Judge Mark A. Young, Case Number: 23SMCV03484, Date: 2025-04-09 Tentative Ruling

Judge: Mark A. Young, Case: 23SMCV03484, Date: 2025-04-09 Tentative Ruling

Case Number: 23SMCV03484 Hearing Date: April 9, 2025 Dept: M

CASE NAME: Elixir Development LLC v. Noyes, et al.

CASE NO.: 23SMCV03484

MOTION: Demurrer to the Complaint

HEARING DATE: 04/09/2025

LEGAL STANDARD

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (CCP §§ 430.30, 430.70.) At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) A “demurrer does not, however, admit contentions, deductions or conclusions of fact or law alleged in the pleading, or the construction of instruments pleaded, or facts impossible in law.” (S. Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732, internal citations omitted.)

A special demurrer for uncertainty is disfavored and will only be sustained where the pleading is so bad that defendant cannot reasonably respond—i.e., cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him/her. (CCP § 430.10(f); Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.) Moreover, even if the pleading is somewhat vague, “ambiguities can be clarified under modern discovery procedures.” (Ibid.)

“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.) It is an abuse of discretion for the court to deny leave to amend where there is any reasonable possibility that plaintiff can state a good cause of action. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) The burden is on plaintiff to show¿in what manner¿plaintiff can amend the complaint, and¿how¿that amendment will change the legal effect of the pleading.¿(Id.)

ANALYSIS

Defendants Susan Noyes and Amanda Glynn demur to the second cause of action for aiding and abetting a breach of fiduciary duty in Plaintiff Elixir Development LLC’s Second Amended Complaint (“SAC”).

The request for judicial notice is GRANTED.

Plaintiff alleges Defendant Susan Katherine “Skatie” Upling Noyes and Glynn co-founded and own a combined 40% of a woman’s apparel company, Defendant Skatie LLC (“Company”). (SAC, ¶¶ 9-14.) According to the SAC, Plaintiff invested the funds which “fueled” the Company. (Id.) Generally, Plaintiff alleges Noyes, Glynn and Skatie engaged in mismanagement of the Company at Plaintiff’s expense.

The elements for a breach of fiduciary duty cause of action are “the existence of a fiduciary relationship, its breach, and damage proximately caused by that breach.” (Thomson v. Canyon (2011) 198 Cal.App.4th 594, 604.) “‘[B]efore a person can be charged with a fiduciary obligation, he must either knowingly undertake to act on behalf and for the benefit of another, or must enter into a relationship which imposes that undertaking as a matter of law.’” (Hasso v. Hapke (2014) 227 Cal.App.4th 107, 140.) “A fiduciary duty under common law may arise ‘when one person enters into a confidential relationship with another.’” (Id.) Facts giving rise to a confidential, fiduciary or trustee relationship must be pled; a “bare allegation that defendants assumed a fiduciary relationship” is a conclusion. (Zumbrun¿v. Univ. of So. Cal.¿(1972) 25 Cal.App.3d 1, 13.)¿

“A¿¿duciary relationship is¿any relation existing between parties to a transaction wherein one of the parties is in duty bound to act with the utmost good faith for the bene¿t of the other party. Such a relation ordinarily arises where a con¿dence is reposed by one person in the integrity of another, and in such a relation the party in whom the con¿dence is reposed, if he voluntarily accepts or assumes to accept the con¿dence, can take no advantage from his acts relating to the interest of the other party without the latter’s knowledge or¿consent…” (Wolf v. Superior Court¿(2003) 107 Cal.App.4th 25, 29, internal citations¿and quotations¿omitted.) “[E]xamples¿of relationships that impose a ¿duciary obligation to act on behalf¿of and for the bene¿t of another are ‘a joint venture, a partnership, or an¿agency.’ But, ‘[t]hose categories are merely illustrative of ¿duciary relationships¿in which ¿duciary duties are imposed by law.’ ”¿(Id.¿at 1339.) “Whether a ¿duciary duty exists is generally a question of law. Whether the defendant breached that duty towards the plaintiff is a question of fact.” (Marzec¿v. Public Employees’¿Retirement System¿(2015) 236 Cal.App.4th 889, 915, internal citation omitted.)

Aiding and abetting is not a separate cause of action, but rather a theory of liability for an underlying tort. Liability for aiding and abetting an underlying tort requires allegations that the actor: “(a) knows the other's conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other to so act or (b) gives substantial assistance to the other in accomplishing a tortious result and the person's own conduct, separately considered, constitutes a breach of duty to the third person.” (Casey v. U.S. Bank Nat. Assn. (2005) 127 Cal.App.4th 1138, 1144, internal quotation marks and citations omitted.) Aiding and abetting requires no agreement, but simply assistance. (Das v. Bank of America, N.A. (2010) 186 Cal.App.4th 727, 744.) The standard merely requires a plaintiff to set forth essential facts with reasonable precision and sufficient particularity to acquaint defendant with nature of claim. (Schulz v. Neovi Data Corp. (2007)152 Cal.App.4th 86, 95.)

The SAC alleges sufficient facts in support of the allegations of Defendants’ knowledge of Skatie/Glynn’s breaches of fiduciary duties and their substantial assistance in Skatie/Glynn’s breaches. The SAC also alleges sufficient facts showing their substantial assistance breached Defendants’ independent duties as co-owners and executives of the Company.