Judge Marcella O. Mclaughlin, Case 37-2023-00023415-CU-BT-CTL 2024-01-26 Tentative Ruling

Judge: Marcella O. Mclaughlin, Case: 37-2023-00023415-CU-BT-CTL, Date: 2024-01-26 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - January 25, 2024

01/26/2024 01:30:00 PM C-72 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Marcella O McLaughlin

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Civil - Unlimited Business Tort Demurrer / Motion to Strike 37-2023-00023415-CU-BT-CTL KDME INC VS GETMYBOAT INC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Demurrer, 09/29/2023

A. The demurrer to the FAC is SUSTAINED in part and OVERRULED in part.

The demurrer to count 1 is overruled. Liberally construed, sufficient facts have been pled to state a claim against GMB for violation of the unlawful prong under the UCL. See Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 81; see also Law Offices of Matthew Higbee v. Expungement Assistance Services (2013) 214 Cal.App.4th 544, 547 ('[T]he lack of direct dealings between two business competitors is not necessarily fatal to UCL standing, provided the plaintiff competitor has suffered injury in fact and lost money or property as a result of the defendant competitor's unfair competition.'). Moreover, at this stage of the proceedings, it is not clear that adjudicating plaintiffs' UCL claim would require the court to 'assume the functions of an administrative agency, or to interfere with the functions of an administrative agency.' Alvarado v. Selma Convalescent Hospital (2007) 153 Cal.App.4th 1292, 1298. Finally, the fact that plaintiffs have requested damages to which they may not be entitled does not affect the sufficiency of the UCL claim. See Ramsden v. Western Union (1977) 71 Cal.App.3d 873, 883 ('[A] prayer for relief is not subject to demurrer[.]').

The demurrer to count 2 is overruled. 'While a complaint must contain more than a bare allegation the defendants conspired, a complaint is sufficient if it apprises the defendant of the 'character and type of facts and circumstances upon which she was relying to establish the conspiracy.'' ARE II Cases (2013) 216 Cal.App.4th 1004, 1022 (quoting Schessler v. Keck (1954) 125 Cal.App.2d 827, 833). Such is the case here. (See FAC at ¶¶ 8-10, 34-41.) The demurrer to count 3 is overruled. Plaintiffs allege that '[a] business relationship, and an expectancy of business relationships, exists between the Plaintiffs and anyone desiring to rent a boat or jet ski on San Diego Bay and Mission Bay.' (FAC at ¶ 44.) Plaintiffs further allege that GMB knew about and interfered with these relationships by 'engaging in their Scheme, and causing Plaintiffs to lose business from those consumers looking to rent a jet ski on San Diego Bay or Mission Bay.' (Id. at ¶ 47.) These facts – which the court must accept as true – are sufficient to state a claim for interference with prospective economic advantage. Whether plaintiffs can ultimately prove these allegations is a question for another day.

The demurrer to count 4 is overruled. The unjust enrichment claim is derivative of plaintiffs' other claims.

Thus, because those claims survive demurrer, so too does the unjust enrichment claim.

The demurrer to count 5 is sustained with leave to amend. Insufficient facts have been pled showing that GMB provided substantial assistance or encouragement to the other defendants. See Schulz v. Calendar No.: Event ID: TENTATIVE RULINGS

3037914 35 CASE NUMBER: CASE TITLE: KDME INC VS GETMYBOAT INC [IMAGED] 37-2023-00023415-CU-BT-CTL Neovi Data Corp. (2007) 152 Cal.App.4th 86, 97 (allegations that PayPal, a payment processor, and Neovi, a check processor, knowingly allowed an illegal lottery operation to use their payment systems because it was profitable for them did not show 'substantial assistance or encouragement'). 'Mere knowledge that a tort is being committed and the failure to prevent it does not constitute aiding and abetting.' Fiol v. Doellstedt, 50 Cal. App. 4th 1318, 1326.

B. The motion to strike portions of the FAC is GRANTED in part and DENIED in part.

The motion is granted without leave to amend as to the request to strike the prayer for general and special damages sought in connection with count 1. Plaintiffs have not opposed the motion to strike this request. The court deems the lack of opposition to be a concession as to the merits of the motion.

SDSC Local Rule 2.1.19(B). Moreover, neither actual nor compensatory damages are available under the UCL. Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1266.

The motion is granted with leave to amend as to the request to strike the prayers for restitution, disgorgement, and interest sought in connection with count 1. The UCL does not permit nonrestitutionary disgorgement – i.e., a return of defendant's profits from the challenged act or practice.

Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1184. And while the court has 'discretion in equity to award prejudgment interest on a UCL award as a component of restitution' (Espejo v. The Copley Press, Inc. (2017) 13 Cal.App.5th 329, 375), restitution under the UCL 'requires both that money or property have been lost by a plaintiff, on the one hand, and that it have been acquired by a defendant, on the other.' Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 336.

Here, insufficient facts have been pled showing that GMB acquired plaintiffs' money or property, indirectly or otherwise.

The motion is granted with leave to amend as to the request to strike the prayers for general and special damages and interest sought in connection with count 5. As discussed above, insufficient facts have been pled to state a claim for aiding and abetting.

The motion is denied as to the request to strike the remaining challenged allegations. The court has discretion to grant or deny a motion to strike and, even where an allegation may be unwarranted, the court is not required to strike the allegation at the pleading stage and may instead simply deny the request on the merits at a later stage of the case or ignore the allegation. See Clements v. T.R. Bechtel Co. (1954) 43 Cal.2d 227, 242. Here, the court declines to edit or re-write the FAC and will address possible unmeritorious allegations, if necessary, at a later stage of the case. See PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1683 ('[U]se of the motion to strike should be cautious and sparing.

We have no intention of creating a procedural 'line item veto' for the civil defendant.').

C. Judicial notice is taken as requested. Evid. Code § 452(d). 'However, while courts are free to take judicial notice of the existence of each document in a court file, including the truth of results reached, they may not take judicial notice of the truth of hearsay statements in decisions and court files.' Lockley v. Law Offices of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882.

D. 'Liberality in permitting amendment is the rule, if a fair opportunity to correct any defect has not been given.' Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1227. Accordingly, plaintiffs are granted leave to amend (i) count 5, (ii) items 1 and 2 in the prayer for relief under count 5, and (iii) items 4 and 6 in the prayer for relief under count 1. The second amended complaint must be filed and served by February 5, 2024.

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