Global Sales & Marketing v. Don Spare Enterprises CA2/5

CourtCalifornia Court of Appeal
DecidedJune 13, 2013
DocketB238495
StatusUnpublished

This text of Global Sales & Marketing v. Don Spare Enterprises CA2/5 (Global Sales & Marketing v. Don Spare Enterprises CA2/5) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Global Sales & Marketing v. Don Spare Enterprises CA2/5, (Cal. Ct. App. 2013).

Opinion

Filed 6/13/13 Global Sales & Marketing v. Don Spare Enterprises CA2/5 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 FIVE

GLOBAL SALES & MARKETING, B238495

Plaintiff and Appellant, (Los Angeles County Super. Ct. No. LC080831) v.

DON SPARE ENTERPRISES, INC. et al.,

Defendants and Respondents.

APPEAL from a judgment of the Superior Court of Los Angeles County, Frank J. Johnson, Judge. Affirmed. Lozoya & Lozoya, Frank J. Lozoya IV and Edmont T. Barrett, for Plaintiff and Appellant. Turner, Aubert & Friedman, D. Larene Pyles and Jonathan M. Deer, for Defendant and Respondent MTM Recognition. Law Offices of Glenn D. Hamovitz and Glenn D. Hamovitz for Defendants and Respondents Don Spare Enterprises, Inc., Don Spare, George Stone Enterprises, Inc. and George Stone. I. INTRODUCTION

The parties to this lawsuit were involved in an attempt to create an E-Commerce Company Store (ECS) designed to allow employees to make on-line purchases of items including those bearing the internal branding and logos of their employer. The parties hoped to market the ECS to nonparty SuperValu for use by the approximately 200,000 employees of SuperValu and its subsidiaries. SuperValu never gave final approval and none of the parties realized any profit. The present lawsuit was filed by one of the joint venturers against its former associates. The allegations are breach of contract, quantum meruit and fraud, resulting in claimed damages in excess of $5 million. The trial court denied a motion to compel discovery brought by plaintiff and granted all defendants’ summary judgment motions on multiple grounds. Judgments in favor of defendants were entered and plaintiff appeals. We affirm.

II. BACKGROUND

A. The parties

Plaintiff/appellant Global Sales & Marketing, LLC (Global), owned and managed by Dean Ladell, provides a variety of domestic and international business services, including design and development of on-line marketing and merchandising products. Working with defendants, Global developed the proposed ECS that is the subject of this lawsuit. Defendants Don Spare, Don Spare Enterprises, Inc. (Spare), George Stone and George Stone Enterprises, Inc. (Stone) are experienced sales representatives for a variety of products and services, including recognition programs and awards. Spare and Stone have for many years sold products and programs created by defendant Midwest Trophy Manufacturing Co., Inc. dba MTM Recognition (MTM). Spare and Stone are

2 independent contractors whose relationship with MTM is governed by a written agreement. MTM is a manufacturer and provider of awards and recognition products and services. It employs over 750 people, including 15 information technology developers who have designed and maintained over 500 recognition-related websites for MTM’s customers. MTM’s clients include the NCAA, college bowl game entities, the Special Olympics and a number of multi-national corporations. Nonparty Supervalu owns retail chain stores including Albertsons, Bristol Farms and Sav-on. Albertsons and Supervalu have purchased MTM’s recognition awards programs through Spare and Stone since 2003.

B. The Product

An “e-commmerce business package” consists of all aspects of a proposed on-line project, including the actual “front-end” operational plan and web site, as well as “back- end” services such as maintenance, accounting and tax collection. An e-commerce company store, or ECS, is an internet store that sells products branded with a company logo to the company’s employees. It is a different product than a recognition and awards program such as the ones purchased from MTM by SuperValu.

C. The First Amended Complaint

In its operative complaint Global seeks compensatory and punitive damages in excess of $5 million from defendants Spare, Stone and MTM based on breach of contract, quantum meruit and fraud.1 Global alleges that pursuant to a November 2006 oral contract, plaintiff agreed to develop a “business package for merchandise” and a 1 Defendants were jointly named in the breach of contract (first) and quantum meruit (second) causes of action. Plaintiff separately alleged fraud and deceit against defendant Spare and Stone (third) and MTM (fourth).

3 “permanent web platform” which the parties hoped would be adopted by SuperValu as its on-line company store. In return for its work Global was to receive “40% of the store sales for the life of the store,” and was allegedly promised additional compensation for its services. Global alleges that it worked steadily to comply with its contractual obligation until, on December 27, 2006, Global was falsely advised by defendants that Global’s work had been accepted by SuperValu, and that Global should continue perfecting the project. Global did so, responding to requests for additions to the program by defendants Spare and Stone. In October of 2007 a representative of defendant MTM falsely told Global the project was proceeding. In October and November of 2007 defendants Spare and Stone falsely informed Global that SuperValu’s top managers were completely committed, had named the platform “The Pro Shop,” and wanted to go full speed ahead toward a December 1, 2007 “launch” date. In November of 2007 a representative of defendant MTM supplied “base information” necessary for Global to move forward on the project. Global relied on these false statements and continued to perfect the ECS. All defendants allegedly made misrepresentations which induced Global to provide proprietary and trade secret information without compensation. Thereafter all defendants refused to pay, made material misrepresentations and, by means of false statements, took Global’s “proprietary information and protected trade secrets.” Global alleged that all defendants acted as agents for one another, and acted in a manner deserving of an award of punitive damages.

D. Global’s Motion To Compel Discovery of MTM’s Proprietary Information

In February 2010 the trial court denied, without prejudice, Global’s motion to compel discovery of MTM’s programming code and other electronic data. The court found the information sought constituted trade secrets governed, as to discovery, by Civil Code section 2019.210. The court ruled, in effect, that Global had not complied with that statute. We need not reach this issue on appeal in light of our affirmance of the summary judgment motions. Any claim that the discovery may have affected the trial court’s summary judgment rulings has been forfeited by Global’s failure to renew the motion to

4 compel prior to the summary judgment hearing. Further, our review of the entire record convinces us there was no abuse of discretion by the trial court, and that the discovery at issue could not have changed the result of the summary judgment rulings. (See Lickter v. Lickter (2010) 189 Cal.App.4th 712, 740.)

E. Defendants’ Motions For Summary Judgment Or Summary Adjudication

Defendants filed two similar motions for summary judgment or summary adjudication, one by Spare and Stone, the other by MTM. Both motions challenged Global’s ability to prove damages as to breach of contract and fraud, and argued any alleged damages were speculative. Both motions contended Global could not prove one or more elements of its quantum meruit claim, i.e.

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Global Sales & Marketing v. Don Spare Enterprises CA2/5, Counsel Stack Legal Research, https://law.counselstack.com/opinion/global-sales-marketing-v-don-spare-enterprises-ca25-calctapp-2013.