Judge: James A. Mangione, Case: 37-2023-00046368-CU-BC-CTL, Date: 2024-03-22 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - March 21, 2024

03/22/2024  09:00:00 AM  C-75 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:James A Mangione

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Civil - Unlimited  Breach of Contract/Warranty Demurrer / Motion to Strike 37-2023-00046368-CU-BC-CTL BOMIER VS NELSON [IMAGED] CAUSAL DOCUMENT/DATE FILED:

Defendants Todd Nelson, Tonbo Biotechnologies Corp. dba Tonbo Biosciences and M-185 Corp.'s Demurrer is sustained with leave to amend.

Breach of Fiduciary Duty Plaintiff's breach of fiduciary claim is premised on five allegedly 'unauthorized and undisclosed transactions' between April 2018 and November 2021. (Compl. ¶¶ 12-16, 25.) In his opposition papers, Plaintiff argues that he could not have discovered the dilution of his ownership interest 'until he was offered a payout which represented his ownership interest at only 5 percent'. (ROA 19, pg. 8.) Plaintiff alleges he was first shown his ownership percentage amount in a capitalization table on December 16, 2021, and four days later was shown a revised capitalization table with a lower ownership percentage.

However, it is unclear whether/how these transactions are connected to the capitalization table such that Plaintiff could not have known about the dilution until presented with the capitalization tables. For statute of limitations purposes, it is unclear when each transaction occurred and how/when Plaintiff became aware of these transactions. Consequently, until more specific facts are alleged, Plaintiff cannot avail himself of the delayed discovery rule.

Furthermore, the complaint alleges that '[t]o the extent any of the above transactions were authorized, the transactions were without adequate consideration to Tonbo.' (Compl. ¶ 16.) However, Plaintiff is not attempting to bring a derivative suit on behalf of Tonbo. Therefore, Plaintiff cannot argue that Tonbo was damaged because of the transactions or that Plaintiff was harmed as a result of harm suffered by Tonbo.

Breach of Contract Plaintiff raises a cause of action for breach of contract stemming from a capital contribution agreement in which Plaintiff 'contributed $200,000 to Tonbo in return for 4,000,000 common shares in Tonbo.' (Compl. ¶ 9.) This contract was allegedly executed in April 2018. Plaintiff alleges that '[d]espite promises that Bomier's equity would not be diluted, Tonbo breached the Agreement by materially diluting Bomier's interest in Tonbo.' (Id. ¶ 32.) Despite the contract being between Tonbo and Plaintiff, the complaint alleges that Nelson made promises that Plaintiff's interest would not be diluted. Therefore, it is unclear whether Plaintiff is alleging that the promise not to dilute his ownership interest is a written contractual term or an oral promise made in connection with the execution of the written contract. If the promise is contained in the written contract, that contract needs to be attached to the complaint or quoted verbatim.

Furthermore, the alleged breach of the contract was the dilution of Plaintiff's ownership interests.

However, as discussed above, it is unclear when and how Plaintiff became aware of the alleged breaches caused by the above transactions. Consequently, as currently pled, Plaintiff cannot avail Calendar No.: Event ID:  TENTATIVE RULINGS

3083805  22 CASE NUMBER: CASE TITLE:  BOMIER VS NELSON [IMAGED]  37-2023-00046368-CU-BC-CTL himself of the delayed discovery rule.

Fraud Plaintiff's fraud claim is based in part on 'Nelson's promises to Bomier when Bomier made his initial capital contribution in Tonbo' and in part on the allegedly 'materially false or misleading capitalization tables . . . which represented that Bomier ownership interest in Tonbo had not been diluted.' (Compl. ¶ 36.) As to the capitalization tables, Plaintiff alleges that he did not challenge the sale of Tonbo to Cytek Biosciences, Inc. on November 2, 2021, because he believed that he possessed a 20% ownership interest in Tonbo. However, the complaint alleges that the first capitalization tables was shown to Plaintiff on December 16, 2021-more than a month after the sale occurred. (Id. ¶ 18.) Therefore, it is unclear how Plaintiff could have relied on the capitalization table in choosing to authorize the sale. As to the initial contribution, Plaintiff alleges that he relied on Nelson's promise that his shares would not be diluted in choosing to invest his initial capital contribution. However, the alleged damages from that fraudulent misrepresentation accrued when the transactions occurred. As stated above, Plaintiff must provide more detail as to the timing and discovery of these transactions to prevent application of the statute of limitations.

Accounting As the accounting claim derives from the other causes of action, it is also sustained with leave to amend.

Defendants' motion to strike is ordered off calendar in light of the Court's ruling on the demurrer.

An amended complaint may be filed no later than April 5, 2024.

The minute order is the order of the Court.

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