ASPEN TECHNOLOGIES GROUP, LLC vs CALIFORNIA DEPARTMENT OF TECHNOLOGY, et al.

24CV015294: ASPEN TECHNOLOGIES GROUP, LLC vs CALIFORNIA DEPARTMENT OF TECHNOLOGY, et al. 08/14/2025 Hearing on Demurrer to Plaintiff's First Amended Complaint in Department 54

Tentative Ruling

*** If oral argument is requested, the parties must at the time oral argument is requested notify the clerk and opposing counsel of the causes of action that will be addressed at the hearing. The parties are also reminded that pursuant to local court rules, only limited oral argument is permitted on law and motion matters. ***

Defendants California Department of Technology (“CDT”) and California Department of Motor Vehicles’ (“DMV”) (collectively, “Defendants”) demurrer to Plaintiff Aspen Technologies Group LLC’s (“Plaintiff”) first amended complaint (“FAC”) is ruled upon as follows.

Overview

This action arises out of a contract between Plaintiff and Defendants. Plaintiff alleges that Defendants contracted with it for the development, deployment and hosting of a cloud-based contact center and automation services for DMV. (FAC, ¶ 10.) Plaintiff alleges that it entered into a General Provisions Contract (“General Provisions Contract”) with CDT in 2019, and a Standard Agreement (“Standard Agreement”) in December 2020.[1] (Ibid.) It alleges that DMV is an intended beneficiary of both contracts. (Ibid.)

Plaintiff alleges that in March 2021, it continuously delivered platforms, automation, bots and provided services under the subject contracts. (FAC, ¶ 11.) It further alleges that:

. . .In September of 2022, DMV sent proper notice via a Form 20 to cancel one of the bot services, which was the bot service for the DMV website. In December 2022, Aspen accidentally failed to remove the fees related to the website bot services from the DMV bill and the DMV informed Aspen that they would be short-paying the website bot services. At the same time, Aspen learned and immediately informed the DMV that it had failed to bill for monthly services for the call center bot services since the beginning of the service period, of [sic] which uses the same CALNET catalog bot services SKU.

In January 2023, Aspen informed the DMV Deputy Director and an individual in the DMV accounting department regarding the lack of monthly recurring billing for call center bot services, wherein Aspen gained alignment [sic] from the DMV that the DMV should pay at or about the equivalent monthly amount of the website bot services for the missing call center bot services moving forward until such time Aspen could complete an audit for the usage of the call center bot services consumed by the DMV for the appropriate contract period.

In February 2023, the DMV followed through by reversing the short-pay from the December 2022 invoice and paid for call center bot services at or about the equivalent monthly amount of the

24CV015294: ASPEN TECHNOLOGIES GROUP, LLC vs CALIFORNIA DEPARTMENT OF TECHNOLOGY, et al. 08/14/2025 Hearing on Demurrer to Plaintiff's First Amended Complaint in Department 54

website bot services prior to the Aspen audit being complete. In February 2023, Aspen completed its audit for DMV’s usage of call center bot services, of [sic] which usage exceeded the average monthly cost of the website bot services, reviewed the audit findings with CDT prior to reviewing with DMV in order to ensured [sic] that Aspen was following the CALNET catalog for the agreed upon bot services SKU per unit price, and then presented the audit findings, usage, and price in a separate meeting in February 2023 with the DMV Deputy Director and DMV accounting individual.

After that meeting, written correspondence ensued between Aspen and the DMV to ensure that the audit and billing was understood, which followed CDT billing guidelines and the CDT negotiated bot SKU price found in the CALNET catalog, of which is the only approved CALNET catalog bot SKU. In March 2023, the Deputy Director at DMV attempted to negotiate a different price for the call center bot services, which Aspen engaged in and offered to adjust its pricing. Thereafter, in March 2023, the Deputy Director at the DMV disengaged Aspen and disputed the call center bot services charges entirely as not being “at or below market rate”.

In March 2023, April 2023, February 2024, and then again in March 2024, Aspen disputed and appealed to the DMV and CDT its findings, data and support that demonstrated that the Aspen bot services, which was priced using the CDT agreed upon CALNET catalog SKU, was at or below market rate.

(Ibid.)

Plaintiff alleges Defendants improperly declined to pay its properly submitted bills and terminated the Contracts with Plaintiff. (FAC, ¶ 12.) It alleges that Section 54.d of the General Provisions Contract required Plaintiff to continue running services that were in dispute, which forced Plaintiff to provide its platforms and services without being paid. (FAC, ¶ 13.)

Defendants previously filed a lawsuit against Plaintiff in 2023. (FAC, ¶ 16.) The parties entered into a Settlement and Release Agreement (“Settlement Agreement”). (Ibid.) Plaintiff alleges that the Settlement Agreement contains the following provisions which apply to this litigation:

8. Upon the expiration of the period in Paragraph 5 of this Agreement, and to the extent that DMV has not already done so, DMV shall issue payment for any portion of Aspen’s invoices not disputed by DMV, including those portions of Aspen’s invoice numbers 22194, 22199, and 22207, and a forthcoming invoice for December 2023. With respect to any future invoices from Aspen, including portions of those invoices in the Billing Dispute that DMV subsequently does not dispute, DMV and Aspen shall proceed pursuant to Section G.6.4 of the BAFO [Invitation for Bid C4DNCS19 Business Requirements Best and Final Offer

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV015294: ASPEN TECHNOLOGIES GROUP, LLC vs CALIFORNIA DEPARTMENT OF TECHNOLOGY, et al. 08/14/2025 Hearing on Demurrer to Plaintiff's First Amended Complaint in Department 54

(“BAFO”)]. Pursuant to Section 54(e) of the General Provisions, a final decision shall be conclusive and binding regarding all invoices submitted by Aspen unless Aspen commences an action in a court of competent jurisdiction to contest such decision within ninety (90) days following the date of the final decision or one (1) year following the accrual of the cause of action, whichever is later.

10. Aspen shall pursue the Billing Dispute pursuant to the terms of Section 54 of the General Provisions. Aspen shall consolidate all claims of unpaid invoices related to the Billing Dispute into one (1) written demand as required by Section 54 of the General Provisions. The Parties shall, in good faith, expedite the process and shorten the time for a final decision on the written demand where possible.

21. MUTUAL COOPERATION. The Parties agree to execute any such further and additional documents and instruments as shall be necessary or expedient to carry out the provisions of this Agreement and shall promptly and in good faith undertake all reasonable acts to effectuate all such provisions, including by attempting to resolve amicably and informally any perceived breach before incurring unnecessary legal costs.

(FAC, ¶ 17.)

On January 23, 2024, Plaintiff submitted a Demand for Final Decision on Payment (“Final Demand”) to Defendants pursuant to the Settlement Agreement, Section 54 of the General Provisions, and Section G.6.4 of the BAFO of the Standard Agreement making a demand for payment of unpaid invoices for services rendered by Aspen. (FAC, ¶ 21.) On February 24, 2024, DMV sent correspondence to Plaintiff formally denying the Final Demand, citing other reasons than the bill dispute claims not being at or below market rate. (FAC, ¶ 22.) Plaintiff then appealed the denial. (FAC, ¶ 23.) CDT denied Plaintiff’s appeal on April 15, 2024. (FAC, ¶ 26.)

The FAC asserts causes of action for: (1) breach of contract – Settlement Agreement, (2) breach of implied covenant of good faith and fair dealing – Settlement Agreement, (3) breach of contract – General Provisions Contract, (4) breach of implied covenant of good faith and fair dealing – General Provisions Contract, (5) breach of contract – Standard Agreement, (6) breach of implied covenant of good faith and fair dealing – Standard Agreement, (7) unjust enrichment, and (8) common count (goods and services rendered).

Defendants demur to each cause of action on the ground that Plaintiff fails to state facts sufficient to constitute a cause of action.

Plaintiff’s request for judicial notice is granted. In taking judicial notice of these documents, the

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV015294: ASPEN TECHNOLOGIES GROUP, LLC vs CALIFORNIA DEPARTMENT OF TECHNOLOGY, et al. 08/14/2025 Hearing on Demurrer to Plaintiff's First Amended Complaint in Department 54

court accepts the fact of their existence, not the truth of their contents. (See Professional Engineers v. Dep’t of Transp. (1997) 15 Cal.4th 543, 590; Steed v. Department of Consumer Affairs (2012) 204 Cal.App.4th 112, 120-121.)

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. §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 (1985) 39 Cal.3d 311, 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.) 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.)

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV015294: ASPEN TECHNOLOGIES GROUP, LLC vs CALIFORNIA DEPARTMENT OF TECHNOLOGY, et al. 08/14/2025 Hearing on Demurrer to Plaintiff's First Amended Complaint in Department 54

Breach of Contract – Settlement Agreement; Breach of Implied Covenant of Good Faith And Fair Dealing – Settlement Agreement

Plaintiff’s original complaint did not include any contractual causes of action regarding the Settlement Agreement. The complaint only asserted contractual causes of action based on Defendants’ purported material breach of Section 40 of the General Provisions Contract. In their demurrer to the original complaint, Defendants argued, in part, that “Aspen does not allege a breach of any specific term of the Contract. Rather, the Complaint generally references Sections 39 and 40 of the General Provisions, but these provisions cannot be the source of Defendants’ alleged breach because the invoices at issue were disputed, and Section 40 only provides for payment of undisputed invoices.

Indeed, Section 39 states that ‘[n]o payment will be due before Acceptance thereof,’ and Aspen does not allege that either defendant ‘accepted’ any of the thirty disputed invoices at issue.” (Minute Order, January 14, 2025.) In response, Plaintiff argued that “Defendants’ argument flies in the face of Section 54 of the General Provisions and the Settlement Agreement, as well as the parties’ course of conduct, because the parties expressly agreed that Plaintiff may submit its disputed billing for administrative adjudication pursuant to Section 54 of the General Provisions. (Id.)

The Court agreed with Defendants that Plaintiff failed to sufficiently allege what term Defendants purportedly breached. (Id.) In sustaining the demurrer to the contractual causes of action, the Court explained, “Sections 39 and 40 [of the General Provisions Contract] cannot be the source of Defendants’ alleged breach because the invoices at issue were disputed, and Section 40 only provides for payment of undisputed invoices.”

Defendants demur to these two causes of action because they are new causes of action, and the Court did not grant leave to amend to add new causes of action when it ruled on Defendants’ demurrer to the original complaint. Defendants note that Plaintiff’s original complaint did not include contractual causes of action concerning the Settlement Agreement, and therefore, the Court did not grant Plaintiff leave to amend to add these new causes of action.

Plaintiff insists that it properly added these causes of action because they simply involve new legal theories based upon prior allegations. It further contends that these causes of action fall squarely within the scope of the Court’s order granting leave to amend.

The cases upon which Plaintiff relies do not support its argument. Herrera v. Superior Court (1984) 158 Cal.App.3d 255 and Saari v. Superior Court in and for Humboldt County (1960) 178 Cal.App.2d 175 are procedurally inapposite as they concerned motions for leave to amend the complaint that were denied.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV015294: ASPEN TECHNOLOGIES GROUP, LLC vs CALIFORNIA DEPARTMENT OF TECHNOLOGY, et al. 08/14/2025 Hearing on Demurrer to Plaintiff's First Amended Complaint in Department 54

Plaintiff’s reliance on Pruitt v. Fontana (1956) 143 Cal.App.2d 675, disapproved on other grounds in Mattei v. Hopper (1958) 51 Cal.2d 119, is also misplaced. There, the plaintiffs’ third amended complaint alleged that the defendant breached a contract of sale of real property, however, in the fourth amended complaint, the plaintiffs recharacterized the same contract as an option to buy the property. (Id., at 683.) In finding that the plaintiffs’ fourth amended complaint did not allege a distinct or different obligation, the court explained:

The inquiry is directed to “whether an attempt is made to state facts which give rise to a wholly distinct and different legal obligation against the defendant.” (Klopstock v. Superior Court, 17 Cal.2d 13, 20 [108 P.2d 906, 135 A.L.R. 318].) A change of theory regarding the basis of recovery does not constitute a change of the cause of action or the introduction of a new and different action than the one originally alleged. (Wells v. Lloyd, 6 Cal.2d 70, 88 [56 P.2d 517].) The transaction complained of in the fourth amended complaint is substantially identical to the one set forth in the prior pleading.

The principal difference that appears is that the gravamen of count one is characterized as sounding for breach of contract of a sale in the third amended complaint, while the fourth amended complaint alleges virtually the same facts as also constituting breach of an option to purchase. This is merely pleading a different legal basis on which recovery may be predicated and not the injection of a distinct or different obligation as the foundation of liability.

(Id., at 683 (italics added).)

In contrast here, Plaintiff’s amendments are not simply a recharacterization of legal theories based on the same contract, but rather on the breach of the Settlement Agreement, which is entirely separate and distinct from the breach of the Contracts.

When a trial court sustains a demurrer with leave to amend, the scope of the grant of leave is ordinarily a limited one. It gives the pleader an opportunity to cure the defects in the particular causes of action to which the demurrer was sustained, but that is all. (See Community Water Coal. v. Santa Cruz Cty. Local Agency Formation Com. (2011) 200 Cal App. 4th 1317, 1329; see also Harris V. Wachovia Mortg., FSB (2010)185 Cal App. 4th 1018, 1023.) Thus, a plaintiff may not amend the complaint to add a new cause of action without having obtained permission to do so, unless the new cause of action is within the scope of the order granting leave to amend. (Community Water Coalition v.

Santa Cruz County Local Agency, supra, (2011) 200 Cal.App.4th at 1329.) An amended complaint that exceeds the scope of an order granting leave to amend may be stricken by a trial court in its own discretion or upon a motion to strike by the opposing party. (Code Civ. Proc., §§ 435, 436.)

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV015294: ASPEN TECHNOLOGIES GROUP, LLC vs CALIFORNIA DEPARTMENT OF TECHNOLOGY, et al. 08/14/2025 Hearing on Demurrer to Plaintiff's First Amended Complaint in Department 54

Here, the Court agrees with Defendants that Plaintiff’s amendments exceed the scope of the order granting leave to amend. Accordingly, the Court, in its own discretion, strikes the breach of contract – Settlement Agreement and breach of implied covenant of good faith and fair dealing – Settlement Agreement causes of action. Plaintiff must file a properly noticed motion for leave to amend the complaint if it seeks to add these causes of action to the complaint.

Breach of Contract – General Provisions Contract; Breach of Contract – Standard Agreement

In the breach of contract – General Provisions Contract cause of action, Plaintiff alleges that Defendants “breached section 54(a) of the General Provisions titled ‘Disputes’ by failing to act in good faith to attempt to resolve the billing dispute informally. Aspen repeatedly asked CDT and DMV to meet and review pricing, which requests were refused by Defendants. . . .” (FAC, ¶ 42.) Section 54(a) of the General Provision states “[t]he parties shall deal in good faith and attempt to resolve potential disputes informally.” (FAC, Ex. A, p. 52.)

In the breach of breach of contract – Standard Agreement cause of action, Plaintiff alleges that Defendants “breached G.6.4 of the BAFO of the Standard Agreement by failing to use their best efforts to resolve the billing dispute with Aspen.” [2] (FAC, ¶ 51.) Section G.6.4 of the BAFO provides:

[s]hould the State or any Customer dispute, in good faith, any portion of the invoiced amount due, the Customer shall notify the Contractor in writing of the nature and basis of the dispute as soon as possible. In the event the dispute is not resolved prior to the invoice Due Date, the Customer may deduct the disputed amount from the amount due. No late payment charges shall apply to the disputed amount until the dispute is resolved by both parties at which time any amount due will be paid by the Customer or adjustment shall be issued by the Contractor, consistent with the payment timelines set forth in this Agreement. All parties agree to use their best efforts to resolve disputes.

[¶]

In the event a dispute between the Contractor and the Customer cannot be resolved, the processes described in the General Provisions - eVAQ Sections 64, Set-Off Rights, and 54, Disputes shall prevail.

(FAC, Ex. B, p. 51.)

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV015294: ASPEN TECHNOLOGIES GROUP, LLC vs CALIFORNIA DEPARTMENT OF TECHNOLOGY, et al. 08/14/2025 Hearing on Demurrer to Plaintiff's First Amended Complaint in Department 54

Defendants demur to these two causes of action on the ground that Plaintiff fails to identify any specific term of the Contracts that Defendants allegedly breached. According to Defendants, “the alleged conduct cannot be the source of Defendants’ alleged breach because there is no contractual provision requiring Defendants to pay $15.6 million for disputed invoices. Instead, Aspen’s allegations that Defendants did not ‘act in good faith’ or use ‘their best efforts’ are improper conclusions of law.” (Demurrer, 15:20-23.)

They add that Plaintiff’s factual allegations show the opposite since Plaintiff “concedes it submitted a final demand for payment of the disputed invoices to DMV and that DMV issued a decision on Aspen’s final demand. (FAC, ¶¶ 21-22.) Aspen appealed the decision to CDT, and CDT rendered its final decision. (Id., ¶¶ 23- 27.) Thereafter, Aspen filed this lawsuit. Thus, contrary to any alleged breach, Aspen confirms that Defendants followed the contractual requirements for addressing Aspen’s disputed invoices. (Ex.

A, p. 52, ¶ 54, subparagraph (b).)” (Demurrer, 15:26-16:5.)

Plaintiff rejoins that it has specifically identified the specific terms of each contract that Plaintiff claims were breached, specifically, Section 54(a) of the General Provision and Section G.6.4 of the BAFO. Citing to its allegation in Paragraph 11 of the FAC, Plaintiff insists that it has included specific factual allegations regarding Defendants’ failure to act in good faith. For instance, Plaintiff alleges that despite its billings following CDT’s billing guidelines and the CDT negotiated the bot SKU price found in the CALNET catalog, the DMV attempted to negotiate a different price, and Plaintiff offered to adjust the pricing.

The DMV, however, then “disengaged” Plaintiff, and disputed that the service charges were not “at or below market rate.” During Plaintiff’s appeal, it demonstrated that the services were priced using the CDT agreed upon CALNET catalog SKU, was at or below market rate.” (FAC, ¶ 11.)

The Court finds that Plaintiff has sufficiently alleged facts to support the breach of contract causes of action. Whether Defendants “acted in good faith” or used “their best efforts,” is a question of fact for the trier of fact.

Accordingly, the demurrer is OVERRULED.

Breach of Implied Covenant of Good Faith and Fair Dealing – General Provisions Contract; Breach of Implied Covenant of Good Faith and Fair Dealing – Standard Agreement

Defendants demur, in part, on the ground that Plaintiff fails to allege that its “Demand for Final Decision on Payment” included its claim that Defendants allegedly breached of the covenant of good faith and fair dealing or any other tort claim. Defendants suggest that “[i]f Aspen seeks damages based on a breach of the covenant of good faith and fair dealing or some other tort, it is required to comply with Section 54 of the General Provisions as to that specific cause of action, but the FAC does not allege Aspen complied with this contractual requirement.” (Demurrer,

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV015294: ASPEN TECHNOLOGIES GROUP, LLC vs CALIFORNIA DEPARTMENT OF TECHNOLOGY, et al. 08/14/2025 Hearing on Demurrer to Plaintiff's First Amended Complaint in Department 54

17:8-11.)

Section 54(b) of the General Provisions Contract states, in part, “[i]f the dispute persists, the Contractor shall submit to the contracting Department Director or designee a written demand for a final decision regarding the disposition of any dispute between the parties arising under, related to or involving this Contract.”

Defendants’ argument, however, ignores paragraphs 41 and 50 of the FAC which state “Aspen properly utilized and exhausted the Section 54 Dispute procedures and administrative remedies set forth in the General Provisions Contract and pursuant to the Settlement Agreement.” These paragraphs are incorporated by reference into the breach of covenant of good faith and fair dealing causes of action. (FAC, ¶¶ 45, 53.)

The demurrer on this ground is OVERRULED.

Defendants further contend that “Aspen’s contention that Defendants breached the covenant of good faith and fair dealing by ‘preventing Aspen from receiving the benefits of the contract,’ is nothing more than a breach of contract claim.” (Demurrer, 17:11-12.)

Plaintiff rejoins that it has adequately alleged the elements as specified in CACI 325 which states that “each party will not do anything to unfairly interfere with the right of any other party to receive the benefits of the contract. . ..”

In connection with these causes of action, Plaintiff alleges “CDT and DMV breached the covenant of good faith and fair dealing implied in the General Provisions by preventing, impeding, and otherwise unfairly interfering with Aspen’s right to receive the benefits of the General Provisions, including but not limited to preventing Aspen from receiving the benefits of the contract as follows:

 by ordering from Aspen 3rd party bots to be installed by Aspen, which would then charge CDT and DMV for recurring services of the 3rd party bots and paying for them consistently.  ordering from Aspen the deployment of Aspen’s own bots to replace the 3rd party bots, wherein the installation of Aspen’s own bots was charged to DMV. When Aspen discovered that they had not billed for the recurring services of the Aspen bots, DMV agreed and then asked for an audit which Aspen agreed to.  In preparing the audit for recurring usage of the Aspen bots, Aspen confirmed with CDT the proper SKU price and the right to bill for the usage of these bots.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV015294: ASPEN TECHNOLOGIES GROUP, LLC vs CALIFORNIA DEPARTMENT OF TECHNOLOGY, et al. 08/14/2025 Hearing on Demurrer to Plaintiff's First Amended Complaint in Department 54

 Aspen presented the audit results to DMV and then prepared invoices for the recurring services of the Aspen bots, which DMV initially agreed to pay, but not at the price negotiated.

(FAC, ¶¶ 47, 55.)

Plaintiff further alleges that “Defendants then wrongfully claimed that Aspen’s services were not billed at market rate, and then after the dispute was filed suddenly switched to claiming they never ordered the Aspen bots, and therefore, neither DMV nor CDT were required to pay for Aspen’s valuable services.” (FAC, ¶¶ 47, 56.)

Taking Plaintiff’s allegations as true, the demurrer is OVERRULED.

Unjust Enrichment

Defendants demur on the ground that a common law unjust enrichment cause of action cannot lie against a public entity. “There is no such thing as common law tort liability for public entities; a public entity is not liable for an injury ‘[e]xcept as otherwise provided by statute.’” (County of Santa Clara v. Superior Court (2023) 14 Cal.5th 1034, 1046 [holding that a quantum meruit claim required by statute may proceed against a public entity].) They further argue that unjust enrichment does not apply when the party has an adequate remedy at law such as a cause of action for breach of contract. (LeBrun v.

CBS Television Studios, Inc. (2021) 68 Cal.App.5th 199, 212 [finding that plaintiffs’ fraud cause of action already provided a method to achieve justice for the wrongs allegedly committed in the unjust enrichment cause of action; Lance Camper Manufacturing Corp. v. Republic Indemnity Co. (1996) 44 Cal.App.4th 194, 203 [“[A]n action based on an implied-in-fact or quasi-contract cannot lie where there exists between the parties a valid express contract covering the same subject matter.”]

Without citing to any legal authority, Plaintiff contends that “[u]njust enrichment can be properly asserted against a public entity where the plaintiff can point to a contractual promise that was approved by the public entity but is subsequently challenged by the entity, and the plaintiff ‘is not attempting to imply the existence of an extra-contractual agreement.’” (Opposition, 12:14- 28.) Plaintiff appears to be relying on Russell City Energy Co., LLC v. City of Hayward (2017) 14 Cal.App.5th 54 which it cited in opposition Defendants’ demurrer to the original complaint.

In Russell, the court allowed plaintiff an opportunity to amend its complaint against the City of Hayward to allege a quasi-contractual restitution claim in the unique set of circumstances where there was no dispute as to whether the parties entered into the contract, and the plaintiff was not attempting to imply the existence of an extra-contractual agreement or attempting to enforce an invalid provision of the agreement. Referring to paragraph 60 of the FAC, Plaintiff claims that it has alleged that Defendants initially approved a contractual promise, but then challenged the

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV015294: ASPEN TECHNOLOGIES GROUP, LLC vs CALIFORNIA DEPARTMENT OF TECHNOLOGY, et al. 08/14/2025 Hearing on Demurrer to Plaintiff's First Amended Complaint in Department 54

contractual promise in connection with the invoices involved in this litigation.

Plaintiff, however, fails to address Defendants’ argument that unjust enrichment does not apply when the party has an adequate remedy at law such as a cause of action for breach of contract. Here, the Court has overruled the demurrer to Plaintiff’s breach of contract causes of action, therefore, Plaintiff has alleged a valid express contract covering the same subject matter, and Plaintiff has as an adequate remedy at law. The Court notes that breach of contract and unjust enrichment may be plead as alternative theories of recovery where it is alleged that the express contract is void or was rescinded. (See Russell City Energy Co., LLC, supra, 14 Cal.App.5th 54, 70, fn. 8 quoting Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 231.) Here, there are no allegations that the Contracts are void or were rescinded.

Accordingly, the demurrer is SUSTAINED with leave to amend. The Court grants leave to amend to allow Plaintiff another opportunity to cure the defects noted above.

Common Counts

Defendants previously demurred to the common counts cause of action on the grounds that Plaintiff could not assert a common counts theory because it has asserted an actual agreement covering the compensation and that “to the extent ‘[a] common count is used as an alternative way of seeking the same recovery demanded in a specific cause of action, and is based on the same facts, the common count is demurrable if the cause of action is demurrable.’” (Demurrer to the Complaint, 13:8-11 quoting McBride v. Boughton (2004) 123 Cal.App.4th 379, 394.)

The Court overruled the demurrer because “a plaintiff may plead inconsistent causes of action for breach of contract and common count.” (Newport Harbor Ventures, LLC v. Morris Cerullo World Evangelism (2016) 6 Cal.App.5th 1207, 1223.)[3]

Defendants suggest that the FAC’s new causes of action and factual allegations do not support a common count (goods and services rendered) claim because the new allegations in the FAC “fail to state whether Aspen complied with Section 54 of the General Provisions Contract by including in its “Demand for Final Decision on Payment” its claim for “Common Count (Goods and Services Rendered).” (Demurrer, 19:9-11.)

Defendants’ argument ignores paragraphs 41 and 50 of the FAC which state “Aspen properly utilized and exhausted the Section 54 Dispute procedures and administrative remedies set forth in the General Provisions Contract and pursuant to the Settlement Agreement.” These paragraphs are incorporated by reference into the common counts cause of action. (FAC, ¶¶ 63.)

The demurrer is on this ground is OVERRULED.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV015294: ASPEN TECHNOLOGIES GROUP, LLC vs CALIFORNIA DEPARTMENT OF TECHNOLOGY, et al. 08/14/2025 Hearing on Demurrer to Plaintiff's First Amended Complaint in Department 54

Defendant further argues that Plaintiff cannot allege a common count claim based on quantum meruit or restitution considerations because “‘[i]t is well settled that there is no equitable basis for an implied-in-law promise to pay reasonable value when the parties have an actual agreement covering compensation.’” (Demurrer, 19:15-16 citing Sheppard v. North Orange County Regional Occupational Program (2010) 191 Cal.App.4th 289, 34.) It explains that “[n]ot only does Aspen fail to allege a breach of contract cause of action, but it also cannot pursue a common count claim or any other sort of claim for unpaid services against either defendant.

There is no basis for an implied promise to pay when the General Provisions Contract explicitly governs payment of Aspen’s network services for the DMV’s cloud-based contact center.” (Demurrer, 19:26-20:2.) Here, however, Plaintiff does not premise its breach of contract causes of action on Defendants’ failure to pay. Instead, as noted above, Plaintiff alleges that Defendants breached the Contracts by failing to act in “good faith” or use “their best efforts” to resolve the dispute.

The demurrer is on this ground is OVERRULED.

Where leave to amend is granted, Plaintiff may file and serve a second amended complaint (“SAC”) by no later than August 25, 2025, Response to be filed and served within 30 days thereafter, 35 days if the SAC is served by mail. (Although not required by any statute or rule of court, Plaintiff is requested to attach a copy of the instant minute order to the SAC to facilitate the filing of the pleading.)

This minute order is effective immediately. No formal order or other notice is required. (Code Civ. Proc. §1019.5; CRC Rule 3.1312.) [1] The General Provisions Contract and Standard Agreement are collectively referred to herein as the “Contracts.”

[2] The BAFO is incorporated by reference into the Standard Agreement. [3] The Court agrees with Defendants that the FAC substantially changes the allegations from the

original complaint such that Defendants’ demurrer to this cause of action is proper, even though it previously overruled Defendants’ demurrer to this cause of action in original complaint.

NOTICE:

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 Law and

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

24CV015294: ASPEN TECHNOLOGIES GROUP, LLC vs CALIFORNIA DEPARTMENT OF TECHNOLOGY, et al. 08/14/2025 Hearing on Demurrer to Plaintiff's First Amended Complaint in Department 54

Motion Oral Argument Request Line at (916) 874-2615 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 53/54 Zoom Link is https://saccourt-cagov.zoomgov.com/my/sscdept53.54 and the Zoom Meeting ID is 161 4650 6749. 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 in the Policy for Official Reporter Pro Tempore available on the Sacramento Superior Court website at https://www.saccourt.ca.gov/court-reporters/docs/crtrp-6a.pdf. Parties may contact Court- Approved Official Reporters Pro Tempore by utilizing the list of Court Approved Official Reporters Pro Tempore available at https://www.saccourt.ca.gov/court-reporters/docs/crtrp- 13.pdf.

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.