Opinion
B329913
02-27-2024
BECKKER FAWZI, Plaintiff and Appellant, v. TERESA LOPEZ, Defendant and Respondent.
Attlesey Ward, Keith A. Attlesey and Marc W. Thomas for Plaintiff and Appellant. Russell J. Thomulka for Defendant and Respondent.
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County, No. 21STCV37300 Stephanie M. Bowick, Judge. Affirmed in part and reversed in part with directions.
Attlesey Ward, Keith A. Attlesey and Marc W. Thomas for Plaintiff and Appellant.
Russell J. Thomulka for Defendant and Respondent.
WEINGART, J.
INTRODUCTION
Plaintiff and appellant Beckker Fawzi alleges he contracted with DecadeOne Enterprises, LLC (DecadeOne) to purchase several high-end vehicles for a total of $300,000. Fawzi asserts that defendant and respondent Teresa Lopez helped broker the deal and guaranteed DecadeOne's performance. According to Fawzi, he made the $300,000 purchase payment through Lopez, but got nothing in return: Lopez improperly diverted $200,000 of the payment and kept it for herself, and DecadeOne failed to deliver any vehicles. Neither Lopez, DecadeOne, nor anyone else involved in the transaction honored Fawzi's request to return his money once it became clear the automobiles would not be delivered.
Fawzi sued Lopez and others for this alleged malfeasance on a variety of theories. The trial court sustained Lopez's demurrer to Fawzi's first amended complaint (FAC) in its entirety without leave to amend and entered judgment in her favor. We conclude the trial court erred in sustaining the demurrer as to Fawzi's cause of action for violation of the unfair competition law (UCL; Bus. & Prof. Code, § 17200 et seq.), as Fawzi sufficiently alleged unfair and fraudulent acts by Lopez under that statute. In addition, although the trial court properly sustained Lopez's demurrer to Fawzi's other causes of action, it erred in denying Fawzi leave to amend four of those causes of action-for negligence, intentional misrepresentation, negligent misrepresentation, and fraudulent concealment-as Fawzi has demonstrated the possibility that he can successfully amend those causes of action to state a claim.
Unspecified statutory references are to the Business and Professions Code.
Accordingly, we reverse the judgment and direct the trial court to overrule Lopez's demurrer to the UCL cause of action and to grant Fawzi leave to amend his causes of action for negligence, intentional misrepresentation, negligent misrepresentation, and fraudulent concealment. We affirm the trial court's sustaining of Lopez's demurrer to the remaining causes of action without leave to amend.
FACTUAL AND PROCEDURAL BACKGROUND
A. Fawzi's Allegations and Causes of Action
In reviewing the trial court's demurrer ruling, we accept the truth of Fawzi's factual allegations as set forth in the FAC along with the amendments he claims he can make to it.
The defendants listed in the FAC are Lopez, DecadeOne, Kareem Davis (who signed the contract on behalf of DecadeOne),Lopez's company United Mutual Holdings, LLC (United Mutual), and Aseret Mortgage Bank (Aseret). United Mutual and Aseret joined in Lopez's demurrer and the court entered judgment in their favor along with Lopez. However, Fawzi's appellate brief does not address any of his causes of action against United Mutual or Aseret, and he has therefore waived any claim of error regarding the entry of judgment in their favor. (E.g., Estrada v. Public Employees' Retirement System (2023) 95 Cal.App.5th 870, 889.) We accordingly focus our factual description on the allegations against Lopez.
The FAC identifies this defendant as "Karem Davis." The contract attached to the FAC, however, identifies him as "Kareem Davis."
The named defendants, "through" Lopez and Davis, "agreed in writing to sell to [Fawzi] various vehicles for the total sum of $300,000." Lopez introduced Fawzi to DecadeOne and Davis, and urged Fawzi to enter into an agreement with them. The written contract (Sale Contract), which was attached as an exhibit to the FAC, states that it is between DecadeOne (referred to as "Seller") and Fawzi (referred to as "Buyer"). It relates to eight vehicles and contains pictures of the vehicles and identification numbers. It provides, "The Seller agrees with the Buyer that the Buyer shall pay the sum of [$300,000] on the date of this agreement. [B]eing [sic] the full payment. The standard term of this agreement shall be 30 business days. During this period, the title of the vehicles will transfer over to the Buyer. The Buyer acknowledges a [s]ervice [f]ee for $40,000.00 Due Cash on Delivery." (Bold omitted.) The contract provided that Fawzi would pay the $300,000 to a bank account in the name of United Mutual, an entity Fawzi understood was headed by Davis. The contract was signed by Davis on June 20, 2021, and by Fawzi on June 21, 2021. The Sale Contract does not mention Lopez individually.
"[T]o induce [Fawzi] to pay the $300,000 sum, . . . L[opez] agreed and texted her agreement that she was guaranteeing . . . performance in th[e Sale Contract] to [Fawzi]." Attached to the FAC is a text message chain in which Fawzi asks Lopez if she is "100% sure about the deal and the source" and Lopez responds, "yes I'm 100%." Later in the exchange Fawzi states "if you Guarantee him we are moving forward tomorrow," to which Lopez responds, "Yes I guarantee him." Lopez's reference to "him" meant DecadeOne's principal Davis.
"As a direct result of the prior business dealings" with Lopez, Fawzi "relied upon [Lopez's] trustworthiness." Fawzi did not know the others involved in the transaction, and would not have entered the transaction "had [he] not trusted, relied upon [sic] believed in the reputation of L[opez]."
Lopez and the other defendants never intended to perform under the Sale Contract or Lopez's guaranty, and in fact did not perform. Instead, they collectively engaged in a conspiracy to deceive Fawzi into paying money to purchase the vehicles without ever intending to deliver the vehicles or repay Fawzi. As per the Sale Contract, Fawzi paid $300,000 to United Mutual, which Fawzi later learned was a shell company for Lopez and not affiliated with Davis as he was originally led to believe. Lopez improperly kept $200,000 of Fawzi's payment, and only forwarded $100,000 to Davis and DecadeOne.
As relevant to this appeal, Fawzi asserted eight causes of action in the FAC against Lopez: breach of contract, negligence, fraudulent concealment, intentional misrepresentation, negligent misrepresentation, breach of common law duty, breach of relationship of trust and confidence, and unfair competition in violation of the UCL.
The FAC also asserted causes of action for breach of statutory duty and for treble damages under Penal Code section 496, subdivision (a). On appeal, Fawzi concedes that these two causes of action fail to state viable claims and cannot be amended to cure their defects. Accordingly, we do not further address these causes of action.
B. Lopez Files a Demurrer
Lopez demurred to the FAC on April 12, 2022. She acknowledged that she had "referred" the seller to Fawzi, but argued that Fawzi's breach of contract claim failed as against her because she was not a party to the Sale Contract. She similarly argued that Fawzi's causes of action for negligence, fraudulent concealment, intentional misrepresentation, and negligent misrepresentation all failed because they were premised on allegations that Lopez had an obligation to perform under the Sale Contract.
As to the fraudulent concealment and intentional misrepresentation claims, Lopez also asserted that Fawzi's allegations lacked the requisite specificity. Lopez contended the cause of action for breach of common law duty failed because it did not identify what common law duty it was premised upon, and potentially duplicated one or more of the other causes of action, which all failed. Lopez argued the court should sustain her demurrer to Fawzi's cause of action for breach of relationship of trust and confidence because the element of legal duty was lacking, and because Lopez was not a party to the Sale Contract. Lastly, Lopez contended that Fawzi's UCL cause of action against her failed because she was not a party to the Sale Contract and Fawzi did not allege that Lopez was "involved in the sale of vehicles."
C. Fawzi's Opposition to the Demurrer
In his opposition to the demurrer, Fawzi contended he adequately pleaded that Lopez had breached the Sale Contract by alleging Davis had acted as a co-conspirator and agent of Lopez, and that Lopez was "estopped" from denying the enforceability of the contract. Fawzi did not address whether he had adequately pleaded that Lopez had agreed to guarantee performance of the Sale Contract.
Fawzi contended that he adequately alleged Lopez had been negligent by breaching unspecified fiduciary duties. He asserted that he had properly pleaded a fraudulent concealment cause of action by alleging Lopez had concealed she was engaged in a conspiracy to take Fawzi's money.
Fawzi asserted that his causes of action for fraudulent and negligent misrepresentation were supported by allegations that "[the] defendants misrepresented their true intent not to ever deliver the promised vehicles to [Fawzi]." He also contended that paragraphs 17 and 18 of the FAC alleged "false representations" by Lopez "as to [her] own conduct." Those paragraphs set forth Lopez's alleged promise to guarantee the Sale Contract, and referenced the text exchange between Fawzi and Lopez.
As to the cause of action for breach of common law duty, Fawzi asserted that case law established Lopez had a duty to disclose facts that she knew were material to the transaction but unknown to Fawzi, and had violated that duty by conspiring to take Fawzi's money and by making "false representations . . . that cars had been bought by [Lopez, United Mutual, and/or Aseret] from [Davis]."
With respect to his cause of action for breach of relationship of trust and confidence, Fawzi contended that he had adequately alleged a fiduciary relationship with Lopez based on prior business between the two and on Lopez's promise to guarantee the Sale Contract.
Fawzi asserted that he had adequately alleged a UCL claim based on "the frauds by [the d]efendants."
In addition to contending that he had adequately pleaded his causes of action, Fawzi alternatively sought leave to amend, asserting that he could add the following allegations based on information provided by Davis's counsel: Lopez (along with United Mutual and Aseret) had engaged in a scheme to use Davis as a "strawman" to obtain Fawzi's money; United Mutual was "L[opez]'s company," but Davis had "acted as if he were the head" of the entity; and finally that Lopez and her company United Mutual had received the $300,000 Fawzi paid under the Sale Contract and kept $200,000, conveying only $100,000 to Davis.
D. The Court's Ruling
The trial court heard oral argument on Lopez's demurrer on January 19, 2023, and issued a minute order later that day sustaining the demurrer as to all causes of action without leave to amend. The court concluded the breach of contract cause of action failed because the Sale Contract showed that Lopez was not a party, and the FAC failed to sufficiently allege a guaranty agreement by Lopez. Fawzi's causes of action against Lopez for negligence, fraudulent concealment, intentional misrepresentation, negligent misrepresentation, and breach of relationship of trust and confidence all failed because they were premised on promises or representations made in the Sale Contract, to which Lopez was not a party. The causes of action for fraudulent concealment and intentional misrepresentation additionally failed because they did not set forth the alleged fraud with sufficient specificity.
The trial court found Fawzi's cause of action for breach of common law duty failed because, whether it was premised on alleged breach of contract, negligence, or fraud, it was flawed for the same reasons that Fawzi's separate causes of action under those theories were flawed. In addition, this cause of action was uncertain in that it failed to specify whether it was a contract, negligence, fraud, or other type of tort claim. (Code Civ. Proc., § 430.10, subd. (f).) Fawzi's UCL cause of action failed because his other causes of action failed.
The court denied Fawzi leave to amend, finding no reasonable possibility that Fawzi could amend to cure the defects because "All of [Fawzi]'s causes of action are premised [on] the existence of a contractual relationship that does not exist between [Fawzi] and [Lopez] or/or [sic] a duty or relationship that is not sufficiently shown as existing.... [¶] Additionally, [Fawzi] has failed to establish in his [o]pposition or hearing at oral argument, and the allegations in the FAC do not suggest, that [Fawzi] can sufficiently allege actionable misrepresentations and/or concealments that resulted in [Fawzi]'s alleged damages."
The court entered a judgment of dismissal on March 2, 2023. Fawzi timely appealed on April 28, 2023.
DISCUSSION
A. Standard of Review
"In reviewing the sufficiency of a complaint against a general demurrer, we are guided by long-settled rules. 'We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.' [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.] When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. [Citation.] And when it is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff. [Citation.]" (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)
B. The Trial Court Erred in Sustaining Lopez's Demurrer to the UCL Cause of Action
Fawzi stated a viable cause of action against Lopez under the UCL, and the trial court erred in sustaining Lopez's demurrer to that cause of action. The UCL authorizes causes of action, among other things, to redress "unfair competition." (§ 17203.) As relevant here, section 17200 defines "unfair competition" as "any unlawful, unfair or fraudulent business act or practice." Because this definition is written in the disjunctive," 'it establishes three varieties of unfair competition-acts or practices which are unlawful, or unfair, or fraudulent.'" (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.) Fawzi's claim involves the "unfair" and "fraudulent" components of the UCL.
1. Unfair Business Acts or Practices
We consider Fawzi's UCL cause of action as a "consumer" case. (See Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., supra, 20 Cal.4th at p. 187, fn. 12 [distinguishing between "an action by a competitor alleging anticompetitive practices" and "actions by consumers or by competitors alleging other kinds of violations of the unfair competition law"].) "In this court, the test for determining whether a business practice is unfair in consumer cases arising under the UCL is the same as that used under section 5 of the Federal Trade Commission Act (15 U.S.C. § 45(n)). [Citations.] '[A] business practice is "unfair" if (1) the consumer injury is substantial; (2) the injury is not outweighed by any countervailing benefits to consumers or competition; and (3) the injury could not reasonably have been avoided by consumers themselves.' [Citation.]" (Rubenstein v. The Gap, Inc. (2017) 14 Cal.App.5th 870, 880 (Rubenstein).)
Fawzi adequately stated an "unfair" business act claim by alleging that Lopez, in her text message exchange with Fawzi, vouched for Davis and DecadeOne (responding affirmatively to Fawzi's query whether she was "100 [percent] sure about the deal and the source"), and stated that she had "seen [Davis's] performance and am very happy." Based on Fawzi's allegations that Lopez knew DecadeOne and Davis had no intention from the get go to deliver the vehicles, and that when she made these statements Lopez was conspiring with Davis to take Fawzi's money without providing anything in return, Lopez's statements in her text messages were false or, at the very least, misleading. Making false or misleading statements to induce Fawzi to enter the Sale Contract sufficiently alleges an "unfair" act. (E.g., Blakemore v. Superior Court (2005) 129 Cal.App.4th 36, 49.) In addition, Fawzi's allegations satisfy the other elements of an "unfair" business act claim set forth in Rubenstein: Fawzi's alleged loss ($300,000) is substantial, his loss is not outweighed by any" 'benefits to consumers or competition'" as nothing was received in return for his money, and Fawzi could not have avoided injury. (Rubenstein, supra, 14 Cal.App.5th at p. 880.) Thus, Fawzi's allegations sufficiently state a claim that Lopez engaged in an unfair business act under the UCL.
As the trial court noted, the text exchange identifies the person texting with Fawzi as "Teresa Banker," not as Teresa Lopez. However, given our standard of review, we accept as true Fawzi's allegations that his text exchange was with Lopez.
Although not challenged by Lopez, we further observe that Fawzi's allegations that he lost money as a result of relying on Lopez's misrepresentations satisfies the standing requirement for a UCL claim. (§ 17204 ["a person who has suffered injury in fact and has lost money or property as a result of the unfair competition" has standing to sue for "unfair competition" under the UCL]; Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 322 [to establish standing under the UCL a plaintiff must establish an "economic injury" which was "caused by" the alleged unfair business act or practice (italics omitted)].)
2. Fraudulent Business Acts or Practices
For similar reasons, Fawzi adequately stated a fraudulent business act claim." 'A business practice is "fraudulent" within the meaning of [the UCL] if it is "likely to deceive the public. [Citations.] It may be based on representations to the public which are untrue, and' "also those which may be accurate on some level, but will nonetheless tend to mislead or deceive.... [Citations.] The determination as to whether a business practice is deceptive is based on the likely effect such practice would have on a reasonable consumer."' [Citation.]" (Rubenstein, supra, 14 Cal.App.5th at pp. 876-877.)" 'The "fraud" prong of [the UCL] is unlike common law fraud or deception'" and a plaintiff may show a violation without meeting the elements of common law fraud. (Schnall v. Hertz Corp. (2000) 78 Cal.App.4th 1144, 1167.)" 'Instead, it is only necessary to show that members of the public are likely to be deceived.' [Citation.]" (Ibid.) Fawzi's allegations that Lopez vouched for Davis to induce Fawzi to pay her money even though she knew there was no intention of delivering the vehicles adequately alleges a fraudulent act by Lopez in violation of the UCL.
Even were we to conclude that Fawzi has not adequately pleaded an unfair or fraudulent business practice, Fawzi has shown a reasonable possibility he can amend his complaint to do so by alleging that Lopez received the $300,000 Fawzi paid under the Sale Contract and improperly kept $200,000 for herself, while forwarding only $100,000 to Davis and DecadeOne, all while Fawzi did not receive what he was promised under the contract.
3. Lopez's Remaining UCL Arguments Lack Merit
Lopez argues that Fawzi's UCL cause of action fails because his allegations do not establish she breached the Sale Contract or entered a binding guaranty agreement. But Lopez's alleged false statements to induce payment by Fawzi can be "unfair" and "fraudulent" under the UCL even if they do not constitute an enforceable promise or relate to a contract to which Lopez was not a party so long as such statements were likely to deceive Fawzi. (Rubenstein, supra, 14 Cal.App.5th at pp. 876877; Schnall v. Hertz Corp., supra, 78 Cal.App.4th at p. 1167.)
Lopez also argues that she is not a "car vendor[ or] car broker[ ]" but fails to explain how this is relevant. To the extent she contends that Fawzi's allegations do not concern a "business" act or practice under the UCL, her argument lacks merit. The alleged transaction was supposed to be a commercial sale, and Lopez is alleged to have been instrumental in facilitating it. Additionally, the plain language of the UCL does not require a course of conduct, as it "covers single acts of misconduct." (Klein v. Earth Elements, Inc. (1997) 59 Cal.App.4th 965, 969, fn. 3.)
C. The Trial Court Properly Sustained the Demurrer to the Remaining Causes of Action, But Erred in Denying Leave to Amend the Negligence, Intentional and Negligent Misrepresentation, and Fraudulent Concealment Claims
We conclude that the trial court properly sustained Lopez's demurrer to Fawzi's remaining causes of action. We further find that the court erred in denying leave to amend the causes of action for negligence, intentional and negligent misrepresentation, and fraudulent concealment, and that the court did not err in denying leave to amend the breach of contract, breach of common law duty, and breach of relationship of trust and confidence counts. We now discuss each of these causes of action.
1. The Trial Court Erroneously Denied Leave to Amend the Negligence, Intentional Misrepresentation, Negligent Misrepresentation, and Fraudulent Concealment Causes of Action
Fawzi states he "is willing to forego de novo review of the demurrer itself" provided that we "first address the issue of leave to amend" and find leave to amend appropriate. We accordingly focus first on those claims as to which leave to amend should have been granted.
a. Negligence
"To establish a cause of action for negligence, the plaintiff must show that the 'defendant had a duty to use due care, that he breached that duty, and that the breach was the proximate or legal cause of the resulting injury.' [Citation.] Recovery for negligence depends as a threshold matter on the existence of a legal duty of care. [Citation.]" (Brown v. USA Taekwondo (2021) 11 Cal.5th 204, 213.)
Fawzi contends he can amend his negligence cause of action to allege among other things that "[Lopez], as broker of the transaction, took on a duty . . . to at least transfer the money she received from [Fawzi] to the other party to the sales contract." This is consistent with Fawzi's opposition to the demurrer, in which he sought leave to amend to allege that his purchase money was initially received by Lopez (through her company United Mutual), and that Lopez skimmed off $200,000 for herself and conveyed only $100,000 to DecadeOne and Davis.
Lopez does not address why Fawzi could not state a viable negligence claim based on these allegations, and they would in fact support a claim that Lopez (in receiving payment from Fawzi) had a duty of care to convey those funds to the seller and not improperly divert a significant portion to herself. "A defendant who enters upon an affirmative course of conduct affecting the interests of another is regarded as assuming a duty to act, and will be liable for negligent acts or omissions [citations], because one who undertakes to do an act must do it with care. [Citations.] . . . 'Where performance clearly has begun, there is no doubt that there is a duty of care.' [Citation.]" (Bloomberg v. Interinsurance Exchange (1984) 162 Cal.App.3d 571, 575.) As Fawzi has demonstrated a reasonable possibility he could plead a viable negligence cause of action, the trial court erred in refusing Fawzi leave to amend this cause of action.
b. Intentional and Negligent Misrepresentation
We discuss intentional and negligent misrepresentation together given the overlap between the two causes of action. The elements of a claim for intentional misrepresentation or 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.' [Citations.]" (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.)" 'The elements of a cause of action for negligent misrepresentation are: [¶] ["]1. The defendant must have made a representation as to a past or existing material fact; [¶] ["]2. The representation must have been untrue; [¶] ["]3. Regardless of his actual belief the defendant must have made the representation without any reasonable ground for believing it to be true; [¶] ["]4. The representation must have been made with the intent to induce plaintiff to rely upon it; [¶] ["]5. The plaintiff must have been unaware of the falsity of the representation; he must have acted in reliance upon the truth of the representation and he must have been justified in relying upon the representation; [¶] ["]6. And, finally, as a result of his reliance upon the truth of the representation, the plaintiff must have sustained damage." [Citations.]' [Citation.]" (Christiansen v. Roddy (1986) 186 Cal.App.3d 780, 785-786.)
Fawzi's intentional and negligent misrepresentation causes of action as set forth in the FAC assert a "promissory fraud" claim, namely, that the promises in the Sale Contract constituted the intentional and/or negligent misrepresentations. (See Lazar v. Superior Court, supra, 12 Cal.4th at p. 638 ["where a promise is made without [the] intention [to perform], there is an implied misrepresentation of fact that may be actionable fraud"].) This theory fails as against Lopez because she was not a party to the Sale Contract and therefore did not make any promises in it. Fawzi contends he alleged that false promises in the Sale Contract were "manifested through" Lopez, but he does not identify how Lopez purportedly "manifested" these false promises.
However, Fawzi has shown there is a reasonable possibility he can amend his intentional and negligent misrepresentation causes of action to state a viable claim against Lopez on other grounds. Fawzi alleges Lopez represented via text message that she had seen Davis perform a prior transaction, when in fact she knew that Davis and DecadeOne did not intend to perform under the Sale Contract and/or Lopez had no reasonable ground for believing Davis and DecadeOne would perform. Further, it appears Fawzi can allege Lopez did this with the intent to induce his reliance, that he justifiably relied on the representation believing it to be true, and that he suffered resulting damage.
Fawzi also contends that he can successfully amend these causes of action by alleging that Lopez received the $300,000 Fawzi paid under the Sale Contract but delivered only $100,000 to DecadeOne. To state a viable claim for intentional and/or negligent misrepresentation based on these allegations, however, Fawzi would also have to allege specific misrepresentations by Lopez in connection with the handling of the purchase funds.
c. Fraudulent Concealment
"The elements for a fraudulent concealment claim are: '" '(1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.'"' [Citation.]" (Nissan Motor Acceptance Cases (2021) 63 Cal.App.5th 793, 826.)
Fawzi has shown a reasonable possibility that he can cure the defects in the allegations supporting this claim. For example, Fawzi asserts he can allege Lopez intentionally concealed her intent to improperly divert $200,000 of the purchase price. Further, Lopez would potentially have a duty to disclose because Fawzi can allege Lopez possessed material facts not readily available to Fawzi about her intent to divert the money upon payment, which creates a duty of disclosure. (E.g., Jones v. ConocoPhillips Co. (2011) 198 Cal.App.4th 1187, 1199.) Accordingly, leave to amend should have been granted as to this cause of action.
2. The Trial Court Properly Denied Leave to Amend the Remaining Causes of Action
a. Breach of Contract
To allege a cause of action for breach of a written contract, "the plaintiff must plead the existence of a contract, its terms which establish the obligation in issue, the occurrence of any conditions precedent to enforcement of the obligation, and the breach of that obligation." (FPI Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 383.) The plaintiff must also allege the breach damaged him. (State Comp. Ins. Fund v. ReadyLink Healthcare, Inc. (2020) 50 Cal.App.5th 422, 449.)
Fawzi concedes the trial court did not err in sustaining Lopez's demurrer to his cause of action for breach of the Sale Contract. He instead contends the court erred in denying him leave to amend, because there is a reasonable possibility he could adequately amend to plead Lopez agreed to guarantee the Sale Contract and then breached that guarantee.
As "[a] special promise to answer for the debt, default, or miscarriage of another," the purported guarantee would be "invalid" under the statute of frauds "unless [it], or some note or memorandum thereof, [was] in writing and subscribed by the party to be charged," namely Lopez. (Civ. Code, § 1624, subd. (a)(2).) To satisfy the statute of frauds, the writing must identify the subject of the parties' agreement, show that they made a contract, and state the essential contract terms with reasonable certainty. (Sterling v. Taylor (2007) 40 Cal.4th 757, 766.) The text message exchange between Fawzi and Lopez fails this test, because it does not contain essential contract terms such as specifying what obligations Lopez was assuming by texting she guaranteed DecadeOne and its principal. Fawzi does not identify any additional specific facts he could allege to state a viable breach of guaranty claim, and even if he did, "[b]ecause the memorandum itself must include the essential contractual terms, it is clear that extrinsic evidence cannot supply those required terms." (Id. at p. 767.) Therefore, Fawzi has not satisfied his burden of showing there is a reasonable possibility he could cure the defects in this cause of action. (Blank v. Kirwan, supra, 39 Cal.3d at p. 318.)
b. Breach of Common Law Duty
Fawzi concedes his breach of common law duty cause of action was not adequately pleaded; he instead asserts that he can successfully amend it. In his opposition to the demurrer, Fawzi clarified that his breach of common law duty claim is premised on caselaw holding that a duty to disclose arises "when one party to a transaction has sole knowledge or access to material facts and knows that such facts are not known or reasonably discoverable by the other party." (Shapiro v. Sutherland (1998) 64 Cal.App.4th 1534, 1544, citing Goodman v. Kennedy (1976) 18 Cal.3d 335, 347.) This is just another way of asserting a fraudulent concealment claim. Accordingly, the demurrer to the breach of common law duty count was properly sustained because it was duplicative of the fraudulent concealment cause of action. (E.g., Palm Springs Villas II Homeowners Assn., Inc. v. Parth (2016) 248 Cal.App.4th 268, 290.) Because Fawzi fails to explain how he could plead this claim in any way that differs from his fraudulent concealment claim, the trial court did not err in denying leave to amend. (Ibid.)
c. Breach of Relationship of Trust and Confidence
Fawzi's cause of action for breach of relationship of trust and confidence is one for breach of fiduciary duty. The elements of such a cause of action "are the existence of a fiduciary relationship, its breach, and damage proximately caused by that breach." (City of Atascadero v. Merrill Lynch, Pierce, Fenner &Smith, Inc. (1998) 68 Cal.App.4th 445, 483.)
Fawzi alleges that he and Lopez had a type of fiduciary relationship known as a "confidential relationship." As explained by our colleagues in Division Eight, although the existence of a "confidential relationship" depends on the circumstances of each situation, "the 'essential elements'" of such a relationship "have been distilled as follows:' "1) The vulnerability of one party to the other which 2) results in the empowerment of the stronger party by the weaker which 3) empowerment has been solicited or accepted by the stronger party and 4) prevents the weaker party from effectively protecting itself." '" (Persson v. Smart Inventions, Inc. (2005) 125 Cal.App.4th 1141, 1161, quoting Richelle L. v. Roman Catholic Archbishop (2003) 106 Cal.App.4th 257, 272.) As our high court has observed, this type of relationship is generally recognized "when one party's vulnerability is so substantial as to give rise to equitable concerns underlying the protection afforded by the law governing fiduciaries." (City of Hope National Medical Center v. Genentech, Inc. (2008) 43 Cal.4th 375, 389.)
A fiduciary relationship can also be imposed on a party as the result of a formal legal relationship between the parties, such as principal and agent or attorney and client. (Persson v. Smart Inventions, Inc., supra, 125 Cal.App.4th at p. 1160.) Fawzi does not allege any formal legal relationship between himself and Lopez that would impose fiduciary duties on Lopez by operation of law.
Fawzi contends he has adequately pleaded a confidential relationship between himself and Lopez based on his allegations that he has "previously done business" with Lopez and that Lopez guaranteed the Sale Contract. We disagree. Engaging in business transactions by itself does not establish that one party is vulnerable, and Fawzi does not allege any facts showing that he was vulnerable to Lopez due to an imbalance of power between the two. (See Persson v. Smart Inventions, Inc., supra, 125 Cal.App.4th at p. 1161 [concluding "that the 'necessary predicate' of vulnerability" on the plaintiff's part was "completely absent" given the lack of "evidence of a 'weaker' or a 'stronger' party" in the transaction]; Wolf v. Superior Court (2003) 107 Cal.App.4th 25, 31 [rejecting the plaintiff's contention he had a fiduciary relationship with the other party to a contract merely "because he necessarily reposed 'trust and confidence' in [the other party] to perform its contractual obligation"].) Nor does Fawzi allege that he was particularly vulnerable due to any personal circumstances. (See Richelle L. v. Roman Catholic Archbishop, supra, 106 Cal.App.4th at p. 273 ["The vulnerability that is the necessary predicate of a confidential relation . . . usually arises from advanced age, youth, lack of education, weakness of mind, grief, sickness, or some other incapacity"].)
Fawzi contends that he could allege additional facts showing there was a fiduciary relationship between himself and Lopez, but he fails to identify any specific factual allegations he could make. Accordingly, he has not carried his burden to show there is a reasonable possibility he could amend this cause of action to cure its defects.
In opposing Lopez's demurrer, Fawzi also requested leave to assert additional causes of action "such as for constructive fraud, money had and received, [and] breach of the covenant of good faith and fair dealing." Fawzi does not renew this request on appeal or address the viability of any additional causes of action beyond those addressed in our opinion. Accordingly, our disposition should not be read as granting Fawzi leave to amend as to causes of action he has abandoned.
DISPOSITION
We reverse the judgment in favor of Teresa Lopez with directions to the trial court to overrule Lopez's demurrer as to Beckker Fawzi's UCL cause of action; to grant Fawzi leave to amend his causes of action for negligence, intentional misrepresentation, negligent misrepresentation, and fraudulent concealment; and to sustain the demurrer as to the remaining causes of action without leave to amend. Fawzi is awarded his costs on appeal.
We concur: ROTHSCHILD, P. J. CHANEY, J.