happy days lawsuit demurrer

8/3/2019 Happy Days Lawsuit Demurrer

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SUPERIOR COURT OF CALIFORNIA. COUNTY OF LOS ANGELES

S. SATO, C.A. Rcpcme r

10/19/11ELI ZABETH ALLEN WHITE

DEPT. 48J UDGE A. BARTON D EP UT Y C LE RK

JU DG E PR O TE M ELECTRONIC RECORDING MONITORDeputy Sheriff L. MACHUCA, CSR #12274

am BC459841ANSO N W ILLIAMS, ET AL.VSCBS STUDIOS, INC~I ET AL.

Pla;lIuffCounse l

JON PFEIFFER (X)

Defelldant KERI E. CAMPBELL {XlCounse l

NA TURE OF PROCEEDINGS:DEMURRER OF DEFENDANTS, CBS STUDIOS, INC. ANDPARAMOUNT PICTURES, TO PLAINTIFFS' FIRST AMENDEDCOMPLAINTMOTION OF DEFENDANTS, CBS STUDIOS INC. AND PARAMOUNTPICTURES, TO STRIKE PORTIONS OF PLAINTIFFS' COMPLAINTAOMatter is called for hearing and argued.Defendants CBS Studios, Inc. and Paramount Pictures'demurrer is sustained without leave to amend as tothe second, third and fourth causes of action and themotion to strike is granted in its entirety as fullyreflected in the court's written RULING filed thisdate and incorporated herein by reference to thecourt file.Notice is waived.

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I.2 lNTRODUCTION3 M uch like the insuffic ie nt a lle ga tions in the ir F AC , P la in tiffs' op position is lit te re d w ith4 rhe to r ic , hyp erbo le , and m issta te m ents of fac t, the sum of w hic h c annot sa ve P la in tiffs ' d ef ic ie ntly5 p le ad ed c la im s fo r f raudule nt c onc e a lm e nt, p rom issory f raud and conve rsion . A s has be en6 d em o nstra te d, this litiga tion is no thing m o re than an a tte m pt by P la intiffs to tu rn a sim p le7 c ontr ac tua l ac coun ting c la im - for w hic h P la in tiffs re luc ta ntly a cknow le dge the y have be en p aid8 in full - into a tor t c ase w ith the i n t errorem sp e cte r o f p un itiv e d am a g es. N otw ith sta nd in g9 P la intiffs ' c onc lusory a lle ga tions of be d fa ith c onduc t, the FA C d oe s no t - and could not-

10 ad equa te ly p le ad the e le m ents of P la intiffs' tor t c la im s . ID e sp ite be ing give n am p le tim e to a m end , the F AC fa ils to ad dre ss any of the d efic ie nc ie s

in the fra ud ule nt c onc ea lm e nt, p rom issory fra ud and c onve rsion c la im s tha t le d to the C our tsusta ining D e fe nd ants' p rio r d em u rr e r. T he O pp osition c onc ed es as m u ch and d oe s no t a tte m pt toa rgu e oth erw ise . Inste ad , fa ce d w ith a lm o st c er ta in d ism issa l o f the se c la im s , P la intiffs m a ke o nefina l a t te m pt to save the ir fra ud ule nt c onc ea lm e nt and p rom issory fr aud c la im s by a rguing tha t - ifg iven fur the r le ave to am e nd - the y w ould a lle ge an en tire ly ne w and d iffe re n t c la im , one w hic hthe y a rgue c ou ld p ote ntia lly m e e t the p le ad ing re quir em e nts. P la intiffs' "ne w " c la im , ho we ve r,su ffe rs f rom the sam e d efe cts as the ir p rior tw o a tte m pts - it ta ils to suffic ie ntly a lle ge

I T o the c ontr a ry, the only r e al ind ic ia o f bad fa ith in this c ase lie s in P la intiffs ' c on tinue dm a inte nanc e of fraud c la im s for w hic h the re is no fac tua l basis. P la intiffs' fr aud c la im s a r e a llp re m ise d on the a lle ga tion tha t the y w ere never p ro vid ed r oy alty p ay m e nts a nd d istr ib utio nsta te m e nts. D isc ove ry c ond uc te d to d ate ha s e sta blish ed be yond d isp ute tha t P la intiffs a ctua llyb ega n re ce ivin g ro ya lty p ay m en ts a nd d istr ibu tion sta te m e nts fro m P ara m ount in 197 6;a cc ord ingly , P la in tiffs' fra ud c la im s should ne ve r ha ve be en p le d in the f irst insta nc e, m u ch le ss(a s P la in tiffs p ro po se ) in three se pa ra te p le ad ings. W ith the e xe rc ise of e ve n m inim a l d ilige nc e,P la intiffs should have be en w eI! a ware of th is fa ct p rior to the f iling of the C om p la int and theF 'A C. S inc e tha t tim e , D e fe nd an ts have p rov id ed P la intif fs w ith c op ie s of the p aym e nts a ndd istr ibu tion sta te m e nts in qu estion . N on eth ele ss, P la intif fs c ontinue to p re ss the se c la im s he re a ndin a p rop ose d third a m end ed c om p la in t. F or p urp ose s of this d em u rr e r, D e fe nd an ts' a rgum e nts a r elim ite d to the fa ta l d efe cts o f the F AC as a m a tte r o f law a nd p le ad ing, Should P la intiffs c ontinueto p ursue the se c la im s be yond the p le ad ing sta ge , how eve r, D e fe nd ants ava il the m se lve s of a llre m e die s for P la intiffs ' ta ctic s, inc lud ing sa nc tio ns p ur sua nt to C od e of C iv il P ro ce dure 128.6 .

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4 . Plaintiffs' Claim IsTime-Barred

3 . Plaintiffs Concede Their Failure To Plead Reliance And Causation2 P la intif fs do not e ve n a ttem p t to add re ss D efe nd an ts ' a rgum ent tha t the y fa ile d to p le a d the3 e le m en ts of re lia nc e a nd c ausa tion and the re for e have c onc ed ed tha t the ir c la im is insuffic ie ntly4 p le ad ed . Inste ad , P la in tif fs m e re ly r e asse rt the fa ile d a rgum e nt tha t the y re lie d to the ir d etr im e nt5 by e nte r ing in to the A gre e m en ts. (O pp 'n , 10 : 16-17 .) T he m e re sta te m en t tha t P la in tiffs w ould no t6 have e nte re d into the A gre em e nts is insuffic ie nt. P la in tif fs m u st show tha t the y a ffirm a tive ly7 a c te d to the ir d e tr im e nt a s a re su lt o ft~~ ir r e lianc e on D e fe nd an ts ' fa lse p rom ise . N o suc h8 a lle ga tion e xists .. M ore ove r, P la intiffs d id no t e ve n p roffe r an a rgum e nt w ith re sp ec t to c ausa tion.9 A cc ord ingly , as se t for th in D e fe nd an ts ' m oving p ap er s, th is c la im should be d ism isse d be c ause10 P la inti f fs ha ve fa ile d to a lle ge the se tw o e sse ntia l e le m ents. G ive n the a bove , it is c le ar tha t a ny11 fu r the r le ave to am e nd w ould be futile .1 213 P la in tiffs d o not c ha lle nge D efe ndan ts' a rgum ent tha t the p rom isso ry fr aud c la im is ba r re d14 by th e th re e-y ea r sta tu te o f lim i ta tio ns; in ste ad , th ey r ely sole ly o n the C our t's p re vio us ru ling .15 (O pp 'n a t 11 :20 -12:2.) P la in tif fs ignor e , how eve r, tha t the am e nd m ents in the F AC sp ec ific ally16 id en tify the tim ing of the T hird P rom ise , up on w hic h the ir c la im is ap pa re ntly ba se d. (FA C, ~~ 35 ,17 83.) A c cord ing to the FAC , e ac h T h ird P rom ise w as m ad e only once (w he n the A gre em e nts w ere18 exe c u te d ) (FAC, ~, 35, 49 , 56 , 83) and the la te st tha t P aram ount c ould have m ad e the T hird19 P rom ise w a s in 1983 . (FA C, ~~ 30, 33 , 35 ; C am p be ll D e cL , E xhs 11-14 .) D e fe nd an ts ' a rgum e nt20 is base d on the new a lle ga tions in the FAC .21 P la intiffs c anno t sa lvage the ir c la im by a llud ing to the "d e laye d d isc ove ry" rule . Allen v.22 Ramsay, 1 79 C a l. App, 2 d 84 3, 8 51 (19 60) ("d ela ye d d isc ov er y" re quir es sp e cif ic a lle ga tio ns th at23 a p la in tiff d id not d isc ove r the fac ts, and c ould no t w ith re asonab le d ilige nc e have d isc ove re d24 the m , p rio r to thr e e ye ars be for e the su it). P la in tiffs have no t (and c annot) sa tisfy the ir burd en of25 a lle ging how P la in tif fs c ou ld not ha ve d isc ove re d, w i th r ea so nable d ilig en ce , D e f e nd a nt s' a lle ge d. '\l~ 26 fraud . ld . T o the c on tra ry , P la in tif fs a dm i t tha t the y e nte re d into c on tra cts be ginn ing in 1973

w' ":: 27 w hic h sp e c ific a lly re qu ire d the p aym ent of m e r c hand ising roya ltie s and tha t "hund r e d s of28 m e rc hand ising p rod uc ts" be ar ing the ir im a ge s had be en a va ila ble to the p ublic , th rough va rious

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1 c hanne ls, be ginning a t tha t sam e tim e . (Compare FA C , ~ ~ 1 8,6 2 w ith ~~ 17 , 19-29 .) In ligh t of2 th is fa ct , a nd P la in tiffs ' a lle ga tio n tha t th ey ne ve r r ec eiv ed a s in gle r oy alt y p a ym e n t, P la in tif fs '3 asse rt ion tha t the y c ould not, w ith re asona ble d ilige nc e, ha ve d isc ove re d D e fe nd ants' a lle ge d fra ud4 until 2007 is entir e ly im p lausible on the fa c e of the FAC . See Manti v. Gunari, 5 C al. Ap p, 3d5 44 2,4 50 (1 970 ) (w he re the re a re "a nta gonist ic a lle ga tions" w ith in a c la im , "the c ou rt is r eq uir ed6 to ta ke a s t rue the ave rm e nts in the com p la in t w hich be ar m ost st rongly aga inst the p le ad er").7 C. Because Plaintiffs' Newly Proposed Fraud Theory h Flawed On Its Face. Leave To

Am end W ould B e Futile A nd Should B e D enie dIt is c le a r from the O pp osit ion tha t the re is no se t of fa c ts on w hic h P la int iffs c an

ad equa te ly p le ad a fraud c la im ~ w he the r fraud ule nt c onc ea lm e nt or p rom issory fraud . In a la st-d itch e ffor t to save the se c la im s, the O pp osit ion se eks le ave to am e nd to a llege an entir e ly ne wfraud the ory: tha t if D e fe nd ants had not p rom ise d to c om p ensa te P la int iffs for the use of the irna m es, voic es a nd like ne sse s, P la in t iffs w ould not ha ve e nte re d into m e rc ha nd ising p rovisions,w hic h g av e th e D e f e nd a nt s t he e xc lu siv e right to use the ir na m es, voic es a nd like ne sse s. As are sult , P la in t iffs asse rt tha t, in a dd it ion to not be ing c om p e nsa te d by D e fe nd ants, the y alte rna tive lylo st the o pp or tu nity to p ursu e u nid en tif ie d a nd h yp oth et ic al o pp or tu nit ie s to 'e arn c om p e nsa tio nfrom the use of the na m es, voic es a nd like ne sse s. (O p p'n , 7:22-8 :2. 8 :9 -28 & 11:11-12 . )

A p la in t iff ha s the burd e n to show in w ha t m anne r he or she c an am end the c om p la int , andhow tha t am e nd m ent w ill change the le gal e ffe c t of the p le ad ing. Goodman v. Kennedy, 1 8 C a l.3d 335 ,349 (1976). L eave to am end should be d e nie d w he re "fa c ts a re not in d isp ute a nd thena ture of the c la im is c le ar but no lia bility e xists und er substa ntive la w." Lawrence v . Bank ofAm. , 163 C al. Ap p, 3d 431 , 436 (1985). C our ts m ust ana lyze the va lid ity of a p rop ose dam endm e nt to d e te rm ine if the am endm e nt w ould be fut ile . Cal. Cas. G en. Ins. Co, v . S up er . C t.(Gorget), 173 C al. Ap p, 3d 274 , 280-81 (1985), d isa pp ro ved on other g ro und s in K ra nsco v , Am .Emp ire S urp lus L in es In s. C o., 23 C al. 4 th 390 , 407 (2000). An am endm ent is fu t ile w he re ap la int iff c annot sta te a c la im and no se t of fa c ts c an be p rove d und e r the am e ndm e nt to the 'p le ad ings tha t w ould c onstitute a valid a nd suffic ie nt c la im or d efe nse . Foxborough v , Van A t /a ,26 C al. Ap p. 4 th 217 , 230 (1994); Yee v. Mobilehom e P ark R ental R eview Bd., 6 2 C al. App, 4 th

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27 G ive n the e xp re ss p rovisions of the ir c ontra cts, the O p posit ion's a lle ga tions w ith re sp ec t to

re lia nc e, a p la in t iff c annot m e re ly a sse rt c onc lusory a lle ga tions tha t the y re lie d on a d efe nd ant 's2 m i sre pre se nta tion by re fra in ing from ta king a p ar t ic ula r a ct ion; ra the r, a p la in tiff m u st sp ec if ic ally3 fa c ts tha t d em onstra te "a c tions, a s d ist inguishe d from unsp oken and unre cord ed thoughts and4 d ec isio ns, th at w ou ld in dic ate th at the p la in tiff a ctu ally r elie d o n the [a lle ge d] m i sr ep re se nta tio ns."5 Small v . F ritz Cos ., lnc., 30 C al. 4 th 167 , 184 (2003); Ham ilton v. G re enw ich Investors X XV I,6 LLC, 195 C al. A pp . 4 th 1602,1615 (2011). M oreove r, suc h re lianc e m u st be just if iab le , i.e. the .7 p la int iff w as just if ie d in be lie ving the d efe nd ant's r e pre se nta tion in the l ight of the plaintiff's ow n8 know ledge and experience. G ray v . Don Mille r & Assocs., lnc., 35 C al. 3d 498 ,503 (1984);9 Alliance M ortgage Co. v. Rothw ell, 10 C al. 4 th 1226 , 1239 (1995) (c la im s m u st be d ism isse d

10 w he re "re a sonable m ind s c an c om e to only one c onc lusion base d on the fac ts"). F ina lly , P la in t iffs1 1 m ust show tha t the y re lie d on the a lle ge d fraudule nt a c t to the ir d e tr im e nt . Carte r v . P rim e12 H ealthcare Paradise Valley LLC, 198 C al. Ap p. 4 th 396 , 409 (2011). H e re , not only are the re no13 fa c ts sup por t ing P la in t iffs ' c onc lusory a llega tions of re lianc e , but a s a p rac tic al m a tte r any such14 re lianc e w as not just if ie d ,15 None of the m e rc hand ising p rovisions in the F irst Agre em ents conta ined an e xc lusiv ity16 c lause . A cc ord ingly , for the p er iod 1973-1979 , in ad d it ion to be ing c om p ensa te d for the use of17 the ir nam e and like ne ss w ith re sp ec t to "H ap py D ays" m e rchand ise , e a c h of the P la int iffs w ere1g fre e to ente r in to othe r agre em e nts for the use of the ir nam e , voic e or like ne ss. (C am p be ll D e c l.,19 E xhs, 1 -5 , ~ 21 .) T he m e rc hand ising p rovision c onta ine d in B osley 's or M oran 's Se cond and20 T hird A gre em e nts d id not c onta in an e xc lusiv ity c lause . (Id., E xhs, 6 , a t ~ 18 ; 10 , ~ 18 ; s ee a lso21 id., E xhs. 11 , 13 .) T he m e rc hand ising p rovision in R oss' Se c ond and T hird Agre em ent had an22 e xc lusiv ity c lause tha t ap plie d to the t im e p er iod from 1980-1983 only . (See id., E xhs. 7 , ~ 18 ;23 12 .) T he m e rchand ising p rovision in W illiam s ' S e c ond A gre em ent had an e xc lusiv ity c lause24 w hic h ap plie d to the t im e p er iod 1979-1981 only . (See td., E xh. 8 , , 18 .) T he m e rc hand ising25 p rovision in M ost 's Se c ond A gre em e nt c onta ine d an e xc lusiv ity c lause w hic h ap plie d to the t im e~.~2 ; 26 p eriod 1979-1980 only . (Id., E xh. 9 , ~ 18 .)28 M oran and B osle y a re d em onstrably fa lla c ious be cause the m e rc hand ising p rovisions in the ir

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a gr ee m e nts d id not p rohib it the m from e nte ring in to agre em e nts w ith th ird p ar t ie s. T he y c ould nothave be en "tr ic ke d" in to agre eing to a c ontra c t p rovision tha t d oe s not e xist in the ir agre em e nts.

W ith re sp ec t to the re m aining P la in t iffs (R o ss, W illia m s a nd M o st), the c onc lusorya lle ga tions a llud ed to in th e O pp osit ion a re insuffic ie nt . R oss, W illiam s and M ost m u st a lle ge tha tthe e xc lusiv ity p rovision in th e S ec ond A gre em e nt w as a foc us of the c ontra c t ne gotia t ions, andthe y m u st inc lud e som e fa cts to sup p or t the ir a sse rt ion tha t the y e nte re d in to the m e rc ha nd isingp rov ision in the S ec ond A gre em e nt, w hic h c onta ine d an e xc lusi v ity c lause , sole ly base d on thefa lse re pre se nta t ions or c onc ea lm e nt of m a te ria l fa c ts by D e fe nd ants. E ve n if the y w e re able to d oso, how e ve r, the y st ill c ould not show tha t the y just if ia bly re lie d to the ir d etr im e nt for tw o re asons.

F irst , the p re m ise of th is e nt ir e c la im is tha t P la in t iffs had not b e en p aid any roya lt ie s orre ce iv ed a ny d istr ibution sta te m e nts p rior to e nte ring in to the S ec ond (a nd T hird ) A gre em e nt .A cc ord ingly , be ca use P la in t~ ffs a lle ge tha t the y ha d no t re ce ive d a ny p aym e nts whatsoever f romD e fe nd ants for six ye ars, the ir a lle ge d d ec ision the re afte r to gra nt P ara m ount the e xc lusive r igh t touse the ir nam e and like ne ss, w ith no e xp ec ta t ion tha t any roya lt ie s w ould be e arne d, c annot bec on st ru ed a s j us tif ia ble r elia nc e . Gray, 35 C al. 3d a t 503; A ll ianc e Mor tgage , 10 C a\. 4 th a t 1239 .

S ec ond , P la in t iffs c annot a lle ge tha t e nte rin g in to the m e rc ha nd ising p rovision, w as ad etr im e nt to the P la in t iffs . T o the c on tra ry , th is p rovision is the basis for the p aym e nt o f a llm e rc ha nd ising roya lt ie s - a ' be ne fit to the P la in t iffs. H ad P la in t iffs sought to re m ove th isp rov ision f rom the ir agre em e nts, the re sult w ould sim p ly have be en tha t P la in t iffs w ould not havere ce iv e d any roya lt ie s from m e rc hand ising. In shor t , P la in t iffs w ould have fa re d no w orse e ve n asa re sult of a ny a lle ge d fa lse p rom i se a nd a cc ord ingly , P la in t iffs c annot p le ad d etr im e nta l re lia nc e.

3. P la in tiffs C an N ot A lleg e C au sa tio n a nd D am ag esL ike the ir r e lia nc e a rgum e nt, the O p posit io n a tte m p ts to e ntir e ly re va m p P la in t iffs '

c onc ea lm e nt c la im by asse rt ing for the fir st t im e tha t P la in t iffs w ere ad dit iona lly d am a ge d in anu nid e nt if ie d a m o un t by the loss of hyp othe tic al m e rc ha nd ising op p or tunit ie s. (O p p'n a t 8 :9 -28 .)In ord er to a de qua te ly a lle ge c ausa tion a nd d am a ge s, P la in t iffs m u st sp ec if ic ally a lle ge a ctua lop p or tunit ie s tha t the y c ould h ave e xp loit e d but d id not be ca use of a n e xc lusiv ity p rovision . SeeSmall , 30 C al. 4 th a t 184 (to sta te a c la im for fraud base d on p la in t iffs forbe a ranc e from ac tion,216762.5.doc 8 8C4 5 1 5 9 1R E PL Y IN SU PPOR T OF D EM U RR E R TO FIR ST AM E ND ED COM PLAINT

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happy days lawsuit demurrer

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