Motion Summary Judgment Adjudication

Cal. Super. - 6th Dist.April 1, 2016

SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER Ma Laboratories, Inc. et al vs Newbiiz, Inc. et al Hearing start Time: 10:00 AM Hearing Type: Motion: Summary 16CV293438 Judgment/Adjudication Date 0f Hearing: 07/26/2019 Comments: Heard By: Kirwan, Peter Location: Department 19 Courtroom Reporter: - N0 Court Reporter Courtroom Clerk: Ingrid C Stewart Court Interpreter: Court Investigator: Parties Present: Future Hearings: Freitas, Robert Attorney Picone, John Vincent, ||| Attorneym - Counsel, Jennifer Coleman also appearing for plaintiff. Tentative ruling is contested by defendant's counsel, Mr.Freitas. Motion argued. The Tentative Ruling is adopted. See below: Calendar Line 1 Case Name: Ma Laboratories, |nc., et al. v. eWiz Express Corporation, et aI. Case N0.: 16CV293438 Christine Rao s Motion for Summary Adjudication 0f Issues Factual and Procedural Background In 0r about 1983, plaintiff Abraham C. Ma ( Ma ) established plaintiff Ma Laboratories, Inc. ( Ma Labs ). (Second Amended Complaint ( SAC ), 42.) At all times, Ma has been and currently is the sole owner and 100% shareholder 0f Ma Labs. (|d.) Ma Labs is a global distributor 0f a full range 0f |T components and software with annual sales substantially in excess 0f $1 billion. (SAC, 43.) Ma Labs principal place of business is located in an approximately 117,000 square foot facility located at 2075 N. Capitol Avenue in San Jose. Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 1 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER (SAC, 44.) Ma Labs currently employs approximately 460 persons in the United States including approximately 360 in California and approximately 100 at four other branch offices located in Florida, Georgia, New Jersey, and Illinois. (SAC, 45.) Defendant Ruiting Rao aka Christine Rao ( Rao ) came t0 the United States from the People s Republic 0f China in 1993 at the age 0f 29 and began her employment at plaintiff Ma Laboratories, Inc. ( Ma Labs ) shortly after her arrival in the United States. (SAC, 14.) Defendant Rao was initially employed by Ma Labs as a RMA (return merchandise) clerk and subsequently became an account manager (sales) in 0r about 1994. (SAC, 16.) In late February 1995, defendant Rao filed for divorce from her then husband. (SAC, 17.) Plaintiff Ma and Rao married 0n December 7, 1995. (|d.) After taking business and accounting studies at a local community college, defendant Rao returned to work at Ma Labs on February 21, 1997 as a Senior Product Manager. (SAC, 18.) Defendant Rao was appointed Vice President Sales in 2003 and appointed CEO in 2007. (|d.) Defendant Rao served as CEO 0f Ma Labs from 2007 t0 December 15, 2014 when she was terminated after being placed on administrative leave on December 4, 2014 for failing and refusing to provide material information t0 Ma Labs in response t0 several inquiries into unauthorized, irregular and improper business and financial transactions, acts and omissions, and after failing and refusing t0 make a true, correct, and complete accounting and restitution t0 Ma Labs. (SAC, 26 27.) Plaintiffs recently discovered that defendant Rao, while acting as CEO 0f Ma Labs and being in exclusive control 0f the books and records 0f Ma Labs and its affiliate companies, took active and systematic steps t0 siphon significant sums 0f money from companies 100% owned by plaintiff Ma. (SAC, 28.) On multiple occasions, defendant Rao would locate and identify money owed t0 Ma in his sole and individual capacity from companies that he owned entirely, improperly redefine those amounts owed 0n the companies books as a loan t0 shareholders, and then have the payouts for the newly created loans transferred to accounts defendant Rao created and controlled without Ma s knowledge 0r consent, thereby bleeding millions 0f dollars from Ma Labs and/or its affiliates. (|d.) On April 1, 2016, plaintiffs Ma, Ma Labs, Great World Real Estate LLC ( Great World ), SuperTalent Electronics, Inc. (STE ), and ITExpress Corporation ( ITE ) filed a complaint against defendant Rao, eWiz Express Corporation ( eWiz ), NewBiiz, and EE. Following a demurrer and motion t0 strike, plaintiffs filed a first amended complaint 0n November 1, 2016. On December 15, 2016, defendants filed an answer and cross- complaint. On February 24, 2017, plaintiffs filed an answer t0 defendants cross-complaint. Also 0n February 24, 2017, plaintiff Ma Labs filed a cross-complaint against defendant Rao which asserted a single cause 0f action for breach ofduty 0f loyalty/ faithless servant. On April 25, 2017, defendant Rao filed an answer t0 Ma Labs s cross-complaint. On November 16, 2018, the court granted plaintiffs leave t0 file a SAC t0 assert a new claim 0f financial elder abuse. In a 113 page SAC filed 0n November 19, 2018, plaintiffs Ma, Ma Labs, Great World, STE, and ITE assert the following 38 causes 0f action against defendants Rao, eWiz, NewBiiz, and EE. (1) Breach 0f Fiduciary Duty [plaintiff Ma Labs against defendant Rao] (2) Breach 0f Contract [plaintiff Ma Labs against defendant Rao] (3) Conversion [plaintiff Ma Labs against defendant Rao] Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 2 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER (4) Trespass [plaintiff Ma Labs against defendant Rao] (5) Intentional Interference with Economic Relationship [plaintiff Ma Labs against defendant Rao] (6) Accounting [plaintiff Ma Labs against defendant Rao] (7) Conversion [plaintiff Ma Labs against defendant NewBiiz] (8) Accounting [plaintiff Ma Labs against defendant NewBiiz] (9) Conversion [plaintiff Ma Labs against defendant EE] (10 Accounting [plaintiff Ma Labs against defendant EE] (11 Breach 0f Contract (Failure t0 Pay for Sale 0f Goods) [plaintiff Ma Labs against defendant eWiz] (13 Breach 0f Contract (Failure t0 Pay Rents Owed Under Lease Agreements) [plaintiff Ma Labs against def ndant eWiz] ) ) (12) Breach 0f Contract (Failure t0 Pay Assembly Fee) [plaintiff Ma Labs against defendant eWiz] ) e 14 Breach 0f Contract (Failure t0 Pay for Backend Services) [plaintiff Ma Labs against defendant eWiz] 15 Breach 0f Contract (Failure t0 Pay for Wuhan Services) [plaintiff Ma Labs against defendant eWiz] 16 Breach 0fthe Implied Covenant 0f Good Faith and Fair Dealing [plaintiff Ma Labs against defendant eWiz] 17 Common Count: Goods and Services Rendered [plaintiff Ma Labs against defendant eWiz] 18 Common Count: Money Had and Received [plaintiff Ma Labs against defendant eWiz] 19 Common Count: Account Stated [plaintiff Ma Labs against defendant eWiz] 20 Common Count: Quantum Meruit [plaintiff Ma Labs against defendant eWiz] 21 Accounting [plaintiff Ma Labs against defendant eWiz] 22 Declaratory Relief [plaintiff Ma Labs against defendant eWiz] 23 Ejectment [plaintiff Great World against defendant eWiz] 24 Declaratory Relief [plaintiffs Great World and Ma Labs against defendant eWiz] ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) ( ) (25) Conversion [plaintiffGreat World against defendant Rao] (26) Breach 0f Fiduciary Duty [plaintiff Great World against defendant Rao] (27) Accounting [plaintiffs Great World and Ma against defendant Rao] (28) Rescission Fraud and Deceit [plaintiff Ma against defendant Rao] (29) Rescission Fraud and Deceit [plaintiff Ma against defendant Rao] (30) Declaratory Relief [plaintiffs Great World and Ma against defendant Rao] (31) Conversion [plaintiff STE against defendant Rao] (32) Breach 0f Fiduciary Duty [plaintiff STE against defendant Rao] (33) Accounting [plaintiff STE against defendant Rao] (34) Conversion [plaintiff ITE against defendant Rao] (35) Breach 0f Fiduciary Duty [plaintiff ITE against defendant Rao] ( )36 Accounting [plaintiff ITE against defendant Rao] Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 3 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER (37) Unfair Competition (Bus. & Prof. Code 17200) [plaintiff Ma Labs against all defendants] (38) Financial Elder Abuse (Welf. & Inst. Code 15610 et seq.) [plaintiff Ma against defendant Rao] On December 7, 2018, defendant Rao filed the motion now before the court, a motion for summary adjudication 0f plaintiffs first through sixth and twenty-fifth through thirty-seventh claims (highlighted above) against Rao in the SAC. Rao s motion also seeks summary adjudication of the first and only cause of action for breach 0f duty 0f loyalty/ faithless servant asserted by Ma Labs against Rao in its February 27, 2017 cross-complaint. On December 17, 2018, defendant Rao filed a demurrer t0 plaintiff Ma s thirty-eighth cause 0f action for financial elder abuse. On December 26, 2018, a request for dismissal was filed in which, among other things, plaintiffs consented to dismissal 0f the 11th through 24th causes 0f action in the SAC. On January 18, 2019, the court issued an order overruling defendant Rao s demurrer t0 plaintiff Ma s thirty- eighth cause 0f action for financial elder abuse. On February 4, 2019, defendants Rao, NewBiiz and EE each separately filed answers to the SAC. I. Defendant Rao s motion for summary adjudication of the 28th cause 0f action [rescission] is DENIED. A. Relevant allegations. Ma Labs principal place of business is located in an approximately 117,000 square foot facility located at 2075 N. Capitol Avenue in San Jose ( Capitol Property ). (SAC, 44.) On 0r about June 12, 1997, Ma Labs acquired the Capitol Property. (SAC, 142.) In 0r around the summer 0f 2006, Ma determined that the Capitol Property should be transferred out 0f Ma Labs and held by a separate entity which, like Ma Labs, would be wholly owned by Ma as his sole and separate property. (SAC, 143.) Consistent with this plan, 0n 0r about September 15, 2006, Articles 0f Incorporation for plaintiff Great World Real Estate, LLC ( Great World ) were filed with the California Secretary 0f State. (SAC, 144.) At the time 0f forming Great World, it was Ma s intention and expectation t0 contribute S2 million of his separate property funds t0 Great World in order t0 implement the global plan t0 effect a sale 0f the Capitol Property t0 Great World. (SAC, 145.) Shortly after the Great World Articles 0f Incorporation were filed, Rao approached Ma asking to be granted a fifty percent interest in Great World. (SAC, 146.) Ma agreed that, so long as he and Rao invested S2 million 0f her own money into Great World and was equally yoked in the benefits and burdens 0f ownership 0f the Capitol Property, Rao could be a member 0f Great World. (|d.) Ma informed Rao that she could be a member if, and only if, she contributed S2 million 0f her own separate property funds t0 Great World. (|d.) Rao agreed t0 the terms and conditions 0f Ma s proposal and promised she would make a S2 million capital Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 4 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER contribution in consideration for a fifty percent interest in Great World. (SAC, 147.) In reliance, Ma agreed that he and Rao would be members of Great World although Ma would act as its sole manager. (|d.) But for Rao s representation, promise, and agreement t0 contribute S2 million t0 the capital 0f Great Worlds, Ma would not have consented t0 (i) the fundamental change in ownership ofGreat World; (ii) language in the operating agreement t0 reflect Rao as a fifty percent member; and (iii) Ma Labs sale ofthe Capitol Property t0 Great World. (|d.) The Great World Operating Agreement was executed by Ma and Rao 0n 0r about October 18, 2006. (SAC, 150.) Ma Labs sold the Capitol Property t0 Great World for approximately S9 million. (SAC, 148.) Great World was t0 be capitalized with $4 million, with S2 million going t0 the down payment. (|d.) Great World received a bank loan for the remaining S7 million. (|d.) Ma Labs leases the Capitol Property from Great World paying $81,760 per month in rent under a triple net master lease, entered into a the time 0f formation 0f Great World. (SAC, 44.) Unknown t0 Ma and Ma Labs, Rao had n0 intention 0f performing her obligation t0 make a S2 million contribution t0 Great World as a condition t0 receiving a 50% membership interest in Great World. (SAC, 154.) Within the last two years, Ma learned that Tony Hua ( Hua ), Ma Labs controller and later Vice President of Finance, used (at Rao s instruction) a Ma Labs debt to Ma as part ofthe consideration provided by Great World t0 Ma Labs. (SAC, 155.) As a result, instead ofGreat World paying S9 million for the Capitol Property as originally contemplated, Great World assumed S2 million debt t0 Ma (relieving Ma Labs 0f the obligation) and paid Ma Labs S7 million in cash. (|d.) Plaintiffs were unable to discover Rao s actions sooner due t0 her exclusive management and exclusive handling 0f the books and records 0f Ma Labs and Great World. (|d.) The net result 0fthe transaction was (i) Rao did not make her capital contribution 0f$2 million; and (ii) an obligation was reflected on the books and records of Great World as a debt clue to Ma and Rao as a loan t0 shareholders. (SAC, 156.) Such an entry was a complete fabrication as the amount payable was t0 Ma, solely in his individual capacity, and Rao had n0 interest in the S2 million due and owing t0 Ma. (|d.) Rao took for her own benefit the very funds Ma had intended t0 constitute his capital contribution to Great World. (SAC, 158.) In four separate transactions between September 25, 2008 and October 22, 2010, Rao transferred funds in the amount 0f $3,057,951.92 from Great World t0 her Rao s own personal account in abuse 0f her exclusive management, dominion, and control 0f the Great World account and without the authorization, prior knowledge, 0r approval 0f Ma. (SAC, 161.) Despite Ma s request that Rao return the diverted funds, Rao has failed and refused t0 disgorge and make restitution 0f said funds 0r any part thereof. (SAC, 162.0 B. Rescission Fraud and Deceit (28th cause 0f action). In the 28th cause 0f action by Ma against Rao, it is alleged Rao promised Ma she would contribute S2 million of her own separate property to Great World in exchange for a 50% membership interest in Great World whose purpose was t0 acquire and hold the Capitol Property. (SAC, 343.) Due t0 Rao s fraudulent and material misrepresentation, upon which Ma reasonably relied, Ma executed the Great World Operating Agreement naming Rao a 50% member of Great World. (SAC, 344.) Rao failed t0 make the $2 million promised payment, actively taking steps t0 conceal this fact from Ma. (SAC, 345.) But for Rao s Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 5 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER misrepresentation and concealment, Ma would not have agreed t0 execute the Great World Operating Agreement naming Rao a 50% member. (SAC, 346.) Rescission is not a cause 0f action; it is a remedy. (Nakash v. Superior Court (1987) 196 Cal.App.3d 59, 70.) The traditional equitable action t0 have the rescission 0f a contract adjudged was recognized in former Civil Code 3406. [H0wever,] the equitable action was abolished in 1961, and the remedy is now a legal action for restitution based 0n a completed unilateral rescission. (4 Witkin, California Procedure (4th ed. 1997) 502, p. 590 591.) The following need t0 be alleged in an action for restitution after completed unilateral rescission: (1) the contract 0r other contractual instrument; (2) the grounds for rescission; (3) ifthe ground is breach 0f contract, plaintiff s own performance. (4 Witkin, California Procedure (4th ed. 1997) 503, p. 591; see also Runyan v. Pacific Air Industries, Inc. (1970) 2 Ca|.3d 304 (Runyan).) In the twenty-eighth cause 0f action, Ma seeks rescission 0f the Great World Operating Agreement. The alleged ground for rescission is fraud which, under Civil Code section 1689, subdivision (b)(l), is one 0f the enumerated grounds for rescission. 1. Promise. Promissory fraud is a subspecies of the action for fraud and deceit. A promise t0 do something necessarily implies the intention t0 perform; hence, where a promise is made without such intention, there is an implied misrepresentation 0f fact that may be actionable fraud. [Citation omitted] The elements 0f promissory fraud (i.e., of fraud or deceit based on a promise made without any intention 0f performing it) are: (1) a promise made regarding a material fact without any intention 0f performing it; (2) the existence 0f the intent not t0 perform at the time the promise was made; (3) intent t0 deceive 0r induce the promisee t0 enter into a transaction; (4) reasonable reliance by the promisee; (5) nonperformance by the party making the promise; and (6) resulting damage t0 the promise. [Citation omitted] (Behnke v. State Farm General Ins. C0. (2011) 196 Cal.App.4th 1443, 1453.) In moving for summary adjudication 0f this twenty-eighth cause 0f action for rescission, Rao argues she did not make a promise t0 contribute S2 million 0f capital t0 Great World. Rao proffers her own declaration t0 support her assertion that she never promised t0 contribute S2 million 0f her separate money into Great World in 2006, 0r anytime thereafter. In opposition, plaintiff Ma proffers his own declaration in which he contends otherwise. Ma offers evidence that Ma Labs purchased the Capitol Property in early t0 mid-1997. In September 2006, Ma determined it was prudent for liability purposes to transfer the Capitol Property to a California limited liability company in which he was the sole member. Ma relied 0n his spouse, Rao, the Vice President 0f Ma Labs at the time, and Hua, Ma Labs Vice President 0f Finance, who reported directly t0 Rao, t0 carry out the formation 0f Great World as a single member LLC and the transfer 0f the Capitol Property to Great World. Articles of Organization of Great World were filed with the California Secretary 0f State 0n September 15, 2006 with Ma as sole member and designated manager. Approximately two weeks after Great World had been formed, Rao asked Ma t0 be a member 0f Great World. In response to Rao s request, Ma sated he was willing t0 make Rao a member 0f Great World 0n the condition that she invest S2 million 0f her own funds in Great World because Ma had Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 6 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER made a S2 million investment in the Capitol Property that was t0 be the entity s sole asset. Rao agreed t0 make a S2 million investment in Great World from her own separate property as a condition 0f becoming a member 0f Great World. Ma s evidence depicts events which contradict Rao s version. As such, a triable issue 0f material facts exists with regard t0 whether Rao made a promise t0 Ma t0 make a S2 million investment into Great World. 2. Intent. As a separate basis for summary adjudication, Rao contends Ma cannot show fraudulent intent. Fraud is an intentional tort; it is the element of fraudulent intent, or intent t0 deceive, that distinguishes it from actionable negligent misrepresentation and from nonactionable innocent misrepresentation. It is the element 0f intent which makes fraud actionable, irrespective 0f any contractual 0r fiduciary duty one party might owe t0 the other. (City 0f Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 482.) Something more than nonperformance is required t0 prove the defendant s intent not t0 perform his promises. A promise 0f future conduct is actionable as fraud only if made without a present intent t0 perform. (Civ. Code, 1710, subd. 4; [Citation 0mitted.]) A declaration 0f intention, although in the nature 0f a promise, made in good faith, without intention t0 deceive, and in the honest expectation that it will be fulfilled, even though it is not carried out, does not constitute a fraud. [Citati0n.] [Citation omitted] Moreover, something more than nonperformance is required t0 prove the defendant s intent not t0 perform his promise. [Citations] [|]f plaintiff adduces n0 further evidence 0f fraudulent intent than proof 0f nonperformance 0f an oral promise, he will never reach ajury. (Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 481.) [T]he intent element 0f promissory fraud entails more than proof of an unkept promise 0r mere failure 0f performance. (Riverisland Cold Storage, Inc. v. Fresno-Madera Production Credit Ass'n (2013) 55 Ca|.4th 1169, 1183 (Riverisland).) T0 be sure, fraudulent intent must often be established by circumstantial evidence. (Riverisland, supra, 55 Cal.4th at p. 1183.) In moving for summary adjudication, Rao does little more than suggest that there can be n0 circumstantial support 0f fraudulent intent 0r that [Ma] cannot prove intent t0 deceive. However, as the moving party 0n a motion for summary adjudication, Rao must d0 more than make suggestions 0r naked assertions that the plaintiff cannot prove an element of his claim. On a motion for summary judgment or adjudication, it is the moving defendant s burden t0 show that at least one element 0f the plaintiff s cause 0f action cannot be established, 0r that there is a complete defense t0 the cause 0f action. (Alex R. Thomas & C0. v. Mutual Service Casualty Ins. C0. (2002) 98 Cal.App.4th 66, 72.) The tried and true way for defendants t0 meet their burden 0f proof 0n summary judgment motions is t0 present affirmative evidence (declarations, etc.) negating, as a matter 0f law, an essential element 0f plaintiffs claim. (Weil & Brown et a|., CAL. PRAC. GUIDE: CIV. PROC. BEFORE TRIAL (The Rutter Group 2019) 10:241, p. 10-104 citing Guz v. Bechtel Nat I, Inc. (2000) 24 Cal.4th 317, 334; italics original.) Another way for a defendant to obtain summary judgment is t0 show that an essential element 0f plaintiff s claim cannot be established. Defendant does so by presenting evidence that plaintiff does not possess and cannot reasonably obtain, needed evidence (because plaintiff must be allowed a reasonable opportunity t0 oppose the motion.) Such evidence usually consists 0f admissions by plaintiff following extensive discovery t0 the effect that he 0r she has discovered nothing t0 support an essential element 0f the cause 0f action. (Id. at Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 7 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER 10:242, p. 10-102 citing Aguilar v. Atlantic Richfield C0. (2001) 25 Ca|.4th 826, 854 855; italics original.) Here, Rao does not direct the court t0 any evidence negating the element 0f intent 0r affirmatively showing that Ma cannot establish fraudulent intent. Consequently, Rao has not met her initial burden with regard t0 the element 0f fraudulent intent. 3. Statute 0f limitations. Finally, Rao moves for summary adjudication 0f the twenty-eighth cause 0f action for rescission by arguing the claim is barred by a three year statute 0f limitations because the action is grounded in fraud. Rao acknowledges, While resolution of the statute of limitations issue is normally a question 0f fact, where the uncontradicted facts established through discovery are susceptible 0f only one legitimate inference, summary judgment is proper. (Jolly v. Eli Lilly & C0. (1988) 44 Ca|.3d 1103, 1112; see also Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 810 Resolution of the statute of limitations issue is normally a question of fact.) Rao contends the evidence supports the inference here that plaintiff Ma discovered the facts constituting fraud more than three years before the commencement 0f this action in April 2016 and, therefore, the claim is barred. The cause 0f action in that case is not deemed t0 have accrued until the discovery, by the aggrieved party, 0fthe facts constituting the fraud 0r mistake. (Code Civ. Proc., 338, subd. (d).) This discovery element has been interpreted t0 mean the discovery by the aggrieved party 0f the fraud 0r facts that would lead a reasonably prudent person t0 suspect fraud. (Doe v. Roman Catholic Bishop 0f Sacramento (2010) 189 Cal.App.4th 1423, 1430.) Rao proffers evidence that Ma signed his companies and Great World s tax returns. Great World s tax returns for the years 2006 through 2012 reveal that a S4 million initial capital capitalization in the LLC was not made in 2006. Ma and Ma Labs employees had access t0 Great World s bank statements. Ma Labs employees reviewed and input data information into Great World s financial statements. Hua, Irene Wang, and Mingle Wu reviewed 0r inputted data into Great World Real Estate LLC financials. For the years 2010, 2011, and 2012, Great World s financial records reflect a single $2,000,000 deposit. In February 2010, Great World s bank account had a beginning balance of $113,730.10. Ma took a $900,000 withdrawal from Great World s bank account in February 2010. From these facts, Rao contends the only legitimate inference which can be drawn is that Ma knew 0f facts that would lead a reasonably prudent person t0 suspect fraud. The court does not agree with Rao that the only legitimate inference t0 be drawn is that Ma knew 0f facts that would lead a reasonably prudent person t0 suspect fraud. In ruling 0n a motion for summary judgment/ adjudication, we liberally construe plaintiff's evidentiary submissions and strictly scrutinize defendant's own evidence, in order t0 resolve any evidentiary doubts 0r ambiguities in plaintiff's favor. (Johnson v. American Standard, Inc. (2008) 43 Cal.4th 56, 64.) Strictly scrutinizing defendant Rao s evidence, Rao s evidence is that Ma had access t0 information from which he could have discovered fraud 0r suspected fraud, but does not lead this court t0 find only one legitimate inference as a matter 0f law. Consequently, Rao has not met her initial burden with regard to the statute 0f limitations argument. Even if Rao had met her initial burden, in opposition, Ma contends knowledge of these facts would not have put him 0n notice 0f fraud. Ma introduces evidence that prior t0 Great World s formation and transfer 0f the Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 3 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER Capitol Property from Ma Labs t0 Great World, Rao and Ma discussed and understood that Comerica Bank required a $2 million down payment as part 0f the financing 0f the purchase-sale of the Capitol Property necessary for Great World t0 pay Ma Labs the S9 million purchase price based 0n the Capitol Property s appraised value. Rao acknowledged a S2 million capital contribution t0 Great World was required for that entity to acquire the Capitol Property, and that she took the capital from Ma Labs distribution account. The S2 million investment Rao agreed t0 make t0 Great World was t0 pay (be the source 0f) the S2 million down payment required by Comerica. This was because Ma/ Ma Labs originally funded the purchase 0f the Capitol Property in 1997 with S2 million. In other words, only Rao was required t0 make a capital contribution upon the formation 0f Great World and only Rao s capital contribution would be reflected in the closing documents associated with Great World s purchase 0f the Capitol Property. On October 18, 2006, Rao and Ma met with Hua in a conference room t0 review and sign two related agreements that had been drafted to set forth the terms and conditions of Ma s agreement, on behalf of Ma Labs, t0 g0 forward with the purchase-sale 0f the Capitol Property by Ma Labs t0 Great World (including the S2 million down payment and the terms and conditions 0f Ma s agreement with Rao, being the basis 0n which Ma agreed with Rao to make her a member of Great World. At that meeting, Hua presented Ma with two agreements t0 sign: (1) Great World Real Estate LLC Purchase Agreement and Joint Escrow Instructions and (2) the Great World Real Estate LLC Operating Agreement. Ma executed the Purchase Agreement and Joint Escrow Instruction, in his capacity as President 0f Ma Labs and as Manager 0f Great World, at the same time Rao and Ma executed the Great World Operating Agreement. The Great World Operating Agreement refers t0 Rao having made her S2 million investment with Great World. Without Ma s knowledge 0r consent, escrow for sale 0f the Capitol Property t0 Great World closed 0n terms and conditions materially different from those set forth in the Purchase Agreement and Joint Escrow Instructions and as understood and agreed between Ma and Rao prior t0 Ma signing the Great World Operating Agreement. The closing statement altered the Joint Escrow Instruction and specifically altered the $2 million initial deposit requirements by replacing it with an escrow statement line item that identifies a different and unrelated consideration being received by Ma Labs: Chg S/Cr Buyer for Note Pymt [Charge Seller Credit buyer for Note Payment] in the sum 0f S2 million. The Alteration was made without Ma s knowledge 0r consent and purports t0 charge Ma Labs and credit Great World for a Note Payment purporting t0 pertain t0 the unrelated S2 million cash infusion that Ma made t0 Ma Labs from his own personal property a year earlier in September 2005. The Purchase Agreement and Joint Escrow Instructions were not in the files 0f Ma Labs or Great World, could not be located and are missing. Ma Labs obtained a copy from Comerica Bank for the first time in late 2018. In short, Ma asks the court t0 infer that Rao altered the escrow instructions without his knowledge 0r consent t0 use the Ma Labs debt t0 Ma as the consideration provided by Great World instead 0fthe S2 million which Rao agreed to pay. Ma did not discover this until 2018 after obtaining the escrow instructions from Comerica Bank. Indulging this inference as the court must in considering the evidence, there is at least a triable issue 0f material fact with regard t0 when and whether plaintiff discovered fraud, and thus whether the statute 0f limitations applies to bar the claim. Accordingly, defendant Rao s motion for summary adjudication of plaintiff Ma s twenty-eighth cause of action for rescission is DENIED. ||. Defendant Rao s motion for summary adjudication 0f the 29th cause 0f action [rescission] is GRANTED. Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 9 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER The twenty-ninth cause 0f action in the SAC is another claim for rescission based 0n fraud by Ma against Rao. The twenty-ninth cause 0f action seeks an order rescinding the purchase-sale 0fthe Capitol Property from Ma Labs t0 Great World; restoring all right, title, and interest in the Capitol Property to Ma Labs; requiring Rao to make restitution t0 Ma Labs for all rents that Ma Labs paid as a result 0fthe transaction; and requiring Rao t0 make restitution t0 Ma Labs for all property taxes that it paid for the sale 0f the Capitol Property. (See SAC, pp. 109 110 [prayer for reliefl.) In moving for summary adjudication of the twenty-ninth cause of action, Rao makes a number of argument but the one that resonates with the court is Rao s argument that she is not a party t0 the purchase-sale agreement (between Ma Labs and Great World) and, therefore, a claim 0f rescission is not proper against her individually. Although Rao does not cite any legal authority in support, the court found Clancy v. Becker- ArbuckIe-Wright Corp. (1934) 137 Cal.App. 43 (Clancy) supportive 0f Rao s position. In Clancy, the plaintiff brought an action for the rescission 0f a contract t0 purchase real property and t0 recover the sum 0f $2,052.50 which had been paid. Defendant Title Guarantee & Trust Company was the owner with which plaintiff entered into the written contract t0 purchase the land. Defendant Becker Arbuckle Wright Corporation was the broker 0r selling agent in charge 0f the sale. The trial court granted nonsuit in favor 0f the broker/ selling agent and the appellate court affirmed by explaining: Appellant proceeded upon the theory that she was entitled to a judgment 0f rescission against the selling agent, but it appears that the selling agent was not a party t0 the contract which appellant sought t0 rescind. If the selling agent was guilty 0f actionable fraud, a recovery might have been had against the selling agent in an action for damages regardless of the nonliability of the owner resulting from the clause contained in the contract. But here the action was solely an action for rescission, and the complaint contained n0 allegations 0f damage, which allegations are essential in an action for damages for fraud. We are 0f the opinion that appellant was not entitled t0 a judgment for rescission against one who was not a party t0 the agreement and that the nonsuit was properly granted herein as t0 the selling agent. (Clancy, supra, 137 Cal.App. at p. 47.) Similarly here, Rao is not a party t0 the purchase-sale agreement 0f the Capitol Property between Ma Labs and Great World. In opposition, plaintiff argues in a footnote, It makes n0 difference that Rao individually is not a party to the sale 0f the Capitol Property. It was only through fraud that Rao became a member of Great World, and she effectuated the sale 0f the Capitol Property based 0n this fraud and as CEO 0f Ma Labs, which justifies rescission. Clancy holds otherwise. Accordingly, defendant Rao s motion for summary adjudication 0f plaintiff Ma s twenty-ninth cause 0f action for rescission is GRANTED. |||. Defendant Rao s motion for summary adjudication 0f the 3rd, 25th, 315t, and 34th causes of action [conversion] is DENIED. A. Statute 0f limitations. Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 10 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER Rao moves for summary adjudication 0f the conversion causes 0f action asserted against her by plaintiffs Ma Labs, Great World, STE, and ITE in the third, twenty-fifth, thirty-first, and thirty-fourth causes 0f action, respectively, on the ground that they are all barred by the three year statute 0f limitation. Rao proffers evidence that the conversion causes 0f action are based upon fourteen transfers 0f money occurring in February, March and September 2008, March, July, September, and December (3 transfers) 2009, February (3 transfers) and October 2010, and September 2011, but that the complaint in this action was not filed until April 1, 2016. Rao states the rule it is the act 0f wrongfully taking the property which triggers the statute 0f limitations. Thus, according t0 Rao, the latest taking occurred in September 2011, more than three years prior t0 the filing of the complaint on April 1, 2016 ran regardless of plaintiffs lack 0f knowledge. In support 0fthis argument, Rao cites a case stating this general principle. (See Coy v. E.F. Hutton & C0. (1941) 44 Cal.App.2d 386, 390 [plaintiff's cause 0f action accrued the day 0f the alleged conversion 0f his stock and suit against stockbroker filed more than four years later was barred by statute 0f limitations]; see also H. Russell Taylor s Fire Prevention Serv., Inc. v. Coca Cola Bottling Corp. (1979) 99 Cal.App.3d 711, 725 It has been established that where an original taking is wrongful, the bar 0f the statute 0f limitations runs from the time 0f the unlawful taking. See also 3 Witkin, California Procedure (4th ed. 1996) Actions, 571, p. 725 The act 0f unlawful taking 0r disposal 0f the property is the wrong, and the statute starts running at the time 0f the act, regardless 0f the plaintiff s lack 0f knowledge. ) While this may be the general rule, our Supreme Court has noted an exception for cases in which a fiduciary has concealed the material facts giving rise to the cause 0f action. Ordinarily the statute 0f limitations applying in conversion actions (Code Civ. Proc., 388, subd. 3 [now subdivision (c)]) begins t0 run from the date 0f the conversion even though the injured person is ignorant 0f his rights. (First Nat. Bank v. Thompson, 60 Cal.App.2d 79, 83 [140 P.2d 75]; Coy v. E.F. Hutton & (30., 44 Cal.App.2d 386, 389-391 [112 P.2d 639]; Rose v. Dunk-Harbison C0. [(1935)] 7 Cal.App.2d 502, 505-506 [46 P.2d 242].) This rule, however, is not absolute; for example, where there has been a fraudulent concealment 0f the facts the statute 0f limitations does not commence t0 run until the aggrieved party discovers or ought to have discovered the existence of the cause 0f action for conversion. (Bartlett v. Pacific Nat. Bank [(1933)] 110 Cal.App.2d 683, 694 [244 P.2d 91]; see Rose v. Dunk-Harbison C0., 7 Cal.App.2d 502, 505; 2 Wood 0n Limitations (4th ed., 1916) 858-859; cf. Pashley v. Pacific Elec. Ry. Co. [(1944)] 25 Cal.2d 226, 229 [153 P.2d 325].) Since a fiduciary has a duty to make a full disclosure 0f facts which materially affect the rights of the parties, it seems obvious that any act by him amounting t0 a conversion 0f trust property is akin t0 a fraudulent concealment. [Citations.] This is in accord with statements in many decisions that statutes 0f limitations d0 not begin to run against an action for breach 0f a voluntary trust until there has been a repudiation which is brought home t0 the beneficiary. [Citations.] (Bennett v. Hibernia Bank (1956) 47 Ca|.2d 540, 561 [305 P.2d 20]; see also Sears v. Rule (1945) 27 Ca|.2d 131, 147-148 [163 P.2d 443]; Hobart v. Hobart Estate C0. (1945) 26 Cal.2d 412, 436-441 [159 P.2d 958]; 3 Witkin, Cal. Procedure (3d ed. 1985) Actions, 469, p. 499 [in actions against a fiduciary accrual 0f the cause 0f action is delayed until the beneficiary has knowledge 0r n0tice].) (Strasberg v. Odyssey Group, Inc. (1996) 51 Cal.App.4th 906, 916 917.) In anticipation, Rao argues there was n0 fraudulent concealment proffering evidence that the plaintiff Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 11 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER companies had actual knowledge 0f the transfers through their accounting employees and because the transfers/ distributions were documented in plaintiff companies records. The court finds a triable issue of material fact exists, however, based 0n the evidence submitted by plaintiffs in opposition t0 show that Rao had a fiduciary duty t0 Ma and did not disclose t0 Ma that she directed the transfers t0 be made. Of particular relevance t0 this court is evidence submitted that by 2007, Rao had become official Chief Executive Officer, although she had been performing such duties since 1997. As CEO of Ma Labs, Rao oversaw all company business, and was responsible for hiring the senior management and senior level employees and building up the management team. As CEO 0f Ma Labs, Rao oversaw all upper levels of Ma Labs management and each department from finance, t0 purchasing, to marketing, t0 sales, etc. All 0f these departments reported directly t0 Rao. In addition t0 managing Ma Labs, Rao also exercised complete control over Ma Labs affiliate businesses, including Great World, STE, and ITE. Rao oversaw all financial aspects of the business and handles all 0f the corporate bookkeeping. On or about July 9, 2007, Ma exercised a durable power of attorney appointing Rao as Ma s attorney in fact. Rao accepted the appointment that same day. By accepting the appointment, Rao agreed t0 act as a fiduciary t0 Ma. The durable power 0f attorney stated: | give my attorney in fact the powers in Article One and elsewhere in this Power with the understanding that they will be used for my benefit and 0n my behalf and will be exercised in a fiduciary capacity. Rao exercised complete control over Ma s personal and household finances. Ma trusted Rao with running his businesses. When Rao gave instructions t0 Ma Labs employees, those instructions were followed and not questioned because she was the CEO of Ma Labs and the wife of the owner of Ma Labs, Ma. Rao had full authority t0 make day-to-day decisions at the office. As controller 0f Ma Labs, Irene Wang followed the instructions given t0 her by Rao relating t0 Ma Labs finances and business transactions. Ma first learned 0f various transactions by Rao in 2015 but has n0 recollection 0f being told by Rao about the various accounts or writing checks from the account. Ma did not sign a signature card for the account 0r accompany Rao when she allegedly added him t0 the account. There are n0 individual transaction details regarding shareholder distributions, individual loans, 0r individual loan repayments in the monthly income statements and balance sheet for any of the plaintiff companies. The monthly income statements show the profit and loss result 0f the operation. Balance sheets for each 0f the plaintiff companies show only the end balances at month end. Neither Ma Labs audited financials nor K-ls disclose transaction details regarding shareholder distributions. The audited financials show only the ending balance for total shareholder distributions in a given year. Rao transferred all the funds she received from Ma Labs, Great World, STE, and ITE t0 a myriad 0f various accounts owned solely by her over which she had exclusive control, some 0f which may be overseas accounts, or to other individuals. This evidence is enough t0 present a triable issue with regard t0 whether and when the statute 0f limitations accrued for the conversion claims. B. Assent/ Ratification. As a separate basis summary adjudication 0f the conversion causes 0f action, defendant Rao argues plaintiff companies assented to and/or ratified the distributions which were made. [T]he law is well settled that there can be n0 conversion where an owner either expressly 0r impliedly assents t0 0r ratifies the taking, use 0r Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 12 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER disposition 0f his property. (Farrington v. A. Teichert & Son, Inc. (1943) 59 Cal.App.2d 468, 474, internal citations omitted.) As to intentional invasions 0f the plaintiff's interests, his consent negatives the wrongful element 0f the defendant's act, and prevents the existence 0f a tort. The absence 0f lawful consent, said Mr. Justice Holmes, is part 0f the definition 0f an assault. The same is true 0f false imprisonment, conversion, and trespass. (Tavernier v. Maes (1966) 242 Cal.App.2d 532, 552, internal citations omitted.) In opposition, plaintiff companies contend there is a triable issue with regard to ratification because Rao is engaged in self-dealing in light 0f her fiduciary duty t0 Ma who is the owner 0r part owner in each 0f plaintiff companies and did not have knowledge 0r give consent t0 the transfers. The same evidence cited above creates a triable issue 0f material fact with regard to whether the plaintiff companies assented/ ratified the alleged acts 0f conversion. Accordingly, defendant Rao s motion for summary adjudication 0f plaintiffs Ma Labs, Great World, STE, and ITE s third, twenty-fifth, thirty-first, and thirty-fourth causes 0f action causes 0f action for conversion is DENIED. IV. Defendant Rao s motion for summary adjudication 0f the 3rd cause 0f action [conversion] is DENIED. At paragraph 203 0f the SAC in plaintiff Ma Labs claim for conversion against Rao, it is alleged, While acting as CEO, Defendant Rao through a scheme 0f fraudulent transfers intentionally took over $2.9 million in funds from Ma Labs bank account(s) for her own personal use and enjoyment. Additionally, Defendant Rao took and removed from Ma Labs documents, property and information owned by and belonging t0 Ma Labs and she continues t0 retain and possess such documents, property and information, refusing t0 return them despite express request 0f Ma Labs. (Emphasis added.) Rao separately moves for summary adjudication as t0 this highlighted portion 0f Ma Labs third cause 0f action for conversion. However, Code 0f Civil Procedure section 437C, subdivision (f) does not authorize partial summary adjudication. The purpose 0f the enactment 0f Code 0f Civil Procedure section 437C, subdivision (f) was t0 stop the practice 0f piecemeal adjudication 0f facts that did not completely dispose 0f a substantive area. (Catalano v. Superior Court (2000) 82 Cal.App.4th 91, 97.) In light of the court s ruling in section ||| above, there is at least some portion 0f the cause 0f action that cannot be adjudicated. Accordingly, defendant Rao s motion for summary adjudication 0f plaintiff Ma Labs third cause 0f action for conversion is DENIED. V. Defendant Rao s motion for summary adjudication 0f the 2nd cause 0f action [breach 0f contract] is DENIED. In the second cause of action 0f the SAC, plaintiff Ma Labs asserts a breach 0f contract cause of action against Rao based 0n allegations that, In 0r around April 1993, Defendant Rao entered into an employment agreement with Ma Labs. Pursuant t0 the employment, Defendant Rao promised t0 refrain from acts 0f competition 0r conflict 0f interest against Ma Labs during the period of her employment including the confidentiality 0f all confidential and proprietary corporate information. (SAC, 196.) Additionally, Defendant Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 13 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER Rao signed an acknowledgment promising t0 abide by terms and conditions set forth in Ma Labs employee handbook. The Ma Labs handbook states: It is against Company policy for anyone other than authorized MIS manager and approved in writing t0 delete, remove, 0r copy files from the Company s computer. (SAC, 197.) In 0r around the later part 0f 2014, in blatant disregard 0f her promises t0 Ma Labs, Defendant Rao removed and copied Ma Labs documents and files, including documents and files containing Ma Labs confidential and proprietaryinformation. (SAC, 198.) A. Contract. T0 be entitled t0 damages for breach 0f contract, a plaintiff must plead and prove (1) a contract, (2) plaintiff's performance 0r excuse for nonperformance, (3) defendant's breach, and (4) damage t0 plaintiff. [Citations.] (Troyk v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1352 citing Walsh v. West Valley Mission Community College Dist. (1998) 66 Cal.App.4th 1532, 1545.) Rao argues initially that this second cause 0f action fails because there was 0n employment agreement which she signed. Rao proffers evidence that during discovery, Ma Labs did not offer any proof that an employment contract was formed in the 19905 and did not produce evidence that Rao ever signed an employee handbook. In opposition, Ma Labs proffers evidence which creates a triable issue of material fact with regard to the existence ofan employment agreement signed by Rao. Specifically, it is Ma Labs business practice and policy t0 have all employees execute an employment agreement upon hire. Rao executed an employment agreement when she began her employment in 1993. Ma Labs provides all employees an employee handbook. An updated employee handbook was distributed t0 all employees 0f Ma Labs in 2006, and circulated periodically. The employee handbook was in effect as 0f Rao s termination 0n December 14, 2014. Ma has seen Rao s employee file; all that it contains are |-95 and copies of Rao s identification. After Rao was placed 0n administrative leave and admonished not t0 return t0 the premises, and even after Rao s employment as Ma Labs CEO was terminated, Rao repeatedly returned without permission and removed corporate property believed to include her HR file and Great World file. B. Damages. Damages are an essential element of a breach of contract claim. (Behnke v. State Farm General Ins. Co. (2011) 196 Cal.App.4th 1443, 1468.) Rao argues next that Ma Labs cannot prove any damages arising from Rao s alleged removal 0r copying 0f any corporate files. As discussed above, as the moving party 0n a motion for summary adjudication, Rao must do more than make suggestions or naked assertions that the plaintiff cannot prove an element 0f his claim. On a motion for summary judgment 0r adjudication, it is the moving defendant s burden t0 show that at least one element 0f the plaintiff s cause 0f action cannot be established, 0r that there is a complete defense t0 the cause of action. (Alex R. Thomas & Co. v. Mutual Service Casualty Ins. Co. (2002) 98 Cal.App.4th 66, 72.) The tried and true way for defendants t0 meet their burden 0f proof 0n summary judgment motions is t0 present affirmative evidence (declarations, etc.) negating, as a matter 0f law, an essential element 0f plaintiffs claim. (Weil & Brown et a|., CAL. PRAC. GUIDE: CIV. PROC. BEFORE TRIAL (The Rutter Group 2019) 10:241, p. 10-104 citing Guz v. Bechtel Nat I, Inc. (2000) 24 Ca|.4th 317, 334; italics original.) Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 14 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER Another way for a defendant t0 obtain summary judgment is t0 show that an essential element 0f plaintiff s claim cannot be established. Defendant does so by presenting evidence that plaintiff does not possess and cannot reasonably obtain, needed evidence (because plaintiff must be allowed a reasonable opportunity t0 oppose the motion.) Such evidence usually consists 0f admissions by plaintiff following extensive discovery t0 the effect that he 0r she has discovered nothing t0 support an essential element 0f the cause 0f action. (Id. at 10:242, p. 10-102 citing Aguilar v. Atlantic Richfield C0. (2001) 25 Cal.4th 826, 854 855; italics original.) Here, Rao does not direct the court t0 any evidence negating the element of damages 0r affirmatively showing that Ma Labs cannot establish damages. Consequently, Rao has not met her initial burden. Accordingly, defendant Rao s motion for summary adjudication 0f plaintiff Ma Labs second cause 0f action for breach 0f contract is DENIED. VI. Defendant Rao s motion for summary adjudication 0f the 5th cause 0f action [intentional interference with economic relationship] is DENIED. In the fifth cause of action of the SAC, plaintiff Ma Labs asserts a cause of action for intentional interference with economic relationship against Rao based 0n allegations that Ma Labs and Defendant eWiz entered into a variety 0f written agreements and implied-in-fact contracts that were for the economic benefit 0f Ma Labs. (SAC, 215.) Defendant Rao knew of the above described agreements, contracts and relationships between Ma Labs and Defendant eWiz, in that Defendant Rao was the acting CEO 0f Ma Labs and was the holder 0f all shares 0f Defendant eWiz. (SAC, 216.) Despite the existence 0f the agreements and contracts, Defendant Rao refused to enforce the agreements 0n behalf 0f Ma Labs against Defendant eWiz, in violation of Defendant Rao s fiduciary duties t0 Ma Labs. Additionally, Defendant Rao refused t0 enter into the template agreements between Defendant eWiz and Ma Labs that would have formalized the implied-in-fact agreements between Defendant eWiz and Ma Labs. (SAC, 217.) Defendant Rao s conduct was designed to harm Ma Labs and interfere with the ongoing and future economic relationship between Defendant eWiz and Ma Labs. (SAC, 218.) Intentional interference with prospective economic advantage has five elements: (1) the existence, between the plaintiff and some third party, 0f an economic relationship that contains the probability of future economic benefit t0 the plaintiff; (2) the defendant's knowledge 0f the relationship; (3) intentionally wrongful acts designed t0 disrupt the relationship; (4) actual disruption 0f 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; see also CACI, N0. 2202.) Rao makes the legal argument that she, as the CEO of Ma Labs, cannot be liable for interference with a Ma Labs contract. Rao cites Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Ca|.4th 503, 513 514 (Applied) where the court wrote: Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 15 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER California recognizes a cause 0f action against noncontracting parties who interfere with the performance 0f a contract. It has long been held that a stranger t0 a contract may be liable in tort for intentionally interfering with the performance 0f the contract. [Citation and footnote omitted] However, consistent with its underlying policy of protecting the expectations 0f contracting parties against frustration by outsiders who have n0 legitimate social 0r economic interest in the contractual relationship, the tort cause 0f action for interference with contract does not lie against a party t0 the contract. [Citations omitted] (Italics original.) [A] stranger, as used in Applied Equipment, means one who is not a party t0 the contract 0r an agent of a party t0 the contract. (Woods, supra, 129 Cal.App.4th at p. 353, 28 Ca|.Rptr.3d 463; accord, Mintz v. Blue Cross 0f California (2009) 172 Cal.App.4th 1594, 1604, 92 Ca|.Rptr.3d 422 (Mintz) [settled that corporate agents and employees acting for and on behalf of a corporation cannot be held liable for inducing a breach 0f the corporation's contract ].) (Asahi Kasei Pharma Corp. v. Actelion Ltd. (2013) 222 Cal.App.4th 945, 963 964 (Asahi).) Rao contends she is a corporate agent and, consequently, cannot be liable for interfering with 0r inducing a breach 0f the corporation s contract. However, Rao omits 0r neglects language in Asahi stating, [S]ince long before Applied Equipment was decided, our courts have allowed contract interference claims t0 be stated against owners, officers, and directors 0f the company whose contract was the subject 0f the litigation. While those defendants may attempt t0 prove that their conduct was privileged orjustified, that is a defense which must be pleaded and proved. (Woods, supra, 129 Cal.App.4th at p. 356, 28 Ca|.Rptr.3d 463.) (Asahi, supra, 222 Cal.App.4th at p. 963.) The court agrees with plaintiff Ma Labs that Rao has not met her initial burden here 0f proving the affirmative defense, i.e., that her conduct was privileged. Rao proffers n0 relevant admissible evidence t0 support her assertion 0f a privilege. Accordingly, defendant Rao s motion for summary adjudication 0f plaintiff Ma Labs fifth cause 0f action for intentional interference with economic relationship is DENIED. VII. Defendant Rao s motion for summary adjudication 0f the lst, 26th, 32nd, and 35th causes 0f action 0f the SAC [breach 0f fiduciary duty] and lst cause of action of the cross-complaint by Ma Labs [breach of duty of loyalty/ faithless servant] is DENIED. A. Twenty-sixth, thirty-second, and thirty-fifth causes 0f action for breach 0f fiduciary duty. In moving for summary adjudication 0f the twenty-sixth, thirty-second, and thirty-fifth causes 0f action for breach 0f fiduciary duty by plaintiffs Great World, STE, and ITE, respectively, Rao contends these claims are merely a repackaging of corresponding conversion claims and since the conversion claims fail, so too d0 the claims for breach 0f fiduciary duty which are premised upon Rao s alleged conversion 0f funds. The court understands Rao s argument t0 incorporate, by reference, the arguments she made in connection with the Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 16 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER claims for conversion. For the reasons stated above, the court found triable issues 0f material fact with regard t0 the conversion claims. B. First causes of action ofSAC and cross-complaint for breach 0f fiduciary duty and breach 0f loyalty. In the first cause 0f action for breach 0f fiduciary duty by Ma Labs against Rao, the SAC alleges, Defendant Rao breached her fiduciary duty t0 Ma Labs by, among other things, (i) failing t0 sign and enforce agreements for the benefit 0f Ma Labs against other entities owned and controlled by Defendant Rao; (ii) misappropriating and misapplying funds from Ma Labs to accounts she controlled in an amount not less than $2.9 million and according t0 proof; (iii) misappropriating and misapplying funds from Ma Labs t0 entities that she owns and/or controls in an amount not less than $1.5 million and according t0 proof (iii) failing t0 charge and collect rents and other obligations, e.g., the several inter-company obligations referenced above, for the benefit 0f Ma Labs from Defendant eWiz; and (iv) failing t0 collect assembly fees for the benefit 0f Ma Labs from eWiz. (SAC, 189.) In the cross-complaint by Ma Labs against Rao, Ma Labs alleges, in relevant part, while acting as Ma Labs CEO and being in exclusive control 0f the books and records 0f Ma Labs and its affiliate companies, Cross- Defendant Rao took active and systematic steps t0 target companies that were 100% owned by Abraham Ma and siphon significant sums 0f money out 0f them; even though she had n0 right t0 such funds. Through this process, Cross-Defendant Rao was able to bleed substantial funds out of Ma Labs and/or its affiliates, which were diverted t0 accounts and/or corporate entities owned 0r controlled by her. (Cross-Complaint, 14.) Thus, the first cause 0f action 0f the SAC and the cross-complaint by Ma Labs is premised upon various acts which Ma Labs contends is a breach 0f Rao s fiduciary duty/ duty 0f loyalty. T0 obtain summary adjudication, Rao would have to demonstrate that she is not liable for any of the alleged acts which constitute a breach. In moving for summary adjudication, Rao begins by arguing that she did not breach any fiduciary duty t0 the extent such claim is based upon directing distributions 0f cash from Ma Labs t0 a Wells Fargo account (the 7929 Account ). The elements 0f a cause of action for breach 0f fiduciary duty are: (1) existence of fiduciary duty; (2) the breach 0f that duty; and (3) damage proximately caused by that breach. (Mosier v. Southern California Physicians Insurance Exchange (1998) 63 Cal.App.4th 1022, 1044; see also Shopoff & Cavallo LLP v. Hyon (2008) 167 Cal.App.4th 1489, 1509 To establish a cause of action for breach 0f fiduciary duty, a plaintiff must demonstrate the existence 0f a fiduciary relationship, breach 0f that duty and damages. ) Officers, directors, 0r managerial employees may owe their employer a fiduciary duty. (See, e.g., Bancroft-Whitney C0. v. Glen (1966) 64 Cal.2d 327, 347; Daniel Orifice Fitting Co. v. Whalen (1962) 198 Cal.App.2d 791, 801; Sequoia Vacuum Systems v. Stransky (1964) 229 Cal.App.2d 281, 287; Fowler v. Varian Assocs. (1987) 196 Cal.App3d 34.) An officer who participates in management 0f the corporation, exercising some discretionary authority, is a fiduciary of the corporation as a matter 0f law. Conversely, a nominal officer with no management authority is not a fiduciary. Whether a particular officer participates in management is a question 0f fact. (GAB Bus. Servs. v. Lindsey & Newsom Claim Servs. (2000) 83 Cal.App.4th 409, 420 421, overruled 0n another point in Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1154.) The elements 0f a cause of action for breach 0f a duty 0f loyalty, by analogy t0 a claim for breach 0f fiduciary duty, are as follows: (1) the existence 0f a relationship giving rise t0 a duty 0f loyalty; (2) one 0r more Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 17 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER breaches 0f that duty; and (3) damage proximately caused by that breach. (Huong Que, Inc. v. Luu (2007) 150 Cal.App.4th 400, 410.) It is not clear to the court what element of the claims for breach 0f fiduciary duty/ breach 0f loyalty Rao is attacking in moving for summary adjudication. Rao begins by acknowledging that the claims are based, in part, upon an assertion that Rao breached her duty by directing distributions 0f cash from Ma Labs t0 the 7929 Account which Rao contends (but Ma denies) isjointly owned by her and Ma. Rao contends it is of n0 importance whether Ma knew 0fthe 7929 Account arguing, So what? and It isn t even relevant. However, Rao then questions the plausibility 0f Ma s denial 0f any knowledge 0f the 7929 Account t0 suggest that Ma knew of and consented t0 Rao s distribution 0f cash from Ma Labs into the 7929 Account so that family expenses could be paid. lfthe court understands Rao correctly t0 argue that she did not breach because Ma Labs consented t0 these distributions, the issue 0f consent/ assent/ ratification has already been discussed above where the court has found a triable issue of material fact. Since there is at least a triable issue with regard t0 one 0f the alleged breaches of fiduciary duty/ loyalty, the court need not consider Rao s discussion 0f the other alleged breaches as they would not completely dispose 0f the cause 0f action. Rao makes the additional argument that these claims for breach 0f fiduciary duty and breach 0f duty 0f loyalty are barred by the statute of limitations, but as discussed in section |||(A), above, triable issues 0f material fact preclude summary adjudication. Accordingly, defendant Rao s motion for summary adjudication 0f plaintiff Ma Labs first, twenty-sixth, thirty- second, and thirty-fifth causes 0f action 0f the SAC for breach 0f fiduciary duty and plaintiff Ma Labs first cause of action of the cross-complaint [breach 0f duty 0f loyalty/ faithless servant] is DENIED. VIII. Defendant Rao s motion for summary adjudication 0f the 37th cause of action [unfair competition] is DENIED. Business and Professions Code section 17200 et seq. prohibits unfair competition, including unlawful, unfair, and fraudulent business acts. The UCL covers a wide range 0f conduct. It embraces anything that can properly be called a business practice and that at the same time is forbidden by law. (Korea Supply C0. v. Lockheed Martin Corp. (2003) 29 Ca|.4th 1134, 1143 (K0rea).) The UCL covers a wide range 0f conduct. It embraces anything that can properly be called a business practice and that at the same time is forbidden by law. (Korea, supra, 29 Ca|.4th at p. 1143.) Section 17200 borrows violations from other laws by making them independently actionable as unfair competitive practices. In addition, under section 17200, a practice may be deemed unfair even if not specifically proscribed by some other law. (|d.) By proscribing unlawful business practices, the UCL borrows violations 0f other laws and treats them as independently actionable. In addition, practices may be deemed unfair 0r deceptive even if not proscribed by some other law. Thus, there are three varieties 0f unfair competition: practices which are unlawful, 0r unfair, 0r fraudulent. (Blakemore v. Superior Court (2005) 129 Cal.App.4th 36, 48.) Thus, in order for defendant Rao t0 overcome plaintiff Ma Labs claim for unfair competition, Rao would have t0 demonstrate that it has not engaged in either unlawful, unfair, 0r fraudulent conduct. Rao argues, initially Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 13 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER that the claim for unfair competition is based, in part, 0n breach 0f contract (SAC, 429) and that a breach 0f contract cannot serve as the basis for unfair competition. The court need not address the validity of this argument as the claim 0f unfair competition is based not only 0n the breach 0f contract, but all other aforementioned conduct. As noted above, partial summary adjudication is not an available remedy. Rao argues further that the only remedies for a violation 0f the UCL are injunctive relief and restitution. Rao contends plaintiff Ma Labs is not entitled to either and, therefore, cannot maintain a cause 0f action for unfair competition. By Rao s own acknowledgment, restitution means the return 0f money t0 those persons from whom it was taken 0r who had an ownership interest in it. (Madrid v. Perot Systems Corp. (2005) 130 Cal.App.4th 440, 455.) Implicit in Rao s argument is that plaintiff Ma Labs is not entitled t0 restitution because Ma Labs cannot maintain its other causes 0f action, including the cause 0f action for conversion. In light 0f the court s ruling above, there are triable issues 0f material fact with regard t0 whether defendant Rao is liable for conversion and, thus, whether Ma Labs is entitled to restitution. Defendant Rao contends it did not engage in unlawful, unfair, or fraudulent conduct because it is not liable for any 0f the other claims asserted by Ma Labs including breach 0f fiduciary duty. In light 0f the court s rulings above, defendant Rao has not disposed 0f all 0f plaintiff Ma Labs other claims. Finally, Rao contends this thirty-seventh cause 0f action against it is barred by the four year statute 0f limitations incorporating her statute of limitations arguments made separately above to the various causes of action asserted against her. However, for the reasons discussed above, triable issues 0f material fact exist with regard t0 application 0f the various statutes 0f limitation. Accordingly, defendant Rao s motion for summary adjudication 0f plaintiff Ma Labs thirty-seventh cause 0f action for unfair competition is DENIED. IX. Defendant Rao s motion for summary adjudication of the 6th, 27th, 33rd, and 36th causes of action [accounting] is GRANTED. The sixth, twenty-seventh, thirty-third, and thirty-sixth causes 0f action are for accounting and are asserted by Ma Labs, Great World, STE, and ITE, respectively. The action for an accounting is equitable in nature. It may be brought t0 compel the defendant t0 account to the plaintiff for money 0r property, (1) where a fiduciary relationship exists between the parties, 0r (2) where, though n0 fiduciary relationship exists, the accounts are so complicated that an ordinary legal action demanding a fixed sum is impracticable. (5 Witkin, California Procedure (5th ed. 2008) Pleading, 819, p. 236 citing Civic Western Corp. v. Zila Industries (1977) 66 Cal.App3d 1, 14, et al.) T0 state a cause 0f action, only the simplest pleading is required: (a) The fiduciary relationship 0r other circumstances appropriate t0 the remedy; (b) A balance due from the defendant t0 plaintiff that can only be ascertained by an accounting. (Id. at 820, p. 236 and Supp. p. 8 citing Teselle v. McLaughlin (2009) 173 Cal.App.4th 156, 179.) Rao argues initially that the plaintiff companies have n0 standing t0 assert a claim for accounting based 0n Rao s distribution 0f money for her own personal use because the distributions were properly authorized and the plaintiff companies d0 not have any right t0 question how the money, once properly distributed, is thereafter used. Every action must be prosecuted in the name 0f the real party in interest, except as Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 19 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER otherwise provided by statute. (Code Civ. Proc., 367.) The purpose 0f the real party in interest requirement is t0 assure that any judgment rendered will bar the owner of the claim sued upon against relitigating. It is t0 save a defendant, against whom a judgment may be obtained, against further harassment 0r vexation at the hands 0f some other claimant t0 the same demand. (O Flaherty v. Belgum (2004) 115 Cal.App.4th 1044, 1094 (O Flaherty).) When a party lacks standing to sue, the action must be dismissed, unless the complaint can be amended by substituting a party who has standing. (O Flaherty, supra, 115 Cal.App.4th at p. 1095.) Rao s argument, however, does not persuasively demonstrate how plaintiff companies are not the real parties in interest (and therefore lack standing) where money is taken from them. As a separate basis for summary adjudication 0f the accounting causes 0f action, Rao contends an accounting is not proper here because the plaintiff companies have access t0 all 0f their own financial records and can ascertain the amount 0f damages. An accounting is an equitable proceeding which is proper where there is an unliquidated and unascertained amount owing that cannot be determined without an examination 0f the debits and credits 0n the books to determine what is due and owing. Equitable principles govern, and the plaintiff must show the legal remedy is inadequate. Thus, where the books and records are so complicated that an action demanding a fixed sum is impracticable, an accounting is appropriate. If an ascertainable sum is owed, an action for an accounting is not proper. (Prakashpalan v. Engstrom, Lipscomb & Lack (2014) 223 Cal.App.4th 1105, 1136 1137; internal citations omitted.) If an action is for an amount which is unliquidated and unascertained and which cannot be determined without an accounting, it is a suit in equity. [Citations.] lfa complaint sets forth all the facts necessary for the calculation 0f an account between the parties, recovery may be had in an action at law. [Citations.] A suit for an accounting will not lie where it appears from the complaint that none is necessary 0r that there is an adequate remedy at law. [Citations.] An accounting will not be accorded with respect t0 a sum that a plaintiff seeks t0 recover and alleges in his complaint t0 be a sum certain. [Citation] (St. James Church v. Superior Court (1955) 135 Cal.App.2d 352, 359 [287 P.2d 387]; see also Kinley v. Thelen (1910) 158 Cal. 175, 182-183 [110 P. 513].) (Ely v. Gray (1990) 224 Cal.App.3d 1257, 1261 1262.) Rao proffers evidence that each 0f the plaintiff companies and each of defendant companies used [accounting firm] Burr Pilger Mayer( BPM ) t0 d0 their taxes. Ma Labs audited financials were performed by BPM since 2006 and were provided t0 Ma. The audited financials disclosed the distributions paid in a given year. The plaintiffand defendant companies issued Form K-ls each year to the shareholders. In opposition, plaintiffs contend Rao acted covertly, and was able to abscond with unknown sums of money from the Plaintiffs. According t0 plaintiffs, the sums paid by Plaintiffs t0 Rao are not sufficiently laid out in Plaintiffs own accounts. Only Rao is in possession 0f the complete records necessary t0 accurately determine the sum 0f funds [she] improperly received, and what became of them. Yet, plaintiffs themselves proffer evidence detailing specific amounts which Rao purportedly transferred. For instance, plaintiffs proffer Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 20 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER evidence that, Between 2007 and 2013, $244,411.41.00 [sic] was transferred from Ma Labs bank account t0 the 7929 Account. On March 20, 2008, $210,203.02 was transferred from Great World s Bank account to a Wells Fargo Account with an account number ending in 8401. On March 6, 2009, $17,300 was transferred from ITE s bank account t0 the 7929 Account. On September 25, 2009, $240,000 was transferred from STE s bank account to the 7929 Account. Thus, plaintiffs own evidence and allegations undercut their assertion that the amounts are unknown and cannot be ascertained and that an accounting is necessary because a fixed sum is impracticable 0r unascertainable. Plaintiffs own evidence indicates they can ascertain the amounts at issue. Accordingly, defendant Rao s alternative motion for summary adjudication of plaintiff Ma Labs, Great World, STE, and ITE s sixth, twenty-seventh, thirty-third, and thirty-sixth causes 0f action, respectively, for accounting is GRANTED. X. Defendant Rao s motion for summary adjudication 0f the 4th cause 0f action [trespassing] is GRANTED. The fourth cause 0f action 0f the SAC for trespass is asserted by Ma Labs against Rao and alleges, in relevant part, In or around December 2014, Defendant Rao wrongfully and unlawfully entered the Ma Labs Office Space and removed files (both hard copy, soft copy, and electronicaIIy-stored information including e-mails. (SAC, 211.) Trespass is an unlawful interference with possession 0f property. (Staples v. Hoefke (1987) 189 Cal.App.3d 1397, 1406, 235 CaI.Rptr. 165.) The elements of trespass are: (1) the plaintiff's ownership 0r control 0f the property; (2) the defendant's intentional, reckless, 0r negligent entry onto the property; (3) lack 0f permission for the entry 0r acts in excess 0f permission; (4) harm; and (5) the defendant's conduct was a substantial factor in causing the harm. (See CACI N0. 2000.) (Ralphs Grocery C0. v. Victory Consultants, Inc. (2017) 17 Cal.App.5th 245, 261 262.) In moving for summary adjudication of this fourth cause of action for trespass, Rao contends the cause of action fails because plaintiffs cannot establish any damages. Rao proffers evidence that during discovery, Ma Labs did not identify any damages for its trespass claim against Rao. In opposition, Ma Labs contends it is inaccurate for Rao t0 assert that Ma Labs did not identify any damages. Ma Labs points t0 the actual underlying evidence, Ma Labs response to a form interrogatory which asked Ma Labs t0 state the amount 0f damage you are claiming for each item 0f property and how the amount was calculated. In response, Ma Labs stated, Responding Party has not, as 0f the date 0f this response [October 31, 2081] calculated an amount of damage. Even so, Rao has shown the discovery response t0 be devoid 0f any facts t0 support the element 0f damages. This is enough t0 shift the burden t0 Ma Labs t0 produce evidence 0f damages. It is true that an action for trespass will support an award 0f nominal damages where actual damages are not shown. [Citation] However, nominal damages need not be awarded where n0 actual loss has occurred. [Citation] (Staples v. Hoefke (1987) 189 Cal.App.3d 1397, 1406.) Ma Labs, in opposition, proffer evidence t0 Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 21 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER support the act 0f trespass itself and proffers evidence that Rao took corporate property, including documents and emails, but the removal 0f personal property (for which Ma Labs alleges conversion) is distinct from the trespass t0 real property and any damage which flows therefrom. Plaintiff Ma Labs has not proffered any admissible evidence t0 show any actual loss suffered t0 support a claim for actual 0r even nominal damages. Accordingly, defendant Rao s motion for summary adjudication of plaintiff Ma Labs fourth cause of action for trespass is GRANTED. XI. Defendant Rao s motion for summary adjudication 0f the 30th cause 0f action [declaratory relief] is DENIED. In the thirtieth cause 0f action for declaratory relief, the SAC alleges, in relevant part, This cause 0f action for declaratory relief is brought by Abraham Ma as managing member 0f Great World, seeking a judicial determination 0f the rights and obligations 0f Defendant Rao as a putative LLC member 0f Plaintiff Great World. (SAC, 354.) As set forth above, Defendant Rao claims a legal and equitable interest in Plaintiff Great World and the Capitol Property notwithstanding her aforesaid wrongful conduct including her failure and refusal t0 make the promised cash investment called for by the Great World Operating Agreement, and which was promised by Defendant Rao t0 Plaintiffs Abraham Ma and Ma Labs as a material inducement t0 enter into the transactions by which Great World was formed with defendant Rao as a member with a 50% interest and by which Ma Labs agreed t0 sell the Capitol Property t0 Great World. (SAC, 355.) Plaintiff Abraham Ma seeks a judicial determination, whether under the Operating Agreement, the Corporations Code, as a matter of law and equity, that, by virtue of the conduct of Defendant Rao alleged hereinabove, she be declared by Order 0f the Court t0 have n0 legal 0r equitable rights in Great World and, more particularly, n0 right, title 0r interest, legal 0r equitable, in Great World 0r any 0f its assets, including, more particularly, in the real property currently held in the name of Great World, 0r the distribution 0f any income and profits thereon. (SAC, 356.) Rao moves for summary adjudication 0f this declaratory relief cause 0f action 0n the basis that the relief being sought it is already embodied by the relief sought in the rescission causes 0f action. The issues invoked in that cause 0f action already were fully engaged by other causes 0f action. Because they were, declaratory relief was unnecessary and superfluous. [Citations.] The declaratory relief statute should not be used for the purpose ofanticipating and determining an issue which can be determined in the main action. The object 0f the statute is t0 afford a new form 0f relief where needed and not t0 furnish a litigant with a second cause 0f action for the determination of identical issues. [Citations.] (Hood v. Superior Court (1995) 33 Cal.App.4th 319, 324.) In opposition, the court understands Ma s argument t0 be that declaratory relief is proper because the allegations implicate a controversy that may continue if rescission is not granted. Specifically, if the claims for rescission fail, Rao s legal rights and obligations as a putative member 0f Great World will still need t0 be determined. As alleged in the SAC, an actual and justiciable controversy now exists with respect to the distribution 0f any income and profits thereon. (SAC, 357.) Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 22 of 23 SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MINUTE ORDER In Filarsky v. Superior Court (2002) 28 Cal.4th 419, 433, the court wrote, [t]he mere circumstance that another remedy is available is an insufficient ground for refusing declaratory relief, and doubts regarding the propriety 0f an action for declaratory relief pursuant t0 Code 0f Civil Procedure Section 1060 generally are resolved in favor 0f granting relief. Code 0f Civil Procedure section 1062 makes it clear that declaratory relief is cumulative t0 other remedies. Should Ma prevail 0n his claims for rescission, the court is inclined t0 agree that this declaratory relief is superfluous and/or moot, but should Ma s claims for rescission fail, declaratory relief may still be necessary t0 address Rao s right t0 the distribution 0f income from Great World. Erring 0n the side 0f caution, defendant Rao s motion for summary adjudication 0f plaintiffs Ma/ Great World s thirtieth cause 0f action for declaratory relief is DENIED. Printed: 7/26/2019 07/26/2019 Motion: SummaryJudgment/Adjudication 7 16CV293438 Page 23 of 23