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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
TABLE OF CONTENTS
1 Page
2 TABLE OF AUTHORITIES ............................................................................................................. ii
4 INTRODUCTION ............................................................................................................................. 1
7 ARGUMENT ..................................................................................................................................... 3
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3 Bank of N.Y. Mellon v. Citibank, N.A., 8 Cal. App. 5th 935 (2017) .............................................. 3, 4
4 Chandavong v. Fresno Deputy Sheriff’s Ass’n, 599 F. Supp. 3d 1017 (E.D. Cal. 2022) .................. 9
6 Ekstrom v. Marquesa at Monarch Beach Homeowners Ass’n, 168 Cal. App. 4th 1111
(2008) ........................................................................................................................................... 9
7
Ferrick v. Santa Clara University, 231 Cal. App. 4th 1337 (2014) .................................................. 9
8
Formic Ventures LLC v. SomaLogic, Inc., No. 23-cv-02660, 2023 WL 6037899 (N.D. Cal.
9 Sept. 15, 2023) ........................................................................................................................... 11
10 GEC US 1 LLC v. Frontier Renewables, LLC, No. 16-cv-1276, 2016 WL 4677585 (N.D.
Cal. Sept. 7, 2016) ..................................................................................................................... 11
11
Hageseth v. Superior Ct., 150 Cal. App. 4th 1399 (2007) ................................................................ 5
12
MMM Holdings, Inc. v. Reich, 21 Cal. App. 5th 167 (2018) .......................................................... 12
13
Monster Energy Co. v. Vital Pharmaceuticals, Inc., No. 18-cv-1882, 2019 WL 2619666
14 (C.D. Cal. May 20, 2019) .......................................................................................................... 12
15 Motivo Engineering, LLC v. Black Gold Farms, No. 2:22-cv-01447, 2023 WL 3150099
(C.D. Cal. Mar. 28, 2023) .......................................................................................................... 10
16
People v. Brown, 91 Cal. App. 4th 256 (2001).............................................................................. 4, 5
17
People v. Morante, 20 Cal. 4th 403 (1999) ....................................................................................... 4
18
People v. Renteria, 165 Cal. App. 4th 1108 (2008) .......................................................................... 3
19
People v. Selivanov, 5 Cal. App. 5th 726 (2016), as modified on denial of reh’g (Dec. 13,
20 2016) ............................................................................................................................................ 8
21 People v. Stewart, 16 Cal. 3d 133 (1976) ........................................................................................ 11
22 People v. Thomas, 53 Cal. 4th 1276 (2012), as modified on denial of reh’g (June 27, 2012) .......... 5
25 Pratt v. Higgins, No. 22-cv-04228, 2023 WL 4564551 (N.D. Cal. July 17, 2023) .................. 10, 14
26 Siry Inv., L.P. v. Farkhondehpour, 13 Cal. 5th 333 (2022) ...................................................... passim
27 State Dep’t of State Hosps. v. Superior Ct., 61 Cal. 4th 339 (2015) ............................................... 14
28
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
Tim Cross, LLC v. Associated Adjusters Network, Inc., No. 8:23-cv-01806, 2023 WL
9005635 (C.D. Cal. Nov. 30, 2023) ........................................................................................... 10
1
Youngman v. Nevada Irrigation Dist., 70 Cal. 2d 240 (1969)........................................................... 3
2
3 Statutes
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 MEMORANDUM OF POINTS AND AUTHORITIES
2 INTRODUCTION
3 Tenute del Mondo B.V. alleges that Cross-Defendants Brad Pitt and Mondo Bongo, LLC
4 violated Section 496 of the Penal Code by illegally seizing control of Chateau Miraval, diverting
5 its assets to side business in which they hold a disproportionate ownership interest relative to
6 Tenute, and concealing their conduct from Tenute. Its allegations state a claim under Section 496.
7 Cross-Defendants principally argue the Court lacks jurisdiction because most of their
8 improper conduct occurred abroad. But that argument is foreclosed by Penal Code Sections
9 27(a)(1) and 778a(a), which establish jurisdiction when an element of a crime or a preparatory act
10 in the commission of a crime is committed in California. Tenute sufficiently alleges that Pitt, a
11 California resident, directed, in California, Chateau Miraval’s CEO to conceal embezzled assets.
12 Cross-Defendants also argue that Tenute does not plead a Section 496 violation. This
13 argument is based on the mistaken premise that the misappropriated property did not belong to
14 Tenute. Regardless, Tenute pleads that neither Pitt nor Chateau Miraval’s CEO had the authority
15 to divert property to side businesses or personal expenses. Tenute also pleads criminal intent
17 argument that the misappropriation was not concealed because Jolie and Tenute later found out
18 about it simply ignores Tenute’s allegation that the discovery occurred after the conduct occurred.
19 Finally, Cross-Defendants argue that Tenute’s damages are speculative. The Court has
20 already rejected this contention, which ignores Tenute’s allegations that it expected to receive
22 FACTUAL BACKGROUND
23 In 2008, Pitt and Jolie purchased Chateau Miraval through their separate
24 investment companies, Mondo Bongo, LLC (“Mondo Bongo”) and Nouvel, LLC (“Nouvel”).
25 (Cross-Complaint ¶ 2.) The couple did not buy Chateau Miraval directly, but instead purchased
26 all the shares of Quimicum, Chateau Miraval’s parent company, thereby also acquiring Chateau
27 Miraval. (Id. ¶ 17.) Chateau Miraval was not profitable when Pitt and Jolie initially acquired it,
28
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 so they invested in the business by causing Mondo Bongo and Nouvel, respectively, to make loans
2 to Chateau Miraval through Quimicum. (Id. ¶ 18.) Nouvel indirectly loaned Chateau Miraval
3 €20 million. (Id.) These contributions were structured as loans, not equity investments, so that
4 once Chateau Miraval became profitable the loans would be repaid to Nouvel and Mondo Bongo,
5 and ultimately to Jolie and Pitt, thereby accounting for any disproportionate contributions. (Id.
6 ¶ 63.) Through its operating subsidiary, Miraval Provence, Chateau Miraval developed into a
8 In 2016, Jolie filed for divorce. (Id. ¶ 24.) After that filing, Jolie noticed that
9 Chateau Miraval was spending large sums of money on projects that did not appear to have a
10 legitimate business purpose. (Id. ¶ 25.) She began to insist on receiving information about the
11 company’s finances and sought to exercise greater supervision over its business. (Id.) Pitt
12 rebuffed these requests, and ultimately shut Jolie out of their co-equally owned business. (Id.)
13 Jolie then sold her interest in Chateau Miraval to Tenute del Mondo B.V. (“Tenute”) and assigned
15 Pitt meanwhile assumed control over the business and misappropriated its assets.
16 (Id. ¶ 30.) First, though Chateau Miraval has received €45 million in dividends from Miraval
17 Provence, these profits were not distributed to Quimicum, as they should have been. (Id. ¶¶ 31,
18 55, 64.) Instead, Pitt has diverted Chateau Miraval’s funds to Miraval Studios, a side-business in
19 which he holds a outsized interest compared to Nouvel and Tenute. (Id. ¶¶ 39–41, 65–74.) To
20 date, Chateau Miraval has loaned Miraval Studios €750,000 at .2% interest, which is well below
21 the market rate, (id. ¶ 70); spent €162,000 on Miraval Studios’ “management fees”, (id. ¶ 71); and
23 Second, Pitt has caused Chateau Miraval’s board to “approve” expenditures with no
25 Chateau Miraval, €1,106,658 on a swimming pool and €2,963,207 on “garment works”. (Id.
26 ¶ 34.) Because only Pitt enjoys a personal lease on the premises of the Chateau, these wasteful
28
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 LEGAL STANDARD
2 At the demurrer stage, “the allegations of the complaint must be liberally construed”.
3 Youngman v. Nevada Irrigation Dist., 70 Cal. 2d 240, 244–45 (1969) (quoting Cal. Code Civ.
4 Proc. § 452). The court “take[s] all properly pled facts as true, and draw[s] all reasonable
5 inferences in favor of the plaintiff.” Bank of N.Y. Mellon v. Citibank, N.A., 8 Cal. App. 5th 935,
6 943 (2017). The Court may also consider matters that are appropriate for judicial notice. Dryden
8 ARGUMENT
9 I. The Extraterritoriality Principle Does Not Bar Tenute’s Claim.
10 Cross-Defendants argue that Penal Code Section 496 does not apply
11 extraterritorially. (Demurrer at 10–15.) That is irrelevant because Tenute alleges that an element
12 of the offense occurred within California, which allows a California court to assert jurisdiction.
14 whole or in part in the state.” People v. Renteria, 165 Cal. App. 4th 1108, 1116 (2008) (emphasis
15 added) (internal citation and quotations omitted). Penal Code Section 27(a)(1) provides: “The
16 following persons are liable to punishment under the laws of this state: All persons who commit,
17 in whole or in part, any crime within this state.” Penal Code Section 778a(a) provides:
18 “Whenever a person, with intent to commit a crime, does any act within this state in execution or
19 part execution of that intent, which culminates in the commission of a crime, either within or
20 without this state, the person is punishable for that crime in this state in the same manner as if the
21 crime had been committed entirely within this state.” See also Penal Code § 781. The California
22 Supreme Court has “interpreted section 778a to mean that California has territorial jurisdiction
23 over an offense if the defendant, with the requisite intent, does a preparatory act in California that
24 is more than a de minimus act toward the eventual completion of the offense.” Renteria, 165 Cal.
25 App. 4th at 1116 (internal citations and quotations omitted). “[S]ection 27, subdivision (a)(1),
26 affords our courts jurisdiction over crimes partially committed within this state, and section 778a,
27 subdivision (a), affords our courts jurisdiction over crimes committed outside the state if the
28 defendant formed the intent and committed ‘any act’ within this state in whole or partial execution
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 of that intent.” People v. Morante, 20 Cal. 4th 403, 434 (1999); see also People v. Brown, 91 Cal.
2 App. 4th 256, 263 (2001) (“[Sections 27(a)(1) and 778(a)] appear clearly to confer jurisdiction on
3 the courts of this state when at least some part of a crime is committed in California.”).
4 Section 496 of the Penal Code provides: “Every person who . . . conceals, sells,
5 withholds, or aids in concealing, selling, or withholding any property from the owner, knowing the
6 property to be” “stolen” or “obtained in any manner constituting theft” is guilty of a criminal
7 offense. Tenute pleads that Pitt and Mondo Bongo concealed or aided in concealing the
10 within this state”, Penal Code § 27(a)(1); or (2) did “any act within this state” in execution of their
12 Concealing or Aiding in Concealing in Part within this State. Tenute alleges that
13 “Pitt and Mondo Bongo have misappropriated millions of dollars of Chateau Miraval funds that
14 should have been distributed to Tenute” to their side business, Miraval Studios, in which they hold
15 a 40% interest but in which Tenute has a mere 5% interest. (Cross-Compliant ¶ 66; see also id.
16 ¶¶ 40–41, 68.) For example, Chateau Miraval’s CEO, Venturini, informed Pitt’s business
17 manager, Grant, that Chateau Miraval would spend over €2 million on Miraval Studios and hide
18 the spending from Tenute’s predecessor-in-interest, Jolie. (Id. ¶ 68.) Pitt concealed or aided in
19 the concealing of the embezzlement in part because he sent a message to Venturini directing him
20 to “no longer send AJ reports as she is trying to shop her shares”. (Id. ¶ 68.) Cross-Defendants
21 argue that “[t]here is no basis on which to infer that Pitt sent this particular message from
22 California”. (Demurrer at 14.) But Tenute alleges that Pitt “is a resident of, and/or committed the
24 that, as Cross-Defendants suggest (Demurrer at 14), Pitt was present at Chateau Miraval, where
25 Venturini is CEO (Cross-Complaint ¶ 40), and messaged him rather than speaking face to face. At
26 the demurrer stage, where the Court “draw[s] all reasonable inferences in favor of the plaintiff”,
27 Tenute’s allegations are sufficient to allege that Pitt concealed or aided in concealing acts of
28 embezzlement that occurred, in part, in California. Bank of N.Y. Mellon, 8 Cal. App. 5th at 943.
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 Preparatory Act. Tenute pleads that Pitt committed a preparatory act related to
3 may be prosecuted “where only preparatory acts have occurred and where those preparatory acts
4 were not themselves elements of the offense”. People v. Thomas, 53 Cal. 4th 1276, 1284 (2012),
5 as modified on denial of reh’g (June 27, 2012) (simplified). Pitt’s message to Venturini was at
7 Cross-Defendants argue that Tenute pleads only extraterritorial conduct because its
8 allegations are “based on the underlying alleged embezzlement in France”, the information
9 concealed “was in France” and Tenute was harmed abroad. (Demurrer at 13.) These arguments
10 miss the mark. “The fact that other parts of the crime were committed elsewhere is immaterial, as
11 there is no constitutional or other reason that prevents a state from punishing, as an offense against
12 the penal laws of such state, a crime when only a portion of the acts constituting the crime are
13 committed within the state.” Hageseth v. Superior Ct., 150 Cal. App. 4th 1399, 1418 (2007)
14 (simplified); Brown, 91 Cal. App. 4th at 266 (“[I]t is necessary only that in this state there be non
15 de minimis preparatory acts done with the intent of completing the crime”).
16 Cross-Defendants then argue that the “messages Tenute cites fail to show that Pitt
17 concealed Château Miraval’s funds”, contending that “Pitt’s June 28 message is not an order or
18 directive on its face” and that “[i]f these messages show any concealment at all, it was by
19 Venturini, not Pitt, and it took place in France”. (Demurrer at 14.) This argument fails because it
20 ignore Tenute’s allegations that Pitt acts as Venturini’s boss and directs his actions. (Cross-
21 Complaint ¶¶ 29, 36) (describing how Venturini is “entirely beholden to Pitt” and when
22 challenged about “his authorization of spending on expenses for the sole benefit of Pitt”, he
23 “repeatedly responded in substance, ‘What am I to do? He’s my boss’”). The message sent by
24 Pitt (“I believe we should no longer send [Jolie] reports as she is trying to shop her shares”), read
25 in the light most favorable to Tenute, is an instruction by Pitt to Venturini to conceal information
2 Those legislative provisions are inapposite because they address jurisdiction when all the elements
3 of embezzlement occur outside of California and then the stolen property is brought into
4 California. Here, Tenute alleges that Pitt committed an element of a Section 496 offense—
7 not Jolie or Tenute, owned the embezzled property fails because it ignores Tenute’s allegations.
8 Finally, Cross-Defendants argue that applying Section 496 here “threatens to flout
9 the principle that a State cannot punish a defendant for conduct that may have been lawful where it
10 occurred” because Tenute has not shown that “the alleged conduct” was unlawful in France.
11 (Demurrer at 15 (internal citation omitted).) But Penal Code Section 778a(a) provides that when a
12 person does “any act within this state” in execution of their intent to commit a crime, “the person
13 is punishable for that crime in this state in the same manner as if the crime had been committed
14 entirely within this state”. (Emphasis added.) Therefore, whether the alleged conduct is also a
15 crime in France is irrelevant as long as an act in execution of the crime is committed in California.
16 II. Tenute Adequately Pleads Cross-Defendants’ Violation of Penal Code Section 496(a).
17 Tenute has alleged that Cross-Defendants’ conduct closely parallels the conduct in
18 Siry Investment, L.P. v. Farkhondehpour, 13 Cal. 5th 333 (2022) (Cross-Complaint ¶¶ 61–76),
19 which the California Supreme Court has held gives rise to a Section 496 claim. Siry, 13 Cal. 5th
20 at 361. Therefore, Cross-Defendants’ arguments in support of their contention that Tenute fails to
24 has been intrusted.” Penal Code § 503. Cross-Defendants contend Tenute does not plead the
25 crime because it “fails to allege that Pitt used Château Miraval’s assets in any manner that Château
26 Miraval did not authorize”. (Demurrer at 16.) This argument ignores critical allegations.
27 First, Tenute alleges that its own property was embezzled. (Cross-Complaint ¶ 65
28 (Cross-Defendants “deprived Tenute of the profits and loan repayments to which it is entitled”).)
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 Tenute alleges that when Jolie, its predecessor in interest, and Pitt invested in Chateau Miraval,
2 they did so in the form of loans “so that once Chateau Miraval became profitable the loans could
3 be repaid to Nouvel and Mondo Bongo, and ultimately to Jolie and Pitt”. (Id. ¶¶ 18–19.) Tenute
4 alleges that “Tenute is entitled to repayment of the loans, which matured on December 31, 2023”.
5 (Id. ¶ 63.) Tenute further alleges that after Chateau Miraval became profitable, “Pitt diverted
6 those profits, which should have been paid out as dividends and loan repayments, to his side
7 businesses”. (Id. ¶ 31.) That suffices to allege that Tenute’s property was stolen. See Siry, 13
8 Cal. 5th at 340, 361 (allowing plaintiff to recover where defendants “underpa[id] plaintiff its cash
9 distributions” by diverting them because the “diverted partnership funds[] belong[ed] to
10 plaintiff”). Tenute did not authorize these uses of its property. To the contrary, Tenute’s
15 sole benefit of Pitt, Venturini “responded in substance ‘What am I to do? He’s my boss’”. (Id.)
16 This allegation, read in a light most favorable to Tenute, amounts to an implicit admission that
17 Venturini knew he was misappropriating property by approving such expenditures. Venturini had
18 no choice but to follow the orders of Pitt—the man who pays and directs him. (Id. ¶ 29.)
19 Third, Cross-Defendants’ argument that Chateau Miraval’s spending for Pitt’s sole
20 benefit was “authorized” overlooks a key fact—that Pitt and Venturini intentionally concealed that
21 spending from a co-equal owner, Jolie. (Id. ¶ 68.) If the spending for Pitt’s sole benefit had been
22 duly authorized, Pitt and Venturini would not have needed to conceal it.
23 Cross-Defendants also argue that “Pitt had significant authority to use Château
24 Miraval’s assets”, which purportedly “undercuts any claim that Pitt exceeded his authority”.
25 (Demurrer at 16.) Even if true, “significant authority” would not give Pitt authority to misuse
26 funds. More fundamentally, this argument ignores the allegations in the Cross-Complaint that
27 Cross-Defendants exercised only “de facto control of Chateau Miraval”, that Pitt “unlawfully
28 seized control of Chateau Miraval” (Cross-Complaint ¶ 67 (emphasis added)), and that “Mondo
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 Bongo LLC, does, without a mandate . . . de facto run” Chateau Miraval, (id. ¶ 26 (second
2 emphasis added)). Tenute does not allege that Pitt had any legal authority to manage Chateau
3 Miraval. Cross-Defendants’ reliance on People v. Whitney, 121 Cal. App. 2d 515, 521 (1953) is
4 thus misplaced. The “broad powers” given to the defendant in Whitney included a power of
5 attorney over the property at issue, and the property owner knew about and did not object to the
6 defendant’s spending. 121 Cal. App. 2d at 521. In contrast, here, Pitt lacked legal authority over
7 the property and Tenute’s predecessor-in-interest, Jolie, expressly objected to the misuse of
8 Chateau Miraval’s funds, which should have been distributed as dividends or loan repayments.
9 (Cross-Complaint ¶¶ 26, 31, 35.)
12 Miraval purportedly benefitted from the spending. (Demurrer at 16–17.) These arguments lack
13 merit because the basis for Tenute’s claim is the misappropriation of Tenute’s property. In any
14 case, Tenute alleges that the renovations undertaken with Venturini’s approval had “no legitimate
15 business justification”. (Cross-Complaint ¶ 72.) That is sufficient to allege that Pitt and Venturini
17 Venturini had no authority to spend Chateau Miraval’s funds on projects that lacked a legitimate
18 business purpose. (See Tuffaha Decl. Ex. 2, French Commercial Code Article L225-35 (directors
19 must act in the interest of the corporation).) “The intent essential to embezzlement is the intent to
20 fraudulently appropriate the property to a use and purpose other than that for which it was
21 entrusted . . .”. People v. Selivanov, 5 Cal. App. 5th 726, 750 (2016), as modified on denial of
22 reh’g (Dec. 13, 2016); see also Penal Code § 504. Indeed, in Siry, the general partner had
23 misappropriated partnership funds. The California Supreme Court held that the defendants had
24 “obtained the diverted funds in a manner constituting theft”—despite the general partner’s
26 As to the personal expenses, the argument that “the renovations plainly benefited
27 Château Miraval” is undercut by Tenute’s allegation that the renovations lacked a legitimate
28 business purpose. (Cross-Complaint ¶ 72.) Similarly, that Pitt has a lease with Chateau Miraval,
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 (Demurrer at 17), does not refute that he effectively charged personal expenses to the business by
2 causing it to incur capital expenses that benefited him alone. (Cross-Complaint ¶ 34.)
3 Cross-Defendants repeatedly cite Ferrick v. Santa Clara University, 231 Cal. App.
4 4th 1337 (2014), to argue Venturini’s authorization of the spending defeats an embezzlement
5 claim. (Demurrer at 16–17.) Ferrick is inapposite because its complaint made no allegations that
6 “[defendant] lacked authority to use SCU’s credit card for the purpose of buying furnishings and
7 decor for the SCU-owned loft or that the expenditure of $11,000 exceeded his authority”. 231
8 Cal. App. 4th at 1348. In contrast, Tenute alleges that profits from Miraval Provence “should
9 have been paid out as dividends and loan repayments” (Cross-Complaint ¶¶ 31, 63), but were
10 instead used on projects which have no legitimate business justification, (id. ¶ 72), so Venturini
11 exceeded his authority. (See Tuffaha Decl. Ex. 2, French Commercial Code Article L225-35.)
15 faith belief” (Demurrer at 18), and purportedly “fails to allege Pitt’s intent to deprive Château
16 Miraval permanently of its property” (id. at 19). These after-the-fact attempts to justify the Cross-
18 Good faith. The good faith defense is an issue of fact not susceptible to resolution
19 on demurrer. Ekstrom v. Marquesa at Monarch Beach Homeowners Ass’n, 168 Cal. App. 4th
20 1111, 1123 (2008) (“A defense of good faith is necessarily factual in nature.”); Chandavong v.
21 Fresno Deputy Sheriff’s Ass’n, 599 F. Supp. 3d 1017, 1024 (E.D. Cal. 2022) (“Because the good
22 faith defense is an affirmative defense, the FDSA must plead and prove it. It is not a sufficient
24 Nevertheless, Tenute’s allegations show that Pitt did not act in good faith. Tenute
25 pleads that after Pitt “unlawfully seized control of Chateau Miraval” (Cross-Complaint ¶ 67), he
26 shut Jolie, Tenute’s processor-in-interest, “out of the business, and deprived her of information
27 about Chateau Miraval’s finances” (id. ¶ 25). Pitt and Venturini then “intentionally concealed”
28 from Jolie over two million euros of construction costs for Miraval Studios—an entity in which
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 Tenute has a mere 5% stake compared to Pitt’s 40% interest. (Id. ¶ 68.) Specifically, Pitt
2 supported Venturini in concealing these expenses by messaging Venturini that he should “no
4 that Pitt did not act in good faith, but with the deliberate calculation required to show criminal
5 intent. Pratt v. Higgins, No. 22-cv-04228, 2023 WL 4564551, at *9 (N.D. Cal. July 17, 2023)
6 (“Plaintiff plausibly alleges theft of funds and assets from a joint venture in a deliberate and
7 calculated manner that supports an inference of the required intent under § 496.”)
8 Cross-Defendants argue that Pitt’s prior oversight of Chateau Miraval and his use
9 of Chateau Miraval’s property in a manner consistent with past practice undercuts Tenute’s
10 embezzlement claim. (Demurrer at 18.) Not so. Tenute also alleges that after Jolie filed for
11 divorce, Cross-Defendants “unlawfully seized control” over the business, concealed information
12 about Chateau Miraval from Jolie, and begin diverting its assets to themselves. (Cross-Complaint
13 ¶ 25–29, 67.) That conduct far exceeded mere oversight and was decidedly inconsistent with past
14 practice.
17 01806, 2023 WL 9005635 (C.D. Cal. Nov. 30, 2023) and Motivo Engineering, LLC v. Black Gold
18 Farms, No. 2:22-cv-01447, 2023 WL 3150099 (C.D. Cal. Mar. 28, 2023). However, both of these
19 cases deal with honestly held but mistaken interpretations regarding rights to payment under a
20 contract, which are factually distinguishable from Tenute’s claims. In Tim Cross, the plaintiff
21 alleged that the defendant had misappropriated funds that were governed by a contract which
22 expressly granted the defendant the right to deduct the funds. 2023 WL 9005635, at *5. In
23 Motivo, the plaintiff “merely allege[d] in a conclusory manner that ‘Defendants defrauded Motivo,
24 committing theft’” while simultaneously alleging that the defendant “authorized a cost overrun
25 ‘based on the parties’ contract’”. 2023 WL 3150099, at *9. But Tenute alleges that Cross-
26 Defendants “have diverted Chateau Miraval’s profits to their own purposes and have used Chateau
27
28
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 Miraval’s assets to fund and develop their own side businesses” (Cross-Complaint ¶ 61), and
2 “intentionally concealed” their conduct (id. ¶ 68). 1 Those allegations show criminal intent.
3 Cross-Defendants also cite Formic Ventures LLC v. SomaLogic, Inc., No. 23-cv-
4 02660, 2023 WL 6037899, at *1 (N.D. Cal. Sept. 15, 2023) and GEC US 1 LLC v. Frontier
5 Renewables, LLC, No. 16-cv-1276, 2016 WL 4677585, at *9 (N.D. Cal. Sept. 7, 2016), but those
6 cases are not analogous. In Formic Ventures, the court held that “the plaintiffs’ intent argument
7 boils down to the notion that the plain language of the contract is so clear that this noncompliance
8 must have been intentional theft”. 2023 WL 6037899, at *1. Tenute makes no allegations
9 regarding contractual interpretation. Rather, Tenute alleges that Pitt engaged in deliberate,
10 calculated efforts to steal Chateau Miraval’s profits and to conceal that conduct so the business’
11 other owner would not find out. (Cross-Complaint ¶ 68.) And in GEC US 1, the allegations
12 established only that the defendants had misunderstood their ownership rights. 2016 WL
13 4677585, at *9. Here, Tenute alleges not misunderstanding, but that Pitt intentionally diverted
14 Chateau Miraval’s profits to himself and his side-businesses and concealed this conduct from the
16 Intent to deprive the owner permanently. Cross-Defendants assert that Tenute fails
17 to plead Pitt’s intent permanently to deprive Chateau Miraval of property. (Demurrer at 19.) But
18 this argument again ignores Tenute’s allegations that it owns the misappropriated funds, not
21 the funds that should have been distributed to Tenute because it owns constructions made for Pitt’s
22 benefit and holds a 10% stake in Miraval Studios is incorrect. (Demurrer at 19.) Tenute is owed
23 money, not improvements or a tiny stake in another company. Nor is the right to have Miraval
24 Studios “repay its loan with interest” (id.), fungible with cash dividends. Cross-Defendants’
25 argument that Chateau Miraval “was allocated a majority of projected profits from Miraval
26
1
Cross-Defendants cite People v. Tufunga, 21 Cal. 4th 935 (1999), and People v. Stewart, 16 Cal. 3d 133 (1976),
27
to argue that a good faith belief defeats an embezzlement claim. (Demurrer at 18–19.) Both cases were decided at the
post-conviction phase. The fact remains that the good faith defense is not appropriate for resolution at demurrer.
28
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 Studios” (id.), similarly fails because an allocation of projected future profits is not equivalent to a
2 present cash distribution. In any case, this argument is based on a document that merely depicts
5 MMM Holdings, Inc. v. Reich, 21 Cal. App. 5th 167 (2018) is distinguishable
6 because the defendant retained the plaintiff’s electronic documents for use in a litigation before
7 returning copies of them, id. at 185, while Cross-Defendants permanently spent funds that should
8 have been distributed to Tenute. Monster Energy Co. v. Vital Pharmaceuticals, Inc., No. 18-cv-
9 1882, 2019 WL 2619666 (C.D. Cal. May 20, 2019) is likewise distinguishable because the
10 plaintiffs did not allege “a property interest which could properly be the subject of a theft” and the
11 court found it “absurd[]” to apply § 496, which concerns personal property, to real property. 2019
12 WL 2619666 at *14. But Tenute has plausibly alleged Pitt’s intent to permanently “deprive[]
13 Tenute of the profits and loan repayments to which it is entitled”. (Cross-Complaint ¶ 65.)
17 Receipt. Cross-Defendants assert that Pitt did not receive stolen property because
18 Chateau Miraval’s funds were used to renovate the estate. (Demurrer at 20.) But Tenute pleads
19 adequately that Cross-Defendant Pitt received the funds spent on renovations to Chateau Miraval.
20 Tenute alleges that Cross-Defendants “directed” the spending on projects from which only Pitt
21 received benefits because only he has a residential lease on the premises and is exclusively able to
22 enjoy these recreational projects. (Cross-Complaint at ¶ 72.) Tenute further alleges that these
23 projects lack a legitimate business justification and are ultimately personal expenses which Pitt has
24 caused the joint venture to finance. (Id.) These allegations are sufficient to establish receipt.
26 Siry fails because the improperly diverted funds at issue in Siry were partially used to renovate the
27 partnership’s namesake investment property. (See Tuffaha Decl. Ex. 1 at ¶¶ 5, 32 (“The purpose
28 of the 241 Partnership was to own and operate an investment commercial property located at 241
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 E. 5th Street, Los Angeles, California 90013. . . . Defendants . . . improperly used the rental
2 income diverted to DTLA from the 241 Partnership to fund improvements to the commercial
5 that Pitt aided in concealing the embezzlement from Jolie are undercut by its allegation that Jolie
6 objected to these expenses. (Demurrer at 20.) That is incorrect. Tenute alleges that Jolie objected
7 only after she found out about the expenses after they had been incurred. (Cross-Complaint ¶ 35–
8 36.) As to the profits diverted to Miraval Studios, Tenute alleges that it only learned the extent of
9 Pitt’s malfeasance through documents produced in this litigation. (Id. ¶¶ 67–68.) Contrary to
10 Cross-Defendants’ argument, (Demurrer at 21), the relevant financial statements were not
11 published until after Pitt’s misappropriation. (See Tuffaha Decl. ¶ 6 & Ex. 4 at 33.) Similarly,
12 Stoli “praised the investments and Pitt’s vision for Miraval Studios” (Demurrer at 20) only before
13 Tenute learned that Pitt had diverted funds improperly to the side venture. (Cross-Complaint
16 misuse of funds undercuts the “conceal[ment] . . . from the owner” element of § 496(a).
17 (Demurrer at 21.) This argument fails because Tenute alleges at length that the misuse was
18 concealed from itself, the owner, not from Chateau Miraval. (Cross-Complaint ¶¶ 35, 36, 67–71.)
19 In Siry, the California Supreme Court held that the diverted partnership funds were concealed
20 from the limited partner, not the partnership. Siry Inv., 13 Cal. 5th at 340, 361 (allowing plaintiff
21 to recover where defendants “diverted partnership funds[] belonging to plaintiff”). In Siry, the
22 general partner itself orchestrated the theft, id. at 340, but the California Supreme Court
23 nevertheless allowed the claim because the diverted funds had been concealed from the limited
24 partner plaintiff, id. at 361. Cross-Defendants argue that Tenute has not pointed to any contractual
25 provision requiring Chateau Miraval to pay out dividends. (Demurrer at 21.) But the Supreme
26 Court did not require that a participant in a business venture plead a contractual entitlement to the
27 stolen property, only, for example, the “fraudulent diversion of a partnership’s cash distributions”
28 or that the “net effect of [defendants’] actions” results in “underpay[ing] plaintiff its cash
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 distributions.” Siry Inv., 13 Cal. 5th at 339–40. In any case, the French Commercial Code
2 provides that each year, the general meeting determines the portion of distributable profits to pay
3 out as dividends. (Tuffaha Decl. Ex. 3, Article L232-12.) And if that were not enough, Tenute
4 pleads that its loans to Chateau Miraval have matured. (Cross-Complaint ¶ 18.) These allegations
5 provide a more than adequate basis for Tenute’s entitlement to dividends and loan repayments.
6 Finally, Cross-Defendants argue that Siry’s holding should only be applied in rare
7 circumstances, and in support of this flawed contention, point to post-Siry Section 496 cases
8 dismissed at the pleading stage. (Demurrer at 21.) These cases are distinguishable because none
9 deals with asset diversion among participants in a business venture, which is the factual scenario
10 that triggers Siry’s applicability. Siry Inv., 13 Cal. 5th at 361 (“The unambiguous relevant
11 language covers fraudulent diversion of partnership funds.”). Siry was not a one-off, as Cross-
12 Defendants contend. See Pratt, 2023 WL 4564551, at *9 (“District courts have applied Siry’s
15 Cross-Defendants erroneously argue that “Tenute fails to plead that the alleged
17 22.)
18 First, causation is generally not decided at the pleading stage. State Dep’t of State
19 Hosps. v. Superior Ct., 61 Cal. 4th 339, 353 (2015) (“Ordinarily, proximate cause is a question of
20 fact which cannot be decided as a matter of law from the allegations of a complaint”).
21 Second, Cross-Defendants argue that “Tenute does not allege that the entity it
22 owns, Nouvel, is any less valuable because of the alleged misconduct” and that Tenute “admits
23 that the ‘enormously profitable’ business Nouvel owns through Quimicum—Château Miraval—
24 has grown in value under Pitt’s oversight.” (Demurrer at 22.) This argument misstates Tenute’s
25 allegations, which are based not on Nouvel’s value, but on Cross-Defendants’ diversion of funds
26 that should have been used to pay dividends and make loan repayments to Tenute to a business in
27 which Tenute holds a lesser interest. (Cross-Complaint ¶ 71 (alleging that “funds that should have
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
1 been distributed to Tenute or used to repay Tenute’s loans have instead been diverted to a business
2 entity in which Pitt and Mondo Bongo hold a significantly greater interest than Tenute.”).)
5 shareholder loans are “potential”, “hypothetical”, and “speculative”, rather than “existing or
6 certain”. (Demurrer at 22.) This Court has already rejected that argument. (See Tuffaha Decl. Ex.
7 6, March 18, 2024 Ruling of Judge L. Martin on Cross-Defendants’ William B. Pitt and Mondo
8 Bongo’s Demurrer to Nouvel’s FACC at 7–9 (“Nouvel reasonably expected the millions of dollars
9 it loaned to Chateau Miraval through Quimicum to be repaid after Chateau Miraval’s wine
10 business became profitable. Instead, Pitt and his coconspirators have diverted the wine business’
11 profits to their own purposes. . . . Nouvel has sufficiently alleged each of these elements. . . . At
13 Regardless, Tenute pleads that Pitt and Jolie contributed to Chateau Miraval
14 “exclusively for the purpose of supporting Chateau Miraval to become a profitable business” and
15 expected to receive the profits “once Chateau Miraval became profitable”. (Cross-Complaint ¶ 4.)
16 Cross-Defendants’ argument that it would be speculative to presume Chateau Miraval would have
17 paid dividends instead of reinvesting (Demurrer at 22), asks the Court impermissibly to adopt facts
18 in conflict with the Cross-Complaint. Cross-Defendants also argue that Tenute does not allege
19 that “the loan on which it primarily relies on for its damages claim [] would not be repaid if
20 Tenute were to request as much”. (Id.) That is incorrect. Tenute alleges its loans matured on
21 December 31, 2023. (Cross-Complaint ¶ 18.) Tenute should have been repaid then.
22 CONCLUSION
23 Cross-Defendants’ demurrer should be overruled for the reasons set forth above. In the
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER
Dated: December 16, 2024
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Respectfully submitted,
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By: /s/ Prashanth Chennakesavan
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TENUTE DEL MONDO, B.V.’S OPPOSITION TO CROSS-DEFENDANTS’ DEMURRER