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This case was last updated from Los Angeles County Superior Courts on 02/06/2021 at 12:34:53 (UTC).

ADMIR AKSALIC VS NOBU JON TAKAHASHI, ET AL.

Case Summary

On 02/20/2019 ADMIR AKSALIC filed a Contract - Other Contract lawsuit against NOBU JON TAKAHASHI. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are DENNIS J. LANDIN and CHRISTOPHER K. LUI. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    *******6012

  • Filing Date:

    02/20/2019

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Other Contract

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

DENNIS J. LANDIN

CHRISTOPHER K. LUI

 

Party Details

Plaintiff

AKSALIC ADMIR

Defendants

TAKAHASHI FAMILY TRUST

TAKAHASHI NOBU JON

CASITAS GARDENS INC. A CALIFORNIA CORPORATION

TAKAHASHI HISAYE

DAVOODI HOOMAN

POWER FARMS LLC

CASITAS GARDENS INC.

ALLOWAY DOE 1 YEOJIN

Attorney/Law Firm Details

Plaintiff Attorneys

MURAMOTO EDWARD

WELCH DAVID

WELCH DAVID R.

IMOISILI ALUYAH I.

Defendant Attorneys

LIEBER JEFFREY EDWARD

LIEBER JEFFREY E. ESQ.

LIEBER JEFFREY

 

Court Documents

Reply - REPLY OF DEFENDANTS, HOOMAN DAVOODI, NOBU JON TAKAHASHI; HISAYE TAKAHASHI, AND CASITAS GARDENS, INC., TO PLAINTIFFS; OPPOSITION TO DEFENDANTS' MOTION TO STRIKE THE FIRST AMENDED COMPLAINT

7/24/2019: Reply - REPLY OF DEFENDANTS, HOOMAN DAVOODI, NOBU JON TAKAHASHI; HISAYE TAKAHASHI, AND CASITAS GARDENS, INC., TO PLAINTIFFS; OPPOSITION TO DEFENDANTS' MOTION TO STRIKE THE FIRST AMENDED COMPLAINT

Complaint

2/20/2019: Complaint

 

Docket Entries

  • 10/18/2021
  • Hearing10/18/2021 at 08:30 AM in Department 76 at 111 North Hill Street, Los Angeles, CA 90012; Jury Trial

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  • 10/04/2021
  • Hearing10/04/2021 at 08:30 AM in Department 76 at 111 North Hill Street, Los Angeles, CA 90012; Final Status Conference

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  • 10/08/2020
  • Docketat 10:00 AM in Department 76, Christopher K. Lui, Presiding; Trial Setting Conference - Held

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  • 10/08/2020
  • Docketat 10:00 AM in Department 76, Christopher K. Lui, Presiding; Hearing on Demurrer - without Motion to Strike - Held

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  • 10/08/2020
  • Docketat 09:30 AM in Department 76, Christopher K. Lui, Presiding; Trial Setting Conference - Not Held - Advanced and Continued - by Court

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  • 10/08/2020
  • Docketat 08:30 AM in Department 76, Christopher K. Lui, Presiding; Hearing on Demurrer - without Motion to Strike - Not Held - Advanced and Continued - by Court

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  • 10/08/2020
  • DocketMinute Order ( (Hearing on Demurrer - without Motion to Strike; Trial Setting...)); Filed by Clerk

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  • 09/30/2020
  • DocketReply (to Opposition to Demurrer); Filed by Hooman Davoodi (Defendant)

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  • 09/25/2020
  • DocketMemorandum of Points & Authorities; Filed by Admir Aksalic (Plaintiff)

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  • 09/25/2020
  • DocketAmendment to Complaint (Fictitious/Incorrect Name); Filed by Admir Aksalic (Plaintiff)

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46 More Docket Entries
  • 05/02/2019
  • DocketAmended Complaint 1st; Filed by Admir Aksalic (Plaintiff)

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  • 04/11/2019
  • DocketNotice and Acknowledgment of Receipt; Filed by Admir Aksalic (Plaintiff)

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  • 04/11/2019
  • DocketNotice and Acknowledgment of Receipt; Filed by Admir Aksalic (Plaintiff)

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  • 04/11/2019
  • DocketNotice and Acknowledgment of Receipt; Filed by Admir Aksalic (Plaintiff)

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  • 04/11/2019
  • DocketNotice and Acknowledgment of Receipt; Filed by Admir Aksalic (Plaintiff)

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  • 03/07/2019
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 02/20/2019
  • DocketNotice of Case Assignment - Unlimited Civil Case; Filed by Clerk

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  • 02/20/2019
  • DocketSummons (on Complaint); Filed by Admir Aksalic (Plaintiff)

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  • 02/20/2019
  • DocketCivil Case Cover Sheet; Filed by Admir Aksalic (Plaintiff)

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  • 02/20/2019
  • DocketComplaint; Filed by Admir Aksalic (Plaintiff)

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Tentative Rulings

Case Number: 19STCV06012    Hearing Date: October 08, 2020    Dept: 76

Plaintiff alleges that he was induced to invest in a lawful cannabis cultivation business and enter into a partnership agreement with some of the Defendants to operate the business based upon Defendants representations that Plaintiff would be given a ten-year lease of Defendant Takahashi Family Trust’s land, with two 5 year options to extend the lease, and the potential to purchase the property in the future. However, Defendant Takahashi Family Trust only signed a one-year lease. Defendants then began to shut Plaintiff out of the business into which he invested his capital and labor.

Defendants Hooman Davoodi, Nobu Jon Takahashi, Hisaye Takahashi, individually and as Trustee of the Takahashi Family Trust, and Casitas Gardens, Inc. demur to the Third Amended Complaint.

TENTATIVE RULING

Defendants Hooman Davoodi, Nobu Jon Takahashi, Hisaye Takahashi, individually and as Trustee of the Takahashi Family Trust, and Casitas Gardens, Inc.’s demurrer to the Third Amended Complaint is OVERRULED as to the first, second, fourth, fifth, seventh, and ninth causes of action. The demurrer is SUSTAINED to the third cause of action without leave to amend and with leave to amend as to the sixth and eighth causes of action.

The demurrer for failure to join an indispensable party is MOOT.

Plaintiffs are given 30 days leave to amend. Plaintiff will only be given one final opportunity to amend.

ANALYSIS

Demurrer

Meet and Confer

The Declaration of Jeffrey E. Lieber reflects that the meet and confer requirement set forth in CCP § 430.41 was satisfied.

Discussion

Defendants Hooman Davoodi, Nobu Jon Takahashi, Hisaye Takahashi, individually and as Trustee of the Takahashi Family Trust, and Casitas Gardens, Inc. demur to the Third Amended Complaint (“3AC”).

1. First Cause of Action (Fraudulent Inducement—Direct); Second Cause of Action (Constructive Fraud—Direct); Third Cause of Action (Negligent Misrepresentation—Direct).

Defendants argue that these fraud-based causes of action are not pled with the required specificity. As to the constructive fraud cause of action, Defendants argue that the existence of a fiduciary relationship is not pled.

First Cause of Action—Fraudulent Inducement

“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, the 3AC alleges that in March 2017, on April 17, 2017, on December 27, 2017, on March 7, 2018, and continuing to September 2018, Defendant Nobu Takahashi made oral representations and promises, on behalf of himself and the Takahashi Defendants (which also includes Casitas Gardens, Inc., Hisaye Takahashi, individually and as trustee of the Takahashi Family Trust—3AC, ¶ 15) to Plaintiff Aksalic that if Plaintiff managed and operated a cannabis cultivation business on the property that Plaintiff Aksalic could enter into a ten-year Lease for the Property for ten years at a monthly rental price of $5,000, and Plaintiff would have two five-year options to extend the Lease. (3AC, ¶ 39.) Plaintiff told Defendant Nobu Takahashi that in order for Plaintiff to be a part of the business, it was imperative to Plaintiff Aksalic that he would obtain a ten-year lease, and potentially have the opportunity to buy the property. (Id. at ¶ 40.) ¶ ¶ 41 of the 3AC alleges that, based on Defendant Nobu Takahashi’s representations, on April 17, 2017, Plaintiff Aksalic was induced to enter into a written partnership agreement with Defendants Nobu and Davoodi (¶ 19), was induced to enter into the Letter of Intent to form and operate Power Farms, LLC on December 26, 2017 (¶ 24), and was induced to enter into the Power Forms, LLC Operating Agreement on March 7, 2018. (¶ 25.) Plaintiff Aksalic was also induced to dedicate his full-time efforts to Power Farms, LLC, to divulge his cultivation knowledge and trade secrets, and made substantial contributions of his personal funds to Power Farms, LLC. (Id.)

The foregoing is sufficient to plead the alleged misrepresentations made to Plaintiff with specificity. The further details of the misrepresentations may be ascertained through discovery.

As to falsity of the misrepresentations, although Plaintiff was given a ten-year written leave to sign, whereby Plaintiff Aksalic would lease the Property, the Takahashi Defendants did not execute the ten-year Lease, but only entered into a short-term one-year Lease with Power Farms, LLC. (¶ 43.) Subsequently, in September 2018, Defendant Nobu told Plaintiff Aksalic that he did not have authority to enter into a ten-year Lease for the Property with Plaintiff Aksalic, and that his mother, Defendant Hisaye, such authority but refused to do so. (Id. at ¶ 44.)

Moreover, in late-2018, Nobu Takahashi shut Plaintiff Aksalic out of the business, and failed to pay Plaintiff his share of the profits, while the Takahashi Defendants continued to operate the reap profits from Power Farms, LLC. (¶ 45.)

As to knowledge of falsity of the representations, ¶ 46 alleges that Nobu Takahashi did not intend to enter into the Lease with Plaintiff at the time he made the oral promises to Plaintiff Aksalic. Moreover, Nobu Takahashi and the Takahashi Defendants intended that Plaintiff Aksalic would rely on the promises in entering into the Partnership Agreement, the LOI, form Power Forms, LLC, enter into the Operating Agreement, obtain applicable licenses, successfully manage the cultivation and distribution for Power Farm’s operations, and utilize his cultivation knowledge, skill and trade secrets until Defendants barred him from the business in September 2018. (¶ 47.) As to reliance, Plaintiff alleges that he had known the Takashi Defendants were only willing to enter into a short-term lease for the Property, Plaintiff Aksalic would not have done the foregoing. (¶ 49.)

The Court finds that fraudulent inducement is sufficiently pled. The demurrer to the first cause of action is OVERRULED.

Third Cause of Action—Negligent Misrepresentation

The elements of negligent misrepresentation are ‘(1) the misrepresentation of a past or existing material fact, (2) without reasonable ground for believing it to be true, (3) with intent to induce another's reliance on the fact misrepresented, (4) justifiable reliance on the misrepresentation, and (5) resulting damage.’ (Citation omitted.)” (National Union Fire Ins. Co. of Pittsburgh, PA v. Cambridge Integrated Services Group, Inc. (2009) 171 Cal.App.4th 35, 50.)

The same pleading specificity requirement applicable to fraud applies to pleading negligent misrepresentation. (Cadlo v. Owens-Illinois, Inc. (2004) 125 Cal.App.4th 513, 519.)

Moreover, “[t]o be actionable, a negligent misrepresentation must ordinarily be as to past or existing material facts. ‘[P]redictions as to future events, or statements as to future action by some third party, are deemed opinions, and not actionable fraud.’ (Citation omitted.)” (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 158.) There is no cause of action for a negligent false promise. (Id. at 159: Simply put, making a promise with an honest but unreasonable intent to perform is wholly different from making one with no intent to perform and, therefore, does not constitute a false promise.”)

The third cause of action is in essence one for a negligent false promise regarding the intention to enter into a ten-year lease. Because there is no cause of action for a negligent false promise, this cause of action fails as a matter of law.

The demurrer to the third cause of action is SUSTAINED without leave to amend.

Second Cause of Action—Constructive Fraud

"The elements for the cause of action for constructive fraud are: (1) fiduciary relationship; (2) nondisclosure (breach of fiduciary duty); (3) intent to deceive, and (4) reliance and resulting injury (causation)."

(Stokes v. Henson (1990) 217 Cal.App.3d 187, 197.)

¶ 56 alleges that Defendant Nobu Takahashi was a member of Power Farms, LLC, and thus owed a fiduciary duty of good faith and fair dealing to Plaintiff Aksalic pursuant to Corp. Code § 17704.09(d)[1]. ¶ 57 alleges that Defendant Nobu Takahashi breached his fiduciary duty of good faith and fair dealing by concealing and misrepresenting material facts to Aksalic, and by engaging in self-dealing. ¶ 58 alleges that Defendant Nobu Takahashi concealed his plan in order to enrich himself at Aksalic’s expense. The allege representations were, as discussed above, regarding the 10-year Lease at $5,000 monthly rent, with two five-year options to renew the lease. (3AC, ¶ 59.) Some of the alleged misrepresentations, occurred after Plaintiff and Defendant Nobu Takahashi were members of the LLC, which was formed on December 21, 2017 (¶ 23). (See 3AC, ¶ 24.) Thus, Nobu Takahashi owed a fiduciary duty to Plaintiff as a fellow member of the LLC at the time such misrepresentations were made. Moreover, ¶ 61 alleges that Defendant Nobu Takahashi concealed from Plaintiff Aksalic that he would shut Plaintiff out of the business after Plaintiff contributed his cultivation knowledge, skill and trade secrets. This is sufficient to plead constructive fraud based upon Takahashi’s fiduciary duty owed to Plaintiff Aksalic as a fellow member of the LLC.

The demurrer to the second cause of action is OVERRULED.

2. Fourth Cause of Action (Promissory Estoppel—Direct); Fifth Cause of Action (Breach of Contract—Direct); Sixth Cause of Action (Breach of Contract—Derivative).

Defendants argue that no clear and unambiguous promise concerning the terms of the lease or purchase agreement, nor are the terms of the contract alleged. Defendants argue that an agreement to agree is not enforceable.

Defendants also argue that Plaintiff Aksalic confusingly alleges that he has certain rights, while at other times claiming that the other Plaintiff, Power Farms, has such rights. Defendants do not specify to which causes of action this applies.

Fourth Cause of Action—Promissory Estoppel

The elements of a cause of action for promissory estoppel are:

". . . (1) a promise clear and unambiguous in its terms (citation omitted); (2) reliance by the party to whom the promise is made (citation omitted); (3) his reliance must be both reasonable and foreseeable (citation omitted); (4) the party asserting the estoppel must be injured by his reliance (citation omitted)."

(Thomson v. International Alliance of Theatrical Stage Employees & Moving Picture Machine Operators (1965) 232 Cal.App.2d 446, 454.)

As discussed above, Defendant Nobu Takahashi, individually and on behalf of the Takahashi Defendants, made the promises regarding the 10-year lease, with two five-year options, which caused Plaintiff to enter into the partnership agreement, the LOI, and Power Farms, LLC Operating Agreement, and to dedicate his full-time efforts to manage and operate Power Farms, LLC, provide his cultivation skill and trade secrets, and to make substantial contributions of his personal funds to Power Farms, LLC. (¶ 74.) This is sufficient to allege that Plaintiff Aksalic personally relied upon the alleged promise of a 10-year lease/two five-year options to his personal detriment. As discussed above, Plaintiff was thereafter excluded from the business, which caused him injury.

The demurrer to the fourth cause of action is OVERRULED.

Fifth Cause of Action (Breach of Contract)

To plead breach of contract, the complaint must allege: 1) existence of a contract; 2) plaintiff’s performance or excuse of non-performance; 3) defendant’s breach; and 4) resulting damage. (Wall Street Network, Ltd. v. N. Y. Times Co. (2008) 164 Cal.App.4th 1171, 1178.)

A written contract may be pleaded either by its terms—set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference—or by its legal effect. (Citations omitted.) In order to plead a contract by its legal effect, plaintiff must “allege the substance of its relevant terms. This is more difficult, for it requires a careful analysis of the instrument, comprehensiveness in statement, and avoidance of legal conclusions.” (Citation omitted.)

(McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489.)

Here, Plaintiff has pled the breach of the written Operating Agreement, which is attached to the 3AC as Exh. A. (¶ 79.) ¶ 80 summarizes the legal effect of the essential terms of the Operating Agreement. ¶ 82 alleges that, beginning in September 2018, Defendants breached the terms of the Operating Agreement by, among other things, failing to distribute the net profits to which Plaintiff was entitled under the Operating Agreement. ¶ 83 alleges that Defendants also breached the Operating Agreement by preventing Plaintiff from performing his managerial duties pursuant to the Operating Agreement by shutting Plaintiff out of the business.

The fifth cause of action is sufficiently pled. The demurrer to the fifth cause of action is OVERRULED.

Sixth Cause of Action (Breach of Contract)

The sixth cause of action is derivative claim on behalf of Power Farms, LLC based upon the Operating Agreement attached as Exh. A to the 3AC. ¶¶ 90 and 91 alleges that Defendants breached the Operating Agreement by preventing Plaintiff from performing his managerial duties pursuant to the Operating Agreement, and Power Farms has suffered extensive damages due to Plaintiff’s inability to properly manage the company. The sixth cause of action does not plead the damage to the company resulting from Plaintiff’s exclusion from management, i.e., causation of damages to Power Farms, LLC. (Troyk v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1352-53.) That is, Plaintiff does not allege that the remaining Defendants failed to manage the company such that it suffered damages it would not otherwise have suffered had Plaintiff not been excluded as manager[2].

“An essential element of a claim for breach of contract are damages resulting from the breach. [Citation.] Causation of damages in contract cases requires that the damages be proximately caused by the defendant's breach. [Citations.]” (St. Paul Fire & Marine Ins. Co. v. American Dynasty Surplus Lines Ins. Co. (2002) 101 Cal.App.4th 1038, 1060 [124 Cal. Rptr. 2d 818], italics omitted; see also Vu v.  [*1353]  California Commerce Club, Inc. (1997) 58 Cal.App.4th 229, 233 [68 Cal. Rptr. 2d 31].)   Regarding the element of causation, CACI No. 303 requires proof the plaintiff “was harmed by” a defendant's breach of contract. In Haley v. Casa Del Rey Homeowners Assn., supra, 153 Cal.App.4th 863, the court upheld as proper the trial court's instruction on the element of causation: “‘[T]hat the failure of the defendants was a substantial factor in causing damage to the plaintiffs.’” (Id. at p. 871, italics added.)

(Troyk v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1352-53.)

The demurrer to the sixth cause of action is SUSTAINED with leave to amend. Plaintiffs will only be given one final opportunity to amend.

3. Seventh Cause of Action (Breach of Fiduciary Duty—Direct); Eighth Cause of Action (Breach of Fiduciary Duty—Derivative); Ninth Cause of Action (Unfair Competition—Violation of Business & Professions Code § 17200).

Defendants argue that these causes of action are derivative of the earlier causes of action, and fail for the same reasons.

Seventh Cause of Action—Breach of Fiduciary Duty

This cause of action is based upon the fiduciary duty owed by Defendants Nobu Takahashi and Hooman Davoodi as partners of Plaintiff Aksalic pursuant to the handwritten partnership agreement. (¶ 93.) “[W]hen a partnership is created, the parties acquire rights and duties based on a fiduciary relationship. A partner is bound to act in the highest good faith to his copartner and may not obtain any advantage over him in the partnership affairs by the slightest misrepresentation or concealment. (Citations omitted.)” (Tri-Growth Centre City, Ltd. v. Silldorf, Burdman, Duignan & Eisenberg (1989) 216 Cal.App.3d 1139, 1150.)

¶ 96 alleges that Defendants breached their fiduciary duty to Plaintiff Askalic by devising a scheme to shut Plaintiff Aksalic out of the business so they could take control of the business, and by barring Plaintiff Aksalic’s access to Power Farms, LLC, so that he could not o btain his share of the net profits or perform his managerial duties. (¶ 96.) This cause of action is sufficiently pled.

The demurrer to the seventh cause of action is OVERRULED.

Eighth Cause of Action—Breach of Fiduciary Duty

This cause of action is based upon the fiduciary duty owed to Power Farms, LLC as members. (¶ 101.) Corp. Code § 1774.09(a) provides that a member owes a fiduciary duty of loyalty and care to the limited liability company.

¶¶ 102, 103 allege that Defendants breached their fiduciary duties by shutting Plaintiff Aksalic out of the business, and denying Plaintiff Aksalic his participation in the business and his net profits. However, as discussed above re: the sixth cause of action, this cause of action does not plead the damage to the company resulting from Plaintiff’s exclusion from management, i.e., causation of damages to Power Farms, LLC. That is, Plaintiff does not allege that the remaining Defendants failed to manage the company such that it suffered damages it would not otherwise have suffered had Plaintiff not been excluded as manager[3]. “For causation to be established, there must be a nexus between the compensatory damages assessed and the breaches of fiduciary duty.” (Mosier v. S. Cal. Physicians Ins. Exch. (1998) 63 Cal.App.4th 1022, 1048.)

The demurrer to the eighth cause of action is SUSTAINED with leave to amend. Plaintiffs will only be given one final opportunity to amend.

Ninth Cause of Action (Unfair Competition—Violation of Business & Professions Code § 17200).

¶ 109 alleges that Defendants have engaged in unfair competition by having Plaintiff enter into a Partnership Agreement, LOI and Operating Agreement, obligating Plaintiff to secure applicable licenses for the property, having Plaintiff manage the operating and then refusing to enter into the 10 year Lease or sell the property, and by barring Plaintiff from the business, profits, and the property. ¶ 110 alleges that Plaintiff has suffered extensive damages, and seeks restitution of all money, property, profits and other benefits acquired by Defendants by means of their unfair business practices.

A breach of contract may form the predicate for a UCL claim if it also constitutes conduct that is unlawful, unfair or fraudulent. (Arce v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471, 489-90.) Although Plaintiff may not recover damages, Plaintiff may recover restitution of money paid to Defendants in reliance upon the unlawful, unfair or fraudulent business practices, and profits unfairly obtained from Plaintiff in which Plaintiff has an ownership interest. (Californians for Disability Rights v. Mervyn's, LLC (2006) 39 Cal.4th 223, 232.)

Now, as before, no one may recover damages under the UCL (Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1266 [10 Cal. Rptr. 2d 538, 833 P.2d 545]), and now, as before, a private person may recover restitution only of those profits that the defendant has unfairly obtained from such person or in which such person has an ownership interest (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1144–1150 [131 Cal. Rptr. 2d 29, 63 P.3d 937]).

(Californians for Disability Rights v. Mervyn's, LLC (2006) 39 Cal.4th 223, 232.)

To the extent that Defendants fraudulently induced Plaintiff into investing his capital into the business, then took the business away from Plaintiff, including this right to profits, this cause of action for violation of B & P Code § 17200 is sufficiently pled.

The demurrer to the ninth cause of action is OVERRULED.

4. Indispensable Party.

Defendants argue that Alloway, as alleged member of Power Farms, LLC, is an indispensable party because his interests in the LLC may be impacted to the extent Defendant Davoodi’s interest is affected. Defendants do not specify which causes of action this affects.

The Court takes judicial notice that on September 25, 2020, Yeojin Alloway was substituted in as Doe 1. Accordingly, Defendants’ failure to join an indispensable party argument is MOOT.

Defendant Alloway may challenge whether or not he was properly joined as a Doe Defendant by way of an appropriate motion.


[1] Corp. Code § 17704.09(d) provides: “A member shall discharge the duties to a limited liability company and the other members under this title or under the operating agreement and exercise any rights consistent with the obligation of good faith and fair dealing.”

[2] The allegation that Defendants failed to distribute the net profits to Plaintiff (¶ 89) would only plead injury to Plaintiff Aksalic, not injury to Power Farms, LLC.

[3] The allegation that Defendants failed to distribute the net profits to Plaintiff ¶ 103) would only plead injury to Plaintiff Aksalic, not injury to Power Farms, LLC.

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