This case was last updated from Los Angeles County Superior Courts on 10/26/2018 at 13:28:35 (UTC).


Case Summary

On 10/04/2017 NICHOLAS LEVENSTEIN filed a Contract - Business lawsuit against JEROME CHANG, . This case was filed in Los Angeles County Superior Courts, Santa Monica Courthouse located in Los Angeles, California. The Judge overseeing this case is MITCHELL L. BECKLOFF. The case status is Pending - Other Pending.
Case Details Parties Documents Dockets


Case Details

  • Case Number:


  • Filing Date:


  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Business

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judge



Party Details












Attorney/Law Firm Details

Plaintiff Attorney


Defendant Attorney



Court Documents


8/3/2018: Answer


Docket Entries

  • 09/12/2018
  • Docketat 08:30 AM in Department M; (Order to Show Cause; Court Makes Order) -

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  • 09/12/2018
  • Docketat 08:30 am in Department WEM, Mitchell L. Beckloff, Presiding; Order to Show Cause - Court Makes Order

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  • 08/06/2018
  • Docketat 08:30 AM in Department M; Unknown Event Type - Held - Continued

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  • 08/06/2018
  • Docketat 08:30 am in Department WEM, Mitchell L. Beckloff, Presiding; OSC-Failure to File Dism. or Judg. (RE ENTRY OF DEFAULT) - OSC held & continued

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  • 08/03/2018
  • DocketAnswer; Filed by Defendant

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  • 08/03/2018
  • DocketAnswer; Filed by JEROME CHANG (Defendant); BLANKSPACES, LLC (Defendant); BLANKSPACES EXPERIENCE, LLC (Defendant) et al.

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  • 08/03/2018
  • DocketAnswer

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  • 08/03/2018
  • DocketAnswer ( **STRICKEN BY THE COURT ON 9/12/18** ); Filed by Attorney for Defendant

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  • 06/25/2018
  • Docketat 08:30 AM in Department M; (OSC-Failure to File Dism. or Judg.; OSC held & order is made) -

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  • 06/25/2018
  • Docketat 00:00 AM in Department M; Unknown Event Type

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43 More Docket Entries
  • 10/04/2017
  • DocketRequest to Waive Court Fees; Filed by Plaintiff

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  • 10/04/2017
  • DocketSummons; Filed by Plaintiff

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  • 10/04/2017
  • DocketComplaint; Filed by NICHOLAS LEVENSTEIN (Plaintiff)

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  • 10/04/2017
  • DocketSummons Filed; Filed by Plaintiff & Plaintiff In Pro Per

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  • 10/04/2017
  • DocketRequest-Waive Court Fees; Filed by Plaintiff & Plaintiff In Pro Per

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  • 10/04/2017
  • DocketOrder-Court Fee Waiver (AT TO NICHOLAS LEVENSTEIN ); Filed by Plaintiff & Plaintiff In Pro Per

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  • 10/04/2017
  • DocketRequest-Waive Addl Court Fees; Filed by Plaintiff & Plaintiff In Pro Per

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  • 10/04/2017
  • DocketOrder on Court Fee Waiver (Superior Court); Filed by Plaintiff

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  • 10/04/2017
  • DocketRequest to Waive Additional Court Fees (Superior Court); Filed by Plaintiff

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  • 10/04/2017
  • DocketComplaint Filed

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Tentative Rulings

Case Number: ****8174 Hearing Date: June 3, 2022 Dept: M

For the reasons set forth below, the Court denies Defendants’ motion for a directed verdict in their favor.

Upon suspension, a corporation “lacks the legal capacity to prosecute or defend a civil action during its suspension.” (Casiopea Bovet, LLC v. Chiang (2017) 12 Cal. App. 5th 656, 662; see Cal. Corp. Code 2205(c); Rev. & Tax. Code, 23301.) Suspended corporations cannot evade this prohibition by assignment, as the lack of capacity extends to the assignee of a suspended corporation under certain conditions. (Cal-Western Bus. Servs., Inc. v. Corning Capital Grp. (2013) 221 Cal. App. 4th 304, 312.) “In cases where the assignor of a chose in action is a suspended corporation, California courts generally have recognized that the assignee is subject to the same defenses that could have been asserted against the assignor.” (Id. at 311.) “[T]he assignee ‘stands in the shoes’ of the assignor, taking his rights and remedies, subject to any defenses which the obligor has against the assignor prior to notice of the assignment.” (Ibid.) Code of Civil Procedure section 368 codifies this law, providing that “[i]n the case of an assignment of a thing in action, the action by the assignee is without prejudice to any set-off, or other defense existing at the time of, or before, notice of the assignment.” Actual notice of the assignment of the claims is necessary to cut off defenses against the assignor being used against the assignee. (Highsmith v. Lair (1955) 44 Cal. 2d 298, 302–305; see also CCP 18(1) [“Actual notice” is an “express information of a fact”].)

Here, the 2017 assignment was proper. According to the papers, PSRE was suspended from March 1, 2013, to August 11, 2014; from December 2, 2015, to September 8, 2017; and again on November 1, 2018, until the present. On November 1, 2017, PSRE assigned all rights to Plaintiff Nicholas Levenstein and gave notice of such assignment. PSRE was in good standing during that time period. The assignment is therefore also valid. However, Levenstein’s claims are subject to any defenses which Defendants had against PSRE at the time of that assignment.

At the time of the assignment, PRSE’s 2016 contract was subject to a voidability defense. PSRE was suspended throughout 2016. When a suspended corporation enters into a contract, the contract is voidable by any party to the contract other than that taxpayer-corporation. (Rev. & Tax Code, 23304.1; Chiang, supra, 12 Cal.App.5th at 662.) Thus, Defendants may request that the 2016 contract be voided and rescinded.

Despite the voidability of the 2016 agreement, the Court still denies the motion. First, Defendant waived these objections. "A defense based on a suspended corporation's lack of capacity to sue is a plea in abatement which is not favored in law, is to be strictly construed and must be supported by facts warranting the abatement at the time of the plea." (Cal-Western, supra, 221 Cal.App.4th at 312–313, quotations and citations omitted.) In addition, “a plea in abatement such as lack of capacity to sue must be raised by defendant at the earliest opportunity or it is waived[.]” (Color–Vue, Inc. v. Abrams (1996) 44 Cal.App.4th 1599, 1604 [under certain circumstances, the "trial court may properly relieve a defendant from his waiver and permit him to assert the corporation's lack of capacity to sue"].)

Defendant does not identify when they first raised these issues, but it appears to have been at trial. Plaintiff asserts that Defendants raised the defense of the capacity of PSRE for the first time in this Motion for Directed Verdict filed after the case was submitted to the jury. The defense of capacity was never raised in Defendants’ Answer. Since Defendants did not raise this defense at the earliest possible time, Defendants may not assert this defense.

Second, Plaintiff would still have a right to restitution even if the 2016 contract is voidable and Defendant properly exercised this voidability during the pendency of this suit. Section 23304.5 states:

A party that has the right to declare a contract to be voidable pursuant to Section 23304.1 may exercise that right only in a lawsuit brought by either party with respect to the contract in a court of competent jurisdiction and the rights of the parties to the contract shall not be affected by Section 23304.1 except to the extent expressly provided by a final judgment of the court, which judgment shall not be issued unless the taxpayer is allowed a reasonable opportunity to cure the voidability under Section 23305.1. If the court finds that the contract is voidable under Section 23304.1, the court shall order the contract to be rescinded. However, in no event shall the court order rescission of a taxpayer's contract unless the taxpayer receives full restitution of the benefits provided by the taxpayer under the contract.

Therefore, even if the Court concluded that the contract was voidable due to PSRE’s suspended status, Defendants would not be entitled to a directed verdict in their favor. Therefore, the motion is denied.

Case Number: ****8174 Hearing Date: April 18, 2022 Dept: M

CASE NAME: Levenstein, et al., v. Chang, et al.

CASE NO.: ****8174

MOTION: Motion for Judgment on the Pleadings

HEARING DATE: 4/18/2022


On October 4, 2017, Plaintiff Nicholas Levenstein dba Mongoose Help Desk filed this fraud action against Defendants Jerome Chang, Blankspaces LLC (“BLA”), Blankspaces Experience LLC (“BEX”), and BDTLA Broadway LLC (“BDTLA”). The complaint states 11 causes of action for: 1) fraud; 2) breach of contract; 3) unjust enrichment; 4) breach of fiduciary duty of loyalty; 5) breach of fiduciary duty of reasonable care; 6) breach of contract; 7) conversion; 8) inducing breach of contract; 9) false advertising; 10) unfair competition; and 11) alter ego.

The complaint alleges that Pine Street Real Estate LLC (“PRSE”) assigned all of its claims against Defendants to Plaintiff on October 2, 2017. PSRE and BLA were both members of a third entity, BSM 2nd Street LLC (“BSM”). BSM leased commercial “co-working” space located in Santa Monica. PSRE had the exclusive right to manage BSM. On November 30, 2016, PSRE entered into an agreement with BLA to sell its (and Jones Parking Inc.’s) interest in BSM for $349,000.00 to BLA, accounting for 81.69% membership interest and management rights. This was secured by a promissory note. As part of the agreement, BSM agreed to comply with certain financial covenants. BSM also agreed that Plaintiff was allowed to conduct a beta-test of its Mongoose Help Desk software, including a right to access and maintain certain computers/desks at the property. BLA took possession and operations of BSM in December 2016.

In December 2016, Defendants directed BSM to cut off PSRE’s internet and desk use at the property, and otherwise interfered with PSRE’s right to conduct the beta test and use the property. Defendants stopped all payments due under the agreement since February 2017. Defendants further violated the financial covenants. On February 23, 2017, PSRE executed its security rights pursuant to the agreement, foreclosed on the collateral, cancelled the sale to BLA, and transferred back the ownership interest in BSM to PSRE (and JPI). Defendants have refused to return management of BSM to Plaintiff.

In October 2015, PSRE delegated day-to-day operations of BSM to BEX. PSRE later discovered that Chang, as manager of BEX, diverted profits from BSM members to companies he controlled. Defendants also failed to prepare and distribute certain financial records, monthly reports and distributions to members, in violation of the operating agreement.

Relevant Procedure

The Court has previously struck Plaintiff’s improperly filed First Amended Complaint and denied leave to file an amended complaint. Thus, the Complaint remains the operative pleading.

The Court reinstated Defendants’ answers on April 25, 2019. The answers were initially filed on August 3, 2018.

Legal Standard

A defendant’s motion for judgment on the pleadings may be made after the time to demur has expired and an answer has been filed. (Code Civ. Proc., 438(f).) A motion by a defendant may be made on the grounds that (1) the court “lacks jurisdiction of the subject of one or more of the causes of action alleged” or (2) the complaint or cross-complaint “does not state facts sufficient to constitute a cause of action against that defendant.” (Code Civ. Proc., 438(c).)

A motion for judgment on the pleadings has the same function as a general demurrer but is made after the time for demurrer has expired. Except as provided by statute, the rules governing demurrers apply. (Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 999.) “A motion for judgment on the pleadings is akin to a general demurrer; it tests the sufficiency of the complaint to state a cause of action. The court must assume the truth of all factual allegations in the complaint, along with matters subject to judicial notice.” (Wise v. Pacific Gas and Elec. Co. (2005) 132 Cal.App.4th 725, 738, citations omitted.) Further, like a general demurrer, a motion for judgment on the pleadings “does not lie as to a portion of a cause of action, and if any part of a cause of action is properly pleaded, the [motion] will be overruled.” (Fire Ins. Exchange v. Superior Court (2004) 116 Cal.App.4th 446, 452.)


A statutory motion for judgment on the pleadings (MJOP) may not be made past 30 days of the date the action was initially set for trial, unless otherwise provided by the Court. (Code Civ. Proc., 438(e).) Here, the trial was initially set for on October 4, 2021. The Court also continued the trial from February 28, 2022. Defendant moved solely on a statutory basis on March 23, 2022. Thus, Defendants’ statutory motion was untimely. However, this only applies to the statutory basis for the motion. (Code Civ. Proc., 438.) There is still grounds under the statute to make a MJOP as a common law motion. (See Stoops v. Abbassi (2002) 100 Cal.App.4th 644, 650 [recognizing that the motion may be made “at any time either prior to the trial or at the trial itself”]; see also Smiley v. Citibank (South Dakota) N.A. (1995) 11 Cal.4th 138, 145, fn. 2 [non-statutory MJOP upheld despite fact section 438 enacted during course of proceedings]; Cordova v. 21st Century Ins. Co. (2005) 129 Cal.App.4th 89, 109 [MSJ treated as a common law motion for judgment on the pleadings]; Tarin v. Lind (2020) 47 Cal.App.5th 395 [addressing merits of non-statutory motion].)

Thus, as a practical matter, the Court may still consider a MJOP despite non-compliance with the statutory requirements. In its discretion, the Court may consider the untimely statutory motion as a common law motion. Here, Defendants apparently made an alternate “oral” MJOP, which the Court interprets as a common law MJOP. Accordingly, the Court will exercise its discretion to consider the merits of the common law motion.


Before filing a statutory MJOP, a moving party's counsel must meet and confer, in person or by telephone, with counsel for the party who filed the pleading subject to the judgment on the pleadings motion “for the purpose of determining if an agreement can be reached that resolves the claims to be raised in the motion for judgment on the pleadings.” (CCP 439(a).) The declaration meets this requirement. (Hermansen Decl., 2.)


Plaintiff requests that the Court take judicial notice of certain court documents. (RJN Exs. 1-7.) These documents are court records and judicial notice is properly granted. (Evid. Code 452(d).) Accordingly, these requests are GRANTED.


First Cause of Action for Fraud

Defendants argue that the first cause of action for fraud pleads the generic elements of a fraud claim without the required specificity. The elements of a claim for fraud are: (1) misrepresentation of a material fact; (2) knowledge of falsity or lack of a reasonable ground for belief in the truth of the representation; (3) intent to induce reliance; (4) actual and justifiable reliance by the plaintiff; and (5) resulting damage. (Orient Handel v. United States Fid. & Guar. Co. (1987) 192 Cal.App.3d 684, 693.)

Fraud-based claims are subject to a stricter pleading standard then that governing most California causes of action. To advance a cognizable fraud claim, "every element of the cause of action . . . must be alleged in full, factually and specifically, and the policy of liberal construction of pleading will not usually be invoked to sustain a fraud claim deficient in any material respect." (Wilhelm v. Pray, Price, Williams & Russell (1986) 186 Cal.App.3d 1324, 1331.) The heightened particularity requirement necessitates pleading facts that "show how, when, where, to whom, and by what means the representations were tendered." (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) When fraud is alleged against a corporate defendant, the plaintiff must specifically allege the names of the persons who allegedly made the representation, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Tarmann v. State Farm Mutual Auto Ins. Co. (1991) 2 Cal.App.4th 153, 157.)

Here, the Complaint lacks the hallmarks of specificity. Plaintiff alleges that Defendants “represented they entered into the Agreement and the Note with the intent to perform on their obligations therein.” (Compl., 14-15, 45.) The Complaint does not reveal where these representations (i.e., the Agreement) were made, to whom the representations were made, who made the representations, and their authority to speak on behalf of Defendants. Instead, the Complaint generally alleges that “Defendants” entered into the Agreement.

Accordingly, Defendants’ is GRANTED as to the first cause of action with leave to amend.

Second, Sixth, and Eighth Cause of Action – Contract claims

Defendants argue that the contract-based causes fail because Plaintiff failed to attach the relevant agreements. To maintain a claim for breach of contract, a plaintiff must prove: (1) the existence of a contract; (2) plaintiff’s performance or excuse for nonperformance; (3) defendant’s breach; and (4) damages. (J.B.B. Investment Partners Ltd. v. Fair (2019) 37 Cal.App.5th 1, 9.)

The Court is unpersuaded that the terms of a written agreement must be set forth in verbatim in, or attached to, the complaint. The California Supreme Court has held that “[i]n an action based on a written contract, a plaintiff may plead the legal effect of the contract rather than its precise language.” (Construction Protective Services, Inc. v. TIG Specialty Insurance Co. (2002) 29 Cal.4th 189, 198-99.) To plead a contract by its legal effect, a plaintiff must allege the substance of its relevant terms. (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489.)

The Complaint identifies the Sale Agreement/Note and the Operating Agreement. (Compl., 54, 59.) The Complaint alleges each material term of the sales agreement (Compl., 14-19, 23) and the operating agreement (Compl., 12-13, 38-39, 82-85). The Complaint alleges corresponding breaches by Defendants of such agreements. (See, e.g., Compl., 21-22, 24-27, 29-30, 32-33, 37, 56, 61, 76-77, and 86-89.) Therefore, Plaintiff appropriately pleads the legal effect of the relevant contracts.

Accordingly, the motion is DENIED as to the contract causes of action.

Third Cause of Action for Unjust Enrichment

Defendants are correct that in California, there is no cause of action for unjust enrichment. (See Rutherford Holdings LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 231; Levine v. Blue Shield of California (2010) 189 Cal.App.4th 1117, 1138.) The Court notes that while courts have construed unjust enrichment claims as quasi-contract claims seeking restitution (see id.), this is recovery Plaintiff may elect to pursue under other causes of action. (See Civic Partners Stockton, LLC v. Youssefi (2013) 218 Cal.App.4th 1005, 1013.) Accordingly, Defendants’ motion is GRANTED without leave as to the third cause of action.

Fourth and Fifth Causes for Breach of Fiduciary Duty

Defendants argue that the breach of fiduciary duty causes of action fail to state a claim. The elements for a breach of fiduciary duty cause of action are “the existence of a fiduciary relationship, its breach, and damage proximately caused by that breach.” (Thomson v. Canyon (2011) 198 Cal.App.4th 594, 604.) “‘[B]efore 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.’” (Hasso v. Hapke (2014) 227 Cal.App.4th 107, 140.) “A fiduciary duty under common law may arise ‘when one person enters into a confidential relationship with another.’” (Id.)

Defendants argue that Plaintiff does not state a duty to him personally. They note that BSM is a separate entity. As noted, the Complaint alleges an assignment of claims of PSRE, including the fiduciary duty claims. (Compl., 10.) Defendants do not address whether the allegations of a duty to PSRE would be sufficient, considering the obligations pertaining to BEX’s management where Defendants allegedly undertook a fiduciary relationship. (Compl., 11, 19, 32-33, 63-65, 73-75.)

As to the assignability of these claims, under Civil Code 953 and 954, these types of claims would be assignable. Case law has provided exceptions to the assignability of claims, and that exceptions apply to “causes of action for personal injuries arising out of a tort . . . [and] those founded upon wrongs of a purely personal nature such as to the reputation or the feelings of the one injured.” (Goodley v. Wank & Wank, Inc. (1976) 62 Cal.App.3d 389, 393-394.) Other examples are consistent with the Goodley courts exception for personal claims, such as slander, assault and battery, negligent personal injuries, criminal conversation, seduction, breach of marriage promise, malicious prosecution, and others of like nature. (See Essex Ins. Co. v. Five Star Dye House, Inc. (2006) 38 Cal.4th 1252, 1260.) Here, the alleged breaches of fiduciary duties do not sound in the same “highly personal and confidential relationship” that are discussed above, and as such, the Court believes that these claims can be assigned.

Accordingly, Defendants’ motion is DENIED as to the fourth and fifth causes of action.

Seventh Cause of Action for Conversion

Defendants argue that the conversion cause of action fails because it only seeks money. Conversion is “an act of dominion wrongfully exerted over another’s personal property in denial of or inconsistent with his rights therein.” (Oakes v. Suelynn Corp. (1972) 24 Cal.App.3d 271, 278.) The elements for conversion are: “(1) the plaintiff’s ownership or right to possession of the property; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages....” (Hodges v. County of Placer (2019) 41 Cal.App.5th 537, 551.) “It is not necessary that there be a manual taking of the property; it is only necessary to show an assumption of control or ownership over the property, or that the alleged converter has applied the property to his own use.” (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 451-452.)

Indeed, generally speaking, money cannot be the subject of a cause of action for conversion unless there is an identifiable sum. (PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384, 395-397.) Cases permitting an action for conversion of money typically involve those who have misappropriated, commingled, or misapplied specific funds held for the benefit of others. (Id. at 396.) For example, conversion may be stated where an agent accepts a sum of money to be paid to another and fails to make the payment. (McKell, supra, Cal.App.4th at 1491.) In contrast, actions for the conversion of money have not been permitted when the amount of money involved is not a definite sum. (See e.g. Software Design & Application, Ltd. v. Hoefer & Arnett, Inc. (1996) 49 Cal.App.4th 472, 485 [no conversion where money was allegedly misappropriated “over time, in various sums, without any indication that it was held in trust for” plaintiff]; Vu v. California Commerce Club, Inc. (1997) 58 Cal.App.4th 229 (two gamblers who lost “approximately $1.4 million” and “approximately $120,000” was a general claim and not sufficiently ascertainable].) “[T]he simple failure to pay money owed does not constitute conversion’ . . . otherwise, the tort of conversion would swallow the significant category of contract claims that are based on the failure to satisfy ‘mere contractual right[s] of repayment.’ ” (Voris v. Lampert (2019) 7 Cal.5th 1141, 1151.) Where the money or fund is not identified as a specific thing, the action is to be considered as one upon contract or for debt or perhaps upon some other appropriate theory—but not for conversion. (Ibid.; see Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.App.4th 1134, 1150 [an expected commission was an “attenuated expectancy” that could not be converted as “property”].)

The Complaint alleges that Plaintiff has the right to possess certain “assets” that it reclaimed through foreclosure. (Compl., 91.) The Complaint references intangible property, such as interest in BSM and corresponding rights. (Compl., 14, 28, 91.) Traditionally, only tangible property could be converted. (Thrifty-Tel, Inc. v. Bezenek (1996) 46 Cal.App.4th 1559.) However, courts have expanded the tort with respect to intangible property that is merged with or reflected in something tangible, such as a check, shares of company stock, or a promissory note. (Virtanen v. O'Connell (2006) 140 Cal.App.4th 688, 706, Duke v. Superior Court (2017) 18 Cal.App.5th 490, 501, 506.) Furthermore, courts have increasingly allowed for conversion to cover intangible property. (Welco Electronics, Inc. v. Mora (2014) 223 Cal.App.4th 202, 211.) The intangibles pled, to wit, Plaintiff’s immediate interest in BSM, may be the subject of a conversion action.

As to the money, SP Investment Fund I LLC v. Cattell (2017) 18 Cal.App.5th 898 (“Cattell”) is instructive. The Cattell court held that a complaint stated a claim for conversion where an LLC purchased an assignment of interest to receive certain monetary distributions from a partnership. The assignment agreement stated that the seller would hold those proceeds for the LLC’s benefit until they could be distributed after certain conditions. (Id. at 900-902.) The seller received monetary distributions from the partnership that, under the Agreement, he held in trust for LLC’s benefit. (Ibid.) He then refused to turn those funds over to the LLC, despite that the LLC owned the money per the contract. (Ibid.) The Cattell court held that this was not a generalized claim for money because there was a specific, identifiable sum of money received by the seller for the LLC’s benefit. (Id. at 907.) Much like the distributions in Cattell, under the foregoing allegations of the foreclosure on the collateral, Defendants would arguably be holding the profits generated equitably for the benefit of Plaintiff. Plaintiff therefore may have an immediate possessory interest in such profits. Thus, the claim for the specific profits generated would suffice for a conversion claim.

Accordingly, Defendants’ motion is DENIED as to the conversion cause of action.

Ninth and Tenth Causes for False Advertising and Unfair Competition

Defendants challenge Plaintiff’s standing to assert Business and Professions Code sections 17200 and 17500 claims. Specifically, they argue that Plaintiff does not allege an economic injury to himself because of the unfair business practice or false advertisement, but instead merely alleges Defendants’ solicitation of customers. To successfully plead a UCL claim for unfair business practices, a plaintiff must allege facts justifying relief in the form of protecting the public from unfair business practices or deceptive advertising. (Day v. AT&T Corp. (1998) 63 Cal.App.4th 325, 331-332.) A plaintiff must plead and prove that the defendant engaged in a business practice that was either unlawful (i.e., is forbidden by law) or unfair (i.e., harm to victim outweighs any benefit) or fraudulent (i.e., is likely to deceive members of the public). (Albillo v. Intermodal Container Services, Inc. (2003) 114 Cal.App.4th 190, 206.)

Among competitors, “unfair” conduct is “conduct that threatens an incipient violation of an antitrust law, or violates the policy or spirit of one of those laws because its effects are comparable to or the same as a violation of the law, or otherwise significantly threatens or harms competition.” (Cel-Tech Communications, Inc. v. Los Angeles Cellular Tel. Co. (1999) 20 C4th 163, 187.)

Section 17500 provides that it is unlawful for a person or corporation to disseminate false or misleading advertisements. (Bus. & Prof. Code, 17500.) To establish a false advertising cause of action under section 17500, a plaintiff must demonstrate the advertisement was likely to deceive or mislead consumers. (Brockey v. Moore (2003) 107 Cal.App.4th 86, 98-99.) An “advertisement” is “any statement” concerning the offer of “real or personal property or to perform services” that is publicly “disseminated” in any manner. (Bus. & Prof. Code, 17500; see Cal. Prac. Guide Civ. Pro. Trial Claims and Def. Ch. 14(I)-B, at 14:131.)

Pursuant to Bus. & Prof. Code section 17204, a private party must have “suffered injury in fact and has lost money or property as a result of the unfair competition” to pursue a claim. “To satisfy the narrower standing requirements imposed by Proposition 64, a party must now (1) establish a loss or deprivation of money or property sufficient to qualify as injury in fact, i.e., economic injury, and (2) show that that economic injury was the result of, i.e., caused by, the unfair business practice or false advertising that is the gravamen of the claim.” (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 322.) “There are innumerable ways in which economic injury from unfair competition may be shown. A plaintiff may (1) surrender in a transaction more, or acquire in a transaction less, than he or she otherwise would have; (2) have a present or future property interest diminished; (3) be deprived of money or property to which he or she has a cognizable claim; or (4) be required to enter into a transaction, costing money or property, that would otherwise have been unnecessary.” (Id. at 323.)

The Complaint alleges that following Plaintiff’s reacquisition of BSM by foreclosure on the collateral, Defendants continue to falsely represent that they are the owners/managers of BSM and solicit customers as BSM. (Compl., 106.) The Complaint also alleges that on April 28, 2017, Chang registered an identically named company to PSRE (“PSRE 2”). (Compl., 112-113.) Defendants created PSRE 2 and held themselves out as PSRE 2 in order to divert payments and correspondence directed at PSRE to them instead and to confuse the public. (Compl., 114.) As a result, Plaintiff has been damaged. (Compl., 118.)

The injury in fact requirement may be met by the allegation that the false representations and advertisements resulted in the diversion of payments and customers from PSRE/Plaintiff to Defendants. Thus, Plaintiff has suffered loss-in-fact as a result of the alleged unfair competition/false advertisements.

Accordingly, Defendants’ motion is DENIED as to these claims.

Eleventh Cause of Action for Alter Ego

Defendants move against the alter ego theory on the grounds that they must be pled with specificity. Defendants offer no authority which supports this heightened pleading standard. (See A.J. Fistes Corp. v. GDL Best Contractors, Inc. (2019) 38 Cal.App.5th 677, 696 [relying on the same authorities discussed below].) In order to establish an alter ego theory, a plaintiff must allege: (1) such a unity of interest and ownership between the corporation and its equitable owner that no separation actually exists, and (2) an inequitable result if the acts in question are treated as those of the corporation alone. (Leek v. Cooper (2011) 194 Cal.App.4th 399.) Whether a party is liable under an alter ego theory is a question of fact. (Id, at 418.) In pleading an alter ego theory, one is only required to allege only “ultimate rather than evidentiary facts.” (Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 236.)

Here, Defendants request that Plaintiff provides an offer of proof regarding these allegations. However, such would be akin to requiring evidentiary facts, rather than ultimate facts. The Complaint supplies the necessary ultimate facts regarding several alter-ego factors, including inadequate capitalization, Chang’s co-mingling and personal use of funds, etc. (Compl., 124-129.)

Accordingly, Defendants’ motion is DENIED as to this claim.

Equitable Estoppel

Plaintiff argues that Defendants should be estopped from bringing this motion. Plaintiff presents no authority that a defendant may not demurrer or move for judgment on the pleadings after a default judgment was lifted. That request is denied.

Plaintiff has five days to file an amended complaint consistent with this ruling.

Case Number: ****8174    Hearing Date: April 23, 2021    Dept: M

Case Name: Nicholas Levenstein v. Jerome Chang, et al.

Case No.: ****8174

Motion: Leave to file Amended Complaint/Motion to strike

Hearing Date: 4/23/2021

Legal Standard

“The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading or proceeding by adding or striking out the name of any party, or by correcting a mistake in the name of a party, or a mistake in any other respect.” (Code Civ. Proc., ; 473.) California Code of Civil Procedure section 576 also grants the court power to allow a party to amend its pleading. California courts are required to permit liberal amendment of pleadings in the interest of justice between the parties to an action. (Dieckmann v. Superior Court (1985) 175 Cal.App.3d 345, 352.) Generally, amendment must be permitted unless there is unwarranted delay in requesting leave to amend or undue prejudice to the opposing party. (Duchrow v. Forrest (2013) 215 Cal.App.4th 1359, 1377.) Even if a good amendment is proposed in proper form, unwarranted delay in presenting it may – of itself—be a valid reason for denial. (Emerald Bay Community Association v. Golden Eagle Ins. Corp. (2005) 130 Cal.App.4th 1078, 1097.)

“Before filing a motion to strike pursuant to this chapter, the moving party shall meet and confer . . . by telephone with the party who filed the pleading that is subject to the motion to strike for the purpose of determining if an agreement can be reached that resolves the objections to be raised in the motion to strike.” (Code Civ. Proc., ; 435.5(a).)

Motions to strike are used to reach defects or objections to pleadings that are not challengeable by demurrer (i.e., words, phrases, prayer for damages, etc.). (See Code Civ. Proc., ;; 435, 436, & 437.) “The grounds for a motion to strike shall 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.) “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. [or] (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.” (Code Civ. Proc., ; 436.)


Defendants filed a motion to strike the amended complaint that Plaintiff filed without leave of the Court. In an April 25, 2019 order setting aside defendants’ defaults, the Court reinstated Defendant’s answer. Defendants cite the Court’s ruling in reply, which states, “For the foregoing reasons, the motion is GRANTED as to all Defendants. Defendant’s answers are deemed filed, and the judgment against all defendants is vacated.” (04/25/2019 Minute Order.) Here, Plaintiff filed an amended complaint on September 17, 2020 without leave of the Court. Defendant filed an answer on August 3, 2018. Therefore, the motion to strike is GRANTED, the Court strikes the September 17, 2020 complaint.

On January 13, 2021, Plaintiff filed a motion for leave to amend. Parties seeking leave to amend must follow California Rules of Court, Rule 3.1324. Defendants argue that Plaintiff has not followed Rule 3.1324. Defendants also argue that Plaintiff’s proposed complaint contains claims that Plaintiff knew about and was actively pursuing in another action, which Plaintiff dismissed voluntarily. Defendants argue that allowing leave to amend would prejudice them. Defendants contend that the new claims will require more discovery and a demurrer which would not be scheduled until after the presently scheduled trial. Here, Plaintiff did not explain the delay in the amendment. The original complaint in this action was filed in 2017. Plaintiff has not explained why the request for the amendment was not made sooner and when the fact giving rise to the amendments were discovered. The evidence demonstrates that Plaintiff knew about the facts giving rise to the amendments years ago since Plaintiff had filed other actions containing those claims, but failed to consolidate these actions.

As a result, the Court concludes that there was unwarranted delay in bring this motion for leave to amend, and therefore, the motion for leave to amend is DENIED.

Case Number: ****8174    Hearing Date: July 10, 2020    Dept: M

CASE NAME: Nicholas Levenstein v. Jerome Chang, et al.

CASE NUMBER: ****8174

MOTION: Plaintiff’s Motion for Reconsideration and motion for attorney fees

motion for reconsideration


This lawsuit was filed in October 2017. Plaintiff alleged that he served defendants on October 11, 2017 and obtained an entry of default on November 22, 2017. On November 13, 2017, however, defendant Jerome Chang received an automatic extension to file a demurrer so his answer was not due until December 20, 2017. On June 25, 2018, the Court vacated the default of defendant Chang since it was entered despite this automatic extension of time. On June 26, 2018, Plaintiff again moved for entry of default. Defendants filed answers on August 3, 2018. On September 12, 2018, at an OSC re: the June 26 request for entry of default, Judge Lawrence Cho struck the August 3, 2018, answers as untimely and entered default nunc pro tunc as of June 26, 2018. On April 25, 2019, the court found the September 12, 2018 entry of default void as to all defendants.


A court may reconsider a prior ruling if the party affected provides notice of “new or different facts, circumstances, or law.” (Code Civ. Proc., ; 1008(a).) Plaintiff argues that the Court’s April 25, 2019 order constitutes new facts or circumstances. Plaintiff further argues that this Court’s April 25, 2019 order is void because it inappropriately voided a September 12, 2018 order of a previous judge in the same department. Plaintiff argues that the September 12, 2018 order could only be reconsidered by the same judge.

Plaintiff’s position is legally incorrect. A judge of a Superior Court has the power to vacate a void order of another judge of the Superior Court who has coordinate jurisdiction with him or her. (Ross v. Murphy (1952) 113 Cal.App.2d 453, 455; see Dolan v. Superior Court of California in and for City and County of San Francisco (1920) 47 Cal.App. 235, 241 [“A void order may be swept aside whenever it comes before a court.”].) “Additionally, a second judge may reverse a prior ruling of another judge if the record shows that it was based on inadvertence, mistake, or fraud.” (In re Marriage of Oliverez (2015) 238 Cal.App.4th 1242, 1248–1249.) The record in this case indicated that there was a mistake.

Since the Court’s April 25, 2019, order does not constitute new facts or circumstances, and since Plaintiff presents no new facts, the motion is DENIED.

motion for attorneys' fees

Plaintiff moves for attorney fees under California Code of Civil Procedure ; 473(b). Plaintiff seeks $26,852.50. The hearing was initially set for February 21, 2020. On February 20, 2020, Plaintiff informed the Court that the parties had stipulated to continue the hearing until May 21, 2020. The hearing was then continued by the Court until July 10, 2020. The joint stipulation did not reset the filing dates for defendant’s opposition. The opposition was not filed until July 6, 2020 – which is approximately five months late. The Court will exercise its discretion and not consider defendant’s opposition.

Legal Standard

“Notwithstanding any other requirements of this section, the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney's sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney's mistake, inadvertence, surprise, or neglect. The court shall, whenever relief is granted based on an attorney's affidavit of fault, direct the attorney to pay reasonable compensatory legal fees and costs to opposing counsel or parties.” (Code Civ. Proc., ; 473(b).)

In determining whether requested fees are reasonable, courts consider the following factors: (1) the number of hours spent on the case, (2) reasonable hourly compensation for the attorney, (3) the novelty and difficulty of the questions involved, (4) the skill displayed in presenting them, and (5) the extent to which the litigation precluded other employment by the attorney. (Aetna Life & Cas. Co. v. City of Los Angeles (1985) 170 Cal.App.3d 865, 880.)


  1. Basis for attorney fees

Plaintiff brings this motion under section 473(b). This Court awarded Plaintiff reasonable expenses and fees pursuant to its April 25, 2019 order. Therefore, Plaintiff is entitled to reasonable attorney’s fees.

  1. Reasonableness of attorney’s fees

Plaintiff requests that the Court Order Kevin Hermansen, Daniel J. Bramzon and the Law Offices of Daniel J. Bramzon, APC to pay the award jointly and severally. Plaintiff notes that the 473(b) Motion was filed on behalf Defendants Jerome Chang, Blankspaces LLC, Blankspaces Experience, LLC and BDTLA Broadway LLC.

Plaintiff argues that it is entitled to the $26,852.50 incurred in connection with the work done on this case, constituting 50.5 hours of work as well as the filing fees. Plaintiff is seeking attorney’s fees for every action taken on this case – from researching and filing a motion for reconsideration, to attending numerous hearings where Plaintiff failed to prove up the default judgment before the court. The Court intends to limit the attorney’s fees to the time spent in preparing the opposition to the motion for default (8 hours), attending the hearing (1 hour) and preparing the motion for attorney fees (4 hours). The declaration and entries, however, are incredibly vague, and the presence of block billing is a concern to the Court. As to the hourly rate, based upon Mr. Sofris’ experience and his declaration, the Court concludes his rate is reasonable. (Sofris Decl. ¶ 3.)

The Court concludes, however, that only eight hours are reasonable for reimbursement as costs and fees pursuant to section 4739(b). Defendants Jerome Chang, Blankspaces LLC, Blankspaces Experience, LLC and BDTLA Broadway LLC are jointly ordered to pay $4,200.


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