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Glen Broemer, SBN 165457
45080 US Hwy. 41 Chassell MI 49916
323.907.0023 glenbroemer@gmail.com
Attorney for Treasa Gavin, John Gavin, Patrick Gavin
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN MATEO
Case No.: 20CIV03806
TREASA GAVIN, et al
Plaintiffs Date: 12.27.2023
Time: 2 pm
10 Dept. 22
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GLEN BROEMER DECLARATION IN
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OPPOSITION TO DEFENDANTS’
13 MOTION FOR JUDGMENT ON THE
14 PLEADINGS
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NIMMER MaASSIS, et al
16 Defendants
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I, Glen Broemer, am an attorney licensed to practice in the State of California and the attorney of
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19 record for John Gavin, Patrick Gavin, and Treasa Gavin. I declare as follows:
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I Attached to this Declaration as Exhibit A is a true and correct copy of Defendants’
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Demurrer to the original Complaint.
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23 Attached to this Declaration as Exhibit B is a true and correct copy of Defendants’
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Demurrer to the First Amended Complaint.
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Attached to this Declaration as Exhibit C is a true and correct copy of the Court's decision
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27 overruling the relevant portions of the FAC.
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Attached to this Declaration as Exhibits D & E are true and correct copies of the FAC and
SAC filed in this action.
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GAVIN V MASSIS ET AL DEMURRER OPPOSITION 3806
I declare under penalty of perjury under the laws of the State of California that the
foregoing is true and correct.
11.28.2023
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GAVIN V MASSIS ET AL DEMURRER OPPOSITION 3806
EXHIBIT A
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GAVIN V MASSIS ET AL DEMURRER OPPOSITION 3806
Y osef Peretz (SBN 209288) Electronically
yperetz@ peretzlaw.com
David Garibaldi (SBN 313641) by Superior Court of California, County of San Mateo
dgaribaldi@ peretzlaw.com ON 12/2/2020
PERETZ & ASSOCIATES By. /s/ Joel Lacey
22 Battery Street, Suite 200 Deputy Clerk
San Francisco, CA 94111
Tel: 415.732.3777
Fax: 415.732.3791
Attomeys for Defendants NIMMER MASSIS,
JENNIFER NUSHWAT, and GEORGE WY NNS
SUPERIOR COURT FOR THE STATE OF CALIFORNIA
IN THE COUNTY OF SAN MATEO
10 TREASA GAVIN, PATRICK GAVIN, and Case No. 20-CIV-03806
JOHN GAVIN
11 NOTICE OF DEMURRER AND
12 Plaintiffs, DEFENDANTS’ DEMURRER TO
PLAINTIFFS’ COMPLAINT
13 Vv.
14 2/ 2021
NIMER MASSIS, JENNIFER NUSHWAT, Date: 20.
aa (to be setby
15 GEORGE WYNNS, and DOES 1-20, the Court up wersion to Direct Calendar
System commencing January 1, 2021)
16 Defendants. Time: 2:00PM ———
17 Dept: 22. _
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21 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
Please take notice that on -a-- ,20___ at —---t-- .m. (a date to be set by
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the Court upon its conversion to a Direct Calendar System commencing January 1, 2021, pursuant to local
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tules), or as soon thereafter as the matter may be heard, in Department —----- of the San Mateo Superior
24 Court, 400 County Center, Redwood City, CA 94063, Defendants NIMER MASSIS, JENNIFER
25 NUSHWAT, AND GEORGE WYNNS (“Defendants”) will and hereby do move the Court for an Order
26 GRANTING Defendants’ Demurrer to the entirety of Plaintiffs’ Complaint (“Complaint”), including its
NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS’ COMPLAINT
Y osef Peretz (SBN 209288)
yperetz@ peretzlaw.com Electronically
David Garibaldi (SBN 313641)
dgaribaldi@ peretzlaw.com by Superior Court of California, County of San Mateo
PERETZ & ASSOCIATES ON 12/2/2020
22 Battery Street, Suite 200 By. /s/ Joel Lacey
San Francisco, CA 94111 Deputy Clerk
Tel: 415.732.3777
Fax: 415.732.3791
Attommeys for Defendants NIMMER MASSIS,
JENNIFER NUSHWAT, and GEORGE WY NNS
SUPERIOR COURT FOR THE STATE OF CALIFORNIA
IN THE COUNTY OF SAN MATEO
10 TREASA GAVIN, PATRICK GAVIN, and Case No. 20-CIV-03806
11 JOHN GAVIN
MEMORANDUM OF POINTS AND
12 Plaintiffs, AUTHORITIES IN SUPPORT OF
DEFENDANTS’ DEMURRER TO
13 Vv. PLAINTIFFS’ COMPLAINT
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NIMER MASSIS, JENNIFER NUSHWAT,
GEORGE WYNNS, and DOES 1-20, 2/11/2021 20 ~~
15 Date: --- (to be set by
the Court upon conversion to Direct Calendar
16 Defendants. System co mmencing January 1, 2021)
Time: —---
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Dept. a
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT
FOR PERSONAL INJURIES AND DAMAGES
TABLE OF CONTENTS
INTRODUCTION -1-
II. FACTUAL ALLEGATIONS -3-
Il]. ATTEMPT TO MEET AND CONFER -6-
IV. LEGAL ARGUMENT .. 7-
A. Legal Standard on Demurrers -7-
B. Plaintiffs’ Claims are all Barred by the Litigation Privilege -8-
C. Plaintiffs Failed to State Claims for Fraud because their Claims are Barred by the
Statute of Limitations and Lack Specificity -9-
D. Plaintiffs Failed to State Sufficient Facts to Establish a Claim for Equitable Relief
to Set Aside the Default J udgment in the Prior Action -11-
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E. Plaintiffs’ First, Second, and Third Causes of Action for Fraud and Fifth Cause of
11 Action for Common C ount/Unjust Enrichment are Subject to Special Demurrer for
Uncertainty -13-
12 -15-
Vv. CONCLUSION
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT
FOR PERSONAL INJURIES AND DAMAGES.
ii
TABLE OF AUTHORITIES
Cases
Beauchenev. Synanon Foundation, Inc. (1979) 88 Cal. App. 3d 342 -7
Bernstein v. Piller (1950) 98 Cal. App. 2d 441 -7
Blankv. Kirwan (1985) 39 Cal.3d 311 -7
Davaloo v. State Farm Ins. Co., (2005) 135 Cal. App. 4th 409
Gonzales v. State of California (1977) 68 Cal. App. 3d 621
Khoury v. Maly's of California, Inc. (1993) 14 Cal App.4th 612 -7
Marriage of Stevenot (1984) 154 Cal.App.3d 1051 11
McBride v. Boughton (2004) 123 Cal.App.4" 379 14
Public Employees’ Retirement System v. Moody's Investors Service, Inc. (2014) 226
10
Cal.App.4th 643 -8
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Rakestraw v. California Physicians’ Serv. (2000) 81 Cap. App. 4th 39 -7
12 Rappleyea v. Campbell (1994) 8 Cal.4" 975... 12
13 Robinson Helicopter Co., Inc. v. Dana Com. (2004)
( 34 Cal.Lat 9979. -9
14 Roesch v. De Mota (1944) 24 Cal.2d 563 12
15 Rossv. Ragingwire Telecommunications, Inc. (2008) 42 Cal. 4th 920
16 Rubin v. Green (1993) 4 Cal.4th 1187 -8
Seltzer v. Barnes, (2010) 182 Cal.A pp.4th 953 -8
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Sheehan v. San Francisco 49ers, Ltd. (2009) Cal. 4th 992 -7
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Sun ‘n Sand, Inc. v. United California Bank (1978) 21 Cal.3d 671 -9
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Sylmar Air Conditioning v. Pueblo Contracting Services, Inc. (2004) 122 Cal.App.4th 1049. - 8
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21 Wind Dancer Production Group v. Walt Disney Pictures (2017) 10 Cal. App.5th 56 12
22 Winn v. Pioneer Medical Group, Inc. (2016) 63 Cal.4th 148 -7
23 Statutes
24 Code of Civil Procedure § 430.10(e) -7
25 Ev. Code § 452(d) -8
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT
FOR PERSONAL INJURIES AND DAMAGES.
iii
I INTRODUCTION
This action arises following an earlier default judgment obtained by Defendants NIMER
MASSIS (“Massis”) and JENNIFER NUSHWAT (“Nushwat”) through their attomey Defendant
GEORGE WYNNS (“Wynns”) (collectively, “Defendants”) against Plaintiffs PATRICK
GAVIN (“Patrick”) and JOHN GAVIN (“John”) (collectively, the “Gavins”), in an action filed
in San Francisco Superior Court, Massis, et al. v. Gavin, et al., CGC-18-567965 (the “Prior
Action”). The Prior Action was brought by Defendants to enforce an agreement for the Gavins’
purchase of a liquor store from Massis and Nushwat, which the Gavins had defaulted in paying.
After obtaining a default judgment, Defendants attempted to collect against the Gavins and
obtained an order of sale from the Court for a property owned by the Gavins located at 222-228
10 Hyde Street, San Francisco (the “Property”). Defendants also obtained an assignment order
11 entitling them to rents from the Property and have attempted to collect those rents.
12 In retaliation for those collections efforts and out of desperation, the Gavins, along with
13 their co-plaintiff TREASA GAVIN (“Treasa”) (collectively, “Plaintiffs”), now bring claims
14 against Defendants asserting that the default judgment was obtained through false pretenses by
making misrepresentations to the Court in the earlier action, and ask this Court to set aside the
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judgment obtained in the Prior Action and award Plaintiffs money damages stemming from the
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alleged fraud. The Court should sustain Defendants’ instant demurrer to those claims and dismiss
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this action with prejudice, because Defendants have failed to state any actionable causes of action
18 and will be unable to do so even with further amendment.
19 As a threshold issue, all of Plaintiffs’ claims are barred by the litigation privilege because
20 the gravamen of all of the claims stems from Defendants’ obtaining a default judgment in the
21 Prior Action and seeking to enforce it. Such conduct renders the Complaint subject to a Special
22 Motion to Strike, which Defendants have concurrently filed, and renders all claims subject to
dismissal due to the privilege.
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Plaintiffs’ causes of action for fraudulent concealment, misrepresentation, and inducement
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are also time-barred by the applicable three-year statute of limitations. Even as Plaintiffs try to
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plead around the statute of limitations, their own admission in the Complaint that they began to
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operate the liquor store without a lease sometime shortly after its purchase on July 11, 2016
27 renders their claims untimely. Upon commencing operation of the liquor store, Plaintiffs should
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT.
have discovered through reasonable diligence the allegedly fraudulent conduct by Massis, which
all relates to financial information that Massis purportedly concealed or misrepresented to the
Gavins before the purchase agreement was signed. Once they began to operate the store, Plaintiffs
had access to and sole possession of all of its financial records, and thus should have discovered
any of Massis’s fraudulent acts very quickly. Despite that, they did not file their fraud claims until
September 4, 2020, far beyond three years after taking control of the liquor store. As such, their
fraud claims are time barred.
Additionally, even if not time-barred, Plaintiffs’ fraud claims are subject to dismissal for
failure to state sufficient facts to constitute a cause of action. The tort of fraud is subject to a
heightened pleading standard, requiring Plaintiffs to allege “how, when, where, to whom, and by
what means” the fraud was made. Plaintiffs’ factual allegations fail to satisfy this standard, as
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they do not state how, where, to whom, and by what means Massis and Nushwat engaged in
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fraudulent concealment, misrepresentation, or inducement. The only facts supporting these causes
12 of action are that Massis concealed some financial information from Plaintiffs before the sale of
13 the liquor store, which is not specific enough to state claims for fraud. Similarly, Plaintiffs did
14 not allege any fraudulent acts whatsoever committed by Nushwat, but nevertheless claim she is
15 also liable for fraud solely because she is Massis’ wife and business partner. As such, Plaintiffs’
16 fraud claims should be dismissed. Finally, Plaintiffs’ fraud claims are also subject to a special
demurrer for uncertainty, as several portions of the Complaint relating to the fraud allegations are
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incomplete and unintelligible such that Defendants cannot reasonably respond to them.
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Plaintiffs’ cause of action for equitable relief to set aside the default judgment in the Prior
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Action is subject to demurrer because Plaintiffs failed to state sufficient facts to support such a
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cause of action. Plaintiffs claim that Defendants obtained the default judgment “under false
21 pretenses” by making fraudulent representations to the Court in the Prior Action. However, this
22 is not sufficient to state a claim to set aside a default judgment based on fraud. Such a claim
23 requires “extrinsic fraud,” i.e. fraud that deprived Plaintiffs of their very opportunity to participate
24 in the Prior Action. No such facts were alleged, and no such facts can be alleged. A review of the
25 register of actions of the Prior Action shows that Plaintiffs had timely notice of the Prior Action
and every opportunity to participate in the Prior Action and respond to Massis’ allegations therein.
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Despite that, Plaintiffs failed to do so. As such, they have no basis for relief. The fourth cause of
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action is based entirely on claims of “intrinsic” fraud, but such fraud alone cannot support the
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT
setting aside of the default judgment at this stage. Again, Plaintiffs could have timely appealed
the default judgment within 6 months after its issuance, but they failed to do so and failed even
to allege a reason for that failure. Plaintiffs’ inaction bars their requested relief as a matter of law,
so their claim should be dismissed.
Finally, Plaintiffs’ fifth cause of action for “common count/unjust enrichment” should be
dismissed as being uncertain, as these are not actionable causes of action in Califomia but are
simply prayers for relief that are derivative of other causes of action. Further, these causes of
action contain factual allegations that have no basis in law as establishing a right to relief,
rendering the Complaint uncertain as Defendants are unable to parse out what claims can be
admitted or denied.
For the foregoing reasons, the Court should thus sustain the instant Demurrer and dismiss
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the Complaint with prejudice, as Plaintiffs will be unable to cure the deficiencies in the Complaint
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through amendment.
12 II. FACTUAL ALLEGATIONS
13 Plaintiffs assert that on July 11, 2016, Massis and Nushwat entered into an agreement with
14 John and Patrick for the purchase of J&N Liquors, aka Bartlett Discount Liquors, located at 3346
15 24th Street, San Francisco, CA for the purchase price of $130,000. [The Complaint is attached to
16 Defendants’ Request for Judicial Notice (“RJN”) at Ex. 1.] The Complaint does not attach this
alleged purchase agreement. Instead, it alleges that Defendants held a lease on the property at the
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time of purchase and that the purchase agreement at paragraph 7 states:
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“As part of the sale, Sellers will either have the existing lease assigned to Buyers,
19 subject to any amendments as part of the renewal of the lease. [six] Buyer shall use
due diligence in working with Seller in having the lease assigned. In the event the
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landlord declines to transfer the lease by October 31, 2016, through no fault of the
21 Buyer, the Agreement is cancelled and costs will be shared 50/50 by the Parties.”
[Id. at ¥13.]
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The Complaint further acknowledges that Treasa was not a party to this agreement, but that
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Massis was aware that Treasa was also investing time or money in the business. [Id. at | 14.]
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Plaintiffs allege that prior to the execution of the Purchase Agreement, Massis engaged in the
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following acts which all constitute fraudulent concealment, misrepresentation, or inducement:
26 (1) “MASSIS led Plaintiffs to believe that his rent payment were $5500/mo.,
27 concealing the fact that he was paying either close to $3300/month, or as one P&L
statement reflects approximately $1800/month,” [Id. at § 28.]
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT
(2) “MASSIS led Plaintiffto believe that the liquor store profits were 60-80k/mo.,
when the actual profits were more likely around 25k/mo., a fact Plaintiff discovered
within the past month,” [Id. at § 46.]
(3) “MASSIS led Plaintiffs to believe that his rent payment were $5500/mo., when
in fact it was much less.” [Id. at § 38, 47.] and
(4) “MASSIS represented that the lease was transferable or assignable, concealing
the fact that the landlord wanted a deli rather than a liquor store at that location, and
consequently refused to consent to an assignment or provide a new lease,” [Id. at
19 29, 39, 48.]
Additionally, the Complaint also contains other sections alleging that Massis made fraudulent
concealments and misrepresentations, but which are incomplete and unintelligible. It alleges at
Paragraph 15 that Massis y made “the following misrepresentations of fact to John, Patrick, and
TREASA GAVIN:” but nothing is stated after this clause—there is only a blank space and then
10 the Complaint moves to a different paragraph. [Id. at § 15.] It next states: “Prior to the execution
11 of the agreement MASSIS concealed the following facts: he should have stated that he did not
12 have a transferable lease/non assignable [sic] landlord din’t want a liquor store and wouldn’t
13 sign off on the [sic],” with the sentence again cutting off with a blank space before moving to a
different paragraph. [Id. at § 16.]
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Plaintiffs allege that Defendants had a duty to disclose these material facts to Treasa
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because they were aware she would be involved in the operation of the liquor store, would devote
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time and effort to its success and development, and had a financial interest in that success and
17 development, but nevertheless intentionally concealed these facts from her and the other
18 Plaintiffs. [Id. at 1 30-31.] Plaintiffs allege that they were unaware of the rent Massis was actually
19 paying and “would not have acted as she did if she had known the concealed facts.” [Id. at 1 32.]
20 Plaintiffs allege that Treasa only first discovered the fraudulent intentions of Massis and Nushwat
21 in August 2018, when Massis filed the Prior Action. [Id. at § 23.] Plaintffs further claim,
somewhat illogically and contradicting the preceding claim, that they did not discover until the
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summer of 2020 that “in 2016 in the course and scope of negotiating the lease,” Massis had
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misstated the amount of rent he had been paying and the extent of his profits at the liquor store.
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[Id. at § 24.] Regardless, as a result of the alleged fraudulent acts, Plaintiffs allege they have
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sustained damages from the concealment in an amount not less than $200,000. [Id. at 133.] Based
26 upon these factual allegations, Plaintiffs bring claims for fraudulent concealment, fraudulent
27 misrepresentation, fraudulent inducement.
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT.
With respect to their cause of action for “equitable request to set aside judgment,”
Plaintiffs next allege that Massis failed to exercise diligence “in working with Seller in having
the lease assigned, and the lease was not in fact assigned” to Plaintiffs, but the Plaintiffs still went
on to operate the liquor store despite lacking a lease. [Id. at 1] 17-18.] Plaintiffs allege that in
July 2018, with “full awareness that the purchase and sale agreement was cancelled for failure of
the condition cited in Paragraph 7,” Massis nevertheless sued John and Patrick in the Prior Action,
“fraudulently claiming that the Gavins had breached the cancelled agreement.” [Id. at § 19-20,
55.] Plaintiffs allege that in that suit, Massis “misrepresented to the court that he had fulfilled all
of the terms and conditions of the lease,” but thereafter obtained a default in that action and
initiated collection proceedings against John and Patrick. [Id. at 156-57.) Plaintiffs allege they
explained to Wynns that Massis and Nushwat had obtained their default judgment “under false
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pretenses,” and claimed Defendants did not deny that allegation but stated “it was too late..
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challenge the judgment.” [Id. at | 22.] Finally, Plaintiffs again allege that Treasa “discovered
12 the fraudulent intentions of Massis and Nushwat in or near August 2018” when Massis initiated
13 that action, and that all Plaintiffs discovered in the summer of 2020 that Massis had “misstated
14 the amount of rent he had been paying, and the extent of his profits at the liquor store.” [Id. at 4
15 59.] Plaintiffs this claim that “the judgment, as well as the collections efforts of’ Defendants “in
16 full knowledge of the invalidity of the judgment, represents an affrontto the dignity and reputation
of the court, and imposes unfair and unjust costs on Plaintiffs,” so they “thus seek an Order setting
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aside the Default Judgment.” [Id. at 60.]
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Finally, with respect to their cause of action for common count or unjust enrichment,
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Plaintiffs allege that after obtaining the default judgment against Plaintiffs, Defendants “posted
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notices of an order entitling [Massis] to rents, though not by its terms an Order to install himself
21 as landlord, at 226 Hyde Street, San Francisco, CA .” [Id. at 163.] Plaintiffs further charge that
22 Defendants “contacted the tenants and took steps to establish themselves as the de facto managers
23 of the property in the process, dealing with the tenants directly regarding rent, and removing
24 Plaintiff.” [Id. at { 64.] Based on this behavior, Plaintiffs request that Defendants “in law and
25 equity they should be regarded as in possession of the value attached to [the rights to the rents at
226 Hyde,]” and any money collected or that should have been collected “should be subtracted
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from Plaintiff’s judgment debt.” [Id. at § 65.] Plaintiffs further allege that Defendants did not
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT
subtract the rents and rights collected in this manner from the judgment debt, causing Plaintiffs
to suffer damages no less than $100,000. [Id. at 1] 67-69.]
Ill. ATTEMPT TO MEET AND CONFER
The Complaint in this action was filed on September 4, 2020. [RJN at Ex. 1.] Plaintiffs
then personally served Wynns with the Complaint and Summons on October 1, 2020. [Peretz
Decl. at § 2.] Plaintiffs thereafter subserved Massis and Nushwat on October 2, 2020. [Id. at 4 3.]
Counsel of record was retained by Defendants on or about October 22, 2020. [Id. at 4 4.]
Thereafter, on October 26, 2020, Defendants’ counsel wrote to Plaintiffs’ counsel seeking a 14-
day extension of time to file a responsive pleading to the Complaint on behalf of all Defendants,
due to having been retained recently and needing additional time to determine whether a demurrer
to the Complaint would be appropriate and to meet and confer accordingly. [Id. at ] 5, Ex. 1.]
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Plaintiffs’ counsel refused to grant any extension of time to respond, claiming that “Nimer is
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seeking to foreclose on my clients’ property based on a fraudulent judgment.” [Id.]
12 Accordingly, later that same day, October 26, 2020, Defendants’ counsel sent a detailed
13 email seeking to meet and confer regarding the basis for a demurrer by Defendants. [Id. at { 6,
14 Ex. 2.] The email stated that Defendants would likely seek a demurrer as to call causes of action
15 for failure to state a claim and on grounds of being uncertain, and listed factual and legal support
16 for those bases. [Id.] This email was sent five (5) court days before Wynns’ deadline to file a
responsive pleading. [Id.] Defendants’ counsel asked Plaintiff's counsel to respond with
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Plaintiffs’ position regarding the potential demurrer as soon as possible and in accordance with
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CCP § 430.41. [Id.] In response, Plaintiffs counsel only stated that the email “is nowhere near a
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code-compliant M&C,” without any further explanation. [Id.] Counsel then followed up on that
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message with another, stating “CCP § 430.41 is quite straightforward and if you ignore its
21 requirements I will seek to enter your default,” again without stating what “requirements” of the
22 statute he believes Defendants did not follow. [Id.] As such, Defendants were unable to meet and
23 confer at least 5 days prior to the initial time a responsive pleading was due, despite making a
24 good faith attempt to do so on October 26, 2020. [Id. at 17.] Accordingly, on or about October
25 29, 2020, Defendants filed a declaration pursuant to CCP § 430.41 extending Defendants’ time
to file a responsive pleading to the Complaint by an automatic 30 days, commencing from the
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date the responsive pleading was initially due. [Id. at 1 8.] Upon doing so and serving Plaintiffs
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with the declaration, Plaintiffs’ counsel responded with a series of confusing and incomplete
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT
emails claiming the declaration was fraudulent and that CCP § 430.41 required a telephonic meet
and confer which never occurred. [Id. at § 9, Ex. 3.] Nevertheless, Defendants’ attorneys set up
a telephone call with Plaintiffs’ counsel regarding Defendants’ intent to file a demurrer. [Id. at ¥
10.] One of Defendants’ attorneys spoke to Plaintiffs’ counsel on or about December 1, 2020 at
or around 1:30 p.m., but counsel were unable to resolve the Parties’ respective differences
regarding this demurrer during that call. [Id. at §11.]
Iv. LEGAL ARGUMENT
A Legal Standard on Demurrers
The function of a demurrer is to test the legal sufficiency of the pleading. Beauchene v.
Synanon Foundation, Inc. (1979) 88 Cal. App. 3d 342, 346. A demurrer is appropriate where a
pleading fails to “state facts sufficient to constitute a cause of action.” Code of Civil Procedure
10
(“CCP”) § 430.10(e); Sheehan v. San Francisco 49ers, Ltd. (2009) Cal. 4th 992, 997. A demurrer
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admits the truth of all material facts properly pled. Ross v. Ragingwire Telecommunications, Inc.
12 (2008) 42 Cal. 4th 920, 924. However, the court should not assume the truth of contentions,
13 deductions, or conclusions of law. Rakestraw v. California Physicians ’ Serv. (2000) 81 Cap. App.
14 Ath 39, 43; see also Winn v. Pioneer Medical Group, Inc. (2016) 63 Cal.4th 148, 152. The plaintiff
15 must state facts “with reasonable precision and with sufficient particularity to acquaint the
16 defendant with the nature, source, and extent of the plaintiff’s cause of action.” Davaloo v. State
Farm Ins. Co., (2005) 135 Cal. App. 4th 409, 418.
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A party may also demur if a pleading is uncertain, ambiguous or unintelligible. CCP §
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430.10(f); Gonzales v. State of California (1977) 68 Cal. App. 3d 621, 631. The Court may sustain
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a demurrer for uncertainty when the complaint is drafted in such a way that is vague or uncertain
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to the point that the defendant cannot reasonably respond. Khoury v. Maly’s of California, Inc.
21 (1993) 14 Cal.App.4th 612, 616. A demurrer should be sustained for uncertainty when the
22 allegations in the Complaint are mere recitations of the elements of each cause of action without
23 stating any specific material facts supporting these allegations. Bernstein v. Piller (1950) 98 Cal.
24 App. 2d 441, 443-444,
25 A demurrer may be used to challenge defects that appear on the face of the complaint or
for matters outside the complaint that are judicially noticeable. Blank v. Kirwan (1985) 39 Cal.3d
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311, 318. Among other items, the court may take judicial notice of records filed in the pending
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action or in any other action pending before this Court, including the Related Action. Evidence
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MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT
Code § 452(d). As such, the Court may properly consider the pleadings filed in the Related A ction
for purposes of adjudicating the instant demurrer.
B. Plaintiffs’ Claims are all Barred by the Litigation Privilege
As a threshold issue, Plaintiffs’ Complaint is barred in its entirety under the litigation
privilege, because the gravamen of all of the claims concern matters protected by the privilege.
“In general, communications in connection with matters related to a lawsuit are privileged” under
Civil Code § 47(b). Sylmar Air Conditioning v. Pueblo Contracting Services, Inc. (2004) 122
Cal.App.4th 1049, 1058; see also Rubin v. Green (1993) 4 Cal.4th 1187, 1191. The litigation
privilege generally “applies to 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 have some connection or logical relation to the action.” Id. The litigation
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privilege has been extended to “ail torts other than malicious prosecution,” including “to suits for
11
fraud.” Seltzer v. Barnes, (2010) 182 Cal.App.4th 953, 970. Actions whose gravamen is
12 communications protected by the litigation privilege “are equally entitled to the benefits of
13 Section 425.16,” the statute prohibiting strategic lawsuits against public participation. Sylmar Air
14 Conditioning, supra, at 1058. The gravamen of a cause of action “is the allegedly wrongful and
15 injury-producing conduct, not the damage which flows from said conduct.” Public Employees’
16 Retirement System v. Moody’s Investors Service, Inc. (2014) 226 Cal.A pp.4th 643, 659 (emphasis
in original).
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Here, it is clear that the gravamen of this entire action is that Defendants initiated a suit
18
against Plaintiffs in this Court in the Prior Action, obtained a default judgment against Plaintiffs
19
through alleged fraud, and then took steps to enforce the judgment. [Complaint at 53-60.] These
20
actions are the only ones alleged to have caused any injury to Defendants, so they are the
21 gravamen of the entire action. See Public Employees’ Retirement System, supra, at 659. Indeed,
22 Plaintiffs’ fourth cause of action for “equitable request to set aside judgment” specifically asks
23 the Court to set aside the default judgment on the grounds that Defendants made fraudulent
24 misrepresentations to the San Francisco Superior Court to obtain the judgment “under false
pretenses.” [Id. at §{ 53-60.] The other causes of action, meanwhile, are also all dependent upon
25
the assertion that Massis obtained the default judgment in the Prior Action under “false pretenses”
26
by enforcing a purchase agreement that should have been “cancelled” due to his fraudulent
27
conduct, and thereafter inappropriately initiated collection proceedings. [Id. at 1 13, 16, 19, 22,
28
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT
56-57, 60, 62, 63, 67.] Accordingly, Plaintiffs’ entire Complaint is based on claims prohibited
by the litigation privilege, so it must be dismissed. Sylmar Air Conditioning, supra, at 1058.
Defendants have filed a Special Motion to Strike the Complaint pursuant to CCP § 425.16 for the
same reasons. [RJN at Ex. 2.]
Cc Plaintiffs Failed to State Claims for Fraud because their Claims are Barred
by the Statute of Limitations and Lack Specificity
The tort of fraud, whether for concealment, misrepresentation, or inducement, requires
establishment of (1) a concealment or misrepresentation, (2) knowledge of its falsity, (3) intent
to induce reliance on the concealment or misrepresentation, (4) actual reliance, (5) causation, and
(6) damages. Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 990. A claim
for the tort of fraud has a three-year statute of limitations. CCP § 338(d). The statute of limitations
10 accrues upon discovery of the facts constituting the deceit. Id. However, such accrual begins not
11 upon the date when discovery was first alleged, but the first date when the plaintiffs “could have
12 discovered the fraud through the exercise of reasonable diligence.” Sun ‘n Sand, Inc. v. United
13 California Bank (1978) 21 Cal.3d 671, 701.
Here, all of the factual allegations supporting Plaintiffs’ causes of action for fraudulent
14
concealment, misrepresentation, and inducement are insufficient to state causes of action because
15
taken as phrased, they would be barred under the applicable three-year statute of limitations under
16
CCP § 338(d). Plaintiffs allege that they entered into the Purchase A greement for the liquor store
17
on July 11, 2016, and that all alleged misrepresentations and concealment were made “[p]rior to
18 the execution of the agreement.” [Complaint at J 11, 15, 16, 27, 36.] Confusingly, Plaintiffs first
19 alleged that they did not discover the “fraudulent intentions of Massis and Nushwat” until
20 “August, 2018,” when Massis filed suit to enforce the Purchase Agreement, but then allege that
21 Plaintiffs did not discover until the “summer of 2020” that Massis “had misstated the amount of
22 rent he had been paying, and the extent of his profits at the liquor store” in the course of
negotiating the lease in 2016. [Id. at 1] 23-24, 59.] These latter allegations were an attempt to
23
“plead around” the applicable statute of limitations. However, Defendants admit that they
24
“operated the liquor store without a lease” after the purchase agreement was executed. [Id. at 4
25
18.] Implicitly, by “operating” the liquor store, Defendants would have had access to and
26 possession of all financial records, contracts business agreements, contracts, and otherwise
27 belonging to the business, since “operating” the liquor store would necessarily include paying
28 rent and other obligations of the business and collecting income from sales. Indeed, it appears
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT
Defendants admit they had possession of all of the business’ financial information upon
commencing their operation of it because they allege they “lacked the economic security
necessary to warrant improving the property” after taking operational control of the business. [Id.
at J 18.] As such, Defendants could have discovered Massis’ alleged fraud by exercising
“reasonable diligence” at the time they took operational control of the liquor store sometime
shortly after July 11, 2016, when the purchase agreement was executed. [Complaint at 1 11, 15,
16, 27, 36.] Since Defendants did not bring suit for this alleged fraud until September 4, 2020,
well beyond 3 years after they should have discovered the fraud through reasonable diligence,
(shortly after July 11, 2016), their claims are time-barred under CCP § 338(d).
Additionally, even if not time-barred, Plaintiffs’ factual allegations as stated are
insufficient to satisfy the necessary elements of pleading fraud. Fraud must be plead specifically
10
under a heightened pleading standard; a plaintiff must plead specific facts that “show how, when,
11
where, to whom, and by what means the representations were tendered.” Hamilton v. Greenwich
12 Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, 1614. The Complaint fails to satisfy all of
13 these elements. The only factual allegations made therein concerning the fraud are that Massis
14 concealed the liquor store’s true rent payments and profits before the sale and misrepresented his
15 ability to assign the liquor store’s lease to Plaintiffs. [Id. at 1§ 29, 39, 48.] The Complaint does
16 not allege “how,” “where,” “to whom,” and “by what means” Massis either concealed or
misrepresented this information to Plaintiffs, so it fails to satisfy the heightened pleading standard
17
for claims of fraud. Further, with respect to a claim for fraudulent concealment, a plaintiff must
18
also allege that the defendant was acting under a duty to disclose the facts that were not disclosed.
19
Hahn v. Mirda (2007) 147 Cal.App.4th 740, 745. Here, Plaintiffs allege that Massis had a duty to
20
disclose the above information to Treasa but make no similar claim that he had a duty to disclose
21 that information to Patrick or John. [Id. at § 40.] As such, Plaintiffs failed to properly plead that
22 Massis fraudulently concealed information from Patrick or John.
23 Plaintiffs are highly unlikely to be able to cure these allegations through further
24 amendment. In support of Defendants’ concurrent Special Motion to Strike, Massis submitted a
25 declaration under penalty of perjury stating that the parties executed the Purchase A greement for
the liquor store on July 11, 2016 and the sale was finalized by February 2017, upon which the
26
Gavins took full and exclusive possession of the liquor store and began to operate it at the
27
premises, and took possession of all financial records, business agreements, contracts, and
28
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’? COMPLAINT.
otherwise belonging to the business. [RJN at Ex. 3 at 2-5, Ex. 1-3.] As such, it is undeniable
that the statute of limitations for Plaintiffs’ fraud claims would have commenced by February
2017, at which point, had they exercised reasonable diligence, Plaintiffs would have discovered
Massis’ alleged fraud. Plaintiffs will be unable to plead around these established facts.
D Plaintiffs Failed to State Sufficient Facts to Establish a Claim for Equitable
Relief to Set Aside the Default J udgment in the Prior Action
A claim for equitable relief to set aside a default judgment on the basis of fraud may only
be obtained upon a showing of “extrinsic fraud,” i.e. “any set of extrinsic circumstances which
deprive[d] a party ofa fair adversary hearing” in the initial action. See CCP § 473; Marriage of
Stevenot (1984) 154 Cal. App.3d 1051, 1069. Here, Plaintiffs have not alleged that they were
deprived of a “fair adversary hearing” in the Prior Action. There are zero facts alleged stating that
10 Plaintiffs were improperly not served with the complaint in the Prior Action, that they did not
11 have notice in the Prior Action, or that they were defrauded or manipulated in any shape or form
12 from responding or participating in the Prior Action. Thus, no factual allegations support the
13 claim that Plaintiffs were deprived “of a fair adversary hearing” in the Prior Action. Instead, it
appears they simply chose not to respond or participate in the PriorA ction, which caused a default
14
judgment to be issued against them.
15
Plaintiffs’ claims to set aside the judgment are improperly based only on allegations of
16
“intrinsic” fraud. “Intrinsic” fraud is fraud that “goes to the merits of the prior proceedings, which
17
should have been guarded against by the plaintiff at that time.” Marriage of Stevenot, supra, at
18 1065. “Any fraud is intrinsic if a party has been given notice of the action and has not been
19 prevented from participating therein, that is, if he or she had the opportunity to present his or her
20 case and to protect himself or herself from any mistake or fraud of his or her adversary, but
21 unreasonably neglected to do so.” Id. at 1069. In Marriage of Stevenot, the court refused to set
22 aside an earlier default judgment of dissolution of marriage because there was no showing of
extrinsic fraud, but only allegations of intrinsic fraud, and the court found the moving party “had
23
her opportunity [in the earlier action] and failed to exercise diligence and take advantage of it.”
24
Id. at 1077. Here, Plaintiffs’ claim is that Defendants made false representations to the Court in
25
the Prior Action about the Purchase Agreement and the relationship between the parties, and
26 presumably obtained the default judgment “under false pretenses” because they relied on these
27 facts.” [Complaint at 1] 22, 56-57, 60, 62.] As described above, Plaintiffs had notice of the Prior
28 Action, were not prevented from participating, and had every opportunity to challenge the alleged
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT.
fraudulent actions Massis took against them in the Prior Action itself, but they chose not to do so.
[Wynns Decl. at §{/2-11.] Plaintiffs could have alleged in the Prior Action that Massis breached
the Purchase Agreement, or that the agreement was “cancelled” or breached, but they did not.
They cannot establish a claim for equitable relief to set aside a default judgment based on that
failure, as a judgment alleged to be fraudulently obtained may only be set aside upon a showing
of extrinsic, not intrinsic, fraud. Marriage of Stevenot, supra, at 1069; CCP § 473.
Additionally, any claim for equitable relief to set aside a default judgment, whether or not
it was fraudulently obtained, requires a showing of a meritorious defense, a satisfactory excuse
for not presenting a defense to the original action, and diligence in seeking to set aside the default
once discovered. Rappleyea v. Campbell (1994) 8 Cal.4th 975, 982. Plaintiffs cannot establish
any of these elements as to the Prior Action.
10
First, Plaintiffs’ claim that Massis obtained the default judgment in the Prior Action under
11
fraudulent grounds because the Purchase Agreement was “cancelled” is without merit because
12 Plaintiffs failed to allege facts with sufficient specificity to establish the fraud, as explained above.
13 Moreover, Plaintiffs’ self-admitted operation of the liquor store without a lease, rather than
14 seeking a lawsuit as soon as it was clear they would not obtain an assigned lease, functions as a
15 waiver of that portion of the Purchase Agreement. [See Complaint at { 18.] “Waiver is the
16 intentional relinquishment of a known right after knowledge of the facts.” Roesch v. De Mota
(1944) 24 Cal.2d 563, 572. “California courts will find waiver when a party intentionally
17
relinquishes a right or when that party’s acts are so inconsistent with an intent to enforce the right
18
as to induce a reasonable belief that such right has been relinquished.” Wind Dancer Production
19
Group v. Walt Disney Pictures (2017) 10 Cal.App.5th 56, 78. Plaintiffs intentionally relinquished
20
the right to “cancel” the Purchase Agreement by continuing to operate the liquor store even after
21 Massis failed to assign them a lease. [See Complaint at { 18.] Their operation of the liquor store
22 to date is “inconsistent with an intent to enforce the right” to have an assigned lease from Massis,
23 so that right is waived. Id. Since the right is waived, Plaintiffs would have had no m
Preview
Glen Broemer, SBN 165457 45080 US Hwy. 41 Chassell MI 49916 323.907.0023 glenbroemer@gmail.com Attorney for Treasa Gavin, John Gavin, Patrick Gavin SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN MATEO Case No.: 20CIV03806 TREASA GAVIN, et al Plaintiffs Date: 12.27.2023 Time: 2 pm 10 Dept. 22 11 GLEN BROEMER DECLARATION IN 12 OPPOSITION TO DEFENDANTS’ 13 MOTION FOR JUDGMENT ON THE 14 PLEADINGS 15 NIMMER MaASSIS, et al 16 Defendants 17 I, Glen Broemer, am an attorney licensed to practice in the State of California and the attorney of 18 19 record for John Gavin, Patrick Gavin, and Treasa Gavin. I declare as follows: 20 I Attached to this Declaration as Exhibit A is a true and correct copy of Defendants’ 21 Demurrer to the original Complaint. 22 23 Attached to this Declaration as Exhibit B is a true and correct copy of Defendants’ 24 Demurrer to the First Amended Complaint. 25 Attached to this Declaration as Exhibit C is a true and correct copy of the Court's decision 26 27 overruling the relevant portions of the FAC. 28 Attached to this Declaration as Exhibits D & E are true and correct copies of the FAC and SAC filed in this action. 1 GAVIN V MASSIS ET AL DEMURRER OPPOSITION 3806 I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. 11.28.2023 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 GAVIN V MASSIS ET AL DEMURRER OPPOSITION 3806 EXHIBIT A 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 GAVIN V MASSIS ET AL DEMURRER OPPOSITION 3806 Y osef Peretz (SBN 209288) Electronically yperetz@ peretzlaw.com David Garibaldi (SBN 313641) by Superior Court of California, County of San Mateo dgaribaldi@ peretzlaw.com ON 12/2/2020 PERETZ & ASSOCIATES By. /s/ Joel Lacey 22 Battery Street, Suite 200 Deputy Clerk San Francisco, CA 94111 Tel: 415.732.3777 Fax: 415.732.3791 Attomeys for Defendants NIMMER MASSIS, JENNIFER NUSHWAT, and GEORGE WY NNS SUPERIOR COURT FOR THE STATE OF CALIFORNIA IN THE COUNTY OF SAN MATEO 10 TREASA GAVIN, PATRICK GAVIN, and Case No. 20-CIV-03806 JOHN GAVIN 11 NOTICE OF DEMURRER AND 12 Plaintiffs, DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT 13 Vv. 14 2/ 2021 NIMER MASSIS, JENNIFER NUSHWAT, Date: 20. aa (to be setby 15 GEORGE WYNNS, and DOES 1-20, the Court up wersion to Direct Calendar System commencing January 1, 2021) 16 Defendants. Time: 2:00PM ——— 17 Dept: 22. _ 18 19 20 21 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: Please take notice that on -a-- ,20___ at —---t-- .m. (a date to be set by 22 the Court upon its conversion to a Direct Calendar System commencing January 1, 2021, pursuant to local 23 tules), or as soon thereafter as the matter may be heard, in Department —----- of the San Mateo Superior 24 Court, 400 County Center, Redwood City, CA 94063, Defendants NIMER MASSIS, JENNIFER 25 NUSHWAT, AND GEORGE WYNNS (“Defendants”) will and hereby do move the Court for an Order 26 GRANTING Defendants’ Demurrer to the entirety of Plaintiffs’ Complaint (“Complaint”), including its NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS’ COMPLAINT Y osef Peretz (SBN 209288) yperetz@ peretzlaw.com Electronically David Garibaldi (SBN 313641) dgaribaldi@ peretzlaw.com by Superior Court of California, County of San Mateo PERETZ & ASSOCIATES ON 12/2/2020 22 Battery Street, Suite 200 By. /s/ Joel Lacey San Francisco, CA 94111 Deputy Clerk Tel: 415.732.3777 Fax: 415.732.3791 Attommeys for Defendants NIMMER MASSIS, JENNIFER NUSHWAT, and GEORGE WY NNS SUPERIOR COURT FOR THE STATE OF CALIFORNIA IN THE COUNTY OF SAN MATEO 10 TREASA GAVIN, PATRICK GAVIN, and Case No. 20-CIV-03806 11 JOHN GAVIN MEMORANDUM OF POINTS AND 12 Plaintiffs, AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO 13 Vv. PLAINTIFFS’ COMPLAINT 14 NIMER MASSIS, JENNIFER NUSHWAT, GEORGE WYNNS, and DOES 1-20, 2/11/2021 20 ~~ 15 Date: --- (to be set by the Court upon conversion to Direct Calendar 16 Defendants. System co mmencing January 1, 2021) Time: —--- 17 Dept. a 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT FOR PERSONAL INJURIES AND DAMAGES TABLE OF CONTENTS INTRODUCTION -1- II. FACTUAL ALLEGATIONS -3- Il]. ATTEMPT TO MEET AND CONFER -6- IV. LEGAL ARGUMENT .. 7- A. Legal Standard on Demurrers -7- B. Plaintiffs’ Claims are all Barred by the Litigation Privilege -8- C. Plaintiffs Failed to State Claims for Fraud because their Claims are Barred by the Statute of Limitations and Lack Specificity -9- D. Plaintiffs Failed to State Sufficient Facts to Establish a Claim for Equitable Relief to Set Aside the Default J udgment in the Prior Action -11- 10 E. Plaintiffs’ First, Second, and Third Causes of Action for Fraud and Fifth Cause of 11 Action for Common C ount/Unjust Enrichment are Subject to Special Demurrer for Uncertainty -13- 12 -15- Vv. CONCLUSION 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT FOR PERSONAL INJURIES AND DAMAGES. ii TABLE OF AUTHORITIES Cases Beauchenev. Synanon Foundation, Inc. (1979) 88 Cal. App. 3d 342 -7 Bernstein v. Piller (1950) 98 Cal. App. 2d 441 -7 Blankv. Kirwan (1985) 39 Cal.3d 311 -7 Davaloo v. State Farm Ins. Co., (2005) 135 Cal. App. 4th 409 Gonzales v. State of California (1977) 68 Cal. App. 3d 621 Khoury v. Maly's of California, Inc. (1993) 14 Cal App.4th 612 -7 Marriage of Stevenot (1984) 154 Cal.App.3d 1051 11 McBride v. Boughton (2004) 123 Cal.App.4" 379 14 Public Employees’ Retirement System v. Moody's Investors Service, Inc. (2014) 226 10 Cal.App.4th 643 -8 11 Rakestraw v. California Physicians’ Serv. (2000) 81 Cap. App. 4th 39 -7 12 Rappleyea v. Campbell (1994) 8 Cal.4" 975... 12 13 Robinson Helicopter Co., Inc. v. Dana Com. (2004) ( 34 Cal.Lat 9979. -9 14 Roesch v. De Mota (1944) 24 Cal.2d 563 12 15 Rossv. Ragingwire Telecommunications, Inc. (2008) 42 Cal. 4th 920 16 Rubin v. Green (1993) 4 Cal.4th 1187 -8 Seltzer v. Barnes, (2010) 182 Cal.A pp.4th 953 -8 17 Sheehan v. San Francisco 49ers, Ltd. (2009) Cal. 4th 992 -7 18 Sun ‘n Sand, Inc. v. United California Bank (1978) 21 Cal.3d 671 -9 19 Sylmar Air Conditioning v. Pueblo Contracting Services, Inc. (2004) 122 Cal.App.4th 1049. - 8 20 21 Wind Dancer Production Group v. Walt Disney Pictures (2017) 10 Cal. App.5th 56 12 22 Winn v. Pioneer Medical Group, Inc. (2016) 63 Cal.4th 148 -7 23 Statutes 24 Code of Civil Procedure § 430.10(e) -7 25 Ev. Code § 452(d) -8 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT FOR PERSONAL INJURIES AND DAMAGES. iii I INTRODUCTION This action arises following an earlier default judgment obtained by Defendants NIMER MASSIS (“Massis”) and JENNIFER NUSHWAT (“Nushwat”) through their attomey Defendant GEORGE WYNNS (“Wynns”) (collectively, “Defendants”) against Plaintiffs PATRICK GAVIN (“Patrick”) and JOHN GAVIN (“John”) (collectively, the “Gavins”), in an action filed in San Francisco Superior Court, Massis, et al. v. Gavin, et al., CGC-18-567965 (the “Prior Action”). The Prior Action was brought by Defendants to enforce an agreement for the Gavins’ purchase of a liquor store from Massis and Nushwat, which the Gavins had defaulted in paying. After obtaining a default judgment, Defendants attempted to collect against the Gavins and obtained an order of sale from the Court for a property owned by the Gavins located at 222-228 10 Hyde Street, San Francisco (the “Property”). Defendants also obtained an assignment order 11 entitling them to rents from the Property and have attempted to collect those rents. 12 In retaliation for those collections efforts and out of desperation, the Gavins, along with 13 their co-plaintiff TREASA GAVIN (“Treasa”) (collectively, “Plaintiffs”), now bring claims 14 against Defendants asserting that the default judgment was obtained through false pretenses by making misrepresentations to the Court in the earlier action, and ask this Court to set aside the 15 judgment obtained in the Prior Action and award Plaintiffs money damages stemming from the 16 alleged fraud. The Court should sustain Defendants’ instant demurrer to those claims and dismiss 17 this action with prejudice, because Defendants have failed to state any actionable causes of action 18 and will be unable to do so even with further amendment. 19 As a threshold issue, all of Plaintiffs’ claims are barred by the litigation privilege because 20 the gravamen of all of the claims stems from Defendants’ obtaining a default judgment in the 21 Prior Action and seeking to enforce it. Such conduct renders the Complaint subject to a Special 22 Motion to Strike, which Defendants have concurrently filed, and renders all claims subject to dismissal due to the privilege. 23 Plaintiffs’ causes of action for fraudulent concealment, misrepresentation, and inducement 24 are also time-barred by the applicable three-year statute of limitations. Even as Plaintiffs try to 25 plead around the statute of limitations, their own admission in the Complaint that they began to 26 operate the liquor store without a lease sometime shortly after its purchase on July 11, 2016 27 renders their claims untimely. Upon commencing operation of the liquor store, Plaintiffs should 28 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT. have discovered through reasonable diligence the allegedly fraudulent conduct by Massis, which all relates to financial information that Massis purportedly concealed or misrepresented to the Gavins before the purchase agreement was signed. Once they began to operate the store, Plaintiffs had access to and sole possession of all of its financial records, and thus should have discovered any of Massis’s fraudulent acts very quickly. Despite that, they did not file their fraud claims until September 4, 2020, far beyond three years after taking control of the liquor store. As such, their fraud claims are time barred. Additionally, even if not time-barred, Plaintiffs’ fraud claims are subject to dismissal for failure to state sufficient facts to constitute a cause of action. The tort of fraud is subject to a heightened pleading standard, requiring Plaintiffs to allege “how, when, where, to whom, and by what means” the fraud was made. Plaintiffs’ factual allegations fail to satisfy this standard, as 10 they do not state how, where, to whom, and by what means Massis and Nushwat engaged in 11 fraudulent concealment, misrepresentation, or inducement. The only facts supporting these causes 12 of action are that Massis concealed some financial information from Plaintiffs before the sale of 13 the liquor store, which is not specific enough to state claims for fraud. Similarly, Plaintiffs did 14 not allege any fraudulent acts whatsoever committed by Nushwat, but nevertheless claim she is 15 also liable for fraud solely because she is Massis’ wife and business partner. As such, Plaintiffs’ 16 fraud claims should be dismissed. Finally, Plaintiffs’ fraud claims are also subject to a special demurrer for uncertainty, as several portions of the Complaint relating to the fraud allegations are 17 incomplete and unintelligible such that Defendants cannot reasonably respond to them. 18 Plaintiffs’ cause of action for equitable relief to set aside the default judgment in the Prior 19 Action is subject to demurrer because Plaintiffs failed to state sufficient facts to support such a 20 cause of action. Plaintiffs claim that Defendants obtained the default judgment “under false 21 pretenses” by making fraudulent representations to the Court in the Prior Action. However, this 22 is not sufficient to state a claim to set aside a default judgment based on fraud. Such a claim 23 requires “extrinsic fraud,” i.e. fraud that deprived Plaintiffs of their very opportunity to participate 24 in the Prior Action. No such facts were alleged, and no such facts can be alleged. A review of the 25 register of actions of the Prior Action shows that Plaintiffs had timely notice of the Prior Action and every opportunity to participate in the Prior Action and respond to Massis’ allegations therein. 26 Despite that, Plaintiffs failed to do so. As such, they have no basis for relief. The fourth cause of 27 action is based entirely on claims of “intrinsic” fraud, but such fraud alone cannot support the 28 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT setting aside of the default judgment at this stage. Again, Plaintiffs could have timely appealed the default judgment within 6 months after its issuance, but they failed to do so and failed even to allege a reason for that failure. Plaintiffs’ inaction bars their requested relief as a matter of law, so their claim should be dismissed. Finally, Plaintiffs’ fifth cause of action for “common count/unjust enrichment” should be dismissed as being uncertain, as these are not actionable causes of action in Califomia but are simply prayers for relief that are derivative of other causes of action. Further, these causes of action contain factual allegations that have no basis in law as establishing a right to relief, rendering the Complaint uncertain as Defendants are unable to parse out what claims can be admitted or denied. For the foregoing reasons, the Court should thus sustain the instant Demurrer and dismiss 10 the Complaint with prejudice, as Plaintiffs will be unable to cure the deficiencies in the Complaint 11 through amendment. 12 II. FACTUAL ALLEGATIONS 13 Plaintiffs assert that on July 11, 2016, Massis and Nushwat entered into an agreement with 14 John and Patrick for the purchase of J&N Liquors, aka Bartlett Discount Liquors, located at 3346 15 24th Street, San Francisco, CA for the purchase price of $130,000. [The Complaint is attached to 16 Defendants’ Request for Judicial Notice (“RJN”) at Ex. 1.] The Complaint does not attach this alleged purchase agreement. Instead, it alleges that Defendants held a lease on the property at the 17 time of purchase and that the purchase agreement at paragraph 7 states: 18 “As part of the sale, Sellers will either have the existing lease assigned to Buyers, 19 subject to any amendments as part of the renewal of the lease. [six] Buyer shall use due diligence in working with Seller in having the lease assigned. In the event the 20 landlord declines to transfer the lease by October 31, 2016, through no fault of the 21 Buyer, the Agreement is cancelled and costs will be shared 50/50 by the Parties.” [Id. at ¥13.] 22 The Complaint further acknowledges that Treasa was not a party to this agreement, but that 23 Massis was aware that Treasa was also investing time or money in the business. [Id. at | 14.] 24 Plaintiffs allege that prior to the execution of the Purchase Agreement, Massis engaged in the 25 following acts which all constitute fraudulent concealment, misrepresentation, or inducement: 26 (1) “MASSIS led Plaintiffs to believe that his rent payment were $5500/mo., 27 concealing the fact that he was paying either close to $3300/month, or as one P&L statement reflects approximately $1800/month,” [Id. at § 28.] 28 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT (2) “MASSIS led Plaintiffto believe that the liquor store profits were 60-80k/mo., when the actual profits were more likely around 25k/mo., a fact Plaintiff discovered within the past month,” [Id. at § 46.] (3) “MASSIS led Plaintiffs to believe that his rent payment were $5500/mo., when in fact it was much less.” [Id. at § 38, 47.] and (4) “MASSIS represented that the lease was transferable or assignable, concealing the fact that the landlord wanted a deli rather than a liquor store at that location, and consequently refused to consent to an assignment or provide a new lease,” [Id. at 19 29, 39, 48.] Additionally, the Complaint also contains other sections alleging that Massis made fraudulent concealments and misrepresentations, but which are incomplete and unintelligible. It alleges at Paragraph 15 that Massis y made “the following misrepresentations of fact to John, Patrick, and TREASA GAVIN:” but nothing is stated after this clause—there is only a blank space and then 10 the Complaint moves to a different paragraph. [Id. at § 15.] It next states: “Prior to the execution 11 of the agreement MASSIS concealed the following facts: he should have stated that he did not 12 have a transferable lease/non assignable [sic] landlord din’t want a liquor store and wouldn’t 13 sign off on the [sic],” with the sentence again cutting off with a blank space before moving to a different paragraph. [Id. at § 16.] 14 Plaintiffs allege that Defendants had a duty to disclose these material facts to Treasa 15 because they were aware she would be involved in the operation of the liquor store, would devote 16 time and effort to its success and development, and had a financial interest in that success and 17 development, but nevertheless intentionally concealed these facts from her and the other 18 Plaintiffs. [Id. at 1 30-31.] Plaintiffs allege that they were unaware of the rent Massis was actually 19 paying and “would not have acted as she did if she had known the concealed facts.” [Id. at 1 32.] 20 Plaintiffs allege that Treasa only first discovered the fraudulent intentions of Massis and Nushwat 21 in August 2018, when Massis filed the Prior Action. [Id. at § 23.] Plaintffs further claim, somewhat illogically and contradicting the preceding claim, that they did not discover until the 22 summer of 2020 that “in 2016 in the course and scope of negotiating the lease,” Massis had 23 misstated the amount of rent he had been paying and the extent of his profits at the liquor store. 24 [Id. at § 24.] Regardless, as a result of the alleged fraudulent acts, Plaintiffs allege they have 25 sustained damages from the concealment in an amount not less than $200,000. [Id. at 133.] Based 26 upon these factual allegations, Plaintiffs bring claims for fraudulent concealment, fraudulent 27 misrepresentation, fraudulent inducement. 28 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT. With respect to their cause of action for “equitable request to set aside judgment,” Plaintiffs next allege that Massis failed to exercise diligence “in working with Seller in having the lease assigned, and the lease was not in fact assigned” to Plaintiffs, but the Plaintiffs still went on to operate the liquor store despite lacking a lease. [Id. at 1] 17-18.] Plaintiffs allege that in July 2018, with “full awareness that the purchase and sale agreement was cancelled for failure of the condition cited in Paragraph 7,” Massis nevertheless sued John and Patrick in the Prior Action, “fraudulently claiming that the Gavins had breached the cancelled agreement.” [Id. at § 19-20, 55.] Plaintiffs allege that in that suit, Massis “misrepresented to the court that he had fulfilled all of the terms and conditions of the lease,” but thereafter obtained a default in that action and initiated collection proceedings against John and Patrick. [Id. at 156-57.) Plaintiffs allege they explained to Wynns that Massis and Nushwat had obtained their default judgment “under false 10 pretenses,” and claimed Defendants did not deny that allegation but stated “it was too late.. 11 challenge the judgment.” [Id. at | 22.] Finally, Plaintiffs again allege that Treasa “discovered 12 the fraudulent intentions of Massis and Nushwat in or near August 2018” when Massis initiated 13 that action, and that all Plaintiffs discovered in the summer of 2020 that Massis had “misstated 14 the amount of rent he had been paying, and the extent of his profits at the liquor store.” [Id. at 4 15 59.] Plaintiffs this claim that “the judgment, as well as the collections efforts of’ Defendants “in 16 full knowledge of the invalidity of the judgment, represents an affrontto the dignity and reputation of the court, and imposes unfair and unjust costs on Plaintiffs,” so they “thus seek an Order setting 17 aside the Default Judgment.” [Id. at 60.] 18 Finally, with respect to their cause of action for common count or unjust enrichment, 19 Plaintiffs allege that after obtaining the default judgment against Plaintiffs, Defendants “posted 20 notices of an order entitling [Massis] to rents, though not by its terms an Order to install himself 21 as landlord, at 226 Hyde Street, San Francisco, CA .” [Id. at 163.] Plaintiffs further charge that 22 Defendants “contacted the tenants and took steps to establish themselves as the de facto managers 23 of the property in the process, dealing with the tenants directly regarding rent, and removing 24 Plaintiff.” [Id. at { 64.] Based on this behavior, Plaintiffs request that Defendants “in law and 25 equity they should be regarded as in possession of the value attached to [the rights to the rents at 226 Hyde,]” and any money collected or that should have been collected “should be subtracted 26 from Plaintiff’s judgment debt.” [Id. at § 65.] Plaintiffs further allege that Defendants did not 27 28 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT subtract the rents and rights collected in this manner from the judgment debt, causing Plaintiffs to suffer damages no less than $100,000. [Id. at 1] 67-69.] Ill. ATTEMPT TO MEET AND CONFER The Complaint in this action was filed on September 4, 2020. [RJN at Ex. 1.] Plaintiffs then personally served Wynns with the Complaint and Summons on October 1, 2020. [Peretz Decl. at § 2.] Plaintiffs thereafter subserved Massis and Nushwat on October 2, 2020. [Id. at 4 3.] Counsel of record was retained by Defendants on or about October 22, 2020. [Id. at 4 4.] Thereafter, on October 26, 2020, Defendants’ counsel wrote to Plaintiffs’ counsel seeking a 14- day extension of time to file a responsive pleading to the Complaint on behalf of all Defendants, due to having been retained recently and needing additional time to determine whether a demurrer to the Complaint would be appropriate and to meet and confer accordingly. [Id. at ] 5, Ex. 1.] 10 Plaintiffs’ counsel refused to grant any extension of time to respond, claiming that “Nimer is 11 seeking to foreclose on my clients’ property based on a fraudulent judgment.” [Id.] 12 Accordingly, later that same day, October 26, 2020, Defendants’ counsel sent a detailed 13 email seeking to meet and confer regarding the basis for a demurrer by Defendants. [Id. at { 6, 14 Ex. 2.] The email stated that Defendants would likely seek a demurrer as to call causes of action 15 for failure to state a claim and on grounds of being uncertain, and listed factual and legal support 16 for those bases. [Id.] This email was sent five (5) court days before Wynns’ deadline to file a responsive pleading. [Id.] Defendants’ counsel asked Plaintiff's counsel to respond with 17 Plaintiffs’ position regarding the potential demurrer as soon as possible and in accordance with 18 CCP § 430.41. [Id.] In response, Plaintiffs counsel only stated that the email “is nowhere near a 19 code-compliant M&C,” without any further explanation. [Id.] Counsel then followed up on that 20 message with another, stating “CCP § 430.41 is quite straightforward and if you ignore its 21 requirements I will seek to enter your default,” again without stating what “requirements” of the 22 statute he believes Defendants did not follow. [Id.] As such, Defendants were unable to meet and 23 confer at least 5 days prior to the initial time a responsive pleading was due, despite making a 24 good faith attempt to do so on October 26, 2020. [Id. at 17.] Accordingly, on or about October 25 29, 2020, Defendants filed a declaration pursuant to CCP § 430.41 extending Defendants’ time to file a responsive pleading to the Complaint by an automatic 30 days, commencing from the 26 date the responsive pleading was initially due. [Id. at 1 8.] Upon doing so and serving Plaintiffs 27 with the declaration, Plaintiffs’ counsel responded with a series of confusing and incomplete 28 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT emails claiming the declaration was fraudulent and that CCP § 430.41 required a telephonic meet and confer which never occurred. [Id. at § 9, Ex. 3.] Nevertheless, Defendants’ attorneys set up a telephone call with Plaintiffs’ counsel regarding Defendants’ intent to file a demurrer. [Id. at ¥ 10.] One of Defendants’ attorneys spoke to Plaintiffs’ counsel on or about December 1, 2020 at or around 1:30 p.m., but counsel were unable to resolve the Parties’ respective differences regarding this demurrer during that call. [Id. at §11.] Iv. LEGAL ARGUMENT A Legal Standard on Demurrers The function of a demurrer is to test the legal sufficiency of the pleading. Beauchene v. Synanon Foundation, Inc. (1979) 88 Cal. App. 3d 342, 346. A demurrer is appropriate where a pleading fails to “state facts sufficient to constitute a cause of action.” Code of Civil Procedure 10 (“CCP”) § 430.10(e); Sheehan v. San Francisco 49ers, Ltd. (2009) Cal. 4th 992, 997. A demurrer 11 admits the truth of all material facts properly pled. Ross v. Ragingwire Telecommunications, Inc. 12 (2008) 42 Cal. 4th 920, 924. However, the court should not assume the truth of contentions, 13 deductions, or conclusions of law. Rakestraw v. California Physicians ’ Serv. (2000) 81 Cap. App. 14 Ath 39, 43; see also Winn v. Pioneer Medical Group, Inc. (2016) 63 Cal.4th 148, 152. The plaintiff 15 must state facts “with reasonable precision and with sufficient particularity to acquaint the 16 defendant with the nature, source, and extent of the plaintiff’s cause of action.” Davaloo v. State Farm Ins. Co., (2005) 135 Cal. App. 4th 409, 418. 17 A party may also demur if a pleading is uncertain, ambiguous or unintelligible. CCP § 18 430.10(f); Gonzales v. State of California (1977) 68 Cal. App. 3d 621, 631. The Court may sustain 19 a demurrer for uncertainty when the complaint is drafted in such a way that is vague or uncertain 20 to the point that the defendant cannot reasonably respond. Khoury v. Maly’s of California, Inc. 21 (1993) 14 Cal.App.4th 612, 616. A demurrer should be sustained for uncertainty when the 22 allegations in the Complaint are mere recitations of the elements of each cause of action without 23 stating any specific material facts supporting these allegations. Bernstein v. Piller (1950) 98 Cal. 24 App. 2d 441, 443-444, 25 A demurrer may be used to challenge defects that appear on the face of the complaint or for matters outside the complaint that are judicially noticeable. Blank v. Kirwan (1985) 39 Cal.3d 26 311, 318. Among other items, the court may take judicial notice of records filed in the pending 27 action or in any other action pending before this Court, including the Related Action. Evidence 28 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT Code § 452(d). As such, the Court may properly consider the pleadings filed in the Related A ction for purposes of adjudicating the instant demurrer. B. Plaintiffs’ Claims are all Barred by the Litigation Privilege As a threshold issue, Plaintiffs’ Complaint is barred in its entirety under the litigation privilege, because the gravamen of all of the claims concern matters protected by the privilege. “In general, communications in connection with matters related to a lawsuit are privileged” under Civil Code § 47(b). Sylmar Air Conditioning v. Pueblo Contracting Services, Inc. (2004) 122 Cal.App.4th 1049, 1058; see also Rubin v. Green (1993) 4 Cal.4th 1187, 1191. The litigation privilege generally “applies to 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 have some connection or logical relation to the action.” Id. The litigation 10 privilege has been extended to “ail torts other than malicious prosecution,” including “to suits for 11 fraud.” Seltzer v. Barnes, (2010) 182 Cal.App.4th 953, 970. Actions whose gravamen is 12 communications protected by the litigation privilege “are equally entitled to the benefits of 13 Section 425.16,” the statute prohibiting strategic lawsuits against public participation. Sylmar Air 14 Conditioning, supra, at 1058. The gravamen of a cause of action “is the allegedly wrongful and 15 injury-producing conduct, not the damage which flows from said conduct.” Public Employees’ 16 Retirement System v. Moody’s Investors Service, Inc. (2014) 226 Cal.A pp.4th 643, 659 (emphasis in original). 17 Here, it is clear that the gravamen of this entire action is that Defendants initiated a suit 18 against Plaintiffs in this Court in the Prior Action, obtained a default judgment against Plaintiffs 19 through alleged fraud, and then took steps to enforce the judgment. [Complaint at 53-60.] These 20 actions are the only ones alleged to have caused any injury to Defendants, so they are the 21 gravamen of the entire action. See Public Employees’ Retirement System, supra, at 659. Indeed, 22 Plaintiffs’ fourth cause of action for “equitable request to set aside judgment” specifically asks 23 the Court to set aside the default judgment on the grounds that Defendants made fraudulent 24 misrepresentations to the San Francisco Superior Court to obtain the judgment “under false pretenses.” [Id. at §{ 53-60.] The other causes of action, meanwhile, are also all dependent upon 25 the assertion that Massis obtained the default judgment in the Prior Action under “false pretenses” 26 by enforcing a purchase agreement that should have been “cancelled” due to his fraudulent 27 conduct, and thereafter inappropriately initiated collection proceedings. [Id. at 1 13, 16, 19, 22, 28 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT 56-57, 60, 62, 63, 67.] Accordingly, Plaintiffs’ entire Complaint is based on claims prohibited by the litigation privilege, so it must be dismissed. Sylmar Air Conditioning, supra, at 1058. Defendants have filed a Special Motion to Strike the Complaint pursuant to CCP § 425.16 for the same reasons. [RJN at Ex. 2.] Cc Plaintiffs Failed to State Claims for Fraud because their Claims are Barred by the Statute of Limitations and Lack Specificity The tort of fraud, whether for concealment, misrepresentation, or inducement, requires establishment of (1) a concealment or misrepresentation, (2) knowledge of its falsity, (3) intent to induce reliance on the concealment or misrepresentation, (4) actual reliance, (5) causation, and (6) damages. Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 990. A claim for the tort of fraud has a three-year statute of limitations. CCP § 338(d). The statute of limitations 10 accrues upon discovery of the facts constituting the deceit. Id. However, such accrual begins not 11 upon the date when discovery was first alleged, but the first date when the plaintiffs “could have 12 discovered the fraud through the exercise of reasonable diligence.” Sun ‘n Sand, Inc. v. United 13 California Bank (1978) 21 Cal.3d 671, 701. Here, all of the factual allegations supporting Plaintiffs’ causes of action for fraudulent 14 concealment, misrepresentation, and inducement are insufficient to state causes of action because 15 taken as phrased, they would be barred under the applicable three-year statute of limitations under 16 CCP § 338(d). Plaintiffs allege that they entered into the Purchase A greement for the liquor store 17 on July 11, 2016, and that all alleged misrepresentations and concealment were made “[p]rior to 18 the execution of the agreement.” [Complaint at J 11, 15, 16, 27, 36.] Confusingly, Plaintiffs first 19 alleged that they did not discover the “fraudulent intentions of Massis and Nushwat” until 20 “August, 2018,” when Massis filed suit to enforce the Purchase Agreement, but then allege that 21 Plaintiffs did not discover until the “summer of 2020” that Massis “had misstated the amount of 22 rent he had been paying, and the extent of his profits at the liquor store” in the course of negotiating the lease in 2016. [Id. at 1] 23-24, 59.] These latter allegations were an attempt to 23 “plead around” the applicable statute of limitations. However, Defendants admit that they 24 “operated the liquor store without a lease” after the purchase agreement was executed. [Id. at 4 25 18.] Implicitly, by “operating” the liquor store, Defendants would have had access to and 26 possession of all financial records, contracts business agreements, contracts, and otherwise 27 belonging to the business, since “operating” the liquor store would necessarily include paying 28 rent and other obligations of the business and collecting income from sales. Indeed, it appears MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT Defendants admit they had possession of all of the business’ financial information upon commencing their operation of it because they allege they “lacked the economic security necessary to warrant improving the property” after taking operational control of the business. [Id. at J 18.] As such, Defendants could have discovered Massis’ alleged fraud by exercising “reasonable diligence” at the time they took operational control of the liquor store sometime shortly after July 11, 2016, when the purchase agreement was executed. [Complaint at 1 11, 15, 16, 27, 36.] Since Defendants did not bring suit for this alleged fraud until September 4, 2020, well beyond 3 years after they should have discovered the fraud through reasonable diligence, (shortly after July 11, 2016), their claims are time-barred under CCP § 338(d). Additionally, even if not time-barred, Plaintiffs’ factual allegations as stated are insufficient to satisfy the necessary elements of pleading fraud. Fraud must be plead specifically 10 under a heightened pleading standard; a plaintiff must plead specific facts that “show how, when, 11 where, to whom, and by what means the representations were tendered.” Hamilton v. Greenwich 12 Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, 1614. The Complaint fails to satisfy all of 13 these elements. The only factual allegations made therein concerning the fraud are that Massis 14 concealed the liquor store’s true rent payments and profits before the sale and misrepresented his 15 ability to assign the liquor store’s lease to Plaintiffs. [Id. at 1§ 29, 39, 48.] The Complaint does 16 not allege “how,” “where,” “to whom,” and “by what means” Massis either concealed or misrepresented this information to Plaintiffs, so it fails to satisfy the heightened pleading standard 17 for claims of fraud. Further, with respect to a claim for fraudulent concealment, a plaintiff must 18 also allege that the defendant was acting under a duty to disclose the facts that were not disclosed. 19 Hahn v. Mirda (2007) 147 Cal.App.4th 740, 745. Here, Plaintiffs allege that Massis had a duty to 20 disclose the above information to Treasa but make no similar claim that he had a duty to disclose 21 that information to Patrick or John. [Id. at § 40.] As such, Plaintiffs failed to properly plead that 22 Massis fraudulently concealed information from Patrick or John. 23 Plaintiffs are highly unlikely to be able to cure these allegations through further 24 amendment. In support of Defendants’ concurrent Special Motion to Strike, Massis submitted a 25 declaration under penalty of perjury stating that the parties executed the Purchase A greement for the liquor store on July 11, 2016 and the sale was finalized by February 2017, upon which the 26 Gavins took full and exclusive possession of the liquor store and began to operate it at the 27 premises, and took possession of all financial records, business agreements, contracts, and 28 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’? COMPLAINT. otherwise belonging to the business. [RJN at Ex. 3 at 2-5, Ex. 1-3.] As such, it is undeniable that the statute of limitations for Plaintiffs’ fraud claims would have commenced by February 2017, at which point, had they exercised reasonable diligence, Plaintiffs would have discovered Massis’ alleged fraud. Plaintiffs will be unable to plead around these established facts. D Plaintiffs Failed to State Sufficient Facts to Establish a Claim for Equitable Relief to Set Aside the Default J udgment in the Prior Action A claim for equitable relief to set aside a default judgment on the basis of fraud may only be obtained upon a showing of “extrinsic fraud,” i.e. “any set of extrinsic circumstances which deprive[d] a party ofa fair adversary hearing” in the initial action. See CCP § 473; Marriage of Stevenot (1984) 154 Cal. App.3d 1051, 1069. Here, Plaintiffs have not alleged that they were deprived of a “fair adversary hearing” in the Prior Action. There are zero facts alleged stating that 10 Plaintiffs were improperly not served with the complaint in the Prior Action, that they did not 11 have notice in the Prior Action, or that they were defrauded or manipulated in any shape or form 12 from responding or participating in the Prior Action. Thus, no factual allegations support the 13 claim that Plaintiffs were deprived “of a fair adversary hearing” in the Prior Action. Instead, it appears they simply chose not to respond or participate in the PriorA ction, which caused a default 14 judgment to be issued against them. 15 Plaintiffs’ claims to set aside the judgment are improperly based only on allegations of 16 “intrinsic” fraud. “Intrinsic” fraud is fraud that “goes to the merits of the prior proceedings, which 17 should have been guarded against by the plaintiff at that time.” Marriage of Stevenot, supra, at 18 1065. “Any fraud is intrinsic if a party has been given notice of the action and has not been 19 prevented from participating therein, that is, if he or she had the opportunity to present his or her 20 case and to protect himself or herself from any mistake or fraud of his or her adversary, but 21 unreasonably neglected to do so.” Id. at 1069. In Marriage of Stevenot, the court refused to set 22 aside an earlier default judgment of dissolution of marriage because there was no showing of extrinsic fraud, but only allegations of intrinsic fraud, and the court found the moving party “had 23 her opportunity [in the earlier action] and failed to exercise diligence and take advantage of it.” 24 Id. at 1077. Here, Plaintiffs’ claim is that Defendants made false representations to the Court in 25 the Prior Action about the Purchase Agreement and the relationship between the parties, and 26 presumably obtained the default judgment “under false pretenses” because they relied on these 27 facts.” [Complaint at 1] 22, 56-57, 60, 62.] As described above, Plaintiffs had notice of the Prior 28 Action, were not prevented from participating, and had every opportunity to challenge the alleged MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO PLAINTIFFS’ COMPLAINT. fraudulent actions Massis took against them in the Prior Action itself, but they chose not to do so. [Wynns Decl. at §{/2-11.] Plaintiffs could have alleged in the Prior Action that Massis breached the Purchase Agreement, or that the agreement was “cancelled” or breached, but they did not. They cannot establish a claim for equitable relief to set aside a default judgment based on that failure, as a judgment alleged to be fraudulently obtained may only be set aside upon a showing of extrinsic, not intrinsic, fraud. Marriage of Stevenot, supra, at 1069; CCP § 473. Additionally, any claim for equitable relief to set aside a default judgment, whether or not it was fraudulently obtained, requires a showing of a meritorious defense, a satisfactory excuse for not presenting a defense to the original action, and diligence in seeking to set aside the default once discovered. Rappleyea v. Campbell (1994) 8 Cal.4th 975, 982. Plaintiffs cannot establish any of these elements as to the Prior Action. 10 First, Plaintiffs’ claim that Massis obtained the default judgment in the Prior Action under 11 fraudulent grounds because the Purchase Agreement was “cancelled” is without merit because 12 Plaintiffs failed to allege facts with sufficient specificity to establish the fraud, as explained above. 13 Moreover, Plaintiffs’ self-admitted operation of the liquor store without a lease, rather than 14 seeking a lawsuit as soon as it was clear they would not obtain an assigned lease, functions as a 15 waiver of that portion of the Purchase Agreement. [See Complaint at { 18.] “Waiver is the 16 intentional relinquishment of a known right after knowledge of the facts.” Roesch v. De Mota (1944) 24 Cal.2d 563, 572. “California courts will find waiver when a party intentionally 17 relinquishes a right or when that party’s acts are so inconsistent with an intent to enforce the right 18 as to induce a reasonable belief that such right has been relinquished.” Wind Dancer Production 19 Group v. Walt Disney Pictures (2017) 10 Cal.App.5th 56, 78. Plaintiffs intentionally relinquished 20 the right to “cancel” the Purchase Agreement by continuing to operate the liquor store even after 21 Massis failed to assign them a lease. [See Complaint at { 18.] Their operation of the liquor store 22 to date is “inconsistent with an intent to enforce the right” to have an assigned lease from Massis, 23 so that right is waived. Id. Since the right is waived, Plaintiffs would have had no m