Demurrer
Here, on 10/8/25 the court granted the plaintiff’s discovery motion and ordered Cleeland to provide verified responses, without objection, within 20 days after service of notice of this ruling, for the Form Interrogatories, Special Interrogatories, and Requests for Production. The plaintiff served a notice of the ruling on 10/9/25. Cleeland has failed to serve the court ordered responses. (Beggs Decl. ¶4)
In the instant motion, plaintiff requests various sanctions, including terminating sanctions. Because terminating sanctions are drastic, it is generally recognized that “terminating sanctions are to be used sparingly, only when the trial court concludes that lesser sanctions would not bring about the compliance of the offending party.” (R.S. Creative, Inc. v. Creative Cotton, Ltd. (1999) 75 Cal.App.4th 486, 496.) However, the court does find evidentiary sanctions warranted and therefore the motion is GRANTED, in part.
As a result of the failure to comply with the court’s 10/8/25 order, it is ORDERED that at the trial of this matter, (1) Rhonda Cleeland will be prohibited from offering any evidence at trial relating to any documents which were the subject of the seven requests for production of documents attached to the Motion to Compel at ROA 42 and (2) Rhonda Cleeland will be prohibited from offering any evidence at trial relating to any of the contentions identified in special interrogatories 1-18 attached to the Motion to Compel at ROA 42.
In addition, the plaintiff’s request for monetary sanctions pursuant to Code of Civil Procedure §2023.030(a) and 2030.290 is GRANTED, in part, and Rhonda Cleeland is ordered to pay $677.98 in monetary sanctions to plaintiff, through her attorney of record, within 30 days. The plaintiff’s request that the court order sanctions pursuant to Code of Civil Procedure §177.5 is DENIED because Section 177.5 was not referenced in the Notice of Motion.
Counsel for Plaintiff is to give notice. 3 Rambunctious Defendants J.W. Financial Solutions Inc., (“JWF”), J.W. FS LLC (“JW Ventures, LLC FS”), W. Joseph Mashini (“Mashini”), Palisade Legal Group PLLC vs. J.W. (“Palisade”), and PLG Staffing LLC’s (“Defendants” all together) Financial demurrer to plaintiffs Rambunctious Ventures, LLC, and Robert Solutions Inc. Ainsworth’s (“Plaintiffs” together) Second Amended Complaint (“SAC”) is SUSTAINED.
Defendants demur to all seven of the causes of action (“COA”) in the SAC on the basis they fail to state sufficient facts. (Civ. Proc. Code § 430.10(e).)
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The court first notes since Mashini’s prior demurrer was ruled as moot by the court (ROA 230) Mashini may join in this demurrer.
COA No. 1 – Breach of Implied Contract
This is a new COA, which was not included in the First Amended Complaint (“FAC”). Plaintiffs were not given leave to add any new
COA in the court’s ruling on the prior demurrer. (ROA 230.) As such, this COA was improperly added. (Harris v. Wachovia Mortg., FSB (2010) 185 Cal. App. 4th 1018, 1023.) The court also notes Plaintiffs have not pled sufficient facts to support this COA.
“To state a cause of action for breach of contract, a party must plead the existence of a contract, his or her performance of the contract or excuse for nonperformance, the defendant's breach and resulting damage. [Citation.] If the action is based on alleged breach of a written contract, the terms must be set out verbatim in the body of the complaint or a copy of the written agreement must be attached and incorporated by reference.” (Harris v. Rudin, Richman & Appel (1999) 74 Cal. App. 4th 299, 307.)
“Contracts may be express or implied. These terms however do not denote different kinds of contracts, but have reference to the evidence by which the agreement between the parties is shown. If the agreement is shown by the direct words of the parties, spoken or written, the contract is said to be an express one. But if such agreement can only be shown by the acts and conduct of the parties, interpreted in the light of the subject matter and of the surrounding circumstances, then the contract is an implied one.” (Marvin v. Marvin (1976) 18 Cal. 3d 660, 686 fn.16.)
Plaintiffs identified a contract which indicated it was effective 11/01/21, however it is not signed by any of the Defendants. (SAC, Ex. 12.) Plaintiffs contend an email dated 06/29/21 supports an implied contract exists based upon the ICA, however that email predates the alleged ICA. (SAC, Ex. 12.) The email was only from someone at JWF, does not state anything regarding Palisade or PLG, and refers to a ‘Purchase Reimbursement and Commission,’ none of which support the allegations.
The demurrer is SUSTAINED without leave to amend as this COA was impermissibly added.
COA No. 2 – Breach of Oral Contract
The elements of breach of oral contract are the same as a written contract noted above.
This COA is uncertain as it appears to now be alleging two separate oral contracts (SAC ¶¶ 101-123).
As to the Palisade contract allegations, Plaintiffs improperly swapped Palisade as the breaching party in for Moccia, which Plaintiffs alleged was the breaching party in the First Amended Complaint (“FAC”). The court in its 10/17/25 ruling denied Plaintiffs’ motion for leave to amend to substitute Palisade as the breaching defendant. (ROA 230.) The court specifically held Plaintiffs were not permitted to substitute as Plaintiffs were aware of the relationship between Palisade and Moccia, so the relation back doctrine under Civ. Proc. Code § 474 was not available to avoid the running of statute of limitations.
The demurrer is SUSTAINED without leave to amend as to Palisade on this COA.
As for the allegations regarding the JWF second contract, the presented written contract which purports to have the terms of the oral contract is not signed by any of the Defendants. The unsigned exhibit controls over contrary allegations in the body of the pleading. (Dodd v. Citizens Bank of Costa Mesa (1990) 222 Cal. App. 3d 1624, 1627 (“Dodd”).)
Plaintiffs alleged evidence of the oral contract is in SAC Exs. 3-6. Exhibit 6 shows a “starting balance of $145,686” with alleged payments owed from 09/14/21 through 01/30/23. The alleged payback schedule transpires longer than one year, and the sum is more than the $100,000 permitted under the code. The allegations of an oral contract violate the Statute of Frauds. (Civ. Code § 1624(a)(1) and (7).)
Based upon the lack of supporting facts and the Statute of Frauds, the demurrer is SUSTAINED with one final leave to amend as to the remaining defendants.
COA No. 3 – Breach of Oral Contract
As to the oral JWF first contract, Plaintiffs allege that JWF agreed to offer the FLP Plan to JWF’s clients in exchange for FLP paying JWF certain portions of a one-time enrollment fee and subsequent monthly fees paid by clients. (SAC ¶ 114.) FLP would retain the remaining fees, except for some being paid to a marketing affiliate. FLP also made payments on a person vehicle for Mashini.
Although Defendants allegedly breached the JWF first contract in several ways (ROA 117) Plaintiffs do not allege any of the breaches were requirements or elements of the JWF first contract. There are no allegations Defendants were required to enroll clients in the FLP plan, that Defendants could not solicit existing FLP clients or suggest Veritas’s services, that Defendants were required to permit Plaintiffs access to Defendant’s CRMS, or that Defendants were prohibited from informing RAM and CFT the JWF first contract was terminated. Plaintiffs have also alleged no specific damages.
The demurrer is SUSTAINED with one final leave to amend.
COA No. 4 – Breach of Oral Contract
This COA is almost identical to COA No. 3, except for it is alleged against Palisade. It too suffers from any alleged breach of any terms of the purported Palisade first contract and any damages arising from said breach(es).
The demurrer is SUSTAINED with one final leave to amend.
COA No. 5 – Breach of Implied Covenant Of Good Faith and Fair Dealing
“There is no obligation to deal fairly or in good faith absent an existing contract. [Citation.] If there exists a contractual relationship between the parties. . . the implied covenant is limited to assuring compliance with the express terms of the contract, and cannot be extended to create obligations not contemplated in the contract.” (Racine & Laramie, Ltd. v. Dep't of Parks & Recreation (1992)11 Cal. App. 4th 1026, 1032.)
As Plaintiffs have failed to allege any valid contract between Plaintiffs and Defendants, any actions Defendants performed that allegedly destroyed or injured Plaintiffs rights, and any resulting damages, they have not adequately pled this COA.
The demurrer is SUSTAINED with one final leave to amend.
COA No. 6 – Intentional Interference With Contract
“The elements which a plaintiff must plead to state the cause of action for intentional interference with contractual relations are (1) a valid contract between plaintiff and a third party; (2) defendant's knowledge of this contract; (3) defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (Quelimane Co. v. Stewart Title Guar. Co. (1998) 19 Cal. 4th 26, 55.)
Plaintiffs alleged JWF and Palisade clients who enrolled in the FLP Plan pursuant to the JWF first contract and Palisade first contract were required to enter into a separate agreement with FLP. (SAC ¶ 155.) Plaintiffs have pled the contract and its terms between FLP and its clients and attached a copy of the subject contract to the SAC. (SAC ¶¶ 156-157, Ex. 2.) Plaintiffs alleged Defendants knew of the contracts. (SAC ¶ 161.) Plaintiffs also alleged disruption of contracts between Plaintiffs and their clients, and subsequent damages. (SAC ¶¶ 163, 168.)
However, the terms of the contract(s) that were allegedly interfered with show they were at will contracts with the agreement being month to month and that the FLP Clients could “cancel the agreement, for any reason, without penalty or obligation.” (SAC, Ex. 2 p. 1.) A COA for tortious interference with at-will contracts requires independent wrongfulness [i.e., wrongful apart from the fact of the interference itself]. (Ixchel Pharma, LLC v. Biogen, Inc. (2020) 9 Cal. 5th 1130, 1137.) “It is now the plaintiff's burden to prove, as an element of the cause of action itself, that the defendant's conduct was independently wrongful and, therefore, was not privileged rather than the defendant's burden to prove, as an affirmative defense, that it's conduct was not independently wrongful and therefore was privileged.” (Bed, Bath & Beyond of La Jolla, Inc. v.
La Jolla Vill. Square Venture Partners (1997) 52 Cal. App. 4th 867, 881.)
Plaintiffs’ only allegation of wrongful conduct was that the conduct also constituted a breach of the agreements (as defined above). (SAC ¶ 163.) It is unclear what ‘Agreements’ Plaintiffs are referring
to as the JWF first and second contracts and Palisade first contract were not adequately pled. Plaintiff has also not pled any independent wrongfulness on the part of Defendants.
The economic loss rule (“ELR”) does not apply to an interference COA as Plaintiffs are not alleging damages for interference of any contracts between Plaintiffs and Defendants (where the ELR would apply), but rather interference with contract between Plaintiffs and third-party (where ELR does not apply)
The demurrer is SUSTAINED with one final leave to amend.
COA No. 7 – Intentional Interference With Prospective Economic Advantage
“Intentional interference with prospective economic advantage has five elements: (1) the existence, between the plaintiff and some third party, of an economic relationship that contains the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentionally wrongful acts designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm proximately caused by the defendant's action.” (Roy Allan Slurry Seal, Inc. v. Am. Asphalt S., Inc. (2017) 2 Cal. 5th 505, 512.)
The same analysis as COA No. 6 applies here.
The demurrer is SUSTAINED with one final leave to amend.
Plaintiffs are given leave to file an amended complaint within 15 days of written notice of the ruling.
Case Management Conference is CONTINUED to October 16, 2026 at 9.30 a.m.
Defendants to give notice. 4 Burke v. O/C Benwith Capital Partners, LLC 5 Lawrence v. The motion of plaintiff/cross-defendant, Robert D. Lawrence Chang (Lawrence) for an order fixing amount of appeal bond is GRANTED IN PART.
Lawrence moves for an order fixing the amount of the bond to be given to stay enforcement pending appeal of the Interlocutory Judgment for Partition by Sale entered on February 9, 2026, pursuant to Code of Civil Procedure section 917.4.
As an initial matter, Lawrence cites no authority that would permit the Court to allow Lawrence to use the equity in the subject property in lieu of filing an undertaking as required by section 917.4. The Court therefore declines to do so.