Judge: Barbara M. Scheper, Case: 21STCV46587, Date: 2022-12-19 Tentative Ruling
Case Number: 21STCV46587 Hearing Date: December 19, 2022 Dept: 30
Calendar No.
ATM Professional,
Inc. vs. Repiping.com Inc., et. al., Case No. 21STCV46587
Tentative Ruling
re: Defendant’s Motion for Judgment on
the Pleadings
Defendants Repiping.com Inc. and
Henrik Sargystan (collectively, Defendants) move for judgment on the pleadings as
to the complaint of Plaintiff ATM Professional, Inc. (Plaintiff). The unopposed
motion is granted.
A motion for judgment on the pleadings may be made
after the time to demur has expired and an answer has been filed. (Code Civ.
Proc., § 438, subd. (f).) A motion by a defendant may be made on the grounds
that the complaint or cross-complaint “does not state facts sufficient to
constitute a cause of action against that defendant.” (Code Civ. Proc., § 438,
subd. (c)(B)(ii).) A motion for judgment on the pleadings has the same function
as a general demurrer but is made after the time for demurrer has expired.
Except as provided by statute, the rules governing demurrers apply. (Cloud v. Northrop Grumman Corp. (1998)
67 Cal.App.4th 995, 999.)
Like a general demurrer, “ordinarily, a [motion for
judgment on the pleadings] does not lie as to a portion of a cause of action,
and if any part of a cause of action is properly pleaded, the [motion] will be
overruled.” (Fire Ins. Exchange v.
Superior Court (2004) 116 Cal.App.4th 446, 452.) In considering a motion
for judgment on the pleadings, courts consider whether properly pled factual
allegations—assumed to be true and liberally construed—are sufficient to
constitute a cause of action. (Stone
Street Capital, LLC v. Cal. State Lottery Com’n (2008) 165 Cal.App.4th 109,
116.)
Defendant Henrik Sargystan
(Sargystan) is the sole owner, director, and officer of the “pot shop” Herbal
Relief Caregivers, Inc. (HRC), and of the plumbing supply store Repiping.com,
Inc. (Comp. ¶ 2.) Plaintiff contracted with HRC to install and operate an ATM
at HRC’s store in Sun Valley, California. (Comp. ¶ 4.)
In January 2020, Defendants
installed a competing ATM in HRC’s store, using HRC’s cash to stock the
competing ATM with money for withdrawal. (Comp. ¶ 5.) Defendants also
periodically disconnected Plaintiff’s ATM. (Comp. ¶ 6.) On May 7, 2020,
Defendants then permanently disconnected and removed Plaintiff’s ATM. (Comp. ¶
7.) It is alleged that Defendants diverted and laundered over $1,000,000 of
HRC’s cash to Defendant Repiping.com through their competing ATM. (Comp. ¶ 8.)
Plaintiff seeks damages, punitive damages, and attorney’s fees for Fraudulent
Transfer against Defendants.
Defendants move for judgment on the
basis that Plaintiff lacks a right of action for common law fraudulent transfer
against them because they are not judgment creditors of Plaintiff. Defendants
also argue that Plaintiff has failed to state facts to constitute a claim for
statutory fraudulent transfer.
Under the Uniform Fraudulent
Transfer Act (UFTA), Civ. Code §§ 3439, et seq., “A transfer of assets made by a debtor is fraudulent as to a creditor, whether
the creditor's claim arose before or after the transfer, if the debtor made the
transfer (1) with an actual intent to hinder, delay or defraud any creditor, or
(2) without receiving reasonably equivalent value in return, and either (a) was
engaged in or about to engage in a business or transaction for which the
debtor's assets were unreasonably small, or (b) intended to, or reasonably
believed, or reasonably should have believed, that he or she would incur debts
beyond his or her ability to pay as they became due.” (Cortez v. Vogt
(1997) 52 Cal.App.4th 917, 928.) “[T]he UFTA
is not the exclusive remedy by which fraudulent conveyances and transfers may
be attacked. They may also be attacked by . . . a common law action.” (Macedo
v. Bosio (2001) 86 Cal.App.4th 1044, 1051.)
A “creditor” is defined by the UFTA as “a
person that has a claim, and includes an
assignee of a general assignment for the benefit of creditors, as defined in
Section 493.010 of the Code of Civil Procedure, of a debtor.” (Civ. Code, §
3439.01, subd. (c).) “ ‘Debtor’ means a person that
is liable on a claim.” (Civ. Code, § 3439.01, subd. (e).) The Court agrees with
Defendants that Plaintiff has failed to allege that it is a creditor of
Defendants.
Defendants also move for judgment
on the pleadings on the basis that Plaintiff has failed to add HRC, an
indispensable party.
“A person who is subject to service of process and whose
joinder will not deprive the court of jurisdiction over the subject matter of
the action shall be joined as a party in the action if (1) in his absence
complete relief cannot be accorded among those already parties or (2) he claims
an interest relating to the subject of the action and is so situated that the
disposition of the action in his absence may (i) as a practical matter impair or impede his ability to
protect that interest or (ii) leave any of the persons already parties subject
to a substantial risk of incurring double, multiple, or otherwise inconsistent
obligations by reason of his claimed interest. If he has not been so joined,
the court shall order that he be made a party.” (Code Civ. Proc. § 389,
subd. (a).)
“If a person as described in paragraph (1) or (2) of
subdivision (a) cannot be made a party, the court shall determine whether in
equity and good conscience the action should proceed among the parties before
it, or should be dismissed without prejudice, the absent person being thus
regarded as indispensable. The factors to be considered by the court include:
(1) to what extent a judgment rendered in the person's absence might be
prejudicial to him or those already parties; (2) the extent to which, by
protective provisions in the judgment, by the shaping of relief, or other
measures, the prejudice can be lessened or avoided; (3) whether a judgment rendered
in the person's absence will be adequate; (4) whether the plaintiff or
cross-complainant will have an adequate remedy if the action is dismissed for
nonjoinder.” (Code Civ. Proc. § 389, subd. (b).)
The motion is unopposed, and so is
granted.