Judge: Eddie C. Sturgeon, Case: 37-2021-00019573-CU-BC-CTL, Date: 2023-08-25 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

DEPT.:

EVENT DATE:

EVENT TIME:

HALL OF JUSTICE

TENTATIVE RULINGS - August 24, 2023

08/25/2023  09:00:00 AM  C-67 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Eddie C Sturgeon

CASE NO.:

CASE CATEGORY:

EVENT TYPE:

CASE TITLE: CASE TYPE:

Civil - Unlimited  Breach of Contract/Warranty Summary Judgment / Summary Adjudication (Civil) 37-2021-00019573-CU-BC-CTL REYNOSO VS CENTERPIECE LLC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion for Summary Judgment and/or Adjudication, 06/08/2023

Defendant JCSA Holdings Inc.'s Motion for Summary Judgment is GRANTED. Defendant JCSA's objections are overruled. With respect to Defendants Matt Jordan, Derek Dunlap, Centerpiece, LLC, Centerpiece USA, LLC, and Centerpiece Holdings, LLC's ('Centerpiece Defendants') Motion for Summary Judgment, the court will hear from the parties based on the questions enumerated at the bottom of this tentative order.

Next, as an initial matter, Plaintiffs' opposition papers were three days late, apparently filed pursuant to general motion deadlines rather than the special deadlines for motions for summary judgment.

Specifically, Code of Civil Procedure § 437c(b)(2) provides that any 'opposition to the motion shall be served and filed not less than 14 days preceding the noticed or continued date of hearing.' Plaintiffs missed this deadline. However, because the parties appear to have had the opportunity to fully respond, a lack of prejudice, and in the spirit of hearing cases on their merits, the court has considered the oppositions.

1. Summary Judgment Standard The moving party bears the initial burden of production to make a prima facie showing that there are no triable issues of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) A prima facie showing is one that is sufficient to support the position of the party in question; 'no more is called for.' (Id. at 851.) The moving party must show that the undisputed facts, when applied to the issues framed by the pleadings, entitle the moving party to judgment. (Juge v. County of Sacramento (1993) 12 Cal.App.4th 59, 66.) If the moving party carries this burden, it causes a shift, and the opposing party is then subject to its own burden of production to make a prima facie showing that a triable issue of material facts exists. (Aguilar, supra, 25 Cal.4th at 850.) Courts must view the evidence and inferences 'in the light most favorable to the opposing party.' (Id. at 843.) 2. JCSA's Motion a. First Cause of Action for Breach of Contract Defendant JCSA is undisputedly not a party to the consulting agreement which is the basis for this lawsuit. Rather Plaintiffs argue that JCSA is liable under the theory of alter ego. But Plaintiff has not sufficiently pled that JCSA is an alter ego. Rather, the FAC only states that dismissed individual parties Juan Carlos Alvarez and Santiago Alvarez are the alter egos of JCSA. The alter ego allegations in the complaint are directed instead at the Centerpiece entities. As such, '[b]ecause the alter ego theory was Calendar No.: Event ID:  TENTATIVE RULINGS

2952857  5 CASE NUMBER: CASE TITLE:  REYNOSO VS CENTERPIECE LLC [IMAGED]  37-2021-00019573-CU-BC-CTL not adequately pleaded, [Defendant] had no burden to show that plaintiffs' alter ego claim could not be established [and] . . . had no obligation to adduce evidence to negate an alter ego theory in [the] motion for summary judgment.' (Leek v. Cooper (2011) 194 Cal.App.4th 399, 416.) This is an adequate ground on which to grant summary judgment.

Even assuming alter ego had been properly pled, Plaintiffs have not produced sufficient evidence demonstrating a disputed issue of material fact that would allow their motion to survive summary judgment.

To succeed on an alter ego claim, Plaintiffs must show: (1) such a unity of interest and ownership between the corporations and their equitable owners that no separation actually exists, and (2) an inequitable result if the acts in question are treated as those of the corporation alone. (Sonora Diamond Corp. v. Super. Ct. (2000) 83 Cal.App.4th 523, 538.) Each case must be judged on its own factual circumstances. (Leek, supra, 194 Cal.App.4th at 417-418 [quoting and enumerating various factors as listed in Morrison Knudsen Corp. v. Hancock, Rothert & Bunshoft, LLP (1999) 69 Cal.App.4th 223, 249-250].) 'The treating of one corporation as the alter ego of another is an extreme remedy, to be sparingly used and is to be approached with caution.' (Davidson v. Seterus, Inc. (2018) 21 Cal.App.5th 283, 305-306 [cleaned up].) Normally, courts must respect corporate formalities and parent corporations are not liable for the acts of their subsidiaries. (Id. at 305.) 'However, where a parent corporation that owns all of a subsidiary's stock operates that subsidiary in a manner that renders the subsidiary merely an alter ego of its parent (and a ghost of its former, independent self), courts are able to pierce the corporate veil and treat the two entities as a single entity.' (Ibid.) Here, there no allegation that JCSA is the sole shareholder of the Centerpiece entities or vice versa. Nor have Plaintiffs provided adequate evidence that there is a unity of interest, commingled funds, identical ownership structure, identical set of officers and directors, sharing of offices, or disregard of corporate formalities. Indeed, Plaintiffs must acknowledge they allege JCSA was a separate investor that Plaintiffs found for the 'Centerpiece Venture.' Nothing in Plaintiffs' evidence supports a theory that, at some point, JCSA became the alter ego of Centerpiece. Plaintiffs provide some evidence that JCSA 'controlled' various aspects of the other Defendants or its approval was required for payments, but even assuming the truth of that evidence, it is insufficient to support a finding of alter ego. Finally, Plaintiffs have not provided any evidence of what inequitable result would occur if JCSA was not treated as an alter ego of the other Defendants.

For these reasons, summary judgment is granted as to the first cause of action against JCSA.

b. All Other Causes of Action Against JCSA Summary judgment must also be granted as to the third, fourth, fifth, and sixth causes of action against Defendant JCSA. As this court has previously ruled, the consulting agreement 'unambiguously indicates that a funding source, such as JCSA, is allowed to disallow any fees from the funding amount.' (ROA 46.) At all times, JCSA was within its right to disallow funding from its funding amount and that it did so does not create any liability. Even if later, JCSA agreed to pay Plaintiffs some amount of money, that does not amount to interference sufficient to establish any claims against JCSA particularly because pursuant to the email summary of the meeting, it appears undisputed that the $150,000 promised by JCSA was actually paid and the remaining $350,000 was owed by Defendant Jordan. (ROA 51, Ex. 5.) Because summary judgment is granted as to the breach of contract and interference claims, the motion is also granted as to the derivative UCL claim. Finally, the court agrees with Defendant JCSA that any declaratory relief sought – i.e., (i) 'when are the fees owed, and how much shall be paid;' (ii) the 'equity ownership owed Plaintiffs;' and (iii) when the equity ownership should convey (ROA 137, Oppo. at 19-20) – has nothing to do with JCSA.

The motion is granted.

3. Centerpiece Defendants' Motion Calendar No.: Event ID:  TENTATIVE RULINGS

2952857  5 CASE NUMBER: CASE TITLE:  REYNOSO VS CENTERPIECE LLC [IMAGED]  37-2021-00019573-CU-BC-CTL In addition to any argument the parties would like to make, the court asks that the parties address the following questions: a. At least $350,000 plus 1.25% equity is sought by Plaintiffs. How much more is allegedly at stake? b. Putting aside compliance with the Corporations Code, do the Centerpiece Defendants dispute that it is obliged to compensate Plaintiffs under the Consulting Agreement for the investments made by JCSA? c. Given the ambiguous language in the contract, is there a disputed issue of material fact whether payment was due after a 'reasonable' amount of time? d. Is it a question of fact whether Plaintiffs were brokers or that the investment was a security such that they were required to comply with the Corporations Code? e. Based on what evidence do Plaintiffs assert any cause of action against Derek Dunlap, individually? Calendar No.: Event ID:  TENTATIVE RULINGS

2952857  5