Judge Bruce G. Iwasaki, Case Number: 23STCV15232, Date: 2023-10-26 Tentative Ruling

This action arises over a dispute on a promise to transfer stock in Defendant Partanna Global Inc., (Partanna) by Defendant Sam Marshall (Marshall) to Plaintiff James Webster (Plaintiff or Webster). On June 29, 2023, Plaintiff filed a Complaint alleging causes of action for (1.) breach of contract, (2.) specific performance, (3.) interference with contractual relations, (4.) inducing a breach of contract, (6.) implied in fact contract, (7.) promissory estoppel, (8.) unjust enrichment, and (9.) quantum meruit.

Defendants Marshall and Partanna (Defendants) demur to all the causes of action in the Complaint based a failure to state a claim. Plaintiff opposes the demurrer.

The demurrer is overruled as to the first, third, fourth, fifth, sixth, seventh, and ninth causes of action; the demurrer is sustained with leave to amend as to the second cause of action to allege specific performance as remedy and sustained without leave to amend as to the eighth cause of action for unjust enrichment.

Defendants’ request for judicial notice of Exhibits 1-2 are denied. (Evid. Code, § 452.) Defendants request for judicial notice of Exhibit 1 – the November Advisor Agreement – relies on Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743. As explained in Travelers Indemnity Company of Connecticut v. Navigators Specialty Insurance Company (2021) 70 Cal.App.5th 341: “Scott is inapposite because the document being judicially noticed in that case was a government document and was accordingly governed by Evidence Code section 452, subdivision (c), under which judicial notice may be taken of ‘[o]fficial acts of the legislative, executive, and judicial departments of the United States and of any state of the United States.’ (Scott, at p. 752, 154 Cal.Rptr.3d 394.) Scott does not provide authority allowing a court to take judicial notice of a contract between private parties.” (Id. at 354.)

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (Code Civ. Proc. § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.) The court “ ‘ “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law . . . .” ’ ” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.) In applying these standards, the court liberally construes the complaint to determine whether a cause of action has been stated. (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726, 733.)

Defendants demur to the first cause of action on the grounds that Plaintiff Webster fails to allege a any enforceable written contract.

To prevail on a breach of contract cause of action, a plaintiff must prove: (1) the existence of a contract; (2) plaintiff's performance or excuse for nonperformance; (3) defendant's breach; and (4) resulting damages to plaintiff. (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1388.)

Here, the Complaint alleges on March 6, 2023, Marshall entered into a written transfer agreement (March 6 Agreement) with Plaintiff whereby “Marshall [agreed] to arrange for [Plaintiff] to have a direct or indirect interest in 2% of the total capital stock of Partanna.” (Compl., ¶ 27.) The parties subsequently negotiated the form of interest that would be transferred; the parties agreed that there would a direct transfer of shares of 75,000 shares and the remaining 2% interests would likely come from Plaintiff’s acquisition of an LLC, which was controlled by Marshall and that owned a portion of Partanna. (Compl., ¶ 30.) Partanna had confirmed that the initial direct transfer of 75,000 shares was permitted under Partanna’s Right of First Refusal and Co-Sale Agreement (dated December 2, 2022). (Compl., ¶ 36.) The Complaint alleges that Defendant Marshall breached this March 6 Agreement by failing to effectuate the transfer of ownership as required under the parties’ contract. (Compl., ¶¶ 82-83.)

Defendants first argue that this cause of action fails because the alleged contract lacks valid consideration. Although the March 6 Agreement contains language that it is “[f]or good and valuable consideration,” Defendant notes that this is the only language addressing consideration in exchange for the stock transfer. In response to the language in the March 6 Agreement, Defendant argues that this stock transfer is simply additional consideration for Plaintiff’s performance of the November Advisor Agreement. (Compl., ¶ 11.) Thus, according to Defendants, the March 6 Agreement is nothing more than a gift without consideration. (See, e.g., Dow v. River Farms Co. of Cal. (1952) 110 Cal.App.2d 403, 408 [holding that a promise to make a gift is unenforceable for lack of consideration]; Passante v. McWilliam (1997) 53 Cal.App.4th 1240 [“[T]he stock promise to the attorney was merely a promise to make a gift, and therefore, it was unenforceable. Past consideration cannot support a contract; consideration must result from a bargain.”].)

The Complaint adequately alleges that the consideration provided by Webster was the expanded scope of services requested beyond what was negotiated for in the November Advisor Agreement. (Compl., ¶¶ 13, [“Because Mr. Marshall and Partanna had asked Mr. Webster to expand the scope of his services, he requested two percent (2%) of Partanna’s stock as compensation.”], 15 [“Based on these repeated representations, Mr. Webster continued to provide services beyond the scope of services in the November 30 Advisor Agreement.”].) The Complaint also alleges that Plaintiff provided ongoing services after signing the March 6 Agreement as well. (Compl., ¶¶ 31-32.) Based on the foregoing allegations, the Complaint adequately alleges consideration for the March 6 Agreement.

Second, Defendants argue that the March 6 Agreement is merely an agreement to agree. They contend that the March 6 Agreement merely outlines the terms of a future arrangement but does not create a binding enforceable agreement.

“Preliminary negotiations or agreements for future negotiations—so-called agreements to agree—are not enforceable contracts.” (City of Oakland v. Department of Finance (2022) 79 Cal.App.5th 431, 447.) Generally, “where any of the essential elements of a promise are reserved for the future agreement of both parties, no legal obligation arises . . ..” (Copeland v. Baskin Robbins U.S.A. (2002) 96 Cal.App.4th 1251, 1256.)

“[T]he enforceability of a contract containing a promise to agree depends upon the relative importance and the severability of the matter left to the future; it is a question of degree and may be settled by determining whether the indefinite promise is so essential to the bargain that inability to enforce that promise strictly according to its terms would make unfair the enforcement of the remainder of the agreement. (Citations.) Where the matters left for future agreement are unessential, each party will be forced to accept a reasonable determination of the unsettled point or if possible the unsettled point may be left unperformed and the remainder of the contract be enforced.” (Coleman Engineering Co. v. North Am. Aviation, Inc. (1966) 65 Cal.2d 396, 405.)

Here, the Court finds that the Complaint alleges the essential elements of the contract between the parties. That is, there was an agreement to exchange Plaintiff’s services for payment in the form of a stock transfer of ownership. To be sure, the March 6 Agreement leaves to future negotiations the form in which the 2% ownership interest will take to effectuate the performance, but, at the pleading stage, this does not render the agreement unenforceable.

Finally, Defendants argue that the March 6 Agreement violated supposed fiduciary duties that Plaintiff Webster purportedly owed to Partanna and is thus unenforceable.

This argument turns on the resolution of factual issues. Defendants seek a determination at the pleading stage that the March 6 Agreement was not “fair and reasonable” to Partanna or Marshall. Encompassed in this assertion are the unpleaded facts that “Webster did not advise Partanna or Marshall of” certain issues regarding the March 6 Agreement. (Dem., 15:10-11.) At the pleading stage this argument is not well taken.

Further, the Complaint alleges no facts to support the existence of an attorney-client relationship between Webster and Defendants – which is the basis of Defendants’ claim of a fiduciary relationship. In asserting that there was an attorney-client relationship with Defendants, Defendants argue “that Webster functioned as legal counsel because the work Webster performed had a distinctly legal character: developing “an intellectual property strategy,” (Compl. ¶ 12.); selecting outside “expert counsel,” (Id.); ensuring “fully negotiated NDAs were signed with key partners,” (Id. at ¶ 17)—typical activities for in-house counsel. Webster even asked to be paid through his company “Litigation Strategies.” (Compl., Ex. 9, p. 1.)

The Opposition denies the existence of an attorney-client relationship and further asserts the cherry-picked allegations do not support finding the existence of an attorney-client relationship. Indeed, the Complaint indicates that both parties were represented by their own counsel in this negotiation, undermining the argument that Plaintiff was acting in a representative capacity for Marshall or Partanna. (Opp. 7:5-8:12 [Compl., ¶¶ 15, 18-21, 30 [“Mr. Marshall’s counsel at the Daspin law firm approved the transaction and was engaged to give effect to Mr. Marshall and Mr. Webster’s intentions, including the structure that Mr. Webster’s counsel was to propose.”].) The Complaint does not demonstrate the existence of an attorney-client relationship to support Defendants’ claim of breach of Plaintiff’s fiduciary duties.

Defendants’ arguments as to the first cause of action all fail. The demurrer to the first cause of action is overruled.

Plaintiff’s second cause of action seeks specific performance against Marshall of the March 6 Agreement and the March 29 Transfer. (Compl., ¶ 37.) Defendants challenge this “cause of action” on three grounds.

First, Defendants argue that “because there is no enforceable contract” there can be no specific performance. (Dem. 16:9-10.) As discussed above, the Complaint alleges the existence of a contract.

Secondly, Defendants argue that specific performance is not a separate cause of action. In this respect, the demurrer is well taken. “There are no separate causes of action for specific performance or injunctive relief, which are instead remedies.” (Green Valley Landowners Assn. v. City of Vallejo (2015) 241 Cal.App.4th 425, 433, fn. 8; see, e.g., Wong v. Jing (2010) 189 Cal.App.4th 1354, 1360, fn. 2 [explaining that specific performance and injunctive relief are equitable remedies and not causes of action for injuries].)

Finally, the Court will address Defendants’ third ground for demurrer to this cause of action, which informs whether the Court should grant leave to amend to allow Plaintiff to plead specific performance as a remedy.

Defendants argue Plaintiff is not entitled to specific performance because performance is impossible, citing Civil Code section 3390.

In Casady v. Modern Metal Spinning (1961) 188 Cal.App.2d 728, 729, the court held “Where the defendant’s performance depends on the consent or approval of one not a party to the contract who is free to withhold his consent, specific performance of the contract will not be decreed where it does not appear that such consent or approval has been or can be obtained.” (Id. at 731.)

Here, Defendants argue that performance is impossible because Defendant “Marshall required consent or approval of third parties to perform the March 6 Agreement, and Partanna would have required approval of third-party investors to effect the March 29 Transfer.” (Dem., 17:4-6.) However, these conditions are not alleged in the Complaint. In contrast, the Complaint alleges that were was alternative means by which Defendant Marshall could effectuate the transfers without requiring this third-party company approval. (Compl., ¶¶ 58-59.) Further, the Complaint alleges that Defendant Marshall had Partanna’s Board’s approval to transfer stock to an LLC to be held for the benefit of third parties. (Compl., ¶ 74; see also ¶¶ 27-32 [alleging that the March 6 Agreement contemplated this indirect transfer of ownership through an LLC.].)

Thus, from the face of the pleadings, the Court cannot find that the March 6 Agreement was impossible to perform. The Court grants Plaintiff leave to amend to seek specific performance as an alternative remedy for breach of contract.

Third Cause of Action – Intentional Inference with Contractual Relations against Partanna

Plaintiff’s third cause of action alleges Partanna intentionally interfered with the contractual relations between Plaintiff Webster and Defendant Marshall. (Compl., ¶¶ 91-95.)

“To prevail on a cause of action for intentional interference with contractual relations, a plaintiff must plead and prove (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) disruption of the contractual relationship; and (5) resulting damage.” (Reeves v. Hanlon (2004) 33 Cal. 4th 1140, 1148.) Even if “the plaintiff need not prove that a defendant acted with the primary purpose of disrupting the contract,” the plaintiff still “must show the defendant's knowledge that the interference was certain or substantially certain to occur as a result of his or her action.” (Id.)

Defendants demur to this cause of action on the grounds that Plaintiff failed to allege the existence of any valid contract, and also failed to allege any intentional act.

As discussed above, Defendants’ first challenge to this cause of action fails as Plaintiff has adequately alleged the existence of a contract.

On demurrer, Defendants also argue that the claim fails because Plaintiff’s own exhibits to the Complaint indicate that Partanna and Marshall were still working towards effecting the transfer, that is, they were trying to help, not disrupt. (Compl., Ex. 25 [emails].) Defendants argue that this Exhibit 25 “flatly contradict the ‘intentional acts’ [Plaintiff] alleges. (Reply 12:3-14.) As a preliminary matter, is not clear what was being discussed in Exhibit 25 and the allegations in the Complaint do not cite this Exhibit. Thus, this Exhibit does not support Defendants’ proposition that Partanna was working, in good faith, to effectuate the transfer its stock.

Further, the Complaint alleges Partanna encouraged the parties to effectuate the transfer as electronic issuance of stock certificates but then Partanna interfered with the transfer by, among other things, discouraging the completion of the transfer by telling Defendant Marshall that his relationship with Partanna would be negatively affected if the transfer of stock went through. (Compl., ¶ 50.) Further, the Complaint avers Partanna falsely claimed it was unable to proceed with the issuance of evidence of Plaintiff’s ownership after the electronic transfer and that a company signature was required, despite prior assurances that it had already approved of the transfer. (Compl., ¶¶ 59-60.) Thereafter, Partanna’s counsel took over as Marshall’s counsel and engaged in a pattern of delay and disruption to the performance of the stock transfer. (Compl., ¶¶ 61-64.)

These allegations are sufficient to state a claim that Partanna intentionally disrupted the contractual relationship. The demurrer to the third cause of action is overruled.

In demurring to this cause of action, Defendants argue that Plaintiff’s fourth cause of action for “inducing breach of contract” is not a separate cause of action but a “species of intentional interference with contractual relations.” (1-800 Contacts, Inc. v. Steinberg (2003) 107 Cal.App.4th 568, 585.) But that case did not hold that the tort of inducing breach of contract was not a separate cause of action.

To the contrary, a claim of inducing breach is distinct from a claim of interference with contractual relations. (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1129 [distinguishing inducing a contract’s breach from interference that makes plaintiff’s performance more burdensome].) A person may be liable in tort for intentionally interfering with a contractual relationship or inducing another to breach the contract. (Applied Equipment Corp. v. Litton Saudi Arabia Ltd., supra, 7 Cal.4th at p. 514 Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 514 [interference with contractual]; Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 55 [inducing breach of contract]; 1-800 Contacts, Inc. v. Steinberg (2003) 107 Cal.App.4th 568, 585-586 [inducing breach of contract].)

While these two claims are similar, they have different elements. As our Supreme Court noted: “[W]hile the tort of inducing breach of contract requires proof of a breach, the cause of action for interference with contractual relations is distinct and requires only proof of interference.” (Pacific Gas & Electric Co. v. Bear Stearns & Co. supra, 50 Cal.3d at 1129.)

Fifth Cause of Action – Intentional Inference with Prospective Economic Advantage against Partanna

Plaintiff’s fifth cause of action alleges Partanna intentionally interfered with his prospective economic advantage.

“The tort of intentional or negligent interference with prospective economic advantage imposes liability for improper methods of disrupting or diverting the business relationship of another which fall outside the boundaries of fair competition. [Citation.] It is premised upon the principle, ‘ “[e]veryone has the right to establish and conduct a lawful business and is entitled to the protection of organized society, through its courts, whenever that right is unlawfully invaded.” ’ ” (Settimo Associates v. Environ Systems, Inc. (1993) 14 Cal.App.4th 842, 845.) The elements of the tort include “(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153, 1164–1165.)

To meet the third element, a plaintiff must demonstrate intentional acts by the defendant, that are wrongful apart from the interference itself, designed to disrupt the relationship; this element requires a showing that the defendant “engaged in conduct that was wrongful by some legal measure other than the fact of interference itself” such as “conduct that is recognized as anticompetitive under established state and federal positive law.” (Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 393; see also S Products, Inc. v. Matsushita Electric Corp. of America (2004) 115 Cal.App.4th 168.) An act is not made independently wrongful merely because of improper motives. (Korea Supply Co., supra, 29 Cal.4th at p. 1158.)

Defendants argue that the Complaint fails to allege any unlawful act by Partanna. As addressed in the third cause of action, Plaintiff has alleged independently wrongful conduct by Partanna.

Defendants also contend that Plaintiff has not alleged that any “actual disruption of the relationship” resulted. In support of this argument, Defendants points to the allegations in the Complaint “that Partanna and Marshall stood ready to work on completing the transfer as late as Webster’s demand letter.” (Dem. 18:12-14 [citing Compl. ¶ 64].) But this requires a determination of contested fact. Defendants’ argument is not well taken where the Complaint alleges that Partanna’s actions significantly contributed to the non-performance of the contract.

Sixth Cause of Action – Breach of Implied in Fact Contract against Partanna and Marshall

Defendants demur to this cause of action on the grounds that this alleged implied in fact contract overrides the express terms of a written contract and, therefore, fails to state a claim.

“ ‘[T]he vital elements of a cause of action based on contract are mutual assent (usually accomplished through the medium of an offer and acceptance) and consideration. As to the basic elements, there is no difference between an express and implied contract. While an express contract is defined as one, the terms of which are stated in words (Civ. Code, § 1620), an implied contract is an agreement, the existence and terms of which are manifested by conduct (Civ. Code, § 1621).... [B]oth types of contract are identical in that they require a meeting of minds or an agreement [citation]. Thus, it is evident that both the express contract and contract implied in fact are founded upon an ascertained agreement or, in other words, are consensual in nature, the substantial difference being in the mode of proof by which they are established.’ ” (Pacific Bay Recovery, Inc. v. California Physicians' Services, Inc. (2017) 12 Cal.App.5th 200, 215-216.)

Here, Defendants argue that this claim fails because it directly contradicts the terms of the written November Advisor Agreement. As argued by Defendants, “[t]here cannot be a valid express contract and an implied contract, each embracing the same subject, but requiring different results.” (Starzynski v. Capital Public Radio, Inc. (2001) 88 Cal. App. 4th 33, 38.) Defendants contend that the alleged implied in fact contract directly conflicts with the written Advisor Agreement which “embrac[es] the same subject,” providing for equity in exchange for services.

Plaintiff Webster argues the implied contract does not embrace “the same subject” as the prior Agreement; the new contract addressed expanded services. (Compl., ¶¶ 13-15.) Specifically, the implied in fact contract is an expansion of the “services beyond the scope of the November 30 Advisor Agreement.” (Compl., ¶ 117.)

The demurrer is not well taken where Defendants seek to contradict the allegations in the Complaint by relying on a denied request for judicial notice of the November Advisor Agreement.

Further, Defendants argue that the Complaint indicates that there was no conduct to demonstrate an implied contract because Plaintiff’s counsel recommended not doing any expanded work without a signed agreement and Partanna did not recognize any agreement except the November Advisor Agreement. (Dem., 19:1-9 [citing Exs. 10, 13.) This argument is unpersuasive because the cited exhibits to the Complaint do not demonstrate a lack of consent to an implied contract though conduct.

Seventh Cause of Action – Promissory Estoppel against Partanna and Marshall

The Complaint alleges that “Partanna and Marshall clearly and unambiguously promised Plaintiff that he would be given two percent of Partanna’s stock if he agreed to expand his services beyond those contemplated by the November 30 Advisor Agreement.” (Compl. ¶ 124.)

The elements of a promissory estoppel claim are “(1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) [the] reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance.” (US Ecology, Inc. v. State of California (2005) 129 Cal.App.4th 887, 901; Joffe v. City of Huntington Park (2011) 201 Cal.App.4th 492, 513; see also Aceves v. U.S. Bank N.A. (2011) 192 Cal.App.4th 218, 225.)

Defendants argue that the Complaint’s allegations are conclusory and fail for the same reasons that the other claims fail, e.g., it is unreasonable to rely on an agreement to agree. (Dem., 19:25-20:1.)

The Complaint alleges sufficient ultimate facts to demonstrate a clear unambiguous promise. (Compl., ¶¶ 14-17.) Further, reliance on this promise was not unreasonable.

Eighth Cause of Action – Unjust Enrichment against Partanna and Marshall

Defendants demur to this cause of action on the grounds that there is no cause of action for unjust enrichment. They are correct.

Generally, California requires a person to make restitution if he or she is unjustly enriched at the expense of another. (First Nationwide Savings v. Perry (1992) 11 Cal.App.4th 1657, 1662.) “The fact that one person benefits another is not, by itself, sufficient to require restitution. The person receiving the benefit is required to make restitution only if the circumstances are such that, as between the two individuals, it is unjust for the person to retain it.” (Id. at p. 1663.)

However, the Court of Appeal, in the Second District and elsewhere, has repeatedly stated that “[t]here is no cause of action in California labeled ‘unjust enrichment.’” (City of Oakland v. Oakland Raiders (2022) 83 Cal.App.5th 458, 477 [Second District]; see American Master Lease LLC v. Idanta Partners, Ltd. (2014) 225 Cal.App.4th 1451, 1481 [Second District] [“the restitutionary remedies of unjust enrichment and disgorgement are available for aiding and abetting breach of fiduciary duty.”]; Jogani v. Superior Court (2008) 165 Cal.App.4th 901, 911 [Second District] [“[Unjust enrichment] is a general principle underlying various doctrines and remedies, including quasi-contract.”]; De Havilland v. FX Networks, LLC (2018) 21 Cal.App.5^th 845, 870 [Second District] [unjust enrichment is not a cause of action; it is just a restitution claim]; Durell v. Sharp Healthcare (2010) 183 Cal.App.4^th 1350, 1370 [there “is no cause of action in California for unjust enrichment”]; Castillo v. Toll Bros., Inc. (2011) 197 Cal.App.4^th 1172, 1210 [“California does not recognize unjust enrichment as a separate cause of action”].)[2]

The unjust enrichment remedy sought here is adequately encompassed in the remedies sought in Plaintiff’s other causes of action. Thus, this unjust enrichment “cause of action” adds nothing to the Complaint. (Compl., ¶¶ 128-142; Opp. 14:16-15:2 [combining opposition argument on the eighth and ninth causes of action]; Jogani v. Superior Court, supra, 165 Cal.App.4th at 911 [unjust enrichment claim based on same allegations as common count claim was duplicative and subsumed by common count claim].) The demurrer to the eighth cause of action is sustained without leave to amend.

To recover in quantum meruit, a plaintiff must show “(1) the plaintiff acted pursuant to an explicit or implicit request for the services by the defendant, and (2) the services conferred a benefit on the defendant.” (Port Medical Wellness. v. Connecticut General Life Ins. (2018) 24 Cal.App.5th 153, 180.) “[I]n order to recover under a quantum meruit theory, a plaintiff must establish both that he or she was acting pursuant to either an express or implied request for such services from the defendant and that the services rendered were intended to and did benefit the defendant.” (Day v. Alta Bates Med. Ctr. (2002) 98 Cal. App. 4th 243, 248.)

On demurrer, Defendants contend that Plaintiff cannot prevail on this cause of action because the scope of the Advisor Agreement was broad and it governed all of the services Plaintiff provided. (Defs.’s RJN, Ex. 1.) As noted above, an argument based on this judicial notice is not proper on demurrer because the Court has denied the request for judicial notice.

The Complaint here alleges that Plaintiff provided services at Defendants’ request and Plaintiff has not been paid for these services. (Compl., ¶¶ 136-140.) The claim seeks reasonable value of services rendered. (Compl., ¶ 141.)

The demurrer is overruled as to the first, third, fourth, fifth, sixth, seventh, and ninth causes of action. The demurrer is sustained with leave to amend as to the second cause of action to allege specific performance as remedy. The demurrer is sustained without leave to amend as to the eighth cause of action. Plaintiff shall have leave to amend. The amended complaint shall be filed and served on or before November 30, 2023.

[1] Defendant further argues that the November Advisor Agreement expressly disclaimed any amendment, modification, or waiver except in a signed writing by the parties. However, in making this argument, Defendants again rely on their request for judicial notice of the November Advisor Agreement, which the Court denied.

[2] “Disgorgement as a remedy is broader than restitution or restoration of what the plaintiff lost. (County of San Bernardino v. Walsh (2007) 158 Cal.App.4th 533, 542 [69 Cal.Rptr.3d 848]; Feitelberg v. Credit Suisse First Boston, LLC (2005) 134 Cal.App.4th 997, 1013 [36 Cal.Rptr.3d 592].) There are two types of disgorgement: restitutionary disgorgement, which focuses on the plaintiff's loss, and nonrestitutionary disgorgement, which focuses on the defendant's unjust enrichment.” (American Master Lease LLC v. Idanta Partners, Ltd. (2014) 225 Cal.App.4th 1451, 1482.)

Judge Bruce G. Iwasaki

Department 58