ERIC AND MERILEE IVERSON, ON BEHALF OF THEMSELVES, INDIVIDUALLY, AND AS GUARDIANS TO THEIR MINOR CHILDREN (A.I.(1)..., et al. vs SND NATIONAL MINISTRY CORPORATION, et al.

2024CUFR021250: ERIC AND MERILEE IVERSON, ON BEHALF OF THEMSELVES, INDIVIDUALLY, AND AS GUARDIANS TO THEIR MINOR CHILDREN (A.I.(1)..., et al. vs SND NATIONAL MINISTRY CORPORATION, et al. 09/10/2026 in Department 44 Demurrers to Fourth Amended Complaint Case Management Conference

Department Rules. Parties and counsel shall follow the Department 44 rules and Zoom protocols, available at https://www2.ventura.courts.ca.gov/Courtroom/C44.

Remote Appearances. The Court allows Zoom appearances as a courtesy to parties and counsel. The Court does not accommodate Court Call appearances. You MUST register by 3:00 p.m. the court day before your hearing or you will be DENIED entry to the hearing:

ZOOM Registration Link:

https://ventura-courts-ca.zoom.us/meeting/register/iqN7uhQSQMuOqs-9TQXgEQ

No advance notice is required to appear in person.

Tentative Rulings. Oral argument should address the tentative decision. To submit on the tentative decision, email courtroom44@ventura.courts.ca.gov before 8:00 a.m. on the hearing date, copying all other parties. Use the subject line “SUBMISSION ON TENTATIVE”, [Case Number], [Case Title] and [Party]. If not all parties submit, the hearing will proceed, and the tentative ruling may change.

The Court may adopt, modify or reject the tentative ruling after hearing. The tentative ruling has no legal effect unless and until adopted by the Court.

Nature of Proceedings:

1) Defendant Anthony Guevara’s Demurrer to Plaintiffs’ Fourth Amended Complaint

2) Defendants SND National Ministry Corporation and La Reina’s Demurrer to, or Motion to Strike Portions of, Plaintiffs’ Fourth Amended Complaint

3) Case Management Conference

Tentative Rulings:

1) As to Defendant Anthony Guevara’s Demurrer:

Guevara’s request for judicial notice is GRANTED.

2024CUFR021250: ERIC AND MERILEE IVERSON, ON BEHALF OF THEMSELVES, INDIVIDUALLY, AND AS GUARDIANS TO THEIR MINOR CHILDREN (A.I.(1)..., et al. vs SND NATIONAL MINISTRY CORPORATION, et al.

Guevara’s demurrer to the Fourth Amended Complaint is SUSTAINED without leave to amend as to the first cause of action for fraudulent misrepresentation; OVERRULED as to the second cause of action for fraudulent concealment; and SUSTAINED without leave to amend as to the third cause of action for violation of Business and Professions Code section 17200 et seq.

Guevara shall answer as to the remaining cause of action for fraudulent concealment within 10 days after service of notice of this ruling. (Cal. Rules of Court, rule 3.1320(j).)

2) As to Defendants NMC’s and La Reina’s Demurrer and Motion to Strike:

NMC’s and La Reina’s request for judicial notice is DENIED as to Exhibit A and GRANTED as to Exhibit B.

NMC and La Reina’s demurrer to the Fourth Amended Complaint is OVERRULED in its entirety.

NMC and La Reina’s motion to strike FAC paragraphs 105, 106, 136, and 152 and paragraphs 5 and 12 of the Prayer for Relief is DENIED.

NMC and La Reina shall answer the Fourth Amended Complaint within 10 days after service of notice of this ruling. (Cal. Rules of Court, rule 3.1320(j).)

3) The Case Management Conference is continued to October 16, 2026 at 8:35 a.m. in Department 44.

Plaintiffs to give notice.

I.

Background

A.

Factual Background

La Reina High School & Middle School (“LRHS”) was a private Catholic school in Thousand Oaks. Defendant La Reina is the California nonprofit corporation alleged to have owned and operated LRHS. Defendant SND National Ministry Corporation (“NMC”) is an Ohio nonprofit corporation and the sole member of La Reina. Defendant Anthony Guevara (“Guevara”) was LRHS’s president during the events at issue. (Fourth Amended Complaint (“FAC”) ¶¶ 22-24.) Plaintiffs allege that NMC and La Reina are alter egos of one another and that NMC also participated directly in the conduct at issue. (FAC ¶¶ 26, 49-68.)

The FAC alleges that, no later than June 2, 2023, NMC and La Reina had decided to close LRHS at the end of the 2023-2024 school year, and that Guevara was informed of that decision by that date. NMC, through its Chair and COO Bruce Jarosz and COO Laura Koehl, allegedly directed Guevara and La Reina’s board to prepare a comprehensive closure plan while delaying public disclosure. (FAC ¶ 52.) Plaintiffs further allege that NMC required nondisclosure agreements,

2024CUFR021250: ERIC AND MERILEE IVERSON, ON BEHALF OF THEMSELVES, INDIVIDUALLY, AND AS GUARDIANS TO THEIR MINOR CHILDREN (A.I.(1)..., et al. vs SND NATIONAL MINISTRY CORPORATION, et al.

did not direct the school to inform donors or students of the decision, and continued to exercise control over the closure process. (FAC ¶¶ 49, 52-57.) The FAC adds detailed alter-ego allegations organized around the factors identified in Associated Vendors, Inc. v. Oakland Meat Co. (1962) 210 Cal.App.2d 825, 838-840. Plaintiffs allege, among other things, commingling or diversion of La Reina funds for the benefit of NMC or affiliated entities; a lack of independent corporate records and governance; overlapping officers, directors, employees, and business operations; undercapitalization; use of La Reina as a shell or conduit; a non-arm’s-length relationship between the entities; use of La Reina to procure tuition and donations for NMC’s benefit; and an inequitable result if NMC were permitted to retain the benefit of funds collected through La Reina while avoiding liability. (FAC ¶¶ 58-68.)

Plaintiffs allege that Defendants continued to solicit enrollment and donations while the closure plan remained undisclosed. LRHS advertised and held a “Freshman For A Day” event in November 2023 and publicly stated that it looked forward to welcoming prospective students to the ninth grade the following year. (FAC ¶¶ 70-71.) LRHS held entrance exams on January 13 and January 20, 2024; Guevara allegedly told at least one administrator that, although the school was closing, the exams should still be held so as to “not give anything away.” (FAC ¶ 72.)

Guevara allegedly met personally with donors and encouraged deferred gifts and endowments to support LRHS’s long-term future, though the FAC does not identify those donors or the dates of those meetings. (FAC ¶ 74.) NMC, La Reina, and Guevara allegedly authorized a November 27, 2023 “Giving Tuesday” campaign. (FAC ¶ 75.) A December 15, 2023 “La Reina Regent Roundup” e-mail to La Reina families asked recipients to recruit students for 2024-2025 entrance exams and offered a $500 tuition credit for successful referrals; Plaintiffs allege that Defendants were responsible for the e-mail, while the identity of the individual sender is information within Defendants’ possession. (FAC ¶ 125.)

The most specific allegation involving a named Plaintiff concerns Francine Bradley. Plaintiffs allege that Bradley spoke with Guevara shortly before Christmas 2023 and advised him that she intended to make a significant donation; that Guevara encouraged the donation and did not disclose the decision to close LRHS; and that Bradley transferred a five-figure donation in stock to La Reina on December 27, 2023. (FAC ¶ 77.) Plaintiffs allege that Bradley made the gift on the representation, encouraged by Guevara, that the funds would support “the long-term future of LRHS,” and that the funds were instead diverted to NMC. (FAC ¶ 99.)

Plaintiffs allege that NMC directed La Reina’s board to vote to close LRHS in January 2024; that four board members refused based on their belief that the school was financially viable; that NMC removed those members and replaced them; and that a newly comprised five-member board voted to close LRHS on January 22, 2024. (FAC ¶¶ 80-82.) Plaintiffs allege that the vote violated then-existing bylaws requiring thirteen directors. (FAC ¶ 82.) Defendants dispute this allegation and contend that the bylaws were amended by written action on January 19, 2024 to permit a board of three or more directors.

The closure was publicly announced on January 24, 2024 (FAC ¶ 83), and Guevara resigned as president on February 6, 2024 (FAC ¶ 87). Following the January 24 announcement, Plaintiffs allege that NMC-affiliated personnel controlled the wind-down of LRHS, froze or redirected student-activity and scholarship funds, and implemented material mid-year budget cuts, including actions beginning after February 29,

2024CUFR021250: ERIC AND MERILEE IVERSON, ON BEHALF OF THEMSELVES, INDIVIDUALLY, AND AS GUARDIANS TO THEIR MINOR CHILDREN (A.I.(1)..., et al. vs SND NATIONAL MINISTRY CORPORATION, et al.

2024. (FAC ¶¶ 88-99.) Plaintiffs Eric and Merilee Iverson and their children, A.I.(1) and A.I.(2), allegedly paid Spring 2024 tuition for a fully operating, well-resourced college-preparatory school but received materially diminished programming, and Plaintiff Bradley’s December 27, 2023 stock donation, made for LRHS’s long-term future, was allegedly diverted to NMC instead. (FAC ¶ 99.) The FAC asserts against Guevara, NMC, and La Reina causes of action for (1) fraudulent misrepresentation; (2) fraudulent concealment; and (3) unfair, fraudulent, and deceptive business practices under Business and Professions Code section 17200 et seq. (FAC ¶¶ 121-158.) The FAC also seeks punitive damages. (FAC ¶¶ 104-106, 136, 152; Prayer ¶¶ 5, 12.) B.

Procedural Background

Plaintiffs filed this action on February 27, 2024. After a brief removal to federal court and subsequent remand, the Court granted Plaintiffs leave to amend in January 2025, and the operative pleading later became the Second Amended Complaint (“SAC”). On December 8, 2025, the Court sustained Defendants’ demurrer to the SAC with leave to amend. The Court found, among other things, that the SAC did not plead fraud with sufficient specificity, did not adequately plead a concealment intent-and-duty theory, did not plead a viable contract theory, and did not adequately plead the UCL claim; as to Guevara specifically, the Court found insufficient allegations of affirmative misrepresentations by him.

Plaintiffs then filed the Third Amended Complaint (“TAC”). On May 12, 2026, the Court sustained the demurrers of Guevara, NMC, and La Reina to all causes of action, with leave to amend. As to Guevara, the Court found that the fraudulent-misrepresentation claim relied on inferences drawn from entrance exams, recruiting, and donations; that the only affirmative statement attributed to Guevara was his statement to an administrator that the entrance exams were necessary so as to “not give anything away”; and that the TAC did not allege representations by Guevara to Plaintiffs sufficient to state the claim. (TAC ¶ 111; May 12, 2026 Minute Order at p. 2.)

The Court further found no allegation that Guevara knew the school would close before January 22, 2024, no sufficient factual basis for a duty to disclose, and no sufficient link between the claimed damages and the alleged misconduct. (May 12, 2026 Minute Order at pp. 2-3.) The Court sustained the UCL claim as derivative of the fraud claims and because the TAC did not allege conduct satisfying the “unfair”-prong test set out in Jackson v. Lara (2024) 100 Cal.App.5th 337, 347. (May 12, 2026 Minute Order at p. 3.)

As to NMC and La Reina, the Court found that the TAC did not allege sufficient facts showing that La Reina was the alter ego of NMC, because the allegations concerning NMC’s position regarding board composition did not sufficiently allege a misuse of the corporate form. (May 12, 2026 Minute Order at p. 3.) The Court separately found that the fraud allegations relied on inferences from entrance exams, recruiting, and donations and did not allege sufficiently specific affirmative representations by NMC and La Reina to Plaintiffs; that the concealment claim did not sufficiently plead a duty to disclose; that damages were not sufficiently linked to the alleged misconduct; and that the UCL claim failed both derivatively and under the unfair-prong analysis. (May 12, 2026 Minute Order at pp. 3-4.)

2024CUFR021250: ERIC AND MERILEE IVERSON, ON BEHALF OF THEMSELVES, INDIVIDUALLY, AND AS GUARDIANS TO THEIR MINOR CHILDREN (A.I.(1)..., et al. vs SND NATIONAL MINISTRY CORPORATION, et al.

Plaintiffs filed the FAC on June 1, 2026. On July 6, 2026, Guevara filed a demurrer and supporting papers, and NMC and La Reina filed a demurrer, a motion to strike, a request for judicial notice, and supporting declarations. Plaintiffs filed oppositions on August 27, 2026, and Defendants filed replies on September 2, 2026. The matters were originally noticed for September 29, 2026; on July 13, 2026, pursuant to the parties’ stipulation, the Court advanced and continued the demurrers and the motion to strike to September 10, 2026.

II. Preliminary Matters

A. Guevara’s Request for Judicial Notice

Guevara requests that the Court take judicial notice of its May 12, 2026 minute order ruling on the demurrers to the TAC. The request is GRANTED under Evidence Code section 452, subdivision (d). The Court may notice the existence and legal effect of its own order, but judicial notice does not convert disputed factual assertions in the prior papers into established facts.

B. NMC’s and La Reina’s Request for Judicial Notice

NMC and La Reina request judicial notice of (A) a document entitled “Written Action in Lieu of Meeting of the Member of La Reina,” which they contend reflects a January 19, 2024 amendment reducing the minimum number of La Reina directors to three; and (B) La Reina’s February 9, 2007 Articles of Incorporation filed with the California Secretary of State.

The request is GRANTED as to Exhibit B, but only as to the existence and contents of the publicly filed Articles of Incorporation, not the truth of disputed factual assertions that may be inferred from the filing. (Evid. Code, § 452, subds. (c), (h); see Jones v. Goodman (2020) 57 Cal.App.5th 521, 529, fn. 6.)

The request is DENIED as to Exhibit A for purposes of establishing the truth or legal effect of the purported January 19, 2024 bylaw amendment. Exhibit A is a private corporate record, not an official public record. Sister Patricia Garrahan authenticates the document as an NMC corporate record and states that it reflects board action taken on or around January 19, 2024. (Garrahan Decl. ¶¶ 1-4.) Authentication, however, does not make the disputed validity and legal effect of the document a fact “not reasonably subject to dispute” within Evidence Code section 452, subdivision (h). The FAC alleges that the board lacked authority to amend the bylaws, placing the validity/effect of the purported amendment directly in dispute. (FAC ¶ 82.)

Defendants also invoke the rule permitting consideration of a complete written instrument where a complaint quotes or incorporates it. This rule does not permit the Court to resolve a disputed factual issue through a declaration on demurrer. The FAC attaches and relies on the 2020 bylaws; it does not concede the validity of the January 19, 2024 action. The Court therefore does not use Exhibit A to establish, at the pleading stage, that the January 22 vote complied with validly amended bylaws.

2024CUFR021250: ERIC AND MERILEE IVERSON, ON BEHALF OF THEMSELVES, INDIVIDUALLY, AND AS GUARDIANS TO THEIR MINOR CHILDREN (A.I.(1)..., et al. vs SND NATIONAL MINISTRY CORPORATION, et al.

III.

Discussion

A. Demurrers

1. Legal Standard: Demurrer

A general demurrer tests whether the pleading states facts sufficient to constitute a cause of action. (Code Civ. Proc., § 430.10, subd. (e).) The Court assumes properly pleaded material facts are true, but not contentions, deductions, conclusions of fact or law, or allegations contradicted by judicially noticeable matters. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Vance v. Villa Park Mobilehome Estates (1995) 36 Cal.App.4th 698, 709.) The pleading is read as a whole and given a reasonable interpretation. (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 38.)

Fraud must ordinarily be pleaded with particularity. The complaint must allege facts showing the who, what, when, where, and how of the challenged representation. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645; Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, 1614.) The rule is relaxed where the nature of the allegations shows the defendant necessarily possesses full information concerning the facts. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216-218.)

Because this is the Fourth Amended Complaint, Code of Civil Procedure section 430.41, subdivision (e)(1), is also relevant. After more than three amendments in response to demurrers, further amendment requires an offer of additional facts showing a reasonable possibility that the defect can be cured. (Hedwall v. PCMV, LLC (2018) 22 Cal.App.5th 564, 579.)

2. The FAC’s Alter Ego Allegations Are Sufficient as to NMC and La Reina

Alter ego requires (1) such unity of interest and ownership that the separate personalities of the entities do not in reality exist and (2) an inequitable result if the acts are treated as those of the corporation alone. (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538.) Relevant factors include commingling of funds, common offices and employees, inadequate capitalization, disregard of corporate formalities or records, identical directors and officers, and use of one entity as a shell or conduit. (Id. at pp. 538-539.) No single factor controls. (Id. at p. 539.)

At the pleading stage, ultimate rather than evidentiary facts are required. In Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 235-236, allegations of domination and control, unity of interest, shell/conduit status, inadequate capitalization, disregard of formalities, use of corporate assets, and resulting injustice were sufficient to withstand demurrer; the court rejected the argument that the plaintiff had to plead the evidentiary detail ultimately necessary to prove alter ego.

The FAC materially expands the alter-ego allegations that the Court found insufficient in the TAC. Plaintiffs now allege specific categories of commingling or diversion of funds (FAC ¶ 59); lack of independent records and governance (FAC ¶ 60); overlapping officers, directors, and

2024CUFR021250: ERIC AND MERILEE IVERSON, ON BEHALF OF THEMSELVES, INDIVIDUALLY, AND AS GUARDIANS TO THEIR MINOR CHILDREN (A.I.(1)..., et al. vs SND NATIONAL MINISTRY CORPORATION, et al.

personnel (FAC ¶¶ 61-62); undercapitalization (FAC ¶ 63); shell/conduit use (FAC ¶ 64); lack of an arm’s-length relationship (FAC ¶ 65); use of La Reina to procure tuition and donations for NMC’s benefit (FAC ¶ 66); and an inequitable result based on NMC allegedly directing the collection of tuition and donations while concealing closure and then moving assets away from LRHS (FAC ¶ 67). Paragraph 68 expressly alleges both unity of interest and inequity.

Defendants persuasively note that sole-member status, overlapping personnel, shared services, and ownership-level oversight ordinarily do not establish alter ego by themselves. (Sonora Diamond, supra, at pp. 540-541, 548-550.) But their motion asks the Court to go further and decide that Plaintiffs’ additional allegations of diversion, commingling, undercapitalization, and use of La Reina as a conduit are untrue or innocuous. These are factual disputes. The fact that La Reina was formed in 2007 and maintained some corporate records does not negate, as a matter of pleading, the later unity and misuse alleged in paragraphs 58-68.

There is an independent reason that the alter-ego argument does not dispose of all claims against NMC. The FAC alleges direct NMC conduct, including Jarosz and Koehl directing the June 2023 closure plan; NMC directing confidentiality and the January 2024 board action; NMC participating in fundraising decisions; and NMC allegedly receiving or controlling diverted funds. (FAC ¶¶ 52-57, 59, 65-68, 73, 80-82, 95-99.) The demurrer to NMC therefore cannot be sustained across the board merely by rejecting alter ego.

To the extent the demurrer is based on failure to plead alter ego or direct NMC liability, the demurrer is OVERRULED.

3. First Cause of Action (Fraudulent Misrepresentation)

The elements of fraudulent misrepresentation are misrepresentation, knowledge of falsity, intent to induce reliance, justifiable reliance, and resulting damage. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 974.) The May 12 ruling focused principally on the absence of a sufficiently pleaded affirmative representation by Guevara to Plaintiffs and the absence of allegations showing Guevara knew before January 22, 2024 that LRHS would close. As to NMC and La Reina, the Court required greater detail concerning the speakers, timing, and actionable representations. The FAC adds material detail responsive to those rulings sufficient to survive demurrer as to NMC and La Reina, but not as to Guevara.

Paragraph 125 identifies a December 15, 2023 “La Reina Regent Roundup” e-mail sent to “La Reina Families,” including Plaintiffs, which asked recipients to recruit students for 2024-2025 entrance exams and offered a $500 tuition credit for each referred student who registered. The FAC expressly alleges that Defendants were responsible for the e-mail, but that the identity of the individual sender is within Defendants’ superior knowledge. (FAC ¶ 125.) Paragraphs 70-71 similarly identify dates, an official LRHS social-media account, the audience, and the substance of the Freshman For A Day solicitation. Paragraph 75 alleges that NMC and La Reina authorized the November 27, 2023 Giving Tuesday campaign. These allegations identify representative communications, their approximate dates, recipients, and substance.

2024CUFR021250: ERIC AND MERILEE IVERSON, ON BEHALF OF THEMSELVES, INDIVIDUALLY, AND AS GUARDIANS TO THEIR MINOR CHILDREN (A.I.(1)..., et al. vs SND NATIONAL MINISTRY CORPORATION, et al.

The FAC also now pleads a point the December 2025 ruling identified as missing: when the identity of the particular corporate speaker is unknown, Plaintiffs expressly allege that the specific identity is unknown and that Defendants possess the information. (FAC ¶¶ 49, 79, 125, 139.) Under Committee on Children’s Television, supra, at pages 217-218, the specificity requirement is relaxed where the relevant details are necessarily within the corporate defendant’s knowledge. At this stage, requiring Plaintiffs to identify the individual who pressed “send” on an identified corporate newsletter would elevate evidentiary detail over notice of the fraudulent scheme alleged.

Paragraph 52 now expressly alleges that NMC and La Reina had made the decision to close LRHS by June 2, 2023 and that Guevara was informed of that decision by the same date. For purposes of demurrer, this is a factual allegation, not a legal conclusion. The later January 22 board vote does not, on the face of the FAC or by judicially noticeable matter, necessarily negate an earlier decision or settled closure plan. Accordingly, the demurrer cannot be sustained on the theory that the Court must disregard paragraph 52 and find as a matter of law that Guevara could not have known of the closure before January 22, 2024.

The FAC sufficiently alleges falsity and scienter for pleading purposes as to NMC and La Reina. Paragraph 52 alleges that NMC and La Reina had made the closure decision by June 2, 2023; paragraphs 69-75 allege that recruitment and fundraising continued after that decision; and paragraphs 122-130 allege knowledge and an intent to induce tuition payments and donations.

Defendants argue that paragraph 80 constitutes an admission that La Reina acted in good faith. It does not. Paragraph 80 alleges that four individual board members refused to vote for closure based on their own good-faith belief that LRHS was financially viable. It does not allege that NMC, La Reina as an entity, or all responsible corporate actors lacked the fraudulent intent otherwise pleaded.

The FAC also adds a materially more specific damages theory. It alleges that the Iverson Plaintiffs paid Spring 2024 tuition for a fully operating school but received materially diminished educational and extracurricular programming after funds were frozen and programs were cut. (FAC ¶ 99.) It also alleges that Bradley transferred stock on December 27, 2023 based on the representation that her gift would support LRHS’s long-term future, but that the funds were diverted to NMC. (FAC ¶¶ 77, 99.) These allegations are incorporated into the first cause of action and supplemented by the reliance allegations in paragraphs 130-134. Whether Plaintiffs can ultimately prove the alleged diminution in value, diversion, or causal connection presents factual issues, not pleading defects. The allegations are sufficient to allege fraud as to NMC and La Reina.

The FAC does not, however, plead with sufficient particularity an affirmative misrepresentation by Guevara to a named Plaintiff. Paragraph 72 attributes to Guevara a statement to an unidentified administrator, not to Plaintiffs. Paragraph 74 alleges generally that Guevara met with unidentified donors at unspecified times and encouraged gifts for LRHS’s long-term future. Paragraph 75 alleges Guevara “authorized” the Giving Tuesday campaign but does not identify a statement by him. Paragraph 77 alleges that Bradley told Guevara she intended to donate, that he encouraged the donation, and that he did not disclose the closure; the gravamen of this allegation

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is omission, not a pleaded affirmative statement. Paragraph 99 characterizes Bradley’s donation as made on a representation “encouraged by” Guevara that the funds would support LRHS’s long-term future, but again does not allege what Guevara actually said. The official social-media and newsletter statements are not alleged to have been made by Guevara personally. (FAC ¶¶ 70-75, 77, 99, 124-127.)

The relaxed specificity rule does not cure the central deficiency as to Bradley’s own conversation with Guevara. Bradley necessarily knows what was said to her, yet the FAC still does not identify any affirmative words or substance attributable to Guevara beyond the conclusory allegation that he “encouraged” the donation. The first cause of action therefore remains deficient as to Guevara.

Guevara’s demurrer to the first cause of action is SUSTAINED without leave to amend. Plaintiffs have repeatedly amended the fraud claim after two prior rulings identifying specificity defects, and the opposition does not offer additional facts that could be pleaded to supply a specific affirmative representation by Guevara to a named Plaintiff. (Code Civ. Proc., § 430.41, subd. (e)(1).)

NMC’s and La Reina’s demurrer to the first cause of action is OVERRULED.

4. Second Cause of Action (Fraudulent Concealment)

Fraudulent concealment requires concealment or suppression of a material fact, a duty to disclose, intent to defraud, unawareness and action or forbearance caused by the omission, and resulting damage. (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 40-44; Bank of America Corp. v. Superior Court (2011) 198 Cal.App.4th 862, 870.) A duty to disclose may arise from exclusive knowledge, a partial representation that becomes misleading without further disclosure, or active concealment, but these theories generally presuppose a preexisting transactional relationship between the parties. (Rattagan, supra, at pp. 40-41.) Concealment must also be pleaded with specificity as to the omitted facts, materiality, inaccessibility, when disclosure should have occurred, and actual reliance. (Id. at pp. 43-44.)

Unlike the affirmative-misrepresentation claim, the FAC now pleads a sufficiently specific concealment theory involving Bradley. It alleges that Guevara knew by June 2, 2023 that LRHS would close. (FAC ¶ 52.) It further alleges that, just before Christmas 2023, Bradley told Guevara that she was planning a significant donation; that Guevara encouraged that donation but did not disclose the closure decision; and that Bradley transferred a five-figure stock donation on December 27, 2023. (FAC ¶¶ 77, 143.) Paragraph 145 alleges that Defendants had exclusive knowledge of the closure decision and created a duty of full disclosure when they raised the school’s future while soliciting tuition and donations. Paragraph 99 further alleges that Bradley donated on the representation, encouraged by Guevara, that the funds would support LRHS’s long-term future.

These allegations are materially more specific than the generalized concealment theory addressed in the May 12 ruling. They identify the parties to the transaction, the approximate time, the subject of the communication, the omitted fact, Guevara’s alleged knowledge, and the

2024CUFR021250: ERIC AND MERILEE IVERSON, ON BEHALF OF THEMSELVES, INDIVIDUALLY, AND AS GUARDIANS TO THEIR MINOR CHILDREN (A.I.(1)..., et al. vs SND NATIONAL MINISTRY CORPORATION, et al.

action taken by Bradley immediately thereafter. A prospective donor discussing and then completing a substantial gift after an alleged solicitation is sufficiently transactional at the pleading stage to support the exclusive-knowledge/partial-disclosure theories recognized in Rattagan. (See also Warner Construction Corp. v. City of Los Angeles (1970) 2 Cal.3d 285, 294 (nondisclosure may be actionable where a defendant speaks but fails to disclose facts materially qualifying the disclosure).)

The reliance and damage allegations are also sufficient at this stage as to Bradley. The FAC alleges that she transferred the stock after the conversation, would have acted differently had the closure been disclosed, and that the donated funds were not used for LRHS’s long-term future. (FAC ¶¶ 77, 99, 148-151.) Whether Bradley can prove the alleged diversion, or the amount of legally recoverable damage after accounting for any tax consequences, is not properly resolved on demurrer.

Because a cause of action withstands demurrer if it states a viable claim on any properly pleaded theory, Guevara’s demurrer to the second cause of action is OVERRULED. The Court need not determine at this stage whether the allegations support concealment claims on behalf of every putative class member.

Similarly, the FAC now alleges both a transactional relationship and specific grounds for a duty. La Reina allegedly accepted tuition from the Iverson family for Spring 2024 and solicited charitable contributions from Bradley and other donors. (FAC ¶¶ 18-21, 75-78, 99.) The FAC alleges that NMC was La Reina’s alter ego and also directly controlled the closure and solicitation process. (FAC ¶¶ 26, 52-68.) As discussed above, Paragraph 145 alleges that Defendants had exclusive knowledge of the closure decision and also created a duty of full disclosure by intentionally raising the school’s future while soliciting tuition and donations. Paragraphs 139-143 identify representative transactions and the points at which the closure allegedly should have been disclosed.

The remaining concealment elements are sufficiently alleged for pleading purposes. The FAC alleges that Defendants knew of the June 2023 closure decision (FAC ¶¶ 52, 122, 146), intentionally withheld it to obtain tuition and donations (FAC ¶ 147), and that Plaintiffs would not have acted as they did had the information been disclosed (FAC ¶¶ 148-150). The more specific allegations concerning the Iverson tuition and Bradley donation provide factual context for the otherwise general reliance allegations. (FAC ¶¶ 77, 99.)

NMC’s and La Reina’s demurrer to the second cause of action is therefore OVERRULED.

5. Third Cause of Action (UCL)

Business and Professions Code section 17200 defines unfair competition disjunctively to include unlawful, unfair, or fraudulent business acts or practices. A viable theory under one prong is sufficient. (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.) A private plaintiff must have suffered injury in fact and lost money or property as a result of the challenged practice. (Bus. & Prof. Code, § 17204.) Available private remedies are generally injunction and restitution, not damages. (Korea Supply Co. v. Lockheed

2024CUFR021250: ERIC AND MERILEE IVERSON, ON BEHALF OF THEMSELVES, INDIVIDUALLY, AND AS GUARDIANS TO THEIR MINOR CHILDREN (A.I.(1)..., et al. vs SND NATIONAL MINISTRY CORPORATION, et al.

Martin Corp. (2003) 29 Cal.4th 1134, 1144, 1148-1149 (“Korea Supply”.) Restitution restores money or property in which the plaintiff has an ownership interest; direct payment to the defendant is not invariably required, but the defendant must have acquired or possess the plaintiff’s property or its traceable equivalent. (Id. at pp. 1149-1152; Shersher v. Superior Court (2007) 154 Cal.App.4th 1491, 1497-1500 (“Shersher”.)

If the concealment claim is adequately pleaded, the UCL claim does not fail merely because Plaintiffs have not independently satisfied the “unfair”-prong tethering test discussed in the prior order. The UCL’s three prongs are disjunctive, and alleged fraudulent conduct may independently support a UCL theory.

The difficulty as to Guevara is remedy. The FAC alleges that Bradley transferred stock to La Reina and that the funds were diverted to NMC; it does not allege that Guevara personally received, retained, or now possesses Bradley’s money or property. (FAC ¶¶ 77, 99, 158.) Nor does the FAC allege an ongoing business practice by Guevara that an injunction could meaningfully restrain: it alleges he resigned on February 6, 2024 and attributes the later wind-down conduct to others. (FAC ¶¶ 87-99.)

NMC and La Reina also argue that restitution is unavailable because Plaintiffs received the school year for which they paid and because no funds are alleged to have reached NMC. The FAC now alleges otherwise in material respects. Paragraph 99 alleges that the named Iverson Plaintiffs paid for a fully operating Spring 2024 semester but received a materially diminished program; it also alleges that Bradley’s stock donation was diverted to NMC. Paragraphs 59, 67, 95-98 similarly allege NMC received or controlled funds originating with La Reina students or donors.

La Reina is alleged to have received the tuition and donations directly. At the pleading stage, these allegations are sufficient to support a claim for restoration of money or property allegedly obtained through the challenged practice. (See Korea Supply, supra, 29 Cal.4th at pp. 1149-1152; Shersher, supra, 154 Cal.App.4th at pp. 1497-1500 [direct payment to the UCL defendant is not an absolute prerequisite to restitution].)

La Reina’s and NMC’s separate argument that the January 22, 2024 board vote complied with amended bylaws depends on RJN Exhibit A. Because the validity and legal effect of that purported amendment cannot be established by judicial notice on this demurrer, it does not provide a basis to eliminate paragraph 157. In any event, the UCL claim survives independently on the pleaded fraudulent-practice theory.

NMC’s and La Reina’s demurrer to the third cause of action is therefore OVERRULED.

As to Guevara, however, even assuming the fraudulent-prong allegations are otherwise sufficient, the FAC does not plead an available UCL remedy against him. His demurrer to the third cause of action is therefore SUSTAINED without leave to amend. Plaintiffs do not identify additional facts they could allege showing that Guevara holds restitutionary funds or engages in ongoing conduct susceptible to injunctive relief.

2024CUFR021250: ERIC AND MERILEE IVERSON, ON BEHALF OF THEMSELVES, INDIVIDUALLY, AND AS GUARDIANS TO THEIR MINOR CHILDREN (A.I.(1)..., et al. vs SND NATIONAL MINISTRY CORPORATION, et al.

B. NMC’s and La Reina’s Motion to Strike

1. Legal Standard: Motion to Strike

A party may move to strike irrelevant, false, or improper matter or matter not drawn or filed in conformity with California law. (Code Civ. Proc., §§ 435, 436.) A request for punitive damages may be stricken where the complaint fails to allege facts supporting oppression, fraud, or malice under Civil Code section 3294. (Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166-167.) But the challenged punitive-damages allegations must be read in context with the complaint as a whole; statutory language may stand where sufficient underlying facts support it. (Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6-7.)

For a corporate defendant, Civil Code section 3294, subdivision (b), additionally requires that the advance knowledge, conscious disregard, authorization, ratification, or act of oppression, fraud, or malice be attributable to an officer, director, or managing agent. A managing agent is one who exercises substantial discretionary authority over decisions that ultimately determine corporate policy. (White v. Ultramar, Inc. (1999) 21 Cal.4th 563, 566-567, 577.)

2. Punitive Damages

NMC and La Reina seek to strike FAC paragraphs 105, 106, 136, and 152, and paragraphs 5 and 12 of the Prayer for Relief. These provisions allege knowing and willful conduct and seek punitive damages based on fraud, malice, and oppression. Read alone, the challenged language is largely conclusory. Read with the FAC as a whole, however, the punitive-damages request is adequately supported at the pleading stage.

The FAC pleads intentional fraud and concealment, and the demurrer to those claims is overruled. “Fraud” itself is one of the statutory predicates for punitive damages. (Civ. Code, § 3294, subds. (a), (c)(3).) The FAC also identifies high-level corporate actors. Paragraph 52 alleges that Bruce Jarosz, identified as NMC’s Chair/Chief Operating Officer, and Laura Koehl, identified as NMC’s Chief Operating Officer, directed Guevara and La Reina’s board to develop the closure plan while the school continued to collect tuition and donations. (See also FAC ¶¶ 7, 42, 52.)

Paragraphs 104, 136, and 152 allege that the challenged conduct was undertaken through an officer, director, or managing agent. As to La Reina, the FAC alleges conduct through its president, Guevara, and through its board. (FAC ¶¶ 24, 72-82.) These allegations are sufficient to plead the corporate-actor requirement; whether the identified individuals exercised the authority necessary for ultimate punitive liability is a factual matter.

Defendants again rely on paragraph 80 as an alleged admission of good faith. As discussed above, paragraph 80 alleges only that four dissenting board members believed in good faith that LRHS was financially viable. It does not negate the FAC’s allegations of intentional concealment and fraudulent solicitation by other corporate actors.

Plaintiffs’ procedural objections do not independently warrant denial, but they also do not support striking the claim. Combining the demurrer and motion to strike in one notice and memorandum is not a jurisdictional defect. (Cal. Rules of Court, rule 3.1112 and rule 3.1322.)

2024CUFR021250: ERIC AND MERILEE IVERSON, ON BEHALF OF THEMSELVES, INDIVIDUALLY, AND AS GUARDIANS TO THEIR MINOR CHILDREN (A.I.(1)..., et al. vs SND NATIONAL MINISTRY CORPORATION, et al.

Nor did Defendants waive a motion directed to the superseding FAC merely because punitive-damages allegations appeared in earlier pleadings. The motion is properly decided on the sufficiency of the FAC.

The motion to strike is therefore DENIED.

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