TENTATIVE RULING

Defendants Sonoma Biologics, Inc. and Paul Caracciolo’s Demurrer to Plaintiff’s First Amended Complaint is SUSTAINED with thirty (30) days leave to amend.

Plaintiff Wil Master may amend his complaint only as authorized by the Court’s order and may not amend the complaint to add a new party or cause of action without having obtained permission to do so. (Harris v. Wachovia Mortgage, FSB (2010) 185 Cal.App.4th 1018, 1023.)

Defendants Sonoma Biologics, Inc. and Paul Caracciolo to give notice. 

REASONING

“[A] demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.) A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (See Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994 [in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents].) For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 967), but the Court does not “assume the truth of contentions, deductions, or conclusions of fact or law” (Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125).

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 [court shall not “sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment”]; Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037 [“A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment.”]; Vaccaro v. Kaiman (1998) 63 Cal.App.4th 761, 768 [“When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend.”].) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

Analysis

Defendants Sonoma Biologics, Inc. (“Sonoma Biologics”) and Paul Caracciolo (“Defendants”) first demur to Plaintiff Wil Master (“Plaintiff”)’s First Amended Complaint (“FAC”) on the ground that the FAC fails to state a claim against Defendant Caracciolo. In the FAC, Plaintiff alleges that “there existed a unity of interest and ownership between the two Defendants such that any individuality and separateness between the two Defendants has ceased.” (FAC ¶ 12.) Plaintiff alleges that Sonoma Biologics was inadequately capitalized, Defendant Caracciolo exercised complete control over the corporation, and assets were commingled and used for personal use. (Ibid.)

“Ordinarily, a corporation is regarded as a legal entity, separate and distinct from its stockholders, officers and directors, with separate and distinct liabilities and obligations.” (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538.) “A corporate identity may be disregarded—the ‘corporate veil’ pierced—where an abuse of the corporate privilege justifies holding the equitable ownership of a corporation liable for the actions of the corporation.” (Ibid.) “The alter ego doctrine exists to prevent “individuals or other corporations from misusing the corporate laws by the device of a sham corporate entity formed for the purpose of committing fraud or other misdeeds.” (Ibid.)

While Plaintiff has alleged an alter ego theory, his allegation that there is a unity of interest and ownership is conclusory, as he does not allege any specific facts about the control exercised by Defendant Caracciolo, the commingling of assets, or use of company funds for personal use. The Court cannot find that piercing the corporate veil is proper based solely on conclusory statements. More importantly, though, Plaintiff treats Defendants as interchangeable in the FAC, referring to conduct by Defendants generally in the body of the causes of action, which fails to put the trier of fact and Defendants on notice of the exact nature of the claims against Defendant. Plaintiff must amend the complaint to provide specific facts that would support a conclusion that the alter ego doctrine applies here, and Plaintiff shall provide specific allegations against each Defendant in the body of each cause of action.

Accordingly, Defendants Sonoma Biologics, Inc. and Paul Caracciolo’s Demurrer to Plaintiff’s First Amended Complaint is SUSTAINED with thirty (30) days leave to amend. Plaintiff Wil Master may amend his complaint only as authorized by the Court’s order and may not amend the complaint to add a new party or cause of action without having obtained permission to do so. (Harris v. Wachovia Mortgage, FSB (2010) 185 Cal.App.4th 1018, 1023.)