1

Filed 11/27/23 Eghtesad v. State Farm General Insurance Co. CA1/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for 

publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or 

ordered published for purposes of rule 8.1115. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

NADER EGHTESAD,

Plaintiff and Appellant,

v.

STATE FARM GENERAL 

INSURANCE CO. et al.,

Defendants and Respondents.

 A163940

 (Contra Costa County

 Super. Ct. No. MSC-15-01014)

This is Nader Eghtesad’s second appeal from the underlying matter, 

which began when Eghtesad sued State Farm General Insurance Company 

(State Farm) for denying his claims for damage to business rental property 

he owned and for lost rental income. In the first appeal, taken from the 

judgment entered after State Farm’s demurrer was sustained without leave 

to amend, we reversed and remanded with directions. (Eghtesad v. State 

Farm General Ins. Company (2020) 51 Cal.App.5th 406, 416 (Eghtesad I).) 

Eghtesad then filed an amended complaint against State Farm and its 

alleged agent, Sam Limones. The trial court struck all the causes of action 

against Limones and some of the causes of action against State Farm on the 

grounds that they exceeded the scope of the remittitur, and eventually 

sustained a demurrer as to Eghtesad’s remaining causes of action against 

State Farm without leave to amend. In this appeal, Eghtesad argues that the 
2

trial court erred in striking his claims against Limones and that he should be 

granted leave to amend as to Limones and State Farm. We shall affirm.

FACTUAL AND PROCEDURAL BACKGROUND

A. Original Complaint

Representing himself, Eghtesad sued State Farm for breach of contract 

and fraud after State Farm denied his claims for repairs to real property that 

he had leased to Pablo Martinez and for loss of rental income. State Farm 

demurred. Eghtesad sought three continuances, two of which were granted

in part, but he never responded to the demurrer. (Eghtesad I, supra, 51 

Cal.App.5th at p. 410.) Eventually the trial court sustained State Farm’s 

demurrer to Eghtesad’s original form complaint without leave to amend and 

Eghtesad appealed. Now represented by counsel, Eghtesad argued that he 

could amend his complaint to allege causes of action against State Farm for 

breach of contract and fraud, and that he might be able to amend to allege a 

cause of action for bad faith based on the denial of his claim. (Id. at pp. 407, 

408, 413.) We reversed and our disposition directed the trial court to give 

Eghtesad leave “to amend his complaint to allege, if he is able, causes of 

action against State Farm for breach of contract, fraud, and bad faith.” (Id.

at p. 416.) 

B. First Amended Complaint

Eghtesad then filed a first amended complaint (FAC) alleging a cause 

of action titled declaratory relief against State Farm, and causes of action 

titled breach of contract, breach of the covenant of good faith and fair dealing, 

and negligence against State Farm and a new defendant, Limones. Eghtesad 

alleged that he leased property to Martinez under terms that required 

Martinez “to obtain insurance and to add [Eghtesad] to the policy as an 
3

additional insured.”1 Eghtesad alleged that “[f]rom approximately August 11,

2010” (the date the lease was signed), State Farm sold Martinez insurance

policies for the leased property to cover “specified losses including coverage 

for buildings and business personal property as defined in the endorsement 

pages of the policies” attached to the FAC.

2 Eghtesad alleged that the 

insurance policies covered losses resulting from various causes, including 

“vandalism,” and also covered loss of income. 

According to the FAC, Limones, a State Farm agent, had a copy of the 

lease between Eghtesad and Martinez; Limones confirmed with Eghtesad 

that he was an additional insured on the policy; and in reliance upon the 

assurances by State Farm and Limones, Eghtesad leased the property to 

Martinez. Then, in April 2012, Eghtesad discovered that the interior of the 

property “had been damaged by way of vandalism or other means.” When 

Eghtesad made a claim for repairs and loss of rent, which Eghtesad believed 

were covered by the policy, State Farm denied the claim, with the result that

Eghtesad had to bear the cost of repairs and the loss of rental income while 

the repairs were being made. 

Defendants moved to strike all the causes of action alleged against 

Limones, as well as the causes of action for negligence and declaratory relief 

1 A copy of the lease was attached to Eghtesad’s initial complaint. The 

lease was from January 1, 2010 through December 30, 2013, although 

apparently signed by Eghtesad and Martinez on August 11, 2010. Eghtesad 

represents on appeal that possession was handed over to Martinez in about 

January 2011. The property was to be used only as a shoe repair and 

recycling shop. The lease included the following term: “Lessee agree [sic] to 

have full coverage fire insurance for amount of 450,000,00 [sic] and minimum 

of 1,000,000,00 [sic] insurance liability and add landlord on the policy.” 

2 Attached to the FAC were endorsement pages of the policies that were 

purportedly issued in August 2010, including an endorsement that named 

Eghtesad as an additional insured. 
4

against State Farm, on the ground that they exceeded the scope of this court’s 

directive in Eghtesad I, which limited leave to amend the original complaint

to allege specified causes of action against State Farm. Defendants also

demurred on the ground that none of Eghtesad’s claims stated a viable cause 

of action. The trial court granted State Farm’s unopposed motion to take 

judicial notice of the insurance policy between Martinez and State Farm. The

policy includes the endorsements that Eghtesad attached to the FAC. 

The trial court granted the motion to strike as to Limones and as to the 

negligence and declaratory relief causes of action against State Farm, and 

sustained the demurrer as to the causes of action for breach of contract and 

bad faith against State Farm with leave to amend. In its order on the 

demurrer the court stated, “To the extent Plaintiff argues that his allegations 

amount to a cause of action for negligent misrepresentation based on an 

allegation that Limones represented to him that he was an additional insured 

. . . , the fact remains that Plaintiff is an additional insured under the Policy. 

Unless Plaintiff can credibly allege facts that Defendant made 

representations to him about the breadth of coverage under the policy that 

were not true, as pled the FAC does not even allege a plausible cause of 

action for negligent representation.” Notice of entry of the order on the 

motion to strike was served on June 8, 2021. 

C. Second Amended Complaint

Eghtesad filed a second amended complaint (SAC) alleging causes of 

action against State Farm titled breach of contract and bad faith. The SAC 

differed from the FAC with respect to allegations concerning Eghtesad’s 

interaction with Limones, the damage to the property, and the denial of 

Eghtesad’s claim. 
5

As in the FAC, Eghtesad alleged in the SAC that “from approximately 

August 11, 2010,” State Farm sold Martinez insurance to cover property 

Eghtesad had leased to him, under a lease that required Martinez “to obtain 

insurance as well as required adding [Eghtesad] to the policy as an additional 

insured.” The insurance allegedly covered losses resulting from various 

causes, including vandalism, and also covered loss of income.3 

In the SAC, Eghtesad alleged for the first time that Martinez 

“telephoned Plaintiff from Defendant’s office and asked Defendant’s Agent 

Samuel Limones to talk to Plaintiff on the telephone. Plaintiff had a 

discussion with Defendant’s Agent Limones informing Defendant’s Agent 

Limones that Plaintiff wanted specific coverage before renting the Subject 

Property to Lessee. Defendant’s Agent Limones informed Plaintiff that he 

personally knew Lessee and that Defendant’s Agent Limones understood that 

the nature and scope of the coverage being sought which [sic] would also 

include any damages caused by Lessee, including but not limited to physical 

damage and lost rent. Defendant’s Agent Limones notified Plaintiff that if 

there was any damage to the Subject Property caused by Lessee regardless as 

[sic] whether or not it was to the interior or exterior of the building that such 

damages would be covered by the State Farm policy being obtained by 

Lessee. Defendant’s Agent Limones expressly stated to Plaintiff on the 

telephone that Plaintiff would have full Coverage for any type of damages as 

well as for any loss of rent. [¶] . . . Defendant’s Agent Limones then 

requested Plaintiff to provide personal information of Plaintiff to add 

Plaintiff as additional insured with all the same coverage as had [sic] Lessee. 

3 Although the SAC states that the policy is attached to the complaint, 

neither the policy nor the endorsement pages that were attached to the FAC 

to support these same allegations are attached to the SAC. 
6

Defendant’s Agent Limones then sent Plaintiff the policy number 97-BSN887-1 with Plaintiff’s name as additional insured.” 

Like the FAC, the SAC alleged that Limones had a copy of the lease 

and confirmed with Eghtesad that he was an additional insured on the policy, 

and that in reliance upon the assurances by State Farm and Limones, 

Eghtesad leased the property to Martinez. 

It is undisputed that the policy in question was issued on April 11, 

2011, eight months after Martinez and Eghtesad signed the lease for the 

property.4 The policy includes not only an additional insured endorsement, 

but also an endorsement stating that the policy does not cover any loss 

caused by “faulty, inadequate, unsound or defective [¶] . . . [¶] . . . repair, 

construction, renovation [or] remodeling . . . [¶] . . . [¶] . . . of part or all of any 

property (including land, structures or improvements of any kind) on or off 

the described premises.” 

In the SAC, Eghtesad described the damage to the property as follows: 

He alleged that from 2010 to 2012, Martinez converted the second floor 

commercial space to a residential unit without Eghtesad’s knowledge or 

permission and without obtaining required permits. Eghtesad discovered the 

damage to the property when he inspected it after evicting Martinez for 

failure to pay rent. 

In the SAC, Eghtesad described for the first time what happened when 

he made his claim and it was rejected. Eghtesad alleged that he called State 

Farm to make a claim for the damage caused by Martinez, and that “[d]uring 

this initial telephone conversation with Defendant’s claims department, 

4 The trial court took judicial notice of this policy, which includes the 

endorsements that were attached to the FAC, in connection with the 

demurrer to the FAC. 
7

Plaintiff was notified that Plaintiff indeed had coverage for the damages 

caused by Lessee.” Eghtesad alleged that his claim was assigned to an 

adjuster, who inspected the property, prepared an estimate, and sent it to 

Eghtesad. Eghtesad objected to the estimate, and the claim was assigned to 

several other adjusters in turn. Eventually State Farm denied the claim, and 

Eghtesad had to bear the cost of repairs and loss of rental income. 

The trial court sustained State Farm’s demurrer to the SAC without 

leave to amend, and a judgment of dismissal was entered on October 4, 2021. 

Eghtesad filed a notice of appeal on November 5, 2021. 

DISCUSSION

A. Appeal as to Limones

Eghtesad argues that in striking his claims against Limones the trial 

court failed to comply with our directions in Eghtesad I. State Farm and 

Limones respond that the appeal as to Limones is untimely and that in any 

event the trial court correctly struck the causes of action against him. 

1. Timeliness

Respondents rely on Wilson v. Sharp (1954) 42 Cal.2d 675, 677, and 

Johnson v. Threats (1983) 140 Cal.App.3d 287, 289, to argue that the order 

granting the motion to strike was appealable as a final judgment because it 

left no issues to be determined between Limones and Eghtesad. Respondents 

contend that Eghtesad was required to file a notice of appeal within 60 days 

after entry of the order granting the motion to strike was served (Cal. Rules 

of Court, rule 8.104(a)(1)(B)), and that because he did not file his notice of 

appeal until months later, he forfeited his right to appeal from the order 

striking the claims against Limones. (In re Baycol Cases I & II (2011) 51 

Cal.4th 751, 761, fn. 8.) 
8

Respondents’ argument would be more persuasive if they had 

addressed the effect of Code of Civil Procedure section 472c, on which 

Eghtesad relies in arguing that his appeal encompasses the order striking the 

allegations against Limones. After Wilson and Johnson were decided, section 

472c was amended by the addition of subdivisions (b) and (c).5 (Stats. 1993, 

ch. 456, § 7; compare Stats. 1939, ch. 714, § 1.) As relevant here, section 472c 

states: “(b) The following orders shall be deemed open on appeal where an 

amended pleading is filed after the court’s order: [¶] . . . [¶] (3) An order 

granting a motion to strike a portion of a pleading where the order granting 

the motion to strike did not strike the entire pleading. [¶] (c) As used in this 

section, ‘open on appeal’ means that a party aggrieved by an order listed in 

subdivision (b) may claim the order as error in an appeal from the final 

judgment in the action.” Because the order granting the motion to strike as 

to Limones did not strike the entire FAC, which was the pleading at issue, 

Eghtesad’s claim that the motion was granted in error was arguably 

preserved for an appeal from the final judgment in the action, which is the 

appeal that is now before us. (§ 472c, subds. (b)(3), (c).) 

Nor are we persuaded by respondents’ second argument that because 

Eghtesad’s notice of appeal did not expressly specify the order granting the 

motion to strike, Eghtesad has failed to perfect his right to appeal. In his 

Notice of Appeal, Eghtesad checked the box indicating he was appealing from 

a “[j]udgment of dismissal after an order sustaining a demurrer.” Because 

section 472c provides that in an appeal from the final judgment in an action, 

an appellant may claim an error in an order granting a motion to strike part 

of a pleading (§ 472c, subds. (b)(3) & (c)), Eghtesad’s notice of appeal from the 

5 Undesignated statutory references are to the Code of Civil Procedure.
9

final judgment perfected his right to claim error from the order granting the 

motion to strike.6 

2. Merits

Because respondents have not persuaded us that Eghtesad’s appeal as 

to Limones is untimely, we consider whether the trial court correctly ruled 

that Eghtesad’s causes of action against Limones were beyond the scope of 

leave to amend granted by this court in Eghtesad I. 

When a matter has been remanded to the trial court, the issues that 

the trial court may address on remand are “limited to those specified in the 

reviewing court’s directions, and if the reviewing court does not direct the 

trial court to take a particular action or make a particular determination, the 

trial court is not authorized to do so.” (Ayyad v. Spring Spectrum, L.P. (2012) 

210 Cal.App.4th 851, 859-860 (Ayyad).) “ ‘The order of the reviewing court is 

contained in its remittitur, which defines the scope of the jurisdiction of the 

court to which the matter is returned.’ ” (Id. at p. 859.) On remand, the 

reviewing court’s remittitur directions, as expressed in the dispositional 

language of its opinion, must be read in conjunction with the opinion as a 

whole. (Ibid.) Whether the trial court has correctly interpreted our previous 

opinion is a question of law that we review de novo. (Ibid.) 

In his prior appeal, Eghtesad sought leave to amend his original 

complaint to allege specific causes of action against State Farm, and to allege 

a cause of action for slander against his former tenant, Martinez. (Eghtesad 

I, supra, 51 Cal.App.5th at p. 413.) He did not seek leave to amend as to any 

other individual or entity. We denied leave as to Martinez (id. at p. 416), and 

6 Respondents raised these arguments in a motion to dismiss filed at 

the same time as their brief on appeal. We took the motion under submission 

for decision with the merits and now deny it. 
10

in the portion of our opinion addressing leave to amend as to State Farm, we 

stated that nothing in the original complaint “foreclose[d] an attempt to plead 

that an authorized agent of State Farm misrepresented or concealed 

information about insurance coverage with the intent to induce Eghtesad to 

lease the property to Martinez, which Eghtesad then did, with the result that 

when the property was damaged Eghtesad had to bear the cost of repairs and 

loss of rent.” (Id. at p. 413.) Our reference to “an authorized agent of State 

Farm” was based on Eghtesad’s statement (in a portion of the form complaint 

where he sought to allege fraud against State Farm) that he had spoken with 

a “State Farm Agent.” Thus, Eghtesad was free to allege in his amended 

complaint after remand that an agent of State Farm made 

misrepresentations and that State Farm is liable for those 

misrepresentations. This is reflected in the language of the disposition, 

which directed the trial court to grant Eghtesad leave to amend his complaint 

to allege “causes of action against State Farm for breach of contract, fraud, 

and bad faith.” (Id. at p. 416, italics added.) As we have noted, in his 

original appeal to this court Eghtesad had not sought leave to amend his 

complaint against any State Farm agent, and we did not order the trial court 

to grant such leave. 

Because we did not direct the trial court to allow Eghtesad to allege 

claims against any other party, including Limones (Eghtesad I, supra, 51 

Cal.App.5th at p. 416.), the trial court had no authority to allow such claims 

to proceed. (Ayyad, supra, 210 Cal.App.4th at pp. 859-860; see also Taliaferro 

v. Davis (1963) 220 Cal.App.2d 793, 794-795 [where court sustained 

demurrer, granted motion to strike portions of complaint, and gave leave to 

amend, court properly strikes “amended complaint” seeking to add new 
11

defendant without leave of court].) Accordingly, we conclude that the trial 

court correctly struck Eghtesad’s causes of action against Limones.

B. Appeal as to State Farm

Eghtesad argues on appeal that he can amend his second amended 

complaint (SAC) to allege claims of fraud or negligent misrepresentation, 

reformation, and negligence against State Farm.7 Notably, he does not

challenge the dismissal of his causes of action for breach of contract and good 

faith, nor the striking of his cause of action for declaratory relief. Those 

causes of action have therefore been abandoned. (Alborzi v. University of 

Southern California (2020) 55 Cal.App.5th 155, 184.) The thrust of both the 

FAC and SAC was that after Eghtesad made his claim State Farm 

misrepresented the coverage provided by the policy in order to avoid paying 

the claim. Thus Eghtesad took the position that his claims in fact were 

covered by the insurance policy, and that State Farm improperly denied 

them. Eghtesad now appears to contend instead that State Farm, through its 

agent, misrepresented the scope of the coverage at the time the policy was 

sold. 

1. Standard of Review

The law governing our review of a ruling on a demurrer is wellestablished. “[W]e examine the complaint de novo to determine whether it 

alleges facts sufficient to state a cause of action under any legal theory” 

(McCall v. PacifiCare of California, Inc. (2001) 25 Cal.4th 412, 415), 

regardless of the labels attached to causes of action in the complaint. 

7 In his prior appeal Eghtesad requested and was granted leave to 

amend his original complaint against State Farm to allege a cause of action 

for fraud; we are puzzled as to why Eghtesad did not allege a cause of action 

titled “fraud” in his FAC or SAC. In any event, he once again seeks leave to 

amend his complaint to allege fraud.
12

(Dunkin v. Boskey (2000) 82 Cal.App.4th 171, 180 (Dunkin).) We “accept the 

truth of material facts properly pleaded in the operative complaint, but not 

contentions, deductions, or conclusions of fact or law.” (Yvanova v. New 

Century Mortgage Corp. (2016) 62 Cal.4th 919, 924 (Yvanova).) 

When the trial court sustains a demurrer without leave to amend, we 

must “decide whether there is a reasonable possibility that the defect can be 

cured by amendment: if it can be, the trial court has abused its discretion and 

we reverse; if not, there has been no abuse of discretion and we affirm.” 

(Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) It is the plaintiff’s burden to 

show a reasonable possibility that any defect can be cured by amendment. 

(Ibid.) This showing may be made for the first time on appeal. (§ 472c, subd. 

(a).) To meet the burden, a “ ‘[p]laintiff must show in what manner he can 

amend his complaint and how that amendment will change the legal effect of 

his pleading.’ ” (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) The 

plaintiff must set forth not only the elements of the cause of action but also 

“must set forth factual allegations that sufficiently state all required 

elements of that cause of action. [Citations.] Allegations must be factual and 

specific, not vague or conclusory.” (Rakestraw v. California Physicians’ 

Service (2000) 81 Cal.App.4th 39, 43-44 (Rakestraw).) 

When the plaintiff’s alleged facts contradict or are inconsistent with 

matters subject to judicial notice, we accept the facts subject to judicial notice 

and reject the allegations. (Hill v. Roll International Corp. (2011) 195 

Cal.App.4th 1295, 1300.) “We give the same precedence to facts evident from 

exhibits attached to the pleading.” (Ibid.) 

2. Fraud and Negligent Misrepresentation

We begin with Eghtesad’s argument that he can amend his complaint 

to state a cause of action for fraud or negligent misrepresentation. 
13

The elements of a cause of action for fraud are “ ‘ “(a) misrepresentation 

(false representation, concealment, or nondisclosure); (b) knowledge of falsity 

(or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable 

reliance; and (e) resulting damage.” ’ ” (Engalla v. Permanente Medical 

Group, Inc. (1997) 15 Cal.4th 951, 974 (Engalla).) “ ‘[F]alse representations 

that are made recklessly and without regard for their truth in order to induce 

action by another are the equivalent of misrepresentations knowingly and 

intentionally uttered.’ ” (Ibid.) 

The elements of a cause of action for negligent misrepresentation are 

similar: “ ‘(1) misrepresentation of a past or existing material fact, (2) made 

without reasonable ground for believing it to be true, (3) made with the intent 

to induce another’s reliance on the fact misrepresented, (4) justifiable 

reliance on the misrepresentation, and (5) resulting damage.’ ” (Bock v. 

Hansen (2014) 225 Cal.App.4th 215, 231.) California courts recognize a cause 

of action for negligent misrepresentation “where information is conveyed in a 

commercial setting for a business purpose.” (Id. at p. 229.) 

In Eghtesad I, we concluded that nothing in Eghtesad’s original 

complaint foreclosed an attempt to plead that an agent of State Farm 

“misrepresented or concealed information about insurance coverage with the 

intent to induce Eghtesad to lease the property to Martinez, which Eghtesad 

then did, with the result that when the property was damaged Eghtesad had 

to bear the cost of repairs and loss of rent.” (Eghtesad I, supra, 51 

Cal.App.4th at p. 413.) Although the language in the disposition of Eghtesad 

I refers only to leave to amend to state a claim for fraud, the language of the 

opinion as a whole is broad enough to authorize amendment to allege a claim 

for negligent misrepresentation, assuming that the necessary elements are 

adequately pled.
14

a. Forfeiture

Respondents argue that Eghtesad relinquished his right to plead any

claim for misrepresentation by failing to add such a cause of action to the 

complaints he filed after remand. We disagree. We look to the substance of 

the allegations in Eghtesad’s complaints, not the labels that were used for 

causes of action. (Dunkin, supra, 82 Cal.App.4th at p. 180.) Despite the 

absence of a title identifying misrepresentation as a cause of action, it 

appears from the trial court orders sustaining the demurrers to the FAC and 

SAC that the trial court and the parties understood that Eghtesad sought to 

allege a cause of action for misrepresentation of the scope of the policy. 

b. Allegations to Support Claims of Misrepresentation 

Insofar as the elements of a fraudulent or negligent misrepresentation 

claim are concerned, the SAC alleges that Eghtesad requested “specific 

coverage” and requested confirmation that he was an additional insured on 

Martinez’s policy; that Limones, as State Farm’s agent, represented that 

Eghtesad was an additional insured on the policy that covered the property 

and that Eghtesad had coverage for physical damage caused by Martinez and 

coverage for lost rental income; that Eghtesad leased the property to 

Martinez in reliance on assurances from State Farm and Limones; that the 

policy did not provide the promised coverage, as Eghtesad discovered when 

he made a claim; and that Eghtesad was damaged when he had to bear the 

cost of repairs to the property and lost rental income as a result of State 

Farm denying his claim. 

Eghtesad argues on appeal that he has alleged or can amend his SAC 

to allege the mental state, justifiable reliance, and causation required to state 

a cause of action for fraud or negligent misrepresentation. We turn now to 

those arguments.
15

i. Knowledge and Intent

We begin by considering whether Eghtesad has shown that the SAC 

alleges or can be amended to allege the state of mind required for a claim of 

fraud (knowledge of or reckless disregard for falsity and intent to induce 

reliance) or negligent misrepresentation (lack of reasonable ground to believe 

statement is true and intent to induce reliance). (See Engalla, supra, 15 

Cal.4th 951, 976 [discussing “fraudulent state of mind”].) 

With respect to negligent misrepresentation, we understand Eghtesad 

to argue that he has already alleged the necessary facts in the SAC by virtue 

of alleging that Limones was acting as State Farm’s agent, that Limones was 

employed to advise customers so as to sell them insurance and collect 

premiums at a profit to Limones and State Farm, that Eghtesad requested 

certain insurance coverage, that Limones understood that certain coverage 

was required if Eghtesad was to lease the property to Martinez, and Limones 

represented that the policy included that coverage. We agree with Eghtesad

that these allegations suffice to plead the necessary mental state for 

negligent misrepresentation. (See R & B Auto Center, Inc. v. Farmers Group, 

Inc. (2006) 140 Cal.App.4th 327, 336-337 [discussing allegations that support 

a cause of action for negligent misrepresentation].) Respondents do not argue 

otherwise. 

But Eghtesad does not tell us how he would amend his complaint to 

allege the knowledge of falsity or reckless disregard required to state a cause 

of action for fraud. (Engalla, supra, 15 Cal.4th at p. 974.) It is not enough 

for Eghtesad to state that he can “amend his pleading to allege in the 

alternative the requisite mental states on Limones’[s] and State Farm’s part 

for . . . intentional . . . misrepresentation”: he must state the facts that he 

would plead, not just a conclusion. (Yvanova, supra, 62 Cal.4th at p. 924.) 
16

Notably, Eghtesad did not allege in his FAC or SAC that Limones knowingly 

or recklessly made false statements to him about the scope of the coverage 

provided by the policy. Nor does he make such a representation in his briefs 

on appeal. 

Accordingly, insofar as the element of mental state is concerned, 

although Eghtesad has met his burden to show that he can amend his 

complaint for negligent misrepresentation, he has not met his burden with 

respect to fraud.

ii. Reliance and Causation

We now consider whether Eghtesad has shown he can amend his SAC 

to allege the reliance and causation required for claims of misrepresentation. 

The allegations in the SAC are inconsistent. The SAC alleges that 

State Farm sold Martinez insurance to cover the leased property “[f]rom 

approximately August 11, 2010,” the date Eghtesad and Martinez signed the 

lease.8 

The SAC also alleges that Eghtesad spoke with Limones by phone, and 

told Limones that he “wanted specific coverage before renting the Subject 

Property” to Martinez. But the SAC does not allege when that phone 

discussion took place, except that, as Eghtesad concedes on appeal, the SAC 

also “allege[s] that [Eghtesad] received a copy of the policy when he spoke 

with Limones about his insurance needs” with respect to coverage for damage 

caused by Martinez and coverage for loss of rent. Eghtesad further concedes 

that the policy was not even prepared, let alone sent to Eghtesad, until April 

11, 2011, which is eight months after the lease was signed. 

8 The insurance policy includes the additional insured endorsement and 

the endorsement stating that there is no coverage for loss due to remodeling. 
17

If, as the SAC alleges, Limones sent Eghtesad a copy of the policy at 

the time Eghtesad told him about his insurance needs, and if the policy was 

not even prepared until April 2011, Eghtesad cannot have signed the lease 

with Martinez based on any representations by Limones or State Farm as to 

the coverage at issue, because the lease was signed months before Eghtesad 

spoke with Limones. 

Eghtesad now contends on appeal that his allegation “that he received 

a copy of the policy when he spoke with Limones about his insurance needs 

had to be mistaken,” and that on remand he can “allege that pleading 

mistake and that he did not see anything before renting the property to 

Martinez that would have informed him that the coverage” being provided 

was not the coverage he sought. But whether Eghtesad can allege a cause of 

action for misrepresentation, either intentional or negligent, depends upon 

what exactly Eghtesad would allege about the representations made by 

Limones and State Farm and when those representations were made. It is 

Eghtesad’s burden on appeal to tell us what factual allegations he would 

make in an amended complaint. (Rakestraw, supra, 81 Cal.App.4th at pp. 43-

44.) And he must explain any inconsistencies between his proposed amended 

complaint and his prior pleadings. (Larson v. UHS of Rancho Springs, Inc. 

(2014) 230 Cal.App.4th 336, 343.) It is not enough for Eghtesad to say that 

his allegations in the SAC that he received a copy of the policy when he spoke 

with Limones about his needs “had to be mistaken.” He must explain how 

those allegations were mistaken, and he must explain the inconsistency 

between his allegations in the FAC and SAC that State Farm provided 

insurance coverage for the property under the policy from August 2010 (when 
18

the lease was signed), and the fact that the policy in question was not 

prepared until April 2011.9 Eghtesad fails to do this. 

Eghtesad contends that he can amend his complaint to allege that 

“State Farm’s and Limones’[s] representations that they would provide 

coverage to Eghtesad that included fire insurance with a $450,000 limit with 

Eghtesad as an insured was [sic] a substantial factor in Eghtesad leasing the 

premises to Martinez.” This proposed allegation does not suffice to show 

reliance on any misrepresentation or to show causation, because according to 

the insurance policy subject to judicial notice, State Farm did in fact provide 

fire insurance on the property with Eghtesad as an additional insured, as the 

trial court observed in sustaining State Farm’s demurrer to the FAC and 

granting leave to amend. To the extent Eghtesad would allege that Limones 

told him he was an “insured” and not merely an “additional insured” on the 

policy, Eghtesad fails to explain the inconsistency between an allegation that 

he was an “insured” and the allegations in the FAC and SAC that he relied 

on Limones’ “confirm[ation] . . . that [h]e was an additional insured on the 

policy” and his alleged reliance on the “additional insured” endorsement that 

he attached to the FAC. 

In sum, Eghtesad has not met his burden to show how he can amend 

his complaint to allege reliance and causation. Therefore, he has not 

9 In his reply brief, Eghtesad raises the possibility that at some point in 

August 2010 Limones might have sent or shown him a “binder” document 

that temporarily obligated State Farm to provide coverage pending the 

issuance of a policy. It is unclear what conclusion Eghtesad wishes us to 

draw from this possibility or how it affects his attempt to allege reliance; in 

any event Eghtesad has not proposed any “factual and specific” allegations 

that would appear in an amended complaint with respect to any binder or 

other documentation from State Farm. (Rakestraw, supra, 81 Cal.App.4th at 

p. 44.)
19

demonstrated how he can amend his complaint to state a cause of action 

against State Farm for negligent or intentional misrepresentation.

3. Reformation and Negligence

Eghtesad argues in a conclusory fashion that because he can amend his 

complaint to allege intentional and negligent misrepresentation, he can also 

amend his complaint to allege causes of action for reformation of the 

insurance policies and for negligence in failing to procure agreed-upon 

coverage, two causes of action that Eghtesad did not raise at all in his prior 

appeal. (Eghtesad I, supra, 51 Cal.App.5th at p. 413.) 

The arguments fail because they rest on the premise that Eghtesad can 

amend his complaint to allege misrepresentation, which we have rejected. 

Further, Eghtesad does not set forth the elements of the other causes of 

action he seeks to add or show how he would allege facts corresponding to 

each element. (Rakestraw, supra, 81 Cal.App.4th at p. 43.) Accordingly, even 

if leave to amend to allege reformation and negligence falls within the scope 

of the remittitur in Eghtesad I, Eghtesad has not met his burden to show that 

he can amend his complaint to allege these causes of action.

DISPOSITION

Respondents’ motion to dismiss the appeal as to Limones is denied. 

The order striking the claims against Limones is affirmed. The judgment as 

to State Farm is affirmed. Respondents shall recover their costs on appeal. 
20

_________________________

Miller, J.

WE CONCUR:

_________________________

Richman, Acting P.J.

_________________________

Markman, J.*

A163940, Eghtesad v. State Farm General Insurance Co., et al.

* Judge of the Alameda Superior Court, assigned by the Chief Justice 

pursuant to article VI, section 6 of the California Constitution.