SUPERIOR COURT, STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
Department 8, Honorable Maureen A. Folan, Presiding
Lorna Delacruz, Courtroom Clerk
Keith Rowan, Court Reporter
191 North First Street, San Jose, CA 95113
Telephone: 408.882.2180
To contest the ruling, call (408) 808-6856 before 4:00 P.M.
LAW AND MOTION TENTATIVE RULINGS
DATE: MARCH 1, 2016 TIME: 9 A.M.
THE COURT WILL PREPARE THE ORDER UNLESS
IT INSTRUCTS THE PARTIES OTHERWISE
TROUBLESHOOTING TENTATIVE RULINGS
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LINE #
CASE #
CASE TITLE
RULING
LINE 1 20151CV279796 X. Tran, et al vs.
The matter is off calendar as a FAC was
LINE 2
LINE 3
Vietnam Town
filed. Even if it did not go off calendar, the
Condominium Owners Court would not have considered defendant’s
Association
demurrer. Defendant failed to comply with
the mandatory requirements of CCP 430.41.
20121CV232891 K. Borgman, et al vs. Click Control Line 2 for Tentative Ruling
Insphere Insurance
Solutions, Inc., et al
Click Control Line 3 for Tentative Ruling
20131CV256569 S. Sang, et al vs.
County of Santa Clara
SUPERIOR COURT, STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
Department 8, Honorable Maureen A. Folan, Presiding
Lorna Delacruz, Courtroom Clerk
Keith Rowan, Court Reporter
191 North First Street, San Jose, CA 95113
Telephone: 408.882.2180
To contest the ruling, call (408) 808-6856 before 4:00 P.M.
LINE 4
LAW AND MOTION TENTATIVE RULINGS
The Motion to Compel Discovery Responses
20141CV264279 L. Hoffart, et al vs.
U.S. Bank National
Association, et al
LINE 5
16CV290382
A. Guillen vs.
Wholesale Motor
Group, et al
by Defendants “Chase” is UNOPPOSED and
GRANTED. The Requests for Admissions
Served on Plaintiffs Shall Be Deemed
Admitted. Plaintiffs are ordered to provide
code compliant responses, without
objections, to Chase’s Form Interrogatories,
Special Interrogatories and Document
Requests, all set one, within 10 days from the
date of this order. Plaintiffs are ordered to
produce documents responsive to the subject
document requests within 10 days of the date
of this order. Monetary sanctions are denied
because moving parties’ notice of motion did
not name all parties and attorneys against
whom sanctions were sought or even specify
that monetary sanctions were sought. CCP
2023.040.
Petitioner must submit proof of service
establishing the subject petition to compel
was timely served. Upon doing so, as there is
no opposition, the Court will grant the
petition. Plaintiff has chosen JAMS and
there is no evidence Defendant has objected
to this selection. The parties shall submit this
matter to JAMS within 20 days of the date of
this order. Attorney’s fees are denied
under Frog Creek Partners v Vance
Brown Inc. (2012) 206 Cal App 4th 515.
If plaintiff is the “prevailing party” in this
case, she can seek attorney’s fees after
such a determination.
SUPERIOR COURT, STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
Department 8, Honorable Maureen A. Folan, Presiding
Lorna Delacruz, Courtroom Clerk
Keith Rowan, Court Reporter
191 North First Street, San Jose, CA 95113
Telephone: 408.882.2180
To contest the ruling, call (408) 808-6856 before 4:00 P.M.
LINE 6
LAW AND MOTION TENTATIVE RULINGS
M. Murillo vs.
Petitioner must submit proof of service
16CV290403
Wholesale Motor
Group, et al
establishing the subject petition to compel
was timely served. Upon doing so, as there is
no opposition, the Court will grant the
petition. Plaintiff has chosen JAMS and
there is no evidence Defendant has objected
to this selection. The parties shall submit this
matter to JAMS within 20 days of the date of
this order. Attorney’s fees are denied
under Frog Creek Partners v Vance
Brown Inc. (2012) 206 Cal App 4th 515.
If plaintiff is the “prevailing party” in this
case,she can seek attorney’s fees after
such a determination.
LINE 7
20141CV261772 D. Nagao vs. Soleeva Plaintiff’s Motion to Vacate Dismissal
Solar, Inc.
LINE 8
20141CV268077 Keech Properties,
LLC, et al vs. T. Hill
Against Defendant and Enter Judgment for
Plaintiff and Against Defendant is
UNOPPOSED and GRANTED. The Court
will sign the order and judgment submitted.
The Motion to Withdraw of Counsel for
Todd Hill and Hill Development Company
LLC is UNOPPOSED and GRANTED, good
cause appearing. Counsel is instructed to
submit a proposed order as the Court did not
see one in the file. The order shall be
effective upon proof that it was served on
Hill and Hill Development Company LLC.
The order shall provide contact information
for those litigants and counsel must follow up
with the clerk that future notice will be sent
to those litigants directly.
SUPERIOR COURT, STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
Department 8, Honorable Maureen A. Folan, Presiding
Lorna Delacruz, Courtroom Clerk
Keith Rowan, Court Reporter
191 North First Street, San Jose, CA 95113
Telephone: 408.882.2180
To contest the ruling, call (408) 808-6856 before 4:00 P.M.
LINE 9
LAW AND MOTION TENTATIVE RULINGS
20151CV275519 E. Harris vs. B. Mauy, Defendant’s Motion to Dismiss is
et al
GRANTED. This case was ordered to
binding arbitration on June 16, 2015.
Plaintiff failed to pay the $150 filing fee
required by the Office of Independent
Administrator. Plaintiff was informed he
needed to pay this fee by letters dated
6/24/15, 7/22/15 and 8/17/15. Plaintiff was
warned that his claim would be deemed
abandoned if he did not pay the filing fee by
9/8/15. By letter dated 9/11/15, plaintiff was
notified his demand for arbitration was
deemed abandoned. As the proper forum
was binding arbitration, the Court also deems
this matter abandoned pursuant to CCP 581
(d).
LINE 10 20151CV282869 D. Gur. Vs. Mellanox Plaintiff filed a reply which sought to further
Technologies, Inc.
revise the First Amended Complaint he asked
to file. Defendant did not have an
opportunity to respond to these proposed
revisions. The Court continues the hearing
on this matter to March 22 so the parties can
meet and confer on the proposed revision and
defendant can file a response to plaintiff’s
reply 5 court days before the hearing. The
parties are reminded that leave to amend is
generally liberally granted and the Court
prefers to address attacks on the pleadings at
the demurrer stage after the parties have
complied with the new law CCP 430.41.
LINE 11 20151CV287445 Tortuga Pacific, Inc.
vs. Uniquify, Inc
LINE 12 20081CV118783 LVNV Funding LLC
vs. A. Sebastian
OFF CALENDAR – MOTION ADVANCED
TO 1-28-16
Ms. Sebastian must appear and bring with her
tax returns from 2013 and 2014, paystubs
from both her and her husband for the last
three months, all banking and savings
account statements from last three months
and evidence of all expenses listed on claim
of exemption.
SUPERIOR COURT, STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
Department 8, Honorable Maureen A. Folan, Presiding
Lorna Delacruz, Courtroom Clerk
Keith Rowan, Court Reporter
191 North First Street, San Jose, CA 95113
Telephone: 408.882.2180
To contest the ruling, call (408) 808-6856 before 4:00 P.M.
LAW AND MOTION TENTATIVE RULINGS
LINE 13 20141CV273869 Aura Hardwood
Lumber, Inc. vs. T.
Cisneros, et al
LINE 14
LINE 15
LINE 16
LINE 17
LINE 18
LINE 19
LINE 20
LINE 21
LINE 22
LINE 23
LINE 24
LINE 25
LINE 26
LINE 27
LINE 28
LINE 29
LINE 30
Order of Examination. Continued by
agreement of litigants to March 1, 2016.
Calendar line 1
- oo0oo -
Calendar Line 2
Case Name:
Case No.:
Kent Borgman v. Insphere Insurance Solutions, Inc., et al.
2012-1-CV-232891
Currently before the Court is defendants Insphere Insurance Solutions, Inc.
(“Insphere”), Cornerstone America (“Cornerstone”), UGA-Association Field Service
(“UGA”), the MEGA Life and Health Insurance Company (“MEGA”) and Healthmarkets
Insurance Company’s (“Healthmarkets IC”) (collectively, “Defendants”) motion for summary
judgment or, in the alternative, summary adjudication of the tenth and eleventh causes of
action in the second amended complaint (“SAC”) of plaintiff Kent Borgman (“Borgman”) and
Borgman’s request for punitive damages.
I. Factual and Procedural Background
On September 9, 2013, Borgman filed the operative SAC against Defendants and
defendant Jo Dee Taylor (“Taylor”), asserting twelve causes of action for: (1) violation of
Labor Code section 204; (2) violation of Labor Code section 226; (3) violation of Labor Code
section 226.7; (4) violation of Labor Code section 432.5; (5) violation of Labor Code section
510; (6) violation of Labor Code section 2802; (7) violation of Business and Professions Code
section 17200; (8) fraud in the inducement; (9) negligent misrepresentation; (10) conversion;
(11) accounting; and (12) wrongful termination in violation of public policy.
In relevant part, Borgman alleges the following in the SAC: Insphere is in the business
of selling insurance policies and employs sales agents, sales leaders, and division managers.
(SAC, ¶ 13.) Sales agents are responsible for selling Insphere-selected insurance policies.
(SAC, ¶ 13.) Sales leaders train, supervise, and motivate sales agents as well as sell policies.
(SAC, ¶ 13.) Division managers allocate all of their time to supervising, training and
motivating the sales agents and sales leaders in their divisional office. (SAC, ¶ 14.)
From 2003 until 2009, Borgman was a divisional manager for Insphere supervising
sales from Reno, Nevada and Meriden, Idaho. (SAC, ¶ 33.) Throughout his tenure as a
divisional manager, Taylor, Insphere’s area manager, made daily oral statements to Borgman
that he was an independent contractor. (SAC, ¶ 35.) As a result, Borgman spent approximately
$1.6 million building his business. (SAC, ¶ 36.) On October 16, 2009, Insphere informed
Borgman that he did not, in fact, own his business. (SAC, ¶ 37.) As a result, Insphere took “all
of [his] California sales agents, sales leaders and California clients away….” (SAC, ¶ 37.) In
addition, Insphere asserted ownership over his clients, client files, insurance policies in force,
and all sales agents and leaders. (SAC, ¶ 37.) Insphere never offered to repay or reimburse
Borgman for the business expenses he incurred or the value of the business he built over six
years. (SAC, ¶ 38.) As such, Defendants converted all of Borgman’s business property
including but not limited to his “office, client files, client contracts, bank accounts,
commissions generated by client’s payments, advertising, [and] good will from the business.”
(SAC, ¶ 97.)
On October 15, 2013, Defendants filed a demurrer to the first through ninth and twelfth
causes of action in the SAC. The Court sustained the demurrer with 10 days’ leave to amend
on November 21, 2013. Borgman did not amend the SAC. As such, the tenth cause of action
for conversion and the eleventh cause of action for an accounting are the only remaining causes
of action in the SAC.
On December 8, 2015, Defendants filed the instant motion for summary judgment or, in
the alternative, summary adjudication. Borgman filed his opposition on February 16, 2016. On
February 25, 2016, Defendants filed their reply brief.
II. Summary of Evidence Submitted
A. Defendants’ Evidence
In support of their motion, Defendants present the following relevant evidence: From
1992 until 2009, Borgman worked as an independent insurance sales agent for UGA, a division
of MEGA, under several independent contractor agreements. (Defendants’ Separate Statement
of Undisputed Material Facts (“UMF”) Nos. 1, 4.) From 2002 until 2008, Borgman’s main
office was located in Boise, Idaho. (UMF No. 9.) In 2008 or 2009, MEGA decided not to
continue selling its own insurance products. (UMF No. 12.) In 2009, Insphere was incorporated
and began its business operations in 2010. (UMF No. 18.) Unlike MEGA, Insphere does not
sell its own insurance policies. (UMF No. 20.) Instead, it sells policies on behalf of other
carriers. (UMF No. 20.) Insphere made offers to some former MEGA insurance agents,
including Borgman, to sign independent agent agreements with Insphere. (UMF No. 25.)
On January 1, 2010, Borgman accepted Insphere’s offer of employment and became an
agency manager in Meridian, Idaho. (UMF No. 26.) At that time, Insphere assumed the lease
for the office space previously leased directly with Borgman in Idaho. (UMF No. 29.) In
connection with that assumption, the parties negotiated an agreement whereby Insphere would
purchase some of Borgman’s office equipment and furnishings for $18,105. (UMF Nos. 3031.)
B. Borgman’s Evidence
In opposition to the instant motion, Borgman submits the following relevant evidence:
Borgman maintained several offices in California, Oregon, Washington, Nevada, and
Montana. (Borgman’s UMF in Opposition, No. 9.) In 2009, Insphere threatened that it would
take away his access to client leads, client information, and address books unless he became an
employee. (Borgman’s UMF in Opposition, No. 25.) At that time, Insphere took over all of his
offices in Idaho, Nevada, Washington and Montana and he was never compensated for the
value of the equipment in those offices. (Borgman Decl., ¶ 22.) Insphere also took the goodwill
of his business. (Borgman Decl., ¶¶ 16-17; Taylor Decl., ¶¶ 11, 14.)
According to Borgman’s expert, Babken Basmadzhyan, goodwill represents the value
of a business in excess of the book value of its assets. (Basmadzhyan Decl., ¶ 8.) He states that
goodwill constitutes the value of brand recognition and customer relationships that ensure that
customers patronize the business in the future. (Basmadzhyan Decl., ¶¶ 8-9.) He opines that
“[t]aking away the ‘goodwill’ of a business is the same as taking away an asset from that
business, which is a major financial loss to the business and its owners.” (Basmadzhyan Decl.,
¶ 11.)
III. Request for Judicial Notice
In support of their motion, Defendants ask the Court to take judicial notice of the
Court’s November 21, 2013 order re: demurrer to the SAC. The request for judicial notice is
GRANTED. (See Evid. Code, § 452, subd. (d) [stating that a court may take judicial notice of
court records].)
IV. Evidentiary Objections
In connection with their reply, Defendants asserts 60 evidentiary objections to the
evidence submitted in opposition to the motion. Objection Nos. 1-19 and 21-60 are not
material to the disposition of the motion, and therefore, no ruling is required. (See Code Civ.
Proc., § 437c, subd. (q) [stating that “[i]n granting or denying a motion for summary judgment
or summary adjudication the court need rule only on those objections to evidence it deems
material to its disposition of the motion”].) Objection No. 20 is OVERRULED.
V. Discussion
Defendants move for summary judgment or, in the alternative, summary adjudication of
the tenth and eleventh causes of action in the FAC and the request for punitive damages on the
ground that the action has no merit. (See Code Civ. Proc. 437c, subds. (a)(1), (f)(1).)
A. Tenth Cause of Action for Conversion
Defendants contend that the tenth cause of action for conversion fails because a cause
of action for conversion does not lie for intangible property such as the goodwill of Borgman’s
business and they did not convert any of Borgman’s tangible or intangible business property. In
opposition, Borgman argues that a cause of action does lie for conversion of his goodwill and,
in any event, Defendants did not reimburse him for the tangible business property they
acquired from his offices in Nevada, Washington, and Montana.
1. Conversion of Goodwill
Defendants first assert that Borgman cannot maintain a cause of action for conversion
of the goodwill of his business as a matter of law because goodwill is the type of highly
abstract property interest that does not lend itself to an action for conversion.
In Payne v. Elliot (1880) 54 Cal. 339, the California Supreme Court first considered
whether a cause of action for conversion could apply to the conversion of intangible property
such as shares of the stock of a company. The Court acknowledged that “[a]t common law,
trover was the proper remedy for a conversion of personal property; but it only lay for tangible
property, capable of being identified and taken into actual possession.” (Id. at p. 340.) As such,
shares of stock could not be converted under the common law. (Id. at p. 341.) The Court
rejected this rule, stating that “the fiction on which the action of trover was founded, namely,
that a defendant had found the property of another, which was lost, has become, in the progress
of law, an unmeaning thing, which has been by most courts discarded; so that the action no
longer exists as it did at common law, but has been developed into a remedy for the conversion
of every species of personal property.” (Ibid.) Moreover, the Court rejected the argument that a
cause of action would lie for the conversion of a tangible item such as a certificate of stock, but
not the underlying share of stock. The Court explained that: “It is, therefore, the ‘shares of
stock’ which constitute the property which belongs to the shareholder. Otherwise, the property
would be in the certificate; but the certificate is only evidence of the property; and it is not the
only evidence, for a transfer on the books of the corporation, without the issuance of a
certificate, vests title in the shareholder: the certificate is, therefore, but additional evidence of
title, and if trover is maintainable for the certificate, there is no valid reason why it is not also
maintainable for the thing itself which the certificate represents.” (Payne, supra, 54 Cal. at p.
342.)
Subsequent courts of appeal have interpreted Payne narrowly. In particular, in
Olschewski v. Hudson (1927) 87 Cal.App. 282, the Court of Appeal determined that a plaintiff
could not maintain a cause of action for conversion for the alleged misappropriation of an
exclusive laundry route. The court explained that “[c]learly the proceeding in conversion was
not intended to reach so intangible, uncertain, and indefinite a property right.…The very
definition of [conversion] presupposes the existence of tangible goods or chattel in a form
capable of being changed or transformed, turned over, delivered, or appropriated for the use
and benefit of the wrongdoer.” (Id. at p. 286.) Though the Olschewski court acknowledged that
Payne permitted the conversion of every species of personal property, it distinguished that case
on the ground that “[s]hares of stock are represented by certificates which are evidence of a
definite interest in the assets of a company” and, therefore, “[s]hares of stock are tangible, and
may be identified.” (Id. at p. 288.) The court found that, unlike shares of stock, goodwill of a
business or trade secrets are too indefinite, intangible and uncertain to support a cause of action
for conversion. (Ibid.)
For the next 80 years, courts “refused to recognize as conversion the unauthorized
taking of intangible interests that are not merged with, or reflected in, something tangible.”
(Thrifty-Tel, Inc. v. Bezenek (1996) 46 Cal.App.4th 1559, 1565.) However, in Fremont Indem.
Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, the Court of Appeal declined to
follow Olschewski and its progeny on the ground that they ignored the holding of Payne.
In Fremont Indem. Co., the plaintiff alleged that the defendants misappropriated the
plaintiff’s net operating losses in violation of a tax allocation agreement. (Id. at p. 105.) After
the trial court sustained the defendants’ demurrer to the plaintiff’s complaint, including its
cause of action for conversion, the plaintiff appealed. On appeal, the court declined to follow
Olschewski on the ground that the Supreme Court in Payne, supra, categorically rejected the
common law rule that only a tangible property interest may be unlawfully converted. Instead,
the court focused on whether the owner’s rights were sufficiently definite and exclusive to
permit a cause of action for conversion. It found that a net operating loss met this standard
because it is “a definite amount … that can be recorded in tax and accounting methods.” (Id. at
p. 125.) Accordingly, the Court of Appeal concluded that the misappropriation of intangible
net operating losses supported a cause of action for conversion. (Id. at p. 126.)
The logic of Fremont Indem. Co. applies with equal force here because goodwill is a
definite and certain form of property. In this regard, the goodwill of a business has long been
considered a definite, transferable property interest by statute and subject to reasonably certain
methods of valuation. (See Bus. & Prof. Code, §§ 14100 [stating that “the ‘good will’ of a
business is the expectation of continued public patronage”]; 14102 [stating that “the good will
of a business is property and is transferable”]; Civ. Code, § 655 [stating that “[t]here may be
ownership of … the good will of a business…”]; see also WMX Technologies, Inc. v. Miller
(9th Cir. 1999) 197 F.3d 367, 374 [stating that “the goodwill of a business is its value as a
going concern and is made up of many factors, such as location, patronage of customers,
relations with suppliers, experience of employees, effectiveness of management, and many
other factors”]; People ex rel. Dept. of Transportation v. Muller (1984) 36 Cal.3d 263, 271
[stating that “[c]ourts have long accepted that goodwill may be measured by the capitalized
value of the net income or profits of a business or by some similar method of calculating the
present value of anticipated profits”].) Accordingly, since goodwill is a definite and certain
form of property, Defendants fail to demonstrate that a cause of action for conversion of
goodwill cannot be brought as a matter of law.
Next, Defendants contend that they did not, in fact, wrongfully exercise dominion over
Borgman’s goodwill. (See Avidor v. Sutter’s Place, Inc. (2013) 212 Cal.App.4th 1439, 1452
[stating that “[p]roof of conversion requires a showing of ownership or right to possession of
the property at the time of the conversion, the defendant’s conversion by a wrongful act or
disposition of property rights, and resulting damages”]; Heaps v. Heaps (2004) 124
Cal.App.4th 286, 292 [stating that “[c]onversion exists if there is substantial interference or an
exertion of wrongful dominion over the personal property of another in denial of or
inconsistent with his rights therein”].) In this regard, Defendants submit evidence indicating
that the parties agreed to change their contractual relationship in 2010. (UMF No. 26.) During
negotiations over the changes, Jack Heller, Defendants’ vice president, told Borgman that he
could either represent Insphere as an employee or Defendants would no longer do business
with him. (UMF No. 26.) Rather than end their economic relationship, Borgman agreed to
become Defendants’ employee. (UMF No. 27.) This evidence is sufficient to demonstrate that
to the extent Defendants used or appropriated Borgman’s goodwill, they did so within the
confines of his employment. Since Borgman agreed to such employment, Defendants make a
prima facie case that they did not substantially interfere or exercise wrongful dominion over
the goodwill of his business. (See Farrington v. A. Teichert & Son (1943) 59 Cal.App.2d 468,
474 [stating that there can be no conversion where an owner either expressly or impliedly
assents to or ratifies the taking, use or disposition of his property].)
In opposition, Borgman first argues that Defendants wrongfully took his goodwill by
refusing to purchase his business. This argument is not well-taken because Borgman fails to
introduce any evidence establishing that Defendants were obligated to purchase his business.
Next, Borgman claims that Defendants wrongfully took his goodwill by inducing him to enter
into the employment agreement. In this regard, he argues that Defendants refused to continue
their contractual relationship with him unless he became an employee. This argument is not
persuasive because Borgman does not submit any evidence indicating that Defendants’ actions
were wrongful. In this respect, he does dispute that his prior contractual relationship with
Defendants was terminable at will by either party at any time. (See Duke Decl., Exs. 1, 3.)
Moreover, while Borgman asserts that he was coerced into becoming an employee, he does not
submit evidence establishing this fact such as evidence that he had no reasonable alternative to
agreeing to the employment contract or financial exigencies compelled him to continue
economic relationship with Defendants. (See CrossTalk Productions, Inc. v. Jacobson (1998)
65 Cal.App.4th 631, 644 [stating that a party may rescind a contract based on duress only
“when one party has done a wrongful act which is sufficiently coercive to cause a reasonably
prudent person, faced with no reasonable alternative, to agree to an unfavorable contract”];
Perez v. Uline, Inc. (2007) 157 Cal.App.4th 953, 959 [stating that a court will rescind a
contract based on economic duress only as a last resort]; Lanigan v. City of Los Angeles (2011)
199 Cal.App.4th 1020, 1034 [providing that the court will not rescind a contract unless there is
a “compelling necessity to submit to the coercive demands”].)Therefore, Borgman does not
establish that Defendants wrongfully appropriated his goodwill by inducing him to enter into
an employment agreement.
Accordingly, Borgman fails to demonstrate that Defendants wrongfully exercised
dominion over his goodwill.
2. Tangible Business Property
Defendants contend that they did not convert any of Borgman’s tangible property. In
this respect, they present evidence that: (1) they paid for some of Borgman’s office furniture
and equipment; (2) Borgman voluntarily assigned his lease to them; (3) Borgman did not own
any client files or contracts; (4) they did not take over any of his business bank accounts; and
(4) Borgman does not know if they ever failed to pay him any commissions. (UMF Nos. 29-32,
36, 41, 43-44.)
In opposition, Borgman argues that Defendants converted his tangible personal
property by appropriating office equipment from his offices in Idaho, Nevada, Washington,
and Montana without compensation. (Borgman Decl., ¶ 22.) In connection with their reply,
Defendants object to the admission of this evidence on the ground that it is inconsistent with
his deposition testimony. (Objection No. 20.)
When discovery produces a clear and unequivocal admission or concession on the part
of the party opposing summary judgment, a court may disregard contradictory declarations or
affidavits. (D’Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 21-22.) “Properly
applied, the D’Amico rule allows the trial court to disregard a party’s declaration or affidavit
only where it and the party’s deposition testimony or discovery responses are contradictory and
mutually exclusive or where the declaration contradicts unequivocal admissions in discovery.”
(Minish v. Hanuman Fellowship (2013) 214 Cal.App.4th 437, 459-460, internal citations
omitted.)
At his deposition, Borgman stated the following, in relevant part: “Q: What –what was
the equipment that Insphere sold to you – that you sold to Insphere? What kind of equipment
was – when they took over the business? [¶] A: Office furnishings, computers, you know, all of
the stuff you’d find in an office. You know – [¶] Q: Okay. [¶] A: -- conference tables, cubicles.
I don’t know, coffeemakers, copiers, printers. [¶] Q: And did they pay you for that? [¶] A:
Yeah.” (Frederick Decl., Ex. 1, Borgman Depo., p. 140:2-12.) Defendants contend that this
testimony contradicts Borgman’s statement in his declaration that Insphere never compensated
him for taking office equipment from his other offices. This argument is not well-taken. Here,
it is unclear whether Borgman reasonably understood these questions to concern all equipment
Insphere acquired from him or only the equipment he actually sold to Insphere. As such,
Defendants fail to demonstrate that Borgman’s declaration and his deposition testimony are
mutually exclusive or contradictory. (See People ex rel. Dept. of Transportation v. Ad Way
Signs, Inc. (1993) 14 Cal.App.4th 187, 200 [indicating that a trial court should not grant
summary judgment based on an improper compound request]; Minish, supra, 214 Cal.App.4th
at p. 460 [stating that summary judgment should not be based on tacit admissions or
fragmentary and equivocal concessions].)
In light of the foregoing, Borgman establishes a triable issue of material fact as to
whether Defendants converted his tangible business property.
3. Conclusion
Since Borgman establishes a triable issue of material fact as to whether Defendants
converted tangible personal property in his Idaho, Nevada, and Montana offices, Defendants
fail to demonstrate that the tenth cause of action has no merit.
B. Eleventh Cause of Action for an Accounting
Defendants first claim that Borgman cannot maintain the eleventh cause of action for an
accounting because it is derivative of the tenth cause of action for conversion, which has no
merit. This argument is not well-taken because Defendants fail to demonstrate that the tenth
cause of action for conversion has no merit.
Next, Defendants argue that the action for an accounting fails because Borgman admits
that he already has an accounting of his business expenses. This argument is not persuasive
because the eleventh cause of action does not seek an accounting of Borgman’s business
expenses. Instead, the SAC alleges that Defendants failed to pay him all of the commissions he
earned from 1997 until 2011 and seeks an accounting to determine the exact amount of
commissions owed. (SAC, ¶¶ 101-104; Nieto v. Blue Shield of California Life & Health Ins.
Co. (2010) 181 Cal.App.4th 60, 74 [stating that “[i]t is well established that the pleadings
determine the scope of relevant issues on a summary judgment motion].)
In light of the foregoing, Defendants fail to demonstrate that this cause of action has no
merit.
C. Punitive Damages
Defendants contend that Borgman’s request for punitive damages fails because he
cannot demonstrate that they engaged in despicable conduct. (See College Hosp., Inc. v. Sup.
Ct. (1994) 8 Cal.4th 704, 725 [stating that to recover punitive damages based on defendant’s
malicious or oppressive conduct, the plaintiff must demonstrate that the defendant engaged in
despicable conduct].) Defendants, however, do not identify any particular evidence indicating
that Borgman does not possess and cannot reasonably obtain evidence demonstrating that
Defendants engaged in despicable conduct. In their separate statement of undisputed material
facts, Defendants merely provide that they incorporate all of the previously mentioned
undisputed material facts and all evidence cited in support thereof. (Defendants’ UMF No. 55.)
Similarly, Defendants’ memorandum of points and authorities does not mention any specific
evidence in support of this assertion. (Defendants Mem. Ps & As., p. 14:3-10.) A trial court has
no “obligation to comb the record and the law for factual or legal support that a party has failed
to identify or provide.” (Quantum Cooking Concepts, Inc. v. LV Associates, Inc. (2011) 197
Cal.App.4th 927, 934.) Therefore, Defendants fail to demonstrate that the request for punitive
damages has no merit.
D. Conclusion
In light of the foregoing, Defendants’ motion for summary judgment or, in the
alternative, summary adjudication is DENIED.
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Case Name: Kayda Jade Seth, et al. v. County of Santa Clara
Case No.:
2013-1-CV-256569
Motion for Summary Judgment, or in the Alternative, Summary Adjudication to the
Complaint by Defendant County of Santa Clara
Factual and Procedural Background
This is a medical negligence case. Plaintiffs Souet Sang (“Sang”) and Johnny Seth
(“Seth”) are the parents of Kayda Jade Seth (“Kayda”), a minor (collectively, “Plaintiffs”).1
Defendant Santa Clara County (“County”) is a public entity. Kayda was born and delivered on
March 20, 2012 at Santa Clara Valley Medical Center. During her delivery and birth, Kayda
sustained a right brachial nerve injury. Plaintiffs allege that County physicians and health care
providers were negligent and responsible for injuries and damages suffered by Plaintiffs.
On November 22, 2013, Plaintiffs filed a complaint against the County setting forth
claims for medical negligence and negligent infliction of emotional distress.
On December 11, 2015, County filed the motion presently before the Court, a motion
for summary judgment, or in the alternative, summary adjudication to the complaint. (Code
Civ. Proc., § 437c.) Plaintiffs filed written opposition. County filed reply papers. No trial
date has been set.
Motion for Summary Judgment, or in the Alternative, Summary Adjudication
Request for Judicial Notice
In support of the motion, County requests judicial notice of the complaint and answer
that were filed with the Court in this action. These documents constitute records of the
superior court which are subject to judicial notice under Evidence Code section 452,
subdivision (d). (See Stepan v. Garcia (1974) 43 Cal.App.3d 497, 500 [the court may take
judicial notice of its own file].)
Accordingly, the request for judicial notice is GRANTED.
Evidentiary Objections
In reply, the County submitted a series of evidentiary objections to Plaintiffs’ evidence.
“In granting or denying a motion for summary judgment or summary adjudication, the court
need rule only on those objections to evidence that it deems material to its disposition of the
motion. Objections to evidence that are not ruled on for purposes of the motion shall be
preserved for appellate review.” (Code Civ. Proc., § 437c, subd. (q).)
1
The Court refers to Plaintiffs by their first names for purposes of clarity. No disrespect is intended. (See
Rubenstein v. Rubenstein (2000) 81 Cal.App.4th 1131, 1136, fn. 1.)
With subsection (q) in mind, the Court SUSTAINS the following objections: (1)
Objection Nos. 1-5 and 8 to the Declaration of Carl McMahan; (2) Objection No. 11 to Sang’s
Declaration; and (3) Objection No. 13 to Seth’s Declaration.
Legal Standard
“Summary judgment is properly granted when no triable issue of material fact exists
and the moving party is entitled to judgment as a matter of law. A defendant moving for
summary judgment bears the initial burden of showing that a cause of action has no merit by
showing that one or more of its elements cannot be established or that there is a complete
defense. Once the defendant has met that burden, the burden shifts to the plaintiff ‘to show
that a triable issue of one or more material facts exists as to that cause of action or a defense
thereto.’ ‘There is a triable issue of material fact if, and only if, the evidence would allow a
reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in
accordance with the applicable standard of proof.’” (Madden v. Summit View, Inc. (2008) 165
Cal.App.4th 1267, 1272 [internal citations omitted].)
Similarly, “[a] party may seek summary adjudication on whether a cause of action,
affirmative defense, or punitive damages claim has merit or whether a defendant owed a duty
to a plaintiff. A motion for summary adjudication…shall proceed in all procedural respects as
a motion for summary judgment.” (California Bank & Trust v. Lawlor (2013) 222 Cal.App.4th
625, 630 [internal citations and quotation marks omitted].)
Motion Against Kayda
The complaint alleges a claim for medical negligence as to plaintiff Kayda. County
argues that the cause of action is barred by the statute of limitations as Kayda failed to file her
lawsuit within six months after the County rejected her claim.
“The [Government Claims] Act establishes a uniform claims procedure, making the
filing of a claim within a brief period of the injury a prerequisite to maintaining a suit for
damages.” (Renteria v. Juvenile Justice, Department of Corrections & Rehabilitation (2006)
135 Cal.App.4th 903, 908.) The Government Claims Act is comprised of “a comprehensive
format specifying the parameters of governmental liability, including…a detailed procedure for
the advance filing of a claim as a prerequisite to filing suit” and deadlines for “both the filing
of claims and the commencement of litigation.” (Schmidt v. Southern Cal. Rapid Transit Dist.
(1993) 14 Cal.App.4th 23, 28 [fn. omitted].) Compliance with the claims statutes is mandatory
and failure to file a claim is fatal to the cause of action. (City of San Jose v. Sup. Ct. (1974) 12
Cal.3d 447, 454.)
“Under the Act, no person may sue a public entity or public employee for ‘money or
damages’ unless a timely written claim has been presented to and denied by the public entity.
[Citations.] A claim pertaining to a cause of action for personal injury must be filed within six
months after the cause of action accrues. [Citations.] With certain exceptions, an action
against a public entity on a cause of action for which a claim must be presented must be
commenced ‘not later than six months’ after written notice rejecting the claim is delivered to
the claimant personally or deposited in the mail. [Citation.] If the public entity deposits written
notice of rejection in the mail, the six month limitations period within which to file suit applies
regardless of whether notice is actually received. [Citation.] The claimant is charged with
knowledge of the six-month period and is obligated to inquire as to the status of the claim if he
or she has not received a written rejection notice within a reasonable time after the County’s
time to act or reject the claim has passed. [Citation.]” (County of Los Angeles v. Sup. Ct.
(2005) 127 Cal.App.4th 1263, 1267-1268.)
In support, County argues that, on March 22, 2013, it received a claim on behalf of
Kayda for injuries and related damages sustained due to the mishandling of her birth. (See
County’s Separate Statement of Undisputed Facts at No. 10.) Along with Kayda’s claim, the
County also received a letter from Plaintiffs’ counsel that, to the extent that Kayda’s claim was
considered late, that the letter be considered as an application for leave to present a late claim.
(Id. at No. 11.) Subsequently, the County granted Kayda’s application for leave to present a
late claim but rejected her claim against the County. (Id. at No. 13; Declaration of David
Schoendaler at Exhibits O and P; see E.M. v. Los Angeles Unified School District (2011) 194
Cal.App.4th 736, 749 [“Because plaintiff was a minor, her application for leave to file a late
claim, filed less than one year after accrual of the cause of action, was timely.”].) Thereafter,
on April 10, 2013, the County mailed a Notice Granting Kayda’s Application for Leave to
Present a Late Claim and a Notice of Rejection of Kayda’s Claim to Plaintiffs’ counsel. (See
County’s Separate Statement of Undisputed Facts at Nos. 14-15; Declaration of David
Schoendaler at ¶ 4, Exhibits O and P; Declaration of Rachel Nunez at ¶¶ 2-4.) Specifically, the
Notice of Rejection of Kayda’s Claim contained the following written warning:
“[Y]ou have only six (6) months from the date this notice was…deposited in the mail to
file a court action on this claim. See Government Code section 945.6”
(See County’s Separate Statement of Undisputed Facts at No. 16; Declaration of David
Schoendaler at Exhibit P.)
Since the complaint was not filed until November 22, 2013, beyond the six month time
period, the County argues that Kayda’s medical negligence claim is untimely. (See County’s
Separate Statement of Undisputed Facts at No. 18; Request for Judicial Notice at Exhibit U.)
Having met its initial burden on summary judgment, the burden shifts to Plaintiffs to raise a
triable issue of material fact.
“A triable issue of material fact exists if, and only if, the evidence would allow a
reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in
accordance with the applicable standard of proof. Thus, a party cannot avoid summary
[adjudication] by asserting facts based on mere speculation and conjecture, but instead must
produce admissible evidence raising a triable issue of fact.” (California Bank & Trust v.
Lawlor (2013) 222 Cal.App.4th 625, 631 [internal citations and quotation marks omitted].)
In opposition, Plaintiffs argue that the six month period is not applicable to this case
because they did not receive any rejection notice from the County with respect to Kayda’s
claim. (See Plaintiffs’ Disputed Facts at Nos. 13, 14, 15, 16, and 17; Declaration of Carl A.
McMahan at ¶¶ 4, 5, 6, and 7.) In support, Plaintiffs rely on the principle that “[i]f the public
entity does not give written notice that the claim has been rejected, the plaintiff has until two
years from the date her cause of action accrued to sue the entity.” (Gov. Code, § 945.6, subd.
(a); S.M. v. Los Angeles Unified School District (2010) 184 Cal.App.4th 710, 717.) Plaintiffs
contend that Kayda’s claim did not accrue until they met with counsel in March 2013 where
they discovered that Kayda’s injuries were the result of the County’s negligence. (See Sang
Declaration at ¶ 5; Seth Declaration at ¶ 4.) Thus, Plaintiffs assert that they could timely file
their lawsuit within two years of March 2013. Having filed their complaint in November 2013,
Plaintiffs argue that their action is timely.
Here, Plaintiffs do not dispute that the County properly sent a rejection notice of
Kayda’s claim in the mail. Instead, Plaintiffs argue that they never received any such rejection
notice from the County. However, as stated above, the six month limitations period to file a
lawsuit applies regardless of whether notice is actually received. (See County of Los Angeles v.
Sup. Ct., supra, 127 Cal.App.4th at p. 1268; see also Dowell v. County of Contra Costa (1985)
173 Cal.App.3d 896, 901 [“The two-year period of limitations obtains only when the notice
was not served; the six-month rule applies if notice was served, even though not actually
received by the claimant.”].) For example, in Him v. City and County of San Francisco (2005)
133 Cal.App.4th 437, 446, the appellate court, on a motion for summary judgment, concluded
that plaintiff’s evidence of nonreceipt of the claim rejection notices is legally insufficient to
raise a triable issue of fact negating the six-month statute of limitations defense. In doing so,
the appellate court stated:
“The statute of limitations period is triggered from the date the notice is deposited in
the mail by the public entity, and not the date it is received by the claimant or counsel.
In fact, a claimant is required to comply with the six-month statute of limitations
associated with government tort claims upon proof that the notice of rejection was
served even if it was not actually received by the claimant. Thus, the Legislature has
placed upon the claimant the risk that a properly mailed notice of claim rejection is not
delivered due to an error by the postal authorities. And, the Legislature has provided a
corresponding opportunity for the claimant to protect itself from this risk. Following
presentation of a claim for personal injury or death, the public entity must act within 45
days. If the entity fails to accept or reject the claim within that period, the claim is
deemed to have been rejected. If the claim is rejected by the public entity expressly or
by operation of law, notice must be sent to the claimant. Thus, following a reasonable
time after the expiration of the 45 days, a claimant should be aware that the claim has
been denied and the statutory notice of that denial has not been provided. The claimant
then has the opportunity to inquire about the denial and determine, thereby, the
limitations period. The claimant should not be permitted to forgo that opportunity and,
then, rely on the fact no notice was delivered to extend the limitations period.”
(Id. at p. 445 [internal citations and quotation marks omitted].)
Considering these authorities and supporting evidence, the Court finds that Plaintiffs
have not raised any triable issue of material fact to defeat the statute of limitations defense with
respect to plaintiff Kayda.
Motion Against Sang
The complaint alleges a claim for negligent infliction of emotional distress with respect
to plaintiff Sang. County argues that the statute of limitations bars this action as Sang failed to
present her claim to the County within six months after her cause of action accrued.
“The accrual date for presenting a government tort claim is determined by the rules
applicable to determining when any ordinary cause of action accrues.” (S.M. v. Los Angeles
Unified School District, supra, 184 Cal.App.4th at p. 717.) Generally speaking, a cause of
action accrues at the time when the cause of action is complete with all of its elements.” (V.C.
v. Los Angeles Unified School Dist. (2006) 139 Cal.App.4th 499, 510.)
However, the accrual date may be postponed under the delayed discovery doctrine.
(S.M. v. Los Angeles Unified School District, supra, 184 Cal.App.4th at p. 717.) “Under this
doctrine, a cause of action does not accrue until the plaintiff discovers, or has reason to
discover, the cause of action. A plaintiff has reason to discover a cause of action when he or
she has reason to at least suspect a factual basis for its elements. Suspicion of one or more
elements, coupled with knowledge of any remaining elements, will generally trigger the
applicable limitations period. This refers to the generic elements of wrongdoing, causation,
and harm and does not require a hypertechnical approach. Instead, we look to whether the
plaintiffs have reason to at least suspect that a type of wrongdoing has injured them.” (Ibid.
[internal citations and quotation marks omitted].)
Here, the parties dispute the accrual of plaintiff Sang’s negligent infliction of emotional
distress cause of action. The County, citing Sang’s deposition testimony, argues that she was
suspicious of wrongdoing on the part of the physicians involved in Kayda’s delivery as early as
March 29, 2012. (See County’s Separate Statement of Undisputed Facts at No. 28.)
Alternatively, the County claims that Sang was aware of Kayda’s injury after speaking with
Dr. Tan in May 2012. (Id. at No. 30.) In opposition, plaintiff Sang provides contrary evidence
in her declaration where she states that she did not make discovery of the facts regarding the
County’s wrongdoing until she met with counsel in March 2013. (See Sang Declaration at ¶
5.) Specifically, on March 19, 2013, Plaintiffs’ counsel sent a letter to the County presenting
claims on behalf of the Plaintiffs. (See County’s Separate Statement of Undisputed Facts at
No. 33.) To the extent that Plaintiffs’ claims were deemed untimely, the letter would be
considered as an application for leave to present late claims. (Ibid.) On March 22, 2013, the
County received a claim for damages from Sang and Seth related to the mishandling of the
birth of their daughter. (See County’s Separate Statement of Undisputed Facts at Nos. 31 and
32.) Based on Plaintiffs’ evidence and, applying the discovery rule, a trier of fact may
conclude that Sang timely presented her claim to the County within the six month period under
Government Code section 911.2, subdivision (a).
However, even if Sang timely submitted her claim to the County, she was then required
to file her lawsuit against the County within six months to avoid the statute of limitations bar.
As stated above, the statute of limitations period is triggered from the date the notice is
deposited in the mail by the public entity. (See Him v. City and County of San Francisco,
supra, 133 Cal.App.4th at p. 445.) On April 10, 2013, the County mailed notice to Plaintiffs’
counsel indicating that it would not take any action with respect to plaintiff Sang’s claim. (See
County’s Separate Statement of Undisputed Facts at No. 35; Declaration of David Schoendaler
at ¶ 5, Exhibit Q; Declaration of Rachel Nunez at ¶¶ 2-4.) Again, Plaintiffs do not dispute that
the County served notice only that they never received any rejection notices from the County.
(See Plaintiffs’ Disputed Facts at No. 35; Sang Declaration at ¶ 7.) For the reasons stated
above, plaintiff’s Sang’s lack of actual notice does not raise a triable of issue of fact to defeat
the motion. (See Him v. City and County of San Francisco, supra, 133 Cal.App.4th at pp. 445446; County of Los Angeles v. Sup. Ct., supra, 127 Cal.App.4th at p. 1268; Dowell v. County of
Contra Costa, supra, 173 Cal.App.3d at p. 901.) Therefore, since the complaint was ultimately
filed on November 22, 2013, beyond the six month period, the claim appears to be time barred.
To the extent that Plaintiffs’ counsel letter is construed as a request to file a late claim,
the County mailed notice to plaintiffs Sang and Seth rejecting the late claims on April 10,
2013. (See County’s Separate Statement of Undisputed Facts at No. 36; Declaration of David
Schoendaler at ¶¶ 5-6, Exhibits R and T; Declaration of Rachel Nunez at ¶¶ 2-4.) Thus, in
order to obtain relief, Plaintiffs were required to file a petition in the superior court within six
months after the application to the board was denied or deemed denied pursuant to
Government Code section 911.6. (See Gov. Code, § 946.6, subd. (b).) Failure to comply with
time limitations set forth in Government Code section 946.6 bars an action on the government
claim. (See Lineaweaver v. Southern California Rapid Transit Dist. (1983) 139 Cal.App.3d
738, 741 [holding the six-month limitation period during which a person may petition the
superior court after the board’s denial of an application to present a late claim is mandatory].)
Plaintiffs fail to present any evidence showing that they filed a petition for relief with the
superior court. (See County’s Separate Statement of Undisputed Facts at No. 38.) Thus, the
Court lacks jurisdiction to consider the claims for negligent infliction of emotional distress.
(See City of Los Angeles v. Sup. Ct. (1993) 14 Cal.App.4th 621, 627 [the failure to comply with
the Government Code requirements concerning claims bars a subsequent suit].)
Motion Against Seth
The arguments discussed as to plaintiff Sang are the same as those with respect to
plaintiff Seth. Thus, Seth’s claim fails for the same reasons stated above with respect to
plaintiff Sang. (See County’s Separate Statement of Undisputed Facts at Nos. 32-38.)
Disposition
The motion for summary judgment is GRANTED.
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