Opposition ObjectionsCal. Super. - 6th Dist.August 5, 202010 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 20CV368911 Santa Clara - Civil James C. Shah (SBN 260435) Kolin C. Tang (SBN 279834) SHEPHERD, FINKELMAN, MILLER & SHAH, LLP 201 Filbert Street, Suite 201 San Francisco, CA 94133 Telephone: (415) 429-5272 Facsimile: (866) 300-7367 Email: ishah(aDsfmslaW.com ktang@sfmslaw.com Attorneysfor Plaintiff Individually and as Representativefor the Proposed Class [Additional Counsel listed on Signature Page] Electronically Filed by Superior Court of CA, County of Santa Clara, on 3/11/2021 4:38 PM Reviewed By: R. Walker Case #20CV368911 Envelope: 6018055 SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF SANTA CLARA JESSE SCOTT, on behalf of himself and all others similarly situated, Plaintiff, VS. SANTA CLARA STADIUM AUTHORITY, Defendant. Case No.: 20CV368911 Assigned for A11 Purposes t0 Hon. Patricia M. Lucas. PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT’S DEMURRER TO AMENDED COMPLAINT AND DEFENDANTS’ MOTION TO STRIKE Hearing Date: March 24, 2021 Time: 1:30 p.m. Dept: 3 Complaint Filed: August 5, 2020 Plaintiff s MPAs in Opposition to Demurrer and Motion to Strike 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS I. INTRODUCTION ............................................................................................................... 1 II. PROCEDURAL HISTORY ................................................................................................. 1 III. STATEMENT OF RELEVANT FACTS ............................................................................ 2 III. LEGAL ARGUMENT ......................................................................................................... 3 A. Defendant’s Demurrer Should Be Overruled ........................................................................ 3 1. Legal Standard .................................................................................................................... 3 2. The Amended Complaint Should Not Be Barred Because Plaintiff Has Complied with the Government Claims Act ...............................................................................................4 3. The Amended Complaint States a Prima Facie Breach of Contract Claim ....................... 7 4. The Amended Complaint Sufficiently Pleads Breach of Contract ..................................... 8 B. Defendant’s Motion t0 Strike Should Be Denied ................................................................. 12 1. Legal Standard .................................................................................................................. 12 2. The Amended Complaint Alleges Facts to Support an Award of Fees Under Code 0f Civil Procedure, § 1021.5 Because Plaintiffs Seeks t0 Enforce a Significant Benefit Affecting the General Public ............................................................................................ 13 C. Leave t0 Amend is Appropriate to Cure Any Deficiencies in the Amended Complaint ............................................................................................................................. 14 V. CONCLUSION .................................................................................................................. 15 i Plaintiff s MPAs in Opposition t0 Demurrer and Motion t0 Strike 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Cases Alcom v. Anbm Engineering, Inc. (1970) 2 Cal.3d 493 ..................................................................................................................... 4 Armendariz v. Foundation Health Psychcare Servs., Inc. (2000) 24 Cal.4th 83 .................................................................................................................. 11 AT&TMobilily LLC v. Concepcion, (201 1) 563 U.S. 333 .................................................................................................................. 12 Baxter v. Genworth N. Am. Corp, (2017) 16 Cal.App.5th 713 ........................................................................................................ 11 Bennett v. United States Cycling Federation, (1987) 193 Cal.App.3d 1485 ....................................................................................................... 9 Chisom v. Board OfRet. ofFresno County Employees ’ Ret. ASS ’n., (2013) 218 Ca1.App.4th 400 ........................................................................................................ 8 City OfStockton v. Superior Court, (2007) 42 Cal.4th 730 ................................................................................................................ 14 Clauson v. Superior Court, (1998) 67 Cal.App.4th 1253 ...................................................................................................... 12 Coles v. Glaser, (2016) 3 Ca1.App.5th 384 ...................................................................................................... 8, 14 Concepcion, 563 U.S. at 344 .......................................................................................................................... 12 DiCampli-Mintz v. County ofSanta Clara, (2012) 55 Cal.4th 983. ................................................................................................................. 6 Discover Bank v. Superior Court, (2005) 36 Cal.4th 148 .......................................................................................................... 11, 12 Flores v. Transamerica HomeFirst, Inc. (2001) 93 Cal.App.4th 846 ........................................................................................................ 11 Frances T. v. Village Green Owners Ass ’11., (1986) 42 Cal.3d 490 ................................................................................................................... 9 ii Plaintiff s MPAs in Opposition t0 Demurrer and Motion t0 Strike 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 George v. Auto. Club ofS. Cal, (201 1) 201 Cal.App.4th 1112 ...................................................................................................... 8 Harding v. Collazo, (1986) 177 Cal.App.3d 1044 ....................................................................................................... 6 Hayter Trucking, Inc. v. Shell Western E&P, Inc. (1993) 18 Cal.App.4th 1 .............................................................................................................. 8 In re Anthem, Inc. Data Breach Litig, (ND. Cal 2016) 162 F.Supp.3d 953 ............................................................................................ 9 Ingraham v. Lyon, (1894) 105 Cal. 254 ..................................................................................................................... 4 Jackson v. SA. W. Entertainment, Ltd, (2009) 629 F. Supp. 2d 1018 ..................................................................................................... 11 Lowrjy v. Port San Luis Harbor District, (2020) 56 Cal.App.5th 211 .......................................................................................................... 6 Mandicino v. Maggard, (1989) 210 Cal.App.3d 1413 ..................................................................................................... 13 Miller v. McLaglen, (1947) 82 Cal.App.2d 219 ........................................................................................................... 4 Morris v. Redwood Empire Bancorp, (2005) 128 Cal.App.4th 1305 .................................................................................................... 10 Murphy v. Hartford Accident & Indemnity C0., (1960) 177 Cal.App.2d 539 ......................................................................................................... 9 Perdue v. Cracker Nat ’l Bank, (1985) 38 Cal.3d913 ................................................................................................................. 11 Perez v. Golden Empire Transit Dist, (2012) 209 Cal.App.4th 1228 ...................................................................................................... 4 Perry v. Robertson, (1988) 201 Cal.App.3d 333 ......................................................................................................... 7 PHII, Inc. v. Superior Court, (1995) 33 Cal.App.4th 1680 ...................................................................................................... 12 Queen Villas Homeowners Ass ’n. v. TCB Prop. Mgmt., (2007) 149 Cal.App.4th 1 ............................................................................................................ 9 iii Plaintiff s MPAs in Opposition t0 Demurrer and Motion t0 Strike 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Rakestmw v. California Physicians ’ Service, (2000) 81 Cal.App.4th 39 ............................................................................................................ 3 Saleeby v. State Bar, (1985) 39 Cal.3d 547 ................................................................................................................. 14 Savage v. State, (1970) 4 Ca1.App.3d 793 ............................................................................................................. 6 State ofCalz'fornia v. Superior Court (Bodde), (2004) 32 Ca1.4th 1234 ............................................................................................................ 4, 5 Stirlen v. Supercuts, Ina, (1997) 51 Cal.App.4th 1519 ...................................................................................................... 11 TraflicSchoolOnline, Inc. v. Clarke, (2003) 112 Cal.App.4th 736 ........................................................................................................ 6 Vernon v. Drexel Burnham & C0,, (1975) 52 Cal.App.3d 706 ......................................................................................................... 13 Walnut Producers 0f Cal. v. Diamond Foods, Ina, (2010) 187 Cal.App.4th 634 ...................................................................................................... 12 Codes Cal. Civ. Proc., § 436 .................................................................................................................... 12 Cal. Gov. Code §§ 905 .................................................................................................................... 5 Code Civ. Proc., § 430.10(g) .......................................................................................................... 7 Code CiV. Proc., § 576 .................................................................................................................. 14 Code CiV. Proc., § 1021.5 ....................................................................................................... 13, 14 GOV. Code § 91 1.2 .......................................................................................................................... 4 GOV. Code § 912.4 .......................................................................................................................... 4 iV Plaintiff s MPAs in Opposition t0 Demurrer and Motion t0 Strike 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 Plaintiff, Jesse Scott (“P1aintiff’), respectfully submits his Memorandum 0f Points and Authorities in Opposition t0 the Demurrer and Motion to Strike (“Motion”) 0f Defendant, Santa Clara Stadium Authority (“Defendant” 0r “Stadium Authority”). As set forth herein, Defendant asks this Court t0 make an extraordinary legal finding - that an entity can collect monies and not provide a corresponding contracted service With complete impunity and Without any legal recourse for the party Which complied with its contractual duties. Neither common sense nor the law permits such a result. For these reasons, as set forth more fully below, Defendant’s Demurrer should be overruled and its Motion to Strike should be denied. II. PROCEDURAL HISTORY Plaintiff filed his initial Complaint against Defendant and Legends Sales and Marketing, LLC 0n August 5, 2020. The Court entered an order Which deemed the case complex, and provided that discovery and the deadline for Defendant t0 respond t0 the original Complaint was stayed until a date certain was determined at the initial case management conference. At the December 9, 2020 case management conference, the Court ordered Defendant t0 respond to the original Complaint by January 8, 2021. See December 9, 2020 Minute Order. The Parties discussed the basis for Defendant’s demurrer, and thereafter stipulated that Plaintiff would file an Amended Complaint by January 25, 2021. See January 5, 2021 Order. Plaintiff filed his operative Amended Complaint on January 25, 2021, and 0n February 24, 2021, Defendant filed a Demurrer and a Motion t0 Strike, both of which Plaintiff opposes and responds t0 below. 1 Plaintiff s MPAs in Opposition t0 Demurrer and Motion t0 Strike 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 III. STATEMENT OF RELEVANT FACTS As fully described in the Amended Complaint, Plaintiff entered into three Stadium Builder License (“SBL”) Agreements with Defendant, Which afforded him the right and obligation t0 purchase season tickets for the home games of the National Football League’s (“NFL”) San Francisco 49ers (“49ers”) and tickets for other select events that took place at Levi’s Stadium in Santa Clara. Am. Compl. atW 12, 21, Exhibits 1 and 2 [SBL N0. 1], Exhibit 3 [SBL No. 2], Exhibit 4 [SBL No. 3]. However, given the COVID-19 pandemic and various government orders and decrees put in place t0 cope With its effects, the 49ers were not able t0 host fans at Levi’s Stadium during the 2020 NFL season. Id. at 1W 28-40. As a result, like many other NFL teams, the 49ers permitted season ticketholders t0 decide whether they wanted t0 receive a refund for payments already made 0r simply defer them until the following season. Id. at 1W 9, 14. Unlike the 49ers, Defendant opted against providing any relief for holders of SBLs, and they were expected t0 make timely payments despite the fact that they could not attend a single home game or otherwise receive any benefit from the SBL. Id. at 1H 14, 41-45. Indeed, many other NFL teams provided holders 0f SBL-equivalents with relief by deferring any payment that would have been attributable t0 seat purchases during the 2020 NFL season. Id. at 1] 15 n.8. With regard to Plaintiff specifically, he entered into three separate SBL Agreements with Defendant, and for SBL No. 1, agreed t0 pay a total 0f $40,000 for SBLs associated with two seats in Section C241 of Levi’s Stadium. Id. at 1] 22. For SBL N0. 1, Plaintiff makes annual payments 0f roughly $4,000. Id. at Exhibit 2, pages 4-5. For SBL N0. 2, Plaintiff agreed to pay a total 0f $10,000 for SBLs associated with two seats in Section 206, and as part of the financing plan, he continues to pay approximately $1,000 annually. Id. at Exhibit 3, pages 2-3. Finally, 2 Plaintiff s MPAs in Opposition t0 Demurrer and Motion t0 Strike 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 for SBL N0. 3, Plaintiff made a single lump-sum payment of $4,000 in 2015 for SBLS related t0 two seats in Section 206 of Levi’s Stadium. Id. at 11 24, Exhibit 4, page 3. The SBL Agreements remain in effect for the “Life 0f the Stadium,” but are assumed to have a life 0f 30 years. Id. at W 26-27, 43, Exhibit 2, page 10. As a result, Plaintiff contends that the value 0f his SBLS have been diminished in that 1/30th of each has been rendered entirely valueless because he was unable t0 buy 49ers season tickets for the 2020 NFL season. Id. at 1N 42-45, Exhibit 2, at page 8 (“For and in consideration of the payment 0f the License Fee, Licensee will receive the number of SBL(s) set forth in this License Agreement, each of which shall entitle Licensee t0 purchase certain tickets t0 Events held in the Stadium and 49ers Season Tickets . . . for the Life of the Stadium.”). In addition, Plaintiff seeks to represent a Class 0f similarly situated holders 0f SBLS Who entered into substantially similar SBL Agreements with Defendant. Id. atW 13, 48. Of course, all other season ticketholders have purchased SBLS in order to similarly have the right t0 purchase season tickets. Id. at 11 10. Because the SBLS helped to fund construction for Levi’s Stadium, every seat has been sold through an SBL. Id. at 11 11. Furthermore, like Plaintiff, the members 0f the Class were not provided a refund or deferral option for SBL payments, meaning that they similarly did not receive any benefit for SBL payments attributable t0 the 2020 NFL season. Id. atW 56-57. IV. LEGAL ARGUMENT A. Defendant’s Demurrer Should Be Overruled 1. Legal Standard A demurrer may only be used t0 challenge “the legal sufficiency 0f factual allegations in a complaint.” Rakestmw v. California Physicians ’ Service (2000) 81 Cal.App.4th 39, 42 3 Plaintiff s MPAs in Opposition t0 Demurrer and Motion t0 Strike 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (emphasis added). “[A] general demurrer admits the truth 0f all material factual allegations in the complaint . . . the question of plaintiff s ability t0 prove these allegations, or the possible difficulty in making such proof does not concern the [reviewing] court.” Alcom v. Anbro Engineering, Inc. (1970) 2 Cal.3d 493, 496. As the California Supreme Court has held, “[i]n the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed with a View to substantial justice between the parties.” Ingraham v. Lyon (1894) 105 Cal. 254, 257. “This rule of liberal construction means that the reviewing court draws inferences favorable to the plaintiff, not the defendant.” Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238. Thus, “[a] complaint should never be dismissed unless it appears t0 a certainty that n0 basic right of action can possibly exist 0r no relief can possibly be granted.” Miller v. McLaglen (1947) 82 Cal.App.2d 219, 228. 2. The Amended Complaint Should Not Be Barred Because Plaintiff Has Complied With the Government Claims Act Defendant’s primary contention is that, although Plaintiff has filed a timely claim, Plaintiff has not complied With Gov. Code § 91 1.2 because the Amended Complaint was filed before the claim was acted 0n by Defendant 0r deemed rejected. Demurrer at 13-15. In support of its misguided contention, Defendant relies 0n cases that are factually distinguishable from this matter. Dismissal of the Amended Complaint is not warranted because Plaintiff has complied With the Government Claims Act. The California Government Claims Act requires that a claim be presented t0 a local public agency not more than one year after the accrual 0f the cause 0f action. Cal. Gov. Code § 91 1.2. A local public agency must act on a claim Within 45 days after the claim has been presented, but if a local public agency fails or refuses to act 0n a claim within 45 days, the claim is deemed rej ected. Id. § 912.4. The purpose behind the Government Claims Act is “t0 give the 4 Plaintiff s MPAs in Opposition t0 Demurrer and Motion t0 Strike 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 [public] entity the opportunity t0 investigate and settle the claim before suit [is] brought.” State ofCalifomia v. Superior Court (Bodde) (2004) 32 Cal.4th 1234, 1244. On August 5, 2020, Plaintiff commenced this action, which unequivocally put the Stadium Authority 0n notice 0f the claims. Indeed, the Stadium Authority retained counsel in order t0 defend Plaintiff” s claims. Following a meet and confer process regarding Defendant’s anticipated demurrer to Plaintiff s original Complaint, Plaintiff provided, yet again, notice t0 the Stadium Authority on January 8, 2021, by serving a Notice of Claim letter, pursuant t0 the California Government Claims Act, Cal. GOV. Code §§ 905, et seq. Am. Compl. at 11 18, Exhibit 5; see also Declaration 0f James C. Shah attached hereto (“Shah Decl.”), at 1] 3. On January 19, 2021, Plaintiff s counsel received a call from a claim’s adjustor for the City 0f Santa Clara. Id. at 11 4. That call was returned that same week, at Which time Plaintiff’ s counsel was informed that the adjuster was aware that the matter was in litigation and that n0 further action outside 0f the litigation would be taken by the adjuster. Id. at fl 5. Thereafter, on January 25, 2021, Plaintiff filed his Amended Complaint with this Court, indicating that notice had been provided in accord With the Government Claims Act. Notably, and further demonstrating that the Stadium Authority was provided full and fair notice of the claim, 0n September 29, 2020, the City 0f Santa Clara’s Agenda Report (“Agenda Report”) indicates that this matter was tendered to the 49ers and the Stadium Authority’s insurance carriers for handling and was denied. Defendant assigned defense counsel the same day.1 Based on the totality of the circumstances, it is clear that Plaintiff” s claim was expressly rejected prior t0 the filing of the Amended Complaint. Based 0n the foregoing facts, the notice to the Stadium Authority, and the inaction 0n Plaintiff s claim prior to the filing of the Amended Complaint, it is clear that dismissal is unwarranted. Plaintiff has complied with the Government Claims Act and “satisfied the purpose behind the requirement” Which is to allow a government agency the opportunity t0 investigate lAgenda Report ofSanta Clara Stadium Authority, City 0f Santa Clara (Sept. 29, 2020), available at https://WWW.santaclaraca.gOV/home/showpublisheddocument?id=701 60. 5 Plaintiff’ s MPAs in Opposition to Demurrer and Motion t0 Strike 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 and settle claims before a lawsuit is filed. See, e.g., State ofCalifornz'a (Boda’e), supra, 32 Cal.4th 1244 (discussing various cases where premature filing of a complaint despite a timely claim did not warrant dismissal because substantial compliance With the Government Claims Act was met). Defendant relies on various cases in support of its argument that the Amended Complaint is subj ect to demurrer for failure t0 strictly comply With the Government Claims Act. Yet, the authorities which Defendant relies on are readily distinguishable from the facts of the case at issue here. In Lowry v. Port San Luis Harbor District, the plaintiff filed both an application t0 submit a late claim and his complaint 0n the same day. (2020) 56 Cal.App.5th 21 1, 219. Here, even after Plaintiff complied with the Government Claims Act, Defendant, through its adjuster, declined to handle the claim outside of the litigation - which decision pre-dated the filing of the Amended Complaint. Shah Decl. at 1W 4-5. In DiCampli-Mintz v. County ofSanta Clara, the plaintiff filed his claim with the wrong person Who was not designated t0 accept claims on behalf 0f the local public agency. (2012) 55 Cal.4th 983. The central question in DiCampli-Mintz was Whether plaintiff’ s error could still satisfy the prefiling claim requirement. (1d,) N0 such facts exist here. Defendant also relies 0n TraflicSchoolOnline, Inc. v. Clarke, but there, the plaintiff never filed a claim at all, and the issue was decided at the motion for summary judgment stage-not the pleading stage. (2003) 112 Cal.App.4th 736, 738. Here, Plaintiff filed a timely claim prior to filing the Amended Complaint. Defendant, through its adjuster, declined t0 remedy the claim outside of the instant litigation. Shah Decl. at 1] 5. Thus, t0 dismiss the Amended Complaint would be to deny the avenue for a potential remedy that Defendant has ostensibly told Plaintiff to pursue. See Savage v. State (1 970) 4 Ca1.App.3d 793, 796 (“procedural requirements should be given liberal interpretations in order not to deprive a litigant 0f his day in court because 0f technical requirements.”). T0 dismiss the Amended Complaint based upon such technicalities would also flout “the policy of the courts in 6 Plaintiff s MPAs in Opposition t0 Demurrer and Motion t0 Strike 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 California to resolve a dispute 0n the merits 0f the case rather than allowing a dismissal on technicality.” Harding v. Collazo, (1986) 177 Cal.App.3d 1044, 1061. 3. The Amended Complaint States a Prima Facie Breach Of Contract Claim With regard to Plaintiff” s breach 0f contract claim, Defendant first contends that it must fail because Plaintiff fails t0 attach the complete SBL Agreements, set out their terms verbatim, 0r adequately allege their legal effect. Demurrer at 18. This argument is meritless. As Defendant is well aware, for the three SBL Agreements into which Plaintiff entered with Defendant, he attached the executed versions. See Am. Compl. at Exhibits 1, 3, 4. While he did not attach all 0f the incorporated exhibits for each SBL Agreement, he did attach fillsome versions of the standard exhibits A-D for SBL N0. 1, and these are the same in all 0f the SBL Agreements. Id. at Exhibit 2. Indeed, Plaintiff has alleged that all of the SBL Agreements are substantially similar, but for pricing differences attributed t0 different seat selections. Id. at fl 13. Defendant’s argument here, as a drafter of the SBL Agreements at issue, is simply absurd. There is no basis here for Defendant to argue that “it cannot be ascertained form the pleading whether the contract is written, is oral, 0r is implied by conduct.” Code Civ. Proc., § 430.10(g); see also Miles v. Deutsche Bank Nat’l Trust Ca, (2015) 236 Cal.App.5th 394, 401 (“This is a purely technical argument, as defendants’ . . . motion demonstrates they knew Which contract was at issue, were in possession 0f it, and thus knew it was in writing”). Even accepting Defendant’s argument as true, “a written contract can also be pleaded by alleging the making and substance 0f the relevant terms.” Perry v. Robertson, (1988) 201 Cal.App.3d 333, 341 (finding sufficient plaintiff s allegation that “the nature of the contract [W]as one engaging defendants as agents for purposes 0f selling her residence”). Here, Defendant has all the information necessary t0 put it on notice 0f the Plaintiff” s claim, the 7 Plaintiff s MPAs in Opposition t0 Demurrer and Motion t0 Strike 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 operative SBL Agreements, and their language. Am. Compl. at 1H 12-13. Furthermore, Defendant’s contention that Plaintiff s claim is faulty because he failed to reference certain relevant terms is of no merit, especially here, where the SBL Agreements and the standard exhibits are attached to the Amended Complaint. See George v. Auto. Club ofS. Cal, (201 1) 201 Cal.App.4th 1112, 1125 (“[P]laintiffs sometimes allege breach 0f a written contract by attaching the contract as an exhibit t0 the complaint and incorporating it into the complaint Without alleging the terms 0f the contract have any special meaning. In such cases, ‘a court Will construe the language 0f the contract 0n its face t0 determine Whether, as a matter 0f law, the contract is reasonably subj ect to a construction sufficient t0 sustain a cause of action for breach.”’) (citing Hayter Trucking, Inc. v. Shell Western E&P, Inc. (1993) 18 Ca1.App.4th 1, 18). Finally, Defendant cites t0 Chisom v. Board ofRet. ofFresno County Employees ’ Ret. Ass ’n. t0 support its argument that the Court should disregard Plaintiff” s construction of the SBL Agreements. (2013) 218 Ca1.App.4th 400, 41 1. However, Plaintiff here does attempt t0 place an “erroneous construction” 0n any of the provisions 0f the SBL Agreements. Instead, Plaintiff has attached the SBL Agreements which he entered into With Defendant, and as explained below, he simply interprets the incorporated language differently and contends that the exculpatory provision relied upon by Defendant is invalid. 4. The Amended Complaint Sufficientlv Pleads Breach 0f Contract Pursuant t0 California law, “[t]he elements of a cause 0f action for breach of contract are: ‘(1) the contract, (2) plaintiff s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to plaintif .”’ Coles v. Glaser (2016) 3 Cal.App.5th 384, 391 (Citing Hamilton v. Greenwich Investors XXVI, LLC (201 1) 195 Ca1.App.4th 1602, 1614). 8 Plaintiff s MPAs in Opposition t0 Demurrer and Motion t0 Strike 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Defendant first contends that Plaintiff’ s breach of contract claim fails because he does not identify a specific provision or obligation breached. Demurrer at 16. This is a red herring. Plaintiff has alleged that Defendant failed to provide the benefit of the SBL Agreements in 2020, for which Plaintiff and members 0f the Class paid. Am. Compl. at Exhibit 2, page 8 (denoting that the License Fee is in consideration of entitlement t0 purchase tickets to 49ers home games and other events at Levi’s Stadium). Defendant believes that there is no obligation t0 offer reimbursement 0r another concession to Plaintiff and members 0f the Class Within the SBL Agreements, but at its core, Plaintiff” s breach 0f contract claim revolves around Defendant’s failure to provide the benefit (namely, the right t0 purchase tickets) of the SBL Agreements, Which it promised for the entire “Life 0f the Stadium.” Defendant did not provide this benefit, 01‘ any other like consideration, in 2020.2 Next, Defendant relies upon a contractual exculpatory provision, which it argues prevents liability “0n account 0f any cancellation 0r postponement 0r other failure 0r deficiency in the conduct of any Event/Game, including but not limited t0 any cancellation 0n account 0f any strike or other labor disturbance 0r any condition in 0r around the Stadium.” Demurrer at 17. In California, “[t]he law generally looks with disfavor on attempts to avoid liability . . .and [t]he law requires exculpatory clauses t0 be strictly construed against the party relying on them.” Queen Villas Homeowners Ass ’n. v. TCB Prop. Mgmt. (2007) 149 Cal.App.4th 1, 6 (citing 2The authorities which Defendants cite for support are entirely inapposite. See Frances T. v. Village Green Owners Ass ’n., (1986) 42 Cal.3d 490, 5 12-13 (plaintiff s claim that defendants failed t0 install additional lights could not stand because there was n0 obligation to undertake such a task); In re Anthem, Inc. Data Breach Ling, (ND. Cal 2016) 162 F.Supp.3d 953, 981 (dismissing breach of contract claim where plaintiffs failed t0 submit copy 0f purported contract 0r any information demonstrating any sort of agreement); Murphy v. Hartford Accident & Indemnity C0., (1960) 177 Cal.App.2d 539, 543 (considering whether a purported agreement was written for purposes of determining the appropriate statute of limitations). 9 Plaintiff s MPAs in Opposition t0 Demurrer and Motion t0 Strike 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Philippine Airlines, Inc. v. McDonnell Douglas Corp. (1987) 189 Ca1.App.3d 234, 237); see also Bennett v. United States Cycling Federation (1987) 193 Cal.App.3d 1485, 1490 (“courts have strictly construed the terms 0f exculpatory clauses against the defendant who is usually the draftsman” (internal citations omitted)). The entirety of the relevant exculpatory provision reads as follows: Licensor will not be liablefor, and Licensee will not assert any deduction, set ofi’ 0r claim ofany nature against Licensorfor, any act 0r omission ofor any breach 0r default by any Stadium Party 0r concessionaire. Licensee Will be bound by the terms and conditions established from time t0 time by each Stadium Party for cancellation or postponement of any Event/Game. Licensor will have no responsibility 0r liability t0 Licensee 0n account of any cancellation 0r postponement or other failure or deficiency in the conduct of any Event/Game, including but not limited t0 any cancellation 0n account 0f any strike or other labor disturbance or any condition in 0r around the Stadium. Am. Compl. at Exhibit 2, page 12 (emphasis added) (referred to as the “Exculpatory Provision”). Defendant contends that the Exculpatory Provision relieves it 0f any potential liability in this action. However, for the below reasons, the Exculpatory Provision is clearly unconscionable and should be stricken from the SBL Agreements. Am. Compl. at Exhibit 2, page 15 (Section 13(g) of Exhibit C to SBL Agreements provides that any provision deemed t0 be in Violation 0f any law shall be deemed removed from the remainder 0f the contract). The Exculpatory Provision Is Unconscionable. Under California law, a court determines whether a contract 0r provision thereof is unconscionable by assessing (1) Whether the contract is one of adhesion and (2) whether “(a) the contract term was outside of ‘the reasonable expectations of the [weaker] part[y],’ 0r (b) was ‘unduly oppressive or 1 0 Plaintiff s MPAs in Opposition t0 Demurrer and Motion t0 Strike 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 unconscionable.”’ Morris v. Redwood Empire Bancorp (2005) 128 Cal.App.4th 1305, 13 17 (citing Graham v. Scissor-Tail, Inc. (1981) 28 Cal.3d 807).3 With regard to the first prong, the SBL Agreements here are undoubtedly contracts of adhesion. See Baxter v. Genworth N. Am. Corp. (2017) 16 Ca1.App.5th 713, 723 (“‘The term [contract 0f adhesion] signifies a standardized contract, Which, imposed and drafted by the party 0f superior bargaining strength, relegates to the subscribing party only the opportunity to adhere t0 the contract 0r reject it”) (citing Armendariz v. Foundation Health Psychcare Servs., Inc. (2000) 24 Ca1.4th 83, 113.4 Here, the SBL Agreements are required in order t0 become a season ticket holder for the 49ers, and Plaintiff has alleged that they are standardized agreements imposed upon on SBL holders. Am. Compl. atW 11-13. As it relates to the second prong, the Exculpatory Provision is unduly oppressive and substantively unconscionable. The Exculpatory Provision provides that Defendant Will not be liable for “any act or omission 0f or any breach 0r default.” Id. at Exhibit 2, page 12. Essentially, the SBL Agreements absolve Defendant 0f any and all liability which may arise under the contract. California courts have, not surprisingly, routinely held that contract provisions are unconscionable when they “are, in essence, exculpatory clauses-i.e., When they operate to insulate a party from liability 0r when they make it very difficult for those injured by unlawful conduct t0 pursue a legal remedy.” Jackson v. S.A. W. Entertainment, Ltd. (2009) 629 3California courts have also utilized a separate test, Which Views unconscionability as having “procedural” and “substantive” elements, both 0f which must be met for a contract provision to be deemed unconscionable. Morris, supra, 128 Cal.App.4th at 13 17. The California Supreme Court has used both analytical approaches, declaring them compatible, and advising that “[b]0th pathways should lead to the same result.” Perdue v. Cracker Nat’l Bank (1985) 38 Ca1.3d 913, 925 n.9. 4“A finding 0f a contract of adhesion is essentially a finding 0f procedural unconscionability.” Flores v. Transamerica HomeFirsz‘, Inc. (2001) 93 Cal.App.4th 846, 853; see also Stirlen v. Supercuts, Inc. (1 997) 51 Cal.App.4th 15 1 9, 1533-34. 1 1 Plaintiff s MPAs in Opposition t0 Demurrer and Motion t0 Strike 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 F. Supp. 2d 1018, 1025; see also Discover Bank v. Superior Court (2005) 36 Cal.4th 148, 161 (“Such one-sided, exculpatory contracts in a contract 0f adhesion, at least to the extent they operate t0 insulate a party from liability that otherwise would be imposed under California law, are generally unconscionable.”) (abrogated onfedemlpreemption grounds byAT&TM0bilily LLC v. Concepcion (201 1) 563 U.S. 333); see also Walnut Producers ofCal. v. Diamond Foods, Inc. (2010) 187 Ca1.App.4th 634, 650 (exculpatory effect 0f contractual provision is grounds for a finding 0f substantive unconscionability”)). It is true that these cases were decided in the context 0f class action waivers, but the courts found the provision unconscionable because although “not, in the abstract, exculpatory clauses,” they operated as such under the circumstances 0f class actions for individually small sums of money. Discover Bank, supra, 36 Cal.4th at 161.5 Here, there is no need to anticipate the effect 0f the Exculpatory Provision; it clearly states that Defendant cannot be held liable under any circumstances. Am. Compl. at Exhibit 2, page 12. As a result, the entire Exculpatory Provision should be severed from the SBL Agreements, and Plaintiff’ s breach 0f contract claim should proceed. B. Defendant’s Motion t0 Strike Should Be Denied 1. Legal Standard It is true that California courts may strike out any irrelevant, false, 0r improper matter in a pleading. Cal. CiV. Proc., § 436. The Court must consider only information from the face of the complaint and matters properly subject t0 judicial notice. Cal. CiV. Proc., § 437. However, courts should sparingly strike allegations, and motions to strike should not be used as procedural 5M0reover, Discover Bank and its progeny were overruled based the Supreme Court’s holding that a blanket rule that class arbitration waivers are unconscionable interfered With the Federal Arbitration Act. Concepcion, supra, 563 U.S. at 344. This does not affect Discover Bank’s and other courts’ recognition that exculpatory clauses that aim t0 insulate the drafters, who are in a significantly stronger bargaining position, from liability. 12 Plaintiff s MPAs in Opposition t0 Demurrer and Motion t0 Strike 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 “line item vetoes” for a defendant. PHII, Inc. v. Superior Court (1995) 33 Ca1.App.4th 1680, 1683. Furthermore, courts must presume the allegations of the operative complaint are true and must consider allegations in context. Clauson v. Superior Court (1998) 67 Ca1.App.4th 1253, 1255. 2. The Amended Complaint Alleges Facts t0 Support an Award of Fees Under Code 0f Civil Procedure, § 1021.5 Because Plaintiffs Seeks to Enforce a Significant Benefit Affecting the General Public Here, Defendant claims that Plaintiff is not entitled to attorney fees under Code CiV. Proc., § 1021.5. Defendant mischaracterizes and trivializes Plaintiff s breach of contract claim by claiming that Plaintiff is only seeking t0 vindicate the pecuniary interests of himself and the putative class. Defendant fails to recognize that by seeking t0 enforce his contractual rights, Plaintiff also seeks t0 enforce a significant benefit affecting the general public-ensuring that government entities comply with their contractual obligations. Contrary t0 Defendant’s assertions, the Amended Complaint alleges facts sufficient t0 support an award 0f attorney fees under Code Civ. Proc., § 1021.5. “In deciding Whether t0 award attorney fees under the statute, a trial court should determine realistically the significance 0f the benefit, and the size 0f the class receiving the benefit, in light of all pertinent circumstances.” Mandicino v. Maggard (1989) 210 Ca1.App.3d 1413, 1417. Plaintiff’s suit seeks t0 confer an important right upon the general public or a large class 0f persons. Moreover, section 1021 .5 does not preclude Plaintiff from seeking t0 enforce a significant benefit merely because the benefit is pecuniary. See Code CiV. Proc., § 1021.5 (“[u]p0n motion, a court may award attorneys’ fees t0 a successful party . . . in any action Which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whetherpecuniary 0r nonpecuniary, has been conferred on the general public 0r a large class 0fpersons”) (emphasis added). 1 3 Plaintiff s MPAs in Opposition t0 Demurrer and Motion t0 Strike 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Enforcement of valid contracts is a significant benefit that affects the general public. See Vernon v. Drexel Burnham & C0. (1975) 52 Ca1.App.3d 706, 716 (“there is perhaps no higher public policy than t0 uphold and give effect t0 contracts validly entered into and legally permissible in subj ect matter.”). “The sanctity of valid contractual agreements in a free society . . . is 0f paramount importance and is rooted in both the United States and California Constitutions.” Id. However, important rights are not solely constitutional rights and courts have discretion in determining the societal importance 0f rights. See Saleeby v. State Bar (1985) 39 Cal.3d 547, 573. Specifically, Plaintiff entered into legally binding contracts with Defendant-a public body-to purchase season tickets for games and events at Levi’s Stadium, a public property. Am Comp]. atW 2 1 -22. Defendant failed t0 refund Plaintiff” s payments under the contracts and was damaged as a result. Id. at 1H] 42, 45. Based on these facts, Plaintiff sufficiently alleged a valid claim for breach 0f contract. Coles, supra, 2.Cal.App.5th at 391 (“The elements 0f a cause 0f action for breach of contract are: (1) the contract, (2) plaintiff’ s performance 0r excuse for nonperformance; (3) defendant’s breach, and (4) the resulting damages to plaintiff”) (internal citations omitted). By seeking t0 enforce the contracts with Defendant, Plaintiff confers a significant benefit on the general public by ensuring that government entities comply with their contractual obligations. Accordingly, the Amended Complaint sufficiently alleged an award 0f attorney fees under Code CiV. Proc., § 1021.5 and the Court should not strike Plaintiff” s request. C. Leave to Amend is Appropriate t0 Cure Any Deficiencies in the Amended Complaint “Any judge . . . in the furtherance ofjustice . . . may allow the amendment of any pleading.” Code Civ. Proc., § 576. Furthermore, “leave t0 amend is liberally allowed as a matter 0f fairness unless the complaint shows on its fact that it is incapable of amendment.” City 14 Plaintiff s MPAs in Opposition t0 Demurrer and Motion t0 Strike 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ofStockton v. Superior Court (2007) 42 Cal.4th 730, 747; AngieM v. Superior Court (1995) 37 Cal.App.4th 1217, 1227 (“[l]iberality in permitting amendment is the rule, if a fair opportunity to correct any defect has not been given”). Should the Court find Plaintiff’ s Amended Complaint deficient in any respect, Plaintiff requests that the Court grant leave to file a further amended complaint. V. CONCLUSION For the foregoing reasons, Plaintiff respectfully requests that the Court overrule Defendant’s demurrer and deny Defendant’s Motion. Dated: March 11, 2021 Respectfully submitted, SHEPHERD, FINKELMAN, MILLER & SHAH, LLP James C. Shah (SBN 260435) Kolin C. Tang (SBN 279834) 201 Filbert Street, Suite 201 San Francisco, CA 94133 Telephone: (415) 429-5272 Facsimile: (866) 300-7367 Email: ishah@sfmslaw.com ktang@sfmslaw.com John F. Edgar EDGAR LAW FIRM, LLC 2600 Grand B1Vd., Suite 400 Kansas City, Missouri 64108 Telephone: (816) 53 1-0033 Facsimile: (816) 53 1-3322 Email: ife@edgarlawfirm.com Michael P. Ols (admittedpro hac vice) SHEPHERD, FINKELMAN, MILLER & SHAH, LLP 1845 Walnut Street, Suite 806 Philadelphia, PA 19103 Telephone: (610) 891-9880 1 5 Plaintiff s MPAs in Opposition to Demurrer and Motion to Strike 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Facsimile: (866) 300-7367 Email: mols@sfmslaw.com Attorneysfor Plaintiffand the Class 1 6 Plaintiff s MPAs in Opposition to Demurrer and Motion to Strike
