Akm Consulting Engineers, Inc. vs. City of Huntington Beach

Opposition

Cal. Super. - 4th Dist.February 10, 2017

© 0 9 O N wn BH 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 FERRUZZO & FERRUZZO, LLP A Limited Liability Partnership, including Professional Corporations 3737 Birch Street, Suite 400 Newport Beach, California 92660 Telephone: (949) 608-6900 Facsimile: (949) 608-6994 VASKO R. MITZEV, Bar No. 213973 vmitzev@ferruzzo.com JILLIAN P. HARRIS, Bar No. 300119 jharris@ferruzzo.com Attorneys for Plaintiff AKM CONSULTING ENGINEERS, INC. ELECTROMICALLY FILED Superior Court of Califarnia, County of Orange 03/07/2019 at 11:48:00 PM Clerk of the Superior Court By & Clerk, Deputy Clerk SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ORANGE, CENTRAL JUSTICE CENTER AKM CONSULTING ENGINEERS, INC,, Plaintiff, Vs. CITY OF HUNTINGTON BEACH, a charter city and municipal corporation; TOM HERBEL, individually; VIDO ARTUKOVICH AND SON, INC., a California corporation; VIDMAR, INC.,, a California corporation; VIDO ARTUKOVICH AND SON, INC./VIDMAR, INC. a Joint Venture; MARK ARTUKOVICH, individually; and DOES 1 through 10, inclusive, Defendants. VIDO ARTUKOVICH AND SON, INC./VIDMAR, INC., a Joint Venture, Cross-Complainant, Vs. AKM CONSULTING ENGINEERS, INC; OMER ZEKI KAYIRAN, an individual; EMIN KAYIRAN, an individual; and ROES 1 through 20, inclusive, Cross-Defendants. Case No. 30-2017-00902740 Assigned for All Purposes To: Judge: Hon. Melissa McCormick Department: C13 PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) DEFENDANT VIDO ARTUKOVICH & SONS, INC./VIDMAR, INC., A JOINT VENTURE’S MOTION FOR SUMMARY JUDGMENT [RESERVATION NO. 72935133] (2) DEFENDANT MARK ARTUKOVICH’S MOTION FOR SUMMARY JUDGMENT [RESERVATION NO. 72952800] [Separate Statement; Declaration of Emin Kayiran; Declaration of Jillian P. Harris, Request for Judicial Notice; Compendium of Exhibits Filed Concurrently Herewith] Hearing: DATE: March 21,2019 TIME: 1:30 p.m. DEPT... C13 Complaint Filed: 2/10/17 First Amended Complaint: 12/21/17 Trial Date: 4/22/19 == PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MSJ A214A.4\493311v1 N e w p o r t B e a c h , C a l i f o r n i a 9 2 6 6 0 T e l e p h o n e ( 9 4 9 ) 6 0 8 - 6 9 0 0 F E R R U Z Z O & F E R R U Z Z O , L L P 37 37 Bi rc h St re et , Su it e 40 0 © 0 3 O N nm B R A W N = N O R ND N N N N N N m e m em e m e a e m e a ee e e a c o N O N ni B A W = O D O N N Y NN E W N = O TABLE OF CONTENTS 1. INTRODUCTION eooooooooooooooooeooooo rer are ELE rapper 2. RELEVANT FACTUAL BACKGROUND .coooooeoooeeoeoeoeoeeooeoeoeeeesoeeoeeeooeeeees oo 3. VAS AND MARK ARTUKOVICH WERE SUBSTANTIAL FACTORS IN THE TERMINATION OF AKM’S TRINIDAD TASK ORDER CONTRACT, THE TERMINATION OF AKM’S ON-CALL CONTRACT WITH THE CITY, AND THE END OF THE RELATIONSHIP BETWEEN AKM AND THE CITY oot crisesesssnesesnennes 4. A TRIABLE ISSUE OF FACT EXISTS AS TO MARK ARTUKOVICH’S INDIVIDUAL LIABILITY .civretreeeeeeeeesaseereressessesesssssosssessesseessssesssssesssessssonsons A. Mark Artukovich Can Bind Both Himself and VAS... B. Mark Artukovich’s Direct Action Constitutes Actionable Tort for Which He May Be Held Personally Liable .........cccccoevievininninniicnennen. 5. SUMMARY JUDGMENT MUST BE DENIED BECAUSE AKM HAS PRESENTED EVIDENCE OF DAMAGES... -i- PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MSJ A214A.4\493311vl No oC 0 NN O N un kA Ww 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Page(s) Cases American Alternative Energy Partners II v. Windridge, Inc. (1996) 42 Cal.App.4th 35008 Li; 5D meer SS SS CS FS eS 20 Applied Equip. Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 513-514.....ccccovveirrennene. 20 Asahi Kasei Pharma Corp. v. Actelion Ltd. (2013) 222 Cal. App.4th 945, 965-968 ...........ccoc...... 15 Binder v. Aetna Life Ins. Co. (1999) 75 Cal. App.4th 832, 840 .........ccoovvvieeriverererieriiisreeseeresnens 17 Bockrath v. Aldrich Chem. Co. (1999) 21 Cal.4th 71, 79......civeiiveinicrereerieesreseeesse e ae ens 10 Consumer Cause, Inc. v. SmileCare (2001) 91 Cal. App.4th 454, 468........ocovvvcveinirieereeirenieanens 2 Edwards v. Arthur Anderson, LLP (2008) 44 Cal.4th 937, 944 ......ccvveevvveeevreiniececeeeereeresre eens 3 Englert v. IVAC Corp. (1979) 92 Cal.App.3d 178, 190 .....oovieeeeerecececrcreeee se rs sere sve nns 13 Espinosa v. Little Co. of Mary Hosp. (1995) 31 Cal.App.4th 1304, 1317-1318 .oevvververreerierne, 11 Frances T. v. Village Green Owners Ass'n (1986) 42 Cal.3d 490, 507.....ccoevveeveevnreeieevvecrenrnenne 14 GAB Business Services, Inc. v. Lindsey & Newsom Claim Services, Inc. (2000) 83 Cal APPA B09, BT 1 ossvicusnmmin sxmssss sms mammasasmmtnsmasn smmssismongini fobs AFF ERR ID Drwassanmrnnsna nai 13 Golden v. Anderson (1967) 256 CalAPP.2d 714 c..ccuevoeeeerreeereeerseeesssesseessesesesesesssessress serene 12 Grape v. Glick (1945) 26 Cal. 2d 680), 692-893 nuccusus cvsvuns.sueis inssussnin asi is 40a5545 65355538 damnsme snamiish 17,19 Hatchwell v. Blue Shield of California (1988) 198 Cal. App.3d 1027.....covvevreevvnnnirreennene 20,21 Hawkins v. Wilton (2006) 144 Cal. App.4th 936, 949.......c.vcieeeriiiieececiceeree serene essere sans 3 James v. Marinship Corp. (1944) 25 Cal.2d 721, 742-743 eee crores 14 J-M Mfring Co., Inc. v. Phillips & Cohen LLP (2016) 247 Cal. App.4th 87,97 ...ccovvevevvvveverecnnn. 16 Kery Invs. v. Cube Co. (1998) 63 Cal. App.4th 1412, 1424...........ccceccsmmmmmrninsarmnessssssssssssssisisesarass 20 Little v. Amber Hotel Co. (2011) 202 Cal. App.4th 280, 302-303 ..cammamsssssessesssmsnismnerss 17,18, 19 Lopez v. Sup.Ct. (1996) 45 Cal. App.4th 705, 717 .cooiiiiiiicieieneinietieesse see seesasn nes 2 Mayes v, Sturdy Northern:Sales; Ine (1979) 91 Cal. App.3d 69 ...cvvvusinmsmssomammassssessonssoens 12 McClory v. Dodge, (1931) 117 Cal.App.148; PMC, Inc. v. Kadisha (2000) 78 CalLAPP.Ath 1308... seers eee 12 Oriegay, Kmart Corp. (20015 26 Cath 1200; 1205-1206. nwmnsmmmsmsmsmssmssanmisssmsmssmms 10 -ii- PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MS] A214A.4\493311v1 : ¢ cL N N Ln B L N \O 10 1 12 13 14 15 16 17 18 19 20 21 2 58 24 25 2% 27 28 TABLE OF AUTHORITIES (cont.) Page(s) Pacific Gas & Elec. Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118,1126......c.cccevvuvverrccrcrnnnne 2 PMC, Inc. v. Kadisha (2000) 78 Cal.App.4th 1368, 1379-1381 ..ccciviviriiniriiciicesen 15 PMC, Inc. v. Saban Ent., Inc. (1996) 45 Cal.App.4th 579, 603 ........... eee 15 Quelimane Co. v. Stewart Title Guar. Co. (1998) 19 Cal.4th 26, 55 ......covvvvririvcirniniricrnenennes 2,20 Raven H. v. Gamette (2007) 157 Cal. App.4th 1017, 1029-1030.....ccceecerimrrrrincinnreniceireniorennens 11 Redfearn v. Trader Joe's Co. (2018) 20 Cal.App.5th 989, 1006-1008.........ccoeecvvvrvireniineriinenene 16 Rene v. Baird (1998) 18 Cal Ath G40, B62 .uumwwsuwis sss vsossansne iatnss snsssssas sss isis ss aamsmss susie 13 Saelzler v. Advanced Group 400 (2001) 25 C4th 763, 772 i..ccvevrvvueieeiieineneeneerreneice s nses 10 Schwartz v. Pillsbury Inc. (9th Cir. 1992) 969 F.2d 840, 843-844.........cccoevvvirirernininericnierienaens 14 Taus v. Loftus (2007) 40 Cal.4th 683, 720 ..ccveviivieiiiiiirrieieenresire sve snresre serene ss e see seesse sna sea nnes 16 Uriell v. Regents of Uni. of Cal. (2015) 234 Cal. AppAth 735 ..c.cmsmsssnssssssassassnssssssssmsassssrsmmamnsss 11 Venhaus v. Shultz (2007) 155 Cal.App.4th 1072, 1079..c..ccveriiviniiririeniinreenienseinneesseeeesessensesnene 2 Yanez v. Plummer 2013) 221 Cal. App.4th 180, 187 eee sw 10 Statutes | California Penal Code § 148.5 cms amavmnmmmnssmsmmss Cm. 13 CLV. COE § 3333 .iiiiiiieiieriesie crests stresses testa e sree sae s bees bee steers aes sae as beara essa eate see sae es bene ssbe ante ntnens 17 CV. COE, § 463) cvrrreerreeereeeeroseereeeeeesseseeeseesesesesese sses se e s s n se ss e s eseses sans aE Se 16 Civ, Proc. Code § 437C(P)(2).ueevemrireirerireiierreriririersesesssessesissessesessssssssesesssesssessessessasessessseenesssnes 2 Coon, CudE § UBII0Y own suosmsumnnansconsomonss samenssissnisssun ss mse 50681003 8A 58 ASR ERE 13 Corp. Code § 3LT7(Q) cvvvrreerreeieiriierieeseeree sree erierie ste sres sre sraesesessassnesssesssass sse sse sassnesseseens sse nesion 14 Other Authorities § 145-In General., 2 Witkin, Cal. Proc. 5th § 145 (2008) .....ccovvvieriiieiinrieniierienicsiecreee nner 15 431 10 6 Witkin, Torts, § 1319 8p. TI0w amu somommmms mass arias sass 33 dE ASA SR 17 CACTI 2201 iii ee eres eee 2 Civil Jury TostiCions B30. ssimmssoss umssuossossmsesssnmeses vs esse 0isms ses tsa 8a Ss sss sss 10 - iii - PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MSJ A214A.4\493311v1 oO 0 NN O N wn BN 10 11 12 13 14 15 16 17 18 19 20 21 | 22 23 24 25 26 27 28 Rest.2d, Conflict of Laws § 36, Comment c; Judicial Council 1969 Report, p. 78 A214A.4\493311vl TABLE OF AUTHORITIES (cont.) - iv - PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MSJ Seieaserareserreresrese © 0 NN O N n b 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 Plaintiff AKM Consulting Engineers, Inc. (“AKM”) submits the following Consolidated Opposition to two Motions for Summary Judgment: one filed by Defendant Vido Artukovich and Son, Inc./Vidmar, Inc., a Joint Venture’s (“VAS”) and another filed by Defendant Mark Artukovich (“Mark”) (collectively “Defendants™). In this lawsuit, AKM sued four related defendants (1) VAS, which is a joint venture, (2) Vido Artukovich and Son, Inc., which is 3 member of the VAS joint venture, (3) Vidmar, Inc., which is the other member of the VAS joint venture, and (4) Mark Artukovich, who is managing partner of the joint venture. Only Defendants Mark Artukovich and VAS have filed motions for summary judgment. Since both of these motions are identical, save one small section, and they are both supported by identical separate statements, AKM had filed one Consolidated Opposition to both motions for the Court’s convenience. 1. INTRODUCTION Summary adjudication can be granted as to individual claims or defenses. By contrast, on a summary judgment motion, defendants bear the burden of demonstrating they are entitled to judgment as a matter of law with respect to all causes of action and all theories of liability asserted by plaintiff. Civ. Proc. Code § 437c(p)(2); Lopez v. Sup.Ct. (1996) 45 Cal.App.4th 705, 717. The entire action must be resolved for summary judgment to be granted, if one cause of action survives, summary judgment is inappropriate. If the defendants fail to meet their burden, their motion must be denied; the plaintiff need not make any showing at all. Consumer Cause, Inc. v. SmileCare (2001) 91 Cal. App.4th 454, 468; Civ. Proc. Code § 437¢(p)(2). AKM brings tort claims against Defendants for: (1) inducing breach of contract, (2) intentional interference with contractual relations, (3) intentional interference with prospective economic relations, and (4) negligent interference with prospective economic relations. Defendants argue that they are entitled to summary judgment on these causes of action because AKM has no evidence to support the element of intent and the element of independent wrongfulness. MSJ 10-11. Intent is not an element of negligent interference with prospective economic advantage. Venhaus v. Shultz (2007) 155 Cal.App.4th 1072, 1079. Independent wrongfulness is not an element of the prima facie case for intentional interference with contractual relations, nor for inducing breach of contract. CACI 2201; Quelimane Co. v. Stewart Title Guar. Co. (1998) 19 Cal.4th 26, 55; Pacific _D- PLAINTIFF’S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MS] A214A.4\493311v] 0 NN O N nn ke W N \O 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Gas & Elec. Co. v. Bear Stearns & Co. (1990) 50 Cal.3d-1118,1126. Defendants’ arguments with respect to intent and independent wrongfulness do not negate an - element of each of AKM’s claims. Therefore, even if the court were persuaded by Defendants’ position regarding intent, summary judgment must still be denied; because the negligent interference claim would survive. Likewise, even if the court were persuaded by Defendants’ position regarding independent wrongfulness, summary judgment must still be denied because the claims of inducing breach of contract and interference with contractual relations would survive. Because, Defendants have sought only summary judgment, and not summary adjudication, these arguments| need not be addressed because they cannot foreclose all of AKM’s claims. See Hawkins v. Wilton (2006) 144 Cal.App.4th 936, 949 (without alternative summary adjudication motion, court could not consider whether moving party may have prevailed on specified issues). As an aside, it should be noted that Mark Artukovich’s misrepresentations establish the intent | and independent wrongfulness elements. In an effort to have AKM kicked off the project, he lied to police and claimed Emin Kayiran physically assaulted him, and he also lied to the City and complained that AKM was contacting his subcontractors without his permission, as explained below. See Edwards v. Arthur Anderson, LLP (2008) 44 Cal.4th 937, 944 (an act is independently wrongful if it is unlawful, that is, if it is prescribed by some constitutional, statutory, regulatory, common law, or other determinable standard). | Causation and damages, HOWETEE, are essential to all of AKM’s causes of action, and the evidence demonstrating triable issues of material fact for these elements is outlined below. The additional issues of standing and Mark Artukovich’s individual liability are also addressed herein. 2. RELEVANT FACTUAL BACKGROUND In 2013, AKM and the City of Huntington Beach (the “City”) entered into an On-Call Agreement for Construction Management Services (“On-Call Agreement”). The agreement had a 3 year term and a value of $1 million. See AKM’s Statement of Additional Undisputed Material Facts (“AUMPF”) 63. In 2015, the City accepted AKM’s proposal for $324,325 to perform construction management (“CM”) services to the City, pursuant to its On-Call Agreement, for the public works project known as Trinidad Lift Station (“Trinidad”). The parties refer to this as the “Task Order -3- PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MSJ A214A.4\493311vl Oo 0 NN O N Wn pH 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Contract.” See AUMF 62. The City hired Defendant VAS as the contractor to build the Trinidad Project in accordance with the plans and specifications provided by the City and designed by City consultant Lee & Ro. Defendant Mark Artukovich was the project superintendent for VAS on the Trindad Project. VAS’s typical chain of command on a project, as it related their scope of work, was to direct inquiries to AKM. If VAS had a question for the City in terms of what the City was requiring as a standard drawing, VAS would direct their inquiry to the City directly or it would be put in a formal Request for Information, and that would be directed to the City through AKM. AUMF 1. AKM’s role, as construction manager, on Trinidad was to ensure that VAS built the project according to the plans and specifications. There was nothing in the Trinidad Plans and Specifications that was trivial or unimportant. Verone worked with Emin and AKM almost daily. Verone had no issues with Emin. Verone believed Emin, AKM, and their inspectors were professional. AUMF 3. AKM never refused to follow Verone’s direction on Trinidad, nor, in Verone’s observation, did AKM ever do anything, nor require VAS to do anything, that was contrary to the Trinidad plans and specifications. AUMF 5. During Trinidad, communication between VAS and the City was supposed to run through AKM as the Construction Manager. This chain of communication was explained to Mark and VAS. AUMF 4. On Trinidad, if VAS or Mark had a question in the field, about a particular issue or scope of construction, Andy Ferrigno, (Project Engineer), testified that he would send it to Dave Verone (City Contract Administrator), who would in turn send it to AKM for feedback and response back to VAS or Mark. Tom Herbel (City Engineer), Joe Dale (City Construction Manager), Travis Hopkins (Director of Public Works), nor Andy Ferrigno would not be involved in this process. AUMF 2. Dave Verone instructed AKM to use EADOCS and requested, through AKM, that VAS also use this document management system during the project. AUMF 6. Mark refused to use EADOCS, and used the issue, as a mechanism to circumvent the Chain of Command, and back-channel to Tom Herbel directly, in demanding Emin be removed from the project, and accusing Emin of rude and threatening behavior. Tom Herbel and Andy Ferrigno permitted this back-channeling, and encouraged Mark to escalate his attacks on Emin and AKM. AUMF 7. When it served Mark’s needs, in obtaining AKM’s approval for a payment application for VAS, VAS actively and enthusiastically =k « PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) VAS MSIJ & (2) MARK ARTUKOVICH MSJ A214A.4\493311v1 BH L N oO 0 9 O Y Wn 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 used EADOCS to communicate. AUMF 8. Mark falsely accused Emin and AKM of initiating contact with VAS’ suppliers. He purposefully back-channeled the false accusations directly to Tom Herbel. Mark knew that it was his supplier who actually initiated the contact with Emin and AKM because the supplier had already told Mark that was the case, and had already apologized to Mark for doing so without his prior permission. AUMF 9. Mark intentionally misrepresented AKM’s conversation with VAS’ suppliers to create another opportunity to falsely accuse AKM of being unethical, unprofessional, rude, aggressive, and demanding his removal, with the threat that otherwise, VAS’ would sue the City. AUMF 10. Additionally, Mark falsely accused Emin and AKM of lying about the contents of a construction meeting, and accused AKM of attempting to direct VAS to do extra work without compensation. AUMF 11. In an effort to remove AKM from the project, Mark also accused AKM of lying to the City, and called Emin “Pathological,” in an email directed to Tom Herbel, which Herbel found to be atypical (Mark reaching out to Herbel directly) and unprofessional. AUMF 12, 24, Mark falsely accused Steve Patterson, AKM’s Field Inspector on the Trinidad Project, of issuing Notices of Deficiencies to VAS which were not meritorious, but “vindictive,” and back-channeled that accusation directly to Tom Herbel. AUMF 13. Mark demanded Emin and AKM be removed from the Trinidad Project, and made the demand directly to Tom Herbel, who considered the demand unusual. AUMF 25. Mark accused AKM of fabricating inaccurate and incomplete construction meeting minutes and complained to the City. AUMF 23. Andy Ferrigno allowed Mark to circumvent the City’s chain of command and acted as a back channel, contributing to communication problems on Trinidad, and undermining AKM’s authority and integrity. AUMF 14. Andy Ferrigno overstepped his boundaries in permitting Mark to retain bypass bid monies of $100,000, which the City should have been given a credit for, as VAS did not perform the bid item. AUMF 15. Ferrigno’s relationship with Mark created a problem on Trinidad, resulting in money decisions favoring the contractor being made by Andy, instead of the City Construction Contract Administrator, David Verone. AUMF 16. One faction of the City attempted to remove Ferrigno from the project, but because of a power struggle within the Department of Public -5- PLAINTIFF'S CONSOLIDATED OPPOSITION TO: : (1) VAS MSJ & (2) MARK ARTUKOVICH MSJ A214A.4\493311vl ’ Ko 3 ON Oo 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 23 26 27 28 ‘Works, Ferrigno was not removed. AUMF 17. Ferrigno acknowledged Mark can be “rude and crude”, and his vocabulary, laced with expletives, was not in good taste, when it was directed at AKM and Emin; but Ferrigno expected AKM “turn the other cheek” and take it; for that’s “what Jesus would do.” AUMF 33. Mark attacked AKM field inspector Steve Patterson with profanities and accused him, in front of City staff, of professional incompetence, calling him a “moron, from mars”, and that his professional feedback to VAS was immaterial and “complete bullshit.” Mark used this as a mechanism to refuse to work with and listen to the field inspector, threatening the progress of the project. AUMF 19. Herbel agreed with Steve Patterson and believed Mark’s email comments about Steve were unprofessional, abusive and derogatory and demonstrated that Mark was acting to degrade the relationship between AKM and VAS. AUMF 20. Herbel did not have any independent information that Steve or AKM was doing an incompetent job or were incapable of properly inspecting Trinidad. AUMF 21. Likewise, Verone believed that Mark’s email comments to AKM and its inspector, Steve Patterson, were unprofessional. AUMF 22. Verone believed AKM provided City with first rate project management while Mark was difficult to work with. AUMF 18. Steve Patterson, AKM’s Field Inspector, felt so defamed by Mark’s accusations of incompetency, lack of intelligence, and galactic origin that he informed the City and AKM he did not want to continue as project inspector due to the hostile work environment created by Mark. AUMF 26. Mark’s defamatory, vulgar statements were so harmful to AKM and to the Project’s progress that AKM informed the City that it wished to withdraw from the project; and could not withstand the hostile work environment further. AUMF 27. Herbel met with Mark and told him his abusive behavior toward AKM would not be tolerated and to “calm down.” AUMF 28. Herbel told Mark to discontinue this behavior towards Emin and AKM a couple of times but he did not know if Mark ever complied with Herbel’s requests. AUMF 29. Mark falsely accused AKM to the City, of attempting to force VAS in doing extra work, when Mark knew it was VAS’ contract requirement. AUMF 30. Mark also falsely accused AKM to the City, of attempting to force VAS to provide its subcontracts, and the identification of daily job site. -6- PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MSJ A214A.4\493311vl Oo 0 3 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 workers and their classifications, despite Mark’s actual knowledge that this was a Bid and Contract requirement, and would also be necessary as part of Certified Payroll Record disclosure to the City. AUMF 31. Mark used the subcontract and labor personnel identification issue, as a means to back- channel to Tom Herbel, and demand Emin and AKM be removed from the Project, with knowingly false statements by Mark to Tom that they were: “subversive, destabilizing, non-productive, and obstructive”, and that AKM was acting outside the scope of its contract. AUMF 32. Paul Majich of VAS interacted with Emin and AKM on Trinidad and had no issues with either. Majich does not recall having any problems related to an RFI submittal to AKM, nor did Mark ever complain to him about any trouble Mark was having with an RFI submittal on the Trinidad project. AUMF 34. Majich is currently the General Manager for another construction company and working with AKM and Emin on another public works project in Alhambra, California, and has no issues with either AKM or Emin. AUMF 35. VAS used Nitro, a scheduling consultant, during Trinidad because Trinidad was a pretty involved scheduling project, with many components, and VAS, as underground contractors, are not very good at making schedules. AUMF 36. Nitro, VAS’ scheduling consultant, prepared a report informing VAS that the Trinidad project was delayed due to VAS’ failure to timely perform certain of its scope. Nitro never attributed any project delays to AKM’s conduct. AUMF 37. Similarly, Vido (Mark’s brother), and Mark spoke about the Trinidad project, but nothing sticks out in Vido’s mind, and Mark never made any comments about an incident in a construction trailer during Trinidad. Mark never told Vido that Mark ever felt unsafe working with the construction managers on the Trinidad project. AUMF 38. Mark never consulted his brother about using Patrick Duffy (VAS’ law firm) to write a letter to the City, nor is he aware that Mark did so. Mark never discussed AKM’s termination with Vido. Mark and Vido were of an equal position at VAS, “boss,” and Mark ended up running Trinidad because Vido was busy on another project. AUMF 39, While, Marko Artukovich, Mark’s nephew and Trinidad field foreman, never had any problems with Emin while working on Trinidad. AUMF 40. | City required VAS to produce its subcontracts, and directed AKM to obtain them from VAS. To Verone’s knowledge, VAS never provided them to the City, and that requirement of VAS was ws PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MSJ A214A.4\493311v1 © NN O N oO 10 11 12 13 14 15 16 17 18 19 20 21 24 23 24 25 26 27 28 not trivial. AUMF 41. Paul Majich, Mark Artukovich’s first cousin, and VAS’ agent in charge of inspecting the job site and bidding on Trinidad for VAS’ construction, acknowledged VAS’ obligation to provide the subcontracts to the City, as pretty normal procedure, and he was unaware of any reason VAS wouldn’t provide them to the City. AUMF 43. Vido Artukovich, Mark’s brother, does not know of any reason, why VAS would not furnish the City with copies of all subcontracts it enters into for Trinidad. AUMF 44. Verone did not believe that AKM ever asked VAS for demands outside of its contract to build Trinidad per the plans and specifications, and Verone disagreed with VAS’ lawyer letter representing the contrary. AUMF 45. At the August 26, 2015 construction trailer meeting, Mark and Emin argued about VAS providing City (through AKM) its subcontracts and identification of labor personnel on the daily job site. Marko does not know if VAS’ subcontracts were ever provided to the City. AUMF 42. Mark back-channeled to Tom Herbel his false accusation that Emin had assaulted him during the trailer incident, that he was thinking of filing assault charges against Emin, and Mark directed his lawyer Patrick Duffy to send a letter which made false, disparaging representations regarding Emin, AKM, and threatening that if Emin and AKM were not removed by the City, VAS would sue it. AUMF 47. On August 27, 2015, the day after the trailer incident, AKM was removed from the Trinidad Project permanently and has not performed Construction Management Services for the City again. AUMF 48. The City personnel who attended and heard about the trailer incident considered Mark’s conduct in the trailer meeting unprofessional and childish. Ferrigno, nor Hopkins, believed Mark was assaulted and considered such a suggestion or accusation by Mark ridiculous. Verone believed that Mark’s written complaint to Herbel regarding the alleged assault was “inaccurate and twisting a lot.” AUMF 49. Marko was present during the August 26, 2015 trailer incident between Emin and Mark and, witnessed their interaction, and did not at any time observe Emin physically touch or hit his uncle. Verone was present during trailer incident, audio recorded it, and did not observe any physical touching by anyone, nor did he have to physically restrain anyone. Verone believed that Mark was very close to losing his cool. AUMF 46. Mark made a false police report to the City of Huntington Beach 5 days after the trailer -8- PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MSJ A214A.4\493311vl ~~ O N n n B incident, wherein he falsely reported to a police officer that “Suspect became angry and hit Reporting Party [Mark].” The police officer’s investigation independently confirmed “no physical contact made.” AUMF 50. Mark made a false police report to the City of Huntington Beach 5 days after the trailer incident, wherein he falsely reported to a police officer that “Emin, mad over a contract issue, lunged at Reporting Party [Mark]”. AUMF 51. Mark reported to the police officer that he didn’t make a contemporaneous report of the incident on August 26, 2015 because he was told by the City that Emin/AKM would be fired, but “Emin/AKM has not been fired and Mark keeps getting emails 8 I from Emin.” AUMF 52. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Nearly 30 days after AKM was removed from the Trinidad Project, Mark back-channeled the letter from his lawyer about Emin’s alleged assault to Andy Ferrigno. AUMF 54. On October 6, 2015, Mark back-channeled an --- directly to Tom Herbel, informing Herbel that Mark had heard the City was contemplating bringing AKM back onto Trinidad and, if it did, VAS would sue the City and if AKM was allowed to return even with Zeki Kayiran as the head, the Trinidad project would be negatively impacted and it would be bad business. AUMF 55. The City imposed no consequences on Mark’s unprofessionalism, and Herbel did not believe there was any level or conduct of abuse by Mark or VAS towards AKM that would rise to a level wherein City would terminate VAS from Trinidad. AUMF 53. City was afraid VAS would sue it, SO it allowed Mark to act unprofessionally, abuse AKM, and give in to Mark’s demands on the project, and chose to fire AKM instead of facing litigation from VAS, which Mark and his lawyer repeatedly threatened. AUMF 56. Under Hopkins’s 12 year tenure as Public Works Director, the City has never terminated a contractor, such as VAS, from a City project. AUMF 57. AKM was never reinstated on Trinidad and, on November 20, 2015, the City terminated AKM for Cause, and falsely accused it of causing the Project extreme harm and delay. AUMF 58. The City’s Term-For-Cause Letter has to be disclosed by AKM every time it bids on a public works project for at least five years. AUMF 59. Herbel would never allow Emin to be a point person Construction Manager on a public works project for the City of Huntington Beach. AUMF 60. Herbel believed that Mark’s interaction with Emin was a contributing factor to alleged delay claimed by the City on Trinidad, which led to City = PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MSJ A214A.4\493311v1 : 0 N Y n t B W NN \O 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 terminating AKM’s task order and On-Call Agreement. AUMF 61. 3. VAS AND MARK ARTUKOVICH WERE SUBSTANTIAL FACTORS IN THE TERMINATION OF AKM’S TRINIDAD TASK ORDER CONTRACT, THE TERMINATION OF AKM’S ON-CALL CONTRACT WITH THE CITY, AND THE END OF THE RELATIONSHIP BETWEEN AKM AND THE CITY Herbel vowed never to hire AKM again; Mark’s back-channel, anti-AKM campaign of falsehoods and accusations of dishonesty and incompetence worked. Mark and the VAS convinced the City that AKM should be removed from Trinidad and never hired again. “Causation” is an essential element of a tort action. Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 772, and is generally a question of fact to be determined by the jury. Ortegav. Kmart Corp. (2001) 26 Cal.4th 1200, 1205-1206. Civil Jury Instructions 430 and 431 (“CACTI”) define “substantial factor” as a factor that a reasonable person would consider to have contributed to the harm. It must be more than a remote or trivial factor. It does not have to be the only cause of the harm: “[t]he substantial factor standard is a relatively broad one, requiring only that fie contribution of the individual cause be more than negligible or theoretical. Thus, ‘a force which plays only an infinitesimal or theoretical part in bringing about injury, damage, or loss is not a substantial factor,” but a very minor force that does cause harm is a substantial factor. This rule honors the principle of comparative fault.” Bockrath v. Aldrich Chem. Co. (1999) 21 Cal.4th 71, 79. In this case, AKM alleges that 4 of the VAS related defendants and City agents contributed to the harm. So Mark and the VAS are not the only requisite legal cause to evaluate: “A defendant's negligent conduct may combine with another factor to cause harm; if a defendant’s negligence was a substantial factor in causing the plaintiff's harm, then the defendant is responsible for the harm; a defendant cannot avoid responsibility just because some other person, condition, or event was also a substantial factor in causing the plaintiff’s harm; but conduct is not a substantial factor in causing harm if the same harm would have occurred without that conduct.” Yanez v. Plummer (2013) 221 Cal. App.4th 180, 187. | Significantly, here, AKM would not have been removed from Trinidad, and all future work with the City, without Defendants’ conduct. Without Mark and VAS’ campaign against AKM, AKM -10 - PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MSJ A214A.41\493311v1 0 NN O N wn Bs WwW DN \O 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 would still have a relationship with the City. This is the only time a consultant has been removed from a project part way through construction. It follows that if any other contractor built the project, then AKM would not have experienced the injury of termination. Defendants were a substantial factor in causing AKM’s harm. AKM need not prove that the Mark or VAS’ negligence was the sole cause of AKM’s injury in order to recover. Rather it is sufficient that Mark and/or the VAS’ negligence is a legal cause of injury, even though it operated in combination with other causes, whether tortious or non-tortious. Uriell v. Regents of Uni. of Cal. (2015) 234 Cal.App.4th 735. And where, as here, AKM’s injury is attributable to multiple defendants, AKM also need not prove probability (i.e. more than 50% chance) between the injury and each individual defendant or cause. Having established a prima facie case of duty, breach and resulting injury, AKM need only prove that each defendant or cause was a substantial factor in producing the injury. “Clearly, where a defendant's negligence is a concurring cause of an injury, the law regards it as a legal cause of the injury, regardless of the extent to which it contributes to the injury.” Espinosa v. Little Co. of Mary Hosp. (1995) 31 Cal.App.4th 1304, 1317- 1318. The fact of causation is incapable of mathematical proof, since no [person] can say with absolute certainty what would have occurred if the defendant had acted otherwise. If, as a matter of ordinary experience, a particular act or omission might be expected to produce a particular result, and if that result has in fact followed, the conclusion may be justified that the causal relation exists. In drawing that conclusion, the triers of fact are permitted to draw upon ordinary human experience as to the probabilities of the case. Raven H. v. Gamette (2007) 157 Cal. App.4th 1017, 1029-1030. The morning immediately after the trailer incident, Mark Artukovich placed a personal 11 minute phone call to Tom Herbel, for the purpose of campaigning against AKM, as borne out by assault and false allegations, police report. AUMF 81. Two months later, on same day that AKM’s termination for cause letter was issued by the City, Mark Artukovich personally called Tom Herbel again. Coincidence-likely not-as this is 2 months after AKM was removed from Trinidad. Phone call is independent evidence of Artukovich being substantial factor, because the only reasonable inference is that Herbel was publishing to Artukovich the defamation and the termination for cause letter. There would be no other reason for them to have a call on that day. AUMF 82. 211 - PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MSJ A214A.4\493311vl BS NO 0 3 O N Wn 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Mark’s endless barrage of misrepresentations, abuse, defamation and letters from his attorney beat down the City, and turned it against AKM. The City, a jury could decide, frankly preferred a claim from AKM rather than to take on Mark and VAS in the litigation they continually threatened, the claims for delay and extra money they felt VAS Defendants would seek, and the risk to the Trinidad project’s construction, if they were questioned about VAS’ conduct. AKM was hired to safeguard the City and the integrity of Trinidad’s construction, by enforcement of the plans and specifications. But AKM’s standing up to Mark and VAS caused Mark to escalate, and present to the City, as an “enemy-at-the-gates,” nearly declaring war several times. Further, AKM’s standing up for itself, in response to this assail by Mark and the City, only angered employees within the City and built negative animus in the minds of Herbel and Ferrigno towards Emin and AKM. This resulted in the termination and withdrawal of future economic relations with AKM. The City’s role will be addressed at trial, but a reasonable person would be remiss if they did not see the back-channel orchestration at the heavy hands of Mark and VAS Defendants. A jury should be allowed to draw on their life experiences and make the call. 4. A TRIABLE ISSUE OF FACT EXISTS AS TO MARK ARTUKOVICH’S INDIVIDUAL LIABILITY A. Mark Artukovich Can Bind Both Himself and VAS Defendants’ assertion that corporate entities are comprised of individuals and can act only through individuals is correct but Defendants do not address the question of who is liable: the corporation, the individuals, or both. Any permutation of the three may be liable, and Mark may be liable even if he received no personal gain from his tortious conduct. Golden v. Anderson (1967) 256 Cal.App.2d 714 (conspiring corporate officials acting tortiously are liable to injured persons even if the corporation also is liable); Mayes v. Sturdy Northern Sales, Inc. (1979) 91 Cal. App.3d 69; PMG, Inc. v. Kadisha (2000) 78 Cal.App.4th 1368. Several factors may be considered. Were VAS decisions made collectively or principally by Mark? As “Boss” on Trinidad, he made the majority of the decisions, and he didn’t inform other VAS officers, like his brother Vido, of issues related to Trinidad or that he utilized VAS’ lawyer, -12- PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MSJ A214A.4\493311v] a O© 0 JI O N Wn 10 1 12 13 14 15 16 17 18 19 20 21 2 23 2 25 26 27 28 Patrick Duffy to wage a campaign against Emin and AKM by threatening the City with litigation, if the former were not removed. There is no evidence that anyone but Mark was in charge and making the decisions and engaging in the abusive and defamatory conduct, including the admitted back- channeling to Tom Herbel and Andy Ferrigno. There is no evidence of collective decision making on Trinidad by anyone else at VAS. Mark was the boss and his nephew, Marko, did as instructed. Marko had no issues with AKM, Emin or any field inspectors (Steve Patterson), even though Marko was closest to the front lines of the project, being field foreman and interacting with Emin and AKM’s inspectors daily. Reno v. Baird (1998) 18 Cal.4th 640, 662. Mark, on the other hand, only visited the project site weekly. | Mark, as Managing Partner of the VAS, is regarded as VAS’ agent in his dealings with third parties. And VAS may be bound by Mark’s dealings, so long as they were “within the scope of the authority, actual or apparent, conferred by the board or within the agency power of the officer executing it ...” Corp. Code § 208(b); GAB Bus. Svcs., Inc. v. Lindsey & Newsom Claim Services, Inc. (2000) 83 Cal.App.4th 409, 421. Conferral of actual authority is a question of fact, and should not be decided on summary judgment. Englert v. IVAC Corp. (1979) 92 Cal.App.3d 178, 190 (the fact that the board of directors knows of the officer's acts and does not object thereto is evidence of actual authority). It is unclear what Vido or anyone else at VAS knew about Trinidad or AKM’s termination, as Vido’s testimony was vague. A triable issue exists whether the VAS and Mark should be jointly and severally liable or some other permutation. As managing partner of the VAS, Mark, in running the VAS, and the Trinidad Project, may also be found to have ostensible/apparent authority to do “any act appropriate in the ordinary course of business,” thereby binding the VAS. Englert v. IVAC Corp., supra, 92 Cal.App.3d at 190, (corporation barred from enforcing promissory note because its former president had given delhi extension of time to pay). Perhaps VAS’ routine business model on all projects is exactly as Mark conducted it during Trinidad, including his verbal abuse of Emin, Steve, AKM, and his back-channel techniques. Maybe it was just Mark’s “rogue” conduct. Either way, that’s a factual determination for a jury, not for summary judgment. In addition to any VAS liability, Mark can be held individual liable for his conduct, if it was -13- PLAINTIFF’S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MSJ A214A.4\493311v1 . wn W N OO 0 3 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 97 28 tortious, and he participated in the wrong or authorize or direct that it be done. Frances T. v. Village Green Owners Ass'n (1986) 42 Cal.3d 490, 507. Personal liability also attaches if Mark knowingly supplied the City with false or misleading information about AKM or its agents, like Emin, or Steve Patterson, in order to get AKM fired. Schwartz v. Pillsbury Inc. (9th Cir. 1992) 969 F.2d 840, 843- 844 (liability may lie if corporate president knowingly supplied franchisees with offering circular containing misleading profitability information). This rule has its roots in the law of agency. Directors are said to be agents of their corporate principal. Corp. Code § 317(a). And “[t]he true rule is, of course, that the agent is liable for his own acts, regardless of whether the principal is liable or amenable to judicial action.” James v. Marinship Corp. (1944) 25 Cal.2d 721, 742-743. Moreover, directors are not subordinate agents of the corporation; rather, their role is as their title suggests: they are policy-makers who direct and ultimately control corporate conduct. Unlike ordinary employees or other subordinate agents under their control, a corporate officer is under no compulsion to take action unreasonably injurious to third parties. But like any other employee, directors individually owe a duty of care, independent of the _ entity's own duty, to refrain from acting in a manner that creates an unreasonable risk of personal injury to third parties. The reason for this rule is that otherwise, a director could inflict injuries upon others and then escape liability behind the shield of his or her representative character, even though the corporation might be insolvent or irresponsible. Director status therefore neither immunizes a person from individual liability nor subjects him or her to vicarious liability. Frances T., supra 42 Cal.3d at 504-505. B. Mark Artukovich’s Direct Action Constitutes Actionable Tort for Which He May Be Held Personally Liable Mark Artukovich was managing partner of VAS, helped prepare the bid for the Construction Contract with the City, along with his brother, Vido Artukovich, and ran the Trinidad Project in its entirety. Mark falsely accused AKM of contacting VAS’ contragtons and suppliers, accusing AKM of lying, and Emin of being a pathological liar, accused AKM of incompetence and calling Steve Patterson an incompetent moron, that VAS would not listen to. AUMF 9, 19, 24. When the trailer incident occurred, Mark tried to put a nail in the coffin, by alleging assault, making a false police -14 - PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MSJ A214A.41493311vl No © © 9 A N wn pb Ww 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 report that he was actually physically struck by Emin. AUMF 50-52. California Penal Code § 148.5 makes it a misdemeanor to make a false report of a crime to the police or other authorities. He attempted to bury AKM further with greenlighting a heavy handed letter from his attorney that was intentionally false, and then he wrote a back-channel correspondence to Tom Herbel threatening litigation if AKM was brought back on, again disparaging AKM’s competence and professionalism. PMC, Inc. v. Kadisha (2000) 78 Cal. App.4th 1368, 1379-1381 (corporate officer's participation in tortious conduct may be shown by direct action or by knowing consent to or approval of unlawful acts). The legal fiction of the corporation as an independent entity was never intended to insulate officers and directors from liability for their own tortious conduct. All persons who are shown to have participated in an intentional tort are liable for the full amount of the damages suffered. Asahi Kasei Pharma Corp. v. Actelion Ltd. (2013) 222 Cal.App.4th 945, 965-968. All of the exemplified anti-AKM campaign and abusive barrage was at the hand or directed by Mark Artukovich and intended to harm AKM and “false paint,” them in the eyes of the City, with the goal of AKM’s removal from Trinidad and CM work. It worked. City was so convinced, and so afraid of Mark and VAS that it terminated AKM from all CM work, for cause, and vowed (Tom Herbel) never to hire AKM again! There is undisputed testimony from Verone that Mark’s back- channel to Ferrigno was also to gain a money advantage (keeping bypass bid item money of $100,000 instead of sharing some of the savings with the City). So some of Mark’s conduct was directly motivated by the pecuniary gain to VAS. Other of Mark’s conduct was fraudulent and in violation of criminal statutes. Commonly included actions among improper means of tortious interference are actions which are independently actionable, violations of federal or state law or unethical business practices, e.g., violence, misrepresentation, unfounded litigation, defamation, trade libel or trade mark infringement.” PMC, Inc. v. Saban Ent., Inc. (1996) 45 Cal.App.4th 579, 603. A tort may encompass conduct that causes physical injury, property damage, or even injury to intangible interests, e.g., fraud, defamation, or invasion of privacy. Rest.2d, Conflict of Laws § 36, Comment c; § 145-In General., 2 Witkin, Cal. Proc. Sth § 145 (2008). “The tort of defamation ‘involves (a) a publication that is (b) false, (c) defamatory, and (d) unprivileged, and that (¢) has a natural tendency to injure or -15- PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MSJ A214A.4\493311v1 Oo 0 NN O N wn Bs 10 11 12 13 14 15 16 17 18 19 20 21 22 23 2 25 26 27 28 that causes special damage.’ ” Taus v. Loftus (2007) 40 Cal.4th 683, 720. The publication must be an intentional publication of a statement of fact. J-M Mfring Co., Inc. v. Phillips & Cohen LLP (2016) 247 Cal. App.4th 87, 97. Mark’s false accusations regarding AKM and Emin to the City rise to this level; Mark’s false police report is a statutory violation. In Redfearn v. Trader Joe's Co. (2018) 20 Cal. App.5th 989, 1006-1008, Redfearn alleged that in a meeting with Seneca, a Trader Joe's executive, falsely accused Redfearn of spreading rumors that Trader Joe's employees were soliciting bribes and the only way to do business with them was to pay bribes. He also made similar false statements intended to induce Seneca and Sunsweet to terminate brokerage contracts, charged Redfearn with unethical behavior, false statements that would have a natural tendency to injure him in his trade or business. /d. The Court of Appeal, in considering whether Redfearn had pled a cause of action for tortious interference, assayed the reputation harm torts of slander, under Civ. Code, § 46(3) (defining slander to include a false oral communication that “[t]ends directly to injure [a person] in respect to his office, profession, trade or Bsingss ...”); and opined that “Subdivision 1 (crime) and 3 (occupation) of Civil Code section 46 ‘have been held to include almost any language which, upon its face, has a natural tendency to injure a person's reputation, either generally, or with respect to his occupation; and words clearly conveying a meaning within one-of the statutory categories are actionable per se: “Most of the cases that fit within that category [Civil Code section 46, subdivision (3) ] involve statements that reflect on the integrity and competence of the plaintiff, the clearest being allegations of unethical activity or incompetence.” Id. The Court of Appeal in Redfearn concluded that Redfearn adequately pled all necessary elements of his tort causes of action for interference with prospective economic advantage and intentional interference with contract. Certainly in this case, a triable issue exists as to whether Mark engaged in tortious conduct which would hold him personally accountable. A jury should hear all of this evidence and decide. S. SUMMARY JUDGMENT MUST BE DENIED BECAUSE AKM HAS PRESENTED EVIDENCE OF DAMAGES Defendants contend that they are entitled to summary judgment because AKM’s damages are _-16- PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MSJ A214A.4\493311vl wn PR W N © 0 0 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 “fictitious.” MSJ 16: 15. Use of the word fictitious is telling. This choice of words urges the Court to adopt Defendants’ version of events (allegedly true), rather than the AKM’s version (allegedly untrue). Certainly, if there are two versions of events, then there is a dispute of fact, and the motion must be denied because “[t]he trial court may not weigh the evidence in the manner of a factfinder to determine whose version is more likely true.” Binder v. Aetna Life Ins. Co. (1999) 75 Cal. App.4th 832, 840. Contrary to Defendants’ suggestion otherwise, AKM has adduced ample evidence of damages. The measure of damages arising from a tort is “the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not.” Civ. Code § 3333. In other words, tort damages are awarded to compensate the victim for the injury suffered. 6 Witkin, Torts, § 1319 at 776. In the business context, this translates to lost profits. A defendant is liable for all harm flowing from its conduct in interfering with or inducing breach of contractual duties, including lost profits, expenses, and prospective profits. See Little v. Amber Hotel Co. (2011) 202 Cal.App.4th 280, 302-303. The Supreme Court set forth the law concerning lost profits as damages in Grupe v. Glick (1945) 26 Cal.2d 680, 692-693, as follows: “Where the operation of an established business is prevented or interrupted . . . damages for the loss of prospective profits that otherwise might have been made from its operation are generally recoverable for the reason that their occurrence and extent may be ascertained with reasonable certainty from the past volume of business and other provable data relevant to the probable future sales.” So long as a plaintiff establishes that the lost profits exist, they need not be proven with mathematical precision. Little, supra, 202 Cal.App.4th at 305. In Little, there was an underlying action in which an attorney, Little, represented a client in a lawsuit with a broker. Little, supra, 202 Cal.App.4th at 285. Little and the client entered into a fee agreement containing fee-lien and deferred fee provisions. Id. Later, the broker and the client settled the underlying lawsuit in a manner designed to avoid Little’s attorney fee lien. Id. at 286. Little then sued his client for breach and the broker for inducing breach of contract and intentional interference with contractual relations. Id. at 290. The appellate court affirmed the jury’s verdict of $190,684.06 in damages for “unrecovered contract-based fees,” comprising of the fee award Little would have -17- : PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MSJ A214A.41\493311vl N N O N a BR W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 received from the lien and additional fees due under the fee agreement. /d. at 302. Because Little would have received these amounts due under its fee agreement with his client had the broker not induced the client’s breach, the broker was liable to Little for this harm. /d. Similarly, here, AKM was damaged in the amount of the remaining balance of the Trinidad Task Order Contract (approximately $175,046), as well as the remaining balance of the On-Call Agreement (approximately $675,675). AUMF 62-63. AKM was also damaged in the amount of $54,009 for uncompensated work performed on Trinidad. AUMF 64. These are contractual amounts that AKM would have received from the City under its agreements. As in Little, Defendants were a substantial factor in the termination of these agreements, and thus, they are responsible for all harm that flows from the termination, including these remaining balances. That AKM would have received these amounts, is a virtual certainty. No City consultants have ever before been terminated early from a project or On-Call Agreement. AUMF 77. The City, as well as other consultants such as Lee & Ro and Dudek, each testified that once consultants obtain these contracts with the City, they always get|. work under the contract, and the contract is always renewed. AUMF 68. Indeed, AKM’s own history| with City demonstrates the same consistency in payment and work. See AUMF 65. These outstanding contract balances are compensatory damages that would restore AKM to the condition it would have been in absent Defendants’ interference. The broker in Little also argued that Little could not recover for lost profits on new contracts beyond the fee agreement with which it interfered. Little, supra, 202 Cal.App.4th at 303. The broker contended that there was no evidence that the client would have continued to hire Little absent the settlement. Id. at 304. The appellate court disagreed because Little presented evidence that the client had consistently hired him for an average of $150,000 of services per year for the previous 8 years and he expected that relationship to continue for at least as long into the future. Id. The client also testified that, after the settlement, he did not intend to hire Little for future work because Little had sued him, and because he had retained a new law firm and did not want to disturb the new relationship. Id. Little’s evidence was not speculative since he proved it through Grupe’s standard of “the past volume of business and other provable data relevant to the probably future sales.” Id. at 305. In like manner, AKM has consistently provided professional services to the City since 1998. - 18 - PLAINTIFF’S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MSJ A214A.4\493311v1 Oo 0 N N O Y Wn 10 11 12 13 14 15 16 17 18 19 20 3 22 23 24 25 26 27 28 AUMF 65. For example, during the 8 year period from 2007-2015, AKM provided over $2.1 million of professional services over that time, for a yearly average of $272,658. AUMF65. After the termination, AKM did not receive any further task orders or on-call contracts from the City; its bid for a new on-call agreement was rejected. AUMF 67. Likewise, AKM expected that relationship to continue into the future at least as long, given the fact that 90 percent of AKM’s business is repeat customers. AUMF 69. This past volume of sales provides non-speculative support for the future sales, per Grupe. This is particularly true in light of the fact that AKM was consistently praised for its work both on Trinidad and on other City projects, consultants are always provided work under these agreements, and they are always renewed. AUMF 78-79. Indeed, Dudek, the construction manager that replaced AKM on Trinidad, and AKM’s competitor, was also the CM on the preceding City public works project known as the WAGS project (which AKM designed for the City). Dudek’s contract was not only renewed in 2016 for $1 million, it was also amended for an additional $500,000. AUMTF 67. Dudek’s On-Call CM Agreement was also renewed at the increased value of $1.5 million in 2018. AUMF 68. In fact, all the consultants who were awarded On-Call CM Agreements in 2018 obtained the increased value of $1.5 million. Jd. AKM also testified that it has experienced a decline in its business since the termination. AUMF 70. In part, that is because AKM cannot bid on certain jobs because of the for-cause termination letter issued by the City. AUMF 71. In Little, the broker further argued that Little could not obtain lost profits from future contracts because he did not bring a claim for interference with prospective contractual relations, only existing contractual relations. Little rejected this argument by citing to the principal from Grupe, supra, 26 Cal.2d at 692, that “when a tort disturbs an established business engaged in sales, the business may recover lost profits from prospective sales.” Little, supra, 202 Cal.App.4th at 304 (emphasis in original). Here, AKM claims interference with both current and prospective contractual relations and there is evidence of lost future sales with prospective customers. The harm to AKM extends beyond its loss of work with from City, but also from other public entities as well. Multiple people, including Travis Hopkins (Director of Public Works) have testified that a termination for cause adversely affects a consultants ability to obtain work froma public entity. AUMF 80. There are jobs that AKM -19- PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MS]J A214A.4\493311vl co 3 O N un A Oo 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 cannot bid on because they were terminated for cause. AUMF 71. Approximately 30-40% of CM project proposals require disclosure of the termination. AUMF 72. When AKM has disclosed the termination, it has never been awarded the project. AUMF 73. AKM has now had to bid on more jobs to maintain the same volume of work they previously received. AUMF 74. On the CM side of AKM’s business alone, it has lost about 10-15 projects per year since the termination. AUMF 75. AKM’s construction management projects range from a low of $20,000-$25,000 to as much as $1 million, with the median around $350,000-$600,000. AUMF 76. 6. STANDING IS NOT A BASIS FOR SUMMARY JUDGMENT HERE Defendants also argue that they are entitled to summary judgment because “AKM does not have standing to sue [them] via tort.” MSJ 10:9-10. Defendants’ erroneous argument lacks legal support. Standing goes to the right to sue for relief on the alleged cause of action. American Alternative Energy Partners II v. Windridge, Inc. (1996) 42 Cal. App.4th 551, 559. The standing requirement ensures that any judgment rendered will protect the defendant from later having to defend against other claimants to the same claim. Keru Invs. v. Cube Co. (1998) 63 Cal. App.4th 1412, 1424. The doctrine of standing is not implicated in this lawsuit. Defendants misinterpret AKM’s lawsuit as one based on the “purported breach of contract by VAS in its contract with the City, to which AKM was not a party, nor an intended beneficiary.” MSJ 9:5-6. In reality, AKM did not bring any contract claims against VAS in connection with the contract between VAS and the City. It is irrelevant that AKM was not a party to the contract between VAS and the City. AKM is suing VAS, in tort, for interfering with and inducing breach of the contract between AKM and the City. A tort action for inducing breach of contract lies only against a stranger to the contract. Applied Equip. Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 513-514. Interference with contractual relationship, a valid agreement must exist between the plaintiff and a third party. Quelimane Co. v. Stewart Title Guar. Co. (1998) 19 Cal.4th 26, 55. Thus, AKM is properly suing VAS, a stranger to the AKM-City contract, for tort damages. Defendants’ reliance on Hatchwell v. Blue Shield of Cal. (1988) 198 Cal.App.3d 1027 is inapposite. In Hatchwell, a husband and wife filed suit against their health insurance company for © -20- PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MSJ A214A.4\493311v] breach of contract, fraud, bad faith conduct by an insurance company, and related claims. Id. at 1029. The couple alleged that the husband was wrongfully denied his healthcare benefits. Id. The appellate court affirmed the grant of summary judgment against the wife on the grounds that she did not have standing to maintain claims against the insurance company because the benefits were allegedly denied to her husband, not to her. /d. The wife argued that she had standing because she was a recipient of dependent health coverage under her husband’s policy. Id. Hatchwell rejected this argument, holding that, while the wife was an express beneficiary with respect to her own health benefits, she was merely an incidental beneficiary with respect to her husband’s health benefits. Id. at 1035. Although not entirely clear, Defendants appear to argue that AKM is suing VAS because VAS breached its contract with the City, and by implication arguing, AKM does have not standing because it was not an intended beneficiary to the VAS-City contract just like the Hatchwell wife was not an intended beneficiary to the contract for her husband’s health benefits. But, Defendants’ argument is flawed. Those are not the facts of this lawsuit. The Hatchwell wife attempted to recover for the injury of another. If she been conferred standing to sue, the insurance company would have been at risk of another claim from her husband, who has the right to obtain relief for the same wrong: the denial of insurance benefits for the husband. AKM is not like the Hatchwell wife because it is not attempting to recover for the wrong experienced by another i.e. the harm to the City when VAS breached its VAS-City contract. Here, AKM is seeking recovery for AKM’s own harm it experienced when VAS interfered with the AKM-City contract. There is no party with standing to recover for AKM’s injury, other than AKM. Ts CONCLUSION Plaintiff AKM Consulting Engineers, Inc. respectfully requests this Court deny the Motions for Summary Judgment filed by Defendants VAS and Mark Artukovich. Dated: March 7, 2019 FERRUZZ EK By: VASKOWR. MI JILLIAN P. HARRIS Attorneys for Plaintiff AKM CONSULTING ENGINEERS, INC. -21 - PLAINTIFF'S CONSOLIDATED OPPOSITION TO: (1) VAS MSJ & (2) MARK ARTUKOVICH MSJ A214A.4\1493311v]