Newnes vs. Lay

Should Plaintiff wish to file an amended complaint that addresses the issues in this ruling, Plaintiffs must file and serve it within 15 days of service of notice of ruling.

In ruling on a demurrer, a court must accept as true all allegations of fact contained in the complaint. Blank v. Kirwan, 39 Cal.3d 311, 318 (1985). A demurrer challenges only the legal sufficiency of the affected pleading, not the truth of the factual allegations in the pleading or the pleader’s ability to prove those allegations. (Cundiff v. GTE Cal., Inc. (2002) 101 Cal.App.4th 1395, 1404- 05.)

Defamation

The third cause of action for defamation alleges Defendants Lay, Bartels, and Genessee published to one or more third parties false statements of fact about Plaintiff. (FAC ¶ 28.) The false statements characterized Plaintiff as “unstable” in his business dealings; referred to Plaintiff as part of a “Crazy effing family”; and called Plaintiff “f***ing nuts”. (FAC ¶ 27.) Moving Defendants contend these expressions rhetorical hyperbole rather than factual assertions and, thus, are nondefamatory statements of opinion.

“Unlike mere opinions, a statement that suggests or implies a false assertion of fact is actionable.” (Edward v. Ellis (2021) 72 Cal.App.5th 780, 790.) The “dispositive question” is “whether a reasonable fact finder could conclude the published statement declares or implies a provably false assertion of fact.” (Franklin v. Dynamic Details, Inc. (2004) 116 Cal.App.4th 375, 385.) This is ordinarily a question of law for the court, “unless the statement is susceptible of both an innocent and a libelous meaning, in which case the jury must decide how the statement was understood.” (Ibid.)

Here, the alleged statements cannot reasonably be understood to imply that Plaintiff and his family are mentally ill or unstable. This is rhetorical hyperbole, language that is so loose, figurative, or hyperbolic that it negates any impression that the writer was seriously maintaining a factual proposition susceptible to being proved true or false. (Hoang v. Tran (2021) 60 Cal.App.5th 513, 534; see, e.g., Ferlauto v. Hamsher (1999) 74 Cal.App.4th 1394, 1403-1404, 88 Cal.Rptr.2d 843 [book's flip characterizations of opponent's lawyer as “ ‘Kmart Johnnie Cochran,’ ” “ ‘creepazoid attorney,’ ” and “ ‘loser wannabe lawyer’ ” were classic rhetorical hyperbole that could not be interpreted as stating actual facts]; see also Grenier v.

Taylor (2015) 234 Cal.App.4th 471, 486 [“rhetorical hyperbole, vigorous epithets, lusty and imaginative expressions of contempt and language used in a loose, figurative sense will not support a defamation action”].)

Plaintiff argues that context matters because the defamatory statements were made in the “context of business communications concerning Plaintiff’s professional activities and reputation.” (Opp. at 8:27-9:1 [ROA 90].) There are no such allegations in the FAC. The demurrer is sustained as to the third cause of action for defamation.

Identity Theft

The first cause of action for identity theft alleges Plaintiff has operated as a real estate broker in California under License No. 00921528 issued to him by the California Department of Real Estate (“DRE”) and under which he does business as Centennial Properties. (FAC ¶ 14.) The FAC alleges in or about February

2022, Defendants Lay, Bartels, Genessee used Plaintiff’s personal identifying information, without Plaintiff’s authority or consent, to obtain credit, goods, services, money, or property. (Id. at ¶ 15.) Specifically, Defendants Lay, Bartels, Genessee arranged for a business named “Venture Yours” to be sold on the purported representation that Defendants were authorized to transfer the Plaintiff’s DRE license to Chaparro. (Id.)

Plaintiff bases his identity theft claim on Civil Code sections 1798.92 and 1798.93. Under these statutes, a “victim of identity theft” may bring an action for damages, civil penalty, and injunctive relief against a “claimant.” (Civ. Code, § 1798.93, subds. (a)-(c).) A “victim of identity theft” means “a person who had his ... personal identifying information used without authorization by another to obtain credit, goods, services, money, or property, and did not possess the credit, goods, services, money, or property obtained by the identity theft, and filed a police report in this regard.” (Id. at § 1798.92, subd. (d).)

Section 1798.93 grants a private right of action to a “person” to establish that the “person is a victim of identity theft in connection with [a] claimant’s claim against that person.” Section 1798.92 defines a “claimant” as “a person who has or purports to have a claim for money or an interest in property in connection with a transaction procured through identity theft.” Section 1798.93, subdivision (a) provides that an identity theft victim may pursue an action only against a party that has made a “claim against that person.”

The FAC does not allege any facts tending to demonstrate Defendant Lay is a claimant within the meaning of section 1798.92, subdivision (a) against whom Plaintiff can bring a section 1798.93 claim. Accordingly, Plaintiff has not pleaded sufficient facts to allege a private right of action for identity theft against Lay. The demurrer is sustained as to the first cause of action for identity theft.

Violation of Penal Code Section 496

California Penal Code section 496, subdivision (a) imposes civil liability, including treble damages, costs, and fees, against “[e]very person who buys or receives property that has been stolen or that has been obtained in any manner constituting theft or extortion, knowing the property to be so stolen or obtained, or who conceals, sells, withholds or aids in concealing, selling or withholding any property from the owner, knowing the property to be so stolen or obtained[.]” (See also Penal Code § 496, subdivision (c) [providing a private right of action for “any person who has been injured” by a violation of subdivision (a)].) “[T]he elements required to show a violation of section 496[] are simply that (i) property was stolen or obtained in a manner constituting theft, (ii) the defendant knew the property was so stolen or obtained, and (iii) the defendant received or had possession of the stolen property. [Citation.]” (Switzer v. Wood (2019) 35 Cal.App.5th 116, 126.)

The seventh cause of action for violation of Penal Code section 496 alleges Plaintiff’s DRE license was stolen and then transferred by Defendants Lay, Bartels, and Genessee. (FAC ¶ 49.) Defendants received or possessed Plaintiff’s stolen DRE license, knew that the DRE license was stolen, and aided one other in transferring the license. (Id. at ¶¶ 50-51.) This is sufficient to allege a cause of action for violation of Penal Code section 496.

Moving Defendants assert that the sale or transfer of a professional license does not constitute theft under Penal Code section 496. Here, Plaintiff alleges that his DRE license was stolen and then sold or transferred. These allegations are

sufficient to state a claim under Penal Code section 496. The demurrer is overruled seventh cause of action for violation of Penal Code section 496.

Negligence (Per Se)

The sixth cause of action for negligence per se incorporates all previous allegations and further alleges Defendants Lay, Bartels, and Genessee violated one or more statutes, ordinances, or regulations. (FAC ¶¶ 42-43.) The FAC also alleges the violation was the proximate cause of injury to Plaintiff, Plaintiff’s injuries were of the type the law was designed to prevent, and Plaintiff is a member of the class of persons the law was adopted to protect. (Id. at ¶¶ 44-46.)

“The elements of any negligence cause of action are duty, breach of duty, proximate cause, and damages.” (Peredia v. HR Mobile Services, Inc. (2018) 25 Cal.App.5th 680, 687.) “Under Evidence Code section 669, negligence is presumed where the following elements are met: (1) the defendant violated a statute, (2) the violation proximately caused injury to a person or property, (3) the injury resulted from an occurrence of a type the statute was designed to prevent, and (4) the person suffering injury was one of the class of persons for whose protection the statute was adopted.” (Drury v. Ryan (2025) 109 Cal.App.5th 1102, 1109.) This is commonly known as negligence per se.

As discussed above, Plaintiff sufficiently pled a statutory violation against Defendant Lay, namely, violation of Penal Code section 496. The FAC alleged Plaintiff suffered harm to his reputation and loss of customers and vendors. (FAC ¶¶ 40, 44, 47.) The purpose of Penal Code section 496 is to ” eliminat[e] markets for stolen property”. (Bell v. Feibush (2013) 212 Cal.App.4th 1041, 1047.) Thus, this was the type of harm the statute was designed to prevent, and Plaintiff, as a person who has been injured by the knowing receipt and transfer of stolen property, is in the class of persons the statute was designed to protect. Plaintiff adequately alleged a claim for negligence. The demurrer is overruled as to the sixth cause of action for negligence.

Unfair Competition

The fourth cause of action for unfair competition incorporates all previous allegations and further alleges Defendants Lay, Bartels, and Genessee threatened “an incipient violation of antitrust law, or violates the policy or spirit of one of those laws because its effects are comparable to or the same as a violation of the law, or otherwise significantly threatens or harms competition by exploiting the duly issued license of an individual and business, in this case, plaintiff Newnes individually and doing business as Centennial Properties, by one not so licensed.” (FAC ¶ 33.) Plaintiff alleges that Defendants benefited monetarily from the unfair use and misuse of Plaintiff’s DRE license and that Plaintiff is entitled to restitution and injunctive relief.

California’s unfair competition law (“UCL”) is intended to protect business competitors and consumers “by promoting fair competition in commercial markets for goods and services.” (Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 949.) By broadly proscribing “any” unlawful business “act” or “practice” (Bus. & Prof. Code, § 17200), “the UCL ‘ “borrows” ’ rules set out in other laws and makes violations of those rules independently actionable.” (Zhang v. Superior Court (2013) 57 Cal.4th 364, 370.) For that reason, UCL claims are often derivative of other separately pleaded causes of action. “Virtually any law—federal, state or local—can serve as a predicate for an action under [the UCL].” (Smith v. State Farm Mutual Automobile Ins. Co. (2001) 93 Cal.App.4th 700, 718.)

Plaintiff argues Defendants’ alleged misappropriation of Plaintiff’s professional license undermines the regulatory scheme governing real estate transactions in California. (Opp. at 16:6-8 [ROA 90].) By falsely representing they had the authority to use or transfer Plaintiff’s license, Defendants subverted the public protection of the DRE licensing system. (Id. at 16:9-10.) Allegations to this effect, however, are not present in the FAC. The demurrer is sustained as to the fourth cause of action for unfair competition

Invasion of Privacy

Common law misappropriation is one of the four types of invasion of privacy recognized in California. (Dora v. Frontline Video, Inc. (1993) 15 Cal.App.4th 536, 541, 18 Cal.Rptr.2d 790.) An individual’s right to publicity is invaded if another appropriates for his advantage the individual’s name, image, identity or likeness. (Fleet v. CBS, Inc. (1996) 50 Cal.App.4th 1911, 1918.) The elements of the common law cause of action are “(1) the defendant’s use of the plaintiff’s identity; (2) the appropriation of plaintiff’s name or likeness to defendant’s advantage, commercially or otherwise; (3) lack of consent; and (4) resulting injury. [Citations.]” (Id.)

The second cause of action for invasion of privacy alleges Defendants Lay, Bartels, and Genessee appropriated Plaintiff’s name, likeness, and identity including his DRE license, without Plaintiff’s consent, to consummate the sale of Venture Yours to Chapparo for substantial monetary or other consideration. (FAC ¶¶ 21-23.)

Defendants contend that the FAC’s allegations that Defendants transferred or sold Plaintiff’s DRE license number in connection with a business transaction does not constitute misappropriation of likeness, but do not cite any case law in support of this argument. Moreover, Plaintiff alleges Defendants Lay, Bartels, and Genessee appropriated Plaintiff’s name, likeness, and identity as well as Plaintiff’s DRE license. The FAC’s allegations are sufficient to state a cause of action for misappropriation of likeness at this pleading stage. The demurrer is overruled to the second cause of action for invasion of privacy.

Constructive Fraud

The fifth cause of action for constructive fraud alleges Defendants Josh Chandler and Justice Solutions Group, LLC (JSG”) owed Plaintiff a duty of confidentiality in dealing with the private and confidential information Plaintiff disclosed to them. (FAC ¶ 37.) Chandler and JSG breached their duty by disclosing the private and confidential information and gained an advantage in money, property, benefits, or other consideration, and Plaintiff was harmed in his reputation and loss of customers and vendors. (Id. at ¶¶ 38-40.)

“In California, fraud must be pled specifically; general and conclusory allegations do not suffice. [Citations.] ‘Thus “ ‘the policy of liberal construction of the pleadings ... will not ordinarily be invoked to sustain a pleading defective in any material respect.’ ” ’ ” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) Every element of actual fraud and constructive fraud must be pleaded specifically. (Tindell v. Murphy (2018) 22 Cal.App.5th 1239, 1249–1250; Moncada v. West Coast Quartz Corp. (2013) 221 Cal.App.4th 768, 776.) The elements of constructive fraud are: “(1) a fiduciary relationship, (2) nondisclosure, (3) intent to deceive, and (4) reliance and resulting injury.” (Tindell v. Murphy, supra, 22 Cal.App.5th at pp. 1249–1250.)

The FAC fails to plead any of the elements of constructive fraud with the required specificity. The demurrer is sustained to the fifth cause of action for constructive fraud.

Moving Defendants to give notice.

_________________________________________________________________

Defendants Christopher Carr Lay, Josh Chandler, and Justice Solutions Group, LLC (“JSG”) move the strike the punitive damages allegations and prayer for relief from the First Amended Complaint (“FAC”) filed by Plaintiff Curt Newnes. In light of the court’s concurrent ruling on Defendants’ demurrer, the motion to strike is DENIED as MOOT as to paragraphs 18, 31, and 41. The motion to strike is GRANTED as to paragraphs 25, 54, and the prayer for relief.

Should Plaintiff wish to file an amended complaint that addresses the issues in this ruling, Plaintiffs must file and serve it within 15 days of service of notice of ruling.

A motion to strike may seek to strike punitive damages allegations or requests in a complaint lacking factual foundation. (Turman v. Turning Point of Central Calif., Inc. (2010) 191 Cal.App.4th 53, 63.)

To state a prima facie claim for punitive damages, a plaintiff must “set forth the elements as stated in [Civil Code] section 3294,” as well as “specific factual allegations showing that defendant’s conduct was oppressive, fraudulent, or malicious.” (Today’s IV, Inc. v. Los Angeles County Metropolitan Transportation Authority (2022) 83 Cal.App.5th 1137, 1193.) “Malice is defined in the statute as conduct intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (Id. at 725.)

Oppression is “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Civ. Code, § 3294, subd. (c)(2).) Fraud is defined as “an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.” (Civ. Code § 3294, subd. (c)(3).)

In connection with the second cause of action for invasion of privacy, the FAC alleges Defendants Lay, Bartels, and Genessee appropriated Plaintiff’s name, likeness, and identity including his DRE license, without Plaintiff’s consent, to consummate the sale of Venture Yours to Chapparo for substantial monetary or other consideration. (FAC ¶¶ 21-23.) The seventh cause of action for violation of Penal Code section 496 alleges Defendants Lay, Bartels, and Genessee assigned, sold, or otherwise transferred Plaintiff’s stolen DRE license. (Id. at ¶ 49.)

The FAC further alleges Defendants “engaged in the alleged conduct with malice, oppression, or fraud in that defendants acted with intent to cause injury, or defendants’ conduct was despicable and was done with a willful and knowing disregard of the rights or safety of plaintiff in that defendants were aware of the probable dangerous consequences of their conduct but deliberately failed to avoid those consequences, or defendants’ conduct was despicable and subjected plaintiff to cruel and unjust hardship in knowing disregard of his rights in that their conduct was so contemptible that it would be looked down on and despised by

reasonable people, or defendants intentionally misrepresented or concealed a material fact and did so intending to harm plaintiff.” (Id. at ¶¶ 25, 54.)

The FAC does not contain sufficient allegations of fact which, if proven, would sustain an award of punitive damages. The FAC lacks specific factual allegations showing that Defendants’ conduct was malicious, oppressive, or fraudulent.

Additionally, California courts have held that a plaintiff cannot recover punitive damages as an additional recovery if a defendant is liable for a statutory penalty or multiple damages under a statute, the award is punitive in nature, and the award penalizes essentially the same conduct as an award of punitive damages. (Fassberg Construction Co. v. Housing Authority of City of Los Angeles (2007) 152 Cal.App.4th 720, 759.) “To impose both a statutory penalty or multiple damages award and punitive damages in those circumstances would be duplicative. [Citation.] [Courts] presume that the Legislature did not intend to allow such a double recovery absent a specific indication to the contrary.” (Id.) The motion to strike paragraph 54 also is granted on this basis.

Moving Defendants to give notice.

56 Fields vs. Fidelity National Title Insurance Company

24-01418054

1. Demurrer to Amended Complaint 2. Motion to Strike Portions Of Complaint

The Demurrer to the First Complaint brought by Fidelity National Title Insurance Company is SUSTAINED, without leave to amend.

The instant action arises from a Title Insurance Policy issued in favor of Leslie C. Fields, as Trustee of the Fields Children’s Trust. (¶11 of FAC and Exhibit 5 thereto.)

To establish standing to assert claims based on the above, Plaintiff alleges an assignment of the policy benefits was made on March 7, 2026 by the Trustee, Olivia McMullen Fields. (¶23-¶24 of FAC and Exhibit 8 thereto.) Per the attached “Assignment of Insurance Benefits,” Olivia McMullen Fields, as Trustee for the Fields Children’s Trust transferred to Leslie C. Fields, “all applicable insurance benefits and rights under the above shown insurance policy” which is stated to include “the right to receive payment directly from the insurance company.” (¶23 of FAC and Exhibit 8 thereto.)

Relying on Kwok v. Transnation Title Ins. Co. (2009) 170 Cal.App.4th 1562, Defendant asserts the above referenced assignment is insufficient to establish standing; however, as noted by Plaintiff, Kwok does not address the allegations of an assignment.

In Kwok, a title insurance policy was obtained by an LLC, in connection with the purchase of property. (Kwok v. Transnation Title Ins. Co. (2009) 170 Cal.App.4th 1562, 1565.) Similar to this action, the LLC was the only named insured on Schedule A of the policy and the policy defined “insured” to mean “the insured named in Schedule A, and...those who succeed to the interest of the named insured by operation of law as distinguished from purchase....” (Ibid.; See also ¶11 of FAC and Exhibit 5 thereto, at ¶1(a) of “Definitions of Terms.”)

Following purchase and issuance of the policy, the appellants in Kwok, who were the only members of the LLC, executed a grant deed which transferred the insured