FFC Mortgage Corp. v. Consumer Tax Advocate, LLC.

Intentional Misrepresentation – 2nd cause of action as to CTA and Holdridge

The elements of a fraud cause of action 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. [Citation.]” (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 173, internal quotation marks omitted.)

“Fraud allegations ‘involve a serious attack on character’ and therefore are pleaded with specificity. [Citation.] General and conclusory allegations are insufficient. [Citation.] The particularity requirement demands that a plaintiff plead facts which show how, when, where, to whom, and by what means the representations were tendered. [Citation.]” (Cansino v. Bank of Am. (2014) 224 Cal.App.4th 1462, 1469.)

In the SAC at paras. 37 & 38, the plaintiff identifies two misrepresentations upon which the fraud cause of action is based: “37. From about September 2022 through about the end of 2023, CTA through Holdridge represented to O’Bryan that CTA would diligently seek the approval of the assignment of FFC’s Sublease to CTA.

38. Throughout the time CTA maintained its business operation at the Premises, Holdridge assured O’Bryan that CTA would meet its obligations under the Affiliate Agreement even if CTA might move its operations to a different location.” Plaintiff further alleges at paras. 21 and 25 that Holdridge assured plaintiff CTA would cover the rent through the end of the term. The Court finds the misrepresentations sufficiently pled for purposes of demurrer.

As to the reliance element, plaintiff alleges it did not undertake to find another tenant based on the representations by the defendants. (See SAC ¶43 – plaintiff “justifiably relied” by “not undertaking attempts to look for another tenant for the Premises earlier as Holdridge indicated that CTA would honor the rent payment obligation until the end of the Term.”) The Court finds this allegation of reliance sufficient at this stage.

As to damages, Plaintiff alleges it “suffered damages in excess of the minimum jurisdictional limit of this Court, totaling at least $65,000 in compensatory damages alone—the sum due for the rent unpaid under the Affiliate Agreement.” (SAC ¶45) The foregoing is a sufficient allegation of damages to get past demurrer.

Accordingly, the demurrer by CTA and Holdridge is OVERRULED as to the 2nd cause of action for intentional misrepresentation.

Intentional Misrepresentation – 2nd cause of action as to Robert Mullen

In the Court’s 11/10/25 Minute Order, the demurrer by Mullen was sustained because there were no allegations of a fraudulent statement by Mullen. The SAC again fails to assert a specific misrepresentation made by Mullen or the details relating thereto.

In the opposition, FFC argues that paragraph 13, in the section of the SAC titled “The Affiliate Agreement,” alleges the misrepresentation by Mullen. However, this paragraph does not identify a statement by Mullen.

Accordingly, the demurrer by Mullen to the 2nd cause of action for Intentional Misrepresentation is SUSTAINED.

Because this is the second time the Court has considered this matter, and no misrepresentation has been identified, and because plaintiff has not identified any facts in the opposition which might be added to a future pleading, the demurrer as to Mullen is SUSTAINED WITHOUT LEAVE TO AMEND.

Negligent Misrepresentation – 3rd cause of action as to CTA and Holdridge

To state a Cause of Action for Negligent Misrepresentation, plaintiffs must plead the following elements: “(1) a false statement of a material fact that the defendant honestly believes to be true, but made without reasonable grounds for such belief, (2) made with the intent to induce reliance, (3) reasonable reliance on the statement, and (4) damages, Defendants had no reasonable grounds for believing the representation was true when they made it.” (Century Sur. Co. v. Crosby Ins., Inc. (2004) 124 Cal.App.4th 116, 129.)

For the same reasons discussed above, the Court finds the cause of action for Negligent Misrepresentation sufficiently pled.

Accordingly, the demurrer to the 3rd cause of action is OVERRULED.

Defendants Consumer Tax Advocate LLC and Garrett Holdridge are ORDERED to file their answer to the SAC within 10 days.

Case Management Conference is CONTINUED to October 9, 2026, at 9:30 a.m.

Mullen is ordered to give notice. 9 Daneshmand The motion to compel arbitration filed by defendant Ashley Bolduc v. Tareen (Bolduc) is DENIED.

As an initial matter, the Court notes the opposition brief filed by plaintiff Sharone Daneshmand (Plaintiff) is 19 pages and thus exceeds the page limit requirements set forth in CRC rule 3.1113(d). Plaintiff is admonished to abide by the page limit rules for all future filings.

A party seeking to compel arbitration pursuant to Code of Civil Procedure section 1281.2 “has the burden of proving the existence of a valid arbitration clause and the dispute is covered by the agreement.” (Larian v. Larian (2004) 123 Cal.App.4th 751, 760.)

Bolduc seeks to compel arbitration of the sole cause of action for aiding and abetting breach of fiduciary duty asserted against her by Plaintiff based on the arbitration clause contained in the Engagement Agreement between Bolduc’s law firm, Cummins & White, LLP, on the one hand, and defendants Ammar Tareen (Tareen) and Shield Home Loans, Inc. (Shield), on the other. (See Bolduc Decl., ¶ 2 and Ex. 1.)

As Bolduc acknowledges, Plaintiff is a non-signatory to the Engagement Agreement. Bolduc argues Plaintiff should nonetheless be compelled to arbitrate his claims against Bolduc pursuant to the arbitration clause in the Engagement Agreement based on the doctrines of equitable estoppel and third-party beneficiary status.

As an initial matter, it is not clearly shown that the controversy at issue in this lawsuit falls within the scope of the arbitration clause. The arbitration clause states that “any dispute concerning the rights of any of the parties hereto” will be decided by arbitration. (Engagement Agreement ¶ 9.A.) This action concerns the rights of