ALICIA PETRAKIS, ET AL VS. ALEX KHOJIKIAN, ET AL

A court reviewing a demurrer accepts as true the facts alleged in the complaint as well as those of which it may take judicial notice (John’s Grill, supra, 16 Cal.5th at p. 1008, citing Blank v. Kirwan (1985) 39 Cal.3d 311, 318), but does not “assume the truth of contentions, deductions or conclusions of law.” (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 967 (Aubry).)

B. Discussion

1. The Demurrer to the Second Cause of Action for Fraud is Sustained with Leave to Amend

Fraud claims, including those alleged against public entities, must be pled with particularity. This heightened pleading standard requires the plaintiff to allege every element of the cause of action for fraud factually and specifically, and the complaint must include details

June 3, 2026 Law and Motion Calendar Judge Nicole S. Healy Department 28 ________________________________________________________________________ such as “how, when, where, to whom, and by what means” the false representations were made. (State ex rel. Edelweiss Fund, LLC v. JPMorgan Chase & Co. (2023) 90 Cal.App.5th 1119, 1136-1137, quoting Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) The specificity requirement serves to provide notice to the defendant of the fraudulent conduct alleged, weed out non-meritorious claims, and ensure that the court can assess the validity of the allegations based on the facts pleaded. (JPMorgan Chase Bank, N.A. v. Superior Court (2022) 85 Cal.App.5th 477.)

Government Code, section 818.8 provides immunity to public entities for injuries caused by misrepresentation by their employees, whether negligent or intentional. (Gov. Code, § 818.8.) This immunity bars fraud claims against public entities based on misrepresentation, even where the misrepresentation is intentional. (Burden v. County of Santa Clara (2000) 81 Cal.App.4th 244.) However, public employees may be held liable for actual fraud if the plaintiff alleges, in addition to the ordinary elements of common-law deceit, that the misrepresentation was motivated by corruption or actual malice. (Gov. Code, § 822.2; Masters v. San Bernardino County Employees Retirement Assn. (1995) 32 Cal.App.4th 30, 42 (Masters).) Further, under Government Code, sections 818.8 and 822.2, a governmental entity does not have immunity for misrepresentations involving a risk of physical harm.

To plead a cause of action for fraud, a plaintiff must allege the elements of common-law deceit, which include: (1) a false representation of a material fact, (2) knowledge of its falsity, (3) intent to induce reliance, (4) justifiable reliance by the plaintiff, and (5) resulting damages. (Civ. Code, §1572.) In cases involving public employees, the plaintiff must also allege that the misrepresentation was motivated by actual malice or corruption. (Masters, supra, 32 Cal.App.4th at p. 42.)

The court previously sustained defendants’ demurrer to plaintiffs’ fraud claim for failing to plead actual malice or corruption with particularity against any defendant, and for failing to allege actual malice or corruption that purportedly caused physical harm to Petrakis. (Order Sustaining Defendants’ Demurrer, Dec. 19, 2025, at p. 4.)

Plaintiffs have now pled additional allegations including the following:

• When plaintiff Petrakis met with City officials, including defendant Khojikian, the City Manager, “to explain the issues and to seek to adjust her lease to account for the restaurant’s success, he instead told her that the issues with the building were ‘her fault.’” Defendant Joanne Magrini, the City’s Director of Parks and Recreation, told Petrakis that “there were no problems with the building.” Several other unidentified City employees also allegedly misrepresented to Petrakis that the building was safe to occupy and use. “That was false, and City employees told Alicia those things with the intent to harm her.” (FAC, ¶ 14.)

• Khojikian “knew that the building had issues, misrepresented both those issues, and blamed Alicia for the issues, despite knowing that they were not her responsibility. He

June 3, 2026 Law and Motion Calendar Judge Nicole S. Healy Department 28 ________________________________________________________________________ did so maliciously, with intent to harm Alicia, in retaliatory response to her attempt to renegotiate her lease with the City.” (FAC, ¶ 52.)

• When Petrakis went to Khojikian and “expressed her displeasure with the conditions at the building and demanded a concession in the amount of rent, Khojikian told her that the building’s problems were actually caused by Alicia.” Khojikian knew this was false and did so to intentionally harm Alicia. Khojikian delivered those statements to Alicia with malice.” (FAC, ¶ 81.)

• “At the time, Khojikian had been briefed by as yet unknown City employees that there were serious issues with the physical plant at Par3, caused by a damaged sewer lateral. Khojikian and other employees deliberately concealed this information from Alicia, and did so maliciously, in an attempt at retribution for daring to request a rent reduction on a building.” (FAC, ¶ 82.)

Plaintiffs’ new allegations include conclusory statements that Khojikian, Magrini, and other unidentified City employees acted “maliciously” and “with an intent to harm” Petrakis. The allegations lack specificity, including as to what Khojikian, Magrini, and the unidentified City employees allegedly knew about the building’s condition and when they knew it, and how any alleged statements were therefore false and made with malice. Indeed, the most specific newly added allegation — that Khojikian had been briefed by unknown City employees “that there were serious issues with the physical plant at Par3, caused by a damaged sewer lateral” — does not allege whether Khojikian or anyone else employed by the City knew of the issues allegedly caused by the defective sewer lateral at the time of the RFP in 2018, or whether he was briefed about the lateral at or near the time Petrakis met him to renegotiate the lease, in 2024. (See FAC, ¶¶ 28-30, 46-47, 51, 77-80, 81-82.)

That is, the allegations do not connect the dots between the defendants’ alleged knowledge of the defects and their allegedly contemporaneous or subsequent misrepresentations or omissions in their communications with Petrakis.

Likewise, plaintiff’s allegations — that Khojikian allegedly blamed Petrakis for the building’s defects, or that Magrini and other City employees misrepresented that the building was safe to occupy and use — do not, without more, establish that defendants made such statements maliciously or corruptly and with the intent to harm plaintiff. Further, the allegations regarding Petrakis’s alleged injuries, that she suffered unspecified harm to her health as well as emotional distress, are conclusory. (FAC, ¶ 88.)

Accordingly, defendants’ demurrer is SUSTAINED as to plaintiffs’ fraud claim, with leave to amend.

2. The Demurrer to the Third Cause of Action for Dangerous Condition of Public Property is Overruled

Government Code, section 835, sets forth the exclusive conditions under which a public entity may be held liable for injuries caused by dangerous conditions of public property. Under Section 835, a public entity is liable if the plaintiff establishes the following elements: (1) the

June 3, 2026 Law and Motion Calendar Judge Nicole S. Healy Department 28 ________________________________________________________________________ property was in a dangerous condition at the time of the injury; (2) the injury was proximately caused by the dangerous condition; (3) the dangerous condition created a reasonably foreseeable risk of the kind of injury which was incurred; and (4) either (a) a negligent or wrongful act or omission of an employee of the public entity within the scope of their employment created the dangerous condition, or (b) the public entity had actual or constructive notice of the dangerous condition under Section 835.2 a sufficient time prior to the injury to have taken measures to protect against the dangerous condition. (Thimon v. City of Newark (2020) 44 Cal.App.5th 745; Cerna v. City of Oakland (2008) 161 Cal.App.4th 1340.)

A public entity may be held liable for dangerous conditions it creates through the negligent or wrongful acts or omissions of its employees acting within the scope of their employment. (Cerna v. City of Oakland, supra, 161 Cal.App.4th 1340.) In such cases, the public entity is presumed to have notice of the dangerous condition because it affirmatively created the condition. (Brown v. Poway Unified School Dist. (1993) 4 Cal.4th 820; Martinez v. City of Beverly Hills (2021) 71 Cal.App.5th 508.) A public entity may also be liable for dangerous conditions not of its own making if it had actual or constructive notice of the condition and failed to take adequate measures to protect against it. (Gov. Code, § 835; Summerfield v. City of Inglewood (2023) 96 Cal.App.5th 983.)

Liability may also arise when the public entity fails to provide safeguards against a dangerous condition of which it had notice. (Swaner v. City of Santa Monica (1984) 150 Cal.App.3d 789.) “A public entity had constructive notice of a dangerous condition within the meaning of subdivision (b) of Section 835 only if the plaintiff establishes that the condition had existed for such a period of time and was of such an obvious nature that the public entity, in the exercise of due care, should have discovered the condition and its dangerous character.” (Gov. Code, § 835.2.)

Under the Tort Claims Act, all governmental tort liability is based on statute. Accordingly, “to state a cause of action against a public entity, every fact material to the existence of its statutory liability must be pleaded with particularity.” (Lopez v. Southern Cal. Rapid Transit Dist. (1985) 40 Cal.3d 780, 795, internal citations omitted; Brenner v. City of El Cajon (2003) 113 Cal.App.4th 434, 439.) A claim alleging a dangerous condition may not rely on generalized allegations but must specify how the alleged defect constituted a dangerous condition. (Mittenhuber v. City of Redondo Beach (1983) 142 Cal.App.3d 1, 5; People ex rel Dept. of Transportation v. Superior Court (1992) 5 Cal.App.4th 1480, 1485–1486.)

Plaintiffs allege that the City closed the restaurant on October 11, 2024 and “red tagged” the building, after having conducted air quality testing. The City’s contractor confirmed the presence of “moisture, mold, and bacteria.” (FAC, ¶¶ 57-58, 60.) Given the facts alleged regarding the City’s closure of the premises, the plaintiffs have pled a dangerous condition of public property. The FAC likewise establishes that the City had constructive notice of the mold issue “through years of staff complaints, prior tenant and guest reports of ‘water issues and sewer smells from the beginning,’ the 2021-2022 flooding and floor replacement, the 2023 kitchenfloor intrusion, the visible mold inside the banquet wall in 2024, and Plaintiffs’ own September 2024 mold testing — all of which were communicated to the City.” (Opp. at p. 8, citing FAC, ¶¶

June 3, 2026 Law and Motion Calendar Judge Nicole S. Healy Department 28 ________________________________________________________________________ 38-43, 54, 56, 99.) Plaintiffs further allege that City employees were aware of a damaged sewer lateral on the property which contributed to the dangerous condition. (FAC, ¶¶ 82, 94, 96.) Plaintiffs further allege that the City had sufficient time to remediate the dangerous condition, but did not. (Id., ¶ 99.)

Plaintiffs have also pled injury caused by the dangerous condition. They allege that they lost revenues and profits, and incurred expenses due to the closure which was occasioned by the City’s failure to remedy the conditions on the property. They further allege that Petrakis suffered “significant physical harm from breathing mold and other airborne toxins that she was exposed to repeatedly while working at Par3.” (FAC, ¶¶ 61-62, 108.)

On demurrer, plaintiffs’ allegations are sufficient to allege the existence of a dangerous condition of public property, and that “the injury was proximately caused by the dangerous condition,” or that “the dangerous condition created a reasonably foreseeable risk of the kind of injury which was incurred.” (Thimon, 44 Cal.App.5th 745; Cerna, 161 Cal.App.4th 1340.)

Accordingly, defendants’ demurrer is OVERRULED as to plaintiff’s dangerous condition of public property claim.

3. The Demurrer to the Fourth Cause of Action for Negligence is Sustained with Leave to Amend

“[S]ection 835 sets out the exclusive conditions under which a public entity is liable for injuries caused by a dangerous condition of public property.” (Brown v. Poway Unified School Dist. (1993) 4 Cal.4th 820, 829.)

Defendants argue that plaintiff’s negligence claim, which seeks to impose liability for injuries caused by a dangerous condition of public property, is barred as matter of law under Brown. Plaintiffs contend that they “allege separate negligent conduct independent of the dangerous condition itself: the failure to warn Ms. Petrakis of known hazards before and during the lease (FAC ¶ 118); the failure to investigate after repeated written complaints (FAC ¶¶ 10, 41, 53); the negligent design and construction of the building (FAC ¶¶ 114, 116); and the mishandling of the October 11, 2024 red-tag closure without notice to Plaintiffs (FAC ¶¶ 7-8, 58).” (Opp., at p. 12.)

The examples of conduct cited by plaintiff are not independent of the dangerous condition. In particular, the allegation that the City failed to investigate reported issues despite being aware of repeated complaints and past issues is central to plaintiff’s dangerous condition claim.

Accordingly, defendants’ demurrer is SUSTAINED as to plaintiffs’ negligence claim, with leave to amend.

4. Government Claims

The purpose of requiring a pre-litigation filing of a claim against a public entity is to provide the entity with sufficient information to enable it to adequately investigate claims and to

June 3, 2026 Law and Motion Calendar Judge Nicole S. Healy Department 28 ________________________________________________________________________ settle them, if appropriate, without the expense of litigation. (Stockett v. Association of Cal. Water Agencies Joint Powers Ins. Authority (2004) 34 Cal.4th 441, 446; Gov. Code, § 945.4.) A claim need only fairly describe what the entity is alleged to have done. (Ibid.) Because the purpose is not to eliminate meritorious actions, the claims statute “‘should not be applied to snare the unwary where its purpose has been satisfied.’” (Ibid., citation omitted.)

Only a “‘complete shift in allegations, usually involving an effort to premise civil liability on acts or omissions committed at different times or by different persons than those described in the claim,” will generally bar a later complaint. (Id., at p. 447, citation omitted.) Where the complaint “‘merely elaborates or adds further details to a claim, but is predicated on the same fundamental actions or failures to act,’” the complaint fairly reflects the claim. (Ibid., citation omitted.)

Here, plaintiffs’ initial claim, filed on December 4, 2024, states:

The City of San Mateo through their staff and administration have committed fraud and misrepresentation of defects in the building at 1700 Coyote Point. The City of San Mateo through their staff and administration have breached the terms of the lease, retaliated against Alicia Petrakis for asserting her rights, and exposed her and her staff to harmful mold.

***

Defects in the building at 1700 Coyote Point have caused flooding, water damage, and mold. Additional damages have been incurred through fraud, misrepresentation, breach of contract (lease), communications harming the Par 3 goodwill and reputation, and physical harm related to the mold exposure. The harm has caused significant emotional distress and pain and suffering.

(Defendant’s RJN, exh. 1.)

Plaintiff’s amended claim, filed on February 17, 2025, states:

The City of San Mateo, and its staff and administration, committed fraud and misrepresented defects in the floor of the bar/restaurant at 1700 Coyote Point, owned by the city. The City breached the terms of a lease with Par3SM, LLC, Ms. Petrakis being the managing member.

***

Defects in the building at 1700 Coyote Point caused flooding, water damage, and mold. Claimant incurred additional damages through City’s fraud, misrepresentation, breach of contract (lease), city’s public communications harming Claimant’s goodwill and reputation, and physical harm related to mold exposure. The harm has caused Claimant significant emotional distress and pain and suffering. Claimant claims lost income due to the City’s decision to “red tag” the building, costs associated with maintaining the lease, special damages, and

June 3, 2026 Law and Motion Calendar Judge Nicole S. Healy Department 28 ________________________________________________________________________ general damages. The building remains closed, and claimant cannot operate the Par3 restaurant.

(Defendant’s RJN, exh. 2.)

Defendants argue that plaintiffs’ negligence and dangerous condition of public property claims were not sufficiently described in their pre-litigation claims.

While not identical to the allegations in the FAC, plaintiffs’ prelitigation claims placed the City on notice of the alleged physical injury and financial losses based on the allegedly dangerous conditions. The negligence and dangerous condition claims involve the same fundamental actions or failures to act with regard to alleged water intrusion and defects on the property.

Accordingly, defendants’ demurrer is OVERRULED as to plaintiffs’ pre-litigation claim serving as a basis for demurrer.

If the tentative ruling is uncontested, it shall become the order of the court. Thereafter, plaintiffs’ counsel shall prepare a written order consistent with the court’s ruling for the court’s signature, pursuant to California Rules of Court, Rule 3.1312 and Local Rule 3.403(b)(iv), and provide written notice of the ruling to all parties who have appeared in this action. The order should be e-filed only, do not email or mail a hard copy to the court.

June 3, 2026 Law and Motion Calendar Judge Nicole S. Healy Department 28 ________________________________________________________________________

02:00 PM LINE 8 25-CIV-03773 ALICIA PETRAKIS, ET AL VS. ALEX KHOJIKIAN, ET AL

ALICIA PETRAKIS JOSEPH W. COTCHETT ALEX KHOJIKIAN W. ETHAN MCCALLUM

Defendants’ Motion to Strike Portions of Plaintiff’s Unverified first Amended Complaint

TENTATIVE RULING:

To the extent defendants City of San Mateo, Alex Khojikian, and Joanne Magrini's Motion to Strike portions of plaintiffs’ First Amended Complaint is not moot based on the concurrent tentative ruling regarding defendants’ demurrer, it is DENIED.

If the tentative ruling is uncontested, it shall become the order of the court. Thereafter, plaintiffs’ counsel shall prepare a written order consistent with the court’s ruling for the court’s signature, pursuant to California Rules of Court, Rule 3.1312 and Local Rule 3.403(b)(iv), and provide written notice of the ruling to all parties who have appeared in this action. The order should be e-filed only, do not email or mail a hard copy to the court.