1 pat lundvall (pro hac vice application...

Defendants’ Demurrers to Complaint

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

PAT LUNDVALL (Pro Hac Vice Application Forthcoming) JESSICA WOELFEL (State Bar No. 226939) MCDONALD CARANO WILSON, LLP 2300 West Sahara Avenue, Suite 1000 Las Vegas, Nevada 89102 Telephone Number: (702) 873-4100 Facsimile Number: (702) 873-9966 Email: [email protected] [email protected] MONTY A. McINTYRE (State Bar No. 95796) 501 West Broadway, Suite 1330 San Diego, California 92101 Telephone: (619) 990-4312 Email: [email protected] Attorneys for Defendants Integrated Sports Marketing, Inc. and David R. Miller

THE SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SAN DIEGO

BREES DREAM FOUNDATION, Plaintiff, vs. INTEGRATED SPORTS MARKETING, INC. a California corporation; and DAVID R. MILLER, an individual, Defendants.

Case No. 37-2012-00087492-CU-BC-CTL DEFENDANTS INTEGRATED SPORTS MARKETING, INC’S. and DAVID R. MILLER’S:

(1) NOTICE OF DEMURRERS AND DEMURRERS TO COMPLAINT, and (2) MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEMURRERS TO COMPAINT

IMAGED FILE Date: April 19, 2013, 2013 Time: 11:00 a.m. Dept.: C-70

1


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

TABLE OF CONTENTS

DEMURRERS ................................................................................................................................................................ 1

POINTS AND AUTHORITIES ........................................................................................................................................ 3

INTRODUCTION ........................................................................................................................................................... 3

FACTUAL ALLEGATIONS MADE BY BREES IN COMPLAINT .................................................................................... 6

The 2009 Contribution Agreement and 2010 Championship ........................................................................... 6

2010 Contribution Agreement and 2011 Championship .................................................................................. 7

2012 Championship and Alleged Breaches of the 2010 Contribution Agreement ................. 7

Brees Allegedly Terminates the 2010 Contribution Agreement ....................................................................... 8

ARGUMENT .................................................................................................................................................................. 9

Brees’ First Cause of Action, for Breach of Contract, Fails to State a Valid Claim of Action Against Both Miller and ISM ................................................................................................................................. 10

Brees’ Second Cause of Action, for “Breach of the Implied Covenant of Good Faith and Fair Dealing,” Fails to State A Claim Against Both Miller and ISM ................................................................................. 12

Brees’ Third Cause of Action, for “Breach of Fiduciary Duty,” Fails to State A Claim Against Both Miller and ISM .................................................................................................................................................. 13

Brees’ Fourth Cause of Action, for “Conversion,” Fails to State a Claim Against Both Miller and ISM .......... 15

Brees’ Fifth Cause of Action, for “Accounting,” Fails to State a Claim Against Both Miller and ISM .............. 16

Brees’ Sixth Cause of Action, for “Constructive Trust,” Fails to State a Claim Against Both Miller and ISM .. 17

Brees’ Seventh Cause of Action, for “Unlawful and Unfair Business Practices in Violation of California Business & Professions Code Sections 17200 et. seq.,” Fails to State a Claim Against Miller and ISM .................................................................................................................................................. 19

Brees Fails To Allege Unlawful Conduct. ...................................................................................................... 19

Brees Fails To Allege Any “Unfair” Business Practice ................................................................................... 21

Brees Does Not Allege Any Fraudulent Conduct ........................................................................................... 22

Brees’ Eighth Cause of Action, for “Declaratory Judgment,” Fails to State a Claim Against Both Miller and ISM .................................................................................................................................................. 22

TO THE EXTENT BREES RELIES UPON VAGUE ALLEGATIONS OF CONDUCT BY “DEFENDANTS,” BREES’ ALLEGATIONS ARE FATALLY UNCERTAIN ............................................................................................................. 23

THE DEMURRERS SHOULD BE SUSTAINED WITHOUT LEAVE TO AMEND ........................................................ 25

CONCLUSION ............................................................................................................................................................. 25

2


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

TABLE OF AUTHORITIES

Cases

Bell Atlantic Corp. v. Twombly (2007) 550 U.S. 544 .................................................................................................... 13

Bernstein v. Piller (1950) 98 Cal. App. 2d 441 ............................................................................................................. 27

Berryman v. Merit Prop. Mgmt., Inc. (2007) 152 Cal. App. 4th 1544 ........................................................................... 23

Bionghi v. Metro Water Dist. of S. California (1999) 70 Cal. App. 4th 1358 ................................................................. 17

Burlesci v. Peterson (1998) 68 Cal. App. 4th 1062 ...................................................................................................... 19

Campbell v. PricewaterhouseCoopers, CIV S-06-2376LKK/GGH, 2008 WL 3836972 (E.D. Cal. Aug. 14, 2008) ....... 21

Careau & Co. v. Sec. Pac. Bus. Credit, Inc. (1990) 222 Cal. App. 3d 1371 ................................................................. 17

Carma Developers (Cal.), Inc. v. Marathon Development California, Inc. (1992) 2 Cal.4th 342 .................................. 16

Chabner v. United of Omaha Life Ins. Co. (9th Cir. 2000) 225 F.3d 1042 ................................................................... 23

Communist Party v. 522 Valencia, Inc. (1995) 35 Cal. App. 4th 980 ........................................................................... 21

Embarcadero Mun. Impr. Dist. v. County of Santa Barbara (2001) 88 Cal. App. 4th 781 ............................................ 21

Estate of Archer (1987) 193 Cal. App. 3d 238 ............................................................................................................. 13

Foley v. Interactive Data Corp. (1988) 47 Cal. 3d 654 ................................................................................................. 16

Gordon Bldg. Corp. v. Gibraltar Sav. & Loan Ass'n (1966) 247 Cal. App. 2d 1 ........................................................... 15

Guz v. Bechtel Nat’l, Inc. (2000) 24 Cal. 4th 317, 327 ................................................................................................. 17

Harris v. Rudin, Richman & Appel (1999) 74 Cal. App. 4th 299 ................................................................................... 13

Hawley Bros. Hardware Co. v. Brownstone (1899) 123 Cal. 643, 645-648 ................................................................. 28

Krantz v. BT Visual Images (2001) 89 Cal. App. 4th 164 ............................................................................................. 23

Lazar v. Hertz Corp. (1999) 69 Cal. App. 4th 1494 ...................................................................................................... 23

Lesperance v. North American Aviation, Inc. (1963) 217 Cal. App. 2d 336 ................................................................. 13

Motors, Inc. v. Times Mirror Co. (1980) 102 Cal. App. 3d 735 ..................................................................................... 25

Moya v. Northrup (1970) 10 Cal. App. 3d 276 ............................................................................................................. 15

Oasis West Realty, LLC v. Goldman (2011) 51 Cal. 4th 811 ....................................................................................... 14

Oppenheimer v. Gen. Cable Corp. (1956) 143 Cal. App. 2d 293 ................................................................................. 15

Osseous Technologies of Am., Inc. v. DiscoveryOrtho Partners LLC (2010) 191 Cal. App. 4th 357 ........................... 26

Otworth v. Southern Pac. Transportation Co. (1985) 166 Cal. App. 3d 452 ................................................................ 14

3


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Otworth v. Southern Pacific Transp. Co. (1985) 166 Cal. App. 3d 452 .................................................................. 13, 14

Pacific Lumber Co. v. Superior Court, 226 Cal.App.3d at pp. 377–378 ....................................................................... 22

PCO, Inc. v. Christiansen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal. App. 4th 384 ............... 19

People v. Orange County Charitable Services (1999) 73 Cal. App. 4th 1054 .............................................................. 18

People v. Orange County Charitable Services, 73 Cal. App. 4th at 1075 .................................................................... 24

Plummer v. Day/Eisenberg, LLC (2010) 184 Cal. App. 4th 38 ..................................................................................... 19

Racine & Laramie, Ltd. v. Dep’t of Parks & Rec. (1992) 11 Cal. App. 4th 1026 ........................................................... 16

Sackett v. Wyatt (1973) 32 Cal.App.3d 592 ................................................................................................................. 29

Scripps Clinic v. Superior Court (2003) 108 Cal. App. 4th 917 .................................................................................... 25

Seymour v. Christiansen (1991) 235 Cal. App. 3d 1168 .............................................................................................. 15

Software Design & Application, Ltd. v. Hoefer & Arnett, Inc. (1996) 49 Cal. App. 4th 472 ........................................... 19

State of California ex rel Van de Kamp v. Texaco, Inc. (1988) 46 Cal. 3d 1147 .......................................................... 25

Tarmann v. State Farm Mut. Auto Ins. Co. (1991) 2 Cal. App. 4th 153 ....................................................................... 26

Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal. App. 4th 153 ...................................................................... 13

Teselle v. McLaughin (2009) 173 Cal. App. 4th 156 .................................................................................................... 20

Twaite v. Allstate Ins. Co. (1989) 216 Cal. App. 3d 239 .............................................................................................. 13

Vater v. Glenn (1958) 49 Cal.2d 815 ........................................................................................................................... 29

Vu v. California Commerce Club, Inc. (1997) 58 Cal. App. 4th 229 ............................................................................. 19

Wise v. Southern Pacific Co. (1963) 223 Cal. App. 2d 50...................................................................................... 13, 14

Rules

Bus. & Prof. Code § 17200 .......................................................................................................................................... 23

C.C.P. § 430.10(e) ..................................................................................................................................................... 5, 6

C.C.P. § 430.10(f). ..................................................................................................................................................... 5, 6

Cal. Bus. & Prof. Code § 17510.5 ................................................................................................................................ 24

Cal. Bus. & Prof. Code § 17510.8 .......................................................................................................................... 18, 24

Cal. Code Civ. Proc. § 425.10(a) ................................................................................................................................. 13

1


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

TO PLAINTIFF AND ITS ATTORNEY OF RECORD:

PLEASE TAKE NOTICE that on April 19, 2013 at 11:00 a.m. in Department C-70

of the above-referenced court, located at 330 West Broadway, San Diego, California

92101, defendants INTEGRATED SPORTS MARKETING, INC. (“ISM”) and DAVID R.

MILLER (“Miller”) will bring for hearing its demurrers to plaintiff’s Complaint on the

grounds set forth below.

DEMURRERS

The Defendants demur to plaintiff’s Complaint on each of the following grounds:

First Cause of Action: “Breach of Contract”

1. The first cause of action fails to state facts sufficient to constitute a cause

of action. C.C.P. § 430.10(e).

2. The first cause of action is uncertain. C.C.P. § 430.10(f).

Second Cause of Action: “Breach of the Implied Covenant of Good Faith and Fair

Dealing”

1. The second cause of action fails to state facts sufficient to constitute a

cause of action. C.C.P. § 430.10(e).

2. The second cause of action is uncertain. C.C.P. § 430.10(f).

Third Cause of Action: “Breach of Fiduciary Duty”

1. The third cause of action fails to state facts sufficient to constitute a cause

of action. C.C.P. § 430.10(e).

2. The third cause of action is uncertain. C.C.P. § 430.10(f).

Fourth Cause of Action: “Conversion”

1. The fourth cause of action fails to state facts sufficient to constitute a

cause of action. C.C.P. § 430.10(e).

2. The fourth cause of action is uncertain. C.C.P. § 430.10(f).

Fifth Cause of Action: “Accounting”

3


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

POINTS AND AUTHORITIES

I. INTRODUCTION

ISM is a corporation formed by Miller in 1999 that owns and has been

successfully producing a celebrity golf tournament in San Diego to benefit local charities

every year since 1999. The tournament was initially called the San Diego Celebrity

Classic golf tournament and was renamed the Celebrity Championship (identified herein

as “Tournament”). The Tournament quickly became one of the most respected celebrity

golf tournaments in the country. Over the past fourteen years, it has raised over a

million dollars for San Diego charities including Rady Children’s Hospital, San Diego

Armed Services, YMCA, Junior Seau Foundation, Friends of Scott Foundation, the MS

Society Pacific South Coast Chapter, and the Drew Brees Foundation. The

Tournament also hosts wounded warriors through its Wounded Warriors Program and

thousands of active military members and their families on its Military Appreciation Day.

Former San Diego Chargers quarterback Stan Humphries was the celebrity host

of the Tournament from 1999 through 2008. In 2009 Mr. Humphries was unable to

continue as host of the Tournament and there was no celebrity host that year. ISM then

asked New Orleans’s Saints quarterback Drew Brees to become the celebrity host for

the 2010 Tournament. Mr. Brees agreed. ISM hired Mr. Brees to host its Tournament.

Specifically, in 2009, ISM and the Brees Dream Foundation (“Brees”) entered

into agreements which, in relevant part, allowed ISM to use Mr. Brees’ name and

likeness, and required Mr. Brees to attend the Tournament and perform certain

functions to promote the Tournament. In exchange ISM guaranteed that Brees would

receive charity revenue in the six figures from the Tournament. In 2009, Brees signed a

one-year agreement with ISM for the 2010 Tournament. In 2010, Brees signed a four-

year contract with ISM for the Tournament for the years 2011-2014. The two contracts

are referred to herein as the “Agreements.” At all times, ISM bore the risk of all financial

commitments entered into on behalf of the Tournament.

4


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Each year ISM exceeded its financial obligations to Brees under the Agreements.

For the 2010 Tournament, ISM contractually guaranteed that it would pay $100,000 to

Brees, and actually paid Brees over $135,000. For the 2011 Tournament, ISM

contractually guaranteed that it would pay $110,000 to Brees, and paid over $189,000.

And in 2012, ISM contractually guaranteed it would pay $125,000 and successfully

generated revenue of approximately $321,000 for Brees.

While ISM repeatedly exceeded its contractual obligations, Mr. Brees

repeatedly failed to perform his agreed-upon duties. For example, Mr. Brees failed to

attend in any year the press conference at the Rady Children’s Hospital kicking off the

Tournament; failed to participate in a single round of golf to promote the Tournament in

any year; failed to show up at the Celebrity Poker Championship; and refused or failed

to show up at scheduled sponsor appearances, among many other things.1

Despite ISM’s consistent success in generating ever increasing charitable

revenues for Brees, in 2012 Brees wrongfully and ineffectively attempted to terminate its

agreement and wrongfully sued ISM and Miller alleging they had breached the

contracts. Notably, Miller has never been a party to the contacts and ISM has at all

times met its obligations under the Agreements. The only party who has breached the

Agreements is Brees.

The Complaint filed by Brees alleges numerous claims against ISM, and ISM’s

president, Miller, connected to the alleged breach of the Agreements which governed

the Tournament during the years 2010, 2011 and 2012. The claims against Miller lack

any merit whatsoever because he was never individually a party to the Agreements. As

to ISM, Brees has wrongfully and ineffectively attempted to terminate the Agreements

and has alleged eight causes of action against both ISM and Miller, for: (1) Breach of

1 Given Brees’ breach and repudiation of his future obligations, ISM has now entered into an agreement with NFL Hall of Fame Running Back Marshall Faulk to act as the Tournament’s celebrity host.

5


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Contract, (2) Breach of the Implied Covenant of Good Faith and Fair Dealing; (3)

Breach of Fiduciary Duty; (4) Conversion; (5) Accounting; (6) Constructive Trust; (7)

Unlawful and Unfair Business Practices in Violation of California Business &

Professions Code Section 17200; and (8) Declaratory Relief. None of these eight

causes of action seek a valid claim against either ISM or Miller.

With respect to the contract claims, Brees has failed to attach a copy of the

contract or recite the material terms of the Agreements verbatim, as is required under

California law and its claims thus fail against both ISM and Miller. Had Brees attached

the contract, the Court would see that Miller is not a party to the contracts with Brees,

and that the contract provisions do not support Brees’ claims against ISM. Similarly,

each of the remaining claims arising under the Agreements – those for breach of the

implied covenant of good faith and fair dealing, accounting, and declaratory relief – are

thus impermissibly alleged.

Brees also alleges a claim for breach of a fiduciary duty under Business and

Professions Code section 17510.8. Brees alleges that this section creates a fiduciary

obligation to Brees on behalf of ISM and Miller since they were allegedly soliciting

donations on behalf of a charitable foundation. Simply put, Brees misreads the statute.

Section 17510.8 creates a fiduciary relationship between a charity (or person soliciting

on behalf of a charity) and a donor; it does not create a fiduciary relationship between a

charity and a person or entity making solicitations on its behalf. As a result, Brees’

breach of fiduciary duty, constructive trust, and section 17200 claims, each of which are

predicated on Brees’ misreading of section 17510.8, fail to state a claim.

Brees’ conversion claims also fail as a matter of law because it has not and is

unable to allege a definite sum allegedly converted.

In sum, Brees has alleged no valid theory under which Miller should be

individually named in this suit, and the claims against ISM as pled fail to state a valid

cause of action. Each of the demurrers should thus be sustained without leave to

amend.

6


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

II. FACTUAL ALLEGATIONS MADE BY BREES IN COMPLAINT

On December 12, 2012, Brees filed its Complaint against ISM and Miller. ISM

and Miller were served with the Complaint on December 21, 2012.

While the Complaint is lengthy, it is conspicuously short on facts demonstrating

any valid claims against Miller. Indeed, the relevant allegations in the Complaint make

clear that the Agreements which form the entire basis of the Complaint were solely

between Brees and ISM. No allegations are made that Miller signed the relevant

agreements in his individual capacity, guaranteed the agreements, or made any oral

agreements with Plaintiff. Nor does the Complaint raise alter ego allegations.

With respect to ISM, the claims raised against it are legally insufficient. As an

initial matter, the Complaint fails to attach a copy of the relevant Agreements or recite

their terms verbatim. The breach of contract-based claims thus fails to state a valid

claim. The remainder of the claims are also legally insufficient, and are based on a

fundamental misreading by Brees of the applicable law.

Finally, the allegations of the Complaint are fatally uncertain since Plaintiff

impermissibly lumps both ISM and Miller together throughout the course of the

Complaint. The relevant factual allegations in the Complaint are as follows:

The 2009 Contribution Agreement and 2010 Championship

It is alleged: By written agreement dated November 17, 2009 (the “2009

Contribution Agreement”), “the Foundation contracted with ISM for ISM to serve as the

producer and operator of the 2010 Championship charity golf tournament and to raise

funds on behalf of the Foundation.” (Complaint at ¶ 24, emphasis added.) The 2009

Contribution Agreement also required ISM to keep appropriate, separate and detailed

book of accounts and records relating to the Championship charity golf tournament. (Id.

at ¶ 26, emphasis added).

The 2010 Championship charity golf tournament was held at the Morgan Run

Country Club in Rancho Santa Fe, California between May 20, 2010 and May 23, 2010.

(Id. at ¶ 27.) This tournament was produced and operated by ISM. (Id.) Despite the

7


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

fact that the Complaint is clear that Brees contracts were with ISM, Brees nonetheless

alleges that it cannot determine at this time whether “Defendants” fulfilled their

obligations under the 2009 Contribution Agreement relating to the 2010 Championship

since “Defendants” have never provided Brees with a full accounting for the charity

event. (Id. at ¶ 29.)

2010 Contribution Agreement and 2011 Championship

It is alleged: By written agreement dated December 28, 2010 (the “2010

Contribution Agreement”), Brees contracted with ISM for ISM to serve as the producer

and operator of the championship charity golf tournaments for the years 2011 through

2014 and to raise and collect funds on behalf of the Foundation.” (Complaint at ¶ 30,

emphasis added.) “The 2010 Contribution Agreement is a binding contract between the

Foundation and ISM.” (Complaint at ¶ 51, emphasis added.) The 2010 Contribution

Agreement also required ISM to keep appropriate, separate and detailed book of

accounts and records relating to the Championship charity golf tournament. (Id. at ¶¶

32, 53.)

The 2011 Championship was held at the Morgan Run Country Club in Rancho

Santa Fe, California between May 19, 2011 and May 22, 2011. (Id. at ¶ 33.) This

tournament was produced and operated by ISM. (Id.) Brees alleges that it cannot

determine at this time whether “Defendants” fulfilled their obligations under the 2010

Contribution Agreement relating to the 2011 Championship since “Defendants” have

never provided Brees with a full accounting for the charity event. (Id. at ¶ 35.)

2012 Championship and Alleged Breaches of the 2010 Contribution

Agreement

In 2012, the third charity golf tournament was held at the La Costa Resort & Spa

(the “Resort”). (Complaint at ¶ 36.) The tournament was again produced and operated

by ISM. (Id.) It is alleged: “ISM breached several terms of the 2010 Contribution

Agreement in producing and operating the 2012 Championship on behalf of the

8


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Foundation,” but the terms of the Agreement that were allegedly breached are not

identified. (Complaint at ¶ 38.) Specifically, Brees alleges the following:

“ISM secured reduced hotel room rates” at the Resort during the course of the

2012 Championship. (Complaint at ¶ 39, emphasis added.)

“ISM charged certain – if not all – 2012 Championship participants and

guests an amount greater than the rate that ISM negotiated with the Resort.”

(Id. at ¶ 40, emphasis added.)

“ISM solely retained as profits the monies collected in excess of the rate

negotiated with the Resort.” (Id. at ¶ 41, emphasis added.)

“ISM never submitted to the Foundation for its written approval ISM’s

intention to upsell hotel rooms at the Resort. . . . Instead ISM proceeded to do

so without ever advising the Foundation.” (Id. at ¶ 42, emphasis added.)

“ISM made representations and commitments to pay certain ‘appearance

fees’ to celebrities attending the 2012 Championship and to pay monetary

prized to participants who won certain events during the 2012 Championship

as an inducement for participating.” (Id. at ¶ 45, emphasis added.)

“ISM failed to report all ticketing revenue received and held in trust for the

benefit of the Foundation and charged vendors and additional fee for the

ability to appear onsite during the 2012 Championship.” (Id. at ¶ 46.)

No such allegations of breach are made against Miller. Nor are specific contract

provisions demonstrating that Miller is a party to the Agreement recited.

Brees Allegedly Terminates the 2010 Contribution Agreement

It is alleged: Upon learning of ISM’s alleged misappropriation of charity

revenues, Brees claims it lost confidence in defendants. (Complaint at ¶ 48.) On May

21, 2012, “the Foundation terminated its 2010 Contribution Agreement with ISM.” (Id. at

¶ 49, emphasis added.) Brees then filed this lawsuit against ISM and Miller despite the

fact that the no allegations provide that Miller was ever a party to the contracts with

Brees. (See e.g. Complaint at ¶¶ 30, 33, 49, 51.)

9


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Because Miller is improperly named as an individual plaintiff, the causes of

action alleged against him must be dismissed. Moreover, the claims against ISM are

either improperly pled or legally insufficient.

III. ARGUMENT

It is well settled that a complaint must set forth a “statement of the facts

constituting the cause of action, in ordinary and concise language.” Cal. Code Civ.

Proc. § 425.10(a). While California pleading requirements are liberal, a complaint must

at a minimum “apprise[] the adversary of the factual basis of the claim.” 4 Witkin,

California Procedure, § 339, p. 438 (4th ed. 1997); see also Estate of Archer (1987) 193

Cal. App. 3d 238, 245; Bell Atlantic Corp. v. Twombly (2007) 550 U.S. 544 (“Factual

allegations must be enough to raise a right to relief above the speculative level on the

assumption that all the allegations in the complaint are true (even if doubtful in fact).”).

Pleading mere legal conclusions is insufficient. Lesperance v. North American Aviation,

Inc. (1963) 217 Cal. App. 2d 336, 343 (“It is elementary that a pleading must allege

facts and not conclusions . . .”) (quotation omitted); Tarmann v. State Farm Mut. Auto.

Ins. Co. (1991) 2 Cal. App. 4th 153, 156 (1991) (a demurrer assumes the truth of the

material factual allegations in the complaint, but not the contentions, deductions, or

conclusions of fact or law alleged therein).

With respect to claims premised upon a contract, a complaint must either: (a) set

forth the terms of the contract verbatim, or (b) attach a copy of the contract and

incorporate it by reference. Harris v. Rudin, Richman & Appel (1999) 74 Cal. App. 4th

299, 307 (“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.”). The failure to identify the material terms

of a contract renders the cause of action fatally defective. Twaite v. Allstate Ins. Co.

(1989) 216 Cal. App. 3d 239, 252-253; Otworth v. Southern Pacific Transp. Co. (1985)

166 Cal. App. 3d 452, 459; Wise v. Southern Pacific Co. (1963) 223 Cal. App. 2d 50,

59.

10


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Here, the demurrers to each and every claim alleged against ISM and Miller must

be sustained without leave to amend because they are improperly pled, are fatally

uncertain, and/or fail to state a valid cause of action.

A. Brees’ First Cause of Action, for Breach of Contract, Fails to State a

Valid Claim of Action Against Both Miller and ISM

Brees’ first cause of action, for “breach of contract” fails for several reasons: (1)

Brees has not attached the contract or set forth verbatim all material terms of the

Agreements, and (2) the allegations which are provided unequivocally demonstrate that

Miller was not a party to the Agreements.

The elements of a cause of action for breach of contract are (1) the existence of

the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's

breach, and (4) the resulting damages to the plaintiff. Oasis West Realty, LLC v.

Goldman (2011) 51 Cal. 4th 811, 821. To state a cause of action for breach of written

contract, a complaint must also set forth the terms of the contract verbatim or attach a

copy of the contract and incorporate it by reference. Harris, 74 Cal. App. 4th at 307;

Twaite, 216 Cal. App. 3d at 252-253 (failure to identify material terms of a contract

renders the cause of action fatally defective); Otworth v. Southern Pacific Transp. Co.

(1985) 166 Cal. App. 3d 452, 459; Wise v. Southern Pacific Co. (1963) 223 Cal. App. 2d

50, 59.

Here, Brees’ breach of contract allegations must be dismissed against both Miller

and ISM because it has failed to attach a copy of the relevant agreements to the

Complaint, or recite verbatim the material provisions of the Agreements. Harris, 74 Cal.

App. 4th at 307; Twaite, 216 Cal. App. 3d at 252-253. Requiring Brees to attach the

Agreements or recite its terms verbatim is not a trivial matter, but will demonstrate that

Miller never entered into a contract, either oral or written, in his individual capacity. See

Otworth v. Southern Pac. Transportation Co. (1985) 166 Cal. App. 3d 452, 459–460 (To

state a cause of action for breach of contract, the plaintiff must indicate whether the

contract is written, oral, or implied. If it is written, the terms can be set out verbatim in

11


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

the body of the complaint or a written instrument must be attached to the pleading and

incorporated by reference.); Moya v. Northrup (1970) 10 Cal. App. 3d 276, 281 (If a

cause of action rests upon an express contract, the pleader must specify whether it is

written or oral.) Requiring Brees to attach the contract or recite its terms verbatim will

also demonstrate that neither Miller nor ISM breached a material term. As currently

pled, defendants have no idea which contract provisions were allegedly breached.

In addition, the allegations unequivocally demonstrate that no breach of contract

claim exists against Miller. Brees has wholly failed to allege that Miller is a party to the

2009 or 2010 Contribution Agreements. (See Complaint at ¶ 51.) Indeed, the

Complaint makes abundantly clear that Brees’ contract was solely with ISM. (See

Complaint at ¶ 51 (“The 2010 Contribution Agreement is a binding contract between

the Foundation and ISM.” (emphasis added)).) Because Miller is not a party to the

relevant contracts, his demurrer to this cause of action should be sustained without

leave to amend. See Oppenheimer v. Gen. Cable Corp. (1956) 143 Cal. App. 2d 293,

297 (no right to maintain action against a defendant for promises made in a contract

where defendant is not a party to the contract); Seymour v. Christiansen (1991) 235

Cal. App. 3d 1168, 1172 (sustaining demurrer on grounds that the individual defendants

cannot be liable because they were not parties to the contract). Gordon Bldg. Corp. v.

Gibraltar Sav. & Loan Ass'n (1966) 247 Cal. App. 2d 1, 6 (A complaint fails to state a

cause of action for breach of contract if it fails to allege that plaintiff is a party to the

contract and the performance of conditions precedent.)

Because Brees has failed to attach a copy of the contract or identify the contracts

terms verbatim, and because the information Brees has provided in the Complaint

leaves no doubt that Miller was not a party to the relevant contracts, the demurrers to

the breach of contract cause of action should be sustained, and both demurrer should

be sustained without leave to amend.

12


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

B. Brees’ Second Cause of Action, for “Breach of the Implied Covenant of

Good Faith and Fair Dealing,” Fails to State A Claim Against Both Miller

and ISM

Brees’ second cause of action alleges a breach of the implied covenant of good

faith and fair dealing. (Complaint at ¶¶ 59-62.) The existence of a valid contract

between the parties is a necessary prerequisite to a claim for breach of the implied

covenant of good faith and fair dealing.2 See Carma Developers (Cal.), Inc. v.

Marathon Development California, Inc. (1992) 2 Cal.4th 342, 371 (there can be no

breach of the duty of good faith and fair dealing in the absence of a contract); Racine &

Laramie, Ltd. v. Dep’t of Parks & Rec. (1992) 11 Cal. App. 4th 1026, 1031 (“the implied

covenant of good faith and fair dealing rests upon the existence of some specific

contractual obligation.”); Foley v. Interactive Data Corp. (1988) 47 Cal. 3d 654, 683-84.

As discussed above Brees has failed to adequately allege the existence of a

contract between itself and Miller, and has only alleged a contract between it and ISM.

See supra, Section III (A); see also Complaint at ¶ 51 (“The 2010 Contribution

Agreement is a binding contract between the Foundation and ISM”). As a result, the

claim for breach of the implied covenant of good faith and fair dealing against Miller

must fail. Likewise, since Brees failed to attach a copy of the contract or assert its

terms verbatim, the breach of contract claim against ISM fails and the breach of implied

covenant claim against ISM must also fail.

In addition, the breach of implied covenant claim fails because its allegations are

a mere restatement of the breach of contract claim. (See Complaint at ¶ 60.) “If the

allegations do not go beyond the statement of a mere contract breach and, relying on

the same alleged acts, simply seek the same damages or other relief already claimed in

2 At present, the court recognizes only one exception to this general rule: tort remedies are available for a breach of the covenant in cases involving insurance policies. See Cates Construction, Inc. v. Talbot Partners (1999) 21 Cal.4th 28, 43; Jonathan Neil & Assoc., Inc. v. Jones (2004) 33 Cal.4th 917, 937-941.

13


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

a companion contract cause of action, they may be disregarded as superfluous as no

additional claim is actually stated.” Careau & Co. v. Sec. Pac. Bus. Credit, Inc. (1990)

222 Cal. App. 3d 1371, 1395; see also Guz v. Bechtel Nat’l, Inc. (2000) 24 Cal. 4th 317,

327, 352-53 (“[W]here breach of an actual term is alleged, a separate implied covenant

claim, based on the same breach, is superfluous.”); Bionghi v. Metro Water Dist. of S.

California (1999) 70 Cal. App. 4th 1358, 1370 (because the “claim of breach of the

implied covenant relies on the same acts, and seeks the same damages, as its claim for

breach of contract[,]” the cause of action for breach of the implied covenant was

superfluous and was properly disregarded.). Here, the acts relied upon in seeking

damages for breach of the implied covenant are the same as those supporting Brees’

breach of contract claim. (Complaint at ¶ 60.) No cause of action has been properly

alleged and the demurrers should be sustained without leave to amend.

C. Brees’ Third Cause of Action, for “Breach of Fiduciary Duty,” Fails to

State A Claim Against Both Miller and ISM

Brees’ third cause of action alleges that Miller and ISM, as a person or entity

allegedly soliciting donations on behalf of the Foundation, breached a fiduciary duty

owed by them to the Foundation. (Complaint at ¶ 65.) In so alleging, Brees relies upon

Business & Professions Code section 17510.8, of which Brees has quoted only a short

and distorted portion. (See Complaint at ¶ 64.) Brees’ attempt to impose a fiduciary

obligation upon defendants by way of Section 17510.8 is wholly misguided because the

fiduciary obligation created by 17510.8 is not between a charity and a person soliciting

donations on behalf of a charity, but rather is between the charity or persons soliciting

on behalf of a charity (i.e., Brees or Miller) and the donor (a third party):

Notwithstanding any other provision of this article, there exists a fiduciary relationship between a charity or any person soliciting on behalf of a charity, and the person from whom a charitable contribution is being solicited. The acceptance of charitable contributions by a charity or any person soliciting on behalf of a charity establishes a charitable trust and a duty on the part of the charity and the person soliciting on behalf of the charity to use those charitable

14


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

contributions for the declared charitable purposes for which they are sought. This section is declarative of existing trust law principles.

Cal. Bus. & Prof. Code § 17510.8 (West) (emphasis added).

Section 17510.8 makes no mention of any “special relationship” that exists

between the charitable organization and a person acting on its behalf. Id. Instead, it

clearly creates duties on behalf of charities and soliciting parties to donors. Id.; see also

People v. Orange County Charitable Services (1999) 73 Cal. App. 4th 1054, 1075

(section 17510.8 makes “charities and solicitors fiduciaries of the donors and

establishing a charitable trust for donations accepted”) (emphasis added).

Under Section 17510.8, charities and soliciting parties must use contributions

received from donors for the declared charitable purpose. Cal. Bus. & Prof. Code §

17510.8. The creation of a constructive trust is thus protection to the donor (not the

charitable organization), that donated funds will be used as expected.3 Id.

A full reading of section 17510.8 makes clear that no fiduciary obligation is owed

by Miller or ISM to Brees (who is a charitable organization and not a donor) under this

section. Brees thus lacks standing to allege a breach of fiduciary duty by way of section

3 The legislative history confirms that Section 17510.8 was intended only to create a fiduciary duty between a charity or any person soliciting on its behalf and a donor:

LEGISLATIVE COUNSEL'S DIGEST

AB 3797, Katz. Charitable solicitations.

Existing law regulates the solicitation of charitable contributions by charities, as defined. This bill would establish a fiduciary relationship between a charity or any person soliciting on behalf of the charity and the person from whom a charitable contribution is being sought, as specified.

See NONPROFIT ORGANIZATIONS—FIDUCIARY RELATIONSHIPS, 1992 Cal. Legis. Serv. Ch. 1170 (A.B. 3797) (WEST) (emphasis added).

15


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

17510.8, and the demurrers to this cause of action should be sustained without leave to

amend.

D. Brees’ Fourth Cause of Action, for “Conversion,” Fails to State a Claim

Against Both Miller and ISM

Brees’ fourth cause of action alleges a claim for “conversion” on the grounds that,

under the 2010 Contribution Agreement, ISM was entrusted to collect charity revenue

on behalf of Brees and “Defendants” wrongfully converted such revenue and monies for

their own purposes. (Complaint at ¶¶ 71-73.) As a result, Brees alleges that it has

been “damaged in an amount that cannot be ascertained absent an accounting from

Defendants.” (Id. at ¶ 74.)

Conversion is the wrongful exercise of dominion over the property of another.

Plummer v. Day/Eisenberg, LLC (2010) 184 Cal. App. 4th 38, 45. The elements of a

conversion claim are: (1) the Brees’ ownership or right to possession of the property; (2)

the defendant's conversion by a wrongful act or disposition of property rights; and (3)

damages.” Id.; see also Burlesci v. Peterson (1998) 68 Cal. App. 4th 1062, 1066.

Money cannot be the subject of a cause of action for conversion unless there is a

specific, identifiable sum involved. PCO, Inc. v. Christiansen, Miller, Fink, Jacobs,

Glaser, Weil & Shapiro, LLP (2007) 150 Cal. App. 4th 384, 395-96 (“[A]ctions for the

conversion of money have not been permitted when the amount of money involved is

not a definite sum.” ); Vu v. California Commerce Club, Inc. (1997) 58 Cal. App. 4th 229,

231-32, 235 (allegations regarding “approximate” amount converted insufficient to state

cause of action); Software Design & Application, Ltd. v. Hoefer & Arnett, Inc. (1996) 49

Cal. App. 4th 472, 485 (no conversion where money was allegedly misappropriated

“over time, in various sums without any indication that it was held in trust for” plaintiff).

Brees’ conversion claim is fatally defective because it does not allege an

identifiable or definite sum of money that Miller or ISM allegedly converted, and Brees

admits that it cannot presently allege a definite sum. (Complaint at ¶ 74.) Because

Brees cannot identify a definite sum of money converted by either ISM or Miller, the

16


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

conversion allegations fail to state a cause of action and this claim must be dismissed.

PCO, Inc., 150 Cal. App. 4th at 395-96 (conversion claim failed because Brees could

only estimate the amount of money allegedly converted); Vu, 58 Cal. App. 4th at 231;

Software Design, 49 Cal. App. 4th at 485.

California law is clear that a conversion claim may not lie unless a definite sum of

money is identified. Because Brees cannot make such an allegation, the demurrers to

the conversion cause of action should be sustained without leave to amend.

E. Brees’ Fifth Cause of Action, for “Accounting,” Fails to State a Claim

Against Both Miller and ISM

Brees’ fifth cause of action seeks an accounting from “Defendants.” (Complaint

at ¶¶ 76-80.) A cause of action for an accounting requires a showing that a relationship

exists between the Brees and defendant that requires an accounting, and that some

balance is due the Brees that can only be ascertained by an accounting. Teselle v.

McLaughin (2009) 173 Cal. App. 4th 156, 179 .

With respect to Miller, Brees has failed to allege any relationship that supports a

request for an accounting. The Complaint is clear that Brees’ right to an accounting

arises under the 2010 Contribution Agreement – of which Miller is not a party.

(Complaint at ¶¶ 77-78.) Specifically, the Fifth Claim for relief alleges that “Under the

2010 Contribution Agreement, ISM . . . promised to keep available full, true and

accurate records and books of accounts showing all of its billings and collections.”

(Complaint at ¶ 77, emphasis added.) The Complaint lacks any allegation that Miller

had any such obligation under the Agreement, and indeed, Miller did not.4 (Id.)

Because Brees does not allege a relationship between it and Miller that requires an

4 Nor does the Complaint identify verbatim the provision of the contract that allegedly supports this obligation, as required when alleging a breach of a contract provision. See Section A, supra.

17


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

accounting, the Miller’s demurrer to the fifth cause of action should be sustained without

leave to amend.

With respect to ISM, the Complaint fails to attach a copy of the Agreements or

recite verbatim any provision of the Agreements which would require an accounting.

Accordingly, it is unclear from the Complaint whether or not a relationship requiring an

accounting exists, and ISM’s demurrer to this cause of action should also be sustained.

F. Brees’ Sixth Cause of Action, for “Constructive Trust,” Fails to State a

Claim Against Both Miller and ISM

Brees’ sixth cause of action seeks the equitable remedy of a constructive trust as

a result of “Defendants” conversion of charity revenue. (Complaint at ¶ 83-85.) “A

constructive trust is an involuntary equitable trust created by operation of law as a

remedy to compel the transfer of property from the person wrongfully holding it to the

rightful owner.” Communist Party v. 522 Valencia, Inc. (1995) 35 Cal. App. 4th 980, 990

. A constructive trust may only be imposed where the following three conditions are

satisfied: (1) the existence of a res (property or some interest in property); (2) the right

of a complaining party to that res; and (3) some wrongful acquisition or detention of the

res by another party who is not entitled to it.” Id. A constructive trust is not an

independent cause of action, but only may be sought as a remedy on other underlying

claims when the foregoing conditions exist. Embarcadero Mun. Impr. Dist. v. County of

Santa Barbara (2001) 88 Cal. App. 4th 781, 793.

As an initial matter, Brees’ request for a constructive trust against Miller and ISM

must be dismissed because Brees has failed to assert a valid cause of action against

them supporting such a remedy. See Embarcadero, 88 Cal. App. 4th at 793. Since

“constructive trust” is merely a remedy, it must be predicated upon a valid claim. Id.;

Campbell v. PricewaterhouseCoopers, CIV S-06-2376LKK/GGH, 2008 WL 3836972

(E.D. Cal. Aug. 14, 2008) (assertion of constructive trust as a remedy requires

allegation of “fraud, breach of fiduciary duty, breach of promise to buy property for

Brees, or repudiation of [an] unenforceable express trust.”). As discussed above no

18


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

valid claim of breach of fiduciary duty is alleged against Miller or ISM which supports the

imposition of a constructive trust. Nor is a valid claim for conversion alleged which

would support a constructive trust because Brees cannot identify a sum certain that was

allegedly converted. See supra at Sections III(C) and (D). The inquiry should end

here.

Notwithstanding the foregoing, the Complaint also fails to allege the three

preliminary requirements for the imposition of a constructive trust. Communist Party, 35

Cal. App. at 990. For example, with respect to Miller, the Complaint does not allege a

wrongful acquisition or detention of Brees’ property by Miller in his individual capacity.

Instead, the Complaint only alleges that ISM – not Miller – collected the charity revenue

from the 2012 Championship pursuant to the terms of the 2010 Contribution Agreement.

(Complaint at ¶ 41.) As a result, a constructive trust cannot be an appropriate remedy

as to Miller. Communist Party, 35 Cal. App. 4th at 991, citing Pacific Lumber Co. v.

Superior Court, 226 Cal.App.3d at pp. 377–378 (“A constructive trust cannot exist

unless there is evidence that property has been wrongfully acquired or detained by a

person not entitled to its possession.”)

With respect to ISM, the Complaint has not adequately alleged that ISM

wrongfully collected revenue it was not entitled to – and Brees has failed to identify the

contract provisions that form the basis of its claim that money collected by ISM allegedly

belonged to Brees. (See Complaint at 82-83.)

Because no underlying breach of fiduciary duty or conversion claim supports the

remedy of a constructive trust, the demurrers by Miller and ISM to Brees’ constructive

trust cause of action should be sustained without leave to amend.

19


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

G. Brees’ Seventh Cause of Action, for “Unlawful and Unfair Business

Practices in Violation of California Business & Professions Code

Sections 17200 et. seq.,” Fails to State a Claim Against Miller and ISM

Brees’ seventh cause of action is for violation of California’s Business &

Professions Code section 17200 (“UCL”), which prohibits unlawful, fraudulent, or unfair

business practices. Bus. & Prof. Code § 17200. To state a cause of action under the

UCL, a Brees must allege facts satisfying at least one prong of the statute. Brees fails to

meet this burden.

1. Brees Fails To Allege Unlawful Conduct.

A “violation of another law is a predicate for stating a cause of action under the

UCL's unlawful prong.” Berryman v. Merit Prop. Mgmt., Inc. (2007) 152 Cal. App. 4th

1544 . “In effect, the UCL borrows violations of other laws...and makes those unlawful

practices actionable under the UCL.” Lazar v. Hertz Corp. (1999) 69 Cal. App. 4th 1494,

1505. A claim for violation of the UCL stands or falls depending on the fate of

antecedent substantive causes of action. Krantz v. BT Visual Images (2001) 89 Cal.

App. 4th 164, 178. A court may not allow a plaintiff to “plead around an absolute bar to

relief simply by recasting the claim as one for unfair competition.” Chabner v. United of

Omaha Life Ins. Co. (9th Cir. 2000) 225 F.3d 1042, 1048.

Here, Brees’ UCL allegations are predicated on the alleged violations of two

statutes: Business and Professions Code Sections 17510.5 and 17510.8. (See

Complaint at ¶¶ 88-91.) Neither statute supports a UCL violation.

First, the Complaint alleges a violation of Section 17510.5. While Section

17510.5 may provide an arguable underlying statutory violation on behalf of ISM, it

cannot do so for Miller because Section 17510.5 applies only to organizations, not

individuals such as Miller:

(a) The financial records of a soliciting organization shall be maintained on the basis of generally accepted accounting principles as defined by the American Institute of Certified Public Accountants, the Governmental Accounting

20


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Standards Board, or the Financial Accounting Standards Board.

(b) The disclosure requirement of paragraph (7) of subdivision (a) of Section 17510.3 shall be based on the same accounting principles used to maintain the soliciting organization's financial records.

Cal. Bus. & Prof. Code § 17510.5 (West). Miller is not a soliciting organization, only an

individual who is a member of the organization. (Complaint at ¶ 19.) The plain

language of Section 17510.5 leaves no doubt that it does not apply to individuals

involved in the soliciting organization, but is a regulation on the soliciting organization

itself.5 Id. Accordingly, Section 17510.5 provides no support for a UCL claim against

Miller, and Miller’s demurrer to this cause of action should be sustained without leave to

amend on this basis alone.

Nor does Section 17510.8 support such a claim against either Miller and ISM. As

discussed above at Section III(C), 17510.8 does not create a fiduciary relationship

between defendants and Brees, and Brees thus lacks standing to assert a claim under

this section. See Cal. Bus. & Prof. Code § 17510.8; People v. Orange County

Charitable Services, 73 Cal. App. 4th at 1075. Rather, the only fiduciary obligation

created by Section 17510.8 is between the charitable organization (or person soliciting

on their behalf) and a donor. See Cal. Bus. & Prof. Code § 17510.8; People v. Orange

County Charitable Services, 73 Cal. App. 4th at 1075. Section 17510.8 cannot support

a claim for unlawful business conduct by either Miller or ISM and for this reason the

demurrers of Miller and ISM to this cause of action should be sustained without leave to

amend.

5 The legislative history also confirms that the accounting requirement is directed to the organization, not individuals. See CA B. An., S.B. 1262 Sen., 8/23/2004, California Bill Analysis, S.B. 1262 Sen., 8/23/2004.

21


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2. Brees Fails To Allege Any “Unfair” Business Practice.

“Unfair” conduct under Business and Professions Code has been defined as

conduct that “offends an established public policy or...is immoral, unethical, oppressive,

unscrupulous or substantially injurious to consumers.” Scripps Clinic v. Superior Court

(2003) 108 Cal. App. 4th 917, 939. When “determining whether the challenged conduct

is unfair within the meaning of the unfair competition law... courts may not apply purely

subjective notions of fairness.” Id. at 941. Rather, a plaintiff's claim under Section

17200, if based on a public policy, must be “tethered” to a specific constitutional,

statutory, or regulatory provision to find an objective basis for determining whether the

alleged conduct is unfair. See id. at 940.

Additionally, although “unfair business practice” is an intentionally broad term,

there must still be some business practice specifically pled. Motors, Inc. v. Times Mirror

Co. (1980) 102 Cal. App. 3d 735. While a business “practice” may be found based on

nothing more than a pattern of behavior pursued in the course of business, one-time

acts are insufficient to constitute a practice. Practice contemplates a “pattern of conduct,

ongoing . . . conduct, a pattern of behavior or a course of conduct.” State of California

ex rel Van de Kamp v. Texaco, Inc. (1988) 46 Cal. 3d 1147, 1170.

No unfair business practice has been alleged against Miller because the only

allegations of “unfair” or “unlawful” activity are the alleged violations of Business and

Professions Code Sections 17510.5 and 17510.8. As discuss above, neither of these

statutes apply to Miller.

With respect to ISM, as discussed above, Section 17510.8 does not apply to ISM

and cannot support a UCL claim. The alleged violation of Section 17510.5 also cannot

support a UCL claim since Brees fails to allege a pattern of conduct in violation of

17510.5, but merely alleges a one-time act of failing to adequately maintain financial

records for the 2012 Championship. (Complaint at ¶ 89.) Because there is no pattern

of conduct alleged, any claim against ISM under the UCL’s “unfair” prong must fail.

See Van de Kamp, 46 Cal. 3d at 1170.

22


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

For these reasons as well, the demurrers of Miller and ISM to this cause of action

should be sustained without leave to amend.

3. Brees Does Not Allege Any Fraudulent Conduct

Finally, Brees does not appear to allege a UCL claim under the “fraudulent”

prong of Section 17200. Brees has not explained with particularity the who, what,

when, where and why of any fraudulent conduct allegedly perpetrated by Miller or ISM.

Tarmann v. State Farm Mut. Auto Ins. Co. (1991) 2 Cal. App. 4th 153, 157. Indeed,

Brees has failed to allege fraudulent conduct at all – much less with the requisite

particularity. (See Complaint at ¶¶ 87-92.)

For each and every one of the above reasons, the demurrers of Miller and ISM to

Brees’ UCL cause of action should be sustained without leave to amend.

H. Brees’ Eighth Cause of Action, for “Declaratory Judgment,” Fails to

State a Claim Against Both Miller and ISM

Brees’ eighth cause of action seeks a declaratory judgment “to confirm the

parties’ rights in and to the 2010 Contribution Agreement.” (Complaint at ¶ 95.) As

explained at length above, Brees has failed to allege that Miller is a party to the 2010

Contribution Agreement. (See supra, at Section III(A).) Because Miller is not a party to

the 2010 Contribution Agreement, no cause of action for declaratory judgment against

him exists and Miller’s demurrer to this cause of action should be sustained without

leave to amend.

The declaratory judgment claim should also be dismissed against both Miller and

ISM because the facts as pleaded do not seek a forward-looking pronouncement of the

rights and duties of the parties. Osseous Technologies of Am., Inc. v. DiscoveryOrtho

Partners LLC (2010) 191 Cal. App. 4th 357, 363. The purpose of a declaratory

judgment is to “serve some practical end in quieting or stabilizing an uncertain or

disputed jural relation. . . [and] to liquidate doubts with respect to uncertainties or

controversies which might otherwise result in subsequent litigation.” Osseous, 191 Cal.

App. 4th at 364-65. One test of the right to institute proceedings for declaratory

23


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

judgment is the “necessity of present adjudication as a guide for Brees’ future conduct

in order to preserve his legal rights.” Id. (confirming trial courts order sustaining

demurrer on declaratory judgment claim without leave to amend, which found ‘the case

as alleged in the complaint is nothing more than a ‘breach of contract’ action….There

are no allegations in the complaint that suggest that declaratory relief will regulate future

conduct by the parties….”). There is no basis for declaratory relief where only past

wrongs are involved. Id. at 366. As stated by the Osseous Court, “where there is an

accrued cause of action for an actual breach of contract or other wrongful act,

declaratory relief may be denied.” Id. at 366.

Here, Brees alleges that it terminated its contract with ISM and has filed a breach

of contract action. (Complaint at ¶¶ 48-49.) A declaratory judgment by the Court in this

instance will do nothing to regulate future conduct by the parties, and will only be

duplicative of the breach of contract claim. Under these circumstances, the complaint

fails to allege a cause of action for declaratory judgment and the demurrers of Miller and

ISM to this cause of action should be sustained without leave to amend.

IV. TO THE EXTENT BREES RELIES UPON VAGUE ALLEGATIONS OF

CONDUCT BY “DEFENDANTS,” BREES’ ALLEGATIONS ARE FATALLY

UNCERTAIN

The Complaint should additionally be dismissed because each of the allegations

are fatally uncertain. In its Complaint, Brees was required to state “the essential facts

upon which a determination of the controversy depends” with “clearness and precision

so that nothing is left to surmise.” Bernstein v. Piller (1950) 98 Cal. App. 2d 441, 443.

“Mere recital, references to or allegations of material facts which are left to surmise are

subject to a special demurrer for uncertainty.” Id. at 443-444.

Here, as discussed above, Brees has failed to attach the Agreements or provide

verbatim the Agreements material terms. Moreover, the Complaint continuously lumps

Miller and ISM together in its allegations by alleging that “Defendants” breached the

contract, despite the failure to provide verbatim any section of the contracts stating that

24


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Miller was an individual party to the Agreement. (Complaint at ¶¶ 51-55.) Brees

creates further confusion by acknowledging in its allegations that the Agreements at

issue were solely between “Brees and ISM.” (Complaint at ¶¶ 24, 30, 51.) As a result,

it is impossible for Miller to understand why he has been sued in his individual capacity

and therefore all of Brees’ contract based allegations (those for breach of contract, bad

faith, accounting and declaratory relief) are fatally uncertain under CCP 430.10(f). If

Brees had attached the alleged contract, or outline its terms (including the parties)

verbatim, would only confirm that Brees has no claim against Miller and/or ISM.

The remainder of Brees’ claims are also fatally uncertain pursuant to CCP

430.10(f) due to Brees’ habit of lumping ISM and Miller together. For example, Brees’

Conversion claim alleges that “Defendants” have wrongfully converted charity revenue,

money and prizes for their own purposes, but also alleges that under the 2010

Agreement, ISM (not Miller) was entrusted to act on behalf of Brees in producing the

event and in soliciting and collecting charity revenue and that ISM (not Miller) “solely

retained as profits the monies collected in excess of the rate negotiated with the

Resort.” (See Complaint at ¶¶ 41, 71-73.) Similarly, Brees’ accounting claim alleges

that under the 2010 Agreement, “ISM … promised to keep available full, true and

accurate records and books of accounts….” (Complaint at ¶ 77.) Yet, Brees then

alleges that “Defendants” have failed to provide an accounting as required under the

Agreements. (Id. at ¶ 78.)

The Complaint is replete with instances where Brees impermissibly lumps Miller

and ISM together, making it impossible to understand why each individual defendant

has been sued. (See also Complaint at ¶¶ 4,-7, 12, 15, 47, 51-53, 59, 65-66, 72, 83,

88, 89, 91, 94 for instances where Defendants are lumped together, compared with

Complaint at ¶¶ 24, 25, 30, 31, 38-41, 45, 46, 48, 51 for instances where Brees

acknowledges that obligations under the Agreement belonged only to ISM.) See

Hawley Bros. Hardware Co. v. Brownstone (1899) 123 Cal. 643, 645-648 (holding that a

demurrer should have been sustained because of uncertainty where the complaint

26


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

PROOF OF SERVICE BY MAIL

Case No. 37-2012-00087492-CU-BC-CTL

I, the undersigned, say: I am over the age of eighteen years and not a party to

the within action or proceeding; that I am an employee of McDonald Carano Wilson

LLP, with a business address of 100 West Liberty Street, 10th Floor, Reno, Nevada,

89501.

That on the 22nd day of January, 2013, I caused an envelope, containing a true

and correct copy of the foregoing DEFENDANTS INTEGRATED SPORTS

MARKETING, INC.’S and DAVID R. MILLER’S: NOTICE OF DEMURRERS AND

DEMURRERS TO COMPLAINT, and MEMORANDUM OF POINTS AND

AUTHORITIES IN SUPPORT OF DEMURRERS TO COMPLAINT to be deposited in

the U.S. Mail, at Reno, Nevada, with postage prepaid, addressed to the following:

James M. Pearl Adam J. Sullins Jason H. Tokoro W. Adam Hunt O’Melveny & Myers LLP 1999 Avenue of the Stars, 7th Floor Los Angeles, CA 90067-6035 I declare under penalty of perjury that the forgoing is true and correct.

Executed on January 22, 2013 at Reno, Nevada.

/s/ Elizabeth E. Helms An employee of McDonald Carano Wilson LLP

1 pat lundvall (pro hac vice application...

Documents