Judge: David Sotelo, Case: 19STCV27360, Date: 2022-10-19 Tentative Ruling
Case Number: 19STCV27360 Hearing Date: October 19, 2022 Dept: 40
MOVING PARTY: Defendant/Cross-Complainant
Dollar Shave Club, Inc. (Motion for Summary Adjudication);
Plaintiff/Cross-Defendant Afshin Moghavem, Inc. (Motion to Compel Deposition
of Michael Dubin).
Defendant Dollar Shave Club, Inc. (“DSC”), which specializes
in direct-to-consumer subscription (shaving) razor blade services, entered into
a Consulting Agreement with Plaintiff Afshin Moghavem, Inc. (“AMI”) for the claimed
purpose of assisting in the building proprietary razor manufacturing capabilities
to phase-out DSC’s third-party supplier—Dorco—and bring DSC’s blade production in-house.
Afshin Moghavem is the principal of AMI.
Michael Dubin was DSC’s CEO at all relevant times.
The Consulting Agreement eventually led to the creation of Project
Quantum (“PQ”), through which AMI would operate a Facility in Israel to
manufacture DSC blades (“Israel Factory”). On summary adjudication, the parties
disagree as to whether Project Quantum specifically involved the production of two-blade,
four-blade, and six-blade blade products in the Israel Factory or instead involved
only the general construction of the Factory without particulars as to blades created
there (hereafter referred to as the “scope of Project Quantum”).
On February 3, 2016, DSC’s Board of Directors approved “an investment
amount for a manufacturing facility to manufacture razors for DSC.” That same day,
Michael Dubin sent an email to AMI stating: “Great work today guys. We got the green
light. Here we go!” While the parties agree on summary adjudication that the “green
light” referred to Project Quantum, the parties disagree on whether Dubin’s or DSC’s
Board’s statements or decisions entailed the building of a razor manufacturing facility
with two-blade, four-blade, and six-blade output.
In or about July 2016, Plaintiff and DSC began negotiating an
Amended and Restated Consulting Agreement (“ARCA”) that was drafted on July 8, 2016
and executed on or around July 15 or 16, 2016. This ARCA extended the term of AMI’s
consultancy through July 8, 2019. Afshin Moghavem signed the ARCA on behalf of AMI.
Michael Dubin signed the ARCA on behalf of DSC.
The parties agree on summary adjudication that the ARCA is a
valid, enforceable, and unambiguous contract (despite disputes regarding Section
5). Plaintiff’s compensation under the ARCA was governed by Section 5. The first
cash equivalent awards associated with the stock options grants specified in Sections
5.b(i) and 5.b(ii) of the ARCA were paid to Plaintiff. Section 5.b(iii) of the
ARCA (most relevant here) provided that:
101,553 shares subject to the Additional
Option Grant [would] vest upon the milestone (the achievement of which shall be
reasonably determined by the [DSC] Board) of Company’s [i.e., DSC’s] first commercial
shipment of proprietary razors manufactured in the factory for which Consultant’s
[i.e., AMI’s] Services have been engaged under [the ARCA] on or before September
30, 2018, provided this milestone shall be achieved if Company [DSC] at any time
decides to not fully fund the factory as already approved by the [DSC] Board for
a reason other than one related to Consultant’s [i.e., AMI’s] performance, the ability
of Consultant [AMI] to deliver a satisfactory razor manufacturing facility by the
milestone date or the quality of razors produced by the factory.
The parties disagree on summary adjudication as to whether, at
the time the ARCA was entered, Plaintiff understood that it was possible the factory
would not begin making commercial shipments by September 30, 2018 (the “Milestone
Date”).
The parties agree, however, that prior to the execution of the
ARCA, Dubin put pressure on AMI to close the ARCA deal quickly—going so far as to
send AMI an email stating “it is imperative we finalize this [ARCA deal] tomorrow
[by July 15, 2016]”—and that DSC failed to disclose that Unilever—a multinational
consumer goods company—was acquiring DSC within several days of the ARCA’s
execution.
DSC argues on summary adjudication that this information was
confidential, that AMI had no right to know of this information and that AMI netted
millions of dollars from the ARCA deal, which would not have been possible after
the Unilever acquisition. AMI argues that failing to disclose the Unilever acquisition
materially affected AMI’s position because AMI could have made different decisions
regarding whether to enter the ARCA, particularly because AMI had previously worked
with Unilever and understood that Unilever’s way of doing business would require
redrafting the plans for the Israel Factory that would push back the operational
date for the Factory.
AMI further argues that DSC was embroiled in a patent infringement
litigation with razor company Gillette at that time, and that this information was
not disclosed to AMI, and that it should have done so.
Several days later, on July 18, 2016, after the execution of
the ARCA, DSC was acquired by Unilever, Inc. (Plaintiff learned of DSC’s impending
acquisition of Unilever at some point between the execution of the ARCA and the
execution of the Unilever acquisition.) As a result of DSC’s acquisition by Unilever,
Inc., any vested stock options grants under Section 5(b) of the ARCA were converted
to cash equivalent awards, e.g., the Milestone Award was cashed into a $3,081,259.14
option payment. Further, DSC’s Board was replaced by Unilever executives.
AMI was ultimately unable to meet the Milestone Date of September
30, 2018, i.e., AMI failed to effect its first commercial shipment of proprietary
razors manufactured in the Israel Factory until 2019. (The Court has previously
found in another summary adjudication motion in this action that DSC fully
funded the Israel Factory.)
AMI argues on summary adjudication that it was willing and able
to so ship viable four and six-blade razor products as of the Milestone Date but
was unable to do so because DSC engaged in a series of activities to prevent AMI
from reaching the Milestone Date after the ARCA’s execution, including: Requiring the (“perfunctory”) approval of Unilever
for any expenses of $100,000 or more; Asking that the plans for Project Quantum
be reproposed to DSC, leading to reapproval in December 2016; Instituting a hiring
freeze at AMI from August 2016 to December 2016; Demanding new conditions on the
Factory’s lease after prior negotiation on this topic between the parties; Requiring
that AMI redesign the six-blade and four-blade razor designs in April 2017; Requiring
that AMI redesign the dispensers for the four-blade and six-blade razor products
in August 2017, causing an additional delay of four to six months; Failing to ensure
the timely design, development, and production of the handles to be attached to
the AMI-produced razors (DSC’s responsibility under the ARCA), resulting in further
delays; instructing AMI to follow procedures that were not the most advantageous
for the production of blades designed at the Israel Factory, resulting in further
delays; and Delaying the shipment of AMI-produced blades from December 2018 (after
the Milestone Date) to sometime in 2019 in lieu of pending litigation with Gillette,
which concluded sometime in 2019 and before the date of the first AMI shipment from
the Israel Factory.
DSC argues on summary adjudication that most of the evidence
provided to support these arguments is inadmissible.
Based on the above, Plaintiff AMI brought this action, alleging
(1) Breach of Contract, (2) Breach of Implied Covenant of Good Faith and Fair Dealing,
(3) Intentional Misrepresentation, (4) Concealment, and (5) Negligent Misrepresentation
against DSC. (Plaintiff’s operative pleading is its Second Amended Complaint,
or “SAC”.)
DSC filed a Cross-Complaint alleging (1) Declaratory Judgment
regarding the Consulting Fees; (2) Declaratory Judgment regarding the Milestone
Option Payment; and (3) Declaratory Judgment regarding AMI’s misrepresentation and
concealment claims.
On September 3, 2021, AMI made a Motion for Summary
Adjudication against First Cause of Action for Breach of Contract, claiming
damages based on DSC’s nonpayment of AMI’s consulting fees and the Milestone
Award contemplated by the ARCA. The Court “GRANTED [summary adjudication] in favor
of Plaintiff AMI in the [SAC’s] First cause of action [Breach of Contract] for the
monthly consulting cash compensation which appears to total approximately $226,209.65”
but DENIED summary adjudication as to the Breach of Contract claim, as supported
by damages related to the Milestone Award, because “[t]here [was] no evidence showing
a triable issue of material fact was submitted to establish the conditions in paragraph
5, subdivision (b) of the ARCA were ever triggered.”
DSC now brings its own opposed Motion for Summary Adjudication,
seeking resolution in its favor as to the Four remaining causes of action in AMI’s
Second Amended Complaint and the three Declaratory Relief claims alleged by DSC
in its Cross-Complaint.
Evidentiary Objections
Plaintiff AMI’s Objection
ALL OVERRULED.
Defendant DSC’s Objections
ALL SUSTAINED
Application to Seal: GRANTED
Motion to Seal – Moving Papers: “A party requesting that
a record be filed under seal must file a motion or an application for an order sealing
the record. The motion or application must be accompanied by a memorandum and a
declaration containing facts sufficient to justify the sealing.” (Cal. Rules of
Court, Rule 2.551, subd. (b)(1).) Plaintiff AMI met this requirement on June 10,
2022 through the submission of this application explaining that the parties have
stipulated to the sealing of either portions or the entirety of confidential
business record in the record. (Application to Seal, pp. 1-3.)
Motion to Seal – Service: “A copy of the motion or application
must be served on all parties that have appeared in the case. Unless the court orders
otherwise, any party that already possesses copies of the records to be placed under
seal must be served with a complete, unredacted version of all papers as well as
a redacted version.” (Cal. Rules of Court, rule 2.551, subd. (b)(2).) Here, Plaintiff
AMI served copies of the application DSC’s Counsel on June 10, 2022 via mail.
Motion to Seal – Lodging: Unless good cause exists, a
record to be filed under seal must be put in an envelope or other appropriate container
labeled ‘CONDITIONALLY UNDER SEAL,’ have a cover sheet affixed thereto with an appropriate
caption page stating the envelope contains a motion to file a record under seal
and be lodged in the sealed envelope with the Court. (Cal. Rules of Court, rule
2.551, subds. (b)(4), (d)(2), (d)(4).) Here, the Court has received unredacted
copies of the documents to be wholly or partially sealed that meet these
requirements.
Motion to Seal – Redacted and Unredacted Versions: If
necessary to prevent disclosure, any motion to seal and any supporting documents
must be filed in a public redacted version and lodged in a complete, unredacted
version conditionally under seal. The cover of the redacted version must identify
it as “Public-Redacts materials from conditionally sealed record” while the cover
of the unredacted version must identify it as “May Not Be Examined Without Court
Order-Contains material from conditionally sealed record.” (Cal. Rules of Court,
rule 2.551, subd. (b)(5).) Here, the Court has received copies of the sealed
record (redacted and unredacted) and the Court’s online docket system reflects
that copies of the documents to be sealed—Exhibits 2-11, 15, 18, 20-21, 23-24,
27, 30 attached to the Doniger Declaration submitted in support of the AMI
Opposition to summary adjudication—appear in the public record.
Motion to Seal – Findings: “The public has a First Amendment
right of access to civil litigation documents filed in court and used at trial or
submitted as a basis for adjudication.” (Savaglio v. Wal-Mart Stores, Inc.
(2007) 149 Cal.App.4th 588, 596 [citing NBC Subsidiary (KNBC-TV), Inc. v. Superior
Court (1999) 20 Cal.4th 1178, 1208-1209, fn. 25].) Therefore, before a trial
court orders a record sealed, it must hold a hearing and make express findings set
forth in California Rules of Court, Rule 2.550, subdivision (d): (1) there exists
an overriding interest that overcomes the right of public access to the record;
(2) the overriding interest supports sealing the record; (3) a substantial probability
exists that the overriding interest will be prejudiced if the record is not sealed;
(4) the proposed sealing is narrowly tailored; and (5) no less restrictive means
exist to achieve the overriding interest. (Id.; Cal. Rules of Court, rule
2.550, subd. (d).)
Here, the Court finds that: (1) there exists an overriding
interest to protect the information to be redacted from the Doniger Declaration
at Exhibits 2 to 11, 15, 18, 20, 21, 23, 24, 27, and 30 because this
information involves confidential information springing from a business
transaction between two companies; (2) the interest in protecting the
confidentiality of this business transaction overrides the right of public
access to this record, particularly in light of the skewed importance of
confidentiality in this business transaction in comparison to the public’s interest
in the same information; (3) the interest in confidentiality in the documents
to be sealed would be prejudiced if the record is not sealed because the Court
cannot retract this information from the public record easily once it has been
published and is accessible for duplication; (4) the proposed sealing is
narrowly tailored given that the parties—per the Court’s wishes—have minimized
the amount of redactions in the record to compartmentalize any sealing of the
record to confidential business transactions between DSC and AMI; and (5) no
less restrictive means of achieving this interest exist because the evidence at
issue is being submitted into the record and plays a part in the disposition of
the issues at bar, and thus, to fail to seal the partial or whole redactions
requested by Plaintiff AMI would result in this information’s full disclosure—Exhibits
2 to 11, 15, 18, 20, 21, 23, 24, 27, and 30 of the Doniger Declaration on
Opposition—to the prejudice of the overriding interest in the confidentiality
of the parties’ business records.
Motion for Summary Adjudication: GRANTED, in Part;
Denied in Part
Legal Standard: A motion for summary judgment shall
be granted if all the papers submitted show that there is no triable issue as
to any material fact and that the moving party is entitled to a judgment as a
matter of law. (Code of Civ. Proc., § 437c, subd. (c).) A party may also seek
summary adjudication of an entire a cause of action or, under certain
circumstances, parts thereof, which may be made by a standalone motion or as an
alternative to a motion for summary judgment and proceeds in all procedural
respects as a motion for summary judgment. (Code Civ. Proc., § 437c, subds.
(f)(1)-(2), (t); see Lilienthal & Fowler v. Superior Court (1993) 12
Cal.App.4th 1848, 1854-55; see also Public Utilities Com. v. Superior Court
(2010) 181 Cal.App.4th 364, 380.) The moving party bears the initial burden of
production to make prima facie showing no triable material fact issues. (Aguilar
v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) This burden on
summary judgment “is more properly one of persuasion rather than proof, since
he must persuade the court that there is no material fact for a reasonable
trier of fact to find, and not to prove any such fact to the satisfaction of
the court itself as though it were sitting as the trier of fact.” (Id.
at p. 850, fn.11.) If the moving party meets this burden, the burden shifts to
the opposing party to make converse prima facie showing that a triable issue of
material fact exists. (Ibid.) The evidence of the moving party is
strictly construed, and the evidence of the opposing party liberally construed.
(Crouse v. Brobeck, Phleger & Harrison (1988) 67 Cal.App.4th 1509,
1524.) Doubts as to the propriety of granting the motion must be resolved in
favor of the party resisting the motion. (Stationers Corp. v. Dun &
Bradstreet, Inc. (1965) 62 Cal.2d 412, 417.)
I.
First Cause of Action [Breach of Contract]: GRANTED.
The Court’s January
4, 2022 Order Granted Plaintiff summary adjudication for Breach of Contract only
as supported by DSC’s nonpayment of the Consulting Fees contemplated by
Section 5.b of the ARCA. (See Jan. 4, 2022 Minute Order, pp. 3-4; Mot.,
Beffa Decl., Ex. Z, pp. 3-4.) That same Order Denied Plaintiff summary
adjudication as to the SAC’s First cause of action for Breach of Contract insofar
as the claim was supported by allegations that DSC wrongfully withheld payment of
the Milestone Award from AMI. (See Jan. 4, 2022 Minute Order, pp. 3-4; Mot.,
Beffa Decl., Ex. Z, pp. 3-4.) California case law holds that “[a]n order
denying [a] motion [for summary judgment or adjudication] simply establishes the
existence of a triable issue of fact[;] [i]t does not decide the issue.” (Transport
Ins. Co. v. TIG Ins. Co. (2012) 202 Cal.App.4th 984, 1009.) Based on this
instruction, the Court’s January 4, 2022 Order did not dispose of the First cause
of action insofar as this claim is premised on DSC’s nonpayment of the separate
so-called Milestone Award to AMI.
The Court finds
that a reasonable factfinder could not conclude the evidence underlying the
Court’s January 4, 2022 Order shows triable issues of fact exist as to whether
AMI is entitled to the Milestone Award: In fact, the evidence shows that the
conditions precedent to such an award were never triggered. (See Jan. 4, 2022
Minute Order, pp. 3-4; Mot., Beffa Decl., Ex. Z, pp. 3-4.)
Plaintiff AMI
altogether fails to address the SAC’s First Cause of Action in its Opposition
(MSA Opp’n, 6:14-20:22) and thus fails to meet its burden on summary
adjudication.
II.
Second Cause of Action [Breach of Implied Covenant of Good
Faith and Fair Dealing]: DENIED.
This Second Cause of Action seeks damages equal to the Milestone
Award ($3,081,259.14) based on alleged actions taken by DSC to delay or foreclose
AMI’s ability to meet the Milestone Date, constituting a Breach of Implied Covenant
of Good Faith and Fair Dealing implicit in the parties’ ARCA. (SAC, ¶¶ 46-49.)
“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 [citation omitted].) “The covenant
of good faith finds particular application in situations where one party is invested
with a discretionary power affecting the rights of another” where “[s]uch power
must be exercised in good faith.” (Carma Developers (Cal.), Inc. v. Marathon
Development California, Inc. (1992) 2 Cal.4th 342, 371-72 [citations omitted].)
DSC argues this cause of action fails because (1) Plaintiff seeks
to impermissibly recover the Milestone Award through an implied recovery theory
when this court has already concluded that the express terms of the ARCA’s Milestone
Award were never triggered (something DSC paints as attempting to “trump” the express
terms in the contract); (2) any delay caused to AMI’s ability to ship out its first
shipment of commercial proprietary razors, even if caused by DSC, was within the
contemplation of the parties; and (3) Plaintiff cannot recover the Milestone Award
where Section 5.b(iii) of the ARCA is the only trigger for such an award. (MSA,
5:25-9:2.)
The Court finds none of these positions—nor any evidence in support
them—availing on summary adjudication.
The Court is unconvinced that a reasonable factfinder could determine
Plaintiff is attempting to recover the Milestone Award in the second Cause of
Action. This cause of action seeks to recover an amount equal to the Milestone Award
based on a series of delays caused by DSC that impeded Plaintiff’s ability to in
fact ship a commercial shipment of proprietary razors by September 30, 2018 (the
Milestone Date). (SAC, ¶¶ 46-49.) Stated otherwise, this Second cause of action
seeks to recover the $3,081,259.14 AMI would have been paid by DSC if AMI had met
the Milestone Date in the absence of DSC’s interference. (See SAC, ¶¶ 46-49; see
also Reply, Separate Statement, UMF Nos. 131-152.)
DSC’s remaining arguments (MSA, 5:27-6:14, 6:24-9:2) are unavailing,
insofar as DSC attacks the Second cause of action for attempting to recover the
Milestone Award but fails to recognize the Second cause of action technically
seeks not the Milestone Award itself, but rather, seeks an award in the same amount
because the Milestone Award is equal to the amount of damages suffered by Plaintiff
as a result of DSC’s alleged interference with AMI’s ability to make its first commercial
shipment of proprietary razors by September 30, 2018.
Second, the Court is not convinced that a reasonable factfinder
could determine that no triable issues of fact exist as to whether DSC, in bad faith,
took actions to delay or frustrate AMI’s ability to meet the Milestone Date. Despite
DSC’s best assertions (MSA, 6:15-23), the facts presented on summary adjudication
could be viewed in two ways: DSC made business decisions that were best for DSC
without contemplating the resulting effects on AMI (see Reply, 3:21-4:2), or DSC,
through inferential evidence that simple business decisions incrementally but surely
deprived AMI of its ability to meet the Milestone Date. (See SAC, ¶¶ 46-49; see,
e.g., Reply, Separate Statement, UMF Nos. 131-152; Doniger Decl., Exs. 6, 7, 16.)
Summary adjudication of the SAC’s Second cause of action is therefore
DENIED.
III.
Third and Fifth Causes of Action [Intentional Misrepresentation;
Negligent Misrepresentation]: GRANTED
The SAC’s Third and Fifth causes of action—Intentional Misrepresentation
and Negligent Misrepresentation—are premised on one theory: when then-DSC CEO Michael
Dubin stated to AMI, “Great work today guys[;] We got the green light[;] Here we
go!”, Dubin either misrepresented or concealed the fact that the DSC Board had not
approved the production of six-, four-, and two-blade razor products in addition
to the construction of the Israel Factory, thus causing unspecified damages to Plaintiff
AMI. (SAC, ¶¶ 5-12, 51-52, 71-72.)
In relevant part, Defendant DSC argues on summary adjudication
that the Third and Fifth Causes of Action fail because, “[u]nder the most generous
interpretation of Plaintiff’s claim, Plaintiff would be entitled to nothing more
than what the contract would have awarded him if DSC’s Board had approved the …
non-funding details of the factory in February 2016” and, even then, “Plaintiff
would still not be entitled to the milestone payment because, as the Court has already
determined, the milestone was triggered off of funding approved by the Board, not
any other non-funding details.” (MSA, 12:20-22.)
The Court finds that this argument carries DSC’s burden on summary
adjudication as to the Third and Fifth causes of action. A claim for intentional
or negligent misrepresentation must allege and prove damages relating to the misrepresentation(s)
at issue. (Service by Medallion, Inc. v. Clorox Co. (1996) 44 Cal.App.4th
1807, 1816 [intentional misrepresentation]; B.L.M. v. Sabo & Deitsch
(1997) 55 Cal.App.4th 823, 834 [negligent misrepresentation].) In its Opposition,
AMI argues that “[a]s a result of entering into the ARCA and the Milestone Date
provision based on DSC’s misrepresentations, AMI was deprived of, inter alia, the
$3,081,259.14 third Option Payment.” (MSA Opp’n, 16:12-13.)
However, the Court has found on summary adjudication that
AMI is not entitled to the Milestone Award. Further, as discussed ante about the
SAC’s Second cause of action, the pertinent evidence supporting infringement of
AMI’s ability to obtain the Milestone Award relates to actions taken by DSC after
the ARCA was executed in July 2016—at least five months after Dubin made his February
2016 “green light statement.” The Court is thus persuaded that a reasonable factfinder
could determine that Dubin’s words were not causally connected to the only damages
presented by AMI on summary adjudication as to the Third and Fifth causes of action:
the loss of the Milestone Award itself. (See Opp’n, 16:12-13.)
The Court also finds that Plaintiff cannot carry its burden on
summary adjudication as to the Third and Fifth causes of action based on the
same logic: AMI claims only the loss of the Milestone Award (rather than an award
for damages in the same amount of the Milestone Award, as contemplated in the Second
cause of action), and these damages have been adjudicated in favor of DSC in
this Order. (Second Amended Complaint, First Cause of Action discussion
supra.) Further, AMI presents no other evidence of damages for these claims. (See
Opp’n, 16:10-27.) Last, the SAC does not allege nor does AMI argue or show on summary
adjudication that DSC never intended to pay out the Milestone Award, either as of
February 2016 (when the Factory was first “green lit” and possibly before the
Milestone Award was even contemplated as part of the ARCA—the evidence is
unclear either way) or July 2016 (when the ARCA with the Milestone Award was executed,
and after Mr. Dubin’s alleged misrepresentations).
The Court briefly notes that while it “previously held that AMI
plausibly alleged DSC’s liability for misrepresentation” (MSA Opp’n, 1:3-4),
the Court notes that sufficiency of pleading is a lower bar than sufficiency of
evidence, and here, AMI presented insufficient evidence of damages to support
the Third and Fifth Causes of Action on summary adjudication.
The Court thus GRANTS summary adjudication as to the SAC’s Third
and Fifth causes of action.
IV.
Fourth Cause of Action [Concealment]: GRANTED.
This cause of action is based on three “concealments”: (1) AMI’s
concealment of the fact that it had never approved Project Quantum with respect
to two-blade, four-blade, and six-blade assembly; (2) DSC’s concealment as to the
Unilever acquisition; and (3) DSC’s concealment as to the Gillette litigation. (SAC,
¶¶ 61.)
The Court finds similar logic to that employed in the
discussion of Third and Fifth causes of action is applicable to all three concealment
grounds: the only damages at issue in the Fourth Cause of Action on summary
adjudication are Plaintiff’s entitlement to the Milestone Award and nothing
else, and the Court has adjudicated the Milestone Award in favor of in favor of
DSC in this same Order, for which reason Defendant DSC carries its burden on
summary adjudication as against the SAC’s Concealment claim and Plaintiff
cannot make a rebuttal showing as to survive summary adjudication. (See MSA
Opp’n, 20:15-22 [arguing on Opposition that the only damages that AMI suffered
as a result of DSC’s alleged misrepresentation in relation to the scope of
Project Quantum, the Unilever Acquisition, and the Gillette Litigation were the
deprivation of the Milestone Award itself]; see also Second Amended
Complaint, First Cause of Action discussion supra [summary adjudication in
favor of DSC on the SAC’s Breach of Contract claim as supported by DSC’s
nonpayment of the Milestone Award to AMI].)
V.
Cross-Complaint, First to Third Cause of Action [Declaratory
Relief re: (1) Consulting Fees, (2) Milestone Award, (3) Misrepresentations]:
GRANTED.
Defendant DSC argues that the Court should grant summary
adjudication as to the Cross-Complaint’s three causes of action because (1) the
Court’s summary adjudication as to the SAC’s Breach of Contract claim disposed
of the first cause of action in the Cross-Complaint (regarding declaratory
relief establishing the consulting fees) (MSA, 5:18-24) and (2) its other
arguments on summary adjudication dispose of the remaining claims in the
Cross-Complaint. (MSA, 17:10-14.) The Opposition fails to address these points
altogether. (See Opp’n, 6:14-20:22.)
Similarly, the Cross-Complaint’s third claim for Declaratory
Relief asks that the Court resolve AMI’s misrepresentation and concealment claims
against DSC (Complaint, ¶¶ 37-38) and these issues have been litigated and
necessarily decided as between AMI and DSC, as adjudged in this Order. (See Second
Amended Complaint, Third and Fifth causes of action discussion & Second
Amended Complaint, Fifth cause of action discussion supra; see also KN
Holdings LLC, supra, 61 Cal.4th at p. 825.)
Motion to Compel Deposition: MOOT
Plaintiff AMI’s Motion to Compel Deposition of Michael Dubin
is MOOT because the Motion “requests that this Court issue an Order compelling
Dubin to appear for deposition on AMI’s fraud claims, or alternatively
precluding Dubin from testifying at trial to anything related to AMI’s fraud
claims” (Compel Mot., 8:5-7) and this Court has adjudicated such claims in
favor of DSC, mooting any need for further discovery on these SAC’s fraud
claims.
Conclusion
Plaintiff Afshin Moghavem, Inc.’s Application to Seal is
GRANTED because an overriding interest exists in the protecting of a
confidential information related to the AMI and DSC’s business transactions
exists, which overrides the public interest in the same information, and where the
non-sealing of this information would prejudice AMI and DSC through its public
disclosure and no less restrictive means exist to protect this narrowly
tailored request.
Defendant/Cross-Complainant Dollar Shave Club, Inc.’s Motion
for Summary Adjudication is:
GRANTED as to the First cause of action because AMI met its
burden on summary adjudication as to AMI’s non-entitlement to the Milestone
Award and AMI failed to make a rebuttal showing by failing to address this
issue altogether;
DENIED as to the Second cause of action because Defendant
DSC failed to carry its burden on summary adjudication; and
GRANTED as to the Third through Fifth causes of action
because Defendant DSC carries its burden on lack of damages to AMI on these
claims and Plaintiff AMI failed to make a converse showing; and
GRANTED as to the First through Third causes of action
because these issues at the heart of these claims have been resolved by this
Court’s orders here and on January 4, 2022.
Plaintiff Afshin Moghavem, Inc.’s Motion to Compel Deposition
of Michael Dubin is MOOT because it seeks to compel the deposition of Michael
Dubin as to the fraud claims alleged in the Second Amended Complaint and these
claims have been adjudicated as against Plaintiff AMI in this Order.