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Legal Memorandum: Pleading Fraud on a Demurrer in CA

Issue: What is necessary to adequately plead fraud on a demurrer in California?

Area of Law: Litigation & Procedure
Keywords: Demurrer; Fraud pleading
Jurisdiction: California
Cited Cases: 118 Cal. App. 4th 861; 37 Cal. App. 4th 1397; 174 Cal. 218
Cited Statutes: None
Date: 09/01/2008

 

The elements of fraud are (1) a misrepresentation (false representation, concealment or nondisclosure); (2) knowledge of falsity (or scienter); (3) intent to defraud, i.e. to induce reliance; (4) justifiable reliance; and (5) resulting damage.

Robinson Helicopter Co. v. Dana Corp. (2004) 34 Cal. 4th 979, 990. 

On a demurrer, a plaintiff is not required to “show” any particular fact; rather, all that is required is that a plaintiff alleges the necessary facts.  See Aragon-Haas v. Family Sec. Ins. Servs., Inc. (2d Dist. 1991) 231 Cal. App. 3d at 238. 

There are several well-known exceptions to this general rule.  See Warner Constr. Corp. v. City of Los Angeles (1970) 2 Cal. 3d 285, 294.  One of these is that where “the defendant actively conceals discovery from the plaintiff” a cause of action for fraud may be stated for the failure to disclose.  Id. at 293.  In other words, active concealment or suppression of material facts, even by a non-fiduciary, “is the equivalent of a false representation, i.e. actual fraud.”  Vega v. Jones, Day, Reavis & Pogue (2d Dist. 2004) 121 Cal. App. 4th 282, 291. 

If a plaintiff properly alleges active concealment, non-disclosure may constitute fraud even absent allegations of a fiduciary relationship.  Vega v. Jones, Day, Reavis & Pogue (2d Dist. 2004) 121 Cal. App. 4th 282, 291

The applicable rule is that there must be allegations which show either directly “or by reasonable […]

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