Judge: Helen Zukin, Case: 22SMCV01180, Date: 2022-10-11 Tentative Ruling
Case Number: 22SMCV01180-02 Hearing Date: October 11, 2022 Dept: 207
Background
Plaintiff Kavi Virk (“Plaintiff”) brings this action against
Defendants Radical Studios, Inc., Matthew Berger, and Jesse Burger
(collectively “Defendants”) alleging fraud by Defendants in connection with two
contracts between the parties. The parties have a long history which is too
long to fully recount here, but has involved several different lawsuits between
the parties, some of which are still pending in other departments of the Los
Angeles Superior Court. Defendant Radical Studios, Inc., is a film studio which
appears to have contracted with Plaintiff to act as a consultant in connection
with certain films. Plaintiff’s Complaint in this matter, filed July 22, 2022,
asserts one cause of action for fraud against all Defendants, alleging
Defendants fraudulently induced him to enter into contracts, including one for
a film called “Aladdin.”
Defendants bring this demurrer to Plaintiff’s cause of
action for fraud, arguing it is barred by the statute of limitations and by separately
pending litigation concerning the same parties and cause of action. Defendants
also move to strike Plaintiff’s Complaint in its entirety on the basis that it
fails to sufficiently plead a claim for fraud against them.
Request for Judicial Notice
Plaintiff and Defendants each ask the Court to take judicial
notice of various filings in previous and current litigation between the
parties in Los Angeles Superior Court. Courts can take judicial notice of the
existence of Court records. (Arce ex rel. Arce v. Kaiser Found. Health Plan,
Inc. (2010) 181 Cal.App.4th 471, 483; Schmidlin v. City of Palo Alto
(2007) 157 Cal.App.4th 728, 790 n.10.) This includes the records of any Court
of record in the United States. (Salazar v. Upland Police Dept.¿(2004)
116 Cal.App.4th 934, 946.) However, while Courts may take judicial notice of
official acts and public records, they cannot take judicial notice of the truth
of the matters stated therein. (In re Joseph H.¿(2015) 237 Cal.App.4th
517, 541.) Accordingly, the Court GRANTS the parties’ requests as to those
specific records. However, Plaintiff further requests the Court take judicial
notice of unspecified “Lawsuits in Los Angeles County” and “Lawsuits in Santa
Barbara County” involving Defendants and a third-party entity Blatant
Entertainment, Inc. Plaintiff has not identified any specific lawsuits in
either county which he is requesting the Court take judicial notice of, and
thus these two requests are DENIED.
Demurrer Standard
When considering demurrers, courts read the allegations
liberally and in context. (Wilson v. Transit Authority of City of Sacramento
(1962) 199 Cal.App.2d 716, 720-21.) In a demurrer proceeding, the defects must
be apparent on the face of the pleading or via proper judicial notice. (Donabedian
v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the
pleading alone, and not on the evidence or facts alleged.” (E-Fab, Inc. v.
Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such,
the court assumes the truth of the complaint’s properly pleaded or implied
factual allegations. (Id.) However, it does not accept as true
deductions, contentions, or conclusions of law or fact. (Stonehouse Homes
LLC v. City of Sierra Madre (2008) 167 Cal.App.4th 531, 538.)
A special demurrer
for uncertainty under Section 430.10(f) is disfavored and will only be
sustained where the pleading is so unintelligible that a defendant cannot
reasonably respond—i.e., cannot reasonably determine what issues must be
admitted or denied, or what counts or claims are directed against him/her. (Khoury
v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.) Moreover, even
if the pleading is somewhat vague, “ambiguities can be clarified under modern
discovery procedures.” (Id.)
Motion to Strike Standard
The court may, upon a 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(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. (Id., § 436(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. (Id. § 436.) The grounds for moving to
strike must appear on the face of the pleading or by way of judicial notice. (Id. § 437.)
Analysis
1. Meet
and Confer Requirement
The Court
finds that Defendant has complied with the meet and confer requirements set
forth under Code of Civil Procedure §§ 430.41(a)(3)(B) and 435.5(a)(3)(B). (Berger
Decl. at ¶ 10.)
2. Default
Plaintiff asks the Court to reject
Defendants’ demurrer because Plaintiff alleges Defendants are in default for
not having timely filed a response to the Complaint following the purported
service of process on Defendants on July 22, 2022. The Court notes Plaintiff
has filed numerous requests for entry of default against Defendants, each of
which has been rejected for various deficiencies in Plaintiff’s request.
Plaintiff claims default has been entered against Defendant Jesse Berger, but
this is incorrect, attaching a September 1, 2022, request for entry of default
filed with the Court. (Ex. 9 to Virk Decl.) The Court notes there is a typo on
this form which appears to be the source of the confusion, as the Clerk
mistakenly checked the wrong box and indicated default had been entered when
the Clerk meant to check the box saying default had not been entered. This was
clearly in error as the Clerk included a notation stating Plaintiff’s request
was deficient because the Code Civ. Proc. § “585.5 Declaration is incomplete.”
(Id.) Indeed the following day, on September 2, the Court send Plaintiff
a notice that his request for entry of default against Jesse Berger had been
rejected and directed him to file a new request. Plaintiff did so and filed a
second request for entry of default against Jesse Berger on September 6, which
was also rejected by the Clerk. As it stands, default has not been entered as
to any Defendant.
Defendants argue the service
attempted on July 22 was defective and have submitted evidence contesting the
validity of the proofs of service filed by Plaintiff on August 31, 2022. The
sufficiency of the July 22, 2022, service on Defendants is not properly before
the Court on Defendants’ demurrer and motion to strike. In ruling on such
motions, the Court may only consider the Complaint itself and matters which the
Court may judicially notice. The proper procedural mechanism for Defendants to
challenge the sufficiency of the July 22 service would be to bring a motion to
quash service. No such motion has been filed.
In essence, Plaintiff is arguing
Defendants’ demurrer is untimely. The Court has discretion as to whether to
consider a defendant’s demurrer despite its untimeliness. “The court may, in
furtherance of justice, and on any terms as may be proper, … enlarge the time
for answer or demurrer.” (C.C.P. § 473(a)(1); see also McAllister v. County of Monterey (2007) 147 Cal.App.4th 253, 281-282.) The Court in
its discretion will consider Defendants’ demurrer. The law favors the
resolution of disputes on their merits.
3. Statute
of Limitations
The statute of limitations for
fraud is three years from “the discovery, by the aggrieved party, of the facts
constituting the fraud or mistake.” (C.C.P. § 338(d).) Plaintiff here alleges “Defendants
made intentional and negligent misrepresentations to Plaintiff KAVI VIRK
regarding the financial status, standing, tax registrations and other matters
in order to induce Plaintiff to agree to the two written agreements.”
(Complaint at 3, ¶ FR-2.) Defendants argue Plaintiff discovered this alleged
fraud at least by 2017, pointing to two Requests for Court Order and Answer filed
by Plaintiff in small claims actions pending in Los Angeles Superior Court
between the parties, specifically case numbers 15S00245 and 17IWSC00278.
In a March 2017 filing in case
number 15S00245, Plaintiff stated:
Lastly,
while Radical Studios submitted several documents (Exhibit 6) during
legal proceedings in this lawsuit showing that they are in deep financial
trouble, it is evident that they have lied under oath as they are “somehow”
producing 10 feature films as per the information publicly available via
IMDBPro (Exhibit 7) despite these financial documents submitted by
Radical Studios Inc. in this lawsuit.
(3/21/2017 Request for Court Order
and Answer at 2.) In a December 2017 filing in case number 17IWSC00278,
Plaintiff sought to:
Subpoena the financial
statements of Defendant Radical Studios Inc. and its various bank accounts that
reveal the Defendants financial standing and confirm the false statements and
submissions by the Defendant under oath and penalty of perjury.
(12/28/2017 Request for Court
Order and Answer at 2, ¶ 3.)
The Court finds Defendants have
not sufficiently shown that the alleged misrepresentations of Defendants’
financial status referenced in Plaintiff’s 2017 filings are the same
misrepresentations as to “financial status, standing, tax registrations and
other matters” which Plaintiff alleges induced him to enter into contracts with
Defendants. Indeed, Plaintiff’s 2017 filings make no reference to
representations concerning “standing, tax registrations and other matters.”
Accordingly, the Court finds Plaintiff’s prior 2017 filings do not establish
when Plaintiff discovered the misrepresentations which form the basis of
Plaintiff’s claims here. Defendants’ demurrer on this ground is OVERRULED.
4. Pending Litigation
Defendants argue there is another
action pending between the parties on the same cause of action, which is
grounds for demurrer under Code Civ. Proc. § 430.10(c). A plea in abatement is disfavored, but it will be successful
if it is shown “(1) [t]hat both suits are predicated upon the same cause of action;
(2) that both suits are pending in the same jurisdiction; and (3) that both suits
are contested by the same parties.” (Conservatorship of Pacheco (1990) 224
Cal.App.3d 171, 176; internal quotations omitted.) Although the existence of another
substantially similar action will rarely appear on the face of a pleading, a demurrer
on this ground may be based upon judicially noticed facts. (See Branson v. Sun–Diamond
Growers (1994) 24 Cal.App.4th 327, 336 n.2; Bistawros v. Greenberg (1987)
189 Cal.App.3d 189, 191–192.) The other pending action must involve the same parties
in the same relationship, that is as plaintiff or defendant, and must involve the
identical cause of action in both suits such that a judgment in the first would
be res judicata on the claim in the second (Plant Insulation Co. v. Fibreboard
Corp. (1990) 224 Cal.App.3d 781, 789; Bush v. Superior Court (1992) 10
Cal.App.4th 1374, 1384). However, abatement is required only where the multiple
actions are pending in courts of the same state. (Leadford v. Leadford (1992)
6 Cal.App.4th 571, 574.)
Defendants point to Los Angeles
Superior Court case number 21IWSC00334, which was a small claims
action initiated by Plaintiff on March 15, 2021. In that action, Plaintiff
alleges “Fraud and breach of agreement on
feature film project ‘Aladdin.’” (8/24/2021 Amended Claim and Order.) Plaintiff
does not dispute the 21IWSC00334 action is predicated on the
same facts and cause of action as this matter. Indeed, it appears Plaintiff
intended this action to be duplicative of the claims raised in the 21IWSC00334
matter:
The second written agreement
consummated on May 13, 2013 and breached on January 9th, 2021
regarding the feature film project ALADDIN is the subject of this instant
lawsuit and claim for damages. The $30,000 “floor” of the fees due to the Plaintiff
on ALADDIN pursuant to the terms of the written agreement are above the
jurisdictional limits of the Small Claims Limited Jurisdiction, thereby
necessitating the re-classification of the March 2021 lawsuit (Case No.
21IWSC00334) to this instant matter (Case No. 22SMCV01180) pursuant to the
1/28/22 ruling of the Los Angeles Superior Court Judges as detailed hereunder.
(Virk Decl. at ¶ 4.) Plaintiff’s
statement is premised on a mischaracterization of Judge Epstein’s January 28,
2022, minute order entered in Los Angeles Superior Court case SC129304.
Plaintiff brought a motion to consolidate the SC129304 action with cases
pending in small claims court. In the January 28 minute order, Judge Epstein
denied Plaintiff’s motion, holding “The Court cannot relate a small
claims matter to an unlimited jurisdiction action. The small claims action
needs to be reclassified.” Plaintiff now claims the filing of this instant
matter was the ‘reclassification’ referenced in the January 28 motion. This is
incorrect. Plaintiff’s filing of a new lawsuit before this Court was not a
reclassification of the 21IWSC00334 matter, it was simply a new
and independent case which was not authorized or contemplated by the January 28
minute order in the SC129304 matter.
The 21IWSC00334 matter remains pending
in Department 8 of the Inglewood courthouse. The
Court thus finds there is another action pending between the parties concerning
the same cause of action and SUSTAINS Defendants’ demurrer on this basis.
The Court notes it appears that
Plaintiff has recently filed a request for dismissal of the 21IWSC00334
matter. However, the Court has before it no evidence that this request has been
granted. The Court also notes Plaintiff has requested the dismissal of the
21IWSC00334 matter with prejudice, which would bar Plaintiff from raising these
same claims again in this action. (Allstate Ins. Co. v. Mel Rapton,inc (2000)
77 Cal.App.4th 901, 907 [“res judicata applies to judgments rendered by the small
claims court”]; Boeken v. Philip
Morris USA, Inc. (2010)
48 Cal.4th 788, 793 [“for purposes of applying the doctrine of res judicata, however, a dismissal with prejudice is the equivalent of a final judgment on
the merits, barring the entire cause of action”].) Accordingly, Plaintiff would
be barred from asserting these claims in this action regardless of whether his
request for dismissal is granted in 21IWSC00334.
Plaintiff bears the
burden of demonstrating that it can cure the defects in the Complaint through
further amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)
Plaintiff has not requested leave to amend, nor has Plaintiff shown how the
Complaint could be cured through further amendment. As the issue here does not
concern the content of the Complaint itself, but rather the existence of
separate litigation between the parties concerning the same cause of action, it
does not appear to the Court that granting leave to amend would cure this
issue. Accordingly, the Court sustains Defendants’ demurrer without leave to
amend.
5. Motion
to Strike
Defendants also move to strike
Plaintiff’s Complaint in its entirety. As the Court has sustained Defendants’
demurrer, Defendants’ motion to strike is moot and is DENIED on that basis.
6. Plaintiff’s
Requests for Affirmative Relief
In opposing Defendants’ demurrer,
Plaintiff asks the Court to deem Defendant Matthew Berger to be a vexatious
litigant and to issue a “Cease & Desist order” against Defendant Matthew
Berger. (Opp. at 1-2.) These requests are not properly before the Court on
Defendants’ demurrer and motion to strike, and the Court denies Plaintiff’s
requests for affirmative relief asserted in his opposition.
7. Sanctions
Plaintiff and Defendants each ask
the Court to award them sanctions based on what they deem frivolous filings by
the other side. Both requests are DENIED.
Conclusion
Defendants’ demurrer is SUSTAINED without leave to amend.
Defendants’ motion to strike is DENIED as moot. All requests for sanctions are
DENIED.