Judge: Virginia Keeny, Case: 20VECV00383, Date: 2022-09-29 Tentative Ruling

Case Number: 20VECV00383    Hearing Date: September 29, 2022    Dept: W

GAMEBREAKER, Inc. v. ADIDAS AG, et al.

MOTION FOR SUMMARY ADJUDICATION

Date of Hearing:          September 29, 2022               Trial Date:       April 24, 2023

Department:               W                                             Case No.:         20VECV00383

Moving Party:             Plaintiff Gamebreaker, Inc.

Responding Party:       Defendants Adidas AG and Adidas America, Inc.

BACKGROUND

            On March 12, 2020 Plaintiff Gamebreaker, Inc. (“Plaintiff”) filed a Complaint.  The operative pleading is the First Amended Complaint, which alleges causes of action for (1) declaratory relief, (2) breach of contract - orders, (3) recission of amendment due to fraud, (4) fraud – false promise, (5) breach of contract – amendment, (6) breach of contract – pricing, and (7) unfair business practices against Defendants Adidas AG and Adidas America, Inc (“Defendants”).[1]

            This matter arises from Defendants alleged breach of contract, relating to Defendants purchase of headgears from Plaintiffs, and the sale of the same to third parties.

            Plaintiff moves the Court for summary adjudication as to its declaratory relief cause of action.

[Tentative] Ruling

            Plaintiff’s Motion for Summary Adjudication is DENIED.

LEGAL STANDARD

            The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial.  (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.)  Code of Civil Procedure (“CCP”) section 437c(c) “requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.”  (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.)  “The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues; the function of the affidavits or declarations is to disclose whether there is any triable issue of fact within the issues delimited by the pleadings.”  (Juge v. County of Sacramento (1993) 12 Cal.App.4th 59, 67, citing FPI Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 381-382.)

            As to each claim as framed by the complaint, the moving party must satisfy the initial burden of proof by presenting facts proving the essential elements of a cause of action, negating the essential elements of a cause of action, or establishing a defense.  (CCP § 437c(p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520.)  Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.”  (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

            Once the moving party has met that burden, the burden shifts to the opposing party to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto.  To establish a triable issue of material fact, the party opposing the motion must produce substantial responsive evidence.  (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.)

ANALYSIS

Evidentiary Objections

Defendant’s Objections Nos. 1-6  are OVERRULED.

Declaratory Relief

            Plaintiff contends that Defendant’s April 29, 2019 Notice of Termination of the subject contract (“contract”) was ineffective because no “Event of Default” (as defined by the contract) had occurred and Defendants failed to comply with the requirements for terminating the contract.  (Pl. UMF Nos. 5, 14.)  Accordingly, Plaintiff requests that the Court adjudicate that Defendants Notice of Termination was ineffective, that the subject contract was not terminated, and that Defendants remain bound by the terms of the subject contract, including the pricing requirements.

            Defendants contend that Plaintiff is improperly moving for summary adjudication because its declaratory relief cause of action does not completely dispose of a cause of action, and the issue of whether the subject contract was validly terminated has already been placed fully at-issue by the other causes of action asserted in the FAC.

            The Court finds that the Hood v. Superior Court (1995) 33 Cal.App.4th 319, which was cited by Defendants, is instructive. 

In Hood, the plaintiff brought an action against defendant for damages and injunctive relief alleging, among other things, that defendant breached a noncompetition clause in a contract between the parties.  (Id. at 322.)  Defendant cross-complained seeking injunctive relief and damages for breach of contract and sundry torts arising from the termination of the contract.  (Id.)  In the cross-complaint defendant disputed plaintiff's right to terminate the contract.  (Id.)  Plaintiff moved for summary adjudication with respect to defendant’s cross-complaint.  (Id.)  The trial court denied the motion on the ground it would not completely dispose of any of the causes of action in defendants’ cross-complaint.  (Id.)  Plaintiff then amended its complaint to add a cause of action for declaratory relief.  (Id.)  In its declaratory relief cause of action Plaintiff sought determinations that defendant's activities violated the noncompetition clause of the contract, that as a result plaintiff was entitled to terminate the contract, and that it was within its rights in doing so.  (Id.)  Plaintiff then moved for summary adjudication on its declaratory relief cause of action.  (Id.)  This time the motion was granted and defendant sought writ review in the Court of Appeal.  (Id.)  On appeal, the Court of Appeal issued a writ of mandate directing the trial court to set aside its order granting Plaintiff’s motion for summary adjudication because when the issues invoked in a cause of action for declaratory relief are fully engaged in other causes of action, “declaratory relief [is] unnecessary and superfluous.”  (Id. at 324.)  “The declaratory relief statute should not be used for the purpose of anticipating and determining an issue which can be determined in the main action.”  (Id.)  “The object of the statute is to afford a new form of relief where needed and not to furnish a litigant with a second cause of action for the determination of identical issues.”  (Id.)  The Hood court found that the declaratory relief sought “adds nothing to those matters that were asserted and presumably will be resolved in the underlying action.”  (Id.)

The Southern Cal. Edison Co. v. Superior Court (1995) 37 Cal.App.4th 839, 846 court in analyzing Hood found that “it was clear to the [Hood] Court that what [plaintiff] had done was to pluck certain issues out of the existing complaint and cross-complaint and place them in a purported declaratory relief cause of action solely for the purpose of moving for summary adjudication on that cause of action and thereby making an end run around the restrictions of section 437c, subdivision (f).”

Here, in the Complaint, Plaintiff asserted a cause of action for breach of contract, for, among other things, Defendant’s violation of the pricing requirements of the contract.  (See Compl., ¶¶ 22-26.)  Plaintiff then amended its Complaint to assert the cause of action for declaratory relief alleging that Defendant’s Notice of Termination was ineffective and that Defendants remained bound by the terms of the contract, including the pricing requirements of the contract.  (See FAC ¶¶ 33-36.)  Here, Plaintiff’s declaratory relief cause of action was included “for the purpose of anticipating and determining an issue which can be determined in the main action.”  (Hood, supra, 33 Cal.App.4th at 324.)  Plaintiff specifically requests that the Court find that Defendants are bound by the terms of the contract, including the pricing agreement, which would require the Court to determine the issue of whether Defendants are in breach of the contract.  Here, Plaintiff inserted the allegation of Defendants’ ineffective Notice of Termination, which presumably, would have been Defendants’ defense to the breach of contract claims in the Complaint.  Here, whether Defendants’ Notice of Termination was ineffective is a necessary part of the analysis to determine whether Defendants breached the contract.  The trier of fact would have to consider and determine whether the Notice of Termination was ineffective as part of the breach of contract analysis.  The declaratory relief cause of action seeks determination of the same issues presented by Plaintiff’s breach of contract claims, and whether Defendant’s Notice of Termination was ineffective “adds nothing to those matters that were asserted” and are issues that would have been resolved in the breach of contract claims asserted in the Complaint.  Plaintiff simply plucked out an issue that was part of and would have been decided in the Complaint and placed it in a declaratory relief cause of action.

The Court notes that Plaintiff’s reliance on Supervalu, Inc. v. Wexford Underwriting Managers, Inc. (2009) 175 Cal.App.4th 64 and Southern Cal. Edison Co., supra, 37 Cal.App.4^th, to support that its declaratory relief cause of action is sufficiently distinct from its other causes of action and that summary adjudication is proper, is misplaced.  Supervalu and Southern Cal. Edison Co.’s are factually distinct, as the declaratory relief causes of action involved the interpretation of “ambiguous” language in the contracts at issue.  In contrast, here, Plaintiff is asking the Court to find that Defendants Notice of Termination was ineffective, which, as discussed above in detail, is the same issues presented by the breach of contract claims.

            Thus, Plaintiff’s Motion for Summary Adjudication is DENIED.

CONCLUSION

            Plaintiff’s Motion for Summary Adjudication is DENIED.