This case was last updated from Los Angeles County Superior Courts on 10/01/2020 at 17:49:53 (UTC).

RICHARD IRVIN VS BETTY F IRVIN ET AL

Case Summary

On 07/19/2017 RICHARD IRVIN filed a Contract - Other Contract lawsuit against BETTY F IRVIN. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are MARC MARMARO and DAVID S. CUNNINGHAM III. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****9629

  • Filing Date:

    07/19/2017

  • 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

MARC MARMARO

DAVID S. CUNNINGHAM III

 

Party Details

Plaintiff and Petitioner

IRVIN RICHARD

Claimant and Not Classified By Court

IRVINE HELENE

Defendants and Respondents

KUMIVA GROUP LLC

DOES 1 TO 10

IRVIN BETTY F.

IRVIN DIANE A.

Attorney/Law Firm Details

Plaintiff and Petitioner Attorneys

RUSSO J. SCOTT ESQ.

RUSSO JOHN SCOTT ESQ.

RUSSO J. SCOTT

Defendant and Respondent Attorneys

CROWTHER ROBYN C. ESQ.

CROWTHER ROBYN CARRICO ESQ.

CROWTHER ROBYN C.

 

Court Documents

Minute Order - MINUTE ORDER (COURT ORDER)

5/11/2020: Minute Order - MINUTE ORDER (COURT ORDER)

Stipulation and Order - STIPULATION AND ORDER TO CONTINUATION OF TRIAL DATE

3/27/2020: Stipulation and Order - STIPULATION AND ORDER TO CONTINUATION OF TRIAL DATE

Request for Dismissal

12/19/2019: Request for Dismissal

Objection - OBJECTION DEFENDANTS' OBJECTIONS TO THE DECLARATION OF RICHARD IRVIN IN SUPPORT OF OPPOSITION TO MOTION FOR SUMMARY JUDGMENT

12/20/2019: Objection - OBJECTION DEFENDANTS' OBJECTIONS TO THE DECLARATION OF RICHARD IRVIN IN SUPPORT OF OPPOSITION TO MOTION FOR SUMMARY JUDGMENT

Stipulation and Order to use Certified Shorthand Reporter

12/27/2019: Stipulation and Order to use Certified Shorthand Reporter

Minute Order - MINUTE ORDER (HEARING ON MOTION FOR PROTECTIVE ORDER)

10/8/2019: Minute Order - MINUTE ORDER (HEARING ON MOTION FOR PROTECTIVE ORDER)

Order - ORDER ORDER - PROPOSED ORDER GRANTING REQUEST FOR DISMISSAL OF CLASS

8/27/2019: Order - ORDER ORDER - PROPOSED ORDER GRANTING REQUEST FOR DISMISSAL OF CLASS

Declaration - DECLARATION RE REQUEST FOR DISMISSAL OF CLASS

8/22/2019: Declaration - DECLARATION RE REQUEST FOR DISMISSAL OF CLASS

Answer - ANSWER DEFENDANTS' ANSWER TO SECOND AMENDED COMPLAINT

5/28/2019: Answer - ANSWER DEFENDANTS' ANSWER TO SECOND AMENDED COMPLAINT

Separate Statement

5/30/2019: Separate Statement

Stipulation and Order - STIPULATION AND ORDER STIPULATION AND PROPOSED ORDER RE: OPPOSITION AND REPLY DUE DATES

4/2/2019: Stipulation and Order - STIPULATION AND ORDER STIPULATION AND PROPOSED ORDER RE: OPPOSITION AND REPLY DUE DATES

Opposition - Defendant Kumiva Group, LLC's Opposition to Plaintiff Richard Irvin's Motion to Compel Further Response and Compliance with Request for Production of Documents

11/2/2018: Opposition - Defendant Kumiva Group, LLC's Opposition to Plaintiff Richard Irvin's Motion to Compel Further Response and Compliance with Request for Production of Documents

Minute Order - Minute Order (Legacy Event Type Motion to Compel; Hearing on Motion to Comp...)

11/16/2018: Minute Order - Minute Order (Legacy Event Type Motion to Compel; Hearing on Motion to Comp...)

NON-PARTY ALBERT DAVIDOO'S OPPOSITION TO PLAINTIFF RICHARD IRVIN'S MOTION TO COMPEL FURTHER COMPLIANCE WITH DEPOSITION SUBPOENA FOR PRODUCTION OF BUSINESS RECORDS

9/13/2018: NON-PARTY ALBERT DAVIDOO'S OPPOSITION TO PLAINTIFF RICHARD IRVIN'S MOTION TO COMPEL FURTHER COMPLIANCE WITH DEPOSITION SUBPOENA FOR PRODUCTION OF BUSINESS RECORDS

PLAINTIFF'S OPPOSITION TO HELENE IRVIN'S MOTION FOR LEAVE TO FILE COMPLAINT ON INTERVENTION; ETC.

4/11/2018: PLAINTIFF'S OPPOSITION TO HELENE IRVIN'S MOTION FOR LEAVE TO FILE COMPLAINT ON INTERVENTION; ETC.

NOTICE RE: CONTINUANCE OF HEARING

4/13/2018: NOTICE RE: CONTINUANCE OF HEARING

CASE MANAGEMENT ORDER

11/7/2017: CASE MANAGEMENT ORDER

CASE MANAGEMENT STATEMENT -

10/24/2017: CASE MANAGEMENT STATEMENT -

137 More Documents Available

 

Docket Entries

  • 05/04/2021
  • Hearing05/04/2021 at 10:00 AM in Department 37 at 111 North Hill Street, Los Angeles, CA 90012; Jury Trial

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  • 04/27/2021
  • Hearing04/27/2021 at 08:30 AM in Department 37 at 111 North Hill Street, Los Angeles, CA 90012; Final Status Conference

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  • 07/14/2020
  • Docketat 10:00 AM in Department 37; Jury Trial - Not Held - Advanced and Continued - by Court

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  • 07/07/2020
  • Docketat 08:30 AM in Department 37; Final Status Conference - Not Held - Advanced and Continued - by Court

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  • 05/12/2020
  • Docketat 10:00 AM in Department 37; Jury Trial - Not Held - Continued - Stipulation

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  • 05/11/2020
  • Docketat 1:30 PM in Department 37; Court Order

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  • 05/11/2020
  • DocketCertificate of Mailing for ((Court Order) of 05/11/2020); Filed by Clerk

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  • 05/11/2020
  • DocketMinute Order ( (Court Order)); Filed by Clerk

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  • 05/05/2020
  • Docketat 08:30 AM in Department 37; Final Status Conference - Not Held - Continued - Stipulation

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  • 03/27/2020
  • DocketStipulation and Order (To Continue Trial Date); Filed by Kumiva Group, LLC (Defendant)

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213 More Docket Entries
  • 10/17/2017
  • DocketNotice of Lien; Filed by Helene Irvine (Legacy Party)

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  • 10/06/2017
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 10/06/2017
  • DocketNOTICE OF CASE MANAGEMENT CONFERENCE

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  • 09/26/2017
  • DocketDEFENDANTS' ANSWER TO COMPLAINT

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  • 09/26/2017
  • DocketAnswer; Filed by Betty F. Irvin (Defendant); Kumiva Group, LLC (Defendant)

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  • 08/31/2017
  • DocketNOTICE OF ACKNOWLEDGEMENT OF RECEIPT - CIVIL

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  • 08/31/2017
  • DocketNotice and Acknowledgment of Receipt; Filed by Richard Irvin (Plaintiff)

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  • 07/19/2017
  • DocketComplaint; Filed by Richard Irvin (Plaintiff)

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  • 07/19/2017
  • DocketSUMMONS

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  • 07/19/2017
  • DocketCOMPLAINT FOR: 1. BREACH OF CONTRACT; ETC

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Tentative Rulings

Case Number: BC669629    Hearing Date: December 27, 2019    Dept: 37

HEARING DATE: December 27, 2019

CASE NUMBER: BC669629

CASE NAME: Richard Irvin v. Betty F. Irvin, et al.

MOVING PARTY: Defendants, Betty F. Irvin, Kumiva Group, LLC and Diana A. Irvin

OPPOSING PARTY: Plaintiff, Richard Irvin

TRIAL DATE: May 12, 2020

PROOF OF SERVICE: OK

PROCEEDING: Defendants’ Motion for Summary Judgment

OPPOSITION: December 13, 2019

REPLY: December 20, 2019

TENTATIVE: Defendants’ motion for summary judgment or, in the alternative, summary adjudication is GRANTED with respect to issues number one, three and five. The motion is MOOT with respect to issue 2 and is otherwise DENIED with respect issues four, six, seven and eight. Defendants are to give notice.

Background

This case arises in connection with the sale of the assets of ATI Systems International, Inc. (“ATI”) to Garda USA, Inc. (“Garda”). Plaintiff Richard Irvin alleges that he had a 12.02% of ATI while his parents Robert G. Irvin (“Robert Irvin”) and Defendant Betty F. Irvin (“Betty Irvin”) together owned 62.26% of ATI either jointly or through ATI Services, LLC (“ATI Services”), a company for which they were the 100% members. According to the FAC, the shareholders of ATI effectively sold all of the stock and assets of ATI to Garda on April 10, 2007. Under the terms of the Merger Agreement, certain assets were allegedly excluded from the sale, including all of ATI’s fee owned real estate, 51 properties, as well as ATI’s 18% interest in the corporation C Punch Ranch, Inc. (“CPRI”) (the “Excluded Assets”).[1] Defendant Diane A. Irvin (“Diane Irvin”) allegedly was a manager of Kumiva and an officer of CPRI and is also allegedly a primary successor beneficiary or the sole successor beneficiary of the Living Trust and/or Community Property Trust.

Plaintiff alleges that ATI Services changed its name to Kumiva Group, LLC (“Kumiva”) after the merger or sale and secretly deeded or transferred the Excluded Assets to Robert Irvin and Betty Irvin, to Kumiva, or to other entities owned by Kumiva, without properly accounting for the value of the Excluded Assets against Robert Irvin, Betty Irvin, and/or Kumiva’s share of the distribution to the former shareholders of ATI. Plaintiff alternatively alleges that Kumiva improperly assessed only the book value of the Excluded Assets against Robert Irvin, Betty Irvin, and/or Kumiva’s share of the proceeds instead of the fair market value of these assets. Plaintiff originally sought to assert these allegations as a class action on behalf of the former shareholders of ATI; however, Plaintiff filed a request to dismiss the class allegations on August 22, 2019. Plaintiff also alleges that he was supposed to be a “Parent Indemnified Person” under the Agreement, by which ATI would indemnify and defend any Garda and Newco officer, director or employee against any misrepresentation, breach of agreement or fraud by ATI or its directors or officers.

Plaintiff further alleges that Kumiva has also failed to pay Plaintiff monies owed under an oral agreement whereby Plaintiff agreed to devote time and effort to defend against Garda’s claims in a separate litigation regarding the sale of assets in exchange for payment of $300/hour, all reasonable out of pocket expenses, and a $2,000,000 success fee for meeting certain litigation goals (the “Amended Oral Contract”).

In the First Amended Complaint (“FAC”), Plaintiff alleges three class causes of action for: (1) breach of fiduciary duty against Diane Irvin and Kumiva; (2) fraud against Diane Irvin and Kumiva; and (3) accounting against Kumiva; as well as four individual causes of action for: (1) breach of contract against all Defendants but Diane Irvin; (5) breach of contract against Kumiva; (6) conversion against Kumiva and Diane Irvin; and (7) declaratory relief against Kumiva.[2]

On April 15, 2019, the court sustained Defendants’ demurrer to the FAC with ten days leave to amend as to the breach of contract action against all Defendants but Diana Irvin. On April 23, 2019, Plaintiff filed a Second Amended Complaint (“SAC”), pleading additional facts in support of the proposition that the Amended Oral Contract is not for his services as an attorney. The SAC now also includes an eighth cause of action for “goods and services rendered.”

Defendants Betty Irvin, individually and as trustee of the R. and B. Irvin Living Trust dated March 1, 1990, as amended and restated (“Irvin Trust”), Diane Irvin and Kumiva (“Defendants”) now move for summary judgment, or in the alternative, summary adjudication, on the following issues:

  1. Issue one: Plaintiff’s fifth cause of action for breach of contract, sixth cause of action for conversion, and seventh cause of action for declaratory relief should be dismissed because they are premised on an incorrect interpretation of the merger agreement;

  2. Issue two: Plaintiff’s first cause of action for breach of fiduciary duty and second cause of action for fraud are improperly brought against Diane Irvin because she never made a fraudulent representation

  3. Issue three: Plaintiff’s first cause of action for breach of fiduciary duty, second cause of action for fraud, and third cause of action for accounting are improperly brought against Kumiva because it is merely a holding company and representative of shareholders, whereas the alleged fraudulent representations were made by Robert Irvin in his individual capacity;

  4. Issue four: Plaintiff’s first cause of action for breach of fiduciary duty, second cause of action for fraud, and third cause of action for accounting should be dismissed because the statute of limitations for fraud and related claims has run;

  5. Issue five: Plaintiff’s fourth cause of action for breach of contract and eighth cause of action for goods and services rendered should be dismissed against Betty Irvin because she did not make any representations or enter into an agreement with Plaintiff;

  6. Issue six: Plaintiff’s fourth cause of action for breach of contract and eighth cause of action for goods and services rendered should be dismissed because the parties never entered into an oral agreement;

  7. Issue seven: Plaintiff’s fourth cause of action for breach of contract and eight cause of action for goods and services rendered should be dismissed because the claims arise from Plaintiff’s unclean hands;

  8. Issue eight: Plaintiff’s fourth cause of action for breach of contract and eighth cause of action for goods and services rendered should be dismissed because the oral contract would have been entered into under duress.

Plaintiff opposes the motion.

Evidentiary Objections

  1. Defendants’ Objections

Objection to Declaration of Aslan Abregov

Overruled: 1

Sustained: 2, 3

Objection to Declaration of Richard Irvin

Overruled: 1-3, 5-6, 8-9, 11, 15-16, 25, 28, 30

Sustained: 7, 12-14, 17-22, 24, 26-27, 29, 31, 34-35

Sustained in part: 4, 23, 32, 33

Objection 4: sustained-in-part as to everything except “what was reported on the financial statements was never anything I was involved with.” Otherwise overruled

Objection 23: sustained-in-part as to “sales proceeds,” witness has not established expertise to testify to this characterization.

Objection 32: sustained-in-part as to “not based on third party appraisals or company valuations and that real estate professionals were not involved.” Otherwise, overruled.

Objection 33: sustained-in-part as to everything after “2008.” Otherwise overruled.

  1. Plaintiff’s Objections

Objection to Declaration of Betty Irvin

Overruled: 2

Sustained: 1

Objection to Deposition of Charles Weissman

Overruled:

Sustained: 1-2

Objection to Deposition of Gerald Blitstein

Overruled: 1-2

Sustained:

Objection to Declaration of Diane Irvin

Overruled: 1-6, 9-11

Sustained: 7-8, 12

Objection to Robert Irvin’s Note (Exhibit M)

Objection 1: sustained

Factual Background

The material facts relevant to this motion are largely disputed.

  1. Irvin Family Business and General Terms of Sale

Beginning in the 1980’s, Plaintiff became President and shareholder in his family business, ATI Systems International, Inc. (“Systems”). (Separate Statement in Support of Motion (“DSS”), ¶ 1; Compendium of Evidence Exhibit B (Irvin Deposition), 12:14-22.) Robert Irvin was the Chairman of the Board for Systems. (DSS, ¶ 2; Irvin Deposition, 12:1-13.)

In 2007, Garda acquired Systems for approximately $340 Million. (DSS, ¶ 3.) Defendants contend that Plaintiff oversaw the sale and merger negotiations with Garda. (DSS, ¶ 4; Irvin Deposition, 62:12:14-63:10, 69:9-70:2; 74:15-76:2; Compendium Exhibit C (Weissman Deposition), 18:5-12, 32:19-33:12; Compendium Exhibit E (Blitstein Deposition) 13:8-14:17; 32:23-33:11, 34:20-35:20, 40:25-41:15; 59:4-22, 93:6-25.) Plaintiff disputes this, and contends that he was not very involved, while Gerald Blitstein, Charles Weismann and Robert Irvin were primarily involved. (Separate Statement of Material Facts in Support of Opposition (“PSS”), ¶ 4, Declaration of Richard Irvin (“Irvin Decl.”), ¶¶ 13, 15, 16.)

As part of this sale, Defendants contend that ATI Services, LLC (“Services”), a subsidiary of Systems, was not sold but remained wholly owned by Robert and betty Irvin and renamed Kumiva. (DSS, ¶ 5; Weissman Deposition at 29:2-30:5.) Plaintiff disputes this and contends that Systems transferred the membership interest in Services to the Irvin Trust, changing its name to Kumiva. (PSS, ¶ 5; Irvin Decl., ¶ 25.)

Following the sale, Kumiva agreed to represent Systems shareholders (the Irvin family and select employees) in certain post-sale matters. (DSS, ¶¶ 6, 7.) Plaintiff appears to dispute the generality of this statement and contends that Kumiva agreed to serve as the “exclusive agent and attorney-in-fact” on behalf of each Systems shareholder who consents to the Merger Agreement with Garda. (PSS, ¶ 6; Irvine Decl., ¶ 18, 24, 25, 27; Compendium in Support of Opposition Exhibit 4 and 5.)

Defendants contend that all shareholders, including Plaintiff, reviewed and approved of the Merger Agreement. (DSS, ¶ 8; Irvin Deposition at 80:25-81:21; Compendium in Support of Motion, Exhibit G; Diane Irvin Declaration at ¶¶ 4-5, 7.) Plaintiff disputes that the shareholders reviewed or approved the valuation. (PSS, ¶ 9; Irvin Decl., ¶¶ 21, 22, 25.) Once the sale of Systems was approved, Defendants contend that Plaintiff signed the Merger Agreement on behalf of other shareholders and accepted millions as his share of the proceeds. (DSS, ¶ 9; Irvin Deposition at 86:19-87:16.) Plaintiff disputes that he had any involvement with Kumiva. (PSS, ¶ 9; Irvin Decl., ¶ 25.)

  1. Garda Litigation and Merger Agreement

Following the sale, it is undisputed that litigation broke out between Garda and Kumiva over the final amount of “Net Working Capital” at the closing of the Merger Agreement. (DSS, ¶¶ 10-11.) The litigation ended favorable for Systems with no finding of fraud as to Systems and an award of compensatory damages against Garda. (Id.)

Defendants contend that while the majority of the litigation award was distributed amongst the shareholders, a percentage as well as an additional $12 million was held back to account for each shareholder’s “pro-rata share of the legal fees and costs.” (DSS, ¶¶ 12-13; Compendium in Support of Motion, Exhibit H (Garda Litigation Letter to Shareholders).) Plaintiff disputes that there was ever an accounting system pertaining to the sale of Systems or with regard to distributing the litigation award. (PSS, ¶¶ 12-13; Compendium in Support of Opposition Exhibit 17 (Diane Irvin Deposition) at 111:15-112:17, 170:25-171:25; 172:17-22; Irvin Decl., ¶¶ 46, 58-59; Compendium in Support of Opposition, Exhibit 15.)

The example March 27, 2017 letter to shareholders, which both parties cite to regarding the Garda litigation, informs the shareholders that Garda had exhausted all of its appeals with respect to the litigation and provides a break down of final numbers. Further, page two provides: “we have set aside $5,000,000 in reserve until all outstanding disputes are resolved and for remaining unpaid legal fees and expenses. Therefore, at this time we are distributing $14,167,121.08.” (Compendium in Support of Motion, Exhibit H.) The letter also provides that it enclosed a spreadsheet providing for an explanation of the break down.

It is undisputed that the Merger Agreement governing the Garda and Systems sale contains an indemnification clause governing “Parent Indemnified Person,” which is defined as Garda, Newco, and their officers, directors, and employees. (DSS, ¶ 15.) It is also undisputed that the Parent Indemnified Persons were to be indemnified from any fraud by Systems or its directors or officers in connection with the Merger Agreement. (DSS, ¶ 16.) Finally, it is undisputed that the Merger Agreement permitted Kumiva to rely on counsel or experts in conducting any aspect of the sale and that any error by Kumiva pursuant to this advice should subject Kumiva to liability to any Systems shareholders. (DSS, ¶ 18.) Plaintiff asserts that Kumiva has not offered evidence that it relied on any such experts. (PSS, ¶ 18.)

Finally, it is also undisputed that Systems shareholders were to indemnify Kumiva pro-rata, based on their relative entitlement to the proceeds from the Merger Agreement, in connection with any losses, damages, liabilities, claims or obligations in connection with the Garda litigation, unless premised on bad faith or willful misconduct. (DSS, ¶ 19.)

  1. Real Estate Assets

Defendants contend that Systems owned many real estate assets which were excluded from Systems’ sale to Garda. (DSS, ¶ 29; Compendium in Support of Motion, Exhibit D (Merger Agreement) at Schedule 1.1(a).) Plaintiff disputes that Systems was in ownership of these assets before the completion of the Merger Agreement and contends that Systems transferred its membership interest to the Services, who transferred its interest to the Irvin Trust, “and the name was changed to Kumiva.” (PSS, ¶ 29; Irvin Decl., ¶¶ 10, 26, 66; Compendium in Support of Opposition, 21 (Deeds from Systems to Services to Kumiva).)

Defendants contend that Plaintiff knew about Systems’ assets as its President and CEO and would have talked to Robert Irvin about the assets. (DSS, ¶ 30; Irvin Deposition at pp. 20:12-21:16, 27:20-28.5.) Plaintiff disputes this and contends that he knew little about real estate and was prevented from learning such information. (PSS, ¶ 30; Irvin Decl., ¶¶ 5-8; 38, 65.) Specifically, Plaintiff contends that notwithstanding his signature on various documents connected to Systems real estate, he was told by Robert Irvin that Systems’ real estate was “none of his business.” (Id.) Plaintiff also contends that despite any financial reports he may have reviewed in 2006-2007, these financial reports would never listed the fair market value of the real estate but only represented book value and that Plaintiff was never privy to information on the fair market value. (PSS, ¶¶ 76-78; Irvin Decl., ¶¶ 6-8, 12.)

Defendants further contend that Robert and Betty Irvin chose to distribute to each shareholder a portion of their ownership interest in the excluded assets at the time of sale (valued to be worth $60 million total.) (DSS, ¶ 31; Irvin Deposition at pp. 55:17-56:17, 83:22-84:9; Compendium in Support of Motion, Exhibit C (Weissman Deposition) at pp. 24:14-25:4, 31:1-19.) Plaintiff disputes the valuation and contends that it was a made-up number. (PSS, ¶ 31; Irvin Decl., ¶¶ 10, 25, 33, 63-64, 66; Diane Irvin Deposition at pp. 41:25-46:4, 170:25-17:25; Compendium in Support of Opposition Exhibit 18 (Davidoo Deposition) at pp. 95:13-19, 96:1-97:2; Weissmann Deposition at pp. 18:19-19:1.)

It is undisputed that Robert Irvin was in charge of the sale price offered for Systems and the value for the real estate assets. (DSS, ¶ 32.) It is also undisputed that Plaintiff did not claim fraud until the deposition of certified public accountant Albert Davidoo in August 2018. (DSS, ¶ 34.)

Defendants contend that Defendant, Diane Irvin never made any fraudulent representations in connection with the real estate. (DSS, ¶ 36; Irvin deposition at pp. 30:17-31:2; Diane Irvin Decl., ¶ 3.) Plaintiff contends that Kumiva group made these fraudulent representations and that Diane Irvin is liable as its manager, treasurer and vice president. (PSS, ¶ 36; Amended Operating Agreement. Plaintiff also contends that Robert Irvin made fraudulent representations about the value of real estate in his capacity as CEO and President of Kumiva. (Irvin Decl., ¶¶ 66-67.) Defendants contend that Plaintiff never asked Robert Irvin how he came to the final value of the excluded real estate (DSS, ¶ 79; Irvin Deposition at pp. 132:4-22.) Plaintiff appears to disagree and contend that he did not know Robert Irvin was involved in the valuation, just that he understood the valuation to involve third party appraisals by experts. (PSS, ¶ 79; Irvin Decl., ¶¶ 6, 16-17, 21-22, 65.)

  1. Oral Contract Based on Garda Litigation

During the Garda litigation, Plaintiff assisted Kumiva’s legal counsel. (DSS, ¶ 91; Irvin Decl., ¶¶ 43-45.) Defendants contend that Robert Irvin “eventually” began paying Plaintiff an hourly rate for the work he performed. (DSS, ¶ 92; Irvin Deposition at pp. 136:3-138:1, 140:18-142:2.) Plaintiff contends that all work was performed pursuant to an Oral agreement for services, and that some invoices were paid by Kumiva while others were paid by Robert Irvin. (PSS, ¶ 92; Irvin Decl., ¶¶ 43-49; Compendium in Support of Opposition, Exhibits 8-10.)

Defendants contend that even if there was an oral agreement to pay Plaintiff for his services, it did not include a “success fee.” (DSS, ¶ 93.) Plaintiff contends that it did include such a fee, which was reduced to $2 million on or about January 28, 2013 and then “affirmed by performance” (PSS, ¶ 93; Irvin Decl., ¶¶ 43-48.) Plaintiff contends that Betty Irvin was present when the initial oral agreement was struck on or about October 1, 2011 and did not object to the agreement. (Irvin Decl., ¶¶ 44-48.)

It is undisputed that while Plaintiff prepared a letter outlining the oral agreement, it was never executed by Robert Irvin. (DSS, ¶ 109, Irvin Deposition at pp. 140:18-146:9, 151:9-152:11.) Plaintiff contends that the agreement was nevertheless ratified orally and by performance. (PSS, ¶ 109, Irvin Decl., ¶¶ 47-48; Exhibits 8-10 in Support of Opposition.)

Defendants contend that Kumiva’s legal counsel testified to being concerned about the alleged success fee provision to the oral agreement. (DSS, ¶ 111; Exhibit C to Compendium of Exhibits (Weissman deposition) at pp. 43:12-45:20, 51:6-14, 52:4-15, 56:5-17.) Plaintiff contends that Kumiva’s legal counsel only testified as to a concern about Diane Irvin not honoring the agreement after Robert Irvin’s passing. (PSS, ¶ 111, Weissman Deposition at pp. 40:19-41:18, 56:6-47:7, 47:12-48:3, 48:8-17, 52:4-16.)

With regard to why the agreement remained oral, Defendant contends that Plaintiff admitted to not pursuing a written contractual agreement because he was in the middle of a contentious divorce and was “more likely to be able to conceal the additional funds” by using an oral agreement. (DSS ¶ 133; Irvin Deposition at pp. 151:9-152:11.) Plaintiff disputes this and contends that Plaintiff was not concerned about the divorce, but instead, that Robert Irvin thought he was doing Plaintiff “a favor” by not signing a written agreement. (PSS, ¶ 133; Irvin Decl. ¶¶ 45-49; Weissmann Deposition at pp. 47:12-48:3.)

Discussion

I. Legal Standard

“The purpose of the law of summary judgment is to provide 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.) Pursuant to Code of Civil Procedure, section 437c, subdivision (a):

A party may move for summary judgment in any action or proceeding if it is contended that the action has no merit or that there is no defense to the action or proceeding. The motion may be made at any time after 60 days have elapsed since the general appearance in the action or proceeding of each party against whom the motion is directed or at any earlier time after the general appearance that the court, with or without notice and upon good cause shown, may direct…. The motion shall be heard no later than 30 days before the date of trial, unless the court for good cause orders otherwise. The filing of the motion shall not extend the time within which a party must otherwise file a responsive pleading.

(Code Civ. Proc., § 437c, subd. (a).) A motion for summary judgment may be granted “if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Code Civ. Proc., § 437c, subd. (c).)

“The motion shall be supported by affidavits, declarations, admissions, answers to interrogatories, depositions, and matters of which judicial notice shall or may be taken. The supporting papers shall include a separate statement setting forth plainly and concisely all material facts that the moving party contends are undisputed. Each of the material facts stated shall be followed by a reference to the supporting evidence. The failure to comply with this requirement of a separate statement may in the court’s discretion constitute a sufficient ground for denial of the motion.” (Code Civ. Proc., § 437c, subd. (b)(1); see also Cal. Rules of Court, rule 3.1350(c)(2) & (d).)

In analyzing motions for summary judgment, courts must apply a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent's claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.” (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294 (Hinsley).) Pursuant to Code Civ. Proc., § 437c, subdivision (p)(2):

A defendant or cross-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, even if not separately pleaded, cannot be established, or that there is a complete defense to the cause of action. Once the defendant or cross-defendant has met that burden, the burden shifts to the plaintiff or cross-complainant to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto. The plaintiff or cross-complainant shall not rely upon the 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 the cause of action or a defense thereto.

(Code Civ. Proc., § 437c, subd. (p)(2).) The court must “view the evidence in the light most favorable to the opposing party and accept all inferences reasonably drawn therefrom.” (Hinesley, 135 Cal.App.4th at p. 294; Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389 [Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.”].) A motion for summary judgment must be denied where the moving party’s evidence does not prove all material facts, even in the absence of any opposition (Leyva v. Sup. Ct. (1985) 164 Cal.App.3d 462, 475).

II. Analysis

  1. Issue One: Plaintiff’s fifth cause of action for breach of contract, sixth cause of action for conversion, and seventh cause of action for declaratory relief should be dismissed because they are premised on an incorrect interpretation of the merger agreement.

To state a claim for breach of contract, a Plaintiff must allege sufficient facts to establish: (1) a contract between the parties; (2) plaintiff’s performance or excuse for nonperformance; (3) defendant’s breach; and (4) damages to plaintiff from the breach. (See e.g. Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178 (Wall Street).) A written contract must be pled verbatim in the body of the complaint, be attached to the complaint and incorporated by reference, or be pled according to its legal effect. (Bowden v. Robinson (1977) 67 Cal.App.3d 705, 718.) An allegation of an oral agreement must “set[] forth the substance of its relative terms.” (Gautier v. General Tel. Co. (1965) 234 Cal.App.2d 302, 305.)

Defendants contend that summary adjudication must be granted on this issue because Plaintiff is relying on a clearly erroneous interpretation of the Merger Agreement’s indemnity provision. (Motion, 9-11.) The Merger Agreement’s indemnity provision states:

“(a) Except as otherwise limited by this Article 8, ATI Services agrees, from and after the Effective Time, to indemnify, defend, and hold Parent and Newco and their respective officers, directors, employees, equity holders and agents (collectively, the "Parent Indemnified Persons") harmless from and against and in respect of any Damages suffered, incurred, or realized by the Parent Indemnified Persons arising out of or resulting from or relating to:

(i) any misrepresentation or breach of warranty made by the Company in this Agreement (other than the representation at Section 2.12(c);provided that for purposes of this Section S.2(a)(i), with respect to any representation or warranty qualified by materiality or Material Adverse Effect (other than any representation or warranty in Section 3.18(c)), a breach of such representation or warranty shall be deemed to occur if there would have been a breach of such representation or warranty absent such qualifications;

(ii) any breach of any covenant or agreement undertaken by the Company in this Agreement to be performed prior to the Effective Time;

(vii) any fraud by the Company, its directors or officers or Representative in connection with this Agreement or the transactions contemplated herein (“Fraud Claim”).”

(Compendium in Support of Motion, Exhibit D, § 8.2(a).)

Parent was defined in the introduction to mean Garda USA, Inc. (Id. at p. 1.)

Defendants contend that Plaintiff’s interpretation of the indemnification provision also is erroneous because Plaintiff still had an obligation as a Systems shareholder to pay a pro rata share of the legal fees that Kumiva incurred in the Garda litigation, based on Article 9 of the Merger Agreement, which provides as follows:

“Each Former Holder shall indemnify, pro rata based upon the portion of the Purchase Price to which such holder is entitled pursuant to this Agreement, the Representative against all losses, damages, liabilities, claims, obligations, costs and expenses, including reasonable attorneys', accountants' and other experts' fees and the amount of any judgment against them, of any nature whatsoever (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened or any claims whatsoever), arising out of or in connection with any claim, investigation, challenge, action or proceeding, or in connection with any appeal thereof, relating to the acts or omissions of the Representative hereunder, or under the Escrow Agreement or otherwise; provided, however, that the foregoing indemnification shall not apply in the event of any action or proceeding which finally adjudicates the liability of the Representative hereunder for its bad faith or willful misconduct. In the event of any indemnification hereunder, upon written notice from Representative to the Former Holders as to the existence of a deficiency toward the payment of any such indemnification amount, each Former Holder shall promptly deliver to the Representative full payment of his or her ratable share of the amount of such deficiency (pro rata based upon the portion of the Purchase Price to which such holder is entitled pursuant to this Agreement); provided that no such holder shall be liable for that portion of any claim of indemnification, individually or in the aggregate, that is in excess of such holder's pro rata portion of the Purchase Price to which such holder is entitled pursuant to this Agreement.”

(Compendium in Support of Motion, Exhibit D at p. 66.) On reply, Defendants reiterate their contention that Plaintiff’s obligation to pay a pro rata share of Kumiva’s legal fees in defending claims by Garda (i.e., Parent under the Agreement) is independent from and contradictory to Plaintiff’s contention that he should be indemnified as a “Parent Indemnified Person.” (Reply, 1-3.)

Plaintiff contends on opposition that triable issues of material fact exist with respect to this issue. (Opposition, 18-19.) Plaintiff contends that he believes he is a Parent Indemnified Person under the Merger Agreement, section 8.2(a) because he was required to be an employee of Garda. In support of this proposition, Plaintiff points to his own declaration, where he attests to his belief, and the deposition testimony of Charles Weismann.

Charles Weismann testified as follows with respect to this issue:

Q: “So in drafting this agreement, was the intent to include that Richard Irvin, as a employee/officer of Newco, would be a parent indemnified person for misrepresentations made by ATI?

A: “Yes.”

(Weismann Deposition at p. 35:3-8.)

There really is no disputed issue of fact on these issues. The parties agree that Plaintiff was a “parent indemnified person.” As such, under the merger agreement, he would be indemnified against claims by the “Company” for misrepresentation or breach of the agreement by Parent. The Garda litigation, however, was a claim against the Company for fraud by the Company. That is precisely the type of claim for which Plaintiff’s obligation to reimburse Kumiva pro rata for legal fees came into play. Thus, there is no triable issue of fact relating to extrinsic or parol evidence, and the interpretation of the agreement becomes a question of law for the court.

Accordingly, the court GRANTS summary adjudication as to this issue.

  1. Issue two: Plaintiff’s first cause of action for breach of fiduciary duty and second cause of action for fraud are improperly brought against Diane Irvin because she never made a fraudulent representation

Defendants first contend that summary adjudication must be granted as to Defendant Diane Irvin because Plaintiff has conceded that Diane never made representations to Plaintiff, fraudulent or not, regarding the value of real estate. (Motion, 11; DSS ¶¶ 36, 54, 72.)

On opposition, Plaintiff contends that he has already dismissed the second cause of action for fraud against Diane Irvin. (Opposition, 5.) Plaintiff filed a request for dismissal on December 19, 2019, dismissing the first and second causes of action as to Diane Irvin. Accordingly, the court finds this portion of Defendants’ motion MOOT.

  1. Issue three: Plaintiff’s first cause of action for breach of fiduciary duty, second cause of action for fraud, and third cause of action for accounting are improperly brought against Kumiva because it is merely a holding company and representative of shareholders, whereas the alleged fraudulent representations were made by Robert Irvin in his individual capacity

Defendants next contend that summary adjudication must be granted as to Kumiva on this issue because any representations by Robert Irvin cannot be imputed to Kumiva. (Motion, 11-12.) Specifically, Defendants contend that Kumiva had no interest in the real estate until after the merger was complete, at which time Kumiva took title to the real estate placed in Services by Robert and Betty Irvin and began serving as a representative of former Systems shareholders. (Id.; DSS ¶ 51.) Defendants point to deposition testimony from Plaintiff in support of their argument, in which Plaintiff repeatedly affirms that Robert Irvin was the only one responsible for setting the sale price for Systems and for valuing the real estate in connection with the sale. (see, eg. Irvin Deposition at pp. 51:6-11, 65:12-16, 74:15-76:12.)

Plaintiff’s opposition as to this issue mainly argues that that Robert Irvin’s actions as a Chairman of the Board of Systems can be imputed to Kumiva, where he also served as CEO and President at the time of the Merger Agreement. (Motion, 20.) Plaintiff relies on various cases, including Sanders v. Magill (1937) 9 Cal.2d 145 for the proposition that knowledge of an officer within the scope of his duties is imputable to the corporation.

Plaintiff is correct in this reliance. Knowledge of an officer “within the scope of his duties” is imputed to the corporation, unless the officer collaborates with outsiders to defraud the corporation. (Uecker v. Zentil (2016) 244 Cal.App.4th 789, 797.) This is a well settled proposition of California law. Here, Plaintiff does not allege in his operative complaint that Robert Irvin collaborated with any outsiders to defraud either Systems or Kumiva and, as such, the exception does not apply.

Plaintiff, however, overlooks the timing of the various transactions involved. Robert Irvin’s valuations and representation to the shareholders of Systems and even to Garda were made before the transaction was approved. After the transaction was approved by the Systems’ Board and shareholders, and as part of the merger transaction, the Services was transferred to Robert and Betty and the trusts, who then put all the assets in Kumiva. Thus, any breaches of fiduciary duty, if any, occurred before Services was transferred or before Kumiva had any assets.

Accordingly, the court GRANTS summary adjudication on this issue.

  1. Issue four: Plaintiff’s first cause of action for breach of fiduciary duty, second cause of action for fraud, and third cause of action for accounting should be dismissed because the statute of limitations for fraud and related claims has run.

Defendants next argue that regardless of the merit of Plaintiff’s claims, they are time-barred by the three-year statute of limitations governing fraud and breach of fiduciary duty claims. (Motion, 12-14.) Defendants argue that because the merger occurred in 2007, the latest that Plaintiff should have filed his action would have been 2010 with respect to his fraud and breach of fiduciary duty claims. (Id.) Further, Defendants argue that no tolling argument would apply to Plaintiff’s claims, because Plaintiff could not establish that he did not have an ability to find out about Defendants’ fraudulent actions “despite reasonable diligence.” (Id.)

Defendants rely on Amtower v. Photon Dynamics, Inc. (2008) 158 Cal.App.4th 1582 (Amtower) and WA Southwest 2, LLC v. First American Title Insurance Company (2015) 240 Cal.App.4th 148 (WA Southwest) for the proposition that tolling does not occur, notwithstanding any fiduciary relationship, when the nature of the relationship does not prevent Plaintiff from discovering the misrepresentations he later alleges. Plaintiff contends on opposition that Amtower and WA Southwest does not stand for this proposition. (Opposition, 22-23.)

In Amtower, Plaintiff alleged that defendant, in merging with another company, violated section 11 of the federal Securities Act of 1933, breached their fiduciary duty and misrepresented and concealed certain facts about the transferability of Plaintiff’s stock in connection with the merger. (Amtower, supra, 158 Cal.App.4th at 1587.) A section 11 claim carries a one-year statute of limitations. (Id. at 1592.) At Plaintiff continued deposition before trial, Plaintiff testified that he had read the S-4 statement in 1999. (Id.) Defendants contended through a motion in limine that Plaintiff’s section 11 claim was barred by the statute of limitations and the Court of Appeal agreed, finding that defendants “disclosed the facts necessary to support the section 11 cause of action in December 1999,” when Plaintiff read the S-4 statement. (Id. 1597.)

In WA Southwest, real estate investors brought action against escrow companies for breach of fiduciary duty, fraud and conversion. (WA Southwest, supra, 240 Cal.App.4th at 151.) The applicable statutes of limitations for Plaintiffs’ actions ranged from one year to four years, while the initial complaint was not filed until more than six years after Plaintiffs purchased their interests in the property. (Id. at 156.) Although Plaintiffs argue that the statute of limitations on their claims only began to run when they consulted with tax and accounting experts in 2012, the Court of Appeal disagreed, finding that a reasonably diligent investor in Plaintiffs’ circumstances would have reviewed the private placement memorandum on plaintiffs’ investments before investing, as the memorandum disclosed the fees, expenses, commissions and risk that Plaintiffs were to undertake. (Id. at 157.)

Here, Defendants contend that Plaintiff’s situation is similar to both Plaintiffs in Amtower and WA Southwest in that nothing prevented Plaintiff from obtaining information earlier. (Motion, 13-14.) Specifically, Defendants contend that Plaintiff was President and CEO of Systems and that he had access to appraisals and other information about Systems’ real estate as early as 2006. (DSS, ¶¶ 76-78.) Defendants also contend that Plaintiff knew his father, Robert Irvin, was responsible for setting the price and value of Systems’ assets but that he never asked his father for how the values were reached. (DSS, ¶ 79.)

Plaintiff does not dispute the holdings in Amtower and WA Southwest but contends that his situation is dissimilar in that he was prevented from learning full and complete information about his claims. (Opposition, 20-23; PSS, ¶¶ 76-78.) Specifically, Plaintiff contends that while he was tasked with signing leases, his signatures were added to leases without his review of same. (PSS, ¶ 76; Irvin Decl., ¶¶ 6-8.) Plaintiff also attests that his father would tell him not to be involved in real estate and that it was “none of your business.” (Irvin Decl., ¶ 6.)

Given the foregoing and viewing the evidence in the light most favorable to Plaintiff the court finds that Defendants have failed to demonstrate the absence of a triable issue of fact with respect to whether Plaintiff’s claims are time-barred. Although Defendants argue that Plaintiff was not prevented from learning about information to support his claims given his position of power with Systems and relationship with his father, Plaintiff has presented admissible evidence to the contrary. Accordingly, triable issues of material fact exist with respect to whether Plaintiff was actually prevented from learning about facts to support his claims “despite reasonable diligence.”

As such, the court DENIES summary adjudication with respect to this issue.

  1. Issue Five: Plaintiff’s fourth cause of action for breach of contract and eighth cause of action for goods and services rendered should be dismissed against Betty Irvin because she did not make any representations or enter into an agreement with Plaintiff.

Defendants next contend that summary adjudication should be granted as to the fourth and eighth cause of action against Betty Irvin because she did not make any representations against Plaintiff. (Motion, 15.) Specifically, Defendants contend that while Betty Irvin may have been present during Plaintiff and his father’s discussions, she herself did not make Plaintiff any representations or agree to pay a success fee. (Id.; DSS ¶ 94.)

Plaintiff does not seem to directly oppose this argument in his opposition. Plaintiff appears to dispute Defendants’ statement regarding Betty Irvin’s involvement in the oral agreement, but states that Betty Irvin was present when the oral agreement was struck and “did not object to the agreement.” (PSS, ¶ 94; Irvin Decl., ¶¶ 44-48.) Plaintiff also contends that Betty Irvin did not object to the amendment to Plaintiff and Robert Irvin’s oral agreement. (Id.)

Defendants submit the declaration of Betty Irvin in support of their motion on this issue. Betty Irvin declares that she was never involved in the family business and never acted on behalf of Systems, Services or Kumiva. (Declaration of Betty Irvin in Support of Motion, ¶ 3.) Betty Irvin further attests that she was present one day when Plaintiff came to speak with Robert Irvin about the business but does not know exactly what was discussed. (Id. ¶¶ 4-6.)

Plaintiff submits his own declaration in support of his contention, as well as a copy of the Consulting Agreement he contends accurately reflects the oral agreement with Robert Irvin. Plaintiff attests that on or about October 1, 2011, his father [Robert Irvin] “on behalf of himself, my mother and Kumiva” asked him to work on the Garda litigation. (Irvin Decl., ¶ 44.) Plaintiff’s declaration makes no other reference to Betty Irvin’s role in the oral agreement, other than that she was present in 2013 when the agreement was modified.

Given the foregoing and viewing the evidence in the light most favorable to Plaintiff, the court finds that Defendants have established the absence of a triable issue of material fact with respect to this issue. Defendants contend that alleged oral agreement providing for Plaintiff to be paid a success fee cannot be enforced against Betty Irvin because she was never party to the agreement and did not make Plaintiff any representations. Plaintiff appears to oppose this contention, but has only produced evidence, at best, which suggests that Robert Irvin may have made the oral agreement on his own behalf and on behalf of Kumiva and Betty Irvin. Plaintiff’s opposition otherwise only refers to Betty Irvin as an owner or shareholder and makes no reference to any representations or agreements she entered into. Thus, the court finds this insufficient to raise a triable issue with regard to Betty Irvin’s liability under the alleged oral agreement to pay Plaintiff.

Accordingly, the court GRANTS summary adjudication with respect to this issue.

  1. Issue Six: Plaintiff’s fourth cause of action for breach of contract and eighth cause of action for goods and services rendered should be dismissed because the parties never entered into an oral agreement.

Defendants next contend that Plaintiff’s fourth and eighth causes of action should be dismissed in their entirety because no oral agreement was entered into. (Motion, 15-16.) Defendants contend that Plaintiff’s only evidence in support of an oral agreement is his own self-serving statement and that given the evidence to the contrary, no oral agreement actually existed. (Id.) Specifically, Defendants contend that the following evidence supports that no oral agreement existed: (1) Betty Irvin denies that an agreement existed (DSS ¶ 114), Weissman testified that Robert Irvin told him that he never agreed to pay Plaintiff a success fee (DSS ¶ 111), Plaintiff’s draft agreement makes no mention of a success fee (DSS ¶ 109), and Robert Irvin’s handwritten note indicating that Kumiva should not execute Plaintiff’s contract for services (DSS ¶ 110.) On reply, Defendants reiterate these contentions. (Reply, 7-9.)

Plaintiff contends that he and Robert Irvin entered into an oral agreement for his services on the Garda litigation. (Irvin Decl., ¶¶ 43-48.) Plaintiff further contends that the oral agreement was affirmed by Robert Irvin verbally and by both Robert Irvin and Kumiva through their actions of paying him his fees. (Compendium of Exhibits in Support of Opposition, exhibits 8, 10.) Plaintiff points to his own declaration, in which he attests to the formation of the contract, and to check stubs he received from both Robert Irvin and Kumiva, in support of his contention.

Given the foregoing and viewing the evidence in the light most favorable to Plaintiff, the court finds that Defendants have failed to establish the absence of a triable issue of material fact. Defendants contend that notwithstanding Plaintiff’s statements indicating that an oral agreement existed, the only reasonable explanation is that no oral agreement existed. However, this is insufficient for purposes of summary judgment because Plaintiff contends on opposition that an oral agreement did exist and because Plaintiff has submitted admissible evidence in support of his contention. Further, Defendants’ submitted evidence is insufficient to establish no triable issue of material fact as to the oral agreement, as Defendants’ only evidence (Betty Irvin and Charles Weissman’s testimony) is largely hearsay without exception.

Accordingly, the court DENIES summary adjudication on this issue.

  1. Issue Seven: Plaintiff’s fourth cause of action for breach of contract and eighth cause of action for goods and services rendered should be dismissed because the claims arise from Plaintiff’s unclean hands.

Defendants next contend that Plaintiff’s fourth and eighth causes of action should be dismissed because Plaintiff chose to enter into the oral agreement rather than commit the agreement to writing for purposes of allegedly defrauding his ex-wife, which Defendants contend constitutes unclean hands. (Motion, 16-17; DSS ¶ 133.)

Plaintiff contends that he was not concerned with dividing assets with his ex-wife as his divorce had been finalized. (PSS, ¶ 133; Irvin Decl., ¶¶ 46-49; Weissmann Deposition, 47:12-48:3.) Plaintiff contends that instead, only Robert Irvin was concerned with keeping the oral agreement oral as Robert Irvin allegedly believed doing so would benefit Plaintiff. (Id.) Plaintiff points to his own declaration and Charles Weissmann’s deposition in support of his contention.

Charles Weissmann testifies to his understanding of Robert Irvin’s handwritten note regarding the agreement, as follows:

“Q: And was there an issue with putting it in writing because of Richard’s divorce?

A: Yes.

Q: So we knew that there was an agreement of some sort, but it couldn’t be documented –

A: That’s exactly what Bob was alluding to in the note.

Q: was the issue that Helene Irvin was going to claim it as an asset of the family estate?

A; I don’t know, but clearly, that was the indication.”

(Weissmann Deposition at pp. 47:12-22.)

Further, Plaintiff testified that he spoke to Robert Irvin about signing the agreement and that Robert Irvin told him he had concerns about Plaintiff’s ex-wife. (Irvin Deposition, 151:9-152:11.) Plaintiff testifies that sometime thereafter, he and Robert Irvin spoke again about the matter and apparently came to an agreement about the terms. (Id.)

Given the foregoing and viewing the evidence submitted in the light most favorable to Plaintiff, the court finds that Defendants have failed to establish the absence of a triable issue of material fact with respect to whether Plaintiff only entered into an oral agreement for the purpose of defrauding his ex-wife. Although Defendants contend that Plaintiff chose an oral agreement only for that purpose, the testimony they submit in support of their contention only appears to demonstrate that Robert Irvin, not Plaintiff, was concerned about Plaintiff’s ex-wife having access to his assets. Plaintiff testified to Robert Irvin’s concerns in his deposition, as well as Charles Weissman in his deposition. Thus, triable issues of material fact exist with regard to why Plaintiff chose to enter into an oral, not written agreement with Robert Irvin over his payment in connection with the Garda litigation. Moreover, even if Plaintiff was attempting to withhold financial information during litigation with his wife/ex-wife, that would have been unclean hands as to her; not as to the Defendants in this action.

Accordingly, the court DENIES summary adjudication on this issue.

  1. Issue Eight: Plaintiff’s fourth cause of action for breach of contract and eighth cause of action for goods and services rendered should be dismissed because the oral contract would have been entered into under duress.

Finally, Defendants contend that Plaintiff’s fourth and eighth causes of action should be dismissed because the oral agreement would have been entered into under duress. (Motion, 17-18.) Specifically, Defendants contend that Plaintiff reached an agreement with Robert Irvin on January 28, 2013 after a heated exchange in which Plaintiff threatened his father and, as such, any agreement is invalid because it would have occurred under duress. (Id.)

“An apparent consent is not real or free when obtained through duress…” (Cal. Civ. Code § 1567.) “Duress envisions some unlawful action by a party by which one’s consent is obtained through fear or threats.” (Keithley v. Civil Services Board (1970) 11 Cal.App.3d 443, 450.) Duress consists of “unlawful confinement of another’s person, or relatives, or property . . .” (Cal. Civ. Code § 1569.) Duress is sufficient to invalidate a contract if the amount applied affected the individual so as to “deprive him of contractual volition.” (McIntosh v. McIntosh (1962) 209 Cal.App.2d 371, 373.)

Defendants mainly rely on the Declaration of Betty Irvin in support of their contentions on this issue. Betty Irvin declares that she was present “one day” when Plaintiff arrived at she and Robert Irvin’s home to speak about the business, but that she does not know exactly what was discussed. (Betty Irvin Decl., ¶¶ 4, 6.) Betty Irvin further declares that Plaintiff was “angry” and that she heard him “make threatening remarks.” (Id.) Betty Irvin also attests that Plaintiff was standing while Robert Irvin was lying on the couch and that she believed Plaintiff “was going to choke Bob” at one point during the conversation. (Id. ¶ 5.) Betty Irvin also declares that she believed Plaintiff “appeared to be ready to kill Bob.” (Id. ¶ 6.)

Plaintiff disputes each of these statements and objects to Betty Irvin’s declaration, as discussed above. Overall, Plaintiff contends that there were no threats or intimidation and that he has never sought to threaten or intimidate Robert Irvin, his father. (Irvin Decl., ¶ 46.)

Given the foregoing and viewing the evidence submitted in the light most favorable to Plaintiff, the court finds that Defendants have failed to demonstrate the absence of a triable issue of material fact with respect to whether the oral agreement was formed under duress. Defendants’ only evidence in support of this contention is the declaration of Betty Irvin. Betty Irvin, by her own admission, has never been involved in Systems, Services or Kumiva. Further, Betty Irvin, by her own admission, did not know what was discussed on or about January 2013 when Plaintiff came to their home to speak with Robert Irvin. Moreover, Plaintiff has submitted his own declaration in support of his contention that he never engaged in threats, intimidation or other actions constituting duress towards Robert Irvin. Thus, the court finds that triable issues of material fact exist regarding whether the oral agreement or any portion thereof was entered into as a result of duress.

Accordingly, the court DENIES summary adjudication with respect to this issue.

III. Conclusion

Defendants’ motion for summary judgment or, in the alternative, summary adjudication is GRANTED with respect to issues number one, three and five. The motion is MOOT with respect to issue 2 and is otherwise DENIED with respect issues four, six, seven and eight. Defendants are to give notice.


[1] Plaintiff asserts claims against Defendant Betty Irvin in her individual capacity and as trustee of the R. and B. Irvin Living Trust dated March 1, 1990 (the “Living Trust”) and as trustee of the Betty F. Irvin and Robert G. Irvin Revocable Community Property Trust (the “Community Property Trust”).

[2] Plaintiff originally also asserted the first cause of action against the Betty Irvin, the Living Trust, and the Community Property Trust and asserted the second cause of action against the Living Trust and the Community Property Trust. Plaintiff dismissed these causes of action as to these Defendants on March 20 and 21, 2019.