YMPK LAW GROUP, LLP VS AMERIPRISE AUTO & HOME INSURANCE AGENCY, INC., ET AL.

Tentative Rulings

Case Number: 18STLC10811    Hearing Date: September 02, 2020    Dept: 25

HEARING DATE:    Wed., September 2, 2020 JUDGE /DEPT: Blancarte/25

CASE NAME:  YMPK Law Group v. Ameriprise Auto COMP. FILED: 08-22-18

CASE NUMBER: 18STLC10811 DISC. C/O: 08-29-20

NOTICE:   OK MOTION C/O: 09-13-20

PROCEEDINGS:     DEFENDANT’S DEMURRER AND MOTION TO STRIKE TO PLAINTIFF’S COMPLAINT 

MOVING PARTY:   Defendant, Ameriprise Auto

RESP. PARTY: Plaintiff, YMPK Law Group

DEMURRER & MOTION TO STRIKE

(CCP § 430.10, et seq. and CCP § 436 et seq.)

TENTATIVE RULING:

1. The demurrer and motion to strike of Defendant, Kuzyk Law, LLP, it TAKEN OFF CALENDAR as moot because the Plaintiff dismissed Kuzyk Law, LLP, on September 30, 2019.

2. The demurrer of Defendant, Ameriprise Auto, to the Plaintiff’s Complaint is SUSTAINED WITHOUT LEAVE TO AMEND.

3. The motion to strike of Defendant, Ameriprise Auto, is TAKEN OFF CALENDAR as moot.

SERVICE: 

[X] Proof of Service Timely Filed (CRC, rule 3.1300) OK

[X] Correct Address (CCP §§ 1013, 1013a) OK

[X] 16/21 Court Days Lapsed (CCP §§ 12c, 1005(b)) OK

OPPOSITION: Filed on October 7, 2019 [   ] Late [   ] None

REPLY: Filed on October 17, 2019 [   ] Late [   ] None

ANALYSIS:

I. Background

The Plaintiff, YMPK Law Group, LLP, filed an action for interference with the economic advantage that it expected to obtain from its clients against Defendants, Ameriprise Auto & Home Insurance Agency, Inc. (Ameriprise Auto), and Kuzky Law, LLP.  The Plaintiff had been retained by Ilka Acosta and Stella Ammirante to provide them with legal services so they could recover the for the personal injuries they suffered in a car accident case.  The other car was driven by Macy Nejati, who was insured by Defendant, Ameriprise Auto and Home Insurance Agency.

Three months after the Plaintiff was retained, it received correspondence from the Defendant, Kuzky Law, LLP, that they had been substituted out of the case.  The Defendant requested that the Plaintiff send over the client files for Ilka Acosta and Stella Ammirante.  The Plaintiff sent over the file and a notice of lien to secure the payment for the legal services it had already rendered to Ilka Acosta and Stella Ammirante.

The car accident case settled and Ameriprise Auto & Home Insurance issued a check to Kuzyk Law, LLP, without including the Plaintiff’s name on the settlement check.  The Plaintiff claims that it is owed $10,150 for its legal services. 

The Plaintiff brings the pending case to seek damages on the ground that the Defendants intentionally and negligently interfered with the Plaintiff’s economic relationship with Ilka Acosta and Stella Ammirante.

On August 15, 2019, the Defendant, Kuzky Law, LLP filed a Demurrer and Motion to Strike to Plaintiff’s Complaint.  On September 30, 2019, the Plaintiff filed a notice of dismissal with prejudice of Kuzyk Law, LLP.  As a result, this demurrer and motion to strike are moot and should be taken off calendar.

On September 17, 2019, the Defendant, Ameriprise Auto & Home Insurance, filed its own Demurrer and Motion to Strike.  The Plaintiff filed an opposition to the demurrer on October 7, 2019.  No opposition was filed for the motion to strike.  The Defendant filed a reply on October 17, 2019 and a notice of non-opposition to its motion to strike.  

The hearing was originally set for October 22, 2019.  The Court continued the hearing to February 20, 2020 because the Defendant had not provided the required meet and confer declaration.  The Court ordered that the declaration by filed no later than January 23, 2020. 

At the February 20, 2020 hearing, the Court found that the declaration had still not been filed.  The Court continued the hearing to April 15, 2020.  This hearing was then continued to August 20, 2020.

On March 25, 2020, the Defendant filed the required meet and confer declaration.

II. Legal Standard

“The primary function of a pleading is to give the other party notice so that it may prepare its

case [citation], and a defect in a pleading that otherwise properly notifies a party cannot be said to

affect substantial rights.” (Harris v. City of Santa Monica (2013) 56 Cal.4th 203, 240.)

“A demurrer tests the legal sufficiency of the factual allegations in a complaint.” (Ivanoff v. Bank of

America, N.A. (2017) 9 Cal.App.5th 719, 725.) The Court looks to whether “the complaint alleges

facts sufficient to state a cause of action or discloses a complete defense.” (Id.) The Court does not

“read passages from a complaint in isolation; in reviewing a ruling on a demurrer, we read the

complaint ‘as a whole and its parts in their context.’ [Citation.]” (West v. JPMorgan Chase Bank,

N.A. (2013) 214 Cal.App.4th 780, 804.) The Court “assume[s] the truth of the properly pleaded

factual allegations, facts that reasonably can be inferred from those expressly pleaded and matters of

which judicial notice has been taken.” (Harris, supra, 56 Cal.4th p. 240.) “The court does not,

however, assume the truth of contentions, deductions or conclusions of law. [Citation.]” (Durell v.

Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1358.)

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.)  The burden is on the complainant to show the Court that a pleading can be amended successfully. (Id.)

III. Discussion

The following addresses these issues:

1) the meet and confer defect identified by the Court at prior hearings;

2) the Defendant’s argument that the Plaintiff lacks standing on the ground that the Defendant’s search of the Secretary of State website revealed no record of the Plaintiff;

3) the Defendant’s argument that the Plaintiff provides no evidence in support of its claims, and;

4) the Plaintiff’s failure to plead that it brought a claim against its client to establish the amount of the attorney lien at issue.

a. Meet and Confer - Completed

As noted above, the Court ordered the Defendant to file the required meet and confer declaration.  The Defendant filed this declaration on March 25, 2020 and it contains facts showing that the parties attempted to resolve this dispute informally.  This complies with Code of Civil Procedure section 430.41, subdivision (a).

As a result, the Defendant’s demurrer may be considered.

b. Standing - Withdrawn

The Defendant argues first that the Plaintiff has no standing to bring these claims because its search of the Secretary of State website revealed no record of the Plaintiff.  Since the Plaintiff is a limited liability partnership, the website does not keep records of such entities.  The Defendant filed a notice on October 22, 2019 that it was withdrawing this issue. 

As a result, this offers no grounds for a demurrer.

c. Essential Elements of Claims

The Defendant then argues that the Plaintiff did not plead the essential element that an economic relationship existed with sufficient facts.  The Defendant’s arguments are based on the claim that the Plaintiff did not provide evidence of an economic relationship.  The Defendant argues that no contract has been produced, there are no emails showing that the Plaintiff was retained by the clients, and that a written contract is needed and that it cannot be unconscionable.  As noted above in Section II. Legal Standard, on a demurrer, the Court assumes the truth of the pleadings and evidence is not required.  As a result, many of the Defendant’s arguments, such as no contract has been produced, do not identify grounds for a demurrer. 

A review of the pleadings reveals the following.  The Plaintiff’s Complaint includes two causes of action for the intentional interference and the negligent interference with prospective economic advantage, i.e., the Plaintiff’s relationship with its former clients, Ilka Acosta and Stella Ammirante, when it was representing them in the motor vehicle accident.  These tort claims impose liability for improper methods of disrupting or diverting the business relationship of another which fall outside the boundaries of fair competition.” (Settimo Associates v. Environ Systems, Inc. (1993) 14 Cal.App.4th 842, 845.

These torts of interference with prospective economic advantage protects the same interest in stable economic relationships as does the tort of interference with contract, though interference with prospective advantage does not require proof of a legally binding contract.  (Paci¿cGas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126 (italics added for emphasis due to Defendant’s arguments about the need for a contract.)   The chief practical distinction between interference with contract and interference with prospective economic advantage is that a broader range of privilege to interfere is recognized when the relationship or economic advantage interfered with is only prospective.  (Id.)

The first cause of action for intentional interference with prospective economic advantage has the following elements:

1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff;

2) the defendant's knowledge of the relationship;

3) intentional acts on the part of the defendant designed to disrupt the relationship;

4) actual disruption of the relationship; and

5) economic harm to the plaintiff proximately caused by the acts of the defendant.

(Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal. 4th 1134, 1153.)

The second cause of action for negligent interference with prospective economic advantage must include the following elements: 

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 review of the pleadings reveals that the Plaintiff repeated the elements in its causes of action and pleaded the facts that establish each element by incorporating them from prior portions of the Complaint.  For example, in paragraphs 36 to 40 of the first cause of action, the Plaintiff alleged the following:

36) Plaintiff was engaged in an economic relationship with Acosta and Ammirante

that was substantially likely to result in economic benefits to Plaintiff.

37) Defendants knew of Plaintiff’s economic relationship with Acosta and Ammirante.

38) Defendants engaged in wrongful conduct through their tortious interference with

Plaintiffs contractual relationships with Acosta and Ammirante.

39) Defendants’ wrongful conduct resulted in economic harm to Plaintiff.

40) Defendant’s wrongful conduct was a substantial factor in causing Plaintiff to suffer

damages in an amount of over $10,000.00 but less than $25,000.00.

These are merely legal conclusions that identify the elements of the claim.  After reviewing the rest of the pleadings, the Court can determine that the economic relationship was the prior attorney-client relationship, that the Defendant knew of the relationship because it had received a notice of lien, and that the Defendant interfered with this relationship by not including the Plaintiff’s name on the settlement check.  Accordingly, the Plaintiff’s claim is that the Defendant interfered with the Plaintiff’s economic relationship with Ilka Acosta and Stella Ammirante by not making paying the Plaintiff on its attorney’s lien.

As a result, there are no grounds for a demurrer based on the Plaintiff’s failure to plead an essential element.  However, as discussed below, the pleadings are defective because the Plaintiff’s claim is based on interference with an attorney lien and the Plaintiff did not plead that it brought a claim against its former clients to establish the amount of the lien.

d. Need to Bring Claim against Client to Establish Amount of Attorney Lien

This case is based on the Plaintiff’s claim that it had an attorney lien based on the legal services it provided to Ilka Acosta and Stella Ammirante.  However, the Plaintiff is not suing its clients for the unpaid amount; instead, the Plaintiff is bringing a claim against the Defendant on the theory that the Defendant’s conduct interfered with its attorney lien.  California law requires that a separate claim against the clients be brought to establish the existence, amount, and enforceability of an attorney lien before bring a claim against another party based on the attorney lien.  (Mojtahedi v. Vargas (2014) 228 Cal.App.4th 974, 977-978.)

In Mojtahedi, the plaintiff was the clients' former attorney in a personal injury matter.  The fee agreement included a lien provision.  After the plaintiff was substituted out, the plaintiff informed the claims adjuster of his lien.  The plaintiff sent the defendant a log of his time and demanded $4,407 in attorney fees. When the defendant offered the plaintiff a lower amount, the plaintiff filed suit against the defendant, among others, but not his former clients.  The plaintiff brought claims for fraud, violation of Commercial Code sections 3110(d) and 3420, negligence, and tortious interference with prospective economic advantage.  The defendants made a demurrer on the ground that the plaintiff had not established the lien amount.  The trial court sustained the demurrer without leave to amend because it found that a previously discharged attorney must file an independent action against his client in order to enforce a contractual attorney fees lien.

The Court of Appeal affirmed and held that without bringing a separate action against the clients, a former attorney cannot establish “the existence, amount, and enforceability of his lien” on settlement funds.  (Id. at p. 979.) The court's reasoning focused on the significance of the plaintiff's choice not to name his former clients as a party. The court noted that the plaintiff's time log would be “useful to adjudicate the reasonable value of plaintiff's services in a separate action against the clients,” but it was insufficient to state a claim against the successor attorney. (Id. at p. 978.)  It went on to emphasize “the attorney's lien is only enforceable after the attorney adjudicates the value and validity of the lien in a separate action against his client.” (Ibid.)

As a result, the Plaintiff cannot bring the pending complaint to enforce its attorney lien until it first adjudicates the value and validity of its lien in a separate action against its former clients.  A review of the pleadings reveals no allegation that the Plaintiff has complied with this requirement.

In its opposition, the Plaintiff cited Levin v. Gulf Ins. Group (1999) 69 Cal.App.4th 1282 because it held that an insurer and the attorneys retained to defend the insureds are liable for intentional interference with the prospective economic advantage of a discharged attorney when, after receiving a notice of lien for attorney fees and costs filed in the case by the discharged attorney, they pay his former client and the latter's new attorney in settlement or in satisfaction of a judgment with knowledge of the lien.  (Id. at p. 1287-1288.)   The Plaintiff also cited Siciliano v. Fireman's Fund Ins. Co. (1976) 62 Cal.App.3d 745 and Fracasse v. Brent (1972) 6 Cal.3d 784 because Levin relied on this line of cases holding that a former attorney has a claim for the fees and costs incurred. 

A review of these cases reveals no grounds to find that they excuse the Plaintiff from the requirement identified in Mojtahei.  In Levin, the plaintiff had brought the first cause of action for intentional interference with prospective economic advantage against the insurer and a second cause of action for breach of contract against the client.  (Levin, supra, 69 Cal.App.4^th at p. 1285, fn. 3).  In Siciliano, the plaintiff also had named the former client.  (Siciliano, supra, 62 Cal.App.3d at p. 749-750).  In Fracasse, the plaintiff was suing the former client to establish the amount of the lien.  (Fracasse, 6 Cal.3d at p. 786-787).  As a result, in each of these cases, the former attorney was bringing the required claims against the client necessary to establish the value of the attorney lien.

In the pending case, the Plaintiff does not allege that he has adjudicated the value and validity of his lien in an action against his former clients, Ilka Acosta and Stella Ammirante.  As a result, the pleadings lack sufficient facts to state his two causes of action based on that attorney lien against the Defendant, Ameriprise Auto.

As noted above, leave to amend is allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.)  Here, there is no possibility that the Plaintiff can correct the defect identified by amendment.  Accordingly, the Court should sustain the demurrer without leave to amend, just as was done in Mojtahedi v. Vargas (2014) 228 Cal.App.4th 974.

The Defendant also filed a motion to strike the claim for punitive damages.  Based on the recommendation that the demurrer be sustained without leave to amend, the Defendant’s motion to strike is moot because the portions it sought to strike are no longer in the pleadings.  Accordingly, the motion to strike should be taken off calendar as moot.

IV. Conclusion & Order

For the foregoing reasons:

1. The demurrer and motion to strike of Defendant, Kuzyk Law, LLP, it TAKEN OFF    CALENDAR as moot because the Plaintiff dismissed Kuzyk Law, LLP, on September 30, 2019.

2. The demurrer of Defendant, Ameriprise Auto, to the Plaintiff’s Complaint is SUSTAINED WITHOUT LEAVE TO AMEND.

3. The motion to strike of Defendant, Ameriprise Auto, is TAKEN OFF CALENDAR as moot.

Moving party is ordered to give notice.

Case Number: 18STLC10811    Hearing Date: February 20, 2020    Dept: 25

DEMURRER

TENTATIVE RULING:

Defendant’s Demurrer is PLACED OFF CALENDAR.

ANALYSIS:

1. Background & Discussion

On August 22, 2018, Plaintiff YMPK Law Group (“Plaintiff”) filed an action for intentional interference with prospective economic advantage and negligent interference with prospective economic advantage against Defendants Ameriprise Auto & Home Insurance Agency, Inc. (“Ameriprise”) and Kuzyk Law, LLP (“Kuzyk”). Defendant Kuzyk was dismissed from the action on September 30, 2019.

On September 17, 2019, Defendant Ameriprise filed the instant Demurrer to Plaintiff’s Entire Complaint (the “Demurrer”). On October 7, 2019, Plaintiff filed an Opposition and on October 17, 2019, Ameriprise filed a Reply.

On October 22, 2019, the Court continued the hearing on the Demurrer because Ameriprise failed to include a meet and confer declaration with its Motion as required by Code of Civil Procedure section 430.41. (10/22/19 Minute Order.) Ameriprise was ordered to meet and confer with Plaintiff and file declaration attesting to such efforts no later than January 23, 2019. (Id.)

To date, Ameriprise has not filed the requested declaration. As such, the Demurrer is PLACED OFF CALENDAR.

1. Conclusion & Order

For the foregoing reasons, Defendant’s Demurrer is PLACED OFF CALENDAR.

Moving party is ordered to give notice.