Preview
Clerk of the Superior Court
*** Electronically Filed ***
T. Molchan, Deputy
2/23/2024 3:32:36 PM
Filing ID 17396349
1 Bryan J. Gottfredson, AZ #025140
gottfredson@sackstierney.com
2 Lauren M. Reynolds, AZ #031801
reynolds@sackstierney.com
3 SACKS TIERNEY P.A.
4250 N. Drinkwater Blvd., 4th Floor
4 Scottsdale, AZ 85251-3693
Telephone: 480.425.2600
5
6 Attorneys for Plaintiff Sargon Masonry
Construction, LLC
7
8
SUPERIOR COURT OF ARIZONA
9
MARICOPA COUNTY
10
Sargon Masonry Construction, LLC, an
11 Arizona limited liability company,
No. CV2024-003633
P.A., ATTORNEYS
12 Plaintiff,
4250 NORTH DRINKWATER BOULEVARD
COMPLAINT
SCOTTSDALE, ARIZONA 85251-3693
13 v.
(Breach of Contract, Breach of Covenant of
FOURTH FLOOR
14 Solrac Construction, LLC, an Arizona Good Faith and Fair Dealing, Unjust
SACKS TIERNEY
limited liability company; Carlos Flores Enrichment, Negligent Misrepresentation,
15 and Nancy Pina, husband and wife; Aiding and Abetting, Breach of Fiduciary Duty,
Isaac Perez, an unmarried man; John Civil Conspiracy, and Piercing the Corporate
16 Does and Jane Does I-X; ABC Veil)
Partnerships I-X; ABC Limited
17 Liability Companies I-X; and XYZ
Corporations I-X,
18
Defendant.
19
20
For its Complaint against Defendants Solrac Construction, LLC and Carlos Flores,
21
Nancy Pina, and Isaac Perez (collectively “Defendants”), Plaintiff, Sargon Masonry
22
Construction, LLC, (“Plaintiff”) alleges as follows:
23
THE PARTIES
24
1. Plaintiff Sargon Masonry Construction, LLC (“Sargon”) is an Arizona limited
25
26 liability company authorized to do business in Arizona.
27 2. At all times material hereto, Sargon was and continues to be a licensed
28 contractor with the Arizona Registrar of Contractors.
3717986.v1
1 3. Upon information and belief, Defendant, Solrac Construction, LLC (“Solrac”)
2 is an Arizona limited liability company authorized to do business in Arizona.
3 4. Upon information and belief, in or around August of 2019, Carlos Flores and
4 Nancy Pina formed Solrac.
5 5. Upon information and belief, Defendants Carlos Flores (“Flores”) and Nancy
6 Pina (“Pina”) are husband and wife, domiciled in Maricopa County, Arizona.
7 6. Upon information and belief, at all times material hereto, Flores acted on behalf
8 of his sole and separate property and on behalf of the marital community existing between
9 himself and Nancy Pina.
10 7. Upon information and belief, at all times material hereto, Nancy Pina acted on
11 behalf of her sole and separate property and on behalf of the marital community existing
12 between herself and Flores.
P.A., ATTORNEYS
13 8. Upon information and belief, Flores and Pina are each managers and members
4250 NORTH DRINKWATER BOULEVARD
SCOTTSDALE, ARIZONA 85251-3693
14 of Solrac.
FOURTH FLOOR
15 9. Upon information and belief, at all times material hereto, Flores was authorized
SACKS TIERNEY
16 to act for Solrac, for all material purposes, and did so act.
17 10. Upon information and belief, at all times material hereto, Nancy Pina was
18 authorized to act for Solrac, for all material purposes, and did so act.
19 11. Upon information and belief, at all times material hereto, Flores, Nancy Pina,
20 and Solrac acted in concert with one another.
21 12. Defendant Isaac Perez (“Perez”) is an unmarried man, domiciled in Maricopa
22 County, Arizona.
23 13. Defendant John Does and Jane Does I-X, ABC Partnerships I-X, ABC Limited
Liability Companies I-X, and XYZ Corporations I-X (collectively, the “Doe Defendants”)
24
are individuals, corporations, partnerships, or other entities whose true names are unknown
25
to Sargon. Sargon is informed, believes, and alleges that the Doe Defendants were involved
26
in, or in some manner responsible as the principal, beneficiary, agent, co-conspirator, joint
27
venturer, alter ego, third-party beneficiary, or otherwise, for the agreements, transactions,
28
2
3717986.v1
1 events, and/or acts hereinafter described, and thereby proximately caused injuries and
2 damages to Sargon as herein alleged. Sargon requests leave of the Court to insert the true and
3 correct name of any Doe Defendants at such time as they become known to Sargon.
4 14. Defendants have caused certain events to occur in Maricopa County, Arizona,
5 giving rise to Plaintiff’s claims.
6 VENUE AND JURISDICTION
7 15. This Court has jurisdiction of the subject matter and of the parties.
8 16. Venue in this Court is proper pursuant to A.R.S. §12-401.
9 17. This case is a Tier 3 Case pursuant to Rule 26.2, Arizona Rules of Civil
10 Procedure.
11 GENERAL ALLEGATIONS
12 Sargon Retained Flores Roofing, LLC and Solrac Construction, LLC to Provide
P.A., ATTORNEYS
13 Labor on Sargon’s Construction Projects
4250 NORTH DRINKWATER BOULEVARD
SCOTTSDALE, ARIZONA 85251-3693
14 18. Sargon is a contracting company specializing in masonry, stone, and steel
FOURTH FLOOR
15 construction.
SACKS TIERNEY
16 19. From approximately April 14, 2014 to October 28, 2022, Perez was employed
17 by Sargon.
18 20. From approximately January 25, 2018 to October 28, 2022, Perez was
19 employed by Sargon as a general superintendent.
20 21. As the general superintendent at Sargon, Perez was responsible for ensuring
21 that all Sargon’s superintendents were following proper procedures, keeping construction
22 projects on schedule, and complying with Sargon’s policies and company values.
23 22. Additionally, as general superintendent at Sargon, Perez was responsible for
24 finding, hiring, and coordinating labor crews to work on Sargon’s construction projects.
25 23. In or around April of 2020 through October of 2022, Perez (in his capacity as
Sargon’s general superintendent) retained Solrac as a subcontractor to provide labor for
26
Sargon’s use on various construction projects.
27
24. After termination of Perez’s employment with Sargon, Sargon continued to
28
3
3717986.v1
1 retain Solrac as a subcontractor to provide labor for Sargon’s use on various construction
2 projects through October of 2023.
3 25. Between April of 2020 and October of 2023, Sargon and Solrac entered into
4 numerous agreements in connection with Solrac’s provision of labor for Sargon’s use on
5 some of its construction projects (the “Agreements”).
6 26. Specifically, pursuant to the Agreements, in exchange for Solrac providing
7 labor, Sargon agreed to pay Solrac; (1) an amount for the labor itself (the “Payment for
8 Labor”); and (2) an additional percentage of that amount for an agreed-to profit for Solrac
9 (the “Markup”).
10 27. The metric used to determine the Payment for Labor was a measurement of
11 progress towards completion of the work Solrac’s labor force was retained to complete. For
12 instance, in connection with labor provided to perform masonry work, the Payment for Labor
P.A., ATTORNEYS
13 was calculated using a specified price per linear foot of wall completed.
4250 NORTH DRINKWATER BOULEVARD
SCOTTSDALE, ARIZONA 85251-3693
14 28. As for the Markup, the Sargon agreed to provide a Markup component of the
FOURTH FLOOR
15 payment equivalent to 10% of the Payment for Labor.
SACKS TIERNEY
16 29. Between April of 2021 and November 2023, Sargon paid Solrac approximately
17 $12,858,869.85 pursuant to the Agreements and in connection with Solrac’s provision of
18 labor crews for Sargon’s use on its construction projects.
19 Solrac’s Inflation of the Markup
20 30. While employed by Sargon as general superintendent, Perez was responsible
21 for scheduling and coordinating labor from Solrac and ensuring accurate payment to Solrac.
22 31. Solrac would report purported hours worked by labor crews on timesheets
23 associated with each construction project in which it provided labor.
32. Prior to Perez’s resignation from Sargon, the superintendents at each of
24
Sargon’s construction projects collected all of the timesheets from labor crews provided by
25
Solrac and provided them to Perez on a weekly basis.
26
33. Upon information and belief, each week, Perez then provided the timesheets
27
directly to Solrac and/or Flores for processing.
28
4
3717986.v1
1 34. Solrac would then provide Sargon with (a) a spreadsheet reflecting each
2 construction project, the progress on each construction project for that week, the rates for the
3 type of work on each construction project, and an accounting of each construction project
4 (the “Solrac Spreadsheets”); and (b) invoices for each construction project reflecting the total
5 amount to be paid to Solrac by Sargon on a weekly basis (the “Invoices”).
6 35. After Perez resigned from his position at Sargon, Solrac continued to provide
7 Sargon with the Solrac Spreadsheets and Invoices on a weekly basis.
8 36. The total amount to be paid on each of the Invoices should have reflected the
9 sum of (a) the Payment for Labor and (b) the Markup.
10 37. Unbeknownst to Sargon, however, the majority of the Invoices delivered by
11 Solrac to Sargon during this time period included an inflated Markup.
12 38. Upon information and belief, Flores and Perez were aware of the inflated
P.A., ATTORNEYS
13 Markup and consciously attempted to have Sargon pay more than what Sargon had agreed
4250 NORTH DRINKWATER BOULEVARD
SCOTTSDALE, ARIZONA 85251-3693
14 to.
FOURTH FLOOR
15 Perez’s Approval of the Invoices
SACKS TIERNEY
16 39. Perez was responsible for reviewing the Solrac Spreadsheets and ensuring the
17 Invoices accurately reflected the agreed upon Payment for Labor plus the appropriate
18 Markup.
19 40. Unbeknownst to Sargon, prior to Perez processing and approving the Invoices
20 for payment by Sargon, Solrac provided Perez with more detailed versions of the Invoices,
21 which showed the Markup in many of the Invoices to be inaccurate (the “Detailed Invoices”).
22 41. Perez knew or should have known that the Invoices delivered to him from
23 Solrac included an inflated Markup.
42. Upon receipt of the Invoices, however, Perez initialed and approved the
24
Invoices.
25
43. Perez never shared the Detailed Invoices with anyone else at Sargon.
26
44. Instead, Perez only submitted alternative Invoices, which lacked the details
27
included in the Detailed Invoices, to Sargon’s accounting department for payment.
28
5
3717986.v1
1 Sargon’s Payment of the Invoices
2 45. Throughout its time as a subcontractor for Sargon, Solrac inflated the Markup,
3 resulting in hundreds of inflated Invoices, which Perez knew were false, yet approved and
4 submitted to Sargon’s accounting department for payment anyway.
5 46. Relying on Solrac’s Invoices and Perez’s approval of the Invoices, Sargon’s
6 accounting department would then issue a check to Solrac for the amount reflected in the
7 Invoices.
8 47. As a result of Defendants’ conduct in inappropriately inflating the Markup and
9 submitting false and/or inflated Invoices, Sargon has overpaid Solrac and been damaged in
10 an amount in excess of $1,000,000.00.
11 The Detailed Invoices and Defendants’ Attempts to Conceal Their Scheme
12 48. Upon information and belief, each time Sargon paid an Invoice to Solrac,
P.A., ATTORNEYS
13 Solrac issued several checks from the amounts paid by Sargon to the labor crews, as reflected
4250 NORTH DRINKWATER BOULEVARD
SCOTTSDALE, ARIZONA 85251-3693
14 on the Detailed Invoices.
FOURTH FLOOR
15 49. Solrac would then provide the checks to Perez to distribute to Solrac crews
SACKS TIERNEY
16 who purportedly performed labor at various construction jobs.
17 50. Upon information and belief, Solrac also issued checks from the amounts paid
18 by Sargon to individuals who were not on Solrac labor crews and did not provide any labor,
19 including Isaac Perez, Nancy Pina, and numerous others.
20 51. Upon information and belief, Solrac, Flores, and Perez attempted to conceal
21 the amounts Sargon paid Solrac in connection with the inflated Markup by issuing checks to
22 fictitious individuals and/or individuals who were not part of the labor crews who were
23 purportedly performing the work on Sargon jobs.
52. For example, many of the Detailed Invoices reflect that after receiving payment
24
from Sargon on a particular job, Solrac also issued checks to an individual named Carmen
25
Vazquez.
26
53. Solrac claimed Carmen Vazquez was on a labor crew for Solrac and working
27
on Sargon’s construction projects.
28
6
3717986.v1
1 54. Sargon has no records of Carmen Vazquez working on a labor crew for Solrac
2 on any of Sargon’s construction projects.
3 55. However, between June 8, 2023 and September 7, 2023 alone, Solrac issued
4 approximately $225,000.00 in checks to a fictitious Carmen Vazquez for work performed on
5 Sargon’s construction projects in an effort to cover-up the inflated Markup it was charging
6 to Sargon.
7 56. Upon information and belief, Defendants cashed the checks issued to Carmen
8 Vazquez and paid themselves the proceeds of these cashed checks.
9 COUNT ONE
10 Breach of Contract
11 Against Solrac and Flores
12 57. Plaintiff incorporates by reference all allegations contained in the foregoing
P.A., ATTORNEYS
13 paragraphs.
4250 NORTH DRINKWATER BOULEVARD
SCOTTSDALE, ARIZONA 85251-3693
14 58. The Agreements were valid and enforceable contracts between Sargon and
FOURTH FLOOR
15 Solrac.
SACKS TIERNEY
16 59. Pursuant to the Agreements, Solrac agreed to provide Sargon labor crews in
17 exchange for the Payment for Labor plus the agreed-to Markup.
18 60. As set forth above, Solrac knowingly and without Sargon’s authorization,
19 charged Sargon in excess of the amount agreed to pursuant to the Agreements.
20 61. As set forth above, due to Solrac and Perez’ scheme, Sargon paid Solrac in
21 excess of the amount agreed to pursuant to the Agreements by millions of dollars.
22 62. Given the above, Solrac breached the Agreements.
23 63. As a direct and proximate cause of Solrac’s breach of the Agreements, Sargon
24 has been damaged in an amount to be determined at trial.
25 64. At all times material hereto, Solrac, Carlos Flores, and Nancy Pina acted on
behalf of or in concert with one another, such that they are jointly and severally or vicariously
26
responsible for the acts of the other, as complained of herein.
27
65. Pursuant to A.R.S. 12-341 and 12-341.01, Sargon is entitled to recover its
28
7
3717986.v1
1 reasonable attorneys’ fees and costs.
2 COUNT TWO
3 Breach of Covenant of Good Faith and Fair Dealing
4 Against Solrac and Flores
5 66. Plaintiff incorporates by reference all allegations contained in the foregoing
6 paragraphs.
7 67. A covenant of good faith and fair dealing is implied in every contract under
8 Arizona law.
9 68. Solrac was obligated to act in Sargon’s best interest and not prevent Sargon
10 from receiving the benefits of the Agreements.
11 69. Solrac’s actions, as set forth above, demonstrate Solrac acted to deny Sargon
12 the benefits of the Agreements.
P.A., ATTORNEYS
13 70. Solrac’s conduct was in bad faith and constitutes breach of the covenant of
4250 NORTH DRINKWATER BOULEVARD
SCOTTSDALE, ARIZONA 85251-3693
14 good faith and fair dealing.
FOURTH FLOOR
15 71. As a direct and proximate cause of Solrac’s actions to deny Sargon the benefits
SACKS TIERNEY
16 of the Agreements, Sargon has been damaged in an amount to be determined at trial.
17 72. At all times material hereto, Solrac, Carlos Flores, and Nancy Pina acted on
18 behalf of or in concert with one another, such that they are jointly and severally or vicariously
19 responsible for the acts of the other, as complained of herein.
20 73. Solrac, Carlos Flores, and Nancy Pina acted with an evil hand and evil mind
21 such that Sargon is entitled to an award of punitive damages against Defendants.
22 74. Pursuant to A.R.S. 12-341 and 12-341.01, Sargon is entitled to recover its
23 reasonable attorneys’ fees and costs.
24 COUNT THREE
25 Unjust Enrichment
26 Against All Defendants
27 75. Plaintiff incorporates by reference all allegations contained in the foregoing
28 paragraphs.
8
3717986.v1
1 76. Defendants have been enriched and have received a direct and material benefit
2 as a result of Sargon’s overpayment relating to the Invoices and purported work performed
3 by Solrac.
4 77. Defendants’ enrichment has come at Sargon’s detriment.
5 78. Defendants’ enrichment and Sargon’s impoverishment are directly connected.
6 79. There is no justification for Defendants’ enrichment and Sargon’s
7 impoverishment, and it would be unjust for Defendants to retain such enrichment.
8 80. Sargon has no adequate remedy at law, so equitable relief is necessary.
9 81. Defendants have been unjustly enriched to the detriment of Sargon and Sargon
10 is entitled to recover damages in an amount to be determined at trial.
11 82. At all times material hereto, Solrac, Carlos Flores, and Nancy Pina acted on
12 behalf of or in concert with one another, such that they are jointly and severally or vicariously
P.A., ATTORNEYS
13 responsible for the acts of the other, as complained of herein.
4250 NORTH DRINKWATER BOULEVARD
SCOTTSDALE, ARIZONA 85251-3693
14 83. Defendants acted with an evil hand and evil mind such that Sargon is entitled
FOURTH FLOOR
15 to an award of punitive damages against Defendants.
SACKS TIERNEY
16 COUNT FOUR
17 Negligent Misrepresentation
18 Against All Defendants
19 84. Plaintiff incorporates by reference all allegations contained in the foregoing
20 paragraphs.
21 85. As set forth above, through the Invoices, Defendants made numerous
22 representations regarding the amounts owed to Solrac by Sargon.
23 86. In numerous instances, however, the representations made by Defendants in
24 the Invoices, and in connection with the Invoices, were false.
25 87. Upon information and belief, Defendants knew the representations regarding
the amounts owed to Solrac by Sargon were false, but created a scheme unbeknownst to
26
Sargon, whereby Perez would approve the falsified Invoices and submitted them to Sargon’s
27
accounting department for payment to Solrac.
28
9
3717986.v1
1 88. Sargon trusted Perez and that he would honor his duty of loyalty as an
2 employee of Sargon.
3 89. Sargon trusted Solrac and Flores and that they would honor the Agreements
4 and operate in good faith.
5 90. Defendants intended, or could reasonably foresee, that Sargon would rely on
6 the falsified Invoices and Perez’s approval of them for payment.
7 91. Defendants failed to exercise reasonable care in providing the Invoices to
8 Sargon and acted with negligent or reckless disregard as to the truthfulness of the
9 representations contained in the Invoices.
10 92. Perez failed to exercise reasonable care in approving the Invoices and acted
11 with negligent or reckless disregard as to the truthfulness of the representations contained in
12 the Invoices.
P.A., ATTORNEYS
13 93. The representations made by Defendants via their scheme to approve and
4250 NORTH DRINKWATER BOULEVARD
SCOTTSDALE, ARIZONA 85251-3693
14 submit false Invoices were material in Sargon’s decision to pay Solrac the amounts specified
FOURTH FLOOR
15 in the Invoices.
SACKS TIERNEY
16 94. The representations made by Defendants via their scheme to approve and
17 submit false Invoices were relied upon by and induced Sargon to pay Solrac the amounts
18 specified in the Invoices.
19 95. Sargon was ignorant of the falsity of the representations made by Defendants
20 in connection with the Invoices.
21 96. Defendants knew or should have known that the representations made by Perez
22 and in the Invoices were false and that the Invoices did not provide an accurate calculation
23 of the amounts owed to Solrac by Sargon.
97. Sargon had a right to rely on the Invoices created by Solrac and Perez’s
24
approval of them.
25
98. As a result of Defendants’ negligent misrepresentations in connection with the
26
Invoices, Sargon has been damaged in an amount to be determined at trial.
27
99. Defendants acted with an evil hand and evil mind such that Sargon is entitled
28
10
3717986.v1
1 to an award of punitive damages against Defendants.
2 100. At all times material hereto, Solrac, Carlos Flores, and Nancy Pina acted on
3 behalf of or in concert with one another, such that they are jointly and severally or vicariously
4 responsible for the acts of the other, as complained of herein.
5 COUNT FIVE
6 Aiding and Abetting Breach of Contract and Negligent Misrepresentation
7 Against Perez
8 101. Plaintiff incorporates by reference all allegations contained in the foregoing
9 paragraphs.
10 102. Perez knew Solrac, Flores and Pina were inflating the Markup and making
11 misrepresentations in the Invoices.
12 103. Perez, however, approved the Invoices and submitted them to Sargon’s
P.A., ATTORNEYS
13 accounting department for payment.
4250 NORTH DRINKWATER BOULEVARD
SCOTTSDALE, ARIZONA 85251-3693
14 104. As such, Perez substantially assisted or encouraged Solrac, Flores and Pina in
FOURTH FLOOR
15 their actions.
SACKS TIERNEY
16 105. There is a direct causal nexus between Perez’s assistance and encouragement
17 and the damage to Sargon as a result of paying the inflated Markup.
18 106. As a result of Perez’s aiding and abetting as alleged herein, Sargon has been
19 damaged in an amount to be determined at trial.
20 107. Perez acted with an evil hand and evil mind such that Sargon is entitled to an
21 award of punitive damages against Perez.
22 COUNT SIX
23 Breach of Fiduciary Duty
24 Against Perez
25 108. Plaintiff incorporates by reference all allegations contained in the foregoing
26 paragraphs.
27 109. As an employee of Sargon, Perez owed Sargon a fiduciary duty, which includes
28 duties of loyalty and conscientious service and a duty to act in Sargon’s best interest.
11
3717986.v1
1 110. Perez knew Solrac was inflating the Markup and making misrepresentations in
2 the Invoices.
3 111. Perez, however, knowingly approved the falsified Invoices and submitted them
4 to Sargon’s accounting department for payment.
5 112. During his employment with Sargon, Perez violated his duties of loyalty and
6 conscientious service by engaging in the acts set forth above.
7 113. Furthermore, Perez failed to act in good faith and in Sargon’s best interests.
8 114. As a result of Perez’s breach of fiduciary duties as alleged herein, Sargon has
9 been damaged in an amount to be determined at trial.
10 115. Perez’s actions were intentional, aggravated, outrageous, and breached the
11 fiduciary duties he owed to Sargon.
12 116. Perez acted with an evil hand and evil mind such that Sargon is entitled to an
P.A., ATTORNEYS
13 award of punitive damages against Perez.
4250 NORTH DRINKWATER BOULEVARD
SCOTTSDALE, ARIZONA 85251-3693
14 COUNT SEVEN
FOURTH FLOOR
15 Civil Conspiracy
SACKS TIERNEY
16 Against All Defendants
17 117. Plaintiff incorporates by reference all allegations contained in the foregoing
18 paragraphs.
19 118. As alleged herein, Solrac issued Invoices to Sargon including an inflated
20 Markup and Perez approved the Invoices and submitted them to Sargon’s accounting
21 department for payment.
22 119. Upon information and belief, Defendants conspired and agreed amongst
23 themselves to defraud Sargon into paying an inflated Markup.
24 120. In furtherance of this conspiracy, Defendants concealed from Sargon the fact
25 that the Invoices included an inflated Markup.
121. Additionally, in furtherance of this conspiracy, Defendants concealed from
26
Sargon the Detailed Invoices.
27
122. Additionally, in furtherance of this conspiracy, Defendants issued payments to
28
12
3717986.v1
1 fictitious individuals to conceal the inflated Markup.
2 123. As a result of the Defendants’ acts, Defendants defrauded Sargon, and Sargon
3 has been damaged in an amount to be determined at trial.
4 124. Defendants acted with an evil hand and evil mind such that Sargon is entitled
5 to an award of punitive damages against Defendants.
6 125. At all times material hereto, Solrac, Carlos Flores, and Nancy Pina acted on
7 behalf of or in concert with one another, such that they are jointly and severally or vicariously
8 responsible for the acts of the other, as complained of herein.
9 COUNT EIGHT
10 Piercing the Corporate Veil
11 Against Solrac, Flores, and Pina
12 126. Plaintiff incorporates by reference all allegations contained in the foregoing
P.A., ATTORNEYS
13 paragraphs.
4250 NORTH DRINKWATER BOULEVARD
SCOTTSDALE, ARIZONA 85251-3693
14 127. Solrac is the alter ego and/or conduit of Defendants Flores and Pina.
FOURTH FLOOR
15 128. Flores and Pina should not be allowed to commit fraud and other wrongdoings
SACKS TIERNEY
16 and then use a corporate entity or limited liability company to avoid personal liability.
17 129. Disregarding Solrac’s status as a limited liability company is necessary to
18 prevent injustice and fraud.
19 130. The Court should pierce the corporate veil of Solrac and hold Flores and Pina
20 jointly and severally liable for all wrongdoings alleged by Sargon.
21 PRAYER FOR RELIEF
22 WHEREFORE, Plaintiff prays for judgment on its Complaint against Defendants as
23 follows:
24 A. For an award of damages in an amount to be proven at trial;
25 B. For an award of punitive damages to deter Defendants from future acts such as
26 those complained of herein;
27 C. For an award of reasonable attorneys’ fees pursuant to A.R.S. §§ 12-341 and
28 12-341.01 and/or other applicable law,
13
3717986.v1
1 D. Interest on all said sums at the highest rate allowed by law from the date of
2 entry of judgment until fully paid;
3 E. For a trial by jury; and
4 F. For such other and further relief as the Court deems just and appropriate under
5 the circumstances.
6
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Notice to prevailing parties: Local Rule 2.10.01 requires you to submit a proposed formal
order incorporating, verbatim, the language of any tentative ruling – or attaching and
incorporating the tentative by reference - or an order consistent with the announced ruling of the
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even if the prevailing party submitted a proposed order prior to the hearing (unless the
tentative is simply to “grant”). Failure to comply with Local Rule 2.10.01 may result in the
imposition of sanctions following an order to show cause hearing, if a proposed order is not
timely filed.
1
Several special interrogatories are included in defendant’s Separate Statement that do not provide
reasons for further responses. Those interrogatories have not been included in this list since they are not
supported by the Separate Statement.
Page 2 of 2
Ruling
SUPERIOR INTEGRATED SERVICES, INC. vs QUINONEZ
Jul 25, 2024 |
Frank Anthony Moschetti |
CVCO2401857
MOTION TO STRIKE COMPLAINT ON
SUPERIOR INTEGRATED COMPLAINT FOR BREACH OF CONTRACT/
CVCO2401857
SERVICES VS QUINONEZ WARRANTY OF SUPERIOR INTEGRATED
SERVICES BY BRIAN QUINONEZ
Tentative Ruling: No tentative at this time, due to lack of notice as required pursuant to
Local Rule 3316.
Ruling
MARIA GUTIERREZ vs. AMERICAN HONDA MOTOR CO ., INC
Jul 17, 2024 |
C23-02657
C23-02657
CASE NAME: MARIA GUTIERREZ VS. AMERICAN HONDA MOTOR CO ., INC
HEARING ON DEMURRER TO: DEMURRER TO COMPLAINT
FILED BY: AMERICAN HONDA MOTOR CO ., INC
*TENTATIVE RULING:*
Before the Court is a demurrer to the second cause of action in plaintiff’s complaint, filed by
defendant American Honda Motor Co., Inc. (“Honda”), as well as Honda’s motion to strike portions of
plaintiffs’ complaint. As discussed below, the demurrer is overruled. The motion to strike is denied.
Defendant’s previous answer (filed April 22, 2024) is stricken, and defendant shall file a new answer
to the existing complaint by July 29, 2024.
I. Factual Background
This suit arises out of the purchase of a new Honda Pilot by plaintiff, Maria Sanchez Gutierrez,
on or about August 15, 2022. (Complaint, ¶8.) As part of the purchase, defendant Honda and plaintiff
entered into an express written contract, referred to as the New Vehicle Limited Warranty
(“Warranty”). (Complaint, ¶9.) The vehicle, sold by Honda of El Cerrito, an authorized dealership, was
equipped with Honda Sensing. The Complaint describes a defect with plaintiff’s vehicle in the Honda
Sensing system, a defect which causes the various subsystems within it to malfunction, including,
SUPERIOR COURT OF CALIFORNIA, CONTRA COSTA COUNTY
MARTINEZ, CA
DEPARTMENT 27
JUDICIAL OFFICER: TERRI MOCKLER
HEARING DATE: 07/17/2024
“most severely,” the Collision Mitigating Braking System ("CMBS"). (Complaint, ¶ 16; see also ¶¶13-
22, 84-85.)
Plaintiff asserts a Song-Beverly breach of warranty cause of action as well as a fraud cause of
action. In support of fraud, she asserts that Honda knew or should have known about the safety
hazard posed by the Honda Sensing Defect before the sale of vehicles such as hers. (Complaint, ¶23.)
She alleges that Honda knew about the defect from pre-market testing, consumer complaints to the
National Highway Traffic Safety Administration (“NHTSA”), consumer complaints, testing in response
to those complaints, high failure rates and replacement part sales data, and other sources which
drove Honda to issue Technical Service Bulletins acknowledging this defect. (Complaint, ¶23.) Plaintiff
alleges Honda should not have sold, leased, or marketed vehicles equipped with the Sensing Defect
without a full and complete disclosure of the defect, and should have voluntarily recalled all vehicles
equipped with the Sensing Defect long ago, but instead Honda sold and leased defective vehicles, and
continues to do so. (Complaint, ¶¶23-24.)
In purchasing the vehicle, plaintiff relied on the reputation and representations by Honda and
its agents, none of whom disclosed the defects. (Complaint, ¶¶87-88.) Shortly after purchase, she
began to experience problems which led her to bring the vehicle back for repairs covered under the
Warranty. Still, even after multiple attempts, the defendant did not bring the vehicle into conformity.
(Complaint, ¶¶88-104.)
Plaintiff initially filed this suit in San Francisco in May 2023, but it was transferred to this
Court in October of 2023. Defendant filed this demurrer in 2023. It was not opposed by plaintiff and
the Court issued a tentative ruling in February based on the lack of any opposition brief, sustaining
the demurrer with leave to amend. No one contested the tentative ruling, and no amended complaint
was filed. Honda then proceeded to file its answer (a general denial) on April 22, 2024. Pursuant to
stipulation, and because it appears the lack of opposition was due to plaintiff’s lack of notice, the
ruling on the demurrer was vacated on May 15, 2024. Nothing in the stipulation addressed the
previously filed answer and no moving papers were re-filed. However, because that answer
responded to the complaint to which the demurrer was sustained, the answer is no longer valid. In
light of this background, the Court strikes the answer previously filed to enable the present motions
to proceed.
Honda’s demurrer is directed at the second cause of action (inducement – concealment) on
the basis that plaintiff fails to state sufficient facts, as well as uncertainty. Honda also moves to strike
punitive damages.
Plaintiff opposed both motions on July 3, 2024. Plaintiff requests leave to amend in the event
the demurrer or motion to strike is granted.
II. Meet and Confer
Defendant’s counsel states a meet and confer was held by telephone on November 14, 2023,
pursuant to statutory requirements. (See Declaration of Monica Y. Hernandez, attached to
Memorandum of Points and Authorities in Support of Demurrer). Plaintiff does not dispute this
contention and the Court finds it is sufficient.
SUPERIOR COURT OF CALIFORNIA, CONTRA COSTA COUNTY
MARTINEZ, CA
DEPARTMENT 27
JUDICIAL OFFICER: TERRI MOCKLER
HEARING DATE: 07/17/2024
III. Request for Judicial Notice
Plaintiff has requested judicial notice of the second amended complaint filed in Dhital v
Nissan North America, Inc., No. RG19009260 in Alameda County. This was the pleading at issue in the
appellate court’s decision to reverse the trial court’s sustaining of a demurrer.
Defendant does not oppose the request which is granted.
IV. Demurrer
A. Standard
The limited role of a demurrer is to test the legal sufficiency of a complaint. It raises issues of
law, not fact, regarding the form or content of the opposing party's pleading. (Donabedian v. Mercury
Ins. Co. (2004) 116 Cal.App.4th 968, 994.) A complaint will be upheld if it provides the defendant with
“notice of the issues sufficient to enable preparation of a defense.” (Doe v. City of Los Angeles (2007)
42 Cal.4th 531, 549-550.) For purposes of a demurrer, all properly pleaded facts are admitted as true.
(Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.) Only the face of the pleading attacked and
matters subject to judicial notice are considered in ruling on a demurrer. (Code Civ. Proc. § 430.30(a).)
The Court gives the complaint a reasonable interpretation, reading it as a whole and its parts in
context. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)
The trial court exercises its discretion in declining to grant leave to amend, but such discretion
is abused where such leave is denied, and it is reasonably possible the pleading can be cured by
amendment. (Nolte v. Cedars-Sinai Medical Center (2015) 236 Cal.App.4th 1401, 1406.)
B. Discussion
Defendant specially demurs to the second cause of action based on uncertainty and generally
demurs to the second cause of action based on plaintiff’s purported failure to state sufficient facts to
constitute a cause of action.
i. Uncertainty
Honda’s demurrer for uncertainty is essentially unsupported by any argument. The Court
construes this as an admission on Honda’s part that uncertainty is not a ground for the Court to
sustain its demurrer. (See Rule of Court 3.1113.)
In any event, uncertainty is a disfavored ground for sustaining a demurrer, and a demurrer for
uncertainty will be sustained only when the pleading is such that the responding party cannot even
discern to what it must respond. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135,
139.) The pleading here meets that low bar. The Court expects that any lingering issues can be
illuminated through discovery. (Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616
[“demurrer for uncertainty is strictly construed, even where a complaint is in some respects
uncertain, because ambiguities can be clarified under modern discovery procedures”].)
On this ground, the demurrer is overruled.
ii. General Demurrer Based on Preemption
Defendant argues that federal law preempts the second cause of action for fraudulent
SUPERIOR COURT OF CALIFORNIA, CONTRA COSTA COUNTY
MARTINEZ, CA
DEPARTMENT 27
JUDICIAL OFFICER: TERRI MOCKLER
HEARING DATE: 07/17/2024
inducement – concealment. The type of preemption asserted by Honda appears to be conflict
preemption (which is implied preemption rather than express), though this is not particularly clear in
Honda’s brief. (See Memorandum in Support of Demurrer, 7:14-18.) Still, while Honda’s bolding and
italics suggest conflict preemption, Honda also suggests field preemption since it asserts the lack of
any California statute on the disclosures at issue here.
Plaintiff’s response to the preemption argument is that it is inappropriate for demurrer.
The Court does not find the demurrer persuasive in this respect. Neither form of preemption
(conflict or field) is thoroughly explained or demonstrated. While federal regulation may exist
concerning what information must be disclosed to the government, it does not follow that the
information required to be disclosed is necessarily sufficient for consumers. Nor does compliance
with that regulatory scheme provide manufacturers license to commit fraud when a disclosure is not
covered by the scheme.
Honda contends application of the common law here would “directly conflict with and stand
as an obstacle to accomplishment of the full purposes and objectives of NHTSA, in a field which
California has NOT traditionally occupied” (See Memorandum in Support of Demurrer pages 23 & 24.)
First, the Court observes that this statement is not about a particular federal statute, but an
argument broadly invoking the universe of purposes served by a particular federal agency, NHTSA.
This suggests a sort of field preemption argument that is undermined by Honda’s concession that
California has regulated in the general area (such as in its passage of a Car Buyer Bill of Rights).
Additionally, states such as California have traditionally occupied the area of tortious fraud claims.
Honda fails to cite any legal authority in which a state law claim for fraud in the sale of a motor
vehicle has been found to be preempted by federal law regulating vehicle safety standards.
Further, Honda does not explain why it cannot comply with both the federal disclosure
requirements and avoid tort liability through refraining from active concealment. This would be a
necessary condition for conflict preemption to apply.
Plaintiff alleges that Honda knew its cars contained defects and actively concealed this
information. (Complaint, ¶¶23-25, 37, 43.) To the extent that Honda’s knowledge included the vehicle
plaintiff purchased, and to the extent Honda actively concealed the issue, the Court agrees with the
opposition argument that these are fact-intensive inquiries not subject to determination on
demurrer. Also, fact-intensive would be whether any of the information plaintiff contends should
have been disclosed could be subject to the “confidential business information” protections
applicable to government disclosure regulations. The intent of the NTHSA regulatory scheme does not
appear to have been to immunize manufacturers from consumer fraud claims.
Defendant also asserts NHTSA is in a better position to provide the information to plaintiff.
This bears little relevance as to whether Honda had a duty of disclosure and this argument does not
defeat, as a matter of law, a fraud claim. NHTSA is not a defendant here.
Honda does not satisfy its own (acknowledged) burden. (See Memorandum in Support of
Demurrer, 6:14-17.) The demurrer is overruled on the basis that federal law preempts this cause of
action.
SUPERIOR COURT OF CALIFORNIA, CONTRA COSTA COUNTY
MARTINEZ, CA
DEPARTMENT 27
JUDICIAL OFFICER: TERRI MOCKLER
HEARING DATE: 07/17/2024
iii. General Demurrer Based on Purported Failure to Allege a “Transaction”
Honda argues plaintiff has not alleged a transaction because she does not allege she
purchased the vehicle from Honda directly. In response, plaintiff argues it was Honda’s superior
knowledge and active concealment that made it responsible for disclosure. Plaintiff further argues
this case is distinguishable from the authorities Honda cites, such as Bigler-Engler v. Breg, Inc. (2017)
7 Cal.App.5th 276, at least in part because Honda’s dealer here was acting as its agent.
There are “four circumstances in which nondisclosure or concealment may constitute
actionable fraud: (1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the
defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the
defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes
partial representations but also suppresses some material facts.” (Bigler-Engler v. Breg, Inc. (2017) 7
Cal.App.5th 276, 311, citations omitted.)
Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, though not binding currently,
is persuasive as to this transaction point. That court stated:
At the pleading stage […], we conclude plaintiffs‘ allegations are sufficient. Plaintiffs alleged
that they bought the car from a Nissan dealership, that Nissan backed the car with an express
warranty, and that Nissan's authorized dealerships are its agents for purposes of the sale of
Nissan vehicles to consumers. In light of these allegations, we decline to hold plaintiffs’ claim
is barred on the ground there was no relationship requiring Nissan to disclose known defects.
(Id. at 844.)
As pointed out by the plaintiff, her allegations mirror that case. She alleges a contractual
relationship with Honda directly via the express warranty provided to her, and she alleged that the
authorized dealer from which she purchased the vehicle was an agent of defendant.
The fraudulent concealment claim is not barred by any lack of a transactional relationship.
iv. General Demurrer Based on Economic Loss Doctrine
Defendant attempts to invoke the economic loss rule to demonstrate plaintiff’s cause of
action for fraud is barred as a matter of law. This Court is persuaded by the discussion in Dhital,
wherein the appellate court stated unambiguously that “fraudulent inducement by concealment is
not subject to demurrer on the ground it is barred by the economic loss rule.” (Dhital, supra, at 840-
841.)
If the California Supreme Court reaches the opposite conclusion during the pendency of this
action, defendant may raise its economic loss rule argument again.
For now, the demurrer to the second cause of action is overruled on the grounds that it is
barred by the economic loss rule.
v. General Demurrer Based on Lack of Specificity in Pleading Fraud
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)
SUPERIOR COURT OF CALIFORNIA, CONTRA COSTA COUNTY
MARTINEZ, CA
DEPARTMENT 27
JUDICIAL OFFICER: TERRI MOCKLER
HEARING DATE: 07/17/2024
justifiable reliance; and (5) resulting damage. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.)
Honda argues the fraud allegations lack the requisite specificity. It is true that “[i]n California,
fraud must be pled specifically; general and conclusory allegations do not suffice. […] This particularity
requirement necessitates pleading facts which show how, when, where, to whom, and by what
means the representations were tendered.” (Id. at 645.)
Honda does not engage, however, with the allegations of the complaint in making this
argument, possibly because the allegations are sufficiently specific. Plaintiff has asserted that the
Sensing defect is what was concealed and should have been disclosed (see, e.g., Complaint ¶16), that
Honda had knowledge about the defect (Complaint, ¶112) and an intent to deceive plaintiff through
concealment in order to sell the vehicle (see, e.g., Complaint, ¶119). Plaintiff further pleads her
reliance and that it was justifiable, and that she was damaged as a result of the concealment.
(Complaint ¶¶124-125.) Nothing more is required.
The demurrer is overruled on the basis that the fraud cause of action lacks specificity.
V. Motion to Strike
A. Standard
The Court may, in its discretion and upon a motion to strike by defendant: (a) strike out any
irrelevant, false, or improper matter inserted in any pleading, or (b) strike out all or any part of any
pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the
court. (Code Civ. Proc., §§ 435-436.) The matter must appear on the face of the complaint or be
subject to judicial notice. (Code Civ. Proc., § 437.)
B. Discussion
Honda challenges plaintiff’s request for punitive damages based on her failure to allege a
cause of action for fraud. As noted in the motion, Civil Code § 3294 provides: “[i]n 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).) Given the above discussion regarding the sufficiency of the
fraud claim, the motion to strike is denied. A valid cause of action for fraud has been asserted and,
accordingly, plaintiff may include a claim for punitive damages.
Ruling
KATHRYN BURDGE vs AIRSTREAM, INC.
Jul 23, 2024 |
24CV00800
24CV00800
BURDGE v. AIRSTREAM INC.
AIRSTREAM’S MOTION TO STAY
The motion to stay is denied.
I. BACKGROUND
Kathryn Burdge’s (“Burdge’) amended complaint, filed on March 26, 2024, alleges a
violation of the Song-Beverly Consumer Warranty Act in relation to her purchase of a 2023
Airstream Atlas RV. She purchased the Airstream in Temecula, California and she resided in
Page 6 of 9
Santa Cruz County at the time of the purchase. Burdge asserts various deficiencies/defects with
the RV.
In connection with the purchase of the Airstream, Burdge signed a Limited Warranty
which stated, in part, the following: “LEGAL REMEDIES: EXCLUSIVE JURISDICTION FOR
DECIDING LEGAL DISPUTES RELATING TO THE ALLEGED BREACH OF EXPRESS
WARRANTY AND BREACH OF THE IMPLIED WARRANTIES ARISING BY
OPERATION OF LAW AS WELL AS THOSE RELATING TO REPRESENTATIONS OF
ANY NATURE RESTS IN THE COURTS WITHIN THE STATE OF MANUFACTURE,
WHICH IS OHIO.” (Ex. B to Dec. of March.)
This language is found on the second page of the Limited Warranty and is the second
paragraph before the signature line for the purchaser. The sales contract is 6 pages long and
signatures were required on each page and, on some pages, multiple signatures on each page.
II. MOTION
Airstream seeks to stay this action to allow Burdge to re-file the case in Ohio, the forum
selection state. Airstream bases its motion on the above-referenced forum selection clause
contained in the signed limited warranty. Airstream contends a motion to enforce a forum
selection clause is a motion to stay (or dismiss) the action to allow a plaintiff to file in the proper
court.
Airstream argues the forum selection provision is mandatory and reasonable. Further,
Airstream acknowledges Burdge cannot be compelled to waive her rights under Song-Beverly,
and thus, it will stipulate to have the Ohio courts apply Song-Beverly in this case. Airstream
contends a stay would allow for time to determine if the Ohio courts would apply Song-Beverly.
If they will not, then Burdge could bring the case back to Santa Cruz.
Burdge opposes the stay. She argues Airstream failed to provide evidence demonstrating
she freely and voluntarily agreed to the forum selection clause. Even though Burdge signed the
limited warranty “she had to sign the document even if she did not understand the importance of
the forum selection clause.” (Opp at pg. 3.) That is, Burdge was required to sign the
acknowledgment of document and that does not prove she waived her rights under Song-Beverly
freely and voluntarily.
Burdge asserts Airstream failed to provide evidence that the designated forum will not
diminish her rights afforded under California law. Specifically, she argues, even if the court finds
she freely and voluntarily agreed to the forum selection clause, Airstream cannot show that Ohio
law will not diminish her substantive rights. Burdge contends Airstream’s offer to stipulate to
have the Song-Beverly apply in Ohio is insufficient because the choice of law in the Limited
Page 7 of 9
Warranty states that Ohio law will govern procedural issues and how the express warranty is
construed and interpreted.
III. DISCUSSION
“Trial courts generally have the inherent power to stay proceedings in the interests of
justice and to promote judicial efficiency.” (Freiberg v. City of Mission Viejo (1995) 33
Cal.App.4th 1484, 1489; see also Cottle v. Superior Court (1992) 3 Cal.App.4th 1367, 1376-79;
CCP § 128(a)(3) [“Every court shall have the power to do all of the following: To provide for the
orderly conduct of proceedings before it, or its officers.”].)
"The procedure for enforcing a forum selection clause is a motion to stay or dismiss for
forum non conveniens." (Olinick v. BMG Entertainment (2006) 138 Cal.App.4th 1286, 1294.)
“California law is ‘in accord with the modern trend which favors enforceability of such
[mandatory] forum selection clauses. [Citations.] No satisfying reason of public policy has been
suggested why enforcement should be denied a forum selection clause appearing in a contract
entered into freely and voluntarily by parties who have negotiated at arm's length. For the
foregoing reasons, we conclude that forum selection clauses are valid and may be given effect, in
the court's discretion and in the absence of a showing that enforcement of such a clause would be
unreasonable.’ [Citation.]” (Quanta Computer Inc. v. Japan Communications Inc. (2018) 21
Cal.App.5th 438, 444-445.)
“‘California courts will refuse to defer to the selected forum if to do so would
substantially diminish the rights of California residents in a way that violates our state's public
policy.’ [Citation.]” (Verdugo v. Alliantgroup, L.P. (2015) 237 Cal.App.4th 141, 147.) “The party
opposing enforcement of a forum selection clause ordinarily ‘bears the substantial burden of
proving why it should not be enforced.’ [Citations.] That burden, however, is reversed when the
claims at issue are based on unwaivable rights created by California statutes. In that situation,
the party seeking to enforce the forum selection clause bears the burden to show litigating
the claims in the contractually designated forum ‘will not diminish in any way the
substantive rights afforded … under California law.’ [Citations.]” (Id.) (Emphasis added.)
In this case, while she did sign the limited warranty, the court agrees with Burdge that the
warranty was not signed knowingly as to the forum selection clause and that application of the
clause would be unreasonable and/or unfair. The clause is buried in the second to the last
paragraph and is written in legalese such that a reasonable consumer could not be expected to
understand they were acquiescing to file a lawsuit in Ohio. The exclusive jurisdiction section
does not adequately inform the consumer that they would need to file suit in Ohio for warranty
issues, especially given that Burdge lives in California and purchased the Airstream in
Page 8 of 9
California. The court also notes the length of the sales contract and number of signatures
required as factors which balance in Burdge’s favor.
The court does not find Airstream has carried its burden in demonstrating that Burdge’s
substantive rights will not be diminished in any way if the case is brought in Ohio. Despite the
offer of Airstream’s counsel to stipulate to apply California law in Ohio, there is no guarantee
the Ohio courts will agree to this arrangement; that is, what is the effect of the stipulation in the
Ohio courts? Second, Airstream’s proposal would create two pending actions, which does not
promote judicial economy. Third, having California courts apply California law simply makes
more sense in terms of protecting Burdge’s rights under the Song-Beverly Act and for efficient
case management.
Notice to prevailing parties: Local Rule 2.10.01 requires you to submit a proposed formal order
incorporating, verbatim, the language of any tentative ruling – or attaching and incorporating the
tentative by reference - or an order consistent with the announced ruling of the Court, in
accordance with California Rule of Court 3.1312. Such proposed order is required even if the
prevailing party submitted a proposed order prior to the hearing (unless the tentative is
simply to “grant”). Failure to comply with Local Rule 2.10.01 may result in the imposition of
sanctions following an order to show cause hearing, if a proposed order is not timely filed.
Page 9 of 9
Ruling
JAIRO REGALADO CANCHOLA ET AL VS. AMERICAN HONDA MOTOR CO., INC, ET AL
Jul 26, 2024 |
CGC23610505
Matter on the Discovery Calendar for Friday, Jul-26-2024, Line 9, 2-PLAINTIFFS JAIRO CANCHOLA AN INDIVIDUAL, and ANDREA RODRIGUEZ' Motion To Compel Responses, Without Objections, To Plaintiffs' Requests For Production Of Documents (Set One). Continued on the court's motion to August 21, 2024. (D302)
Ruling
China Tianjiu International Resources Group Limited vs Renee Kwan, et al
Jul 23, 2024 |
20CV01351
20CV01351
CHINA TIANJIU INT’L RESOURCES GRP LTD v. KWAN et al.
(UNOPPOSED) PLAINTIFF’S MOTION TO BE RELIEVED
The unopposed motion to be relieved is granted. Plaintiff is ordered to immediately
secure successor counsel, since a business entity party cannot proceed in pro per.
Notice to prevailing parties: Local Rule 2.10.01 requires you to submit a proposed formal order
incorporating, verbatim, the language of any tentative ruling – or attaching and incorporating the
tentative by reference - or an order consistent with the announced ruling of the Court, in
accordance with California Rule of Court 3.1312. Such proposed order is required even if the
prevailing party submitted a proposed order prior to the hearing (unless the tentative is
simply to “grant”). Failure to comply with Local Rule 2.10.01 may result in the imposition of
sanctions following an order to show cause hearing, if a proposed order is not timely filed.
Ruling
HUDSON INSURANCE COMPANY, A CORPORATION vs MAKSOUD
Jul 27, 2024 |
CVRI2300335
HUDSON INSURANCE
Motion for Attorney's Fees by HUDSON
COMPANY, A
CVRI2300335 INSURANCE COMPANY, A
CORPORATION vs
CORPORATION
MAKSOUD
Tentative Ruling: Award Attorneys fees in the amount of 8,768.89, Award costs in the amount
of 1,316.82.
No opposition or motion to tax costs having been filed, the court awards fees and cost in the
amount requested by the prevailing party. Plaintiff to prepare, circulate and submit an order
consistent with the courts ruling.
Preview
Clerk of the Superior Court *** Electronically Filed *** T. Molchan, Deputy 2/23/2024 3:32:36 PM Filing ID 17396349 1 Bryan J. Gottfredson, AZ #025140 gottfredson@sackstierney.com 2 Lauren M. Reynolds, AZ #031801 reynolds@sackstierney.com 3 SACKS TIERNEY P.A. 4250 N. Drinkwater Blvd., 4th Floor 4 Scottsdale, AZ 85251-3693 Telephone: 480.425.2600 5 6 Attorneys for Plaintiff Sargon Masonry Construction, LLC 7 8 SUPERIOR COURT OF ARIZONA 9 MARICOPA COUNTY 10 Sargon Masonry Construction, LLC, an 11 Arizona limited liability company, No. CV2024-003633 P.A., ATTORNEYS 12 Plaintiff, 4250 NORTH DRINKWATER BOULEVARD COMPLAINT SCOTTSDALE, ARIZONA 85251-3693 13 v. (Breach of Contract, Breach of Covenant of FOURTH FLOOR 14 Solrac Construction, LLC, an Arizona Good Faith and Fair Dealing, Unjust SACKS TIERNEY limited liability company; Carlos Flores Enrichment, Negligent Misrepresentation, 15 and Nancy Pina, husband and wife; Aiding and Abetting, Breach of Fiduciary Duty, Isaac Perez, an unmarried man; John Civil Conspiracy, and Piercing the Corporate 16 Does and Jane Does I-X; ABC Veil) Partnerships I-X; ABC Limited 17 Liability Companies I-X; and XYZ Corporations I-X, 18 Defendant. 19 20 For its Complaint against Defendants Solrac Construction, LLC and Carlos Flores, 21 Nancy Pina, and Isaac Perez (collectively “Defendants”), Plaintiff, Sargon Masonry 22 Construction, LLC, (“Plaintiff”) alleges as follows: 23 THE PARTIES 24 1. Plaintiff Sargon Masonry Construction, LLC (“Sargon”) is an Arizona limited 25 26 liability company authorized to do business in Arizona. 27 2. At all times material hereto, Sargon was and continues to be a licensed 28 contractor with the Arizona Registrar of Contractors. 3717986.v1 1 3. Upon information and belief, Defendant, Solrac Construction, LLC (“Solrac”) 2 is an Arizona limited liability company authorized to do business in Arizona. 3 4. Upon information and belief, in or around August of 2019, Carlos Flores and 4 Nancy Pina formed Solrac. 5 5. Upon information and belief, Defendants Carlos Flores (“Flores”) and Nancy 6 Pina (“Pina”) are husband and wife, domiciled in Maricopa County, Arizona. 7 6. Upon information and belief, at all times material hereto, Flores acted on behalf 8 of his sole and separate property and on behalf of the marital community existing between 9 himself and Nancy Pina. 10 7. Upon information and belief, at all times material hereto, Nancy Pina acted on 11 behalf of her sole and separate property and on behalf of the marital community existing 12 between herself and Flores. P.A., ATTORNEYS 13 8. Upon information and belief, Flores and Pina are each managers and members 4250 NORTH DRINKWATER BOULEVARD SCOTTSDALE, ARIZONA 85251-3693 14 of Solrac. FOURTH FLOOR 15 9. Upon information and belief, at all times material hereto, Flores was authorized SACKS TIERNEY 16 to act for Solrac, for all material purposes, and did so act. 17 10. Upon information and belief, at all times material hereto, Nancy Pina was 18 authorized to act for Solrac, for all material purposes, and did so act. 19 11. Upon information and belief, at all times material hereto, Flores, Nancy Pina, 20 and Solrac acted in concert with one another. 21 12. Defendant Isaac Perez (“Perez”) is an unmarried man, domiciled in Maricopa 22 County, Arizona. 23 13. Defendant John Does and Jane Does I-X, ABC Partnerships I-X, ABC Limited Liability Companies I-X, and XYZ Corporations I-X (collectively, the “Doe Defendants”) 24 are individuals, corporations, partnerships, or other entities whose true names are unknown 25 to Sargon. Sargon is informed, believes, and alleges that the Doe Defendants were involved 26 in, or in some manner responsible as the principal, beneficiary, agent, co-conspirator, joint 27 venturer, alter ego, third-party beneficiary, or otherwise, for the agreements, transactions, 28 2 3717986.v1 1 events, and/or acts hereinafter described, and thereby proximately caused injuries and 2 damages to Sargon as herein alleged. Sargon requests leave of the Court to insert the true and 3 correct name of any Doe Defendants at such time as they become known to Sargon. 4 14. Defendants have caused certain events to occur in Maricopa County, Arizona, 5 giving rise to Plaintiff’s claims. 6 VENUE AND JURISDICTION 7 15. This Court has jurisdiction of the subject matter and of the parties. 8 16. Venue in this Court is proper pursuant to A.R.S. §12-401. 9 17. This case is a Tier 3 Case pursuant to Rule 26.2, Arizona Rules of Civil 10 Procedure. 11 GENERAL ALLEGATIONS 12 Sargon Retained Flores Roofing, LLC and Solrac Construction, LLC to Provide P.A., ATTORNEYS 13 Labor on Sargon’s Construction Projects 4250 NORTH DRINKWATER BOULEVARD SCOTTSDALE, ARIZONA 85251-3693 14 18. Sargon is a contracting company specializing in masonry, stone, and steel FOURTH FLOOR 15 construction. SACKS TIERNEY 16 19. From approximately April 14, 2014 to October 28, 2022, Perez was employed 17 by Sargon. 18 20. From approximately January 25, 2018 to October 28, 2022, Perez was 19 employed by Sargon as a general superintendent. 20 21. As the general superintendent at Sargon, Perez was responsible for ensuring 21 that all Sargon’s superintendents were following proper procedures, keeping construction 22 projects on schedule, and complying with Sargon’s policies and company values. 23 22. Additionally, as general superintendent at Sargon, Perez was responsible for 24 finding, hiring, and coordinating labor crews to work on Sargon’s construction projects. 25 23. In or around April of 2020 through October of 2022, Perez (in his capacity as Sargon’s general superintendent) retained Solrac as a subcontractor to provide labor for 26 Sargon’s use on various construction projects. 27 24. After termination of Perez’s employment with Sargon, Sargon continued to 28 3 3717986.v1 1 retain Solrac as a subcontractor to provide labor for Sargon’s use on various construction 2 projects through October of 2023. 3 25. Between April of 2020 and October of 2023, Sargon and Solrac entered into 4 numerous agreements in connection with Solrac’s provision of labor for Sargon’s use on 5 some of its construction projects (the “Agreements”). 6 26. Specifically, pursuant to the Agreements, in exchange for Solrac providing 7 labor, Sargon agreed to pay Solrac; (1) an amount for the labor itself (the “Payment for 8 Labor”); and (2) an additional percentage of that amount for an agreed-to profit for Solrac 9 (the “Markup”). 10 27. The metric used to determine the Payment for Labor was a measurement of 11 progress towards completion of the work Solrac’s labor force was retained to complete. For 12 instance, in connection with labor provided to perform masonry work, the Payment for Labor P.A., ATTORNEYS 13 was calculated using a specified price per linear foot of wall completed. 4250 NORTH DRINKWATER BOULEVARD SCOTTSDALE, ARIZONA 85251-3693 14 28. As for the Markup, the Sargon agreed to provide a Markup component of the FOURTH FLOOR 15 payment equivalent to 10% of the Payment for Labor. SACKS TIERNEY 16 29. Between April of 2021 and November 2023, Sargon paid Solrac approximately 17 $12,858,869.85 pursuant to the Agreements and in connection with Solrac’s provision of 18 labor crews for Sargon’s use on its construction projects. 19 Solrac’s Inflation of the Markup 20 30. While employed by Sargon as general superintendent, Perez was responsible 21 for scheduling and coordinating labor from Solrac and ensuring accurate payment to Solrac. 22 31. Solrac would report purported hours worked by labor crews on timesheets 23 associated with each construction project in which it provided labor. 32. Prior to Perez’s resignation from Sargon, the superintendents at each of 24 Sargon’s construction projects collected all of the timesheets from labor crews provided by 25 Solrac and provided them to Perez on a weekly basis. 26 33. Upon information and belief, each week, Perez then provided the timesheets 27 directly to Solrac and/or Flores for processing. 28 4 3717986.v1 1 34. Solrac would then provide Sargon with (a) a spreadsheet reflecting each 2 construction project, the progress on each construction project for that week, the rates for the 3 type of work on each construction project, and an accounting of each construction project 4 (the “Solrac Spreadsheets”); and (b) invoices for each construction project reflecting the total 5 amount to be paid to Solrac by Sargon on a weekly basis (the “Invoices”). 6 35. After Perez resigned from his position at Sargon, Solrac continued to provide 7 Sargon with the Solrac Spreadsheets and Invoices on a weekly basis. 8 36. The total amount to be paid on each of the Invoices should have reflected the 9 sum of (a) the Payment for Labor and (b) the Markup. 10 37. Unbeknownst to Sargon, however, the majority of the Invoices delivered by 11 Solrac to Sargon during this time period included an inflated Markup. 12 38. Upon information and belief, Flores and Perez were aware of the inflated P.A., ATTORNEYS 13 Markup and consciously attempted to have Sargon pay more than what Sargon had agreed 4250 NORTH DRINKWATER BOULEVARD SCOTTSDALE, ARIZONA 85251-3693 14 to. FOURTH FLOOR 15 Perez’s Approval of the Invoices SACKS TIERNEY 16 39. Perez was responsible for reviewing the Solrac Spreadsheets and ensuring the 17 Invoices accurately reflected the agreed upon Payment for Labor plus the appropriate 18 Markup. 19 40. Unbeknownst to Sargon, prior to Perez processing and approving the Invoices 20 for payment by Sargon, Solrac provided Perez with more detailed versions of the Invoices, 21 which showed the Markup in many of the Invoices to be inaccurate (the “Detailed Invoices”). 22 41. Perez knew or should have known that the Invoices delivered to him from 23 Solrac included an inflated Markup. 42. Upon receipt of the Invoices, however, Perez initialed and approved the 24 Invoices. 25 43. Perez never shared the Detailed Invoices with anyone else at Sargon. 26 44. Instead, Perez only submitted alternative Invoices, which lacked the details 27 included in the Detailed Invoices, to Sargon’s accounting department for payment. 28 5 3717986.v1 1 Sargon’s Payment of the Invoices 2 45. Throughout its time as a subcontractor for Sargon, Solrac inflated the Markup, 3 resulting in hundreds of inflated Invoices, which Perez knew were false, yet approved and 4 submitted to Sargon’s accounting department for payment anyway. 5 46. Relying on Solrac’s Invoices and Perez’s approval of the Invoices, Sargon’s 6 accounting department would then issue a check to Solrac for the amount reflected in the 7 Invoices. 8 47. As a result of Defendants’ conduct in inappropriately inflating the Markup and 9 submitting false and/or inflated Invoices, Sargon has overpaid Solrac and been damaged in 10 an amount in excess of $1,000,000.00. 11 The Detailed Invoices and Defendants’ Attempts to Conceal Their Scheme 12 48. Upon information and belief, each time Sargon paid an Invoice to Solrac, P.A., ATTORNEYS 13 Solrac issued several checks from the amounts paid by Sargon to the labor crews, as reflected 4250 NORTH DRINKWATER BOULEVARD SCOTTSDALE, ARIZONA 85251-3693 14 on the Detailed Invoices. FOURTH FLOOR 15 49. Solrac would then provide the checks to Perez to distribute to Solrac crews SACKS TIERNEY 16 who purportedly performed labor at various construction jobs. 17 50. Upon information and belief, Solrac also issued checks from the amounts paid 18 by Sargon to individuals who were not on Solrac labor crews and did not provide any labor, 19 including Isaac Perez, Nancy Pina, and numerous others. 20 51. Upon information and belief, Solrac, Flores, and Perez attempted to conceal 21 the amounts Sargon paid Solrac in connection with the inflated Markup by issuing checks to 22 fictitious individuals and/or individuals who were not part of the labor crews who were 23 purportedly performing the work on Sargon jobs. 52. For example, many of the Detailed Invoices reflect that after receiving payment 24 from Sargon on a particular job, Solrac also issued checks to an individual named Carmen 25 Vazquez. 26 53. Solrac claimed Carmen Vazquez was on a labor crew for Solrac and working 27 on Sargon’s construction projects. 28 6 3717986.v1 1 54. Sargon has no records of Carmen Vazquez working on a labor crew for Solrac 2 on any of Sargon’s construction projects. 3 55. However, between June 8, 2023 and September 7, 2023 alone, Solrac issued 4 approximately $225,000.00 in checks to a fictitious Carmen Vazquez for work performed on 5 Sargon’s construction projects in an effort to cover-up the inflated Markup it was charging 6 to Sargon. 7 56. Upon information and belief, Defendants cashed the checks issued to Carmen 8 Vazquez and paid themselves the proceeds of these cashed checks. 9 COUNT ONE 10 Breach of Contract 11 Against Solrac and Flores 12 57. Plaintiff incorporates by reference all allegations contained in the foregoing P.A., ATTORNEYS 13 paragraphs. 4250 NORTH DRINKWATER BOULEVARD SCOTTSDALE, ARIZONA 85251-3693 14 58. The Agreements were valid and enforceable contracts between Sargon and FOURTH FLOOR 15 Solrac. SACKS TIERNEY 16 59. Pursuant to the Agreements, Solrac agreed to provide Sargon labor crews in 17 exchange for the Payment for Labor plus the agreed-to Markup. 18 60. As set forth above, Solrac knowingly and without Sargon’s authorization, 19 charged Sargon in excess of the amount agreed to pursuant to the Agreements. 20 61. As set forth above, due to Solrac and Perez’ scheme, Sargon paid Solrac in 21 excess of the amount agreed to pursuant to the Agreements by millions of dollars. 22 62. Given the above, Solrac breached the Agreements. 23 63. As a direct and proximate cause of Solrac’s breach of the Agreements, Sargon 24 has been damaged in an amount to be determined at trial. 25 64. At all times material hereto, Solrac, Carlos Flores, and Nancy Pina acted on behalf of or in concert with one another, such that they are jointly and severally or vicariously 26 responsible for the acts of the other, as complained of herein. 27 65. Pursuant to A.R.S. 12-341 and 12-341.01, Sargon is entitled to recover its 28 7 3717986.v1 1 reasonable attorneys’ fees and costs. 2 COUNT TWO 3 Breach of Covenant of Good Faith and Fair Dealing 4 Against Solrac and Flores 5 66. Plaintiff incorporates by reference all allegations contained in the foregoing 6 paragraphs. 7 67. A covenant of good faith and fair dealing is implied in every contract under 8 Arizona law. 9 68. Solrac was obligated to act in Sargon’s best interest and not prevent Sargon 10 from receiving the benefits of the Agreements. 11 69. Solrac’s actions, as set forth above, demonstrate Solrac acted to deny Sargon 12 the benefits of the Agreements. P.A., ATTORNEYS 13 70. Solrac’s conduct was in bad faith and constitutes breach of the covenant of 4250 NORTH DRINKWATER BOULEVARD SCOTTSDALE, ARIZONA 85251-3693 14 good faith and fair dealing. FOURTH FLOOR 15 71. As a direct and proximate cause of Solrac’s actions to deny Sargon the benefits SACKS TIERNEY 16 of the Agreements, Sargon has been damaged in an amount to be determined at trial. 17 72. At all times material hereto, Solrac, Carlos Flores, and Nancy Pina acted on 18 behalf of or in concert with one another, such that they are jointly and severally or vicariously 19 responsible for the acts of the other, as complained of herein. 20 73. Solrac, Carlos Flores, and Nancy Pina acted with an evil hand and evil mind 21 such that Sargon is entitled to an award of punitive damages against Defendants. 22 74. Pursuant to A.R.S. 12-341 and 12-341.01, Sargon is entitled to recover its 23 reasonable attorneys’ fees and costs. 24 COUNT THREE 25 Unjust Enrichment 26 Against All Defendants 27 75. Plaintiff incorporates by reference all allegations contained in the foregoing 28 paragraphs. 8 3717986.v1 1 76. Defendants have been enriched and have received a direct and material benefit 2 as a result of Sargon’s overpayment relating to the Invoices and purported work performed 3 by Solrac. 4 77. Defendants’ enrichment has come at Sargon’s detriment. 5 78. Defendants’ enrichment and Sargon’s impoverishment are directly connected. 6 79. There is no justification for Defendants’ enrichment and Sargon’s 7 impoverishment, and it would be unjust for Defendants to retain such enrichment. 8 80. Sargon has no adequate remedy at law, so equitable relief is necessary. 9 81. Defendants have been unjustly enriched to the detriment of Sargon and Sargon 10 is entitled to recover damages in an amount to be determined at trial. 11 82. At all times material hereto, Solrac, Carlos Flores, and Nancy Pina acted on 12 behalf of or in concert with one another, such that they are jointly and severally or vicariously P.A., ATTORNEYS 13 responsible for the acts of the other, as complained of herein. 4250 NORTH DRINKWATER BOULEVARD SCOTTSDALE, ARIZONA 85251-3693 14 83. Defendants acted with an evil hand and evil mind such that Sargon is entitled FOURTH FLOOR 15 to an award of punitive damages against Defendants. SACKS TIERNEY 16 COUNT FOUR 17 Negligent Misrepresentation 18 Against All Defendants 19 84. Plaintiff incorporates by reference all allegations contained in the foregoing 20 paragraphs. 21 85. As set forth above, through the Invoices, Defendants made numerous 22 representations regarding the amounts owed to Solrac by Sargon. 23 86. In numerous instances, however, the representations made by Defendants in 24 the Invoices, and in connection with the Invoices, were false. 25 87. Upon information and belief, Defendants knew the representations regarding the amounts owed to Solrac by Sargon were false, but created a scheme unbeknownst to 26 Sargon, whereby Perez would approve the falsified Invoices and submitted them to Sargon’s 27 accounting department for payment to Solrac. 28 9 3717986.v1 1 88. Sargon trusted Perez and that he would honor his duty of loyalty as an 2 employee of Sargon. 3 89. Sargon trusted Solrac and Flores and that they would honor the Agreements 4 and operate in good faith. 5 90. Defendants intended, or could reasonably foresee, that Sargon would rely on 6 the falsified Invoices and Perez’s approval of them for payment. 7 91. Defendants failed to exercise reasonable care in providing the Invoices to 8 Sargon and acted with negligent or reckless disregard as to the truthfulness of the 9 representations contained in the Invoices. 10 92. Perez failed to exercise reasonable care in approving the Invoices and acted 11 with negligent or reckless disregard as to the truthfulness of the representations contained in 12 the Invoices. P.A., ATTORNEYS 13 93. The representations made by Defendants via their scheme to approve and 4250 NORTH DRINKWATER BOULEVARD SCOTTSDALE, ARIZONA 85251-3693 14 submit false Invoices were material in Sargon’s decision to pay Solrac the amounts specified FOURTH FLOOR 15 in the Invoices. SACKS TIERNEY 16 94. The representations made by Defendants via their scheme to approve and 17 submit false Invoices were relied upon by and induced Sargon to pay Solrac the amounts 18 specified in the Invoices. 19 95. Sargon was ignorant of the falsity of the representations made by Defendants 20 in connection with the Invoices. 21 96. Defendants knew or should have known that the representations made by Perez 22 and in the Invoices were false and that the Invoices did not provide an accurate calculation 23 of the amounts owed to Solrac by Sargon. 97. Sargon had a right to rely on the Invoices created by Solrac and Perez’s 24 approval of them. 25 98. As a result of Defendants’ negligent misrepresentations in connection with the 26 Invoices, Sargon has been damaged in an amount to be determined at trial. 27 99. Defendants acted with an evil hand and evil mind such that Sargon is entitled 28 10 3717986.v1 1 to an award of punitive damages against Defendants. 2 100. At all times material hereto, Solrac, Carlos Flores, and Nancy Pina acted on 3 behalf of or in concert with one another, such that they are jointly and severally or vicariously 4 responsible for the acts of the other, as complained of herein. 5 COUNT FIVE 6 Aiding and Abetting Breach of Contract and Negligent Misrepresentation 7 Against Perez 8 101. Plaintiff incorporates by reference all allegations contained in the foregoing 9 paragraphs. 10 102. Perez knew Solrac, Flores and Pina were inflating the Markup and making 11 misrepresentations in the Invoices. 12 103. Perez, however, approved the Invoices and submitted them to Sargon’s P.A., ATTORNEYS 13 accounting department for payment. 4250 NORTH DRINKWATER BOULEVARD SCOTTSDALE, ARIZONA 85251-3693 14 104. As such, Perez substantially assisted or encouraged Solrac, Flores and Pina in FOURTH FLOOR 15 their actions. SACKS TIERNEY 16 105. There is a direct causal nexus between Perez’s assistance and encouragement 17 and the damage to Sargon as a result of paying the inflated Markup. 18 106. As a result of Perez’s aiding and abetting as alleged herein, Sargon has been 19 damaged in an amount to be determined at trial. 20 107. Perez acted with an evil hand and evil mind such that Sargon is entitled to an 21 award of punitive damages against Perez. 22 COUNT SIX 23 Breach of Fiduciary Duty 24 Against Perez 25 108. Plaintiff incorporates by reference all allegations contained in the foregoing 26 paragraphs. 27 109. As an employee of Sargon, Perez owed Sargon a fiduciary duty, which includes 28 duties of loyalty and conscientious service and a duty to act in Sargon’s best interest. 11 3717986.v1 1 110. Perez knew Solrac was inflating the Markup and making misrepresentations in 2 the Invoices. 3 111. Perez, however, knowingly approved the falsified Invoices and submitted them 4 to Sargon’s accounting department for payment. 5 112. During his employment with Sargon, Perez violated his duties of loyalty and 6 conscientious service by engaging in the acts set forth above. 7 113. Furthermore, Perez failed to act in good faith and in Sargon’s best interests. 8 114. As a result of Perez’s breach of fiduciary duties as alleged herein, Sargon has 9 been damaged in an amount to be determined at trial. 10 115. Perez’s actions were intentional, aggravated, outrageous, and breached the 11 fiduciary duties he owed to Sargon. 12 116. Perez acted with an evil hand and evil mind such that Sargon is entitled to an P.A., ATTORNEYS 13 award of punitive damages against Perez. 4250 NORTH DRINKWATER BOULEVARD SCOTTSDALE, ARIZONA 85251-3693 14 COUNT SEVEN FOURTH FLOOR 15 Civil Conspiracy SACKS TIERNEY 16 Against All Defendants 17 117. Plaintiff incorporates by reference all allegations contained in the foregoing 18 paragraphs. 19 118. As alleged herein, Solrac issued Invoices to Sargon including an inflated 20 Markup and Perez approved the Invoices and submitted them to Sargon’s accounting 21 department for payment. 22 119. Upon information and belief, Defendants conspired and agreed amongst 23 themselves to defraud Sargon into paying an inflated Markup. 24 120. In furtherance of this conspiracy, Defendants concealed from Sargon the fact 25 that the Invoices included an inflated Markup. 121. Additionally, in furtherance of this conspiracy, Defendants concealed from 26 Sargon the Detailed Invoices. 27 122. Additionally, in furtherance of this conspiracy, Defendants issued payments to 28 12 3717986.v1 1 fictitious individuals to conceal the inflated Markup. 2 123. As a result of the Defendants’ acts, Defendants defrauded Sargon, and Sargon 3 has been damaged in an amount to be determined at trial. 4 124. Defendants acted with an evil hand and evil mind such that Sargon is entitled 5 to an award of punitive damages against Defendants. 6 125. At all times material hereto, Solrac, Carlos Flores, and Nancy Pina acted on 7 behalf of or in concert with one another, such that they are jointly and severally or vicariously 8 responsible for the acts of the other, as complained of herein. 9 COUNT EIGHT 10 Piercing the Corporate Veil 11 Against Solrac, Flores, and Pina 12 126. Plaintiff incorporates by reference all allegations contained in the foregoing P.A., ATTORNEYS 13 paragraphs. 4250 NORTH DRINKWATER BOULEVARD SCOTTSDALE, ARIZONA 85251-3693 14 127. Solrac is the alter ego and/or conduit of Defendants Flores and Pina. FOURTH FLOOR 15 128. Flores and Pina should not be allowed to commit fraud and other wrongdoings SACKS TIERNEY 16 and then use a corporate entity or limited liability company to avoid personal liability. 17 129. Disregarding Solrac’s status as a limited liability company is necessary to 18 prevent injustice and fraud. 19 130. The Court should pierce the corporate veil of Solrac and hold Flores and Pina 20 jointly and severally liable for all wrongdoings alleged by Sargon. 21 PRAYER FOR RELIEF 22 WHEREFORE, Plaintiff prays for judgment on its Complaint against Defendants as 23 follows: 24 A. For an award of damages in an amount to be proven at trial; 25 B. For an award of punitive damages to deter Defendants from future acts such as 26 those complained of herein; 27 C. For an award of reasonable attorneys’ fees pursuant to A.R.S. §§ 12-341 and 28 12-341.01 and/or other applicable law, 13 3717986.v1 1 D. Interest on all said sums at the highest rate allowed by law from the date of 2 entry of judgment until fully paid; 3 E. For a trial by jury; and 4 F. For such other and further relief as the Court deems just and appropriate under 5 the circumstances. 6