Krantz v. Bt Visual Images, L.L.C

89 Cal. App. 4th 164, 107 Cal. Rptr. 2d 209, 2001 Daily Journal DAR 4989, 2001 Cal. Daily Op. Serv. 4072, 2001 Cal. App. LEXIS 370
CourtCalifornia Court of Appeal
DecidedMay 18, 2001
DocketNos. A085999, A087341, A089575
StatusPublished
Cited by59 cases

This text of 89 Cal. App. 4th 164 (Krantz v. Bt Visual Images, L.L.C) 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
Krantz v. Bt Visual Images, L.L.C, 89 Cal. App. 4th 164, 107 Cal. Rptr. 2d 209, 2001 Daily Journal DAR 4989, 2001 Cal. Daily Op. Serv. 4072, 2001 Cal. App. LEXIS 370 (Cal. Ct. App. 2001).

Opinion

Opinion

SEPULVEDA, J.

These are three appeals from a final judgment and satellite orders entered by the San Francisco County Superior Court in a suit for damages for breach of contract, interference with prospective economic advantage, and defamation. We are asked by plaintiff-appellant to rule the sustention of a demurrer to the amended complaint without leave to amend was erroneous as a matter of law, the rulings granting defendants partial summary judgment/summary adjudication improperly shifted the burden of proof, and a series of discovery scrimmages were wrongly refereed by a court commissioner, preventing plaintiff from obtaining evidence necessary to overcome some 17 motions in limine on the eve of trial. Evaluated by the trial court under an erroneous standard, it is argued, these motions were granted, leading to a final judgment of nonsuit against plaintiff.

As will appear, plaintiff’s challenges to the judgment have merit. The demurrer was erroneously sustained because the amended complaint adequately alleged conduct by defendants that was “wrongful” by a measure other than the interference itself; the motions for summary judgment/summary adjudication improperly shifted the burden of proof; and the motions in limine, evidently evaluated under the wrong standard, erroneously led to the judgment of nonsuit. We therefore reverse the judgment and remand for additional proceedings. We dismiss the appeals from the satellite orders awarding and refusing to tax certain costs and denying a motion to award attorneys’ fees; the judgment on the merits having been vacated, these matters are moot.

Background

Because we review orders sustaining demurrers and granting summary judgment de novo, we take the facts alleged in the amended complaint as true. (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith (1998) 68 Cal.App.4th 445, 459-460 [80 Cal.Rptr.2d 329] [general demurrer]; Union Bank v. Superior Court (1995) 31 Cal.App.4th 573, 579 [37 Cal.Rptr.2d 653] (Union Bank) [summary judgment].) Both plaintiff Steven M. Krantz and [168]*168defendants (the latter we sometimes collectively refer to as Tandberg)1 are in the business of marketing telecommunications systems and components; defendants are headquartered in Virginia, plaintiff in San Francisco and Marin Counties. Beginning in 1993, at Tandberg’s invitation, plaintiff agreed to join its “integrator/distributor” program under which Tandberg supplied video conferencing units to distributors for sale in the United States. Pursuant to that arrangement, plaintiff purchased video conferencing equipment manufactured by Tandberg for resale to customers, receiving technical support from Tandberg, who publicized plaintiff as one of its distributors.

In October 1994, plaintiff alleged, he and Tandberg entered into a partly oral, partly written contract termed a “reseller agreement,” encompassing the counties of San Francisco and Marin. Under the reseller agreement, defendant appointed plaintiff a Tandberg distributor, with the right to sell its video conferencing equipment and other products. Thereafter, plaintiff established a sales account with Kaiser Permanente in Oakland, California, recommending products to that company and learning to customize video conferencing systems using modular components and a variety of hardware and software supplied by several manufacturers, rather than “off the shelf’ systems. Plaintiff informed defendants of his developing relationship with Kaiser and asked for help in creating business opportunities for the sale of defendants’ video conferencing products to Kaiser nationwide.

In time, the amended complaint alleged, plaintiff and one of his subcontractors succeeded in developing a custom modular video conferencing system for Kaiser’s use in its own applications, using specific components that could be added or removed. The custom modular system was developed by plaintiff in anticipation of bidding for Kaiser’s video conferencing business within and outside the Bay Area. In 1994, when Kaiser solicited proposals to supply 24 video conferencing systems in custom configurations for use in its Kansas City and Denver operations areas, plaintiff approached Tandberg with the suggestion they team up to bid jointly on the Kaiser proposal. According to the amended complaint, plaintiff proposed using Tandberg components for the system he had developed for Kaiser’s use, with plaintiff supplying the other components. Defendants agreed to plaintiff’s proposal to bid on the Kaiser project jointly. To enhance their chances of submitting the winning bid, plaintiff agreed with defendants to reduce his [169]*169usual distributor profit margin on the sale of defendants’ components for the Kaiser bid only.

The parties also orally agreed, the amended complaint continued, that if their joint Kaiser bid was successful, plaintiff would provide the other brand name components used in the system and would assemble and install the video conferencing units for Kaiser. They further agreed plaintiff would receive an increased profit margin on all business from Kaiser resulting from the bid award and the parties would share jointly in all subsequent business with Kaiser and its affiliates. Plaintiff thereafter shared with defendants his ideas, configurations, and designs developed for the bid on the Kaiser modular video conferencing system, in order that defendants could assemble the proposal in accordance with Kaiser’s bidding requirements. However, the amended complaint alleged, after defendants had obtained plaintiff’s custom design for the Kaiser modular video conferencing system, they informed plaintiff that they, rather than he, would supply the brand name components and assemble and install the units for Kaiser. The amended complaint alleged that although plaintiff protested these changes, by the time defendants demanded them, it was too late to submit his own proposal to Kaiser and plaintiff was forced by the circumstances to accept defendants’ “take it or leave it” proposal.

On March 14, 1995, according to the amended complaint, plaintiff signed a “teaming agreement” with defendants in order to salvage what little business he could from the Kaiser project. If he signed the agreement, defendants assured him, plaintiff would earn increased profit margins on all components manufactured by defendants on all future business resulting from work on the initial Kaiser bid, and would assemble, install, and earn profits on cabinetry and other components. The teaming agreement provided that plaintiff and defendants would prepare and submit to Kaiser a joint proposal and that, if a contract with Kaiser resulted, they would jointly participate in the negotiation and execution of the Kaiser contract. Plaintiff and defendants thereafter jointly submitted the winning bid to Kaiser.

Defendants, however, prevented plaintiff from participating in the Kaiser contract and failed to pay him the monies due thereunder. The amended complaint went on to allege 13 causes of action arising out of the Kaiser bid and aftermath, including breach of contract, of the teaming agreement, of the reseller agreement, and of the joint venture/partnership agreement. In addition, it asserted breach of a fiduciary duty running from defendants to plaintiff, breach of the implied convenant of good faith and fair dealing, deceit, interference with prospective economic advantage, unfair business practices and defamation, and sought an accounting and recovery of profits from the Kaiser venture.

[170]

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89 Cal. App. 4th 164, 107 Cal. Rptr. 2d 209, 2001 Daily Journal DAR 4989, 2001 Cal. Daily Op. Serv. 4072, 2001 Cal. App. LEXIS 370, Counsel Stack Legal Research, https://law.counselstack.com/opinion/krantz-v-bt-visual-images-llc-calctapp-2001.