Case Number: BC596078 Hearing Date: June 01, 2018 Dept: 37

CASE NAME: Natural Concepts Marketing Group Inc. v. Quick Auto Funding, Inc., et al.

CASE NO.: BC596078

HEARING DATE: 6/1/18

DEPARTMENT: 37

CALENDAR NO.: 8

FILING DATE: 9/28/15

FSC/TRIAL DATE: 7/2/18 (FSC), 7/10/18 (Trial)

NOTICE: OK

PROCEEDING: Motion for Summary Judgment or, Alternatively, Summary Adjudication

MOVING PARTY: Defendant Michael Cobb

OPPOSING PARTY: Plaintiff Natural Concepts Marketing Group Inc.[1]

COURT’S TENTATIVE RULING

The court GRANTS the motion in-part and GRANTS summary adjudication on the second cause of action. The motion is otherwise DENIED. Counsel for Plaintiff to give notice.
STATEMENT OF THE CASE

This action concerns the alleged breach of an advertising agreement. Plaintiff Natural Concepts Marketing Group, Inc. dba Ad Leverage (“National Concepts”) alleges that it entered into an agreement with Defendants to negotiate and purchase advertisements with various media outlets to promote Defendants’ business. In exchange, Defendants allegedly agreed to compensate Plaintiff for the purchase costs of the advertising upon invoice or 30 days after the time they were due. Plaintiff contends that Defendants subsequently requested and induce Plaintiff into providing additional advertising services in exchange for the promise to fully compensate Plaintiff and that Defendants now owe the outstanding sum of $1.4 million.

Defendant Michael J. Cobb (“Michael Cobb”) contends that Plaintiff is improperly attempting to hold him liable for the conduct of his son Defendant Joshua M. Cobb (“Joshua Cobb”) and Defendants Alfred Clausen (“Clausen”) and Quick Auto Funding, Inc. (“Quick Auto”).

In the First Amended Complaint (“FAC”), Plaintiff asserts ten causes of action against all Defendants for: (1) breach of contract; (2) promissory estoppel; (3) unjust enrichment; (4) money due; (5) quantum meruit; (6) negligent misrepresentation; (7) fraud; (8) services furnished; (9) open book account and (10) account stated. On June 23, 2017, the court sustained Defendant Michael Cobb’s demurrer to the sixth cause of action. [2]

Defendant Michael Cobb now moves for summary judgment, or in the alternative summary adjudication (“MSJ”) on each remaining cause of action of the FAC. Plaintiff opposes the motion. [3] For purposes of the subject motion, Defendant Michael Cobb will also be referred to as “Defendant”.
EVIDENTIARY OBJECTIONS

Overruled: 1-5

Sustained:

Defendant’s Objections to the Declaration of Andrew Palosi (“Palosi Decl.”)

Objections 1-3: Overruled. Party Admission. Defendant Michael Cobb is being sued as the alter ego of Joshua Cobb and Quick Auto. (See Evid. Code, § 1220.)

Objection 4: Overruled. Relevant. (Evid. Code, § 210.)

Defendant’s Objections to the Declaration of Samuel E. Chilakos (“Chilakos Decl.”) Ex. 8 (Deposition of Tracy Fickett [“Fickett Depo”])

Objection 5: Overruled. Chilakos attests that Fickett is a certified public accountant who provided services to Defendant Quick Auto during the relevant period, while Fickett attests to her knowledge of Michael Cobb’s activities. This is sufficient to establish personal knowledge.
DISCUSSION
I. Legal Standard

The law of summary judgment provides courts “a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843 (Aguilar).) In reviewing a motion for summary judgment, courts employ a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent’s claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.” (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294 (Hinesley).) “A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty,” and “[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 moving defendant bears the initial burden of production to show that one or more elements of the cause of action cannot be established or that there is a complete defense to the cause of action, at which point the burden shifts to the plaintiff to make a prima facie showing of the existence of a triable issue. (Code Civ. Proc., § 437c, subd. (p)(2).) The opposing party may not rely on the mere allegations or denials of the pleadings, but instead must set forth the specific facts showing that a triable issue exists as to that cause of action or a defense thereto. (Aguilar, supra, at p. 849.) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389; see also Hinesley, supra, 135 Cal.App.4th at p. 294 [The court must “view the evidence in the light most favorable to the opposing party and accept all inferences reasonably drawn therefrom.”].) A motion for summary judgment must be denied where the moving party’s evidence does not prove all material facts, even in the absence of any opposition (Leyva v. Sup. Ct. (1985) 164 Cal.App.3d 462, 475) or where the opposition is weak (Salasguevara v. Wyeth Labs., Inc. (1990) 222 Cal.App.3d 379, 384, 387).
II. Analysis
A. Alter Ego Theory of Liability

To succeed on an alter ego claim, a plaintiff must be able to show (1) such unity of interest that no separation actually exists, and (2) that the facts are “such that an adherence to the fiction of the separate existence of the corporation would, under the particular circumstances, sanction a fraud or promote injustice.” (First Western Bank & Trust Co. v. Bookasta (1968) 267 Cal.App.2d 910, 914-915 (First Western).) “Conditions under which the corporate entity may be disregarded vary by circumstance, but courts often consider commingling of funds, personal use of corporate assets, inadequate corporate records, lack of employees, offices, or operating funds, and inadequate capitalization.” (CADC/RADC Venture 2011-1 LLC v. Bradley (2015) 235 Cal.App.4th 775, 789 (Bradley).)

Defendant Michael Cobb contends that Plaintiff’s alter ego claims are meritless. First, Defendant contends that it is unclear whether he is a shareholder of the corporation since any discussions about ownership were informal, and Defendant further contends that he never received any certificate evidencing such ownership. (Mot. 10.) Defendant’s argument is belied by his own testimony at deposition that he had a 22 percent ownership in Quick Auto. (Chilakos Decl. Ex. 9 (Deposition of Michael Andrew Cobb [“M. Cobb Depo.”]) at 25:19-23.) Accordingly, Defendant’s first argument fails.

Second, Michael Cobb argues that he was merely helping Joshua Cobb and Clausen with Quick Auto and that he did not dominate or control it. Defendant further argues that Joshua Cobb and Clausen were also owners of the corporation who possessed and exercised power over Quick Auto’s business. According to Michael Cobb, he did not comingle his funds or assets with Quick Auto or cause Quick Auto to pay for anything other than its business operations. Defendant, however, does not point to any evidence in support of his argument beyond his own declaration statements to this fact. The court further notes that Defendant testified at his deposition that Clausen and Joshua Cobb “abandoned” Quick Auto and stopped showing up to the business. (Chilakos Decl. Ex. 9, at 32:17-24.)[4]

Plaintiff contends that Michael Cobb was Quick Auto’s alter ego and points to evidence that Defendant became the decision maker for Quick Auto as of December 2013. Palosi attests that Joshua Cobb advised Plaintiff that Michael Cobb had “taken over” Quick Auto and that Michael Cobb himself confirmed it by stating on December 18, 2013 that he was “now the owner of Quick Auto Funding” and that he would “take care” of ensuring that Plaintiff was paid. (Plaintiff’s Separate Statement “PSS”) ¶ 20.1; Palosi Decl. ¶¶ 10-11.) Plaintiff Michael Cobb also testified at deposition that he had the authority to hire and fire at Quick Auto from the inception of his involvement with that company and that he exercised that authority to hire and fire employees. (PSS ¶ 21; Chilakos Decl. Ex. 9 at 75:12-76:11.)

Plaintiff further presents evidence that Michael Cobb became an authorized signer on Quick Auto’s bank accounts on December 20, 2013 (PSS ¶ 23.2; Chilakos Decl. Ex. 3) and that he used that authority to sign checks to himself in the amount of $100,000 on December 31, 2013 (PSS 24, Chilakos Decl. Ex. 4), along with payments totaling $250,000 in October through December 2013 that were made to a corporation named Clausen & Cobb Management Co., Inc., in which he had an ownership interest. (PSS ¶ 24; Chilakos Decl. Ex. 7.) Quick Auto’s former accountant Tracy Fickett (“Fickett”) testified during her deposition that she did not know the purpose of these payments. (PSS ¶ 24; Chilakos Decl. Ex. 8 at 23:22-24:10.) Plaintiff presents further evidence that Defendant additionally wrote checks to himself from Quick Auto’s accounts in the amount of $18,923.36 in 2014 (PSS ¶ 24; Chilakos Decl Ex. 5) and $18,600 in 2015 (PSS ¶ 24; Chilakos Decl. Ex. 6), wrote checks payable to a building he owned in 2014 in the amount of $33,182, and that Joshua Cobb wrote Michael Cobb a check in the amount of $3,760.74 in 2014 (PSS ¶ 24; Chilakos Decl. Ex. 5). This evidence and the other evidence in the record suggests that Michael Cobb did effectively “control” and “dominate” Quick Auto as of December 2013.

In his reply, Defendant does not present any evidence that these payments were made for a legitimate business purpose and instead argues that Plaintiff fails to demonstrate that they were not. On summary judgment, the court views the evidence in the light most favorable to the non-moving party. (Hinesley, supra, 135 Cal.App.4th at p. 294.) As such, Plaintiff’s evidence that Defendant Michael Cobb had hiring and firing control over Quick Auto, that Defendant was an authorized signatory on Quick Auto’s bank accounts and that Defendant exercised his authority to write checks to himself and to entities in which he had an ownership interest in amounts exceeding $500,000 is sufficient to demonstrate the existence of a triable issue of fact as to whether Defendant dominated and controlled Quick Auto, at least as of December 20, 2013. This evidence is further sufficient to demonstrate the existence of a triable issue of fact as to whether Michael Cobb personally used Quick Auto’s corporate assets and redirected these assets to himself and to corporations in which he had an ownership interest. (See Bradley, 235 Cal.App.4th at p. 789.)

Courts have recognized that personal use of corporate assets or the transfer of assets from a corporation in a manner that leaves the corporation unable to satisfy its creditors is sufficient to support a finding that it would be unjust not to hold the individual owner who effected the transfer liable as an alter ego. (See Highland Springs Conference and Training Center v. City of Banning (2016) 244 Cal.App.4th 267, 284-286 [recognizing that a shareholder’s transfer of a corporation’s assets to another corporation, leaving the original corporation unable to satisfy its creditors is sufficient to support a finding of alter ego status].) Plaintiff’s evidence is sufficient to demonstrate the existence of a triable issue of fact as to whether Defendant’s conduct is sufficient to warrant piercing the corporate veil.

Defendant Michael Cobb argues that he furnished $900,000 of his own money into Quick Auto in an effort to rehabilitate the business. (M. Cobb. Decl. at ¶ 2; Mot. 1-2, Reply 7.) Although Defendant does not directly tie this point to an argument, Defendant appears to contend that it was thus not inequitable for him to obtain money from Quick Auto. (Reply 7.) The court disagrees. First, Michael Cobb assertion is belied by his deposition testimony that he did not lend money to Quick Auto but lent this money directly to Joshua Cobb. (Chilakos Decl. Ex. 9 at 25:24-26:13 [stating that Michael Cobb did not loan money to the corporation but that he loaned money to Joshua Cobb].) Even if the court were to assume that Michael Cobb lent the money to Quick Auto as he now contends, Defendant does not present any evidence or legal authority that would have entitled him to be repaid by Quick Auto prior to other creditors, such as Plaintiff. Accordingly, Defendant does not demonstrate that his asserted loan to Quick Auto would make a finding of alter ego status inequitable. Furthermore, Defendant’s testimony that he “[d]idn’t take money out. . . . Not a dime” from Quick Auto (Chilakos Decl. Ex. 9 at 26:12-13) and that he did not receive any of his money back or receive any compensation for his work at Quick Auto (Michael Cobb Decl. ¶¶ 2, 4) appears to be contradicted by Plaintiff’s evidence of the checks Michael Cobb wrote to himself from Quick Auto’s bank account, calling Defendant’s credibility into question. In sum, Defendant’s alleged loan of $900,000 is insufficient to demonstrate it would be inequitable to pierce the corporate veil.

For these reasons, the court finds that a triable issue of fact exists as to whether Defendant Michael Cobb was the alter ego of Quick Auto, at least as of December 20, 2013.
B. First Cause of Action for Breach of Contract

A cause of action for breach of contract consists of the following elements: (1) the existence of a contract; (2) the plaintiff’s performance or excuse for nonperformance; (3) the defendant’s breach; and (4) the resulting damages to the plaintiff. (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)

The FAC alleges that Plaintiff entered into an oral contract with Defendants in or around January 2013, pursuant to which Defendants agreed to pay Plaintiff to negotiate and purchase advertisements with various media outlets. (FAC ¶ 12.) The first cause of action for breach of contract alleges that Defendants failed to perform all of the material terms of the agreement, leading to Plaintiff’s damages in the amount of $1,400,000. (FAC ¶¶ 23-26.) [5]

Defendant moves for summary adjudication on the first cause of action on the grounds that Michael Cobb was never a party to the alleged agreement. Defendant argues that Joshua Cobb and Alfred Clausen negotiated the terms of the agreement and that Michael Cobb only stepped in later to help his son operate his business. According to Defendant, he never assumed Quick Auto’s obligations, and he only communicated with Plaintiff as Quick Auto’s agent. (Mot. 4.)

A contract cannot be enforced against a party who did not execute it or assume its obligations. (Gold v. Gibbons (1960) 178 Cal.App.2d 517, 519.) Nevertheless, as a triable issue of fact exists as to whether Michael Cobb obtained control of Quick Auto and became its alter ego, a triable issue of fact exists as to whether he thereby assumed liability for Quick Auto’s obligations. Defendant Michael Cobb does not assert any arguments regarding Defendant Quick Auto or present any legal authority to demonstrate that Plaintiff’s breach of contract claims against Quick Auto are without merit. The court therefore DENIES summary adjudication on the first cause of action for breach of contract.
C. Second Cause of Action for Promissory Estoppel

“Promissory estoppel applies whenever a ‘promise which the promissor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance’ would result in an ‘injustice’ if the promise were not enforced. [Citation.]” (Advanced Choices, Inc. v. State Dept. of Health Servs. (2010) 182 Cal.App.4th 1661, 1671-1672.) “The elements of a promissory estoppel claim are ‘(1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) [the] reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance.’ [Citation.]” (Ibid.) The party claiming estoppel must specifically plead all facts relied on to establish its elements. (Smith v. City and County of San Francisco (1990) 225 Cal.App.3d 38, 48 (Smith).) “Under this doctrine a promisor is bound when he should reasonably expect a substantial change of position, either by act or forbearance, in reliance on his promise, if injustice can be avoided only by its enforcement.” (Ibid.)

The second cause of action alleges that Defendants “made an unambiguous promise to AD LEVERAGE that in return for AD LEVERAGE’s efforts and costs to purchase advertisements on the DEFENDANTS’ behalf, AD LEVERAGE would receive all purchase costs and fees associated with those ads, with outstanding amounts summing $1,400,000.” (FAC ¶ 32.)

Defendant contends that Plaintiff’s second cause of action is meritless because Michael Cobb is not personally responsible for any promise he made as an agent of Quick Auto and because promissory estoppel does not apply to the facts of the case. As a triable issue of fact exists as to whether Michael Cobb is liable under an alter ego theory, Defendant’s first argument regarding agency fails.

On Defendant’s second argument, California Courts have recognized that a cause of action for promissory estoppel is inconsistent with a cause of action for breach of contract on the same facts, as promissory estoppel does not apply if actual consideration was given by the promisee. (Fleet v. Bank of America N.A. (2014) 229 Cal.App.4th 1403, 1413.) Defendant argues that the doctrine of promissory estoppel does not apply in this case because Plaintiff received actual consideration for the alleged promise to pay. This is sufficient for Defendant to meet his initial burden to demonstrate that there is a complete defense to the second cause of action. (See Code Civ. Proc., § 437c, subd. (p)(2).)

Plaintiff does not respond to this argument and instead contends that Defendant Michael Cobb entered into an oral agreement directly with Plaintiff in December 2013, pursuant to which Plaintiff agreed to extend credit for new advertising services in exchange for Michael Cobb’s promise to pay the balance owed to Plaintiff in full. (Opp. 8.) However, this alleged agreement between Plaintiff and Michael Cobb presents a separate and distinct legal theory for promissory estoppel than the legal theory that was pled in the FAC. In the FAC, the first cause of action for breach of contract and the second cause of action for promissory estoppel are predicated on an alleged January 2013 oral agreement between Defendants and Plaintiff, wherein Defendants allegedly agreed to pay Plaintiffs to purchase media advertising spots to promote Defendants’ business. (FAC ¶ 13-15.) The FAC does not allege the existence of a specific agreement between Plaintiff and Michael Cobb in December 2013 or at any other time. (See FAC ¶¶ 12-21, 30-35.)

“The complaint limits the issues to be addressed at the motion for summary judgment. The rationale is clear: It is the allegations in the complaint to which the summary judgment motion must respond.” (Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1258 (Laabs).) As the FAC does not plead the existence of the alleged December 2013 agreement with Michael Cobb, Plaintiff cannot now rely on this alleged agreement and this new legal theory as the basis for its second cause of action for promissory estoppel. As Plaintiff does not present any other argument, evidence or legal authority to refute Defendant’s argument regarding consideration, Plaintiff fails to demonstrate that the second cause of action has merit. [6]

For these reasons, the court GRANTS summary adjudication on the second cause of action.

D. Common Counts: Third Cause of Action for Unjust Enrichment; Fourth Cause of Action for Money Due; Fifth Cause of Action for Quantum Meruit; Eighth Cause of Action for Labor and Materials; Ninth Cause of Action for Open Book and Tenth Cause of Action for Account Stated.

Defendant Michael Cobb argues that the third cause of action for unjust enrichment, the fifth cause of action for quantum meruit and the eighth cause of action for labor and materials fail because Michael Cobb did not receive any personal benefit with respect to Natural Concepts’ performance of the marketing services agreement. Defendant also argues that the fourth cause of action for money due fails because Michael Cobb did not actually receive money belonging to Plaintiff. According to Defendant, the ninth cause of action for open book and tenth cause of action for account stated similarly fail because Michael Cobb was never a responsible party with respect to any “account” with Plaintiff.

As stated above, a triable issue exists as to whether Defendant Michael Cobb was the alter ego of Quick Auto. Defendant Michael Cobb does not assert any arguments regarding Plaintiff’s claims against Defendant Quick Auto or demonstrate that Plaintiff’s causes of action are without merit against that Defendant. Accordingly, the court DENIES the motion for summary adjudication as to the third, fourth, fifth, eighth, ninth and tenth causes of action.
E. Seventh Cause of Action for False Promise

The elements of fraud are (1) a misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity (scienter); (3) intent to defraud—i.e., induce reliance; (4) justifiable reliance; and (5) resulting damage. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 173.) The policy of liberal construction of the pleadings ordinarily does not apply to causes of action for fraud, and fraud must be pled with particularity. (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.) “The particularity requirement necessitates pleading facts which ‘show how, when, where, to whom, and by what means the representations were tendered.’ ” (Ibid.) In an action against a corporation, the pleading burden for fraud is higher, requiring the plaintiff “to allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.” (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.) Furthermore, “A cause of action for a false promise should plead facts to show the existence of two specific intentions of the promisor: an intention to cause the promisee to act by reason of the promise, and an intention at the time of the promise not to keep it.” (Hills Transp. Co. v. Southwest Forest Indus., Inc. (1968) 266 Cal.App.2d 702, 708.)

The seventh cause of action alleges that Defendants knowingly, and with the intent to deceive Plaintiff, misrepresented that (a) they would pay the monies owed to Plaintiff for Plaintiff advancing advertising expenses for Defendants’ benefit and (b) that they would pay the outstanding amounts due either upon invoice or upon 30 days. (FAC ¶ 64.)

Defendant contends that Natural Concepts is unable to present any evidence that Michael Cobb intended that Quick Auto would not perform any promise he made on its behalf at the time such a promise was made. (Mot. 9.) Defendant further contends that any promise he made on behalf of Quick Auto was made in good faith and with the intent that Quick Auto would make good on such a promise.

Plaintiff counters that Michael Cobb’s represented to Palosi in December 2013 that Defendant would ensure that the outstanding balance owed by Defendant to Plaintiff would be paid in full if Plaintiff would extend credit for new advertising services to Quick Auto. (Opp. 9-10; PSS ¶ 11; Palosi Decl. ¶ 11.) [7] According to Palosi, Michael Cobb told Palosi that Defendant would “fix this and get [Plaintiff] paid,” but that Defendant needed some time and that he would “turn this business around” and make it profitable. (PSS ¶ 11; Palosi Decl. ¶ 11.) Plaintiff points to Defendant’s deposition testimony as evidence that Defendant Michael Cobb, acting on behalf of Quick Auto, did not intend to fulfill this promise when it was allegedly made. (PSS ¶ 11.) In his deposition, Michael Cobb testified that he became involved with Quick Auto solely to shut the business down. (PSS ¶ 11; Chilakos Decl. Ex. 9, at 20:15-21:17.) Viewing the evidence liberally in support of Plaintiff, this evidence is sufficient to demonstrate the existence of a triable issue of fact as to whether Michael Cobb made representations to Plaintiff in December 2013, on behalf of Defendant Quick Auto, in order to induce Plaintiff to extend additional credit, which Michael Cobb never intended for Quick Auto to keep.

Accordingly, Plaintiff has met its burden to demonstrate its seventh cause of action has merit against Defendant Quick Auto. Having found that a triable issue of fact exists as to whether Defendant Michael Cobb was the alter ego of Quick Auto, the court DENIES summary adjudication on the seventh cause of action.

III. Conclusion

For these reasons, the court GRANTS summary adjudication on the second cause of action. The motion is otherwise DENIED.

[1] Plaintiff submits evidence in opposition to the subject motion that contains sensitive information of Defendant Quick Auto Funding, Inc., including its unredacted financial account numbers. (See Declaration of Samuel E. Chilakos (“Chilakos Decl.”) Exs. 4-7; see also Plaintiff’s Separate Statement (“PSS”) ¶ 23.2.) Pursuant to California Rules of Court, rule 1.201(a)(2), such information must be redacted or excluded to protect privacy and other legitimate interests. Plaintiffs are instructed to withdraw the exhibits in question and to file and submit new versions of the documents that properly redact all sensitive information.

[2] The court entered default against Defendant Joshua Cobb on April 20, 2017 and against Quick Auto on June 7, 2017. Plaintiff’s application for service by publication of Defendant Clauson was rejected on May 26, 2016. There is no proof of service of Clauson in the record, and the current status of Plaintiff’s claims against Clauson are unclear.

[3] The notice of the MSJ seeks summary adjudication of the first, second, third, fourth, fifth, seventh, eighth, ninth and tenth causes of action of the FAC. Although Defendant Michael Cobb also argues in his motion that the alter ego theory of liability lacks merit, Defendant did not specifically state this issue of duty in the notice of the motion, as is required under California Rules of Court, rule 3.1350(b). Accordingly, Defendant has not sought and is not entitled to summary adjudication on this issue separate from any determination on the merits of each individual cause of action. (See Cal. Rules of Court, rule 3.1350(b).)

[4] Defendant additionally argues that Quick Auto was not a mere shell and that it operated a real business, had office space and employees and owned real assets and that it adopted bylaws, issued stock to its shareholders, held shareholder and director meetings and adhered to all other corporate formalities. Plaintiff does not dispute that Quick Auto was not a mere “shell” company and that it did not commingle its funds with Michael Cobb. (Defendant’s Separate Statement (“DSS”) ¶¶ 22-23.) Moreover, Plaintiff’s owner Andrew Palosi (“Palosi”) testified at his deposition that he believed Quick Auto was a legitimate company with employees and which generated revenue. (Declaration of Scott L. Levitt (“Levitt Decl.”) Ex. A (“Deposition of Andrew Palosi [“Palosi Depo.”]) at 82:12-22.)

[5] The FAC further alleges that Plaintiff and Defendants Quick Auto and Joshua Cobb signed a joint agreement for advertisements with Time Warner Cable on January 8 and 12, 2014. However, the first cause of action does not appear to allege or recover for breach of the agreement with Time Warner Cable.

[6] Plaintiff’s opposition also asserts the alleged December 2013 agreement between Michael Cobb as a basis for the first cause of action for breach of contract. As with Plaintiff’s claim for promissory estoppel, the FAC does not allege breach of contract based on any agreement between Plaintiff and Michael Cobb in December 2013, and the court will therefore not consider this new legal theory for breach of contract on the present MSJ. (See Laabs, supra, 163 Cal.App.4th at p. 1258.)

[7] In contrast to the allegations of the first and second cause of action, which are based on the alleged breach of the alleged January 2013 agreement, the seventh cause of action alleges that Defendants knowingly and intentionally misrepresented that they would pay the monies owed to Plaintiff after that agreement was formed. (See FAC ¶¶ 19, 64; see id. at ¶ 19 [“DEFENDANTS, and each of them, personally induced PLAINTIFF’s reliance on promises of payment. . . .”].) As such, Michael Cobb’s alleged December 2013 request that Plaintiff continue to provide advertising services to Quality Auto on credit and his alleged representation that he would “take care” of the balance owed does not arise from a newly pled legal theory. This argument is therefore not barred on the subject MSJ. (See Laabs, supra, 163 Cal.App.4th at pp. 1257-1258 [recognizing that additional facts may be asserted in an opposition to a MSJ where no new legal theory is introduced].)