Judge: Virginia Keeny, Case: 23STCV25433, Date: 2025-03-21 Tentative Ruling

Case Number: 23STCV25433    Hearing Date: March 21, 2025    Dept: 45

WOOLLS PEER DOLLINGER & SCHER V. ATD HOLDINGS, INC., ET AL.

DEMURRER to plaintiff’s FIRST AMENDED complaint

Date of Hearing:        March 21, 2025                     Trial Date:       Sept. 8, 2025  

Department:              45                                            Case No.:        23STCV25433

Moving Party:            Defendants ATD Holdings, Inc. and Ara Tchaghlassian

Responding Party:     Plaintiff Woolls Peer Dollinger & Scher

Meet and Confer:      Jones Decl. ¶¶ 2-3

BACKGROUND

This is an action for recovery of unpaid legal fees. Plaintiff Woolls Peer Dollinger & Scher, a law firm, sued defendants ATD Holdings, Inc. (“ATD”) and Ara Tchaghlassian (“Tchaghlassian”) (together “Defendants”) on October 18, 2023, asserting one claim for breach of contract and a second for quantum meruit. Plaintiff alleges it represented ATD in litigation (the “Underlying Action”) from January to June 2023, and ATD (and Tchaghlassian, as its alter ego) owe Plaintiff more than $50,000 in unpaid fees. Plaintiff filed its operative first amended complaint (“FAC”) on June 3, 2024.

On July 8, 2024, Defendants demurred to the entirety of Plaintiff’s FAC. On March 10, 2025, Plaintiff filed its opposition. On March 14, 2025, Defendants replied.

[Tentative] Ruling

Defendants ATD Holdings, Inc. and Ara Tchaghlassian’s Demurrer to the First Amended Complaint is overruled.

REQUEST FOR JUDICIAL NOTICE

Plaintiff requests judicial notice of certain filings from the Underlying Action. The request is DENIED. The Court may take notice of judicial records, but not the truth of their contents. The existence of these records and the fact of their filing is irrelevant.

DISCUSSION

Defendants demur to the entire complaint on two substantive grounds: first, that Plaintiff’s causes of action fail for misjoinder (Code Civ. Proc., § 430.10(d)) because defendant Tchaghlassian is not individually a party to the Fee Agreement; and second, that Plaintiff’s causes of action fail because he did not provide requisite notice of Defendants’ right to arbitrate the parties’ fee dispute. On the latter point, Defendants contend both that the Court is obligated to dismiss Plaintiff’s complaint for failure to state a claim (id., subd. (e)) and that the Court lacks jurisdiction over Plaintiff’s claims (id., subd. (a)).

            Misjoinder

The defendants are not misjoined. For a demurrer for misjoinder to be sustained, the impropriety must appear on the face of the complaint, and the joinder of the parties itself must impose some prejudice on the objecting defendant. (Cf. Royal Surplus Lines Ins. Co., Inc. v. Ranger Ins. Co. (2002) 100 Cal.App.4th 193, 203-204; see also 5 Witkin, Cal. Proc. 6th Pleading, § 972 (2024) [“the defendant is entitled to a favorable ruling only when he or she can show some prejudice suffered or some interests affected by the misjoinder”].) Neither defendant identifies any such prejudice, nor does any appear on the face of the complaint.

Defendants ostensibly mean to argue that the complaint fails to state a claim against Tchaghlassian because Tchaghlassian is not a party to the underlying contract. Defendants did not notice this ground for demurrer in their moving papers, so it fails at the outset. Regardless, the Court disagrees. Plaintiff alleges relevant facts supporting alter ego liability. (FAC, ¶ 3.) Defendants object that Plaintiff has not pled an inequitable result; the Court disagrees. The Court takes the allegation that ATD cannot satisfy corporate creditors (id., ¶ 3(g)) to mean ATD is unable to satisfy debts to Plaintiff, in part because of its alter-ego relatinoship with Tchaghlassian.

Plaintiff has pled a claim against Tchaghlassian based on an alter ego theory (although it did not need to show as much, since Defendants did not raise that argument properly in its moving papers).

            Notice of Arbitration Rights

As for the notice of arbitration: the Court has jurisdiction, and dismissal is discretionary. (See Law Offices of Dixon R. Howell v. Valley (2005) 129 Cal.App.4th 1076, 1090 [failure to exercise discretion under section 6201(a) reversible error]; Aheroni v. Maxwell (1988) 205 Cal.App.3d 284, 294-295 [no jurisdictional defect for failure to comply with section 6201(a)].) Service of a notice under section 6201 is not an element of the plaintiff’s claim, and thus it is not grounds for demurrer for failure to state a claim in the first instance; it is grounds for a motion to dismiss. Defendants have not noticed such a motion.

The proper procedural vehicle is imperative, as demonstrated by Plaintiff’s opposition. Plaintiff argues the Court should not dismiss because Plaintiff gave notice of Defendants’ right to arbitrate promptly upon discovering the oversight. (Opp., 7:20-8:3.) The Court cannot consider these extraneous facts on demurrer, but they are directly relevant to whether the Court should exercise its discretion to dismiss. Defendants’ must raise their argument by properly noticed motion so the Court may consider all relevant circumstances.

CONCLUSION

The demurrer is overruled.  20 days to answer.