County of Monterey v. Life Foundation Monterey, LLC, et al.

Superior Court (2001) 92 Cal.App.4th 811, 815 (“irrespective of the mandatory language in the statute, the right to transfer may be waived if there is unreasonable delay”); Newman v. County of Sonoma (1961) 56 Cal.2d 625, 627 (concluding that the 11-month period between the settlement and the County’s motion to change venue was unreasonable considering the County’s involvement in extensive litigation after the settlement and before filing the motion).]

Here, Defendants, through Mr. Davis’s declaration, have made a minimal factual showing that the entity defendants are residents of Walnut Creek, California, and primarily conduct business in Colorado. [Davis Decl. at ¶¶ 2-6.] While this showing is conclusory, it is sufficient to meet the threshold requirement that Defendants are not “residents” of Monterey County. However, this showing does not resolve the venue-transfer motion, as the issues of waiver and timeliness remain dispositive.

The record shows that the original Defendants have actively litigated this case in Monterey County for approximately 18 months, with a trial date about 6 months away, before filing this motion. During that time, they answered pleadings, engaged in motion practice, participated in discovery, and otherwise invoked this Court’s jurisdiction.

Importantly, although not mentioned in the parties’ briefing, on January 22, 2025, Life Foundation filed cross-claims against Plaintiff for: (1) breach of contract; (2) declaratory judgment; and (3) breach of the implied covenant of good faith and fair dealing. In its filing, Life

1 Hereinafter, all statutory references are to the Code of Civil Procedure. 1

Foundation specifically alleged, “[v]enue is proper in the County of Monterey pursuant to Code of Civil Procedure § 395(a), because the Contract was signed in the County of Monterey, the Building is located in the County of Monterey, and the parties perform under the Contract in the County of Monterey. Cross-Complainant has been damaged by Cross-Defendants’ conduct in the County of Monterey.” [Cross Complaint at ¶ 7.] Therefore, Life Foundation, one of the moving parties, has already established to the Court that venue is proper, and filing a cross-complaint affirmatively invokes the County of Monterey as the proper venue for this action.

Defendants’ delay in filing this motion, participating in litigation, discovery, and motion practice, as well as submitting pleadings, amounts to a waiver of their right to seek transfer under section 394. [See Newman, 56 Cal.2d at 628; Adams v. Superior Court (1962) 226 Cal.App.2d 365, 368.] Therefore, the original Defendants have waived any right to change the venue. [See Code Civ. Proc. §§ 392 (venue where the real property involved is located), 395 (establishes venue where the contract was entered), and 395.5 (“a corporation or association may be sued in the county where the contract is made or to be performed, where the obligation or liability arises, or where the breach occurs.”).]

To the extent that the Defendants argue that including Low Income Family in the Second Amended Complaint (“SAC”) somehow reinstates the right to seek a transfer, the Court is not convinced. While a newly added defendant may, in some cases, assert a timely venue challenge, this Court must consider the procedural posture of the entire case. Here, Low Income Family appears closely linked with the existing Defendants (Life Foundation, Lotus, and Mr. Barnett), sharing common leadership and alleged conduct, and was added well into an already developed case. Under these circumstances, the addition of Low Income Family does not serve to revive a right to transfer that has already been addressed through extensive litigation.

Furthermore, the motion was not filed within a reasonable time. Although Defendants argue that the motion is timely because it was filed after the addition of Low Income Family and within the response period to the SAC, the Court must consider the overall procedural history. This case has been pending since October 2024, involved substantial litigation activity, and is nearing trial. A motion to transfer venue at this late stage, after extensive litigation, appears untimely.

Additionally, the motion appears to be dilatory and would prejudice Plaintiff if granted. Evidence indicates that the case is actively litigated in Monterey County, where non-party witnesses reside, and the case is progressing toward trial, with the option to purchase the at-issue property nearing. Transferring the case at this stage would likely disrupt the orderly administration of justice and impose unnecessary burdens on the parties and witnesses. While witness convenience is not the main consideration under section 394, courts may consider prejudice and delay when deciding whether to deny a transfer that is otherwise allowed. [Marin Community College Dist. v. Superior Court (1977) 72 Cal.App.3d 719, 723.]

On section 394 grounds, the motion is DENIED.

Section 397(b).

Alternatively, Defendants rely on section 397(b), to support their venue- transfer motion. Section 397(b) allows for transfer when there is reason to believe an impartial trial cannot be held in the county. However, the burden is on the moving party to provide strong evidence of actual prejudice or bias, not mere speculation or conclusory claims, including broad assertions that a county plaintiff may have local favoritism.

Here, Defendants offer no admissible evidence showing that an unbiased trial cannot be held in Monterey County. Instead, Defendants depend on the same broad policy reasons behind section 394 and argue that Plaintiff’s wish to stay in Monterey County indicates bias. However, these arguments do not meet the standard set by section 397(b). The statute requires a factual showing, usually through declarations or other evidence, of a reasonable chance of prejudice, which Defendants have not provided. Therefore, section 397(b) does not offer an independent reason for transfer.

On section 397(b) grounds, the motion is DENIED.

Conclusion.

Defendants’ motion and request for fees are DENIED. Plaintiff shall prepare the Proposed Order consistent with this Tentative Ruling.

Defendants’ Motion to Quash Deposition Subpoena

The motion of Defendants Life Foundation Monterey, LLC, Barnett Davis II, Lotus RMD, LLC, and Low Income Family Enrichment Corporation (collectively, “Defendants”) for an order quashing the subpoenas of Plaintiff County of Monterey (“Plaintiff”) to non-parties U.S. Bank N.A. (“U.S. Bank”) and Merrill Lynch Pierce Fenner & Smith Inc. (“Merrill Lynch”) is DENIED subject to a protective order.

Legal Standards.

The court may quash a subpoena entirely, modify it, or require compliance under terms and conditions set by the court, including protective orders. [Code Civ. Proc. § 1987.1.] The court may also issue any order appropriate to protect the individual from unreasonable or oppressive demands, including excessive violations of privacy rights. [Ibid.]

When seeking banking records related to claims of conversion, financial diversion, or misuse of rent payments, these records are likely to be highly relevant for proving the elements of such claims. The party issuing the subpoena must show that the banking records are sufficiently described, not overly broad, reasonably obtainable from the entity where they are kept, and materially relevant to the case issues. [Code Civ. Proc. § 1985.] Courts will weigh whether producing these records would impose an unreasonable burden on third parties and whether the request is made in a timely manner. [Facebook, Inc. v. Superior Court (2020) 10 Cal.5th 329 (establishing factors for determining whether to quash a subpoena, including whether the material is adequately described, not overly broad, reasonably accessible, and whether the production would unfairly burden the third party).]

Discussion.

Defendants move to quash Plaintiff’s third-party deposition subpoenas to U.S. Bank and Merrill Lynch seeking financial records. For the foregoing reasons, the motion is DENIED, subject to a protective order and limited additional safeguards to address privacy concerns.

Plaintiff’s Second Amended Complaint (“SAC”) alleges not only breach of contract but also conversion, tortious interference, and alter ego liability. Specifically, Plaintiff claims that Defendants engaged in a pattern of financial misconduct, including unauthorized withdrawals from reserve accounts, failure to deposit required funds, diversion of rental income among related entities, and commingling of funds for personal benefit. Plaintiff further alleges that Mr. Davis controls multiple entities and uses them as instruments to shift assets and evade contractual obligations. The subpoenas seek bank records for accounts allegedly used in these transactions.

Discovery is broad and allows inquiry into any nonprivileged matter relevant to the subject of the action or reasonably likely to lead to admissible evidence. [Code Civ. Proc. § 2017.010.] At the same time, courts have discretion to limit discovery to ensure it remains proportional and not unduly intrusive, especially when privacy interests are at stake. Bank records are protected by constitutional privacy rights, which require balancing the need for

disclosure against privacy intrusion. [Valley Bank of Nevada v. Superior Court (1975) 15 Cal.3d 652, 656-657; Burrows v. Superior Court (1974) 13 Cal.3d 238, 243.] Financial records are not categorically immune from discovery and can be discovered if they are directly relevant to the claim. [Rawnsley v. Superior Court (1986) 183 Cal.App.3d 86, 91; GT, Inc. v. Superior Court (1984) 151 Cal.App.3d 748, 754.]

Defendants argue that the subpoenas improperly seek evidence of financial status and infringe on protected privacy rights. The Court disagrees. According to the SAC, the records are not requested to assess Defendants’ wealth or ability to pay damages, but rather to trace alleged fund diversion and misuse, analyze transfers among related entities, and test Plaintiff’s alter ego and conversion claims. The SAC directly addresses the movement and use of funds, including allegations that funds were withdrawn without authorization and transferred among entities to avoid contractual obligations. Under these circumstances, the requested bank records are directly relevant and pertinent to the dispute.

Defendants further argue that the subpoenas should be quashed in light of the pending demurrer. This issue is moot because the Court has tentatively overruled the demurrer. Additionally, discovery is not automatically stayed merely because a demurrer is pending, especially when the operative SAC alleges facts supporting the requested discovery. The SAC currently asserts claims for conversion, interference, and alter ego liability, and these claims remain active unless and until dismissed. Therefore, the Court declines to limit discovery on that ground.

Additionally, the subpoenas in question are not facially overbroad. They specify the bank accounts by account number and restrict the time frame from January 1, 2020, to the present. These limits significantly narrow the scope of the requests to the relevant transactions and support maintaining the subpoenas in full. That said, they also request complete bank account statements that include all transactions, even those unrelated to the claims or involving thirdparty privacy interests. Therefore, the Court, in its discretion, shall impose reasonable safeguards to ensure proportionality and protect legitimate privacy interests.

Thus, the Court DENIES Defendants’ motion to quash the subpoenas in their entirety. However, discovery shall proceed subject to a protective order. The Court hereby ordes the parties to meet and confer regarding the terms of that protective order, which shall include designation of materials as confidential, limitation of use to this action, and restriction of disclosure to counsel, experts, the Receiver, and the Court.

Conclusion.

Plaintiff has established a clear connection between the requested bank records and its claims for conversion, alter ego liability, and financial misconduct as alleged in the SAC. The subpoenas are specifically targeted enough to justify enforcement, and any remaining concerns regarding scope and privacy can be effectively addressed through the granting of a protective order rather than by fully quashing the subpoenas. Therefore, the Motion to Quash is DENIED, subject to a protective order. The parties shall meet, confer, and hopefully agree to a protective order. Plaintiff shall prepare the Proposed Order consistent with this Tentative Ruling.

Defendants’ Demurrer to Plaintiff’s Second Amended Complaint

The demurrer of Defendants Life Foundation Monterey, LLC, Barnett Davis II, Lotus RMD, LLC, and Low Income Family Enrichment Corporation (collectively, “Defendants”) to the Second Amended Complaint (“SAC”) of Plaintiff County of Monterey (“Plaintiff”) on sufficiency grounds [Code Civ. Proc. § 430.10, subd. (e)] is OVERRULED. Defendants’ judicial-notice request is GRANTED IN PART as to Exhibits A and B, and DENIED IN PART as to Exhibits C and D. Defendants must file and serve their Answer to the SAC within 10 days after notice of the Court’s order. [Cal. Rules of Ct., rule 3.1320, subd. (j).] Plaintiff shall prepare the Proposed Order.

Legal Standard.

A demurrer for sufficiency assesses whether the complaint properly states a cause of action. [Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.] When courts evaluate demurrers, they interpret the allegations broadly and in context. [Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228.] In a demurrer, defects must be visible on the face of the pleading or by proper judicial notice. [Code Civ. Proc. § 430.30, subd. (a).] A demurrer examines only the pleadings, not the evidence, counsel’s arguments, or external facts. [SKF Farms v.

Superior Court (1984) 153 Cal.App.3d 902, 905; Ion Equipment Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881.] “It is well settled that a general demurrer admits the truth of all material factual allegations in the complaint and that the question of plaintiffs’ ability to prove these allegations, or the possible difficulty in making such proof, does not concern the reviewing court.” [Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 604.]

Discussion.

1. Meet-and-Confer Requirement.

The declaration of defense counsel Alex Gorman reflects that the meet-and-confer requirement was satisfied. [Gorman Decl. at ¶¶ 1-5; Code Civ. Proc. § 430.41.]

2. Request for Judicial Notice.

The Court GRANTS Defendants’ request to judicially notice the existence of County of Monterey Standard Lease Agreement (Exhibit A) (the “2007 Lease”) and the Second Amendment to County of Monterey Standard Lease Agreement (Exhibit B) (the “2016 Amendment”). [Evid. Code §§ 452, subd. (h), and 453.] Beyond that, the Court will not take judicial notice of the truth of the disputed factual matters beyond the operative contractual language. However, the Court DENIES Defendants’ request to judicially notice two correspondences from County’s counsel, which are attached as Exhibits C and D. Such documents are not judicially noticeable and are offered for the truth of the matters asserted.

3. Statute of Limitations.

Defendants argue that the First, Third, and Fourth Causes of Action are time-barred by the four-year statute of limitations for written contracts under Code of Civil Procedure section 337. They point out that the 2016 Lease Amendment required a deadline to replace the roof by the end of 2017. Defendants also note that the original complaint was not filed until October 31, 2024, which is more than four years beyond the deadline to replace the roof.

At this stage, the Court cannot decide that issue as a matter of law on demurrer. The SAC sufficiently alleges that the amendment required Life Foundation, as lessor, to “replace the entire roofing system,” but also alleges that failure to complete the project by 2017 “shall not be an event of default” and that the parties agreed to cooperate to complete the project “as soon as possible thereafter.” [SAC at ¶ 36.]

This language is reasonably susceptible to competing interpretations, as identified by the parties’ briefing, including that no fixed breach date was established and that the obligation remained ongoing. Contract interpretation in such circumstances presents a question of fact that cannot be resolved on demurrer. [Aragon-Haas v. Family Security Ins. Services, Inc. (1991) 231 Cal.App.3d 232, 239.] Additionally, the SAC alleges ongoing failures to repair, persistent roof defects, and repeated refusals to perform. [SAC at ¶¶ 41-43.] These allegations support applying the continuous accrual doctrine, under which each breach of a recurring obligation may lead to a new claim. [Areyah v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1199.]

Accordingly, since the SAC does not conclusively prove that all claims accrued outside the limitations period, the statute of limitations defense cannot be decided on demurrer. The demurrer is OVERRULED.

4. Non-Contracting Defendants.

Defendants argue that the Second Cause of Action fails as a matter of law because only Life Foundation, as the lessor, is a party to the 2007 Lease, and the remaining defendants cannot be liable for breach. Plaintiff argues, among other things, that it has alleged theories of alter ego.

While privity is generally required, the Court finds that the SAC alleges alter ego liability in detail. [SAC at ¶¶ 68-72.] Specifically, the SAC alleges that: (1) Mr. Davis exercises complete control over all entity defendants [id. at ¶ 68]; (2) the entities share a unity of interest and ownership [ibid.]; (3) funds are commingled and transferred without a legitimate business purpose [id. at ¶¶ 68-70]; (4) the lessor entity is systematically undercapitalized and stripped of assets [id. at ¶¶ 69-72]; and (5) recognizing the corporate form would produce an inequitable result [id. at ¶¶ 68, 72]. These allegations include specific examples of asset transfers, selfdealing, and misuse of corporate structure. [Id. at ¶¶ 69-71.]

Alter ego is a fact-intensive inquiry and is not ordinarily resolved on demurrer where such allegations are pleaded. [Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 300.] At this stage of the proceedings, the Court cannot conclude as a matter of law that the noncontracting defendants are not subject to liability. The demurrer on this ground is OVERRULED.

5. Second Cause of Action: Breach of Contract.

The SAC sufficiently alleges the existence of a contract, Plaintiff’s performance, Defendants’ alleged breach, and resulting damages. [SAC at ¶¶ 74-83.] The alleged breaches include failure to replace the roof, failure to maintain and repair the premises, improper expense charges, and interference with Plaintiff’s use and enjoyment of the premises. These allegations are adequate at the pleading stage. Whether Defendants’ conduct constitutes a breach or whether performance was excused presents factual questions that are not suitable for resolution on demurrer. The demurrer is OVERRULED.

6. Third Cause of Action: Conversion

Defendants demur as to the Third Cause of Action for conversion on the ground that this is simply Plaintiff’s breach of contract claim asserted again, but recast as a tort. The elements of a claim for conversion are (1) “the plaintiff’s ownership or right to possession of the property at the time of the conversion,” (2) “the defendant’s conversion by a wrongful act or disposition of property rights,” and (3) “damages.” [Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 451.]

The SAC alleges that Defendants failed to deposit the required funds, made unauthorized withdrawals from designated reserve accounts, and misappropriated identifiable sums. [SAC at ¶¶ 91-95.] These allegations are sufficient to state a claim for conversion, and therefore, the Demurrer is OVERRULED.

Furthermore, to the extent that Defendants argue the conversion claim is barred by the three-year statute of limitations under Code of Civil Procedure section 338, subdivision (c), the SAC does not specify particular dates showing that the alleged act of misappropriation occurred outside the limitations period. Instead, the SAC alleges ongoing misconduct, including continuous failures to deposit funds and repeated unauthorized withdrawals from designated accounts. [SAC at ¶¶ 91-95.]

Thus, to the extent that accrual depends on when Plaintiff discovered or reasonably should have discovered the alleged wrongdoing, such issues present factual questions not suitable for resolution on demurrer. Therefore the statute of limitations defense does not provide a basis to sustain the Demurrer to the conversion claim at this stage. Accordingly, the demurrer as to the Third Cause of Action is OVERRULED.

7. Fourth Cause of Action: Tortious Interference

Regarding the Fourth Cause of Action for tortious interference, the Defendants contend this claim fails because they are not strangers to the contract. Mr. Davis serves as the Executive Director/CEO of the contracting party. Likewise, the SAC alleges that Lotus is an agent of the Life Foundation and is acting under Mr. Davis’s direction (i.e., not an outsider or stranger to the contract). The elements for a tortious interference claim are: (1) a valid contract between the plaintiff and a third party, (2) the defendant’s knowledge of the contract, (3) the defendant’s intentional acts intended to induce a breach or disruption of the contractual relationship, (4) an

actual breach of the contract, and (5) resulting damages. [See Hahn v. Diaz-Barba (2011) 194 Cal.App.4th 1177, 1196.]

The SAC alleges that Mr. Davis and Lotus acted outside the scope of the contractual relationship and interfered with Plaintiff’s contractual rights by structuring arrangements to circumvent contractual protections and divert funds. [SAC at ¶¶ 99-101.] Whether Defendants acted as independent actors or agents presents a factual issue not resolvable on demurrer. Therefore, Demurrer as to the Fourth Cause of Action is OVERRULED.

8. Economic Loss Rule

Defendants argue that the economic loss rule bars Plaintiff’s tort claims. The SAC, however, alleges intentional misconduct, including misappropriation and self-dealing. Such allegations may support tort liability independent of the contract. [Robinson Helicopter Co. v. Dana Corp. (2004) 34 Cal.4th 979, 911; Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 19.] Accordingly, the economic loss rule does not bar Plaintiff’s tort claims and the demurrer is OVERRULED.

Conclusion.

Defendants’ demurrer is OVERRULED and they have 10 days to file and serve their answer to the SAC. As detailed above, Defendants’ request for judicial notice is GRANTED IN PART AND DENIED IN PART. Plaintiff shall prepare the Proposed Order consistent with this Tentative Ruling.

Order to Show Cause Re: Contempt

On April 17, 2026, this Court issued an Order to Show Cause (“OSC”) why Defendants Barnett Davis II and Life Foundation Monterey LLC (“Life Foundation”) (collectively, “Defendants”) should not be held in contempt, why the return of funds should not be ordered, and why no additional relief should be granted regarding each of the following alleged financial transfers: (1) $24,000 from Life Foundation around November 6, 2025; (2) $24,000 from Life Foundation around December 15, 2025; (3) the attempted transfer and actual transfer of $28,685 to Life Foundation on or about January 8 and 15, 2026; and (4) $1,750 from Life Foundation LLC on or about February 9, 2026.

Contempt proceedings are quasi-criminal in nature, and Defendants are entitled to the presumption of innocence. As the moving party, Plaintiff County of Monterey (“Plaintiff”) bears the burden of proving beyond a reasonable doubt the existence of a lawful, clear, and specific court order, Defendants’ knowledge of that order, and a willful violation. [Ross v. Superior Court (1977) 19 Cal.3d 899, 913.] The court’s analysis is limited to the acts described in the charging declaration. [Moss v. Superior Court (1998) 17 Cal.4th 396.]

The relevant orders include: (1) the August 8, 2025 order appointing Brett Waldman as the receiver (“Receiver”); (2) the November 5, 2025 order requiring prior written notice for transfers exceeding $2,500; (3) the December 22, 2025 order removing Mr. Davis from control of Life Foundation’s bank accounts and prohibiting transfers to Mr. Davis and related entities; and (4) the January 30, 2026 order confirming the Receiver’s exclusive authority over Life Foundation’s accounts and assets. These orders collectively highlight the Court’s increasing concern about Defendants’ financial conduct and the need to ensure funds are available for building maintenance and potential judgment enforcement.

Regarding the November 5, 2025, order, the Court recognizes that it requires prior written notice to the Receiver for transfers exceeding $2,500. The declaration states that this requirement was announced by the Court on October 31, 2025, in the presence of Mr. Davis and counsel, and that a proposed order reflecting this requirement was prepared and submitted by counsel on the same day before being entered shortly afterward. [Smith Decl. at ¶¶ 16-17, 42.] The record also shows that the parties maintained ongoing communication with the Receiver throughout November and December regarding compliance with this requirement.

However, the November 5 order, by itself, does not clearly and unequivocally prohibit transfers without notice or explicitly state that failing to provide notice is punishable as contempt. Since contempt must be based on violating a clear and explicit directive, and ambiguities must be resolved in favor of the alleged contemnor, the Court will apply this standard to each individual transaction involved.

First, regarding the November 6, 2025, transfer of $24,000 from Life Foundation to an entity controlled by Mr. Davis, the record shows that no prior written notice was given to the Receiver by Mr. Davis before the transfer was made and that it was not disclosed until weeks later through compelled production of bank records. [Smith Decl. at ¶¶ 35-37.] However, Mr. Davis claims he was unaware of the existence of the November 5 order at the time of the transfer, and although Plaintiff has substantial evidence casting doubt on this, including Mr. Davis’s presence at the October 31 hearing, the Court cannot conclude beyond a reasonable

doubt that Mr. Davis had actual knowledge of the written order at the exact time of the transfer. Given the quasi-criminal nature of contempt and the requirement that all doubts be resolved in favor of the accused, the Court finds that Plaintiff has not met its burden of proving a willful violation regarding the November 6 transfer.

Second, the Court reaches the same conclusion regarding the November 24, 2025, transfer. While the record indicates noncompliance with the notice requirement, the ambiguity surrounding the scope and enforceability of the November 5 order, combined with the lack of clear and unequivocal proof of willfulness beyond a reasonable doubt, prevents a finding of contempt for that transaction.

Third, regarding the December 15, 2025, transfer of $24,000 from Life Foundation to Mr. Davis’s personal account, the Smith Declaration shows that this transfer happened one day before the scheduled injunction hearing, after weeks of ongoing communication with the Receiver about the notice requirement, and that it was not disclosed until after the Court imposed further restrictions on the Defendants’ control of accounts. [Smith Decl. at ¶¶ 47-48.] The record further reveals that Defendants’ own counsel acknowledged at the time that the transfer violated the prior notice requirement and indicated that court guidance would be appropriate to determine the remedy. [Id. at ¶ 54 and Exh. 11.]

These explanations, later provided by Defendants, including claims that notice had been given or that counsel had been instructed to provide notice, lack supporting evidence and are contradicted by the record, including the counsel’s own admission that he did not recall receiving such instructions. [Id. at ¶¶ 50-52.] Given the timing of the transfer, the surrounding communications, lack of disclosure, and the contemporaneous acknowledgment of the violation, the Court finds beyond a reasonable doubt that Defendants had actual knowledge of the notice requirement and intentionally failed to comply.

Therefore, the Court concludes that the December 15 transfer constitutes contempt of court.

Fourth, regarding the December 22, 2025, order, which explicitly removed Mr. Davis from Life Foundation’s bank accounts and prohibited the transfer of funds to Mr. Davis and related entities, the Court’s order is clear, unequivocal, and specific. The record shows that on January 8, 2025, Mr. Davis attempted to deposit a check payable to Life Foundation into an account controlled by a separate entity. After the bank blocked the transaction, he redirected the funds through a previously undisclosed account before ultimately transferring them to his personal account. [Smith Decl. at ¶¶ 58-60.] This conduct occurred after Mr. Davis had been removed from control of the accounts and after he was explicitly instructed to submit any claimed expenses for the Receiver’s review. The Court finds that this attempted and completed transfer constitutes a willful violation of the December 22 order.

Fifth, the Court finds that the transfer of $1,750 from Life Foundation to Mr. Davis’s personal account on February 9, 2026, constitutes a separate and independent act of contempt. By that time, the December 22 injunction was still in effect, and the January 30, 2026, order had confirmed the Receiver’s exclusive authority over all accounts. [Smith Decl. at ¶ 33.] The transfer was made without authorization, without notice, and in direct violation of both orders. The evidence further shows that Mr. Davis later attempted to remit only the remaining balance of the account to the Receiver after taking funds for personal use, conduct that strongly indicates an

intentional disregard for the Court’s authority. [Id. at ¶¶ 73-75.] Therefore, the Court finds beyond a reasonable doubt that this transfer constitutes willful contempt.

Sixth, separately and independently, the Court finds that Defendants’ failure to comply with the December 22, 2025, order requiring the return of $156,300 constitutes contempt. The order imposed a clear and affirmative obligation, and the record reflects no meaningful effort to comply, no proposal for payment, and no credible showing of inability to do so. This ongoing noncompliance further supports the conclusion that Defendants have acted in willful disregard of the Court’s orders.

Accordingly, the Court finds that Plaintiff has not met its burden regarding the November 6 and November 24, 2025 transfers, but has established beyond a reasonable doubt that Defendants committed contempt concerning the December 15, 2025 transfer, the post-December 22, 2025 transfers and attempted transfers, and the failure to return funds as ordered.

Therefore, the OSC is DISCHARGED IN PART AND SUSTAINED IN PART. The Court finds no contempt regarding the transfers on November 6 and November 24, 2025. Additionally, the Court finds Defendants in contempt for the December 15, 2025 transfer, both attempted and completed transfers in January 2026, the February 9, 2026 transfer, and the failure to return $156,300 as required by the December 25, 2025 order.

The Court shall decide on appropriate sanctions and conditions for purge at the hearing pursuant to Code of Civil Procedure section 1218.

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