Preview
Brian Zimmerman (admitted pro hac vice) Electronically
Nicholas Reisch (admitted pro hac vice)
Jessica E. Chong (SBN 317869) by Superior Court of California, County of San Mateo
SPENCER FANE LLP ON 9/21/2023
3040 Post Oak Blvd., Suite 1400
Houston, TX 77056 By /s/ Haley Correa
Deputy Clerk
(718) 552-1234 telephone
Ernesto F. Aldover (SBN 157625)
RETZ & ALDOVER, LLP
2550 Via Tejon, Suite 3A
Palos Verdes Estates, California 90274
(310) 540-9800 telephone
Attorneys for Defendants
SVRV 385 Moore, LLC; SVRV 387 Moore, LLC;
Gregory J. Davis; Kevin Wolfe; Jason Justesen;
Paramont Woodside, LLC; Paramont Capital,
10 LLC; Monks Family Trust; TEH Capital, LLC;
Caproc III, LLC; WZ Partners LLC; McLan
11 Trust; Wild Rose Irrevocable Trust; Black
Horse Holdings, LLC; Phil Stoker; Diane
12 Stoker; Scott O’Neil; and Dale Huish
13
SUPERIOR COURT OF THE STATE OF CALIFORNIA
14
COUNTY OF SAN MATEO
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16 Case No. 22-CIV-01148 consolidated
Robert Arntsen; Mary Lee; Arntsen
Family Partnership, LP; and Brian with Case No. 22-CIV-01099
17
Christopher Dunn Custodianship;
DEFENDANTS SVRV 385 MOORE,
18 LLC, SVRV 387 MOORE, LLC,
Plaintiffs,
19
GREGORY J. DAVIS, KEVIN WOLFE.
-vs- JASON JUSTESEN, PARAMONT
20
WOODSIDE, LLC, PARAMONT
David M. Bragg; Kurtis Stuart Kludt; CAPITAL, LLC, MONKS FAMILY
Silicon Valley Real Ventures, LLC; TRUST, TEH CAPITAL, LLC,
21 CAPROC III, LLC, WZ PARTNERS
SVRV 385 Moore, LLC; SVRV 387
22 Moore, LLC; Gregory J. Davis; Kevin LLC, MCLAN TRUST, WILD ROSE
Wolfe; Jason Justesen; Paramont IRREVOCABLE TRUST, BLACK
23 Woodside, LLC; and Paramont Capital, HORSE HOLDINGS, LLC, PHIL
LLC; STOKER, DIANE STOKER, SCOTT
O’NEIL, AND DALE HUISH’S REPLY
24 IN SUPPORT OF THEIR MOTION
Defendants.
TO STRIKE
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PAGE1
John Ho and Quanyu Huang; Date: September 29, 2023
Time: 9:00 a.m.
Plaintiffs, Dept.: 21
-Vs- Honorable Robert D. Foiles
David M. Bragg; Silicon Valley Real
Ventures, LLC; SVRV 385 Moore, LLC;
SVRV 387 Moore, LLC; Gregory J.
Davis; Kevin Wolfe; Jason Justesen;
Paramont Woodside, LLC; Paramont
Capital, LLC; Monks Family Trust; TEH
Capital, LLC; Caproc III, LLC; WZ
Partners LLC; McLan Trust; Wild Rose
Irrevocable Trust; Black Horse Holdings,
LLC; Phil Stoker; Diane Stoker; Scott
O’Neil; and Dale Huish;
Defendants.
10
11
12 I INTRODUCTION
13 As an initial matter, Plaintiffs state that although they describe striking
14 defendants’ conduct as , willful, outrageous, malicious, oppressive, and fraudulent,’
15 they do not seek punitive damages for violation of section 17200.” (See Opposition, 9:4-
16 7). Based on Plaintiffs’ arguments, it naturally holds that, although not addressed,
17 they do not seek punitive damages with respect to their claims for unjust enrichment
18 (SAC 4383) and money had and received (id. at 391).
19 Since Plaintiffs concede that they are not seeking punitive damages as to their
20 claims for violation of section 17200, unjust enrichment, and money had and received,
21 the only remaining claims are fraudulent concealment (SAC 284), breach of fiduciary
22 duty (id.at 9348), and fraudulent transfer (id. at 9357). Although, it is true that
23 defendants Paramont Capital! and Gregory Davis did not file a demurrer to Plaintiffs’
24 fraudulent concealment or breach of fiduciary duty claims, it is not because they are
25 conceding that these claims were rightfully asserted against them, as Plaintiffs argue.
26 Instead, based on this Court’s prior ruling on the demurrer and motion to strike, in
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28 1 Paramont Woodside’s prior demurrer was overruled.
PAGE 2
an effort to preserve judicial resources and for the sake of judicial economy, striking
defendants acknowledged that this Court found these claims to be sufficiently alleged
against certain defendants. Therefore, striking defendants’ request to strike punitive
damages were limited to the six (6), now three (3) claims.
Here, the factual inconsistencies and deficiencies preclude Plaintiffs from
seeking punitive damages against striking defendants. Plaintiffs’ SAC is fatally
flawed in that it contains contradictory allegations, makes fraud allegations without
the specificity required, and over generalizes the conduct of the striking defendants.
This does not meet the standard for alleging punitive damages.
10 Il. LEGAL ANALYSIS
11 Where a complaint includes generalized allegations in support of a claimed
12 right to recover punitive damages but otherwise fails to establish any such right, a
13 motion to strike those allegations is properly granted under Sections 435 and 436.
14 (See, e.g., Turman v. Turning Point of Central Cal., Inc. (2010) 191 Cal. App.4" 53, 63-
15 64 (affirming the striking of punitive damages allegations where the facts alleged
16 failed to rise to the requisite level of malice, oppression or fraud).) “Certainly, the mere
17 characterization of the conduct challenged as willful, reckless, wrongful and unlawful
18 is not of itself sufficient to charge the malice in fact required to sustain a cause of
19 action for punitive damages.” Gombos, 158 Cal. App.2d at 529; Cyrus v. Haveson, 65
20 Cal. App.3d 306, 316 (1976); Grieves v. Superior Court, 157 Cal. App.3d 159, 166
21 (1984); Hilliard v. A.H. Robbins Company, 148 Cal. App.3d 374, 391 (1983); Interior
22 Systems, Inc. v. Del E. Webb Corp., 121 Cal. App.3d 312, 316 (1981) (“Conclusory
23 allegations without facts to support them are ambiguous and may be disregarded.”).
24 A Plaintiffs’ request for punitive damages as to relates to their
25 claim for fraudulent concealment must be stricken.
26 Wolfe and Justesen maintain that for all the reasons set forth in their moving
27 papers and reply brief in support of the demurrer, Plaintiffs fail to state facts sufficient
28
PAGE 3
to constitute a cause of action against them. Without restating their arguments, the
SAC is devoid of any facts or allegations that Wolfe and/or Justesen knew of Plaintiffs’
investments (the SAC allegations are indeed to the contrary) and that they were under
a duty to disclose certain information because it was known or only accessible to them
(Plaintiffs do not allege that they sought out information and was denied access — they
were willfully ignorant because of their trust in Bragg/SVRV). Based on the lack of
allegations and specificity as to Wolfe and/or Justesen’s knowledge or conduct, this
Court should strike the punitive damages asserted against them.
B. Plaintiffs’ request for punitive damages as to relates to their
10 claim for breach of fiduciary duty must be stricken.
11 This Court previously found Plaintiffs’ argument that Wolfe had a fiduciary
12 based on his title as “CFO” was insufficient. Since Plaintiffs have not cured this
13 deficiency, the punitive damages asserted against Wolfe should be dismissed.
14 Cc Plaintiffs’ request for punitive damages as to relates to their
15 claim for fraudulent transfer must be stricken.
16 Striking defendants maintain that for all the reasons set forth in their moving
17 papers and reply brief in support of the demurrer, Plaintiffs fail to state facts sufficient
18 to constitute a cause of action against them. Without restating their arguments, the
19 SAC makes fraud allegations without the specificity required and over generalizes the
20 conduct of the striking defendants by combining the actions of all defendants together.
21 To sustain a claim for fraudulent transfer, not only must the debtor be identified, but,
22 the SAC must allege how that particular debtor satisfies the remaining elements (i.e.,
23 the debtor (1) was insolvent at the time of transfer, (2) became insolvent as a result of
24 the transfer, (3) was engaged in business for which the remaining assets of the debtor
25 were small in relation to the transaction, or (4) believed that it would incur debts
26 beyond the debtor’s ability to pay as they became due; and transfer was not in
27 exchange for “a reasonably equivalent value.”).
28 Plaintiffs attempts to conflate the actions of all defendants onto each other, and
PAGE 4
generally asserts that certain behavior rises to the level of oppression, fraud, or
malice; however, this is not the level of specificity that the claim requires. As such,
this Court should strike the punitive damages claim against striking defendants.
I. CONCLUSION
Striking defendants respectfully request that this Court strike Plaintiffs’
request for punitive damages.
Dated: September 21, 2023 SPENCER FANE LLP
By: /s/ Jessica E. Chong
Brian Zimmerman (admitted pro hac
vice
Nicholas Reisch (admitted pro hac
10 vice
Jessica E. Chong (SBN 317869)
11 SPENCER FANE LLP
3040 Post Oak Blvd., Suite 1400
12 Houston, TX 77056
13 and
14 Ernesto F. Aldover, Esq.
RETZ & ALDOVER, LLP
15 2550 Via Tejon, Suite 3A
Palos Verdes Estates, CA 90274
16 Attorneys for Defendants
17
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PROOF OF SERVICE
STATE OF NEVADA, COUNTY OF CLARK
Iam employed in the county of Las Vegas State of Nevada. I am over the age of 18
and not a party to the action; my business address is 300 S. Fourth Street, Suite 950
Las Vegas, NV 89101.
On September 21, 2023, I served the foregoing document(s) described as
DEFENDANTS SVRV 385 MOORE, LLC, SVRV 387 MOORE, LLC,
GREGORY J. DAVIS, KEVIN WOLFE, JASON JUSTESEN, PARAMONT
WOODSIDE, LLC, PARAMONT CAPITAL, LLC, MONKS FAMILY TRUST,
TEH CAPITAL, LLC, CAPROC III, LLC, WZ PARTNERS LLC, MCLAN
TRUST, WILD ROSE IRREVOCABLE TRUST, BLACK HORSE HOLDINGS,
LLC, PHIL STOKER, DIANE STOKER, SCOTT O’NEIL, AND DALE HUISH’S
REPLY IN SUPPORT OF THEIR MOTION TO STRIKE as follows:
10
Collin J. Vierra (State Bar No. 322720) Ryan van Steenis (8.B. #254542)
11 EIMER STAHL LLP 1601 S Shepherd Dr., #276
99 Almaden Blvd., Suite 641 Houston, Texas 77019
12 rjvansteenis@gmail.com
San Jose, CA 95113-1605 ATTORNEY FOR DEFENDANTS
13 Telephone: (408) 889-1668 DAVID M. BRAGG AND SILICON
Email: cvierra@eimerstahl.com VALLEY REAL VENTURES, LLC
14
Attorney for Plaintiffs
15
16 X_ (BY US MAIL) As follows: I am “readily familiar” with the firm’s practice of
collection and processing correspondence for mailing. Under that practice it would be
17 deposited with the U.S. Postal Service on that same day with postage thereon fully
prepaid at Palos Verdes Estate, CA in the ordinary cause of business. I am aware
18
that on motion of the party served, service is presumed invalid of postal cancellation
19 date or postage meter is more than one day after date of deposit for mailing an
affidavit.
20
X_ (BY ELECTRONIC SERVICE) I electronically served the foregoing document(s)
21
on opposing counsel via electronic mail.
22
x (STATE) I declare under penalty of perjury under the laws of the State of
23 Nevada that the foregoing is true and correct.
24
Executed on September 21, 2023 at Las Vegas, Nevada.
25
/s/ Adam Miller
26 Adam Miller
27
28
Preview
Brian Zimmerman (admitted pro hac vice) Electronically Nicholas Reisch (admitted pro hac vice) Jessica E. Chong (SBN 317869) by Superior Court of California, County of San Mateo SPENCER FANE LLP ON 9/21/2023 3040 Post Oak Blvd., Suite 1400 Houston, TX 77056 By /s/ Haley Correa Deputy Clerk (718) 552-1234 telephone Ernesto F. Aldover (SBN 157625) RETZ & ALDOVER, LLP 2550 Via Tejon, Suite 3A Palos Verdes Estates, California 90274 (310) 540-9800 telephone Attorneys for Defendants SVRV 385 Moore, LLC; SVRV 387 Moore, LLC; Gregory J. Davis; Kevin Wolfe; Jason Justesen; Paramont Woodside, LLC; Paramont Capital, 10 LLC; Monks Family Trust; TEH Capital, LLC; Caproc III, LLC; WZ Partners LLC; McLan 11 Trust; Wild Rose Irrevocable Trust; Black Horse Holdings, LLC; Phil Stoker; Diane 12 Stoker; Scott O’Neil; and Dale Huish 13 SUPERIOR COURT OF THE STATE OF CALIFORNIA 14 COUNTY OF SAN MATEO 15 16 Case No. 22-CIV-01148 consolidated Robert Arntsen; Mary Lee; Arntsen Family Partnership, LP; and Brian with Case No. 22-CIV-01099 17 Christopher Dunn Custodianship; DEFENDANTS SVRV 385 MOORE, 18 LLC, SVRV 387 MOORE, LLC, Plaintiffs, 19 GREGORY J. DAVIS, KEVIN WOLFE. -vs- JASON JUSTESEN, PARAMONT 20 WOODSIDE, LLC, PARAMONT David M. Bragg; Kurtis Stuart Kludt; CAPITAL, LLC, MONKS FAMILY Silicon Valley Real Ventures, LLC; TRUST, TEH CAPITAL, LLC, 21 CAPROC III, LLC, WZ PARTNERS SVRV 385 Moore, LLC; SVRV 387 22 Moore, LLC; Gregory J. Davis; Kevin LLC, MCLAN TRUST, WILD ROSE Wolfe; Jason Justesen; Paramont IRREVOCABLE TRUST, BLACK 23 Woodside, LLC; and Paramont Capital, HORSE HOLDINGS, LLC, PHIL LLC; STOKER, DIANE STOKER, SCOTT O’NEIL, AND DALE HUISH’S REPLY 24 IN SUPPORT OF THEIR MOTION Defendants. TO STRIKE 25 26 27 28 PAGE1 John Ho and Quanyu Huang; Date: September 29, 2023 Time: 9:00 a.m. Plaintiffs, Dept.: 21 -Vs- Honorable Robert D. Foiles David M. Bragg; Silicon Valley Real Ventures, LLC; SVRV 385 Moore, LLC; SVRV 387 Moore, LLC; Gregory J. Davis; Kevin Wolfe; Jason Justesen; Paramont Woodside, LLC; Paramont Capital, LLC; Monks Family Trust; TEH Capital, LLC; Caproc III, LLC; WZ Partners LLC; McLan Trust; Wild Rose Irrevocable Trust; Black Horse Holdings, LLC; Phil Stoker; Diane Stoker; Scott O’Neil; and Dale Huish; Defendants. 10 11 12 I INTRODUCTION 13 As an initial matter, Plaintiffs state that although they describe striking 14 defendants’ conduct as , willful, outrageous, malicious, oppressive, and fraudulent,’ 15 they do not seek punitive damages for violation of section 17200.” (See Opposition, 9:4- 16 7). Based on Plaintiffs’ arguments, it naturally holds that, although not addressed, 17 they do not seek punitive damages with respect to their claims for unjust enrichment 18 (SAC 4383) and money had and received (id. at 391). 19 Since Plaintiffs concede that they are not seeking punitive damages as to their 20 claims for violation of section 17200, unjust enrichment, and money had and received, 21 the only remaining claims are fraudulent concealment (SAC 284), breach of fiduciary 22 duty (id.at 9348), and fraudulent transfer (id. at 9357). Although, it is true that 23 defendants Paramont Capital! and Gregory Davis did not file a demurrer to Plaintiffs’ 24 fraudulent concealment or breach of fiduciary duty claims, it is not because they are 25 conceding that these claims were rightfully asserted against them, as Plaintiffs argue. 26 Instead, based on this Court’s prior ruling on the demurrer and motion to strike, in 27 28 1 Paramont Woodside’s prior demurrer was overruled. PAGE 2 an effort to preserve judicial resources and for the sake of judicial economy, striking defendants acknowledged that this Court found these claims to be sufficiently alleged against certain defendants. Therefore, striking defendants’ request to strike punitive damages were limited to the six (6), now three (3) claims. Here, the factual inconsistencies and deficiencies preclude Plaintiffs from seeking punitive damages against striking defendants. Plaintiffs’ SAC is fatally flawed in that it contains contradictory allegations, makes fraud allegations without the specificity required, and over generalizes the conduct of the striking defendants. This does not meet the standard for alleging punitive damages. 10 Il. LEGAL ANALYSIS 11 Where a complaint includes generalized allegations in support of a claimed 12 right to recover punitive damages but otherwise fails to establish any such right, a 13 motion to strike those allegations is properly granted under Sections 435 and 436. 14 (See, e.g., Turman v. Turning Point of Central Cal., Inc. (2010) 191 Cal. App.4" 53, 63- 15 64 (affirming the striking of punitive damages allegations where the facts alleged 16 failed to rise to the requisite level of malice, oppression or fraud).) “Certainly, the mere 17 characterization of the conduct challenged as willful, reckless, wrongful and unlawful 18 is not of itself sufficient to charge the malice in fact required to sustain a cause of 19 action for punitive damages.” Gombos, 158 Cal. App.2d at 529; Cyrus v. Haveson, 65 20 Cal. App.3d 306, 316 (1976); Grieves v. Superior Court, 157 Cal. App.3d 159, 166 21 (1984); Hilliard v. A.H. Robbins Company, 148 Cal. App.3d 374, 391 (1983); Interior 22 Systems, Inc. v. Del E. Webb Corp., 121 Cal. App.3d 312, 316 (1981) (“Conclusory 23 allegations without facts to support them are ambiguous and may be disregarded.”). 24 A Plaintiffs’ request for punitive damages as to relates to their 25 claim for fraudulent concealment must be stricken. 26 Wolfe and Justesen maintain that for all the reasons set forth in their moving 27 papers and reply brief in support of the demurrer, Plaintiffs fail to state facts sufficient 28 PAGE 3 to constitute a cause of action against them. Without restating their arguments, the SAC is devoid of any facts or allegations that Wolfe and/or Justesen knew of Plaintiffs’ investments (the SAC allegations are indeed to the contrary) and that they were under a duty to disclose certain information because it was known or only accessible to them (Plaintiffs do not allege that they sought out information and was denied access — they were willfully ignorant because of their trust in Bragg/SVRV). Based on the lack of allegations and specificity as to Wolfe and/or Justesen’s knowledge or conduct, this Court should strike the punitive damages asserted against them. B. Plaintiffs’ request for punitive damages as to relates to their 10 claim for breach of fiduciary duty must be stricken. 11 This Court previously found Plaintiffs’ argument that Wolfe had a fiduciary 12 based on his title as “CFO” was insufficient. Since Plaintiffs have not cured this 13 deficiency, the punitive damages asserted against Wolfe should be dismissed. 14 Cc Plaintiffs’ request for punitive damages as to relates to their 15 claim for fraudulent transfer must be stricken. 16 Striking defendants maintain that for all the reasons set forth in their moving 17 papers and reply brief in support of the demurrer, Plaintiffs fail to state facts sufficient 18 to constitute a cause of action against them. Without restating their arguments, the 19 SAC makes fraud allegations without the specificity required and over generalizes the 20 conduct of the striking defendants by combining the actions of all defendants together. 21 To sustain a claim for fraudulent transfer, not only must the debtor be identified, but, 22 the SAC must allege how that particular debtor satisfies the remaining elements (i.e., 23 the debtor (1) was insolvent at the time of transfer, (2) became insolvent as a result of 24 the transfer, (3) was engaged in business for which the remaining assets of the debtor 25 were small in relation to the transaction, or (4) believed that it would incur debts 26 beyond the debtor’s ability to pay as they became due; and transfer was not in 27 exchange for “a reasonably equivalent value.”). 28 Plaintiffs attempts to conflate the actions of all defendants onto each other, and PAGE 4 generally asserts that certain behavior rises to the level of oppression, fraud, or malice; however, this is not the level of specificity that the claim requires. As such, this Court should strike the punitive damages claim against striking defendants. I. CONCLUSION Striking defendants respectfully request that this Court strike Plaintiffs’ request for punitive damages. Dated: September 21, 2023 SPENCER FANE LLP By: /s/ Jessica E. Chong Brian Zimmerman (admitted pro hac vice Nicholas Reisch (admitted pro hac 10 vice Jessica E. Chong (SBN 317869) 11 SPENCER FANE LLP 3040 Post Oak Blvd., Suite 1400 12 Houston, TX 77056 13 and 14 Ernesto F. Aldover, Esq. RETZ & ALDOVER, LLP 15 2550 Via Tejon, Suite 3A Palos Verdes Estates, CA 90274 16 Attorneys for Defendants 17 18 19 20 21 22 23 24 25 26 27 28 PAGE 5 PROOF OF SERVICE STATE OF NEVADA, COUNTY OF CLARK Iam employed in the county of Las Vegas State of Nevada. I am over the age of 18 and not a party to the action; my business address is 300 S. Fourth Street, Suite 950 Las Vegas, NV 89101. On September 21, 2023, I served the foregoing document(s) described as DEFENDANTS SVRV 385 MOORE, LLC, SVRV 387 MOORE, LLC, GREGORY J. DAVIS, KEVIN WOLFE, JASON JUSTESEN, PARAMONT WOODSIDE, LLC, PARAMONT CAPITAL, LLC, MONKS FAMILY TRUST, TEH CAPITAL, LLC, CAPROC III, LLC, WZ PARTNERS LLC, MCLAN TRUST, WILD ROSE IRREVOCABLE TRUST, BLACK HORSE HOLDINGS, LLC, PHIL STOKER, DIANE STOKER, SCOTT O’NEIL, AND DALE HUISH’S REPLY IN SUPPORT OF THEIR MOTION TO STRIKE as follows: 10 Collin J. Vierra (State Bar No. 322720) Ryan van Steenis (8.B. #254542) 11 EIMER STAHL LLP 1601 S Shepherd Dr., #276 99 Almaden Blvd., Suite 641 Houston, Texas 77019 12 rjvansteenis@gmail.com San Jose, CA 95113-1605 ATTORNEY FOR DEFENDANTS 13 Telephone: (408) 889-1668 DAVID M. BRAGG AND SILICON Email: cvierra@eimerstahl.com VALLEY REAL VENTURES, LLC 14 Attorney for Plaintiffs 15 16 X_ (BY US MAIL) As follows: I am “readily familiar” with the firm’s practice of collection and processing correspondence for mailing. Under that practice it would be 17 deposited with the U.S. Postal Service on that same day with postage thereon fully prepaid at Palos Verdes Estate, CA in the ordinary cause of business. I am aware 18 that on motion of the party served, service is presumed invalid of postal cancellation 19 date or postage meter is more than one day after date of deposit for mailing an affidavit. 20 X_ (BY ELECTRONIC SERVICE) I electronically served the foregoing document(s) 21 on opposing counsel via electronic mail. 22 x (STATE) I declare under penalty of perjury under the laws of the State of 23 Nevada that the foregoing is true and correct. 24 Executed on September 21, 2023 at Las Vegas, Nevada. 25 /s/ Adam Miller 26 Adam Miller 27 28