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Law Office of __________ and Associates ATTY NAME ADDRESS Los Angeles, CA _____ T: F: E: Attorney for Defendant ************** SUPERIOR COURT OF CALIFORNIA

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FOR THE COUNTY OF LOS ANGELES CENTRAL COURT UNLIMITED JURISDICTION ) ) ) ) ) *************;*************;********** ) ) **;********* inclusive, ) ) Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ************************ Plaintiffs, vs. Case No.: BC ******** [Assigned For All Purposes To The Honourable *********, Department **] REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFFS COMPLAINT Complaint Filed: ******* Date: **** **, 2011 Time: 8:30 AM

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFFS COMPLAINT

Defendant *********** (hereinafter ABCD) submits the following Memorandum of Points and Authorities in support of their Reply to the Opposition to the Demurrer to Plaintiffs
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Complaint. FACTS 1) In their complaint plaintiffs ***********aka ***********aka ***********and *********** (heretoforward Plaintiffs) exhibit they provided Defendant

***********a cheque in the amount of $000,000.00, dated September *th, 2007. (see, plaintiffs complaint exhibit 2) Complaint page 5 lines *** of Paragraph **states that this loan was pursuant to written promissory note signed by defendant ********* 2) In Plaintiffs complaint, Page *, Lines *-**** of paragraph 32, they allege that on or about October **, 2007 the oral agreement was secured by a written Straight Note Secured by Deed of Trust in the sum of Two Hundred Thousand Dollars ($200,000.00) (see plaintiffs complaint exhibit 3) Absent from Plaintiffs complaint is evidence stating the sum of $200,000.00 was tendered by Plaintiff to Defendants, nor is it alleged in plaintiffs complaint that $200,000.00 was ever tendered. Plaintiffs complaint only alleges that defendants promised to repay the sum of $200,000.00 received from plaintiff *********** Page * lines 14 of paragraph 32, as additional consideration because, as plaintiff alleges, Defendants, [named in the third cause of action which excludes Defendant *********** ABCD] and each of them, failed to repay the promised sum along with the interest, their previous agreement was again made secure through an additional written Straight Note Secured by Deed of Trust in the sum of One hundred Ten Thousand Dollars ($110,000.00) whereby defendant

***********on behalf of defendants ***********, LLC, *********** and Does 1 to 100, inclusive, and each of them, promised to repay the sum of $200,000.00. (Page* Lines 18-24 Paragraph 33). 3) Plaintiffs complaint Page **, Line 3, Paragraph 74 states that on or about October, 2007 defendant loan broker *********** ABCD falsely and fraudulently and with malicious intent to defraud and deceive plaintiffs, and with
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the specific intent to induce plaintiffs to enter into the loan of $200,000.00, orally represented and promised plaintiffs that Your $200,000.00 loan will be paid off within three months [emphasis added] because I will obtain bank loans secured by the two hotels as collateral. 4) The $200,000.00 loan at which is Plaintiffs makes an inducement claim in the Ninth Cause of action against Defendant *********** ABCD was executed on October 17, 2007 (see complaint Exhibit 1) 5) Plaintiffs only include defendant *********** ABCD within the Ninth Cause of Action.

DISCUSSION Rather than setting forth logical/straight forward grounds for the ninth cause of action, Plaintiff concludes against the fact that complaint is be time barred. Contrary to Plaintiffs assertion, the facts disclosed within the complaint demonstrate on its face that the time at which the statute runs begins when knowledge of facts sufficient to make a reasonably prudent person suspicious of fraud, thus putting him on inquiry is established. Additionally, Despite Plaintiffs walk

through the allegations to establish that all elements of fraud have been pled, Plaintiff assertions remain deficient in directly and specifically establishing the elements necessary to state that their cause of action for fraud and deceit based on promissory fraud. Further, Plaintiff has concocted a nonsensical theory alleging a conspiracy among Defendants, without asserting any facts suggesting there was privity among *********** (***********)***********,*********** LLC, ***********, *********** ABCD, and *********** and has not addressed Plaintiffs demurrer stating that plaintiff fails to lay the predicate for civil conspiracy/joint and several liability.

1.

PLAINTIFFS NINTH CAUSE OF ACTION FOR FRAUDULENT INDUCEMENT TO CONTRACT/FALSE PROMISE AGAINST

***********
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ABCD REMAINS TIME-BARRED Plaintiffs argue that Defendant *********** ABCDs demurrer on the grounds that the Plaintiffs cause of action for Fraudulent Inducement to Contract/False Promise is time barred is not well taken(Pls Opp., page 2), whereby plaintiff premises his objection on It is not enough that he complaint might be barred. citing Marshall v. Gibson, Dunn & Crutcher. However, the facts on the face of the complaint clearly and convincingly demonstrate that plaintiff had knowledge of the facts sufficient to make a reasonably prudent person suspicious of fraud, thus putting him on inquiry.

Under the California statute of limitations for fraud, the three-year period does not begin to run until the plaintiff has actual or constructive notice of the facts constituting the fraud. Constructive notice is knowledge of facts sufficient to make a reasonably prudent person suspicious of fraud, thus putting him on inquiry. Jacqueline R. Harrell; Michael Harrell, Plaintiffs-appellants, v. 20th Century Insurance Company, et al., Defendant, and Bradley Scott, Defendant-appellee 934 F.2d 203 (1991)

Here, the statue runs in favour of the Defendant *********** ABCD because plaintiffs, knew that the statements at issue were made in October of 2007 and performance was to be completed within 3 months; The court should take judicial notice of the fact that the loan agreement date, Exhibited in Plaintiffs Complaint as Exhibit 1 is October **th, 2007, thus, by January 17, 2008, (three months later from the Loan Date of October **h, 2007) Plaintiffs, or a reasonable person, or a person in similar circumstances, should they be actually reliant on the statements of Defendant ABCD or a similar representation, would be on notice of inquiry at the time performance was due, 1/17/2008. It is clear then that the time for performance would have been at the latest January 17 of 2008. Therefore the Statute would have certainly run as of January 17, 2011. Since the case at bar was filed April 7, 2011, well after the statute has run, the Complaint against Defendant *********** ABCD is Time-Barred.

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2.

PLAINTIFF HAS NOT PROPERLY PLED THE REQUIRED ELEMENTS OF FOR FRAUDULENT INDUCEMENT TO CONTRACT/FALSE PROMISE.

Plaintiff contends that in Paragraph 74 of the complaint every element necessary to state a cause of action for fraud and deceit or based on promissory fraud is directly and specifically alleged Pl. Opp. page 4 line 20-21. According to the Opposition to the Demurrer, the alleged promises include, October, 2007 (when) in Los Angeles California (where) defendant loan broker *********** ABCD (who) falsely and fraudulently and with the malicious intent to defraud and deceive plaintiffs, and with the specific intent to induce plaintiffs to enter into the loan of $200,000.00, orally (how representation was made) represented and promised plaintiffs that Your $200,000.00 loan will be paid off within three months because I will obtain bank loans secured by the two hotels as collateral. (what promised), asserting that all the sub elements of fraud are satisfied as alleged, under Tyco Industries v. Superior Court (1985) 164 Cal. App. 3d 148, 156; Witkin, California Procedure (4th ed. 1997) Pleading section 681, p.140. However, Plaintiffs complaint remains conclusory on the face because while the allegations are pled, as plaintiff demonstrated in his opposition, the requisite standard for specificity is not met.

As explained in the Demurrer, allegations of fraud are evaluated under a heightened pleading standard and must be pled with specify. see Lazar v. Sup. Ct., 12 Cal. 4th 631, 645 (1996). Under Otworth v. S. Pacific Transp. Co., 166 Cal. App. 3d 452, 459 (Cal. Ct. App. 2d Dist. 1985), if an action on an alleged violation of an agreement, the terms must be set out verbatim in the body of the complaint, or a copy of the instrument must be attached and incorporated by reference. Here, neither had been carried out.

While Plaintiff merely points to the alleged promises, they has not set forth the material terms. They has not attached any document in support of the existence of the promises; while they refer to Exhibit 3 of their Complaint by referencing the Note Secured by Deed of Trust in satisfying the existence of the promise or a contractual obligation at which plaintiff could seek recovery,
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Exhibit C is merely a Note, and does not identify at all, information demonstrating reliance upon defendant *********** ABCD. // // A. PLAINTIFF HAS NOT PROPERLY PLED THE DEFENDANT *********** ABCDS FRAUDULENT INTENT Plaintiff claims that Defendant *********** ABCDs fraudulent intent is shown by nonfulfilment of the supposed promise. Pl.s Opp. Page 4. To the contrary, subsequent nonfulfilment does not establish fraudulent intent at the time the claimed representation was made. Service by Medallion, Inc. v. Clorox Co., 44 Cal. App. 4th 1807, 1816 (Cal. Ct. App 6th Dist. 1996)

B.

PLAINTIFF HAS NOT PROPERLY PLED THE DEFENDANT *********** ABCDS INTENT TO INDUCE JUSTIFIABLE RELAINCE

Plaintiffs Complaint and Opposition blindly contends that Defendants intended for Plaintiff to justifiably rely on their supposed representations. Plaintiffs complaint and Objection merely includes a statement that Plaintiffs reasonably believed and relied on said representations and promises made by said defendants acting on behalf of their co-defendants, because they had no reason to doubt their accuracy, and in reliance upon said defendants representations, plaintiffs were induced to take the actions detailed hereinabove and hereinbelow. (Justifiable reliance) Pl.s Opp. Page 5 In light of Plaintiffs conclusory allegation, Defendant *********** ABCDs alleged lack of intent to perform does not establish the element of intent to induce justifiable reliance. Plaintiffs baseless statements do not meet the threshold requirements for the heightened pleading standard for Fraud. see Lazar v. Sup. Ct., 12 Cal. 4th 631, 645 (1996). Moreover, the absence of any intention to deliver and perform the promises and representations made by defendants is not the type scienter required for a claim for fraud; the lack of an intent to perform is not the same as an intent to induce reliance. See Atascadero v. Merrill Lynch, Pierce, Fenner
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& Smith, Inc. 68 Cal. App. 4th 445, 482 (Cal. Ct. App. 1st Dist. 1998). Plaintiff has presented no facts which suggest that Defendant *********** ABCD intended for Plaintiff to rely on any misrepresentations. // // C. PLAINTIFF HAS NOT PROPERLY PLED DEFENDANT *********** ABCDS KNOWLEDGE OF THE FALSITY OF HIS REPRESENTATION Plaintiffs claim that the Complaint sufficiently pleads that Defendant *********** ABCD knew of the falsity of his statement. Plaintiff argues each of said representations and promises made by said defendant(s) were false and then know by said defendants to be false in that said defendants despicably knew that defendants had no present intent to perform their promises and commitments to plaintiffs and instead intended all along to not perform or honor the representations and promises made, with the despicable intent to increase their profits at plaintiffs expense, despicable not caring about plaintiffs interests and maliciously scheming to increase their own profits at plaintiffs expense. (scienter) Pl.s Opp. Page 4. To the contrary, the Complaint lacks any allegations regarding Defendant *********** ABCDs knowledge of the falsity of his representation at the time it was made. It matters to a fraud cause of action the time at which the allegation intention was formed; Plaintiff needs to show a scheme to defraud them at the time the alleged promise was made, and has failed to do so. See Service by Medallion, inc. v. Clorox Co.; 44 Cal. App 4th at 1816. Fraud must be pled with particularity and clearly, and Plaintiffs have not pled the knowledge element of their claim with particularity or clarity. see Lazar v. Sup. Ct., 12 Cal. 4th 631, 645 (1996).

3.

PLAINTIFFS HAVE NOT ADDRESSED THE DEFENDANT *********** ABCDS CONTENTIONS, COMMON TO EACH OF THE CAUSES OF ACTION, REGARDING PLAINTIFFS NOT PLEADING THE ELEMENTS OF AN ACTION FOR CIVIL

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CONSPIRACY, THUS PLAINTIFF FAILS TO LAY A PREDICATE FOR JOINT AND SEVERAL LIABILITY TO WHICH *********** ABCD MAY BE SUBJECTED. Plaintiffs Opposition has not addressed the Demurrers arguments on their failure to properly plead allegations common to each of the causes of action for civil conspiracy laying the predicate for joint and several liability to which *********** ABCD may be subjected. Because

Plaintiffs omission to discuss the other defects of their Complaint as raised in the Demurrer the arguments set forth in the Demurrer must be deemed admitted.

Because Plaintiffs have only contested the inadequacy of their pleading with regard to the representations of joint and several liability common to all causes of action, the Demurrers assertions with regard to: 1) Plaintiffs failure to attribute an independent wrong to Defendant *********** ABCD within the meaning of case law, Plaintiffs in their Complaint did not allege that Defendant *********** ABCD specifically and actually knew that the conduct of his codefendants constituted a breach of duty, nor did Plaintiff allege that Defendant *********** ABCD provided substantial assistance or encouragement to his co-defendants as to satisfy the elements of civil conspiracy; 2) plaintiff did not attribute facts to Defendant *********** ABCD as to satisfy the factual threshold of action to subject him to potential liability within the meaning of case law; and, 3) that case law holds that potential liability cannot arise out of participation in the conspiracy alone, (citations within Defendants Demurrer) that these assertions within the Demurrer should be deemed admitted. CONCLUSION

Based on the foregoing, Defendant *********** ABCD respectfully requests that Defendant *********** ABCD be severed from this action; that the Demurrer be sustained as to the above causes of action alleged in the Complaint without leave to amend. Dated July **, 2011

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***********

By:_________________________________ *********** Attorney for Defendant *********** ABCD

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