Potter v. Gustafson

Plaintiff has not waived the defect in service by, for example, filing an opposition to the motion.

Given the defect in service, the Court cannot consider the merits of the motion. The motion of defendant Xian Li for an order requiring plaintiff Jun Li to furnish security under Corp. Code § 17709.02 is DENIED for improper electronic service on the self-represented plaintiff.

6. Potter v. Gustafson 26-1554580 (Continued) 7. Mkhitarian v. Mustafiz 25-1475287 Before the Court is a demurrer by defendant Tanim Mustafiz (Defendant) on the Second Amended Complaint (SAC) of plaintiff Albert Mkhitarian (Plaintiff). For the reasons set forth below, the demurrer is SUSTAINED as to the 1st cause of action without leave to amend.

Defendant shall file his answer, if any, within 10 days.

Plaintiff failed to cure the defect in the prior pleading. In the SAC, Plaintiff alleges Defendant was an equal shareholder of TestJet with Plaintiff, and adds that Defendant “was also an officer and director of TestJet, and, by reason of such, owed fiduciary duties to Plaintiff.” (SAC ¶ 21.) These facts are still insufficient to establish the existence of a fiduciary relationship giving rise to breach of fiduciary duty. (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith (1998) 68 Cal. App. 4th 445, 483 [elements].)

Corporate officers and directors stand in a fiduciary relation to both the corporation and its stockholders. (Bancroft-Whitney Co. v. Glen (1966) 64 Cal.2d 327, 345.) There is a “strong public interest in assuring that corporate officers, directors, majority shareholders and others are faithful to their fiduciary obligations to minority shareholders.” (Meister v. Mensinger (2014) 230 Cal.App.4th 381, 395 [emphasis added], citing Steinberg v. Amplica, Inc. (1986) 42 Cal.3d 1198, 1210; see e.g., Persson v.

Smart Inventions, Inc. (2005) 125 Cal.App.4th 1141, 1146-1147, 1156-1162 [no fiduciary duty arose from a de facto partnership or voluntary assumption of fiduciary obligations, despite the defendant’s status as president, secretary and operational manner].) Here, however, Plaintiff does not allege status as a minority shareholder or other circumstances that may give rise to a fiduciary duty of a corporate officer or director.

Nor does Plaintiff allege sufficient facts to establish a confidential relationship giving rise to a fiduciary duty. (Richelle v. Roman Catholic Archbishop (2003) 106 Cal.App.4th 257, 271 [elements].) Superior knowledge or unequal access to an allegedly concealed fact might support Plaintiff’s separate fraud theories, but it does not establish the vulnerability required for a confidential relationship. There is no stronger or weaker party under the circumstances of this case. The SAC alleges equal ownership and repeatedly refers to the parties as business “partners,” suggesting equal power. “Before a person can be charged with a fiduciary obligation, he must either knowingly undertake to act on behalf and for the benefit of another, or must