Judge: John C. Gastelum, Case: 19-01087702, Date: 2023-05-17 Tentative Ruling

Motion to Strike

Tentative Ruling:  Defendants Robert Taft and Jeff Holcombe (“Defendants”) move to strike portions of Plaintiffs Hillsboro Brown Capital, LLC and PMH Investment Fund, LLC’s (“Plaintiffs”) Fourth Amended Complaint on the grounds the disputed portions go beyond the scope of the Court’s signed December 20, 2021 order and the parties’ stipulation to grant Plaintiffs leave to amend.

The Court may, upon terms it deems proper, strike out any part of any pleading not drawn or filed on conformity with the laws of this state, a court rule, or an order of the court.  (Code Civ. Proc., § 436(b).) 

On 12-20-21, the Court signed the order on the parties’ Joint Stipulation granting Plaintiffs leave to file a fourth amended complaint “to address only the Burtin Defendants’ challenges to the pleading[.]” (ROA 757.)

The fourth amended complaint the parties stipulated to filing was circulated in July 2021.  (Declaration of Richard Andrews, ¶ 9.)  In that proposed fourth amended complaint, there is no twenty-third cause of action.  (Id., Ex. A at p. 59.)

The fourth amended complaint Plaintiffs actually filed on 9-22-22 includes a twenty-third cause of action for fraudulent transfer against Taft, Holcombe, Burtin, and Toronto Way Partners.  (ROA 902 at p. 61.)  Inclusion of the twenty-third cause of action goes beyond the parties’ stipulation to file a fourth amended complaint “to address only the Burtin Defendants’ challenges to the pleading[.]”  Thus, the Court finds that the twenty-third cause of action was not filed in conformity with the Court’s 12-20-21 order on the parties’ Joint Stipulation.

Plaintiffs cite Quiroz v. Seventh Ave. Center (2006) 140 Cal.App.4th 1256 to argue that striking an entire cause of action is improper.  There, the court stated it is improper to strike a whole cause of action of a pleading where the “cause of action is the proper subject of a pleading challenge[.]”  (Id. at p. 1281.)  The court stated that, in that instance, a demurrer to the cause of action should be sustained rather than the granting of a motion to strike.  (Ibid.)  Quiroz is not applicable here because the twenty-third cause of action is not the proper subject of a pleading challenge, i.e., it is not subject to any objections enumerated in Code of Civil Procedure section 430.10.  Rather, the twenty-third cause of action is objectionable because it goes beyond the scope of Defendants’ stipulation to allow Plaintiffs to file a fourth amended complaint. 

As to the specific allegations Defendants seek to strike, the allegations at pages 13-14 in the filed fourth amended complaint were part of the fourth amended complaint to which Defendants stipulated.  (See Andrews Decl., Ex. A, ¶ 32(f); ROA 902, ¶ 32(f).)  Because Defendants did not object to those allegations in the proposed fourth amended complaint, their objections to them in the filed fourth amended complaint are rejected.

Defendants also move to strike ¶ 32(g) from the fourth amended complaint, which includes allegations regarding the failure to advise Plaintiffs that their investment in the construction of improvements to The Healing Plant would be owned by Toronto Way Partners, Inc., rather than the landowning entity, PMH.  Plaintiffs argue these allegations are also reflected in the proposed fourth amended complaint that Defendants accepted.  Specifically, Plaintiffs point to 30:24-31:10 and 36:13-23 of the proposed fourth amended complaint.  Those allegations relate to the assurance that Plaintiffs were entitled to profits from The Healing Plant and the application of a conditional use permit in the name of Toronto Way Partners, Inc.  (Andrews, Decl., Ex. A, ¶¶ 78, 95(b).)  They do not relate in any way to the allegations regarding improvements to real property.  Thus, the Court finds the allegations in ¶ 32(g), as with the twenty-third cause of action, lie outside the scope of Defendants’ stipulation to allow Plaintiffs to file a fourth amended complaint.

Considering the above, the Motion to Strike is GRANTED as to paragraph 32(g) and the twenty-third cause of action of the fourth amended complaint and DENIED as to the allegations at pp. 13-14.

Defendants to file an answer to the fourth amended complaint within 10 days.

Defendants to give notice.