Judge Joel R Wohlfeil, Case 37-2018-00054834-CU-BT-CTL 2024-01-10 Tentative Ruling

Judge: Joel R Wohlfeil, Case: 37-2018-00054834-CU-BT-CTL, Date: 2024-01-10 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - January 04, 2024

01/05/2024 09:00:00 AM C-73 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Joel R. Wohlfeil

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Civil - Unlimited Business Tort Summary Judgment / Summary Adjudication (Civil) 37-2018-00054834-CU-BT-CTL AMINPOUR VS CALHOUN [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion for Summary Judgment and/or Adjudication, 10/19/2023

The Motion (ROA # 857) of Plaintiffs ASHKAN KING AMINPOUR and LARKING, INC. ('Plaintiffs') for summary adjudication of affirmative defense numbers 3 and 6 in the Answer to the First Amended Complaint ('FAC') filed by Defendants DAN FULKERSON and PAUL BATTA ('Defendants'), is DENIED.

Defendants' evidentiary objections (ROA # 1012) are OVERRULED.

Plaintiffs' evidentiary objections (ROA # 1015) are OVERRULED IN PART and SUSTAINED IN PART.

The objections are OVERRULED except as follows: Nos. 2 and 4 (hearsay only) are SUSTAINED.

Third Affirmative Defense The third affirmative defense alleges 'Plaintiffs are barred from recovering under any of their claims because Plaintiffs have acted unconscionably toward Defendants ... [and] have acted in bad faith and with reckless disregard for the safety and well-being of Defendants and of others, and therefore Plaintiffs are barred from recovery under the doctrine of unclean hands.' 'The defense of unclean hands is a doctrine that demands that Plaintiff act fairly in the matter for which he seeks a remedy. Meridian Financial Services, Inc. v. Phan (2021) 67 Cal. App. 5th 657, 685.

Plaintiff must come into Court with clean hands, and keep them clean, or Plaintiff will be denied relief, regardless of the merits of the claim. Id. The defense is available in legal as well as equitable actions. Id. The unclean hands doctrine is an equitable rationale for refusing Plaintiff relief where principles of fairness dictate that Plaintiff should not recover, regardless of the merits of his claim. Id. It is available to protect the Court from having its powers used to bring about an inequitable result. Id. The doctrine promotes justice by making Plaintiff answer for his own misconduct in the action. Id. The misconduct asserted in an unclean hands defense must be sufficiently related to the matter currently before the Court. Peregrine Funding, Inc. v. Sheppard Mullin Richter & Hampton LLP (2005) 133 Cal. App. 4th 658, 680.

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3019245 14 CASE NUMBER: CASE TITLE: AMINPOUR VS CALHOUN [IMAGED] 37-2018-00054834-CU-BT-CTL The misconduct which brings the unclean clean hands doctrine into operation must relate directly to the transaction concerning which the complaint is made, i.e., it must pertain to the very subject matter involved and affect the equitable relations between the litigants. Id. Any conduct that violates conscience, or good faith, or other equitable standards of conduct is sufficient cause to invoke the doctrine. Meridian Financial Services, Inc. v. Phan, supra.

The misconduct must also prejudicially affect the rights of the person against whom the relief is sought so that it would be inequitable to grant such relief. Id. The misconduct which brings the clean hands doctrine into operation must relate directly to the transaction concerning which the complaint is made, i.e., it must pertain to the very subject matter involved and affect the equitable relations between the litigants. Id. Any evidence of Plaintiff's unclean hands in relation to the transaction before the court or which affects the equitable relations between the litigants in the matter before the court should be available to enable the Court to effect a fair result in the litigation. Id. at 686.

Plaintiffs argue there no direct relationship as between Plaintiffs' claims in this action and the alleged wrongful conduct giving rise to this defense. However, whether Plaintiff Aminpour's purported transgressions sufficiently relate to his claims against Defendants remains disputed. The alleged interference and the alleged irregularities at Plaintiff's law firm are intertwined issues.

The Motion for summary adjudication is not persuasive on this basis.

Sixth Affirmative Defense The sixth affirmative defense alleges, in part: 'Defendants ... are entitled to set off against any amounts awarded to Plaintiff(s) on their First Amended Complaint, or any cause of action therein, the amounts for which Plaintiff(s) are legally and equitably obligated to pay Defendants for claims Defendants have against Plaintiffs, as described in detail below ....' 'Where cross-demands for money have existed between persons at any point in time when neither demand was barred by the statute of limitations, and an action is thereafter commenced by one such person, the other person may assert in the answer the defense of payment in that the two demands are compensated so far as they equal each other, notwithstanding that an independent action asserting the person's claim would at the time of filing the answer be barred by the statute of limitations.' Code Civ.

Proc. 431.70.

Section 431.70 permits Defendant in a civil action to assert a claim for relief in an answer and allege, in effect, that the defense claim constituted prior payment for Plaintiff's claim and therefore should be set off against any award in Plaintiff's favor. Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal. 4th 189, 192.

The general rule is that a setoff must rest on a claim enforceable in its own right. R. M. Sherman Co. v. W. R. Thomason, Inc. (1987) 191 Cal. App. 3d 559, 563.

The key to setoff is the requirement of mutuality. Prudential Reinsurance Co. v. Superior Court (1992) 3 Cal. 4th 1118, 1127.

To be mutual, the debts must be due to and from the same persons in the same capacity. Id. In this case, the evidence presented by the parties results in disputed issues of material fact as to whether Plaintiff Aminpour was a party to an oral agreement for the payment of referral fees linked to the Calendar No.: Event ID: TENTATIVE RULINGS

3019245 14 CASE NUMBER: CASE TITLE: AMINPOUR VS CALHOUN [IMAGED] 37-2018-00054834-CU-BT-CTL internet marketing platform. Whether Plaintiff is an alter ego of the law firm is disputed. Plaintiff Aminpour, individually, acted as a guarantor of performance under the written separation agreements.

Therefore, the existence of mutuality of an obligation is a material disputed fact.

Plaintiffs are not requesting that this action be submitted to binding arbitration. Plaintiffs fail to cite any legal authority for the proposition that an arbitration agreement precludes an action in court if there is no request for arbitration. Plaintiff Aminpour appears to have waived his right to enforce the arbitration clause by voluntarily participating in this lawsuit.

Plaintiffs also argue that the claim for the payment of referral fees linked to the internet marketing platform agreement is precluded by the applicable rules of professional conduct. Specifically, the applicable rules regulate fee division agreements between lawyers who are not in the same firm.

However, disputed facts exist supporting the payment of at least some fees pursuant to a fee division agreement that existed when Plaintiff and Defendants were in the same law firm.

Plaintiffs also argue Defendants waived any right to seek the payment of referral fees linked to the internet marketing platform agreement when they executed the separation agreements. However, this argument is not persuasive to the extent the separation agreements were entered into with a different party (the law firm).

Also, '[p]arties who have totally breached a contract cannot force performance on the injured parties.' Coughlin v. Blair (1953) 41 Cal. 2d 587, 603.

To the extent a dispute exists as to whether Plaintiff law firm breached the agreement, this may render the agreements unenforceable.

Plaintiffs also argue Defendants' claim premised on a breach of the internet marketing platform agreement is barred by the applicable statute of limitations.

As set forth above, section 431.70 permits Defendant to assert time barred claims as a setoff if the claims were not time barred at an earlier time when Plaintiff's claim was already in existence. An action based on the alleged breach of an oral contract must be brought within two years after its accrual. Code Civ. Proc. 339(1).

A contract claim accrues when Plaintiff discovers, or could have discovered through reasonable diligence, the injury and its cause. Angeles Chemical Co. v. Spencer & Jones (1996) 44 Cal. App. 4th 112, 119.

A cause of action ordinarily accrues when, under the substantive law, the wrongful act is done and liability arises, i.e., upon the occurrence of the last fact essential to the cause of action. Id. at 120.

Defendants claim they initially entered into the oral internet marketing platform agreement during their employment, which ended in April 2016. Plaintiffs' argument is based on the premise that the claim must have accrued prior to the termination of Defendants' employment with the law firm. However, no evidence is cited establishing, without dispute, that a claim could not have accrued after the employment ended. Thus, this argument is not persuasive.

In sum, both contract claims could conceivably support a set off claim. The facts supporting these claims remain disputed. Therefore, the Motion for summary adjudication is not persuasive on this basis.

Given this conclusion, it is not necessary to address the other bases for the set off defense (i.e., tort claim and interference with economic advantage).

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