Enayati v. K&B Surgical Center, LLC

inquire as to that issue. The deadline for service was August 20, but plaintiff states he did not get it until August 25. That gave him only one court day to file his reply. However, defendant attaches a proof of service stating that the opposition was served by email on August 18. If that POS is accurate--and there ought to be metadata to prove it--then it was timely. Worse, the court will want to know why plaintiff accuses defendant of lying in that regard. On the other hand, if the POS is not accurate, the defendant will have some explaining to do as to why the person serving the papers committed perjury.

That said, the opposition did not really change the outcome for the reasons below. Plaintiff wants to add claims against defendants by adding details and asserting statutory violations. Leave to amend is freely granted absent prejudice. (Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739.) This is plaintiff's third attempt at an amended pleading. Plaintiff still fails to comply with Rule of Court 3.1324. That requires that he include a copy of the amended complaint, state the allegations that he proposes to delete, and state what allegations he proposes to add.

This motion does not do that. And there is no redlined copy of the proposed pleading that might otherwise satisfy the requirement. And the court will not grant the motion based on attempts to cure the problem in reply. Further, the causes of action are not numbered, as required in Rule 2.112. Plaintiff should try again and try to follow the rules. The likelihood is that if he can file a proper motion, it will be granted given the liberality standard articulated above. But the fact is that if this is important enough for plaintiff to pursue, he can spend the time and effort to comply with the rules.

The court notes that other self-represented litigants are able to do so.

demurrer to the complaint. Plaintiffs oppose. Plaintiffs allege that they were once members of K&B Surgical Center, LLC. According to the complaint, they received various distributions over time, but the distributions ceased in early 2015. Plaintiffs assert that the reason is that defendants falsely represented that the enterprise was no longer profitable. In 2019, plaintiff sought certain financial statements, but they were not forthcoming. Worse, plaintiffs assert that defendants screamed obscenities in response and threatened to evict Enayati.

Plaintiffs allege that the relationship with defendants deteriorated, leading to retaliation and a hostile environment. In March 2024, plaintiffs state that the enterprise offered to buy out plaintiffs' membership interests at 30 cents on the dollar for each investment. K&B valued the enterprise at $4,549,000, which plaintiffs believed was unreasonably low. The consultant that came up with the number stated that it did not audit, review, or compile the financial information upon which the valuation was based, and plaintiffs contend that the financial information was likely false.

Upon seeing the valuation, plaintiffs sought the underlying data. In response, some limited information was

provided. Plaintiffs state that some of these documents, including tax returns, did not disclose insurance proceeds received, and that it appeared that there was an illegal kickback scheme. Plaintiffs state that when they asked about these issues, defendants provided no satisfactory answers, but they did offer a somewhat better deal, although at the same time they claimed that some plaintiffs had violated a covenant in the entity's operating agreement. Plaintiffs rejected the offer, and later in 2024 plaintiffs were told that their memberships had been terminated.

That led to the instant suit. Defendants claim that the complaint is uncertain. It is not. (Butler v. Sequeira (1950) 100 Cal.App.2d 143.) The demurrers to the first through fourth causes of action are for breach of contract. Defendants rely on outdated authority, contending that plaintiffs must either attach a copy of the contract or plead the terms that were breached verbatim. That is no longer the law. (Construction Protective Services, Inc. v. TIG Specialty Insur. Co. (2002) 29 Cal.4th 189.)

The court does not know why defendants cited to authority that is no longer good law based on a Supreme Court decision over two decades ago. Defendants also state that the contract claims are time barred. The statute of limitations is four years from the date the cause of action accrues. (Code Civ. Proc. Sec. 337.) Defendants state that the causes of action accrued in 2015, which is more than four years before suit was filed, because that is when distributions ceased. The court disagrees. Plaintiffs contend that the K-1 forms that were provided in that year and those that followed were false, and thus they had no reason to believe that the contract was being breached.

Rather, they state, they did not discover the problem until they saw the low valuation amount in 2024 and then saw some of the financial documents later that year. The discovery rule does apply to breach of contract cases, especially where, as here, there are flavors of fiduciary duty issues. Plaintiffs have adequately alleged that they had no reason to bring suit simply because distributions stopped; rather, they were entitled to believe defendants' claims that the enterprise just ceased to be profitable. (Gryczman v. 4550 Pico Partners, Ltd. (2003) 107 Cal.App.4th 1.)

The demurrers to these causes of action are OVERRULED. The breach of fiduciary duty cause of action fails for the same reason. Defendants were allegedly fiduciaries who had an affirmative obligation to provide truthful and accurate statements to plaintiffs, and at a minimum had a duty not to deprive plaintiffs improperly of a fair distribution. For the same reason that plaintiffs have alleged that they were not on notice of the problem until 2024, as discussed above, they were not on notice as to the fiduciary duty cause of action.

Thus, whether the statute is three years or four (which will depend on whether the breach was fraudulent or not), it is timely. The demurrer is OVERRULED. The sixth cause of action is for failure to keep and provide

accurate records. Defendants argue that there was a breach in 2019, when plaintiffs asked for records and did not get them. But that is not really what the complaint says. That may have started in 2019, but it continued over time. Further, the complaint alleges that when documents were demanded in 2019, plaintiffs were told that they would be forthcoming shortly and that the accountant was working on it. Even where defendants allegedly yelled obscenities, the statutory period is not barred. The duty to keep and produce financial records as required under the operating agreement continues over time.

Even if some of the failures to produce in 2019 are in fact time barred, others are not. And because the entire cause of action is not vulnerable to demurrer, the demurrer is OVERRULED. The seventh cause of action is for breach of the California securities law, Corporations Code section 25501. But defendants do not engage with the legal analysis here, and the court need not do defendants' research for them. Defendants also state that plaintiffs have not specified the allegedly false statements with adequate specificity.

The court disagrees. The court believes that sufficient specificity has been alleged. Accordingly, this cause of action is not time barred and it is not uncertain. The demurrer is OVERRULED. Plaintiffs also allege a violation of the Unfair Competition Law. Defendants claim that this cause of action fails because plaintiffs has not alleged the facts sufficiently. The court disagrees. The unfair and allegedly fraudulent practices have been adequately pled. The demurrer is OVERRULED. Defendants state that the ninth, tenth, and eleventh causes of action fail because they sound in fraud and are not pled with particularity.

The court disagrees. There is adequate detail. Plaintiffs allege that defendants supplied false K-1 forms. That, for example, is enough. The demurrers are OVERRULED. Defendants state that the conversion claim fails because one cannot just convert money. While that is true, where there is a possessory interest in a specific identifiable sum, it can be converted. That is the case here, where plaintiffs allege that the profit distributions were converted as well as their membership interests. The demurrer is OVERRULED.

The thirteenth cause of action is for unjust enrichment. The court agrees that this is not a cause of action. The demurrer is SUSTAINED WITHOUT LEAVE TO AMEND on that basis only. The remedy of restitution, however, remains viable. The fourteenth cause of action is for declaratory relief. The court agrees that this cause of action might ultimately become duplicative, but it does no mischief. As to the merits, it stands or falls with the other claims. Accordingly, the demurrer

is OVERRULED. Finally, the sixteenth cause of action is for an accounting. Defendants state that this is not really all that complicated such that a fixed sum cannot be alleged. The court disagrees, at least at the pleading stage. And there is no time bar, either. The demurrer is OVERRULED. The motion to strike is DENIED. But defendants can rest assured that plaintiffs will not be awarded attorneys' fees absent a basis to do so. As of now, it is too early to tell. Defendants have 10 court days to answer. Case Number: 26SMCV04611 Hearing Date: September 2, 2026 Dept: I The court is still waiting to see if there is going to be a 170.6 challenge. Because this matter was continued to allow the challenge to be made, assuming plaintiff gave notice of the ruling, the court is prepared to rule today if there is no such challenge. | Home -->)" -->