Case Number: BC666764 Hearing Date: March 21, 2018 Dept: 39

Perla Global Capital Advisors, LLC, et al. v. Club Acquisition Company, et al., BC666764

Motions by Defendant and Cross-Complainant Club Acquisition Company:

To Compel Interrogatory Responses from Plaintiff Perla Global Capital Advisors, LLC;

To Compel Interrogatory Responses from Plaintiff Fernando Serrano;

To Compel Inspection Demand Responses from Plaintiff Perla Global Capital Advisors, LLC;

To Strike Complaint and for Judgment on the Pleadings

Defendant’s Discovery Motions (items 1-3): DENIED

Moving Defendant Club Acquisitions Company (“CAC”) contends that it propounded discovery on September 18, 2017, including form interrogatories, special interrogatories, and inspection demands, on Plaintiff Perla and form interrogatories on Plaintiff Serrano. According to Defendant, Perla sought and obtained three extensions to respond to the discovery, with the last day to respond being December 26, 2017. Defendant further contends that Perla requested an extension on December 27, 2017, of “two and a half weeks.” Defendant indicated that it would not grant another extension, but would wait until the requested extension date to move to compel responses. Defendant contends that Plaintiffs did not serve discovery responses by January 15, 2018, leading to the subject motion.

Plaintiffs did not file an opposition to the subject motion; the parties have, however, represented to the court that Plaintiffs have served responses to the discovery at issue in the subject motion. Based upon this representation, the instant discovery motions are MOOT. Further, as responses appear to have been served, the court finds that circumstances would make the imposition of a sanction unjust against either party and the court DENIES the request for monetary sanctions, with the exception of awarding Defendant its filing fees, of $120.00 against Plaintiff Perla Global Capital Advisors, LLC; and $60.00 against Plaintiff Fernando Serrano. Monetary sanctions are due and payable by April 6, 2018.

The court notes that Defendant CAC has asserted that the discovery responses served subsequent to the filing of its motions were insufficient. Motions to compel further responses to interrogatories or a demand for inspection arise under Code of Civil Procedure, sections 2030.300 and 2031.310, respectively, and require a meet and confer declaration attesting to the parties’ good faith efforts to resolve their dispute. To the extent CAC takes issue with Plaintiffs’ discovery responses, Defendant is required to file a separate motion to compel further responses after complying with the statutory requirements. Defendant may not assert such arguments on the present motion. (Code Civ. Proc., §§ 2030.300, 2031.310.)

Motion to Strike and Motion for Judgment on the Pleadings (MJOP): DENIED
I. Meet and Confer

As of January 1, 2018, a party filing a motion to strike or a MJOP must meet and confer in person or by telephone with the party who filed the pleading that is subject to the motion, identifying all of the specific allegations that it believes are subject to be stricken and, with legal support, the basis of the deficiencies. (Code Civ. Proc., §§ 435.5, subd. (a)(1); 439, subd. (a)(1).) “The parties shall meet and confer at least five days before the date a motion for judgment on the pleadings [or motion to strike] is filed. If the parties are unable to meet and confer by that time, the moving party shall be granted an automatic 30-day extension of time within which to file a motion for judgment on the pleadings [or motion to strike], by filing and serving, on or before the date [the motions] must be filed, a declaration stating under penalty of perjury that a good faith attempt to meet and confer was made and explaining the reasons why the parties could not meet and confer.” (Code Civ. Proc., §§ 435.5, subd. (a)(2); 439, subd. (a)(2).)

Defendant CAC has not submitted a declaration in support of the motion to strike and MJOP. Nevertheless, as the motion has been fully briefed by the parties and as a determination that the meet and confer process was insufficient is not grounds to grant or deny the motion, the court will address the parties’ arguments on the merits. (See Code Civ. Proc., §§ 435.5, subd. (a)(4); 439, subd. (a)(4).)
II. Motion to Strike

Pursuant to Code of Civil Procedure, section 436, “the court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading. (b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.” The grounds for a motion to strike must “appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.” (Code Civ. Proc., § 437.)

Defendant CAC moves to strike the Complaint as to Perla on the grounds that Perla is a limited liability company and it must be represented by a licensed attorney in proceedings in court. (Mot. 3, citing Caressa Camille, Inc. v Alcoholic Beverage Control Appeals Bd. (2002) 99 Cal.App.4th 1094, 1101-1103.)

Plaintiff Perla filed an opposition, indicating that it has retained new counsel, namely the law offices of Kirschner & Associates. (Opp. 1.) Accordingly, the motion to strike is DENIED.
III. Motion for Judgment on the Pleadings
A. Legal Standard

A defendant may move for judgment on the pleadings where the court has no jurisdiction of the subject of the cause of action alleged in the complaint or the complaint does not state facts sufficient to constitute a cause of action against that defendant. (Code Civ. Proc., § 438, subd. (c)(1)(B).) A motion for judgment on the pleadings may be made until the later of a pretrial conference order has been entered pursuant to Code of Civil Procedure, section 575, or with 30 days of the date the action is initially set for trial, unless the court otherwise permits. (Code Civ. Proc., § 438, subd. (e).)

“Such motion may be made on the same ground as those supporting a general demurrer, i.e., that the pleading at issue fails to state facts sufficient to constitute a legally cognizable claim or defense.” (Ibid.) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452; see also Stevens v. Superior Court (1999) 75 Cal.App.4th 594, 601.) “When a court evaluates a complaint, the plaintiff is entitled to reasonable inferences from the facts pled.” (Duval v. Board of Tr. (2001) 93 Cal.App.4th 902, 906.) “In deciding or reviewing a judgment on the pleadings, all properly pleaded material facts are deemed to be true, as well as all facts that may be implied or inferred from those expressly alleged.” (Fire Ins. Exch. v. Superior Court (2004) 116 Cal.App.4th 446, 452 (Fire Insurance).)

A motion for judgment on the pleadings normally does not lie as to a portion of a cause of action. (Ibid.) “In the case of either a demurrer or a motion for judgment on the pleadings, leave to amend should be granted if there is any reasonable possibility that the plaintiff can state a good cause of action.” (Gami v. Mullikin Medical Ctr. (1993) 18 Cal.App.4th 870, 876.)
B. Analysis

Defendant contends that judgment should be entered on the pleadings on the second cause of action because it has no contractual obligation to compensate Serrano, and because Serrano is not an intended third party beneficiary of the parties’ contract.

First, Defendant contends that Serrano cannot recover because the Agreement does not contain a payment obligation. Paragraph 6 of the Agreement provides:

Board of Directors. Upon the execution of this Agreement, the Company shall cause Fernando Serrano (or other designated representative of Perla) to be elected to the Board of Directors of the Company, and shall continue to cause him to be elected for a period of twenty-four months following the date of this Agreement. Such appointment shall also include appointment as an officer, and shall be on customary and usual terms and conditions.

(Compl. Ex. A, at ¶ 6.)

According to Defendant, CAC is not obligated to pay any amount to Serrano as a matter of law because the Agreement does not impose a payment obligation on CAC to Serrano and contains an integration clause. (MJOP 5-6.) The court disagrees.

Paragraph 6 of the Agreement, by its own terms, states that CAC is obligated to appoint Serrano, or another designated representative of Perla to its Board of Directors “as an officer, and … on customary and usual terms and conditions.” (Compl. Ex. A, at ¶ 6.) Paragraph 30 of the Complaint alleges that CAC breached the agreement by failing and refusing to pay Serrano any portion of his salary as an officer of CAC. (Compl. 30.) A salary is included within the usual terms and conditions of an officer’s employment with a company. Viewing these allegations liberally and in context, the terms of the contract itself provide for a basis for Serrano to allege damages. Accordingly, Defendant’s first argument fails.

Second, Defendant contends that the Agreement does not establish that Serrano was a donee or creditor beneficiary and that he can therefore not recover as a third-party beneficiary to the Agreement. (Mot. 6.) “A donee beneficiary is a party to whom a promisee intends to make a gift (i.e., a benefit the promisee had no duty to confer) of a promisor’s performance.” (Souza v. Westlands Water Dist. (2006) 135 Cal.App.4th 879, 893 (Souza).) “A creditor beneficiary is a party to whom a promisee owes a preexisting duty which the promisee intends to discharge by means of a promisor’s performance.” (Id. at p. 894.)

The court disagrees. In this case, the terms of the Agreement provide that Defendant would cause Serrano (or another designated representative of Perla) to be elected to the Board of Directors of the Company, and that such an election would include an appointment as an officer that “shall be on customary and usual terms and conditions.” (Compl. Ex. A, at ¶ 6.) On the face of the Agreement, Defendant promised to make a gift to Serrano that it was otherwise under no obligation to make—i.e. election to its Board of Directors and an appointment as an officer—that was conditioned on Plaintiff Perla’s performance of its obligations. (See ibid.) Accordingly, Serrano qualified as a donee beneficiary of the Agreement. (See Souza, supra, 135 Cal.App.4th at pp. 893-894.) Defendant’s second argument also fails.

For these reasons, the court DENIES Defendant’s MJOP.