Judge Michael P. Linfield, Case Number: 21STCV12127, Date: 2023-08-29 Tentative Ruling

Judge: Michael P. Linfield, Case: 21STCV12127, Date: 2023-08-29 Tentative Ruling

The Court often posts its tentative several days in advance of the hearing. Please re-check the tentative rulings the day before the hearing to be sure that the Court has not revised the ruling since the time it was posted.

Please call the clerk at (213) 633-0154 by 4:00 pm. the court day before the hearing if you wish to submit on the tentative.

Case Number: 21STCV12127 Hearing Date: April 19, 2024 Dept: 34

SUBJECT: Motion for Judgment on the Pleadings

Moving Party: Sarah Emmi Tibstra

Resp. Party: Oliver Damavandi

The Motion for Judgment on the Pleadings is DENIED.

BACKGROUND:

On March 30, 2021, Oliver Damavandi (“Damavandi”) filed his Complaint against Jason Aryeh, 1568 Blue Jay Way LLC, 6097 West Winding Way LLC, and 5849 Murphy Way LLC on causes of action arising from the Parties’ business transactions.

On May 7, 2021, Jason Aryeh, 1568 Blue Jay Way LLC, 6097 West Winding Way LLC, and 5849 Murphy Way LLC (“the Aryeh Parties”) filed their Cross-Complaint (“the Aryeh Cross-Complaint”) against Damavandi, Bar Design and Construction, Inc., Asher Joseph Alfasi, Archive Design Group, LLC, and Zoran Pevec.

On August 27, 2021, Damavandi amended his Complaint to substitute Doe 1 with Sarah Emmi Tibstra, Doe 4 with Matthew George, Doe 5 with Cardinal-West Construction, LLC, Doe 6 with Zachary Beer, and Doe 7 with Michael J. Tisdale Construction, Inc.

On August 27, 2021, Damavandi filed his First Amended Complaint (FAC). Later that day, Damavandi filed his Notice of Errata regarding the FAC. On August 31, 2021, Damavandi filed another Notice of Errata regarding the FAC.

On October 21, 2021, Jason Aryeh filed his Answer to the FAC.

On October 22, 2021, 1568 Blue Jay Way LLC, 6097 West Winding Way LLC, and 5849 Murphy Way LLC filed their Answer to the FAC.

On December 16, 2021, the Aryeh Parties filed their First Amended Cross-Complaint (“the Aryeh FACC”), which included new parties and new causes of action.

On January 3, 2022, Sarah Emmi Tibstra filed her Answer to the FAC.

On May 12, 2022, the Court sustained without leave to amend the Demurrers filed against the FAC by: (1) Zachary Beer and Michael J. Tisdale Construction, Inc.; and (2) Matthew George and Cardinal-West Construction, LLC.

On June 6, 2023, the Court entered Judgment of Dismissal in favor of Defendants Zachary Beer, Michael J. Tisdale Construction, Inc., Matthew George, and Cardinal-West Construction, Inc. regarding the causes of action against them in Plaintiff’s FAC.

On July 5, 2023, the Aryeh Parties filed their Second Amended Cross-Complaint (“the Aryeh SACC”).

On August 4, 2023, Building The New Century filed its Answer to the Aryeh SACC.

On August 4, 2023, Bar Design and Construction, Inc., Asher Joseph Alfasi, and Shana Barghouti filed their Answer to the Aryeh SACC.

On August 4, 2023, Dan Son Air, Inc. filed its Answer to the Aryeh SACC.

On August 21, 2023, Oliver Damavandi filed his Answer to the Aryeh SACC.

On August 24, 2023, Colony Insurance Company filed its Answer in Intervention on Behalf of CA Premier AV Inc.

On September 1, 2023, Ram-Z Construction, Inc. filed its Answer to the Aryeh SACC.

On September 8, 2023, Sun Valley Steel Fabricators, Inc. filed its Answer to the Aryeh SACC.

On September 11, 2023, by request of the Aryeh Parties, the Clerk’s Office entered default on EVG Roofing Systems, Inc.

On September 14, 2023, by request of the Aryeh Parties, the Clerk’s Office entered default on IC Electric, Inc.

On September 14, 2023, Carlos Antonio Rodriguez filed his Answer to the Aryeh SACC.

On October 5, 2023, by request of the Aryeh Parties, the Clerk’s Office entered default on NoHo Steel, LLC.

On November 29, 2023, Archive Design Group, LLC and Zoran Pevec filed their Answer to the Aryeh SACC.

On February 27, 2024, the Court granted summary judgment in favor of 1568 Blue Jay Way, LLC and against NoHo Steel, Inc.

On March 25, 2024, Sarah Emmi Tibstra (“Tibstra”) filed her Motion for Judgment on the Pleadings (“MJOP”). In support of her MJOP, Tibstra concurrently filed: (1) Declaration of Jonathan S. Dennis; and (2) Proposed Order.

On March 28, 2024, by request of the Aryeh Parties, the Clerk’s Office dismissed with prejudice Zoran Pevec and Archive Design Group, LLC from the Aryeh SACC.

On April 8, 2024, Damavandi filed his Opposition to the MJOP.

On April 11, 2024, Tibstra filed her Reply in support of the MJOP.

On April 12, 2024, the Aryeh Parties amended the Aryeh SACC to substitute Roe 31 with Shawn Yousefi.

ANALYSIS:

I. Legal Standard

“A party may move for judgment on the pleadings.” (Code Civ. Proc., § 438, subd. (b)(1).)

“The motion provided for in this section may only be made on one of the following grounds: . . . (B) If the moving party is a defendant, that either of the following conditions exist: (i) The court has no jurisdiction of the subject of the cause of action alleged in the complaint. (ii) The complaint does not state facts sufficient to constitute a cause of action against that defendant.” (Code Civ. Proc., § 438, subd. (c)(1)(B).)

“A motion for judgment on the pleadings performs the same function as a general demurrer, and hence attacks only defects disclosed on the face of the pleadings or by matters that can be judicially noticed.” (Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 999, citations omitted.)

“In deciding or reviewing a judgment on the pleadings, all properly pleaded material facts are deemed to be true, as well as all facts that may be implied or inferred from those expressly alleged.” (Fire Ins. Exch. v. Super. Ct. (2004) 116 Cal.App.4th 446, 452.)

II. Discussion

Damavandi’s FAC contains thirty-two causes of action.

The eleven causes of action pleaded against Tibstra are:

(1) the tenth cause of action for civil conspiracy;

(2) the twelfth cause of action for aiding and abetting breach of fiduciary duty;

(3) the fourteenth cause of action for aiding and abetting conversion;

(4) the fifteenth cause of action for violation of Penal Code section 496;

(5) the seventeenth cause of action for inducing breach of contracts;

(6) the eighteenth cause of action for intentional interference with contractual relations;

(7) the nineteenth cause of action for intentional interference with prospective economic relations;

(8) the twentieth cause of action for negligent interference with prospective economic relations;

(9) the twenty-fourth cause of action for restitution to avoid unjust enrichment;

(10) the twenty-fifth cause of action for accounting; and

(11) the thirty-second cause of action for violation of the unfair competition law.

Tibstra moves for judgment on the pleadings on each of these 11 causes of action. (MJOP, p. 15–16.)

A. Civil Conspiracy

1. Legal Standard

“The elements of a civil conspiracy are (1) the formation of a group of two or more persons who agreed to a common plan or design to commit a tortious act; (2) a wrongful act committed pursuant to the agreement; and (3) resulting damages.” (City of Industry v. City of Fillmore (2011) 198 Cal.App.4th 191, 212.)

“Conspiracy is not a cause of action, but a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration. By participation in a civil conspiracy, a coconspirator effectively adopts as his or her own the torts of other coconspirators within the ambit of the conspiracy.¿In this way, a coconspirator incurs tort liability co-equal with the immediate tortfeasors. Standing alone, a conspiracy does no harm and engenders no tort liability. It must be activated by the commission of an actual tort.” (Applied Equip. Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510–511, citations omitted.)

2. Discussion

Tibstra argues that the civil conspiracy cause of action fails because Damavandi does not adequately allege that Tibstra conspired to commit a tort against Damavandi. (MJOP, p. 5:2–3.)

The Court disagrees.

Among other things, Damavandi alleges: (1) that “Tibstra became intricately involved in these matters and the Scheme to divest [Damavandi] of his interests, all without [Damavandi’s] knowledge or consent”; and (2) that “Tibstra . . . entered into a conspiracy to help Aryeh remove [Damavandi] and eliminate [Damavandi’s] membership interests”. (FAC, ¶¶ 57, 62.)

The pleading sufficiently alleges that Tibstra conspired to commit a tort against Damavandi.

B. Aiding and Abetting Causes of Action

1. Legal Standard

a. Aiding and Abetting, Generally

“California has adopted the common law rule for subjecting a defendant to liability for aiding and abetting a tort. Liability may be imposed on one who aids and abets the commission of an intentional tort if the person (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’l Ass’n (2005) 127 Cal.App.4th 1138, 1144, cleaned up.)

“California courts have long held that liability for aiding and abetting depends on proof the defendant had actual knowledge of the specific primary wrong the defendant substantially assisted.” (Casey, supra, at p. 1145.)

b. Breach of Fiduciary Duty

“The elements of a cause of action for breach of fiduciary duty are the existence of a fiduciary relationship, its breach, and damage proximately caused by that breach.” (City of Atascadero v. Merrill Lynch, Pierce, Fenner, & Smith, Inc. (1998) 68 Cal.App.4th 445, 483.)

“There are¿two kinds¿of fiduciary duties — those imposed by law and those undertaken by agreement.” (Gab Bus. Servs. v. Lindsey & Newsom Claim Servs. (2000) 83 Cal.App.4th 409, 416, emphasis omitted, overruled in part on other grounds by Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1154.)

“Fiduciary duties are imposed by law in certain technical, legal relationships such as those between partners or joint venturers, husbands and wives, guardians and wards, trustees and beneficiaries, principals and agents, and attorneys and clients.” (Gab Bus. Servs., supra, at p. 416, citations omitted.)

“A fiduciary duty is undertaken by agreement when one person enters into a confidential relationship with another.” (Gab Bus. Servs., supra, at p. 417.)

c. Conversion

“Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff’s ownership or right to possession of the property; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages.” (Lee v. Hanley (2015) 61 Cal.4th 1225, 1240.)

“It is not necessary that there be a manual taking of the property; it is only necessary to show an assumption of control or ownership over the property, or that the alleged converter has applied the property to his own use. Money can be the subject of an action for conversion if a specific sum capable of identification is involved. Neither legal title nor absolute ownership of the property is necessary. A party need only allege it is entitled to immediate possession at the time of conversion. However, a mere contractual right of payment, without more, will not suffice.” (Farmers Ins. Exch. v. Zerin (1997) 53 Cal.App.4th 445, 451–52 [cleaned up].)

2. Discussion

Defendant argues that the causes of action for aiding and abetting breach of fiduciary duty and conversion fail because Damavandi does not allege that Tibstra had the requisite intent or provided substantial assistance or that such a tort was even committed. (MJOP, p. 6:8–11.)

The Court disagrees.

Among other things, Damavandi alleges: (1) that Tibstra had actual or constructive knowledge of the details surrounding [the] Projects”; (2) that Tibstra became intricately involved in these matters and the Scheme to divest [Damavandi] of his interests, all without [Damavandi’s] knowledge or consent”; (3) that “Tibstra . . . entered into a conspiracy to help Aryeh remove [Damavandi] and eliminate [Damavandi’s] membership interests”; (4) that to do this, Tibstra was involved in an effort to “manufacture a written record against [Damavandi]”; (5) that these actions were substantial factors in causing Damavandi harm via his interests in the various entities; and (6) that Aryeh owed various fiduciary duties to Damavandi. (FAC, ¶¶ 57, 62–64, 113, 143–145, 155–157.)

The pleading sufficiently alleges that Tibstra had the requisite intent and provided substantial assistance to aid and abet in the torts of conversion and breach of fiduciary duty.

C. Penal Code Section 496

1. Legal Standard

“Every person who buys or receives any property that has been stolen or that has been obtained in any manner constituting theft or extortion, knowing the property to be so stolen or obtained, or who conceals, sells, withholds, or aids in concealing, selling, or withholding any property from the owner, knowing the property to be so stolen or obtained, shall be punished by imprisonment in a county jail for not more than one year, or imprisonment pursuant to subdivision (h) of Section 1170. . . .” (Pen. Code, § 496, subd. (a).)

“Any person who has been injured by a violation of subdivision (a) or (b) may bring an action for three times the amount of actual damages, if any, sustained by the plaintiff, costs of suit, and reasonable attorney’s fees.” (Pen. Code, § 496, subd. (c).)

2. Discussion

Tibstra argues that the cause of action for violation of Penal Code section 496 fails because no property was stolen and Tibstra never received, concealed, or withheld any property. (MJOP, p. 7:15–17.)

The Court disagrees.

Among other things, Damavandi alleges: (1) that his interests in various entities had been taken in a manner constituting theft; and (2) that Defendants have continued to withhold and conceal or aid in withholding or concealing this property from Damavandi. (FAC, ¶¶ 164–165.)

“Property” need not be literally taking a personal property or real property away — an equity interest in an entity is sufficient.

Furthermore, the Court must assume the truth of the allegations for the purpose of a demurrer or Motion for Judgment on the Pleadings. The allegation that Tibstra withheld and concealed or aided in the withholding and concealing of the interest from Damavandi is sufficient to allege a violation of Penal Code section 496, subdivision (a).

D. Inducement and Interference Claims

Defendant argues that the inducement and interference causes of action fail because Damavandi does not allege the requisite causation or intent. (MJOP, p. 8:6–7.)

The Court disagrees.

Damavandi repeatedly alleges that Tibstra had the requisite intent and that her actions were a substantial factor in causing Damavandi damages. (FAC, ¶¶ 178, 180, 183, 186–187, 190, 193–194, 197, 200–201.)

E. Restitution

1. Legal Standard

“Unjust enrichment . . . is synonymous with restitution.” (Dinosaur Dev., Inc. v. White (1989) 216 Cal.App.3d 1310, 1314.)

“The elements for a claim of unjust enrichment are ‘receipt of a benefit and unjust retention of the benefit at the expense of another.’” (Prakashpalan v. Engstrom, Lipscomb, & Lack (2014) 223 Cal.App.4th 1105, 1132, quoting Lectrodryer v. SeoulBank (2000) 77 Cal.App.4th 723, 726.)

“The theory of unjust enrichment requires one who acquires a benefit which may not justly be retained, to return either the thing or its equivalent to the aggrieved party so as not to be unjustly enriched.” (Otworth v. Southern Pac. Transp. Co. (1985) 166 Cal.App.3d 452, 460.)

“In addition, as [trial courts have] observed, there is no cause of action in California for unjust enrichment.” (Melchior v. New Line Prod., Inc. (2003) 106 Cal.App.4th 779, 793.)

2. Discussion

Defendant argues that the cause of action for restitution fails because Damavandi does not allege that Tibstra obtained any benefit from Damavandi. (MJOP, p. 9:7–8.)

Restitution (otherwise known as “unjust enrichment”) is not a cause of action in California. While restitution might be available later as a remedy, it is not available as a theory of liability.

However, “[t]he court must, in every stage of an action, disregard any error, improper ruling, instruction, or defect, in the pleadings or proceedings which, in the opinion of said court, does not affect the substantial rights of the parties.” (Code Civ. Proc., § 475.) Mistakenly arguing a remedy as a theory does not affect the Parties’ substantial rights. The Court chooses to ignore this defect with the pleading.

F. Accounting

1. Legal Standard

“A cause of action for an accounting requires a showing that a relationship exists between the plaintiff and defendant that requires an accounting, and that some balance is due the plaintiff that can only be ascertained by an accounting. An action for accounting is not available where the plaintiff alleges the right to recover a sum certain or a sum that can be made certain by calculation. A plaintiff need not state facts that are peculiarly within the knowledge of the opposing party.” (Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 179, citations and paragraph break omitted.)

“[A] fiduciary relationship between the parties is not required to state a cause of action for accounting. All that is required is that some relationship exists that requires an accounting. The right to an accounting can arise from the possession by the defendant of money or property which, because of the defendant's relationship with the plaintiff, the defendant is obliged to surrender.” (Teselle, supra, at pp. 179–180, citation omitted.)

“[T]he nature of a cause of action in accounting is unique in that it is a means of discovery. An accounting is a species of disclosure, predicated upon the plaintiff's legal inability to determine how much money, if any, is due. Thus, the purpose of the accounting is, in part, to discover what, if any, sums are owed to the plaintiff, and an accounting may be used as a discovery device. An action for accounting is not amenable to a motion for summary judgment or summary adjudication upon a showing that the plaintiff does not possess and cannot reasonably obtain the evidence needed to compel the accounting, because the very purpose of the accounting is to obtain such evidence.” (Teselle, supra, at p. 180.)

2. Discussion

Defendant argues that the cause of action for accounting fails because Damavandi does not allege that Tibstra owes anything to Damavandi or that Tibstra had any relationship with Damavandi. (MJOP, p. 9:21–22.)

The Court disagrees.

The purpose of an accounting is to determine the amount of money, if any, is due. It is typically not amenable to a demurrer or even a motion for summary judgment as it is a discovery device.

Here, Damavandi alleges that an accounting is necessary to determine how much property and/or money was received by Tibstra and others as a result of the acts alleged. (FAC, ¶¶ 226–227.)

If in fact no balance is due, then this should be quickly ascertained through an accounting. But at this stage, judgment cannot be granted against the pleading when the allegation has been properly made.

G. Unfair Competition Law

1. Legal Standard

“As used in this chapter, unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by Chapter 1 (commencing with Section 17500) of Part 3 of Division 7 of the Business and Professions Code.” (Bus. & Prof. Code, § 17200.)

2. Discussion

Defendant argues that the cause of action for violation of the unfair competition law (“UCL”) fails because: (1) the UCL is inapplicable; (2) Damavandi cannot seek the available relief; and (3) Tibstra did not engage in any actionable business acts or practices. (MJOP, p. 10:12–14.)

The Court disagrees.

Damavandi has alleged that Tibstra engaged in unfair, unlawful, and fraudulent conduct in violation of the UCL. Damavandi need not have been a consumer or competitor of Tibstra’s to allege a violation of the UCL, and questions of fact cannot be resolved on a demurrer.

III. Conclusion

The Motion for Judgment on the Pleadings is DENIED.