Future Films
Filed 1/24/13
Future Films USA v. Das CA2/1
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115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 ONE
FUTURE FILMS USA, LLC,
Plaintiff and
Appellant,
v.
SRIRAM DAS et al.,
Defendants and
Respondents.
B238222
(Los Angeles County
Super. Ct. No. SC112923)
APPEAL from a judgment of the Superior Court of Los
Angeles County, Jacqueline A. Connor, Judge. Reversed.
Rufus-Isaacs Acland & Grantham and Alexander
Rufus-Isaacs for Plaintiff and Appellant.
Lapidus & Lapidus, Jim D. Bauch and Evan Pitchford
for Defendant and Respondent Sriram Das.
Dykema Gossett, Craig N. Hentschel and Tamara A. Bush for
Defendant and Respondent Jonathan Bross.
——————————
Plaintiff Future Films, Inc. (Future) appeals
judgment after the trial court sustained defendants’ demurrers to its
basis of the sham pleading doctrine.
Future asserted claims for interference with
alleged that it owned the rights to a film by virtue of defendants’ default on
Future’s production loan to them. After
such default, Future entered into a distribution deal for the film with a third
party. Plaintiff’s initial complaint alleged
that defendants, in an email to the third party, claimed to control
distribution rights in the film and refused to provide a necessary song license
and proper credits to the film, which caused the third party to breach the
distribution contract. Defendant Sriram
Das (Das) demurred to the complaint asserting that the lack of rights did not
cause the third party to refuse to distribute the film because the lack of
proper licensure and credit meant the film could not be distributed in any
event. Thereafter, plaintiff filed a FAC
in which it changed these key allegations to assert that plaintiff could obtain
a song license and proper credits on its own, and that it was simply
defendants’ assertion that they owned the rights to the film that caused the third
party to refuse to distribute the film.
We find that the changed allegations were not material and thus the sham
pleading doctrine does not provide a basis for defendants’ demurrer, and
reverse.
FACTUAL
BACKGROUND AND PROCEDURAL HISTORY
1. Original Complaint,
Filed June 7, 2011
Plaintiff Future, a limited liability company, is a film
finance and production company.
Defendants Das and Jonathan Bross (Bross) are film producers who
acquired the rights to produce a motion picture entitled “Veronika Decides to
Die†(Film). Future alleged that
pursuant to a loan agreement (a copy of which was not attached the complaint),
it lent over $4 million (Loan) to an entity known as VDD Productions (VDD
Productions), which was controlled by defendants, to produce the Film.
was to be repaid by September 2009.
The Film was produced and released in certain foreign
territories, but the Loan was not repaid.
By letter dated October 12, 2009, Future notified defendants that the Loan was in
default, and that Future would be enforcing its rights under the power of sale
in the Loan. The power of sale authorized Future to lease, license, sell or
otherwise dispose of the Film and related distribution rights, and to enter
into those agreements it deemed appropriate.
Future took over control of the Film, and attempted to minimize its
losses by arranging to have the Film distributed worldwide. Defendants were aware of Future’s actions.
Defendants, however, preferred the Film be released
theatrically in North
America because that
would benefit their individual careers.
Future disagreed with this course of action because it wanted the most
profitable distribution deal it could get.
Nevertheless, in late 2009 or early 2010, defendants advised Future that
a distributor named First Look was willing to distribute the Film in North America and was offering to release the Film theatrically
and through other channels (television, home entertainment).
On June 25, 2010, Future entered into a contract with Phase 4
Films, Inc. (Phase 4) to distribute the Film in North America commencing in February 2011 (Phase 4
contract). The Phase 4 contract did not
provide for a theatrical release, and thus had less “vanity appeal†for
defendants, but was potentially more profitable for Future because Future would
receive a substantially larger percentage of receipts from the Film than it
would under the First Look deal. Future
believed defendants knew of the Phase 4 contract. Future also asserted that when defendants
learned that Phase 4 was planning to distribute the Film, they conspired to
induce Phase 4 to breach the Phase 4 contract.
On February 18, 2011, Das emailed Dan Wanamaker, an executive at Phase
4, with a copy of the email to defendant Bross, and asserted that defendants
controlled the Film and they had not consented to its release (February 18
email). Das specifically stated that,
“[Bross] and I are the producers, an entity controlled by us is the
rightsholder of the film, and we have not consented to this proposed release.†Plaintiff alleged the email was sent as part
of the conspiracy to cause Phase 4 to breach the Phase 4 contract.
By letter dated March 9, 2011, Future informed defendants that their conduct
constituted wrongful interference with Future’s rights and relationships, and
demanded that defendants inform Phase 4 their assertions in the February 18
email were a mistake.
On March 11, 2011, defendants informed Phase 4 that they
had not paid for a North American license (License) for one of the songs
featured in the Film’s soundtrack (a song by Radiohead entitled “Everything in
its Right Place†(Song)) and also informed Future that the Film’s credits
needed to be changed. Defendants knew
that the Film could not be released without the necessary license and proper credits,
and because defendants failed to obtain them, the Film could not be released in
North America. Thus,
defendants asserted that until the defendants purchased a license to the Song
and changed the Film’s credits, it could not be released in North America.
However, Future asserted that defendants in fact knew
that Future possessed all of the necessary copyrights in the Film which would
entitle it to enter into distribution agreements for the Film, and that the
film could be released in North
America without the
license and correct credits. As a result
of defendant’s February 18 email and their failure to acquire the license or to
provide a print that contained the correct credits, Phase 4 declined to
distribute the Film.
Plaintiff’s initial complaint stated two claims for
relief: intentional interference with
contractual relations and declaratory relief.
Future alleged that because of defendant’s false claims that they controlled
the Film, Phase 4 declined to distribute the Film, and defendant’s conduct
constituted interference with contract.
Plaintiff also sought a declaration that defendants had no right to
interfere with Future’s right to determine how the Film was distributed by
selecting a distributor in each available territory.
On July 18, 2011, defendant Das demurred to the complaint,
contending that the intentional interference claim did not establish
causation. Specifically, Das asserted
the complaint established that in any event, in spite of Das’s actions, the
Film could not be distributed in North America
because the Film did not have all of the necessary licenses and credits, and
plaintiff failed to allege any contract with Das that he deliver those licenses
and credits. Rather, Das asserted that
even if he had not communicated with Phase 4, the Film could not be distributed
in North America; hence, his actions caused no harm to plaintiff.
Filed August 30, 2011
Before the hearing on Das’s demurrer, plaintiff
filed a FAC alleging the same two claims for relief. Plaintiff’s attorney, in a separate
declaration filed in response to Das’s demurrer to the FAC explained that in
reviewing Das’s demurrer to the original complaint, he realized that there was
nothing that prevented Future from buying, on its own, a license to the Song in
the Film directly from the copyright holder; therefore the allegation in the
original complaint that the Film could not be released unless VDD Productions
obtained a license to the Song was incorrect.
Further, Future, because it now controlled the Film by virtue of its
power of sale, could change the credits on the Film by instructing the film
laboratory to make the necessary changes.
These two actions would enable Phase 4 to release the Film in North America without risk of being sued by any producer whose
credit needed to be changed.
In coming to this clarity, Future relied on the March 11,
2011 letter from VDD Productions and Das’s counsel advising Future that VDD
Productions and Das asserted that the Film in Future’s possession was cleared
for foreign distribution, while a more current version of the Film, of which
Future was aware, included music cleared for exploitation in North
America. Further, Phase 4 was apparently
unaware of these facts regarding licensure and credits at the time it refused
to distribute the Film because the specific assertions of the March 11,
2011 letter came after
Phase 4 notified Future of its refusal to proceed with the Phase 4 contract.
Accordingly, counsel explained that the allegations of
the FAC were the same as the original complaint, except that plaintiff omitted
the allegations contained in paragraphs 4, 21, and 22, to wit:
(1) defendants were personally obligated to provide a license for the
music and a print of the Film that had accurate credits, (2) until defendants
purchased a license for the Song and provided Future with a print of the Film
that had correct credits, the Film could not be distributed in North America;
and (3) Phase 4 refused to distribute the Film because defendants had not
provided a license for the Song or a print of the Film with the correct
credits.
The FAC at paragraph 21 and 22 contained the explanation
for the changes, and alleged that:
The soundtrack of the Film contained a song by Radiohead
entitled “Everything in its Right Place.†Das
informed Future in March 2011 that a license to use the Song in the Film in North America had not been obtained, and as therefore, Phase 4
could not have distributed the Film in any event, and defendants did not cause
a breach of the Phase 4 contract.
same time, Das informed Future that the credits to the Film should be changed,
but did not specify how. Future asserted
that the credit issue would not have prevented Phase 4 from releasing the Film.
to FAC
Demurrer
Das demurred, asserting that pursuant to the sham
pleading doctrine, Future was bound by its allegations in the
not be distributed because it did not have an appropriate song license and
correct credits. Das contended that
regardless of any email he sent to Phase 4, in no event could the Film be
distributed in North America because of these deficiencies. Further, Das’s actions were made in his
capacity as principal of VDD Productions, and because he was acting in the
financial interests of VDD Productions—whose interests would have been
prejudiced by a distribution contract made without all licensing and credit
clearances—his communications with Phase 4 were privileged. Finally, Das argued that Future attempted to
“‘take back’†its prior allegations that the Film could not be distributed
because of the lack of licenses by arguing in paragraphs 21 and 22 that nothing
prevented Future or Phase 4 from purchasing a license, and the absence of
license therefore would not have prevented Phase 4 from distributing the Film.
In opposition, Future argued that its original complaint
was unverified, and the sham pleading doctrine applied to verified complaints;
it was seeking to amend a legal conclusion, rather than changing the facts; and
the FAC alleged that Das was acting in his individual capacity. In particular, Future asserted that its
principal allegations—that Phase 4 did not distribute the Film because of the
February 18 email—had not changed.
Rather, what had changed was Future’s allegation that it or Phase 4
could easily have bought a license for the Film and obtained correct credits,
which were tasks that did not need to be performed by VDD Productions. Future’s attorney submitted a declaration in
which he explained the revisions in the FAC.
In reply, Das argued that the sham pleading doctrine
applied to unverified pleadings; plaintiff had not adequately explained its
changed allegations, and the changed allegations were facts, not legal
conclusions; and the demurrer should be sustained on privilege grounds. Das also objected to Future’s attorney’s
declaration.
At the November 17, 2011 hearing on Das’s demurrer, the
court sustained the demurrer without leave to amend. The court found that plaintiff had failed to
adequately explain the omitted allegations because “In light of the unambiguous
allegations in the original complaint that the license and film credits issue
caused Phase 4 to decline to distribute the film, plaintiff must provide
evidence which clearly establishes that the earlier allegations were the result
of mistake or inadvertence. The Court
finds that plaintiff has failed to meet that burden. Plaintiff’s counsel simply states that he
‘reanalyzed’ the situation after reading Das’s first demurrer and ‘realized’
that there was nothing to stop FUTURE from buying the license for the song or
correcting the film credits. This is
completely speculative and does not serve to ‘unring the bell.’†The court concluded that plaintiff could not
show the alleged harm was proximately caused by Das’s conduct, and both of
plaintiff’s claims failed.
(b) Bross’s Demurrer
Bross also demurred arguing that the FAC alleged that he
was copied on an email authored by Das, but alleged no further wrongdoing. Bross also argued that the FAC contradicted
its earlier allegations, and plaintiff had failed to allege Bross engaged in a
conspiracy with Das.
name="_ftnref6" title="">[6]
Plaintiff filed its opposition to Bross’s demurrer on
November 22, 2011, after the court sustained Das’s demurrer to the FAC. Future argued that it was permissible to
change the facts because the FAC provided an adequate explanation; the
allegations that were omitted were legal conclusions; and the FAC contained
sufficient allegations against Bross to allege a conspiracy because it alleged
that Bross knew about the contract and formed a conspiracy with Das to induce
Phase 4 to breach the contract; the February 18 email was copied to Bross, and
was clearly written on behalf of both Das and Bross; Bross knew the February 18
email misrepresented the situation to Phase 4, and would cause Phase 4 to
believe that Future did not control the rights; Bross concurred with the
sending of the February 18 email; the email was sent pursuant to the conspiracy,
and at no time did Bross attempt to disavow to Phase 4 any of the allegations
of the February 18 email. Further, the
FAC alleged that Das and Bross were acting in their individual capacities, and
nowhere was VDD Productions mentioned in the February 18 email.
In support, Future submitted the declaration of its
attorney that stated that Future was unaware any of the credits needed to be
changed until it received the March 11, 2011 letter. Future also submitted the Declaration of
Barry Meyerowitz, the president and CEO of Phase 4, which stated that in
preparation for releasing the Film, Meyerowitz realized that the Film was
missing licenses for all music used in the Film. Phase 4 contacted VDD Productions, Das, and
Bross about the missing licenses. Upon
receipt of the February 18 email in reply, Meyerowitz forwarded it to
Future. Meyerowitz believed, based upon
the February 18 email, a controversy over who held the rights to the Film
existed, and that Phase 4 would not distribute the Film until the uncertainties
were resolved. On February 25,
2011, Meyerowitz received a letter from an attorney representing Veronica
Decides to Die Holdings LLC (VDDH); the letter was copied to Das and Bross. In that letter, VDDH asserted it was the
exclusive owner of the rights to the Film and that VDDH would sue Phase 4 for
copyright infringement if it distributed the Film. Phase 4 sent the letter to Future on February
28, 2011, and indicated that Phase 4 would not distribute the Film until the
controversy was resolved. Phase 4 was
unaware of any problem involving the credits of the Film before making this
determination, and this issue played no part in Meyerowitz’s decision.
The trial court heard Bross’s demurrer on December 7,
2011. The court sustained the demurrer,
finding that Phase 4 declined to distribute the Film because of the Song
License and credits issues, but there was nothing to show these problems were
somehow intentionally caused by defendants or that such issues prevented
distribution of the Film. The court
pointed to the allegations of paragraph 21 of the FAC that “there was nothing
to prevent FUTURE or PHASE 4 from purchasing a license at that time. Thus, the absence of a LICENSE would not have
prevented PHASE 4 from distributing the FILM, and did not cause PHASE 4 to
breach the PHASE 4 CONTRACT by refusing the release the FILM.†The court concluded, “In light of the
unambiguous allegations of the original complaint that the license and film
credits issues caused Phase 4 to decline to distribute the Film, plaintiff must
provide evidence which clearly establishes that the earlier allegations were
the result of mistake or inadvertence.â€
The court found that plaintiff’s lawyer’s re-analysis of the facts was
simply speculative and insufficient to overcome the inconsistent allegations,
and because the first cause of action for intentional interference failed, the
declaratory relief action failed along with it.
DISCUSSION
Plaintiff argues that
the sham pleading doctrine does not bar the FAC because the Film could be
released even though defendants had not obtained a song license or proper
credits, and thus removal of these allegations is not fatal to its claim
because Phase 4 refused to distribute the Film solely based upon the February
18 email. Specifically, that email
raised an uncertainty over who owned the rights to the Film; further, plaintiff
moved promptly to amend its complaint and in any event, the omitted allegations
were contentions, deductions, or conclusions of fact and law to which the sham
pleading doctrine does not apply. In
addition, plaintiff argues that the allegations against Bross establish a cause
of action for conspiracy and defendants’ argument that their actions were
privileged because they were made on behalf of VDD Productions has no merit.
Das contends that
Future’s explanation is insufficient to avoid the sham pleading doctrine
because Future had sufficient time before filing its complaint to determine the
correct facts, and further demonstrates Future’s lack of good faith and
promptness; in any event, the demurrer could have been sustained on the theory
that his communications with Phase 4 were made in his capacity as principal of
VDD Productions, and thus were privileged.
Bross joins in Das’s arguments, and also asserts that Meyerowitz’s
declaration, which was submitted after the court’s ruling on Das’s demurrer,
constituted a third version of the
facts which purported to show that Phase 4 held off due to the March 11, 2011
letter. Further, that version of the
facts did not overcome plaintiff’s problems with causation, and established
that the dispute, if any, was contractual.
In addition, Bross contends that plaintiff cannot show he engaged in any
intentional acts, his passive receipt of an email copy cannot be translated
into a conspiracy.
The function of a demurrer is to test the
sufficiency of a pleading as a matter of law, and we apply the de novo standard
of review in an appeal following the sustaining of a demurrer without leave to
amend. (Holiday Matinee, Inc. v. Rambus, Inc. (2004) 118 Cal.App.4th 1413,
1420.) A complaint “is sufficient if it
alleges ultimate rather than evidentiary facts,†but the plaintiff must set
forth the essential facts of his or her case “with reasonable precision and
with particularity sufficient to acquaint [the] defendant with the nature,
source, and extent†of the plaintiff’s claim.
Legal conclusions are insufficient.
(Doe v. City of Los Angeles (2007)
42 Cal.4th 531, 550 & 551, fn. 5.)
“We assume the truth of the allegations in the complaint, but do not
assume the truth of contentions, deductions, or conclusions of law.†The trial court errs in sustaining a demurrer
“if the plaintiff has stated a cause of action under any possible legal theory,
and it is an abuse of discretion for the court to sustain a demurrer without
leave to amend if the plaintiff has shown there is a reasonable possibility a
defect can be cured by amendment.†(
242, 247.)
the FAC
Where the amended complaint omits facts alleged in a
prior complaint, or pleads facts inconsistent with a prior complaint, any
inconsistency must be explained, otherwise we will read into the amended
complaint such omitted or inconsistent facts.
(Vallejo Development Co. v. Beck
Development Co. (1994) 24 Cal.App.4th 929, 946; Owens v. Kings Supermarket (1988) 198 Cal.App.3d 379, 383–384 (
allegations in an earlier pleading are read into a later pleading, and the
allegations inconsistent therewith are treated as sham and disregarded].) “The purpose of the [sham pleading] doctrine
is to enable the courts to prevent an abuse of process. [Citation.]
The doctrine is not intended to prevent honest complainants from
correcting erroneous allegations or to prevent the correction of ambiguous
facts.†(Hahn v. Mirda (2007) 147 Cal.App.4th 740, 751; see also
127.) Plaintiff can avoid the affect of
earlier admissions by including in the subsequent complaint an explanation why
the earlier admissions are incorrect. (
Supreme Court has also long since “made it clear that ‘a party should be
allowed to correct a pleading by omitting an allegation which, it appears, was
made as the result of mistake or inadvertence.’†(Reichert
v. General Ins. Co. (1968) 68 Cal.2d 822, 836; see also
not a sham pleading, despite omission of alternate factual allegation contained
in previous complaint].) The requirement
that the explanation for inconsistency be merely “plausible†is consistent with
the standard by which all pleadings are judged:
that is, that courts “must assume the truth of the complaint’s properly
pleaded or implied factual allegations.
[Citation.]†(
31 Cal.4th 1074, 1081.) Whether or not
the complaint is verified does not affect the sham pleading analysis. (Pierce
v. Lyman (1991) 1 Cal.App.4th 1093, 1109.)
Illustrating the reach of these principles are
Cal.App.4th 408 (Deveny)
v. Kings Supermarket, supra,
injury claim against defendant market, claiming the market controlled the
street where the injury occurred. The
market demurred, contending the street was controlled by the city, and
plaintiff’s amended complaint asserted that the accident occurred on the
market’s premises. Owens held that the subsequent allegation could be disregarded as a
sham because plaintiff provided no explanation for the change in factual
allegations. (Id. at p. 384.) In
the defendant drug company failed to disclose adverse test results. In the original complaint, plaintiffs alleged
that “‘[d]efendants withheld scientific and clinical knowledge that Esterom was
not detected in the blood or urine of patients’ and that ‘[w]hen Plaintiffs discovered
that Entropin had omitted to disclose material information concerning the
absorption of Esterom, Plaintiffs contacted counsel and began an
investigation.’†(Id. at p. 423.) After
the defendant’s motion for summary judgment on statute of limitations grounds
based on the existence of publicly available information on its website
regarding the outcome of the blood and urine tests, the plaintiffs amended
their complaint, alleging that the information on the website, while accurate,
“did not provide plaintiffs or other investors with any reason to believe that
Esterom was not absorbed or was not effective,†and was thus insufficient to
trigger the statute of limitations. (
doctrine, contending the plaintiffs’ change in theory of liability from “you
didn’t tell us about the tests,†to “okay, you did tell us about the tests, but
you didn’t explain their significance†was an instance of sham pleading. The Deveny
court noted that plaintiff’s counsel had offered an explanation for the
change, namely, that while he had initially been unaware of information that
was publicly available, after speaking with experts, he realized the data
provided on defendant’s website was simply insufficient to put potential
investors on notice of the drug’s problems.
Thus, Deveny concluded this
effort was sufficient to avoid the sham pleading doctrine, stating that “the
sham pleading doctrine does not apply because [plaintiff’s counsel] offered a
plausible explanation for the amendment, i.e., that he had erred in relying on
the failure to disclose the blood and urine data as the basis for the complaint
because further discovery and consultation with experts had shown that such
data was inconclusive.†(
Here, the changes in plaintiff’s theory of the case, and
the facts supporting it, are not contradictory and are therefore not governed
by the sham pleading rule. Defendants’
assertion that they owned the Film’s rights is different than plaintiff’s assertion
that defendants had failed to obtain proper license and credits, and
plaintiff’s initial belief that its claim was based upon this failure. Thus, at first, plaintiff asserted that
defendants’ alleged failure to secure a song license and correct credits
prevented Phase 4 from performing the Phase 4 contract. Upon reanalyzing its case in light of Das’s
demurrer—which was primarily based on a causation theory—plaintiff realized
that the lack of a song license or proper credits could not have caused Phase 4
to refuse to perform because plaintiff could have obtained the license and
revised credits on its own. Rather, it
was defendants’ broad assertion in the February 18 email that defendants
controlled the Film in its entirety that caused Phase 4 to balk at the Phase 4
contract. These different allegations
from the original complaint to the FAC are not an attempt to change the facts,
as the plaintiff did in Owens. Instead, plaintiff simply realized that its
allegations were focused on the wrong subset of facts, and attempted to correct
that. Thus, the omission of the license
and credit allegations from the FAC have been satisfactorily explained and do
not constitute a sham. The trial court
erred in sustaining the demurrer to both of plaintiff’s causes of action on the
basis of the sham pleading rule.
III. Justification
for Communication
Das asserts that any
statements he made were made on behalf of VDD Productions and thus were
privileged. We disagree that such
statements were privileged as a matter of law.
An action in tort “will lie for the intentional
interference by a third person with a contractual relationship either by
unlawful means or by means otherwise lawful when there is a lack of sufficient
justification.†(Herron v. State Farm Mutual Ins. Co. (1961) 56 Cal.2d 202,
205.) To recover for inducing breach of
contract, a plaintiff must establish (1) the existence of a valid
contract; (2) the defendant had knowledge of the contract and intended to
induce its breach; (3) the contract was in fact breached by the third party;
(4) the breach was proximately caused by defendant’s unjustified and wrongful
conduct; and (5) that the foregoing resulted in damage to plaintiff. (Abrams
& Fox, Inc. v. Briney (1974) 39 Cal.App.3d 604, 608.) Justification for the interference is an
affirmative defense and not an element of plaintiff’s cause of action. (Lowell
v. Mother’s Cake & Cookie Co. (1978) 79 Cal.App.3d 13, 18–19.)
Justification “is the
narrow protection afforded a party where (1) he [or she] has a legally
protected interest, (2) in good faith threatens to protect it, and (3) the
threat is to protect it by appropriate means.â€
(Richardson v. La Rancherita (1979)
98 Cal.App.3d 73, 81.) “‘Where the
defendant acts to further his own advantage, other distinctions have been
made. If he has a present, existing
economic interest to protect, such as the ownership or condition of property,
or a prior contract of his own, or a financial interest in the affairs of the
person persuaded, he is privileged to prevent performance of the contract of
another which threatens it; and for obvious reasons of policy he is likewise
privileged to assert an honest claim, or bring or threaten a suit in good
faith.’ [Citation.]†(Ibid.)
Here, VDD Productions
may have had an interest in either protecting its rights to the Film, or
ensuring that it was not the subject of a copyright infringement action. As Future asserts in the FAC, VDD Productions
knew that such justification was not based upon any good faith belief in VDD Production’s
rights to the Film. Thus, assuming for
the sake of demurrer that the facts of the FAC are true, VDD Productions would
not be entitled to the defense of justification if, as Future alleges,
“defendants knew that FUTURE possessed all of the necessary copyrights and
other interests that would entitle FUTURE to enter into an agreement with
whomever it wished to distribute the FILM in North America, and there was no
good faith basis upon which they could assert either that ‘an entity controlled
by us is the rightsholder of the film’ or that ‘we have not consented to this
proposed release.’â€
Civil conspiracy is not
an independent tort. (
Arabia Ltd. (1994) 7 Cal.4th 503, 511.) “Standing alone, a conspiracy does no harm and
engenders no tort liability. It must be
activated by the commission of an actual tort.â€
(Ibid.) “‘The major significance of a conspiracy
cause of action “lies in the fact that it renders each participant in the
wrongful act responsible as a joint tortfeasor for all damages ensuing from the
wrong . . . regardless of the degree of his activity. [Citation.]â€â€™
The essence of the claim is that it is merely a mechanism for imposing
vicarious liability; it is not itself a substantive basis for liability. Each member of the conspiracy becomes liable
for all acts done by others pursuant to the conspiracy, and for all damages
caused thereby.†(Berg & Berg Enterprises, LLC v. Sherwood Partners, Inc. (2005)
131 Cal.App.4th 802, 823; Applied
Equipment Corp., at pp. 510–511 [conspiracy is “a legal doctrine that
imposes liability on persons who, although not actually committing a tort
themselves, share with the immediate tortfeasors a common plan or design in its
perpetrationâ€].)
“‘[T]he basis of a
civil conspiracy is the formation of a group of two or more persons who have
agreed to a common plan or design to commit a tortious act.’ [Citations.]
The conspiring defendants must also have actual knowledge that a tort is
planned and concur in the tortious scheme with knowledge of its unlawful
purpose. [Citations.] [¶]
However, actual knowledge of the planned tort, without more, is
insufficient to serve as the basis for a conspiracy claim. Knowledge of the planned tort must be
combined with intent to aid in its commission.â€
(Kidron v. Movie Acquisition Corp.
(1995) 40 Cal.App.4th 1571, 1582.)
Knowledge and intent “‘may be inferred from the nature of the acts done,
the relation of the parties, the interest of the alleged conspirators, and
other circumstances.’†(
Here, the FAC alleged
that “the FEBRUARY 18th email was copied to BROSS, who concurred with the
sending of the email which was sent with his prior knowledge and consent, and
pursuant to his conspiracy with DAS to induce PHASE 4 to breach the PHASE 4
CONTRACT. At no time did BROSS contact
FUTURE or PHASE 4 to disavow any of the statements made by DAS on behalf of
himself and BROSS.†This allegation
states that Bross, as a principal of VDD Productions, who had knowledge of the
email, consented to and acquiesced in its transmission and intended to aid Das
as part of a plan with Das to cause Phase 4 to breach the Phase 4
contract. As such, these allegations,
which we assume to be true for purposes of demurrer, are sufficient to state a
claim that Bross conspired with Das to interfere with the Phase 4 contract.
DISPOSITION
The judgment is
reversed. Appellant is to recover its
NOT TO BE PUBLISHED.
JOHNSON,
J.
We concur:
MALLANO, P. J. CHANEY, J.
name="_ftn1" title="">[1] In accordance with the rules of appellate review, we treat the
allegations of the complaint and FAC as true for purposes of demurrer.
name="_ftn2" title="">[2] VDD Productions was not named as a defendant in the complaint.
