NAACP GREATER SACRAMENTO BRANCH vs WILLIAMS, et al.

25CV020632: NAACP GREATER SACRAMENTO BRANCH vs WILLIAMS, et al. 09/01/2026 Hearing on Demurrer to Complaint in Department 16C

Tentative Ruling

Defendants Betty Williams (“Williams”) and 1 Solution LLC’s (“1 Solution”) (collectively, “Defendants”) demurrer to Plaintiff NAACP Greater Sacramento Branch’s (“Plaintiff” or “NAACP”) complaint is ruled upon as follows.

Overview

Plaintiff alleges that Moore served as its President from 2005 to 2012 and from 2017 to 2023. Williams served as 1 Solution’s CEO in or about 2022 to 2023.

Plaintiff alleges that during the COVID-19 pandemic, Williams and other individual defendants obtained grants from the County of Sacramento (the “County”) for the purpose of administering a program that delivered meals to people who were impacted by the COVID-19 pandemic. Plaintiff alleges that Williams and others proceeded to direct hundreds of thousands of dollars to themselves by using their corporate entities as cover and serving as “independent contractors” that were supposed to fulfill administrative tasks associated with the program. (Complaint, ¶ 14.) Plaintiff alleges that the use of the affiliated subcontractors was a violation of the conflict-ofinterest provision in the contracts signed with the County, and that Williams and the others failed to disclose that a number of the subcontractors were affiliated with them. (Complaint, ¶¶ 78-79.)

Plaintiff alleges that Williams and others acted in their own self-interest from the start of the Dine-In 2 program. Plaintiff alleges that Williams hired 1 Solution “as an independent contractor” to serve as an executive director of the Dine-In 2 program. (Complaint, ¶ 48.) Williams also paid herself an hourly rate of $150. (Complaint, ¶ 49.) Williams additionally hired 1 Solutions to serve as an administrative assistant at a rate of $24 per hour. (Complaint, ¶ 50.)

Plaintiff alleges that it later discovered the alleged misconduct and investigated. Plaintiff alleges that Williams and 1 Solution submitted fraudulent invoices, and that the defendants “may have conspired to falsify or fabricate invoices through entities affiliated with them using similar templates for work that they did not perform.” (Complaint, ¶ 82.) For example, Plaintiff alleges that:

84. Defendant 1 Solution (affiliated with [defendant] Williams) submitted invoices that contained parallel typography, same header and footer layout, and other similar patterns as invoices submitted by Defendant Elite Professional (affiliated with Moore).

85. ... Defendants Elite Professional and 1 Solution issued invoices that were nearly identical (except for dates, names of the contractors, and invoice numbers), charging $3,840 for four items of “Admin/Training” work, each containing identical descriptions and numbers of hours worked.

25CV020632: NAACP GREATER SACRAMENTO BRANCH vs WILLIAMS, et al. 09/01/2026 Hearing on Demurrer to Complaint in Department 16C

[¶]

88. Defendant 1 Solution issued three identical invoices in June and July 2022, each charging $9000 for six items of service performed with identical description

[¶]

90. vendors affiliated with Defendants Williams and Pryor issued invoices billing an unusually high number of hours for activities during the program’s ramp-down period.

91. a May 2023 invoice (one month before the end date of the Dine-In 2 program) issued by Defendant 1 Solution billed 60 hours on “Admin” “Training, and “Outreach,” including “onboarding” and “training of new office manager,” totaling $9,000.

(Complaint, ¶¶ 84-85, 88, 90-91.)

Plaintiff further alleges that the investigation identified missing invoices for hundreds of thousands of dollars in payments to vendors. (Complaint, ¶ 93.)

The County has demanded that Plaintiff repay $948,037 in “disallowed costs,” and $1,728,769 in costs which do not have supporting documentation. (Complaint, ¶ 113.)

As against Defendants, the complaint asserts causes of action for: (1) Breach of Fiduciary Duty and Constructive Fraud, (2) Accounting, and (3) Fraud by Misrepresentation.

Defendants demur to each cause of action on the grounds that each fails to state sufficient facts and is uncertain.

Legal Standard

The function of a demurrer is to test the sufficiency of the pleading it challenges by raising questions of law. (Salimi v. State Comp. Ins. Fund (1997) 54 Cal.App.4th 216, 219; Nordlinger v. Lynch (1990) 225 Cal.App.3d 1259, 1271.)

A demurrer and a motion to strike “tests the pleadings alone and not the evidence or other extrinsic matters.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) The purpose of a demurrer is to test the legal sufficiency of a claim. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) For the purpose of determining the effect of a complaint, its allegations are liberally construed, with a view toward substantial justice. (Code Civ. Proc. §

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV020632: NAACP GREATER SACRAMENTO BRANCH vs WILLIAMS, et al. 09/01/2026 Hearing on Demurrer to Complaint in Department 16C

452; Amarel v. Connell (1988) 202 Cal.App.3d 137, 140-141; Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 43, fn. 7.) In this respect, the Court treats the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law, and considers matters which may be judicially noticed. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1111-1112.) A general demurrer does not admit contentions, deductions, or conclusions of fact or law alleged in the complaint; facts impossible in law; or allegations contrary to facts of which a court may take judicial notice. (Blank v.

Kirwan, supra, 39 Cal.3d at 318, William S. Hart Union High School Dist. v. Regional Planning Com. (1991) 226 Cal.App.3d 1612, 1616 n.2.) Extrinsic evidence may not properly be considered on demurrer or on a motion to strike. (Ion Equipment Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881; Hibernia Savings & Loan Soc. v. Thornton (1897) 117 Cal. 481, 482.)

A demurrer may be sustained only if the complaint lacks any sufficient allegations to entitle the plaintiff to relief. (Financial Corp. of America v. Wilburn (1987) 189 Cal.App.3d 764, 778.) “Plaintiff need only plead facts showing that he may be entitled to some relief . . ., we are not concerned with plaintiff’s possible inability or difficulty in proving the allegations of the complaint.” (Highlanders, Inc. v. Olsan (1978) 77 Cal.App.3d 690, 696-697.) “[Courts] are required to construe the complaint liberally to determine whether a cause of action has been stated, given the assumed truth of the facts pleaded.” (Picton v.

Anderson Union High School Dist. (1996) 50 Cal.App.4th 726, 733.) A demurrer admits the truth of all material facts properly pled and the sole issue raised by a general demurrer is whether the facts pled state a valid cause of action – not whether they are true. (Serrano v. Priest (1971) 5 Cal.3d 584, 591.)

Analysis

At the outset, the Court notes that Moving Defendants’ demurrer fails to comply with Code of Civil Procedure section 430.60 and California Rules of Court rule 31320 subdivision (a).

In this regard, Code of Civil Procedure section 430.60 states that “[a] demurrer shall distinctly specify the grounds upon which any of the objections to the complaint, cross-complaint, or answer are taken. Unless it does so, it may be disregarded.” Further, California Rules of Court, rule 3.1320 requires that “[e]ach ground of demurrer must be in a separate paragraph and must state whether it applies to the entire complaint, cross-complaint, or answer, or to specified causes of action or defenses.”

Here, Moving Defendant’s notice of demurrer indicates that they are demurring to the entire Complaint, but fails to identify the grounds upon which any objection to the Complaint is taken. While the Court could disregard these grounds for the demurrer entirely (Code Civ. Proc., § 430.60), the Court will rule on the merits of the demurrer since Defendants’ memorandum of points and authorities specifies the grounds on which they demurrer and because Plaintiff

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV020632: NAACP GREATER SACRAMENTO BRANCH vs WILLIAMS, et al. 09/01/2026 Hearing on Demurrer to Complaint in Department 16C

responds substantively to each of the asserted grounds in Moving Defendants’ memorandum of points and authorities.

The Court now turns to the substance of the demurrer.

Breach of Fiduciary Duty and Constructive Fraud

Defendants contend that Plaintiff fails to allege specific facts demonstrating a breach of duty or actionable fraud. They insist that Plaintiff fails to identify with specificity “which transactions constituted improper self-dealing, what amounts were allegedly diverted for personal gain, or how those transactions caused Sac NAACP a distinct financial injury.” (Demurrer, 8:4-6.) Defendants add that the complaint fails to satisfy the heightened pleading requirements for constructive fraud, in that Plaintiff fails to allege “facts showing that it relied on any specific misrepresentation by Williams, or that such reliance resulted in a concrete injury to Sac NAACP.” (Demurrer, 8:12-14.)

Defendants note that the contracts attached to the complaint show that the County retained oversight and audit rights, which undermines “any claim that Sac NAACP justifiably relied solely on Williams’ alleged nondisclosures.” (Demurrer, 8:18-20.)

NAACP opposes. It explains that it sufficiently alleges that Williams, its president, engaged in self-dealing and failed to disclose her conflict of interest. It continues that the complaint also explains how Williams used 1 Solution in the self-dealing scheme, and that the complaint sufficiently alleges the breach based on the invoices 1 Solution submitted to NAACP. (Complaint, ¶¶ 84-85, 88, 90-91.) NAACP further argues that it sufficiently alleges damages because the County has demanded that it repay the disallowed costs, and has incurred reputational harm. (Complaint, ¶¶ 96, 114, 123, 124.)

NAACP adds that the fact that the County retained oversight and audit rights is of no import because “[t]he audit provisions in the County contracts run between the County and Sac NAACP; they do not absolve Williams of her duty of loyalty to the organization she served as President. Moreover, the fact that the County eventually identified the discrepancies through its own audit—after the harm was done—does not negate Sac NAACP’s reliance on Williams’s non-disclosure during the period the self-dealing was actively concealed.” (Opposition, 10:1-5.)

With respect to constructive fraud, NAACP insists that a breach of fiduciary duty is considered fraud, and therefore, the same allegations supporting the breach of fiduciary duty claim also state a claim for constructive trust. A fiduciary’s failure to perform its duty constitutes constructive fraud. (Van de Kamp v. Bank of America (1988) 204 Cal.App.3d 819, 854.)

Taking the allegations in the complaint as true, the Court finds that NAACP sufficiently alleges a breach of fiduciary duty and constructive fraud cause of action. Additionally, the NAACP’s claims are based, in part, on the Defendants’ fraudulent concealment. Although in California fraud must be pled specifically, courts have repeatedly recognized that “‘it is harder to apply [the

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV020632: NAACP GREATER SACRAMENTO BRANCH vs WILLIAMS, et al. 09/01/2026 Hearing on Demurrer to Complaint in Department 16C

requirement of specificity] to a case of simple nondisclosure. “How does one show ‘how’ and ‘by what means’ something didn’t happen, or ‘when’ it never happened, or ‘where’ it never happened?”‘ [Citation.]” (Jones v. ConocoPhillips Co. (2011) 198 Cal.App.4th 1187, 1199.)

Accordingly, the demurrer is OVERRULED.

Accounting

“A cause of action for an accounting requires a showing that a relationship exists between the plaintiff and the defendant that requires an accounting, and that some balance is due the plaintiff that can only be ascertained by an accounting.” (Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 179.) “An action for accounting is not available where the plaintiff alleges the right to recover a sum certain or a sum that can be made certain by calculation.” (Ibid.) A fiduciary relationship is not necessary; rather, “[a]ll that is required is that some relationship exists that requires an accounting.” (Ibid.)

The right to an accounting does not require a fiduciary relationship (although one has been established in this case). Such a right to an accounting “can arise from the possession by the defendant of money or property which, because of the defendant’s relationship with the plaintiff, the defendant is obliged to surrender.” (Id., at 180.)

Defendants demur on the ground that Plaintiff fails to allege that they currently hold funds belonging to NAACP. The Court disagrees. As Plaintiff notes, it alleges that “[a] relationship exists between Sac NAACP and Defendants by virtue of Defendants’ possession of the embezzled, misappropriated, or stolen funds of the Dine-In 2 program, of which Sac NAACP is a contracted party.” (Complaint, ¶ 128.)

Defendants argue that the audit provision in the contract “belie Plaintiff’s claim that an equitable accounting is necessary, since both Plaintiff and the County already possess contractual enforcement tools to review expenditures and seek reimbursement.” (Demurrer, 9:18-20.) Yet, as Plaintiff notes, “the County’s audit rights run between the County and NAACP, they do not displace Sac NAACP’s independent right to demand an accounting from Moving Defendants.” (Opposition, 12:7-8.)

In opposition, Plaintiff points to the allegations in the complaint establishing that the accounts are too complex for an ordinary damages remedy because:

the Moving Defendants, together with the co-defendants, obtained Program funds through multiple interlocking entities controlled by or affiliated with Defendant Williams, Defendant Lorraine Moore, and/or Defendant Salena Pryor (the “Individual Defendants”) (Compl. ¶¶ 46, 70, 74, 94); there are invoices missing altogether (Compl. ¶¶ 64, 69, 93); and the County has identified nearly $2.7 million in disallowed or undocumented costs from Sac NAACP’s

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV020632: NAACP GREATER SACRAMENTO BRANCH vs WILLIAMS, et al. 09/01/2026 Hearing on Demurrer to Complaint in Department 16C

participation in the Program (Compl. ¶ 113). Sac NAACP demanded records, but Defendants have failed and refused to render a full and accurate accounting of the Program (Compl. ¶ 129). As asserted in the Complaint, “[t]he amount of embezzled, misappropriated, or stolen funds can only be ascertained by an accounting.” Compl. ¶ 131.

(Opposition, 11:10-18.)

Taking the allegations in the complaint as true, the Court finds that NAACP sufficiently alleges an accounting cause of action.

Accordingly, the demurrer is OVERRULED.

Fraud by Misrepresentation

Defendants claim that Plaintiff improperly makes “group allegations” of fraud against multiple defendants. The Court disagrees. Here, as Plaintiff notes, the complaint alleges Defendants’ specific roles and activities in the alleged fraudulent scheme. (Complaint, ¶¶ 48-50, 84-85, 88, 90-91.)

Defendants further insist that Plaintiff fails to plead this cause of action with the required specificity. For example, Defendants argue that Plaintiff fails to identify which invoices were allegedly falsified, which defendant prepared or submitted them, the dates on which they were submitted, or the specific amounts at issue. Defendants add that Plaintiff fails to allege justifiable reliance because the County had audit and oversight rights over NAACP. Defendants lastly argue that Plaintiff fails to plead damages with specificity.

The Court rejects Defendants’ argument that Plaintiff has failed to plead its misrepresentation claim with sufficient specificity. As an initial matter, less specificity is required of fraud claims “when ‘it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy,’ [citation]; ‘[e]ven under the strict rules of common law pleading, one of the canons was that less particularity is required when the facts lie more in the knowledge of the opposite party ....’” (Committee on Children’s Television, Inc. v.

General Foods Corp. (1983) 35 Cal.3d 197, 217.) The Court agrees with Plaintiff that this is such a situation since the Defendants possess their own internal records with details of the invoices. The Court also agrees with Plaintiff that it sufficiently alleges the misrepresentations, justifiable reliance and damages.

Here, the complaint identifies certain fraudulent invoices. (Complaint, ¶¶ 84-85, 88, 90-91.) The Court has already rejected Defendants’ argument regarding County audit since the audit rights belong to the County, not Plaintiff. Additionally, Plaintiff alleges:

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV020632: NAACP GREATER SACRAMENTO BRANCH vs WILLIAMS, et al. 09/01/2026 Hearing on Demurrer to Complaint in Department 16C

153. Plaintiff reasonably relied upon Defendants’ representations, as Plaintiff had no reason to doubt the veracity of the invoices or to suspect that Defendants would engage in self-dealing or misrepresentation.

154. In reliance on Defendants’ submissions, Plaintiff approved or facilitated the disbursement of substantial sums of public funds.

(Complaint, ¶¶ 153-154.)

Lastly, Plaintiff alleges that due to its approval and disbursement of the funds to Defendants, the County has demanded that Plaintiff repay $948,037 in disallowed costs and $1,728,769 in costs in which it does not have supporting documentation. (Complaint, ¶ 113.)

Taking the allegations in the complaint as true, the Court finds that NAACP sufficiently alleges a fraud cause of action.

Accordingly, the demurrer is OVERRULED.

Uncertainty

The demurrer for uncertainty is OVERRULED. Where a demurrer is made upon the ground of uncertainty, it must distinctly specify exactly how or why the pleading is uncertain, and where such uncertainty appears (by reference to page and line numbers of the complaint). (See Fenton v. Groveland Comm. Services Dist. (1982) 135 Cal.App.3d 797, 809, (disapproved on other grounds by Katzberg v. Regents of Univ. of Calif. (2002) 29 Cal.4th 300, 328.) Additionally, the allegations are not so uncertain that Defendants cannot frame a response.

Demurrers for uncertainty are disfavored and are only granted where the complaint is so muddled that the defendant cannot reasonably respond. The favored approach is to clarify theories in the complaint through discovery. (See Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616; Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group, June 2025 Update), ¶ 7:85.)

Disposition

The demurrer is OVERRULED in its entirety.

Defendants shall file and serve an answer no later than September 11, 2026.

This minute order is effective immediately. No formal order or other notice is required. (Code Civ. Proc. § 1019.5; CRC Rule 3.1312.)

NOTICE:

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV020632: NAACP GREATER SACRAMENTO BRANCH vs WILLIAMS, et al. 09/01/2026 Hearing on Demurrer to Complaint in Department 16C

Consistent with Local Rule 1.06(B), any party requesting oral argument on any matter on this calendar must comply with the following procedure:

To request limited oral argument, on any matter on this calendar, you must call the Department 16C Oral Argument Request Line at (916) 874-1475 by 4:00 p.m. the Court day before the hearing and advise opposing counsel. At the time of requesting oral argument, the requesting party shall leave a voice mail message: a) identifying themselves as the party requesting oral argument; b) indicating the specific matter/motion for which they are requesting oral argument; and c) confirming that it has notified the opposing party of its intention to appear and that opposing party may appear via Zoom using the Zoom link and Meeting ID indicated below.

If no request for oral argument is made, the tentative ruling becomes the final order of the Court. Unless ordered to appear in person by the Court, parties may appear remotely either telephonically or by video conference via the Zoom video/audio conference platform with notice to the Court and all other parties in accordance with Code of Civil Procedure §367.75. Although remote participation is not required, the Court will presume all parties are appearing remotely for non-evidentiary civil hearings.

The Department 16C Zoom Link is https://saccourt-ca-gov.zoomgov.com/j/16030877014 and the Zoom Meeting ID is 160 3087 7014. To appear on Zoom telephonically, call (833) 568-8864 and enter the Zoom Meeting ID referenced above. NO COURTCALL APPEARANCES WILL BE ACCEPTED.

Parties requesting services of a court reporter will need to arrange for private court reporter services at their own expense, pursuant to Government code §68086 and California Rules of Court, Rule 2.956. Requirements for requesting a court reporter are listed on the Court Reporter Services webpage available on the Sacramento Superior Court website at https://saccourt.ca.gov/general-information/court-reporter-services-transcripts. Parties may contact Court- Approved Official Reporters Pro Tempore by utilizing the list of Court Approved Official Reporters Pro Tempore available at https://saccourt.ca.gov/home/showpublisheddocument/227/639084034465370000.

A Stipulation and Appointment of Official Reporter Pro Tempore (CV/E-206) is required to be signed by each party, the private court reporter, and the Judge prior to the hearing, if not using a reporter from the Court’s Approved Official Reporter Pro Tempore list.

Once the form is signed it must be filed with the clerk. If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk will forward the form to the Court Reporter’s Office and an official reporter will be provided.