Judge Thomas Falls, Case 20PSCV00692 2022-08-03 Tentative Ruling

(1) Defendant Best Living Int’l Inc’s Demurrer to Plaintiff’s First Amended Complaint

(3) Defendant Wenjie Kuang’s Demurrer to Plaintiff’s First Amended Complaint

(4) Defendants’ Motion to Strike Portions of Plaintiff’s First Amended Complaint

Responding Party (to all Demurrers and Motion to Strike): Plaintiff, Giggs Lei

(1) Defendant Best Living Int’l Inc’s Demurrer to Plaintiff’s First Amended Complaint is SUSTAINED in part and OVERRULED in part.

(2) Defendant Jian Zhang’s Demurrer to Plaintiff’s First Amended Complaint is SUSTAINED in part and OVERRULED in part.

(3) Defendant Wenjie Kuang’s Demurrer to Plaintiff’s First Amended Complaint is SUSTAINED in part and OVERRULED in part.

(4) Defendants’ Motion to Strike Portions of Plaintiff’s First Amended Complaint is GRANTED in part and DENIED in part.

This case arises from partnership disagreements. Plaintiff Giggs Liang Lei (“Plaintiff”) alleges that Defendant Wenjie Kuang aka Garry Kuang (‘Defendant Kuang”) reached out to Plaintiff in the hopes of doing business together. Defendant Kuang and his friend, Defendant Zhang, sought to become business partners with Plaintiff and asked Plaintiff to help them develop a U.S. market for the goods (furniture manufactured in China). The parties reached an oral agreement that Plaintiff would be given 20% ownership of the Company and each Defendant would be given 40% ownership, although “Plaintiff was not told the exact percentage of ownership held by Defendants Zhang and Kuang, respectively.” (FAC P12.)[1] After months of negotiations, on January 1, 2017, the Parties entered into a Sales Partnership Agreement ("Agreement"). Defendants Kuang and Zhang signed the agreement on behalf of Best Living. Even though the Agreement states the Company’s earnings are calculated each calendar year, during the time relevant to this action, for more than two and a half years, “Plaintiff never had access to the Company’s annual earnings calculations; Plaintiff did not receive any dividends corresponding to this 20% interest in the Company.” (FAC P18.) In April 2019, however, Plaintiff was given $20,000 ($10,000 distribution for years of 2017 and 2018).

In or around March 2019, Defendant Kuang told Plaintiff he would no longer oversee the business as he wanted to endeavor into the marijuana business.

In 2019, Defendants had a potential buyer for the Company and Plaintiff told Defendants he would purchase the Company for the same price.

However, Defendants sold the Company to somebody else. Post-sale, Plaintiff was paid $29,960 ($20,000 for his share and $10,000 for the 2019 distribution). (FAC P22.) Later, Plaintiff noticed on the Secretary of State website that Defendant Zhang was still CEO, Secretary, CFO, and Director of the Company. (FAC P23.) Based on said information, Plaintiff claims that the company was not sold at all and that the Defendants still owned the company and that “selling the company was an excuse for the Defendants to kick the Plaintiff out of the company and make him lose his ownership in the company.” (Complaint ¶9.)

On November 19, 2020, Plaintiff filed suit against Defendants Best Living Intl Inc. (“Defendant Best Living”), Wenjie Kuang aka Garry Kuang, Jian Zhang, and Does 1 through 20 for:

On November 18, 2021, Defendants Jian Zhang and Wenjie Kuang filed a motion for Judgment on the Pleadings.[2]

On January 7, 2022, the court granted Defendants’ Jian Zhang’s and Wenjie Kuang’s Motion for Judgment on the Pleadings with leave to amend.[3]

On January 25, 2022, Plaintiff filed a First Amended Complaint realleging the same causes of action against the same Defendants.

On February 8, 2022, Plaintiff filed the instant Motion to Compel Defendant Best Living Intl Inc for Further Responses to Plaintiff’s First Set Request for Production of Documents and Request for Monetary Sanctions (“Motion to Compel”).

On March 29, 2022, Defendant Best Living Intl, Inc. filed its Opposition to the Motion to Compel.

On February 22, 2022, each Defendant filed separate Demurrers with a Motion to Strike.

On March 14, 2022, Plaintiff filed separate Oppositions to each Demurrer w/Motion to Strike.

A demurrer for sufficiency 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. 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. (CCP §§ 430.30, 430.70.) At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) A “demurrer does not, however, admit contentions, deductions or conclusions of fact or law alleged in the pleading, or the construction of instruments pleaded, or facts impossible in law.” (S. Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732 [internal citations omitted].)

At the outset, the court finds it uncertain as to the causes of action Defendant is demurring to. Its Notice states that it is demurring as all causes of action, as does the ‘Introduction’ in the Demurrer. (Demurrer p. 2). However, the Demurrer also states that “Best Living is named as a party to the first, second, and sixth causes of action, and is filing this demurrer as to the fraud and unjust enrichment” causes of action. (Demurrer p. 3.) What adds to the confusion is that the ‘Argument’ section of the Demurrer provides an analysis as to the second cause of action for fraud; third cause of action for breach of fiduciary duty; fourth cause of action for civil conspiracy; fifth cause of action for constructive fraud; and sixth cause of action for unjust enrichment; not the first cause of action. Effectively, the court will only consider the causes of action to which Defendant Best Living has provided a substantive analysis (second, third, fourth and sixth causes of action). [4]

Lastly, the court notes that allegations remain similar from the original complaint and the first amended complaint.

The elements of fraud are: “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Charnay v. Cobert (2006) 145 Cal.App.4th 170, 184.) In California, fraud must be pled with specificity. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) “The particularity demands that a plaintiff plead facts which show how, when, where, to whom, and by what means the representations were tendered.” (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.)

Here, Defendant Best Living argues that Plaintiff’s allegations fail to meet the threshold of particularity and specificity and fail to directly address how Defendant Best Living is alleged to have engaged in fraudulent activity.

For reasons the court also noted previously in its order on the motion for judgment on the pleadings, the court agrees that Plaintiff fails to state facts sufficient to state a cause of action against Defendant Best Living.[5]

Therefore, the court SUSTAINS Defendant’s Demurrer as to the Second Cause of Action for Fraud.

The elements for a breach of fiduciary duty cause of action are “the existence of a fiduciary relationship, its breach, and damage proximately caused by that breach.” (Thomson v. Canyon (2011) 198 Cal.App.4th 594, 604.) “‘[B]efore a person can be charged with a fiduciary obligation, he must either 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.’” (Hasso v. Hapke (2014) 227 Cal.App.4th 107, 140 (quoting Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 221).) “A fiduciary duty under common law may arise ‘when one person enters into a confidential relationship with another.’” (Id.)

Here, the FAC does not specifically identify how Defendant Best Living owed Plaintiff a fiduciary duty. This is not to say that Defendants Zhang and Kuang did not owe Plaintiff a fiduciary duty. After all, officers of a corporation owe fiduciary duties to the corporation and its stockholders. (See Bancroft-Whitney Co. v. Glen (1966) 64 Cal.2d 327, 345). Moreover, in the employment context, “an officer who participates in management of the corporation, exercising some discretionary authority, is a fiduciary of the corporation as a matter of law.” (GAB Business Services, Inc. v. Lindsey & Newsom Claim Services, Inc. (2000) 83 Cal.App.4th 409, 420-21, disapproved on other grounds by Reeves v. Hanlon (2004) 33 Cal.4th 1140.) Lastly, majority shareholders—as was Defendant Zhang (FAC P12)—owe fiduciary duties to minority shareholders to use their ability to control a corporation in fair, just, and equitable manner. (See Jara v. Supreme Meats, Inc. (2004) 121 Cal.App.4th 1238, 1253; Jones v. H.F. Ahmanson & Co. (1969) 1 Cal.3d 93, 108-112.)

Therefore, as this cause of action is also directed at the corporation, the court SUSTAINS the demurrer as to the third cause of action for breach of fiduciary duty.

While unjust enrichment is not a cause of action, courts have stated that unjust enrichment is synonymous with restitution and allowed recovery where the plaintiff asserts a proper basis for recovering restitution. (Durrell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1370; McBride v. Boughton (2004) 123 Cal.App.4th 379, 387-88.) Such bases include quasi-contract, fraud, duress, conversion, or similar conduct.

The sixth cause of action fails to makes specific allegations as to the corporate defendant. The only allegation, which is conclusory, that the FAC makes is that because of Plaintiff’s “hard-work, the company’s business developed steadily.” (FAC ¶16.) And, as Defendant Best Living notes, the FAC “relies on conclusory statements, without any further facts to substantiate that Best Living unjustly retained interests or benefits from Plaintiff. Specifically, Plaintiff provides no allegations that Plaintiff’s time and energy spent working for Best Living was an unjustly retained benefit or interest.” (Demurrer p. 9.)

Therefore, the court SUSTAINS the demurrer as to the sixth cause of action for unjust enrichment.

Based on the foregoing, the court sustains the entirety of Best Living’s demurrer. To the extent Plaintiff sought to save the complaint, the opposition was a recitation of the pleadings, focused on the individual defendants rather than the demurring corporate defendant, and made conclusory statements unsupported by facts. While the court finds sustaining the demurrers without leave to amend is appropriate as the court previously allowed for leave to amend—to which Plaintiff’s renewed complaint failed to offer factually supported causes of action leaving the court to presume that plaintiff can not “prove there is a reasonable possibility that any defects in the pleading can be cured by amendment” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318), the court will hear from Plaintiff as to whether leave to amend should be granted.

At the outset, the court notes that much of Defendants’ demur is merely stating that Plaintiff provides “mere conclusions” to support the causes of action and on the same token, much if not most of Plaintiff’s opposition merely recites allegations in the complaint absent an analysis.

Second, while the individual Defendants filed separate Demurrers, the arguments are similar as is the opposition, warranting a consolidated ruling.

“The standard elements of a claim for breach of contract are: ‘(1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff therefrom.’” (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178.)

Defendant Zhang demurs on the grounds that the Sale and Partnership Agreement (attached as Exhibit B to the Complaint) indicates that it is between Plaintiff and Best Living International, Inc. Therefore, to the extent that Plaintiff is seeking to hold Defendant Zhang liable for breach of contract because he is a corporate agent and/or employee, the law is well settled that directors and officers are not personally liable on contracts signed by them for and on behalf of the corporation unless they purport to bind themselves individually.” (Demurrer p. 7; see also United States Liab. Ins. Co. v. Haidinger-Hayes, Inc. (1970) 1 Cal. 3d 586, 594-595.) And here, the FAC concedes in paragraph 41 that the individual Defendants signed the Agreement on behalf of the corporation. Moreover, that while corporate officers may be held personally liable for tortious conduct, this is a contract dispute, not a tort.

As to the latter point, the court agrees with Defendant that it was acting on behalf of the corporation.

First, Plaintiff argues Defendant Zhang’s argument is misplaced because the contract between the individual Defendants and Plaintiffs was formed before the formation of the corporation. (Opp. p. 9 [“What Defendants have failed to see is the Agreement was formed orally before the formation of BLI.”].) However, Plaintiff’s concession undermines its own argument: discussions between Plaintiff and Defendant Zhang were mere negotiation. It is a fundamental tenet of contract law that mere participation in negotiations does not result in a binding obligation. (Samuel Williston & Richard A. Lord, A Treatise on the Law of Contracts § 3:2 (4th ed. 2007).)

Second, Plaintiff argues that agents of corporations may be held liable for breach of contract if there is a “showing of unity or interest of ownership and there is evidence of misconduct of an injustice flowing from recognition of this shield.” (Opp. pp. 11-13.) Plaintiff cites to Sonora Diamond Corp. v. Superior Ct. (2000) 83 Cal.App.4th 523 in support of this principle.

Sonora provides that “[i]n California, two conditions must be met before the alter ego doctrine will be invoked. First, there must be such a unity of interest and ownership between the corporation and its equitable owner that the separate personalities of the corporation and the shareholder do not in reality exist. Second, there must be an inequitable result if the acts in question are treated as those of the corporation alone.” (Sonora Diamond Corp., supra, 83 Cal.App. 4th at 538.)

“The essence of the alter ego doctrine is not that the individual shareholder becomes the corporation, but that the individual shareholder is liable for the actions of the corporation.” (Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 300.)

“The first requirement for disregarding the corporate entity under the alter ego doctrine—whether there is sufficient unity of interest and ownership that the separate personalities of the individual and the corporation no longer exist—encompasses a series of factors. Among the many factors to be considered in applying the doctrine are one individual's ownership of all stock in a corporation; use of the same office or business location; commingling of funds and other assets of the individual and the corporation; an individual holding out that he is personally liable for debts of the corporation; identical directors and officers; failure to maintain minutes or adequate corporate records; disregard of corporate formalities; absence of corporate assets and inadequate capitalization; and the use of a corporation as a mere shell, instrumentality or conduit for the business of an individual. (Zoran Corp. v. Chen (2010) 185 Cal.App.4th 799, 811–812.) This list of factors is not exhaustive, and these enumerated factors may be considered with others under the particular circumstances of each case. “‘No single factor is determinative, and instead a court must examine all the circumstances to determine whether to apply the doctrine.’ ” (Misik v. D’Arco (2011) 197 Cal.App.4th 1065, 1074.)

Plaintiff explains that even though Best Living may be a corporation (per its filing of the Articles of Incorporation with the Secretary of State deeming it a general stock corporation), the individual Defendants exhibited a complete lack of corporate formalities. (Opp. p. 12.) For example, Defendants failed to:

Here, based on Plaintiff’s allegations, Defendants failed to engage in the most basic functions of a corporation, substantiating Plaintiff’s claim that “all of the evidence shows that BLI is a simple partnership.” (Opp. p. 12.) Additionally, Plaintiff argues that to argue that the sole reason for the formation of Best Living Inc. was to use it as a “mere shell or conduit to protect the personnel assets of Zhang an Kuang.” (Opp. p. 13.) More specifically, Plaintiff argues that “not only does Zhang profit personally from the joint venture, but Zhang is also the owner of the furniture company in China who is the main supplier of inventory for BLI.” (Opp. p. 13.) The court is persuaded that this allegation further substantiates Plaintiff’s claim that BLI is a mere shell for the personal benefits of Defendant Zhang, Kuang, and Zhang’s furniture company in China.

As such, the instant allegations exceed a mere allegation that a person owns all of the corporate stock and makes all of the management decisions, which are generally insufficient pleadings to cause the court to disregard the corporate entity. (Meadows v. Emett & Chandler (1950) 99 Cal.App.2d 496.)

Therefore, the court finds that Plaintiff alleges sufficient facts to show a unity of interest and ownership.

As to the second factor, court is to make a finding that the facts are such that adherence to the fiction of the separate existence of the corporation would sanction a fraud or promote injustice. (Wood v. Elling Corp. (1977) 20 Cal.3d 353, 365, fn. 9.) The test for this requirement is that if the acts are treated as those of the corporation alone, it will produce an unjust or inequitable result. (Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 300.)” (Misik v. D’Arco, supra, 197 Cal.App.4th at p. 1074.)

Plaintiff argues that it may not able to satisfy any judgment received if Defendants are extinguished as parties to the complaint. (Opp. 14.) For purposes of the demurrer, the court finds Plaintiff has adequately pled that it would be an injustice for Defendants to hold the equity to which Plaintiff is seemingly entitled to. (Opp. p. 14.)

Therefore, the court OVERRULES the Demurrer as to the first cause of action for breach of contract (which refers to the Agreement).

In the ruling on the Motion for Judgment on the Pleadings, the court stated that Plaintiff provides conclusory allegations which are insufficient to plead fraud. Plaintiff has somewhat cured said deficiencies. Stating that Defendants “made representations that they knew were false” (FAC ¶¶36, 37, 39, 40) are conclusory. That said, Plaintiff’s reliance on Defendants’ representations that they sold the Company to “a certain Mr. Wang at the price of $60,000” (FAC ¶38) when in fact the Secretary of State’s website showed no such change is highly suspicious. That said, the court the allegations are still not specific with requirements showing “how, when, where, to whom, and by what means the representations were tendered.” (Cansino v. Bank of America, supra, at 1469.)

Therefore, the demurrer as to the second cause of action for fraud is SUSTAINED with leave to amend.[6]

Defendant argues that Plaintiff does not provide facts but mere conclusions to support this cause of action. (Demurrer p. 10.) The court is not persuaded by this argument. It would have been conclusory for Plaintiff to state that Defendants breached their fiduciary duty. That, however, Plaintiff did not do. Rather, Plaintiff supported the conclusion by presenting facts, facts that Defendants “denied Plaintiff’s right to vote in the shareholder’s meetings and his access to the Company’s financial records, and deprive him of his right to the dividends he was entitled to.” (FAC ¶51.) Accordingly, as officers of the corporation, the individual Defendants owed a fiduciary duty to the corporation and Plaintiff, a minority shareholder. (See Bancroft-Whitney Co. v. Glen (1966) 64 Cal.2d 327, 345). Moreover, Defendant Zhang as a majority shareholders (FAC ¶12), owed a fiduciary duty to Plaintiff, a minority shareholder, by using his ability to control a corporation in fair, just, and equitable manner. (See Jara v. Supreme Meats, Inc. (2004) 121 Cal.App.4th 1238, 1253; Jones v. H.F. Ahmanson & Co. (1969) 1 Cal.3d 93, 108-112.) But here, as Plaintiff argues, the company was deceptively sold, depriving Plaintiff of his ownership interest in the company. (FAC ¶51.)

“The elements of a civil conspiracy are the formation and operation of the conspiracy and damage resulting to plaintiff from an act done in furtherance of the common design.” (Stueve Bros. Farms, LLC v. Berger Kahn (2013) 222 Cal.App.4th 303, 323.) ¿ In making allegations of conspiracy, bare legal conclusions, inferences, generalities, presumptions, and conclusions are insufficient. ¿(State of California ex rel. Metz v. CCC Information Services, Inc. (2007) 149 Cal. App. 4th 402, 419 [finding that allegations that defendants conspired to conceal improper loss valuations was insufficient].) ¿There must be allegations that the purported conspirators had actual knowledge of the planned tort and had the intent to aid in the commission of the tort. (Kidron v. Movie Acquisition Corp. (1995) 40 Cal.App.4th 1571, 1580.)

Here, Plaintiff’s allegation that Defendants “were part of a conspiracy to commit fraud” is conclusory. (FAC ¶55.) Plaintiff’s opposition provides no analysis as it merely recites paragraphs from the complaint.

Therefore, the demurrer as to fourth cause of action is SUSTAINED with leave to amend.

The elements of a cause of action for constructive fraud are: (1) a fiduciary, confidential or special relationship; (2) breach (e.g., nondisclosure); (3) intent to deceive (but see Civ. Code § 1573 (intent not required)); (4) reliance; (5) causation; and (6) damages. (Stokes v. Henson (1990) 217 Cal.App.3d 187, 197.) Constructive fraud is a unique species of fraud applicable only to a fiduciary or confidential relationship. (Michel v. Moore & Associates, Inc. (2007) 156 Cal.App.4th 756, 763.) “Constructive fraud ‘arises on a breach of duty by one in a confidential or fiduciary relationship to another which induces justifiable reliance by the latter to his prejudice.’ [Citation.] Actual reliance and causation of injury must be shown. [Citation.]” (Tyler v. Children’s Home Society (1994) 29 Cal.App.4th 511, 548, italics omitted.)

The court SUSTAINS with leave to amend this cause of action as it is unclear whether the “intent to induce reliance” is based upon the sale to Mr. Wang (FAC ¶65) or “intent to deceive” Plaintiff in that Defendants would treat him as a co-owner (FAC ¶66) and the opposition does not provide an analysis but rather recites the FAC.

Therefore, the court SUSTAINS WITH LEAVE TO AMEND the fifth cause of action for constructive fraud.

Defendants again demur on the grounds that Plaintiff provides conclusions and not facts. Not so. Plaintiff argues that from 2017 to 2019, Defendants received the benefit of Plaintiff’s work and effort in developing the furniture market for Best Living in the United States. (FAC ¶73). As a result of said efforts, the company performed considerably well.

The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (Code Civ. Proc., § 436(a).) The court may also strike all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Id., § 436(b).) The grounds for a motion to strike are that the pleading has irrelevant, false or improper matter, or has not been drawn or filed in conformity with laws. (Id. § 436.) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Id. § 437.) The allegations of a complaint “must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.) The court “read[s] allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume[s] their truth.” (Clauson v. Sup. Ct. (1998) 67 Cal.App.4th 1253, 1255 (Clauson) (emphasis added).

Defendants move to strike references to (i) punitive damages and (ii) attorney’s fees.

California Civil Code section 3294 authorizes the recovery of punitive damages in non-contract cases where “the defendant has been guilty of oppression, fraud, or malice . . .” (Civ. Code § 3294(a).)

Here, a reading the complaint as a whole reveals some signs of fraudulent conduct, although not sufficiently pled by the FAC.

California Code of Civil Procedure section 1021 provides for attorney’s fees specifically provided by statute or by agreement between the parties. (Code Civ. Proc. § 1021.)

Here, as Defendants note, there is not contractual or statutory basis which would entitle recovery of attorney fees.

Therefore, the GRANTS without leave to amend as to the request for attorney’s fees.

Based on the foregoing, the motion to strike is GRANTED IN PART AND DENIED IN PART.

[1] Plaintiff was not entitled to a base salary and any social security benefit or insurance, instead he would receive 20% ownership. (FAC P15.) Moreover, Plaintiff’s job title was Vice-General Manager of sales, wherein he was responsible for devising and implementing policies and strategies related to personnel; market management; account settlements and marketing in the sales department and others. (FAC P15.)

[2] Moving Defendants are Best Living’s corporate agents and/or employees. Plaintiff’s Complaint does not indicate Plaintiff’s specific title or role in the company other than that Defendants “offered Plaintiff a part time job position . . . and that when Plaintiff transitioned to a full-time position at the current company, his position would be adjusted to General Manager of Sales and he would then be entitled to 28% ownership of the company.” (Complaint ¶7.)

[3] The court did so as Plaintiff’s main qualm seemed to be that he was stripped of his ownership interest by way of Defendants’ purported wrongful conduct, conduct which Plaintiff did not offer sufficient facts to substantiate.

[4] The court notes the confusion may arise as the individual Defendants have also filed separate Demurrers.

[5] As noted in the MJOP ruling and as pertinent again here, “Plaintiff merely concludes that Defendants purportedly fabricated the sale of the company “as an excuse to kick Plaintiff out of the company and lose his ownership” but Plaintiff does not provide the facts as to how Plaintiff reached such a serious allegation.”

[6] Defendant also demurs because “even if Plaintiff had alleged fraud with the requisite specificity, the alleged misrepresentations also concern a potential future stake in the company and statements on how Plaintiff would have acted in the past.” (Demurrer p. 9:8-10.)

Absent citation to any authority or further analysis, the court is uncertain how this does not amount to fraud.