Motion for Summary Judgment, or [sic] in the Alternative, Summary Adjudication to the Complaint by Defendant Hunter Laboratories, LLC

On November 26, 2013, Hunter filed the motion presently before the court: a motion for summary judgment or [sic] in the alternative, summary adjudication on the Complaint. (Code Civ. Proc. § 437c.) Hunter argues that there are no triable issues of material fact and thus judgment should be granted as a matter of law. In the alternative, Hunter seeks summary adjudication with respect to each of the six claims in the Complaint.

“Summary judgment is properly granted when no triable issue of material fact exists and the moving party is entitled to judgment as a matter of law. A defendant moving for summary judgment bears the initial burden of showing that a cause of action has no merit by showing that one or more of its elements cannot be established or that there is a complete defense. Once the defendant has met that burden, the burden shifts to the plaintiff ‘to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto.’ ‘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.’” (Madden v. Summit View, Inc. (2008) 165 Cal.App.4th 1267, 1272 [internal citations omitted].)

Hunter’s motion for summary judgment to the Complaint is DENIED for the reasons stated below with respect to each of the six causes of action and the statute of limitations issue. (See Gleason v. Klamer (1980) 103 Cal.App.3d 782 [appellate court reversed trial court’s order granting summary judgment because there was a single triable issue of fact].)

Hunter’s motion for summary adjudication to the first cause of action for breach of contract is DENIED. On summary adjudication, Hunter offers evidence claiming that it never entered into any contract with Plaintiff. (See Hunter’s Separate Statement of Undisputed Facts at No. 2 and 7.) However, in opposition, Plaintiff offers evidence showing that defendant Riedel, as the majority shareholder, assigned its rights and liabilities related to the qui tam action to Hunter. (See Plaintiff’s Additional Fact at Nos. 22-30.) Given this evidence of the assignment and transfer, a trier of fact may conclude that Hunter should be held liable for breach of contract by failing to pay proceeds from the qui tam lawsuit to Plaintiff.

Hunter’s motion for summary adjudication to the second cause of action for promissory estoppel is DENIED. On summary adjudication, Hunter argues that it never made any promise to pay settlement proceeds to Plaintiff from the qui tam action. (See Hunter’s Separate Statement of Undisputed Facts at No. 2, 3, and 7.) Hunter claims that the only promise in this action stems from defendant Riedel to Plaintiff. (Id. at No. 7.) However, as stated above, Plaintiff provided evidence showing that the qui tam lawsuit was transferred over to Hunter in 2008. (See Plaintiff’s Additional Fact at Nos. 23-26.) Furthermore, after Hunter was named as a party in the qui tam lawsuit, Riedel assured Plaintiff in 2009, that they would split the proceeds from the litigation. (Id. at No. 30.) Thus, any promise made by Riedel to Plaintiff appears to be made on behalf of defendant Hunter to support the promissory estoppel claim.

Hunter’s motion for summary adjudication to third cause of action for unjust enrichment is DENIED. A claim for unjust enrichment ordinarily appears when benefits were conferred by mistake, fraud, coercion or request. (See Dinosaur Development, Inc. v. White (1989) 216 Cal.App.3d 1310, 1316.) On summary adjudication, Hunter argues that Plaintiff has no evidence that such benefits were conferred by mistake, fraud, coercion or request. However, Hunter offers no material facts or evidence demonstrating that Plaintiff lacks such evidence. Furthermore, in opposition, Plaintiff submits evidence showing that he performed work on the qui tam case as requested by Defendants. (See Plaintiff’s Additional Fact at No. 27.) Given this evidence, a trier of fact may conclude, in the absence of any enforceable agreement, that a claim for restitution is appropriate. (See Hernandez v. Lopez (2009) 180 Cal.App.4th 932, 938 [unjust enrichment doctrine applies where there is no enforceable contract].)

Hunter’s motion for summary adjudication to the fourth cause of action for conversion is DENIED. On summary adjudication, Hunter argues that Plaintiff cannot establish a property right in the company’s portion of the qui tam settlement proceeds. This argument is based in part on the fact that Hunter did not promise anything to Plaintiff. However, as stated above, defendant Riedel, as the sole managing partner of Hunter, promised Plaintiff that he would be entitled to split in the proceeds from the qui tam settlement. (See Plaintiff’s Additional Fact at Nos. 29-30.) Thus, the court finds no basis for summary adjudication of this claim.

Hunter’s motion for summary adjudication to the fifth cause of action for money due and the sixth cause of action for quantum meruit is DENIED. On summary adjudication, Hunter again argues that it did not have a contract with Plaintiff and thus there is no obligation to pay settlement proceeds to Plaintiff. (See Hunter’s Separate Statement of Undisputed Facts at No. 2 and 7.) However, as stated above, there is sufficient evidence in this record showing that Plaintiff had a contract with Riedel and Hunter allowing for the proceeds of the qui tam settlement to be split among the parties. (See Plaintiff’s Additional Fact at Nos. 22-30.)

Hunter’s motion for summary judgment to the Complaint based on the statute of limitations is DENIED. “Statute of limitations is the collective term applied to acts or parts of acts that prescribe the periods beyond which a plaintiff may not bring a cause of action.” (V.C. v. Los Angeles Unified School Dist. (2006) 139 Cal.App.4th 499, 509.) “A plaintiff must bring a claim within the limitations period after accrual of the cause of action. In other words, statutes of limitation do not begin to run until a cause of action accrues. Generally speaking, a cause of action accrues at the time when the cause of action is complete with all of its elements.” (Id. at pp. 509-510 [internal citations and quotation marks omitted].)

On summary judgment, Hunter argues that all of the claims in this action arise from the alleged agreement between Plaintiff and Riedel with respect to the qui tam lawsuit. (See Hunter’s Separate Statement of Undisputed Facts at No. 4.) Hunter asserts that these claims are time-barred as Plaintiff was on notice as early as July 2007 that he was not a named party on the qui tam complaint. (Id. at No. 8.) Plaintiff did not file this action until July 2012. Thus, even under a generous four-year statute of limitations for claims not specified in the code, Plaintiff would need to seek relief against Hunter no later than 2011. Since the action was not filed until 2012, Hunter argues that the action is time barred.

However, as the opposition points out, the statute of limitations does not begin to run until a claim “accrues.” (See Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1191 [a cause of action accrues when it is complete with all of its elements—those elements being wrongdoing, harm, and causation].) Under the parties’ agreement, Plaintiff wouldn’t be entitled to any proceeds at least until the qui tam litigation had concluded. Here, the qui tam litigation settled for $241 million in May 2011. (See Plaintiff’s Additional Fact No. 31.) Thus, any alleged breach on the part of Hunter would have occurred sometime after May 2011. Since the complaint was filed in July 2012, the claims in the Complaint would appear to be timely.

Furthermore, the omission from the caption of the qui tam case might be construed as an alleged repudiation of the parties’ deal. “Anticipatory breach occurs when one of the parties to a bilateral contract repudiates the contract. The repudiation may be express or implied. An express repudiation is a clear, positive, unequivocal refusal to perform; an implied repudiation results from conduct where the promisor puts it out of his power to perform so as to make substantial performance of his promise impossible.” (Ferguson v. City of Cathedral City (2011) 197 Cal.App.4th 1161, 1168 [internal quotation marks omitted].)

“When a promisor repudiates a contract, the injured party faces an election of remedies: he can treat the repudiation as an anticipatory breach and immediately seek damages for breach of contract, thereby terminating the contractual relation between the parties, or he can treat the repudiation as an empty threat, wait until the time for performance arrives and exercise his remedies for actual breach if a breach does in fact occur at such time.” (Ferguson v. City of Cathedral City, supra, 197 Cal.App.4th at p. 1168 [internal quotation marks omitted].)

“For the purpose of determining when the period of limitation begins to run, the defendant’s non-performance at the day specified may be regarded as a breach of duty as well as the anticipatory repudiation. The plaintiff should not be penalized for leaving to the defendant an opportunity to retract his wrongful repudiation; and he would be so penalized if the statutory period of limitation is held to begin to run against him immediately.” (Romano v. Rockwell Internat., Inc. (1996) 14 Cal.4th 479, 489 [citation omitted].)

Here, even if Plaintiff’s omission from the qui tam complaint is construed as a repudiation of the agreement, Plaintiff would still have the option of bringing suit against Hunter if it failed to pay him following the settlement. Moreover, defendant Riedel testified at deposition that Plaintiff was not named in the qui tam complaint as a protective measure for Plaintiff’s benefit. (See Plaintiff’s Additional Fact No. 29.) Also, as late as 2009, Riedel had assured Plaintiff that he would be entitled to split in any settlement proceeds. (Id. at No. 30.) If credited by the trier of fact, such evidence may negate any claim for implied anticipatory repudiation by Defendants. Therefore, the court should finds that Plaintiff’s claims are not barred by the statute of limitations.

Motion for Summary Judgment to the Complaint by Defendant Chris Riedel

Riedel’s motion for summary judgment is based solely on the statute of limitations issue addressed above in Hunter’s motion. The arguments based on the statute of limitations are identical in both motions.

Therefore, for the reasons stated above, Riedel’s motion for summary judgment is DENIED.