Demurrer (Judge Spanos)


CASE NAME: WANG? vs.? PTG CALL CENTER, LP

HEARING ON DEMURRER TO 1ST AMENDED COMPLAINT OF WANG

FILED BY ELLEN LAM, ALEXANDER LAM

* TENTATIVE RULING: *

Defendants PTG Call Center, L.P., Global Real Estate Mart, Yau Jun Global Investment, Paul Lam, Ellen Lam and Alexander Lam?s general demurrer to each cause of action within the Verified First Amended Complaint is sustained with leave to amend. (Cal. Code Civ. Proc., section 430.10, subd. (e). See also, Cal. Code Civ. Proc., section 425.10, subd.?(a)(1).)

In reviewing the sufficiency of a pleading, the Court gives the Complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded, but does not assume the truth of contentions, deductions or conclusions of law. (Aubry v. Tri?City Hospital Dist. (1992) 2 Cal.4th 962, 966?967.)

1st cause of action for breach of contract and 2nd cause of action for? ?specific performance. A cause of action for damages for breach of contract is comprised of the following elements: (1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to plaintiff. (Reichert v. General Ins. Co. (1968) 68 Cal.2d 822, 830.) Cal Corp Code ? 15910.01(b) requires Plaintiff to plead an ?injury that is not solely the result of an injury suffered or threatened to be suffered by the limited partnership.? Plaintiff has not sufficiently alleged an injury distinct from that of an injury to PTG. Plaintiff is given leave to amend to allege such an injury, if she can do so in good faith.

Any claim for specific performance must be tied to a breach of contract claim, and as above, at present the 1st cause of action is insufficiently pled.

Specific performance is available only where there is no adequate remedy at law. (Wilkison v. Wiederkehr (2002) 101 Cal.App.4th 822, 833.)

In their Reply, the Defendants cite to Civil Code section 3390, which provides: “The following obligations cannot be specifically enforced: 1. An obligation to render personal service; 2. An obligation to employ another in personal service.” Defendants also cite to Barndt v. County of L.A. 211 Cal.App.3d (1989) 397, 403-404.? The Court agrees that a contract to perform personal services cannot be specifically enforced, regardless of which party seeks enforcement. (See also, Poultry Producers etc. v. Barlow (1922) 189 Cal. 278, 288; 5A Corbin, Contracts, ? 1204, p. 398; Dobbs, Remedies, ? 12.25, pp. 929-931.) However, the contract at issue does not call for the personal services of any particular person. Thus, Civil Code section 3390 is inapplicable. (See, Herman v. County of L.A. (2002)98 Cal. App. 4th 484, 489 [In any event, we conclude the common law rule codified in Civil Code section 3390, subdivision 2 is not applicable to the contract at issue here. The contract does not call for the personal services of any particular person.])

 

3rd cause of action to set aside intentionally fraudulent transfer, 4th cause of action to set aside deemed fraudulent transfer, and 7th cause of action for appointment of receiver. As to the 3rd and 4th causes of action, Plaintiff has not alleged a breach or obligation that would make Plaintiff a creditor prior to the first transfer from PTG. It is possible that the first transfer for $662,500 created claims for which Plaintiff could be considered a creditor. However, it is not clear if there was more than one transfer of funds out of PTG. For example, FAC ?? 28(c) and (d) do not specify if these funds are part of the $662,500 previously transferred from PTG or if these are different transfers from PTG. Therefore, the demurer is sustained because Plaintiff has not alleged her claims based on fraudulent transfer. Plaintiff is given leave to amend to allege facts showing a fraudulent transfer, if she can do so in good faith.

All the parties agree that the claim for appointment of a receiver is based on the fraudulent transfer claims. Since those claims are sustained with leave to amend, this claim is also sustained with leave to amend.

 

5th cause of action for conspiracy. Although the cause of action is pled against ?All Defendants?, there are no allegations that Global Real Estate and Yau Jun were involved in the conspiracy. The demurrer is sustained with leave to amend as to Global Real Estate and Yau Jun for Plaintiff to allege facts showing a conspiracy involving these defendants, if she can do so in good faith.

As to Paul, Ellen and Alexander Lam, the Plaintiff has sufficiently alleged that these defendants conspired to defraud Plaintiff. (See, FAC ?? 73 & 74.) However, conspiracy is not an independent tort, but a legal doctrine to impose liability based on an underlining claim. (See e.g., Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510-511.) All other claims against Paul, Ellen and Alexander Lam have been sustained with leave to amend and therefore this claim is sustained with leave to amend for Plaintiff to sufficiently allege a tort upon which this claim can be based.

 

6th cause of action for conversion. Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion are the plaintiff’s ownership or right to possession of the property at the time of the conversion; the defendant’s conversion by a wrongful act or disposition of property rights; and damages. 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, 543-544.)Conversion is also a strict liability tort; the foundation for the action for conversion rests neither in the knowledge nor the intent of the defendant, instead, the tort consists in the breach of what may be called an absolute duty; the act itself is unlawful and redressible as a tort, therefore, questions of good faith, lack of knowledge and motive are ordinarily immaterial. (Oakdale Village Group v. Fong, supra, 43 Cal.App.4th at 544.)

In order to state a claim for conversion, Plaintiff must allege a right to possession of the funds. (Avidor v. Sutter?s Place, Inc. (2013) 212 Cal.App.4th 1439, 1452.) The FAC alleges that neither partner could withdraw funds without written consent of all partners. (FAC ? 17.) Currently, Plaintiff has not alleged a claim for conversion, as it appears that PTG and not Plaintiff had a right to possession of the funds. The demurrer is sustained with leave to amend for Plaintiff to state facts showing she had a right to possession of the funds, if she can do so in good faith.

Finally, money can be the subject of an action for conversion if a specific sum capable of identification is involved. (See, Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 452.)

 

8th cause of action for breach of fiduciary duty. Plaintiff has alleged that Asia Travel owed her a fiduciary duty. However, this cause of action is also pled against PTG and Paul Lam, and Plaintiff has not alleged that PTG owed her a fiduciary duty, nor has she alleged that Paul Lam owed her a fiduciary duty as an agent of Asia Travel. Therefore, the demurrer to this cause of action is sustained with leave to amend for Plaintiff to allege that PTG and Paul Lam owed her fiduciary duties, if she can do so in good faith.

 

Any amended Complaint shall be filed on or before 1:00 p.m., May 22, 2015.

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Defendants to prepare the Order.