Judge Bruce G. Iwasaki, Case BC711642 2022-12-14 Tentative Ruling

Case Name: Margaret A. Delis, et al. v. Montecito Financial Services, Inc., et al.

Moving Parties: Defendant Montecito Financial Services dba Robert Hall & Associates

Responding Parties: Plaintiffs Dean C. Delis, Margaret Delis, Drew Delis, Delakis LP, and DMD Investments, LLC

On November 5, 2021, Plaintiffs Dean Delis, Margaret Delis (Meg), Drew Delis, Delakis LP, and DMD Investments LLC (collectively Plaintiffs) filed the Third Amended Complaint (Complaint) against twenty-four defendants, comprised of three individuals and twenty-one entities. The Complaint asserts twenty-three claims for conspiracy to defraud, fraud, securities fraud, civil theft, conversion, fraudulent conveyance, aiding and abetting, breach of fiduciary duty, constructive fraud, breach of written contract, elder financial abuse, professional negligence, and for an accounting. The allegations relate to numerous fraudulent real estate investment schemes. Plaintiffs invested and loaned money to certain entity Defendants to renovate and re-sell certain distressed properties (Properties). However, many of the loans went into default and the Properties sold in foreclosure sales.

Plaintiffs allege that Defendant Stephen Hall made numerous misrepresentations to them over several years. For example, he allegedly failed to inform Plaintiffs of any of the risks associated with any of the investments, failed to disclose that numerous properties were over-collateralized, and failed to follow through on numerous promises such as signing a personal guarantee to return the money after the fraud was discovered.

In October 2017, Plaintiffs ordered title reports on the Properties and discovered that all were over-encumbered, in default, and were delinquent in property taxes. A month later, Plaintiffs aver, Defendant Stephen Hall deflected the blame onto Defendant Brad Wiedmann, stating that Wiedmann had misled him and his family as well. At that time, Plaintiffs met with Defendants Robert and Stephen Hall, who initially offered to sign written personal guarantees to pay back Plaintiffs’ principal and interest. About a month later, Robert and Stephen Hall then declined to sign the guarantees because it would supposedly hinder their ability to obtain new loans for further remodeling of the Properties. In February 2018, Plaintiffs discovered that their real estate loans were being diverted into other businesses, such as ORock Technologies, an internet company dealing with cloud-based services.

Plaintiffs invested their funds into numerous entities to remodel distressed Properties and re-sell them for profit. These “Borrower Defendants” include ABS LA Group, LLC; ATB2 Group, LLC; BVS Partners Realty, LLC; GOBI, LLC; MTB1 Group, LLC; Nashville West, LLC; and 1 Valley View Group, LLC. Stephen Hall and/or Brad Wiedmann was or is the managing agent for all the Borrower Defendants. Except for ORock Technologies, the following are allegations about the transactions with the entities in which Plaintiffs invested.

A total of $1.4 million was invested into the Bellevue Property. This consisted of $900,000 by Drew Delis through his corporation, Delakis LP, and $500,000 from Dean and Meg Delis through the Entrust Group, Inc. FBO Dean C. Delis. The funds were sent to Defendant MTB1 Group to remodel the Bellevue Property. Dean and Meg subsequently transferred their loan from the Bellevue Property and onto the Alegria Property as described below, based on the advice of Stephen Hall. The total amount transferred with interest was $743,000 as a lien on the Alegria Property.

This Property was sold in July 2017. Drew Delis received his principal and interest on the Bellevue Property.

A total of $500,000 was invested to purchase and remodel the Madre Property. Dean and Meg Delis provided the funds to Defendant ABS LA Group, LLC. Their lien was then transferred to the Bellevue Property; upon the sale of the Bellevue Property, Dean and Meg received $120,000 and $380,000 remains outstanding. The Madre Property was sold in a foreclosure sale.

A total of $732,500 was invested into the Evergreen Property, which was supposed to be used to convert the Property into a sober living facility. Dean and Meg Delis, through the Delis Solo 401K Trust FBO Dean C. Delis/Margaret A. Delis invested a total of $200,000, while DMD Investments, LLC invested $532,500. DMD Investments is a limited liability company formed by Drew Delis and whose members are Delakis LP and Miles Delis (Drew’s brother).

The funds were sent to Defendant ATB2 Group, LLC. Stephen Hall and Wiedmann reportedly provided Dean and Meg Delis a 30% ownership interest. In March 2018, the Property sold, and the principal was paid back. However, Plaintiffs never received the 30% net profit based on the ownership interest.

A total of $260,000 was invested into the Alegria Property for remodeling. Dean and Meg Delis, through the Delis Solo 401K Trust FBO Dean C. Delis/Margaret A. Delis invested a total of $100,000, while Dean and Meg Delis personally invested $160,000. The funds were sent to Defendant BVS Realty Partners, LLC. Both the $260,000 and the transferred $743,000 (from the Bellevue Property) were not repaid.

Plaintiffs received a Notice of Default on the Property in November 2015; however, after informing Stephen Hall and Brad Wiedmann, Plaintiffs were told the notice was likely a mistake relating to identity theft. This Property was sold in foreclosure in February 2018.

ORock is an internet and cloud-based company that provides IT infrastructure and solutions for enterprise customers. $450,000 was invested in this company, resulting in Plaintiffs purchasing a total of 99,999 shares. Drew Delis personally invested $100,000, Drew Delis through Delakis LP invested $250,000, and Dean and Meg Delis, through the Delis Solo 401K Trust FBO Dean C. Delis invested $100,000.

Drew Delis through Delakis LP invested $425,000 to remodel the Irvington Property. The funds were sent to Defendant GOBI, LLC.

Drew Delis through Delakis LP invested $500,000 to remodel the Portola Property. The funds were sent to Defendant 1 Valley View Group, LLC.

Drew Delis through Delakis LP made two separate investments of $85,000 each to remodel two different units of the Hunter Property. The funds were sent to Defendant Nashville West, LLC. This Property was also sold in a foreclosure sale.

Drew Delis through Delakis LP made two separate investments of $115,000 each to remodel two different units of the Ashe Property. The funds were sent to 3600 Ashe LLC. This entity filed for Chapter 11 bankruptcy in 2018 and Plaintiffs dismissed it from the case.

The Complaint also names “Other Entity Defendants,” which include BD View Consulting, LLC; Blue Syrah, LLC; Coral Keswick, LLC; Cordova Investments California, Inc.; Cordova Investments Nevada, Inc.; Keswick Consulting, LLC; Legacy Village; 1001 McDonald Way, LLC; ORock Technologies, Inc.; Pacific Auto Recycling Center; Padaro Holdings, LLC; and 300 W. Glenoaks, LLC. These Other Entity Defendants reportedly received funds which were diverted away from the Borrower Defendants and comingled.

On October 15, 2019, Plaintiffs filed an amendment to the complaint, substituting in Robert Hall for the “Doe 1” defendant.

In June 2020, Defendants Robert Hall, RH&A, the Cordova entities, Coral Keswick, and 300 W. Glenoaks demurred to the Second Amended Complaint on the first (conspiracy), second (fraud), third (securities fraud), fourth (securities fraud), fifth (civil theft), sixth (conversion), seventh (fraudulent conveyance), eighth (breach of fiduciary duty), ninth (aiding and abetting breach of fiduciary duty), tenth (constructive fraud), twenty-six (financial elder abuse), twenty-seventh (professional negligence), and twenty-eighty (accounting) causes of action. In December 2020, this Court overruled the entire demurrer.

In December 2021, the same moving Defendants again demurred as to the Third Amended Complaint on the sixth (conversion), seventh (aiding and abetting fraudulent transfers), ninth (aiding and abetting fraudulent transfers), eleventh (aiding and abetting breach of fiduciary duty), and twelfth (constructive fraud) causes of action. They further argued that Plaintiff Drew Delis lacked standing and sought to strike the alter ego allegations. On February 22, 2022, this Court sustained the demurrer as to Drew’s standing, but overruled the rest of the demurrer and denied the motion to strike.

Twenty of the defendants filed motions for summary judgment/adjudication, which have been grouped into three clusters for three hearings: (1) PARC, Cordova NV, Cordova CA, W. Glenoaks, Coral Keswick, LLC; (2) Stephen E. Hall, 1 Valley View Group, LLC; ABS LA Group, LLC; ATB2 Group, LLC; BVS Realty Partners, LLC; GOBI, LLC; MTB1 Group, LLC; Nashville West, LLC; 1001 McDonald Way, LLC; Blue Syrah, LLC; Keswick Consulting, LLC; Padaro Holdings, LLC and Padaro Trails, LLC (collectively Stephen Hall Defendants); and (3) Robert Hall; and Montecito Financial Services dba Robert Hall & Associates (RH&A). The Court denied the motions for summary adjudication filed by the first and second groupings. (See rulings filed November 16 and 30, 2022.)

This ruling is on the third group of those motions, filed by Robert Hall and RH&A (collectively moving Defendants). Robert Hall is a director or officer of RH&A, the Cordova entities, PARC, and 300 W. Glenoaks.

Robert Hall seeks summary adjudication of the first (conspiracy), second (fraud), fifth (civil theft), seventh (fraudulent conveyance), eighth (fraudulent conveyance), ninth (fraudulent conveyance), eleventh (aiding and abetting breach of fiduciary duty), twelfth (constructive fraud), twenty-first (elder financial abuse), twenty-second (professional negligence), and twenty-third (accounting) causes of action.

RH&A seeks summary adjudication of the first (conspiracy), third (securities fraud), fifth (civil theft), seventh (fraudulent conveyance), and eighth (fraudulent conveyance) causes of action.

The request for judicial notice by moving Defendants is granted as to court documents filed in the case. (Evid. Code, § 452, subd. (d).) Plaintiffs’ request for judicial notice of Statements of Information, Articles of Organization from the Secretary of State, and various filings with the Securities Exchange Commission is granted. (Evid. Code, § 452, subd. (c).)

Plaintiffs filed objections to the evidence submitted by moving Defendants in support of their motions for summary adjudication. As to Plaintiffs’ objections to RH&A and Robert Hall’s evidence, the Court sustains objections numbers: 1, 4-10, 13, 15-17, 22, 25, 31, 33-34, 36-53, 55-76, 78-84, 86-104, 106-204. The Court overrules objections numbers 2-3, 11-12, 14, 18-21, 23-24, 26-30, 32, 35, 54, 77, 85, 105, 205-208.

As to Defendants’ objections to Plaintiffs’ evidence, the Court sustains objections numbers: 1, 4, 25, 31, 55-56, 105-106, 331. The Court overrules objections numbers: 2-3, 5-24, 26-30, 32-53, 57-104, 107-330, 332-340.

A party may move for summary judgment “if it is contended that the action has no merit or that there is no defense to the action or proceeding.” (Code Civ. Proc., § 437c,¿subd. (a).) “[I]f all the evidence submitted, and all inferences reasonably deducible from the evidence and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law,” the moving party will be entitled to summary judgment. (Adler v. Manor Healthcare Corp.¿(1992) 7 Cal.App.4th 1110, 1119.)

The moving party has the initial burden of production to make¿a prima facie¿showing of the nonexistence of any triable issue of material fact, and if he does so, the burden shifts to the opposing party to make¿a prima facie¿showing of the existence of a triable issue of material fact. (Aguilar v. Atlantic Richfield Co.¿(2001) 25 Cal.4th 826, 850; accord Code Civ. Proc., § 437c,¿subd. (p)(2).) A Defendant moving for summary judgment may meet its initial burden by proving that for each cause of action alleged, plaintiff cannot establish at least one element of the cause of action. (Code Civ. Proc., § 437c, subd. (p)(2).)

Defendant Robert Hall reiterates an argument that he previously raised in his June 2020 demurrer – that the October 15, 2019 amendment substituting him as a “Doe 1” defendant did not relate back to the original Complaint filed on June 27, 2018, and that the statute of limitations bars the fraud, civil theft, aiding and abetting breach of fiduciary duty, and professional negligence claims.

As an initial matter, Robert Hall’s cited evidence does not support his undisputed fact. For example, 3SUF6[1] asserts that “Plaintiffs knew the identity of Robert Hall because they identified him in the [original Complaint] as ‘the then-leader’ of RH&A and as having introduced his son Stephen Hall to the Delises to assist with their tax and financial planning.” He cites to Paragraph 1 of the original Complaint, but Paragraph 1 does not make such a statement. Similarly, 3SUF13 argues that in filing the First Amended Complaint, Plaintiffs knew of Robert Hall’s alleged connection “because the FAC identifies Robert Hall (FAC ¶ 66-73) as part of the ‘Scheme to Defraud.’ ” Robert Hall is only mentioned in Paragraph 66: “Robert Hall, STEPHEN HALL, WIEDMANN and RH&A held themselves out as ‘highly successful real estate investors and developers’ that will ‘help you make smart real estate investments.’” Paragraphs 67 through 73 do not discuss Robert Hall.

Robert Hall relies solely on the pleadings for his contention that relation-back is improper. Thus, the same reasons for which the Court previously overruled the demurrer is applicable and that analysis is incorporated here. (Order, Dec. 2, 2020, pp. 4-5.)

“The general rule is that an amended complaint that adds a new defendant does not relate back to the date of filing the original complaint and the statute of limitations is applied as of the date the amended complaint is filed, not the date the original complaint is filed. [Citations.] A recognized exception to the general rule is the substitution under [Code of Civil Procedure] section 474 of a new defendant for a fictitious Doe defendant named in the original complaint as to whom a cause of action was stated in the original complaint. [Citations.] If the requirements of section 474 are satisfied, the amended complaint substituting a new defendant for a fictitious Doe defendant filed after the statute of limitations has expired is deemed filed as of the date the original complaint was filed. [Citation.]” (Woo v. Superior Court (1999) 75 Cal.App.4th 169, 176.)

Under section 474, the test is plaintiff’s actual knowledge of the defendant’s identity and the facts giving rise to liability. (General Motors Corp. v. Superior Court (1996) 48 Cal.App.4th 580, 588 [“the relevant inquiry when the plaintiff seeks to substitute a real defendant for one sued fictitiously is what facts the plaintiff actually knew at the time the original complaint was filed”].) In other words, “even though the plaintiff knows of the existence of the defendant sued by a fictitious name, and even though the plaintiff knows the defendant’s actual identity (that is, his name), the plaintiff is ‘ignorant’ within the meaning of the statute if he lacks knowledge of that person’s connection with the case or with his injuries.” (Id. at pp. 593–594; McOwen v. Grossman (2007) 153 Cal.App.4th 937, 943 [“If the identity of the Doe defendant is known but, at the time of the filing of the complaint the plaintiff did not know facts that would cause a reasonable person to believe that liability is probable, the requirements of section 474 are met”].)

“[T]he pivotal question is “ ‘ “did plaintiff know facts?” not did plaintiff know or believe that she had a cause of action based on those facts?” ’ ” (General Motors Corp. v. Superior Court, supra, 48 Cal.App.4th at p. 594.) Thus, while a plaintiff’s ignorance must be in good faith, “it is equally true that the plaintiff does not relinquish her rights under section 474 simply because she has a suspicion of wrongdoing arising from one or more facts she does know.” (Ibid., italics added.) “When a defendant is improperly named by a fictious name (e.g., defendant can show plaintiff knew defendant’s name and the facts supporting the cause of action against them), the affirmative defense that the statute of limitations had run when defendant was named may raise a fact issue.” (Banke & Segal, Cal. Practice Guide: Civil Procedure Before Trial Statutes of Limitations (The Rutter Group 2022) ¶ 8:103.1.)

Because improper relation back and statute of limitations constitute affirmative defenses, the burden is on the defendant to prove that plaintiff knew his identity and the facts giving rise to a cause of action. (See Fuller v. Tucker (2000) 84 Cal.App.4th 1163, 1173.) The burden on a defendant to establish an affirmative defense “is heavier than the burden to show one or more elements of the plaintiff’s cause of action cannot be established. Instead of merely submitting evidence to negate a single element of the plaintiff’s cause of action, or offering evidence, such as vague or insufficient discovery responses, that the plaintiff does not have evidence to create an issue of fact as to one or more elements of his or her case [citation], ‘the defendant has the initial burden to show that undisputed facts support each element of the affirmative defense.’ ” (Anderson v. Metalclad Insulation Corp. (1999) 72 Cal.App.4th 284, 289.)

Robert Hall fails to meet this burden. His evidence consists entirely of reference to the pleadings, a contention that this Court previously rejected in overruling the demurrer back in December 2020. In opposition, Plaintiffs argue that they did not discover Robert Hall’s participation in the scheme until they received discovery in May 2019. (Plaintiff’s AMF 1710.)

Robert Hall’s only viable argument is that Plaintiffs admit in their original Complaint that Robert Hall and Stephen Hall “promised to give written personal guarantees to pay back all of the Delis family’s principal loans and interest in full.” (Original Complaint, ¶ 42.) However, this does not establish knowledge on the part of Plaintiffs that Robert Hall was involved in the fraudulent scheme. Moreover, this raises the issue of equitable estoppel.

“A defendant may be equitably estopped from asserting a statutory or contractual limitations period as a defense if the defendant’s act or omission caused the plaintiff to refrain from filing a timely suit and the plaintiff’s reliance on the defendant’s conduct was reasonable. [Citations.] The act or omission must constitute a misrepresentation or nondisclosure of a material fact, rather than law. [Citation.] The defendant need not intend to deceive the plaintiff to give rise to an equitable estoppel.” (Superior Dispatch, Inc. v. Insurance Corp. of New York (2010) 181 Cal.App.4th 175, 186-187.) Generally, “[w]hether the plaintiff's reliance was reasonable is a question of fact for the trier of fact unless reasonable minds could reach only one conclusion based on the evidence.” (Id. at p. 107.)

Robert Hall denies that he was asked to sign personal guaranties or that he stated he would make the Plaintiffs “whole” before his family received a single dime. But his only evidence in support is his own declaration averring that he made no such statements. This is countered by Plaintiffs’ own evidence that he made those remarks. (Robert Hall 12SUF64.) Plaintiffs also produce evidence that Robert Hall tried to convince them not to retain counsel. (Plaintiff’s Compendium, Ex. 44, Wilson Depo., pp. 52:5-24, 56:16-24, 57:3-58:1, 62:11-13, 63:5-8, 66:13-25, 70:19-71:18, 72:12-22, 80:9- 81:24, 83:3-21.) Whether Plaintiffs reasonably relied on these statements in not naming Robert Hall sooner is a triable issue of fact. Additionally, “ ‘[r]esolution of the statute of limitations issue is normally a question of fact.’ ” (Paredes v. Credit Consulting Services, Inc. (2022) 82 Cal.App.5th 410, 427; Michaels v. Greenberg Traurig, LLP (2021) 62 Cal.App.5th 512, 538.)

In his Reply, Robert Hall argues that Plaintiffs did not allege the thirteen guaranties in the Second Amended Complaint that they had prepared for Robert Hall and Stephen Hall to sign and that this Court had no occasion to consider those allegations at the prior demurrer hearing. However, he overstates the significance of these guaranties. These documents do not show Plaintiffs had anything more than a suspicion of wrongdoing on the part of Robert Hall.

The rest of Robert Hall’s arguments discusses the accrual of the claims and specific limitations periods for each cause of action. But these arguments depend upon the finding that the Doe amendment did not relate back to the original Complaint. Because Robert Hall has not shown Plaintiffs knew facts that gave rise to his liability as early as the original Complaint and that equitable estoppel may bar Robert Hall’s statute of limitations defense, the Court does not reach these arguments. Therefore, the Court denies summary adjudication based on improper relation back and on statute of limitations grounds.

Both Defendants argue that there is no alter ego liability with respect to their ties to Blue Syrah, Cordova (CA), Cordova (NV), PARC, Coral Keswick, and 300 W. Glenoaks.[2] They concede that these entities rented suites in the same office building, used the same company for formation, and had their taxes prepared by RH&A, but contend that those factors are insufficient for alter ego liability.

“ ‘ “Whether the evidence has established that the corporate veil should be ignored is primarily a question of fact … .” ’ ” (Lopez v. Escamilla (2022) 79 Cal.App.5th 646, 650; RLH Industries, Inc. v. SBC Communications, Inc. (2005) 133 Cal.App.4th 1277, 1287; Las Palmas Associates v. Las Palmas Center Associates (1991) 235 Cal.App.3d 1220, 1248.) “ ‘The conditions under which the corporate entity may be disregarded, or the corporation be regarded as the alter ego of the stockholders, necessarily vary according to the circumstances in each case inasmuch as the doctrine is essentially an equitable one and for that reason is particularly within the province of the trial court.’ [Citation.] Nevertheless, it is generally stated that in order to prevail on an alter ego theory, the plaintiff must show that ‘(1) there is such a unity of interest that the separate personalities of the corporations no longer exist; and (2) inequitable results will follow if the corporate separateness is respected.’ ” (Zoran Corp. v. Chen (2010) 185 Cal.App.4th 799, 811.)

“ ‘The alter ego test encompasses a host of factors: “[1] [c]ommingling of funds and other assets, failure to segregate funds of the separate entities, and the unauthorized diversion of corporate funds or assets to other than corporate uses … ; [2] the treatment by an individual of the assets of the corporation as his own … ; [3] the failure to obtain authority to issue stock or to subscribe to or issue the same … ; [4] the holding out by an individual that he is personally liable for the debts of the corporation … ; the failure to maintain minutes or adequate corporate records, and the confusion of the records of the separate entities … ; [5] the identical equitable ownership in the two entities; the identification of the equitable owners thereof with the domination and control of the two entities; identification of the directors and officers of the two entities in the responsible supervision and management; sole ownership of all of the stock in a corporation by one individual or the members of a family … ; [6] the use of the same office or business location; the employment of the same employees and/or attorney … ; [7] the failure to adequately capitalize a corporation; the total absence of corporate assets, and undercapitalization … ; [8] the use of a corporation as a mere shell, instrumentality or conduit for a single venture or the business of an individual or another corporation … ; [9] the concealment and misrepresentation of the identity of the responsible ownership, management and financial interest, or concealment of personal business activities … ; [10] the disregard of legal formalities and the failure to maintain arm's length relationships among related entities … ; [11] the use of the corporate entity to procure labor, services or merchandise for another person or entity … ; [12] the diversion of assets from a corporation by or to a stockholder or other person or entity, to the detriment of creditors, or the manipulation of assets and liabilities between entities so as to concentrate the assets in one and the liabilities in another … ; [13] the contracting with another with intent to avoid performance by use of a corporate entity as a shield against personal liability, or the use of a corporation as a subterfuge of illegal transactions … ; [14] and the formation and use of a corporation to transfer to it the existing liability of another person or entity.’ … [¶] This long list of factors is not exhaustive. The enumerated factors may be considered ‘[a]mong’ others ‘under the particular circumstances of each case.’ ” (Id. at pp. 811-812.) “ ‘No single factor is determinative, and instead a court must examine all the circumstances to determine whether to apply the doctrine.’ ” (Id. at p. 812.)

Defendants cite Leek v. Cooper (2011) 194 Cal.App.4th 399, 415, but that section of the case merely discusses sufficiency of the pleadings on a motion for summary judgment. This Court previously found the alter ego allegations sufficient in denying RH&A’s motion to strike. (Order, Feb. 22, 2022, p. 7.) Defendant’s only other citations rests on declarations by Robert Hall, Janice Hall, Robert W. Hall, and Stephen Hall. (See 1SUF24.) This evidence is insufficient to show that corporate formalities were observed, the entities were adequately capitalized upon formation, and that each entity “maintained separate personality from each of its principals.” Defendants cannot merely point to the absence of evidence to support its case. (See Krantz v. Bt Visual Images (2001) 89 Cal.App.4th 164, 173 [reversing trial court’s grant of summary judgment based on “declarations from three attorneys and a company executive stating that the alter ego and agency allegations of the amended complaint were untrue”].)

Moreover, Plaintiffs provide ample rebuttal evidence. For example, neither Wiedmann nor Stephen Hall contributed capital to numerous entities. (Plaintiff’s AMF 154-161.) Wiedmann also admitted that Plaintiffs’ investments would not be used for the purposes for which they were invested. (Id. at 451-455.) Other evidence shows that the funds were extensively diverted and commingled with funds in other entities’ bank accounts. (Id. at 459-474, 476-482, 484-501, 503, 505-527, 537-546, 552- 557, 559-573.) The Court also incorporates its prior analysis on alter ego in its rulings on Stephen Hall’s motion for summary adjudication, which raised many of the same arguments. (Order, Nov. 30, 2022, pp. 6-9.) This is enough to create a triable issue of fact.

Additionally, this same evidence supports a triable issue of fact on single-enterprise liability, which is a type of alter ego liability that is used to reach the assets between “ ‘ “sister [or affiliated] companies.” ’ ” (Cam-Carson, LLC v. Carson Reclamation Authority (2022) 82 Cal.App.5th 535, 550.)

As to inequitable results if the corporate veil is not pierced, the Court previously held that Plaintiffs produced evidence that if Defendants are not found to be an alter ego of the entity Defendants, this would be unjust because many of the entities are insolvent. (Plaintiff’s AMF 459-571; See Relentless Air Racing, LLC v. Airborne Turbine Ltd. Partnership (2013) 222 Cal.App.4th 811, 813.) The same holds true here. Accordingly, there is a triable issue of fact as to whether Robert Hall, RH&A, and the entity Defendants are alter egos of each other and the motion is denied as to alter ego liability.

Defendant RH&A’s argument that the notes were not securities was previously addressed in this Court’s ruling on the Stephen Hall Defendants’ motion for summary adjudication. The same arguments were raised in those motions as in this motion. The Court incorporates the findings here. (Order, Nov. 30, 2022, pp. 9-13 [finding triable issue of fact as to whether the loans were securities because the federal Howey test was satisfied, and the notes did not resemble a “note secured by a mortgage” under the Reves test such that the presumption that the note is a security applies].)

Defendant RH&A contend the civil theft claim fails because the Bellevue Notes, the Second Madre Note, the Evergreen Note, and the Portola Note was paid off or satisfied, and that RH&A was not the alter ego of any of the other Defendants.

Both Defendants’ arguments here mirror the first set of motions for summary adjudication by PARC, Cordova, and W. Glenoaks. The Court rejects those arguments and reincorporates the analysis. (Order, Nov. 16, 2022, pp. 7-9 [finding that Plaintiffs’ theory of this cause of action is theft by false pretenses, which is sufficient for a claim for civil theft, and that criminal intent is a question of fact].)

As to RH&A specifically, it first contends that various notes were satisfied and that therefore, this negates any basis for the civil theft allegations. This is unavailing. First, RH&A’s cited evidence does not establish that any of the notes were paid off. The citations are to facts that argue Robert Hall did not knowingly assist or abet anyone in the receipt of and/or stealing of Plaintiffs’ funds, regurgitations of the Complaint’s allegations, or a conclusory statement that Robert Hall, Janice Hall, Robert William Hall, the Cordova entities, Coral Keswick, 300. W. Glenoaks, RH&A, and PARC did not have any ownership interest in the Borrower Defendants. (See 4SUF26-30.) The provided evidence in support of these facts is simply a declaration from the corporation’s officer. However, the Court may deny summary adjudication if the sole material fact is the party’s state of mind and the only evidence in support is the party’s declaration. (Code Civ. Proc., § 437c, subd. (e).) Furthermore, this Court has previously found that there is a disputed issue of fact as to whether the Bellevue Notes, Madre Notes, and Evergreen Note were paid off or satisfied. (Order, Nov. 30, 2022, pp. 20-23.)

RH&A’s officers include Janice Hall, Stephen Hall, and Robert William Hall. (Plaintiff’s Compendium, Ex. 673.) As the Court previously found in Stephen Hall’s motion for summary adjudication, there is sufficient circumstantial evidence that Stephen Hall conducted a series of rapid transfers to/from the Borrower Defendants’ accounts. (Plaintiff’s AMF 459-474, 482-502.) Thus, RH&A cannot argue that “none of RH&A’s principals knowingly received on behalf of RH&A any of the alleged funds knowing them to be stolen” when Plaintiffs’ underlying theory is fraud given that the funds were diverted from their original purposes (renovation of properties) and siphoned into various accounts of business entities, many of whom list Stephen Hall as a managing member. Thus, the presumption is that Stephen Hall’s knowledge is imputed to the Defendants. (Uecker v. Zentil (2016) 244 Cal.App.4th 789, 797.)

Second, as to RH&A’s argument that it is not an alter ego, as discussed above, this argument is rejected. There is a triable issue of fact whether RH&A (and Robert Hall) and the other entity Defendants are alter egos of one another.

RH&A’s remaining contentions rest on merely restating allegations in the Complaint and asserting that Plaintiffs admit that there was no theft because the funds were intended to be investments on the Properties. But this ignores Plaintiffs’ assertion that the funds were fraudulently diverted and not used for the purposes for which they were originally invested. This is evidenced by the transfers of money out of the entities’ accounts almost immediately on receipt.

Accordingly, because Plaintiffs’ theory is based in part on theft by false pretenses and whether RH&A intended to commit civil theft through its managing members is a question of fact, summary adjudication is denied on this cause of action.

Seventh through ninth causes of action - fraudulent conveyance and aiding and abetting fraudulent conveyance

Both Robert Hall and RH&A argues that it is not a transferor or transferee of the 74 alleged transfers between the Borrower Defendants and other entities. RH&A cites to 5SUF14, while Robert Hall cites to 6SUF13-15, but these arguments fail because those statements of fact concede to knowledge of several transfers made to the Cordova entities, 300 W. Glenoaks, and PARC in which Robert Hall is a managing member.

As to RH&A’s second argument that the transfers to Cordova (NV), 300 W. Glenoaks, and PARC were in good faith, this argument was previously rejected by the Court in the ruling on the first three motions for summary adjudication filed by each of those entities respectively. (Order, Nov. 16, 2022, pp. 10-12.) Those Defendants did not provide sufficient evidence showing that these transactions were in good faith and neither RH&A nor Robert Hall does so now. For those same reasons, the Court denies summary adjudication on the seventh cause of action.

On the eighth case of action, both Defendants argue that the $200,000 transfer that was allegedly made by Robert Hall was for a loan made by him and his wife to ORock. (RH&A 7SUF1-6; Robert Hall 8SUF1-4). They contend that the loan was made in February 2016, before Robert Hall was added in as a party to this case. They further argue that Robert Hall received reasonably equivalent value for the transfer, the transfer was not made with the intent to hinder, delay, and defraud, and the loan did not render Robert Hall insolvent. As to certain transactions in which RH&A directly transferred money to ORock, both Defendants argue that the transfers were made with the expectation of repayment and for reasonably equivalent value. Finally, they argue that they were unaware of the other transfers by Keswick Consulting and Stephen Hall and that, therefore, could not have aided and abetted any fraudulent transfers as to those transactions.

“[A] transfer made by a debtor is fraudulent under the [Uniform Voidable Transactions Act] if the debtor made the transfer with the ‘actual intent to hinder, delay, or defraud any creditor of the debtor.’ (§ 3439.04, subd. (a)(1).) Whether a conveyance was made with fraudulent intent is a question of fact, and proof often consists of inferences from the circumstances surrounding the transfer.” (Filip v. Bucurenciu (2005) 129 Cal.App.4th 825, 834.)

The factors that a court looks to in evaluating whether there is actual intent to hinder, delay, or defraud a creditor include whether the transfer was to an insider, whether the debtor retained possession or control of the property transferred after the transfer, whether the transfer was disclosed or concealed, whether the debtor was sued before the transfer was made, whether all of the debtor’s assets were transferred, whether the debtor absconded, whether the debtor removed or concealed assets, whether the value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred, whether the debtor was insolvent, whether the transfer occurred before or shortly after a debt was incurred, and whether the debtor transferred the essential assets of the business to a lienor that then transferred the assets to an insider of the debtor. (Civ. Code, § 3439.04, subds. (b)(1)–(11.) The inquiry is highly fact-intensive.

“There is no minimum number of factors that must be present before the scales tip in favor of finding of actual intent to defraud. This list of factors is meant to provide guidance to the trial court, not compel a finding one way or the other.” (Filip v. Bucurenciu, supra, 129 Cal.App.4th at p. 834.)

Defendants’ first contention of the $200,000 being made in February 2016 is unsupported. The only evidence is Robert Hall’s declaration that the loan was made on February 4, 2016. But Plaintiffs produce a note from Robert and Janice Hall purporting to loan ORock $200,000 on January 1, 2020. (Plaintiff’s Compendium, Ex. 719.) Defendants fail to explain that document.

Robert Hall’s contention that when the transactions were made, he was solvent, received reasonably equivalent value, and did not make the transfer with the intent to defraud are mere conclusions, supported only by his declaration. (Code Civ. Proc., § 437c, subd. (e).) For example, the only cited evidence that Robert Hall was not insolvent at the time of the $200,000 loan is a statement that he “had sufficient funds to cover these transfers without any risk that the transfers would put us in debt and/or render us insolvent.” (Robert Hall Decl., ¶ 71.) Even if the Court were to accept the declaration as sufficient evidence, Plaintiffs provide counter evidence that RH&A, through Stephen Hall, used Delakis’ investments to purchase stock in ORock. (Plaintiff’s AMF 220-221, 223, 492-495.) This is enough to create a triable issue of fact whether the transfers were fraudulent.

The ninth cause of action involves transactions between Keswick Consulting, Stephen Hall, and Legacy Village. Robert Hall argues he did not own Keswick Consulting and Legacy Village and did not control Stephen Hall’s transfers to Legacy Village. This argument is also unpersuasive because Robert Hall may be liable under numerous theories of liability: conspiracy, alter ego, and single-enterprise.[3] As an example, between February and June 2018, Stephen Hall made numerous transactions to Legacy Village. Plaintiffs provide evidence that Stephen Hall used his RH&A e-mail address to facilitate business between the Borrower Defendants and 3600 Ashe, LLC (the entity in which Cordova obtained a security interest by lending money to Legacy Village); Stephen Hall operated out of the same building as the RH&A building. (Plaintiff’s response to 1SUF112.) A reasonable juror could find that Stephen Hall was acting in his capacity as a managing member of RH&A. Thus, RH&A would be Stephen Hall’s alter ego, which in turn implicates Robert Hall as the alter ego of RH&A under a single enterprise/reverse piercing theory of liability. Similar arguments are applicable under the conspiracy theory – for example, all three of Stephen Hall’s transfers to Legacy Village occurred after February 1, 2018: this was after Robert Hall met the Plaintiffs. Therefore, it is presumed that RH&A knew of these transactions, through Stephen Hall, and that Robert Hall had sufficient knowledge of the transaction through RH&A under a conspiracy theory. In sum, because the Court finds there are triable issues of fact for alter ego, conspiracy, and single enterprise liability, summary adjudication is denied on this cause of action.[4]

Robert Hall argues that he had no knowledge of the malfeasance of Stephen Hall, Brad Wiedmann, or RH&A until Stephen Hall and Plaintiffs informed him on November 12, 2017. Therefore, he argues, because the breach of fiduciary duty occurred before that date, he did not have actual knowledge to provide substantial assistance.

“California has adopted the common law rule for subjecting a defendant to liability for aiding and abetting a tort. ‘ “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.” ’ (Casey v. U.S. Bank Nat. Assn. (2005) 127 Cal.App.4th 1138, 1144.) Liability for aiding and abetting requires “proof the defendant had actual knowledge of the specific primary wrong the defendant substantially assisted.” (Id. at p. 1145.)

Accepting Defendant’s argument as true, Plaintiffs have sufficiently rebutted the argument by showing that after November 2017, Robert Hall aided and abetted the breach of fiduciary duty. For example, they provide evidence that he accepted and retained $200,000 from the sale of the Evergreen Property in March 2018, which should have been paid to Plaintiffs. (Plaintiff’s AMF 326, 561-575, 1647; Plaintiff’s Compendium, Exs. 278, 466-480.) Under this theory, Robert Hall was in breach of his fiduciary duty after he met the Plaintiffs. Therefore, summary adjudication is denied on this cause of action.

Robert Hall advances three reasons why the elder abuse claim fails: (1) he is not a party to any of the notes or breaches of contract, (2) the underlying claims on which the financial elder abuse claims are based upon are without merit, and (3) the conversion cause of action was previously eliminated by demurrer.

A claim for financial elder abuse requires showing the defendant took or assisted in taking the elder’s property “for a wrongful use or with intent to defraud” or by “undue influence.” (Welf. & Inst. Code, § 15610.30, subds. (a)(1)-(3).) The plaintiff must establish that the defendant “knew or should have known that this conduct is likely to be harmful to the elder.” (Id. at § 15610.30, subd. (b).)

Here, Robert Hall retained significant amounts of money from the sale of Evergreen, which Plaintiffs allege should have been paid to Plaintiff Dean Delis. As evidence, Plaintiffs provide transaction histories from ATB2, the entity responsible for the Evergreen Property, showing numerous debits. (Plaintiff’s Compendium, Exs. 466-480.) Notably, there were several debits from ATB2 to “SB Trust” (presumably under the control of Stephen Hall). The transaction log for SB Trust indicates numerous transfers totaling $200,284.33 to Robert Hall and/or Janice Hall that originated from the Evergreen funds. (Id. at Exs. 278, 480; Plaintiff’s AMF 326, 561-575.) This is sufficient to establish fraud as discussed above.

As to Robert Hall’s arguments, he cites no law in support and the Court is unaware of any authority that limits financial elder abuse to breaches of contract. This claim necessarily survives as being derivative of the constructive fraud cause of action, for which there is a triable issue of fact. Because the Court finds that summary adjudication is improper under the fraud causes of action, that claim can form the basis for financial elder abuse. (See Toscano v. Ameriquest Mortg. Co. (E.D.Cal. Oct. 23, 2007, No. CIV-F-07-0957 AWI DLB) 2007 U.S.Dist.Lexis 81884, *19.) [holding that an elder abuse claim based on defendant's misrepresentations about the terms of plaintiff’s loans is “ ‘financial in nature’ ”].)

Defendant Robert Hall argues that he had no direct relationship with Plaintiffs. He relies on Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 58 (Quelimane) for his argument that there is no duty to “avoid business decisions that may affect the financial interests of third parties, or to use due care in deciding whether to enter into contractual relations with another.” Quelimane involved plaintiff landowners who sued a title insurance company for refusing to insure their properties. Our Supreme Court found that “defendant had no relationship to the properties plaintiffs sought to sell [and] had no control over the sale and no preexisting relationship with the purchasers.” Thus, plaintiffs were purely third parties and “[f]oreseeability of financial injury to third persons alone is not a basis for imposition of liability for negligence conduct.” (Ibid.)

The Quelimane Court discussed the duty of care in the context of the parties not being in privity of contract with each other. (Quelimane, supra, 19 Cal.4th at p. 58.) Without privity, a court must balance certain factors to determine whether a duty exists: “ ‘ “[1] the extent to which the transaction was intended to affect the plaintiff, [2] the foreseeability of harm to him, [3] the degree of certainty that the plaintiff suffered injury, [4] the closeness of the connection between the defendant's conduct and the injury suffered, [5] the moral blame attached to the defendant's conduct, and [6] the policy of preventing future harm.” ’ ” (Ibid.)

First, Plaintiffs are not third parties relative to Defendants; rather, they are the clients of RH&A. (Robert Hall 1SUF7.) Thus, Quelimane is inapposite. Second, Robert Hall fails to meet his burden in discussing the factors in determining whether a duty applies. Even assuming Plaintiffs were third parties, the factors weigh in their factor: the note transactions were intended for their benefit, it was foreseeable that they would be harmed if the notes were breached, and it was certain that they suffered injury. Further, there is moral blame on the part of Defendant because he was the President and Director of RH&A, who provided various accounting, real estate, and investment services to Plaintiffs. As Plaintiffs point out, the allegation is that Robert Hall owed a broader duty of care through RH&A, who marketed real estate ventures, promoted its expertise in investments, and convinced Plaintiffs to invest in its various projects by relying upon their long-standing relationship. (Plaintiff’s AMF 8-10, 18-21, 22-28, 438, 1664, 1673, 1675, 1707, 1712, 1713, 1716, 1732-1736.) Thus, the Court denies summary adjudication on these grounds.

First, second, and twelfth causes of action – conspiracy to defraud, fraud, and constructive fraud

Defendant Robert Hall contends that because the Complaint alleges that it was Stephen Hall and Brad Wiedmann who made the alleged misrepresentations, Robert Hall cannot be liable for any of the fraud claims. Defendant overlooks other portions of the Complaint on which Plaintiffs allege fraud against Robert Hall. (Complaint, ¶ 398(Act Nos. 73-74; 78-79; 81.) For example, Robert Hall reportedly promised to sign personal guarantees that the Delises would be paid back their principal and interest before he received any money himself.

Defendant next argues that the “allegations of unfilled promises to payback both principal and interest, provide personal guaranties, remodel each related property, pay for a forensic accounting and investigation is equally without merit because the alleged promises simply were not made.” But of course, that is a factual dispute.

The elements of intentional misrepresentation, or fraud in the inducement, are “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Lazar v. Superior Court (1996) 12 Cal.4th 631.) “ ‘Except in the rare case where the undisputed facts leave no room for a reasonable difference of opinion, the question of whether a plaintiff's reliance is reasonable is a question of fact.’ ” (OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 864-865; Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1247 [whether reliance is justifiable is "generally [a] fact-based inquiry"].)

The evidence in support of Defendant’s statement that the misrepresentation never occurred are declarations by Robert Hall and Stephen Hall, which, again, are insufficient. (Code Civ. Proc., § 437c, subd. (e); Robert Hall 1SUF64-65.) And Plaintiffs provide counter evidence that such statements were made. (Plaintiff’s Compendium, Ex. 44, Wilson Depo., pp. 52:5-24, 56:16-24, 57:3-58:1, 62:11-13, 63:5-8, 66:13-25, 70:19-71:18, 72:12-22, 80:9- 81:24, 83:3-21.) Similarly, Robert Hall’s mere statement that Plaintiffs had not suffered damages at the time of his alleged guaranties or that he did not tell them not to involve attorneys is insufficient. The fact that Plaintiffs obtained an attorney is irrelevant on whether Robert Hall, in fact, discouraged them from obtaining counsel. Thus, there are issues of fact on whether the statements were made at all.

In addition, there are issues of fact as to Robert Hall’s intent to defraud and Plaintiffs’ justifiable reliance on the misrepresentation. (Chapman v. Skype Inc. (2013) 220 Cal.App.4th 217, 231 [justifiable reliance is a question of fact]; People v. Taylor (1973) 30 Cal.App.3d 117, 121 [“Intent to defraud is a question of fact”].)

Finally, as to Robert Hall’s argument that Evidence Code section 1152 (settlement negotiations) bars the admission of his statements of guarantee, this Court previously rejected this because the discussions were not used to establish liability, but rather, “provide how the Halls sought [to] lull the Delises into a false sense of security.” (Order, Dec. 2, 2020, p. 16.) The Court sees no reason to deviate from that ruling.

Finally, there are also issues of fact as to Defendants’ liability under fraud through the conspiracy and alter ego theories. Thus, the Court denies summary adjudication on this claim.

Robert Hall argues that constructive fraud only arises upon a breach of duty in a fiduciary relationship.

“ ‘ “Constructive fraud is a unique species of fraud applicable only to a fiduciary or confidential relationship.” ’ ” (Assilzadeh v. California Federal Bank (2000) 82 Cal.App.4th 399, 415.) “ ‘ “Most acts by an agent in breach of his fiduciary duties constitute constructive fraud.” ’ ” (Ibid.)

As discussed above, there is a triable issue of fact as to whether Robert Hall owed a broader duty of care to Plaintiffs through a confidential relationship – Plaintiffs have engaged with RH&A’s services since 2003, Stephen Hall acted as their tax advisor and was fully informed of their financial affairs, and RH&A marketed real estate investments to Plaintiffs since 2008. (Plaintiff’s AMF 8-10, 18-21, 22-28, 438, 1664, 1707, 1712, 1713, 1716, 1732-1736.)

Robert Hall next contends that he cannot be liable as an officer and/or director of RH&A for any alleged misrepresentations because he did not personally commit the fraud. He relies on Frances T. v. Village Green Owners Assn. (1986) 42 Cal.3d 490, 503 that corporate directors “cannot be held vicariously liable for the corporation’s torts in which they do not participate.” However, “Directors are jointly liable with the corporation and may be joined as defendants if they personally directed or participated in the tortious conduct.” (Id. at p. 504.) “A corporate director or officer’s participation in tortious conduct may be shown not solely by direct action but also by knowing consent to or approval of unlawful acts.” (PMC, Inc. v. Kadisha (2000) 78 Cal.App.4th 1368, 1380.)

Here, it is unclear what acts Defendant is referring to because there are no citations to the Separate Statement in this section of the moving papers. In any event, Plaintiffs have shown there are triable issues of fact on whether Robert Hall authorized, directed, or knowingly consented to wrongful conduct by entities under his control, such as RH&A, Cordova, Blue Syrah, and PARC. For example, when requested to sign written guarantees (and despite previously agreeing to do so), Hall declined, stating it would prevent banks from loaning money to complete the other projects. (Plaintiff’s AMF 444.) In November 2017, Robert Hall blamed Wiedmann for the fraud, and purportedly cut ties; however, later e-mails and texts indicate that Hall continued communicating, working with, and assisting Wiedmann. (Plaintiff’s AMF 1723-1731.) Nor did Robert Hall pursue any prosecution or civil lawsuits against Wiedmann. Thus, like the alter ego allegations, there are issues of fact here on Robert Hall’s degree of involvement as to the wrongful conduct.

RH&A and Robert Hall repeat arguments that the Court rejected in the first three motions for summary adjudication, such as the sufficiency of allegations in the Third Amended Complaint. (Order, Nov. 16, 2022, pp. 13-16; see also Order, Dec. 2, 2020, p. 12 [overruling the demurrer on conspiracy cause of action].) Those prior rulings are incorporated into this order and the Court finds that the Third Amended Complaint sufficiently pleads conspiracy.

Robert Hall’s argument that he did not know of the Plaintiffs until November 2017 misses the point – first, the Court previously pointed out that Defendant cites no legal authority requiring that the alleged conspirator personally know the victim. (Order, Nov. 16, 2022, p. 14.) Second, Robert Hall’s request that November 2017 act as the operative date of the conspiracy still does not relieve him of liability: the Complaint pleads that post-November 2017, Robert Hall engaged in numerous acts in furtherance of the conspiracy. (Complaint, ¶¶ 398 (Acts Nos. 73-74; 78-81.)

“Conspiracy is not a cause of action. It is a theory of liability under which persons who, although they do not actually commit a tort themselves, share with the tortfeasor or tortfeasors a common plan or design in its perpetration. One who participates in a civil conspiracy, in effect, becomes liable for the torts of the coconspirators. But the conspiracy does not result in tort liability unless an actual tort is committed.” (Kenne v. Stennis (2014) 230 Cal.App.4th 953, 968.) “The sine qua non of a conspiratorial agreement is the knowledge on the part of the alleged conspirators of its unlawful objective and their intent to aid in achieving that objective.” (Schick v. Lerner (1987) 193 Cal.App.3d 1321, 1328.)

RH&A’s argument that it did not, through its principals form a conspiracy because it did not agree to defraud Plaintiffs is a question of fact. The cited fact is, again, only supported by the declarations of Robert Hall, Janice Hall, Robert W. Hall, and Stephen Hall, and is offered for the improper purpose of showing a lack of intent to defraud or conspire. (1SUF20-22.)

Because Plaintiffs’ conspiracy theory of liability must be predicated on a tort and there is a triable issue of fact as to the fraud causes of action, this claim survives, and summary adjudication is denied on this ground.

Both Defendants contend that the agent immunity doctrine constitutes a complete defense because “an agent cannot conspire with a corporation while acting in his official capacity.” Thus, because Robert Hall was an officer and director of RH&A (and Cordova (CA), Cordova (NV), PARC, and Blue Syrah), they argue, he cannot be liable for conspiracy.

Under the agent’s immunity rule, “an agent is not liable for conspiring with the principal when the agent is acting in an official capacity on behalf of the principal.” (Fiol v. Doellstedt (1996) 50 Cal.App.4th 1318, 1326.) An exception to the rule is if the principal acts for their own individual advantage and not solely on behalf of the corporation or acts beyond the scope of their authority. (See Doctor’s Co. v. Superior Court (1989) 49 Cal.3d 39, 46-47.)

As an affirmative defense, the burden is on Defendants to show that the agent immunity rule applies. Again, their evidence merely relies upon the pleadings and/or the declarations of the entities’ officer. (RH&A 2SUF1-4; Robert Hall 18SUF6-14.) This is insufficient and is contradicted by other allegations in the Complaint. Moreover, there is a question of fact as to whether Robert Hall acted beyond the scope of his authority in overseeing or participating in the transactions. Defendants’ cited evidence fails to indicate whether Robert Hall’s actions were solely on behalf of the corporation and within his scope of authority.

In addition, the agent immunity doctrine fails to fully eliminate the first cause of action because the Complaint alleges numerous other acts between RH&A and other entities. For example, Stephen Hall (a principal of RH&A) allegedly solicited Drew’s money for a loan to Nashville West. (Complaint at ¶ 398(33).) Thus, even if the agent immunity doctrine bars a conspiracy between RH&A and Robert Hall, Defendants fail to address how it could apply to the agreements between RH&A, Robert Hall, and the litany of other entity defendants. (See also Plaintiff’s AMF 220-221, 223, 492-496, 507-515.)

Defendant Robert Hall contends that he owed no fiduciary duty to Plaintiff and “therefore has no obligation to provide the Plaintiffs an accounting as to loan transactions in which he had no role.” The Court has previously held that a fiduciary relationship is not required. The same analysis is incorporated herein. (Order, Nov. 16, 2022, p. 16.)

Robert Hall merely contends that he owed no fiduciary duty to Plaintiffs and that he is not liable. He concedes that he met the Plaintiffs in November 2017. (See Robert Hall’s 1SUF42, 2SUF22.) Given that he controlled some of the entities that allegedly received Plaintiffs’ funds (such as Cordova), there is some relationship that exists between the parties that necessitates an accounting. (Id. at 2SUF1, 1SUF88.) Therefore, the motion is denied as to the cause of action for an accounting.

[1] The first number in the citation is the “Issue No.” raised in the Separate Statement of Facts. Thus, 3SUF6 refers to Issue No. 3, Statement of Undisputed Fact 6.

[2] Neither Defendant mentions the other entities in this section of its moving papers.

[3] Single-enterprise liability is a type of alter ego liability that is used to reach the assets between “ ‘ “sister [or affiliated] companies.” ’ ” (Cam-Carson, LLC v. Carson Reclamation Authority (2022) 82 Cal.App.5th 535, 550.)

[4] Plaintiffs also produced evidence showing that the relationship between Robert Hall and Legacy Village is not clear. In May 2017, Robert Hall and Janice Hall, through Cordovan (NV) reportedly loaned $1 million dollars to Legacy Village. (Plaintiff’s Compendium, Exs. 688a, 688b, 688c, 688d.) These loans purportedly gave Cordova (and Robert Hall) a security interest in the Ashe Property, of which Plaintiff Delakis had previously invested in. It is unclear how Legacy Village provided a security interest on a property for which it held no interest, further suggesting an inference of fraud and/or conspiracy.

Department 58