Preview
ELECTRONICALLY FILED
Superior Court of California
1 Timothy J. Trager, State Bar No. 145419 County of Santa Barbara
Meghan K. Woodsome, State Bar No. 272459 Darrel E. Parker, Executive Officer
2 REICKER, PFAU, PYLE & McROY LLP 9/22/2021 6:18 PM
1421 State Street, Suite B By: Narzralli Baksh, Deputy
3 Santa Barbara, CA 93101
ttrager@rppmh.com
4 mwoodsome@rppmh.com
Tel (805) 966-2440
5 Fax (805) 966-3320
6 Attorneys for Plaintiff Novacoast, Inc.
7
8 SUPERIOR COURT OF THE STATE OF CALIFORNIA
9 COUNTY OF SANTA BARBARA
10 ANACAPA DIVISION
11 NOVACOAST, INC., a California corporation, CASE NO.: 18CV04194
12 Plaintiff, Case Assigned to Thomas P. Anderle
Complaint Filed: August 23, 2018
13 v.
PLAINTIFF’S MOTION IN LIMINE
14 SYMANTEC CORPORATION, a Delaware NO. 1: TO PRECLUDE EVIDENCE OF
corporation; DIGICERT, INC., a Utah ALLEGED ENTITLEMENT TO OFFSET
15 corporation; and DOES 1 through 50, inclusive,
Date: September 27, 2021
16 Defendants. Time: 1:30 p.m.
Dept. 3
17
18
19 I. REQUEST FOR ORDER IN LIMINE
20 Plaintiff, Novacoast, Inc. ("Plaintiff"), moves in limine for an order prohibiting
21 Defendants Symantec Corporation and DigiCert, Inc. (together, "Defendants") and anyone acting
22 or purporting to act on their behalf from introducing any evidence or making any argument that
23 Plaintiff’s damages must be offset by amounts Defendants allege that Plaintiff owes them.
24 Defendants did not raise this issue in their pleadings, and when Plaintiff declined to stipulate to
25 allow Defendants to amend their answer during the final weeks of discovery to add an
26 affirmative defense raising the “offset” issue, Defendants did not move for an order allowing the
27 amendment.
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PLAINTIFF’S MOTION IN LIMINE NO. 1: TO PRECLUDE EVIDENCE OF OFFSET
1 II. DEFENDANTS DID NOT RAISE AN OFF-SET DEFENSE IN THEIR
2 PLEADINGS. THEY MAY NOT RAISE THE DEFENSE AT TRIAL.
3 The operative pleading is the Second Amended Complaint (the "SAC"). In that SAC,
4 Plaintiff states the following causes of action against Defendants: breach of contract under
5 common law and under the UCC (California Commercial Code) against each Defendant; breach
6 of the implied covenant of good faith and fair dealing; reformation of contract; rescission;
7 restitution / unjust enrichment; common counts (money had and received); declaratory relief;
8 breach of fiduciary duty, fraud (suppression and concealment), and unfair business practices.
9 Defendants generally denied the allegations and alleged 23 affirmative defenses. In or
10 about July 2021, they asked Plaintiff to stipulate to allow Defendants to file an amended answer
11 to the SAC. The proposed amended answer included, among other things, a proposed twenty-
12 fourth affirmative defense of Set-Off. Defendants sought to allege, under Code of Civil
13 Procedure section 431.70, that any recovery by Plaintiff should be offset by amounts Plaintiff
14 allegedly owes Defendants, including the value of the products and services Defendants provided
15 in connection with the Symantec Contract, as well as other alleged damages that Defendants
16 incurred as a result of Plaintiff’s alleged breaches of the “Reseller Covenants” under the
17 Symantec Contract.
18 Citing the lack of factual specificity in the proposed amended answer (including the
19 proposed twenty-fourth affirmative defense), the proximity of the trial date, and the additional
20 discovery that the proposed amended answer would require, plaintiff declined to stipulate.
21 Defendants subsequently provided a more factually detailed proposed amended answer. By then,
22 of course, the trial date was even closer, and again plaintiff declined to stipulate. Defendants did
23 not file a motion to allow them to file the proposed amended answer.
24 Having failed to raise the set-off issue in their pleadings, Defendants may not raise it at
25 trial. “[A] trial is generally limited to issues raised by the pleadings ....” (Ojavan Investors, Inc. v.
26 California Coastal Comm’n (1997) 54 Cal.App.4th 373, fn. 22 [trial court properly precluded
27 plaintiffs from introducing evidence of matters not raised in answer to cross-complaint].) This
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PLAINTIFF’S MOTION IN LIMINE NO. 1: TO PRECLUDE EVIDENCE OF OFFSET
1 basic, non-controversial rule is reiterated by Code of Civil Procedure section 431.70, which
2 defendants cited as authority for their proposed twenty-fourth affirmative defense.
3 Section 431.70 states, in part, “Where cross-demands for money have existed between
4 persons at any point in time when neither demand was barred by the statute of limitations, and an
5 action is thereafter commenced by one such person, the other person may assert in the answer
6 the defense of payment in that the two demands are compensated so far as they equal each other
7 ....” (Italics added.) Although “cross-demands for money under § 431.70 need not be liquidated,”
8 “[t]here must be a lawful and proper cross-demand ....” (2 Schwing, Cal. Affirmative Defenses
9 (2d ed., May 2021 update) § 44:2 (fn. omitted), citing Woodruff v. California Republic Bank
10 (1977) 75 Cal.App.3d 108, 111 [cross-demand referred to in section 431.70 “presumes a lawful
11 and proper cross-demand”].) “The facts supporting the setoff must be set forth with essentially
12 the same format and detail as a cause of action.” (2 Schwing, supra, § 44:7 (fn. omitted).) The
13 “essential requirement is that answer allege facts showing that setoff is legal and valid claim.”
14 (Id., § 44:7, fn. 3 (citation omitted).)
15 Defendants have not done any of that. What happened was this – as this lawsuit has
16 gotten closer and closer to trial, defendants have decided to defend their unconscionable conduct
17 by arguing, “You owe us money, too.” That’s inadequate. The time to raise an "offset" defense
18 was early enough in the litigation so that plaintiff could conduct discovery into the factual basis
19 of the defense. Defendants didn’t attempt to raise the issue until it was too late for plaintiff to do
20 that. Defendants may not raise the issue for the first time at trial.
21 III. CONCLUSION
22 The court should enter an order, in limine, prohibiting Defendants and anyone acting or
23 purporting to act on Defendants' behalf from introducing any evidence or making any argument
24 that Plaintiff's damages must be offset by amounts plaintiff allegedly owes defendants.
25 DATED: September 22, 2021 REICKER, PFAU, PYLE & MCROY LLP
26
27 By: __________________________
Timothy J. Trager
28 Meghan K. Woodsome
Attorney for Plaintiff, Novacoast, Inc.
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PLAINTIFF’S MOTION IN LIMINE NO. 1: TO PRECLUDE EVIDENCE OF OFFSET
1 DECLARATION OF SERVICE
2 I, the undersigned, say that I am a citizen of the United States, over 18 years of age, and
not a party to the within action. I am employed by the law firm of Reicker, Pfau, Pyle & McRoy
3 LLP, 1421 State Street, Ste. B, Santa Barbara, California 93101.
4 On September 22, 2021, I served the within: PLAINTIFF’S MOTION IN LIMINE
NO. 1: TO PRECLUDE EVIDENCE OF ALLEGED ENTITLEMENT TO OFFSETF on
5 the interested parties listed below, as follows:
6 R. Jeremy Adamson Robert P. Harrington
Kunzler Bean & Adamson, PC Paul J. Sampson
7 4225 Executive Square, Ste. 600 Kunzler Bean & Adamson
La Jolla, CA 92037 50 W. Broadway, Ste. 1000
8 jadamson@kba.law Salt Lake City, UT 84111
Email: rharrington@kba.law
9 psampson@kba.law
Jared M. Katz
10 Daniella Scioscia-Regencia
MULLEN &HENZELL L.L.P.
11 112 East Victoria Street
Santa Barbara, CA 93101-2019
12 jkatz@mullenlaw.com
dscioscia-regencia@mullenlaw.com
13
( ) (By Mail) I caused such document to be mailed in a sealed envelope, by first-class mail,
14 postage fully prepaid. I am “readily familiar” with this firm’s practice of collection and
processing correspondence for mailing. It is deposited with the U.S. postal service on
15 that same day in the ordinary course of business. I am aware that on motion of party
served, service is presumed invalid if the postal cancellation date or postage meter date is
16 more than one (1) day after the date of deposit for mailing as stated in this declaration.
17 ( ) (By Personal Service) I caused such document to be delivered by hand.
18 ( ) (By FAX) I caused such document to be sent via facsimile transmission to the above-
listed addressee(s) and FAX number(s). This transmission was reported as complete and
19 without error.
20 (X ) ((By E-MAIL [CCP § 1010.6(a)(2)) On the date indicated on this Proof of Service, at
the time indicated on in the header of my electronic mail, I transmitted the foregoing
21 document(s) by electronic mail to one or more of the recipients at each firm indicated on
this Proof of Service. I caused the my computer to print or maintain a record of the
22 electronic mail to the recipients named in this Proof of Service, a true and correct copy of
which has been retained by Reicker, Pfau, Pyle & McRoy LLP in either hard copy or
23 electronic format in the ordinary course of business and is available for inspection if
necessary.
24
(X) (State) I declare under penalty of perjury pursuant to the laws of the State of California
25 that the foregoing is true and correct.
26 Executed September 22, 2021, at Santa Barbara, California.
27
_______________________________
28 Kim Stanley
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PLAINTIFF’S MOTION IN LIMINE NO. 1: TO PRECLUDE EVIDENCE OF OFFSET