Filed 1/27/22 Kiupelian v. Gemayel CA2/2

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions 

not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion 

has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION TWO

ARA KIUPELIAN et al.,

Plaintiffs and Appellants,

v.

GEORGE GEMAYEL et al.

Defendants and 

Respondents.

 B309826

 (Los Angeles County

 Super. Ct. No. 

 19STCV21444)

APPEAL from a judgment of the Superior Court of Los 

Angeles County, Holly J. Fujie, Judge. Affirmed.

James A. Shalvoy for Plaintiffs and Appellants.
2

K&L Law Group and Marc Lazo for Defendants and 

Respondents. 

* * * * * *

Two investors bought shares of “penny stock” in a company 

based on the representation that the stock’s value would increase 

by up to 75,000 percent. Despite quickly learning that this 

representation was bogus, the investors waited more than four 

years to sue for intentional and negligent misrepresentation. 

After reviewing multiple iterations of a complaint that were

internally inconsistent or inconsistent with one another, and 

after entertaining multiple demurrers resting on some arguments 

that were legally specious or that misrepresented the record, the 

trial court ultimately sustained a demurrer to the investors’ 

operative complaint without leave to amend on the ground that

the action was time barred. This was correct, so we affirm.

FACTS AND PROCEDURAL BACKGROUND

I. Facts

In January or March of 2015, Ara and Vardan Kiupelian 

(plaintiffs) bought stock in a company called Greenkraft, Inc.

(Greenkraft) at a price of $.02 to $.28 per share. They bought 

$71,000’s worth. 

Plaintiffs bought this stock based on the representations of 

George Gemayel (Gemayel), who was Greenkraft’s founder, 

president, CEO, and sole director. Specifically, Gemayel told 

them that (1) Greenkraft was a “manufacturer of alternative fuel 

engine products,” (2) Greenkraft was a “viable, growing 

business,” (3) there was “lots of demand” for Greenkraft’s 

products, (4) “lots of people” had already invested in Greenkraft, 

and (5) Greenkraft’s stock would increase in value to $13 to $15 
3

per share (that is, that the stock’s value would increase by 

somewhere between 4,642 and 75,000 percent).

Gemayel’s representations to plaintiffs were not true:

Greenkraft was never a “viable, growing business”; there was not 

“lots of demand” for its products; it had only 94 shareholders, 

which in plaintiffs’ view is not “lots of people”; and its stock price 

never exceeded $1 to $3 per share (and between 2016 and 2018, 

never exceeded $.50 per share).

Plaintiffs began to suspect something was amiss just a few 

months after they first purchased Greenkraft’s stock. Although 

some of their calls to Gemayel went unanswered, plaintiffs 

successfully reached and confronted Gemayel several times. In 

June 2015, they shared their concern that the stock price was 

“nowhere near” the promised price and that they intended to sell 

their stock; Gemayel urged them not to sell because the stock

price would go up because (1) “lots of companies” wanted to buy 

Greenkraft’s alternative fuel products, and (2) orders for those 

products “were going to be coming in.” Eight months after that, 

in February 2016, plaintiffs again confronted Gemayel regarding 

why their Greenkraft stock was worth less than $1 per share. 

Gemayel gave them a similar line—namely, that they should 

keep their stock because its price would go up because “lots of 

orders” were coming in. Nine months after that, in November 

2016, plaintiffs once again confronted Gemayel, who once again 

urged them not to sell their stock because its price would go up 

because Greenkraft’s “business prospects were good” due to “a lot 

of demand” for its products and the recent hiring of a “new 

marketing advisor.” And five months after that, in April 2017, 

plaintiffs had a face-to-face meeting with Gemayel at 

Greenkraft’s “factory”; Gemayel once again advised plaintiffs to 
4

“have patience” and not to sell their stock because the stock price 

would go up in light of “a lot” of orders coming in.

Plaintiffs did not subjectively learn that Gemayel’s 

representations were untrue until October 2018.

II. Procedural Background

A. Original complaint

On June 14, 2019,1 plaintiffs sued Greenkraft and Gemayel 

(collectively, defendants) for (1) intentional misrepresentation, 

and (2) negligent misrepresentation.2 The complaint alleged that 

plaintiffs bought their Greenkraft stock (and were financially 

injured) in March 2015, and that Greenkraft was not a “viable, 

1 The third party vendor plaintiffs hired to electronically file 

their complaint accidentally filed this complaint twice, and 

plaintiffs subsequently dismissed the second, erroneously filed 

complaint with prejudice and sought a refund of the filing fee. 

Defendants argue that plaintiffs’ dismissal of the second 

complaint constitutes a “retraxit” that bars plaintiffs’ lawsuit 

entirely. We reject this argument as specious. Although the 

common law doctrine of retraxit bars a party from proceeding on 

a lawsuit if she has voluntarily dismissed an earlier iteration of 

that suit with prejudice (e.g., Kronkright v. Gardner (1973) 31 

Cal.App.3d 214, 218-219), no case has applied the doctrine to a 

dismissal aimed at eliminating an accidental duplicative filing 

made by a third party vendor, and for good reason—extending 

the rule of automatic dismissal to this context would be a 

windfall to defendants and would be illogical, unjust, and unfair 

to the plaintiffs.

2 Although plaintiffs alleged a “negligence” claim, the 

substance of the allegations underlying that claim indicate a 

claim for negligent misrepresentation. (Saunders v. Cariss (1990) 

224 Cal.App.3d 905, 908 [court may disregard erroneous labels 

and look to facts alleged when ruling on demurrer].)
5

growing business” because its “managers and auditors” believe 

that Greenkraft’s “financial survival depends on” (1) developing 

new customers, (2) “reclassifying company debt as ‘non-current 

liability,’” and (3) “selling additional Greenkraft stock.”

Defendants demurred to the complaint and filed a motion 

to strike. In those filings, defendants argued that plaintiffs’ 

claims were barred by the statute of limitations. Plaintiffs filed a 

first amended complaint before the trial court could rule on the 

pending motions.

B. First amended complaint

On October 17, 2019, plaintiffs filed a first amended 

complaint. Although this complaint alleged the same two causes 

of action, the allegations were different in three ways pertinent to 

this appeal. First, plaintiffs changed the date of their stock 

purchases. Instead of alleging that they were defrauded when 

they bought all of the stock (and suffered financial injury) in 

March 2015, plaintiffs now alleged that they were defrauded 

starting in January 2015 when they first bought their stock (and 

suffered financial injury) and continued to buy stock through 

September 2017. Second, plaintiffs changed the reason why 

Greenkraft was not a “viable business.” Instead of alleging that 

Greenkraft was being mismanaged for not getting new 

customers, not reclassifying debt, and not selling more stock, 

plaintiffs now alleged that Greenkraft “never has been[] a real, 

viable business” because “[i]t has no product, manufacturing 

capability, inventory, employees, or customers.” Third, and 

ostensibly in response to defendants’ demurrer to the original 

complaint, plaintiffs for the first time alleged that they “did not 

discover” that Gemayel’s representations were untrue until 

October 2018, and “could not have discovered [the] same through 
6

the exercise of reasonable diligence” because Gemayel did not 

take all of their calls and “issu[ed] false and misleading public 

statements about Greenkraft’s business, business operations, and 

financial condition.”

Defendants demurred to and filed a motion to strike the 

first amended complaint. Among the six grounds asserted in 

these filings, defendants argued that plaintiffs’ complaint was 

time-barred, that plaintiffs lacked standing, that the complaint

was uncertain, and that it failed to allege facts sufficient to state 

any cause of action. After a full round of briefing and a hearing, 

the trial court sustained the demurrer and granted the motion to 

strike, both with leave to amend. Specifically, the court 

sustained the demurrer to the intentional misrepresentation

claim because plaintiffs did not “indicate by what means 

[Gemayel’s] representations were made” or “why [p]laintiffs 

relied on such alleged misrepresentations”; the court sustained 

the demurrer to the negligent misrepresentation claim because 

plaintiffs did not plead a breach of duty. 

C. Second amended complaint

On February 28, 2020, plaintiffs filed a second amended 

complaint. This complaint alleged the same two causes of action, 

but ostensibly in response to defendants’ prior argument that 

plaintiffs lacked standing, plaintiffs alleged that Gemayel’s

misrepresentations not only induced them to buy Greenkraft 

stock, but also induced them not to sell the stock they previously 

purchased. 

Defendants again demurred and filed a motion to strike 

this iteration of the complaint on the same six grounds as before. 

After a full round of briefing and a hearing, the trial court 

sustained the demurrer and granted the motion to strike; this 
7

time, however, the court did so without leave to amend.3

Specifically, the court ruled that plaintiffs’ claims were time 

barred. Those claims accrued in January 2015 and plaintiffs’ 

discovery of Gemayel’s misrepresentations was delayed—at the 

latest—until February 2016, rendering their June 2019 original 

complaint outside the three-year statute of limitations for 

intentional misrepresentation and two-year statute of limitations 

for negligent misrepresentation. The court reasoned that 

plaintiffs “had a factual basis to [suspect] some wrongdoing by 

February of 2016” “given the repeated instances of the 

Greenkraft stock price trading well below its expected value 

despite Gemayel’s representations that the stock price would go 

up” and that orders for Greenkraft products would come in. 

Following entry of judgment, plaintiffs filed this timely 

appeal.

DISCUSSION

A plaintiff has three years to file a claim for intentional 

misrepresentation and two years to file a claim for negligent 

misrepresentation. (Code Civ. Proc., §§ 338, subd. (d), 339, subd. 

(1).) Plaintiffs do not dispute that their June 2019 original 

complaint was filed outside those limitations periods if the 

accrual date for their claims is keyed to the date that they first 

3 The trial court’s minute order on one occasion referred to 

the sustention of the demurrer as being “with leave to amend,”

but the court subsequently issued a nunc pro tunc order 

correcting that typo. From this typo and one other in the minute 

order, plaintiffs extrapolate that the trial court mistakenly 

“conflated” its analysis of why the first and second amended 

complaints were defective. This argument is without merit, as 

the court’s reasoning underlying its two demurrer rulings is 

different. 
8

purchased the worthless Greenkraft stock in January 2015. 

However, plaintiffs urge that the trial court erred in dismissing 

their claims because (1) the so-called “delayed discovery rule” 

postponed the accrual of their claims until October 2018, which 

would make their claims timely, and (2) the court should have 

given them a third opportunity to amend their complaint.

I. The Law

A. Regarding demurrers, generally

In assessing whether a demurrer was properly sustained, 

we independently ask “‘whether the [operative] complaint states 

facts sufficient to constitute a cause of action.’” (Loeffler v. Target 

Corp. (2014) 58 Cal.4th 1081, 1100 (Loeffler), quoting City of 

Dinuba v. County of Tulare (2007) 41 Cal.4th 859, 865; see also 

Lee v. Hanley (2015) 61 Cal.4th 1225, 1230 [de novo review].) In 

answering this question, we “‘assume the truth of the complaint’s 

properly pleaded or implied factual allegations.’” (Loeffler, at p. 

1100, quoting Schifando v. City of Los Angeles (2003) 31 Cal.4th 

1074, 1081.) We will also take judicial notice of harmful 

allegations from prior iterations of a complaint and disregard 

new and contrary allegations. (Smyth v. Berman (2019) 31 

Cal.App.5th 183, 195 (Smyth).) A complaint will be deemed to 

fail to state facts sufficient to constitute a cause of action when it 

shows, on its face, that the cause of action sought to be alleged is 

barred by the applicable statute of limitations. (County of Los 

Angeles v. Commission on State Mandates (2007) 150 Cal.App.4th 

898, 912; Doe v. Roman Catholic Archbishop of Los Angeles (2016) 

247 Cal.App.4th 953, 960.) In assessing whether leave to amend 

was properly denied, we review for an abuse of discretion by 

asking “‘whether there is a reasonable possibility that the defect 

can be cured by amendment.’” (Loeffler, at p. 1100.) 
9

B. Regarding the delayed discovery rule

The statute of limitations governing a particular cause of 

action begins to run when that cause of action accrues. (Code 

Civ. Proc., § 312; Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 

Cal.4th 797, 806 (Fox); Norgart v. Upjohn Co. (1999) 21 Cal.4th 

383, 397 (Norgart).) “Generally speaking, a cause of action 

accrues at ‘the time when the cause of action is complete with all 

its elements.’”4 (Fox, at p. 806; Aryeh v. Canon Business 

Solutions, Inc. (2013) 55 Cal.4th 1185, 1191.) An exception to 

this general rule for defining the accrual of a cause of action is 

the delayed discovery rule. (Norgart, at p. 397.) 

The delayed discovery rule postpones the accrual of a claim 

(and hence the running of the applicable limitations period) until 

the earlier of when the “‘“plaintiff either (1) actually discovered 

his injury and its . . . cause or (2) could have discovered [the] 

injury and cause through the exercise of reasonable diligence . . . 

.” [Citation.]’” (CAMSI IV v. Hunter Technology Corp. (1991) 230 

Cal.App.3d 1525, 1536, italics omitted.) Under the latter prong, 

the limitations period will begin to run once the facts available to 

the plaintiff would cause a reasonable person to suspect that he 

has been injured and that his injury was due to someone’s 

wrongful conduct. (Nguyen v. Western Digital Corp. (2014) 229 

Cal.App.4th 1522, 1551 (Nguyen); Fox, supra, 35 Cal.4th at p. 807 

4 The elements of intentional misrepresentation are (1) 

misrepresentation, (2) knowledge of falsity (or “scienter”), (3) 

intent to defraud, (4) justifiable reliance, and (5) resulting 

damage. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) 

The tort of negligent misrepresentation has the same elements 

except the second and third, which are keyed to negligent rather 

than intentional conduct. (Gagne v. Bertran (1954) 43 Cal.2d 

481, 487-488; Civ. Code, § 1710.) 
10

[“look[ing] to whether the plaintiffs have reason to at least 

suspect that a type of wrongdoing has injured them”].) Once the 

plaintiff has a suspicion of wrongdoing, and therefore an 

incentive to sue, he must decide whether to file suit or sit on his 

rights; so long as a suspicion exists, “the plaintiff must go find 

the facts; [he] cannot wait for the facts to find [him].” (Jolly v. Eli 

Lilly & Co. (1988) 44 Cal.3d 1103, 1111 (Jolly).) Therefore, the 

limitations clock will start ticking even if the plaintiff does not 

know “‘the specific “facts” necessary to establish [his potential] 

claim’” (Nguyen, at p. 1551) or the full extent of his injury (Miller 

v. Lakeside Village Condominium Assn. (1991) 1 Cal.App.4th 

1611, 1623), and even if the plaintiff has not investigated his 

suspicion (Landale-Cameron Court, Inc. v. Ahonen (2007) 155 

Cal.App.4th 1401, 1408). Once the plaintiff has ‘“‘“notice or 

information of circumstances to put a reasonable person on 

inquiry, or has the opportunity to obtain knowledge from sources 

open to his investigation,”’”’ he is charged with presumptive 

knowledge so as to trigger the limitations period. (Shamsian v. 

Atlantic Richfield Co. (2003) 107 Cal.App.4th 967, 980

(Shamsian).) 

To invoke the “delayed discovery” rule, a plaintiff must 

plead facts sufficient to convince the trial judge that delayed 

discovery was justified. (William L. Lyon & Associates, Inc. v. 

Superior Court (2012) 204 Cal.App.4th 1294, 1310.) Specifically, 

the plaintiff must plead (1) the time and manner of discovery; 

and (2) ‘“the inability to have made earlier discovery despite 

reasonable diligence.”’ (Fox, supra, 35 Cal.4th at pp. 808-809.) 

Where, as here, a plaintiff alleges that his discovery of a wrong 

was delayed by the defendant’s further misrepresentations aimed 

at concealing the wrongdoing, the applicability of the delayed 
11

discovery rule turns on whether the plaintiff’s reliance on those 

dissembling representations was reasonable. (Grisham v. Philip 

Morris, U.S.A., Inc. (2007) 40 Cal.4th 623, 637 (Grisham).)

II. Analysis

A. Plaintiffs’ claims are time barred

Based on the facts alleged in the operative complaint, the 

trial court correctly determined as a matter of law that plaintiffs’ 

discovery of defendants’ wrongdoing was delayed, at most, until 

February 2016 (which renders plaintiffs’ claims filed in June 

2019 untimely). That is because a reasonable person in plaintiffs’ 

situation would have suspected, by February 2016, that he had 

been injured and that his injury was due to someone’s wrongful 

conduct. (Fox, supra, 35 Cal.4th at p. 807.) Indeed, plaintiffs 

alleged in the operative complaint that they suspected injury and 

wrongdoing as early as June 2015, when they confronted 

Gemayel about why the value of their stock was nowhere near 

the $13 to $15 per-share price Gemayel had promised. Although 

in June 2015 a reasonable person in plaintiffs’ position may not 

have realized that the low stock price was due to someone’s 

“wrongful conduct,” that light bulb would have gone off in a 

reasonable person’s mind by February 2016, when Gemayel made 

the same excuses and same empty promises about the status of 

Greenkraft and the soon-to-be-rocketing value of its stock as he 

did in June 2015. These excuses and promises would have rung 

particularly hollow in February 2016 given that, as plaintiffs 

allege, Gemayel had ignored several other attempts to contact 

him. (Cf. Kitzig v. Nordquist (2000) 81 Cal.App.4th 1384, 1391-

1393 [discovery of wrongdoing may be delayed when a neutral 

third party giving a “second opinion” says there was no 

wrongdoing]; Rosas v. BASF Corp. (2015) 236 Cal.App.4th 1378, 
12

1395-1396 [same].) In other words, a reasonable person might 

not suspect wrongdoing when a promised check does not arrive, 

or even when the sender assures “the check is in the mail” the 

first time; but by the second time the sender blithely assures “the 

check is in the mail,” no reasonable person would accept the 

sender at his word. Because, by February 2016, plaintiffs had 

‘“‘“notice or information of circumstances to put a reasonable 

person on inquiry”’”’ that they had been wronged, plaintiffs are 

charged with presumptive knowledge and the limitations clock 

began to tick. (Shamsian, supra, 107 Cal.App.4th at p. 980.)

Plaintiffs make what boil down to three arguments in 

response.

First, plaintiffs contend that the question of whether a 

reasonable person would have suspected wrongdoing is usually a 

question of fact inappropriate for resolution on demurrer. 

(Accord, E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 

Cal.App.4th 1308, 1320 (E-Fab); United States Liab. Ins. Co. v. 

Haidinger-Hayes, Inc. (1970) 1 Cal.3d 586, 597.) But it is not 

inevitably a question of fact, and may be resolved as a question of 

law on demurrer where “reasonable minds can draw only one 

conclusion” from the allegations in the operative complaint. (EFab, at p. 1320; Jolly, supra, 44 Cal.3d at p. 1112.) Here, we 

conclude, as a matter of law, that a reasonable person in 

plaintiffs’ situation would have suspected wrongdoing by 

February 2016 given plaintiffs’ admitted suspicion of wrongdoing 

along with Gemayel’s conduct in ignoring their calls, and when 

he was unable to ignore them, feeding plaintiffs the same vague 

lines about “orders coming in.” 

Second, plaintiffs urge that the trial court was “completely 

arbitrary” in saying that a reasonable person should have been 
13

aware of wrongdoing in 13 months because Gemayel did not 

promise any particular time frame by which the Greenkraft stock 

they bought would reach $13 to $15 per share. This argument 

misses the point. What put plaintiffs on constructive notice of 

their claims against defendants was not the mere passage of 13 

months; the trial court focused on February 2016 because, by that 

time, plaintiffs affirmatively alleged that they suspected 

wrongdoing and had gone to Gemayel twice with their concerns. 

By the time Gemayel effectively told them “Trust me” the second 

time after his first assurance changed nothing, plaintiffs were 

charged with constructive notice. By alleging all of the 

subsequent times Gemayel effectively told them, “Trust me” even 

after February 2016, plaintiffs seem to suggest that a reasonable 

person would accept a suspected fraudster’s assurances that

“everything is okay” ad infinitum. We reject this suggestion. 

Plaintiffs’ interpretation of the delayed discovery rule would 

allow for open-ended extensions of the statutes of limitation in 

derogation of the policy behind them—that is, to give wronged 

persons the incentive to reasonably and diligently investigate and 

sue for wrongs. (See Fox, supra, 35 Cal.4th at p. 807-808.)

Lastly, plaintiffs assert that their discovery of defendants’

wrongdoing was postponed by Gemayel’s later assurances that 

“orders were coming in.” We reject this assertion. Although a 

plaintiff’s reliance on a defendant’s representations aimed at 

concealing his wrongdoing can sometimes justify delayed 

discovery, it only does so when the plaintiff’s reliance is 

reasonable. (Grisham, supra, 40 Cal.4th at p. 637.) Here, 

plaintiffs’ reliance on Gemayel’s repeated representations that 

Greenkraft was a booming business was not reasonable in light of 

the flatlining stock price, Gemayel’s evasion of their calls, and 
14

how Gemayel’s June 2015 assurance had proven itself 

meaningless by February 2016. Plaintiffs add that they were 

unable to investigate any wrongdoing because Gemayel solely 

controlled Greenkraft. This is incorrect both legally and 

factually. It is incorrect legally because the delayed discovery 

rule does not postpone accrual just because a potential plaintiff 

does not have “the specific ‘facts’ necessary” to bring his claim; as 

courts have noted time and again, that is what the pretrial 

discovery process is for. (Jolly, 44 Cal.3d at p. 1111.) It is 

incorrect factually because plaintiffs did have the opportunity to 

obtain more information: They admit in their operative 

complaint that they visited Greenkraft’s “factory” and there is 

nothing to suggest they could not have examined Greenkraft’s 

public filings to get a sense of its ongoing operations (or lack 

thereof).

5

5 Although plaintiffs do not make this argument, we reject 

any notion that their purchase of Greenkraft stock until 

September 2017—which they allege in the first and second 

amended complaints—means that were harmed less than two or 

three years before they filed suit in June 2019. Any claim of 

injury within the limitations period is foreclosed by prior 

iterations of their complaint. That is because plaintiffs alleged in 

the original complaint that they suffered $71,000 in damages 

from purchasing Greenkraft stock in March 2015, and alleged in 

subsequent complaints that they suffered the exact same amount 

of damages from purchases running from January 2015 to 

September 2017. Because plaintiffs are bound by their prior 

allegations, they cannot make a factually inconsistent allegation 

in order to fit within the limitations period. (Smyth, supra, 31 

Cal.App.5th at p. 195.) 
15

B. The trial court properly denied leave to amend

The trial court also did not err in denying plaintiffs leave to 

amend because there is no reasonable possibility that the 

untimeliness of their lawsuit could be cured by amendment. 

(Loeffler, supra, 58 Cal.4th at p. 1100.) Because we have 

concluded as a matter of law that a reasonable person in 

plaintiffs’ position would have been on notice of suspected 

wrongdoing and the source of the injury by the second time 

Gemayal gave them the same excuses in February 2016, nothing 

plaintiffs can allege factually in a future complaint can cure that 

defect.

Plaintiffs respond with three arguments.

First, plaintiffs suggest that the trial court was wrong to 

state that they had already had two opportunities to fix mistakes 

with their complaint when, in reality, they had only had one 

opportunity. This is so, plaintiffs assert, because they filed their 

first amended complaint before the trial court could rule on 

defendants’ pending demurrer to and motion to strike their 

original complaint. This is disingenuous. Plaintiffs did not write 

or file their first amended complaint until after they had received 

defendants’ filings, and the first amended complaint responded to

some of the challenges raised in those filings. That plaintiffs 

filed the first amended complaint before the trial court could rule 

on the pending attacks to the pleadings does not somehow mean 

that plaintiffs had no opportunity to respond to those attacks.

Second, plaintiffs argue that they are entitled to a further 

opportunity to amend their complaint to address the statute of 

limitations defect because the trial court’s earlier order 

sustaining the demurrer to the first amended complaint rested on 

a different ground. According to plaintiffs, a plaintiff should 
16

always be given at least one opportunity to fix a defect in a 

pleading after a trial court has dismissed the pleading on the 

basis of that defect. This is not the law. Nor should it be in a 

case like this, where nothing plaintiffs could plead could cure the 

defect justifying dismissal.

Third, plaintiffs contend that they are able to plead 

additional facts about how they learned of defendants’

wrongdoing in October 2018. This is irrelevant. Whether 

plaintiffs can allege further facts to support when they acquired 

actual knowledge of defendants’ malfeasance has no bearing on 

our conclusion as to when they are charged with constructive

knowledge. 

* * *

In light of our analysis, we have no occasion to reach 

defendants’ alternative arguments in favor of affirming the trial 

court’s demurrer ruling. 
17

DISPOSITION

The judgment is affirmed. Each party is to bear its own 

costs on appeal.6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.

______________________, J.

We concur: HOFFSTADT

_________________________, P. J.

LUI

_________________________, J.

ASHMANN-GERST

6 The poor judgment exhibited by defendants’ counsel on 

appeal did not go unnoticed. Defendants’ brief starts with a 

recitation that plaintiffs are “sophisticated stock investors” who 

“often invested in small start-up penny stock companies and then 

sued those companies in a shake down fashion forcing a 

settlement amount.” These “facts” are nowhere in any of 

plaintiffs’ complaints and are certainly not subject to judicial 

notice; as such, they have no place in an appeal reviewing the 

sustaining of a demurrer. What is more, they appear to be 

nothing more than an ad hominem attack unsupported by the 

record. This tactic, coupled with defendants’ pursuit of the

altogether specious assertion that plaintiffs’ claims are barred 

because they cured their vendor’s error by dismissing the 

accidentally filed duplicate complaint, justifies the equal 

imposition of costs in this case. (Cal. Rules of Court, rule 

8.278(a)(5).)