To 2nd Amended Complaint Atty Roberts Tbd By Court

Demurrer

Cal. Super. - 6th Dist.February 24, 2020

A Pr of es si on al Co rp or at io n R O P E R S R e d w o o d Ci ty M A J E S K I 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 TODD A. ROBERTS (SBN 129722) LITA M. VERRIER (SBN 181183) JONATHAN C. HATFIELD (SBN 292198) ROPERS MAJESKI PC 1001 Marshall Street, 5th Floor Redwood City, CA 94063 Telephone: 650.364.8200 Facsimile: 650.780.1701 Email: todd.roberts@ropers.com lita.verrier@ropers.com jonathan.hatfield@ropers.com Attorneys for Defendants BASEHEALTH, INC., ARDY ADRIANPOUR HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON Electronically Filed by Superior Court of CA, County of Santa Clara, on 6/15/2020 4:14 PM Reviewed By: P. Lai Case #20CV366492 Envelope: 4457873 SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA RR HEALTH, INC., a California Corporation, Plaintiff, Vv. BASE HEALTH, INC., a Delaware Corporation, ARDY ARIANPOUR, an individual, HOSSEIN FAKHRAI-RAD, an individual, DANIEL HOEMKE, an individual, PRAKASH MENON, an individual, and Does 1-30, inclusive, Defendants. 4823-1299-9360.1 Case No. 20CV366492 [Assigned for all purpose to Hon. Socrates Manoukian, Dept. 20] DEFENDANTS ARDY ARIANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S SECOND AMENDED COMPLAINT [Filed Concurrently with Memorandum of Points and Authorities; Request for Judicial Notice; Declaration of Jonathan C. Hatfield; Motion to Strike; 430.41 Declaration and [Proposed] Orders] Hearing: Date: TBD* Time: 9:00 a.m. Location: Dept. 20 *To be assigned by clerk afier filing in per revised Shelter in Place guidelines DEFENDANTS ARDY ARIANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 TO ALL PARTIES AND COUNSEL OF RECORD: PLEASE TAKE NOTICE that at a date and time to be set by the clerk and posted to the Superior Court-Case Information Portal available at https://cmportal.scscourt.org/Portal, this matter will be heard in Department 20 of the above-entitled Court, located at 191 North First Street San Jose, California 95113. Defendants ARDY ARIANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, and PRAKASH MENON (collectively, “Individual Defendants’) will and hereby does demur to the Verified Second Amended Complaint (“SAC”) of Plaintiff RR Health (“RR Health’) and all causes of action contained thereon on the grounds set forth in the enclosed Demurrer. (Cal. Code Civ. Proc. §§ 430.10, 430.50). Individual Defendants’ demurrer is based upon this Notice, the supporting Memorandum of Points and Authorities; the [Proposed] Order filed herewith; the Declaration of Jonathan C. Hatfield in Support of Demurrer; matters judicially noticeable, including those matters set forth in the supporting Request for Judicial Notice and exhibits thereto; all other supporting papers and documents on file with the Court; the record in this action; and such oral and documentary evidence as may be presented at or prior to the hearing. Dated: June 15, 2020 ROPERS, MAJESKI, PC By: TODD A. ROBERTS LITA M. VERRIER JONATHAN C. HATFIELD Attorneys for Defendants BASEHEALTH, INC., ARDY ADRIANPOUR HOSSEIN FAKHRAI- RAD, DANIEL HOEMKE, AND PRAKASH MENON 4823-1299-9360.1 rn. DEFENDANTS ARDY ARIANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 DEMURRER TO SECOND AMENDED COMPLAINT Defendants, and each of them, hereby demur to the following causes of action alleged in the SAC on the following grounds: DEMURRER TO ALL CLAIMS (COUNTS V -X) 1, Plaintiff’s SAC, and all counts therein, are subject to demurrer on the ground that the pleading is uncertain within the meaning of Code of Civil Procedure section 430.10(f) and fails to state a claim pursuant to section 430.10(e), including applicable statutes of limitation. DEMURRER TO COUNT V Count V for Promissory Estoppel fails to state facts sufficient to constitute a cause of action against Defendants because it fails to sufficiently allege the existence of a "clear and unambiguous promise” or reliance by Plaintiff upon same. Therefore, Defendants’ demurrer should be sustained. The claim also violates the applicable statute of limitations. Cal. Code Civ. Proc. §§ 430.10(e), 430.50. DEMURRER TO COUNT VI Count VI for Tortious Interference with an Existing Contract fails to state facts sufficient to constitute a cause of action against Defendants because it fails to sufficiently allege the existence of an actionable contract between Plaintiff and a third party, much less Defendants’ knowledge of or interference with same, or otherwise adequately allege the elements of this claim. The claim also violates the applicable statute of limitations. Therefore, Defendants’ demurrer should be sustained. Cal. Code Civ. Proc. §§ 430.10(¢), 430.50. DEMURRER TO COUNT VII Count VII for Tortious Interference with Prospective Economic Advantage fails to state facts sufficient to constitute a cause of action against Defendants because it fails to sufficiently allege the existence of an actionable relationship between Plaintiff and a third party, much less Defendants’ knowledge of or interference with same, or otherwise adequately allege the elements of this claim or identify an independent “wrongful act” to support it. The claim also violates the applicable statute of limitations. Therefore, Defendants’ demurrer should be sustained. Cal. Code Civ. Proc. §§ 430. 10(¢), 430.50. 4823-1299-9360.1 = Be DEFENDANTS ARDY ARIANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 DEMURRER TO COUNT VIII Count VIII for Fraud-False Promise fails to state facts sufficient to constitute a cause of action against Defendants because it fails to sufficiently allege the facts necessary to support a fraud claim, let alone with the required specificity. Therefore, Defendants’ demurrer should be sustained. Cal. Code Civ. Proc. §§ 430.10(¢), 430.50. DEMURRER TO COUNT IX Count IX for Fraud-Intentional Misrepresentation fails to state facts sufficient to constitute a cause of action against Defendants because it fails to sufficiently allege the facts necessary to support a fraud claim, let alone with the required specificity. Therefore, Defendants’ demurrer should be sustained. Cal. Code Civ. Proc. §§ 430. 10(¢), 430.50. DEMURRER TO COUNT X Count X for Negligent Misrepresentation fails to state facts sufficient to constitute a cause of action against Defendants because it fails to sufficiently allege the facts necessary to support a claim based in fraud, let alone with the required specificity. The claim also violates the applicable statute of limitations. Therefore, Defendants’ demurrer should be sustained. Cal. Code Civ. Proc. §§ 430. 10(¢), 430.50. Dated: June 15,2020 ROPERS, MAJESKI, PC 7 By: TODD A. ROBERTS LITA M. VERRIER JONATHAN C. HATFIELD Attorneys for Defendants BASEHEALTH, INC., ARDY ADRIANPOUR HOSSEIN FAKHRAI- RAD, DANIEL HOEMKE, AND PRAKASH MENON 4823-1299-9360.1 _4- DEFENDANTS ARDY ARIANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R O P E R S R e d w o o d Ci ty M A J E S K I 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 II. III. IV. VIL TABLE OF CONTENTS Page INTRODUCTION AND SUMMARY OF GROUNDS FOR DEMURRER..................... 1 BRIEF PROCEDURAL, SUMMARY . seuss ssussapsummnsrs summa sus suns sm sauesssaeas 55 1 SUMMARY OF ALLEGED FACTS. oii 2 A. THE ALLEGED ORAL CONTRACTS FOR GENOPHEN, CDA AND POINTE, cssimsnsumsns smssmsmnasmmmss owas sass ea, ER PH SS SH CA OSA ATE 2 B. PLAINTIFF'S SPECIFIC ALLEGATIONS PERTAINING TO THE INDIVIDUAL DEFENDANTS... eee 3 C. MOVING DEFENDANTS' REQUEST FOR JUDICIAL NOTICE....................... 3 STANDARD ON DEMURRER. .....ccciiiiiiiiiiee cetera 4 PLAINTIFF'S CLAIMS AGAINST THE INDIVIDUAL DEFENDANTS ARE BARRED BY THE APPLICABLE STATUTES OF LIMITATION ......ccccccevviiinnieenen. 4 PLAINTIFF FAILS TO PLEAD ANY COGNIZABLE LEGAL CLAIMS AGAINST DEFENDANT BASEHEALTH ....coociiiiiiiiiit eects 5 A. COUNT V FOR PROMISSORY ESTOPPEL FAILS TO STATE A CLAIM. ceeee see eae ete sabes t ee sees eaae eases 5 I. PLAINTIFF'S CLAIM IS TIME BARRED BY THE STATUTE OF LIMITATIONS. commen snes: 5 2. PLAINTIFF'S CLAIM IS BARRED BY THE STATUTE OF FRAUDS. Lc ree sae sees 7 3. PLAINTIFF'S CLAIM OTHERWISE FAILS TO STATE A CLAIM AGAINST THE INDIVIDUAL DEFENDANTS........ccovceieniene 7 B. THE SAC FAILS TO STATE A CLAIM FOR TORTIOUS INTERFERENCE AGAINST THE INDIVIDUAL DEFENDANTS.................... 8 I. PLAINTIFF'S TORTIOUS INTERFERENCE CLAIMS ARE BARRED BY THE STATUTE OF LIMITATIONS ......ccocoiiiiiiiieeeee. 9 2. THE SAC DOES NOT SUPPORT LIABILITY AGAINST THE INDIVIDUAL DEFENDANTS FOR TORTIOUS INTERFERENCE o.oo ees 9 3. PLAINTIFF DOES NOT PLEAD A VALID TICR CLAIM................... 10 PLAINTIFF CANNOT ESTABLISH A CLAIM FOR TORTIOUS INTERFERENCE WITH ECONOMIC ADVANTAGE. ........cccceouennee. 11 C. COUNT VIII FOR FRAUD-FALSE PROMISE AND COUNT IX FOR FRAUD-INTENTIONAL MISREPRESENTATION ......ccccoiviiiiiiiiinieeeiieee 12 I. THE SAC DOES NOT PLEAD ACTIONABLE FRAUD ........ccuceu...... 12 2. THE SAC DOES NOT PLEAD FRAUD WITH SPECIFICITY............. 13 3. THE SAC'S REFERENCES TO CONCEALMENT ARE LEGALLY INADEQUATE .....oooiiiiiieieeececeeeee eects 14 D. COUNT IX FOR NEGLIGENT MISREPRESENTATION. ......cccccceeiiiniinnenn 14 -1- AIHA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS (continued) Page VII. PLAINTIFF'S CLAIMS SHOULD BE DISMISSED WITHOUT LEAVE TO AMEND. Loctiteeee ee ee sheet abet be eaa esha at st ates beatae sree se ene anne 15 VIII. CONCLUSION ....c.oooiiiiiiiteie cierto eie eves sree se esses esbe esse sree sssess esse esse esse sssensesssanseessens 15 11 - AIHA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R O P E R S R e d w o o d Ci ty M A J E S K I 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Page Cases Align Tech., Inc. v. Tran, 179 Cal. App. 4th 949 (2009) ....ooveiieieieeeeeeeeeeeeeee ee ee ee ea esae t s eee as 4 Applied Equip. Corp. v. Litton Saudi Arabia Ltd. CLOG) T CALAN SUD «mms susan sess assess 5S, A850 A SA TS AA SRS A 10 Asahi Kasei Pharma Corp. v. Actelion Ltd. (2013) 222 Cal. APP.Ath O45 o.oo eee ee sae sae 10 Bockrath v. Aldrich Chemical Co., Inc. (1999) 21 Cal.Ath 71 eee eee eee eae sates ee este sae st estes e sae este sae nees 3 Charnay v. Cobert (2006) 145 Cal. APP-Ath 170 comics sae sees ese eines 14 Cohen v. S & S Const. Co. (1983) 151 Cal.3d O41 eens e beens 12 Committee on Children’s Television, Inc. v. General Foods Corp. (1983) D0 TALI 1 D7 ssn. 50 0000505355750 455055553555 585855500 5.3505 4.55555. 555005 48 8345.50 35 RSA 9 5.30 14 Cooper v. Equity Gen. Ins. Co. (1990) 219 Cal. APP.3d 1252... eee sae seers eee eine 13 Crown Imports, LLC v. Sup.Ct. (Classic Distributing & Beverage Group, Inc.) (2014) 223 Cal. APP.Ath 1395 «o s seeeeeseebeeie 12 Doe v. City of Los Angeles, 42 Cal. Ath ST, SB05FL {ZODT Ys sossrmssunsssostassasanssss.sosssssosssansns ds shia 53535006 898 S58 46355 BEA 4 E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 CalLAPP.Ath 1308... eee ee eee steerer sane 15 Ecology, Inc. v. State of California, 129 Cal. App. 4th 887 (2005) ..eeeveeeeietieeeie eects eee sae sees sees 7 Gross v. Symantec Corp., No. C 12-00154 CRB, 2012 WL 3116158 (N.D. Cal. July 31,2012) .cc.cccveiiereeienrieiieieieenene 7 Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.4th TO02 ....coeeeiieeiieitieeet etcetera eee ese sate sees eben 13 -1- ABH EA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (continued) Page Hills Transp. Co. v. Southwest Forest Industries, Inc. CLOGR) 2BE Coll SPIP 20] TOD, 50555m5 55555750570 50854550 5557504050050, 550550505585. 4555 AR A SEA 5.55.55 13 Ingram v. Sup.Ct. (Slinkard) (1979) 98 Cal. APP.3A 483... eee eee este esate eben esrb sb ese eben 5 Jones v. Wachovia Bank (2014) 230 Cal. APP.-Ath 935 eee ester eee eee sree en ene 7 Joslin v. HA.S. Ins. Brokerage, 188:Cal. App: 2d 369 (CF: Zp. 1 F800 cvumswssmansses smassussosesion somes. sa55555551098 SSRIS SESE SEE 3 Kasparian v. County of Los Angeles (1995) 38 CalLAPP.Ath 242 ooo eee ete eaten sree sees 10 Knoell v. Petrovich (1999) 76 Cal.LAPP.Ath 164 «coors eee sree sae eben 9 Korea Supply Co. v. Lockheed Martin Corp., supra, 29 Cal. App.4th at 1158-1159 .....oiiiiiiiieeee cesses reese eben 12 Laks v. Coast Sav. & Loan Ass'n, 60 Cal. APP. 3d 885 (19760)... estes eee estes eee eases eben sree 8 Lazar v. Sup.Ct. (Rykoff-Sexton, Inc.) (LVR Ym, 05105505505 585 FS 45,5 SE 40555 5 RS HS 50 53 RS ASR 3, FR RASTA AS38 13 Lazar v. Sup.Ct. (Rykoff-Sexton, Inc.) (1996) 12 Cal.Ath 631 «eee eee ete ete sees bese ea tetas tenes sbe sbeebs 12 Majd v. Bank of America, NA (2015) 243 Cal. APP.Ath 1293 o.oo eee ste e te eeeteeeseseesesb ese ebeene a 14 Mintz v. Blue Cross of California, 172 Cale 0p Hit, 150 [CEN coercion soso cots ions ATR SAR 9 Nat'l Dollar Stores v. Wagnon, 97 Cal. APP. 2d 915 (1950)... viene tter est s sree esterase sree sree ens 8 Newport Harbor Ventures, LLC v. Morris Cerullo World Evangelism (2016) 6 Cal. APDP.Sth 1207 eee etic eee see sbeebs sree sees enes 5 a. AIHA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (continued) Page Nolte v. Cedars Sinai Med Center, 236 18 Cal, Aap. AUK, TAL TFNLSY sma. mmm 520.505555.550570 5085450505555 4050550, 05 R55 8.5555 4 Norgart v. Upjohn Co. (1999) 21 Cal.dth 383... eee ee eee sees bese steers eae sate shee ees 5,6 Pacific Gas & Elec. Co. v. Bear Stearns & Co. (1990) 50 Cal.3d T1118 eee eee eee sae reeset este shee seen estaba enae as 10 Perez v. Golden Empire Transit Dist., 209: Cal. App. 4th 23 1208, 1235-88 [20] wma sms smssssssmsss annem sd 4 Perfect 10, Inc. v. Visa Int’l Service Ass'n (9th Cir. 2007) 494 F3d T8E8......ee eee eee sates eee ee shee steers ee sree sae nees 9 PM Group, Inc. v. Stewart (2007) 154 Cal. APP-Ath 55 eerste ee sate sees eeeeaae 10 Quelimane Co. v. Stewart Title Guar. Co. (1998) 19 Cal. Ath 26 ..cneeieinieiieceeeeeeteeeeeeeeeeeeesaeeseeeeeseebeeebesa e s es staba 11 Redfearn v. Trader Joe's Co. (2018) 20 Cal. APP-S5th 98... eee ete sate sees 10 Reeves v. Hanlon (OU) B3 CALA 1 LAD 2.50000 5050050505505 55005050585, 55805 55585500555. 455555500 55550555 5558545, 3555 58 S55 5.30 11 Robinson Helicopter Co., Inc. v. Dana Corp . (2004) 34 Cal.Ath O79 eee eee sheers eee 12 Roy Allan Slurry Seal, Inc. v. American Asphalt South, Inc. (2017) 2 Cal. Sth 505 weiss eaters eee eee shee sree eee ene 11 San Jose Const., Inc. v. S.B.C.C., Inc. (2007) 1.55 Cal APPAR. 1 FR sons onessomssassin somes. msi ism 5585 5 ms aS SHR 0 11 Schonfeldt v. State of California (1998) 61 Cal APP.Ath 1462 coccinea teeta sree seen 15 Shoemaker v. Myers (1990) 52 Cal. APP-3A Lanier ees eset eee este sate sees eae 10 _ 3. AIHA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES (continued) Page Trembath v. Digardi CLOTAY AT CA APT FB 0.5m 5050505508550, 5055.57.55, 5500555 955 AS 5, 65 FS S545 A053 9 Vaca v. Wachovia Mortg. Corp., 198 Cal. APP. 4th 737 (2011) eee ee eee este sates atest ee sabe enna anne e seen 6 West v. JP Morgan Chase Bank, N.A. (2013) 214 Cal. APP.Ath 780 «eee eee eee eebe eee eb aeebae enna enneas 13 Woo v. Sup.Ct. (Zarabi) C1999): TS Cal ADE Ath, 109 sommes simone momen es asim mmsns 10s Sas sms am 5 Statutes Cal. Evid. Code § 452(d) .oouvieiiiiiieiie cece steer e esas etter esas sate etter e eae eaae eens 3 Civil Code Section 1624(2)(1)..c.uieeereeeerie eee eee e eee e eae e ee ee saae ee erae ee saae ee esseeennns 7 Code of Civil Procedure SECHION 474 ......c..ooiiiiriieeie etait eters eee ates eee sbae esse e sree see esae eens 5 -4- AIHA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R O P E R S R e d w o o d Ci ty M A J E S K I 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES L INTRODUCTION AND SUMMARY OF GROUNDS FOR DEMURRER. In October 2019, Plaintiff RR Health, Inc. ("Plaintiff or "RR Health") filed an amended pleading in this matter which added as Defendants four individuals with varying connections to Defendant BaseHealth, Inc. and seeks to hole each of these individuals personally liable for alleged tortious and fraudulent conduct. However, the SAC fails to plead operative facts as to each of the six claims alleged against Defendants ARDY ARITANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, and PRAKASH MENON ( collectively, the "Individual Defendants"). None of these claims have legal merit and each subject to dismissal on Demurer. Each of the Individual Defendants were known to Plaintiff during the scope of its negotiations with BaseHealth and each were identified and discussed in detail in Plaintiff's initial April 2018 pleading. But it was not until late 2019, at a time when Plaintiff was staring down a Motion for Summary Judgment field by BaseHealth's prior counsel, that Plaintiff sought leave to amend and added Arianpour, Rakhrai-Rad, Hoemke, and Menon as individual Defendants. Regardless of Plaintiff's motivation in adding the Individual Defendants to this lawsuit, the core facts are clear: Plaintiff's claims for Promissory Estoppel, Tortious Interference, Fraudulent Misrepresentation, and Negligent Misrepresentation each fail due to both pleading insufficiencies and the relevant statutes of limitation. Accordingly, the Individual Defendants, and each of them, respectfully request that this demurrer be sustained as to all causes of action, with prejudice. II. BRIEF PROCEDURAL SUMMARY. Plaintiff's initial Complaint was filed in this matter on April 5, 2018 in Napa County Superior Court (the "Initial Complaint.") See Declaration of Jonathan Hatfield In Support of Demurrer and Motion to Strike ("Hatfield Decl."), Ex. B, Initial Complaint, p. 1; See also Request for Judicial Notice. Following discovery, and while Defendant BaseHealth's Motion for Summary Judgment was pending, -1- AIHA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 Plaintiff filed a Motion for Leave to Amend. See Napa County Superior Court Docket. Plaintiff's Motion was granted and Plaintiff's Second Amended Complaint ("SAC") was filed on October 24, 2020. The Individual Defendants filed a Motion to Transfer Venue, which was granted over Plaintiff's opposition, and the transfer was processed by the Santa Clara Superior Court on or about May 15, 2020. III. SUMMARY OF ALLEGED FACTS. The allegations within Plaintiff's SAC predominantly arise out of protracted negotiations between Plaintiff RR Health and Defendant BaseHealth, which Plaintiff contends culminated in three "oral contracts:" the Genophen, CDA, and POML "contracts." See generally, SAC. The Individual Defendants are not parties to the causes of action allegedly arising out of the above contracts, but the underlying facts provide context to the sufficiency, or lack thereof, of the claims brought against the Individual Defendants. These moving Defendants thus provide a brief summary of the contractual allegations pertaining to RR Health and BaseHealth, and incorporate by reference the more detailed factual recitation contained in the Demurrer of Defendant BaseHealth field concurrently herewith. A. The Alleged Oral Contracts for Genophen, CDA and POML The SAC alleges the existence of three "oral contracts" arising out of oral promises by Defendant BaseHealth regarding access to BaseHealth's products and software to RR Health to act as a reseller to third parties. See SAC at 94/95, 103, 111. Beyond this general arrangement, the SAC does not allege the material terms of any contract, but concludes that the contracts were "breached" when BaseHealth discontinued its products without "reasonable notice" to Plaintiff. SAC at 9] 100, 108, 116. The three purported contracts are: Genophen Contract: The SAC alleges that RR Health and BaseHealth discussed entering into a contract regarding Defendant's Genophen application, but that no contract was ever signed. SAC 9 15. The SAC concludes the existence of a "verbal distributer/resale contract between the parties for Genophen." Id., 4 47. Plaintiff contains the "contract" was breached by Defendant BaseHealth discounting to offer its Genophen product without "reasonable notice" to Plaintiff. Id. at 100. CDA Contract: Plaintiff alleges that around November 2016, "[t]he parties agreed that Plaintiff would pay Defendant [BaseHealth] for its API" in connection with a project called Chronic Disease Assessment, or "CDA." § 48. Plaintiff does not allege that its development of the CDA was the result of any specific promise by Defendant BaseHealth, and does not state what 2. AIHA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 Plaintiffs or Defendant's obligations were under the CDA contract. Plaintiff claims the oral contract was "breached" by Defendant BaseHealth discounting to offer its Genophen product without "reasonable notice" to Plaintiff. /d. at 108. POML Contract: In late February of 2017, Defendant BaseHealth introduced a new product called "Point of Maximum Leverage" ("POML"). SAC § 63. Plaintiff alleges an oral contract to be a reseller of POML. As with the prior two alleged "oral contracts," the material terms of this purported "verbal agreement" related to POML are not identified in the SAC and no written contract was ever signed. Each of the purported oral contracts identify their term as " a period of years, but at least "reasonable." See 4 97 (Genophen), 105 (CDA Contract); q 113 (POML Contract). At deposition, Piedra testified that the Genophen agreement was entered into “when we started the relationship,” in the summer or fall of 2015 and could not be completed within one year. Declaration of Attorney Jonathan Hatfield ("Hatfield Decl.") Exhibit "A," Louis Piedra Deposition Transcript ("Piedra Dep.") 312:3-12. Plaintiff alleges Defendant made the decision to terminate its API in 2016 and Plaintiff learned of this is March 2017, thereby "breaching" their agreements. SAC at 9 64-66. B. Plaintiff's Specific Allegations Pertaining to the Individual Defendants. The SAC alleges that each of the Individual Defendants were "agents" of BaseHealth and does not contain any allegations concerning any Individual Defendant working in his own personal interests of capacity. See SAC 944-7. The SAC alleges that the Individual Defendants, acting as agents for BaseHealth, made representations on BaseHealth's behalf concerning BaseHealth's products and the alleged contracts between BaseHealth and RR Health. See, e.g. SAC at 9 29, 82, 84. The SAC seeks to hold the Individual Defendants personally liable for Promissory Estoppel; Tortious Interference; Fraud; and Misrepresentation. SAC at 9 126, 133, 141, 147, 158, 169. C. Moving Defendants' Request for Judicial Notice. In addition to the facts appearing within the four corners of the Complaint, the Individual Defendants support this Demurrer with its Request for Judicial Notice regarding Plaintiff's previous pleadings, admissions, and discovery responses in this matter, filed concurrently herewith. See Cal. Evid. Code § 452(d); Bockrath v. Aldrich Chemical Co., Inc. (1999) 21 Cal.4th 71, 83-84 (judicial notice of discovery responses; Joslin v. H.A.S. Ins. Brokerage, 184 Cal. App. 3d 369, 375 (Ct. App. _ 3. AIHA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 1986) (judicial notice of party-admissions at deposition.) IV. STANDARD ON DEMURRER. To survive demurrer, plaintiffs must set forth the essential facts of their case "with reasonable precision and with particularity sufficient to acquaint [the] defendant with the nature, source and extent" of their claim. Doe v. City of Los Angeles, 42 Cal. 4th 531,550,551, n.5 12 (2007). Courts treat a demurrer as admitting all properly pleaded material facts, but not contentions, deductions, or conclusions of fact or law. Nolte v. Cedars Sinai Med Center, 236 18 Cal. App. 4th 1401, 1406 (2015); Align Tech., Inc. v. Tran, 179 Cal. App. 4th 949, 958 (2009). Where a complaint makes both general allegations and specific allegations, and a conflict or inconsistency exists between them, the specific allegations control over the inconsistent general allegations. Perez v. Golden Empire Transit Dist., 209 Cal. App. 4th 23 1228, 1235-36 (2012). V. PLAINTIFF'S CLAIMS AGAINST THE INDIVIDUAL DEFENDANTS ARE BARRED BY THE APPLICABLE STATUTES OF LIMITATION Plaintiff's Initial Complaint was filed on April 5, 2018 and is alleged against Defendant BaseHealth only. Hatfield Decl., Ex. B, Initial Complaint, p. 1; See also Request for Judicial Notice. Plaintiff's Initial Complaint. Each of the Individual Defendants, Arianpour, Rakhrai-Rad, Hoemke, and Menon, are not fictitiously named Doe Defendants but expressly named and identified at paragraphs 4 through 7: "4. Ardy Arianpour is, and at all times mentioned herein was, the Chief Business Officer of BaseHealth, and therefore an agent of Defendant. 5. Hossein Fakhrai-Rad is, and at all times mentioned herein was, the President of 2 BaseHealth, and therefore an agent of Defendant. 6. Daniel Hoemke, at all times mentioned herein was the Vice President of Global 4 Business Development for BaseHealth, and therefore an agent of Defendant. 7. Prakesh Menon at all times mentioned herein was the Chief Executive Officer for 6 BaseHealth, and therefore an agent of Defendant.” Paragraph 8 then identifies additional fictitiously named Defendants as DOES 1-30. /d. The Initial Complaint contains a summary of facts concerning Plaintiff's dealings with BaseHealth, the role -4- AIHA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 of the Individual Defendants, and the purported representations of the Individual Defendants. See, e.g. Initial Complaint at 99 31, 35, 38-39, 53, 57, 63, 72. When new Defendants are added in an amended pleading (i.e., not added in as Doe Defendant pursuant to Code of Civil Procedure section 474) due process forbids application of the relation back doctrine for the statute of limitations: “The straightforward rule is that amendment after the statute of limitations has run will not be permitted where the result is the addition of a party who, up to the time of the proposed amendment, was neither a named nor a fictitiously designated party to the proceeding.” Ingram v. Sup.Ct. (Slinkard) (1979) 98 Cal. App.3d 483, 492; Woo v. Sup.Ct. (Zarabi) (1999) 75 Cal. App.4th 169, 176. Thus, as set forth below Plaintiff's claims for Promissory Estoppel, Tortious Interference, and Negligent Misrepresentation are time barred under the applicable two year statutes. VI. PLAINTIFF FAILS TO PLEAD ANY COGNIZABLE LEGAL CLAIMS AGAINST DEFENDANT BASEHEALTH The facts present in the SAC and those facts judicially noticeable establish Plaintiff cannot maintain any legal claim against any Individual Defendant, whether sounding in tort or equity. For the reasons set forth herein, Defendants request that the Court sustain this Demurrer in its entirety and issue an order awarding Defendant its costs of suit. A. Count V for Promissory Estoppel Fails to State a Claim. Plaintiff's Promissory Estoppel claim names each of the four Individual Defendants for alleged "promises" made by them in their individual capacities. However, the allegations supporting these claims are severely lacking, and the claim is further time-barred by the applicable statute of limitations and barred by the statute of frauds. 1. Plaintiff's Claim is Time Barred by the Statute of Limitations. Plaintiff's Promissory Estoppel claim alleges that Defendant "made clear and unambiguous promises to Plaintiff regarding Plaintiff being a distributer/reseller of Genophen and POML, and regarding the use of BaseHealth’s API for the CDA project." SAC 9 126. As this promissory estoppel claim is predicated upon an alleged oral promise, the statute of limitations is two years. CCP § 339(1); Newport Harbor Ventures, LLC v. Morris Cerullo World Evangelism (2016) 6 Cal. App.5th 1207, 1224. -5- AIHA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 The cause of action accrues when either the wrongful act is done, the wrongful result occurs and when liability arises.” Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 397. While Plaintiff does not adequately allege any "clear and unambiguous promises" which provide any basis for a promissory estoppel claim, the SAC does identify the dates Plaintiff alleges it learned that Defendant was discontinuing its Genophen app and API: the SAC alleges that BaseHealth decided to abandon Genophen and the API in 2016. SAC 4] 63. Paragraph 64 states that "Plaintiff first learned of the abandonment of Genophen in March 2017" and was concerned "BaseHealth would also abandon the APL." Paragraph 65 states that BaseHealth told Plaintiff in March 2017 " “As for API customers, we can’t offer any support to you so if you have deals you can close-go for it... But again, no more selling of future API deals” and to "forget APL." At Paragraph 72, Plaintiff stated to Defendant: “This is a major shift from what we were doing, we kind of have to start again, therefore we have to have a written agreement in place and in order to move forward.” These facts are more than sufficient to put Plaintiff upon inquiry notice to suspect that the truth of the alleged promises, or his reliance thereon, was in doubt. As the Supreme Court stated in Norgart v. Upjohn: ""[ T]he plaintiff discovers the cause of action when he at least suspects a factual basis, as opposed to a legal theory, for its elements, even if he lacks knowledge thereof - when, simply put, he at least “suspects ... that someone has done something wrong” to him... He has reason to discover the cause of action when he has reason at least to suspect a factual basis for its elements. (Citations Omitted.) He has reason to suspect when he has ‘notice or information of circumstances to put a reasonable person on inquiry’ (Citations omitted); he need not know the “specific ‘facts' necessary to establish” the cause of action. ..but, within the applicable limitations period, he must indeed seek to learn the facts necessary to bring the cause of action in the first place - he “cannot wait for” them “to find” him and “sit on” his “rights”; he “must go find” them himself if he can and “file suit” if he does (Citations Omitted)." Norgart v. Upjohn Co., 21 Cal. 4th 383, 397-98 (1999), citing Jolly v. Eli Lilly & Co., 44 Cal.3d at p. 1110. A demurrer is proper when the grounds for application of the statute of limitations appears on the face of the complaint or from matters judicially noticeable. Vaca v. Wachovia Mortg. Corp., 198 Cal. App. 4th 737, 746 (2011). Here, the SAC's allegations establish that Plaintiff was on inquiry notice of the alleged basis of the grounds for its promissory estoppel claim more than two years before the October 2019 filing, and thus the claim is time-barred. -6- AIHA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 2. Plaintiff's Claim is Barred by the Statute of Frauds. Plaintiff's promissory estoppel claims is further barred by the Statue of Frauds. A plaintiff may not plead around the statute of fraud's bar on oral contracts by framing the same claim in equity, as a promissory estoppel claim based on an alleged contractual promise is subject to breach of contract defenses, including the statute of frauds. Weil & Brown, Cal. Prac. Guide Civ. Pro. Trial Claims and Def. Ch. 9(V)-C (2018); Jones v. Wachovia Bank (2014) 230 Cal. App.4th 935, 943-945-promissory estoppel claim barred by statute of frauds.) Here Plaintiff's Promissory Estoppel claim is subject to the statute of frauds on two grounds: (1) as an oral contract which cannot be completed in one year; and (2) as a UCC contract for the sale of goods. As to the former, Civil Code section 1624(a)(1), provides that "[a]n agreement that by its terms is not to be performed within a year from the making thereof" is invalid. Here, each of the purported oral contracts identify their term as: "the duration of this Agreement was to be "a period of years." See 497, 9105 (CDA Contract); q 113 (POML Contract). As to the latter, the UCC at section 2-201(1) provides that "a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker." Each of the alleged oral contracts pertain to the sale of software or software license, which California courts have held a "good" under the UCC. See Gross v. Symantec Corp., No. C 12-00154 CRB, 2012 WL 3116158, at *9 (N.D. Cal. July 31, 2012) (applying California law); see SAC 99 95-96 (Genophen); SAC 99 104-105 (CDA); SACY{ 111-112 (POML). 3. Plaintiff's Claim Otherwise Fails to State a Claim Against the Individual Defendants. Promissory estoppel requires the pleading and proving of: (1) a promise that is clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) reasonable and foreseeable reliance; and (4) resulting injury. Ecology, Inc. v. State of California, 129 Cal. App. 4th 887, 901-02, 904 (2005). The allegations of Plaintiff's SAC fail to meet these elements as to the Individual Defendants. The SAC alleges that the Individual Defendants "made clear and unambiguous promises to Plaintiff regarding Plaintiff being a distributer/reseller of Genophen and POML, and regarding the use -7- AIHA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 of BaseHealth’s API for the CDA project." SAC §] 126. But the SAC does not identify what "promises" it seeks to rely on for promissory estoppel, nor is this deficiency revived by a generalized "incorporation by reference" at paragraph 125. The body of the SAC contains references to innocuous, non-actionable statements by the Individual Defendants, but no "clear and unambiguous promises" are set forth. See e.g., SAC 4] 15-24, 29, 82, 84. In fact, the allegations within the SAC establish the Individual Defendants followed through on their "promises" to Plaintiff regarding by access to its API and continuing negotiations with Plaitniff. See, e.g. q 15 (Hoemke provides Plaintiff access to API); 9 35 (Hoemke provides draft proposal regarding reseller terms); 4 39 (Fakhrai-Rad provides summary of negotiations). Further, it is not clear what, if any, representations "regarding Plaintiff being a distributer/reseller of Genophen and POML, and regarding the use of BaseHealth’s API" are alleged against each respective Individual Defendant. There are no "clear and unambiguous" promises within the SAC alleged as to each Individual Defendant which give rise to liability under promissory estoppel: "[e]stoppel cannot be established from ... preliminary discussions and negotiations," which is all the SAC alleges. Nat'l Dollar Stores v. Wagnon, 97 Cal. App. 2d 915, 919 (1950). Promises which are "amorphous" and "precatory" are not "clear and unambiguous." Ladas, 19 Cal. App. 4th at 771-72 & n.4; see also Laks v. Coast Sav. & Loan Ass'n, 60 Cal. App. 3d 885, 890-91 (1976). The allegations within the SAC are, at best, non-actionable statements of current circumstances. See Laks, 60 Cal. App. 3d at 891 (determining that a conditional commitment letter for construction financing subject to conditions and subsequent negotiations did not constitute a clear and unambiguous promise). The SAC fails to satisfy its burden of pleading the elements of its claims against each Individual Defendant, or that such promises were made outside their respective capacities as agents for BaseHealth, as the SAC merely repeats the same generic allegation of paragraph 126 for all Defendants. This is improper and legally insufficient. B. The SAC Fails to State a Claim for Tortious Interference against the Individual Defendants. Counts VI and VII within the SAC state related claims for Tortious Interference with Contractual Relations ("TICR") and Tortious Interference with Prospective Economic Advantage -8- AIHA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 ("TIEA"), respectively, but each claim fundamentally fails to set forth necessary factual support. Plaintiff's claims are defectively pled against the Individual Defendants and fail to state any plausible basis for relief. 1. Plaintiff's Tortious Interference Claims are Barred by the Statute of Limitations The respective statutes of limitations for actions for intentional interference with contractual relations and interference with prospective economic relations are each two years. CCP § 339(1); Knoell v. Petrovich (1999) 76 Cal. App.4th 164, 168; Perfect 10, Inc. v. Visa Int'l Service Ass'n (9th Cir. 2007) 494 F3d 788, 809-810 (applying California law). A claim for intentional interference with contractual relations accrues on the date of the "wrongful act," and in no event later than breach of the contract tortuously interfered with (Trembath v. Digardi (1974) 43 Cal. App.3d 834, 836) while a claim for tortious interference with prospective economic relations accrues when the interference occurs. Knoell, supra, 76 Cal. App.4th at 168 (in action alleging interference by defamation, statute began to run when defamatory statements published). "rn Plaintiff's TICR claim is based upon the allegation that Defendants’ "refusing to provide the API to Plaintiff rendered performance of the [RedBridge] Contract impossible" and Plaintiff's TIEA claim is based upon Defendants "refusing to provide Plaintiff with proof, commitment, and security of the relationship between BaseHealth and Plaintiff." The allegations within the SAC establish that Plaintiff was on inquiry notice of the facts supporting its purported tortious interference claims by at least March 2017, when "Plaintiff first learned of the abandonment of Genophen;" "Plaintiff was gravely concerned that Defendant, BaseHealth would no longer support them with customer implementation and deployment of their CDA;" and Defendant BaseHealth informed Plaintiff to cease selling API deals and "forget APL." SAC at 9 64-66. Accordingly, Plaintiff's October 2019 filing of these claims against the Individual Defendants plainly violates the two year statute. 2. The SAC Does Not Support Liability Against the Individual Defendants for Tortious Interference Beyond untimeliness, Plaintiff's tort claims improperly seek to hold officers and employees of BaseHealth liable in tort without making allegations that the Individual Defendants acted "to protect -9.- AIHA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 their own individual interests rather than those of the entity." See Mintz v. Blue Cross of California, 172 Cal. App. 4th 1594, 1604 (2009) (“corporate agents and employees acting for and on behalf of a corporation cannot be held liable for inducing a breach of the corporation's contract.”); see also Shoemaker v. Myers (1990) 52 Cal. App.3d 1, 24, 25; see also Applied Equip. Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 512, fn. 4 (agents and employees of a corporation ““cannot conspire with their corporate principal or employer where they act in their official capacities on behalf of the corporation and not as individuals for their individual advantage.’”) Moreover, the allegations within the SAC do not comprise a valid tortious interference claim against any Individual Defendant, as such claims lie against "interlopers" who wrongfully interfere with relationships in which they have no legitimate interest. A tort action for inducing breach of contract lies only against a stranger to the contract. Applied Equip. Corp., 7 Cal.4th at 513-514; PM Group, Inc. v. Stewart (2007) 154 Cal. App.4th 55, 64-65; Asahi Kasei Pharma Corp. v. Actelion Ltd. (2013) 222 Cal. App.4th 945, 964. Prospective economic partners may not sue each other for intentional interference because a defendant must intentionally interfere with plaintiff's relationship with a stranger to be subject to liability. Kasparian v. County of Los Angeles (1995) 38 Cal. App.4th 242, 266; see Redfearn v. Trader Joe's Co. (2018) 20 Cal. App.5th 989, 999-1003. 3. Plaintiff Does Not Plead a Valid TICR Claim. Plaintiff's TICR claim contends that Plaintiff entered into an "oral agreement" with third party Redbridge Insurance “for the CDA Project/ ADI" in September 2017 which was allegedly interfered with by Individual Defendants by making oral representations fo Plaintiff regarding the nature of the dealings between Plaintiff RR Health and Defendant BaseHealth. SAC 4 131-134. The SAC does not allege specific facts against each Individual Defendant necessary to plead a valid claim, which requires: "(1) a valid contract between plaintiff and a third party; (2) defendant's knowledge of this contract; (3) defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage." Pac. Gas & Elec. Co. v. Bear Stearns & Ca., 50 Cal. 3d 1118, 1126 (1990). -10 - AIHA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 Plaintiff has not alleged a "legally binding" with any third party, including RedBridge (Pacific Gas & Elec. Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126); does not allege that any Individual Defendant committed any acts designed to induce a breach or disruption of plaintiff's contract with a third party (Quelimane Co. v. Stewart Title Guar. Co. (1998) 19 Cal. 4th 26, 56); and does not allege that Individual Defendant's actions caused Plaintiff to breach its contract with any third party. (Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1148.) Plaintiff's admits that it had only “proposals to be ready to turn into agreements” with RedBridge and "could not sign a final contract with Redbridge" until a formal agreement was reached with BaseHealth. Hatf. Decl., Exh. A, Piedra Dep. 256:18-257:2, Piedra Dep. 248:15-20. These facts are corroborated at paragraph 92 of the SAC which allege that Defendant not signing a written agreement with Plaintiff was "holding up Plaintiffs agreement with Redbridge Insurance,” an allegation the Court should accept over the SAC's conclusory statement regarding the existence of any written agreement. See, e.g. Stowe, 44 Cal. 2d at 422 (specific allegations control over facts pied in general or conclusory terms). Furthermore, the SAC does not allege the specific "acts designed to induce a breach" by the Individual Defendants, and each of them, but instead only alleges that BaseHealth's decision to not indefinitely make its products available for resale prevented Plaintiff from making alleged profits on prospective third party negotiations. See, e.g. SAC § 134. These facts do not support an actionable claim against the Individual Defendants. 4. Plaintiff Cannot Establish a Claim for Tortious Interference with Economic Advantage. Plaintiff's TIEA claim is nearly identical in substance to its TICR claim - alleging Defendant "unfairly interfered with Plaintiffs right to receive the benefits of... economic relationships by refusing to provide Plaintiff with proof, commitment, and security of the relationship between BaseHealth and Plaintiff" - and is similarly defective. SAC 9 139-144. A TIEA claims contains the additional requirement of pleading "intentional acts on the part of defendant designed to disrupt" the alleged relationship. Roy Allan Slurry Seal, Inc. v. American Asphalt South, Inc. (2017) 2 Cal. 5th 505, 512. Plaintiff fails to plead and prove intentional acts by each respective Individual Defendant designed to disrupt the relationship. Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1151. The acts by which defendant “11 - AIHA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 interfered must be “independently wrongful”-i.e., wrongful by some measure beyond the fact of the interference itself. Reeves, 33 Cal.4th at 1152; see San Jose Const., Inc. v. S.B.C.C., Inc. (2007) 155 Cal. App.4th 1528, 1544-1545. Wrongful” means the conduct is forbidden by constitutional, statutory, common law, regulatory or other determinable legal standards. Korea Supply Co. v. Lockheed Martin Corp., supra, 29 Cal.App.4th at 1158-1159; Crown Imports, LLC v. Sup.Ct. (Classic Distributing & Beverage Group, Inc.) (2014) 223 Cal.App.4th 1395, 1404-1405. Importantly, this tort is not intended to punish persons or entities for their choice of commercial relationships or their pursuit of commercial objectives, unless they take action that is independently actionable. Korea Supply Co., 29 Cal.4th at 1158-1159. The allegations of the SAC do not meet this standard. See, e.g. SAC 9 139-142. C. Count VIII For Fraud-False Promise and Count IX for Fraud-Intentional Misrepresentation Plaintiff's Count VIII and IX for False Promise and Intentional Misrepresentation are identical claims which seek to hold each Individual Defendant liable in fraud for alleged promises that Defendant would "provide the necessary proof of a written reseller agreement" (SAC 9 147, False Promise) and "would enter into a written agreement with Plaintiff to document its reseller relationship." (SAC 9] 158, Intentional Misrepresentation). However, Plaintiff's allegations fail to support any valid claim for Fraud against any Individual Defendant. 1. The SAC Does Not Plead Actionable Fraud The tort of fraud (deceit) requires a misrepresentation, knowledge of falsity, intent to induce reliance, reliance, causation and resulting damages. Robinson Helicopter Co., Inc. v. Dana Corp .(2004) 34 Cal.4th 979, 990; Lazar v. Sup.Ct. (Rykoff-Sexton, Inc.) (1996) 12 Cal.4th 631, 638. As to the gravamen of the fraud claims, Plaintiff contends The Individual Defendants’ collective "promise" to enter into a contract was fraudulent. SAC 9] 147, 158. But setting aside this legal conclusion, the facts pled within the SAC do not establish any such promise but instead detail only non-actionable statements regarding the anticipated business and contractual relations between the parties. Cohen v. S & S Const. Co. (1983) 151 Cal.3d 941, 946 ("actionable misrepresentation must be one of existing fact; “predictions as to future events, or statements as to future action by some third party, are deemed -12 - AIHA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 opinions, and not actionable fraud ....” Moreover, an alleged failure to perform a promise later is not enough to show it was falsely made. 7enzer, 39 Cal.3d at 30-31-subsequent failure to perform does not warrant inference defendant did not intend to perform when promise made (disapproving contrary cases); Riverisland Cold Storage, Inc. v. Fresno-Madera Production Credit Ass'n, supra, 55 C4th at 1183 (“the intent element of promissory fraud entails more than proof of an unkept promise or mere failure of performance.") The bare allegation that Defendant BaseHealth did not follow through on an alleged "promise" to execute a written agreement (SAC 9 147, 158) is not actionable fraud, and is certainly not actionable against the Individual Defendants as agents for BaseHealth. The SAC makes no allegations of any direct contractual dealings between RR Health and the Individual Defendants in their individual capacities. 2. The SAC Does Not Plead Fraud with Specificity. The requirement that fraud must be pled with particularity serves two significant purposes: (i) to give notice to defendant with such particularity that defendant can meet the charges; and (ii) to permit the dismissal of meritless fraud claims on the basis of the pleadings. (West v. JP Morgan Chase Bank, N.A. (2013) 214 Cal. App.4th 780, 793.) Here, the SAC does not meet the heightened specificity required to allege fraud as to each of the four Individual Defendants: each claim alleges only that " BaseHealth, Arianpour, Fakhrai-Rad, Hoemke, and Menon, individually and collectively, made promises to Plaintiff... that it would provide the necessary proof of a written reseller agreement... through 2015-2017 and regarding each of the product offerings from BaseHealth." (SAC 9] 147-148, 158). The SAC does not allege, with specificity, the "how, when, where, to whom, and by what means" the alleged actionable representations were tendered by each Individual Defendant and the basis for pursuing separate fraud claims against each Individual Defendant. To survive demurrer, plaintiff must plead facts that “show how, when, where, to whom, and by what means the representations were tendered.” Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.4th 1602, 1614; Lazar v. Sup.Ct. (Rykoff-Sexton, Inc.) (1996) 12 C4th 631, 645. “It is well established that the pleading of fraud and deceit must be specific . . ..” (Hills Transp. Co. v. Southwest Forest Industries, Inc. (1968) 266 Cal.App.2d 702, 707.) In California, every element of a cause of -13 - AIHA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 action for fraud must be alleged both factually and specifically, and the policy of liberal construction of pleadings will not be invoked to sustain a defective complaint. (Cooper v. Equity Gen. Ins. Co. (1990) 219 Cal.App.3d 1252, 1262. The law requires far more than the summary of the various negotiations between the parties set forth in the SAC (see, e.g. 4 39, Defendants allegedly represent "expectation that we will have a contract secured" and 9 84 that they "are very excited to work something out together"): the law requires that Plaintiff identify with specificity the basis of its fraud claim so that Defendant may reasonably respond thereto. 3. The SAC's References to Concealment Are Legally Inadequate Plaintiff's Counts VIII and IX further contain defectively pled claims of concealment, or negative fraud, within its claims for false promise and intentional misrepresentation. See SAC 9 160 (alleging Defendants "knew Genophen and use of the API was being phased out" and "knew POML solely targeted the U.S. healthcare market.") Defendant has moved to strike these stray allegations in its concurrently filed Motion to Strike, as they are not drawn in conformity with California law. D. Count IX For Negligent Misrepresentation. The gravamen of Plaintiff's claim for Negligent Misrepresentation against the Individual Defendants is essentially identical to its intentional fraud claims (see SAC 9 158, "that [Defendant BaseHealth] would enter into a written agreement with Plaintiff to document its reseller relationship") and fails for the same reasons. Like fraud, negligent misrepresentation is statutorily defined as a form of deceit. Tenet Healthsystem Desert, Inc., 245 Cal.4th 821, 845; Charnay v. Cobert (2006) 145 Cal. App.4th 170, 184. A claim for negligent misrepresentation requires pleading a misrepresentation of fact, lack of reasonable grounds, a duty to plaintiff, intent to induce reliance, reliance, causation and harm. Majd v. Bank of America, NA (2015) 243 Cal. App.4th 1293, 130. This claim fails to provide any plausible basis for holding each of the Individual Defendants liable for alleged misrepresentations made on behalf of a third party. Where based in a fraud, as the claim is here, a claim for negligent misrepresentation is subject to the same heightened pleading requirements as fraud. Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 215-216. A plaintiff may not sidestep these requirements -14 - AIHA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 by enveloping a fraud claim with a label of negligence. Id. Here, the SAC's conclusory allegation at paragraph 169 that "BaseHealth, Arianpour, Fakhrai-Rad, Hoemke, and Menon, represented to Plaintiff throughout its relationship-2015-2017-that it would enter into a written agreement with Plaintiff to document its reseller relationship" is woefully inadequate to meet Plaintiff's pleading requirements. Beyond its pleading deficiencies, Plaintiff's Negligent Misrepresentation claim is barred by the applicable two year statute of limitations. CCP § 339(1); E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1317. A claim for negligent misrepresentation accrues upon discovery of the facts constituting the deceit. E-Fab, Inc., 153 Cal. App.4th 1308, 1318. Here, as above, Plaintiff was on inquiry notice of the facts supporting its purported tortious interference claims by at least March 2017, when "Plaintiff first learned of the abandonment of Genophen;" "Plaintiff was gravely concerned that Defendant, BaseHealth would no longer support them with customer implementation and deployment of their CDA;" and Defendant BaseHealth informed Plaintiff to cease selling API deals and "forget APL" SAC at § 64-66. Accordingly, Plaintiff's October 2019 filing of these claims against the Individual Defendants plainly violates the two year statute. VII. PLAINTIFF'S CLAIMS SHOULD BE DISMISSED WITHOUT LEAVE TO AMEND. “If there is no liability as a matter of law, leave to amend should not be granted” when sustaining a demurrer. Schonfeldt v. State of California (1998) 61 Cal. App.4th 1462, 1465. In other words, allowing leave to amend simply as a matter of routine is not warranted in the absence of some clear indication that a plaintiff can allege a viable claim. Here, as the foregoing explains, there is no plausible basis to hold any Individual Defendant liable and the majority of Plaintiff's claims are time barred. These defects cannot be cured by a subsequent pleading. As such, granting Plaintiff leave to amend is not warranted VIII. CONCLUSION For the foregoing reasons, Defendant respectfully requests that the Court dismiss the Amended Complaint in its entirety, without leave to amend. -15- AIHA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT A Pr of es si on al Co rp or at io n R e d w o o d Ci ty M A J E S K I R O P E R S 10 11 12 13 14 15 16 i 18 19 20 21 22 23 24 25 26 27 28 Dated: June 15,2020 ROPERS, MAJESKI, PC By: -16 - / TODD A. ROBERTS LITA M. VERRIER JONATHAN C.HATFIELD Attorneys for Defendants BASEHEALTH, INC., ARDY ADRIANPOUR HOSSEIN FAKHRAI- RAD, DANIEL HOEMKE, AND PRAKASH MENON AIHA NBANTS ARDY ARTANPOUR, HOSSEIN FAKHRAI-RAD, DANIEL HOEMKE, AND PRAKASH MENON'S DEMURRER TO PLAINTIFF'S SECOND AMENDED COMPLAINT