Defendants’ MSJ of Plaintiff’s FAC is:

(1) GRANTED as to Plaintiff Paul. The undisputed facts demonstrate her lack of standing as to all claims except the IIED claim. With regard to the IIED claim, the undisputed facts establish there was no outrageous conduct or the requisite intent or recklessness as to Plaintiff’s emotional distress

(2) DENIED as to CSAC. While the FAC indicates it is on behalf of CSAC, a for profit corporation, Plaintiff concedes this is a typographical error that is properly addressed by amendment by interlineation. Substantively, Plaintiff submits sufficient evidence to raise a triable issue of fact regarding whether parties’ agreed to a sale or transfer of CSAC’s assets to Sav Raw, or if Plaintiff only agreed to change CSAC’s name to Sav Raw with the understanding that Sav Raw would still be her company. Plaintiff Paul’s straightforward and concise declaration testimony sufficiently refutes Defendants’ evidence that parties orally agreed to the transfer and sale of CSAC’s assets and liabilities to their company, Sav Raw.

The Court acknowledges the severe procedural deficiencies in Plaintiffs’ opposition, including a near useless separate statement. However, as stated above, the key issue raised by Defendants’ MSJ is quite straightforward–were CSAC’s assets and liabilities transferred to Sav Raw by virtue of a legitimate oral agreement or were they stolen by Defendants under the guise of a name change? The procedural defects are not so crippling that the Court cannot determine whether there is a triable issue of fact on this aspect of the case.

Plaintiffs’ MSJ is DENIED. As with Defendants’ MSJ, there is a material issue of fact in dispute regarding whether the allegedly fraudulent conversion of CSAC’s assets was actually a legitimate transfer and sale pursuant to an oral contract.

ANALYSIS:

I. Defense Motion for Summary Judgment or in the Alternative, Summary Adjudication

Defendants move for summary judgment on grounds that (1) Plaintiffs lack standing to sue, as CSAC, a nonprofit corporation, is the entity for which Defendants worked and from which they stole, not Plaintiff Paul personally or Plaintiff CSAC, a for profit corporation; (2) there was never any fraud against Plaintiff because Defendants transfer of funds and assets to the Sav Raw accounts was done with Plaintiff Paul’s approval and knowledge; (3) the use of CSAC funds for payment of Defendants’ rent was acknowledged and approved by Plaintiff Paul; (4) the transfer of assets to Defendants’ company, Sav-Raw, was not fraudulent but part of Defendant’s legitimate purchase of CSACs assets and liabilities; (4) the customer lists are not trade secrets and the misappropriation claim fails for this reason; and (5) the IIED claim fails because there is no evidence that Plaintiff’s emotional distress was caused by Defendant’s conduct.

In response, Plaintiff mistakenly assumes the motion seeks summary judgment or adjudication of the x-complaint and the complaint. However, the motion only seeks summary judgment or adjudication of the Plaintiff’s FAC.

Plaintiff opposes Defendants’ MSJ/MSA on grounds that (1) Paul is a proper party because she personally suffered injury due to Defendants’ fraud; (2) admittedly Plaintiff CSAC is erroneously identified as a for profit corporation in the FAC and should be identified as a non-profit; (3) there was no such legitimate transfer or purchase of CSAC assets by Defendants for Sav Raw; and (4) the customer lists are trade secrets.

A. Procedural Issues

Defendants’ Separate Statement is properly organized by each issue to be adjudicated and then by its general request for summary judgment. However, it does not comply with the format requirements under CRC Rule 3.1350(h). There should be two columns, the right-most one left blank for the opposing party’s response to the specific material fact. Each material fact and citation to the supporting evidence should be listed separately in the left hand column. Defendants’ error does not render it impossible to read the separate statement.

However, Plaintiff’s separate statement completely fails to comply with CRC Rule 3.135(h). Rather than using the dual column formatting under CRC Rule 3.1350(h), Plaintiff does not reproduce each fact set forth in the Defendant’s separate statement in the left hand column and indicate clearly “Disputed” or “Undisputed.” Instead, Plaintiff places the response to the unidentified material fact in the left hand column and the supporting evidence in the right hand column.

Defendants’ reply objects to these procedural defects. Defendant’s ability to oppose is severely handicapped due to the untimeliness of the opposition, the crippingly defective separate statement and the failure to adhere to the page limit. The number of material facts is voluminous, as is the evidence in support of both parties’ position. The action is both factually and legally convoluted.

When a moving party makes the required prima facie showing, failure to comply with this requirement may, in the court’s discretion, constitute a sufficient ground for granting the motion. CCP § 437c(b)(3); Kojababian v. Genuine Home Loans, Inc. (2009) 174 Cal.App.4th 408, 418; Batarse v. Service Employees Int’l Union Local 1000 (2012) 209 Cal.App.4th 820, 831–833.
However, the court may not grant the motion unless it first determines that the moving party has met its initial burden of proof. Thatcher v. Lucky Stores, Inc. (2000) 79 Cal.App.4th 1081, 1085–1086.

While Plaintiffs’ opposition papers clearly suffer from severe defects, the Court finds the key evidence regarding whether Plaintiff Paul entered into an alleged oral agreement with Defendants that would legitimize their transfer of CSAC’s assets and use of CSAC funds is clearly in dispute. Plaintiff Paul’s declaration denies the existence of this oral agreement and that evidence is neither convoluted nor difficult to locate.

B. Merits

Defendant negates an essential element to each and every cause of action based on (1) Plaintiffs’ lack of standing to assert claims that belong to CSAC, a nonprofit corporation (SSUMF Nos. 1,2, 10 and 14); (2) evidence that Paul’s failure to run the business properly led to its demise (SSUMF Nos. 21 to 25); (3) evidence of parties’ oral agreement whereby Sav Raw would legitimately purchase CSAC’s assets and that Paul voluntarily closed down CSAC in connection with that purchase (SSUMF Nos. 38-46). Defendant establishes that they did no wrong during their employ and that parties entered into an agreement for transfer of assets from CSAC to Sav Raw, including the customer list.

Plaintiff’s memo of points and authorities is nearly incomprehensible and its incomprehensibility is compounded by the formatting, including Plaintiff’s failure to adhere to the 20-page page limit under CRC Rule 3.1112(d). Plaintiff’s complaint is likewise confusing, nearly to the point of being uncertain. However, what is clear from Plaintiff Paul’s declaration is that she never agreed to Defendants’ starting their own business with CSAC’s assets. See Paul Decl., ¶23. Plaintiff Paul claims the only agreement reached between the parties was that CSAC’s name would be changed to Sav Raw. Plaintiff also claims Defendants misrepresented the financial state of CSAC and due to the negative association with the name, CSAC should change its name to Sav Raw.

The agreement upon which Defendants base their substantive defense was oral. Therefore, Plaintiff’s declaration testimony that she never agreed to sale of the business but only a name change raises an issue of fact that prevents summary judgment or adjudication.

As to the standing issue, the Plaintiffs admit that the FAC is on behalf of the wrong CSAC. Moreover, the FAC’s allegations make clear that it is for injury to CSAC and its property, with the exception of the IIED claim. Claims for injury or damage to a corporation or its property belong to the corporation, not its stockholders, much less its employees. See Jones v. H.F. Ahmanson & Co. (1969) 1 Cal.3d 93, 107. Any conduct directed towards Paul was in her capacity as officer of CSAC and the only assets affected were the assets of CSAC, which indirectly affected Plaintiff Paul’s salary amount as an employee of CSAC. The undisputed facts therefore establish Paul’s lack of standing to assert the non-IIED claims.

Aside from the IIED claim, all claims reside in CSAC, the nonprofit corporation, and not named plaintiff, CSAC, a for profit corporation. However, the erroneous identification of CSAC as a for-profit instead of a nonprofit in the FAC may be addressed by interlineation. Substantively, Plaintiff CSAC submits sufficient evidence to establish that CSAC a nonprofit was revived and is an existing legal entity.

Finally, with respect to the IIED claim, Defendants negate the essential elements of their intent to or reckless disregard of the probability of causing, emotional distress and establish that they were merely performing their duties as employees and later, exercising their rights as purchasers of CSAC’s assets. See SSUMF Nos. 1-49 and 51. They also establish that any emotional distress Plaintiff Paul experienced was due to other serious life events, such as the death of her father. Id. at 51.

This showing also negates the existence of any outrageous conduct as a matter of law. In fact, the FAC fails to plead outrageous conduct as a matter of law. Defendants alleged embezzlement does not qualify as “outrageous conduct” given the nature of existing case law defining that term. See Alcorn v. Anbro Engineering, Inc. (1970) 2 Cal.3d 493, 499 (African-American defendant whose supervisor used racial epithets when firing him stated a c/a for IIED); Berkley v. Dowds (2007) 152 Cal.App.4th 518, 534 (affirming order sustaining demurrer to IIED cause of action without leave to amend based on failure to allege outrageous conduct).

II. Plaintiffs’ MSJ or MSA

The Plaintiffs’ MSJ is properly DENIED on substantive grounds. As discussed in connection with Defense’s MSJ, there is a triable issue of fact regarding whether the alleged acts were not fraudulent, but legitimately carried out pursuant to the parties’ oral agreement to transfer CSAC’s assets to Defendants’ new business, Sav Raw, in exchange for consideration of $1400 payments/mo. to Plaintiff Paul. In addition, there is an issue of fact as to whether Plaintiffs have standing to sue on the alleged claims.

Evidentiary Objections:

Defendants to S. Paul Decl
1-8, 11-17, 20, 23 Overruled
9.-10, 18-19, 22, 26-28 Sustained

24. Sustained as to “Therefore…trade secrets” and overrule as to remaining
25. Sustained as to “Why would I…business” and overrule as to remaining

Defendants to “Plaintiffs’ Affidavits”
Sustained as to all objections

Plaintiffs’ Objections–INCOMPREHENSIBLE so overruled