Judge: Armen Tamzarian, Case: 24STCV03427, Date: 2024-08-16 Tentative Ruling
Case Number: 24STCV03427 Hearing Date: August 16, 2024 Dept: 52
Defendants
Jeffrey C. Mayes and Druven, PC’s Demurrer and Motion to Strike Portions of
First Amended Complaint
Requests
for Judicial Notice
Defendants
Jeffrey C. Mayes and Druven, PC request judicial notice of one exhibit: the
docket of a federal action in the Central District of California and a “notice
of change of attorney business or contact information” filed in that action. (Horton Decl., Ex. D.) Plaintiff Radcliff Fairman LLP requests
judicial notice of one exhibit: an “amendment to registration of a limited
liability partnership” filed with the Secretary of State on April 4, 2023. (RJN, Ex. 1.)
Assuming
these exhibits are subject to judicial notice, they are not relevant or necessary to the court’s
analysis. (See Jordache Enterprises,
Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 748,
fn. 6; Appel v. Superior Court (2013)
214 Cal.App.4th 329, 342, fn. 6.) All
requests for judicial notice are denied.
Demurrer
Defendants
Jeffrey C. Mayes and Druven, PC demur to all 14 causes of action alleged by
plaintiffs Radcliff Fairman LLP and Jules G. Radcliff.
Claims
by Radcliff Fairman LLP
The
first amended complaint does not allege sufficient facts to constitute a cause
of action for the first through 12th causes of action and the 14th cause of
action. These causes of action are each
alleged solely by plaintiff Radcliff Fairman LLP. Each cause of action arises from allegations
that defendants interfered with property or other rights belonging to Radcliff
Fairman LLP because the firm formerly named “Radcliff Mayes LLP” “changed its
name to Radcliff Fairman LLP.” (FAC, ¶
7.)
The
first amended complaint alleges that, on March 23, 2023, Mayes “communicated
to” Jules Radcliff “his intention to terminate his business relationship with
Plaintiff stating that effective March 31, 2023 he is withdrawing as Partner of
Plaintiff and dissociating from the limited liability partnership.” (FAC, ¶ 7.)
It further alleges, “[t]he right of Mayes to participate in any aspect
of the business of Plaintiff ceased and terminated by operation of law
immediately upon his verbal notice to Plaintiff that he was withdrawing from
the partnership.” (Ibid.)
The
first amended complaint alleges that on March 24, Radcliff “approached attorney
Robert Fairman” to propose that he “become a Partner of Plaintiff.” (FAC, ¶ 7.)
Fairman agreed. (Ibid.) Plaintiff thus alleges that “between March
23, 2023, and March 31, 2023, there were 3 partners of” Radcliff Mayes
LLP. (Ibid.)
Defendants
demur on the basis that Radcliff Fairman LLP is not the real party in
interest. “[A] complaint filed by a
party who lacks standing is subject to demurrer.” (Cloud v. Northrop Grumman Corp.
(1998) 67 Cal.App.4th 995, 1004.) “Every
action must be prosecuted in the name of the real party in interest.” (CCP § 367.)
“[I]f the plaintiff is asserting only the rights of another, he
is presumably not the real party in interest.”
(Jasmine Networks, Inc. v. Superior Court (2009) 180 Cal.App.4th
980, 992.)
The
first amended complaint’s factual allegations show that Radcliff Fairman LLP is
not the real party in interest for these claims. As discussed above, the rights it sues upon
all derive from Radcliff Mayes LLP.
These causes of action rely on the premise that Radcliff Fairman LLP
succeeded to those rights because it added a third partner on March 24, before the
partnership would have otherwise ended upon Mayes’ withdrawal. (See Corrales v. Corrales (2011) 198
Cal.App.4th 221, 224 (Corrales) [“If a partnership consists of only two
persons, the partnership dissolves by operation of law when one of them departs”].)
Radcliff
Mayes LLP did not legally add Fairman as a third partner on March 24. “A person may become a partner only with the
consent of all of the partners.” (Corp.
Code, § 16401(i).) The first amended
complaint does not allege Mayes consented to Fairman becoming a partner. It alleges an agreement between Radcliff and
Fairman only. (FAC, ¶ 7.)
Plaintiffs
argue Radcliff could add a new partner without Mayes’s consent on March 24,
2023, because Mayes announced his intention to withdraw from the firm the day
before. Plaintiffs contend that, though
Mayes stated his withdrawal would be “effective March 31, 2023” (FAC, ¶ 7), his
rights to participate—including the requirement that he consent to adding a new
partner—ended immediately. Corporations
Code section 16601(1) provides, “A partner is dissociated from a partnership
upon the occurrence of … [t]he
partnership’s having notice of the partner’s express will to withdraw as a
partner or on a later date specified by the partner.”
Assuming
plaintiffs are correct that Mayes’s rights terminated immediately on March 23,
that would not mean Radcliff Fairman LLP succeeded to Radcliff Mayes LLP’s
rights. If so, when Mayes’s rights
terminated, that did not give Radcliff the power to unilaterally operate
Radcliff Fairman LLP as a one-person partnership. “[B]y definition, a partnership must consist
of at least two persons.” (Corrales,
supra, 198 Cal.App.4th at p. 227.) One
of two things happened: (1) Radcliff Mayes LLP dissolved on March 23, so
Fairman could not join the defunct partnership on March 24; or (2) Radcliff
Mayes LLP dissolved on March 31, so Fairman could not join it on March 24
without Mayes’s consent. Either way,
Fairman did not legally join the partnership Radcliff Mayes LLP. Radcliff Mayes LLP never had three partners. Radcliff Fairman LLP is a different
partnership that never included Mayes.
Radcliff Fairman LLP is not the real party in interest for these causes
of action.
13th
Cause of Action: Stalking
The first amended complaint does not
allege sufficient facts for this cause of action. “Under California law, a defendant commits
the tort of stalking by ‘engag[ing] in a pattern of conduct the intent of which
was to follow, alarm, place under surveillance, or harass the plaintiff.’ [Citation.]
The pattern of conduct must lead the plaintiff either to ‘reasonably
fear[ ]’ for his own safety or that of an immediate family member, or to ‘suffer
substantial emotional distress’ when a reasonable person would also suffer
substantial emotional distress.” (Thunder
Studios, Inc. v. Kazal (9th Cir. 2021) 13 F.4th 736, 743.) The “pattern of conduct” must include either that
defendant (A) “made a credible threat with either (i) the intent to place the
plaintiff in reasonable fear for his or her safety, or the safety of an
immediate family member, or (ii) reckless disregard for the safety of the
plaintiff or that of an immediate family member” (Civ. Code, § 1708.7(a)(3)(A))
or (B) “violated a restraining order” (id., subd. (a)(3)(B)).
The first amended complaint alleges
that in October and November 2023, Jules Radcliff’s counsel “admonished”
defendants that they “may not contact Plaintiff JGR or” Radcliff Fairman LLP
“or any of its principals … for any purpose, by any means, and that all such
communications must be directed through counsel representing Plaintiffs.” (FAC, ¶ 87.)
“Defendants … were specifically instructed that any attempt to contact”
plaintiffs “would constitute stalking under the California stalking
statute.” (Ibid.) The first amended complaint further alleges,
“Notwithstanding the aforesaid admonition,” Mayes “sent emails and letters
directly to [Radcliff], demanding information and money, threatening litigation
and making accusations of wrongdoing, all in a blatant attempt to harass and
annoy” Radcliff. (Id., ¶
88.)
The
first amended complaint does not allege any pattern of conduct that included a
“credible threat” under the stalking statute. It alleges Mayes “threatened litigation.” (FAC, ¶ 88.)
It does not allege Mayes surveilled or followed Radcliff or threatened
his safety. Telling someone that any future contact would
constitute stalking does not make it so.
Based on the facts alleged, plaintiff could not have “reasonably
fear[ed] for his … safety or the safety of his … immediate family.” (Civ. Code, § 1708.7(b)(2).)
Plaintiffs’
opposition does not address this cause of action.
Motion
to Strike
Defendants Jeffrey C. Mayes and
Druven, PC move to strike several portions of the first amended complaint. The court will sustain defendants’ demurrer
to the entire first amended complaint.
The motion to strike is therefore moot.
Disposition
Defendants
Jeffrey C. Mayes and Druven, PC’s demurrer to plaintiffs’ entire first amended
complaint is sustained with 20 days’ leave to amend.
Defendants’
motion to strike portions of the first amended complaint is denied as moot.
Requests
for Judicial Notice
Cross-defendants Radcliff Fairman
LLP and Jules G. Radcliff request judicial notice of five exhibits. Assuming they are subject to judicial notice,
they are not relevant or necessary to the
court’s analysis. (See Jordache
Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th
739, 748, fn. 6; Appel v. Superior Court
(2013) 214 Cal.App.4th 329, 342, fn. 6.)
The requests for judicial notice are denied.
Judgment
on the Pleadings
Cross-defendants
Radcliff Fairman LLP and Jules G. Radcliff move for judgment on the pleadings
on all nine causes of action alleged in the cross-complaint by
cross-complainant Jeffrey C. Mayes.
1st
Cause of Action: Breach of Oral Partnership Agreement
Cross-defendants move for judgment
on the pleadings on this cause of action on the basis that Mayes does not
allege the existence of an oral partnership.
He does. The cross-complaint
alleges Radcliff, Mayes, and non-party Stacey R. Aldstadt formed a law
partnership in 2020. (Cross-Comp., ¶
11.) “A written partnership agreement
was
drafted but MAYES never received a fully executed copy. He is informed and believes, and thereon
alleges, the partnership agreement was not fully executed by all three
partners.” (Ibid.) The cross-complaint then alleges Aldstadt
soon withdrew from the firm, and “Mayes and Radcliff agreed to rename the firm”
Radcliff Mayes. (Id., ¶ 12.) “They discussed drafting a written
partnership agreement but no agreement was prepared or executed. On such basis, Mayes alleges that [Radcliff
Mayes] was established pursuant to an oral partnership agreement between him
and Radcliff.” (Id., ¶ 13.) At this stage, these allegations suffice to
establish an oral partnership agreement.
2nd
Cause of Action: Breach of Fiduciary Duty
Mayes alleges sufficient facts to
constitute breach of fiduciary duty. Cross-defendants
move for judgment on the pleadings on the basis that this claim relies on the
oral partnership agreement. The court
finds Mayes adequately alleges such an agreement. Cross-defendants also contend that any duty
of loyalty terminated on March 23, 2023.
The cross-complaint alleges both breach of the “duty of loyalty and duty
of care.” (Cross-Comp., ¶ 35.) Assuming the duty of loyalty ended, a duty of
care extends to “the conduct and the winding up of the partnership
business.” (Corp. Code, §
16404(c).) Furthermore, the
cross-complaint alleges Radcliff breached fiduciary duties to Mayes in various
ways “[t]hroughout the roughly three (3) years of the Partnership,” including
before dissolution. (Cross-Comp., ¶ 38.)
3rd
Cause of Action: Intentional Interference with Contractual Relations
Mayes alleges sufficient facts for this cause of
action. “Tortious interference with
contractual relations requires ‘(1) the existence of a valid contract between
the plaintiff and a third party; (2) the defendant’s knowledge of that
contract; (3) the defendant’s intentional acts designed to induce a breach or
disruption of the contractual relationship; (4) actual breach or disruption of
the contractual relationship; and (5) resulting damage.’ ” (Ixchel Pharma, LLC v. Biogen, Inc.
(2020) 9 Cal.5th 1130, 1141.)
Cross-defendants argue that Mayes does not identify
“the contracts at issue … by date, parties, etc.” (Motion, p. 8.) Cross-defendants provide no authority for the
proposition that the pleading must specifically identify the contracts. The cross-complaint alleges cross-defendants
interfered with Mayes’s relationships with “at least two of his current
clients” by, among other things, making “derogatory comments about Mayes, his
new law firm and the quality of legal services these clients should expect to receive.” (Cross-Comp., ¶ 42.) These allegations suffice.
Cross-defendants also argue, “the act of collecting
on accounts receivable cannot possibly be the basis for an interference cause
of action.” (Motion, p. 8.) Assuming that is correct, this cause of
action also alleges interference via calling Mayes’s clients and making
“derogatory comments about Mayes” and his firm.
(Cross-Comp., ¶ 42.) This motion
therefore would not dispose of the entire cause of action as required. (See Southern
California Pizza Co., LLC v. Certain Underwriters at Lloyd’s, London etc. (2019)
40 Cal.App.5th 140, 154.)
4th
Cause of Action: Intentional Interference with Prospective Economic Relations
The
cross-complaint alleges sufficient facts for this cause of action. “Intentional
interference with prospective economic advantage has five elements: (1) the
existence, between the plaintiff and some third party, of an economic
relationship that contains the probability of future economic benefit to the
plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentionally
wrongful acts designed to disrupt the relationship; (4) actual disruption of
the relationship; and (5) economic harm proximately caused by the defendant’s
action.” (Roy Allan Slurry Seal, Inc.
v. American Asphalt South, Inc. (2017) 2 Cal.5th 505, 512.)
Cross-defendants
argue, “Mayes fails to plead an economic relation with any identified third
party.” (Motion, p. 8.) Cross-defendants also argue, “Mayes does not
plead any ‘wrongful act’ that disrupted any specific relationship.” (Id., p. 9.) The court rejects these arguments for the
same reasons as the third cause of action.
Calling Mayes’s current clients and making “derogatory comments” about
him (Cross-Comp., ¶ 42) that “were untrue” (id., ¶ 50) is independently
wrongful.
5th
Cause of Action: Negligent Interference with Prospective Economic Relations
The cross-complaint alleges
sufficient facts for this cause of action.
Cross-defendants repeat the same arguments the court rejected above.
6th
Cause of Action: Trade Libel
The cross-complaint alleges
sufficient facts for this cause of action.
Trade libel requires “[a] false or misleading statement [that] (1) must
specifically refer to the plaintiff’s product or business, and (2) must clearly
derogate that product or business.” (Hartford
Casualty Ins. Co. v. Swift Distribution, Inc. (2014) 59 Cal.4th 277,
291.)
Cross-defendants
argue, “[A]ssuming derogatory statements were made, those statements were not
alleged to be false, and in either case there are no specifics alleged (names,
dates, words used, etc.)” (Motion, p.
9.) The cross-complaint does allege they
were false: “The statements were untrue, Cross-Defendants knew the statements
were untrue and/or acted with reckless disregard for the truth or falsity of
the statements.” (Cross-Comp., ¶
50.) Cross-defendants provide no
authority that pleading trade libel requires specifically alleging details such
as names, dates, or words used. “[S]lander
can be charged by alleging the substance of the defamatory statement.” (Okun v. Superior Court (1981) 29
Cal.3d 442, 458.) The cross-complaint
alleges the substance of the statements: “Radcliff made derogatory comments
about Mayes, his new law firm and the quality of legal services these clients
should expect to receive.” (Cross-Comp.,
¶ 28.)
7th,
8th, and 9th Causes of Action
Cross-defendants contend Mayes lacks
standing to bring these claims because he “dissociated” from the partnership. He did not “dissociate” from the partnership
because his withdrawal dissolved the partnership. “If a partnership consists of only two
persons, the partnership dissolves by operation of law when one of them departs.” (Corrales v. Corrales (2011) 198
Cal.App.4th 221, 224.) The partnership
could not add a third partner without Mayes’s consent. But even if Mayes merely dissociated from the
partnership (leaving Radcliff and Fairman as partners), cross-defendants
provide no authority that prohibits Mayes from bringing these claims against
the partnership. A partner can sue a
partnership or another partner to enforce various rights. (Corp. Code, § 16405(b); Second Measure,
Inc. v. Kim (N.D. Cal. 2015) 143 F.Supp.3d 961, 973.) And cross-defendants give no reason why a
former partner could not sue to enforce rights he held while he was a partner,
such as the right to accounting.
Cross-defendants also argue these
claims arise from the oral partnership agreement and therefore fail along with
the first cause of action. The
cross-complaint adequately alleges an oral agreement as discussed above.
Motion
to Strike
Cross-defendants Radcliff Fairman
LLP and Jules G. Radcliff move to strike several portions of the
cross-complaint.
The
motion is untimely. A party may file a
motion to strike “within the time allowed to respond to a pleading.” (CCP § 435(b)(1).) “A party served with a
cross-complaint may within 30 days after service move, demur, or otherwise
plead to the cross-complaint in the same manner as to an original complaint.” (CCP § 432.10.)
Mayes filed
proof of service of the cross-complaint on May 9, 2024. Cross-defendants filed this motion on July
17, more than 60 days later. Cross-defendants’
reply concedes the motion is untimely but asks the court to exercise its
discretion to consider the motion under Code of Civil Procedure 436. The court declines to do so.
Disposition
Cross-defendants
Radcliff Fairman LLP and Jules G. Radcliff’s motion for judgment on the
pleadings is denied.
Cross-defendants’
motion to strike portions of the cross-complaint is denied.