Judge: Elaine W. Mandel, Case: 23SMCV01268, Date: 2023-11-02 Tentative Ruling

Case Number: 23SMCV01268    Hearing Date: March 6, 2024    Dept: P

Tentative Ruling

Hannley, et al. v. Mann, et al., Case No. 23SMCV01268

Hearing Date March 6, 2024

Defendant Cabo’s Demurrer to and Motion to Strike Portions of the Third Amended Complaint

Plaintiffs allege defendants engaged in a campaign of harassment and intimidation, targeting plaintiff Paul Edalat, by sending a package to his mother plaintiff Mali Saatchi, who sues demurring defendant Cabo, alleging Cabo conspired with other defendants and/or is an alter ego of defendant Blaine Labs.

On November 2, 2023 the court sustained Cabo’s demurrer to the first amended complaint due to failure to adequately allege conspiracy or alter ego liability. He now demurs to the third amended complaint (TAC), arguing plaintiffs still have not adequately alleged conspiracy or alter ego liability.

Conspiracy allegations against Cabo have not been amended since the FAC. This is a tacit admission that Cabo cannot be held liable as a co-conspirator of the other defendants.

The TAC alleges Cabo “obtained actual shares and control of Alternate Health in 2019 in return for allowing defendant Alternate Health (AH) to publicly claim an association with Cabo[.]” TAC, pgs. 14-15. The TAC alleges this was done to allow Cabo to claim AH was associated with his Mexican business operations, thereby inflating its stock price. This allegation is insufficient to establish any unity of ownership and interest between AH and Cabo.

The TAC includes no non-conclusory allegations showing comingling of personal and corporate assets, use of corporate assets for personal purposes, disregard of corporate formalities or other alter ego prerequisites. Eleanor Licensing, LLC, et al. v. Classic Recreations, LLC (2018) 21 Cal.App.5th 599, 615. The TAC alleges AH was insolvent but acknowledges the insolvency predated Cabo’s involvement with the company. The TAC alleges no specific acts or omissions by Cabo that would allow the court to disregard the corporate form and treat him as liable for AH’s conduct.

Even if the TAC adequately alleged facts showing Cabo was AH’s alter ego, the claims against Cabo are not based on any alleged conduct by AH. They are based on a package allegedly sent by defendant Blaine Labs, AH’s subsidiary. FAC ¶¶94-99, 135-138. The TAC contains no allegation that Cabo was Blaine Labs’ alter ego, nor any authority that a corporation’s alter ego can also be treated as alter ego of all that corporation’s subsidiaries. SUSTAINED without leave to amend.

Motion to Strike

Because the demurrer has been sustained without leave to amend as to all causes of action alleged against defendant Cabo, the motion to strike is MOOT.