This case was last updated from Los Angeles County Superior Courts on 09/10/2020 at 00:22:57 (UTC).

AZOOCA INC VS FOXLINK INTERNATIONAL INC

Case Summary

On 05/12/2017 AZOOCA INC filed a Contract - Other Contract lawsuit against FOXLINK INTERNATIONAL INC. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judge overseeing this case is ELIZABETH ALLEN WHITE. The case status is Disposed - Dismissed.
Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****0992

  • Filing Date:

    05/12/2017

  • Case Status:

    Disposed - Dismissed

  • Case Type:

    Contract - Other Contract

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judge

ELIZABETH ALLEN WHITE

 

Party Details

Plaintiff and Petitioner

AZOOCA INC.

Respondents and Defendants

DOES 1-20

FOXLINK INTERNATIONAL INC.

Attorney/Law Firm Details

Plaintiff and Petitioner Attorney

BAHADORI CHINI LLP

 

Court Documents

NOTICE OF CASE MANAGEMENT CONFERENCE

6/1/2017: NOTICE OF CASE MANAGEMENT CONFERENCE

NOTICE OF CASE MANAGEMENT CONFERENCE

5/22/2017: NOTICE OF CASE MANAGEMENT CONFERENCE

SUMMONS -

5/12/2017: SUMMONS -

COMPLAINT FOR: 1. BREACH OF CONTRACT; ETC

5/12/2017: COMPLAINT FOR: 1. BREACH OF CONTRACT; ETC

Minute Order -

10/23/2017: Minute Order -

Minute Order -

11/22/2017: Minute Order -

 

Docket Entries

  • 12/18/2017
  • DocketAnswer; Filed by Defendant/Respondent

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  • 11/22/2017
  • Docketat 08:30 AM in Department 48; (OSC RE Dismissal; Order of Dismissal) -

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  • 11/22/2017
  • DocketMinute Order

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  • 10/23/2017
  • Docketat 08:30 AM in Department 48; Case Management Conference (Conference-Case Management; No Appearance) -

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  • 10/23/2017
  • DocketMinute Order

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  • 06/01/2017
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 06/01/2017
  • DocketNOTICE OF CASE MANAGEMENT CONFERENCE

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  • 05/22/2017
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 05/22/2017
  • DocketNOTICE OF CASE MANAGEMENT CONFERENCE

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  • 05/12/2017
  • DocketSUMMONS

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  • 05/12/2017
  • DocketCOMPLAINT FOR: 1. BREACH OF CONTRACT; ETC

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  • 05/12/2017
  • DocketComplaint; Filed by Azooca, Inc. (Plaintiff)

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Tentative Rulings

Case Number: ****0992 Hearing Date: July 1, 2022 Dept: 48

[TENTATIVE] ORDER RE: MOTION FOR LEAVE TO ASSERT ADDITIONAL CAUSES OF ACTION IN THE FIRST AMENDED COMPLAINT

On May 12, 2017, Plaintiff Azooca, Inc. filed this action against Defendant Foxlink International, Inc. alleging breach of contract, fraud, and negligent interference with prospective economic benefit. On November 22, 2017, the Court dismissed the action under Code of Civil Procedure section 583.410. On January 6, 2021, the Court granted Plaintiff’s motion to set aside the dismissal. On March 11, 2021, Defendant filed an answer and cross-complaint.

At the March 9, 2021 case management conference, the Court scheduled a jury trial for March 28, 2022. On March 11, 2022, the Court continued the trial to August 22, 2022.

On May 25, 2022, the Court granted Defendant’s motion for judgment on the pleadings with 10 days’ leave to amend. The Court also continued the trial to October 24, 2022. On June 6, 2022, Plaintiff filed a first amended complaint (“FAC”) and a motion for leave to assert additional causes of action in the FAC.

The Court may, in its discretion and after notice to the adverse party, allow an amendment to any pleading. (Code Civ. Proc., 473, subd. (a)(1).) A motion to amend a pleading must include a copy of the proposed amendment or amended pleading which must be serially numbered to differentiate it from previous pleadings or amendments and must state what allegations in the previous pleading are proposed to be deleted or added, if any, and where, by page, paragraph, and line number, the allegations are located. (California Rules of Court, rule 3.1324(a).) The motion shall also be accompanied by a declaration attesting to the effect of the amendment, why the amendment is necessary and proper, when the facts giving rise to the amended allegations were discovered, and why the request for amendment was not made earlier. (California Rules of Court, rule 3.1324(b).) “ ‘[E]ven if a good amendment is proposed in proper form, unwarranted delay in presenting it may—of itself—be a valid reason for denial.’ ” (Record v. Reason (1999) 73 Cal.App.4th 472, 486, quoting Roemer v. Retail Credit Co. (1975) 44 Cal.App.3d 926, 939-940.)

The filed FAC contains additional causes of action for money had and received and negligent misrepresentation. Plaintiff identifies the locations of the amendments, and it provides a redline copy of the complaint showing the amendments. (Motion at pp. 6-7; Kashfian Decl. 9 & Ex. 6.) Plaintiff contends “[t]hese alternative theories of liability are based on the same facts as the original causes of action asserted in the Complaint and/or are based on the additional facts alleged in the [Proposed] FAC pursuant to the Court’s instructions in previously granting leave to amend.” (Motion at p. 10.) Counsel declares the alternative theories of liability were discovered after being given leave to amend the complaint and upon review of the additional facts alleged by Plaintiff. (Kashfian Decl. 10.)

Defendant argues Plaintiff unjustifiably and inexcusably delayed in seeking amendment. (Opposition at pp. 4-6.) Defendant also argues it will be prejudiced by the amendment. (Id. at pp. 6-7.) The new cause of action for money had and received arises from money paid for development of the iZooca Bridge pursuant to Plaintiff’s specifications, based on the same general allegations as the breach of contract cause of action. (See FAC 16-21, 26-27.) The new cause of action for negligent misrepresentation arises from the same representations by Thomas Lin in April 2014 that form the basis for the fraud cause of action. (See FAC 30, 39.) Plaintiff therefore knew the facts supporting its new causes of action when it filed this action in May 2017, and it sought to add alternative theories of liability only after the Court granted Defendant’s motion for judgment on the pleadings. However, as Defendant acknowledges (see Opposition at pp. 4-5, 7), the new claims are simply different legal theories based on the same basic facts as the original complaint. The parties have already engaged in discovery, and Plaintiff has produced “thousands of pages of documentary evidence relating to factual allegations . . . , some of which could support Plaintiff’s new causes of action.” (Id. at p. 7.) Trial is not until October 24, 2022, so there is sufficient time for Defendant to “cull through those thousands of pages to ascertain which documents relate to the new causes of action” and to address the new legal theories. (Ibid.)

The proposed amendment will not greatly enlarge the issues in this case, and no prejudice is shown. Accordingly, the motion is GRANTED. Plaintiff is to file and serve the FAC with additional causes of action within five days of the date of this order.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are STRONGLY encouraged to appear remotely.



Case Number: ****0992 Hearing Date: May 25, 2022 Dept: 48

[TENTATIVE] ORDER RE: MOTION FOR JUDGMENT ON THE PLEADINGS

On May 12, 2017, Plaintiff Azooca, Inc. filed this action against Defendant Foxlink International, Inc. alleging breach of contract, fraud, and negligent interference with prospective economic benefit. On November 22, 2017, the Court dismissed the action under Code of Civil Procedure section 583.410. On January 6, 2021, the Court granted Plaintiff’s motion to set aside the dismissal. On March 11, 2021, Defendant filed an answer and cross-complaint.

At the March 9, 2021 case management conference, the Court scheduled a jury trial for March 28, 2022. On March 11, 2022, the Court continued the trial to August 22, 2022.

On March 24, 2022, Defendant filed a motion for judgment on the pleadings. On May 9, 2022, the Court denied Plaintiff’s ex parte application for an order striking the motion for judgment on the pleadings, stating that Plaintiff could make its argument in its opposition to the motion.

Plaintiff argues the motion is procedurally deficient and untimely. (Opposition at pp. 8-11.) A motion for judgment on the pleadings must be brought before the later of the Court entering a pretrial conference order or 30 days from the date the action is initially set for trial. (Code Civ. Proc., 438, subd. (e).) Before filing a motion for judgment on the pleadings, the moving party must meet and confer with the opposing party in person or by telephone. (Code Civ. Proc., 439, subd. (a).) Trial was initially set for March 28, 2022, so any motion for judgment on the pleadings was due by February 26, 2022. Additionally, Defendant did not meet and confer with Plaintiff before filing the motion. (Wang Decl., Ex. A at 4.)

To circumvent these statutory procedural deficiencies, Defendant purports to bring a common law motion for judgment on the pleadings. (Motion at pp. 6-7; Reply at p. 4.) Defendant bases its motion on Code of Civil Procedure section 430.80, subdivision (a), which provides that an objection that a pleading does not state facts sufficient to constitute a cause of action is not waived by the defendant’s failure to object by demurrer. Defendant cites Cordova v. 21st Century Ins. Co. (2005) 129 Cal.App.4th 89 to support its common law motion. (Motion at pp. 6-7.) In Cordova, the trial court treated a motion for summary judgment as a nonstatutory, common law motion for judgment on the pleadings because it was based on a legal argument regarding the statute of limitations rather than a factual dispute. (Cordova, supra, 129 Cal.App.4th at p. 109.) The Court of Appeal explained, “It has long been the rule in this state that when a defendant’s motion for summary judgment depends on the untenability of the plaintiff’s case as pleaded and not on extrinsic evidence negating an element or proving an affirmative defense it may be treated as a common law motion for judgment on the pleadings.” (Ibid.) That is not what Defendant purports to do here.

Defendant also cites Stoops v. Abbassi (2002) 100 Cal.App.4th 644, 650 (Stoops) for the proposition that “‘[a] motion for judgment on the pleadings may be made at any time either prior to the trial or at the trial itself.’” (Motion at p. 7; Reply at p. 5.) However, the quoted part of Stoops merely quotes and cites Ion Equipment Corp. v. Nelson (1980) 110 Cal.App.3d 868, 877 in passing when reciting the standard of review for a motion for judgment on the pleadings. There is no indication that the motion in Stoops was a common law motion for judgment on the pleadings, and “ ‘ “cases are not authority for propositions not considered.” ’ ” (B.B. v. County of Los Angeles (2020) 10 Cal.5th 1, 11.)

Defendant also cites Sofias v. Bank of America (1985) 172 Cal.App.3d 583, 586, which discusses a motion for judgment on the pleadings as “a nonstatutory but well-established procedure with the purpose and effect of a general demurrer.” (Motion at p. 7.) It does not support the existence of a common law motion for judgment on the pleadings after the enactment of a statutory procedure.

In reply, Defendant cites an additional case, Tarin v. Lind (2020) 47 Cal.App.5th 395, 402, where the trial court construed a motion in limine as a nonstatutory motion for judgment on the pleadings. (Reply at p. 6.)

As Plaintiff observes, Code of Civil Procedure section 438, which created a statutory basis for motions for judgment on the pleadings, was enacted in 1994. (See Opposition at p. 10.) Defendant has “cited authority in support of nonstatutory motions for judgment on the pleadings which either pre-dates 1994, relies on case authority that pre-dates the enactment of section 438, or simply does not address the issue.” (Tung v. Chicago Title Company (2021) 63 Cal.App.5th 734, 757.) Although the Tung court did not decide the issue of whether nonstatutory motions for judgment on the pleadings are still viable post-section 438, it cautioned that “trial judges should think twice before becoming ensnared in addressing them on the merits on the eve of trial where, especially like here, the operative pleading has never been challenged before.” (Id. at pp. 758-759.)

None of Defendant’s cited cases supports a defendant bringing a common law, nonstatutory motion for judgment on the pleadings to avoid the procedural requirements of a section 438 motion. Rather, those cases decided after the enactment of section 438 dealt with motions for summary judgment or motions in limine construed as motions for judgment on the pleadings, raising legal arguments about the validity of the causes of action. In Cordova, the motion for summary judgment “did not rest on the premise [the plaintiff] could not establish a factual basis for asserting equitable estoppel against [the defendant], but on the grounds her complaint showed on its face it was not filed within the one-year period provided” by statute. (Cordova, supra, 129 Cal.App.4th at p. 109.) In Tarin, the court concluded that the challenged cause of action could not state a claim because only a minor child could bring a claim for intentional interference in parental consortium and there was no case authority allowing an adult child to do so. (Tarin, supra, 47 Cal.App.5th at p. 402.)

Here, Defendant’s motion attacks not the legal basis for the causes of action, but the sufficiency of the pleaded facts. Defendant argues the first cause of action for breach of contract is insufficiently pleaded due to Plaintiff’s failure to attach a copy of the contract. (Motion at pp. 8-10.) Similarly, Defendant argues the second cause of action for fraud is insufficiently pleaded because Plaintiff does not allege facts with specificity, and the third cause of action for negligent interference with prospective economic benefit is vague and conclusory. (Id. at pp. 11-15.) These perceived deficiencies might be curable by amendment.

However, all that being said, section 438, subdivision (e) allows a motion under that section at a different time if “the court otherwise permits.” Here, a motion for summary judgment is set for hearing on September 22, 2022, and so the trial date needs to be continued to after that date. Therefore, there will be sufficient time for Plaintiff to file an amended complaint, and an amended complaint is necessary for the reasons discussed below.

A motion for judgment on the pleadings is the functional equivalent to a general demurrer. (Lance Camper Mfg. Corp. v. Republic Indemnity Co. of Am. (1996) 44 Cal.App.4th 194, 198.) Like demurrers, motions for judgment on the pleadings challenge the legal sufficiency of the allegations, not their veracity. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) The Court “must accept as true all material facts properly pleaded, but does not consider conclusions of law or fact, opinions, speculation, or allegations contrary to law or facts that are judicially noticed.” (Stevenson Real Estate Services, Inc. v. CB Richard Ellis Real Estate Services, Inc. (2006) 138 Cal.App.4th 1215, 1219-1220.)

A. First Cause of Action – Breach of Contract

The standard elements of a claim for breach of contract are (1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff therefrom. (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178.) “A written contract may be pleaded by its terms—set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference—or by its legal effect.” (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489.) To plead a contract by its legal effect, a plaintiff must “allege the substance of its relevant terms. This is more difficult, for it requires a careful analysis of the instrument, comprehensiveness in statement, and avoidance of legal conclusions.” (Ibid.)

Defendant argues the first cause of action for breach of contract does not sufficiently plead the legal effect of the contract. The complaint alleges “Plaintiff contracted with Defendant as outlined in the Development Agreement attached hereto as Exhibit 1” (Complaint 17), but no Exhibit 1 is attached.

Plaintiff argues Defendant is judicially estopped from challenging the perceived vagueness of the contract. (Opposition at p. 12.) Judicial estoppel applies when “(1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake.” (Jackson v. County of Los Angeles (1997) 60 Cal.App.4th 171, 183.) Judicial estoppel can be applied only against a party that has taken positions so inconsistent that one necessarily excludes the other. (Bell v. Wells Fargo Bank, N.A. (1998) 62 Cal.App.4th 1382, 1387.) “The inconsistent position generally must be factual in nature.” (ABF Capital Corp. v. Berglass (2005) 130 Cal.App.4th 825, 832.) Plaintiff contends Defendant has taken inconsistent positions regarding its understanding of the factual basis for Plaintiff’s cause of action, in particular in connection with Defendant’s cross-complaint. (Opposition at p. 13.)

The Court is not convinced with this argument. Defendant’s prior statements do not show an understanding of the contents of the missing Exhibit 1, and the Court cannot tell from the pleadings or the parties’ statement what Exhibit 1 is.

Judgment on the pleadings is granted as to the first cause of action so that Plaintiff can attach Exhibit 1 to a first amended complaint.

B. Second Cause of Action – Fraud

The elements of fraud are “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Charnay v. Cobert (2006) 145 Cal.App.4th 170, 184.) Fraud must be pleaded with specificity. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) In an action against a corporation, the plaintiff 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.” (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.)

The complaint alleges “Defendant misrepresented to Plaintiff that it has the capability to develop the subject product according to Plaintiff’s specification, which were known to Defendant at the time it entered into the Agreement with Plaintiff.” (Complaint 25.) The complaint does not specifically allege what Defendant said and when Defendant made the allegedly false statement. It also does not allege the identity of the person who made the representation or that person’s authority to speak on behalf of Defendant. It does not specifically allege how Plaintiff was damaged as a result of the alleged fraud.

Judgment on the pleadings is granted as to the second cause of action.

C. Third Cause of Action – Negligent Interference

“The elements of a claim of interference with economic advantage and 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 [or negligent] 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.” (Crown Imports, LLC v. Superior Court (2014) 223 Cal.App.4th 1395, 1404, quotation marks and citations omitted.) “[C]ourts require an additional element, that the alleged interference must have been wrongful by some measure beyond the fact of the interference itself.” (Ibid.) “For an act to be sufficiently independently wrongful, it must be ‘unlawful, that is, . . . it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.’” (Ibid.) “The independently wrongful act must be the act of interference itself, but such act must itself be independently wrongful.” (Ibid.)

Defendant argues the complaint’s allegations are vague and conclusory. (Motion at p. 14.) Defendant also argues the only wrongful conduct is breach of contract, and Plaintiff cannot recover in tort for a breach of contract. (Ibid.) Plaintiff alleges that “[b]y breaching the development agreement with Plaintiff, Defendant set off a chain reaction of events that resulted in Plaintiff’s loss of economic advantage and the benefit of a negotiated contract.” (Complaint 32.) The complaint alleges non-speculative economic benefit based on “defined order numbers and contract amounts that Plaintiff would have benefitted from, had Defendant not breached the Agreement and interfered with Plaintiff's contract with third party retailers and/or distributors.” (Id. at 33.)

“[A]s our Supreme Court has said time and again, an actor’s breach of contract, without more, is not ‘wrongful conduct’ capable of supporting a tort [citations], including the tort of intentional interference with a prospective economic advantage [citation].” (Drink Tank Ventures LLC v. Real Soda in Real Bottles, Ltd. (2021) 71 Cal.App.5th 528, 532-533.) Because Plaintiff alleges only a breach of contract and no other wrongful conduct, judgment on the pleadings is granted.

D. Conclusion

The motion for judgment on the pleadings is GRANTED with 10 days’ leave to amend. The Court continues the trial to October 24, 2022 at 10:00 a.m. and the Final Status Conference to October 10, 2022 at 8:30 a.m.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are STRONGLY encouraged to appear remotely.



Case Number: ****0992 Hearing Date: May 11, 2022 Dept: 48

[TENTATIVE] ORDER RE MOTION TO COMPEL FURTHER RESPONSES.

Defendant Foxlink served a third set of requests for admission containing 78 RFAs on Plaintiff Azooca Inc. on January 25, 2022. Defendant also served form interrogatory No. 17.1. Plaintiff objected and did not serve substantive responses. On April 13, 2022, Defendant filed a motion to compel further responses to the requests for documents. Defendant argues the objections are boilerplate and Plaintiff should provide verified substantive responses.

Plaintiff complains Defendant did not meet and confer. The parties should have participated in an IDC, but at this point, this case needs to be tried and discovery needs to be concluded. The Court will dispense with the IDC so that the parties can finish discovery and start preparing for trial. Plaintiff argues the motion is moot because it served supplement responses on April 27, 2022. (Ramirez Decl., 35.)

As an initial matter, Defendant should have brought two motions to compel further responses, one for the RFAs and one for the form interrogatory.

Because Plaintiff has now served the responses, the motion to compel further responses is moot. If Defendant believes the responses are inadequate, the parties are to meet and confer on the phone before Defendant files another discovery motion. Due to the impending trial date, the Court will not require an IDC. However, the parties should be aware that in the event of any future motions, the Court will require code-compliant responses and a good faith attempt to resolve the disputes on the phone. Failure to comply may result in sanctions.

Both sides are not conducting discovery efficiently and productively. Counsel should have had a phone conversation to meet and confer about the discovery including allegations that the requests are overbroad and whether the requests can be narrowed.

The motion to compel is MOOT. The request for sanctions is DENIED.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are STRONGLY encouraged to appear remotely.



Case Number: ****0992 Hearing Date: May 5, 2022 Dept: 48

ORDER RE MOTION TO COMPEL FURTHER RESPONSES.

Defendant Foxlink served a second set of requests for documents on Plaintiff Azooca Inc. on January 19, 2022. Plaintiff objected and did not serve substantive responses. On April 6, 2022, Defendant filed a motion to compel further responses to the requests for documents. Defendant argues the objections are boilerplate and Plaintiff should provide verified substantive responses.

Plaintiff argues defense counsel made improper comments at a deposition. An opposition to a motion to compel responses to written discovery is not the place to complain about deposition conduct. Plaintiff complains Defendant did not meet and confer. The parties should have participated in an IDC, but at this point, this case needs to be tried and discovery needs to be concluded. The Court will dispense with the IDC so that the parties can finish discovery and start preparing for trial. Plaintiff argues the motion is moot because it served supplement responses on April 21, 2022. (Ramirez Decl., 10, Ex. 6.)

Because Plaintiff has now served the responses, the motion to compel further responses is moot. If Defendant believes the responses are inadequate, the parties are to meet and confer on the phone before Defendant files another discovery motion. Due to the impending trial date, the Court will not require an IDC. However, the parties should be aware that in the event of any future motions, the Court will require code-compliant responses and a good faith attempt to resolve the disputes on the phone. Failure to comply may result in sanctions.

Both sides are not conducting discovery efficiently and productively. Counsel should have had a phone conversation to meet and confer about the discovery including allegations that the requests are overbroad and whether the requests can be narrowed.

The motion to compel is MOOT. The request for sanctions is DENIED.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are STRONGLY encouraged to appear remotely.



Case Number: ****0992 Hearing Date: April 29, 2022 Dept: 48

[TENTATIVE] ORDER RE MOTION TO COMPEL FURTHER RESPONSES.

Defendant Foxlink served a second set and a third set of special interrogatories on Plaintiff Azooca Inc. on January 13, 2022 and January 14, 2022. Plaintiff objected and did not serve substantive responses. On April 4, 2022, Defendant filed a motion to compel further responses to both sets of special interrogatories. Defendant should have filed two motions, one for each set of discovery. Accordingly, Defendant is to pay an additional filing fee.

Defendant argues the objections are boilerplate and Plaintiff should provide verified substantive responses.

Plaintiff argues defense counsel made improper comments at a deposition. An opposition to a motion to compel responses to written discovery is not the place to complain about deposition conduct. Plaintiff complains Defendant did not meet and confer. The parties should have participated in an IDC, but at this point, this case needs to be tried and discovery needs to be concluded. The Court will dispense with the IDC so that the parties can finish discovery and start preparing for trial.

Plaintiff argues it sent an email to defense counsel on March 18, 2022 stating it would provide supplemental responses, and instead of waiting for the responses, Defendant filed this motion. However, the correspondence shows Plaintiff stated it would “attempt to provide verified supplemental responses to certain requests” by March 28, 2022. (Ramirez Decl., Ex. 6.) Defendant agreed to an extension to March 28, 2022. (Ramirez Decl., Ex. 7.) Plaintiff did not serve verified responses by March 28, 2022. Instead, it was not until April 15, 2022 that Plaintiff served the responses. (Ramirez Decl., 12, 13.)

Because Plaintiff has now served the responses, the motion to compel further responses is moot. If Defendant believes the responses are inadequate, the parties are to meet and confer on the phone before Defendant files another discovery motion. Due to the impending trial date, the Court will not require an IDC. However, the parties should be aware that in the event of any future motions, the Court will require code-compliant responses and a good faith attempt to resolve the disputes on the phone. Failure to comply may result in sanctions.

However, the request for sanctions is not moot. The record shows that the filing of this motion finally spurred Plaintiff to serve responses. If Defendant had not filed the motion, the Court is not confident that Plaintiff would have served the responses. Also, at least some of Plaintiff’s objections were not well-taken. Here are a few examples. Plaintiff objected that Interrogatory No. 76 asking for the identity of the corporate officers called for private information. Usually the California Secretary of State records for a corporation require the corporation to list officers. This is not the type of information protected by the right to privacy. Plaintiff objected to interrogatories about ownership of the company based on privacy and relevance. However, Defendant has alter ego allegations that make ownership of the company relevant. Interrogatories asked if various people had been employed by the company, to which Plaintiff again asserted a privacy objection. The identity of a person’s employer generally is not protected by any privacy right. Several interrogatories ask about the existence of a contract, which is an issue in this case. Plaintiff’s objected that the term “describe with particularity” is vague. That is not well taken. This is a common phrase in interrogatories.

The request for sanctions is GRANTED. Subject to Defendant paying an additional filing fee, sanctions in the amount of $2,820 are awarded against Plaintiff Azooca Inc. to be paid within 20 days of the date of this order.

The motion to compel is MOOT.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are STRONGLY encouraged to appear remotely.



b'

Case Number: ****0992 Hearing Date: November 3, 2021 Dept: 48

[TENTATIVE] ORDER RE: CROSS-DEFENDANTS’ DEMURRER

On March 11, 2021, Foxlink International, Inc. (“Foxlink”) filed a cross-complaint against Azooca, Inc. (“Azooca”) and Yu Zheng (collectively, “Cross-Defendants”), alleging (1) breach of written contract, (2) money had and received, (3) indebitatus assumpsit, (4) account stated, and (5) open book account. On July 7, 2021, the Court sustained Cross-Defendants’ demurrer to all causes of action. The Court overruled the demurrer as to alter ego allegations and statute of limitations.

On July 22, 2021, Foxlink filed a first amended cross-complaint (“FACC”), alleging (1) breach of contract, (2) indebitatus assumpsit, and (3) account stated. On August 23, 2021, Cross-Defendants filed this demurrer. A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context, accepting the alleged facts as true. (Nolte v. Cedars-Sinai Medical Center (2015) 236 Cal.App.4th 1401, 1406.)

A. First and Second Causes of Action

Cross-Defendants argue that the first and second causes of action fail because Foxlink did not specifically plead the terms of the alleged contract. (Demurrer at pp. 6, 9.) “A written contract may be pleaded by its terms—set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference—or by its legal effect.” (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489.) To plead a contract by its legal effect, a plaintiff must “allege the substance of its relevant terms. This is more difficult, for it requires a careful analysis of the instrument, comprehensiveness in statement, and avoidance of legal conclusions.” (Ibid.)

Like the Cross-Complaint, the FACC alleges that Foxlink “provided a quotation for its non-recurring engineering (‘NRE’) service charge of about $450,000.00 (the ‘NRE Charge’), of which $200,000 was to be amortized into the order of first 400,000 units and the remaining balance of $250,000 was to be paid pursuant to a payment schedule.” (FACC ¶ 10.) Cross-Defendants agreed to the proposal by issuing five purchase orders and making five installment payments. (Id. at ¶ 11.) Cross-Defendants also issued two purchase orders for Foxlink to manufacturer 20,000 units, and Azooca later modified these purchase orders. (Id. at ¶ 12.) Cross-Defendants failed to take delivery of the products and did not make scheduled payments for the purchase orders or NRE Charge. (Id. at ¶¶ 13-14.)

Foxlink now attaches copies of purchase orders issued from Azooca to Foxlink and alleges that they contain the contract terms that were breached. (FACC ¶¶ 10, 13.) Cross-Defendants argue the numbers do not add up and the purchase orders do not support Foxlink’s claims. The proper interpretation of the purchase orders and whether they support Foxlink’s breach of contract claim cannot be decided on this demurrer.

Therefore the demurrer is OVERRULED to the first and second causes of action.

B. Third Cause of Action – Account Stated

To succeed in an action for account stated, a plaintiff must show (1) that defendant owed plaintiff money from previous financial transactions; (2) that plaintiff and defendant agreed, by words or conduct, that the amount claimed was the correct amount; (3) that defendant promised, by words or conduct, to pay the stated amount; (4) that defendant has not paid all of the amount owed; and (5) the amount of money defendant owes to plaintiff. (CACI 373; see Zinn v. Fred R. Bright Co. (1969) 271 Cal.App.2d 597, 600.) “‘[A]n element essential to render the account stated is that it receive the assent of both parties, but the assent of the party sought to be charged may be implied from his conduct.’ [Citation.]” (Professional Collection Consultants v. Lauron (2017) 8 Cal.App.5th 958, 968.) “For example, ‘[w]hen a statement is rendered to a debtor and no reply is made in a reasonable time, the law implies an agreement that the account is correct as rendered.’ [Citation.]” (Ibid.)

The Cross-Complaint alleges that an account was stated in writing wherein “it was agreed that” Cross-Defendants owed $821,808.80. (FACC ¶ 24.) It appears that Foxlink bases the agreement on its April 8, 2016 demand letter regarding “Notice and Demand for Immediate Payment,” in which Foxlink demanded immediate payment of $821,808.80, including $320,948.00 for unpaid NRE Charges and $500,860.80 due for the purchase orders. (FACC ¶ 15 & Ex. C; see Opposition at pp. 9-10.) Foxlink alleges Cross-Defendants failed to make any payment, did not dispute the sums requested, and never responded at all. (FACC ¶ 15.) The demand letter states, “If Foxlink does not receive payment in full of the first installment by March 31, 2016, Foxlink may choose to proceed to collections on this matter.” (FACC, Ex. C.) Although the demanded payment date is eight days before the date of the demand letter, the reasonableness of Cross-Defendants’ failure to pay, dispute, or respond to the letter is a factual matter outside the scope of demurrer.

The demurrer is OVERRULED.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are STRONGLY encouraged to appear remotely.

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b'

Case Number: ****0992 Hearing Date: July 7, 2021 Dept: 48

[TENTATIVE] ORDER RE: CROSS-DEFENDANTS’ DEMURRER AND MOTION TO STRIKE

On May 12, 2017, Azooca, Inc. (“Azooca”) filed this action against Foxlink International, Inc. (“Foxlink”) On November 22, 2017, the Court dismissed the action for failure to file a proof of service. On January 6, 2021, the Court granted Azooca’s motion to set aside/vacate dismissal.

On March 11, 2021, Foxlink filed a cross-complaint against Azooca and Yu Zheng (collectively, “Cross-Defendants”). On May 17, 2021, Cross-Defendants filed a demurrer and motion to strike. Cross-Defendants’ request for judicial notice of the Complaint is granted.

DEMURRER

Cross-Defendants contend that the Cross-Complaint insufficiently pleads alter ego, is barred by the statute of limitations, and fails to allege sufficient facts (except for the third cause of action). A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context, accepting the alleged facts as true. (Nolte v. Cedars-Sinai Medical Center (2015) 236 Cal.App.4th 1401, 1406.)

A. Alter Ego

Cross-Defendants argue that the alter ego allegations are conclusory and insufficient. (Demurrer at p. 8.) “In California, two conditions must be met before the alter ego doctrine will be invoked. First, there must be such a unity of interest and ownership between the corporation and its equitable owner that the separate personalities of the corporation and the shareholder do not in reality exist. Second, there must be an inequitable result if the acts in question are treated as those of the corporation alone.” (Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 538.)

The Cross-Complaint alleges that Azooca and Zheng are the alter ego of each other, and there is “a unity of interest and ownership between [them] such that any separateness between them has ceased to exist and that recognition of the privilege of separate existence would promote injustice.” (Cross-Complaint ¶ 6.) The Cross-Complaint further alleges that adherence to the fiction of their separate existences “would permit an abuse of the corporate privilege and would sanction a fraud due to fraud, defalcation, undercapitalization, lack of observance of corporate formalities, unity of interest and ownership, abuse of corporate privilege, undercapitalization, transfer of corporate assets without adequate consideration, domination, intermingling of assets, use of corporation as mere shell and instrumentality, and/or improper distribution of corporate assets.” (Ibid.) At this pleading stage, these allegations are sufficient to allege Zheng’s involvement on an alter ego theory. The demurrer is therefore overruled on this ground.

B. Statute of Limitations

Cross-Defendants argue that the Cross-Complaint is barred by the statute of limitations. The statute of limitations for an action based on a written contract is four years. (Code Civ., Proc., ; 337.) “‘In order for the bar of the statute of limitations to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows that the action may be barred.’” (Geneva Towers Ltd. Partnership v. City of San Francisco (2003) 29 Cal.4th 769, 781.)

The Cross-Complaint alleges that in November 2014, Cross-Defendants asked Foxlink to provide certain engineering and manufacturing services for their interactive electronic toy. (Cross-Complaint ¶ 10.) Foxlink provided a quotation of about $450,000 for its non-recurring engineering (“NRE”) service charge, of which $200,000 was to be amortized into the order of first 400,000 units and the remaining balance of $250,000 was to be paid pursuant to a payment schedule. (Ibid.) Cross-Defendants agreed by issuing five purchase orders between December 2014 and May 2015 and making five NRE installment payments of $20,000. (Id. at ¶ 11.) “From and after June of 2015,” Cross-Defendants breached their obligation to make scheduled NRE payments totaling $320,948.00. (Id. at ¶ 14.) Additionally, in May 2015, Cross-Defendants issued two purchase orders for Foxlink to manufacture 20,000 units of the product. (Id. at ¶ 12.) On September 23, 2015, Foxlink made the first 11,520 units of the product available for shipment. (Id. at ¶ 13.) Cross-Defendants breached the agreement on September 23, 2015 by refusing to take delivery and refusing to make payment of $500,860.80 under the purchase orders. (Ibid.)

Absent tolling, claims arising from Cross-Defendants’ September 23, 2015 refusal of delivery and failure to pay for the products expired on September 23, 2019. Foxlink did not file its Cross-Complaint until March 11, 2021.

Foxlink alleges that its Cross-Complaint is compulsory and relates back to the original May 12, 2017 Complaint, which alleges that Foxlink breached a contract by failing to produce a product that met Azooca’s specifications. (Cross-Complaint ¶ 7; Complaint ¶¶ 18-19.) Cross-Defendants argue that the pleadings allege different transactions or occurrences: (1) Foxlink’s failure to perform under a November 2014 development agreement; and (2) Cross-Defendants’ refusal to take delivery of units pursuant to May 2015 purchase orders and failure to pay for engineering services after June 2015. (Demurrer at pp. 9-10.)

Under California Supreme Court precedent, “a defendant’s cross-complaint against the plaintiff, irrespective of whether it is related to the matters asserted in the complaint, is entitled to the benefit of the tolling doctrine,” and “the tolling doctrine is applied broadly to both compulsory and permissive cross-complaints.” (ZF Micro Devices, Inc. v. TAT Capital Partners, Ltd. (2016) 5 Cal.App.5th 69, 92.) Accordingly, whether compulsory or permissive, Foxlink’s causes of action were tolled beginning May 12, 2017, when the Complaint was filed. However, the Court dismissed this action on November 22, 2017.

Foxlink provides no relevant authority as to why it is entitled to additional tolling after the Complaint’s original dismissal or why the Cross-Complaint should relate back under these circumstances. Foxlink argues only that the Cross-Complaint is compulsory, so the relation-back doctrine applies. Assuming the Cross-Complaint is compulsory, it would relate back to the Complaint’s filing date for purposes of tolling the statute of limitations. (See Weil & Brown, Cal. Prac. Guide: Civil Procedure Before Trial (The Rutter Group June 2021 Update) ¶ 6:592; see also Trindade v. Superior Court (1973) 29 Cal.App.3d 857, 859-860.) But this doctrine is a tolling doctrine; it does not resurrect claims that expired when the original complaint is no longer pending. Plaintiff’s Complaint was dismissed on November 22, 2017, well within Foxlink’s limitations period, thus ending any tolling period. At most, the statute of limitations would have been tolled for the 6.5 months between May 12, 2017 and November 22, 2017, extending the statute of limitations period to April 2020.

Because Cross-Complainant did not file the Cross-Complaint until many months after April 2020, any claim arising from Cross-Defendants’ September 23, 2015 refusal of delivery and failure to pay for the products in breach of the parties’ agreement is time-barred. The demurrer is sustained as to such claims with leave to amend.

Foxlink also alleges that “[f]rom and after June of 2015,” Cross-Defendants breached their obligation to make scheduled payments in the total of $320,948.00, contributing to damages totaling $821,808.80. (Cross-Complaint ¶¶ 14, 16, 22, 27, 29-30, 32-33.) As the Cross-Complaint alleges only that this breach occurred “after June of 2015” and does not allege the payment schedule, the face of the complaint does not show that these allegations are time-barred. Therefore, the demurrer is overruled as to these claims.

Cross-Defendants also argue that Foxlink improperly brings Zheng into this action, as the relation-back doctrine does not apply to third parties and thus any causes of action against her are time-barred. (Demurrer at pp. 10-11.) For the reasons previously discussed, the demurrer is overruled on this ground.

C. First Cause of Action – Breach of Written Contract

Cross-Defendants argue that Foxlink did not specifically plead the terms of the alleged contract. (Demurrer at p. 11.) The standard elements of a claim for breach of contract are (1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff therefrom. (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178.) “A written contract may be pleaded by its terms—set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference—or by its legal effect.” (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489.) To plead a contract by its legal effect, a plaintiff must “allege the substance of its relevant terms. This is more difficult, for it requires a careful analysis of the instrument, comprehensiveness in statement, and avoidance of legal conclusions.” (Ibid.)

The Cross-Complaint alleges that Foxlink “provided a quotation for its non-recurring engineering (‘NRE’) service charge of about $450,000.00 (the ‘NRE Charge’), of which $200,000 was to be amortized into the order of first 400,000 units and the remaining balance of $250,000 was to be paid pursuant to a payment schedule.” (Cross-Complaint ¶ 10.) Cross-Defendants agreed to the proposal by issuing five purchase orders and making five installment payments. (Id. at ¶ 11.) Cross-Defendants also issued two purchase orders for Foxlink to manufacturer 20,000 units, and Azooca later modified these purchase orders. (Id. at ¶ 12.) These allegations do not attach the documents that allegedly form the contracts, nor do they sufficiently plead the substance of the contracts’ relevant terms.

Foxlink contends that its pleading has now been “enhanced” by the Bill of Particulars it served on Cross-Defendants, such that this cause of action now satisfies the “fair notice requirement.” (Opposition at p. 7.) The Bill of Particulars lists only dates; descriptions of goods, services, materials, or consideration; and prices or charges for the third, fourth, and fifth causes of action. (Opposition, Ex. A.) It too does not contain the verbatim contents of the contracts’ relevant terms.

Accordingly, the demurrer to the first cause of action is sustained with leave to amend.

The remaining causes of action are the common counts of money had and received, indebitatus assumpsit, account stated, and open book account. All of these causes of action are based on the amount allegedly owed to Foxlink under the agreements alleged in the first cause of action. “When a common count is used as an alternative way of seeking the same recovery demanded in a specific cause of action, and is based on the same facts, the common count is demurrable if the cause of action is demurrable.” (McBride v. Boughton (2004) 123 Cal.App.4th 379, 394.) Accordingly, the demurrer to the second through fifth causes of action is sustained with leave to amend for the same reason as the first cause of action.

D. Second Cause of Action – Money Had and Received

“A cause of action for money had and received is stated if it is alleged the defendant ‘is indebted to the plaintiff in a certain sum “for money had and received by the defendant for the use of the plaintiff.”’ [Citation.]” (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460.) “[A] failure of performance generally gives rise to a claim for restitution of money had and received only when there has been a total breach—i.e., total failure of consideration or repudiation.” (Brown v. Grimes (2011) 192 Cal.App.4th 265, 281.)

Foxlink alleges that Cross-Defendants are indebted to it in the sum of $821,808.80 for money had and received, and Cross-Defendants have not made payment. (Cross-Complaint ¶¶ 20, 22.) But Foxlink does not allege that Cross-Defendants received money for Foxlink’s use. Rather, Foxlink argues it is owed this money due to Cross-Defendants’ failure to perform under the contracts. (Opposition at p. 8.) As Foxlink alleges that Cross-Defendants made some payments (Cross-Complaint ¶ 11; see id. at ¶ 19), the complaint does not allege a total failure of consideration or repudiation.

Accordingly, the demurrer to the second cause of action is sustained with leave to amend.

E. Fourth Cause of Action – Account Stated

To succeed in an action for account stated, a plaintiff must show (1) that defendant owed plaintiff money from previous financial transactions; (2) that plaintiff and defendant agreed, by words or conduct, that the amount claimed was the correct amount; (3) that defendant promised, by words or conduct, to pay the stated amount; (4) that defendant has not paid all of the amount owed; and (5) the amount of money defendant owes to plaintiff. (CACI 373; see Zinn v. Fred R. Bright Co. (1969) 271 Cal.App.2d 597, 600.) “‘[A]n element essential to render the account stated is that it receive the assent of both parties, but the assent of the party sought to be charged may be implied from his conduct.’ [Citation.]” (Professional Collection Consultants v. Lauron (2017) 8 Cal.App.5th 958, 968.) “For example, ‘[w]hen a statement is rendered to a debtor and no reply is made in a reasonable time, the law implies an agreement that the account is correct as rendered.’ [Citation.]” (Ibid.)

The Cross-Complaint alleges that an account was stated in writing wherein “it was agreed that” Cross-Defendants owed $821,808.80. (Cross-Complaint ¶ 29.) But part of the basis of this amount is the $500,860.80 allegedly owed under purchase orders, for which Cross-Defendants “refused to make payment.” (Cross Complaint ¶13; see id. at ¶¶ 16, 28.) Therefore, the Cross-Complaint is inherently contradictory about the agreed-to amount.

Accordingly, the demurrer to the fourth cause of action is sustained with leave to amend.

F. Fifth Cause of Action – Open Book Account

Cross-Defendants demur to the fifth cause of action on the grounds that it is based on express contracts. (Demurrer at p. 13.) “An express contract, which defines the duties and liabilities of the parties, whether it be oral or written, is not, as a rule, an open account.” (Durkin v. Durkin (1955) 133 Cal.App.2d 283, 290.) The $821,808.80 allegedly owed under the open book account is the same amounts allegedly owed under the written contracts. (Cross-Complaint ¶¶ 13-16; see id. at ¶ 31-32.)

Accordingly, the demurrer to the fifth cause of action is sustained with leave to amend.

MOTION TO STRIKE

The court may, upon a motion or at any time in its discretion: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (Code Civ. Proc., ; 436, subds. (a)-(b).)

Cross-Defendants move to strike Foxlink’s request for attorney fees. The Cross-Complaint seeks attorney fees under Code of Civil Procedure section 337a and Civil Code section 1717.5. Section 1717.5 provides for reasonable attorney fees of no more than $1,200 based on a book account. Cross-Defendant argues that the first cause of action does not allege a book account but rather a written contract.

Because the first cause of action does not allege a book account, the request for attorney fees in connection with the first cause of action is stricken.

CONCLUSION

The demurrer is SUSTAINED with 15 days’ leave to amend. The motion to strike is GRANTED in part with regard to the request for attorney fees in connection with the first cause of action for breach of a written contract.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are STRONGLY encouraged to appear remotely.

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Case Number: ****0992    Hearing Date: January 06, 2021    Dept: 48

[TENTATIVE] ORDER RE: MOTION TO SET ASIDE AND VACATE DISMISSAL

On May 12, 2017, Plaintiff Azooca, Inc. (“Plaintiff”) filed this action against Defendant Foxlink International, Inc. (“Defendant”) alleging breach of contract, fraud, and negligent interference with prospective economic benefit. No one appeared for the case management conference on October 23, 2017, so the Court set an order to show cause re: dismissal and/or sanctions for Plaintiff’s failure to appear and failure to file a proof of service of the summons and complaint. At the November 22, 2017 OSC, Plaintiff again failed to appear or file a proof of service. The Court therefore dismissed the action. On October 19, 2020, Plaintiff filed this motion to set aside and vacate the order of dismissal.

Defendant’s objections to the Declaration of Yu “Brian” Zhang are overruled.

To vacate an order of dismissal due to extrinsic mistake, the defaulted party must (1) show that it has a meritorious case, (2) articulate a satisfactory excuse for not presenting a defense to the original action, and (3) demonstrate that it was diligent in seeking to set aside the default once it had been discovered. (Aldrich v. San Fernando Valley Lumber Co. (1985) 170 Cal.App.3d 725, 738 (Aldrich).)

First, Plaintiff contends that it has a meritorious case. The complaint alleges that in November 2014, Plaintiff and Defendant entered into a development agreement under which Defendant was to develop a toy portal for Plaintiff, but Defendant failed to perform. (Complaint ¶¶ 9, 11.) As a result, Plaintiff was unable to fulfill a substantial contract with a large retailer, costing Plaintiff several million dollars and affecting Plaintiff’s relationship with large third-party sellers, viability, and business opportunities. (Id. at ¶¶ 20-22.) Plaintiff’s Principal and Chief Executive Officer, Yu “Brian” Zheng, declares that he has personal knowledge of the matters, and he was actively involved in the development of the products that Plaintiff contracted with Defendant to develop. (Zheng Decl. ¶¶ 1-2.) Plaintiff paid Defendant over $400,000 to build a system to interact with Android and iOS systems using an app and to build hardware to offer an interactive system. (Id. at ¶ 2.) In 2016, Defendant informed Plaintiff that the system could not communicate with Android devices, and accordingly, Plaintiff was unable to fulfill its product orders. (Id. at ¶ 3.) Plaintiff lost replenishment orders, business from retailers, and its investments into the technology in an amount over $4 million. (Ibid.) Defendant argues that Plaintiff’s failure to attach the purported agreement to the complaint renders the pleading insufficient. (Opposition at pp. 2-3.) However, Plaintiff’s declaration based on personal knowledge is sufficient to show a meritorious case. (See Aldrich, supra, 170 Cal.App.3d at p. 738.)

Second, Plaintiff articulated a satisfactory excuse for not proceeding with the original action. Zheng declares that former counsel Amid T. Bahadori did not inform him about the case management conference or the OSC, nor did he inform him that the case had been dismissed. (Zheng Decl. ¶ 5.) Through early 2020, Zheng periodically communicated with Bahadori about this case via email, phone, and text. (Id. at ¶ 6; Zheng Suppl. Decl. ¶ 4 & Ex. 4.) In October 2018, Bahadori sent Zheng a declaration purportedly to support a motion for summary judgment. (Zheng Decl. ¶ 6; id. at Ex. 1; Zheng Suppl. Decl. ¶¶ 2-3 & Exs. 2-3.) In August 2020, Bahadori stopped communicating with Zheng and did not respond to phone calls, emails, or text messages. (Zheng Decl. ¶ 7.) On August 19, 2020, Zheng emailed Bahadori requesting an update on the case, and he stated that if he did not receive a response by August 21, he would file a complaint with the State Bar. (Id. at ¶ 7; Zheng Suppl. Decl. ¶ 4 & Ex. 4.) Zheng did not hear from Bahadori, and he filed a State Bar complaint. (Zheng Decl. ¶ 7; Zheng Suppl. Decl. ¶ 5 & Ex. 5.) Zheng then retained Plaintiff’s current counsel in September 2020, and on September 9, 2020, he learned that this case had been dismissed in November 2017. (Zheng Decl. ¶ 8; Carter Decl. ¶ 3.)

Defendant argues that Plaintiff’s only remedy should be in an action for malpractice because Plaintiff’s former counsel is still in good standing with the State Bar with no record of discipline or investigation. (Opposition at pp. 3-4.) However, Plaintiff filed his complaint with the State Bar only on October 15, 2020. (Zheng Suppl. Decl., Ex. 5.) An absence of prior discipline or investigation does not preclude misconduct in this case. Moreover, “in a case where the client is relatively free from negligence, and the attorney’s neglect is of an extreme degree amounting to positive misconduct, the attorney’s conduct is said to obliterate the existence of the attorney-client relationship.” (Aldrich, supra, 170 Cal.App.3d at p. 738.) “Where a client is unknowingly deprived of effective representation by counsel the client will not be charged with responsibility for misconduct if the client acts with due diligence in moving for relief after discovering the attorney’s neglect and if the other side will not be prejudiced by the delay.” (Id. at p. 739.) Defendant argues that it has suffered prejudice from the delay because it was not served with the lawsuit before dismissal, and it has been deprived of the ability to preserve documents, witness statements, and testimony. (Opposition at p. 6.) However, Defendant filed an answer on December 18, 2017, and it provides no evidence or specific arguments regarding prejudice or what evidence it may have lost due to delay.

Finally, Plaintiff has shown diligence in seeking relief after discovering the default. After Plaintiff retained its current counsel on September 1, 2020, it learned on September 9, 2020 that this case had been dismissed. (Zheng Decl. ¶ 8; Carter Decl. ¶ 3.) Plaintiff’s current counsel attempted to contact Bahadori several times between September 4-18, 2020, but Bahadori did not respond. (Carter Suppl. Decl. ¶¶ 4-7.) Plaintiff filed this motion on October 19, 2020. Defendant speculates about the intended use of the October 2018 declaration that Bahadori sent Plaintiff (Opposition at p. 5), but it does not provide any argument or evidence that Plaintiff was not diligent in filing this motion after discovering the dismissal.

Accordingly, the motion to vacate dismissal is GRANTED. The Court sets a Case Management Conference for March 9, 2021 at 8:30 a.m.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. Parties intending to appear are STRONGLY encouraged to appear remotely.



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