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P. CHRISTIAN SCHELEY, ESQ. BAR#: 125493
J. PARK JENNINGS, ESQ. BAR# 271686
CLAPP, MORONEY, VUCINICH, BEEMAN and SCHELEY ELECTRONICALLY
A PROFESSIONAL CORPORATION FILED
1111 Bayhill Drive, Suite 300 i coins bean mamceeo ft
San Bruno, California 94066
Tel: (650) 989-5400 Fax: (650) 989-5499 42/07/2015
BY-:RONNIE OTERO
Attorneys for Defendants Tete
RICHARD TOM
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN FRANCISCO
| HRD COFFEE SHOP INC. AND DAVID Case No. CGC-15-544434
YEUNG,
Plaintiffs, REPLY TO OPPOSITION TO
DEMURRER TO PLAINTIFFS’ FIRST
7 AMENDED COMPLAINT BY
DEFENDANT RICHARD TOM
RICHARD TOM, JOANNA BANKS, :
BINGOWAH, LLC, AND DOES 1 through 100, | Hearing Date: December 14, 2015
| inclusive, Time: 9:30 a.m.
Dept.; 302
Defendants.
Action filed: March 2, 2015
FAC filed: April 27, 2015
L STATEMENT OF THE OPPOSITION
Plaintiffs’ primary allegation is that Plaintiffs and Defendants entered into a WRITTEN contract
at some time after October 2012, and without this allegation Plaintiffs’ primary theory of the case falls
apart. No such written contract is attached to the FAC, nor are the terms set out, quoted, or otherwise
sufficiently pled, as raised in the moving papers of this demurrer. Plaintiffs’ opposition fails to rebut
Defendant Tom’s initial showing of this fatal defect. As discussed herein, Plaintiffs’ Opposition
concedes and even emphasizes that the FAC’s allegations of a written contract both are fatally deficient
| and support the entire FAC. Therefore, the Defendant Tom’s demurrers to Plaintiffs’ FAC should be
sustained without leave to amend due to the failure of the Opposition to counter any material elements of
the demurrers at issue.
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REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFF'S FAC BY DEFENDANT RICHARD TOMfk wb ND
I. AUTHORITY AND ARGUMENT
A. Plaintiffs’ Opposition Concedes That the FAC Fails to Sufficiently Plead a
Written Contract
Plaintiffs do not counter Defendant Tom’s showing that the FAC fails to sufficiently plead a
written contract, and in fact the authority in Plaintiffs’ opposition supports Defendant Tom’s arguments.
The sole authority cited in Plaintiffs’ opposition to support Plaintiffs” contention that Plaintiffs did not
have to attach a written contract or set forth the terms of the contract with specificity in the complaint
(i.e, Beck) is a decision based upon the plaintiffs attachment_of the contract_as an exhibit to the
complaint — the exact opposite of what Plaintiffs represent as the meaning of the decision. The Beck
Court’s analysis and thus holding was possible only because the “first cause of action incorporated by
reference a copy of the alleged contract which was attached to the pleading.” Beck v. American Health
Group International, Inc. (1989) 211 Cal.App.3d 1555, 1559 Fn 1 (emphasis added); cited by Plaintiffs
at Opposition, 4:6-7. The FAC, unlike the complaint at issue in Beck, has the fatal deficiency of failing
| to attach and incorporate the purported written contract into the first and fundamental cause of action for
breach of contract.
Plaintiffs’ FAC falls apart based upon this fatal deficiency to appropriately plead the purported
| written contract:
a) if there is no contractual agreement, then there is no basis for the second cause of action’s claim
for breach of fiduciary duty arising out of the purported contract;
b) if there is no fiduciary duty arising out of the purported contract, then Plaintiffs’ claim in the third
cause of action for an accounting based upon a fiduciary duty fails;
c) if there was no contract creating the purported business venture with Defendant Tom, then there is
no proper basis for Plaintiffs’ claim of conversion of such venture’s intangible property in the
fourth cause of action (besides the inapplicability of conversion to intangible property);
| d) if there was no contract creating a contractual imposed obligation on Defendant Tom (Opposition
to Demurrer, 5:7-8), then there could not have been a misappropriation of trade secrets as alleged
in the fifth cause of action;
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REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFF’S FAC BY DEFENDANT RICHARD TOMkw oN
e) if there were no trade secrets misappropriated because the fifth cause of action fails, then the sixth
cause of action for unfair competition in misappropriating such trade secrets also fails;
f) if there was no contract creating an economic relationship with Plaintiffs, then there could not
have been intentional or negligent interference with prospective economic advantage as alleged in
the seventh and eighth causes of action;
g) Plaintiffs cannot show fraud under the tenth cause of action if they cannot plead the existence of
the contract in which the purportedly fraudulent representations were made;
h) the twelfth cause of action for trade name infringement fails since, as Plaintiffs concede in their
Opposition at 7:14-19, that claim relies upon the existence of the purported written contract;
i) and lastly, the thirteenth cause of action (the facts of which are pled entirely by incorporation)
fails since the so-called “conspiracy” arose out of the purported written contract.
Therefore, Plaintiffs’ concession that they must attach a writicn contract means that all of these
causes of action fail as detailed above, and the entire FAC is legally deficient.
B. Plaintiffs’ Opposition Concedes That the FAC’s Fourth Cause of Action for
Conversion Improperly Asserts Claims for Intangible and Indefinite Things.
Plaintiffs’ opposition fails to rebut the legal deficiencies raised in the initial demurrer papers
regarding Plaintiffs’ claim in the FAC’s fourth cause of action for conversion. Plaintiffs concede that the
fourth cause of action for Conversion is inappropriately pled by agreeing with the statement of the
applicable law in the moving papers, which include the proposition that “intangibles” cannot be the
subject of a cause of action for conversion. (Opposition to Demurrer, 4:27-28). Defendants are claiming
conversion based upon the alleged misappropriation of “profits, trade names, goodwill and trade secrets
... [and] Defendants are attempting to sell “HRD Smokin Grill without Plaintiff's [sic] authority.”
(Opposition to Demurrer, 4:25-26).
These things are all excellent examples of claims based upon “indefinite, uncertain, and
intangible” items. Olschewski v. Hudson (1927) 87 Cal.App.2d 282, 286-289 (cited in Demurrer MPA,
4:26-28). “Profits” are inherently uncertain because they require consideration of losses, expenses, and
transaction costs. Trade names and goodwill are both the sine qua non of “intangible” rights. As the
California Supreme Court stated, “good will” is “concededly intangible.” Lugosi v. Universal Pictures
‘GAData\DOCS\0094\04998\Demurrer\Reply.docx: 3
REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFF’S FAC BY DEFENDANT RICHARD TOM(1979) 25 Cal.3d 813, 835. As emphasized in Plaintiffs’ Opposition, none of the things that the FAC
alleges were “converted” by Defendant Tom are the proper subject of a cause of action for conversion.
Therefore, Plaintiffs have failed to state a claim as a matter of law by failing to allege the required facts
and legal elements. Plaintiffs have overpled their complaint and the general and special demurrers to this
cause of action should thus be sustained without leave to amend.
Cc. The Opposition Misinterprets the Law Concerning Pleading Trade Libel and
As A Result Fails to Oppose the Demurrers To Such Causes of Action and
Concedes Such Demurrers
As stated in the moving papers, Plaintiffs’ FAC fails to allege the required elements of a claim for
“Trade Libel” in the ninth cause of action. Plaintiffs’ Opposition has sufficiently muddied the waters that
a restatement of the elements of “trade libel” must be set forth again so as to judge whether or not
Plaintiffs’ Opposition addresses the required elements — which it does not. Such failure to oppose all
grounds for the demurrer concedes the matter, and therefore the demurrers to the ninth cause of action for
“trade libel” should be sustained without leave to amend.
According to CACI 1731, the first element of “trade libel” is “That [name of defendant] made a
statement that disparaged the quality of [name of plaintiff]’s [product/service].” As stated in the moving
papers, “words constituting an alleged libel must be specifically identified, if not pleaded verbatim, in the
complaint.” Kahn v. Bower (1991) 232 Cal.App.3d 1599, 1612: The allegation in the FAC upon which
this cause of action relies is a purported Yelp review, which is as follows:
We believe owners David Yeung and Joanna (jojo) Banks incited your slanted review. If
in fact meal was spoiled be noticeable immediately and would gladly refund. HRD
COFFEE SHOP David Yueng was caught BOE for fraudulently stealing sales tax along
with partner jojo and under declaring INCOME to both IRS & CA.
FAC, 54 (page 12:19-21).
Setting aside for now Plaintiffs’ Anti-SLAPP liability if this claim continues to be asserted, there
is nothing within that statement that is reasonably construed as libel against Plaintiffs’ “product/service.”
The allegations, if taken as true (i.e. assuming that they were in fact asserted by “Defendants,” though the
allegations are hopelessly indefinite as they do not identify who is speaking, when they were speaking, or
what they were speaking about), deal only with Plaintiff David Yeung’s tax evasion. Whether or not
G:\Data\DOCS\0094\04998\Demurrer Reply.docx 4
REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFF’S FAC BY DEFENDANT RICHARD TOMDavid Yueng is a tax cheat is not defamatory of any of his “products/services” in the food and restaurant
| industry — at best it is an alleged attack against his personal character. Plaintiffs’ Opposition fails to
address the point that the FAC simply does not state a “trade libel” of Plaintiffs’ goods or services.
Therefore, the rest of the argument about whether the statements are pled sufficiently is moot. Since
Plaintiffs have not addressed the “general demurrer” by establishing that they pled all the necessary
elements of this cause of action, they have conceded this point and the demurrer on this cause of action
must be sustained without leave to amend.
D. The Opposition Fails to Show That the Eleventh Cause of Action is
Sufficiently Pled.
There Opposition’s analysis fails to address the point that Plaintiffs are required to plead and
prove special damages for defamation, not simply prove them at trial as the Opposition proposes.
(Opposition, 6:17-28), This is especially important where the alleged defamation, as in the FAC, is not
| something that would be directly linked to a financial loss. Plaintiffs have failed to address this dual
requirement of pleading and proving special damages by focusing solely on the future task of proving
damages, and Plaintiff's failure to oppose Defendant Tom’s demurrer on this point concedes the issue.
K, The Opposition Fails to Counter the Demurrers’ Showing That the Twelfth
Cause of Action for “Trade Name Infringement” is Insufficiently Pled and
Cannot Meet the Required Elements.
On its face, Plaintiffs cannot show trade name infringement, as similar names are not actionable
under this cause of action. Plaintiffs have pled and argued that their trade name is “HRD Coffee Shop”
or “HRD.” There are no allegations that Defendant Tom or any other Defendant traded under either the
name “HRD Coffee Shop” or “HRD.” Plaintiffs concede that they do not plead that they had established
“HRD Smokin’ Grill” as their trade name at any point. Opposition, 7:14-19. The three names (i.¢. the
two used by Plaintiffs and the HRD Smokin’ Grill used by Defendants) are not sufficiently similar that
any reasonable member of the public could be confused or deceived.
Additionally, since the Opposition discusses the scope and timing of Defendants’ alleged use of
Plaintiffs’ trade names, it is relevant to point out that “HRD Smokin’ Grill” has closed and therefore
Plaintiffs’ allegations of an ongoing dispute are now moot.
GAData\DOCS\0094\04998\Demurrer Reply.docx 5
REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFF’S FAC BY DEFENDANT RICHARD TOMF, The Opposition Does Not Counter Defendant’s Showing that Civil Conspiracy
is a Theory of Liability, not a Cause of Action; Furthermore, all Claims Are
Asserted Against All Defendants, so Pleading Conspiracy is a Nullity.
Once again, it is helpful to refer to CACI to determine if the Opposition is correct regarding its
assertion of a claim in the thirteenth cause of action for conspiracy. CACI 3600 defines conspiracy as:
[Name of plaintiff] claims that [he/she] was harmed by [name of coconspirator}’s [insert
tort theory] and that [name of defendant] is responsible for the harm because [he/she] was
part of a conspiracy to commit [insert tort theory]. A conspiracy is an agreement by two
or more persons to commit a wrongful act. Such an agreement may be made orally or in
writing or may be implied by the conduct of the parties.
If you find that [name of coconspirator] committed [a/an] [insert tort theory] that harmed
[name of plaintiff], then you must determine whether [name of defendant] is also
responsible for the harm. [Name of defendant] is responsible if [name of plaintiff] proves
both of the following:
1. That [name of defendant] was aware that [name of coconspirator] [and others] planned
to [insert wrongful act]; and
2. That [name of defendant] agreed with [name of coconspirator] [and others] and
intended that the [insert wrongful act] be committed.
Mere knowledge of a wrongful act without cooperation or an agreement to cooperate is
insufficient to make [name of defendant] responsible for the harm.
A conspiracy may be inferred from circumstances, including the nature of the acts done,
the relationships between the parties, and the interests of the alleged coconspirators.
[Name of plaintiff] is not required to prove that [name of defendant] personally
committed a wrongful act or that [he/she] knew all the details of the agreement or the
identities of all the other participants.
CACTI 3600 Conspiracy — Essential Elements
In fact, the first “authority” cited by CACI 3600 states that “Conspiracy is not a cause of action,
but a legal doctrine that imposes liability on persons who, although not actually committing a tort
themselves, share with the immediate tortfeasors a common plan or design in its perpetration.”
(Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510-511 (emphasis added)).
Conspiracy, like respondeat superior, is a theory of joint liability for a tort. The Court should sustain the
demurrers to the thirteenth cause of action without leave to amend the thirteenth cause of action because
“conspiracy” is not an independent cause of action.
TH. DISPOSITION REQUESTED
This case has been pending for over half a year, and yet Plaintiffs’ Opposition is conspicuously
silent about the simple option of producing and attaching the purported written contract to the complaint
G:\Data\DOCS\9094\04998\Dermurrer‘Reply.doox 6
REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFF’S FAC BY DEFENDANT RICHARD TOMBR won
to ameliorate Defendant Tom’s legal challenges to Plaintiffs’ defective pleading of a purported written
contract. Plaintiffs’ Opposition does not successfully rebut any of the material contentions of Defendant
Tom’s numerous and well-founded demurrers. The Court may impose “...such terms as may be
proper...” in allowing a party to amend a complaint. Code of Civ. Proc. § 473(a)(1). For the foregoing
reasons, Defendant Tom respectfully requests that the Court sustain his Demurrers to Plaintiff's FAC,
without leave to amend where appropriate, and with any conditions on re-pleading claims based upon a
purported written contract that the Court may see fit to impose.
Dated December 7, 2015
CLAPP, MORONEY
VU@INICH, BEEMAN and SCHELEY
P. CHRISTIAN SCHELEY, ESQ.
J. PARK JENNINGS, ESQ.
Attorneys for Defendant
Richard Tom.
G:\Data\DOCS\0094\04998\Demurrer\Reply.docx 7
REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFF’S FAC BY DEFENDANT RICHARD TOMBP
w
HRD COFFEE SHOP. ET AL, v. RICHARD TOM. ET AL.
San Francisco County Superior Court Case No: CGC-15-544434
PROOF OF SERVICE - Civil
[Code of Civ. Proc. §§ 1011, 1013, 1031a, 2015.5]
METHOD OF SERVICE:
CO By Personal Service f] By Mail O By Overnight Delivery
OBy Messenger Service O By Facsimile HIBy E-Mail/Electronic Transmission
O By Certified Mail/Return Receipt Request (LexisNexis File & Serve XPress)
1. lam a citizen of the United States and am employed in the County of San Mateo, State of
California. I am over the age of 18 years and not a party to the within action.
2. My place of employment is 1111 Bayhill Drive, Suite 300, San Bruno, CA 94066.
3. On the date set forth below, | caused to be served a true and correct copy of the document/s)
described as:
REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFFS’ FIRST AMENDED
COMPLAINT BY FIRST AMENDED COMPLAINT BY DEFENDANT RICHARD TOM
4, I served the documents on the persons below, as follows:
Joel P, Gumbiner, Esq. s
Gordon D. McAuley, Esq.
WILLIAM & GUMBINER LLP
100 Drakes Landing Road, Suite 260
Greenbrae, CA 94904
Tel: (415) 755-1880 — Fax: (415) 419- 5469
Email: jgumbiner@williamsgumbiner.com
cauley@)williamsgumbiner.com
ATTORNEY FOR PLAINTIFFS HRD COFFEE SHOP INC. and DAViD YEUNG ~.
5. The documents were served by the following means (specify):
a. QO BY PERSONAL SERVICE. I personally delivered the documents to'the
persons at the addresses listed in item 4. (1) For a party tépresented by ah
attorney, delivery was made to the attorney or at the attorney's office by
leaving the documents in an envelope or package elearly labeled to identify
the attorney being served with a receptionist or an individuai in charge of
the office. (2) For a party, delivery was made to the patty or by leaving the
documents at the party's residence with some person not less than 18 years
of age between the hours of eight in the morning and six in the evening.
b. & BY UNITED STATES MAIL. I enclosed the documents ir. a cvaled
envelope or package addressed to the persons at the addresses ia item 4 and
(specify one):
G\Data\DOCS\0094\04998\Demurrer\Reply-POS (file-serve xpress). wpdl
REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFFS’ FIRST AMENDED COMPLAINT BY FIRST
AMENDED COMPLAINT BY DEFENDANT RICHARD TOMwo
a
a
Oo deposited the sealed envelope with the United States Postal Services,
with the postage fully prepaid.
fl placed the envelope for collection and mailing. following our
ordinary business practices. I.am readily familiar with this
business's practice for collecting and processing correspondence for
mailing. On the same day that correspondence is placed for
collection and mailing, it is deposited in the ordinary course of
business with the United States Postal Service, in a sealed envelope
with postage fully prepaid.
Tam resident or employed in the County where the mailing occurred. The envelope or
package was placed in the mail at San Bruno, California, County of San Mateo.
c.
a
()
BY OVERNIGHT DELIVERY. | enclosed the documents in an
envelope or package provided by an overnight delivery carrier and
addressed to the persons at the addresses in item 4. I place the envelope or
package for collection and overnight delivery at an office or a regularly
utilized drop box of the overnight delivery carrier.
BY MESSENGER SERVICE. I served the documents by placing them in
an envelope or package addressed to the persons at the addresses listed in
item 4 and providing them to a professional messenger service for service.
BY FAX TRANSMISSION. Based on an agreement of the parties to
accept service by fax transmission, | faxed the documents to the persons at
the fax numbers listed in item 4. A copy of the record of the fax
transmission, which I printed out, is attached.
BY E-MAIL OR ELECTRONIC TRANSMISSION. Based on a court
order or an agreement of the parties to accept service by e-mail or electronic
transmission (LexisNexis File & Serve XPress), I caused the documents to
be sent to the persons at the email addresses listed in item 4. 1 did not
receive, within a reasonable time after the transmission, any electronic
message or other indication that the transmission was unsuccessful
BY CERTIFIED MAIL/RETURN RECEIPT REQUESTED, Tenclosed
the documents in a sealed envelope or package addressed to the persons at
the addresses in item 4 and (specify one):
qa placed the envelope for collection and mailing, following our
ordinary business practices. | am readily familiar with this
business's practice for collecting and processing correspondence for
mailing. On the same day that correspondence is placed for ~
collection and mailing, it is deposited in the ordinary course of
business with the United States Postal Service, in a sealed envelope
with postage fully prepaid for said certified mail/return receipt
number (See attached copies of Certified Mail/Return Receipts
Requested.)
(State) | declare under penalty of perjury under the.laws of the State of California that the
foregoing is true and correct.
GAData\DOCS\0094\04998\Demurres\Reply-POS (file-serve xpress). wp
REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFFS FIRST AMENDED COMPLAINT BY FIRST
AMENDED COMPLAINT BY DEFENDANT RICHARD TOMwo
oO (Federal) I declare that | am employed in the offices of a member of the bar of this court at
whose direction this service was made. | declare under penalty of perjury that the f egoing is true
and correct.
Executed on December 7, 2015, at San Bruno, Califo: i
see ‘Ga 49 dg of
Proof of Service - Civil
[Code of Civ.Proc. §§ 1011, 1913, 1013a, 2015.5]
GAData\DOCS\094104998\Demurrer\Reply-POS (file-serve xpress).wpB
REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFFS’ FIRST AMENDED COMPLAINT BY FIRST
AMENDED COMPLAINT BY DEFENDANT RICHARD TOM
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P. CHRISTIAN SCHELEY, ESQ. BAR#: 125493 J. PARK JENNINGS, ESQ. BAR# 271686 CLAPP, MORONEY, VUCINICH, BEEMAN and SCHELEY ELECTRONICALLY A PROFESSIONAL CORPORATION FILED 1111 Bayhill Drive, Suite 300 i coins bean mamceeo ft San Bruno, California 94066 Tel: (650) 989-5400 Fax: (650) 989-5499 42/07/2015 BY-:RONNIE OTERO Attorneys for Defendants Tete RICHARD TOM SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO | HRD COFFEE SHOP INC. AND DAVID Case No. CGC-15-544434 YEUNG, Plaintiffs, REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFFS’ FIRST 7 AMENDED COMPLAINT BY DEFENDANT RICHARD TOM RICHARD TOM, JOANNA BANKS, : BINGOWAH, LLC, AND DOES 1 through 100, | Hearing Date: December 14, 2015 | inclusive, Time: 9:30 a.m. Dept.; 302 Defendants. Action filed: March 2, 2015 FAC filed: April 27, 2015 L STATEMENT OF THE OPPOSITION Plaintiffs’ primary allegation is that Plaintiffs and Defendants entered into a WRITTEN contract at some time after October 2012, and without this allegation Plaintiffs’ primary theory of the case falls apart. No such written contract is attached to the FAC, nor are the terms set out, quoted, or otherwise sufficiently pled, as raised in the moving papers of this demurrer. Plaintiffs’ opposition fails to rebut Defendant Tom’s initial showing of this fatal defect. As discussed herein, Plaintiffs’ Opposition concedes and even emphasizes that the FAC’s allegations of a written contract both are fatally deficient | and support the entire FAC. Therefore, the Defendant Tom’s demurrers to Plaintiffs’ FAC should be sustained without leave to amend due to the failure of the Opposition to counter any material elements of the demurrers at issue. G:\Data\DOCS\0094\04908\Dermurrer Reply.doox 1 REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFF'S FAC BY DEFENDANT RICHARD TOMfk wb ND I. AUTHORITY AND ARGUMENT A. Plaintiffs’ Opposition Concedes That the FAC Fails to Sufficiently Plead a Written Contract Plaintiffs do not counter Defendant Tom’s showing that the FAC fails to sufficiently plead a written contract, and in fact the authority in Plaintiffs’ opposition supports Defendant Tom’s arguments. The sole authority cited in Plaintiffs’ opposition to support Plaintiffs” contention that Plaintiffs did not have to attach a written contract or set forth the terms of the contract with specificity in the complaint (i.e, Beck) is a decision based upon the plaintiffs attachment_of the contract_as an exhibit to the complaint — the exact opposite of what Plaintiffs represent as the meaning of the decision. The Beck Court’s analysis and thus holding was possible only because the “first cause of action incorporated by reference a copy of the alleged contract which was attached to the pleading.” Beck v. American Health Group International, Inc. (1989) 211 Cal.App.3d 1555, 1559 Fn 1 (emphasis added); cited by Plaintiffs at Opposition, 4:6-7. The FAC, unlike the complaint at issue in Beck, has the fatal deficiency of failing | to attach and incorporate the purported written contract into the first and fundamental cause of action for breach of contract. Plaintiffs’ FAC falls apart based upon this fatal deficiency to appropriately plead the purported | written contract: a) if there is no contractual agreement, then there is no basis for the second cause of action’s claim for breach of fiduciary duty arising out of the purported contract; b) if there is no fiduciary duty arising out of the purported contract, then Plaintiffs’ claim in the third cause of action for an accounting based upon a fiduciary duty fails; c) if there was no contract creating the purported business venture with Defendant Tom, then there is no proper basis for Plaintiffs’ claim of conversion of such venture’s intangible property in the fourth cause of action (besides the inapplicability of conversion to intangible property); | d) if there was no contract creating a contractual imposed obligation on Defendant Tom (Opposition to Demurrer, 5:7-8), then there could not have been a misappropriation of trade secrets as alleged in the fifth cause of action; GAData\DOCS\0094\04998\Demurrer\Reply.docx 2 REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFF’S FAC BY DEFENDANT RICHARD TOMkw oN e) if there were no trade secrets misappropriated because the fifth cause of action fails, then the sixth cause of action for unfair competition in misappropriating such trade secrets also fails; f) if there was no contract creating an economic relationship with Plaintiffs, then there could not have been intentional or negligent interference with prospective economic advantage as alleged in the seventh and eighth causes of action; g) Plaintiffs cannot show fraud under the tenth cause of action if they cannot plead the existence of the contract in which the purportedly fraudulent representations were made; h) the twelfth cause of action for trade name infringement fails since, as Plaintiffs concede in their Opposition at 7:14-19, that claim relies upon the existence of the purported written contract; i) and lastly, the thirteenth cause of action (the facts of which are pled entirely by incorporation) fails since the so-called “conspiracy” arose out of the purported written contract. Therefore, Plaintiffs’ concession that they must attach a writicn contract means that all of these causes of action fail as detailed above, and the entire FAC is legally deficient. B. Plaintiffs’ Opposition Concedes That the FAC’s Fourth Cause of Action for Conversion Improperly Asserts Claims for Intangible and Indefinite Things. Plaintiffs’ opposition fails to rebut the legal deficiencies raised in the initial demurrer papers regarding Plaintiffs’ claim in the FAC’s fourth cause of action for conversion. Plaintiffs concede that the fourth cause of action for Conversion is inappropriately pled by agreeing with the statement of the applicable law in the moving papers, which include the proposition that “intangibles” cannot be the subject of a cause of action for conversion. (Opposition to Demurrer, 4:27-28). Defendants are claiming conversion based upon the alleged misappropriation of “profits, trade names, goodwill and trade secrets ... [and] Defendants are attempting to sell “HRD Smokin Grill without Plaintiff's [sic] authority.” (Opposition to Demurrer, 4:25-26). These things are all excellent examples of claims based upon “indefinite, uncertain, and intangible” items. Olschewski v. Hudson (1927) 87 Cal.App.2d 282, 286-289 (cited in Demurrer MPA, 4:26-28). “Profits” are inherently uncertain because they require consideration of losses, expenses, and transaction costs. Trade names and goodwill are both the sine qua non of “intangible” rights. As the California Supreme Court stated, “good will” is “concededly intangible.” Lugosi v. Universal Pictures ‘GAData\DOCS\0094\04998\Demurrer\Reply.docx: 3 REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFF’S FAC BY DEFENDANT RICHARD TOM(1979) 25 Cal.3d 813, 835. As emphasized in Plaintiffs’ Opposition, none of the things that the FAC alleges were “converted” by Defendant Tom are the proper subject of a cause of action for conversion. Therefore, Plaintiffs have failed to state a claim as a matter of law by failing to allege the required facts and legal elements. Plaintiffs have overpled their complaint and the general and special demurrers to this cause of action should thus be sustained without leave to amend. Cc. The Opposition Misinterprets the Law Concerning Pleading Trade Libel and As A Result Fails to Oppose the Demurrers To Such Causes of Action and Concedes Such Demurrers As stated in the moving papers, Plaintiffs’ FAC fails to allege the required elements of a claim for “Trade Libel” in the ninth cause of action. Plaintiffs’ Opposition has sufficiently muddied the waters that a restatement of the elements of “trade libel” must be set forth again so as to judge whether or not Plaintiffs’ Opposition addresses the required elements — which it does not. Such failure to oppose all grounds for the demurrer concedes the matter, and therefore the demurrers to the ninth cause of action for “trade libel” should be sustained without leave to amend. According to CACI 1731, the first element of “trade libel” is “That [name of defendant] made a statement that disparaged the quality of [name of plaintiff]’s [product/service].” As stated in the moving papers, “words constituting an alleged libel must be specifically identified, if not pleaded verbatim, in the complaint.” Kahn v. Bower (1991) 232 Cal.App.3d 1599, 1612: The allegation in the FAC upon which this cause of action relies is a purported Yelp review, which is as follows: We believe owners David Yeung and Joanna (jojo) Banks incited your slanted review. If in fact meal was spoiled be noticeable immediately and would gladly refund. HRD COFFEE SHOP David Yueng was caught BOE for fraudulently stealing sales tax along with partner jojo and under declaring INCOME to both IRS & CA. FAC, 54 (page 12:19-21). Setting aside for now Plaintiffs’ Anti-SLAPP liability if this claim continues to be asserted, there is nothing within that statement that is reasonably construed as libel against Plaintiffs’ “product/service.” The allegations, if taken as true (i.e. assuming that they were in fact asserted by “Defendants,” though the allegations are hopelessly indefinite as they do not identify who is speaking, when they were speaking, or what they were speaking about), deal only with Plaintiff David Yeung’s tax evasion. Whether or not G:\Data\DOCS\0094\04998\Demurrer Reply.docx 4 REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFF’S FAC BY DEFENDANT RICHARD TOMDavid Yueng is a tax cheat is not defamatory of any of his “products/services” in the food and restaurant | industry — at best it is an alleged attack against his personal character. Plaintiffs’ Opposition fails to address the point that the FAC simply does not state a “trade libel” of Plaintiffs’ goods or services. Therefore, the rest of the argument about whether the statements are pled sufficiently is moot. Since Plaintiffs have not addressed the “general demurrer” by establishing that they pled all the necessary elements of this cause of action, they have conceded this point and the demurrer on this cause of action must be sustained without leave to amend. D. The Opposition Fails to Show That the Eleventh Cause of Action is Sufficiently Pled. There Opposition’s analysis fails to address the point that Plaintiffs are required to plead and prove special damages for defamation, not simply prove them at trial as the Opposition proposes. (Opposition, 6:17-28), This is especially important where the alleged defamation, as in the FAC, is not | something that would be directly linked to a financial loss. Plaintiffs have failed to address this dual requirement of pleading and proving special damages by focusing solely on the future task of proving damages, and Plaintiff's failure to oppose Defendant Tom’s demurrer on this point concedes the issue. K, The Opposition Fails to Counter the Demurrers’ Showing That the Twelfth Cause of Action for “Trade Name Infringement” is Insufficiently Pled and Cannot Meet the Required Elements. On its face, Plaintiffs cannot show trade name infringement, as similar names are not actionable under this cause of action. Plaintiffs have pled and argued that their trade name is “HRD Coffee Shop” or “HRD.” There are no allegations that Defendant Tom or any other Defendant traded under either the name “HRD Coffee Shop” or “HRD.” Plaintiffs concede that they do not plead that they had established “HRD Smokin’ Grill” as their trade name at any point. Opposition, 7:14-19. The three names (i.¢. the two used by Plaintiffs and the HRD Smokin’ Grill used by Defendants) are not sufficiently similar that any reasonable member of the public could be confused or deceived. Additionally, since the Opposition discusses the scope and timing of Defendants’ alleged use of Plaintiffs’ trade names, it is relevant to point out that “HRD Smokin’ Grill” has closed and therefore Plaintiffs’ allegations of an ongoing dispute are now moot. GAData\DOCS\0094\04998\Demurrer Reply.docx 5 REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFF’S FAC BY DEFENDANT RICHARD TOMF, The Opposition Does Not Counter Defendant’s Showing that Civil Conspiracy is a Theory of Liability, not a Cause of Action; Furthermore, all Claims Are Asserted Against All Defendants, so Pleading Conspiracy is a Nullity. Once again, it is helpful to refer to CACI to determine if the Opposition is correct regarding its assertion of a claim in the thirteenth cause of action for conspiracy. CACI 3600 defines conspiracy as: [Name of plaintiff] claims that [he/she] was harmed by [name of coconspirator}’s [insert tort theory] and that [name of defendant] is responsible for the harm because [he/she] was part of a conspiracy to commit [insert tort theory]. A conspiracy is an agreement by two or more persons to commit a wrongful act. Such an agreement may be made orally or in writing or may be implied by the conduct of the parties. If you find that [name of coconspirator] committed [a/an] [insert tort theory] that harmed [name of plaintiff], then you must determine whether [name of defendant] is also responsible for the harm. [Name of defendant] is responsible if [name of plaintiff] proves both of the following: 1. That [name of defendant] was aware that [name of coconspirator] [and others] planned to [insert wrongful act]; and 2. That [name of defendant] agreed with [name of coconspirator] [and others] and intended that the [insert wrongful act] be committed. Mere knowledge of a wrongful act without cooperation or an agreement to cooperate is insufficient to make [name of defendant] responsible for the harm. A conspiracy may be inferred from circumstances, including the nature of the acts done, the relationships between the parties, and the interests of the alleged coconspirators. [Name of plaintiff] is not required to prove that [name of defendant] personally committed a wrongful act or that [he/she] knew all the details of the agreement or the identities of all the other participants. CACTI 3600 Conspiracy — Essential Elements In fact, the first “authority” cited by CACI 3600 states that “Conspiracy is not a cause of action, but a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration.” (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510-511 (emphasis added)). Conspiracy, like respondeat superior, is a theory of joint liability for a tort. The Court should sustain the demurrers to the thirteenth cause of action without leave to amend the thirteenth cause of action because “conspiracy” is not an independent cause of action. TH. DISPOSITION REQUESTED This case has been pending for over half a year, and yet Plaintiffs’ Opposition is conspicuously silent about the simple option of producing and attaching the purported written contract to the complaint G:\Data\DOCS\9094\04998\Dermurrer‘Reply.doox 6 REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFF’S FAC BY DEFENDANT RICHARD TOMBR won to ameliorate Defendant Tom’s legal challenges to Plaintiffs’ defective pleading of a purported written contract. Plaintiffs’ Opposition does not successfully rebut any of the material contentions of Defendant Tom’s numerous and well-founded demurrers. The Court may impose “...such terms as may be proper...” in allowing a party to amend a complaint. Code of Civ. Proc. § 473(a)(1). For the foregoing reasons, Defendant Tom respectfully requests that the Court sustain his Demurrers to Plaintiff's FAC, without leave to amend where appropriate, and with any conditions on re-pleading claims based upon a purported written contract that the Court may see fit to impose. Dated December 7, 2015 CLAPP, MORONEY VU@INICH, BEEMAN and SCHELEY P. CHRISTIAN SCHELEY, ESQ. J. PARK JENNINGS, ESQ. Attorneys for Defendant Richard Tom. G:\Data\DOCS\0094\04998\Demurrer\Reply.docx 7 REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFF’S FAC BY DEFENDANT RICHARD TOMBP w HRD COFFEE SHOP. ET AL, v. RICHARD TOM. ET AL. San Francisco County Superior Court Case No: CGC-15-544434 PROOF OF SERVICE - Civil [Code of Civ. Proc. §§ 1011, 1013, 1031a, 2015.5] METHOD OF SERVICE: CO By Personal Service f] By Mail O By Overnight Delivery OBy Messenger Service O By Facsimile HIBy E-Mail/Electronic Transmission O By Certified Mail/Return Receipt Request (LexisNexis File & Serve XPress) 1. lam a citizen of the United States and am employed in the County of San Mateo, State of California. I am over the age of 18 years and not a party to the within action. 2. My place of employment is 1111 Bayhill Drive, Suite 300, San Bruno, CA 94066. 3. On the date set forth below, | caused to be served a true and correct copy of the document/s) described as: REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFFS’ FIRST AMENDED COMPLAINT BY FIRST AMENDED COMPLAINT BY DEFENDANT RICHARD TOM 4, I served the documents on the persons below, as follows: Joel P, Gumbiner, Esq. s Gordon D. McAuley, Esq. WILLIAM & GUMBINER LLP 100 Drakes Landing Road, Suite 260 Greenbrae, CA 94904 Tel: (415) 755-1880 — Fax: (415) 419- 5469 Email: jgumbiner@williamsgumbiner.com cauley@)williamsgumbiner.com ATTORNEY FOR PLAINTIFFS HRD COFFEE SHOP INC. and DAViD YEUNG ~. 5. The documents were served by the following means (specify): a. QO BY PERSONAL SERVICE. I personally delivered the documents to'the persons at the addresses listed in item 4. (1) For a party tépresented by ah attorney, delivery was made to the attorney or at the attorney's office by leaving the documents in an envelope or package elearly labeled to identify the attorney being served with a receptionist or an individuai in charge of the office. (2) For a party, delivery was made to the patty or by leaving the documents at the party's residence with some person not less than 18 years of age between the hours of eight in the morning and six in the evening. b. & BY UNITED STATES MAIL. I enclosed the documents ir. a cvaled envelope or package addressed to the persons at the addresses ia item 4 and (specify one): G\Data\DOCS\0094\04998\Demurrer\Reply-POS (file-serve xpress). wpdl REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFFS’ FIRST AMENDED COMPLAINT BY FIRST AMENDED COMPLAINT BY DEFENDANT RICHARD TOMwo a a Oo deposited the sealed envelope with the United States Postal Services, with the postage fully prepaid. fl placed the envelope for collection and mailing. following our ordinary business practices. I.am readily familiar with this business's practice for collecting and processing correspondence for mailing. On the same day that correspondence is placed for collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service, in a sealed envelope with postage fully prepaid. Tam resident or employed in the County where the mailing occurred. The envelope or package was placed in the mail at San Bruno, California, County of San Mateo. c. a () BY OVERNIGHT DELIVERY. | enclosed the documents in an envelope or package provided by an overnight delivery carrier and addressed to the persons at the addresses in item 4. I place the envelope or package for collection and overnight delivery at an office or a regularly utilized drop box of the overnight delivery carrier. BY MESSENGER SERVICE. I served the documents by placing them in an envelope or package addressed to the persons at the addresses listed in item 4 and providing them to a professional messenger service for service. BY FAX TRANSMISSION. Based on an agreement of the parties to accept service by fax transmission, | faxed the documents to the persons at the fax numbers listed in item 4. A copy of the record of the fax transmission, which I printed out, is attached. BY E-MAIL OR ELECTRONIC TRANSMISSION. Based on a court order or an agreement of the parties to accept service by e-mail or electronic transmission (LexisNexis File & Serve XPress), I caused the documents to be sent to the persons at the email addresses listed in item 4. 1 did not receive, within a reasonable time after the transmission, any electronic message or other indication that the transmission was unsuccessful BY CERTIFIED MAIL/RETURN RECEIPT REQUESTED, Tenclosed the documents in a sealed envelope or package addressed to the persons at the addresses in item 4 and (specify one): qa placed the envelope for collection and mailing, following our ordinary business practices. | am readily familiar with this business's practice for collecting and processing correspondence for mailing. On the same day that correspondence is placed for ~ collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service, in a sealed envelope with postage fully prepaid for said certified mail/return receipt number (See attached copies of Certified Mail/Return Receipts Requested.) (State) | declare under penalty of perjury under the.laws of the State of California that the foregoing is true and correct. GAData\DOCS\0094\04998\Demurres\Reply-POS (file-serve xpress). wp REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFFS FIRST AMENDED COMPLAINT BY FIRST AMENDED COMPLAINT BY DEFENDANT RICHARD TOMwo oO (Federal) I declare that | am employed in the offices of a member of the bar of this court at whose direction this service was made. | declare under penalty of perjury that the f egoing is true and correct. Executed on December 7, 2015, at San Bruno, Califo: i see ‘Ga 49 dg of Proof of Service - Civil [Code of Civ.Proc. §§ 1011, 1913, 1013a, 2015.5] GAData\DOCS\094104998\Demurrer\Reply-POS (file-serve xpress).wpB REPLY TO OPPOSITION TO DEMURRER TO PLAINTIFFS’ FIRST AMENDED COMPLAINT BY FIRST AMENDED COMPLAINT BY DEFENDANT RICHARD TOM