Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 205 

 

 

MOVING PARTY: Defendants Thomas Oliver, Codie Elaine Oliver, The Confluential Company, LLC, Confluential Content, Inc., Confluential Development, LLC, Confluential Productions, LLC, Black Love Inc., and T. Edward Oliver, Inc. 

 

RESPONDING PARTY: Plaintiff Adam Platzner 

 

 (Id. ¶30.) 

On July 25-26, 2019, Platzner and Oliver exchanged emails in which the parties confirmed the foregoing material terms.  (Id. ¶31.)  While Platzner and the Olivers expected that ancillary terms and boilerplate provisions would be included in a long form agreement to be signed at some later date, the parties agreed that the 2019 Agreement took immediate effect, as evidenced by the fact that the parties began to perform all material terms of the 2019 Agreement no later than November 2019.  (Id., ¶32.) 

In addition to the Olivers, Plaintiff has sued the following entities which Plaintiff claims are the new ventures referenced in the July 2019 Agreement: Confluential Films, LLC, Confluential Content, Inc., Confluential Productions, LLC, Confluential Development LLC, The Confluential Company, LLC, Black Love, Inc., and Black Love Global LLC (collectively the “Entity Defendants”).  (Id. ¶¶13-19.) 

Plaintiff claims that under the alleged July 2019 agreement, he is “the owner of 15% of Confluential Content, Inc., 50% owner of Confluential Development LLC, the 50% owner of Confluential Productions, LLC, the 50% owner of Confluential Company LLC, the 10% owner of Black Love, Inc., and the 50% owner of Black Love Global LLC” (collectively the “Equity Interests”).  (Id., ¶70.) 

The operative SAC alleges claims against all Defendants for (1) breach of contract, (2) breach of fiduciary duty, (3) conversion, (4) money had and received, (5) quantum meruit, (6) breach of implied partnership agreement, (8) breach of implied joint venture agreement, and (8) breach of the implied covenant of good faith and fair dealing.   

This hearing is on Defendants’ demurrer and motion to strike.  Defendants argue that (1) Plaintiff’s new allegations are a sham pleading and are inconsistent with Plaintiff’s prior allegations in the complaint and First Amended Complaint (“FAC”); (2) the contract claims are an unenforceable agreement to agree, are barred by the statute of frauds, and there was no meeting of the minds; (3) the contract claims against the Entity Defendants fail because they did not exist at the time of the agreement,; (4) Plaintiff’s breach of fiduciary duty claim fails because Plaintiff has not identified what fiduciary duty was breached or how; (5) Plaintiff’s conversion claim fails because it does not identify any personal property Plaintiff possessed that is capable of conversion; (4) Plaintiff’s claims for money had and received fail for the same reasons as his contract claims; and (5) Plaintiff made unauthorized amendments, including adding Black Love Global LLC and repleading claims against the Entity Defendants in Plaintiff’s quantum meruit claim that the Court rejected.   

EVIDENTIARY OBJECTIONS 

The Court overrules Objection Nos. 1, 2, 3 and sustains Objection No. 5 to the Declaration of Thomas Oliver and the exhibits attached thereto.   

LEGAL STANDARD 

“[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 Ins. 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 Hosp. Dist. (1992) 2 Cal.4th 962, 967.)  

Further, the court may, upon motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading.  (Code Civ. Proc., § 436, subd. (a).)  The court may also strike 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. (Code Civ. Proc., § 436, subd. (b).)  The grounds for a motion to strike are that the pleading has irrelevant, false, or improper matter, or has not been drawn or filed in conformity with laws.  (Code Civ. Proc., § 436.)  The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Code Civ. Proc., § 437.) 

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 (court shall not “sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment”); Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037 (“A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment.”); Vaccaro v. Kaiman (1998) 63 Cal.App.4th 761, 768 (“When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend.”).)  The burden is on the complainant to show the Court that a pleading can be amended successfully. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) 

 

MEET AND CONFER¿ 

Code Civ. Proc. §430.41 requires that “[b]efore filing a demurrer pursuant to this chapter, the demurring party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.” (CCP § 430.41(a).)¿ The parties are to meet and confer at least five days before the date the responsive pleading is due. (CCP § 430.41(a)(2).)¿ Thereafter, the demurring party shall file and serve a declaration detailing their meet and confer efforts. (CCP § 430.41(a)(3).)¿ Defendants submit the declaration of Carla Wirtschafter attesting that the parties met and conferred by letter and email, and defense counsel offered to meet and confer by phone but the parties never did so.  While these attempts fall short of the requirements that the parties meet and confer in person or by telephone, a determination by the Court that the meet and confer process was insufficient “shall not be grounds to overrule or sustain a demurrer.”  (CCP § 430.41(a)(4).)¿ 

REQUEST FOR JUDICIAL NOTICE 

Defendants request judicial notice of the July 25-26, 2019 and March 7, 2021 emails, referenced in the Complaint.  Where a plaintiff references a document in his or her complaint, but fails to attach a copy of that document to the complaint, the Court may take judicial notice of the document. (See, e.g., Ingram v. Flippo (1999) 74 Cal.App.4th 1280, 1285 n.3 (judicial notice appropriate where complaint referred to, and excerpted quotes from, documents not attached as exhibits to the complaint); Purcell v. Colonial Ins. Co. (1971) 20 Cal.App.3d 807, 810 (taking judicial notice of agreement referenced but not attached to the complaint).  Plaintiff references the emails in various portions of the SAC.  (See, e.g., SAC ¶¶ 8, 31, 45.)  

Defendants also request judicial notice of the prior complaints in the lawsuit -- the original complaint filed on May 23, 2022 and the FAC, filed on March 8, 2023.  The Court may take judicial notice of court records.  (Cal. Evid. Code §§ 452(c) and 453.)   

Defendants also request judicial notice of excerpts from the California Secretary of State website.  The Court may take judicial notice of information that is publicly available and not subject to reasonable dispute.  (Cal. Evid. Code §§ 452(h) and 453.)   

Based on the foregoing, the Court grants Defendants’ request for judicial notice in its entirety.   

DISCUSSION 

Contract Claims 

Defendants argue that the SAC is a sham pleading and contains allegations inconsistent with those plead in the original complaint and FAC, and once those prior allegations are read into the SAC, there is at most an unenforceable agreement to agree.  The Court agrees. 

In both the original complaint and the FAC, Plaintiff alleged that on July 24, 2019 he had a discussion with the Olivers that resulted in a handshake deal that was memorialized in a July 25 and 26 email exchange between Plaintiff and Tommy (the “July Emails”).  Plaintiff twice alleged (in his original complaint and the FAC) that the July Emails “clearly memorializ[ed] the [parties’] respective rights and obligations,” “confirmed … all of the material terms,” “memorialized all of the material terms of that agreement,” and “reflected the correct terms of the [parties’] agreement.”  (FAC ¶¶ 29, 31, 49, 50.)  The Court found the July Emails constituted an unenforceable agreement to agree.  (5/18/23 Order at pp. 4-5.)   

In the SAC, Plaintiff again alleges there was an oral agreement reached on July 24, 2019 and the agreement was put in writing in the following days, but now Plaintiff alleges the July Emails merely included “several of the terms that would govern Platzner’s employment relationship” rather than “all material terms” and all “rights and obligations.”  (SAC ¶¶30-32.)   

Under the sham pleading doctrine, when a complaint contains allegations that are fatal to a cause of action, a plaintiff cannot cure the defect simply by filing an amended complaint that omits the problematic facts or pleads facts inconsistent with those alleged earlier.  (Hendy v. Losse (1991) 54 Cal.3d 723, 742-743; Zakk v. Diesel (2019) 33 Cal.App.5th 431, 447.)  Where no explanation for an inconsistency is offered, the trial court is entitled to conclude that the pleading party’s cause of action is a sham and sustain a demurrer without leave to amend.  (Zak, 33 Cal.App.5th at 447.) 

Because the Plaintiff has not explained the inconsistencies between his pleadings, the Court must read the original defect into the SAC – i.e., Plaintiff’s allegations that the July Emails represent the agreement and included all material terms – and disregard the new and contradictory terms.  Because the Court already found that the July emails are an unenforceable agreement to agree, Plaintiff cannot escape the same result in his SAC with inconsistent allegations.  (Banis Rest. Design Inc. v. Serrano (2005) 134 Cal.App.4th 1035, 1044 (“Absent an explanation for the inconsistency, a court will read the original defect into the amended complaint, rendering it vulnerable to demurrer again.”); Hendy, 54 Cal.3d at 743 (“In such a case, the original defects infect the subsequent pleading so as to render it vulnerable to a demurrer.”). 

Plaintiff’s reliance on Zakk v. Diesel (2019) 33 Cal.App.5th 431, 449 is unavailing.  There, the prior versions of the complaint alleged a single overarching contract while the third amended complaint no longer alleged the overarching contract but instead alleged separate contracts with respect to each film.  The Court concluded this change was merely a clarification and not a sham pleading because the prior versions of the complaint implied there were separate contracts and in fact defendant’s demurrer argued it was uncertain whether the plaintiff alleged one contract or several.  (Id. at 448-449.)  Here, there is a stark inconsistency between Plaintiff’s allegation in his prior complaints that the July emails “confirmed all material terms” and the allegation in the SAC that the July emails merely confirmed some of the terms of the parties’ agreement.  This is not a mere clarification but is a clear contradiction.   

Defendants also argue that Plaintiff’s implied contract claims (6th and 7th causes of action), fail to plead the existence of a partnership or joint venture.  The Court agrees. 

“An essential element of a partnership or joint venture is the right of joint participation in the management and control of the business … Absent such right, the mere fact that one party is to receive benefits in consideration of services rendered or for capital contribution does not, as a matter of law, make him a partner or joint venturer.”  (Kaljian v. Menezes (1995) 36 Cal.App.4th 573, 586; Orosco v. Sun-Diamond Corp. (1997) 51 Cal.App.4th 1659, 1666 (“There are three basic elements of a joint venture: the members must have joint control over the venture (even though they may delegate it), they must share the profits of the undertaking, and the members must each have an ownership interest in the enterprise.”)    

Here, Plaintiff pleads the implied contract claims as an alternative to the 2019 Agreement.  According to Plaintiff, the claims survive even if the parties had not reached the 2019 Agreement.  (SAC ¶¶89, 96.)  Plaintiff alleges that the parties’ conduct implied the existence of a partnership or joint venture, including that (1) Platzner used the title “partner” in his email without objection from Defendants, (2) Defendants made public and private references to Platzner as a “partner” on the same level as the Olivers in their pitchdecks for Confluential Content and other materials, (3) Defendants drafted and approved a press release that led to a news article in which Platzner was identified as an “equity partner” in Confluential Content, and (4) Defendants made express statements that Platzner would share in the profits of Confluential and Black Love enterprises through his equity stake in the businesses.  (Id., ¶¶ 90, 98.)   

None of these allegations show the parties agreed Plaintiff would have the right of joint participation in the management and control of the businesses.  Accordingly, Plaintiff’s implied partnership and joint venture claims also fail.     

Defendants next argue that the contract claims against the Entity Defendants must fail because these entities did not exist at the time the alleged contract was formed in July 2019.  The Court agrees. 

As reflected on the California Secretary of State website, Confluential Content Inc. was not formed until January 2020. Confluential Development, LLC was formed in October 2021. Confluential Productions, LLC was formed in August 2021.  The Confluential Company was formed in April 2022.  Black Love Productions and Black Love X were never formed.  (Oliver Decl. ¶3.)   

Plaintiff argues that there could still be a contract even though the Entity Defendants were not in existence.  Plaintiff cites to cases holding that there could be a contract even though some terms are uncertain or left for future agreement.  Plaintiff’s argument misses the point.  The issue is not whether there could be a contract about entities that are not yet formed.  Rather, the question is whether there can be a contract with entities that were not yet formed.  A company that did not exist in July 2019 cannot possibly form an agreement before it exists.          

Plaintiff also alleges that the “entity defendants are bound by the Olivers’ commitment under the 2019 Agreement as their alter ego.”  (SAC ¶51.)  But these conclusory allegations are insufficient to establish any agreement with the Entity Defendants.  Plaintiff fails to allege the elements of an alter ego theory, including a unity of interest and resulting injustice.  (Stansfield v Starkey (1990) 220 Cal.App.3d 59, 74, 75 (sustaining demurrer to alter ego claims without leave to amend where complaint’s allegations “fail to include facts showing a unity of interest and a resultant injustice, prerequisites to an alter ego theory”).)  As a practical matter, the Entity Defendants also could not be alter egos of the Olivers as they did not exist at the time of contracting.   

Accordingly, the Court SUSTAINS the demurrer to Plaintiff’s first, sixth, seventh, and eighth causes of action. 

Breach of Fiduciary Duty 

Defendants argue that Plaintiff has failed to allege a fiduciary relationship.  The Court agrees. 

Plaintiff’s claim for breach of fiduciary duty is tied directly to his claim that he is entitled to the Equity Interests, and he was a partner and joint venturer.  As an equityholder, he would be owed a fiduciary duty by the Olivers who were directors and in certain cases, majority shareholders of the Entity Defendants.  (Jones v. H.F. Ahmanson & Co. (1969) 1 Cal.3d 93, 108-110; Remillard Brick Co. v. Remillard-Dandini Co. (1952) 109 Cal.App.2d 405, 419-421.)  As joint venturers and partners, the Olivers would also owe a fiduciary duty to Plaintiff. (MacIsaac v. Pozzo (1945) 26 Cal. 2d 809, 813.)  

However, as the Court has concluded there is no contract entitling Plaintiff to the Equity Interests and there is no implied partnership or joint venture, there must also be no fiduciary relationship.  Where there is no fiduciary relationship, there can be no breach of a fiduciary duty.  (Kenny v. Citizens Nat. Trust & Sav. Bank of L.A. (1954) 269 P.2d 641, 647.) 

Accordingly, the Court SUSTAINS the demurrer as to Plaintiff’s breach of fiduciary duty claim.       

Conversion 

Defendants argue that Plaintiff’s conversion claim fails as a matter of law because Plaintiff has not sufficiently alleged ownership or right to possession of the property he claims was wrongfully converted.  The Court agrees. 

Conversion is the wrongful exercise of dominion over the property of another.  The elements of a conversion claim are: (1) the plaintiff’s ownership or right to possession of the property; (2) defendant’s conversion by a wrongful act or disposition of property rights, and (3) damages.  (Lee v. Hanley (2015) 61 Cal.4th 1225, 1240.) 

Here, Plaintiff alleges that Defendants converted Plaintiff’s (1) stock or membership interests in the Entity Defendants, and (2) any dividends issued by the Entity Defendants.  (SAC ¶ 71.)  However, the Court has concluded there is no contract entitling Plaintiff to the Equity Interests.  Accordingly, Plaintiff has not alleged ownership or right to possession of the stock or dividends he claims was converted.  

Moreover, Plaintiff’s allegations are insufficient to support a conversion claim because they amount to nothing more than money owed.  (Voris v. Lampert (2019) 7 Cal.5th 1141, 1151-52 (“[A] cause of action for conversion of money can be stated only where a defendant interferes with the plaintiff’s possessory interest in a specific identifiable sum; the simple failure to pay money owed does not constitute conversion.  Were it otherwise, the tort of conversion would swallow the significant category of contract claims that are based on the failure to satisfy mere contractual right[s] of payment.”); PCO Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro LLP (2007) 150 Cal.App.4th 384, 395 (“Money cannot be the subject of a cause of action for conversion unless there is a specific, identifiable sum involved.”).)  

Therefore, the Court SUSTAINS the demurrer as to Plaintiff’s claim for conversion. 

Money Had and Received 

Defendants argue that the claim for money had and received must fail for the same reasons as the contract claim.  The Court agrees.   

The crux of Plaintiff’s claim for money had and received is that he is an equity holder of the Entity Defendants who received $20 million in financing that was then allegedly distributed as dividends to other equity holders in the Entity Defendants, except Plaintiff.  (SAC ¶¶ 75-77.)  However, the Court has concluded that Plaintiff is not an equity holder of the Entity Defendants.  Accordingly, Plaintiff did not have a right to the dividends or distributions from the $20 million in financing.   

The Court, therefore, SUSTAINS the demurrer as to Plaintiff’s claim for money had and received.     

Unauthorized Amendments 

Defendant asks the Court to strike two amendments: (1) adding a brand new defendant to the lawsuit (Black Love Global LLC), and (2) making additional allegations as to the fifth cause of action for quantum meruit on which the Court overruled a demurrer.  But Black Love Global LLC is not a new defendant; it was already named in the FAC.  The Court also denies the request to strike the additional allegations in the quantum meruit claim, as the Court would have granted leave to amend to include these allegations, and the motion to strike would only needlessly result in delay and another motion.   

CONCLUSION 

Based on the foregoing, the Court SUSTAINS IN PART and OVERRULES IN PART Defendants’ demurrer.  The Court sustains the demurrer to Plaintiff’s first, third, fourth and eighth causes of action without leave to amend.  The Court sustains the demurrer to the second, sixth and seventh causes of action against the Olivers with 20 days’ leave to amend and against the Entity Defendants without leave to amend.     

 

IT IS SO ORDERED. 

 

DATED: August 23, 2023 ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court