Graham, Michael vs. CA Farms, LLC

rule 3.1312(a), no further written order is necessary. The minute order adopting this tentative ruling will become the order of the court and service by the clerk will constitute notice of the order. Court reporters are usually not available for law and motion matters in the civil division. The parties and counsel must provide their own reporter if they want a transcript of the proceedings.

Re: Graham, Michael vs. CA Farms, LLC Case No.: Lead: VCU3245716; consolidated with PCU325122 Date: August 13, 2026 Time: 8:30 A.M. Dept. 1-Honorable David C. Mathias Motion: Demurrer and Motion to Strike Tentative Ruling: To overrule the demurrer. To grant the motion to strike, with leave, as to the words "treble damages" in paragraph 110 and the Grahams' prayer for "[t]reble damages under Penal Code Sec. 496," and, in all other respects, to deny the motion.

This is a demurrer and motion to strike by cross-defendant Alex Aretakis, targeted at the cross-complaint of Michael and Cynthia Graham (and other named cross-complainants) filed in PCU325122, which is now consolidated with these proceedings. Aretakis challenges 14 of the cross-complaint's 17 causes of action and moves to strike several portions.

I. DEMURRER

Aretakis contends that while the cross-complaint "tells a sprawling story of alleged financial misconduct by Ron Cook and entities he controlled, ... it does not plead facts showing that Alex Aretakis personally [engaged in the wrongful conduct alleged]." Aretakis is correct, so far as the bulk of the allegations under the heading "FACUAL ALLEGATIONS" in the cross-complaint, but further allegations in the cross-complaint, specifically at subparagraphs (e) through (k) of paragraph 97, contain sufficient specificity as to wrongdoing on the part of Aretakis at the pleading stage. According, the demurrer is overruled in its entirety. Each of the challenged causes of action is addressed below.

First & Second Causes of Action - Intentional Misrepresentation & Concealment

A cause of action for intentional misrepresentation must be supported by allegations of a false representation by a defendant, relied upon by the plaintiff to their detriment. (Service by Medallion, Inc. v. Clorox Co. (1996) 44 Cal.App.4th 1807, 1816 [52 Cal.Rptr.2d 650].) Additionally, because "[f]raud allegations ' "involve a serious attack on character," [they must be] pleaded with specificity. ... The particularity requirement demands that a plaintiff plead facts which ' " 'show how, when, where, to whom, and by what means the representations were tendered.' " ' (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469 [169 Cal.Rptr.3d 619], citations omitted.)

There are "certain exceptions which mitigate the rigor of the rule requiring specific pleading of fraud," including that "less specificity is required when 'it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy.' " (Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 217 [197 Cal.Rptr. 783, 673 P.2d 660](Committee), citations omitted.) Additionally, in circumstances where, as here, myriad representations are alleged as part of a coordinated scheme over a lengthy period of many years, "considerations of practicality enter in" such that a serial listing of alleged misrepresentations specified by time, place and manner "provide less effective notice and [are] less useful in framing the issues [as compared to] a shorter, more generalized version." (Ibid.)

Ultimately, the court considers the particularity requirements to fraud claims in light of the "two purposes" it serves. (Id., at p. 216.) "The first is notice to the defendant, to 'furnish the defendant with certain definite charges which can be intelligently met.' " (Ibid., citations omitted.) Additionally, "[t]he pleading of fraud ... is also the last remaining habitat of the common law notion that a complaint should be sufficiently specific that the court can weed out nonmeritorious actions on the basis of the pleadings. Thus the pleading should be sufficient ' "to enable the court to determine whether, on the facts pleaded, there is any foundation, prima facie at least, for the charge of fraud." ' " (Id., at pp. 216-217, citations omitted.)

As to concealment claims, "the requirement that '[f]raud must be pleaded with specificity ...' applies equally to a cause of action for fraud and deceit based on concealment. [Citation.]" (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1472 [169 Cal.Rptr.3d 619].) Whereas intentional misrepresentation requires specific allegation of an affirmative false representation, however, concealment requires allegation of the "concealment or suppression of a material fact ... by a defendant with a duty to disclose ... ." (Rattagan v.

Uber Technologies, Inc. (2024) 17 Cal.5th 1, 40 [324 Cal.Rptr.3d 433, 553 P.3d 1213].) Accordingly, it is harder to apply the rule of specificity with respect to concealment claims. (Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384 [89 Cal.Rptr.3d 659] ["As plaintiffs accurately respond ... 'How does one show "how" and "by what means" something didn't happen, or "when" it never happened, or "where" it never happened?'"].)

The court finds that the first two causes of action of the cross-complaint, for intentional misrepresentation and concealment, are plead sufficiently in accordance with these requirements. With regard to the intentional misrepresentation claim, while the "FACTUAL ALLEGATIONS" contain sparse, vague and inconclusive reference to Aretakis, the allegations in subparagraphs (e) through (k) of paragraph 97 contain express, specific and reasonable particularized allegations of Aretakis's direct engagement in affirmative fraudulent misrepresentation directed at the Grahams.

These allegations "point out exactly how [and] in what manner [Aretakis has] transgressed" such that the Grahams sufficient place a "finger squarely and directly upon whatever dereliction is relied upon." (Lavine v. Jessup (1958) 161 Cal.App.2d 59, 69 [326 P.2d 238].) In so doing, these allegations "furnish the defendant with certain definite charges which can be intelligently met" (Committee, supra, 35 Cal.3d at p. 217) and state a claim, that, accepting the allegations as true (Blank v. Kirwan (1985) 39 Cal.3d 311, 318 [216 Cal.Rptr. 718, 703 P.2d 58]) is not, on the face of the pleading, unmeritorious (Committee, supra, 35 Cal.3d at p. 217).

As to the concealment claim, the allegations, which include the incorporated allegations of the intentional misrepresentation cause of action, are sufficiently particular, given the allegations that Aretakis was amongst a group of cross-defendants that "acted as the Grahams' mortgage brokers and investment advisors with respect to the Huron, Armona, Supermarket, and Gas Station Loans, and all other hard-money loans," as well as being, along with Cook, the Grahams' "partners in Prosperity Farms," "personally and through CA Farms." The Grahams sufficiently allege a relationship giving rise to a duty to disclose, and, moreover, that Aretakis made representations in connection with the transactions described in subparagraphs (e) through (k) of paragraph 97, such that nondisclosure of other facts was deceptive. Accordingly, the demurrer to the first two causes of action is overruled.

Third, Fourth, Eighth, Ninth & Twelfth Causes of Action - Property-Based Claims

Aretakis contends "[t]he Third, Fourth, Eighth, Ninth, and Twelfth Causes of Action all depend on the same missing predicate: that Mr. Aretakis personally took, received, retained, controlled, benefited from, or knowingly assisted in taking identifiable property belonging to the Grahams." Aretakis sets out more specific arguments with regard to these claims, which are addressed, in turn, below.

A. Third and Fourth Causes of Action

The third and fourth causes of action are for violation of Penal Code section 496 (third cause of action) and conversion (fourth cause of action). "Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff's ownership or right to possession of the property; (2) the defendant's conversion by a wrongful act or disposition of property rights; and (3) damages." (Lee v. Hanley (2015) 61 Cal.4th 1225, 1240 [191 Cal.Rptr.3d 536, 354 P.3d 334].)

"[Penal Code] Section 496, subdivision (a) (section 496(a)) defines the criminal offense of what is commonly referred to as receiving stolen property," and "[s]ection 496(c) ... articulates a right to special civil remedies when a violation of section 496(a) has occurred. Subdivision (c) ... states that any person who has been injured by a violation of section 496(a) 'may bring an action for three times the amount of actual damages, if any, sustained by the plaintiff, costs of suit, and reasonable attorney's fees.' " (Siry Investment, L.P. v. Farkhondehpour (2022) 13 Cal.5th 333, 346-347 [296 Cal.Rptr.3d 1, 513 P.3d 166] (Siry).)

Both claims are notable as to the intent requirement each requires. "To prove a cause of action for conversion, the plaintiff must show the defendant acted intentionally to wrongfully dispose of the property of another." (Duke v. Superior Court (2017) 18 Cal.App.5th 490, 508 [226 Cal.Rptr.3d 807].) Similarly, subdivision (c) of Penal Code section 496 provides for special civil remedies "when property has been obtained in any manner constituting theft." (Siry, supra, 13 Cal.5th at p. 343.) These standards, however, are not the exact same.

A theft claim under section 496 requires more. "[C]onversion is a strict liability tort. It does not require bad faith, knowledge, or even negligence; it requires only that the defendant have intentionally done the act depriving the plaintiff of his or her rightful possession." (Voris v. Lampert (2019) 7 Cal.5th 1141, 1158 [250 Cal.Rptr.3d 779, 446 P.3d 284].)

By contrast, with respect to a section 496 claim, "not all commercial or consumer disputes alleging that a defendant obtained money or property through fraud, misrepresentation, or breach of a contractual promise will amount to a theft. To prove theft, a plaintiff must establish criminal intent on the part of the defendant beyond 'mere proof of nonperformance or actual falsity.' This requirement prevents ' "[o]rdinary commercial defaults" ' from being transformed into a theft. If misrepresentations or unfulfilled promises 'are made innocently or inadvertently, they can no more form the basis for a prosecution for obtaining property by false pretenses than can an innocent breach of contract.' " (Siry, supra, 13 Cal.5th at pp. 361-362.)

The court finds that, notwithstanding the vagaries of the "FACTUAL ALLEGATIONS" and the conclusory nature of the allegations under the headings of the third and fourth causes of action, the allegations in subparagraphs (e) through (k) of paragraph 97, which are incorporated under the third and fourth causes of action, sufficiently establish the elements of a section 496 violation and conversion. These allegations support the conclusion that Aretakis acted with planning and deliberation, reflecting the requisite criminal intent, in depriving the Grahams of their money and property through various fraudulent schemes. Accordingly, the demurrer to the third and fourth cause of action is overruled.

B. Eighth Cause of Action - Quantum Meruit / Unjust Enrichment

Aretakis attacks the eighth cause of action by pointing out that quantum meruit provides for the recovery for the reasonable value of services (it does, Maglica v. Maglica (1998) 66 Cal.App.4th 442, 449 [78 Cal.Rptr.2d 101]) and that the cross-complaint doesn't contain allegations that the Grahams rendered services to Aretakis for which they should be equitably permitted recovery. A fair reading of the cross-complaint, however, is that the eighth cause of action is more properly characterized as being for unjust enrichment. "Unjust enrichment is not a cause of action, however, or even a remedy, but rather ' " 'a general principle, underlying various legal doctrines and remedies' " ... . [Citation.] It is synonymous with restitution.' " (McBride v. Boughton (2004) 123 Cal.App.4th 379, 387 [20 Cal. Rptr. 3d 115].)

Here, the Grahams generally allege they "conferred benefits on Cross-Defendants [including Aretakis] (funds, guarantees, property interests) at Cross-Defendants' request, which Cross-Defendants unjustly retained without compensation, including misappropriated principals, profits, and proceeds," and "[i]t would be unjust for Cross-Defendants to retain these benefits without restitution." In this respect, the Grahams' eighth cause of action is duplicative of its fraud and theft claims, but that is not, itself, fatal. "[T]he fact that unjust enrichment allegations are 'duplicative of or superfluous to . . . other claims . . . is not grounds for dismissal.' [Citation.]" (Lusson v. Apple, Inc. (N.D.Cal. June 20, 2016, No. 16-cv-00705-VC) 2016 U.S.Dist.LEXIS 199494, at *9.)

Aretakis's only contention, as to the unjust enrichment claim specifically, is that "the Grahams provide insufficient facts to establish that Mr. Aretakis was in fact enriched at all," and "[a]t most, the Cross-Complaint states that he was 'benefitting' from Mr. Cook's alleged misconduct." The court finds, however, the allegations in subparagraphs (e) through (k) of paragraph 97 are sufficient to support the claim in the respect challenged by Aretakis. Accordingly, the demurrer is overruled to the eighth cause of action.

C. Ninth Cause of Action - Money Had and Received

Aretakis challenges the ninth cause of action on the similar ground that "the pleading does not identify any specific money Mr. Aretakis received or retained for the Grahams' benefit." (See Avidor v. Sutter's Place, Inc. (2013) 212 Cal.App.4th 1439, 1454 [151 Cal.Rptr.3d 804] [describing an action for money had and received].) Once again, the court finds, however, the allegations in subparagraphs (e) through (k) of paragraph 97 are sufficient to support the claim in the respect challenged by Aretakis and, accordingly, overrules the demurrer to the ninth cause of action.

D. Twelfth Cause of Action - Elder Abuse under Welf. & Inst. Code Sec. 15600

Aretakis challenges the Grahams' elder abuse cause of action on the similar grounds as the prior challenges, asserting "[a]s with the Penal Code section 496 claim, the Cross-Complaint does not identify the particular property Mr. Aretakis took or retained, or the specific act by which he did so." Once again, the court finds the allegations in subparagraphs (e) through (k) of paragraph 97 are sufficient to support the claim in the respect challenged by Aretakis and, accordingly, overrules the demurrer to the twelfth cause of action

Fifth & Sixth Causes of Action - Aiding and Abetting, as to Fraud and Conversion

Aretakis attacks the fourth and fifth "aiding and abetting" causes of action--which are essentially conspiracy claims packaged with the fraud and theft claims--on the same grounds as he attacks the fraud and theft claims. (See AREI II Cases (2013) 216 Cal.App.4th 1004, 1021 [157 Cal.Rptr.3d 368] [" 'Conspiracy,' is not a cause of action, but a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration.' [Citation.] "].) In light of the court's determinations above, the demurer to the fifth and sixth causes of action is overruled.

Seventh Cause of Action - Breach of Fiduciary Duty

The demurrer to the seventh cause of action is overruled. Aretakis solely challenges the sufficiency of the allegations in establishing that he had a fiduciary duty to the Grahams. Aside from the challenged allegations about Aretakis being a lawyer, the cross-complaint alleges Aretakis is a minority owner of CA Farms, which, in turn, is 50% owner of Prosperity Farms; and, further, with respect to each of Prosperity Farms, LLC; Prosperity Farms Ranch 20, LLC; and Prosperity Development, LLC, that "Mr.

Cook, Aretakis, and CA Farms" hold a "50% interest and have acted as managers." The court accepts these allegations as true at the demurrer stage (Blank v. Kirwan (1985) 39 Cal.3d 311, 318 [216 Cal.Rptr. 718, 703 P.2d 58]) and finds that they are sufficient to establish a fiduciary duty owed by Aretakis to the Grahams vis-à-vis their relationship as partners in the three identified entities.

Tenth Cause of Action - Indemnity

Aretakis contends the tenth cause of action for indemnity fails "because the Cross-Complaint does not plead facts establishing any joint legal obligation for which Mr. Aretakis could be required to indemnify the Grahams." "To state a claim for equitable indemnity, a defendant must allege the same harm for which he may be held liable is properly attributable -- at least in part -- to the cross-defendant." (Platt v. Coldwell Banker Residential Real Estate Services (1990) 217 Cal.App.3d 1439, 1445, fn. 7 [266 Cal.Rptr. 601].)

The court finds the Grahams allege a harm--"liabilities in the Conterra Action, Compeer Action, and BOTS Action"--they face that is properly attributable, at least in part, to Aretakis by virtue of his wrongful conduct as identified with sufficient specificity in subparagraphs (e) through (k) of paragraph 97. Accordingly, the demurrer to the tenth cause of action is overruled.

Thirteenth, Fourteenth and Fifteenth Cause of Action - Judicial Dissolution of Prosperity Farms, LLC; Prosperity Farms Ranch 20, LLC; and Prosperity Development, LLC

The demurrer is overruled to the thirteenth through fifteenth causes of action, for judicial dissolution of Prosperity Farms, Prosperity Farms Ranch 20, and Prosperity Development. The basis of the demurrer is that the cross-complaint does not allege Aretakis is "a member or manager of any entity to be dissolved." The cross-complaint, however, alleges Aretakis is a minority owner of CA Farms, which, in turn, is 50% owner of Prosperity Farms; and, further, with respect to all three entities, that "Mr. Cook, Aretakis, and CA Farms" hold a "50% interest and have acted as managers." The court accepts these allegations as true at the demurrer stage (Blank v. Kirwan (1985) 39 Cal.3d 311, 318 [216 Cal.Rptr. 718, 703 P.2d 58]) and finds that they establish that joinder of Aretakis under these causes of action is appropriate. (See Code Civ. Proc., Sec. 389.)

II. MOTION TO STRIKE

Aretakis moves to strike various portions of the cross-complaint on the grounds that "[t]he claims here fall into several limitation periods," which, Aretakis maintains, had expired at the time of filing of the cross-complaint. On this basis, Aretakis moves to strike: 1. Paragraphs 32 through 39 (events between 2014 and 2018 concerning acquisition and sale of a pistachio orchard); 2. Paragraph 40 (concerning subsequent property acquisitions of Prosperity Farms in 2019); 3. Paragraph 43 (concerning acquisition of property associated with Prosperity Development, in 2021); 4.

Paragraphs 44 and 45--but only "to the extent asserted as a basis for the Eighth Cause of Action for Quantum Meruit/Unjust Enrichment or Ninth Cause of Action for Money Had and Received against Mr. Aretakis" (these paragraphs concern Cook's proposal in or around the end of 2023 for Prosperity Farms to acquire 400 acres of farmland abutting Tulare 22, and the eventual acquisition of that property in February 2024); and 5. Paragraphs 47 through 50--also, only "to the extent asserted as a basis for the Eighth Cause of Action for Quantum Meruit/Unjust Enrichment or Ninth Cause of Action for Money Had and Received against Mr.

Aretakis" (these paragraphs concern events associated with the "Gas Station Loan," occurring in and after June 2023); and 6. From paragraph 110, the words "treble damages" (as sought under the Grahams' Penal Code section 496 cause of action) and the Grahams' prayer for "[t]reble damages under Penal Code Sec. 496 (Aretakis contends the request for section 496 penalties is time-barred).

The court finds Aretakis's motion, in the above respects, constitutes an unauthorized attack on entire causes of action in the cross-complaint (Ferraro v. Camarlinghi (2008) 161 Cal.App.4th 509, 528 [75 Cal.Rptr.3d 19]) and, therefore, denies the motion as to the above-listed paragraphs--except as to the allegations and prayer concerning "treble damages" under Penal Code section 496. The Graham's Penal Code section 496 claim presents, in a critical respect, as a claim for relief, rather than solely a cause of action, in that the section describes, in subdivision (c), the "action" that may be brought for a violation of subdivision (a) of section 496 (proscribing the conduct of theft) solely in terms of the remedy such an action permits: "for three times the amount of actual damages, if any, sustained by the plaintiff, costs of suit, and reasonable attorney's fees."

For this reason, the court does not find a motion to strike unauthorized as directed to the section 496 claim.

The court additionally finds that the related targeted language of paragraph 110 ("treble damages") and prayer for "treble damages" must properly be stricken, albeit with leave to amend, as it agrees with Aretakis that a claim for such damages is subject to a one-year limitations period and the complaint supports accrual of this claim outside that period, and no delayed discovery allegations that would otherwise support the claim for relief.

Code of Civil Procedure section 340, subdivision (a), provides a one-year limitations period for "[a]n action upon a statute for a penalty or forfeiture, if the action is given to an individual, or to an individual and the state, except if the statute imposing it prescribes a different limitation." Subdivision (a) of section 340 embodies "[t]he ' "settled rule" ' in California ... that statutes which provide for damages that are in ' "addition[] to actual losses incurred," ' or 'not based upon actual injury,' are generally ' "considered penal in nature [citations], and thus governed by the one-year period of limitations ... ." ' " (Hypertouch, Inc. v.

ValueClick, Inc. (2011) 192 Cal.App.4th 805, 842 [123 Cal.Rptr.3d 8] (Hypertouch), citations omitted.) This provision applies in situations "where 'an individual is allowed to recover against a wrong-doer, as a satisfaction for the wrong or injury suffered, and without reference to the actual damage sustained, or [where there is] . . . punishment for some act which is in the nature of a public wrong.' [Citation.]" (Low v. Lan (2002) 96 Cal.App.4th 1371, 1381 [118 Cal.Rptr.2d 60].)

The court finds that Penal Code section 496, subdivision (c), is properly viewed as providing for precisely this type of recovery against a wrong-doer, as a sanction for the wrong or injury suffered, and as punishment for an act in the nature of a public wrong, and that the Grahams' claim is properly subject to a one-year limitations period. The court is not persuaded, as the Grahams argue, that section 340 does not apply because "treble damages" are discretionary. (See Hypertouch, supra, 192 Cal.App.4th at p. 842 ["Code of Civil Procedure section 340 does not apply if the award of a penalty is discretionary, rather than mandatory"].)

The Grahams' contention is that the award is discretionary because the injured party "may bring an action" under subdivision (c) of section 496. Obviously, however, the discretion that is pertinent here is the court's with regard to whether to make an award on the requisite showing. The court sees none of the requisite discretion in subdivision (c) of section 496.

Accordingly, the motion to strike is granted as the words "treble damages" in paragraph 110 and the Grahams' prayer for "[t]reble damages under Penal Code Sec. 496." The Grahams are granted leave to amend, however, within 10 days of notice of ruling, as a reasonable possibility appears to remain that they can plead delayed discovery to cure the defect with the stricken claim for relief.

Aretakis additionally moves to strike other portions of the complaint relating to "punitive damages." On this basis, Aretakis moves to strike paragraph 146, "as to Mr. Aretakis." This paragraph states, in conclusory terms patterned from Civil Code section 3294, allegations intended to support punitive damages. Additionally, Aretakis moves to strike the Grahams' prayer, "as to Mr. Aretakis," for "Punitive damages for Cross-Defendants' malicious, oppressive, and fraudulent conduct." Although the identified allegations at paragraph 146 are, as Aretakis argues, conclusory and insufficient to support a claim for punitive damages by themselves, the Grahams other allegations, particularly those at subparagraphs (e) through (k) of paragraph 97, provide the requisite support for punitive damages at the pleading stage.

Accordingly, the motion to strike is denied with respect to paragraph 146 and the Grahams' prayer for punitive damages.

If no one requests oral argument, under Code of Civil Procedure section 1019.5(a) and California Rules of Court, rule 3.1312(a), no further written order is necessary. The minute order adopting this tentative ruling will become the order of the court and service by the clerk will constitute notice of the order. Court reporters are usually not available for law and motion matters in the civil division. The parties and counsel must provide their own reporter if they want a transcript of the proceedings.

Visalia Division Honorable Bret D. Hillman Presiding- Department 2 Examiner notes for probate matters calendared August 12, 2026, that allow for posting: Status: Recommended for Approval (RFA), Appearance Required or Recommended, Approval Conditional Upon, etc. Case Number | Case Name | Type | Status