Judge: Anne Richardson, Case: 23STCV20791, Date: 2024-02-15 Tentative Ruling

DEPARTMENT 40 - JUDGE ANNE RICHARDSON - LAW AND MOTION RULINGS
The Court issues tentative rulings on certain motions.The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) email Dept 40 by 8:30 a.m. on the day of the hearing (smcdept40@lacourt.org) with a copy to the other party(ies) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no email is necessary and all parties should appear at the hearing in person or by Court Call. 

Case Number: 23STCV20791    Hearing Date: February 15, 2024    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

Background

Pleadings

Plaintiffs Hand-in-Hand Homecare, Inc. (HHH) and Generous Hand Homecare (GHH) sue Defendants Lakeview Terrace Skilled Nursing Facility LLC (Lakeview Terrace), Yehuda Schmukler and Elliot Zemel (using Lakeview Terrace as alter ego), and Does 1-10 pursuant to an August 29, 2023 Complaint alleging claims of (1) Breach of Written Contract, (2) Breach of Oral Contract, (3) Breach of Implied Covenant of Good Faith and Fair Dealing, (4) Conversion, (5) Unjust Enrichment, and (6) Common Counts.

The claims arise from the following allegations. On or around May 5, 2022, HHH and Lakeview Terrace entered a written agreement for HHH to provide Lakeview Terrace with caretakers and “sitters” who would care for elderly Lakeview Terrace skilled nursing facility residents. Lakeview Terrace breached the written agreement by failing to properly compensate HHH for services provided between November 16, 2022 and February 28, 2023, i.e., of the $89,000 in services rendered by HHH, Defendant refused to pay $49,931.50. Defendants Schmukler and Zemel operate Lakeview Terrace as their alter ego, comingling assets, disregarding legal formalities, inadequately capitalizing Lakeview Terrace, using Lakeview Terrace as a mere shell, manipulating Lakeview Terrace’s assets and liabilities as to deplete Lakeview Terrace’s assets, using Lakeview Terrace to conceal these individual Defendants’ business activities, and using Lakeview Terrace to avoid personal obligations. GHH is also a staffing agency for senior and adult care businesses, but its relationship to this action is not elaborated.

Motions Before the Court

On October 31, 2023, Defendants Schmukler and Zemel filed a demurrer to the Complaint’s first to third causes of action based on insufficiency of pleading.

That same day, Defendants Schmukler and Zemel filed a motion to strike paragraphs nine to 12 from the Complaint, i.e., the Complaint’s alter ego allegations.

On December 21, 2023, Plaintiffs filed oppositions to the demurrer and motion to strike.

On February 7, 2024, Defendants Schmukler and Zemel replied to Plaintiffs’ opposition to the demurrer.

No reply to Plaintiffs’ opposition to the motion to strike appears in the record.

Also on February 7, 2024, Plaintiffs objected to the demurrer reply on the ground that Defendants filed the reply late.

On February 8, 2024, Plaintiffs withdrew their objection.

Defendants Schmukler and Zemel’s demurrer and motion to strike are now before the Court.

Motion to Strike

Legal Standard

The court may, upon a motion or at any time in its discretion and upon terms it deems proper: (a) strike out any irrelevant, false, or improper matter inserted in any pleading; or (b) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (Code Civ. Proc. § 436, subds. (a), (b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [“Matter in a pleading which is not essential to the claim is surplusage; probative facts are surplusage and may be stricken out or disregarded”].)

For the purposes of a motion to strike pursuant to Sections 435 to 437 of the Code of Civil Procedure, the term “pleading” generally means a demurrer, answer, complaint, or cross-complaint, (Code Civ. Proc., § 435, subd. (a)), and an immaterial allegation or irrelevant matter in a pleading entails (1) an allegation that is not essential to the statement of a claim or defense, (2) an allegation that is neither pertinent to nor supported by an otherwise sufficient claim or defense, or (3) a demand for judgment requesting relief not supported by the allegations of the complaint or cross-complaint (Code Civ. Proc., § 431.10, subds. (b)(1)-(3), (c)).

Order Striking Alter Ego Allegations: DENIED.

Defendants Schmukler and Zemel’s motion to strike seeks a court order striking the ninth to twelfth paragraphs of the Complaint. Defendants argue that this relief is proper because “Plaintiffs have failed to allege any facts in support of [their] … alter ego claims,” e.g., “Plaintiffs present no dates, numbers, nor any facts verifiable through any of the five (5) senses to claim that the Answering Defendants did anything to warrant the “extreme remedy, sparingly used” of piercing the corporate veil.” (Mot., pp. 1-2, 5.)

In opposition, Plaintiffs argue that Defendants’ ‘five-senses’ argument is not the relevant standard for alter ego liability. Plaintiffs also argue that a motion to strike may not challenge the sufficiency of a pleading—a demurrer should have been used instead—and that even if a motion to strike may challenge sufficiency, the pleadings need only allege ultimate rather than evidentiary facts. Plaintiffs argue that the Complaint sufficiently alleges alter ego through allegations of domination and control, unity of interest and ownership, use of entity as a mere shell, inadequate capitalization, failure to abide with corporate formalities, using corporate assets as one’s own, and the injustice that would arise if the entity was recognized as having a separate existence. Plaintiffs add that the allegations here are identical to Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 236 (Rutherford)—abrogation on other grounds re: conversion in Lee v. Hanley (2015) 61 Cal.4th 1225, 1240 (Lee)—and First Western Bank & Trust Co. v. Bookasta (1968) 267 Cal.App.2d 910, 915-916 (First Western), where the court of appeal determined that the pleadings sufficiently alleged alter ego liability. Last, Plaintiffs argue that less particularity of pleading is required where the defendant may be assumed to possess knowledge of the facts at least equal, if not superior, to that possessed by the plaintiff, which is the case here because Defendants Schmukler and Zemel possess more knowledge as to factual grounds supporting alter ego liability against them.

No reply appears in the record.

The Court finds in favor of Plaintiffs.

The Court initially notes that a motion to strike properly lies against an unauthorized claim for damages, i.e., damages not allowable as a matter of law. (See, e.g. Commodore Home Systems, Inc. v. Superior Court (1982) 32 Cal.3d 211, 214 (Commodore) [motion to strike lies against request for punitive damages when the claim sued upon would not support an award of punitive damages as a matter of law].)

Moving to the merits, “[a]n alter ego defendant has no separate primary liability to the plaintiff. Rather, plaintiff’s claim against the alter ego defendant is identical with that claimed by plaintiff against the already-named defendant. [¶] A claim against a defendant, based on the alter ego theory, is not itself a claim for substantive relief, e.g., breach of contract or to set aside a fraudulent conveyance, but rather, procedural, i.e., to disregard the corporate entity as a distinct defendant and to hold the alter ego individuals liable on the obligations of the corporation where the corporate form is being used by the individuals to escape personal liability, sanction a fraud, or promote injustice. [Citations.]” (Hennessey’s Tavern, Inc. v. American Air Filter Co. (1988) 204 Cal.App.3d 1351, 1358-1359 (Hennessey’s Tavern); accord. Shaoxing County Huayue Import & Export v. Bhaumik (2011) 191 Cal.App.4th 1189, 1198 (Shaoxing) [Liability can flow to an individual defendant where he or she uses the “corporate form … to escape personal liability, sanction a fraud, or promote injustice”].)

Two requirements must be met to invoke the alter ego doctrine: (1) “[T]here 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”; and (2) “there must be an inequitable result if the acts in question are treated as those of the corporation alone.” (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538 (Sonora).) Among the factors to be considered in determining whether a unity of interest and ownership exists for alter ego purposes, courts consider the (1) commingling of funds and other assets, (2) the holding out by one entity that it is liable for the debts of the other, (3) identical equitable ownership in the two entities, (4) use of the same offices and employees, (5) use of one entity as a mere shell or conduit for the affairs of the other, (6) inadequate capitalization, (7) disregard of corporate formalities, (8) lack of segregation of corporate records, and (9) identical directors and officers. (Id. at pp. 538-539.) “No one characteristic governs, but the courts must look at all the circumstances to determine whether the doctrine should be applied.” (Id. at p. 539.)

Plaintiffs are only “required to allege … ‘ultimate rather than evidentiary facts.’” (Rutherford, supra, 223 Cal.App.4th at p. 236.)

Here, the Complaint alleges alter ego liability against Defendants Schmukler and Zemel at paragraphs nine to 12 in the Complaint, i.e., the portions of the Complaint challenged by Defendants Schmukler and Zemel’s motion. These paragraphs allege that Defendants Schmukler and Zemel operate Lakeview Terrace as their alter ego, comingling assets, disregarding legal formalities, inadequately capitalizing Lakeview Terrace, using Lakeview Terrace as a mere shell, manipulating Lakeview Terrace’s assets and liabilities as to deplete Lakeview Terrace’s assets, using Lakeview Terrace to conceal these individual Defendants’ business activities, and using Lakeview Terrace to avoid personal obligations. (See Complaint, ¶¶ 9-11.)

A review of Plaintiffs’ cited authority shows that similar allegations of unity of interest were found by the court of appeal to be sufficiently alleged at the pleadings stage. (Compare Complaint, ¶¶ 10-11, with Rutherford, supra, 223 Cal.App.4th at pp. 235-236 [unity of interest sufficiently pleaded where “Rutherford alleged that Caswell dominated and controlled PDR; that a unity of interest and ownership existed between Caswell and PDR; that PDR was a mere shell and conduit for Caswell’s affairs; that PDR was inadequately capitalized; that PDR failed to abide by the formalities of corporate existence; [and] that Caswell used PDR assets as her own …”], and with First Western, supra, 267 Cal.App.2d at pp. 915-916 [unity of interest sufficiently pleaded through allegations that “that the individuals, especially including E. H. Bookasta, ‘dominated’ the affairs of the corporation; that a ‘unity of interest and ownership’ existed between respondent and the corporation; that the corporation is a ‘mere shell and naked framework’ for individual manipulations; that its income was diverted to the use of the individuals and respondent; that the corporation was, in effect, inadequately capitalized; that the corporation failed to issue stock and to abide by the formalities of corporate existence; [and] that the corporation is and has been insolvent …”].)

The Complaint also sufficiently alleges inequitable result as compared to Rutherford and First Western. (Compare Complaint, ¶ 12 [“Upholding the separate existence of Defendant Lakeview and allowing for Defendant Schmukler and Defendant Zemel to avoid personal liability would sanction fraud, or promote injustice or bring about an inequitable result”], with Rutherford, supra, 223 Cal.App.4th at p. 236 [inequitable result sufficiently pleaded through allegations “that recognizing the separate existence of PDR would promote injustice”], and with First Western, supra, 267 Cal.App.2d at p. 916 [inequitable result sufficiently pleaded through allegations that “adherence to the fiction of separate corporate existence would, under the circumstances, promote injustice”]; see also Shaoxing, supra, 191 Cal.App.4th at p. 1198 [Question is “whether justice and equity are best accomplished in a particular case, and fraud defeated, by disregarding the separate nature of the corporate form as to the claims in that case”].)

Last, the Court agrees with Plaintiffs that the “particularity required in pleading facts depends on the extent to which the defendant in fairness needs detailed information that can be conveniently provided by the plaintiffs; less particularity is required where the defendant may be assumed to have knowledge of the facts equal to that possessed by the plaintiff.” (Jackson v. Pasadena City School Dist. (1963) 59 Cal.2d 876, 879.) Here, based on the inherent nature of alter ego allegations, the persons alleged to be operating an entity as an alter ego are best positioned to possess or have knowledge of information supporting alter ego liability.

For all these reasons, the motion to strike is DENIED.

Demurrer

Legal Standard

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747; see Code Civ. Proc., § 430.10, subd. (e).) This device can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) To sufficiently allege a cause of action, a complaint must allege all the ultimate facts—that is, the facts needed to establish each element of the cause of action pleaded. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 212, superseded by statute as stated in Branick v. Downey Savings & Loan Assn. (2006) 39 Cal.4th 235, 242.) Thus, “[t]o survive a [general] demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) In testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-67.) A demurrer, however, “does not admit contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228, disapproved on other grounds, Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal.4th 1158, 1162.) The face of the complaint includes exhibits attached to the complaint. (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94.) If facts appearing in the exhibits contradict those alleged, the facts in the exhibits take precedence. (Holland v. Morse Diesel Intern., Inc. (2001) 86 Cal.App.4th 1443, 1447, superseded by statute on other grounds as stated in White v. Cridlebaugh (2009) 178 Cal.App.4th 506, 521.)

I.

First and Second Causes of Action, Breach of Written Contract and Breach of Oral Contract: OVERRULED.

“A contract is a voluntary and lawful agreement, by competent parties, for a good consideration, to do or not to do a specified thing.” (Robinson v. Magee (1858) 9 Cal. 81, 83.) “To prevail on a cause of action for breach of contract, the plaintiff must prove (1) the contract, (2) the plaintiff’s performance of the contract or excuse for nonperformance, (3) the defendant’s breach, and (4) the resulting damage to the plaintiff.” (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.) Implicit in the element of damage is that the defendant’s breach caused the plaintiff’s damage.” (Troyk v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1352, italics omitted.)

The first and second causes of action allege breach of contract on the same grounds but through different devices: either through a written or oral contract between HHH and Lakeview Terrace, HHH provided staffing services for Lakeview Terrace, with Lakeview failing to compensate HHH $49,934.50 for services rendered between November 16, 2022 and February 28, 2023. (Complaint, ¶¶ 21-25, 26-30; see Complaint, Ex. A, Supplemental Staffing Agreement [between HHH and Lakeview Terrace].)

In their demurrers, Defendants Schmukler and Zemel argue that the first and second causes of action are not sufficiently alleged. Defendants argue that the first cause of action is not sufficiently alleged against Schmukler and Zemel because these Defendants are not, on its face, parties to the written agreement between HHH and Lakeview Terrace. Defendants Schmukler and Zemel add that because the agreement has a full integration clause, Defendants Schmukler and Zemel cannot now be added to the terms of that agreement. Last, Defendants Schmukler and Zemel argue that the second cause of action is not sufficiently alleged because the only agreement at issue between the parties is the written agreement between HHH and Lakeview Terrace, which contradicts and supersedes any claim for breach of oral contract based on the same agreement. (Demurrer, pp. 5-6.)

In opposition, Plaintiffs argue that there is no dispute that the signatories to the agreement at issue here were HHH and Lakeview Terrace. Instead, Plaintiffs argue, liability for breach of contract is alleged against Defendants Schmukler and Zemel based on alter ego liability. Plaintiffs add that Defendants Schmukler and Zemel cite no authority for the proposition that the alter egos of a corporation could never be held liable for a corporation’s breach of a written agreement, and that California law permits the application of alter ego liability to shareholders liable for a corporation’s misconduct. Plaintiffs next argue that alter ego liability does not seek to add Defendants Schmukler and Zemel to the HHH-Lakeview Terrace agreement, but rather, applies a procedural mechanism to hold these Defendants liable for Lakeview Terrace’s breach of contract. Last, Plaintiffs argue that they may plead that oral breach of contract claim in the alternative to the written breach of contract claim given that the written HHH-Lakeview Terrace agreement may be found unenforceable as drafted. (Opp’n, pp. 3-5.)

In reply, Defendants Schmukler and Zemel argue that the alter ego allegations in the Complaint are not sufficiently alleged. These Defendants also argue that the alter ego doctrine should not be applied because it frustrates the purpose and use of a full integration clause in contracts. (Reply, p. 2.)

The Court finds in favor of Plaintiffs.

The ‘full integration clause’ argument misses the mark as to both the first and second causes of action. Even if the written HHH-Lakeview Terrace agreement has a full integration clause (see Complaint, Ex. A, § 10.6), the application of the alter ego liability doctrine does not affect the terms of that written agreement. As explained by the court of appeal: “A claim against a defendant, based on the alter ego theory, is not itself a claim for substantive relief, e.g., breach of contract or to set aside a fraudulent conveyance, but rather, procedural, i.e., to disregard the corporate entity as a distinct defendant and to hold the alter ego individuals liable on the obligations of the corporation where the corporate form is being used by the individuals to escape personal liability, sanction a fraud, or promote injustice. [Citations.]” (Hennessey’s Tavern, supra, 204 Cal.App.3d at pp. 1358-1359.) Here, the first and second causes of action are not ‘direct’ breach of contract claims against Defendants Schmukler and Zemel. Rather, through the application of the alter ego doctrine, the first and second causes of action seek to hold Defendants Schmukler and Zemel liable on the obligations of Lakeview Terrace where the corporate form is allegedly being used by Schmukler and Zemel to escape personal liability, sanction a fraud, or promote injustice.

The public policy argument also misses the mark. California courts have applied the alter ego liability doctrine in numerous cases—e.g., Rutherford and First Western—and the test for liability does not turn on the integration of the written agreement, but rather, on the individual’s conduct in relation to the alleged alter ego entity and injustice.

The Court notes that it has found that the alter ego allegations in the Complaint are sufficiently alleged. (See Motion to Strike discussion supra.)

Last, the Court determines that the first and second causes of action are properly pleaded in the alternative insofar as the second cause of action is alleged as a failsafe in case the written agreement alleged in the first cause of action is found not to be enforceable. (See Crowley v. Katleman (1994) 8 Cal. 4th 666, 690; Adams v. Paul (1995) 11 Cal.4th 583, 593 [Generally, complainants properly may plead, in the alternative, inconsistent facts or theories]; Penziner v. West American Finance Co. (1933) 133 Cal. App. 578, 582 [“[E]ach count stands on its own allegations, unaffected by those contained in other counts”]; see also Opp’n, p. 5 [making alternative claims arguments].)

Defendants Schmukler and Zemel’s demurrer is thus OVERRULED as to the Complaint’s first and second causes of action.

II.

Third Cause of Action, Breach of Implied Covenant of Good Faith and Fair Dealing: SUSTAINED, with leave to amend.

To prevail on a cause of action for breach of the implied covenant of good faith and fair dealing, the plaintiff must prove: (1) the existence of a contract between plaintiff and defendant; (2) plaintiff performed his contractual obligations or was excused from performing them; (3) the conditions requiring defendant’s performance had occurred; (4) the defendant unfairly interfered with the plaintiff’s right to receive the benefits of the contract; and (5) the plaintiff was harmed by the defendant’s conduct. (Merced Irr. Dist. v. County of Mariposa (E.D. Cal. 2013) 941 F.Supp.2d 1237, 1280 (Merced Irr.) [discussing California law].) Allegations must demonstrate defendant’s conduct for failure or refusal to discharge contractual responsibilities was a conscious and deliberate act, not an honest mistake, bad judgment or negligence. (Ibid.) “‘[T]he implied covenant of good faith and fair dealing is limited to assuring compliance with the express terms of the contract and cannot be extended to create obligations not contemplated by the contract.’” (Ragland v. U.S. Bank Nat. Assn. (2012) 209 Cal.App.4th 182, 206 [quoting Pasadena Live v. City of Pasadena (2004) 114 Cal.App.4th 1089, 1094].)

In their demurrer, Defendants Schmukler and Zemel argue that the Complaint’s third cause of action for breach of the implied covenant of good faith and fair dealing cannot be stated where the only harm alleged in the Complaint is the nonpayment of services to HHH, which is covered by the breach of contract claims, leaving no reason to resort to an implied covenant claim. (Demurrer, p. 6.)

In opposition, Plaintiffs argue that Defendants Schmukler and Zemel failed to cite California case law supporting their position, citing instead only a 2015 practice guide (Miller & Starr). Plaintiffs also argue that Defendants misinterpret the law, which does not require that breach of implied covenant claims simply “fill in” missing terms in a contract, but rather, focuses on the question of whether the defendant intentionally interfered with the plaintiff’s right to receive benefits of the contract. (Opp’n, pp. 5-6.)

In reply, Defendants Schmukler and Zemel cite to case law for the purpose that a plaintiff may not recover on a quasi-contract claim if the parties have an enforceable agreement regarding the same subject matter. Defendants add that Miller & Starr is a properly cited authority. Last, Defendants argue that because Plaintiffs secured entry of default against Lakeview Terrace on December 22, 2023, Plaintiffs should instead secure judgment against Lakeview Terrace and use post-judgment discovery to attempt to pierce the corporate veil rather than advancing alter ego liability at trial. (Reply, p. 3.)

The Court finds in favor of Defendants Schmukler and Zemel.

As alleged, the third cause of action is duplicative of the first and second causes of action. All three claims seek $49,931.50 in damages based on Defendants’ nonpayment and refusal to pay $49,931.50 to HHH per the HHH-Lakeview Terrace agreement. A general demurrer for sufficiency may be sustained against duplicative claims. (Palm Springs Villas II Homeowners Assn., Inc. v. Parth (2016) 248 Cal.App.4th 268, 290 [“a cause of action for breach of governing documents [that] appear[ed] to be duplicative of [a] cause of action for breach of fiduciary duty” is “recognized … as a basis for sustaining a demurrer”]; Rodrigues v. Campbell Industries (1978) 87 Cal.App.3d 494, 501 [demurrer was properly sustained without leave to amend as to cause of action that contained allegations of other causes and “thus add[ed] nothing to the complaint by way of fact or theory of recovery”]; Award Metals, Inc. v. Superior Court (1991) 228 Cal.App.3d 1128, 1135 [demurrer should have been sustained as to duplicative causes of action].)

Moreover, given that “[a] plaintiff may not … pursue or recover on a quasi-contract claim if the parties have an enforceable agreement regarding a particular subject matter” (Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1388), the Complaint fails to allege how “the defendant unfairly interfered with the plaintiff’s right to receive the benefits of the contract” and how “the plaintiff was harmed by the defendant’s conduct” (Merced Irr., supra, 941 F.Supp.2d at p. 1280). Otherwise stated, if the agreement between HHH and Lakeview Terrance covers damages arising from nonpayment of monies for services rendered by HHH, then the implied covenant claim cannot seek the same damages in the alternative and must instead arise from other damages caused by Defendants’ interference with Plaintiffs’ rights under the HHH-Lakeview Terrace agreement.

 It therefore follows that the third cause of action adds nothing to the Complaint because it seeks relief for damages arising from nonpayment of monies to HHH for services rendered in favor of Lakeview Terrace, the same relief sought in relation to the breach of contract claims, which cannot be pleaded in the alternative. (Compare Complaint, ¶¶ 33-34, with Complaint, ¶¶ 24-25, 29-30.)

Defendants Schmukler and Zemel’s demurrer is thus SUSTAINED as to the Complaint’s third cause of action, with leave to amend.

The Court notes, however, that it finds no merit to the argument that a plaintiff must wait until after he or she secures judgment against an entity defendant before being entitled to discovery or to conduct other proceedings against individuals alleged to have used the entity defendant as an alter ego. The scope of discovery is broad (Code Civ. Proc., § 2017.010), and Defendants Schmukler and Zemel cite no authority confining alter ego liability to post-trial proceedings. 

Conclusion

Defendants Yehuda Schmukler and Elliot Zemel’s Motion to Strike Portions of Plaintiff’s Complaint is DENIED.

Defendants Yehuda Schmukler and Elliot Zemel’s Demurrer to the Complaint is OVERRULED in part and SUSTAINED in part:

(1) OVERRULED as to the Complaint’s first and second causes of action; and

(2) SUSTAINED as to the Complaint’s third cause of action, with leave to amend.

Plaintiffs Hand-in-Hand Homecare, Inc. and Generous Hand Homecare SHALL file an amended pleading making modifications to the allegations supporting the third cause of action, if any, within 14 days of this ruling.