Abinante vs. Collins

Collins further argues that this cause of action fails because directors and officers are entitled to rely upon information and opinions from counsel. However, the SAC alleges that Collins knew that converting Covid Clinic to a non-profit would eliminate Abinante’s equity and limit his ability to reap financial benefits from the company and did not disclose this material fact to Abinante. The claim is not based upon reliance on a legal opinion from counsel but on the failure to disclose material information.

Collins contends that this claim is barred by the sham pleading doctrine because the FAC alleged that it was an attorney, Michael Penley, who made representations that the conversion would not change Covid Clinic’s operations at all and it could be converted back at any time. These allegations do not conflict with the allegation that Collins did not disclose that the conversion would impact Abinante’s equity and other financial benefits. Thus, the sham pleading doctrine does not apply.

Based on all the above, the Demurrer to the first cause of action is OVERRULED.

Third Cause of Action for Fraud

Defendants argue this cause of action fails because the SAC admits that Abinante agreed that Validus would be solely owned by Smarttecc and only vaguely refers to some “overall agreement,” the terms of which are not alleged. They further argue the claim is based upon irrelevant communications with Kayla Collins, a nonparty, and there are no specific misrepresentations that could support a fraud cause of action. Lastly, they allege the economic loss rule bars the claim.

Defendants’ arguments lack merit. The third cause of action alleges in detail the misrepresentations made by Collins upon which it relies regarding the share of Validus’ profits with Abinante. Plaintiffs allege that Collins represented on numerous dates that Abinante would receive his share of profits. While the SAC references statements made by Kayla Collins, the cause of action plainly does not rest upon those statements, which are merely included for context. Further, tort damages are not barred in contract cases where the contract was fraudulently induced. (Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 839; see also id. at p. 843 [“Fraudulent inducement claims fall within an exception to the economic loss rule recognized by our Supreme Court . . . .”].) Based on the above, the Demurrer to the third cause of action is OVERRULED.

Defendant MVML’s Demurrer

MVML argues that the sole basis for liability against it is successor liability and alter ego and those theories remain inadequately pled in the SAC. Because not one fact about MVML is alleged in the SAC, MVML argues the claims fail.

Plaintiffs’ claims against MVML are based upon allegations of successor liability and alter ego. On December 4, 2025, the Court held that the allegations of successor and alter ego liability were insufficiently pleaded. The SAC adds no significant new allegations in support of these theories of liability against MVML and the theories remain inadequate. “To recover on an alter ego theory, a plaintiff need not use the words “alter ego,” but must allege sufficient facts to show a unity of interest and ownership, and an unjust result if the corporation is treated as the sole actor.” (Leek v.

Cooper (2011) 194 Cal.App.4th 399, 415.) Here, Plaintiffs allege no such facts. They also do not allege any facts showing that the general rule of successor nonliability does not apply. (Daniell v. Riverside Partners I, L.P. (2012) 206 Cal.App.4th 1292, 1300.) Further, Plaintiffs do not argue that they can presently allege any additional facts that could support successor or alter ego liability against MVML. Thus, MVML’s Demurrer is SUSTAINED without leave to amend. (Jones v. Aetna Casualty & Surety Co. (1994) 26 Cal.App.4th 1717, 1722.)

Motion to Strike

Defendants move to strike the first cause of action for breach of fiduciary duty on the ground that it goes beyond the scope of leave to amend granted upon the Court’s sustaining of their prior Demurrer. When a demurrer is sustained with leave to amend, a new cause of action may be added if it is within the scope of the order granting leave to amend. (Harris v. Wachovia Mortgage, FSB (2010) 185 Cal.App.4th 1018, 1023 [following an order sustaining a demurrer, “[t]he plaintiff may not amend the complaint to add a new cause of action without having obtained permission to do so, unless the new cause of action is within the scope of the order granting leave to amend.”].) Further, the addition of a new cause of action is proper when it “directly responds to the court’s reason for sustaining the earlier demurrer.” (Patrick v. Alacer Corp. (2008) 167 Cal.App.4th 995, 1015.)

Here, the first cause of action arises out of the same general set of facts and transactions as those set forth in the FAC and, notably, the FAC asserted a cause of action for breach of fiduciary duty against all Defendants, including Collins. The Court finds the first cause of action to be within the scope of its order granting leave to amend. Thus, the Motion to Strike the first cause of action is DENIED.

Defendants move to strike the successor liability allegations on the ground that they are factually insufficient. In light of the Court’s sustaining of MVML’s Demurrer, the Court DENIES the Motion to Strike as to these allegations as MOOT.

Defendants move to strike the alter ego allegations on the ground that they are mere legal conclusions with no factual support. The Court agrees with Plaintiffs that the correct procedural vehicle to attack these allegations as insufficient is a demurrer. Thus, the Motion to Strike the alter ego allegations is DENIED.

Because the fraud-based causes of action are sufficiently pled, Defendants’ Motion to Strike the claim for punitive damages is DENIED.

Defendants move to strike the claims for statutory damages and civil remedies under Civil Code section 3344 and Penal Code section 530.5, arguing that these damages are not available to Plaintiffs. Defendants further argue that Plaintiffs have no right to damages under section 3344 because the statute applies only to commercial use and no commercial use is alleged in the SAC.

Civil Code section 3344(a)(1) provides, in relevant part: “Any person who knowingly uses another’s name, voice, signature, photograph, or likeness, in any manner, on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods, or services, without that person’s prior consent, or, in the case of a minor, the prior consent of their parent or legal guardian, shall be liable for any damages sustained by the person or persons injured as a result thereof.”

While the statute does not necessarily require a separate cause of action for violation of the same, Defendants are correct that the SAC does not allege that Abinante’s name, voice, signature, photograph, or likeness was used on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods, or services without his consent. Therefore, the Motion to Strike the claim for statutory damages under Civil Code section 3344 is GRANTED with 15 days leave to amend. The scope of leave to amend shall extend only to the claim for damages under section 3344.

Plaintiffs allege that Defendants violated Penal Code section 530.5 and that they are entitled to all civil remedies available for the violation. While Plaintiffs are not entitled to assert a cause of action for violation of this Penal Code, Defendants cite no authority showing that they cannot claim entitlement to any available civil remedies for such a violation. Thus, the Motion to Strike the claim for civil remedies for violation of Penal Code section 530.5 is DENIED.

Defendants’ Motion to Strike the request for injunctive relief is DENIED, as injunctive relief is a proper remedy under the UCL. (Bus. & Prof. Code, § 17203.)

Defendants’ Motion to Strike the prayer for rescission or reformation is DENIED. While Plaintiffs seek damages under their theories of liability, they may also plead in the alternative to seek rescission or reformation.

Lastly, Defendants move to strike paragraphs 86 and 91, which contain statements made by third parties. Defendants argue these statements cannot support Plaintiffs’ fraud claims because there are no allegations explaining why anything the third parties said should be attributed to any Defendant. As discussed above, the statements are not intended to provide the basis of the fraud claim. Instead, they are intended to provide context to the relationship between the parties. Thus, the Court finds that they are not improper and the Motion to Strike paragraphs 86 and 91 is DENIED.

The Court denies Defendants’ requests for judicial notice on the ground that the material is not relevant to the determination of the issues. (State Compensation Ins. Fund v. ReadyLink Healthcare, Inc. (2020) 50 Cal.App.5th 422, 442-443.) Moving party to give notice.

104 Smart Solutions, Inc. vs. Magic Brush Car Wash, LP

24-01423896 Motion to Be Relieved as Counsel of Record

Bryan Theis/Theis Law Group, PC (“Moving Attorney”) moves to be relieved as Counsel of Record for Defendant/Cross-Complainant Magic Brush Car Wash, LP. The Motion is CONTINUED to July 14, 2026, at 10:00 a.m. in Department C25.

The notice of motion and motion, the declaration, and the proposed order must be served on the client and on all other parties who have appeared in the case. (California Rules of Court, rule 3.1362(d).) The proof of service indicates that two individuals were served with the moving papers: (1) Hagop “Jack” Kofdarali at 139 Radio Road, Corona, CA 92879, and (2) Scott G. Nathan (via email), Law Offices of Scott G. Nathan, APC, 12241 Newport Avenue, Suite 100, North Tustin, CA 92705. (ROA 56.)

It is not clear from the proof of service that the client, Defendant/Cross-Complainant Magic Brush Car Wash, LP, was served with the notice of motion and motion, the declaration, and the proposed order. The proof of