Probability of Prevailing. The burden shifts to Plaintiff to show probability of success on the merits of the fraud claim. The “probability of prevailing” is tested by the same standard governing a motion for summary judgment, i.e., in opposing an anti-SLAPP motion, it is plaintiff’s burden to make a prima facie showing of facts that would support a judgment in plaintiff’s favor. (Taus v. Loftus (2007) 40 Cal.4th 683, 714.) The plaintiff must also produce admissible evidence sufficient to overcome any privilege or defense that defendant has asserted to the claim. (Flatley v. Mauro (2006) 39 Cal.4th 299, 323.)

Here, Defendant contends the litigation privilege under Civil Code section 47, subdivision (b)(2) applies. The privilege applies to “any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) to have some connection or logical relation to the action.” [Citations.]” (Silberg v. Anderson (1990) 50 Cal.3d 205, 212.) The privilege is an “absolute” privilege, and bars all tort causes of action except a claim for malicious prosecution. (Hagberg v. California Federal Bank (2004) 42 Cal.4th 350, 360.)

Again, Plaintiff’s complaint arises out of Defendant’s communications during judicial proceedings. Defendant has shown Plaintiff’s complaint is barred by the litigation privilege. Plaintiff failed to oppose the motion showing probability of prevailing on the fraud claim or disputing applicability of the litigation privilege. The motion is therefore GRANTED.

Defendant’s alternative motion to quash service of the summons is MOOT.

Counsel for Defendant shall give notice of this ruling.

4. Keno Capital, LLC v. Oakleaf Holding, LLC 23-1313683 Defendants Oakleaf Holding LLC, Orchid Management LLC and John L. Sorensen (“Defendants” together) Demurrer to plaintiff Keno Capital, LLC’s (“Plaintiff”) Second Amended Complaint (“SAC”) is SUSTAINED.

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Defendants demur solely to the eighth cause of action for Breach of the Implied Covenant of Good Faith and Fair Dealing based on lack of sufficient facts and uncertainty. (Civ. Proc. Code § 430.10(e) and (f).) Defendants also contend the SAC was not filed within the 15-day deadline specified by the court.

The court will proceed on the merits despite the SAC being filed late as the clerk did provide notice. The court also notes Defendant again did not make any arguments related to uncertainty, the demurrer is moot on that point.

“There is no obligation to deal fairly or in good faith absent an existing contract. [Citation.] If there exists a contractual relationship between the parties. . . the implied covenant is limited to assuring compliance with the express terms of the contract and cannot be extended to create obligations not contemplated in the contract.” (Racine & Laramie, Ltd. v. Dep't of Parks & Recreation (1992)11 Cal. App. 4th 1026, 1032.)

“If the allegations do not go beyond the statement of a mere contract breach and, relying on the same alleged acts, simply seek the same damages or other relief already claimed in a companion contract cause of action, they may be disregarded as superfluous as no additional claim is actually stated. Thus, absent those limited cases where a breach of a consensual contract term is not claimed or alleged, the only justification for asserting a separate cause of action for breach of the implied covenant is to obtain a tort recovery.” (Careau & Co. v. Sec. Pac. Bus. Credit, Inc. (1990) 222 Cal. App. 3d 1371, 1395.)

The allegations are Defendants would honor the “continuing obligations,” which consisted of not shopping the Securities, acting honestly and in good faith, avoid allowing disruptions and interreferences from third parties, and direct Stoddard to maintain Keno’s privileges and confidences. (SAC ¶ 48.) Plaintiff alleges that “implicit in a covenant of good faith and fair dealing that neither party would do anything that would have the effect of destroying or injuring the right of the other party to receive the benefits of the contract.” (SAC ¶ 138.) Plaintiff alleges Oakleaf breached this covenant by rendering it impossible for Plaintiff to timely close on the subject securities. (SAC ¶ 139.)

Specifically, 1) Oakleaf directed Stoddard to reveal material terms of the subject purchase agreement to NAHS without permission, knowing NAHS desired to purchase the securities and that NAHS could without consent; 2) Oakleaf shopped the securities to NAHS during the existence of the agreement despite amendment 1 prohibiting such activity; 3) Oakleaf failed to exercise its discretion in revealing the terms of the agreement to third parties that Oakleaf knew would interfere with Plaintiff’s contractual expectation; and 4) Oakleaf failed to receive Plaintiff’s consent before informing NAHS of the terms. (SAC ¶¶ 140, 142.)

Plaintiff now alleges it entered into a tripartite agreement (“Tripartite Agreement”) between Plaintiff, Sorensen, Keno, and Stoddard to maintain the privacy and confidentiality of all communication, which all parties consented to, which Plaintiff verbally asserted on several occasions. (SAC ¶ 141.) Oakleaf and Sorensen’s breach allegedly interfered with Plaintiff’s ability to receive the privacy and confidentiality sought through Tripartite Agreement, rendering any investment related to the Tripartite Agreement impossible. (SAC ¶ 143.) Plaintiff did everything it was supposed to, but as the result of Defendants’ breach, Plaintiff was injured in a sum to be determined. (SAC ¶¶ 145-148.)

It should be noted Plaintiff failed to attach the subject agreements to the SAC, however they were previously filed with the FAC. (ROA 714.) The original agreement does not contain any clause regarding taking the securities off market, nor does it contain any confidentiality/privacy clause. It does contain an integration clause indicating it contains all the agreements between the parties. (FAC, Ex. A.) Thus, while the SAC alleges there was Tripartite Agreement between the parties that the terms of the agreement would be kept under strict confidence there is nothing in the original agreement that requires confidentiality. As the agreement contains a final expression of the parties agreement, it cannot be contradicted by a claim of prior or contemporaneous oral agreement. (Civ. Proc. Code § 1856.)

Plaintiff’s new allegations that a Tripartite Agreement was created are not supported by the allegations. Plaintiff argues the integration clause does not matter as the Tripartite Agreement was between individuals/entities who were not parties to the purchase agreement; Stoddard, the attorney allegedly representing both sides in the transaction, Plaintiff/Jergensen (purchasers), and Sorensen (seller). However, this argument equates to what would be two breaches of separate contracts; the purchase agreement and the alleged Tripartite Agreement.

Additionally, there are no allegations regarding the terms of the Tripartite Agreement, including consideration, the date entered, etc. Further, even if the Tripartite Agreement were to be considered a valid contract, the failure of the Defendants to comply with sole term alleged (keeping the purchase agreement terms confidential) would be nothing more than a breach of contract claim and would not support a breach of the implied covenant of good faith and fair dealing claim.

Although Amendment No. 1 does contain a clause that the subject securities would be removed from the market during the existence of the agreement, the allegations that Defendants did not do that again equate to nothing more than a breach of contract claim, which Plaintiff has pled at cause of action number seven, and do not support a separate cause of action for breach of the implied covenant of good faith and fair dealing.

Finally, consent from NAHS was required for the purchase to go through. (FAC, Ex. 1.) Plaintiff’s managing member Jergensen was employed by NAHS at the time as was Olsen (CEO and board member) who signed off on the Agreement initially. (SAC ¶¶ 13, 21.) NAHS would be deemed to have notice of the terms of the agreement via those relationships at least to some extent. (Civ. Code § 2332; Powell v. Goldsmith (1984) 152 Cal. App. 3d 746, 750.) There are also no allegations that Defendants were able to control the actions of other entities or individuals.

Plaintiff has not pled sufficient facts to support this COA. The demurrer is SUSTAINED with one final leave to amend within 15 days of written notice of the ruling.

Defendants’ request to take judicial notice is DENIED as the requested items are improper items for judicial notice. (TSMC N. Am. v. Semiconductor Mfg. Internat. Corp. (2008) 161 Cal. App. 4th 581, 594 fn. 4.) Plaintiff’s objections are moot based on the denial.

Defendant to give notice.

5. Johns v. Children’s Hospital of Orange County 25-1497840 Before the Court is a demurrer and motion to strike filed by defendant Children’s Hospital of Orange County (Defendant) directed to the first amended complaint (FAC) of plaintiff Anthony Johns (Plaintiff). The demurrer is OVERRULED and the motion to strike is DENIED.