Judge: Upinder S. Kalra, Case: 23STCV26452, Date: 2024-05-21 Tentative Ruling
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Case Number: 23STCV26452 Hearing Date: May 21, 2024 Dept: 51
Tentative Ruling
Judge Upinder S.
Kalra, Department 51
HEARING DATE: May
21, 2024
CASE NAME: Incentax, LLC v. Gratitude Beverly
Hills, LLC et al.
CASE NO.: 23STCV26452
DEFENDANTS’
DEMURRER WITH MOTION TO STRIKE
MOVING PARTY: Defendants Gratitude Beverly Hills, LLC,
(“GBH”); Matthew Egan, (“Egan”); Hola Comida I, LLP (“Hola”), and Love Serve
Remember, LLC, (“Love Serve”), (collectively, “Defendants”)
RESPONDING PARTY(S): Plaintiff
Incentax, LLC (“Plaintiff”)
REQUESTED RELIEF: Sustain demurrer without leave to amend and
strike settlement discussions from the Complaint.
TENTATIVE RULING:
Demurrer is OVERRULED
Motion to Strike is DENIED.
STATEMENT
OF MATERIAL FACTS AND/OR PROCEEDINGS:
On October 30, 2023, Plaintiff Incentax,
LLC commenced this action against Defendants Gratitude Beverly Hills, LLC, (“GBH”); Matthew Egan,
(“Egan”); Hola Comida I, LLP (“Hola”), and Love Serve Remember, LLC, (“Love
Serve”), (collectively, “Defendants”) alleging causes of action for (1) breach
of written contract, (2) breach of the implied covenant of good faith and fair
dealing, (3) goods and services rendered, (4) account stated, (5) open book
account, and (6) quantum meruit. Plaintiff alleges that it entered into a tax
consulting agreement with GBH, which provides for tax consulting services by
Plaintiff to identify and obtain Federal Employee Retention Credits (“ERC”) on
behalf of GBH and its stakeholders, which include Defendant Egan, Hola Comida,
and Lover Serve. (Complaint, ¶14.) Plaintiff alleges that Defendants breached
the agreement by failing to pay Plaintiff in full for services rendered.
(Complaint, ¶19.)
On April 5, 2024, Defendants filed
the instant demurrer and motion to strike portions of the Complaint. Plaintiff
opposes.
LEGAL STANDARD:
Demurrer
A
general demurrer may be taken to a complaint where “[t]he pleading does not
state facts sufficient to constitute a cause of action.” (Code of Civ.
Proc. § 430.10, subd. (e).) A demurrer
for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal. App. 4th
740, 747.) In a demurrer proceeding, the defects must be apparent on the face
of the pleading or by proper judicial notice.
(Code Civ. Proc. section 430.30, subd. (a).) A demurrer tests the
pleadings alone and not the evidence or other extrinsic matters. (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 v. Mirda, supra, 147 Cal.App.4th
740, 747.).
Motion to Strike
Any party, within the time allowed to respond
to a pleading may serve and file a notice of motion to strike a pleading or any
part thereof.¿ (Code Civ. Proc., § 435, subd. (b)(1).)¿ 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, subd. (a).)¿ The court may also strike all or any part
of any pleading not drawn or filed in conformity with California law, a court rule,
or an order of the court.¿ (Code Civ. Proc., § 436, subd. (b).)¿ An immaterial
or irrelevant allegation is one that is not essential to the statement of a
claim or defense; is neither pertinent to nor supported by an otherwise
sufficient claim or defense; or a demand for judgment requesting relief not
supported by the allegations of the complaint.¿ (Code Civ. Proc., 431.10, subd.
(b).)¿ The grounds for moving to strike must appear on the face of the pleading
or by way of judicial notice.¿ (Code Civ. Proc., § 437.)
EVIDENTIARY OBJECTIONS
Defendants’
request evidentiary objections are SUSTAINED. No request for judicial notice
was filed, and thus no exhibits may be considered that are not attached to the
pleading for purposes of the instant motions. The Court also notes that
Plaintiff merely attached the exhibit to the opposition without a declaration
providing foundation for it.
ANALYSIS:
Demurrer
Defendants
demur on the grounds that there are insufficient facts alleged to support
naming non-contracting Defendants in any cause of action asserted in the
Complaint (the gravamen of each which is a contract claim), and because the
Complaint groups all defendants (non-contracting Defendants and GBH) in each
cause of action under the guise of “alter egos” with insufficient allegations,
each cause of action fails as a matter of law.
Here, the as the allegations state, the
contract was entered into between Plaintiff and GBH including its members, partners, and other interested stakeholders.
(Complaint, Exhibit A.) The complaint further alleges that Defendants Egan,
Hola Comida and LSR are stakeholders. (Complaint ¶14.) Even more specifically,
the Complaint alleges the percentage of ownership that stakeholders Hola Comida
and LSR purportedly own (Complaint ¶ 2) and the reason why Defendant Egan is a
stakeholder—he is allegedly the CEO and shareholder of GBH and was the signatory
on behalf of all of the Defendants. (Complaint
¶ 3) Therefore, Plaintiff thereafter grouping all defendants together as Defendants
is not uncertain. Similalry, the alter ego allegations are not conclusory and
insufficient. Thus, the Complaint is sufficiently states facts to allege a
basis for liability against the defendants other than GBH under the subject
contract.
Based on the foregoing,
the demurrer is OVERRULED.
Motion to Strike
Defendants seek to
strike Exhibit B and Paragraph 20 of the complaint contending that the
allegations are irrelevant, facts or improper because the involve settlement negotiations.
As pointed out by Plaintiff, they are being offered for a purpose other than to
show liability. Namely, as a basis to support the prayer for attorney fees.
Plaintiff’s position is well taken. The Motion to Strike is DENIED>
As such, the motion to
strike is MOOT.
CONCLUSION:
For the foregoing reasons, the Court decides the pending
motion as follows:
Demurrer is OVERRULED. Defendants are
ordered to ANSWER only within 20 days notice of this ruling.
Motion to Strike is DENIED.
RESPONDING moving party to
give notice.
IT IS SO ORDERED.
Dated: May 21, 2024 ___________________________________
Upinder
S. Kalra
Judge
of the Superior Court