Judge: Armen Tamzarian, Case: 23STCV23861, Date: 2024-02-29 Tentative Ruling

Case Number: 23STCV23861    Hearing Date: February 29, 2024    Dept: 52

(1) Defendants Randolf L. Turrow and Feature Pro Inc.’s Demurrer;

(2) Defendants Jason Schoener and Ten Key Films, Inc.’s Demurrer and Motion to Strike

(1) Demurrer by Turrow and Feature Pro Inc.

            Defendants Randolf L. Turrow and Feature Pro Inc. demur to plaintiffs George Gamble and Nancy Gamble’s first through third, fifth, and ninth causes of action.

            Turrow cannot demur because the clerk has entered his default.  On November 16, 2023, the clerk entered Turrow’s default pursuant to plaintiffs’ request.  “The entry of a default cuts off the right to file pleadings and motions, and the right to notices and the service of pleadings.”  (Steven M. Garber & Associates v. Eskandarian (2007) 150 Cal.App.4th 813, 823.)  “After a default, a defendant is ‘ “out of court” ’ and cannot take any further steps in the cause affecting the plaintiff’s right of action until the default is set aside in a proper proceeding.”  (Rios v. Singh (2021) 65 Cal.App.5th 871, 887.) 

Turrow filed this demurrer after the clerk entered his default.  He has not moved for relief from his default.  The court will therefore strike Turrow’s demurrer. 

            The clerk has not, however, entered Feature Pro Inc.’s default.  Plaintiff requested entry of its default on January 12—a week after it filed this demurrer.  The court will therefore consider Feature Pro Inc.’s demurrer. 

Alleged Contract

Feature Pro argues plaintiffs’ first through third, fifth, and ninth causes of action fail because they “are based on alleged contract(s) that are not attached nor are they set forth ad hoc verba.”  (Demurrer, p. 5.)  A defendant may demur when, “In an action founded upon a contract, it cannot be ascertained from the pleading whether the contract is written, is oral, or is implied by conduct.”  (CCP § 430.10(g).)  This action is not “founded upon a contract.”  Plaintiffs’ complaint includes references to contracts (¶¶ 19-21, 28, 37-40) but does not assert any cause of action for breach of contract.  It alleges only tort claims. 

Fraud

            Plaintiffs do not allege sufficient facts for the first three causes of action against Feature Pro Inc.  Fraud generally requires: (1) a misrepresentation; (2) knowledge of falsity; (3) an intent to defraud; (4) justifiable reliance; and (5) damages.  (Ryder v. Lightstorm Entertainment, Inc. (2016) 246 Cal.App.4th 1064, 1079.)  The first cause of action for promissory fraud requires “(1) the defendant made a representation of intent to perform some future action, i.e., the defendant made a promise, and (2) the defendant did not really have that intent at the time that the promise was made, i.e., the promise was false.”  (Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1060.)  The second cause of action for fraudulent concealment requires that, instead of making a false representation, the defendant concealed or suppressed a material fact that it had a duty to disclose to the plaintiff.  (Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248.) 

            Plaintiffs do not allege their first through third causes of action with specificity as required.  “[F]raud must be pled specifically.”  (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)  “ ‘This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.’ ”  (Ibid.) 

            The complaint does not specifically allege how, when, where, and by what means the representations were tendered.  It makes vague allegations that Turrow and Feature Pro made various representations or concealed facts “[w]hile discussing Plaintiffs’ potential investment” (¶ 14) and “during these initial discussions” (¶¶ 15, 17).  These allegations do not meet the heightened requirement for pleading fraud.

            The complaint also does not specifically allege the intentional misrepresentations by Turrow and Feature Pro.  It alleges they “represented to Plaintiffs that certain facts relating to the market prospects for the Film were true” (¶ 55) and “that certain facts relating to Plaintiffs’ ability to recoup the amount Defendant Turrow requested that Plaintiffs invest in the Film were true” (¶ 56).  The complaint thus uses the phrase “certain facts” instead of identifying those facts. 

Disposition

            Defendant Randolf L. Turrow’s demurrer is hereby stricken.             

Defendant Feature Pro Inc.’s demurrers to plaintiffs’ first, second, and third causes of action are sustained with 20 days’ leave to amend.  Defendant Feature Pro Inc.’s demurrers to plaintiffs’ fifth and ninth causes of action are overruled.

(2) Demurrer and Motion to Strike by Schoener and Ten Key Films, Inc.

            Defendants Jason Schoener and Ten Key Films, Inc. demur to plaintiffs’ sixth and ninth causes of action.

6th Cause of Action: Aiding and Abetting Conversion

            Plaintiffs do not allege sufficient facts for this cause of action.  “ ‘ “Liability may ... be imposed on one who aids and abets the commission of an intentional tort if the person (a) knows the other’s conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other to so act or (b) gives substantial assistance to the other in accomplishing a tortious result and the person’s own conduct, separately considered, constitutes a breach of duty to the third person.” ’ ”  (IIG Wireless, Inc. v. Yi (2018) 22 Cal.App.5th 630, 653–654.)

Plaintiffs’ complaint makes few allegations concerning Schoener and Ten Key Films.  The only relevant allegations are: “With substantial, knowing assistance from Defendants Schoener, Ten Key and Roven, Defendant Turrow appropriated a portion of the petty cash funds.”  (¶ 30.)  “By exercising control over the Film’s production accounting processes and procedures, Defendants Schoener and Ten Key gave substantial assistance and encouragement to Defendants Turrow and Featurepro in their conversion against Plaintiffs.”  (¶ 86.)  “Defendants Schoener and Ten Key subsequently agreed with Defendants Turrow and Featurepro and intended that the conversion against Plaintiffs be committed.”  (¶ 112.)

The complaint does not allege what Schoener and Ten Key Films did to give substantial assistance and encouragement to the purported conversion.  It repeats those words as conclusions of fact and law.  The only factual allegation of what Schoener and Ten Key Films did is that they “exercis[ed] control over the Film’s production and accounting processes and procedures.”  (¶ 86.)  That is insufficient.  “ ‘Mere knowledge that a tort is being committed and the failure to prevent it does not constitute aiding and abetting.’ ”  (Austin B. v. Escondido Union School Dist. (2007) 149 Cal.App.4th 860, 879.) 

The case of Nasrawi v. Buck Consultants LLC (2014) 231 Cal.App.4th 328 is instructive.  There, the court held plaintiffs alleged sufficient facts for aiding and abetting a tort where they “alleged that Buck and Loeb gave ‘substantial encouragement and assistance’ to the Association’s breach by (1) failing to disclose and warn about the consequences of the Association’s practices, (2) verifying the actuarial soundness of those practices, (3) and knowingly and falsely representing to trust fund beneficiaries at public meetings between 2005 and 2009 that the Association’s practices were actuarially sound.”  (Id. at p. 344.)  Here, plaintiffs make only the conclusory allegation of “substantial encouragement and assistance” without alleging any underlying facts that constitute encouragement and assistance. 

9th Cause of Action: Civil Conspiracy

Plaintiffs do not allege sufficient facts for this cause of action against Schoener and Ten Key Films.  “The elements of a civil conspiracy are (1) the formation of a group of two or more persons who agreed to a common plan or design to commit a tortious act; (2) a wrongful act committed pursuant to the agreement; and (3) resulting damages.”  (City of Industry v. City of Fillmore (2011) 198 Cal.App.4th 191, 212.)

Plaintiffs allege Schoener and Ten Key “were aware” of Turrow and Feature Pro’s “plan[] to commit a conversion” (¶ 111) and “agreed … and intended that the conversion against Plaintiffs be committed” (¶ 112).  But they allege no act by Schoener and Ten Key to do anything pursuant to the alleged agreement.  As with aiding and abetting conversion, that they “exercise[ed] control over the Film’s production accounting processes and procedures” (¶ 86) is not a sufficient allegation of an act committed pursuant to an agreement to commit a tort. 

Motion to Strike

            Defendants Jason Schoener and Ten Key Films, Inc. move to strike five portions of plaintiffs’ complaint.  Schoener and Ten Key Films have successfully demurred to both causes of action alleged against them.  Their motion to strike is therefore moot.

Disposition

            Defendants Jason Schoener and Ten Key Films, Inc.’s demurrers to plaintiffs’ sixth and ninth causes of action are sustained with 20 days’ leave to amend. 

Defendants Jason Schoener and Ten Key Films, Inc.’s motion to strike portions of plaintiffs’ complaint is moot.