Judge: Gail Killefer, Case: 19STCV19669, Date: 2022-09-15 Tentative Ruling
Case Number: 19STCV19669 Hearing Date: September 15, 2022 Dept: 37
HEARING DATE: September 14, 2022
CASE NUMBER: 19STCV19669
CASE NAME: Michael Eisenberg v. Chad McQueen, et al.
MOVING PARTY: Cross-Defendant, Phillips
Auctioneers, LLC.
RESPONDING PARTIES: Defendants/Cross-Complainant, Chad McQueen
and City National Bank, as Trustee of the Terry McQueen Testamentary Trust
TRIAL DATE: January 10, 2023
PROOF
OF SERVICE: OK
MOTION: Cross-Defendants’
Motion for Summary Judgment
OPPOSITION: August 31, 2022
REPLY: September 9,
2022.
Tentative: Phillips’ motion is granted. Phillips
is to give notice.
Background
This action arises out of a letter sent on June 5, 2018, on
behalf of Defendant Chad McQueen (“McQueen”) and the Estate of actor Steve
McQueen, disputing the origins of a Rolex watch. Michael Eisenberg
(“Plaintiff”) alleges that he and non-party Phillips Auction (“Phillips”)
entered into an agreement on or about August 2, 2017, wherein Phillips agreed
to auction off a Rolex Submariner watch (the “Watch”) owned by Plaintiff which
had allegedly been purchased by Steve McQueen, engraved, and given to his then
stuntman, Loren James. Plaintiff alleges that Defendant’s letter challenged the
provenance of the Watch and asserted that Steve McQueen never owned the watch
and never gifted it to Loren Janes. The letter further requested that Phillips
withdraw the Watch from auction.
Plaintiff alleges that Defendant’s conduct caused Phillips
to eventually withdraw the Watch from auction, allegedly causing the Watch to
be devalued and any potential sale to fall through.
Plaintiff filed the operative Complaint on June 5, 2019,
alleging four causes of action: (1) tortious interference with contract; (2)
intentional interference with economic advantage; (3) negligent interference
with prospective economic advantage; and (4) trade libel.
On December 20, 2019, Defendant and Cross-Complainant McQueen
filed a Cross-Complaint against Phillips Auctioneers, LLC (“Cross-Defendant” or
“Phillips”). According to the
Cross-Complaint, Cross-Defendant negligently and recklessly began advertising
the watch on August 2, 2017, without verification of the Watch’s provenance.
The Cross-Complaint alleged five causes of action as follows: (1) equitable
indemnity on a comparative fault basis; (2) total indemnity; (3) apportionment
of fault; (4) declaratory relief; and (5) negligence.
On September 22, 2021, Cross-Complainants filed the Second
Amended Cross-Complaint (“SACC”). The
SACC now includes City National Bank (“City”), as Trustee of the Terry McQueen
Testamentary Trust as a Cross-Complainant. The SACC alleged the following
causes of action by both Cross-Complainants: (1) equitable indemnity on a
comparative fault basis; (2) total indemnity; (3) apportionment of fault; (4)
declaratory relief; (5) negligence; (6) negligent misrepresentation; (7)
intentional misrepresentation; (8) false advertisement; and (9) violation of Civil
Code § 3344.1.
In December 2021, the Phillips’ demurrer to the SACC was
sustained from the sixth to ninth causes of action.
On January 4, 2022, Cross-Complainant filed a Third Amended
Cross-Complaint (TACC) and changed the sixth cause of action to false
advertisement and the seventh cause of action to violation of Civil Code § 3344.1.
On April 6, 2022, Cross-Defendant’s demurrer to the sixth cause
of action of the TACC was overruled and the seventh causes of action was
sustained without leave to leave.
On August 11, 2022, the court denied McQueen Defendants’
motion for summary judgment as to Plaintiff’s claims (“August 11 Order”).
Phillips
now move for summary judgment or, in the alternative, summary adjudication on
all of the following issues:
1. Cross-Complainant’s
remaining six causes of action of the TACC are without merit because no triable
issues of material fact exist.
Phillips’ Notice in support of the motion for summary judgment
is not proper under CCP § 437c(f)(1), which provides: “A party may move for
summary adjudication as to one or more causes of action within an action, one
or more affirmative defenses, one or more claims for damages, or one or more
issues of duty.” The Notice is not delineated and addresses the six remaining
causes of action of the TACC altogether. Thus, the court will address the
parties’ arguments as to each cause of action.
McQueen Defendants’
Objections
Overruled: 3-4, 8-10, 12, 14, 25
Sustained: All remaining objections.
Objection 1-2: sustained,
hearsay without an exception.
Objection 3-4: overruled. Declarant
has personal knowledge and foundation of his own observations.
Objection 5: sustained,
Declarant lacks personal knowledge and foundation for claims regarding
Plaintiff’s reputation.
Objection 6: sustained, see
objections 1-2.
Objection 7: sustained, see
objection 5.
Objection 8-10: overruled,
see objection 3-4.
Objection 11: sustained,
hearsay without an exception; Declarant also lacks personal knowledge for these
claims.
Objection 12: overruled, see
objection 3-4.
Objection 13: sustained, see
objection 1-2.
Objection 14: overruled, see
objection 3-4.
Objection 15: sustained, see
objection 11.
Objection 16: sustained,
Declarant has not established personal knowledge of these claims.
Objection 17-22: sustained,
see objection 1-2.
Objections to Declaration
of Robby S. Naoufal
Objection 23-24: sustained,
see objection 1-2.
Objection 25: overruled, the
objection is overbroad as Cross-Complainants do not point to where objections
of lack of personal knowledge have been made in the deposition record and
further fail to specify why Declarant had no personal knowledge of any of the
claims made during his deposition.
Phillips’ Objections
Sustained: 1-29
Objection 1: sustained,
Declarant lacks personal knowledge and foundation, speculative.
Objection 2: sustained,
hearsay without an exception.
Objection 3-29: sustained,
see objection 1.
Discussion
I.
Legal Authority
“The purpose of the law of summary judgment is to provide
courts with a mechanism to cut through the parties' pleadings in order to
determine whether, despite their allegations, trial is in fact necessary to
resolve their dispute.” (Aguilar v. Atlantic Richfield Co. (2001)
25 Cal.4th 826, 843.) CCP § 437c(a) provides:
A party may
move for summary judgment in any action or proceeding if it is contended that
the action has no merit or that there is no defense to the action or
proceeding. The motion may be made at any time after 60 days have elapsed
since the general appearance in the action or proceeding of each party against
whom the motion is directed or at any earlier time after the general appearance
that the court, with or without notice and upon good cause shown, may
direct…. The motion shall be heard no later than 30 days before the date
of trial, unless the court for good cause orders otherwise. The filing of
the motion shall not extend the time within which a party must otherwise file a
responsive pleading.
A motion for summary judgment may 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.”
(CCP § 437c(c).)
“The motion shall be supported by affidavits, declarations,
admissions, answers to interrogatories, depositions, and matters of which
judicial notice shall or may be taken. The supporting papers shall
include a separate statement setting forth plainly and concisely all material
facts that the moving party contends are undisputed. Each of the material
facts stated shall be followed by a reference to the supporting evidence.
The failure to comply with this requirement of a separate statement may in the
court’s discretion constitute a sufficient ground for denial of the
motion.” (CCP § 437c(b)(1); see also Cal. Rules of Court, rule
3.1350(c)(2) & (d).)
“A party may move for
summary adjudication as to one or more causes of action within an action, one
or more affirmative defenses, one or more claims for damages, or one or more
issues of duty, if the party contends that the cause of action has no merit, that
there is no affirmative defense to the cause of action, that there is no merit
to an affirmative defense as to any cause of action, that there is no merit to
a claim for damages, as specified in Section 3294 of the Civil Code, or that
one or more defendants either owed or did not owe a duty to the plaintiff or
plaintiffs.” (CCP § 437c(f)(1).)
“Notwithstanding subdivision
(f), a party may move for summary adjudication of a legal issue or a claim for
damages other than punitive damages that does not completely dispose of a cause
of action, affirmative defense, or issue of duty pursuant to this subdivision.”
(CCP § 437c(t).)
In analyzing motions for summary judgment, courts must
apply a three-step analysis: “(1) identify the issues framed by the pleadings;
(2) determine whether the moving party has negated the opponent's claims; and
(3) determine whether the opposition has demonstrated the existence of a
triable, material factual issue.” (Hinesley v. Oakshade Town Center (2005)
135 Cal.App.4th 289, 294 (Hinesley).) CCP § 437c(p)(2) provides:
A defendant
or cross-defendant has met his or her burden of showing that a cause of action
has no merit if the party has shown that one or more elements of the cause of
action, even if not separately pleaded, cannot be established, or that there is
a complete defense to the cause of action. Once the defendant or
cross-defendant has met that burden, the burden shifts to the plaintiff or
cross-complainant to show that a triable issue of one or more material facts
exists as to the cause of action or a defense thereto. The plaintiff or
cross-complainant shall not rely upon the allegations or denials of its
pleadings to show that a triable issue of material fact exists but, instead,
shall set forth the specific facts showing that a triable issue of material
fact exists as to the cause of action or a defense thereto.
The court must “view the evidence in the light most
favorable to the opposing party and accept all inferences reasonably drawn
therefrom.” (Hinesley, 135 Cal.App.4th at p. 294; Dore
v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389 [Courts “liberally
construe the evidence in support of the party opposing summary judgment and
resolve doubts concerning the evidence in favor of that party.”].) A
motion for summary judgment must be denied where the moving party’s evidence
does not prove all material facts, even in the absence of any opposition (Leyva
v. Sup. Ct. (1985) 164 Cal.App.3d 462, 475) or where the opposition is weak
(Salasguevara v. Wyeth Labs., Inc. (1990) 222 Cal.App.3d 379, 384,
387).
II.
Factual Summary
“As noted above, this matter
regards an agreement to auction off the Watch, which was alleged to have been
purchased by Steve McQueen and given to stuntman Loren Janes (“Janes”) with an
inscription on the case back stating ‘TO LOREN, THE BEST DAMN STUNTMAN IN THE
WORLD. STEVE.’ ... Plaintiff had purchased the Rolex from Loren Janes’
daughter, Erika Janes in 2017. ... On August 2, 2017, Plaintiff entered into a
contract with Phillips to auction off the Watch.” (August 11 Order, 4.)
In the TACC, McQueen
Defendants allege that Phillips is “responsible, in whole or in part, for the
injuries, if any, suffered by [Eisenberg.]” (UMF 3.) The parties agree that the
Watch was purchased from Erika Janes on March 6, 2017, but dispute the
“supporting documentation” which purportedly supports the provenance of the
Watch. (MF 4.)
The parties agree that on
August 2, 2017, Phillips and Eisenberg entered into a written consignment
agreement (“Agreement”), whereby Eisenberg agreed to consign the Watch to
Phillips to offer at auction. (UMF 5.) The
parties do not dispute that on June 5, 2018, Arthur Barens, counsel
representing the estate of Steve McQueen, sent Phillips correspondence stating the
McQueen family “have confirmed that [Steve] McQueen never gifted the watch in
question to Loren Janes,” whereby he demanded Phillips “cease and desist from
this false advertising and misrepresentation of the subject watch.” (UMF 6.)
The June 5, 2018 letter affirmed that the McQueen family had “confirmed” the
history of the Watch though “comprehensive historic review of the watches that
Steve McQueen may have presented to his friends” and that Phillips’ “failure to
do so will damage the McQueen brand and perpetuate/disseminate this fraud on an
unsuspecting buyer or member of the public to whom the watch may be auctioned.”
(Id.)
After receiving the June 5,
2018 letter, Phillips sent correspondence to Barens on June 6, 2018, seeking to
clarify the objections to the legacy of the Watch. (UMF 26.) On June 8, 2018,
Barens sent further correspondence to Phillips describing Jake Ehrlich
(“Ehrlich”) as having “done extensive research on the provenance of the watch
which Phillips intend to market[.]” (UMF 27.) The parties dispute the nature of
Phillips involvement with Ehrlich’s further research following this June 8,
2018 letter. (MF 28-31.)
On September 14, 2018,
Phillips announced it would no longer offer the Watch for auction, but stated,
“we remain confident Steve McQueen gave the watch to Loren Janes based on
further evidence and testimonials from people close to Steve McQueen and Loren
Janes.” (MF 7.)
McQueen Defendants allege
Phillips proximately caused damages to the Defendants by failing to verify the
provenance of the Watch before advertising for auction, and that the McQueen
brand has suffered damages since they “expended time and resources to evaluate
the provenance and advise Cross-Defendant, and by extension expected auction
bidders, that the provenance... could not be confirmed...” (UMF 8.)
McQueen Defendants had not
purchased the Watch or entered into an agreement with Phillips to auction the
Watch on their behalf; McQueen Defendants did not stand to benefit in any way
from the sale of the Watch/ (UMF 9-11.)
The parties further dispute
the process of establishing the provenance of the Watch by Plaintiff, and
Phillips’ conduct in establishing said legacy before putting the Watch for
auction. (UMF 12-21.)
“When asked how he knows when Steve McQueen memorabilia is
not authentic, Chad responded, ‘Because I know.’ When asked to clarify if ‘that
[is] just based on your own personal recollection?’ Chad responded, ‘My
knowledge.’” (MF 36.) When McQueen was asked for further support for his
contention, McQueen stated “Well, I have seen gifts my dad has given to other
people and how they appreciate what he did for them. And that was something you
could feel. And I didn't get that sense at all on this. Nor does my mother.”
When asked, “Is there anything else?” Chad testified, “No.”” (MF 37.)
McQueen Defendants dispute
the analysis done by Phillips into the Watch’s history, which Phillips contends
shows the watch to have an engraving on the back of the era, dated
approximately to 1964, with parts of original Rolex manufacture and of the
1960s era. (MF 38-41.)
Further, McQueen was asked, “at the time you learned of the
auction, did you know for absolute certainty that the watch was not given by
your father to Mr. Janes?” (MF 42.) In response, McQueen stated, “Yes. I had a
deep feeling.” (Id.) After the
questioner clarified, “I'm not asking whether you had a deep feeling. I'm
asking whether you knew with absolute certainty,” McQueen again responded, “I
believed it. I believe that was not something my dad gave to him.” (Id.)
McQueen went on to reaffirm, “Yeah. Just instinctually I know what feels right
and what doesn't. That doesn't feel right. And my mom -- she doesn't buy it
either.” (MF 43.)
III.
Analysis
a.
First through Fourth
Causes of Action: Indemnity, Apportionment of Fault, Declaratory Relief
“‘The¿elements¿of¿a¿cause¿of¿action¿for
[equitable]¿indemnity¿are¿(1)¿a¿showing¿of¿fault¿on the¿part¿of
the¿indemnitor¿and (2)¿resulting¿damages¿to the¿indemnitee¿for which
the¿indemnitor¿is¿...¿equitably¿responsible.’¿” [citation omitted] (C.W.
Howe Partners Inc. v. Mooradian (2019) 43 Cal.App.5th 688, 700.)
“The comparative fault doctrine “is designed to permit the
trier of fact to consider all relevant criteria in apportioning liability. The
doctrine ‘is a flexible, commonsense concept, under which a jury properly may
consider and evaluate the relative responsibility of various parties for an
injury (whether their responsibility for the injury rests on negligence, strict
liability, or other theories of responsibility), in order to arrive at an
“equitable apportionment or allocation of loss.” ’ [Citation omitted.]”¿(Pfeifer
v. John Crane, Inc. (2013) 220 Cal.App.4th 1270, 1285.)
California courts
have recognized that “[t]he existence of an ‘actual controversy relating to the
legal rights and duties of the respective parties,’ suffices to maintain an
action for declaratory relief.”¿ (Ludgate Ins. Co. v. Lockheed Martin Corp.¿(2000)
82 Cal.App.4th 592, 605 (Ludgate).)¿
“Any person
interested under a written instrument, ... or under a contract, or who desires
a declaration of his or her rights or duties with respect to another, or in
respect to, in, over or upon property,¿ ... 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 in the premises, including a determination of
any question of construction or validity arising under the instrument or
contract."¿ (Ibid., quoting CCP § 1060.)¿¿¿¿
Phillips contend that in order to succeed on the first four
causes of action, “Defendants must show that Eisenberg could prevail on these
claims directly against Phillips.” (Motion, 6; citing Children’s Hosp. v.
Sedgwick, (1996) 45 Cal. App. 4th 1780, 1787.) As such, Phillips contends
that since “the evidence indisputably shows that Eisenberg could not prevail
against Phillips on any of his claims that he asserts against Defendants, each
of Defendants’ first four causes of action against Phillips fail as a matter of
law.” (Motion, 7.) Because Eisenberg’s first three causes of action for the
tort of interference cannot “lie against a party to the contract,” Phillips
contends it is “equitably responsible for any damages Eisenberg may have
suffered.” (Motion, 7; citing Applied Equip. Corp. v. Litton Saudi Arabia
Ltd., (1994) 7 Cal.4th 503, 514; Woods v. Fox Broad. Sub., Inc.,
(2005) 129 Cal. App. 4th 344, 350.)
Phillips also contends it cannot be held to indemnify
McQueen Defendants as to Eisenberg’s claims of trade libel since “[n]either
Phillips nor any of its agents made the statements that form the basis of
Eisenberg’s trade libel claim.” (Motion, 8.) As such, Phillips maintains it
“cannot be held derivatively liable for this cause of action” as well. (Id.)
Further, Phillips contends “ the record is devoid of any evidence that shows
Phillips could be responsible for Eisenberg’s injuries...Eisenberg’s claims
stem from Defendants’ decision to challenge the provenance of the [Watch];
Phillips played no role whatsoever in that decision and therefore cannot share
any responsibility for it.” (Motion, 8-9.)
In opposition, McQueen Defendants first contend that
“Phillips’ [sic], in satisfaction of the first element, bears fault for
their June 4, 2018, Press Release falsely attributing a Loren Janes-owned Rolex
Submariner to Steve McQueen.” (Opp., 5.) McQueen Defendants further assert “there
are eight witnesses with personal knowledge who reject the provenance
attributed to the [Watch] that Phillips’ published to advertise for public
auction.” (Id.) However, as the personal knowledge and foundations of
these statements is not a question the court can weigh at this junction, the
court continues with McQueen Defendants’ contentions. McQueen Defendants
further contend that “the result of Phillips’ wrongful conduct, that is making
the Press Release containing false information public, directly gave rise to
this litigation. But for the Press Release, there could not and would not have
been the need for McQueen to dispute the alleged provenance.” (Id.)
Defendants contend Phillips has “directly injured Plaintiff” by “permitting the
public dissemination of a false provenance.” (Id.) However, McQueen
Defendants fail to explain how the causal chain as they described satisfies the
first element—namely, shows Phillips’ fault against any of Eisenberg’s claims.
McQueen Defendants also contend that,
regarding the trade libel claims, Phillips published these false statements
“with reckless disregard” for their truth or falsity, and the testimony,
declarations, and “additional evidence by film historians disputing the
provenance” of the Watch “unequivocally creates” a triable issue of material
fact that should be left to a jury to decide. (Opp., 6.) McQueen Defendants
contend Phillips had knowledge of the inaccurate provenance of the Watch, due
to Erika Janes’ alleged writing of the legacy of the Watch after the history of
the Watch was disputed. (Opp., 7.)
In reply, Phillips contends “Defendants’ indemnity claims
appear to be based on the theory that Eisenberg has not been injured and will
lose his case.” (Reply, 2.) As such, Phillips contends “[a]ssuming Defendants
are correct and Phillips’ provenance research failed to uncover defects in the
provenance provided by Eisenberg, Defendants will win against Eisenberg and
thereby lose their ability to obtain indemnity from Phillips.” (Id.) “Defendants
ignore the fact that in order to prevail on their indemnity claims, they must
show that Phillips is at fault for the injuries Plaintiff Eisenberg asserts
against Defendants, which they cannot do.” (Reply, 3.) Further, Phillips
contend that by arguing Phillips is derivatively liable for publishing a false
statement about the provenance of the Watch, McQueen Defendants presume
“Eisenberg will lose on his claims, in which event Defendants have no right to
indemnity.” (Reply, 4.) Phillips contends McQueen Defendants point to no
evidence which “show Phillips’ statements were ‘disparaging the quality of
[Eisenberg’s] property.’” (Id.) “Indeed, only Defendants’
statement disparaging the provenance of the [Watch] caused damage to
Eisenberg.” (Id.) The court agrees.
Here, even though the parties
again heavily dispute the sequence of events, the provenance of the watch, and
the truth behind the statements made regarding the provenance of the Watch,
McQueen Defendants incorrectly contend that since Phillips made such statements,
in contract with Eisenberg, to sell the Watch at auction, Phillips should
indemnify McQueen Defendants for damages they suffered, not whatever damages
Eisenberg was caused to suffer. Defendants point to no supporting authorities
for this interpretation of the equitable indemnity causes of action, and
cannot, since the failure of Eisenberg’s claims against McQueen Defendants
would necessarily mean the failure of McQueen Defendants’ indemnity claims
against Phillips.
Thus, even in viewing the evidence
in a light most favorable to the nonmoving party, the court finds questions of
law, here the application of indemnity claims and interference tort laws
against contracting parties, necessarily decide McQueen Defendants’ claims to
be without merit and without support in the law.
For these reasons, Phillips’ motion is granted with respect
to the first four causes of action.
b.
Fifth Cause of
Action: Negligence
Negligence
consists of the following elements: (1) the defendant owed the plaintiff a duty
of care, (2) the defendant breached that duty, and (3) the breach proximately
caused the plaintiff’s damages or injuries.¿ (Lueras¿v. BAS Home Loan
Servicing, LP¿(2013) 221 Cal.App.4th 49, 62 (Lueras).)¿ “The
existence of a duty of care owed by a defendant to a plaintiff is a
prerequisite to establishing a claim for negligence.”¿ (Nymark¿v. Heart
Fed.¿Savs. & Loan¿Ass’n¿(1991) 231 Cal.App.3d 1089, 1095.)¿ “Whether a
duty of care exists is a question of law to be determined on a case-by-case
basis.”¿ (Lueras, 221 Cal.App.4th at p. 62.)¿
Here, Phillips
contends it owed no actionable duty to McQueen Defendants in issuing its press
release regarding the Watch, as McQueen Defendants were a third party to the
contract between Phillips and Eisenberg and did not engage with Phillips to
auction, sell, purchase or attempt to purchase the Watch. (Motion, 9-10.)
Phillips also
contends it exercised due care in issuing the press release, relying on “the
provenance of the [Watch] as represented to it by Eisenberg and as supported by
extensive written records and its own expert review.” (Motion, 11.) Phillips
details the steps it took to investigate and inspect the watch, affirming
“Phillips also took steps to independent verify what Eisenberg and the
documents he provided had represented regarding the provenance of the [Watch].”
(Id.) Phillips further explains that even after McQueen Defendants’
counsel had referred Phillips to researcher Jake Ehrlich, “Phillips reviewed
Ehrlich’s work, to which Barens had referred, and recognized Ehrlich’s skill
and knowledge as an independent investigator, and therefore sought to aid in
Ehrlich’s investigation,” where Ehrlich concluded that “there is an extremely
high likelihood” that the Watch was gifted by Steve McQueen. (Motion, 12.) Phillips
further contends that McQueen Defendants “have failed to provide any concrete
evidence” to show any statements were negligently made, and when given several
chances to provide such evidence, Chad McQueen failed to do so. (Motion,
12-13.)
Lastly, Phillips
contends McQueen Defendants have failed to show that they have suffered any
damages proximately caused by Phillips’ conduct. (Motion, 14.) Phillips
contends that McQueen Defendants have failed to show what damages the McQueen
brand has suffered, and also contends McQueen Defendants has failed to show any
damages, expended “time and resources,” caused by Phillips’ alleged actions. (Id.)
Phillips contend that their statements regarding a future action of the Watch,
and their subsequent withdrawal of the Watch, could have only caused nominal
damages to McQueen Defendants. (Motion, 15-16.) Phillips contends that it
complied with the letter sent by McQueen Defendants’ counsel and did exactly as
was requested in withdrawing the Watch from watch, “thus discrediting any claim
that an unsuspecting buyer or the McQueen brand was nonetheless harmed by a
transitory press release regarding an auction that never took place.” (Motion,
16.)
In opposition, McQueen Defendants first contend that
Phillips owed a “general duty to exercise due care in publicly publicizing a
false provenance [to the Watch.]” (Opp., 9.) McQueen Defendants state that by
making the “Press Release containing false information public,” Phillips
“directly gave rise to this litigation.” (Id.) However, McQueen
Defendants again fail to explain how a causal chain here can lead to the
imposition of a duty of care.
McQueen Defendants contend that Phillips did not exercise
due care in publicizing the Watch before auction, because as a “world leading”
auction house, the “many glaring” “misrepresentation” of the Loren Janes letter
should have been “obvious.” (Opp., 10.) However, McQueen Defendants fail to
explain where such interpretations of industry practices can be applied, and
fail to provide supporting authorities for any contentions of heightened
standards of duty here.
McQueen Defendants also delve into the credibility behind
the Loren Janes, but as the court again cannot weigh credibility of evidence at
this junction, the court continues with its analysis. Instead, McQueen
Defendants point to declarations and a lack of endorsement by Chad McQueen as
“material facts,” when no such evidence is provided beyond declarations to
substantiate that these are factual contentions and questions. (Opp., 11.)
In Reply, Phillips correctly contends that Civil Code § 1714
cannot hold for the imposition of a duty onto Phillips here when only “economic
losses” have been suffered. (Reply, 4-5; citing S. Cal. Gas Leak Cases,
7 Cal.5th 391, 400 (2019).) Further, Phillips contends that the damages
suffered regard a “disgorgement of profits realized by Phillip’s [sic]
for false advertisement,” which constitutes an economic loss. (Id.;
citing MF 53-54, 56-62.) Phillips further correctly identifies that the
standard of care for negligence is determined only “after [the court] first has
determined that a legal duty exists.” (Reply, 6.) Phillips reiterates that it
owed no legal duty to McQueen Defendants. (Id.)
Further, Phillips contends any claims for a “disgorgement of
profits” shows Defendants “have not asserted any theory that they, themselves,
have suffered any harm or injury, nor is there any evidence in the record that
shows that they have suffered any harm or injury.” (Reply, 7.)
Here, viewing the evidence in the light most favorable to
the nonmoving party, the court finds no triable issues of material fact that
any duty was owed to McQueen Defendants by Phillips, or that Phillips
proximately caused any damages suffered by McQueen Defendants. McQueen
Defendants have failed to show any factual issues regarding whether a duty
existed to Defendants by Phillips, where Defendants were a third party to a
contract between Eisenberg and Phillips, and have failed to show any factual
questions regarding whether they suffered damages as a result of any alleged
actions by Phillips. Because Phillips exercised due care, even in the absence
of any cognizable duty, and complied exactly with McQueen Defendants’ requests,
as delineated by their counsel in the letter sent to Phillips, McQueen
Defendants’ claims of any damages are without merit. McQueen Defendants’
contentions ask this court to find damages caused by Phillips’ acquiescence of
McQueen’s requests, a difficult contention with no supporting authorities
provided.
For these reasons, Phillips’ motion is granted as to the fifth
cause of action.
c.
Sixth Cause of
Action: False Advertisement
California’s False Advertising Law (FAL), is set forth in Business
& Professions Code § 17500 as follows:
“It is
unlawful for any person, firm, corporation or association, or any employee
thereof with intent directly or indirectly to dispose of real or personal
property or to perform services, professional or otherwise, or anything of any
nature whatsoever or to induce the public to enter into any obligation relating
thereto, to make or disseminate or cause to be made or disseminated before the
public in this state, or to make or disseminate or cause to be made or
disseminated from this state before the public in any state, in any newspaper
or other publication, or any advertising device, or by public outcry or
proclamation, or in any other manner or means whatever, including over the
Internet, any statement, concerning that real or personal property or those
services, professional or otherwise, or concerning any circumstance or matter
of fact connected with the proposed performance or disposition thereof, which
is untrue or misleading, and which is known, or which by the exercise of
reasonable care should be known, to be untrue or misleading, or for any person,
firm, or corporation to so make or disseminate or cause to be so made or
disseminated any such statement as part of a plan or scheme with the intent not
to sell that personal property or those services, professional or otherwise, so
advertised at the price stated therein, or as so advertised. Any violation of
the provisions of this section is a misdemeanor punishable by imprisonment in
the county jail not exceeding six months, or by a fine not exceeding two
thousand five hundred dollars ($2,500), or by both that imprisonment and fine.”
Business & Professions Code § 17500 provides that it is
unlawful for a person or corporation to disseminate false or misleading
advertisements. To establish a FAL cause of action, Plaintiff must demonstrate
the advertisement was likely to deceive or mislead consumers. (See Brockey
v. Moore (2003) 107 Cal.App.4th 86, 98-99.)
As Cross-Defendants correctly contend, in order to succeed
in showing a claim for false advertisement, “a party must now (1) establish a
loss or deprivation of money or property sufficient to qualify as injury in
fact, i.e., economic injury, and (2) show that that economic injury was the
result of, i.e., caused by, the unfair business practice or false advertising
that is the gravamen of the claim.” (Kwikset Corp. v. Superior Court,
(2011) 51 Cal.4th 310, 322 (“Kwikset”).) Further, the Kwikset
court provided necessary elaboration, stating:
“In 2004, the electorate substantially
revised the UCL's standing requirement; where once private suits could be
brought by ‘any person acting for the interests of itself, its members or the
general public’ ... now private standing is limited to any ‘person who has
suffered injury in fact and has lost money or property’ as a result of unfair
competition.
...
The intent of this change was to
confine standing to those actually injured by a defendant's business practices
and to curtail the prior practice of filing suits on behalf of ‘ “clients who
have not used the defendant's product or service, viewed the defendant's
advertising, or had any other business dealing with the defendant....” (internal
citations omitted) (Kwikset, supra, at 320-22; citing Californians
for Disability Rights v. Mervyn's, LLC (2006) 39 Cal.4th 223, 227-8.)
Here, Phillips first contends that McQueen Defendants’
claims are without merit since they have not shown any evidence of any injuries
they have suffered in this case. (Motion, 17.) Phillips further contends that
McQueen Defendants have failed to show any evidence with regards to the second
element, causation. (Id.) Phillips contends McQueen Defendants have not
shown “that the economic injury was caused by Phillips’ allegedly false
advertising.” (Id.) Phillips cites Shaeffer v. Califia Farms,
LLC, (2020) 44 Cal. App. 5th 1125 for this contention. In Shaeffer, the
court clarified: “To prove the second element of causation, the plaintiff must
show that she ‘actual[ly] reli[ed]’ on the ‘allegedly deceptive or misleading
statement’ and that it ‘was an immediate cause" of her injury.’” (Shaeffer
v. Califia Farms, LLC, 44 Cal.App.5th 1125, 1137.) Here, Phillips contends
McQueen Defendants “have admitted that they did not rely on the allegedly false
statements in Phillips’ June 4, 2018 Press Release.” (Motion, 17; citing MF
47.) As such, Phillips contend McQueen Defendants have no standing to bring
forth the FAL claim. (Id.)
Second, Phillips contends that the only remedies available
for a FAL claim are “injunctive relief and restitution,” and McQueen Defendants
are not entitled to restitution “because there is no evidence that Phillips
gained anything from Defendants as a result of its allegedly false
advertising.” (Motion, 18; citing Veera v. Banana Republic, LLC, (2016) 6
Cal. App. 5th 907, 915.) Phillips argues that McQueen Defendants’ pointing to
121 news publications of the potential auction of the Watch still fails “to
identify any profits Phillips gained from online news articles covering a
scandal-ridden wristwatch that was ultimately withdrawn from auction.” (Motion,
18.) Further, Phillips contends that McQueen Defendants to not have any
ownership interest in any profits Phillips allegedly gained, and also do not
have “any ownership right to newsworthy reporting on the McQueen name.” (Motion,
19.) “Lost business” or any “lost market share” are not restitutionary damages
recoverable under the FAL here. (Id.; citing Lee v. Luxottica Retail
N. Am., Inc., (2021) 65 Cal.App.5th 793, 806.) Lastly, Phillips contends
that McQueen Defendants are further not entitled to any injunctive relief since
Phillips “has made clear that it does not intend to offer [the Watch] for sale
in the future.” (Motion, 19-20.)
In opposition, McQueen Defendants simply make the conclusory
claim that they have standing to bring the FAL claim, as “California’s unfair
competition law (“UCL”) protects both consumers and competitors by promoting
fair competition in commercial markets for goods and services.” (Opp., 12;
citing Bus. & Prof. Code § 17500.) However, McQueen Defendants’ do not
address Phillips’ arguments of standing as necessitating a showing of injury to
bring a claim.
Further, McQueen Defendants reiterate their earlier
contentions that information published about the Watch by Phillips was untrue,
and Phillips did not exercise reasonable care in publishing the allegedly false
statements. (Opp., 12-13.) McQueen Defendants also argue in support of the
first element, that “no one from the McQueen family endorsed the [Watch’s]
alleged provenance.” (Opp.,13.) The McQueen Defendants fail to show, however,
why an endorsement from the McQueen family would be the only way for Phillips
to exercise due care, or confirm the Watch’s provenance, here. McQueen
Defendants make conclusory allegations about the Watch but again fail to
provide evidence that would create an issue of a material fact. (Opp., 13.)
Further, McQueen Defendants suggest they are entitled to restitution since: (1)
“Phillips’ Press Release necessitated a response by McQueen, whose father,
Steve McQueen, was falsely associated with a Rolex Submariner watch advertised
for future public auction;” (2) “said response by McQueen disputing the false
provenance... conferred a benefit to the general public and/or the large class
of persons and/or watch enthusiasts who may have sought to purchase the
[Watch]...”; (3) the false provenance placed a burden on McQueen Defendants to
dispute Phillips’ contentions. (Opp., 14-15.) However, McQueen Defendants fail
to elaborate, or provide supporting authorities for, the contention that
McQueen Defendants conferred any benefit to potential buyers of the Watch by
disputing its provenance.
In reply, Phillips correctly contends McQueen Defendants do
not address that “there is no evidence that Defendants have suffered an economic
injury that was caused by Phillips’ conduct.” (Reply, 8.) Further, Phillips
again reiterates their contentions that Defendants have not suffered any
injury. (Id.) Phillips further contends they have failed to satisfy the
causation element of the FAL. (Id.)
Also, Phillips correctly points out that McQueen Defendants
rely on caselaw and supporting authorities from before Proposition 64 and the
2004 revisions to the FAL. (Reply, 9.) Specifically, Phillips correctly points
again to Lee and Kwikset as delineating the new limitations of
the FAL to include only claims for damages where claimant has an ownership
interest. (Id.) Phillips contends there is no public benefit to McQueen
Defendants’ FAL claims. (Reply, 10.) “[B]ringing the FAL claim was wholly unnecessary
because Phillips ceased the allegedly offending conduct long before this case
was ever filed.” (Id.) The court agrees.
As this court has already granted summary adjudication as to
the issue of any injuries suffered by McQueen Defendants, and as McQueen
Defendants have failed to show any evidence to create a triable issue of
material fact regarding their damages suffered and their reliance on Phillips’
conduct, this court finds McQueen Defendants to have no standing to bring this
FAL claim against Phillips as a matter of law. Thus, in viewing the evidence in
a light most favorable to the nonmoving party, McQueen Defendants’ sixth cause
of action is void of merit.
For these reasons, Phillips’
motion is granted as to the sixth cause of action.
Conclusion
Phillips’ motion is granted.
Phillips is to give notice.