Judge: Stephen I. Goorvitch, Case: 23STCV22413, Date: 2024-03-07 Tentative Ruling

Case Number: 23STCV22413    Hearing Date: March 7, 2024    Dept: 39

The BSA Formula, LLC v. Earl Robinson

Case No. 23STCV22413

Demurrer and Motion to Strike

Case Management Conference

            The BSA Formula, LLC (“Plaintiff”) filed this action against Earl Robinson (“Defendant”) asserting causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, intentional interference with contractual relations, tortious interference with prospective economic advantage, and unfair competition under Business and Professions Code section 17200.  Plaintiff alleges as follows:

            Plaintiff is a “talent alignment and product development company with a focus on the beauty and cosmetics space.”  (Complaint, ¶ 1.)  Plaintiff retained Defendant as “a consultant to negotiate and secure talent partnerships on behalf of Plaintiff.”  (Ibid.)  However, Defendant “engaged in a series of covert and unauthorized actions that directly contravened Plaintiff’s business interests.”  (Id., ¶ 3.)  Specifically, Defendant “engaged in side deals with potential business partners, diverting valuable opportunities and benefits away from Plaintiff.”  (Ibid.)  Defendant also “interfered with Plaintiff’s operations, causing disruptions to existing partnerships and hindering the advancement of prospective ones.”  (Id., ¶ 4.) 

            Defendant demurs to each cause of action and moves to strike the prayer for punitive damages.  Defendant argues that the parties’ contract states that neither party shall be liable for “indirect, consequential, special, punitive, exemplary, aggravated, economical or other similar damages.”  Defendant argues, therefore, that Plaintiff cannot allege any damages, which is fatal to the claims.  This provision does not include “compensatory damages.”  Plaintiff seeks “compensatory” damages in the prayer for relief.  (Complaint, p. 11.)  Regardless, to the extent there is ambiguity in this provision, the Court cannot resolve that issue on demurrer.  The Court must consider extrinsic evidence, which may only be done on summary judgment or at trial. 

            Defendant moves to strike the prayer for punitive damages associated with the first, second, and fifth causes of action.  Plaintiff does not oppose the motion in this respect.  Therefore, the motion is granted.  Plaintiff may not seek punitive damages with respect to the first, second, and fifth causes of action.

            Defendant also moves to strike Paragraph #63 in connection with the unfair competition claim.  Plaintiff may not seek “damages” with an unfair competition claim.  (See In re Tobacco Cases II (2015) 240 Cal.App.4th 779, 790.)  Because an unfair competition claim is equitable in nature, a plaintiff may seek an injunction or restitution, not “damages.”  (Ibid.)  Moreover, Paragraph #63 seeks compensation for Plaintiff’s “economic harm.”  Rather, Plaintiff is only entitled to seek restitutionary disgorgement.  “[N]onrestitutionary disgorgement of profits is not an available remedy in an individual action under the UCL.”  (Korea Supply v. Lockheed Martin Corporation (2003) 29 Cal.4th 1134, 1144.)  Rather, a plaintiff may seek only restitutionary disgorgement.  (Ibid.) 

CONCLUSION AND ORDER

            Based upon the foregoing, the Court orders as follows:

            1.         The demurrer is overruled.

            2.         The motion to strike is granted.  The Court strikes the prayer for punitive damages associated with the first, second, and fifth causes of action, as well as the related allegations.  The Court strikes Paragraph #63.

            3.         Plaintiff may file an amended complaint within twenty (20) days.

            4.         The Court sets the following dates:

                        Final Status Conference:        September 12, 2025, at 9:30 a.m.

                        Trial:                                       September 23, 2025, at 9:00 a.m.   

The parties shall comply with all pretrial procedures for Department #39.  Jury fees shall be posted within ten (10) days or the parties shall waive jury.

            5.         Defendant shall provide notice and file proof of such with the Court.