SILVERMAN v. HOOVER

LAW AND MOTION TENTATIVE RULINGS DATE: MAY 14, 2026 TIME: 8:30 A.M.

No. 25CV03188

SILVERMAN v. HOOVER

DEFENDANT’S DEMURRER, MOTION TO STRIKE

The demurrer is overruled and the motion to strike is denied. Defendant is ordered to file an answer no later than June 5, 2026.

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228.) The court “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law ....” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.)

In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters; therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (Code Civ. Proc., §§ 430.30, 430.70.) The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action. (Hahn, supra, 147 Cal.App.4th at p. 747.)

Plaintiff Eric Silverman’s first amended complaint (“FAC”), taken as true, alleges a failed wine business between the parties, where defendant Mark Hoover (“defendant”) would produce the wine and plaintiff would sell it. The venture began in 2016 and soured by 2021 when defendant developed a second wine business and allegedly began diverting funds from the original venture to it.

The FAC alleges that defendant, as the 60% controlling member and manager of nominal defendant Integrity Wines, LLC (“LLC”), utilized his unilateral authority to misappropriate assets and business opportunities for his separately owned entity, VDV Wines, Inc. (FAC ¶¶ 7-8, 29, 31.) Integrity Wines LLC is the sole general partner of Integrity Wines, LP (“LP”), and any diversion of LP inventory or revenue directly impaired the value of the LLC’s general partnership, which is its primary asset. (FAC ¶¶ 2, 19.)

The FAC alleges that defendant altered digital ledgers to conceal the commingling of personal and corporate funds and with his controlling interest, a derivative action can be maintained without any pre-suit demand since it would be futile and useless act. (FAC ¶¶ 19, 29, 31, 35, 48-50, 53.) The FAC is replete with allegations of defendant’s self-dealing and alleges defendant has directly diminished the value of the LLC’s primary asset. (FAC ¶¶ 25, 29-30, 34, 36-37, 40, 45-46, 52, 56.) Plaintiff made claims for breach of contract, breach of implied covenant of good faith and fair dealing, breach of fiduciary duty, conversion, intentional interference with economic advantage, and accounting.

LAW AND MOTION TENTATIVE RULINGS DATE: MAY 14, 2026 TIME: 8:30 A.M.

Defendant demurs to the entirety of the FAC on the grounds it fails to state sufficient facts to support any cause of action as well as that all causes of action cannot be stated as derivative claims.

The Court finds that based on the allegations, plaintiff may bring a derivative action. By diverting LP inventory at below-market rates to his affiliated entity, defendant allegedly directly diminished the value of the LLC’s primary asset. Where “the gravamen of the complaint is injury to the corporation, or to the whole body of its stock and property” an action is properly derivative. (Paclink Communications Internat. v. Superior Court (2001) 90 Cal.App.4th 958, 964; see also Pearce v. Superior Court (1983) 149 Cal.App.3d 1065-1066 [derivative action appropriate to remedy wrongs to corporation by management]; Wallner v.

Parry Professional Bldg. Ltd. (1994) 22 Cal.App.4th 1446, 1454.) Further, his allegations are sufficient to show a formal pre-suit demand would have been futile and an idle act. (Reed v. Norman (1953) 152 Cal.App.2d 892, 900; Kanter v. Reed (2023) 92 Cal.App.5th 191, 205-206; Corp. Code § 17709.02, subd. (a)(2).)

As to each separate cause of action, the Court finds plaintiff’s allegations are sufficiently stated and the demurrer is overruled.

Defendant’s motion to strike the references to the LP and plaintiff’s requests for relief as to the LP is denied. Those allegations are key to the underlying derivative action and redress for defendant’s self-dealing. The motion to strike personal damages claims is denied since plaintiff may plead an individual claim where a majority owner uses his control to disproportionately benefit themselves to the detriment of the minority owner. (Jones v. H.F. Ahmanson & Co. (1969) 1 Cal.3d 93, 107; Goles v.

Sawhney (2016) 5 Cal.App.5th 1014, 1018; FAC ¶¶ 40, 46, 56.) Finally, defendant’s motion to strike unspecified “conclusory and legally unsupported allegations” as to conversion, interference, and punitive-type misconduct, as well as “immaterial legal conclusions based on inapplicable statutory schemes” is denied since the specific portions of the FAC to be stricken are not quoted, or references to paragraphs, causes of action or counts are not listed. (Cal. Rules of Court, rule 3.1322(a).)