Judge: H. Jay Ford, III, Case: 20SMCV01932, Date: 2022-08-30 Tentative Ruling

Case Number: 20SMCV01932    Hearing Date: August 30, 2022    Dept: O

Case Name:  nZania, LLC, et al. v. B.B. Dakota, Inc., et al.       

SUBJECT:                 MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION

MOVING PARTY:   Defendants Gloria Brandes, as an individual and as Trustee of the Brandes Trust dated November 28, 1994 and The Gloria Brandes 2019 ING Special Trust; Katharine Brandes, as an individual and as Trustee of The Katharine C. Brandes 2019 NGCC Special Trust; and Philip B. Brandes, as an individual and as Trustee of the Philip B. Brandes 2019 ING Special Trust

RESP. PARTY:         Plaintiffs nZania, LLC, Richard Koral and Ivan Spiers

TENTATIVE RULING

            Defendants Gloria Brandes, as an individual and as Trustee of the Brandes Trust dated November 28, 1994 and The Gloria Brandes 2019 ING Special Trust; Katharine Brandes, as an individual and as Trustee of The Katharine C. Brandes 2019 NGCC Special Trust; and Philip B. Brandes, as an individual and as Trustee of the Philip B. Brandes 2019 ING Special Trust’s (“Brandes Defendants”) Motion for Summary Judgment, or in the Alternative, Summary Adjudication is DENIED.

Plaintiffs’ Objections to Dec. of G. Brandes and Dec. of W. Steckbauer—OVERRULED.

Brandes Defendants’ Objections to Dec. of I. Spiers—SUSTAIN as to Objection 7 and OVERRULED as to remaining.  The cited declaration testimony does not clearly contradict the discovery responses cited by Brandes Defendants. 

Brandes Defendants’ Objections to Dec. of W. D’Angelo—The Court does not rule on these objections as they are not material to its ruling.  CCP §437c(q).

Brandes Defendants’ Objections to Dec. of R. Koral—OVERRULED. 

I.  Triable issues of fact remain as to the element of justifiable reliance

            “Generally, the question of whether reliance is justifiable is one of fact.  But the issue may be decided as a matter of law if reasonable minds can come to only one conclusion based on the facts.  Thus, in such instances where the absence of justifiable reliance is one of law, summary judgment or summary adjudication is an appropriate vehicle.”  Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4th 1178, 1194,

            “A plaintiff establishes reliance when the misrepresentation or nondisclosure was an immediate cause of the plaintiff's conduct which altered his or her legal relations, and when without such misrepresentation or nondisclosure he or she would not, in all reasonable probability, have entered into the contract or other transaction.  Reliance can be proved in a fraudulent omission case by establishing that had the omitted information been disclosed, the plaintiff would have been aware of it and behaved differently.”  Id. at 1193-1194.

            “Although a plaintiff's negligence in failing to discover the falsity of the statement or the suppressed information is not a defense to fraud, a plaintiff's particular knowledge and experience should be considered in determining whether the reliance upon the misrepresentation or nondisclosure was justified.  If the conduct of the plaintiff in the light of his own intelligence and information was manifestly unreasonable he will be denied a recovery.”  Id. at 1194.

            A.  Brandes Defendants submit evidence that Plaintiffs entered into the 2019 Agreement based on their evaluation of their rights under the 2008 Agreement, not the existence or nonexistence of a pending sale

            Brandes Defendants move for summary judgment of the 1^st cause of action for fraud, 2^nd cause of action for conspiracy and 3^rd cause of action for restitution based on lack of justifiable reliance.  Plaintiffs’ 1st through 3^rd causes of action are based on Gloria Brandes’ alleged fraudulent misrepresentations and omissions of material fact made to Plaintiff Spiers during a 6-19-19 meeting. 

            According to Brandes Defendants, the causes of action fail, because Plaintiffs did not rely on any statements or omissions by her during the 6-19-19 meeting.  To negate the element of justifiable reliance, Brandes Defendants submit (1) the 2019 Agreement, which contains a “representations and warranties” clause stating that Plaintiffs did not rely on Brandes Defendants’ statements in executing the agreement; (2) evidence that Plaintiffs made inquiries regarding the status of BB Dakota and Gloria Brandes’ intention to sell it, separate and apart from Gloria’s statements regarding those issues; and (3) Spiers’ deposition testimony regarding Plaintiffs’ assessment of the 2008 Agreement.

            Brandes Defendants fail to negate the allegation of justifiable reliance based on the “representations and warranties” language in ¶4 of the 2019 Agreement.  See FAC, Ex. 1, ¶4 (“Each party expressly represents and warrants to the other parties that it is not relying on any oral or written representations, warranties, covenants or agreements outside of this Agreement (and expressly disclaims any such representations, warranties, covenants or agreements).”)  Plaintiffs are alleging that the 2019 Agreement was fraudulently induced.  Brandes Defendants therefore cannot rely on the agreement itself to establish the absence of fraud. 

            Brandes Defendants fail to negate justifiable reliance based on Plaintiffs’ independent inquiries of Jeffrey Kapor regarding BB Dakota and whether Gloria Brandes was going to sell it. 
The mere fact that Plaintiffs attempted to corroborate Gloria’s statements does not negate their reliance on those statements.  This is particularly true given that Kapor independently corroborated Gloria’s statements and stated there was “nothing positive as of yet.”  See Brandes Defendants SSUMF Nos. 42-47. 

            However, Brandes Defendants negate Plaintiffs’ allegations of justifiable reliance based on Spiers’ deposition testimony.  Spiers testified that Plaintiffs accepted $800,000 in satisfaction of their right to the 13% Contingency Payment after reviewing the 2008 Agreement and determining that Plaintiffs could end up with nothing if Gloria transferred ownership to related entity, including a trust or relative.  See Brandes Defendants’ MSJ, Dec. of W. Steckbauer, Ex. I, Spiers Deposition, 270:9-17, 273:1-13.  Spiers testified that Gloria stated during the 6-19-19 meeting she could potentially transfer BB Dakota to her children.  Id. at 273:1-13.  Based on Spiers’ testimony, a jury could conclude Plaintiffs entered into the 2019 Agreement because they believed they could potentially receive nothing if Gloria chose to transfer her interest to her children, an issue unrelated to the existence of a pending sale.  Brandes Defendants therefore satisfy their burden on summary judgment by negating the allegation of justifiable reliance.

            B.  Plaintiffs raise triable issues of fact regarding justifiable reliance

            In response, Plaintiffs raise a triable issue of fact on the issue of justifiable reliance.  As discussed in connection with Plaintiffs’ Motion for Summary Judgment (MSJ), there is a fundamental dispute regarding what transpired during the 6-19-19 meeting, including what precisely Gloria said to Spiers.  See Plaintiffs’ Response to Defendants’ SSUMF Nos. 30-35. 

            Brandes Defendants submit evidence that only Spiers and Gloria were at the meeting.  Brandes Defendants submit evidence that Gloria responded, “Absolutely” when Spiers asked her if she was planning to sell the business.  See Defendants’ SSUMF No. 34; Defendants’ Motion, Dec. of W. Steckbauer, Ex. H, G. Brandes Depo., 160:3-15; 163:11-18; 181:19-182:2; 183:6-19; 164:7-10; 177:14-21; 185:3-8; Dec. of Brandes, ¶12. 

            In contrast, Plaintiffs maintain Ann Fong, BB Dakota’s CFO was at the meeting, and that Gloria stated “I’m not selling this company” in response to Spiers’ statement that he heard a rumor that a sale of BB Dakota was pending.  See Plaintiffs’ Separate Statement of Disputed and Undisputed Material Facts in Opposition to Brandes Defendants’ MSJ, Response to SSUMF No. 34 and Additional Material Fact, P22; Plaintiffs’ Opposition, Dec. of I. Spiers, ¶9.  Plaintiff Spiers testifies that Gloria brought Fong into the meeting and instructed her to confirm for Spiers that no sale was pending, which Fong did.  See Plaintiffs’ Additional Material Fact, P22; Plaintiffs’ Opposition, Dec. of Spiers, ¶9; Ex. 12, Spiers Depo., 163:16-165:1. 

            In addition, Spiers testifies that he would never have entered into the 2019 Agreement if he had been made aware of either BB Dakota’s negotiations with Madden.  See Plaintiffs’ Opposition, Dec. of I. Spiers, ¶14.  Spiers testifies he “would never have entered into the 2019 Agreement by which nZania gave up the right to receiver over $3 million in return for only $800,000.”  Id. Spiers testimony raises an issue of fact as to what motivated Plaintiffs to accept the 2019 Agreement and whether Plaintiffs would have acted differently were it not for Gloria’s omission.  

            Whether Plaintiffs justifiably relied on Gloria’s statements cannot be determined as an issue of law where the parties’ dispute what Gloria said.  In addition, Spiers testifies that he would not have accepted $800,000 in exchange for waiver of Plaintiffs’ right to a 13% Contingency Payment under the 2019 Agreement if he had known of the negotiations with Madden.  Brandes Defendants’ Motion for Summary Judgment based on lack of justifiable reliance is DENIED.

II.  Plaintiffs’ knowledge of Gloria’s desire to sell BB Dakota does not establish that any reliance was unjustifiable

            “Besides actual reliance, a plaintiff must also show justifiable reliance, i.e., circumstances were such to make it reasonable for the plaintiff to accept the defendant's statements without an independent inquiry or investigation.  The reasonableness of the plaintiff's reliance is judged by reference to the plaintiff's knowledge and experience.  Except in the rare case where the undisputed facts leave no room for a reasonable difference of opinion, the question of whether a plaintiff's reliance is reasonable is a question of fact.”  OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 864. 

            “Generally, a plaintiff will be denied recovery only if his conduct is manifestly unreasonable in the light of his own intelligence or information. It must appear that he put faith in representations that were preposterous or shown by facts within his observation to be so patently and obviously false that he must have closed his eyes to avoid discovery of the truth.  Even in case of a mere negligent misrepresentation, a plaintiff is not barred unless his conduct, in the light of his own information and intelligence, is preposterous and irrational.”  Id. at 865.

            Brandes Defendants submit evidence that Plaintiffs were clearly aware of Gloria’s longstanding intention to sell BB Dakota before the 6-19-19 meeting.  See Brandes Defendants’ SSUMF Nos. 12-21.  Such knowledge does not establish that it was preposterous for Plaintiffs to rely on what Gloria allegedly said to Spiers during the 6-19-19 meeting after he asked her if the rumor that she was selling the company was true:  “I’m not selling this company.”  See Plaintiffs’ Separate Statement of Disputed and Undisputed Material Facts in Opposition to Brandes Defendants’ MSJ, Response to SSUMF No. 34 and Additional Material Fact, P22; Plaintiffs’ Opposition, Dec. of I. Spiers, ¶9.  Based on Plaintiffs’ evidence, Gloria affirmatively stated she was not selling the company and invited Ann Fong in to confirm that statement.  Reasonable minds could conclude that Plaintiffs’ reliance was reasonable in light of these facts. 

III.  Brandes Defendants fail to establish that Gloria had no duty of disclosure or that she fulfilled that duty as an issue of law

Brandes Defendants also argue that Gloria had no duty to disclose BB Dakota’s negotiations with Madden.  The Court cannot find as an issue of law that Gloria’s failure to disclose negotiations with Madden violated a tort duty of disclosure or that Gloria’s failure to disclose was not deceptive.  The parties were engaged in a contractual relationship whereby Plaintiffs were entitled to 13% of the proceeds from a “qualifying sale” of BB Dakota.  Thus, although parties were not in a fiduciary or confidential relationship, they were both parties to a transaction.  In transactions that do not involve fiduciary or confidential relations, a duty to disclose material facts may arise in at least three instances: (1) the defendant makes representations but does not disclose facts that materially qualify the facts disclosed, or that render his disclosure likely to mislead; (2) the facts are known or accessible only to defendant, and defendant knows they are not known to or reasonably discoverable by the plaintiff; (3) the defendant actively conceals discovery from the plaintiff.  See Warner Constr. Corp. v. L.A. (1970) 2 Cal.3d 285, 294. 

            Gloria called for the 6-19-19 meeting to settle all claims between the parties arising from the 2008 Agreement, including any claims that Plaintiffs’ fraudulently induced Gloria into signing it and Plaintiffs’ claim to the 13% Contingency Payment.  See Defendants’ SSUMF No. 32; Plaintiffs’ Response to SSUMF No. 32.  Because the 13% Contingency Payment was dependent on a qualifying sale, reasonable minds could find that Gloria was obligated to disclose the negotiations with Madden during the parties’ settlement negotiations.  Reasonable minds could differ as to whether Brandes’ disclosure in response to Spiers’ inquiry fulfilled Defendants’ tort duty of disclosure. See e.g. Lovejoy v. AT&T Corp. (2004) 119 Cal.App.4th 151, 160 (reversing defense summary judgment; undisputed facts established that carrier failed to comply with statutory disclosure requirements but jury would have to determine whether undisputed monthly disclosure in phone bill was sufficient to fulfill tort duty of disclosure in concealment cause of action).  Brandes Defendants’ therefore fail to establish that Gloria’s failure to disclose the negotiations was not a deceptive or a fraudulent omission. 

            Moreover, Plaintiffs submit evidence that Gloria affirmatively misrepresented her plans or intention to sell BB Dakota.  According to Spiers, Gloria affirmatively stated, “I am not selling this company.”  See Plaintiffs’ Opposition, Dec. of I. Spiers, ¶9.  Gloria then allegedly called Ann Fong in to confirm for Spiers that no sale of BB Dakota was pending, which Ann Fong did.  Id.  Reasonable minds could determine that this was an affirmative misrepresentation given the undisputed fact that Brandes Defendants were in negotiations with Madden for sale of BB Dakota. 

            Triable issues of fact exist regarding Gloria’s alleged misrepresentation or concealment of material facts from Plaintiffs during negotiations of the 2019 Agreement.  Brandes Defendants’ Motion for Summary Judgment based on lack of a duty of disclosure is DENIED. 

IV.  Triable issues of fact remain as to the 2^nd cause of action for conspiracy to commit fraud and 3^rd cause of action for restitution

            Brandes Defendants move for summary judgment of the 2^nd cause of action for conspiracy to commit fraud and 3^rd cause of action for restitution on grounds that the 1^st cause of action for fraud fails.  The 2^nd cause of action for conspiracy to commit fraud and 3^rd cause of action for restitution depend upon Plaintiffs’ allegations of fraud.  Because Brandes Defendants’ motion is denied as to the 1^st cause of action, the motion is denied as to the 2^nd cause of action for conspiracy to commit fraud and 3^rd cause of action for restitution.

 Case Name:  nZania, LLC, et al. v. B.B. Dakota, Inc., et al.       

SUBJECT:                 MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION

MOVING PARTY:   Defendant BB Dakota, Inc.

RESP. PARTY:         Plaintiffs nZania, LLC, Richard Koral and Ivan Spiers

TENTATIVE RULING

            Defendant BB Dakota, Inc.’s Motion for Summary Judgment, or in the alternative, Summary Adjudication is DENIED. 

            Plaintiffs’ Evidentiary Objections to Dec. of K. Klinsport—OVERRULED

            BB Dakota’s Evidentiary Objections—(1)  Court declines to rule on Objection Nos. 1, 2, 27-38 per CCP §437c(q); (2) OVERRULED as to Objection Nos. 3, 4, 6, 7, 8, 9, 10, 11, 12, 14-26; (3) SUSTAIN as to Objection No. 13;

I. Triable issues of fact remain as to whether Gloria Brandes’ statements and failure to disclose the negotiations with Madden were fraudulent

            BB Dakota argues Gloria’s affirmative statements were 100% true and therefore not actionable fraud.  BB Dakota’s argument regarding the veracity of Gloria’s affirmative statements fails to account for Plaintiffs’ concealment allegations.  Plaintiffs allege fraudulent concealment based on Gloria’s failure to disclose that she was in negotiations with Madden.  BB Dakota’s evidence that Gloria’s statements were true do not negate the allegation that she fraudulently concealed the negotiations with Madden. 

            More fundamentally, as discussed in connection with nZania’s MSJ and Brandes Defendants’ MSJ, Plaintiffs dispute what Gloria said during the 6-19-19 meeting and what transpired.  See BB Dakota’s Separate Statement, SSUMF No. 12; Plaintiffs’ Separate Statement, Response to SSUMF No. 12.  According to Spiers, he mentioned to Gloria that he’d heard a rumor she was going to sell BB Dakota and her response was, “I am not selling this company.”  See Plaintiffs’ Opposition, Dec. of I. Spiers, ¶9.  If this was Gloria’s response, a jury could reasonably find that the statement was either a misrepresentation or that Gloria’s failure to disclose the pending negotiations with Madden to be a fraudulent omission of material fact. 

            BB Dakota also argues that Gloria was not obligated to disclose the negotiations with Madden, because Gloria and BB Dakota were not in a confidential or fiduciary relationship.  As discussed in connection with Brandes Defendants’ MSJ, a duty to disclose can arise outside the context of a fiduciary or confidential relationship.  “[W]here material facts are known to one party and not to the other, failure to disclose them is not actionable fraud unless there is some relationship between the parties which gives rise to a duty to disclose such known facts.  As a matter of common sense, such a relationship can only come into being as a result of some sort of transaction between the parties.  Thus, a duty to disclose may arise from the relationship between seller and buyer, employer and prospective employee, doctor and patient, or parties entering into any kind of contractual agreement.  All of these relationships are created by transactions between parties from which a duty to disclose facts material to the transaction arises under certain circumstances.”  LiMandri v. Judkins (1997) 52 Cal.App.4^th 326, 337. 

            The mere fact that Gloria and Plaintiffs were in an “adverse” relationship when they were negotiating the 6-19-19 Agreement does not automatically absolve her of any duty to disclose material facts.  Among the recognized relationships giving rise to a duty to disclose are the relationship of a seller and buyer, which is “adverse.”  Id.  In fact, LiMandri interprets the duty expansively and imposes it on “parties entering into any kind of contractual agreement.”  Id. 

            BB Dakota also argues the Confidentiality Agreement between Gloria and Madden obligated her to keep confidential “either the fact that discussions or negotiations are taking place…or the existence or contents of this LOI or Agreement….”  See BB Dakota’s SSUMF No. 4; BB Dakota’s Appendix of Exhibits, Ex. 9.  If Gloria had a tort duty to disclose the existence of pending negotiations, the Confidentiality Agreement would not relieve her of that duty.  The duty to disclose would run from Gloria to Plaintiffs, and Gloria could not unilaterally relieve herself of that duty by contracting with a third party.  Although the Confidentiality Agreement is relevant to Gloria’s motivations and the context of her statements, its existence does not negate the existence of a duty of disclosure. 

II.  Triable issues of fact exist as to knowledge of falsity and intent to defraud or induce reliance

            BB Dakota argues Plaintiffs cannot establish that Gloria’s affirmative statements were fraudulent, and Plaintiffs therefore cannot establish that Gloria had fraudulent intent.  Again, BB Dakota’s argument regarding lack of falsity and fraudulent intent do not account for the concealment allegations. 

III.  Triable issues of fact remain as to justifiable reliance

            BB Dakota’s arguments regarding justifiable reliance are identical to those made by Brandes Defendants.  For the same reasons stated in connection with Brandes Defendants’ motion for summary judgment on the issue, the Court finds triable issues of fact remain as to whether Plaintiffs justifiably relied on Brandes’ representations during the 6-19-19 meeting.

            Paragraph 4 of the 2019 Agreement does not negate the existence of justifiable reliance, because Plaintiffs are asserting that the entire agreement was fraudulently induced.  A claim for fraud in the inducement that would entitle Plaintiffs to rescind the 2019 Agreement under CC §1689(b)(1), including ¶4.  In cases of fraud, “representation” clauses such as ¶4 do establish the absence of justifiable reliance as a matter of law.  See Ron Greenspan Volkswagen, Inc. v. Ford Motor Land Development Corp. (1995) 32 Cal.App.4th 985, 996 (“The primary issue is whether a contract clause which states that the parties relied only on representations contained in the contract establishes, as a matter of law, that a party claiming fraud did not reasonably rely on representations not contained in the contract. We hold that such a per se rule is inconsistent with California law and reverse the summary judgment.”)

            For purposes of the concealment claim, there is also a dispute over whether Plaintiffs would have entered into the 2019 Agreement had they known of Defendants’ negotiations with Madden.  “Contrary to plaintiffs' assertion, it is not logically impossible to prove reliance on an omission. One need only prove that, had the omitted information been disclosed one would have been aware of it and behaved differently.”  Mirkin v. Wasserman (1993) 5 Cal.4th 1082, 1093. 

To negate reliance, BB Dakota submits Spiers’s deposition testimony that Plaintiffs agreed to $800,000, because Plaintiffs believed they could potentially receive nothing under the 2008 Agreement if Gloria transferred her shares to her children.  See BB Dakota’s Separate Statement of Material Facts, UMF No. 37; BB Dakota’s Appendix of Exhibit 2, Deposition of I. Spiers, 270:9-17, 272:21-273:13.  As discussed in connection with Brandes Defendants’ MSJ, this would satisfy BB Dakota’s burden as moving party.  If Plaintiffs accepted the $800,000 offer based only on their fear that they would receive nothing due to Gloria’s asset transfers,  this refutes the allegation that they relied on Gloria’s statements or that they would not have accepted the $800,000 had they known of the negotiations with Madden. 

In response, BB Dakota submits the declarations of both Spiers and Koral that they would not have entered into the 2019 Agreement and accepted the $800,000 payout had they known that Gloria was in the midst of negotiating a sale to Madden.  See Plaintiffs’ Separate Statement, Response to UMF No. 37; Plaintiffs’ Opposition, Dec. of I. Spiers, ¶¶13-14; Plaintiffs’ Opposition, Dec. of R. Koral, ¶¶10-11.  Spiers and Koral’s testimony rebut any evidence that they would have entered into the 2019 Agreement even if they had known of the negotiations.

            BB Dakota argues on reply that Spiers’s and Koral’s declarations contradict their sworn deposition testimony.  BB Dakota argues both Plaintiffs testified that they had received information that there was a pending sale prior to Spiers’s meeting with Gloria.  As discussed in connection with Brandes Defendants’ motion, knowledge of Gloria’s longstanding intention to sell and knowledge of a rumor that she was about to sell does not establish that it was preposterous for Plaintiffs to rely on what Gloria allegedly said to Spiers during the 6-19-19 meeting.  According to Spiers, after he asked her if the rumor that she was selling the company was true, Gloria responded “I’m not selling this company.”  See Plaintiffs’ Opposition, Dec. of I. Spiers, ¶9.  Based on Plaintiffs’ evidence, Gloria affirmatively stated she was not selling the company and invited Ann Fong in to confirm that statement.  Reasonable minds could conclude that Plaintiffs’ reliance was reasonable in light of these facts. 

            BB Dakota argues on reply that Plaintiffs concede Gloria stated “Absolutely” when asked if she was still planning on selling the company, citing Plaintiffs’ P24 and P25.  However, P24 and P25 do not concede that Gloria stated “Absolutely” in response to the inquiry.  P24 and P25 merely set forth what Gloria maintains occurred during the meeting.  Plaintiffs are disputing her version of events. 

            Triable issues of fact therefore remain as to whether Defendants justifiably relied on Gloria’s affirmative statements or if they would not have entered into the 2019 Agreement had they known of the negotiations with Madden.  BB Dakota’s MSJ based on the element of justifiable reliance is DENIED. 

IV. Triable issues of fact remain as to whether Plaintiffs suffered damages as a result of Gloria’s statements and nondisclosure

            BB Dakota argues that Plaintiffs cannot demonstrate damages as a result of Gloria’s statements or nondisclosures, because the statements were not false and Plaintiffs did not justifiably rely on any statements or nondisclosures. As discussed above, triable issues of fact remain as to whether the statements were false and whether Plaintiffs justifiably relied on Gloria’s statements or nondisclosures. 

V.  Triable issues of fact remain as to the restitution claim

            Plaintiffs’ 3^rd cause of action for restitution alleges that BB Dakota wrongful retained a portion of the proceeds paid under the 8-12-19 Stock Purchase Agreement.  See FAC, ¶63.  BB Dakota moves for summary judgment of the restitution claim on grounds that all monies from the SPA were paid directly by Madden to Gloria and her children’s trusts.  See BB Dakota’s Separate Statement, SSUMF No. 40; BB Dakota’s Appendix of Exhibits, Ex. 11, 8-12-19 Stock Purchase Agreement, ¶2.2.  Under ¶2.2 of the SPA, Madden was to deliver directly to Gloria and the trusts the initial purchase price with adjustments.  While ¶2.2 establishes that this adjusted amount was to be paid to Gloria and the trust directly, BB Dakota fails to establish that this adjusted amount was “all” the money paid under the agreement.

            Plaintiffs also submit evidence that BB Dakota is currently holding earnout amounts that will be paid to Gloria and the trusts.  See Plaintiffs’ Separate Statement, Response to SSUMF No. 40.  The SPA obligates Madden as buyer to pay earn-out payments to Gloria and the trusts as sellers.  Such amounts would therefore be money paid under the SPA.  Plaintiffs therefore raise a triable issue of fact as to whether “all” payments to sellers under the SPA were made to Gloria and the trust directly and whether BB Dakota is in possession of additional funds due thereunder. 

            BB Dakota argues there is no evidence that it was unjustly enriched.  However, Plaintiffs are alleging fraud against BB Dakota and Brandes Defendants.  There are triable issues of fact as to whether Defendants fraudulently deprived Plaintiffs of their 13% share of any proceeds from the Madden sale and whether BB Dakota is currently retaining some portion of those proceeds. 

            Triable issues of fact therefore remain as to whether BB Dakota is holding payments due under the SPA.  The motion for summary judgment is DENIED as to the 3^rd cause of action for restitution.