Demurrer Without Motion To Strike

Motion

Cal. Super. - 2nd Dist.April 22, 2019

Electronically FILED by SulberorGout of California, County of Los Angeles on 06/17/2020 03:28 PM Sherri R. Carter, Executive Officer/Clerk of Court, by S. Lopez,Deputy Clerk AN nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Justin J. Gillett (SBN 298150) justin.gillett@knobbe.com KNOBBE, MARTENS, OLSON & BEAR, LLP 2040 Main Street, Fourteenth Floor Irvine, CA 92614 Telephone: 949-760-0404 Facsimile: 949-760-9502 Attorneys for Defendant 20/20 FORESIGHT, INC., an Illinois corporation, fka PIERCE ABERDEEN CORPORATION SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES - LIMITED JURISDICTION MAXIM COMMERCIAL CAPITAL, LLC, Plaintiff, VS. 20/20 FORESIGHT, INC., an Illinois corporation, fka PIERCE ABERDEEN CORPORATION; and DOES 1-20, Defendants. Case No.: 19 STLC 03913 DEFENDANT 20/20 FORESIGHT, INC.’S NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT OF PLAINTIFF MAXIM COMMERCIAL CAPITAL, LLC; MEMORANDUM OF POINTS AND AUTHORITIES; DECLARATION OF JUSTIN J. GILLETT DATE:! TIME: DEPT: 25 Judge: Hon. James E. Blancarte Dept: 25 Action Filed: April 22, 2019 Trial Date: October 19, 2020 ! Hearing date and time have been intentionally omitted per the procedures related to COVID-19. 20/20°S NOTICE OF AND DEMURRER TO FIRST AMENDED COMPLAINT ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TO ALL PARTIES AND THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE that as soon as the matter may be heard” in Department 25, before the Honorable James E. Blancarte, at the Spring Street Courthouse - Los Angeles Superior Court, 312 N. Spring Street, Los Angeles, California, Defendant, 20/20 FORESIGHT, INC., an Illinois corporation, fka PIERCE ABERDEEN CORPORATION, will and hereby does move the Court for an order sustaining a Demurrer to the first and only remaining cause of action in the Plaintiff’s First Amended Complaint. The moving party has complied with the meet and confer requirements of Code of Civil Procedure § 430.41 as shown by the attached declaration. This Demurrer is made pursuant to Code of Civil Procedure § 430.30 on the grounds that the first and only remaining cause of action in Plaintiff’s First Amended Complaint fails to allege facts sufficient to constitute a cause of action. See Code Civ. Proc. § 430.10 (e). The Demurrer is based on this Notice of Demurrer and Demurrer, memorandum of points and authorities, supporting declaration, the papers and pleadings on file in this action, and such other papers, pleadings, and arguments as this Court shall admit. DATED: June 17, 2020 Is! Justin J. Gillett Justin J. Gillett Attorney for Defendant 20/20 FORESIGHT, INC., an Illinois corporation, fka PIERCE ABERDEEN CORPORATION ? Hearing date and time have been intentionally omitted per the procedures related to COVID-19. 0. 20/20°S NOTICE OF AND DEMURRER TO FIRST AMENDED COMPLAINT ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT Defendant, 20/20 FORESIGHT, INC., an Illinois corporation, fka PIERCE ABERDEEN CORPORATION (“20/20” or “Defendant”) hereby generally demurs to the first and only remaining cause of action in Plaintiff, MAXIM COMMERCIAL CAPITAL, LLC (“Maxim” or “Plaintiff”’)’s First Amended Complaint filed on July 29, 2019 (“FAC”) as follows: FIRST CAUSE OF ACTION I. Plaintiff’s first cause of action for breach of contract fails to state facts sufficient to constitute a cause of action pursuant to Code of Civil Procedure section 430.10(e) because Plaintiff fails to allege any breach of contract by 20/20, nor does the contract attached to the FAC demonstrate any breach by 20/20. DATED: June 17, 2020 Is! Justin J. Gillett Justin J. Gillett Attorney for Defendant 20/20 FORESIGHT, INC., an Illinois corporation, fka PIERCE ABERDEEN CORPORATION 3 = 20/20°S NOTICE OF AND DEMURRER TO FIRST AMENDED COMPLAINT ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION AND STATEMENT OF FACTS This is a breach-of-contract lawsuit involving an agreement for executive search services. Plaintiff Maxim Commercial Capital, LLC (“Maxim”) filed its First Amended Complaint in this case on July 29, 2019 (“FAC”), alleging a first cause of action for breach of contract and a second cause of action for money had and received against 20/20 Foresight, Inc. (“20/20 or “Defendant”) and Does 1-20. Plaintiff subsequently dismissed Does 1-20 and dismissed the second cause of action (Requests for Dismissal dated Sept. 23, 2019), leaving only the first cause of action for breach of contract against 20/20. Maxim agreed to extend the time for this Demurrer until June 17, 2020, on which it is filed. (Gillett Decl. 2.) 20/20 does not substantially disagree with the facts of Plaintiff's FAC. According to the FAC, Maxim entered into a contract with 20/20 (the "Agreement"), whereby 20/20 would perform executive search services to place candidates in two (2) available positions with Maxim. (FAC {6.) Plaintiff attached the Agreement as Exhibit A to the FAC and incorporated the Agreement into the FAC by reference. (Id.) As noted in the Agreement, for the purposes of initial billing, Plaintiff was to pay a retainer of $5,000 per search, for a total of $10,000 for the two (2) positions in this case. (Id. Ex. A at 3; see id. 9.) Plaintiff paid the retainer (id. 10) and the intensive search process was initiated by 20/20. Approximately five (5) months into the search process, Plaintiff terminated the placement search. (Id. 11.) Plaintiff brings a claim for breach of contract, but fails to allege any provision of the contract that Defendants breached. In fact, in its FAC, Plaintiff does not use the word breach other than in the heading of the first cause of action. (FAC.) Rather than point to a provision breached, the FAC states that Plaintiff “requested” refund of the retainer it had paid to Defendant. (/d. 412.) Plaintiff could not demand a refund under the terms of the contract, because the contract only permitted a refund of 3 This Court has “broad discretion” to consider a demurrer filed more than thirty days after service of a complaint. Jackson v. Doe, 192 Cal. App. 4th 742,750 (2011); see also Code Civ. Proc. § 473(a)(1). Here, Plaintiff consented to the date of this Demurrer and has not been prejudiced by the filing date. See Jackson, 192 Cal. App. 4th at 749 (even where plaintiff objected to a late-filed demurrer, concluding the trial court “acted within its broad discretion by considering defendant’s demurrer”). -4- 20/20°S NOTICE OF AND DEMURRER TO FIRST AMENDED COMPLAINT ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the retainer if Defendant terminated the Agreement. Specifically, the agreement states, “[i]n the event 20/20 Foresight voluntarily terminates this Agreement any and all retainer moneys held by 20-20 Foresight will be promptly refunded to Maxim Commercial Capital, LLC.” (Id. Ex. A at 3.) There is no identical provision should Maxim terminate the agreement. (Id. Ex. A.) 20/20’s denial of Plaintiff’s request to be reimbursed is clearly not a breach of the parties’ contract. IL. STANDARD “When any ground for objection to a complaint...appears on the face thereof, or from any matter of which the court is required to take or may take judicial notice, the objection on that ground may be taken by a demurrer to the pleading.” (CCP § 430.30(a).) A court, in examining the sufficiency of a complaint, should “treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of law or fact.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) Where a plaintiff alleges a conclusion and inconsistent special facts from which the conclusion is drawn, the sufficiency of the complaint is determined from the special facts, not from the conclusion. (Iverson, Yoakum, Papiano & Hatch v. Berwald (1999) 76 Cal.App.4th 990, 995.) Further, specific allegations control general pleadings. When there is any inconsistency between the specific allegations upon which a conclusion must be based and the conclusion, the specific allegations control. (Gentry v. eBay, Inc. (2002) 99 Cal.App.4th 816, 827.) A demurrer should be sustained without leave to amend if there is no reasonable possibility the complaint can be cured by amendment. (Levya v. Nelson (2000) 83 Cal.App.4th 1061, 1063.) The burden is on the plaintiff to show in what manner he can amend his complaint and how the amendment would change the legal effect of his pleading. (Goodman v. Kennedy (1976) 18 Cal 3d. 335.) III. PLAINTIFF FAILED TO ALLEGE ANY BREACH OF CONTRACT BY DEFENDANTS To establish breach of contract, each plaintiff must prove (1) the existence of the contract, (2) the plaintiff’s performance or excuse for nonperformance, (3) the defendant’s breach, and (4) 9 = 20/20°S NOTICE OF AND DEMURRER TO FIRST AMENDED COMPLAINT ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 resulting damages to the plaintiff. (Maxwell v. Dolezal (2014) 231 Cal.App.4th 93, 98.) Further, to “be enforceable, a promise must be definite enough that a court can determine the scope of the duty and the limits of performance must be sufficiently defined to provide a rational basis for the assessment of damages.” (Ladas v. California State Automobile Assn. (1993) 19 Cal.App.4th 761, 770.) Under the doctrine of truthful pleading, the courts will not close their eyes to situations where a complaint contains allegations of fact inconsistent with attached documents, or allegations contrary to facts that are judicially noticed; false allegations of fact, inconsistent with annexed documentary exhibits or contrary to facts judicially noticed, may be disregarded. (Trinity Park, L.P. v. City of Sunnyvale (App. 6 Dist. 2011) 193 Cal.App.4th 1014.) In the FAC, Plaintiff fails to set forth any allegation that Defendants breached the contract between the parties. As Plaintiff acknowledges in the FAC, in order to begin the search process, Plaintiff was required to pay $5,000 per search. (FAC {9; Id. Ex. A at 3.) Rather than an “Unearned Retainer” as Plaintiff calls it in the FAC (id. { 10), this was the money necessary to begin the extensive search process. That process would continue for five (5) months, prior to termination by the Plaintiff. (Id. 196, 11.) Once Plaintiff terminated the contract, it forfeited the retainer amount per the parties’ contract. Specifically, the agreement states, “[i]n the event 20/20 Foresight voluntarily terminates this Agreement any and all retainer moneys held by 20-20 Foresight will be promptly refunded to Maxim Commercial Capital, LLC.” (Id. Ex. A at 3.) There is no identical provision should Maxim terminate the agreement. In fact, construing the contract to require 20/20 to return the retainer would render meaningless contract language specifying that only the remaining fee would be due if Maxim hired a candidate introduced by 20/20 after termination. (See Cal. Civ. Code § 1641 (“The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other.”) The contract states: “If a search is terminated or put on hold and Maxim Commercial Capita [sic], LLC subsequently hires a candidate introduced by 20/20 Foresight we [i.e. 20/20] will be entitled to any remaining fee as outlined above.” (FAC, Ex. A at 3.) It is necessary to specify that just the remaining fee is due after terminating a search only if 20/20 keeps the retainer. 6 - 20/20°S NOTICE OF AND DEMURRER TO FIRST AMENDED COMPLAINT ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 If 20/20 were required to return the retainer upon termination of a search, then the fee owed for subsequently hiring a candidate introduced by 20/20 would be the entire fee. The sole allegation against 20/20 does not amount to a breach of contract, but merely 20/20 refusing Maxim’s request, Upon termination of the Agreement, Plaintiff requested that 20/20 Foresight return to Plaintiff the Unearned Retainer. Despite Plaintiff's request, 20/20 Foresight has failed and refused to return the Unearned Retainer to Plaintiff. (Id. 112.) Clearly, these allegations do not support an action for breach of contract. One need only read the brief, three-page Agreement between the parties to see that 20/20 fully complied with the terms of the contract. The fact that the FAC does not actually make a single allegation of a breach is dispositive. Therefore, the demurrer should be sustained without leave to amend as to Plaintiff’s first cause of action. DATED: June 17, 2020 /s/ Justin J. Gillett Justin J. Gillett Attorney for Defendant 20/20 FORESIGHT, INC., an Illinois corporation, fka PIERCE ABERDEEN CORPORATION TF ow 20/20°S NOTICE OF AND DEMURRER TO FIRST AMENDED COMPLAINT © o o 9 10 11 12 13 14 15 16 17 18 19 20 2] 22 23 24 25 26 27 28 DECLARATION OF JUSTIN J. GILLETT IN SUPPORT OF DEFENDANT 20/20 FORESIGHT, INC.’S DEMURRER TO FIRST AMENDED COMPLAINT OF PLAINTIFF I, Justin J. Gillett, declare as follows: 1. I am an attorney in the law firm of Knobbe, Martens, Olson & Bear, LLP, and am counsel for 20/20 Foresight, Inc., an Illinois corporation, tka Pierce Aberdeen Corporation (“20/20 or “Defendant™). 2. Mitchell Wong, who is counsel for Maxim Commercial Capital, LLC (*Maxim” or “Plaintiff”’), informed me via email that Maxim agrees to extend the time within which to file this Demurrer or other response to Maxim’s first amended complaint until June 17, 2020. There have been no previous extensions of time to respond to any complaint in this action. During the period of extension, the parties have engaged in settlement discussions. 3. On May 29, 2020, I met and conferred via telephone regarding the concurrently filed Demurrer with Mr. Wong. During that teleconference, I identified the issues raised in the Demurrer, and the parties did not reach an agreement resolving those issues. I declare under penalty of perjury that the foregoing is true and correct. Executed June 17, 2020 in Costa Mesa, California. Justin J. Gillett { \ » NJ / en DECLARATION IN SUPPORT OF 20/20’S DEMURRER a N O G O = ¥ en L A PROOF OF ELECTRONIC SERVICE I declare that I am over the age of 18 and that [ am not a party to the above-captioned action. My business address is 2040 Main Street, Irvine, CA 92614. My electronic service address 1s scott.hobin@knobbe.com. On June 17, 2020, I electronically served the following document[s], described as DEFENDANT 20/20 FORESIGHT, INC.’S NOTICE OF DEMURRER AND DEMURRER TO FIRST AMENDED COMPLAINT OF PLAINTIFF MAXIM COMMERCIAL CAPITAL, LLC; MEMORANDUM OF POINTS AND AUTHORITIES; DECLARATION OF JUSTIN J. GILLETT. I electronically served the document[s] listed above via the Court’s electronic service provider to the parties identified below: Attorneys for Plaintiff Melody G. Angerson, Esq. mga@replevin.com Mitchell L. Wong, Esq. mlw@replevin.com WRIGHT LAW GROUP, PLLC 4470 W. Sunset Blvd., Suite 90003 Los Angeles, CA 90027 I declare that I am employed in the office of a member of the bar of this Court at whose direction the service was made. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on June 17, 2020, at Trabuco Canyon Scott Hobin A Proof of Service