Opposition Objections

Cal. Super. - 6th Dist.May 14, 2019

KENNETH J. FREED, ESQ. [State Bar No. 125349] DAVID E. WEEKS, ESQ. [State Bar No. 190542] LAW OFFICES OF KENNETI-I J. FREED 14226 Ventura Boulevard Sherman Oaks, California 91423 Tel: (818)990-0888 * Fax: (818) 990-1047 KFREEDQKJFESO.COM DWEEKSRKJFESO.COM Attorney for Plaintiff, Creditors Adjustment Bureau, Inc. Our File No. 6038114 10 SUPERIOR COURT OF CALIFORNIA, COUNTY OF SANTA CLARA SAN JOSE COURTHOUSE) UNLIMITED CIVIL 13 17 11 CREDITORS ADJUSTMENT BUREAU, INC.,) ) Plaintiff, ) ) V. ) ) 14 OAKWOOD SYSTEMS GROUP, INCd and) DOES I tltrough 10, inclusive, ) 15 ) Defendants. ) 16 ) CASE NO.: 19-CV-348342 PLAINTIFF ' OB JECTION AND SURRREPLY TO DEFENDANT'S COMBINED REPLY TO OPPOSITION TO MOTION TO QUASH AND DISMISS FOR INCONVENIENT FORUM [To be heard contemporaneously with Defendant's Motion to Stay Discovery] 18 DATE: TIME: DEPT: January 14, 2020 9:00 a.m. DTS-9 20 21 Plaintiff, Creditors Adjustment Bureau, Inc. ("CAB") hereby submits this objection and 22 surreply to Defendant Oakwood Systems Group, Inc.'s ("Oakwood") combined reply to plaintiff's 23 opposition to Oakwood's Motion to Quash and Motion to Dismiss for Inconvenient Forum. 25 26 27 28 Plaintiff's Objection and Surreply to Defendant's Motions to Quash and Dismiss Electronically Filed by Superior Court of CA, County of Santa Clara, on 12/31/2019 9:12 AM Reviewed By: R. Nguyen Case #19CV348342 Envelope: 3825740 19CV348342 Santa Clara - Civil R. Nguyen 1 MEMORANDUM OF POINTS AND AUTHORITIKS 2 Plaintiff CAB objects to defendant Oakwood's combined reply brief on the grounds that 3 defendant has raised new arguments and matters in its reply brief that were not raised in its moving papers. According to Oakwood's Notice of Ruling dated and served on December 11, 5 2019, the court continued the hearing on defendant's motion to quash and motion to dismiss for 6 inconvenient forum on December 5, 2019, because Oakwood failed to reserve argument and give 7 notice to plaintiff of its intent to argue, and because the court did not receive Oakwood's reply 8 papers. Assuming that Oakwood's notice of ruling is accurate, if the court is going to consider 9 Oakwood's reply papers for the upcoming hearing on January 14, 2020, it should disregard new 10 arguments and matters that Oakwood failed to raise in its moving papers, as addressed below. 11 I. LEGAL STANDARD 12 California court's have long-held that new arguments or matters not included in a party' 13 moving papers are to be disregarded. See San Dieao Watercrafts. Inc. v. Wells Farao Bank. N.A. 14 (2002) 102 Cal.App.4th 308, 316. Due process requires that a party be fully advised of the issues 15 to be addressed and be given adequate notice of what facts it must rebut in order to prevail. San 16 Dieuo Watercrafts, 102 Cal.App.4th at 316. Points raised in a reply brief for the first time will not 17 ordinarily be considered by the court because to do so would deprive the responding party with 18 the opportunity to counter the argument. American Drua Stores. Inc. v. Stroh (1992) 10 19 Cal.App.4th 1146, 1453, see also, Zamani v. Carnes (9th Cir. 2007) 491 F.3d 990, 997 [court need 2 0 not consider arguments raised for the first time in a reply briefj. Unless a party can show good 21 reason why it failed to present new arguments in its moving papers, the rule is that points raised in 22 reply for the first time will not be considered. Neiahbours v. Buzz Oates Enternrises (1990) 217 23 Cal.App.3d 325, 335, fn. 8. 2 4 II. DEFENDANT'S NEW ARGUMENT THAT THE SUBSCRIPTION AGREEMKNT 25 IS A CONTRACT OF ADHESION SHOULD BE DISREGARDED 26 Defendant now argues that the court should grant its motion to quash and motion to 27 dismiss for inconvenient forum because the contract between the parties is allegedly a contract of 2 8 adhesion and is therefore unenforceable. This argument was never raised by defendant in its plaintiff's Objection and Surreply to Defendant's 1 Motions to Quash and Dismiss moving papers and plaintiff should be afforded an opportunity to fully respond in opposition. But assuming the court entertains defendant's newly raised matter, defendant has not met its high 3 burden of proof to show the contract, or any of its terms, is an unenforceable, unconscionable contract of adhesion. Despite defendant's protestations otherwise, a contract of adhesion is nonetheless a valid 12 and existing contract. Graham v. Scissor-Tail. Inc. (1981) 28 Cal.3d 807, 819. Contracts of adhesion are "a familiar part of the modern legal landscape" and are also "an inevitable fact of life for all citizens - businessman and consumer alike." Graham, 28 Cal.3d at 817-818. A finding of adhesion merely begins a further inquiry into whether or not the contract provision is unenforceable because it is unduly oppressive or "shocks the conscience". Id.l see also California Grocers Assn. v. Bank of America (1994) 22 Cal.App.4th 205, 214-215. The use of the defense of unconscionability to strike down a contract or clause typically involves a consumer - not a merchant. See Murrav on Contracts, 5th Ed., Matthew Bender, p. 14 549-550. With respect to contracts between merchants (like respondent and LinkedIn here), it is morc difficult to establish lack of apparent assent, i.e., the element of "unfair surprise." Indeed, it is rare to find a court decision declaring a clause or contract unconscionable as between business entities. Id. Here, it cannot be disputed that respondent is a business entity - not a consumer- hence, its burden of proving unconscionability is extremely high. Under California law, a party claiming that a contract or contractual provision is 25 unconscionable bears the burden of proof. See Malone v. Sunerior Court (2014) 226 Cal.App.4th 1551, 1561. "The prevailing view is that [procedural and substantive unconscionability] must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability." Sanchez v. Valencia Holdinu Co. (2015) 61 Cal.4th 899, 910 (emphasis in original). Procedural unconscionability concerns the manner in which the contract was negotiated and the parties'ircumstances at the time. It focuses on factors of oppression or surprise. See Kinnev v. United Healthcare Services. Inc. (1999) 70 Cal.App.4th 1322, 1329. Substantive unconscionability pertains to the fairness of an agreement's actual terms and whether they are Plaintiffs Objection and Surreply to Defendant's 2 Motions to Quash and Dismiss overly harsh, one-sided, or shock the conscience. The doctrine of unconscionability requires a substantial degree of unfairness beyond "a simple old-fashioned bad bargain." Sanchez, 61 Cal.4th at 911. Instead, the focus is on whether the terms are "overly harsh," "unduly oppressive," or "unfairly one-sided as to shock the conscience." Sanchez, 61 Cal.4th at 910-911; Malone, 226 Cal.App, 4th at 1561-1562, citing Sonic-Calabasas A. Inc. v. Moreno, 57 Cal.4th 1109, 1145. "Where there is no other indication of oppression or surprise, the degree of procedural unconscionability of an adhesion agreement is low, and the agreement will be enforceable unless the degree of substantive unconscionability is high." Malone, 226 Cal.App.4th at 1561, citing Aiamian v. CantorCO2e. L.P. (2012) 203 Cal.App.4th 771, 796. Conversely, when a party fails to prove substantive unconscionability, a court need not determine procedural unconscionability or whether it is a contract of adhesion. See Mission Vieio Emeruencv Med. Assocs v. Beta Healthcare Groun (2011) 197 Cal.App.4th 1146, 1159. Defendant has provided no actual evidence of procedural or substantive unconscionability. The only tangible arguments advanced by defendant is that the contracts require defendant to read several documents, and that there is a conflict in the forum selection clause. EIowcver, neither of these arguments hold water. As the court is aware, many companies are now Internet based and conduct a significant amount of business electronically. Linkedln is no exception. Indeed, one of defendant's arguments is that it had no contacts with anyone in California and therefore this court has no jurisdiction over it. However, defendant contracted with LinkedIn online for the use of its goods and services and was provided documents electronically. Defendant had both the means and opportunity to read the order form, the Linkedln Subscription Agreement ("LSA") and the User Agreement ("UA"), all of which are incorporated by the reference in the order form signed by defendant and which constitute the contract between the parties. There is no evidence or declaration from the defendant that Linkedln denied it the opportunity to read the contract, denied it an opportunity to change or negotiate any term of the contract such as amount, length of contract, or the goods and services it ordered, or that any term of the contract is so unduly harsh or one-sided that it would shock the conscious of the court. Plaintiff's Objection and Surreply to Defendant's 3 Motions to Quash and Dismiss Similarly, there is no evidence that the venue provision is ambiguous or conflicting. 10 Under both the LSA and UA, defendant knew that any dispute between the parties would be decided under California law in the State ofCalifornia. The LSA states that any action is to be brought in a federal court in the Northern District of the State of California, and the UA clarifies that any action can only be litigated in a state or federal court of Santa Clara County, which is in the Northern District of the State of California. There is not conflict in the contract which clearly requires litigation in California, whether it be in a state or federal court, There is nothing in the language of the contract that could have caused Oakwood any confusion that it could somehow litigate the action in its home state of Missouri. Defendant's contract of adhesion argument should be disregarded because it constitutes a new issue that was not raised in defendant's moving papers. Notwithstanding, defendant cannot meet its high burden of proof to show the contract is unconscionable and unenforceable. 13 III DEFENDANT'S NEW ARGUMENT THAT THE CONTRACT IS NOT 14 ASSIGNABI,E SHOULD BE DISREGARDED AND IS WRONG 15 18 Defendant next argues that the I.SA has a non-assignment clause which defeats this court's jurisdiction. Again, this is a new argument which was not raised in defendant's moving papers and should be disregarded. Nonetheless, defendant is simply wrong on the law. Under California law, even when there is a stipulation against assignment of a contract, money damages for breach of contract, and money due or to become due under a contract, may be assigned. "It is established that a provision in a contract or a rule of law against assignment does not preclude the assignment of money due or to become due under a contract [citations omitted] or for money damages for the breach of connact." Trubowitch v. Riverbanlc Carmine Co. (1947) 30 Cal.2d. 335, 339-340, 344, citing Butler v. San Francisco Gas Co. (1914) 168 Cal. 32, 41 ["The mere assignment of moneys due or to become due, although the contract may not be assigned, is held not be an assignment of the contract."); see also, National Union Fire Ins, Co of Pittsburah v. Cambridue Inteurated Services Groun. Inc. (2009) 171 Cal.App.4th 35, 54-55. Hence, an assignment solely for the purposes of collecting moneys due, has routinely been upheld as valid under California law. Plaintiff s Objection and Surreply to Defendant's 4 Motions to Quash and Dismiss Defendant has again failed to apply the applicable law to the facts of this case. CAB was assigned this matter for collecting moneys due as a result of defendant's breach of contract. CAB does not seek to perform, nor has it assumed the obligation of performing, any term of the 4 contract. Linkedln has merely assigned the matter to CAB for the collection of unpaid moneys due on its behalf, which under well-established California law, is permissible. Hence, the assigiunent to CAB is proper and the court should disregard defendant's argument on this newly raised issue. IV. CONCLUSION It is clear from defendant's reply brief that it is desperately grasping at straws because it cannot dispute that the contract between the parties contains an express venue provision in which the parties agreed to apply California law in a court in the State of California. The court should disregard defendant's newly raised arguments as procedurally improper. To permit defendant's arguments would significantly deprive plaintiff of its due process rights. Accordingly, the court should adopt its tentative ruling and deny defendant's iss. 16 DATBD: December 30, 2019 LAW OFF 17 18 D4id O'. Weeks Attorneys for Plaintiff, Creditors Adjustment Bureau, Inc. 20 21 22 23 25 26 27 28 Plaintiff s Objection and Surreply to Defendant's 5 Motions to Quash and Dismiss 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 PROOF OF SERVICE CCP g 1013(a); CCP g 1005 I, RACEL BARLONGO, hereby state and declare as follows: l. I am employed in the county ofLos Angeles, State of California. I am over the age of 18-years, and not a party to the within action. My business address is 14226 Ventura Boulevard, Sherman Oaks, California 91423. 2. On December 31, 2019, I served the document(s) described as: PLAINTIFF'S OBJECTION AND SURREPLY TO DEFENDANT'S COMBINED REPLY TO OPPOSITION TO DEFENDANT'S MOTION TO TO QUASH AND DISMISS FOR INCONVENIENT FORUM on the interested parties to this action by placing the true copy(ies) thereofenclosed in sealed envelopes addressed as follows: JONATHAN P. CHODOS, ESQ. LAW OFFICES OF JONATHAN P. CHODOS 2934 I/2 NO. BEVERLY GLEN CIRCLE, NO. 505 LOS ANGELES, CA 90077 [ ] (By Mail): I am "readily familiar" with the firm's practice of collection and processing correspondence for mailing. It is deposited with the U.S. postal service with postage fully prepaid on that same day in the ordinary course of business. I am aware that on motion of party served, service is presumed invalid ifpostal cancellation date or postage meter date is more than 1-day after date of deposit for mailing affidavit. [ ] (Via e-mail): [X] (By Overnight Delivery): I am "readily familiar" with the firm's practice of collection and processing correspondence for overnight delivery by an express service carrier. It is deposited with a facility regularly maintained by an express service carrier on that same day in the ordinary course of business, in an envelope or package designated by the express service carrier with delivery fees paid. [X] (State): I declare under penalty ofperjury under the laws of the State of California that the foregoing is true and correct. [ ] (Federal): I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Executed on December 31, 2019, at Sherman Oaks, California. .."c . --,i RACEL BARLONGO 27 28