Judge: Jon R. Takasugi, Case: 22SMCV02125, Date: 2023-08-04 Tentative Ruling

Case Number: 22SMCV02125    Hearing Date: August 4, 2023    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendants’ demurrer is OVERRULED as to all causes of action against Defendant Brett Gagnon, and OVERRULED as to all causes of action against Defendant Ashley Gagnon, with the exception of the breach of contract and breach of fiduciary duty claims.

Defendants’ demurrer is SUSTAINED, WITH 15 DAYS LEAVE TO AMEND, as to the breach of contract and breach of fiduciary duty claims against Defendant Ashley Gagnon.

Defendants’ motion to strike is DENIED.

            On 10/25/2022, Plaintiff Arsalan Hamidi (Plaintiff) filed suit against Brett Gagnon, George B. Gagnon, Geminon Properties, LLC, and Ashley R. Gagnon (collectively, Defendants), alleging: (1) violation of Georgia Code section 14-11-313; (2) fraud; (3) negligent misrepresentation; (4) breach of operating agreement; (5) breach of operating agreement; (6) breach of fiduciary duties; (7) constructive fraud; (8) unjust enrichment; (9) conversion; (10) cessation/withdrawal of memberships and management; and (11) cancellation of written instruments. 

            Now, Defendants demur to Plaintiff’s first amended complaint (FAC).

Factual Background

            Plaintiff alleges that on 9/30/2020, he entered into an agreement with Brett Gagnon (who is also known as George Gagnon) to open a real estate company, Geminon. The purpose of the agreement was to purchase and resell real estate for a profit. Plaintiff alleges that he was defrauded by Defendants into believing that the property at issue here (the Property) was being remodeled for the purpose of resale. Plaintiff alleges that, in reality, Defendants were using Plaintiffs’ capital infusions to develop the property for their own personal use, and ultimately took title to the property without authority or authorization.

Discussion

            Defendant argues that Plaintiff has failed to allege sufficient facts to support the second, third, fourth, fifth, sixth, seventh, eighth, and ninth causes of action against Defendant Ashley based on a conspiracy theory, as well as the tenth and eleventh causes of action against Defendants.

            As a preliminary matter, the Court overruled Defendant’s demurrer as to all causes of action against Defendant Brett Gagnon, with the exception of the conversion cause of action. As such, the Court has already determined that Plaintiff has alleged sufficient facts to support the tenth and eleventh causes of action, and Defendant did not move for reconsideration of that ruling.

            Moreover, the Court overruled Defendant’s demurrer as to all causes of action against Defendant Ashley Gagnon, with the exception of the contract and fiduciary claims. As such, the Court limits its analysis here to those claims.

            Defendant argues that Plaintiff has not alleged sufficient facts to establish a joint venture between Defendants Brett and Ashley Gagnon, and thus has not shown a basis for contract-based on fiduciary-based claims against Ashley Gagnon.

            The Court agrees.

            Plaintiff alleges Defendants entered into a joint venture with regard to Gagnon’s breaching the Agreement and his fiduciary duties, as well as Defendants’ “illicit and unauthorized embezzlement, stealing, scheming, misappropriating, converting, power firing, and suffering off Hamidi and Geminon’s capital account funds, to purchase and remodel the property, not for the eventual sale of the property to a third party, but instead, so that Gagnon and Ashley could personally reside in and on the property.”( FAC, ¶23.) As noted by Defendant, these allegations are allegations of tortious acts rather than a single business enterprise jointly carried out by Gagnon and Ashley for profit. If the above allegations are the alleged single undertaking between Gagnon and Ashley, Plaintiff fails to allege the requisite facts to support how Plaintiff can have an ownership interest and/or joint control over these tortious acts. (See e.g. FAC, ¶23:12-15.)

            This is the second opportunity Plaintiff has been provided to allege facts which could show that Defendant Ashley Gagnon, as a nonsignatory, was bound by the terms and obligations of the contract, or owed Plaintiff a fiduciary duty. Still, the the only additional facts Plaintiff alleged concern only Ashley’s alleged participation in the wrong doing, rather than clarify her role in entering into the actual contract. Plaintiff will be afforded one final opportunity to allege facts which could show joint venture.

            Based on the foregoing, Defendants’ demurrer is overruled as to all causes of action against Defendant Brett Gagnon, and overruled as to all causes of action against Defendant Ashley Gagnon, with the exception of the breach of contract and breach of fiduciary duty claims. Defendants’ demurrer is sustained, with 15 days leave to amend, as to the breach of contract and breach of fiduciary duty claims against Defendant Ashley Gagnon.

Motion to Strike

            Defendants argue that Plaintiff has not alleged sufficient facts to support a prayer for punitive damages or attorney fees, and the accessory allegations are improper.

            As to the accessory allegations, the Court has already concluded that Plaintiff’s accessory allegations are sufficient to state a claim against Defendant Ashley Gagnon. As such, the Court necessarily concludes that these allegations are not improper.

            As for punitive damages, the Court has already overruled Defendants’ demurrer to the fraud causes of action. Accordingly, Plaintiff has necessarily alleged facts which could show that Defendants engaged in fraudulent conduct. (Civ. Code, § 3294, subd. (c)(3).) 

            As for attorney fees, Plaintiff alleges that he is entitled to attorney fees pursuant to the Official Code of Georgia section 13-313. Defendants’ motion contains no discussion as to why, or whether, this provision does not actually provide a statutory basis for recovery of attorney fees.

            Based on the foregoing, Defendants’ motion to strike is denied.

It is so ordered.

Dated:  August    , 2023

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar.  For more information, please contact the court clerk at (213) 633-0517.