Judge Holly J. Fujie, Case 22STCV03159 2022-10-27 Tentative Ruling

MOVING PARTY: Defendant Rainbow Apparel Distribution Center Corp. (“Moving Defendant”)

This action arises out of various alleged fraudulent transfers. The currently operative first amended complaint (the “FAC”) alleges: (1) intentional misrepresentation; (2) intentional fraudulent concealment; (3) negligent misrepresentation; (4) breach of fiduciary duty (5) breach of written contract; (6) avoidance of constructive fraudulent transfers; (7) avoidance of constructive fraudulent transfers; (8) avoidance of constructive fraudulent transfers; (9) avoidance of constructive fraudulent transfers; (10) avoidance of constructive fraudulent transfers; (11) avoidance of constructive fraudulent transfers; (12) avoidance of actual fraudulent transfers; (13) avoidance of actual fraudulent transfers; (14) conversion; (15) conversion; (16) conversion; (17) accounting; (18) conspiracy to defraud; (19) indemnity and contribution; (20) intentional fraudulent concealment; (21) negligent misrepresentation; (22) aiding and abetting breach of fiduciary duty; (23) breach of written contract; and (24) aiding and abetting fraudulent transfers.[1]

In relevant part, the FAC alleges: Plaintiff A Plus Fabric, Inc. (“A Plus”) is a wholesale fabric importer that imports and sells fabrics to other fabric and garment companies (FAC ¶ 34.) Curious Apparel, Inc. (“Curious”) became a customer of A Plus in or around 2018. (Id.) Moving Defendant became a customer of Curious in at least 2018. (Id.)

In or around summer 2018, Defendant Stephen Jung (“Stephen”) and Plaintiffs began a business relationship. (See FAC ¶ 35.)[2] Beginning in October 2018, based on Stephen’s representation that Curious needed cash flow, Plaintiffs loaned money to Curious. (See FAC ¶¶ 19, 36.) In November 2018, Stephen submitted false financial information about Curious to Plaintiffs. (FAC ¶ 37.) Additional loans were made both to Curious and to Stephen later in 2018 and in 2019, the proceeds of which were fraudulently transferred among the Defendants who are entities or individuals associated with Stephen. (See FAC ¶¶ 39-50.)

On or about May 18. 2019, Curious’s warehouse and principal business office was damaged in a fire. (FAC ¶ 51.) Stephen purchased the inventory that was damaged by the fire (the “Insurance Inventory”) at an insurance auction about July 24, 2019. (FAC ¶ 54.) Stephen thereafter began to sell the Insurance Inventory. (FAC ¶ 55.) On information and belief, Stephen created fake invoices in order to falsely represent to Plaintiffs that the proceeds of the sales of the Insurance Inventory were being paid to Curious, when in reality, the Insurance Inventory was being sold to vendors under the names of Stephen’s affiliated entities. (See id.) On information and belief, Plaintiffs allege that approximately $1,000,000 of the Insurance Inventory was sold to Moving Defendant using fake invoices. (Id.)

In or around October 2019, Defendant Cargo Union, Co. Ltd. (“Cargo Union”) held a shipment belonging to Curious under the ruse that Cargo Union needed to be paid more money. (FAC ¶ 58.) On information and belief, this inventory was converted by Defendants and sold to Moving Defendant under the name of one of Stephen’s associated entity Defendants in this action. (Id.)

During their business relationship, Stephen would direct Moving Defendant to pay for the garments and textiles they purchased to an affiliated company of his choice, regardless of whether the company that received payment actually owned the garments. (FAC ¶ 60.) Throughout the relationship, Moving Defendant knew that Stephen was improperly diverting money owed to Curious to his other companies. (FAC ¶ 61.) In addition, from at least the summer of 2018 through the time Curious filed for bankruptcy on or about December 12, 2019, Moving Defendant would improperly charge back Curious for problems with orders outside of their purchase agreements. (See FAC ¶¶ 64-66.)

Curious and Moving Defendant entered into a written contract each time Moving Defendant purchased garments from Curious through Stephen (collectively, the “Purchase Agreements”). (See FAC ¶ 215, Exhibit L.)

On or about December 12, 2019, Curious filed a voluntary Chapter 11 bankruptcy petition. (FAC ¶ 66.) On or about February 24, 2020, Curious’s bankruptcy was converted into a Chapter 7 bankruptcy proceeding (the “Chapter 7 Proceeding”). (FAC ¶ 67.) On or about July 2, 2020, the Chapter 7 trustee (the “Trustee”) of Curious’s bankruptcy estate filed a complaint against Plaintiffs in the U.S. Bankruptcy Court for the Central District of California (the “Adversary Proceeding”). (FAC ¶¶ 3, 68.) Pursuant to a settlement agreement (the “Settlement Agreement”) entered into by Plaintiffs and Curious’s Trustee in the Adversary Proceeding, certain claims owned by the Trustee were assigned to Plaintiffs (the “Assigned Claims”). (See FAC ¶ 74.) The Assigned Claims include all of the Trustee’s interests in claims against third parties and any transferees or affiliates of the named third parties. (See id.)

Moving Defendant filed a demurrer (the “Demurrer”) to the seventh, ninth, 11th, 13th, 18th, and 20th through 24th causes of action on the grounds that the FAC fails to state facts sufficient to constitute a cause of action. Moving Defendant additionally filed a motion to dismiss (the “Motion”) the FAC against Moving Defendant on the grounds that Plaintiffs’ claims against Moving Defendant are governed by a contractual forum selection agreement.^{^[3]}

Moving Defendant has submitted two exhibits in connection with its challenges to the FAC: (1) purchase order agreements entered into between Curious and Moving Defendant during their business relationship; and (2) a copy of the Settlement Agreement entered into during the Adversary Agreement. Moving Defendant cites to these documents as evidence to support the Motion and also requests that the Court take judicial notice of them. (See Declaration of Jonathan Appel (“Appel Decl.”) ¶ 7; RJN Exhibits 1-2.) The Court DENIES Moving Defendant’s Request for Judicial Notice as to Exhibits 1 and 2. However, the Court notes that the Appel Declaration properly authenticates the documents included in Exhibits 1 and 2 to allow their consideration as evidence to support its arguments for the Motion.

Plaintiffs’ objections to the Appel Declaration numbers 2, 13, 18, 20, 24-26, 28, 29, 31, and 34 are SUSTAINED. Objections numbers 1, 3-17, 19, 21, 22, 27, 30, 32, and 33 are OVERRULED.

Under California Code of Civil Procedure (“CCP”) section 410.30, subdivision (a), when a court upon motion of a party or its own motion finds that in the interest of substantial justice an action should be heard in a forum outside this state, the court shall stay or dismiss the action in whole or in part on any conditions that may be just. (CCP § 410.30, subd. (a).) Under CCP section 418.10, subdivision (a)(2), a defendant, on or before the last day of his or her time to plead or within any further time that the court may for good cause allow, may serve and file a notice of motion for one or more of the following purposes to stay or dismiss the action on the ground of inconvenient forum. (See CCP § 418.10, subd. (a)(2).)

Forum non conveniens is “an equitable doctrine invoking the discretionary power of a court to decline the exercise of jurisdiction it has over a transitory cause of action when it believes that the action may be more appropriately and justly tried elsewhere.” (Stangvik v. Shiley, Inc. (1991) 54 Cal.3d 744, 751.) In California, the procedure for enforcing a forum selection clause is a motion to stay or dismiss for forum non conveniens pursuant to CCP sections 410.30 and 418.10, but a motion based on a forum selection clause is a special type of forum non conveniens motion. (Berg v. MTC Electronics Technologies¿(1998) 61 Cal.App.4th 349, 358.)

California favors contractual¿forum¿selection¿clauses¿so long as they are entered into freely and voluntarily. (Verdugo v. Alliantgroup, L.P.¿(2015) 237 Cal.App.4th 141, 146.) California law is in accord with the modern trend which favors enforceability of mandatory forum selection clauses. (Quanta Computer Inc. v. Japan Communications Inc.¿(2018) 21 Cal.App.5th 438, 444.) Where there is a mandatory forum selection clause, the test is simply whether application of the clause is unfair or unreasonable, and the clause is usually given effect without extensive analysis of factors relating to convenience. (Id. at 445.) California courts routinely enforce¿forum¿selection¿clauses¿even where the chosen forum is far from the plaintiff's residence. (Net2Phone, Inc. v. Superior Court¿(2003) 109 Cal.App.4th 583, 588 (“Net2Phone”).) A forum selection clause may also be enforced against a plaintiff who is not a party to the contract in question if the plaintiff is “closely related to the contractual relationship.” (Id.)

Nonetheless, California courts will refuse to defer to the selected forum if to do so would substantially diminish the rights of California residents in a way that violates our state's public policy. (Verdugo, supra, 237 Cal.App.4th at 147.) The party opposing enforcement of a forum selection clause ordinarily “bears the ‘substantial’ burden of proving why it should¿not¿be enforced.” (Id.) That burden, however, is reversed when the claims at issue are based on unwaivable rights created by California statutes. (Id.) In that situation, the party seeking to enforce the forum selection clause bears the burden to show litigating the claims in the contractually-designated forum will not diminish in any way the substantive rights afforded under California law. (Id. at 146.) A defendant can meet this burden only by showing the foreign forum provides the same or greater rights than California, or the foreign forum will apply California law on the claims at issue. (Handoush v. Lease Finance Group, LLC¿(2019) 41 Cal.App.5th 729, 736.)

In support of the Motion, Moving Defendant provides evidence of the terms and conditions (the “Terms”) of the Purchase Agreements which were not attached to the FAC as Exhibit L. (See Appel Decl. ¶¶ 5-7, Exhibit 1.)[4] The Terms for each individual Purchase agreement contain a forum selection clause stating:

“The laws of the State of New York shall govern the rights and duties of Buyer and Seller, notwithstanding its conflict of laws rules. Seller irrevocably: (i) submits to the jurisdiction of any state or federal court in the State and City of New York, for the purpose of any suit, action or other proceeding arising out of the goods referred to herein, this purchase order, or any agreements, or transactions contemplated thereby (each a “Proceeding”); (ii) agrees that all claims in respect of any Proceeding be heard and determined only in such court; (iii) waives to the fullest extent permitted by law, any immunity Seller has acquired, or may hereafter acquire from jurisdiction of any such court or from legal process therein; and (iv) agrees not to commence any Proceeding other than in such court, and waives to the fullest extent permitted by law, any claim that any such Proceeding is brought in an inconvenient forum.” (See Appel Decl., Exhibit 1 at ¶ 13.)

Plaintiffs do not provide evidence or argument to dispute the validity of the Terms as they relate to the Purchase Agreements or argue that they were unaware of them. Nor do Plaintiffs contend that enforcing the Terms would infringe upon an unwaivable right. Instead, Plaintiffs argue that: (1) the forum selection clause should not be enforced because neither they nor the Trustee of Curious’s bankruptcy estate were signatories to the Purchase Agreements; and (2) enforcing the forum selection clause would be unreasonable because as alleged in the FAC, a significant portion of the evidence to support their claims is in California and litigating this matter in New York may diminish their rights because of the risk that the fraudulent transfer claims would be barred by the New York statute of limitations.

A bankruptcy trustee is the representative of the bankrupt estate, and has the capacity to sue and be sued. (See 11 U.S.C. § 323.) Among the trustee's duties is the obligation to “collect and reduce to money the property of the estate.” (Smith v. Arthur Andersen LLP (9th Cir. 2005) 421 F.3d 989, 1002.) The “property of the estate” includes “all legal or equitable interests of the debtor in property as of the commencement of the case,” including the debtor's “causes of action.” (Id.) Thus, under the Bankruptcy Code the trustee stands in the shoes of the bankrupt corporation and has standing to bring any suit that the bankrupt corporation could have instituted had it not petitioned for bankruptcy. (Id.)

A bankruptcy trustee succeeds to claims held by the debtor “as of the commencement” of bankruptcy. (11 U.S.C. § 541, subd. (a)(1).) Section 541 of the Bankruptcy Code thus requires that courts analyze defenses to claims asserted by a trustee as they existed at the commencement of bankruptcy, and later events (such as the ouster of a wrongdoer) may not be taken into account. (Peregrind Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP (2005) 133 Cal.App.4th 658, 680.) The trustee succeeds only to such rights as the bankrupt possessed; and the trustee is subject to all claims and defenses which might have been asserted against the bankrupt but for the filing of the petition. (Id.) Likewise, an assignment carries with it all the rights of the assignor and the enforcement of the assignor’s rights by the assignee depends upon the rights of the assignor. (See Johnson v. County of Fresno (2003) 111 Cal.App.4th 1087, 1096.) The assignee stands in the shoes of the assignor, taking his rights and remedies, subject to any defenses which the obligor has against the assignor prior to the notice of the assignment. (Id.)

Here, Plaintiffs claims are largely alleged pursuant to their status as the assignees of Curious’s bankruptcy estate provided pursuant to the Settlement Agreement. (See FAC ¶ 74; Appel Decl., Exhibit 2 at ¶ 4(a).) Of the claims asserted against Moving Defendant, the FAC alleges that the 20th, 21st, and 24th causes of action harmed Plaintiffs independently in their individual capacities in addition to in their capacities as the Trustee’s assignees. (See FAC ¶¶ 190, 194, 225.)

To support their argument that the forum selection clause should not be enforced against them, Plaintiffs cite to Bancomer, S.A. v. Superior Court (1996) 44 Cal.App.4th 1450 (“Bancomer”). In Bancomer, the appellate court held in in order to be considered “so closely related to the contractual relationship” that it is entitled to enforce a forum selection clause, a nonsignatory defendant must show by specific conduct or express agreement that: (1) it agreed to be bound by the terms of the agreement; (2) the contracting parties intended it to benefit from the purchase agreement; or (3) there was sufficient evidence of a defined and intertwining business relationship with a contracting party. (Id. at 1461.)

Net2Phone, supra, involved an organizational plaintiff, who was acting as a private attorney general to allege violations of California’s Unfair Competition Law based on terms in the defendant’s contracts with customers. (See Net2Phone, supra, 109 Cal.App.4th 586-87.) The appellate court held: “Although [the plaintiff] is not itself a party to the contract, it has sued in a representative capacity challenging certain contractual terms. By so doing, [plaintiff] purports to assert the rights of those who are parties to the contract. If it prevails, [plaintiff] will succeed in altering the terms of the contract, and reap the fruits of victory including attorney's fees. [Plaintiff] is ‘closely related’ to the contractual relationship because it stands in the shoes of those whom it purports to represent. Its argument to the contrary is inconsistent with its position as a representative plaintiff. Were we to hold otherwise, a plaintiff could avoid a valid forum selection clause simply by having a representative non-party file the action.” (Id. at 589.)

Discussing Bancomer, supra, the Net2Phone court noted: “[Bancomer] involved a bank that had no relationship to the contractual dispute other than being thrust into a position as trustee, and which was attempting to enforce, not defeat, a forum selection clause…the bank in that case had nothing to gain from resolution of the contractual dispute.” (Id. at 588.)

Plaintiffs argue that this case is factually similar to Bancomer because as the assignees of the Trustee, they lack a relationship with any contractual dispute between Moving Defendant Curious. Based on the Trustee’s relationship to Curious’s rights based on its bankruptcy, and the subsequent application of these rights to Plaintiffs, the Court finds that this case is more analogous to the facts of Net2Phone than to Bancomer. The facts of this case are distinguishable from Bancomer because it is not disputed that Moving Defendant, the party seeking to enforce the clause, is a party to the Purchase Agreements that is therefore entitled to enforce their forum selection clause. Plaintiffs do not dispute that Curious was a party to the Purchase Agreements. Taken as a whole, the FAC alleges that the Purchase Agreements were the avenue through which Moving Defendant participated in Stephen’s web of fraudulent conveyances and deceptions. The language of the forum selection clause unambiguously requires Curious to litigate any claims related to the transactions contemplated by the Purchase Agreements in a New York court. Because Plaintiffs inherited the Trustee’s claims, and the Trustee acquired Curious’s claims as they existed against Curious at the time it filed for bankruptcy, Plaintiffs are bound by the terms of the forum selection clause that governs the Purchase Agreements.

Effective April 4, 2020, New York adopted the New York Uniform Voidable Transactions Act (the “NYUVTA”). (See NY Debt. & Cred. § 270 et seq. Under the NYUVTA, fraudulent transfer claims have a one-to-four-year statute of limitations. (See NY Debt. & Cred. § 278.) However, claims brought in New York based on transactions which occurred prior to the effective date of new Article 10 or based on a state law without a statute of repose will continue to be subject to New York's applicable statute of limitations. (Id.) This may also be the case with claims to avoid transactions based on any supplementary laws of New York or another state that are preserved by Section 280. (Id.)

The pre-NYUVTA statute of limitations for fraudulent conveyance claims is the later of: (1) six years from the alleged fraudulent conveyance; or (2) years from inquiry notice of the alleged fraudulent conveyance. (Avalon LLC v. Coronet Props. Co. (1st Dept. 2003) 306 AD2d 62, 63.)

Here, the transactions underlying Plaintiffs’ fraudulent transfer claims all occurred before April 4, 2020, mitigating Plaintiffs’ concerns about their ability to adjudicate their claims in a New York forum. Accordingly, the Court finds that Plaintiffs have not met their burden to show that the forum selection clause is unreasonable with respect to the claims alleged in their capacity as assignees of the Trustee. The Court therefore GRANTS the Motion to the FAC as alleged in Plaintiffs’ capacity as assignees. The Court DENIES the Motion to the 20th, 21st, and 24th causes of action to the extent that they allege distinct injuries Plaintiffs suffered as individuals. As Plaintiffs were not parties to the Purchase Agreements, they are not bound by the forum selection clause contained therein. The Court will accordingly analyze the legal sufficiency of these claims in its analysis of the Demurrer.

A demurrer tests the sufficiency of a complaint as a matter of law. (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1358.) The court accepts as true all material factual allegations and affords them a liberal construction, but it does not consider conclusions of fact or law, opinions, speculation, or allegations contrary to law or judicially noticed facts. (Shea Homes Limited Partnership v. County of Alameda (2003) 110 Cal.App.4th 1246, 1254.) With respect to a demurrer, the complaint must be construed liberally by drawing reasonable inferences from the facts pleaded. (Rodas v. Spiegel (2001) 87 Cal.App.4th 513, 517.) A demurrer will be sustained without leave to amend if there exists no reasonable possibility that the defect can be cured by amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

The elements of fraudulent concealment are: (1) the defendant must have concealed or suppressed a material fact; (2) the defendant must have been under a duty to disclose the fact to the plaintiff; (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff; (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact; and (5) as a result of the concealment or suppression of the fact, the plaintiff suffered damage. (Boschma v. Home Loan Center, Inc (2001) 198 Cal.App.4th 230, 248.) There are four circumstances that impose a duty on the defendant such that nondisclosure or concealment may constitute actionable fraud: (1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant has exclusive knowledge of material facts not known to plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations but also suppresses some material facts. (Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 310-11.) In transactions which do not involve fiduciary or confidential relations, a cause of action for non-disclosure of material facts may arise in at least three instances: (1) the defendant makes representations but does not disclose facts which materially qualify the facts disclosed, or which 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. (Id.)

The Court finds that the FAC does not sufficiently allege that Moving Defendant was under a duty to disclose Stephen’s wrongdoing to Plaintiffs. The FAC alleges that Moving Defendant had a duty to disclose information about Stephen’s wrongdoing because it was in a confidential relationship with Plaintiffs by virtue of its knowledge through its business transactions with Stephen and Curious that “Plaintiffs were effectively partners and creditors of Stephen and Curious from 2018 to 2019.” (FAC ¶ 189.) The Court finds that this allegation is conclusory and insufficient to impose a duty on Moving Defendant.

Plaintiffs have not set forth facts to show that the deficiencies in the FAC can be remedied by amendment. The Court therefore SUSTAINS the Demurrer to the 20th cause of action without leave to amend.

The elements of intentional misrepresentation are: (1) misrepresentation; (2) knowledge of falsity; (3) intent to defraud, i.e., to induce reliance; (4) justifiable reliance; and (5) resulting damage. (Golden Eagle Land Investment, L.P. v. Rancho Santa Fe Assn. (2018) 19 Cal.App.5th 399, 428.) Each element must be alleged with particularity. (Id.) The facts required to be pled are facts that show how, when, where, to whom, and by what means the representations were tendered. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

The elements of negligent misrepresentation are similar to those of intentional misrepresentation, except the plaintiff does not need to allege that the defendant made an intentionally false statement, but simply one as to which he or she lacked any reasonable ground for believing the statement to be true. (Bains v. Moores (2009) 172 Cal.App.4th 445, 454.)

A negligent misrepresentation claim therefore requires a positive assertion, not merely an omission. (See Vega v. Jones, Day, Reavis & Pogue (2004) 121 Cal.App.4th 282, 291, n. 6.)

Here, the FAC vaguely alleges that Moving Defendant made both affirmative misrepresentations and concealed the facts referenced in the 20th cause of action. As alleged, neither is sufficient to state a claim, as a negligent misrepresentation claim requires a positive assertion and is subject to the heightened pleading standard, and the FAC does not allege anything specific about any affirmative misstatements of fact made by Moving Defendant. Plaintiffs have not set forth facts to show that the deficiencies in the FAC can be remedied by amendment. The Court therefore SUSTAINS the Demurrer to the 21st cause of action without leave to amend.

California imposes liability on one who aids and abets the commission of an intentional tort if the person: (1) knows the other's conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other to so act; or (2) gives substantial assistance to the other in accomplishing a tortious result and the person's own conduct, separately considered, constitutes a breach of duty to the third person. (Berger v. Varum (2019) 35 Cal.App.5th 1013, 1025.)

The only allegation to support Moving Defendant’s liability under the 24th cause of action independent of its alleged liability to Curious is the allegation that Moving Defendant aided and abetted the fraudulent transfers alleged in the FAC by concealing them from Plaintiffs. (See FAC ¶ 224.) The Complaint does not, however, allege that Moving Defendant knew of legal duties owed to Plaintiffs by Stephen or Curious (for example, the breach of fiduciary duty claim is only alleged with respect to a duty owed to Curious). Furthermore, as with the fraudulent concealment claim, the FAC does not adequately allege an independent duty that Moving Defendant owed to Plaintiffs.

Plaintiffs have not set forth facts to show that the deficiencies in the FAC can be remedied by amendment. The Court therefore SUSTAINS the Demurrer to the 24th cause of action without leave to amend.

In consideration of the current COVID-19 pandemic situation, the Court strongly encourages that appearances on all proceedings, including this one, be made by LACourtConnect if the parties do not submit on the tentative. If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to SMC_DEPT56@lacourt.org stating your intention to appear in person. The Court will then inform you by close of business that day of the time your hearing will be held. The time set for the hearing may be at any time during that scheduled hearing day, or it may be necessary to schedule the hearing for another date if the Court is unable to accommodate all personal appearances set on that date. This rule is necessary to ensure that adequate precautions can be taken for proper social distancing.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court

[1] The seventh, ninth, 11th, 13th, 18th, and 20th through 24th causes of action are alleged against Moving Defendant.

[2] The Court uses first names to distinguish persons with the same last name and intends no disrespect in doing so.

[3] The Demurrer and Motion were contemporaneously filed in a single document.

[4] The documents in Exhibit L show the invoices of the transactions between Curious and Moving Defendant. Moving Defendant provides evidence that each individual Purchase Agreement incorporated in the FAC were two-sided contracts that all included the Terms set forth above. (See Appel Decl. ¶¶ 6-7, Exhibit 1.)