KNM Outdoor Tribe LLC vs Roulette William Smith

Case Number

23CV02416

Case Type

Hearing Date / Time

Mon, 12/11/2023 - 10:00

Nature of Proceedings

Case Management Conference; Demurrer; Motion: Strike a Portion of the Cross-Complaint

Tentative Ruling

KNM Outdoor Tribe, LLC. v. Roulette William Smith, and related cross-action                                                                         

Case No. 23CV02416

           

Hearing Date: December 11, 2023                                         

HEARING:              (1) Cross-Defendants KNM Outdoor Tribe, LLC and Scott Wilkinson’s Demurrer to Cross-Complaint of Roulette William Smith;

(2) Cross-Defendants KNM Outdoor Tribe, LLC and Scott Wilkinson’s Motion to Strike Portions of Cross-Complaint of Roulette William Smith

ATTORNEYS:        For Plaintiff and Cross-Defendant KNM Outdoor Tribe, LLC and Cross-Defendant Scott Wilkinson: Randall Fox and Jill L. Friedman

                                    For Defendant and Cross-Complainant Roulette William Smith: Mark T. Coffin

                                                           

TENTATIVE RULING:

The demurrer to the cross-complaint of Roulette William Smith against cross-defendants KNM Outdoor Tribe, LLC and Scott Wilkinson is overruled. The motion to strike portions of the cross-complaint of Roulette William Smith against cross-defendants KNM Outdoor Tribe, LLC and Scott Wilkinson is denied. KNM Outdoor Tribe, LLC and Scott Wilkinson shall file and serve answers to the cross-complaint no later than January 5, 2024.

Background:

This action commenced on June 6, 2023, by the filing of the complaint by KNM Outdoor Tribe, LLC (“KNM”) against Roulette William Smith (“Smith”) asserting causes of action for specific performance and breach of contract.

As alleged in the complaint:

“The Property which is the subject of this action is an improved 2.6-acre parcel of land located at 2600 Foothill Road, Santa Barbara, in Santa Barbara County, California (APN 023-180-007) (the ‘Property’).” (Complaint, ¶ 2.) “On or about May 1, 2023, a written Property Sale and Purchase Agreement was entered into between Plaintiff and Defendant (the ‘Purchase Agreement’) committing to sell and

transfer the Property from Defendant to Plaintiff.” (Complaint, ¶ 4.)

“Plaintiff has requested performance of the Purchase Agreement and has performed or is ready, willing, and able to perform, all conditions, covenants, and promises required by it on its part to be performed in accordance with the terms and conditions of the Purchase Agreement. This action constitutes further request for performance of the Purchase Agreement.” (Complaint, ¶ 7.) “Defendant has failed and refused, and continues to fail and refuse, to perform the conditions of the Purchase Agreement on his part in that he refuses to execute a conveyance of the

Property as provided in the Purchase Agreement.” (Complaint, ¶ 8.) “Plaintiff has requested mediation in accordance with paragraph XVIII(a) of the Purchase Agreement. Defendant has refused to participate.” (Complaint, ¶ 9.)

On July 25, 2023, Smith filed his answer to the complaint admitting some of the allegations, denying some of the allegations, and setting forth 20 affirmative defenses.

Also on July 25, 2023, Smith filed a cross-complaint against KNM and Scott Wilkinson (“Wilkinson”) asserting causes of action for: (1) Civil Assault and Battery; (2) Fraud; (3) Negligent Misrepresentation; (4) Elder Abuse; and (5) Declaratory Relief.

As alleged in the cross-complaint:

“On or about April 30, 2023, Defendant SCOTT WILKINSON initiated a Zoom call with Cross-Complainant. Participants included Cross-Complainant ROULETTE SMITH, Nicole Smith, Todd Smith, SCOTT WILLKINSON, Mr. WILKINSON’s fiancé Melody, and some of WILKINSON’S adult children.” (Cross-Complaint, ¶ 9.) “During the April 30, 2023 Zoom call, Mr. WILKINSON discussed his proposed ideas for purchasing the PROPERTY. Cross-Complainant did not agree to Mr. WILKINSON’s proposals. Ms. WILKINSON invited Mr. SMITH to dinner the following evening, at a Japanese restaurant in Santa Barbara (which upon information and belief is named ‘Oku’).” (Cross-Complaint, ¶ 10.)

“On May 1, 2023, Cross-Complainant attended a dinner with Cross-Defendant and others. A large amount of Japanese beer was consumed by all parties. At the end of the dinner, Cross-Defendant WILKINSON insisted that Cross-Complainant sign a written ‘sales contract’ to sell his interest in the PROPERTY.” (Cross-Complaint, ¶ 11.) “Prior to the dinner, Cross-Complainant SMITH had never seen a ‘sales agreement’ of any kind from Mr. WILKINSON, nor did he review the sales contract that Cross-Defendant had prepared that evening. Mr. SMITH told Mr. WILKINSON at the dinner that Cross-Complainant was not prepared to sign a contract at that time, because the parties had not reached agreement on several necessary terms, and because Cross-Complainant required any contracts to be reviewed and approved by legal counsel and by his adult children.” (Cross-Complaint, ¶ 12.) “At the May1, 2023 dinner, Mr. WILKINSON physically grabbed Cross-Complainant’s hand while Mr. SMITH was holding a pen. While holding SMITH’s hand, WILKINSON attempted to forge Cross-Complainant’s signature on the last page of the agreement, above the blank line for his signature. Mr. SMITH once again told Cross-Defendant in definitive terms that he would not sign the purported agreement.” (Cross-Complaint, ¶ 13.)

“Upon learning that Cross-Complainant would not execute the purported contract, Mr. WILKINSON wrote the words ‘I Intend to Sale to Scott’ at the bottom of the page . . .. Cross-Defendant WILKINSON also wrote the phrase ‘* This precedes Mr. Smith + Todd + Nicole reviewing to ensure legal entity [sic],’ along with several arrows and a circle.” (Cross-Complaint, ¶ 14.) “Cross-Complainant signed his actual signature inside the circle, next to the statement ‘I Intend to Sale to Scott . . .’ as a letter of intent. In so doing, Cross-Complainant memorialized his willingness to sell the PROPERTY, but only after the remaining terms had been agreed upon by the parties, and after the entire contract had been reviewed and approved by Cross-Complainant’s legal counsel, and by his adult children Todd and Nicole.” (Cross-Complaint, ¶ 15.)

KNM and Wilkinson now demur to Smith’s first, second, and third causes of action and seek to strike item six in the prayer for damages: “For an award of attorney’s fees, costs and expenses incurred as allowed by the contract and California law.”

Smith opposes both the demurrer and the motion to strike.

Analysis:

1. Demurrer

“The rules by which the sufficiency of a complaint is tested against a general demurrer are well settled. We not only treat the demurrer as admitting all material facts properly pleaded, but also give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. (Speegle v. Board of Fire Underwriters (1946) 29 Cal.2d 34, 42.)’ (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)” (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38 (Quelimane).)

“To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.)

A demurrer searches for defects in the allegations of the pleading. “A demurrer is simply not the appropriate procedure for determining the truth of disputed facts.” (Ramsden v. Western Union (1977) 71 Cal.App.3d 873, 879.) As such, the court will disregard the factual arguments contained in the demurrer.

            First Cause of Action for Civil Assault and Battery

KNM and Wilkinson argue that the cross-complaint fails to allege facts sufficient to constitute a cause of action against KNM for Civil Assault and Battery. KNM and Wilkinson’s entire argument in this regard is: “SMITH has pled insufficient facts to hold KNM, an entity, liable for assault and battery. There is no mention of KNM anywhere in the first cause of action, or in any underlying facts that would impart liability on KNM for this intentional tort. Therefore, SMITH has failed to allege sufficient facts to state a cause of action against KNM for assault and battery.” (Demurrer, p. 5, ll. 8-11.)

In opposition, Smith argues that KNM may be held liable for the actions of Wilkinson because Wilkinson was KNM’s agent when the grabbing of the hand occurred and that the actions were performed within the scope of the agency.

“The elements of a cause of action for assault are: (1) the defendant acted with intent to cause harmful or offensive contact, or threatened to touch the plaintiff in a harmful or offensive manner; (2) the plaintiff reasonably believed he was about to be touched in a harmful or offensive manner or it reasonably appeared to the plaintiff that the defendant was about to carry out the threat; (3) the plaintiff did not consent to the defendant's conduct; (4) the plaintiff was harmed; and (5) the defendant's conduct was a substantial factor in causing the plaintiff's harm.” (Carlsen v. Koivumaki (2014) 227 Cal.App.4th 879, 890.)

“ ‘ “A battery is any intentional, unlawful and harmful contact by one person with the person of another. . . . A harmful contact, intentionally done is the essence of a battery.... A contact is “ ‘unlawful’ ” if it is unconsented to . . .. ’ ”[Citation.] The elements of a civil battery are: “ ‘ “1. Defendant intentionally did an act which resulted in a harmful or offensive contact with the plaintiff’s person; [¶] 2. Plaintiff did not consent to the contact; [and][¶] 3. The harmful or offensive contact caused injury, damage, loss or harm to the plaintiff.” ’ ”[Citation.]’ ” [Citation.]” (Piedra v. Dugan (2004) 123 Cal.App.4th 1483, 1495.)

KNM and Wilkinson do not argue that the cross-complaint fails to state a cause of action for civil assault and battery against Wilkinson in his individual capacity. The cross-complaint alleges that each cross-defendant, including Wilkinson, is “the agent and/or employee” of the other defendants, including KNM. (Cross-Complaint, ¶¶ 5, 6, 7.)

“[A] principal may be liable for the wrongful conduct of its agent, even if that conduct is criminal, in one of three ways: (1) if the “ ‘ “principal directly authorizes ... [the tort or] crime to be committed” ’ ” [Citation.]; (2) if the agent commits the tort “ ‘in the scope of his employment and in performing service on behalf of the principal’ ” [citations], “ ‘regardless of whether the wrong is authorized or ratified by [the principal]’ ” [citations], and even if the wrong is criminal [citation]; see generally Civ. Code, § 2338; or (3) if the principal ratifies its agent’s conduct “ ‘after the fact by . . . voluntar[ily] elect[ing] to adopt the [agent’s] conduct . . . as its own’ ” [Citations.]” (Doe v. Roman Catholic Archbishop of Los Angeles (2016) 247 Cal.App.4th 953, 969.)

Here, for pleading purposes, Smith has alleged sufficient facts regarding Wilkinson’s actions and agency to overcome demurrer. The demurrer to the first cause of action will be overruled.

            Second Cause of Action for Fraud

KNM and Wilkinson argue that the allegations of fraud are “general, conclusory, and fail to establish each element of an intentional or negligent misrepresentation claim against Defendant with the requisite specificity.” (Demurrer, p. 5, ll. 15-19.)

“The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) “In California, fraud must be pled specifically; general and conclusory allegations do not suffice. [Citations.] … [¶] This particularity requirement necessitates pleading facts which ‘show how, when, where, to whom, and by what means the representations were tendered.’ [Citation.]” (Id. at p. 645, internal quotation marks omitted.) 

Allegations of “knowledge” and “intent” are allegations of facts, which are sufficiently alleged through use of the term. (See City of Pomona v. Superior Court (2001) 89 Cal.App.4th 793, 803 [“Allegations of the defendant’s knowledge and intent to deceive may use conclusive language.”].)

“Less specificity should be required of fraud claims “ ‘when ‘it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy,’ ” [citation]; “ ‘[e]ven under the strict rules of common law pleading, one of the canons was that less particularity is required when the facts lie more in the knowledge of the opposite party. . . .’ ” [Citation.] (Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384.) 

In addition to the allegations set forth above, the cross-complaint alleges:

“Cross-Defendants represented that Mr. SMITH’s signature on page 6 of the purported contract, next to the handwritten language ‘I intend to sale to Scott,’ would not bind the parties to the terms of the purported contract, but would instead signify that Cross-Complainant intended to execute an agreement in the future, after the parties had reached agreement on inter alia the sales price, the amount of a non-refundable downpayment, the amount and terms of seller financing, and manner and form that title would be transferred. Furthermore, Cross-Defendants represented that Cross-Complainant would have an opportunity to have the purported contract agreement reviewed by an attorney. Furthermore, Cross-Defendants represented that Cross-Complainant’s adult children Todd and Nicole would have the opportunity and ability to review and approve or disapprove the purported contract.” (Cross-Complaint, ¶ 20.)

“In fact, these representations by Cross-Defendant were false. The true facts were that at the May 1, 2023 dinner, Cross-Defendant had no intention of allowing further negotiations before falsely claiming that the parties had reached a binding agreement. In fact, Cross-Defendants secretly intended to induce Cross- Complainant to sign the purported contract and later claim that his signature at the bottom of page 6 constituted acceptance of the entire six-page proposed written

contract, which Cross-Defendants presented to Cross-Complainant for the first time at the May 1, 2023 dinner.” (Cross-Complaint, ¶ 21.) “In reliance upon Cross-Defendants’ misrepresentations, Cross-Complainant signed the bottom of page 6 of the purported contract attached to the Complaint as plaintiff’s Exhibit A.” (Cross-Complaint, ¶ 22.)

“As a direct result of Cross-Defendants’ fraudulent misrepresentations, Cross-Complainant has suffered economic damage, and has incurred expenses in an amount to be proven at trial, including attorney’s fees, litigation costs, and expert fees.” (Cross-Complaint, ¶ 23.)

The cross-complaint alleges all of the essential elements of fraud including the “how, when, where, to whom, and by what means the representations were tendered.” The demurrer will be overruled as to the second cause of action.

            Third Cause of Action for Negligent Misrepresentation

As with the fraud cause of action, KNM and Wilkinson argue that the allegations of negligent misrepresentation are “general, conclusory, and fail to establish each element of an intentional or negligent misrepresentation claim against Defendant with the requisite specificity.” (Demurrer, p. 5, ll. 15-19.)

“The elements of negligent misrepresentation are “ ‘(1) the misrepresentation of a past or existing material fact, (2) without reasonable ground for believing it to be true, (3) with intent to induce another's reliance on the fact misrepresented, (4) justifiable reliance on the misrepresentation, and (5) resulting damage.’ ” [Citation.] While there is some conflict in the case law discussing the precise degree of particularity required in the pleading of a claim for negligent misrepresentation, there is a consensus that the causal elements, particularly the allegations of reliance, must be specifically pleaded. [Citations.]” (National Union Fire Ins. Co. of Pittsburg, PA v. Cambridge Integrated Services Group, Inc. (2009) 171 Cal.App.4th 35, 50.)

Here, as quoted above, Smith has alleged all of the essential elements of negligent misrepresentation including the misrepresentation of facts without reasonable grounds for believing them to be true, intent to induce, justifiable reliance, and resulting damages. “In justifiable reliance upon these representations, Cross-Complainant was induced to, and did, execute the bottom of page 6 of Plaintiff’s Exhibit A, purporting to be a contract with Cross-Defendants for sale of the PROPERTY. Had Cross-Complainant known the actual facts, he would not have taken such actions.” (Cross-Complaint, ¶ 29.)

The demurrer to the third cause of action will be overruled.

2. Motion to Strike

“The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading.” (Code Civ. Proc., § 436, italics added.) As with demurrers, “[t]he grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.” (Code Civ. Proc., § 437, subd. (a).)

“An immaterial allegation in a pleading is any of the following:

“(1) An allegation that is not essential to the statement of a claim or defense.

“(2) An allegation that is neither pertinent to nor supported by an otherwise sufficient claim or defense.

“(3) A demand for judgment requesting relief not supported by the allegations of the complaint or cross-complaint.” (Code Civ. Proc., § 431.10, subd. (b).)

“An ‘immaterial allegation’ means ‘irrelevant matter’ as that term is used in Section 436.” (Code Civ. Proc., § 431.10, subd. (c).)

“[J]udges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.” [Clauson v. Sup.Ct. (Pedus Services, Inc.) (1998) 67 CA4th 1253, 1255.)

As noted above, KNM and Wilkinson seek to strike item six in the prayer for damages: “For an award of attorney’s fees, costs and expenses incurred as allowed by the contract and California law.” KNM and Wilkinson argue that the contract does not provide for an award of attorney fees.

Smith does not dispute that the contract fails to provide for attorney fees. Rather, Smith argues that the language “and California law” makes the prayer for relief proper. At the pleading stage, the court will exercise its discretion and decline to strike the prayer for relief. By doing so, the court offers no opinion regarding Smith’s ability to later prove and provide authority for recovery of attorney fees.