Judge: Nathan R. Scott, Case: Jaiswal v. Del Franco, Date: 2022-08-26 Tentative Ruling

Demurrer

Defendants David A. Lahar and Ellipsis Water, LLC’s demurrer to complaint is sustained.

Plaintiffs Sanjeev Jaiswal and iFiber Optix Inc. shall have leave to file and serve a first amended complaint within 10 days.

1st cause of action, money had and received.  The complaint fails to state facts sufficient to constitute this cause of action.  (See First Interstate Bank v. State of California (1987) 197 Cal.App.3d 627, 635 [elements for money had and received]; see also CACI No. 3600 [elements for conspiracy]; Mosier v. Southern California Physicians Insurance Exchange (1998) 63 Cal.App.4th 1022, 1048 [same].)

2nd, 3rd, 4th, 5th, & 8th causes of action, fraud.  These claims are uncertain as alleged against Ellipsis.

The complaint also fails to state facts sufficient to constitute a cause of action for fraud against Lahar, especially with respect to the element of causation.  (See Lazar v. Superior Court (1996) 12 Cal.4th 631, 638, 645 [elements, specificity]; see also CACI No. 3600 [elements for conspiracy].)

The complaint specifically alleges that it was defendants Nicholas Thomas Del Franco, Paul A. Garcia, and Montecristo Capital Management who engaged in the fraudulent misconduct that caused the harm alleged under these claims.  (See, e.g., Compl. ¶¶ 16-26, 28-49.)  These allegations control over the general allegations attempting to group the moving defendants and the primary tortfeasors together as “defendants,” or suddenly claiming Lahar was also involved without any further explanation. (See Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1235-1236 [specific allegations control over inconsistent general allegations].)  

6th cause of action, Rule 10b-5 fraud.  The complaint fails to state facts sufficient to constitute this cause of action. It fails to state facts sufficient to allege fraud or that defendants sold any securities.  (See Jensen v. iShares Trust (2020) 44 Cal.App.5th 618, 631 [elements]; Rubke v. Capitol Bancorp Ltd (9th Cir. 2009) 551 F.3d 1156, 1164 [same]; see also 15 U.S.C. § 78j(b) [section 10(b) of the Securities Exchange Act of 1934]; 17 C.F.R. § 240.10b-5(c) [SEC Rule 10b-5].)

9th cause of action, conversion.  The complaint fails to state facts sufficient to constitute this cause of action. (See Voris v. Lampert (2019) 7 Cal.5th 1141, 1150 [elements].)

10th & 11th causes of action, unjust enrichment and accounting, imposition of constructive trust/equitable lien. The complaint fails to state facts sufficient to constitute these causes of action.  (See Professional Tax Appeal v. Kennedy-Wilson Holdings, Inc. (2018) 29 Cal.App.5th 230, 238 [unjust enrichment]; Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 179-180 [accounting]; Michaelian v. State Comp. Ins. Fund (1996) 50 Cal.App.4th 1093, 1114 [a constructive trust requires an underlying cause of action].) 

13th cause of action, declaratory relief.  This cause of action is uncertain as alleged against defendants.  (See Code Civ. Proc., § 1060 [declaratory relief]; Market Lofts Community Association v. 9th Street Market Lofts, LLC (2014) 222 Cal.App.4th 924, 931 [elements].)  

14th cause of action, Section 17200.  This cause of action is based on the prior causes of action alleged against moving defendants, all of which fail. This claim therefore fails as well. (See Lazar v. Hertz Corp., supra, 69 Cal.App.4th at p. 1505 [a UCL claim fails with its predicate claims].)

Motion to Vacate

Defendant Nicholas Thomas Del Franco’s motion to vacate is granted.

The 7/13/22 order for defendant’s appearance and examination as a judgment debtor (ROA #214) is vacated.

The prejudgment attachment statutes do not provide for a judgment debtor examination or similar court proceeding of the defendant prior to the entry of judgment.

Instead, a plaintiff with a RTAO may use the Discovery Act to learn the identity, location, and value of property in which the defendant has an interest.  (Code Civ. Proc., § 485.230.)  

Motion for Stay/Temporary Protective Order

Defendant Del Franco’s motion to stay enforcement of right to attach order and for temporary protective order is denied.

Del Franco invokes the court’s inherent authority to stay enforcement of the RTAO so he can maintain access to funds necessary for him to retain counsel.  (Ex Parte App. at pp. 6, 9.)

 “Courts ... do not have the authority to adopt procedures or policies that conflict with statutory law.”  (Weiss v. People ex rel. Department of Transportation (2020) 9 Cal.5th 840, 857.)

Here, Code of Civil Procedure section 917.65 provides that “[t]he perfecting of an appeal shall not stay enforcement of a right to attach order unless an undertaking is given.” (Code Civ. Proc., § 917.65.)

Defendant has not shown he “is indigent and is unable to obtain sufficient sureties, whether personal or admitted surety insurers.”  (Code Civ. Proc., § 995.240; accord Williams v. Freedomcard, Inc. (2004) 123 Cal.App.4th 609, 615 [burden]; see also Code Civ. Proc., § 918, subd. (b) [possible 70-day stay].)

Defendant’s request for a protective order regarding plaintiffs’ subpoena to Morgan Stanley Smith Barney LLC rests on the same contentions as his stay request.

And as already noted, plaintiffs may conduct discovery into the identity, location, and value of property in which the defendant has an interest.  (See Code Civ. Proc., § 485.230.)  The subpoena is properly limited to this information.  (See Ho Decl. at Ex. 3 [subpoena].)

Plaintiffs shall give notice of all rulings.