Case Number: SC126243 Hearing Date: March 9, 2021 Dept: O
SUPERIOR COURT OF
THE STATE OF CALIFORNIA,
FOR THE COUNTY OF
LLC, a California limited liability company,
SOLOMON LEVY, an
individual, et. al.,
CASE NO.: SC126243
A DISCOVERY REFEREE
Cal. Rules of Court)
Court: Dept O
Judge: Hon H.
Jay Ford III
TO ALL PARTIES AND
THEIR ATTORNEYS OF RECORD:
THE COURT FINDS:
is necessary for the court to appoint a referee to hear and determine any and
all discovery motions and disputes relevant to discovery in the action and to
report findings and make a recommendation. (Code Civ. Proc., § 639(a)(5). The
exceptional circumstances specific to this case include the unusual number of
discovery disputes that have arising since the Court issued its Statement of
Decision on the stipulated bifurcated trial of the cause of action for
declaratory relief on September 5, 2019. Attached for ease of reference by the referee is that statement of
decision issued on the stipulated bifurcated trial of the cause of action for
declaratory relief. Despite the court conducting several informal discovery conferences
with counsel, the number of disputes resolved informally is minuscule compared
to the number of disputes that remain to be resolved by the court. At present
there are over 27 possible motions to compel further responses to written
discovery requests and to depositions. Similarly,
the disputed factual and legal issues appear to be expanding and becoming more
complex. Finally, the ability to the court to timely adjudicate all of these
discovery disputes is constrained by the backlog of pending causes as a
consequence of the COVID-19 pandemic that has severely limited the court’s ability
to conduct pre-trial hearings. Finally, this case was filed on August 9, 2016. The court expects to be
able to commence the jury trial before the end of the year. The speedy resolution of the pending and anticipated discovery disputes is needed without further delay.
party has established an economic inability to pay a pro rata share of the
THE COURT ORDERS:
following person is appointed as referee. (The referee's signature indicating
consent to serve and certification that they are aware of and will comply with
the applicable provisions of canon 6 of the Code of Judicial Ethics and the
California Rules of Court must be included in the proposed order appointing a referee under Code of Civil
Procedure section 638 or attached to the order appointing a referee under
a. Name: HON. ANN KOUGH (RET)
b. Business address: JAMS c/o Cristina Lee, 555 West 5tyh St., 32nd
Floor, Los Angeles, CA 90013. c. Telephone number & email
d. The referee is an active member of
the State Bar of California.
discovery referee is appointed for all discovery purposes in the action. In the
context of hearing any motion to compel further discovery responses or production
of documents, the referee may hear and make recommended findings of fact
regarding any claims of abuse of the discovery process and/or willful destruction
of evidence or documents and recommend monetary sanctions. Any motion seeking evidentiary,
issue, or terminating sanctions, however, must be filed with, and heard by the
court. The referee is authorized to set the date, time, and place for all
hearings determined by the referee to be necessary; direct the issuance of
subpoenas; preside over hearings; take evidence; and rule on
motions, and other requests made during the course of the hearing.
Court finds that it is fair and reasonable to order the referee’s fees be paid equally,
one-half by the plaintiff and one-half by the defendants, but subject to a
recommendation by the referee and order by the court to reallocate such fees
between the parties in connection the adjudication of any motion or other
referee must report in writing to the court within 20 days after any hearing
has been concluded and the matter submitted. The referee must file with the
court a report that includes a concise recommendation on the merits of any
disputed issue, a statement of the hours spent, and total fees charged by the
referee, and any recommended reallocation of the referee’s fees. The referee must serve the report on all
order may be modified by the court for good cause, or by the stipulation of the
parties and acceptance of the referee. The parties may submit such stipulation
and proposed order for entry by the court without scheduling any hearing on the
REFEREE: The undersigned consents to serve as referee as provided above and
certifies that he or she is aware of and will comply with the applicable provisions
of canon 6 of the Code of Judicial Ethics and the California Rules of Court.
Dated: ___________________ __________________________
ANN KOUGH (Ret.)
IS SO ORDERED.
Dated: ________________ ______________________________
H. JAY FORD III, Judge Superior
Court, County of Los Angeles
Case Number: SC126243 Hearing Date: July 09, 2020 Dept: O
Case Name: CC Wellness, LLC v. Levy, et al.
Case No.: SC126243
Calendar #: 8
Complaint Filed: 8/9/16
Motion C/O: 2-26-19
Discovery C/O: 2-11-19
Trial Date: 10-5-20
SUBJECT: MOTION FOR SUMMARY ADJUDICATION
MOVING PARTY: Plaintiffs/Cross-Defendants CC Wellness, et al.
RESP. PARTY: Defendants/Cross-Complainants Solomon Levy and United Consortium, Inc.
Cross-Defendants’ Motion for Summary Adjudication of the 2nd cause of action for defamation and punitive damages in the Third Amended Cross-complaint of Levy, United Consortium, Inc. and Levy Nutrition, Inc. is DENIED.
Cross-Defendants move for summary adjudication of the 2nd cause of action based on three affirmative defenses: (1) truth, (2) CC §47(b)(litigation privilege) and (3) CC §47(c)(qualified communication privilege.) Cross-Defendants also move for summary adjudication on grounds that the statement Olszewicz made to Range was not a statement of fact but a non-actionable opinion.
I. To the extent the motion for summary adjudication is based on (1) truth of statement or (2) assertion that statement was non-actionable opinion, there is a factual dispute regarding the substance of Olszewicz’s statement to Range on 8-17-16 that requires the Motion for Summary Adjudication be DENIED.
According to ¶95 of the third amended cross-complaint, “[o]n August 17, 2016, Mr. Olszewski, acting on behalf of Catalus Capital and CCW and in his individual capacity, approached Mr. Range and stated that Mr. Range’s impression that Mr. Levy had an excellent business reputation was mistaken, and that Mr. Olszewski had conversations with others in which he had heard that Mr. Levy’s integrity had frequently been called into question in the past.” See Cross-Defendants’ Evidence in Support of MSA, Ex. 2, Excerpts of TAXC, ¶95.
Olszewski submits evidence refuting that he made such statements in this context to Mr. Range. According to Olszewski, the purpose of his meeting with Range on 8-17-16 had nothing to do with Levy and he had no intent of speaking to Range about Levy. See Cross-Defendants’ Evidence in Support of MSA, Dec. of M. Olszewski, ¶¶16-18. Range “pressed” Olszewski on CC Wellness’s reasons for filing this lawsuit. Id. at ¶19. Range, a business broker, refused to make business introductions for Olszewski’s company, Catalus, unless Olszewski responded. Id. at ¶¶19-20. Range indicated that in his opinion, Levy had a good business reputation. Id. at ¶19. In response, Olszewski stated that in his opinion, Levy did not have a unanimously good business reputation. Id. at ¶22. Olszewski testifies he made no references to conversations with third parties or any other facts that were the basis of his opinion. Id.
Range’s recollection of his conversation with Olszewski conflicts with Olszewski’s declaration testimony. Range corroborated Olszewski’s testimony that Range solicited Olszewski’s opinion regarding this lawsuit as a condition of working with him and that Range stated he believed Levy had a good business reputation. See Cross-Defendants’ Evidence in Support of motion for summary adjudication, Ex. 7, 45:18-45:25. Range corroborated Olszewski’s testimony that he was reluctant to speak of the lawsuit with Range. Id. However, Range testified that Olszewski “made reference to problems or issues that he believed Mr. Levy had had with other people he had done business with and that it was not a single occurrence but a recurring occurrence of problems that Mr. Levy had had with people he had done business with.” Id. at 46:10-15. This contradicts Olszewski’s testimony that he simply stated that, in his opinion, Levy did not have a “unanimously good business reputation” without referencing third parties or other facts to support this opinion. Based on Olszewski’s own evidence in support of his motion for summary adjudication, there is a dispute over what he said to Range on 8-17-16. The dispute is an issue of fact involving credibility that cannot be resolved on summary adjudication. “A court generally cannot resolve questions about a declarant's credibility in a summary judgment proceeding, unless admissions against interest have been made which justify disregard of any dissimulation.” AARTS Productions, Inc. v. Crocker National Bank (1986) 179 Cal.App.3d 1061, 1065.
The substance of what Olszewski actually said to Ranger is determinative of whether the affirmative defense of truth applies and whether the statement was a nonactionable opinion. “Truth of the statements made is a complete defense against liability for defamation, regardless of bad faith or malicious purpose.” 5 Witkin, Summary (11th ed. 2017), Torts §655. “Although statements of fact may be actionable as libel, statements of opinion are constitutionally protected.” Summit Bank v. Rogers (2012) 206 Cal.App.4th 669, 695. However, a statement of opinion can form the basis of a defamation claim. “If a speaker says, ‘In my opinion John Jones is a liar,’ he implies a knowledge of facts which lead to the conclusion that Jones told an untruth. Even if the speaker states the facts upon which he bases his opinion, if those facts are either incorrect or incomplete, or if his assessment of them is erroneous, the statement may still imply a false assertion of fact.” Milkovich v. Lorain Journal Co. (1990) 497 U.S. 1, 18.
Thus, “where an expression of opinion implies a false assertion of fact, the opinion can constitute actionable defamation. The crucial question of whether challenged statements convey the requisite factual imputation is ordinarily a question of law for the court. Only once the court has determined that a statement is reasonably susceptible to such a defamatory interpretation does it become a question for the trier of fact whether or not it was so understood. The question is whether a reasonable fact finder could conclude the published statement declares or implies a provably false assertion of fact.” Summit Bank, supra, 206 Cal.App.4th at 695–696 (employee’s Internet comments that CEO of bank used it as her personal bank, that customers should move money before “left high and dry” were not provably false assertions of fact given that they were posted on Craiglist’s “Rants and Raves” board; such hyperbolic language is nonacitonable opinion as a matter of law).
“Determining whether a particular communication is actionable can be difficult, and what constitutes a statement of fact in one context may be treated as a statement of opinion in another, in light of the nature and content of the communication taken as a whole. To decide whether a statement is fact or opinion, a court must put itself in the place of an average reader and determine the natural and probable effect of the statement, considering both the language and the context.” Id. at 698-699. “It is sufficient if the defendant proves true the substance of the charge, irrespective of slight inaccuracy in the details, so long as the imputation is substantially true so as to justify the gist or sting of the remark. Where an imputation is substantially true so as to justify the gist or sting of the remark, the truth defense is established.” Id. at 697.
The Court finds both Olszewski’s and Range’s versions of Olszewski’s statement to are reasonably susceptible to a defamatory meaning. Both versions of Olszewski’s statement could reasonably be interpreted as an opinion based upon a provably false assertion of fact. Based on Olszewski’s testimony, his statement was that that Levy’s reputation was not “unanimously good,” implying that Olszewski knew of at least one person who believed Levy did not have a good business reputation. Thus, the provably false assertion of fact implied by Olszewski’s statement as recounted by him was whether there was at least one person or entity that did not believe Levy had a good business reputation. Olszewski can establish the truth of his statement that Levy’s reputation was not “unanimously good,” because he himself did not believe Levy’s reputation was good and Plaintiff CC Wellness filed this action accusing Levy of fraud and mishandling of CC Wellness’s purchase of United Consortium, Inc.’s assets. See Plaintiff’s third amended complaint. Thus, based on Olszewski’s recollection of his 8-17-16 statement, the defense of truth could be established. “Even if an opinion can be understood as implying facts capable of being proved true or false, however, it is not actionable if it also discloses the underlying factual bases for the opinion and those statements are true.” J-M Manufacturing Co., Inc. v. Phillips & Cohen LLP (2016) 247 Cal.App.4th 87, 100.
However, if Range’s recollection of Olszewski’s statement were accepted, Olszewski expressed provably false assertions of fact that Levy did not have a good business reputation due to multiple problematic business deals with third parties. According to Range, Olszewski said that Levy had recurring problems when doing business with third parties, i.e. persons other than himself and CC Wellness. See Cross-Defendants’ Evidence in Support of motion for summary adjudication, Ex. 7, 45:18-45:25 and 46:10-15. Although Range testified that Olszewski did not identify specific third parties or specific problematic transactions between Levy and third parties, Olszewski’s statements as recalled by Range could be provably false statements of facts. Id. at 46:10-15. Specifically, whether there were parties other than Olszewski and CC Wellness who had problems doing business with Levy and whether such problems were recurring can be proven true or false.
Olszewski offers no evidence to establish the truth of Range’s recollection of Olszewski’s statements. Olszewski offers no evidence that persons other than CC Wellness and himself had problems doing business with Levy and that there were multiple instances of such problematic business deals. As such, Olszewski fails to establish the truth of his statements to Range as recalled by Range in his deposition.
The Court finds that there is a material dispute of fact regarding what Olszewski said to Range on 8-17-16. Depending on the outcome of that dispute, the defense of truth may or may not apply. However, the Court finds that both Olszewski’s and Range’s recollection of Olszewski’s 8-17-16 statements do not qualify as nonactionable opinions as a matter of law. Although couched as an opinion, both versions of Olszewski’s statement imply or expressly state provably false assertions of fact. To the extent the motion for summary adjudication is based on the affirmative defense of truth and the assertion that Olszewski’s statement was one of nonactionable opinion, the motion for summary adjudication is DENIED.
II. CC §47(b) Litigation Privilege
Cross-Defendants also argue that Olszewski’s statement to Range was protected by CC §47(b). The privilege extends to pre-litigation communications and communications outside of court. The privilege “applies to any publication required or permitted by law in the course of a judicial proceeding to achieve the objects of the litigation, even though the publication is made outside the courtroom and no function of the court or its officers is involved.” Silberg v. Anderson (1990) 50 Cal.3d 205, 212. The litigation privilege applies only to out-of-court statements if they “function intrinsically, and apart from any consideration of the speaker's intent, to advance a litigant's case” and therefore include actual pleadings, a lis pendens, demand letters and communications directed towards settlement, communications between a law firm and persons with potential claims, and investigatory interviews. See Rothman v. Jackson (1996) 49 Cal.App.4th 1134, 1141, 1149 (the litigation privilege does not apply to statements to the press because they did not further any litigation objective). The “essential point remains: the litigation privilege does not insulate statements that do not further the objects of the litigation.” Argentieri v. Zuckerberg (2017) 8 Cal.App.5th 768, 786. The communication must “function as a necessary or useful step in the litigation process and serve its purposes.” Id. at 785.
“A party's legitimate objectives in the litigation are limited to the remedies which can be awarded by courts. Thus, the “objects of the litigation” for a plaintiff are to obtain a monetary recovery for damages or other relief; a defendant's “objects” are to resist a determination of liability and whatever assessment of damages, penalty or other order that the plaintiff seeks.” Rothman, supra, 49 Cal.App.4th at 1147–1148. “[R]epublications to nonparticipants in the action are generally not privileged under section 47(b). Thus, the privilege does not apply where publication is to persons in no way connected with the proceeding.” Susan A. v. County of Sonoma (1991) 2 Cal.App.4th 88, 93 (psychologist's statement to reporter about his interview with arrestee did not constitute “privileged publication,” and therefore parents could bring action against psychologist).
Olszewski’s subjective testimony regarding the purpose of his statement does not determine whether it furthered Cross-Defendants’ litigation objectives. “The privileged status of a particular statement therein depends on its relationship to an actual or potential issue in an underlying action. Courts respect the absolute aspect of the privilege by considering a statement's apparent or ostensible connection to the underlying action, without exploring the writer's actual, subjective intent or purpose.” Financial Corp. of America, supra, 189 Cal.App.3d at 776.
Cross-Defendants fail to establish Olszewski’s 8-17-16 conversation with Range furthered the Cross-Defendants’ litigation objectives. Based on Olszewski’s own declaration, Range questioned Olszewski about the reason for this litigation against Levy and United Consortium, Inc. in the context of a business meeting unrelated to this litigation. See Cross-Defendants’ Evidence in Support of MSA, Dec. of M. Olszewski, ¶¶20 and 23 and Ex. 7, Range Deposition, 42:1-13, 45:18-25. Range conditioned his broker services on Olszewski answering his question. See Cross-Defendants’ Evidence in Support of MSA, Dec. of M. Olszewski, ¶20 and Ex. 7, Range Deposition, 42:1-13, 45:18-25. According to Olszewski, he responded to Range’s questions to further the business interests of Catalus. Cross-Defendants fail to explain how answering Range’s question advanced a legitimate litigation objective. Based on the circumstances and the statement itself, the purpose of the response was not to influence Range’s testimony or otherwise achieve any litigation objective, particularly since Olszewski only responded because Range conditioned his broker services on Olszewski answering his question. Olszewski also fails to explain how Range’s opinion regarding Levy’s business reputation was relevant to the litigation as it existed on 8-17-16. The 8-17-16 conversation between Range and Olszewski was not a witness interview, nor was it an attempt at settlement. See e.g. Financial Financial Corp. of America, supra, 189 Cal.App.3d at 777-778 (prelitigation settlement communications and witness interviews protected by CC §47(b) but statements to other persons by attorneys that had no relationship to the litigation would be unprotected).
Cross-Defendants argue that the statement satisfies the “reasonable relation” standard articulated in Financial Corp. of America for application of CC §47(b). Citing Albertson v. Raboff (1956) 46 Cal.2d 375, the Court of Appeals stated in Financial Corp. of America, “[i]f the publication has a reasonable relation to the action and is permitted by law, the absolute privilege attaches.” Financial Corp. of America, supra, 189 Cal.App.3d at 771. However, the “reasonable relation” standard applies to publications “permitted by law.” The Supreme Court in Jacob B. v. County of Shasta (2007) 40 Cal.4th 948 explained that “publications permitted by law” referred “any category of publication permitted by law,” e.g. notices of lis pendens, courtroom testimony, declarations filed with the court and letters to the family law court regarding a family law court decision. See Jacob B., supra, 40 Cal.4th at 958–959. Cross-Defendants do not address whether a casual conversation between two witnesses to a litigation regarding the character of a litigant qualifies as a category of communication permitted by law.
Moreover, the requirement of reasonable or logical relationship is in addition to the requirement that the communication further Cross-Defendants’ litigation objectives. Silberg, supra, 50 Cal.3d at 212. Even if the communication were reasonably related to the litigation, Cross-Defendants fail to demonstrate that the communication was made to achieve a litigation objective, as opposed to Catalus’s unrelated business objectives. Cross-Defendants fail to establish as an issue of law that Olszewski’s 8-17-16 statement satisfied each and every element of CC §47(b) as applied to out-of-court communications. Cross-Defendants’ motion for summary adjudication based on CC §47(b) is DENIED.
III. CC §47(c) Common Interest Privilege
In determining whether CC §47(c) applies on this motion for summary adjudication, the Court will assume that Olszewski’s statement was false. If the statement were true as an issue of law, Olszewski would not be required to resort to CC §47(c). As discussed above, there is a dispute as to both the specific statement in question and whether that statement was true.
The common interest privilege is set forth under CC §47(c). “The privilege applies to a communication, made without malice, to a person interested in the communication by one who is also interested, or by one who stands in such a relation to the person interested as to afford a reasonable ground for supposing the motive for the communication is innocent, or who is requested by the person interested to give the information.” See Cal. Judges Benchbook, Civ. Proc. Before Trial (CJER March 2019 Update), Attacking the Pleadings, §12.134. “A qualified privilege extends to a communication to an interested person by one who is requested by that person to give the information.” CC §47(c)(3); 5 Witkin, Summary (11th ed. 2017), Torts §700. “The applicability of the common-interest privilege provision is a question of law where…the facts alleged to give rise to the privilege are undisputed.” Noel v. River Hills Wilsons, Inc. (2003) 113 Cal.App.4th 1363, 1372 (malice could not be reasonably inferred from undisputed evidence and court therefore could properly grant summary judgment based on CC §47(c)); Hawran v. Hixson (2012) 209 Cal.App.4th 256, 286 (application of such privileges ordinarily question of law where facts undisputed).
“This privilege is recognized where the communicator and the recipient have a common interest and the communication is of a kind reasonably calculated to protect or further that interest. The ‘interest’ must be something other than mere general or idle curiosity, such as where the parties to the communication share a contractual, business or similar relationship or the defendant is protecting his own pecuniary interest. Rather, it is restricted to proprietary or narrow private interests.” Id. at 287.
“Malice in defamation cases means ‘actual’ or ‘express’ malice, hatred, or ill will, and not the fictional malice ‘implied by law’ from the intentional doing of a wrongful act without just cause.” 5 Witkin, Summary (11th ed. 2017), Torts §697. “Although ill will may be circumstantial evidence of malice, it is not the equivalent of malice; there must be a link between the defendant's hostility and awareness of the probable falsity of the statements.” Id. “The privilege is lost if the defendant knows the statement is false or has no reasonable ground for belief in the truth of the statement.” Id.
Cross-Defendants establish Olszewski’s 8-17-16 statement was made in response to Range’s request for information. See Cross-Defendants’ Evidence in Support of MSA, Dec. of M. Olszewski, ¶¶20 and 23 and Ex. 7, Range Deposition, 42:1-13, 45:18-25. Olszewski also testifies that he did not make the statement with any malice or ill will and only responded “honestly” to Range’s inquiry. See Cross-Defendants’ Evidence in Support of MSA, Dec. of M. Olszewski, ¶24.
The Court finds Cross-Complainants fail to raise a triable issue as to whether Range and Olszewski shared a “common interest.” Cross-Complainants admit that Range asked Olszewski why CCW was suing Levy and UCI and Olszewski’s responded the cause involved Levy’s business reputation. See Cross-Complainants Response to Cross-Defendants’ SSUMF No. 14. Cross-Complainants argue that Range and Olszewski did not have a “common interest” in defaming Levy, but they also admit that (1) Range and Olszewski were meeting for the common interest of potential business opportunities and (2) Range indicated that he could not do business with Catalus/Olszewski due to this lawsuit. Id. Such facts support a finding that Range and Olszewski “share[ed] a contractual, business or similar relationship or the defendant is protecting his own pecuniary interest.” See Hawran, supra, 209 Cal.App.4th at 286.
However, the Court cannot find as a matter of law that Olszewski’s statement is protected by CC §47(c), because there is a dispute as to the nature of the statement. As discussed in connection with Olszewski’s truth defense, Range’s recollection of his statement differs in a material way from Olszewski’s testimony regarding what he said. Olszewski does not address the truth or falsity of his statement as recalled by Range, i.e. whether in fact there were third parties who experienced problematic business dealings with Levy and that these problematic dealings between Levy and these third parties were recurring, serial problems, as opposed to single instances. If in fact the statement as recalled by Range were false and Levy knew it was false, CC §47(c) could not be applied. Olszewski makes no showing that the statement as recalled by Range was (1) true or (2) that, if it was false, Olszewski did not know it was false or had no reasonable ground to believe it was false.
In addition, Olszewski testifies that he was attempting to influence Range’s opinion of Levy because Range was a witness. If in fact he was doing so, and he made false statements to Range for that purpose, the Court could not find as an issue of law that Olszewski acted without malice. Finally, to the extent Cross-Defendants rely solely on Olszewski’s declaration regarding his state of mind and his lack of malice in making the 8-17-16 statement, the Court may in its discretion deny the motion for summary adjudication under CCP §437c(e). “If a party is otherwise entitled to summary judgment pursuant to this section, summary judgment shall not be denied on grounds of credibility or for want of cross-examination of witnesses furnishing affidavits or declarations in support of the summary judgment, except that summary judgment may be denied in the discretion of the court if…a material fact is an individual’s state of mind, or lack thereof, and that fact is sought to be established solely by the individual’s affirmation thereof.” CCP §437c(e).
Triable issues of fact remain as to whether Olszewski made the 8-17-16 statement to Range with malice or knowledge of the falsity of his statement. The MSA based on §47(c) is DENIED.
IV. Punitive Damages
“Under the clear and convincing standard, the evidence must be so clear as to leave no substantial doubt and sufficiently strong to command the unhesitating assent of every reasonable mind. Although the clear and convincing evidentiary standard is a stringent one, it does not impose on a plaintiff the obligation to ‘prove’ a case for punitive damages at summary judgment or summary adjudication. Even so, where the plaintiff’s ultimate burden of proof will be by clear and convincing evidence, the higher standard of proof must be taken into account in ruling on a motion for summary judgment or summary adjudication, since if a plaintiff is to prevail on a claim for punitive damages, it will be necessary that the evidence presented meet the higher evidentiary standard…Summary judgment or summary adjudication on the issue of punitive damages is proper only when no reasonable jury could find the plaintiff’s evidence to be clear and convincing proof of malice, fraud or oppression.” Pacific Gas and Electric Company v. Superior Court (2018) 24 Cal.App.5th 1150, 1158–1159.
Cross-Defendants move for summary adjudication of X-Complainant’s punitive damages claim based on Olszewski’s lack of malice. As discussed in connection with the malice element of the qualified immunity under CC §47(c), Cross-Defendants fail to establish that there was an absence of malice based on Range’s recollection of Olszewski’s statement. Cross-Defendants do not address Range’s recollection of Olszewski’s statement except to erroneously claim that it fully corroborated Olszewski’s recollection of the statement. For this reason, Cross-Defendants’ motion for summary adjudication of the punitive damages claim based on the absence of malice is DENIED.
V. Cross-Complainants ’ Opposition
Cross-Complainants’ opposition raises the same points as stated above. In addition, Cross-Complainants argue the 2nd cause of action is based on a blog post. However, based on a review of the body of the 2nd cause of action, the only statement identified as defamatory is Olszewski’s statement to Range during their 8-17-16 conversation. The blog post is alleged in ¶41 of the third amended cross-complaint filed on 8-18-18 as background facts and there is no allegation that the post was defamatory. Instead, Cross-Complainants ’ allege “this posting was intended to solicit inquiries concerning who the supposed ‘crooks’ were, and that Mr. Olszewski referred to Cross-Complainants in response, thus defaming them further.” Although ¶41 is incorporated by reference, as pled, the 2nd cause of action could only be reasonably construed as being based on Olszewski’s statements to Range.
Cross-Complainants argue Cross-Defendants cannot seek adjudication based on CC §47(c) or truth, because neither was specifically pled. Cross-Complainants fail to establish that the truth of the statements must be specifically pled. CCP §461 states that truth “may” be alleged as a defense. Cross-Defendants’ answer contains a general denial, which would include a denial of Cross-Complainants allegation that Olszewski’s statement to Range was false.
However, CC §47(c) is not pled specifically in the answer. CC §47(b) is specifically pled. As such, in addition to Cross-Defendants’ failure to establish that CC §47(c) applies as an issue of law to the defamation claim, CC §47(c) is outside the scope of the pleadings and cannot be raised as grounds for adjudication. See Jacobs v. Coldwell Banker Residential Brokerage Co. (2017) 14 Cal.App.5th 438, 444; California Bank & Trust v. Lawlor (2013) 222 Cal.App.4th 625, 637, fn. 3 (“[a] party may not oppose a summary judgment motion based on a claim, theory, or defense that is not alleged in the pleadings,” and “[e]vidence offered on an unpleaded claim, theory, or defense is irrelevant because it is outside the scope of the pleadings”).
VI. Cross-Complainants Evidentiary Objections
Objection Nos. 1-12—OVERRULE
Case Number: SC126243 Hearing Date: June 23, 2020 Dept: O
Name: CC Wellness, LLC v. Levy, et
SUBJECT: MOTION TO STRIKE PORTIONS OF THIRD AMENDED COMPLAINT
Solomon Levy and United Consortium, Inc.
PARTY: Plaintiffs CC Wellness,
Defendants/X-Complainants Levy and
United Consortium, Inc.’s Motion to Strike ¶¶15-22 and 24 is DENIED.
Preliminarily, the Court sees Plaintiffs voluntarily “dismissed” ¶16 of their
third amended complaint. (TAC) Plaintiffs cannot “dismiss” a paragraph from
their complaint. To solve that defect,
with the stipulation of the counsel the Court will now order paragraph 16
Plaintiffs claim there was an
agreement that Defendants would not challenge the TAC. The Court
disagrees. The 10-11-19 minute order O
attached as Ex. 3 to Plaintiff’s opposition does not memorialize any such
agreement. The Court’s recollection of
what was stated at the hearing is consistent with Mr. Mircheff’s stated in his
I. Paragraphs ¶¶15-22 and 24 of the TAC do not
violate the Court’s 12-12-18 MSA Order on the 4th thru 7th
c/a of the SAC
The scope of an order granting
summary adjudication is limited by CCP section 437c, subdivision (n)(2):
“ In the trial of the action, the fact
that a motion for summary adjudication is granted as to one or more causes of
action, affirmative defenses, claims for damages, or issues of duty within the
action shall not bar any cause of action, affirmative defense, claim for
damages, or issue of duty as to which summary adjudication was either not
sought or denied.” Morover, there is
nothing in the 12-12-18 Order requiring Plaintiffs to abandon the allegations
in ¶¶15-22 and 24, as alleged in connection with the breach of contract claim.
The breach of contract claim was not adjudicated and the 12-12-18 adjudication
of the fraud claim does not amount to an order precluding Plaintiffs from
alleging the representations in other causes of action.
The Court’s adjudication of the fraud claim on 12-12-18 should be limited
to the precise issue ruled upon, i.e. whether the undisputed evidence before it
in connection with Defendants’ MSA of the 4th through 7th
c/a for fraud negated the elements of intent and justifiable detrimental
reliance. There is no basis to stretch
the 12-12-18 Order to encompass an issue that was not adjudicated by the Court,
i.e. whether the undisputed evidence before it negated the element of damages
flowing from the alleged breaches in the 1st c/a for breach of
Moreover, the Court note the recognized elements of a breach of contract
claim are: (1) a contract between the parties, (2) plaintiff's performance (or
excuse from performance), (3) defendant's breach, and (4) damages flowing
therefrom. See Mammoth Lakes Land
Acquisition, LLC v. Town of Mammoth Lakes (2010) 191 Cal.App.4th 435, 463
(Mammoth Lakes ); 4 Witkin, Cal. Proc., supra, Pleading, § 515. But,
in reliance on Kazerouni v. De Satnick (1991) 228 Cal.App.3d 87, 1 Defendants
argue reliance is an element of a breach of warranty claim. The Court agrees
with Defendants that Kazerouni has not been overruled. But
the Court notes the case authority cited by Kazerouni
was based on the language of former Civil
Code section 1732 which expressly applied to “[A]ny affirmation of fact or any
promise by the seller relating to the
goods…” . See, Grinnell v. Charles Pfizer & Co. (1969) 274 Cal.App.2d 424, 438
n.; 10. (“Civil Code section 1732And section which was repealed and re-enacted,
with changes, as Commercial Code section 2313, effective January 1, 1965.”)
the Court’s 12-12-18 Order did not require Plaintiffs to strip the complaint of
all references to Defendants’ duties of disclosure, representations and
warranties under Article 5 of the APA. As such, the inclusion of ¶¶15-22 and 24 does not violate the 12-12-18
order and those paragraphs are not subject to a CCP §436(b) Motion to Strike. The
motion to strike ¶¶15-22 and 24 per CCP §436(b) is DENIED
II. Whether the
alleged breaches are barred by the contractual limitations period is not
apparent from the face of the TAC or judicially noticeable documents
also argue that the claims based on violations of the Article 5
“Representations and Warranties” are barred by the contractual limitations
period under Article 10.07. Article
10.07 provides as follows:
and warranties in this Agreement (other than the representations set forth in Sections
5.07 (Taxes) and the Fundamental Representations) shall survive the Closing for
a period of 15 months after the Closing Date. The representations and warranties set forth in Section 5.07 (Taxes)
shall survive the Closing for the applicable statute of limitations period. The Fundamental Representations, other than
Section 5.07 (Taxes) which shall survive for the applicable statute of
limitations, shall survive the Closing for a period of 36 months after the Closing
Date…If any claim for indemnification or other recovery is timely asserted
under Sections 10.01 or 10.02, the Indemnified Party shall have the right to
bring a Proceeding as with respect to such claim within 15 months after first
giving the Indemnifying Party notice thereof, but may not bring any such
Proceeding thereafter.” See TAC,
Ex. A, pp. 35-36, Article 10.07.
Defendants acknowledge, Plaintiffs do not allege that they submitted a claim to
Defendants within the 15-month survival period after the Closing Date. See Motion, 14:24-26. Nor are Plaintiffs required to allege
timeliness as an element of their breach of contract claims. From the allegations of the complaint Defendant’s
must “clearly and affirmatively from the face of the complaint” show the
Article 5 allegations are time barred. Woods
v. Fox Broadcasting Sub., Inc. (2005) 129 Cal.App.4th 344, 351)(affirmative
defenses may not be resolved on demurrer unless the defense appears clearly and
affirmatively from the face of the complaint).
Defendants fail to demonstrate that Plaintiffs’ Article 5
claims as alleged in ¶¶15-22 and 24 are time barred from the face of the
complaint and the judicially noticed documents. As such, the request that they be stricken as irrelevant, false or
improper matter under CCP §436 is DENIED.
damages allegations at ¶¶22 and 24 are not irrelevant, false or improper
move to strike ¶¶22 and 24, which allege that Plaintiff has been damaged in the
approximate amount of “$9,250,938.58 plus at least $525,000…to correct
regulatory noncompliance.” Defendants
argue there is a cap on recoverable damages under Section 10.05(b) of the APA
and there is no basis alleged for any multiplier on damages.
can successfully recover this amount is an issue to be litigated and it is not
clear from the face of the complaint that they are clearly and affirmatively
barred from recovering the amounts sought. Even if Plaintiffs cannot ultimately collect the full amount of their
alleged damages, the actual amount of damages they allegedly suffered is a
factual allegation that must be accepted as true on a motion to strike. As such, the motion to strike ¶¶22 and 24 as
irrelevant, false or improper is DENIED.
COUNSEL ARE STRONGY URGED TO APPEAR REMOTELY THROUGH