Judge: Daniel S. Murphy, Case: 20STCV40043, Date: 2022-10-14 Tentative Ruling

Case Number: 20STCV40043    Hearing Date: October 14, 2022    Dept: 32

BACKGROUND

            On October 19, 2020, Plaintiff Pixior, LLC filed this action against Defendant Cojecto, alleging: (1) breach of contract; (2) breach of the covenant of good faith and fair dealing; (3) open book account; (4) account stated; (5) unjust enrichment; and (6) declaratory relief. Cojecto and its agent David Martinez also filed a complaint against Pixior and its CEO Yassine Amallal. The operative Second Amended Complaint was filed October 15, 2021, asserting causes of action for (1) breach of contract, (2) breach of the implied covenant of good faith and fair dealing, (3) fraud, (4) assault, (5) intentional infliction of emotional distress, and (6) declaratory relief. The two cases have been consolidated. Both lawsuits arise from the following facts.

            In July 2020, Pixior and Cojecto entered into a written agreement whereby Pixior was to provide Defendant with approximately 50,000 square feet of warehouse space for storage and related facility access. Pixior claims that Cojecto breached this agreement by failing to pay for the space provided and vacating the premises without the requisite notice. Pixior claims that Cojecto owes $150,000. Cojecto disputes that it was required to pay the full $150,000 on the grounds that Pixior failed to provide the 50,000 square feet as agreed. Martinez also asserts an assault claim against Amallal based on the allegation that during a private meeting between the two parties to resolve their dispute, Amallal became irate and threw a projector at Martinez.    

             On August 8, 2022, Pixior and Amallal, as defendants, filed the instant motion for summary judgment against the six causes of action asserted in Cojecto and Martinez’s complaint.

LEGAL STANDARD

The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) Code of Civil Procedure section 437c, subdivision (c) “requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.) “The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues; the function of the affidavits or declarations is to disclose whether there is any triable issue of fact within the issues delimited by the pleadings.” (Juge v. County of Sacramento (1993) 12 Cal.App.4th 59, 67, citing FPI Development, Inc. v. Nakashima (1991) 231 Cal. App. 3d 367, 381-382.)

As to each claim as framed by the complaint, the defendant moving for summary judgment must satisfy the initial burden of proof by presenting facts to negate an essential element, or to establish a defense. (Code Civ. Proc., § 437c, subd. (p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520.) Once the defendant has met that burden, the burden shifts to the plaintiff to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. To establish a triable issue of material fact, the party opposing the motion must produce substantial responsive evidence. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

EVIDENTIARY OBJECTIONS

            Both parties’ objections are overruled.

DISCUSSION

I. Breach of Contract

            To establish breach of contract, a plaintiff must show: (1) the contract existed, (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.)

Defendants argue that Pixior did not breach the contract because it provided the agreed-upon warehouse space. (Mtn. 3:5-9.) However, Defendants’ own evidence shows the opposite, consisting of floorplans estimating total square footage to be 26,190 and 32,210, respectively. (Plntf.’s Ex. B, pp. 1, 7.) Moreover, Plaintiffs dispute that Pixior provided the requisite space, averring that Pixior only provided about half after measurements by a third party. (Martinez Decl ¶¶ 41-44, Ex. 8.) Even if the contract was for “approximately” 50,000 square feet, and it is rare to get exactly what one bargained for in this industry, a jury may still find that Plaintiff breached the contract by not providing anywhere near 50,000 square feet.

Defendants argue in reply that Section 12 of the Warehouseman Agreement required Plaintiffs to notify Defendants in writing of the claim, otherwise the action is waived. (Reply 2:5-3:9.) Defendants never made this argument in their opening brief, instead focusing solely on the contention that they provided the adequate warehouse space. (See Mtn. 3:5-4:17.) “Obvious reasons of fairness militate against consideration of an issue raised initially in the reply brief . . . .” (Marriage of Khera & Sameer (2012) 206 Cal.App.4th 1467, 1477.) In any case, Section 12 addresses claims based on damage to goods stored in the warehouse, not the failure to provide adequate warehouse space. (Reply 2:9-18.) Therefore, there is a triable issue on the breach of contract claim.   

II. Implied Covenant of Good Faith and Fair Dealing

“The covenant of good faith and fair dealing, implied by law in every contract, exists merely to prevent one contracting party from unfairly frustrating the other party’s right to receive the benefits of the agreement actually made.” (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 349-50.)

Defendants incorporate the same argument that it made for the breach of contract claim, arguing that Pixior could not have acted in bad faith because it did not breach the contract. (Mtn. 5:3-7.) As discussed above, there is a triable issue.

III. Fraud

The elements of fraud 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.)

            Defendants contend that no misrepresentations were made to Plaintiffs, because Martinez viewed the space and agreed to change the language of the agreement to reflect “approximately” 50,000 square feet rather than exactly 50,000. (Mtn. 6:1-11.) However, Martinez avers that Pixior promised to provide 50,000 square feet and thereby induced him into signing the agreement. (Martinez Decl. ¶ 18.) Additionally, Pixior’s other customers were already using the space, leading to a reasonable inference that Defendants misrepresented their ability to provide 50,000 square feet. (Ibid.) As discussed above, the use of “approximately” is not dispositive, as the evidence indicates that Pixior provided nowhere close to 50,000 square feet, rendering its promise potentially fraudulent even if it was not exact. Therefore, there is a triable issue over the fraud claim.   

            Defendants argue for the first time in reply that the Court dismissed the claim with prejudice, citing to an October 4, 2021 minute order on Defendants’ motion for judgment on the pleadings in the consolidated case Cojecto v. Pixior, Case No. 20STCV41754. (Reply 5:5-6.) Besides improperly propounding new arguments in a reply brief, Defendants are also incorrect about the Court’s ruling. The conclusion of the minute order clearly reads that the MJOP was granted “with leave to amend as to the third and fifth causes of action.” (Minute Order, p. 5.) Fraud is the third cause of action. Defendants’ reliance on a typo earlier in the minute order is unavailing. Defendants are aware that the Court granted leave to amend after oral argument, and did not raise the issue when Plaintiffs filed an amended complaint with a fraud claim.

IV. Assault

“The essential elements of a cause of action for assault are: (1) defendant acted with intent to cause harmful or offensive contact, or threatened to touch plaintiff in a harmful or offensive manner; (2) plaintiff reasonably believed she was about to be touched in a harmful or offensive manner or it reasonably appeared to plaintiff that defendant was about to carry out the threat; (3) plaintiff did not consent to defendant’s conduct; (4) plaintiff was harmed; and (5) defendant’s conduct was a substantial factor in causing plaintiff’s harm.” (So v. Shin (2013) 212 Cal.App.4th 652, 668-69.)

Defendants argue that Martinez suffered no actionable harm because he admittedly did not incur any medical bills. (Mtn. 7:1-6.) However, Defendants cite no authority for the proposition that establishing harm requires proof of medical intervention. The requirement is for a plaintiff to suffer harm, not to visit a doctor. (See So, supra, 212 Cal.App.4th at pp. 668-69.) Martinez is entitled to seek redress for his harm even if he did not visit a doctor. Furthermore, Martinez avers that he suffers from recurring mental anguish due to the assault. (Martinez Decl. ¶ 69.) Martinez is entitled to recover these damages, subject to proof at trial. Therefore, there is a triable issue as to assault.

V. Intentional Infliction of Emotional Distress

            The motion is moot as to the IIED claim because the Court has already stricken the claim without leave to amend. (See January 21, 2022 Order re Demurrer to SAC 5:5-6:4.)

VI. Declaratory Relief

“Any person interested under a written instrument . . . or under a contract . . . may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his or her rights and duties . . . arising under the instrument or contract.” (Code Civ. Proc., § 1060.)  

Plaintiffs’ declaratory relief claim stems from the dispute over the amount owed under the contract and Defendants’ purported failure to provide the requisite space. (SAC ¶¶ 85-90.) Plaintiffs seek a judicial declaration that they are entitled to a refund of overpaid rent and compensation for freight damages.

Defendants argue this claim is moot because Plaintiffs have a contract action. (Mtn. 8:16-19.) However, the cited authority does not stand for the proposition that declaratory relief is barred where the plaintiff simultaneously seeks compensation pursuant to a contract. In fact, “[o]ur Supreme Court held that in a dispute involving an alleged breach of contract, courts may provide declaratory relief under section 1060 if the relief sought would also govern the future conduct of the parties.” (Osseous Technologies of America, Inc. v. DiscoveryOrtho Partners LLC (2010) 191 Cal.App.4th 357, 372.) “[T]he mere fact that the contract has already been breached and a cause of action therefor (one of the traditional remedies) has accrued, does not necessarily deprive the court of the power to grant declaratory relief under the law.” (Ibid., quoting Ermolieff v. R.K.O. Radio Pictures (1942) 19 Cal.2d 543, 547.) Therefore, the declaratory relief claim is not moot.

CONCLUSION

            Defendants Pixior, LLC’s and Yassine Amallal’s motion for summary judgment or adjudication is DENIED.