This case was last updated from Los Angeles County Superior Courts on 07/19/2020 at 00:24:57 (UTC).

KATIE O CONNELL MARSH VS GAUMONT TELEVISION USA LLC

Case Summary

On 01/26/2018 KATIE O CONNELL MARSH filed a Contract - Other Contract lawsuit against GAUMONT TELEVISION USA LLC. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are MICHAEL JOHNSON and HOLLY J. FUJIE. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****1790

  • Filing Date:

    01/26/2018

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Other Contract

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

MICHAEL JOHNSON

HOLLY J. FUJIE

 

Party Details

Plaintiffs, Petitioners and Cross Defendants

O'CONNELL KATIE MARSH

MARSH KATIE O'CONNELL

Plaintiff and Petitioner

O'CONNELL KATIE MARSH

Defendant, Cross Plaintiff and Appellant

GAUMONT TELEVISION USA LLC FKA GAUMONT INTERNATIONAL TELEVISION LLC

Defendants, Respondents and Not Classified By Court

GAUMONT TELEVISION USA LLC

GAUMONT INTERNATIONAL TELEVISION LLC

DOES 1 TO 20

GAUMONT TELEVISION USA LLC FKA GAUMONT INTERNATIONAL TELEVISION LLC

GAUMONT SA

MARSH KATIE O'CONNELL

L.A. DEPOSITIONS INC.

L.A. DEPOSITIONS INC

HICKS KRISTINE M.

Plaintiffs, Respondents and Cross Defendants

MARSH KATIE O'CONNELL

PLATFORM ONE MEDIA LLC

Attorney/Law Firm Details

Plaintiff and Petitioner Attorneys

BERLINSKI JOHN V.

WREDE CHRISTIAN K

SAUNDERS DANIEL A

Defendant and Respondent Attorneys

PLONSKER MICHAEL J. ESQ.

CURRY JAMES EUGENE

PLONSKER MICHAEL JAY ESQ.

PLONSKER MICHAEL JAY

CURRY JAMES

BRILL LAURA W

Plaintiff and Cross Defendant Attorney

WREDE CHRISTIAN K

 

Court Documents

NOTICE OF DEMURRER AND DEMURRER TO DEFENDANT'S ANSWER; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF; AND DECLARATION OF MEET AND CONFER

4/10/2018: NOTICE OF DEMURRER AND DEMURRER TO DEFENDANT'S ANSWER; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF; AND DECLARATION OF MEET AND CONFER

DEFENDANT GAUMONT TELEVISION USA, LLC?S ANSWER TO UNVERIFIED COMPLAINT

3/26/2018: DEFENDANT GAUMONT TELEVISION USA, LLC?S ANSWER TO UNVERIFIED COMPLAINT

NOTICE OF CASE REASSIGNMENT AND OF ORDER FOR PLAINTIFF TO GIVE NOTICE

2/15/2018: NOTICE OF CASE REASSIGNMENT AND OF ORDER FOR PLAINTIFF TO GIVE NOTICE

ORDER TO SHOW CAUSE HEARING AND CASE MANAGEMENT CONFERENCE

2/26/2018: ORDER TO SHOW CAUSE HEARING AND CASE MANAGEMENT CONFERENCE

DEFENDANT GAUMONT TELEVISION USA, LLC?S ANSWER TO UNVERIFIED COMPLAINT

3/26/2018: DEFENDANT GAUMONT TELEVISION USA, LLC?S ANSWER TO UNVERIFIED COMPLAINT

Stipulation and Order - STIPULATION AND ORDER STIPULATION AND PROPOSED ORDER RE CONTINUANCE OF DATE TO RESPOND TO AMENDED COMPLAINT AND CROSS COMPLAINT

8/22/2019: Stipulation and Order - STIPULATION AND ORDER STIPULATION AND PROPOSED ORDER RE CONTINUANCE OF DATE TO RESPOND TO AMENDED COMPLAINT AND CROSS COMPLAINT

Notice - NOTICE OF FILING OF VERIFICATION TO SECOND AMENDED CROSS-COMPLAINT

12/3/2019: Notice - NOTICE OF FILING OF VERIFICATION TO SECOND AMENDED CROSS-COMPLAINT

Request for Judicial Notice

1/2/2020: Request for Judicial Notice

Separate Statement

2/7/2020: Separate Statement

Order - ORDER RE RPT. & RECOMMENDATIONS OF DISCOVERY REFEREE NO. 6

2/19/2020: Order - ORDER RE RPT. & RECOMMENDATIONS OF DISCOVERY REFEREE NO. 6

Minute Order - MINUTE ORDER (HEARING ON DEMURRER - WITH MOTION TO STRIKE (CCP 430.10))

2/24/2020: Minute Order - MINUTE ORDER (HEARING ON DEMURRER - WITH MOTION TO STRIKE (CCP 430.10))

Motion for Order - MOTION FOR ORDER GRANTING GAUMONT TELEVISION USA, LLC

3/10/2020: Motion for Order - MOTION FOR ORDER GRANTING GAUMONT TELEVISION USA, LLC

Declaration - DECLARATION OF PLAINTIFF KATIE O'CONNELL MARSH IN SUPPORT OF MEMORANDUM IN OPPOSITION TO MOTION BY DEFENDANTS GAUMONT TELEVISION USA, LLC AND GAUMONT SA FOR SUMMARY ADJUDICATION

4/8/2020: Declaration - DECLARATION OF PLAINTIFF KATIE O'CONNELL MARSH IN SUPPORT OF MEMORANDUM IN OPPOSITION TO MOTION BY DEFENDANTS GAUMONT TELEVISION USA, LLC AND GAUMONT SA FOR SUMMARY ADJUDICATION

Separate Statement

4/8/2020: Separate Statement

Notice Re: Continuance of Hearing and Order

6/25/2020: Notice Re: Continuance of Hearing and Order

Request for Judicial Notice

6/26/2020: Request for Judicial Notice

Order - ORDER PROPOSED ORDER GRANTING DEFENDANT'S EX PARTE APPLICATION FOR AN ORDER TO SEAL ALL PAPERS RELATED TO DEFENDANT'S MOTION FOR LEAVE TO FILE A CROSS-COMPLAINT AND THIS EX PARTE APPLICATION

6/10/2019: Order - ORDER PROPOSED ORDER GRANTING DEFENDANT'S EX PARTE APPLICATION FOR AN ORDER TO SEAL ALL PAPERS RELATED TO DEFENDANT'S MOTION FOR LEAVE TO FILE A CROSS-COMPLAINT AND THIS EX PARTE APPLICATION

293 More Documents Available

 

Docket Entries

  • 07/12/2021
  • Hearing07/12/2021 at 09:30 AM in Department 56 at 111 North Hill Street, Los Angeles, CA 90012; Jury Trial

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  • 06/28/2021
  • Hearing06/28/2021 at 08:30 AM in Department 56 at 111 North Hill Street, Los Angeles, CA 90012; Final Status Conference

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  • 09/04/2020
  • Hearing09/04/2020 at 08:30 AM in Department 56 at 111 North Hill Street, Los Angeles, CA 90012; Hearing on Motion for Summary Judgment

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  • 08/07/2020
  • Hearing08/07/2020 at 08:30 AM in Department 56 at 111 North Hill Street, Los Angeles, CA 90012; Hearing on Motion for Summary Adjudication

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  • 08/07/2020
  • Hearing08/07/2020 at 08:30 AM in Department 56 at 111 North Hill Street, Los Angeles, CA 90012; Hearing on Motion for Summary Adjudication

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  • 07/30/2020
  • Hearing07/30/2020 at 13:30 PM in Department 82 at 111 North Hill Street, Los Angeles, CA 90012; Hearing on Application for Writ of Possession (CCP 512.010)

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  • 07/16/2020
  • Docketat 08:30 AM in Department 56; Trial Setting Conference - Held

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  • 07/16/2020
  • Docketat 08:30 AM in Department 56; Hearing on Motion for Summary Judgment (or, in the Alternative, Summary Adjudication) - Not Held - Advanced and Continued - by Court

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  • 07/16/2020
  • Docketat 08:30 AM in Department 56; Hearing on Motion for Leave to Amend (Motion for Leave to Amend (Motion for Leave to File Third Amended Cross-Complaint)) - Held - Motion Denied

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  • 07/16/2020
  • Docketat 08:30 AM in Department 56; Hearing on Motion for Summary Adjudication (on 1. Defendant Gaumont's 13th and 15th Affirmative Defenses to Plaintiff's SAC; 2. Plaintiff's 2nd and 3rd Causes of Action in the SAC Against Defendant Gaumont; 3. Plaintiff's 7th and 8th Causes in the SAC Againt Gaumont SA; and 4. Defendant Gaumont's) - Not Held - Continued - Court's Motion

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387 More Docket Entries
  • 01/26/2018
  • DocketEx-Parte Application; Filed by Plaintiff/Petitioner

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  • 01/26/2018
  • DocketAMENDED COMPLAINT FOR: 1. DECLARATORY RELIEF; ETC

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  • 01/26/2018
  • DocketOrder; Filed by Plaintiff/Petitioner

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  • 01/26/2018
  • DocketAMENDED SUMMONS

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  • 01/26/2018
  • DocketORDER GRANTING PLAINTIFF'S EX PARTE APPLICATION FOR AN ORDER TO SEAL THE COMPLAINT AND PLAINTIFF'S EX PARTE APPLICATION

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  • 01/26/2018
  • DocketComplaint; Filed by Katie O'Connell Marsh (Plaintiff)

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  • 01/26/2018
  • DocketMinute order entered: 2018-01-26 00:00:00; Filed by Clerk

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  • 01/26/2018
  • DocketPLAINTIFF KATIE O'CONNELL MARSH'S EX PARTE APPLICATION FOR AN ORDER TO SEAL THE COMPLAINT AND PLAINTIFF'S EX PARTE APPLICATION

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  • 01/26/2018
  • DocketDeclaration; Filed by Plaintiff/Petitioner

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  • 01/16/2018
  • DocketEX PARTE APPLICATION OF PLAINTIFF FOR AN ORDER TO SEAL THE COMPLAINT AND PLAINTIFF EX PARTE APPLICATION

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Tentative Rulings

Case Number: BC691790    Hearing Date: August 14, 2020    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

KATIE O’CONNELL MARSH, etc.,

Plaintiff,

vs.

GAUMONT TELEVISION USA, LLC f.k.a. GAUMONT INTERNATIONAL TELEVISION, LLC, et al.,

Defendants.

AND RELATED CROSS-ACTION

CASE NO.: BC691790

[TENTATIVE] ORDER RE: MOTIONS FOR SUMMARY ADJUDICATION

Date: August 14, 2020

Time: 8:30 a.m.

Dept. 56

MOVING PARTIES : Defendants Gaumont Television USA, LLC (“Gaumont”) and Gaumont SA (“Gaumont SA”)

RESPONDING PARTY: Plaintiff Katie O’Connell Marsh

The Court has considered the moving, opposition, and reply papers.

BACKGROUND

Plaintiff filed a First Amended Complaint (“FAC”) against Defendants alleging causes of action for: (1) declaratory relief; (2) breach of contract; (3) breach of the implied covenant of good faith and fair dealing; (4) fraudulent inducement; (5) fraudulent concealment; (6) unfair competition in violation of California Business and Professions Code, Section 17200 et seq.; (7) intentional interference with contract; (8) inducing breach of contract; and (9) accounting.

On October 24, 2019, the Court ruled on Gaumont SA’s demurrer to the seventh and eighth causes of action in the FAC. According to the Court’s October 24, 2019 minute order, Gaumont SA contended that the seventh and eighth causes of action in the FAC were barred by the applicable statute of limitations. The Court overruled Gaumont SA’s demurrer to the seventh and eighth causes of action in the FAC because it was not clear from the face of the complaint when the statute of limitations began to run with respect to the seventh and eighth causes of action in the FAC.

On November 1, 2019, Plaintiff filed the operative Second Amended Complaint (“SAC”) against Defendants alleging causes of action for: (1) declaratory relief; (2) breach of contract; (3) breach of the implied covenant of good faith and fair dealing; (4) fraudulent inducement; (5) fraudulent concealment; (6) unfair competition in violation of California Business and Professions Code, Section 17200 et seq.; (7) intentional interference with contract; (8) inducing breach of contract; and (9) accounting[1]. Plaintiff’s SAC arises from her tenure as a television executive with Gaumont and the alleged failure of Defendants to pay Plaintiff her share of contracted Modified Adjusted Gross Receipts (“MAGR”).

On December 2, 2019, Gaumont filed the operative Second Amended Cross-Complaint (“SAXC”) against Plaintiff arising from the alleged employment and termination of Plaintiff, alleging causes of action for: (1) breach of contract; (2) conversion; (3) possession of personal property; (4) declaratory relief pursuant to California Code of Civil Procedure, Section 1060; (5) fraudulent inducement; and (6) fraudulent concealment.

On January 17, 2020, Defendants filed their answer to the SAC asserting the following affirmative defenses: (1) failure to state a claim; (2) breach of confidentiality; (3) statute of limitations; (4) unclean hands; (5) estoppel; (6) waiver; (7) failure to mitigate damages; (8) no damages; (9) good faith; (10) consent, authorization or ratification; (11) laches; (12) acquiescence; (13) breach of contract; (14) no proximate cause/intervening and superseding cause; (15) excuse; (16) bad faith; (17) equitable estoppel; (18) fraud; (19) manager’s privilege; (20) owner’s privilege; (21) reservation of rights; (22) ratification; (23) safe harbor; (24) lack of business practice; (25) setoff/offset/recoupment; and (26) adequate remedy at law.

Defendants’ thirteenth affirmative defense, which is titled Breach of Contract, states that “[t]he SAC, and each purported cause of action alleged therein, is barred by Plaintiff’s own material breaches of the contracts described in the SAC in this action.” (Answer at 5:11-15.)

Defendants’ fifteenth affirmative defense, which is titled Excuse, states that “Defendants’ alleged actions and/or alleged failures to act were excused, in whole or in part, by acts and omissions of Plaintiff and/or third parties.” (Answer at 5:21-25.)

Pertinent Allegations of the SAC

The SAC relevantly alleges that: (1) in 2015, Plaintiff was terminated and Gaumont would not tell her the reasons for her termination at the time (SAC at ¶ 6); (2) Gaumont and Gaumont SA’s Chief Executive Officer, Sidonie Dumas, has testified in this lawsuit that Plaintiff was terminated because she had an insufficient number of television projects in development at the time (Id.); (3) in negotiating her termination agreement (the “Termination Agreement”), Plaintiff placed an emphasis on her contingent compensation by securing an MAGR provision expressly stating that she would be entitled to 3% of all gross receipts derived from each of the four television series she had developed for Gaumont (Id. at ¶ 7); (4) Gaumont failed to hold up its end of the deal and has, instead, resorted to shifty calculations that bear no resemblance to the terms of the MAGR provision in Plaintiff’s Termination Agreement (Id.); and (5) Gaumont SA, which now shares a CEO and a Vice-CEO with Gaumont, intentionally interfered with Plaintiff’s rights under the Termination Agreement by directing and participating in breaches of contract and the implied covenant of good faith and fair dealing otherwise to enrich itself at the expense of Plaintiff. (Id. at ¶ 14.)

In connection with the seventh cause of action in the SAC, Plaintiff alleges that: (1) herself and Gaumont were parties to the Termination Agreement which is a valid and binding contract (Id. at ¶ 96); (2) at all relevant times, Gaumont SA was aware of the Termination Agreement and its terms (Id. at ¶ 97); (3) Gaumont SA collaborated and/or participated with Gaumont in the misconduct because Gaumont SA knew it would benefit from such misconduct (Id. at ¶ 98); (4) Gaumont SA benefitted by directing and conspiring with Gaumont to use improper accounting practices to minimize the gross receipts credited to MAGR participants like Plaintiff (Id.); and (5) Gaumont SA intended to disrupt or prevent the performance by Gaumont of the Termination Agreement and did disrupt or prevent that performance. (Id. at ¶ 99.)

In connection with the eighth cause of action in the SAC, Plaintiff alleges that: (1) Plaintiff and Gaumont were parties to the Termination Agreement which is a valid and binding contract (Id. at ¶ 104); (2) Gaumont SA was aware of the Termination Agreement and its terms (Id. at ¶ 105); (3) Gaumont SA intended to influence, direct, or cause Gaumont to commit the breaches because Moving Defendant knew it would benefit from such breaches (Id. at ¶ 107); (4) Gaumont SA benefitted by directing and conspiring with Gaumont to use improper accounting practices to minimize the gross receipts credited to MAGR participants like Plaintiff and overstate the deductions permitted under the MAGR Bonus provision of her Termination Agreement thereby enriching itself and its other subsidiaries at the expense of those participants (Id.); and (5) Gaumont SA caused Gaumont to breach the Termination Agreement (Id. at ¶ 108.)

Defendants’ Motion for Summary Adjudication

On February 7, 2020, Defendants filed a motion for summary adjudication on: (1) Defendants’ thirteenth and fifteenth affirmative defenses; (2) the second and third causes of action in the SAC against Gaumont on the grounds alleged in Defendants’ thirteenth and fifteenth affirmative defenses; (3) the seventh and eighth causes of action in the SAC against Gaumont on the grounds that if summary adjudication is granted in favor of Gaumont with respect to the second and third causes of action in the SAC then Plaintiff will not have suffered any damage; (4) the fourth cause of action in the SAXC due to Plaintiff’s material breaches of the contract, Gaumont is excused from further performance due to Plaintiff and Plaintiff is obligated to return to Gaumont money already paid to her under the contract in the amount of $603,066.94; and (5) the third cause of action in the SAXC[2] for possession of personal property seeking the return of documents Plaintiff wrongfully took from Gaumont.

Defendants assert that: (1) Plaintiff’s material breaches of the Termination Agreement excuses Gaumont of any obligation to pay Plaintiff the MAGR Bonus or any other compensation and requires return of all payments made to Plaintiff under the Termination Agreement; (2) as a result, Plaintiff cannot recover on her claims against Gaumont SA; and (3) Plaintiff should be ordered to return Gaumont’s property (the “Property”)[3].

Plaintiff opposes Defendants’ motion for summary adjudication and contends that: (1) Defendants have failed to present undisputed evidence in support of each element of their affirmative defenses of excuse and breach of contract; (2) Defendants do not attempt to show that the contractual obligations at issue here are dependent and the evidence establishes that they are not; (3) Defendants have failed to establish as a matter of law that Plaintiff’s breach was material; and (4) because Defendants are not entitled to summary adjudication as to their thirteenth and fifteenth affirmative defenses, their arguments for summary adjudication as to Plaintiff’s claims and Gaumont’s cross-claims fail.

Defendants’ request for summary adjudication as to the second, third, seventh, and eighth causes of action in the SAC, as well as the third and fourth causes of action in the SAXC, is premised on the Court’s granting summary adjudication in Defendants’ favor as to Defendants’ thirteenth and fifteenth affirmative defenses. (Motion at 16:26-17:8.) The crux of Defendants’ motion is that because Plaintiff materially breached the Termination Agreement by failing to return the Property of Gaumont, Gaumont is excused from performance of the Termination Agreement, and Plaintiff has to provide restitution of all monies pursuant thereto.

Defendants assert that the question central to their motion is whether Plaintiff’s failure to return the Property constitutes a material breach of the Termination Agreement thereby excusing Gaumont’s performance. (Motion at 12:9-19.)

Plaintiff’s Cross-Motion for Summary Adjudication of Defendants’ Affirmative Defenses

On April 17, 2020, Plaintiff filed a cross-motion for summary adjudication of Defendants’ affirmative defenses. Plaintiff’s cross-motion makes the same arguments as those raised in Plaintiff’s opposition to Defendants’ motion for summary adjudication. Plaintiff’s cross-motion also cites some of the same cases that are cited in her opposition to Defendants’ motion for summary adjudication.

Plaintiff seeks summary adjudication as to: (1) Defendants’ thirteenth affirmative defense of Breach of Contract because the confidentiality obligation in the Termination Agreement with Gaumont is independent of Gaumont’s obligations to pay Plaintiff under that agreement such that failure to perform one obligation does not excuse performance of the other; and (2) Defendants’ fifteenth affirmative defense of Excuse because the confidentiality obligation in the Termination Agreement with Gaumont is independent of Gaumont’s obligations to pay Plaintiff under that agreement such that failure to perform one obligation does not excuse performance of the other. Plaintiff asserts that there is no triable issue of material fact as to any material fact and Defendants’ affirmative defenses fail as a matter of law.

Plaintiff asserts that: (1) Defendants’ affirmative defenses fail as a matter of law because the contractual obligations at issue are dependent; (2) the express language of the Termination Agreement shows that the obligations at issue are independent; and (3) the timing of the parties’ obligations further supports a finding of independent obligations.

Defendants oppose Plaintiff’s cross-motion for summary adjudication on the grounds that: (1) the factors that courts consider in determining materiality support Gaumont’s affirmative defenses; and (2) the parties’ obligations are dependent because the confidentiality provision was essential to the Termination Agreement. Defendants’ opposition makes the same arguments that were raised in their moving and reply papers with respect to their motion for summary adjudication; moreover, Defendants cite some of the same cases cited in connection with their motion for summary adjudication.

The Court will address the respective motions for summary adjudication in this one ruling. The Court will begin with an assessment of Defendants’ motion for summary adjudication as that motion was filed first in time.

Separate Statements of the Parties

California Rules of Court, Rule 3.1350(f)(2) indicates that in opposition to the moving party’s separate statement “the response must unequivocally state whether the fact is disputed or undisputed. An opposing party who contends that a fact is disputed must state, on the right side of the page directly opposite the fact in dispute, the nature of the dispute and describe the evidence that supports the position that the fact is disputed.” California Rules of Court, Rule 3.1350(f)(2) provides that “[c]itation to the evidence in support of each material fact must include reference to the exhibit, title, page, and line numbers.”

There are numerous instances in Plaintiff’s separate statement in opposition to Defendants’ motion where Plaintiff indicates that: (1) a fact is undisputed but refers the Court to her evidentiary objection because such fact is alleged to be irrelevant; or (2) a fact is disputed yet makes no citation to any evidence in support of such disputed fact. In instances where Plaintiff disputes a fact but deems it irrelevant or fails to cite any evidence, the Court finds that Plaintiff did not comply with the mandate of California Rules of Court, Rule 3.1350(f)(2).

California Rules of Court, Rule 3.1350(b) provides that “[i]f summary adjudication is sought, whether separately or as an alternative to the motion for summary judgment, the specific cause of action, affirmative defense, claims for damages, or issues of duty must be stated specifically in the notice of motion and repeated, verbatim, in the separate statement of undisputed material facts.” “Separate statements are required not to satisfy a sadistic urge to torment lawyers, but rather to afford due process to opposing parties and to permit trial courts to expeditiously review complex motions for [summary adjudication] and summary judgment to determine quickly and efficiently whether material facts are disputed.” (United Community Church v. Garcin (1991) 231 Cal.App.3d 327, 335.)

Although not raised by Plaintiff in connection with the opposition, the Court finds that Defendants’ separate statement in support of their motion for summary adjudication is also defective. Defendants’ separate statement in support of their motion for summary adjudication is not compliant with California Rules of Court, Rule 3.1350(b) because their separate statement does not address the thirteenth or fifteenth affirmative defenses as separate issues. Although the Court can deny Defendants’ motion solely on this ground, the Court will address the merits of Defendants’ motion for summary adjudication.

JUDICIAL NOTICE

“[W]hile courts are free to take judicial notice of the existence of each document in a court file, including the truth of results reached, they may not take judicial notice of the truth of hearsay statements in decisions and court files.” (Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882.) “Courts may not take judicial notice of allegations in affidavits [and] declarations . . . in court records because such matters are reasonably subject to dispute and therefore require formal proof.” (Id.)

The Court GRANTS Defendants’ request for judicial notice in connection with their reply brief with respect to their motion for summary adjudication.

The Court GRANTS Plaintiff’s request for judicial notice in connection with Plaintiff’s opposition to Defendants’ motion for summary adjudication.

The Court GRANTS Plaintiff’s requests for judicial notice in connection with Plaintiff’s cross-motion for summary adjudication.

The Court GRANTS Defendants’ request for judicial notice in connection with their opposition to the cross-motion of Plaintiff for summary adjudication.

EVIDENTIARY OBJECTIONS IN CONNECTION WITH DEFENDANTS’ MOTION

The Court SUSTAINS Plaintiff’s evidentiary objections numbers 2, 4, 5, 6, and 8 to the declaration of Tim Stephen (“Stephen”). The Court OVERRULES Plaintiff’s evidentiary objections numbers 1, 3, and 7 to the declaration of Stephen.

The Court SUSTAINS Plaintiff’s evidentiary objections numbers 9, 10, 13, and 14 to the declaration of Michael Plonsker (“Plonsker”). The Court OVERRULES Plaintiff’s evidentiary objections numbers 11, 12, and 15 to the declaration of Plonsker.

The Court SUSTAINS Defendants’ evidentiary objections numbers 1 and 2 to Plaintiff’s declaration. The Court SUSTAINS Defendants’ evidentiary objections to the declaration of Daniel Saunders (“Saunders”).

EVIDENTIARY OBJECTIONS IN CONNECTION WITH PLAINTIFF’S MOTION

The Court SUSTAINS Defendants’ evidentiary objections numbers 1 and 6 to Plaintiff’s declaration in support of Plaintiff’s cross-motion for summary adjudication. The Court OVERRULES Defendants’ evidentiary objections numbers 2-5 to Plaintiff’s declaration in support of Plaintiff’s cross-motion for summary adjudication.

The Court SUSTAINS Plaintiff’s evidentiary objections numbers 1-3 to the declaration of Robert Gaulin (“Gaulin”) in support of Defendants’ opposition to Plaintiff’s cross-motion for summary adjudication.

The Court SUSTAINS Plaintiff’s evidentiary objections numbers 4-5 to the declaration of Stephen in support of Defendants’ opposition to Plaintiff’s cross-motion for summary adjudication.

The Court SUSTAINS Plaintiff’s evidentiary objections numbers 6-15 to the declaration of James E. Curry (“Curry”) in support of Defendants’ opposition to Plaintiff’s cross-motion for summary adjudication.

DISCUSSION

In the context of motions for summary judgment and summary adjudication, California Code of Civil Procedure, Section 437c(p)(2) says that “[a] defendant . . . has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action . . . cannot be established, or that there is a complete defense to the cause of action.” “The purpose of the law of summary judgment is to provide the courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) “Summary judgment is appropriate when all of the papers submitted show there is not triable issue of material fact and the moving party is entitled to a judgment as a matter of law.” (Hutton v. Fidelity National Title Co. (2013) 213 Cal.App.4th 486, 492.) “The purpose of a summary judgment proceeding is to permit a party to show that material factual claims arising from the pleadings need not be tried because they are not in dispute.” (FPI Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 381.) “The complaint measures the materiality of the facts tendered in a defendant’s challenge to the plaintiff’s cause of action.” (Id.) “The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues: the function of the affidavits or declarations is to disclose whether there is any triable issue of fact within the issues delimited by the pleadings.” (Id.)

In reviewing a motion for summary judgment or summary adjudication a court examines “the moving party’s motion, including the evidence offered in support of the motion.” (Dollinger DeAnza Associates v. Chicago Title Ins. Co. (2011) 199 Cal.App.4th 1132, 1144.) “In determining whether the parties have met their respective burdens, the court must consider all the evidence and all the inferences reasonably drawn therefrom . . . and must view such evidence . . . and such inferences . . . in the light most favorable to the opposing party.” (Id.) “There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Id.) “[A] party cannot avoid summary judgment by asserting facts based on mere speculation and conjecture, but instead must produce admissible evidence raising a triable issue of fact.” (Id. at 1144-1145.) In connection with a motion for summary judgment or summary adjudication “if it is not set forth in the separate statement, it does not exist.” (San Diego Watercrafts, Inc. v. Wells Fargo Bank, N.A. (2002) 102 Cal.App.4th 308, 313.)

“Summary adjudication motions are procedurally identical to summary judgment motions.” (Serri v. Santa Clara University (2014) 226 Cal.App.830, 859.) “A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contends that the cause of action has no merit . . . [or] that there is no merit to a claim for damages.” (Code Civ. Proc. § 437c(f)(1).) “A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Id., emphasis added.) The burden on a defendant moving for summary adjudication “based upon the assertion of an affirmative defense is heavier than the burden to show one or more elements of the plaintiff’s cause of action cannot be established.” (Anderson v. Metalclad Insulation Corp. (1999) 72 Cal.App.4th 284, 289.) “[T]he defendant has the initial burden to show that undisputed facts support each element of the affirmative defense.” (Id.)

DEFENDANTS’ MOTION FOR SUMMARY ADJUDICATION

Defendants contend that the sole issue with respect to Gaumont being excused from performing under the Termination Agreement is the materiality of Plaintiff’s breach. Plaintiff contends that Defendants have failed to attempt to show that the contractual obligations at issue are dependent and, as such, have ignored the first element of the thirteenth and fifteenth affirmative defenses.

Defendants’ reply brief cites to an unpublished Federal District Court case from the Eastern District of California and a case from the United States Bankruptcy Appellate Panel for the Ninth Circuit, neither of which is controlling authority, in support of their argument that courts have held that the dependence of the parties’ obligations is simply one approach to determining materiality[4]. (Western Capital Partners, LLC v. Atigeo LLC, 2019 Bankr. LEXIS 3937; Flagship West, LLC v. Excel Realty Partners, L.P., 2005 WL 4701939.) Western Capital goes against Defendants’ argument as that case stated that California case law “does not explain how to choose between the two approaches” of materiality and dependence. (Western Capital Partners, LLC v. Atigeo LLC, 2019 Bankr. LEXIS 3937 at *14.) Excel suffers from the same flaw. (Flagship West, LLC v. Excel Realty Partners, L.P., 2005 WL 4701939 at *4.) Excel also goes against Defendants’ argument because Excel indicated that “[i]f the fact-finder determines that a covenant breached is independent, then it follows that the breach was not material.” (Id.) Excel is also an unpublished case which was eventually vacated and remanded. Defendants’ citation to Plotnik in their reply brief is also not persuasive because Plotnik does not stand for the proposition that the materiality approach is the sole approach in California for determining whether a party’s breach of a contract was material. (Plotnik v. Meihaus (2012) 208 Cal.App.4th 1590, 1602.) Brown, which is cited by the parties in connection with Defendants’ motion, is a case from the Second District Court of Appeal and as such is binding on this Court. Brown, in fact, does analyze whether a breach of a contract was material in connection with the independence of the promises contained therein. (Brown v. Grimes (2011) 192 Cal.App.4th 265, 278.)

Issue No.1: Independent Nature of the Parties’ Obligations Under the Termination Agreement

“Not every breach of contract by the plaintiff will relieve the defendant of the obligation to perform. The breach must be material . . . [a]lso the two obligations must be dependent, meaning that the parties specifically bargained that the failure to perform the one relieves the obligation to perform the other.” (CACI 303, Directions for Use (2020).) “While materiality is generally a question of fact, whether covenants are dependent or independent is a matter of construing the agreement.” (Id.) “If there is no extrinsic evidence in aid of construction, the question is one of law for the court.” (Id.)

“When a party’s failure to perform a contractual obligation constitutes a material breach of the contract, the other party may be discharged from its duty to perform under the contract.” (Brown v. Grimes (2011) 192 Cal.App.4th 265, 277.) “Normally the question of whether a breach of an obligation is a material breach, so as to excuse performance by the other party, is a question of fact.” (Id., emphasis added.) “Ordinarily the issue of materiality is a mixed question of law and fact, involving the application of a legal standard to a particular set of facts.” (Insurance Underwriters Clearing House, Inc. v. Natomas Co. (1986) 184 Cal.App.3d 1520, 1526.) “[I]f reasonable minds cannot differ on the issue of materiality, the issue may be resolved as a matter of law.” (Id. at 1527.) “Whether a partial breach of a contract is material depends on the importance or seriousness thereof and the probability of the injured party getting substantial performance.” (Brown v. Grimes (2011) 192 Cal.App.4th 265, 278.) “A material breach of one aspect of a contract generally constitutes a material breach of the whole contract.” (Id.)

“The determination of whether a promise is an independent covenant, so that breach of that promise by one party does not excuse performance by the other party, is based on the intention of the parties as deduced from the agreement.” (Id. at 279.) “The obligations of the parties to a contract are either dependent or independent.” (Colaco v. Cavotec SA (2018) 25 Cal.App.5th 1172, 1182.) “The parties’ obligations are dependent when the performance by one party is a condition precedent to the other party’s performance. In this event, one party is excused from its obligation if the other party fails to perform.” (Id. at 1182-1183.) “If the parties’ obligations are independent, the breach by one party does not excuse the other party’s performance.” (Id. at 1183.) “Instead, the nonbreaching party still must perform and its remedy is to seek damages from the other party based on its breach of the contract.” (Id.) “The law is settled that where covenants of a contract are to be performed at different times, they are independent, and the breach by one party of his covenant does not excuse the performance by the other party of his covenant or relieve him of liability for damages for a breach thereof.” (Id.)

“To construe covenants as dependent is to work a forfeiture as to one party, and no obligation of a contract is to be regarded as a condition precedent unless made so by express terms or necessary implication.” (Verdier v. Verdier (1955) 133 Cal.App.2d 325, 334.) “Where a breach is partial and is capable of being fully compensated, the strong tendency is to regard it as insufficient to constitute a defense.” (Id.) Determination of whether an obligation is independent or dependent “is wholly one of construction of the agreement.” (Id.) “Dependent covenants or [c]onditions precedent are not favored in the law . . . and courts shall not construe a term of the contract so as to establish a condition precedent absent plain and unambiguous contract language to that effect.” (Colaco v. Cavotec SA (2018) 25 Cal.App.5th 1172, 1183.)

Defendants’ Evidence

According to the declaration of Stephen, who is the Executive Vice President of Strategy and Head of Business and Legal Affairs of Gaumont: (1) Plaintiff was hired by Gaumont as its CEO in 2010 (Stephen Decl. at ¶ 2); (2) Plaintiff signed an employment agreement with Gaumont (the “Employment Agreement”) (Id. at ¶ 3 and Exhibit A); (3) Plaintiff and Gaumont entered into the Termination Agreement (Id. at ¶ 5 and Exhibit C); (4) during her employment with Gaumont, Plaintiff utilized a laptop computer that was owned by Gaumont (the “Computer”) (Id. at ¶ 7); (5) he understands that Plaintiff requested that she be permitted to purchase the Computer from Gaumont upon the end of her employment, and that she claims she did so on October 2, 2015 with a dated check to Gaumont for $600.00 (Id.); (6) he has reviewed some of the documents produced by Plaintiff in this litigation on September 28, 2018, which is attached to the declaration of Plonsker as Exhibit E (Id. at ¶ 11); (7) these documents contain the most private and confidential information that Gaumont possesses such as internal agreements, its employment agreements with its employees, business strategy documents, negotiating postures, evaluations of potential clients, financial statements, and internal financial projections including attorney-client privileged documents; and (8) as of today, under the terms of the Termination Agreement, after October 15, 2015, Gaumont has paid Plaintiff a total of $603,066.94, which includes severance payments and other compensation. (Id. at ¶ 13.)

Plonsker declares that: (1) upon learning that Plaintiff had Gaumont’s confidential and trade secret documents (the “Property”) in her possession, he immediately demanded via e-mail to Plaintiff’s attorneys that all of the Property in Plaintiff’s possession be returned to Gaumont (Plonsker Decl. at ¶ 4 and Exhibit F); (2) Plaintiff and her attorneys repeatedly refused and continue to refuse to return the Property (Id. at ¶ 4); (3) Mr. Berlinski has admitted on behalf of Plaintiff that Plaintiff has up to 350,000 documents of the Property and that such documents have been uploaded onto her attorney’s document server (Id. at ¶ 5 and Exhibit G); and (4) in response to Gaumont’s discovery motions for an order that Plaintiff return the Property, Plaintiff initially successfully argued to the Referee that it would be burdensome to produce copies of all the Property on the Computer because she had commingled the documents with personal documents. (Id. at ¶ 11 and Exhibits L and M.)

Plaintiffs’ Evidence in Opposition to Defendants’ Motion

Plaintiff relevantly declares that: (1) in 2010, she was recruited by Gaumont SA to help launch Gaumont (Marsh Decl. at ¶ 3); (2) as Gaumont’s CEO, she oversaw development of television series including Narcos, Hannibal, Hemlock Grove, and F is for Family (Id. at ¶ 5); (3) she entered into an amendment to the Employment Agreement with Gaumont dated September 17, 2013 (Id. at ¶ 6 and Exhibit 1); (4) Gaumont terminated her employment without explanation in September 2015 and, in connection with such termination, she entered into the Termination Agreement with Gaumont (Id. at ¶ 7); (5) before the October 14, 2015 “End Date” of her employment with Gaumont, she asked Gaumont’s Executive Vice President of Business Strategy and Operations, Sam Semon, if she could keep the Computer which she used as her personal computer as well as her work computer (Id. at ¶ 8); (6) she was told that she could purchase the Computer for $600.00 and she delivered a check for $600.00 to Gaumont as payment for the Computer on October 2, 2015 (Id.); (7) on November 19, 2015, Sam Semon sent her an email at her Gmail address attaching multiple Gaumont documents (Id. at ¶ 10 and Exhibit 2) ; and (8) after her employment with Gaumont, she was employed by Dreamworks Animation. (Id. at ¶ 12.)

Pertinent Language of the Termination Agreement

The Court finds it necessary to set forth certain provisions of the Termination Agreement. The Termination Agreement is attached as Exhibit C to the declaration of Stephen. As indicated above, the Termination Agreement—and Plaintiff’s purported material breach thereof—serves as the sole basis for Defendants’ motion for summary adjudication.

  1. “This letter agreement . . . will serve to confirm our agreement with respect to the termination of your current duties as Chief Executive Officer . . . of Gaumont International Television, LLC . . . effective at the end of business (pdt) on October 14, 2015 (the “End Date”).”

  2. “You will be entitled to receive as severance an amount equivalent to your base salary, as of the End Date (“Severance Pay”), of Five Hundred Fifty Thousand Dollars ($550,000.00) per annum from the End Date through September 30, 2016 (“Severance Period”) unless Severance Pay terminates earlier pursuant to the conditions set forth in paragraph 5.” (Stephen Decl., Exhibit C at ¶ 1(a).)

  3. “You will be entitled to receive a bonus (“MAGR Bonus”) equal to three percent (3%) of the modified adjusted gross receipts (“MAGR”) for the following programs: (i) F is for Family; (ii) Hannibal; (iii) Narcos; and (iv) Hemlock Grove . . . [y]our entitlement to receive such MAGR Bonus will continue for so long as GIT (or GIT’s assignee or designee) produces new television episodes and/or collects income from the aforementioned shows.” (Stephen Decl., Exhibit C at ¶ 1(c).)

  4. “You will be entitled to receive a bonus (“Green Light Bonus”) equal to fifty thousand dollars . . . except as previously paid to you by GIT, for each of the following programs which were green lit by you during the Term: (i) Hannibal; (ii) Narcos; and (ii) Hemlock Grove. Your entitlement to receive this Green Light Bonus will continue for as long as GIT (or GIT’s assignee or designee) produces new television episodes and/or collects income from each such television series for each season for which each such program is renewed. For the avoidance of doubt, the Green Light Bonus shall be paid for each new season ordered for each such television series.” (Stephen Decl., Exhibit C at ¶ 1(d).)

  5. “You will be entitled to receive a bonus for the entire calendar year 2015 . . . in accordance with the definition of net profits contained in paragraph 1 of Amendment No. 2 to the Employment Agreement pertaining to adjusted net profits of GIT.” (Stephen Decl., Exhibit C at ¶ 1(b).)

  6. “You also agree to return before the End Date all data, files, lists, information, memoranda, documents and all other property (including, but not limited to, any phones, computer equipment, fax machines, credit cards, identification cards, and keys) belonging to GIT or containing Trade Secrets of GIT (as defined below), including, among other things, that which relates to services performed by your for GIT through and including your End Date.”[5] (Stephen Decl., Exhibit C at ¶ 9.)

  7. “Confidential Information of GIT shall mean valuable, competitively sensitive data or information related to GIT’s business other than Trade Secrets that are no generally known by or readily available to GIT’s competitors.” (Stephen Decl, Exhibit C at ¶ 9.)

  8. “Trade Secrets shall mean information or data of or about GIT.” (Stephen Decl., Exhibit C at ¶ 9.)

Analysis

The Court incorporates the parties’ evidence, as well as the Court’s recitation of the Termination Agreement from above, and applies such recitations to the Court’s analysis on the issue of whether the obligations of the parties were dependent or independent. The Court finds that based on the review of the Termination Agreement as a whole, the Termination Agreement does not indicate that Gaumont’s duty to pay Plaintiff compensation is contingent on Plaintiff returning Gaumont’s Property. The Termination Agreement does not explicitly require Plaintiff to return the Computer or Gaumont’s Property before being compensated. The obligations of Plaintiff and Gaumont are clearly independent based on the language of the Termination Agreement. Thus, Gaumont is still required to pay Plaintiff her MAGR Bonus and other agreed upon compensation pursuant to the terms of the Termination Agreement. Based on the Court’s reading of the Termination Agreement, the intention of the parties was not to base Plaintiff’s compensation thereunder on Plaintiff’s compliance with returning the Computer and the Property of Gaumont.

Moreover, even if the Court were to follow the materiality analysis advanced by Defendants, the issue of materiality would be one of fact under Brown. Defendants have not met their burden with respect to proving each element of their thirteenth and fifteenth affirmative defenses.

Thus, the Court DENIES Defendants’ motion for summary adjudication in its entirety as their motion is premised on Defendants prevailing with respect to their thirteenth and fifteenth affirmative defenses.

PLAINTIFF’S CROSS-MOTION FOR SUMMARY ADJUDICATION

Plaintiff contends that: (1) Defendants’ affirmative defenses fail as a matter of law because the contractual obligations at issue are dependent; (2) the express language of the Termination Agreement shows that the obligations at issue are dependent; and (3) the timing of the parties’ obligations further support a finding of independent obligations. Plaintiff indicates that she is not moving for summary adjudication based on materiality. (Motion at 15:20-28.)

Initially, the Court incorporates all the legal standards set forth above and applies such legal standards to the Court’s analysis with respect to Plaintiff’s cross-motion for summary adjudication.

The Court also incorporates its recitation of the Termination Agreement from above. The Termination Agreement is attached as Exhibit 3 to Plaintiff’s declaration in support of her cross-motion for summary adjudication. The Termination Agreement at issue with respect to both motions is identical.

Legal Standard

California Code of Civil Procedure, Section 437c(f)(1) provides that “[a] party may move for summary adjudication as to . . . one or more affirmative defenses . . . if the party contends . . . that there is no affirmative defense to the cause of action, [or] that there is no merit an affirmative defense as to any cause of action.” “A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, affirmative defense, a claim for damages, or an issue of duty.” (Code Civ. Proc. § 437c(f)(1).)

Plaintiff’s Evidence

Plaintiff relevantly declares that: (1) in 2010, she was recruited by Gaumont SA to help launch Gaumont (Marsh Decl. at ¶ 3); (2) as Gaumont’s CEO, she oversaw development of television series including Narcos, Hannibal, Hemlock Grove, and F is for Family (Id. at ¶ 5); (3) she entered into an amendment to the Employment Agreement with Gaumont dated September 17, 2013 (Id. at ¶ 6 and Exhibit 2); and (4) Gaumont terminated her employment without explanation in September 2015 and, in connection with such termination, she entered into the Termination Agreement with Gaumont. (Id. at ¶ 7 and Exhibit 3.)

Defendants’ Evidence

In connection with their opposition, Defendants present the declaration of Curry who declares that Plaintiff and Gaumont entered into the Termination Agreement on September 30, 2015. (Curry Decl. ¶ 5 and Exhibit D.)

Analysis

The Court incorporates its analysis with respect to Defendants’ motion for summary adjudication from above and applies such analysis to Plaintiff’s cross-motion for summary adjudication. Defendants have not presented any evidence that Plaintiff’ was required to return the Computer and the Property before receiving her agreed upon compensation pursuant to the Termination Agreement. Defendants have not presented any evidence that those two obligations in the Termination Agreement were dependent. Based on the review of the Termination Agreement and the terms set forth therein, the Court finds that the obligations are in fact independent.

Therefore, Defendants’ thirteenth and fifteenth affirmative defenses fail as a matter of law.

The Court GRANTS Plaintiff’s cross-motion for summary adjudication as to Defendants’ thirteenth and fifteenth affirmative defenses.

Plaintiff is ordered to give notice of this ruling with respect to Plaintiff’s cross-motion for summary adjudication.

Defendants are ordered to give notice of this ruling with respect to their motion for summary adjudication.

In consideration of the current COVID-19 pandemic situation, the Court strongly encourages that appearances on all proceedings, including this one, be made by CourtCall if the parties do not submit on the tentative.  If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to SMC_DEPT56@lacourt.org

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Dated this 14th day of August 2020

Hon. Holly J. Fujie

Judge of the Superior Court


[1] Only the seventh, eighth, and ninth causes of action in the SAC are asserted against Gaumont SA.

[2] After Defendants filed their motion for summary adjudication, the Court heard Plaintiff’s demurrer and motion to strike with respect to the SAXC. On February 24, 2020, the Court sustained the demurrer of Plaintiff to the second, third, fifth, and sixth causes of action in the SAXC. Thus, the third cause of action is no longer relevant to Defendants’ motion for summary adjudication as it is moot.

[3] The Property is Gaumont’s confidential and trade secret information.

[4] “Decisions of lower federal courts . . . are not binding on state courts.” (Paciific Shore Funding v. Lozo (2006) 138 Cal.App.4th 1342, 1352.)

[5] This is the provision that serves as the basis for Defendants’ motion.

Case Number: BC691790    Hearing Date: July 16, 2020    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

KATIE O’CONNELL MARSH, etc.,

Plaintiff,

vs.

GAUMONT TELEVISION USA, LLC f.k.a. GAUMONT INTERNATIONAL TELEVISION, LLC, et al.,

Defendants.

AND RELATED CROSS-ACTION

CASE NO.: BC691790

[TENTATIVE] ORDER RE: MOTION FOR LEAVE TO FILE THIRD AMENDED CROSS-COMPLAINT

Date: July 16, 2020

Time: 8:30 a.m.

Dept. 56

MOVING PARTY: Defendant and Cross-Complainant Gaumont Television USA, LLC (“Gaumont”)

RESPONDING PARTY: Plaintiff and Cross-Defendant Katie O’Connell Marsh (“Marsh”)

The Court has considered the moving and opposition papers. No reply papers were filed. Any reply papers were required to have been filed and served at least five days prior the hearing pursuant to California Code of Civil Procedure, Section 1005(b).

BACKGROUND

Marsh filed a First Amended Complaint (“FAC”) against Defendants alleging causes of action for: (1) declaratory relief; (2) breach of contract; (3) breach of the implied covenant of good faith and fair dealing; (4) fraudulent inducement; (5) fraudulent concealment; (6) unfair competition in violation of California Business and Professions Code, Section 17200 et seq.; (7) intentional interference with contract; (8) inducing breach of contract; and (9) accounting.

Marsh filed the operative Second Amended Complaint (“SAC”) against Defendants alleging causes of action for: (1) declaratory relief; (2) breach of contract; (3) breach of the implied covenant of good faith and fair dealing; (4) fraudulent inducement; (5) fraudulent concealment; (6) unfair competition in violation of California Business and Professions Code, Section 17200 et seq.; (7) intentional interference with contract; (8) inducing breach of contract; and (9) accounting. Marsh’s SAC arises from her tenure as a television executive with Gaumont Television, LLC (“Gaumont”) and the alleged failure of Defendants to pay Marsh her share of contracted Modified Adjusted Gross Receipts (“MAGR”).

On December 2, 2019, Gaumont filed the operative Second Amended Cross-Complaint (“SAXC”) against Marsh arising from the alleged employment and termination of Marsh, alleging causes of action for: (1) breach of contract; (2) conversion; (3) possession of personal property; (4) declaratory relief pursuant to California Code of Civil Procedure, Section 1060; (5) fraudulent inducement; and (6) fraudulent concealment.

Marsh filed a demurrer to the second, third, fifth, and sixth causes of action in the SAXC and also filed a motion to strike portions of the SAXC. On February 24, 2020, the Court sustained without leave to amend the demurrer of Marsh to the second, third, fifth, and sixth causes of action in the SAXC. The Court also granted Marsh’s motion to strike without leave to amend.

In ruling on the demurrer to the SAXC, the Court’s February 24, 2020 order indicated that: (1) Gaumont should have had reason to suspect some wrongdoing as early as October 2015; (2) Gaumont did not plead facts showing that application of the discovery rule was warranted; and (3) the second, third, fifth, and sixth causes of action in the SAXC were barred by the statute of limitations.

Motion for Leave to Amend

On January 10, 2020, Gaumont filed a motion for leave to file a Third Amended Cross-Complaint (“TAXC”). The Court, however, on February 4, 2020, denied Gaumont’s motion for leave to file a TAXC due to procedural non-compliance.

On March 11, 2020, Gaumont filed an amended notice of motion and motion for an order granting Gaumont leave to file a TAXC. Gaumont’s motion for leave to amend is made on the grounds that Gaumont seeks to add additional causes of action for: (1) breach of implied covenant of good faith and fair dealing; (2) fraudulent inducement; and (3) fraudulent concealment. Gaumont’s notice of motion indicates that although Gaumont previously asserted causes of action for fraudulent inducement and fraudulent concealment in its SAXC, the fraud causes of action asserted in the proposed TAXC arise from different allegations than those which gave rise to the fraud causes of action in the SAXC.

Gaumont contends that: (1) the furtherance of justice requires leave to amend; and (2) amendment will not cause prejudice to Plaintiff.

Marsh opposes Gaumont’s motion for leave to amend on the grounds that: (1) Gaumont’s motion is procedurally improper as it once again violates California Rules of Court, Rule 3.1324; (2) Gaumont has no legitimate excuse for its delay in seeking leave to amend; (3) she will suffer prejudice if Gaumont’s motion is granted; and (4) permitting Gaumont’s proposed amendments would be futile.

Declaration of Gaumont’s Counsel

Counsel for Gaumont, Michael J. Plonsker (“Plonsker”) relevantly declares in support of Gaumont’s motion that: (1) the effect of the amendments in the proposed TAXC would be that Gaumont could avail itself of additional legal theories upon which to obtain relief from Plaintiff stemming from the same wrongs committed by Plaintiff, but which were not thought to be as clearly actionable or necessary until the recent developments occurred (Plonsker Decl. at ¶ 19); (2) the amendments in the proposed TAXC are necessary and proper to ensure that Gaumont—upon learning of meritorious causes of action against Plaintiff, following recent developments in this case—can exercise this right, under well-established California policy, to have its case decided upon the merits (Id. at ¶ 20); (3) Gaumont discovered it could assert a cause of action for breach of the implied covenant of good faith and fair dealing on or around February 24, 2020 (Id. at ¶ 21); (4) specifically, it was not until this Court ruled, on February 24, 2020, that, “[t]he notion that [Gaumont] thought such Materials were destroyed does not change the fact that such Materials were never returned . . . [,]” did Gaumont become aware of the need to specially allege that, given the common practice relative to electronic documents, a former employee could satisfy a contractual obligation to return an employer’s materials by deleting and/or destroying them (Id. at ¶ 21); (5) Gaumont discovered that it could assert fraud causes of action in connection with Plaintiff’s interpretation of the MAGR Bonus Provision of the Termination Agreement on or around October 2, 2019 (Id. at ¶ 22); (6) specifically, it was not until this Court ruled that “Plaintiff’s fraudulent inducement cause of action is an exception to the economic loss rule” on October 2, 2019, that Gaumont learned of the viability of its own fraud claims in connection with Plaintiff’s purported interpretation of the MAGR Bonus (Id.); (7) Gaumont initially tried to assert such claims in a previous iteration of its TAXC on January 10, 2020, however, its motion for leave was denied on procedural grounds (Id.); and (8) Gaumont seeks to assert fraud causes of action in connection with Marsh’s interpretation of the MAGR Bonus provision. (Id.)

Declaration of Saunders[1]

Marsh’s counsel, Daniel A. Saunders (“Saunders”) relevantly declares that: (1) on March 5, 2020, Gaumont’s counsel emailed Marsh’s counsel to request that Marsh stipulate to Gaumont’s TAXC (Saunders Decl., Exhibits 6 and 7); (2) Marsh declined to stipulate for the reasons forth in her opposition, including the likely trial delay and continued lack of justification for Gaumont’s persistent attempts to plead new, legally and factually groundless, and retaliatory causes of action more than two years after this litigation commenced (Id. at ¶ 10 and Exhibit 8); (3) on March 19, 2020, the Court issued an order continuing the hearing on the amended motion from April 6, 2020 to April 22, 2020, the same date as the hearing on Marsh’s and Gaumont’s motions for summary judgment and/or adjudication filed on February 7, 2020 (Id. at ¶ 13); (4) the Court twice cleared its calendar to accommodate its stated preference for hearing all parties’ motions for summary judgment or summary adjudication on the same date (Id.); and (5) trial in this case was initially set for May 6, 2019, and has been continued three times to October 21, 2019, January 13, 2020, and August 17, 2020, which is the current trial date[2]. (Id. at ¶ 14.)

DISCUSSION

California Code of Civil Procedure, Section 473 permits the trial court in its discretion to allow amendments to pleadings in the furtherance of justice. California Code of Civil Procedure, Section 576 says that “[a]ny judge, at any time before or after commencement of trial, in the furtherance of justice, and upon such terms as may be proper, may allow the amendment of any pleading or pretrial conference order.” “There is a policy of great liberality in permitting amendments to the pleadings at any stage of the proceeding.” (Berman v. Bromberg (1997) 56 Cal.App.4th 936, 945.) “An application to amend a pleading is addressed to the trial judge’s sound discretion.” (Id.) “If the motion to amend is timely made and the granting of the motion will not prejudice the opposing party, it is error to refuse permission to amend and where the refusal also results in a party being deprived of the right to assert a meritorious cause of action or a meritorious defense, it is not only error but an abuse of discretion.” (Morgan v. Superior Court of Cal. In and For Los Angeles County (1959) 172 Cal.App.2d 527, 530.)

“[It] is well settled that when [a] complaint does not state a cause of action and it is evident that neither by a proper offer to amend, nor any offer to amend, it can be made to do so, a refusal by the court to permit an amendment cannot be said to be an abuse of discretion.” (Robertson v. City of Long Beach (1937) 19 Cal.App.2d 676, 679.) “The right to amend a pleading should be denied if it appears to a certainty that no relief could possibly be granted under the amended pleading.” (Robinson & Wilson, Inc. v. Stone (1973) 35 Cal.App.3d 396, 413.) “The power to permit amendment is denied only if a change is made in the liability sought to be enforced against the defendant.” (Klopstock v. Superior Court in and for City and County of San Francisco (1941) 17 Cal.2d 13, 20.) “[T]he failure of a proposed amendment to state facts sufficient to constitute a cause of action or defense may support an order denying a motion to amend.” (California Casualty Gen. Ins. Co. v. Superior Court (1985) 173 Cal.App.3d 274, 280, emphasis added.) “When . . . the legal sufficiency of [a] proposed [cause of action] [is in question] . . . the preferable practice would be to permit the amendment and allow the parties to test its legal sufficiency by demurrer.” (Id. at 281.) “Such proceeding might serve to develop the factual content of the proposed [cause of action] and to refine the language in which it is pleaded.” (Id.)

Issue No.1: Procedural Non-Compliance

California Rules of Court, Rule 3.1324 sets forth the necessary requirements with respect to a motion to amend a pleading. California Rules of Court, Rule 3.1324(b) states that a separate declaration must accompany the motion for leave to amend and such declaration must specify: (1) the effect of the amendment; (2) why the amendment is necessary and proper; (3) when the facts giving rise to the amended allegations were discovered; and (4) the reasons why the request for amendment was not made earlier.

The Court incorporates its recitation of the declaration of Plonsker from above and applies it to its discussion of procedural non-compliance. Gaumont, once again, has failed to comply with the mandate set forth in California Rules of Court, Rule 3.1324 as Plonsker does not set forth the reasons why its current motion for leave to amend was not made earlier as required by California Rules of Court, Rule 3.1324(4).

The Court gave Gaumont a prior opportunity to cure the defect in connection with its initial motion for leave to file a TAXC. Gaumont has failed to comply with required procedural mandates in connection with its amended motion for leave to file a TAXC.

Therefore, the Court DENIES WITH PREJUDICE Gaumont’s amended motion for leave to file a TAXC.

Moving party is ordered to give notice of this ruling.

In consideration of the current COVID-19 pandemic situation, the Court strongly encourages that appearances on all proceedings, including this one, be made by CourtCall if the parties do not submit on the tentative.  If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to SMC_DEPT56@lacourt.org

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Dated this 16th day of July 2020

Hon. Holly J. Fujie

Judge of the Superior Court


[1] Saunders’ declaration attaches redacted exhibits in the form of Exhibits 7 and 10. Exhibit 7 is a March 5, 2020 version of the TAXC that was attached to an e-mail sent to Marsh’s counsel requesting that Marsh stipulate to the filing of a TAXC. (Saunders Decl. at ¶ 10 and Exhibit 7.) The March 5th TAXC is not relevant to the Court’s analysis as Gaumont provided the Court with an unredacted copy of the TAXC in connection with its moving papers that it seeks to file in this action. Marsh failed to provide the Court with unredacted courtesy copies of her opposition papers. Exhibit 10 is a redacted version of Gaumont’s instant amended motion for leave to amend to file a TAXC.

[2] Trial is currently not set in this action. A trial setting conference is set for July 16, 2020.

Case Number: BC691790    Hearing Date: July 10, 2020    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

KATIE O’CONNELL MARSH, etc.,

GAUMONT TELEVISION USA, LLC f.k.a. GAUMONT INTERNATIONAL TELEVISION, LLC, et al.,

Defendants.

AND RELATED CROSS-ACTION

[TENTATIVE] ORDER RE: MOTION FOR SUMMARY JUDGMENT OR, IN THE ALTERNATIVE, SUMMARY ADJUDICATION

Date:  July 10, 2020

Time: 8:30 a.m.

Dept. 56

MOVING PARTY: Defendant Gaumont SA (“Moving Defendant”)

RESPONDING PARTY: Plaintiff Katie O’Connell Marsh

BACKGROUND

Plaintiff filed a First Amended Complaint (“FAC”) against Defendants alleging causes of action for: (1) declaratory relief; (2) breach of contract; (3) breach of the implied covenant of good faith and fair dealing; (4) fraudulent inducement; (5) fraudulent concealment; (6) unfair competition in violation of California Business and Professions Code, Section 17200 et seq.; (7) intentional interference with contract; (8) inducing breach of contract; and (9) accounting.

Plaintiff filed the operative Second Amended Complaint (“SAC”) against Defendants alleging causes of action for: (1) declaratory relief; (2) breach of contract; (3) breach of the implied covenant of good faith and fair dealing; (4) fraudulent inducement; (5) fraudulent concealment; (6) unfair competition in violation of California Business and Professions Code, Section 17200 et seq.; (7) intentional interference with contract; (8) inducing breach of contract; and (9) accounting[1].  Plaintiff’s SAC arises from her tenure as a television executive with Gaumont Television, LLC (“Gaumont”) and the alleged failure of Defendants to pay Plaintiff her share of contracted Modified Adjusted Gross Receipts (“MAGR”).   

Pertinent Allegations of the SAC

The Instant Motion

in its favor and against Plaintiff on: (1) its affirmative defense number 20—owner’s privilege; (2) the seventh and eighth causes of action in the SAC on the grounds of its affirmative defense number 20 and  it has absolute immunity because as pled in the SAC it was an agent of Gaumont; (3) its affirmative defense number 3, with respect to the seventh and eighth causes of action being barred by the applicable statute of limitations; and (4) the ninth cause of action in the SAC because Plaintiff has not alleged, and cannot show any facts, that establish a relationship between Plaintiff and Moving Defendant that would give rise to a duty to account. 

Separate Statements of the Parties

California Rules of Court, Rule 3.1350(f)(2) says that in opposition to the moving party’s separate statement “the response must unequivocally state whether the fact is disputed or undisputed.  An opposing party who contends that a fact is disputed must state, on the right side of the page directly opposite the fact in dispute, the nature of the dispute and describe the evidence that supports the position that the fact is disputed.”  California Rules of Court, Rule 3.1350(f)(2) says that “[c]itation to the evidence in support of each material fact must include reference to the exhibit, title, page, and line numbers.” 

There are numerous instances in Plaintiff’s separate statement in opposition to Moving Defendant’s motion where Plaintiff indicates that: (1) a fact is undisputed but refers the Court to her evidentiary objection because such fact is alleged to be irrelevant; or (2) a fact is disputed yet makes no citation to any evidence in support of such disputed fact.  In instances where Plaintiff disputes a fact but deems it irrelevant or fails to cite any evidence, the Court finds that Plaintiff did not comply with the mandate of California Rules of Court, Rule 3.1350(f)(2). 

Moreover, there are numerous instances in Moving Defendant’s separate statement where: (1) Moving Defendant misstates its discovery request propounded on Plaintiff; and (2) misstates Plaintiff’s response to such discovery request.

JUDICIAL NOTICE

The Court GRANTS Moving Defendant’s request for judicial notice.

The Court GRANTS Plaintiff’s request for judicial notice.   

EVIDENTIARY OBJECTIONS

DISCUSSION

Dollinger DeAnza Associates v. Chicago Title Ins. Co. (2011) 199 Cal.App.4th 1132, 1144.)  “In determining whether the parties have met their respective burdens, the court must consider all the evidence and all the inferences reasonably drawn therefrom . . . and must view such evidence . . . and such inferences . . . in the light most favorable to the opposing party.”  (Id.)  “There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.”  (Id.)  “[A] party cannot avoid summary judgment by asserting facts based on mere speculation and conjecture, but instead must produce admissible evidence raising a triable issue of fact.”  (Id. at 1144-1145.)  In connection with a motion for summary judgment or summary adjudication “if it is not set forth in the separate statement, it does not exist.”  (San Diego Watercrafts, Inc. v. Wells Fargo Bank, N.A. (2002) 102 Cal.App.4th 308, 313.) 

“Summary adjudication motions are procedurally identical to summary judgment motions.”  (Serri v. Santa Clara University (2014) 226 Cal.App.830, 859.)  “A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contends that the cause of action has no merit . . . [or] that there is no merit to a claim for damages.”  (Code Civ. Proc. § 437c(f)(1).)  “A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.”  (Id., emphasis added.)  

Where a motion for summary judgment or summary adjudication is not based on “the absence of disputed material facts but . . . whether [the] complaint alleged sufficient facts to state a cause of action, [a] motion for summary judgment [or summary adjudication is], in effect, a motion for judgment on the pleadings.”  (Prue v. Brady Co./San Diego, Inc. (2015) 242 Cal.App.4th 1367, 1378.)  “When a motion for summary judgment [or summary adjudication] is used to test whether the complaint states a cause of action, the court will apply the rule applicable to demurrers and accept the allegations of the complaint as true.”  (American Airlines, Inc. v. County of San Mateo (1996) 12 Cal.4th 1110, 1118.)  

“Judicial admissions may be made in a pleading.”  (Barsegian v. Kessler & Kessler (2013) 215 Cal.App.4th 446, 451.)  “Facts established by pleadings as judicial admissions are conclusive concessions of the truth of those matters, are effectively removed as issues from litigation, and may not be contradicted, by the party whose pleadings are used against him or her.”  (Id.)  “[N]ot every factual allegation in a complaint constitutes a judicial admission.  Otherwise, a plaintiff would conclusively establish the facts of the case by merely alleging them, and there would never be any disputed facts to be tried.”  (Id. at 452.)  “Rather, a judicial admission is ordinarily a factual allegation by one party that is admitted by the opposing party.  The factual allegation is removed from the issues in the litigation because the parties agree as to its truth.”  (Id.)  “A judicial admission is therefore conclusive as to the admitting party and as to that party’s opponent . . . if a factual allegation is treated as a judicial admission, then neither party may attempt to contradict it—the admitted fact is effectively conceded by both sides.”  (Id.)  “[A] mere conclusion, or a mixed factual-legal conclusion in a complaint, is not considered a binding judicial admission.”  (CytoDyn of New Mexico, Inc. v. Amerimmune Pharmaceuticals, Inc. (2008) 160 Cal.App.4th 288, 299, fn.9.) 

Issue No.1: The Owner’s Privilege Affirmative Defense

Skelly and Savage are not persuasive authority as neither Skelly nor Savage considered the issue of the owner’s privilege and improper actions in that context[3].  (Skelly v. Richman (1970) 10 Cal.App.3d 844; see also Savage v. Pacific Gas & Electric Co. (1993) 21 Cal.App.4th 434.) 

Culcal Stylco, Inc. v. Vornado, Inc. (1972) 26 Cal.App.3d 879, 881.)  “One who has a financial interest in the business of another person is privileged purposely to cause him not to perform a contract with a third person . . . if the actor (a) does not employ improper means, and (b) acts to protect his interest from being prejudiced by the contract.”  (Id. at 882.)  “The privilege that arises . . . is at most a qualified one dependent for its existence upon the circumstances of the case.  It is essentially a state-of-mind privilege and therefore its existence cannot normally be satisfactorily determined on the basis of the pleadings alone.”  (Id. at 883.)  “The resolution of the issue turns on the defendants’ predominant purpose in inducing the breach of the contract.”  (Id.)  “This is preferably a matter to be determined on the basis of proof rather than of pleading.”  (Id.) 

Huynh v. Vu (2003) 111 Cal.App.4th 1183, 1195.)  “The scope of the [owner’s] privilege, as developed under California’s common law . . . is neither clear nor consistent.”  (Id.)  “If the privilege is absolute, it is based solely on the [owner’s] status as the [owner] of the breaching party, without regard to the [owner’s] motives or state of mind.”  (Id.)  “The mixed motive formulation applies the privilege as long as the [owner] is motivated, at least, in part by a desire to benefit the principal.”  (Id.)  “The predominant motive formulation is the most restrictive, granting a manager the privilege of interfering with a principal’s contract only when the manager’s predominant motive is to serve the interest of the principal.”  (Id.)  “[E]ven under the predominant motive test, a [owner’s] desire to advance his or her personal interests as an indirect and secondary result of benefiting the principal should not vitiate the privilege.”  (Id. at 1200, emphasis added.)  Allegations that one acted “willfully, wantonly, and maliciously” can “suggest an absence of privilege.”  (Culcal Stylco, Inc. v. Vornado, Inc. (1972) 26 Cal.App.3d 879, 883.) 

Moving Defendant’s Evidence

Issue No. 2: The Agency Argument

Issue No. 3: The Statute of Limitations Affirmative Defense

Analysis

.  Thus, the Court finds that there exists a triable issue as to when the statute of limitations began to run on Plaintiff’s seventh and eighth causes of action in the SAC. 

Issue No. 4: Ninth Cause of Action

The Court finds Moving Defendant has met its burden in showing no triable issue of fact with respect to the ninth cause of action in the SAC.  The burden now shifts to Plaintiff to show a triable issue of material fact.

The Court finds that Plaintiff has shown a triable issue of material fact with respect to the ninth cause of action.  In Moving Defendant’s response to Plaintiff’s additional undisputed material facts, Moving Defendant does not dispute that: (1) in her ninth cause of action, Plaintiff alleges that the amount of money due to her is unknown and cannot be ascertained without a full and complete accounting of Defendants’ books and records (AMF 70); and (2) an accounting from both Gaumont and Moving Defendant is necessary to determine the full amount due to Plaintiff under the Termination Agreement.  (AMF 69.) 

Therefore, the Court DENIES Moving Defendant’s request for summary adjudication as to the ninth cause of action in the SAC.

Moving Defendant’s motion for summary judgment or, in the alternative, summary adjudication is DENIED in its entirety. 

Moving party is ordered to give notice of this ruling.

In consideration of the current COVID-19 pandemic situation, the Court strongly encourages that appearances on all proceedings, including this one, be made by CourtCall if the parties do not submit on the tentative.  If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to SMC_DEPT56@lacourt.org

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org.  If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court


[1] Only the seventh, eighth, and ninth causes of action in the SAC are asserted against Moving Defendant.

[2] Moving Defendant’s motion advances arguments for summary adjudication and does not argue for summary judgment.  (Motion at i:8-14.)  

[3] “Language used in any opinion is of course to be understood in the light of the facts and the issue then before the court, and an opinion is not authority for a proposition not therein considered.”  (Ginns v. Savage (1964) 61 Cal.2d 520, 524, fn.2.) 

[4]

Case Number: BC691790    Hearing Date: July 08, 2020    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

GREGG “ROCKY” BROOKS,

Plaintiff,

vs.

JOHN C. DEPP, etc., et al.,

Defendants.

CASE NO.: BC713123

[TENTATIVE] ORDER RE: APPLICATION TO BE ADMITTED AS COUNSEL PRO HAC VICE

Date: July 8, 2020

Time: 8:30 a.m.

Dept. 56

MOVING PARTIES: Defendants John C. Depp, II and Infinitum Nihil

Defendants filed a verified application for Benjamin G. Chew (“Chew”) to specially appear as counsel pro hac vice on behalf of Defendants. The pro hac vice application of Chew is not completely compliant with California Rules of Court, Rule 9.40(c)(1) as it was not filed with a proof of service indicating that a copy of such application and notice of the hearing in connection with the application was served on the State Bar of California at its San Francisco office.

The Court, however, would like to give Defendants the opportunity to comply with the requirements of California Rules of Court, Rule 9.40 given that the pro hac vice application with respect to Chew is unopposed. (Sexton v. Superior Court (1997) 58 Cal.App.4th 1403, 1410.) The Court GRANTS the pro hac vice application of Chew conditioned on Defendants providing the Court with a proof of service indicating that his pro hac vice application and notice thereof was served on the State Bar of California at its San Francisco office.

Moving parties are ordered to give notice of this ruling.

In consideration of the current COVID-19 pandemic situation, the Court strongly encourages that appearances on all proceedings, including this one, be made by CourtCall if the parties do not submit on the tentative.  If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to SMC_DEPT56@lacourt.org

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Dated this 8th day of July 2020

Hon. Holly J. Fujie

Judge of the Superior Court

Case Number: BC691790    Hearing Date: July 01, 2020    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

KATIE O’CONNELL MARSH, etc.,

Plaintiff,

vs.

GAUMONT TELEVISION USA, LLC f.k.a. GAUMONT INTERNATIONAL TELEVISION, LLC, et al.,

Defendants.

AND RELATED CROSS-ACTION

CASE NO.: BC691790

[TENTATIVE] ORDER RE: MOTION FOR SUMMARY JUDGMENT OR, IN THE ALTERNATIVE, SUMMARY ADJUDICATION

Date: July 1, 2020

Time: 8:30 a.m.

Dept. 56

FSC: August 3, 2020

Jury Trial: August 17, 2020

MOVING PARTY: Plaintiff and Cross-Defendant Katie O’Connell Marsh (“Marsh”)

RESPONDING PARTIES: Defendants and Cross-Complainants Gaumont Television USA, LLC (“Gaumont”) and Gaumont SA (collectively “Cross-Complainants”)

The Court has considered the moving and opposition papers[1]. No reply papers were filed.

BACKGROUND

Marsh filed the operative Second Amended Complaint (“SAC”) against Defendants alleging causes of action for: (1) declaratory relief; (2) breach of contract; (3) breach of the implied covenant of good faith and fair dealing; (4) fraudulent inducement; (5) fraudulent concealment; (6) unfair competition in violation of California Business and Professions Code, Section 17200 et seq.; (7) intentional interference with contract; (8) inducing breach of contract; and (9) accounting. Plaintiff’s SAC arises from her tenure as a television executive with Gaumont Television, LLC and the alleged failure of Defendants to pay Plaintiff her share of contracted Modified Adjusted Gross Receipts (“MAGR”).

On December 2, 2019, Gaumont filed the operative Second Amended Cross-Complaint (“SAXC”) against Marsh arising from the alleged employment and termination of Marsh, alleging causes of action for: (1) breach of contract; (2) conversion; (3) possession of personal property; (4) declaratory relief pursuant to California Code of Civil Procedure, Section 1060; (5) fraudulent inducement; and (6) fraudulent concealment.

On February 24, 2020, the Court ruled on Marsh’s demurrer and motion to strike with respect to the SAXC. The Court sustained without leave to amend the demurrer of Marsh to the second, third, fifth, and sixth causes of action in the SAXC due to those causes of action being barred by the statute of limitations and Defendant’s failure to meet its burden in showing a reasonable probability that such causes of action could be asserted to state sufficient facts. The Court also granted Marsh’s motion to strike as to the SAXC without leave to amend.

Pertinent Allegations of the SAXC

The SAXC alleges, in part, that: (1) the Termination Agreement required Plaintiff to not disclose, divulge and/or use certain Materials, Trade Secrets and/or Confidential Information, and required that she return all such Materials to Defendant (SAXC at ¶ 13); (2) paragraph 9 of the Termination Agreement required that Plaintiff was to return on or before the End Date all data, files, lists, information, memoranda, documents and all other property—including phones, computer equipment, keys, fax machines, credit cards, and identification card (Id.); (3) the End Date was October 14, 2015 which was Plaintiff’s last day working at Gaumont (Id. at ¶ 15); (4) instead of returning the Materials, Trade Secrets, and Confidential information, Plaintiff wrongfully took such Materials and wrongfully used, disclosed, or divulged the Materials to third parties in competition with Gaumont (Id.); (5) Gaumont first discovered on September 28, 2018, that Plaintiff had acted in violation of the Termination Agreement, Gaumont’s policies, and its property rights, when some of the Materials were produced by Plaintiff in response to document requests propounded by Gaumont in this lawsuit (Id. at ¶ 16); (6) Gaumont could not have reasonably discovered Plaintiff’s violations and breaches before this time because prior to that date, Gaumont did not know that Plaintiff had taken the Materials upon her departure from Gaumont on October 14, 2015 (Id.); (7) Gaumont surmises that Plaintiff took the Materials on or before October 2, 2015, which is when she purchased Gaumont’s computer laptop (the “Laptop”) that she had been using as CEO, and the Laptop contains most if not all of the Materials that were taken (Id.); and (8) on the same day she purchased the Laptop, Plaintiff sent her representatives an e-mail asking for all Gaumont property—which would have included the Materials—to be returned to Gaumont (Id.).

The SAXC further alleges that: (1) following that request, and Plaintiff’s physical departure from Gaumont, Plaintiff executed the Termination Agreement on or about October 19, 2015, in which she agreed to return all Gaumont property (Id.); (2) because she did not return any of the Materials following her execution of the Termination Agreement, Gaumont was and is entitled to presume and expect that Plaintiff would abide by her contractual obligations (Id.); (3) Gaumont had the reasonable belief that any Gaumont documents that may have been in Plaintiff’s possession while she was still employed at Gaumont had been destroyed following her departure, such that she did not have any Gaumont property once she had executed the Termination Agreement including the Materials that were on her Laptop (Id.); and (4) because Plaintiff retained possession of the Laptop, it was impossible for Gaumont to know what was on it. (Id.)

With respect to the breach of contract cause of action in the SAXC, Gaumont alleges that: (1) Marsh breached the Termination Agreement by wrongfully taking the materials, wrongfully disclosing, divulging and/or using Gaumont’s Materials to its detriment (SAXC at ¶ 25); (2) Marsh has refused to provide Gaumont with a list of the materials she wrongfully took (Id.); (3) Marsh has refused disclose to Gaumont how and when she has wrongfully disclosed, divulged and/or used such Materials (Id.); (4) Marsh has failed to return all Materials to Gaumont (Id.); and (5) Marsh breached the Termination Agreement by wrongfully discussing and/or disclosing the terms of the Termination Agreement and/or disparaging Gaumont and/or its employees or officers in the context of their Gaumont business and professional activities. (Id.)

The Instant Motion

On February 18, 2020, Marsh filed a motion for summary judgment or, in the alternative, summary adjudication of the causes of action in the SAXC. Marsh contends that there is no triable issue of fact and the claims in the SAXC fail as a matter of law because they are time-barred or otherwise fail to state a cause of action. Marsh asserts that: (1) the second, third, fifth, and sixth causes of action in the SAXC are barred by the statute of limitations; (2) the first, second, fifth, and sixth causes of action fail because Gaumont cannot establish that it was damaged by Marsh’s alleged actions; and (3) the fourth cause of action in the SAXC for declaratory relief fails. If summary judgment is not granted, Marsh moves for summary adjudication on the following issues: (1) the second, third, fifth, and sixth causes of action in the SAXC are all barred by the applicable statute of limitations to such claims; (2) the first, second, fifth, and sixth causes of action do not establish the required element of damages; and (3) the fourth cause of action for declaratory relief has no merit because it is improperly redundant of the issues in the SAC, Gaumont’s affirmative defenses thereto, Gaumont’s first cause of action for breach of contract, and it improperly seeks to redress past wrongs.

Cross-Complainants oppose Marsh’s motion on the grounds that: (1) Gaumont has been damaged by Marsh’s breach of contract; and (2) the declaratory relief claim seeks remedies not covered by the breach of contract claim.

Cross-Complainants’ opposition papers indicate that Gaumont solely is objecting to Marsh’s evidence and request for judicial notice, and that Gaumont only is presenting facts in opposition to Marsh’s separate statements. The opposition memorandum points of authorities, however, indicates that it is brought on behalf of both Cross-Complainants. The Court will refer to the opposition papers as they are titled by the opposing parties for purposes of accuracy.

The Scope of the Instant Motion

“The pleadings play a key role in the summary judgment motion.” (Hutton v. Fidelity National Title Co. (2013) 213 Cal.App.4th 486, 493.) “The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues and to frame the outer measure of materiality in a summary judgment proceeding.” (Id.) “The materiality of a disputed fact is measured by the pleadings . . . which set the boundaries of the issues to be resolved at summary judgment.” (Id.) “[T]he burden of a [cross-defendant] moving for summary judgment only requires that he or she negate plaintiff’s theories of liability as alleged in the complaint.” (Id.) “The procedure for resolving a summary judgment motion presupposes that the pleadings are adequate to put in issue a cause of action.” (FPI Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 382.) “[A] pleading may be defective in failing to allege an element of a cause of action.” (Id.) “In such a case, the moving party need not address a missing element nor, obviously, respond to assertions which . . . make out no recognizable legal claim. The summary judgment proceeding is thereby necessarily transmuted into a test of the pleadings and the summary judgment motion into a motion for judgment on the pleadings.” (Id.)

The Court, on its own motion, takes judicial notice of its February 24, 2020 ruling with respect to the demurrer and motion to strike in connection with the SAXC. Due to the Court’s ruling on the demurrer to the SAXC and sustaining it without leave to amend, the Court finds that Marsh’s motion for summary judgment or, in the alternative, summary adjudication is MOOT as to the second, third, fifth, and sixth causes of action in the SAXC as the Court found such causes of action insufficient to state a claim for relief via Marsh’s demurrer to the SAXC. Due to the SAXC being defective with respect to those causes of action, Marsh need not have addressed them in her motion for summary judgment under FPI.[2]

Thus, the Court will only address Marsh’s arguments with respect to the first and fourth causes of action in the SAXC and this Court’s ruling will only analyze the first and fourth causes of action in connection with Marsh’s motion for summary judgment or, in the alternative, summary adjudication.

Separate Statement in Connection with the Opposition

California Rules of Court, Rule 3.1350(f)(2) says that in opposition to the moving party’s separate statement “the response must unequivocally state whether the fact is disputed or undisputed. An opposing party who contends that a fact is disputed must state, on the right side of the page directly opposite the fact in dispute, the nature of the dispute and describe the evidence that supports the position that the fact is disputed.” California Rules of Court, Rule 3.1350(f)(2) says that “[c]itation to the evidence in support of each material fact must include reference to the exhibit, title, page, and line numbers.”

There are numerous instances in Gaumont’s separate statement in opposition to Marsh’s motion where Gaumont indicates that: (1) a fact is undisputed but refers the Court to their evidentiary objection because such fact is alleged to be irrelevant; (2) a fact is undisputed but moot in light of the Court’s ruling on the demurrer to the SAXC; and (3) disputed but moot in light of the Court’s ruling on the demurrer to the SAXC. In instances where Gamount disputes a fact but deems it irrelevant to the Court’s ruling on the demurrer to the SAXC without citing any evidence, the Court finds that Gaumont did not comply with the mandate of California Rules of Court, Rule 3.1350(f)(2).

JUDICIAL NOTICE

Marsh’s request for judicial notice is GRANTED. Gaumont objects to Marsh’s request for judicial notice to the extent that Marsh is seeking judicial notice of the truth of the contents of the documents. “[W]hile courts are free to take judicial notice of the existence of each document in a court file, including the truth of results reached, they may not take judicial notice of the truth of hearsay statements in decisions and court files.” (Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882.) “Courts may not take judicial notice of allegations in affidavits [and] declarations . . . in court records because such matters are reasonably subject to dispute and therefore require formal proof.” (Id.) Thus, to the extent that Marsh is requesting the Court to take judicial notice of the truth of the matters asserted therein, the Court SUSTAINS Gaumont’s objections to Marsh’s request for judicial notice with respect to exhibits 2, 3, 7, and 14.

The Court GRANTS Gaumont’s request for judicial notice.

EVIDENTIARY OBJECTIONS

The Court SUSTAINS Gaumont’s evidentiary objections numbers 1-9 to the evidence submitted by Marsh in support of her motion for summary judgment or, in the alternative, summary adjudication.

Marsh did not file any evidentiary objections whatsoever to the evidence in support of Cross-Complainants’ opposition to her motion for summary judgment or, in the alternative, summary adjudication.

DISCUSSION

“The purpose of the law of summary judgment is to provide the courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) “Summary judgment is appropriate when all of the papers submitted show there is not triable issue of material fact and the moving party is entitled to a judgment as a matter of law.” (Hutton v. Fidelity National Title Co. (2013) 213 Cal.App.4th 486, 492.)

A cross-defendant “moving for summary judgment has the burden of showing one or more elements of the cause of action . . . cannot be established, or that there is a complete defense to that cause of action.” (Sangha v. LaBarbera (2006) 146 Cal.App.4th 79, 84.) In reviewing a motion for summary judgment or summary adjudication a court examines “the moving party’s motion, including the evidence offered in support of the motion.” (Dollinger DeAnza Associates v. Chicago Title Ins. Co. (2011) 199 Cal.App.4th 1132, 1144.) “In determining whether the parties have met their respective burdens, the court must consider all the evidence and all the inferences reasonably drawn therefrom . . . and must view such evidence . . . and such inferences . . . in the light most favorable to the opposing party.” (Id.) “There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Id.) “[A] party cannot avoid summary judgment by asserting facts based on mere speculation and conjecture, but instead must produce admissible evidence raising a triable issue of fact.” (Id. at 1144-1145.)

“Summary adjudication motions are procedurally identical to summary judgment motions.” (Serri v. Santa Clara University (2014) 226 Cal.App.830, 859.) “A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contends that the cause of action has no merit . . . [or] that there is no merit to a claim for damages.” (Code Civ. Proc. § 437c(f)(1).) “A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Id., emphasis added.) Summary judgment is a drastic remedy. (San Diego Watercrafts, Inc. v. Wells Fargo Bank, N.A. (2002) 102 Cal.App.4th 308, 316.)

Issue No.1: First Cause of Action in the SAXC

Marsh contends that Gaumont cannot establish that it was damaged by her alleged breach of contract and that the breach of contract cause of action in the SAXC is based on her “wrongfully taking the Materials, and, on information and belief, wrongfully disclosing, divulging and/or using Gaumont’s Material’s to Gaumont’s detriment.” (SAXC at ¶ 25; Motion at 21: 16-20.)

“A cause of action for breach of contract requires proof of the following elements: (1) existence of the contract; (2) plaintiff’s performance of excuse for nonperformance; (3) defendant’s breach; and (4) damages to plaintiff as a result of the breach.” (CDF Firefighters v. Maldonado (2008) 158 Cal.App.4th 1226, 1239.) “Damages which are remote, contingent, or merely possible cannot serve as a legal basis for recovery.” (California Shoppers, Inc. v. Royal Globe Ins. Co. (1985) 175 Cal.App.3d 1, 62.) “A wrongful act . . . causing only nominal damages, speculative harm, or the threat of future harm—not yet realized—does not suffice to create a cause of action.” (Garver v. Brace (1996) 47 Cal.App.4th 995, 999.) California Labor Code, Section 2860 says that “[e]verything which an employee acquires by virtue of his employment, except the compensation which is due to him from his employer, belongs to the employer, whether acquired lawfully or unlawfully, or during or after the expiration of the term of his employment.”

“One proper measure of damages for breach of contract is the amount expended [by the nonbreaching party] on the faith of the contract.” (Agam v. Gavra (2015) 236 Cal.App.4th 91, 105.) “This measure of damages often is referred to as reliance damages.” (Id.) “It has been held to apply where . . . one party to [an agreement] fails and refuses to carry out the terms of the agreement, and thereby deprives the other party of the opportunity to make good [on the agreement].” (Id.) “Concerning reliance damages . . . the injured party has the right to damages based on his reliance interest, including expenditures made in preparation for performance or in performance, less any loss that the party in breach can prove with reasonable certainty the injured party would have suffered had the contract been performed.” (U.S. Ecology, Inc. v. State of California (2005) 129 Cal.App.4th 887, 907, emphasis in original.) “Lost profits may be recoverable as damages for breach of contract.” (Sargon Enterprises, Inc. v. University of Southern California (2012) 55 Cal.4th 747, 773.) “Historical data, such as past business volume, supply an acceptable basis for ascertaining future lost profits.” (Id. at 774.) “In general, [a] person who has been unjustly enriched at the expense of another is required to make restitution to the other.” (Unilogic, Inc. v. Burroughs Corp. (1992) 10 Cal.App.4th 612, 627.) “In [some] situations, a benefit has been received by the [cross-defendant] but the [cross-complainant] has not suffered a corresponding loss or, in some cases, any loss, but nevertheless the enrichment of the [cross-defendant] would be unjust. In such cases, the [cross-defendant] may be under a duty to give the [cross-complainant] the amount by which he [or she] has been enriched.” (Id. at 628.) “A [cross-defendant’s] unjust enrichment is typically measured by the [cross-defendant’s] profits flowing from the misappropriation.” (Ajaxo, Inc. v. E*Trade Financial Corp. (2010) 187 Cal.App.4th 1295, 1305.) “Where the [cross-complainant’s] loss does not directly correlate with the misappropriator’s benefit . . . the problem becomes more complex.” (Id.) “A [cross-defendant’s] unjust enrichment [in that case] might be calculated based upon cost savings or increased productivity resulting from use of the secret.” (Id.)

Marsh’s Evidence

Marsh presents the undisputed material facts that: (1) she and Gaumont entered into an “Employment Agreement” dated September 10, 2015 (UMF 1); (2) Marsh and Gaumont entered into an agreement dated September 20, 2015 with respect to the termination of her duties as Gaumont’s Chief Executive Officer (the “Termination Agreement”) (UMF 5); (3) the Termination Agreement contains a paragraph entitled “TRADE SECRETS AND CONFIDENTIAL INFORMATION” which stated in part that Marsh agreed to return “on or before the End Date all data, files, list information, memoranda, documents, and all other property . . . belonging to GIT or containing Trade Secrets of GIT” (UMF 6); (4) the Termination Agreement indicated that Marsh would not “without express written consent of GIT unless required by law, disclose or divulge to any other person or entity, or use or modify for use, directly or indirectly in any way for any person or entity . . . any of GIT’s Confidential Information” (UMF 6); (5) the End Date of the Termination Agreement was October 14, 2015 (UMF 6); (6) the Termination Agreement contained provision which stated that Marsh would not discuss or disclose any terms of the Termination Agreement with anyone “other than her spouse, attorney and/or accountant and/or financial advisor” (UMF 8); (7) she testified at her deposition in this action that she never has shown any of the documents, including e-mails, on the Laptop to anyone connected to Platform One Media, LLC (UMF 9); (8) she testified at her deposition that she has never discussed any financial information regarding Gaumont with anyone connected to Platform One (UMF 10); and (9) Neil Strum, who was deposed in this case as Platform One’s Person Most Knowledgeable, testified that he had never seen any document that had financial information relating to Gaumont and that to his knowledge Platform One does not have any documents that refer to Gaumont. (UMF 11.)

Marsh presents the undisputed facts that: (1) she has not disclosed the terms of the Termination Agreement to anyone other than her attorneys, her husband, her accountant, and her financial advisor (UMF 12); (2) Gaumont employee Tim Stephen testified at his deposition in this action that he does not believe that it is a secret that Gaumont grants MAGR interests in its television series (UMF 13); (3) in connection with her departure from Gaumont, Marsh asked to be permitted to keep her Laptop (UMF 20); (4) she and Gaumont agreed that she could purchase her Laptop for $600.00 (UMF 21); (5) she delivered a $600.00 check to Gaumont as payment for the Laptop on October 2, 2015, which Gaumont negotiated on October 7, 2015 (UMF 22); (6) she executed the Termination Agreement on or about October 19, 2015 (UMF 23); (7) Gaumont knew at the time she executed the Termination Agreement that she was in possession of materials Gaumont now claims are privileged (UMF 24); and (8) no employee ever wiped her Laptop or asked her to do so (UMF 32.)

Marsh declares that no one from Gaumont asked her to wipe any information from the Laptop, asked her to provide the Laptop to Gaumont IT personnel or anyone else so they could remove any information from it, in connection with the purchase of the Laptop or her departure from Gaumont. (Marsh Decl. at ¶ 9.)

The Court finds that Marsh has met her burden in showing that there is no triable issue of fact with respect to damages for her alleged breach of contract. The burden now shifts to Cross-Complainants to show a triable issue of material fact.

Cross-Complainants’ Evidence

Declaration of Tim Stephen

Cross-Complainants present the declaration of Tim Stephen (“Stephen”) who relevantly declares that: (1) he is the Executive Vice President of Strategy and Head of Business and Legal Affairs of Gaumont (Stephen Decl. at ¶ 1); (2) Marsh signed an employment agreement (the “Employment Agreement” (Stephen Decl. at ¶ 2 and Exhibit 3); (3) during her employment with Gaumont, Marsh utilized the Laptop that was owned by Gaumont and he understands that she requested that she be permitted to purchase the Laptop from Gaumont at the end of her employment and that she claims she did so with a check to Gaumont for $600.00 (Id. at ¶ 4); (4) during her employment, Marsh oversaw the preparation of an employee handbook (the “Employee Handbook”) that codified the existing obligations of employees such as herself (Id. at ¶ 5 and Exhibit D); (5) on October 2, 2015, due to the importance of confidential and trade secret documents and information (the “Property”) to Gaumont and Gaumont’s desire to not have ex-employees like March keep possession of such documents and information, Gaumont requested that Marsh return all the Property in her possession to Gaumont (Id. at ¶ 8 and Exhibit F); and (6) the Termination Agreement was entered into between Marsh and Gaumont. (Id. at ¶ 9 and Exhibit G.)

Stephen further declares that: (1) since Marsh already had possession of the Laptop, returning the Property could and should have been accomplished by her deleting the Property from the Laptop, in which case she would have nothing to physically return (Id. at ¶ 10); (2) neither he nor anyone else at Gaumont was aware that Marsh had not deleted the Property from the Laptop until on or after September 18, 2018 (Id.); (3) neither he nor anyone else at Gaumont could have discovered that Marsh had not deleted the Property from the Laptop at the time of the signing of the Termination Agreement because at the time Marsh had physical possession of the Laptop (Id.); (4) he has reviewed some of the documents produced by Marsh in this litigation on September 28, 2018 (Id. at ¶ 11); (5) these documents contain the most private and confidential information that Gaumont possesses such as internal agreements, its employment agreements, business strategy documents, negotiating postures, evaluations of potential clients, financial statements, and internal financial projections (Id.); (6) in its agreements with employees, Gaumont includes provisions providing for the confidentiality and return of its confidential information such as the documents that comprise the Property (Id. at ¶ 12); (7) as of today, under terms of the Termination Agreement, after October 15, 2015, Gaumont has paid Marsh a total of $605,934.55, which includes severance payments and other compensation (Id. at ¶ 14); (8) at present, because the full range of documents taken by Marsh has not been made available to Gaumont, the full amount of lost profits cannot be determined, although once that occurs it is likely to be in the millions of dollars (Id. at ¶ 15); and (9) the documents attached as Exhibit H to the declaration of counsel for Cross-Complainants Michael Plonsker (“Plonsker”) also contain confidential, trade secret, and privileged information regarding confidential agreements with third parties, sales information, sales methods, business plans, strategic and long-range plans, customer lists, prospective customer names, and budgets. (Id. at ¶ 13.)

Declaration of Plonsker

Plonsker relevantly declares that: (1) he first discovered that Marsh had wrongfully kept possession of the Property when, on September 18, 2018, she produced 60,000 pages of documents in response to document requests in this case (Plonsker Decl. at ¶¶ 2-3 and Exhibit E); (2) upon learning that Marsh had some documents constituting part of the Property in her possession, he immediately demanded to her attorneys that all of the Property in her possession be returned to Gaumont (Id. at ¶ 4); (3) Marsh and her attorneys repeatedly refused to return the Property (Id. at ¶ 4 and Exhibit F); (4) Mr. Berlinski has admitted on behalf of Marsh that she has up to 350,000 documents of the Property and that such documents have been uploaded onto her attorney’s document server (Id. at ¶ 5 and Exhibit G); and (5) despite his requests, Marsh and her attorneys have refused to provide Gaumont access to the Laptop so that they can assess what Property she wrongfully took, provide Gaumont with a list of the Property she wrongfully took , and have failed to return all the Property to Gaumont. (Id. at ¶ 7.)

Analysis

The Court finds that Cross-Complainants have meet their burden in showing a triable issue of material fact with respect to damages under Agam and Unilogic. Stephen indicated that Gaumont paid Marsh $605,934.55 pursuant to the Termination Agreement. Cross-Complainants have presented evidence that: (1) Marsh did not comply with the terms of the Termination Agreement; and (2) Gaumont has been damaged as a result. The evidence presented by Cross-Complainants shows that Gaumont expended $605,934.55 in performing under the Termination Agreement. Under Dollinger, the Court finds that Cross-Complainants have presented evidence that they were damaged by Marsh’s breach.

The Court DENIES Marsh’s motion for summary judgment with respect to Gaumont being unable to establish it was damaged by her alleged actions. The Court will now proceed to analyze summary adjudication.

The Court also DENIES Marsh’s request for summary adjudication as to Issue 1 in her motion as Gaumont has presented evidence to establish that it was damaged by her alleged actions.

Issue No.2: Fourth Cause of Action in the SAXC

“[S]ummary judgment may be had in a declaratory relief action since [t]he propriety of the application of declaratory relief lies in the trial court’s function to render such a judgment when only legal issues are presented for its determination.” (Las Tunas Beach Geologic Hazard Abatement Dist. v. Superior Court (1995) 38 Cal.App.4th 1002, 1015.) “[I]n a declaratory relief action, the defendant’s burden is to establish the plaintiff is not entitled to a declaration in its favor. It may do this by establishing (1) the sought-after declaration is legally incorrect; (2) undisputed facts do not support the premise for the sought-after declaration; or (3) the issue is otherwise not one that is appropriate for declaratory relief.” (Gafcon, Inc. v. Ponsor & Associates (2002) 98 Cal.App.4th 1388, 1402.) “[D]eclaratory relief operates prospectively, and not merely for redress of past wrongs.” (Id. at 1403.) “Normally . . . a person is entitled to a determination of the issues presented by the pleadings.” (International Ass’n of Fire Fighters, Local No. 1319, AFL-CIO v. City of Palo Alto (1963) 60 Cal.2d 295, 301.) “[S]ection 1061 of the Code of Civil Procedure expressly provides that the trial court may refuse to grant declaratory relief in any case where its declaration or determination is not necessary or proper at the time under all the circumstances.” (Id.) “This is a discretionary power . . . but should not be exercised in a case where a declaration of rights is clearly called for.” (Id.) “In determining this question in a case where declaratory relief is sought by cross-complaint, it is important to consider whether the issues and evidence presented in the main case are substantially the same as would be produced under the cross-complaint.” (Id.)

Marsh’s Evidence

Marsh presents the undisputed facts that: (1) in the fourth cause of action for declaratory relief in the SAXC, Cross-Complainants seek a judicial declaration that because of Marsh’s material breach of the Termination Agreement, Gaumont is excused from further performing any of its duties pursuant to the Termination Agreement, including the obligation to pay an MAGR bonus to Marsh and any Green Light Bonus (UMF 73); (2) in the fourth cause of action for declaratory relief in the SAXC, Cross-Complainants seek a judicial declaration that any payments Marsh received under the terms of the Termination Agreement must be returned to Gaumont including the Severance Payment and the Green Light Bonuses (UMF 73); (3) in the thirteenth affirmative defense in its answer to the SAC, Gaumont alleges that Marsh’s SAC and each cause of action is barred by her own material breaches of the contracts described in the SAC in this action (UMF 74); and (4) in the fifteenth affirmative defense in its answer to the SAC, Gaumont alleges that its “alleged actions and/or alleged failures were excused, in whole or in part, by acts and omissions of Plaintiff and/or third parties.” (UMF 75.)

Analysis

The Court finds that summary adjudication as to the fourth cause of action for declaratory relief in the SAXC is inappropriate. (SAXC at ¶ 46.) The undisputed material facts indicate that Gaumont is seeking a prospective declaration of some of its rights under the Termination Agreement. (UMF 73.) Marsh has failed to meet her burden in showing that Cross-Complainants are not entitled to a declaration in their favor. Cross-Complainants seek declaratory relief “so that Gaumont may ascertain its ongoing rights and obligations under the Termination Agreement.” (SAXC at ¶ 47.) Cross-Complainants’ claim for declaratory relief is proper under Gafcon. The declaratory relief cause of action in the SAXC is not duplicative of the breach of contract cause of action in the SAXC as both causes of action are grounded upon different acts and do not seek the same relief. (SAXC at ¶¶ 23-28, 44-47.) The SAC is premised on the alleged failure of Defendants to pay Plaintiff her share of contracted MAGR. The SAXC, however, is premised on Marsh’s alleged failure to return Gaumont’s property and confidential materials. The declaratory relief cause of action in the SAXC is not duplicative of Gaumont’s affirmative defenses with respect to the SAC.

Therefore, the Court DENIES Marsh’s request for summary adjudication as to Issue 5 in her motion with respect to the claim for declaratory relief in the SAXC.

Marsh’s motion for summary judgment or, in the alternative, summary adjudication is DENIED in its entirety.

Moving party is ordered to give notice of this ruling.

In consideration of the current COVID-19 pandemic situation, the Court strongly encourages that appearances on all proceedings, including this one, be made by CourtCall if the parties do not submit on the tentative.  If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to SMC_DEPT56@lacourt.org

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Dated this 1st day of July 2020

Hon. Holly J. Fujie

Judge of the Superior Court


[1] This ruling concerns the motion for summary judgment or, in the alternative summary adjudication filed by Marsh with the reservation number of 861911459031. The Court sets forth the reservation number in connection with the motion due to the numerous motions for summary judgment or summary adjudication filed by the respective parties.

[2] The demurrer as to the SAXC was still pending and had not yet been heard when Marsh filed the motion for summary judgment or, in the alternative, summary adjudication.

Case Number: BC691790    Hearing Date: February 24, 2020    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

KATIE O’CONNELL MARSH, etc.,

Plaintiff,

vs.

GAUMONT TELEVISION USA, LLC f.k.a. GAUMONT INTERNATIONAL TELEVISION, LLC, et al.,

Defendants.

AND RELATED CROSS-ACTION

CASE NO.: BC691790

[TENTATIVE] ORDER RE: DEMURRER TO SECOND AMENDED CROSS-COMPLAINT; MOTION TO STRIKE

Date: February 24, 2020

Time: 8:30 a.m.

Dept. 56

FSC: August 3, 2020

Jury Trial: August 17, 2020

MOVING PARTY: Plaintiff and Cross-Defendant Katie O’Connell Marsh (“Plaintiff”)

RESPONDING PARTY: Defendant and Cross-Complainant Gaumont Television USA, LLC (“Defendant”)

The Court has considered the moving, opposition, and reply papers.

BACKGROUND

Plaintiff filed the operative Second Amended Complaint (“SAC”) against Defendants alleging causes of action for: (1) declaratory relief; (2) breach of contract; (3) breach of the implied covenant of good faith and fair dealing; (4) fraudulent inducement; (5) fraudulent concealment; (6) unfair competition in violation of California Business and Professions Code, Section 17200 et seq.; (7) intentional interference with contract; (8) inducing breach of contract; and (9) accounting. Plaintiff’s SAC arises from her tenure as a television executive with Gaumont Television, LLC and the alleged failure of Defendants to pay Plaintiff her share of contracted Modified Adjusted Gross Receipts (“MAGR”).

On December 2, 2019, Defendant filed the operative Second Amended Cross-Complaint (“SAXC”) against Plaintiff arising from the alleged employment and termination of Plaintiff, alleging causes of action for: (1) breach of contract; (2) conversion; (3) possession of personal property; (4) declaratory relief pursuant to California Code of Civil Procedure, Section 1060; (5) fraudulent inducement; and (6) fraudulent concealment.

Plaintiff filed a demurrer to the second, third, fifth, and sixth causes of action in the SAXC. Plaintiff demurs to the SAXC on the grounds that: (1) the second, third, fifth, and sixth causes of action are barred by the statute of limitations; (2) the fifth and sixth causes of action both fail to state facts sufficient to state a cause of action; and (3) the second, third, and sixth causes of action are barred by the economic loss rule. Plaintiff also filed a motion to strike the third cause of action from the SAXC. Defendant failed to file an opposition to Plaintiff’s motion to strike with respect to the SAXC.

MEET AND CONFER

The meet and confer requirement has been met.

JUDICIAL NOTICE

Plaintiff’s requests for judicial notice are GRANTED.

DEMURRER

“A demurrer tests the sufficiency of a complaint as a matter of law.” (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1358.) “[T]he court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded.” (Id.) “The court accepts as true all material factual allegations, giving them a liberal construction, but it does not consider conclusions of fact or law, opinions, speculation, or allegations contrary to law or judicially noticed facts.” (Shea Homes Limited Partnership v. County of Alameda (2003) 110 Cal.App.4th 1246, 1254.) With respect to a demurrer “[t]he complaint must be construed liberally by drawing reasonable inferences from the facts pleaded.” (Rodas v. Spiegel (2001) 87 Cal.App.4th 513, 517.) “On demurrer, all material facts properly pleaded and all reasonable inferences which can be drawn therefrom are deemed admitted.” (Bush v. California Conservation Corps (1982) 136 Cal.App.3d 194, 198.) A demurrer will be sustained without leave to amend if there exists no “reasonable possibility that the defect and be cured by amendment.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “The burden of proving such reasonable possibility is squarely on the plaintiff.” (Id.) “[I]t is well settled that the presumptions are always against the pleader, and all doubts are to be resolved against him, for it is presumed that he stated his case as favorably as possible to himself.” (Richmond Redevelopment Agency v. Western Title Guaranty Co. (1975) 48 Cal.App.3d 343, 349.) “The courts . . . will not close their eyes to situations where a complaint contains allegations of fact inconsistent with attached documents, or allegations contrary to facts which are judicially noticed.” (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604.)

Issue No. 1: The Statute of Limitations

California Code of Civil Procedure, Section 338(b)(1) provides for a three-year statute of limitations for “[a]n action for trespass or injury to real property.” California Code of Civil Procedure, Section 338(c)(1) provides for a three-year statute of limitations for “[a]n action for taking, detaining, or injuring goods or chattels, including an action for the specific recovery of personal property.” “An action for relief on the grounds of fraud . . . must be commenced within three years.” (Kline v. Turner (2001) 87 Cal.App.4th 1369, 1373.) A cause of action for conversion has a statute of limitations of three years. (AmerUS Life Ins. Co. v. Bank of America, N.A. (2006) 143 Cal.App.4th 631, 639.) “[T]he statute of limitations for conversion is triggered by the act of wrongfully taking property.” (Id.)

“An action for relief on the grounds of fraud or mistake must be commenced within three years. However, such action is not deemed accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.” (Kline v. Turner (2001) 87 Cal.App.4th 1369, 1373-1374.) “The courts interpret discovery in this context to mean not when the plaintiff became aware of the specific wrong alleged, but when the plaintiff suspected or should have suspected that an injury was caused by wrongdoing.” (Id. at 1374.) “The statute of limitations begins to run when the plaintiff has information which would put a reasonable person on inquiry.” (Id.) “The discovery rule only delays accrual until the plaintiff has, or should have, inquiry notice of the cause of action.” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807.) “In order to rely on the discovery rule for delayed accrual of a cause of action, [a] plaintiff whose complaint shows on its face that [its] claim would be barred without the benefit of the discovery rule must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.” (Id. at 808.) “[I]n order to employ the discovery rule to delay accrual of a cause of action, a potential plaintiff who suspects that an injury has been wrongfully caused must conduct a reasonable investigation of all potential causes of that injury.” (Id.) To invoke the discovery rule a party “must plead facts showing that he [or she] was not negligent in failing to make the discovery sooner and that he [or she] had no actual or presumptive knowledge of facts sufficient to put him on inquiry.” (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1472.) “The standard for accrual of the statute of limitation under the discovery rule is not the receipt of documentary evidence” but whether a party “was on notice of a potential claim.” (MGA Entertainment, Inc. v. Mattel, Inc. (2019) 41 Cal.App.5th 554, 563.) Once a party has “reason to suspect an injury and some wrongful cause” then “the statute of limitation[s] [begins] to run.” (Id. at 564.)

Pertinent Factual Allegations of the SAXC

The SAXC alleges that: (1) the Termination Agreement required Plaintiff to not disclose, divulge and/or use certain Materials, Trade Secrets and/or Confidential Information, and required that she return all such Materials to Defendant (SAXC at ¶ 13); (2) paragraph 9 of the Termination Agreement required that Plaintiff was to return on or before the End Date all data, files, lists, information, memoranda, documents and all other property—including phones, computer equipment, keys, fax machines, credit cards, and identification card (Id.); (3) the End Date was October 14, 2015 which was Plaintiff’s last day working at Gaumont (Id. at ¶ 15); (4) instead of returning the Materials, Trade Secrets, and Confidential information, Plaintiff wrongfully took such Materials and wrongfully used, disclosed, or divulged the Materials to third parties in competition with Gaumont (Id.); (4) Gaumont first discovered on September 28, 2018, that Plaintiff had acted in violation of the Termination Agreement, Gaumont’s policies, and its property rights, when some of the Materials were produced by Plaintiff in response to document requests propounded by Gaumont in this lawsuit (Id. at ¶ 16); (5) Gaumont could not have reasonably discovered Plaintiff’s violations and breaches before this time because prior to that date, Gaumont did not know that Plaintiff had taken the Materials upon her departure from Gaumont on October 14, 2015 (Id.); (6) Gaumont surmises that Plaintiff took the Materials on or before October 2, 2015, which is when she purchased Gaumont’s computer laptop that she had been using as CEO, and the computer contains most if not all of the Materials that were taken (Id.); and (7) on the same day she purchased the computer, Plaintiff sent her representatives an e-mail asking for all Gaumont property—which would have included the Materials—to be returned to Gaumont (Id.).

The SAXC further alleges that: (1) following that request, and Plaintiff’s physical departure from Gaumont, Plaintiff executed the Termination Agreement on or about October 19, 2015, in which she agreed to return all Gaumont property (Id.); (2) because she did not return any of the Materials following her execution of the Termination Agreement, Gaumont was and is entitled to presume and expect that Plaintiff would abide by her contractual obligations (Id.); (3) Gaumont had the reasonable belief that any Gaumont documents that may have been in Plaintiff’s possession while she was still employed at Gaumont had been destroyed following her departure, such that she did not have any Gaumont property once she had executed the Termination Agreement including the Materials that were on her Computer (Id.); and (4) because Plaintiff retained possession of the Computer, it was impossible for Gaumont to know what was on it. (Id.)

Allegations Specific to the Second Cause of Action

Pursuant to the second cause of action in the SAXC, Defendant alleges that: (1) on or between October 2 and or about October 14, 2015, Plaintiff wrongfully converted the documents containing Gaumont’s Materials (Id. at ¶ 31); and (2) Gaumont discovered Plaintiff wrongfully took the Materials on or around September 18, 2018. (Id.)

Allegations Specific to the Third Cause of Action

Pursuant to the third cause of action in the SAXC, Defendant alleges that: (1) Plaintiff wrongfully and without Gaumont’s consent took possession of the Materials (Id. at ¶ 38); (2) Gaumont discovered Plaintiff wrongfully took the materials on or around September 18, 2018 when Plaintiff produced in this action some of the documents that constitute the Materials (Id.); and (3) Gaumont could not have known and still does not know when Plaintiff took its Materials (Id.)

Allegations Specific to the Fifth Cause of Action

Pursuant to the fifth cause of action in the SAXC, Defendant alleges that: (1) on or before September 30, 2015 through or about October 19, 2015, at the time that she was negotiating the Termination Agreement, Plaintiff and her attorneys represented orally and in writing that she would return all Materials to Gaumont (Id. at ¶ 49); (2)Plaintiff failed to return such Materials as she was required to do at the time of her departure from Gaumont but she took the Computer with her at the end of her employment knowing that the Materials were on it (Id. at ¶ 50); (3) Gaumont learned Plaintiff wrongfully took the Materials and did not destroy them on or around September 18, 2018 (Id.); and (3) Gaumont could not have known and still does not know when Plaintiff took its Trade Secrets and Confidential Information. (Id.)

Allegations Specific to the Sixth Cause of Action

Pursuant to the sxith cause of action in the SAXC, Defendant alleges that: (1) on or before September 30, 2015 through or about October 19, 2015, at the time that she was negotiating the Termination Agreement, Plaintiff fraudulently concealed that she had Materials belonging to Gaumont on her Computer and she had no intention of returning them to Gaumont upon her departure (Id. at ¶56); (2) Plaintiff failed to return such materials as she was required to do at the time of her departure from Gaumont but she took the Computer with her at the end of her employment knowing that the Materials were on it (Id. at ¶ 57); (3) Gaumont learned Plaintiff wrongfully took the materials and did not destroy them on or around September 18, 2018 (Id.); and (4) Gaumont could not have known and still does not know when Plaintiff took its Trade Secrets and Confidential Information. (Id.)

Analysis

The statute of limitations on the second, third, fifth, and sixth causes of action began to run in October 2015 based on the allegations in the SAXC. The SAXC clearly alleges that by the End Date of October 14, 2015, which was when Plaintiff was supposed to return all property to Defendant and that Plaintiff wrongfully took such Materials and disclosed them instead of returning the Materials. The SAXC further alleges that Defendant surmises that Plaintiff took such Materials on or before October 2, 2015, which is when she purchased Defendant’s laptop computer that she had been using as CEO.

The Court finds that Defendant cannot invoke the discovery rule. The SAXC pled that: (1) Plaintiff was required to return all Materials, Trade Secrets, and Confidential Information; and (2) Plaintiff purchased the computer that she had used while being CEO of Defendant. It can be inferred from the allegations both impliedly and expressly that Plaintiff failed to return all such materials by the October 14, 2015 End Date. The SAXC pleads no facts that, despite Plaintiff purchasing the same computer she had used while CEO of Defendant and Plaintiff being obligated to return all Materials and no Materials being returned whatsoever, Defendant did not inquire sooner about the lack of any Materials being returned to it. Thus, Defendant should have had some indicia of presumptive knowledge that some wrongdoing had been committed as early as October 2015.

Additionally, Defendant has failed to show any facts indicating reasonable diligence on its behalf with respect to the Materials. There is no indication that, between the End Date or execution of the Termination Agreement and the time that Defendant allegedly discovered on September 28, 2018 that Plaintiff acted in violation of the Termination Agreement, Defendant acted with reasonable diligence to ascertain whether Plaintiff had the Materials in her possession. The facts pled in the SAXC lead to an inference that Defendant was negligent in failing to make the inquiry and discovery sooner with respect to the Materials. Defendant should have suspected soon after the End Date and after the execution of the Termination Agreement that because no Materials were returned to it, that it had sustained some sort of injury. The notion that Defendant thought such Materials were destroyed does not change the fact that such Materials were never returned to it by the End Date or right after the execution of the Termination Agreement in any event. Also, Gaumont has indicated that it knew at the time the Termination Agreement was signed that it was aware that Plaintiff possessed confidential and/or privileged material[1]. (RJN, Exhibit C at 1:10-12.) Under MGA, the receipt of Plaintiff’s document requests does not trigger the accrual of the statute of limitation.

Defendant filed the initial cross-complaint in August of 2019 and the operative SAXC was filed on December 2, 2019. Given the Court’s analysis above that: (1) Defendant should have had reason to suspect some wrongdoing as early as October 2015; and (2) Defendant has not pled facts showing that application of the discovery rule is warranted, the Court concludes that the second, third, fifth, and sixth causes of action in the SAXC are barred by the statute of limitations. Such causes of action were filed too late.

Therefore, the Court SUSTAINS WITHOUT LEAVE TO AMEND the demurrer of Plaintiff to the second, third, fifth, and sixth causes of action in the SAXC. The Court sustains the demurrer without leave to amend because Defendant has not met its burden in showing a reasonable probability that such causes of action can be amended to assert sufficient causes of action under Blank. Also, Defendant has had numerous opportunities amending the cross-complaint as this is Defendant’s third iteration of its cross complaint.

MOTION TO STRIKE

Due to Defendant failing to oppose Plaintiff’s motion to strike in connection with the SAXC and the demurrer to the third cause of action being sustained without leave to amend as indicated above, the Court GRANTS Plaintiff’s motion to strike with WITHOUT LEAVE TO AMEND. (Sexton v. Superior Court (1997) 58 Cal.App.4th 1403, 1410.)

Moving Party is ordered to give notice of this ruling.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Dated this 24th day of February 2020

Hon. Holly J. Fujie

Judge of the Superior Court


[1] “[A] court may take judicial notice of a party’s admissions or concessions in cases where the admission cannot be reasonably controverted.” (Tucker v. Pacific Bell Mobile Services (2012) 208 Cal.App.4th 201, 218, fn. 11.) A court is empowered to take judicial notice of “[r]ecords of . . . any court of this state.” (Cal. Evid. Code § 452(d).)

Case Number: BC691790    Hearing Date: February 04, 2020    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

KATIE O’CONNELL MARSH, etc.,

Plaintiff,

vs.

GAUMONT TELEVISION USA, LLC f.k.a. GAUMONT INTERNATIONAL TELEVISION, LLC, et al.,

Defendants.

AND RELATED CROSS-ACTION

CASE NO.: BC691790

[TENTATIVE] ORDER RE: MOTION FOR LEAVE TO FILE THIRD AMENDED CROSS-COMPLAINT

Date: February 4, 2020

Time: 8:30 a.m.

Dept. 56

FSC: August 3, 2020

Jury Trial: August 17, 2020

MOVING PARTY: Defendant and Cross-Complainant Gaumont Television USA, LLC (“Cross-Complainant”)

RESPONDING PARTY: Plaintiff and Cross-Defendant Katie O’Connell Marsh (“Cross-Defendant”)

The Court has considered the moving, opposition, and reply papers.

BACKGROUND

Plaintiff filed the operative Second Amended Complaint (“SAC”) against Defendants alleging causes of action for: (1) declaratory relief; (2) breach of contract; (3) breach of the implied covenant of good faith and fair dealing; (4) fraudulent inducement; (5) fraudulent concealment; (6) unfair competition in violation of California Business and Professions Code, Section 17200 et seq.; (7) intentional interference with contract; (8) inducing breach of contract; and (9) accounting. Plaintiff’s SAC arises from her tenure as a television executive and the alleged failure of Defendants to pay Plaintiff her share of contracted Modified Adjusted Gross Receipts (“MAGR”).

Cross-Complainant filed the operative Second Amended Cross-Complaint (“SAXC”) alleging causes of action for: (1) breach of contract; (2) conversion; (3) possession of personal property; (4) declaratory relief; (5) fraudulent inducement; and (6) fraudulent concealment.

Cross-Complainant filed a motion for an order that the Court grant it leave to amend the SAXC by filing a Third Amended Cross-Complaint. Cross-Complainant seeks to amend the SAXC to add additional causes of action for: (1) fraudulent inducement; (2) intentional interference with contract; (3) inducing breach of contract; and (4) violation of the California Uniform Trade Secrets Act. Cross-Complainant’s motion is made on the grounds that: (1) granting leave to amend is in the furtherance of justice; and (2) an amendment will not cause any prejudice to Plaintiff because these new causes of action are justified based on existing facts and evidence.

Cross-Defendant opposes the motion of Cross-Complainant on the grounds that: (1) the motion violates the California Rules of Court; (2) Cross-Complainant has no legitimate excuse for its delay in seeking leave to amend; (3) Cross-Defendant will suffer prejudice if leave to amend is granted; and (4) permitting Cross-Complainant’s proposed amendments would be futile.

Issue No. 1: Procedural Non-Compliance

California Rules of Court, Rule 3.1324 sets forth the necessary requirements with respect to a motion to amend a pleading. California Rules of Court, Rule 3.1324(b) states that a separate declaration must accompany the motion for leave to amend and such declaration must specify: (1) the effect of the amendment; (2) why the amendment is necessary and proper; (3) when the facts giving rise to the amended allegations were discovered; and (4) the reasons why the request for amendment was not made earlier.

In connection with its moving papers, Cross-Complainant presents the declaration of its counsel, Emerson B. Luke (“Luke). The declaration of Luke does not indicate: (1) the effect of the amendment; (2) why the amendment is necessary and proper; (3) exactly when the facts giving rise to such amended allegations were discovered; or (4) why the request for amendment was not made sooner. In connection with the reply brief, Luke declares that any failure by Gaumont to fully comply with California Rules of Court, Rule 3.1324 was inadvertent. (Luke Reply Decl. at ¶ 4.)

The Court finds that Cross-Complainant has failed to comply with the mandatory requirements set forth in California Rules of Court, Rule 3.1324. The Bettencourt case that Cross-Complainant cites in its reply brief for the proposition that non-compliance with California Rules of Court, Rule 3.1324 is harmless and not dispositive for purposes of is motion is not persuasive. (Bettencourt v. Hennessy Industries, Inc. (2012) 205 Cal.App.4th 1103, 1111.) Bettencourt did not ever mention a party not complying with California Rules of Court, Rule 3.1324 for purposes of leave to amend a pleading. (Id.) In fact, the Bettencourt opinion never discussed California Rules of Court, Rule 3.1324. Bettencourt discussed leave to amend in the context of a motion for judgment on the pleadings.

Therefore, the Court DENIES Cross-Complainant’s motion for leave to file a Third Amended Cross-Complaint.

Moving Party is ordered to give notice of this ruling.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Dated this 4th day of February 2020

Hon. Holly J. Fujie

Judge of the Superior Court

Case Number: BC691790    Hearing Date: December 27, 2019    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

KATIE O’CONNELL MARSH, etc.,

Plaintiff,

vs.

GAUMONT TELEVISION USA, LLC f.k.a. GAUMONT INTERNATIONAL TELEVISION, LLC, et al.,

Defendants.

AND RELATED CROSS-ACTION

CASE NO.: BC691790

[TENTATIVE] ORDER RE: DEMURRER TO SECOND AMENDED COMPLAINT

Date: December 27, 2019

Time: 8:30 a.m.

Dept. 56

FSC: August 3, 2020

Jury Trial: August 17, 2020

MOVING PARTY: Defendant Gaumont Television USA, LLC (“Moving Defendant”)

RESPONDING PARTY: Plaintiff Katie O’Connell Marsh

The Court has considered the moving, opposition, and reply papers.

BACKGROUND

Plaintiff filed the operative Second Amended Complaint (“SAC”) against Defendants alleging causes of action for: (1) declaratory relief; (2) breach of contract; (3) breach of the implied covenant of good faith and fair dealing; (4) fraudulent inducement; (5) fraudulent concealment; (6) unfair competition in violation of California Business and Professions Code, Section 17200 et seq.; (7) intentional interference with contract; (8) inducing breach of contract; and (9) accounting. Plaintiff’s SAC arises from her tenure as a television executive with Gaumont Television, LLC and the alleged failure of Defendants to pay Plaintiff her share of contracted Modified Adjusted Gross Receipts (“MAGR”).

Moving Defendant filed a demurrer to the third cause of action in the SAC. Moving Defendant asserts that the third cause of action in the SAC is duplicative of the second cause of action in the SAC.

Initially, the Court rejects the argument advanced in Plaintiff’s opposition that the Court indicated that if Plaintiff amended her complaint to add allegations that Gaumont’s failure to collect $45 million in fees under the “sales agency” agreements not included in “gross receipts” then the third cause of action would be sufficient. (Opposition at 5:4-11.) The Court never made that indication. (Plaintiff’s RJN, Exhibit A at 8:19-14:14.)

MEET AND CONFER

The meet and confer requirement has been met.

JUDICIAL NOTICE

Plaintiff’s request for judicial notice is GRANTED.

DEMURRER

“A demurrer tests the sufficiency of a complaint as a matter of law.” (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1358.) “[T]he court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded.” (Id.) “The court accepts as true all material factual allegations, giving them a liberal construction, but it does not consider conclusions of fact or law, opinions, speculation, or allegations contrary to law or judicially noticed facts.” (Shea Homes Limited Partnership v. County of Alameda (2003) 110 Cal.App.4th 1246, 1254.) With respect to a demurrer “[t]he complaint must be construed liberally by drawing reasonable inferences from the facts pleaded.” (Rodas v. Spiegel (2001) 87 Cal.App.4th 513, 517.) “On demurrer, all material facts properly pleaded and all reasonable inferences which can be drawn therefrom are deemed admitted.” (Bush v. California Conservation Corps (1982) 136 Cal.App.3d 194, 198.)

Issue No. 1: Third Cause of Action

“A breach of the contract may only constitute a breach of the implied covenant of good faith and fair dealing.” (Guz v. Bechtel Nat. Inc. (2000) 24 Cal.4th 317, 352.) “If the allegations do not go beyond the statement of a mere contract breach and, relying on the same alleged acts, simply seek the same damages or other relief already claimed in a companion contract cause of action, they may be disregarded as superfluous as no additional claim is actually stated.” (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1395.) “Thus, absent those limited cases where a breach of a consensual contract term is not claimed or alleged, the only justification for asserting a separate cause of action for breach of the implied covenant is to obtain a tort recovery.” (Id.) “A breach of the implied covenant of good faith is a breach of the contract.” (Thrifty Payless, Inc. v. The Americana at Brand, LLC (2013) 218 Cal.App.4th 1230, 1244.) A cause of action for breach of the implied covenant of good faith and fair dealing may be disregarded where the “claim of breach of the implied covenant relies on the same acts, and seeks the same damages, as [a] claim for breach of contract.” (Bionghi v. Metropolitan Water Dist. of So. California (1999) 70 Cal.App.4th 1358, 1370.) Where a breach of contract and a breach of the implied covenant of good faith and fair dealing “overlap because they incorporate the same prior allegations” that “does not necessarily mean that the gravamen of the two counts is the same.” (Digerati Holdings, LLC v. Young Money Entertainment, LLC (2011) 194 Cal.App.4th 873, 885.)

In connection with the second cause of action in the SAC for breach of contract, Plaintiff alleges that: (1) the Termination Agreement was a contract between herself and Moving Defendant (SAC at ¶ 70); and (2) she fully performed all of her material obligations under the Termination Agreement or has been excused from performance. (Id. at ¶ 72.) Pursuant to the second cause of action, the SAC also alleges that Moving Defendant and then Gaumont breached provisions of the Termination Agreement by: (1) deducting “total costs and expenses” of the four series Plaintiff contracted to receive an MAGR rather than merely the series’ “deficits” in calculating Plaintiff’s MAGR share (Id. at ¶ 73); (2) deducting a 15% “self-distribution fee” despite the fact that on most, if not all occasions, it was an entity other than Gaumont who was the distributor of these series (Id.); (3) deducting all distribution expenses rather than only third party out-of-pocket distribution expenses (Id.); and (4) underreporting gross receipts by deducting fees and expenses charged by affiliated entities from the purported gross receipts of the series. (Id.)

Pursuant to the third cause of action, the SAC alleges that: (1) Moving Defendant and then Gaumont were required to ensure, via the implied covenant contained in the Termination Agreement, that Plaintiff would receive her contractual share of the gross receipts generated by the television series she developed as Moving Defendant’s CEO, subject to limited and specified deductions (Id. at ¶ 76); (2) Moving Defendant and then Gaumont have unfairly interfered with Plaintiff’s right to receive the benefits of the Termination Agreement separate and apart from Moving Defendant’s and then Gaumont’s breaches of contract including by electing not to collect over $45 million in payments relating to the series owed to Moving Defendant or Gaumont by affiliated entities thereby preventing those due payments from being included in “all gross receipts when calculating Plaintiff’s MAGR Bonus (Id. at ¶ 77); and (3) Plaintiff fully performed all of her material obligations under the Termination Agreement or has been excused from performance. (Id. at ¶ 78.)

The allegations in the third cause of action are premised on the breach of contract that is alleged pursuant to the second cause of action. The third cause of action incorporates the same allegations that are incorporated into the second cause of action for breach of contract. Both causes of action incorporate paragraphs 1 through 62 into the respective causes of action. The SAC alleges that the $45 million in payments that were not collected, if paid, would have had to be included in “all gross receipts” in calculating Plaintiff’s MAGR Bonus. (Id. at ¶ 57.) The allegation that Gaumont elected to not enforce agreements or collect payments from affiliates where doing so would have resulted in significant additional gross receipts—including the failure to not collect more than $45 million in fees under a variety of “Sales Agency” agreements—is a basis for Plaintiff’s breach of contract claim despite the third cause of action asserting a denial of that fact. (SAC at ¶¶ 57, 70, 77.) Clearly, the failure to collect payments affected the MAGR Bonus of Plaintiff. The crux of Plaintiff’s action—and the breach of contract cause of action— is that Defendants failed to pay her the correct share of MAGR monies. Moreover, the second and third causes of action seek identical damages. (SAC at ¶¶ 74, 79.)

Also, Plaintiff’s citation to Digerati is not persuasive for purposes of this Court’s duplicity analysis. (Digerati Holdings, LLC v. Young Money Entertainment, LLC (2011) 194 Cal.App.4th 873.) Digerati did not address the question of whether a breach of contract and a breach of implied covenant cause of action were duplicative but instead addressed the issue of statements of protected activity in the context of an anti-SLAPP motion. (Id. at 887-888.) Plaintiff’s citation to Ladd is also meritless as that case did not address the issue of the sufficiency of a breach of implied covenant cause of action in connection with a demurrer where it is claimed that it is duplicative of a breach of contract cause of action. (Ladd v. Warner Bros. Entertainment, Inc. (2010) 184 Cal.App.4th 1298.) “[A]n opinion is not authority for a proposition not therein considered.” (Ginns v. Savage (1964) 61 Cal.2d 520, 524, fn.2.)

Therefore, the Court SUSTAINS WITHOUT LEAVE TO AMEND the demurrer of Moving Defendant to the third cause of action in the SAC. Plaintiff has not met her burden in showing a reasonable probability that the third cause of action can be amended to state a sufficient cause of action for breach of the implied covenant of good faith and fair dealing. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) This is Plaintiff’s third version of her complaint as she has filed the original complaint and First Amended Complaint prior to this version of her complaint.

Moving Party is ordered to give notice of this ruling.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Dated this 27th day of December 2019

Hon. Holly J. Fujie

Judge of the Superior Court

Case Number: BC691790    Hearing Date: December 03, 2019    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

KATIE O’CONNELL MARSH, etc.,

Plaintiff,

vs.

GAUMONT TELEVISION USA, LLC f.k.a. GAUMONT INTERNATIONAL TELEVISION, LLC, et al.,

Defendants.

AND RELATED CROSS-ACTION

CASE NO.: BC691790

[TENTATIVE] ORDER RE: MOTION FOR PROTECTIVE ORDER

Date: December 3, 2019

Time: 8:30 a.m.

Dept. 56

Jury Trial: August 17, 2020

MOVING PARTIES: Plaintiff Katie O’Connell Marsh (“Plaintiff”) and her counsel of record Kasowitz Benson Torres LLP (“Kasowtiz”) (“Moving Parties”)

RESPONDING PARTY: Defendant Gaumont Television USA, LLC

The Court has considered the moving, opposition, and reply papers.

BACKGROUND

Plaintiff filed the operative Second Amended Complaint (“SAC”) against Defendants alleging causes of action for: (1) declaratory relief; (2) breach of contract; (3) breach of the implied covenant of good faith and fair dealing; (4) fraudulent inducement; (5) fraudulent concealment; (6) unfair competition in violation of California Business and Professions Code, Section 17200 et seq.; (7) intentional interference with contract; (8) inducing breach of contract; and (9) accounting. Plaintiff’s SAC arises from her tenure as a television executive with Defendant.

Defendant filed a motion to disqualify Plaintiff’s counsel, John Berlinski (“Berlinski”) and his law firm—Kasowitz—from any further participation in this action as counsel for Plaintiff. Gaumont’s motion to disqualify was based, in part, on Kasowitz’s representation of Richard Frankie (“Frankie”) at his deposition as a non-party witness. On August 23, 2019, the Court denied Defendant’s motion to disqualify Plaintiff’s counsel in its entirety. On August 28, 2019, Defendant filed a notice of appeal from this Court’s August 23, 2019 order denying Defendant’s motion to disqualify counsel for Plaintiff.

Moving Parties filed a motion for a protective order to: (1) stay the continuation of the deposition of third-party witness Richard Frankie (“Frankie”) scheduled for September 25, 2019, and any related motion practice, pending resolution of Defendant’s appeal and writ petition from this Court’s denial of Defendant’s motion to disqualify Kasowitz from representing Plaintiff in this matter. Moving Parties assert that failing to preserve the status quo by conducting Frankie’s deposition before Defendant’s appeal and writ petition from the denial of its motion to disqualify risks substantial prejudice to Plaintiff and/or Kasowitz.

Defendant opposes the motion made by Moving Parties on the grounds that: (1) there is no evidence of waiver; (2) the Court has already stated that Defendant can proceed with Frankie’s continued deposition; (3) Kasowitz opposed a stay of this action pending the writ petition and appeal; (4) Kasowitz’s insistence on representing Frankie is prejudicial to Defendant because Kasowitz wants to maintain the benefit of such representation while hedging its bets; (5) the motion has been brought to protect Kasowitz and not Plaintiff or Frankie; and (6) Marsh has not been prejudiced.

Initially, the Court addresses some of the arguments raised by Defendant in its opposition papers. Defendant argues that Kasowitz lacks standing as referenced by footnote number six in their opposition papers; however, Defendant cites to no legal authority for the proposition that Kasowitz lacks standing to bring a motion for a protective order with respect to staying the deposition of Frankie. Moreover, many of the arguments Defendant makes in its opposition papers have no relevance to this Court’s analysis of whether the motion for a protective order should be granted or denied. Defendant is attempting, in essence, to re-litigate the motion for disqualification by making irrelevant arguments in its opposition. Thus, Defendant’s argument with respect to: (1) waiver; (2) Kasowitz’s opposing a stay pending the writ petition and appeal; (3) Kasowitz’s insistence on representing Frankie being prejudicial to Gaumont; (4) the motion being brought to protect Kasowitz; and (5) Plaintiff not being prejudiced are not relevant to the Court’s analysis of Moving Parties’ instant motion. Defendant’s opposition is essentially void of any legal authority and Defendant only relevantly contends that the URS Corp. case cited by Moving Parties in support of their motion is inapplicable to the current situation since that case dealt with the circumstance in when a disqualification motion was granted whereas here the disqualification motion was denied.

Also, while Defendant states in its opposition that the Court has stated that Defendant may proceed with Frankie’s continued deposition (See Opposition at 2:8-27), Defendant’s citation to the evidence provided by Plaintiff does not support Defendant’s argument. (Berlinksi Decl., Exhibit D at 17:16-19:19.) Thus, Defendant’s argument on this point is factually inaccurate.

MEET AND CONFER

The meet and confer requirement has been met.

DISCUSSION

California Code of Civil Procedure, Section 2025.420(a) provides that: “[b]efore, during, or after a deposition, any party, any deponent, or any other affected natural person or organization may promptly move for a protective order. The motion shall be accompanied by a meet and confer declaration.” The protective order may allow the deposition to not be taken at all or may allow the deposition to be taken at a different time. (Code Civ. Proc. § 2025.420(b)(1)-(2).) “In ruling on a motion for protective order . . . the trial court must consider the particular facts of the case.” (Weisman v. Bower (1987) 193 Cal.App.3d 1231, 1238.) “After doing so, the trial court exercises wide discretion, and may grant the motion if it concludes that a protective order is necessary to limit . . . discovery which, wile it may come within the rules established by the other code sections, offends the sense of justice and reason.” (Id.) California Code of Civil Procedure, Section 2025.420(b) empowers the Court “for good cause shown, may make any order that justice requires to protect any party, deponent, or other natural person or organization from unwarranted annoyance, embarrassment, or oppression, or undue burden and expense.” A trial court has authority to stay proceedings pending the appeal of the denial of a motion to disqualify counsel. (Reed v. Superior Court (2001) 92 Cal.App.4th 448, 455.) “[T]he question whether discovery or trial should be stayed pending an appeal from an unsuccessful motion to disqualify counsel rests in the discretion of the trial and appellate courts.” (Id.) The purpose of such stay is “to maintain the status quo pending the appeal.” (Id. at 454.) California Code of Civil Procedure, Section 916(a) says that “the perfecting of an appeal stays proceeding in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order.” “In determining whether a proceeding is embraced in or affected by the appeal, [a court] must consider the appeal and its possible outcomes in relation to the proceeding and its possible results.” (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 189.) In order to show good cause a party must “set forth specific facts showing good cause.” (Calcor Space Facility, Inc. v. Superior Court (1997) 53 Cal.App.4th 216, 224.) “In law and motion practice, factual evidence is suppled to the court by way of declarations.” (Id.)

In support of Moving Parties’ motion, John Berlinski (“Berlinski”) declares that: (1) on April 18, 2019, in response to an inquiry from counsel for Gaumont, he informed Gaumont that Kasowitz intended to represent non-party Frankie as well as a number of other non-party witnesses that Gaumont had indicated it intended to notice (Berlinski Decl. at ¶ 2); (2) only after he informed Gaumont’s counsel that Kasowitz intended to represent Frankie did Gaumont issue a subpoena duces tecum to Frankie (Id. at ¶ 3); (3) Kasowitz represented Frankie at his July 17, 2019 deposition which was adjourned after several hours to a later date (Id. at ¶ 4); (4) at no time in the three months between being notified that Kasowitz intended to represent Frankie and Frankie’s deposition did Gaumont raise any objection to that representation nor did it make any objection to the deposition itself (Id. at ¶ 5); (5) on July 22, 2019, Gaumont sent a letter to Kasowitz objecting for the first time to Kasowitz’s representation of Frankie and indicating that it intended to move to disqualify Kasowitz from this case (Id. at ¶ 6); (6) Gaumont filed its motion to disqualify Berlinksi and his firm and on August 23, 2019, following oral argument, the Court denied Gaumont’s motion to disqualify (Id. at ¶ 8); (7) on August 28, 2019, Gaumont filed a notice of appeal from the denial of its motion to disqualify (Id. at ¶ 9); (8) on August 29, 2019, Gaumont filed an ex parte application seeking to stay all proceedings in this case except Frankie’s deposition until the appeal is decided and the Court denied Gaumont’s ex parte application on August 30, 2019 (Id. at ¶¶ 10-11); and (9) on August 28, 2019, which is the same day that Gaumont filed its notice of appeal, he sent an e-mail to Gaumont’s counsel asking if they would agree to postpone the continuation of Frankie’s deposition until after the appeal is decided to which he received no response. (Id. at ¶ 15 and Exhibit I.)

The Court finds that Moving Parties’ motion is unpersuasive for two reasons. First, Berlinski’s declaration is void of any facts indicating any prejudice that Plaintiff, Frankie, or Kasowitz will incur if the deposition of Frankie is not stayed until the appeal of this Court’s order with respect to disqualification is resolved. The declaration of Daniel Saunders filed in support of Moving Parties’ reply brief is also void of any facts indicating prejudice and is void of any facts warranting a finding of good cause. Thus, under Calcor, Moving Parties have failed to show that good cause exists to grant their motion for a protective order. Moving Parties were required to make a showing of good cause pursuant to California Code of Civil Procedure, Section 2025.420.

Second, the URS case upon which Moving Parties rely to support their argument for a protective order is unpersuasive. (URS Corp. v. Atkinson/Walsh Joint Venture (2017) 15 Cal.App.5th 872.) In URS the issues presented to the court were: (1) does an appeal of an order disqualifying counsel result in an automatic stay pursuant to California Code of Civil Procedure, Section 916; and (2) if so, how far does the automatic stay extend. (Id. at 876.) Also, the URS court was addressing a stay in the context of when an attorney disqualification motion had been granted. Here, Defendant’s attorney disqualification motion was denied. URS also did not address the issue of staying the deposition of a non-party witness while an appeal of the denial of an attorney disqualification motion was pending. Thus, URS did not consider the issues that are the basis for Moving Parties’ motion for a protective order.

Reed only stands for the proposition that an order denying an attorney disqualification motion does not result in an automatic stay of trial court proceedings during the perfecting of an appeal in connection with the denial of an attorney disqualification motion. (Reed v. Superior Court (2001) 92 Cal.App.4th 448, 450.) Reed does not support the arguments of Moving Parties. “[L]anguage used in any opinion is of course to be understood in the light of the facts and the issue then before the court, and an opinion is not authority for a proposition not therein considered.” (Ginns v. Savage (1964) 61 Cal.2d 520, 524, fn. 2.)

Therefore, the Court exercises its discretion pursuant to Reed and California Code of Civil Procedure, Section 2025.420 and DENIES Moving Parties’ motion for a protective order in its entirety.

Moving Parties are ordered to give notice of this ruling.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Dated this 3rd day of December 2019

Hon. Holly J. Fujie

Judge of the Superior Court

Case Number: BC691790    Hearing Date: October 24, 2019    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

KATIE O’CONNELL MARSH, etc.,

Plaintiff,

vs.

GAUMONT TELEVISION USA, LLC f.k.a. GAUMONT INTERNATIONAL TELEVISION, LLC, et al.,

Defendants.

AND RELATED CROSS-ACTION

CASE NO.: BC691790

[TENTATIVE] ORDER RE: DEMURRER TO FIRST AMENDED COMPLAINT

Date: October 24, 2019

Time: 8:30 a.m.

Dept. 56

MOVING PARTY: Defendant Gaumont, SA (“Moving Defendant”)

RESPONDING PARTY: Plaintiff Katie O’Connell Marsh

The Court has considered the moving, opposition, and reply papers.

BACKGROUND

Plaintiff filed the operative First Amended Complaint (“FAC”) against Defendants alleging causes of action for: (1) declaratory relief; (2) breach of contract; (3) breach of the implied covenant of good faith and fair dealing; (4) fraudulent inducement; (5) fraudulent concealment; (6) unfair competition in violation of California Business and Professions Code, Section 17200 et seq.; (7) intentional interference with contract; (8) inducing breach of contract; and (9) accounting. Plaintiff’s FAC arises from her tenure as a television executive with Gaumont Television, LLC. In part, Plaintiff alleges that: (1) as CEO of Gaumont Television, LLC she pursued innovative licensing and development strategies in connection with television shows that generated substantial gross receipts, and also developed successful television programming for Gaumont Television, LLC; (2) she contracted to receive a share of the gross receipts—known as the Modified Adjusted Gross Receipts (“MAGR”)—derived from each television series produced by Gaumont Television, LLC during her employment; and (3) despite a provision in her Separation Agreement from Gaumont Television, LLC, she has not received a single MAGR payment in connection with any of the series she bought to screen while working for Gaumont Television, LLC.

Moving Defendant filed a demurrer to the seventh and eighth causes of action in the FAC. Moving Defendant argues that the seventh and eighth causes of action in the FAC are barred by the applicable statute of limitations.

MEET AND CONFER

The meet and confer requirement has been met.

DEMURRER

“A demurrer tests the sufficiency of a complaint as a matter of law.” (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1358.) “[T]he court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded.” (Id.) “The court accepts as true all material factual allegations, giving them a liberal construction, but it does not consider conclusions of fact or law, opinions, speculation, or allegations contrary to law or judicially noticed facts.” (Shea Homes Limited Partnership v. County of Alameda (2003) 110 Cal.App.4th 1246, 1254.)

Issue No. 1: Statute of Limitations

A cause of action for intentional interference with contract is governed by a two-year statute of limitations. (Knoell v. Petrovich (1999) 76 Cal.App.4th 164, 168.) “The statute of limitations applicable to the tort of inducing breach of contract is stated in Code of Civil Procedure, section 339, subdivision 1, which is two years.” (Kenworthy v. Brown (1967) 248 Cal.App.2d 298, 301.) A cause of action, in general, usually begins to accrue time for statute of limitations purposes on the date of the wrongful act. (Trembath v. Digardi (1974) 43 Cal.App.3d 834, 836.) Thus, for the purposes of the statute of limitations “a cause of action accrues at the time when the cause of action is complete with all of its elements.” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807.) “A general demurrer based on the statute of limitations is only permissible where . . . the complaint show[s] that the action is barred by the statute of limitations.” (Roman v. County of Los Angeles (2000) 85 Cal.App.4th 316, 324.) “The running of the statute must appear clearly and affirmatively from the dates alleged. It is not sufficient that the complaint might be barred.” (Id. at 324.)

The FAC alleges that: (1) Plaintiff entered into a three-year employment agreement (the “Employment Agreement”) with GIT dated on October 1, 2010 to which she became GIT’s first CEO and first employee (FAC at ¶ 34); (2) the Employment Agreement provided for significant incentive compensation including a 2.5% MAGR interest in connection with any television series greenlit and produced by GIT and ordered into production with a distributor in the United States during the period of her employment with GIT (Id. at ¶ 35); (3) Plaintiff did not receive a salary increase in any of the three years of her second term as GIT’s CEO, but instead secured enhancements to her incentive/contingent compensation including an increase to 3% in her MAGR share and significant improvements in her MAGR definition (Id. at ¶ 42); (4) on September 30, 2015, Plaintiff entered into a Separation Agreement with GIT that expressly preserved her valuable MAGR interests almost exactly as set forth in Amendment No. 1 to her Employment Agreement (Id. at ¶ 44); (5) GIT knew at the time it negotiated and entered into the Separation Agreement that it did not intend to calculate Plaintiff’s MAGR in accordance with her agreed-upon MAGR definition, but rather to artificially reduce the gross receipts credited to her and to take numerous impermissible deductions to avoid paying her contracted for-share of MAGR from the series launched under her leadership (Id. at ¶ 46); (6) Plaintiff obtained evidence of GIT’s intent at the time it entered into the Separation Agreement through discovery in this action (Id.); and (7) the inequities in Plaintiff’s MAGR bonus are a result of Moving Defendant’s intentional interference with the agreements of Gaumont’s MAGR participants including Plaintiff. (Id. at ¶ 59.)

Analysis with Respect to the Seventh Cause of Action

Pursuant to the seventh cause of action, the FAC asserts that: (1) Moving Defendant collaborated and/or participated in the misconduct because it knew that it would benefit from the misconduct (Id. at ¶ 96); (2) Moving Defendant benefitted by directing and conspiring with Gaumont to use improper accounting practices to minimize the gross receipts credited to MAGR participants like Plaintiff (Id.); (3) Moving Defendant intended to disrupt the performance by GIT and then Gaumont and did disrupt or prevent that performance (Id. at ¶ 97); and (4) through its conduct, Moving Defendant damaged Plaintiff by collaborating and/or participating in acts that reduced gross receipts, overinflated permissible deductions, and thereby reduced the MAGR in which she was entitled. (Id. at ¶ 98.)

With respect to the seventh cause of action, the Court finds that the face of the FAC does not clearly and affirmatively indicate the beginning of the running of the statute of limitations. It is not enough that the seventh cause of action in the FAC may be barred. The FAC does not allege that September 30, 2015—which is the date the Separation Agreement was entered into—is the date in which Moving Defendant participated in conduct or acted in such a way as to intentionally interfere with such contract in order to support the cause of action for intentional interference with contract. The FAC pleads that Gaumont breached the Separation Agreement but does not indicate the date of such breach (FAC at ¶ 68-71) and as such the running of the statute of limitations with respect to the seventh cause of action is not clear from the face of the complaint as required by Roman in order for the statute of limitations to have expired.

Therefore, the Court OVERRULES Moving Defendant’s demurrer to the seventh cause of action in the FAC.

Analysis with Respect to the Eighth Cause of Action

Pursuant to the eighth cause of action, the FAC alleges that: (1) GIT and then Gaumont breached the Separation Agreement (FAC at ¶ 104); (2) Moving Defendant intended to influence, direct, or cause GIT and then Gaumont to commit the breaches because Moving Defendant knew it would benefit from such breaches (Id. at ¶ 105); (3) Moving Defendant benefitted by directing and conspiring with Gaumont to use improper accounting practices to minimize the gross receipts credited to MAGR participants like Plaintiff and overstate the deductions permitted under the MAGR Bonus Provision (Id.); and (4) through its conduct, Moving Defendant caused damage to Plaintiff by collaborating and/or participating in acts that reduced gross receipts and overinflated permissible deductions. (Id. at ¶ 107.)

The Court incorporates its reasoning with respect to overruling the demurrer to the seventh cause of action and applies that same reasoning to the eighth cause of action in the FAC. The FAC does not specify a date or point in time in which Moving Defendant induced Gaumont to breach the Separation Agreement.

Therefore, Moving Defendant’s demurrer to the eighth cause of action in the FAC is OVERRULED.

Moving Party is ordered to give notice of this ruling.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Dated this 24th day of October 2019

Hon. Holly J. Fujie

Judge of the Superior Court