Tentative Ruling: Flooring Group Inc vs Lee Koranda

Case Number

24CV04431

Case Type

Hearing Date / Time

Fri, 04/03/2026 - 10:00

Nature of Proceedings

CMC; Demurrer and Motion to Strike

Tentative Ruling

(1) The demurrer of plaintiff Flooring Group, Inc., dba Andros Floor Design, to the first amended cross complaint is overruled. Plaintiff shall file an answer to the first amended cross complaint on or before April 20, 2026.

(2) The motion to strike of plaintiff Flooring Group, Inc., dba Andros Floor Design, to portions of the first amended cross complaint is granted as to the demand for attorney fees under the fifth cause of action for conversion. The text, “as well as reasonable attorney’s fees and additional amount for fair consideration for the time and money expended by Koranda in pursuit of her property rights,” at page 16, lines 24 through 25 of the first amended cross complaint is stricken without leave to amend. The motion is denied in all other respects.

Background:

On August 9, 2024, plaintiff Flooring Group, Inc., doing business as Andros Floor Design (Andros), initiated this action by filing a complaint against defendant Lee Koranda (Koranda) setting forth six causes of action for (1) breach of written contract, (2) foreclosure on mechanic’s lien, (3) recovery on mechanic’s lien release bond, (4) open book account, (5) account stated, and (6) quantum meruit. The complaint seeks to recover unpaid amounts of at least $23,531.18 based on a home improvement contract, materials contract, and related change orders. The complaint pertains to home improvement work that Andros performed on behalf of Koranda at 4477 Shadow Hills Boulevard South, Unit A, Santa Barbara (Residence). The complaint also seeks to recover penalties pursuant to Civil Code section 8800, pre-judgment interest, and attorney fees.

On November 21, 2025, Andros filed its operative first amended complaint (FAC) that named Atlantic Special Insurance Company (Atlantic) as an additional defendant. The FAC alleges that Atlantic delivered a release of lien bond that discharged the mechanic’s lien on the Residence and rendered Atlantic a proper defendant as to Andros’ rights asserted in the FAC. (FAC, ¶ 29.)

On May 7, 2025, Koranda filed a cross complaint against Andros.

On October 20, 2025, Koranda filed her operative first amended cross complaint (FACC) against Andros asserting seven causes of action for (1) breach of contract, (2) negligent misrepresentation, (3) intentional misrepresentation, (4) financial and emotional elder abuse, (5) conversion, (6) unjust enrichment, and (7) unfair competition.

As alleged in the FACC:

In March 2024, Koranda purchased the Residence. (FACC, ¶ 7.)

On April 29, 2024, Koranda signed a home improvement contract (HI Contract) with Andros for the purpose of installing new floors in parts of the Residence. (FACC, ¶ 10, Ex. A.) The HI Contract price was $6,721.79, payable on completion without any downpayment. (Ibid.) The project included: “Remove & recycle carpet, pad, tac strip; remove & reset existing wail base/base shoe.” (FACC, Ex. A at p. 1.)

Koranda was 78 years old at the time of the HI Contract. (Compl., ¶ 89.)

On April 30, 2024, John Norton (Norton) told Koranda that she must pay the total HI Contract price up front. (FACC, ¶¶ 11, 58.) Koranda paid the HI Contract price via Zelle. (FACC, ¶ 12.) At this time, no work had been done on the HI Contract. (FACC, ¶ 13.)

On May 3, 2024, Koranda signed a materials contract with Andros (Materials Contract). (FACC, ¶ 14, Ex. B.) The Materials Contract contains the same scope of work as the HI Contract. (Ibid.) The price of the Materials Contract was $26,095.96. (Ibid.)

On May 3, 2024, Norton told Koranda that she must pay $19,000 of the Materials Contract price up front. (FACC, ¶ 15.) Koranda paid the requested $19,000 by check. (Ibid.) At this time, no labor had been performed at the Residence and no materials had been delivered to the Residence. (FACC, ¶ 17.)

On May 8, 2024, Koranda signed change order number one (CO-1), which was issued to her by Norton. (FACC, ¶ 24.) Under CO-1, Koranda agreed to pay Andros $2,404.35 to remove the existing flooring in a hallway and in a bathroom, and install new wood flooring in the hallway. (FACC, ¶ 24, Ex. D.)

On May 9 and 10, 2024, Koranda took possession of the Residence from the prior owners. (FACC, ¶¶ 19, 23.)

On May 13, 2024, without informing Koranda, Andros ordered the wood from its supplier. (FACC, ¶ 25.)  The amount Andros charged Koranda for the wood was marked up by approximately 250 percent. (FACC, ¶ 26.) 

On May 18, 2024, Andros commenced the work on CO-1. (FACC, ¶ 28.) Andros removed the baseboards and flooring in the hallway and hallway bathroom. (Ibid.) Koranda was not home at that time. (Ibid.)

On May 18, 2024, when Koranda returned to the Residence, she discovered that Andros had gone far beyond the scope of work called for in CO-1. (FACC, ¶ 29.) Koranda discovered that Andros had demolished a significant portion of the hall bathroom, including the shower, vanity, and various plumbing fixtures. (Ibid.) Koranda never authorized this work. (Ibid.)

On May 20, 2024, Andros delivered the wood flooring to the Residence despite the parties’ understanding that the wood was not to be delivered until she had an opportunity to see a sample and approve it in advance as a match to the powder room floor. (FACC, ¶ 30.) When Koranda discovered that the wood Andros had delivered was not a match, she demanded that Andros take the wood back. (Ibid.) Andros refused. (Ibid.)

On at least three occasions when Koranda protested Andros’ actions, Norton replied, “[y]ou are an old lady who doesn’t know anything.” (FACC, ¶ 31.)

On May 24, 2024, Koranda hired and paid a third-party contractor to complete the demolition that Andros had unlawfully began in the hall bathroom. (FACC, ¶ 32.) Koranda has since paid a contractor over $35,000 to rebuild the bathroom that was demolished by Andros. (Ibid.)

On May 24, 2024, Andros recorded a claim of mechanic’s lien in the amount of

$24,995.19. (FACC, ¶ 34.) Andros has never provided lien releases for the payments Koranda made on April 30 and May 3, 2024, totaling $25,721.79. (Ibid.)

In October 2025, Koranda sold the Residence and was required to purchase a lien release bond to complete escrow requirements. (FACC, ¶ 35.)

On November 19, 2025, Andros filed a demurrer to the FACC, arguing that the second, third, fourth, and fifth causes of action (COAs) do not state facts sufficient to constitute a cause of action. Andros also filed a motion to strike the prayer for punitive damages in the FACC and the request for attorney fees in the conversion COA. The demurrer and the motion to strike are opposed.

Analysis:

(1)       Standard on Demurrer

“Because the function of a demurrer is to test the sufficiency of a pleading as a matter of law, we … assume the truth of the allegations in the complaint, but do not assume the truth of contentions, deductions, or conclusions of law. [Citation.] It is error for the trial court to sustain a demurrer if the plaintiff has stated a cause of action under any possible legal theory, and it is an abuse of discretion for the court to sustain a demurrer without leave to amend if the plaintiff has shown there is a reasonable possibility a defect can be cured by amendment.” (California Logistics, Inc. v. State of California (2008) 161 Cal.App.4th 242, 247.) “The reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded.” (Payne v. National Collection Systems, Inc. (2001) 91 Cal.App.4th 1037, 1043.) “[I]n ruling on a demurrer the trial court may take into account in addition to the complaint itself any matter that may be properly considered under the doctrine of judicial notice.” (Cruz v. County of Los Angeles (1985) 173 Cal.App.3d 1131, 1133-1134.)

(2)       Third COA for Intentional Misrepresentation (Referenced as the Fourth COA in the Body of the FACC)

“To establish a claim for deceit based on intentional misrepresentation, the plaintiff must prove seven essential elements: (1) the defendant represented to the plaintiff that an important fact was true; (2) that representation was false; (3) the defendant knew that the representation was false when the defendant made it, or the defendant made the representation recklessly and without regard for its truth; (4) the defendant intended that the plaintiff rely on the representation; (5) the plaintiff reasonably relied on the representation; (6) the plaintiff was harmed; and (7) the plaintiff’s reliance on the defendant’s representation was a substantial factor in causing that harm to the plaintiff.” (Manderville v. PCG&S Group, Inc. (2007) 146 Cal.App.4th 1486, 1498, italics omitted.)

“In California, fraud must be pled specifically; general and conclusory allegations do not suffice. [Citations.] … This particularity requirement necessitates pleading facts which ‘show how, when, where, to whom, and by what means the representations were tendered.’ [Citation.] A plaintiff’s burden in asserting a fraud claim against a corporate employer is even greater. In such a case, the plaintiff must ‘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.’ [Citation.] (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645 (Lazar).). “Fraud in the inducement is a subset of the tort of fraud. It occurs when ‘the promisor knows what he is signing but his consent is induced by fraud, mutual assent is present and a contract is formed, which, by reason of the fraud, is voidable.’ ” (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294-295, internal quotations omitted.)

The FACC alleges that on April 30, 2024, at Andros’ place of business, Norton represented that Koranda was required to pay all of the HI Contract up front. (FACC, ¶ 69.) On May 3, 2024, at Andros’ place of business, Norton allegedly represented that Koranda was required to pay $19,000 on the Materials Contract as an up-front, down payment. (Ibid.) California law allegedly precludes such down payments in these amounts as a matter of law. (See FACC, ¶¶ 70-71.) Norton allegedly knew these statements were false when made, but he nonetheless made them to induce Koranda to make payments to Andros. (See FACC, ¶ 70.) Had Koranda known these statements were false, the FACC alleges that she would not have made these payments or entered into these contracts. (See ibid.) Koranda allegedly made these payments and entered into these contracts relying on the false representations made by Norton. (See FACC, ¶¶ 70-71.)

The FACC also alleges that on April 30, 2024, at Andros’ place of business, Norton represented to Koranda that Andros would provide her with a physical sample of the proposed new wood flooring before it was purchased so she could place it on the floor next to the wood she wanted to match. (FACC, ¶ 67.) The FACC alleges that Norton knew that this representation was false when he made it, but he made it anyway to induce Koranda into hiring Andros and paying money to Andros. (FACC, ¶ 68.) Had Koranda known that these representations were false, she would not have hired Andros or paid money to Andros. (Ibid.) The elements of fraud based on the theory of inducement to enter into a contract have been alleged.

Koranda argues that the FACC does not sufficiently allege that Norton, who allegedly made the misrepresentations inducing Koranda into these contracts, had authority to speak or act on behalf of Andros. The FACC alleges the contracts with Andros were sold and presented by Norton: “The contracts were sold and presented to Koranda by John Norton and Glen Wolf on April 29 (HI Contract) and May 3 (Materials Contract).” (FACC, ¶ 73.) The HI Contract appears to have been signed by Norton. (FACC, Ex. A at pp. 2-3.) The initials “JN” are placed in several locations where indicated on the HI Contract. (Id. at pp. 1, 3-4.) The initials “JN/GW” are placed on the Materials Contract as the “Salesperson.” (FACC, Ex. A at p. 1.) The FACC alleges that Norton instructed Koranda as to when and how to make payments to Andros, while at Andros’ place of business. (See FACC, ¶¶ 69-71.)

These allegations state facts sufficient to allege that Norton was acting on behalf of Andros as a sales representative. “[A] private corporation is generally liable under the doctrine of respondeat superior for torts of its agents or employees committed while they are acting within the scope of their employment....” (Persson v. Smart Inventions, Inc. (2005) 125 Cal.App.4th 1141, 1167.” The court notes that Andros’ precise legal relationship with Norton is within the unique knowledge of Andros under these circumstances and therefore less specificity is required. (See Tenet Healthsystem Desert, Inc. v. Blue Cross of California (2016) 245 Cal.App.4th 821, 840.)

The court will overrule the demurrer to the intentional misrepresentation COA.

(3)       Second COA for Negligent Misrepresentation

“The elements of a negligent misrepresentation are ‘(1) the misrepresentation of a past or existing material fact, (2) without reasonable ground for believing it to be true, (3) with intent to induce another’s reliance on the fact misrepresented, (4) justifiable reliance on the misrepresentation, and (5) resulting damage.’ [Citation.] Negligent misrepresentation does not require knowledge of falsity.” (Borman v. Brown (2021) 59 Cal.App.5th 1048, 1060.) “For policy reasons, some causes of action, such as fraud and negligent misrepresentation, must be pleaded with particularity—that is, the pleading must set forth how, when, where, to whom, and by what means the representations were made.” (Foster v. Sexton (2021) 61 Cal.App.5th 998, 1028.)

To support the negligent misrepresentation COA, the FACC relies on the same alleged misrepresentations by Norton that were alleged in support of the intentional misrepresentation COA. (See FACC, ¶¶ 55-64.) The FACC alleges in the alternative that these misrepresentations were made without reasonable grounds. (See ibid.) The elements of negligent misrepresentation have been alleged. (See ibid.)

The court will overrule the demurrer to the second COA for negligent misrepresentation.

(3)       Fourth COA for Elder Abuse (Referenced as the Fifth COA in the Body of the FACC)

Financial elder abuse is defined by statute. (Welf. & Inst. Code, §§ 15610.30, 15657.5.) “Where it is proven by a preponderance of the evidence that a defendant is liable for financial abuse … in addition to compensatory damages … the court shall award to the plaintiff reasonable attorney’s fees and costs.” (Welf. & Inst. Code, § 15657.5, subd. (a).) Financial abuse occurs when a person “[t]akes, secretes, appropriates, obtains, or retains real or personal property of an elder or dependent adult for a wrongful use or with intent to defraud, or both.” (Welf. & Inst. Code, § 15610.30, subd. (a)(1).) “A person or entity shall be deemed to have taken, secreted, appropriated, obtained, or retained property for a wrongful use if, among other things, the person or entity takes, secretes, appropriates, obtains, or retains the property and the person or entity knew or should have known that this conduct is likely to be harmful to the elder or dependent adult.” (Id., § 15610.30, subd. (b).)

The FACC alleges that Koranda is 78 years old and was required by Andros to pay substantial, up-front payments in excess of what is allowed by law. (FACC, ¶¶ 69-71, 88-96.) As alleged in the FACC, California law precludes home improvement contractors from requesting downpayments which exceed $1,000 or 10% of the contract price, whichever is less, or requiring payment for materials not delivered in excess of the downpayment. (See Bus. & Prof. Code, §§ 7159, subds. (d)(8)(C), (d)(8)(C), 7151.2, subd. (a)(5).) Norton allegedly required that Koranda pay all or substantially all of the HI Contract and Materials Contract before any work had been performed or materials had been ordered. (FACC, ¶¶ 69-71, 92-96.) The FACC alleges that Andros wrongfully obtained Koranda’s personal property by requiring these up-front payments in violation of California law. The FACC alleges the elements of elder abuse.

The court will overrule the demurrer as to the elder abuse COA.

(4)       Fifth COA for Conversion (Note: Both the Elder Abuse COA and the Conversion COA Are Labeled as the Fifth COA in the Body of the FACC)

“Conversion is generally described as the wrongful exercise of dominion over the personal property of another. [Citation.] The basic elements of the tort are (1) the plaintiff’s ownership or right to possession of personal property; (2) the defendant’s disposition of the property in a manner that is inconsistent with the plaintiff's property rights; and (3) resulting damages.” [Citations.] ‘Conversion is a strict liability tort. The foundation of the action rests neither in the knowledge nor the intent of the defendant. Instead, the tort consists in the breach of an absolute duty; the act of conversion itself is tortious. Therefore, questions of the defendant’s good faith, lack of knowledge, and motive are ordinarily immaterial.’ ” (Regent Alliance Ltd. v. Rabizadeh (2014) 231 Cal.App.4th 1177, 1181.) “Money may be the subject of conversion if the claim involves a specific, identifiable sum; it is not necessary that each coin or bill be earmarked.” (Welco Electronics, Inc. v. Mora (2014) 223 Cal.App.4th 202, 209.) “[C]onversion is a tort that may be committed only with relation to personal property and not real property.” (Munger v. Moore (1970) 11 Cal.App.3d 1, 7.)

The FACC alleges that Norton and Andros “converted Koranda’s personal property by charging her unlawful downpayments and charging her for work that had not been performed and for materials that had not been delivered.” (FACC, ¶ 105.) The alleged monetary payments are identifiable sums. (FACC, ¶ 74.) “In addition, Andros [allegedly] converted Koranda’s personal property by demolishing her bathroom without authorization.” (FACC, ¶ 104.) The elements of conversion have been alleged. “[A]ny act of dominion wrongfully exerted over the personal property of another inconsistent with the owner’s rights thereto constitutes conversion.” (Plummer v. Day/Eisenberg, LLP (2010) 184 Cal.App.4th 38, 50.) “In a conversion action the plaintiff need show only that he was entitled to possession at the time of conversion. (Enterprise Leasing Corp. v. Shugart Corp. (1991) 231 Cal.App.3d 737, 748.) The court will overrule the demurrer as to the conversion COA.

(4)       Motion to Strike     

“Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof ….” (Code Civ. Proc., § 435, subd. (b)(1).) “The court may, upon a motion made pursuant to [s]ection 435, or at any time in its discretion, and upon terms it deems proper: [¶] … [s]trike out any irrelevant, false, or improper matter inserted in any pleading.” (Code Civ. Proc., § 436, subd. (a).) “In passing on the correctness of a ruling on a motion to strike, judges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.” (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255 (Clauson).)

This motion to strike seeks to strike the prayer for punitive damages in the FACC as to the intentional misrepresentation COA (FACC, ¶ 86), the elder abuse COA (FACC, ¶ 101), the conversion COA (FACC, ¶ 107), and the general prayer for relief. (Mtn. to Strike, p. 2, ll. 12-27.) This motion also seeks to strike the request for attorney fees as to the conversion COA. (Id., p. 2, ll. 24-26.)

“In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.” (Civ. Code, § 3294, subd. (a).) “Not only must there be circumstances of oppression, fraud or malice, but facts must be alleged in the pleading to support such a claim.” (Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166.) “ ‘Malice’ means conduct which is intended by the defendant to cause injury to the plaintiff ….” (Civ. Code, § 3294, subd. (c)(1).) “Fraud” means “an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.” (Id., subd. (c)(3).) “In order to survive a motion to strike an allegation of punitive damages, the ultimate facts showing an entitlement to such relief must be pled by a plaintiff.” (Clauson, supra, 67 Cal.App.4th at p. 1255.)

As to the FACC’s prayer for punitive damages, assuming the allegations in the FACC are true, Andros fraudulently converted the funds of Koranda, a 78 year-old elder, by means it knew were expressly prohibited by California law, and induced her to enter into a contracts by fraudulent representations. This is sufficient to allege malice and fraud at the pleading stage. (Civ. Code, § 3294, subds. (c)(1), (c)(3).) The court will deny the motion to strike the prayer for punitive damages.

As to the request for attorney fees under the conversion COA, Koranda withdrew her request for attorney fees as to this COA. (Koranda Opp. to Mtn. to Strike, p. 11, ll. 22-23.) The court construes Koranda’s withdrawal as a concession that the motion to strike was meritorious on this issue. The court will grant the motion to strike the request for attorney fees as to the conversion COA without leave to amend.