Plaintiff in Interpleader CTL Forest Management, Inc.’s Motion to Strike or, in the Alternative, Sever Cross Complaint; Plaintiff in Interpleader CTL Forest Management, Inc.’s Motion for Discharge; Plaintiff’s Demurrer to Emshire LLC’s Cross-Complaint
5-7. 25CV04232 CTL FORESTRY MANAGEMENT, INC V. FUGUE LAUMAN LLC ET AL
EVENTS: (1) Plaintiff in Interpleader CTL Forest Management, Inc.’s Motion to Strike or, in the Alternative, Sever Cross Complaint (2) Plaintiff in Interpleader CTL Forest Management, Inc.’s Motion for Discharge (3) Plaintiff’s Demurrer to Emshire LLC’s Cross-Complaint
Plaintiff in Interpleader CTL Forest Management, Inc.’s Motion to Strike or, in the Alternative, Sever Cross Complaint
Interpleader applies whenever there are conflicting claims to money or property. Code of Civil Procedure §386(b); Hood v. Gonzales, (2019) 43 Cal.App.5th 57, 75. Here, the Court finds that there are allegations of conflicting claims to the disputed funds which makes an interpleader action appropriate. [See, Plaintiff in Interpleader CTL Forest Management, Inc. (“CTL” herein) Complaint at ¶¶3-8; Cross-Complaint of Emshire LLC (“Emshire” herein) filed January 16, 2026; Cross-Complaint of Colonial Tree Service filed March 25, 2026; and Cross-Complaint of LZ Logistics, LLC filed March 25, 2026].
Additionally, the Court finds that Emshire’s claims go directly to CTL’s liability, not merely entitlement to the disputed funds, and as such, CTL is not a disinterested nor a neutral stakeholder and cannot avail itself of the protections of the Interpleader statute. See, Lincoln Nat. Life Ins. Co. v. Mitchell (1974) 41 Cal.App.3d 16; Pacific Loan Management Corp. v. Superior Court (1987) 196 Cal.App.3d 1485, 1489; Hancock Oil Co. v. Hopkins (1944) 24 Cal.2d 497, 505.
Based on the above, and because the Court finds that Emshire’s Cross-Complaint against CTL is related to the subject matter of the CTL’s Complaint (e.g., it arises out of the same transaction), the Court concludes that Emshire’s Cross-Complaint will be allowed to proceed in this action. As to the request for severance or a separate trial, that request is unsupported and is denied. The Motion is denied.
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Plaintiff in Interpleader CTL Forest Management, Inc.’s Motion for Discharge
For the reasons discussed above, CTL’s Motion for Discharge is likewise denied.
Plaintiff’s Demurrer to Emshire LLC’s Cross-Complaint
A demurrer to a complaint must be filed within 30 days after service of the complaint pursuant to CCP §§430.40(a) and 435(b)(1). Here, the Cross-Complaint was served on January 17, 2026. CTL therefore had until February 17, 2026 to file the instant Demurrer. However, the Demurrer was not filed until March 6, 2024. Thus, the Demurrer is untimely.
However, the Court in its discretion, has considered the merits of the Demurrer. Jackson v Doe (2011) 192 Cal.App.4th 742, 749; McAllister v County of Monterey (2007) 147 Cal.App.4th 253, 281.
As to the statute of limitations, the Court finds that the running of the statute of limitations does not appear “clearly and affirmatively” on the face of the Cross-Complaint and 3|Page
Emshire has sufficiently alleged facts to support at least one doctrine (delayed discovery) that would toll the statute of limitations. See Cross-Complaint at Paragraphs 9, 50-53, 55-57. The Demurrer is overruled on that basis.
California law permits plaintiffs to plead alternative theories of recovery. Adams v. Paul (1995) 11 Cal.4th 583, 593 [“Moreover, a party may plead in the alternative and may make inconsistent allegations”]. Here, the Court finds that the Cross-Complaint does not include duplicative causes of action and the Demurrer is overruled on that basis.
Under California law, it is “improper” to “recast” a breach of contract cause of action as a tort claim under the economic loss doctrine. BFGC Architects Planners, Inc. v. Forum/Mackey Constr., Inc., (2004) 119 Cal.App.4th 848, 853. “That judicially created doctrine bars recovery in negligence for pure economic losses when such claims would disrupt the parties’ private ordering, render contracts less reliable as a means of organizing commercial relationships, and stifle the development of contract law.”
Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 915 (“[T]he rule functions to bar claims in negligence for pure economic losses in deference to a contract between litigating parties.”). The doctrine extends to all tort-based claims “when they arise from—or are not independent of—the parties’ underlying contracts.” Id. at 633; Aas v. Superior Court (2000) 4 Cal.4th 627, 643 (“[A] person may not ordinarily recover in tort for the breach of duties that merely restate contractual obligations”).
Here, the Court finds that unjust enrichment cause of action, pled in the alternative to the breach of contract cause of action (permitted as discussed above; and see Adams v. Paul (1995) 11 Cal.4th 583), is not barred by the economic loss rule and the Demurrer is overruled on this basis.
A cause of action for accounting requires (1) a relationship making an accounting appropriate and (2) a balance due that is unknown and cannot be ascertained without an accounting. Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 179-181. Here, the Court finds that the cause of action for an accounting has been sufficiently pled. See Cross- Complaint at ¶¶9-11, 110-112], and the Demurrer is overruled on this basis.
“The elements of fraud are (1) a misrepresentation of a material fact (false representation, concealment, or nondisclosure); (2) knowledge of falsity; (3) intent to defraud; (4) justifiable reliance; and (5) resulting damage.” Collins v. eMachines (2011) 202 Cal.App.4th 249, 259. “The facts constituting the fraud, including every element of the cause of action, must be alleged ‘factually and specifically’” to survive demurrer. Apollo Capital Fund, LLC v. Roth Capital Partners, LLC (2007) 158 Cal.App.4th 226, 240 [citing Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216-17]. Here, the Court finds that fraud has been sufficiently pled. See Cross- Complaint at ¶¶59-64], and the Demurrer is overruled on this basis.
The Demurrer is overruled in its entirety. Counsel for Emshire shall submit a form of order consistent with this ruling within two weeks and CTL Forest Management, Inc. shall file its Answer to the Cross-Complaint within 10 days’ notice of this order.
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