Dance Fitness Michigan, LLC vs. AKT Franchise, LLC

court grants Defendants’ Motion to Dismiss, and hereby dismisses this action without prejudice.

The court DENIES AS MOOT Defendants’ alternative Motion to Enforce Settlement Agreement.

The court also VACATES the OSC re: Dismissal on Settled Case.

Defendants are ordered to give notice of this ruling to Plaintiffs.

8 30-2023-01345433 Defendants Anthony Geisler (“Geisler”) and LAG Fit, Inc.’s Dance Fitness (“LAG Fit”) (collectively, “Geisler Defendants”) Demurrer to Michigan, LLC vs. Plaintiffs’ Fourth Amended Complaint (“4AC”) is SUSTAINED AKT Franchise, LLC WITHOUT LEAVE TO AMEND as to the First Cause of Action, but OVERRULED as to the California Franchise Investment Law (“CFIL”) claims (Second, Third, Fifth, Sixth, Seventh, Eighth, Tenth, Thirteenth, Fourteenth and Fifteenth Causes of Action). IT IS ORDERED THAT within twenty (20) days of this ruling, Geisler Defendants must file and serve an answer to Plaintiffs’ 4AC.

In the court’s March 9, 2026 Minute Order, the court held that “Defendants Anthony Geisler and LAG Fit, Inc’s (collectively, ‘Geisler Defendants’) Demurrer to Plaintiffs’ [Third Amended Complaint] is SUSTAINED WITHOUT LEAVE TO AMEND as to the First Cause of Action for declaratory judgment[.]” (ROA 422 at p. 6.) Yet, in Plaintiffs’ 4AC, Plaintiffs pled the cause of action again against Defendants (4AC ¶¶ 187-204). Plaintiffs do not contest the court’s dismissal of that claim as to the Geisler Defendants. Accordingly, the court once again SUSTAINS WITHOUT LEAVE TO AMEND Geisler Defendants’ demurrer to the First Cause of Action.

On March 9, 2026, the court also “SUSTAINED WITH LEAVE TO AMEND as to all CFIL causes of action against LAG Fit, Inc.” (Id.) The court stated: Geisler Defendants demur to the TAC on the grounds that Plaintiffs fail to state a claim against Defendant LAG Fit, Inc. because they fail to allege that it “controls,” or is otherwise derivatively liable for the actions and liabilities of AKT Franchise, LLC to be liable under Corporations Code section 31302 for joint and several liability. The only allegation as to LAG Fit, Inc. is: “Geisler and Grabowski indirectly control AKT Franchisor through their ownership interests and/or rights guaranteed in

governing documents of LAG Fit, Inc. (owned solely by Anthony Geisler) . . .” (TAC ¶¶ 231(d), 260(d), 289(d), 323(d), 339(d), 351(d), 365(d), 375(d), 404(d), 424(d), 434(d).) This is insufficient to state facts showing that LAG Fit, Inc. could be liable for the CFIL claims against it under Corporations Code section 31302. The court SUSTAINS WITH LEAVE TO AMEND as to all CFIL causes of action as against Defendant LAG Fit, Inc. (ROA 422 at p. 8.)

In the 4AC, Plaintiffs have added the following allegations: • Lag Fit, Inc., which holds nearly one-fifth of the voting block of Xponential Fitness, Inc., indirectly controls AKT Franchisor through its control of Xponential Intermediate Holdings, LLC, which controls Xponential Fitness LLC, which controls AKT Franchisor. By this voting control, Lag Fit, Inc. is a person who indirectly controls AKT Franchisor under CFIL § 31302. (See, e.g., 4AC ¶ 231(e).) • Lag Fit, Inc. is also wholly owned by Anthony Geisler, who was, at all relevant times at issue in this complaint, the Chief Executive Officer of AKT Franchisor.

Geisler has sole power over the entity and uses it as his corporate instrument. (See, e.g., 4AC ¶ 231(f).) • Lag Fit, Inc. is the alter ego of Geisler because Geisler failed to maintain corporate formalities (e.g., failing to hold board meetings and keep separate minutes) and because Lag Fit, Inc. is an undercapitalized entity used merely as a shell for Geisler’s personal affairs. (See, e.g., 4AC ¶ 231(g).)

Geisler Defendants argue that the allegations in the 4AC still fail to allege that LAG Fit, Inc. controls or is otherwise liable for the actions and liabilities of AKT Franchisor.

CFIL imposes liability on “[e]very person who directly or indirectly controls a person liable under Section 31300 or 31301, every partner in a firm so liable, every principal executive officer or director of a corporation so liable, every person occupying a similar status or performing similar functions, every employee of a person so liable who materially aids in the act or transaction constituting the violation, are also liable jointly and severally with and to the same extent as such person, unless the other person who is so liable had no knowledge of or reasonable grounds to believe in the existence of the facts by reason of which the liability is alleged to exist.” (Cal. Corp. Code § 31302.)

“[A]t the pleading stage, a plaintiff satisfies the control requirement by alleging facts from which an inference can be drawn that the defendant ‘had the power to control the general affairs of the entity primarily liable,” and “had the requisite power to directly or indirectly control or influence the [conduct or policy] which resulted in the primary liability.” (Hellum v. Breyer (2011) 194 Cal. App. 4th 1300, 1317.) “Control is a question of fact that ‘will not ordinarily be resolved summarily at the pleading stage.’” (Id.)

The court finds that Plaintiffs have sufficiently alleged LAG Fit’s indirect control of AKT Franchisor as Plaintiffs have alleged that LAG Fit holds a nearly one-fifth voting block of an entity that indirectly controls AKT Franchisor and is the entity through which Geisler exercises his control of AKT Franchisor. While Geisler Defendants argue that the “minority” voting block does not constitute control of AKT Franchisor, that is a disputed issue of fact that should not be decided at the pleading stage.

As Plaintiffs have adequately alleged CFIL liability as to LAG Fit based on its alleged indirect control of AKT Franchisor, the court OVERRULES Geisler Defendants’ demurrer to the CFIL causes of action.

Geisler Defendants are ordered to give notice of this ruling.

9 30-2025-01454520 MOTION 1 Spencer as Successor-in- Defendants Newrez LLC dba Shellpoint Mortgage Servicing Interest vs. The (“Shellpoint”), The Bank of New York Mellon fka The Bank of Bank of New York Mellon Trustee New York, as Trustee for the Certificateholders of the CWABS Inc., Asset-Backed Certificates, Series 2006-24 ("BNYM") (erroneously sued as "The Bank of New York Mellon Trustee c/o Newrez LLC dba Shellpoint Mortgage Servicing) and Mortgage Electronic Registration Systems, Inc.’s (collectively, “Shellpoint Defendants” or “Defendants”) Demurrer to Plaintiffs’ Second Amended Complaint (“SAC”) is SUSTAINED WITH LEAVE TO AMEND as to the First, Second, Third and Fourth Causes of Action and SUSTAINED WITHOUT LEAVE TO AMEND as to the Fifth, Sixth and Seventh Causes of Action improperly added by Plaintiffs to the SAC without leave of court.

IT IS ORDERED THAT WITHIN twenty (20) days of this ruling, Plaintiffs shall file and serve Defendants an amended complaint.

A. New Causes of Action Added Without Leave of Court

“Following an order sustaining a demurrer or a motion for judgment on the pleadings with leave to amend, the plaintiff may amend his or her complaint only as authorized by the court's order.” (Harris v. Wachovia Mortg., FSB (2010) 185 Cal. App. 4th 1018, 1023.) Here, the court only granted “leave to amend as to all causes of action by [Plaintiffs],” the court did not authorize the addition of any new causes of action. (ROA 169 at p. 2.) Yet Plaintiff added three causes of action for slander of title, violation of UCC § 9-210, and unfair business practices. The court SUSTAINS both Shellpoint Defendants and Auction.com’s demurrer to these causes of action WITHOUT LEAVE TO AMEND as they were added by Plaintiffs without leave of court. The court also SUSTAINS Defendants’ Demurrer to these causes of action based on the additional grounds stated below.

B. Grounds for Finding the Subject Adverse Claims Unenforceable, Void or Voidable

In this action, Plaintiffs allege that the following instruments are adverse claims that cloud Plaintiffs’ title to the subject property: (a) Deed of Trust recorded October 26, 2006, Document No. 2006000724403; (b) Assignment of Deed of Trust recorded August 22, 2011, Document No. 2011000411728 — void ab initio as set forth herein; (c) Substitution of Trustee purporting to appoint The Mortgage Law Firm, PC as substitute trustee — void ab initio as set forth herein; (d) All Notices of Default recorded after October 26, 2006; and (e) All Notices of Trustee's Sale recorded after October 26, 2006, including the Notice scheduling foreclosure for May 18, 2026. (SAC ¶ 40.)

Plaintiffs contend that each adverse claim identified in the SAC is void or unenforceable for one or more of the following independent reasons: (a) The Assignment (Document No. 2011000411728) was executed nearly five years after the CWABS 2006-24 Trust closed on December 29, 2006 - confirmed by Exhibit J - making it void under New York Estates, Powers and Trusts Law section 7-2.4 and under Glaski v. Bank of America (2013) 218 Cal.App.4th 1079;

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