Opposition_opposition_to_plaintiffs_ex_parte_applicationOppositionCal. Super. - 2nd Dist.February 19, 2019Electronically FILED by § B R O W N W H I T E & O S B O R N ™ — ~ N E Y S A T T O R © 00 3 a Wn B W ND = N N N N N N N ND ND = E e e e e m e m Co O NN O N nm kA W I N D = D VO N N N N A W = O perior Court of California, County of Los Angeles on 02/21/2019 06:45 PM Sherri R. Carter, Executive Officer/Clerk of Court, by S. Bolden,Deputy Clerk BROWN WHITE & OSBORN LLP KENNETH P. WHITE (Bar No. 173993) 333 South Hope Street, 40" Floor Los Angeles, California 90071-1406 Telephone: 213.613.0500 Facsimile: 213.613.0550 kwhite@brownwhitelaw.com Attorneys for Defendant DR. ROBERT C. BLAINE, BLAINE LABORATORIES, INC.; and BLAINE HOLDING & DEVELOPMENT, LLC SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF LOS ANGELES, CENTRAL DISTRICT VIVERA PHARMACEUTICALS, INC., a Case No.: 19stcv05281 Del ti SEER REE Judge: Hon. Elizabeth Feffer Plaintiff, OPPOSITION TO PLAINTIFF'S EX Vv. PARTE APPLICATION DR. ROBERT C. BLAINE, an individual; [Filed Concurrently With Declarations of BLAIE LABORATORIES, INC, a Kenneth P. White, Roby Yadegar, Dr. Robert California corporation; BLAINE HOLDING | Blaine, Fred Battah, and Pedro Kuang] & DEVELOPMENT, LLC, a California ’ ’ Action Filed: F 19, 201 limited liability company; and DOES 1 ction Filed ebruary 19, 2019 through 20, inclusive, Defendants. 1 OPPOSITION TO PLAINTIFF'S EX PARTE APPLICATION B R O W N W H I T E & O S B O R N ™ — ~ N E Y S A T T O R © 00 3 a Wn B W ND = N N N N N N N ND ND = E e e e e m e m Co O NN O N nm kA W I N D = D VO N N N N A W = O MEMORANDUM OF POINTS AND AUTHORITIES A. INTRODUCTION Plaintiff Vivera Pharmaceuticals, Inc. (“Vivera”) has filed an ex parte application that dramatically misstates the facts, conceals relevant evidence, and misrepresents the nature of transactions. The true facts are these: Vivera’s Chairman is Paul Edalat (“Mr. Edalat™), to be frank, a con man. Dr. Robert Blaine (“Dr. Blaine”) is a physician and developer and manufacturer of pharmaceuticals. Mr. Edalat successfully fraudulently induced Dr. Robert Blaine into a complicated series of transactions designed to result in Vivera acquiring Blaine Labs. The prolonged negotiations included a lease, a Share Exchange Agreement, and an amendment to that agreement that purported to transfer control of Blaine Laboratories, Inc. (“Blaine Labs”) to Vivera while the parties continued to negotiate the final price of the deal for Vivera to acquire Blaine Labs. Dr. Blaine imprudently signed all of those documents without legal advice. Mr. Edalat concealed some very important facts from Dr. Blaine during those negotiations. He had to. No reasonable pharmaceutical company would have entered a business transaction with him if they knew the truth: e In 2014 the FDA sued Mr. Edalat for violation of federal law, and he entered into a consent decree and permanent injunction prohibiting him from manufacturing or distributing nutritional supplements without exhaustive supervision; e In 2017 Mr. Edalat sustained an over $700,000 judgment for defamation and fraud, including punitive damages; e Mr. Edalat filed bankruptcy petitions three different times; e Even as Mr. Edalat was negotiating with Dr. Blaine, he was asserting his Fifth Amendment rights and refusing to answer questions at the debtor exam regarding his fraud and defamation judgment on the grounds that he believed he had previously been, and was again, under federal criminal investigation for bankruptcy fraud, 2 OPPOSITION TO PLAINTIFF'S EX PARTE APPLICATION B R O W N W H I T E & O S B O R N ™ — ~ N E Y S A T T O R © 00 3 a Wn B W ND = N N N N N N N ND ND = E e e e e m e m Co O NN O N nm kA W I N D = D VO N N N N A W = O e Mr. Edalat was being sued for fraud by another pharmaceutical company for concealing those same facts before entering into a consulting agreement with them. In January 2019, Dr. Blaine enlisted counsel, Roby Yadegar, to attempt to close the transaction and settle the total amount that Vivera would have to pay. On January 31, 2019, Mr. Yadegar sent Mr. Edalat’s attorney an email with an offer. Mr. Edalat, apparently in a rage, had his lawyer send an email saying “Vivera has decided to terminate the transaction” and cancelling the Share Exchange Agreement “immediately,” firing Dr. Blaine from his employment contract with Vivera, and retreating to one of the three buildings it had leased. In the following days, everyone associated with Vivera confirmed this was a termination. Vivera’s attorney negotiated with two of Dr. Blaine’s lawyers confirming the termination and seeking terms for the parties to separate. Mr. Edalat repeatedly and explicitly confirmed the termination by text. Vivera employees took Blaine Labs products out of the Blaine Labs buildings where they had been stored into the third building that Vivera was occupying. Mr. Edalat told potential customers that the deal was off. At some point, Mr. Edalat had a change of heart. On February 12, 2019, Mr. Edalat’s new attorney — the one bringing this ex parte application — sent a letter to Dr. Blaine’s counsel. That letter revealed Vivera’s strategy to get Blaine Labs back — pretend the cancellation never happened. Thus this lawsuit, and this ex parte application: a charade premised on the patently fraudulent suggestion that the January 31, 2019 email was just an “offer” that was later revoked, and that Vivera should be in control of Blaine Labs. Vivera is literally suing Blaine Labs for doing the things Vivera demanded in its January 31, 2019 email. This is deceptive nonsense, a fraud on the Court, and the Court should not countenance it. The entire transaction was procured by Mr. Edalat’s fraud on an unrepresented party. The January 31, 2019 email was an explicit and unequivocal repudiation and termination of the entire transaction. Vivera and Mr. Edalat confirmed that through their words and actions repeatedly. Moreover, Blaine Labs has repeatedly offered 3 OPPOSITION TO PLAINTIFF'S EX PARTE APPLICATION B R O W N W H I T E & O S B O R N ™ — ~ N E Y S A T T O R © 00 3 a Wn B W ND = N N N N N N N ND ND = E e e e e m e m Co O NN O N nm kA W I N D = D VO N N N N A W = O Vivera to give it the items it is now demanding — an offer that Vivera has studiously avoided because it contradicts their narrative. The Court should deny the Motion. B. RELEVANT FACTS The following facts are necessarily very abbreviated, because Blaine Labs is responding to an ex parte notice in very little time, and because the issues at hand are very narrow. More complete expositions of facts will come in Blaine Labs’ Cross-Complaint for fraud, and in any briefing of the request for preliminary injunction. Vivera and Mr. Edalat Fraudulently Induce The Contracts Dr. Blaine imprudently signed the lease agreement, Share Exchange Agreement, and the amendment thereto without a lawyer. Declaration of Dr. Robert Blaine at 4. Mr. Edalat presented him with the amendment — the document purporting to hand control of Blaine Labs over to Vivera immediately — over dinner, telling Dr. Blaine that it simply “extended” the date of the Share Exchange Agreement. 1d. Crucially, during this entire process, Mr. Edalat concealed and Dr. Blaine did not know that Mr. Edalat had the history of a con man: e In November 2017, Mr. Edalat sustained a judgment of over $700,000 in a fraud and defamation case, including punitive damages premised on him having acted with malice, oppression, or fraud. White Decl. at § 22; Exh. F & G to White Decl. e In July 2018 — even as he negotiated with Dr. Blaine — Mr. Edalat fought efforts to collect on that judgment. He asserted that his debtor exam could not be compelled because he had to assert his Fifth Amendment rights because he went through a “contentious bankruptcy proceeding in which criminal charges were threatened” and had recently received information that the United States Trustee was considering criminal charges against him. White Decl. at § 23; Exhibit H to White Decl. e In addition, in 2014 the FDA sued Mr. Edalat for distributing nutritional supplements in violation of federal law and secured a consent decree and permanent injunction forbidding him from manufacturing or distributing 4 OPPOSITION TO PLAINTIFF'S EX PARTE APPLICATION B R O W N W H I T E & O S B O R N ™ — ~ N E Y S A T T O R © 00 3 a Wn B W ND = N N N N N N N ND ND = E e e e e m e m Co O NN O N nm kA W I N D = D VO N N N N A W = O nutritional supplements without extensive oversight and approval. White Decl. at 924; Exh. I and J. e In 2017 another pharmaceutical company sued Mr. Edalat for fraudulent inducement for entering into a consulting agreement without disclosing that background, including three bankruptcy filings. White Decl. at 9 25; Exh. K to White Decl. Dr. Blaine never knew any of this, and naturally would never have consented to the transaction if he had. Blaine Decl. at q 8. Vivera Repudiates the Share Exchange Agreement Vivera claimed that it had discovered problems in its audit of Blaine Labs, and demanded a discount on the sale price contemplated in the Share Exchange Agreement. Dr. Blaine brought in attorney Roby Yadegar to negotiate the payment and the closing. Blaine Decl. at § 6. On January 31, 2019, Mr. Yadegar sent Vivera’s attorney, Dan Donahue, a proposal of the final sale price. Exhibit A to Yadegar Decl. Later that evening, Donahue sent back the email terminating the entire deal. Donahue’s January 31, 2019 email (“the Termination Email’) unequivocally repudiated and terminated the entire transaction: Hello Roby, Our client, Vivera Pharmaceuticals, Inc., has instructed us to notify you and your client that, as previously mentioned, it will not be negotiating the economics of the acquisition. Vivera had decided to terminate the transaction on the following terms: * Vivera will be cancelling the Blaine Labs Share Exchange Agreement effective immediately; * Vivera will expect the refund of the $2,111,850 immediately; » The common shares of Vivera previously issued to Dr. Blaine will be cancelled immediately; * Dr. Blaine’s employment agreement with Vivera will be cancelled as 5 OPPOSITION TO PLAINTIFF'S EX PARTE APPLICATION B R O W N W H I T E & O S B O R N ™ — ~ N E Y S A T T O R © 00 3 a Wn B W ND = N N N N N N N ND ND = E e e e e m e m Co O NN O N nm kA W I N D = D VO N N N N A W = O of today; * Going forward Vivera will offer a contract manufacturing agreement to Blaine Labs to produce Vivera’s branded medical products for gels, creams and scar pads on an agreed contract manufacturing price; * As Vivera and Blaine Labs have a lease in place, Vivera will relinquish 11037 Lockport and 11110 Greenstone buildings to Blaine Holdings. Vivera will continue to lease 11100 Greenstone Ave. pursuant to eh executed agreement; * Vivera will need a refund of all of the T.I. equivalent to ~$200,000 for the Blaine Labs building (11037 Lockport Pl.) immediately; and + All Vivera employees will be moved off of Blaine Labs payroll. We will follow up to discuss your client’s interest in a contract manufacturing agreement with Vivera. (Exh. A to Yadegar Decl., Emphasis added.) Vivera Repeatedly Confirmed The Termination Email Immediately following the Termination Email, Vivera and its agents began to confirm that they had, in fact, repudiated and terminated the Share Exchange Agreement. Physical Confirmation Through Misappropriating Blaine Labs Products Vivera immediately began to take physical steps consistent with the Termination Email. That email said that going forward Vivera would relinquish two of the buildings it had leased and only occupy the one at 11100 Greenstone Avenue. (“Greenstone”). On February 1, 2019 — the day after the termination email — Vivera employee Luis Navarro, who was working as a warehouse manager at Blaine Labs, instructed employees to move a large volume of Blaine Labs products from where they were stored to Greenstone. Decl. of Pedro Kuang at 4 3. Navarro told a Blaine Labs employee he was moving the products to the “Vivera building” so they would be safe. Id. A few days later, on February 4, 2019, Mr. Navarro approached a Blaine Labs employee in a rush asking him to move even more products to Greenstone, and other Vivera employees grabbed Blaine Labs materials, like raw ingredients, and moved them to Greenstone. /d. at 4. 6 OPPOSITION TO PLAINTIFF'S EX PARTE APPLICATION B R O W N W H I T E & O S B O R N ™ — ~ N E Y S A T T O R © 00 3 a Wn B W ND = N N N N N N N ND ND = E e e e e m e m Co O NN O N nm kA W I N D = D VO N N N N A W = O Confirmation Through Counsel Vivera also instructed its lawyers to negotiate with Blaine Labs’ lawyers in a way that confirmed the Termination Email. On February 4, 2019, Blaine Labs’ attorney Roby Yadegar responded to the Termination email by writing to Mr. Donahue: “Dan — we received your client’s notice of termination of the Agreement last Thursday, and can be available this afternoon to discuss.” Declaration of Roby Yadegar at § 6; Exhibit A to Declaration of Roby Yadegar. Mr. Donahue did not dispute that characterization. During a call between Mr. Yadegar and Vivera counsel Mr. Donahue, Mr. Donahue affirmed that Vivera had terminated the deal and Mr. Yadegar confirmed his understanding of the same, and they discussed whether and on what terms Blaine Labs might enter into a new manufacturing agreement post-termination. Yadegar Decl. at 4 7. Mr. Donahue never said anything suggesting the Termination Email was an offer that must be accepted. 1d. In addition, the undersigned counsel Kenneth White (“Mr. White’) negotiated with Mr. Donahue orally and in writing. That entire communication was premised on the Termination Email being a repudiation, not an offer. Mr. White began by expressing Blaine Labs’ concern that Vivera had removed Blaine Labs products and taken it to the warehouse Vivera was occupying. Declaration of Kenneth White at § 3; Exhibit A to White Decl. In a conversation late that day, February 4, 2019, Mr. Donahue confirmed that the products belonged to Blaine Labs and that Blaine Labs should not be concerned. Id. at§ 4. Mr. Donahue promised to provide an accounting so that Mr. White could evaluate the monetary demands in the Termination Email, and Mr. White agreed. Id. The attorneys also discussed whether the parties could negotiate a new contract under which Blaine Labs would manufacture items for Vivera. Id. Several days later, Mr. White forwarded Mr. Donahue an email from Vivera employee Olive Karpinski suggesting a meeting between Dr. Blaine and Mr. Edalat. White Decl. at q 5; Exh. B to White Decl. Mr. White said that Blaine Labs would agree to a meeting but only with counsel present. /d. Mr. White and Mr. Donahue negotiated a day and place, and Mr. Donahue complained that Blaine Labs had locked Vivera employees out 7 OPPOSITION TO PLAINTIFF'S EX PARTE APPLICATION B R O W N W H I T E & O S B O R N ™ — ~ N E Y S A T T O R © 00 3 a Wn B W ND = N N N N N N N ND ND = E e e e e m e m Co O NN O N nm kA W I N D = D VO N N N N A W = O of one of the buildings used to store parts. Id. at § 6. Mr. Donahue confirmed that Vivera was occupying a different building as stated in the Termination Email, saying “Vivera asks that Blaine Labs have its personnel move the component parts to the building occupied by Vivera.” White Decl. at § 6; Exhibit B to White Decl. Mr. White and Mr. Donahue exchanged emails and a phone call again on February 8, 2019, and again Mr. Donahue said that an accounting would be forthcoming. Later that day, Mr. White sent an email demanding that Vivera release the scar care products that Vivera had misappropriated and moved to the warehouse it was occupying. White Decl. at § 8. Mr. White also pointed out that the parties needed to negotiate a new lease, because the old one did not contemplate Vivera occupying only one building: “there appears to be no operative lease after Vivera repudiated the prior one in your email of January 31, 2019.” Exh. B to White Decl. Mr. Donahue responded, but did not dispute the characterization, or claim that the Share Exchange Agreement was still in effect. /d. On February 10, 2019, Mr. Donahue responded to an email by saying his “client believes it has an interest in the scar pad products in its building and is unwilling to release them in the absence of a global settlement.” Mr. Donahue did not explain what that interest was, did not suggest that the Termination Email was an offer, and did not suggest that the Share Exchange Agreement was still active. Exhibit B to White Decl. The first time anyone suggested that the Termination Email was an “offer,” or that the Share Exchange Agreement was still active, was on February 12, 2019, in a letter from Vivera’s current counsel. White Decl. at 9 15. Confirmation Through Vivera Agents Vivera agents — including Mr. Edalat himself — confirmed that the Termination Email terminated the deal. Mr. Edalat had repeated text exchanges with Dr. Blaine confirming that he had repudiated and terminated the deal. On January 31, 2019 he texted that Mr. Yadegar’s last email with Dr. Blaine’s latest offer was an “insult” and “therefore if true I must regretfully unwind the offer and proposal on behalf of Vivera.” Declaration of Dr. Blaine at 4 8(a); Exhibit B to Blaine Decl. He asked to talk to Dr. Blaine about “how we will 8 OPPOSITION TO PLAINTIFF'S EX PARTE APPLICATION B R O W N W H I T E & O S B O R N ™ — ~ N E Y S A T T O R © 00 3 a Wn B W ND = N N N N N N N ND ND = E e e e e m e m Co O NN O N nm kA W I N D = D VO N N N N A W = O unwind everything,” said “what’s done is done,” and said “we can meet to discuss the unwinding of the deal as this was nothing personal but business. The team made a collective decision. We can discuss the details later.” Id. Later Mr. Edalat’s texts became abusive and threatening as Dr. Blaine began to consult and rely upon attorneys. Mr. Edalat said he would “share the investigations and audits of you and your company to see what we were dealing with” at the meeting, and said that “We need some time to transition the change over and control back to you and the team there.” Dr. Blaine Decl. at § 8(b); Exh. C to Dr. Blaine Decl. Dr. Blaine tried to soothe Mr. Edalat by telling him that Dr. Blaine was merely responding to the Termination Email and Vivera’s attorney’s use of terms like “today” and “immediately.” “Is that not the case?” Dr. Blaine asked. Dr. Blaine Decl. at q 8(c); Exh. C to Blaine Decl. Dr. Blaine explained that the Termination Email offered no transition time and he was trying to figure out how to accept the termination directives. Mr. Edalat did not contradict Dr. Blaine. Mr. Edalat continued to threaten, telling Dr. Blaine that Vivera’s investigator’s findings were “serious” and about Dr. Blaine specifically and that it would “get out of hand quick if it’s not dealt with.” Dr. Blaine Decl. at 9] 8(d), Exhibit D to Dr. Blaine Decl. Mr. Edalat also confirmed that Vivera had terminated the transaction. “Also please refrain from telling people that I was the one making the decision to cancel the acquisition. This was triggered by your attorney and group decision by our lawyers and bankers to back out.” 1d. Dr. Blaine pointed out once again that Mr. Edalat’s lawyer had cancelled the transaction, and Mr. Edalat did not contradict him. /d. Moreover, Vivera employee Olivia Karpinski sent an email on February 5, 2019, suggesting that the parties get together to “discuss a contract manufacturing and distribution agreement moving forward” — exactly as suggested in the Termination Email. Confirmation To Third Parties Vivera also told third party customers that they had terminated the deal with Blaine Labs. Mr. Edalat told a major customer, Fed Battah, that “the deal was off” and that he should do business with Vivera rather than Blaine Labs. Decl. of Fred Battah at 9 8. 9 OPPOSITION TO PLAINTIFF'S EX PARTE APPLICATION B R O W N W H I T E & O S B O R N ™ — ~ N E Y S A T T O R © 00 3 a Wn B W ND = N N N N N N N ND ND = E e e e e m e m Co O NN O N nm kA W I N D = D VO N N N N A W = O Vivera’s approach to Blaine Labs’ customers also shows their deceitfulness. Shortly after pharmaceutical distributor Fred Battah met Dr. Blaine and Mr. Edalat to discuss distributing Blaine Labs products, Mr. Edalat contacted Mr. Battah and asked him to deal only with Mr. Edalat, not Dr. Blaine. Battah Decl. at 4 4, Exhibit A to Battah Decl. On February 5, 2019, Mr. Battah reached out to buy some of Blaine Labs products. Vivera associate Ryan Hilton sent him instructions with a Vivera bank account. Mr. Battah was confused and concerned — he thought he was dealing with Blaine Labs, and pharmaceuticals must have a “pedigree” — a documented chain of custody. He asked Ryan Hilton to explain. When Hilton didn’t, he called Dr. Blaine and learned the truth. Battah Decl. at 5. He ultimately made three orders from Blaine Labs in February 2019, because he wanted to deal with Blaine Labs and Dr. Blaine and not with Paul Edalat and Vivera. Vivera, through Mr. Hilton and Mr. Edalat, abused and threatened Mr. Battah. They repeatedly demanded that he not talk to Dr. Blaine. Mr. Hilton told him that Mr. Edalat would sue Mr. Battah and offered to send a picture of the lawsuit. During one call, Mr. Edalat told Mr. Battah that “the deal was off” between Vivera and Blaine Labs and that Mr. Battah would have to buy from Vivera. Battah Decl. at 9 7-8. C. ARGUMENT Criminal lawyers say “the defense will be whatever it has to be.” One can admire the moxie of attempting to revive the Share Exchange Agreement by retroactively transforming the Termination Email into an “offer,” but the entire record shows that it’s patently false. A party repudiates a contract — or, put another way, commits anticipatory breach — when that party “offers a clear, positive, unequivocal refusal to perform.” Martinez v. Scott Specialty Gases, Inc. (2000) 83 Cal. App. 4th 1236, 1246. Saying — in so many words — “the deal is off” abandons the contract. Unger v. Isaacs (1954) 123 Cal. App. 2d 533, 534 (saying “this deal was off” abandoned contract). Nor can a party “take back” its repudiation once uttered. As one court described it; [D]efendants are the ones who wrongfully repudiated the existence of a partnership or joint venture. Having done so, they can hardly complain that 10 OPPOSITION TO PLAINTIFF'S EX PARTE APPLICATION B R O W N W H I T E & O S B O R N ™ — ~ N E Y S A T T O R © 00 3 a Wn B W ND = N N N N N N N ND ND = E e e e e m e m Co O NN O N nm kA W I N D = D VO N N N N A W = O their repudiation has been accepted by plaintiffs at face value. Defendants cannot complain of the failure to order an accounting of a partnership or joint venture which they say is non-existent where the non-existence is attributable solely to their wrongful conduct. Defendants should not be permitted to say, which by their motion to file a cross-complaint they in effect attempted to say, we repudiate the contract, but then if we do not get away with it, we repudiate our repudiation and demand an accounting. (Gherman v. Colburn (1977) 72 Cal. App. 3d 544, 565.) Here, Vivera’s repudiation and termination of the Share Exchange Agreement, its amendment, and the lease was unequivocal. Vivera said it “has decided to terminate” on specific terms. Exh. A to Yadegar Decl. Vivera said “it would be cancelling the Blaine Labs Share Exchange Agreement effective immediately,” that the shares issued to Dr. Blaine “will be cancelled immediately,” and that Dr. Blaine’s employment was cancelled “as of today.” All of that spoke of immediate action, and Vivera did not call it an offer, solicit a response, or offer a deadline. Vivera argues that this was only an offer because the Termination Email also demanded money. But that’s how it was articulated — as a demand. Vivera said it “would expect” money and “will need a refund.” It did not offer deadlines. Moreover, the evidence showed that Vivera immediately offered to provide an accounting to back up the demand. White Decl. at 44. Nothing in the Termination Email suggested that it was an offer, that it was contingent, or that Dr. Blaine could refuse it. Moreover, the evidence above is overwhelming that Vivera and its agents repeatedly referred to and treated the transaction as dead — with only negotiation of a new manufacturing agreement to follow. Vivera’s lawyer confirmed that to two different lawyers for Dr. Blaine. Yadegar Decl. at q 7; White Decl. at 4. Dr. Blaine’s lawyers repeatedly characterized the deal as having been terminated, and Vivera’s counsel never disputed it. Mr. Edalat himself repeatedly stated in writing that the deal was cancelled, blaming it on his bankers and lawyers: “Also please refrain from telling people that I was the one making the 11 OPPOSITION TO PLAINTIFF'S EX PARTE APPLICATION B R O W N W H I T E & O S B O R N ™ — ~ N E Y S A T T O R © 00 3 a Wn B W ND = N N N N N N N ND ND = E e e e e m e m Co O NN O N nm kA W I N D = D VO N N N N A W = O decision to cancel the acquisition. This was triggered by your attorney and group decision by our lawyers and bankers to back out.” Dr. Blaine Deposition at § 8(d); Exh. D to Dr. Blaine Decl. Mr. Edalat even told a customer “the deal was off.” Battah Decl. at 9] 7-8. Moreover, Vivera immediately acted physically to confirm the Termination Email — they swiped Blaine Labs’ products and moved them to the warehouse they were occupying. If they didn’t think that the deal was off and that they were going to be using only that warehouse, why would they do that? The credibility of Vivera and Mr. Edlat is captured by how small a role all of these patently dispositive facts play in the ex parte application. Vivera utterly failed to inform the Court of all the communications and acts above. Desperately, Vivera suggests that the Termination Email can’t be a repudiation because it is inadmissible as a settlement communication under Cal. Evid. Code § 1152. Nonsense. Section 1152(a) prohibits a party from using evidence of an offer of settlement to show liability or damages. Cal. Evid. Code, § 1152(a). That’s not what’s happening here. Dr. Blaine is citing the Termination Email as a repudiation of the contracts. Finally, Vivera’s bad faith and game-playing are illustrated by how they have responded to Dr. Blaine’s offers to mitigate their claimed damages. Dr. Blaine, through his counsel, repeatedly offered to return any equipment that was Vivera’s (as opposed to Blaine Labs’) and to discuss any other items that Vivera thought it was entitled to. White Decl. at 99 17-19; Exh. C, D to White Decl. Vivera ignored these offers until the very communication in which it announced this ex parte application. White Decl. at § 20. Dr. Blaine has several items he agrees belong to Vivera, stands ready to return them, stands ready to evaluate any other specific claims for specific items, and his counsel is ready and willing to do the same. Dr. Blaine Decl. at q 13. But Vivera doesn’t want cooperation and doesn’t want its items returned. It wants to take back its repudiation of the agreements. It can’t. The Court should deny the application. 12 OPPOSITION TO PLAINTIFF'S EX PARTE APPLICATION B R O W N W H I T E & O S B O R N ™ — ~ N E Y S A T T O R © 00 3 a Wn B W ND = N N N N N N N ND ND = E e e e e m e m Co O NN O N nm kA W I N D = D VO N N N N A W = O D. CONCLUSION Based on the foregoing, the Court should deny the application. DATED: February 21, 2019 Respectfully submitted, BROWN WHITE & OSBORN LLP KENNETH P. WHITE Attorneys for Defendants DR. ROBERT C. BLAINE, BLAINE LABORATORIES, INC; and BLAINE HOLDING. & DEVELOPMENT, 13 OPPOSITION TO PLAINTIFF'S EX PARTE APPLICATION B R O W N W H I T E & O S B O R N ™ — ~ N E Y S A T T O R © 00 9 O N Dn B= W N = N N N N N N N ND ND = E e e m e a e m c o NI O N LL BA W N = O O N Y D N W D = O PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES I'am employed in the County of Los Angeles, State of California. Iam over the age of eighteen years and not a party to the within action. My business address is 333 South Hope Street, 40™ Floor, Los Angeles, California 90071. On February 21, 2019, I served the following document(s) described as OPPOSITION TO PLAINTIFF'S EX PARTE APPLICATION in this action by placing true copies thereof enclosed in sealed envelopes and/or packages addressed as follows: Fax: 213.896.0400 Aaron Levine obitan@buchalter.com BUCHALTER, APC Counsel for Plaintiff 1000 Wilshire Blvd., Ste. 1500 Vivera Pharmaceuticals, Inc. Los Angeles, CA 90017-1730 BY MAIL: I deposited such envelope in the mail at 333 South Hope Street, 40th Floor, Los Angeles, California 90071. The envelope was mailed with postage thereon Tully prepaid. 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 on that same day in the ordinary course of business. I am aware that on motion of the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one (1) day after date of deposit for mailing in affidavit. BY OVERNIGHT DELIVERY: I served such envelope or package to be delivered on the same day to an authorized courier or driver authorized by the overnight service carrier to receive documents, in an envelope or package designated by the overnight service carrier. BY FACSIMILE: [served said document(s) to be transmitted by facsimile pursuant to Rule 2008 of the California Rules of Court. The telephone number of the sending facsimile machine was 213/613-0550. The name(s) and facsimile machine telephone number(s) of the person(s) served are set forth in the service list. BY HAND DELIVERY: I caused such envelope(s) to be delivered by hand to the above addressee(s). BY ELECTRONIC MAIL: On the above-mentioned date, from Los Angeles, California, I caused each such document to be transmitted electronically to the party(ies) at the e-mail address(es) indicated below. To the best of my knowledge, the transmission was reported as complete, and no error was reported that the electronic transmission was not completed. STATE: I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on February 21, 2019, at Los Angeles, Californig. Ihéity Perez 2 4840-8100-7240, v. 1
