Rome, et al. v. Vasquez, et al.
30-2015-00784461

Cross-defendants Sonny Ciro and Gideon Rome’s demurrer to the second cause of action for negligent misrepresentation is sustained with 15 days leave to amend.  Cross-defendants’ demurrer as to the third, fourth, and fifth causes of action are sustained without leave to amend.

Second Cause of Action for Negligent Misrepresentation

Cross-complainant Raul Vasquez has alleged cross-defendants made false promises to perform in the future, which cannot support a claim for negligent misrepresentation as a matter of law. But “[a] representation generally is not actionable unless it is about ‘past or existing facts.’  Although a false promise to perform in the future can support an intentional misrepresentation claim, it does not support a claim for negligent misrepresentation.”  (Stockton Mortgage, Inc. v. Tope (2014) 233 Cal.App.4th 437, 458.)  Accordingly, the demurrer as to the second cause of action is sustained with 15 days leave to amend.

Third, Fourth, and Fifth Causes of Action

The demurrer to the third cause of action (conversion), fourth cause of action (unjust enrichment), and fifth cause of action (monies had and received) is sustained without leave to amend.

“An action is deemed derivative if the gravamen of the complaint is injury to the corporation, or to the whole body of its stock and property without any severance or distribution among individual holders, or it seeks to recover assets for the corporation or to prevent the dissipation of its assets.”  (Grosset v. Wenaas (2008) 42 Cal.4th 1100, 1108 [internal quotes and citations omitted].)  “If the injury is not incidental to an injury to the corporation, an individual cause of action exists.”  (Jones v. H. F. Ahmanson & Co. (1969) 1 Cal.3d 93, 107.)

Conversion is the wrongful exercise of dominion over the personal property of another. (Farmers Ins, Exchange v. Zerin (1997) 53 Cal.App.4th 445, 451-452.) A conversion claim has the following three elements: (1) claimant’s ownership or right to possession of the property; (2) defendant’s conversion by a wrongful act or disposition of property rights; and (3) claimant’s damages. (Burlesci v. Petersen(1998) 68 Cal.App.4th 1062, 1066.) “It is not necessary that there be a manual taking of the property; it is only necessary to show an assumption of control or ownership over the property, or that the alleged converter has applied the property to his own use.” (Oakdale Village Group v. Fong (1996) 43 Cal.App.4th 539, 544.) To establish a viable cause of action for conversion, plaintiff must establish an actual inference with his or her ownership or right to possession of property. (Del Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 610.)

Whether treated as a cause of action or mere remedy, the elements of unjust enrichment are (1) the receipt of a benefit and (2) the unjust retention of the benefit (3) at the expense of another.  (Peterson v. Cellco Partnership (2008) 164 Cal.App.4th 1583, 1593.)

Furthermore, a common count (such as monies had and received) is not a specific cause of action.  Rather, it is a simplified form of pleading normally used to aver the existence of various forms of monetary indebtedness, including that arising from an alleged duty to make restitution under an assumpsit theory.  (See Zumbrun v. University of Southern California (1972) 25 Cal.App.3d 1, 14-15.)  When 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 counts is demurrable if the cause of action is demurrable.  (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 459-460.)

Here, Cross-complainant Vasquez lacks standing to sue as he was not the owner or possessor of the money allegedly embezzled or stolen by Cross-Defendants. To the extent he seeks money owed on the loan to RASC, Vasquez’s causes of action are not for conversion, unjust enrichment, or monies had and received and are not against the Cross-Defendants.  To the extent that there are claims for conversion, unjust enrichment, or monies had and received, they would belong to RASC.  The allegations of the cross-complaint clearly identify the money was owned by the corporation RASC, who suffered the loss and the expense. The corporation received the money invested by Vasquez, making him a shareholder of RASC. Vasquez has not brought a shareholder derivative action.  Accordingly the demurrer as to the third, fourth, and fifth causes of action is sustained without leave to amend.

The motion to strike is moot.

Cross-defendants shall give notice of the ruling.