NATURE OF PROCEEDINGS: Hearing on Defendants’ Demurrer - with Motion to Strike

 

Defendants’ demurrer is sustained in part and overruled in part. The motion to strike is granted in part and denied in part.

 

BACKGROUND

Plaintiff Sidhal Equity, LLC, filed this action against Woodland Equity, LLC (“Woodland”), Woodland Hills Capital, LLC (“WH Capital”), Sunrise Real Estate Group, LLC (“Sunrise”), Bruce Abrams, and doe defendants 1 to 20 (collectively “Defendants”), alleging that Defendants refuses to provide an accounting to Plaintiff of income, profits, or losses generated by 20501 Ventura Boulevard, Woodland Hills, CA 91436 (“the Property”), which the parties own as tenants in common.

The causes of action are: (1) Breach of Contract – Tenants in Common Agreement; (2) Breach of Contract – Property Management Agreement; (3) Breach of Fiduciary Duty; (4) Fraud; (5) Constructive Trust; (6) Accounting; and (7) Declaratory Relief.

 

Defendants filed a demurrer – with motion to strike. Plaintiff filed an opposition.

 

REQUEST FOR JUDICIAL NOTICE

Defendants request the Court take judicial notice of Daniel A. Abrams’ licensing record with the Bar. Defendants’ request for judicial notice is granted.

LEGAL STANDARD

When considering demurrers, courts read the allegations liberally and in context. Wilson v. Transit Authority of City of Sacramento (1962) 199 Cal.App.2d 716, 720-21. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994. “A demurrer tests the pleading alone, and not on the evidence or facts alleged.” E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315. As such, courts assume the truth of the complaint’s properly pleaded or implied factual allegations. Ibid. However, it does not accept as true deductions, contentions, or conclusions of law or fact. Stonehouse Homes LLC v. City of Sierra Madre (2008) 167 Cal.App.4th 531, 538.

Further, the court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. Code Civ. Proc., § 436(a). The court may also strike all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. Id., § 436(b). The grounds for a motion to strike are that the pleading has irrelevant, false, or improper matter, or has not been drawn or filed in conformity with laws. Id. § 436. The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. Id. § 437.

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 (court shall not “sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment”); Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037 (“A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment.”). The burden is on the complainant to show the Court that a pleading can be amended successfully. Blank v. Kirwan (1985) 39 Cal.3d 311, 318.

ANALYSIS

I. Demurrer

1. Alter Ego

As an initial matter, Defendants argue that WH Capital is improperly named as a defendant, only Woodland was a party to the Tenant in Common Agreement, and only Sunrise was a party to the Management Agreement. Opp. at p. 5: 5-18. However, Defendants fail to address Plaintiff’s allegations that the named Defendants were, at all relevant times, each other’s alter egos.

“The ‘single enterprise,’ or alter ego, doctrine is an equitable doctrine: ‘A corporate identity may be disregarded—the “corporate veil” pierced—where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation.” Troyk v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1341 (citation omitted). “In California, two conditions must be met before the alter ego doctrine will be invoked. First, there must be such a unity of interest and ownership between the corporation and its equitable owner that the separate personalities of the corporation and the shareholder do not in reality exist. Second, there must be an inequitable result if the acts in question are treated as those of the corporation alone.” Ibid. (citations omitted) (internal quotation marks omitted).

Corporation Code section 17703.04, subdivision (b) provides in relevant part, “A member of a limited liability company shall be subject to liability under the common law governing alter ego liability ….” “In appropriate circumstances, traditional veil piercing permits a party to pierce the corporate or limited liability company (LLC) veil ‘so that an individual shareholder [or LLC member] may be held personally liable for claims against the corporation [or LLC].’” Blizzard Energy, Inc. v. Schaefers (2021) 71 Cal.App.5th 832, 840 (Blizzard) (quoting Postal Instant Press, Inc. v. Kaswa Corp. (2008) 162 Cal.App.4th 1510, 1513 (alteration in original).

In applying the doctrine, courts consider the following factors: (1) the commingling of funds and assets of the two entities, (2) identical equitable ownership in the two entities, use of the same offices and employees, (3) disregard of corporate formalities, (4) identical directors and officers, and (5) use of one as a mere shell or conduit for the affairs of the other. Cam-Carson, LLC v. Carson Reclamation Authority (2022) 82 Cal.App.5th 535, 549-550. Courts look to the totality of the circumstances, and no one factor is dispositive. Whether a party is liable under an alter ego theory is normally a question of fact. Zoran Corp. v. Chen (2010) 185 Cal.App.4th 799, 811.

Plaintiff alleges that Abrams is the controlling member of Woodland, WH Capital, and Sunrise. Compl. at ¶ 5. Additionally, Plaintiff alleges Woodland, WH Capital, and Sunrise were the alter egos of Abrams, that a unity of interest and ownership between the entities and Abrams existed, and that he completely controlled the entities. Id. at ¶ 6. Plaintiff further alleges that Abrams controlled the business affairs of the entities, commingled their funds and assets, diverted entity funds to his personal use, disregarded legal formalities, inadequately capitalized the entities, and used the entities as mere shells, instrumentalities, or conduits for himself and his businesses. Id. at ¶ 7.

These allegations are sufficient to plead alter ego as a theory of liability for the Defendants named for each cause of action. Defendants do not address the alter ego issue in their reply; instead, they argue that the substantive causes of action are deficient. Reply at p. 8: 9-10.

2. Breach of Contract – Tenants in Common Agreement

Defendants argue that Plaintiff’s first breach of contract claim fails to state a cause of action.

The elements of breach of contract are “‘(1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to plaintiff.’” Kumaraperu v. Feldsted (2015) 237 Cal.App.4th 60, 70 (quoting Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1388).

Plaintiff alleges that Defendants breached the Tenants in Common Agreement (“TIC Agreement”) by failing to disclose all relevant information relating to the re-financing of the Property to enable Plaintiff to make an informed decision, failing to disclose the amount of loan proceeds, diverting the loan proceeds for their own benefit, failing to disclose the diversion, falsifying the use and distribution of loan funds, and failing to distribute the loans funds under the TIC Agreement. Compl. at ¶ 29.

The TIC Agreement includes a distribution schedule for loan or sales proceeds. Compl., Ex. A ¶ 7.2. The proceeds must be used in the following order: (1) to pay the Loan in full and any other losses encumbering title to the property; (2) to pay any unsecured loans made to the Tenants concerning the Property; (3) to pay outstanding expenses related to the financing or sale; (4) outstanding fees and costs under the Property Management Agreement; and (5) paid to each Tenant per their respective interest. Ibid.

In their demurrer, Defendants concede that failure to distribute the loan proceeds could conceivably give rise to a cause of action for breach of the TIC Agreement, but argues Plaintiff fails to explain how Defendants violated paragraph 7.2. Mot. at p. 9:19-28. At the pleading stage, it is sufficient for Plaintiff to allege that Defendants failed to distribute the loan according to the TIC Agreement and diverted the loan proceeds for their benefit. Plaintiff need not allege in the Complaint at which phase of the distribution schedule the diversion occurred.

Because Plaintiff has alleged the existence of a contract with Defendants, at least one provision of the contract Defendants breached, and damages in an amount to be proven at trial, it has adequately pleaded a breach of contract claim. Accordingly, the demurrer as to the first cause of action is overruled.

3. Breach of Contract – Property Management Agreement

Plaintiff additionally alleges Defendants breached the Property Management Agreement (“PMA”), which required Defendants to provide periodically a statement of receipt and disbursements, and to pay to the owner income generated from the property except a reasonable balance for working capital. Compl. at ¶ 33, Ex B. Plaintiff alleges that Defendants breached the PMA by, among other things, failing to provide periodic statements of receipts and disbursements to Plaintiff as required by the PMA. Compl. at ¶ 34. Plaintiff further alleges that Defendants took compensation above the compensation agreed to in the PMA without Plaintiff’s consent. Compl. at ¶ 36

Defendants suggest these allegations are factually false and argue that the PMA allegations authorized them to collect additional compensation. Opp. at p. 10:25. However, for the purposes of this motion, the Court accepts all factual allegations as true. The provision allowing for additional compensation states in relevant part, “Agent shall be entitled to additional compensation based upon the agreement between the parties at the time such work is performed as applicable.” Compl. at ¶ 35, Ex. B ¶ 7. Plaintiff specifically alleges that it did not consent to the increased compensation. Compl. at ¶ 36. Accordingly, the demurrer to the second cause of action is overruled.

4. Breach of Fiduciary Duty

Defendants argue that Plaintiff fails to state a claim for breach of fiduciary duty because there is no fiduciary duty owed between cotenants. Opp. at p. 11:7-14. Defendants cite no authority for this proposition. Moreover, in Wilson v. S.L. Rey, Inc. (1993) 17 Cal.App.4th 234 (Wilson), the Court expressly held “[c]otenants stand in fiduciary relationship to each other.” Wilson, supra, 17 Cal.App.4th at p. 242. Defendants assert, without providing argument or authority, that this only applies where a cotenant acquires an interest adverse to another cotenant. Opp. at p. 11:11. Defendants additionally argue that the disclaimer of partnership in the TIC Agreement precludes a finding of a fiduciary relationship between the cotenants. However, Wilson makes clear that no partnership is required, only that the tenants in common receive their interests at the same time. Wilson, supra, 17 Cal.App.4th at p. 243. Here, as alleged in the Complaint, that requirement is met. Compl. at ¶ 11.

5. Fraud

Defendants argue that the fraud claim repackages the breach of fiduciary duty claim and fails to meet the heightened pleading standard.

“The elements of fraud are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” Charnay v. Cobert (2006) 145 Cal.App.4th 170, 184 (Charnay) (citation omitted) (internal quotation marks omitted).

“Fraud must be specifically pleaded; a general pleading of the legal conclusion of fraud is insufficient. Every element of the cause of action must be alleged in full, factually and specifically.” Tindell v. Murphy (2018) 22 Cal.App.5th 1239, 1249.

“The required elements for fraudulent concealment are (1) concealment or suppression of a material fact; (2) by a defendant with a duty to disclose the fact to the plaintiff; (3) the defendant intended to defraud the plaintiff by intentionally concealing or suppressing the fact; (4) the plaintiff was unaware of the fact and would not have acted as he or she did if he or she had known of the concealed or suppressed fact; and (5) plaintiff sustained damage as a result of the concealment or suppression of the fact.” Graham v. Bank of America, N.A. (2014) 226 Cal.App.4th 594, 606.

A complaint alleging fraudulent concealment must allege “(1) the content of the omitted facts, (2) the defendant’s awareness of the materiality of those facts, (3) the inaccessibility of the facts to the plaintiff, (4) the general point at which the omitted facts should or could have been revealed, and (5) justifiable and actual reliance, either through action or forbearance, based on the defendant’s omission.” Rattagan v. Uber Technologies, Inc., (2024) 17 Cal. 5th 1, 43-44 (Rattagan).

Here, Plaintiff alleges that Defendants “fraudulently concealed information relating to the financial affairs of the TIC.”  Compl. at ¶ 50. However, Plaintiff fails to allege any justifiable reliance (actions or omissions) taken based on Defendants fraudulent concealment. Accordingly, the demurrer to the fourth cause of action is sustained with leave to amend.

6. Constructive Trust

“A constructive trust is an equitable remedy to compel a person who has property to which he is not justly entitled to transfer it to the person entitled thereto. Weiss v. Marcus (1975) 51 Cal.App.3d 590, 600 (Weiss). The principal constructive trust situations are set forth in two statutes. Civil Code section 2223 provides, “One who wrongfully detains a thing is an involuntary trustee thereof, for the benefit of the owner.” Civil Code section 2224 provides: “One who gains a thing by fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act, is, unless he has some other and better right thereto, an involuntary trustee of the thing gained, for the benefit of the person who would otherwise have had it.” “The cause of action is not based on the establishment of a trust, but consists of the fraud, breach of fiduciary duty, or other act which entitles the plaintiff to some relief. That relief, in a proper case, may be to make the defendant a constructive trustee with a duty to transfer to the plaintiff.” Weiss, supra, 51 Cal.App.3d at p. 600 (citation omitted) (internal quotation marks omitted).

Here, Plaintiff alleges that Defendants improperly utilized TIC assets, property, and/or loan proceeds to the detriment of plaintiff. Compl. at ¶ 58. As discussed above, the parties had a fiduciary responsibility to one another. Therefore, Plaintiff has properly alleged constructive trust as a remedy for the alleged breach of fiduciary duty. The demurrer is overruled as to the fifth cause of action.

7. Accounting

Defendants argue that there is no duty to account, because the sum allegedly owed is ascertainable from the books and records maintained by another party. Opp. at p. 11: 21-26.

 “A cause of action for an accounting requires a showing that a relationship exists between the plaintiff and defendant that requires an accounting, and that some balance is due the plaintiff that can only be ascertained by an accounting. An action for accounting is not available where the plaintiff alleges the right to recover a sum certain or a sum that can be made certain by calculation. A plaintiff need not state facts that are peculiarly within the knowledge of the opposing party.” Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 179 (citations omitted).

Here, Plaintiff has established a relationship with Defendants as cotenants. Plaintiff alleges that Defendants diverted loan proceeds obtained from re-financing the Property into a “slush fund” and commingled those funds with accounts and funds unrelated to the Property without Plaintiff’s consent. Plaintiff does not allege the right to recover a sum certain, but instead seeks an accounting to ascertain the money it is due.

Defendants misstate the law when they assert that an action for accounting is not proper when the sum may be ascertained from the records of another party. The case on which they rely, Prakashpalan v. Engstrom, Lipscomb & Lack (2014) 223 Cal.App.4th 1105 (Prakashpalan) says the opposite. “An accounting is an equitable proceeding which is proper where there is an unliquidated and unascertained amount owing that cannot be determined without an examination of the debits and credits on the books to determine what is due and owing.” Prakashpalan, supra, 223 Cal.App.4th at pp. 1136-1137. Accordingly, the demurrer to the sixth cause of action is overruled.

8. Declaratory Relief

Defendants argue that Plaintiff fails to state a cause of action for declaratory relief where it asserts fully accrued causes of action on the same facts. Opp. at p. 12:6-11.

“Declaratory relief operates prospectively, serving to set controversies at rest. If there is a controversy that calls for a declaration of rights, it is no objection that past wrongs are also to be redressed; but there is no basis for declaratory relief where only past wrongs are involved. Hence, where there is an accrued cause of action for an actual breach of contract or other wrongful act, declaratory relief may be denied.” Osseous Technologies of America, Inc. v. DiscoveryOrtho Partners LLC (2010) 191 Cal.App.4th 357, 366 (citation omitted) (internal quotation marks omitted). However, “where ‘there is a reasonable expectation that the wrong [if any] will be repeated,’ the controversy does not present mere academic questions resulting from mootness or other considerations and declaratory relief should not be denied. Southern Counties Gas Co. v. Ventura Pipeline Constr., Co. (1971) 19 Cal.App.3d 372, 381 (citation omitted).

Here, Plaintiff seeks both to address past wrongs allegedly inflicted by Defendants, as well as clarify their respective rights and responsibilities as co-tenants. Therefore, while it is true that Plaintiff has also alleged fully accrued causes of action, the ongoing relationship between the parties creates an ongoing controversy that does not prevent a mere academic question. Accordingly, the demurrer as to the seventh cause of action is overruled.

 

II. Motion to Strike

Defendants move to strike the following portions of the complaint.

1. Paragraph 13, page 3, lines 22-25: “However, the TIC Agreement was not negotiated between the Owners. It was prepared by Daniel A. Abrams, a member of the bar, who at the time was a partner at the law firm of Abrams, Tofer & Reghabi (Section 12.9 of the TIC Agreement), and the son of Defendant ABRAMS, the principal of WOODLAND and SUNSET.”  2. Paragraph 14, page 26, line 4: “The TIC Agreement is plagued with inconsistencies, and hopelessly vague as to certain rights and obligations of the Owners. By way of example and not a limitation (A) the TIC Agreement designates “Woodland Hills Equity, LLC, a California limited liability company” as the ‘TIC Authorized Signatory,’ with seemingly unlimited control over the affairs of the Owners and the Property¹ and (B) Exhibit B to the TIC Agreement identifies ‘Woodland Hills Capital, LLC’ as one of the three Owners of the Property, and holder of 45% undivided interest in the Property.²”

3. Paragraph 18, page 26, lines 19-22: “At the time of the execution of TIC Agreement in 2007, SIDHAL’s managing member was Sid Kamrava, who is since deceased. Immediately prior to Sid Kamrava’s passing, SIDHAL became managed by Sid Kamrava’s widow, Haleh Kamrava (‘HOLLY’), who had minimal experience and knowledge as a real estate owner, investor and/or operator.’’ 4. Paragraph 29, page 6, line 28 to page 7, line 7: “Based on information and belief, ABRAMS, acting on behalf of himself and/or WOODLAND, breached the TIC Agreement, by among other things, failing to disclose all relevant information relating to the re-financing of the Property to enable SIDHAL to make informed material decisions, failed to disclose the amount of loan proceeds which would be obtained for the TIC through the re-financing of the Property, diverted the loan proceeds for their own benefit, failed to disclose that Defendants had diverted the loan proceeds for their own benefit, falsified the use and distribution of the loan proceeds ....”

5. Paragraph 36, page 8, lines 10 to 14: “Based on information and belief, SUNRISE, acting on its own, and/or at the direction of ABRAMS, breached the Property Management Agreement by taking compensation in excess of the compensation agreed upon in the Property Management Agreement, without SIDHAL’s consent.”

6. Paragraph 41, page 9, lines 1-7 (bolded and italicized portions): “Pursuant to the TIC Agreement, WOODLAND, acting through its managing member ABRAMS, was the “TIC Authorized Signatory’ of the TIC and essentially managed the TIC including all financials matters subject to the approval of the Owners of material decisions in relations to (a) the hiring of a Property Manager, (b) the financing or refinancing of the Property, and the (c) sale of the Property. As such, in that capacity, WOODLAND and ABRAMS, owed to Plaintiff and the other Owners, a duty of loyalty and/or a duty of care in the conduct of managing the TIC.”

7. Paragraph 42, page 9, lines 8-12: “Based on information and belief, Defendants breached their fiduciary duties by receiving improper benefits from the Property and/or assets belonging to the Owners, by re-financing the Property and diverting the proceeds, by commingling loan proceeds with accounts and funds unrelated to the Property, and by using loan proceeds belonging to the Owners as a ‘slush fund’, without Plaintiff’s consent, and without knowledge.”

8. Paragraph 43, page 9, lines 13-16: “In addition, based on information and belief, Defendants breached their fiduciary duties by failing, refusing and neglecting to provide all relevant information regarding the financial and accounting aspects of the TIC, and have only provided certain limited information, despite requests therefore, in an apparent attempt to conceal their acts and omissions.”

9. Paragraph 44, page 9, lines 17-20: “Moreover, based on information and belief, ABRAMS and/or someone else on behalf of WOODLAND, forged the signature of Haleh Kamrava, on behalf of Plaintiff, on certain financial documents, in relation to a loan, without Plaintiff’s knowledge or consent in order to conceal material information relating to the Property, Owners and the Loan proceeds.”

10. Paragraph 45, page 9, lines 21-23 (bolded and italicized portions): “Based on information and belief, ABRAMS and WOODLAND have also breached their fiduciary duties by taking other actions to benefit themselves, to the detriment of the TIC and the Owners, as proven at trial.”

11. Paragraph 46, page 9, lines 24-25 (bolded and italicized portions): Defendants’ actions and omissions constitute a breach of fiduciary duties including but not limited to the duty of loyalty and duty of care. By taking the actions alleged, Defendants breached their duties to the Owners in the TIC by failing to account to the TIC properly, by failing to properly utilize and distribute assets and loan proceeds, and by failing to hold as a trustee for the TIC, the assets, property, profit or benefits which should have been provided to the Owners and/or utilized solely for the benefit of the Owners.”

12. Paragraph 47, page 10, lines 2-4: “As a direct and proximate result of Defendants’ violation of their fiduciary duties as set forth herein, Plaintiff has been damaged an amount to be proven at trial, but in excess of the jurisdictional limits of this Court.”

13. Paragraph 49, page 10, lines 9-15: “By virtue of the TIC Agreement, the relationship between Plaintiff and Defendants was fiduciary in nature. Defendants thereby owed Plaintiff the fiduciary duties of loyalty and care, and the obligation to conduct the TIC business in good faith and fair dealing. Because Plaintiff’s confidence in Defendants’ integrity caused Plaintiff to entrust Defendants with the authority to act for the TIC, a confidential relationship existed at all times herein mentioned between Plaintiff and Defendants and Plaintiff relied on the relationship and the representations made by ABRAMS on behalf of WOODLAND.”

14. Paragraph 50, page 10, lines 16-20 (bolded and italicized portions): Defendants breached their fiduciary duties to Plaintiff, violated the relationship of trust and confidence, and fraudulent concealed information relating to the financial affairs of the TIC, including but not limited to forging Plaintiff’s signature on financial documents without Plaintiff’s knowledge and consent, diverting and misapplying TIC property and assets, and commingling TIC property and assets with other accounts, all to the detriment of Plaintiff.”

15. Paragraph 51, page 10, lines 21-23: “Plaintiff had reasonably relied on defendants in view of their relationship as Owners under the TIC Agreement and was ignorant of the actions and fraudulent concealment by the Defendants.”

16. All references to Woodland Hills Capital, LLC, and the term “WH CAPITAL.”

 

After reviewing the Complaint, Motion, Opposition, and Reply, the Court rules as follows:

A. Numbers 1-5

1. Granted. The Court takes judicial notice of the fact that Daniel A. Abrams was not a member of the California bar in 2007 when the TIC Agreement was executed. Plaintiff may amend the Complaint to identify Alan Abrams as the attorney who drafted the TIC Agreement. Opp. at p. 3:22-23.

2. Denied. Defendants concede there is a typo and does not explain why the allegation is irrelevant, false, or improper. Mot. at p. 9:23-28.

3. Denied. These are relevant background facts.

4. Denied. Whether the TIC Agreement required Defendants to disclose material information is a question of contractual interpretation that turns on the facts surrounding the parties' intent when they entered into the agreement. This is beyond the scope of a motion to strike.

5. Denied. Defendants argue that the PMA “allocates full authority for managing the Property… nowhere does Exhibit ‘2’ to the Complaint even arguably give rise to any requirement to obtain Plaintiff’s ‘consent’ to anything.” Mot. at p. 10:21-22.  However, as noted above, the provision allowing for additional compensation requires the agreement between the parties. Compl. at ¶ 35, Ex. B ¶ 7.

Numbers 6 - 8 and 10 - 14 (Fiduciary Responsibility)

Denied. Nos. 6-8, and 10-14 concern Plaintiff’s allegation that Defendants owed Plaintiff a fiduciary duty. As explained above. Such a duty is created between cotenants who acquire an interest in real property at the same time. Wilson, supra, 17 Cal.App.4th at p. 242. Defendants again argue that Wilson creates an exception to a general rule of no cotenant fiduciary relationship that applies only where a cotenant obtains an interest in property or outstanding debt against the property to the detriment of a cotenant. Defendants cite Bardis v. Oates (2004) 119 Cal.App.4th 1 (Bardis) in support of this proposition, but quote from the background section’s description of the parties’ partnership history. Bardis, supra, 119 Cal.App.4th at p. 7 (“Unlike the Cypress partnership agreement, the 1997 TIC agreement disclaimed ‘any intention to create a partnership or joint venture.’”) However, in a footnote to its discussion, the noted that “[t]he markups charged to the TIC after the demise of the Cypress partnership constituted gains equally as illicit as those skimmed from the partnership. As the jury was correctly instructed, [the defendant] owed the same fiduciary duties to his cotenants as he did to his partners.” Id. at p.13, fn. 5. Accordingly, the motion to strike is denied as to items 6, 7, 8, 10, 11, 12, 13 and 14.

Numbers 9 and 14 (Power of Attorney)

Denied. Numbers 9 and 14 concern the scope of the power of attorney provision. Defendants argue that the power of attorney provision entitled them to sign for Haleh Kamrava on behalf of Plaintiff, without Plaintiff’s knowledge or consent. However, the scope of the power of attorney provision is disputed and as with the earlier contract issues, goes beyond the scope of a motion to strike. Accordingly, the motion to strike is denied as to these issues.

Numbers 15 and 16

15. Denied. Defendants provide no argument.

16. Denied. As explained above, Plaintiff has adequately pleaded an alter ego theory of liability. Plaintiff included WH Capital as a defendant to all causes of action brought against Woodland. Compl. at p. 4 fn. 2.

 

CONCLUSION

Defendants demurrer is sustained with leave to amend as to the fourth cause of action and overruled as to all others. The motion to strike is granted in part and denied in part. Motion to strike no. 1 is granted with leave to amend. Motion to strike nos. 2-16 are denied. Plaintiff has twenty days leave to amend.