2014-00159583-CU-BT

Kristie Lanktree vs. James Marshall

Nature of Proceeding:      Motion to Strike

Filed By:   Bowman, Robert C., Jr.

Defendant James Marshall, et al.’s motion to strike portions of Plaintiffs Kristie
Lanktree and Deborah Macdonald’s complaint is denied.

Plaintiffs’ objection to Defendant James Marshall’s declaration is sustained.  “The
grounds for a motion to strike shall appear from the face of the challenged pleading or
from any matter of which the court is required to take judicial notice.”  (CCP § 437(a).)
Defendant’s declaration attempting to explain the contents of documents attached to
Plaintiffs’ complaint is not properly considered on a motion to strike. In this action, Plaintiffs allege that they formed an investment group, KDDJ Investors,
LLC (KDDJ) with Defendants.  Plaintiffs allege that Marshall convinced Plaintiffs to
allow KDDJ to lease real property to Marshall’s other LLC and that improvements
without proper permits were made to the property.  They also allege that Defendant
Marshall improperly charged money to KDDJ’s credit card account.  Plaintiffs allege
that Marshall admitted causing damage to the parties’ working relationship making it
apparent that dissolution of KDDJ was required.  The parties agreed to mediate their
disputes and ultimately reached a settlement which included voluntary dissolution of
KDDJ.  Plaintiffs allege that Defendants have reneged on the agreement.

Defendants seek to strike the fifth cause of action for unjust enrichment on the basis
that no such cause of action exists.  At the oustet, and while not raised by Plaintiffs, a
motion to strike is not the proper method to attack an entire cause of action.  (Quiroz v.
Seventh Avenue Center (2006) 140 Cal.App.4th 1256, 1281.)  On this basis alone, the
motion to strike the fifth cause of action is denied.  In any event, even if considered, it
would still be denied.  While there are cases stating that unjust enrichment is not a
stand alone cause of action (e.g., Melchior v. New Line Productions, Inc. (2003) 106
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Cal.App.4   779, 794) there are, as Plaintiff points out in opposition, cases that indicate
that there is a cause of action for unjust enrichment (e.g., Lectrodryer v. Seoul Bank
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(2000) 77 Cal.App.4   723, 726.)  It has been noted that Courts have observed “a split
of authority in California as to whether a claim for unjust enrichment is recognized as
an independent cause of action.”  (Concorde Equity II, LLC v. Miller (N.D. Cal. 2010)
732 F. Supp. 2d 990, 1001.)   California courts agree that ‘unjust enrichment’ is in
effect, ‘the result of a failure to make restitution under circumstances where it is
equitable to do so.’”  (Concorde Equity II, LLC v. Miller, 732 F. Supp. 2d 990, 1001
(N.D. Cal. 2010), quoting Melchior v. New Line Prods., Inc., (2003) 106 Cal. App. 4th
779, 793.)  Unjust enrichment is synonymous with the term “restitution.”  (Dinosaur
Development, Inc. v. White (1989) 216 Cal.App.3d 1310, 1314.)  Defendant argues in
reply that where a plaintiff sues in tort as Plaintiffs have done here, restitution pursuant
to an unjust enrichment theory is unavailable rendering an unjust enrichment claim an
“unrecognized claim.”  While true cases indicate that a plaintiff “may choose not to sue
in tort, but instead seek restitution on a quasi-contract theory” (e.g. McBride v.
Boughton (2004) 123 Cal.App.4th 379, 388, Plaintiffs are permitted to plead in the
alternative.  Given this, the Court denies the motion to strike the fifth cause of action
on the basis that it is not drawn in conformity with State law.

Defendants also seek to strike Exhibits B (an email from Defendants to Plaintiffs in an
effort to resolve their dispute) and C (email confirming a settlement agreement) from
the complaint on the basis that they violate Evidence Code § 1152(a)’s prohibition
against using evidence of settlement offers to prove liability.  However, as correctly
pointed out by Plaintiff, evidence of settlement communications, while not admissible
to prove liability, may be admissible for other purposes, such as to establish that an
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agreement was reached.  (Hawran v. Hixon (2012) 209 Cal.App.4   256, 296.)

Here, with respect to Exhibits B and C, the motion is denied.  Indeed, Exhibit B, an
email sent by Defendant Marshall states that he violated the rules of the KDDJ LLC
and inflicted damage on the parties’ relationship by seeking to “expand one company
at the expense of another.”  He offers a potential solution to reach an “amicable
agreement.”  While the Exhibit cannot be used to prove Defendants’ liability, this does
not preclude the Exhibit from being used for some other relevant purpose.  The same
holds true for Exhibit C which is an email indicating that there was a “deal” and which
forwards a copy of a certificate of dissolution which Plaintiffs allege was part of the               settlement agreement reached regarding voluntary dissolution of KDDJ which
Defendants ultimately reneged upon.  Indeed, Exhibit C could simply be utilized to
show that an agreement was reached.  Evidence Code § 1152 only prohibits “the
introduction into evidence of an offer to compromise a claim for the purpose of proving
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liability for that claim.”  (Hawran, supra, 209 Cal.App.4   at 297 [emphasis in original].)
Evidence Code § 1152 is a rule of evidence and allegations in a complaint are not
evidence.  Whether or not the Exhibits B and C are ultimately offered into evidence
and attempted to be utilized to prove liability in violation of Evidence Code § 1152(a) is
not an issue that is properly addressed on a motion to strike.  Indeed, this is in fact
confirmed by Defendants reply in which they argue that introduction of the Exhibits as
evidence would ultimately be prohibited as violating Evidence Code § 1152 and also
argue that the Exhibits should be “excluded” pursuant to Evidence Code § 352. This
falls within the province of the trial judge.

Finally, the Court notes that in reply, Defendants argue for the first time that using
Exhibit C as evidence would violate Evidence Code § 1119’s prohibition of introducing
evidence of matters related to mediation.  The Court declines to consider this
argument raised for the first time in reply.

The motion to strike is denied.

The minute order is effective immediately.  No formal order pursuant to CRC Rule
3.1312 or other notice is required.