arrow left
arrow right
  • ARNTSEN FAMILY PARTNERSHIP, LP, et al  vs.  GREGORY J DAVIS, et al(16) Unlimited Fraud document preview
  • ARNTSEN FAMILY PARTNERSHIP, LP, et al  vs.  GREGORY J DAVIS, et al(16) Unlimited Fraud document preview
  • ARNTSEN FAMILY PARTNERSHIP, LP, et al  vs.  GREGORY J DAVIS, et al(16) Unlimited Fraud document preview
  • ARNTSEN FAMILY PARTNERSHIP, LP, et al  vs.  GREGORY J DAVIS, et al(16) Unlimited Fraud document preview
  • ARNTSEN FAMILY PARTNERSHIP, LP, et al  vs.  GREGORY J DAVIS, et al(16) Unlimited Fraud document preview
  • ARNTSEN FAMILY PARTNERSHIP, LP, et al  vs.  GREGORY J DAVIS, et al(16) Unlimited Fraud document preview
  • ARNTSEN FAMILY PARTNERSHIP, LP, et al  vs.  GREGORY J DAVIS, et al(16) Unlimited Fraud document preview
  • ARNTSEN FAMILY PARTNERSHIP, LP, et al  vs.  GREGORY J DAVIS, et al(16) Unlimited Fraud document preview
						
                                

Preview

1 Ryan van Steenis (SBN 254542) 1601 S Shepherd Dr., #276 2 Houston, Texas 77019 314-749-2284 3 rjvansteenis@gmail.com 3/22/2023 4 Attorney for Defendants Dave Bragg, and 5 Silicon Valley Real Ventures, LLC 6 SUPERIOR COURT OF THE STATE OF CALIFORNIA 7 FOR THE COUNTY OF SAN MATEO 8 9 Robert Arntsen; Mary Lee; Arntsen Family ) Case No.: 22-CIV-01148 10 Partnership, LP; and Brian Christopher Dunn ) Custodianship, ) DEFENDANTS DAVID BRAGG AND 11 ) SILICON VALLEY REAL VENTURES Plaintiffs, ) LLC’S MEMORANDUM OF POINTS AND ) AUTHORITIES IN SUPPORT OF THEIR 12 NOTICE OF MOTION TO STRIKE vs. ) ) PLAINTIFFS’ FIRST AMENDED 13 COMPLAINT David M. Bragg; Kurtis Stuart Kludt; Silicon ) 14 Valley Real Ventures LLC; SVRV 385 Moore, ) [Filed concurrently with Notice of Motion and LLC; SVRV 387 Moore, LLC; Gregory J. Davis; ) Motion to Strike, Declaration of Ryan van 15 Kevin Wolfe; Jason Justesen; Paramont ) Steenis, and Request for Judicial Notice] Woodside, LLC; and Paramont Capital, LLC; ) 16 ) Judge: Hon. Robert D. Foiles ) Date: June 2, 2023 17 ) Time: 9:00 a.m. Defendants. ) Dept: 21 18 ) Courtroom: 2J ) 19 ) ) 20 Memorandum of Points and Authorities 21 in Support of Defendant Bragg and SVRV’s Motion to Strike 22 23 I. INTRODUCTION/FACTUAL BACKGROUND 24 On August 22, 2022, Plaintiffs filed their first amended complaint (“FAC”) in this Court, 25 including against Defendants Bragg and Silicon Valley Real Ventures LLC (“Defendants”). By 26 agreement, Defendants’ response did not come due until October 22, 2022. However, Defendant 27 28 -1- Bragg and SVRV’s Memorandum of Points and Authorities in Support of their Notice of Motion and Motion to Strike 1 Bragg filed for Chapter 7 bankruptcy protection on October 21, 2022, creating an automatic stay in 2 this action and obviating the need to provide a response. 3 On February 24, 2023, the United States Bankruptcy Court for the Eastern District of 4 California, Sacramento Division, lifted the automatic stay in this matter, sua sponte, to allow the 5 state court action to continue for purposes of determining whether Defendant Bragg owed Plaintiffs 6 a debt. 7 On February 27, 2023, without conference, Plaintiffs moved for request of entry of default. 8 Defendants opposed that request and on March 9, 2023, this Court granted Defendants’ request for 9 an extension of time to answer or otherwise respond to the operative pleading (the FAC) on or 10 before March 24, 2023, which Defendants now do with the motion to strike. 11 Plaintiffs assert causes of action for: 12 1. Fraud/Intentional Misrepresentation/False Promise 13 2. Fraud/Intentional Misrepresentation/False Promise against Bragg and SVRV on 14 behalf of Bob 15 3. Violation of Bus. & Prof. Code § 17200 against Bragg and SVRV on behalf of Bob 16 and the Arntsen Partnership 17 4. Violations of Bus. & Prof. Code § 17200 against Bragg and SVRV on behalf of Bob 18 5. Violations of Bus. & Prof. Code § 17200 against all Defendants on behalf of all 19 Plaintiffs 20 6. Fraudulent Concealment against Bragg and SVRV on behalf of all Plaintiffs 21 7. Fraudulent Concealment against all Defendants on behalf of all Plaintiffs 22 8. Breach of Fiduciary Duty, Duties of Loyalty, Care, Good Faith, and Fair Dealing 23 against all Defendants on behalf of all Plaintiffs 24 9. Breach of Contract against all Defendants on behalf of all Plaintiffs 25 10. Breach of Contract against Bragg and SVRV on behalf of Bob 26 11. Breach of Oral Contract against Bragg and SVRV on behalf of all Plaintiffs 27 12. Quasi-Contract/Restitution/Unjust Enrichment against all Defendants on behalf of all 28 Plaintiffs. -2- Bragg and SVRV’s Memorandum of Points and Authorities in Support of their Notice of Motion and Motion to Strike 1 As the above list demonstrates, many of these causes of action are duplicative and subsumed within 2 one another, but each allegation Bragg and SVRV have identified in their motion relies on 3 irrelevant, false, or improper matters in support of Plaintiffs allegations, and with respect to the 4 causes of action each requests punitive damages even where it is clear California jurisprudence does 5 not allow for such a recovery. 6 II. AUTHORITIES AND ARGUMENT 7 A. Plaintiffs irrelevant, false, or improper allegations are Subject to Strike Under 8 Cal. Civ. Pro. Code §435-437 9 The function of a motion to strike is to strike out “any irrelevant, false, or improper matter” 10 inserted in any pleading, and to strike out any part of a pleading “not drawn or filed in conformity 11 with the laws of this state.” Cal. Civ. Proc. Code §436. “Irrelevant matter” is defined by statute to 12 include demands for damages or relief that are not supported by the allegations. Id. at §431.10(b). As 13 shown in Defendants’ motion to strike, the grounds shall appear on the face of the challenged FAC 14 or from any matter of which this court is required to take judicial notice. Id. at §437(c). 15 Here, each of the allegations Defendants have moved to strike are either irrelevant, false, or 16 improperly included. Where the Defendants challenge the allegations as irrelevant or false, they are 17 premised on the terms of the Effective Operating Agreement Plaintiffs plead, contend are valid, and 18 are suing on but does not contain the language they allege. It appears Plaintiffs have plead the 19 Unapproved Operating Agreement’s terms for rights they supposedly carry to enforce the terms of 20 the Effective Operating Agreement, which does not provide them with such rights. See, specifically, 21 RJN, Exhibit 1, at Exhibit C to Arntsen Affidavit). Accordingly, it is proper for the Court to strike 22 those allegations identified in Defendants’ motion at ¶ 22, 24, 54, 70-73, 80, 83, 101, 102, 117, 124, 23 138, 141, 142, 143, 153, 162, 163, and 164. 24 B. Plaintiffs’ Punitive Damages Claims 25 As the Paramont Defendants’ moving papers currently point out: “Factual pleading for 26 punitive damages requires specificity, and conclusory allegations are insufficient. Blegen v. Superior 27 Court, 125 Cal. App.3d 959, 963 (1981); Smith v. Superior Court, 10 Cal.App.4th 1033, 1041 (1992). 28 Cal. Civ. Code §3294(c) requires a showing of fraud, malice or oppression before an award of punitive -3- Bragg and SVRV’s Memorandum of Points and Authorities in Support of their Notice of Motion and Motion to Strike 1 damages may issue. To justify an award of punitive damages, defendants ‘must act with an intent to 2 vex, injure or annoy, or with a conscious disregard for plaintiff's rights.’ Beck v. State Farm Mutual 3 Auto Ins. Co., (1976) 54 Cal.App.3d 347, 355 (citation omitted).) Further, ‘[p]roof of a violation of 4 the duty of good faith and fair dealing does not establish that the defendant acted with the requisite 5 intent to injure the plaintiff.’ (Ibid.) ‘The law does not favor punitive damages and they should be 6 granted with the greatest caution.’” (Ibid.) 7 Plaintiffs punitive damage claims are not pleaded with the requisite factual or specificity 8 required to assert such a request. “Not only must there be circumstances of oppression, fraud or 9 malice, but facts must be alleged in the pleading to support such a claim.” Grieves v. Super. Ct., 157 10 Cal.App.3d 159, 166; see also, Id. at 164 (“Punitive damages are merely incident to a cause of 11 action, and can never constitute the basis thereof”). Accordingly, for punitive damages claims 12 to survive a strike challenge Plaintiffs were required to allege the “ultimate facts” that, if true, would 13 entitle them to punitive damages. Clauson v. Superior Court, (1998) 67 Cal.App.4th 1253, 1255. 14 However, here Plaintiffs have failed to do so. Instead, each allegation in support of the 15 punitive damages request is a “conclusory characterization of defendant’s conduct as intentional, 16 willful and fraudulent is a patently insufficient statement of oppression, fraud, or malice.” Brousseau 17 v. Jarrett, (1977) 73 Cal.App.3d 864, 872. Plaintiffs’ punitive damage allegations set forth in the FAC 18 are conclusory and unsupported by facts or specificity. This defect in their pleadings warrants the 19 Court to strike ¶174, 182, 193, 200, 209, 220, 230, 236, 245, 259, 265, and paragraph c of Plaintiffs’ 20 request for relief. 21 C. Bus. & Prof. Code §17200 does not allow for Punitive Damages 22 The Paramont Defendants’ memorandum of points and authorities correctly demonstrates that 23 punitive damages are not available under Bus. & Prof. Code §17200. In the interest of conserving 24 Court time and resources from reading redundant papers, Bragg and SVRV refer to and incorporate 25 the arguments made by the Paramont Defendants at II, paragraph 2, into this section as if fully set 26 forth herein. 27 28 -4- Bragg and SVRV’s Memorandum of Points and Authorities in Support of their Notice of Motion and Motion to Strike 1 D. Contract Claims Do Not Allow for Punitive Damages Either 2 Finally, California law is clear that punitive damages are not available for contract claims, 3 even if Defendants’ breach was willful or fraudulent. See, Cal. Code Civ. Proc. §3294(a); see also, 4 Contractor's Safety Ass'n v. California Compensation Ins. Co., (1957) 48 Cal 2d. 71, 77 (“It is settled 5 that punitive damages may not be awarded ‘... in an action based on breach of contract even though 6 the defendant's breach was wilful or fraudulent.’ (citing to, Crogan v. Metz, 47 Cal.2d 398, 405).” 7 Undeterred by this long-standing precedent, Plaintiffs nevertheless seek punitive damages in 8 their ninth, tenth, eleventh, and twelfth causes of action asserting breaches of various contracts. The 9 Court should strike ¶245, 252, 259, and 265 of the FAC. 10 III. CONCLUSION 11 Based on the foregoing analysis, the allegations Defendants have identified in their motion 12 are subject to strike per Code of Civ. Proc. §435-437 and the Cal. Evid. Codie §452 and 453. It is 13 unclear whether a pleadings amendment could cure the defects in Plaintiffs’ operative pleadings, but 14 based on the factual development to date it does not appear Plaintiffs are capable of curing these 15 defects, especially as it relates to allegations regarding the Effective Operating Agreements. 16 Therefore, Defendants respectfully request that the Court strike those allegations identified in their 17 motion to strike. 18 DATED: March 22, 2023 19 Ryan van Steenis Attorney for Defendant Bragg and 20 Silicon Valley Real Ventures, LLC 21 22 23 24 25 26 27 28 -5- Bragg and SVRV’s Memorandum of Points and Authorities in Support of their Notice of Motion and Motion to Strike PROOF OF SERVICE 1 I am over the age of 18 and not a party to this action. I hereby certify that on March 22, 2 2023, I served the following document(s) on the parties in the above-entitled action: 3 DAVID BRAGG AND SILICON VALLEY REAL VENTURES LLC’S 4 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF 5 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO STRIKE 6 Via Email: I emailed the document(s) referenced above to the following persons at the following 7 email addresses: 8 Robert Dunn rdunn@eimerstahl.com 9 Collin Vierra 10 cvierra@eimerstahl.com Counsel for Plaintiffs 11 Jessica Chong 12 jchong@spencerfane.com 13 Brian Zimmerman bzimmerman@spencerfane.com 14 Nicolas Reisch nreisch@spencerfane.com 15 Ernesto Aldover ernesto@arealestatelawfirm.com 16 Counsel for Defendants Gregory J. Davis, Kevin Wolfe, Jason Justesen, Paramont 17 Woodside, LLC, Paramont Capital, LLC, SVRV 385 Moore, LLC, and SVRV 387 Moore, LLC 18 I declare under penalty of perjury under the laws of the State of California that the foregoing is a 19 true and correct statement. 20 Dated: March 22, 2023 21 Ryan van Steenis 22 Attorney for Defendant Bragg and Silicon Valley Real Ventures, LLC 23 24 25 26 27 28 -1- Proof of Service to Bragg and SVRV’s Memorandum of Points and Authorities in Support of their Notice of Motion and Motion to Strike