On 03/08/2018 a Labor - Other Labor case was filed by MICHAEL FALLS against EVERGREEN RZ INC in the jurisdiction of Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California.
Pending - Other Pending
Los Angeles County Superior Courts
Stanley Mosk Courthouse
Los Angeles, California
JOSEPH R. KALIN
DOES 1 TO 50
EVERGREEN RX INC
5/22/2018: PROOF OF SERVICE OF SUMMONS
6/6/2018: DEFENDANT EVERGREEN RX, INC.?S CROSS COMPLAINT
6/6/2018: DEFENDANT EVERGREEN LIX, INC.'S ANSWER TO VERIFIED COMPLAINT
6/20/2018: PLAINTIFF MICHAEL FALLS'S NOTICE OF DEPOSIT OF JURY FEES
6/20/2018: CASE MANAGEMENT STATEMENT
7/6/2018: Minute Order
7/10/2018: MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CROSS DEFENDANTS? DEMURRER TO CROSS COMPLAINANT?S 2ND AND 7TH CAUSES OF ACTION
8/24/2018: DECLARATION OF CHRISTINA R. KERNER
9/26/2018: CROSS COMPLAINANT EVERGREEN RX'S SECOND AMENDED CROSS COMPLAINT FOR: 1. CONVERSION, ETC
10/11/2018: Minute Order
10/11/2018: Case Management Order
7/11/2019: Stipulation and Order
4/18/2018: NOTICE OF CASE MANAGEMENT CONFERENCE
3/27/2018: NOTICE OF RELATED CASE
3/8/2018: PLAINTIFF VERIFIED COMPLAINT FOR DAMAGES: 1) VIOLATION OF LABOR CODE 1102.5 ;ETC
Stipulation and Order (Stipulation to Continue Trial Date and Related Dealines; and Order); Filed by Michael Falls (Cross-Defendant)Read MoreRead Less
Answer; Filed by Michael Falls (Plaintiff); TATYANA FALLS (Cross-Defendant)Read MoreRead Less
at 08:30 AM in Department 78; Case Management Conference - HeldRead MoreRead Less
Minute order entered: 2018-10-11 00:00:00; Filed by ClerkRead MoreRead Less
Case Management Order; Filed by ClerkRead MoreRead Less
Minute Order ((Case Management Conference)); Filed by ClerkRead MoreRead Less
Second Amended Cross Complaint; Filed by Evergreen Rx Inc (Defendant)Read MoreRead Less
CROSS COMPLAINANT EVERGREEN RX'S SECOND AMENDED CROSS COMPLAINT FOR: 1. CONVERSION, ETCRead MoreRead Less
Case Management Statement; Filed by Michael Falls (Plaintiff); TATYANA FALLS (Cross-Defendant)Read MoreRead Less
CASE MANAGEMENT STATEMENTRead MoreRead Less
at 08:30 AM in Department 78; Court Order - HeldRead MoreRead Less
Minute OrderRead MoreRead Less
Minute order entered: 2018-04-27 00:00:00; Filed by ClerkRead MoreRead Less
NOTICE OF CASE MANAGEMENT CONFERENCERead MoreRead Less
Notice of Case Management Conference; Filed by ClerkRead MoreRead Less
NOTICE OF RELATED CASERead MoreRead Less
Notice of Related Case; Filed by Michael Falls (Plaintiff)Read MoreRead Less
Complaint; Filed by nullRead MoreRead Less
SUMMONSRead MoreRead Less
PLAINTIFF VERIFIED COMPLAINT FOR DAMAGES: 1) VIOLATION OF LABOR CODE 1102.5 ;ETCRead MoreRead Less
Case Number: BC697354 Hearing Date: February 06, 2020 Dept: 78
evergreen rx, inc. dba MEDICO PHARMACY; DOES 1-50;
evergreen rx, inc. dba MEDICO PHARMACY;
MICHAEL FALLS; TATYANA FALLS; DOES 1-50;
February 6, 2020
[TENTATIVE] RULING RE:
cross-defendants michael falls and tatyana falls’ motion for summary judgment, OR IN THE ALTERNATIVE, SUMMARY ADjUDICATION
Cross-Defendants Michael Falls and Tatyana Falls’ Motion for Summary Judgment is DENIED.
This is a wrongful termination case. The Complaint alleges as follows. Plaintiff Michael Falls (“Michael”) and his wife Tatyana Falls (“Tatyana,” and collectively with Michael “the Falls”) was a wrongfully terminated employee of Defendant Evergreen RX, Inc. dba Medico Pharmacy (“Evergreen”). (Compl. ¶ 1.) The Falls were terminated following discovery of Evergreen’s fraudulent activity and attempting to prevent fraudulent transactions. (Compl. ¶¶ 20-23.)
Michael filed the Complaint on March 8, 2018, alleging four causes of action:
Violation of Labor Code § 1102.5
Wrongful termination in violation of public policy
Violation of Labor Code § 201
Private Attorney General Action pursuant to Labor Codes §§ 2698 & 2699
On June 6, 2018, Evergreen filed a Cross-Complaint. On July 30, 2017 Evergreen filed a First Amended Cross Complaint (“FACC”), and on September 26, 2018 filed a Second Amended Cross Complaint (“SACC”), alleging eight causes of action:
Intentional interference with contract
Intentional interference with prospective economic advantage
Negligence interference with prospective economic advantage
Unfair Business Actions and Practices
Defamation and trade slander
On October 24, 2019, Evergreen dismissed the Fourth, Fifth, and Sixth Causes of Action in the SACC.
On November 18, 2020 the Falls filed the instant Motion for Summary Judgment against the SACC.
On January 22, 2020, Evergreen filed an Opposition to the Motion.
On January 31, 2020, the Falls filed a Reply.
Neither party submitted courtesy copies of their briefs, separate statements, or evidence in violation of General Order re: Mandatory Electronic Filing for Civil and Department 78 Courtroom Information Link on the LASC website, as well as California Rules of Court Rule 3.1110(f) and Rule 3.1350(g).]
REQUESTS FOR JUDICIAL NOTICE
Where the motion is based on a matter of which the court may take judicial notice pursuant to Section 452 or 453 of the Evidence Code, the matter shall be specified in the notice of motion, or in the supporting points and authorities, except as the court may otherwise permit. (California Code of Civil Procedure §438(d)). Any request for judicial notice must be made in a separate document listing the items for which notice is requested. (CRC 3.1113(l)). Judicial notice may be taken of “(d) Records of (1) any court of this state or (2) any court of record of the United States or of any state of the United States.” (Evid. Code § 452.)
Evergreen seeks judicial notice of the case summaries in three LASC criminal cases against Michael Falls Nos: LACBA435343-04, LACBA435343-03, LACBA435343-02. Falls objects on the grounds that Evergreen filed these requests three days late. The Court nonetheless grants these requests under §452(d) as to the existence of such cases.
Evergreen objects to various evidence cited by the Falls in support of their Motion. Objections Nos. 1-46 are denied.
In ruling on a summary judgment motion, the Court is only required to rule on objections to evidence which is material to its decision. (Code Civ. Proc., § 437c(q).) In this case, the Falls have failed to establish a prima facie case on all causes of action. Accordingly, the Court was not required to review the evidence presented by Evergreen. Therefore, the Court declines to rule on the objections raised by the Falls to the evidence presented by Evergreen.
MOTION FOR SUMMARY JUDGMENT
A party may move for summary judgment “if it is contended that the action has no merit or that there is no defense to the action or proceeding.” (Code Civ. Proc. § 437c, subd. (a).) “[I]f all the evidence submitted, and all inferences reasonably deducible from the evidence and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law,” the moving party will be entitled to summary judgment. (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.) A motion for summary adjudication may be made by itself or as an alternative to a motion for summary judgment and shall proceed in all procedural respects as a motion for summary judgment. (Code Civ. Proc. § 437c, subd. (f)(2).)
The moving party bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact, and if he does so, the burden shifts to the opposing party to make a prima facie showing of the existence of a triable issue of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850; accord Code Civ. Proc. § 437c, subd. (p)(2).) Plaintiffs moving for summary judgment may meet their initial burden by “prov[ing] each element of the cause of action entitling the party to judgment on the cause of action.” (Code Civ. Proc. § 437c(p)(1).)
Once the moving party has met that burden, the burden shifts to the responding party to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. (Code Civ. Proc. § 437c(p)(1).) The responding party may not rely upon the mere allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action or a defense thereto. (Code Civ. Proc. § 437c(p)(1).) To establish a triable issue of material fact, the party opposing the motion must produce substantial responsive evidence. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.)
Cross-Defendants the Falls move for summary judgment on all remaining causes of action in the SACC, on the grounds that there are no triable issues as to any material fact. (Motion at p. 1.)
First Cause of Action – Conversion
The elements of a conversion claim are: (1) the plaintiff’s ownership or right to possession of the property; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages. (Hodges v. County of Placer (2019) 41 Cal.App.5th 537, 551.)
The SACC alleges that the Falls “wrongfully took/converted Evergreen’s medications, and patient and personnel files, and other intellectual and/or confidential property.” (SACC ¶¶ 46-47.)
The Falls argue that the First Cause of Action fails as a matter of law because Evergreen’s later testimony contradicted itself and did not claim that “other intellectual and/or confidential” property was stolen. (Motion at p. 4.) Falls further argues that the patient files were owned by the Falls and that they returned them anyway, and also that Evergreen’s owner, Yury Akopyan, admitted that he is unsure that the personnel files ever existed. (Motion at p. 4.) Lastly, the Falls argue that Akopyan admitted that he is not sure that that the alleged stolen medication creams ever existed, and further that Akopyan told the Falls to take the creams. (Motion at p. 4.)
With regards to the patient files, the Falls purport to present evidence that they owned the patient files. (UMF ¶ 5.) However, the Deposition of Evergreen owner Akopyan is not clear as Akopyan seems confused by the question. In the deposition Akopyan is asked if the patient files only pertained to the nutrition clients (attributed to Tatyana), Akopyan says no twice, then appears confused by the question, then says that he thinks they were only nutrition clients, then backtracks again. (Falls Evidence, Exh. A, 98:9-99:19.) Further, even if the Court were to find this evidence sufficient to establish a prima facie case of lack of a triable issue of fact, in response Evergreen presents a declaration of Afshin Azizesefat who declares that the patient files were created by Evergreen and thus were the property of Evergreen. (Azizesefat Decl. ¶ 8.) Further, Akopyan says a few lines later in the deposition that the Falls returned the files and that he was concerned about Medi-Cal and HIPAA violations (which would not apply to non-medical clients) (Falls Evid. Exh. A, 9914-24.). Accordingly, there is a triable issue of fact regarding the ownership of the patient files.
With regards to the personnel files, Falls purport to present evidence that Evergreen did not know that the personnel files exist. (UMF ¶ 7.) However, this argument does not make sense. In the Akopyan deposition, Akopyan clearly states that the Falls’ personnel files were taken and that the files were missing after the Falls left. (Falls Evid. Exh. B, 99:17-100:10.) Further, the Falls’ only supporting evidence that they did not take the personnel files are their own declarations. (UMF ¶ 8.) Accordingly, there is a triable issue of material fact as to the personnel files and whether they were stolen.
With regards to the medication, the Falls present evidence that Evergreen did not know if the allegedly stolen creams ever existed. (UMF ¶ 9.) However, the deposition excerpt offered by Falls is only two pages long and does not provide the previous deposition context for the questions. (Falls Evid., Exh. B.) Further, the evidence provided by Falls does not refute the claim that the creams did not belong to Evergreen. The Falls rely on the portion of Akopyan’s deposition where he Akopyan seems to state that, at the time that the creams were stolen, he did not know exactly which creams they were. (Falls Evid., Exh. A, 100:3-15.) However, this deposition evidence does not refute Evergreen’s claim that it owned the creams. For a pharmacy that sells many products, a deposition that indicates that the owner does not know the identity of every product without being provided a photograph or name of the product does not prove anything. Further, a few lines later in his deposition, Akopyan testifies that after the creams went missing, he received an email from Michael with a picture of the creams: in exchange for the creams, the Falls were seeking for payment back vacation pay that they alleged Evergreen owed them. (Falls Evid. Exh. A 115:21-116:19.) Accordingly, the Falls’ argument based on Akopyan’s purported lack of knowledge about the creams is unsupported. The Falls have failed to present evidence establishing a prima facie case that there is no triable issue of fact on this cause of action and
the Motion for Summary Adjudication on the First Cause of Action is therefore DENIED.
Second Cause of Action – Fraud
The elements of fraud are: (1) misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity (scienter); (3) intent to defraud or induce reliance; (4) justifiable reliance; and (5) damages. (See Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.)
The Second Cause of Action alleges that the Falls “engaged in a pattern and practice to defraud and attempt to extort Evergreen. [The Falls] concealed from Evergreen their taking of its property […] and converting it for their own use and benefit, and all to further their scheme to extort Evergreen and enrich themselves.” (SACC ¶ 57.)
The Falls assert that Evergreen cannot prove this allegation because the Evergreen cannot produce evidence to support it. (Motion at pp. 6-7.) The Falls only support for this assertion, however, is Michael Fall’s own declaration, in which he states that he did not place fake labels on the medication creams as alleged and that he and his wife had no intent to defraud. (UMF ¶¶ 21-22.) This proffered evidence does not meet the Falls’ initial burden of producing evidence establishing a prima facie case that there is no triable issue of material fact on this issue and.
the Motion for Summary Adjudication on the Second Cause of Action is therefore DENIED.
Third Cause of Action – Civil Conspiracy
“The elements of an action for civil conspiracy are the formation and operation of the conspiracy and damage resulting to plaintiff from an act or acts done in furtherance of the common design. The cause of action is the damage suffered.” (Mox, Inc., v. Woods (1927) 202 Cal. 675, 677.)
The SACC alleges that the Falls “knowingly and willfully conspired and agreed among themselves to defraud Evergreen by converting its property – medications, confidential patient files, and other intellectual and proprietary property – and converting it for their own use and benefit, all to further their scheme to extort Evergreen and enrich themselves.” (SACC ¶ 67.)
In support of this Motion, the Falls argue that Evergreen cannot produce any admissible evidence of an illegal act committed by the Falls. (Motion at p. 7.) The Falls further argue that Evergreen cannot produce evidence that both Michael and Tatyana agreed to commit a wrongful act. (Motion at p. 8.) In Opposition, Evergreen argues that it has evidence of a conspiracy, including that the Falls demanded $22,000 from Akopyan in exchange for the return of the medical creams, which they claimed was owed for vacation pay. (Oppo. at p. 12.)
To support their claim, the Falls argue that there is no evidence underlying conversion and thus basis for the allegation of a conspiracy. (UMF ¶ 23.) However, the Court, above, has found that there are triable issues of material fact on the conversion claim and that finding also applies here.
The Falls argue that they have presented evidence that Tatyana did not cooperate in any act of alleged fraud, and that Tatyana did not agree to be involved in any alleged conversion or fraud. (UMF ¶¶ 24-25.) However, much like the Falls other claims, the Falls’ evidence relies heavily on their own conclusory declarations. (UMF ¶¶ 24-25.) The Falls’ evidence as to Evergreen’s acknowledgement that Tatyana was not involved in the fraud or conspiracy is solely Akopyan’s deposition, wherein he was asked “Q: Do you feel like Tatyana is doing it, too?” and he answered, “A: Well, they’re husband and wife; and they acted together. […] Everything they were saying, they are saying together and claiming together. Meeting – meet together, claiming money together.” (Falls Evid. Exh. B, 126:17-24.) This evidence is clearly insufficient to meet the Falls burden of producing evidence establishing a prima facie that there is no triable issue of material fact on this issue. The same is true of the Falls’ argument that Akopyan’s statement that the email demanding $22,000 was sent only from Michael’s email address is sufficient to establish a prima facie case that there was no conspiracy. (Falls Evid. Exh. B, 126:25-127:6.)
Accordingly, the Motion for Summary Adjudication on Third Cause of Action is DENIED.
Seventh Cause of Action – Unfair Competition
Unfair competition¿includes¿“any¿unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising[.] (Bus. & Prof. Code, § 17200.)¿The UCL¿“provides that an individual may not prosecute a UCL claim unless the individual “has suffered injury in fact and has lost money or property as a result of the unfair competition.¿(Schwartz v. Provident Life & Accident Ins. Co. (2013) 216 Cal.App.4th 607, 611.)¿¿
The SACC alleges that the Falls took medication from Evergreen and placed fake labels on them, knowing that they were false, with the intent to defraud Evergreen by making it seem that they were expensive medications to be returned to insurance payers. (SACC ¶ 103.) As a result, Evergreen instructed Michael to return the medication under the belief that the medications had been rejected by patients, and the Falls profited from these acts. (SACC ¶¶ 103-105.)
The Falls argue that the SACC does not allege that the Falls violated any antitrust law or policy, and they argue that Evergreen cannot produce evidence that the Falls “took actions in violation of antitrust law, or that violated the policy or spirit of antitrust laws.” (Motion at pp. 9-10.) Falls also argue that Evergreen cannot produce evidence of an unlawful act committed by the Falls. (Motion at p. 10.)
As a preliminary matter, under the UCL, a practice is prohibited even if it is not illegal: “The statutory language referring to “any unlawful, unfair or fraudulent” practice (italics added) makes clear that a practice may be deemed unfair even if not specifically proscribed by some other law.” (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.) Therefore, Evergreen is not required to establish that the Falls’ engaged in illegal behavior.
In support of this motion the Falls again rely exclusively on their own conclusory declarations: “Cross-Defendants did not violate any antitrust law, policy, or spirt of antitrust laws.” (UMF ¶¶ 26-27.) An issue of fact is not raised by cryptic, broadly phrased, and conclusory assertions. (Brown v. Ransweiler (2009) 171 Cal.App.4th 516, 525.) The Falls have not produced a scintilla of evidence to meet their burden of submitting admissible evidence establishing a prima facie case that there is no triable issue of a material fact on this cause of action and of action and the Motion for Summary Adjudication on the Seventh Cause of Action is therefore DENIED.
Eighth Cause of Action – Defamation
“The elements of a defamation claim are (1) a publication that is (2) false, (3) defamatory, (4) unprivileged, and (5) has a natural tendency to injure or causes special damage.” (Wong v. Tai Jing (2010) 189 Cal.App.4th 1354, 1370.)
The SACC alleges that the Falls “have made false defamatory statements to many of Evergreen’s employees including Mr. Azizesefat, Gayne Chinaryan, Hamid Najaffi, and other employees like Blanca Montesora who actually left their employ with Evergreen after being threatened by [the Falls].” (SACC ¶ 110.) The alleged defamatory statements included: “Evergreen is a fraudulent business” and “Evergreen and its owner Mr. Akopyan have engaged in fraud regarding medication and cheat insurance companies.” (SACC ¶ 110.)
In support of their Motion on this cause of action the Falls argue that Evergreen cannot produce evidence that that the alleged defamatory statements were false. (Motion at p. 10.) To support this argument, the Falls state that they did not make the alleged statements, and that they believed that Akopyan was acting illegally (as evidenced by the fact that they chose to file a lawsuit). (UMF ¶¶ 28-29.)
The Falls argue that they have established a prima facie case that
Evergreen cannot prove their statements were defamatory because they have proven that the statements were true. he only evidence the Falls offer in support of this claim, beyond their own declarations, are citations to Akopyan’s deposition where he states, in various places, that he was told that the Falls were telling other employees that Evergreen was committing fraud. (Falls Evid., Exh. B, 146-149.) Such statements are clearly not prima facie proof that Evergreen was committing fraud. Additionally, this argument actually contradicts the Falls’ first argument for which the evidence is offered: that the Falls did not make the alleged statements in the first place. The Falls have failed to failed to present evidence establishing a prima facie case that there is triable issue of material fact on this cause of action and the Motion for Summary Adjudication on the Eighth Cause of Action is therefore DENIED.
DATED: February 6, 2020
Hon. Robert S. Draper
Judge of the Superior Court