Judge: Daniel M. Crowley, Case: 23STCV02687, Date: 2024-11-14 Tentative Ruling

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Case Number: 23STCV02687    Hearing Date: November 14, 2024    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Defendants Dorcy, Inc. dba Conscious Co-Parenting Institute’s and Dorcy Pruter’s motion for judgment on the pleadings as to the second cause of action in Plaintiffs Jenna Noble’s and Michael Eisenberg dba and Eisenberg & Associates’ second amended complaint is denied.

Defendants Dorcy, Inc. dba Conscious Co-Parenting Institute (“Conscious Co-Parenting”) and Dorcy Pruter (“Pruter”) (collectively, “Defendants”) move for judgment on the pleadings of the 2nd cause of action in Plaintiffs Jenna Noble’s (“Noble”) and Michael Eisenberg dba Eisenberg & Associates’ (“Eisenberg”) (collectively, “Plaintiffs”) second amended complaint (“SAC”) for promissory estoppel.[1]  (Notice Motion, pg. 2.)

Request for Judicial Notice

Defendants’ 8/13/24 request for judicial notice of this Court’s 11/1/23 and 2/29/24 Minute Orders in the instant action is denied because the Court does not need to take judicial notice of filings on the instant docket.

Background

Plaintiffs filed their initial complaint on February 7, 2023, alleging four causes of action: (1) breach of contract; (2) intentional misrepresentation, fraud in the inducement; (3) promissory estoppel; and (4) declaratory relief.  On November 21, 2023, Plaintiffs filed the first amended complaint (“FAC”).  On March 20, 2024, Plaintiffs filed the operative SAC alleging two causes of action: (1) intentional misrepresentation, fraud in the inducement; and (2) promissory estoppel. On July 16, 2024, this Court sustained Defendants’ demurrer to Plaintiffs’ 1st cause of action without leave to amend.  (See 7/16/24 Minute Order.)

This action arises out of Noble’s employment by Defendants from around May 2018 until her termination on June 18, 2019.  (SAC ¶9.)  Plaintiffs allege during Noble’s employment she was not paid all of the agreed upon commissions she was entitled to.  (SAC ¶10.)   Plaintiffs allege during Noble’s employment she suffered from sexually harassing conduct and battery by her supervisor, Pruter, that was severe and/or pervasive.  (SAC ¶11.) 

Plaintiffs allege Noble complained about the sexually harassing conduct to the police in Lloydminster, Alberta, Canada.  (SAC ¶12.)  Plaintiffs allege after Noble complained to the police, she was terminated in retaliation for her complaints on or about June 18, 2019.  (SAC ¶13.) 

Plaintiffs allege Noble sued Defendants for wrongful termination and other causes of action and litigated her case in United States District Court, Case No. 2:19-cv-08646 ODW (JPRx) before Hon. Otis D. Wright, II (“Underlying Action”).  (SAC ¶14.)  Plaintiffs allege Noble was represented by Eisenberg & Associates (“E&A”) in the Underlying Action.  (SAC ¶14.) 

Plaintiffs allege on August 12, 2021, the parties entered into a conditional Settlement Agreement and Mutual General Release (“Agreement”), pursuant to which Defendants agreed to pay Plaintiffs $75,000 twenty-one days after the execution of the Agreement via a single check to payable to E&A’s Client Trust Account, which was to be delivered to Eisenberg’s office located at 3580 Wilshire Blvd., Suite 1260, Los Angeles, CA 90010.  (SAC ¶15, Exh. A.) 

Plaintiffs allege by entering into the Agreement, Defendants agreed to remit the settlement funds to Eisenberg as an express intended third-party beneficiary of the Agreement for the payment of his earned attorney’s fees.  (SAC ¶16.)  Plaintiffs allege the Agreement was conditional on a dismissal with prejudice of criminal charges against Pruter by the Canadian Crown Attorneys’/Prosecutor’s Office (Information Number 19-75005953).  (SAC ¶17.)  Plaintiffs allege if this condition was not satisfied within fourteen (14) days of the full execution of the Agreement (i.e., by August 26, 2021), the Agreement would be deemed null and void.  (SAC ¶17.) 

Plaintiffs allege as part of the Agreement, the parties also entered into a stipulation and filed a corresponding proposed order on August 13, 2021, which requested a continuing of pending scheduling order deadlines to facilitate the settlement.  (SAC ¶18.)  Plaintiffs allege a true and correct copy of the August 13, 2021, stipulation and proposed order is attached to the Agreement as Exhibit B within the Agreement.  (SAC ¶18.)  Plaintiffs allege the stipulation represented to the court that “[t]he parties have signed and exchanged a written settlement agreement (potentially resolving all pending claims between the parties) specifying several events that must occur over the next month in order to complete the settlement terms.”  (SAC ¶19.) 

Plaintiffs allege as part of the Agreement, Noble agreed to present a written request for a full and complete dismissal with prejudice of all criminal claims, charges, warrants against Pruter, in the form of the letter attached as Exhibit C to the Agreement, to the Toronto Crown Attorney/ Prosecutor’s Office and the Toronto Law Enforcement Office.  (SAC ¶20.)  Plaintiffs allege upon signing the Agreement, Plaintiffs immediately began working towards executing their obligations thereunder and contacted Detective Rich Petrie, who works in 52nd Division of the Toronto Police Service as a Detective (No. 2232).  (SAC ¶21.) 

Plaintiffs allege on August 12, 2021, Noble signed and Plaintiffs emailed the exact letter from Exhibit C of the Agreement to Detective Rich Petrie of the Toronto Police Service, which stated “I hereby request a full and complete dismissal with prejudice of all criminal claims, charges, warrants against Dorcy Pruter pertaining to my allegations against her (Information Number 19-75005953). I further request written confirmation of the dismissal with prejudice of the above referenced criminal charges.”  (SAC ¶22.)

Plaintiffs allege on August 13, 2021, Detective Rich Petrie emailed both E&A and counsel for Defendants confirming that he had “completed the withdrawal request and had it approved by a Crown Attorney.”  (SAC ¶23.) Plaintiffs allege Detective Petrie also confirmed that the proper department for Noble to bring her criminal allegations against Pruter was and is still the Toronto Police Service.  (SAC ¶23, Exh. B.)

Plaintiffs allege on August 20, 2021, Detective Rich Petrie emailed E&A stating that he had spoken with the Assistant Crown Attorney and received authorization from her to withdraw the criminal charge of sexual assault against Pruter.  (SAC ¶24.)  Plaintiffs allege Detective Petrie also made clear that once a criminal charge is withdrawn, the charge is permanently closed and will not be prosecuted.  (SAC ¶24.)  Plaintiffs allege E&A forwarded this email to counsel for Defendants explaining that once the Crown Attorney withdrew the criminal charges against Pruter, all conditions precedent would be satisfied, and payment would be due on September 2, 2021.  (SAC ¶24, Exh. C.)  Plaintiffs allege on August 26, 2021, E&A found out that the charges against Pruter were dismissed. (SAC ¶25.)  Plaintiffs allege E&A immediately forwarded the confirmation of the dismissal to counsel for Defendants.  (SAC ¶25, Exh. D.)

Plaintiffs allege on August 27, 2021, Detective Rich Petrie emailed a confirmation that the Crown Attorney had withdrawn all criminal charges on August 26, 2021, and confirmed that the criminal matter against Pruter was permanently closed.  (SAC ¶26.)  Plaintiffs allege that same day, E&A copied counsel for Defendants on his response email to Detective Petrie so that Defendants would be assured that the criminal charges against Pruter were dropped.  (SAC ¶26.)

Plaintiffs allege on August 31, 2021, counsel for Defendants emailed E&A doubting that the dismissed charges against Pruter were “with prejudice.”  (SAC ¶27.)  Plaintiffs allege E&A responded on September 1, 2021, and reiterated that per Detective Petrie, the charges were permanently closed and could not be prosecuted and therefore Defendants’ payment was due the next day under the Agreement.  (SAC ¶27, Exh. E.)  Plaintiffs allege as far as they understood, the criminal charges against Pruter were dismissed “with prejudice.”  (SAC ¶28.)  Plaintiffs allege Defendants had a criminal attorney in Canada and knew there is no such terminology as “dismissal with prejudice” in the Canadian court system.  (SAC ¶29.)  Plaintiffs allege nonetheless, Defendants requested this language to be included in the Agreement.  (SAC ¶29.)  Plaintiffs allege thus, Defendants knew that Plaintiffs could only substantially perform under the verbatim wording of the Agreement, which Plaintiffs did.  (SAC ¶29.) 

Plaintiffs allege on September 9, 2021, E&A and counsel for Defendants discussed that Plaintiffs have performed their obligations under the agreement, that the terminology “with prejudice” did not exist in the Canadian court system, and that Defendants’ promised $75,000 payment was owing.  (SAC ¶30.)  Plaintiffs even offered to amend the Agreement to state that if Plaintiff ever attempted to do the impossible and refile the same charges against Pruter, Plaintiff would be required to pay back the full settlement amount plus interest.  (SAC ¶30.)

Plaintiffs allege despite receiving notice that Plaintiffs satisfied all conditions precedent for Defendants to pay the settlement funds pursuant to the Agreement, Defendants refused to honor their obligations thereunder and breached the Agreement.  (SAC ¶31.)  Plaintiffs allege on information and belief that Defendants entered into the Agreement without ever intending to honor their obligations thereunder.  (SAC ¶32.)  Plaintiffs allege rather, Defendants entered into the Agreement solely to induce Plaintiffs to dismiss both the criminal charges against Pruter in Canada, as well as the Underlying Action.  (SAC ¶32.) 

Plaintiffs allege on October 5, 2021, Plaintiffs filed a Motion to Enforce Settlement Agreement, or in the Alternative, for a New Scheduling Order in the Underlying Action.  (SAC ¶33.)  Plaintiffs allege on October 12, 2021, Judge Otis D. Wright, II ruled in the Underlying Action that “[t]he Court has no interest in monitoring parties’ compliance with the terms of a settlement agreement. Given that the parties have settled the matter, this case should be dismissed.  Any failure to satisfy the terms of the parties’ settlement agreement, including payment, should be enforced in a subsequent lawsuit. The Clerk of the Court shall close this case.”  (SAC ¶34, Exh. F.)  Plaintiffs allege they now bring this action to enforce the Agreement per the federal court’s instructions.  (SAC ¶35.)

On August 13, 2024, Defendants filed the instant demurrer.  On October 31, 2024, Plaintiffs filed their opposition.  On November 6, 2024, Defendants filed their reply.

Legal Standard

“A motion for judgment on the pleadings may be made at any time either prior to the trial or at the trial itself.”  (Stoops v. Abbassi (2002) 100 Cal.App.4th 644, 650; see also Korchemny v. Piterman (2021) 68 Cal.App.5th 1032, 1055 [“common law ground for a motion for judgment on the pleadings is identical to the statutory ground”].)

The grounds for a motion for judgment on the pleadings must appear on the face of the challenged pleading or be based on facts the court may judicially notice.  (C.C.P. §438(d); Tung v. Chicago Title Co. (2021) 63 Cal.App.5th 734, 758-759.)

Where the motion is based on matters the court may judicially notice (under Evidence Code §§452, 453), such matters must be specified in the notice of motion or supporting points and authorities.  (C.C.P. §438(d); compare Saltarelli & Steponovich v. Douglas (1995) 40 Cal.App.4th 1, 5 [taking judicial notice of matters in parties’ exhibits in “nonstatutory” motion for judgment on the pleadings]

          Meet and Confer

Before filing a motion for judgment on the pleadings, the moving party shall meet and confer in person, by telephone, or by video conference with the party who filed the pleading that is subject to the motion for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the motion.  (C.C.P. §439(a), emphasis added.)  A declaration must be filed with the motion regarding the results of the meet and confer process.  (C.C.P. §439(a)(3).)

Defendants’ counsel’s declaration states that on July 31, 2024, he spoke with Plaintiffs’ counsel by phone regarding the instant motion and the parties were unable to resolve the issues raised in this motion.  (See Decl. of Abbott ¶2.)[2]

Failure to State a Claim

          Promissory Estoppel (2nd COA)

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.”  (Jones v. Wachovia Bank (2014) 230 Cal.App.4th 935, 945.)

Plaintiffs allege Defendants made a clear and unambiguous promise to Plaintiffs that in exchange for Plaintiff filing a dismissal of the criminal charges against Pruter by the Canadian Crown Attorneys’/ Prosecutor’s Office (Information Number 19-75005953) and in consideration of the settling of the Underlying Action, Defendants would pay Plaintiffs $75,000.  (SAC ¶58.) 

Plaintiffs allege they reasonably and justifiably relied on said promises and trusted Defendants to fulfill their promises.  (SAC ¶59.)  Plaintiffs allege agreed to enter into a stipulation to request a continuance of all pending scheduling order deadlines to facilitate the settlement and immediately contacted Detective Rich Petrie, who works in 52nd Division of the Toronto Police Service as a Detective (No. 2232) to dismiss the sexual assault against Pruter.  (SAC ¶60.)

Plaintiffs allege that on August 13, 2021, the court vacated all case deadlines in the Underlying Action and ordered the parties file a dismissal to comply with FRCP Rule 41 by October 11, 2021.  (SAC ¶61.)  Plaintiffs allege on August 20, 2021, Detective Rich Petrie emailed E&A stating that he had spoken with the Assistant Crown Attorney and received authorization from her to withdraw the criminal charge of sexual assault against Pruter.  (SAC ¶62.)  Plaintiffs allege Detective Petrie made clear that once a criminal charge is withdrawn, the charge is permanently closed and will not be prosecuted.  (SAC ¶62.) 

Plaintiffs allege E&A forwarded Detective Petrie’s email to counsel for Defendants explaining that once the Crown Attorney withdrew the criminal charges against Pruter, all conditions precedent would be satisfied and payment would be due on September 2, 2021.  (SAC ¶63.)

Plaintiffs allege Defendants did not perform their promise to pay Plaintiffs the promised $75,000.  (SAC ¶64.)  Plaintiffs allege as a direct and foreseeable result of Defendants’ failure to perform their promise, Plaintiffs have been greatly injured in that both the Underlying Action against Defendants and the criminal charges against Pruter were dismissed without Plaintiffs being paid the promised $75,000 under the settlement.  (SAC ¶65.)

Plaintiffs sufficiently allege the four elements required to state a claim for promissory estoppel.  (See SAC ¶¶58-65.)

Defendants’ argument that promissory estoppel cannot apply here is unavailing.

Promissory estoppel applies whenever a “promise which the promissor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance” would result in an “injustice” if the promise were not enforced . . ..’”  (Aceves v. U.S. Bank N.A. (2011) 192 Cal.App.4th 218, 227.)  Because promissory estoppel is an equitable doctrine to allow enforcement of a promise that would otherwise be unenforceable, courts are given wide discretion in its application.  (US Ecology, Inc. v. State of California (2005) 129 Cal.App.4th 887, 902.)

There is a long-established principle of law that a contract containing an arguably illegal term can be enforced against the wrongdoing party in favor of the innocent party that the law is intending to protect.  “In some cases, effective deterrence of illegal conduct is best realized by enforcing the plaintiff’s breach of contract claim rather than leaving the defendant in possession of the benefit under the illegal contract; or the forfeiture resulting from unenforceability is disproportionately harsh considering the nature of the illegality.”  (Lewis & Queen v. N. M. Ball Sons (1957) 48 Cal.2d 141, 151.) “[C]ourts should not be so enamored with the Latin phrase ‘in pari delicto’ that they blindly extend the rule to every case where illegality appears somewhere in the transaction. The fundamental purpose of the rule must always be kept in mind, and the realities of the situation must be considered. Where, by applying the rule, the public cannot be protected because the transaction has been completed, where no serious moral turpitude is involved, where the defendant is the one guilty of the greatest moral fault, and where to apply the rule will be to permit the defendant to be unjustly enriched at the expense of the plaintiff, the rule should not be applied.”  (Norwood v. Judd (1949) 93 Cal. App. 2d 276, 289.)

Here, Defendants are alleged to be the exclusive recipients of the benefit of the arguably illegal term in the Agreement, are the party alleged to be at fault, and received 100% of the benefit contemplated by their promise to Plaintiffs.  Further, Penal Code §153, which states that it is illegal to take money and in exchange “abstain from any prosecution [of a crime]” is not meant to protect Defendants, the alleged perpetrator of the crime subject to prosecution.  Defendants cannot shield themselves from an equitable claim that serves to protect individuals similarly situated to Plaintiffs’ position.

Accordingly, Defendants’ motion for judgment on the pleadings of Plaintiffs’ 2nd cause of action for promissory estoppel is denied.

Conclusion

Defendants’ motion for judgment on the pleadings of Plaintiffs’ 2nd cause of action is denied.

Moving Party to give notice.

Dated:  November _____, 2024