Case Name: Shawn Douglass v. Computer Sciences Corp., et al.

Case No.: 2015-1-CV-284957

(1) Defendants Computer Sciences Corp. and Servicemesh, Inc.’s Motion to Dismiss for Forum Non Conveniens to Plaintiff’s First Amended Complaint
(2) Defendants Computer Sciences Corp. and Servicemesh, Inc.’s Demurrer and Demurrer to Plaintiff’s First Amended Complaint, Subject to Their Motion to Dismiss for Forum Non Conveniens
(3) Defendant Jeff Drake’s Motion to Dismiss for Forum Non Conveniens to Plaintiff’s First Amended Complaint
(4) Defendant Jeff Drake’s Demurrer and Demurrer to Plaintiff’s First Amended Complaint, Subject to His Motion to Dismiss for Forum Non Conveniens
(5) Defendant Teymour Boutros-Ghali’s Joinder in the Motions to Dismiss for Forum Non Conveniens filed by Defendants Jeff Drake and Computer Sciences Corporation and Servicemesh Inc.
(6) Defendant Teymour Boutros-Ghali’s Demurrer to the First Amended Complaint

On December 17, 2012, plaintiff Shawn Douglass (“Douglass”) executed an employment contract to join defendant Servicemesh, Inc. (“Servicemesh”) as CTO. (First Amended Complaint (“FAC”), ¶12.) Plaintiff Douglass’s compensation included an equity award totaling 598,644 options in Servicemesh stock (“Options”). (Id.) The employment contract included special acceleration rights for the Options in the event of a change of control such as merger or acquisition. (Id.) Upon a change of control, plaintiff Douglass would receive 25% of the Options immediately and 75% of the Options if a change of control occurred and the acquiring company terminated him within one year. (Id.)

Beginning January 25, 2013, defendant Servicemesh asked plaintiff Douglass to reach out to potential acquirers and initiate discussions. (FAC, ¶13.) Plaintiff reached out to several large corporations, including defendant Computer Sciences Corporation (“CSC”). (Id.) On February 24, 2013, plaintiff Douglass and defendant Jeff Drake (“Drake”), Servicemesh’s Executive Vice-President of Corporate Development, began talks with defendant CSC and working on the due diligence process. (FAC, ¶¶5 and 14.) In mid-March 2013, several other corporations expressed an interest in acquiring defendant Servicemesh. (FAC, ¶15.) Defendant Drake and plaintiff Douglass collaborated daily to coordinate the various due diligence matters. (FAC, ¶16.) For months, plaintiff Douglass participated in meetings with several interested bidders in parallel with defendant CSC to obtain the best price. (Id.)

Beginning September 21, 2013, plaintiff Douglass was systematically excluded from the acquisition process and his access to the CSC deal room was revoked. (FAC, ¶17.) Officers and directors of defendant Servicemesh excluded plaintiff Douglass with the knowledge that defendant Servicemesh was going to cancel the stock option plan and redistribute the money saved from cancellation of plaintiff Douglass’s stock. (FAC, ¶18.)

On October 28, 2013, defendant Drake informed plaintiff Douglass that cancellation of the employee option plan was likely but defendant Servicemesh’s CEO, Eric Pulier (“Pulier”) was working to obtain solid retention packages including one for plaintiff Douglass. (Complaint, ¶¶12 and 19.) After receiving confirmation that the employee option plan would be cancelled, plaintiff Douglass spoke to Pulier who told plaintiff Douglass not to worry about his stock options since the offer letter from CSC “will make up for it” and plaintiff Douglass would get a “big offer” from CSC with Pulier’s help. (FAC, ¶¶20 – 21.) Defendant Drake repeated Pulier’s statements about receiving an offer from CSC that would compensate plaintiff for his lost options. (FAC, ¶21.)

On October 29, 2013, after seeking clarification from Servicemesh’s CFO, Teymour Boutros-Ghali (“Boutros-Ghali”), plaintiff was advised to sign the requisite disclosure documents or face termination for cause without any compensation. (FAC, ¶22.) Pulier and defendant CSC’s CTO, Dan Hushon (“Hushon”), further assured plaintiff he would receive compensation comparable to the options being eliminated in the acquisition. (Id.) In reliance on Pulier’s promises and under threat of termination, plaintiff Douglass signed disclosure documents and a release of claims. (FAC, ¶23 – 28.) Acquisition of defendant Servicemesh by defendant CSC closed on November 15, 2013. (FAC, ¶29.)

On November 21, 2013, plaintiff Douglass received an offer letter with only a modest increase in compensation. (FAC, ¶30.) Plaintiff Douglass did not receive any restricted stock units or other compensation as promised by Pulier. (Id.) On December 7, 2013, plaintiff Douglass informed defendant CSC that he would like to be made whole on the canceled stock options as Pulier promised. (FAC, ¶31.) On December 10, 2013, defendant CSC’s Chief Human Resources Officer, Sunita Holtzer, stated defendant CSC’s general counsel would investigate and respond to plaintiff. (FAC, ¶32.) On February 12, 2014, plaintiff advised CSC that a number of financial representations made by defendant Servicemesh to defendant CSC were not accurate and specifically that there was a conflict of interest. (FAC, ¶33.) On March 11, 2014, plaintiff Douglass was informed that he was being terminated without any severance or consideration for the canceled stock options and promises made to him by defendant Servicemesh and/or CSC. (FAC, ¶34.)

On August 27, 2015, plaintiff Douglass filed a complaint against defendants Servicemesh and CSC asserting claims for:

(1) Breach of Oral Contract
(2) Promissory Estoppel
(3) Breach of the Implied Covenant of Good Faith and Fair Dealing
(4) Intentional Misrepresentation
(5) Negligent Misrepresentation
(6) Unfair Business Practices Under Bus. & Prof. Code §17200
(7) Unjust Enrichment
(8) Restitution
(9) Wrongful Termination/ Retaliation

On November 16, 2015, plaintiff Douglass filed a first amended complaint (“FAC”) which now asserts causes of action for:

(1) Breach of Oral Contract
(2) Promissory Estoppel
(3) Breach of the Implied Covenant of Good Faith and Fair Dealing
(4) Intentional Misrepresentation
(5) Negligent Misrepresentation
(6) Unfair Business Practices Under Bus. & Prof. Code §17200
(7) Unjust Enrichment
(8) Restitution
(9) Wrongful Termination/ Retaliation
(10) Failure to Pay Wages
(11) Declaratory Relief

On January 15, 2016, defendants CSC and Servicemesh filed the first two motions now before the court, a motion to dismiss for forum non conveniens and, subject to the motion to dismiss, a demurrer to plaintiff’s FAC.

On February 5, 2016, defendant Drake filed the second two motions now before the court, a motion to dismiss for forum non conveniens and, subject to the motion to dismiss, a demurrer to plaintiff’s FAC.

Pursuant to a joint stipulation, the court issued an order on February 24, 2016 continuing the hearing on the above matters to April 21, 2016.

On March 25, 2016, defendant Boutros-Ghali filed the last two motions now before the court, a joinder to the motions to dismiss for forum non conveniens filed by CSC, Servicemesh, and Drake and a demurrer to the FAC.

Pursuant to a joint stipulation, the court issued an order on April 20, 2016 continuing the hearing on all of the above matters to June 2, 2016.

I. Defendants CSC and Servicemesh’s motion to dismiss for forum non conveniens is DENIED.

“A defendant, on or before the last day of his or her time to plead or within any further time that the court may for good cause allow, may serve and file a notice of motion … [t]o stay or dismiss the action on the ground of inconvenient forum.” (Code Civ. Proc., §418.10, subd. (a)(2).) “When a court upon motion of a party or its own motion finds that in the interest of substantial justice an action should be heard in a forum outside this state, the court shall stay or dismiss the action in whole or in part on any conditions that may be just.” (Code Civ. Proc., §410.30, subd. (a).)

As a preliminary matter, the court considers where the burden of proof lies. The court notes that, “[o]n a motion for forum non conveniens, the defendant, as the moving party, bears the burden of proof.” (Stangvik v. Shiley Inc. (1991) 54 Cal.3d 744, 751; see also Cal-State Business Products & Services, Inc. v. Ricoh (1993) 12 Cal.App.4th 1666, 1675 (Ricoh)—“The defendant bears the burden of proof in attempting to override the plaintiff’s choice of forum.”) Once the defendant meets that initial burden, “the party opposing the enforcement of a forum-selection clause (generally the plaintiff) bears the burden of proof. [Citation.]” (Ricoh, supra, 12 Cal.App.4th at p. 1680.)

Here, defendants’ motion to dismiss is based upon the assertion of a forum selection clause. “Although not even a ‘mandatory’ forum selection clause can completely eliminate a court’s discretion to make appropriate rulings regarding choice of forum, the modern trend is to enforce mandatory forum selection clauses unless they are unfair or unreasonable. [Citations.] In California, the procedure for enforcing a forum selection clause is a motion to stay or dismiss for forum non conveniens pursuant to Code of Civil Procedure sections 410.30 and 418.10 [citation], but a motion based on a forum selection clause is a special type of forum non conveniens motion. The factors that apply generally to a forum non conveniens motion do not control in a case involving a mandatory forum selection clause. [Citations.]” (Berg v. MTC Electronics Technologies (1998) 61 Cal.App.4th 349, 358 (Berg).)

“If there is no mandatory forum selection clause, a forum non conveniens motion ‘requires the weighing of a gamut of factors of public and private convenience ….’ [Citation.] However if there is a mandatory forum selection clause, the test is simply whether application of the clause is unfair or unreasonable, and the clause is usually given effect. Claims that the previously chosen forum is unfair or inconvenient are generally rejected. [Citation.] A court will usually honor a mandatory forum selection clause without extensive analysis of factors relating to convenience. [Citation.]” (Berg, supra, 61 Cal.App.4th at pp. 358-59.)

Defendants contend this action is subject to a forum selection clause found in several written agreements signed by plaintiff Douglass. Defendants point first to the Incentive Stock Option Agreement (“Option Agreement”) which incorporates the terms and conditions of the Servicemesh Inc. 2011 Equity Incentive Plan (“Equity Plan”). (See Exhs. A – B of the Declaration of William L. Deckelman, Jr. in Support, etc. (“Declaration Deckelman”).)

Section 4(q) of the Equity Plan states, in relevant part, “Unless otherwise provided in the Award Agreement, recipients of an Award under the Plan are deemed to submit to the exclusive jurisdiction and venue of the federal or state courts of Delaware to resolve any and all issues that may arise out of or relate to the Plan or any related Award Agreement.”

When defendant CSC purchased defendant Servicemesh, they entered into an Equity Purchase Agreement (“EPA”) which included the following relevant provision, “All litigation relating to or arising under or in connection with this Agreement or any of the Related Agreements shall be brought in a United Stated District Court or a state court located in the State of Delaware, which shall have exclusive jurisdiction to resolve any disputes related to or arising under this Agreement or the Related Agreements, with each party irrevocably consenting to the jurisdiction thereof for any actions, suits or proceedings arising out of or relating this Agreement or the Related Agreements.” (See Exh. C to the Declaration Deckelman.)

The term “Related Agreements” is defined by the EPA to include “the Escrow Agreement, the FIRPTA Certification, the IRS Notice, the Purchase Right Termination Agreement, Retention Agreements, Non-Disclosure and Non-Solicitation Agreements, Letters of Transmittal and the Stockholder Addendums.” (See Exh. C to the Declaration Deckelman.) “Retention Agreement” is defined by the EPA to have the meaning set forth in Section 8.2(n) which, in turn, states, in relevant part, “Each employee of [Servicemesh, including plaintiff Douglass] shall (i) have delivered an executed retention agreement, substantially in the form of Exhibit H, providing for the grant of certain restricted stock units with a grant date of the Closing Date (each, a “Retention Agreement”), but with the terms particular to such individual, to [CSC] and (ii) shall not have given [Servicemesh] notice of their intent to terminate their employment with [Servicemesh].” (See Exh. C to the Declaration Deckelman.)

Defendants also direct the court to a Letter of Transmittal signed by plaintiff wherein it states, “All litigation arising under of in connection with this Letter of Transmittal, the Purchase Agreement or any of the Related Agreements shall be brought only in a United Stated District Court or a state court located in the state of Delaware, which shall have exclusive jurisdiction to resolve any disputes relating or arising under this Letter of Transmittal, the Purchase Agreement or any of the Related Agreements, with each Party irrevocably consenting to the exclusive jurisdiction thereof for any actions, suits or proceedings arising out of or relating to this Letter of Transmittal, the Purchase Agreement or any of the Related Agreements.” (See Exh. D to the Declaration Deckelman.)

Defendants contend this court should give effect to the contractually agreed upon mandatory forum selection clauses identified above. Although defendants include a copy of the Retention Agreement in connection with their motion to dismiss, defendants (significantly) do not refer to the forum selection clause from the Retention Agreement.

In opposition, plaintiff Douglass points out a conflict between the (mandatory) forum selection clauses identified above and the (non-mandatory) forum selection clause found in the Retention Agreement. The Retention Agreement states, in relevant part, “Any party bringing a legal action or proceeding against any other party arising out of or relating to this Agreement may bring the legal action or proceeding in the United States District Court for the Eastern District of Virginia, Alexandria Division or in any court of the Commonwealth of Virginia, sitting in Fairfax County.” (See Exh. E to the Declaration Deckelman; emphasis added.) Furthermore, the Retention Agreement states, in part, “Each party to this Agreement submits to the nonexclusive jurisdiction of the courts specified [in the forum selection clause]… .” (Id.; emphasis added.)

By defendants’ own admission, the Retention Agreement includes an integration clause which states, “This Agreement (along with the RSU Award Agreement and the Employment Documents that you are required to sign on the Transaction Closing Date) sets forth the entire understanding of you and [CSC] with regard to the RSU Retention Grant, and supersedes all prior agreements and communications, whether oral or written, between you and [CSC] or its affiliates with respect thereto.” (Id.)

The Retention Agreement submitted by defendants is dated November 12, 2013 and would appear to be the last signed agreement in the group of agreements submitted by the defendants. As such, the Retention Agreement, by its own terms, “supersedes all prior agreements and communications.” Consequently, defendants have not met their burden of demonstrating the existence of a binding mandatory forum selection clause. Defendants’ motion to dismiss for forum non conveniens is DENIED.

II. Defendants CSC and Servicemesh’s demurrer is SUSTAINED, in part, and OVERRULED, in part.

A. Defendants CSC and Servicemesh’s demurrer to the first cause of action [breach of oral contract] is OVERRULED.

“The statement of a cause of action for breach of contract requires a pleading of (a) the contract; (b) plaintiff’s performance or excuse for nonperformance; (c) defendant’s breach; and (d) damage to plaintiff.” (4 Witkin, California Procedure (4th ed. 1997) Pleading, §482, p. 574; Roth v. Malson (1998) 67 Cal.App.4th 552, 557.) Here, plaintiff Douglass alleges Defendants CSC and Servicemesh and their “representatives reiterated and assured Plaintiff that they would make Plaintiff whole on his canceled stock options and that post-closing of the acquisition that CSC would provide additional compensation and/or restricted stock units in exchange for plaintiff agreeing to execute certain closing documents including a release of defendants.” (FAC, ¶36.)

Defendant CSC [alone] demurs by arguing that neither it nor its representatives made any such promise(s) or assurance(s). According to defendant CSC, the alleged promises were made by defendant Servicemesh’s CEO, Pulier, and are not binding upon CSC. Defendant CSC contends generic allegations of agency are insufficient (see Moore v. Regents of University of California (1990) 51 Cal.3d 120, 134, fn. 12) and more specificity is required.

At paragraph 22 of the FAC, plaintiff Douglass alleges, in relevant part, “Pulier stated that he was in communication with Sunita Holtzer (‘Holtzer’), Chief Human Resources Officer of CSC, about the executive compensation packages after the acquisition and that he would insure that plaintiff received compensation comparable to the value of the approximately 450,000 shares in the Company that were being eliminated in the acquisition. As Pulier announced he would continue to lead the Company after the acquisition, and knowing from the closing documents that CSC would assume all liabilities of the Company after the transaction, it was apparent to plaintiff that Pulier had both ostensible and actual authority to commit the Company and CSC to insure plaintiff was given compensation after the closing to compensate for the loss of his options and the change of control agreement. In addition, plaintiff was in contact with Dan Hushon, the CTO of CSC, who advised plaintiff he and CSC were aware of the amount of lost equity that Pulier promised to make up and that Hushon expected CSC to offer plaintiff compensation to include that lost equity.”

Defendant CSC acknowledges these allegations asserting ostensible agency, but contend they are nevertheless insufficient to bind CSC for promises made by Pulier. Defendant CSC relies on J.L. v. Children’s Institute, Inc. (2009) 177 Cal.App.4th 388, 403 – 404 (J.L.) where the court wrote:

“An agent is one who represents another, called the principal, in dealings with third persons.” (Civ.Code, § 2295.) “In California agency is either actual or ostensible. (Civ.Code, § 2298.) An agency is actual when the agent is really employed by the principal. (Civ.Code, § 2299.) An agency is ostensible when a principal causes a third person to believe another to be his agent, who is really not employed by him. (Civ.Code, § 2300.) [¶] An agent has the authority that the principal, actually or ostensibly, confers upon him. (Civ.Code, § 2315.)…. Ostensible authority … is the authority of the agent which the principal causes or allows a third person to believe that the agent possesses. (Civ.Code, § 2317.)” (Van Den Eikhof v. Hocker (1978) 87 Cal.App.3d 900, 905, 151 Cal.Rptr. 456.)

Before recovery can be had against the principal for the acts of an ostensible agent, three requirements must be met: The person dealing with an agent must do so with a reasonable belief in the agent’s authority, such belief must be generated by some act or neglect by the principal sought to be charged and the person relying on the agent’s apparent authority must not be negligent in holding that belief. (Associated Creditors’ Agency v. Davis (1975) 13 Cal.3d 374, 399, 118 Cal.Rptr. 772, 530 P.2d 1084; Hill v. Citizens Nat. Trust & Sav. Bk. (1937) 9 Cal.2d 172, 175–176, 69 P.2d 853.) Ostensible agency cannot be established by the representations or conduct of the purported agent; the statements or acts of the principal must be such as to cause the belief the agency exists. (Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1438, fn. 11, 29 Cal.Rptr.2d 746; Lee v. Helmco, Inc. (1962) 199 Cal.App.2d 820, 834, 19 Cal.Rptr. 413.) “ ‘Liability of the principal for the acts of an ostensible agent rests on the doctrine of “estoppel,” the essential elements of which are representations made by the principal, justifiable reliance by a third party, and a change of position from such reliance resulting in injury. [Citation.]’ [Citation.]” (Kaplan v. Coldwell Banker Residential Affiliates, Inc. (1997) 59 Cal.App.4th 741, 747, 69 Cal.Rptr.2d 640.)

Defendant CSC acknowledges the sentence in paragraph 22 of the FAC where plaintiff Douglass alleges, “In addition, plaintiff was in contact with Dan Hushon, the CTO of CSC, who advised plaintiff he and CSC were aware of the amount of lost equity that Pulier promised to make up and that Hushon expected CSC to offer plaintiff compensation to include that lost equity.” Defendant CSC contends this single statement is insufficient because it does not constitute a promise or offer of any kind. Defendant CSC misunderstands the significance of this allegation. Plaintiff Douglass does not rely on any promise made by Hushon. Instead, the fact is asserted as an act of affirmance or ratification of Pulier’s statements. It is this court’s opinion that the allegations are sufficient to allege Pulier acted as an ostensible agent of CSC.

As stated in J.L., there are three requirements in order to successfully assert ostensible agency. “The person dealing with an agent must do so with a reasonable belief in the agent’s authority, such belief must be generated by some act or neglect by the principal sought to be charged and the person relying on the agent’s apparent authority must not be negligent in holding that belief.” (J.L., supra, 177 Cal.App.4th at pp. 403 – 404.) Defendant CSC argues further that plaintiff Douglass could not hold a reasonable belief in Pulier’s authority and/or acted negligently in doing so because Pulier and CSC stood on opposite sides of a transaction. Defendant CSC contends it would be unreasonable, under such circumstances, for plaintiff Douglass to believe that Pulier had any authority to bind CSC.

However, this issue cannot be decided on a demurrer. An agent’s ostensible “authority may be proved by circumstantial evidence [citations]; and it may likewise be implied from circumstances [citations].” (Gaine v. Austin (1943) 58 Cal.App.2d 250, 261.) “Whether ostensible agency exists ‘… is a question of fact.’ ” (Kaplan v. Coldwell Banker Residential Affiliates, Inc. (1997) 59 Cal.App.4th 741, 748; House Grain Co. v. Finerman & Sons (1953) 116 Cal.App.2d 485, 492 [question of ostensible agency is “one of fact”].)

Next, defendant Servicemesh [alone] contends plaintiff Douglass has not sufficiently alleged what consideration he would receive from defendant Servicemesh. Where the contract is written, consideration is presumed. (See Civ. Code, §1614—“A written instrument is presumptive evidence of a consideration.”) However, the statutory presumption of consideration does not apply to an oral contract. “In an action on an oral agreement, the essential element of consideration must normally be alleged.” (See 4 Witkin, California Procedure (5th ed. 2010) Pleading, §525 citing Acheson v. Western Union Tel. Co. (1892) 96 Cal. 641, 644.) Defendant Servicemesh points to the allegation at paragraph 36 where it is alleged, “post-closing of the acquisition, … CSC would provide additional compensation and/or restricted stock units in exchange for plaintiff agreeing to execute certain closing documents including a release of defendants.” (FAC, ¶36.) The consideration being offered by Servicemesh [additional compensation and/or restricted stock units, presumably from CSC] is of post-acquisition property. Defendant Servicemesh cites no authority, and this court is aware of none, that a company cannot offer consideration that it will obtain in the future or consideration (belonging to another [CSC]) if acting as an agent for the other.

Next, defendants CSC and Servicemesh argue plaintiff has not, himself, alleged adequate consideration. Defendants CSC and Servicemesh point again to paragraph 36, but fail to discuss the allegation that plaintiff agreed to “execute certain closing documents including a release of defendants.” Although the FAC does not explicitly identify what the “certain closing documents” are, defendants contend the closing document is the Equity Purchase Agreement. Defendants CSC and Servicemesh continue by arguing that the alleged oral promise here is a modification of the Equity Purchase Agreement and the modification is unsupported by additional compensation. (Civ. Code, § 1698—“Unless the contract otherwise expressly provides, a contract in writing may be modified by an oral agreement supported by new consideration.”) However, defendants’ assumption that the oral promise is a modification of the Equity Purchase Agreement is not supported by the allegations of the FAC. The only closing document specifically referenced in the FAC is a “280G disclosure document.” (See FAC, ¶20 – 22.)

Finally, defendants argue the alleged promise from Pulier of a “ ‘big offer’ from CSC … to make up for the loss” (see FAC, ¶21) is not sufficiently definite to be enforceable.

“Under California law, a contract will be enforced if it is sufficiently definite (and this is a question of law) for the court to ascertain the parties’ obligations and to determine whether those obligations have been performed or breached.” [Citation.] “To be enforceable, a promise must be definite enough that a court can determine the scope of the duty[,] and the limits of performance must be sufficiently defined to provide a rational basis for the assessment of damages.” [Citations.] “Where a contract is so uncertain and indefinite that the intention of the parties in material particulars cannot be ascertained, the contract is void and unenforceable.” [Citations.] “The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy.” [Citations.] But “[i]f … a supposed ‘contract’ does not provide a basis for determining what obligations the parties have agreed to, and hence does not make possible a determination of whether those agreed obligations have been breached, there is no contract.” [Citation.]

(Bustamante v. Intuit, Inc. (2006) 141 Cal.App.4th 199, 209.)

The court cannot state, as a matter of law, that the promise of a “big offer,” sufficient to counter the loss of plaintiff’s options is too indefinite to enforce. (See Moncada v. West Coast Quartz Corp. (2013) 221 Cal.App.4th 768—where court found sufficiently definite a promise that plaintiffs would be paid a bonus that would be sufficient for them to retire.”)

For the above stated reasons, defendants CSC and Servicemesh’s demurrer to the first cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for breach of oral contract is OVERRULED.

B. Defendants CSC and Servicemesh’s demurrer to the third cause of action [breach of implied covenant of good faith and fair dealing] is OVERRULED.

“Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement.” (Rest.2d Contracts, §205.) “There is an implied covenant of good faith and fair dealing in every contract that neither party will do anything which will injure the right of the other to receive the benefits of the agreement.” (Comunale v. Traders & General Ins. Co. (1958) 50 Cal.2d 654, 658; see also CACI, No. 325.) However, there can be no implied covenant without an underlying contract. (See Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 36—“Absent that contractual right, however, the implied covenant has nothing upon which to act as a supplement, and ‘should not be endowed with an existence independent of its contractual underpinnings.’ [Citation.]”)

Defendants CSC and Servicemesh demur to the breach of implied covenant third cause of action by arguing that it is derivative of the first cause of action and since the first cause of action fails, so too does the third cause of action. However, in light of the ruling above, defendants CSC and Servicemesh’s demurrer to the third cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for breach of implied covenant of good faith and fair dealing is OVERRULED.

C. Defendants CSC and Servicemesh’s demurrer to the second cause of action [promissory estoppel] is OVERRULED.

“The required elements for promissory estoppel in California are … (1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) his reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance.” (Laks v. Coast Fed. Sav. & Loan Assn. (1976) 60 Cal.App.3d 885, 890; see also US Ecology, Inc. v. State of California (2005) 129 Cal.App.4th 887, 903.)

Defendants CSC and Servicemesh incorporate their earlier arguments concerning ostensible agency and indefiniteness. For the reasons stated above, the court is not persuaded by those arguments.

Defendants CSC and Servicemesh demur additionally by arguing that plaintiff does not adequately allege detrimental reliance or causation. Defendants acknowledge the allegation that plaintiff executed documents which cancelled his Servicemesh stock options, but argue that such reliance was unreasonable because the Servicemesh Equity Plan gives Servicemesh the right to cancel plaintiff’s unvested stock options without consideration and without consent upon a change of control. Defendants’ argument overlooks the allegation that plaintiff not only executed documents which cancelled his stock options, but also alleges he executed “documents including a release of defendants.” (FAC, ¶36.) Defendants do not point to any allegations or judicially noticeable facts which would demonstrate plaintiff’s detrimental reliance (release of defendants’ liability) is unreasonable.

Accordingly, defendants CSC and Servicemesh’s demurrer to the second cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for promissory estoppel is OVERRULED.

D. Defendants CSC and Servicemesh’s demurrer to the fourth cause of action [intentional misrepresentation] is OVERRULED.

“The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638 (Lazar); see also Philipson & Simon v. Gulsvig (2007) 154 Cal.App.4th 347, 363.) “Fraud actions are subject to strict requirements of particularity in pleading. … Accordingly, the rule is everywhere followed that fraud must be specifically pleaded.” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216.) “The pleading should be sufficient to enable the court to determine whether, on the facts pleaded, there is any foundation, prima facie at least, for the charge of fraud.” (Commonwealth Mortgage Assurance Co. v. Superior Court (1989) 211 Cal.App.3d 508, 518.) The Lazar court did not comment on how these particular allegations met the requirement of pleading with specificity in a fraud action, but the court did say that “this particularity requirement necessitates pleading facts which ‘show how, when, where, to whom, and by what means the representations were tendered.’ A plaintiff’s burden in asserting a claim against a corporate employer is even greater. In such a case, the plaintiff must ‘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.” (Lazar, supra, 12 Cal.4th at p. 645.)

Defendants contend the FAC lacks sufficient particularity. Defendant CSC again repeats its argument regarding the agency allegations. For the reasons stated above, the court finds the agency allegations sufficient. Defendants also contend the allegations concerning knowledge of falsity are insufficient. “Intent, like knowledge, is a fact. Hence, the averment that the representation was made with the intent to deceive the plaintiff, or any other general allegation with similar purport, is sufficient.” (5 Witkin, California Procedure (4th ed. 1997) Pleading, §684, p. 143.) Defendants’ arguments concerning the reasonableness of plaintiffs’ reliance are also addressed above. Finally, defendants contend plaintiff has not alleged damage with enough particularity and apparently assert plaintiff has not suffered any damage because he was paid like every other shareholder. This assertion of extrinsic fact is not proper on demurrer.

Accordingly, defendants CSC and Servicemesh’s demurrer to the fourth cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for intentional misrepresentation is OVERRULED.

E. Defendants CSC and Servicemesh’s demurrer to the fifth cause of action [negligent misrepresentation] is SUSTAINED.

There cannot be, as a matter of law, a negligent promise to perform a future event. In Tarmann v. State Farm Mutual Automobile Ins. Co. (1991) 2 Cal.App.4th 153, 159, the court explained, “To maintain an action for deceit based on a false promise, one must specifically allege and prove, among other things, that the promisor did not intend to perform at the time he or she made the promise and that it was intended to deceive or induce the promisee to do or not do a particular thing. [Citations.] Given this requirement, an action based on a false promise is simply a type of intentional misrepresentation, i.e., actual fraud. [Footnote.] The specific intent requirement also precludes pleading a false promise claim as a negligent misrepresentation, i.e., ‘The assertion, as a fact, of that which is not true, by one who has no reasonable ground for believing it to be true.’ [Citation.] Simply put, making a promise with an honest but unreasonable intent to perform is wholly different from making one with no intent to perform and, therefore, does not constitute a false promise. Moreover, we decline to establish a new type of actionable deceit: the negligent false promise.”

Here, plaintiff has alleged various false promises of future performance. Such promises can only be intentional. Accordingly, defendants CSC and Servicemesh’s demurrer to the fifth cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for negligent misrepresentation is SUSTAINED WITHOUT LEAVE TO AMEND.

F. Defendants CSC and Servicemesh’s demurrer to the sixth cause of action [unfair business practices] is OVERRULED.

“Business and Professions Code section 17200 et seq. prohibits unfair competition, including unlawful, unfair, and fraudulent business acts. The UCL covers a wide range of conduct. It embraces anything that can properly be called a business practice and that at the same time is forbidden by law.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1143 (Korea).) “The UCL covers a wide range of conduct. It embraces anything that can properly be called a business practice and that at the same time is forbidden by law.” (Korea, supra, 29 Cal.4th at p. 1143.) “Section 17200 ‘borrows’ violations from other laws by making them independently actionable as unfair competitive practices. In addition, under section 17200, a practice may be deemed unfair even if not specifically proscribed by some other law.” (Id.) “By proscribing unlawful business practices, the UCL borrows violations of other laws and treats them as independently actionable. In addition, practices may be deemed unfair or deceptive even if not proscribed by some other law. Thus, there are three varieties of unfair competition: practices which are unlawful, or unfair, or fraudulent.” (Blakemore v. Superior Court (2005) 129 Cal.App.4th 36, 48.)

In demurring, defendants argue plaintiff Douglass has not sufficiently asserted a claim for unlawful or unfair business practices. However, a violation of Business and Professions Code section 17200 can also be predicated on fraudulent conduct. Defendants have not demonstrated how the sixth cause of action fails to state a claim under the fraudulent prong of Business and Professions Code section 17200.

Accordingly, defendants CSC and Servicemesh’s demurrer to the sixth cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for unfair business practices is OVERRULED.

G. Defendants CSC and Servicemesh’s demurrer to the seventh and eighth causes of action [unjust enrichment/ restitution] is OVERRULED.

In Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th 779, 793, the court wrote, “[T]here is no cause of action in California for unjust enrichment. “The phrase ‘Unjust Enrichment’ does not describe a theory of recovery, but an effect: the result of a failure to make restitution under circumstances where it is equitable to do so.” [Citations.] Unjust enrichment is “‘a general principle, underlying various legal doctrines and remedies,’ ” rather than a remedy itself. [Citation.] It is synonymous with restitution.”

In McBride v. Houghton (2004) 123 Cal.App.4th 379 (McBride), the court wrote, “Unjust enrichment is not a cause of action, however, or even a remedy, but rather a general principle, underlying various legal doctrines and remedies. It is synonymous with restitution. Unjust enrichment has also been characterized as describing the result of a failure to make restitution. [¶] In reviewing a judgment of dismissal following the sustaining of a general demurrer, we ignore erroneous or confusing labels if the complaint pleads facts which would entitle the plaintiff to relief. Thus, we must look to the actual gravamen of [plaintiff’s] complaint to determine what cause of action, if any, he stated, or could have stated if given leave to amend. In accordance with this principle, we construe [plaintiff’s] purported cause of action for unjust enrichment as an attempt to plead a cause of action giving rise to a right to restitution.”

There are several potential bases for a cause of action seeking restitution. For example, restitution may be awarded in lieu of breach of contract damages when the parties had an express contract, but it was procured by fraud or is unenforceable or ineffective for some reason. [Citations.] Alternatively, restitution may be awarded where the defendant obtained a benefit from the plaintiff by fraud, duress, conversion, or similar conduct. In such cases, the plaintiff may choose not to sue in tort, but instead to seek restitution on a quasi-contract theory (an election referred to at common law as “waiving the tort and suing in assumpsit”). [Citation.] In such cases, where appropriate, the law will imply a contract (or rather, a quasi-contract), without regard to the parties’ intent, in order to avoid unjust enrichment. [Citation.]

(McBride, supra, 123 Cal.App.4th at pp. 387 – 388; internal citations and punctuation omitted.)

Significantly, “there is no particular form of pleading necessary to invoke the doctrine of restitution.” (Dinosaur Development, Inc. v. White (1989) 216 Cal.App.3d 1310, 1315 [internal quotation marks omitted].) As the McBride court instructs, the court should overlook the labels given by the plaintiff and instead focus on whether there is a basis for restitution.

In light of the rulings above, plaintiff has stated claims which would support a basis for restitution. Accordingly, defendants CSC and Servicemesh’s demurrer to the seventh and eighth causes of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for unjust enrichment and restitution, respectively, is OVERRULED.

H. Defendants CSC and Servicemesh’s demurrer to the ninth cause of action [wrongful termination/ retaliation] is OVERRULED.

In demurring to the ninth cause of action, defendants contend there exists no common law claim for retaliation and any such claim must be statutorily based. Defendants go on to cite Searcy v. Hemet Unified School Dist. (1986) 177 Cal.App.3d 792 (Searcy) for the proposition that where a claim is based on a statutory duty, the plaintiff must identify the statute. However, Searcy involved governmental tort liability. Defendants’ reliance on Searcy is misplaced since this case does not involve governmental or public entity liability. “[T]o state a cause of action against a public entity, every fact material to the existence of its statutory liability must be pleaded with particularity.” (Peter W. v. San Francisco Unified School District (1976) 60 Cal.App.3d 814, 819.) “In order to state a cause of action for government tort liability, ‘every fact essential to the existence of statutory liability must be pleaded with particularity, including the existence of a statutory duty. [Citation.] Duty cannot be alleged simply by stating, ‘defendant had a duty under the law’; that is a conclusion of law, not an allegation of fact. The facts showing the existence of the claimed duty must be alleged. [Citations.] Since the duty of a governmental agency can only be created by statute or ‘enactment,’ the statute or ‘enactment’ claimed to establish the duty must at the very least be identified.’ [Citation.]” (Zuniga v. Housing Authority of the City of Los Angeles (1995) 41 Cal.App.4th 82, 96.)

Accordingly, defendants CSC and Servicemesh’s demurrer to the ninth cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for wrongful termination/ retaliation is OVERRULED.

I. Defendants CSC and Servicemesh’s demurrer to the tenth cause of action [failure to pay wages] is OVERRULED.

Defendants argue simply that since plaintiff’s contract claims fail, so too does plaintiff’s claim for lost wages. In light of the rulings above, defendants CSC and Servicemesh’s demurrer to the tenth cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for failure to pay wages is OVERRULED.

J. Defendants CSC and Servicemesh’s demurrer to the eleventh cause of action [declaratory relief] is OVERRULED.

Defendants demur to the declaratory relief eleventh cause of action on the basis that plaintiff seeks relief which directly contradict the express terms of the forum selection clause found in the Letter of Transmittal. For the same reasons discussed above in Section I, the court does not find defendants’ argument persuasive.

Accordingly, defendants CSC and Servicemesh’s demurrer to the eleventh cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for declaratory relief is OVERRULED.

III. Defendant Drake’s motion to dismiss for forum non conveniens is DENIED.

For the same reasons discussed above, defendant Drake’s motion to dismiss for forum non conveniens is DENIED.

IV. Defendant Drake’s demurrer is SUSTAINED, in part, and OVERRULED, in part.

A. Defendant Drake’s demurrer to the fourth cause of action [intentional misrepresentation] is OVERRULED.

Defendant Drake separately demurs to the fourth cause of action by arguing that the FAC does not plead with particularity any false representations by Drake. However, Drake acknowledges the allegation at paragraph 21 where it is stated, “Drake repeated Pulier’s statements about receiving an offer from CSC that would compensate him for his lost options.” This allegation is sufficient to incorporate the same misrepresentations attributed to Pulier in the same paragraph. Drake further argues the allegation lacks particularity concerning when, where, or how it was made. Lazar does not require an allegation of where a fraudulent statement was made. As to when, paragraphs 20 and 21, read in conjunction, state the representations were made early on the morning of October 28, 2013. As to how, a reasonable inference from the word “repeated,” is that they were directly spoken to plaintiff.

The balance of defendant Drake’s arguments are essentially the same as those advanced by defendants CSC and Servicemesh. For the reasons previously stated, defendant Drake’s demurrer to the fourth cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for intentional misrepresentation is OVERRULED.

B. Defendant Drake’s demurrer to the fifth cause of action [negligent misrepresentation] is SUSTAINED.

For the same reason stated above in connection with defendants CSC and Servicemesh’s demurrer to the fifth cause of action, defendant Drake’s demurrer to the fifth cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for negligent misrepresentation is SUSTAINED WITHOUT LEAVE TO AMEND.

C. Defendant Drake’s demurrer to the sixth cause of action [unfair business practices] is OVERRULED.

For the same reasons stated above in connection with defendants CSC and Servicemesh’s demurrer to the sixth cause of action, defendant Drake’s demurrer to the sixth cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for unfair business practices is OVERRULED.

D. Defendant Drake’s demurrer to the seventh and eighth causes of action [unjust enrichment/ restitution] is OVERRULED.

For the same reasons stated above in connection with defendants CSC and Servicemesh’s demurrer to the seventh and eighth causes of action, defendant Drake’s demurrer to the seventh and eighth causes of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for unjust enrichment and restitution, respectively, is OVERRULED.

V. Defendant Boutros-Ghali’s joinder to the motions to dismiss for forum non conveniens is DENIED.

For the same reasons discussed above, defendant Boutros-Ghali’s joinder in the motions to dismiss for forum non conveniens is DENIED.

VI. Defendant Boutros-Ghali’s demurrer is SUSTAINED.

Defendant Boutros-Ghali demurs to the fourth through eighth causes of action directed at him on the basis that, essentially, there are no allegations that he made any fraudulent statements and all the causes of action directed against him are predicated on the existence of such an allegation. Unlike defendant Drake, plaintiff can point to no allegation that defendant Boutros-Ghali repeated Pulier’s representations.

In opposition, plaintiff can point only to paragraph 18 where it is alleged that defendant Boutros-Ghali “excluded Plaintiff [from the CSC acquisition process] knowing that [Servicemesh] was going to cancel the stock option plan and redistribute to Pulier, Drake and Boutros-Ghali the millions of dollars saved from the cancellation of Plaintiff’s stock.” Plaintiff also points to paragraph 27 where it is alleged defendant Boutros-Ghali “warned Plaintiff that if Plaintiff did not sign the closing documents or blocked the deal in any way, Plaintiff would be terminated by Pulier and left with nothing prior to closing.”

Plaintiff tacitly admits these statements do not allege fraud by defendant Boutros-Ghali. Instead, plaintiff Douglass alludes to a “scheme” or “common plan” of fraud by Servicemesh officers, including defendant Boutros-Ghali. To the extent plaintiff Douglass is attempting to argue a conspiracy by defendant Boutros-Ghali with others, he has not adequately alleged conspiracy.

Accordingly, defendant Boutros-Ghali’s demurrer to the fourth and sixth through eighth causes of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] is SUSTAINED with 10 days’ leave to amend. For the same reasons stated above, defendant Boutros-Ghali’s demurrer to the fifth cause of action in plaintiff Douglass’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for negligent misrepresentation is SUSTAINED WITHOUT LEAVE TO AMEND.