ALAN ASAWA VS. ALL AMERICAN DESIGN

Tentative Rulings

Case Number: ****6597 Hearing Date: September 22, 2022 Dept: SEC

ASAWA v. ALL AMERICAN DESIGN

CASE NO.: ****6597

HEARING: 09/22/22

#7

TENTATIVE ORDER

Plaintiff’s Motion for Leave to File a Fifth Amended Complaint is DENIED.

Opposing Party to give Notice.

California recognizes “a general rule of…liberal allowance of amendments…” (Nestle v. City of Santa Monica (1972) 6 Cal.3d 920, 939.) It has also long been recognized that “even if the proposed legal theory is a novel one, ‘the preferable practice would be to permit the amendment and allow the parties to test its legal sufficiency by demurrer, motion for judgment on the pleadings or other appropriate proceedings.” (Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048.) In light of great liberality employed when ruling on a motion for leave to amend, the court will not normally consider the validity of the proposed amended pleading since grounds for demurrer or motion to strike are premature. Thus, absent prejudice to the opposing party, courts are bound to apply a policy of great liberality in permitting amendments to the complaint “at any stage of the proceedings, up to and including trial.” (emphasis added.) (Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 761.)

Notwithstanding the liberality commonly associated with granting leave to amend, Plaintiff’s Motion is DENIED. This action was field on September 26, 2017. Trial is currently set for November 3, 2022. Now, almost five years later—Plaintiff seeks to add facts to support the fraud claim; add a cause of action for elder abuse; and rejoin a previously dismissed defendant. Plaintiff sates that these amendments could not have been brought sooner because the facts were not discovered until after the most recent MSC was held.

The changes to the operative pleading are significant, and the five-year statute is looming. The Court finds that Defendants would be severely prejudiced by granting leave to amend at this stage in this the litigation—discovery and the status of the pleadings would need to be reopened.

The Motion is DENIED.

Case Number: ****6597    Hearing Date: April 29, 2021    Dept: C

ASAWA v. ALL AMERICAN DESIGN

CASE NO.:  ****6597

HEARING:  04/29/21

#8

TENTATIVE ORDER

Defendant AVRAHAM SHAUL’s Demurrer to Plaintiffs’ Third Amended Complaint is SUSTAINED with 10 days leave to amend in part, and SUSTAINED without leave to amend in part.

Moving Party to give notice.

This action for fraud was filed by Plaintiffs ESTATE OF VICTOR ASAWA; and THE VICTOR AND KAZUKO FAMILY TRUST, DATED DECEMBER 12, 1997 on September 26, 2017. On September 15, 2020, the operative Third Amended Complaint (“TAC”) was filed. Plaintiffs allege the following facts, “In or around May, June, and July of 2016, Defendants contacted the then-Trustee for Plaintiff ESTATE OF VICTOR ASAWA and promised that it (the trust) would receive rebates and tax incentives due to the Home Energy Renovation Opportunity (‘HERO’) program, if Plaintiffs hired Defendants to install roofing, solar, and heating improvements for long term economic purposes for their home located at 15334 Goodhue St., Whittier, California 90604.” (TAC ¶12.) “Defendant failed to tell Plaintiffs about the eligibility, consequences, or ownership of the installed products by private lenders that governed the HERO and Property Assessed Clean Energy (‘PACE’) loan programs. Defendants also did not tell Plaintiffs about the properly liens on their property resulting from the HERO and PACE programs.” (TAC ¶14.) :The rebate and tax incentives of the HERO and PACE programs were part of a 20-year loan that were considerably more complicated than Defendants had represented to Plaintiffs. The products that Defendants installed cost Plaintiffs approximately $700 a month rather than the $200 Defendants initially represented for the 20-year HERO loan. Plaintiffs were thereby required to pay $120,000—a figure that is computed by taking the difference between the monthly cost Plaintiffs pay minus what he or she was initially sold ($700 - $200 =$500), multiped by 12 months, then multiplied by 20 years.” (TAX ¶16.) Plaintiffs allege that Defendants were knowingly engaged in a fraudulent scheme.

Plaintiffs assert the following causes of action: (1) Fraud; (2) Intentional Interference with Prospective Economic Advantage; (3) Breach of Contract; (4) Breach of Implied Covenant of Good Faith and Fair Dealing.

Defendant AVRAHAM SHAUL (“Defendant”) generally demurs to each cause of action.

First Cause of Action – Fraud

The elements of a cause of action for intentional fraud are 1) misrepresentation (false representation, concealment, or nondisclosure); 2) knowledge of falsity (scienter); 3) intent to defraud or induce reliance; 4) justifiable reliance; and 5) damages. (See Cal. Civ. Code ;1709.)

Fraud actions are subject to strict requirements of particularity in pleading. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216.) Fraud must be pleaded with specificity rather than with general and conclusory allegations. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) The specificity requirement means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made, and, in the case of a corporate defendant, the plaintiff must allege the names of the persons who made the representations, their authority to speak on behalf of the corporation, to whom they spoke, what they said or wrote, and when the representation was made. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

Defendant argues that fraud is inadequately alleged as to him, in his individual capacity. The Court agrees. As alleged, it is unclear what representations (if any) Defendant Shaul made. Plaintiffs fail to meet the heightened pleading standard with respect to fraud. The demurrer to the first cause of action is SUSTAINED with 10 days leave to amend.

Second Cause of Action – Intentional Interference with Prospective Economic Advantage

To prevail on a cause of action for intentional interference with prospective economic advantage, a plaintiff must plead: (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) the defendant’s intentional acts designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the defendant’s acts. (Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1152, fn. 6.) A plaintiff that chooses to bring a claim for interference with prospective economic advantage has a more rigorous pleading burden since it must show that the defendant’s conduct was independently wrongful. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134; Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 393.)

The demurrer to the second cause of action is SUSTAINED with 10 days leave to amend. Plaintiffs do not allege the existence of any economic relationship between Plaintiffs and a third party.

Third Cause of Action – Breach of Contract

Whether it is written, oral, or implied, the elements of a cause of action for breach of contract are as follows: (1) the existence of a contract; (2) a plaintiff’s performance or excused non-performance; (3) a defendant’s breach; and (4) resulting damage to a plaintiff. (Reichert v. General Ins. Co. (1968) 68 Cal.2d 822, 830.) “If an action is based on a breach of written contract, the terms must be set forth verbatim in the body of the complaint or a copy of the contract must be attached and incorporated by reference.” (Id. at 459.) Alternatively, if the claim is based on a written contract then “a plaintiff may plead the legal effect of the contract rather than its precise language.” (Construction Protective Services, Inc. v. TIG Specialty Ins. Co., (2002) 29 Cal.4th 189, 198-199.)

The demurrer to the third cause of action is SUSTAINED with 10 days leave to amend. Plaintiffs fail to allege the existence of a contractual relationship between Plaintiffs and the individual demurring defendant herein.

Fourth Cause of Action – Breach of Implied Covenant of Good Faith and fair Dealing

The implied covenant of good faith and fair dealing is inherent in every agreement. (April Enterprises v. KTTV (1983) 149 Cal.App.3d 805, 816.) There can be no breach of the implied covenant of good faith and fair dealing in the absence of an express contract: “the implied covenant is limited to assuring compliance with the express terms of the contract, and cannot be extended to create obligations not contemplated in the contract.” (Racine v. Laramie, Ltd. v. Department of Parks & Recreation (1992) 11 Cal.App.4th 1026, 1032.) Consequently, Plaintiffs cannot state a viable cause of action for breach of the implied covenant of good faith and fair dealing against Defendant Shaul because no express contract between the parties has been alleged. In Opposition, Plaintiffs state that “Plaintiffs do not oppose Defendants’ demurrer to the Fourth Cause of Action….” Therefore, the demurrer to the fourth cause of action is SUSTAINED without leave to amend.

Leave to Amend

The Court grants 10 days leave to amend with respect to Plaintiff’s first through third causes of action. Although the operative pleading is the Third Amended Complaint, the instant Demurrer is the first instance in which Plaintiffs’ allegations have been tested in court. The First, Second, and Third Amended Complaints were all filed within the statutory time limit to file an amended pleading without leave of court, via Motion for Leave to Amend, and by stipulation of the parties.

Case Number: ****6597    Hearing Date: December 17, 2019    Dept: SEC

ASAWA, et al. v. ALL AMERICAN DESIGN, et al.

CASE NO.: ****6597

JUDGE: OLIVIA ROSALES

HEARING: 12/17/19

#7

TENTATIVE ORDER

Defendant Shaul’s demurrer to Plaintiff’s Second Amended Complaint is taken OFF-CALENDAR.

The court is in receipt of Attorney McKechnie’s Declaration, notifying the court that the parties have stipulated to allow Plaintiff to file a Third Amended Complaint to address the deficiencies in the Second Amended Complaint. While the court’s previous ruling did not require a declaration if the parties were able to resolve the issues, the court appreciates counsel’s advance notice.

Case Number: ****6597    Hearing Date: November 19, 2019    Dept: SEC

ASAWA, et al. v. ALL AMERICAN DESIGN, et al.

CASE NO.: ****6597

HEARING: 9/19/19

JUDGE: MARGARET M. BERNAL

#9

TENTATIVE ORDER

Defendant Shaul’s demurrer to Plaintiff’s Second Amended Complaint is CONTINUED to Tuesday, 12/17/19 at 1:30 p.m. in Dept. SE-C. 

Defendant is ORDERED to comply with CCP ;; 430.41 and 433.5. If, after complying with CCP ; 430.41, court intervention is needed, the parties may appear and argue the merits on the continued hearing date. If the parties are unable to informally resolve the issues raised in the instant demurrer, then the Demurring Defendant must submit a signed declaration indicating such efforts pursuant to CCP ;430.41. The declaration must be filed no later than 3:00 p.m. on Tuesday, 12/10/19. (NO FAX FILING.) 

CCP ;; 430.41(a) states that, before filing a demurrer, the demurring or moving party must engage in a specified meet and confer process with the party who filed the pleading at issue for the purpose of determining whether an agreement can be reached as to the filing of an amended pleading that would resolve the objections to be raised in the demurrer/motion to strike. The demurring or moving party “shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that resolves the objections to be raised… If an amended [pleading] is filed, the responding party shall meet and confer again with the party who filed the amended pleading before a demurrer to the amended pleading.” (CCP ;;430.41(a).) A declaration setting forth such meet and confer efforts must accompany the demurrer. (CCP ;; 430.41(a)(3).) 

The Court finds that the Defendant failed to satisfy his meet and confer obligations pursuant to CCP 430.41. Attorney Mouzis declares that he “directed a letter” to Plaintiff’s counsel, which was not an attempt at meeting and conferring “in person or by telephone.” The court finds that demurring party failed to engage in meaningful meet and confer efforts. The provisions of the Code are mandatory; compliance is not optional