CIV532571 GARY CECCATO, ET AL. VS. 1893 WOODLAND EPA LLC, ET AL.

DAVID MONTGOMERY 1893 WOODLAND EPA LLC
PETER H. BONIS DAVID J. LONICH

HEARING ON DEMURRER TENTATIVE RULING:

Second COA – Conversion

1893 contends that “The 4ACC is alleging Ceccato converted 1893’s identity, not its TIC interest, and is liable for the damages to 1893 caused by this act.” Its complaint, however, alleges that “At all times mentioned herein, E Dontes, Inc., through an assignment of 1893’s membership interest and claims was, and still is, the rightful owner of the membership interest in 1893, and was and still is, entitled to the possession of the following personal property: the membership interest in 1893.” [4ACC, ¶ 68] Under this cause of action, the complaint further alleges the Ceccatos intended to “convert 1893’s membership interest for themselves.” [4ACC, ¶ 70] The complaint states, “As a direct and proximate result of Ceccato and Montgomery’s conversion of the LLC membership interest personal property, 1893 was forced to file a petition to reinstatement to active status with the Superior Court of San Mateo County.” [4ACC, ¶ 71] Accordingly, there appears to be no merit to 1893’s assertion that “The 4ACC is alleging Ceccato converted 1893’s identity, not its TIC interest.”

The face of the complaint reveals that 1893 does not have standing to assert conversion of E. Dontes, Inc’s ownership interest. Accordingly, the demurrer to 1893’s second cause of action for conversion is SUSTAINED. In light of this court’s policy in favor of permitting amendments, 1893 is granted leave to amend with respect to this cause of action.

Third COA – Violation of CCP § 566

1893 has cited no authority indicating that CCP § 566, relating to the appointment of a receiver, creates an independent cause of action. 1893 had the ability to challenge appointment of a receiver at the time the receiver was appointed. Notably, 1893 did not appeal the appointment of the receiver. The demurrer to 1893’s third cause of action for violation of CCP § 566 is SUSTAINED without leave to amend.

Fourth COA – Violation of Penal Code § 115

1893 concedes it cannot state a cause of action for violation of Penal Code § 115. Accordingly, the demurrer to 1893’s fourth cause of action for violation of Penal Code § 115 is SUSTAINED without leave to amend. 1893’s request that the court dismiss the cause of action without prejudice is not supported by argument or authority. As a result, that request is DENIED.

Fifth COA – Violation of Penal Code § 530.5

1893 has cited no authority in which a court has found that Penal Code § 530.5, which criminalizes identity theft, creates a private right of action. The demurrer to 1893’s fifth cause of action for violation of Penal Code § 530.5 is SUSTAINED without leave to amend

Sixth COA – Negligence Per Se

With respect to its sixth cause of action, 1893 asserts that it has “mislabeled” this cause of action as “negligence per se” instead of as a claim for “negligence.” 1893’s complaint alleges “Ceccato and Montgomery have violated California Penal Code sections 115 and 530.5 by filing false documents with the Franchise Tax Board and California Secretary of State, by signing sale documents fraudulently claiming to be the owners of 1893, by holding themselves out to be the owners and/or managers 1893, and by unlawfully taking control of 1893 and causing 1893 to be canceled by the California Secretary of State.” [4ACC, ¶ 107]

Construing the complaint liberally, 1893 has adequately pled a cause of action for negligence. A liberal reading of the complaint reveals that 1893 is asserting that the Ceccatos owed it a duty of reasonable care under the circumstances. Whether the statutes cited set forth the applicable standard of care is immaterial for purposes of evaluating whether the complaint sufficiently asserts a cause of action for negligence. The demurrer to 1893’s sixth cause of action is therefore OVERRULED.

Seventh COA – Violation of Penal Code § 496

With respect to the Seventh COA, 1893 alleges that “Ceccato and Montgomery through their intentional misrepresentations to the court, state and federal authorities, the active concealment of their activities, and their attempts to actively conceal their activity by filing cancellation documents with the California Secretary of State for 1893, did defraud and procure by false pretense the transferable membership interest in 1893.”

The Ceccatos concede that Penal Code § 496(c) creates a private right of action. However, as asserted with respect to the demurrer to the cause of action for conversion, the Ceccatos contend that the face of the complaint indicates that 1893 lacks standing to assert this cause of action. The court agrees.

1893 asserts, as it did with respect to the cause of action for conversion, that “1893 pleaded a valid cause of action for violation of Penal Code § 496 from Ceccato’s theft of 1893’s identity.” Again, however, the complaint does not mention identify theft, but rather alleges that the theft was of “the transferable membership interest in 1893.” Accordingly, for the same reasons set forth above with respect to the cause of action for conversion, the demurrer to 1893’s seventh cause of action is SUSTAINED. In light of the court’s policy in favor of permitting amendments, 1893 is granted leave to amend with respect to this cause of action.

The Ceccatos further contend that 1893 is not a “person” as set forth in Penal Code § 496 and that, as a result, they cannot assert a cause of action based on the statute. The Ceccatos, however, provide no authority defining or interpreting the term “person” as used in § 496.

If the tentative ruling is uncontested, it shall become the order of the Court. Thereafter, counsel for the Ceccatos shall prepare a written order consistent with the Court’s ruling for the Court’s signature, pursuant to California Rules of Court, Rule 3.1312, and provide written notice of the ruling to all parties who have appeared in the action, as required by law and the California Rules of Court.