CIV537691 AMBER LAUREL BAPTISTE VS. MICHAEL LEWIS GOGUEN

AMBER LAUREL BAPTISTE MICHAEL LEWIS GOGUEN
WILLIAM M. PAOLI DIANE M. DOOLITTLE

MOTION FOR SUMMARY ADJUDICATION BY AMBER BAPTISTE TENTATIVE RULING:

Plaintiff/Cross-Defendant Amber Baptiste’s Motion for Summary Adjudication is DENIED for the reasons set forth below.
As to the First Cause of Action for “Extortion” in Goguen’s Second Amended Cross-Complaint (SACC), the motion is DENIED.

Baptiste has not demonstrated that the two-year limitations period set forth in Code Civ. Proc. §335.1, which applies to personal injury and wrongful death claims, applies to Goguen’s extortion claim in which he seeks the return of money allegedly taken from him by wrongful means (via fraud/extortion). The extortion claim alleges Goguen paid Baptiste $10 million under duress, that is, under threat that Baptiste would publicize a variety of sordid and knowingly false allegations about him to his family, clients, colleagues, employer and others. As such, the claim more appropriately falls within Code Civ. Proc. §338’s three-year limitations period, which governs actions seeking the return of wrongfully taken money/property. See §338(c) (actions to recover wrongfully taken personal property); §338(d) (actions to recover property taken through fraud or mistake). See Pen. Code §518 (extortion involves the taking of money/property by wrongful means); Leeper v. Beltrami (1959) 53 Cal.2d 195, 203-204 (the taking of money through wrongful threat of civil or criminal prosecution, which constitutes duress). The Court disagrees that claims for “abuse of process” and/or emotional distress (which Goguen is not seeking here) are analogous for purposes of ascertaining the statute of limitations.

Further, Goguen’s claim would be timely even under a two-year limitations period because he filed his extortion claim in March 2016, less than two years after both the May 2014 Settlement Agreement and his June 2014 payment of the $10 million. Goguen’s claim is not based on, and does not seek return of, the $200,000.00 sum apparently paid prior to March 2014. Moreover, if a two-year limitations period applied, pre-March 2014 events would be admissible under the continuing violation (“continuing wrong”) doctrine, given that the alleged Jan./Feb. 2014 events are sufficiently linked to the subsequent extortion-related conduct that culminated in the May 2014 Settlement Agreement. Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1197; Richards v. CH2M Hill, Inc. (2001) 26 Cal.4th 798, 812.

Without prejudice to the parties’ rights to file any pre-trial in-limine motions they deem appropriate, the Court declines Baptiste’s request to issue a preliminary ruling excluding certain evidence from trial. Baptiste argues certain events/conduct that pre-date March 2014 do not (in themselves) constitute extortion as a matter of law and, thus, the Court should preclude Goguen from offering at trial any argument or evidence regarding such events. Requests for pre-trial evidentiary rulings should be addressed to the trial judge. The Court also disagrees that each alleged extortion-related action by Baptiste and/or her counsel prior to March 2014 constitutes a discrete/severable “cause of action” suitable for summary adjudication. Code Civ. Proc. §437c(f)(1) (“A motion for summary adjudication shall be granted only if it completely disposes of a cause of action …”); RUMF Nos. 2, 4-12, 14-16 and 18-27.
As to the SACC’s Second Cause of Action for “fraudulent inducement,” the motion is DENIED.

Baptiste argues Goguen’s fraud claim fails as a matter of law because he testified to signing the 2014 Settlement Agreement due to “extortion” without mentioning fraud. She also argues Goguen cannot demonstrate he detrimentally relied on any fraud. These arguments lack merit.

First, the extortion and fraud claims are inter-related; they are not alleged to be, nor is there evidence, that they are entirely separate factors that led to Goguen signing the 2014 Agreement. The evidence does not reasonably support Baptiste’s contention that Goguen ever claimed to have signed the Agreement due to extortion only, to the exclusion of fraud. Instead, the allegations and evidence indicate Baptiste’s alleged fraud was part of, and facilitated, the alleged extorted Settlement Agreement. See SACC, Par. 28 (alleging Baptiste threatened to go public with allegations that Goguen had intentionally infected her with an STD unless Goguen agreed to pay the money); RUMF Nos. 7 and 13; Doolittle Decl., Ex. A, ¶¶39-40 and 51; Ex. B (Goguen Tr. at 400, 536, 623-4 and 628) (evidence indicating Goguen was unaware that Baptiste’s representations about the HPV virus and her sexual background were false until after the lawsuit commenced). In her UMF 13, Baptiste appears to acknowledge Goguen’s “primary motivation” in agreeing to the settlement was Baptiste’s early-2014 draft Complaint, which was filled with alleged false representations about the HPV infection and Baptiste’s sexual history. See 2014 draft Complaint at ¶¶9-29 (alleging Baptiste did not date or engage in sexual relations with any other person during her relationship with Goguen and that Goguen transmitted HPV to Baptiste). The alleged fraud claim is related to, and part of, the extortion claim.

Further, Goguen is not required to demonstrate that Baptiste’s fraud, as distinct from any extortion that did not also involve fraud, was the only reason Goguen agreed to the 2014 Settlement. CACI 1907 (Plaintiff must show that the misrepresentation(s) “substantially influenced” Plaintiff’s action(s), even if not the only reason for Plaintiff’s response … “It is not necessary for a [misrepresentation] to be the only reason for [plaintiff’s] conduct”); CACI 1900 (reliance on the representation must have been a “substantial factor” in causing the harm); Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 976−977 (“It is not . . . necessary that [a plaintiff’s] reliance upon the truth of the fraudulent misrepresentation be the sole or even the predominant or decisive factor in influencing his conduct …. It is enough that the representation has played a substantial part, and so has been a substantial factor, in influencing his decision … [A] presumption, or at least an inference, of reliance arises wherever there is a showing that a misrepresentation was material. A misrepresentation is judged to be ‘material’ if ‘a reasonable man would attach importance to its existence or nonexistence in determining his choice of action in the transaction in question’ and as such, materiality is generally a question of fact”); Sangster v. Paetkaa (1998) 68 Cal.App.4th 151, 170 (same); Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1061, 1067 (whether the Defendant had fraudulent intent and whether Plaintiff’s reliance was reasonable are both questions of fact).

At a minimum, the evidence creates a triable issue as to whether Baptiste’s alleged fraud (as distinguished from any non-fraud-related extortion) substantially influenced Goguen’s decision to sign the 2014 Settlement. See RUMF No. 13; Doolittle Decl., Ex. A, p. 12, ¶51; Ex. B (Goguen Tr. at 43-44, 202, 400, 518 and 536) (evidence that Goguen agreed to the settlement as a result of both the alleged extortion and fraud because Goguen purportedly relied on Baptiste’s false statements regarding HPV); Engalla v. Permanente Medical Group, Inc., supra, 15 Cal.4th at 977; CACI 1908 (an inference of reliance arises wherever a misrepresentation was material, which is shown where “a reasonable person would find it important in determining his or her choice of action.”). The Court cannot resolve these factual issues as a matter of law.

As to the SACC’s claim for “Rescission” and Goguen’s 10th and 11th Affirmative Defenses (in his Second Amended Answer) asserting mutual and unilateral “mistake,” the motion is DENIED.
Baptiste argues that “rescinding” a contract or voiding a contract due to unilateral or mutual “mistake” is not possible unless the parties can be returned to the “status quo,” which Baptiste argues cannot be accomplished here because when she signed the May 2014 Agreement, she had valid causes of action (including battery) against him based on an alleged rape and transmission of an STD. She argues those previously-existing claims cannot be revived because the statute of limitations has now expired. She contends that because the status quo cannot be returned, the Court should grant summary adjudication of Goguen’s rescission claim and his affirmative defenses of unilateral and mutual mistake. This argument lacks merit for multiple reasons.
First, the argument is premised on the false assertion that a “rescission” remedy requires that the Court revive the “status quo” such that both parties are placed in the exact situation they were in at the time of contract. Rescission is an equitable remedy that allows the Court some flexibility in its application, even where the parties cannot be returned to the exact situation they were in at the time of contract. See Runyan v. Pacific Air Industries, Inc. (1970) 2 Cal.3d 304, 316 (rescission is intended to restore the parties as nearly as possible to their former positions and “to bring about substantial justice by adjusting the equities between the parties despite the fact that the status quo cannot be exactly reproduced.”). And as discussed in the cases cited in Goguen’s Opposition (at pp. 17-18), this equitable doctrine focuses more on the plaintiff/aggrieved party (here, Goguen, as alleged in his SACC) being returned to the status quo than on the alleged wrongdoer (as alleged, Baptiste) being returned to the status quo. Id. Thus, even assuming arguendo Baptiste previously had a viable legal claim of economic value against Goguen that has since become time-barred, that fact alone would not necessarily preclude the requested rescission remedy.

Second, assuming arguendo Baptiste had a valid claim against Goguen in May 2014, Baptiste has not established that the status quo could not be adequately restored. She argues her claim(s) are now time-barred, but as the Opposition notes (pp. 18-19), the Court may rescind a contract subject to conditions necessary to attain equity/fairness, which in this case could theoretically include, for example, a ruling that any statute of limitations applicable to Baptiste’s claims were equitably tolled during the period she believed her claims had been settled. See Industrial Indem. Co. v. Industrial Acc. Commission (1953) 115 Cal.App.2d 684, 690 (acts which “induce a party to believe an amicable adjustment of his claim will be made may create an estoppel against pleading the statute”); RUMF No. 28. It is unclear here the “status quo” could not be adequately restored.

Further, and perhaps most importantly, Baptiste’s argument hinges on a showing that she in fact had a meritorious claim(s) against Goguen when she signed the May 2014 Agreement, which thereafter expired due to the statute of limitations. RUMF No. 3. The evidence/undisputed facts here, however, are far from conclusive on this point and create a triable issue of fact. The record is replete with evidence undermining the merits of the claims asserted in Baptiste’s draft 2014 Complaint and which suggest Baptiste’s Complaint was meritless and/or time-barred. See RUMF Nos. 1-3 and 28; Doolittle Decl., Ex. A at ¶¶7, 15 and 51 (evidence indicating Goguen never transferred the HPV virus to Baptiste, never raped her and suggesting their sexual relationship was 100% consensual); Code Civ. Proc., §335.1 (two-year statute of limitations for battery). Whether Baptiste had any valid legal claim(s) of economic value against Goguen at the time of the May 23, 2014 Agreement is a disputed factual issue not amenable to summary adjudication.

Goguen’s Objections to the Khosla Declaration are OVERRULED.

If the tentative ruling is uncontested, it shall become the order of the Court. Thereafter, counsel for Defendant shall prepare a written order consistent with the Court’s ruling for the Court’s signature, pursuant to California Rules of Court, Rule 3.1312, and provide written notice of the ruling to all parties who have appeared in the action, as required by law and the California Rules of Court.