Allen

FACTS

In October 2007, Small filed a complaint against Deanna Allen, which we refer to as the original complaint.2 Small alleged that Allen defrauded her in the sale of a laundromat business. The original complaint was entitled, “Complaint for Damages and Other Relief Based on Declaratory Relief for Recission and Restitution.” Small alleged that the parties had negotiated a sale price of $440,000 for the business and that escrow closed in that amount. The original complaint attached an escrow settlement statement as an exhibit showing that escrow closed in the amount of $442,455.78. Following the close of escrow, Small operated the business but found that the revenue was significantly less than what Allen had represented. Rather than operating at a consistent profit, as represented, it operated at a consistent loss. “In short,” the complaint alleged, “[Allen’s] representations about the finances and profitability of the business were all false.”

1 All further statutory references are to the Code of Civil Procedure unless otherwise indicated. 2 The original complaint also included as a plaintiff Jon Small (Kelly’s husband) and as a defendant Thomas Allen (Deanna’s husband). Both…