Opposition To Demurrer To First Amended Complaint

Opposition

Cal. Super. - 2nd Dist.June 8, 2018

Electronically FILED by Supe A W N S N D N S N W a 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 or Court of California, County of Los Angeles on 02/13/2019 02:49 PM Sherri R. Carter, Executive Officer/Clerk of Court, by S. Guladzhyan,Deputy Clerk John Robert Seashore, Esq. - SBN 86424 LAW OFFICE OF J. R. SEASHORE 21031 Ventura Boulevard, Suite 640 Woodland Hills, California 91364 Tel: (818) 340-6023 E-Mail: jaysealaw(@aol.com Attorneys for Plaintiffs, Richard A. Stavin Solo 401K Trust fbo Richard A. Stavin and Richard A. Stavin Solo 401K Trust fbo Dea Paster, and Glencoe MDR, LLC SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF LOS ANGELES - NORTHWEST DISTRICT RICHARD A. STAVIN SOLO 401K TRUST FBO RICHARD A. STAVIN, RICHARD A. STAVIN SOLO 401K TRUST FBO DEA PASTER, GLENCOE MDR, LLC, ET AL., Case No. LC107358 PLAINTIFF GLENCOE MDR, LLC’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST Plaintiffs, AMENDED COMPLAINT V. Judge: Virginia Keeny Dept: “WwW? STRATEGIC VENTURE GROUP, LLC, Hearing Date: March 5, 2019 ROBERT J. LEICHT, JR., GRANT Time: 8:30 a.m. CULTON, JOHN T. CULTON, ET AL., Defendants. N r N t ” N e ” Me ar e N r ? N c ” N a t N a t s e e s c r “ s e t s a a t Na at s e t e e t sp e’ “ sa e a e s s e t s e “ s a m ? MEMORANDUM OF POINTS AND AUTHORITIES I. SUMMARY OF ARGUMENT Defendants think that Plaintiff has failed to allege a legally sufficient First Amended Complaint (“FAC”)for promissory estoppel because the promise is not clear and unambiguous and that Plaintiff cannot show that its reliance was not reasonable and foreseeable. Defendants goonin an attempt to apply law at the demur stage from cases that are mostly focused on summary judgment WACCOUNTS-PCiscan\_CLIENTS2009\2023\pleadings\OPP_DEMURRER FAC. wpd 1 PLAINTIFF GLENCOE MDR, LLC’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS’ DEMURRER FIRST AMENDED COMPLAINT O w N Y n n B W NY 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 37 28 and/or verdicts after jury trial. In short. Defendants ask the Court to apply a standard that is not applicable at the pleading stage. See Granadino (motion for summary judgment), Kruse (jury verdict), Seeger (motion for judgment on the pleadings reversed on appeal as to promissory estoppel only), Aceves (demurrer without leave to amend reversed on appeal as to promissory estoppel), West (demurrer without leave to amend reversed on appeal as to promissory estoppel), and Garcia (motion for summary judgment reversed on appeal as to promissory estoppel only).! Defendants request the Court to take judicial notice of its prior ruling on the demurrer to the original complaint by referring to one paragraph. The reference pertained to the first three causes of action which were challenged based on being barred by the statute of limitations (“SOL”). Ithad no bearing on the challenge to the promissory estoppel cause of action for which the Court singled out that the promise only was ambiguous and provided leave to amend. Although a court may judicially notice a variety of matters, only relevant material may be noticed. “But judicial notice, since it is a substitute for proof [citation], is always confined to those matters which are relevant to the issue at hand.” Aquila, Inc. v. Superior Court, (2007)148 Cal. App.4th 556; Mangini v. R. J. Reynolds Tobacco Co., (1994) 7 Cal.4th 1057, 1063. The Court’s prior ruling is irrelevant to the matter before the Court. As to the SOL causes of action, again the Court provided leave to amend which resulted in only one of the three causes of action being re-alleged. Defendants only challenge the promissory estoppel cause of action. The Court’s prior ruling served the purpose of informing Plaintiff what it needed to allege in the FAC. Plaintiff did this as will be shown below. IL STANDARD OF REVIEW To succeed on a demurrer, Defendants must establish that there is no viable cause of action against them. In ruling on a demurrer, the Court is "to be guided by the following basic principle: All that is necessary against a general demurrer is that, upon a consideration of all the facts stated, itappears that the plaintiffs entitled to any judicial relief against the defendant, notwithstanding that 'Please see Defendants’ Points and Authorities for complete cites. WACCOUNTS-PClscan\_CLIENTS2009\2023\pleadings\OPP_DEMURRER.FAC,wpd 2 PLAINTIFF GLENCOE MDR, LLC’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS’ DEMURRER FIRST AMENDED COMPLAINT Oo ® a3 AN nn A W N N N N = e d e m e m e e l e d e d e m pe d pe the facts may not be clearly stated, or may be intermingled with a statement of other facts irrelevant to the cause of action shown, or although the plaintiff may demand relief to which he is not entitled under the facts alleged." Holmes v. City of Oakland (1968) 260 Cal.App.2d 378, 382-83. “It is not the ordinary function of a demurrer to test the truth of the plaintiff's allegations or the accuracy with which he describes the defendant's conduct. A demurrer tests only the legal sufficiency of the pleading.” Berg & Berg Enterprises, LLC v. Boyle, (201 0) 178 Cal.App.4th 1020 citing Committee On Children's Television, Inc. v. General Foods Corp. ( 1983) 35 Cal.3d 197, 213. A demurrer is “simply not the appropriate procedure for determining the truth of disputed facts.” Ramsden v. Western Union, (1977) 71 Cal. App. 3d 873, 879. Instead, “la]s a general rule in testing a pleading against a demurrer the facts alleged in the pleading are deemed to be true, however improbable they may be.” Del E. Webb Corp. v. Structural Materials Co., (1981) 123 Cal. App. 3d 593, 604. Therefore, in order for the Court to sustain a general demurrer based upon Code of Civil Procedure §430.10(e), the Defendants must establish that the complaint fails to state facts sufficient to constitute any cause of action against them. In testing the legal sufficiency of a pleading against a demurrer, all properly pleaded allegations, including those that arise by reasonable inference, are deemed admitted regardless of the possible difficulty of proof at trial. Heckendorn v. City of San Marino (1986) 42 Cal.3d 481, 486. Moreover, in the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to attaining substantial justice among the parties. Code of Civil Procedure §452. A court is required, in every stage of an action, to disregard any defect in the pleadings that in the opinion of the court does not affect the substantial rights of the parties. Code of Civil Procedure §475; Gressley v. Williams (1961) 193 Cal.App.2d 636, 639. "The essence of the matter is fairness in pleading to give the defendant such notice by the complaint that he may prepare his case." Leer v. Union Pac. R. Co. (1944) 25 Cal.2d 605,. As set forth in detail below, the Defendants have not, and cannot, meet their burden to sustain a demurrer to the promissory estoppel cause of action WACCOUNTS-P Ciscan\_CLIENTS2009\2023\pleadings\OPP_DEMURRER.FAC.wpd 3 PLAINTIFF GLENCOE MDR, LLC’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS’ DEMURRER FIRST AMENDED COMPLAINT © 0 NN AA Ww» BA W N o m N O N N O N k m e m e m e m e e d b e d e d dk p e a III. PLAINTIFFS ARGUMENTS A. For purposes of the pleading stage, the promise as alleged is legally sufficient. Defendants promissory estoppel argument relies on non-statute of limitation cases. “The doctrine of equitable estoppel is based on the theory that a party who by his declarations or conduct misleads another to his prejudice should be estopped from obtaining the benefits of his misconduct.” Kleinecke v. Montecito Water Dist. (1983) 147 Cal. App. 3d 240, 245; Mills v. Mills (1956) 147 Cal. App. 2d 107, 120; Herman v. Brown (1949) 91 Cal. App. 2d 758, 761. In Aceves v. U.S. Bank, N.A., (2011) 192 Cal.App.4th 218 (cited by Defendants), the Court held the following: The promise must, in addition, be “clear and unambiguous in its terms.” Garcia v. World Savings, FSB (2010) 183 Cal. App.4th 1031, 1044. “To be enforceable, a promise need only be “definite enough that a court can determine the scope of the duty[,] and the limits of performance must be sufficiently defined to provide a rational basis for the assessment of damages.” Id. at 1045. See also, Ladas v. California State Auto. Assn. (1993) 19 Cal. App.4th 761, 770. Here, the promise meets the Garcia standard. “In and around February of 2017, Defendant Tyler Culton proposed again that Plaintiffs enter into an agreement with him to flip single family houses so that the balances due on the Notes could be repaid. Defendant Tyler Culton assured Plaintiffs that he would find flip houses and the parties could move forward together in an effort to repay what was owed to Plaintiffs. Said Defendant stated that he would locate one deal and take it through completion to show Plaintiffs his honesty in support of his assurances of repaying the balances due.” (Second Cause of Action at 16, p. 4, lines 11-16) In Aceves the Court found that U.S. Bank had agreed to “work with [Aceves] ona mortgage reinstatement and loan modification” if she no longer pursued relief in the bankruptcy court. This is a clear and unambiguous promise. It indicates that U.S. Bank would not foreclose on Aceves's home without first engaging in negotiations with her to reinstate and modify the loan on mutually agreeable terms. In this case, Defendant Culton agreed to work with Glencoe MDR on repaying the outstanding debt and refused to execute a mutual release by stating, “I cannot be efficient, nor absent WACCOUNTS-PC\scan\ CLIENTS2009\2023\pleadings\OPP_DEMURRER FAC. wpd 4 PLAINTIFF GLENCOE MDR, LLC’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS’ DEMURRER FIRST AMENDED COMPLAINT OW 00 3 S N nn BA W N em BN RN Y = p e d p e d e m t e d p d pe ed f e d f e d fe d any resentment if I feel my current and future business partners are in anyway out to get me or threatening me. This is the only way I will proceed.” (Second Cause of Action at 919, p. 5, lines 4-6) The import of this statement made by Defendant Culton in an email is clear. Should you file a lawsuit against me I will not repay the outstanding debt through new real estate deals. Plaintiff refrained from filing a lawsuit so that Defendant Culton would keep his promise to repay the outstanding debt. The reasoning in Aceves is right on point here. The facts alleged in the Promissory Estoppel cause of action clearly show that Defendants’ conduct actually had misled Plaintiffs, and that Plaintiffs reasonably relied on that conduct. Defendants argument regarding the refusal to enter into a tolling agreement and the refusal to provide a release on the debts is unintelligible and irrelevant in the light of Plaintiffs factual allegations. The promise made by Defendants was to have Plaintiffs participate in a new real estate transaction to recoup their losses and not file a lawsuit against them. In reliance thereon, Plaintiffs dismissed the original lawsuit and did not file a subsequent lawsuit. Defendants, as discovery will establish, listed the renovated house well over market price on September 30, 2017 and reduced the price five times. It eventually sold on September 14, 2018 after Plaintiffs filed this lawsuit. In the promissory estoppel cause of action Plaintiffs alleged that Defendant Tyler Culton failed and refused to provide Plaintiffs with updates about the sale process except for a scant one or two. Plaintiffs alleged that Defendants lulled it into a false sense of security awaiting the expiration of the statute of limitations to avoid liability and pay any money due and owing to Plaintiff. B. Plaintiffs have sufficiently alleged that their reliance was reasonable and foreseeable. Promissory estoppel applies whenever a ‘promise which the promissor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance’ would result in an ‘injustice’ if the promise were not enforced. Granadino v. Wells Fargo Bank, N.A., (2015) 236 Cal. App.4™411,414; Aceves v. U.S. Bank, N.A., (2011) 192 Cal. App.4th, supra at p. 227; Advanced Choices, Inc. v. State Dept. of Health Services, WACCOUNTS-PCiscan\_CLIENTS2009\2023\pleadi ngs\OPP_DEMURRER .FAC.wpd 5 PLAINTIFF GLENCOE MDR, LLC'S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS’ DEMURRER FIRST AMENDED COMPLAINT OO 0 N N n n R A W N = RN N N N N = mm e m e m e l e d pe d e d p d fe (2010) 182 Cal. App. 4™ 1661, 1671-1672.; Toscano v. Greene Music, (2004) 124 Cal. App.4th 685. Defendant Culton’s statements were clearly meant to induce Plaintiffs not to file a lawsuit. “4. That after the limitation period had expired,[name of defendant]’s representations by words or conduct proved not to be true . . ” CACI 456 Defendant Estopped From Asserting Statute of Limitations Defense.. While Defendants may argue that Plaintiffs knew they would not agree to tolling the statute of limitations, it was of no import. Defendant Culton made it very clear that should a lawsuit be filed he would not have brought Plaintiffs into the Legend Lane deal nor any other deals. The Aceves decision provides further support for Plaintiffs reliance. The Court stated, “We conclude Aceves reasonably relied on U.S. Bank's promise; U.S. Bank reasonably expected her to so rely; and it was foreseeable she would do so. U.S. Bank promised to work with Aceves to reinstate and modify the loan. That would have been more beneficial to Aceves than the relief she could have obtained under chapter 13. The bankruptcy court could have reinstated the loan-permitted Aceves to cure the default, pay the arrearages, and resume regular loan payments-but it could not have modified the terms of the loan, for example, by reducing the amount of the regular monthly payments or extending the life of the loan. (See 11 US.C. § 1322(b)(2), (3), (5), (e)(1); 8 Collier on Bankruptcy, supra, 1 1322.06[1], 1322.07[2], 1322.09 [1]-[6], 1322.16 & fn. 5, pp. 23-24, 31-32, #228 34-42, 55-56.) By promising to work with Aceves to modify the loan in addition to reinstating it, U.S. Bank presented Aceves witha compelling reason to opt for negotiations with the bank instead of seeking bankruptcy relief.” Aceves v. U.S. Bank, N.A., 192 Cal.App.4th, supra at p.226-227. It is alleged in the promissory estoppel cause of action, “Said Defendant repeatedly told Plaintiffs that he would not continue to work with them to repay the balance due and owing under the threat of a lawsuit.” (See § 22) “Moreover, based on the aforesaid representations and assurances and the threat of bankruptcy, Plaintiffs did not file a new lawsuit so as not to jeopardize repayment of the monies still due and owing.” (See § 23) Itis further alleged, “Plaintiffs” reasonably relied on Defendants assurances based on the fact WACCOUNTS-PCiscan\ CLIENTS200912023\pleadings\OPP_DEMURRER FAC.wpd 6 PLAINTIFF GLENCOE MDR, LLC’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS’ DEMURRER FIRST AMENDED COMPLAINT NO 0 N N n p 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 that Defendants had purchased the Legend house and entered into an agreement that Plaintiffs would be paid a percentage of the profit when the house was resold. To further induce Plaintiffs to rely on the promises and assurances, Defendant Tyler Culton said the Legend house deal was in an effort to show Plaintiffs that he could be trusted and would continue to find more deals.” (See 24) “To further induce Plaintiffs to rely on the promises and assurances, Defendant Tyler Culton said the Legend house deal was in an effort to show Plaintiffs that he could be trusted and would continue to find more deals.” (See §24) “. The intention of the Defendants was to lull Plaintiffs into a false sense of security that they would be repaid the money owed to them. This became apparent when Defendant Tyler Culton began to ignore and refuse Plaintiffs requests for updates on the status of the Legend house . . . “ (See § 25) Also see 4 26-28 in further support of allegations establishing how Defendants broke their promises and assurances. “Itis well settled that the doctrine of estoppel in pais is applicable in a proper case to prevent a fraudulent or inequitable resort to the statute of limitations.” Estate of Pieper v. McMormick, (1964) 224 Cal. App. 2d 670, 690-691. Such would be the case here should the demurrer be sustained. “A defendant will be estopped to invoke the statute of limitations where there has been ‘some conduct by the defendant, relied on by the plaintiff, which induces the belated filing of the action.’ (3 Witkin, Cal. Procedure (3d ed. 1985) Actions, § 523, p. 550.) It is not necessary that the defendant acted in bad faith or intended to mislead the plaintiff. [Citations.] It is sufficient that the defendant's conduct in fact induced the plaintiff to refrain from instituting legal proceedings. [Citation.] ‘[W]hether an estoppel exists-whether the acts, representations or conduct lulled a party into a sense of security preventing him from instituting proceedings before the running of the statute, and whether the party relied thereon to his prejudice-is a question of fact and not of law.’ [Citations.]” Holdgrafer v. Unocal, Corp., (2008) 160 Cal. App.4th 907, 925-926 citing Shaffer v. Debbas (1993) 17 Cal. App.4th 33, 43. Taken as a whole, the allegations are sufficient at this stage of the case to support reasonable reliance and foreseeability. WACCOUNTS-PC\scan\ CLIENTS2009\2023\pleadings\OPP_DEMURRER FAC, wpd 7 PLAINTIFF GLENCOE MDR, LLC’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS’ DEMURRER FIRST AMENDED COMPLAINT SS W N ~N O N W n 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 al 28 IV. CONCLUSION Plaintiff has set forth facts sufficient enough at the pleading stage, at the very least, to support a cause of action for promissory estoppel and the demurrer overruled. - DATED: February 14, 2019 WACCOUNTS-PC\scan\ CLIENTS2009\2023\pleadings\OPP_DEMURRER FAC. wpd RESPECTFULLY SUBMITTED, LAW OF SHORE ~~ Attorneys for Plaintiffs, Richard A. Stavin Solo 401K Trust fbo Richard A. Stavin and Richard A. Stavin Solo 401K Trust fbo Dea Paster, and Glencoe MDR, LLC PLAINTIFF GLENCOE MDR, LLC’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS’ DEMURRER FIRST AMENDED COMPLAINT PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES: [ am a resident of the County aforesaid; I am over the age of eighteen years and not a party to the within entitled action. I am a member of the California State Bar. My business address is 21031 Ventura Blvd., Suite 640, Woodland Hills, California, 91364. On the date stated below, I served the within documents entitled PLAINTIFF GLENCOE MDR, LLC’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANTS’ DEMURRER TO FIRST AMENDED COMPLAINT on all interested parties or their attorneys in said action according to the mode of service checked immediately herein below: Anne Manilini, Esq. Attorneys for Defendants Levinson, Arshonsky & Kurtz, LLP Strategic Venture Group, LLC, 15303 Ventura Boulevard, Suite 1650 John T. Culton and Grant Culton Sherman Oaks, CA 91403 Palo Alto, CA 94301 amanilini@laklawyers.com BY PERSONAL SERVICE By delivering said service copy to said attorney. firm representative or party personally at BY FEDERAL EXPRESS. I delivered the envelope to a courier or driver of FEDERAL EXPRESS authorized to receive documents at 21031 Ventura Boulevard, Woodland Hills, California 91364, with delivery fees fully provided for. BY MAIL I am readily familiar with the firm's practice of collection and processing correspondence for mailing with the United States Postal Service. It is deposited with the United States Postal Service on that same day in the ordinary course of business. I am aware that on motion of a party served, service is presumed invalid if the postal cancellation date or postal meter date on the envelope is more than one day after the date of deposit for mailing contained in this affidavit. X By e-mail or electronic transmission. Pursuant to California Rules of Court, Rule 2.225(a) and (c), and Code of Civil Procedure §1011.6 regarding the acceptance of service by e-mail or electronic transmission, I caused the documents to be sent on the date shown below to the e-mail addresses of the persons listed below. I did not receive within areasonable time after the transmission any electronic message or other indication that the transmission was unsuccessful 13 Executed on February J, 2019 at Woodland Hills, California. I declare under penalty of perjury under the laws of the State of California that the foreadi g is true dnd correct. a / [ ‘Glenn Brenhafi = --