Defendant Lorenzettis Reply Iso Motion For Judgment On The Pleadings

Reply

Cal. Super. - 4th Dist.September 29, 2017

RUTAN & TUCKER, LLP Stephen A. Ellis (State Bar No. 119704) sellis@rutan.com Steven J. Goon (State Bar No. 171993) sgoon(@rutan.com Samantha L. Goates (State Bar No. 310610) sgoates@rutan.com 611 Anton Boulevard, Suite 1400 Costa Mesa, California 92626-1931 Telephone: 714-641-5100 Facsimile: 714-546-9035 ELECTROMICALLY FILED Superior Court of Califarnia, County of Orange 10/24/2018 at 02:17:00 PM Clerk of the Superior Court By & Clerk, Deputy Clerk Attorneys for Defendants Kevin Coleman and Robert Lorenzetti and Defendant/Cross-Complainant Net Development Company SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF ORANGE, CENTRAL JUSTICE CENTER BRUCE ORR, an individual, Plaintiff, VS. KEVIN COLEMAN, an individual, ROBERT LORENZETTI, an individual; NET DEVELOPMENT COMPANY, a California corporation; and DOES 1 through 20, Defendants. NET DEVELOPMENT COMPANY, a California corporation Cross-Complainant, VS. BRUCE ORR, an individual, and ROES 1 through 10, inclusive, Cross-Defendants. 2686/017604-0072 129911251 al0/24/18 Case No. 30-2017-00947178-CU-CO-CIC Assigned to Hon. Frederick P. Horn Dept. C64 DEFENDANT ROBERT LORENZETTI’S REPLY IN SUPPORT OF HIS MOTION FOR JUDGMENT ON THE PLEADINGS; DECLARATION OF STEVEN J. GOON IN SUPPORT THEREOF Date: Time: Dept.: October 31, 2018 1:30 p.m. C64 Date Action Filed: Trial Date: September 29, 2017 January 28, 2019 10 11 12 13 14 15 16 7 18 19 20 21 22 23 24 25 26 27 28 I. INTRODUCTION. Defendant Robert Lorenzetti (“Lorenzetti”) files this Reply in support of his Motion for Judgment on the Pleadings (“Motion”), seeking the dismissal of the fourth cause of action (unjust enrichment), fifth cause of action (fraud), sixth cause of action (constructive fraud), seventh cause of action (negligent misrepresentation), eighth cause of action (intentional interference with | prospective advantage), ninth cause of action (negligent interference with prospective advantage), and tenth cause of action (negligence) in Plaintiff Bruce Orr’s (“Plaintiff”) Complaint. Each of those claims fails to state facts sufficient to constitute a cause of action against Lorenzetti. Plaintiff filed no Opposition in response to the Motion. Instead, Plaintiff served - without first requesting leave of court - Lorenzetti with a First Amended Complaint (“FAC”) and a Notice of Election to File First Amended Complaint in Response to Defendant Lorenzetti’s Motion for Judgment on the Pleadings (“Notice of Election to File FAC”), purporting to take the Motion’s hearing off calendar pursuant to California Code of Civil Procedure section 472. This is procedurally improper. Plaintiff's FAC does not fall under the purview of section 472 because Lorenzetti filed his Answer to Plaintiff’s Complaint nearly a year ago. (Code Civ. Proc. § 472(a) [“A party may amend its pleading once without leave of the court af any time before the answer, demurrer, or motion to strike is filed . . . .”].) Thus, Plaintiff's Notice of Election to File FAC is an insufficient response to the Motion, and the Motion is therefore unopposed. As such, and for the reasons set forth in Lorenzetti’s Motion, this Court should dismiss Plaintiff’s claims against Lorenzetti and enter a Judgement of Dismissal in his favor. Moreover, even if Plaintiff’s Notice of Election to File FAC can be construed as a request under Code of Civil Procedure section 473 to file an amended pleading (it should not be), the Court should deny Plaintiff’s request. Requests to amend pleadings should be denied where (like here) the new amendments would prove futile, (see, e.g., Tucker v. Pac Bell Mobile Servs. (2012) 208 Cal. App.4th 201, 211), and Plaintiff, who holds the burden of proof, cannot demonstrate otherwise. (Foundation for Taxpayer & Consumer Rights v. Nextel Communications, Inc. (2006) 143 Cal. App.4th 131, 135 [“[T]he plaintiff has the burden of demonstrating that ‘there is a reasonable possibility the plaintiff could cure the defect with amendment.”].) As explained in full 2686/017604-0072 12991125.1 a10/24/18 -2- 10 11 12 13 14 15 16 17 18 19 20 21 2d 23 24 25 26 27 28 below, Plaintiff’s purported FAC fails to fix the pleading deficiencies outlined in the Motion. Therefore, Lorenzetti respectfully requests the Court grant the Motion in its entirety and deny Plaintiff's purported request to file an amended pleading. II. PLAINTIFE’S FAILURE TO OPPOSE THE MOTION JUSTIFIES DISMISSING THE COMPLAINT’S CAUSES OF ACTION AGAINST LORENZETTI. Plaintiff failed to timely file an Opposition to the Motion. (Declaration of Steven J. Goon [“Goon Decl.”], 4.) As such, and for the reasons set forth in Lorenzetti’s Motion, this Court should dismiss Lorenzetti from this action because (1) Plaintiff’s causes of action against Lorenzetti (i.e., the Complaint’s fourth, fifth, sixth, seventh, eighth, ninth, and tenth claims) are insufficiently pled, and/or (2) Plaintiff’s causes of action against Lorenzetti fail to state valid claims against Lorenzetti. III. PLAINTIFF CANNOT FILE AN AMENDED COMPLAINT AS A MATTER OF RIGHT. Instead of filing an Opposition to the Motion, Plaintiff served Lorenzetti with the proposed FAC and Notice of Election to File FAC, purporting to take this Motion off calendar under the guise of California Code of Civil Procedure section 472. (Goon Decl., § 5, Exs. B, C, D.) This is procedurally improper. Code of Civil Procedure section 472(a) states: A party may amend its pleading once without leave of the court at any time before the answer, demurrer, or motion to strike is filed, or after a demurrer or motion to strike is filed but before the demurrer or motion to strike is heard if the amended pleading is filed and served no later than the date for filing an opposition to the demurrer or motion to strike. A party may amend the pleading after the date for filing an opposition to the demurrer or motion to strike, upon stipulation by the parties. (Code Civ. Proc. § 472(a) [emphasis added].) This brief window to file an amended complaint without leave of court has long since passed in this case. Indeed, Lorenzetti’s Answer to the Complaint was filed on December 20, 2017. (Goon Decl., § 3, Ex. A.) In fact, this Motion was filed pursuant to Code of Civil Procedure section 438(c)(3)(B)(11) 2686/017604-0072 12991125.1 210/24/18 -3- 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 and common law as a motion for judgment on the pleadings. Plaintiff cites to no case law-and Lorenzetti could find none-that permits Plaintiff to file an amended complaint as a matter of right and without leave of court in response to Lorenzetti’s Motion. (See, Code Civ. Proc. § 438(h)(1) [“The motion provided for in this section may be granted with or without leave to file an amended complaint. . ..”].) IV. PLAINTIFF FAILS TO JUSTIFY HIS REQUEST TO AMEND HIS COMPLAINT. To the extent Plaintiff's Notice of Election to File FAC can be construed as a request under Code of Civil Procedure section 473 to file an amended pleading (it should not be), the Court should deny the request. Section 473 states in pertinent part: “The court may, in furtherance of Justice, and on any terms as may be proper, allow a party to amend any pleading . ...” (Code Civ. Proc. § 473(a)(1).) While California courts typically follow a general rule of liberality in allowing amendments, (Nestle v. Santa Monica (1972) 6 Cal.3d 920, 939), this liberality does not apply where the new amendments are futile. (See, e.g., Tucker v. Pac Bell Mobile Servs. (2012) 208 Cal.App.4th 201, 211 [“Leave to amend should not be granted where amendment would be futile.”].) Indeed, where a “proposed amendment fails to state a cause of action, it is proper to deny leave to amend.” (Foxborough v. Van Atta (1994) 26 Cal.App.4th 217, 230 [citing Witkin, Cal. Procedure (3d ed. 1985) Pleading, § 1125, p.541]; see, also, Cal. Cas. Gen. Ins. Co. v. Superior Court (1985) 173 Cal.App.3d 274, 280-81 [disapproved on other grounds in Kransco v. Am. Empire Surplus Lines Ins. Co. (2000) 23 Cal.4th 390, 407].) Plaintiff alone bears the burden of demonstrating that amending his Complaint would cure the pleading defects. (Foundation for Taxpayer & Consumer Rights v. Nextel Communications, Inc. (2006) 143 Cal.App.4th 131, 135 [“[ T]he plaintiff has the burden of demonstrating that ‘there 29% is a reasonable possibility the plaintiff could cure the defect with amendment.’”]; see, also, Blank v. Kirwan (1985) 39 Cal.3d 311, 318 [“The burden of proving such reasonable possibility is squarely on the plaintiff.”].) In response to the Motion, Plaintiff’s proposed FAC (1) removed Lorenzetti from Plaintiff’s causes of action for fraud, constructive fraud, negligent misrepresentation, and negligence; (2) kept causes of action for unjust enrichment, intentional interference with 2686/017604-0072 12991125.1 al0/24/18 -4- 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 prospective advantage, and negligent interference against Lorenzetti; and (3) added new causes of action for inducing breach of contract and intentional interference with contractual relations against Lorenzetti. Because Plaintiff's proposed FAC fails to fix the numerous pleading deficiencies outlined in the Motion, and because Plaintiff’s new causes of action against Lorenzetti also fail as a matter of law, Plaintiff’s request (if any) to file the FAC should be denied. A. Unjust Enrichment. Plaintiffs proposed FAC does not even begin to fix the issues with his unjust enrichment claim. As fully set forth in the Motion, Plaintiff’s unjust enrichment claim fails as a matter of law because it is not a legally recognized cause of action, (Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th 779, 794), and even if it were, Plaintiff’s allegations demonstrate (at best) that the purported benefits he provided for which he seeks to recover were provided pursuant to the contract with (and as a result of representations made by) the developer defendants (Kevin Coleman and Net Development Company)! - not Lorenzetti. (See, Complaint, Y 25, 27, 28, 57.) Plaintiff’s proposed FAC does nothing to fix these deficiencies. (See, Proposed FAC, 19 25, 27, 28, 57.)* Indeed, Plaintiff continues to fail to allege what benefit (if any) he provided to Lorenzetti. (Maglicav. Maglica (1998) 66 Cal. App.4th 442, 450 [“The idea that one must be benefited by the goods and services is thus integral to recovery in quantum meruit; hence courts have always required that the plaintiff have bestowed some benefit on the defendant as a prerequisite to recovery.”].) Permitting the proposed amendment to Plaintiff’s unjust enrichment claim would thus prove futile. B. Intentional And Negligent Interference With Prospective Advantage. Plaintiff likewise fails to properly allege causes of action for intentional and negligent interference with prospective advantage in the proposed FAC. As explained fully in the Motion, Lorenzetti, as an alleged agent/employee of the other defendants (i.e., Coleman and Net Development), cannot be liable for interference as a matter of law. (Kasparian v. County of Los "Hereinafter referred to as “Coleman” and “Net Development.” 2 For the Court’s convenience, a redlined copy of the FAC is attached to the Declaration of Steven J. Goon, demonstrating all of the purported changes Plaintiff wishes to make to the Complaint. (Goon Decl., § 6, Ex. E.) 2686/017604-0072 12991125.1 a10/24/18 -5- 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Angeles (1995) 38 Cal. App.4th 242, 262-66 [party to prospective economic relationship cannot be liable for tort of interference with that relationship]; Asahi Kasei Pharma Corp. v. Actelion Ltd. (2013) 222 Cal. App.4th 945, 963-64 [corporate agents and employees acting for and on behalf of their principal cannot be liable for interference with prospective economic advantage].) Moreover, even if a claim for interference could be alleged - contrary to law - Plaintiff must allege Lorenzetti’s “acts of interference” were independently wrongful beyond the fact of the interference itself, a required element of a claim for interference with prospective economic advantage. (Della Penna v. Toyota Motor Sales, U.S. A., Inc. (1995) 11 Cal.4th 376, 393.) Plaintiffs FAC fails to include any new allegations that fix these pleading obstacles. Indeed, the FAC still alleges that Lorenzetti was a “principal, agent, servant, [and] employee” of Coleman and Net Development, and still alleges that Lorenzetti interfered with Plaintiff’s relationship with Coleman and Net Development. (FAC, 917, 97, 108.) For that reason alone, Plaintiff's claims for intentional and negligent interference with prospective advantage still fail as a matter of law. (See, supra, Asahi Kasei, 222 Cal.App.4th at 963-64.) Additionally, Plaintiff's FAC fails to include any allegations demonstrating Lorenzetti’s alleged “act of interference” was independently wrongful beyond the act of interference itself. (See, supra, Della Penna, 11 Cal.4th at 393.) While the FAC includes new allegations that Lorenzetti “acted wrongfully in utilizing Plaintiff's work product, including financial documents Plaintiff prepared using information methods and models that were proprietary and owned exclusively by Plaintiff,” (FAC, qq 100, 110), the FAC fails to explain how these acts (even if they did happen) interfered with Plaintiff's relationship with Coleman and Net Development. In fact, the FAC makes clear that Plaintiff’s contractual relationship (if any) with Coleman and Net Development was disrupted by Coleman alone.? (FAC, 34.) | In sum, allowing Plaintiff to amend his causes of action for intentional and negligent > Plaintiff also curiously seeks to both (1) recover monetary damages for the time, effort, and “work product, including financial documents Plaintiff prepared” under the theory that he was contractually obligated to provide these things in exchange for monetary reimbursement; and (2) recover unjust enrichment for the defendants’ unfair use of Plaintiff’s work product. But Plaintiff cannot have it both ways-he was either contractually obligated to provide his time, effort, and work product (in which case the defendants had the right to use Plaintiff’s work product) or he was not. 2686/017604-0072 12991125.1 a10/24/18 -6- 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 interference with prospective advantage would prove futile. Cc. Inducing Breach Of Contract And Intentional Interference With Contractual Relations, Plaintiff’s new causes of action alleged in the FAC for inducing breach of contract and We intentional interference with contractual relations fair no better.* It is well-settled that ““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.” (Asahi Kasei, supra, 222 Cal. App.4th at 967 [quoting Mintz v. Blue Cross of California (2009) 172 Cal.App.4th 1594, 1604].) Indeed, employees and agents “cannot be held liable for interfering with its principal’s contract.” (Mintz, supra, 172 Cal. App.4th at 1604-06.) Plaintiff, however, continues to allege that Lorenzetti was a “principal, agent, servant, [and] employee” of Coleman and Net Development, and continues to allege that Lorenzetti interfered with Plaintiff's relationship with Coleman and Net Development. (FAC, 997, 82,90.) Thus, the FAC’s inclusion of the new causes of action for inducing breach of contract and intentional interference with contractual relationship would prove futile. V. CONCLUSION. For the foregoing reasons, Lorenzetti’s Motion should be granted in its entirety and Plaintiff should be precluded from filing the FAC. 4 “The elements which a plaintiff must plead to state the cause of action for intentional interference with contractual relations are (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.” (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1129.) 2686/017604-0072 . 12991125.1 10/24/18 == Dated: October 24, 2018 2686/017604-0072 12991125.1 al0/24/18 RUTAN & TUCKER, LLP STEPHEN A. ELLIS STEVEN J. GOON 7 3 § { \ - L Te \ “STEVENT. GOON Attorneys for Defendants Kevin Coleman and Robert Lorenzetti and Defendant/Cross-Complainant Net Development By: | 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECLARATION OF STEVEN J. GOON I, Steven J. Goon, declare as follows: 1. I am a partner with the law firm of Rutan & Tucker, LLP, counsel of record for defendants Kevin Coleman and Robert Lorenzetti and Defendant/Cross-Complainant Net Development in this action. I make this declaration in support of defendant Robert Lorenzetti’s (“Mr. Lorenzetti”) Reply in support of the Motion for Judgment on the Pleadings (“Motion”). 1 am a member in good standing of the State Bar of California. I have personal knowledge of the facts set forth in this Declaration and, if called as a witness, could and would testify competently to such facts under oath. 2 I am one of the primary attorneys representing Mr. Lorenzetti in this action. I am also one of the attorneys handling the day-to-day administration of this matter, including but not limited to reviewing and preparing pleadings and discovery. Accordingly, I am familiar with all aspects of this file, including the status of this action. 3. On December 20, 2017, my office filed Mr. Lorenzetti’s Answer to Plaintiff Bruce Orr’s (“Plaintiff”) Complaint. A true and correct copy of Mr. Lorenzetti’s Answer is attached hereto as Exhibit A. 4, On September 18, 2018, my office filed the Motion on behalf of Mr. Lorenzetti. To date, my office has not received any opposition to the Motion from Plaintiff. S. On October 18, 2018, I received an email from Plaintiff's counsel, Charles Hokanson, with two attachments entitled: (1) Plaintiff’s Notice of Election to File First Amended Complaint in Response to Defendant Lorenzetti’s Motion for Judgment on the Pleadings (“Notice of Election to File FAC”); and (2) Plaintiff’s First Amended Complaint (“FAC”). True and correct copies of Mr. Hokanson’s October 18, 2018 email, the Notice of Election to File FAC, and the FAC are attached hereto as Exhibit B, Exhibit C, and Exhibit D, respectively. Il Il Il Il] 2686/017604-0072 12991125.1 a10/24/18 -9- co NN A Oo 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 6. Attached as Exhibit E is a true and correct copy of a word document prepared by my office, which redlines the differences between Plaintiffs original Complaint and the FAC (Exhibit D). I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on October 24, 2018, at Costa Mesa, Califo Steven J. Goon-- oi” ~ 2686/017604-0072 129911251 a10/24/18 -10- EXHIBIT A 28 Rutan & Tucker, LLP attorneys at law ELECTROHICALLY FILED Superior Court of California, County of Orange RUTAN & TUCKER, LLP 12/20/2017 at 04:51:00 Pi Stephen A. Ellis (State Bar No. 119704) Clerk of the Superior Court sellis@rutan.com By ‘icky Huang, Deputy Clerk 611 Anton Boulevard, Suite 1400 Costa Mesa, California 92626-1931 Telephone: 714-641-5100 Facsimile: 714-546-9035 Attorneys for Defendants Kevin Coleman; Robert Lorenzetti, and Net Development Company SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF ORANGE, CENTRAL JUSTICE CENTER BRUCE ORR, an individual, Case No. 30-2017-00947178-CU-CO-CJC Plaintiff, Assigned to Hon. Frederick P. Horn Dept. C31 Vs. DEFENDANTS KEVIN COLEMAN, KEVIN COLEMAN, an individual, ROBERT LORENZETTI AND NET ROBERT LORENZETTI, an individual; DEVELOPMENT COMPANY’S NET DEVELOPMENT COMPANY, a ANSWER TO COMPLAINT California corporation; and DOES 1 through 20, Date Action Filed: September 29, 2017 Defendants. Trial Date: Unassigned Defendants KEVIN COLEMAN, an individual, ROBERT LORENZETTI, an individual and NET DEVELOPMENT COMPANY, a California corporation (hereinafter “Defendants”), for themselves and no other defendants, respond to plaintiff’s Complaint as follows: GENERAL DENIAL Pursuant to the provisions of Code of Civil Procedure section 431.30, these answering defendants generally and specifically deny each and every allegation contained in the Complaint, and the whole thereof, and specifically denies that plaintiff has been damaged in the manner or sums alleged, or in any manner or sum at all, or is entitled to the relief -1- 130/017604-0072 DEFENDANTS KEVIN COLEMAN, ROBERT LORENZETTI AND NET 11791131.1 a12/20/17 DEVELOPMENT COMPANY'S ANSWER TO COMPLAINT 9 10 11 12 13 14 15 16 17 18 19 20 FA 22 23 24 25 26 27 28 Rutan & Tucker, LLP attorneys at law requested, or any relief whatsoever, from or against these answering defendants. FIRST AFFIRMATIVE DEFENSE (Failure to State a Cause of Action) The Complaint and each purported cause of action contained therein fails to state facts sufficient to constitute a cause of action against these answering defendants. SECOND AFFIRMATIVE DEFENSE (Mitigation of Damages) Plaintiff was under a duty and could have through the exercise of reasonable care mitigated the amount of damages alleged to have been suffered in connection with the claims set forth in the Complaint, but plaintiff failed, neglected and refused to undertake reasonable efforts to mitigate his alleged damages. Any damages which may have been sustained or will be sustained, and any recovery by plaintiff must be diminished and/or barred by reason of plaintiff’s failure to mitigate. THIRD AFFIRMATIVE DEFENSE (Failure of Consideration) To the extent there is any merit to plaintiff’s claims, which defendants deny, plaintiff’s claims are barred by failure of consideration, as there was no consideration or value provided by plaintiff for the supposed contractual rights and interests asserted by plaintiff in the Complaint. No promises were made to plaintiff, and plaintiff was unable to perform or provide any viable source(s) of funding or any material for purposes of attracting investors or establishing funding for the proposed project. FOURTH AFFIRMATIVE DEFENSE (Unclean Hands) As to each and every purported claim for relief contained in the Complaint, plaintiff by reason of his own conduct is barred from the relief sought, or any relief whatsoever, based on the doctrine of unclean hands. OL 430/017604-0072 DEFENDANTS KEVIN COLEMAN, ROBERT LORENZETTI AND NET 11791131.1 al2/20/17 DEVELOPMENT COMPANY'S ANSWER TO COMPLAINT 28 Rutan & Tucker, LLP attorneys af law FIFTH AFFIRMATIVE DEFENSE (Statute of Limitations) Plaintiff is barred from recovery herein pursuant to the applicable statute of limitations including, but not limited to, Code of Civil Procedure sections 337, 338, 339, 340 and 343. SIXTH AFFIRMATIVE DEFENSE (Unjust Enrichment) Plaintiff would be unjustly enriched if he prevailed on his Complaint and any of the causes of action therein, in part because there was no compensation or value provided by plaintiff for the obligations and supposed interests now asserted by plaintiff in the Complaint. No promises were made to plaintiff, and plaintiff was unable to perform or provide any viable source(s) of funding or any material for purposes of attracting investors or establishing funding for the proposed project, and granting plaintiff relief would result in an unfair windfall. SEVENTH AFFIRMATIVE DEFENSE (Laches) Plaintiff has delayed an unreasonable period of time in bringing suit and in pursuing his alleged claims after full knowledge of all facts and circumstances giving rise to the alleged claims in this action, and the delay has been and is prejudicial to defendants, such that plaintiff is guilty of laches so as to bar any recovery herein. EIGHTH AFFIRMATIVE DEFENSE (Acts of Third Parties) If plaintiff suffered or sustained any loss, injury, damage or detriment, the same was directly and proximately caused and contributed to by the breach, conduct, acts, omissions, activities, carelessness, recklessness, negligence, and/or intentional misconduct of third parties; and not by these answering defendants. I -3- 430/017604-0072 DEFENDANTS KEVIN COLEMAN, ROBERT LORENZETTI AND NET 11791131.1 al2/20/17 DEVELOPMENT COMPANY'S ANSWER TO COMPLAINT 28 Rutan & Tucker, LLP attorneys at law NINTH AFFIRMATIVE DEFENSE (Plaintiff's Own Conduct) If plaintiff suffered or sustained any loss, injury, damage or detriment, the same was directly and proximately caused and contributed to by the breach, conduct, acts, omissions, activities, recklessness, negligence or intentional misconduct of plaintiff himself, and not by these answering defendants. TENTH AFFIRMATIVE DEFENSE (No Duty) Plaintiff's Tenth Cause of Action for Negligence fails because defendants did not owe any duty of care to plaintiff based on the facts and circumstances alleged in the Complaint. ELEVENTH AFFIRMATIVE DEFENSE (Offset) As a result of plaintiff’s own wrongful conduct, defendants have been damaged in an amount according to proof, and said damages represent an offset against any damages or other sums alleged to be owed to plaintiff. TWELFTH AFFIRMATIVE DEFENSE (Misrepresentation) Plaintiff substantially and materially misrepresented his prior experience, contacts, success and ability in real property development projects, as well as his existing involvement in said projects, upon which certain defendants detrimentally relied, and therefore plaintiff's claims and causes of action herein are barred by fraud and misrepresentation. THIRTEENTH AFFIRMATIVE DEFENSE (Estoppel) Plaintiff's claims are barred as a result of plaintiff’s own representations and courses of conduct, upon with these answering defendants relied to their detriment, thereby barring plaintiff’s claims under the doctrine of estoppel. [1] . 4- 300017600072 DEFENDANTS KEVIN COLEMAN, ROBERT LORENZETTI AND NET 117911311 812720117 DEVELOPMENT COMPANY’S ANSWER TO COMPLAINT c o NN oO 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Rutan & Tucker, LLP attorneys at law FOURTEENTH AFFIRMATIVE DEFENSE (Lack of Real Estate Broker's License) These answering defendants are informed and believe and thereon allege that the Complaint, and each and every purported cause of action therein, is barred because plaintiff is seeking compensation for activities that required appropriate licensure through the California Department of Real Estate, as set forth in, inter alia, Business & Professions Code sections 10131, er seq. Plaintiff was not and is not licensed as a real estate broker in California during the relevant time in question and is barred from seeking recovery herein as a result, FIFTEENTH AFFIRMATIVE DEFENSE (Prior Material Breach and/or Misconduct) The Complaint, and each and every purported cause of action contained therein, is barred by reason of plaintiff’s own prior material breaches of duty, intentional misconduct and/or negligence. Among other things, defendants are informed and believe and thereon allege that plaintiff actively interfered in defendants’ business interests and development opportunities, divulged sensitive and confidential information to hostile actors, seeking to disrupt the operations thereof, conspired with and induced third parties to usurp potential business opportunities, and otherwise sought to disrupt the management and operation of the business. As a result of plaintiff’s own breaches and malfeasance, defendants have been damaged and plaintiff’s claims must be reduced or eliminated as a result. SIXTEENTH AFFIRMATIVE DEFENSE (Statute of Frauds) Defendants deny entering into any binding agreement with plaintiff for development of a hotel project as plaintiff alleges, and defendants allege that plaintiff was paid in full for the value of any work or services he may have provided. Defendants allege that plaintiff’s claims herein are based on a wish wrapped in a hope and are founded in speculation and not any legal obligation. To the extent plaintiff claims a binding agreement of some kind, defendants allege that any such agreement was required to be in writing under California -5- 430/017604-0072 DEFENDANTS KEVIN COLEMAN, ROBERT LORENZETTI AND NET 11791131.1 12/20/17 DEVELOPMENT COMPANY'S ANSWER TO COMPLAINT n ~~ O N W n 28 Rutan & Tucker, LLP attorneys at law law, including without limitation Civil Code section 1624, and plaintiff's claims herein fail for lack of the writing required by the statute of frauds. WHEREFORE, these answering defendants pray for relief as follows: 1. That the Complaint be dismissed and that plaintiff take nothing by way of any cause of action contained therein; Z. For costs of suit incurred herein, including attorneys’ fees, if any, as may be allowed by law; and 3, For such other and further relief as the Court deems just and proper. Dated: December 20, 2017 RUTAN & TUCKER, LLP STEPHEN A. ELLIS Foeram® Attorneys for Defendants Kevin Coleman; Robert Lorenzetti, Net Development Company -6- 430/017604-0072 DEFENDANTS KEVIN COLEMAN, ROBERT LORENZETTI AND NET 11791131.1 al12/20/17 DEVELOPMENT COMPANY'S ANSWER TO COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 29 26 27 28 PROOF OF SERVICE (Orr v, Coleman) STATE OF CALIFORNIA, COUNTY OF ORANGE I am employed by the law office of Rutan & Tucker, LLP in the County of Orange, State of California. Iam over the age of 18 and not a party to the within action. My business address is 611 Anton Boulevard, Suite 1400, Costa Mesa, California 92626-1931. My electronic notification address is tfontes@rutan.com. On December 20, 2017, I served on the interested parties in said action the within: DEFENDANTS KEVIN COLEMAN, ROBERT LORENZETTI AND NET DEVELOPMENT COMPANY'S ANSWER TO COMPLAINT as stated below: Charles W. Hokanson Law Offices of Charles Hokanson 140 Linden Ave., Suite 283 Long Beach, CA 90802 cwhokanson@towerlawcenter.com Facsimile No.: 562-318-3696 (BY MAIL) by placing a true copy thereof in sealed envelope(s) addressed as shown above. : In the course of my employment with Rutan & Tucker, LLP, I have, through first-hand personal observation, become readily familiar with Rutan & Tucker, LLP’s practice of collection and processing correspondence for mailing with the United States Postal Service. Under that practice, I deposited such envelope(s) in an out-box for collection by other personnel of Rutan & Tucker, LLP, and for ultimate posting and placement with the U.S. Postal Service on that same day in the ordinary course of business. If the customary business practices of Rutan & Tucker, LLP with regard to collection and processing of correspondence and mailing were followed, and I am confident that they were, such envelope(s) were posted and placed in the United States mail at Costa Mesa, California, that same date, I am aware that on motion of party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit. (BY E-MAIL) by transmitting a true copy of the foregoing document(s) to the e-mail address set forth above. Executed on December 20, 2017, at Costa Mesa, California. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. \ 0 Nad NPI NEY Theresa Fontes TAA AAA SY (Type or print name) (Signature) 430/017604-0072 11510892.1 a10/12/17 EXHIBIT B Goates, Samantha From: cwhokanson@towerlawcenter.com Sent: Thursday, October 18, 2018 4:15 PM To: Ellis, Steve; Goon, Steve; Goates, Samantha Subject: Orr v. Coleman; Response to motion to dismiss. Attachments: 18 1018 Notice of Election to file FAC.pdf; 18 1018 first amended complaint.pdf Please see attached. Charles W. Hokanson Ocean Law Center, PC 444 WN. Ocean Blvd, Ste 1401 Long Beach, CA 90802 562.316.1476 EXHIBIT C Charles W. Hokanson (State Bar No. 163662) Law Offices of Charles Hokanson 4401 Atlantic Ave, Suite 200 Long Beach, California 90807 Telephone: 562.316.1476 Facsimile: 562.318.3696 Attorney for Plaintiff Bruce Orr IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF ORANGE BRUCE ORR, an individual, Plaintiff, Vs. KEVIN COLEMAN, an individual; ROBERT LORENZETTI, an individual; NET DEVELOPMENT COMPANY, a California corporation; and DOES 1 through 20, Defendants. And Related Cross-Action Case No. 30-2017-00947178-CU-CO-CJC Plaintiff's First Amended Complaint For: 1) Breach of Contract; 2) Promissory Estoppel; 3) Breach of Covenant of Good Faith and Fair Dealing; 4) Unjust Enrichment; 5) Fraud, 6) Constructive Fraud; 7) Negligent Misrepresentation; 8) Inducing Breach of Contract; 9) Intentional Interference With Contractual Relations; 10) Intentional Interference With Prospective Advantage; and 11) Negligent Interference With Prospective Advantage. PLAINTIFF'S FIRST AMENDED COMPLAINT Plaintiff Bruce Orr, for his First Amended Complaint in this matter, alleges as follows: THE PARTIES 1. Plaintiff Bruce Orr is an individual over the age of 18, who is now, and at all relevant times has been, a resident of the State of California and a professional in the field of real estate development. Zs Defendant Kevin Coleman is an individual over the age of 18, who is now, and at all relevant times has been, a resident of the State of California and a professional in the field of real estate development. 3. Defendant Net Development Company is now and at all relevant times has been a corporation duly organized and existing under the laws of the state of California with its principal place of business in Costa Mesa, Orange County, California. 4, Defendant Coleman is believed to be the sole shareholder of Defendant Net Development Company. Defendant Coleman pursues his business of development of real property and construction through his corporation, Defendant Net Development Company. Indeed, upon information and belief, Defendant Net Development Company is now, and has at all relevant times been, used by Defendant Coleman as a mere shell, instrumentality, and conduit through which he can and does carry out his business. Further, a unity of interest exists, and at all times mentioned herein has existed, between Defendants Coleman and Net 2 PLAINTIFF'S FIRST AMENDED COMPLAINT 10 1 12 13 14 5 16 17 18 19 20 21 99 23 24 25 26 27 28 Development Company such that any individuality or separateness between the two does not exist or has ceased such that one is the alter ego of the other. 5. Defendant Robert Lorenzetti is an individual over the age of 18 who is now, and at all relevant times has been, a resident of the State of California and a professional in the field of accounting and financial matters related to real estate development. 6. The true names and capacities, whether individual, corporate, associate or otherwise, of defendants DOES 1 through 25, inclusive, are unknown to Plaintiff who therefore sues such Defendants by such fictitious names pursuant to Code of Civil Procedure Section 474. Plaintiff alleges that each such fictitiously named defendant is in some manner responsible for the acts, occurrences and damages set forth in this complaint. Plaintiff will amend this complaint, if necessary, to show these defendants’ true names and capacities when they have been ascertained. “Defendants” as used in this complaint includes all named defendants and all DOE defendants, collectively. 7 Plaintiff is informed and believes, and on such basis alleges, that at all times mentioned herein, each of the defendants, whether or not specifically named, was a principal, agent, servant, employee, co-conspirator, joint venturer and/or alter ego of each of the other defendants, and was at all times acting within the course and scope of such relationship when committing the acts alleged in this complaint. 3 PLAINTIFF'S FIRST AMENDED COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 29 26 27 28 JURISDICTION AND VENUE 8. This Court has subject matter jurisdiction over this action because the amount in controversy exceeds $25,000 and involves a dispute over conduct occurring within the State of California and contracts entered into within the state of California. 9. Further, venue is proper in this district of the Superior Court of the State of California for the County of Orange because all specifically named defendants reside or do business within the County of Orange and the agreements upon which certain causes of action are based were entered into within the County of Orange. FACTS COMMON TO ALL CAUSES OF ACTION 10. Defendants Coleman and Net Development Company are now, and at all relevant times have been, in the business of developing real estate, as well as designing and construction of real property improvements. 11. Plaintiff worked with Defendants Coleman and Net Development Company on several development projects beginning in 2010. 12. During the course of their relationship, at some point in 2012, Defendant Coleman apparently became aware of a parcel of land available for development located near the 210 Freeway and Azusa Avenue in the City of Azusa, California (hereinafter, “The Azusa Property”). 4 PLAINTIFF'S FIRST AMENDED COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13. Defendant Coleman was aware the Plaintiff had particular expertise and experience with developing hotel properties and that he had contacts within the hospitality field. Defendant Coleman thus asked Plaintiff if a hotel would be a good use of The Azusa Property. 14. After considerable research, analysis and preparation of appropriate projections, Plaintiff believed that a hotel could be built successfully on The Azusa Property. 15. Defendant Coleman represented to Plaintiff that, if he got involved in the project and worked with Defendants Coleman and Net Development Company, they would pursue a construction project for The Azusa Property together as partners and that he would be compensated as a partner upon completion of the project. 16. Thereafter, Defendant Coleman, for himself and on behalf of Defendant Net Development Company, and Plaintiff (at Defendant Coleman’s request) met with officials from the City of Azusa, including the Azusa City Manager and Development Director to discuss development of The Azusa Property. 17. The City of Azusa was initially reluctant to have the property developed as a hotel and restaurant project. However, during a series of meetings between Defendant Coleman, Plaintiff and Azusa officials, Defendant Coleman and Plaintiff explained the benefits of a hotel and restaurant use at the property and further discussed his research showing that a hotel and restaurant would be a 5 PLAINTIFF'S FIRST AMENDED COMPLAINT 10 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 feasible, profitable and appropriate use of The Azusa Property. Ultimately, because of Plaintiff's work and assistance with the presentation, the city approved of the development of The Azusa Property for a hotel, as well as a restaurant. 18. Plaintiff also approached his contacts in the hospitality and restaurant industry to gain their interest in the ultimate development of The Azusa Property. He sought out their advice on the best type of hotel for the project and their requirements for the design of a hotel and restaurant at the Azusa Property. Plaintiff then adjusted the plans in accordance with the feedback and opinions he received to ensure that the project would appeal to appropriate tenants. 19. Additionally, Plaintiff made plans and contacted prospective tenants that might be interested in additional development of an adjacent property that was then occupied by a service station. Plaintiff had substantial conversations, on behalf of the partnership with Defendants Coleman and Net Development Company, with the owner of the land that was occupied by the service station, ultimately convincing him of the benefits and desirability of such a development. 20. Throughout this process, Plaintiff regularly consulted with Defendant Coleman, presented him with updated plans and projections for the site, and obtained his agreement to continue with the process of preparing for a hotel and restaurant development of The Azusa Property. All of this was also done in reliance upon Defendant Coleman's representations that Plaintiff was a partner in the development of the properties. 6 PLAINTIFF'S FIRST AMENDED COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 21. Plaintiff also contacted potential investors to fund the development of The Azusa Property and presented such potential investors with his feasibility and profitability analyses for the development of property. 22. Plaintiff was successful in attracting investors, including one that not only put up deposits for land acquisition and initial costs of the project, but also agreed in principle to fund the entire development project. 23. Atsome point thereafter, Defendant Coleman brought in another consultant, Defendant Lorenzetti, to assist with locating investors for the development of The Azusa Property and to supplant Plaintiff's role in the project and the partnership. Defendant Lorenzetti was given all of the analyses and projections that Plaintiff had developed for The fms Property and Plaintiff assisted him with preparation of presentations to be made to potential investors. 24. Thereafter, Defendant Coleman and Defendant Lorenzetti met with the investor who had been brought in by Plaintiff, but without Plaintiff present, and drove that investor away for reasons unknown to Plaintiff. 25. From the beginning and throughout the process, including after hiring Defendant Lorenzetti, Defendant Coleman represented to Plaintiff and others that Plaintiff was a partner in the project, essential to its success and would be compensated as a partner upon completion of development of The Azusa Property. In fact, Defendant Coleman assured Plaintiff, individually and in the presence of 7 PLAINTIFF'S FIRST AMENDED COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 29 26 27 28 others, that Plaintiff was more important to the project at The Azusa Property than anyone else, including the architects, engineers, contractors and even Defendant Lorenzetti. 26. However, after the arrival of Defendant Lorenzetti, Defendant Coleman began ostracizing Plaintiff from the project. Defendant Coleman even started directly negotiating with another potential investor that Plaintiff had brought to the project. 27. At some point thereafter, Defendant Coleman told Plaintiff that he would no longer consider Plaintiff to be a partner in the project, but nonetheless assured him that he would be fully compensated for his efforts and work on the project and that he would provide Plaintiff with a written agreement providing for that compensation. Defendant Coleman also represented that Plaintiff would be compensated by at least a payment of $300,000.00 from the proceeds received from the sale of the restaurant site, a monthly fee, and 10% to 15% of the profits from the remainder project. 28. Based upon Defendant Coleman’s reassurances of full and appropriate compensation, Plaintiff continued to work on the project. 29. However, and although Plaintiff had prepared documents setting out the terms of Defendant Coleman's promises and delivered them to Defendant Coleman, Defendant Coleman never executed the writings provided to him or prepared a written contract himself. 8 PLAINTIFF'S FIRST AMENDED COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 30. Instead, in October 2015, Defendant Coleman told Plaintiff that he had directed a local law firm to prepare a formal written contract consistent with his previous promises and to deliver it to Plaintiff for his execution. No such contract was ever provided. 31. Thus, in late October 2015, Plaintiff directed that Defendants Coleman and Lorenzetti both cease using Plaintiff's work product, including the financial documents and feasibility studies that he prepared using information and methods that were proprietary and owned exclusively by Plaintiff, as well as the contacts he had brought to the project. 32. Defendants simply ignored Plaintiff's directions. They continued to use all of his work product and pursued agreements with contacts that Plaintiff had supplied to them. 33. Still, Defendant Coleman continued thereafter to confirm and represent to Plaintiff and others that Plaintiff would be compensated fully and appropriately, and in an amount that was at least consistent with Defendant Coleman's prior representations. 34, Then, extraordinarily, Defendant Coleman informed Plaintiff that he would not be compensated for the years of work and effort that he contributed to The Azusa Project and that, instead, Defendant Coleman would just forgive repayment of a series of loans that he made to Plaintiff (in the amount of $30,000.00) even though it was obvious that such amount did not begin to 9 PLAINTIFF'S FIRST AMENDED COMPLAINT compensate Plaintiff for the work he completed or the risk he took in pursuing the successful development of The Azusa Project. 35. The Azusa Project has been substantially completed. Upon information and belief, the real property that was a part of the project has been sold and Defendants have obtained substantial profits from the development and sale of the project. FIRST CAUSE OF ACTION (For Breach of Contract Against Defendants Coleman and Net Development Company and DOES 1-10) 36. Plaintiff repeats and realleges each and every allegation of fact set forth in paragraphs 1 through 35 above, and incorporates them by reference as though fully set forth herein. 37. Plaintiff and Defendant Coleman, individually and on behalf of Net Development Company and DOES 1 -10, orally agreed to work together as joint venture partners to develop and construct improvements at The Azusa Project for their mutual profit. 38. For years, Plaintiff devoted his time and efforts to pursuit of the parties’ contract and the development of The Azusa Project with Defendants Coleman, Net Development Company and DOES 1-10. 39. Defendants Coleman and Net Development Company and DOES 1-10 readily accepted Plaintiff's performance in pursuit of The Azusa Project for several years, without any issue or complaint, and with the understanding that Plaintiff's 10 PLAINTIFF'S FIRST AMENDED COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 Z1 22 23 24 25 26 27 28 performance was undertaken with the expectation of sharing in the profits of the development. Indeed, Plaintiff's continued performance was specifically invited and required by Defendants Coleman, Net Development Company and DOES 1-10. 40. Asaresult, even if the oral agreement between Plaintiff and Defendants Coleman, Net Development Company and DOES 1-10 were in some manner unenforceable, a binding and enforceable legal contract exists that is implied from the parties’ conduct. 41. Plaintiff has performed all obligations to Defendants Coleman, Net Development Company and DOES 1-10 required under the parties’ agreement, except those that he was prevented or excused from performing by them. 42. Defendants Coleman, Net Development Company and DOES 1-10 breached the parties’ agreements by, among other things, failing to compensate Plaintiff as required by the parties’ agreements. 43, Plaintiff has been damaged by the breaches of Defendants Coleman, Net Development Company and DOES 1-10 in an amount that is not presently ascertainable, but which certainly exceeds $500,000.00. If necessary, Plaintiff will update and amend this complaint to allege a more certain amount after pursuing appropriate discovery in this matter. I1 PLAINTIFF'S FIRST AMENDED COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 2 28 SECOND CAUSE OF ACTION (For Promissory Estoppel Against Defendants Coleman, Net Development Company and DOES 1-10) 44, Plaintiff repeats and realleges each and every allegation of fact set forth in paragraphs 1 through 35 above, and incorporates them by reference as though fully set forth herein. 45. Defendants Coleman, Net Development Company and DOES 1-10 made one or more clear and unambiguous promises to Plaintiff that if he assisted them with the development of The Azusa Property, he would be a partner in the project and entitled to compensation as a partner upon the completion and sale of the property - and they repeated that promise or promises over many months. 46. Plaintiff relied upon the promises of Defendants Coleman, Net Development Company and DOES 1-10 by devoting his time and efforts to pursuit of the development of The Azusa Project with them. 47. Atall relevant times, Defendants Coleman, Net Development Company and DOES 1-10 knew and could foresee that Plaintiff was relying on their promises in performing his own obligations. 48. As such, injustice can be avoided in this matter only by enforcement of the promises of Defendants Coleman, Net Development Company and DOES 1-10. 49, Plaintiff has been injured by the failure of Defendants Coleman, Net Development Company and DOES 1-10 to honor their promises. Indeed, Plaintiff has been damaged in an amount that is not presently ascertainable, but which 12 PLAINTIFF'S FIRST AMENDED COMPLAINT 10 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 certainly exceeds $500,000.00. If necessary, Plaintiff will update and amend this complaint to allege a more certain amount after pursuing appropriate discovery in this matter. THIRD CAUSE OF ACTION (For Breach of Covenant of Good Faith and Fair Dealing Against Defendants Coleman, Net Development Company and DOES 1-10) 50. Plaintiff repeats and realleges each and every allegation of fact set forth in paragraphs 1 through 35 above, and incorporates them by reference as though fully set forth herein. 51. Plaintiff and Defendant Coleman, individually and on behalf of Net Development Company and DOES 1-10, had an agreement to work together to develop and construct improvements at The Azusa Project for their mutual profit. 52. Implied within the parties’ agreement is an implied promise of good faith and fair dealing that requires each party to refrain from any conduct that unreasonably interferes with the rights of the other parties to receive the benefits of the agreement. 53. Plaintiff has performed all, or substantially all, of the things required of him by the parties’ agreements, except for those obligations that have been excused or prevented from performing by Defendants Coleman, Net Development Company and DOES 1-10. Moreover, all other conditions or events required for Defendants Coleman, Net Development Company and DOES 1-10 to compensate. Plaintiff as required have occurred or are legally excused. 13 PLAINTIFF'S FIRST AMENDED COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 54. Nevertheless, Defendants Coleman, Net Development Company and DOES 1-10 have unfairly refused to pay Plaintiff the amounts to be paid to him, as well as other benefits due under the parties’ agreements. 55. Plaintiff has been injured by the failure of Defendants Coleman, Net Development Company and DOES 1-10 to honor their promises. Indeed, Plaintiff has been damaged in an amount that is not presently ascertainable, but which certainly exceeds $500,000.00. If necessary, Plaintiff will update and amend this complaint to allege a more certain amount after pursuing appropriate discovery in this matter. FOURTH CAUSE OF ACTION (For Unjust Enrichment Against All Defendants) 56. Plaintiff repeats and realleges each and every allegation of fact set forth in paragraphs 1 through 35 above, and incorporates them by reference as though fully set forth herein. 57. Plaintiff expended substantial time, energy and effort in pursuing the development of The Azusa Property, as set forth above, including but not limited to preparing research, plans, analyses and preparation of appropriate projections, as well as by providing contacts for prospective tenants. 58. Defendants accepted and used the materials and results of Plaintiff's efforts for The Azusa Project. 59. Plaintiff thus conferred a substantial benefit upon Defendants, for which Defendant has not been paid. 14 PLAINTIFF'S FIRST AMENDED COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 60. Defendants have been unjustly enriched by their retention of these benefits and amounts that were to be paid to Plaintiff. It would be inequitable and unjust for Defendants to continue to retain those funds and benefits. 61. Accordingly, Defendants should be required to divest and divulge the value of all benefits conferred upon them by which they have been unjustly enriched in an amount to be proven at trial, but which certainly exceeds $500,000.00. FIFTH CAUSE OF ACTION (For Fraud Against Defendants Coleman and Net Development Company and DOES 1-10) 62. Plaintiff repeats and realleges each and every allegation of fact set forth in paragraphs 1 through 35 above, and incorporates them by reference as though fully set forth herein. 63. Defendant Coleman, individually and on behalf of Net Development Company, promised to compensate Plaintiff for the value of his efforts to develop and construct improvements at The Azusa Project for their mutual profit. Those Defendants later repeated such promises many times though and including at least the year 2016. 64. Further, Defendants promised not to use for any purpose the research, information, plans, analyses and projections that Plaintiff prepared for The Azusa Project. 15 PLAINTIFF'S FIRST AMENDED COMPLAINT 10 11 12 13 14 15 16 17 19 20 21 22 23 24 25 26 27 28 65. Upon information and belief, those promises were in fact false and made without any intention of performing them. In fact, further upon information and belief, those promises were intended to defraud Plaintiff and to induce Plaintiff to rely upon such promises to his detriment. 66. For years, and in justifiable reliance on the misrepresentations of Defendants Coleman and Net Development Company, Plaintiff devoted his time and efforts to pursuit of the development of The Azusa Project. Plaintiff did so without being aware of their true intention to not perform their promises. 67. Plaintiff has been injured by the failure of Defendants Coleman and Net Development Company to honor their promises. Indeed, Plaintiff has been damaged in an amount that is not presently ascertainable, but which certainly exceeds $500,000.00. If necessary, Plaintiff will update and amend this complaint to allege a more certain amount after pursuing appropriate discovery in this matter. 68. Defendants Coleman and Net Development Company each performed the acts described above with oppression and malice and with the intent to defraud Plaintiff. Each acted willfully and in conscious disregard for the rights of Plaintiff. As such, Defendants should each be subject to an award of punitive damages, to punish and make an example of each of them. 16 PLAINTIFF'S FIRST AMENDED COMPLAINT 10 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SIXTH CAUSE OF ACTION (For Constructive Fraud Against Defendants Coleman and Net Development Company and DOES 1-10) 69. Plaintiff repeats and realleges each and every allegation of fact set forth in paragraphs 1 through 35 above, and incorporates them by reference as though fully set forth herein. 70. As partners and joint venturers in the development of The Azusa Property, Defendants Coleman and Net Development Company were in trusting and confidential relationships with Plaintiff. 71. Defendants Coleman and Net Development Company violated their duties of trust and confidence by, among other things, failing to honor and consider Plaintiff's interests in the successful development of The Azusa Property and by cutting him out of the development. 72. For years, and in justifiable reliance on these Defendants’ misrepresentations, Plaintiff devoted his time and efforts to pursuit of the development of The Azusa Project. Plaintiff did so without being aware of their true intention to not perform their promises. 73. Plaintiff has been injured by the failure of Defendants Coleman and Net Development Company to honor their promises. Indeed, Plaintiff has been damaged in an amount that is not presently ascertainable, but which certainly exceeds $500,000.00. If necessary, Plaintiff will update and amend this complaint 17 PLAINTIFF'S FIRST AMENDED COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 p.9) 23 24 25 26 27 28 to allege a more certain amount after pursuing appropriate discovery in this matter. SEVENTH CAUSE OF ACTION (For Negligent Misrepresentation Against Defendants Coleman and Net Development Company and DOES 1-10) 74. Plaintiff repeats and realleges each and every allegation of fact set forth in paragraphs 1 through 35 above, and incorporates them by reference as though fully set forth herein. 75. Defendant Coleman, individually and on behalf of Net Development Company, promised that Plaintiff would be compensated for the value of his efforts to develop and construct improvements at The Azusa Project, and that his work would be respected, for their mutual profit. 76. Upon information and belief, those promises were in fact false and made without any intention of performing them. In fact, further upon information and belief, those promises were intended to defraud Plaintiff and to induce Plaintiff to rely upon such promises to his detriment. 77. For years, and in justifiable reliance on these Defendants’ misrepresentations, Plaintiff devoted his time and efforts to pursuit of the development of The Azusa Project. 78. Plaintiff has been injured by Defendants’ failure to honor their promises. Indeed, Plaintiff has been damaged in an amount that is not presently ascertainable, but which certainly exceeds $500,000.00. If necessary, Plaintiff 18 PLAINTIFF'S FIRST AMENDED COMPLAINT will update and amend this complaint to allege a more certain amount after pursuing appropriate discovery in this matter. EIGHTH CAUSE OF ACTION (For Inducing Breach of Contract Against Defendant Lorenzetti and DOES 10-20) 79. Plaintiff repeats and realleges each and every allegation of fact set forth in paragraphs 1 through 45 above, and incorporates them by reference as though fully set forth herein. 80. Atall relevant times, Plaintiff had a valid and existing contract with Defendants Coleman, Net Development Company and DOES 1-10 by which they agreed to act for their mutual benefit and develop the Azusa Property. 81. Atall relevant times, Defendant Lorenzetti and DOES 10-20 were aware of the contract between Plaintiff and Defendants Coleman, Net Development Company and DOES 1-10 for the development of the Azusa Property. 82. Nonetheless, Defendants Lorenzetti and DOES 10-20 intentionally induced Defendants Coleman, Net Development Company and DOES 1-10 to breach their contract with Plaintiff. 83. Alternatively, Defendants Lorenzetti and DOES 10-20 knew that his conduct would disrupt performance of the contract between Plaintiff and Defendants Coleman, Net Development Company and DOES 1-10 or that such disruption was substantially certain to occur. 19 PLAINTIFF'S FIRST AMENDED COMPLAINT 84. As aresult of the conduct of Defendants Lorenzetti and DOES 10-20, Defendants Coleman, Net Development Company and DOES 1-10 breached their contracts with Plaintiff. 85. The conduct of Defendants Lorenzetti and DOES 10-20 caused, or was at least a substantial factor in causing Plaintiff's damages, which damages are in an amount that is not presently ascertainable, but which certainly exceeds $500,000.00. If necessary, Plaintiff will update and amend this complaint to allege a more certain amount after pursuing appropriate discovery in this matter. 86. Defendant Lorenzetti and DOES 10-20 each performed the acts described above with oppression and malice and with the intent to defraud Plaintiff. Each acted willfully and in conscious disregard for the rights of Plaintiff. As such, each such Defendant should each be subject to an award of punitive damages, to punish and make an example of each of them. NINTH CAUSE OF ACTION (For Intentional Interference With Contractual Relations Against Defendant Lorenzetti and DOES 10-20) 87. Plaintiff repeats and realleges each and every allegation of fact set forth in paragraphs 1 through 45 above, and incorporates them by reference as though fully set forth herein. 88. Plaintiff has a valid and existing contract with Defendants Coleman, Net Development Company and DOES 1-10 for the development of the Azusa Property. 20 PLAINTIFF'S FIRST AMENDED COMPLAINT 10 1 12 13 14 15 16 17 19 20 21 22 23 24 25 26 27 28 89. Atall relevant times, Defendant Lorenzetti and DOES 10-20 were aware of the contract between Plaintiff and Defendants Coleman, Net Development Company and DOES 1-10 for the development of the Azusa Property. 90. Nonetheless, Defendants Lorenzetti and DOES 10-20 intentionally interfered with that contract by, among other things, preventing Plaintiff's performance of his agreements with Defendants Coleman, Net Development Company and DOES 1-10; utilizing Plaintiff's work product, including financial documents Plaintiff prepared using information and methods that were proprietary and owned exclusively by Plaintiff; and other intentional acts designed to induce a breach or disruption of the contract between Plaintiff and Defendants Coleman, Net Development Company and DOES 10-20; 91. Alternatively, Defendants Lorenzetti and DOES 10-20 knew that his conduct would disrupt performance of the contract between Plaintiff and Defendants Coleman, Net Development Company and DOES 1-10 or that such disruption was substantially certain to occur. 92. Asa result of the conduct of Defendants Lorenzetti and DOES 10-20, Defendants Coleman, Net Development Company and DOES 1-10 breached their contracts with Plaintiff. 93. The conduct of Defendants Lorenzetti and DOES 10-20 caused, or was at least a substantial factor in causing Plaintiff's damages, which damages are in an amount that is not presently ascertainable, but which certainly exceeds 21 PLAINTIFF'S FIRST AMENDED COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 $500,000.00. If necessary, Plaintiff will update and amend this complaint to allege a more certain amount after pursuing appropriate discovery in this matter. 94. Defendant Lorenzetti and DOES 10-20 each performed the acts described above with oppression and malice and with the intent to defraud Plaintiff. Each acted willfully and in conscious disregard for the rights of Plaintiff. As such, sech such Defendant should each be subject to an award of punitive damages, to punish and make an example of each of them. TENTH CAUSE OF ACTION (For Intentional Interference With Prospective Advantage Against Defendant Lorenzetti and DOES 10-20) 95. Plaintiff repeats and realleges each and every allegation of fact set forth in paragraphs 1 through 35 above, and incorporates them by reference as though fully set forth herein. 96. Plaintiff and Defendants Coleman, Net Development, and Does 1-10 were in an economic relationship that likely to result in an economic benefit to Plaintiff. 97. Upon information and belief, Defendant Lorenzetti and DOES 10-20 intentionally interfered with the economic relationship between him and Defendants Coleman, Net Development Company and DOES 1-10 that was substantially likely to have resulted in an economic benefit to Plaintiff. 98. Defendant Lorenzetti and DOES 10-20 knew of that relationship and of the likelihood that it would produce an economic benefit for Plaintiff. 22 PLAINTIFF’S FIRST AMENDED COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 99. Defendant Lorenzetti and DOES 10-20 nonetheless intentionally interfered with the relationships by, among other things, usurping Plaintiff's role in the negotiating and completing the development of The Azusa Project. Upon information and belief, Defendant Lorenzetti and DOES 10-20 intended to disrupt the relationship between Plaintiff and the other Defendants or knew that such a disruption was certain or substantially likely to occur. 100. Further, Defendant Lorenzetti and DOES 10-20 acted wrongfully in utilizing Plaintiff's work product, including financial documents Plaintiff prepared using information, methods and models that were proprietary and owned exclusively by Plaintiff, and other intentional acts designed to induce a breach or disruption of the contract between Plaintiff and Defendants Coleman, Net Development Company and DOES 10-20; 101. The actions of Defendant Lorenzetti and DOES 10-20 in fact interfered with Plaintiff's agreements and dealings and disrupted the relationship between Plaintiff and the other Defendants. 102. Plaintiff has been injured by the conduct of Defendant Lorenzetti and DOES 10-20 as alleged herein. Indeed, Plaintiff has been damaged in an amount that is not presently ascertainable, but which certainly exceeds $500,000.00. If necessary, Plaintiff will update and amend this complaint to allege a more certain amount after pursuing appropriate discovery in this matter. 23 PLAINTIFF'S FIRST AMENDED COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 103. Defendant Lorenzetti and DOES 10-20 each performed the acts described above with oppression and malice and with the intent to defraud Plaintiff. Each acted willfully and in conscious disregard for the rights of Plaintiff. As such, Defendants should each be subject to an award of punitive damages, to punish and make an example of each of them. ELEVENTH CAUSE OF ACTION (For Negligent Interference With Prospective Advantage Against Defendant Lorenzetti and DOES 10-20) 104. Plaintiff repeats and realleges each and every allegation of fact set forth in paragraphs 1 through 35 above, and incorporates them by reference as though fully set forth herein. 105. Plaintiff and Defendants Coleman, Net Development, and Does 1-10 were in an economic relationship that likely to result in an economic benefit to Plaintiff. 106. Defendant Lorenzetti and DOES 1-20 knew, or should have known, of that relationship and of the likelihood that it would produce an economic benefit for Plaintiff. 107. Further, Defendant Lorenzetti and DOES 1-20 knew, or should have known, that relationship would be disrupted if they failed to act with reasonable care. 24 PLAINTIFF'S FIRST AMENDED COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 108. Upon information and belief, Defendant Lorenzetti and DOES 10-20 negligently interfered with the economic relationship between Plaintiff and Defendants Coleman, Net Development Company and DOES 1-10 that was substantially likely to have resulted in an economic benefit to Plaintiff. 109. Defendant Lorenzetti and DOES 10-20 nonetheless interfered with the relationships by, among other things, usurping Plaintiff's role in the negotiating and completing the development of The Azusa Project. Upon information and belief, Defendant Lorenzetti and DOES 10-20 intended to disrupt the relationship between Plaintiff and the other Defendants or knew that such a disruption was certain or substantially likely to occur. 110. Further, Defendant Lorenzetti and DOES 10-20 acted wrongfully in utilizing Plaintiff's work product, including financial documents Plaintiff prepared using information, methods and models that were proprietary and owned exclusively by Plaintiff, and other intentional acts designed to induce a breach or disruption of the contract between Plaintiff and Defendants Coleman, Net Development Company and DOES 10-20; 111. The conduct and actions of Defendant Lorenzetti and DOES 10-20 in fact interfered with Plaintiff's agreements and dealings and disrupted the relationship between him and the other Defendants. 107. Plaintiff has been injured by the conduct and actions of Defendant Lorenzetti and DOES 10-20 as alleged herein. Indeed, Plaintiff has been damaged 25 PLAINTIFF'S FIRST AMENDED COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 od 23 24 bi! 26 27 28 in an amount that is not presently ascertainable, but which certainly exceeds $500,000.00. If necessary, Plaintiff will update and amend this complaint to allege a more certain amount after pursuing appropriate discovery in this matter. PRAYER FOR RELIEF Wherefore, Plaintiff prays for judgment against Defendants, and each them, as follows: 1. For compensatory and punitive damages according to proof; 2. For costs of suit herein; and 3. For such other and further relief as the court deems just and proper. Dated: October 18, 2018 Choctes fo Ly ane cts Charles W. Hokanson Attorney for Plaintiff and Cross- Defendant Bruce Orr 26 PLAINTIFF'S FIRST AMENDED COMPLAINT 11 12 13 14 |) 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE I am over the age of 18, a member of the bar of this court, and not a party to this action. Iam employed in the County of Los Angeles, California and my business address is 140 Linden Ave, Suite 283, Long Beach CA 90802. Iam counsel of record in the foregoing matter for Plaintiff and Cross-Defendant Bruce Orr. On October 18, 2018, I served the foregoing document, entitled Plaintiff’s Amended Complaint, on the opposing parties in this action in this action by the method indicated below. xx BY Electronic Mail Pursuant to Cal. Rule Ct. 2.251(c)(3), I served the foregoing document upon counsel for Defendants, Stephen A. Ellis, Steven J. Goon, and Samantha I. Goates, by electronic mail addressed to sellis@rutan.com, sgoon@rutan.com, and sgoates@ruttan.com which are the email addresses that Mr. Ellis, Mr. Goon and Ms. Goates have set forth on their papers filed with the court in this action. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed October 18, 2018 at Long Beach, California. Ch pelos lo Foot asecton Charles Hokanson 27 PLAINTIFF'S FIRST AMENDED COMPLAINT EXHIBIT D 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Charles W. Hokanson (State Bar No. 163662) Law Offices of Charles Hokanson 4401 Atlantic Ave, Suite 200 Long Beach, California 90807 Telephone: 562.316.1476 Facsimile: 562.318.3696 Attorney for Plaintiff Bruce Orr IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF ORANGE BRUCE ORR, an individual, Plaintiff, VS. KEVIN COLEMAN, an individual, ROBERT LORENZETTI, an individual; NET DEVELOPMENT COMPANY, a California corporation; and DOES 1 through 20, Defendants. And Related Cross-Action Case No. 30-2017-00947178-CU-CO-CJC Plaintiff's Notice of Election to File First Amended Complaint in Response to Defendant Lorenzetti’s Motion for Judgment on the Pleadings. TO THE COURT, ALL PARITES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE THAT Plaintiff Bruce Orr has elected to file an amended complaint in response to Defendants Lorenzetti’s motion for judgment on the pleadings as permitted by California NOTICE OF FILING OF FIRST AMENDED COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Code of Civil Procedure section 472. Plaintiff's first amended complaint is being filed and served with this notice. Dated: October 18, 2018 Ch pubes lo Fob aseetony Charles W. Hokanson Attorney for Plaintiff and Cross- Defendant Bruce Orr 2 NOITCE OF FILING OF FIRST AMENDED COMPLAINT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE I am over the age of 18, a member of the bar of this court, and not a party to this action. I am employed in the County of Los Angeles, California and my business address is 140 Linden Ave, Suite 283, Long Beach CA 90802. Iam counsel of record in the foregoing matter for Plaintiff and Cross-Defendant Bruce Orr. On October 18, 2018, I served the foregoing document, entitled Plaintiff’s Answer to Cross- Complaint, on the opposing parties in this action in this action by the method indicated below. xx BY Electronic Mail Pursuant to Cal. Rule Ct. 2.251(c)(3), I served the foregoing document upon counsel for Defendants, Stephen A. Ellis, Steven J. Goon, and Samantha I. Goates, by electronic mail addressed to sellis@rutan.com, sgoon@rutan.com, and sgoates@ruttan.com which are the email addresses that Mr. Ellis, Mr. Goon and Ms. Goates have set forth on their papers filed with the court in this action. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed October 18, 2018 at Long Beach, California. Choctes (0 Ly fare ctirn Charles Hokanson 3 NOITCE OF FILING OF FIRST AMENDED COMPLAINT EXHIBIT E 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 follows: THE PARTIES 1. Plaintiff Bruce Orr is an individual over the age of 18, who is now, and at all relevant times has been, a resident of the State of California and a professional in the field of real estate development. 2. Defendant Kevin Coleman is an individual over the age of 18, who is now, and at all relevant times has been, a resident of the State of California and a professional in the field of real estate development. 3 Defendant Net Development Company is now and at all relevant times has been a corporation duly organized and existing under the laws of the state of California with its principal place of business in Costa Mesa, Orange County, California. 4. Defendant Coleman is believed to be the sole shareholder of Defendant Net Development Company. Defendant Coleman pursues his business of development of real property and construction through his corporation, Defendant Net Development Company. Indeed, upon information and belief, Defendant Net Development Company is now, and has at all relevant times been, used by Defendant Coleman as a mere shell, instrumentality, and conduit through which he can and does carry out his business. Further, a unity of interest exists, and at all times mentioned herein has existed, between Defendants Coleman and Net Development Company such that any individuality or separateness between the two does not exist or has ceased such that one is the alter ego of the other. 5: Defendant Robert Lorenzetti is an individual over the age of 18 who is now, and at all relevant times has been, a resident of the State of California and a professional in the field of accounting and financial matters related to real estate development. 6. The true names and capacities, whether individual, corporate, associate or otherwise, of defendants DOES 1 through 25, inclusive, are unknown to Plaintiff who therefore sues such Defendants by such fictitious names pursuant to Code of Civil Procedure Section 474. Ff & 0.0a10/18/18 -1- ~N ON 0 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintiff alleges that each such fictitiously named defendant is in some manner responsible for the acts, occurrences and damages set forth in this complaint. Plaintiff will amend this complaint, if necessary, to show these defendants’ true names and capacities when they have been ascertained. “Defendants” as used in this complaint includes all named defendants and all DOE defendants, collectively. 7. Plaintiff is informed and believes, and on such basis alleges, that at all times mentioned herein, each of the defendants, whether or not specifically named, was a principal, agent, servant, employee, co-conspirator, joint venturer and/or alter ego of each of the other defendants, and was at all times acting within the course and scope of such relationship when committing the acts alleged in this complaint. JURISDICTION AND VENUE 8. This Court has subject matter jurisdiction over this action because the amount in controversy exceeds $25,000 and involves a dispute over conduct occurring within the State of California and contracts entered into within the state of California. 8. Further, venue is proper in this district of the Superior Court of the State of California for the County of Orange because all specifically named defendants reside or do business within the County of Orange and the agreements upon which certain causes of action are based were entered into within the County of Orange. FACTS COMMON TO ALL CAUSES OF ACTION 10. Defendants Coleman and Net Development Company are now, and at all relevant times have been, in the business of developing real estate, as well as designing and construction of real property improvements. 11. Plaintiff worked with Defendants Coleman and Net Development eCompany on several development projects beginning in 2010. 12. During the course of their relationship, at some point in 2012, Defendant Coleman apparently became aware of a parcel of land available for development located near the 210 Freeway and Azusa Avenue in the City of Azusa, California (hereinafter, “The Azusa Property”). / - 0.0 a10/18/18 -2- co 3 ON Oo 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13. Defendant Coleman was aware the Plaintiff had particular expertise and experience with developing hotel properties and that he had contacts within the hospitality field. Defendant Coleman thus asked Plaintiff if a hotel would be a good use of The Azusa Property. 14. After considerable research, analysis and preparation of appropriate projections, Plaintiff believed that a hotel could be built successfully on The Azusa Property. 13; Defendant Coleman represented to Plaintiff that, if he got involved in the project and worked with Defendants Coleman and Net Development Company, they would pursue a construction project for The Azusa Property together as partners and that he would be compensated as a partner upon completion of the project. 16. Thereafter, Defendant Coleman, for himself and on behalf of Defendant Net Development Company, and Plaintiff (at Defendant Coleman’s request) met with officials from the City of Azusa, including the Azusa City Manager and Development Director to discuss development of The Azusa Property. 17. The City of Azusa was initially reluctant to have the property developed as a hotel and restaurant project. However, during a series of meetings between Defendant Coleman, Plaintiff and Azusa officials, Defendant Coleman and Plaintiff explained the benefits of a hotel and restaurant use at the property and further discussed his research showing that a hotel and restaurant would be a feasible, profitable and appropriate use of The Azusa Property. Ultimately, because of Plaintiff’s work and assistance with the presentation, the city approved of the development of The Azusa Property for a hotel, as well as a restaurant. 18. Plaintiff also approached his contacts in the hospitality and restaurant industry to gain their interest in the ultimate development of The Azusa Property. He sought out their advice on the best type of hotel for the project and their requirements for the design of a hotel and restaurant at the Azusa Property. Plaintiff then adjusted the plans in accordance with the feedback and opinions he received to ensure that the project would appeal to appropriate tenants. 19. Additionally, Plaintiff made plans and contacted prospective tenants that might be interested in additional development of an adjacent property that was then occupied by a service station. Plaintiff had substantial conversations, on behalf of the partnership with Defendants / - 0.0 a10/18/18 -3- 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Coleman and Net Development Company, with the owner of the land that was occupied by the service station, ultimately convincing him of the benefits and desirability of such a development. 20. Throughout this process, Plaintiff regularly consulted with Defendant Coleman, presented him with updated plans and projections for the site, and obtained his agreement to continue with the process of preparing for a hotel and restaurant development of The Azusa Property. All of this was also done in reliance upon Defendant Coleman’s representations that Plaintiff was a partner in the development of the properties. 21. Plaintiff also contacted potential investors to fund the development of The Azusa Property and presented such potential investors with his feasibility and profitability analyses for the development of property. 22, Plaintiff was successful in attracting investors, including one that not only put up deposits for land acquisition and initial costs of the project, but also agreed in principle to fund the entire development project. 23. At some point thereafter, Defendant Coleman brought in another consultant, Defendant Lorenzetti, to assist with locating investors for the development of The Azusa Property. and to supplant Plaintiffs role in the project and the partnership. Defendant Lorenzetti was given all of the analyses and projections that Plaintiff had developed for The Azusa Property and Plaintiff assisted him with preparation of presentations to be made to potential investors. 24. Thereafter, Defendant Coleman and Defendant Lorenzetti met with the investor who had been brought in by Plaintiff, but without Plaintiff present, and drove that investor away for reasons unknown to Plaintiff. 25. From the beginning and throughout the process, including after hiring Defendant Lorenzetti, Defendant Coleman represented to Plaintiff and others that Plaintiff was a partner in the project, essential to its success and would be compensated as a partner upon completion of development of The Azusa Property. In fact, Defendant Coleman assured Plaintiff, individually and in the presence of others, that Plaintiff was more important to the project at The Azusa Property than anyone else, including the architects, engineers, contractors and even Defendant Lorenzetti. / 0.0 10/18/18 -4- 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 26. However, after the arrival of Defendant Lorenzetti, Defendant Coleman began ostracizing Plaintiff from the project. Defendant Coleman even started directly negotiating with another potential investor that Plaintiff had brought to the project. 27. At some point thereafter, Defendant Coleman told Plaintiff that he would no longer consider Plaintiff to be a partner in the project, but nonetheless assured him that he would be fully compensated for his efforts and work on the project and that he would provide Plaintiff with a written agreement providing for that compensation. Defendant Coleman also represented that Plaintiff would be compensated by at least a payment of $300,000.00 from the proceeds received from the sale of the restaurant site, a monthly fee, and 10% to 15% of the profits from the remainder project. 28. Based upon Defendant Coleman’s reassurances of full and appropriate compensation, Plaintiff continued to work on the project. 29. However, and although Plaintiff had prepared documents setting out the terms of Defendant Coleman’s promises and delivered them to Defendant Coleman, Defendant Coleman never executed the writings provided to him or prepared a written contract himself. 30. Instead, in October 2015, Defendant Coleman told Plaintiff that he had directed a local law firm to prepare a formal written contract consistent with his previous promises and to deliver it to Plaintiff for his execution. No such contract was ever provided. 31. Thus, in late October 2015, Plaintiff directed that Defendants Coleman and Lorenzetti both cease using Plaintiff's work product, including the financial documents and feasibility studies that he prepared using information a owned exclusively by Plaintiff, as well as the contacts he had brought to the project. 32. Defendants simply ignored Plaintiffs directions. They continued to use all of his work product and pursued agreements with contacts that Plaintiff had supplied to them. 33. Still, Defendant Coleman continued thereafter to confirm and represent to Plaintiff and others that Plaintiff would be compensated fully and appropriately, and in an amount that was at least consistent with Defendant Coleman’s prior representations. J - 0.0a10/18/18 -5- 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 34, Then, extraordinarily, Defendant Coleman informed Plaintiff that he would not be compensated for the years of work and effort that he contributed to The Azusa Project and that, instead, Defendant Coleman would just forgive repayment of a series of loans that he made to Plaintiff (in the amount of $30,000.00) even though it was obvious that such amount did not begin to compensate Plaintiff for the work he completed or the risk he took in pursuing the successful development of The Azusa Project. 35. The Azusa Project has been substantially completed. Upon information and belief, the real property that was a part of the project has been sold and Defendants have obtained substantial profits from the development and sale of the project. FIRST CAUSE OF ACTION (For Breach of Contract Against Defendants Coleman and Net Development Company and DOES 1-10) 36. Plaintiff repeats and realleges each and every allegation of fact set forth in paragraphs 1 through 35 above, and incorporates them by reference as though fully set forth herein. 37. Plaintiff and Defendant Coleman, individually and on behalf of Net Development Company and DOES 1 -10, orally agreed to work together as joint venture partners to develop and construct improvements at The Azusa Project for their mutual profit. 38. For years, Plaintiff devoted his time and efforts to pursuit of the parties’ contract and the development of The Azusa Project with Defendants Coleman, Net Development Company and DOES 1-10. 39. Defendants Coleman and Net Development Company and DOES 1-10 readily accepted Plaintiff's performance in pursuit of The Azusa Project for several years, without any issue or complaint, and with the understanding that Plaintiff’s performance was undertaken with the expectation of sharing in the profits of the development. Indeed, Plaintiff’s continued performance was specifically invited and required by Defendants Coleman, Net Development Company and DOES 1-10. / = 0.0210/18/18 -6- 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 40. As a result, even if the oral agreement between Plaintiff and Defendants Coleman, Net Development Company and DOES 1-10 were in some manner unenforceable, a binding and enforceable legal contract exists that is implied from the parties’ conduct. 41. Plaintiff has performed all obligations to Defendants Coleman, Net Development Company and DOES 1-10 required under the parties” agreement, except those that he was prevented or excused from performing by them. 42. Defendants Coleman, Net Development Company and DOES 1-10 breached the parties’ agreements by, among other things, failing to compensate Plaintiff as required by the parties’ agreements. 43. Plaintiff has been damaged by the breaches of Defendants Coleman, Net Development Company and DOES 1-10 in an amount that is not presently ascertainable, but which certainly exceeds $500,000.00. If necessary, Plaintiff will update and amend this complaint to allege a more certain amount after pursuing appropriate discovery in this matter. SECOND CAUSE OF ACTION (For Promissory Estoppel Against Defendants Coleman, Net Development Company and DOES 1-10) 44. Plaintiff repeats and realleges each and every allegation of fact set forth in paragraphs 1 through 35 above, and incorporates them by reference as though fully set forth herein. 45. Defendants Coleman, Net Development Company and DOES 1-10 made one or more clear and unambiguous promises to Plaintiff that if he assisted them with the development of The Azusa Property, he would be a partner in the project and entitled to compensation as a partner upon the completion and sale of the property - and they repeated that promise or promises over many months. 46. Plaintiff relied upon the promises of Defendants Coleman, Net Development Company and DOES 1-10 by devoting his time and efforts to pursuit of the development of The Azusa Proj ect with them. / Z 0.0 a10/18/18 -7- 10 11 1 13 14 15 16 17 18 19 20 Zl 22 23 24 235 26 27 28 47. At all relevant times, Defendants Coleman, Net Development Company and DOES 1-10 knew and could foresee that Plaintiff was relying on their promises in performing his own obligations. 48. As such, injustice can be avoided in this matter only by enforcement of the promises of Defendants Coleman, Net Development Company and DOES 1-10. 49. Plaintiff has been injured by the failure of Defendants Coleman, Net Development Company and DOES 1-10 to honor their promises. Indeed, Plaintiff has been damaged in an amount that is not presently ascertainable, but which certainly exceeds $500,000.00. If necessary, Plaintiff will update and amend this complaint to allege a more certain amount after pursuing appropriate discovery in this matter. THIRD CAUSE OF ACTION (For Breach of Covenant of Good Faith and Fair Dealing Against Defendants Coleman, Net Development Company and DOES 1-10) 50. Plaintiff repeats and realleges each and every allegation of fact set forth in paragraphs 1 through 35 above, and incorporates them by reference as though fully set forth herein. 51. Plaintiff and Defendant Coleman, individually and on behalf of Net Development Company and DOES 1-10, had an agreement to work together to develop and construct improvements at The Azusa Project for their mutual profit. 52. Implied within the parties’ agreement is an implied promise of good faith and fair dealing that requires each party to refrain from any conduct that unreasonably interferes with the rights of the other parties to receive the benefits of the agreement. 53. Plaintiff has performed all, or substantially all, of the things required of him by the parties’ agreements, except for those obligations that have been excused or prevented from performing by Defendants Coleman, Net Development Company and DOES 1-10. Moreover, all other conditions or events required for Defendants Coleman, Net Development Company and DOES 1-10 to compensate Plaintiff as required have occurred or are legally excused. / ws 0.0a10/18/18 -8- co NN O N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 54. Nevertheless, Defendants Coleman, Net Development Company and DOES 1-10 have unfairly refused to pay Plaintiff the amounts to be paid to him, as well as other benefits due under the parties’ agreements. 53 Plaintiff has been injured by the failure of Defendants Coleman, Net Development Company and DOES 1-10 to honor their promises. Indeed, Plaintiff has been damaged in an amount that is not presently ascertainable, but which certainly exceeds $500,000.00. If necessary, Plaintiff will update and amend this complaint to allege a more certain amount after pursuing appropriate discovery in this matter. FOURTH CAUSE OF ACTION (For Unjust Enrichment Against All Defendants) 56. Plaintiff repeats and realleges each and every allegation of fact set forth in paragraphs 1 through 35 above, and incorporates them by reference as though fully set forth herein. 57. Plaintiff expended substantial time, energy and effort in pursuing the development of The Azusa Property, as set forth above, including but not limited to preparing research, plans, analyses and preparation of appropriate projections, as well as by providing contacts for prospective tenants. 58. Defendants accepted and used the materials and results of Plaintiff's efforts for The Azusa Project. 59. Plaintiff thus conferred a substantial benefit upon Defendants, for which Defendant has not been paid. 60. Defendants have been unjustly enriched by their retention of these benefits and amounts that were to be paid to Plaintiff. It would be inequitable and unjust for Defendants to continue to retain those funds and benefits. 61. Accordingly, Defendants should be required to divest and divulge the value of all benefits conferred upon them by which they have been unjustly enriched in an amount to be proven at trial, but which certainly exceeds $500,000.00. / - 0.0 210/18/18 -9- 10 11 | 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 FIFTH CAUSE OF ACTION and Net Development Company and DOES 1-10) 62. Plaintiff repeats and realleges each and every allegation of fact set forth in paragraphs 1 through 35 above, and incorporates them by reference as though fully set forth herein. 63. Defendant Coleman, individually and on behalf of Net Development Company, promised to compensate Plaintiff for the value of his efforts to develop and construct improvements at The Azusa Project for their mutual profit. AH-Those Defendants later repeated such promises many times though and including at least the year 2016. 64. Further, Defendants promised not to use for any purpose the research, information, plans, analyses and projections that Plaintiff prepared for The Azusa Project. 65. Upon information and belief, those promises were in fact false and made without any intention of performing them. In fact, further upon information and belief, those promises were intended to defraud Plaintiff and to induce Plaintiff to rely upon such promises to his detriment. 66. For years, and in justifiable reliance on the misrepresentations of Defendants Coleman and Net Development Company, Plaintiff devoted his time and efforts to pursuit of the development of The Azusa Project. Plaintiff did so without being aware of their true intention to not perform their promises. 67. Plaintiff has been injured by the failure of Defendants Coleman Aand Net Development Company to honor their promises. Indeed, Plaintiff has been damaged in an amount that is not presently ascertainable, but which certainly exceeds $500,000.00. If necessary, Plaintiff will update and amend this complaint to allege a more certain amount after pursuing appropriate discovery in this matter. 68. described above with oppression and malice and with the intent to defraud Plaintiff. Each acted willfully and in conscious disregard for the rights of Plaintiff. As such, Defendants should each be subject to an award of punitive damages, to punish and make an example of each of them. / , 0.0 a10/18/18 -10- 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SIXTH CAUSE OF ACTION and Net Development Company and DOES 1-10) 69. Plaintiff repeats and realleges each and every allegation of fact set forth in paragraphs 1 through 35 above, and incorporates them by reference as though fully set forth herein. 70. As partners and joint venturers in the development of The Azusa Property, Defendants Coleman Net Development Company were in trusting and confidential relationships with Plaintiff. 71. Defendants Coleman and Net Development Company violated their duties of trust and confidence by, among other things, failing to honor and consider Plaintiff’s interests in the successful development of The Azusa Property and by cutting him out of the development. 72. For years, and in justifiable reliance on these Defendants’ misrepresentations, Plaintiff devoted his time and efforts to pursuit of the development of The Azusa Project. Plaintiff did so without being aware of their true intention to not perform their promises. 73. Plaintiff has been injured by the failure of Defendants Coleman Aand Net Development Company to honor their promises. Indeed, Plaintiff has been damaged in an amount that is not presently ascertainable, but which certainly exceeds $500,000.00. If necessary, Plaintiff will update and amend this complaint to allege a more certain amount after pursuing appropriate discovery in this matter. SEVENTH CAUSE OF ACTION For Negligent Misrepresentation Against AH-Defendants Co and Net Development Company and DOES 1-10) 74. Plaintiff repeats and realleges each and every allegation of fact set forth in paragraphs 1 through 35 above, and incorporates them by reference as though fully set forth herein. and construct improvements at The Azusa Project, and that his work would be respected, for their mutual profit. b= 0.0 210/18/18 -11- 10 11 12 13 14 15 16 17 18 19 20 21 22 23 26 27 28 76. Upon information and belief, those promises were in fact false and made without any intention of performing them. In fact, further upon information and belief, those promises were intended to defraud Plaintiff and to induce Plaintiff to rely upon such promises to his detriment. 77. For years, and in justifiable reliance on these Defendants’ misrepresentations, Plaintiff devoted his time and efforts to pursuit of the development of The Azusa Project. 78. Plaintiff has been injured by Defendants’ failure to honor their promises. Indeed, Plaintiff has been damaged in an amount that is not presently ascertainable, but which certainly exceeds $500,000.00. If necessary, Plaintiff will update and amend this complaint to allege a more certain amount after pursuing appropriate discovery in this matter. EIGHTH CAUSE OF ACTION (For Intentional Interference-With Prospective Advantagelnducing Br Against Defendant Lorenzetti and DOES 10-20) 79. Plaintiff repeats and realleges each and every allegation of fact set forth in paragraphs 1 through 35-45 above, and incorporates them by reference as though fully set forth herein. interfered-with-the-economiecrelationship-between-him-and-Defendants-Coleman-and-Net- 80. Atall relevant times, Plaintiff had a valid and existing cont pany and DOES 1-10 by mutual benefit and develop the Azusa Property. imes, Defendant Lorenzetti and DOES 1-20-knew-ef-that Company and DOES 1-10 for the development of the Azusa Property. / - 0.0 a10/18/18 -12- Defendants Lorenzetti and DOES 10-20 1 yd Md a a 3 Alternatively, Defendants Lorenzetti and DOES 10-20 knew that his conduct would Company and DOES 1-10 or that such disruption was substantially certain to occur. 84. Asa result of the conduct of Defendants Lorenzetti and DOES 10-20, Defendants damages are in an amount that is not presently ascertainable, but which certainly exceeds $500,000.00. If necessary, Plaintiff will update and amend this complaint to allege a more certain amount after pursuing appropriate discovery in this matter. 86. 85Defendant Lorenzetti and DOES 10-20 each performed the acts described above with oppression and malice and with the intent to defraud Plaintiff. Each acted willfully and in each be subject to an award of punitive damages, to punish and make an example of each of them. NINTH CAUSE OF ACTION / - 0.0 10/18/18 -13- 87. 86-Plaintiff repeats and realleges each and every allegation of fact set forth in Development Company and DOES 1-10 for the development of the Azusa Property. 89. S 10-20 were aware of t 90. Nonetheless, Defendants Lorenzetti and DOES 10-20 intentionally interfered with _among other things, preventing Plaintiff’s performa 1, Net Developr mpany and DOES 1-10; product, including financial documents Plaintiff prepared using info were proprietary and owned exclusively by Plaintiff: and other intentional acts designed to induce Company and DOES 1-10 or that such disruption was substantially certain to occur. 92. Asa result of the conduct of Defendants Lorenzetti and DOES 10-20, Defendants / @ 0.0 210/18/18 -14- 5 97. 8%Upon information and belief, Defendant Lorenzetti and DOES 10-20 negligently negotiating and completing a fo en tds methods and models that were proprietary and owned exclusively by Plaintiff, and other intentional acts designed to induce a breach or disruption of the contract between Plaintiff and / % 0.0 10/18/18 -15- 101. The actions of Defendant Lorenzetti and DOES 10-20 in fact interfered with 104. Plaintiff repeats and realleges each and every allegation of fact set forth in paragraphs 1 through 35 above, and incorporates them by reference as though fully set forth 105. Plaintiff and Defendants Coleman, Net Development, and Does 1-10 were in an economic relationship that likely to result in an economic benefit to Plaintiff. 106. 88-Defendant Lorenzetti and DOES 1-20 knew, or should have known, of that relationship and of the likelihood that it would produce an economic benefit for Plaintiff. 107. interfered with the econo Development Company and DOES 1-10 that was substantially likely to have resulted in an economic benefit to Plaintiff, / - 0.0 a10/18/18 -16- nonetheless intentionally-interfered with the relationships by, among other things, usurping Plaintiffs role in the negotiating and completing the development of The Azusa Project. Upon between Plaintiff and the other Defendants or knew that such a disruption was certain or substantially likely to occur. 110. Further, Defendant Lorenzetti and DOES 10-20 acted wr oduct, including financial documents Plaintiff interfered with Plaintiff's agreements and dealings and disrupted the relationship between him and the other Defendants. 112. 9+-Plaintiff has been injured by the conduct and actions of Defendant Lorenzetti and DOES 10-20 as alleged herein. Indeed, Plaintiff has been damaged in an amount that is not presently ascertainable, but which certainly exceeds $500,000.00. If necessary, Plaintiff will update and amend this complaint to allege a more certain amount after pursuing appropriate discovery in this matter. TENTH CAUSE-OF-ACTION For Neeh : Deford 92 Plaintiff repeats-and-realleges-each-and-every-allegation-of fact set-forth-in- eference-as-though-fully-set-forth- / - 0.0 a10/18/18 -17- oo 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 necessary; Plaintiff will update-and-amend-this-complaint to-allege-a-mere-certain-ameunt-after- . te di hi PRAYER FOR RELIEF Wherefore, Plaintiff prays for judgment against Defendants, and each them, as follows: I. For compensatory and punitive damages according to proof; 2. For costs of suit herein; and 3. For such other and further relief as the court deems just and proper. Dated: September290ctober 18, 20178 Charles W. Hokanson Attorney for / - 0.0a10/18/18 -18- 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF ORANGE I am employed by the law office of Rutan & Tucker, LLP in the County of Orange, State of California. [ am over the age of 18 and not a party to the within action. My business address is 611 Anton Boulevard, Suite 1400, Costa Mesa, California 92626-1931. My electronic notification address is jmullins@rutan.com. On October 24, 2018, I served on the interested parties in said action the within: DEFENDANT ROBERT LORENZETTI’S REPLY IN SUPPORT OF HIS MOTION FOR JUDGMENT ON THE PLEADINGS; DECLARATION OF STEVEN J. GOON IN SUPPORT THEREOF as stated below: Charles W. Hokanson Law Offices of Charles Hokanson 140 Linden Ave., Suite 283 Long Beach, CA 90802 Facsimile No.: 562-318-3696 E-Mail: cwhokanson@towerlawcenter.com (BY MAIL) by placing a true copy thereof in sealed envelope(s) addressed as shown above. In the course of my employment with Rutan & Tucker, LLP, I have, through first-hand personal observation, become readily familiar with Rutan & Tucker, LLP’s practice of collection and processing correspondence for mailing with the United States Postal Service. Under that practice, I deposited such envelope(s) in an out-box for collection by other personnel of Rutan & Tucker, LLP, and for ultimate posting and placement with the U.S. Postal Service on that same day in the ordinary course of business. If the customary business practices of Rutan & Tucker, LLP with regard to collection and processing of correspondence and mailing were followed, and I am confident that they were, such envelope(s) were posted and placed in the United States mail at Costa Mesa, California, that same date. I am aware that on motion of party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit. (BY ELECTRONIC SERVICE through One Legal, LLC) by electronically delivering the document(s) listed below via eService through One-legal Service (www.onelegal.com) system which sends an email notification of the filing to the parties and counsel of record listed above. (BY E-MAIL) by transmitting a true copy of the foregoing document(s) to the e-mail addresses set forth above. Executed on October 24, 2018, at Costa Mesa, California. 2808/017604-0072 12998088.1 a10/24/18 10 11 12 13 14 13 16 17 18 19 20 21 22 23 24 25 26 27 28 I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Janice Mullins (Type or print name) (Signature) 2808/017604-0072 12998088.1 a10/24/18