The Regents of the University of California v. Computer Methods International Corp. et al., Case No. CGC-13-531850 (San Francisco Superior Court): The San Francisco Superior Court recently sustained the demurrer of defendants Computer Methods International Corp. and its subsidiary, Computer Facilities Services Inc. on the grounds that plaintiff Regents of the University of California (“the University”) did not plead sufficient facts supporting the claims in its First Amended Complaint for fraud and violations of the California False Claims Act (CFCA).
The defendants argued that the University did not plead sufficient facts to demonstrate “how, when, where, to whom, and by what means the representations were tendered” in support of its fraud and CFCA claims. See Lazar v. Superior Court, 12 Cal.4th 631, 645 (1996). The defendants argued that under City of Pomona v. Superior Court, 89 Cal. App. 4th 793, 801 (2001), which provides that CFCA allegations must be pleaded with particularity, the University had failed to identify what information in the invoices for payment was false, who sent the invoices to the University, and who accepted or paid the invoices. The University responded that its allegations showed that the defendants falsely promised to perform work and then submitted the invoices for work that was not performed.
Though the court rejected most of the defendants’ arguments, it ultimately held in a one page order that Lazar requires the plaintiff “to include the names of the people who (on behalf of plaintiffs) heard the allegedly fraudulent representations.” The court sustained the demurrer with leave to amend.
The plaintiff filed its second amended complaint on January 17, 2014. The defendants filed their answer and cross-complaint in early February. The cross-complaint alleges causes of action for breach of contract and breach of implied covenant of good faith and fair dealing.