Judge Deirdre Hill, Case 20TRCV00581 2023-02-07 Tentative Ruling

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Moving Parties: Defendants Jaynette “JJ” Denham, Eric Edenholm, Imports of Scottsdale, LLC, and Zoey Air, LLC

On August 17, 2020, plaintiff Michael Monsalve filed a complaint against Eric Edenholm, Jaynette “JJ” Denham, Zoey Air LLC, and Imports of Scottsdale LLC for (1) conversion, (2) fraud – intentional misrepresentation, and (3) fraud – false promise.

On February 24, 2022, the court granted with leave to amend defendant Jaynette Denham’s motion for judgment on the pleadings as to the 2^nd and 3^rd causes of action.

On March 16, 2022, plaintiff filed a First Amended Complaint against Eric Edenholm, Jaynettte “JJ” Denham, Zoey Air LLC, Imports of Scottsdale, LLC, Galactic Ventures, LLC, and Mark Harlan Brooks for (1) conversion, (2) fraud-intentional misrepresentation, (3) fraud-false promise, (4) common count, (5) quiet title, (6) injunctive relief, and (7) declaratory relief.

On May 25, 2022, the court overruled the demurrer as to the 1^st, 2^nd, 3^rd, 4^th, 5^th, and 7^th causes of action as to defendants Eric Edenholm, Imports of Scottsdale, and Zoey Air; sustained without leave to amend as to the 2^nd, 3^rd, 4^th, and 5^th causes of action as to defendant Jaynette “JJ” Denham; overruled as to the 1^st and 7^th causes of action as to Denham; and sustained with leave to amend as to the 6^th cause of action for quiet title.

On June 13, 2022, plaintiff filed a Second Amended Complaint for (1) conversion, (2) fraud-intentional misrepresentation, (3) fraud-false promise, (4) common count, (5) injunctive relief, (6) quiet title, and (7) declaratory relief.

On August 23, 2022, the court sustained the demurrer with leave to amend the 6^th cause of action and overruled it as to the 7^th cause of action.

On October 25, 2022, the parties stipulated and the court ordered that plaintiff file a Fourth Amended Complaint as the exhibits were inadvertently excluded from the Third Amended Complaint.

On November 1, 2022, plaintiff filed a Fourth Amended Complaint for (1) conversion, (2) fraud-intentional misrepresentation, (3) fraud-false promise, (4) common count, (5) injunctive relief, and (6) declaratory relief.

“The court may, upon a motion . . ., or at any time in its discretion, and upon terms it deems proper: (a) Strike any irrelevant, false, or improper matter inserted in any pleading. (b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.” CCP §436(b).

CCP §431.10 states: “(a) A material allegation in a pleading is one essential to the claim or defense and which could not be stricken from the pleading without leaving it insufficient as to that claim or defense.

(b) An immaterial allegation in a pleading is any of the following: (1) An allegation that is not essential to the statement of a claim or defense. (2) An allegation that is neither pertinent to nor supported by an otherwise sufficient claim or defense. (3) A demand for judgment requesting relief not supported by the allegations of the complaint or cross-complaint.

The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. CCP §437.

Defendants request that the court strike page 10, lines 20-21 in the Fourth Amended Complaint, which states, “For a court judgment determining the ownership rights to the Ferrari, March Race Car, and Porsche Cup Car.”

In the Fourth Amended Complaint, plaintiff alleges that Eric Edenholm resides in Arizona, has a car dealer license and is in the business of buying and selling cars. He is the ex-husband of defendant Jaynette “JJ” Denham and owner of Import of Scottsdale, LLC. FAC, ¶2. Denham is owner of Zoey Air LLC and “manager” of Imports of Scottsdale, LLC. Id., ¶3. On March 14, 2016, Edenholm agreed to sell his 1958 Ferrari 250 Tour de France to plaintiff for $1 million. The parties agreed that defendant would have the option to buy back the Ferrari for the same $1 million at any time plus any unpaid interest that might be due. The agreed upon interest rate was 10% annually, to be paid to plaintiff monthly. Id., ¶10. Defendant Edenholm gave plaintiff an appraisal report dated April 7, 2012, which gives the Ferrari a FMV of between $2.8 million and $3.2 million. Id., ¶11. Plaintiff wired $1 million to Edenholm through his LLC. In turn, Edenholm gave the Arizona title to plaintiff and put title in plaintiff’s name. Id., ¶12. Unbeknownst to plaintiff, on March 25, 2016, Edenholm ordered a duplicate title of the Ferrari. Id., ¶13. Plaintiff transferred title to his name in November 2017 and received a new California title for the Ferrari. Id., ¶14.

Plaintiff further alleges that Edenholm contacted plaintiff in December 2019 stating he had a buyer for the Ferrari that he sold to plaintiff. Edenholm assured plaintiff he would receive the sale proceeds of the Ferrari, and plaintiff agreed to return the Ferrari to Edenholm. Id., ¶15. Edenholm took possession of the vehicle and pretended to act as if the buyer he was speaking to was being difficult and dragging his feet with the sale. In reality, Edenholm took out a loan against the Ferrari in the amount of $635,000 and then sold it using the duplicate title. Id., ¶16. Edenholm has not paid plaintiff for the sale of his Ferrari. Id., ¶17.

Plaintiff further alleges that on May 19, 2020, defendant Denham, acting as an agent on behalf of Edenholm, tried to induce plaintiff into releasing Edenholm from his obligations by providing plaintiff a March Race Car and a Porsche Cup Car in exchange. This was not an offer made in good faith as plaintiff knew the two vehicles are in Denham and Edenholm’s names and he would be unable to sell the vehicles. Defendants worked together to further defraud plaintiff by offering two vehicles that are of a lesser value than the $1 million that is owed to plaintiff. Id., ¶18.

Plaintiff also alleges that in May 2020, defendant Denham acting on behalf of Edenholm, presented a settlement agreement. Plaintiff did not sign. Id., ¶19. On May 20, 2020, defendant Denham delivered the March Race and the Porsche Cup car to plaintiff’s garage in California. Thereafter, she offered to sell them in order to get plaintiff his $1 million returned. Then in June 2020, she asked for return of them. Plaintiff did not allow Denham to take possession of them. Id., ¶20.

Defendants argue that plaintiff is not entitled to judgment of ownership as to the three cars. Defendants contend that the court had previously sustained defendants’ demurrer to the quiet title cause of action with leave to amend, and plaintiff subsequently voluntarily dismissed his claim for quiet title. Defendants argue that the request in the prayer is not supported by any remaining cause of action.

In opposition, plaintiff argues that he properly seeks for the court to determine ownership rights over the three vehicles under the causes of action for fraud, declaratory relief, and conversion. As to the declaratory relief cause of action, plaintiff contends that his ownership rights over the cars are depending on the outcome of the lawsuit, so it was proper for him to request such relief under this claim. He also argues that remedies for conversion include specific recovery of the property, damages, and a quieting of title. As to the fraud causes of action, plaintiff contends that he can retain title to the property and also be awarded monetary relief.

The court rules as follows: The motion is DENIED. At the pleading stage, the prayer for relief for the court to determine “the ownership rights” to the vehicles is not irrelevant or improper. Under the cause of action for declaratory relief, plaintiff desires a judicial determination of the parties’ rights over the vehicles. Under the conversion cause of action, plaintiff alleges that defendants were title owners of the Ferrari and transferred it to another third party without plaintiff’s permission; plaintiff owned the Ferrari; defendants sold it with the duplicate title; and defendants delivered two other cars to plaintiff. As such, “ownership” is an issue and/or element to be resolved by a trier of fact and has a remedy.