Justin Mayer v. Daniel N. Glassman, et al.

(Stanley Mosk Courthouse: Dept. 406) August 26, 2026 DEPARTMENT 406 LAW AND MOTION RULINGS

JUSTIN MAYER, Plaintiff, v. DANIEL N. GLASSMAN, et al., Defendants. | Case No.: 24STCV11239 [Consolidated with 26STCV02285] Hearing Date: August 26, 2026 [TENTATIVE] order RE: defendant glassman consulting group, inc.'s motion to strike | | | I. BACKGROUND a. Allegations On May 3, 2024, Plaintiff Justin Mayer filed this action against Defendants Daniel Glassman (Glassman) and Glassman Technology Group, Inc. (GTG), asserting causes of action for (1) breach of fiduciary duty, (2) conversion, (3) common count, and (4) accounting.

The complaint arises from the following facts. In 2008, Plaintiff and Glassman established a joint business venture, which eventually incorporated as Strata Labs, Inc. (Strata Labs), to develop, market, and sell proprietary software and related services. (Compl. P.P. 10-11.) Plaintiff and Glassman were equal shareholders in Strata Labs and had equal ownership of all proprietary software and other intellectual property, though Plaintiff was primarily responsible for developing the proprietary software. (Id., P.P. 11-12.)

In 2018, Glassman expressed a desire to dissolve Strata Labs because he was being hired by the company's biggest client, Coralisle Group. (Compl. P. 14.) Plaintiff agreed on the condition that he would remain an equal partner in the business and continue to receive an equal share of proceeds. (Ibid.) This arrangement worked until 2022, when Glassman expressed a desire to end the business partnership entirely. (Id., P.P. 14-15.) Plaintiff was amenable to this, but requested a proper dissolution of the business relationship that would ensure he received his fair share. (Id., P. 15.)

Glassman never responded to this request and simply stopped paying Plaintiff his share of the company's proceeds. (Ibid.) Glassman has used

his wholly-owned company, GTG, to exploit the software and intellectual property of Strata Labs to service the company's former clients--including Coralisle Group--without compensating Plaintiff. (Compl. P.P. 17-18.) b.

Procedural History

On August 2, 2024, the case was removed to federal district court. On October 4, 2024, the district court issued an order declining jurisdiction and remanding the case back to this Court. On October 27, 2025, Plaintiff filed a motion for leave to file a first amended complaint to add Glassman Consulting Group, Inc. (GCG) as a defendant. The Court denied the motion on January 2, 2026. On January 22, 2026, Plaintiff filed a separate action against GCG, Justin Mayer v. Glassman Consulting Group, Inc. (26STCV02285).

On February 19, 2026, the Court ordered the two cases related, with this case (24STCV11239) as the lead case. On March 23, 2026, the Court consolidated the two cases, with 24STCV11239 as the lead case. c. Complaint Against GCG The complaint against GCG asserts causes of action for (1) conversion, (2) common count, (3) accounting, (4) aiding and abetting breach of fiduciary duty, and (5) unjust enrichment. Plaintiff filed the operative First Amended Complaint (FAC) on June 11, 2026. Plaintiff alleges that clients were directed to pay GCG, then part of the profits were distributed to GTG, then a smaller portion was distributed to Strata Labs.

Plaintiff alleges that Glassman used this "waterfall" distribution to skim the profits for himself and deprive Plaintiff of the amounts owed to him. d. Instant Motion On August 5, 2026, GCG filed the instant motion to strike portions of the FAC. Plaintiff filed an opposition on August 13, 2026. GCG filed a reply on August 19, 2026. II. LEGAL STANDARD Any party, within the time allowed to respond to a pleading, may serve and file a notice of motion to strike the whole or any part of that pleading. (Code Civ.

Proc., Sec. 435, subd. (b).) The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike (1) any irrelevant, false, or improper matter inserted in any pleading and (2) all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Id., Sec. 436.) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Id., Sec. 437.) III. MEET AND CONFER Before filing a demurrer or a motion to strike, the demurring or moving party is required to meet and confer with the party who filed the pleading demurred to or the pleading that is subject to the motion to strike for the purposes of determining whether an agreement can be reached through a filing of an amended pleading that would resolve the objections to be raised in the demurrer. (Code Civ.

Proc., Sec.Sec. 430.41, 435.5.) The Court finds that GCG has satisfied the meet and confer requirement. (See

Serova Decl.) IV. DISCUSSION a. Statute of Limitations Here, the claims are governed either by the three-year statute of limitations for conversion (Code Civ. Proc., Sec. 338(c)) or the catchall four-year statute of limitations (id., Sec. 343). The GCG complaint was filed in January 2026. Accordingly, claims based on conduct predating January 2022 would be time-barred unless an exception applies.

1. Delayed Discovery The discovery rule "postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action." (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807.) "In order to rely on the discovery rule for delayed accrual of a cause of action, '[a] plaintiff whose complaint shows on its face that his claim would be barred without the benefit of the discovery rule must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.'" (Id. at p. 808, quoting McKelvey v.

Boeing North American, Inc. (1999) 74 Cal.App.4th 151, 160.) Here, the FAC makes the following allegation: Mayer did not discover, and could not reasonably have discovered, GCG's role in the diversion of the venture's revenues until the course of discovery in the related action, Mayer v. Glassman, Case No. 24STCV11239, in 2025. Specifically, Mayer first learned that GCG (rather than GTG) was the contracting counterparty for at least one of the venture's largest clients on or about August 25, 2025, when the Department of Specialized Care for Children at the University of Illinois at Chicago ("DSCC") responded to a subpoena and disclosed that its contracts were with GCG.

Mayer thereafter learned the structure and operation of the GCG-to- GTG-to-Strata-to Mayer payment "waterfall" through Glassman's sworn deposition testimony on August 27, 2025, and through financial records that Defendants did not produce until on or about August 26, 2025--the eve of that deposition. Mayer was unable to discover these facts earlier despite reasonable diligence because the payments were routed through entities Glassman solely controlled and to which Mayer had no access; because Glassman controlled all of the venture's financial information; and because Glassman repeatedly represented to Mayer that the venture's revenues were being split equally, as set forth below.

Mayer had no reason to suspect, and did not suspect, that GCG was being used as a vehicle to divert and conceal the venture's revenues until the 2025 disclosures described above. (FAC P. 20.) This sufficiently pleads delayed discovery under Fox. The FAC specifically describes the time and manner of discovery: the August 25, 2025 subpoena to DSCC revealed that GCG, not GTG,

contracted with DSCC; and the August 26, 2025 production of documents and August 27, 2025 deposition of Glassman revealed the "waterfall" payment structure. The FAC also explains the inability to discover the facts earlier through reasonable diligence: Glassman's sole control of the entities and relevant financial information; and Glassman's representations to Plaintiff that revenues were being split evenly. GCG argues that the amended allegations still fail to satisfy Fox because a plaintiff is required "to conduct a reasonable investigation after becoming aware of an injury." (Fox, supra, 35 Cal.4th at p. 808.)

A plaintiff is "charged with knowledge of the information that would have been revealed by such an investigation." (Ibid.) However, this "is normally a question of fact." (Id. at p. 810.) The court in Fox noted that other cases resolving the statute of limitations as a matter of law were decided on summary judgment, with "a more fully developed factual basis for determining when and how the plaintiff discovered an injury, whether the plaintiff conducted a reasonable investigation, when such an investigation would have brought to light the factual basis for the cause of action for which the plaintiff sought delayed accrual, and whether the plaintiff could have discovered the factual basis for a cause of action earlier by exercising reasonable diligence." (Ibid.)

Thus, the court in Fox held that on a demurrer, "we must assume to be true Fox's allegations that she 'did not discover, nor suspect, nor was there any means through which her reasonable diligence would have revealed, or through which she would have suspected the Ethicon GIA-type stapler as a cause of her injury until the deposition of [Dr. Gladen] was taken on August 13, 2001.'" (Fox, supra, 35 Cal.4th at p. 811.) The court went on to conclude that the statute of limitations defect "could have been cured by the proposed amendment." (Ibid.)

Specifically, "Fox's proposed second amended complaint would have properly alleged that the products liability cause of action did not accrue until after the stapler malfunction was revealed during the deposition of Dr. Gladen." (Ibid.) That is precisely what Plaintiff alleges in the FAC, i.e., he could not have discovered the cause of action until the "waterfall" scheme was revealed during document production and Glassman's deposition. (FAC P. 20.) In sum, the FAC adequately pleads delayed discovery.

2. Fraudulent Concealment "The doctrine of fraudulent concealment tolls the statute of limitations where a defendant, through deceptive conduct, has caused a claim to grow stale." (Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1192.) "In support of this doctrine, a plaintiff must allege the supporting facts--i.e., the date of discovery, the manner of discovery, and the justification for the failure to discover the fraud earlier--with the same particularity as with a cause of action for fraud." (Fuller, supra, 216 Cal.App.4th at p. 962.) Here, the FAC makes the following allegation: Glassman, acting

through and with GCG, affirmatively concealed the diversion of the venture's revenues from Mayer. Glassman structured the flow of client payments through GCG and GTG so that the true amount of revenue generated by the venture's clients was hidden from Mayer; arbitrarily determined, at the GCG and GTG levels, what portion of those revenues would be passed along to Mayer; and repeatedly represented to Mayer--including in the period from 2018 through August 2022--that Mayer was receiving his full 50% share of the venture's revenues when, in fact, he was not.

These representations were false when made, and Glassman and GCG knew them to be false. Mayer reasonably relied on these representations and on Glassman's control of the venture's finances, and that reliance, together with Glassman's concealment of the true revenues at the GCG level, prevented Mayer from discovering the diversion until 2025. (FAC P. 21.) As discussed above, the FAC pleads the date and manner of discovery with the requisite specificity. (See FAC P. 20.) The FAC then specifically describes Glassman's alleged concealment through his exclusive control of the entities and financial information, and his representations that Plaintiff was receiving his full 50% share. (Id., P.P. 20-21.)

Therefore, the FAC adequately pleads fraudulent concealment.

3. Emails from 2008 and 2009 GCG argues that Plaintiff's emails from 2008 and 2009 show that he was aware of GCG's involvement much earlier than 2025. However, the emails are external evidence, and the inferences to be drawn from their contents are questions of fact beyond the purview of a motion to strike. The Court's January 2, 2026 order did not adjudicate the merits of Plaintiff's allegations nor make any evidentiary determinations. Therefore, the emails are not dispositive. b. Due Process GCG argues that the FAC is an improper attempt to assert a fraud claim against Glassman.

GCG argues that this deprives Glassman of due process, because Glassman is not named in the FAC and cannot defend it. The FAC asserts no fraud claim and no claim against Glassman. The FAC only asserts claims against GCG. The fraud allegations pertain solely to the fraudulent concealment tolling theory for the claims against GCG. GCG could only have acted through an agent, and that agent was allegedly Glassman. This alone does not create an independent fraud action against Glassman. The claims are ultimately against GCG only.

GCG cannot, on the one hand, complain that the FAC fails to allege fraudulent concealment and, on the other hand, challenge the fraudulent concealment allegations as an improper fraud claim. There is no due process issue as to Glassman because he is not subject to liability under the FAC. V. CONCLUSION Defendant Glassman Consulting Group, Inc.'s motion to strike is DENIED. Case Number: 24STCV18864 Hearing Date: August 26, 2026 Dept: 406