Booloon
v. Google
Filed 1/16/13 Booloon
v. Google CA2/3
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits
courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115.
IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND
APPELLATE DISTRICT
DIVISION
THREE
BOOLOON, INC., et al.,
Plaintiffs
and Appellants,
v.
GOOGLE INC., et al.,
Defendants
and Respondents.
B240049
(Los Angeles County
Super. Ct. No. SC112586)
APPEAL from an order of the Superior Court of
County,
Rita Miller, Judge. Affirmed in part,
reversed in part.
Qin Zhang, in pro. per., and for
Plaintiffs and Appellants.
Bostwick & Jassy, Gary L.
Bostwick, Jean-Paul Jassy and Kevin L. Vick for Defendants and Respondents.
_________________________
INTRODUCTION
Plaintiffs
and appellants Qin Zhang (Zhang) and Booloon, Inc. (Booloon) appeal an order in
favor of defendants and respondents Google, Inc. (Google) and Nick Mote
(Mote). The order sustained defendants’
demurrer to plaintiffs’ complaint without leave to amend and imposed
jointly and severally, in the amount of $10,982. We shall affirm the order with respect to the
demurrer and monetary sanctions against Zhang but reverse the order to the
extent it imposes monetary sanctions against Booloon. We shall also deny defendants’ motion for
sanctions on appeal.
FACTUTAL AND PROCEDURAL BACKGROUND
1. The
Parties
Zhang is an attorney. She claims to have developed “technology in
language processing†that can be used for internet searches. Zhang licensed her technology to Booloon, a
company she formed with her brother Hong Zhang.
Google is a publicly traded corporation.
Among Google’s services is a widely used search engine. Mote is an employee of Google.
2.
In May 2010, Zhang and Booloon filed
a lawsuit (the First Action) against Google and Mote in the Central District of
Los Angeles County Superior Court. Zhang
represented herself and Booloon in the First Action.
Plaintiffs’ operative pleading in
the First Action was their first amended complaint (FAC), which set forth
causes of action for (1) breach of confidence, (2) breach of oral contract, (3)
breach of implied-in-fact contract, (4) fraud, (5) constructive fraud,
(6) unjust enrichment, (7) constructive trust, and (8) invasion of
privacy. The gravamen of the FAC was
that Mote and Google allegedly misappropriated the technology Zhang developed
and licensed to Booloon. The FAC alleged
that Mote learned of the technology at a meeting he had with Zhang and others
at a coffee shop on June 1, 2008.
The trial court sustained
defendants’ demurrer without leave to amend to the first, second, third, sixth
and eighth causes of action in the FAC and subsequently granted defendants’
motion for summary judgment with respect to the remaining causes of action.
Before defendants filed their motion
for summary judgment, plaintiffs filed a motion for leave to filed a second
amended complaint (SAC). The proposed
SAC added new causes of action for breach of the implied-in-fact contract and
negligent misrepresentation. On April 6, 2011, the trial court denied the motion for leave to amend on the
grounds (1) plaintiffs unreasonably delayed bringing the motion, (2) defendants
were prejudiced by the delay, and (3) the proposed new claims were preempted by
federal copyright law.
On October 6, 2011, the trial court entered judgment in defendants’ favor. Plaintiffs timely appealed this judgment.
3.
On May 11, 2011, while the First Action was pending in the superior court,
plaintiffs filed a second lawsuit against defendants in the West District of
Los Angeles County Superior Court (the Second Action). Zhang represented herself and Booloon in the
Second Action. Plaintiffs did not file a
notice of related cases.
The complaint in the Second Action
set forth causes of action for (1) breach of implied-in-fact contract and (2)
negligent representation. These causes
of action were based on the same facts and same legal theories as the two new
causes of action in the proposed SAC in the First Action.
On May 19, 2011, defendants’ counsel sent a letter to Zhang demanding that she
dismiss the complaint in the Second Action immediately, and advising her that
defendants may seek sanctions pursuant to Code of Civil Procedure section
128.7.
On July 2011, in response to
defendants’ notice of related cases, the trial court deemed the First Action
and Second Action related.
On
or about October
28, 2011, defendants filed an “amendedâ€
demurrer
demurred to the complaint, and each cause of action therein, “pursuant to Code
of Civil Procedure § 430.10.†In
the alternative, defendants moved to strike the complaint, and each cause of
action therein, pursuant to Code of Civil Procedure sections 435 and 436. As a second alternative, defendants sought a
stay of the action pursuant to Code of Civil Procedure section 4310.10,
subdivision (c). The main ground for the
demurrer was that the complaint should be dismissed because “a party may not
file a new complaint to circumvent an adverse ruling in another action.†Defendants’ principal legal authority was
Siegel, LeVine & Mangel (1992) 6 Cal.App.4th 157 (Ricard), which we shall discuss post.
On or about October 28, 2011—the
same date they filed their amended demurrer—defendants also filed an answer to
the complaint As an affirmative
defense, the answer stated that the complaint and each cause of action therein
failed to state facts sufficient to state a cause of action.
On December 9, 2011, defendants
served a motion for sanctions pursuant to Code of Civil Procedure section
128.7. The notice of motion stated that
defendants moved for an award of $13,982 in sanctions in defendants’ favor
“against Qin Zhang, Esq., counsel for Plaintiffs Booloon, Inc. and Qin Zhang .
. . .†Defendants filed this motion on
January 5, 2012.
On January 31, 2012, the trial court
held a hearing on the demurrer and motion for sanctions and issued a minute
order regarding the same. The order
stated: “The court sustains the demurrer
without leave to amend and grants the motion for sanctions payable by
plaintiffs, jointly and severally, to defendants in the amount of $10,982.00
within 30 days.†The court did not
specify, in its tentative ruling or minute order, the specific statutory ground
upon which it sustained the demurrer.
Instead, it relied primarily on the Ricard
case. On March 22, 2012, plaintiffs
filed a notice of appeal of the
January 31, 2012, order.
name="_ftnref2" title="">[2]
4.
On May 25, 2012, we issued an
opinion adjudicating plaintiffs’ appeal of the judgment in the First
Action. (Booloon, Inc. et al. v. Google, Inc. et al. (May 25, 2012, B236734)
[nonpub. opn.].) One of the arguments
plaintiffs raised was that the trial court abused its discretion in denying
their motion for leave to amend their FAC.
We held, however, that plaintiffs forfeited this argument because
plaintiffs did not provide a sufficient appellate record. We also rejected each of plaintiffs’ other
arguments and affirmed the judgment.
5.
On September 17, 2012, defendants
filed a motion for sanctions in this court.
In the motion, defendants contend that plaintiffs’ appeal of the January
31, 2012, order is frivolous. Defendants
seek to recover sanctions in the amount of $21,865.55, which they contend is
the amount of attorney fees and costs they will incur defending this
appeal. On November 28, 2012, we
notified plaintiffs that we were considering imposing monetary sanctions on
them.
DISCUSSION
1.
We
review de novo the trial court’s order sustaining defendants’ demurrer without
leave to amend. (Maxton v. Western States Metals (2012) 203 Cal.App.4th 81,
87.) As an initial matter, we shall
address plaintiffs’ waiver argument.
They contend defendants waived their right to demur to the complaint by
simultaneously filing an answer. This is
simply not true. Code of Civil Procedure
section 430.30, subdivision (c) provides:
“A party objecting to a complaint . . . may demur and answer at the
same time.†Further, Code of Civil
Procedure section 472a, subdivision (a) provides: “A demurrer is not waived by an answer filed
at the same time.†Defendants therefore
did not waive their demurrer by simultaneously filing their answer.
Next,
plaintiffs argue defendants’ demurrer was “defective†because it was combined
with a motion to strike. We
disagree. If a defendant attacks a
complaint with a demurrer and motion to strike, both matters must be heard at
the same time. (Cal. Rules of Court,
rule 3.1322, subd. (b).) Although it is
better practice to file a demurrer and a motion to strike separately (Weil
& Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter
Group 2012) ¶ 7:162:1, p. 7(I)-66), there is no express rule prohibiting a
defendant from combining a demurrer and motion to strike in one document, as
was done here. Plaintiffs’ reliance on
misplaced because that case does not address the issue of whether a demurrer
and motion to strike can be filed in one document.
Plaintiffs
also argue the trial court should have stayed its ruling on the demurrer
because their appeal of the judgment in the First Action was still pending at
the time. They did not, however, make
this argument in their opposition to the demurrer, and thus forfeited it on
appeal. (Kaufman & Broad Communities, Inc. v. Performance Plastering, Inc.
(2006) 136 Cal.App.4th 212, 226.)
Plaintiffs
further argue the demurrer should have been overruled because it did not state
the specific statutory ground(s) it was based on. Code of Civil Procedure section 430.10
specifies nine different grounds for demurrer to a complaint. (Code Civ. Proc., § 430.10, subds.
(a)-(i).) Code of Civil Procedure
section 430.60 provides: “A demurrer
shall distinctly specify the grounds upon which any of the objections to the
complaint . . . are taken. Unless it
does so, it may be disregarded.†(Italics added.) Here, apart from requesting, in the
alternative, a stay pursuant to Code of Civil Procedure section 430.10,
subdivision (c),
name="_ftnref4" title="">[4] the demurrer did not distinctly specify the
subdivision(s) it was based on. Although
the trial court could have, in its discretion, disregarded the demurrer for
this procedural defect, it did not abuse its discretion by considering the
demurrer on the merits.
Finally,
plaintiffs argue the trial court should have overruled a general demurrer
pursuant to Code of Civil Procedure section 410.10, subdivision (e),
other subdivisions of the statute.
Defendants do not specify the statutory basis for their demurrer in
their brief. Instead, like the trial
court, they rely mostly on the Ricard
case.
In
circumstances very similar to those in this case. The court denied the plaintiffs’ motion for
leave to amend their complaint to add a claim for conspiracy to commit
fraud. (Ricard, supra, 6
Cal.App.4th at p. 159.) In response, the
plaintiffs filed a new complaint in a different district of the same superior
court asserting the identical claim they had sought to assert in the first
action. (Ibid.) The trial court
sustained the defendants’ demurrer to the new complaint without leave to amend,
entered a judgment of dismissal, and granted the defendants’ motion for
monetary sanctions. The Court of Appeal
affirmed. (Id. at p. 162.)
In
its opinion, the Court of Appeal stated that the trial court had “authority†to
sustain the demurrer to prevent the plaintiffs from “evad[ing] its prior ruling
by filing the second action.†(
The Court of Appeal, however, did not specify the particular statutory
ground for demurrer. Instead, it stated
the following: “A trial court has authority to strike sham pleadings, or those not filed in conformity with its
prior ruling. (See Code Civ. Proc., §
436; [citation].) With almost
frightening candor [the plaintiffs] acknowledge that the present suit was filed
solely to circumvent the court’s prior adverse ruling. Consequently, it could properly be
at p. 162., italics added.) The court further stated that the plaintiffs’
second suit “would merely have split their cause of action in violation of the
policy against misuse of court time.†(
Although
the Ricard court did not expressly
state it was treating the defendants’ demurrer as a motion to strike, its
reasoning implies it did just that.
Perhaps most telling is Ricard’s
reliance on Code of Civil Procedure section 436. This statute provides that a court may, upon
a motion of a party or “at any time in its discretion, and upon terms it deems
proper: [¶] . . . [¶] (b) Strike out all
or any part of any pleading not drawn or filed in conformity with the laws of
this state, a court rule, or an order of the court.†(Code Civ. Proc., § 436.) Ricard held that in response to a demurrer, a trial
court can strike a complaint pursuant to this statute if the complaint is
merely an attempt to evade the court’s prior ruling denying the plaintiff leave
to amend his pleading.
In
the present case, the trial court did not need to treat defendants’ demurrer
like a motion to strike because defendants, in the alternative, actually moved
to strike the complaint. Under
authority to sustain the demurrer or grant the motion to strike. We need not determine whether the trial court
should have done one or the other, or both, because we only review whether the
judgment
title="">[6] was correct, not the court’s reasoning. (Mayer
v. C.W. Driver (2002) 98 Cal.App.4th 48, 64.)
2. Motion
for Sanctions in the Trial Court
Code
of Civil Procedure section 128.7, subdivision (b) provides that when an
attorney or unrepresented party signs a pleading, he or she is certifying, “to
the best of the person’s knowledge, information, and belief, formed after an
inquiry reasonable under the circumstances,†that, inter alia, the claims
therein “are warranted by existing law or by a nonfrivolous argument for the
extension, modification, or reversal of existing law or the establishment of a
new law.â€
When
a defendant is served with a complaint that violates Code of Civil Procedure
section 128.7, he or she may seek monetary sanctions against the attorneys or
parties who violated the statute. (Code
Civ. Proc., § 128.7, subd. (c).) “To
recover sanctions under Code of Civil Procedure section 128.7, the movant need
not show subjective bad faith, but instead that the challenged conduct was ‘
“objectively unreasonable.†’ †(
Cal.App.4th 1205, 1225, fn. 7 (Corona).)
“Under
section 128.7, ‘[a] party seeking sanctions must follow a two-step
procedure. First, the moving party must
serve on the offending party a motion for sanctions. Service of the motion on the offending party
begins a [21]-day safe harbor period during which the sanctions motion may not
be filed with the court. During the safe
harbor period, the offending party may withdraw the improper pleading and
thereby avoid sanctions. If the pleading
is withdrawn, the motion for sanctions may not be filed with the court. If the pleading is not withdrawn during the
safe harbor period, the motion for sanctions may then be filed.’ †(Martorana
v. Marlin & Saltzman (2009) 175 Cal.App.4th 685, 698, fn. omitted
(Martorana).) If the moving party does not comply with the
strict procedural requirements of Code of Civil Procedure section 128.7, the
trial court must deny the motion. (
179 Cal.App.4th 535, 538; Corona,
supra, 172 Cal.App.4th at p. 1225,
fn. 7.)
We
generally review an order for monetary sanctions for abuse of discretion. (Martorana,
supra, 175 Cal.App.4th at p.
698.) “However, the proper
interpretation of a statute relied upon by the trial court as its authority to
award sanctions is a question of law, which we review de novo.†(Ibid.)
a. Sanctions
Against Booloon
Defendants
did not comply with the procedural requirements of Code of Civil Procedure
128.7 with respect to Booloon. Their
notice of motion only stated that they were seeking monetary sanctions against
Zhang, as counsel for plaintiffs. It did
not state defendants were seeking sanctions against Booloon too. Booloon thus was never given a 21-day
safe-harbor period, as the statute requires.
Yet the trial court imposed monetary sanctions on Booloon, jointly and
severally, with Zhang. Further, we agree
with Booloon that the court’s imposition of sanctions on the company in the
absence of a noticed motion seeking the same raises serious due process concerns. We therefore reverse the January 31, 2012,
order to the extent it imposes monetary sanctions on Booloon.
b. Sanctions
Against Zhang
As
explained ante, under
evade the trial court’s order denying them leave to add two causes of action in
the First Action by asserting the exact same causes of action in the Second
Action. Plaintiffs’ Second Action
therefore was objectively unreasonable.
Further, plaintiffs did not argue in their opposition to defendants’ motion
for sanctions for the extension, modification, or reversal of existing law or
the establishment of a new law. The
trial court therefore did not abuse its discretion in awarding sanctions
against Zhang.
3. Motion
for Sanctions in this Court
On
motion of a party or on our own motion, we may impose monetary sanctions on a
party or an attorney for taking a frivolous appeal or appealing solely to cause
delay. (Code Civ. Proc., § 907; Cal.
Rules of Court, rule 8.276(a).) “[A]n
appeal should be held to be frivolous only when it is prosecuted for an
improper motive—to harass the respondent or delay the effect of an adverse
judgment—or when it indisputably has no merit—when any reasonable attorney
would agree that the appeal is totally and completely without merit.†(In re
Marriage of Flaherty (1982) 31 Cal.3d 637, 650, accord Foust v. San Jose Construction Co., Inc. (2011) 198 Cal.App.4th
181, 188.)
Here,
there is no evidence that the subjective reason plaintiffs prosecuted this
appeal was to harass defendants or to delay an adverse judgment. Moreover, plaintiffs’ appeal was not totally
and completely without merit. Although
we reject most of plaintiffs’ arguments, we agree with plaintiffs that the
trial court erroneously granted monetary sanctions against Booloon. This error, by itself, justified the
appeal. We therefore deny defendants’
motion for sanctions on appeal.
DISPOSITION
Treating the order
sustaining the demurrer as a judgment of dismissal, we affirm. We also affirm the order imposing monetary
sanctions against Zhang in the amount of $10,982, but reverse the order
imposing monetary sanctions against Booloon.
In the interests of justice, the parties shall bear their own
KITCHING,
J.
We concur:
KLEIN, P. J.
ALDRICH, J.
their initial demurrer on or about August 15, 2011. Their initial demurrer was apparently never
adjudicated by the court.
challenging the trial court’s award of sanctions, the order is appealable. (Code Civ. Proc., § 904.1, subd.
(a)(11).) An order sustaining a demurrer
without leave to amend, however, is not appealable. (Melton
v. Boustred (2010) 183 Cal.App.4th 521, 527, fn. 1.) We nonetheless exercise our discretion to
treat the order as a judgment of dismissal, which is appealable. (Id.
at pp. 527-528, fn. 1.)
