This case was last updated from Los Angeles County Superior Courts on 12/20/2020 at 00:53:49 (UTC).

STEPHEN NEMETH VS PHILIPPE DIAZ, ET AL.

Case Summary

On 06/17/2019 STEPHEN NEMETH filed a Contract - Other Contract lawsuit against PHILIPPE DIAZ. This case was filed in Los Angeles County Superior Courts, Santa Monica Courthouse located in Los Angeles, California. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    *******1106

  • Filing Date:

    06/17/2019

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Other Contract

  • Courthouse:

    Santa Monica Courthouse

  • County, State:

    Los Angeles, California

 

Party Details

Plaintiff

NEMETH STEPHEN

Defendants

SCENERIES ENTERTAINMENT CORP. A CALIFORNIA CORP DBA CINEMA LIBRE STUDIOS

DIAZ PHILIPPE

SCENERIES ENTERTAINMENT CORP. A CALIFORNIA CORP

DIAZ PHLIPPE

SCENERIES ENTERTAINMENT CORP. A CALIFORNIA CORPORATION D/B/A CINEMA LIBRE STUDIOS

Attorney/Law Firm Details

Plaintiff Attorneys

FLADELL MATTHEW

ROSENTHAL RICHARD MICHAEL

Defendant Attorney

STATMAN JAY

 

Court Documents

Notice of Posting of Jury Fees

12/17/2020: Notice of Posting of Jury Fees

Minute Order - MINUTE ORDER (HEARING ON DEMURRER - WITHOUT MOTION TO STRIKE TO SECOND AMEN...)

12/18/2020: Minute Order - MINUTE ORDER (HEARING ON DEMURRER - WITHOUT MOTION TO STRIKE TO SECOND AMEN...)

Opposition - OPPOSITION TO DEFENDANTS' DEMURRER TO SECOND AMENDED COMPLAINT

8/12/2020: Opposition - OPPOSITION TO DEFENDANTS' DEMURRER TO SECOND AMENDED COMPLAINT

Notice Re: Continuance of Hearing and Order

8/13/2020: Notice Re: Continuance of Hearing and Order

Notice - NOTICE OF HEARING ON DEMURRER TO SECOND AMENDED COMPLAINT

8/13/2020: Notice - NOTICE OF HEARING ON DEMURRER TO SECOND AMENDED COMPLAINT

Notice - NOTICE OF HEARING DATE

6/22/2020: Notice - NOTICE OF HEARING DATE

Declaration - DECLARATION RE CCP S. 430.41

5/15/2020: Declaration - DECLARATION RE CCP S. 430.41

Unknown - NOTICE OF CONTINUANCE DUE TO COVID-19 STATE OF EMERGENCY DECLARATIONS

4/27/2020: Unknown - NOTICE OF CONTINUANCE DUE TO COVID-19 STATE OF EMERGENCY DECLARATIONS

Notice Re: Continuance of Hearing and Order

4/27/2020: Notice Re: Continuance of Hearing and Order

Opposition - OPPOSITION TO DEMURRER

2/14/2020: Opposition - OPPOSITION TO DEMURRER

Notice of Change of Address or Other Contact Information

2/18/2020: Notice of Change of Address or Other Contact Information

Notice Re: Continuance of Hearing and Order

2/18/2020: Notice Re: Continuance of Hearing and Order

Substitution of Attorney

11/27/2019: Substitution of Attorney

Case Management Statement

12/4/2019: Case Management Statement

Demurrer - without Motion to Strike

10/21/2019: Demurrer - without Motion to Strike

Proof of Service by Substituted Service

9/9/2019: Proof of Service by Substituted Service

Notice of Case Assignment - Unlimited Civil Case

6/17/2019: Notice of Case Assignment - Unlimited Civil Case

Summons - SUMMONS ON COMPLAINT

6/17/2019: Summons - SUMMONS ON COMPLAINT

19 More Documents Available

 

Docket Entries

  • 01/24/2022
  • Hearing01/24/2022 at 09:30 AM in Department M at 1725 Main Street, Santa Monica, CA 90401; Jury Trial

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  • 01/18/2022
  • Hearing01/18/2022 at 09:00 AM in Department M at 1725 Main Street, Santa Monica, CA 90401; Final Status Conference

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  • 12/18/2020
  • Docketat 09:00 AM in Department M; Case Management Conference - Held

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  • 12/18/2020
  • Docketat 09:00 AM in Department M; Hearing on Demurrer - without Motion to Strike (TO SECOND AMENDED COMPLAINT) - Held

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  • 12/18/2020
  • DocketMinute Order ( (Hearing on Demurrer - without Motion to Strike TO SECOND AMEN...)); Filed by Clerk

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  • 12/17/2020
  • DocketNotice of Posting of Jury Fees; Filed by SCENERIES ENTERTAINMENT CORP., a California Corporation, d/b/a CINEMA LIBRE STUDIOS (Defendant)

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  • 12/15/2020
  • Docketat 08:30 AM in Department M; Hearing on Demurrer - without Motion to Strike - Not Held - Advanced and Continued - by Court

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  • 12/11/2020
  • DocketReply (in support of demurrer to Second Amended Complaint); Filed by SCENERIES ENTERTAINMENT CORP., a California Corporation, d/b/a CINEMA LIBRE STUDIOS (Defendant)

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  • 09/14/2020
  • Docketat 09:00 AM in Department M; Case Management Conference - Not Held - Rescheduled by Court

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  • 08/25/2020
  • Docketat 09:30 AM in Department M; Case Management Conference - Not Held - Rescheduled by Court

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25 More Docket Entries
  • 11/07/2019
  • DocketNotice Re: Continuance of Hearing and Order; Filed by Clerk

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  • 10/21/2019
  • DocketDemurrer - without Motion to Strike; Filed by Sceneries Entertainment Corp., a California Corp (Defendant); Phlippe Diaz (Defendant)

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  • 10/21/2019
  • DocketCase Management Statement; Filed by Philippe Diaz (Defendant); Sceneries Entertainment Corp., a California Corp (Defendant)

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  • 09/09/2019
  • DocketProof of Service by Substituted Service; Filed by Stephen Nemeth (Plaintiff)

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  • 09/09/2019
  • DocketAmended Complaint; Filed by Stephen Nemeth (Plaintiff); Stephen Nemeth (Plaintiff)

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  • 06/17/2019
  • DocketSummons (on Complaint); Filed by Stephen Nemeth (Plaintiff)

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  • 06/17/2019
  • DocketCivil Case Cover Sheet; Filed by Stephen Nemeth (Plaintiff)

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  • 06/17/2019
  • DocketComplaint; Filed by Stephen Nemeth (Plaintiff)

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  • 06/17/2019
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 06/17/2019
  • DocketNotice of Case Assignment - Unlimited Civil Case; Filed by Clerk

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Tentative Rulings

Case Number: 19SMCV01106    Hearing Date: December 18, 2020    Dept: M

Case Name: Stephen Nemeth v. Philippe Diaz, et al.

Case No. 19SMCV01106

Motion: Defendants’ Demurrer to the Second Amended Complaint

Hearing Date: 12/18/2020

BACKGROUND

On September 9, 2019, plaintiff Stephen Nemeth filed a first amended complaint (FAC) against defendants Philippe Diaz, Sceneries Entertainment Corp., dba Cinema Libre, and Does 1-10. The FAC alleged five causes of action: (1) breach of contract, (2) breach of the implied covenant of good faith and fair dealing, (3) fraud, (4) violation of the Uniform Voidable Transfers Act (UVTA), and (5) violation of section 17200 of the Business and Professions Code (“UCL”). Defendants demurred to the FAC. The Court overruled the demurrer on uncertainty grounds. (See 3/3/2020 Order at 3.) The Court also sustained the demurrer to the first and second causes of action with leave to amend since it was unclear whether the contract was oral or written, and since Plaintiff had failed to allege sufficient fact to state a cause of action for breach of contract. (See 3/3/2020 Order at 4.) The Court overruled the demurrer to the alter ego allegations as well as the UCL cause of action. The Court sustained the demurrer to the UVTA cause of action with leave to amend. On April 2, 2020, Plaintiff file a second amended complaint (SAC) alleging nine causes of action.

Legal Standard

“Before filing a demurrer . . . the demurring party shall meet and confer in person or by telephone with the party who filed the pleading . . . for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.” (Code Civ. Proc., § 430.41.)

A demurrer on a complaint or cross-complaint may be filed within 30 days of service of the complaint or cross-complaint. CCP 430.40(a). An untimely demurrer may be considered by the court in its discretion. (Jackson v. Doe (2011) 192 Cal.App.4th 742, 750.)

A demurrer for sufficiency tests whether the complaint alleges facts sufficient to constitute a cause of action. (CCP § 430.10(e); Young v. Gannon (2002) 97 Cal.App.4th 209, 220.) The court “may consider all material facts pleaded in the complaint and those arising by reasonable implication therefrom; it may not consider contentions, deductions or conclusions of fact or law.  (Young v. Gannon (2002) 97 Cal.App.4th 209, 220 (citing Moore v. Conliffe Montclair Parkowners Assn. v. City of Montclair The court treats all facts alleged in the complaint to be true. (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726, 732.) The court can also “consider the facts appearing in exhibits attached to the complaint.” (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726, 733 (citing Dodd v. Citizens Bank of Costa Mesa (1990) 222 Cal.App.3d 1624, 1627.))

When considering demurrers, courts “are required to construe the complaint liberally to determine whether a cause of action has been stated, given the assumed truth of the facts pleaded.” (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726, 733 (citing Rogoff v. Grabowski (1988) 200 Cal.App.3d 624, 628.))

 

Analysis

  1. Meet and Confer

The court finds that the parties satisfied the meet and confer requirements of Code of Civil Procedure section 430.41(a). (Statman Decl.)

  1. Demurrer

Defendants Philippe Diaz and Sceneries Entertainment Corp. demur to all of the causes of action, except for the UCL cause of action, in the SAC.

  1. Uncertainty

    The Court previously overruled the demurrer based on uncertainty on the first through fifth causes of action. Since the Court previously overruled the demurrer on this issue, Defendant cannot raise a demurrer on this issue again. Defendant attempts to demurrer to the sixth through ninth causes of action also based on uncertainty. While Plaintiff did not state these causes of action before the FAC, the facts in the sixth through ninth causes of action were previously stated in the FAC. Therefore, the court overrules the demurrer to the sixth through ninth causes of action based on uncertainty.

  2. Sufficiency

COA 1 & 2: Breach of Contract and Breach of Implied Covenant of Good Faith and Fair Dealing

The demurrer to the first and second causes of actions are overruled. Defendant challenges that paragraph 33 is not the verbatim quote of the agreement. At the demurrer stage, the Court treats all allegations as true. Moreover, Plaintiff is not required to attach the contract or plead the contract in haec verba and can plead the legal effect. (Ochs v. PacifiCare of Cal. (2004) 115 Cal.App.4th 782, 795 [“In an action based on a written contract, the plaintiff may plead the legal effect of the contract rather than its precise language.”]) Plaintiff has alleged that the contract was written and has also identified when the breach allegedly occurred, remedying the defects previously identified by the Court.

COA 3: (new cause of action) Breach of fiduciary duty

The Court notes that Plaintiff had not previously alleged a breach of fiduciary duty cause of action and added it to the SAC. The “granting of leave to amend must be construed as permission to the pleader to amend the cause of action which he pleaded in the pleading to which the demurrer has been sustained.” (People By and Through Dept. of Public Works v. Clausen (1967) 248 Cal.App.2d 770, 785.) Here, Plaintiff exceed the scope of leave to amend by adding a new cause of action for breach of fiduciary duty. The Court strikes this cause of action from the complaint.

COA 4: Uniform Voidable Transfers Act (UVTA)

Defendants demur to this cause of action once again, arguing that Plaintiff has failed to remedy the defects found in the FAC. Defendants argue that Plaintiff has still failed to allege who specifically is the debtor. Plaintiff generally alleged that both Defendants are the debtor. (See SAC ¶ 48.) Defendants also argue that Plaintiff has made contradictory allegations regarding Cinema Libre’s solvency status. These contradictory allegations make the UVTA cause of action defective. However, solvency is one of many factors to consider for intent to hinder, delay, or defraud creditors that a court considers for the intent requirement under Civil Code section 3439.04. On reply, Defendants also argue that Plaintiff has not pled that Defendants transferred the funds. However, Plaintiff did allege that Defendants transferred the funds. (See SAC ¶ 52.). Therefore, the demurrer is overruled.

COAs 6 – 9: (Splitting the Fraud causes of action)

Plaintiff’s third cause of action was originally for fraud. The Court notes that it did not grant leave to amend the FAC to state separate causes of action for fraud, but only to remedy the defects in its fraud cause of action. However, these amendments speak to the Court’s reasoning in granting leave to amend. (See Patrick v. Alacer Corp. (Nov. 21, 2008).) Therefore, the Court allows the amendments and proceeds with its analysis.

The sixth and seventh causes of action relate to Nemeth being induced into providing the distribution costs of Days of Grace. (See SAC ¶¶61, 63, 70.) Defendants demur solely on the basis that that the Court previously dismissed the claims without leave to amend. As noted below, the Court granted Plaintiff leave to amend as to the Days of Grace concealments. Plaintiff, in the FAC, alleged in paragraph 44 that Defendants:

(a) intentionally concealed that they had incurred about $200,000 of liabilities pertaining to the development of the Confessions Property,

(b) intentionally concealed that they intended that these liabilities be paid from the production of the Confessions movie (rather than by Cinema Libre which had incurred the liabilities),

(c) intentionally concealed that they intended for Nemeth to provide for the distribution costs of Days of Grace as a condition of entering into the agreement with him regarding the financing of the purchase of the U.S. distribution rights to Days of Grace,

(d) fraudulently misrepresented and intentionally misled Nemeth into believing that the Abdelkader project funds were owed to Diaz as an individual and not to Cinema Libre,

(e) fraudulently provided false or misleading banking statements that did not show the infusion of the approximately $2.5 million coming from the Abdelkader project was paid to Cinema Libre rather than Diaz as an individual, and

(f) fraudulently stated that their debt to Nemeth relating to the Dias de Gracia deal and his advance for advertisements would be paid.

(FAC ¶ 44.) The Court granted leave to amend as to the misrepresentations in (d) – (f) above. (See 3/3/2020 Order at 7.) The Court noted that Plaintiff had failed to state sufficient facts as to the Days of Grace distribution and Defendants intentionally concealed that they intended that these liabilities be paid from the production of the Confessions movie (b) – (c). (Id. at 6.) Since this is the only basis that Defendants demur to these two causes of action, the Court OVERRULES the demurrer.

The eighth and ninth cases of actions are related to the misrepresentations that led Plaintiff to relinquish his shares in Cinema Libre. Defendant argues that Plaintiff has made contradictory allegations as to the Emir Project funds. Plaintiff disputes that he has made contradictory allegations. The Court does not find contradictory allegations. Plaintiff alleged that Diaz tricked Plaintiff into believing that the Emir Abdelkader project belong to Diaz when the Abdelkader project was Cinema Libre Project. Therefore, the Court OVERRULES the demurrer to the eighth and ninth causes of action.
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