Judge: Carolyn M. Caietti, Case: 37-2022-00043380-CU-FR-CTL, Date: 2023-08-04 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - August 03, 2023

08/04/2023  10:30:00 AM  C-70 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Carolyn Caietti

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Civil - Unlimited  Fraud Demurrer / Motion to Strike 37-2022-00043380-CU-FR-CTL AYERS VS VAN ZANT [IMAGED] CAUSAL DOCUMENT/DATE FILED: Demurrer, 03/10/2023

Defendants Ingrid Van Zant, The Van Zant Family Trust Dated May 19, 2016 with Steven Brian Van Zant and Ingrid Van Zant in their capacities as Trustees, and Edhive, Inc.'s Demurrer to the Complaint is OVERRULED.

Defendants' unopposed request for judicial notice is granted and notice will be taken to the extent allowed. (Evid. Code, § 452(d).) A demurrer can be used only to challenge defects that appear on the face of the pleading under attack; or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) No other extrinsic evidence can be considered (i.e., no 'speaking demurrers'). (Ion Equip. Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881.) The complaint must be liberally construed and given a reasonable interpretation, with a view to substantial justice between the parties. (Amarel v. Connell (1988) 202 Cal.App.3d 137, 140–141; see also, Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1111-12 [in ruling on demurrers, courts treat as being true 'not only the complaint's material factual allegations, but also facts that may be implied or inferred from those expressly alleged'].) Claim and Issue Preclusion Do Not Apply As explained by the California Supreme Court in Grande v. Eisenhower Medical Center (2022) 13 Cal.5th 313, 323, res judicata or claim preclusion applies only when a second suit involves: (i) the same cause of action; (ii) between the same parties or their privies; and (iii) after a final judgment on the merits in the first suit. (Ibid.) Collateral estoppel or issue preclusion applies: (i) after final adjudication; (ii) of an identical issue; (iii) actually litigated and necessarily decided in the first suit; and (iv) asserted against one who was a party in the first suit or one in privity with that party. (Ibid.) Minimally, claim and issue preclusion do not apply as Plaintiff's Complaint filed in May 2022 was not subject to a 'final' judgment or adjudication. If a prior judgment was not on the merits, then res judicata is not applicable and it does not have the effect of barring the subsequent action. (Association of Irritated Residents v. Department of Conservation (2017) 11 Cal.App.5th 1202, 1219.) A dismissal without prejudice is not a bar to another action by the plaintiff on the same cause. (Gagnon Co. v. Nev. Desert Inn (1955) 45 Cal.2d 448, 455.) Here, Plaintiff dismissed the complaint without prejudice. Thus, the finality elements are not met for preclusion.

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2947155  44 CASE NUMBER: CASE TITLE:  AYERS VS VAN ZANT [IMAGED]  37-2022-00043380-CU-FR-CTL The Court is not persuaded by Defendants' argument the criminal action resulted in a final judgment on the merits because it 'necessarily incorporated the Original Complaint.' (Memo., at p. 17:9-10.) Defendants also did not provide any legal authority confirming a stipulated restitution order in a criminal action meets the finality element for claim and issue preclusion.

For Purposes of Demurrer, the Complaint is Not Barred by the Statute of Limitations For a demurrer based on the statute of limitations to be sustained, the untimeliness of the lawsuit must 'clearly and affirmatively' appear on the face of the complaint and matters judicially noticed. (Coalition for Clean Air v. City of Visalia (2012) 209 Cal.App.4th 408, 420.) 'This will not be the case unless the complaint alleges every fact which the defendant would be required to prove if he were to plead the bar of the applicable statute of limitation as an affirmative defense.' (Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 881.) 'It is not sufficient that the complaint might be barred.' (Roman v. County of Los Angeles (2000) 85 Cal.App.4th 316, 324–325.) Here, Plaintiff does not dispute the various statutes of limitations identified by Defendants, but maintains the discovery rule delays accrual of the causes of action as stated in Fox v. Ethicon Endo-Surgery, Inc.

(2005) 35 Cal.4th 797. In liberally construing the complaint, drawing all inferences in favor of the plaintiff and assuming the truth of the allegations, Plaintiff did not discover the causes of action until May/July 2022. 'The Successor Receiver did not and could not have become aware of the true roles that the Van Zants and their companies EdHive and EDCBO had in the scheme or the fraudulent circumstances related to the various transfers and payments they received until Steve Van Zant pled guilty to conspiracy to misappropriate public funds and grand theft in the Criminal Action in May 2022.' (Complaint, at ¶ 31; see also, id., at ¶ 4.) Further, '[i]n or around July 2022 and only after the guilty plea, Steve Van Zant implicated Ingrid Van Zant's role and involvement in EdHive.' (Id., at ¶ 32.) For purposes of this motion only, the discovery rule exception applies.

For these reasons, the demurrer is OVERRULED.

Defendants are ordered to file and serve an answer by August 18, 2023.

If the tentative ruling is confirmed without modification, the minute order will be the Court's final ruling.

Defendants are ordered to serve written notice of the Court's final ruling on all parties by August 8, 2023, unless all parties submit on the Court's tentative ruling or waive notice at the hearing.

Plaintiff is reminded to comply with Department 70's Policies and Procedures and to provide courtesy copies of motion paperwork.

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