Judge: Michael E. Whitaker, Case: 24SMCV02527, Date: 2024-12-10 Tentative Ruling
Case Number: 24SMCV02527 Hearing Date: December 10, 2024 Dept: 207
TENTATIVE
RULING
|
DEPARTMENT |
207 |
|
HEARING DATE |
December
10, 2024 |
|
CASE NUMBER |
24SMCV02527 |
|
MOTION |
Demurrer
to Answer |
|
Plaintiff Stan Lee Universe LLC |
|
|
OPPOSING PARTY |
Defendant
Pow! Entertainment, LLC |
MOTION
This case arises from a contractual dispute over the rights to
distribute works based on comic books and characters authored by Stan Lee. On May 28, 2024, Plaintiff Stan Lee Universe
LLC (“Plaintiff”) brought suit against Defendant Pow! Entertainment LLC
(“Defendant”) alleging three causes of action for (1) breach of contract; (2)
declaratory relief; and (3) specific performance.
On October 11, 2024, Defendant filed the operative First Amended
Answer to the Complaint, asserting twenty-one affirmative defenses.
Plaintiff now demurs to affirmative defenses 2-7, 9-10, 12-15, and
17-20 to the extent that they rest on the assertion that “the purported
granting of option rights to SLU was improper and the product of fraud[;]” “the
Option Agreement was the product of fraud[;]” or “the transaction purportedly
transferring intellectual property rights to SLU was fraudulently procured.”
but do not state facts regarding the purported fraud with requisite
particularity.
Defendant opposes the demurrer and Plaintiff replies.
LEGAL
STANDARDS
As “[t]o the allegations of
new matter, [n]umerous defenses were purportedly raised by defendants’
allegations of affirmative defense. Most
of these allegations fail to state a defense even when liberally construed in
defendants’ favor. Some are simply immaterial.
For example, defendants allege as a conclusion that plaintiff's claim is
barred by laches, an equitable defense that has no application to the
plaintiff's legal claim. All of the
allegations are proffered in the form of terse legal conclusions, rather than
as facts averred as carefully and with as much detail as the facts which
constitute the cause of action and are alleged in the complaint. The only
affirmative defenses that are mentioned in the summary judgment proceedings,
fraud in the inducement and failure of consideration, are not well pled,
consisting of legal conclusions, and would not have survived a demurrer.” (FPI Development, Inc. v. Nakashima
(1991) 231 Cal.App.3d 367, 384 [cleaned up]; see also Quantification
Settlement Agreement Cases (2011) 201 Cal.App.4th 758, 813 [“affirmative
defenses cannot be pled as mere legal conclusions but must instead be alleged
with as much factual detail as the allegations of a complaint”]; Department
of Finance v. City of Merced (2019) 33 Cal.App.5th 286, 294, fn. 6
[boilerplate affirmative defenses without factual support are deficient].)
“In California, fraud must be
pled specifically; general and conclusory allegations do not suffice.” (Lazar v. Superior Court (1996) 12
Cal.4th 631, 645.) “This particularity
requirement necessitates pleading facts which show how, when, where, to whom,
and by what means the representations were tendered.” (Ibid.)
“One of the purposes of the
specificity requirement is notice to the defendant, to furnish the [opposite
party] with certain definite charges which can be intelligently met.” (Alfaro v. Community Housing Improvement
System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384.) As such, less specificity is required “when
it appears from the nature of the allegations that the [opposite party] must
necessarily possess full information concerning the facts of the
controversy[.]” (Ibid.) “Even under the strict rules of common law
pleading, one of the canons was that less particularity is required when the
facts lie more in the knowledge of the opposite party.” (Ibid.)
ANALYSIS
1. Meet
& Confer
Code of Civil Procedure section
430.41, subdivision (a) requires that “Before filing a demurrer pursuant to
this chapter, the demurring party shall meet and confer in person or by
telephone with the party who filed the pleading that is subject to demurrer for
the purpose of determining whether an agreement can be reached that would
resolve the objections to be raised in the demurrer.”
Moreover, “As part of the meet and confer process, the demurring party
shall identify all of the specific causes of action that it believes are
subject to demurrer and identify with legal support the basis of the
deficiencies.” (Code Civ. Proc., §
430.41, subd. (a)(1).) “The party who
filed the complaint, cross-complaint, or answer shall provide legal support for
its position that the pleading is legally sufficient or, in the alternative,
how the complaint, cross-complaint, or answer could be amended to cure any
legal insufficiency.” (Ibid.) The statute further requires:
The parties shall meet and confer at least 5 days
before the date the responsive pleading is due. If the parties are not able to
meet and confer at least 5 days before the date the responsive pleading is due,
the demurring party shall be granted an automatic 30-day extension of time
within which to file a responsive pleading, by filing and serving, on or before
the date on which a demurrer would be due, a declaration stating under penalty
of perjury that a good faith attempt to meet and confer was made and explaining
the reasons why the parties could not meet and confer.
(Code
Civ. Proc., § 430.31, subd. (a)(2).) Further,
“the demurring party shall file and serve with the demurrer a declaration
stating either” the means by which the parties met and conferred, or that the
party who filed the pleading subject to demurrer failed to respond to the meet
and confer request. (Code Civ. Proc. §
430.41, subd. (a)(3).)
Here, Plaintiff has provided the
Declaration of John M. Genga, which provides:
On October 21, 2024, I had a telephone conference with Mary Brady of
Rutan & Tucker, counsel for Defendant in this action, in which I stated
that Plaintiff intended to demur to Defendant’s amended answer on the basis
that it still failed to state facts sufficient to constitute many of the
defenses asserted. More specifically, I pointed out that Defendant had failed
to plead fraud with the particularity required by law in its affirmative
defense based solely on that ground and in numerous other affirmative defenses
also based on allegations of fraud. Ms. Brady responded that she did not
believe the particularity requirement applied in the context of pleading fraud
as or as a basis for an affirmative defense, as opposed to alleging fraud as a
cause of action.
(Genga
Decl. ¶ 2.)
Defendant contends that, contrary to
Mr. Genga’s declaration, Plaintiff did not adequately meet and confer prior to
filing the demurrer. Specifically,
Defendant provides the Declaration of Mary C. Brady, which provides:
On October 21, 2024, the docket showed that the hearing on SLU’s
demurrer to POW!’s answer was still on calendar, I called John Genga, counsel
for SLU, to ask him whether he intended on withdrawing SLU’s demurrer to POW!’s
answer in light of POW!’s amended answer. Mr. Genga informed me that SLU would
be withdrawing its initial demurrer, but that SLU would be filing another
demurrer to POW!’s amended answer that same day on the grounds that SLU did not
believe POW! had asserted facts sufficient to support its affirmative defense
for fraud in the inducement. Mr. Genga did not mention on this meet and confer
call that SLU would also be demurring to POW!’s second through seventh, ninth,
tenth, thirteenth, fourteenth, fifteenth, and seventeenth through twentieth
affirmative defenses. Prior to my call to Mr. Genga on October 21, 2024, SLU
had not reached out regarding SLU’s claimed deficiencies in POW!’s amended
answer. In other words, SLU did not reach out to POW! five days prior to the
deadline to file a demurrer to POW!’s amended answer. In addition, Mr. Genga
did not ask whether POW! would further amend its answer to include additional
factual allegations in support of its affirmative defenses. Nor did Mr. Genga
provide legal support for SLU’s intended demurrer. Notably, Mr. Genga was
corresponding with my office regarding whether SLU would agree to stipulate to
arbitration, but Mr. Genga did not mention that SLU was planning on filing
another demurrer without meeting and conferring.
(Brady
Decl. ¶ 7.)
Because both parties agree that
Plaintiff’s counsel did not meet and confer with Defendant’s counsel until the
day the demurrer was filed, and Defendant’s counsel indicates that Plaintiff’s
counsel did not meet and confer with respect to the causes of action other than
the twelfth cause of action, the Court finds that the parties did not
adequately meet and confer prior to filing the demurrer.
However, “A determination by the
court that the meet and confer process was insufficient shall not be grounds to
overrule or sustain a demurrer.” (Code
Civ. Proc., § 430.41, subd. (a)(4).)
CONCLUSION AND ORDER
Therefore, the Court continues the
hearing on the demurrer to February 5, 2025 at 8:30 A.M. in Department 207 to
allow the parties to meaningfully meet and confer and potentially stipulate to
a second amended answer or otherwise resolve some or all of the issues raised.
Further, the Court orders Plaintiff
to file and serve a supplemental declaration regarding compliance with the meet
and confer process under Section 430.41 on or before January 29, 2025. If the parties resolve the issues obviating
the need for the demurrer, Plaintiff shall contact the Court and take the
demurrer off calendar in advance of the continued hearing.
Plaintiff shall provide notice of the Court’s orders and file the
notice with a proof of service forthwith.
DATED: December 10, 2024 ___________________________
Michael
E. Whitaker
Judge
of the Superior Court