Case Name: Wells Fargo Bank, N.A. v. Device Dynamics Inc. dba HGM Device Dynamics, et al.
Case No.: 1-13-CV-242022
Cross-Defendants Shahreyar Nezaratyzadeh and Michael Meindorfer (collectively, ?Cross-Defendants?) demur to the first amended cross-complaint (?FACC?) filed by defendant/cross-complainant Device Dynamics Incorporated (?Device?).
Cross-Defendants? request for judicial notice is GRANTED.? (Evid. Code, ? 452, subd. (d).)
Cross-Defendants? demurrer to the FACC on the ground of failure to state facts sufficient to constitute a cause of action is OVERRULED.
Cross-Defendants? demurrer to the first (Fraud) and fourth (Breach of Fiduciary Duty) causes of action on the ground of failure to state facts sufficient to constitute a cause of action is OVERRULED.? Contrary to Cross-Defendants? assertions, it does not appear ?clearly and affirmatively? from the FACC that these claims are time-barred.? (See Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403.)
Cross-Defendants? demurrer to the second cause of action (Breach of Written Contract [Express Contractual Indemnity]) on the ground of failure to state facts sufficient to constitute a cause of action is SUSTAINED WITHOUT LEAVE TO AMEND.? The right of indemnity may ?arise from either of two general sources: First, it may arise by virtue of express contractual language establishing a duty in one party to save another harmless upon the occurrence of specified circumstances.? Second, it may find its source in equitable considerations brought into play either by contractual language not specifically dealing with indemnification or by the equities of the particular case.?? (E.L. White v. Huntington Beach (1978) 21 Cal. 3d 497, 506.)? Here, the obligation to indemnify and defend set forth in Section 7.6 of the Merger Agreement is limited to the specific dispute referenced in the preceding sentences, i.e., that involving Kristine Lawton, and thus provides no basis for indemnification in the underlying action by Wells Fargo Bank, N.A.
Cross-Defendants? demurrer to the third cause of action (Declaratory Relief) on the ground of failure to state facts sufficient to constitute a cause of action is SUSTAINED WITHOUT LEAVE TO AMEND.? ?To qualify for declaratory relief, [a party] would have to demonstrate its action presented two essential elements: (1) a proper subject for declaratory relief, and (2) an actual controversy involving justiciable questions relating to [the party?s] rights or obligations.?? (Wilson & Wilson v.City Council of Redwood City (2011) 191 Cal.App.4th 1559, 1582.)? Generally, declaratory relief is available only to parties to a contract.? (See e.g., Blank v. Kirwan (1985) 39 Cal. 3d 311, 331; see also Code Civ. Proc., ? 1060 [?Any person interested under a contract ? may ? bring an original ? for a declaration of his rights and duties in the premises, including a determination of any question or validity arising under such instrument or contract?].)? None of the subjects pleaded in the third cause of action provide a basis for declaratory relief.? As articulated above, there is no basis for express indemnity against Nezaratyzadeh in the Merger Agreement; thus, Device?s attempt to re-cast the deficient indemnification claim as one for declaratory relief is unavailing.? Further, Device?s request for disgorgement of profit and consideration obtained on account of the alleged fraud is redundant to that claim.? Moreover, declaratory relief only ?operates prospectively, and not merely to the redress of past wrongs.?? (Babb v. Superior Court (1971) 3 Cal. 3d 841, 848.)