Cornelius Case Houweling et al vs Nathan R Homan et al

As alleged in the complaint: Glass Investments, of which Houweling is the founder and owner, is in the business of building greenhouse growing facilities. (Compl., P.P. 13, 14.) EnPower is in the business of designing, constructing, and installing power generation and storage solutions. (Compl., P. 15.) In January 2022, EnPower began discussions with the Homan Defendants regarding how EnPower could address the aging solar system on Houweling's indoor greenhouse facility located in Camarillo while simultaneously benefitting from the Investment Tax Credits under the Inflation Reduction Act (the "Project"). (Compl., P. 16.)

The Project was sizable and complex in both technical and financial aspects. (Ibid.) EnPower reached out to Homan to work on the Project with the hope that it would be the start of a beneficial partnership between EnPower and Homan to work on future projects together. (Ibid.) Due to the complexities of the tax credit aspect of the Project, EnPower sought the expertise of the Homan Defendants. (Compl., P. 17.) Homan held himself out as and represented to plaintiffs that he is an expert in structuring Power Purchase Agreements (PPAs) for solar and battery energy storage systems and, in particular, an expert regarding Investment Tax Credits. (Ibid.)

Homan then recommended and encouraged EnPower to also consult with Homan's partner or associate Florin and Florin's company Lucerne Pacific regarding the project. (Compl., P. 18.) On September 21, 2022, EnPower met with Homan and Florin and Homan represented to EnPower that Homan was one of the best in structuring PPAs. (Compl., P. 19.) Homan further represented that Florin was the only builder he trusted to build solar projects under PPAs, in order to induce EnPower to engage the services of the Homan Defendants, Florin, and Lucerne Pacific for the Project and other future projects. (Ibid.)

Homan represented to EnPower that Homan had extensive experience financing large solar and Battery Energy Storage Systems projects and positioned himself as a crucial financial partner. (Compl., P. 20.) Homan claimed that his

twelve-year partnership with Florin had successfully delivered multiple large-scale projects, and that he had direct access to capital for financing solar projects, which would be beneficial to EnPower, and Homan assured EnPower that he and his team could handle all aspects of project financing, structuring, and execution seamlessly. (Ibid.) During that meeting, Florin reinforced Homan's claims by falsely emphasizing the long history of successful collaboration between himself and Homan and emphasizing Florin's exaggerated expertise in building solar and storage projects. (Compl., P. 21.)

Based on the Homan Defendant's false representations, EnPower agreed to partner with Defendants on the Project and introduced Defendants to Houweling. (Compl., P. 27.) The understanding was that Homan and EnPower would jointly pursue solar and storage projects, with Homan handling financial structuring and EnPower handling client relations, procurement, and execution. (Compl., P. 28.) Homan initially represented that profits from the projects would be shared equally between Homan and EnPower, but Homan later concealed the true financial structure of deals and attempted to cut EnPower out of additional revenue streams. (Compl., P. 31.)

While consulting on the Project, the Homan Defendants took and misused EnPower's proprietary information and trade secrets, and Homan then utilized EnPower's trade secrets on Homan's clients outside the scope of the Project without the consent or knowledge of EnPower. (Compl., P. 33.) On July 28, 2025, Defendants answered the complaint with a general denial and 15 affirmative defenses. On the same date, CI Labs and Homan filed a cross-complaint. On January 14, 2026, CI Labs and Homan filed their operative first amended cross-complaint (FACC) against the Houweling Cross-Defendants, Steven Hopwood (Hopwood), Glass House Brands, Inc. (Glass House), and Graham Farrar (Farrar) for: (1) Fraud - Against the Glass House and Farrar Cross-Defendants; (2) Negligent Misrepresentation - Against the Glass House and Farrar Cross-Defendants; (3) Brach of Oral Contract - Against the Glass Investments and Houweling Cross-Defendants; (4) Common Counts - Against the Glass Investments and Houweling Cross-Defendants; (5) Fraud - Against the Glass Investments and Houweling Cross-Defendants; (6) Negligent Misrepresentation - Against the Glass Investments and Houweling Cross-Defendants; (7) Intentional Interference with Contract - Against the EnPower and Hopwood Cross-Defendants; (8) Negligent Interference with Contract - Against the EnPower and Hopwood Cross-Defendants; (9) Intentional Interference with Prospective Economic Advantage - Against the EnPower and Hopwood Cross-Defendants; (10) Negligent Interference with Prospective Economic Advantage - Against the EnPower and Hopwood Cross-Defendants; and (11) Slander - Against the EnPower and Hopwood Cross-Defendants.

As alleged in the FACC: In September 2022, Homan was introduced to Houweling, by Hopwood, regarding a commercial solar project. (FACC, P. 13.) Hopwood had previously done some residential solar projects but had never done a major commercial solar project. (Ibid.) Homan's company specializes in major commercial solar projects. (Ibid.) Houweling told Homan that he had recently sold his tomato farm to Glass House, which was going to convert it to a cannabis farm and, that as a result of the sale, Houweling was going to have a tax gain of $6,000,000 and was interested in getting a tax credit to offset the gain by installing a solar energy system at the facility. (FACC, P. 14.)

The deadline to get the tax credit was December 31, 2024. (Ibid.) Homan introduced Houweling to Homan's consultants at KPMG to discuss using solar credits to offset his tax gain. (Ibid.) In November 2022, Houweling told Homan that he wanted to go forward with a solar project to get the tax benefits and that he could do it at the Glass House facility. (FACC, P. 15.) Houweling stated that, as a result of the sale, he was now the largest shareholder in Glass House and had the authority to approve the project (the "Glass House Project"). (Ibid.)

Homan then began the work necessary to put the Glass House Project together. (FACC, P. 16.) Homan's company would design the system with the assistance of experts and in consultation with the client, would procure the necessary equipment, would construct and install the necessary equipment, and would own the system. (Ibid.) Houweling would be a tax equity partner, who would contribute funds for the system and receive tax credits for it. (Ibid.) This arrangement was agreed to by Houweling. (Ibid.)

Homan and Hopwood would each receive a development fee for their work on the Glass House Project. (Ibid.) As part of the Glass House

Project, the client, Glass House, would buy solar power from a limited liability company that would be set up to facilitate the transaction pursuant to a Power Purchase Agreement, at a substantial savings from what it would otherwise be paying for electrical power from SCE. (FACC, P. 17.) Glass House would realize the savings over time and could elect to get a portion of the savings in a lump sum payment at the outset. (Ibid.) Over the next several months, Homan performed the necessary work to begin the development process. (FACC, P. 18.)

In Spring 2023, Homan was told for the first time that the decisionmaker for the Glass House Project was not Houweling, but rather Farrar, the President of Glass House. (FACC, P. 19.) During the following few months, Houweling said that he wanted to use someone else to do the solar project and showed Homan an alternative proposal he had received. (FACC, P. 20.) Homan explained to Houweling why the alternative proposal would not work for Houweling. (Ibid.) By Fall 2023, Houweling told Homan that he wanted to use Homan and that Homan needed to coordinate the Glass House Project with Farrar. (FACC, P. 21.)

As a result, from that point on, Homan was in constant contact with Farrar, his Director of Engineering, Philip Van Spronsen, his Water and Energy Department Manager, Aaron Hodgson, and others at Glass House regarding the design of the Glass House Project. (Ibid.) Homan presented Farrar with his standard Power Purchase Agreement and told him about the option of receiving some of the long-term energy savings up front instead of over time. (FACC, P. 22.) Farrar stated that he wanted to receive the up front payment. (Ibid.)

Over the next few months, the Glass House Project had to face certain deadlines that had to be met by the end of 2023, and Homan would be required to spend considerable money to do so. (FACC, P. 23.) Because Homan did not have a signed Power Purchase Agreement, Homan told Farrar that he would not spend the money unless Farrar would commit that the Glass House Project was definitely going to be completed. (Ibid.) Farrar confirmed that it was so Homan made the payments that needed to be paid before the end of the year. (Ibid.)

By April 2024, the Glass House Project had plans, as far as Farrar and the Glass House team were concerned, and it was time to submit the plans to the County of Ventura for approval. (FACC, P. 24.) Homan did not yet have a signed Power Purchase Agreement from Glass House, which Homan and Farrar had been negotiating for a few months, and Homan was told by Farrar that the agreement was under review by Glass House's attorneys. (Ibid.) Homan incurred additional costs based on representations from Farrar that the Glass House Project was definitely going to be completed. (FACC, P. 25.)

In July 2024, Homan was contacted by the CEO of Glass House, Kyle Kazan, who had had no involvement in the Glass House Project, and whom Farrar had never told Homan needed to approve the Glass House Project. (FACC, P. 26.) Kazan told Homan that he would only approve the Glass House Project if Homan told him how much money Homan was making from the Glass House Project, who Homan's investors were in the Glass House Project and guarantee him that Houweling was not involved and would not personally benefit from it, and asked Homan if he could participate in the money to be made on the Glass House Project. (Ibid.)

Homan gave Kazan a copy of the pro forma for the Glass House Project showing the economics of the Glass House Project, including Homan's fee. (Ibid.) Homan refused to tell Kazan the identity of his investors, because it was confidential, and told Kazan that Kazan could not be a personal investor. (Ibid.) Because Homan would not give Kazan the names of his investors and let him participate in the transaction, Kazan refused to communicate further with Homan and would not permit the Glass House Project to go forward. (Ibid.)

With the Glass House Project being halted in July 2024, and with Houweling's December 31, 2024 deadline approaching, Houweling told Homan that he had found an agricultural property he could buy in Arizona, which he could use to start growing vegetables, but would then quickly start growing cannabis to compete with Glass House, and for which he could install a solar system. (FACC, P. 27.) Houweling asked Homan if they could do a similar project to the Glass House Project (the "Arizona Project"). (Ibid.)

Homan told Houweling that the Arizona Project would be possible but very challenging given everything that would have to be completed by December 31st. (FACC, P. 28.) Homan told Houweling that he would do the same deal structure as they had used for the Glass House Project, except that Homan would not be willing to work with Hopwood on the Arizona Project. (Ibid.) Houweling told Homan that the same deal structure that the same deal structure was acceptable and that he agreed to the condition of not involving Hopwood. (FACC, P. 29.)

With that assurance, CI Labs and Homan agreed with Houweling to proceed on the same basis as they had

with the Glass House Project. (Ibid.) In August, Homan went to Arizona with his principal designer to work on the Arizona Project and Houweling told Homan that Homan and CI Labs should do whatever they needed to do to complete the Arizona Project by year end and that Houweling would financially support the Arizona Project because it was definitely going to be completed. (FACC, P. 30.) CI Labs and Homan offered to set up a construction loan for the Arizona Project, but Houweling did not want to pay for the cost of the loan. (Ibid.)

Houweling informed Homan that he would sell some of his Glass House stock to finance the Arizona Project. (Ibid.) CI Labs and Homan had to ask favors from their network of consultants to move as quickly as was needed to complete the Arizona Project by year end. (Ibid.) For the construction and installation of the Arizona Project, in September 2024, CI Labs and Homan entered into a contract with Obodo Energy Partners, to perform the construction work, and with Silicon Valley Breaker & Control, to provide the switchgear, as well as others necessary for the Arizona Project. (FACC, P. 31.)

CI Labs and Homan spent a great deal of time and money to make the Arizona Project happen before the end of the year, pursuant to their oral agreement with Houweling. (Ibid.) In late September or early October 2024, Houweling told Homan that he had just learned that Arizona had much stricter requirements than California for verifying the immigration status of employees, so he planned to relocate his former employees, who worked for Glass House, to do the work in Arizona, but that 97 percent of them were illegal workers and that if he could not move them and had to pay higher wages, the Arizona Project might not be as profitable. (FACC, P. 32.)

Since Houweling still needed the tax benefits from the Arizona Project, he said that the Arizona Project was definitely going to be completed. (Ibid.) In October 2024, Houweling told CI Labs and Homan that he wanted them off the Arizona Project, which was ahead of schedule and most of the major work had been completed. (FACC, P. 33.) Houweling had been back in touch with Hopwood, who had told Houweling that Houweling's financial concerns were caused because CI Labs and Homan were overcharging him for the Arizona Project and otherwise not handling it properly. (Ibid.)

Hopwood, on behalf of Homan, also contacted several of CI Labs and Homan's business contacts and told them that CI Labs and Homan were incompetent, had overcharged and had stolen substantial sums of money from Houweling, could not be trusted, and other false statements. (Ibid.) Hopwood further told Obodo Energy Partners and Silicon Valley Breaker & Control that they needed to perform their services directly for Hopwood and Houweling and not honor their contracts with CI Labs and Homan. (Ibid.) As a result, both Obodo Energy Partners and Silicon Valley Breaker & Control ceased working with CI Labs and Homan. (Ibid.)

Hopwood also contacted Homan and threatened to cause him great bodily injury or death, as well as threatening to pose as a woman and text Homan's fiancée claiming Homan was having an affair. (Ibid.) Houweling and Hopwood then completed the Arizona Project without CI Labs or Homan, using all of the work that CI Labs and Homan had done on the project, and Houweling and Hopwood realized the financial benefits of the Arizona Project, including getting Houweling the tax benefit he needed. (FACC, P. 34.)

CI Labs and Homan did not receive the compensation they were to receive from the Arizona Project and were not compensated for any of the time, work, and expenses they spent on the project. (Ibid.) Additional allegations of the FACC will be addressed below where appropriate. Glass House and Farrar now demur to the first cause of action for fraud and the second cause of action for negligent misrepresentation of the FACC. Houweling and Glass Investments now demur to the third, fourth, fifth, and sixth causes of action of the FACC.

EnPower and Hopwood now demur to the seventh, eighth, ninth, tenth, and eleventh causes of action of the FACC. The demurrers are opposed. Glass House and Farrar move to strike the exemplary damages request at paragraph 42 of the FACC and on page 30 in the prayer for damages. Houweling and Glass Investments move to strike paragraph 64 and the prayer for exemplary damages on page 31 of the FACC. EnPower and Hopwood move to strike paragraphs 76, 85, 96, and the prayers for exemplary damages in the

FACC. The motions to strike are opposed. Analysis: Demurrers "When any ground for objection to a complaint, cross-complaint, or answer appears on the face thereof, or from any matter of which the court is required to or may take judicial notice, the objection on that ground may be taken by a demurrer to the pleading." (Code Civ. Proc., Sec. 430.30, subd. (a).) "The party against whom a complaint or cross-complaint has been filed may object, by demurrer or answer as provided in Section 430.30, to the pleading on any one or more of the following grounds: "(a) The court has no jurisdiction of the subject of the cause of action alleged in the pleading. "(b) The person who filed the pleading does not have the legal capacity to sue. "(c) There is another action pending between the same parties on the same cause of action. "(d) There is a defect or misjoinder of parties. "(e) The pleading does not state facts sufficient to constitute a cause of action. "(f) The pleading is uncertain.

As used in this subdivision, "uncertain" includes ambiguous and unintelligible. "(g) In an action founded upon a contract, it cannot be ascertained from the pleading whether the contract is written, is oral, or is implied by conduct. "(h) No certificate was filed as required by Section 411.35." (Code Civ. Proc., Sec. 430.10.) "[A] court must treat a demurrer as admitting all material facts properly pleaded, it does not, however, assume the truth of contentions, deductions or conclusions of law." (Travelers Indem.

Co. of Connecticut v. Navigators Specialty Ins. Co. (2021) 70 Cal.App.5th 341, 358, citing Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.) "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.) First Cause of Action for Fraud Glass House and Farrar argue that Cross-Complainants fail to plead facts sufficient to satisfy the elements of knowledge, intent to defraud, or justifiable reliance, and fail to allege specifically when the alleged fraudulent representations were tendered.

The allegations contained in the first cause of action sound in promissory fraud. " 'An action for promissory fraud may lie where a defendant fraudulently induces the plaintiff to enter into a contract.' " [Citation.] The action is one of deceit, which requires proof that the defendant made a misrepresentation of fact or a promise without any intention of performing it. (Civ. Code, Sec. 1710.) A complaint for fraud must allege the following elements: (1) a knowingly false representation by the defendant; (2) an intent to deceive or induce reliance; (3) justifiable reliance by the plaintiff; and (4) resulting damages. [Citation.]

Every element must be specifically pleaded." (Service by Medallion, Inc. v. Clorox Co. (1996) 44 Cal.App.4th 1807, 1816.) "[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.) Glass House and Farrar first argue that the FACC "fails to plead any factual basis that Glass House 'knew' that the alleged statement 'the GLASS HOUSE PROJECT was definitely going to be completed' was false."

(Demurrer, p. 3, l. 26 - p. 4, l. 2.) Glass House and Farrar secondly argue that the FACC also fails to allege sufficient facts of knowledge and intent by Farrar. In support of their argument, Glass House and Farrar cite K-Swiss International Ltd. v. Carter International, S.A. 2025 WL 3280287, Thompson v. People Coordinated Services of Southern California, Inc. 2018 WL 6444381, and Medina v. Bank of the West 205 WL 1412029. All of the cases are unpublished opinions. With two exceptions that are not applicable here, "an opinion of a California Court of Appeal or superior court appellate division that is not certified for publication or ordered published must not be cited or relied on by a court or a party in any other action." (Cal.

Rules of Court, rule 8.1115(a).) "We realize that depublished and unpublished decisions are now as readily available as published cases, thanks to the Internet and technologically savvy legal research programs. That does not give counsel an excuse to ignore the rules of court. Indeed, persistent use of unpublished authority may be cause for sanctions." (People v. Williams (2009) 176 Cal.App.4th 1521, 1529.) Counsel for Glass House and Farrar should heed this advice or risk being sanctioned. The court will not rely on the unpublished opinions.

Published opinions make clear: " ' "As in any action sounding in fraud, the allegations of a . . . complaint must be pleaded with particularity." ' " [Citation.] " 'Allegations of the defendant's knowledge and intent to deceive may use conclusive language, however.' " [Citation.]" (JPMorgan Chase Bank, N.A. v. Superior Court (2022) 85 Cal.App.5th 477, 494.) In addition to the allegations set forth above, Cross-Complainants allege: "Within the last three years, the GLASS HOUSE Cross-Defendants and the FARRAR Cross-Defendants each made representations, either explicitly or implicitly, of material facts to CI LABS/HOMAN in connection with the GLASS HOUSE PROJECT, as set forth above; said representations included, but were not limited to, the representation that CI LABS/HOMAN should provide work, labor, services, and materials and expend the funds necessary to develop the GLASS HOUSE PROJECT, because the GLASS HOUSE PROJECT was definitely going to be completed." (FACC, P. 36.) "Those representations were in fact false; with respect to the specific representation set forth in Paragraph 36, the truth was that said Cross-Defendants did not intend to permit the GLASS HOUSE PROJECT to be completed." (FACC, P. 37.) "When said Cross-Defendants made those representations to CI LABS/HOMAN, said Cross-Defendants knew those representations were false." (FACC, P. 38.) "Said Cross-Defendants made those representations with the intent to defraud and induce CI LABS/HOMAN to provide work, labor, services, and materials, and to expend funds for the GLASS HOUSE PROJECT.

At the time CI LABS/HOMAN acted, CI LABS/HOMAN did not know that said representations were false and believed that they were true. CI LABS/HOMAN acted in justifiable reliance upon the truth of said representations." (FACC, P. 39.) "In justifiable reliance upon the conduct of said Cross-Defendants, CI LABS/HOMAN were induced to act and proceeded with providing work, labor, services, and materials, and expending funds for the GLASS HOUSE PROJECT, until said Cross-Defendants notified CI LABS/HOMAN that they would not permit CI LABS/HOMAN to complete the GLASS HOUSE PROJECT." (FACC, P. 40.) "As a result of CI LABS'/HOMAN's reliance upon the conduct of said Cross-Defendants, CI LABS/HOMAN have suffered damages in an amount in excess of Five Hundred Thousand Dollars ($500,000), according to proof, including, but not limited to, damages for the value of the work, labor, services, and materials provided and the funds expended by CI LABS/HOMAN on the GLASS HOUSE PROJECT." (FACC, P. 41.)

The allegations of knowledge and intent are sufficient to withstand demurrer. The additional allegations, specifically in the background section of the FACC, set forth the requisite "how, when, where, to whom, and by what means the representations were tendered." Glass House and Farrar next argue that Cross-Complainants were not justified in relying on Farrar's alleged statement that the Glass House Project was definitely going to be completed. The argument fails. It is an argument that goes to factual matters of proof, which are not subject to disposition on demurrer.

The allegations

of reliance are sufficient to overcome demurrer. Glass House and Farrar's final argument regarding the first cause of action is that the Cross-Complainants fail to allege when statements were made. A review of the FACC proves this argument to be without merit. While not necessarily pinning down every alleged statement to a specific day or week, the background section of the FACC, which is incorporated into the first cause of action, is replete with dates that the allegedly fraudulent statements were made.

Glass House and Farrar's demurrer to the first cause of action will be overruled. Second Cause of Action for Negligent Misrepresentation Glass House and Farrar argue that the second cause of action fails because "[t]he elements of a misrepresentation of a past or existing material fact, without reasonable grounds for believing it to be true, and justifiable reliance are not sufficiently alleged." (Demurrer, p. 8, ll. 16-17.) " '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.' " [Citation.]" (Y.P. v.

Wells Fargo Co. (2026) 119 Cal.App.5th 1069, 1085.) Glass House and Farrar are correct that the cause of action is dependent on a false statement about a fact that existed at the time of the representation or before, rather than a promise or prediction about future events. (see Nissan Motor Acceptance Cases (2021) 63 Cal.App.5th 793, 823.) As pled in the FACC: "Within the last three years, the GLASS HOUSE Cross-Defendants and the FARRAR Cross-Defendants each made representations, either explicitly or implicitly, of material facts to CI LABS/HOMAN in connection with the GLASS HOUSE PROJECT, as set forth above; said representations included, but were not limited to, the representation that CI LABS/HOMAN should provide work, labor, services, and materials, and expend the funds necessary to develop the GLASS HOUSE PROJECT, because the GLASS HOUSE PROJECT was definitely going to be completed." (FACC, P. 44.)

A review of that paragraph, in conjunction with the background facts, fails to disclose which specific misrepresentations were made regarding facts that existed at the time of the misrepresentation or before. More specific facts are needed to support the cause of action. The demurrer to the second cause of action will be sustained. Because it is likely that Cross-Complainants will be capable of alleging sufficient additional facts to support the cause of action, they will be given leave to amend. (Note: Glass House and Farrar's final argument that the pleading of specific intent precludes Cross-Complainants from pleading negligence is without merit.

Parties are permitted to plead inconsistent theories of liability. The court also notes that the Business Judgment Rule argument is without merit.) Third Cause of Action for Breach of Oral Contract Houweling and Glass Investments demur to the third cause of action for breach of oral contact on the grounds that it fails to state facts sufficient to constitute a cause of action. "The elements of a breach of oral contract cause are: " '(1) existence of the contract; (2) plaintiff's performance or excuse for nonperformance; (3) defendant's breach; and (4) damages to plaintiff as a result of the breach.' " [Citations.]" (Aton Center, Inc. v.

United Healthcare Ins. Co. (2023) 93 Cal.App.5th 1214, 1230.) "An oral contract may be pleaded generally as to its effect, because it is rarely possible to allege the exact words. [Citation.] A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures. [Citations.]" (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616.) In addition to the allegations set forth above, Cross-Complainants allege: "In or about July 2024, CI LABS/HOMAN entered into an oral agreement with the GLASS INVESTMENTS

Cross-Defendants and the HOUWELING Cross-Defendants whereby CI LABS/HOMAN would construct, own, and operate the ARIZONA PROJECT, and enter into a Power Purchase Agreement with said Cross-Defendants for the ARIZONA PROJECT." (FACC, P. 51.) "CI LABS/HOMAN have performed all obligations to said Cross-Defendants pursuant to that oral agreement, except those obligations CI LABS/HOMAN were prevented or excused from performing." (FACC, P. 52.) "Commencing within the last two years, and continuing thereafter, said Cross- Defendants breached that oral agreement by, among other things, refusing to permit CI LABS/HOMAN to complete the construction, ownership, and operation and to enter into a Power Purchase Agreement with said Cross-Defendants for the ARIZONA PROJECT." (FACC, P. 53.) "CI LABS/HOMAN have suffered damages legally (proximately) caused by said breaches by said Cross-Defendants in an amount in excess of One Million Dollars ($1,000,000), according to proof, including, but not limited to, profits and other benefits CI LABS/HOMAN would have gotten from their work on the ARIZONA PROJECT." (FACC, P. 54.)

Houweling and Glass Investments' arguments are circular and seek to require Cross-Complainants to allege specific facts that they are not required to plead. Some of the arguments are simply untrue. For example, Houweling and Glass investments argue that the pleading is unclear as to the date of the oral agreement and whether performance was possible within one year. Although not required to plead those things, Cross-Complainants actually do plead them. Reading the FACC as a whole, makes clear that the allegations pertain to a July 2024 agreement that was both possible, and required to be, completed by the end of that year.

The demurrer to the third cause of action is without merit and the demurrer will be overruled. Fourth Cause of Action for Common Counts Houweling and Glass Investments argue that the fourth cause of action for common counts is unclear as to what type of common count is being alleged. " 'A common count is not a specific cause of action . . .; rather, it is a simplified form of pleading normally used to aver the existence of various forms of monetary indebtedness . . ..' " [Citation.]" (Professional Collection Consultants v.

Lujan (2018) 23 Cal.App.5th 685, 690.) "The practice of pleading common counts in California has been too long established to be open to question. (Pike v. Zadig (1915) 171 Cal. 273, 276, 152 P. 923). " '[T]he common counts are sufficient to state a cause of action upon either a contract implied in fact [citations] or a contract implied in law.' " (Weitzenkorn v. Lesser (1953) 40 Cal.2d 778, 793, 256 P.2d 947; 3 Witkin, California Procedure, 2d edition, p. 2083, Pleading Sec. 423 and following, and authorities collected there.)

As Witkin states in his text, " 'A common count is proper whenever the plaintiff claims a sum of money due, either as an indebtedness in a sum certain, or for the reasonable value of services, goods, etc., furnished. It makes no difference in such a case that the proof shows the original transaction to be an express contract, a contract implied in fact, or a quasi-contract.' " (Id. at p. 2085)." (Kawasho Internat., U.S.A. Inc. v. Lakewood Pipe Service, Inc. (1983) 152 Cal.App.3d 785, 793.) Cross-Complainants allege: "Within the last two years, the GLASS INVESTMENTS Cross-Defendants and the HOUWELING Cross-Defendants became indebted to CI LABS/HOMAN in an amount in excess of Five Hundred Thousand Dollars ($500,000), according to proof, for work, labor, services, and materials rendered, and funds expended at the special insistence and request of said Cross-Defendants and for which said Cross-Defendants promised to pay to CI LABS/HOMAN.

Said amount is due and unpaid." (FACC, P. 56.) Paragraph 56 is enough, even in isolation, to state a valid cause of action for common counts. The demurrer to the fourth cause of action will be overruled. Fifth Cause of Action for Fraud Houweling and Glass Investments group their demurrers to the fifth cause of action for fraud and the sixth cause of action for negligent misrepresentation into one section. As the two causes of action require different analysis', they will be addressed separately by the court.

The elements and requirements of pleading fraud are discussed above in relation to the first cause of action.

Houweling and Glass Investments' arguments are substantially similar to those made by Glass House and Farrar. Namely, that the cause of action is not pled with the requisite particularity. In addition to the background allegations, Cross-Complainants allege: "Within the last three years, the GLASS INVESTMENTS Cross-Defendants and the HOUWELING Cross-Defendants each made representations, either explicitly or implicitly, of material facts to CI LABS/HOMAN in connection with the ARIZONA PROJECT, as set forth above; said representations included, but were not limited to, the representation that CI LABS/ HOMAN should provide work, labor, services, and materials, and expend the funds necessary to develop the ARIZONA PROJECT, because CI LABS/HOMAN were definitely going to be permitted to complete the ARIZONA PROJECT and enter into a Power Purchase Agreement with said Cross-Defendants." (FACC, P. 58.) "Those representations were in fact false; with respect to the specific representation set forth in Paragraph 58, the truth was that said Cross-Defendants did not intend to permit CI LABS/HOMAN to complete the ARIZONA PROJECT or to enter into a Power Purchase Agreement with CI LABS/HOMAN." (FACC, P. 59.) "When said Cross-Defendants made those representations to CI LABS/HOMAN, said Cross-Defendants knew those representations were false." (FACC, P. 60.) "Said Cross-Defendants made those representations with the intent to defraud and induce CI LABS/HOMAN to provide work, labor, services, and materials, and expend funds for the ARIZONA PROJECT.

At the time CI LABS/HOMAN acted, CI LABS/HOMAN did not know that said representations were false and believed that they were true. CI LABS/HOMAN acted in justifiable reliance upon the truth of said representations." (FACC, P. 61.) "In justifiable reliance upon the conduct of said Cross-Defendants, CI LABS/ HOMAN were induced to act and proceeded with providing work, labor, services, and materials, and expending funds for the ARIZONA PROJECT, until said Cross-Defendants notified CI LABS/HOMAN that they would not permit CI LABS/HOMAN to complete the ARIZONA PROJECT or to enter into a Power Purchase Agreement with said Cross-Defendants." (FACC, P. 62.) "As a result of CI LABS'/HOMAN's reliance upon the conduct of said Cross- Defendants, CI LABS/HOMAN have suffered damages in an amount in excess of Five Hundred Thousand Dollars ($500,000), according to proof, including, but not limited to, damages for the value of the work, labor, services and materials provided, and the funds expended by CI LABS/HOMAN on the ARIZONA PROJECT." (FACC, P. 63.) "In doing the acts alleged in this cause of action, and, in particular, in telling consultants for CI LABS/HOMAN that CI LABS/HOMAN were incompetent, had overcharged and had stolen substantial sums of money from the GLASS INVESTMENTS Cross-Defendants and the HOUWELING Cross-Defendants, and that CI LABS/HOMAN could not be trusted, said Cross-Defendants acted maliciously and oppressively towards CI LABS/HOMAN in that said Cross-Defendants knew that they could induce CI LABS/HOMAN to provide necessary work, labor, services, and materials, and expend funds for the ARIZONA PROJECT." (FACC, P. 64.)

The additional allegations, specifically in the background section of the FACC, set forth the requisite "how, when, where, to whom, and by what means the representations were tendered." The demurrer to the fifth cause of action will be overruled. Sixth Cause of Action for Negligent Misrepresentation As noted above, Houweling and Glass Investments grouped their demurrer to the fifth and sixth cause of action into one section. The requirement for pleading negligent misrepresentation is set forth above relative to the second cause of action.

The allegations of the sixth cause of action are similar to the allegations of the second cause of action and suffer from the same defect as discussed above. The allegations fail to disclose which specific misrepresentations were made regarding facts that existed at the time of the misrepresentation or before. As with the second cause of action, more specific facts are needed to support the sixth cause of action. The demurrer to the sixth cause of action will be sustained with leave to amend.

Seventh Cause of Action for Intentional Interference with Contract EnPower and Hopwood demur to the seventh cause of action for intentional interference with contract on the grounds that it fails to state sufficient facts to constitute a cause of action. " 'The elements which a plaintiff must plead to state the cause of action for intentional interference with contractual relations are (1) a valid contract between plaintiff and a third party; (2) defendant's knowledge of this contract; (3) defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.' " [Citation.]" (Quelimane Co. v.

Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 55.) Here, in addition to the background allegations, Cross-Complainants allege: "The ENPOWER Cross-Defendants and the HOPWOOD Cross-Defendants were aware of the oral contract between CI LABS/HOMAN and the GLASS INVESTMENTS Cross-Defendants and the HOUWELING Cross-Defendants, and intentionally induced the GLASS INVESTMENTS Cross-Defendants and the HOUWELING Cross-Defendants to breach their contract with CI LABS/HOMAN by telling the GLASS INVESTMENTS Cross-Defendants and the HOUWELING Cross-Defendants that CI LABS/HOMAN were incompetent, had overcharged and had stolen substantial sums of money from them, and could not be trusted.

The ENPOWER Cross-Defendants and the HOPWOOD Cross-Defendants knew that those statements were not true." (FACC, P. 73.) "As a result of those intentional acts by the ENPOWER Cross-Defendants and the HOPWOOD Cross-Defendants, the business relationship between CI LABS/HOMAN and the GLASS INVESTMENTS Cross-Defendants and the HOUWELING Cross-Defendants was disrupted in that the GLASS INVESTMENTS Cross-Defendants and the HOUWELING Cross-Defendants terminated their contract with CI LABS/HOMAN and proceeded with the development of the ARIZONA PROJECT without CI LABS/HOMAN." (FACC, P. 74.) "As a result of the intentional interference by the ENPOWER Cross-Defendants and the HOPWOOD Cross-Defendants with the contract between CI LABS/HOMAN and the GLASS INVESTMENTS Cross-Defendants and the HOUWELING Cross-Defendants, CI LABS/HOMAN have suffered damages in an amount in excess of One Million Dollars ($1,000,000), according to proof, including, but not limited to, profits and other benefits CI LABS/HOMAN would have made from their work on the ARIZONA PROJECT." (FACC, P. 75.)

In their argument, EnPower and Hopwood appear to completely ignore all of the additional allegations contained in the background section, which are affirmatively incorporated into the cause of action. The background allegations, combined with the allegations set forth under the cause of action, are more than sufficient to overcome demurrer. The demurrer to the seventh cause of action will be overruled. Eighth Cause of Action for Negligent Interference with Contractual Relations The eighth cause of action was dismissed on June 1, 2026.

Thus, the demurrer to the eighth cause of action is moot. Ninth Cause of Action for Intentional Interference with Prospective Economic Advantage EnPower and Hopwood argue that Cross-Complainants' ninth cause of action is subject to demur because it fails to allege sufficient facts to demonstrate the existence of an economic relationship between Cross-Complainants and other Cross-Defendants containing the probability of future economic benefit to Cross-Complainants, and that Cross-Complainants fail to allege facts to evidence EnPower and Hopwood's knowledge of any such relationship.

A cause of action for intentional interference with prospective economic advantage requires the pleading of " ' "(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant." ' [Citations.]" ' [Citation.]" (Korea Supply Co. v.

Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153.) In addition to the background allegations, Cross-Complainants allege:

"The ENPOWER Cross-Defendants and the HOPWOOD Cross-Defendants were aware of a valid and existing business relationship between CI LABS/HOMAN and the GLASS INVESTMENTS Cross-Defendants and the HOUWELING Cross-Defendants, and intentionally disrupted that business relationship by telling the GLASS INVESTMENTS Cross-Defendants and the HOUWELING Cross-Defendants that CI LABS/HOMAN were incompetent, had overcharged and had stolen substantial sums of money from them, and could not be trusted. The ENPOWER Cross-Defendants and the HOPWOOD Cross-Defendants knew that those statements were not true." (FACC, P. 82.) "As a result of those intentional acts by the ENPOWER Cross-Defendants and the HOPWOOD Cross-Defendants, the business relationship between CI LABS/HOMAN and the GLASS INVESTMENTS Cross-Defendants and the HOUWELING Cross-Defendants was disrupted in that the GLASS INVESTMENTS Cross-Defendants and the HOUWELING Cross- Defendants terminated their business relationship with CI LABS/HOMAN and proceeded with the development of the ARIZONA PROJECT without CI LABS/HOMAN." (FACC, P. 83.) "As a result of the intentional interference by the ENPOWER Cross-Defendants and the HOPWOOD Cross-Defendants with that business relationship between CI LABS/HOMAN and the GLASS INVESTMENTS Cross-Defendants and the HOUWELING Cross-Defendants, CI LABS/HOMAN have suffered damages in an amount in excess of One Million Dollars ($1,000,000), according to proof, including, but not limited to, profits and other benefits CI LABS/HOMAN would have made from their work on the ARIZONA PROJECT." (FACC, P. 84.)

The allegations are sufficient to overcome demurrer, and the demurrer to the ninth cause of action will be overruled. Tenth Cause of Action for Negligent Interference with Prospective Economic Advantage EnPower and Hopwood argue that the tenth cause of action fails to allege sufficient facts to demonstrate the existence of an economic relationship between Cross-Complainants and other Cross-Defendants, and that Cross-Complainants fail to allege facts evidencing EnPower or Hopwood's knowledge of such a relationship.

Both of these arguments were addressed, and dismissed, above. EnPower and Hopwood additionally argue that they cannot intentionally interfere when they were not apprised of the Arizona Project. The elements for negligent interference with prospective economic advantage are similar to those for intentional interference with prospective economic advantage, which are discussed above. The difference is only one of intent versus reasonable care. "The elements of negligent interference with contract or prospective economic advantage are (1) the existence of a valid contractual relationship or other economic relationship between the plaintiff and a third party containing the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge (actual or construed) of the relationship; (3) the defendant's knowledge (actual or construed) that the relationship would be disrupted if the defendant failed to act with reasonable care; (4) the defendant's failure to act with reasonable care; (5) actual disruption of the relationship; and (6) resulting economic harm." (Nelson v.

Tucker Ellis, LLP (2020) 48 Cal.App.5th 827, 844, fn. 5.) In addition to the background allegations, Cross-Complainants allege: "The ENPOWER Cross-Defendants and the HOPWOOD Cross-Defendants were aware of a valid and existing business relationship between CI LABS/HOMAN and the GLASS INVESTMENTS Cross-Defendants and the HOUWELING Cross-Defendants, and negligently disrupted that business relationship by telling the GLASS INVESTMENTS Cross-Defendants and the HOUWELING Cross-Defendants that CI LABS/HOMAN were incompetent, had overcharged and stolen substantial sums of money from them, and could not be trusted.

When the ENPOWER Cross-Defendants and the HOPWOOD Cross-Defendants made those statements, they had no reasonable grounds for believing that those statements were true." (FACC, P. 87.) "As a result of those negligent acts by the ENPOWER Cross-Defendants and the HOPWOOD Cross-Defendants, the business relationship between CI LABS/HOMAN and the GLASS INVESTMENTS Cross-Defendants and the HOUWELING Cross-Defendants was disrupted in that the GLASS INVESTMENTS Cross-Defendants and the HOUWELING Cross-Defendants terminated their business relationship with CI

LABS/HOMAN and proceeded with the development of the ARIZONA PROJECT without CI LABS/HOMAN." (FACC, P. 88.) "As a result of the negligent interference by the ENPOWER Cross-Defendants and the HOPWOOD Cross-Defendants with that business relationship between CI LABS/HOMAN and the GLASS INVESTMENTS Cross-Defendants and the HOUWELING Cross-Defendants, CI LABS/HOMAN have suffered damages in an amount in excess of One Million Dollars ($1,000,000), according to proof, including, but not limited to, profits and other benefits CI LABS/HOMAN would have made from their work on the ARIZONA PROJECT." (FACC, P. 89.)

The allegations are more than sufficient to overcome demurrer and the demurrer to the tenth cause of action will be overruled. Eleventh Cause of Action for Slander EnPower and Hopwood argue that the eleventh cause of action for slander is subject to demurrer because it fails to state sufficient facts to constitute a cause of action. Slander, in the context of the FACC, consists of "a false and unprivileged publication, orally uttered, and also communications by radio or any mechanical or other means which . . [t]ends directly to injure him in respect to his office, profession, trade or business, either by imputing to him general disqualification in those respects which the office or other occupation peculiarly requires, or by imputing something with reference to his office, profession, trade, or business that has a natural tendency to lessen its profits." (Civ.

Code, Sec. 46, subd. (3).) In addition to the allegations of the background section, which in itself is sufficient to constitute a cause of action for slander, Cross-Complainants allege: "The ENPOWER Cross-Defendants and the HOPWOOD Cross-Defendants have made statements about the professional work of CI LABS/HOMAN that have slandered CI LABS/HOMAN, including, but not limited to, statements that CI LABS/HOMAN were incompetent, had overcharged and had stolen substantial sums of money from the GLASS INVESTMENTS Cross-Defendants and the HOUWELING Cross-Defendants, and were not to be trusted." (FACC, P. 91.) "Those statements were false and unprivileged at the time they were made." (FACC, P. 92.) "These statements were published to others than CI LABS/HOMAN, including, but not limited to, the GLASS INVESTMENTS Cross-Defendants, the HOUWELING Cross-Defendants, Obodo Energy Partners, Silicon Valley Breaker & Control, and Sulphur Springs Valley Electric Cooperative." (FACC, P. 93.) "These statements injured the reputation of CI LABS/HOMAN in both their personal and professional capacities, and damaged their ability to earn a living in their occupation." (FACC, P. 94.) "As a proximate result of those slanderous statements made by the ENPOWER Cross-Defendants and the HOPWOOD Cross-Defendants about CI LABS/HOMAN, CI LABS/HOMAN have suffered, and continue to suffer, substantial damages for loss of earnings, and continue to suffer embarrassment, humiliation, and mental anguish, all to their damage, in an amount in excess of Five Hundred Thousand Dollars ($500,000), according to proof." (FACC, P. 95.)

The allegations are more than sufficient to overcome demurrer and the demurrer to the eleventh cause of action will be overruled. Motion to Strike All three sets of Cross-Defendants move to strike portions of the FACC related to exemplary damages. The motions all fail for the same reasons. "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., Sec. 436.) "Irrelevant matter" includes a "demand for judgment requesting relief not supported by the allegations of the complaint." (Code Civ. Proc., Sec. 431.10, subds. (b)(3), (c).) "The 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., Sec. 437, subd. (a).) "In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally