Tentative Ruling: Carpinteria Group LLC v. Frontier California Inc., et al.

Case Number

26CV03680

Case Type

Civil Law & Motion

Hearing Date / Time

Wed, 09/30/2026 - 10:00

Nature of Proceedings

Motions to Strike (2); Demurrers (3); Application to Appear Pro Hac Vice

Tentative Ruling

For Plaintiff and Cross-Defendant Carpinteria Group LLC and Cross-Defendants SOCAL Holdings LLC and Benjamin A. Eilenberg: Richard Jacobs, Law Offices of Richard Jacobs

For Defendant and Cross-Complainant Frontier California Inc.: Gregory Evans, Etelle Stephan, Gregory J. DuBoff, McGuireWoods LLP

For Defendant City of Carpinteria: Matthew L. Hofer, Brownstein Hyatt Farber Schreck LLP

For Defendant Blu Croix LLC: Daniel M. Shapiro

RULING

For all reasons stated herein:

Cross-Defendants Carpinteria Group LLC, SOCAL Holdings LLC, and Benjamin A. Eilenberg’s special motion to strike portions of Fronter California Inc.’s cross-complaint is denied in its entirety.
The hearings on Defendant City of Carpinteria’s demurrer to plaintiff’s complaint, and defendant Frontier California Inc.’s demurrer to plaintiff’s complaint and motion to strike portions of plaintiff’s complaint are continued to October 21, 2026.
1. Carpinteria Group LLC, SOCAL Holdings LLC, and Benjamin A. Eilenberg shall: (1) Serve the August 27, 2026 declaration of Richard Jacobs on all parties that have appeared in this action, no later than 5 p.m. on September 30, 2026, (2) serve the “revised opposition” to City of Carpinteria’s demurrer to plaintiff’s complaint on all parties that have appeared in this action, no later than 5 p.m. on September 30, 2026, and (3) file proof of service of the documents no later than October 2, 2026.
2. Any reply to cross-defendants’ revised opposition to the City of Carpinteria’s demurrer shall be filed and served no later than October 14, 2026.
Cross-Defendants’ demurrer to Frontier California Inc.’s cross-complaint is overruled in its entirety.
1. Cross-Defendants shall file and serve their answers to Frontier California Inc.’s cross-complaint no later than October 14, 2026.
The application of attorney Gregory J. DuBoff to appear as counsel pro hac vice for Frontier California Inc. is granted.

Background

This action commenced on June 2, 2026, by the filing of the complaint by plaintiff Carpinteria Group, LLC (“Carpinteria Group”) against defendants Frontier California Inc. (“Frontier”), Blu Croix Ltd. (“Blu Croix”), and the City of Carpinteria (the “City”) for: (1) Breach of Contract - against Frontier; (2) Breach of Implied Covenant of Good Faith and Fair Dealing - against Frontier and Blu Croix; (3) Fraudulent Concealment - against Frontier and Blu Croix; (4) Negligent Misrepresentation - against Frontier and Blu Croix; (5) Specific Performance/Quiet Title - against Frontier; (6) Professional Negligence - against Blu Croix; (7) Negligent Interference with Prospective Economic Advantage - against Blu Croix; (8) Violation of the Housing and Accountability Act - against the City; (9) Violation of the Permit Streamlining Act - against the City; (10) Violation of the Housing Crisis Act of 2019 - against the City; (11) Intentional Interference with Contractual Relations - against the City; and (12) Intentional Interference with Prospective Economic Advantage - against all defendants.

The 186 paragraph complaint alleges that on August 9, 2024, Carpinteria Group entered into a purchase and sale agreement (the “agreement”) with Frontier for a parcel of land located at 5115 Ogan Road, Carpinteria (the “property”). (Compl., ¶ 1.) The agreement contemplated development of a multifamily residential housing project under California’s Builder’s Remedy (Gov. Code § 65589.5). (Ibid.)

As a condition of the agreement, Frontier undertook a non-waivable contractual obligation to exercise diligent, commercially reasonable efforts to obtain a Certificate of Compliance satisfying the applicable Subdivision Contingency. (Compl., ¶ 2.) Only upon a genuine failure to satisfy that contingency, despite such efforts, could Frontier invoke the agreement’s automatic termination provision and, even upon such failure, Carpinteria Group retained the right in the contract to complete the purchase, with no reduction in the purchase price, with such title as Frontier is able to convey on the closing date. (Ibid.)

For nearly two years, Frontier, and its retained land use consultant, Blu Croix, failed to exercise commercially reasonable efforts. (Compl., ¶ 3.)

Carpinteria Group has learned that Frontier was facing internal and external pressure to kill off the deal because of public relations on the sale of the property and the proposed use for low-income housing, and believes that, at a certain point, Frontier was purposefully failing. (Compl., ¶ 6.)

In a separate matter, but related to the present deal, Carpinteria Group initiated litigation against the City and, as part of that action, issued subpoenas for Frontier, Blu Croix, and a real estate agent related to the deal. (Compl., ¶ 7.) Within eight minutes of receiving Carpinteria Group’s courtesy notice that it had issued the subpoenas, Frontier purported to terminate the agreement. (Compl., ¶ 8.) The termination was a tactical, retaliatory, maneuver designed to escape the transaction, moot the subpoenas, and deprive Carpinteria Group of a parcel of land that is uniquely suited to, and legally protected for, residential housing development. (Compl., ¶ 9.) Upon receiving the attempt to terminate the agreement, Carpinteria Group immediately informed Frontier that it wanted to complete the purchase with such title that Frontier was able to convey. (Ibid.)

Frontier is attempting to use the purported termination to overrule the contract which allows Carpinteria Group to close on the property under a partition deed or tenancy-in-common if Frontier was unable to obtain the lot split. (Compl., ¶ 10.)

The City independently contributed to the harm through a pattern of procedural obstruction and violation of mandatory duties imposed by California’s housing protection statutes, including the Housing Accountability Act, the Permit Streamlining Act, and the Housing Crisis Act of 2019. (Compl., ¶ 11.)

Additional allegations of the complaint will be discussed below where appropriate.

On June 18, 2026, the City filed its demurrer to the eighth, ninth, tenth, eleventh, and twelfth causes of action of Carpinteria Group’s complaint, arguing that the causes of action fail to state facts sufficient to constitute causes of action against the City. Carpinteria Group filed opposition to the demurrer on September 17, 2026.

On July 23, 2026, Frontier filed its demurrer to the first, second, third, fourth, fifth, and twelfth causes of action of Carpinteria Group’s complaint, arguing that the causes of action fail to state facts sufficient to constitute causes of action against Frontier. The proof of service attached to the demurrer indicates that the demurrer was timely served on Carpinteria Group on July 23, 2026. Carpinteria Group has not filed opposition or any other response to the demurrer.

On July 23, 2026, Frontier also filed its motion to strike portions of Carpinteria Group’s complaint. Carpinteria Group has not filed opposition or any other response to the motion to strike.

Also on July 23, 2026, Frontier filed its cross-complaint against Carpinteria Group, SOCAL Holdings, LLC (“SOCAL”), and Benjamin A. Eilenberg (“Eilenberg”) (collectively “cross-defendants”), for: (1) Fraud - Deceit; (2) Fraudulent Inducement and Promissory Fraud; (3) Fraudulent Concealment; (4) Breach of the Implied Covenant of Good Faith and Fair Dealing; (5) Violation of Business & Professions Code, section 17200 et seq.; and (6) Declaratory Relief. All causes of action are alleged against all cross-defendants.

As alleged in the cross-complaint:

In May 2024, Frontier first became aware of Carpinteria Group’s interest in purchasing a portion of the property. (Cross-Compl., ¶ 10.)

The eastern portion of the property is occupied by an existing telecommunication switching facility with associated parking, circulation areas, and access provided by two driveways along Ogan Road, while the western portion is undeveloped and bounded on three sides by roads and a roundabout. (Cross-Compl., ¶ 11.)

From the beginning of the parties’ negotiations, Carpinteria Group represented that its intent was to build a 10,000 square foot, four-unit, residential development on the unused portion of the property. (Cross-Compl., ¶ 12.) Carpinteria Group never disclosed that its true intent was to apply to build a 110-unit development. (Ibid.)

On August 9, 2024, Carpinteria Group and Frontier executed the agreement for an approximately 25,000-square-foot portion of the property. (Cross-Compl., ¶ 13.) Frontier executed the agreement with the understanding that Carpinteria Group intended to build a four-unit residential development and based on Carpinteria Group’s representations confirming the same. (Ibid.) Eilenberg signed the agreement as COO on behalf of Carpinteria Group. (Cross-Compl., ¶ 14.)

The agreement contains a “Subdivision Contingency” under which Frontier was to seek, from the City or the County of Santa Barbara, a certificate of compliance confirming that the land complied with applicable subdivision requirements, including any required access easements connecting the land to Ogan Road. (Cross-Compl., ¶ 15.)

Frontier would never have entered into the agreement had it known that Carpinteria Group intended to submit an application for a 110-unit development. (Cross-Compl., ¶ 17.) Frontier believed that it would only be able to obtain a certificate of compliance confirming the subdivision requirements if the development plan for the property was a small, four unit, residential build. (Ibid.)

In December 2024, cross-defendants were preparing their preliminary application form for the new development and, on December 6, 2024, cross-defendants sent Kelley Stewart, Frontier’s Director of Facilities and Real Estate, a preliminary application form. (Cross-Compl., ¶¶ 20-21.) The last page of the application is a Property Owner Affidavit which states: “Before this application can be accepted, the owner of each property involved must provide a signature to verify the Preliminary Application is being filed with their knowledge.” (Cross-Compl., ¶ 21 & Exh. 2.) The affidavit further requires the property owner to “hereby consent to the filing of this Preliminary Application on my property for processing.” (Ibid.)

The preliminary application form that cross-defendants provided to Stewart described the project as “a multifamily residential development of 4 townhouse units that includes 1 unit restricted for low income” and comprising [?] feet of construction. (Cross-Compl., ¶ 22.) Stewart signed this version of the preliminary application form on December 6, 2024. (Ibid.)

Without Frontier’s knowledge or consent, cross-defendants submitted a different version of the preliminary application form to the City on December 30, 2024, which described the project as “a multistory, multifamily residential development of 110 units that includes 22 units restricted for low income with a total of 220,000SF of construction.” (Cross-Compl., ¶ 23.) Cross-defendants submitted the preliminary application form with Stewart’s signature from December 6, 2024, fraudulently representing that the preliminary application form was being filed with Frontier’s knowledge. (Ibid.)

Without disclosing to Frontier the true scope of the application, cross-defendants continued to procure Stewart’s signature by fraud. (Cross-Compl., ¶ 24.) In preparation for filing the final Project Application, cross-defendants presented Stewart with a consent form whereby Frontier was required to certify that Carpinteria Group was “authorize[d] to submit the attached application.” (Cross-Compl., ¶ 24 & Exh. 4.) The form presented to Stewart generically described the project as “a multifamily residential development with residential units above garage parking.” (Ibid.) Thinking that the project application was consistent with the four-unit preliminary application form provided in December 2024, Stewart signed the consent form on May 30, 2025. (Ibid.) The cross-defendants intentionally and fraudulently withheld the complete project application from Stewart because they knew Frontier would never consent to submitting the application had the true scale of the project been disclosed. (Ibid.)

On June 26, 2025, cross-defendants submitted their project application to the City. (Cross-Compl., ¶ 25.) The project application detailed an 18-story, 264,000 square foot building comprising 130 separate units. (Cross-Compl., ¶ 25 & Exh. 5.) Appended to the application was the purported consent form signed by Stewart on May 30, 2025. (Ibid.)

Around June 30, 2025, Stewart learned that cross-defendants had filed the project application and also learned, for the first time, that the project application contemplated a 130-unit development. (Cross-Compl., ¶ 26.)

Additional allegations of the complaint will be discussed below where appropriate.

On August 8, 2026, cross-defendants filed their demurrer to each of the causes of action contained in the cross-complaint on the ground that each cause of action fails to state facts sufficient to constitute causes of action.

On September 16, 2026, Frontier filed opposition to the demurrer.

On August 24, 2026, cross-defendants filed their special motion to strike (the “Anti-SLAPP motion”) portions of Frontier’s cross-complaint, arguing that the causes of action and allegations arise from cross-defendants’ protected petitioning and free speech activity and that Frontier cannot establish a probability of prevailing.

On September 16, 2026, Frontier filed its response/opposition to the Anti-SLAPP motion, arguing that cross-defendants’ illegal conduct defeats their motion, that Frontier’s claims do not arise from protected activity, and that, even if the claims did arise from protected activity, Frontier has demonstrated a probability of prevailing.

On July 23, 2026, Virginia attorney Gregory J. DuBoff filed his application to appear as counsel pro hac vice for Frontier. On August 4, 2026, Duboff filed an amended application which contained his previously omitted Virginia State Bar Number.

The anti-SLAPP motion will be addressed first.

Analysis

Cross-Defendants’ Anti-SLAPP Motion

By way of the anti-SLAPP motion, cross-defendants seek to strike the following from the cross-complaint:

The fourth cause of action for breach of the implied covenant of good faith and fair dealing, in its entirety;
The fifth cause of action for violation of Business & Professions Code section 17200, et seq., in its entirety;
Paragraphs 29 through 44, and each paragraph incorporating them by reference (45, 54, 70, 85, and 103), to the extent those paragraphs allege or rely upon cross-defendants’ litigation activity against other public entities as evidence of liability;
Paragraph 98, in its entirety;
Paragraph 110, in its entirety; and
Paragraphs 22-25, 46-49, 61, 77, and 119, to the extent those paragraphs premise liability on the content of, or act of submitting, the SB 330 preliminary application or project application to the City.

(Note: Each of the causes of action contained in the cross-complaint incorporate all the paragraphs preceding the cause of action.)

Code of Civil Procedure section 425.16 provides, in relevant part:

“(a) The Legislature finds and declares that there has been a disturbing increase in lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances. The Legislature finds and declares that it is in the public interest to encourage continued participation in matters of public significance, and that this participation should not be chilled through abuse of the judicial process. To this end, this section shall be construed broadly.

“(b)(1) A cause of action against a person arising from any act of that person in furtherance of the person’s right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.

“(2) In making its determination, the court shall consider the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.

“(3) If the court determines that the plaintiff has established a probability that he or she will prevail on the claim, neither that determination nor the fact of that determination shall be admissible in evidence at any later stage of the case, or in any subsequent action, and no burden of proof or degree of proof otherwise applicable shall be affected by that determination in any later stage of the case or in any subsequent proceeding.

* * *

“(e) As used in this section, “act in furtherance of a person’s right of petition or free speech under the United States or California Constitution in connection with a public issue” includes: (1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law, (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law, (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest, or (4) any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.”

“Resolution of an anti-SLAPP motion involves two steps. First, the defendant must establish that the challenged claim arises from activity protected by [Code of Civil Procedure] section 425.16. [Citation.] If the defendant makes the required showing, the burden shifts to the plaintiff to demonstrate the merit of the claim by establishing a probability of success. We have described this second step as a ‘summary-judgment-like procedure.’ [Citation, fn.] The court does not weigh evidence or resolve conflicting factual claims. Its inquiry is limited to whether the plaintiff has stated a legally sufficient claim and made a prima facie factual showing sufficient to sustain a favorable judgment. It accepts the plaintiff’s evidence as true, and evaluates the defendant’s showing only to determine if it defeats the plaintiff’s claim as a matter of law. [Citation.] ‘[C]laims with the requisite minimal merit may proceed.’ [Citation.]” (Baral v. Schnitt (2016) 1 Cal.5th 376, 384–385.)

First Prong - Protected Activity

“A claim arises from protected activity when that activity underlies or forms the basis for the claim. [Citations.] Critically, ‘the defendant’s act underlying the plaintiff’s cause of action must itself have been an act in furtherance of the right of petition or free speech.’ [Citations.] ‘[T]he mere fact that an action was filed after protected activity took place does not mean the action arose from that activity for the purposes of the anti-SLAPP statute.’ [Citations.] Instead, the focus is on determining what ‘the defendant’s activity [is] that gives rise to his or her asserted liability—and whether that activity constitutes protected speech or petitioning.’ [Citation.] ‘The only means specified in section 425.16 by which a moving defendant can satisfy the [“arising from”] requirement is to demonstrate that the defendant’s conduct by which plaintiff claims to have been injured falls within one of the four categories described in subdivision (e)....’ [Citation.] In short, in ruling on an anti-SLAPP motion, courts should consider the elements of the challenged claim and what actions by the defendant supply those elements and consequently form the basis for liability.” (Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1062-1063.)

Cross-defendants argue that the portions of the complaint that they seek to have stricken involves “converting [Carpinteria Group’s] litigation activity and government-agency filings into an independent source of tort liability.” (Anti-SLAPP motion, p. 5, ll. 3-5.) The argument fails.

As relevant here, the fourth cause of action is for breach of the implied covenant of good faith and fair dealing, which includes paragraphs Nos. 85 through 102, and is premised, not upon any protected activity, but on breach of the agreement (referred to as the “PSA” in the cross-complaint and other documents). As relevant here, the paragraphs include:

“Frontier and Carpinteria Group entered into the PSA on August 9, 2024.” (Cross-Compl., ¶ 86.)

“The PSA contained a Subdivision Contingency governing the conditions under

which the transaction would proceed or terminate.” ((Cross-Compl., ¶ 87.)

“The PSA provided that if the Subdivision Contingency was not satisfied despite Frontier’s diligent, commercially reasonable efforts, the PSA would be deemed automatically terminated, the deposit would be returned, and the parties would have no further obligations except surviving obligations.” (Cross-Compl., ¶ 88.)

“Every contract contains an implied covenant of good faith and fair dealing requiring that neither party do anything to unfairly interfere with the other party’s right to receive the benefits of the contract.” (Cross-Compl., ¶ 89.)

“Frontier performed, substantially performed, or was excused from performing its obligations under the PSA.” (Cross-Compl., ¶ 90.)

Cross-Defendants breached the implied covenant by using the PSA not as a bona fide purchase agreement but as a device to create leverage, increase pressure on Frontier and the City, and manufacture claims.” (Cross-Compl., ¶ 95.)

“Cross-Defendants breached the implied covenant by representing a genuine development purpose while concealing its broader litigation-leverage strategy.” (Cross-Compl., ¶ 96.)

“Cross-Defendants breached the implied covenant by asserting rights under the PSA in a manner designed to deprive Frontier of the benefit of the Subdivision Contingency and termination provisions.” (Cross-Compl., ¶ 97.)

“Cross-Defendants breached the implied covenant by using subpoenas, parallel City litigation, and public pressure as transactional leverage rather than as ordinary steps toward closing a bona fide purchase. Carpinteria Group’s own complaint alleges that it initiated City litigation, issued subpoenas to Frontier and others in that litigation, and then characterized Frontier’s April 30, 2026 termination as retaliatory because it followed a subpoena notice by approximately eight minutes.” (Cross-Compl., ¶ 98.)

“Cross-Defendants breached the implied covenant by using the claimed housing project as a litigation instrument while claiming that Frontier was responsible for the predictable failure of the entitlement and subdivision process.” (Cross-Compl., ¶ 99.)

“Further, Cross-Defendants’ practice of presenting Frontier’s representative with a limited-scope application for signature while filing a substantially different and larger application with the City-as occurred with the four-unit application presented for signature in December 2024 followed by the 110-unit application actually filed, and the four-page excerpt presented for signature in May 2025 followed by the complete 130-unit application actually filed-is itself an unfair and fraudulent business practice within the meaning of the UCL, independent of the underlying housing project.” (Cross-Compl., ¶ 102.)

“Assertions that are “ ‘merely incidental’ ” or “ ‘collateral’ ” are not subject to section 425.16. [Citations.] Allegations of protected activity that merely provide context, without supporting a claim for recovery, cannot be stricken under the anti-SLAPP statute.” (Baral v. Schnitt, supra, 1 Cal.5th at p. 394.)

Cross-defendants’ entire argument pertaining to the fourth cause of action centers around paragraph No. 98. Cross-defendants’ argument, in order to have any validity, necessitates taking paragraph No. 98 out of context. Reading the cross-complaint in context, it is apparent that the references to subpoenas, litigation, and public pressure pertain to some of the mechanisms that cross-defendants utilized to breach the implied covenant rather than as the basis of the cause of action. They are assertions that provide context and are merely incidental to the cause of action.

The fifth cause of action for violation of Business & Professions Code section 17200, et seq., which consists of paragraphs Nos. 103 through 116, is premised, not upon any protected activity, but on fraudulent business practices. As relevant here, the paragraphs include:

“Cross-Defendants engaged in unfair and fraudulent business practices by forming and using single-purpose real estate and housing entities to induce private counterparties and municipalities into land-use disputes that Cross-Defendants intended to monetize or leverage through litigation rather than resolve through bona fide development.” (Cross-Compl., ¶ 105.)

“Cross-Defendants’ conduct was fraudulent because members of the public, landowners, sellers, municipalities, and courts were likely to be deceived into believing that Cross-Defendants’ asserted housing projects were bona fide development efforts when Frontier alleges they were designed principally to create leverage.” (Cross-Compl., ¶ 106.)

“Cross-Defendants’ conduct was unfair because it offends established public policy favoring good-faith housing development, honest contracting, transparent entitlement processes, and fair competition in real estate development.” (Cross-Compl., ¶ 107.)

“Cross-Defendants’ conduct was also unfair because it imposed substantial costs on sellers, public agencies, courts, residents, and legitimate housing developers while providing Cross-Defendants with litigation leverage obtained through deception.” (Cross-Compl., ¶ 108.)

“Cross-Defendants’ business practice is evidenced by the repeated formation of related entities sharing the same Fullerton address and SOCAL Holdings management structure.” (Cross-Compl., ¶ 109.)

“Cross-Defendants’ business practice is further evidenced by repeated litigation involving related entities and municipal defendants.” (Cross-Compl., ¶ 110.)

“Cross-Defendants’ acts were not isolated or accidental; they were part of a repeatable business model.” (Cross-Compl., ¶ 111.)

Cross-defendants’ argument centers on paragraph 110. That paragraph states that the “business practice is further evidenced by repeated litigation . . ..” (Italics added.) Analogous to the fourth cause of action, the objected to allegations of the fifth cause of action pertain to some of the mechanisms that cross-defendants utilized in violation of the Business & Professions Code rather than as the basis of the cause of action. As with the fourth cause of action the objected to allegations provide context and are merely incidental to the cause of action.

As noted above, cross-defendants seek an order striking individual paragraphs Nos. 29-44, paragraph No. 98 (which has been discussed above), paragraph No. 110 (which has been discussed above), paragraphs Nos. 22-25, 46-49, 61, 77, and 119. There is no merit to cross-defendants’ arguments as to why the paragraphs should be stricken. None of those paragraphs provide anything more than context for Frontier’s causes of action and are not alleged as the basis to challenge any protected activity.

Just because Frontier provides context to the cross-complaint, and the included causes of action, by setting forth allegations of the filing of applications, subpoenas, and other legal actions, none of those things underly or form the basis for any of Frontier’s claims are not based on any protected activity on the part of cross-defendants. Reading the complaint as a whole, it is apparent that the basis of each cause of action is that cross-defendants allegedly procured Frontier’s signatures by fraud and engaged in other actions in violation of the law and the agreement itself.

Cross-defendants have not met their initial burden of establishing that the claims arise from activity protected by Code of Civil Procedure section 425.16.

Second Step - Probability of Success

As cross-defendants have not met their initial burden, there is no need to address the second step. However, it is worth noting that, had cross-defendants met their initial burden, the uncontradicted evidence presented by Frontier of cross-defendants’ forgery and fraud would have been sufficient to deny the Anti-SLAPP motion on that basis, and the court would have done so.

The City’s Demurrer

As noted above, the City demurs to the eighth through twelfth cause of action.

The first thing that must be addressed is Carpinteria Group’s opposition.

Carpinteria Group filed its initial opposition on August 20, 2026. On August 26, 2026, the City filed a reply to the opposition and, among other things, pointed out that Carpinteria Group’s argument as to the tenth cause of action relied on nonexistent statutory language that was apparently the result of a generative artificial intelligence (AI) hallucination.

On August 27, 2026, counsel for Carpinteria Group filed a declaration admitting that: “In preparing Plaintiff’s Opposition to the City’s Demurrer . . ., which was due to be filed and served on August 20, 2026, I used Claude, an AI-assisted drafting tool made available by Anthropic, to review my initial draft and check spelling[,] gramm[a]r, and case citations. I did personally review, edit, and direct the drafting, but simply put, I rushed my review and failed.” (Jacobs decl., ¶ 2.)

“The AI tool’s draft included bracketed editorial notes directed to me as counsel, flagging specific legal citations and characterizations that the tool had not independently verified and that it recommended I verify before filing. One such note appeared in the discussion of the Tenth Cause of Action under the Housing Crisis Act of 2019.” (Jacobs decl., ¶ 3.)

“I did not verify that citation before the Opposition was filed and served. As a result, the Opposition stated that “ ‘Plaintiff’s own pleading of the statutory language tracks the statute’s prohibition on ‘ “applying or imposing any new or more restrictive standards, conditions, or denial grounds on a housing development project after the application has been submitted.” ’ (Compl. ¶ 172, quoting Gov. Code, § 66300, subd. (b)(1)(A).)’ ” I have since confirmed that this quoted language does not appear in Government Code section 66300, subdivision (b)(1)(A), or elsewhere in that section. Subdivision (b)(1)(A) instead addresses reductions in the intensity of land use permitted under a general plan, specific plan, or zoning designation. The characterization of this language as a “ ‘quot[e]’ ” of the statute was incorrect, and I take full responsibility for that error. The duty to verify the accuracy of legal citations and characterizations submitted to this Court rests with me as the attorney of record, regardless of what drafting tools I use, and I did not meet that duty here.” (Jacobs decl., ¶ 4.)

“Plaintiff respectfully requests leave to file a corrected Opposition brief that withdraws the inaccurate characterization of Government Code section 66300, subdivision (b)(1)(A), and that presents Plaintiff’s argument as to the Tenth Cause of Action, if any, based on the statute’s actual text.” (Jacobs decl., ¶ 8.)

Plaintiff did not apply to the court for permission to file a late opposition. Yet, on September 17, 2026, after the City had already filed its reply to the original opposition, plaintiff late-filed a “revised opposition” that did not merely correct the hallucinated AI quote, it materially changed the opposition in several other respects.

On September 22, 2026, the City filed an objection to plaintiff’s revised opposition, requesting the court to strike it and impose sanctions on plaintiff and its counsel. By way of the objection, the City’s arguments include that: (1) the proof of service for the August 27, 2026 declaration of plaintiff’s counsel was false in that it was not served on the City (Obj., p. 3, ll. 12-16), and (2) the proof of service for plaintiff’s revised opposition to the City’s demurrer, stating that it was served electronically on September 17, 2026, is false and that the revised opposition was not and has not been served on the City (Obj., p. 4, ll. 16-19).

With respect to the proofs of service attached to the revised opposition, by way of declaration filed concurrently with the objection, the City’s counsel declares:

“Plaintiff’s Revised Opposition to the City’s Demurrer was not served on me, as stated in the proof of service for that document. . . . The Declaration of Richard Jacobs filed in this action on August 27, 2026 was not served on me on August 27, 2026, as stated in the proof of service for that document.” (Hofer decl., ¶ 6.)

The court finds Hofer’s declaration credible. Plaintiff’s counsel has not responded to the allegations in any way.

The court will decline, at this time, to strike the revised opposition. However, the court has serious concerns regarding the veracity of counsel for Carpinteria Group regarding service, as well as his unverified use of AI. As Jacobs’ declaration demonstrates, he is fully aware of his duty to independently verify the results when utilizing AI. He appears to have failed to take that duty seriously until called out on it. He is admonished that the court will not tolerate any further documents being filed that are not personally reviewed and verified as containing only correct citations.

“By presenting to the court, whether by signing, filing, submitting, or later advocating, a pleading, petition, written notice of motion, or other similar paper, an attorney or unrepresented party is certifying that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, all of the following conditions are met:

(1) It is not being presented primarily for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.

(2) The claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law.

(3) The allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery.

(4) The denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief.” (Code Civ. Proc., § 128.7, subd. (b).)

“If, after notice and a reasonable opportunity to respond, the court determines that subdivision (b) has been violated, the court may, subject to the conditions stated below, impose an appropriate sanction upon the attorneys, law firms, or parties that have violated subdivision (b) or are responsible for the violation. In determining what sanctions, if any, should be ordered, the court shall consider whether a party seeking sanctions has exercised due diligence.

(1) A motion for sanctions under this section shall be made separately from other motions or requests and shall describe the specific conduct alleged to violate subdivision (b). Notice of motion shall be served as provided in Section 1010, but shall not be filed with or presented to the court unless, within 21 days after service of the motion, or any other period as the court may prescribe, the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or appropriately corrected. If warranted, the court may award to the party prevailing on the motion the reasonable expenses and attorney’s fees incurred in presenting or opposing the motion. Absent exceptional circumstances, a law firm shall be held jointly responsible for violations committed by its partners, associates, and employees.

(2) On its own motion, the court may enter an order describing the specific conduct that appears to violate subdivision (b) and directing an attorney, law firm, or party to show cause why it has not violated subdivision (b), unless, within 21 days of service of the order to show cause, the challenged paper, claim, defense, contention, allegation, or denial is withdrawn or appropriately corrected.” (Code Civ. Proc., § 128.7, subd. (c).)

It is the duty of an attorney: “To employ, for purposes of maintaining the causes confided in him or her those means only as are consistent with truth, and never to seek to mislead the judge or any judicial officer by an artifice or false statement of fact or law.” (Bus. & Prof. Code section 6068, subd. (d).)

“A lawyer shall not:

(1) knowingly make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer;

(2) fail to disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel, or knowingly* misquote to a tribunal* the language of a book, statute, decision or other authority; or

(3) offer evidence that the lawyer knows to be false. If a lawyer, the lawyer’s client, or a witness called by the lawyer, has offered material evidence, and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal, unless disclosure is prohibited by Business and Professions Code section 6068, subdivision (e) and rule 1.6. . . .” (Rules of Professional Conduct, § 3.3, subd. (a).)

The court finds that counsel for Carpinteria Group’s attorney, Richard Jacobs, likely violated Code of Civil Procedure section 128.7, subdivision (b), as well as the Business & Professions Code and the California Rules of Professional Conduct in the following respects:

The proof of service for the August 27, 2026 declaration of Richard Jacobs regarding his use of AI falsely represents that it was served on counsel for the City. (The court also notes that the proof of service is defective in that it does not reflect service on all parties that have appeared in the action as required.)
The proof of service for the unauthorized, and late-filed, revised opposition to the City’s demurrer falsely represents that it was served on counsel for the City.

The court considered issuing and order to show cause re why up to $1,500.00 in monetary sanctions should not be imposed on plaintiff’s counsel, for filing false proofs of service and thereafter failing to notify the court or take remedial measures to rectify the falsity. However, the court will decline to do so at this time.

Further, due to the unauthorized, late-filed, revised opposition, and failure to serve all parties that have appeared in this action, the court will order that the August 27, 2026 declaration regarding use of AI be served on all parties, will order that the revised opposition be served on all counsel, will order that new and accurate proofs of service of those documents be filed with the court, and will continue the hearing on the demurrer to allow the City the opportunity to file a reply to the opposition.

Because it would be inefficient to rule on the various demurrers to plaintiff’s complaint at separate hearings, the court will also continue the hearings on the demurrer of Frontier, and Frontier’s motion to strike portions of the complaint, to the date scheduled for hearing on Blu Croix’s demurrer to plaintiff’s complaint.

Cross-Defendants’ Demurrer to Frontier’s Cross-Complaint

Cross-defendants demur to each of the causes of action in the cross-complaint on the grounds that each of them fail to state facts sufficient to constitute a cause of action. Each of the causes of action are demurred to by all cross-defendants other than the sixth cause of action. As to the sixth cause of action, it is demurred to by SOCAL and Eilenberg only.

The demurrer is interspersed with arguments regarding interpretation of the agreement and other matters that concern the merits of the case. Those arguments are improper on demurrer and will not be addressed.

The first cause of action is for fraud-deceit against all cross-defendants.

Cross-defendants argue that the first cause of action is not pled with the requisite particularity.

“One who willfully deceives another with intent to induce him to alter his position to his injury or risk, is liable for any damage which he thereby suffers.” (Civ. Code, § 1709.)

“ ‘The necessary elements of fraud are: (1) misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity (scienter); (3) intent to defraud (i.e., to induce reliance); (4) justifiable reliance; and (5) resulting damage.’ ” [Citations.]” (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1239.)

“[F]raud must be pled specifically; general and conclusory allegations do not suffice. . . . This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

“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.)

Several of the allegations describing the alleged fraudulent activity of cross-defendants are set forth above. The additional relevant allegations supporting Frontier’s fraud claims are:

“Cross-Defendant SOCAL Holdings LLC’s corporate records identify SOCAL Holdings LLC as Carpinteria Group’s manager and identify SOCAL Holdings LLC as manager or general partner of numerous affiliated real-estate entities using the same Fullerton address or the same management structure.” (Cross-Compl., ¶ 3.)

“Cross-Defendant Benjamin A. Eilenberg . . . orchestrated the fraudulent scheme detailed herein.” (Cross-Compl., ¶ 4.)

“Each Cross-Defendant was the agent, principal, alter ego, joint venturer, co-conspirator, employee, representative, or managing actor of each other Cross-Defendant in connection with the conduct described herein.” (Cross-Compl., ¶ 6.)

Paragraphs Nos. 13 through 25 describe the alleged fraudulent scheme in detail, including the “how, when, where, to whom, and by what means” the fraud was carried out.

In further describing the fraud, Frontier alleges: “These projects are all spearheaded by Ben Eilenberg . . ..” (Cross-Compl., ¶ 31.)

“Cross-Defendants represented to Ms. Stewart that the December 6, 2024, SB 330 Preliminary Application she was asked to sign was for a four-unit project, and that representation was false when made because Cross-Defendants intended to, and did, submit an application for a 110-unit project in its place. (Cross-Compl., ¶ 46.)

“Cross-Defendants knew this representation was false or made it without reasonable grounds for believing it to be true, because Cross-Defendants prepared and submitted both the four-unit application shown to Ms. Stewart and the 110-unit application actually filed with the City of Carpinteria.” (Cross-Compl., ¶ 47.)

“Cross-Defendants intended that Ms. Stewart and Frontier rely on the four-unit representation so that Ms. Stewart would provide a signature that Carpinteria Group could then use, or purport to use, to support the filing of the substantially larger 110-unit project.” (Cross-Compl., ¶ 48.)

“Similarly, on May 30, 2025, Cross-Defendants furnished Ms. Stewart with only four pages of the City of Carpinteria Project Application, withholding the pages describing the project’s true scope as a 130-unit, 218-foot building containing 263,998 square feet of new construction, intending that Ms. Stewart sign the property owner consent without knowledge of what she was actually authorizing.” (Cross-Compl., ¶ 49.)

Frontier alleges justifiable reliance at paragraphs 50 and 51, as well as damages at paragraph 52.

The pleading of fraud is sufficient to withstand demurrer. If there exists any minor uncertainty, those uncertainties can be clarified during the discovery process.

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

The second cause of action is for fraudulent inducement and promissory fraud against all cross-defendants.

“ ‘ “Promissory fraud” ’ is a subspecies of the action for fraud and deceit. A promise to do something necessarily implies the intention to perform; hence, where a promise is made without such intention, there is an implied misrepresentation of fact that may be actionable fraud.’ ” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) The elements of promissory fraud (i.e., of fraud or deceit based on a promise made without any intention of performing it) are: (1) a promise made regarding a material fact without any intention of performing it; (2) the existence of the intent not to perform at the time the promise was made; (3) intent to deceive or induce the promisee to enter into a transaction; (4) reasonable reliance by the promisee; (5) nonperformance by the party making the promise; and (6) resulting damage to the promise. [Citation.]” (Behnke v. State Farm General Ins. Co. (2011) 196 Cal.App.4th 1443, 1453.)

Cross-defendants argue that the second cause of action identifies no actionable promise or contemporaneous intent.

Reading the cross-complaint as a whole, it is clear that Frontier alleges, and identifies, the required promises.

In addition to the allegations discussed above, which Frontier incorporated by reference, Frontier alleges:

“During negotiations for the PSA and at execution of the PSA, Cross-Defendants represented, expressly and by conduct, that Carpinteria Group was a bona fide purchaser that genuinely intended to acquire the property and pursue the represented low-income multifamily housing development.” (Cross-Compl., ¶ 55.)

“The representations were made in connection with the PSA, which Eilenberg signed as Carpinteria Group’s COO.” (Cross-Compl., ¶ 56.)

“Cross-Defendants represented that its intended use was a low-income multifamily residential housing project under California’s Builder’s Remedy.” (Cross-Compl., ¶ 57.)

These representations constitute promises that Frontier alleges were false and that it justifiably relied on in entering into the agreement with cross-defendants, and that it suffered damages as a result. This is just one example, as there are other “promises” sufficiently alleged to support the cause of action.

Frontier adequately alleges the intent to deceive in paragraphs Nos. 57-63, among others.

“Such things as knowledge, intent, and scienter may be pleaded generally . . ..” (Gervase v. Superior Court (1995) 31 Cal.App.4th 1218, 1244.)

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

The third cause of action is for fraudulent concealment against all cross-defendants.

Cross-defendants argue that the third cause of action does not plead a defendant-specific duty, concealment, or causation.

“The required elements for fraudulent concealment are (1) concealment or suppression of a material fact; (2) by a defendant with a duty to disclose the fact; (3) the defendant intended to defraud the plaintiff by intentionally concealing or suppressing the fact; (4) the plaintiff was unaware of the fact and would have acted differently if the concealed or suppressed fact was known; and (5) plaintiff sustained damage as a result of the concealment or suppression of the material fact. [Citations.] A duty to disclose a material fact can arise if (1) it is imposed by statute; (2) the defendant is acting as plaintiff’s fiduciary or is in some other confidential relationship with plaintiff that imposes a disclosure duty under the circumstances; (3) the material facts are known or accessible only to defendant, and defendant knows those facts are not known or reasonably discoverable by plaintiff (i.e., exclusive knowledge); (4) the defendant makes representations but fails to disclose other facts that materially qualify the facts disclosed or render the disclosure misleading (i.e., partial concealment); or (5) defendant actively conceals discovery of material fact from plaintiff (i.e., active concealment). [Citations.] Circumstances (3), (4), and (5) presuppose a preexisting relationship between the parties, such as “ ‘between seller and buyer, employer and prospective employee, doctor and patient, or parties entering into any kind of contractual agreement. [Citation.] All of these relationships are created by transactions between parties from which a duty to disclose facts material to the transaction arises under certain circumstances.’ ” [Citation.] “ ‘Such a transaction must necessarily arise from direct dealings between the plaintiff and the defendant; it cannot arise between the defendant and the public at large.’ ” [Citation.]” (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 40-41, italics added.)

The allegations of the cross-complaint, as herein set forth above, clearly set forth all the elements of fraudulent concealment, including a specific duty of each of the cross-defendants as alter egos of each other.

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

The fourth cause of action is for breach of the implied covenant of good faith and fair dealing against all defendants.

Cross-defendants argue that the fourth cause of action cannot override the agreement or reach nonparties. In making this argument, cross-defendants misconstrue the allegations regarding the terms of the contractual relationship and ignore paragraph 6 of the cross-complaint, which alleges: “Each Cross-Defendant was the agent, principal, alter ego, joint venturer, coconspirator, employee, representative, or managing actor of each other Cross-Defendant in connection with the conduct described herein.” (Italics added.)

The alter ego allegations are sufficient, for pleading purposes, to state a cause of action against SOCAL and Eilenberg, for breach of the implied covenant of good faith and fair dealing, even though it was Carpinteria Group that executed the agreement. (see Cam-Carson, LLC v. Carson Reclamation Authority (2022) 82 Cal.App.5th 535, 558-559.)

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

The fifth cause of action is for violation of Business & Professions Code section 17200, et seq. Cross-defendants again focus on the incorrect allegations of the complaint and misconstrue the underlying actions that form the basis of the cause of action.

“The UCL outlaws as unfair competition “ ‘any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.’ ” (Bus. & Prof. Code, § 17200.) “ ‘The scope of the UCL is quite broad. [Citations.] Because the statute is framed in the disjunctive, a business practice need only meet one of the three criteria to be considered unfair competition. [Citation.]’ ” [Citation.]” (Morgan v. AT&T Wireless Services, Inc. (2009) 177 Cal.App.4th 1235, 1253.)

“A claim based upon the fraudulent business practice prong of the UCL is “ ‘distinct from common law fraud. ‘ “A [common law] fraudulent deception must be actually false, known to be false by the perpetrator and reasonably relied upon by a victim who incurs damages. None of these elements are required to state a claim for . . . relief” ’ under the UCL. [Citations.] This distinction reflects the UCL’s focus on the defendant’s conduct, rather than the plaintiff’s damages, in service of the statute’s larger purpose of protecting the general public against unscrupulous business practices.’ ” [Citation.]” (Morgan v. AT&T Wireless Services, Inc., supra, 177 Cal.App.4th at p. 1255.)

Frontier has alleged all of the elements to support a UCL claim. Paragraphs 29 through 44, and 105 through 111 thoroughly detail a pattern of unfair business practices by cross-defendants whereby cross-defendants engage in a pattern of creating business entities that they represent are developers, when they have no intention of developing, Rather, as alleged, the cross-defendants propose housing projects that they know will be rejected so that they can extort money from local governments. Further, and as set forth herein above, Frontier has adequately pled damages as the result of cross-defendants’ alleged conduct.

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

The sixth cause of action is for declaratory relief.

Any person interested under a written instrument, excluding a will or a trust, or under a contract, or who desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property, or with respect to the location of the natural channel of a watercourse, may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his or her rights and duties in the premises, including a determination of any question of construction or validity arising under the instrument or contract. He or she may ask for a declaration of rights or duties, either alone or with other relief; and the court may make a binding declaration of these rights or duties, whether or not further relief is or could be claimed at the time. The declaration may be either affirmative or negative in form and effect, and the declaration shall have the force of a final judgment. The declaration may be had before there has been any breach of the obligation in respect to which said declaration is sought.” (Code Civ. Proc., § 1060.)

“To allege facts sufficient to state a cause of action for declaratory relief, the plaintiff must allege “ ‘two essential elements: ‘ “(1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the rights or obligations of a party.” ’ ” [Citation.]” (Childhelp, Inc. v. City of Los Angeles (2023) 91 Cal.App.5th 224, 235.)

As noted above, only SOCAL and Eilenberg demur to the cause of action, arguing that: “No allegation states that SOCAL Holdings or Eilenberg claims a PSA right, title, lien, equitable interest, or performance from Frontier.” (Demurrer, p. 10, ll. 2-4.) This argument again ignores the alter ego allegations. Further, the cause of action itself alleges:

“Frontier contends that Cross-Defendants fraudulently induced Frontier into the PSA, concealed material facts, breached the implied covenant, and is not entitled to specific performance or damages.” (Cross-Compl., ¶ 121.)

There currently exists an actual controversy between the parties for which declaratory relief may be available.

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

Pro Hac Vice Application

Gregory J. DeBoff applies to appear pro hac vice for Frontier.

“A person desiring to appear as counsel pro hac vice in a superior court must file with the court a verified application together with proof of service by mail in accordance with Code of Civil Procedure section 1013a of a copy of the application and of the notice of hearing of the application on all parties who have appeared in the cause and on the State Bar at its San Francisco office. The notice of hearing must be given at the time prescribed in Code of Civil Procedure section 1005 unless the court has prescribed a shorter period.” (Cal. Rules of Court, rule 9.40(c)(1).)

“The application must state:

(1) The applicant’s residence and office address;

(2) The courts to which the applicant has been admitted to practice and the dates of admission;

(3) That the applicant is a licensee in good standing in those courts;

(4) That the applicant is not currently suspended or disbarred in any court;

(5) The title of each court and cause in which the applicant has filed an application to appear as counsel pro hac vice in this state in the preceding two years, the date of each application, and whether or not it was granted; and

(6) The name, address, and telephone number of the active licensee of the State Bar who is attorney of record. (Cal. Rules of Court, rule 9.40(d).)

“The State Bar may set an appropriate application fee to be paid by counsel pro hac vice.” (Cal. Rules of Court, rule 9.40(e).)

“A person permitted to appear as counsel pro hac vice under this rule is subject to the jurisdiction of the courts of this state with respect to the law of this state governing the conduct of attorneys to the same extent as a licensee of the State Bar. The counsel pro hac vice must familiarize himself or herself and comply with the standards of professional conduct required of licensees of the State Bar and will be subject to the disciplinary jurisdiction of the State Bar with respect to any of his or her acts occurring in the course of such appearance. Article 5 of chapter 4, division 3 of the Business and Professions Code and the Rules of Procedure of the State Bar govern in any investigation or proceeding conducted by the State Bar under this rule.” (Cal. Rules of Court, rule 9.40(f).)

DuBoff’s application, and declarations in support, fully comply with the California Rules of Court. The court, finding the application complete and DuBoff’s qualifications sufficient, will grant the application.

Judicial Branch of California

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