SUPERIOR COURT, STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
Department 9, Honorable Mary E. Arand
Henry Keniston, Courtroom Clerk
Tina White, Court Reporter
191 North First Street, San Jose, CA 95113
Telephone: 408.882.2200
To contest the ruling, call (408) 808-6856 before 4:00 P.M.
LAW AND MOTION TENTATIVE RULINGS
DATE:
March 3, 2016
TIME:
9:00 A.M.
PREVAILING PARTY SHALL PREPARE THE ORDER OR AS STATED
OTHERWISE BELOW.
(SEE RULE OF COURT 3.1312)
TROUBLESHOOTING TENTATIVE RULINGS
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CASE #
CASE TITLE
RULING
20111CV207800 A&D Automatic Gate Company vs.
Pinn Brothers Construction, Inc.
20141CV264722 Sweeney, Mason, Wilson &
Bosomworth vs. Engelhart Electric
Company, Inc., et al
20141CV264722 Sweeney, Mason, Wilson &
Bosomworth vs. Engelhart Electric
Company, Inc., et al
20141CV269375 A. Daldumyan vs. X. Nguyen
20141CV269375 A. Daldumyan vs. X. Nguyen
20131CV249403 BTI Group, Inc. vs. R. Richart
Order of examination of Pinn Brothers Construction, Inc.
No proof of service has been filed.
Order of examination of Mark Engelhart. No proof of
service has been filed.
20131CV255773 Healtones Health Care, Inc., et al vs.
T. To, et al
20141CV267203 TT Group, Inc. vs. S. Fahmy
20141CV270545 Ventura Finishing Systems vs. Taisei
Construction Corporation, et al
Plaintiff has not yet provided a transcript of the settlement
that is needed for the Court to rule on this motion.
Off calendar per Stipulation and Order.
The motion by attorneys Donahue Fitzgerald LLP to
withdraw as counsel for Plaintiff Ventura Finishing
Systems was timely and properly served, is unopposed,
has merit and is GRANTED. The proposed order shall be
updated to include all currently pending hearings,
including the trial setting conference on 5/24/16 at 11:00
a.m. The order will be effective upon service of notice of
entry of the signed order on all parties.
Petition for minor’s compromise. Guardian ad Litem and
counsel required to appear.
LINE 10 20101CV190363 B. Poulsen vs. C. Petersen
Order of examination of Engelhart Electric Company, Inc.
No proof of service has been filed.
Ctrl/click on Line 4 for tentative ruling
See Line 4
Ctrl/click on Line 6 for tentative ruling
SUPERIOR COURT, STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
Department 9, Honorable Mary E. Arand
Henry Keniston, Courtroom Clerk
Tina White, Court Reporter
191 North First Street, San Jose, CA 95113
Telephone: 408.882.2200
To contest the ruling, call (408) 808-6856 before 4:00 P.M.
LAW AND MOTION TENTATIVE RULINGS
LINE 11 20121CV226063 B. Taylor vs. Los Gatos Community Petition for minor’s compromise. Counsel and guardian
Hospital, et al
ad litem are required to appear. The GAL may appear by
CourtCall.
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Case Name: Daldumyan v. Nguyen
Case No.:
2014-1-CV-269375
Plaintiff Artak Daldumyan (“Plaintiff”) is formerly a sales associate for World
Financial Group (“WFG”). (See second amended complaint (“SAC”), ¶¶ 8-10.) WFG paid
Plaintiff compensation and commissions for products that he and the associates in his WFG
hierarchy—those associates who he recruited—sold. (See SAC, ¶¶ 11, 12, 18.) In November
2011, WFG terminated for cause one of Plaintiff’s recruits and divested that recruit of his
commissions pursuant to the contract between that agent and WFG. (See SAC, ¶ 46.)
According to Plaintiff’s agreement with WFG, the applicable rules and the multi-level
marketing structure of WFG, Plaintiff was to receive that recruit’s hierarchy’s commissions;
however, instead, those commissions were transferred to the recruit’s brother. (See SAC, ¶¶
48-50.) Plaintiff complained to defendant Xuan Thanh Nguyen (“Defendant”)—an advisor to
WFG’s executive management on strategic issues—about the transfer, and Nguyen professed
to not know what happened. (See SAC, ¶ 25, 52.) However, Nguyen had told WFG
executives that the former recruit’s hierarchy should be transferred to the brother. (See
complaint, ¶ 53.) On August 17, 2012, WFG—acting in conjunction with Nguyen—
wrongfully terminated the agreement with Plaintiff and stopped paying commissions to
Plaintiff. (See complaint, ¶¶ 60-62.)
On September 9, 2015, the Court [Hon. Cabrinha] denied Defendant’s motion for
judgment on the pleadings as to the first cause of action of the initial complaint for intentional
interference with contract, granted the motion with leave to amend as to the second, fourth and
fifth causes of action of the initial complaint for intentional interference with prospective
economic advantage, promissory estoppel and fraud, and granted the motion without leave to
amend as to the third cause of action of the initial complaint for unjust enrichment.
On December 1, 2015, the Court adopted its tentative ruling to overrule Defendant’s
demurrer to the first cause of action of the first amended complaint (“FAC”) for intentional
interference with contract, sustained the demurrer with leave to amend as to the second and
fourth causes of action of the FAC for intentional interference with prospective economic
advantage and fraud, and sustained the demurrer without leave to amend as to the third cause
of action of the FAC for promissory estoppel.
On December 11, 2015, Plaintiff filed his SAC against Defendant, asserting causes of
action for: intentional interference with contract; intentional interference with prospective
economic advantage; and, fraud. Defendant demurs to each cause of action of the SAC.
New meet and confer requirement for demurrers
As a preliminary matter, as to any demurrer filed after January 1, 2016, Code of Civil
Procedure section 430.41 requires the demurring party, at least five days before the responsive
pleading is due, to “meet and confer in person or by telephone with the party who filed the
pleading that is subject to demurrer for the purpose of determining whether an agreement can
be reached that would resolve the objections to be raised in the demurrer.” (Code Civ. Proc. §
430.41, subds. (a)(1)-(a)(2).) Along with the demurrer, the demurring party is also required to
file and serve with the demurrer a declaration stating that they either met and conferred but
failed to reach an agreement resolving the objections, or that they attempted to meet and confer
but that the party who filed the pleading subject to demurrer failed to respond or otherwise
failed to meet and confer in good faith. (See Code Civ. Proc. § 430.41, subd. (a)(3).) Plaintiff
does not object to the demurrer on this basis, or suggest that Defendant failed to meet and
confer with him prior to filing the demurrer. Regardless, it does not appear that a meet and
confer, in this instance would have been fruitful as the arguments regarding the instant
demurrer are similar to the arguments in the last demurrer. For future reference, counsel for
both parties should be aware of the new law.
Plaintiff’s request for judicial notice of the prior September 3, 2015 and December 1,
2015 orders is GRANTED. (Evid. Code § 452, subd. (d).)
First cause of action for intentional interference with contract
The demurrer to the first cause of action for intentional interference with contract is
OVERRULED. As previously stated in the Court’s prior orders, the first cause of action states
facts sufficient to constitute a cause of action for intentional interference with contract based
on the contract between Plaintiff and WF, and “a demurrer cannot rightfully be sustained to
part of a cause of action.” (See Kong v. City of Hawaiian Gardens Redevelopment Agency
(2002) 108 Cal.App.4th 1028, 1047.)
Second cause of action for intentional interference with prospective economic advantage
The elements for the tort of intentional interference with prospective economic
advantage are (1) an economic relationship between the plaintiff and some third party, with the
probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the
relationship; (3) intentional acts on the part of the defendant designed to disrupt the
relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff
proximately caused by the acts of the defendant. (Korea Supply Co. v. Lockheed Martin Corp.
(2003) 29 Cal.4th 1134, 1153.) “[T]o recover for a defendant’s interference with an at-will
employment relation, a plaintiff must plead and prove that the defendant engaged in
an independently wrongful act—i.e., an act ‘proscribed by some constitutional, statutory,
regulatory, common law, or other determinable legal standard.’” (Reeves v. Hanlon (2004) 33
Cal.4th 1140, 1152-1153; see also Salma v. Capon (2008) 161 Cal.App.4th 1275, 1293 (stating
that claim for intentional interference with prospective economic advantage additionally
requires “that the conduct be independently wrongful”); see also Sole Energy Co. v.
Petrominerals Corp. (2005) 128 Cal.App.4th 212, 241 (stating that “[t]o establish intentional
interference with prospective economic advantage, a plaintiff must plead and prove ‘the
defendant’s interference was wrongful ‘by some legal measure other than the fact of
interference itself’’… [a]n act is independently wrongful ‘if it is unlawful, that is, if it is
proscribed by some constitutional, statutory, regulatory, common law, or other determinable
legal standard’”).)
As acknowledged by Plaintiff in opposition, there are two purported “economic
relationships” that are the subject of the second cause of action for intentional interference with
prospective economic advantage: the prospective economic advantage with downline
associates and the prospective economic advantage with the insurance product providers. (See
Pl.’s opposition to demurrer (“Opposition”), p.9:1-5.)
The Court has previously granted a motion for judgment on the pleadings and sustained
a demurrer to the cause of action for intentional interference with prospective economic
advantage on the ground that it fails to allege an independently wrongful act. In opposition,
Plaintiff cites to Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, for his
belief that he has in fact pled such an act:
Defendant’s conduct was “independently wrongful.” “A
defendant who ‘intentionally and improperly interferes with
another’s prospective contractual relation’ is subject to liability.
(Citation.) The intent requirement, as described above, is that the
defendant either desires to bring about the interference or knows
that the interference is certain or substantially certain to occur as
a result of its action. (Citation) In addition to this general intent,
the second requirement is that “[t]he interference ... must also be
improper. The factors to be considered in determining whether
an interference is improper are stated in § 767. One of them is
the actor's motive and another is the interest sought to be
advanced by him. Together these factors mean that the actor's
purpose is of substantial significance. If he had no desire to
effectuate the interference by his action but knew that it would be
a mere incidental result of conduct he was engaging in for
another purpose, the interference may be found to be not
improper. Other factors come into play here, however,
particularly the nature of the actor’s conduct. If the means used is
innately wrongful, predatory in character, a purpose to produce
the interference may not be necessary. On the other hand, if the
sole purpose of the actor is to vent his ill will, the interference
may be improper although the means are less blameworthy.’”
(Opposition, p.10:16-28, quoting Korea Supply Co., supra, 29 Cal.4th at p.1160, citing to the
Restatement 2d Torts, § 766B.)
However, Plaintiff ignores the context of the cited passage. In Korea Supply Co., the
California Supreme Court was noting the differences between the Restatement Second of
Torts—relied upon by Plaintiff—and California law:
…[T]he act of interference with prospective economic
advantage is not tortious in and of itself[;] the requirement of
pleading that a defendant has engaged in an act that was
independently wrongful distinguishes lawful competitive
behavior from tortious interference. Such a requirement
“sensibly redresses the balance between providing a remedy
for predatory economic behavior and keeping legitimate business
competition outside litigative bounds.” [Citation.]
The independent wrongfulness requirement also
differentiates California law from that of other states and the
Restatement Second of Torts….
Unlike California, the Restatement Second of Torts does
not require a plaintiff to plead that a defendant engaged in an
independently wrongful act in order to show “improper”
interference. Instead, a general intent plus an actor’s motive or
purpose to interfere is enough to subject a defendant to liability
under the Restatement. In the absence of an independent
wrongfulness requirement, a purpose to interfere with the
plaintiff's business expectancy suffices to distinguish actionable
conduct from behavior that is merely competitive, and therefore
privileged. The Restatement, however, recognizes that when the
defendant’s conduct is innately wrongful, a purpose to interfere
may be unnecessary. The Restatement appreciates that the
independent wrongfulness of a defendant’s acts may satisfy the
“improper” requirement of the tort without the need to look to
the motive or purpose behind a defendant’s acts.
Thus, while California does follow the Restatement’s
general intent requirement, California law adheres to a narrower
interpretation of what conduct is improper under this tort.
After Della Penna, supra, 11 Cal.4th 376…, California has
required plaintiffs to show that a defendant has engaged in an
independently, or inherently, wrongful act. Under this
requirement, a defendant’s motive or purpose is relevant only to
the extent that it renders the defendant’s conduct unlawful.
(Korea Supply Co., supra, 29 Cal.4th at pp.1160-1161.)
Thus, under California law, to state a cause of action for intentional interference with
prospective advantage, it is clear that Plaintiff must allege facts supporting an act that is
independently wrongful—an act ‘proscribed by some constitutional, statutory, regulatory,
common law, or other determinable legal standard.
As with the prior pleadings, the SAC does not allege such an act. In opposition,
Plaintiff contends that the SAC newly “alleges that in 2005, WFG threatened to revoke
Plaintiff’s authorization to operate his own mortgage company when Plaintiff declined the
proposal by WFG to merge his real estate business with WFG’s newly formed joint venture,
Synergy.” (Opposition, p.9:6-13.) However, these allegations are entirely irrelevant to the
instant cause of action. The alleged intentional interference with prospective advantage
occurred six to seven years after the newly alleged facts. (See SAC, ¶¶ 117, 120-121.) The
newly alleged facts do not specifically involve Defendant, but rather merely allege that
“Defendant was aware of this event in 2005.” (SAC, ¶ 105.) Plaintiff also argues that the SAC
alleges that Defendant lied about his knowledge of the transfer of the “downline” and
dissuaded Plaintiff from obtaining an attorney to protect his business. (See Opposition, p.9:1322.) However, although unscrupulous, Defendant did not have an obligation to inform Plaintiff
of any knowledge he may have had regarding the downline transfer. Moreover, the failure to
provide Plaintiff with any knowledge and the attempted dissuasion of Plaintiff to obtain
counsel—although they might be of import if there was a statute of limitations argument—
cannot form the basis of a fraud claim as they do not directly relate to the alleged
misrepresentations. Here, the improper act that is alleged is that Defendant engaged in acts
with the intent to interfere with Plaintiff’s contractual relationship. As the Korea Supply Co.
court stated, such an act is not tortious in and of itself.
As Plaintiff has not shown that the second cause of action is capable of amendment, the
demurrer to the second cause of action for intentional interference with prospective economic
advantage is SUSTAINED without leave to amend. (See Goodman v. Kennedy (1976) 18 Cal.
3d 335, 349 (stating that “Plaintiff must show in what manner he can amend his complaint and
how that amendment will change the legal effect of his pleading”), quoting Cooper v. Leslie
Salt Co. (1969) 70 Cal. 2d 627, 636; see also Hendy v. Losse (1991) 54 Cal. 3d 723, 742
(stating that the burden is on the plaintiff… to demonstrate the manner in which the complaint
might be amended”).)
Third cause of action for fraud
The elements of a cause of action for fraud are: (1) a misrepresentation, which includes
a concealment or nondisclosure; (2) knowledge of the falsity of the misrepresentation, i.e.,
scienter; (3) intent to induce reliance on the misrepresentation; (4) justifiable reliance; and (5)
resulting damages. (Lazar v. Super. Ct. (Rykoff-Sexton, Inc.) (1996) 12 Cal. 4th 631, 638.)
Minimally, a fraud cause of action must “allege the names of the persons who made the
allegedly fraudulent representations, their authority to speak, to whom they spoke, what they
said or wrote, and when it was said or written.” (Lazar, supra, 12 Cal.4th at 645.)
As with the second cause of action, the Court has previously granted a motion for
judgment on the pleadings and sustained a demurrer to the cause of action for fraud. As with
prior iterations of this cause of action, the fraud claim is premised on seven statements made in
books and videos, Building People, The Journey of a Builder 2.0, and The System Builder, 4th
Edition. (See SAC, ¶¶ 147-150.) As stated above, a fraud claim must be alleged with
particularity and minimally “allege the names of the persons who made the allegedly
fraudulent representations, their authority to speak, to whom they spoke, what they said or
wrote, and when it was said or written.” The only affirmative purported misrepresentations
alleged by the third cause of action that include what was actually said or written are those
representations in the books and videos. (See SAC, ¶¶ 147-150.) However, as stated in prior
orders, these statements cannot form a basis for a fraud claim because: they are not alleged to
be false; they do not allege how such statements are false; they are merely generalized
comments about business practices; and, they could not have possibly been intended to induce
reliance on Plaintiff’s part when the statements were made. (See December 1, 2015 order re:
demurrer, pp.7:23-27, 8:1-13; see also September 9, 2015 order re: motion for judgment on the
pleadings, pp.4:25-28, 5:1-3.) These statements also do not allege when and to whom they
were made and are thus not pled with the requisite particularity.
The fraud claim is also based on the new allegations regarding the 2005 incident with
WFG that “Defendant Nguyen was aware of… in 2005.” (SAC, ¶ 159.) However, as stated
above, this event is completely irrelevant to any purported fraud occurring six years later in
2011 or 2012.
The third cause of action also alleges that “in November 2011, Plaintiff began to raise
concerns regarding this improper transfer to Defendant, Defendant lied to Plaintiff and claimed
he did not know what had happened and would look into the matter… [and] discouraged
Plaintiff from seeking legal representation to address this violation….” (SAC, ¶ 160.) Here,
the alleged misrepresentation did not cause the alleged damages. Rather, the alleged
damages—the improper transfer of the downline—are the result of WFG’s termination of its
AMA with Plaintiff. (See SAC, ¶¶ 156, 171.) Defendant’s lobbying efforts to have the
downline transferred away from Plaintiff (see SAC, ¶¶ 161-164, 166-167, 169.) does not
support the fraud claim either, since these were neither statements nor omissions made to
Plaintiff. Instead, these could support a cause of action for intentional interference with
contractual relations—the subject of the first cause of action.
As Plaintiff has failed to state facts sufficient to constitute a cause of action for fraud
and with sufficient particularity after the Court has given several opportunities to amend, the
demurrer to the third cause of action for fraud is SUSTAINED without leave to amend.
Motion to strike portions of the SAC
Defendant moves to strike portions of the SAC relating to the tortious interference with
the insurance-provider contracts on the ground that they “are not drawn in conformity with the
laws of this state.
First, the portion of the pleading that is the subject of the motion is properly drawn in
conformity with the laws of this state. Defendant argues that “[i]n its September 3, 2015
Order, the Court has held the Complaint failed to state a claim for tortious interference with
respect to Daldumyan’s alleged contract with the insurance product providers.” (Def.’s
memorandum of points and authorities in support of motion to strike, p.2:9-12.) However, the
September 3, 2015 order denied the motion for judgment on the pleadings as to the first cause
of action. In denying the motion for judgment on the pleadings, it could not hold that Plaintiff
could not make certain allegations in a subsequent pleading absent a motion to strike—which
was not a subject of the September 3, 2015 order. Further, although the September 3, 2015
order noted that the allegations of the initial complaint’s first cause of action did not state facts
sufficient to constitute a cause of action for intentional interference based on the insurance
product provider contracts, the order did not “hold” that the SAC did not state facts sufficient to
constitute such a claim. Thus, the motion to strike cannot be granted on the ground as stated in
the notice of motion, and Defendant’s argument in support of its motion is without merit.
Further, even if Defendant had moved to strike the allegations on the ground that the
allegations were irrelevant, the SAC alleges that: Defendant interfered with the AMA between
Plaintiff and WFG; Defendant knew that the insurance-providers have a selling agreement with
WFG that provides that the insurance-providers were forced to terminate appointment
agreements with a WFG associate where that associate’s AMA was terminated; and, Defendant
knew that by causing termination of the AMA through interference, such interference would
also result in the termination of appointment agreements. (See SAC, ¶¶ 8, 10, 14-16, 60-102.)
These allegations are sufficient to state facts sufficient to constitute a cause of action for
tortious interference premised on the insurance-provider appointment agreements, and are
therefore relevant to the first cause of action. Either way, the motion to strike portions of the
SAC relating to the tortious interference with the insurance-provider contracts is DENIED.
The Court will prepare the order.
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Case Name: BTI Group, Inc. v. Coastal Circuits, et al.
Case No.:
2013-1-CV-249403
The motion by Plaintiff and Cross-Defendant BTI Group, Inc. (“Plaintiff”) to compel
Defendant Infinity Circuit Solutions (“Infinity) to respond to request for production of
documents, set no. 1, produce responsive documents, and respond to Form Interrogatories, was
timely and properly served, and is unopposed.
However, the Court finds that the use of “Incident” Form Interrogatories is not
appropriate in the context of a business case like this one. It is likely impossible to provide an
appropriate definition of “Incident” in a business tort case alleging multiple events, multiple
causes of action, and naming multiple parties. (See California Practice Guide, Civil
Procedure Before Trial, §8:933.8, “Objections to certain Official Form Interrogatories are
likely to be sustained in cases involving complex business transactions.” [Emphasis in
original.])”
Accordingly the motion to compel is GRANTED as to the Request for Production of
Documents Set no. 1, and to the Form Interrogatories (except that the motion is DENIED as to
FIs 9.1, 9.2, 12.1 through 12.7, 14.2 and 14.2). The motion to compel production of
documents is GRANTED. Infinity shall produce all responsive documents, and provide full
and complete, code-compliant written responses to the written discovery without objections,
except as to privilege (and excepting the Incident Form Interrogatories), within 20 days after
notice of entry of the order signed by the Court.
Sanctions of $900 (at the rate of $450 per hour for two hours), plus costs of $60, for a
total of $960, is awarded to Plaintiff, to be paid by Infinity and/or its counsel. The Court finds
that a reply and appearance will likely not be required as no opposition was filed, and the Court
does not award sanctions for anticipated fees.
The Court will modify and sign the proposed form of order.
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