Judge: Theresa M. Traber, Case: 22STCV39889, Date: 2023-08-23 Tentative Ruling

Case Number: 22STCV39889    Hearing Date: August 23, 2023    Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE:     August 23, 2023                     TRIAL DATE: NOT SET

CASE:                         Mythical Inc. v. Fenix Games, LLC et al.

CASE NO.:                 22STCV39889           

DEMURRER TO COMPLAINT

MOVING PARTY:               Defendants Fenix Games LLC, Rudy Koch, Matthew Nutt, and Chris Ko

RESPONDING PARTY(S): Plaintiff Mythical Inc.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

            This is a breach of contract and fraud action that was filed on December 22, 2022. Plaintiff alleges that the individual Defendants, while serving as executives for Plaintiff, usurped corporate opportunities from Plaintiff to establish their own independent venture, the LLC Defendant.

Defendants demur to the Complaint in its entirety.

TENTATIVE RULING:

Defendants’ Demurrer to the Complaint is OVERRULED.

DISCUSSION:

Defendants demur to the Complaint in its entirety.

Legal Standard

A demurrer tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) “The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.” (Hahn, supra, 147 Cal.App.4th at p. 747.) The ultimate facts alleged in the complaint must be deemed true, as well as all facts that may be implied or inferred from those expressly alleged. (Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403; see also Shields v. County of San Diego (1984) 155 Cal.App.3d 103, 133 [stating, “[o]n demurrer, pleadings are read liberally and allegations contained therein are assumed to be true”].) “This rule of liberal construction means that the reviewing court draws inferences favorable to the plaintiff, not the defendant.” (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238.)

Meet and Confer

Before filing a demurrer, the demurring party shall meet and confer in person or by telephone with the party who has filed the pleading subject to the demurrer and file a declaration detailing their meet and confer efforts.  (Code Civ. Proc., § 430.41(a).) However, an insufficient meet and confer process is not grounds to overrule or sustain a demurrer.  (Code Civ. Proc., § 430.41(a)(4).)

            The declaration filed by Defendants’ counsel states under penalty of perjury that they met with Plaintiff’s counsel telephonically concerning the basis for this demurrer on February 1, 2023, and were unable to reach an agreement concerning the issues presented here. (Declaration of Kimberly A. Klinsport ISO Demurrer ¶ 3.) Defendants have therefore satisfied their statutory meet and confer obligations.

Request for Judicial Notice

            Defendants request that the Court take judicial notice of a good standing certificate and a certified copy of the formation documents for Fenix Games filed with the Delaware Secretary of State. Defendants’ request is GRANTED pursuant to Evidence Code section 452(c) (official acts.)

Theories of Liability

            Defendants contend that each of the causes of action in the Complaint are deficient because they are premised on the same six theories of liability which Defendants claim are insufficiently pled.

            As Defendants state, each of the causes of action in the Complaint are premised on the allegations that Defendants:

a. us[ed], disclos[ed], or misappropriate[ed] Mythical’s work product, business plans, and confidential and proprietary information both during and after their employment;

b. engag[ed] in fraud, misappropriation, and theft of Mythical’s work product and confidential and proprietary information;

c. usurp[ed] corporate opportunities that belonged to Mythical and diverted company time and resources to do so;

d. fail[ed] to assign to and use for the benefit of Mythical concepts, designs, discoveries, and ideas that were developed during their employment;

e. solicit[ed] employees of Mythical to work for Fenix Games; or

f. fail[ed] to return to Mythical documents and records developed during [the Individual Defendants’] employment.

(Complaint ¶¶ 54, 59, 65, 73, 80, 90, 96, 100-101.)

It is not sufficient merely to claim that allegations in a pleading are generally vague or nonspecific on a demurrer for failure to state facts sufficient to constitute a cause of action. Rather, Defendants’ burden, as moving parties, is to demonstrate that the facts alleged do not support the causes of action as pled.  As Defendants claim that each of the eight causes of action fail because the listed factual allegations are generally insufficient, the Court thinks it appropriate to address these allegations here.

            In their attack on these allegations, Defendants first argue that Plaintiff does not provide any underlying factual allegations that the individual Defendants used, disclosed, or misappropriated any proprietary information.  Essentially, Defendants claim that because Plaintiff does not explain how its business plan could constitute proprietary information, Plaintiff has not alleged facts sufficient to support the first or fourth theories of the case. However, nothing in the language of these allegations requires that Plaintiff establish that its business plan was also proprietary information, and Defendants cite no authority to that effect.

            Defendants also argue that the second theory of the case is circular and insufficient as a matter of law. This is a specious argument. The Complaint does not present this contention as a freestanding claim against Defendants, but rather as a summary of one of several theories of liability which Plaintiff contends is supported by the factual allegations.

            Defendants next claim that the theory that Defendants usurped corporate opportunities belonging to Plaintiff is inadequately pled because, although the Complaint provides extensive factual allegations concerning Defendants’ activities, it does not allege that any investors expressed any interest in Plaintiff’s business. This contention is also unpersuasive. The Complaint alleges that investors in Dubai were interested in the development of blockchain technology, which falls within Plaintiff’s area of operations, and names Cypher Capital as an example of a potential investor. (Complaint ¶¶ 38-39.) Construed in the light most favorable for Plaintiff, as required on demurrer, the Court considers these contentions to allege that investors were interested in Plaintiff. As to Defendants’ contentions that there are no allegations corroborating the claim that the individual defendants diverted resources to Fenix Games from Plaintiff, the Complaint plainly alleges that Defendants, while on company time and airfare, convinced Cypher Capital to invest in Fenix rather than Plaintiff. (Complaint ¶¶ 9, 39-40.)

            Defendants’ final argument with respect to the factual allegations in general is that Plaintiff has alleges no facts showing that Defendants solicited any employees of Mythical to work for Fenix Games. Upon initial review of the Complaint, none of the allegations, on their face, appear to support this contention. However, in opposition, Plaintiff clarifies that the alleged solicitation was done by the various individual Defendants to induce defection by the others.  (Complaint ¶¶ 42-45.) Defendant does not address this argument in reply, and as Plaintiff has stated an interpretation of the facts that supports the contention put forth in the Complaint, the Court finds that the solicitation claim is not vague nor conclusory.

In sum, putting aside the question of whether these allegations are legally sufficient to support any cause of action, they are not so vague or conclusory as to render the Complaint defective on that basis alone.

First Cause of Action: Breach of Contract

            Turning now to the individual causes of action, Defendants demur to the first cause of action for breach of contract on the basis that Plaintiff has failed to state facts sufficient to constitute a cause of action.

            To prevail on a claim for breach of contract, a Plaintiff must plead “(1) the contract, (2) the plaintiff’s performance of the contract or excuse for nonperformance, (3) the defendant’s breach, and (4) the resulting damage to the plaintiff.” (E.g. Richman v. Hartley (2014) 224 Cal. App. 4th 1182, 1186.)

            Defendants argue that Plaintiff has not adequately pled an enforceable contract, because the Invention Agreements on which this cause of action rests are, according to Defendants, unenforceable non-compete agreements. California Business and Professions Code section 16600 provides that, subject to exceptions not relevant here, “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.” (Bus & Prof. Code § 16600.) Defendants base this argument on two provisions: a non-solicitation provision in the Invention Agreements, and an “Assignment of Inventions” provision.

1.      Non-solicitation Provision

Defendants first argue that the non-solicitation provision in section 6(b) of the Invention Agreements renders the entire Agreement unenforceable as an invalid non-compete agreement.

            Section 6(b) of the Invention Agreements, attached as Exhibit A to the Complaint, provides, as relevant here:

To the fullest extent permissible under the law, during the term of Employee’s relationship with the Company and for a period of eighteen (18) months following the termination of such relationship, Employee shall not (i) solicit, directly or indirectly, employees, consultants or independent contractors of the Company for the purposes of luring them or (ii) solicit business, for himself or for any other person or entity, directly or indirectly, from any client or customer of the Company . . .

(Complaint Exh. A § 6(b) [emphasis added].)

According to Defendants, the existence of the language extending the non-solicitation period beyond the term of employment renders the entire agreement unenforceable as a matter of law. In so claiming, Defendants rely on Genasys Inc. v. Vector Acoustics, LLC, a 2022 federal district court case which, it is contended, invalidated an entire agreement because it contained a term which violated section 16600. (Genasys v. Vector Acoustics, LLC (S.D. Cal. 2022) 2022 U.S. Dist. LEXIS 199682 at *19.) However, the enforceability of a non-solicitation provision was not at issue in that case, only an Assignment of Ideas provision. (Id.) Genasys is thus inapposite for the argument Defendants advance with respect to this provision. Defendants are correct that the post-termination language in this provision is plainly unenforceable under section 16600. However, the allegations in the Complaint are that Defendants engaged in solicitation of Plaintiff’s employees—i.e., each other—during their employment. (See Complaint ¶¶ 42-45.) Defendants cite no authority that a provision that bars solicitation for other business during one’s employment is barred under the statutory provision.  

            Thus, Defendants have not demonstrated that the non-solicitation provision in the Invention Agreements renders them unenforceable in their entirety.

2.      Assignment of Inventions Provision

Defendants also argue that the Agreements are not enforceable because they contain an invalid Assignment of Inventions provision under section 16600.

The Assignment of Inventions provision in the Agreements is set out in section 5(b), and states:

Employee shall, or will promptly make, full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and agrees to assign and hereby does assign to the Company, or its designee, all of Employee’s rights, title, and interest including, without limitation, any right of priority, in and to any and all inventions, original works of authorship, developments, concepts, improvements, designs, discoveries ideas, trademarks or trade secrets, whether or not patentable or registrable under copyright or similar laws, which Employee may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time Employee is retained by the Company (collectively referred to as “Inventions”), except as provided in Section 5(e) below Employee hereby acknowledges that all original works of authorship which are made by Employee (solely or jointly with others) within the scope of and during the period of Employee’s relationship with the Company and which are protectible by copyright are “works made for hire,” as that term is defined in the United States Copyright Act Employee hereby understands and agrees that the decision whether or not to commercialize or market any invention developed by Employee solely or jointly with others is within the Company’s sole discretion and for the Company’s sole benefit and that no royalty will be due to Employee as a result of the Company’s efforts to commercialize or market any such Invention.

(Complaint Exh. A §5(b).)

Defendants again rely on Genasys v. Vector Acoustics, LLC, to argue this provision constitutes an overbroad noncompete provision. As Defendants themselves state, however, ‘In dismissing the plaintiff’s breach of contract claims against the two individual defendants, the court reasoned that the employment agreements at issue were unnecessarily broad and violated Section 16600 because they included “a continuing obligation for one-year post-employment that encompass[ed] all new ideas and concepts relating to the employee’s work’ while employed by plaintiff.” (Demurrer p.10:14-17 quoting Genasys, supra, at *19.) Contrary to Defendants’ interpretation of this provision both in the moving papers and on reply, nothing in the language in the targeted provision imposes any continuing obligation on Defendants after the termination of their employment. Further, Defendants’ interpretation of the Complaint as alleging wrongdoing by Defendants for their post-employment conduct is not well-taken. The plain language of the Complaint alleges that Defendants’ wrongful conduct occurred during their employment, not after it. (Complaint ¶¶ 29-34, 41-50.) Defendants’ various authorities relying on provisions covering post-employment conduct are thus inapposite. (See, e.g., Brown v. TGS Mgmt. Co. (2020) 57 Cal.App.5th 303, 319.)

            Defendants have thus failed to demonstrate that the Assignment of Inventions provision in the Invention Agreements renders them unenforceable in their entirety.

            As this constitutes the primary basis for Defendants’ challenge to the first cause of action, Defendants’ demurrer with respect to this claim is OVERRULED.

Second Cause of Action: Intentional Interference with Contract

            Defendants demur to the second cause of action for Intentional Interference with Contractual Relations on the basis that Plaintiff has failed to state facts constituting a cause of action.

            To plead and prove a claim for intentional interference with contractual relations, a plaintiff must establish (1) a valid contract between the plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage. (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126.)

            Defendants contend that this cause of action, which is alleged against Fenix Games only, fails because Fenix Games did not exist until November 16, 2022, after the Individual Defendants’ resignation. (See RJN Exh. 1.) According to Defendants, a corporate entity may not be held liable for acts by its promoters before it came into existence. This is not an entirely accurate recitation of the law. More properly, a corporate entity may not be held liable for the acts of its promoters before it came into existence unless it adopted those acts after formation. (Abbott v. Limit Mut. Compensation Ins. Co. (1938) 30 Cal.App.2d 157, 163.) Here, as Plaintiff states in opposition, the Complaint alleges precisely this: that the individual Defendants used Plaintiff’s resources to raise capital for their venture, which was then accepted by Fenix Games. (Complaint ¶¶ 42-50.) In reply, Defendants argue that the Complaint fails to allege any tortious acts by the individual Defendants in the first place, a contention which the Court rejects, as stated below with respect to the third cause of action. The Court therefore finds that the second cause of action states facts sufficient to constitute a claim.

            Accordingly, Defendants’ demurrer to the second cause of action for intentional interference with contract is OVERRULED.

Third Cause of Action: Breach of Fiduciary Duty

            Defendants demur to the third cause of action for breach of fiduciary duty.

“The elements of a cause of action for breach of fiduciary duty are: (1) the existence of a fiduciary duty; (2) the breach of that duty; and (3) damage proximately caused by that breach.” (IIG Wireless, Inc. v. Yi (2018), 22 Cal.App.5th 630, 646.) “Employees whose contracts are terminable at will have a right to terminate their employment for the purpose of competing with their employer, and may plan and prepare to create a competitive enterprise prior to their termination, without revealing their plans to their employer, so long as they do so on their own time and with their own resources.” (Id.)

            Defendants contend that this cause of action fails because Plaintiff has not pled any factual allegations showing that the individual Defendants formed or prepared for the formation of Fenix Games while working for Plaintiff. In opposition, Plaintiff contends this is an allegation of usurpation of a corporate opportunity.

            Courts have articulated three different tests to determine the existence of a corporate opportunity: the “fairness” test, the “line of business” test, and the “interest of expectancy” test. (Kelegian v. Mgrdichian (1995) 33 Cal.App.4th 982, 988-89.) However, “[u]nder any test, a corporate opportunity exists when a proposed activity is reasonably incident to the corporation’s present or prospective business and is one in which the corporation has the capacity to engage.” (Id.)

            Defendants assert in reply that Plaintiff has not alleged facts to support the conclusion that a corporate opportunity existed. The Court disagrees. As stated above, the Complaint alleges that Defendants, while on company time and using airfare, convinced Cypher Capital to invest in Fenix rather than Plaintiff. (Complaint ¶¶ 9, 39-40.) Construed in the light most favorable to the nonmoving party, the Court considers this allegation sufficient to plead an opportunity for securing investment in Plaintiff to be used to develop funding and publishing services for blockchain-based games. Defendants have thus failed to demonstrate that the third cause of action is defective in this respect.

            Accordingly, Defendants’ demurrer to the third cause of action for breach of fiduciary duty is OVERRULED.

Fourth Cause of Action: Aiding and Abetting Breach of Fiduciary Duty

            Defendants demur to the fourth cause of action for aiding and abetting a breach of fiduciary duty.

            To allege a claim for aiding and abetting a breach of fiduciary duty, a plaintiff must plead (1) a third party’s breach of fiduciary duties owed to the plaintiff; (2) a defendant’s actual knowledge of that breach of fiduciary duties; (3) substantial assistance or encouragement by a defendant to the third party’s breach; and (4) defendant’s conduct was a substantial factor in causing harm to the plaintiff. (Nasrawi v. Buck Consultants LLC (2014) 231 Cal.App.4th 328, 343.)

            Defendants contend that this cause of action fails because the Complaint does not allege that any third party participated in the alleged scheme by the individual Defendants to breach their fiduciary duties to Plaintiff. Defendants also claim that Fenix Games cannot be liable for aiding and abetting because it can only be liable through the acts of its employees. (See Janken v. G.M Hughes Electronics (1996) 46 Cal.App.4th 55, 78 [addressing “aiding and abetting” as alleged against a corporation in the context of violations of Gov. Code section 12940(g)].)

            In opposition, Plaintiff states that this claim is brought against each of the individual Defendants for aiding and abetting the other individual Defendants’ breach of a fiduciary duty by working together to misappropriate Mythical’s resources for their benefit. (Complaint ¶¶ 41-50, 73.) Thus, Plaintiff argues that the Defendants may be held liable on both theories, analogous to a theory of conspiracy in criminal law. (See People v. Thompson (2010) 49 Cal.4th 79, 118.) Plaintiff also argues that the claim against Fenix is based not on its own conduct but on its adoption of the conduct of the individual Defendants, as with the second cause of action.

            Defendants, in reply, contend that this is a circular argument and assert, without authority, that it is not proper to contend that multiple parties, acting in concert, can be liable both for breach of fiduciary duty and aiding and abetting the other in doing the same. Nothing in the Nasrawi opinion on which Defendants rely supports this contention, only holding that a defendant need not themselves have a fiduciary duty to be liable for aiding and abetting. (Nasrawi, supra, 231 Cal.App.4th at 345.) Defendants do not address Plaintiff’s argument concerning Fenix, and, as the Court found Plaintiff’s argument persuasive with respect to the second cause of action, it likewise does so here. The Court therefore concludes that the Plaintiff has alleged sufficient facts to state this cause of action.

            Accordingly, Defendants’ demurrer to the fourth cause of action for aiding and abetting breach of fiduciary duty is OVERRULED.

Fifth Cause of Action: Fraudulent Concealment

            Defendants demur to the fifth cause of action for fraudulent concealment for failure to state facts sufficient to constitute a cause of action.

“The elements of fraud that will lead to a tort action are: (a) misrepresentation; (b) knowledge of falsity; (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 974.) Every element of the cause of action for fraud must be alleged in the proper manner and the facts constituting the fraud must be alleged with sufficient specificity to allow defendant[s] to understand fully the nature of the charge made. (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.) “This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.” (Ibid.) “[G]eneral and conclusory allegations do not suffice.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

The elements of fraudulent concealment are (1) concealment or suppression of a material fact; (2) by a defendant with a duty to disclose the fact to the plaintiff; (3) intent to defraud the plaintiff by intentionally concealing or suppressing the fact; (4) the plaintiff was unaware of the fact and would not have acted as he or she did if he or she had known of the concealed or suppressed fact; and (5) the plaintiff sustained damage as a result of the concealment or suppression of fact. (Hambridge v. Healthcare Partners Medical Group, Inc. (2015) 238 Cal.App.4th 124, 162.)  

            Defendants contend that the Complaint is defective because it does not allege with specificity any misrepresentations made by Defendants. This contention misconstrues the legal basis for this cause of action. A cursory examination of the Complaint shows, as Defendants themselves note, that Plaintiff alleges Defendants fraudulently concealed information concerning their use of company resources to solicit investments for their own venture and not for Plaintiff. (Complaint ¶¶ 41-43.) Defendants have failed to demonstrate that the fifth cause of action is defective in this respect.

            Accordingly, Defendants’ demurrer to the fifth cause of action is OVERRULED.

Sixth Cause of Action: Intentional Interference with Prospective Economic Advantage

            Defendants demur to the sixth cause of action for intentional interference with prospective economic advantage for failure to state facts sufficient to constitute a cause of action.

To state a claim for intentional interference with prospective economic advantage, a plaintiff must plead (1) an economic relationship between the plaintiff and some third party with the probability of future economic benefit to the plaintiff; (2) defendant’s knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff caused by the acts of the defendant. (Youst v. Longo (1987) 43 Cal.3d 64, 71, fn. 6.)

            Defendants contend that, because Plaintiff does not allege that any investor had any interest in Plaintiff, Plaintiff has not adequately pled an economic relationship with a third party with the probability of future economic benefit. A claim for interference with prospective economic relations lies so long as it was “reasonably probable the prospective economic advantage would have been realized but for defendant’s interference.” (Youst, supra, 43 Cal.3d at 71.) Plaintiff argues, in opposition, that the Complaint alleges that Plaintiff already had a relationship with Cypher Capital through another investor. (Complaint ¶ 39.) Defendants assert, in reply, that the Complaint alleges instead that Defendants were sent to meet Cypher Capital for the first time—a contention that is plainly contradicted by both the Complaint and Plaintiff’s opposition. Construed in the light most favorable to Plaintiff, the Court finds that the Complaint alleges an existing albeit tenuous relationship between Plaintiff and Cypher Capital sufficient to constitute an economic relationship for the purposes of this claim.

            Accordingly, Defendants’ demurrer to the sixth cause of action is OVERRULED.

Seventh Cause of Action: Declaratory and Injunctive Relief

            Defendants demur to the seventh cause of action for declaratory and injunctive relief for failure to state facts sufficient to constitute a cause of action.

            Claims for declaratory and injunctive relief are not freestanding causes of action. (Faunce v. Cate (2013) 222 Cal.App.4th 166, 173.) However, neither are they subject to demurrer for being pled as such. (See Olszewski v. Scripps Health (2003) 30 Cal.4th 798, 807; Bates v. Franchise Tax Bd. (2004) 124 Cal.App.4th 367, 387.)

            Defendants contend that these claims are subject to demurrer because they are not valid causes of action, and because Plaintiff does not allege that a legal remedy is inadequate to support a claim for injunctive relief. Defendants are wrong on both counts. Paragraph 98 of the Complaint expressly alleges that a legal remedy is inadequate. (Complaint ¶ 98.) Defendant’s contention in reply, unsupported by any authority, that this allegation is conclusory and therefore insufficient is not well-taken on demurrer. Further, as stated above, claims for declaratory and injunctive relief are not subject to demurrer for being pled as such. Contrary to Defendants’ contentions on reply, Faunce v. Cate does not supersede the authority offered by Plaintiff merely because it is more recent. As Plaintiff correctly states in opposition, Faunce only stands for the position that such claims fail when they are wholly derivative of other nonviable causes of action. (Faunce, supra, 222 Cal.App.4th at 173.) Indeed, the authority on which the Faunce court relied expressly considered claims for declaratory and injunctive relief as separate causes of action, and only sustained a demurrer on the basis that the underlying claims also failed. (Ochs v. PacifiCare of California (2004) 115 Cal.App.4th 782, 794.) The Court therefore finds that Defendants have not established that the seventh cause of action is defective.

            Accordingly, for the foregoing reasons, Defendants’ demurrer to the seventh cause of action is OVERRULED.

Eighth Cause of Action: Imposition of Constructive Trust

            Defendants demur to the eighth cause of action for imposition of a constructive trust on the basis that this is not a valid cause of action.

            Defendants are correct that a constructive trust is properly considered a remedy, not a cause of action. (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 76.) However, Defendants offer no authority standing for the proposition that this fact alone is sufficient to sustain a demurrer to a claim for imposition of a constructive trust. Stansfield only stands for the position that a demurrer to such a claim lies when elements necessary to establish entitlement to that remedy are not pled. (Id.) Defendants’ numerous authorities cited in reply are likewise inapposite. (See, e.g., PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 140 Cal.App.4th 384, 398.) Defendants have therefore failed to demonstrate that this cause of action is defective as pled.

            Accordingly, Defendants’ demurrer to the eighth cause of action for imposition of a constructive trust is OVERRULED.

CONCLUSION:

Accordingly, Defendants’ Demurrer to the Complaint is OVERRULED.

Moving Parties to give notice.

IT IS SO ORDERED.

Dated: August 23, 2023                                  ___________________________________

                                                                                    Theresa M. Traber

                                                                                    Judge of the Superior Court

            Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.