Judge: Robert B. Broadbelt, Case: 18STCV06655, Date: 2022-08-23 Tentative Ruling
Case Number: 18STCV06655 Hearing Date: August 23, 2022 Dept: 53
Superior Court of California
County of Los Angeles – Central District
Department
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Order
RE: (1)
plaintiff’s
request to file documents under seal; (2)
defendant’s
application to file documents under seal; (3)
defendant’s
special motion to strike portions of first amended and supplemental complaint |
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MOVING PARTY: Plaintiff AEG Presents Productions, LLC
RESPONDING PARTY: Unopposed
(1)
Plaintiff’s
Request to File Documents under Seal
MOVING PARTY: Defendant Danny Wimmer Presents, LLC
RESPONDING PARTY: Unopposed
(2)
Defendant’s
Application to File Documents under Seal
MOVING PARTY: Defendant Danny Wimmer Presents, LLC
RESPONDING PARTY: Plaintiff AEG Presents Productions, LLC
(3)
Defendant’s
Special Motion to Strike Portions of First Amended and Supplemental Complaint
The court
considered the moving, opposition, and reply papers filed in connection with
this motion.
BACKGROUND
Plaintiff AEG
Presents Productions, LLC (“Plaintiff”) filed this action on November 29, 2018
against defendant Danny Wimmer Presents, LLC (“Defendant”). The operative First Amended and Supplemental Complaint
was filed on January 11, 2022, against Defendant, and alleges 27 causes of
action on behalf of the partnerships Rock on the Range and Carolina Rebellion.
Defendant filed its Special
Motion to Strike Portions of First Amended and Supplemental Complaint Pursuant
to Code of Civil Procedure section 425.16 on March 14, 2022. Both Plaintiff and Defendant filed, with
their opposition and reply papers, applications to file certain documents under
seal.
EVIDENTIARY OBJECTIONS
The court
sustains Plaintiff’s July 12, 2022 evidentiary objections to Exhibits M, N, and
O attached to the supplemental declaration of Danny Hayes, filed by Defendant
in reply. (Jay v. Mahaffey (2013)
218 Cal.App.4th 1522, 1537.) The court
denies Plaintiff’s request that the court consider Plaintiff’s additional
evidence, submitted as Exhibits I and J to the supplemental declaration of
Kathy Jorrie, because Plaintiff is not permitted to introduce supplemental opposition
evidence. (Ibid.)
LEGAL STANDARD
Defendant has
filed a special motion to strike portions of the First Amended and Supplemental
Complaint under Code Civil Procedure section 425.16, also known as the
anti-SLAPP (“strategic lawsuit against public participation”) statute.
“The anti-SLAPP
procedures are designed to shield a defendant’s constitutionally protected
conduct from the undue burden of frivolous litigation.” (Baral v. Schnitt (2016) 1 Cal.5th 376,
393.) “The anti-SLAPP statute does not
insulate defendants from any liability for claims arising from the protected
rights of petition or speech. It only
provides a procedure for weeding out, at an early stage, meritless claims
arising from protected activity.” (Id.
at p. 384.)
“Resolution of
an anti-SLAPP motion involves two steps. First, the defendant must establish that the
challenged claim arises from activity protected by section 425.16. If the defendant makes the required showing,
the burden shifts to the plaintiff to demonstrate the merit of the claim by
establishing a probability of success.” (Ibid. [citation omitted].) The California Supreme Court has “described
this second step as a ‘summary-judgment-like procedure.’ The court does not weigh evidence or resolve
conflicting factual claims. Its inquiry
is limited to whether the plaintiff has stated a legally sufficient claim and
made a prima facie factual showing sufficient to sustain a favorable judgment. It accepts the plaintiff’s evidence as true,
and evaluates the defendant’s showing only to determine if it defeats the
plaintiff’s claim as a matter of law. ‘[C]laims
with the requisite minimal merit may proceed.’” (Id. at pp. 384-385 [citations
omitted].)
PLAINTIFF’S MOTION TO SEAL
Plaintiff moves
the court, in a memorandum attached to its Notice of Lodging Under Seal
Exhibits, for an order granting leave to file certain documents under seal in
support of its opposition to Defendant’s special motion to strike. Specifically, Plaintiff requests that the
court seal the following documents: (1) exhibits 14-16, 18, 21, 23, 25, 29, 42,
and 44 to the Declaration Certifying Authenticity of Business Records Produced
by Haslam Sports Group, LLC; (2) exhibit 9 to the Affidavit Certifying
Authenticity of Business Records Produced by Charlotte Motor Speedway, LLC; (3)
exhibits 30, 31, 33, 34, 54, and 57 to the Affidavit of Thomas Vesey; (4)
exhibits C, E-J, and L-Y to the Declaration of Melissa Ormond; and (5) exhibits
11-13, 21, and 25-39 to the Declaration of Kathy A. Jorrie.
The court finds
that (1) there exists an overriding interest that overcomes the right of public
access to the above documents, as they contain confidential information (such
as financial information, CAD Drawings, Co-Promotion Agreements that have
confidentiality provisions, and emergency response and traffic plans); (2) the
overriding interest supports sealing the record so that the confidential
information will not appear as part of the public record, including materials
that “law enforcement and other governmental agencies would prefer as a matter
of policy not to disclose to the general public”; (3) a substantial probability
exists that the overriding interest will be prejudiced if the record is not
sealed; (4) the proposed sealing is narrowly tailored; and (5) there are no
less restrictive means to achieve the overriding interests presented here. (Jorrie Decl., ¶¶ 3-4.)
The court orders
that the unredacted versions of the following evidence shall be filed under
seal: (1) exhibits 14-16, 18, 21, 23, 25, 29, 42, and 44 to the Declaration
Certifying Authenticity of Business Records Produced by Haslam Sports Group,
LLC, filed on June 30, 2022; (2) exhibit 9, pages 20 through 25 to the
Affidavit Certifying Authenticity of Business Records Produced by Charlotte
Motor Speedway, LLC, filed on June 30, 2022; (3) exhibits 30, 31, 33, 34, 54,
and 57 to the Affidavit of Thomas Vesey, filed on June 30, 2022; (4) exhibits
C, E-J, and L-Y to the Declaration of Melissa Ormond, filed on June 30, 2022;
and (5) exhibits 11-13, 21, and 25-39 to the Declaration of Kathy A. Jorrie,
filed on June 30, 2022.
Pursuant to
California Rules of Court, rule 2.551 subdivision (e), the court directs the
clerk to file this order, maintain the records ordered sealed in a secure
manner, and clearly identify the records as sealed by this order.
DEFENDANT’S APPLICATION FOR
ORDER TO FILE RECORDS UNDER SEAL
Defendant,
pursuant to its July 7, 2022 Application for Order to File Records under Seal,
moves the court for an order sealing exhibits P and Q to the supplemental
declaration of Johnny White.
Based on the
arguments and the supporting declaration of Johnny White filed by Defendant in
support of its application, the court finds that (1) there exists an overriding
interest that overcomes the right of public access to exhibits P and Q, because
these documents were designated as highly confidential by third-party Haslam
Sports Group, LLC when it produced the documents in response to an out-of-state
subpoena served by Plaintiff; (2) this overriding interest supports sealing the
record; (3) a substantial probability exists that the overriding interest will
be prejudiced if the record is not sealed since highly confidential information
produced by a third-party will become part of the public record; (4) the
proposed sealing is narrowly tailored; and (5) there are no less restrictive
means to achieve the overriding interest.
(White Decl., ¶¶ 2-3.)
The court orders
that the unredacted versions of the following evidence shall be filed under
seal: exhibits P and Q to the supplemental declaration of Johnny White, filed
on July 7, 2022.
Pursuant to
California Rules of Court, rule 2.551 subdivision (e), the court directs the
clerk to file this order, maintain the records ordered sealed in a secure
manner, and clearly identify the records as sealed by this order.
DEFENDANT’S SPECIAL MOTION
TO STRIKE (ANTI-SLAPP)
Defendant moves
to strike the following claims in Plaintiff’s First Amended and Supplemental
Complaint (“FASC”): “government entities” (FASC ¶ 54); “DWP utilized the CAD
drawings for Rock on the Range and, on information and belief, the CAD drawings
for Carolina Rebellion, in the production of, and to secure permits for Sonic
Temple and Epicenter Festival, respectively” (FASC ¶ 58); “utilizing
partnership assets for its sole gain” (FASC ¶ 69); “CAD drawings without AEG’s
consent; (b) by disclosing to third parties confidential information provided
or produced in connection with Rock on the Range without AEG’s consent” (FASC ¶
109); “utilizing partnership assets for its sole gain” (FASC ¶ 153); and “CAD
drawings and other Festival Materials without AEG’s consent; (b) by disclosing
to third parties confidential information related to Carolina Rebellion without
AEG’s consent” (FASC ¶ 185). The court
notes that Defendant initially moved to strike the claim “to bolster its
credibility with government officials in Ohio” in paragraph 42, but that
Defendant withdrew its motion to strike that phrase in its April 29, 2022
opposition to Plaintiff’s motion for anti-SLAPP discovery. (April 29, 2022 Opp., p. 13, fn. 1.)
Specifically,
Defendant moves to strike these claims as expressed in Plaintiff’s first and
fourteenth causes of action for breach of fiduciary duty, brought on behalf of
Rock on the Range and Carolina Rebellion, respectively, and Plaintiff’s sixth
and eighteenth causes of action for breach of contract, brought on behalf of
Rock on the Range and Carolina Rebellion, respectively. (Baral, supra, 1 Cal.5th at pp.
392-393.)
1.
Commercial Speech Exemption
Plaintiff’s
opposition raises the threshold issue of whether the challenged claims concern
exempted commercial speech under section 425.17, which the court must first
consider before proceeding to an analysis under section 425.16. (Xu v. Huang (2021) 73 Cal.App.5th 802,
807.)
“The anti-SLAPP
statute does not apply to any cause of action brought against a person
primarily engaged in the business of selling or leasing goods or
services…arising from any statement or conduct by the person if” both (1) the
statement or conduct consists of representations of fact about that person’s or
a business competitor’s business operations, goods, or services, that is made
for the purpose of obtaining approval for, promoting, or securing sales or
leases in the person’s goods or services, or was made in the course of
delivering that person’s goods or services, and (2) the intended audience is an
actual or potential buyer or customer, or the statement or conduct arose out of
or within the context of a regulatory approval process, proceeding, or
investigation. (Code Civ. Proc., §
425.17, subd. (c).)
The California
Supreme Court has, in taking the statutory language set forth in section
425.17, ruled that commercial speech is exempt from the anti-SLAPP statute upon
the demonstration of four factors: “(1) the cause of action is against a person
primarily engaged in the business of selling or leasing goods or services; (2)
the cause of action arises from a statement or conduct by that person
consisting of representations of fact about that person’s or a business
competitor’s business operations, goods, or services; (3) the statement or
conduct was made either for the purpose of obtaining approval for, promoting,
or securing sales or leases of, or commercial transactions in, the person’s
goods or services or in the course of delivering the person’s goods or services;
and (4) the intended audience for the statement or conduct meets the definition
set forth in” subdivision (c)(2) of section 425.17. (Simpson Strong-Tie Co., Inc. v. Gore
(2010) 49 Cal.4th 12, 30 (“Simpson”).) The
burden of proof as to the applicability of this exemption falls on the party
seeking the benefit of it. (Id.
at p. 26.)
Plaintiff argues
that this exemption applies because Defendant is in the business of producing
music festivals; Plaintiff’s claims arise from representations made to
government entities about Defendant’s replacement festivals in order to obtain
approval for Defendant to stage its festivals; and Defendant’s statements were
made in the context of a regulatory approval process. Defendant denies this exemption applies,
contending that there is no evidence that Defendant made the subject
statements, and, even if Plaintiff had met its burden in establishing the
applicability of the exemption, Defendant’s conduct falls within a statutory
exception.
The court finds
that Plaintiff has not met its burden to establish the applicability of
the commercial speech exemption.
First, the
parties do not dispute that Defendant is an entity engaged in the business of promoting
music festivals and therefore is “primarily engaged in the business of selling
or leasing goods or services….” (Simpson,
supra, 49 Cal.4th at p. 30.)
Second,
Plaintiff argues that the statements that serve as the basis for its suit are
those made to government entities regarding Defendant’s replacement festivals
through the use of the computer-assisted design drawings (“CAD Drawings”). Defendant contends that the alleged
statements were not made by Defendant as required by the language of
this exemption. (Simpson,
supra, 49 Cal.4th at p. 30 [“the cause of action arises from a
statement or conduct by that person…”].)
As to Rock on
the Range, the court finds that Plaintiff has not met its burden of
establishing that the statements were made by Defendant as to the submission of
and statements relating to allegedly protected information with the Application
for Certificate of Use and Occupancy regarding Sonic Temple. The evidence submitted demonstrates that the
application was not submitted by Defendant, but rather, was created, filed, and
submitted by Ryan Martin of Columbus Crew SC, who is listed as the applicant. (Haslam Sports Group Tywang Decl., ¶ 14, Ex.
42 [2019 Application for Certificate of Use and Occupancy filed by Applicant
Ryan Martin]; Jorie Decl., Ex. 7.)
Plaintiff has therefore failed to establish that its claims relating to
this application “arise[] from a statement or conduct by that person,” i.e.,
Defendant. (Simpson, supra, 49
Cal.4th at p. 30.)
As to Carolina
Rebellion, the court finds that Plaintiff has not met its burden of
establishing that the statements were made by Defendant as to the submission of
allegedly protected information with the Carnivals, Fairs & Outdoor
Concerts permit application regarding the Epicenter Festival. Plaintiff has introduced communications
indicating that it was Nathan Armstrong, who is affiliated with Defendant, that
submitted the Operational Permit Application to Adam Ryerson on January 3,
2020. (Charlotte Motor Speedway LLC
Decl., Ex. 18; see also Charlotte Motor Speedway LLC Decl., Exs. 14, 16.) However, the court has not received a copy of
the application as transmitted. Accordingly,
the court has no evidence establishing that Defendant was the applicant and
made protected statements. Although the
evidence may establish that Defendant transmitted the application, the court
has not been presented with evidence proving that Defendant was the applicant
or person who made the statements on the application relating to the CAD
Drawings. Moreover, it appears that
Thomas Vesey, of Charlotte Motor Speedway, may have transmitted the CAD
Drawings. (Vesey Decl., Ex. 30.)
For the reasons
set forth above, the court finds that Plaintiff has failed to meet its burden
of proving that the subject statements were made by Defendant and thus has
failed to establish that its claims fall within the purview of the commercial
speech exemption.
The court therefore
proceeds with its analysis under section 425.16. (Xu, supra, 73 Cal.App.5th at p.
807.)
Courts analyze
special motions to strike under a two-step approach. “Initially, the
moving defendant bears the burden of establishing that the challenged
allegations or claims ‘aris[e] from’ protected activity in which the defendant
has engaged.” (Park v. Board of Trustees of California State
University (2017) 2 Cal.5th 1057, 1061.) “[T]he statutory phrase
‘cause of action…arising from’ means simply that the defendant’s act underlying
the plaintiff’s cause of action must itself have been an act in
furtherance of the right of petition or free speech. [Citation.] In
the anti-SLAPP context, the critical point is whether the plaintiff’s cause of
action itself was based on an act in furtherance of the defendant’s
right of petition or free speech.” (City of Cotati v. Cashman (2002)
29 Cal.4th 69, 78.) The moving defendant will meet this burden by
demonstrating that the plaintiff’s claim falls in one of the categories
outlined in Code of Civil Procedure section 425.16, subdivision (e). (Ibid.)
The protected
acts in furtherance of a defendant’s right of petition or free speech
include:
(Code Civ. Proc. § 425.16, subd.
(e).)
As set forth
above, Defendant seeks not to strike entire causes of action, but instead seeks
to strike separate claims that it contends are subject to the anti-SLAPP
statute. “[U]nder Baral, an
anti-SLAPP motion may be directed to specific allegations of protected activity
which constitute claims for relief but do not constitute an entire cause of
action as pleaded.” (Newport Harbor
Offices & Marina, LLC v. Morris Cerullo World Evangelism (2018) 23
Cal.App.5th 28, 48.) Thus, “[a]nalysis
of an anti-SLAPP statute is not confined to evaluating whether an entire cause
of action, as pleaded by the plaintiff, arises from protected activity or has
merit. Instead, courts should analyze
each claim for relief—each act or set of acts supplying a basis for relief, of
which there may be several in a single pleaded cause of action—to determine
whether the acts are protected, and, if so, whether the claim they give rise to
has the requisite degree of merit to survive the motion.” (Bonni v. St. Joseph Health System (2021)
11 Cal.5th 995, 1010.)
The court
therefore evaluates whether Defendant has met its burden of proving that the
subject claims for relief constitute protected activity.
The court finds
that Defendant has met its burden of establishing that the claims set forth in
paragraphs 54 and 58 “aris[e] from any act of [Defendant] in furtherance of
[Defendant’s] right of petition or free speech.” (Code Civ. Proc., § 425.16, subd. (b)(1),
(e)(1); Park, supra, 2 Cal.5th at p. 1061.) The court finds that Defendant has met its
burden of establishing that the claims set forth in paragraphs 69, 109, 153,
and 185 arise from protected activity only to the extent that they are based on
the claims set forth in paragraphs 54 and 58.
(Ibid.)
The challenged
claims generally allege that Defendant used confidential materials—the CAD Drawings—to
secure permits for its Sonic Temple and Epicenter Festival in breach of (1) the
fiduciary duties owed by Defendant to Plaintiff, and (2) the Co-Promotion
Agreements executed by Defendant and Plaintiff on behalf of Rock on the Range
and Carolina Rebellion, respectively.
(FASC ¶¶ 58 [generally], 69, 153 [breach of fiduciary duty], 109, 185
[breach of contract].)
Defendant argues
that Plaintiff’s breach of contract causes of action “in part seek relief based
on allegations arising from protected activity such that the first prong of the
statute is satisfied” pursuant to the permissible claim-by-claim approach. (Mot., 15:8-11.) As to the breach of fiduciary duty claims,
Defendant contends that they are similarly based on the allegation that
Defendant “utilized” the CAD drawings in order to obtain permits. Plaintiff denies that its claims arise from
protected activity, arguing that “the core injury-producing conduct was DWP’s
taking of the partnership’s festival business for itself, which involved the
unauthorized use of CAD Drawings belonging to the partnerships, not DWP’s
filing of applications for permits….”
(Opp., 14:14-16.)
First, the court
finds that the claim that Defendant submitted confidential information related
to the festivals to “government entities” arises from an act in furtherance of
Defendant’s right to petition to the extent that it is based on Defendant’s
alleged statements and submissions to government entities made to secure
permits for Defendant’s festivals. (FASC
¶ 54.) Thus, Plaintiff’s claim that
Defendant submitted confidential information to “government entities” as
alleged in this paragraph arise from Defendant’s protected petitioning
activity. (Code Civ. Proc., § 425.16,
subd. (e)(1); Midland Pacific Building Corp. v. King (2007) 157
Cal.App.4th 264, 274 [holding that claims arising out of statements made and
plans submitted to the planning commission and city council arose from
protected activity].)
Second, the court finds that the claim
that Defendant “utilized the CAD drawings… to secure permits for[] Sonic Temple
and Epicenter Festival” arises from an act in furtherance of Defendant’s right
to petition. (FASC ¶ 58.) Plaintiff’s claim is based on the written and
oral statements made by Defendant in an official proceeding authorized by law
in order to secure permits, which implicates and arises from Defendant’s
protected petitioning activity. (Code
Civ. Proc., § 425.16, subd. (e)(1); Midland Pacific Building Corp., supra,
157 Cal.App.4th at pp. 272, 274.) However, the court finds that the claim that
Defendant utilized the CAD Drawings “in the production of” the festivals does
not arise from protected activity because that act—producing music festivals—does
not implicate any activity described in section 425.16, subdivision (e).
Third, the court finds that the claims
that Defendant breached its fiduciary duties by “utilizing partnership assets
for its sole gain” as to Rock on the Range and Carolina Rebellion,
respectively, arise in part from acts in furtherance of Defendant’s right to
petition and arise in part from unprotected activity. (FASC ¶¶ 69, 153.) The court notes that Defendant has argued
that these allegations—through the use of the word
utilizing—have necessarily implicated Plaintiff’s earlier claim that Defendant
utilized the CAD drawings to secure permits for its festivals. (See FASC ¶ 58.) As alleged, these claims appear to implicate
both protected and unprotected activity.
To the extent that these claims are based on the allegation that
Defendant breached its fiduciary duties by “utilizing” the CAD Drawings in an
effort to secure permits, they arise from protected activity for the reasons
set forth above. However, Plaintiff has
alleged that other assets have been wrongfully taken and used by
Defendant. For example, Plaintiff
alleges that Defendant (1) is using “Rock on the Range and Carolina Rebellion
names and intellectual property associated with such brands;” (2) is “utilizing
Rock on the Range photographs and video clips” in order to promote its Sonic
Temple festival; (3) “utilized other photographs” from Carolina Rebellion to
market its Epicenter Festival; and (4) continues to sell Rock on the Range and
Carolina Rebellion merchandise “in a manner that suggests that [Defendant] owns
and controls the” brands. (FASC ¶¶
54-56.)
A “targeted claim must amount to a ‘cause
of action’ in the sense that it is alleged to justify a remedy…. [P]articular alleged acts
giving rise to a claim for relief may be the object of an anti-SLAPP
motion.” (Baral, supra, 1
Cal.5th at p. 395.) In so ruling, the
court considers the elements of the challenged claims, and what actions by
Defendant supply those elements and form the basis of its liability. (Park, supra, 2 Cal.5th at p.
1063.)
Here, the challenged claims in
paragraphs 69 and 153 implicate protected activity to the extent that they are
referring to the claim set forth in paragraph 58, but implicate unprotected
activity to the extent it is referring to the claims set forth in paragraphs 54
through 56. Thus, the court (1) finds
that the claims, as based on paragraph 58, arise from acts in furtherance of
Defendant’s right to petition and supply the basis for the element of breach of
fiduciary duty, and (2) therefore proceeds with the second prong to determine
whether Plaintiff has a probability of prevailing on its claims that Defendant
breached its fiduciary duties by submitting the CAD Drawings to government
entities. The court notes,
however, that, if Plaintiff fails to meet its burden of establishing a
probability of prevailing, the court cannot strike the challenged language in
paragraphs 69 and 153 in their entirety, as that would require the court to
strike allegations relating to unprotected activity (i.e., claims that Defendant
wrongfully utilized other assets separate from the use of the CAD Drawings in
the permitting process), and may only strike these allegations to the extent
they are based on protected activity. (Baral,
supra, 1 Cal.5th at p. 382 [the anti-SLAPP statute “does not reach claims
based on unprotected activity”].)
Finally, the court finds that the
claims that Defendant breached the Rock on the Range and Carolina Rebellion Co-Promotion
Agreements “by disclosing to third parties
confidential information provided or produced in connection with Rock on the
Range without AEG’s consent” and “by disclosing to third parties
confidential information related to Carolina Rebellion without AEG’s consent”
arise in part from acts in furtherance of Defendant’s right to petition and
arise in part from unprotected activity.
(FASC ¶¶ 109, 185.) These claims,
like the claims described above, appear to implicate both (1) the claim in
paragraph 58 relating to Defendant’s submission of confidential information “to
secure permits for” its festivals and (2) the claim in paragraph 54 that
Defendant disclosed confidential information, including the Rock on the Range
and Carolina Rebellion names and photographs to “destination analysts,
government entities, sponsors, vendors, venues, and other third parties.” Accordingly, the claims set forth in
Plaintiff’s breach of contract causes of action implicate the alleged
disclosure to government entities—arising from protected activity for the
reasons discussed in connection with the preceding claims—as well as the
alleged disclosure of information to other third parties—which does not
arise from protected activity. Thus, for
the reasons set forth above, if Plaintiff fails to establish a probability of
prevailing on these claims, the court may strike the challenged allegations only
to the extent they are based on protected activity. (Baral, supra, 1 Cal.5th at p. 382
[the anti-SLAPP statute “does not reach claims based on unprotected activity”].)
The court therefore proceeds to the analysis
on the second prong as to each of the challenged claims to the extent they are
based on the allegation concerning Defendant’s allegedly unlawful acts committed
in order “to secure permits” for Defendant’s festivals. (FASC ¶¶ 54, 58.)
B. Second Prong: Probability of Prevailing
on the Merits
The second prong places the burden on
the plaintiff to establish that there is a probability the plaintiff will
prevail on the claim. (Code Civ. Proc.,
§ 425.16, subd. (b).) The plaintiff, in
establishing this, must show that the complaint is both legally sufficient and
supported by a sufficient prima facie showing of facts to sustain a favorable
judgment. (Matson v. Dvorak
(1995) 40 Cal.App.4th 539, 548.) “This
is a ‘summary-judgment-like procedure.’ [Citation.]
The pleadings and evidentiary
submissions of both parties are considered (§ 425.16, subd. (b)(2)), and the
evidence favorable to plaintiffs is accepted as true. [Citation.] Plaintiffs need only establish that their
claim has ‘minimal merit’ to avoid being stricken as a SLAPP.” (Olivares v.
Pineda (2019) 40 Cal.App.5th 343, 353.) The plaintiff cannot rely solely on the
allegations in the complaint, but must provide the court with sufficient evidence
to allow the court to determine that the plaintiff has a probability of
prevailing. (ComputerXpress, Inc. v.
Jackson
(2001) 93 Cal.App.4th 993, 1010.) The
court does not weigh the defendant’s evidence against the plaintiff’s in terms
of credibility or persuasiveness; “[r]ather, the defendant’s evidence is
considered with a view toward whether it defeats the plaintiff’s showing as a
matter of law, such as by establishing a defense or the absence of a necessary
element.” (1-800 Contacts, Inc. v.
Steinberg (2003) 107 Cal.App.4th 568, 585.)
On this prong, the
court considers whether (1) Plaintiff has met its burden of establishing there
is a probability that Plaintiff will prevail on its breach of fiduciary duty
causes of action to the extent they are based on the allegation that Defendant
breached its fiduciary duties by submitting to government entities the CAD Drawings
in order to secure permits, and (2) Plaintiff has met its burden of
establishing there is a probability that Plaintiff will prevail on its breach
of contract causes of action to the extent they are based on the allegation
that Defendant breached its contractual obligations by submitting to government
entities the CAD Drawings in order to secure permits.
1. First Cause of Action for Breach of
Fiduciary Duty (as to Rock on the Range); Fourteenth Cause of Action for Breach
of Fiduciary Duty (as to Carolina Rebellion)
“The elements of a cause of action for
breach of fiduciary duty are the existence of a fiduciary relationship, breach
of fiduciary duty, and damages.” (Oasis
West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 820.)
Defendant contends that Plaintiff
cannot establish a probability of prevailing on its breach of fiduciary causes
of action because (1) Plaintiff cannot establish the existence of a fiduciary
relationship between it and Defendant; (2) Plaintiff cannot establish the
element of breach since the CAD Drawings were not partnership assets; and (3)
Plaintiff cannot establish damages resulting from the alleged disclosure of the
drawings.
The court finds that Plaintiff has met
its burden to establish that its breach of fiduciary duty causes of action, to
the extent they are based on the claim that Defendant submitted the CAD Drawings
in applying for permits with the government, have at least minimal merit. (Park,
supra, 2 Cal.5th at p. 1061.)
First, the court finds that Plaintiff
has met its burden to establish the probability of proving the element of an
existence of a fiduciary relationship between Plaintiff and Defendant as to
both Rock on the Range and Carolina Rebellion.
Before one can be charged with a
fiduciary obligation, that person must 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. (City
of Hope National Medical Center v. Genentech, Inc. (2008) 43 Cal.4th 375,
386.) Examples of relationships imposing
a fiduciary obligation as a matter of law include a joint venture, partnership,
or agency. (Ibid.) In general, the association of two or more
persons to carry on as co-owners of a business for profit forms a partnership,
whether or not they intend to form a partnership. (Corp. Code, § 16202, subd. (a).) While the sharing of gross returns does not
by itself establish a partnership, even if the persons sharing them have a
joint or common right or interest in property from which the returns are
derived, a person receiving a share of the profits of a business is presumed to
be a partner. (Corp Code, § 16202,
subds. (c)(2), (c)(3).)
Plaintiff introduces evidence that (1)
the parties agreed to equal sharing of profits, and (2) Danny Hayes, CEO for Defendant, stated that
Plaintiff and Defendant were “equal partners and joint owners of the Rock on
the Range [and] Carolina Rebellion” and that they “have had an extremely
successful partnership thus far….”
(Hayes Decl., Ex. A, 2017 Rock on the Range Co-Promotion Agreement, ¶ 3,
subd. (b) [net event revenue shall be distributed with thirty-five percent
going to each co-promoter (i.e., Plaintiff and Defendant)]; Hayes Decl., Ex. B,
2017 Carolina Rebellion Co-Promotion Agreement, ¶ 2, subd. (d) [the
parties shall bear a promoter loss and participate in a promoter profit on a
50/50 basis]; Jorrie Decl., Ex. 24 [email from Hayes].)
The existence of a partnership depends
primarily upon the intention of the parties ascertained from the terms of the
agreement and from surrounding circumstances.
(Eng v. Brown (2018) 21 Cal.App.5th 675, 694.) “Ordinarily the existence of a partnership is
evidenced by the right of the respective parties to participate in the profits
and losses and in the management of the business.” (Ibid.) “In ascertaining the intention of the
parties, where they have entered into a written agreement, such intention
should be determined chiefly from the terms of the writing…. However, ‘[a] partnership need not be
evidenced by writing [citation]. It is
immaterial that the parties do not designate the relationship as a partnership
or realize that they are partners, for the intent may be implied from their
acts [citations].’” (Ibid.)
The court finds that the evidence
presented by Plaintiff establishing that the parties shared profits and the
statement made by Defendant’s CEO sufficiently evidences the parties’ intent to
form a partnership. The court notes that
the Co-Promotion Agreement as to Carolina Rebellion includes a provision
stating that the terms shall not “be deemed or construed as creating any
partnership, joint venture…agency or other relationship between the
Parties….” (Hayes Decl., Ex. B, 2017
Carolina Rebellion Co-Promotion Agreement, ¶ 12.) However, the question of partnership is one
of fact, and intent to form such a relationship may also be proven by
evaluating the parties’ actions. (Eng,
supra, 21 Cal.App.5th at p. 694.) The
court finds that Plaintiff has, for purposes of this motion, met its burden of
establishing the probability that it can prove the existence of a fiduciary
relationship between Plaintiff and Defendant based on the parties’ agreement to
share profits and the evidence of intent to form a partnership based on the
statement made by Defendant’s CEO.
Second, the court finds that Plaintiff
has met its burden of establishing its probability of proving the element of
breach since Plaintiff produces evidence establishing that the CAD Drawings are
partnership assets. The court notes that
the Rock on the Range and Carolina Rebellion Co-Promotion Agreements expressly
identify specific items that were owned jointly by Plaintiff and Defendant,
(e.g., the events’ names and related intellectual property), which do not
include the CAD Drawings. (Hayes Decl.,
Ex. A, 2017 Rock on the Range Co-Promotion Agreement, ¶ 7, subd. (a) [the
parties shall jointly own the event’s names and intellectual property]; Hayes
Decl., Ex. B, 2017 Carolina Rebellion Co-Promotion Agreement, ¶ 3, subd.
(d) [the parties shall jointly own all event-related data, demographic, and
certain customer information].) However,
Plaintiff presents evidence that Plaintiff and Defendant jointly created,
engaged others to create, and paid for the preparation of the CAD Drawings with
partnership funds, which establishes a presumption that the CAD Drawings are
partnership property. (Corp. Code, §
16204, subd. (c) [“Property is presumed to be partnership property if
purchased with partnership assets, even if not acquired in the name of the
partnership”]; Ormond Decl., ¶ 22; Ormond Decl., Ex. H at p. 72; Ormond
Decl., Ex. I at p. 74; Ormond Decl., Ex. J at p. 76.)
Third, the court finds that Plaintiff
has met its burden of establishing its probability of proving the element of
damages. Plaintiff argues both that
Plaintiff can establish (1) damages in the form of the value of its share of
the festivals taken by Defendant, and (2) nominal damages. As to the first point, Plaintiff submits the
declaration of the COO of Festivals of AEG Presents LLC, the owner of
Plaintiff, Melissa Ormond (“Ormond”), who states that Plaintiff was harmed by
Defendant’s use of the CAD Drawings “because such use, when coupled with
[Defendant’s] other wrongful conduct enabled [Defendant] to take the goodwill
of Rock on the Range and Carolina Rebellion in the form of [Defendant’s]
rebranded festivals. The value of
[Plaintiff’s] 50% interest in Rock on the Range and Carolina Rebellion was at
least the price that [Plaintiff] offered to pay to [Defendant] to buy them out
of such festivals….” (Ormond Decl., ¶
38.)
As to the second point, Plaintiff references
Civil Code section 3360, which provides that “[w]hen a breach of duty has
caused no appreciable detriment to the party affected, he may yet recover
nominal damages.” Plaintiff has not
identified cases establishing that this applies to breach of fiduciary duty
causes of action, instead citing cases establishing that nominal damages may be
recovered for breach of contract actions.
(Midland Pacific Building Corp. v. King (2007) 157 Cal.App.4th
264, 275 [nominal damages are available on a claim for breach of contract]; Elation
Systems, Inc. v. Fern Bride LLC (2021) 71 Cal.App.5th 958, 965 [section
3360 provides for the recovery of nominal damages for the breach of a
contract].)
The court finds that Plaintiff’s
reliance on Civil Code section 3360 is insufficient to establish its ability to
recover nominal damages, because Plaintiff has not cited any authority
indicating that nominal damages may be recovered on a claim for breach of
fiduciary duty, instead citing cases establishing the availability of this
remedy as to a cause of action for breach of contract. However, the court finds that the declaration
of Ormond is sufficient to establish that Plaintiff can prove that it was
damaged by Defendant’s use of the CAD Drawings by the taking of the
partnerships’ goodwill and their related values.
The court therefore finds that
Plaintiff has met its burden of proving a prima facie case as to its first and
fourteenth breach of fiduciary duty causes of action. (Code Civ. Proc., § 425.16, subd. (b)(1); Park,
supra, 2 Cal.5th at p. 1061.)
However, “[e]ven if a plaintiff makes a
prima facie evidentiary showing in support of his or her claims based on
protected activities, the claims may still be stricken if the defendant can
establish a complete affirmative defense to the claims. [Citation.]
In order to demonstrate a probability of prevailing on the merits of the
claims, the plaintiff must present evidence that, if credited, is sufficient to
overcome the defendant’s affirmative defense. [Citation.]” (Dwight
R. v. Christy B. (2013) 212 Cal.App.4th 697, 715-716.) When evaluating an affirmative defense in
connection with the second prong on an anti-SLAPP motion, “the court, following
the summary-judgment-like rubric, generally should consider whether the
defendant’s evidence in support of an affirmative defense is sufficient, and if
so, whether the plaintiff has introduced contrary evidence, which, if accepted,
would negate the defense.” (Bently
Reserve LP v. Papaliolios (2013) 218 Cal.App.4th 418, 434.)
In addition to arguing that Plaintiff
cannot establish the elements of its breach of fiduciary duty claim, Defendant
further contends that Plaintiff cannot demonstrate a probability of prevailing
on the merits because Plaintiff’s claims are barred by (1) statutory privilege
and (2) Defendant’s privilege to compete.
The court therefore evaluates whether Defendant
has established a complete affirmative defense to these claims, and whether
Plaintiff has presented evidence sufficient to overcome the affirmative
defense.
First, Defendant contends that Plaintiff’s
claims are barred by the litigation privilege set forth in Civil Code section
47. Under this statute, a privileged
publication is one that is made (1) in any legislative proceeding, (2) in any
judicial proceeding, (3) in any other official proceeding authorized by law, or
(4) in the initiation or course of any other proceeding authorized by law. (Civ. Code, § 47, subd. (b).) “The litigation privilege ‘“exists to protect
citizens from the threat of litigation for communications to government
agencies whose function it is to investigate and remedy wrongdoing. [Citation.]”
[Citation.]’” (Wang v. Heck (2012)
203 Cal.App.4th 677, 684.) “‘“The usual formulation is that the privilege
applies to any communication (1) made in judicial or quasi-judicial
proceedings; (2) by litigants or other participants authorized by law; (3) to
achieve the objects of the litigation; and (4) that [has] some connection or
logical relation to the action.” [Citation.] The privilege “is not
limited to statements made during a trial or other proceedings, but may extend
to steps taken prior thereto, or afterwards.”’” (Falcon v. Long Beach
Genetics, Inc. (2014) 224 Cal.App.4th 1263, 1272.) Judicial or
quasi-judicial proceedings are considered to include “‘all kinds of
truth-seeking proceedings,’ including administrative, legislative and other
official proceedings.” (Ibid.)
The court finds that Defendant has not sufficiently
established the applicability of the defense of the litigation privilege. Defendant does not present evidence or
argument explaining that the communications and related submissions regarding
the CAD Drawings were made in a “truth-seeking” administrative proceeding solely
because the alleged statements were made in the course of securing permits as
required by government entities. Although
Defendant presents evidence indicating that certain materials are required to
be submitted to government entities in order to obtain permits, Defendant has
not cited evidence or authority that establishes that the permitting process is
a truth-seeking proceeding contemplated by Civil Code section 47. (Hayes Decl., ¶ 23 [maps must be
submitted to the City and Fire Department in order to secure a permit in the
City of Columbus]; Ormond Decl., ¶¶ 9-10 [permits are issued by various
governmental entities when required by law]; Ormond Decl., ¶ 33 [CAD
Drawings are submitted for the purpose of satisfying criteria to secure the
issuance of permits authorizing the festival to take place].) The court therefore finds that Defendant’s
evidence in support of this affirmative defense is insufficient. (Bently Reserve LP, supra, 218
Cal.App.4th at p. 434.)
Second, Defendant contends that
Plaintiff’s claims are barred by Defendant’s right to compete, as both
Co-Promotion Agreements contain language that the agreements shall not be
deemed in any way to prohibit or restrict the right or freedom of either party
to conduct business without any obligation or accountability to the
Co-Promotion, even if such business or activity directly competes with the
business of the Co-Promotion. (Hayes
Decl., Ex. A, 2017 Rock on the Range Co-Promotion Agreement, ¶ 1, subd.
(b)(ii); Hayes Decl., Ex. B, 2017 Carolina Rebellion Co-Promotion Agreement,
¶ 4.) The court finds that
Defendant has not sufficiently established the applicability of the defense of
its privilege to compete. Although the
parties agreed that they are contractually permitted to conduct business even
if such business competes with the Co-Promotions, the Co-Promotion Agreements
do not permit Defendant to improperly use confidential materials or otherwise
compete with Plaintiff in an unfair or unlawful manner. The court therefore finds that Defendant’s
evidence in support of this affirmative defense is insufficient. (Bently Reserve LP, supra, 218
Cal.App.4th at p. 434.)
The court therefore finds that Plaintiff
has met its burden to establish that there is a probability that Plaintiff will
prevail on its first and fourteenth causes of action for breach of fiduciary
duty, to the extent that these causes of action are based on the claim that
Defendant utilized the CAD Drawings to secure permits for its festivals. (Code Civ. Proc., § 425.16, subd.
(b)(1).)
2. Sixth Cause of Action for Breach of
Contract (as to Rock on the Range); Eighteenth Cause of Action for Breach of
Contract (as to Carolina Rebellion)
“[T]he elements of a cause of action
for breach of contract are (1) the existence of a contract, (2) plaintiff’s
performance or excuse for nonperformance, (3) defendant’s breach, and (4) the
resulting damages to the plaintiff.” (Oasis
West Realty, LLC, supra, 51 Cal.4th at p. 821.)
Defendant contends that Plaintiff
cannot establish a probability of success on its breach of contract causes of
action because (1) Plaintiff cannot establish the existence of an agreement to
keep the CAD Drawings confidential; (2) Plaintiff cannot establish the breach
of any agreement to keep the CAD Drawings confidential; and (3) Plaintiff
cannot establish any damages resulting from the alleged disclosure of the CAD
Drawings.
The court finds that Plaintiff has met
its burden to establish that its breach of contract causes of action, to the
extent they are based on the claim that Defendant submitted the CAD drawings in
applying for permits with the government, have at least minimal merit. (Park, supra, 2 Cal.5th at p.
1061.)
First, the court finds that Plaintiff has
met its burden of proving that it can establish the first element of the
existence of an agreement to keep the CAD Drawings confidential. As to the 2017 Carolina Rebellion
Co-Promotion Agreement, the confidentiality provision itself defines confidential
and proprietary information to be “information relating to the event.” (Hayes Decl., Ex. B, 2017 Carolina Rebellion
Co-Promotion Agreement, ¶ 10, subd. (a).)
The court finds, for the purposes of this motion, that the CAD Drawings,
which were jointly created by Plaintiff and Defendant and are used to
illustrate the layout of a music festival, fall into this category. (See Ormond Decl., ¶¶ 22, 33.) The Rock on the Range Co-Promotion Agreement,
as noted by the parties, appears to contain a narrower provision; the parties
agreed that the Co-Promotion Agreement “and all information provided or
produced by the Co-Promoters in connection therewith is confidential….” (Hayes Decl., Ex. A, 2017 Rock on the Range
Co-Promotion Agreement, ¶ 7, subd. (e).) The phrase “produced by the Co-Promoters in
connection therewith” may indicate that the CAD Drawings were meant to be
considered confidential information.
Moreover, Plaintiff has introduced the declaration of Ormond, who states
that the CAD Drawings constitute confidential information under the agreements,
which evidences Plaintiff’s intent to hold these materials are
confidential. (Ormond Decl., ¶¶ 1, 23.) The court therefore finds that Plaintiff has
produced evidence sufficient to prove this element.
Second, the court finds that Plaintiff has
met its burden of proving that it can establish the element of breach. Defendant argues in its moving papers that
each of the agreements include an exception for the disclosures of confidential
information when required by law. (Hayes
Decl., Ex. A, 2017 Rock on the Range Co-Promotion Agreement, ¶ 7, subd.
(e); Hayes Decl., Ex. B, 2017 Carolina Rebellion Co-Promotion Agreement,
¶ 10, subd. (a).) Defendant
therefore contends that its use of the CAD Drawings was permitted in order to
comply with the legal requirements set forth in the permitting process. (See Hayes Decl., Ex. K, City of Columbus
2022 Special Event Planning Guide, p. 27 [requiring detailed event site plans
to be submitted with applications].)
Plaintiff argues that “there was no
legal requirement for [Defendant] to disclose CAD Drawings belonging to the
partnerships to secure a permit” for Defendant’s replacement festivals. The court agrees. While the permitting process may have
required the submission of event maps and layouts, the court has not been
presented with any legal authority that required Defendant to use the allegedly
confidential CAD Drawings. The court
also notes that Defendant contends that there “would have been no reason” for
Defendant to use the 2018 CAD Drawings for Carolina Rebellion, which took place
at Charlotte Motor Speedway, in connection with Defendant’s Epicenter Festival,
because the Epicenter Festival took place at a different venue in Rockingham,
North Carolina. (Hayes Decl., ¶ 25
[Defendant “has no reason” to share the CAD drawings for the 2018 Carolina
Rebellion Festival since the 2018 festival took place at Charlotte Motor
Speedway instead of Rockingham].) Plaintiff introduces evidence explaining that,
although Defendant’s 2019 Epicenter Festival took place at the Rockingham
location, Defendant attempted to hold its 2020 Epicenter Festival at Carolina
Rebellion’s previous location in Charlotte Motor Speedway. (Vesey Decl., ¶¶ 3-5.) Thus, Defendant’s argument that it would have
no reason to disclose the CAD Drawings, while perhaps persuasive as to its 2019
festival, does not preclude a finding that Defendant would have reason to disclose
the CAD Drawings in connection with its attempts to hold its 2020 festival at
the location used by Carolina Rebellion in other, past years.
Third, as to damages, Plaintiff contends,
as argued in connection with its breach of fiduciary causes of action, that (1)
Plaintiff was damaged by Defendant’s use of the CAD Drawings, and (2) Plaintiff
may also be entitled to nominal damages for Defendant’s breach of
contract. (Ormond Decl., ¶ 38; Civ.
Code, § 3360; Elation Systems, Inc., supra, 71 Cal.App.5th at pp.
965-966 [“Nominal damages may be properly awarded for the violation of a
contractual right because ‘failure to perform a contractual duty is, in itself,
a legal wrong that is fully distinct from the actual damages’”].) The court finds that this evidence and
argument establishes that Plaintiff may prove the element of damages (including
nominal damages) as to its breach of contract causes of action.
The court therefore finds that
Plaintiff has met its burden of establishing a prima facie case as to its sixth
and eighteenth causes of action for breach of contract. (Code Civ. Proc., § 425.16, subd. (b)(1); Park,
supra, 2 Cal.5th at p. 1061.)
However, as with the breach of
fiduciary duty causes of action, Defendant contends that Plaintiff cannot
produce sufficient evidence to overcome its affirmative defenses of (1) the
litigation privilege and (2) its privilege to compete.
As set forth above, the court finds
that Defendant has not presented the court with sufficient evidence
establishing the applicability of (1) the statutory defense set forth in Civil
Code section 47, and (2) the defense of Defendant’s privilege to compete. (Bently Reserve LP, supra, 218
Cal.App.4th at p. 434.)
The court therefore finds that
Plaintiff has met its burden to establish that there is a probability that
Plaintiff will prevail on its sixth and eighteenth causes of action for breach
of contract, to the extent that these causes of action are based on the claim
that Defendant utilized the CAD Drawings to secure permits for its festivals. (Code Civ. Proc., § 425.16, subd.
(b)(1).)
ORDER
The court denies defendant Danny Wimmer
Presents, LLC’s special motion to strike portions of plaintiff AEG Presents
Productions, LLC’s First Amended and Supplemental Complaint.
The court orders plaintiff AEG Presents Productions, LLC to give notice
of this order.
IT IS SO ORDERED.
DATED:
_____________________________
Robert B. Broadbelt III
Judge of the Superior Court
Superior Court of California
County of Los Angeles – Central District
Department
53
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aeg presents productions, llc, vs. |
Case
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18STCV06655 |
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Hearing
Date: |
August
23, 2022 |
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[Tentative]
Order RE: (1)
demurrer
TO first amended cross-COMPLAINT (2)
motion
to strike portions of first amended cross-complaint |
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MOVING PARTY: Plaintiff and Cross-Defendant AEG
Presents Productions, LLC
RESPONDING PARTY: Defendant and Cross-Complainant Danny
Wimmer Presents, LLC
(1)
Demurrer
to First Amended Cross-Complaint
MOVING PARTY: Plaintiff and Cross-Defendant AEG
Presents Productions, LLC
RESPONDING PARTY: Defendant and Cross-Complainant Danny
Wimmer Presents, LLC
(2)
Motion
to Strike Portions of First Amended Cross-Complaint
The court
considered the moving, opposition, and reply papers filed in connection with the
demurrer and motion to strike.
BACKGROUND
Plaintiff AEG Presents Productions, LLC (“AEG”) filed this action on
November 29, 2018, against defendant Danny Wimmer Presents, LLC (“DWP”). AEG filed its operative First Amended and
Supplemental Complaint on January 11, 2022, against DWP, and alleges 27 causes
of action on behalf of the partnerships Rock on the Range and Carolina
Rebellion.
On May 17, 2021, DWP filed a cross-complaint against AEG. DWP filed its operative First Amended
Cross-Complaint against AEG on May 6, 2022, asserting five causes of action for
(1) intentional interference with contract; (2) intentional interference with
prospective economic advantage; (3) breach of fiduciary duty; (4)
indemnification and reimbursement; and (5) accounting.
AEG moves the court for an order (1) sustaining its demurrer to DWP’s
second, third, fourth, and fifth causes of action without leave to amend, and
(2) striking two allegations and DWP’s prayer for declaratory relief.
The court overrules AEG’s
demurrer to DWP’s second cause of action for intentional interference with
prospective economic advantage because it states facts sufficient to constitute
a cause of action since DWP sufficiently alleges that (1) AEG undertook to act
on behalf of and for DWP, thereby agreeing to act as a fiduciary, and (2) AEG’s
conduct was independently wrongful for breaching the fiduciary duty to maintain
and preserve DWP’s confidential information.
(Code Civ. Proc., § 430.10, subd. (e); FACC, ¶¶ 15, 39.)
The court overrules AEG’s
demurrer to DWP’s third cause of action for breach of fiduciary duty because it
states facts sufficient to constitute a cause of action since DWP alleges the
existence of a fiduciary relationship between AEG and DWP based on the
allegations that (1) AEG agreed to act as a fiduciary and to act on DWP’s
behalf, and (2) to the extent that a factfinder concludes that there existed a
partnership between the parties, that AEG owed DWP a fiduciary duty as its
partner. (Code Civ. Proc., § 430.10,
subd. (e); FACC, ¶¶ 15-16.)
The court overrules AEG’s
demurrer to DWP’s fourth cause of action for indemnification and reimbursement
because it states facts sufficient to constitute a cause of action since
DWP alleges that its promotion of festivals in Ohio and North Carolina
constituted a continuation of partnership business, therefore entitling DWP to
indemnification and reimbursement from AEG through both legal and equitable
means. (Code Civ. Proc., § 430.10, subd.
(e); FACC, ¶¶ 53-54.)
The court sustains AEG’s
demurrer to DWP’s fifth cause of action for an accounting because it fails to
state facts sufficient to constitute a cause of action since DWP fails
to allege “that some balance is due the [cross-complainant, i.e., DWP]” and instead
only generally requests damages from AEG.
(Code Civ. Proc., § 430.10, subd. (e); Teselle v. McLoughlin (2009)
173 Cal.App.4th 156, 179 [“A cause of action for 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”].)
MOTION TO STRIKE
AEG moves to strike (1) the
parenthetical stating “as did AEG’s promotion of several festivals within
relevant markets” in paragraph 53; (2) the language stating that “DWP seeks a
declaration that if a partnership existed between the parties, said partnership
continued through the 2019 festival season” in paragraph 54; and (3) the
request “[f]or declaratory relief regarding the nature, extent and duration of
any partnership, if any, that existed between the parties” in paragraph 2 of its
prayer. AEG moves the court to strike
this language on the ground that DWP exceeded the scope of the court’s April
11, 2022 order granting DWP leave “to correct the decencies in [the second,
third, fourth, and fifth] causes of action.”
(April 11, 2022 Order, p. 4:16-17.)
The court denies AEG’s motion
to strike the parenthetical in paragraph 53 and the additional requests for
declaratory relief in paragraphs 54 and the prayer. The challenged parenthetical appears to have
been alleged beyond the scope of this court’s order granting leave to amend its
fourth cause of action, as the identified defect in the order sustaining AEG’s
demurrer concerned DWP’s allegation that its promotion of festivals constituted
a continuation of partnership business “as alleged by AEG in this lawsuit” when
neither AEG nor DWP, at that time, had alleged that fact. (April 11, 2022 Order, 4:5-11.) Similarly, DWP’s request that the court
provide declarations as to the status of the partnership does not cure the
defects outlined in the court’s order, which consisted of (1) DWP’s failure to
allege a fiduciary duty, and (2) the failure to allege that the promotion of
DWP’s festivals constituted a continuation of the parties’ partnership
businesses.
The court, however, exercises
its discretion to permit DWP to retain those amendments, since (1) the
parenthetical in paragraph 53—although not directly relating to DWP’s
contention that its own continuation of the 2019 festivals constituted a
continuation of the partnership—is related to the defect regarding DWP’s
failure to allege that the partnerships continued through 2019, and (2) the
requests for declaratory relief are related to the determination of the status
of the alleged partnership, both in general and as to whether it continued
through the 2019 festival season.
The court denies AEG’s request
that the court exercise its discretion to dismiss DWP’s requests for
declaratory relief. (Code Civ. Proc., §
1061.)
ORDER
The
court overrules AEG Presents Productions, LLC’s demurrer to the second, third,
and fourth causes of action alleged in Danny Wimmer Presents, LLC’s First
Amended Cross-Complaint.
The court sustains AEG
Presents Productions, LLC’s demurrer to the fifth cause of action for
accounting alleged in Danny Wimmer Presents, LLC’s First Amended
Cross-Complaint.
The court denies AEG Presents
Productions, LLC’s motion to strike.
The court grants Danny Wimmer
Presents, LLC 20 days leave to file a Second Amended Cross-Complaint to amend
its fifth cause of action for accounting to allege that there is some balance
due to DWP from AEG.
The court orders Danny Wimmer
Presents, LLC to give notice of this order.
IT IS SO ORDERED.
DATED:
____________________________
Robert
B. Broadbelt III
Judge
of the Superior Court