Case Name: Vinh Duc Nguyen, et al. v. Peter Pau, et al.

Case No.: 16CV302578

Motion for Summary Adjudication

Factual and Procedural Background

Plaintiff Vinh Duc Nguyen aka Vince D. Nguyen, individually and doing business as Newton Law Group (“Nguyen”), is a licensed California real estate broker. (Second Amended Complaint (“SAC”), ¶2.) In July 2011, plaintiff Nguyen and his wife, Teri Ha (“Ha”), entered into discussions with the principals of Vallco Shopping Mall, LLC (“VSM”), owners of real property known as the Vallco Fashion Mall located at 10123 North Wolfe Road in Cupertino (“Subject Property”), to exclusively represent VSM in connection with the sale of the Subject Property. (SAC, ¶¶7 – 8.)

On or about August 2, 2011, VSM and plaintiff Nguyen entered into an exclusive right to sell agreement entitled “Owner-Broker Agreement-Vallco Shopping Center” (“Listing Agreement”). (SAC, ¶9.) Pursuant to the Listing Agreement, VSM agreed plaintiff Nguyen would have the exclusive right to list and sell the Subject Property and procure a buyer to purchase the Subject Property with a minimum sale price of $100 million. (SAC, ¶10.) Specifically, VSM agreed that “[t]he first Buyer who submits the purchase contract, or a Letter of Intent to Seller, with proof of financial ability to buy the [Subject Property], together with a deposit amount earlier than the others has the right to buy the [Subject Property].” (Id.) Pursuant to the Listing Agreement, VSM agreed to pay plaintiff Nguyen and his associates a six percent (6%) commission based on the sale price, which also included the commission for the buyer’s broker. (Id.)

On August 9, 2011, plaintiff Nguyen entered into an agent/ sub-agent type agreement entitled “Broker Cooperation Agreement” with Marcus & Millichap (“M&M”) whereby plaintiff Nguyen agreed to pay a certain percentage of his commission to M&M in the event M&M was successful in assisting plaintiff Nguyen in procuring a buyer of the Subject Property. (SAC, ¶11.) M&M assigned Jeffrey John Taughinbaugh (“Taughinbaugh “) and Anh Stovall (“Stovall”) to work with plaintiff Nguyen. (Id.)

By the end of August 2011, M&M and plaintiff Nguyen obtained nine potential buyers each of whom executed a “Non-Circumvent Agreement” agreeing not to circumvent plaintiff Nguyen in purchasing the Subject Property. (SAC, ¶12.) On August 11, 2011, defendant Peter Pau (“Pau”), individually and doing business as Sand Hill Property Company, and Taughinbaugh executed a non-circumvent agreement (“NCA”) which repeatedly referenced Newton Law Group as one of the brokers for the owner of the Subject Property. (SAC, ¶15.) In the NCA, defendant Pau agreed that if he closed the purchase of the Subject Property, M&M and Newton Law Group would be “compensated the agreed upon fee in the Contract executed with the Owner on 8/2/2011.” (Id.) Defendant Pau also agreed that all negotiations would be conducted through M&M and acknowledged that defendant Pau “is not working with any other broker or agent in connection with the Property.” (Id.) Defendant Pau’s obligations under the NCA applied to a twelve month period beginning on the date of execution. (Id.)

Under the terms of the NCA, defendant Pau requested “Offering Materials” which M&M provided while assisting with negotiations. (SAC, ¶16.) Defendant Pau asked for additional information which plaintiff Nguyen provided along with assistance to defendant Pau. (Id.) Other people assisted plaintiff Nguyen in serving as VSM’s exclusive listing agent, including Ha, who is a licensed real estate agent; Tammy Pham (“Pham”), who worked for plaintiff Nguyen as an independent contractor; and Kham Tran (“Tran”), Ha’s cousin living in Vietnam. (SAC, ¶17.) Pursuant to VSM’s instructions, Ha and Pham contacted Mike Rohde (“Rohde”) for due diligence documents relating to the Subject Property, but Rohde did not cooperate. (Id.) In response to pressure from defendant Pau and other interested buyers for further due diligence documents, plaintiff Nguyen, Ha, Pham, and Stovall went to Vietnam to meet with VSM’s principals. (SAC, ¶18.)

On September 25, 2011, VSM’s principals insisted on being provided with the identities of the prospective buyers. (SAC, ¶19.) In reliance on his rights under the Listing Agreement, plaintiff Nguyen provided names of five potential buyers to VSM. (Id.) On September 26 – 27, 2011, plaintiff Nguyen, along with Ha, Tran, Pham, and Stovall, met with VSM’s principals in Saigon. (SAC, ¶20.) Among the VSM principals present were Be Tram, Cuu Nguyen (representing a silent but powerful partner), Ngan Tram (Be Tram’s son), and Hoa Tran (Be Tram’s younger son). (Id.) The VSM principals promised to have due diligence documents to plaintiff Nguyen within seven days and instructed plaintiff Nguyen to work directly with Cuu Nguyen in obtaining the due diligence documents. (Id.) After the meetings, VSM demanded information about the identities of the remaining potential buyers before releasing due diligence documents. (SAC, ¶21.)

On October 3, 2011, VSM requested plaintiff Nguyen release the remaining list of nine potential buyers and, in exchange, VSM would provide updated financial documents to plaintiff Nguyen. (SAC, ¶22.) Plaintiff Nguyen and his associates provided information regarding the remaining potential buyers, but VSM did not provide plaintiff Nguyen with updated financial documents. (Id.)

In the meantime, plaintiff Nguyen and M&M identified another potential buyer, Catalina Investment Company (aka The Irvine Company) (“Catalina”). (SAC, ¶23.) On or about October 17, 2011, Catalina signed a non-circumvent agreement with M&M and plaintiff Nguyen. (Id.)

On November 16, 2011, plaintiff Nguyen received a letter from Walter Merkle of Kay & Merkle (“Merkle”) claiming to represent VSM and purporting to terminate the Listing Agreement on the false basis that plaintiff Nguyen did not have a real estate broker’s license. (SAC, ¶24.) Plaintiff Nguyen reported this letter to Cuu Nguyen who assured plaintiff the letter was unauthorized. (Id.) Cuu Nguyen instructed plaintiff Nguyen to ignore the letter and continue working with VSM. (Id.) In reliance on Cuu Nguyen’s assurances coupled with the fact that VSM continued working with plaintiff Nguyen and his assistants, plaintiff Nguyen continued working on obtaining the sale of the Subject Property. (SAC, ¶25.)

At defendant Pau’s request, plaintiff Nguyen and M&M organized an international telephone conference call (“ITC”) for April 10, 2012 to allow Pau to speak directly with VSM members in Vietnam and confirm plaintiff as the listing agent because Pau had received communications from individuals unassociated with plaintiff who were soliciting Pau to purchase the Subject Property. (SAC, ¶26.) Before agreeing to participate in the ITC, defendant Pau demanded proof that the participants in the ITC were, in fact, authorized representatives of the owner of the Subject Property. (SAC, ¶27.) Stovall provided defendant Pau with business cards for the principals of VSM. (Id.) Plaintiff sent Pham to Vietnam to help set up the ITC and to translate during the ITC because VSM’s principals do not speak English. (SAC, ¶28.)

Before the scheduled ITC, defendant Pau induced Taughinbaugh to conditionally release Pau from the NCA by representing that “if the owners confirm to me that they have only authorized [M&M] to represent them and no other brokerage firm is involved, then I will work with you.” (SAC, ¶29.) Trusting Pau, Taughinbaugh conditionally released defendant Pau from the NCA without plaintiff Nguyen’s knowledge or authorization. (Id.) The ITC occurred on April 10, 2012 during which Be Tram confirmed VSM’s intent to sell the Subject Property and plaintiff Nguyen was the only agent with exclusive authority to sell the Subject Property on VSM’s behalf. (SAC, ¶¶30 – 31.) At the conclusion of the ITC, Pau expressed his satisfaction and stated his intent to prepare an offer to submit to M&M and plaintiff Nguyen to hand carry to Vietnam. (SAC, ¶31.) With Be Tram’s confirmation that plaintiff Nguyen (and sub-agent M&M) was the only listing agent, the terms of the conditional “release” were not met, thereby rendering it void. (SAC, ¶32.)

After the ITC, on April 27, 2012, Cuu Nguyen confirmed VSM would continue working with plaintiff Nguyen to complete the sale of the Subject Property to Pau and assured plaintiff would be entitled to the commission in the Listing Agreement. (SAC, ¶33.)

On May 15, 2012, defendant Pau represented to M&M that he would make an offer to purchase the Subject Property but needed more time to prepare the offer. (SAC, ¶34.) Without plaintiff Nguyen’s knowledge or involvement, defendant Pau hired his own broker, Efi Luzon, and involved his financial partner, Abu Dhabi Investment Authority (“ADIA”), to negotiate and finalize the purchase of the Subject Property directly with VSM in violation of the terms of the NCA. (SAC, ¶¶35 and 39.) In May 2012, VSM started dealing directly with Pau in circumventing plaintiff Nguyen as the listing agent. (SAC, ¶39.)

In or about May 2013, plaintiff learned that Pau had made an offer to buy the Subject Property directly from VSM and one of the conditions of the offer was a credit to Pau for the 6% commission VSM would save by not having to pay plaintiff and his associates. (SAC, ¶37.) Based upon this and other information, plaintiff Nguyen filed a complaint on May 6, 2013 against VSM for breach of contract and other causes of action in Santa Clara County Superior Court case number 1-13-CV-245854 (“Vallco Litigation”). (Id.)

To hide their wrongful acts from plaintiff Nguyen, Pau and ADIA formed one or more entities that would act as a mere shell, instrumentality, or conduit to purchase the Subject Property. (SAC, ¶40.) In June 2014, Pau formed Commercial Real Properties-CA 173 LLC (“CA 173 LLC”) to act as a straw buyer of the Subject Property. (Id.) In the same month, CA 173 LLC presented a letter of intent (“LOI”) to buy the Subject Property which Ngan Tram signed on behalf of VSM. (Id.) In July 2014, pursuant to the terms of the LOI between CA 173 LLC and VSM, ADIA deposited $116 million into escrow on behalf of CA 173 LLC. (SAC, ¶41.)

In or about October 2014, Pau or defendant Vallco Property Owner, LLC (“VPO”) purchased properties adjacent to the Subject Property for approximately $200 million. (SAC, ¶44.) Pau’s plan from the beginning was to purchase the Subject Property and adjacent properties in order to redevelop the entire Vallco Shopping District. (SAC, ¶¶44 – 45.)

As early as February 2012, before the ITC and during the non-circumvention period under Pau’s NCA with plaintiff and M&M, Pau opened escrow on the Subject Property. (SAC, ¶46.) Pau worked with M&M and plaintiff Nguyen in order to obtain contact with the owners of the Subject Property and deal with them directly. (Id.) After Be Tram learned of Pau’s identity as the potential buyer, he recruited plaintiff’s assistant to help carry out his scheme to deal directly with Pau to avoid payment of the commission to plaintiff and his associates. (SAC, ¶¶47 – 51.)

On July 3, 2012, Pau submitted an offer to buy the Subject Property directly to VSM. (SAC, ¶49.) For the two years that followed, Pau continued working with VSM. (SAC, ¶52.) When it appeared Pau’s master plan to purchase the entire Vallco Shopping District might collapse, Pau agreed to close the deal for a $116 million purchase price, no contingencies, and a quick closing. (Id.) The purchase and sale agreement was entered into on November 3, 2014 and the grant deed conveying the Subject Property to VPO was recorded on November 12, 2014. (SAC, ¶53.)

In the meantime, plaintiff joined Pau as a co-defendant in the Vallco Litigation. (SAC, ¶54.) Pau’s attorney aggressively sought Pau’s dismissal by filing a motion for sanctions. (Id.) In support of that motion, Pau made various false statements. (SAC, ¶¶56 – 59.) Trusting Pau would not lie under oath, plaintiff agreed to dismiss Pau from the Vallco Litigation without prejudice. (SAC, ¶55.)

On November 10, 2016, plaintiff Nguyen filed a complaint against Pau, individually and doing business as Sand Hill Property Company, Sand Hill Property Management, LLC, and VPO asserting causes of action for:

(1) Breach of Contract
(2) Breach of Implied Covenant of Good Faith and Fair Dealing
(3) Intentional Interference with Contractual Relations
(4) Intentional Interference with Prospective Economic Advantage
(5) Fraud-Deceit
(6) Violation of Business & Professions Code §17200, et seq.

On January 6, 2017, plaintiff Nguyen filed a first amended complaint (“FAC”) asserting the same six causes of action.

On March 30, 2017, defendants Pau, individually and doing business as Sand Hill Property Company (“SHPC”), Sand Hill Property Management, LLC, and VPO filed a demurrer to plaintiff Nguyen’s FAC.

On May 9, 2017, the court sustained, in part, and overruled, in part, the defendants’ demurrer to plaintiff Nguyen’s FAC.

On May 24, 2017, plaintiff Nguyen filed the operative SAC against Pau, individually and doing business as SHPC, and VPO. The SAC now asserts the following causes of action:

(1) Breach of Contract
(2) Breach of Implied Covenant of Good Faith and Fair Dealing
(3) Intentional Interference with Contractual Relations
(4) Intentional Interference with Prospective Economic Advantage
(5) Fraud-Deceit
(6) Quasi-Contract/ Unjust Enrichment
(7) Violation of Business & Professions Code §17200, et seq.
(8) Conspiracy to Commit Fraud, to Interfere with Contractual Relations and Interfere with Prospective Economic Advantage

On July 14, 2017, defendants Pau, individually and doing business as SHPC, and VPO filed an answer and a demurrer to the fifth and seventh causes of action in plaintiff Nguyen’s SAC. On September 26, 2017, the court issued an order overruling the demurrer to the fifth cause of action but sustaining, without leave to amend, the demurrer to the seventh cause of action.

On September 28, 2018, defendants Pau, individually and doing business as SHPC, and VPO filed the motion now before the court, a motion for summary adjudication of the first, second, third, fourth, and sixth causes of action in plaintiff Nguyen’s SAC.

I. Procedural violation.

As a preliminary matter, the court note that defendants Pau and VPO’s memorandum of points and authorities exceeds the page limitations. California Rules of Court, rule 3.1113, subdivision (d) states, in relevant part, “In a summary judgment or summary adjudication motion, no opening or responding memorandum may exceed 20 pages.” Defendants’ memorandum of points and authorities is 27 pages, exclusive of the table of contents and table of authorities. Defendants did not seek leave in advance from this court for a page extension as permitted by California Rules of Court, rule 3.1113, subdivision (e).

“A memorandum that exceeds the page limits of these rules must be filed and considered in the same manner as a late-filed paper.” (Cal. Rules of Court, rule 3.1113, subd. (g).) A court may, in its discretion, refuse to consider a late-filed paper but must indicate so in the minutes or in the order. (Cal. Rules of Court, rule 3.1300, subd. (d).) Defendants and their counsel are hereby admonished for this procedural violation. Any future failure by defendants to comply with the California Rules of Court or rules of Civil Procedure may result in the court’s refusal to consider defectively filed papers.

II. Defendants’ motion for summary adjudication of the first cause of action [breach of contract] in plaintiff Nguyen’s SAC is DENIED.

A. Party to the NCA/ Third Party Beneficiary.

Defendants move for summary adjudication of plaintiff Nguyen’s first cause of action for breach of the NCA by arguing, initially, that plaintiff Nguyen is not a party to the NCA. Normally, “someone who is not a party to [a] contract has no standing to enforce the contract or to recover extra-contract damages for wrongful withholding of benefits to the contracting party.” (Gantman v. United Pacific Ins. Co. (1991) 232 Cal.App.3d 1560, 1566.) Defendants proffer evidence that on or about August 11, 2011, Pau entered into a written “Confidentiality/ Registration Agreement” [NCA] with M&M. Nevertheless, defendants acknowledge plaintiff Nguyen’s allegation that he has standing to sue as a third party beneficiary to the NCA. (See SAC, ¶64.)

Civil Code section 1559 states, “A contract, made expressly for the benefit of a third person, may be enforced by him at any time before the parties thereto rescind it.” In other words, “A person who is not a party to a contract may nonetheless have certain rights thereunder, and may sue to enforce those rights, where the contract is made expressly for her benefit.” (Mercury Casualty Co. v. Maloney (2002) 113 Cal.App.4th 799, 802 (Mercury).) “[A] third party beneficiary’s rights under the contract are not based on the existence of an actual contractual relationship between the parties but on the law’s recognition that the acts of the contracting parties created a duty and established privity between the promisor and the third party beneficiary with respect to the obligation on which the action is founded.” (Mercury, supra, 113 Cal.App.4th at p. 802.)

A third party should not be permitted to enforce covenants made not for his benefit, but rather to others. He is not a contracting party; his right to performance is predicated on the contracting parties’ intent to benefit him. The circumstance that a literal contract interpretation would result in a benefit to the third party is not enough to entitle that party to demand enforcement. The contracting parties must have intended to confer a benefit on the third party. It is not necessary for the third party to be specifically named in the contract, but such a party bears the burden of proving that the promise he seeks to enforce was actually made to him personally or to a class of which he is a member. In making that determination, the court must read the contract as a whole in light of the circumstances under which it was entered.
…
The fact that the contract, if carried out to its terms, would inure to the third party’s benefit, is insufficient to entitle him or her to demand enforcement. [Citation.] However broad may be the terms of a contract, it extends only to those things concerning which it appears that the parties intended to contract. [Citation.] Whether a third party is an intended beneficiary to the contract involves construction of the parties’ intent, gleaned from reading the contract as a whole in light of the circumstances under which it was entered. [Citation.]
(Neverkovec v. Fredericks (1999) 74 Cal.App.4th 337, 348 – 349.)
In Prouty v. Gores Technology Group (2004) 121 Cal.App.4th 1225, 1233, the court held, “Generally, it is a question of fact whether a particular third person is an intended beneficiary of a contract. [Citation.] However, where, as here, the issue can be answered by interpreting the contract as a whole and doing so in light of the uncontradicted evidence of the circumstances and negotiations of the parties in making the contract, the issue becomes one of law that we resolve independently.” (Emphasis added.)

In moving for summary adjudication of the first cause of action, defendants contend plaintiff Nguyen is not a third party beneficiary as his name is not found anywhere in the NCA. Defendant Pau also declares that M&M was the only person/entity with home Pau intended to contract regarding the NCA. At the time that Pau entered into the NCA on August 10, 2011, Pau did not even know that plaintiff Nguyen existed, or that he claimed to have a brokerage connection to the Subject Property. Even so, the NCA, on its face, presents a question of fact whether a third person was an intended beneficiary. The NCA states, in part:

I, _____ of _____ hereby request receipt of the offering materials (the “Materials”) for the subject property, located in Cupertino, California (the “Property”), and acknowledge that the Materials are intended only for direct distribution to qualified potential purchasers by [M&M] and Newton Law Group (“Brokers”) on behalf of the Owner (“Owner”).

… [M&M] is authorized to represent Owner, through broker cooperation with Newton Law Group, for the purpose of effecting a sale of the Property, and all negotiations shall be conducted through [M&M] with the Purchaser. If Purchaser closes escrow on the Property in the next twelve (12) months, [M&M] and Newton Law Group will be compensated the agreed upon fee in the contract executed with the Owner on 8/2/2011 at the close of escrow.

… I agree that the Materials are for my information only and I … further agree to return the Materials to Brokers in the event I do not consummate a purchase of the Property by December 31, 2011.

(Emphasis added.)

The test for determining whether a contract was made for the benefit of a third person is whether an intent to benefit a third person appears from the terms of the contract. [Citation.] If the terms of the contract necessarily require the promisor to confer a benefit on a third person, then the contract, and hence the parties thereto, contemplate a benefit to the third person. The parties are presumed to intend the consequences of a performance of the contract.

(Johnson v. Holmes Tuttle Lincoln-Mercury, Inc. (1958) 160 Cal.App.2d 290, 297.)

Here, the very terms of the NCA require Pau, as promisor, to confer a benefit on not just M&M, but also on a third person, Newton Law Group, as the cooperating broker. This creates an evidentiary presumption that Pau intended to benefit Newton Law Group which conflicts with Pau’s declaration otherwise.

Defendants do not dispute plaintiff Nguyen’s allegation that he used Newton Law Group as a fictitious business name. Instead, defendants argue plaintiff Nguyen has never been authorized to conduct activities requiring a real estate broker’s license under the fictitious business name, Newton Law Group. Plaintiff Nguyen has registered several fictitious business names with the California Department of Real Estate, but has not registered Newton Law Group as one of those names. Defendants assert plaintiff Nguyen’s failure to register Newton Law Group as a fictitious business name would subject him to criminal prosecution. However, defendants cite no legal authority which would preclude plaintiff from enforcing the NCA as a third party beneficiary for failing to properly register his fictitious business name with the California Department of Real Estate.

B. Performance.

“To prevail on a cause of action for breach of contract, the plaintiff must prove (1) the contract, (2) the plaintiff’s performance of the contract or excuse for nonperformance, (3) the defendant’s breach, and (4) the resulting damage to the plaintiff.” (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186; emphasis added.) As a further basis for summary adjudication, defendants contend neither plaintiff Nguyen nor M&M performed their obligation under the NCA. According to defendants, the August 11, 2011 NCA obligated M&M to provide Pau with commercially reasonable, confidential documentation and information about the Subject Property (“offering materials”) no later than December 31, 2011. Despite Pau’s repeated requests, M&M never provided any such due diligence or offering materials to Pau, and plaintiff Nguyen admits that he didn’t either.

In opposition, plaintiff Nguyen contends the NCA does not create any obligation for either M&M or plaintiff to provide Pau with offering materials. As cited above, the NCA’s first paragraph is merely a request by Pau for said offering materials. On this point, the court agrees with plaintiff Nguyen’s assertion that the NCA does not impose any obligation on either M&M or Newton Law Group to actually provide offering materials. Thus, at the outset, defendants do not meet their initial burden with regard to this argument because defendants’ evidence does not substantiate their assertion that Newton Law Group and/or M&M had an obligation to perform.

C. Breach.

As a further basis for summary adjudication, defendant Pau argues he did not breach the NCA. According to the SAC, “Although Defendants promised in the agreement that Defendants would not deal with another broker within the 12-month period of the agreement, starting on May 8, 2012, or even before that date, pau started to work with agent Efi Luzon and ‘broker’ John Wynn on the purchase of the [Subject Property]. Utilizing Efi Luzon, Defendants conducted negotiations directly with the Mall owners in breach of the NCA provision that all negotiations be conducted through M&M. Through this wrongful conduct, Defendants breached the [NCA].” (SAC, ¶67.)

Defendant Pau proffers evidence that he did not work with Efi Luzon or John Wynn regarding the [Subject] Property any time before May 2012. However, in opposition, plaintiff Nguyen proffers evidence in opposition which conflicts. For instance, plaintiff Nguyen proffers evidence of an e-mail communication between Efi Luzon and Pau dated March 26, 2013 with the subject line, “Re: Vallco,” in which Efi Luzon states, in relevant part, “you have been involved in this with me for almost a year now and way before that ?” At the very least, this presents a triable issue of material fact.

D. Causation.

“An essential element of a claim for breach of contract are damages resulting from the breach. (Vu v. California Commerce Club, Inc. (1997) 58 Cal.App.4th 229, 233, 68 Cal.Rptr.2d 31.) Causation of damages in contract cases requires that the damages be proximately caused by the defendant’s breach. (Ibid; Civ.Code, §§ 3300, 3301.)” (St. Paul Fire and Marine Ins. Co. v. American Dynasty Surplus Lines Ins. Co. (2002) 101 Cal.App.4th 1038, 1060; italics original.) “‘The test for causation in a breach of contract … action is whether the breach was a substantial factor in causing the damages.’ [Citation.]” (Tribeca Companies, LLC v. First American Title Ins. Co. (2015) 239 Cal.App.4th 1088, 1103.) “[C]ausation also is ordinarily a question of fact which cannot be resolved by summary judgment. The issue of causation may be decided as a question of law only if, under undisputed facts, there is no room for a reasonable difference of opinion.” (Kurinij v. Hanna & Morton (1997) 55 Cal.App.4th 853, 864; see also Capolungo v. Bondi (1986) 179 Cal.App.3d 346, 354—“the issue of proximate cause ordinarily presents a question of fact. However, it becomes a question of law when the facts of the case permit only one reasonable conclusion.”

In the first cause of action, plaintiff alleges that as a result of defendants’ breach of the NCA, plaintiff “has suffered damages in the amount of $6,960,000.00,” which corresponds to the alleged 6% commission of the $116 million sale price of the Subject Property pursuant to the Listing Agreement. As a further separate basis for summary adjudication, defendants contend any breach of the NCA did not cause plaintiff to suffer the loss of commission. Instead, defendants proffer evidence that plaintiff lost the commission when VSM terminated the Listing Agreement by letter dated November 16, 2011 from VSM”S attorney, Walter Merkle (“Merkle”). Plaintiff received Merkle’s November 16, 2011 letter and understood VSM’s intent was to cancel the Listing Agreement.

On this point, the court could not identify any argument by plaintiff Nguyen in his memorandum of points and authorities in opposition. Plaintiff asserted several objections to the evidence cited by defendants in support. Plaintiff Nguyen’s objection, number 3, is overruled. The reference to exhibit H to the declaration of Douglas Marshall appears to be a typographical error and the correct reference is to exhibit G. Plaintiff Nguyen’s objection, number 18, is overruled. Exhibit V to the declaration of Douglas Marshall is attached, albeit not separated by an exhibit tab. Plaintiff Nguyen’s objection, numbers 19 and 37, are overruled.

Objections aside, plaintiff Nguyen nevertheless proffers evidence which would present a triable issue of material fact with regard to whether Merkle had authority to send the letter terminating the Listing Agreement. (See Plaintiff’s Response to Defendant’s Separate Statement of Undisputed Material Facts in Support of Motion for Summary Adjudication, Fact No. 20.)

For the reasons stated above, defendants’ motion for summary adjudication of the first cause of action in plaintiff Nguyen’s SAC is DENIED.

III. Defendants’ motion for summary adjudication of the second cause of action [breach of implied covenant of good faith and fair dealing] in plaintiff Nguyen’s SAC is DENIED.

“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.)

In moving for summary adjudication of this second cause of action, defendants contend a third party beneficiary is not entitled to recover for breach of the contractual covenant of good faith and fair dealing. However, as discussed above in section II(A), whether plaintiff is a third party beneficiary is a question of fact. Defendants also argue this claim fails because Pau did not engage in misconduct while the NCA was in existence. Again, as discussed above in section II(C), a triable issue of material fact exists.

Accordingly, defendants’ motion for summary adjudication of the second cause of action in plaintiff Nguyen’s SAC is DENIED.

IV. Defendants’ motion for summary adjudication of the third cause of action [intentional interference with contractual relations] in plaintiff Nguyen’s SAC is DENIED.

The elements which a plaintiff must plead to state the cause of action for intentional interference with contractual relations are (1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) 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. (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 55; Tuchscher Development Enterprises, Inc. v. San Diego Unified Port Dist. (2003) 106 Cal.App.4th 1219, 1239; see also CACI, No. 2201.)

According to the SAC, defendants interfered with plaintiff Nguyen’s Listing Agreement with VSM. (See SAC, ¶¶76 – 77.) In moving for summary adjudication of the third cause of action, defendant Pau contends he did not have knowledge of the Listing Agreement and, therefore, did not engage in any intentional acts designed to induce a breach or disruption of the contractual relationship between plaintiff Nguyen and VSM. Defendant Pau proffers evidence that after several months of waiting for, and repeatedly requesting, information and documentation about the property from M&M; and after several months of not getting anything useful from them, Pau became concerned that [M&M] did not have the relationship with the owner VSM which [M&M] claimed to have. In late March/ early April 2012, Pau learned that an agent from a different brokerage (Dick Stoll of Kidder Mathews) might have the listing for the [Subject] Property instead of M&M. After learning about the possible Kidder Mathews listing, Pau thereafter renewed his requests with M&M for them to provide a copy of their supposed listing agreement with the owners VSM, so that he could see for himself whether or not they actually had the listing they claimed, whether it was an exclusive listing as they had claimed, etc. Each time Pau asked M&M to provide a copy of their supposed listing agreement, they refused; they apparently couldn’t or wouldn’t provide a copy of the same. At the time that Pau entered into the NCA on August 11, 2011, Pau did not even know that plaintiff Nguyen existed, or that he claimed to have a brokerage connection to the Subject Property. Until 2013, Pau did not even know that plaintiff was claiming to have a brokerage compensation agreement regarding the Subject Property.

It is this court’s opinion that defendant Pau has not met his initial burden. Defendant’s evidence does not disprove knowledge of the listing agreement. Instead, defendant’s own evidence establishes knowledge of a listing agreement. Defendant’s suspicion of the validity of the Listing Agreement is not enough to negate knowledge of its existence. Defendant’s denial of knowledge of plaintiff Nguyen’s identity is also insufficient to carry defendant’s initial burden. Defendant Pau acknowledges signing the NCA which, by its very terms, discloses the existence of the Listing Agreement between VSM, M&M, and the Newton Law Group. (See ¶8 and Exh. A to the Declaration of Peter Pau in Support of Motion for Summary Adjudication—“[M&M] is authorized to represent Owner, through broker cooperation with Newton Law Group, for the purpose of effecting a sale of the Property, and all negotiations shall be conducted through [M&M] with the Purchaser. If Purchaser closes escrow on the Property in the next twelve (12) months, [M&M] and Newton Law Group will be compensated the agreed upon fee in the contract executed with the Owner on 8/2/2011 at the close of escrow.” (Emphasis added.))

Defendant Pau argues additionally that the third cause of action fails because the Listing Agreement was only in effect until November 16, 2011 when Merkle sent a letter to plaintiff terminating the Listing Agreement. According to defendant Pau, he did not engage in any interference while the Listing Agreement was in effect. However, as discussed above, a triable issue of material fact exists with regard to whether Merkle had authority to terminate the Listing Agreement and whether defendant Pau engaged in any interference during the relevant time period.

As a further argument, defendant Pau contends plaintiff Nguyen’s pleading itself is defective because it only alleges acts of interference beginning in May 2012 which is six months after the termination of the Listing Agreement. Apart from the triable issues discussed above, this argument fails for the additional reason that the pleading is not as specific as defendant argues. Instead, the pleading alleges interference by defendants “starting on May 18, 2012, or even before that date.” (See SAC, ¶67; emphasis added. See also SAC, ¶48—“As early as May 18, 2012 or sooner…”)

Accordingly, defendants’ motion for summary adjudication of the third cause of action in plaintiff Nguyen’s SAC is DENIED.

V. Defendants’ motion for summary adjudication of the fourth cause of action [intentional interference with prospective economic advantage] in plaintiff Nguyen’s SAC is DENIED.

The elements for the tort of intentional interference with prospective economic advantage “are usually stated as follows: (1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153 (Korea).)

In moving for summary adjudication of the fourth cause of action, defendants argue initially that there was no probability of future economic benefit after November 16, 2011 when Merkle terminated the Listing Agreement. Again, for the reasons discussed above, a triable issue of material fact exists with regard to whether Merkle had authority to terminate the Listing Agreement and whether defendant Pau engaged in any interference during the relevant time period.

Just as with the third cause of action, defendants argue the fourth cause of action fails because defendant Pau did not have knowledge of the relationship between plaintiff Nguyen and the owner of the Subject Property, VSM. As discussed above, the court is of the opinion that defendants do not carry their initial burden.

With regard to the third element of the cause of action, the California Supreme Court in Della Penna v. Toyota Motor Sales, U.S.A. (1995) 11 Cal 4th 376, 393 (Della Penna) stated, “a plaintiff seeking to recover from an alleged interference with prospective contractual or economic advantage must plead and prove as part of its case-in-chief that the defendant not only knowingly interfered with the plaintiff’s expectancy, but engaged in conduct that was wrongful by some legal measure other than the fact of interference itself.” (See also Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1152—“a plaintiff seeking to recover for interference with prospective economic advantage must also plead and prove that the defendant engaged in an independently wrongful act in disrupting the relationship. In this regard, ‘an act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.’”; see also Korea Supply, supra, 29 Cal.4th at pp. 1158 – 1159.)

In the SAC, plaintiff Nguyen alleges, “Defendants’ conduct was independently wrongful by some legal measure other than the fact of the interference itself because their actions constituted a breach of the NCA.” Defendants renew their argument from the first cause of action that Pau did not attempt to communicate with VSM prior to the termination of the NCA. As discussed above, a triable issue of material fact exists with regard to whether defendant Pau engaged in any interference during the relevant time period.

Finally, defendants also renew their argument from the first cause of action that they did not cause plaintiff Nguyen to suffer the loss of commission and that it was VSM’s termination of the Listing Agreement which caused plaintiff Nguyen to lose the commission. As discussed in section II(D) above, a triable issue of material fact exists.

Accordingly, defendants’ motion for summary adjudication of the fourth cause of action in plaintiff Nguyen’s SAC is DENIED.

VI. Defendants’ motion for summary adjudication of the sixth cause of action [quasi-contract/ unjust enrichment] in plaintiff Nguyen’s SAC is CONTINUED.

Plaintiff Nguyen’s sixth cause of action is entitled, “Quasi-Contract/ Unjust Enrichment,” and alleges, in part, “By demanding and receiving the approximately $7 million credit against the actual purchase price for the Mall for the commission owed to Plaintiff, Defendants, by their wrongful conduct, appropriated the commission rightfully owed to Plaintiff for their own gain and benefit.” (SAC, ¶104.)

In moving for summary adjudication, defendants rely on select portions of the court’s September 26, 2017 ruling with regard to defendants’ demurrer to the fifth and seventh causes of action to argue that plaintiff Nguyen has not adequately alleged a claim for restitution under an unjust enrichment theory. Specifically, defendants cite the following:

…paragraph 52 of the SAC which alleges, in relevant part, “Pau agreed to close the deal for a stated $116 million purchase price…. However, on information and belief, the actual purchase price for the Mall was $130 million because and VPO demanded two items of credit to close the purchase and sale, to which the Seller agreed. The first item was a rent credit in the amount of approximately $7 million, and the second item was a credit in the amount of approximately $7 million for the amount of the commission owed to Plaintiff, which Pau and VPO represented they would pay.”

This allegation remains insufficient to support a claim for restitution.

However, the court wrote this in addressing defendants’ demurrer to the seventh cause of action for violation of Business and Professions Code section 17200 (“UCL”) and whether plaintiff had alleged a proper claim for restitution since UCL plaintiffs are “generally limited to injunctive relief and restitution.’ ” (Korea, supra, 29 Cal.4th at p. 1144.) Since the court’s earlier ruling only specifically addressed plaintiff Nguyen’s seventh cause of action, it is not dispositive of the sixth cause of action.

Alternatively, defendants contend the factual basis for this claim of unjust enrichment, i.e., that defendants received a credit of $7 million at close of escrow for the commission owed to plaintiff Nguyen, simply is not true and that defendants did not receive a credit of $7 million (or any other amount) for the amount of the commission owed to plaintiff.

In opposition, plaintiff Nguyen contends there is a triable issue of material fact as to whether defendant received a credit of around $6,900,000 to pay plaintiff’s commission. Plaintiff Nguyen contends there is evidence of at least 10 drafts of an agreement between the seller and Pau and prior to the final agreement, the draft agreement(s) contained a provision for a $6,500,000 set aside to be deposited into escrow by seller at close of escrow to provide for the lawsuit (Vallco Litigation) for Plaintiff’s commission. Yet, plaintiff concedes this provision was omitted in the final agreement. Based on this concession, plaintiff’s evidence does not present a triable issue of material fact.

Plaintiff Nguyen argues additionally that further discovery is pending and asks the court to continue the hearing on this motion until the close of discovery. Code of Civil Procedure section 437c, subdivision (h) which states, in pertinent part, that, “If it appears from the affidavits submitted in opposition to a motion for summary judgment or summary adjudication or both that facts essential to justify opposition may exist but cannot, for reasons stated, then be presented, the court shall deny the motion, or order a continuance to permit affidavits to be obtained or discovery to be had or may make any other order as may be just.”

“To mitigate summary judgment’s harshness, the statute’s drafters included a provision making continuances—which are normally a matter within the broad discretion of trial courts—virtually mandated upon a good faith showing by affidavit that a continuance is needed to obtain facts essential to justify opposition to the motion.” (Bahl v. Bank of America (2001) 89 Cal.App.4th 389, 395; internal punctuation omitted.)

However, “[i]t is not enough to ask for a continuance … in opposing points and authorities. The statute requires that the opposition be accompanied by affidavits or declarations showing facts to justify opposition may exist; or that such showing be made by an ex parte motion on or before the date the opposition is due.” (Weil & Brown et al., CAL. PRAC. GUIDE: CIV. PRO. BEFORE TRIAL (The Rutter Group 2017) ¶10:207.10, p. 10-87.) In Hill v. Physicians & Surgeons Exch. (1990) 225 Cal.App.3d 1, 7 – 8, the “pleadings contain[ed] no affidavit detailing facts to show the existence of evidence supporting her theory of coverage and the reasons why this evidence could not be presented at the time of the hearing.” “The purpose of the affidavit required by Code of Civil Procedure 437c, subdivision (h) is to inform the court of outstanding discovery which is necessary to resist the summary judgment motion.” (Scott v. CIBA Vision Corp. (1995) 38 Cal.App.4th 307, 325 – 326.)

The opposing party’s declaration in support of a motion to continue the hearing should show the following:
• Facts establishing a likelihood that controverting evidence may exist;
• The specific reasons why such evidence cannot be presented at the present time;
• An estimate of the time necessary to obtain such evidence; and
• The specific steps or procedures the opposing party intends to utilize to obtain such evidence.

(Weil & Brown et al., CAL. PRAC. GUIDE: CIV. PRO. BEFORE TRIAL (The Rutter Group 2017) ¶10:207.15, p. 10-88 citing Code Civ. Proc., §437c, subd. (h) and Cooksey v. Alexakis (2004) 123 Cal.App.4th 246, 254 (Cooksey), et al.)

A declaration in support of a request for continuance under section 437c, subdivision (h) must show: “(1) the facts to be obtained are essential to opposing the motion; (2) there is reason to believe such facts may exist; and (3) the reasons why additional time is needed to obtain these facts. [Citations.]” [Citation.] “The purpose of the affidavit required by Code of Civil Procedure section 437c, subdivision (h) is to inform the court of outstanding discovery which is necessary to resist the summary judgment motion. [Citations.]” [Citation.] “It is not sufficient under the statute merely to indicate further discovery or investigation is contemplated. The statute makes it a condition that the party moving for a continuance show ‘facts essential to justify opposition may exist.’ [Citation.]

(Cooksey, supra, 123 Cal.App.4th at p. 254.)

Plaintiff’s counsel submits a declaration which states the reason a continuance is necessary is “due to the enormous volume of documents, deposition transcripts, and witnesses, and being a sole practitioner.” “A continuance is not mandatory where no declaration is submitted or the declaration fails to meet the above requirements. Nonetheless, the court must determine whether the party requesting the continuance has established good cause therefore. That determination is within the court’s discretion.” (Weil & Brown et al., CAL. PRAC. GUIDE: CIV. PRO. BEFORE TRIAL (The Rutter Group 2017) ¶10:208, p. 10-89 citing Lerma v. County of Orange (2004) 120 Cal.App.4th 709, 716; Cooksey, supra, 123 Cal.App.4th at pp. 253 – 254, et al.) “The court’s discretion, however, must be exercised liberally in favor of granting a continuance: ‘The interests at state are too high to sanction the denial of a continuance without a good reason.’” (Id. citing Frazee v. Seely (2002) 95 Cal.App.4th 627, 634; emphasis added.)

Factors the court may consider in deciding to continue include:
The length of time the case has been pending. [2 years, 1 month: Complaint filed November 10, 2016.]
The length of time the requesting party had to oppose the motion. [2 months: MSA filed September 28, 2018.]
The proximity of the trial date or the 30-day discovery cut-off before trial. [Trial set for May 13, 2019.]
Whether the continuance motion could have been made earlier. [Continuance made in conjunction with opposition to MSJ.]
Prior continuances for this purpose. [No prior requests for continuance.]
Whether the evidence sought is “essential” to the issue to be adjudicated. [Plaintiff seeks more information concerning the “true price of the mall and … plaintiff’s fee credited by the sellers.]
Death or serious illness of an attorney or party is normally good cause for granting a continuance. [Not applicable.]

(Id. at ¶10:208.1, p. 10-90.)

Since plaintiff is faced with a potentially dispositive motion, the court will allow plaintiff Nguyen an opportunity to conduct discovery to be able to fend off this motion, but limited to the sixth cause of action only. In light of the liberality in favor of granting continuances, plaintiff Nguyen’s request for continuance is GRANTED, again limited to the sixth cause of action. Defendants’ motion for summary adjudication of the sixth cause of action only is hereby continued to February 28, 2019 at 9:00 a.m. in Department 19. Plaintiff may file and serve a supplemental opposition up to 10 pages in length no later than February 14, 2018. A reply, if any, shall be filed and served no later than February 21, 2018.