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  • SALLY S. JOHNSON  vs.  KAREN
  • SALLY S. JOHNSON  vs.  KAREN
  • SALLY S. JOHNSON  vs.  KAREN
  • SALLY S. JOHNSON  vs.  KAREN
  • SALLY S. JOHNSON  vs.  KAREN
  • SALLY S. JOHNSON  vs.  KAREN
  • SALLY S. JOHNSON  vs.  KAREN
  • SALLY S. JOHNSON  vs.  KAREN
						
                                

Preview

1 SHARTSIS FRIESE LLP FRANK A. CIALONE (Bar #172816) 2 W. BROOKES S. DEGEN (Bar #328792) 425 Market Street, Eleventh Floor 3 San Francisco, CA 94105-2496 Telephone: (415) 421-6500 4 Facsimile: (415) 421-2922 Email: fcialone@sflaw.com 5 Email: bdegen@sflaw.com 6 Attorneys for Defendant KAREN “ANNIE” SAMMUT 7 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 COUNTY OF SAN MATEO 10 SALLY S. JOHNSON, individually and Case No. 22-CIV-02871 derivatively on behalf of Artichoke Joe’s, 11 ANSWER TO SECOND AMENDED Plaintiff, COMPLAINT 12 SAN FRANCISCO, CA 94105-2496 v. SHARTSIS FRIESE LLP 13 425 MARKET STREET ELEVENTH FLOOR KAREN “ANNIE” SAMMUT; CODY 14 SAMMUT; ARTICHOKE JOE’S; and DOES 1-50, inclusive, Complaint Filed: 7/14/2022 15 Defendants, 16 and 17 ARTICHOKE JOE’S, 18 Nominal Defendant. 19 20 21 22 23 24 25 26 27 28 Case No. ANSWER TO SECOND AMENDED COMPLAINT 22-CIV-02871 1 Defendant Karen “Annie” Sammut (“Annie” or “Defendant”), by and through her 2 undersigned counsel, hereby responds to the Second Amended Complaint (“SAC”) of Plaintiff 3 Sally S. Johnson (“Sally” or “Plaintiff”) as follows. 4 GENERAL DENIAL 5 Pursuant to the provision of California Code of Civil Procedure section 431.30(d), Annie 6 denies generally and specifically each and every allegation contained in Sally’s SAC. Annie asserts 7 the following affirmative defenses. 8 AFFIRMATIVE DEFENSES 9 As affirmative defenses to the SAC, and to each purported cause of action therein, Annie 10 alleges as follows: 11 FIRST AFFIRMATIVE DEFENSE 12 (FAILURE TO STATE A CLAIM) SAN FRANCISCO, CA 94105-2496 SHARTSIS FRIESE LLP 13 The SAC fails to state facts sufficient to constitute a cause of action against Defendant. 425 MARKET STREET ELEVENTH FLOOR 14 SECOND AFFIRMATIVE DEFENSE 15 (LACHES) 16 Plaintiff’s claims in her SAC, in whole or in part, are barred by the doctrine of laches. 17 Plaintiff waited an unreasonable period of time, such as until after Dennis Sammut’s death, before 18 asserting her claims against Defendant, therefore any claims are barred. Some or all of Sally’s 19 claims were actionable before Dennis Sammut’s death and should have been brought earlier. 20 THIRD AFFIRMATIVE DEFENSE 21 (STATUTE OF LIMITAITONS) 22 Plaintiff’s claims in her SAC, in whole or in part, are barred on the grounds that the statute 23 of limitations in Code of Civil Procedure sections 338(a, c, or d), 343, or 359 have run. 24 FOURTH AFFIRMATIVE DEFENSE 25 (FAILURE TO MITIGATE) 26 Plaintiff’s claims in her SAC, in whole or in part, are barred and Plaintiff is precluded from 27 recovering because Plaintiff failed to mitigate her damages, if any. For instance, Plaintiff had the 28 opportunity to intervene or object to the acts and/or omissions which now form the basis of her -1- Case No. ANSWER TO SECOND AMENDED COMPLAINT 22-CIV-02871 1 SAC at a much earlier point, but she failed to do so. 2 FIFTH AFFIRMATIVE DEFENSE 3 (ESTOPPEL) 4 By virtue of her own conduct and statements, Plaintiff is estopped, in whole or in part, from 5 bringing her claims. For instance, Defendant substantially and detrimentally relied on Plaintiff’s 6 approval and consent to the actions she now complains through Plaintiff’s approval of Board of 7 Directors resolutions, among other things. 8 SIXTH AFFIRMATIVE DEFENSE 9 (PROMISSORY ESTOPPEL) 10 Plaintiff’s claims in her SAC, in whole or in part, are barred because of promissory estoppel. 11 Plaintiff caused Defendant to detrimentally rely on her actions which, as a result, led to the acts and 12 omissions which purport to form the basis of Plaintiff’s SAC. For instance, Plaintiff agreed to Board SAN FRANCISCO, CA 94105-2496 SHARTSIS FRIESE LLP 13 of Director resolutions pertaining to Dennis Sammut’s compensation about which she now 425 MARKET STREET ELEVENTH FLOOR 14 complains. 15 SEVENTH AFFIRMATIVE DEFENSE 16 (WAIVER) 17 Plaintiff’s claims in her SAC, in whole or in part, are barred because Plaintiff waived, 18 released, or otherwise agreed to release and waive their rights to some or all her claims in the SAC. 19 For instance, Plaintiff agreed to Board of Director resolutions pertaining to Dennis Sammut’s 20 compensation about which she now complains. 21 EIGHTH AFFIRMATIVE DEFENSE 22 (UNCLEAN HANDS) 23 Plaintiff’s claims and request for equitable relief are barred by the doctrine of unclean 24 hands. By virtue of Plaintiff’s own careless, negligent, or wrongful conduct, Plaintiff now 25 complains of acts and/or omissions purportedly done by Defendant which she failed to object to 26 when Plaintiff had the opportunity to do so. 27 /// 28 /// -2- Case No. ANSWER TO SECOND AMENDED COMPLAINT 22-CIV-02871 1 NINTH AFFIRMATIVE DEFENSE 2 (BUSINESS JUDGMENT RULE) 3 Defendant’s actions are protected, and Plaintiff’s claims are barred, in whole or in part, by 4 the business judgment rule. 5 TENTH AFFIRMATIVE DEFENSE 6 (NO CAUSATION) 7 To the extent that Plaintiff alleges any damages in her SAC, such damages were not 8 proximately caused by the actions of Defendant. Indeed, to the extent that Plaintiff did suffer any 9 damages, they were proximately caused by her own actions and/or omissions, or the actions and/or 10 omissions of a third-party for which Defendant is not responsible. For instance, the acts and/or 11 omissions which form the basis of Plaintiff’s Complaint were a result of her own votes at Board of 12 Directors meetings. SAN FRANCISCO, CA 94105-2496 SHARTSIS FRIESE LLP 13 ELEVENTH AFFIRMATIVE DEFENSE 425 MARKET STREET ELEVENTH FLOOR 14 (INHERENT FAIRNESS) 15 Plaintiff’s claims in her SAC, in whole or in part, are barred because Defendant’s alleged 16 conduct was inherently fair to Plaintiff in process and substance. Plaintiff had every opportunity to 17 object to the acts and omissions which purport to form the basis of her SAC, such as voting against 18 prior Board of Directors resolutions, but chose not to do so. 19 TWELTH AFFIRMATIVE DEFENSE 20 (UNJUST ENRICHMENT) 21 Plaintiff’s claims in her SAC, in whole or in part, are barred by the doctrine of unjust 22 enrichment. Plaintiff cannot simultaneously benefit and claim wrongdoing from the acts and/or 23 omissions that now form the basis of her SAC, such as Dennis Sammut paying out of pocket for 24 fees paid to governmental entities as a result of investigations and stipulations. 25 THIRTEENTH AFFIRMATIVE DEFENSE 26 (CONSENT) 27 Plaintiff’s claims in her SAC, in whole or in part, are barred on the ground that Plaintiff 28 consented to the alleged acts and omissions that purport to give rise to the SAC. Plaintiff attended -3- Case No. ANSWER TO SECOND AMENDED COMPLAINT 22-CIV-02871 1 Board of Directors meetings and consented to Board of Directors resolutions which now 2 purportedly give rise to her SAC. 3 FOURTEENTH AFFIRMATIVE DEFENSE 4 (RATIFICATION) 5 Plaintiff’s claims in her SAC, in whole or in part, are barred on the ground that Plaintiff 6 ratified Defendant’s alleged acts and omissions. For example, she ratified prior Board of Directors 7 resolutions which she now purports give rise to her SAC. 8 FIFTEENTH AFFIRMATIVE DEFENSE 9 (ACQUIESENCE) 10 Plaintiff acquiesced in the deferred compensation agreement for Dennis Sammut made in 11 December 2019 by taking a bonus as part of the resolution approving that agreement, and for nearly 12 two years thereafter Plaintiff attending Artichoke Joe’s Board meetings in 2020 and 2021 and acting SAN FRANCISCO, CA 94105-2496 SHARTSIS FRIESE LLP 13 and speaking consistent with acceptance of that resolution. Those action are inconsistent with her 425 MARKET STREET ELEVENTH FLOOR 14 later efforts to cause Artichoke Joe’s to rescind the deferred compensation agreement. Plaintiff’s 15 explicit or implicit consent bars her claims now. 16 SIXTEENTH AFFIRMATIVE DEFENSE 17 (VALIDITY OF DECEMBER 2019 RESOLUTION) 18 In December 2019, all of the directors and shareholders of Artichoke Joe’s, including 19 Plaintiff, approved a just and reasonable resolution to award deferred compensation to Dennis 20 Sammut by a resolution in which Plaintiff was an interested director and shareholder. That 21 resolution was a valid and binding decision. 22 The SAC does not state the allegations with sufficient clarity to enable Defendant to 23 determine what additional defenses may exist to Plaintiff’s causes of actions. Defendant therefore 24 reserves the right to assert all other defenses which may pertain to the SAC. Defendant will seek 25 leave of Court to amend her Answer should she later discover facts demonstrating the existence of 26 additional affirmative defenses. 27 /// 28 /// -4- Case No. ANSWER TO SECOND AMENDED COMPLAINT 22-CIV-02871 1 PRAYER 2 Defendant prays as follows: 3 1. That Plaintiff take nothing by way of her SAC; 4 2. For attorneys’ fees; 5 3. That Defendant be awarded her costs of suit; and 6 4. For such further and additional relief as the Court deems just and proper. 7 8 Dated: April 24, 2024 SHARTSIS FRIESE LLP 9 10 By: FRANK A. CIALONE 11 Attorneys for Defendant KAREN “ANNIE” SAMMUT 12 SAN FRANCISCO, CA 94105-2496 SHARTSIS FRIESE LLP 13 425 MARKET STREET ELEVENTH FLOOR 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -5- Case No. ANSWER TO SECOND AMENDED COMPLAINT 22-CIV-02871 1 PROOF OF SERVICE 2 I, Elaine Luz, declare: 3 I am a citizen of the United States and employed in the City and County of San Francisco, California by Shartsis Friese LLP at 425 Market Street, Eleventh Floor, San Francisco, California 4 94105-2496. I am over the age of eighteen years and am not a party to the within-entitled action. 5 On April 24, 2024 at Shartsis Friese LLP located at the above-referenced address, and, pursuant to California Rules of Court, Federal Rules of Civil Procedure, Civil Code of Procedure, 6 and local rules, I served on the interested parties in said cause a copy of the within document(s): 7 ANSWER TO SECOND AMENDED COMPLAINT 8 by electronically delivering the document(s) listed above on this date from  electronic address sflaw.com, and after which transmission I did not receive within 9 a reasonable time any electronic message or other indication that the transmission 10 was unsuccessful, to electronic mail address(es) set forth below: 11 ( by agreement 10/28/2022  not by agreement)  by E-Service in conjunction with E-Filing the document(s) listed above through an 12 e-filing vendor approved by this Court. The name of the vendor and the transaction SAN FRANCISCO, CA 94105-2496 receipt I.D. are given in the vendor’s emailed Notification of Service. SHARTSIS FRIESE LLP 13 425 MARKET STREET ELEVENTH FLOOR SERVICE LIST 14 Lawrence M. Cirelli Attorneys for Plaintiff 15 Anthony J. Dutra Sally S. Johnson HANSON BRIDGETT LLP 16 425 Market Street, 26th Floor San Francisco, CA 94105 17 Tel: 415-995-5003 Fax: 415-995-3497 18 Email: lcirelli@hansonbridgett.com Email: adutra@hansonbridgett.com 19 Robert H. Bunzel Attorneys for Nominal 20 C. Griffith Towle Defendant Artichoke Joe’s BARTKO ZANKEL BUMZEL & MILLER 21 One Embarcadero Center, Suite 800 San Francisco, CA 94111 22 Tel: 415-956-1900 Fax: 415-956-1152 23 Email: rbunzel@bzbm.com Email: gtowle@bzbm.com 24 cc legal assistants 25 Barbara Sage (bsage@bzbm.com) Dana Marie Knapp (dknapp@bzbm.com) 26 Terry Ingroff (tingroff@bzbm.com) 27 28 -6- Case No. ANSWER TO SECOND AMENDED COMPLAINT 22-CIV-02871 1 James M. Wagstaffe Attorneys for Defendant James Harnett (Of Counsel) Cody Sammut 2 ADAMSKI MOROSKI MADDEN CUMBERLAND & GREEN LLP 3 Mailing Address: Post Office Box 3835 San Luis Obispo, CA 93403-3835 4 Physical Address: 6633 Bay Laurel Place Avila Beach, CA 93424 5 Tel: 805-543-0990 Fax: 805-543-0980 6 Email: wagstaffe@ammcglaw.com Email: hartnettjim@comcast.net 7 8 I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. 9 Executed on April 24, 2024, at San Francisco, California. 10 11 Elaine Luz 12 SAN FRANCISCO, CA 94105-2496 SHARTSIS FRIESE LLP 13 425 MARKET STREET ELEVENTH FLOOR 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -7- Case No. ANSWER TO SECOND AMENDED COMPLAINT 22-CIV-02871 10297090