Motion-Secondary: BENTLY BIOFUELS COMPANY LLC DBA BENTLY BIOFUELS VS. K. DAVID FISHER et al

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1 || SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
A Limited Liability Partnership
2 Including Professional Corporations
RONALD J. HOLLAND, Cal. Bar No, 148687 ELECTRONICALLY
BABAK G. YOUSEFZADEH, Cal. Bar No. 235974 FILED
DORNA MOINI, Cal. Bar No, 287115 Superior Court of Caltfornia,
4|| Four Embarcadero Center, 17!" Floor County of San Francisco
san Francisco, California 94111-4109 12/23/2014
hone: 415.434.9100 Clerk of the Gourt
simile: 415.434.3947 .
rholle dsheppardmullin.com Deputy Clerk
| byousefzadeh@sheppardmullin.com

)sheppardmullin.com

8 || Attorneys for Plaintiff
BENTLY BIOFUELS COLLECTION SERVICES LLC d/b/a BENTLY
9 || BIOFUELS COLLECTION SERVICES, LLC,

0
SUPERIOR COURT OF THE STATE OF CALIFORNIA
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COUNTY OF SAN FRANCISCO
12
3 /
BENTLY BIOFUELS COMPANY LLC d/b/a | Case No. CGC-13-535864
4//B LY BIOFUELS COLLECTION |
SERVICES, LLC, | PLAINTIFF’S MEMORANDUM OF
15 | POINTS AND AUTHORITIES IN
Plaintiff, | SUMMARY JUDC T OR, IN THE
6 ALTERNATIV AMARY
v. | ADJUDICATIOD
7 }
K. DAVID FISHER; 3D OIL&GREASE, | Date: March 12,2015
18 || LLC; and DOES 1-25, inclusive, | Time: 9:30 a.m.
| Department; 302
9 Defendants. | Reservation No. 121714-09.
9 |
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SMBH ASSSOISOR.S PLAINTIFF'S MPA ISO MOTION FOR SUMMARY JUDGMENT~~

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I. STATEMENT OF FACTS. ...cccccsssessscoeseseneseess sosensesesenetsareneusersunecunreavernsnsenseses seneteneseenene 2
A. Fisher Entered Into-A Severance Agreement With Got G Grease In » Which H He
Agreed Not to Harm Got Grease or Bently... ssteavenie 2
B. Fisher Entered Into An Employment Agreement With Bently In Which He
Agreed Not to Disclose Confidential Information and Not to Misappropriate
Company Property....cscssesssscnescsnessrensnessunrerencssunenneesennecensecensennerenasess a eeqanedsaiqnasiniee 3
c. Bently’s Customers Entered Into Exclusive Contracts With Bently Which
Bound Them For 12-Month Renewable Terms, and Explicitly Stated That
The Oil Became Bently Property Upon Being Placed into the Bins... seen Dd
D. Fisher Acquired and Was Trusted With Confidential Information During
His Employment With Got Grease and Bently. 4
EL After Termination From Bently, Fisher Began Impersonating a Bently
Employee and Misappropriating Bently’s Confidential Customer
Information ‘To Steal Its Used Oi! and Collection Bins, And Solicit Bently’s
CUSLOMETS. .cs.cccceesiceseeeeseesesneesesceensesiessenscensansnstonettensantaneurnscensnernsnaaneateaeenensranaressertans 5
FE, The California Department of Food And Agriculture Has Labeled Fisher A
“Violator” And Revoked His License To Collect Used Cooking Oil... seen 8
G. Bently Successfully Obtained A Prejisninary ‘Tajinetion Against F Fisher,
Which Fisher Continues to Disregard. ... artosnaaede sinkicreedoseene D
UL THIS COURT'S! SHOULD G GRANT PLAINTIEE'S MOTION FOR SUMMARY
A. There are no Triable Issues of Material Fact With Respect to Bently’s First
Cause of Action for Breach of Contract. .......-..cccceessecsesstesetteteneecsernsenneseeesstnaneanes 10
B. There are no Triable Issues of Material Fact With Respect to Bently’s
Second and Third Causes of Action for Inducing Breach of Contract and
‘Tortious Interference With Contractual Relations .........-cesiesssneeesstieeenenecennnes 12
Cc. There Are no Triable Issues of Material Fact With Respect to Bently’s
Fourth Cause of Action for Tortious Interference with Prospective ]
Economic Advantage . ceesentenatenneentretsrenteersnerenreeaeseeessee 14
D. There Are no ‘Triable Issues of Material Fact With Respect to Bently’s nih
Cause of Action for Conversion... eo LS
E. There Are no Triable Issues of Material Fact With Respect to Bently’s Sixth
and Seventh Causes of Action for Fraud and Negligent Misrepresentation ....0... 16
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SMRH:435503568.5 PLAINTIFF'S MPA ISO MoT TON FOR SUMMARY JUDGMENT

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‘There Are no Triable Issues of Material Fact With Respect to Bently’s
Eighth Cause of Action for Business and Professions Code 17200....0ccses wie 17

1. CONVERSION ssessssessseesssenerevensssovnconsesesarsnunensnsnensesnnccnnoneneeesvecsseesnneneereanreensenrs LB
2. Misappropriation of Trade Secrets .....scse-ssccsscsessceseesnsnesessniessnsnneessseeesne 18
3. Misrepresentation .......2ccccseccecsueentsenecsesnessecsssssneceneonensceanennauenesnnenneeats cesses 19
4, Operating without Legally Mandated Licenses and Falsified Records.......20

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SMRH433503568,5

PLAINTIFF'S MPA ISO MOTION FOR SUMMARY JUDGMENTC0 DR DDH & BW NH

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‘TABLE OF AUTHORITIES

Federal Cases Page(s)
TMX Funding, Inc. vy. Impero Technologies

2010 ULS. Dist. LEXIS 37064 (N.D. Cal. March 18, 2010) ....ccsssesscssseescuseeeesnecssnnseesenaeseseen ML
State Cases Page(s)
1-800 Contacts, Inc. y. Steinberg:

107 Cal. App. 4th 568 (2003)... sangubaenaueedeveseorsbunsonnnnanconuseenesrencoongsnnnaeeysagnersanestatsastands 12
Aguilar v. Atlantic Richfield Co.

25 Cal. 4th 826 (2001). . antennae sess 9
Barquis v. Merchants Collection Assn.

T Cal. 3d 94 (1972). .ccsersrecseeieceetenreniers a cduhnntigsbinatnnvesiesacehenwenconteenestesteesinandinaeess snseiensban saseaters 18

Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co.
20 Cal 4th 163 (1999), ..ccsersessesseseneesnecsesenessessnearnesneustenssnsssnscsisanneanesnsssnenattnsernceenenneteacterenyace 17

Consumer Cause Inc. v. SmileCare
91 Cal. App.4th 454 (2000) ..cecsssseeereessnnrcencsonnens

Courtesy Temp. Service, Inc. v. Camacho
222 Cal. App. 3d 1278 (1990)... asvsvuvertaveniniissverbabertesenensenrert meeeegvesterenaseente veer LL, 12, 19

Davis v. Naedrich
174 Cal. App. 4th 1 (2009)...

Della Penna vy. Toyota Motor Sales, U.S.A.

Farmers Ins. Exch. v, Superior Court

2 Cal. 4th 377 (1992)...sccsscssrerasvenerentennseneenssnne eateeeestentens conestsasenshesieseneisssisauesusinaaanrasinesaticete 18
Fischer v. Machado
50 Cal. App-Ath 1069 (1996) ices lucdaiescnvansestenecitansannnesanentnes cessenteeeesreae ceveeseeesestenses 16

Fremont Indem. Co. v. Fremont Gen. Corp.
148 Cal App.Ath 97 (2007) ecscessssseesssssnreeecssnpnnccnnsncnineesennsnecensnnnnanensseevinanieensennansseenesanensss 16

Friedman vy. Merck & Co.
107 Cal. App, 4th 454 (2003) .uessssesssseersrcnen

Haigler y. Donnelly /
TB Cal. 2d 674. (1941 )iscccssescsversssccsscoesnmesastnnsssennsessonnsessensoneneaneccartcesnecnnces isetasretssennatietsennenanes 16

Hartford Financial Corp. v. Burns (1979)
96 Cal. App. 3d 591...

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State Cases Page(s)

Korea Supply Co. v. Lockheed Martin Corp.
29- Cal. 4th 1134 (2003) .secesscstrvssaisccosmneccssnsveennsrneeceeniensenennveemnssamenaaes 14, 1S, 19

Mikesell

69 Cal. App. 4th at 1150 18
Morton v. Morton

148 Cal. 142 (1905). .cecesssesceeeeseeeneenesien ssengenseustuctnehinenerecsnenete cenasatenenasanenerasnsesnenerseeaeanseveeneses 19

Pacific Gas & Electric Co. y. Bear Stearns & Co.
50 Cal. 3d 1118 (1990)... wi.

Philipson & Simon v. Gulsvig
154 Cal.App.4th 347 (2007),

Podolsky v. First Healthcare
50 Cal. App. 4th 632, 647-648 (1996) c..osseccessmesseeeneseecerennneneenenennanesent aestiseenan sisasadonnies 19

Quelimane Co. v. Stewart Title Guaranty Co.

Ralph Andrews Prod., Inc. v, Paramount Picture Conporation
222 Cal. App. 3d 676 (1990) sssessersnscaisssensssneesssnnseneescennsunanersuannraneesenaneceetensnasestenenanacesesssss 19

Readylink Healthcare vy. Cotton

126 Cal. App. 4th 1006 (2005). 11,12,
||| Reeves v. Hanlon
33 Cal. 4th 1140 (2004)... soounesensseecnneceen sonassensennenesancensseivedsneiininidevandl acer! eigen siangosees 15
Reichert v. Gen'l Ins, Co. of Am.
68 Cal.2d 822 (1968).. sabnastensioeasonnnensbnvessennnaneshunsernaged sessuseeeunensnnaneensens sevsseessannaees 10

Rochlis v. Walt Disney Co.
19 Cal. App. 4th 201 (1993) ssessssssssssisscssscesccessssssssnshenansntecseereetesesestnnnnnnansetsneeesecssssssssnsanensnesassse 9

Sanders v. Magill
9 Cal. 2d 145 (1937) .secssesssesssnmesessnsessoneensnsescsnnssenssnsessovseccansacennnsceannnecenaarsnnanceeansaranansanstisns 13

Sangster v. Paetkau
68 Cal. App. 4th 151,162-163 (1998)...

‘|| Santa Ana Unified School Dist. v. Orange County Dev. agenty

90 Cal, App. 4th 404 (2001) ..sssssesssesinssneeeeenns ssavtarsessovennepveneontsnnanannnennnsiosssnitiD

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SMRH435503568.5 PLAINTIFF'S MPA ISG MOTION FOR SUMMARY JUDGMENT2 me DN DH & BH BM

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State Cases Page(s)

Seaman's Direct Buying Service Ine. vy, Standard 0 Oil Co.
36 Cal. 3d 752 (1984)... suv

intivnsahoninsesnishessressneisininientnsisinerssitnenns 1D, 1

Whyte v. Schlage Lock Co. iy.

101 Cal. App. 4th 1443 wee i

State: Statutes, Rules, Regulations, Constitutional Provisions Page(s)

Business and Professions Code § 17200 ef, 869. c..s:crcsecseserssnmssssennnerecrreeesesnsenes 155.17, 18, 19
Cal. Food & Agr. Code § 19310 crcsssssssseneesneees coscensarensenaveceet coesereraneesnnenneyenenennies aapebiseseivisousnttione 8
Cal. Food & Agr. Code § 19310(a).

Cal. Food & Agr, Code § 19313 sscnsteeustscsctieneeneietntiestetiisntieistieeenatirenatnteenase 8, 20
Cal. Food & Agr. Code § 19313.1 eccusnees eceeeneenenne osvntentnnnnenennennnne ecisntnesstee, 20
Cal. Food & Agr. Code §19313.5 cscussneneneeiniiitstineesuinitinetinicnnennunansnsn 820
Cal, Food & Agr. Code §§ 19313.5-19314 .cccssenenenntinentitstenitsnstctnnesnntsensennensnie 20
CEP § 437e(p)(1)
Civ, Code § 3426 €f, 8, sesssnnseuneueneutinteitninitnsntisiitstntcitenansanannnanennnnens 18

Civ. Code § 3246.1(d) sesssssssststesssessersnnsesssocnteesesmansoneseesersntnsscteneramunssssecasensersanennareesernnnnatersnens EI

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SMRH435503568.5 PLAINTIFF'S MPA ISO. MOTION FOR SUMMARY JUDGMENT1. INTRODUCTION

Plaintiff Bently Biofuels Company d/b/a Bently Biofuels Collection Services, LLC
(“Bently”) brings this Motion for Summary Judgment, or in the Alternative, Summary
Adjudication (“Motion”), against Defendant K. David Fisher (“Fisher”) and his company 3D
Oil&Grease (“3D”) in response to Defendants’ actions in (1) breaching their contract with Bently
and inducing Bently’s customers to do the same, (2) stealing Bently’s used oil and bins placed on
customer property, (3) misleading Bently customers into believing that 3D employees affiliated
with Bently, and (4) unfairly competing with Bently through the same activities, and by operating
without the required licensing from the California Department of Food and Agriculture (*CDFA”),

Defendant Fisher is. a former employee of Got Grease, LLC (“Got Grease”), a company
that Bently acquired in Fall 2013. Bently’s business is collecting used cooking oil and grease
(used oi!” or “UCO”) from businesses (¢.g., restaurants), which it then converts to biofuel. Upon
purchasing Got Grease, Bently hired Fisher (then a Got Grease employee) to continue providing
driving and oil pickup services to customers. Fisher's position required him to have access to
Bently’s confidential and proprietary information, including knowledge of its customer lists and
contact information, special needs, and procedures and methods of finding and servicing them.

Shortly after the acquisition, Fisher was terminated from Bently for insubordination, and
he formed a new company, 3D. Though terminated, Fisher continued to visit Bently’s customers
wearing the same uniform he had worn throughout his employment with Bently, misrepresented
himself‘as still affiliated with Bently, took the oi! in Bently’s bins on customer sites, and later took
Bently’s collection containers themselves, replacing them with his own collection bins. The used
oil stolen from Bently was sold for a profit to further 3D*s business. and the bins were either
stolen or altered by Fisher and 3D, all in a coordinated effort to unlawfully compete with Bently.

Asa result of his unlawful activities, much of which is documented by video, the CDFA
fined Fisher and 3D, placed Fisher on its “violators list,” and refused to issue him or 3D a permit
to continue their used oil collection services as of February 2014. Notably, despite not being able
to do so legally, Fisher (through 3D) has continued to illegally perform used oil collection services
throughout 2014, thereby further unlawfully and unfairly competing with Bently.

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SMREEA35503568.5 PLAINTIFF'S MPA ISO MOTION FOR SUMMARY JUDGMENT|| SMREDISS503568°5°——— ~~ BLAIS
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In addition to the above, Defendants have also used, and continue to use, Bently’s
confidential and proprietary information to unfairly compete with Plaintiff. The cooking oil
business is a specialized industry with a discrete pool of customers that is highly competitive. As
such, Bently zealously guards its confidential information, and prohibits its employees from
disclosing that information, or using it for their own profit. Despite entering into a binding
agreement not to use or disclose Bently’s confidential information, following his termination
Fisher began using that information to steal cooking oil from Bently’s customers and to reroute
their business to 3D. Fisher admitted that information he used in this manner included customer
lists and contact information, rates, special needs, and other information not publicly available.
Some of these customers were unaware that Fisher was no longer affiliated with Bently. Other
customers that he solicited had exclusive 12-month contracts with Bently, which he knew about.

in light of the foregoing, near the beginning of these proceedings, Bently sought and
successfully obtained a Preliminary Injunction against Defendants from this Court. However,
even after obtaining this Preliminary Injunction, and even after the CDFA revoked their license for
the transportation of used oil, Defendants have continued their unlawful conduct, which continues
to cause both monetary and reputational harm to Bently.

Il. STATEMENT OF FACTS
A. Fisher Entered Into A Severance Agreement With Got Grease In Which He
Agreed Not to Harm Got Grease or Bently.

Prior to his employment with Bently, Fisher was employed by Got Grease as a truck driver
for about 6 years, Undisputed Material Fact (“UMF™) 1. In August 2013, Bently purchased Got
Grease’s business assets pursuant to an Asset Purchase Agreement (“APA”), through which

Bently acquired Got Grease’s goodwill, customer lists, customer accounts, contract rights,

agreements, and proprietary data. UMF 2. Under the APA, all assets, customers, agreements, and

goodwill of the Got Grease business now belong to Bently. UMF 3. Atthe end of his employment

with Got Grease, Fisher signed a Settlement Agreement and Release with Got Grease, through Got
Grease’s former owners, in which he agreed both that (1) he would “return[] all property and
information that belongs to the Company, including ... information about the Company's
practices, procedures, trade secrets, customer lists, or product marketing.” UMF 4. Fisher also

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TiFF'S MPA ISO MOTION FOR SUMMARY JUDGMIagreed that he would not “act in any manner that might damage the other party.” ld.
B. Fisher Entered Into An Employment Agreement With Bently In Which He
Agreed Not to Disclose Confidential Information and Not to Misappropriate
Company Property

Upon hire at Bently, on August 30, 2013, Fisher signed an Employment Agreement in
which he agreed: (1) not to disclose Bently’s proprietary or confidential information, (2) to abide
by all Company policies, including those in the Employee Handbook, and (3) not privately use,
misappropriate, or destroy Company property. UMF 31, 36, 38.

Under the terms of the Employment Agreement, Fisher agreed that all proprietary or
confidential information, including “customer lists, procedures. ... documents ... materials and
products are the sole property of [Bently] and are confidential,” and that he would not disclose
such confidential information for three years after his separation from Bently. /d. Fisher also
agreed that all intellectual property, including trade secrets, techniques and processes. made or
conceived during the period of his employment are the sole property of Bently, as follows:

{ agree that all intellectual property such as ... trade secrets, techniques and processes

_.. made or conceived .., during the period of my employment, which relate to or result

from the actual ... business, work, or research and development of the company are and
shall remain the sole property of [Bently]. Jd.

All Bently employees with access to confidential information must sign such agreements

as Bently relies on this information to run its business, and seeks to protect its processes, rates, and

the special needs of each of its customers from disclosure. Luri Dec., 3, Exh, A.' The Employee
Handbook also specifically required Fisher to keep Bently’s confidential information private and

not to “use confidential information for unethical or illegal advantage.” UMF 35. This includes:

“Customer lists and histories, sources of supply, pricing data, marketing data and strategies.” Jd.

Finally, by signing the Employment Agreement, Fisher agreed that “all work materials ...

are for the sole use and operation of the Company and that any

supplies, parts, [and] products

private use, abuse, misappropriation or destruction” of Company property is prohibited. UMF 36.

c. Bently’s Customers Entered Into Exclusive Contracts With Bently Which

supporting or background facts that are not “material facts” are not included in the separate
statement of undisputed material facts, and cited directly in this brief.

3.

SMLAISSOISORS PLAINTIFF'S MPA ISO MOTION FOR SUMMARY JUDGMENTBound Them For 12-Month Renewable Terms, and Explicitly Stated That The
Oil Became Bently Property Upon Being Placed into the Bins.

Fisher’s job duties with Got Grease, and then at Bently, primarily involved collecting used
cooking oi! from customers in the Bay Area. UMF 5. The used cooking oil was stored in Got
Grease and Bently bins on customers’ premises until Got Grease and Bently collected it. UMF 29,
68. Got Grease had oral and written agreements with its customers to provide this service. UMF

13,45.

pon acquiring Got Grease, these agreements belonged to Bently. UMF 2.

After taking over, Bently entered into collection services agreements with many of its
customers. UMF 47. Those agreements appointed Bently as the exclusive provider for collection
of used oil for specified time periods. Jd. Some contracts were entered into “for an initial term of
12 months” and automatically renewed for another 12 months unless either party notified the other
by 60 days’ written notice of their intent not to renew. UMF 10, 27, 48-49. These contracts
explicitly state that the customer appointed “Bently as the exclusive service provider for the
collection ... of all Used Cooking Oil or Inedible Kitchen Grease.” /d. Other contracts state that
they “shall be in place for two years and will renew on a month-to-month basis after the two-year
term. UMF 47-48. Bently had written contracts with at least 29 customers, which were and are
currently in effect. UMF 50. Fisher admits that most of Got Grease (and Bently) customers were
under some form of oral or written contract. UMF 13, 45, 51, 62. There is also no dispute that all
of these agreements were acquired by Bently as part of its APA. UMF 2.

Moreover, Bently supplies its customers with on-site collection containers to store used oil
pending Bently’s pickup of the oil. Jd. Under the terms of the Collection Agreements, “All
containers, and any UCO deposited into these are the property of Bently and shall not be removed
... except with Bently’s advance written approval.” UMF 37. Thus Bently’s containers, and any
used oil placed inside of Bently’s containers, rightfully belong to Bently. Id.

D. Fisher Acquired and Was Trusted With Confidential Information During His
Employment With Got Grease and Bently.

in addition to used oil collection services, Fisher's job duties at Got Grease and Bently also
included sales, promotions and management. UMF 5. Got Grease dedicated a significant amount

of time and resources to compiling its customer lists, procedures and rates over a period of several

SMRILAISSOIS68.S ~ PLAINTIFF'S MPA ISO MOTION FOR SUMMARY JUDGMENT| SMAIEATSSOISESS — ~~ PLAINTIE

years. UMF 6. The Company had full-time personnel whose primary job it was to identify new
customers and manage existing accounts. UMF 7. Got Grease also developed a method to review
new restaurants’ menus online in order to determine whether the restaurant was of a type that
would generate used cooking oil and might need Got Grease’s services. UMF 7. Further, as
stated in customers’ oil-collection agreements, the rates and conditions agreed upon in those
agreements were required to be kept confidential. UMF 10.

While working for Got Grease and Bently, Fisher routinely visited the same customers.
Fisher Depo. 37:1-10; 214:17-20. Fisher therefore became aware of Got Grease’s and Bently’s
customers, their contact information, their special needs and preferences, their availability and

pick up schedules, and their pricing rates with Bently. UMF 8. Fisher also became aware of

where customers kept their bins, the size of their bins, how much removal they would need, and
how frequently they needed the oil serviced. /d. Fisher also knew how frequently customers
needed their oil serviced and the time of day to visit customers so as not to disturb operations. /d.
Additionally, in his capacity as doing sales and promotions for Got Grease, Fisher also entered
into oil collection services agreements with customers on behalf of Got Grease, and negotiated
rates with customers. UME S, Fisher admitted that some of this information, such as customer
preferences and rates, was not publicly available. UMF 9.

In order to provide continuity to its customers, Bently assigned Fisher to work with the
same customers he had worked with at Got Grease. Luri Dec., 4. While providing used oil
collection service to these customers, Fisher wore a Got Grease uniform that identified him to the
customers as an employee of the Company. UMF 15, 18, 55.

E. After Termination From Bently, Fisher Began Impersonating a Bently

Employee and Misappropriating Bently’s Confidential Customer Information
To Steal Its Used Oil and Collection Bins, And Solicit Bently’s Customers.

Fisher's employment at Bently was terminated for poor performance and insubordination
on September 6, 2013. Fisher Depo. 169:15-23. On September 24, 2013, Fisher established a
legal LLC entity, 3D, of which he is the principal and founding member. UMF 11. He has been
operating an oil and grease vacuum truck to collect used oi] and grease with his new company 3D

since October 1, 2013. UMF 12. Notably, 3D and its truck did not have the proper licenses or

§ MPA ISO MOTION FOR SUMMARY JUDGMENTCO DB a Ow WH & BD Rm

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decals from the CFDA to provide used oil collection until October 29, 2013, almost a month after
he had already begun unlawfully providing such services. UMF 42-43.

Fisher “admits that 3D OIL&GREASE competes with BENTLY.” UMF 41. Fisher
further admits and is aware that the customers he serviced while working for Bently are Got
Grease or Bently customers. UMF 13. He also knows of the existence of both oral and written
contracts that Got Grease/Bently had with these customers. UMF 13, 45.

Notwithstanding the foregoing, Fisher continued to service many of these customers after
his termination, misleading some to believe that he was affiliated with Bently/Got Grease. UMF
14. In collecting used oil from Bently’s customers, Fisher wears the same uniform that he wore at
Got Grease (and Bently), except that his current uniform does not have the logo. UMF 15 (It
jooks similar but it was not a Got Grease uniform”). Fisher also kept the same cell phone number
that he had used with Got Grease and Bently, UMF 16. This was the same number that customers
called him on when he was employed by Got Grease/Bently, and through which he helped resolve
customer issues. UMF 16. Fisher also took Robert Dently, a former Bently employee, with him,

to service Got Grease/Bently customers, while Dently wore a Bently uniform. UMF 17.

Photographs reveal that, while working for 3D, Dently wore the same uniform he wore as with
Bently. UMF 17. A picture of Dently next to Fisher shows the nearly identical uniforms. UMF 18.
Fisher is aware that the foregoing — including the near identical uniform, accepting of calls
on his prior Got Grease cell phone, and concealment of the nature of his relationship with Bently —
causes Bently’s clients confusion that Fisher is affiliated with Got Grease/Bently; in fact, he
admitted at his deposition that customers were confused when he serviced them “a couple times, A
few times.” UME 19. Specifically, he stated that he was aware that employees of at least one
customer, Limon restaurant, were confused and believed he was a Got Grease employee. UMF 19.
Further, Fisher has admitted to several instances of theft of Bently property. For example,
Fisher admitted that 3D “collected used cooking oil ... stored in collection bins or containers with
GOT GREASE or BENTLY logos on them.” UME 29. He also admitted that he “swapp[ed] out”
Bently’s collection bins for his own containers. UMF 68. According to his own testimony, he then:
abandoned these bins behind an industrial complex that does not belong to Bently. UMP 69.

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SRaRITIISSONIONS PLAINTIFF'S MPA ISO MOTION FOR SUMMARY JUDGMENTwn

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And there are numerous examples of third parties witnessing Defendants’ acts of theft. For
example, on October 6, 2013, Fisher was observed stealing used oil from a Got Grease collection
bin at Bently customer, Limon’s property, UMF 54. Notably, the theft occurred via a truck
without transporter registration, DOT number, California Motor Carrier identification, or other
company identifying information as required by transporter rules. /d. Indeed, from October 2013
to present, Defendants have stolen oil out of the Company’s collection bins from at least /wenty-
nine of Bently’s customers and often misrepresented himself to those customers as an agent or
employee of the Company. UMF 53, 55. By way of another example, in October 2013, Fisher
wore a Got Grease uniform, represented himself as a Got Grease employee employees at another
restaurant, Tempest, and subsequently stole used oil from Bently collection bins. UMF 55,

In November 2013, Fisher stole cooking oil out of Bently’s containers located at three
more customers’ sites (Swiss Louis, Hook & Cook, and Chowders) and also stole the containers
themselves, replacing them with 3D bins. UMF 56. On November 21, 2013, two 55-gallon barrels
at the Palace Hotel were found missing; in their place, there were two. 3D barrels. UMF 57.

Again, on February 7, 2014, Fisher and his cousin, Dentley, stole cooking oil out of
Bently’s containers at three more locations. Again, they also stole Bently’s collection barrels from
those locations and replaced them with 3D barrels. UMF 58-59. Also on February 7, 2014, Fisher
was observed with another person driving a truck labelled “California Alternative By Products.”
id. The other suspect was wearing a black jacket with a Bently Biofuels logo, and the two men
drove around and picked up grease at Bently’s customers. Jd, On this day, Fisher rolled out a
blue container with a “Got Grease” logo on it from Limon Restaurant and, as described in the
investigator report:

Subject #2 lifted and placed the “Got Grease” drum on to the Penske truck...[Fisher] then
appeared to grab a hose from the grease truck and unloaded grease into his drum before
he rolled the drum back into restaurant ... As white male looked on, [Fisher] began to
peel off the “Bentley BioFuels” sticker. The white male then took off the a 2nd “Bentley
Bio Fuels” sticker and placed the stickers in a nearby wrashcan. (Fisher] then placed the
black 55 gallon onto the Penske box truck and walked out of view, UMG 59.

On June 15, 2014, Bently’s private investigator again observed and documented Fisher

vacuuming used oil out of a collection bin with a Bently logo, while other Bently bins were found

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PLAINTIFF'S MPA ISO MOTION FOR SUMMARY JUDGMENTw

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missing. LMF 60, These are only a representative number of examples from the investigator's
reports regarding Fisher’s theft and misappropriation of Bently’s containers and used oil.

Notably, these actions angered customers, who have complained to Bently on multiple
occasions. UMF 61. For example, one of Bently’s customers called Bently, furious, to complain
it was being paid much less than expected under its contract with Bently; since customers are paid
per gallon of used oil, and Fisher had stolen the oil from Bently’s bins, the customer was paid for
less used oil than expected. UMF 61. This unlawful activity has also resulted in loss of business,
difficulty attracting new customers, and difficulty retaining current customers. UMF 20.

Fisher’s continued his acts of theft and destruction of property have been documented by

both Bently’s private investigator and Bently’s own employees. UMF 21. Many of Defendants”

wrongful acts were documented by video and photograph by Benily’s private investigator, the full
reports for which are provided to the Court. See generally Siragusa Dec.

F. The California Department of Food And Agriculture Has Labeled Fisher A
“Violator” And Revoked His License To Collect Used Cooking Oil.

The CDFA, which licenses entities engaged in the oil collection business, recently labeled
Fisher a “violator” of the Food and Agriculture Code and refused to renew his license to collect
used cooking oil because of his unlawful activities. UMF 77. The CDFA determined that Fisher
violated several statutory mandates, including the mandate that no person shall “steal,
misappropriate, contaminate, or damage inedible kitchen grease, or containers thereof.” /d.; see
Food & Agr. Code §§ 19310, 19313, 19313.5. In short, the CDFA has found that Fisher has
unlawfully stolen or misappropriated used oil and bins from others, including Bently. See id.

Further, Fisher has admitted that he started collecting oil without obtaining the required
CDFA license. UMF 75-76. For example, On October 6, 2013, Fisher provided grease trap
services to Limon restaurant, but did not have a CDFA license as required by law. Zé. Fisher also
admitted that he transferred oil to Hanford Commodities with a falsified license from another

company, KB Grease, because he and 3D did not have the proper licensing or decal. UMF 78, He

admitted that collecting used oil without the proper license was unlawful, but he did not wait to

get this license (and operated without legal authority) because he did not want to lose customers.

'§ MPA ISO MOTION FOR SUMMARY JUDGMENTPn a a
SMRH435503568.5

UMF 79. Indeed, Fisher has been operating without-a license since February 2014, UMF 80.

G. Bently Successfully Obtained A Preliminary Injunction Against Fisher, Which
Fisher Continues to Disregard.

Based on the strength of its evidence, Bently moved fora Preliminary Injunction against
Defendants. On April 15, 2014, the Court granted Bently’s Motion, enjoining Fisher or any other
3D employee from (1) misrepresenting themselves as having any current affiliation with Bently or
Got Grease, (2) wearing Bently or Got Grease uniforms, (3) moving or altering Bently or Got
Grease oi! collection containers without Bently’s written permission, (4) collecting oil from Bently
or Got Grease containers without Bently’s written permission, or (5) collecting oil from any oil
collection container that 3D employees know are intended to be collected by Bently. Moini Dec.,{]
11. Fisher continues to disobey the injunction through the continued misconduct described above.

I. THIS COURT SHOULD GRANT PLAINTIFF’S MOTION FOR SUMMARY
JUDGMENT.

In moving for summary judgment or adjudication, the plaintiff bears the initial burden of
making a prima facie showing that each element of his causes of action is satisfied. CCP §
437c(p)(1); Aguilar v. Atlantic Richfield Co., 25 Cal. 4th 826, 850-851 (2001). To satisfy this
burden, a plaintiff is not required to disprove or negate the defendant's pleaded affirmative
defenses. Consumer Cause Inc. y. SmileCare, 91 Cal.App.Ath 454, 468 (2000), Once the plaintiff

produces evidence that would require a reasonable trier of fact to find in its favor under the

applicable standard of proof, the burden shifts to the defendant to demonstrate the existence of a
triable issue of material fact in order to avoid summary adjudication. CCP § 437c(p)(1); Aguilar
y. Atlantic Richfield Co., 25 Cal. 4th 826, 850-851 (2001). The defendant may not rely upon the
mere allegations or denials of its pleadings to show a triable issue of material fact, but must set
forth specific facts supported by admissible evidence. CCP 437¢(p)(1): Santa Ana Unified School
Dist. v. Orange County Dev. Agency, 90 Cal. App. 4th 404, 411 (2001). Substantial responsive

showing that gives rise to no more than speculation, or amounts to mere

“smoke and mirrors,” should be disregarded. Sangster v. Puetkau, 68 Cal. App. 4th 151,162-163
(1998); Roehlis y, Walt Disney Co., 19 Cal. App. 4th 201, 219 (1993). In applying the foregoing

standard to the facts, there is no question that summary judgment in Bently’s favor is appropriate.

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PLAINTIFF'S MPA ISO MOTION FOR SUMMARY JUDGMENTw

A. There are no Triable Issues of Material Fact With Respect to Bently’s First
Cause of Action for Breach of Contract.

The elements for a breach of contract claim are that the parties (1) entered into a contract,
(2) that Plaintiff substantially performed on the contract or was excused for nonperformance, (3)
Defendant failed to do something that the contract required him to do or did something the
contract prohibited him from doing, and (4) that Plaintiff was harmed by that failure. Reichert v.
Gen'l Ins. Co. of Am., 68 Cal.2d 822, 830 (1968). Here, Bently and Fisher entered into two
separate contracts: a Severance Agreement and an Employment Agreement.

First, Fisher signed a Settlement Agreement with Got Grease in which he agreed (1) he
would “retumn{] all property and information that belongs to the Company, including ...

information about the Company’s practices, procedures, trade secrets, customer lists, or product

marketing” and (2) he would not “act in any manner that might damage the other party.” UMF 4.
As consideration, the Company gave him a significant sum of money, which he acknowledges he
received. UMF 22. Here, Fisher clearly violated his contractual obligations under the Severance
Agreement by using confidential and proprietary information as to customer lists, rates, special
needs, and preferences, which he acquired during his employment with the Company. UMF 23.
He also damaged Bently monetarily by stealing its oil collection containers and used oil. UMF 21.
Second, the parties entered into an Employment Agreement, under which Bently employed
Fisher as. a Truck Driver at $21.50 per hour in exchange for Fisher’s agreement to abide by
Bently’s policies and procedures, including an express Employment Agreement not to disclose
Bently’s confidential or proprietary information, including “customer lists, procedures ...
documents ... materials and products. UMF 32. Fisher further agreed that “all intellectual
property such as ... formulas, trade secrets, techniques and processes . .. shall remain the sole
property of Bently.” Jd. Fisher also agreed not to “private[ly] use, abuse, misappropriat[e] or
destr[oy] Company property.” /d. Through his Employment Agreement, Fisher also agreed that
he would read and abide by the Employee Handbook. Jd The Handbook also specifically
required Fisher to keep Bently’s confidential information private, including “sources of supply,
pricing data, marketing data and strategies.” UMP 35, 39. By providing Fisher with employment,

Bently substantially performed on the contract and no further conditions were required for the

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contract. UMF 40,

Courts have consistently held that customer information such as billing rates, key
contacts, specialized requirements and markup rates are sophisticated information and irrefutably
of commercial value, which are not readily ascertainable to other competitors; and as such they
constitute trade secrets under California law. See, e.g., Courtesy Temp. Service, Inc. v. Camacho,
222 Cal. App. 3d 1278, 1288 (1990); Readylink Healthcare v. Cotton, 126 Cal. App. 4th 1006,
1026 (2005). ‘The fact that some of the iiifonmation at issue, such as customer names or addresses,
may be publicly available does not change this analysis. /d. Here, Bently’s methods and
processes for collecting used oil have been developed and honed over years, and Bently takes
reasonable steps to secure their confidentiality through the Employee Handbook and Agreements.
UMF 24. Thus, Bently’s methods, techniques and processes are also trade secrets. See, e.g., Civ.
Code § 3246.1(d) (“trade secret” includes “method, technique, or process”); TMV Funding, Inc. v,
Impero Technologies, 2010 U.S. Dist. LEXIS 37064 (N.D. Cal, March 18, 2010) (“business plans
and strategies” are trade secrets); Whyte v. Schlage Lock Co, (2002) 101 Cal. App. 4th 1443, 1456,

As to the Employment Agreement, there is undisputed and documented proof that Fisher
violated the warranties in that agreement by: (1) failing to keep confidential Bently’s intellectual
property: (2) failing to return said property; (3) misappropriating Bently’s confidential property (in
ihe form of customer information, pricing rates, business strategies, methods, and processes); and
(4) and “privately using” or “abusing” that confidential and trade secret information to his own
benefit and the benefit of 3D. Fisher’s theft of used oil from Bently’s collection bins on, as well
as the bins themselves, also violated his obligations under the Employment Agreement.

Fisher admits that he knew Got Grease’s and Bently’s used oil pricing rates for their
customers. UMF 25, He also admitted that he knew the customer lists and contacts, their contact
information, and their specialized needs and preferences, all of which Fisher agreed to keep
confidential under the Severance Agreement, the Employment Agreement, and the Employee
Handbook. UMF 26. Equally importantly, he admits much of this data was not publicly available
(also demonstrated by the contracts requiring that terms of the collection agreements be kept
confidential), UMF 27. Thus, based on Fisher's own testimony, the information above is

«1s
SMRH435503568.5 PLAINTIFF'S MPA ISO MOTION FOR SUMMARY JUDGMENT‘irrefutably” trade secret, See, ¢.g., Courtesy Temp. Service, 222 Cal. App. 3d at 1288; Readylink
Healthcare, 126 Cal. App. 4th at 1026.

He violated his contractual obligations when he used these agreements for his own benefit
and the benefit of 3D, and against Bently’s interest. And Fisher's breach of these obligations have
caused harm to Bently. UMF 20. Thus summary adjudication on this claim is appropriate.

B. There are no Triable Issues of Material Fact With Respect to Bently’s Second

and Third Causes of Action for Inducing Breach of Contract and Tortious
Interference With Contractual Relations

To prove its third cause of action for tortious interference with contractual relations, Bently
must demonstrate “(1) a valid contract between plaintiff and a third party; (2) defendant's
knowledge of this contract; (3) defendant's intentional acts designed to induce a breach or
disruption of the contractual relationship; (4) actual breach or disruption of the contractual
relationship: and (5) resulting damage." Quelimane Co. v. Stewart Title Guaranty Co.,.19 Cal. 4th
26, 55 (1998); Pacific Gas & Electric Co. v. Bear Stearns & Co., 50 Cal. 3d 1118, 1126 (19990).

Rently’s second cause of action for inducing breach of contract is “a species of intentional
interference with contractual relations” and has the same elements, except that an actual breach
must be shown: /-800 Contacts, Inc. v. Steinberg, 107 Cal. App. 4th 568, 585 (2003). Bently
need not show that Fisher caused a breach ofa third party contract; it is enough that Fisher’s
conduct “makes plaintiff's performance of the contract ‘more expensive or burdensome,”” or
otherwise interferes with the contractual relationship. Seaman's Direct Buying Service, Inc. v,
Standard Oil Co., 36 Cal, 3d 752, 766 (1984); Pacific Gas & Electric Co., 50 Cal. 3d at 1129.

Further, Bently need not show specific intent or “that [Fisher's] primary purpose be
disruption of the contract.” Pacific Gas & Electric Co., 50 Cal. 3d at 1125-1128 (1990); see also
Davis v. Nadrich, 174 Cal. App. 4th 1, 10 (2009). A cause of action will lie even when
interference is “incidental to the actor's independent purpose and desire but known to him to be a

necessary consequence of his action.” Quelimane Co, 19 Cal. 4th at 56; Davis 174 Cal. App. 4th

at 10, Here, Bently has established each of the elements.
Fisher conceded in his deposition that he was aware Bently had both oral and written
contracts with its vendors, establishing the first (existence of a contract) and second (knowledge of

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SMRIEGI5S03568.5 PLAINTIFF'S MPA ISG MOTION FOR SUMMARY JUDGMENT~

oe ND MH & BH NS

the same) elements of both torts.” UME 13, Fisher also admitted that all of the deals he made
while working for Got Grease were on behalf of the Company, meaning he not only knew the
contracts existed but also that they belonged to Got Grease. The terms of the APA plainly provide
that all such customers and agreements were acquired by Bently. UMF 2.

For purposes of these claims, Bently has submitted contracts executed with several of its
customers, which appoint Bently as the customers’ “exclusive service provider” for a definite term
of either one or two years, which continue to renew unless notice is given. UMF 47-48, Bently
has a present contractual right to act as the exclusive service provider for these companies. UMF
47-48; Pacific Gas & Electric Co., 50 Cal, 3d at 1125-1128 (contract with express termination
provision may serve as basis for an interference with contractual relations claim).

Here, Fisher has admitted to engaging in various intentional acts that have disrupted
Bently’s above-referenced contracts, or induced breach by Bently’s customers. T| ‘hese include, but
are not limited to:

« Fisher acknowledges that until at least October 2, 2013, the companies he collected oil from
had contracts with Bently. UMF 13.

* Fisher admits he “took possession of [Bently’s] collection bins,” and knew Bently would no
longer have the ability to collect the oil placed in its bins pursuant to its contracts.’ UMF 63.

e Fisher admits he intentionally converted Bently’s oil and collection bins and misappropriated
Bently’s trade secrets, thereby interfering with Bently’s contractual right to serve as the
exclusive service provider for its clients. Jd.

» Fisher admits his misrepresentations caused Bently’s customers to be misled regarding his
status as'a Bently agent, thus interfering with Bently’s right to collect the oil, UMF 19.

« Fisher admits he sent out proposed “Notices of Cancellation,” purporting to “cancel” the

contracts between Bently and its customers, a direct attempt to interfere with Bently’s active

? Because Fisher is a managing agent of 3D, his knowledge is imputed to 3D. Sanders v, Magill, 9
Cal, 2d 145, 153 (1937) (knowledge of officer within the scope of duties imputed to corporation).
3 Several of Bently’s contracts explicitly state that title to oil passes to Bently immediately upon
its deposit ina bin.

- -13- _
SMREH435503568.5 PLAINTIFF'S MPA ISO MOTION FOR SUMMARY JUDGMENTcontracts, UMF 64.

Finally, the evidence shows an actual breach or disruption of Bently’s contracts, and
resulting damage. By taking oil from customer bins, Fisher caused Bently to pay customers less,
disrupting Bently’s obligations to pay the customer under the contract. Moreover, Bently plainly
cannot act as the exclusive service provider for its clients when Fisher is preventing Bently’s
collection of oil — which Fisher did by stealing the containers used by Bently to collect that oil.
See Seaman's Direct Buying Service, 36 Cal. 3d at 766 (conduct rendering a contract “more
expensive or burdensome” to perform is actionable). Additionally, Bently has received a number
of complaints from its clients regarding Fisher's actions, which is conclusive evidence that
Fisher’s misconduct has caused harm to Bently’s reputation and business relationships.

For the reasons above, Bently has satisfied its burden to establish every element for its
second and third causes of action and is therefore entitled to judgment as a matter of law.

Cc. There Are no Triable Issues of Material Fact With Respect to Bently’s Fourth

Cause of Action for Tortious Interference with Prospective Economic
Advantage

The elements of a claim for interference with prespective economic advantage are: “(1) an
economic relationship between the plaintiff and some third party, with the probability of future
economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional
acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the
relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the
defendant.” Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1153 (2003).

The tort of interference with prospective economic advantage is similar to “interference
with contractual relations,” except that Bently does not need to show a consummated binding
contract. Pacific Gas & Electric Co., 50 Cal. 3d at 1126 (the tort is considerably more inclusive

than actions based on contract and thus is not dependent on the existence of'a valid contract). As

* A stranger to a contract cannot terminate it without the consent of the parties, and Fisher's
notices could have no conceivable purpose other to interfere with and frustrate Bently’s
relationships with its vendors. Pacific Gas & Electric Co., 30 Cal. 3d at 1127 (“the contractual
relationship is at the will of the parties, not at the will of outsiders.”).

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SMRILaISSORIESS ~ ~~ PLAINT!with interference with contractual relations, only knowledge of probable interference is required
and not specific intent. Korea Supply, 29 Cal. 4th at 1153-1157. But unlike interference with
contractual relations, Plaintiff must show that Defendants’ interfering conduct was “independently
wrongful” by “some constitutional, statutory, regulatory, common law, or other determinable legal

standard.” Jd. at 1159; Della Penna v, Toyota Motor Sales, U.S.A.

11 Cal. 4th 376, 393 (1995).

The evidence here demonstrates that Bently had economic relationships with its clients for
used oil collection services, and the probability of future economic benefit from continuing those
relationships. While some of Bently’s contracts do not provide it with exclusivity or a stated term,
especially those that were oral, these agreements serve as economic relations for purposes of an
interference with prospective economic advantage. See Reeves v. Hanlon, 33 Cal. 4th 1140,
1152-1153 (2004) (interference with an agreement terminable at will by cither party is analyzed
under the framework of interference with prospective economic advantage). As established above,
for interference with contractual relations, the second, fourth, fifth elements, as well as the
knowledge of probable interference, are each satisfied (see discussion above).

‘The third element, that the action be independently wrongful, is also satisfied here because
Fisher interfered with Bently’s economic relations by means of conversion, misappropriation of
trade secrets, and violations of the Business and Professions Code § 17200 ev. seg. (“Untair
Competition Law” or “UCL”).. The proof for these acts are set forth in detail below, in support of
Bently’s claims for Conversion and Unfair Competition. Thus, there is no triable issue of material
fact with respect to Bently’s fourth cause of action.

D. There Are no Triable Issues of Material Fact With Respect to Bently’s Fifth

Cause of Action for Conversion

“Conversion is any act of dominion wrongfully exerted over another's personal property in
denial of or inconsistent with his rights therein.” Hartford Financial Corp. v. Burns (1979) 96
Cal. App. 3d 591, 598. Notably, it “is not necessary that there be a manual taking of the property;
it is only necessary to show an assumption of control or ownership over the property, or that the
alleged converter has applied the property to his own use.” Id. The elements for conversion are:
(1) plaintiffs ownership or right to possession of personal property, (2) defendant's disposition of

property in a manner inconsistent with plaintiff’s property rights, and (3) resulting damages.

«15-

SMRITassS05508.5 PLAINTIFF'S MPA ISO MOTION FOR SUMMARY JUDGMENTFremont Indem. Co. v. Fremont Gen. Corp. 148 Cal.App.Ath 97, 119 (2007),

Conversion likewise applies where a defendant misappropriates a specific, identifiable sum
of money, such as the proceeds from the used oil rightfully belonging to Bently, Haigler y.
Donnelly, 18 Cal.2d 674, 681 (1941); Fischer v. Machado, 50 Cal.App.4th 1069, 1072 (1996)
(conversion where defendant kept proceeds of product sale rather than turn them over to plaintiff).

Here, both the collection bins and used oil placed in those collection bins belonged to
Bently. UMF 2. Fisher admits that many of the bins were marked with Got Grease or Bently
identifications, that they were placed on customer property, and that Bently continues to use the
Got Grease and Bently