Michael Deutsch v. Douglas W. Cook

• Court: District Court, E.D. California
• Decided: March 31, 2026
• Docket: 1:19-cv-00281
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 MICHAEL DEUTSCH, No. 1:19-cv-281-KES-SKO 12 Plaintiff, 13 v. FINDINGS OF FACT AND CONCLUSIONS OF LAW 14 DOUGLAS W. COOK, (Doc. 80) 15 Defendant. 16 17 Plaintiff Michael Deutsch brought this action against defendant Douglas Cook following 18 the parties’ unsuccessful business venture to develop and market the “Dialfan” medical device for 19 use in hernia surgeries. The parties tried the case to the Court in a bench trial on Deutsch’s two 20 causes of action: unjust enrichment (quasi-contract claim for restitution) and quantum meruit. 21 See Doc. 80; Doc. 71; Doc. 26 (First Amended Complaint (“FAC”)). Following trial, the parties 22 submitted proposed findings of fact and conclusions of law and responses thereto. Docs. 86, 87, 23 88, 89. The Court sets out below its findings of fact and conclusions of law. See Fed. R. Civ. P. 24 52(a)(1). 25 I. FINDINGS OF FACT 26 1. Cook is a medical doctor. In late 2007 or early 2008, Cook began practicing as a 27 general surgeon in California’s Central Valley. Doc. 85 (“Trial Transcript” or “Tr.”) 28 at 169:14–18. 1 2. Cook invented the Dialfan medical device out of frustration with existing hernia repair 2 techniques. Tr. 171:8–172:21; Doc. 71 (“Second Pretrial Order”), Undisputed Fact 1. 3 3. The Dialfan device consisted of a placement tool to be used with a mesh patch in 4 performing hernia surgeries. The placement tool consisted of adjustable blades and a 5 control to move the adjustable blades from a clustered position (in which the blades 6 are stacked on top of each other, thereby allowing the blades to be inserted through a 7 small opening in the mesh patch), into an expanded position (to spread out and apply 8 the mesh patch evenly).1 See Second Pretrial Order, Undisputed Fact 2. 9 4. Cook initially paid engineers to develop technical drawings of the Dialfan. Tr. 174:6–23; 10 Tr. 174:24–175:4. Cook then had a few metal prototypes of the Dialfan manufactured 11 by a local machine shop. Tr. 176:13–18. 12 5. With his employing health network’s approval, Cook subsequently used the Dialfan 13 prototypes in hernia surgeries on patients. Tr. 176:15–17, 177:18–178:4. In late 2009 14 and early 2010, Cook successfully performed approximately 20 surgeries using the 15 metal Dialfan prototypes. Tr. 178:7–9, 179:12–13. 16 6. To use the metal Dialfan to apply mesh in surgery, Cook modified a mesh produced 17 by a company called Atrium by cutting a slit in the top of the mesh to allow for the 18 insertion of the metal Dialfan blades. Tr. 182:19–184:3. 19 7. The Atrium mesh, with the modifications that Cook made, was the only mesh that 20 would work with the Dialfan. Tr. 182:25–183:3, 184:2–3. 21 8. Because Atrium later went out of business and no longer produces the mesh that Cook 22 modified for use with the Dialfan, Cook no longer uses the Dialfan in surgery. 23 Tr. 182:25–183:3. 24 9. As of late 2009, Cook had incurred all costs spent to develop the Dialfan, in addition 25

26 1 Though the parties at times refer to the Dialfan as consisting of both the mesh and the placement tool device (see Second Pretrial Order, Undisputed Fact 2), they most frequently use the term 27 “Dialfan” to refer to the placement tool only and refer separately to the mesh. Following the parties’ usage, these findings of fact also generally refer to the Dialfan tool and the mesh as 28 1 to using his own time. Tr. 174:19–175:15, 176:11–177:14. 2 10. In late 2009, a colleague suggested that Cook connect with a medical device company 3 owner, Deutsch, to discuss further development of the Dialfan. Tr. 31:24–32:14, 4 179:17–180:3. Deutsch markets and sells medical devices through his company 5 Starsurgical. Tr. 6:20–7:4; Second Pretrial Order, Undisputed Fact 3. 6 11. Cook and Deutsch spoke, and Deutsch then traveled to California to observe Cook 7 using the Dialfan in surgery. Tr. 32:18–33:25, 181:22–182:12; Second Pretrial Order, 8 Undisputed Fact 3. Deutsch met with Cook and observed Cook perform multiple 9 hernia surgeries using the Dialfan. Tr. 34:1–2, 34:17–21, 182:10–12; Second Pretrial 10 Order, Undisputed Fact 3. 11 12. The parties had conversations in which Cook said the two “should work together” 12 given Deutsch’s experience, and the parties discussed the arrangement between them 13 to commercialize the Dialfan. Tr. 34:9–11, 36:6–11; see also Tr. 182:1–186:25. Cook 14 and Deutsch ultimately agreed to collaborate to commercialize the Dialfan. Tr. 181:5– 15 6, 185:2–11, 210:12–15; Second Pretrial Order, Undisputed Fact 4. 16 13. Deutsch acknowledged that these conversations led to “a partnership” or “a joint 17 venture” in which they would “share in the Dialfan.” Tr. 36:12–13, 37:7–12, 64:2–18, 18 65:1–13, 88:24–25, 89:7–9, 108:9–10, 112:3–114:22, 116:1–117:1, 119:15–120:4, 19 123:16–18, 124:25–125:1, 133:18–134:4; see also Tr. 186:13–25. 20 14. The two agreed that they would share the risks and rewards, which included potential 21 profits and losses, with Cook maintaining a 51% interest and Deutsch having a 49% 22 interest. Tr. 37:12–21, 112:3–114:22, 116:23–117:1; Second Pretrial Order, 23 Undisputed Fact 6; see also Tr. 186:18–19; Tr. Exs. JX-1, JX-2. 24 15. Deutsch never requested, and Cook never agreed to, any payment for Deutsch’s 25 services related to Dialfan apart from him having a 49% interest in any potential 26 profits. Tr. 114:23–25, 206:14–20. 27 16. The parties did not agree on a termination date for the attempt to market the Dialfan 28 and no performance metrics or deadlines for achieving sales goals were set. Second 1 Pretrial Order, Undisputed Fact 10. 2 17. At some point, Deutsch advanced $45,000 to the parties’ venture on an interest-free 3 basis. See Trial Exs. 17, 65 at 1; Second Pretrial Order, Undisputed Fact 8. 4 18. The parties engaged in negotiations through counsel to formalize their business 5 relationship, resulting in two final draft documents: (1) a Shareholder Agreement 6 defining their relationship and ownership percentages, and (2) a Subscription 7 Agreement detailing their respective capital contributions. Tr. 88:6–14, 115:6-117:1, 8 117:2–11, 119:15–120:4, 186:1–2, 186:11, 186:18–19, 187:22–23; Trial Exs. JX-1, 9 JX-2. These agreements reflected the parties’ understanding of their oral agreement. 10 Tr. 89:10–11, 90:15–21, 115:6–117:1, 117:2–11, 119:15–120:4, 186:1–11, 186:18–19, 11 187:22–23. 12 19. Cook signed both the Shareholder Agreement and Subscription Agreement, but 13 Deutsch did not execute either document. Tr. 88:19–89:4, 186:11–12; Tr. Exs. JX-1, 14 JX-2; Second Pretrial Order, Undisputed Fact 7. While Deutsch did not sign the 15 documents, he acknowledged at trial that he believed the parties already had an oral 16 agreement to the same effect as the Shareholder Agreement and Subscription 17 Agreement and that there “was no need to use” the documents. Tr. 89:10–11, 90:15– 18 21, 116:23–25.2 19 20. The parties brainstormed about how the venture should proceed, “discussed things 20 openly,” spoke frequently regarding what each “discovered for the week with the 21 people [each] talked to, and had an “exquisite working relationship.” Tr. 102:23–24, 22

23 2 Cook similarly testified that he referred to their actions together as a partnership or joint venture, that the two of them “felt the way [they] felt about each other, that they were on a handshake deal, 24 that [they] were forming a partnership,” and that that the proposed written agreements detailing a 25 51 and 49% ownership split constituted “the gist of [the parties’] [oral] deal.” Tr. 186:4–25, 216:23–217:2; see also Tr. 207:8-10 (testifying that the two had a “verbal partnership”); Tr. 26 221:21–222:3 (testifying that the two had a “verbal partnership and relationship” and “whatever that means in the state of California, [he] would be obligated to”); Tr. 236:3–6 (testifying that the 27 parties’ “business relationship . . . to commercialize the Dialfan was largely from 2010 to 2015”). Additionally, Cook referenced that he was “51% stakeholder” of the joint venture in an email he 28 1 185:2–11, 237:25–238:11, 242:7–14. 2 21. Deutsch’s assertion at trial that he lacked control sufficient for the parties to be in a 3 joint venture together is unpersuasive. The testimony showed that the partners made 4 decisions regarding the joint venture together, “discussed things openly,” and spoke 5 often regarding what each “discovered for the week with the people [each] talked to.” 6 Both parties acknowledged that the two acted as partners and were in a partnership 7 regarding commercialization of the Dialfan. 8 22. Cook, given his greater medical expertise, had control and responsibility for the design 9 of the Dialfan. Deutsch, given his greater expertise in commercializing medical 10 devices, assumed control and responsibility for working with potential manufacturers 11 and distributors and for marketing. Deutsch was in control, among other things, of 12 which and how many trade shows to attend and which manufacturers, distributors, and 13 licensors to engage with, what to ask them to create or do for the parties, and how long 14 to engage with them. 15 23. At some point in 2010, early in the parties’ relationship, Cook became concerned 16 about the durability of the metal Dialfan, with the wings’ metal nubs shearing after 17 repeated use, and the parties began to explore the concept of commercializing a plastic 18 Dialfan. Tr. 40:21–25, 51:23–52:11, 189:13–190:10. 19 24. The evidence does not support Deutsch’s contention that “Dr. Cook only would permit 20 the commercialization of a plastic Dialfan and not a metal one” over Deutsch’s 21 objections. See Doc. 88 at 19. Rather, when asked whether he and Cook disagreed 22 over whether to commercialize a plastic or metal Dialfan, Deutsch testified 23 equivocally that “maybe it’s a characterization,” that the parties were “in discussions,” 24 and that “[he] guess[es] you could say that.” See, e.g., Tr. 123:20–124:2. Deutsch did 25 not remember any specific conversation expressing concern to Cook over the plastic 26 Dialfan, but remembers thinking that “[they] had an instrument that worked” in the 27 metal Dialfan and that they should “at least go out and identify the market [and] see 28 the level of interest that [they] had” in it and that he believed then and now that the 1 most successful way to have commercialized the Dialfan was to sell a metal Dialfan. 2 Tr. 41:13–20. 3 25. Ultimately though, following the parties’ discussions, Deutsch “went along with” 4 Cook’s preference to commercialize a plastic Dialfan rather than a metal Dialfan. 5 Tr. 41:2–22; see also Tr. 242:4–14 (Cook testifying it made more sense to him to sell a 6 plastic Dialfan given that the metal Dialfans were expensive and wore out, but he was 7 not giving Deutsch “marching orders”). 8 26. The joint venture’s focus thus narrowed to trying to commercialize a plastic Dialfan.3 9 27. The parties also proposed to produce a mesh for the Dialfan, so that a surgeon using 10 the Dialfan would not have to modify an existing on-the-market mesh each time to use 11 the Dialfan. Tr. 191:20–192:9. 12 28. The decision to attempt to commercialize a plastic one-time-use Dialfan with an 13 accompanying mesh increased Deutsch’s responsibilities and time incurred on the 14 venture, as Deutsch assumed the responsibility to find a manufacturer for a plastic 15 Dialfan and for the mesh. Tr. 41:23–43:19, 49:11–15. 16 29. While Deutsch testified that he had conversations with Cook about the increase in his 17 time that commercializing a plastic Dialfan would require, he did not recall the 18 specifics of what he said in those conversations. See Tr. 42:20–43:9. Deutsch 19 acknowledged, regarding his new increased responsibilities, that “this was not an 20 adversarial thing at this time” between him and Cook. Tr. 57:6–15. 21 30. As part of his efforts on behalf of the partnership, Deutsch engaged in discussions 22 related to commercialization of the Dialfan with various potential suppliers, 23 manufacturers, and distributors including, among others, Proxy Biomedical Ltd. 24 (“Proxy”) and Laacke & Joys. Tr. 72:10–73:14. Cook did not find Proxy or Laacke & 25

26 3 Although Cook testified he would have considered the possibility of Deutsch selling a metal Dialfan to garner the income required to move forward with the venture to commercialize a 27 plastic Dialfan, see Tr. 198:23-199:12, the joint venture’s focus was on to trying to commercialize a plastic Dialfan. 28 1 Joys, nor ask Deutsch to contact either of those companies. Tr. 50:25–52:11, 67:8–15, 2 190:10–11. 3 31. As a result of Deutsch’s efforts with Proxy, Proxy created engineering drawings of a 4 plastic Dialfan and created a proposed term sheet regarding a potential agreement 5 between Proxy and the parties’ “Joint Venture Entity.” Tr. 51:23–52:11, 53:8–23, 6 59:18–60:16, 61:25–62:11, 65:17–66:15; Tr. Ex. 8 at 8–10. Deutsch also had Proxy 7 make one or two plastic Dialfan prototypes. Tr. 132:6–15. 8 32. Deutsch acknowledged that Cook was not involved and did not need to be involved in 9 Deutsch’s efforts with Proxy; rather, Deutsch kept in touch with Cook regarding 10 Deutsch’s efforts, with Proxy and otherwise, and communicated to him any updates. 11 Tr. 66:16–67:2, 190:14–24. 12 33. In the end, the parties did not reach an agreement with Proxy. Tr. 138:13–24, 192:10– 13 20. 14 34. As a result of Deutsch’s efforts with Laacke & Joys, Laacke & Joys created detailed 15 drawings of a plastic Dialfan and quotations of the cost of manufacturing a mold to 16 produce plastic Dialfans as well as the cost per plastic Dialfan once the mold was 17 created. Tr. 68:4–69:9, 71:3–18; Trial Exs. 23–24. 18 35. When a potential issue with the Dialfan patent arose, Deutsch would call his attorneys 19 and make sure the issue was handled, but Cook did not ask Deutsch to call his 20 attorneys about the patent issue. Tr. 146:5–15. 21 36. At trial Deutsch produced receipts totaling $1,820.00 for patent work, (Tr. 145:21– 22 148:4; Tr. Exs. 49, 53), but it is unclear whether these fees were paid by Deutsch 23 personally or from the venture’s account (see Tr. Ex. 50). 24 37. Separately, Cook sent Deutsch a $5,000 bill related to European patent work, which 25 Deutsch paid. Tr. 99:7–10, 154:24–155:8, 192:21–25. 26 38. During the parties’ partnership, Deutsch attended multiple trade shows at which he 27 marketed medical devices in the Starsurgical portfolio to surgeons, and he also 28 brought and displayed the proposed Dialfan at the trade shows. Tr. 73:21–76:21, 1 191:2–5. Deutsch would have attended the trade shows regardless of whether he was 2 marketing the Dialfan. Tr. 79:13–15, 191:2–5. Cook did not request that Deutsch 3 attend any of the trade shows. Tr. at 191:10–11. 4 39. Despite these marketing and outreach efforts, Deutsch’s work did not result in: (a) a 5 licensing or other development agreement; (b) a single sale; (c) any modification or 6 improvement to the device; (d) any commercial success; or (e) a single dollar of 7 revenue to the parties’ venture. Tr. 133:8–137:11, 204:7–9; Second Pretrial Order, 8 Undisputed Fact 13. 9 40. In or about June 2015, the joint effort to commercialize the Dialfan concluded. 10 Second Pretrial Order, Undisputed Fact 11. The Court finds based on the evidence 11 that the parties mutually ended the joint venture because its purpose to commercialize 12 the Dialfan product had failed. 13 41. Cook never promised to pay Deutsch for his marketing efforts, and Deutsch did not 14 expect, and the Court finds Deutsch was not entitled to, any compensation for his time 15 beyond potential profit sharing if the venture was successful. See Tr. 106:20–107:6, 16 143:15–21, 159:22–24, 206:14–20. 17 42. Cook nonetheless repaid Deutsch the $45,000 advance, partially with the funds that 18 remained in the venture’s bank account and partially from Cook’s personal funds. See 19 Second Pretrial Order, Undisputed Fact 9; Tr. Exs. 64, 65. 20 43. Near or around the end of the parties’ joint venture, Cook paid to have a plastic 21 prototype Dialfan made, which he still possesses. Tr. 194:10–18, 202:5–6. 22 44. There was no evidence that either party requested an accounting of the joint venture, 23 or that either party incurred any expenses or costs exceeding their pro-rata share of the 24 joint venture’s expenses and costs. 25 45. After the parties’ joint venture ended, Cook attempted to continue development efforts 26 through other channels, including communicating with representatives from various 27 businesses, hiring a consultant, and pursuing discussions with other potential partners. 28 Tr. 202:5–203:20, 244:5–18. None of Cook’s post-partnership efforts to 1 commercialize the Dialfan proved successful. Tr. 201:25–203:20, 204:3–9, 244:15– 2 16. 3 46. Cook no longer uses the remaining Dialfan prototypes, as the manufacturer of the 4 required mesh went out of business and the mesh is no longer available. Tr. 182:25– 5 183:3. 6 II. CONCLUSIONS OF LAW 7 1. To prevail on a claim for quantum meruit, a plaintiff must prove (1) that the plaintiff 8 performed certain services for defendant, (2) the reasonable value of the services, (3) 9 that the services were rendered at the defendant’s request, and (4) that the defendant 10 did not pay for them. Sharp Mem’l Hosp. v. Regence BlueCross BlueShield of Utah, 11 No. 16cv2493 JM (RNB), 2018 WL 3993359, at *9 (S.D. Cal. Aug. 21, 2018) 12 (citation omitted); see also Second Pretrial Order at 8. 13 2. To prevail on a claim for unjust enrichment (restitution), a plaintiff must prove that the 14 defendant (1) received a benefit and (2) unjustly retained the benefit at the plaintiff’s 15 expense. MH Pillars Ltd. v. Realini, 277 F. Supp. 3d 1077, 1094 (N.D. Cal. 2017) 16 (citation omitted); see also Second Pretrial Order at 8. 17 3. “A joint venture exists when there is ‘an agreement between the parties under which 18 they have a community of interest, that is, a joint interest, in a common business 19 undertaking, and understanding as to the sharing of profits and losses, and a right of 20 joint control.’” Connor v. Great W. Sav. & Loan Ass’n, 69 Cal. 2d 850, 863 (1968) 21 (quoting Holtz v. United Plumbing & Heating Co., 49 Cal. 2d 501, 506–07 (1957)). 22 “[A] community of interest . . . may exist although the property forming the capital of 23 the venture is not jointly owned by the parties and although one of the parties has 24 contributed money and property and the others labor and skill.” Drdlik v. Ulrich, 21 25 Cal. Rptr. 642, 644 (Cal. Ct. App. 1962). 26 4. “The fact that there is to be an unequal distribution of the profits . . . does not 27 contravene the idea of a joint venture.” Id. “This is also true of the actual control of 28 operations.” Id.; see also Orosco v. Sun-Diamond Corp., 60 Cal. Rptr. 2d 179, 184 1 (Cal. Ct. App. 1997) (noting control in a joint venture may be delegated). “It may be 2 that given [one of the venturer’s] greater expertise in design and construction, the 3 actual building of the house was delegated to [him].” Scottsdale Ins. Co. v. Essex Ins. 4 Co., 119 Cal. Rptr. 2d 62, 68 (Cal. Ct. App. 2002) (noting that, where two parties had 5 agreed to use one’s land and the other’s construction skills to build and sell a house, 6 the actual building of the house may have been delegated solely to venturer with 7 expertise in construction and noting that relevant question regarding control was not 8 whether the venturer owning the land had any control over other party’s construction 9 business but rather whether the building of house was a joint venture). 10 5. Cook and Deutsch had a joint interest in a common business undertaking and an 11 understanding as to the sharing of profits and losses regarding that undertaking.4 12 Specifically, the parties had a joint interest in a common business undertaking to 13 commercialize the Dialfan. See supra Findings of Fact ¶¶ 12–15. 14 6. Sometime in 2010, the parties agreed to narrow their intended undertaking to focus on 15 commercializing a plastic Dialfan, rather than a metal Dialfan. See supra Findings of 16 Fact ¶¶ 23–26. 17 7. The parties agreed to split profits and losses, with Cook maintaining a 51% interest 18 and Deutsch maintaining a 49% interest in the venture. See supra Findings of Fact 19 ¶ 14. The parties also jointly exercised control over the venture, with each party 20 delegating primary control of certain aspects of the venture to the other. 21 8. Deutsch’s assertion that “Dr. Cook was able to terminate Mr. Deutsch’s services ‘over 22 Mr. Deutsch’s objection’” is inconsistent with the evidence that both parties intended 23 to end the joint venture because the efforts to develop and market the Dialfan were 24 unsuccessful. Moreover, even if the evidence had shown that Cook unilaterally ended 25 the parties’ agreement, that would not support Deutsch’s argument that the joint 26 venture never existed. One party’s repudiation of the joint venture would not 27 4 Deutsch does not contest that these two elements of a joint venture are met. See Doc. 88 at 18– 28 1 retroactively change the nature of the parties’ relationship; rather, it could potentially 2 give rise to a cause of action to enforce the joint venture agreement or for breach of 3 the joint venture agreement. But Deutsch did not assert such claims. The evidence 4 also did not show that Deutsch “objected” to any such alleged termination. 5 9. Given that the parties had a joint interest in a common business undertaking to market 6 and sell the Dialfan, an understanding as to the sharing of profits and losses, and a 7 joint right of control, a joint venture between Cook and Deutsch existed. 8 10. “Ordinarily [venturers] cannot sue each other for damages based on [joint venture] 9 business, at least not until there has been an action for dissolution and accounting.” 10 See, e.g., Corrales v. Corrales, 129 Cal. Rptr. 3d 428, 432 (Cal. Ct. App. 2011). 11 11. Deutsch did not bring an action for dissolution and accounting. See generally FAC. 12 12. An exception to the general rule laid out in Corrales is that where one venturer 13 wrongfully repudiated the joint venture, the other may sue him for breach of the joint 14 venture agreement (i.e. breach of contract) without first seeking a dissolution and an 15 accounting. See Gherman v. Colburn, 140 Cal. Rptr. 330, 343 (Cal. Ct. App. 1977); 16 see also Corrales, 129 Cal. Rptr. 3d at 433 (citing Gherman for the same proposition). 17 That is, “[w]here a partner or joint venturer wrongfully repudiates the partnership or 18 joint venture agreement and converts the assets of the partnership or joint venture to 19 his own use and benefit, the victim . . . has alternative remedies: he may waive the tort 20 or breach and sue to specifically enforce the partnership or joint venture agreement, 21 including the remedy of a judicial dissolution and an accounting and if necessary (as 22 an auxiliary remedy) to impress a trust on partnership or joint venture property[;] or 23 the victim may submit to the repudiation and sue for damages for conversion of his 24 interest in joint venture assets; or the victim may submit to the repudiation and sue for 25 damages for breach of the joint venture agreement (including ‘profits which might 26 have been made’) the same as any other action for damages for breach of any other 27 contract[;] or he may sue in tort.” Gherman, 140 Cal. Rptr. at 343 (cleaned up). 28 Deutsch did not bring such a claim in this action. 1 13. Unjust enrichment, brought under a theory of quasi-contract claim for restitution, and 2 quantum meruit are both quasi-contractual claims. See, e.g., Hedging Concepts, Inc. 3 v. First Alliance Mortgage Co., 49 Cal. Rptr. 2d 191, 197 (Cal. Ct. App. 1996) (noting 4 that “quantum meruit” is another name for “quasi-contractual recovery”); Copart, Inc. 5 v. Sparta Consulting, Inc., 339 F. Supp. 959, 983–84 (E.D. Cal. 2018) (an unjust 6 enrichment claim can be construed as a quasi-contract claim for restitution). 7 14. “A plaintiff may not . . . pursue or recover on a quasi-contract claim if the parties have 8 an enforceable agreement regarding a particular subject matter.” Klein v. Chevron 9 U.S.A., Inc., 137 Cal. Rptr. 3d 293, 330 (Cal. Ct. App. 2012); see also Hedging 10 Concepts, 49 Cal. Rptr. 2d at 197 (same). 11 15. A plaintiff may also assert a standalone claim for unjust enrichment “outside of quasi- 12 contract.” See, e.g., Genasys Inc. v. Vector Acoustics, LLC, 638 F. Supp. 3d 1135, 13 1153–54 (S.D. Cal. Nov. 1, 2022) (citing ESG Cap. Partners, LP v. Stratos, 828 F.3d 14 1023, 1038 (9th Cir. 2016). But “[u]njust enrichment is an equitable rather than a 15 legal claim [so] no action for unjust enrichment lies where a contract governs the 16 parties’ relationship to each other.” McKesson HBOC, Inc. v. N.Y. State Common Ret. 17 Fund, Inc., 339 F.3d 1087, 1091 (9th Cir. 2003). 18 16. “A plaintiff is the master of his complaint and responsible for articulating cognizable 19 claims.” Newtok Village v. Patrick, 21 F.4th 608, 616 (9th Cir. 2021). “[I]f a plaintiff 20 [is] uncertain as to whether the parties had entered into an enforceable agreement, the 21 plaintiff [is] entitled to plead inconsistent claims predicated on both the existence and 22 absence of such an agreement.” Klein, 137 Cal. Rptr. 3d at 330. 23 17. Deutsch did not plead any claim predicated on the existence of a joint venture 24 agreement. See FAC ¶ 19 (“Cook and Deutsch never entered a partnership agreement, 25 joint venture agreement, or any other contract governing their efforts to bring the 26 Dialfan to market.”). 27 18. Deutsch elected to bring only claims for quantum meruit (quasi-contract) and unjust 28 enrichment, under a theory that no valid joint venture between the parties existed. See 1 generally FAC. Deutsch elected not to bring a claim, in the alternative, for dissolution 2 of the venture and an accounting, or for breach of the joint venture agreement, under a 3 theory that a valid joint venture existed.5 See generally FAC. 4 19. As noted above, however, the evidence at trial showed that the parties orally agreed to 5 the joint venture. 6 20. Deutsch did not bring any claim under the parties’ agreement—either to enforce the 7 agreement or for breach of the agreement—and he fails to establish and may not 8 recover on his elected claims of unjust enrichment and quantum meruit. 9 21. Even if Deutsch could recover on an unjust enrichment or quantum meruit theory, the 10 Court finds that Deutsch failed to prove either claim by a preponderance of the 11 evidence. 12 22. As to his unjust enrichment claim, Deutsch did not show that Cook, as opposed to the 13 joint venture, received a benefit based on Deutsch’s work or expenditures, or that 14 Cook unjustly retained any such benefit. Both parties contributed their time and 15 efforts to attempt to benefit the joint venture. Nor did Deutsch show that his net 16 expenses and costs for the joint venture exceeded his pro rata share of the venture’s 17 overall expenses and costs. 18 23. As to his quantum meruit claim, the evidence showed that Deutsch performed his 19 share of the joint venture’s work on his initiative, in hopes of sharing in the future 20 profits of the venture, and not as services rendered to Cook at Cook’s request. 21 24. Ultimately, the parties’ joint venture failed to produce any returns despite both parties’ 22 best efforts, and the evidence did not show that the Dialfan has any residual value. 23 /// 24

25 5 In his response to Cook’s proposed findings of fact and conclusions of law, Deutsch argues for the first time that “if Mr. Deutsch and Dr. Cook had indeed formed a joint venture, Dr. Cook was 26 forbidden from terminating the venture to pursue the Dialfan opportunity on his own” and that Cook would have owed him fiduciaries duties. Doc. 88 at 19–20. Even if true, this argument 27 made for the first time in response to Cook’s proposed findings of fact and conclusions of law cannot retroactively allege causes of action for breach of the joint venture agreement or breach of 28 1 | I. CONCLUSION 2 For the reasons set forth above, plaintiff Deutsch failed to establish his claims for unjust 3 | enrichment and quantum meruit against defendant Cook by a preponderance of the evidence. 4 The clerk of court shall enter judgment in favor of defendant Cook and close this case. 5 6 | ISSO ORDERED. _ 7 Dated: _ March 31, 2026 4h | | UNITED STATES DISTRICT JUDGE 10 1] 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14