Case Name: Mimi Karas & Joseph Durante v. Suba Energy, LLC, et al.
Case No.: 18CV330021

This is an action arising from a dispute over 1) whether a February 2011 Intellectual Property Transfer and Asset Purchase Agreement (“Agreement”) between PF1, Inc., (“PF1”) a currently suspended Californian corporation, and Alterlume, Inc., a Delaware Corporation, was breached and also 2) who has standing to sue for any alleged breach or any other claim arising from the Agreement.

The original and still operative Complaint by Plaintiffs Mimi Karas Durante and Joseph Durante (“Plaintiffs”), alleged original (minority) shareholders and investors of PF1, states several causes of action: 1) “Breach of Contract and Accounting,” 2) “Tortious Breach of Contract and Accounting,” 3) Breach of Fiduciary Duties, 4) Aiding and Abetting Breach of Fiduciary Duties, 5) Conspiracy to Breach Fiduciary Duties 6) Fraudulent Concealment; 7) Constructive Fraud; 8) “Tortious Inducement to Breach of Contract” 9) “Tortious Interference with Contractual Relations” 10) “Tortious Interference with Prospective Economic Relations” 11) “Civil Conspiracy to Interference with Contractual Relations and with Prospective Economic Relations” 12) “Tortious Breach of Covenant of Good Faith and Fair Dealing” (mislabeled as a second “eleventh” cause of action in the body of the Complaint); 13) Constructive Trust (mislabeled as the twelfth cause of action in the body of the Complaint, and 14) Injunctive Relief (mislabeled as the thirteenth cause of action in the body of the Complaint, alleged against individual defendants Frank Leamy and Gerald McIntyre only).

The Complaint admits at ¶11 that Plaintiffs are minority shareholders of PF1 and the four excerpted pages from the Agreement attached to the Complaint as Exhibit A establish that the only parties to the Agreement were PF1 and Alterlume, Inc. The Complaint at ¶¶ 28-29 alleges that individual defendants McIntyre and Leamy are PF1’s largest shareholders, are or were directors of the corporation, and that Defendant Leamy was PF1’s CEO during the relevant time period.

Currently before the Court are two separate demurrers to the Complaint. The first is by Defendants Alterlume, Inc., Suba Technology, Suba Technology, LLC and individual defendants Randy Granado, Keith Schwartz, and Rick Suba (collectively the “Alterlume/Suba Defendants”). The second is by individual defendant James Reddell (“Reddell”). As an initial matter the Court notes that Code of Civil Procedure (“CCP”) §430.41 requires the parties to meet and confer “in person or by telephone” before the filing of a demurrer and requires counsel for the demurring party to submit a declaration describing the meet and confer efforts. The mere exchange of letters and/or emails does not comply with the plain terms of the statute. It appears from the declarations submitted by Angela Hoffman (counsel for the Alterlume/Suba Defendants) and Patricia Bonheyo (counsel for Defendant Reddell) that Plaintiff Counsel (and Plaintiff) Joseph Durante may only be willing to meet and confer through letters or emails. All counsel are directed to meet and confer “in person or by telephone” as required by the plain language of the statute moving forward.

I. Requests for Judicial Notice
1. Alterlume/Suba Defendants’ request
In support of their demurrer the Alterlume/Suba Defendants have submitted a request for judicial notice of two documents and one fact (the absence of a document). The two documents are: 1) A complete copy of the February 2011 Agreement between PF1 and Alterlume (Ex. A), and; 2) a copy of a June 9, 2006 Judgment of this Court (Hon. Levinger) handed down in a lawsuit between PF1 and Benjamin Acatrinei, case no. 2005-1-CV-045714 (Ex. B). The “fact” Defendants wish the Court to take notice of is “[t]he absence from the court’s records of any satisfaction of judgment filed in connection with the Judgment,” submitted as exhibit B.

Notice of Exhibit A, the complete copy of the Agreement, is GRANTED pursuant to Evidence Code §452(h) as the existence of the Agreement is undisputed. Where a contract forms the basis of a pleading but is not attached to it, the trial court may take judicial notice of such contract on demurrer at the request of the demurring party. (See Ingram v. Flippo (1999) 71 Cal.App.4th 1280, 1285 n.3 [taking judicial notice of a letter and media release that formed the basis of the allegations in the complaint]; See also Ascherman v. General Reinsurance Corp. (1986) 183 Cal.App.3d 307, 310-311 [appellate court took judicial notice of terms of reinsurance contract referenced in complaint, where the parties did not dispute the existence of the contract].) While here four pages from the Agreement are attached to the Complaint as Exhibit A the Court finds that it is appropriate to take judicial notice of the complete Agreement (which runs over 30 pages) as the Complaint is replete with references to the Agreement, allegations as to what it purportedly required, and who may enforce it.

Notice of Exhibit B, the Judgment in case no. 2005-1-CV-045714, is GRANTED pursuant to Evidence Code §452(d) (court records). As the court record is a judgment, notice may be taken of its contents and their legal effect. The judgment was, in part, a stipulated judgment and among other things stated that as a “pre-condition” to the Judgment Defendant Acatrinei was to deliver to PF1 a license for certain intellectual property and an indemnity agreement.

Notice of the fact that the Court’s record for case no. 2005-1-CV-045714 does not indicate that a satisfaction of judgment was filed is also GRANTED pursuant to §452(d). However the Court notes that taking notice of the fact that such a satisfaction of judgment is not present in the Court’s file does not, in and of itself, establish that the terms of the stipulated judgment were never complied with or that PF1 did not at some point receive a license for the use of the intellectual property that was later the subject of the purchase agreement between PF1 and Alterlume.

2. Defendant Reddell’s request
In support of his demurrer Defendant Reddell asks the Court to take judicial notice of three documents (exhibits A-C) pursuant to Evidence Code §§ 452(c)&(h). Notice of Exhibit A, a copy of an August 1, 2018 letter from the California Franchise Tax Board stating that PF1 is “not in good standing,” is GRANTED pursuant to §452(c) as the letter is an official act. Also the Complaint itself alleges that PF1 is a suspended corporation. Notice of Exhibit B, a copy of a printout of an internet search result for PF1, Inc. on the Secretary of State’s website, is DENIED. (See Searles Valley Minerals Operations, Inc. v. State Bd. of Equalization (2008) 160 Cal.App.4th 514, 519 [refusing to take notice of web site pages of the American Coal Foundation and the U.S. Dept. of Energy]; Duronslet v. Kamps (2012) 230 Cal.App.4th 717, 737 [refusing to take judicial notice of information on the Cal. Bd. of Registered Nursing web site].) The document itself states that the information provided is not a “complete or certified record of an entity.” Notice of Exhibit C, a copy of the Franchise Tax Board’s official form for “Application for Certificate of Revivor—Corporation” is GRANTED pursuant to §452(h). The Court notes that the form indicates that those who can complete the application on behalf of the entity to be revived includes “any stockholder.”

II. Alterlume/Suba Defendants’ demurrer to the Complaint
The Court in ruling on demurrer treats it “as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.” (Piccinini v. Cal. Emergency Management Agency (2014) 226 Cal.App.4th 685, 688, citing Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) An example of the kind of “contentions, deductions or conclusions of fact or law” that the Court does not accept as true on demurrer are the Complaint’s allegations that Plaintiffs as individuals have standing to sue under the Agreement between PF1 and Alterlume despite not their not being parties or signatories to the Agreement. Those allegations of material fact that are properly pleaded are accepted as true on demurrer. “A demurrer tests only the legal sufficiency of the pleading. It admits the truth of all material factual allegations in the complaint; the question of plaintiff’s ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court.” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213-214.)

Allegations are not accepted as true on demurrer if they contradict or are inconsistent with facts judicially noticed. Similarly, facts appearing in exhibits attached to the complaint (part of the “face of the pleading”) are given precedence over inconsistent allegations in the complaint. (See Holland v. Morse Diesel Int’l, Inc. (2001) 86 Cal.App.4th 1443, 1447; Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1474 [rejecting allegation contradicted by judicially noticed facts]. See also Witkin, California Evidence (4th Ed., 2000) 1 Judicial Notice §3(3) [“It has long been established in California that allegations in a pleading contrary to judicially noticed facts will be ineffectual; i.e., judicial notice operates against the pleader.”])

The Alterlume/Suba Defendants demurrer to all causes of action alleged against them (the first 13 causes of action alleged in the Complaint) on two grounds: 1) uncertainty, and; 2) failure to state sufficient facts. (See Alterlume/Suba Demurrer at pp. 2:4-5:15.)

The demurrer to all causes of action on the ground that they are each uncertain is OVERRULED. “[D]emurrers for uncertainty are disfavored and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1135; see also Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal.App.4th 612, 616 [“A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.”]) While the Complaint is poorly drafted, so much so that at points it borders on incoherent and improperly refers to “Defendants” in the plural such that it is difficult to discern who is alleged to have done what, the very fact that the Alterlume/Suba Defendants are able to present specific arguments as to the how they believe the targeted causes of action fail to state sufficient facts to support claims against them indicates that they understand what the targeted claims at least attempt to allege and there is no “uncertainty” in the sense that they are able to respond to the various allegations.

The Alterlume/Suba Defendants’ demurrer to the first 13 causes of action in the Complaint on the ground that they fail to state sufficient facts is SUSTAINED.

Taking the broadest argument first, the judicially noticed material (the complete Agreement between PF1 and Alterlume) establishes that Plaintiffs have no standing to sue for any alleged breach of the Agreement, or to claim that any damages PF1 may have suffered from any claims arising from the Agreement constitutes a damage suffered by them personally rather than PF1 that was proximately caused by the demurring Defendants.

Having taken judicial notice of the Agreement the interpretation of its terms becomes a question of law for the Court that controls over any conflicting allegations in the Complaint. “The interpretation of a contract is a question of law unless the interpretation turns on the credibility of extrinsic evidence.” (Sierra Vista Regional Medical Center v. Bonta (2003) 107 Cal.App.4th 237, 245.) Generally, “It is . . . solely a judicial function to interpret a written instrument unless the interpretation turns on the credibility of extrinsic evidence.” (Consolidated Theatres, Inc. v. Theatrical Stage Employees Union (1968) 69 Cal.2d 713, 724.) While a plaintiff’s reasonable interpretation of ambiguous contract language may be accepted on demurrer, whether a contract (or a specified portion of it) is in fact ambiguous and whether a plaintiff’s interpretation is reasonable remain questions for the Court on demurrer. Here the Court finds that the terms of the Agreement are not ambiguous and that it cannot be reasonably interpreted as a “Merger Agreement,” as Plaintiffs repeatedly call it, as both PF1 and Alterlume continued to exist as separate corporations incorporated in different states after the Agreement was signed.

Plaintiffs are not signatories to the contract, only PF1 and Alterlume are. Plaintiffs therefore have no direct right to enforce any term of the Agreement or sue for any claimed breach of its terms, any claimed interference with its expected benefits or any claimed fraudulent concealment. Nor can Plaintiffs make any claim to be express or intended third party beneficiaries of the Agreement. As the Alterlume/Suba Defendants correctly point out paragraph 12.2 of the Agreement (“Successors and Assigns”) states in pertinent part that “Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.” This language controls over any conflicting or contradictory allegations in the Complaint in which Plaintiffs allege a right to sue for alleged wrongdoing or harm arising from the Agreement.

Even if the Agreement did not contain this express language disavowing any intention to vest enforcement rights in third parties, the Agreement could not be reasonably interpreted as allowing minority shareholders of one of the signatories like Plaintiffs to enforce its terms as claimed third party beneficiaries. Civil Code §1559 provides: “A contract, made expressly for the benefit of a third person, may be enforced by him at any time before the parties thereto rescind it.” This requires two things to be established: that there was a contract in the first place, and that the contract was expressly intended to benefit a third party. A third parties’ ability to enforce a contract is “predicated upon the contracting parties’ intent to benefit” the third party. (Hess v. Ford Motor Co. (2002) 27 Cal.4th 516, 524.) “Ascertaining this intent is a question of ordinary contract interpretation. [Citation.] Thus, ‘[t]he circumstance that a literal contract interpretation would result in a benefit to the third party is not enough to entitle that party to demand enforcement.’” (Ibid.) “Because third party beneficiary status is a matter of contract interpretation, a person seeking to enforce a contract as a third party beneficiary ‘must plead a contract which was made expressly for his [or her] benefit and one in which it clearly appears that he [or she] was a beneficiary.’ ‘Expressly,’ [as used in the statute and case law,] means ‘in an express manner; in direct or unmistakable terms; explicitly; definitely; directly.’ ‘[A]n intent to make the obligation inure to the benefit of the third party must have been clearly manifested by the contracting parties.’” (Schauer v. Mandarin Gems of Calif., Inc. (2005) 125 Cal.App.4th 949, 957-958, internal citations omitted, emphasis added.) Even if Paragraph 12.2 were removed the Agreement still could not be reasonably interpreted as demonstrating any express intent to benefit identified third parties. The mere the fact that Agreement (like any contract between corporations) may have been expected to benefit the shareholders of the respective signatories does not make those shareholders express third party beneficiaries.

Based on the Court’s interpretation of the judicially noticed Agreement Plaintiffs’ first, second, eighth, ninth, tenth, eleventh and twelfth causes of action clearly fail to state sufficient facts to support the claims as alleged against the Alterlume/Suba Defendants. Plaintiffs have no standing to sue for any claim arising out of the Agreement between PF1 and Alterlume and cannot claim that any harm allegedly suffered by PF1 (including not receiving a cash payment it was allegedly entitled to under the Agreement) is a injury to Plaintiffs as individuals that was proximately caused by the Alterlume/Suba Defendants. Plaintiffs also have failed to allege sufficient facts to demonstrate that they are entitled to an accounting (as alleged in the first and second causes of action). “A cause of action for an accounting requires a showing that a relationship exists between the plaintiff and defendant that requires an accounting, and that some balance is due the plaintiff that can only be ascertained by an accounting.” (Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 179.) Plaintiffs have not sufficiently alleged any direct relationship between themselves and the Alterlume/Suba Defendants that requires an accounting.

Plaintiffs have also failed to sufficiently allege that any of the Alterlume/Suba Defendants owed them (or PF1) a fiduciary duty. “The elements of a cause of action for breach of fiduciary duty are the existence of a fiduciary relationship, its breach, and damage proximately caused by the breach.” (Knox v. Dean (2012) 205 Cal App 4th 417, 432, citing City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 483.) “While breach of fiduciary duty is a question of fact, the existence of legal duty in the first instance and its scope are questions of law.” (Kirschner Brothers Oil, Inc. v. Natomas Co. (1986) 185 Cal.App.3d 784, 790.) “Before a person can be charged with a fiduciary obligation, he must either knowingly undertake to act on behalf and for the benefit of another, or must enter into a relationship which imposes that undertaking as a matter of law.” (Oakland Raiders v. National Football League (2005) 131 Cal.App.4th 621, 632.) However, “[a] mere contract or a debt does not constitute a trust or create a fiduciary relationship.” (Id at 634; see also Wolf v. Superior Court (2003) 107 Cal.App.4th 25, 30-31, 33-34.) The failure to establish that the Alterlume/Suba Defendants owed Plaintiffs any fiduciary duty means that the third cause of action clearly fails to state sufficient facts.

The fourth cause of action also fails to state sufficient facts, both because it fails to precisely explain the alleged breach of fiduciary duties owed by others to Plaintiffs as individuals (as opposed to PF1) that the Alterlume/Suba Defendants provided substantial assistance to (with the specific intention of assisting) and also because-again-Plaintiffs cannot claim that any harm allegedly suffered by PF1 is any injury to themselves as individuals proximately caused by these Defendants. There can be no aiding or abetting without establishing the commission of the underlying tort. (See Casey v. U.S. Bank Nat. Assn. (2005) 127 Cal.App.4th 1138, 1145-1146; Nasrawi v. Buck Consultants, LLC (2014) 231 Cal.App.4th 328, 343-343 [discussing elements of aiding and abetting generally and aiding and abetting a breach of fiduciary duty].)

The fifth cause of action also fails to state sufficient facts as “in California a civil conspiracy to commit tortious acts can, as a matter of law, only be formed by parties who are already under a duty to the plaintiff, the breach of which will support a cause of action against them—individually and not as conspirators—in tort. Restated, in cases where the plaintiff alleges the existence of a civil conspiracy among the defendants to commit tortious acts, the source of substantive liability cannot arise out of participation in the conspiracy alone.” (Chavers v. Gatke Corp. (2003) 107 Cal.App.4th 606, 614, emphasis in original, internal citations omitted.) As the Alterlume/Suba Defendants did not owe a fiduciary duty to Plaintiffs they could not conspire to breach fiduciary duties.

The failure to properly allege any duty owed by these Defendants to Plaintiffs as individuals also means the sixth cause of action fails to state sufficient facts as an essential element of a cause of action for fraudulent concealment is that the defendant was under a duty to disclose material facts to the plaintiff. (See Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 868.) The outcome is the same for the seventh cause of action for constructive fraud as alleged against these Defendants. (See Prakashpalan v. Engstrom, Lipscomb & Lack (2014) 223 Cal.App.4th 1105, 1131 [“Constructive fraud is a unique species of fraud applicable only to a fiduciary or confidential relationship. Constructive fraud arises on a breach of duty by one in a confidential or fiduciary relationship to another which induces justifiable reliance by the latter to his prejudice.”], internal citation and quotation marks omitted.)

Finally, as all of the other claims alleged against the Alterlume/Suba Defendants presently fail to state sufficient facts, the thirteenth cause of action for constructive trust (“based on breach of fiduciary duties”) fails to state sufficient facts as well. A constructive trust is an equitable remedy, not a cause of action in and of itself, which can be imposed against one who wrongfully detains a thing by fraud, accident, mistake, undue influence, the violation of a trust, or other wrongful act. (See Civil Code, §§ 2223 and 2224; see also Habitat Trust for Wildlife, Inc. v. City of Rancho Cucamonga (2009) 175 Cal.App.4th 1306, 1332; PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384, 398; Meister v. Mensinger (2014) 230 Cal.App.4th 381, 399.) A cause of action seeking to impose a constructive trust will generally be allowed so long as it is predicated upon an underlying claim of fraud, breach of fiduciary duty, or other wrongful act entitling the plaintiff to some relief. (See Ehret v. Ichioka (1967) 247 Cal.App.2d 637, 642; see also Michaelian v. State Comp. Ins. Fund (1996) 50 Cal.App.4th 1093, 1114 [“A cause of action for constructive trust is not based on the establishment of a trust, but consists of fraud, breach of fiduciary duty or other act which entitles the plaintiff to some relief. Relief, in a proper case, may be to make the defendant a constructive trustee with a duty to transfer to the plaintiff. [Citation.] Pleading requirements are: (1) facts constituting the underlying cause of action, and (2) specific identifiable property to which defendant has title.”].) Again, even if it is assumed for purposes of argument that that something was wrongfully detained from PF1 Plaintiffs have not shown that they as individual minority shareholders have standing to seek a constructive trust on PF1’s behalf.

Leave to amend is DENIED as to the second (tortious breach of contract), twelfth (tortious breach of implied covenant of good faith and fair dealing) and thirteenth (Constructive Trust) causes of action. While Plaintiffs’ Opposition generally argues that the Alterlume/Suba Defendants’ demurrer should be overruled in its entirety, they offer no defense of these three causes of action or any explanation as to how they could be amended. Rather they claim that they will “withdraw” these claims without prejudice. (See Opp. to Alterlume/Suba Demurrer at p. 12:5-14.) As no partial dismissal has been filed by Plaintiffs, the Court instead will sustain the demurrer to these three causes of action (as alleged against the Alterlume/Suba Defendants) without leave to amend.

For the sole reason that this is the first challenge to the pleading in this action, 10 days’ leave to amend is GRANTED as to the first (only as alleged against Alterlume, Inc.), third, fourth, fifth, sixth, seventh, eighth, ninth, tenth and eleventh causes of action as alleged against the Alterlume/Suba Defendants. Plaintiffs are cautioned that if they cannot identify a basis for their standing and/or a fiduciary duty owed to them as individuals other than the Agreement these claims as alleged against the Alterlume/Suba Defendants will likely not survive another demurrer.

Plaintiffs are reminded that when a demurrer is sustained with leave to amend, the leave must be construed as permission to the pleader to amend the causes of action to which the demurrer has been sustained, not add entirely new causes of action. (Patrick v. Alacer Corp. (2008) 167 Cal.App.4th 995, 1015.) To raise claims entirely unrelated to those originally alleged requires either a new lawsuit or a noticed motion for leave to amend. Absent prior leave of court an amended complaint raising entirely new and different causes of action may be subject to a motion to strike. (See Harris v. Wachovia Mortg., FSB (2010) 185 Cal.App.4th 1018, 1023 [“Following an order sustaining a demurrer or a motion for judgment on the pleadings with leave to amend, the plaintiff may amend his or her complaint only as authorized by the court’s order. The plaintiff may not amend the complaint to add a new cause of action without having obtained permission to do so, unless the new cause of action is within the scope of the order granting leave to amend.”])

III. Defendant Reddell’s demurrer to the Complaint.

Defendant Reddell demurrers to the third through twelfth causes of action on the ground that they fail to state sufficient facts as alleged against him. (See Notice of Demurrer and Demurrer at pp. 2:8-3:23.) He also purports to demurrer to the “entire complaint,” but as the entire complaint is not alleged against him this is disregarded.

Reddell notes that the Complaint admits (at ¶10) that he was PF1’s “corporate accountant and Agent for Service of Process,” and that in that role he could not have owed any duty of care to Plaintiffs as individuals or as minority shareholders. Any duty he owed was owed to PF1. He also points that, like Plaintiffs, he was not a signatory or party to the Agreement and that he could not be responsible for any alleged breach of its terms (even if Plaintiffs had standing to sue for any such breach) or be the proximate cause of any of Plaintiffs’ claimed damages stemming from the Agreement.

Reddell’s demurrer to the third, fourth, fifth, sixth and seventh causes of action on the ground that they each fail to state sufficient facts as alleged against him is SUSTAINED. As discussed above in relation to the Alterlume/Suba Defendants’ demurrer, Plaintiffs have failed to state sufficient facts to establish the existence of a fiduciary duty owed by Reddell to them personally as minority shareholders of PF1, so the third cause of action fails to state sufficient facts as alleged against Reddell. As the existence of a fiduciary duty owed (a question of law for the Court on demurrer) has not been established, the fourth, fifth, sixth and seventh causes of action fail to state sufficient facts as alleged against Reddell because of the failure to establish any underlying fiduciary duty or relationship that would include a duty to disclose.

Reddell’s demurrer to the contract based claims alleged against him, the eighth, ninth, tenth, eleventh and twelfth causes of action, on the ground that they fail to state sufficient facts is also SUSTAINED. Again as stated above in the discussion of the Alterlume/Suba Defendants’ demurrer, Plaintiffs are neither parties to the Agreement nor express third party beneficiaries (the unambiguous terms of the Agreement controlling over any contrary allegations in the Complaint). Plaintiffs have therefore failed to sufficiently allege that they have standing as individuals or minority shareholders of PF1 to sue for any claim arising out of the Agreement or to claim that any damages allegedly suffered by PF1 constitute an injury to them personally.

Leave to amend is DENIED as to the tenth (tortious interference with contractual relations) and eleventh (conspiracy to interfere with contractual relations and prospective economic relations) causes of action as alleged against Reddell as Plaintiffs do not oppose Reddell’s demurrer to these claims and state in their opposition (at p. 5:22-6:1) that they “concur” with Reddell as to those two claims and consent to “dismissal without prejudice.” Leave to amend is also DENIED as to the twelfth cause of action as alleged against Reddell as Plaintiffs’ opposition to Reddell’s demurrer also states (at p. 5:19-20) that the “12th Cause of Action for Constructive Trust is being withdrawn without prejudice.” Properly numbered, the Complaint’s twelfth cause of action is Plaintiffs’ claim for “tortious breach of covenant of good faith and fair dealing.” The thirteenth cause of action is for constructive trust and is not alleged against Defendant Reddell. The Court assumes Plaintiffs intended to refer to the true twelfth cause of action and the Court will dispose of all three of these claims now as no partial dismissal has been filed.

As to the other causes of action targeted by Defendant Reddell, solely because this is the first challenge to the pleading (and not because Plaintiffs have met their burden to demonstrate how the claims could be amended to state sufficient facts) 10 days’ leave to amend is GRANTED as to the third, fourth, fifth, sixth, seventh, eighth and ninth causes of action as alleged against Defendant Reddell.