MARILYN L. HUFF, District Judge.
On December 4, 2018, the Court issued an order sua sponte moving for summary judgment in favor of pro se Defendant Susan Guillory as to all of Plaintiff Charbel Maksoud's claims and as to pro se Defendant Tirrell Payton as to the claims for: (1) intentional interference with prospective economic relations, (2) negligent interference with prospective economics relations, (3) common count (money had and received), and (4) declaratory judgment. (Doc. Nos. 141, 142.) In that order, the Court provided Plaintiff with notice and opportunity to oppose the motion by January 9, 2019. (Doc. No. 141.) Plaintiff did not file any opposition. For the reasons discussed below, the Court grants the sua sponte motion for summary judgment.
This action presents a stockholder dispute in which Plaintiff alleges that Defendants and others mislead him into investing in a now-failed start-up. (Doc. No. 35.) Beginning in July 2011, Plaintiff befriended his neighbor, Bruce Hopkins ("Hopkins"). (Doc. 107-9, Maksoud Decl. ¶ 2.) Plaintiff learned that Hopkins and Defendant Payton were starting a company, BT Software and Research, Inc. ("BT"), in which Defendant Philippe Guelton was involved. (
Defendant Payton founded BT with Hopkins, and was C.E.O. and on the Board of Directors. (Doc. No. 99-9, Exh. F; Maksoud Depo. at 249-50.) Defendant Payton has stated under oath that he had no communications with Plaintiff prior to Plaintiff's investment in BT, and that he did not make any representations to Plaintiff regarding BT. (Doc. No. 124-4, Payton Depo. at 11-12.) Defendant Payton states that he had not spoken with Plaintiff prior to the winter of 2015. (
On May 10, 2014, Plaintiff invested $250,000 in BT to develop a media platform called "Kaliki" and signed an Advisor Agreement. (Doc. Nos. 99-18, Exh. O; 99-22, Exh. S; Maksoud Depo. at 327-28.) Plaintiff states that Hopkins, Defendant Payton, and Defendant Guelton all represented to him that his investment would be used for operational expenses, research, and development, not for salaries. (Maksoud Depo. at 282-83.) Plaintiff further states that after investing in BT, he recruited his now-deceased brother-in-law, Nadeem Baaklini, to develop a software search engage for BT called "OnSay" in exchange for equity in BT. (Doc. No. 35 at 6; Maksoud Depo. at 76-77, 184.)
Beginning in November 2015, Plaintiff, Defendant Guelton, and Defendant Payton were all unable to contact Hopkins. (Doc. No. 99-2, Guelton Decl. ¶¶ 12-18.) In December 2015 and January 2016, through email communications, the parties learned that Hopkins initiated a wire transfer from BT's business account and was involved in legal trouble in Spain related to the death of Hopkins's son. (
After hearing nothing regarding his investment for several months, Plaintiff hired counsel to investigate the veracity of the representations made by Defendant Guelton, Hopkins, and Defendant Payton before and after Plaintiff's investment. (Maksoud Decl. ¶ 13.) Plaintiff states that this investigation shows that there were no other investors, no contracts with major automobile companies, and no relationships with media companies. (
On July 10, 2017, Plaintiff filed his second amended complaint alleging several causes of action against: Philippe Guelton; Tirrell Payton; Susan Guillory; Shawn Smith; BT; SheKnows Media; and Momentum Marketing. (Doc. No. 35.) Since then, all Defendants have been dismissed except Defendants Guelton, Payton, and Guillory. (Doc. Nos. 56, 57, 83, 141.) In his complaint, Plaintiff alleges 14 causes of action against Defendants Guelton and Payton: (1) intentional misrepresentation, (2) unjust enrichment, (3) restitution, (4) breach of fiduciary duties of care and loyalty, (5) common count (money had and received), (6) intentional interference with prospective economic relations, (7) unfair business practices, (8) negligent interference with prospective economic relations, (9) negligence, (10) constructive trust, (11) aiding and abetting fraud, (12) false promise, (13) accounting, and (14) declaratory relief. (Doc. No. 35.) Plaintiff makes all of the same claims against Defendant Guillory, except for breach of fiduciary duties. (
On November 13, 2018, the Court granted in part and denied in part Defendant Guelton's motion for summary judgment. (Doc. No. 135.) Specifically, the Court granted summary judgment in favor of Defendant Guelton on Plaintiff's claims for: (1) intentional interference with prospective economic relations, (2) negligent interference with prospective economics relations, (3) common count (money had and received), and (4) declaratory judgment. The Court, believing that its reasoning from that order applied to Plaintiff's claims against Defendant Payton, moved sua sponte for summary judgment in favor of Defendant Payton on such claims. (Doc. No. 141.) In order to narrow the issues in this case to relevant matters, the Court also moved sua sponte for summary judgment in favor of Defendant Guillory because the pleadings thus far had demonstrated that she had no involvement in the alleged violations. (
Summary judgment is appropriate under Federal Rule of Civil Procedure 56 if the moving party demonstrates that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a);
A party seeking summary judgment always bears the initial burden of establishing the absence of a genuine issue of material fact.
When ruling on a summary judgment motion, the Court must view the facts and draw all reasonable inferences in the light most favorable to the non-moving party.
On November 13, 2018, the Court granted summary judgment in favor of Defendant Guelton on Plaintiff's claims for: (1) common count (money had and received), (2) intentional interference with prospective economic relations, (3) negligent interference with prospective economic relations, and (4) declaratory judgment. (Doc. No. 135.) The Court then moved sua sponte for summary judgment on these claims in favor of Defendants Payton and Guillory on the basis that the same reasons from its prior order apply to these Defendants. (Doc. Nos. 141, 142.) After providing Plaintiff with opportunity to oppose, the Court concludes that summary judgment in favor of Defendants Payton and Guillory is appropriate on such claims.
"The common count is a general pleading which seeks recovery of money without specifying the nature of the claim."
The Court concludes that Plaintiff's claim for money had and received fails because Defendants Payton and Guillory did not receive Plaintiff's investment. For example, the court in
The elements of intentional interference with prospective economic relations are: "(1) an economic relationship between the plaintiff and a third party with the probability of future economic benefit to plaintiff, (2) defendant's knowledge of the relationship, (3) intentional wrongful acts by defendant intended to disrupt the relationship, (4) actual disruption, and (5) economic harm to plaintiff."
Negligent interference with prospective economic relations requires: "(1) an economic relationship existed between the plaintiff and a third party that contained a reasonably probable future economic benefit or advantage to plaintiff; (2) the defendant knew of the existence of the relationship and was aware or should have been aware that if it did not act with due care its actions would interfere with this relationship and cause plaintiff to lose in whole or in part the probable future economic benefit or advantage of the relationship; (3) the defendant was negligent; and (4) such negligence caused damage to the plaintiff in that the relationship was actually interfered with or disrupted and the plaintiff lost in whole or in part the economic benefits or advantage reasonably expected from the relationship."
Plaintiff states that he had business opportunities that he had to forgo because he instead invested in BT. However, Plaintiff has failed to show any evidence demonstrating that Defendants Payton and Guillory knew of Plaintiff's prospective business relations. In his deposition testimony, Plaintiff states that he "never told anyone about what [he was] doing" with regards to liquidating his Facebook stock. (Maksoud Depo. at 68.) He only states that Hopkins "could have easily known that [he] may have to sell [his] Facebook shares[.]" (
In his second amended complaint, Plaintiff asks the Court for "a judicial determination that he is the exclusive owner of all tangible and intangible rights, including all intellectual property rights and patents in both Kaliki and OnSay" pursuant to 28 U.S.C. § 2201 and California Code of Civil Procedure § 1060. (Doc. No. 35 at 26.) "It is well-established that federal courts sitting in diversity must apply state substantive law and federal procedural rules."
"The purpose of a declaratory judgment [under Cal. Code Civ. P. § 1060] is to serve some practical end in quieting or stabilizing an uncertain or disputed jural relation."
Plaintiff has failed to show that an actual controversy exists between Defendants Payton and Guillory and Plaintiff regarding the rights to Kaliki or Onsay. Plaintiff has not produced any evidence showing that Defendants Payton and Guillory have any right in Kaliki, Onsay, or any other assets of BT. Defendant Guelton stated that the only intellectual property right he is aware of relating to BT is a trademark of the name "NavAds." (Guelton Decl. ¶ 20; Doc. No. 99-28, Exh. Y.) Plaintiff has not produced any evidence showing that BT owned any other intellectual property at the time of dissolution. Further, Plaintiff goes as far as to state that has had no reason to believe that Defendant Payton improperly used or took any of BT's assets upon dissolution. (Maksoud Depo. at 265.) Because Plaintiff has failed to produce any evidence demonstrating that an actual controversy regarding the ownership of BT's property rights exists between himself and Defendants Payton and Guillory, the Court grants summary judgment in favor of Defendants Payton and Guillory the declaratory judgment claim.
The Court also moved sua sponte for summary judgment in favor of Defendant Guillory on Plaintiff's remaining claims because the pleadings show that she had no involvement with the alleged violations. (Doc. Nos. 141 at 2; 142.) The Court believes that Defendant Guillory was named in this lawsuit merely by virtue of being married to Defendant Payton at the time of the facts alleged in this case. The pleadings do not indicate that she had any involvement in the creation of BT, the solicitation of Plaintiff's investment, or the subsequent activities and failure of BT. After providing Plaintiff with opportunity to oppose the sua sponte motion, the Court concludes that summary judgment in favor of Defendant Guillory is appropriate with respect to all remaining claims made against her, in addition to those discussed above.
In a claim for intentional misrepresentation, the plaintiff must show: "(1) a misrepresentation; (2) knowledge of falsity; (3) intent to induce reliance; (4) actual and justifiable reliance, and (5) resulting damages."
In a claim for aiding and abetting an intentional tort, "plaintiffs must prove: (1) the fact of perpetration of the overall improper scheme; (2) the aider and abettor's knowledge of such a scheme; and (3) the aider and abettor's substantial assistance furthered the scheme."
False promise is a particular type of fraud.
Here, Plaintiff has failed to show any misrepresentation or fraud by Defendant Guillory. Plaintiff alleges that misrepresentations by Hopkins, Defendant Payton, and Defendant Guelton induced him to invest in BT. (Maksoud Depo. at 6-16, 273-79, 302-04.) At no point does Plaintiff state that Defendant Guillory made any representations to him regarding BT. Even further, Plaintiff never states that he interacted with Defendant Guillory at all or that she had any involvement in BT. Accordingly, the Court grants Defendant Guillory summary judgment as to Plaintiff's claims for intentional misrepresentation, aiding and abetting fraud, and false promise.
"The elements of an unjust enrichment claim are `the receipt of a benefit and [the] unjust retention of the benefit at the expense of another.'"
"[T]hree conditions are necessary for a plaintiff to establish a constructive trust for its benefit: the existence of a res (some property or some interest in property), the plaintiff's right to that rest, and the defendant's gain of the res by fraud, accident, mistake, undue influence or other wrongful act."
Plaintiff has not shown that Defendant Guillory received or benefitted from any part his investment in BT. Plaintiff states that the money he invested was used by Defendants, for "vacations and other non-business endeavors" and salaries. (Maksoud Depo. at 74-76.) Plaintiff states that Defendants Payton and Guelton had access to Plaintiff's investment by way of their positions in BT. In contrast, Plaintiff does not show any way in which Defendant Guillory had access to or received Plaintiff's investment. Rather, his claim relies solely on Defendant Guillory's status as Defendant Payton's then-wife. Plaintiff has failed to produce any affirmative evidence showing that a trier of fact could resolve his claims against Defendant Guillory for unjust enrichment, restitution, and constructive trust in his favor.
To state a cognizable claim for negligence under California law, plaintiff "must establish four required elements: (1) duty; (2) breach; (3) causation; and (4) damages."
"An accounting cause of action is equitable and may be sought where the accounts are so complicated that an ordinary legal action demanding a fixed sum is impracticable."
California Business and Professional §§ 17200 et seq., known as the Unfair Competition Law ("UCL") prohibits "any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising[.]" Cal. Bus. & Prof. Code § 17200. "[A] plaintiff may proceed under the UCL on three possible theories. First, `unlawful' conduct that violates another law is independently actionable under Section 17200. Alternatively, a plaintiff may plead the defendants' conduct is `unfair' within the meaning of the several standards developed by the courts. Finally, a plaintiff may challenge `fraudulent' conduct by showing that `members of the public are likely to be deceived' by the challenged business acts or practices."
Plaintiff's negligence, accounting, and UCL claims all arise from Defendant Guelton's and Defendant Payton's duties as a directors of BT. Negligence requires that a defendant owe some duty to the plaintiff.
For the foregoing reasons, the Court grants its sua sponte motion for summary judgment. Specifically, the Court grants summary judgment in favor of Defendant Susan Guillory on all of Plaintiff's claims. The Court grants summary judgment in favor of Defendant Tirrell Payton on Plaintiff's claims for: (1) intentional interference with prospective economic relations, (2) negligent interference with prospective economics relations, (3) common count (money had and received), and (4) declaratory judgment. Accordingly, the only claims remaining in this case are against Defendants Philippe Guelton and Tirrell Payton for: (1) intentional misrepresentation, (2) aiding and abetting fraud, (3) false promise, (4) unjust enrichment, (5) restitution, (6) constructive trust, (7) breach of fiduciary duties, (8) negligence, (9) unfair business practices, and (10) accounting.