No Value: ARNTSEN FAMILY PARTNERSHIP, LP, et al vs. GREGORY J DAVIS, et al

On March 15, 2022 a No Value was filed involving a dispute between Arntsen Family Partnership, Lp, Arntsen, Robert, Brian Christopher Dunn Custodianship, Ho, John, Huang, Quanyu, Lee, Mary, and Black Horse Holdings, Llc, Bragg, David M, Caproc Iii, Llc, Davis, Gregory J, Huang, Quanyu, Huish, Dale, Justesen, Jason, Kludt, Kurtis Stuart, Mclan Trust, Monks Family Trust, Oneil, Scott, Paramont Capital, Llc, Paramont Woodside, Llc, Silicon Valley Real Ventures, Llc, Stoker, Diane, Stoker, Phil, Svrv 385 Moore, Llc, Svrv 387 Moore, Llc, Teh Capital, Llc, Wild Rose Irrevocable Trust, Wolfe, Kevin, Wz Partners Llc, for (16) Unlimited Fraud in the District Court of San Mateo County.

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1
Ernesto F. Aldover (SBN 157625)
2 RETZ & ALDOVER, LLP
2550 Via Tejon, Suite 3A
3 Palos Verdes Estates, California 90274
(310) 540-9800 telephone
4
Jessica E. Chong (SBN 317869)
5 Brian Zimmerman (pro hac vice pending)
SPENCER FANE LLP
6 300 South Fourth Street, Suite 950
Las Vegas, Nevada 89101
7 (702) 408-3400 telephone
8
Attorneys for Defendants
9 Gregory J. Davis, Paramont Woodside, LLC,
Paramont Capital, LLC, SVRV 385 Moore,
10 LLC, and SVRV 387 Moore, LLC
11 SUPERIOR COURT OF THE STATE OF CALIFORNIA
12
COUNTY OF SAN MATEO
13

14 Robert Arntsen; Mary Lee; Arntsen Case No. 22-CIV-01148
Family Partnership, LP; and Brian
15 Christopher Dunn Custodianship; NOTICE OF DEMURRER AND
DEFENDANTS SVRV 385 MOORE,
16 Plaintiffs, LLC, SVRV 387 MOORE, LLC,
GREGORY J. DAVIS, PARAMONT
17 -vs- WOODSIDE, LLC, PARAMONT
CAPITAL, LLC’S DEMURRER TO
18 David M. Bragg; Kurtis Stuart Kludt; PLAINTIFFS’ COMPLAINT
Silicon Valley Real Ventures, LLC;
19 SVRV 385 Moore, LLC; SVRV 387
Moore, LLC; Gregory J. Davis; Paramont
20 Woodside, LLC; and Paramont Capital, [Hon. Robert D. Foiles]
LLC;
21
Defendants. Date: August 19, 2022
22 Time: 9:00 AM
Dept.: 21
23

25 TO THE COURT, PLAINTIFFS, AND THEIR ATTORNEYS OF RECORD:
26 PLEASE TAKE NOTICE that on August 19, 2022 at 9:00 a.m. or as soon
27 thereafter as the matter may be heard in Department 21 of the above-entitled court,
28 located at 800 North Humboldt Street, San Mateo, California 94401, Defendants

MEMO. IN SUPP. OF DEMURRER PAGE I
1 SVRV 385 Moore, LLC, SVRV 387 Moore, LLC, Gregory J. Davis, Paramont Woodside,
2 LLC, and Paramont Capital, LLC, hereby moves this Court for an order granting their
3 Demurrer to Plaintiff’s Complaint. This Demurrer is based upon this notice, the
4 memorandum of points and authorities, the declaration of Jessica E. Chong, Esq., filed
5 concurrently with this motion, the pleadings and records contained in the file, and any
6 oral documentary evidence presented to the court at the time of the hearing.
7

8 Dated: June 15, 2022 SPENCER FANE LLP
9

11 By: /s/ Jessica E. Chong
Jessica E. Chong (SBN 317869)
12 Brian Zimmerman (pro hac vice
pending)
13 SPENCER FANE LLP
300 South Fourth Street, Suite 950
14 Las Vegas, NV 89101
15 and
16 Ernesto F. Aldover, Esq.
RETZ & ALDOVER, LLP
17 2550 Via Tejon, Suite 3A
Palos Verdes Estates, CA 90274
18 Attorneys for Defendants SVRV 385
Moore LLC, SVRV 387 LLC Moore
19 LLC Gregory J. Davis; Paramont
Woodside, LLC; and Paramont
20 Capital, LLC
21

28
MEMO. IN SUPP. OF DEMURRER PAGE II

HOU 4389451.1
1 SUMMARY OF ARGUMENT
2 According to Plaintiffs’ Complaint, Plaintiffs loaned money to defendant Silicon
3 Valley Real Ventures, LLC (SVRV). They did so based on alleged fraudulent
4 representations made by two of SVRV’s members, Bragg and Kludt. However,
5 Plaintiffs attempt to expand their claims to other defendants: SVRV 385 Moore LLC,
6 SVRV 387 LLC Moore LLC (collectively, Moore Road LLCs), Gregory J. Davis,
7 Paramont Woodside LLC, and Paramont Capital, LLC.
8 Based on the Complaint, the only connection between Plaintiffs and the Moore
9 Road LLCs is a tangential one: SVRV was a member in both entities. But that
10 connection is not enough to support Plaintiffs’ claims against those entities. There is
11 even less connection between Plaintiffs and Davis, Paramont Woodside, and
12 Paramont Capital. None of them ever had any communications or relationship with
13 the Plaintiffs and the Complaint does not assert otherwise.
14 The Moore Road LLCs, Davis, Paramont Woodside, and Paramont Capital all
15 assert a demurrer to Plaintiffs Complaint because it does not allege sufficient facts
16 meeting each element of any of the ten causes of action asserted in the Complaint.
17 As to Plaintiffs’ fraud claim against the Moore Road LLCs, the Complaint is
18 devoid of factual allegations with the requisite particularity, including how, when,
19 where, to whom, and by what means any alleged representations were made by Moore
20 Road LLCs. Plaintiffs’ second and third causes of action for violations of the Cal. Bus.
21 and Prof. Code Section 1700 et seq., also fail because that statute does not permit the
22 remedy of damages, the only remedy sought by Plaintiffs. In addition as to the Section
23 17000 claims, Plaintiffs have not, and cannot plead specific facts that support such a
24 claim. The Complaint does not identify a particular section of the statutory scheme
25 which Defendants violated or assert facts satisfying the elements of an unfair
26 practices claim.
27

28
MEMO. IN SUPP. OF DEMURRER PAGE III

HOU 4389451.1
1 Plaintiffs’ fourth cause of action for conversion against the Moore Road, LLCs
2 must fail because California law does not permit a claim for conversion
3 of money under these circumstances. Plaintiffs’ fifth and sixth cause of action for
4 fraudulent transfers against the Moore Road, LLC’s, Davis, Paramont, and Paramont
5 Capital fail because the Complaint fails to allege actual or constructive fraud by those
6 particular defendants and fails to allege sufficient facts for each element of those
7 claims. Plaintiffs’ eighth cause of action for breach of fiduciary duty fails because
8 Plaintiffs fail to allege any facts that would establish a fiduciary relationship as to the
9 demurring Defendants.
10 Plaintiffs’ ninth cause of action for breach of oral contract fails because (i) the
11 Complaint lacks any specificity to establish that an oral contact existed between any
12 of the Plaintiffs and the Defendants; and (ii) the claim is barred by the statute of
13 frauds. Plaintiff’s tenth cause of action for quasi contract, restitution, and unjust
14 enrichment also fails because Plaintiffs’ have not alleged sufficient facts as to the
15 demurring defendants to support such a claim.
16 For these reasons, which are explained more fully below, the demurrer to each
17 cause of action in the Complaint should be sustained. Moreover, a pleadings
18 amendment cannot cure the defects in Plaintiffs’ Complaint. Indeed, as set forth
19 below, Plaintiff's allegations affirmatively demonstrate Plaintiffs’ causes of action
20 against the Defendants must be dismissed. Defendants, therefore, respectfully
21 request that the Court sustain their demurrer as to all causes of action without leave
22 to amend.
23

28
MEMO. IN SUPP. OF DEMURRER PAGE IV

HOU 4389451.1
1 I. TABLE OF CONTENTS
2
MEMORANDUM OF POINTS AND AUTHORITIES ................................................................ 1
3
I. FACTUAL BACKROUND ................................................................................................ 1
4 II. ARGUMENT AND AUTHORITIES ................................................................................. 2
5 A. Plaintiffs fail to plead fraud/intentional misrepresentation/false promise
against the Moore Road LLCs with sufficient particularity.................................... 3
6
B. Plaintiffs’ fail to state a claim as to their second and third causes
7 of action for violation of Cal. Bus. & Prof. Code § 17200, et seq
against the Moore Road LLCs, Paramont Capital, Paramont
8 Woodside, and Davis. ......................................................................................... 5
9 C. Plaintiffs’ conversion claim against the Moore Road LLCs fails to state a
cognizable claim under California law. .................................................................. 6
10
D. The Plaintiffs have failed to state a viable cause of action for fraudulent
11 transfer against the Moore Road LLCs or Davis, Paramont Woodside, or
Paramont Capital. .................................................................................................... 7
12
E. The Plaintiffs have failed to state a breach of fiduciary duty claim because
13 they have not alleged any facts creating a fiduciary duty. ...................................... 9
14 F. Plaintiffs’ claim for breach of oral contract fails because it lacks specificity
and is barred by the statute of frauds. ................................................................... 10
15 G. Plaintiff’s fail to state a claim for quasi-contract/restitution/unjust
16 enrichment against the demurring Defendants...................................................... 11
III. CONCLUSION ................................................................................................................. 12
17

28
MEMO. IN SUPP. OF DEMURRER PAGE V

HOU 4389451.1
1 II. TABLE OF AUTHORITIES
Page(s)
2

3 Cases

4 Bank of the West v. Superior Court
(1992) 2 Cal.4th 1254 ............................................................................................................... 5
5
Blank v. Kirwan
6 (1985) 39 Cal.3d 311 ................................................................................................................ 2
7 Bustamante v. Intuit, Inc.
(2006) 141 Cal.App.4th 199 ................................................................................................... 10
8

9 Cansino v. Bank of America
(2014) 224 Cal.App.4th 1462 ................................................................................................... 4
10
Eghtesad v. State Farm General Insurance Company
11 (2020) 51 Cal.App.5th 406 ....................................................................................................... 3
12 Feitelberg v. Credit Suisse First Boston, LLC
(2005) 134 Cal.App.4th 997 ..................................................................................................... 5
13
Feresi v. The Livery, LLC
14
(2014) 232 Cal.App.4th 419 ..................................................................................................... 9
15
First Nationwide Savings v. Perry
16 (1992) 11 Cal.App.4th 1657 ................................................................................................... 11

17 Green v. Grimes-Stassforth Stationery Co.
(1940) 39 Cal.App.2d 52........................................................................................................... 8
18
Hawkins v. TACA Internat. Airlines, S.A.
19
(2014) 223 Cal.App.4th 466 ..................................................................................................... 8
20
Khoury v. Maly's of California, Inc.
21 (1993) 14 Cal.App.4th 612 ....................................................................................................... 6

22 Korea Supply Co. v. Lockheed Martin Corp.
(2003) 29 Cal.4th 1134 ............................................................................................................. 5
23
Lazar v. Superior Court
24 (1996) 12 Cal.4th 631 ........................................................................................................... 3, 4
25
Lopez v. Southern Cal. Rapid Transit Dist.
26 (1985) 40 Cal.3d 780 ................................................................................................................ 7

27 Marzec v. California Public Employees Retirement System
(2015) 236 Cal.App.4th 889 ..................................................................................................... 9
28
MEMO. IN SUPP. OF DEMURRER PAGE VI

HOU 4389451.1
1 McKell v. Washington Mutual, Inc. (2006)
142 Cal.App.4th 1457, 1491 ..................................................................................................... 7
2
Mejia v. Reed
3
(2003) 31 Cal.4th 657 ............................................................................................................... 8
4
Mendoza v. Continental Sales Co.
5 (2006) 140 Cal.App.4th 1395 ................................................................................................... 9

6 Oaks Management Corporation v. Superior Court
(2006) 145 Cal.App.4th 453 ..................................................................................................... 9
7
Perdue v. Crocker National Bank
8
(1985) 38 Cal.3d 913 ................................................................................................................ 6
9
Ramirez v Wong
10 (2010) 188 Cal. App. 4th 1480 ................................................................................................. 2

11 Software Design & Application, Ltd. v. Hoefer & Arnett, Inc.
(1996) 49 Cal.App.4th 472 ....................................................................................................... 7
12
Stockton Mortgage, Inc. v. Tope
13 (2014) 233 Cal.App.4th 437 ................................................................................................... 10
14
Tarmann v. State Farm Mut. Auto. Ins. Co.
15 (1991) 2 Cal.App.4th 153 ......................................................................................................... 4

16 Vu v. California Commerce Club, Inc.
(1997) 58 Cal.App.4th 229 ....................................................................................................... 7
17
Statutes
18
Bus. & Prof. Code, § 17203 ............................................................................................................ 5
19
Cal. Bus. & Prof. Code § 1720 ....................................................................................................... 3
20

21 Cal. Bus. & Prof. Code § 17200, et seq. ..................................................................................... 3, 5

22 Cal. Civ. Code §1624, subd. (a) .................................................................................................... 10

23 Cal. Civ. Code §1624, subd. (a)(7) ............................................................................................... 10

24 Cal. Civ. Code §3439.01, subd. (b) & (e) ....................................................................................... 8
25 Cal. Civ. Code §3439.04, subd. (a)(1) ............................................................................................ 8
26 Cal. Civ. Code §3439.05(a) ............................................................................................................ 8
27 Cod Civ. Proc. § 430.10, subd. (f) .................................................................................................. 2
28
MEMO. IN SUPP. OF DEMURRER PAGE VII

HOU 4389451.1
1 Code Section 1700 et seq. ............................................................................................................. III
2 Corp. Code, § 17704.09 .................................................................................................................. 9
3

28
MEMO. IN SUPP. OF DEMURRER PAGE VIII

HOU 4389451.1
1 MEMORANDUM OF POINTS AND AUTHORITIES
2 I. FACTUAL BACKROUND
3 Plaintiffs allege that they loaned money to SVRV due to fraud and other
4 wrongful conduct of its two managing members, Bragg and Kludt. (Compl. ¶¶ 8-9, 50.)
5 All of the communications were with Bragg and Kludt. All of the specific conduct on
6 which Plaintiffs purport to base their claims was committed by Bragg, Kludt, and
7 SVRV. (Id. ¶¶ 8-68.) No specific conduct is alleged with regard to the Moore Road
8 LLCs. (Id.) Further, Plaintiffs do not allege facts establishing any relationship,
9 contractual or otherwise, with Paramont Capital, LLC, Paramont Woodside, LLC, or
10 Gregory Davis. (Id.)
11 Paramont Capital provides short-term capital to land developers. (Compl. ¶ 15.)
12 Paramont Woodside was created for the specific purpose of investing in the Moore
13 Road LLCs to purchase, improve, and sell the properties located at 385 and 387 Moore
14 Road, Woodside, California. (Id. ¶ 14.) Davis is the manager of Paramont Woodside
15 and the president of Paramont Capital. (Id. ¶ 13.)
16 SVRV entered into Operating Agreements with Paramont for each of the Moore
17 Road LLCs. (Compl. ¶ 33.) The Operating Agreements listed SVRV and Paramont as
18 the only members. (Id. ¶ 39.) SVRV was listed as having contributed 20% of the initial
19 capital of $150,000 for each property, and Paramont as having contributed the
20 remaining 80%, or $1,000,000 for each property. (Id.) None of the Plaintiffs were listed
21 as having any percentage interest in either entity nor were the Plaintiffs or their loans
22 mentioned anywhere in the Operating Agreements that SVRV and Paramont signed.
23 (Id.) None of the Plaintiffs ever signed any purported Operating Agreement associated
24 with either of the Moore Road LLCs. (Id. ¶ 41) Plaintiffs allege they made loans to
25 SVRV so that SVRV could obtain a $2 million loan from Paramont Capital. (Id. ¶¶ 42,
26 67.) While not stated explicitly, it appears Plaintiffs infer that their loans were used
27 by SVRV as its capital contributions.
28
MEMO. IN SUPP. OF DEMURRER PAGE 1

HOU 4389451.1
1 On November 5, 2019, Paramont gave SVRV notice that SVRV breached the
2 Operating Agreements. (Compl. ¶ 50.) SVRV failed to cure the breach. (Id.) Paramont
3 did not become the manager of each of the Moore Road LLCs until May 2020. (Id.)
4 Paramont informed Bragg that “[n]either you nor SVRV has any further right to bind
5 [the Moore Road LLCs] in any manner, either orally or in writing.” (Id.)
6 Over the course of the following months, the Plaintiffs made multiple attempts
7 to obtain information about their loans from Bragg and Kludt. (Compl. ¶¶ 57-67.)
8 Bragg and Kludt did not provide the requested information, and prior to their bringing
9 this lawsuit, refused to respond at all to Plaintiffs. (Id. ¶ 68.) .
10 II. ARGUMENT AND AUTHORITIES
11 The California Supreme Court succinctly described the standard governing
12 demurrers in Blank v. Kirwan as follows:
13 In reviewing the sufficiency of a complaint against a general demurrer,
we are guided by long-settled rules. We treat the demurrer as admitting
14 all material facts properly pleaded, but not contentions, deductions or
conclusions of fact or law... Further, we give the complaint a reasonable
15 interpretation, reading it as a whole and its parts in their context. When
a demurrer is sustained, we determine whether the complaint states
16 facts sufficient to constitute a cause of action. And when it is sustained
without leave to amend, we decide whether there is a reasonable
17 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
18 no abuse of discretion and we affirm. The burden of proving such
reasonable possibility is squarely on the plaintiff.
19

20 (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) (quotations and citations omitted). A
21 court should sustain a demurrer if a complaint fails to raise facts to meet each and
22 every element of a claimed cause of action. (Ramirez v Wong (2010) 188 Cal. App. 4th
23 1480, 1484.) A demurrer can also be sustained where the pleading is so unclear that
24 a defendant does not have sufficient information for purposes of meaningfully
25 responding. (Cod Civ. Proc. § 430.10, subd. (f).) If the complaint shows on its face that
26 there is no possibility of alleging facts under which recovery can be obtained, denial
27

28
MEMO. IN SUPP. OF DEMURRER PAGE 2

HOU 4389451.1
1 of leave to amend is proper. (Eghtesad v. State Farm General Insurance Company
2 (2020) 51 Cal.App.5th 406, 411–412.)
3 Plaintiffs asserted ten causes of action:
(1) Fraud/Intentional Misrepresentation/False Promise (against Bragg,
4 Kludt, SVRV, and the Moore Road LLCs);
(2) Violation of Cal. Bus. & Prof. Code § 1720 (against Bragg, Kludt, SVRV,
5 and the Moore Road LLCs);
(3) Violation of Cal. Bus. & Prof. Code § 17200, et seq. against all
6 Defendants;
(4) Conversion (against Bragg, Kludt, SVRV, and the Moore Road LLCs on
7 behalf of all Plaintiffs)
(5) Fraudulent Transfer (against Bragg, Kludt, SVRV, and the Moore Road
8 LLCs on behalf of all Plaintiffs);
(6) Fraudulent Transfer (against Davis, Paramont, and Paramont Capital
9 on behalf of all Plaintiffs);
(7) Concealment (against all Defendants on behalf of all Plaintiffs);
10 (8) Breach of Fiduciary Duty (against all Defendants on behalf of all
Plaintiffs);
11 (9) Breach of Oral Contract (against all Defendants on behalf of all
Plaintiffs); and
12 (10) Quasi-Contract / Restitution / Unjust Enrichment (against all
Defendants on behalf of all Plaintiffs).
13

14 None of these causes of action are sufficient to support a legally viable cause of
15 action against the demurring Defendants. Because the Complaint shows on its face
16 that it is incapable of amendment, and there is no possibility that Plaintiffs may allege
17 facts under which recovery can be obtained, leave to amend should be denied. (See
18 Eghtesad, 51 Cal.App.5th at 411-412.)
19 A. Plaintiffs fail to plead fraud/intentional misrepresentation/false
20 promise against the Moore Road LLCs with sufficient particularity.
21 The elements of fraud are (1) misrepresentation, (2) knowledge of falsity, (3)
22 intent to induce reliance on the misrepresentation, (4) justifiable reliance on the
23 misrepresentation, and (5) resulting damages. (Lazar v. Superior Court (1996) 12
24 Cal.4th 631, 638.) Promissory fraud is merely a subspecies of fraud. (Id.) General and
25 conclusory allegations are insufficient to properly plead a fraud claim. (Id. at 645.)
26 Lazar, 12 Cal. 4th at 645, 49 Cal.Rptr.2d 377, 909 P.2d 981. Fraud must be pleaded
27 with particularity, which demands that a plaintiff plead facts demonstrating “how,
28
MEMO. IN SUPP. OF DEMURRER PAGE 3

HOU 4389451.1
1 when, where, to whom, and by what means the representations were tendered.” Id.
2 Further, when a plaintiff asserts fraud against an entity, the plaintiff must as to that
3 entity “allege the names of the persons who made the allegedly fraudulent
4 representations, their authority to speak, to whom they spoke, what they said or
5 wrote, and when it was said or written.” (Tarmann v. State Farm Mut. Auto. Ins. Co.
6 (1991) 2 Cal.App.4th 153, 157; Cansino v. Bank of America (2014) 224 Cal.App.4th
7 1462, 1468–1469.)
8 As to the Moore Road LLCs, the Complaint fails to allege, among other things,
9 the substance of any alleged representations made by the Moore Road LLCs, who
10 made them on behalf of the Moore Road LLCs, when they were made, and to whom
11 they were made. The Complaint also does not allege the required facts to specifically
12 tie the alleged misrepresentations to either of the Moore Road LLCs. Instead, any
13 wrongful conduct, however ambiguously alleged, is tied to Bragg and Kludt,
14 individually. (Compl. ¶ 65.) For example, the Plaintiffs alleged that “Bragg and Kludt
15 asked Bob if he would be interested in reinvesting his proceeds into a new project that
16 SVRV was developing…” (Id. ¶ 20.) Then the Complaint also alleges that it was Bragg
17 who contacted the Plaintiffs for funding, looked into obtaining the necessary permits,
18 scheduled investor meetings, and made representations about Plaintiffs’ investment.
19 (Id. ¶¶ 23-24.) Additionally, Kludt was the one who prepared “drafts of the investment
20 and operating agreements ‘matching the terms discussed and presented’ for the
21 limited liability companies that would become Moore Road LLCs. (Id. ¶ 26.) But the
22 Complaint does not mention any misrepresentations made by the Moore Road LLCs
23 or plead facts with particularity to support such allegations.1
24 Thus, demurrer is warranted on Plaintiff’s first cause of action for fraud as to
25 the Moore Road LLCs.
26

27 1
It should be noted that at paragraphs 11 and 12 of the Complaint, Plaintiffs conclusorily allege that the Moore Road
LLCs are the alter egos of Bragg and Kludt. However, the Complaint fails to allege any facts to support that this is
28 the case. Thus, the Court should sustain a demurrer as to this allegation.

MEMO. IN SUPP. OF DEMURRER PAGE 4

HOU 4389451.1
1 B. Plaintiffs’ fail to state a claim as to their second and third causes of action for
2 violation of Cal. Bus. & Prof. Code § 17200, et seq against the Moore Road LLCs,
3 Paramont Capital, Paramont Woodside, and Davis.
4 Plaintiffs have not alleged a valid cause of action under § 17200, et seq for two
5 independent reasons: (1) the only remedy they seek of damages is not permissible
6 under the statute; and (2) they have failed to alleged specific facts constituting a claim
7 under the statute.
8 First, the remedy of damages sought by plaintiff is not available under the
9 statute. It is Section 17203 that entitles a private plaintiff to assert a cause of action
10 under the unfair business practices act (i.e. § 17200, et seq). (Bus. & Prof. Code, §
11 17203.) But damages are not available under Section 17203. (Bank of the West v.
12 Superior Court (1992) 2 Cal.4th 1254, 1266.) The statute only permits injunction relief
13 and restitution. (Id.) In addition, a claim of restitution under Section 17203 is limited
14 to compelling a defendant to return money it obtained through an unfair business
15 practice to the person who had an ownership interest in it. (Korea Supply Co. v.
16 Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1149.) To meet the requirements, the
17 defendant from whom restitution is sought must have obtained something to which it
18 was not entitled. (Feitelberg v. Credit Suisse First Boston, LLC (2005) 134 Cal.App.4th
19 997, 1012.) Thus, even if a plaintiff can trace funds that it gave to someone that
20 committed an unfair practice, it cannot recover them from the offender as part of a
21 legitimate transaction.
22 Here, the Plaintiffs have clearly alleged solely a claim for damages for both its
23 Section 17200 claims, which is not legally permissible. (Compl. ¶¶ 85, 86, 94.) Further,
24 the allegations are not sufficient to allege a claim for restitution because there are no
25 facts indicating that any of the demurring Defendants obtained funds from the
26 Plaintiffs or obtained any funds to which they were not entitled.
27

28
MEMO. IN SUPP. OF DEMURRER PAGE 5

HOU 4389451.1
1 Second, the Complaint does not properly allege the elements of an unfair
2 business practice claim. A plaintiff alleging unfair business practices under these
3 statutes must state with reasonable particularity the facts supporting the statutory
4 elements of the violation. (Perdue v. Crocker National Bank (1985) 38 Cal.3d 913, 929–
5 930; Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 619.)
6 Plaintiffs’ Complaint does not identify a particular section of the unfair
7 business practices statutory scheme that Paramont Capital, Paramont Woodside,
8 Davis or the Moore Road LLCs supposedly violated. Also, the Complaint does not
9 describe with any reasonable particularity the facts supporting the elements of any
10 violation against the demurring Defendants. The Plaintiffs allege a misrepresentation
11 in relation to the second cause of action committed by Bragg, Kludt, and SVRV.
12 (Compl. ¶ 81.) But, they do not allege any particular conduct committed by the Moore
13 Road LLCs. Similarly, the Complaint does not describe any facts supporting statutory
14 violations against Paramont Capital, Paramont Woodside, Davis or the Moore Road
15 LLCs. The Plaintiffs assert that each of these Defendants had a fiduciary duty to the
16 Plaintiffs and that they allegedly concealed facts from the Plaintiffs that should have
17 been disclosed. (Id. ¶¶ 88-91.) But, the Complaint does not explain how the supposed
18 fiduciary duty or duty to disclose came to exist. The Complaint clearly indicates that
19 the Plaintiffs and the demurring Defendants were essentially strangers to each other.
20 The law does not support a fiduciary duty under such circumstances.
21 Thus, the demurrer should be sustained as to the second and third causes of
22 action. Because the factual allegations cannot be re-plead to state a viable claim,
23 Plaintiffs should not be afforded an opportunity to amend.
24 C. Plaintiffs’ conversion claim against the Moore Road LLCs fails to state
25 a cognizable claim under California law.
26 A cause of action for conversion requires allegations of plaintiff's ownership or
27 right to possession of property; defendant's wrongful act toward or disposition of the
28
MEMO. IN SUPP. OF DEMURRER PAGE 6

HOU 4389451.1
1 property, interfering with plaintiff's possession; and damage to plaintiff. (McKell v.
2 Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1491.) Money cannot be the
3 subject of a cause of action for conversion unless there is a specific, identifiable sum
4 involved. (Id.) This essentially requires that a plaintiff allege that the defendant held
5 an identifiable sum of money in trust for a particular purpose that the defendant did
6 not fulfill. (Id.; see also Software Design & Application, Ltd. v. Hoefer & Arnett, Inc.
7 (1996) 49 Cal.App.4th 472, 485 (dismissing claim for conversion of money where
8 plaintiff did not allege funds were held in escrow or otherwise segregated in a separate
9 fund for benefit of plaintiff.) A generalized claim for money is not actionable as
10 conversion. (Vu v. California Commerce Club, Inc. (1997) 58 Cal.App.4th 229, 235.)
11 In this case, Plaintiffs have failed to plead a definite, identifiable sum of money
12 that any of the demurring Defendants were required to hold in trust or segregate for
13 the benefit of the Plaintiffs. To the contrary, the Complaint makes clear that the
14 Plaintiffs knew their loan funds would generally be invested in property, which is why
15 they were expecting to receive interest. (Compl. ¶¶ 97, 99.) Moreover, even if Plaintiffs
16 had properly pleaded that they provided funds to Bragg, Kludt, or

Case Info

Judge

Finigan, Jeffrey R. Track Judge’s New Case

Case No.

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Document Filed Date

June 15, 2022

Case Filing Date

March 15, 2022

County

Parties

ALDOVER, ERNESTO F. Attorney for the Defendant
ARNTSEN FAMILY PARTNERSHIP, LP Plaintiff
ARNTSEN, ROBERT Plaintiff
Black Horse Holdings, LLC Defendant
BRAGG, DAVID M Defendant
BRIAN CHRISTOPHER DUNN CUSTODIANSHIP Plaintiff
Caproc III, LLC Defendant
CHONG, JESSICA E Attorney for the Defendant
DAVIS, GREGORY J Defendant
HO, JOHN Plaintiff
HUANG, QUANYU Defendant
HUANG, QUANYU Plaintiff
Huish, Dale Defendant
JUSTESEN, JASON Defendant
KLUDT, KURTIS STUART Defendant
LEE, MARY Plaintiff
McLan Trust Defendant
Monks Family Trust Defendant
ONeil, Scott Defendant
PARAMONT CAPITAL, LLC Defendant
PARAMONT WOODSIDE, LLC Defendant
POE, MARK Attorney for the Defendant
SILICON VALLEY REAL VENTURES, LLC Defendant
STEENIS, RYAN VAN Attorney for the Defendant
Stoker, Diane Defendant
Stoker, Phil Defendant
SVRV 385 MOORE, LLC Defendant
SVRV 387 MOORE, LLC Defendant
TEH Capital, LLC Defendant
VIERRA, COLLIN J Attorney for the Plaintiff
Wild Rose Irrevocable Trust Defendant
WOLFE, KEVIN Defendant
WZ Partners LLC Defendant
Brian Zimmerman Attorney
Nicholas Rose Attorney
Randolph Gaw Attorneys for Plaintiffs
Howard Strong Attorney
Ned Tolbert Attorney
Daniel Egan Attorney
Jason Eldred Attorney
Christopher Dugan Attorneys for Defendants

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No Value: ARNTSEN FAMILY PARTNERSHIP, LP, et al vs. GREGORY J DAVIS, et al

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