Court Opinion

ID: 6113365
Source: CourtListenerOpinion
Date Created: 2022-01-27 19:02:25.971008+00
Date Added: 2024-06-11T08:02:22.452440
License: Public Domain

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   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                        DIVISION TWO

ARA KIUPELIAN et al.,                                        B309826

         Plaintiffs and Appellants,                          (Los Angeles County
                                                             Super. Ct. No.
         v.                                                  19STCV21444)

GEORGE GEMAYEL et al.

     Defendants and
Respondents.

     APPEAL from a judgment of the Superior Court of Los
Angeles County, Holly J. Fujie, Judge. Affirmed.

         James A. Shalvoy for Plaintiffs and Appellants.
     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

                                2
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

                                  3
“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].)

                                  4
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

                                 5
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

                                  6
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.

                                7
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.)

                                  8
       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.)

                                 9
[“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

                                  10
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,

                                11
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. (E-
Fab, 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

                                 12
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

                                13
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.)

                                 14
       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

                                 15
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.

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                        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).)

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