Document for ARNTSEN FAMILY PARTNERSHIP, LP, et al vs. GREGORY J DAVIS, et al

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                                1   Collin J. Vierra (State Bar No. 322720)
     EIMER STAHL LLP
 2   99 Almaden Blvd., Suite 600
     San Jose, CA 95113-1605
 3   Telephone: (408) 889-1668
 4   Email: cvierra@eimerstahl.com

 5   Attorney for Plaintiffs

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 7                     SUPERIOR COURT OF THE STATE OF CALIFORNIA
                                      COUNTY OF SAN MATEO
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      Robert Arntsen; Mary Lee; Arntsen Family        Case No. 22-CIV-01148
10    Partnership, LP; Brian Christopher Dunn         Consolidated with Case No. 23-CIV-01099
      Custodianship, John Ho, and Quanyu Huang;
11                                                    Date: March 11, 2024
12                   Plaintiffs,                      Time: 2:00 p.m.
      v.                                              Dept. 24
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      David M. Bragg; Silicon Valley Real Ventures    Date Action Filed: March 15, 2022
14    LLC; SVRV 385 Moore, LLC; SVRV 387
      Moore, LLC; Gregory J. Davis; Kevin Wolfe;      Hon. Jeffrey Finigan
15    Jason Justesen; Paramont Woodside, LLC;
16    Paramont Capital, LLC; Monks Family Trust;      PLAINTIFFS’ MOTION IN LIMINE
      TEH Capital LLC; Caproc III, LLC; WZ            NO. 7 TO EXCLUDE ALL EVIDENCE,
17    Partners, LLC; McClan Trust; Wild Rose          TESTIMONY, AND ARGUMENT AS TO
      Irrevocable Trust; Black Horse Holdings,        WHETHER ANY PLAINTIFF WAS AN
18    LLC; Phil Stoker; Diane Stoker; Scott O’Neil;   ACCREDITED INVESTOR;
      Dale Huish; and DOES 1–20,                      MEMORANDUM OF POINTS AND
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                                                      AUTHORITIES
20                   Defendants.

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                                   PLAINTIFFS’ MOTION IN LIMINE NO. 7
 1          TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:

 2          Please take notice that on March 11, 2024, at 9:00 a.m., in Department 24 of the Superior

 3   Court of California, County of San Mateo, located at 400 County Center, Redwood City,

 4   California, Plaintiffs will move in limine for an order preventing Defendants, their counsel, and all

 5   witnesses from introducing any evidence, testimony, or argument that any Plaintiff was an

 6   accredited investor. This motion is brought pursuant to Evidence Code sections 350 and 352 on

 7   the ground that this information is irrelevant to Plaintiffs’ claims and Defendants’ defenses and

 8   any reference to it will create a substantial danger of undue prejudice and confusion of the issues.

 9   This motion is based on this notice of motion, the memorandum of points and authorities filed

10   herewith, and any arguments or evidence that may be presented at the time of hearing.

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                                    PLAINTIFFS’ MOTION IN LIMINE NO. 7
 1                       MEMORANDUM OF POINTS AND AUTHORITIES

 2      I. Legal Standard
 3          Evidence Code section 350 states that “[n]o evidence is admissible except relevant

 4   evidence.” Relevant evidence is that which has a “tendency in reason to prove or disprove any

 5   disputed fact that is of consequence to the determination of the action.” (Evid. Code § 210; People

 6   v. Kelly (1992) 1 Cal.4th 495, 523.)

 7          Evidence Code section 352 further permits the Court in its discretion to “exclude evidence

 8   if its probative value is substantially outweighed by the probability that its admission will (a)

 9   necessitate undue consumption of time or (b) create substantial danger of undue prejudice, of

10   confusing the issues, or of misleading the jury.” (See also People v. Cardenas (1982) 31 Cal.3d

11   897, 904.)

12          This Court also has inherent power to grant a motion in limine to exclude “any kind of

13   evidence which could be objected to at trial, either as irrelevant or subject to discretionary

14   exclusion as unduly prejudicial.” (Clemens v. Am. Warranty Corp. (1987) 193 Cal.App.3d 444,

15   451; Peat, Marwick, Mitchell & Co. v. Super. Ct. (1998) 200 Cal.App.3d 272, 288.)

16          II.     Relevant Background
17          Certain Plaintiffs signed and/or orally agreed to certain documents that are relevant to this

18   action that stated that Plaintiffs were “accredited investors,” and Defendants have inquired about

19   this in written and oral discovery. A person may become an “accredited investor” based on certain

20   characteristics such as net worth or income, and persons and entities can sell certain unregistered

21   securities only to “accreditor investors”. (SEC, Accredited Investors, http://tinyurl.com/2aslj9j6;

22   JD Supra, Accredited Investor Status in Federal Securities Law, http://tinyurl.com/29z5rhjh; 17

23   C.F.R. § 230.504; 17 C.F.R. § 230.506(b); 17 C.F.R. § 230.506(c).) That is, although accredited

24   investors do not have any special duties themselves, the seller of an unregistered security can face

25   legal liability if he sells an unregistered security to someone who is not accredited. (Id.) Here,

26   although the securities Bragg sold to Plaintiffs—membership interests in the Moore Road LLCs—

27   were unregistered, Plaintiffs have not asserted securities claims or alleged that Defendants

28   unlawfully sold them unregistered securities.


                                   PLAINTIFFS’ MOTION IN LIMINE NO. 7
               III.   Reasons Why Evidence or Argument as to Whether Plaintiffs Were
 1                    Accredited Investors Should Be Excluded
 2             First, whether or not any Plaintiff was an accredited investor has no relevance to this action,

 3   which concerns whether Defendants committed acts of fraud, breach of contract, breach of

 4   fiduciary duty, and civil theft in connection with certain real estate investments. Plaintiffs are not

 5   asserting any breaches of the securities laws. Nor have they alleged that were unlawfully sold

 6   unregistered securities. It is thus irrelevant whether any Plaintiff was an accreditor investor, and

 7   evidence as to whether any Plaintiff was an accredited investor has no “tendency in reason to prove

 8   or disprove any disputed fact that is of consequence to the determination of the action.” (Civ. Code

 9   § 350.)

10             Second, such evidence should independently be excluded because its probative value is

11   substantially outweighed by the probability that its admission will confuse or mislead the jury.

12   (Evid. Code § 352.) Because “accredited investor” is not common term, the jury may believe it

13   carries some special import that it does not, for example, that Plaintiffs are not authorized to obtain

14   relief from investments they made that caused them damage through fraud, breach, and/or theft. It

15   might also confuse the jury as to Plaintiffs’ status as passive investors in the Moore Road LLCs.

16             Third, such evidence may confuse the jury, particularly if Defendants articulate that one

17   may become an accredited investor through having a certain net worth or income. Plaintiffs’

18   financial condition is irrelevant to this case, and Defendants should not be permitted to bring it

19   into evidence through the back door of irrelevant questions about whether any Plaintiff is an

20   accredited investor.

21                                               CONCLUSION

22             Based on the foregoing, Plaintiffs respectfully request the Court to exclude any evidence

23   or argument as to whether any Plaintiff was an accredited investor.

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     Dated: _February 20, 2024_                               By: ______________________
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                                                                   Collin J. Vierra
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28                                                                 Attorney for Plaintiffs


                                      PLAINTIFFS’ MOTION IN LIMINE NO. 7