Michelle Ahn, D.D.S., et al. v. Aram Arakelyan, D.D.S., et al.

including all warranty trend reports for this period." The requests seek documents that may lead to the discovery of admissible evidence. The buyback process under the warranty and whether Defendant has a policy to reduce costs related to repurchases and replacements are issues at the heart of this litigation. Defendant is ordered to serve further responses to Requests 61 and 62 within 20 days of this date. Plaintiff is ordered to give notice of this ruling.

LOS ANGELES SUPERIOR COURT - SOUTHWEST DISTRICT Honorable Amy N. Carter Department M Thursday, September 3, 2026 Calendar No. PROCEEDINGS Michelle Ahn, D.D.S., et al. v. Aram Arakelyan, D.D.S., et al.

1. First Choice Practice Sales, Inc., et al.'s Demurrer to First Amended Complaint 2. First Choice Practice Sales, Inc., et al.'s Motion to Strike Portions of First Amended Complaint 3. Melkon Avetisyan, D.D.S.'s Demurrer to First Amended Complaint 4. Aram Arakelyan, D.D.S.'s Motion to Set Aside Default

First Choice Practice Sales, Inc., et al.'s Demurrer to First Amended Complaint is overruled, in part, sustained without leave to amend, in part, and sustained with 20 days leave to amend, in part. First Choice Practice Sales, Inc., et al.'s Motion to Strike Portions of First Amended Complaint is denied, in part, granted with 20 days leave to amend, in part, and moot, in part. Melkon Avetisyan, D.D.S.'s Demurrer to First Amended Complaint is overruled, in part, sustained without leave to amend, in part, and sustained with 20 days leave to amend, in part. Aram Arakelyan, D.D.S., et al.'s Motion to Set Aside Default is denied without prejudice.

Background

Plaintiffs' Complaint was filed on May 19, 2025. Plaintiffs filed the First Amended Complaint on March 12, 2026. Plaintiffs allege the following facts. Plaintiff purchased a dental practice and building from Defendants Aram Arakelyan, DDS, et al. First Choice Practice Sales, Inc. ("First Choice") was the dual broker/agent. Defendant Melkon Avetisyan, D.D.S. was an employee of the dental firm. Plaintiff discovered that Defendants submitted fraudulent billings to Medi-Cal which has now placed Plaintiffs' business in jeopardy, as well as potentially exposing Plaintiffs to criminal proceedings. Plaintiffs allege 22 separate causes of action.

Meet and Confer

Defendants First Choice, et al. set forth meet and confer declarations in sufficient compliance with CCP Sec. 430.41 and CCP Sec. 435.5. (Decl. Saul Lopez). Defendant Melkon Avetisyan, D.D.S. set forth a meet and confer declaration in sufficient compliance with CCP 430.431. (Decl., Sean F. Kneafsey).

Demurrer

A demurrer tests the sufficiency of a complaint as a matter of law and raises only questions of law. (Schmidt v. Foundation Health (1995) 35 Cal.App.4th 1702, 1706.) In testing the sufficiency of the complaint, the court must assume the truth of (1) the properly pleaded factual allegations; (2) facts that can be reasonably inferred from those expressly pleaded; and (3) judicially noticed matters. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The Court may not consider contentions, deductions, or conclusions of fact or law. (Moore v.

Conliffe (1994) 7 Cal.App.4th 634, 638.) Because a demurrer tests the legal sufficiency of a complaint, the plaintiff must show that the complaint alleges facts sufficient to establish every element of each cause of action. (Rakestraw v. California Physicians Service (2000) 81 Cal.App.4th 39, 43.) Where the complaint fails to state facts sufficient to constitute a cause of action, courts should sustain the demurrer. (C.C.P., Sec. 430.10(e); Zelig v. County of Los Angeles (2002) 27 Cal.App.4th 1112, 1126.)

Sufficient facts are the essential facts of the case "with reasonable precision and with particularity sufficiently specific to acquaint the defendant with the nature, source, and extent of his cause of action." (Gressley v. Williams (1961) 193 Cal.App.2d 636, 643-644.) "Whether the plaintiff will be able to prove the pleaded facts is irrelevant to ruling upon the demurrer." (Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 609-610.) Under Code Civil Procedure Sec. 430.10(f), a demurrer may also be sustained if a complaint is "uncertain."

Uncertainty exists where a complaint's factual allegations are so confusing they do not sufficiently apprise a defendant of the issues it is being asked to meet. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.)

Defendants' First Choice, et al. demur to the fifth through eighth, tenth, nineteenth, and twentieth causes of action for failure to state sufficient facts to state a cause of action and uncertainty.

Fifth Cause of Action for Intentional Misrepresentation

Sixth Cause of Action for Negligent Misrepresentation

Seventh Cause of Action for Fraudulent Concealment

Defendants' demurrer to the fifth through seventh causes of action is overruled. Plaintiffs state sufficient facts to state the causes of action and the causes of action are not uncertain. "A complaint for fraud must allege the following elements: (1) a knowingly false representation by the defendant; (2) an intent to deceive or induce reliance; (3) justifiable reliance by the plaintiff; and (4) resulting damages." Service by Medallion, Inc. v. Clorox Co. (1996) 44 Cal.App.4th 1807, 1816. "[T]he elements of an action for fraud and deceit based on a concealment are: (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he has known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage."

Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248. The circumstances that could support a duty to disclose are as follows: "(1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations but also suppresses some material facts." Heliotis v. Schuman (1986) 181 Cal.App.3d 646, 651. "Every element of the cause of action for fraud must be alleged in the proper manner and the facts constituting the fraud must be alleged with sufficient specificity to allow defendant to understand fully the nature of the charge made."

Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157. Plaintiff must state facts which "show how, when, where, to whom, and by what means the representations were tendered." Lazar v. Superior Court (1996) 12 Cal.4th 631, 645. "For a claim of negligent misrepresentation, [a] plaintiff must prove the following in order to recover[:] [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."

Goonewardene v. ADP, LLC (2016) 5 Cal.App.5th 154, 175. Negligent misrepresentation is a species of fraud and requires specificity in pleading. See Small v. Fritz Companies, Inc. (2003) 30 Cal.4 th 167, 184-85.

Plaintiffs state the requisite specific facts to state the causes of action for Intentional Misrepresentation, Negligent Misrepresentation, and Fraudulent Concealment, including specific facts as to who made the misrepresentation, to whom it was made, when it was made, where it was made, and by what means it was made. (FAC, P.P. 29-36). Plaintiffs allege specific facts of the substance of the false representations, intent to deceive or intent to induce reliance, justifiable reliance, and resulting damages. (FAC, P.P. 114-138). Plaintiffs also allege specific facts regarding Defendants' duty to disclose material information as the dual broker and agent for Plaintiffs and Defendants. (FAC, P.P. 27, 29). Plaintiffs allege specific facts of concealment of material facts, intent to conceal, Plaintiffs' unawareness, and resulting damages. (FAC, P.P. 139-152).

Defendants' main arguments essentially consist of contending that Defendants did not make any false representations or conceal material facts because the information presented to Plaintiffs was correct. Defendants argue that the annual revenue information provided to Plaintiffs was correct and that Defendants had no knowledge of any fraudulent billing practices. These are factual issues that are not appropriate for adjudication with a demurrer. For purposes of a demurrer, the allegations of the First Amended Complaint must be deemed true.

Defendants will have the opportunity to present evidence at the appropriate time to attempt to convince a trier of fact that all representations that were made by them were true, and that the revenue calculations that Plaintiffs rely upon to base their conclusion that Defendants made false representations or concealed material facts are incorrect. Defendants make misleading arguments in their demurrer arguing that Plaintiffs alleged that they ultimately obtained the correct revenue information. (FAC, P. 35).

However, Plaintiffs further alleged that this information did not provide a breakdown to determine whether this revenue was generated from fraudulent billings. (Id.) Defendants' demurrer to the fifth through seventh causes of action is overruled.

Eighth Cause of Action for Constructive Fraud

Defendants' demurrer to the eighth cause of action is overruled. Plaintiffs state sufficient facts to state a cause of action and the cause of action is not uncertain. "Constructive fraud is a unique species of fraud applicable only to a fiduciary or confidential relationship. Constructive fraud arises on a breach of duty by one in a confidential or fiduciary relationship to another which induces justifiable reliance by the latter to his prejudice. [The] elements of constructive fraud cause of action are (1) a fiduciary or confidential relationship; (2) nondisclosure (breach of fiduciary duty); (3) intent to deceive, and (4) reliance and resulting injury (causation).

In its generic sense, constructive fraud comprises all acts, omissions and concealments involving a breach of legal or equitable duty, trust, or confidence, and resulting in damages to another. Constructive fraud exists in cases in which conduct, although not actually fraudulent, ought to be so treated--that is, in which such conduct is a constructive or quasi fraud, having all the actual consequences and all the legal effects of actual fraud." Prakashpalan v. Engstrom, Lipscomb & Lack (2014) 223 Cal.App.4th 1105, 1131 (internal citations and quotations omitted.)

The circumstances that could support a duty to disclose are as follows: "(1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations but also suppresses some material facts." Heliotis v. Schuman (1986) 181 Cal.App.3d 646, 651. Plaintiffs allege facts to demonstrate the existence of a fiduciary relationship between the parties based on Defendants' status as dual broker/agent.

Primarily, Defendants argue that there are no facts of breach of that duty because Defendants did not conceal material information from Plaintiffs. This argument, similar to the arguments made to the demurrer to the fifth through seventh causes of action, relies on facts outside the scope of the pleadings and Defendants' own interpretation of the events that occurred. Defendants will have the opportunity to present their defenses and submit evidence to support their defenses at the appropriate time.

Thus, the demurrer to the eighth cause of action is overruled.

Tenth Cause of Action for Conspiracy

Defendants' demurrer to the tenth cause of action is sustained without leave to amend, in part, and with 20 days leave to amend. Plaintiffs fail to state sufficient facts to state a cause of action. The scope of leave to amend is only to include allegations of conspiracy in the underlying causes of action, if applicable, and not a separate cause of action for Conspiracy. Civil Conspiracy is not an independent cause of action. "Civil conspiracy is not an independent tort. Instead, it is a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration."

City of Industry v. City of Fillmore (2011) 198 Cal.App.4th 191, 211-212. "Liability based on an aiding and abetting or conspiracy theory is also "derivative," i.e., liability is imposed on one person for the direct acts of another. Conspiracy is not a cause of action, but a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration. [Citation.] By participation in a civil conspiracy, a coconspirator effectively adopts as his or her own the torts of other coconspirators within the ambit of the conspiracy."

Richard B. LeVine, Inc. v. Higashi (2005) 131 Cal.App.4th 566, 579 (internal quotations omitted; emphasis in original). "The elements of a civil conspiracy are (1) the formation of a group of two or more persons who agreed to a common plan or design to commit a tortious act; (2) a wrongful act committed pursuant to the agreement; and (3) resulting damages." City of Industry v. City of Fillmore (2011) 198 Cal.App.4th 191, 212. Sufficient facts were alleged to support these elements. (FAC, P.P. 175-188).

The demurrer to the tenth cause of action is sustained without leave to amend, in part, and with 20 days leave to amend, in part. The scope of leave to amend is only to include allegations of conspiracy in the underlying causes of action, if applicable, and not a separate cause of action for Conspiracy.

Nineteenth Cause of Action for Violation of Bus. & Prof. Code 17200

Twentieth Cause of Action for Violation of Bus. & Prof. Code 17500

Defendants' demurrer to the nineteenth cause of action is overruled. Plaintiffs state sufficient facts to state a cause of action. "California Business and Professions Code Sections 17000, et seq., and 17200, et seq., states [sic] that unfair competition shall mean and include unlawful, unfair or fraudulent business practices." Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 618-19. "By proscribing 'any unlawful' business act or practice, the UCL "borrows" rules set out in other laws and makes violations of those rules independently actionable. [Citation.]

However, a practice may violate the UCL even if it is not prohibited by another statute." Los Angeles Memorial Coliseum Com. v. Insomniac, Inc. (2015) 233 Cal.App.4th 803, 835. "The unfair competition law is independent of the Unfair Practices Act and other laws. Its remedies are "cumulative ... to the remedies or penalties available under all other laws of this state" (Sec. 17205), but its sanctions are less severe than those of the Unfair Practices Act. Prevailing plaintiffs are generally limited to injunctive relief and restitution. (Sec. 17203; see ABC Internat.

Traders, Inc. v. Matsushita Electric Corp. (1997) 14 Cal.4th 1247, 1268 [61 Cal.Rptr.2d 112, 931 P.2d 290].) Plaintiffs may not receive damages, much less treble damages, or attorney fees." Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 179. "Restitution under section 17203 is confined to restoration of any interest in "money or property, real or personal, which may have been acquired by means of such unfair competition." (Italics added.) A restitution order against a defendant thus requires both that money or property have been lost by a plaintiff, on the one hand, and that it have been acquired by a defendant, on the other.

But the economic injury that an unfair business practice occasions may often involve a loss by the plaintiff without any corresponding gain by the defendant, such as, for example, a diminishment in the value of some asset a plaintiff possesses. Such injuries satisfy the plain meaning of section 17204's "lost money or property" requirement, qualify as injury in fact, and would permit a plaintiff to seek an injunction against the offending business practice even in the absence of any basis for restitution. [P.]

This leads to a larger point: To make standing under section 17204 dependent on eligibility for restitution under section 17203 would turn the remedial scheme of the UCL on its head. Injunctions are "the primary form of relief available under the UCL to protect consumers from unfair business practices," while restitution is a type of "ancillary relief." Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 336-337 (internal citations omitted).

Bus. & Prof. Code Sec. 17500 states, in relevant part: "It is unlawful for any person . . . with intent directly or indirectly to dispose of real or personal property or to perform services . . . to make or disseminate or cause to be made or disseminated before the public in this state, or to make or disseminate or cause to be made or disseminated from this state before the public in any state, in any newspaper or other publication, or any advertising device, or by public outcry or proclamation . . . any statement, which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading, or for any person . . . to so make or disseminate or cause to be made or disseminated any such statement as part of a plan or scheme with the intent not to sell that personal property or those services . . . so advertised at the price stated therein, or as so advertised."

Defendants essentially argue that the underlying fraud based causes of action fail because no misrepresentations or concealment was made. However, based on the causes of action to which no demurrer was addressed as well as the fifth through eighth causes of action to which the demurrer was overruled, Plaintiffs alleged sufficient facts of an unlawful, unfair, or fraudulent business practice on the part of Defendants. In addition, Plaintiff has alleged sufficient facts stating injury in fact through payments made to Defendants. Also, as noted above, factual issues exist as to whether Defendants did or did not make false representations or conceal material information. Thus, the demurrer to the nineteenth and twentieth cause of action is overruled.

Defendant Melkon Avetisyan, D.D.S. demurs to the tenth, thirteenth through fifteenth, nineteenth, and twenty-first causes of action for failure to state sufficient facts to state a cause of action and uncertainty.

Tenth Cause of Action for Conspiracy

Defendant's demurrer to the tenth cause of action is sustained without leave to amend, in part, and with 20 days leave to amend. Plaintiffs fail to state sufficient facts to state a cause of action. The scope of leave to amend is only to include allegations of conspiracy in the underlying causes of action, if applicable, and not a separate cause of action for Conspiracy. Civil Conspiracy is not an independent cause of action. "Civil conspiracy is not an independent tort. Instead, it is a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration."

City of Industry v. City of Fillmore (2011) 198 Cal.App.4th 191, 211-212. "Liability based on an aiding and abetting or conspiracy theory is also "derivative," i.e., liability is imposed on one person for the direct acts of another. Conspiracy is not a cause of action, but a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration. [Citation.] By participation in a civil conspiracy, a coconspirator effectively adopts as his or her own the torts of other coconspirators within the ambit of the conspiracy."

Richard B. LeVine, Inc. v. Higashi (2005) 131 Cal.App.4th 566, 579 (internal quotations omitted; emphasis in original). "The elements of a civil conspiracy are (1) the formation of a group of two or more persons who agreed to a common plan or design to commit a tortious act; (2) a wrongful act committed pursuant to the agreement; and (3) resulting damages." City of Industry v. City of Fillmore (2011) 198 Cal.App.4th 191, 212. Plaintiffs attempt to allege facts to support these elements. (FAC, P.P. 175-188).

However, the allegations of formation of the conspiracy, at least as this Defendant, are conclusory. Plaintiffs simply allege facts regarding how this Defendant participated in the conspiracy. Absent are facts to demonstrate that he agreed to the formation of the conspiracy. The demurrer and opposition argue extensively as to whether the specific factual allegations to support fraud or fraudulent misrepresentation have been met. However, any discussion regarding this is premature at this time since Defendant is not included as a party in these causes of action as of yet.

The demurrer to the tenth cause of action is sustained without leave to amend, in part, and with 20 days leave to amend, in part. The scope of leave to amend is only to include allegations of conspiracy in the underlying causes of action, and to amend to include this Defendant in any underlying causes of action, if applicable, and not to state a separate cause of action for Conspiracy.

Thirteenth Cause of Action for Intentional Interference with Contractual Relations

Fourteenth Cause of Action for Intentional Interference with Prospective Economic Advantage

Fifteenth Cause of Action for Negligent Interference with Prospective Economic Relations

Defendant's demurrer to the thirteenth through fifteenth causes of action is overruled. Plaintiffs state sufficient facts to state the causes of action and the causes of action are not uncertain. "The elements of an action for tortious interference [with contract] 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.

It has been repeatedly held that a plaintiff, seeking to hold one liable for unjustifiably inducing another to breach a contract, must allege [and prove] that the contract would otherwise have been performed." Hahn v. Diaz-Barba (2011) 194 Cal.App.4th 1177, 1196 (internal citations and quotations omitted). The elements of Intentional Interference with Prospective Economic Advantage are: (a) An economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (b) The defendant's knowledge of the relationship; (c) Intentional acts by the defendant designed to disrupt the relationship; (d) Actual disruption of the relationship; (e) Economic harm to the plaintiff proximately caused by the acts of the defendant; (f) Conduct that was wrongful by some legal measure other than the fact of interference itself.

Della Penna v. Toyota Motor Sales, U.S.A. (1995) 11 Cal.4th 376, 378. "The tort of negligent interference with prospective economic advantage is established where a plaintiff demonstrates that (1) an economic relationship existed between the plaintiff and a third party which contained a reasonably probable future economic benefit or advantage to plaintiff; (2) the defendant knew of the existence of the relationship and was aware or should have been aware that if it did not act with due care its actions would interfere with this relationship and cause plaintiff to lose in whole or in part the probable future economic benefit or advantage of the relationship; (3) the defendant was negligent; and (4) such negligence caused damage to plaintiff in that the relationship was actually interfered with or disrupted and plaintiff lost in whole or in part the economic benefits or advantage reasonably expected from the relationship."

Venhaus v. Shultz (2007) 155 Cal.App.4th 1072, 1078. A claim for negligent interference also requires the pleading of the independent wrongful conduct. National Medical Transportation Network v. Deloitte & Touche (1998) 62 Cal.App.4th 412, 439-42.

Plaintiffs plead sufficient facts of valid contracts and economic relationships with third parties - the patients. (FAC, P. 211). Plaintiffs allege that Defendant had knowledge of the contracts and economic relationships. (FAC, P. 212). Plaintiffs plead facts that Defendant engaged in acts to disrupt the contracts and relationships. Plaintiffs alleged that Defendant directed patients to Defendant's other dental practice other than Plaintiffs' practice. (FAC, P. 178). Plaintiffs have alleged actual disruption of the contracts and relationships. (FAC, P. 214).

Plaintiffs have alleged resulting damages. (FAC, P. 215). Defendant attempts to insert a pleading standard with respect to a breach of contract cause of action to the thirteenth cause of action. However, the elements of a breach of contract cause of action are not relevant because Plaintiffs are not alleging a breach of contract cause of action against this Defendant. Defendant also argues that Plaintiff Jerry Bridgman could not have had a contract or economic relationship with these patients. However, the allegations of the FAC must be deemed true for purposes of a demurrer.

Further, Jerry Bridgman verified the FAC under penalty of perjury stating that the matters set forth in the FAC are true to the best of his knowledge. Thus, he has sworn that he had contracts and economic relationships with these third party patients. Defendant also argues that there are insufficient allegations of a separate wrongful act to state the fourteenth cause of action. Plaintiffs argue that they set forth allegations of wrongful acts in the form of the Defendant's participation in the fraudulent billing practices. (FAC, 56-67).

Thus, the demurrer to the thirteenth through fifteenth causes of action is overruled.

Nineteenth Cause of Action for Violation of Bus. & Prof. Code 17200

Defendant's demurrer to the nineteenth cause of action is overruled. Plaintiffs state sufficient facts to state a cause of action. "California Business and Professions Code Sections 17000, et seq., and 17200, et seq., states [sic] that unfair competition shall mean and include unlawful, unfair or fraudulent business practices." Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 618-19. "By proscribing 'any unlawful' business act or practice, the UCL "borrows" rules set out in other laws and makes violations of those rules independently actionable. [Citation.]

However, a practice may violate the UCL even if it is not prohibited by another statute." Los Angeles Memorial Coliseum Com. v. Insomniac, Inc. (2015) 233 Cal.App.4th 803, 835. "The unfair competition law is independent of the Unfair Practices Act and other laws. Its remedies are "cumulative ... to the remedies or penalties available under all other laws of this state" (Sec. 17205), but its sanctions are less severe than those of the Unfair Practices Act. Prevailing plaintiffs are generally limited to injunctive relief and restitution. (Sec. 17203; see ABC Internat.

Traders, Inc. v. Matsushita Electric Corp. (1997) 14 Cal.4th 1247, 1268 [61 Cal.Rptr.2d 112, 931 P.2d 290].) Plaintiffs may not receive damages, much less treble damages, or attorney fees." Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 179. "Restitution under section 17203 is confined to restoration of any interest in "money or property, real or personal, which may have been acquired by means of such unfair competition." (Italics added.) A restitution order against a defendant thus requires both that money or property have been lost by a plaintiff, on the one hand, and that it have been acquired by a defendant, on the other.

But the economic injury that an unfair business practice occasions may often involve a loss by the plaintiff without any corresponding gain by the defendant, such as, for example, a diminishment in the value of some asset a plaintiff possesses. Such injuries satisfy the plain meaning of section 17204's "lost money or property" requirement, qualify as injury in fact, and would permit a plaintiff to seek an injunction against the offending business practice even in the absence of any basis for restitution. [P.]

This leads to a larger point: To make standing under section 17204 dependent on eligibility for restitution under section 17203 would turn the remedial scheme of the UCL on its head. Injunctions are "the primary form of relief available under the UCL to protect consumers from unfair business practices," while restitution is a type of "ancillary relief." Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 336-337 (internal citations omitted).

Defendant essentially argues that the cause of action fails because the underlying causes of action cannot be stated. However, as noted above, Plaintiffs have alleged sufficient facts that Defendant committed unlawful, unfair, or fraudulent business practices. (FAC, P.P. 56-67). Thus, the demurrer to the nineteenth cause of action is overruled.

Twenty-Second Cause of Action for Negligence

Defendant's demurrer to the twenty-second cause of action is overruled. Plaintiffs state sufficient facts to state a cause of action and the cause of action is not uncertain. "To state a cause of action for negligence, a plaintiff must allege (1) the defendant owed the plaintiff a duty of care, (2) the defendant breached that duty, and (3) the breach proximately caused the plaintiff's damages or injuries." Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 62. "It has long been established that in ruling on a demurrer, the trial court is obligated to look past the form of a pleading to its substance.

Erroneous or confusing labels attached by the inept pleader are to be ignored if the complaint pleads facts which would entitle the plaintiff to relief." Saunders v. Cariss (1990) 224 Cal.App.3d 905, 908. Thus, the fact that the cause of action is misnamed "Professional Negligence" rather than "Negligence" is of no consequence. Plaintiffs have alleged sufficient facts of the existence of a duty of care, breach of duty, causation, and damages. (FAC, P.P. 281-284). While Defendant argues that he did not have the type of fiduciary relationship that requires disclosure of material information, Plaintiff has also alleged that Defendant, while performing in Plaintiffs' practice, diverted patients away from Plaintiffs to Defendant's own practice.

A duty of care would exist to not perform acts to harm Plaintiffs' business in that manner. Thus, Defendant's demurrer to the twenty-second cause of action is overruled.

Motion to Strike

The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. CCP Sec. 436(a). The court may also strike all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. CCP Sec. 436(b). The grounds for a motion to strike are that the pleading has irrelevant, false or improper matter, or has not been drawn or filed in conformity with laws.

CCP Sec. 436. The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. CCP Sec. 437. Cal. Rules of Court, Rule 3.1322(a) states: "A notice of motion to strike a portion of a pleading must quote in full the portions sought to be stricken except where the motion is to strike an entire paragraph, cause of action, count, or defense. Specifications in a notice must be numbered consecutively."

Defendants First Choice, et al. move to strike the following: " 1. Paragraphs 126, 151, 163, 173, 187, the words "Plaintiff are further entitled to punitive damages against Defendants because their actions constituted fraud pursuant to Civil Code Sec.3294"; 2. Prayer For Relief paragraphs 14, 21, 25, 30, the words "For punitive damages pursuant to Civ. C. Sec.3294"; 3. Prayer For Relief paragraph 69, the words "Attorney's fees pursuant to California Code of Civil Procedure Sec. 1717, Pen. C. Sec.496(c)"; 4.

Paragraphs 125, 137, 150, 162, 172, 186, 264, 276, the words "Plaintiffs are further entitled to pre-judgment interest on these damages at the tort rate of seven percent (7%) per annum from December 1, 2023 until Judgment is entered"; 5. Prayer For Relief paragraphs 13, 17, 20, 26, 31, 34, 59, 62, the words "Plaintiffs are further entitled to pre-judgment interest on these damages at the tort rate of seven percent (7%) per annum from December 1, 2023 until Judgment is entered"; 6. Prayer For Relief paragraph 29, the words "For statutory treble damages pursuant to Pen.

C. Sec. 496(c);" (Notice of Motion, p. 2, line 17, to page 3, line 5).

Defendants' motion to strike the allegations and prayer for punitive damages (Items 1 and 2) is denied, in part, and moot, in part. As to the request to strike paragraph 187, the motion is moot upon the sustaining of the demurrer to the tenth cause of action. Civ. Code, Sec. 3294 states, in relevant part: "(a) In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant. (b) An employer shall not be liable for damages pursuant to subdivision (a), based upon acts of an employee of the employer, unless the employer had advance knowledge of the unfitness of the employee and employed him or her with a conscious disregard of the rights or safety of others or authorized or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud, or malice.

With respect to a corporate employer, the advance knowledge and conscious disregard, authorization, ratification or act of oppression, fraud, or malice must be on the part of an officer, director, or managing agent of the corporation."

Plaintiffs alleged sufficient specific facts that Defendants acted with malice, oppression, and/or fraud to support the allegations and prayer for punitive damages. The allegations already highlighted in detail above in connection with the fraud causes of action provide the requisite facts to allege that Defendants acted with the conscious disregard for the rights or safety of Plaintiffs. Thus, as to Items 1 and 2, with the exception of paragraph 187, the motion is denied.

As to Items 3 and 6, the motion is granted with 20 days leave to amend. With respect to the request for attorneys' fees and treble damages under Cal. Penal Code Sec. 496(c), moving parties were not named as parties to the ninth cause of action for violation of this statute. As to the request for attorneys' fees under CC Sec. 1717, Plaintiffs have not identified a contractual basis for the requested attorneys' fees.

As to Items 4 and 5, the motion is denied. Civ. Code, Sec. 3288 states: "In an action for the breach of an obligation not arising from contract, and in every case of oppression, fraud, or malice, interest may be given, in the discretion of the jury." Thus, pre-judgment interest may be available should Plaintiffs prevail on their underlying fraud claims. Defendants' First Choice, et al.'s motion to strike is denied, in part, granted with 20 days leave to amend, in part, and is moot, in part.

Motion to Set Aside Default/Quash Service

CCP Sec. 473(b) states, in relevant part: "The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. Application for this relief shall be accompanied by a copy of the answer or other pleading proposed to be filed therein, otherwise the application shall not be granted, and shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken. . . .

Notwithstanding any other requirements of this section, the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney's sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney's mistake, inadvertence, surprise, or neglect.

The court shall, whenever relief is granted based on an attorney's affidavit of fault, direct the attorney to pay reasonable compensatory legal fees and costs to opposing counsel or parties. . . ."

Code Civ. Proc., Sec. 473(c)(1) states: "Whenever the court grants relief from a default, default judgment, or dismissal based on any of the provisions of this section, the court may do any of the following: (A) Impose a penalty of no greater than one thousand dollars ($1,000) upon an offending attorney or party. (B) Direct that an offending attorney pay an amount no greater than one thousand dollars ($1,000) to the State Bar Client Security Fund. (C) Grant other relief as is appropriate."

CCP Sec. 473.5(a) states, in relevant part: "When 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 him or her in the action, he or she may serve and file a notice of motion to set aside the default or default judgment and for leave to defend the action. The notice of motion shall be served and filed within a reasonable time, but in no event exceeding the earlier of: (i) two years after entry of a default judgment against him or her; or (ii) 180 days after service on him or her of a written notice that the default or default judgment has been entered."

CCP Sec. 473.5(b) states: "A notice of motion to set aside a default or default judgment and for leave to defend the action shall designate as the time for making the motion a date prescribed by subdivision (b) of Section 1005, and it shall be accompanied by an affidavit showing under oath that the party's lack of actual notice in time to defend the action was not caused by his or her avoidance of service or inexcusable neglect. The party shall serve and file with the notice a copy of the answer, motion, or other pleading proposed to be filed in the action."

The phrase "actual notice" means "genuine knowledge of the party litigant" and does not include constructive or imputed notice to the client. Tunis v. Barrow (1986) 184 Cal.App.3d 1069, 1077. "After six months from entry of default, a trial court may still vacate a default on equitable grounds even if statutory relief is unavailable. . . . One ground for equitable relief is extrinsic mistake--a term broadly applied when circumstances extrinsic to the litigation have unfairly cost a party a hearing on the merits.

Extrinsic mistake is found when [among other things] ... a mistake led a court to do what it never intended[.] When a default judgment has been obtained, equitable relief may be given only in exceptional circumstances. [W]hen relief under section 473 is available, there is a strong public policy in favor of granting relief and allowing the requesting party his or her day in court. Beyond this period there is a strong public policy in favor of the finality of judgments and only in exceptional circumstances should relief be granted. . . .

To set aside a judgment based upon extrinsic mistake one must satisfy three elements. First, the defaulted party must demonstrate that it has a meritorious case. Second[], the party seeking to set aside the default must articulate a satisfactory excuse for not presenting a defense to the original action. Last[], the moving party must demonstrate diligence in seeking to set aside the default once ... discovered." Rappleyea v. Campbell (1994) 8 Cal.4th 975, 981-82 (internal citations and quotations omitted; emphasis in original).

CCP Sec. 473(d) empowers the Court to set aside any judgment that is void as a matter of law, e.g., lack of subject matter jurisdiction; lack of personal jurisdiction; lack of proper service of the summons and complaint; or the judgment violated due process rights. See Dhawan v. Biring (2015) 241 Cal.App.4th 963, 973-74; See also Ellard v. Conway (2001) 94 Cal.App.4th 540, 544; See also Heidary v. Yadollahi (2002) 99 Cal.App.4th 857, 862-64. "It is well settled that a judgment or order which is void on its face, and which requires only an inspection of the judgment roll or record to show its invalidity, may be set aside on motion, at any time after its entry, by the court which rendered the judgment or made the order."

Hiroko Kawakita Hayashi v. Lorenz (1954) 42 Cal.2d 848, 851. "Code of Civil Procedure section 473, subdivision (d) (hereafter section 473(d)), provides in relevant part that a court "may ... on motion of either party after notice to the other party, set aside any void judgment or order." Under this provision, a party may move to vacate a judgment on the ground of improper service of process." California Capital Insurance Company v. Hoehn (2024) 17 Cal.5th 207, 212.

"Mistake is not a ground for relief under section 473, subdivision (b), when the court finds that the 'mistake' is simply the result of professional incompetence, general ignorance of the law, or unjustifiable negligence in discovering the law. Further, the term surprise, as used in section 473, refers to some condition or situation in which a party is unexpectedly placed to his injury, without any default or negligence of his own, which ordinary prudence could not have guarded against. Finally, as for inadvertence or neglect, to warrant relief under section 473 a litigant's neglect must have been such as might have been the act of a reasonably prudent person under the same circumstances.

The inadvertence contemplated by the statute does not mean mere inadvertence in the abstract. If it is wholly inexcusable it does not justify relief. It is the duty of every party desiring to resist an action or to participate in a judicial proceeding to take timely and adequate steps to retain counsel or to act in his own person to avoid an undesirable judgment. Unless in arranging for his defense he shows that he has exercised such reasonable diligence as a man of ordinary prudence usually bestows upon important business his motion for relief under section 473 will be denied.

Courts neither act as guardians for incompetent parties nor for those who are grossly careless of their own affairs. The only occasion for the application of section 473 is where a party is unexpectedly placed in a situation to his injury without fault or negligence of his own and against which ordinary prudence could not have guarded." Hearn v. Howard (2009) 177 Cal.App.4th 1193, 1206 (internal citations and quotations omitted).

Code Civ. Proc., Sec. 415.10 states: "A summons may be served by personal delivery of a copy of the summons and of the complaint to the person to be served. Service of a summons in this manner is deemed complete at the time of such delivery. The date upon which personal delivery is made shall be entered on or affixed to the face of the copy of the summons at the time of its delivery. However, service of a summons without such date shall be valid and effective."

Code Civ. Proc., Sec. 416.10 states: "A summons may be served on a corporation by delivering a copy of the summons and the complaint by any of the following methods: (a) To the person designated as agent for service of process as provided by any provision in Section 202, 1502, 2105, or 2107 of the Corporations Code (or Sections 3301 to 3303, inclusive, or Sections 6500 to 6504, inclusive, of the Corporations Code, as in effect on December 31, 1976, with respect to corporations to which they remain applicable). (b) To the president, chief executive officer, or other head of the corporation, a vice president, a secretary or assistant secretary, a treasurer or assistant treasurer, a controller or chief financial officer, a general manager, or a person authorized by the corporation to receive service of process. (c) If the corporation is a bank, to a cashier or assistant cashier or to a person specified in subdivision (a) or (b). (d) If authorized by any provision in Section 1701, 1702, 2110, or 2111 of the Corporations Code (or Sections 3301 to 3303, inclusive, or Sections 6500 to 6504, inclusive, of the Corporations Code, as in effect on December 31, 1976, with respect to corporations to which they remain applicable), as provided by that provision."

Code Civ. Proc., Sec. 415.20 states, in relevant part: "(a) In lieu of personal delivery of a copy of the summons and complaint to the person to be served as specified in Section 416.10, 416.20, 416.30, 416.40, or 416.50, a summons may be served by leaving a copy of the summons and complaint during usual office hours in his or her office or, if no physical address is known, at his or her usual mailing address, other than a United States Postal Service post office box, with the person who is apparently in charge thereof, and by thereafter mailing a copy of the summons and complaint by first-class mail, postage prepaid to the person to be served at the place where a copy of the summons and complaint were left.

When service is effected by leaving a copy of the summons and complaint at a mailing address, it shall be left with a person at least 18 years of age, who shall be informed of the contents thereof. Service of a summons in this manner is deemed complete on the 10th day after the mailing."

Code Civ. Proc., Sec. 415.30 states, in relevant part: "(a) A summons may be served by mail as provided in this section. A copy of the summons and of the complaint shall be mailed (by first-class mail or airmail, postage prepaid) to the person to be served, together with two copies of the notice and acknowledgment provided for in subdivision (b) and a return envelope, postage prepaid, addressed to the sender. (c) Service of a summons pursuant to this section is deemed complete on the date a written acknowledgment of receipt of summons is executed, if such acknowledgment thereafter is returned to the sender."

Defendants "Dr. Aram Arakelyan, D.D.S., et al." move "for an order setting aside and vacating the default entered on June 2, 2026, and any default judgment entered against him in this action. This motion is made pursuant to Code of Civil Procedure sections 473(d) and 473(b) on the grounds that (1) the default and any resulting judgment are void due to improper service of process, and (2) in the alternative, relief is warranted due to mistake, inadvertence, surprise, or excusable neglect." (Notice of Motion, p. 2, lines 2-6).

First, the motion is completely uncertain and ambiguous as to who is or who are the moving parties. Defendants merely refer to themselves as "Dr. Aram Arakelyan, D.D.S., et al." However, there are numerous Defendants in this case and proofs of service were filed as to each Defendant. For example, as to Defendant Aram Arakelyan, D.D.S., a proof of service was filed on January 8, 2026 indicating that he was personally served. Other Defendants in this case were served by substitute service. Thus, the extensive arguments concerning alleged defective "substitute" service would not apply to Defendant Aram Arakelyan, D.D.S.

Also, as just mentioned, there are numerous Defendants in this action, and the Court cannot be left to guess who is moving to set aside the default. Simply stating "et al." does not provide any guidance. The Court notes that defaults were entered on June 2, 2026 as to several different Defendants.

Second, and equally fundamentally, Defendants submitted no competent evidence to support any of their arguments regarding defective service and/or mistake, inadvertence, surprise, or excusable neglect. The only declaration submitted was by Defendants' counsel. The declaration is short, and the pertinent portion can be recited verbatim: "After learning of the default entry on June 2, 2026, my law firm contacted Plaintiff's counsel to seek a stipulation to set it aside. Plaintiff's counsel did not respond.

A true and correct copy of this email correspondence is attached as Exhibit A. Defendant Dr. Aram Arakelyan, DDS, et al. has meritorious defenses to Plaintiffs' claims and is prepared to file a responsive pleading immediately upon the granting of this motion or soon after." (Decl., Thomas P. Bleau, P.P. 2-3). There are no facts to show why any of the proofs of service filed in this case were defective, and that, in fact, the Defendants (again the Court is left to guess which Defendants filed this motion) were not properly served.

There are no facts that the default(s) were entered due to any mistake, inadvertence, surprise, or excusable neglect of Defendants. Finally, to the extent that relief is based on Section 473(b), Defendants failed to file and serve the required responsive pleading.

Defendants' motion to set aside the default or defaults is denied without prejudice. Plaintiffs are ordered to give notice of this ruling. Case Number: 25TRCV03207 Hearing Date: September 3, 2026 Dept: M LOS ANGELES SUPERIOR COURT - SOUTHWEST DISTRICT Honorable Amy N. Carter Department M Thursday - September 3, 2026 Calendar No.