Judge Michael E. Whitaker, Case Number: 21STCV39105, Date: 2025-02-24 Tentative Ruling

Judge: Michael E. Whitaker, Case: 21STCV39105, Date: 2025-02-24 Tentative Ruling

In or around June 15, 2020, Michael Landver (“Landver”) demanded arbitration on his own behalf and derivatively on behalf of nominal defendant, United Clinical Research, Inc. (“United”) against Peyman Banooni (“Banooni”); Stan Gersovich (“Gersovich”); Fred Shaham (“Shaham”) (Banooni, Gersovich, and Shaham shall collectively be referred to as the “Individual Defendants”); and Matrix Clinical Research, Inc. (“Matrix.”)

Landver alleges he and the Individual Defendants previously formed United, a company that conducts clinical trials for drug development, in which Landver claims a 25% ownership interest. Landver alleges the Individual Defendants later stopped working with Landver and secretly formed their own company, Matrix, to conduct such clinical trials. In so doing, Landver alleges the Individual Defendants violated their fiduciary duties to Landver and misappropriated United’s business, employees, revenue, contracts, and trade secrets which they used to start Matrix so they would no longer have to share profits with Landver.

The arbitration was demanded pursuant to the United Shareholder Agreement, entered into among Landver and the Individual Defendants. (Ex. 1 to Behjatnia Decl. at Ex. A.)

Matrix was subsequently dismissed from the arbitration proceedings on the grounds that it was not a party to the United Shareholder Agreement. (Behjatnia Decl. ¶ 4; Baranov Decl. ¶ 9.)

On July 6, 2020, the Individual Defendants filed counterclaims against Landver and California Clinical Research (“CCR”) alleging breach of contract; breach of fiduciary duty and misappropriation of trade secrets, which Landver answered on July 20, 2020. (Baranov Decl. ¶¶ 4-5.)

On or about August 16, 2021, the arbitrator dismissed the Individual Defendants’ counterclaims against CCR for lack of jurisdiction and granted issue sanctions against the Individual Defendants for their refusal to participate in discovery. (Baranov Decl. at ¶¶ 8-9; see also July 13, 2022 Baranov Decl. ¶ 14 and Exs. E-G attached thereto.)

According to the July 13, 2022 Baranov declaration filed in opposition to the Order to Show Cause why this case should not be stayed (“July 13, 2022 Baranov Decl.”), the arbitrator subsequently vacated all hearing dates and cut-offs in the arbitration and stayed the arbitration proceedings pending the resolution of this action. (July 13, 2022 Baranov Decl. ¶ 16.)

Based on documents Landver received in discovery in this action from Matrix’s accountant, David Gadoshian, CPA, Landver submitted a prove-up packet in the arbitration proceeding, with notice to the Individual Defendants, and on August 4, 2024, the arbitrator issued a ruling in Landver’s favor, awarding a sum of $2.6M against the Individual Defendants. (Baranov Decl. ¶¶ 21-22 and Ex. D.)

On August 11, 2021, United, Banooni, Gersovich, and Shaham filed a complaint in case number 21SMCV01358 against Landver and Thomas P. Hanrahan, an arbitrator for the American Arbitration Association, seeking a declaration that the arbitration proceedings were invalid because the terms of the arbitration provision had not been complied with and injunctive relief enjoining the arbitration proceedings. That case was voluntarily dismissed in its entirety without prejudice on March 13, 2023.[1]

On October 22, 2021, Landver filed a complaint in his individual capacity and derivatively on behalf of United against Matrix and the Individual Defendants in case number 21STCV39105 (“9105 action”), alleging eleven causes of action as follows:

The parties, allegations, and causes of action in the 9105 action are substantially similar to those filed in the arbitration proceedings.

On August 6, 2024, Landver requested voluntary dismissal of the Individual Defendants without prejudice, which the Court entered on August 7, 2024. On August 7, 2024, Landver requested voluntary dismissal without prejudice of Matrix, which the Court entered on August 8, 2024.

On November 29, 2011, United, Banooni, Gersovich, and Shaham filed a complaint against Landver and CCR in case number 21STCV43580 (“3580 action”) for allegedly sabotaging United. The parties and causes of action are substantially similar to the counterclaims filed in the arbitration proceedings.

The Individual Defendants Banooni, Gersovich, and Shaham subsequently dismissed their claims, leaving only United as a plaintiff. In the operative First Amended Complaint (“FAC”), filed on September 21, 2023, United alleges nine causes of action as follows:

On March 21, 2022, Landver moved to compel arbitration in the 3580 action, which the Court granted on June 24, 2022.

On September 28, 2022, Landver filed a notice of withdrawal of motion to compel arbitration and request to lift the stay. The Court granted the request and lifted the stay on October 4, 2022.

Subsequently, the Court consolidated for all purposes the 9105 and 3580 actions on October 11, 2023, designating the 9105 action as the lead case. (See October 11, 2023 Minute Order.)[2]

As discussed above, Landver voluntarily dismissed all named Defendants in the 9105 action in August 2024.

Landver and CCR (“Defendants”) now move for summary judgment, or in the alternative, summary adjudication as to the following causes of action alleged in the 3580 action:

2. The second cause of action for intentional interference with prospective economic advantage,

6. The sixth cause of action for comprehensive computer data access and fraud act,

7. The seventh cause of action for conversion of trade secrets, non-trade secret materials,

The Court rules as follows with respect to United’s objections to the Declaration of Michael M. Baranov, Esq.:

The Court rules as follows with respect to Defendants’ objections to Plaintiff’s Declaration:

“[T]he party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law[.] There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” ¿(Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850 (hereafter Aguilar).) ¿“[T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact.” ¿(Ibid.; Smith v. Wells Fargo Bank, N.A. (2005) 135 Cal.App.4th 1463, 1474 [summary judgment standards held by Aguilar apply to summary adjudication motions].)

Further, “the trial court may not weigh the evidence in the manner of a factfinder to determine whose version is more likely true. Nor may the trial court grant summary judgment based on the court's evaluation of credibility.” (Aguilar, supra, 25 Cal.4th. at p. 840 [cleaned up]; see also Weiss v. People ex rel. Department of Transportation (2020) 9 Cal.5th 840, 864 [“Courts deciding motions for summary judgment or summary adjudication may not weigh the evidence but must instead view it in the light most favorable to the opposing party and draw all reasonable inferences in favor of that party”].)

A party may move for summary adjudication as to one or more causes of action, affirmative defenses, claims for damages, or issues of duty if that party contends that there is no merit to the cause of action, defense, or claim for damages, or if the party contends that there is no duty owed. (See Code Civ. Proc., § 437c, subd. (f)(1).) “A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Ibid.) A cause of action has no merit if: (1) one or more elements of the cause of action cannot be separately established, even if that element is separately pleaded, or (2) a defendant establishes an affirmative defense to that cause of action. (See Code Civ. Proc., § 437c, subd. (n); Union Bank v. Superior Court (1995) 31 Cal.App.4th 573, 583.) Once the defendant has shown that a cause of action has no merit, the burden shifts to the plaintiff to show that a triable issue of material fact exists as to that cause of action. (See Code Civ. Proc., § 437c, subd. (o)(2); Union Bank v. Superior Court, supra, 31 Cal.App.4th at p. 583.) Additionally, in line with Aguilar, “[o]n a motion for summary adjudication, the trial court has no discretion to exercise. If a triable issue of material fact exists as to the challenged causes of action, the motion must be denied. If there is no triable issue of fact, the motion must be granted.” (Fisherman's Wharf Bay Cruise Corp. v. Superior Court (2003) 114 Cal.App.4th 309, 320.)

The first cause of action for breach of fiduciary duty alleges Defendants breached their fiduciary duties to United by, among other things “disparaging and denigrating the business and good will of UNITED[.]” (Complaint ¶ 15.)

Similarly, the fourth cause of action for trade secret misappropriation alleges “LANDVER gained access to UNITED’s confidential information in the course of his acting as director and chief financial officer of UNITED” and “he nefariously and fraudulently disseminated and delivered over UNITED’s trade secret information” to CCR. (Complaint ¶ 31.)

Similarly, the fifth cause of action for breach of confidence alleges Defendants took steps “to misappropriate, arrogate, wrongfully seize, take, for their own use and control the non-trade secret and confidential information of UNITED.” (Complaint ¶ 39.)

Similarly, the seventh cause of action for conversion of trade secrets, non-trade secret materials specifically reincorporates these allegations of misappropriation of United’s trade secrets. (Complaint ¶ 47.)

Defendants argue that all of these causes of action fail because United cannot prove they took any confidential or trade secret information.

In support, Defendants have provided the Declaration of Michael Landver, which provides as follows:

7. I never took any of UNITED’s business assets, goodwill, trade secrets, clientele information, customer lists, clinical procedures, employee information or patient information. CCR never took any of UNITED’s business assets, goodwill, trade secrets, clientele information, customer lists, clinical procedures, employee information or patient information.

8. I never took any of UNITED's confidential business information including, but not limited to, UNITED's medical practitioners, vendor information, customer information, patient information, or any of its trade secret information.

9. I never disclosed any of UNITED's confidential business information including, but not limited to, UNITED's medical practitioners, vendor information, customer information, patient information, and any of its trade secret information to anyone.

10. I never solicited any of UNITED’s agents, employees, medical personnel, research personnel, clinical studies subjects or customers. CCR never solicited any of UNITED’s employees, medical personnel, research personnel, clinical studies subjects or customers.

Thus, Defendants have met their initial burdens of production and persuasion that they did not take any of United’s confidential or trade secret information.

In opposition, United has provided the Landver and Gershovich transcripts, demonstrating that Landver took studies from United:

“Misappropriation of a corporate opportunity is misappropriation of a corporate asset.” (Tuli v. Specialty Surgical Center of Thousand Oaks, LLC (2024) 105 Cal.App.5th 997, 1018.) Further confidential corporate opportunities and client lists can constitute trade secrets. (See, e.g. Nalley’s Inc. v. Corona Processed Foods, Inc. (1966) 240 Cal.App.2d 948, 949-51 [customer identities]; Alliant Insurance Services, Inc. v. Gaddy (2008) 159 Cal.App.4th 1292, 1301 [confidential client list]; Readylink Healthcare v. Cotton (2005) 126 Cal.App.4th 1006, 1023 [staffing company’s pool of nurses].)

Therefore, United has met its burden of production to raise triable issues of material fact as to whether Defendants misappropriated medical studies from United and whether those studies constituted trade secrets.

In reply, Defendants present additional evidence that Mr. Gershovich further testified that he was unaware of any clinical research studies CCR was engaged in. As a threshold matter, the Court generally does not consider evidence submitted on reply, as it deprives the opposing party of a fair opportunity to rebut it, in violation of their due process rights. (San Diego Watercrafts, Inc. v. Wells Fargo Bank, N.A. (2002) 102 Cal.App.4th 308, 316 [“due process requires a party be fully advised of the issues to be addressed and be given adequate notice of what facts it must rebut in order to prevail”]; see also Wall Street Network Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171.)

Moreover, even if the Court were to consider this statement, it does not negate that there exist triable issues of material fact as to whether Defendants misappropriated medical studies away from United, regardless of whether Defendants actually acted on or completed them.

As such, the Court denies summary adjudication as to the first, fourth, fifth, and seventh causes of action.

The elements of a cause of action for intentional interference with prospective economic advantage are: (1) the existence between plaintiff and a third party of an economic relationship with the probability of future economic benefit to the plaintiff; (2) defendant’s knowledge of the relationship; (3) intentionally wrongful acts designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm proximately caused by the defendant’s action. (Roy Allan Slurry Seal, Inc. v. American Asphalt South, Inc. (2017) 2 Cal.5th 505, 512.)

5. I never agreed to shift any of UNITED’s assets, such as clinical research studies to Matrix Clinical Research, Inc., a California corporation formed by my partners in UNITED Plaintiffs Peyman Banooni, Stan Gershovich and Fred Shaham. I never agreed to transfer UNITED employees and equipment and clinical research studies to Matrix, and to divert new business and new opportunities to Matrix. All this was done surreptitiously behind my back and without my knowledge and approval by Peyman Banooni, Stan Gershovich and Fred Shaham, in order to throw me out of the fast growing and highly profitable clinical research business that we all started together as equal partners in 2017. I obtained an arbitration award of $2,600,000 against Matrix, and plaintiffs herein Peyman Banooni, Stan Gershovich and Fred Shaham for the damages sustained by me due to their breach of their obligations to UNITED and their stripping it of its assets in the arbitration before the American Arbitration Association, Case No. 01-20-005-5958.

6. Defendant CALIFORNIA CLINICAL RESEARCH. INC. has not engaged in any pharmaceutical clinical research trials, is not currently engaged in any such trials and is not planning on being engaged in any such trials.

11. I never made any disparaging statements about UNITED, Peyman Banooni, Fred Shaham or Stan Gershovich. CCR never made any disparaging comments about UNITED, Peyman Banooni, Fred Shaham or Stan Gershovich. I never published and disseminated oral and written statements and communications disparaging and denigrating the business and business goodwill of UNITED. CCR has never published and disseminated oral and written statements and communications disparaging and denigrating the business and business goodwill of UNITED.

12. I never interfered in any business of UNITED, Peyman Banooni, Fred Shaham or Stan Gershovich. CCR never interfered in any business of UNITED, Peyman Banooni, Fred Shaham or Stan Gershovich.

13. I never counseled or persuaded anyone to breach any contract with Plaintiffs or interfere in Plaintiffs' operations.

But as discussed above, there are triable issues of material fact as to whether Defendants misappropriated medical studies away from United, thereby interfering with United’s prospective economic advantage.

Therefore, the Court denies summary adjudication as to the second cause of action.

“Trade libel is the publication of matter disparaging the quality of another's property, which the publisher should recognize is likely to cause pecuniary loss to the owner. The tort encompasses all false statements concerning the quality of services or product of a business which are intended to cause that business financial harm and in fact do so. To constitute trade libel, a statement must be false.” (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1010 [cleaned up].)

“Despite its name, ‘trade libel’ is not true libel and is not actionable as defamation.” (Muddy Waters, LLC v. Superior Court (2021) 62 Cal.App.5th 905, 925.)

“While a cause of action for trade libel resembles that for defamation it differs from it materially in the greater burden of proof resting on the plaintiff, and the necessity for special damage in all cases. The plaintiff must prove in all cases that the publication has played a material and substantial part in inducing others not to deal with him, and that as a result he has suffered special damages. At a minimum, a trade libel cause of action requires: (1) a publication; (2) which induces others not to deal with plaintiff; and (3) special damages.” (Muddy Waters, LLC v. Superior Court (2021) 62 Cal.App.5th 905, 925 [cleaned up].)

Thus, Defendants have met their initial burdens of production and persuasion that they did not commit trade libel against United.

In opposition, United points to Landver’s allegations in the 9105 case that Banooni, Shaham, and Gershovich stole United’s assets and trade secrets and created Matrix as a successor-in-interest or rebrand of United.

But trade libel requires “the intentional publication of a false and unprivileged statement of fact.” (Mann v. Quality Old Time Service, Inc. (2004) 120 Cal.App.4th 90, 104 [emphasis added].)

Allegations made in a complaint or other briefing filed with the Court are protected as acts made in furtherance of the rights of petition and free speech in connection with a public issue. (See Code Civ. Proc., § 415.16, subd. (e).)

Therefore, United has not met its burden of production to create a triable issue of material fact that Defendants intentionally published a false and unprivileged statement of fact that disparaged or denigrated United or any of the individuals.

As such, the Court grants summary adjudication as to the third cause of action for trade libel.

Defendants argue that Plaintiff will be unable to establish its fifth cause of action for breach of confidence for the additional reason that Defendants did not disclose any confidential information.

Thus, Defendants have met their initial burdens of production and persuasion that they did not disclose any of United’s confidential business information.

Although, as discussed above, the deposition testimony of Landver and Gershovich is sufficient to create a triable issue of material fact as to whether Defendants improperly took United’s medical study opportunities, there is no evidence in the record that Defendants disclosed this information to anyone. In particular, there is no evidence in the record that Landver, to whom Gershovich sent the studies, even shared those studies with anyone at CCR.

Thus, United has not met its burden of production to create a triable issue of material fact that Defendants disclosed any of United’s confidential information.

As such, the Court grants summary adjudication as to the fifth cause of action for breach of confidence.

The Comprehensive Computer Data Access and Fraud Act criminalizes and creates a private right of action for willful and knowing unauthorized access to computer systems that cause the system’s owner injury. (See Cal. Penal., § 502.)

The operative FAC alleges Defendants “accessed without the permission of UNITED, its computer, computer system(s), and/or computer network[…]” (FAC ¶ 43.)

14. I never accessed computers of UNITED or accessed any of its data without authorization. I never destroyed, modified or altered UNITED's data. CCR never accessed computers of UNITED or accessed any of its data. CCR never destroyed, modified or altered UNITED's data.

Thus, Defendants have met their initial burdens of production and persuasion that they never accessed United’s computer systems or data without authorization.

In opposition, United has simply responded to this evidence with, “UNKNOWN.” (See United’s Separate Statement at UMF Nos. 16-19; 29-32.)

Thus, United has not met its burden of production to create a triable issue of material fact. As such, the Court grants summary adjudication as to the seventh cause of action for violations of the Computer Fraud and Abuse Act.

A constructive trust “is not an independent cause of action but merely a type of remedy for some categories of underlying wrong. (Glue-Fold, Inc. v. Slautterback Corp. (2000) 82 Cal.App.4th 1018, 1023, fn. 3 [citing 5 Witkin, Cal. Procedure (4th ed. 1997) Pleading, § 796, p. 252].)

Thus, to the extent United has styled “constructive trust” as a separate cause of action, the Court grants summary adjudication as to that cause of action. To the extent a constructive trust is an appropriate remedy for any of the remaining causes of action, such remedy remains available.

“An action for an accounting has two elements: (1) that a relationship exists between the plaintiff and defendant that requires an accounting and (2) that some balance is due the plaintiff that can only be ascertained by an accounting.” (Sass v. Cohen (2020) 10 Cal.5th 861, 869.)

Defendants argue that (1) because Plaintiffs cannot state any viable claims alleging misconduct on the part of Defendants, the request for accounting must also fail; and (2) United’s bad faith discovery abuse and gamesmanship constitute unclean hands, precluding the equitable relief of accounting.

The Court disagrees with both arguments. As discussed above, the Court does not summarily dispose of the first, second, fourth, or seventh causes of action, and therefore viable claims of misconduct remain in the litigation.

Further, Defendants’ argument that United has engaged in bad faith discovery abuse and therefore the Court should summarily dispose of the request for an accounting is effectively an improper motion for reconsideration of the Court’s November 1, 2024 order denying their request for terminating discovery sanctions.

Therefore, Defendants have not met their initial burdens of production and persuasion that the Court should grant summary judgment in their favor as to the accounting cause of action.

Therefore, the Court grants in part and denies in part Defendants’ Motion for Summary Adjudication.

The Court finds Defendants have met their initial burdens of production and persuasion that they did not (1) disparage United; (2) disclose any of United’s confidential information; or (3) access United’s computer systems without authorization; and United has not met its burden of production to create any triable issues of material fact. As such, the Court grants summary adjudication as to the third, fifth, and sixth causes of action for trade libel, breach of confidence, and violations of the Computer Data Access and Fraud Act, respectively.

Further, because there is no separate cause of action for constructive trust, the Court grants Defendants’ motion for summary adjudication as to the eighth cause of action for constructive trust. However, to the extent a constructive trust is an appropriate remedy to any of United’s remaining causes of action, such remedy remains available.

Although Defendants have met their initial burdens of production and persuasion that they did not misappropriate any of United’s confidential or trade secret information, United has met its burden of production to create triable issues of material fact as to whether Defendants misappropriated United’s medical study opportunities from Stan Gershovich. As such, the Court denies summary adjudication as to the first, second, fourth, and seventh causes of action for breach of fiduciary duty, intentional interference with prospective economic advantage, trade secret misappropriation, and conversion of trade secrets, respectively.

The Court further finds that Defendants have not met their initial burdens of production and persuasion that United will be unable to prevail on its ninth cause of action for an accounting. As such, the Court denies summary adjudication as to the ninth cause of action for an accounting.

Because the Court denies summary adjudication as to the first, second, fourth, seventh, and ninth causes of action, the Court similarly denies summary judgment.

Defendants shall provide notice of the Court’s ruling and file the notice with a proof of service forthwith.

[1] “[A]s a general rule, a voluntary dismissal of an action deprives the court of both subject matter and personal jurisdiction in that case. Based on this general rule, most orders entered after the dismissal are void and have no effect.” (See Manhan v. Gallagher (2021) 62 Cal.App.5th 504, 509 [cleaned up]; see also Paniagua v. Orange County Fire Authority (2007) 149 Cal.App.4th 83, 89 [“it is a well-settled proposition of law that where the plaintiff has filed a voluntary dismissal of an action . . ., the court is without jurisdiction to act further [citations], and any subsequent orders of the court are simply void”].)

[2] “[T]here are thus two types of consolidation: a consolidation for purposes of trial only, where the two actions remain otherwise separate; and a complete consolidation or consolidation for all purposes, where the two actions are merged into a single proceeding under one case number and result in only one verdict or set of findings and one judgment.” (Hamilton v. Asbestos Corp., Ltd. (2000) 22 Cal.4th 1127, 1147.)

DEPARTMENT	207
HEARING DATE	February 24, 2025
CASE NUMBER	21STCV39105
MOTION	Motion for Summary Judgment/Summary Adjudication
MOVING PARTIES	Defendants Michael Landver and California Clinical Research, Inc.
OPPOSING PARTY	Plaintiff United Clinical Research, Inc.