Judge: Lynette Gridiron Winston, Case: 21PSCV01054, Date: 2023-12-20 Tentative Ruling
Case Number: 21PSCV01054 Hearing Date: March 21, 2024 Dept: 6
CASE
NAME: Claire
He Yi v. Daniel W. Kennedy, et al.
Defendants’ Motion for Summary Judgment
TENTATIVE RULING
The Court DENIES Defendants’ motion for summary judgment, or in the alternative, summary adjudication.
Plaintiff Claire He Yi is ordered to give notice of the Court’s ruling within five calendar days of this order.
BACKGROUND
This action revolves around an investment dispute. On December 16, 2021, plaintiff Claire He Yi (Plaintiff) filed this action against defendants Daniel W. Kennedy, IV (Daniel), Juliet Ru-Yi Chung (Juliet), Diana Yi Wei Cheng (Diana), Rosemary F. Kennedy (Rosemary), Vanessa Yao Guo, Hongmei Jin, Kennedy Capital Partners International, Inc. (Kennedy Capital), Gosdom Inc., Gosdom Entertainment Inc., Gosdom Entertainment LLC, Gosdom Entertainments, LLC, Base FX, Inc., Production Capital LLC, Production Capital Corp., Production Capital Entertainment, Inc., Kevin W Robl, Will Yun Lee (collectively, Defendants), and Does 1 through 50, alleging causes of action for fraud – intentional misrepresentation, fraud- negligent misrepresentation, fraud – concealment, fraud – false promise, common law conspiracy, breach of written contract (note), breach of the implied covenant of good faith and fair dealing, promissory estoppel, breach of fiduciary duty, fraud – constructive, conversion, account stated, money had and money received, unfair business practices Business & Professions Code § 17200 et seq., and unjust enrichment.
On January 8, 2024, Defendants Kennedy Capital, Daniel, Juliet, Diana, and Rosemary (collectively, Moving Parties) filed a motion for summary judgment, or in the alternative, summary adjudication. On March 1, 2024, Plaintiff filed an opposition. On March 4, 2024, Plaintiff filed an amended opposition. On March 14, 2024, Moving Parties filed a reply. On March 15, 2024, Plaintiff filed an objection to the reply.
LEGAL
STANDARD
The purpose of a motion for summary judgment or summary adjudication “is to provide courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) “Code of Civil Procedure section 437c, subdivision (c), requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119, italics in original and quoting Code Civ. Proc., § 437c, subd. (c).) “The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues; the function of the affidavits or declarations is to disclose whether there is any triable issue of fact within the issues delimited by the pleadings.” (Juge v. County of Sacramento (1993) 12 Cal.App.4th 59, 67, citing FPI Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 381-382.)
“On a motion for summary judgment, the initial burden is always on the moving party to make a prima facie showing that there are no triable issues of material fact.” (Scalf v. D.B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519.) A defendant moving for summary judgment or summary adjudication “has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to the cause of action.” (Code Civ. Proc., § 437c, subd. (p)(2); see also Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520.)
Once the defendant has met that burden, the burden shifts to the plaintiff “to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.” (Code Civ. Proc., § 437c, subd. (p)(2).) To establish a triable issue of material fact, the party opposing the motion “shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action or a defense thereto.” (Id.; see also Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.)
Courts
“liberally construe the evidence in support of the party opposing summary
judgment and resolve doubts concerning the evidence in favor of that party.” (Dore
v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)
DISCUSSION
Summary of Material Facts
Defendant Daniel and Juliet created an entity, i.e., Kennedy Capital, for investing in film production. (SSF 1-2.) Daniel and Juliet were the managing members of Kennedy Capital. (SSF 3.) Plaintiff entered into a private placement memorandum (PPM) with Kennedy Capital for investment in film production. (SSF 6.) The PPM indicated it was limited to sophisticated “accredited” investors, contained risk factors, and urged investors to conduct their own due diligence. (SSF 7-8.) Plaintiff signed a subscription agreement on October 1, 2019 and invested $200,000 with Kennedy Capital for financing production of various films by Defendants Gosdom Inc., Gosdom Entertainment, Inc., Gosdom Entertainment LLC, Gosdom Entertainments, LLC, Vanessa Guo, Base FX and Production Capital (collectively Gosdom Defendants). (SSF 9-10.) This investment was memorialized in a promissory note for $200,000, and Defendants Juliet and Diana also invested into it. (SSF 11.) On October 1, 2019, Plaintiff wired the $200,000 to Gosdom Inc. (SSF 12.) On December 18, 2019, Plaintiff invested an additional $200,000, which was memorialized in a new promissory note for $400,000, accounting for the initial $200,000 investment. (SSF 13-14.) Plaintiff paid the additional $200,000 to Kennedy Capital by check, which was then sent to the Gosdom Defendants. (SSF 15.) Defendants Daniel, Juliet, Diana, and Rosemary did not receive money from Plaintiff. (SSF 16.)
Analysis
The Court notes significant issues with Moving Parties’ motion that render it defective. First, the motion clumps multiple causes of action together under one issue, such as issue numbers 2, 4, 5, and 6. (See Notice, pp. 3-4.) This is problematic because issues in a motion for summary adjudication must address individual causes of action, claims for damages, issues of duty, or affirmative defenses. (See Cal. Rules of Court, rule 3.1350, subd. (d)(1), italics added [“(1) The Separate Statement of Undisputed Material Facts in support of a motion must separately identify: (A) Each cause of action, claim for damages, issue of duty, or affirmative defense that is the subject of the motion…]; see also Id., subd. (b), italics added [“If summary adjudication is sought, whether separately or as an alternative to the motion for summary judgment, the specific cause of action, affirmative defense, claims for damages, or issues of duty must be stated specifically in the notice of motion and be repeated, verbatim, in the separate statement of undisputed material facts.”])
Second, Moving Parties’ memorandum of points and authorities does not track the issues set forth in the notice. In fact, the memorandum of points and authorities makes arguments regarding matters not within the scope of the issues presented here. For example, Moving Parties argue that:
·
Plaintiff cannot establish any cause of action against Moving
Parties because Moving Parties never received any money from Plaintiff;
·
Plaintiff’s fraud and derivative conspiracy claims must be
dismissed because the alleged misrepresentations are not actionable under
California law;
·
Plaintiff’s fraud claims must be dismissed because any alleged
misrepresentations were not known to be false or made with intent to deceive;
and
· No claims can be brought against Defendants Diana and Rosemary because they have no relationship to Plaintiff’s investment.
(Memorandum of Points and Authorities, pp. 10-15.)
None of the issues set forth in the notice mention these things. The issues in the notice instead focus on alter ego liability, Moving Parties themselves having purportedly been defrauded by third parties, and Defendants Daniel and Juliet not being parties to the contract with Plaintiff. (See Notice, pp. 3-4.) By clumping together multiple causes of action under one issue and then arguing about matters outside the scope of those issues, it is difficult, if not impossible for the Court to follow Moving Parties’ arguments here.
Third, Moving Parties make arguments that are not supported by any material facts in the separate statement. For example, Moving Parties contend they maintained all corporate formalities for purposes of avoiding alter ego liability. (Memorandum of Points and Authorities, 9:10-10:3). However, their separate statement does not mention anything with respect to maintaining corporate formalities. (See SSF 1-16.) Thus, Moving Parties failed to establish the absence of a triable issue of material fact on this issue.
Fourth, Moving Parties make contradictory statements in their motion. For example, they argue that Moving Parties, i.e., including Kennedy Capital, never received any money from Plaintiff, citing to SSF 16 for support. (Memorandum of Points and Authorities, 11:2.) This argument is contradicted by SSF 16 itself, which only claims that Daniel, Juliet, Diana, and Rosemary did not receive money from Plaintiff, and says nothing about Kennedy Capital. (SSF 16.) In fact, Moving Parties state in their separate statement in multiple parts that Kennedy Capital did receive money from Plaintiff. (See SSF 10, 15.)
Finally, it is unclear how the issue of Moving Parties being defrauded by third parties, i.e., the Gosdom Defendants, undermines Plaintiff’s claims against them. The issue here is Moving Parties’ actions vis-à-vis Plaintiff. It does not necessarily follow that Moving Parties could not have defrauded Plaintiff just because they were purportedly defrauded by third parties, i.e., the Gosdom Defendants. Moreover, there is no proffered material fact on this issue, as nothing in the separate statement mentions the Moving Parties having been so defrauded. (See SSF 1-16.) The most Moving Parties provided here is that Daniel, Juliet, Diana, and Rosemary invested into the production of films by the Gosdom Defendants, which by itself is inadequate to establish the existence of any fraud, let alone fraud that undermines Plaintiff’s claims against Moving Parties. (See SSF 11.) Even assuming Moving Parties had been defrauded by the Gosdom Defendants, it does not necessarily follow that Moving Parties could not themselves have also attempted to defraud Plaintiff.
Based on the foregoing, the Court DENIES Defendants’ motion for summary judgment, or in the alternative, summary adjudication.
CONCLUSION
The Court DENIES Defendants’ motion for summary judgment, or in the alternative, summary adjudication.
Plaintiff Claire He Yi is ordered to give notice of the Court’s ruling within five calendar days of this order.