Case Number: BC648761 Hearing Date: March 15, 2018 Dept: 47

David Bar-Or v. Cory Gamberg, et al.

(1) DEMURRER TO SECOND AMENDED COMPLAINT;

(2) MOTION TO STRIKE

MOVING PARTY: (1) & (2) Defendants Cory Gamberg, Brian Gamberg, Neal Castleman, DCX-Chol Enterprises, Inc. and Lytepost, Inc.

RESPONDING PARTY(S): (1) & (2) Plaintiffs David Bar-Or

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Defendants have allegedly breached an agreement to pay Plaintiff for the rights to programmable LCD (or is it LED—the 1AC alleged both technologies?) light technology developed by Plaintiff.

Defendants Cory Gamberg, Brian Gamberg, Neal Castleman, DCX-Chol Enterprises, Inc. and Lytepost, Inc. demur to the second amended complaint and move to strike portions thereof.

TENTATIVE RULING:

Defendants Cory Gamberg, Brian Gamberg, Neal Castleman, DCX-Chol Enterprises, Inc. and Lytepost, Inc.’s demurrer to the second amended complaint is OVERRULED as to the second cause of action as to Lytepost, Inc. and SUSTAINED without leave to amend as to Neal Castleman.

The hearing on the motion to strike is CONTINUED to April 16, 2018. Defendant is to meet and confer with Plaintiff and submit a meet and confer declaration by April 9, 2018.

DISCUSSION:

Demurrer

Meet and Confer

The Declaration of David Azar reflects that the meet and confer requirement set forth in CCP § 430.41 was satisfied.

Discussion

1. Second Cause of Action (Fraud).

Defendants argue that this cause of action is not pled with the requisite specificity as against Defendants Neal Castleman or Lytepost Inc.

“To establish a claim for deceit based on intentional misrepresentation, the plaintiff must prove seven essential elements: (1) the defendant represented to the plaintiff that an important fact was true; (2) that representation was false; (3) the defendant knew that the representation was false when the defendant made it, or the defendant made the representation recklessly and without regard for its truth; (4) the defendant intended that the plaintiff rely on the representation; (5) the plaintiff reasonably relied on the representation; (6) the plaintiff was harmed; and (7) the plaintiff’s reliance on the defendant’s representation was a substantial factor in causing that harm to the plaintiff. (Citations omitted.)” Manderville v. PCG&S Group, Inc. (2007) 146 Cal.App.4th 1486, 1498 (italics omitted).

Fraud must be pleaded with specificity rather than with “ ‘general and conclusory allegations.’ ” (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184 [132 Cal. Rptr. 2d 490, 65 P.3d 1255].) The specificity requirement means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made, and, in the case of a corporate defendant, the plaintiff must allege the names of the persons who made the representations, their authority to speak on behalf of the corporation, to whom they spoke, what they said or wrote, and when the representation was made. (Lazar v. Superior Court, supra, 12 Cal.4th at p. 645.)

We enforce the specificity requirement in consideration of its two purposes. The first purpose is to give notice to the defendant with sufficiently definite charges that the defendant can meet them. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216 [197 Cal. Rptr. 783, 673 P.2d 660].) The second is to permit a court to weed out meritless fraud claims on the basis of the pleadings; thus, “the pleading should be sufficient ‘ “to enable the court to determine whether, on the facts pleaded, there is any foundation, prima facie at least, for the charge of fraud.” ’ ” (Id. at pp. 216–217.)

West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 793.

Here, it can be inferred that Defendants Cory Gamberg and Brian Gamberg[1] made the alleged misrepresentations to Plaintiff as agents of Lytepost, Inc., because Plaintiff’s Stanchion design is being sold under the brand “LytePost.” 2AC, ¶ 19. As such, the alleged fraud is imputed to Lytepost:

The law is well established that when an agent acting within his actual or apparent authority procures the execution of a contract or the exchange of properties by means of fraud, the principal is liable for damages incurred thereby, even though the principal is innocent of personally participating in the fraud, when he accepts and retains benefits which accrue from the transaction. In the present case it appears that each of the appellants did profit by the exchange of properties and that sufficient evidence of the agencies of the parties who personally participated in the alleged fraud, is shown.

Lewis v. McClure (1932) 127 Cal.App. 439, 449.

However, there are no allegations of fraud against Neal Castleman. There is not even an allegation of conspiracy against Castleman. Plaintiff has had sufficient opportunity to plead fraud against Castleman but has failed to do so.

The demurrer to the second cause of action is OVERRULED as to Lytepost, Inc. and SUSTAINED without leave to amend as to Neal Castleman.

Motion To Strike

Defendant’s motion to strike was filed on January 29, 2018. However, Defendant did not submit a meet and confer declaration as required by CCP § 435.5 (effective January 1, 2018). As such, the hearing on the motion to strike is CONTINUED to April 16, 2018. Defendant is to meet and confer with Plaintiff and submit a meet and confer declaration by April 9, 2018. No further briefing is allowed, absent court order.

It should be also noted that Defendants’ reply papers state that “no opposition was filed by Plaintiff” as to the motion to strike. That is not necessarily true. See, Plaintiff’s Opposition to Demurrer to Second Amended Complaint and Motion to Strike,” filed March 2, 2018. (Emphasis added.)[2]

More troubling, though, is Defendants’ citation to C.R.C., rule 8.54, that “[a] failure to oppose a motion may be deemed a consent to the granting of the motion.” Defendants’ Reply to Motion to Strike, p. 1, lines 4-5. This specific rule, by its placement under Title 8, applies only to appellate proceedings, not to matters before the trial court.

Counsel is urged to be more careful in its representations to the court.

Moving Party to give notice, unless waived.

IT IS SO ORDERED.

Dated: March 15, 2018 ___________________________________

Randolph M. Hammock

Judge of the Superior Court