Preview
1 John D. Freed (CA SBN 261518)
DAVIS WRIGHT TREMAINE LLP
2 505 Montgomery Street, Suite 800
San Francisco, California 94111
ELECTRONICALLY
3 Telephone: (415) 276-6500
Facsimile: (415) 276-6599 F I L E D
4 Email: jakefreed@dwt.com Superior Court of California,
County of San Francisco
5 Attorneys for Defendant 08/15/2019
PENGUIN RANDOM HOUSE LLC Clerk of the Court
BY: EDNALEEN ALEGRE
6 Deputy Clerk
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SUPERIOR COURT OF CALIFORNIA
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COUNTY OF SAN FRANCISCO
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10 STEVEN C. WADE, Case No. CGC-19-575575
11 Plaintiff, DEFENDANT PENGUIN RANDOM
HOUSE LLC’S REPLY MEMORANDUM
12 v. IN SUPPORT OF DEMURRER TO
COMPLAINT
13 PENGUIN RANDOM HOUSE LLC
and DOES 1 THROUGH 10, Date: August 22, 2019
14 Time: 9:30 a.m.
Defendants. Dept: 302
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Reservation No. 06190726-07
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Complaint filed May 29, 2019
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REPLY MEMORANDUM IN SUPPORT OF DEMURRER TO COMPLAINT
Case No. CGC-19-575575
1 A. Introduction
2 Steven Wade and Penguin Random House LLC (“PRH”) entered into an Agreement that,
3 under its express terms, “may not be . . . amended [or] modified . . . in any way, in whole or in
4 part, including by operation of law, without the prior written consent of” both PRH and Mr.
5 Wade. (Compl., Ex. A § 11 (emphasis added).) Notwithstanding this requirement, Mr. Wade
6 alleges that the parties orally amended the Agreement, and seeks to enforce the purported oral
7 amendment against PRH. Under Civil Code § 1698(c), however, “[o]ral modifications of written
8 agreements are precluded” where, as here, “the written agreement provides for written
9 modification.” Conley v. Matthes (1997) 56 Cal. App. 4th 1453, 1465 (emphasis added).
10 Mr. Wade’s Opposition to PRH’s Demurrer fails to respond to nearly all of PRH’s
11 arguments, essentially conceding his failure to state a claim. His only argument is that Civil Code
12 § 3399, which explicitly conditions contractual reformation on a mistake existing “at the time” of
13 contracting, somehow covers mistakes arising after contracting. (Opp. at 3.) This novel
14 interpretation of Section 3399, for which Mr. Wade offers no authority, makes no sense—it would
15 allow parties to circumvent Section 1698(c)’s restrictions on oral amendments by casting the
16 parties’ failure to properly amend an already-formed contract as an actionable “mistake.” Mr.
17 Wade is otherwise silent on PRH’s arguments relating to breach of contract, Civil Code § 1698(c),
18 and common count. He indicates no ability to identify an enforceable written amendment to the
19 Agreement if granted leave to amend the Complaint.
20 The Court should sustain PRH’s Demurrer without leave to amend.
21 B. Civil Code § 3399 Does Not Apply.
22 This case has nothing to do with reformation of contract under Civil Code § 3399, which
23 only applies to mistakes existing “at the time” of contract formation. Cal. Civ. Code § 3399.
24 Here, Mr. Wade instead alleges the purported mistake arose “after the contract was signed.”
25 (Compl. ¶ 16 (emphasis added).) Under these allegations, the issue is whether Mr. Wade and PRH
26 amended the Agreement orally during the Agreement’s term. It is not whether the Agreement, as
27 written, reflects a mistake. (See Demurrer at 4-5.)
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REPLY MEMORANDUM ISO DEMURRER TO COMPLAINT
Case No. CGC-19-575575
1 In the Opposition, Mr. Wade contends this argument “misses the point” and that the
2 “mistake came later when the parties agreed to Asteri’s name [sic] to the list but neglected to do
3 so in writing.” (Opp. at 3 (emphasis added).) The problem, of course, is that the terms of the
4 Agreement were fixed as of February 14, 2018, six weeks before Mr. Wade first purportedly
5 mentioned Asteri to PRH. (See Compl. ¶ 6 (“after the contract was signed, Wade made contact”
6 with Asteri, and he allegedly informed PRH of Asteri “[o]n or about March 27, 2018”).) And, as
7 explained further below, the Agreement contains an explicit mechanism for adding potential
8 buyers to its Schedule A: Mr. Wade must have “identified and [PRH] has consented in writing
9 (email to suffice) to include as a potential buyer.” (Compl., Ex. A § 3.b (emphasis added).)
10 It is factually impossible for the alleged mistake to have occurred “at the time” of
11 contracting. The Section 3399 claim fails and cannot be cured on amendment.
12 C. Plaintiff Fails to State a Claim for Breach of Contract.
13 In its Demurrer, PRH demonstrated that where, as here, a contract expressly requires
14 amendments to be in writing, oral amendments are prohibited under Civil Code § 1698(c).
15 (Demurrer at 5-7.) The Agreement could not be more clear. It bars any amendment or
16 modification “without the prior written consent of” both PRH and Mr. Wade. (Compl., Ex. A §
17 11.) And it further specifies that the particular kind of amendment at issue here—addition of a
18 potential buyer to Schedule A—requires Mr. Wade to identify, and PRH to consent, “in writing.”
19 (Id. § 3.b.) Mr. Wade admits there is no writing, stating that he “neglected to do so in writing.”1
20 (Opp. at 3.)
21 Mr. Wade fails to respond to any of PRH’s arguments regarding Section 1698(c), or even
22 mention that statute. (See Opp. at 1-4.) Nor does he respond to the many cases interpreting
23 Section 1698(c) cited in the Demurrer, which uniformly hold that the type of oral amendment
24 claimed by Mr. Wade fails, as a matter of law. (See Demurrer at 6-7.) Mr. Wade thus concedes
25 PRH’s arguments on breach of contract and oral amendment. See People v. Bouzas (1991) 53
26 Cal.3d 467, 480 (failure to respond to an argument is an “apparent[] conce[ssion]” as to its
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Although he contends PRH is attempting to “take unfair advantage” of his “slip-up,” it is Mr.
28 Wade that is trying to unfairly evade the consequences of his own admitted failure to follow the
terms of the Agreement.
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REPLY MEMORANDUM ISO DEMURRER TO COMPLAINT
Case No. CGC-19-575575
1 merits”). Because Mr. Wade fails to proffer any potentially curative facts, the Court should
2 sustain PRH’s Demurrer to the contract claim, without leave to amend.
3 D. Plaintiff Fails to State a Claim for Common Count.
4 The Complaint’s Third Cause of Action is for common count, and seeks the same relief as
5 the Second Cause of action for breach of contract. (See Demurrer at 7 (citing Compl. ¶¶ 4-5).) As
6 shown in the Demurrer, “[w]hen a common count is used as an alternative way of seeking the
7 same recovery demanded in a specific cause of action, and is based on the same facts, the common
8 count is demurrable if the cause of action is demurrable.” McBride v. Boughton (2004) 123 Cal.
9 App. 4th 379, 394-95 (concluding plaintiff’s “common count must stand or fall with his first cause
10 of action” for unjust enrichment). Because Mr. Wade’s contract claim fails, his common count
11 claim fails, as well.
12 Mr. Wade does not respond to PRH’s common count arguments in the Opposition, or even
13 mention this cause of action. He thus concedes his failure to state a claim. Bouzas (1991) 53
14 Cal.3d at 480 (failure to respond to an argument is an “apparent[] conce[ssion]” as to its merits”).
15 E. Conclusion
16 For the reasons explained above, Mr. Wade fails to state a claim, as a matter of law. The
17 Court should sustain PRH’s Demurrer, without leave to amend.
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Dated: August 15, 2019 DAVIS WRIGHT TREMAINE LLP
19 John D. Freed
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21 By:
John D. Freed
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Attorneys for Defendant
23 PENGUIN RANDOM HOUSE LLC
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REPLY MEMORANDUM ISO DEMURRER TO COMPLAINT
Case No. CGC-19-575575
Preview
1 John D. Freed (CA SBN 261518) DAVIS WRIGHT TREMAINE LLP 2 505 Montgomery Street, Suite 800 San Francisco, California 94111 ELECTRONICALLY 3 Telephone: (415) 276-6500 Facsimile: (415) 276-6599 F I L E D 4 Email: jakefreed@dwt.com Superior Court of California, County of San Francisco 5 Attorneys for Defendant 08/15/2019 PENGUIN RANDOM HOUSE LLC Clerk of the Court BY: EDNALEEN ALEGRE 6 Deputy Clerk 7 SUPERIOR COURT OF CALIFORNIA 8 COUNTY OF SAN FRANCISCO 9 10 STEVEN C. WADE, Case No. CGC-19-575575 11 Plaintiff, DEFENDANT PENGUIN RANDOM HOUSE LLC’S REPLY MEMORANDUM 12 v. IN SUPPORT OF DEMURRER TO COMPLAINT 13 PENGUIN RANDOM HOUSE LLC and DOES 1 THROUGH 10, Date: August 22, 2019 14 Time: 9:30 a.m. Defendants. Dept: 302 15 Reservation No. 06190726-07 16 Complaint filed May 29, 2019 17 18 19 20 21 22 23 24 25 26 27 28 1 REPLY MEMORANDUM IN SUPPORT OF DEMURRER TO COMPLAINT Case No. CGC-19-575575 1 A. Introduction 2 Steven Wade and Penguin Random House LLC (“PRH”) entered into an Agreement that, 3 under its express terms, “may not be . . . amended [or] modified . . . in any way, in whole or in 4 part, including by operation of law, without the prior written consent of” both PRH and Mr. 5 Wade. (Compl., Ex. A § 11 (emphasis added).) Notwithstanding this requirement, Mr. Wade 6 alleges that the parties orally amended the Agreement, and seeks to enforce the purported oral 7 amendment against PRH. Under Civil Code § 1698(c), however, “[o]ral modifications of written 8 agreements are precluded” where, as here, “the written agreement provides for written 9 modification.” Conley v. Matthes (1997) 56 Cal. App. 4th 1453, 1465 (emphasis added). 10 Mr. Wade’s Opposition to PRH’s Demurrer fails to respond to nearly all of PRH’s 11 arguments, essentially conceding his failure to state a claim. His only argument is that Civil Code 12 § 3399, which explicitly conditions contractual reformation on a mistake existing “at the time” of 13 contracting, somehow covers mistakes arising after contracting. (Opp. at 3.) This novel 14 interpretation of Section 3399, for which Mr. Wade offers no authority, makes no sense—it would 15 allow parties to circumvent Section 1698(c)’s restrictions on oral amendments by casting the 16 parties’ failure to properly amend an already-formed contract as an actionable “mistake.” Mr. 17 Wade is otherwise silent on PRH’s arguments relating to breach of contract, Civil Code § 1698(c), 18 and common count. He indicates no ability to identify an enforceable written amendment to the 19 Agreement if granted leave to amend the Complaint. 20 The Court should sustain PRH’s Demurrer without leave to amend. 21 B. Civil Code § 3399 Does Not Apply. 22 This case has nothing to do with reformation of contract under Civil Code § 3399, which 23 only applies to mistakes existing “at the time” of contract formation. Cal. Civ. Code § 3399. 24 Here, Mr. Wade instead alleges the purported mistake arose “after the contract was signed.” 25 (Compl. ¶ 16 (emphasis added).) Under these allegations, the issue is whether Mr. Wade and PRH 26 amended the Agreement orally during the Agreement’s term. It is not whether the Agreement, as 27 written, reflects a mistake. (See Demurrer at 4-5.) 28 2 REPLY MEMORANDUM ISO DEMURRER TO COMPLAINT Case No. CGC-19-575575 1 In the Opposition, Mr. Wade contends this argument “misses the point” and that the 2 “mistake came later when the parties agreed to Asteri’s name [sic] to the list but neglected to do 3 so in writing.” (Opp. at 3 (emphasis added).) The problem, of course, is that the terms of the 4 Agreement were fixed as of February 14, 2018, six weeks before Mr. Wade first purportedly 5 mentioned Asteri to PRH. (See Compl. ¶ 6 (“after the contract was signed, Wade made contact” 6 with Asteri, and he allegedly informed PRH of Asteri “[o]n or about March 27, 2018”).) And, as 7 explained further below, the Agreement contains an explicit mechanism for adding potential 8 buyers to its Schedule A: Mr. Wade must have “identified and [PRH] has consented in writing 9 (email to suffice) to include as a potential buyer.” (Compl., Ex. A § 3.b (emphasis added).) 10 It is factually impossible for the alleged mistake to have occurred “at the time” of 11 contracting. The Section 3399 claim fails and cannot be cured on amendment. 12 C. Plaintiff Fails to State a Claim for Breach of Contract. 13 In its Demurrer, PRH demonstrated that where, as here, a contract expressly requires 14 amendments to be in writing, oral amendments are prohibited under Civil Code § 1698(c). 15 (Demurrer at 5-7.) The Agreement could not be more clear. It bars any amendment or 16 modification “without the prior written consent of” both PRH and Mr. Wade. (Compl., Ex. A § 17 11.) And it further specifies that the particular kind of amendment at issue here—addition of a 18 potential buyer to Schedule A—requires Mr. Wade to identify, and PRH to consent, “in writing.” 19 (Id. § 3.b.) Mr. Wade admits there is no writing, stating that he “neglected to do so in writing.”1 20 (Opp. at 3.) 21 Mr. Wade fails to respond to any of PRH’s arguments regarding Section 1698(c), or even 22 mention that statute. (See Opp. at 1-4.) Nor does he respond to the many cases interpreting 23 Section 1698(c) cited in the Demurrer, which uniformly hold that the type of oral amendment 24 claimed by Mr. Wade fails, as a matter of law. (See Demurrer at 6-7.) Mr. Wade thus concedes 25 PRH’s arguments on breach of contract and oral amendment. See People v. Bouzas (1991) 53 26 Cal.3d 467, 480 (failure to respond to an argument is an “apparent[] conce[ssion]” as to its 27 1 Although he contends PRH is attempting to “take unfair advantage” of his “slip-up,” it is Mr. 28 Wade that is trying to unfairly evade the consequences of his own admitted failure to follow the terms of the Agreement. 3 REPLY MEMORANDUM ISO DEMURRER TO COMPLAINT Case No. CGC-19-575575 1 merits”). Because Mr. Wade fails to proffer any potentially curative facts, the Court should 2 sustain PRH’s Demurrer to the contract claim, without leave to amend. 3 D. Plaintiff Fails to State a Claim for Common Count. 4 The Complaint’s Third Cause of Action is for common count, and seeks the same relief as 5 the Second Cause of action for breach of contract. (See Demurrer at 7 (citing Compl. ¶¶ 4-5).) As 6 shown in the Demurrer, “[w]hen a common count is used as an alternative way of seeking the 7 same recovery demanded in a specific cause of action, and is based on the same facts, the common 8 count is demurrable if the cause of action is demurrable.” McBride v. Boughton (2004) 123 Cal. 9 App. 4th 379, 394-95 (concluding plaintiff’s “common count must stand or fall with his first cause 10 of action” for unjust enrichment). Because Mr. Wade’s contract claim fails, his common count 11 claim fails, as well. 12 Mr. Wade does not respond to PRH’s common count arguments in the Opposition, or even 13 mention this cause of action. He thus concedes his failure to state a claim. Bouzas (1991) 53 14 Cal.3d at 480 (failure to respond to an argument is an “apparent[] conce[ssion]” as to its merits”). 15 E. Conclusion 16 For the reasons explained above, Mr. Wade fails to state a claim, as a matter of law. The 17 Court should sustain PRH’s Demurrer, without leave to amend. 18 Dated: August 15, 2019 DAVIS WRIGHT TREMAINE LLP 19 John D. Freed 20 21 By: John D. Freed 22 Attorneys for Defendant 23 PENGUIN RANDOM HOUSE LLC 24 25 26 27 28 4 REPLY MEMORANDUM ISO DEMURRER TO COMPLAINT Case No. CGC-19-575575