Logan & Logan Construction, Inc. v. RRCZ Investments LLC

The order to show cause is discharged.

Moving party shall give notice of this ruling.

53. Logan & Defendants Stacie Andrella and Kathleen Hollins’ demurrer to Logan Plaintiff Logan & Logan Construction, Inc.’s First Amended Construction Complaint (“FAC”) is SUSTAINED as to the Fourth Cause of, Inc. v. Action for Fraud – False Promise as to Defendant Kathleen RRCZ Hollins only. The demurrer is otherwise OVERRULED. Investments Within 10 days of this ruling, Plaintiff may file a Second LLC Amended Complaint to address the deficiency in the Fourth Cause of Action, as it pertains to Defendant Hollins. If a

# Case Name Tentative

2024- Second Amended Complaint is not filed within 10 days of this 01430488 ruling, Defendants shall file an answer to the First Amended Complaint within 30 days of this ruling.

Plaintiff’s Request for Judicial Notice is DENIED. The Court’s prior rulings are not relevant to the issues raised in Defendants’ demurrer and motion to strike.

While Plaintiff’s Opposition is untimely, Defendants have addressed it on the merits. The Court will exercise its discretion and consider the late-filed Opposition. All counsel are admonished that there is no certainty that the Court will exercise its discretion in a similar manner in the future should parties fail to comply with deadlines.

General Standards Related to Demurrers

In ruling on a demurrer, a court must accept as true all allegations of fact contained in the complaint. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) A demurrer challenges only the legal sufficiency of the affected pleading, not the truth of the factual allegations in the pleading or the pleader’s ability to prove those allegations. (Cundiff v. GTE Cal., Inc. (2002) 101 Cal.App.4th 1395, 1404-05.)

Questions of fact cannot be decided on demurrer. (Berryman v. Merit Prop. Mgmt., Inc. (2007) 152 Cal.App.4th 1544, 1556.) Because a demurrer tests only the sufficiency of the complaint, a court will not consider facts that have not been alleged in the complaint unless they may be reasonably inferred from the matters alleged or are proper subjects of judicial notice. (Hall v. Great W. Bank (1991) 231 Cal.App.3d 713, 718 fn.7.)

Defendants’ Special Demurrer for Uncertainty

Demurrers for uncertainty are disfavored. The Court will only sustain a demurrer for uncertainty if it is so poorly drafted that a defendant cannot reasonably respond. Khoury v. Maly’s of California Inc. (1993) 14 Cal.App.4th 612, 616.

Any claimed uncertainties created by the complaint must be specified in the demurrer and specify where such uncertainty appears by page and line numbers of the complaint. Fenton v. Groveland Comm. Services Dist. (1982) 135 Cal.App.3d 797, 765. Demurring Defendants fail to specify by page and line number which contradicting allegations render the complaint so confusing as to render it incapable of being answered.

Defendants’ demurrer is premised on the assertion that the FAC relies upon insufficient allegations of alter ego liability.

# Case Name Tentative

This alleged defect does not preclude a meaningful intelligent response to the FAC. Any potential challenges can be clarified through discovery.

The special demurrer is OVERRULED.

Alter Ego Allegations

Defendants’ demurrer is primarily premised on the contention that the individual defendants are not properly named as Defendants because the allegations of the First Amended Complaint only identify conduct of Defendant RRCZ. Demurring Defendants reason that the alter ego allegations of the FAC are legal conclusions without factual support.

The FAC contains sufficiently pleaded allegations of alter ego liability for purposes of a challenge to the pleadings. (See, e.g., Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 235-236 [“Defendants argue that Rutherford failed to allege specific facts to support an alter ego theory, but Rutherford was required to allege only ‘ultimate rather than evidentiary facts.’”].) Specifically, the FAC alleges that Hollins and Andrella have abused the corporate form by using RRCZ’s assets as their own, co-mingling funds, and insufficiently capitalizing RRCZ to the point it cannot possibly pay the debts it incurs. (FAC ¶27.)

Plaintiff further alleges that if RRCZ’s separate existence were to be recognized, it would sanction fraud or promote injustice. (FAC ¶28.) The FAC sufficiently alleges the ultimate facts sufficient to plead alter ego liability and the demurrer is OVERRULED to the extent is relies upon contentions that alter ego liability is insufficiently pleaded.

Below is an analysis of the demurrer to the individual causes of action.

Breach of Contract

The elements of a claim for breach of contract are (1) the existence of a contract; (2) the plaintiff’s performance or excuse from performance of the contract; (3) the defendant’s breach; and (4) resulting damages to the plaintiff. (See Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)

Demurring Defendants argue that the FAC fails to allege facts showing that either of the individual defendants were parties to any alleged contract. As discussed above, the FAC sufficiently alleges that both Hollins and Andrella were alter egos of RRCZ, and as such, the FAC sufficiently alleges a the elements of a cause of action for breach of contract.

# Case Name Tentative

The demurrer to this cause of action is OVERRULED.

Common Count

The elements of a claim for common count are “(1) the statement of indebtedness in a certain sum, (2) the consideration, i.e., goods sold, work done, etc., and (3) nonpayment.” (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460.)

Demurring Defendants argue that this claim fails because there are no allegations that Hollins and Andrella made any request to Plaintiff for services in their individual capacities. As set forth above, the alter ego allegations are sufficient and dispose of this line of argument.

Demurring Defendants also repeat arguments made in support of Defendant RRCZ’s demurrer to this cause of action which have already been considered by the Court and overruled.

The demurrer to this cause of action is OVERRULED.

Account Stated

“The essential elements of an account stated are: (1) previous transactions between the parties establishing the relationship of debtor and creditor; (2) an agreement between the parties, express or implied, on the amount due from the debtor to the creditor; (3) a promise by the debtor, express or implied, to pay the amount due.” (Zinn v. Fred R. Bright Co. (1969) 271 Cal. App. 2d 597, 600.) “When a statement is rendered to a debtor and no reply is made in a reasonable time, the law implies an agreement that the account is correct as rendered.” (Maggio, Inc. v. Neal (1987) 196 Cal. App. 3d 745, 753.)

Demurring Defendants argue that this claim fails because no allegations are made against them in their capacity as individuals. Since the court has found the alter ego allegations to be sufficient for purposes of a pleadings challenge, this argument fails.

Demurring Defendants also repeat arguments made in support of Defendant RRCZ’s demurrer to this cause of action which have already been considered by the Court and overruled.

The demurrer to this cause of action is OVERRULED.

Promissory Fraud

To plead a legally sufficient cause of action for fraud, the pleader must allege (1) a misrepresentation; (2) the defendant’s knowledge of the falsity of the misrepresentation;

# Case Name Tentative

(3) intent to induce plaintiff’s reliance on the misrepresentation; (4) actual reliance upon the misrepresentation; (5) causation; and (6) resulting damages. (Robinson Helicopter Co., Inc. v. Dana Corp. (2005) 35 Cal.4th 979, 990.)

Additionally, fraud must be pleaded specifically to withstand a general demurrer. Thus, to state a legally sufficient cause of action for fraud, a plaintiff must plead specific facts that “show how, when, where, to whom, and by what means the representations were tendered.” (Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, 1614.) When alleging fraud against a corporate defendant, the level of specificity is even higher. Namely, a plaintiff must “allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

“Promissory fraud is a subspecies of the action for fraud and deceit. A promise to do something necessarily implies the intention to perform; hence, where a promise is made without such intention, there is an implied misrepresentation of fact that may be actionable fraud.” (Lazar, Supra. 12 Cal.4th at 638.) A cause of action for promissory fraud must be pleaded with specificity. (Beckwith v. Dahl (2012) 205 Cal.App.4th 1039 [applying heightened specificity requirement for pleading false promise].)

Demurring Defendants argue that this cause of action fails because it is not pleaded with sufficient particularity as to either of the individual Defendants. The Court has already found that this cause of action is pleaded with sufficient particularity as it pertains to Defendant RRCZ. And the Court has also found the alter ego allegations in the FAC sufficient. Therefore, the demurrer to this cause of action asserted by these Defendants is OVERRULED to the extent it is premised on an alter ego theory.

The Court also finds that this cause of action is sufficiently pleaded as to Defendant Andrella based on Andrella’s individual conduct. The FAC alleges that Andrella made a promise to perform on the deferred payment arrangement. The FAC alleges that Andrella made this promise orally to Greg Logan, one of Plaintiff’s principals. The FAC alleges that Andrella made this promise on 7/1/21. (FAC ¶47.) The FAC alleges that Andrella had no intention of performing on this promise at the time is was made. (FAC ¶48.) This is sufficient specificity to state a cause of action for promissory fraud

# Case Name Tentative

against Andrella based on a theory of direct liability. The demurrer is OVERRULED on these grounds.

However, absent from the FAC are any alleged facts Hollins undertook personally. Further, Hollins is not alleged to have any knowledge of this promise or any involvement in it. Accordingly, the demurrer is SUSTAINED with leave to amend to the extent Plaintiff seeks to assert a claim against Hollins for direct liability concerning the cause of action for promissory fraud.

Motion to Strike

Defendants Stacie Andrella and Kathleen Hollins’ Motion to Strike Portions of the First Amended Complaint is GRANTED in part. (Code Civ. Proc. §436, subd. (a).) The Motion is GRANTED as to FAC ¶51 because Plaintiffs improperly allege an amount of punitive damages sought. Pursuant to Civ. Code §3295, subd. (e) “[n]o claim for exemplary damages shall state an amount or amounts.” Accordingly, the language “in the amount of at least $1,000,000.00.” is hereby STRICKEN from FAC ¶51.

The Motion is DENIED as to the prayer for punitive damages because Plaintiff has alleged a sufficient cause of action for fraud, which is sufficient to support a prayer for punitive damages.

The motion is DENIED as to FAC ¶¶ 25-28. A demurrer, rather than a motion to strike, is the correct vehicle for challenging these allegations. And Defendants did demur to these paragraphs, which the Court overruled.

The case management conference is continued to November 2, 2026 at 9:00 a.m. in Department C28.

Plaintiff shall provide notice of this ruling.

54. Jones v. Plaintiff Desiree Jones’ “Motion to Set Aside Default and Myers Vacate Judgment,” seeking to set aside this court’s 5-5-26 order on a special motion to strike by defendant Susanne 2026- Myre, erroneously sued as Susanne Myers, is DENIED. 01542899 Moving party contends the special motion to strike was improperly served, and requests the 5-5-26 order thereon be vacated, citing Code Civ. Proc., §§ 473, subd. (d), and 473.5. Code Civ. Proc., § 473.5 is not applicable, as it authorizes relief from “default or default judgment and for leave to defend the action” where “service of a summons has not resulted in actual notice to a party in time to defend the action and a default or default judgment has been entered against