Procedural Posture

Procedural Posture

Plaintiff, a South Korean computer company, initiated a civil suit against defendant, a Delaware corporation with principal offices in California. Defendant filed a demurrer. The Superior Court of Los Angeles County, California, sustained defendant’s demurrer without leave to amend.

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Overview

A Korean computer company sued a Delaware corporation for breach of contract, fraud, and misrepresentation arising out of an auction. The Delaware corporation was engaged in the business of registering Internet domain names for a fee. The complaint alleged that after the computer company’s successful bid for an Internet domain name, the Delaware corporation attempted to release the computer company from its bid. The Delaware corporation filed a demurrer to the complaint. The trial court sustained the demurrer without leave to amend. On review, the appellate court concluded the demurrer should have been overruled. The complaint sufficiently stated a cause of action for misrepresentation. Specifically, the complaint stated that misrepresentations were made by the Delaware corporation, the computer company had no reason to disbelieve them and was ignorant of their falsity, and believing them to be true, the computer company relied on them. A breach of contract action was also adequately pleaded.

Outcome

The order of dismissal was reversed and the cause was remanded with instructions to enter a new and different order overruling the demurrer.