Judge Daniel M. Crowley, Case Number: 23STCV21836, Date: 2024-08-15 Tentative Ruling

Defendants Lonzo Anderson Ball’s, Lameck Lukanga’s, and LifeLine Financial Group, LLC’s unopposed demurrer to Plaintiff Gregory Alan Foster’s First Amended Complaint is sustained without leave to amend as to the 1st, 2nd, and 3rd causes of action.

Defendants Lonzo Anderson Ball (“Ball”), Lameck Lukanga (“Lukanga”), and LifeLine Financial Group, LLC (“LifeLine”) (collectively, “Defendants”) demur unopposed to Plaintiff Gregory Alan Foster’s (“Foster”) (“Plaintiff”) first amended complaint (“FAC”). (Notice of Demurrer, pg. 2; C.C.P. §430.10(e).)

Defendants’ 3/5/24 request for judicial notice of the following filings in Big Baller Brand LLC v. Gregory Alan Foster, et al., LASC Case No. 19STCV11404 (“2019 Action”): (1) Complaint (D-RJN, Exh. 1); (2) Cross-Complaint (D-RJN, Exh. 2); (3) Stipulation Requesting Leave to File Amended Complaint and Granting Cross-Defendant Lonzo Anderson Ball Leave to File Cross-Complaint (D-RJN, Exh. 3); (4) Cross-Complaint of Ball for breach of fiduciary duty (D-RJN, Exh. 4); (5) Foster’s Motion for Leave to File Second Amended Cross-Complaint (D-RJN, Exh. 5); (6) Foster’s proposed Second Amended Cross-Complaint (D-RJN, Exh. 6); (7) 9/7/22 Order (D-RJN, Exh. 7); (8) Docket for the 2019 Action as of 3/4/24 (D-RJN, Exh. 8) is granted.

Before filing a demurrer, the moving party must meet and confer in person, by telephone, or by video conference with the party who filed the pleading to attempt to reach an agreement that would resolve the objections to the pleading and obviate the need for filing the demurrer. (C.C.P. §430.41, emphasis added.)

Defendants’ counsel declares that on February 13, 2024, he set a letter to Plaintiff’s counsel detailing the bases for Defendants’ demurrer, and on February 22, 2024, Plaintiff’s counsel responded to the meet and confer letter and rejected Defendants’ contentions, forcing Defendants to file the instant demurrer. (Decl. of Haring ¶2.) Defendants’ counsel is in violation of C.C.P. §430.41 because he did not attempt to meet and confer with Plaintiff’s counsel in person, by telephone, or by video conference. However, failure to sufficiently meet and confer is not grounds to overrule or sustain a demurrer. (C.C.P. §430.41(a)(4); Dumas v. Los Angeles County Board of Supervisors (2020) 45 Cal.App.5th 348, 355; Olson v. Hornbrook Community Services District (2019) 33 Cal.App.5th 502, 515.) Accordingly, the Court will consider Defendants’ demurrer.

Plaintiff filed his initial Complaint on September 11, 2023. On February 2, 2024, Plaintiff filed the operative FAC against Defendants alleging three causes of action: (1) malicious prosecution; (2) intentional interference with contractual relations; and (3) unjust enrichment. Plaintiff’s causes of action arise from Defendant Ball’s allegations in the 2019 Action. (See FAC ¶1.)

Defendants filed the instant demurrer on March 5, 2024. As of the date of this hearing no opposition has been filed.

Defendants demur to the 1st, 2nd, and 3rd causes of action on the basis they fail to state facts sufficient to constitute causes of action. (Demurrer, pg. 3; C.C.P. §430.10(e).)

“[A] demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.) 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. (See Donabedian v. Mercury Insurance Co. (2004) 116 Cal.App.4th 968, 994 [in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents].) For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true, but the reviewing court does not assume the truth of conclusions of law. (Aubry v. Tri-City Hospital District (1992) 2 Cal.4th 962, 967.)

“To establish a cause of action for the malicious prosecution of a civil proceeding, a plaintiff must plead and prove that the prior action (1) was commenced by or at the direction of the defendant and was pursued to a legal termination in his, plaintiff’s, favor; (2) was brought without probable cause; and (3) was initiated with malice.” (Bertero v. National General Corp. (1974) 13 Cal.3d 43, 50, internal citations omitted.)

Plaintiff alleges on or about April 2, 2019, Ball filed a civil action for fraud, breach of fiduciary duty, conversion and accounting in the Superior Court of Los Angeles County (Case No. 19STCV11404) (“2019 Action”). (FAC ¶61.) Plaintiff alleges more than two years later, on September 9, 2021, Ball sat for deposition and gave testimony that directly contradicted the allegations in the 2019 Action. (FAC ¶62.) Plaintiff alleges at that time, Ball finally revealed that the claims alleged in the 2019 Action were completely unfounded and outright falsehoods. (FAC ¶62.) Plaintiff alleges whereas Plaintiff claimed that he was the “manager” and 51% owner of Big Baller Brand (BBB) in the 2019 Action, his deposition testimony revealed that he was never involved with the business as a manager or owner. (FAC ¶62.)

Plaintiff alleges shortly after that deposition, Ball dismissed his claims for breach of fiduciary duty and conversion on September 27, 2021, and the dismissal of those claims constitutes a favorable termination on behalf of Defendant. (FAC ¶63.) Plaintiff alleges the deposition testimony given by Ball clearly evidences a lack of probable cause for the dismissed claims. (FAC ¶63.) Plaintiff alleges Ball acted with malice by knowingly misrepresenting his ownership interest and management role with respect to BBB in the 2019 Action, which misrepresentations were exposed more than two years after the lawsuit by his deposition testimony. (FAC ¶64.) Plaintiff alleges Ball testified that he did not ever have an ownership interest or management role in BBB. (FAC ¶64.) Plaintiff alleges Ball further testified at his deposition that he did not sign any paperwork to become an owner of BBB and did not believe he was an owner, despite asserting a 51% ownership stake in BBB in the 2019 Action. (FAC ¶64.) Plaintiff alleges Ball went on to admit that Defendant was never his financial advisor and did not have access to his financial accounts or information. (FAC ¶64.) Plaintiff alleges Ball acted maliciously by initiating the civil action with full knowledge that his claims were completely untrue in that (1) he had no ownership interest or managerial role in BBB, and (2) Plaintiff was not his financial advisor and did not have access to his personal finances, as Lonzo admitted in his deposition testimony. (FAC ¶65.)

Plaintiff alleges as a direct and proximate result of Ball’s 2019 Action, Plaintiff suffered financial loss, loss of business relations, loss of reputation, and emotional distress in an amount to be determined at trial. (FAC ¶66.) Plaintiff alleges as a further direct and proximate result of the 2019 Action, Plaintiff suffered damages as in for attorneys’ fees and costs associated with the defense of that action. (FAC ¶67.) Plaintiff alleges his attorneys’ fees and legal costs incurred as a result of the 2019 Action are at least $600,000.00, or in an amount ultimately to be determined at trial. (FAC ¶67.)

Plaintiff fails to allege the underlying action was resolved in his favor. Here, the underlying action, the 2019 Action, is still pending. While Ball dismissed one of his two claims against Foster, Ball still has a pending claim for breach of fiduciary duty against Foster, meaning the underlying action has not yet terminated. (D-RJN, Exh. 4.) Regardless of whether Ball’s claim in the 2019 Action remains pending in a complaint or cross-complaint, Plaintiff cannot ignore that a malicious prosecution claim requires the resolution of the entire underlying action, not just one of two causes of action. (See Crowley v. Katleman (1994) 8 Cal.4th 666, 686 [noting, “a malicious prosecution suit may be maintained where only one of several claims in the prior action lacked probable cause does not alter the rule there must be a favorable termination of the entire action”], emphasis added.)

Accordingly, Defendants’ demurrer to Plaintiff’s 1st cause of action is sustained without leave to amend.

A claim for intentional interference with contractual relations must allege: “(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) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1148.)

C.C.P.§339 provides a two-year statute of limitations applies to an action upon a contract. (See C.C.P. §339(1); Trembath v. Digardi (1974) 43 Cal.App.3d 834, 836; see also Committee for Sound Water & Land Development v. City of Seaside (2022) 79 Cal.App.5th 389, 400 [noting that a demurrer on statute of limitations is proper were the defect “clearly and affirmatively appear[s] on the face of the complaint and matters subject to judicial notice”], internal quotations omitted.) The claim accrues “when it is complete with all of its elements—those elements being wrongdoing, harm, and causation.” (Gilkyson v. Disney Enterprise, Inc. (2016) 244 Cal.App.4th 1336, 1341, internal quotations omitted.)

Generally, the statute of limitations on a claim begins to run when the aggrieved party discovers the facts constituting his or her claim. (Kline v. Turner (2001) 87 Cal.App.4th 1369, 1373.) However, “courts interpret discovery in this context to mean not when the plaintiff became aware of the specific wrong alleged, but when the plaintiff suspected or should have suspected that an injury was caused by wrongdoing.” (Id.) “Wrong and wrongdoing in this context are understood in their lay and not legal senses.” (Id. at pg. 1374.) Put another way, the statute of limitations begins to run on a claim when the plaintiff has “notice or information of circumstances to put a reasonable person on inquiry.” (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1110-1111.)

Plaintiff alleges on or about April 2, 2016, he became a founding member on owner a one-third interest in Ball Sports Group, Inc. (“BSG”) and its related entities, including but not limited to Ball Media and Publishing, LLC, Ball Merchandising, LLC, and Big Baller Brand, LLC (“BBB”) pursuant to a 2016 agreement. (FAC ¶69, Exh. 1.) Plaintiff alleges he also had beneficial business relationships with BBB vendors, customers, social media influencers, producers, and other business partnerships that he collaborated with. (FAC ¶70.)

Plaintiff alleges the false accusations publicized by Ball and Humble, as well as the completely meritless lawsuit filed by Ball, caused the termination of Plaintiff’s Facebook reality-show contract through Bunim & Murray Production. (FAC ¶71, Exh. 2.) Plaintiff alleges his consulting producer contract for the reality show was canceled immediately after ESPN published the article containing the false accusations. (FAC ¶71.)

Plaintiff alleges he was an intended third-party beneficiary to the contract. (FAC ¶72.) Plaintiff alleges that contract, between Marathon Media Consulting, Inc., and Crosswalk Productions, LLC, was expressly intended to benefit Plaintiff. (FAC ¶72.) Plaintiff alleges as an intended third-party beneficiary, Plaintiff has standing to assert a cause of action for intentional interference with the contract between Marathon Media Consulting, Inc., and Crosswalk Productions, LLC. (FAC ¶72.)

Plaintiff alleges the accountants for BBB, Humble, and LifeLine were fully aware of the extent of Plaintiff’s business relationships and his role in BSG and BBB operations. (FAC ¶73.) Plaintiff alleges Defendants were also aware of Plaintiff’s consulting contract for production of the Facebook reality show. (FAC ¶73.)

Plaintiff alleges Defendants engaged in several intentional acts to damage Plaintiff’s business relationships, including but not limited to: (i) Ball filed a frivolous lawsuit in 2019 falsely alleging 51% ownership of BBB; (ii) Ball gave an ESPN interview in 2019 accusing Plaintiff of fraud and severing ties; (iii) Humble gave media interviews falsely accusing Plaintiff of stealing $1.5M fromBall; (iv) Ball, Humble and LifeLine closed BBB’s bank account using a forged document; and (v) They collectively prevented Plaintiff from accessing BBB accounts, funds, and business records. (FAC ¶74.)

Plaintiff alleges Defendants’ above-described interference was a substantial factor in causing Alan to suffer economic harm in that the false accusations against Alan disrupted his standing with BBB partners and vendors. (FAC ¶75.) Plaintiff alleges his reputation was severely damaged by the false allegations, costing him the consulting contract marked as Exhibit 2. (FAC ¶75.) Plaintiff alleges Defendants further interfered with Plaintiff’s business relations when Humble directed Ball to present forged documents in an unauthorized and fraudulent attempt to close the BBB bank account. (FAC ¶75.) Plaintiff alleges the account was frozen by the bank as a result of the bank’s skepticism regarding the attempt to shutter the account. (FAC ¶75.) Plaintiff alleges this effectively prevented him from continuing to operate BBB because he did not have access to BBB funds. (FAC ¶75.) Plaintiff alleges these actions rendered it impossible for Plaintiff to manage BBB operations. (FAC ¶75.) Plaintiff alleges he was not able to regain access to the BBB account. (FAC ¶75.)

Plaintiff alleges he first discovered the essential facts to support this cause of action during Ball’s deposition testimony on September 9, 2021. (FAC ¶76.) Plaintiff alleges prior to this deposition, Plaintiff was unable to discover these facts despite his reasonable diligence. (FAC ¶76.) Plaintiff alleges the deposition provided Plaintiff the first opportunity to discover the time, place, manner, and surrounding circumstances relating to Defendants’ alleged misconduct. (FAC ¶76.)

Plaintiff alleges he earned of Defendants’ key involvement in the interference alleged above for the first time during this deposition testimony. (FAC ¶77.) Plaintiff alleges he had no actual or presumptive knowledge of these facts prior to this deposition that would have enabled him to plead his claim earlier. (FAC ¶77.) Plaintiff alleges as a result, he suffered financial harm from loss of income and accounts, his professional reputation was irreparably harmed, and he suffered severe emotional distress. (FAC ¶78.)

Plaintiff lacks standing to assert the instant cause of action because he is not a party to any of the contracts at issue. An intentional interference claim requires a “valid contract between the plaintiff and a third party.” (Reeves, 33 Cal.4th at pg. 1148.) Here, none of the alleged contracts at issue were with Plaintiff. The Consulting Agreement is between two third-party entities (Crosswalk Productions, LLC and Marathon Media Consulting, Inc.). Additionally, the alleged disruption with vendors and business operations were with BBB or BSG’s vendors and operations, not Plaintiff’s. The injury alleges is to the entities, not the Plaintiff personally. Therefore, Plaintiff lack standing to assert the cause of action for intentional interference with contractual relations. (See Sirott v. Superior Court (2022) 78 Cal.App.5th 371, 381 [“The action is derivative, i.e., in the corporate right, if the gravamen of the complaint is injury to the corporation.”].)

Accordingly, Defendants’ demurrer to Plaintiff’s 2nd cause of action is sustained without leave to amend.

There is a split amongst California courts regarding whether unjust enrichment is an independent cause of action. Some courts have explicitly stated that “there is no cause of action in California for unjust enrichment.” (Melchior v. New Line Productions, Inc. (2003, 2nd Dist.) 106 Cal.App.4th 779, 793; McKell v. Washington Mutual, Inc. (2006, 2nd Dist.) 142 Cal.App.4th 1457, 1490; Jogani v. Superior Court (2008, 2nd Dist.) 165 Cal.App.4th 901, 911.) These courts conclude that unjust enrichment is “not a cause of action . . . or even a remedy, but rather a principle, underlying various legal doctrines and remedies. It is synonymous with restitution.” (McBride v. Boughton (2004) 123 Cal.App.4th 379, 387.)

Other California courts have recognized an independent cause of action for unjust enrichment. (See First Nationwide Savings v. Perry (1992, 6th District) 11 Cal.App.4th 1657, 1662-1663; Lectrodryer v. SeoulBank (2000, 2nd Dist.) 77 Cal.App.4th 723, 726.)

Regardless of whether Plaintiff can assert a cause of action for unjust enrichment, Plaintiff’s cause of action is time-barred by C.C.P. §339 because it is an action based on a contract not in writing. Plaintiff alleges he “contributed” to BSG and BBB until Ball “cut ties” with him when the ESPN Article was published. (FAC ¶¶81, 84.) As alleged, this happened nearly five years ago, well outside the two-year statute of limitations on his claim. Plaintiff’s 2019 Cross-Complaint has similar claims against BBB, alleging that the entities failed to pay Foster back for expenses and other obligations he incurred for the entities. (D-RJN, Exh. 2 at ¶¶144, 146, 174-176.) Plaintiff knew he was excluded from the business by the time the his initial Cross-Complaint was filed in the 2019 Action, and knew he was owed money for his contributions to the entities at that time. Nothing in the FAC alleges what new information he learned from Ball’s deposition that justifies his delay in asserting his untimely claim.

Accordingly, Defendant’s demurrer to Plaintiff’s 3rd cause of action is sustained without leave to amend.

Defendants’ unopposed demurrer to Plaintiff’s 1st, 2nd, and 3rd causes of action is sustained without leave to amend.

Hon. Daniel M. Crowley

Judge of the Superior Court