Case Name: Park v. Lunardi, et al.

Case No.: 17CV315411

This is an action for breach of contract. According to the allegations of the second amended complaint (“SAC”), since approximately 2008, plaintiff John Park (“Plaintiff” or “Park”), has owned and operated various gambling establishments or “cardrooms” in California. (See SAC, ¶ 19.) Garden City, Inc. dba Casino M8trix (“Garden City”) is a cardroom in San Jose. (See SAC, ¶¶ 1, 20.) Prior to June 9, 2017, defendant Eric Swallow (“Swallow”) owned a 50 % share in Garden City and defendants Peter Lunardi (“Peter”) and Jeanine Lunardi (“Jeanine”) (collectively, “the Lunardis”) owned the other 50%. (See SAC, ¶¶ 1, 20.) In 2014, the Bureau of Gambling Control (“Bureau”) began prosecuting an accusation against Garden City, Swallow and the Lunardis. (See SAC, ¶ 21.) The Bureau entered into stipulated settlement with Garden City and the Lunardis; however, it did not settle the accusation with Swallow. (Id.) Ultimately, the California Gambling Control Commission (“Commission”) revoked Swallow’s license to own Garden City, thereby requiring him to sell his shares in Garden City. (Id.)

In early 2015, Swallow and Park negotiated a sale of Swallow’s shares to Park for $55 million. (See SAC, ¶ 22.) Subsequently, in March 2015, the Lunardis sent their own offer to purchase Swallow’s share in Garden City for $29 million, an offer that Park refused. (See SAC, ¶ 23.) Thereafter, the Lunardis also attempted to exercise a purported right of first refusal pursuant to a separate July 17, 2008 buy-sell agreement that they had entered into with Swallow, which the Lunardis contended allowed them to match any offer to purchase Swallow’s shares. (See SAC, ¶¶ 3, 25.) However, the Lunardis’ attempt to exercise the purported right of first refusal and purchase was void because it was not approved by the Commission, and the Lunardis’ offer also failed to match the $55 million offer and did not specifically exclude Swallow’s retained distributions from the purchase price. (See SAC, ¶¶ 4, 27-32.) Swallow and the Lunardis then became parties to arbitration proceedings arising from the Lunardis’ attempt to exercise the purported right of first refusal, and Park attempted to intervene. (See SAC, ¶¶ 6, 32-33, 36.) In February 2017, after Park’s attempts to intervene in the arbitration proceedings were denied, Park brought this action for declaratory relief against Swallow and the Lunardis. (See SAC, ¶¶ 7, 37.) While this action was pending, the arbitrator determined that the Lunardis had the right to purchase Swallow’s shares pursuant to the Buy-Sell Agreement, but did not consider whether Park had the right to purchase Swallow’s shares, and is thus not bound by the decision. (See SAC, ¶¶ 8, 38.) Following the arbitrator’s decision, Swallow and the Lunardis entered into a new stock purchase agreement, under which Swallow agreed to sell his shares in Garden City to the Lunardis, and, on June 9, 2017, Swallow transferred his shares to the Lunardis. (See SAC, ¶¶ 9, 39-40.) On December 6, 2017, Park filed the SAC against Swallow and the Lunardis individually and as trustees of the Lunardi Family Living Trust (“Trust”), asserting causes of action for breach of contract (against Swallow), promissory estoppel (against Swallow) and intentional interference with contractual relations (against the Lunardis). On April 8, 2019, Peter died, leaving Jeanine as the sole trustee of the Trust. Jeanine was also appointed as Peter’s personal representative.

On November 4, 2019, the Lunardis filed a second amended cross-complaint (“SAXC”) against Park and Swallow, asserting causes of action for declaratory relief and intentional interference with contract.

Park moves for summary judgment of the Lunardis’ cross-complaint and for summary adjudication of the Lunardis’ twelfth and fourteenth affirmative defenses.

The Lunardis move for summary judgment on the SAC.

Defendants’ burden on summary judgment

“A defendant seeking summary judgment 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; emphasis added.)

“The ‘tried and true’ way for defendants to meet their burden of proof on summary judgment motions is to present affirmative evidence (declarations, etc.) negating, as a matter of law, an essential element of plaintiff’s claim.” (Weil et al., Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2007) ¶ 10:241, p.10-91, citing Guz v. Bechtel National Inc. (2000) 24 Cal.4th 317, 334; emphasis original.) “The moving party’s declarations and evidence will be strictly construed in determining whether they negate (disprove) an essential element of plaintiff’s claim ‘in order to avoid unjustly depriving the plaintiff of a trial.’” (Id. at § 10:241.20, p.10-91, citing Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1107.)

“Another way for a defendant to obtain summary judgment is to ‘show’ that an essential element of plaintiff’s claim cannot be established. Defendant does so by presenting evidence that plaintiff ‘does not possess and cannot reasonably obtain, needed evidence’ (because plaintiff must be allowed a reasonable opportunity to oppose the motion.) Such evidence usually consists of admissions by plaintiff following extensive discovery to the effect that he or she has discovered nothing to support an essential element of the cause of action.” (Id. at ¶ 10:242, p.10-92, citing Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854-855.)

I. LUNARDIS’ MOTION FOR SUMMARY JUDGMENT
II.

The sole cause of action alleged against the Lunardis by the SAC is for intentional interference with contract. “The elements of a cause of action for intentional interference with contractual relations are ‘(1) the existence of a valid contract between the plaintiff and a third party; (2) the defendant’s knowledge of that contract; (3) the 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.’” (Redfearn v. Trader Joe’s Co. (2018) 20 Cal.App.5th 989, 997, quoting Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1148.) The Lunardis argue that: there is no valid contract between Plaintiff and Swallow because the contract expressly states that the non-exercise of the Lunardis’ right of first refusal was a condition precedent for that contract, or, if it is construed as a condition subsequent, the amended agreement was extinguished by the Lunardis’ exercise of that right of first refusal; there was no breach of any contractual relationship because the Lunardis’ exercise of the right of first refusal excused Swallow from performance; the arbitration award is binding on Plaintiff even though he was not a party, and thus the intentional interference with contractual relations cause of action is barred; the Lunardis are not strangers to the amended agreement between Swallow and Park and thus, a tortious interference cause of action is barred; and, if Park has standing to relitigate the second arbitration award, the undisputed facts defeat his claim.

The Court did not consider the evidence filed in reply.

The Lunardis submitted evidence in connection with their reply brief. The Court did not consider this evidence. (See Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537-38; see also Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 252 (stating that evidence submitted with a reply is not generally allowed); see also San Diego Watercrafts, Inc. v. Wells Fargo Bank, N.A. (2002) 102 Cal.App.4th 308, 316 (stating that considering evidence in connection with a reply violated the opposing parties due process rights because the opposing party was “not informed what issues it was to meet in order to oppose the motion”).)

The arbitration award does not have collateral estoppel effect against Plaintiff

The Lunardis argue that Plaintiff is bound by the arbitration decision because res judicata is “conclusively determined as against the parties thereto or their privies in a subsequent lawsuit on a different cause of action” and Plaintiff is in privity with Swallow as to the arbitration. (See Lunardis’ memorandum of points and authorities in support of Lunardis’ motion for summary judgment (“Lunardis’ memo”), pp.18:11-27, 19:1-27, 20:1-2.) The Lunardis quote Vandenberg v. Super. Ct. (Centennial Ins. Co.) (1999) 21 Cal.4th 815, to support their position. However, the California Supreme Court specifically stated that “a particular danger of injustice arises when collateral estoppel is invoked by a nonparty to the prior litigation.” (Id. at p.829.) In fact, the Vandenberg court explicitly concluded that the collateral estoppel doctrine does not apply as to an arbitration award on a nonparty to that arbitration: “while the informal and imprecise nature of private arbitration, and its insulation from judicial interference, are ‘the very advantages the … parties [seek] to achieve’ in arbitrating their own claims[citation], these same features can be serious, unexpected disadvantages if issues decided by the arbitrator are given leveraged effect in favor of strangers to the arbitration…. the public policy reasons against applying the collateral estoppel doctrine [citation] well outweigh those in favor of doing so…. Accordingly, we are compelled to conclude that a private arbitration award, even if judicially confirmed, can have no collateral estoppel effect in favor of third persons unless the arbitral parties agreed, in the particular case, that such a consequence should apply.” (Id. at pp.832-834.) When considering that Plaintiff was precluded from the arbitration, it is clear that this argument lacks merit. Summary judgment may not be granted in favor of the Lunardis on this basis.

The Lunardis fail to demonstrate that they are not strangers to the agreement between Plaintiff and Swallow

Citing Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, the Lunardis also argue that they are not strangers to the amended agreement between Plaintiff and Swallow, and thus cannot be liable for tortious interference with contractual relations. In Applied Equipment Corp., supra, the California Supreme Court stated that:

California recognizes a cause of action against noncontracting parties who interfere with the performance of a contract. “It has long been held that a stranger to a contract may be liable in tort for intentionally interfering with the performance of the contract.” [Citation.]

However, consistent with its underlying policy of protecting the expectations of contracting parties against frustration by outsiders who have no legitimate social or economic interest in the contractual relationship, the tort cause of action for interference with a contract does not lie against a party to the contract.

(Id. at pp.513-514.)

Here, the Lunardis are not parties to the agreement between Plaintiff and Swallow. Nevertheless, the Lunardis argue that “given the RoFR is an express condition to the enforceability of the Amended Park Agreement, to denote the Lunardis as strangers is contrary to logic and applicable law.” (Lunardis’ memo, p.22:2-4.) In support of their argument, the Lunardis cite to a federal case, Fresno Motors, LLC v. Mercedes Benz USA, LLC (9th Cir. 2014) 771 F.3d 1119; however, the Ninth Circuit explicitly stated that “[t]his court need not reach the issue… [of whether] Applied Equip. [was limited] to its specific holding that only parties to a contract are immune from claims of intentional interference with existing contractual relations.” (Id. at p.1127.) Indeed, Fresno Motors states that recent cases have limited “strangers” to non-parties. (Id. at pp.1126-1127, citing Woods v. Fox Broadcasting Sub., Inc. (2005) 129 Cal.App.4th 344, 353 (stating that “Applied Equipment did use the term ‘stranger to a contract,’ it did so interchangeably with the terms ‘noncontracting parties’ and ‘third parties’… we find it highly unlikely that Applied Equipment intended to hold, or should be construed as holding, that persons or entities with an ownership interest in a corporation are automatically immune from liability for interfering with their corporation’s contractual obligations”); see also Powerhouse Motorsports Group, Inc. v. Yamaha Motor Corp., U.S.A. (2013) 221 Cal. App.4th 867, 884 (stating that “[n]o published California case has disagreed with Woods or expanded the scope of Applied Equipment”).) The Lunardis fail to demonstrate that they are not strangers to the agreement between Plaintiff and Swallow.

A tortious interference with contract cause of action is separate from a breach of contract cause of action.

The Lunardis argue that “Mr. Park is attempting to invalidate or abrogate the Lunardis’ contractual rights in a collateral attack. It is well established that only parties, third party beneficiaries and assignees have standing to bring actions on a contract.” (Lunardis’ memo, p.17:17-23; id. at p.15:15-21 (stating that “Mr. Park has no standing to attack that contract as a non-party”).) However, this argument ignores that a tortious interference cause of action is a separate cause of action from a breach of contract cause of action.

As for the remainder of the arguments, there are triable issues of material fact.

The remainder of the arguments hinge on the propriety of the exercise of the right of first refusal. There are a number of reasons why the arbitrators made the conclusions that were made, but, despite the volumes of evidence submitted by the Lunardis, many of these reasons are not advanced by the Lunardis and the supporting facts are neither detailed in the separate statement nor explained in the supporting memorandum. As stated in the Lunardis’ opposition (see the Lunardis’ opposition to Pl.’s motion for summary judgment, p.19:20-25, citing North Coast Business Park v. Nielsen Construction Co. (1993) 17 Cal.App.4th 22, 30), “when the ‘fact’ is not mentioned in the separate statement, it is irrelevant that such fact might be buried in the mound of paperwork filed with the court, because the statutory purposes are not furthered by unhighlighted facts.” (North Coast Business Park, supra, 17 Cal.App.4th at pp. 30-31 (also stating that “[w]e construe the statutory mandate for a separate statement as requiring a party to specify within that document any facts he deems to be disputed facts material to the issue presented… ‘if it is not set forth in the separate statement, it does not exist’”).) Regardless, even if the Lunardis submitted that evidence and elaborated its argument by providing proper citation to that evidence, there are triable issues of material fact as to whether such exercise was proper, as it is unclear whether the Lunardis’ exercise of their right of first refusal was timely or proper. (See evidence cited by Pl.’s separate statement of undisputed material facts, nos. 4-6, 10, 13, 18-21, 22-33, 37-47, additional material facts (“ADFs”) nos. 1-25.) The Lunardis’ motion for summary judgment is DENIED.

The Lunardis’ objections to Plaintiff’s evidence in opposition to the Lunardis’ motion are OVERRULED.

The Court did not rely on Plaintiffs’ objections for its ruling.

PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT AND/OR SUMMARY ADJUDICATION

Plaintiff moves for summary judgment of the second amended cross-complaint (“SAXC”), or, in the alternative, for summary adjudication of each cause of action of the SAXC, and for summary adjudication of the twelfth and fourteenth affirmative defenses.

The separate statement substantially complies with Rule of Court 3.1350, subdivision (b).

In opposition, the Lunardis first argue that the alternative motion for summary adjudication must be denied because the notice of motion and separate statement do not match because the notice lists four issues for summary adjudication which are not restated verbatim in the separate statement, as required by Rule of Court 3.1350, subdivision (b). Subdivision (b) states:

If made in the alternative, a motion for summary adjudication may make reference to and depend on the same evidence submitted in support of the summary judgment motion. If summary adjudication is sought, whether separately or as an alternative to the motion for summary judgment, the specific cause of action, affirmative defense, claims for damages, or issues of duty must be stated specifically in the notice of motion and be repeated, verbatim, in the separate statement of undisputed material facts.

(Rule of Court 3.1350, subd. (b).)

Here, although the notice of motion states that “Park’s alternative request for summary adjudication is made as to the following two issues” (Pl.’s notice of motion, p.1:13-14, 2:3-5), it also states that “Park moves for summary adjudication on the Lunardis’ first cause of action for declaratory relief and second cause of action for intentional interference. In addition, Park moves for summary adjudication on the Lunardis’ twelfth affirmative defense and fourteenth affirmative defense.” (Pl.’s notice of motion, p.1:6-9.) Here, it is clear that Plaintiff moves for summary adjudication as to specific causes of action and affirmative defenses rather than issues of duty. The separate statement also reflects that it seeks summary adjudication of these causes of action and affirmative defenses. Plaintiff’s notice of motion and separate statement substantially comply with Rule of Court 3.1350, subdivision (b).

First cause of action of the SAXC for declaratory relief

The first cause of action of the SAXC alleges that “The Lunardis pray for a declaratory judgment that Mr. Park is bound by the 2016 Award and judgment thereon and that Mr. Park is bound by the 2017 Award and judgment thereon.” (SAXC, ¶ 29.) Here, the facts are primarily undisputed (see Lunardis’ separate statement in opposition to Pl.’s motion, undisputed material facts nos. 1-10), and the arguments are largely identical. (See Pl.’s memorandum of points and authorities in support of motion for summary judgment or adjudication, pp.10:21-28, 11:1-28, 12:1-28, 13:1-28, 14:1-6; see also Lunardis’ opposition to Pl.’s motion for summary judgment or adjudication, pp.11:23-26, 12:1-26, 13:1-27, 14:1-22, 15:1-23, 16:1-25, 17:1-24, 18:1-22, 19:1-18.) The Lunardis argue that because Judge Herlihy ruled in the arbitration that “Park will be adequately represented by Swallow,” Plaintiff is thus bound by the arbitration award through the application of collateral estoppel. For reasons already stated, the Lunardis are incorrect. (See Vandenberg v. Super. Ct. (Centennial Ins. Co.) (1999) 21 Cal.4th 815, 822-834.) Additionally, an arbitration award cannot have collateral estoppel effect on a nonparty to the arbitration because of a ruling made in that arbitration award; the Lunardis fail to demonstrate a triable issue of material fact as to privity.

Second cause of action of the SAXC for intentional interference with contractual relations

“On summary judgment motions, the pleadings always define the issues.” (Hejmadi v. Amfac, Inc. (1988) 202 Cal.App.3d 525, 536; see also Nieto v. Blue Shield of Cal. Life & Health Ins. Co. (2010) 181 Cal.App.4th 60, 74 (stating that “the pleadings determine the scope of relevant issues on a summary judgment motion”).) The second cause of action of the SAXC is for intentional interference with contractual relations and appears to be premised on: the first notice of the agreement was drafted by Park’s counsel and failed to disclose Park’s identity (see SAXC, ¶ 13); Park’s disruption of mediation through Park’s counsel’s attendance although they were not invited and there was no contractual agreement to mediate with Park (see SAXC, ¶ 14); Park’s statement at the mediation that he would sue Swallow if he sold his shares to the Lunardis (see SAXC, ¶ 14); Park’s filing of a motion to intervene in the first arbitration (see SAXC, ¶ 15); Park showing up to a second mediation session (see SAXC, ¶ 22); Park’s filing of a second motion to intervene in the second arbitration (see SAXC, ¶ 23); and, Park’s commencement of the instant action (see SAXC, ¶ 25).

Plaintiff argues that: the contract with which Park is alleged to have interfered was not legally valid; any evidence that Park intimidated Swallow at the mediation, disrupted the mediation, or filed motions at the arbitration are subject to mediation and litigation privileges; the Lunardis cannot show a causal connection between Park’s conduct at the mediation and Swallow’s decision not to settle; and, the Lunardis cannot show a causal connection between the authorship of the April 2015 notices and Swallow’s initiation of the arbitrations.

As previously stated in the Lunardis’ motion, there is a triable issue as to the validity of the Lunardis’ exercise of the right of first refusal; thus, summary adjudication of the second cause of action of the SAXC will not be granted on this basis.

However, as Plaintiff argues, the mediation privilege applies to “not only parties but also the mediator and other nonparties attending the mediation.” (Eisendrath v. Super. Ct. (Rogers) (2003) 109 Cal.App.4th 351, 359; see also Travelers Casualty & Surety Co. v. Super. Ct. (Plaintiffs and Defendants in the Clergy Cases I) (2005) 126 Cal.App.4th 1131, 1146, fn.18 (stating that the mediation privilege applies to “not only parties but also … nonparties attending the mediation”); see also Simmons v. Ghaderi (2008) 44 Cal.4th 570, 580-587 (concluding that there is no implied waiver of the mediation privilege, as waiver can occur “only upon [express] agreement of all participants, including not only parties but also the mediator and other nonparties attending the mediation”; also stating that “the Legislature intended to apply confidentiality broadly and to limit any exceptions to confidentiality to narrowly prescribed statutory exemptions”); see also Cassel v. Super. Ct. (Wasserman, Comden, Casselman & Pearson, L.L.P.) (2011) 51 Cal.4th 113, 131 (stating that waiver of the mediation privilege can occur “only upon agreement of all participants, including not only parties but also the mediator and other nonparties attending the mediation” (emphasis original); also stating that “no reason appears why other persons attending and assisting in the mediation on behalf of the disputants, such as their counsel, are not themselves distinct ‘participants’ who must agree to the disclosure of confidential mediation-related communications they made or received”).) Here, the alleged wrongful conduct by Park that is the subject of the interference cause of action are made by nonparty Park who is alleged to have attended the mediation. (See SAC, ¶ 14 (alleging that “the mediation was a failure since it was attended by Mr. Park’s counsel and his associate, Mr. Vasey”).)

In opposition, the Lunardis apparently concede that Park or his proxies attended the mediation. (See Lunardis’ opposition to Pl.’s motion, p.24:3-10 (arguing that “Mr. Park does not dispute that he attended or sent his proxies, nor does he claim the Lunardis agreed to mediate with him… Mr. Park’s unauthorized attendance at the mediation is akin to the reportable failure to attend mediation, which is not subject to the mediation privilege”), citing Campagnone v. Enjoyable Pools & Spas Service & Repairs, Inc. (2008) 163 Cal.App.4th 566, 572.)

However, whether characterized as authorized or unauthorized, as stated above, the mediation privilege extends to nonparties who attend the mediation. Campagnone, supra, cited by the Lunardis neither contradicts that nor stands for the proposition stated in its opposition; rather, the Campagnone court concluded that “the unauthorized failure of a party, the party’s attorney, or a representative of the party’s insurance carrier, to attend a court-ordered appellate mediation necessarily constitutes conduct that is an unreasonable violation of local rule 1(d)(9), warranting imposition of sanctions (local rule 1(g)).” (Id. at p.572.) The cited page by the Lunardis does not concern the mediation privilege whatsoever. The Lunardis also argue, without citation to any authority, that “[s]ince there was no agreement to mediate [between the Lunardis and Park], there could be no agreement to confidentiality.” (Id. at p.24:6-7.) However, Evidence Code section 1119 states that “[n]o evidence of anything said or any admission made for the purpose of, in the course of, or pursuant to, a mediation or a mediation consultation is admissible….” (Evid. Code § 1119, subd. (a).) Section 1119 does not require an agreement between a party to the mediation and a nonparty, and the Lunardis do not cite to any case to the contrary. Rather, the alleged conduct, made by an alleged nonparty attending a mediation, in the course of that mediation fall within the scope of the mediation privilege. Likewise, the filing of motions to intervene cannot form a basis for a cause of action as they are covered by the litigation privilege. (See Flatley v. Mauro (2006) 39 Cal.4th 299, 325 (stating that “[t]he privileges of Civil Code section 47… operate as limitations upon liability”); see also Healy v. Tuscany Hills Landscape & Recreation Corp. (2006) 137 Cal.App.4th 1, 5 (stating that “a communication is absolutely immune from any tort liability if it has ‘some relation’ to judicial proceedings”); see also Komarova v. National Credit Acceptance, Inc. (2009) 175 Cal.App.4th 324, 341-343 (concluding that cause of action for intentional infliction of emotional distress was barred by litigation privilege, stating that the argument “that the litigation privilege is inapplicable because she was never made a party to the arbitration proceeding… is untenable… [a]n exception to the litigation privilege for all suits brought by parties who were not involved in the underlying litigation would be antithetical to the privilege’s purpose”).) The Lunardis do not address the litigation privilege in their opposition. Here, it is clear that the alleged conduct by Park is within the scope of the mediation and/or litigation privileges and, in opposition, the Lunardis fail to demonstrate a triable issue of material fact as to such application of the privileges. It is unnecessary to address Plaintiff’s causation arguments.

As Park has met his burden to demonstrate that the causes of action against him lack merit, and, in opposition, the Lunardis fail to demonstrate the existence of a triable issue of material fact, the motion for summary judgment as to the SAXC is GRANTED.

Park’s objections to the Lunardis’ evidence in opposition are not the basis for the Court’s order.

Twelfth affirmative defense to the SAC

The Lunardis’ twelfth affirmative defense states that “[a]s a twelfth, separate and affirmative defense, Defendants assert that Park lacks standing to assert the claims alleged in the Complaint pursuant to Applied Equip. Corp. v. Litton Saudi Arabia Ltd., 7 Cal. 4th 503, 514.” As discussed in the Lunardis’ motion for summary judgment, Applied Equip. Corp. stated:

California recognizes a cause of action against noncontracting parties who interfere with the performance of a contract. “It has long been held that a stranger to a contract may be liable in tort for intentionally interfering with the performance of the contract.” (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126.)

However, consistent with its underlying policy of protecting the expectations of contracting parties against frustration by outsiders who have no legitimate social or economic interest in the contractual relationship, the tort cause of action for interference with a contract does not lie against a party to the contract. [Citations.]

(Applied Equipment Corp., supra, 7 Cal.4th at pp.513-514.)

As discussed above, the Lunardis are not parties to the agreement between Plaintiff and Swallow. In opposition, the Lunardis argue that “the contracts between Park and Swallow could not be performed without the Lunardis’ waiver of their RoFR rights and that removes them from the category of ‘strangers.’” (Lunardis’ opposition to Pl.’s motion for summary judgment or adjudication, pp.24:24-26, 25:1-21.) However, cases—including those from the Sixth District—have “conclude[d] that the ‘stranger to a contract language [citation]—which immediately follows the high court’s statement that noncontracting parties may be held liable for interference with a contract—is used as a synonym for ‘noncontracting party.’” (Popescu v. Apple Inc. (2016) 1 Cal.App.5th 39, 53; see also Woods, supra, 129 Cal.App.4th 344, 353 (stating that “[w]hen Applied Equipment did use the term ‘stranger to a contract,’ it did so interchangeably with the terms ‘noncontracting parties’ [citation] and ‘third parties’… we find it highly unlikely that Applied Equipment intended to hold, or should be construed as holding, that persons or entities with an ownership interest in a corporation are automatically immune from liability for interfering with their corporation’s contractual obligations”); see also Powerhouse Motorsports Group, Inc. v. Yamaha Motor Corp., U.S.A. (2013) 221 Cal. App.4th 867, 884 (stating that “[n]o published California case has disagreed with Woods or expanded the scope of Applied Equipment”).) Plaintiff demonstrates that he has standing for his intentional interference with contractual relations cause of action against the Lunardis as the Lunardis are not parties to the contract between Plaintiff and Swallow—in other words, they are strangers to that contract as defined by Applied Equipment, supra, as cited in the twelfth affirmative defense, and thus meets his initial burden to demonstrate that the twelfth affirmative defense lacks merit.

In opposition, the Lunardis argue that PM Group, Inc. v. Stewart (2007) 154 Cal.App.4th 55 supports their position. However, PM Group is factually distinguishable as “the cause of action failed as a matter of law, not because Stewart was not a ‘stranger’ to the contracts between the promoter and its subpromoters, but because his decision not to perform, without more, was not tortious.” (Redfearn v. Trader Joe’s Co. (2018) 20 Cal.App.5th 989, 1001-1002, citing PM Group, supra, 154 Cal.App.4th at p.1148.) To the extent that the Lunardis are arguing that there is a split of authority, this Court must follow the Sixth District’s opinion. The Lunardis also argue that “[t]here is also the question of whether Mr. Park has standing to challenge the Lunardis’ performance of a judgment, which here, required them to purchase Swallow’s shares. (Lunardis’ opposition to Pl.’s motion for summary judgment or adjudication, p.25:21-25.) However, the Lunardis misunderstand the standing requirement for an intentional interference with contractual relations cause of action. As such, the Lunardis fail to demonstrate the existence of a triable issue of material fact as to the twelfth affirmative defense to the SAC and the motion for summary adjudication of the twelfth affirmative defense to the SAC is GRANTED.

Park’s objections to the Lunardis’ evidence in opposition are not the basis for the Court’s order.

Fourteenth affirmative defense to the SAC

The Lunardis’ fourteenth affirmative defense to the SAC states that “[a]s a fourteenth, separate and affirmative defense, Defendants assert that the claims asserted against them are barred by the doctrines of res judicata and/or collateral estoppel.”

For reasons already articulated above in Plaintiff’s motion for summary adjudication of the first cause of action of the SAXC, Plaintiff has demonstrated that the fourteenth affirmative defense lacks merit as to the arbitration awards, and in opposition, the Lunardis fail to demonstrate a triable issue of material fact. Accordingly, Plaintiff’s motion for summary adjudication of the fourteenth affirmative defense is GRANTED to the extent that it may have any preclusive effect of evidence that are the subject of the arbitration awards.

However, as the Lunardis argue, Plaintiff’s separate statement fails to cite to any evidence regarding the Buck-Walsh Sonoma action or the Commission’s approval of the Lunardis’ purchase of Swallow’s shares. Plaintiff admits as such in his reply brief, stating that “[i]t is true that the separate statement does not include ‘facts’ in response to these identified allegations,” but instead contends that “[t]hat is because they are purely legal arguments, such as the scope of the rulings in Park’s cases against Tracey Buck-Walsh, the effect of the common interest doctrine, and whether a Commission decision is a final judgment on the merits (which it is not).” (Pl.’s reply brief in support of motion for summary judgment or adjudication, p.9:1-4.) However, as stated above, Plaintiff is required to cite to and present the evidence upon which he relies for his assertions. He has not done so in his separate statement, and as such, he fails to meet his initial burden as to the Buck-Walsh Sonoma action or the Commission’s approval. Accordingly, Plaintiff’s motion for summary adjudication of the fourteenth affirmative defense is DENIED to the extent it pertains to the Buck-Walsh Sonoma action or the Commission’s approval of the Lunardis’ purchase of Swallow’s shares.

Park’s objections to the Lunardis’ evidence in opposition are not the basis for the Court’s order.

The Court shall prepare the Order.