Preview
Case Number: 22-CIV-01148
SUPERIOR COURT OF SAN MATEO COUNTY
400 County Center 1050 Mission Road 800 North Humboldt Street
Redwood City, CA 94063 South San Francisco, CA 94080 San Mateo, CA 94401
www.sanmateocourt.org
Minute Order
ARNTSEN FAMILY PARTNERSHIP, LP, et al vs. GREGORY J DAVIS, et al 22-CIV-01148
05/26/2023 9:00 AM
Hearing on Demurrer
Hearing Result: Held
Judicial Officer: Foiles, Robert D Location: Courtroom 2J
Courtroom Clerk: Alexandrina Ortega Courtroom Reporter: Geraldine Vandeveld
Parties Present
VIERRA, COLLIN J Attorney
ZIMMERMAN, BRIAN Attorney
Exhibits
Minutes
Journals
Case Events
- Matter is called at: 9:16 am
- Party appeared by audio and/or video; Attorney: ZIMMERMAN, BRIAN
- Tentative ruling modified* and becomes order:
Defendants SVRV 385 Moore, LLC et. al.'s 3-22-23 Demurrer to Plaintiffs Robert Artnsen et. al.'s 8-22-22
First Amended Complaint (FAC), is SUSTAINED-IN-PART and OVERRULED-IN-PART, as set forth below.
Page limits. Going forward, the parties are advised to strictly comply with stated page limits for all
briefing. The CRC-imposed page limitations exist to insure brevity; they are not an invitation for
parties/their counsel to gain additional pages by transferring large swaths of text into the footnotes.
Footnotes should be used sparingly.
Meet and confer. The 3-22-23 meet and confer declaration of attorney Chong does not comply with
Code Civ. Proc. Sect. 430.41(a), because it does not state whether the attorneys actually spoke in-person
or by phone and discussed the substance of the Demurrer, which Sect. 430.41 requires. A mere
exchange of correspondence does not suffice. In its discretion, however, the Court has overlooked this
defect and proceeded to analyze the Demurrer on the merits. Counsel is reminded to strictly comply
with meet and confer requirements going forward.
As to the First Cause of Action (alleging "Fraud / Intentional Misrepresentation / False Promise")
(asserted by all Plaintiffs against the Moore Road LLCs), the Demurrer is OVERRULED.
Only the two Moore Road LLC defendants have demurred to this claim; they argue it is not plead with
sufficient particularity. This claim alleges fraud by (a) intentional misrepresentation; and/or (b) false
promise. If the claim states a cause of action on either theory, the Demurrer must be overruled.
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Case Number: 22-CIV-01148
Brousseau v. Jarrett (1977) 73 Cal.App.3d 864.
The Moore Rd. LLCs' Demurrer argues that while the FAC may allege misrepresentations by Kludt and/or
Bragg, it does not allege misrepresentations by the Moore Road LLCs. The Demurrer argues that
although the FAC alleges that Defendant Bragg was/is the alter ego of the Moore Road LLCs, the alter
ego allegations are too conclusory (unsupported by enough facts). The Court finds that this fraud claim is
sufficiently plead against the two Moore Road LLCs.
First, as noted, the FAC alleges misrepresentations and/or false promises by Defendant Bragg in his
capacity as the two Moore Rd. LLC's Manager, and thus, as the LLCs' Manager (under an agency theory),
his alleged fraud can be attributed to the LLCs. See, e.g., FAC, Par. 87-88 (alleging that the Moore Road
LLCs, speaking through their Manager, Bragg, falsely represented in March 2019 that Plaintiffs would be
repaid promptly with 12% interest if they provided $200,000 in short-term loans); id., Par. 110-112
(alleging that Bragg, again, speaking on behalf of the Moore Road LLCs, represented in March 2020 that
Plaintiffs would be repaid with 12% interest if they extended additional loans to prevent the bank from
foreclosing on the properties, and representing that their loans would have priority over all equity
investments). Since these misrepresentations/false promises were allegedly made by the LLCs' Manager,
for purposes of Demurrer, they are attributable to the Moore Road, LLCs under an agency theory. (FAC
Par. 54, 120).
Further, at the Demurrer stage, the FAC sufficiently alleges that Bragg and the Moore Road LLCs
were/are alter egos. Defendants' argument that the alter ego allegations are entirely conclusory
overlooks several relevant alter ego factual allegations. See FAC, Par. 22-26; 141-141 (alleging that Bragg
moved funds indiscriminately (commingled assets) between the Moore Road LLCs and SVRV, which
Bragg likewise operated as his alter ego; that Bragg commingled the Moore Road LLCs' funds with his
own personal funds; that Bragg and Kludt "siphoned investor funds" from the Moore Rd. LLCs' bank
accounts for their personal enrichment; that the Moore Road LLCs' expenses were not properly
accounted for/tracked; and that the LLCs' corporate formalities were not followed).
At the Demurrer stage, the Court finds the foregoing alter ego allegations sufficient, and disagrees that
they are too conclusory. See Rutherford Holdings, LLC v. Plaza Del Rey (2014)223 Cal.App.4th 221
(rejecting, on demurrer, argument that alter ego had not been sufficiently plead; "[Plaintiff] was
required to allege only "ultimate rather than evidentiary facts. Moreover ... less particularity is required
where the defendant may be assumed to possess knowledge of the facts at least equal, if not superior,
to that possessed by the plaintiff"); Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550 ("the complaint
ordinarily is sufficient if it alleges ultimate rather than evidentiary facts").
As to the Third Cause of Action and the Fifth Cause of Action (alleging a violation of Bus. & Prof. Code
Sect. 17200 violation against all Defendants), the Demurrer is OVERRULED as to the two Moore Rd. LLC
Defendants and Defendant Paramont Woodside, LLC, and SUSTAINED as to the other demurring
Defendants.
The fraud and fiduciary duty claims can serve as a predicate basis for a Sect. 17200 claim. However,
because no valid claim is asserted against the other demurring Defendants, the 17200 claim fails as to
the other demurring Defendants.
As to the Sixth Cause of Action (fraudulent by concealment) (by all Plaintiffs against the Moore Road
LLCs) and the Seventh Cause of Action (alleging fraudulent by concealment against all Defendants), the
Demurrer is OVERRULED as to the two Moore Rd. LLC defendants, but SUSTAINED with leave to amend
as to the other demurring Defendants.
The Demurrer argues that the claim is not properly plead because (a) there can be no "concealment"
absent a duty to disclose, and Defendants contend there are no alleged facts establishing a duty to
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disclose; and (b) as to the entity Defendants, the FAC does not specifically allege concealment by any
entity.
The Court notes that, oddly, the Demurrer refers to "misrepresentations" and argues that the FAC does
not allege any "false representation." This argument is misplaced, because this cause of action alleges
fraud by concealment-not fraud by misrepresentation.
"[T]he elements of an action for fraud-concealment are: (1) defendant concealed or suppressed a
material fact, (2) defendant was under a duty to disclose the fact to the plaintiff, (3) defendant
intentionally concealed or suppressed the fact with the intent to defraud plaintiff, (4) plaintiff was
unaware of the fact and would not have acted as he/she did if he//she had known of the concealed or
suppressed fact, and (5) resulting damage to plaintiff. Boschma v. Home Loan Center, Inc. (2011) 198
Cal.App.4th 230, 248; CACI 1901. As noted, the pleading must allege facts establishing that defendant
was in a relationship with plaintiff that triggered a duty to disclose. Hahn v. Mirda (2007) 147
Cal.App.4th 740, 745; CACI 1901's "Directions for Use" state in part:
Regarding element 1, before there can be liability for concealment, there must usually be a duty to
disclose arising from a fiduciary or confidential relationship between the parties. However, in
transactions that do not involve fiduciary or confidential relations, a duty to disclose material facts may
arise in at least three instances: (1) the defendant makes representations but does not disclose facts
that materially qualify the facts disclosed, or that render his disclosure likely to mislead (option 2); (2)
the facts are known or accessible only to defendant, and defendant knows they are not known to or
reasonably discoverable by the plaintiff (option 3); (3) the defendant actively conceals discovery from
the plaintiff (option 4). (See Warner Constr. Corp. v. L.A. (1970) 2 Cal.3d 285, 294.) For the second, third,
and fourth options, if the defendant asserts that there was no relationship based on a transaction giving
rise to a duty to disclose, the jury should also be instructed to determine whether the requisite
relationship existed.
Thus, a fiduciary relationship is not required to plead a claim for fraud by concealment.
As to the two Moore Rd. LLC defendants, the Demurrer is OVERRULED. The Sixth Cause of Action alleges
that at the time Plaintiffs were making investments in/loans to the Moore Rd. project, the Moore Rd.
LLCs, acting through their Managers (Bragg and Paramont Woodside, LLC), concealed/failed to disclose
to Plaintiffs several facts, including-that Kludt, Bragg, SVRV, and the Moore Road LLCs had, in fact, not
used Plaintiffs' loans and investments to make the contributions required under the "Unapproved
Operating Agreements," (Par. 215); and that when Kludt, Bragg, SVRV, and the Moore Road LLCs
solicited additional funds from Plaintiffs in 2019, Defendants were already in breach of the Unapproved
Operating Agreements, and were intending to and did use Plaintiffs' funds for Defendants' own personal
ends. (Id.) Arguably, these allegations sufficiently allege a concealment claim against the Moore Rd. LLCs.
As to the other demurring Defendants, the Demurrer is SUSTAINED with leave to amend due to
insufficient allegations of intent-i.e., the FAC does no clearly allege that any of the other demurring
Defendants knew about/were aware of Plaintiffs' alleged loans to / investments in the Moore Rd.
project(s). The FAC generally alleges that at the time Plaintiffs were making investments in/loans to the
Moore Rd. project(s), the demurring Defendants, each of which/who was intimately involved in
Paramont Woodside, LLC, concealed/failed to disclose to Plaintiffs important information that, had
Plaintiffs known of such information, Plaintiffs would not have invested in or loaned additional money to
the Moore Rd. projects. Specifically, the FAC alleges that the demurring Defendants concealed/failed to
disclose the following:
The existence of the Unapproved Operating Agreements (and amendments thereto (see Par. 6, alleging
Kludt and Bragg conspired with Defendants Davis, Justesen, and several other individuals at Paramont
Capital, LLC to unlawfully amend the operating agreements to benefits themselves/the Paramont
entities, which harmed Plaintiffs); Par. 7 (alleging the Unapproved Operating Agreements were kept
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hidden from Plaintiffs for seven months); Par. 223 (same);
The fact that in May 2020, Paramont Woodside, LLC, while managed by Defendant Davis, assumed
management of the Moore Road LLCs (see Par. 12, 25 78-80, 149, and that Defendants Davis and Wolfe
forced Bragg to agree to amend the Unapproved Operating Agreements to further benefit the Paramont
entities);
The Moore Rd. projects' precarious financial state long before the properties sold (Par. 70, 72);
Various management decisions that hurt minority investors like Plaintiffs, but benefitted management
and insiders (Par. 12, 112, 118, 124- 8);
Expected losses on the Moore Rd Project, which Defendants allegedly concealed in order to prevent
Plaintiffs from withdrawing their investments (Par. 224).
Concealment, however, requires intent, and the FAC does not clearly allege that the demurring
Defendants were ever aware of Plaintiffs' alleged loans/investments in the Moore Rd. project(s). The
demurring Defendants claim to have been strangers to Plaintiffs. The FAC appears to allege only that
Plaintiffs interacted with Bragg, Kludt, and SVRV. It is not apparent, from the FAC's allegations, that any
of the Plaintiffs ever interacted with the other demurring Defendants, or that the other demurring
Defendants had any knowledge that Plaintiffs had given money to Bragg that was intended
for/earmarked for the Moore Rd. project(s), or that Plaintiffs claimed to have invested in the Moore Rd.
project/properties.
Absent allegations that the demurring parties were aware of Plaintiffs' alleged loans to/investments in
the Moore Rd. project(s)/LLCs, the FAC fails to plead the requisite intent on demurring Defendants' part
to support a fraud-concealment claim.
As to the Eighth Cause of Action (breach of fiduciary duty) (asserted by all Plaintiffs against all
Defendants), the Demurrer is OVERRULED as to Defendant Paramont Woodside, LLC, but SUSTAINED
with leave to amend as to the remaining demurring Defendants.
An LLC manager owes fiduciary duties to the LLC's members. Corp. Code Sect. 17704.09 (an LLC member
in a member-managed LLC, and an LLC manager in a manager-managed LLC, owes fiduciary duties of
care and loyalty to the LLC and all its members in regard to LLC operations. These duties include
prohibitions against self-dealing and conflicts of interests. LLC managers and members must discharge
their duties consistently with the obligations of good faith and fair dealing.) No fraudulent intent is
required. Civ. Code Sect. 1573.
As to Defendant Paramont Woodside, LLC, the Demurrer is OVERRULED.
The FAC alleges that "Paramont Woodside-acting as both Manager and Majority Shareholder"-acted to
benefit "its own interests to the detriment of smaller investors in the Moore Road LLCs, including
Plaintiffs," by misappropriating hundreds of thousands of dollars that belonged to Plaintiffs. (FAC Par. 6,
12, 30, 125-6, 137.) This claim essentially alleges that Paramont Woodside, LLC, as Manager of the
Moore Rd. LLCs, engaged in self-dealing, thereby harming the alleged LLC members (Plaintiffs).
This appears to be a close call, considering the lack of clear allegations that Paramont Woodside, LLC
(and its principals) was/were aware of Plaintiffs' interest/membership in the Moore Rd. LLCs. However,
for purposes of Demurrer, the Court finds that the breach of fiduciary duty claim is sufficiently stated
against Paramont Woodside, LLC.
As to the two Moore Rd. LLC Defendants, the Demurrer is SUSTAINED with leave to amend. Plaintiffs cite
no authority holding that an LLC, as an entity, owes fiduciary duties to its members. Plaintiff's Opposition
brief does even appear to argue that an LLC owes fiduciary duties to its members.
As to the remaining demurring Defendants, the Demurrer is SUSTAINED with leave to amend. The FAC
does not appear to allege that any of the remaining demurring Defendants was either (a) a Manager of
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the Moore Rd. LLCs; or (b) a managing member of the Moore Rd. LLCs. Thus, the FAC does not appear to
allege any basis for asserting a breach of fiduciary duty claim against the other defendants.
The FAC alleges that Defendant Davis was "the effective Manager of SVRV 385 Moore, LLC and SVRV 387
Moore, LLC" ... [t]hrough [Davis'] operation of Paramont Woodside, Paramont Capital, SVRV 385 Moore,
LLC, and SVRV 387 Moore, LLC, Davis harmed Plaintiffs." (Par. 12). But Plaintiffs cite no authority that an
"effective" manager (although not the actual Manager) of an LLC owes fiduciary duties to the LLC's
members.
The FAC alleges that Defendant Paramont Capital, LLC is a lending company that provides short-term
capital to land developers. It alleges Paramont Capital incorporated and capitalized Paramont Woodside
for the purpose of investing in the properties located at 385 Moore Road, Woodside, Ca. and 387 Moore
Road, Woodside, Ca. The FAC further alleges that Defendants Davis, Wolfe, and Justesen were/are
officers of Paramont Capital, and that Paramont Capital received a $76,224 management fee when the
Moore Rd. properties sold. (Par. 29). Plaintiffs do not explain, however, how the foregoing allegations
create a fiduciary relationship between Paramont Capital, LLC and Plaintiffs.
The FAC alleges that Defendant Wolfe was the CFO of both Paramont Woodside and Paramont Capital,
and that he was the primary individual in charge of the finances for SVRV 385 Moore, LLC and SVRV 387
Moore, LLC. It alleges that through Wolfe's operation of Paramont Woodside, Paramont Capital, and the
Moore Rd. LLCs, Wolfe harmed Plaintiffs by acts of self-dealing. (Par. 12, 28) The FAC does not allege,
however, that Wolfe ever served as the Moore Rd. LLCs' Manager. Thus, the allegations do not appear to
establish a fiduciary relationship between Wolfe and Plaintiffs.
The FAC alleges that Defendant Justesen is/was the Vice President of Paramont Capital, LLC, and was
involved with due diligence and negotiations with Bragg and SVRV for Paramont Woodside's
investments in SVRV 385 Moore, LLC and SVRV 387 Moore, LLC. (Par 29). Plaintiffs do not explain how
these alleged facts establish a fiduciary relationship between Justesen and Plaintiffs.
As to the Ninth Cause of Action (breach of contract) (asserted by all Plaintiffs against all Defendants), the
Demurrer is OVERRULED as to Paramont Woodside, LLC, but SUSTAINED with leave to amend as to all
demurring Defendants.
An LLC operating agreement is a contract amongst LLC members that governs the members' rights and
obligations. Corp. Code Sect. 17001(ab) ("Operating agreement means any agreement, written or oral,
between all of the members as to the affairs of a limited liability company and the conduct of its
business ...").
The FAC alleges that in 2018, "Plaintiffs agreed with Kludt, Bragg, and SVRV to the terms of the Effective
Operating Agreements," and that "pursuant the agreement of those parties, the Effective Operating
Agreements became effective when Kludt, Bragg, and SVRV incorporated the Moore Road LLCs in June
2018." (Par. 239). It alleges that "[p]laintiffs were thus members of the Moore Road LLCs and had all the
contractual rights enumerated in the Effective Operating Agreements." (Id.) Plaintiffs allege that the
Effective Operating Agreements required unanimous written consent to be amended. (Par. 83.) They
allege that the demurring Defendants, who were "required to abide by the terms of the Effective
Operating Agreements, which governed the operations of the Moore Road LLCs ... breached the terms of
the Effective Operating Agreements by purporting to amend them and replace them with the
Unapproved Operating Agreements without Plaintiffs' knowledge or consent." (Par. 78-83, 241).
"Defendants also breached the terms of the Effective Operating Agreements by paying themselves
unauthorized management fees and other returns (Par. 12; 137; 242) ... and by paying themselves
substantial sums upon the sale of the Moore Road properties, including both principal and profits, but
not returning any money to Plaintiffs ..." (Par. 243).
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Case Number: 22-CIV-01148
The Court concludes that the foregoing allegations sufficiently allege a breach of contract (breach of
operating agreement) against the members of the Moore Rd., LLCs. The FAC alleges Paramont
Woodside, LLC was a member of the Moore Rd., LLC, but does not allege that the other demurring
Defendants were members. If the other demurring Defendants were not members of the LLC, Plaintiffs
to do appear to allege a contractual relationship with them.
As to the Eleventh Cause of Action (breach of oral contract) (all Plaintiffs against the Moore Road LLCs),
the Demurrer is OVERRULED. This claim alleges that Plaintiffs formed oral contracts with Kludt, Bragg,
SVRV, and the Moore Road LLCs in which Plaintiffs agreed to invest money in exchange for a promise
that upon sale of the Moore Road properties, Plaintiffs would share in the profits of the Moore Road
Project. (Par. 256). It alleges the Moore Rd. LLC defendants "breached the terms of these oral contracts
by refusing to return principal, profits, and interest to Plaintiffs." (Par. 257); see also Par. 5 (alleging that
in 2017, Bragg asked Plaintiff to invest in the "Moore Rd. project," which would consist of buying and
developing two properties that would be held by two separate LLCs; Plaintiffs would be members of the
LLCs; in Feb. 2018, Kludt showed Plaintiffs operating agreements for the two proposed LLCs, which
stated that Plaintiffs were members and would be first in line to receive profits; once the two LLCs were
formed in June 2019, the parties (including Plaintiffs and Bragg, who was the LLC's Manager) agreed that
the terms of those operating agreements applied; Plaintiffs invested hundreds of thousands of dollars in
the Moore Rd. project; Bragg was initially the sole Manager of the two LLCs; both operating agreements
provided that the operating agreements could not be amended without written consent of all
members).
The Demurrer argues (a) the FAC does not allege a "meeting of the minds" between Plaintiffs and the
Moore Rd. LLCs, and (b) any oral agreement is barred by the statute of frauds. (Civ. Code Sect. 1624(a).)
None of the parties appears to address the question of whether an LLC is, or can be, a party to its own
operating agreement. But Code Corp. Code Sect. 17701.11(a) provides that an LLC is "bound by" its
operating agreement.
The Court finds that the FAC sufficiently alleges an oral contract between Plaintiffs and the two Moore
Rd. LLCs. See, e.g., Par. 8, 87, 120 (alleging that on March 19, 2019, defendant Bragg, acting as the
Moore Road LLCs' Manager, solicited from Plaintiffs $200,000 in loans for the Moore Road LLCs for the
promise of a 12% return); Par. 110-112 (Plaintiffs made additional loans to the LLCs on April 1, 2020 after
Bragg, acting at the LLCs' Manager, promised Plaintiffs 12% interest).
For purposes of Demurrer, the Moore Rd. LLCs have not established that the statute of frauds applies.
(Civ. Code Sect. 1624(a)). The Demurrer cites to portions of Civ. Code Sect. 1624(a) pertaining to (a) a
promise to answer for the debt of another, and (b) an agreement by someone in the business of loaning
money to loan more than $100,000. (Sect. 1624(a)(7)). Based on the allegations, however, it is not clear
that the statute of frauds applies. The allegations in Par. 18-21 do not appear to establish that Plaintiffs
were "in the business of loaning money." Nor does the FAC appear to allege that the subject loans were
in excess of $100,000. (Par. 88, 111.) Nor is it apparent from the allegations that the alleged oral
agreement involves "a promise to answer for the debt of another." And it does it not appear from the
allegations that Plaintiffs seek to hold the Moore Road LLCs liable as "guarantors."
As to the Twelfth Cause of Action ("Quasi-Contract / Restitution / Unjust Enrichment") (asserted by all
Plaintiffs against all Defendants), the Demurrer is OVERRULED as against the Moore Rd LLCs and
Paramont Woodside, LLC, but SUSTAINED with leave* as to the other demurring Defendants.
If this claim asserts a valid cause of action under any of the identified theories (quasi-
contract/restitution/unjust enrichment), the Demurrer must be overruled. Brousseau v. Jarrett (1977) 73
Cal.App.3d 864.
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Case Number: 22-CIV-01148
"Unjust enrichment is synonymous with restitution. Durell v. Sharp Healthcare (2010) 183 Cal.App.4th
1350, 1370. A person is required to make restitution if the failure to do so would result in unjust
enrichment. First Nationwide Savings v. Perry (1992) 11 Cal.App.4th 1657, 1662-1663.) Restitution of the
benefits conferred under a contract may be awarded if the contract is rescinded or determined to be
unenforceable. Durell, supra, at 1370; Prakashpalan (2014) 223 Cal.App.4th 1105, 1132 (The elements
for a claim of unjust enrichment are "receipt of a benefit and unjust retention of the benefit at the
expense of another. The theory of unjust enrichment requires one who acquires a benefit which may not
justly be retained, to return either the thing or its equivalent to the aggrieved party so as not to be
unjustly enriched.")
California decisions have differed on whether "unjust enrichment" constitutes a stand-alone cause of
action. Compare Prakashpalan (2014) 223 Cal.App.4th 1105, 1132 (allowing unjust enrichment claim)
with Durell v. Sharp Healthcare, 183 Cal.App.4th 1350, 1370, (2010) (disallowing the claim). But courts
that have found that unjust enrichment is not itself a cause of action have construed the common law to
allow an unjust enrichment cause of action through quasi-contract. See Astiana v. Hain Celestial Grp.,
Inc., 783 F.3d 753, 762 (9th Cir.2015) ("When a plaintiff alleges unjust enrichment, a court may construe
the cause of action as a quasi-contract claim seeking restitution.") (quoting Rutherford Holdings, LLC v.
Plaza Del Rey (2014) 223 Cal.App.4th 221, 231).
The Court find that a cause of action is adequately plead against the Moore Rd. LLCs and Paramont
Woodside, LLCs. The FAC alleges that per the Effective Operating Agreements and their oral contracts,
Plaintiffs invested money in the Moore Rd. LLC's and were entitled to and/or promised to receive
priority repayment of their principal, plus interest, upon sale of the Moore Rd. properties. Instead, as
alleged, Defendants, without Plaintiffs' consent, replaced the Effective Operating Agreements with new
ones, resulting in the demurring Defendants benefitting from Plaintiffs' contributions to the Moore Rd.
LLCs, while not returning any of Plaintiffs' principal or promised returns. (FAC, Par. 11-12, 55, 87-8, 110-
12). These allegations sufficiently support a claim for quasi-contract/restitution/unjust enrichment.
Because the FAC asserts no valid cause of action against the other demurring Defendants, their
Demurrer to this cause of action is SUSTAINED.
Punitive damages. The Demurrer argues the FAC does not adequately plead a request for punitive
damages. The punitive damages request may be challenged via motion to strike, not a demurrer, and
thus the Court disregards this argument for purposes of ruling on the Demurrer.
Others
Comments:
Future Hearings and Vacated Hearings
May 26, 2023 9:30 AM Request for Default
Vandeveld, Geraldine
Foiles, Robert D
Ortega, Alexandrina
Courtroom 2J
May 26, 2023 9:00 AM Motion to Strike
Vandeveld, Geraldine
Foiles, Robert D
Ortega, Alexandrina
Courtroom 2J
June 02, 2023 9:00 AM Motion to Set Aside Default/Judgment
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Case Number: 22-CIV-01148
DelRosario, Cindy
Foiles, Robert D
Ortega, Alexandrina
Courtroom 2J
June 14, 2023 4:00 PM Informal Discovery Conference
Mau, Michael L.
Courtroom H
June 26, 2023 9:00 AM Case Management Conference
Mau, Michael L.
Courtroom H
Pena, Ruben
July 17, 2023 9:00 AM Case Management and Trial Setting Conference
Foiles, Robert D
Courtroom 2J
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Preview
Case Number: 22-CIV-01148 SUPERIOR COURT OF SAN MATEO COUNTY 400 County Center 1050 Mission Road 800 North Humboldt Street Redwood City, CA 94063 South San Francisco, CA 94080 San Mateo, CA 94401 www.sanmateocourt.org Minute Order ARNTSEN FAMILY PARTNERSHIP, LP, et al vs. GREGORY J DAVIS, et al 22-CIV-01148 05/26/2023 9:00 AM Hearing on Demurrer Hearing Result: Held Judicial Officer: Foiles, Robert D Location: Courtroom 2J Courtroom Clerk: Alexandrina Ortega Courtroom Reporter: Geraldine Vandeveld Parties Present VIERRA, COLLIN J Attorney ZIMMERMAN, BRIAN Attorney Exhibits Minutes Journals Case Events - Matter is called at: 9:16 am - Party appeared by audio and/or video; Attorney: ZIMMERMAN, BRIAN - Tentative ruling modified* and becomes order: Defendants SVRV 385 Moore, LLC et. al.'s 3-22-23 Demurrer to Plaintiffs Robert Artnsen et. al.'s 8-22-22 First Amended Complaint (FAC), is SUSTAINED-IN-PART and OVERRULED-IN-PART, as set forth below. Page limits. Going forward, the parties are advised to strictly comply with stated page limits for all briefing. The CRC-imposed page limitations exist to insure brevity; they are not an invitation for parties/their counsel to gain additional pages by transferring large swaths of text into the footnotes. Footnotes should be used sparingly. Meet and confer. The 3-22-23 meet and confer declaration of attorney Chong does not comply with Code Civ. Proc. Sect. 430.41(a), because it does not state whether the attorneys actually spoke in-person or by phone and discussed the substance of the Demurrer, which Sect. 430.41 requires. A mere exchange of correspondence does not suffice. In its discretion, however, the Court has overlooked this defect and proceeded to analyze the Demurrer on the merits. Counsel is reminded to strictly comply with meet and confer requirements going forward. As to the First Cause of Action (alleging "Fraud / Intentional Misrepresentation / False Promise") (asserted by all Plaintiffs against the Moore Road LLCs), the Demurrer is OVERRULED. Only the two Moore Road LLC defendants have demurred to this claim; they argue it is not plead with sufficient particularity. This claim alleges fraud by (a) intentional misrepresentation; and/or (b) false promise. If the claim states a cause of action on either theory, the Demurrer must be overruled. 1 Case Number: 22-CIV-01148 Brousseau v. Jarrett (1977) 73 Cal.App.3d 864. The Moore Rd. LLCs' Demurrer argues that while the FAC may allege misrepresentations by Kludt and/or Bragg, it does not allege misrepresentations by the Moore Road LLCs. The Demurrer argues that although the FAC alleges that Defendant Bragg was/is the alter ego of the Moore Road LLCs, the alter ego allegations are too conclusory (unsupported by enough facts). The Court finds that this fraud claim is sufficiently plead against the two Moore Road LLCs. First, as noted, the FAC alleges misrepresentations and/or false promises by Defendant Bragg in his capacity as the two Moore Rd. LLC's Manager, and thus, as the LLCs' Manager (under an agency theory), his alleged fraud can be attributed to the LLCs. See, e.g., FAC, Par. 87-88 (alleging that the Moore Road LLCs, speaking through their Manager, Bragg, falsely represented in March 2019 that Plaintiffs would be repaid promptly with 12% interest if they provided $200,000 in short-term loans); id., Par. 110-112 (alleging that Bragg, again, speaking on behalf of the Moore Road LLCs, represented in March 2020 that Plaintiffs would be repaid with 12% interest if they extended additional loans to prevent the bank from foreclosing on the properties, and representing that their loans would have priority over all equity investments). Since these misrepresentations/false promises were allegedly made by the LLCs' Manager, for purposes of Demurrer, they are attributable to the Moore Road, LLCs under an agency theory. (FAC Par. 54, 120). Further, at the Demurrer stage, the FAC sufficiently alleges that Bragg and the Moore Road LLCs were/are alter egos. Defendants' argument that the alter ego allegations are entirely conclusory overlooks several relevant alter ego factual allegations. See FAC, Par. 22-26; 141-141 (alleging that Bragg moved funds indiscriminately (commingled assets) between the Moore Road LLCs and SVRV, which Bragg likewise operated as his alter ego; that Bragg commingled the Moore Road LLCs' funds with his own personal funds; that Bragg and Kludt "siphoned investor funds" from the Moore Rd. LLCs' bank accounts for their personal enrichment; that the Moore Road LLCs' expenses were not properly accounted for/tracked; and that the LLCs' corporate formalities were not followed). At the Demurrer stage, the Court finds the foregoing alter ego allegations sufficient, and disagrees that they are too conclusory. See Rutherford Holdings, LLC v. Plaza Del Rey (2014)223 Cal.App.4th 221 (rejecting, on demurrer, argument that alter ego had not been sufficiently plead; "[Plaintiff] was required to allege only "ultimate rather than evidentiary facts. Moreover ... less particularity is required where the defendant may be assumed to possess knowledge of the facts at least equal, if not superior, to that possessed by the plaintiff"); Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550 ("the complaint ordinarily is sufficient if it alleges ultimate rather than evidentiary facts"). As to the Third Cause of Action and the Fifth Cause of Action (alleging a violation of Bus. & Prof. Code Sect. 17200 violation against all Defendants), the Demurrer is OVERRULED as to the two Moore Rd. LLC Defendants and Defendant Paramont Woodside, LLC, and SUSTAINED as to the other demurring Defendants. The fraud and fiduciary duty claims can serve as a predicate basis for a Sect. 17200 claim. However, because no valid claim is asserted against the other demurring Defendants, the 17200 claim fails as to the other demurring Defendants. As to the Sixth Cause of Action (fraudulent by concealment) (by all Plaintiffs against the Moore Road LLCs) and the Seventh Cause of Action (alleging fraudulent by concealment against all Defendants), the Demurrer is OVERRULED as to the two Moore Rd. LLC defendants, but SUSTAINED with leave to amend as to the other demurring Defendants. The Demurrer argues that the claim is not properly plead because (a) there can be no "concealment" absent a duty to disclose, and Defendants contend there are no alleged facts establishing a duty to 2 Case Number: 22-CIV-01148 disclose; and (b) as to the entity Defendants, the FAC does not specifically allege concealment by any entity. The Court notes that, oddly, the Demurrer refers to "misrepresentations" and argues that the FAC does not allege any "false representation." This argument is misplaced, because this cause of action alleges fraud by concealment-not fraud by misrepresentation. "[T]he elements of an action for fraud-concealment are: (1) defendant concealed or suppressed a material fact, (2) defendant was under a duty to disclose the fact to the plaintiff, (3) defendant intentionally concealed or suppressed the fact with the intent to defraud plaintiff, (4) plaintiff was unaware of the fact and would not have acted as he/she did if he//she had known of the concealed or suppressed fact, and (5) resulting damage to plaintiff. Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248; CACI 1901. As noted, the pleading must allege facts establishing that defendant was in a relationship with plaintiff that triggered a duty to disclose. Hahn v. Mirda (2007) 147 Cal.App.4th 740, 745; CACI 1901's "Directions for Use" state in part: Regarding element 1, before there can be liability for concealment, there must usually be a duty to disclose arising from a fiduciary or confidential relationship between the parties. However, in transactions that do not involve fiduciary or confidential relations, a duty to disclose material facts may arise in at least three instances: (1) the defendant makes representations but does not disclose facts that materially qualify the facts disclosed, or that render his disclosure likely to mislead (option 2); (2) the facts are known or accessible only to defendant, and defendant knows they are not known to or reasonably discoverable by the plaintiff (option 3); (3) the defendant actively conceals discovery from the plaintiff (option 4). (See Warner Constr. Corp. v. L.A. (1970) 2 Cal.3d 285, 294.) For the second, third, and fourth options, if the defendant asserts that there was no relationship based on a transaction giving rise to a duty to disclose, the jury should also be instructed to determine whether the requisite relationship existed. Thus, a fiduciary relationship is not required to plead a claim for fraud by concealment. As to the two Moore Rd. LLC defendants, the Demurrer is OVERRULED. The Sixth Cause of Action alleges that at the time Plaintiffs were making investments in/loans to the Moore Rd. project, the Moore Rd. LLCs, acting through their Managers (Bragg and Paramont Woodside, LLC), concealed/failed to disclose to Plaintiffs several facts, including-that Kludt, Bragg, SVRV, and the Moore Road LLCs had, in fact, not used Plaintiffs' loans and investments to make the contributions required under the "Unapproved Operating Agreements," (Par. 215); and that when Kludt, Bragg, SVRV, and the Moore Road LLCs solicited additional funds from Plaintiffs in 2019, Defendants were already in breach of the Unapproved Operating Agreements, and were intending to and did use Plaintiffs' funds for Defendants' own personal ends. (Id.) Arguably, these allegations sufficiently allege a concealment claim against the Moore Rd. LLCs. As to the other demurring Defendants, the Demurrer is SUSTAINED with leave to amend due to insufficient allegations of intent-i.e., the FAC does no clearly allege that any of the other demurring Defendants knew about/were aware of Plaintiffs' alleged loans to / investments in the Moore Rd. project(s). The FAC generally alleges that at the time Plaintiffs were making investments in/loans to the Moore Rd. project(s), the demurring Defendants, each of which/who was intimately involved in Paramont Woodside, LLC, concealed/failed to disclose to Plaintiffs important information that, had Plaintiffs known of such information, Plaintiffs would not have invested in or loaned additional money to the Moore Rd. projects. Specifically, the FAC alleges that the demurring Defendants concealed/failed to disclose the following: The existence of the Unapproved Operating Agreements (and amendments thereto (see Par. 6, alleging Kludt and Bragg conspired with Defendants Davis, Justesen, and several other individuals at Paramont Capital, LLC to unlawfully amend the operating agreements to benefits themselves/the Paramont entities, which harmed Plaintiffs); Par. 7 (alleging the Unapproved Operating Agreements were kept 3 Case Number: 22-CIV-01148 hidden from Plaintiffs for seven months); Par. 223 (same); The fact that in May 2020, Paramont Woodside, LLC, while managed by Defendant Davis, assumed management of the Moore Road LLCs (see Par. 12, 25 78-80, 149, and that Defendants Davis and Wolfe forced Bragg to agree to amend the Unapproved Operating Agreements to further benefit the Paramont entities); The Moore Rd. projects' precarious financial state long before the properties sold (Par. 70, 72); Various management decisions that hurt minority investors like Plaintiffs, but benefitted management and insiders (Par. 12, 112, 118, 124- 8); Expected losses on the Moore Rd Project, which Defendants allegedly concealed in order to prevent Plaintiffs from withdrawing their investments (Par. 224). Concealment, however, requires intent, and the FAC does not clearly allege that the demurring Defendants were ever aware of Plaintiffs' alleged loans/investments in the Moore Rd. project(s). The demurring Defendants claim to have been strangers to Plaintiffs. The FAC appears to allege only that Plaintiffs interacted with Bragg, Kludt, and SVRV. It is not apparent, from the FAC's allegations, that any of the Plaintiffs ever interacted with the other demurring Defendants, or that the other demurring Defendants had any knowledge that Plaintiffs had given money to Bragg that was intended for/earmarked for the Moore Rd. project(s), or that Plaintiffs claimed to have invested in the Moore Rd. project/properties. Absent allegations that the demurring parties were aware of Plaintiffs' alleged loans to/investments in the Moore Rd. project(s)/LLCs, the FAC fails to plead the requisite intent on demurring Defendants' part to support a fraud-concealment claim. As to the Eighth Cause of Action (breach of fiduciary duty) (asserted by all Plaintiffs against all Defendants), the Demurrer is OVERRULED as to Defendant Paramont Woodside, LLC, but SUSTAINED with leave to amend as to the remaining demurring Defendants. An LLC manager owes fiduciary duties to the LLC's members. Corp. Code Sect. 17704.09 (an LLC member in a member-managed LLC, and an LLC manager in a manager-managed LLC, owes fiduciary duties of care and loyalty to the LLC and all its members in regard to LLC operations. These duties include prohibitions against self-dealing and conflicts of interests. LLC managers and members must discharge their duties consistently with the obligations of good faith and fair dealing.) No fraudulent intent is required. Civ. Code Sect. 1573. As to Defendant Paramont Woodside, LLC, the Demurrer is OVERRULED. The FAC alleges that "Paramont Woodside-acting as both Manager and Majority Shareholder"-acted to benefit "its own interests to the detriment of smaller investors in the Moore Road LLCs, including Plaintiffs," by misappropriating hundreds of thousands of dollars that belonged to Plaintiffs. (FAC Par. 6, 12, 30, 125-6, 137.) This claim essentially alleges that Paramont Woodside, LLC, as Manager of the Moore Rd. LLCs, engaged in self-dealing, thereby harming the alleged LLC members (Plaintiffs). This appears to be a close call, considering the lack of clear allegations that Paramont Woodside, LLC (and its principals) was/were aware of Plaintiffs' interest/membership in the Moore Rd. LLCs. However, for purposes of Demurrer, the Court finds that the breach of fiduciary duty claim is sufficiently stated against Paramont Woodside, LLC. As to the two Moore Rd. LLC Defendants, the Demurrer is SUSTAINED with leave to amend. Plaintiffs cite no authority holding that an LLC, as an entity, owes fiduciary duties to its members. Plaintiff's Opposition brief does even appear to argue that an LLC owes fiduciary duties to its members. As to the remaining demurring Defendants, the Demurrer is SUSTAINED with leave to amend. The FAC does not appear to allege that any of the remaining demurring Defendants was either (a) a Manager of 4 Case Number: 22-CIV-01148 the Moore Rd. LLCs; or (b) a managing member of the Moore Rd. LLCs. Thus, the FAC does not appear to allege any basis for asserting a breach of fiduciary duty claim against the other defendants. The FAC alleges that Defendant Davis was "the effective Manager of SVRV 385 Moore, LLC and SVRV 387 Moore, LLC" ... [t]hrough [Davis'] operation of Paramont Woodside, Paramont Capital, SVRV 385 Moore, LLC, and SVRV 387 Moore, LLC, Davis harmed Plaintiffs." (Par. 12). But Plaintiffs cite no authority that an "effective" manager (although not the actual Manager) of an LLC owes fiduciary duties to the LLC's members. The FAC alleges that Defendant Paramont Capital, LLC is a lending company that provides short-term capital to land developers. It alleges Paramont Capital incorporated and capitalized Paramont Woodside for the purpose of investing in the properties located at 385 Moore Road, Woodside, Ca. and 387 Moore Road, Woodside, Ca. The FAC further alleges that Defendants Davis, Wolfe, and Justesen were/are officers of Paramont Capital, and that Paramont Capital received a $76,224 management fee when the Moore Rd. properties sold. (Par. 29). Plaintiffs do not explain, however, how the foregoing allegations create a fiduciary relationship between Paramont Capital, LLC and Plaintiffs. The FAC alleges that Defendant Wolfe was the CFO of both Paramont Woodside and Paramont Capital, and that he was the primary individual in charge of the finances for SVRV 385 Moore, LLC and SVRV 387 Moore, LLC. It alleges that through Wolfe's operation of Paramont Woodside, Paramont Capital, and the Moore Rd. LLCs, Wolfe harmed Plaintiffs by acts of self-dealing. (Par. 12, 28) The FAC does not allege, however, that Wolfe ever served as the Moore Rd. LLCs' Manager. Thus, the allegations do not appear to establish a fiduciary relationship between Wolfe and Plaintiffs. The FAC alleges that Defendant Justesen is/was the Vice President of Paramont Capital, LLC, and was involved with due diligence and negotiations with Bragg and SVRV for Paramont Woodside's investments in SVRV 385 Moore, LLC and SVRV 387 Moore, LLC. (Par 29). Plaintiffs do not explain how these alleged facts establish a fiduciary relationship between Justesen and Plaintiffs. As to the Ninth Cause of Action (breach of contract) (asserted by all Plaintiffs against all Defendants), the Demurrer is OVERRULED as to Paramont Woodside, LLC, but SUSTAINED with leave to amend as to all demurring Defendants. An LLC operating agreement is a contract amongst LLC members that governs the members' rights and obligations. Corp. Code Sect. 17001(ab) ("Operating agreement means any agreement, written or oral, between all of the members as to the affairs of a limited liability company and the conduct of its business ..."). The FAC alleges that in 2018, "Plaintiffs agreed with Kludt, Bragg, and SVRV to the terms of the Effective Operating Agreements," and that "pursuant the agreement of those parties, the Effective Operating Agreements became effective when Kludt, Bragg, and SVRV incorporated the Moore Road LLCs in June 2018." (Par. 239). It alleges that "[p]laintiffs were thus members of the Moore Road LLCs and had all the contractual rights enumerated in the Effective Operating Agreements." (Id.) Plaintiffs allege that the Effective Operating Agreements required unanimous written consent to be amended. (Par. 83.) They allege that the demurring Defendants, who were "required to abide by the terms of the Effective Operating Agreements, which governed the operations of the Moore Road LLCs ... breached the terms of the Effective Operating Agreements by purporting to amend them and replace them with the Unapproved Operating Agreements without Plaintiffs' knowledge or consent." (Par. 78-83, 241). "Defendants also breached the terms of the Effective Operating Agreements by paying themselves unauthorized management fees and other returns (Par. 12; 137; 242) ... and by paying themselves substantial sums upon the sale of the Moore Road properties, including both principal and profits, but not returning any money to Plaintiffs ..." (Par. 243). 5 Case Number: 22-CIV-01148 The Court concludes that the foregoing allegations sufficiently allege a breach of contract (breach of operating agreement) against the members of the Moore Rd., LLCs. The FAC alleges Paramont Woodside, LLC was a member of the Moore Rd., LLC, but does not allege that the other demurring Defendants were members. If the other demurring Defendants were not members of the LLC, Plaintiffs to do appear to allege a contractual relationship with them. As to the Eleventh Cause of Action (breach of oral contract) (all Plaintiffs against the Moore Road LLCs), the Demurrer is OVERRULED. This claim alleges that Plaintiffs formed oral contracts with Kludt, Bragg, SVRV, and the Moore Road LLCs in which Plaintiffs agreed to invest money in exchange for a promise that upon sale of the Moore Road properties, Plaintiffs would share in the profits of the Moore Road Project. (Par. 256). It alleges the Moore Rd. LLC defendants "breached the terms of these oral contracts by refusing to return principal, profits, and interest to Plaintiffs." (Par. 257); see also Par. 5 (alleging that in 2017, Bragg asked Plaintiff to invest in the "Moore Rd. project," which would consist of buying and developing two properties that would be held by two separate LLCs; Plaintiffs would be members of the LLCs; in Feb. 2018, Kludt showed Plaintiffs operating agreements for the two proposed LLCs, which stated that Plaintiffs were members and would be first in line to receive profits; once the two LLCs were formed in June 2019, the parties (including Plaintiffs and Bragg, who was the LLC's Manager) agreed that the terms of those operating agreements applied; Plaintiffs invested hundreds of thousands of dollars in the Moore Rd. project; Bragg was initially the sole Manager of the two LLCs; both operating agreements provided that the operating agreements could not be amended without written consent of all members). The Demurrer argues (a) the FAC does not allege a "meeting of the minds" between Plaintiffs and the Moore Rd. LLCs, and (b) any oral agreement is barred by the statute of frauds. (Civ. Code Sect. 1624(a).) None of the parties appears to address the question of whether an LLC is, or can be, a party to its own operating agreement. But Code Corp. Code Sect. 17701.11(a) provides that an LLC is "bound by" its operating agreement. The Court finds that the FAC sufficiently alleges an oral contract between Plaintiffs and the two Moore Rd. LLCs. See, e.g., Par. 8, 87, 120 (alleging that on March 19, 2019, defendant Bragg, acting as the Moore Road LLCs' Manager, solicited from Plaintiffs $200,000 in loans for the Moore Road LLCs for the promise of a 12% return); Par. 110-112 (Plaintiffs made additional loans to the LLCs on April 1, 2020 after Bragg, acting at the LLCs' Manager, promised Plaintiffs 12% interest). For purposes of Demurrer, the Moore Rd. LLCs have not established that the statute of frauds applies. (Civ. Code Sect. 1624(a)). The Demurrer cites to portions of Civ. Code Sect. 1624(a) pertaining to (a) a promise to answer for the debt of another, and (b) an agreement by someone in the business of loaning money to loan more than $100,000. (Sect. 1624(a)(7)). Based on the allegations, however, it is not clear that the statute of frauds applies. The allegations in Par. 18-21 do not appear to establish that Plaintiffs were "in the business of loaning money." Nor does the FAC appear to allege that the subject loans were in excess of $100,000. (Par. 88, 111.) Nor is it apparent from the allegations that the alleged oral agreement involves "a promise to answer for the debt of another." And it does it not appear from the allegations that Plaintiffs seek to hold the Moore Road LLCs liable as "guarantors." As to the Twelfth Cause of Action ("Quasi-Contract / Restitution / Unjust Enrichment") (asserted by all Plaintiffs against all Defendants), the Demurrer is OVERRULED as against the Moore Rd LLCs and Paramont Woodside, LLC, but SUSTAINED with leave* as to the other demurring Defendants. If this claim asserts a valid cause of action under any of the identified theories (quasi- contract/restitution/unjust enrichment), the Demurrer must be overruled. Brousseau v. Jarrett (1977) 73 Cal.App.3d 864. 6 Case Number: 22-CIV-01148 "Unjust enrichment is synonymous with restitution. Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1370. A person is required to make restitution if the failure to do so would result in unjust enrichment. First Nationwide Savings v. Perry (1992) 11 Cal.App.4th 1657, 1662-1663.) Restitution of the benefits conferred under a contract may be awarded if the contract is rescinded or determined to be unenforceable. Durell, supra, at 1370; Prakashpalan (2014) 223 Cal.App.4th 1105, 1132 (The elements for a claim of unjust enrichment are "receipt of a benefit and unjust retention of the benefit at the expense of another. The theory of unjust enrichment requires one who acquires a benefit which may not justly be retained, to return either the thing or its equivalent to the aggrieved party so as not to be unjustly enriched.") California decisions have differed on whether "unjust enrichment" constitutes a stand-alone cause of action. Compare Prakashpalan (2014) 223 Cal.App.4th 1105, 1132 (allowing unjust enrichment claim) with Durell v. Sharp Healthcare, 183 Cal.App.4th 1350, 1370, (2010) (disallowing the claim). But courts that have found that unjust enrichment is not itself a cause of action have construed the common law to allow an unjust enrichment cause of action through quasi-contract. See Astiana v. Hain Celestial Grp., Inc., 783 F.3d 753, 762 (9th Cir.2015) ("When a plaintiff alleges unjust enrichment, a court may construe the cause of action as a quasi-contract claim seeking restitution.") (quoting Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 231). The Court find that a cause of action is adequately plead against the Moore Rd. LLCs and Paramont Woodside, LLCs. The FAC alleges that per the Effective Operating Agreements and their oral contracts, Plaintiffs invested money in the Moore Rd. LLC's and were entitled to and/or promised to receive priority repayment of their principal, plus interest, upon sale of the Moore Rd. properties. Instead, as alleged, Defendants, without Plaintiffs' consent, replaced the Effective Operating Agreements with new ones, resulting in the demurring Defendants benefitting from Plaintiffs' contributions to the Moore Rd. LLCs, while not returning any of Plaintiffs' principal or promised returns. (FAC, Par. 11-12, 55, 87-8, 110- 12). These allegations sufficiently support a claim for quasi-contract/restitution/unjust enrichment. Because the FAC asserts no valid cause of action against the other demurring Defendants, their Demurrer to this cause of action is SUSTAINED. Punitive damages. The Demurrer argues the FAC does not adequately plead a request for punitive damages. The punitive damages request may be challenged via motion to strike, not a demurrer, and thus the Court disregards this argument for purposes of ruling on the Demurrer. Others Comments: Future Hearings and Vacated Hearings May 26, 2023 9:30 AM Request for Default Vandeveld, Geraldine Foiles, Robert D Ortega, Alexandrina Courtroom 2J May 26, 2023 9:00 AM Motion to Strike Vandeveld, Geraldine Foiles, Robert D Ortega, Alexandrina Courtroom 2J June 02, 2023 9:00 AM Motion to Set Aside Default/Judgment 7 Case Number: 22-CIV-01148 DelRosario, Cindy Foiles, Robert D Ortega, Alexandrina Courtroom 2J June 14, 2023 4:00 PM Informal Discovery Conference Mau, Michael L. Courtroom H June 26, 2023 9:00 AM Case Management Conference Mau, Michael L. Courtroom H Pena, Ruben July 17, 2023 9:00 AM Case Management and Trial Setting Conference Foiles, Robert D Courtroom 2J 8