Judge Michael P. Linfield, Case 21STCV46687 2022-08-02 Tentative Ruling

Judge: Michael P. Linfield, Case: 21STCV46687, Date: 2022-08-02 Tentative Ruling

Case Number: 21STCV46687 Hearing Date: August 2, 2022 Dept: 34

SUBJECT: Demurrer to Second Amended Complaint

Moving Party: Defendants Skoti Collins Productions and Gary Skoti Collins

Resp. Party: Plaintiff Volt Mediafix, Inc.

SUBJECT: Motion to Strike Portions of Second Amended Complaint

Moving Party: Defendants Skoti Collins Productions and Gary Skoti Collins

Resp. Party: Plaintiff Volt Mediafix, Inc.

Defendants Skoti Collins Productions and Gary Skoti Collins’ Demurrer to Plaintiff Volt Mediafix, Inc.’s Second Amended Complaint is OVERRULED.

Defendants Skoti Collins Productions and Gary Skoti Collins’ Motion to Strike Portions of Plaintiff Volt Mediafix, Inc.’s Second Amended Complaint is GRANTED as to the entirety of paragraph 84 and DENIED as to the First and Second Causes of Action.

I. BACKGROUND

On December 22, 2021, Plaintiff Volt Mediafix, Inc. (“Volt”) filed a complaint against Defendants Skoti Collins Productions, Inc. (“SCP”), Gary Skoti Collins (“Collins”) and DOES 1 through 20, inclusive (collectively, “Defendants”) alleging the following causes of action:

1. Conversion;

2. Violation of Business & Professions Code § 17200 – Unfair Business Practices;

3. Tortious Interference with Contractual Relations; and

4. Intentional Interference with Prospective Business Advantage

On March 30, 2022, Volt filed a First Amended Complaint against Defendants alleging the same causes of action.

On May 23, 2022, Volt filed a Second Amended Complaint (“SAC”) against Defendants alleging the following causes of action:

1. Breach of Implied Contract;

2. Declaratory Relief;

3. Conversion;

4. Violation of Business & Professions Code § 17200 – Unlawful and Unfair Business Practices; and

5. Intentional Interference with Prospective Business Advantage

On June 24, 2022, Defendants Skoti Collins Productions and Gary Skoti Collins demurred to Volt’s Second Amended Complaint.

On June 24, 2022, Defendants moved the Court to strike the following portions of Volt’s Second Amended Complaint “on the grounds that said portions are improperly inserted or are violative of Code of Civil Procedure § 128.7(b)(3).

1. SAC, Factual Allegations, page 12, paragraph 84 in its entirety that reads: Upon information and belief, and unbeknownst to Plaintiff and Stirling during the course of their dealings with Defendant Collins, Defendant Collins has previously been criminally prosecuted and convicted for crimes involving false impersonation, forgery, and fraud.”

2. SAC, First Cause of Action for Breach of Implied Contract, in its entirety.

3. SAC, Second Cause of Action for Declaratory Relief, in its entirety. (Motion to Strike, p. 1:27—2:5.)

On July 20, 2022, Volt opposed Defendants’ demurrer and motion to strike.

On July 26, 2022, Defendants replied to Volt’s opposition to Defendants’ demurrer.

On July 27, 2022, Defendants replied to Volt’s opposition to Defendants’ motion to strike.

II. ANALYSIS

A. Legal Standard

1. Demurrer

A demurrer is a pleading used to test the legal sufficiency of other pleadings. (Cty. of Fresno v. Shelton (1998) 66 Cal.App.4th 996, 1008–09; Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) It raises issues of law, not fact, regarding the form or content of the opposing party’s pleading. It is not the function of the demurrer to challenge the truthfulness of the complaint. (Unruh-Haxton v. Regents of Univ. of California (2008) 162 Cal.App.4th 343, 365, as modified (May 15, 2008).) For purpose of the ruling on the demurrer, all facts pleaded in the complaint are assumed to be true, however improbable they may be. (CCP §§ 422.10, 589.)

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack; or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311.) No other extrinsic evidence can be considered (i.e., no “speaking demurrers”). A demurrer is brought under Code of Civil Procedure § 430.10 (grounds), § 430.30 (as to any matter on its face or from which judicial notice may be taken), and § 430.50(a) (can be taken to the entire complaint or any cause of action within).

A demurrer may be brought under Code of Civil Procedure section 430.10, subdivision (e) if insufficient facts are stated to support the cause of action asserted. A demurrer for uncertainty may be brought pursuant to Code of Civil Procedure section 430.10, subdivision (f). “A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.) “In general, ‘demurrers for uncertainty are disfavored, and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.’” (Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1135.)

The demurring party must file with the court, and serve on the other party, the: (1) demurrer; (2) notice of hearing; (3) memorandum of points and authorities; and (4) proof of service. (See Cal. Rules of Court, rule 3.1112(a), rule 3.1300(c), rule 3.1320; Code Civ. Proc., § 1005(b).) “A demurrer shall distinctly specify the grounds upon which any of the objections to the complaint . . . are taken. Unless it does so, it may be disregarded.” (CCP § 430.60.)

2. Motion to Strike

"Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof . . ..” (CCP § 435, subd. (b)(1).) "The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading. (b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court." (CCP § 436.) “The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice." (CCP § 437, subd. (a).)

B. Discussion

1. Demurrer

a. First Cause of Action for Breach of Implied Contract

The elements of a cause of action for breach of contract are: (1) the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to plaintiff. (Coles v. Glaser (2016) 2 Cal.App.5th 384, 391.) A cause of action for breach of implied contract has the same elements as does a cause of action for breach of contract, except that the promise is not expressed in words but is implied from the promisor's conduct. (Yari v. Producers Guild of America, Inc. (2008) 161 Cal.App.4th 172, 182.)

Volt alleges all elements of a cause of action for breach of implied contract in that its SAC alleges an implied contract (SAC, ¶¶ 86-92), Volt’s performance under the implied contract (SAC, ¶¶ 93, 94), Defendants’ breach (SAC, ¶¶ 94-96), and resulting damage to Volt (SAC, ¶¶ 97, 98). Defendants’ argument that Volt fails to plead that the parties possessed a clear understanding of their roles and responsibilities under the implied contract is not persuasive because the SAC references a singular purpose for the Facebook group in question that was known to the parties and that Volt provided compensation to Defendants for assistance, all with the understanding that the Facebook group existed to assist Volt. (SAC, ¶¶ 88-92.)

Defendants Skoti Collins Productions and Gary Skoti Collins’ Demurrer to the First Cause of Action for Breach of Implied Contract in Plaintiff Volt Mediafix, Inc.’s Second Amended Complaint is OVERRULED.

b. Second Cause of Action for Declaratory Relief

A party seeking declaratory relief must show a very significant possibility of future harm. In assessing whether declaratory relief is available, a court determines whether a probable future dispute over legal rights between parties is sufficiently ripe to represent an ‘actual controversy’ within the meaning of the statute authorizing declaratory relief, as opposed to purely hypothetical concerns .... An ‘actual controversy’ under the declaratory relief statute is ‘one which admits of definitive and conclusive relief by judgment within the field of judicial administration, as distinguished from an advisory opinion upon a particular or hypothetical state of facts. (Monterey Coastkeeper v. Central Coast Regional Water Quality Control Board (2022) 76 Cal.App.5th 1, 13 (cleaned up).)

Volt alleges all elements of a cause of action for declaratory relief in that its SAC alleges a very significant possibility of future harm (SAC, ¶¶ 99, 108) and an actual controversy (SAC, ¶¶ 99-109). Defendants imply that parties who did not codify their rights and responsibilities within a contract should not seek declaratory relief, and that monetary damages for past harm should be sufficient compensation for any violations between the parties in this case. (Demurrer, p. 8:10-14.) The Court finds that Defendants only illustrate the forward-looking concerns of Volt’s declaratory relief cause of action, as the Second Cause of Action attempts to address ongoing harms and litigation opportunities that could emerge following this case should the parties’ respective rights under the implied contract remain implied.

Lastly, given the future outlook of the Second Cause of Action, the Court finds that it does not duplicate Volt’s breach of implied contract, conversion, or Unfair Business Practices claims. (Demurrer, MPA, p. 8:16-21.)

Defendants Skoti Collins Productions and Gary Skoti Collins’ Demurrer to the Second Cause of Action for Declaratory Relief in Plaintiff Volt Mediafix, Inc.’s Second Amended Complaint is OVERRULED.

c. Third Cause of Action for 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. (Hodges v. County of Placer (2019) 41 Cal.App.5th 537, 551.)

Volt alleges all elements of a cause of action for conversion in that its SAC alleges Volt’s ownership or right to possession of the Facebook group in question (SAC, ¶¶ 110-113), Defendants’ dispossession of Volt’s property rights (SAC, ¶¶ 114-116), and damages (SAC, ¶¶ 117-119). Defendants argue that a cause of action for conversion cannot reach the “the unauthorized taking of intangible interests that are not merged with, or reflected in, something tangible.” (Demurrer, MPA, p. 9:4-13.) Further, Defendants find Volt’s pleading on damages in the Third Cause of Action speculative. (Demurrer, MPA, p. 9:15-21.) Volt notes that digital media can be the subject of conversion claims. (Opposition, p. 10:1—11:23; see also Kremen v. Cohen (9th Cir. 2003) 337 F.3d 1024, 1030, 1033; Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119-125.)

Defendants Skoti Collins Productions and Gary Skoti Collins’ Demurrer to the Third Cause of Action for Conversion in Plaintiff Volt Mediafix, Inc.’s Second Amended Complaint is OVERRULED.

d. Fourth Cause of Action for Violation of Business & Professions Code § 17200 – Unlawful and Unfair Business Practices

By proscribing any unlawful business practice, section 17200 borrows violations of other laws and treats them as unlawful practices that the unfair competition law makes independently actionable. ... The statutory language referring to any unlawful, unfair, or fraudulent practice makes clear that a practice may be deemed unfair even if not specifically proscribed by some other law. Because Business and Professions Code section 17200 is written in the disjunctive, it establishes three varieties of unfair competition—acts or practices which are unlawful, or unfair, or fraudulent. In other words, a practice is prohibited as “unfair” or “deceptive” even if not “unlawful” and vice versa. (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180 (cleaned up).)

The Court finds that Volt sufficiently alleges unlawful and/ or unfair business practices by Defendants sufficient to maintain its Fourth Cause of Action because the Court finds that Volt sufficiently alleged causes of action against Defendants for Breach of Implied Contract, Declaratory Relief, and Conversion.

Defendants Skoti Collins Productions and Gary Skoti Collins’ Demurrer to the Fourth Cause of Action for Violation of Business & Professions Code § 17200 – Unlawful and Unfair Business Practices in Plaintiff Volt Mediafix, Inc.’s Second Amended Complaint is OVERRULED.

e. Fifth Cause of Action for Intentional Interference with Prospective Business Advantage

“For intentional interference, the plaintiff must plead and prove: (1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship. With respect to the type of intentional disruptive acts that are actionable, they must be wrongful by some independent legal measure, beyond interference.

Next, an intentional interference claim requires setting forth facts of (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant. A proximate cause showing is required for a plaintiff to recover for harm that is closely connected to the defendant's alleged wrongful conduct.” (Golden Eagle Land Investment, L.P. v. Rancho Santa Fe Assn. (2018) 19 Cal.App.5th 399, 429–430 (cleaned up); see also San Jose Construction, Inc. v. S.B.C.C., Inc. (2007) 155 Cal.App.4th 1528, 1544-1545.)

Volt alleges all elements of a cause of action for Intentional Interference with Prospective Business Advantage in that its SAC alleges an economic relationship between Volt and Facebook, with the possibility of future economic benefit to Volt (SAC, ¶¶ 128, 129), Defendants’ knowledge of this relationship (SAC, ¶ 130.), Defendants’ intentional acts designed to disrupt the relationship (SAC, ¶¶ 131, 132), actual relationship disruption (SAC, ¶¶ 128, 131), and economic harm to Volt (SAC, ¶ 133). Defendants charge that Volt fails to allege facts that demonstrate a “reasonable expectation of economic advantage” Volt would enjoy absent Defendants’ alleged actions, but the SAC suggests that the Facebook group was created for Plaintiff with membership derived from 30 years of industry contacts. (Demurrer, MPA, p. 11:5-11; SAC, ¶ 112.) The Court finds that Volt sufficiently alleges that the Facebook group was established because of Volt’s desire for economic advantage.

Defendants also suggest that Volt insufficiently alleges that interference occurred in fact and that Defendants are not alleged to have engaged in wrongful conduct separate from the interference itself. (Demurrer, MPA, p. 11:13-28.) However, Volt alleges that Defendants “(i) directly contacting Plaintiff’s then existing and/or prospective clients and falsely misleading those clients to believe an association between Plaintiff and Defendants still existed; and/or (ii) intercepting Plaintiff’s then existing and/or prospective clients’ job offering posts on the Facebook Group.” (SAC, ¶ 132.) The Court finds this constitutes wrongful conduct separate from the alleged interference itself. Volt alleges in-fact interference given Hollis’ retention of Defendants’ production services and Defendants’ interception of a So. Television production job featuring Billie Eilish for the BBC. (SAC, ¶¶ 65-69.)

Defendants Skoti Collins Productions and Gary Skoti Collins’ Demurrer to the Fifth Cause of Action for Intentional Interference with Prospective Business Advantage in Plaintiff Volt Mediafix, Inc.’s Second Amended Complaint is OVERRULED.

2. Motion to Strike

The Court strikes paragraph 84 of Volt’s SAC in its entirety as an improper character allegation.

Under Code of Civil Procedure Section 472, a party may amend its pleading once without leave of the court. (CCP § 472(a).) “Section 435, Code of Civil Procedure, expressly provides for the filing of a notice of motion to strike a complaint in whole or in part. Thus, an amended complaint filed without permission may be stricken upon motion.” (Stafford v. Ballinger (1962) 199 Cal.App.2d 289, 297.) “While it is, of course, the policy of our law to allow great liberality in the amendment of pleadings prior to trial and even during the trial itself, the matter of permitting an amendment, in the final analysis, is within the legal discretion of the trial court.” (Atchison, T. & S. F. Ry. Co. v. Superior Oil Co. (1966) 243 Cal.App.2d 289, 296 (cleaned up).)

The Court finds that Volt filed its First Amended Complaint on March 30, 2022 without leave of court. (Trauben Decl. (Oppose MTS), ¶ 5.) On May 23, 2022, Volt filed and served its SAC. (Trauben Decl. (Oppose MTS), ¶ 19.) The Court lacks any evidence showing that Volt requested leave of the court to file a second amended complaint. However, the instant motion to strike asks the Court to strike specific causes of action, not the entire Second Amended Complaint. While it is proper to move to strike a complaint in whole or in part under CCP § 435, Defendants’ argument in favor of striking Volt’s First and Second Causes of Action in its SAC suggest that Volt’s failure to request leave of court before filing and serving its SAC invalidates only its two new causes of action, not the entire pleading.

This argument is not supported by Stafford. Defendants do not suggest that Volt’s operative pleading is Volt’s First Amended Complaint, but rather argue that they can choose which causes of action the Court should be allowed from Volt’s SAC because of Volt’s failure to request leave to file a second amended complaint. Defendants’ instant motion to strike does not mention what should become of Volt’s Tortious Interference with Contractual Relations claim from its First Amended Complaint, nor do they mention how they would be prejudiced should the Court in its discretion, permit Volt’s SAC as the operative complaint in the present case. Under Stafford, Defendants could move to strike the entire SAC because Volt filed an amended complaint without leave of court in violation of CCP § 472(a); Defendants improperly moved to strike specific causes of action with this rationale. (The Court notes that such a motion, while proper, would probability do no more than delay this action a couple of months and cost both parties an additional $10,000, since Defendants could always move the Court for an order allowing the filing of an Amended Complaint.)

III. CONCLUSION

Defendants Skoti Collins Productions and Gary Skoti Collins’ Demurrer to the Third Cause of Action for Conversion in Plaintiff Volt Mediafix, Inc.’s Second Amended Complaint is OVERRULED.