Demurrer to First Amended Complaint 3.30.09

I DOLL AMIR & ELEY LLPHUNTER R. ELEY (SBN 224321)

2 Hemmy So (SBN 259374)1888 Century Park East

3 Suite 1106Los Angeles, California 90067

4 Telephone: (310) 557-9100Facsimile: (310) 557-9101

5Attorneys for Defendants

6 CAPITAL ONE N.A. and JAMES KAUFFMAN

7

8

9

10

11

16

17

18

19

20

21

22

23

24

25

26

27

28

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF SANTA CLARA

DAN FlNGERMAN, Case No. 108-CV-127344

Plaintiff, Assigned to Dept. 1The Hon. James P. Kleinberg

v.NOTICE OF DEMURRER AND

CAPITAL ONE N.A., JAMES KAUFFMAN, and DEMURRER OF DEFENDANTS CAPITALDOES 1 to 30, inclusive, ONE N.A. AND JAMES KAUFFMAN TO

PLAINTIFF DAN FINGERMAN'S FIRSTDefendants. AMENDED COMPLAINT;

MEMORANDUM OF POINTS ANDAUTHORITIES IN SUPPORT THEREOF

Date: May 12, 2009Time: 9:00 a.m.Dept.: Dept. 1

191 N. First StreetSan Jose, CA 95113

DEFENDANTS' DEMURRER TO FIRST AMENDED COMPLAINT

1 TABLE OF CONTENTS

2 NOTICE OF DEMURRER 2

3 DEMURRER TO PLAINTIFF'S FIRST AMENDED COMPLAINT.. 3

4 MEMORANDUM OF POINTS AND AUTHORITIES 1

INTRODUCTION 1

RELEVANT FACTUAL ALLEGATIONS 2

A. Violation of Penal Code Section 632 2

B. Fraud Causes of Action 2

ARGUMENT 3

A. A Demurrer Is Appropriate When the Well Pleaded Allegations of theComplaint Fail to State a Valid Claim for RelieL 3

B. Fingerman Has Not Met His Burden of Supporting His Four Fraud Counts(Causes of Action II-V) With Allegations That The Purported Recordings of HisCoversations with Defendant Kaufman Caused Him Any Harm 4

I. The Fraud Causes ofAction Cannot Be Sustained Because FingermanAlleges Only Speculative Harm 5

2. The FAC Allegations Do Not lllistrate How Fingerman 's Reliance on CapitalOne's Alleged Misrepresentations Caused Harm 5

3. The FAC States No Allegations Describing How Fingerman SufferedHarm 7

C. Fingerman's Claim For Violation of Penal Code § 632 Fails 7

I. No Allegations Show Kauffman Knew About Fingerman 'sNon-Consent 8

2. The FAC Contains No Allegations That Kauffman Actually Recordedthe Calls 9

CONCLUSION 10

1

2

TABLE OF AUTHORITIES

STATE CASES

4

7

10

13

16

19

22

3 Blank v. Kinvan,39 Cal. 3d311 (1985) 3

Careau & Co. v. Security Pac. Business Credit, Inc,5 222 Cal. App.3d 1371, 1390 (1990) 3

6 Citizens ofHumanity, LLC v. Costco Wholesale Corp.,171 Cal.AppAth 1 (2009) 5

Flanagan v. Flanagan,8 27 Cal.4th 766 (2002) 9

9 Gagne v. Bertran,43 Cal.2d 481 (1954) 6

Goehring v. Chapman University11 121 Cal. App. 4th 353 (2004) 6

12 Hill v. Wrather,158 Cal. App.2d 818 (1958) 6

Kearney v. Smith Barney, Inc.,14 39 Cal. 4th 95 (2006) 8

15 Olson v. Automobile Club ofSouthern California,42 Cal.4th 1142 (2008) 9

Philipson & Simon v. Gulsvig,17 154 Cal.AppAth 347 (2007) 5

18 Scafidi v. Western Loan & Bldg. Co.,72 Cal.App.2d 550 (1946) 4

Small v. Fritz Companies, Inc.,20 30 Cal.4th 167 (2003) 6

21 Stansfield v. Starkey, .220 Cal.App.3d 59 (1990) 4

Wilhelm v. Pray,23 186 Cal.App.3d 1324 (1986) 4

24STATUTES

25Cal. Code of Civil Procedure § 430. 10(e) 3

26Cal. Code of Civil Procedure § 1709 .4

27Cal. Penal Code § 630 8

28

ii

1 Cal. Penal Code § 632 2,7,8,9,10

2 TREATISES

3 Witkin, Cal. Proc. (SthEdition) § 711 4

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

iii

I TO PLAINTIFF DAN FINGERMAN:

2 PLEASE TAKE NOTICE THAT on Tnesday, May 12,2009, at 9:00 a.m., or as soon after as

3 may be heard by the Honorable Superior Court Judge James P. Kleinberg, in Department I ofthe Santa

4 Clara County Superior Court, located at 191 N. First St., San Jose, CA 95113-1090, Defendants

5 CAPITAL ONE NA and JAMES KAUFFMAN will and hereby do respectfully demur to the First

6 Amended Complaint filed by Plaintiff DAN FINGERMAN, pursuant to Section 430.1 O(e) of the Code

7 of Civil Procedure, insofar as the operative pleading fails to state facts sufficient to constitute the causes

8 of action asserted.

9 The Demurrer is based on this Notice of Demurrer, the attached Demurrer and Memorandum of

10 Points and Authorities, the reply papers to be submitted in this matter, and such additional argument or

;g II evidence as may be submitted at the hearing of this matter.0.::::L~ G;~ ~~ 0 12u3~<t~

~ ~ ~ ~ 13 Dated: March 30, 2009 DOLL AMIR & ELEY LLP

~H[ 14"' " .5~j000

~ :: BY:He~17 Attorneys for Defendants

CAPITAL ONE N.A. and JAMES KAUFFMAN18

19

20

21

22

23

24

25

26

27

28 -2-DEFENDANTS' DEMURRER TO FIRST AMENDED COMPLAINT

1 DEMURRER

2 Pursuant to Code of Civil Procedure Section 430.10, subdivision (e), Defendants CAPITAL

3 ONE N.A ("Capital One") and JAMES KAUFFMAN ("Kauffman") hereby demur to the First

4 Amended Complaint ("FAC") filed by Plaintiff Dan Fingerman ("Plaintiff') as follows:

5

6

7

8

9 1.

FIRST CAUSE OF ACTION

(Defendant Kauffman)

(Violation of California Penal Code § 632)

Plaintiffs first cause of action for Violation of California Penal Code § 632 is subject to

10 general demurrer because it does not state facts sufficient to constitute a cause of action. (Code Civ.

11 Proc. § 430.10(e).)

15 2.

SECOND CAUSE OF ACTION

(All Defendants)

(Intentional Misrepresentation)

Plaintiffs second cause of action for Intentional Misrepresentation is subject to general

16 demurrer because it does not state facts sufficient to constitute a cause of action. (Code Civ. Proc. §

3.

17 430.10(e).)

18

19

20

21

THIRD CAUSE OF ACTION

(All Defendants)

(Negligent Misrepresentation)

Plaintiffs third cause of action for Negligent Misrepresentation is subject to general

22 demurrer because it does not state facts sufficient to constitute a cause of action. (Code Civ. Proc. §

4.

23 430.10(e).)

24

25

26

27

FOURTH CAUSE OF ACTION

(All Defendants)

(Concealment)

Plaintiffs fourth cause of action for Concealment is subject to general demurrer because

28 it does not state facts sufficient to constitute a cause of action. (Code Civ. Proc. § 430.1 O(e).)

-3-DEFENDANTS' DEMURRER TO FIRST AMENDED COMPLAINT

1

2

3

4 5.

FIFTH CAUSE OF ACTION

(All Defendants)

(False Promise)

Plaintiffs fifth cause of action for False Promise is subject to general demurrer because

5 it does not state facts sufficient to constitute a cause of action. (Code Civ. Proc. § 430.1 O(e).)

6

7 Dated: March 30, 2009

8

9

10

16

17

18

19

20

21

22

23

24

25

26

27

28

DOLL AMIR & ELEY LLP

By: Hem~~--Attorneys for DefendantsCAPITAL ONE N.A. and JAMES KAUFFMAN

-4-DEFENDANTS' DEMURRER TO FIRST AMENDED COMPLAINT

Fingerman also attempts to remedy his failure to allege damages in the four fraud counts

15 (Causes of Action II-V). Just as before, Fingerrnan fails to allege with the requisite specificity the harm

11 however, does not survive demurrer because the FAC fails to allege two facts necessary to state a cause

1 MEMORANDUM OF POINTS AND AUTHORITIES

2 Defendants Capital One N.A. ("Capital One") and James Kauffman ("Kauffman") respectfully

3 submit this Memorandum of Points and Authorities in support of their Demurrer to the First Amended

4 Complaint ("FAC") of Plaintiff Dan Fingerman ("Fingerman").

5 L

6 INTRODUCTION

7 Plaintiff Dan Fingerrnan has filed the FAC in response to this Court's February 9,2009 order

8 sustaining Kauffman's demurrer as to all causes of action and Capital One's demurrer as to the second

9 through fifth causes of action. In the FAC, Fingerman attempts to salvage his claim for violation of a

10 section of the California Penal Code prohibiting surreptitious recording of conversations. This claim,

:g0.":j.~ ~'" a g 12 of action - that Kauffman knew that Fingerman objected to the possible recording of their first phone::3 -rC- 8~~<:-

~ ~ ~ ~ 13 call, and that Kauffman personally recorded the two calls between them.-~"ai'-'

~:§~5.14~33":Ii

""16 he claims to have suffered and the causal connection between the alleged fraudulent acts and that harm.

17 There can be no recoverable damage to Fingerman as a result of the alleged fraudulent acts.

18 Fingerman has now had two bites at the apple. Having failed to cure the deficiencies identified

19 in this Court's Feburary 9, 2009 order, Fingerrnan should not be granted leave to amend.

20 For all the foregoing reasons, the FAC should be dismissed without leave to amend.

21 a22 RELEVANT FACTUAL ALLEGATIONS

23 Fingerman alleges that he and his wife borrowed money from Capital One Healthcare Finance

24 to fund elective surgery for his wife. (FAC, ~ 7.) When there appeared to be an issue relating to the

25 amount of the monthly payments being made by Fingerman and his wife, Fingerrnan alleges that he

26 telephoned Capital One various times between May and September 2008. (Id., ~ 8.) He had five phone

27

28 - I -DEFENDANTS' DEMURRER TO FIRST AMENDED COMPLAINT

1 conversations with Capital One representatives. (ld., ~~ 8, 9.) On only one occasion did Capital One

2 initiate the telephone call with Fingerman. (ld., ~ 9.)

3 A.

4

Violation of Penal Code Section 632

The FAC adds new allegations regarding the scope of Kauffman's knowledge when a Capital

11 made by the initial customer service representative by accepting the transferred June 2 call and not

15 26.) Similarly, Fingerman alleges that Kauffman had not suggested that the September 23 call between

5 One representative transferred Fingerman's June 2 phone call to Kauffinan. (FAC, ~~ 24-25.)

6 Fingerman now alleges that Kauffman "was aware" of the following: (l) Capital One had promised

7 never to record or monitor Fingerman's calls; (2) Fingerman had specifically objected to the recording

8 or monitoring of the June 2 call; and (3) the June 2 call was transferred to Kauffman so that Fingerman

9 could engage in a live phone conversation with a Capital One representative without being monitored

10 or recorded. (ld., ~ 24.) Fingerman further alleges that he believed Kauffman ratified representations

:g".=::L~G>- Ji g 12 suggesting that Kauffman was recording or monitoring it. (ld., ~ 28.) The FAC alleges, however, thatILl nO'- 0

ti,pa ~sHn1143 several topics were not discussed during that call between Fingerman and Kauffman, including whether

,., § " Kauffinan accepted the call with "knowledge of the circumstances surrounding the transfer." (Id., ~503":Ii

00

16 the two was being recorded or monitored prior to Kauffman's revelation that no Capital One agent

17 could prevent recording or monitoring. (ld., ~ 37.)

18 B.

19

Fraud Causes of Action

Fingerman attempts to beef up the FAC with new allegations about the harm he suffered by

20 relying on Defendants' alleged misrepresentations about phone recordings. Fingerman now alleges

21 potential harm from such reliance, that "many different kinds of harm might arise from such use or

22 publication [of sound recordings]," and that "Plaintiff may suffer embarrassment or emotional distress."

23 (FAC, ~ 40.) Fingerman does not, however, allege that any publication occurred or that he actually

24 suffered embarrassment or emotional distress. (See id.) The FAC also includes a new yarn about

25 Fingerman's visit to a car dealership, in which he alleges that he "was prevented from doing business

26 with at least one local merchant of his choice" because that dealership offered financing through

27 Capital One. (FAC, ~~ 42-43.) Fingerman suggests that his decision not to purchase a vehicle there

28- 2-


1 amounts to harm caused by Capital One's misrepresentations about the recording of phone calls

2 regarding a healthcare finance loan. (Id.)

3 The FAC also newly alleges that Fingerman suffered harm from having to call Capital One

4 twice after a May 15,2008 phone call in which Capital One agents allegedly told Fingerman that his

5 non-consent to recording would be honored. (FAC, ~~ 59.) That harm is not specified beyond the

6 suggestion of insult because of an "invasion of his privacy." (Id.) The FAC alleges no use of any

7 sound recordings against Fingerman and no monetary harm caused by these alleged privacy invasions.

8 Fingerman does allege some monetary damages, however. The FAC alleges that Fingerman

9 had to withdraw money from an investment account into order make "an early balloon payment" of

10 $5,952.92 to pay off his loan - a decision Fingerman alleges he made specifically because of conduct

11 by Capital One unrelated to the phone calls he alleges were recorded. (FAC, ~~ 65,72-73.) Fingerman

15

also alleges that his recoverable damages include basic court costs and attorney's fees to bring this

action. (Id., ~ 61.)

III.

ARGUMENT

16 A.

17

18

A Demurrer Is Appropriate When the Well-Pleaded Allegations ofthe Complaint Fail to

State a Valid Claim for Relief.

A complaint is subject to demurrer where it fails to state a cause of action. (Code of Civil

19 Procedure § 430.10(e).) On demurrer, the Court is required to "treat the demurrer as admitting all

20 material facts properly pleaded, but not contentions, deductions or conclusions of fact or law...."

21 (Blankv. Kirwan (1985) 39 Cal.3d 311, 318 (internal quotes omitted).) "A complaint must allege the

22 ultimate facts necessary to the statement of an actionable claim. It is both improper and insufficient for

23 a plaintiffto simply plead the evidence by which he hopes to prove such ultimate facts." (Careau &

24 Co. v. Security Pac. Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1390 [emphasis in original].)

25 Thus, failure to plead ultimate facts subjects a complaint to demurrer on this ground. (Cal. Civ. Proc.

26 Code § 430.10(e).)

27

28

- 3 -DEFENDANTS' DEMURRER TO FIRST AMENDED COMPLAINT

lB.

2

3

4

Fingerman Has Not Met His Burden Of Supporting His Four Fraud Counts (Causes of

Action II-\') With Allegations That The Purported Recordings Of His Conversations With

Defendant Kauffman Caused Him Any Harm.

Four of Fingerman's causes of action assert species of fraud. Count Two asserts a claim for

5 "Intentional Misrepresentation;" Count Three asserts a claim for "Negligent Misrepresentation;" Count

6 Four asserts a claim for "Concealment;" and Count Five asserts a claim for "False Promise." As each

7 cause of action sounds in fraud, Fingerman must meet a heightened pleading burden:

8

9

10

16

Fraud actions have been classed as "disfavored," and are subject to strict requirements ofparticularity in pleading. The idea seems to be that because allegations of fraud involve aserious attack on character, fairness requires that the defendant receive the fullest possibledetails of the charge to prepare a defense. Accordingly, fraud must be specifically pleaded."It is essential that the facts and circumstances which constitute the fraud should be set outclearly, concisely, and with sufficient particularity to apprise the opposite party of what he iscalled on to answer, and to enable the court to determine whether, on the facts pleaded, there isany foundation, prima facie at least, for the charge offraud." (Scafidi v. Western Loan & Bldg.Co. (1946) 72 C.A.2d 550,553,165 P.2d 260 [quoting Corpus Juris Secundum].)

The effect ofthis rule is twofold: (I) General pleading of the legal conclusion of "fraud" isinsufficient; the facts constituting the fraud must be alleged; and (2) every element ofthe causeofaction for fraud must be alleged in the proper manner (i.e., factually and specifically), andthe policy ofliberal construction ofthe pleadings (see supra, £442) will not ordinarily beinvoked to sustain a pleading defective in any material respect.

17 (Witkin, California Procedure, Fifth Edition, § 711, emphasis added.) As this Court noted, "[E]very

18 element of the cause of action for fraud must be alleged in full, factually and specifically, and the

19 policy of liberal construction of pleading will not usually be invoked to sustain a pleading that is

20 defective in any material respect." (Order at 2, quoting Wilhelm v. Pray (1986) 186 Cal.AppJd 1324,

21 1331.)

22 The elements of a fraud claim require a showing of not only a misrepresentation (false

23 representation, concealment, or nondisclosure), but resulting damage. (See e.g. Cal. Civ. Code § 1709.)

24 The heightened specificity required in pleading fraud claims extends to the elements of causation and

25 harm. (See e.g. Stansfieldv. Starkey (1990) 220 Cal.App.3d 59, 74 ["Similarly vague was the alleged

26 causal connection between the misrepresentations and the harm to appellants,"].)

27 III

28 III-4-


I 1. The Fraud Causes ofAction Cannot Be Sustained Because Fingerman Alleges

2 Only Speculative Harm.

3 Like its predecessor, the FAC offers only general allegations ofcausation and harm. The FAC

4 continues to posit the following allegation, repeated virtually verbatim in each fraud count: "Plaintiff

5 was harmed, and his reliance on the above representations and ratifications was a substantial factor in

6 causing the harm." (FAC, ~~ 82, 91, 102; see id., ~ 11 0.) These allegations are clearly insufficient to

7 support a fraud claim.

8 The newest allegations fail to cure this problem. Rather than describe any harm actually

9 suffered by him, Fingerman contemplates mere possibilities in the FAC, alleging that "many different

10 kinds of harm might arise from such use or publication [of sound recordings)," and that "Plaintiff may

II suffer embarrassment or emotional distress." (FAC, ~ 40 [emphasis added).) "Generally speaking, to

be actionable, harm must constitute something more than 'nominal damages, speculative harm, or the

threat of future harm-not yet realized." (Philipson & Simon v. Gulsvig (2007) 154 Cal.App.4th 347,364

[citations omitted) [holding that cross-complainant's fraud and negligent misrepresentation claims

15 failed to sufficiently allege damages because cross-complainant was not yet exposed to liability); see

16 also Citizens ofHumanity, LLC v. Costco Wholesale Corp. (2009) 171 Cal.App.4th I, 19 [noting that

17 where Penal Code statute required actual damages to state claim, actual damages compensate someone

18 for harms actually suffered or certain to be suffered in future.).)

19 Because the FAC fails to state facts sufficient to allege actual harm, the demurrer should be

20 sustained on the fraud causes of action.

21 2. The FAC Allegations Do Not Illustrate How Fingerman's Reliance On Capital

22 One's Alleged Misrepresentations Caused Harm.

23 As the Court noted in its February 9, 2009 Order, "Plaintifffails to allege the elements of

24 causation and damages with sufficient specificity." (Order at 2.) The FAC does nothing to shed light

25 on these two critical elements of fraud. The FAC includes a short story about Fingerman's visit to a car

26 dealership, in which he alleges that he "was prevented from doing business with at least one local

27 merchant of his choice" because that dealership offered financing through Capital One. (FAC, ~~ 42

28 43.) Fingerman intimates - rather than specifically alleges - that his decision not to purchase a

- 5-DEFENDANTS' DEMURRER TO FIRST AMENDED COMPLAINT

Fingerman does not and cannot allege a causal connection between Capital One's alleged

15 misrepresentations and the fact that he did not purchase a vehicle from an auto dealership that offers

11 Cal.App.4th 353, 365 [student's damages caused by dismissal from school, not misrepresentations

1 vehicle there amounts to harm caused by Capital One's misrepresentations. Not only does the FAC fail

2 to explain how that episode constitutes damages (in fact, it appears that Fingerman entered the

3 dealership without a car and left without a car), but it also lacks any facts sufficient to support

4 causation.

5 'Misrepresentation, even maliciously committed, does not support a cause ofaction unless the

6 plaintiff suffered consequential damages.''' (Smallv. Fritz Companies, Inc. (2003) 30 Ca1.4th 167,

7 202.) "At the pleading stage, the complaint 'must show a cause and effect relationship between the

8 fraud and damages sought; otherwise no cause ofaction is stated.'" (Id.) '''Assuming ... a claimant's

9 reliance on the actionable misrepresentation, no liability attaches if the damages sustained were

10 otherwise inevitable or due to unrelated causes.''' (Goehring v. Chapman University (2004) 121

~

o0.::-'"~

~~.L 12 inducing him to enroll]; Gagne v. Bertran (1954) 43 Ca1.2d 481, 491-492, [property owner's damagesirl'@-:::s~ ~ ~ ~ 13 caused by soil conditions, not misrepresentations inducing him to buy property].)9O::~S

:;: ~ ~c 14-' . "c5 ()'3Q~

16 Capital One as a financing company. In other words, Fingerman does not allege how reliance on

17 misrepresentations about the recording of his phone calls regarding a healthcare finance loan caused the

18 prevention of "doing business with at least one local merchant of his choice." (FAC, 'If 43.) "A false

19 representation which cannot possibly affect the intrinsic merits of a business transaction must

20 necessarily be immaterial because reliance upon it could not produce injury in a legal sense." (Hill v.

21 Wrather (1958) 158 Cal.App.2d 818,824 [complaint failed to show that plaintiffs' misrepresentation

22 about marital status affected value of property or services for which defendants had bargained].)

23 The same reasoning applies to Fingerman's allegation that he had to withdraw money from an

24 investment account into order make "an early balloon payment" of$5,952.92 to pay off his loan.

25 (FAC, 'If 73.) Nowhere does the FAC state how Fingerman's early repayment decision flowed from

26 Capital One's alleged misrepresentations about phone recordings. Instead, the FAC clearly states that

27 the early repayment occurred as a result of Capital One sending Fingerman an October 22, 2008 letter·

28 stating that his account number had changed and that Fingerman contact Capital One to ensure timely


I payment on his account. (Id, ~ 65.) As the FAC explains, "Due to Capital One's October conduct and

2 late notice ofthe changes it implementedfor improper purposes, Plaintiffs only apparent means to

3 protect his interests was to terminate his relationship with Capital One. The only apparent way to

4 terminate that relationship legally was for Plaintiff to fully repay his loan eady." (Id., ~ 72 [emphasis

5 added].) Because Plaintiff admits that these damages did not result from Capital One's alleged

6 misrepresentations, no causation exists.

7 3. The FAC States No Allegations Describing How Fingerman Suffered Harm.

8 The FAC also newly alleges that Fingerman suffered harm from having to call Capital One

9 twice after a May 15,2008 phone call in which Capital One agents allegedly told Fingerman that his

10 non-consent to recording would be honored. (FAC, ~~ 59.) Again, Fingerman fails to describe how he

:g II was harmed "by each invasion of his privacy." (Id.) The FAC alleges no use of any sound recordings0.=::L~~'" "0 12 against Fingerman and no monetary harm caused by these alleged privacy invasions. Nor can~ ~§( 8~.<

~ ~ ';f~ 13 Fingerman transmute basic court costs and attorney's fees to bring this action into recoverable damages...... &;'0,-,

~ ~!5- 14 to justify these four fraud causes of action. This invitation to take up legal alchemy is unsupported byodS":::~ IS any authority and is absurd on its face. It lends itself to the outrageous result that a lawsuit can be filed

16 solely for the purpose of recovering costs or fees that would not have been incurred but for the filing of

17 the lawsuit. Indeed, it renders any cause of action viable, regardless of the absence of any harm,

18 because (other than in forma pauperis actions), a plaintiff always pays a filing fee in initiating a

19 lawsuit.

20 These defects in the fraud claims are not simply minor issues that can be cured by amendment.

21 Under the facts alleged, given that the purported recordings were never used against

22 Fingerman, it is unimaginable that Fingerman suffered any resulting harm whatsoever. Accordingly,

23 Capital One's demurrer to the four fraud causes of action should be sustained without leave to amend.

24 C.

25

Fingerman's Claim For Violation Of Penal Code § 632 Fails.

Fingerman also asserts a cause of action for violations of California Penal Code section 632.

26 That code section is part of a chapter of proscriptions against eavesdropping on private

27 communications:

28 The Legislature hereby declares that advances in science and technology have led to the-7 -


1

2

development of new devices and techniques for the purpose of eavesdropping upon privatecommunications and that the invasion of privacy resulting from the continual and increasing useof such devices and techniques has created a serious threat to the free exercise of personalliberties and cannot be tolerated in a free and civilized society.

3 (California Penal Code § 630.)

4 California Penal Code Section 632 establishes criminal punishment for persons who record

5 confidential communications without the consent of all parties thereto:

6

7

8

9

10

Every person who, intentionally and without the consent of all parties to a confidentialcommunication, by means of any electronic amplifying or recording device, eavesdrops upon orrecords the confidential communication, whether the communication is carried on among theparties in the presence of one another or by means of a telegraph, telephone, or other device,except a radio, shall be punished by a fine not exceeding two thousand five hundred dollars($2,500), or imprisonment in the county jail not exceeding one year, or in the state prison, or byboth that fine and imprisonment.

The scope of section 632 is expressly limited to "confidential communications," which is

specifically defined in subsection 632(c):

(Emphasis added.)

(c) The term "confidential communication" includes any communication carried on incircumstances as may reasonably indicate that any party to the communication desires it to beconfined to the parties thereto, but excludes a communication made in a public gathering or inany legislative, judicial, executive or administrative proceeding open to the public, or in anyother circumstance in which the parties to the communication may reasonably expect that thecommunication may be overheard or recorded.

No Allegations Show Kauffman Knew About Fingerman 's Non-Consent.1.

16

17

18 The California Supreme Court noted that "this provision does not absolutely preclude a party to

19 a telephone conversation from recording the conversation, but rather simply prohibits such a party from

20 secretly or surreptitiously recording the conversation, that is, from recording the conversation without

21 first informing all parties to the conversation that the conversation is being recorded." (Kearney v.

22 Smith Barney, Inc. (2006) 39 Cal.4th 95,118.) The Kearney court went on to describe the scenario in

23 which such a recording would not violate the statute - the same factual scenario alleged in the FAC:

24 "A business that adequately advises all parties to a telephone call, at the outset of the conversation, of

25 its intent to record the call would not violate the provision." (Id.)

26 Only two phone calls alleged relate to Kauffman: June 2 and September 23. (FAC, ~~ 22-38.)

27 Fingerman admits that Capital One requested consent to record the June 2 call. (Id., ~ 22.) Fingerman

28 alleges he denied consent, though he fails to allege the way in which he did so. (Id., ["Plaintiff


1 promptly denied consent."J) Fingerman goes on to allege that the call was transferred to Kaufmann in

2 his capacity as supervisor for Capital One. (ld." 23.) As alleged, Kauffman merely accepted a call

3 transferred from another Capital One representative on June 2 (the first communication between

4 Fingerman and Kauffman). (ld." 24 ["Kaufmann began his participation in the June 2 call by

5 accepting the transfer from the first Capital One agent who had initially answered the call"].) The

6 critical allegation missing from Fingerman's pleading - now for the second time - is that he advised

7 Kauffman that he denied consent. Instead, Plaintiff alleges in conclusory fashion that Kauffman was

8 aware that Plaintiff had objected to the recording ofthe June 2 call.! (ld,' 24.) This allegation,

9 however, is undermined by an absence offactual allegations to support this. On the contrary,

10 Fingerman alleges at paragraph 26 that numerous topics were not discussed - including whether

11 "Kaufmann [sic] had accepted the transfer ofthe June 2 call with knowledge of the circumstances

The FAC Contains No Allegations That Kauffman Actually Recorded The Calls.2.15

~

o0.:::..l.~

~ Jlj 0 12 surrounding the transfer." (ld." 26.) As such, Fingerman's understanding that Kauffman was awaretrl~<3

~ ~ ~ ~ 13 of his non-consent is only supported by the fact that Kauffman never mentioned it during the June 2

j i !;:; 14 call. Here, the logic breaks down.c5d.3000

00

~

16 Rather than interpret a statutory provision based upon an assumption about the Legislature's

17 intent, courts must analyze a statute's plain language. (Olson v. Automobile Club ofSouthern

18 California (2008) 42 Cal.4th 1142, 1151; see e.g., Flanagan v. Flanagan (2002) 27 Cal.4th 766,774-

19 775 [examining statutory construction in determining meaning of "confidential communication" under

20 Penal Code. section 632].) California Penal Code Section 632 plainly states that "Every person who,

21 intentionally and without the consent of all parties to a confidential communication, by means of any

22 electronic amplifying or recording device, eavesdrops upon or records the confidential communication

23 ... shall be punished ...." (California Penal Code § 632.) The FAC makes no allegations that

24 Kauffman personally recorded the June 2 phone call. Nor does the FAC state any facts to support the

25 conclusory statement that "the September 23 call was caused to be recorded or monitored by Capital

26 One and/or by Kaufmann [sic]." (FAC,' 35.)

27IOn demurrer, the court should take all allegations as true. The facts of this case, however, will show that neither

28 Kauffman nor Capital One recorded any of the phone calls alleged in the FAC.- 9-


1 As the FAC admits, Kauffman did not have control over the recording of any calls on behalfof

2 Capital One. (See FAC, 'If 36,51.) Further, the potential to record does not equal actual recording as

3 required by the Penal Code. (See California Penal Code § 632.) Fingerman therefore does not allege

4 facts sufficient to state a cause of action for a violation of Penal Code section 632 against Kauffman

5 individually. Accordingly, the Kauffman's demurrer to the first cause of action should be sustained.

6 ~

7 CONCLUSION

8 For the foregoing reasons, Capital One N.A. respectfully requests that the Court sustain, without

9 leave to amend, its demurrer to the second, third, fourth and fifth causes of action in the First Amended

10 Complaint. Also for the foregoing reasons, James Kauffman, a mere employee of Co-Defendant

DOLL AMIR & ELEY LLP

By: ~'IAAJ&:2Hem~-----

Attorneys for DefendantsCAPITAL ONE N.A. and JAMES KAUFFMAN

Capital One, respectfully requests that the Court sustain, without leave to amend, his demurrer to all

15

11

16

17

18

19

20

21

22

23

24

25

26

27

28

:g",::--'.~

;;: ~ g 12 causes of action in the First Amended Complaint.t:j;iO\g[.l)l';l<C-

'"'"u.~ 13o::trJ~~o...~£

3i ~ c 14 Dated: March 30, 2009503o~

- 10 -DEFENDANTS' DEMURRER TO FIRST AMENDED COMPLAINT

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

PROOF OF SERVICE

STATE OF CALIFORNIA, COUNTY OF LOS ANGELES

I am employed in the County of Los Angeles, State of California. 1am over the age of 18and not a party to the within action; my business address is 1888 Century Park East, Suite 1106,Los Angeles, California 90067.

On March 30, 2009, I served the foregoing document described as NOTICE OFDEMURRER AND DEMURRER OF DEFENDANTS CAPITAL ONE, N.A. AND JAMESKAUFFMAN TO PLAINTIFF DAN FINGERMAN'S FIRST AMENDED COMPLAINT;MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF on theparties in this action by serving:

Dan FingermanMount & Stoelker, P.C.RiverPark Tower, Suite 1650333 West San Carlos StreetSan Jose, CA 95110-2740T: (408) 279-7000F: (408) 998-1473In Propria Persona

( X ) By Envelope - by placing ( ) the original ( X ) a true copy thereof enclosed in sealedenvelopes addressed as above and delivering such envelopes:

(X) By Mail: As follows: I am "readily familiar" with this firm's practice of collection andprocessing correspondence for mailing. Under that practice, it would be deposited with the U.S.postal service on that same day with postage thereon fully prepaid at Los Angeles, California in theordinary course of business. I am aware that on motion of the party served, service is presumedinvalid if postal cancellation date or postage meter date is more than one day after date of depositfor mailing in affidavit.

(X) By Electronic Mail: I scarmed and submitted a .pdfversion of the document via electronicmail to the office of the addressee.

( ) By Personal Service: I delivered such envelope by hand to the offices of the addressee(s).

( ) By Federal Express: I caused the envelope(s) to be delivered to the Federal Express officefor delivery on the next-business-day basis to the offices of the addressee(s).

( ) By Facsimile Transmission: On March 30, 2009, I caused the above-named document tobe transmitted by facsimile transmission to the offices of the addressee(s) at the facsimilenumber(s) so indicated above. The transmission was reported as complete and without error.

Executed on March 30, 2009, at Los Angeles, California.

( X) STATE I declare under penalty of perjury under the laws of the State of California that theabove is true and correct.

Demurrer to First Amended Complaint 3.30.09

Documents

Transcript of Demurrer to First Amended Complaint 3.30.09