RITTERSBACHER SUNSET, LLC VS OSIK MEDIA, LLC

Superior Court of California

County of Los Angeles – West District

Beverly Hills Courthouse / Department 205

BACKGROUND

This action stems from a dispute over a billboard lease. Plaintiff Rittersbacher Sunset LLC was the owner of the real property located at 8300 West Sunset Boulevard, West Hollywood California (“Property”), which was the previous site of the Hollywood Standard Hotel. Plaintiff claims Defendants Osik Media LLC (“Osik”) and Nicholas Petralia (“Petralia”, and together with Osik, the “Osik Defendants”) wrongfully possessed and held over a portion of the Property to operate a billboard. Defendants New Tradition Media, LLC (“New Tradition”), Bret Richheimer and Evan Richheimer (collectively the “Moving Defendants”) sell advertising space on the billboard on behalf of the Osik Defendants in exchange for a portion of the revenue generated from operation of the billboard.

Plaintiff alleges Defendants engaged in a scheme or conspiracy designed to disrupt and/or cause the termination of Plaintiff’s sale of the Property to 8300 Sunset Owner LLC (the “New Owner”). Plaintiff claims Defendants were attempting to leverage the unlawful occupation of the Property to extort either a financial windfall in exchange for vacating the Property or a lucrative lease for a billboard that Defendants hoped to convert into digital signage in the future. Plaintiff alleges it suffered damages in excess of $15 million, as a result of having to reduce the purchase price to close the sale to the New Owner, to account for the continuing unlawful possession of the Osik Defendants.

The Moving Defendants filed a motion to strike on April 3, 2023. On May 11, 2023, the Court granted in part and denied in part the motion. The Court struck paragraph 81 (the request for injunctive relief) and page 17, lines 1-3 of the prayer for attorneys’ fees and injunctive relief but only against the Moving Defendants.

Plaintiff filed its Second Amended Complaint (“SAC”) on May 31, 2023. The SAC continued to seek injunctive relief against “Defendants”, and when this issue was brought to Plaintiff’s attention, it filed a notice of errata replacing the word “Defendants” with “Osik and Petralia.”

This hearing is on the Moving Defendants’ motion to strike allegations seeking injunctive relief against them, based on the Court’s May 11, 2023 Order striking the request for injunctive relief. Plaintiff does not dispute the allegations in its SAC do not comply with the Court’s May 11, 2023 order but argue that their notice of errata is sufficient to correct the errors. The errata makes clear that Plaintiff is seeking injunctive relief against only the Osik Defendants.

LEGAL STANDARD

The court may, upon motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (Code Civ. Proc., 436, subd. (a).) The court may also strike 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, subd. (b).) The grounds for a motion to strike are that the pleading has irrelevant, false, or improper matter, or has not been drawn or filed in conformity with laws. (Code Civ. Proc., 436.) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Code Civ. Proc., 437.)

ANALYSIS

There is no dispute that the allegations Moving Defendants seek to strike do not comply with the Court’s May 11, 2023 Order. To avoid confusion, the Court orders Plaintiff to file a Third Amended Complaint modifying the allegations to ensure they no longer seek injunctive relief against Moving Defendants.

CONCLUSION

For the foregoing reasons, the Court GRANTS Moving Defendants’ motion to strike paragraph 78 (“Plaintiff is informed that unless enjoined by order of this Court, Defendants will continue to engage in their unfair, unlawful, deceptive and/or fraudulent business practices) and page 17, lines 17-18 (“For injunctive relief enjoining Defendants’ unfair, unlawful, fraudulent and/or deceptive business practice.”)

IT IS SO ORDERED.

DATED: August 29, 2023

Edward B. Moreton, Jr.

Judge of the Superior Court

Superior Court of California

County of Los Angeles – West District

Beverly Hills Courthouse / Department 205

BACKGROUND

This action stems from a dispute over a billboard lease. Plaintiff Rittersbacher Sunset LLC was the owner of the real property located at 8300 West Sunset Boulevard, West Hollywood California (“Property”), which was the previous site of the Hollywood Standard Hotel. Plaintiff claims Defendants Osik Media LLC (“Osik”) and Nicholas Petralia (“Petralia”, and together with Osik, the “Osik Defendants”) wrongfully possessed and held over a portion of the Property to operate a billboard. Defendants New Tradition Media, LLC (“New Tradition”), Bret Richheimer and Evan Richheimer (collectively the “Moving Defendants”) sell advertising space on the billboard on behalf of the Osik Defendants in exchange for a portion of the revenue generated from operation of the billboard.

Plaintiff alleges Defendants engaged in a scheme or conspiracy designed to disrupt and/or cause the termination of Plaintiff’s sale of the Property to 8300 Sunset Owner LLC (the “New Owner”). Plaintiff claims Defendants were attempting to leverage the unlawful occupation of the Property to extort either a financial windfall in exchange for vacating the Property or a lucrative lease for a billboard that Defendants hoped to convert into digital signage in the future. Plaintiff alleges it suffered damages in excess of $15 million, as a result of having to reduce the purchase price to close the sale to the New Owner, to account for the continuing unlawful possession of the Osik Defendants.

The operative First Amended Complaint (“FAC”) alleges claims for (1) holdover damages (against the Osik Defendants), (2) trespass (against the Osik Defendants), (3) intentional interference with prospective economic advantage (against all Defendants), (4) intentional interference with prospective economic advantage (against the Moving Defendants), (5) intentional interference with contractual relations (against all Defendants), (6) civil conspiracy (against all Defendants), (7) unjust enrichment (against all Defendants), and (8) unlawful, unfair and fraudulent business practices in violation of Cal. Bus. & Prof. Code 17200 (against all Defendants).

This hearing is on the Moving Defendants’ demurrer and motion to strike. As to their demurrer, the Moving Defendants argue that (1) Plaintiff has failed to state a claim against the Richheimers, (2) all Plaintiff’s claims are based on litigation-related conduct and are barred by California’s litigation and settlement privilege; (3) Plaintiff’s interference claims require independent wrongful conduct which Plaintiff has not and cannot allege; (4) Plaintiff’s interference claims fail because justification appears on the face of the complaint, and (5) Plaintiff has failed to allege essential elements of its claims. As to their motion to strike, the Moving Defendants argue that (1) unapproved amendments to the caption must be stricken; (2) the conduct at issue is privileged and thus improperly included in the FAC; (3) the facts alleged do not support punitive damages or injunctive relief, and (5) the facts do not support recovery of attorneys’ fees.

REQUESTS FOR JUDICIAL NOTICE

Moving Defendants seek judicial notice of various filings in three court cases, two before the Los Angeles Superior Court (Case Nos. 22SMUD00094 and *******0828), and one before the U.S. District Court for the Central District of California (Case No. 2:22-CV-086700). The court may in its discretion take judicial notice of any court record in the United States. (Cal. Evid. Code 452(d).) “This includes any orders, findings of facts and conclusions of law, and judgments within court records. [Citations.] However, while courts are free to take judicial notice of the existence of each document in a court file, including the truth of results reached, they may not take judicial notice of the truth of hearsay statements in decisions and court files.” (In re Vicks (2013) 56 Cal.4th 274, 314.) Accordingly, the Court grants Moving Defendants’ request except as to averments in the Declaration of Walter Scheetz (Ex. D to Hou Decl.). (Bach v. McNelis (1989) 207 Cal.App.3d 852, 864-65 (the court may not take judicial notice of the truth of assertions in declarations or affidavits filed in court proceedings).)

Plaintiff also seeks judicial notice of Moving Defendants’ copyright registration. The request is unopposed. The Court grants the request pursuant to Cal. Evid. Code 452(c), as “[o]fficial acts of the legislative, executive and judicial department of the United States and of any state in the United States.” The Court also grants the request pursuant to Cal. Evid. Code 452(h), as “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Mandalini LLC v. Golebiowski, 2023 Cal. Super. LEXIS 19018 at *5) (granting judicial notice of copyright registration pursuant to Cal. Evid. Code 452(h).)

LEGAL STANDARD

“[A] demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.) A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (See Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994 (in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents).) For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true, but the reviewing court does not assume the truth of conclusions of law. (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 967.)

Further, the court may, upon motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (Code Civ. Proc., 436, subd. (a).) The court may also strike 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, subd. (b).) The grounds for a motion to strike are that the pleading has irrelevant, false, or improper matter, or has not been drawn or filed in conformity with laws. (Code Civ. Proc., 436.) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Code Civ. Proc., 437.)

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 (court shall not “sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment”); Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037 (“A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment.”); Vaccaro v. Kaiman (1998) 63 Cal.App.4th 761, 768 (“When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend.”).) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

ANALYSIS

Claims Against the Richheimers

Defendants argue that Plaintiff’s sole allegation attempting to tie the Richheimers to the actions of New Tradition is “that the Richheimers are the owners and/or otherwise in control of New Tradition, with responsibility for its day to day management and ultimate decision-making authority.” (FAC 6.) According to Defendants, this bare allegation is insufficient to create a basis for personal liability.

Defendants’ characterization of the FAC is misleading. The FAC alleges Bret and Evan Richheimer were part of a scheme to “disrupt, delay and/or cause the termination of an agreement between [Plaintiff] and [New Owner] for the sale/purchase of the [P]roperty and to leverage [the Osik Defendants’] unlawful occupation of [the Property] to extort from [Plaintiff] either a financial windfall in exchange for vacating or a lucrative lease for a billboard that all of the Defendants hoped to convert into digital signage in the future.” (FAC 1.) The FAC further alleges Bret and Evan Richheimer “deprived [Plaintiff] of the productive use of the Property for a period in excess of 2.5 years and actually disrupted [the] pending sale, resulting in damages to [Plaintiff] in excess of $15 million.” (Id.) The FAC also alleges Defendants “and each of them” engaged in various wrongdoing. (See, e.g., FAC 24-29, 32-33). These allegations are sufficient to support claims against the Richheimers, and the demurrer as to these claims is overruled.

Litigation Privilege

The Moving Defendants next argue that all of Plaintiff’s claims are based on their litigation-related conduct and are barred by California’s litigation and settlement privilege. According to Defendants, Plaintiff’s claims can be grouped into three categories, each of which is barred by the litigation or settlement privilege: (1) the Moving Defendants submitted an application for a billboard concept award without Plaintiff’s permission (FAC 14); (2) the Moving Defendants developed a “scheme” to use Osik’s wrongful holdover as a means to coerce Plaintiff to grant Osik a long term lease at the Property or alternatively, to extract a substantial cash payment ($20 million) in exchange for Osik vacating the Property (FAC 24); and (3) Defendants made statements to potential purchasers and individuals in the real estate and media industries specifically intended to disrupt, delay and/or interfere with Plaintiff’s efforts to sell the Property including that they owned the actual static billboard structure and the associated intellectual property and would be initiating litigation against Plaintiff (FAC 26).

“For well over a century, communications with ‘some relation’ to judicial proceedings have been absolutely immune from tort liability by the [litigation] privilege” set forth in Civil Code 47, subdivision (b). (Rubin v. Green (1993) 4 Cal.4th 1187, 1193.) The privilege has “an expansive reach” (id. at 1194) and applies to claims such as interference with contractual relations (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1132), interference with prospective economic relations (ibid.), and fraud (Carden v. Getzoff (1987) 190 Cal.App.3d 907, 913). It attaches well before the parties enter the courtroom, covering “‘preliminary conversations and interviews’ related to contemplated action” and other “‘steps taken prior’ to judicial proceedings.” (Rubin, 4 Cal.4th at 1195.)

The litigation privilege bars liability for “any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that ha[s] some connection or logical relation to the action.” (Silberg v. Anderson (1990) 50 Cal.3d 205, 212.) Whether the privilege shields the Moving Defendants’ actions is a question of law. (Kashian v. Harriman (2002) 98 Cal.App.4th 892, 913.)

“Any doubt about whether the privilege applies is resolved in favor of applying it.” (Id.) The litigation privilege is interpreted broadly in order to further its principal purpose of affording litigants and witnesses the utmost freedom of access to the courts without fear of harassment in derivative tort actions. (Digerati Holdings, LLC v. Young Money Entertainment, LLC (2011) 194 Cal. App.4th 873, 889.) The privilege is absolute and applies regardless of malice. (Id.)

Here, the FAC itself does not allege that any of the communications by the Moving Defendants were in the context of settlement negotiations or were otherwise litigation-related conduct. In a demurrer, the court tests the pleading alone and not the evidence or other extrinsic matters which do not appear on the face of the pleading or cannot be properly inferred from the factual allegations of the complaint. (Executive Landscape Corp. v. San Vicente Country Villas IV Assn. (1983) 145 Cal. App. 3d 496, 499.)

Further, “[a]s a general rule, the determination of whether the defendant’s conduct of interfering with existing contracts with third persons or prospective economic advantage is privileged comprises a factual issue to be decided upon all the circumstances of the case.” (Lowell v. Mother’s Cake & Cookie Co. (1978) 79 Cal.App.3d 13, 20.) This is because prelitigation communications are privileged only when they “relate[] to ligitation that is contemplated in good faith and under serious consideration.” (Eisenberg v. Alameda Newspapers, Inc. (1999) 74 Cal.App.4th 1359, 1378.) There is nothing in the FAC even remotely alleging that litigation was seriously considered by and between Moving Defendants and Plaintiff during Plaintiff’s lease negotiations with Osik preceding the filing of the unlawful detainer action.

Moving Defendants point to the fact that Plaintiff sent the Osik Defendants a Notice of Termination on September 3, 2021, which meant litigation was contemplated at least by the date of the Notice. However, the FAC alleges that once notice was sent, the Osik Defendants “did not contest [Plaintiff’s] claim that the Billboard Sublease had terminated and indicated that they would comply with [Plaintiff’s] September 13, 2021 demand.” (FAC 23.) Accordingly, even after the notice was sent, litigation was not yet contemplated by the parties.

There is also no settlement privilege. (Covell v. Superior Court (1984) 159 Cal.App.3d 39, 42-43.) Instead, settlement communications may be inadmissible in evidence to establish liability. (Evid. Code, 1152.) But Plaintiff is not relying here on settlement communications to show Osik is guilty of unlawful detainer. Rather, Plaintiff is relying on the pre-litigation communications to show Defendants were seeking to extort Plaintiff in exchange for vacating the Property. Settlement discussions are admissible when used to establish motive, good faith, bad faith or where the statements are the instrumentality of a tort. (Fletcher v. Western National (1970) 10 Cal.App.3d 376, 396.)

In any event, Plaintiff is also suing for non-communicative conduct, i.e., that Moving Defendants conspired with Osik to trespass on and unlawfully detain the Property.1 Unlawful detainers and trespasses are non-communicative acts. As a demurrer cannot be made to only part of a claim, that Plaintiff’s claims rest at least in part on non-communicative conduct precludes a demurrer. (Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal. App. 4th 1028, 1047 (“a demurrer cannot rightfully be sustained to part of a cause of action”); accord Grieves v. Sup. Ct. (1984) 157 Cal.App.3d 159, 163.)

Intentional Interference Claims

The Moving Defendants next argue that Plaintiff’s intentional interference claims cannot survive because Plaintiffs have not alleged the Moving Defendants engaged in any independent wrongful conduct. The Court disagrees.

Initially, while a claim for intentional interference with prospective economic advantage must be premised upon wrongful conduct independent of the interference itself (In Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 393), the exact opposite is true for a claim for intentional interference with contractual relations, where interference with an existing contract is generally “a wrong in and of itself.” (Ixchel Pharma LLC v. Biogen, Inc. (2020) 9 Cal.5th 1130, 1142.) “[A]n act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1159.)

Here, Plaintiff argues that the wrongful conduct giving rise to its interference claims is Moving Defendants’ conspiracy with Osik in its unlawful detainer of and/or trespass into the Property. Where conspiracy is alleged, all who participated in the common design are liable for the wrongful conduct implemented to carry it out, regardless of who actually performs the wrongful conduct. (Allen, 248 cal.App.2d at 508; see also Navarrete v. Meyer (2015) 237 Cal.App.4th 1276, 1291 (“A participant in the conspiracy ‘effectively adopts as his or her own the torts of other coconspirators within the ambit of the conspiracy.”).) Therefore, because trespass and unlawful detainer is an independently wrongful act, and Moving Defendants are alleged to be co-conspirators in such acts, Plaintiff has sufficiently alleged an independently wrongful conduct in support of its intentional interference claims.

Moving Defendants argue that the interference claims also fail because justification appears on the face of the complaint. A trial court may sustain a demurrer with respect to tortious interference claims when justification is alleged on the face of the complaint. (Herron v. State Farm Mutual Ins. Co. (1961) 56 Cal.2d 202, 205-207; Lowell v. Mother’s Cake & Cookies Co. (1978) 79 Cal.App.3d 13, 20-21.)

The defining line between conduct that is actionable and conduct that is justifiable is set forth in Show Management v. Hearst Publishing (1961) 196 Cal.App.2d 606: “Conduct is actionable, when it is indulged in solely to harm another, since the legitimate interest of the defendant is practically eliminated from consideration.” (Id. at 617-619.) In contrast, conduct is justifiable when it is “directed to the achievement of a purpose which was within the scope of their privilege of competition.” (Id.)

Here, the alleged wrongful conduct extends beyond Moving Defendants’ communications with Plaintiff and other potential purchasers of the Property to secure a lease. It also encompasses Moving Defendants’ conspiracy with Osik to wrongfully holdover the Property. A demurrer cannot lie to only a portion of the claim. (Kong, 108 Cal. App. 4th at 1047.)

In any event, Moving Defendants’ statements are not justified either. In discussing the privilege of competition, California courts look to the Restatement of Torts. (Lowell, 79 Cal.App.3d at 21.) As the Restatement makes clear, one is privileged to cause a third person not to enter into or continue a business relation with a competitor of the actor only if, among other things, the relation concerns a matter involved in the competition between the actor and competitor. (Rest., Torts 768.) Here, the FAC does not plead facts establishing that Plaintiff was a competitor of the Moving Defendants.

Moving Defendants next argue that Plaintiff’s interference with prospective economic advantage claims fail to identify any prospective business relationship of which Moving Defendants were purportedly aware at the time of the conduct at issue. Not so. The FAC identifies the prospective business relationship with the New Owner and Osik (FAC 51, 57), and so it sufficiently identifies the relationships that were interfered with.

The Moving Defendants also argue that because the Complaint alleges Moving Defendants’ scheme with Osik started in October 2021 and also that the Plaintiff entered into negotiations with the New Owner in or around December 2021 and through March 2022, they could not possibly have interfered with a business relationship that was not even in existence at the time of the purported interference. But the FAC does not allege that Defendants’ interference was limited to October 2021. To the contrary, the FAC alleges Defendants hatched their scheme in October 2021 when they acquired knowledge of Plaintiff’s intent to sell the Property, and Defendants thereafter wrongfully occupied the Property in furtherance of their common plan with knowledge that Plaintiff had entered into negotiations and later a contract with the New Owner. (FAC 24-25, 27-28, 31, 33, 52, 64.)

Moving Defendants also argue that Plaintiff has not alleged causation. According to Moving Defendants, Plaintiff attributes the economic harm to the fact that it could not meet the Condition Precedent in its contract with the New Owner, whereby the New Owner required as a condition to closing that “[Plaintiff] would dispossess Osik (either by agreement or via judgment); or Osik and [Plaintiff] would reach an agreement approved by the New Owner whereby Osik retained possession of the billboard as a tenant”. (FAC 27.) Moving Defendants claim that Plaintiff at all times had the ability to satisfy the Condition Precedent by diligently prosecuting the unlawful detainer action. The Court disagrees. The Condition Precedent required that Osik be dispossessed which Osik refused to do even after Plaintiff obtained a judgment in the unlawful detainer action ordering Osik to immediately restore possession of the Property to Plaintiff. (FAC 30-31.) Osik’s refusal (to which Defendants conspired) was thus the proximate cause why Plaintiff was ultimately unable to satisfy the Condition Precedent. (FAC 33, 66.)

Accordingly, the Court overrules the demurrer to the interference claims.

UCL Claim

As to Plaintiff’s claim for unfair, unlawful and fraudulent business practices, the Moving Defendants argue that Plaintiff must allege violation of some other law which Plaintiff fails to do; the claim must be plead with reasonable particularity which Plaintiff has not done, and Plaintiff is not entitled to injunctive relief or restitution.

“Business and Professions Code section 17200 is written in the disjunctive [and] establishes three varieties of unfair competition—acts or practices which are unlawful, or unfair, or fraudulent.” (Podolsky v. First Healthcare Corp. (1996) 50 Cal.App.4th 632, 647 [58 Cal. Rptr. 2d 89].) The three prongs of the law have different thresholds. Under its “unlawful” prong, “the UCL borrows violations of other laws … and makes those unlawful practices actionable under the UCL.” (Lazar v. Hertz Corp. (1999) 69 Cal.App.4th 1494, 1505.) Thus, a violation of another law is a predicate for stating a cause of action under the UCL’s unlawful prong. Here, Plaintiff alleges a conspiracy between the Moving Defenants and Osik to illegally holdover the Property, which is an unlawful act.

A business act or practice is “unfair” when the conduct “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 Telephone Co., supra, 20 Cal.4th at 187.) To establish an unfair business act or practice, a plaintiff must establish the unfair nature of the conduct and that the harm caused by the conduct outweighs any benefits that the conduct may have. (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1473.) Here, Plaintiff has not alleged the violation of any antitrust law.

In turn, a “fraudulent” business act or practice is one in which members of the public are likely to be deceived. (Olsen v. Breeze, Inc. (1996) 48 Cal.App.4th 608, 618 (“Fraudulent,” as used in the statute, does not refer to the common law tort of fraud but only requires a showing members of the public “are likely to be deceived”).) Thus, in order to state a cause of action based on a fraudulent business act or practice, the plaintiff must allege that consumers are likely to be deceived by the defendant's conduct. (Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 211.) Plaintiff has not alleged that any member of the public is likely to be deceived by the conduct of the Moving Defendants.

The Moving Defendants next argue that the FAC fails to allege facts entitling Plaintiff to restitution or injunctive relief under 17200. Not so. Plaintiff alleges entitlement to restitution of sums Defendants earned as a result of illegally holding over the Property, which would include profits from advertisements on the billboard. (FAC 82.)

In sum, because the Plaintiff has sufficiently alleged an unlawful act and its entitlement to restitution, the Court overrules the demurrer to Plaintiff’s UCL claim.

Civil Conspiracy and Unjust Enrichment

Moving Defendants also demur to the unjust enrichment and conspiracy claims. The Court sustains the demurrer as to the unjust enrichment claim as there is no such cause of action in California. (Melchior v. New Line Prods., Inc. (2003) 106 Cal.App.4th 779, 793; McKell v. Wash. Mut., Inc. (2006) 142 Cal.App.4th 1457, 1490; Jogani v. Superior Court (2008) 165 Cal.App.4th 901, 911.) The Court also sustains the demurrer as to the conspiracy claim because it is a theory of liability, not an independent cause of action. (Kidron v. Movie Acquisition (1995) 40 Cal.App.4th 1571, 1581.)

Motion to Strike Paragraphs 17, 24-28

Moving Defendants seek to strike Paragraphs 17, 24-28 because they purportedly relate to statements made in a judicial proceeding or any other official proceeding and are therefore privileged. As an initial matter, these paragraphs contain allegations beyond Moving Defendants’ statements including for example Plaintiff’s filing of an unlawful detainer action against Osik, the timing of Plaintiff’s negotiations with the New Owner, Plaintiff’s execution of a purchase agreement with the New Owner, and the fact that Osik continued to unlawfully possess the Property as of October 2022. Accordingly, Defendants’ motion to strike the paragraphs in their entirety based on a purported litigation privilege is overbroad.

Setting that aside, the statements alleged in these paragraphs are not facially privileged. The California Supreme Court has explained that the litigation privilege “applies to communications (1) made in a judicial proceeding or quasi-judicial proceeding, (2) by litigants or other participants authorized by law, (3) to achieve the objects of the litigation, and (4) that have some connection or logical relation to the action.” (Silberg v. Anderson (1990) 50 Cal.3d 205, 213.) Nothing in the FAC suggests any statements alleged in these paragraphs were made in connection with a judicial proceeding, to achieve the objects of the litigation, and have some connection or logical relation to the action.

Moreover, prelitigation communications including all of the negotiations preceding the unlawful detainer action, are privileged only when [they] relate[] to litigation “that is contemplated in good faith and under serious consideration.” (Eisenberg v. Alameda Newspapers Inc. (1999) 74 Cal.App.4th 1359, 1378.) There is nothing in the FAC remotely indicating that litigation was seriously considered by and between Defendants and Plaintiff during the lease negotiations preceding Plaintiff’s filing of the unlawful detainer action.

The analysis is the same with respect to Moving Defendants’ pending federal copyright action. The FAC alleges Moving Defendants told prospective purchasers of the Property that they would be suing Plaintiff. At the time of these statements (before April 1, 2022), litigation was nothing more than a bare possibility because the Moving Defendants had not yet registered their purported copyright (on July 11, 2022). (Ex. 1 to RJN; FAC 26-27)

Moving Defendants’ statements are also not protected by a settlement privilege. As discussed above, there is no settlement privilege, and while settlement communications may be inadmissible to establish liability, they are admissible when used to show motive, good faith, bad faith or where the statements are the instrumentality of a tort.

Motion to Strike Punitive Damages

Moving Defendants argue that Plaintiff cannot recover punitive damages because they have not sufficiently alleged an intentional tort. Moving Defendants raise the same arguments here as in their demurrer (i.e., Plaintiff has failed to identify an independently wrongful act and cannot overcome justification), and the Court rejects them for the same reasons.

Moving Defendants next argue that even if Plaintiff sufficiently alleged intentional torts, the claims would still not support punitive damages. The Court disagrees.

“A cause of action for forcible entry and detainer supports punitive damages[.]” (Cyrus v. Haveson (1976) 65 CalApp.3d 306, 316.) Causes of action for intentional interference with prospective economic advantage and contractual relations in the context of an occupancy’s wrongful refusal to vacate real property also support awards for punitive damages. (Ramona Manor Convalescent Hospital v. Care Enterprises (1986) 177 Cal.App.3d 1120, 1141-1143.)

In Ramona, J&S Medical Group, the owner of a 99 bed nursing home, leased its facility to Geriatrics, Inc. for a ten year term with two five year options to renew. Geriatics Inc. in turn subleased the property to Care Enterprises (“Care”). Care sought a lease extension from J&S, but J&S was dissatisfied with Care as a tenant and notified Care it would not renew its lease. J&S further advised it was negotiating a new lease with a third party – Ramona Manor Convalescent Hospital (“Ramona”). Care responded by declaring its intent to remain in possession and then suing J&S, seeking a declaration of its rights to possession. J&S cross-complained for unlawful detainer, and the trial court ordered that possession of the property be restored to J&S. (Id. at 1127-1128.) Ramona subsequently sued Care for intentional interference with contractual relations and prospective economic advantage and sought, among other things, punitive damages. (Id. at 1126-1127, 1141-1143.) The appellate court affirmed Ramona’s entitlement to punitive damages, finding that the evidence supported such an award because Care was unjustified in remaining in possession, and in failing to surrender possession, it consciously disregarded Ramona’s rights. (Id. at 1141.)

As in Ramona, here, Osik wrongfully refused to surrender possession of the Property to Plaintiff. (FAC 24, 27-31.) Osik’s refusal was unjustified as demonstrated by the fact it was found guilty of unlawful detainer. (Id. at 30-31.) Osik’s wrongful possession was made in conscious disregard of Plaintiff’s rights as the owner of the Property. As Osik’s co-conspirators, the Moving Defendants have necessarily adopted Osick’s conduct as their own and are thus liable for any punitive damages that may be awarded.

Accordingly, the Court denies the motion to strike Plaintiff’s punitive damages claim.

Motion to Strike Injunctive Relief

Moving Defendants argue that Plaintiff’s claims cannot support a request for injunctive relief because they are based on actions that have already been completed and completed actions do not provide a basis for injunctive relief. Plaintiff does not oppose this motion to strike. The Court grants the motion to strike Plaintiff’s request for injunctive relief as to the Moving Defendants, as it relates to conduct that has already been completed. (See, e.g., Wright v. Board of Public Works (1912) 163 Cal. 328, 330 (“a court of equity will not undertake to restrain the doing of an act, single and complete in its nature, that has already been performed”); McManus v. KPAL Broadcasting Corp. (1960) 182 Cal.App.2d 558, 563 (“As a general rule, an injunction lies to prevent threatened injuries and has no application to completed wrongs for the redress of which the plaintiff is relegated to an action at law.”); Scripps Health v. Marin (1999) 72 Cal.App.4th 324, 332-333 (same).)

Motion to Strike Attorneys’ Fees

Moving Defendants argue that Plaintiff’s request for attorneys’ fees should be stricken because there is no express agreement or statute supporting such an award. Plaintiff does not oppose this motion to strike. Since Plaintiff has failed to set forth any statutory or contractual basis for its request for fees, the Court strikes Plaintiff’s request for attorneys’ fees as against the Moving Defendants only. (Trope v. Katz (1995) 11 Cal.4th 274, 278 (California follows the American rule which “provides that each party to a lawsuit must ordinarily pay his own attorney fees.”).)

Motion to Strike Caption

Moving Defendants argue that without permission of the Court, Plaintiff improperly amended the caption of the FAC to include the names of Moving Defendants. Cal. Rules of Court Rule 3.1324(d) provides that “[a]n amendment to a pleading must not be made by alterations on the face of a pleading except by permission of the court. All alterations must be initialed by the court or the clerk.” The Court hereby grants Plaintiff’s permission to substitute the Moving Defendants in place of the Doe Defendants in the caption.

Conclusion

For the foregoing reasons, the Court OVERRULES IN PART and SUSTAINS IN PART the Moving Defendants’ demurrer and GRANTS IN PART and DENIES IN PART Moving Defendants’ motion to strike. The Court strikes paragraph 81 and page 17, lines 1-3 of the FAC. The Court strikes the request for injunctive relief and for attorneys’ fees as to the Moving Defendants only.

IT IS SO ORDERED.

DATED: May 11, 2023

Edward B. Moreton, Jr.

Judge of the Superior Court

Superior Court of California

County of Los Angeles – West District

Beverly Hills Courthouse / Department 205

BACKGROUND

This action stems from a dispute over a billboard lease. Plaintiff Rittersbacher Sunset LLC was the owner of the real property located at 8300 West Sunset Boulevard, West Hollywood California (“Property”), which was the previous site of the Hollywood Standard Hotel. Plaintiff claims Defendants Osik Media LLC (“Osik”) and Nicholas Petralia (“Petralia”, and together with Osik, the “Osik Defendants”) wrongfully possessed and held over a portion of the Property to operate a billboard. Defendants New Tradition Media, LLC (“New Tradition”), Bret Richheimer and Evan Richheimer (collectively the “Moving Defendants”) sell advertising space on the billboard on behalf of the Osik Defendants in exchange for a portion of the revenue generated from operation of the billboard.

Plaintiff alleges Defendants engaged in a scheme or conspiracy designed to disrupt and/or cause the termination of Plaintiff’s sale of the Property to 8300 Sunset Owner LLC (the “New Owner”). Plaintiff claims Defendants were attempting to leverage the unlawful occupation of the Property to extort either a financial windfall in exchange for vacating the Property or a lucrative lease for a billboard that Defendants hoped to convert into digital signage in the future. In so doing, Plaintiff alleges it suffered damages in excess of $15 million, as a result of having to reduce the purchase price to close the sale to the New Owner, to account for the continuing unlawful possession of the Osik Defendants.

The operative First Amended Complaint (“FAC”) alleges claims for (1) holdover damages (against the Osik Defendants), (2) trespass (against the Osik Defendants), (3) intentional interference with prospective economic advantage (against all Defendants), (4) intentional interference with prospective economic advantage (against the Moving Defendants), (5) intentional interference with contractual relations (against all Defendants), (6) civil conspiracy (against all Defendants), (7) unjust enrichment (against all Defendants), and (8) unlawful, unfair and fraudulent business practices in violation of Cal. Bus. & Prof. Code 17200 (against all Defendants).

This hearing is on the Moving Defendants’ special motion to strike. The Moving Defendants argue that a special motion to strike should be granted because their alleged wrongful conduct was done in connection with litigation and is therefore protected activity, and Plaintiff cannot show a probability of success because the alleged wrongful conduct is protected by the litigation privilege.

REQUEST FOR JUDICIAL NOTICE

Moving Defendants seek judicial notice of various filings in three court cases, two before the Los Angeles Superior Court (Case Nos. 22SMUD00094 and *******0828), and one before the U.S. District Court for the Central District of California (Case No. 2:22-CV-086700). The court may in its discretion take judicial notice of any court record in the United States. (Cal. Evid. Code 452(d).) “This includes any orders, findings of facts and conclusions of law, and judgments within court records. [Citations.] However, while courts are free to take judicial notice of the existence of each document in a court file, including the truth of results reached, they may not take judicial notice of the truth of hearsay statements in decisions and court files.” (In re Vicks (2013) 56 Cal.4th 274, 314.)

Defendants also seek judicial notice of three publications, two discussing the Standard Hotel and one covering the lawsuit. Defendants seek judicial notice of these articles to show that the Property is the subject of public interest. (Special Motion at 7.) The Court grants judicial notice for this limited purpose and does not assume the truth of the matters contained in the articles. (Ragland v. U.S. Bank National Assn. (2012) 209 Cal. App. 4th 182, 194 (refusing to take judicial notice of the truth of the contents of the Web sites and blogs, including those of the Los Angeles Times and Orange County Register; Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1141, fn. 6 (“The truth of the content of the articles is not a proper matter for judicial notice … .”); Unlimited Adjusting Group, Inc. v. Wells Fargo Bank, N.A. (2009) 174 Cal.App.4th 883, 888, fn. 4 (statements of facts contained in press release not subject to judicial notice).)

Additionally, the Moving Defendants seek judicial notice of a signage policy by the City of West Hollywood. Moving Defendants claim the signage policy supports their position that the billboard on the Property is a matter of public interest. (Special Motion at fn. 4.) The Court grants the request for judicial notice pursuant to Cal. Evid. Code 452(b) and 452(c). (Cf. Physicians Committee for Responsible Medicine v. Los Angeles Unified School Dist. (2019) 43 Cal. App. 5th 175, 183 (school board policies and regulations may be recognized by judicial notice); In re H.C. (2017) 17 Cal. App. 5th 1261, 1268 fn. 4 (taking judicial notice of policy manual because its publication is an official act of an executive department of the federal government); see also Marek v. Napa Community Redevelopment Agency (1988) 46 Cal.3d 1070, 1076, fn. 5 (county agency constituted state entity for purposes of judicial notice).)

EVIDENTIARY OBJECTIONS

The Court overrules Plaintiff’s evidentiary objections to Exhibits J, K and L to the Declaration of Alicia Hou. The exhibits are not being admitted for the truth of the matter asserted and therefore, are not hearsay. The Court sustains the objection to the Declaration of William Litvak. The Court overrules Objection Nos. 36, 72, 73, 82, 83 and sustains Objection Nos. 1-35, 37-71, 74-81, 84-88 to the Declaration of Randy Garrity.

LEGAL STANDARD

“Litigation of an anti-SLAPP motion involves a two-step process. First, the moving defendant bears the burden of establishing that the challenged allegations or claims arise from protected activity in which the defendant has engaged. Second, for each claim that does arise from protected activity, the plaintiff must show the claim has “at least ‘minimal merit.’ If the plaintiff cannot make this showing, the court will strike the claim.” (Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995, 1009.)

ANALYSIS

First Prong

On the first prong, “courts are to consider the elements of the challenged claim and what actions by the defendant supply those elements and consequently form the basis for liability. The defendant’s burden is to identify what acts each challenged claim rests on and to show how those acts are protected under a statutorily defined category of protected activity.” (Bonni, 11 Cal.5th at 1009.) “A defendant need only make a prima facie showing at this stage.” (Ojjeh v. Brown (2019) 43 Cal.App.5th 1027, 1035–1036.)

Where the plaintiff alleges multiple factual bases for a particular cause of action and the defendant moves to strike the entire cause of action, the defendant must demonstrate that each factual basis qualifies as protected activity and supplies an element of the challenged claim, as opposed to being merely contextual or incidental. (Bonni, 11 Cal.5th at 1011-1012.) If a defendant seeks to strike an entire cause of action with multiple factual bases, it is defendant’s burden to address each factual basis. (Id. at 1011.) If the defendant fails to address a particular subpart or factual basis, the defendant fails to carry its first prong burden as to that subpart or claim. (Id.) “If a cause of action contains multiple claims and a moving party fails to identify how the speech or conduct underlying some of those claims is protected activity, it will not carry its first-step burden as to those claims.” (Id.)

Here, the Moving Defendants argue that Plaintiffs’ allegations can be grouped into three categories, each of which constitutes protected activity: (1) in anticipation of and during an unlawful detainer action brought by Plaintiff against Osik, Defendants acted as part of a scheme to disrupt or cause the termination of an agreement between Plaintiff and the New Owner for the purpose of securing a favorable lease to operate billboards on the Property or alternatively to secure a substantial cash payment in exchange for Osik’s vacating the Property (FAC 1, 24, 25, 28); (2) throughout the pendency of the unlawful detainer action, Defendants made statements to potential purchasers and individuals in the real estate and media industries, specifically intended to interfere with Plaintiff’s efforts to sell the Property including that they owned the actual billboard structure and the purported intellectual property associated with it, and would be suing Plaintiff (FAC 26); and (3) Defendants submitted an application with the City of West Hollywood for permits necessary to construct and operate Defendants’ planned digital billboard on the Property, despite knowing that the Property was owned by Plaintiff and failing to secure Plaintiff’s consent (FAC 14-19).

As to the first category (the “scheme”), the Moving Defendants argue the alleged tortious actions undertaken by them were part of communications between the parties in anticipation of and in connection with the unlawful detainer action. Plaintiff sent Osik a Notice to Vacate, and then by the following month, Defendants began to negotiate avenues for Osik to remain at the Property, culminating in Plaintiff’s filing of the unlawful detainer action. (FAC 22-25.)

Plaintiff contends that their suit is not based on any of these communications but rather is based on Osik’s refusal to vacate the Property and the conduct of the Moving Defendants in conspiring with Osik in that regard. (Opp. at 8.) When a tort cause of action is alleged under a conspiracy theory, it is the acts that constitute the tort itself, rather than the acts that evidence defendant’s participation in the conspiracy, that determine whether defendant’s acts are protected activity for purposes of the first prong of the anti-SLAPP analysis.” (Spencer v. Mowat (2020) 46 Cal.App.5th 1024, 1037, 1040 (plaintiff sued defendants on conspiracy theory for public nuisance and assault and battery, which was not protected speech or petitioning activity, even though there may have been some speech and petitioning activity in connection with conspiracy).) Here, the acts that constitute the tort itself are Osik’s unlawful detainer and trespass, which are not protected activity.

As to the second category (communications to third parties), the Moving Defendants argue the statements were made in anticipation of and during litigation on their intellectual property rights. The California Supreme Court has held that “communications preparatory to or in anticipation of the bringing of an action or other official proceeding are within” the broad ambit of and entitled to protection under 425.16. (Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal. 4th 1106, 1115.) Such a statement is made in connection with an issue under judicial review and falls under 426.16(e)(2) if it relates to the substantive issues in the litigation and is directed to persons having some interest in the litigation. (Neville v. Chudacoff, (2008) 160 Cal. App. 4th 1255, 1266).

Here, Plaintiff's claims are predicated on the Moving Defendants’ communications to interested third parties (i.e., “potential purchasers and those in the real estate and media industries”) about its intellectual property rights and intent to sue Plaintiff. (Compl. 26.) Plaintiff argues that these statements are commercial speech, exempt from anti-SLAPP protection. The Court disagrees.

Pursuant to Code Civ. Proc. 425.17(c), Section 425.16 does not apply to any cause of action brought against a person primarily engaged in the business of selling or leasing goods or services if the cause of action (1) arises from the statement or conduct by the defendant “consist[ing] of representations of fact about [the defendant’s] or a business competitor’s business operations, goods or services”; (2) the defendant’s statement or conduct was “made for the purpose of obtaining approval for, promoting or securing sales or leases of … [its] goods or services,” and (3) “the intended audience is an actual or potential customer or a person likely to repeat the statement to, or otherwise influence an actual or potential buyer or customer” or the conduct “arose out of or within the context of a regulatory process, proceeding or investigation.” “The purpose of the exemption is straightforward: a defendant who makes statements about a business competitor’s goods or services to advance the defendant’s business cannot use the anti-SLAPP statute against causes of action arising from those statements.” (Simpson Strong-Tie Co. Inc. v. Gore (2010) 49 Cal.4th 12, 30.)

The commercial speech exemption “must be narrowly construed, and the plaintiffs bear the burden of proving each of its elements.” (Xu v. Huang (2021) 73 Cal.App.5th 802, 813.) According to the California Court of Appeal, “[ ]425.17 subdivision (c) and subsequent case law indicate that the provision exempts ‘only a subset of commercial speech’ – specifically comparative advertising.” FilmOn.com Inc. v. Double Verify Inc. (2019) 7 Cal.App.5th 133, 147; see also Mendoza v. ADP Screening & Selection Services Inc. (2010) 182 Cal.App.4th 1644, 1652 “the Legislature appears to have enacted 425.17(c), for the purpose of exempting from the reach of the anti-SLAPP statute cases involving comparative advertising by business.”). Defendant’s alleged speech does not involve comparative advertising, and therefore, 425.17 subdivision (c) does not apply.

Plaintiff next argues that the Moving Defendant’s statements to interested third parties were not made in connection with an issue under consideration by a legislative, executive or judicial body, because the statements were made on or about January 13, 2022, prior to the initiation of the unlawful detainer action and have nothing to do with any of the substantive issues in that case. The Court agrees. The Moving Defendants’ alleged statements did not relate to the singular issue involved in the unlawful detainer action: whether Osik was entitled to remain in possession of the portion of the Property where the billboard structure was located. The statements were also not directed to any person having any involvement in the unlawful detainer action. (See Seltzer v. Barnes (2010) 182 Cal.App.4th 953, 962 (a statement is made “in connection with” a proceeding if it relates to substantive issues in the proceeding and is directed to persons having some potential interest in the proceedings).)

The analysis is the same with regards to the pending federal copyright action against Plaintiff. At the time of the alleged communications to third parties in January 2022, there was no copyright litigation. The Moving Defendants did not file their copyright action until November 2022. Defendants could not have seriously and in good faith considered litigation against Plaintiff in January 2022, because they had no lawful right to initiate any lawsuit until they registered their copyright in their digital billboard design on July 11, 2022. (Ex. VV to Garritty Decl.; see also People ex. rel. Allstate Ins. Co. v. Rubin (2021) 66 Cal.App.5th 493, 499-502 (Prelitigation communications may constitute protected activity, but only if those communications are “relate[d] to litigation that is contemplated in good faith and under serious consideration.” Litigation is not “under [serious] consideration” if it is only a “possibility.” (internal quotations and citations omitted); Bel Air Internet, LLC v. Morales (2018) 20 Cal.App.5th 924, 941 (when a cause of action arises from conduct that is a ‘necessary prerequisite’ to litigation, but will lead to litigation only if negotiations fail or contractual commitments are not honored, future litigation is merely theoretical rather than anticipated and the conduct is therefore not protected prelitigation activity).)

The Moving Defendants’ statements to third parties also have nothing to do with any issue of public interest. “The fact that a broad and amorphous public interest can be connected to a specific dispute is not sufficient to meet the statutory requirements” of the anti-SLAPP statute. (Workman v. Colichman (2019) 33 Cal. App. 5th 1039, 1048.) In articulating what constitutes a matter of public interest, courts look to certain specific considerations such as “whether the subject of the speech or activity was a person or entity in the public eye” or “could affect a large number of people beyond the direct participants … and whether the activity occur[red] in the context of an ongoing controversy, dispute or discussion” or “affect[ed] a community in a manner similar to that of a government entity.” (FilmOn.com, Inc., 7 Cal.5th at 145-146.)

Here, none of the parties is a person or entity in the public eye. Further, the statements at issue do not concern the Standard Hotel itself nor its designation as a historic property. Instead, the statements at issue concern ownership of a billboard structure and purported intellectual property in the design of a digital billboard. These issues do not affect a large number of people beyond the direct participants. And there was no ongoing controversy, dispute or discussion at the time Moving Defendants made their private statements to various potential purchasers. (See Du Charme v. Int’l Brotherhood of Electrical Workers (2003) 110 Cal.App.4th 107, 119 (“in cases where the issue is not of interest to the public at large, but rather to a limited, but definable portion of the public (a private group, organization or community), the constitutionally protected activity must, at a minimum occur in the context of an ongoing controversy, dispute or discussion …”).)

As to the third category (the Application to the City of West Hollywood), the Moving Defendants contend the application is protected activity under 425.16 subdvs. (e)(1) (e)(2) because it was a “written or oral statement or writing made before a legislative, executive or judicial proceeding or any other official proceeding authorized by law” or “under consideration or review by a legislative, executive or judicial body.” The application, however, is not a basis for Plaintiff’s claims but is merely an incidental, background fact. Allegations of protected conduct that are “merely incidental” or “collateral” or “that merely provide context without supporting a claim for recovery” are not subject to 425.16. (Baral v. Schmitt (2016) 1 Cal.th 376, 394; see also Gotterba v. Travolta (2014) 228 Cal.App.4th 35, 42 (“In deciding whether a lawsuit is a SLAPP action, the trial court must distinguish between speech or petitioning activity that is mere evidence related to liability, and liability that is based on speech or petitioning activity.”) (emphasis in original).)

Because the Moving Defendants have not met the first prong, the burden does not shift to Plaintiff on the second prong, and the Court denies the special motion to strike.

Conclusion

For the foregoing reasons, the Court DENIES the Moving Defendants’ special motion to strike.

IT IS SO ORDERED.

DATED: May 4, 2023

Edward B. Moreton, Jr.

Judge of the Superior Court