Demurrer Without Motion To Strike

Motion

Cal. Super. - 2nd Dist.November 5, 2018

Electronically FILED by Superior Court of California, County of Los Angeles on 01/25/2019 11:08 AM Sherri R. Carter, Executive Officer/Clerk of Court, by M. Soto,Deputy Clerk ci a of 0s AQ (I ME LI CH No 3 S N nh A W N N O N N N N N N N DN em em em ee k ee k ed je e e d pe d fe d CC 0 S N WN Es W N = D e e a0 S N Nn E W N ee D Barry A. Bradley, Esq., State Bar No. 125353 bbradley@bglawyers.com Dawn Cushman, Esq., State Bar No. 89280 dcushman@bglawyers.com Clay R. Wilkinson, Esq., State Bar No. 269080 cwilkinson@bglawyers.com BRADLEY & GMELICH LLP 700 North Brand Boulevard, 10" Floor Glendale, California 91203-1202 Telephone: (818) 243-5200 Facsimile: (818) 243-5266 Attorneys for Defendants INDIAN PEAK PROPERTIES, LLC; LUCKY’S TWO-WAY RADIOS INC.; and JAMES A. KAY, JR. SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF LOS ANGELES, CENTRAL DISTRICT CITY OF RANCHO PALOS VERDES, Case No. 18STCV03781 Plaintiff, DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO VS. PLAINTIFF’S COMPLAINT; MEMORANDUM OF POINTS & INDIAN PEAK PROPERTIES, LLC, a AUTHORITIES; DECLARATION OF Nevada corporation; LUCKY’S TWO WAY CLAY R. WILKINSON RADIO, a Nevada corporation; JAMES A. KAY, JR., an individual; DOES 1 through 20, Date: September 10, 2019 INCLUSIVE, Time: 8:30 a.m. Dept.: 71 Defendants. Reservation No.: 879247626264 [Assigned for all purposes to Dept. 71, Judge Monica Bachner] Complaint filed: 11/05/2018 Trial Date: None Set TO PLAINTIFF AND TO ITS ATTORNEYS OF RECORD HEREIN: PLEASE TAKE NOTICE that on September 20, 2019 at 8:30 a.m. in Department 71 of the Los Angeles Superior Court, Central District (Stanley Mosk Courthouse), located at 111 N. Hill Street, Los Angeles, CA 90012, Defendants Indian Peak Properties, LLC (“Indian Peak’), Lucky’s 2% Two-Way Radios Inc. (“Lucky’s”) and James A. Kay, Jr. (collectively “Defendants”) will and hereby do demur to Plaintiff City of Rancho Palos Verdes’ (“Plaintiff”) Complaint on the following grounds: 1 DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO PLTF’S COMPLAINT a (S ME LI CH LL P £ A F Y , + SL XX B R A D L E Y O S E E eo LL 9 S N W n 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1. Lucky’s and James A. Kay, Jr.’s Demurrer to All Causes of Action Plaintiff’s Complaint fails to state facts sufficient to support a cause of action against Lucky’s and James A. Kay, Jr. See Code Civ. Proc. § 430.10(e). 2. All Defendants’ Demurrer to Plaintiff’s Fourth Cause of Action for Unfair Competition Plaintiff does not have the legal capacity to sue under Business and Professions Code section 17200. See Code Civ. Proc. § 430.10(b). 3. All Defendants’ Demurrer to Plaintiff’s Fourth Cause of Action for Unfair Competition Plaintiffs Complaint fails to state facts sufficient to support a cause of action against Defendants for violation of Business and Professions Code section 17200 et seq.. See Code Civ. Proc. § 430.10(e). Counsel for the parties met and conferred pursuant to Code of Civil Procedure section 430.41 but no agreement was reached. Defendants base their Demurrer on this Notice, the attached Memorandum of Points and Authorities, the Declaration of Clay Wilkinson and Exhibit thereto, the Request for Judicial Notice and Exhibits thereto, and on such other or further oral or documentary evidence as the Court may request at the hearing on this Demurrer. Dated: January 25, 2019 BRADLEY & GMELICH LLP I Barry A. Bradley Dawn Cushman Clay R. Wilkinson Attorneys for Defendants INDIAN PEAK PROPERTIES, LLC; LUCKY’S TWO-WAY RADIOS INC.; and JAMES A. KAY, JR. 2 DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO PLTEF’S COMPLAINT LL P 2 (I ME LI CH 1 O N Jy B R A D L E Y eo 0 uN Sa U t A W O N N O O N O N O N N N N N N Ee em em je m e m m m je m e d e d 0 ~ N O&O Wn A W N = O Ng S N N A W N = Oo MEMORANDUM OF POINTS AND AUTHORITIES L INTRODUCTION Case in Brief This case is about an alleged public nuisance. Defendant Indian Peak Properties, LLC (“Indian Peak”) owns and operates an antenna array on top of a residence at 26708 Indian Peak Road in Rancho Palos Verdes (the “Property”). Permission to operate the array was the result of hard-fought battles in both state and federal court. In August of 2018, Plaintiff City of Rancho Palos Verdes (“Plaintiff”) summarily revoked the conditional use permit (“CUP”) that authorized Indian Peak’s use of the Property. This suit arises out of Indian Peak’s continued operation of the array allegedly causing a public nuisance. Plaintiff’s Allegations Plaintiff City of Rancho Palos Verdes (“Plaintiff”) attempts to plead various nuisance- based causes of action in its Complaint against Defendants Indian Peak Properties, LLC (“Indian Peak”), Lucky’s Two-Way Radios Inc. (“Lucky’s”) and James A. Kay, Jr. (collectively “Defendants”). However, Plaintiff also attempts to plead a violation of the Unfair Competition Law (“UCL”) against Indian Peak.! There are no specific facts supporting Lucky’s or Mr. Kay’s involvement in the conduct Plaintiff alleges. In fact, it appears that Plaintiff is attempting to avenge itself on Lucky’s and Mr. Kay based on past litigation. Furthermore, there is a short list of persons/entities that have standing to enforce the UCL. Plaintiff is not on that list. Defendants ask this Court to address three narrow questions: (1) whether Plaintiff has pled facts sufficient to state any cause of action against Lucky’s and Mr. Kay; (2) whether Plaintiff has standing to sue any Defendant for violation of the UCL; and (2) whether Plaintiff has pled facts sufficient to state a cause of action for violation of the UCL against any Defendant. 1 nn 1 1 Business & Professions Code section 17200 et seq. 3 DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO PLTF’S COMPLAINT P (I ME LI CH LL - qa ’ B R A D L E Y ¢ eo 0 uO 9 n t A W O N = N O N N N N N N e e em je m e e em e d e l e d 0 I & Ww A W N = S Y N S N R A W D R O II. STATEMENT OF RELEVANT FACTS AND ALLEGATIONS A. Allegations Against Lucky’s And James A. Kay, Jr. Plaintiff pleads the following against Lucky’s and Mr. Kay: B. “[Defendants] are, and at all times mentioned herein were, the record owners and operators of the real property located at 26708 Indian Peak Road, Rancho Palos Verdes [...].” Compl., 2, lines 27-28. “Defendants, and each of them . . . illegally installed and operated commercial antennae in a single-family residential zoning district [...].” Id., J 4, lines 8-10. “Defendants, and each of them . . . are owners of the Property that is used for the installation and operation of the illegal commercial antennae.” Id., § 5, lines 15-17. “Defendants, and each of them . . . installed and operated commercial antennae in violation of the applicable conditional use permit and the RPVMC, [and] have created a nuisance within the City [...].” Id., q 6, lines 18-20. “Defendants, and each of them . . . operated commercial antennae without a conditional use permit approved by the planning commission in violation of the RPVMC, [and] have created a nuisance within the City [...].” Id, § 7, lines 22-24. “Defendants, and each of them . . . are directly responsible for the activities occurring on the Property . . . , [and] are responsible for continued violations of the RPVMC and state law [...].” Id., { 8, lines 26-28. UCL Allegations Plaintiff’s UCL allegations appear at paragraphs 81 through 88 of the Complaint. In essence Plaintiff’s allegations boil down to these: Persons/entities that violate the UCL are subject to injunction. See Compl., q 82. The UCL covers unlawful, unfair, or fraudulent business practices. See id., q 83. Indian Peak is engaged in unfair competition “in that [it is] operating roof-mounted commercial antennae in violation of RPVMC § 17.76.020(A).” Id., q 84. Therefore, Plaintiff is entitled to an injunction against Indian Peak under the UCL. See id., 9 85. 4 DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO PLTF’S COMPLAINT LL P (G ME LI CH | A E N ) ) B r A D L E Y (\ 2 ( eo 0 uN S N U t A W N = N O N N N N N N N N E E Em e m Em em em e d e d e d 0 N S WN A W N = S e g S N N R A W N = CO Ci Ownership Of The Property Indian Peak is the sole record owner of the Property. See Request for Judicial Notice (“RIN”), Ex. 1. Accordingly, Lucky’s and Mr. Kay are not record owners. D. Past Litigation The parties are familiar with each other from past litigation - dating back to 2000 - in which they sued each other in state and federal court. See RIN, Ex. 2 at pages 5-6.> E. Plaintiff’s Population Is Less Than 750,000 According to the April 2010 U.S. Census, Plaintiff’s population was 41,643. See RIN, Ex. 3 at page 1. The last U.S. Census Bureau population estimate was 42,364. Id. F. Meet And Confer [Code Civ. Proc. § 430.41(a)] Counsel for the parties met and conferred via telephone and e-mail regarding this demurrer. Declaration of Clay Wilkinson (“Decl. Wilkinson”), § 3, Ex. A. Unfortunately, counsel could not come to an agreement. Id. III. AUTHORITY TO SUSTAIN DEMURRER Courts treat demurrers as admitting all material facts properly pleaded, giving the complaint “a reasonable interpretation, reading it as a whole and its parts in their context.” Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal. 4th 26, 38. However, as Quelimane implies, plaintiffs must properly plead facts to benefit from their admission. Contentions, deductions, and conclusions of fact or law are not considered. See Blank v. Kirwan (1985) 39 Cal. 3d 311, 318. Because standing goes to the existence of a cause of action, lack of standing may be raised by demurrer or at any time in the proceeding, including at trial or in an appeal. Troyk v. Farmers Group, Inc. (2009) 171 Cal. App. 4th 1305, 1345 Although it is ordinarily an abuse of discretion not to grant leave to amend following the sustention of a demurrer, denial of leave to amend is proper if the facts and nature of a plaintiff’s claim are clear and under the substantive law, no liability exists. See Titus v. Canyon Lake 2 Defendants request judicial notice of the fact of protracted state and federal court litigation between the parties. See Evid. Code §§ 451(f); 452(d), (g), (h). See also Kay v. City of Rancho Palos Verdes (9th Cir. 2007) 504 F.3d 803; Kay v. City of Rancho Palos Verdes (C.D. Cal. 2003), Case No.: CV-02-03922; City of Rancho Palos Verdes v. Kay (2000), Los Angeles Superior Court Case No.: YC037398. 5 DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO PLTF’S COMPLAINT \2 (3 ME LI CH LL P 4 a ) 4 8 BR rA DL EY © 0 uN S N n l Rh W N = N O O N N N N N N N N em em E m e m em em e d e d fe d 0 dN O S Nl A W R W N = E S C N S N R A W ND = CQ Property Owners Assn. (2004) 118 Cal. App. 4th 906, 917. It is the plaintiff's burden to show the trial court how the complaint can be amended to state a cause of action. See Goodman v. Kennedy (1976) 18 Cal. 3d 335, 349. IV. ARGUMENT A. Plaintiff Failed To State A Cause Of Action Against Lucky’s And James A. Kay, Jr. 1. Plaintiff pled insufficient facts to implicate Lucky’s and Mr. Kay in the alleged nuisance-causing conduct As a preliminary matter, each substantive cause of action - as opposed to remedy - Plaintiff alleges is statutory. See Civ. Code § 3490 et seq. (public nuisance); Bus. & Prof. Code § 17200 et seq. (UCL). Because each cause of action is statutory, Plaintiff bears the burden of particularity in pleading. See Lopez v. S. Cal. Rapid Transit Dist. (1985) 40 Cal. 3d 780, 792-93 (“Under the Government Tort Liability Act, all liability is statutory. Hence, the rule that statutory causes of action must be specifically pleaded applies, and every element of the statutory basis for liability must be alleged”).? Plaintiff has not alleged any specific facts as to Lucky’s or Mr. Kay’s involvement in the alleged nuisance or UCL violation. Plaintiff’s Complaint alleges in the most general terms that Lucky’s and Mr. Kay were the “record owners and operators” of the Property. See Compl. { 2-8. There are no allegations as to how Lucky’s and Mr. Kay - as opposed to the actual owner of the Property - participated in any way in the alleged nuisance-causing conduct. Defendants respectfully submit that Plaintiff has not pled with particularity as to Lucky’s and Mr. Kay because Plaintiff has no viable factual basis to support the allegations. 2. Plaintiff pled insufficient facts to pierce the corporate veil Assuming - which Defendants respectfully submit is a fair assumption - that Lucky’s and Mr. Kay played no role in the alleged nuisance-causing conduct, the only basis for liability against them would be veil-piercing. But it has long been the law that piercing the corporate veil is 3 By analogy, the particular pleading requirement for fraud informs this case. Fraud, although traditionally a common law action, has been codified. See Civ. Code §§ 1571-1574. 6 DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO PLTF’S COMPLAINT LL P (G ME LI CH Pa ) #4, @ «VW ) W e ” BR AD LE Y (\ 2 © 0 Nu Sa Un t A W O N = R O N O N R N N N N N N E E e m em em e p em e d e d e d 0 qT OO Un A W N = SO Ce N S N n l R A W N = Oo extremely difficult. Plaintiff pleads no facts in support of veil-piercing. The conditions under which a corporate entity may be disregarded vary from case to case. See Automotriz Del Golfo De Cal. S.A. De C.V. v. Resnick (1957) 47 Cal. 2d 792, 796. The two general requirements are that: (1) there be such unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist; and (2) if the acts are treated as those of the corporation alone, an inequitable result will follow. See Mesler v. Bragg Management Co. (1985) 39 Cal. 3d 290, 300 (quoting Resnick). “The corporate form will be disregarded only in narrowly defined circumstances and only when the ends of justice so require.” Eleanor Licensing LLC v. Classic Recreations LLC (2018) 21 Cal. App. 5th 599, 615 (citation omitted in original). Courts analyze a number of factors to determine whether or not to pierce the corporate veil, including: e Commingling of funds and other assets, failure to segregate funds of the separate entities, and the unauthorized diversion of corporate funds or assets to other than corporate uses. e Treatment by an individual of the assets of the corporation as his/her own. e Failure to obtain authority to issue stock or to subscribe to or issue the same. e Holding out that an individual is personally liable for the debts of the corporation. eo Failure to maintain minutes or adequate corporate records and the confusion of the records of the separate entities. e Identical equitable ownership in the two entities. e Use of the same office or business location and the employment of the same employees or attorneys or both. e Failure to adequately capitalize; the total absence of corporate assets; under- capitalization. e Use of a corporation as a mere shell, instrumentality, or conduit for a single venture or the business of an individual or another corporation. e Concealment and misrepresentation of the identity of the responsible ownership, management, and financial interest, or concealment of personal business activities. 7 DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO PLTF’S COMPLAINT 2 GM EL IC H Li p B r A D L E Y (\ 2 eo 0 uN S N U t A W O N N O N N N N N N N N EE E E e m em e s e e em e d e d 0 I O S U l A W N = E S Y X N S n R A W N R O e Disregard of legal formalities and the failure to maintain arm’s-length relationships among related entities. e Use of the corporation to procure labor, services, or merchandise for another person or entity. e Diversion of assets from a corporation by or to a stockholder or other person or entity, to the detriment of the creditors, or the manipulation of assets and liabilities between entities so as to concentrate the assets in one and the liabilities in the other. e Contracting with another with intent to avoid performance by use of a corporate entity as a shield against personal liability, or the use of a corporation as a subterfuge of illegal transactions. e Formation and use of a corporation to transfer to it the existing liability of another person or entity. See Associated Vendors, Inc. v. Oakland Meat Co. (1962) 210 Cal. App. 2d 825, 840; Leek v. Cooper (2011) 194 Cal. App. 4th 399, 415 (citing Associated Vendors). Plaintiff did not plead any of these factors because no facts exist to support them in this case. 3. Plaintiff named Lucky’s and Mr. Kay as defendants in retaliation for past litigation Just because the demurrer standard obligates the Court to accept as true Plaintiff’s well- pled allegations, it does not obligate the Court to throw out common sense. There can be little doubt that Plaintiffs attempt to make allegations against Lucky’s and Mr. Kay is retaliatory - demonstrating the residual yet continuing animus between Plaintiff on the one hand, and Mr. Kay and his business entities on the other. These parties are old adversaries who spent the better part of a decade litigating against each other. See RIN, Ex. 2. There can be little quibble that Plaintiff’s motivation in naming Lucky’s and Mr. Kay as defendants is to vex, harass, annoy, and oppress. 11 8 DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO PLTEF’S COMPLAINT eo 0 9 O N WU A W O N = (I ME LI CH LL P m 2 2 B jd += \ / = e F J B R A D L E Y ( Q N N N N N N N N N E EE 0 N N U I A W N = o d S N Wn B. Plaintiff Lacks Standing To Enforce The UCL 1. Plaintiff does not appear on the exclusive list of parties who may prosecute a UCL claim Business and Professions Code section 17204 states: Actions for relief pursuant to this chapter shall be prosecuted exclusively in a court of competent jurisdiction by the Attorney General or a district attorney or by a county counsel authorized by agreement with the district attorney in actions involving violation of a county ordinance, or by a city attorney of a city having a population in excess of 750,000, or by a city attorney in a city and county or, with the consent of the district attorney, by a city prosecutor in a city having a full-time city prosecutor in the name of the people of the State of California upon their own complaint or upon the complaint of a board, officer, person, corporation, or association, or by a person who has suffered injury in fact and has lost money or property as a result of the unfair competition. Although the statute is not a model of clear drafting because of the long, semi-punctuated list, Defendants respectfully submit the best reading is that to have standing under Section 17200, you must be one of the following and no one else: (1) The Attorney General; (2) A district attorney; (3) A county counsel authorized by agreement with the district attorney in actions involving the violation of a county ordinance; (4) A city attorney of a city having a population in excess of 750,000; (5) A city attorney in a city and a county (e.g., San Francisco); (6) A city prosecutor in the name of the people of the State of California upon their own complaint or upon the complaint of a board, officer, person, corporation, or association;* or (7) A person who has suffered injury in fact and has lost money or property as a result of the unfair competition. 1 4 The most reasonable interpretation of the terms “board, officer, person, corporation, or association” appears to be that the terms relate to private entities and not public boards, officers, etc. 9 DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO PLTF’S COMPLAINT I 1 1 I P L A X (I ME LI CH 1 4 8 7 W e ” BR AD LE Y (\ 2 © 0 uN a n t A W O N N O N N N N N N N EE Em je m e e e d 0 uN & WN A WwW N = E S O uN S n A W N = O Plaintiff does not fit into any of categories 1 through 6.° Nor does Plaintiff fit into category 7 unless Plaintiff can allege injury in fact as a market participant - which it cannot. Dox Section 17203 does not establish Plaintiff’s right to prosecute UCL claims Based on the meet and confer correspondence, Defendants anticipate that Plaintiff will argue Business and Professions Code section 17203 as its basis for standing. However, Section 17203 merely authorizes: (1) injunction as a remedy for a UCL violation; and (2) representative claims by private parties only if they meet the “standing requirements of Section 17204.” Section 17203 then states: “[BJut these limitations do not apply to claims brought under this chapter by the Attorney General, or any district attorney, county counsel, city attorney, or city prosecutor.” Plaintiff relies on the non-application of standing provision to assert that any city attorney may prosecute a representative UCL claim. Plaintiff’s reliance is misplaced for three reasons. First, Section 17204 expressly provides that the list of parties eligible to prosecute a UCL claim is exclusive. While qualifying city attorneys need not meet the standing requirements of Section 17204, they must still qualify under Section 17204. Plaintiff does not. Second, Section 17204 standing has been interpreted to mean that a plaintiff “must demonstrate some form of economic injury.” Kwikset Corp. v. Superior Court (Benson) (2011) 51 Cal. 4th 310, 323- (also noting that Section 17204 standing is narrower than the concrete injury in fact requirement under Article III of the U.S. Constitution because Section 17204 requires the injury in fact to be economic in nature). Standing is merely shorthand for “injury in fact” - a legal term of art. See id. at 322. All that Section 17203 means is public entities need not suffer injury in fact to prosecute a UCL claim. Section 17203 does not obviate the requirements of Section 17204. I" In 5 With respect to category 4, the U.S. Census Bureau’s latest estimate of Plaintiff’s population is 42,364. The 2010 Census stated a population of 41,643. See RIN, Ex. 3 (also available at https://www.census.gov/quickfacts/fact/table/ranchopalosverdescitycalifornia/PST045217). 10 DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO PLTF’S COMPLAINT a BR AD LE Y (M 2 LP : (I ME LI CH gq - A J © 0 uN S N n t hh W O N = N O O N N N N N N N N EE E E Em m e e e e d 0 uN O O N l A W O N = S S O N S nN R A W N = Third, even if Sections 17203 and 17204 are held to be inconsistent - which they are not - the Court must harmonize the provisions. As the Supreme Court stated in State Dept of Public Health v. Superior Court (Ctr. for Investigative Reporting) (2015) 60 Cal. 4th 940, 955-56: We have recently emphasized the importance of harmonizing potentially inconsistent statutes. “ ‘A court must, where reasonably possible, harmonize statutes, reconcile seeming inconsistencies in them, and construe them to give force and effect to all of their provisions. [...]. This rule applies although one of the statutes involved deals generally with a subject and another relates specifically to particular aspects of the subject.” [...]. Thus, when ‘“two codes are to be construed, they ‘must be regarded as blending into each other and forming a single statute.’ [...]. Accordingly, they ‘must be read together and so construed as to give effect, when possible, to all the provisions thereof.” [...]. Further, ‘[a]ll presumptions are against a repeal by implication.’ [...]. Absent an express declaration of legislative intent, we will find an implied repeal ‘only when there is no rational basis for harmonizing the two potentially conflicting statutes . .., and the statutes are “irreconcilable, clearly repugnant, and so inconsistent that the two cannot have concurrent operation. Sections 17203 and 17204 are consistent. In simple terms, Section 17203 does not require public entities to suffer injury in fact to bring a representative UCL action. However, public entities must still qualify under the exclusive provisions of Section 17204. Plaintiff does not. 5 Plaintiff’s standing is a threshold issue to be determined before reaching the merits of the case Plaintiff’s standing to sue is a threshold issue to be resolved before the matter can be reached on the merits. Troyk v. Farmers Group, Inc. (2009) 171 Cal. App. 4th 1305, 1345. Fora UCL lawsuit to be allowed to continue, standing must exist at all times until judgment is entered and not just on the date the complaint is filed. See id. Because Plaintiff is not on the exclusive list of public entities with the right to prosecute UCL claims, Plaintiff must demonstrate economic injury in fact. There is a three part test for standing under the UCL: (1) an injury to a tangible property interest; (2) the loss of money or property; and that (3) the loss of money or property was caused by the unfair competition. See Troyk, 171 Cal. App. 4th at 1346-48. Plaintiff has not - and 6 In the absence of qualification to bring representative claims under Business and Professions Code section 17204. Ll DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO PLTF’S COMPLAINT LL P \2 G M E L I C H BR AD LE Y OW © 0 uO a n t A W O N N N N N N N N N N = e m E e E e e e e d e d 0 JI O&O WU A W N = S Y uN S n A W N = QO cannot - allege any of the required elements for economic injury in fact under the UCL because Plaintiff is not a market participant. Gi Plaintiff Alleges Insufficient Facts To State A UCL Claim Because UCL actions are statutory, Plaintiff bears the same burden of particularity in pleading the UCL cause of action as it does the public nuisance cause of action. See Lopez, supra, 40 Cal. 3d at 792-93. Here, Plaintiff pleads nothing but generalities. See Compl., 7 81-88. And as argued in Section IV(B)(1)-(3) above, Plaintiff does not even plead the basic elements for standing under the UCL. Plaintiff does not plead specifically because it suffered no injury in the form of a loss of money or property, let alone an injury caused by alleged unfair competition. D. The Court Should Deny Leave To Amend Denial of leave to amend is proper if the facts and nature of a plaintiff’s claim are clear and under the substantive law, no liability exists. See Titus, 118 Cal. App. 4th at 917. It is clear that Plaintiff has no standing to enforce the UCL. While courts grant leave to amend liberally, this is the case for denying leave in the first instance. V. CONCLUSION This case is about an alleged violation of a CUP by a business entity. It is not about competitors in the marketplace. It should not be permitted to devolve into a grudge match between Plaintiff and innocent business entities and individuals. For these and for the foregoing reasons, Defendants respectfully requests that the Court sustain this demurrer without leave to amend. Dated: January 25, 2019 BRADLEY & GMELICH LLP By: (ste le Barry A. Bradley Dawn Cushman Clay R. Wilkinson Attorneys for Defendants INDIAN PEAK PROPERTIES, LLC; LUCKY’S TWO-WAY RADIOS INC.; and JAMES A. KAY, JR. 12 DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO PLTF’S COMPLAINT Br ap LE y (8 2 (G ME LI CH 1p © © N S U t kh W N = R O N R O N O N O N O N N N E e EE e e em em m m pm ® 9a & Oh RA D O R N m e © N S N R A W NN = o DECLARATION OF CLAY WILKINSON I, Clay Wilkinson, declare: 1 I am an attorney licensed to practice before all courts of the State of California. I am an associate at Bradley & Gmelich LLP, attorney of record for Defendants Indian Peak Properties, LLC (“Indian Peak”), Lucky’s Two-Way Radios Inc. (“Lucky’s”), and James A. Kay, Jr. (collectively “Defendants™) in the above-captioned matter. I have personal knowledge of the following facts and circumstances. If called upon to testify to the following facts and circumstances, I could and would do so. As to those matters stated on information and belief, I believe them to be true. pA I make this declaration in support of Defendants” Demurrer to Plaintiff City of Rancho Palos Verdes’ (“Plaintiff”) Complaint. 8 After a voicemail to Plaintiff’s counsel to discuss the best means of meeting and conferring on this demurrer, on December 28, 2018, I sent a meet and confer e-mail to Plaintiff’s counsel. In the interim between respective counsel’s next communication, Plaintiff’s counsel and I spoke over the phone and agreed that e-mail would be the best means of meeting and conferring. Plaintiffs counsel provided Plaintiffs legal positions in opposition to the demurrer on January 8, 2019 via e-mail. I provided my response to Plaintiff’s legal positions on January 15, 2019. Attached hereto as Exhibit A is a true and correct copy of respective counsel’s meet and confer e- mail exchange. Unfortunately, counsel for the parties could not reach an agreement on the merits of the demurrer. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct and that this declaration was executed on January 25, 2019 at Glendale, California. Vd is Clay Wilkinson - Declarant 13 DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO PLTF’S COMPLAINT DECLARATION Page 1 of 6 From : cwilkinson@bglawyers.com To : Ifobi@awattorneys.com Sent : 1/15/2019 8:40AM Subject - RE: City of Rancho Palos Verdes v. Indian Peak Properties, LLC, et al. & Indian Peak gE Properties, LCC v. City of Rancho Palos Verdes et al. (re: CCP 430.41(a) meet and confer) Dear Lum, My meet and confer response is in blue below. |think we're probably going to have to agree to disagree this time. So that we both have the benefit of the intervening weekend, is a mutual extension to 1/21 OK for our respective responses? Sincerely, Clay R. Wilkinson, Esq. Bradley & Gmelich LLP 700 N. Brand Blvd., 10th Floor Glendale, CA 91203 818-243-5200 818-243-5266 Fax cwilkinson@bglawyers.com www.bglawyers.com BRADLEY & GMELICH E-MAIL NOTICE - This transmission may be: (1) subject to the Attorney-Client Privilege, (2) an attorney work product, or (3) strictly confidential. If you are not the intended recipient of this message, you may not disclose, print, copy or disseminate this information. If you have received this in error, please reply and notify the sender (only) and delete the message. Unauthorized interception of this e-mail is a violation of federal criminal law. This communication does not reflect an intention by the sender or the sender's client or principal to conduct a transaction or make any agreement by electronic means. Nothing contained in this message or in any attachment shall satisfy the requirements for a writing, and nothing contained herein shall constitute a contract or electronic signature under the Electronic Signatures in Global and National Commerce Act, any version of the Uniform Electronic Transactions Act or any other statute governing electronic transactions. From: Lum Fobi Sent: Tuesday, January 8, 2019 12:42 PM To: Clay R. Wilkinson Cc: June S. Ailin Subject: RE: City of Rancho Palos Verdes v. Indian Peak Properties, LLC, et al. & Indian Peak Properties, LCC v. City of Rancho Palos Verdes et al. (re: CCP 430.41(a) meet and confer) Dear Clay, It was good to speak with you, and to meet and confer by telephone on 1/4/19, pursuant to Code of Civil Procedure 430.41. As discussed, | am writing to quickly recap and continue our meet and confer discussions. This communication details the issues we touched on on our call in an effort to avoid the need to file demurrers in either action and to coordinate certain procedural strategies for moving forward. EXHIBIT A 14 Page 2 of 6 City of Rancho Palos Verdes v. Indian Peak Properties, LLC, et al.; LASC Case No. 18STCV03781 Lucky’s Two-Way Radios and James A. Kay, Jr. as Proper Parties - as to entire Complaint The City’s complaint names Indian Peak, Lucky's, and Mr. Kay as parties to the above referenced action. You assert that Lucky’s and Mr. Kay are not proper parties to this action because there is no personal involvement. The City is of the position that based on the history of the matters at issue, Lucky’s and Mr. Kay have actual interest in the matters and are personally involved in the actions giving rise to the City’s claims. However, the City is willing to consider your request for dismissal as to Lucky's and Mr. Kay if you can demonstrate that (1) neither Lucky’s nor Mr. Kay are on the title to the subject property, and (2) none of the contracts and/or permits for the contested antennae are in either Lucky’s nor Mr. Kay's name. Honestly, | think that this is just carry over from the long history of litigation between the parties. Public nuisance claims are statutory. Accordingly, Plaintiff bears the burden of particularity in pleading as to the non- owners. See Lopez v. S. Cal. Rapid Transit Dist. (1985) 40 Cal. 3d 780, 792-93 (“Under the Government Tort Liability Act, all liability is statutory. Hence, the rule that statutory causes of action must be specifically pleaded applies, and every element of the statutory basis for liability must be alleged”). No need to recap the veil- piercing issue since we already discussed that, but | will take your offer on the attempt at prove-up. City’s Standing Under Business and Professions Code 17200 et. seq. - as to Fourth Cause of Action The City’s complaint includes a cause of action under B&P 17200 for unlawful business acts or practices. You assert that the City does not have standing under the terms of Section 17204. However, as indicated in the complaint, the City asserts its standing to allege B&P Code 17200 pursuant to Section 17203, which exempts claims brought by a city attorney from the Section 17204 standing requirements. This City will not dismiss the B&P Code 17200 cause of action on these grounds. You are correct to the extent that B&P 17203 permits a city attorney to bring a representative UCL action without the city suffering injury in fact. However, the RPV’s city attorney does not fit into the categories in B&P 17204. The candidates are: (1) city attorney of a city having a population in excess of 750K; (2) a city attorney in a city and county (like San Francisco or Sacramento); or (3) a city prosecutor in a city having a full-time city prosecutor in the name of the people of the State of California. RPV doesn't fit those categories. Unless RPV is a market participant, it doesn’t meet the injury in fact requirement which is the last available avenue for standing. Indian Peak Properties, LLC v. City of Rancho Palos Verdes, et al.; LASC Case No. 18STCP02913 City’s Immunity to Liability for Money or Damages - as to Fourth, Fifth, and Sixth Causes of Action Indian Peak’s complaint includes causes of action for Inverse Condemnation against the City, Intentional Interference with Contractual Relations against the City, Commission, and DOES 1-50, and Intentional Interference with Prospective Economic Relations against the City, Commission, and DOES 1-50, and a prayer for compensatory damages in an amount no less than $1,800,000.00. However, the City, and the Commission, as a department of the City, as well as any City employees that may later be named, hold statutory immunity from liability for money or damages as a public entity and public employees under the doctrine of sovereign immunity, codified in Title I, Division 3.6, Part 2 of the Government Code. (Gov. Code 814 et seq.). Specifically, but not exclusively, Section 818.4 provides that “[a] public entity is not liable for an injury caused by the issuance, denial, suspension or revocation of, or by the failure or refusal to issue, deny, suspend or revoke, any permit, license, certificate, approval, order, or similar authorization where the public entity or an employee of the public entity is authorized by enactment to determine whether or not such authorization should be issued, denied, suspended or revoked.” Section 815 provides “[e]xcept as otherwise provided by statute: (a) A public entity is not liable for an injury, whether such injury arises out of an act or omission of the public entity or a public employee or any other person.” Section 820.4 provides “A public employee is not liable for his act or EXHIBIT A 15 Page 3 of 6 omission, exercising due care, in the execution or enforcement of any law.” In this case, the doctrine of sovereign immunity as it relates to the liability of the City, Commission, or City employees, restricts any alleged right of Indian Peak to obtain money or damages. (See Gov. Code 814). There is no statutory immunity from inverse condemnation. Patrick Media Group, Inc. v. Cal. Coastal Commission (1992) 9 Cal. App. 4th 592, 603-604 (“Neither the Commission nor any other governmental agency is shielded by section 818.4 of the Government Code from an action in inverse condemnation”) (impliedly approved in Hensler v. City of Glendale (1994) 8 Cal. 4th 1, 14). Inverse condemnation liability is an exception to the application of the Tort Claims Act. See Holtz v. Superior Court (S.F. Bay Area Rapid Transit Dist.) (1970) 3 Cal. 3d 296, 303 (“[The] general rule of compensability did not derive from statutory or common law tort doctrine, but instead rested on the construction, ‘as a matter of interpretation and policy’ of our constitutional provision”). But even conduct that amounts to negligence can support inverse condemnation. See, e.g., Barham v. S. Cal. Edison Co. (1999) 74 Cal. App. 4th 744, 755. RPV dealt with an inverse condemnation issue in the fairly recent past where there was no immunity. See Monks v. City of Rancho Palos Verdes (2008) 167 Cal. App. 4th 263, 309 (City resolution imposing moratorium on new construction in landslide area held to effect “a permanent taking of plaintiffs’ properties”). In addition, the City cannot be held liable under common law or judicially created theories of liability. (Guzman v. County of Monterey (2009) 46 Cal.4th 887, 897; see also Gov. Code 815.) The application of general tort principles against public entities was eviscerated by the California Supreme Court in Eastburn v. Regional Fire Protection Authority (2003) 31 Cal.4th 1175, 1179. (de Villers v. County of San Diego (2008) 156 Cal.App.4th 238, 255-56; see also Munoz v. City of Union City (2007) 148 Cal.App.4th 173, 182.) Given the limited and statutory nature of governmental liability Plaintiffs are required to specifically plead their claims against the City. (Brenner v. City of El Cajon (2003) 113 Cal.App.4th 434, 439.) Direct tort liability must be provided by statute and specifically pled by Plaintiffs; “/[o]therwise, the general rule of immunity would be largely eroded by the routine application of general tort principles.” (All Angels Preschool/Daycare v. County of Merced (2011) 197 Cal.App.4th 394, 400; see also Brenner, supra,113 Cal.App.4th at 439.) As such, the City requests dismissal of the fourth, fifth, and sixth causes of action. Should Indian Peak proceed further with the fourth, fifth, and sixth causes of action, the City will demur to such causes of action. Ordinarily, | would agree with you on this point, but not in the inverse condemnation context. For example, the Barham court held that conduct amounting to negligence can support inverse condemnation. By analogy, so should the interference torts. The respective measures of damages support the analogy. For example, inverse condemnation compensates for the owner's loss. See U.S. v. Causby (1946) 328 U.S. 256, 261 (“It is the owner's loss, not the taker's gain, which is the measure of the value of the property taken”). For the interference torts, it is the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not (i.e., the “owner's loss”). See Code Civ. Code 3333. This would include lost profits and harm to business reputation. See Asahi Kasei Pharma Corp. v. Actelion Ltd. (2013) 222 Cal. App. 4th 945, 968-69 (interference with contract); Duff v. Engelberg (1965) 237 Cal. App. 2d 505, 508. Procedure As mentioned, our office has filed the applicable notices of related cases. As discussed, we anticipate separating out the writs to be heard in Dept. 86, and then consolidating the remaining causes of action to run parallel in the civil division, rather than a stay of those proceedings. You mentioned conferring with your team on this strategy. Finally, | am confirming the extension of the deadline for Indian Peak and Lucky’s to response to January 17, 2019, and the corresponding extension to the City’s time to respond to Indian Peak’s complaint. This should line up with the deadline for Mr. Kay's response to the City’s complaint as well. EXHIBIT A 16 Page 4 of 6 I still need more time to discuss this in better detail with my side. | can see the merits of both positions: (1) allowing the litigation to go forward in the non-writ department so that the writ issue is not an impediment to a speedy result; and (2) staying the litigation in the non-writ court to control costs pending a determination of the legality of RPV’s CUP revocation (which would affect the non-writ proceeding). I'll get back to you as soon as possible on this issue. Thank you and | look forward to your response. Lum T. Fobi | Associate Dir: (424)269-3346 | [fobi@awattorneys.com This email and any files transmitted with it may contain privileged or otherwise confidential information. If you are not the intended recipient, or believe that you may have received this communication in error, please advise the sender via email and delete the email you received. From: Clay R. Wilkinson [mailto:cwilkinson@bglawyers.com] Sent: Friday, December 28, 2018 3:53 PM To: Lum Fobi Cc: 'gtucker@awaattorneys.com' Subject: City of Rancho Palos Verdes v. Indian Peak Properties, LLC, et al. (re: CCP 430.41(a) meet and confer) Dear Lum, | just left a voicemail for you and for Mr. Tucker (via Ms. Ortiz). | wanted to touch base regarding two legal issues that | believe are grounds for demurrer as to Defendant's Lucky’s Two-Way Radios, Inc. (Lucky's) and James A. Kay Jr., and another with respect to the B&P 17200 claim against Indian Peak Properties, LLC (“Indian Peak”). As a preliminary matter, while Lucky’s was served on 11/19, my office did not receive the complaint until 12/19 (which is why | sought the extension of time to respond after clarifying with you that Lucky’s was personally served). It is my understanding that Mr. Kay has not been served. If your understanding is different, please let me know. | don’t believe Lucky's and Mr. Kay are proper parties to this action because there is no personal involvement (i.e., Indian Peak is the only proper defendant since it owns and operates the residence at issue). Therefore, the only way Lucky’s and Mr. Kay would be proper parties is if the City is attempting to pierce the corporate veil. The City’s complaint doesn’t state facts sufficient to support veil-piercing and it seems like Lucky's and Mr. Kay were named based on the aftertaste of past litigation between the parties. Courts weigh a number factors when determining to pierce the corporate veil. None are present here: ? Commingling of funds and other assets, failure to segregate funds of the separate entities, and the unauthorized diversion of corporate funds or assets to other than corporate uses. Treatment by an individual of the assets of the corporation as his/her own. Failure to obtain authority to issue stock or to subscribe to or issue the same. Holding out that an individual is personally liable for the debts of the corporation. Failure to maintain minutes or adequate corporate records and the confusion of the records of the separate entities. Identical equitable ownership in the two entities. Use of the same office or business location and the employment of the same employees or attorneys or both. Failure to adequately capitalize; the total absence of corporate assets; under-capitalization. Use of a corporation as a mere shell, instrumentality, or conduit for a single venture or the 0 ND ND ND ~~ ~D ~~ =D EXHIBIT A 17 Page 5 of 6 business of an individual or another corporation. ? Concealment and misrepresentation of the identity of the responsible ownership, management, and financial interest, or concealment of personal business activities. ? Disregard of legal formalities and the failure to maintain arm’s-length relationships among related entities. Use of the corporation to procure labor, services, or merchandise for another person or entity. Diversion of assets from a corporation by or to a stockholder or other person or entity, to the detriment of the creditors, or the manipulation of assets and liabilities between entities so as to concentrate the assets in one and the liabilities in the other. ? Contracting with another with intent to avoid performance by use of a corporate entity as a shield against personal liability, or the use of a corporation as a subterfuge of illegal transactions. ? Formation and use of a corporation to transfer to it the existing liability of another person or entity. See Associated Vendors, Inc. v. Oakland Meat Co. (1962) 210 Cal. App. 2d 825, 840; Leek v. Cooper (2011) 194 Cal. App. 4th 399, 415. Furthermore, | don’t believe the City has standing to allege B&P Code 17200 against any of the defendants. Section 17200 is not a model of clarity, but the best reading is that to have standing under Section 17200, you must be one of the following and no one else: (1) the Attorney General; (2) a district attorney; (3) a county counsel authorized by agreement with the district attorney in actions involving the violation of a county ordinance; (4) a city attorney of a city having a population in excess of 750,000; (5) a city attorney in a city and a county (e.g., San Francisco); (6) a city prosecutor in the name of the people of the State of California upon their own complaint or upon the complaint of a board, officer, person, corporation, or association; OR (7) a person who has suffered injury in fact and has lost money or property as a result of the unfair competition. The City does not fall into any of these categories. Unfortunately, there is limited time to meet and confer in depth on these issues before my respective response deadlines. Since attorneys ‘ fees are at stake (See Gov't Code 38773.5(b); RPVMC 1.08.010), | think it is appropriate for the parties to have enough time to meet and confer further. Accordingly, | respectfully request that we push the deadline for both Indian Peak and Lucky's to respond to January 17, 2019. | can offer a corresponding extension to the City’s time to respond to Indian Peak’s complaint to allow meet and confer should the City require it. Please let me know if this arrangement is agreeable. Sincerely, Clay R. Wilkinson, Esq. Bradley & Gmelich LLP 700 N. Brand Blvd., 10th Floor Glendale, CA 91203 818-243-5200 818-243-5266 Fax cwilkinson@bglawyers.com www.bglawyers.com BRADLEY & GMELICH E-MAIL NOTICE - This transmission may be: (1) subject to the Attorney-Client Privilege, (2) an attorney work product, or (3) strictly confidential. If you are not the intended recipient of this message, you may not disclose, print, copy or disseminate this information. If you have received this in error, please reply and notify the sender (only) and delete the message. Unauthorized interception of this e-mail is a violation of federal EXHIBIT A 18 Page 6 of 6 criminal law. This communication does not reflect an intention by the sender or the sender's client or principal to conduct a transaction or make any agreement by electronic means. Nothing contained in this message or in any attachment shall satisfy the requirements for a writing, and nothing contained herein shall constitute a contract or electronic signature under the Electronic Signatures in Global and National Commerce Act, any version of the Uniform Electronic Transactions Act or any other statute governing electronic transactions. Total Control Panel Login To: cwilkinson@bglawyers.com Remove this sender from my allow list From: Ifobi@awattorneys.com You received this message because the sender is on your allow list. EXHIBIT A 19 (G ME LI CH 11 5 BR AD LE Y €% Ba W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES At the time of service, I was over 18 years of age and not a party to this action. [ am employed in the County of Los Angeles, State of California. My business address is 700 North Brand Boulevard, 10th Floor, Glendale, CA 91203-1202. On January 25, 2019, I served true copies of the following document(s) described as DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFE’S COMPLAINT; MEMORANDUM OF POINTS & AUTHORITIES; DECLARATION OF CLAY R. WILKINSON on the interested parties in this action as follows: William W. Wynder, Esq. Glen E. Tucker, Esq. Lum T. Fobi, Esq. Aleshire & Wynder LLP 2361 Rosecrans Avenue, Suite 475 El Segundo, CA 90245 (310) 527-6660/Fax: (310) 532-7395 wwynder@awattorneys.com; gtucker(@awattorneys.com; Ifobi@awattorneys.com Attorneys for Plaintiff CITY OF RANCHO PALOS VERDES BY MAIL: I enclosed the document(s) in a sealed envelope or package addressed to the persons at the addresses listed in the Service List and placed the envelope for collection and mailing, following our ordinary business practices. Iam readily familiar with Bradley & Gmelich LLP's practice for collecting and processing correspondence for mailing. On the same day that correspondence is placed for collection and mailing, it is deposited in the ordinary course of business with the United States Postal Service, in a sealed envelope with postage fully prepaid. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on January 25, 2019, at Glendale, California. arbara J. Rossmeisl, Declarant DEFENDANTS’ NOTICE OF DEMURRER AND DEMURRER TO PLTF’S COMPLAINT 20 Court Reservation Receipt | Journal Technologies Court Portal Page 1 of 2 Journal Technologies Court Portal Court Reservation Receipt Reservation Reservation |D: 879247626264 Reservation Type: Demurrer - without Motion to Strike Case Number: 185TCV03781 Filing Party: Indian Peak Properties, LLC, a Nevada corporation (Defendant) Date/Time: September 10th 2019, 8:30AM Fees Description First Paper Fees {Unlimited Civil) Credit Card Percentage Fee (2.75%) TOTAL Payment Amount: $446.96 Account Number: XXXX4626 Status: RESERVED Number of Motions: 1 Case Title: CITY OF RANCHO PALOS VERDES, A MNICIPAL CORPORATION vs INDIAN PEAK PROPERTIES, LLC, ANEVADA CORPORATION, et al. Location: Stanley Mosk Courthouse - Department 71 Confirmation Code: CR-CU96RNDZTNUZEEYUQ Fee Qty Amount 435.00 1 435.00 11.96 1 11.96 $446.96 Type: MasterCard Authorization: 06359) < Back to Main = Print Page Copyright © Journal Technologies, USA. All rights reserved. https://portal-lasc.journaltech.com/public-portal/?q=calendar/receipt/879247626264/28608 1/24/2019 21 Court Reservation Receipt | Journal Technologies Court Portal Page 2 of 2 https://portal-lasc.journaltech.com/public-portal/?q=calendar/receipt/879247626264/28608 1/24/2019 22