Case Number: BC499379 Hearing Date: May 02, 2014 Dept: 56

Case Name: Misraje, et al. v. Carolla, et al.
Case No.: BC499379
Matter: Motion for Summary Judgment/Adjudication
Moving Party: Defendants
Responding Party: Plaintiffs

Tentative Ruling: Motion is denied.

Plaintiffs Donny Misraje, Kathee Schenider-Misraje, and Sandy Ganz filed this action against Defendants Adam Carolla and Lotzi Digital Inc., alleging causes of action for (1) breach of partnership agreement; (2) breach of fiduciary duty; (3) dissolution of partnership; (4) constructive trust; (5) conversion; (6) accounting; (7) quantum meruit; (8) breach of employment contract; (9) common count for labor provided; (10) Labor Code violations; and (11) violation of BPC §17200. Defendants move for summary judgment or adjudication as to all causes of action in Plaintiffs’ complaint.

Objections –
Plaintiffs object to the declarations of Adam Carolla, Linda Thompson, and Erin E. Brady. All objections are overruled.

Employment Claims –
Defendants seek summary adjudication of Plaintiffs’ employment claims in the 7th, 9th, 10th and 11th COAs, on the ground that Misraje and Ganz have conceded in discovery responses that they are not employees. Defendants point to interrogatory answers which state that Misraje and Ganz “do not currently contend” that they were employees.

This ground only applies to the 10th COA, because only the Labor Code requires a strict employer-employee relationship, while the other claims can apply more generally to a working relationship. See Haggerty v. Warner (1953) 115 Cal.App.2d 468, 475 (quantum meruit and labor provided); Cel-Tech Communications v. Los Angeles Cellular Telephone (1999) 20 Cal.4th 163, 180 (unfair business practices). But even as to the 10th COA, there are triable issues.

Plaintiffs’ complaint is based on alternative theories that they were partners or employees. Defendants themselves contend that Misraje and Ganz were employees, so the question will be presented at trial. In light of the entire record, Plaintiffs’ discovery responses are equivocal admissions and do not constitute an abandonment of their employment claims. See Consumer Cause v. SmileCare (2001) 91 Cal.App.4th 454, 473.

There are triable issues, and summary adjudication is denied on this ground.

Partnership Claims –
Defendants seek summary adjudication of Plaintiffs’ partnership claims in the 1st, 2nd, 3rd, 4th, 5th, 6th, 8th and 11th COAs.

Under California law “the association of two or more persons to carry on as coowners a business for profit forms a partnership, whether or not the persons intend to form a partnership.” Corp.Code §16202(a). “The question of the existence of a partnership depends primarily upon the intention of the parties ascertained from the terms of the agreement and from the surrounding circumstances. Ordinarily the existence of a partnership is evidenced by the right of the respective parties to participate in the profits and losses and in the management of the business. In ascertaining the intention of the parties, where they have entered into a written agreement, such intention should be determined chiefly from the terms of the writing. While the question of whether a partnership exists is to be determined from the nature of the relation agreed upon rather than the name which the parties have given to it, some weight must be given to the language of the parties themselves. It is the intention as evidenced by the terms of the agreement, and not the subjective or undisclosed intention of the parties, that controls.” In re Marriage of Geraci (2006) 144 Cal.App.4th 1278, 1292-93.

Defendants submit that no partnership was entered into by the parties. They point to: the declarations of Carolla, Andrew Galker, and Linda Thomson, who deny that a partnership existed; evidence that Plaintiffs could not consistently state their ownership percentages of the partnership; the absence of a written partnership agreement; evidence that Plaintiffs were consistently told there was no partnership; and the formation of Lotzi Digital and its role in carrying on podcasts and related business operations.

Plaintiffs have presented evidence that Carolla often referred to his relationship with Misraje as a partnership (sometimes very specifically referring to its date of formation and the addition of Ganz as a partner); and that Plaintiffs shared in partnership profits, contributed to the partnership, and helped to manage the partnership.

This evidence raises triable issues of fact. There is no requirement that partnership ownership percentages or contributions be certain before a partnership can be determined to exist. See Holmes v. Lerner (1999) 74 Cal.App.4th 442, 453-58. And the formation of Lotzi is not determinative. Unlike Persson v. Smart Inventions (2005) 125 Cal.App.4th 1141, 1158, there is no evidence that the parties clearly terminated their partnership in place of a newly-formed corporation. See Downey v. Cavasso (1918) 36 Cal.App. 316, 318 (the evidence can support exceptions to the termination of partnership upon formation of a corporation).

There are triable issues, and summary adjudication is denied on this ground.

Statute of Limitations –
Defendants also seek summary adjudication of Plaintiffs’ partnership claims, on the ground that they are barred by the two-year statute of limitations for oral contracts under CCP §339(1). Defendants argue that they have denied the existence of a partnership since March 2010 and this action was not filed until January 2013.

Among other things, Plaintiffs have presented evidence that as late as September 2011 Carolla stated that “steps must be taken to dismantle this partnership.” This raises triable issues of fact as to whether the partnership had been clearly and unequivocally repudiated before Carolla’s statement. See April Enterprises v. KTTV (1983) 147 Cal.App.3d 805, 824 n.10.

Ruling –
The motion for summary judgment/adjudication is denied.