Apple Dream, LLC vs. Chae

Although courts should take a liberal view of inartfully drawn complaints (see Code Civ. Proc., § 452), it remains essential that a complaint set forth the actionable facts relied upon with sufficient precision to inform the defendant of what plaintiff is complaining, and what remedies are being sought. (Leek v. Cooper (2011) 194 Cal.App.4th 399, 413.) Bare conclusions of law devoid of any facts are insufficient to withstand demurrer. (Schmid v. City and County of San Francisco (2021) 60 Cal.App.5th 470, 481; see Code Civ. Proc., § 425.10(a).)

First Cause of Action (Tort of Another Doctrine)

The demurrer to the first cause of action is SUSTAINED with leave to amend.

The first cause of action alleges Cross-Complainant Bongroung Chae has incurred costs, expenses, and attorney’s fees and may suffer liabilities herein for the acts or the failure to act by Cross-Defendants. (Cross-Compl. ¶ 16.)

“The [“tort of another”] doctrine allows a plaintiff to recover attorney fees ‘“ if he is required to employe counsel to prosecute or defend an action against a third party because of the tort of defendant.”’ [Citation.]” (Behniwal v. Mix (2005) 133 Cal.App.4th 1027, 1043.)

As Mr. Chae concedes, the doctrine “is not an independent cause of action” (Opp. at 6:23-24), and thus, the purported first cause of action fails as a matter of law.

Second Cause of Action (Intentional Misrepresentation)

The demurrer to the second cause of action is SUSTAINED with leave to amend.

The second cause of action alleges Cross-Defendants Ahn and/or Kim intentionally misrepresented that they would repay the loan when they never intended to repay the loan. (Cross-Compl. ¶ 26.)

A cause of action for misrepresentation must allege an affirmation of fact. (See Civ. Code, § 1710(1) [defining deceit, in part, to include the assertion, as a fact, of that which is not true, by one who has no reasonable ground for believing it to be true].)

Here, the allegation is that of false promise, or promissory fraud. (See Cross-Compl. ¶¶ 26, 39.)

The elements of a cause of action for promissory fraud are: (i) the defendant made a false promise; (ii) with intent not to perform; (iii) intent to induce reliance; (iv) justifiable reliance by the plaintiff; and (v) resulting damages. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638; Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1061.) In addition, fraud actions must be pled with specificity. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216, superseded by statute on another ground as stated in California for Disability Rights v. Mervyn’s, LLC (2006) 39 Cal.4th 223, 227.) California’s heightened pleading rule serves two purposes: (1) to put the defendant on notice, to “furnish [it] with certain definite charges which can be intelligently met”; and (2) to weed out nonmeritorious actions. (Id.)

Here, the Cross-Complaint does not plead with specificity which Cross-Defendant(s) made the false promise, when, or by what means. The Cross-Complaint also does not allege facts showing justifiable reliance by Mr. Chae.

Third Cause of Action (Negligent Misrepresentation)

The demurrer to the third cause of action is SUSTAINED with leave to amend.

The third cause of action alleges Cross-Defendants Ahn and/or Kim negligently misrepresented that they would repay the loan when they never intended to repay the loan. (Cross-Compl. ¶ 39.)

The alleged misrepresentation is not an affirmation of fact but rather a false promise. There is no cause of action for negligent false promise. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 158-59 [holding that the specific intent requirement precludes pleading a false promise claim as a negligent misrepresentation].) Thus, the Cross-Complaint fails to state a valid cause of action for negligent misrepresentation.

Fourth Cause of Action (Money Had and Received)

The demurrer to the fourth cause of action is SUSTAINED with leave to amend.

The fourth cause of action alleges Cross-Defendants became indebted to Mr. Chae when they failed to return money lent by him. (Cross- Compl. ¶¶ 42-43.)

The elements of a cause of action for money had and received are: (i) defendant received money that was intended to be used for the benefit of plaintiff; (ii) the money was not used for the benefit of plaintiff; and (iii) defendant has not given the money to plaintiff. (See Avidor v. Sutter’s Place, Inc. (2013) 212 Cal.App.4th 1439, 1454; see also CACI No. 370.)

The Cross-Complaint does not allege Cross-Defendants received money intended to be used for the benefit of Mr. Chae or that the money was not used for his benefit.

Fifth Cause of Action (Unjust Enrichment)

The demurrer to the fifth cause of action is OVERRULED.

The fifth cause of action alleges Cross-Defendants Ahn and Kim were unjustly enriched at the expense of Mr. Chae. (Cross-Compl. ¶¶ 46-47.)

“[T]here is no cause of action in California for unjust enrichment. ‘The phrase ‘Unjust Enrichment’ does not describe a theory of recovery, but an effect: the result of a failure to make restitution under circumstances where it is equitable to do so.’” (Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th 779, 793, quoting Lauriedale Associates, Ltd. v. Wilson (1992) 7 Cal.App.4th 1439, 1448.) In other words, “[u]njust enrichment is ‘a general principle, underlying various legal doctrines and remedies,’ rather than a remedy itself.” (Melchior v. New Line Productions, Inc.,

supra, 106 Cal.App.4th 779, 793, quoting Dinosaur Development, Inc. v. White (1989) 216 Cal.App.3d 1310, 1315.)

An unjust enrichment cause of action may survive a demurrer where the claim adequately pleads a quasi-contractual claim. (See Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 231, quoting McBride v. Boughton (2004) 123 Cal.App.4th 379, 388, and Lance Camper Manufacturing Corp. v. Republic Indemnity Co. (1996) 44 Cal.App.4th 194, 203.)

A quasi-contract “‘“is an obligation . . . created by the law without regard to the intention of the parties[] and is designed to restore the aggrieved party to [its] former position by return of the thing or its equivalent in money. [Citations.]”’” (Welborne v. Ryman-Carroll Foundation (2018) 22 Cal.App.5th 719, 725, citing Unilab Corp. v. Angeles-IPA (2016) 244 Cal.App.4th 622, 639.) “‘Quasi-contract’ is simply another way of describing the basis for the equitable remedy of restitution when an unjust enrichment has occurred.

Often called quantum meruit, it applies ‘[w]here one obtains a benefit which he may not justly retain. . . . The quasi-contract, or contract “implied in law,” is an obligation created by the law without regard to the intention of the parties, and is designed to restore the aggrieved party to his former position by return of the thing or its equivalent in money.’ [Citation.] . . . “Quasi-contracts, unlike true contracts, . . . are obligations created by law for reasons of justice.” [Citation.]’ [Citation.]” (McBride v.

Boughton (2004) 123 Cal.App.4th 379, 388 n. 6.)

Here, the Cross-Complaint alleges circumstances showing Cross- Defendants obtained a benefit that they may not justly retain. (See Cross-Compl. ¶¶ 26, 39.)

Should Cross-Complainant desire to file an amended complaint that addresses the issues in this ruling, he shall file and serve the amended cross-complaint within 30 days of service of the notice of ruling.

Cross-Defendant Kim to give notice.

3 David TENTATIVE RULING: Vassilian, as Successor For the reasons set forth below, Defendant Anna Poladian’s Trustee of the Demurrer is SUSTAINED with 30 days leave to amend. Charles Akoboff Family Trust dated The Request for Judicial Notice is GRANTED, with the caveat that September 9, the Court does not take judicial notice of the hearsay statements 1997, as included within the filings. Amended