Case Name: APTFrame, Inc., et al. v. Jane Vaillancourt, et al.
Case No.: 2013-1-CV-247318

Currently before the Court is the motion by defendants Jane Vaillancourt (“Vaillancourt”) and NetApp, Inc. (“NetApp”) (collectively, “NetApp Defendants”) for summary adjudication of the fourth cause of action of the fifth amended complaint (“5AC”) of plaintiffs APTFrame, Inc. (“APTFrame”) and Vaughn Paladin (“Paladin”) (collectively, “Plaintiffs”).

Factual and Procedural Background

This is an action for defamation and intentional interference with contractual relations. Paladin is a shareholder and the president of APTFrame and Arcsona, Inc. (“Arcsona”). (5AC, ¶¶ 1-2, 12.) Paladin was also employed by APTFrame as a Senior Program Manager for NetApp pursuant to a Statement of Work. (Id. at ¶ 12.) APTFrame, defendant Global Anchorage, Inc. (“GA”), and Appirio, Inc. (“Appirio”) each provided temporary technology resources for various NetApp projects pursuant to written consulting agreements. (Id. at ¶ 10.) In addition, APTFrame and Arcsona provided technology resources for Appirio pursuant to independent contractor agreements between the parties. (Id. at ¶ 11.)

On June 4, 2012, Vijay Myneni (“Myneni”), a temporary technology resource employed by GA, approached Paladin concerning a position with APTFrame. (5AC, ¶ 13.) Myneni told Paladin that: (1) his GA contract with NetApp was finished; and (2) the president of GA—defendant Seema Nair (“Nair”)—told him that there was no additional work for him at GA. (Id. at ¶¶ 6, 13.) Paladin was aware of an open position at NetApp through Appirio, and Myneni was immediately interviewed and hired for that position. (Id. at ¶ 14.) Two days later, Myneni informed Nair “that he would be taking the Appirio position.” (Id. at ¶ 15.)

On June 7, 2012, Nair met with Paladin. (5AC, ¶ 16.) During the meeting, Nair accused Paladin “of ‘stealing’ Myneni from [GA].” (Ibid.) Paladin explained that Myneni approached him seeking work and he “acted only after ascertaining that [GA] could not provide other work for Myneni.” (Ibid.) Myneni later approached Nair and also explained that Paladin and APTFrame “had not sought to ‘steal’ him.” (Id. at ¶ 17.)

In spite of Paladin and Myneni’s explanations, on June 7, 2012, Nair “told one or more employees of [NetApp],” including Vaillancourt, an executive employee and managing agent of NetApp, “that [Paladin and APTFrame] had ‘stolen’ Myneni from [GA].” (5AC, ¶¶ 4, 18.) That same day, Vaillancourt terminated Paladin’s role as a Senior Program Manager under NetApp’s contract with APTFrame even though Paladin explained to her what really occurred with Myneni. (Id. at ¶¶ 19-20, 24.)

Paladin’s removal from his Senior Program Manager position was the start of a campaign by Vaillancourt to interfere with the contractual relationship between APTFrame and Appirio. (5AC, ¶ 24.) In furtherance of this campaign, Vaillancourt told an Appirio employee, Carl Krupitzer (“Krupitzer”), that “[Paladin and/or APTFrame] had poached or attempted to poach employees of other contractors who worked at [NetApp].” (Ibid.) Krupitzer “understood this to mean that [Paladin and/or APTFrame] had acted unlawfully or unethically.” (Ibid.) Vaillancourt continued to republish Nair’s alleged defamatory statement throughout 2013. (Id. at ¶¶ 18, 24-25.)

Furthermore, Vaillancourt instructed other NetApp employees, such as Tom Jones (“Jones”), to refrain from hiring APTFrame employees for NetApp projects. (5AC, ¶ 24.) Jones then informed Krupitzer that Appirio could no longer contract with Paladin’s companies, APTFrame and Arcsona, to supply workers to NetApp. (Id. at ¶ 25.) Vaillancourt also told Appirio’s chief executive officer, Chris Barbin (“Barbin”), that NetApp would no longer do business with APTFrame employees and requested that he replace any employees affiliated with APTFrame who were working on NetApp projects for Appirio. (Ibid.) Vaillancourt further told an Appirio software architect, Rob Rastovich (“Rastovich”), that NetApp was no longer going to do business with Paladin’s companies and Appirio could no longer use those companies to supply workers to NetApp. (Ibid.)

Since October 2012, Appirio has not selected APTFrame employees for any of the projects it has with NetApp. (5AC, ¶ 25.) Vaillancourt also arranged for NetApp’s termination of intern contracts with APTFrame, and refused to use any of APTFrame’s resources on projects under her control. (Id. at ¶¶ 27-28.)

Based on the foregoing allegations, Plaintiffs filed the operative 5AC against Nair, GA, Vaillancourt, and NetApp on January 11, 2018. The 5AC alleges causes of action for: (3) defamation per se (against Nair and GA); (4) intentional interference with contractual relations (against NetApp Defendants); and (7) violations of Business and Professions Code section 17200 (against NetApp Defendants).

On May 3, 2018, NetApp Defendants filed the instant motion for summary adjudication. Plaintiffs filed papers in opposition to the motion on July 12, 2018.

Discussion

Under Code of Civil Procedure section 437c, NetApp Defendants move for summary adjudication of the fourth cause of action of the 5AC.

I. Request for Judicial Notice

In connection with their moving papers, NetApp Defendants ask the Court to take judicial notice of their earlier motion for summary judgment and separate statement filed on May 11, 2017, and the court order on that motion dated September 8, 2017.

The subject documents are proper subjects of judicial notice as they are records of the superior court. (See Evid. Code, § 452, subd. (d) [permitting judicial notice of court records]; Stepan v. Garcia (1974) 43 Cal.App.3d 497, 500 [the court may take judicial notice of its own file].)

Accordingly, NetApp Defendants’ request for judicial notice is GRANTED.

II. Legal Standard on Motions for Summary Adjudication

The pleadings limit the issues presented for summary adjudication, and such a motion cannot be granted or denied on issues not raised by the pleadings. (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”]; Bostrom v. County of San Bernardino (1995) 35 Cal.App.4th 1654, 1663.) “A party may seek summary adjudication on whether a cause of action, affirmative defense, or punitive damages claim has merit or whether a defendant owed a duty to a plaintiff.” (California Bank & Trust v. Lawlor (2013) 222 Cal.App.4th 625, 630.) “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.” (Code Civ. Proc., § 437c, subd. (f)(1).)

“A motion for summary adjudication … shall proceed in all procedural respects as a motion for summary judgment.” (Code Civ. Proc., § 437c, subd. (f)(2).) A defendant seeking summary 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; see also Code Civ. Proc., § 437c, subd. (p)(2).) “ ‘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; see also Raghavan v. Boeing Co. (2005) 133 Cal.App.4th 1120, 1132; see also Intrieri v. Super. Ct. (2004) 117 Cal.App.4th 72, 82.)

For purposes of establishing their respective burdens, the parties involved in a motion for summary adjudication must present admissible evidence. (See Saporta v. Barbagelata (1963) 220 Cal.App.2d 463, 468.) The motion may not be granted by the court based on inferences reasonably deducible from the papers submitted, if such inferences are contradicted by other inferences which raise a triable issue of fact. (Hepp v. Lockheed-California Co. (1978) 86 Cal.App.3d 714, 717-718 (Hepp).) Additionally, in ruling on the motion, a court cannot weigh said evidence or deny summary adjudication on the ground that any particular evidence lacks credibility. (See Melorich Builders v. Super. Ct. (1984) 160 Cal.App.3d 931, 935; see also Lerner v. Super. Ct. (1977) 70 Cal.App.3d 656, 660.) As summary adjudication “is a drastic remedy eliminating trial,” the court must liberally construe evidence in support of the party opposing summary adjudication and resolve all doubts concerning the evidence in favor of that party. (See Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389; see also Hepp, supra, 86 Cal.App.3d at p. 717.)

III. Fourth Cause of Action

In the fourth cause of action for intentional interference with contractual relations, Plaintiffs allege that Vaillancourt “embarked on a plan to destroy or severely curtail the business income of [Paladin].” (5AC, ¶ 56.) As part of that plan, she interfered with the contractual relations between APTFrame and Appirio. (Ibid.) Vaillancourt interfered by: telling “one or more of her direct reports not to permit [APTFrame] to provide any additional contract workers for [NetApp] through its contract with Appirio”; making “false and defamatory statements to employees of Appirio alleging that [Paladin and APTFrame] had acted unethically, and told Appirio that it could no longer assist [APTFrame] in providing resources for [NetApp]”; and causing “the removal of [Bulusu] from his position as a [NetApp] resource, or refused to hire him, simply because of his contract with [APTFrame].” (Ibid.) Vaillancourt was allegedly “aware of a contractual relationship between [APTFrame] and Appirio whereby [APTFrame] provided resources for [NetApp] and others through Appirio.” (Id. at ¶ 58.) As a result of Vaillancourt’s alleged interference, APTFrame “has not been able to place any of its resources with [NetApp] or any other entity through Appirio since October 2012.” (Id. at ¶ 59.) Additionally, Paladin suffered lost wages, damage to his reputation, and severe emotional distress, and APTFrame suffered loss of income and profits. (Id. at ¶¶ 61-62.) Plaintiffs also allege that NetApp is liable for Vaillancourt’s conduct under the doctrine of respondeat superior. (Id. at ¶ 60.)

“The elements which a plaintiff must plead to state the cause of action for intentional interference with contractual relations are (1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 55; Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1148.) As is relevant here, “[c]ausation requires proof that the defendant’s conduct was a ‘substantial factor’ in bringing about the harm to the plaintiff.” (Williams v. Wraxall (1995) 33 Cal.App.4th 120, 132; Osborn v. Irwin Memorial Blood Bank (1992) 5 Cal.App.4th 234, 252-53 [California courts apply the “substantial factor” test in evaluating the element of causation in tort cases].)

NetApp Defendants argue that they are entitled to summary adjudication of the fourth cause of action because their alleged wrongful conduct was not a substantial factor in causing any breach or disruption of the contract between APTFrame and Appirio. NetApp Defendants contend that “to the extent there was any actual breach or disruption of the Appirio/[APTFrame] Contract[ ] it was the direct result of Paladin’s own ‘unreasonable’, ‘untrustworthy’, and simply annoying behavior in his dealings with one of [Appirio’s] key executives ….” (Mem. Ps. & As., pp. 1:28-2:3.) Specifically, NetApp Defendants assert that Paladin’s actions irritated Appirio’s senior vice president of corporate development and general counsel, Daniel Lascell (“Lascell”), such that Lascell decided to terminate Appirio’s relationship with APTFrame in June 2012. NetApp Defendants further contend that Lascell’s decision was independent of any statements made by Vaillancourt or NetApp.

In support of their argument, NetApp Defendants offer the declaration Lascell. (See Undisputed Material Fact (“UMF”) Nos. 1-8.) Lascell declares that he was employed by Appirio as senior vice president of corporate development and general counsel from 2010 to 2016. (Lascell Dec., ¶ 3.) He was responsible for the negotiation, approval, and execution of Appirio’s contracts with third parties, including Appirio’s contracts with APTFrame. (Ibid.) Lascell, Appirio’s CEO, and Appirio’s CFO were the only people authorized to sign contracts on behalf of Appirio with third party vendors like APTFrame. (Id. at ¶ 4.) Such contracts were usually signed only by Lascell or his designee. (Ibid.) Krupitzer and Rastovich did not have authority to sign contracts on behalf of Appirio with APTFrame. (Ibid.)

Based on his interactions with Paladin, Lascell “formed the opinion that he was unsophisticated, unreasonable, and untrustworthy.” (Lascell Dec., ¶ 8.) Lascell’s opinion of Paladin was based solely on his business dealings with Paladin and “was not based on any information provided to [him] by NetApp or any of its employees, including … Vaillancourt.” (Ibid.)

By June 2012, Lascell “determined that [he] did not want Appirio to have any further dealings with Paladin or his companies,” unless Appirio’s obligations to its customers meant that it had no other option than to do so. (Lascell Dec., ¶ 9.) “As a result, barring such circumstances, [he] was not willing to approve (or sign [a] SOW or contract for) Appirio’s use or placement of any APTFrame technical resources.” (Ibid.) “Toward that end, [Lascell] contacted … Krupitzer (who was then Appirio’s NetApp Client Partner, one of the employees primarily responsible for the NetApp customer relationship) on June 26, 2012, and asked him when [Appirio] could cut off all of [its] business dealings with Paladin and his companies.” (Ibid.) Lascell informed Krupitzer that “the termination of those dealings could not happen soon enough.” (Ibid.) Lascell declares that his desire to end all dealings between Appirio and APTFrame was based solely on his own business dealings with Paladin and not on any information provided to him by NetApp or any of its employees, including Vaillancourt. (Ibid.)

Lastly, Lascell declares that “Appirio did very little new business with APTFrame or Arcsona” following his communication to Krupitzer. (Lascell Dec., ¶ 10.)

NetApp Defendants also offer excerpts from the deposition testimony of Krupitzer in support of their argument. (See UMF Nos. 1, 3, 7-8.) Krupitzer testified that Lascell had control over the contract process at Appirio, would approve and sign statements of work, and signed all contracts and statements of work pertaining to the APTFrame-Appirio relationship. (Shuman Dec., Ex. C, pp. 24:7-25:4.) He further testified that at some point in time Appirio decided to stop using APTFrame resources, and he “started getting blocked on resources.” (Id. at p. 37:13-25.) Krupitzer stated that the policy of not using APTFrame resources started prior to the MENTOR and Bain projects, and he actually “snuck” APTFrame resources onto those projects “using one of the overrides from Barbin.” (Id. at pp. 37:13-39:20.) He testified that, with respect to NetApp, Lascell had told him “no more” because Lascell did not personally like Paladin. (Id. at pp. 37:24-38:25.) He tried to do an end run on Lascell’s instruction not to use APTFrame workers. (Id. at p. 39:22-25.) As a result, he would call Barbin and ask to use APTFrame workers, but Barbin told him to “work it through [Lascell]” and he was not successful. (Id. at p. 40:1-16.)

The foregoing evidence is arguably sufficient to meet NetApp Defendants’ initial burden to show that Plaintiffs cannot establish the element of causation. The evidence presented by NetApp Defendants demonstrates that Appirio generally stopped using APTFrame resources in June 2012, at Lascell’s direction. The evidence further shows that Lascell gave this direction due to his personal dislike of Paladin and not due to any information he received from NetApp or Vaillancourt.

However, “causation … is ordinarily a question of fact which cannot be resolved by summary judgment. The issue of causation may be decided as a question of law only if, under undisputed facts, there is no room for a reasonable difference of opinion.” (Kurinij v. Hanna & Morton (1997) 55 Cal.App.4th 853, 864.)

Here, the evidence presented by NetApp Defendants, as well as the evidence offered by Plaintiffs in opposition, creates a triable issue of material fact with respect to the issue of causation. As previously indicated, Krupitzer testified that notwithstanding Lascell’s instruction not to use APTFrame resources he still “snuck” APTFrame resources onto various projects by appealing directly to Appirio’s CEO, Barbin. (Shuman Dec., Ex. C, pp. 37:13-39:20.) In fact, Plaintiffs’ evidence indicates that Appirio continued to use APTFrame resources until Jones told Krupitzer in the fall of 2012, that Appirio could no longer contract with Paladin’s companies to supply workers to NetApp. Krupitzer testified that Lascell had an internal Appirio policy of not using APTFrame workers that he could always get around. (Kelly Dec., Ex. A, pp. 88:21-89:21.) Krupitzer further testified that he successfully placed about three APTFrame resources by going through the executive channel to get around Lascell’s policy. (Id. at pp. 89:4-91:6.) Lastly, Krupitzer testified that Jones told him not to work with Paladin’s companies in the fall of 2012 because of “the issues that were beginning to take place between [Vaillancourt] and [Paladin],” specifically that Paladin had been accused of trying to poach a resource from Nair. (Id. at p. 91:7-20.) This evidence creates a triable issue of material fact regarding whether NetApp Defendants’ alleged conduct (i.e., Vaillancourt’s alleged instruction to Jones to refrain from hiring APTFrame employees for NetApp projects and Jones statement to Krupitzer that Appirio could no longer contract with Paladin’s companies) was a substantial factor in the alleged breach or disruption of the contract between Appirio and APTFrame.

Accordingly, NetApp Defendants’ motion for summary adjudication is DENIED.