Judge: Gail Killefer, Case: 23STCV16662, Date: 2024-12-02 Tentative Ruling

Case Number: 23STCV16662    Hearing Date: December 2, 2024    Dept: 37

HEARING DATE:                 Monday, December 2, 2024

CASE NUMBER:                   23STCV16662

CASE NAME:                        Anthony Wheaton v. Grand Hustle Records, LLC

TRIAL DATE:                        Not Set

PROOF OF SERVICE:           OK

MOVING PARTY:                 Defendant Roc Nation, LLC

OPPOSING PARTY:             Plaintiff Anthony Wheaton

PROCEEDING:                      Demurrer to Second Amended Complaint

OPPOSITION:                        11 November 2024

REPLY:                                  21 November 2024

TENTATIVE:                         Defendant’s demurrer is sustained without leave to amend.  Defendant to give notice.  

Background

On July 18, 2023, Anthony Wheaton aka Sir Jinx ("Plaintiff") filed a Complaint against Grand Hustle Records, LC (“Grand Hustle”); Roc Nation, LC (“Roc Nation”), and Does 1 to 50. The Complaint alleges four causes of action: (1) breach of contract, (2) breach of good faith and fair dealing, (3) unjust enrichment, and (4) accounting.

On January 10, 2024, Defendant Roc Nation filed a demurrer to Plaintiff's Complaint. On March 27, 2024, the court sustained Roc Nation’s Demurrer with leave to amend as to all causes of actions.

On April 29, 2024, Plaintiff filed the operative First Amended Complaint (“FAC”). The FAC alleges five causes of action: (1) conversion, (2) unjust enrichment, (3) an accounting, (4) unfair business practices, and (5) breach of good faith and fair dealing.

On May 30, 2024, Defendant Roc Nation filed a demurrer to Plaintiff’s FAC. On July 3, 2024, Defendant Grand Hustle also filed a demurrer to Plaintiff’s FAC. On September 17, 2024, the court sustained Defendant’s demurrer to Plaintiff’s FAC with leave to amend as to the first, second, third, and fourth causes of action and without leave to amend as to the fifth cause of action.

On September 30, 2024, Plaintiff filed the operative Second Amended Complaint (“SAC”). The SAC alleges four causes of action: (1) conversion, (2) unjust enrichment, (3) an accounting, and (4) unfair business practices.

On October 29, 2024, Defendant Roc Nation filed a demurrer to Plaintiff’s SAC. On November 12, 2024, Plaintiff filed an opposition to Defendant Roc Nation’s demurrer. The matter is now before the court.

demurrer to Second Amended Complaint[1]

I.         Legal Standard

A.        Demurrer 

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (CCP, § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)¿“To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.”¿(C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.)¿For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded.¿ (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.)¿A demurrer “does not admit contentions, deductions or conclusions of fact or law.”¿(Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)¿¿ 

“Where the defect raised by a motion to strike or by demurrer is reasonably capable of cure, leave to amend is routinely and liberally granted to give the plaintiff a chance to cure the defect in question.” (CLD Construction, Inc. v. City of San Ramon (2004) 120 Cal.App.4th 1141, 1146.) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.)¿¿¿ 

II.        Discussion

Defendant Roc Nation demurs to the four causes of action alleged in Plaintiff’s SAC because it fails to allege any facts about Defendant Roc Nation and fails to state sufficient facts to support the causes of action alleged therein.  

The SAC alleges that Plaintiff is a musical producer who wrote and produced the song “Dope” for the Defendants. (SAC, ¶¶ 11, 12.) In 2016, Plaintiff registered the song “Dope” with Goonz Skwad LLC and the SAC alleges that he engaged in discussions and negotiations regarding a contractual relationship that never materialized. (Id., ¶ 13.)

The SAC alleges that Plaintiff discovered his song “Dope” being played throughout the music industry years later. (SAC, ¶ 14.) The SAC alleges that the song “Dope” was subsequently released by Universal Music Group and gave Plaintiff Anthony Wheaton aka Sir Jinx, among others, writing credits. (Id., ¶ 15.) The SAC alleges that Defendants failed to properly obtain the rights to use Plaintiff’s musical compositions, and that Defendants knew Plaintiff should have been properly compensated yet elected not to do so. (Id., ¶ 17.)

The SAC alleges that on November 11, 2022, Plaintiff sent a letter to Defendants regarding royalties. (SAC, ¶ 18.) The SAC further alleges that Plaintiff has continued communication efforts but has not received any response or compensation despite the many promises regarding obtaining the accounting for Plaintiff. (Id., ¶¶ 19, 20, 21, 22.) The SAC alleges that Plaintiff has been significantly harmed as a result. (Id., ¶ 23.)

The SAC alleges that Plaintiff simply wanted an accounting to be distributed for his purview of his song Dope and monies made and obtained from the use of the song. (SAC, ¶ 21).  Finally, the SAC alleges this case is filed to “assert the financial damages incurred due to the Defendants disregard of payment, converting his song Dope, and failure to provide any redress for the situation.” (Id., ¶ 23.)

A.              First Cause of Action - Conversion

To plead a cause of action for conversion, one must allege (1) the plaintiff’s ownership or right to possession of personal property; (2) defendant’s disposition of the property inconsistent with plaintiff’s rights; and (3) resulting damages. (Fremont Indemnity Co. v. Fremont General Corp.(2007) 148 Cal.App.4th 97, 119.) “Money may be the subject of conversion if the claim involves a specific, identifiable sum . . . .” (Welco Electronics, Inc. v. Mora (2014) 223 Cal.App.4th 202, 209.)  As the Court of Appeal has explained, “money can only be treated as specific property subject to being converted when it is ‘identified as a specific thing.’” (PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal. App. 4th 384, 395; see also id. at p. 396 [“California cases permitting an action for conversion of money typically involve those who have misappropriated, commingled, or misapplied specific funds held for the benefit of others.”].)

First, Defendant Roc Nation demurs to the conversion claim on the basis the SAC fails to allege what specific or identifiable sum Defendants converted from Plaintiff. Plaintiff amended the SAC to include the allegation “Plaintiff is out of approximately $500,000 in damages due to Defendants’ avoidance of paying monies due and owing…” (SAC, ¶ 33 [italics added].) Defendant Roc Nation asserts that an approximation of damages is not a specific identifiable sum of money, and therefore, are insufficient. (See United Energy Trading, LLC v. Pacific Gas & Electric Co. (N.D. Cal. 2016) 177 F.Supp.3d 1183, 1194 [“The complaint accordingly is inadequate because ‘approximately $2.3 million’ is not a sufficiently ‘definite sum.’ ”].) The SAC required Plaintiff to allege that monetary damages due to unpaid royalties was a sum capable of becoming certain. A rough approximation is not enough to support a conversion claim. (See Vu v. California Commerce Club, Inc. (1997) 58 Cal.App.4th 229, 235 [“[T]he generalized claim for money not actionable as conversion.”].) Conversion of money is only permitted in California when the defendant allegedly has commingled, misappropriated, or misapplied specific funds held for the benefit of others. (PCO, Inc., supra, 150 Cal.App.4th at p. 396.)

Second, Defendant Roc Nation further asserts that Plaintiff fails to identify what exclusive possessory interest he had in the specific sum converted given that Plaintiff fails to allege the existence of a valid contract. Specifically, Plaintiff must allege that he was entitled to immediate possession at the time of conversion because “a mere contractual right of payment, without more, will not suffice.” (Plummer v. Day/Eisenberg, LLP (2010) 184 Cal.App.4th 38, 45.) The SAC is devoid of facts showing that Plaintiff was entitled to immediate possession of the monies due from the royalties and profits for the song Dope. Moreover, Plaintiff does not allege he had an ownership interest in the royalties and profits for the song “Dope.” The SAC fails to allege that the fact Plaintiff “wrote, produced and registered this song with Goonz Skwad LLC” gave Plaintiff ownership rights in the royalties and profits for the song. (SAC, ¶ 12.)

Third, the SAC is uncertain as to whether a contract gave Plaintiff the right of possession or ownership in the royalties for “Dope” or if the ownership/possessory interest exists by virtue of the existence of an implied-in-fact contract or a claim from Promissory Estoppel. The purported existence of a written or verbal contract, as well as the terms of said contract remains uncertain.

The SAC alleges that a contractual relationship “never materialized” but also assert Defendants breached “said contract” and that Plaintiff had a “verbal agreement” with Defendants. (SAC, ¶¶10, 13, 43; Exhibit A [Wheaton Decl., ¶ 7.)

In sum, there is uncertainty as to whether Plaintiff is entitled to royalties and profits from the song “Dope” pursuant to a contractual relationship between Plaintiff and Defendants. While copyright is a question of federal law, “the royalty does arise out of the contract itself, it is that contract which governs the rights of a holder of a royalty interest.” (Yount v. Acuff Rose-Opryland (9th Cir. 1996) 103 F.3d 830, 834.) Without specific facts stating the terms under which Plaintiff wrote and produced “Dope” and what royalties, if any, were assigned to Plaintiff, the SAC lacks sufficient facts to show that Plaintiff is entitled to royalties and profits for the song “Dope.”

Accordingly, the court finds that Plaintiff has failed to allege a claim for conversion. As this is the third demurrer, the court sustains the demurrer without leave to amend. (See CCP, § 430.41(e)(1) [“In response to a demurrer and prior to the case being at issue, a complaint or cross-complaint shall not be amended more than three times, absent an offer to the trial court as to such additional facts to be pleaded that there is a reasonable possibility the defect can be cured to state a cause of action.”].)

B.              Second Cause of Action - Unjust Enrichment

“[T]here is no cause of action in California for unjust enrichment. The phrase ‘Unjust Enrichment’ does not describe a theory of recovery, but an effect: the result of a failure to make restitution under circumstances where it is equitable to do so. [Citation] Unjust enrichment is ‘a general principle, underlying various legal doctrines and remedies, rather than a remedy itself.’ [Citation.] It is synonymous with restitution.” (Melchior v. New Line Cinema (2003) 106 Cal.App.4th 779, 793 [internal quotations omitted].) While there is no cause of action in California labeled “unjust enrichment”, an unjust enrichment claim can be made, and the remedy is grounded in equitable principles of restitution. (See Sepanossian v. National Ready Mix Company, Inc. (2023) 97 Cal.App.5th 192.) “Unjust enrichment is generally an inapplicable basis for restitution where the parties have an enforceable express contract, however, ‘restitution may be awarded in lieu of breach of contract damages when the parties had an express contract but it was procured by fraud or is unenforceable or ineffective for some reason,’ or ‘where the defendant obtained a benefit from the plaintiff by fraud, duress, conversion, or similar conduct.’ ” (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1370 (Durrell).)

Defendant Roc Nation asserts that just like the original and amended complaints, the SAC does not plead any allegation sufficient to constitute fraud or the existence of an unenforceable or ineffective contract between Defendant Roc Nation and Plaintiff. Additionally, the SAC does not allege that Defendant obtained a benefit by way of conversion, fraud, or duress. While the SAC alleges the existence of a verbal agreement, conclusory allegations of fraud and conversion are not sufficient to sustain a claim for unjust enrichment. (SAC ¶ 43.) Plaintiff’s conversion claim fails. Moreover, Plaintiff fails to allege sufficient facts to show that any purported agreement between Plaintiff and Defendants was procured by fraud or what conduct Defendants engaged in the resulted in a benefit to them due to fraud and duress. The pleadings must allege facts – not conclusions. (Appl v. Lee Swett Livestock Co. (1987) 192 Cal.App.3d 466, 470.)

Secondly, Defendant Roc Nation notes that the allegation of a verbal agreement between the Parties directly contradicts allegations within the SAC, which allege that a contractual relationship never materialized. (SAC, ¶¶ 8, 10, 13.) Therefore, it is uncertain that Plaintiff can pursue unjust enrichment damages in lieu of damages for breach of contract when an express contract exists between the parties.

Based on the above, the demurrer to the second cause of action is sustained without leave to amend. (CCP, § 430.41(e)(1).)

C.              Third Cause of Action – Accounting

“A cause of action for accounting requires a showing of a relationship between the plaintiff and the defendant, such as a fiduciary relationship, that requires an accounting or a showing that the accounts are so complicated they cannot be determined through an ordinary action at law.” (Fleet v. Bank of America N.A. (2014) 229 Cal.App.4th 1403, 1413.)  “The right to an accounting can arise from the possession by the defendant of money or property which, because of the defendant’s relationship with the plaintiff, the defendant is obliged to surrender.” (Teselle¿v. McLoughlin (2009) 173 Cal.App.4th 156,¿179-80 (Teselle).)

Defendant Roc Nation demurs to the accounting claim on the basis that the SAC does not allege a specific relationship between Defendant Roc Nation and Plaintiff that requires an accounting. A claim for accounting can arise from the defendant having possession of money or property they are obliged to surrender due to their relationship with the plaintiff. (Teselle, supra, 173 Cal.App.4th 156 at p. 180.) The SAC alleges there to be a presumptive relationship requiring accounting was created not by virtue of a contractual relationship but due Defendants’ conversion of Plaintiff’s song. (SAC, ¶¶ 57, 58.)

For the reasons outlined above, Plaintiff’s conversion claim fails. Moreover, “[a] action for accounting is not available where the plaintiff alleges the right to recover a sum certain or a sum that can be made certain by calculation.” Teselle, supra, 173 Cal.App.4th 156 at p. 179.) Therefore, the SAC cannot allege both a claim for conversion or accounting, and there is no indication that the first and third causes of action are pled in the alternative. Even if the accounting claim is pled as an alternative to the conversion claim, the SAC fails to allege facts to show a relationship between Plaintiff and Defendants that entitles Plaintiff to accounting. The SAC is devoid of facts showing that Defendants were in a fiduciary relationship with Plaintiff that requires accounting. “[T]he contractual right to contingent compensation in the control of another has never, by itself, been sufficient to create a fiduciary relationship where one would not otherwise exist.” (Wolf, supra, 107 Cal.App.4th at pp. 30-31.)

As the SAC fails to allege a relationship between Plaintiff and Defendants that obligates Defendants to provide accounting the demurrer to the third cause of action is sustained without leave to amend.(CCP, § 430.41(e)(1).)

D.              Fourth Cause of Action - Unfair Business Practices

Business and Professions Code section 17200 (“UCL”) prohibits “any unlawful, unfair or fraudulent business act or practice.” (Bus. & Prof. Code, § 17200; see Clark v. Superior Court (2010) 50 Cal.4th 605, 610.) To plead this statutory claim, the pleadings must state with reasonable particularity the facts supporting the statutory elements of the violation. (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 619.)

“An unlawful business practice or act is an act or practice, committed pursuant to business activity, that is at the same time forbidden by law.” (Klein v. Earth Elements, Inc. (1997) 59 Cal.App.4th 965, 969.) “A business practice is unfair within the meaning of the UCL if it violates established public policy or if it is immoral, unethical, oppressive or unscrupulous and causes injury to consumers which outweighs its benefits.” (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1473.) A fraudulent business practice claim under section 17200 “is not based upon proof of the common law tort of deceit or deception, but is instead premised on whether the public is likely to be deceived.” (Pastoria v. Nationwide Ins. (2003) 112 Cal.App.4th 1490, 1499.)

Defendant Roc Nation demurs on the basis that Plaintiff lacks UCL standing to assert a claim against Roc Nation. The SAC states that Defendants engaged in the unfair act of distributing the song “Dope” knowing that the distribution without paying or providing redress to Plaintiff was and still is engaging in fraudulent and unfair advertisement of the song “Dope.” (SAC, ¶ 71.) The court finds that Plaintiff failed to allege what specific conduct Defendants engaged in that is an unlawful, unfair, or fraudulent business practice because the allegations in the SAC are conclusory and “allege no specific acts” and “are insufficient to survive demurrer.” (Bagatti v. Department of Rehabilitation (2002) 97 Cal.App.4th 344, 366, fn. 8.)

Moreover, the fact that Plaintiff alleges Defendants “failed to properly pay to use Plaintiff’s song, which is simply unfair in this situation” does not give Plaintiff standing to bring a UCL claim because the remedies are limited to injunctive relief and restitution as Plaintiff has failed to show he is entitled to restitution due to his ownership of the song “Dope.” (See Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 950.) As previously mentioned, the SAC has not pled sufficient facts to establish that Plaintiff has an ownership right in the operative song. Without a specifically pled contract with terms outlining Plaintiff’s ownership of the song and entitlement to compensation, the court cannot find that Defendants’ failure to pay royalties and profits was unlawful, unfair, and/or fraudulent conduct entitled Plaintiff to restitution.

As the fourth cause of action is insufficiently pled, the demurrer is sustained. Although this is the second demurrer to the fourth cause of action, Plaintiff has repeatedly failed to plead facts to show he is entitled to royalties and profits for the song “Dope.” A UCL claim is derivative of the other claims under which it rests. (See Khoury, supra, 14 Cal.App.4th at p. 619; see also Medical Marijuana, Inc. v. ProjectCBD.com (2020) 46 Cal.App.5th 869, 896–897.) Because the demurrer has been sustained without leave to amend as to the underlying causes of action, the demurrer to the UCL claim is also sustained without leave to amend.

Conclusion

Defendant Roc Nation’s demurrer to the SAC is sustained without leave to amend. Defendant to give notice.