The Demurrer of Defendants Cynthia Stopani, Angelica Chavez, and Simplified Labor Staffing Solutions, Inc. to Plaintiff CitiStaff Solutions, Inc.’s First Amended Complaint (“FAC”) is overruled.
A demurrer presents an issue of law regarding the sufficiency of the allegations set forth in the complaint. (Lambert v. Carneghi (2008) 158 Cal.App.4th 1120, 1126.) The challenge is limited to the “four corners” of the pleading (which includes exhibits attached and incorporated therein) or from matters outside the pleading which are judicially noticeable under Evidence Code sections 451 or 452. Although California courts take a liberal view of inartfully drawn complaints, 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.)
First Cause of Action for Breach of Contract
Plaintiff sets forth facts alleging the basic elements of the first cause of action for breach of contract, including that Stopani and Chavez signed written agreements on 10/22/12 (attached to the FAC), where they agreed among other things, not to disclose confidential and proprietary business information, and not to solicit CitiStaff’s customers or employees. (FAC, ¶25.) Plaintiff alleges Defendants breached the agreements, resulting in damage by the loss of its accounts. (FAC, ¶ 33.) These allegations are sufficient to survive a demurrer.
Second Cause of Action for Fraud
The second cause of action for fraud is also sufficiently pled. The elements of fraud are “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) Allegations of fraud must be alleged with specificity. (See Roberts v. Ball, Hunt, Hart, Brown & Baerwitz (1976) 57 Cal.App.3d 104, 109-110.) Plaintiff claims that during their employment, Stopani and Chavez began setting up their competing business, a material fact which they concealed. (FAC, ¶¶ 35-37.) Also, Stopani and Chavez stated to CitiStaff that they were using resources for the benefit of CitiStaff which turned out to be false. (FAC, ¶ 37.) Earlier in the FAC, however, Plaintiff identifies the “resources” as “cell phones and computers” used “to conduct a competing business.” (FAC, ¶ 18.) CitiStaff justifiably relied on Defendants’ representations to its financial detriment. (FAC, ¶ 37.) Plaintiff’s allegations contain the requisite specificity to allege fraud.
Fourth Cause of Action for Intentional Interference with Prospective Business Advantage
As for the fourth cause of action for intentional interference with prospective business advantage, Plaintiff claims that it had relationships with prospective clients/third parties that entailed a probability of future economic benefits to it, that Defendants were aware of that, and that Defendants “took improper actions that were intended to and did disrupt the probably economic benefits and business advantage to CitiStaff . . .” (FAC, ¶¶ 51-53.) Plaintiff also claims that Defendants’ conduct “was independently wrongful,” and it “constituted a breach of their fiduciary duties to CitiStaff.” (FAC, ¶ 54.)
To state a claim under this tort, Plaintiff must allege facts to support “that the interference was wrongful, independent of its interfering character.” (Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, 944.) An act “is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.” (Ibid.) Plaintiff alleges these facts in paragraphs 15-18 of the FAC, which include Defendants’ creation of a competing company, solicitation of CitiStaff’s customers and employees, and sabotage of CitiStaff’s relationship with customers.
Sixth Cause of Action for Unfair Business Practices and Seventh Cause of Action for Injunctive Relief
Plaintiff sufficiently alleges its sixth cause of action for unfair business practices and seventh cause of action for injunctive relief. In the FAC, Plaintiff claims that Defendants’ breach of contract and intentional interference with CitiStaff’s economic relations and prospective business advantage form the basis of its claim for unfair business practices. (FAC, ¶ 65.) Business and Professions Code section 17200 prohibits “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.” An unfair business practice is defined as a practice that “offends an established public policy or…is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.” (Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 81.)
Also, Plaintiff alleges that its harm is “imminent, irreparable and in progress,” and stems from Defendants’ misappropriation of its trade secrets. (FAC, ¶ 71.) On this basis, Plaintiff claims that it is entitled to injunctive relief, as there is no adequate remedy at law. (FAC, ¶ 73.) To obtain an injunction, Plaintiff must prove “(1) the elements of a cause of action involving the wrongful act sought to be enjoined and (2) the grounds for equitable relief, such as, inadequacy of the remedy at law.” (City of South Pasadena v. Department of Transportation (1994) 29 Cal.App.4th 1280, 1293.) Accordingly, the Demurrer is overruled.
Defendants are ordered to electronically file an answer to the FAC, within 15 days of the notice of ruling.
Plaintiff shall give notice of the ruling.