motion to strike, and the punitive damages allegations are properly pleaded and rest on the pleaded facts of fraud and malice. (Opp., pp. 5-9.) Plaintiff also submits two declarations in support of the Opposition. In Reply, Defendants argue against Plaintiff's assertions and emphasize arguments raised in the Motion. (Reply, pp. 1-6.)

Legal Standard

California law authorizes a party's motion to strike matter from an opposing party's pleading if it is irrelevant, false, or improper. (Code Civ. Proc. Sec.Sec. 435, 436.) Motions may also target pleadings or parts of pleadings that are not filed or drawn in conformity with applicable laws, rules, or orders. (Code Civ. Proc. Sec. 436, subd. (b).) The Code of Civil Procedure also authorizes the Court to act on its own initiative to strike matters, empowering the Court to enter orders striking matter "at any time in its discretion, and upon terms it deems proper." (Code Civ.

Proc. Sec. 436.) Finally, Code of Civil Procedure section 435.5 requires that "[b]efore filing a motion to strike pursuant to this chapter, the moving party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to the motion to strike for the purpose of determining whether an agreement can be reached that resolves the objections to be raised in the motion to strike." (Code Civ. Proc. Sec. 435.5, subd. (a).) (Emphasis added.) Punitive damages are authorized by Civil Code section 3294 in non-contract cases "where the defendant has been guilty of oppression, fraud, or malice, express or implied . . . ." (Civil Code, Sec. 3294, subd. (a).)

Malice means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is

carried on by the defendant with a willful and conscious disregard of the rights or safety of others. (Civil Code, Sec. 3294, subd. (c)(1).) Oppression means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights. (Civil Code, Sec. 3294, subd. (c)(2).) Fraud means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the party of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury. (Civil Code, Sec. 3294, subd. (c)(3).) " '[P]unitive damages " 'are never recoverable for breach of contract, no matter how willful or malicious, except where the wrongful act is also a tort.' " ' " (Rattagan, supra, 17 Cal.5th at p. 20.)

Meet and Confer As an initial matter, the Court finds Defendants have satisfied the meet and confer requirement of Code of Civil Procedure section 435.5. The Motion is accompanied by a declaration stating Plaintiffs failed to respond to Defendants' request to meet and confer or otherwise failed to meet and confer in good faith. (Motion, Puritsky Decl., P. 2.) Liquidated Damages Allegations As to the allegations regarding the fifty percent liquidated damages provision, the Court finds the FAC contains causes of action - for instance, the breach of contract cause of action - that could provide for the award of the fifty percent liquidated damages provision outlined in the parties' agreement.

Thus, the Court finds the fifty percent liquidated damages provision in the FAC are sufficiently supported by the FAC's allegations. To the extent the Motion attempts to have the Court substantively evaluate whether the provision in the parties' agreement constitutes an unlawful penalty or a permissible liquidated damages provision at this stage in the proceedings and by way of a motion to strike, the Court does not find the instant Motion is the appropriate legal vehicle in which to rule on the merits of this request.

Accordingly, the Motion is DENIED as to the fifty percent liquidated damages provision references in the FAC. Punitive Damages As to the allegations regarding punitive damages, the FAC seeks punitive damages in conjunction with the third, fourth, eighth, and ninth causes of action. The Demurrer has been sustained as to the third cause of action. As such, the request to strike punitive damages in relation to this cause of action is Moot. As to the punitive damages allegations in relation to the fourth cause of action, the Court finds the FAC fails to include sufficient allegations to demonstrate malice, oppression, or fraud as to this cause of action. (See Civil Code, Sec. 3294, subd. (a).)

However, the Court overruled the

Demurrer as to the eighth and ninth tortious causes of action and finds those allegations in the FAC serve as a sufficient basis to support the punitive damages request in the FAC. (See FAC, P.P. 81-96.) Thus, the Motion is DENIED. D. Conclusion & Order Based on the foregoing, Defendants Redfield Corporation and Andrew Gould's Demurrer to the third, fourth, fifth, sixth, seventh, eighth, and ninth causes of action in the First Amended Complaint is SUSTAINED IN PART and OVERRULED IN PART. The Demurrer is SUSTAINED WITH 20 DAYS' LEAVE TO AMEND as to the third and seventh causes of action. The Demurrer is OVERRULED as to the fourth, fifth, sixth, eighth, ninth, and tenth causes of action. Defendants' Motion to Strike is DENIED. Moving parties are ordered to give notice. | Home -->)" -->