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  • Butler America LLC vs UCOMMG LLC et alUnlimited Breach of Contract/Warranty (06) document preview
  • Butler America LLC vs UCOMMG LLC et alUnlimited Breach of Contract/Warranty (06) document preview
  • Butler America LLC vs UCOMMG LLC et alUnlimited Breach of Contract/Warranty (06) document preview
  • Butler America LLC vs UCOMMG LLC et alUnlimited Breach of Contract/Warranty (06) document preview
  • Butler America LLC vs UCOMMG LLC et alUnlimited Breach of Contract/Warranty (06) document preview
  • Butler America LLC vs UCOMMG LLC et alUnlimited Breach of Contract/Warranty (06) document preview
  • Butler America LLC vs UCOMMG LLC et alUnlimited Breach of Contract/Warranty (06) document preview
  • Butler America LLC vs UCOMMG LLC et alUnlimited Breach of Contract/Warranty (06) document preview
						
                                

Preview

SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA BARBARA Dated and Entered: 12/03/2021 Time: 10:00 AM Judicial Officer: Donna D Geck Deputy Clerk: Kristi Temple Dept: SB Dept 4 Deputy Sheriff: Kent McBride Court Reporter: Michelle Sabado Case No: 20CV03877 Butler America LLC vs UCOMMG LLC et al Parties Present: Cameron Totten Plaintiff’s Attorney Kathryn Evans Defendant’s Attorney NATURE OF PROCEEDINGS: Motion: Quash Service of Summons for Lack of Personal Jurisdiction; Demurrer to FAC Counsel presented argument. The Court adopted the tentative ruling as follows: RULING: (1) For the reasons set forth herein, the demurrer of defendants WesTele and Cynthia Baker to the first amended complaint is deemed sustained with leave to amend with plaintiff Butler America, LLC’s second amended complaint already on file deemed filed pursuant to that leave to amend. For purposes of determining when a response is due, the second amended complaint is deemed filed and served (without any extension of time for manner of service) as of December 3, 2021. The demurrer of specially appearing defendants UCOMMG, LLC, Kenneth W. Newbatt, Unified Communications Group, Inc., Bianca Newbatt, Mitchell Lipkin, and Michael Bellas to the first amended complaint is ordered off calendar as moot by the filing of the second amended complaint. (2) For the reasons set forth herein, the motion of specially appearing defendants UCOMMG, LLC, Kenneth W. Newbatt, Unified Communications Group, Inc., Bianca Newbatt, Mitchell Lipkin, and Michael Bellas to quash service of summons based on the lack of personal jurisdiction is continued to March 11, 2022, at 10:00 a.m. to permit plaintiff Butler America, LLC, to conduct jurisdictional discovery. Plaintiff Butler America, LLC, shall file and serve its supplemental opposition on or before February 18, 2022; moving parties may file and serve a supplemental reply on or before February 28, 2022. To the extent that any discovery disputes arise, the parties are expected to proceed with diligence so that jurisdictional discovery is completed to meet the deadlines for the supplemental briefing. Background: SC-2411 (Revised July 1, 2013) MINUTE ORDER On November 20, 2020, plaintiff Butler America, LLC (Butler America) filed its original complaint in this action asserting eight causes of action: (1) breach of contract; (2) breach of implied covenant of good faith and fair dealing; (3) misappropriation of trade secrets (Civ. Code, § 3426 et seq.); (4) misappropriation of trade secrets (common law); (5) conversion; (6) intentional interference with contractual relations; (7) intentional interference with prospective economic advantage; and (8) unfair business practices (Bus. & Prof. Code, § 17200 et seq.). On January 4, 2021, defendants UCOMMG, LLC (UCOMMG) and Kenneth W. Newbatt (K Newbatt) removed this matter to federal court. While this matter was before the United States District Court, defendants UCOMMG, K Newbatt, Bianca Newbatt (B Newbatt), Mitchell Lipkin, Michael Bellas, and WesTele Utility Solutions, LLC (WesTele) filed a motion to dismiss on March 26, 2021. (Evans decl. re pleadings, exhibit A.) Also on March 26, defendant Jimmie Garret Baker, Jr. (J Baker) filed a motion to compel arbitration. (Evans decl. re pleadings, exhibit B.) On April 5, Butler America filed its opposition to the motion to compel arbitration. (Totten decl. re pleadings, exhibit A.) On April 12, 2021, J Baker filed his reply as to the motion to compel arbitration. (Evans decl. re pleadings, exhibit C.) Still in federal court, on April 16, 2021, Butler America filed its first amended complaint (FAC). (Totten decl. re pleadings, exhibit B.) The FAC asserts five causes of action: (1) breach of contract; (2) breach of implied covenant of good faith and fair dealing; (3) misappropriation of trade secrets (Civ. Code, § 3426 et seq.); (4) intentional interference with prospective economic advantage; and (5) unfair business practices (Bus. & Prof. Code, § 17200 et seq.). As a consequence of the filing of the FAC, by order on April 19, the District Court denied as moot defendants’ motion to dismiss the original complaint. (Evans decl. re pleadings, exhibit D.) On April 30, defendants filed a motion to dismiss the FAC. (Evans decl. re pleadings, exhibit E.) Butler America filed its opposition to the motion to dismiss on May 17. (Totten decl. re pleadings, exhibits F, G.) Defendants filed their reply on May 24. (Evans decl. re pleadings, exhibit F.) On July 28, 2021, the District Court, without having ruled on the motion to dismiss, ordered the parties to show cause why the action should not be remanded to state court for lack of federal subject matter jurisdiction. (Evans decl. re pleadings, exhibit G [order of remand].) On August 3, the District Court issued its order remanding this action to this court and denied the motion to dismiss as moot. (Ibid.) The order of remand was received and filed in this court on August 17. On September 20, defendants UCOMMG, Unified Communications Group, Inc. (UCG), K Newbatt, B Newbatt, Lipkin, and Bellas (collectively, specially appearing defendants) filed their motion to quash service of summons for lack of personal jurisdiction. Concurrently with the motion to quash, the specially appearing defendants, together with defendants WesTele and Cynthia Baker (C Baker) (the generally appearing defendants), filed their demurrer to the FAC. (Note: The specially appearing defendants and the generally appearing defendants are collectively referred to simply as the “defendants.”) On October 5, 2021, the court entered its order on the stipulation of Butler America and J Baker to order to arbitration the claims as between those parties, and staying the action as between them pending disposition of the arbitration. On November 5, 2021, defendants filed their motion for terminating sanctions or, alternatively, for a protective order and for monetary sanctions. This motion is now set for hearing on February 18, 2022. On November 15, 2021, Butler America filed its second amended complaint (SAC) asserting six causes of action: (1) breach of contract; (2) breach of implied covenant of good faith and fair dealing; (3) SC-2411 (Revised July 1, 2013) MINUTE ORDER conversion; (4) intentional interference with contractual relations; (5) intentional interference with prospective economic advantage; and (6) unfair business practices (Bus. & Prof. Code, § 17200 et seq.). On November 18, 2021, Butler America filed its opposition to the motion to quash and to the demurrer. In opposition to the motion to quash, Butler America asserts that the filing of the SAC renders the motion moot or, alternatively, the motion should be continued to give Butler America the opportunity to conduct jurisdictional discovery. In opposition to the demurrer to the FAC, Butler America argues that the filing of the SAC renders the demurrer to the FAC moot. On November 19, 2021, defendants filed their motion to strike the SAC on the grounds that Butler America failed to seek leave to file the SAC. This motion is now set for hearing on February 18, 2022. Also on November 19, defendants filed their motion for sanctions pursuant to Code of Civil Procedure section 128.7. This motion is now set for hearing on February 25, 2022. Analysis: (1) Demurrer to FAC The demurrer to the FAC now before the court was brought by both the specially appearing defendants and the generally appearing defendants. The demurrer by the generally appearing defendants is not subject to the issues relating to personal jurisdiction raised by the specially appearing defendants’ motion to quash service of summons. Accordingly, the court will first address the demurrer as to the generally appearing defendants. As the parties have noted, Butler America has filed a second amended complaint after the filing of the demurrer to the FAC was filed. Ordinarily, the filing of an amended complaint renders moot a demurrer to a prior complaint. (JKC3H8 v. Colton (2013) 221 Cal.App.4th 468, 477.) The issue raised by defendants’ motion to strike the SAC (which motion is not now before the court) is that the SAC was not filed with leave of court. “A party may amend its pleading once without leave of the court at any time before the answer, demurrer, or motion to strike is filed, or after a demurrer or motion to strike is filed but before the demurrer or motion to strike is heard if the amended pleading is filed and served no later than the date for filing an opposition to the demurrer or motion to strike.” (Code Civ. Proc., § 472, subd. (a).) The SAC is, as its title indicates, the second amended complaint. Butler America filed its first amended complaint in the federal court and, upon remand, the FAC became the operative pleading in this court. As a consequence, the SAC was not filed as of right pursuant to section 472. The court construes the filing of the SAC as a concession that the demurrer to the FAC is in some part meritorious and the SAC is intended as the amended pleading to be offered in response to leave to amend after the sustaining of the demurrer to the FAC. Because this is the first demurrer to be heard by this court, the court would ordinarily grant leave to amend. As so construed, the court deems the SAC as filed following the sustaining of the demurrer to the FAC with leave to amend. For purposes of filing a response to the SAC, the court deems the SAC filed and served (without any extension as to means of service) as of the date of this hearing and thus the time for a response runs from December 3, 2021. Nothing in this ruling is to be construed as determining any particular argument made in the demurrer to the FAC. The court will address any issues regarding the sufficiency of the allegations as they appear in the SAC if and when challenged by an appropriate motion or pleading. Based upon the filing of the SAC in response to the demurrer of the generally appearing defendants, the demurrer to the FAC by the specially appearing parties is moot. SC-2411 (Revised July 1, 2013) MINUTE ORDER (2) Motion to Quash Service of Summons The filing of the SAC may or may not moot the motion of the specially appearing defendants to quash service of summons on the grounds of lack of personal jurisdiction. As noted above, the SAC changes the causes of action asserted and deletes the causes of action for misappropriation of trade secrets. In opposition to the motion, Butler America notes that it has initiated some jurisdictional discovery, the effect of which appears to be disputed, and, if the court is otherwise inclined to grant the motion to quash, requests a continuance to obtain jurisdictional discovery. “[W]hen jurisdiction is challenged by a nonresident defendant, the burden of proof is upon the plaintiff to demonstrate that ‘minimum contacts’ exist between defendant and the forum state to justify imposition of personal jurisdiction. [Citation.] The plaintiff has the right to conduct discovery with regard to the issue of jurisdiction to develop the facts necessary to sustain this burden.” (Mihlon v. Superior Court (1985) 169 Cal.App.3d 703, 710.) The court is not going to engage in an iterative process by which Butler America presents some evidence to support its position and, if it is not enough, then try again. Butler America is entitled to present all of its evidence and then have the court determine whether, when all of the evidence presented by all parties is considered, Butler America has met its evidentiary burden. Since Butler America asserts that it needs discovery to present all of its evidence, this matter will be continued to permit that discovery and for the parties to file supplemental papers. The court is also aware that the scope of discovery is an issue because of the limitations of Code of Civil Procedure section 2019.210, which provides: “In any action alleging the misappropriation of a trade secret under the Uniform Trade Secrets Act (Title 5 (commencing with Section 3426) of Part 1 of Division 4 of the Civil Code), before commencing discovery relating to the trade secret, the party alleging the misappropriation shall identify the trade secret with reasonable particularity subject to any orders that may be appropriate under Section 3426.5 of the Civil Code.” (Code Civ. Proc., § 2019.210.) The limitation of section 2019.210 applies (1) to an action alleging the misappropriation of a trade secret and (2) before commencing discovery relating to the trade secret. With respect to first issue, “Code of Civil Procedure section 2019.210 …, which provides that discovery relating to a trade secret may not commence until the trade secret is identified with ‘reasonable particularity,’ is not limited in its application to a cause of action under the Uniform Trade Secrets Act (UTSA) [citation], for misappropriation of the trade secret, but extends to any cause of action which relates to the trade secret.” (Advanced Modular Sputtering, Inc. v. Superior Court (2005) 132 Cal.App.4th 826, 830.) Thus, eliminating the misappropriation of trade secret claims from the SAC does not necessarily imply that the limitation of section 2019.210 does not apply to the remaining causes of action. With respect to the second issue, “discovery relating to the trade secret” may or may not overlap with jurisdictional discovery. “The purpose of section 2019.210 is as follows: ‘First, it promotes well- investigated claims and dissuades the filing of meritless trade secret complaints. Second, it prevents plaintiffs from using the discovery process as a means to obtain the defendant’s trade secrets. [Citations.] Third, the rule assists the court in framing the appropriate scope of discovery and in determining whether plaintiff’s discovery requests fall within that scope. [Citations.] Fourth, it enables defendants to form complete and well-reasoned defenses, ensuring that they need not wait until the eve SC-2411 (Revised July 1, 2013) MINUTE ORDER of trial to effectively defend against charges of trade secret misappropriation. [Citations.]’ [Citation.]” (Advanced Modular Sputtering, Inc. v. Superior Court, supra, 132 Cal.App.4th at pp. 833–834.) Whether discovery ostensibly aimed at jurisdictional issues would fall within discovery prohibited by section 2019.210 prior to trade secret identification would have to be determined based upon the nature of the discovery sought applying the legal standards consistent with the purpose of section 2019.210. The court does not have the occasion to make any determinations as to the propriety of any particular discovery as the matter is now presented to the court. The court expects, however, that if any disputes arise as to the propriety of discovery that the parties will exhaustively meet and confer to avoid the necessity of court intervention to the extent practicable. DARREL E. PARKER, EXECUTIVE OFFICER Minutes Prepared by: Kristi Temple , Deputy SC-2411 (Revised July 1, 2013) MINUTE ORDER