Case Name: LOUIS ARRIAGA, ET AL. v. JASON LARA, ET AL.
Case No.: 17CV310003

This matter arises from a dispute between Louis Christopher Arriaga, the sole shareholder of Arriaga & Associates, Inc. (collectively “Plaintiff”) and Plaintiff’s former employees Defendants Jason Lara and Jose Segura, and the business entity they had previously formed, Maddison Group, Inc. (collectively “Defendants”) among others. Plaintiff claims that when Defendants left his security company they illegally took his biggest customer (the Dave & Busters restaurant chain) with them as a client for their own security company (Defendant Maddison Group), using knowledge they had gained with Defendant to do so. Plaintiff’s original verified complaint was filed on May 11, 2017 and stated claims for: 1) Unfair Competition (§ 17200); 2) Intentional Interference with Prospective Economic Advantage; 3) Breach of Fiduciary Duty; 4) Conversion; 5) Conspiracy; 6) Breach of Implied-in-Fact contract, and; 7) Injunctive Relief. A demurrer to the original complaint was heard on August 10, 2017 and, in an order dated August 11, 2017, sustained with leave to amend in part and overruled in part.

The resulting verified First Amended Complaint (“FAC”) filed August 22, 2017 states seven causes of action: 1) Fraudulent Concealment; 2) Unfair Competition (alleging at 33 that Defendants used unidentified trade secrets “to steal Plaintiff’s customer.”; 3) Intentional Interference with Prospective Economic Advantage; 4) Breach of Fiduciary Duty (now alleged against Defendant Jason Lara only); 5) Conversion; 6) Conspiracy, and; 7) Breach of Implied-In-Fact Contract. Currently before the Court is Defendants’ motion for summary judgment/adjudication directed at the FAC.

Plaintiff’s request for a continuance of this motion is deemed a discretionary request as the declaration of Plaintiff Counsel Barzin Barry Sabahat does not satisfy the criteria for a mandatory request set forth in Code of Civil Procedure (“CCP”) § 437c(h). Plaintiff Counsel’s declaration fails to state facts establishing a likelihood that controverting evidence may exist and why the information sought is essential to opposing the motion; the specific reasons why such evidence cannot be presented at the present time, and an estimate of the time necessary to obtain such evidence. At best it is implied that Counsel expects unidentified evidence that will be sought through unidentified discovery methods will provide evidence “essential” to defeat the motion, but that evidence is not described. (See CCP §437c(h); Granadino v. Wells Fargo Bank, N.A. (2015) 236 Cal.App.4th 411, 420 [declaration that “additional information and testimony” required to “adequately respond to Defendant’s Motion” insufficient; Cooksey v. Alexakis (2004) 123 Cal.App.4th 246, 254 [stating only that “further discovery or investigation is contemplated” is not sufficient]; Johnson v. Alameda County Med. Ctr. (2012) 205 Cal.App.4th 521, 532 [declaration stating “discovery is reasonably necessary to determine who” may be responsible for injury “insufficient to support a continuance.”])

Considered as a discretionary request, the request for a continuance is DENIED as Plaintiff Counsel’s declaration fails to establish good cause for such a continuance.

The targeted pleading limits the issues presented for a motion for summary judgment or adjudication, and such a motion may not be granted or denied based on an issue not raised by the targeted pleading. (See Government Employees Ins. Co. v. Sup. Ct. (2000) 79 Cal.App.4th 95, 98; Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1258; Nieto v. Blue Shield of Calif. Life & Health Ins. (2010) 181 Cal.App.4th 60, 73 [“the pleadings determine the scope of relevant issues on a summary judgment motion.”].) The moving party bears the initial burden of production to make a prima facie showing that there are no triable issues of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty. (See CCP §437c(f)(1); McClasky v. California State Auto. Ass’n (2010) 189 Cal.App.4th 947, 975 [“If a cause of action is not shown to be barred in its entirety, no order for summary judgment—or adjudication—can be entered.”]; Palm Spring Villas II Homeowners Association, Inc. v. Parth (2016) 248 Cal.App.4th 268, 288.) Summary adjudication of general “issues” or of facts is not permitted. (See Raghavan v. The Boeing Company (2005) 133 Cal.App.4th 1120, 1136.)

The moving party’s declarations and evidence will be strictly construed in determining whether they negate or disprove an essential element of a plaintiff’s claim “in order to resolve any evidentiary doubts or ambiguities in plaintiff’s (or opposing party’s) favor.” (Johnson v. American Standard, Inc. (2008) 43 Cal.4th 56, 64, parentheses added.) While the same standards of admissibility govern both, the opposition declarations are liberally construed while the moving party’s evidence is strictly scrutinized. (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768.) Neither party can rely on its own pleadings (even if verified) as evidence to support or oppose a motion for summary judgment or summary adjudication. (College Hospital, Inc. v. Sup Ct. (1994) 8 Cal.4th 704, 720.) The moving party may generally not rely on additional evidence filed with its Reply papers. (San Diego Watercrafts, Inc. v. Wells Fargo Bank, N.A. (2002) 102 Cal.App.4th 308, 316.)

The opposing party may be bound by admissions made in deposition testimony or written discovery responses. “Where a declaration submitted in opposition to a motion for summary judgment clearly contradicts the declarant’s earlier deposition testimony or discovery responses, the trial court may fairly disregard the declaration and ‘conclude there is no substantial evidence of the existence of a triable issue of fact.’” (Whitmire v. Ingersoll-Rand Co. (2010) 184 Cal.App.4th 1078, 1087, citing D’Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 21.)

“A defendant seeking summary judgment [or adjudication] must show that at least one element of the plaintiff’s cause of action cannot be established, or that there is a complete defense to the cause of action. … The burden then shifts to the plaintiff to show there is a triable issue of material fact on that issue.” (Alex R. Thomas & Co. v. Mutual Service Casualty Ins. Co. (2002) 98 Cal.App.4th 66, 72; internal citations omitted, brackets added.)

Defendants assert they are entitled to summary judgment/adjudication because “Plaintiffs cannot meet their burden of proving” any of the FAC’s seven causes of action. (See Notice of Motion at 2:3-10.)

As an initial matter, Plaintiff’s argument that the entire motion must be denied because Defendants have not filed an answer to the FAC (relying primarily on Orange County Air Pollution Control Dist. v. Superior Court (1972) 27 Cal.App.3d 109, 112-114) is rejected as legally incorrect. This has been the case for many years. “It is clear that the version of section 437c existing in the Orange County case envisioned the prior existence of an answer by the defendant prior to a motion for summary judgment by plaintiff. . . . The language of the statute has changed, and no longer refers to an answer. . . . We respect the argument in Orange County, supra, that consideration of a motion for summary judgment can be accomplished more effectively in many cases when an answer has been filed and the issues and defenses delimited thereby. Nevertheless, in amending section 437c after the decision in Orange County, the Legislature deleted language that implicitly required an answer to be on file. We are bound by the Legislature’s determination on this issue.” (Sadlier v. Superior Court (1986) 184 Cal.App.3d 1050, 1054-1056, internal citations omitted.) Even prior to the amendment of CCP § 437c it did not defense MSJs such as this one. “California courts in interpreting statutes before and after that in effect in Orange County have found that a defendant can make a motion for summary judgment even though no answer is on file and a demurrer has not been decided.” (Id. at 1056, fn. 5, emphasis in original.)

Defendants rely in large part on the deposition testimony and verified discovery responses of Louis Arriaga. In his deposition testimony (exhibit 1 to Defendants’ “Compendium of Declarations and Exhibits”) Mr. Arriaga testified (46:2-19) that Arriaga & Associates had no board, no directors, no stock and no officers. He later clarified (at 104:3-8) that he, as President, was the only officer. He testified that Arriaga & Associates had no written policy manual or written overtime policy, and (at 100:20-103:21) that all employees including Defendants were required to acknowledge in writing that their employment was “part-time, on-call status only.” He further testified (125:5-8) that he personally negotiated the hourly rate for security guard services with Dave & Buster’s and that Defendants were not present when he did so. He testified (140:8-143:1) that he had “leads” at each Dave & Buster’s location who did the scheduling of the security guards but insisted that “leads” were not supervisors. When directly asked, he testified (at 172:20-22 & 175:13-15) that Defendants Lara and Segura were not officers. He admitted (at 209:7-18, and 212:22-213:4) that no one at Dave & Buster’s or anywhere else had ever told him that Defendants had solicited Dave & Buster’s business while employed by Arriaga. He also admitted (at 262:24-263:10) that he had never asked Segura or Lara about it.

In his verified responses to requests for admissions (“RFAs,” Defendants’ exhibit 2) Mr. Arriaga admitted that Defendant Lara was at at-will employee (RFA 2), that Lara “never equipped his security business using your credit,” (RFA 3) and that no one ever told him that Lara was stealing money or trying to equip his business with Arriaga’s credit (RFAs 13-14). He admitted that Defendant Segura was an at-will employee (RFA 15), that no vendor ever told him that Segura was trying to steal money, equip his business using Plaintiff’s credit or was attempting to “usurp” his logo. He also admitted that (RFA 32) Segura never usurped his logo and (RFA 39) never equipped his business using Plaintiff’s credit or (RFA 36) stole “cash” from him.

In the excerpts from Mr. Arriaga’s verified responses to document requests (submitted as Defendants’ exhibit 3) he states that he cannot produce copies of any incorporation documents for Arriaga & Associates, any documents designating Defendant Lara as a “Director of Operations,” or copies of any Handbook or Policy Manual for Arriaga & Associates because either no such documents exists or they cannot be found.

The only admissible evidence submitted by Plaintiff in opposition is a declaration from Louis Arriaga, and only paragraphs 3, 7 and 10 of that declaration are cited in the opposing Separate Statement. That declaration is disregarded to the (significant) extent it is inconsistent with or contradictory to Mr. Arriaga’s sworn deposition testimony or verified discovery responses. (See Whitmire, supra.) The only other material submitted by Plaintiff, attached to the declaration of Plaintiff Counsel Sabahat, is not described or authenticated by Plaintiff Counsel. Therefore it has not been considered.

Defendants’ motion is GRANTED as follows, beginning with the fourth and seventh causes of action.

Fourth cause of action for breach of fiduciary duty (alleged against Lara only)
“The elements of a cause of action for breach of fiduciary duty are the existence of a fiduciary relationship, its breach, and damage proximately caused by the breach.” (Knox v. Dean (2012) 205 Cal.App.4th 417, 432, citing City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 483.) “While breach of fiduciary duty is a question of fact, the existence of legal duty in the first instance and its scope are questions of law.” (Kirschner Brothers Oil, Inc. v. Natomas Co. (1986) 185 Cal.App.3d 784, 790.) “Before a person can be charged with a fiduciary obligation, he must either knowingly undertake to act on behalf and for the benefit of another, or must enter into a relationship which imposes that undertaking as a matter of law.” (Oakland Raiders v. National Football League (2005) 131 Cal.App.4th 621, 632.) Fiduciary duties arise as a matter of law “in certain technical, legal relationships.” (Id.)

Plaintiff is bound by the FAC on summary judgment and the only stated basis for Lara’s fiduciary duty is his alleged status as an “Officer of the Business” (FAC at 3) and as one of the “managers and officers of the corporation.” (FAC at 46.) Plaintiff Louis Arriaga’s deposition testimony that Arriaga & Associates had no officers other than himself, that all employees including Defendant Lara were required to acknowledge in writing that their employment was “part-time, on-call status only,” that “leads” such as Defendant Lara were not supervisors and his testimony (exhibit 1 at 172:20-22) that the statement that Defendants Lara was not an officer was “correct” is more than sufficient to meet Defendants’ initial burden on this cause of action as the testimony constitutes a binding admission that the allegations in the FAC’s fourth causes of action are baseless and that Defendant Lara did not owe any Plaintiff any fiduciary duty.

When the burden shifts, Plaintiff cannot raise a triable issue as to whether Defendant Lara owed a fiduciary duty. There is no allegation in the FAC (and Lara denies in his declaration) that Lara ever agreed to act on behalf of or for the benefit of Plaintiff. An employer-employee relationship is not one of the relationships that give rise to a fiduciary duty as a matter of law. “Employment-type relationships are not fiduciary relationships.” (3 Witkin, Summary of Cal. Law (11th ed. 2017) Agency §3.) The fact that two or more parties are in a contractual relationship also does not, by itself, give rise to a fiduciary duty. “Every contract requires one party to repose an element of trust and confidence in the other to perform. For this reason, every contract contains an implied covenant of good faith and fair dealing, obligating the contracting parties to refrain from ‘ ‘doing anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract….’ ’ ‘Being of universal prevalence, [the implied covenant] cannot create a fiduciary relationship; it affords basis for redress for breach of contract and that is all.’” Wolf v. Sup. Ct. (2003) 107 Cal.App.4th 25, 31, internal citations omitted. The statement by Luis Arriaga, in his opposing declaration at 3 and 10, that he trusted Lara “with nearly every aspect of the Business,” cannot raise a triable issue on this cause of action. “The mere fact that in the course of their business relationships the parties reposed trust and confidence in each other does not impose any corresponding fiduciary duty in the absence of an act creating or establishing a fiduciary relationship known to law.” (Worldvision Enterprises, Inc. v. American Broadcasting Companies (1983) 142 Cal.App.3d 589, 595.) Also, contrary to the argument in the opposition the FAC does not allege that Defendant Lara (or Segura) was an agent of Plaintiff much less describe the scope of such an agency; it only alleges that Lara was an employee. “The two relationships are not considered identical. It is said that an employee works for the employer, while an agent also acts for and in the place of the principal for the purpose of bringing the principal into legal relations with third persons.” (Witkin, supra, at §4.)

Seventh cause of action for Breach of Implied in Fact contract
“An implied contract is one, the existence and terms of which are manifested by conduct.” (Civ. Code §1621, emphasis added; See also California Emergency Physicians Medical Group v. PacifiCare of California (2003) 111 Cal.App.4th 1127, 1134 [an implied contract “. . . consists of obligations arising from a mutual agreement and intent to promise where the agreement and promise have not been expressed in words. In order to plead a cause of action for implied contract, the facts from which the promise is implied must be alleged.”] Emphasis added.) A plaintiff must allege facts from which a factfinder could reasonably infer the parties’ mutual intention to contract. (Division of Labor Law Enforcement v. Transpacific Transportation Co. (1977) 69 Cal.App.3d 268, 277 [stating that “the very heart of an enforceable implied in fact contract is the mutual intention of the parties; hence the assumption, intention or expectation of either party alone can give rise to no inference of an implied contract”].) The presumption of consideration (Civil Code 1614) does not apply to an oral contract or a contract implied by conduct. Therefore, in an action based upon such a contract, the consideration must normally be alleged.

Defendants’ statements in their declarations (Lara Dec. at 19; Segura Dec. at 18, both submitted with the “Compendium”) denying that they any agreement with Louis Arriaga to communicate any problems that Dave & Buster’s had with Arriaga & associates is enough to meet their initial burden to show that no implied contract existed. When the burden shifts Plaintiff is unable to raise any triable issue of material fact as to the existence or breach of such a contract. The claim as pled in the FAC fails to state facts from which the parties’ mutual intention to contract above and beyond their at-will, part-time, on call employment relationship could be reasonably inferred. The allegation in the FAC at 66 that the contract “terms” were that “as long as Defendants were receiving their wages from Plaintiff they would perform their duties reasonably well,” fails to identify any additional consideration beyond the wages Defendants were already entitled to for providing security guard services.

Louis Arriaga’s deposition testimony (and RFA responses) that Defendants (and all other employees) were required to sign a writing stating that their employment status was part-time and on-call only is binding on Plaintiff and contradicts the allegation of an implied-in-fact contract requiring any duties above and beyond providing part-time on call security guard services for an hourly wage. “‘There cannot be a valid express contract and an implied contract, each embracing the same subject, but requiring different results.’ The express term is controlling even if it is not contained in an integrated employment contract. Thus, the … at-will agreement precluded the existence of an implied contract requiring good cause for termination.” (See Starzynski v. Capital Public Radio, Inc. (2001) 88 Cal.App.4th 33, 38.) Louis Arriaga’s statement in his opposing declaration (at 10) that he “understood” Defendants to owe him a duty to inform him “of developments that would affect my business and their jobs” does not raise a triable issue as an “expectation of either party alone can give rise to no inference of an implied contract.”

First cause of action for Fraudulent Concealment
The elements of a cause of action for fraud based on concealment are: (1) the defendant had a duty to disclose the concealed or suppressed fact to the plaintiff; (2) the defendant intentionally concealed or suppressed the fact with the intent to defraud the plaintiff; and (3) the plaintiff was damaged as a result. (Jones v. ConocoPhillips (2011) 198 Cal.App.4th 1187, 1198.) “A failure to disclose a fact can constitute actionable fraud or deceit in four circumstances: (1) when the defendant is the plaintiff’s fiduciary; (2) when the defendant has exclusive knowledge of material facts not known or reasonably accessible to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations that are misleading because some other material fact has not been disclosed.” (Collins v. eMachines, Inc. (2011) 202 Cal.App.4th 249, 255.) “[O]ther than the first instance, in which there must be a fiduciary relationship between the parties, ‘the other three circumstances in which nondisclosure may be actionable presuppose[ ] the existence of some other relationship between the plaintiff and defendant in which a duty to disclose can arise . . . ‘[W]here material facts are known to one party and not to the other, failure to disclose them is not actionable fraud unless there is some relationship between the parties which gives rise to a duty to disclose such known facts.’” (Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4th 1178, 1187 [internal citations omitted].)

Since Defendant Lara did not owe Plaintiff any fiduciary duty and Defendants did not owe any duty to disclose pursuant to a (non-existent) implied-in-fact contract, Defendants have established that this claim fails for lack of any duty to disclose that would support it. The argument by Plaintiff that Labor Code sections 2854, 2856, 2858, 2859 and Civil Code section 1549, cited in the FAC at 26, give rise to such a duty to disclose is unpersuasive. Statutory interpretation is a question of law for the Court and these very general statutes cannot be reasonably interpreted as giving rise to an employee duty to disclose facts to their employer in the manner Plaintiff alleges.

As noted above the FAC only alleges that Lara and Segura were employees; it does not allege that they were “agents” of Plaintiff, much less describe the scope of such an agency. Plaintiff cannot raise a triable issue through an argument unsupported by the FAC’s allegations. Louis Arriaga is bound by his discovery admissions that he had no evidence that Defendants Lara and Segura had solicited Dave & Buster’s business nor would any general employee duty of loyalty require Defendants to tell Plaintiff that Dave & Buster’s had informed them that it was terminating its existing security services vendor and asked Maddison Group to submit a proposal. An employee “does not breach his duty of loyalty by preparing to compete with his employer.” (Mamou v. Trendwest Resorts, Inc. (2008) 165 Cal.App.4th 686, 719.)

Second Cause of Action for Unfair Competition in violation of § 17200
“Business and Professions Code section 17200 et seq. prohibits unfair competition, including unlawful, unfair, and fraudulent business acts. The UCL covers a wide range of conduct. It embraces anything that can properly be called a business practice and that at the same time is forbidden by law.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1143.) “By proscribing unlawful business practices, the UCL borrows violations of other laws and treats them as independently actionable. In addition, practices may be deemed unfair or deceptive even if not proscribed by some other law. Thus, there are three varieties of unfair competition: practices which are unlawful, or unfair, or fraudulent.” (Blakemore v. Superior Court (2005) 129 Cal.App.4th 36, 48.)

Plaintiff has no claim under the UCL’s fraud prong as a matter of law. The FAC’s first cause of action does not provide support for it because “the UCL’s fraud prong generally ‘‘require[s] … a showing that members of the public are likely to be deceived.’’” (Moran v. Prime Healthcare Management, Inc. (2016) 3 Cal.App.5th 113, 1149, citing Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 81.) There are no allegations of public deception in the FAC, nor has Plaintiff offered any evidence of public deception.

Plaintiff also has no claim under the UCL’s unfairness prong. Plaintiff is not alleged to be a “consumer” in this lawsuit and the underlying premise of the allegations against Defendants Lara, Segura and Maddison Group is that they wrongfully attempted to establish themselves as direct business competitors of Plaintiff. “When a plaintiff who claims to have suffered injury from a direct competitor’s ‘unfair’ act or practice invokes section 17200, the word ‘unfair’ in that section means conduct that threatens an incipient violation of an antitrust law, or violates the policy or spirit of one of those laws because its effects are comparable to or the same as a violation of the law, or otherwise significantly threatens or harms competition.” (Cel-Tech Communications v. L.A. Cellular Tel. Co. (1999) 20 Cal.4th 163, 186-187.) There are no such allegations in the FAC and Plaintiff has not presented any evidence of such conduct.

Finally, Plaintiff has no claim under the unlawful prong. The allegation in the FAC at 34 that “[t]he actions of Defendants as described herein is based on legislative proclamation as set forth in Civil Code sections 1701, 1709, as well as Labor Code [sections] 2854, 2856, 2858, 2859 as well as Civil Code section 1549,” (FAC at 34) does not support a claim. In order to allege a claim under the unlawful prong of the UCL a plaintiff must identify the sections of the law allegedly violated and describe with reasonable particularity the facts supporting the violation. (See Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.) “An unlawful business practice under the [UCL] is anything that can properly be called a business practice and that at the same time is forbidden by law . . .” (61 Cal.Jur.3d, Unfair Competition, § 1, emphasis added.) Civil Code sections 1701 and 1709 do not support a claim under the UCL’s unlawful prong; as noted above to be actionable as a UCL claim an alleged fraud must be an attempt to deceive the general public. Civil Code section 1549 (“Contract” defined) does not describe or refer to an unlawful business practice. A breach of contract is not illegal; it merely gives rise to a remedy at law for damages. Labor Code sections 2854, 2856, 2858 and 2859 likewise do not describe business practices and thus do not support a claim under the UCL’s unlawful prong.

Third cause of action for Intentional Interference with Prospective Economic Advantage
The elements for intentional interference with prospective economic advantage “are usually stated as follows: (1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.” (Korea Supply v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153.) “[A]n act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.” (Id. at 1159.)

Plaintiff is bound by the FAC on summary judgment. Defendants have shown they are entitled to judgment on the first and second cause of action, incorporated into the third by reference (FAC at 38). The only independently wrongful act identified in the third cause of action itself (FAC at 42) is that Defendants’ alleged “disruption” was a violation of “Civil Code sections 1701, 1709, as well as Labor Code [sections] 2854, 2856, 2858, 2859 as well as Civil Code section 1549.” As already explained the cited Labor Code sections and Civil Code section 1549 do not support a claim. The claimed violations “of Civil Code section 1701 and 1709” also cannot serve as “independently wrongful acts” given the evidence presented. Section 1701 (referring to duplicate copies of contracts) does not “proscribe” any act. As for section 1709 (describing “Deceit”), Defendants have already established that the fraudulent concealment claim fails as alleged against them for lack of a duty to disclose and Plaintiff does not dispute the statements by Defendants Lara and Segura in their respective declarations that they never made any false statement to Plaintiff regarding their relationship with Dave & Buster’s, never made any false statement regarding anything communicated to Defendants by any employee of Dave & Buster’s and never made any misrepresentations regarding Plaintiff to Dave & Buster’s. (See Defense UMFs 70-72, undisputed by Plaintiff.)

Fifth Cause of Action for Conversion
“Conversion is the wrongful exercise of dominion over the property of another. 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. [Citation.]” (Lee v. Hanley (2015) 61 Cal.4th 1225, 1240, internal quotation marks omitted.)

Moving Defendants have met their initial burden to show that Plaintiff has no evidence that they converted Plaintiff’s property by a wrongful act by submitting the verified discovery responses of Louis Arriaga, which admit that he has no evidence that Lara or Segura converted any of part of his business. When the burden shifts Plaintiff cannot raise any triable issues. The statement by Louis Arriaga in his opposing declaration at 7 that unidentified vendors had told him that other defendants, Alacon and “Jerome,” (presumably meant to refer to non-moving Defendant Giron) “may be trying to steal money” does not raise a triable issue as to the moving Defendants Lara, Segura and Maddison Group.

Sixth Cause of Action for Conspiracy
Finally, civil conspiracy is not an independent tort. (See Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510-511.) Rather, it is a “‘legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasor a common plan or design in its perpetration.’ [Citation.]” (Kidron v. Movie Acquisition Corp. (1995) 40 Cal.App.4th 1571, 1581.) Liability for civil conspiracy requires three elements: (1) formation of the conspiracy (an agreement to commit wrongful acts); (2) operation of the conspiracy (commission of the wrongful acts); and (3) damage resulting from operation of the conspiracy. (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 47.)

Again, Plaintiff is bound by the FAC on summary judgment and the only basis for this claim specifically alleged in the FAC is a conspiracy to commit a breach of fiduciary duty, unfair competition and/or conversion. (See FAC at 59.) As Defendant Lara has established that he owed no fiduciary duty and Defendant Segura is not even alleged to have owed such a duty, no claims for conspiracy to breach a fiduciary duty can be maintained against Lara, Segura or Maddison Group. A conspiracy claim “cannot create a duty or abrogate an immunity. It allows tort recovery only against a party who already owes the duty and is not immune from liability based on applicable substantive tort law principles.” (Applied Equipment Corp., supra, at p. 514 [Court’s emphasis].) In short, Defendants cannot be liable for allegedly conspiring to breach a duty they did not owe.

As Plaintiff’s unfair competition claims fails as a matter of law against Defendants Lara, Segura and Maddison Group, the claim for conspiracy based on that claim fails as well. The Conversion claim also cannot support a conspiracy claim against Defendants Lara, Segura or Maddison Group given Plaintiff Louis Arriaga’s binding discovery admissions that Lara and Segura did not steal, convert or attempt to steal or convert any part of Arriaga & Associates.

The Court notes that both sides have submitted evidentiary objections. As neither set of objections fully complies with Rule of Court 3.1354, the Court will not issue individual rulings on the objections. (See Vineyard Spring Estates v. Super. Ct. (2004) 120 Cal.App.4th 633, 642 [trial courts only have duty to rule on evidentiary objections presented in proper format]; Hodjat v. State Farm Mutual Automobile Ins. Co. (2012) 211 Cal.App.4th 1 [trial court not required to rule on objections that do not comply with Rule of Court 3.1354 and not required to give objecting party a second chance at filing properly formatted papers].) Objections that are not ruled on are preserved for appellate review. (CCP § 437c(q).)