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AKAY LAW
DOUGLAS N. AKAY, STATE BAR #131011
ELSA BERRY, STATE BAR #262868
100 Pine Street, Suite 2700
San Francisco, California 941 11
(415) 764-1999 (telephone)
.b (41 5) 764-1994 (facsimile)
dnaka aka 1aw.com
Attorneys for Defendants and Cross-complainants,
TARUN GAUR, JINIGRAM, LLC, and DIAL2BUY.COM, LLC
\OOOQQU‘I
IN THE SUPERIOR COURT OF CALIFORNIA FOR THE
COUNTY OF SAN MATEO
UNLHVIITED JURISDICTION
11 case No' 18C1V06232
BOOTUP VENTURES, LLC, et a1.
12 TARUN GAUR’S OPPOSITION T0 CROSS-
Plaintiffs,
DEFENDANTS BOOTUP VENTURES AND
13
CALIFORNIA
BOOSTCARE, DBA BOOTUP WORLD’S
V.
MOTION T0 STRIKE CLAIM FOR
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764-1999
TARUN GAUR, ct a1.
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RELIEF IN DEFENDANTS TARUN GAUR,
AKAY
15 JINIGRAM, LLC AND DIALZBUY.COM, LLC’S
FRANCISCO,
Defendants.
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CRoss-COMPLAINT
16 AND RELATED CROSS-COMPLAINT
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COMPLAINT FILED: NOVEMBER 19, 2018
17
DATE: June 27, 2019
18 TIME: 9:00 a.m.
DEPT: Law and Motion
19
20
21
I. INTRODUCTION
22
Cross—defendants BootUp Ventures and BootUp World’s Motion to Strike the Cross-
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complainants’ Claim for Restitution should be denied because itgrossly misapplied Code CiV. Proc.
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§436(a), and reflects a misunderstanding 0f the elements 0f a Cause 0f Action for rescission, and the
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scope 0f restitution which is not limited to the restitution of monetary compensations but
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encompasses all benefits and/or right conferred under the rescinded agreement. Cross-defendants’
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confusion regarding the elements 0f rescission and restitution was thoroughly addressed in Cross-
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Case No. 18CIV06232 Gaur’s Opp. to Cross-defendants’ Mot. To Strike Cross-Comp., Page 1
complainants’ meet and confer reply t0 their meet and confer letter. See Akay Decl., W 2-3, Exs. A,
B.
II. STATEMENT OF FACTS
Tarun Gaur (“Gaur”) ,
Jinigram. LLC (“Jinigram”) and Dia12buy.com, LLC (“Dia12buy”) (all
together referred t0 as “Cross—complainants”) filed a Cross—complaint for rescission, declaratory
relief, fraud, promissory fraud, and breach 0f contract, against BootUp Ventures (“BootUp”),
BootUp World (“BootUp World”), Marco ten Vaanholt, Mukul Arguwal and Andreas Bimik, both
individuals being co-founders 0f BootUp Ventures. See RJN, Exhibit A [Cross—complaint (“X-
Compl.), W 4-5].
10 Tarun Gaur — a highly skilled startup entrepreneur known as an innovator and leader in the
11 Artificial Intelligence industry — conceptualized and co-founded Tringapps. Under Gaur's leadership,
12 Tringapps has designed and developed multi-million dollar products and solutions for Fortune 500
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brands. The most notable being - HBO G0, Disney Movies Anywhere, Mobile first experiences for
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Time Inc. amongst others. Today Gaur isconsidered an upcoming authority 0n Machine Learning,
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AI and Blockchain and is working 0n numerous innovative initiatives. See RJN, Exhibit A [X-
(415)
16 Compl., 1]26].
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17 For Gaur’s newest startup companies, Dia12Buy.com, and Jinigram, Gaur was looking for
18 startup capital and know-how from what isknown in the industry as a startup accelerator, which
19 provides seed investment, connections, mentorship, educational components t0 accelerate the growth
20 0f the startup. This is in that context that Gaur was introduced t0 Bootup, a potential startup
21 accelerator. See RJN, Exhibit A [X-Compl., 1]27].
22 A. Cross-defendants’s Misrepresentations About Their Ability t0 Perform as an
Accelerator.
23
At Gaur’s first meeting with Bootup’s principals, Arguwal and Vaanholt, Gaur was
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specifically directed t0 Bootup’s webpage as “proof” 0f their credentials. See RJN, Exhibit A [X-
25
Compl., 1]28]. The relevant portions 0f bootup’s webpages are attached as Exhibits A and B 0f the
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Cross—complaint. See RJN, Exhibit A [Cross—complaint, at Exs A and B].
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Case No. 18CIV06232 Gaur’s Opp. to Cross—defendants’ Mot. To Strike Cross—Comp., Page 2
Bootup’s webpage reads as follows:
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They have accelerated 120+ Startups;
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They have obtained $400,000,000 for those startups; and
°
Those startups are currently valued at $4 Billion.
Bootup’s webpage also stated that they had “global reach with high quality partners and locations”
world wide, that can “provide deal-flow, access talent and tailor go-to-market approaches t0 Bootup
startups. Bootup’s webpage implied that they partnered with Fortune 500 companies, such as
Amazon, Verizon, Volkswagen, etc. Gaur is informed and believes, that Bootup used these named
Fortune 500 companies, without their permission, and in possible Violation 0f trademark use
10 regulations. A11 0f those stated claims contained in Bootup’s website were false, and were
11 deliberately directed at Gaur t0 obtain his confidence in Bootup’s capabilities in both as a startup
12 accelerator and as a bridge t0 business opportunities. See RJN, Exhibit A [X-Compl., 1] 29, Exs. A
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and B]
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On numerous occasions, after their first meeting, Arguwal and Vaanholt specifically restated
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the false claims that appeared 0n their webpage, and also stated that they had in place the capabilities
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16 and talent that would serve Gaur as a startup accelerator. Arguwal and Vaanholt brought in Cross-
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17 defendant Andres Bimik t0 support Bootup’s claims 0f a worldwide presence. Bimik falsely
18 claimed Bootup’s worldwide reach in Europe, Singapore, and East Asia, and that Bootup had talent
19 and resources throughout the world that would accelerate Gaur’s startups’ growth. Bootup’s
20 founders’ and Bimik’s claims persuaded Gaur, a technologist, that they could provide the business
21 savvy, ready personnel at alllevels (sales, support, administration), and startup accelerator expertise
22 that Gaur lacked. What Gaur did not know is that Arguwal and Vaanholt saw that they could use
23 Gaur as the Cross—defendants’ tool and entree into bigger things that they had conceived for
24 themselves. See RJN, Exhibit A [X-Compl., 1] 30].
25 Arguwal and Vaanholt immediately began negotiating in earnest with Gaur in forming a
26 Memorandum 0f Understanding (“MOU”). During these negotiations, Arguwal, Vaanholt, and
27 Bimik, allrepeated their false claims mantra in obtaining Gaur’s agreement 0n the MoU.
28 Furthermore, Arguwal and Vaanholt claimed that Bootup had an in-house counsel Capital
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Case No. 18CIV06232 Gaur’s Opp. to Cross—defendants’ Mot. To Strike Cross—Comp., Page 3
Procurement are called Bootup Capital, but this claim, too, later turned out t0 be false .In fact,
Bootup’s principals hid from Gaur that they were in a dispute with the principals 0f Bootup Capital.
The MoU was executed November 14, 2016. See RJN, Exhibit A [X-Compl., 1]
3 1,Exhibit C].
The MoU’s main set 0f promises t0 Gaur, and his startups, t0 which Gaur justifiably relied
upon, was contained in Section 4.1 0f the MoU. Section 4.1 states:
4.1 As part 0f this MoU BootUp will act as board advisors for the following
companies QuickAV ( t0 be created, will require an amendment t0 this agreement),
Jinigram LLC, a Delaware company and Dia12Buy.com LLC, a Delaware company
and with that advisor role will advise 0n the following topics:
a) Minimum 0f advisory 0f 15 hours a month
b) Assist in developing a Product and Engineering strategy
c) Develop an understanding 0f the business, market and industry trends
10 d) Provide counsel 0n issues raised by owners/directors 0r management
e) Provide unbiased insights and ideas from a third point-of-View (not involved
11 in the operation 0f the business)
f) Encourage and support the exploration 0f new business ideas
12 g) Act as a resource for executives, and assist in fund raising
h) Provide an additional networking & funding platform for directors and the
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i) Encourage the development 0f a governance framework that enable
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sustainable growth 0f the company, including talent hiring
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j) New Customer & Market identification/recommendations
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k) Propose a potential cost structure & revenue model for optimized market
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penetration
16 1) Assist in finding additional funding for these companies
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m) Help build teams for each 0f the companies
17 n) Additional Services: BootUp will provide desk 0r office space at BootUp
World for Company at a 50% discounted rate for the length 0f this agreement
18 RJN, Exhibit A [X-Complaint, 1] 32, Exhibit C].
19 B. In Reality, Bootup Had N0 Startup Accelerator Capabilities, and Nearly Every
Promise and Representation Made By The Defendants Turned Out t0 be False.
20
Gaur set t0 work 0n developing his startups, Dia12Buy.com and Jinigram, and looked
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t0 Bootup t0 provide the services Gaur needed t0 accelerate the growth 0f his startups. But
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over a period 0f time, Gaur found that Bootup did not ever “act as board advisors” t0 any 0f
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the contemplated startups, including Jinigram LLC and Dia12Buy.com LLC. In addition,
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Bootup (0r Boostcare depending) never had the capabilities t0 d0 so, and as a result did not
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provide any 0f the services listed in the Memorandum 0f Points and Authorities. See RJN,
26
Exhibit A [X-Complaint, at 1B3].
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Case No. 18CIV06232 Gaur’s Opp. to Cross—defendants’ Mot. To Strike Cross—Comp., Page 4
C. Cross-defendants’ Ulterior Motive And Benefits Under the Memorandum
Of Understanding.
Using the knowledge they gained from Gaur, Bootup took credit for an independent
business relationship between Gaur’s other non-signatory company, Tringapps, and Urloops,
with which Bootup had some clandestine “kick back” arrangement. Bootup then demanded
a commission from activities between Tringapps and Urloops, when Bootup had n0 rights t0
such. In May 2017, just six short months after executing the MoU, Gaur, and Gaur’s Startups,
withdrew from the MoU because 0f the Cross—defendants’ failure t0 perform as agreed. Also
as part 0f the MoU at Section 5, the parties were t0 “set up 0n 0r more IOT accelerators in
India with the Bootup name. However, n0 IOT accelerators were ever created yet Bootup
10
falsely claims that it isentitled t0 share in some income streams t0 which they are not
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entitled. Likewise, and also as part 0f the MoU at Section 6, the parties were t0 generate
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“revenue that might stem from activities like setting up Bootup branded co-working spaces in
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India, 0r possibly in other places in the world with approval 0f the Bootup management team
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will require a
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20% revenue transfer from [Gaur] t0 Bootup.” None 0f this ever materialized,
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yet Bootup falsely claims that it isentitled t0 share in some revenue streams t0 which they are
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not entitled. After determining that the Cross—defendants sole purpose in obtaining Gaur and
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Gaur’s Startups signature was t0 make a claim, legitimate 0r not for a claim for 20% interest,
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such as the Cross—defendants are claiming in their Complaint against Cross—complainants,
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Gaur has come t0 the realization that Cross—defendants deliberately mislead Gaur and Gaur’s
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Startups into executing the MoU t0 gain a fraudulent advantage over them. See RJN, Exhibit
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A [X-Compl., W 34-38, See Exhibit C, at Section 4 conferring benefits t0 Cross—defendants].
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III. LEGAL ARGUMENT
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A. Standard 0f Review
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A motion t0 strike lies either (1) t0 strike any “irrelevant, false 0r improper matter
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inserted in any pleading” (Code CiV. Proc. §436(a)); 0r (2) t0 strike any pleading 0r part
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thereof “not drawn 0r filed in conformity with the laws 0f this state, a court rule 0r order 0f a
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court.” (Code CiV. Proc. §436(b)). As with demurrers, the grounds for a motion t0 strike must
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Case No. 18CIV06232 Gaur’s Opp. to Cross—defendants’ Mot. To Strike Cross—Comp., Page 5
appear 0n the face 0f the pleading under attack, 0r from matter which the court may judicially
notice. Code CiV. Proc. § 437.
California courts disfavor motions t0 strike and, pleading must be “liberally
construed, with a View t0 substantial justice between the parties. Code CiV. Proc. § 452.
A motion t0 strike challenges the legal sufficiency 0f the complaint’s allegations,
which are assumed t0 be true and which are given a liberal construction. Blakemore v.
Superior Court (2005) 129 Cal.App.4th 36, 53; Velez v. Smith (2006) 142 Cal.App.4th 1154,
1163. Allegations 0f a pleading subj ect t0 a motion t0 strike are considered as a whole, with
allparts in their appropriate context. Courtesy Ambulance Service v. Superior Court (1992) 8
10 Cal.App.4th 1504, 1519; Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.
11 Motion t0 strike are disfavored and “will usually be denied unless the allegations have
12 n0 possible relation t0 the controversy and may cause prejudice t0 one 0f the parties.”
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Friedman v. 24 Hour Fitness USA, Inc. (CD. Cal. 2008) 580 F.Supp.2d 985, 990.
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As a general rule, motions t0 strike “should not be granted unless it isclear that the
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matter t0 be striken could have n0 possible bearing 0n the subject matter 0f the litigation.”
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16 Neveau v. City ofFresno (CD. Cal. 2005) 392 F.Supp.2d 1159, 1170. Where a motion t0
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17 strike is so broad as t0 include relevant matters, the motion t0 strike must be denied in its
18 entirety. Triodyne, Inc. v. Superior Courtfor LOS Angeles County (1966) 240 Cal.App.2d
19 536, 542-43 (citing Hill v. Wrather (1958) 158 Cal.App. 2d 818, 823).
20 A. Cross-defendants BootUp’s Motion t0 Strike Should Be Denied Because: (1)
Restitution Is Not A Pre-Requisite T0 A Cause 0f Action For Rescission; And (2)
21 Restitution Is Not Limited t0 Return 0f Monetary Consideration T0 The Party
Seeking Rescission and Restitution.
22
Cross—defendants’ meet and confer letter 0f April 9, 2019, as well as the
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Memorandum 0f Points and Authority In Support 0f Their Motion t0 Strike, at5:8-26 show
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that Defendants’ counsel misunderstood, and as a result, misapplied, the elements 0f a cause
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0f action for rescission and the concept 0f restitution which includes, but isnot limited t0,
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restitution 0f monetary compensation received under the rescinded instrument. See Akay
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Decl., 1] 2, EX. A. Cross—complainant’s counsel addressed the deficiency in the legal argument
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Case No. 18CIV06232 Gaur’s Opp. to Cross—defendants’ Mot. To Strike Cross—Comp., Page 6
0f the opposing counsel in meet and confer reply 0f April 12, 2019. See Akay Decl., 1]3, EX.
B.
The validity 0f a cause 0f action for rescission is not dependent 0n whether there are grounds
for restitution under Civil Code section 1692, which provides:
A claim for damages is not inconsistent with a claim for relief
based upon rescission. The aggrieved party shall be awarded
complete relief, including restitution 0f benefits, z'fany,
conferred by him as a result 0f the transaction and any
consequential damages t0 which he is entitled; but such relief
shall not include duplicate 0r inconsistent items 0f recovery
Cal. CiV. Code §1692.
Cross—defendants’s meet and confer letter states that Cross—complainant does not state
10 a valid cause 0f action for rescission 0n the alleged ground that:
11 “the Cross—complaint alleges n0 facts t0 show that any 0f your
clients paid any consideration t0 BootUp Ventures 0r any other
12 Cross—defendant that must be returned t0 them.”
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The foregoing only reflects Cross—defendants’ confusion between rescission and
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restitution.
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(415)
A contract is subj ect t0 unilateral rescission by a party whose consent t0 the contract
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(0r the consent 0f another party jointly contracting with the rescinding party) was given by
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mistake 0r obtained through duress, fraud 0r undue influence exercised by 0r with the
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connivance 0f the party against whom rescission is sought 0r any other party t0 the contract
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jointly interested with the party against whom rescission is sought. Civil Code section
20
16 89(b)( 1 ).
21
Rescission is a remedy that disaffirms the contract. Civil Code sections 1688 et seq.
22
The remedy assumes the contract was properly formed, but effectively extinguishes the
23
contract ab initio as though itnever came into existence; and its terms cease t0 be
24
enforceable. Civil Code §1688.
25
Restitution isnot a pre-requisite/element 0f a cause 0f action for rescission but rather
26
a rescissory relief available under Civil Code section 1692, when and after a contract has
27
been rescinded.
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Case No. 18CIV06232 Gaur’s Opp. to Cross—defendants’ Mot. To Strike Cross—Comp., Page 7
Furthermore, Cross—defendants’ reading 0f Ogden Martin Systems, Inc. v.San
Bernardino County isincomplete and its application misplaced for the following reasons:
Ogden Martin Systems, Inc. v.San Bernardino County was in the context 0f a motion
for summary judgment where the judge looked beyond the face 0f the pleading t0 evidence
gathered through discovery. In summary judgment proceedings, the moving party argues that
there are n0 genuine issues 0f material facts. A motion t0 strike only challenges defects in the
pleadings (material 0r language that is irrelevant 0r improper; Material, language, 0r entire
pleadings that are not in compliance with state laws 0r court rule, 0r an order 0f the court.
See Code 0f CiV. Proc. § 436.
10 In Ogden Martin Systems, Inc. v. San Bernardino County (9th Cir. 1991) 932 F.2d
11 1284, Ogden Martin filed a complaint for breach 0f contract and alternatively t0 rescind the
12 contract seeking allbenefits conferred t0 the nonrescinding party. The County moved for
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CALIFORNIA summary judgment 0n all counts. The district court granted summary judgment 0n the
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rescission claims, finding n0 benefit had been conferred 0n the County. Ogden Martin
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appealed the district court's grant 0f summary judgment 0n the rescission claim. The Ninth
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16 Circuit reversed the district court; summary judgment 0n the rescission claims, holding in
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17 substance:
18 Ogden Martin raised a genuine issue 0f material fact as t0
whether it bestowed a benefit 0n the County. The rescission
19 claims should be tried before a fact-finder, not disposed 0n
summary Judgment.
20
In a rescission action, the complaining party may receive
21 restitution for all benefits conferred 0n the other party,
restoring both parties t0 economic status quo ante.
22 Cal.CiV.C0de § 1692 (West 1985); see St. Regis Paper C0. V.
Royal Indus., 552 F.2d 309, 313 (9th Cir.), cert. denied, 434
23 U.S. 996, 98 S.Ct. 633, 54 L.Ed.2d 490 (1977). Restitution is
discretionary with the court, however, and is not required even
24 when rescission is ordered. Id. at 3 14.
25 Ogden Martin Systems, Inc. v.San Bernardino County (9th Cir. 1991) 932 F.2d 1284, 1288.
26 The Ninth Circuit clearly dissociates rescission from restitution as the latter is
27 subsequent t0 the former, rather than a pre-requisite 0r an element thereof.
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Case No. 18CIV06232 Gaur’s Opp. to Cross—defendants’ Mot. To Strike Cross—Comp., Page 8
Finally, in an action based upon rescission, courts may order whatever relief is
necessary t0 adjust the equities between the parties and ensure restoration t0 the precontract
status quo. Cal. CiV. Code § 1692. The goal is t0 reach an equitable result by returning the
parties t0 the position they were in before the contract was entered into and avoiding unjust
enrichment. Therefore, such additional relief may operate in favor 0f either 0r both parties.
For example, the court may order a restitution 0f benefits conferred by the rescinding
party and also award consequential damages incurred as a result 0f entering into the contract
(so long as the award does not include a double 0r inconsistent recovery).
As consequential damages, a rescinding party may recover such items as real estate
10 commissions paid in connection with the sale (Tampico v. Wood (1963) 222 Cal.App.2d 21 1,
11 214—215), escrow expenses (Curran v. Heslop (1953) 115 Cal.App.2d 476, 483), interest 0n
12 specific sums 0f money paid t0 the other party (Smith v. Rickards (1957) 149 Cal.App.2d
13
CALIFORNIA 648, 654), and attorney fees in appropriate cases. (Hastings v. Matlock (1985) 171
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Cal.App.3d 826, 841, 217). Sharabianlou v. Karp (2010) 181 Cal. App. 4th 1133, 1146, as
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modified 0n denial 0f reh'g (Mar. 3, 2010).
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16 An action for rescission is based 0n the disaffirmance 0f the contract. Akin v.Certain
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17 Underwriters at Lloyd’s London (2006) 140 Cal. App. 4th 291, 296. Disaffirmance 0f the
18 Memorandum 0f Understanding and benefits conferred therein t0 Cross—defendants are
19 among the relief sought in Cross—complaint’s First Cause 0f Action. Those benefits are stated
20 in
21 Your argument also misapplied the foregoing case. In Akin v. Certain Underwriters at
22 Lloyd’s London, Plaintiff misconstrued the statutory language 0f Civil Code section 1692 t0
23 mean that “complete relief” also includes damages for breach 0f contract:
24
A claim for damages is not inconsistent with a claim for relief
25 based upon rescission. The aggrieved party shall be awarded
complete relief, including restitution 0f benefits, if any,
26 conferred by him as a result 0f the transaction and any
consequential damages t0 which he is entitled; but such relief
27 shall not include duplicate 0r inconsistent items 0f recovery[.]”
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Case No. 18CIV06232 Gaur’s Opp. to Cross—defendants’ Mot. To Strike Cross—Comp., Page 9
Although section 1692 allows the aggrieved party t0 recover
“consequential damages,” the statute refers t0 the damages that
would restore the parties t0 their original positions. Indeed, the
very purpose 0f rescission is t0 restore the parties t0 the
position they would have been in had they not entered the
contract. (Runyan v. Pacific Air Industries, Inc. (1970) 2 Cal.3d
304, 3 16, [.][plaintiff sought damages t0 recover income that
he would have earned absent the contract].) “The award given
in an action for damages compensates the party not in default
for the loss 0f his ‘expectational interest'—the benefit 0f his
bargain which full performance would have brought. [Citation]
Relief given in rescission cases—restitution and in some cases
consequential damages—puts the rescinding party in the status
quo ante, returning him t0 his economic position before he
entered the contract.” (Id. at p. 3 16, fn. 15[.]
Akin v. Certain Underwriters at Lloyd’s London (2006) 140 Cal. App. 4th 291, 297-298.
10 In light 0f the foregoing, your assertion that “Paragraph 1 0f the prayer for relief
11 contained in the Cross—complaint is subj ect t0 a motion t0 strike t0 the extent that itseeks
12 restitution and damages” is inaccurate and would most likely fail, considering that the Cross-
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complaint clearly seeks damages for breach 0f contract as an alternative remedy t0 that the
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First Cause 0f Action for rescission and restitution 0f any benefits conferred t0 BootUp
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Ventures, LLC by Virtue 0f the MoU. See RJN, Exhibit A [X-Compl., W 34-38, Exhibit C
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16 (Memorandum 0f Understanding, at Section 4)].
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17 IV. CONCLUSION
18 In light 0f the foregoing, Defendant and Cross—complainants respectfully request this
19 Court t0 overrule BootUp Ventures, LLC and BootUp World’s demurrer t0 Cross-
20 complainants’ cause 0f action for fraud, promissory fraud and breach 0f contract, 0r in the
21 alternative grant leave t0 amend.
22 Respectfully Submitted,
23 Dated: June 13, 2019 AKAY LAW
24
25 By; /
Douglas N. Akay, AttomWefendants and
26 Cross—complainants,
TARUN GAUR, JINIGRAM, LLC, and
27 DIAL2BUY.COM, LLC
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