Judge: Margaret L. Oldendorf, Case: 22GDCV00080, Date: 2023-09-08 Tentative Ruling

Case Number: 22GDCV00080    Hearing Date: September 8, 2023    Dept: P

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES

NORTHEAST DISTRICT

          I.        INTRODUCTION

          This is an action for breach of contract. Plaintiff Vege-Kurl, Inc. (Vege-Kurl) is a manufacturer of beauty products, including hand sanitizer. Defendant University Medical Pharmaceuticals Corp. (University) purchased hand sanitizer from Plaintiff. After placing orders for delivery of hand sanitizer twice over the course of months, Defendant partially paid for and accepted delivery of a third order that it placed. Plaintiff sues to recover the unpaid amount of that third order.

          Vege-Kurl moves for summary judgment. Because there is a triable issue of material fact as to whether the contract was cancelled, the motion must be denied.               

II.       LEGAL STANDARD

          Summary judgment is appropriately granted where it is shown that an action has no merit, or that there is no defense to the action. Code Civ. Proc. §437c(a). A cause of action has no merit if one of the following circumstances exists: (1) one or more necessary element(s) cannot be established; or (2) a defendant establishes an affirmative defense. Section §437c(o).

          A motion for summary judgment shall be granted where all the papers submitted show that there is no triable issue of material fact and that the moving party is entitled to judgment as a matter of law. Section 437c(c).

III.     ANALYSIS

          A. Summary of the Complaint

          Vege-Kurl sues University, alleging one cause of action for breach of contract and a common count for work, labor, services, and materials rendered at the request of Vege-Kurl.  The sum of $313,903.92 is allegedly owed. The common count alleges damages related to University’s alleged fraudulent misrepresentations to Vege-Kurl plus interest and lost profits. Attached to the Complaint are exhibits containing email correspondence and invoices.

          B. Procedural History

          There are some unique procedural issues with this motion. First, a few days after filing the motion, Vege-Kurl filed a Notice of Errata in which is made several changes to the damages calculations contained in the moving papers.

          The second issue is more consequential: When University filed its opposition papers, two copies of its Memorandum of Points and Authorities were filed, one wrongly labeled as a Separate Statement. No Separate Statement was actually filed.

          Third, Vege-Kurl did not receive University’s opposition papers until July 11, 2023, which was just three days prior to the initial hearing date. University’s opposition was due July 7, 2023.  According to the proof of service it filed the papers were served by overnight delivery via UPS on June 30, 2023. Several Vege-Kurl employee declarations were submitted, all verifying that the package of documents was not received until July 11, 2023. Given the lateness of the opposition papers, Vege-Kurl did not file a substantive reply.

          On July 12, 2023, Vege-Kurl filed a declaration reflecting that UPS provided a  confirmation of delivery on July 3, 2023.

          The hearing on the motion was continued twice, in an effort to address these issues addressed and to allow Vege-Kurl the opportunity to file a substantive reply. None was ever filed.

          On July 21, 2023, following the most recent hearing, University filed a copy of its Separate Statement.

          Therefore, the Court is in receipt of Vege-Kurl’s moving papers (with the errata); University’s opposition papers (including the late-filed Separate Statement), and Vege-Kurl’s non-substantive reply brief.  

          C. Evidence

          The evidence offered in support of the facts in the Separate Statement is based on the Declaration of Joe Desens; the evidence offered in opposition is based on the Declaration of Matt Stevens. Those declarations are summarized here:

          Declaration of Joe Desens in support of motion

¶2       Vege-Kurl is a company that specializes in manufacturing beauty and wellness products, including hand sanitizer.

¶3       On April 28, 2020, Defendant ordered 5,499,000 bottles of hand sanitizer for a total cost of $6,628,860, pursuant to Purchase Order 0903348. Exhibit 1. [Exhibit 1 contains a delivery schedule for the bottles to be sent to Defendant in batches from June 5, 2020, through July 24, 2020, along with the price to be paid at the time of each delivery.] The parties fulfilled their obligations under this order.

¶4       On July 9, 2020, Defendant ordered 204,000 bottles for $232,560 pursuant to Purchase Order 0903396. [Exhibit 1. To be delivered August 3, 2020.] The parties fulfilled their obligations under this order.

¶5       On August 11, 2020, Defendant ordered 2,570,000 bottles of hand sanitizer for a total cost of $2,557,150 pursuant to Purchase Order 0903414. [Exhibit 3 calls for deliveries between August 31, 2020, and January 8, 2021.]

¶10     On October 12, 2020, after receiving two invoices from Plaintiff for products pursuant to the purchase order, Defendant’s “controller,” Roya Amiri, emailed Plaintiff to confirm receipt of the product and invoices and to purportedly cancel the balance of the order. Exhibit 6. At that time there were 1,815,728 bottles outstanding and approximately that many being stored in Plaintiff’s warehouse. [Declarant explains at ¶8 that as with all customers, Plaintiff requires that bottles be supplied by the customer, and then Plaintiff stores them until they get filled with sanitizer.]

¶12     Prior to the alleged cancellation, Plaintiff had produced 132,353 pounds of product, to be used to fill the bottles.

¶13     Defendant has failed and refused to retrieve the bottles and pay for the hand sanitizer.

¶¶14-24 contain a calculation of Plaintiff’s damages.

          Declaration of Matt Stevens for Defendant

¶2       Between October and December 2020, I was the Executive Director for Defendant.

¶3       On or about October 3, 2020, I received invoice numbers 70641 and 870642 which totaled $487,438.56. Exhibit A.

¶4       After discussing the matter with Roya Amiri, Defendant’s Controller, I received an email that Amiri had sent to Joe Desens, the Secretary and General Manager for Plaintiff, and James Morse, its Vice President for Business Development, proposing to pay the invoices in four installments and to terminate any outstanding purchase orders effective immediately. Exhibit B.

¶5       Based on Morse’s confirmation that Plaintiff agreed, I worked with Amiri to make sure the two invoices were paid. Exhibit B.

¶6       I was the point person in dealing with Plaintiff’s representatives, including Desens and Morse, and I never had any discussions where they or anyone denied that the outstanding invoices had been terminated.

          D. A Triable Issue of Material Fact Precludes Summary Judgment

          The majority of the facts in the separate statement are not disputed. As to whether the order placed on August 11, 2020 (for 2,570,000 bottles at a cost of $2,557,150) for which Vege-Kurl issued Purchase Order 0903414 was canceled following the first two installments, Undisputed Material Fact 15 indicates that Amiri “purported” to cancel any further production, citing the Desens Declaration, ¶10 and Exhibit 6. University disputes the characterization that the cancellation was “purported,” urging that the parties did in fact terminate the agreement.  University cites the Stevens Declaration at ¶¶4-6 and Exhibits A-C. In other words, it is University’s position that the parties had an agreement to terminate the agreement.

          The existence of an on-going contractual relationship is a material fact at the heart of this litigation. The evidence offered is in conflict. Based on this triable issue of material fact, the motion for summary judgment must be denied.

E. The Alternative Request for Summary Adjudication is Denied

          California Rules of Court, rule 3.1350(b) provides, “If summary adjudication is sought, whether separately or as an alternative to the motion for summary judgment, the specific cause of action, affirmative defense, claims for damages, or issues of duty must be stated specifically in the notice of motion and be repeated, verbatim, in the separate statement of undisputed material facts.”

          While the caption of the motion indicates that summary judgment or in the alternative summary adjudication is sought, neither the notice of motion nor the separate statement identify any specific issue for adjudication. Consequently, adjudication cannot be granted.  

IV.     ORDER

          Vege-Kurl’s motion for summary judgment is denied on the basis that a triable issue of material fact exists as to whether the agreement was cancelled.

          Defendant University is ordered to give notice of this ruling.          

Dated:                                                              _______________________________

                                                                              MARGARET L. OLDENDORF

                                                                       JUDGE OF THE SUPERIOR COURT