Defendant/Cross-Complainant Truinject Medical Corp. (“Truinject”) and Defendant Gabrielle Rios (collectively, “Defendants”) move for judgment on the pleadings with respect to the three causes of action in the First Amended Complaint (“FAC”) filed by Plaintiff/cross-defendant James J. Peterson (“Plaintiff”). The motion is denied.
The Court declines to consider the new evidence Defendants submit in support of their reply. (Code Civ. Proc., § 438, subd. (d); Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537-1538 [“The general rule of motion practice . . . is that new evidence is not permitted with reply papers . . . ‘[T]he inclusion of additional evidentiary matter with the reply should only be allowed in the exceptional case . . . ’ and if permitted, the other party should be given the opportunity to respond.”]; see Burnett v. Chimney Sweep (2004) 123 Cal.App.4th 1057, 1063.) The newly submitted evidence was lodged conditionally under seal pursuant to California Rules of Court, Rule 2.551(b)(3) and pursuant to paragraph 12.b of the Protective Order. (See ROA 127.)
Requests for Judicial Notice
Defendants’ request for judicial notice of a Minute Order entered on 10/17/2017 in Truinject Medical Corp. v. Saritasa, LLC, case number 30-2017-00907629, is denied. (Evid. Code, § 452, subd. (d); Crab Addison, Inc. v. Superior Court (2008) 169 Cal.App.4th 958, 963 [request for judicial notice may be properly denied because trial court ruling has no precedential value]; Steed v. Department of Consumer Affairs (2012) 204 Cal.App.4th 112, 120 [“Judicial notice is properly taken of the existence of a factual finding in another proceeding, but not of the truth of that finding.”].)
Plaintiff’s request for judicial notice of an unverified cross-complaint filed in Truinject Medical Corp. v. Saritasa, LLC, case number 30-2017-00907629, is also denied. (Mangini v. R. J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1063.)
A defendant may move for a judgment on the pleadings on the ground that the complaint does not state facts sufficient to constitute a cause of action against that defendant. (Code Civ. Proc., § 438, subd. (c)(1)(B).) The grounds for a motion for judgment on the pleadings “shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice. Where the motion is based on a matter of which the court may take judicial notice pursuant to Section 452 or 453 of the Evidence Code, the matter shall be specified in the notice of motion, or in the supporting points and authorities, except as the court may otherwise permit.” (Code Civ. Proc., § 438, subd. (d); see, Burnett v. Chimney Sweep (2004) 123 Cal.App.4th 1057, 1063 [subject to certain exceptions, extrinsic evidence should not be considered in a motion for judgment on the pleadings].)
First Cause of Action for Breach of Contract
The elements for a cause of action for breach of contract are “the existence of the contract, performance by the plaintiff or excuse for nonperformance, breach by the defendant and damages.” (First Commercial Mortgage Co. v. Reece (2001) 89 Cal.App.4th 731, 745.)
Defendants request the Court consider the documents attached to Defendants’ counsel’s declaration, which purportedly show a notice requirement before bringing this action. However, consideration of the requested documents is improper for purposes of this motion for judgment on the pleadings. (Code Civ. Proc., § 438, subd. (d); see, Burnett v. Chimney Sweep (2004) 123 Cal.App.4th 1057, 1063 [Subject to certain exceptions, extrinsic evidence should not be considered in a motion for judgment on the pleadings.].)
Courts may consider documents incorporated by reference. (See, Columbia Casualty Co. v. Northwestern Nat. Ins. Co. (1991) 231 Cal.App.3d 457, 469.) “Any allegations in the complaint which are inconsistent with facts set out in an unambiguous written instrument, incorporated by reference, may be stricken.” (Fundin v. Chicago Pneumatic Tool Co. (1984) 152 Cal.App.3d 951, 955.) However, a motion for judgment on the pleadings “can be granted only if the instrument incorporated by reference conclusively negates the express allegation in the pleading, and except in the extraordinary case, conclusive negation is unlikely because of the inevitable prospect that parol evidence may lead to an interpretation of the contract consistent with the pleading’s express allegation.” (Columbia Casualty Co. v. Northwestern Nat. Ins. Co., supra, 231 Cal.App.3d at p. 470.)
Although the FAC alleged some terms of the two notes at issue, it did not include copies of those notes as exhibits to the FAC. In addition, Plaintiff contends the documents are not genuine. (Diotalevi Decl., at ¶ 3.) The Court declines to consider Defendants’ extrinsic evidence in ruling on this motion.
The FAC alleged sufficient facts to state a cause of action for breach of contract. (FAC, at ¶¶ 4-5, 27, 29, 30, 34, 37-48, and 50-56.) Accordingly, the motion as to the first cause of action is denied.
Second Cause of Action for Fraud
Plaintiff appears to be alleging fraud based on intentional misrepresentations. (FAC, at ¶ 61.) “The elements of fraud, which give rise to the tort action for deceit, 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.) The essential elements for intentional misrepresentation are (1) a misrepresentation, (2) knowledge of falsity, (3) intent to induce reliance, (4) actual and justifiable reliance, and (5) resulting damage. (Chapman v. Skype Inc. (2013) 220 Cal.App.4th 217, 230-231.)
Every element of fraud must be pled with specificity. The particularity requirement for fraud requires the pleading of facts showing how, when, where, to whom, and by what means the representations were made. (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.) This is to provide the defendant with notice and to give the court enough information to assess whether there is a foundation for the charge of fraud. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216.) The requirement of specificity in a fraud action against a corporation requires the plaintiff to allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.) Nonetheless, “[l]ess specificity is required when it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy.” (Committee on Children’s Television, Inc. v. General Foods Corp., supra, 35 Cal.3d at p. 216 [citations omitted.)
“The maker of a fraudulent misrepresentation is subject to liability for pecuniary loss to another who acts in justifiable reliance upon it if the misrepresentation, although not made directly to the other, is made to a third person and the maker intends or has reason to expect that its terms will be repeated or its substance communicated to the other, and that it will influence his conduct in the transaction or type of transactions involved.” (Hasso v. Hapke (2014) 227 Cal.App.4th 107, 130.)
Plaintiff alleged sufficient facts with the required specificity to state this cause of action. (FAC, at ¶¶ 1, 3-8, 12, 21-29, 58, and 61-63.) Accordingly, the motion as to the second cause of action is denied.
Third Cause of Action for Securities Fraud
“It is unlawful for any person to offer or sell a security in this state, or to buy or offer to buy a security in this state, by means of any written or oral communication that includes an untrue statement of a material fact or omits to state a material fact necessary to make the statements made, in the light of the circumstances under which the statements were made, not misleading.” (Corp. Code, § 25401.)
To state a cause of action under section 25401, a plaintiff must allege “there was a sale or purchase of stock in California by fraudulent untrue statements or by omitting material facts that would by omission make the statements misleading.” (Hardisty v. Moore (S.D. Cal. 2014) 6 F.Supp.3d 1044, 1064.)
Plaintiff’s FAC alleged sufficient facts to state this cause of action. (FAC, at ¶¶ 1, 3-8, 9-11, 12, 20-30, 61-63, 65, and 68-70.) Accordingly, the motion as to the third cause of action is denied.