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Electronically FILED by Superior Court of California, County of Los Angeles on 03/26/2019 07:01 PM Sherri R.

Carter, Executive Officer/Clerk of Court, by K. Hung,Deputy Clerk

1 Devin A. McRae, State Bar Number 223239


dmcrae@earlysullivan.com
2 Lisa L. Boswell, State Bar Number 190304
lboswell@earlysullivan.com
3 Amelia M. Collins, State Bar Number 246231
acollins@earlysullivan.com
4 EARLY SULLIVAN WRIGHT
GIZER & McRAE LLP
5 6420 Wilshire Boulevard, 17 th Floor
Los Angeles, California 90048
6 Telephone: (323) 301-4660
Facsimile: (323) 301-4676
7
Attorneys for Defendant
8 Kazarian/Spencer/Ruskin & Associates, Inc. and
Defendant and Cross-Complainant Dean Panaro
9

10 SUPERIOR COURT OF THE STATE OF CALIFORNIA


11 FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT
12

13 ABRAMS ARTISTS AGENCY, a Case No.: 18STCV02112


California corporation,
14 DEFENDANTS
Plaintiff, KAZARIAN/SPENCER/RUSKIN &
15 ASSOCIATES, INC. AND PANARO'S
vs. NOTICE OF MOTION AND MOTION
16 FOR SUMMARY JUDGMENT, OR IN
DEAN PANARO, an individual; THE ALTERNATIVE FOR SUMMARY
17 KAZARIAN/MEASURES/RUSKIN & ADJUDICATION
ASSOCIATES, INC., a California
18 corporation; and DOES 1 through 10, [Filed Concurrently with Separate
Statement, Compendium o f Exhibits, and
19 Defendants. Request for Judicial Notice}
20 Date: August 13, 2019
Time: 8:30 a.m.
21 DEAN PANARO, an individual, Dept: 19
22 Cross-Complainant, Date Filed: October 22, 2018
Trial Date: June 9, 2020
23 vs.
[The Honorable Stephanie M. Bowick,
24 ABRAMS ARTISTS AGENCY, LLC, a Dept. 19]
limited liability company; and ROES
25 1through 25, inclusive, RESERVATION NO.: 303931138858
26 Cross-Defendants.
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TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD HEREIN:
2 PLEASE TAKE NOTICE that on August 13, 2019, at 8:30 a.m., or as soon thereafter as
3 this matter may be heard in Department 19 of the above-entitled Court, located at 111 N. Hill
4 Street, Los Angeles, CA 90012-3014, defendant/cross-complainant Dean Panaro ("Panaro") and
5 defendant Kazarian/Spencer/ Ruskin & Associates, Inc. ("KMR" and with Panaro, "Defendants")
6 will and hereby do, move the Court for an order pursuant to Code Civ. Proc. §437c entering
7 summary judgment ("Motion") in their favor and against plaintiff Abrams Artists Agency, LLC
8 ("Abrams" or "Plaintiff'). In the alternative, Defendants pray for summary adjudication of each
9 of its causes of action against Defendants. Defendants' Motion is made on the following grounds:
10 ISSUE ONE: Defendant Panaro is entitled to summary adjudication in his favor of
11 Abrams' first cause of action for breach of contract because, as a matter of undisputed fact and
12 law, the parties, namely Panaro and Abrams Artists Agency, Inc. ("AAA"), mutually terminated
13 the Employment Agreement, and thus, there can be no claim for breach with respect thereto.
14 ISSUE TWO: Defendant Panaro is entitled to summary adjudication in his favor of
15 Abrams' second cause of action for breach of the implied covenant of good faith and fair dealing
16 because, as a matter of undisputed fact and law, the parties mutually terminated the Employment
17 Agreement, and thus, there can be no claim for breach of the implied covenant with respect
18 thereto.
19 ISSUE THREE: Defendant Panaro is entitled to summary adjudication in his favor of
20 Abrams' third cause of action for breach of fiduciary duty because, as a matter of undisputed fact
21 and law, there was no fiduciary relationship between Panaro, an employee, and AAA, his
22 employer, and without that essential element, there can be no claim for breach of fiduciary duty.
23 ISSUE FOUR: Defendant KMR is entitled to summary adjudication in its favor of
24 Abrams' fourth cause of action for tortious inducement of breach of contract because, as a matter
25 of undisputed fact and law, the parties had mutually terminated the Employment Agreement, and
26 without the existence of a contract, no breach could have occurred. Without that essential
27 element, there can be no claim for tortious inducement of breach of contract.

EARLY 2 8 ISSUE FIVE: Defendants are entitled to summary adjudication in their favor of Abrams'
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1 fifth cause of action for intentional interference with contractual relations because, as a matter of
2 undisputed fact and law, the Former Abrams Clients fully performed the contracts between AAA
3 and the Former Abrams Clients, and Defendants did not interfere with such performance; thus,
4 there can be no claim for interference with contractual relations.
5 ISSUE SIX: Defendants are entitled to summary adjudication in their favor of Abrams'
6 sixth and seventh causes of action for intentional and negligent interference with prospective
7 economic advantage because, as a matter of undisputed fact and law, Abrams cannot establish that
8 Defendants committed any independently wrongful act, beyond the act of interference itself.
9 Without that essential element, there can be no claim for interference with prospective economic
10 advantage.
11 This motion is based on this notice, the attached memorandum of points and authorities,
12 the concurrently filed and served separate statement of undisputed material facts, and
13 compendium of evidence (which include the declarations of Devin A. McRae, Dean Panaro, and
14 Margarita Collard, as well as all of the exhibits to those declarations), request for judicial notice,
15 and such further argument and matters as may be presented at or before the hearing on this
16 motion.
17 Respectfully submitted,
18
Dated: March 21, 2019 EARLY SULLIVAN WRIGHT
19 GIZER & McRAE LLP

20

21

22
Lisa L. Boswell
23 Amelia M. Collins
Attorneys for Defendant Kazarian/Spencer/Ruskin
24 & Associates, Inc. and Defendant and Cross-
Complainant Dean Panaro
25

26

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1 TABLE OF CONTENTS
2

3
I. INTRODUCTION AND SUMMARY OF ARGUMENT .................................................. 10
4
II. STATEMENT OF UNDISPUTED FACTS ....................................................................... 10
5

6 III. LEGAL STANDARD ......................................................................................................... 13

7 IV. DEFENDANTS ARE ENTITLED TO JUDGMENT AS A MATTER OF LAW ............. 14


8
A. PLAINTIFF'S BREACH OF CONTRACT CLAIM INDISPUTABLY FAILS ... 14
9
1. The Parties' Mutual Termination of the Employment Agreement
10
Precludes Any Breach of the Sarne ............................................................. 14
11

12 2. Plaintiff Is Estopped to Retract AAA's Acceptance of Panaro's

13 Resignation .................................................................................................. 16

14 3. Even If the Employment Agreement Was Not Terminated by


15 Mutual Consent, There Still Could Have Been No Breach ......................... 17
16
a. AAA's unilateral option to extend the term of
17
employment is an unenforceable covenant not to cornpete ............. 19
18
b. The Employment Agreement's purported bar on
19
solicitation is also void under § 16600 ............................................ 20
20

21 c. KMR has paid AAA and/or Abrams the entirety of

22 commissions it is owed, forestalling any alleged

23 breach of contract ............................................................................ 21

24 B. PANARO DID NOT BREACH THE IMPLIED COVENANT OF


25 GOOD FAITH AND FAIR DEALING ................................................................. 24
26

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1 C. BECAUSE PANARO OWED NO FIDUCIARY DUTY TO AAA, ABRAMS'
2 CLAIM FOR BREACH OF FIDUCIARY DUTY COLLAPSE ............................ 24
3
D. WITHOUT AN ACTUAL BREACH OF CONTRACT, TORTIOUS
4
INDUCEMENT OF BREACH OF CONTRACT NECESSARILY
5
FAILS ...................................................................................................................... 26
6
E. PLAINTIFF'S INTENTIONAL INTERFERENCE CLAIM SUFFERS THE
7
SAME FATE AS ITS BREACH OF CONTRACT CLAIM .................................. 27
8

9 F. PLAINTIFF'S REMAINING CLAIMS LIKEWISE LACK MERIT .................... 28

10 V. CONCLUSION ................................................................................................................... 29
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TABLE OF AUTHORITIES
2 Cases
3 Aetna Bldg. Maintenance Co. v. West,
4 39 Cal. 2d 198 (1952) ........................................................................................................... 20, 21
5 Aguilar v. Atl. Richfield Co.
6 25 Cal. 4th 826 (2001) ................................................................................................................ 14
7 Amid v. Hawthorne Community Medical Group, Inc.,
8 212 Cal. App. 3d 1383 (1989) ..................................................................................................... 25
9 Beyeler v. William Morris Agency, Inc.,
10 2001 WL 3618566 (CA. Dept. Lab. Sept. 5, 2001) .................................................. 18, 22, 23, 28
11 Busch v. Globe Industries,
12 200 Cal. App. 2d 315 (1962) ....................................................................................................... 15
13 Crouse v. Brobeck, Phleger & Harrison,
14 67 Cal. App. 4th 1509 (1998) ..................................................................................................... 14
15 Davis v. Basalt Rock Co.
16 107 Cal. App .2d 436 (1951) ....................................................................................................... 18
17 Della Penna v. Toyota Motor Sales, US.A., Inc.,
18 11 Cal. 4th 376 (1995) ................................................................................................................ 29
19 Dowell v. Pacesetter,
20 179 Cal. App. 4th 564 (2009) ......................................................................................... 19, 20, 21
21 DRG!Beverly Hills Ltd. v. Chopstix Dim Sum Cafe &Takeout 111, Ltd.,
22 30 Cal. App. 4th 54 (1994) ................................................................................................... 16, 17
23 Dryden v. Tri-Valley Growers,
24 65 Cal. App. 3d 990 (1997) ......................................................................................................... 26
25 Edwards v. Arthur Anderson LLP,
26 44 Cal. 4th 937 (2008) ........................................................................................ 17, 18, 19, 20, 21
27

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1 Golden v. Cal. Emergency Physicians Med. Grp.,
2 782 F.3d 1083 (9th Cir. 2015) .................................................................................................... 19
3 Insurance Co. of the West v. Haralambos Beverage Co.,
4 195 Cal. App. 3d 1308 (1987) ..................................................................................................... 16
5 Kane v. Sklar,
6 122 Cal. App. 2d 420 (1954) ........................................................................................... 14, 15, 16
7 Kolani v. Gluska,
8 64 Cal. App. 4th 402 (1998) ....................................................................................................... 19
9 Korea Supply Co. v. Lockheed Martin Corp.,
10 29 Cal. 4th 1134 (2003) .............................................................................................................. 29
11 Lange v. TIG Ins. Co.,
12 68 Cal. App. 4th 1179 (1998) ..................................................................................................... 29
13 McConnell v. Kaiser Gypsum Co.
14 98 Cal. App. 4th 1098 (2002) ..................................................................................................... 14
15 Metro Traffic Control, Inc. v. Shadow Traffic Network,
16 22 Cal. App. 4th 853 (1994) ................................................................................................. 18, 20
17 Morlife, Inc. v. Perry,
18 56 Cal. App. 4th 1514 (1997) ..................................................................................................... 21
19 Newv. New,
20 148 Cal. App. 2d 372 (1957) ................................................................................................. 25, 26
21 O'Byrne v. Santa Monica-UCLA Medical Center,
22 94 Cal. App. 7th 797 (2001) ................................................................................................. 25, 26
23 Oasis West Realty, LLC v. Goldman
24 51 Cal. 4th 811 (2011) .......................................................................................................... 14, 24
25 Odorizzi v. Bloomfield School Dist.,
26 246 Cal. App. 2d 123 (1966) ....................................................................................................... 25
27 Osuna v. Albertson,

'EARLY 28 134 Cal. App. 3d 71 (1982) ......................................................................................................... 18


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1 Pacific Gas & Elec. Co. v. Bear Stearns & Co.,
2 50 Cal. 3d 1118 (1990) ................................................................................................... 27, 28, 29
3 Pierce v. Lyman,
4 1 Cal. App. 4th 1093 (1991) ....................................................................................................... 25
5 Quelimane Co. v. Stewart Title Guaranty Co.,
6 19 Cal. 4th 26 (1998) ............................................................................................................ 27, 28
7 Racine & Laramie, Ltd. v. Department of Parks & Recreation,
8 11 Cal. App. 4th 1026 (1992) ..................................................................................................... 24
9 Reeves v. Hanlon,
10 33 Cal. 4th 1140 (2004) .............................................................................................................. 20
11 Rokos v. Peck,
12 182 Cal. App. 3d 604 (1986) ....................................................................................................... 18
13 Sanborn v. Ballan/ante,
14 98 Cal. App. 482 (1929) ............................................................................................................. 15
15 Shamblin v. Berge,
16 166 Cal. App. 3d 118 (1985) ....................................................................................................... 26
17 Stanley v. Richmond,
18 35 Cal. App. 4th 1070 (1995) ..................................................................................................... 25
19 Stein Agency v. James Tripp-Haith,
20 TAC No. 46-05, 2006 WL 7089517 (CA.Dept. Lab., Oct. 30, 2006) ......................................... 22
21 Styne v. Stevens,
22 26 Cal. 4th 42 (2001), ................................................................................................................. 22
23 The Retirement Group v. Galante,
24 176 Cal. App. 4th 1226 (2009) ................................................................................................... 21
25 Thompson v. Impaxx, Inc.
26 113 Cal. App. 4th 1425 (2003) ............................................................................................. 18, 21
27 Thrifty Payless, Inc. v. The Americana at Brand, LLC,

EARLY 28 218 Cal. App. 4th 1230 (2013) ................................................................................................... 24


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1 Wiltsee v. California Emp. Com.,
2 69 Cal. App. 2d 120 (1945) ......................................................................................................... 26
3 Wolf v. Superior Court,
4 107 Cal. App. 4th 25 (2003) ................................................................................................. 25, 26
5 Zumbrun v. University of Southern California,
6 25 Cal. App. 3d 1 (1972) ............................................................................................................ 26
7

8 Statutes
9 8 CCR §12001 ..................................................................................................................... 18, 22, 28
10 8 CCR §12002 ................................................................................................................................. 23
11 10 Cal. Jur. 3d §10 .......................................................................................................................... 28
12 Bus. & Prof. Code§ 16600 ..................................................................................... 17, 18, 19, 20, 21
13 Cal. Evid. Code § 623 ............................................................................................................... 16, 17
14 Civ. Code§ 1624(a)(l) .................................................................................................................... 28
15 Code of Civ. Proc.§ 437c ......................................................................................................... 13, 14
16 Foreign Corrupt Practices Act ......................................................................................................... 29
17

18 Rules
19 CRC, rule 977(a) ............................................................................................................................. 22
20

21

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1 I. INTRODUCTION AND SUMMARY OF ARGUMENT
2 By this case, talent agency, Abrams Artists Agency, LLC ("Abrams" or "Plaintiff') is
3 attempting to put on a show, pushing forward with unfounded litigation as a scare tactic to
4 engender fear in its employees who might otherwise consider exploring other, more gainful
5 employment opportunities. But in this next off attempt to abuse the courts to further its illicit
6 intent to stifle employee mobility and restrain trade and competition, this Court, as gatekeeper,
7 should swiftly slam it shut on Abrams.
8 After working for Abrams Artists Agency, Inc. ("AAA") as a talent agent for nearly eight
9 years, defendant Dean Panaro ("Panaro") decided it was time for him to leave the agency and find
10 another option. He submitted his resignation, which was accepted by the eponymous owner of
11 AAA, Harry Abrams, "effective immediately," thereby mutually terminating his employment
12 agreement. Panaro obtained new employment and several of AAA's former clients decided to
13 break ties with AAA as well and retain new representation elsewhere. Abrams, annoyed by
14 Panaro's exit, and infuriated by the exit of AAA's former clients, has sued Panaro and his new
15 employer, Kazarian/Spencer/Ruskin & Associates, Inc. ("KMR" and with Panaro, "Defendants"),
16 for, among other things, breach of contract, breach of fiduciary duty, interference with contract
17 and prospective economic advantage, all in an attempt to unlawfully restrain Panaro from
18 engaging in a lawful profession or trade.
19 As a matter of undisputed fact and law (discussed in detail below), there was no breach of
20 contract or fiduciary duty, and no unlawful interference with either contract or prospective
21 economic advantage. Defendants have paid all commissions owed to AAA, and thus Plaintiff has
22 suffered no damages. As such, this Court should grant this Motion for Summary Judgment.
23 II. STATEMENT OF UNDISPUTED FACTS
24 As of September 28, 2015, AAA contracted with Panaro to work as a talent agent for its
25 company. Undisputed Fact ("UF") 1. The terms of Panaro's employment were set forth in an
26 employment agreement ("Employment Agreement") drafted by AAA with only the monetary
27 terms being negotiable. UF 2. The Employment Agreement had an initial term of one year

EARLY 28 beginning on September 28, 2015, but the Agreement granted AAA the exclusive right to
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1 unilaterally renew for three successive one-year terms. UF 3.
2 The Employment Agreement also contained extremely broad (unenforceable) non-
3 compete and non-solicitation provisions, requiring the following, in pertinent part:
4 [Y]ou agree that during the term of your employment with the Agency and for a
period of two years from the date that you cease employment with the Agency,
5
you shall not, directly or indirectly, interfere with the Agency's business in any
6 manner, including, without limitation, by: ... d) calling on, soliciting, diverting or
attempting to divert, or take away (by solicitation or otherwise), or attempting to
7 obtain business from, any client of the Agency that was a client of the Agency at
any time during the time of your employment excluding your existing clients that
8 you are bringing to the Agency; e) assisting any other person, firm or entity in the
solicitation of any clients, consultants or employees .... UF 4.
9

10 The Employment Agreement attempts to avoid the automatic bar of such non-compete

11 clauses by stating in a conclusory fashion that "The foregoing is not intended to prevent you from

12 working as a talent agent for another talent agency after your tenure at the Agency terminates,"

13 but such "assurance" is undermined before the sentence even ends, adding the caveat, "so long as

14 you do not violate the terms set forth above." UF 5.

15 On July 13, 2018, Panaro tendered his letter ofresignation ("Resignation Letter") to the

16 desk of AAA's then president, Harry Abrams at approximately 9:00 a.m. which contained the

17 following: "Dear Mr. Abrams, I would like to inform you of my intention to resign from Abrams

18 Artists, effective immediately." UF 6. That same day at or about 4:57 p.m., Panaro received a

19 letter from Harry Abrams via email, the subject of which read "Termination of Employment" (the

20 "Resignation Acceptance Letter"). UF 7. In that letter, Mr. Abrams "acknowledge[d] receipt of

21 your letter of resignation," and confirmed that such resignation shall be "effective immediately."

22 UF 8. (emphasis added). Mr. Abrams advised Panaro that "[He] will receive [his]final paycheck,

23 which shall include any payment for any remaining and unused Paid-Time Off and unpaid

24 approved expense reimbursements, within 72 hours." UF 9. (emphasis added). The Resignation

25 Acceptance Letter again acknowledged, "your employment relationship with Abrams has

26 ended ... " UF 10. (emphasis added). Abrams has since confirmed, under penalty of perjury, that

27 it consulted with legal counsel about the contents of that letter before sending it to Panaro.

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Namely, Abrams' verified discovery response states that: "Harry Abrams sent the letter [dated
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1 July 13, 2018] following input from counsel." UF 11. In fact, Mr. Abrams' Resignation
2 Acceptance Letter was emailed to Panaro by Ryan Abelman, Esq. of AAA. UF 12. Harry
3 Abrams sent an email to "LA/NY All Staff' at 5 :26 p.m. on July 16, 2018 stating: "Effective
4 immediately, Dean Panaro is no longer associated with Abrams Artists Agency." UF 13.
5 As promised in the Resignation Acceptance Letter, AAA direct deposited Panaro's "final
6 paycheck" to his bank account on July 17, 2018. However, later that same day, it withdrew the
7 funds from his account. UF 14. Panaro did not receive any advance notice from AAA that this
8 withdrawal would take place. UF 15. Nor did he authorize AAA to make this withdrawal from
9 his bank account. UF 16.
10 After receiving Mr. Abrams' Resignation Acceptance Letter on July 13, 2018, Panaro
11 began receiving telephone calls from his clients indicating that they planned to leave AAA and
12 follow him to his new agency. UF 17. In reliance on Mr. Abrams' written acceptance of
13 Panaro's resignation and acknowledgement that it was "effective immediately," Panaro began
14 employment at KMR, a different talent agency, on July 16, 2018. UF 18. Panaro notified his
15 clients (each, a "Former Abrams Client") of his new contact information. UF 19.
16 After Panaro had started his new job at KMR on July 17, 2018, Panaro received a letter
17 from AAA's attorney, Patricia Glaser, which attempted to renege AAA's acceptance of Panaro's
18 resignation (the "Attempted Retraction Letter"). UF 20. In an abrupt about face, that letter
19 attempts to rewrite history, stating that "The Employment Agreement has not been terminated and
20 its current term does not expire until September 27, 2018." UF 21. The letter (falsely) accuses
21 Panaro of being "in material breach of the Employment Agreement," even though Mr. Abrams
22 had previously confirmed in his Resignation Acceptance Letter that Panaro's resignation was
23 "effective immediately." UF 22. Ms. Glaser's letter digs in deeper, claiming "AAA has not
24 terminated the Employment Agreement and intends to continue to honor its obligations
25 thereunder, including its salary obligations to you . ... [Y]ou are prohibited from accepting
26 employment by another talent agency, KMR included." UF 23. These empty accusations were
27 apparently just a cheap scare tactic-neither AAA nor Abrams ever made any further salary

i EARLY 28 payments to Panaro after Mr. Abrams accepted his resignation, despite Ms. Glaser's feigned
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promises to suggest otherwise. UF 24. Indeed, it took Abrams until December 21, 2018 to finally

2 remit Panaro's final paycheck that AAA had previously retracted. UF 25. And because it was

3 over five months late, that last paycheck was padded with compounded late fees for violations of

4 California labor laws. UF 26.

5 Even more scandalous is the fact that two months after AAA confirmed Panaro 's

6 resignation was "effective immediately," salary payments to Panaro had altogether ceased, and

7 Panaro had been working for a different agency for that entire period of time, AAA sent a letter

8 dated September 13, 2018 (the "Option Letter'? purporting to "exercis[e] fits] option to extend

9 [Mr. Panaro's] guaranteed employment for the next twelve months, effective September 28th,

10 2018." UF 27. But by that point, two months had passed since the Employment Agreement was

11 mutually terminated and Panaro's employment with AAA had ceased. Thus, no option remained

12 available to exercise.

13 On September 24, 2018, AAA filed a Limited Liability Company Articles of Organization

14 - Conversion with the California Secretary of State converting AAA to Abrams. UF 28.

15 Furthermore, to the extent any Former Abrams Client moved over to KMR for their

16 representation after Panaro's resignation from AAA, all commissions received by KMR for jobs

17 booked on behalf of Former Abrams Clients while Panaro was still employed by AAA have been

18 paid to AAA and/or Abrams. UF 30. Those commissions represent the extent of what AAA

19 would be entitled to recover as a result of Panaro' s change of employment and the Former

20 Abrams Clients' change of representation. Because AAA or Abrams is being paid that amount in

21 its entirety, it has suffered no injury, and summary judgment should be granted.

22 III. LEGAL STANDARD


23 Summary judgment is proper when "all the papers submitted show that there is no triable

24 issue as to any material fact and that the moving party is entitled to a judgment as a matter of

25 law." Code of Civ. Proc.§ 437c(c). A party also may obtain summary adjudication "as to one or

26 more causes of action within an action, ... if that party contends that the cause of action has no

27 merit..." Id. § 437c(f)(l). A defendant satisfies its initial burden by demonstrating that one or

, EARLY 28 more elements of a cause of action asserted by the plaintiff cannot be established, or that there is a
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complete defense to that cause of action. Code ofCiv. Proc.§ 437c(o) (2). "[A]ll that the

2 defendant need do is show that the plaintiff cannot establish at least one element of the cause of

3 action ... Although he remains free to do so, the defendant need not himself conclusively negate

4 any such element[.]" Aguilar v. Atl. Richfield Co., 25 Cal. 4th 826, 853 (2001).

5 Once the defendant has made that showing, the plaintiff must prove that a triable issue of

6 material fact exists by setting forth specific facts with respect to the cause of action or defense.

7 Code of Civ. Proc.§ 437c(p)(2). A plaintiff"cannot avoid summary judgment based on mere

8 speculation and conjecture, but instead must produce admissible evidence raising a triable issue of

9 fact." Crouse v. Brobeck, Phleger & Harrison, 67 Cal. App. 4th 1509, 1524 (1998) (internal

10 citations removed); see also McConnell v. Kaiser Gypsum Co., 98 Cal. App. 4th 1098, 1105

11 (2002) ("It is not enough [for the party opposing summary judgment] to produce just some

12 evidence. The evidence must be of sufficient quality to allow the trier of fact to find the

13 underlying fact in favor of the party opposing the motion for summary judgment.").

14 Defendants make the requisite threshold showing that a complete defense exists as to

15 Plaintiffs first through seventh causes of action. Because Plaintiff cannot carry its burden of

16 demonstrating the existence of a triable issue of material fact, summary judgment is warranted.

17 IV. DEFENDANTS ARE ENTITLED TO JUDGMENT AS A MATTER OF LAW


18 A. PLAINTIFF'S BREACH OF CONTRACT CLAIM INDISPUTABLY FAILS
19 In order to state a claim for breach of contract, a plaintiff must show: "( 1) the existence of
20 the contract, (2) plaintiffs performance or excuse for nonperformance, (3) defendant's breach,
21 and (4) resulting damages to the plaintiff." Oasis West Realty, LLC v. Goldman, 51 Cal. 4th 811,
22 821 (2011). As the undisputed facts demonstrate, AAA accepted Panaro's resignation of
23 employment resulting in a mutual termination of the Employment Agreement. And, in reliance
24 on that acceptance, Panaro began new employment. UF 18. There was no breach.
25 1. The Parties' Mutual Termination of the Employment Agreement
Precludes Any Breach of the Same
26

27
"An executory contract may be rescinded, abandoned, or terminated, either wholly or in

part, by the mutual consent of the respective parties at any stage of their performance." Kane v.
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Sklar, 122 Cal. App. 2d 420,482 (1954) (quoting Sanborn v. Ballanfonte, 98 Cal. App. 482, 487-
2 488 (1929)). Here, the undisputed facts establish that the parties terminated the Employment
3 Agreement by mutual assent. By such termination, no breach could have occurred. See id.
4 Kane v. Sklar is an instructive, on-point case that analyzes termination of a contract by
5 mutual consent. There, plaintiff-employee sued his employer for breach of contract after his
6 employment had ended. The trial court found that "by the joint acts of the parties hereto and
7 with their joint consent," the employment terminated. Id. at 481 (emphasis added). In affirming
8 the trial court's ruling, the appellate court recognized that "[plaintiff] stated that if he could not
9 get his pay he was through. He dropped his keys on defendant's desk and walked out. ... " Id. at
10 482. The court concluded "[t]here was sufficient evidence to support a finding that the
11 employment of plaintiff was terminated by mutual consent. It should be construed as a finding
12 that the contract was abandoned by the parties and certainly it negated the allegation of the
13 complaint that plaintiff was discharged." Id. Thus, "judgment was properly rendered in favor of
14 the defendant as to plaintiffs claim for damages." Id. at 483; see also Busch v. Globe Industries,
15 200 Cal. App. 2d 315, 320 (1962) (finding mutual abandonment of the contract by the parties, and
16 stating, "A contract remains in full force until it has been terminated either according to its terms
17 or through the acts of the parties evidencing an abandonment. Abandonment of a contract is a
18 matter of intent and is to be ascertained from the transactions out of which the abandonment is
19 claimed to have resulted.").
20 As in Kane, the "joint acts of the parties" confirm their "joint consent" to terminate
21 Panaro's employment. Kane, 122 Cal. App. 2d at 481. After Panaro personally tendered his
22 Resignation Letter on Mr. Abrams' desk, Mr. Abrams immediately responded (after consulting
23 with counsel) by transmitting the Resignation Acceptance Letter, which acknowledged Panaro's
24 resignation, confirmed it was "effective immediately," and further reaffirmed that Panaro's
25 "employment relationship with Abrams has ended." UF 6-8, 10-11. Mr. Abrams also informed
26 Panaro that his "final paycheck" would be paid "within 72 hours." UF 9. These facts are
27 unequivocal and are not in dispute. No further proof is needed to establish that the Employment

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Agreement was mutually terminated on July 13, 2018. See Kane, 122 Cal. App. 2d at 482-3
15
lll ll I MCRAE LLP DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
62739.! ,
ATIORNEYSATLAW
("Inasmuch as plaintiff failed to prove breach of the contract by defendant, and in view of the
2 finding that he (plaintiff), voluntarily terminated his employment and consented to an
3 abandonment of the agreement, judgment was properly rendered in favor of the defendant as to
4 plaintiffs claims for damages.").
5 2. Plaintiff Is Estopped to Retract AAA's Acceptance of Panaro's
Resignation
6
AAA's prompt acceptance of Panaro's resignation caused Panaro to reasonably rely on
7
such acknowledgement when beginning new employment. As a result, Abrams is estopped to
8
repudiate AAA's acceptance of Panaro's resignation. "Estoppel is applicable where the conduct
9
of one side has induced the other to take such a position that it would be injured if the first should
10
be permitted to repudiate its acts." DRG/Beverly Hills Ltd. v. Chopstix Dim Sum Cafe & Takeout
11
III, Ltd., 30 Cal. App. 4th 54, 59 (1994) (citations omitted). Indeed, the doctrine of estoppel has
12
been codified in California Evidence Code section 623: "Whenever a party has, by his own
13
statement or conduct, intentionally and deliberately led another to believe a particular thing true
14
and to act upon such belief, he is not, in any litigation arising out of such statement or conduct,
15
permitted to contradict it." Evid. Code§ 623. Here, it is beyond dispute that Mr. Abrams'
16
acceptance of Panaro's resignation intentionally led Panaro to believe his resignation to be
17
"effective immediately," and Panaro acted upon such reasonable belief. UF 7-10. As such,
18
Abrams cannot now, through this litigation contradict AAA's prior position.
19
"Four elements must ordinarily be proved to establish an equitable estoppel: (1) the party
20
to be estopped must know the facts; (2) he must intend that his conduct shall be acted upon, or
21
must so act that the party asserting the estoppel had the right to believe that it was so intended; (3)
22
the party asserting the estoppel must be ignorant of the true state of facts; and (4) he must rely
23
upon the conduct to his injury." DRG/Beverly Hills, 30 Cal. App. 4th at 59 (quoting Insurance
24
Co. of the West v. Haralambos Beverage Co., 195 Cal. App. 3d 1308, 1321 (1987)). Each of
25
these elements has been satisfied here.
26
First, Abrams-"the party to be estopped"-was well aware of the facts. See
27
DRG/Beverly Hills, 30 Cal. App. 4th at 59. Panaro tendered his Resignation Letter on Mr.
'EARLY 28
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62739.1 ATTORNEYS AT LAW
Abrams' desk on July 13, 2018. UF 6. Mr. Abrams clearly understood the meaning of Panaro's
2 resignation, as evidenced by AAA's nearly immediate transmission of the Resignation
3 Acceptance Letter (after having consulted with legal counsel) that same day. UF 7-12.
4 Second, Mr. Abrams acted such that Panaro-"the party asserting the estoppel"-had the
5 right to believe that Mr. Abrams' conduct would be acted upon. See DRG/Beverly Hills, 30 Cal.
6 App. 4th at 59. Mr. Abrams' Resignation Acceptance Letter plainly indicated that AAA
7 acknowledged receipt of Panaro's resignation, "effective immediately," that Panaro's
8 "employment relationship with Abrams has ended", and that AAA would (and initially did)
9 provide Panaro his final paycheck within 72 hours. UF 7-10. No words or conduct could provide
10 a more firm indication that Mr. Abrams intended his words and conduct to be acted upon.
11 At the same time, Panaro was "ignorant of the true state of facts"-i.e., ignorant that AAA
12 and later Abrams did not honestly intend to accept his resignation. See DRG/Beverly Hills, 30
13 Cal. App. 4th at 59. And, in reliance on Mr. Abrams' acceptance of Panaro's Resignation Letter,
14 Panaro began new employment at KMR, subjecting himself to the injury of defending against this
15 baseless litigation. See id. Accordingly, each element of estoppel has been established, and
16 Abrams cannot now, in this (or any) litigation arising out of AAA's own statements or conduct,
17 be permitted to contradict the same. Evid. Code § 623.
18 3. Even If the Employment Agreement Was Not Terminated by Mutual
Consent, There Still Could Have Been No Breach
19
Assuming arguendo that the Employment Agreement had been not terminated by mutual
20
consent (it indelibly was), Plaintiff is still unable to establish that any breach occurred. Plaintiffs
21
breach of contract claim purports to allege Panaro breached the Employment Agreement by (1)
22
resigning from AAA and subsequently accepting employment with KMR, (2) purportedly
23
soliciting Former Abrams Clients, who thereafter found new representation; and (3) encouraging
24
the Former Abrams Clients to stop paying commissions owed to AAA. (FAC ,i 16).
25
To the extent Plaintiffs evidence of breach rests on AAA's belated exercise of the
26
unilateral option to extend the term of employment, the claim fails as such a unilateral option is a
27
void restraint on trade, barred by Bus. & Prof. Code§ 16600. See Edwards v. Arthur Anderson
EARLY 28

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DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
MCRAE LLP
62739.1 ATIORNEYS AT LAW
1 LLP, 44 Cal. 4th 937, 946 (2008). Furthermore, given that the Employment Agreement was
2 entered into between AAA and Panaro, contains no assignment, successor or survivorship
3 provisions, and Abrams only came to exist months after Panaro ceased working for AAA, there is
4 no basis upon which Abrams could assert a right to enforce a personal service agreement 1,
5 particularly one with statutorily void non-competition and non-solicitation clauses, against Panaro
6 since the clear intentions and conduct of the parties to said agreement, Panaro and AAA, indicates
7 just the opposite. UF 1-5 and 28. In fact, this calls into question Abrams' presumptive
8 assignment of all AAA's employment agreements with its other talent agents.
9 Moreover, any claim that Panaro wrongly "solicited" Former Abrams Clients is likewise
10 barred by§ 16600. A covenant not to solicit a former employer's customers is treated as a
11 covenant not to compete and is invalid under section 16600. See Thompson v. Impaxx, Inc., 113
12 Cal. App. 4th 1425, 1429 (2003); Edwards, 44 Cal. 4th at 948 (citing Thompson); Metro Traffic
13 Control, Inc. v. Shadow Traffic Network, 22 Cal. App. 4th 853, 859-60 (1994). And, to the extent
14 Plaintiffs claim for breach of contract is based on AAA's and/or Abrams' purported divestment
15 of commissions on jobs booked by Former Abrams Clients, such argument similarly fails. KMR
16 has been and continues to transmit to AAA and/or Abrams all commissions on jobs booked by
17 Former Abrams Clients while those clients were still represented by AAA, but whom have since
18 secured new representation with KMR. UF 30. This is the extent ofKMR's obligations and
19 AAA's and/or Abrams' entitlement under the law. See Title 8 CCR §12001; Beyeler v. William
20 Morris Agency, Inc., 2001 WL 3618566, *4-5 (CA. Dept. Lab. Sept. 5, 2001). Accordingly, no
21 breach could have occurred.
22

23

24 1
"Although we recognize that assignability of things in action is now the rule and nonassignability
25 the exception, contracts of a purely personal nature generally fall under the exception. Rokos v.
Peck, 182 Cal. App. 3d 604, 617(1986)(citing Osuna v. Albertson, 134 Cal. App. 3d 71, 81-
26 82(1982)). Even if a contract contains a formal clause stating that it inures to the benefit of, and is
binding on, heirs, assigns, etc., this recital of assignability is not binding. The intention of the
27 parties, gathered from its terms, may still show that it calls for a purely personal obligation. See
Davis v. Basalt Rock Co., 107 Cal. App. 2d 436,444 (1951).
EARLY 28

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UJGITT MCRAE U.P DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
62739.1 ATIORNEYS AT LAW
a. AAA's unilateral option to extend the term of employment is an
unenforceable covenant not to compete
2
AAA's purported exercise of its unilateral option to extend Panaro's employment two
3
months after his employment had ended is a blatant violation of Bus. & Prof. Code§ 16600. In
4

pertinent part, § 16600 provides that "every contract by which anyone is restrained from engaging
5
in a lawful profession, trade, or business of any kind is to that extent void." Section 16600
6
codifies the strong legislative policy in favor of employee mobility and is opposed to any contract
7
that seeks to limit competition. See Edwards, 44 Cal. 4th at 946 (§ 16600 reflects settled
8
legislative policy "in favor of open competition and employee mobility").
9
AAA's fixed-term Employment Agreement is void under§ 16600. 2 It purports to grant
10
AAA the unilateral right to extend the length of employment for additional years, thereby
11
restraining Panaro's freedom to leave his job. See Edwards, 44 Cal. 4th at 946-47 (any restraint
12
on trade, no matter how narrow or reasonable, violates § 16600); Golden v. Cal. Emergency
13
Physicians Med. Grp., 782 F.3d 1083, 1086, 1092 (9th Cir. 2015) (§ 16600 proscribes "any
14
'restraint of a substantial character,' no matter its form or scope."). AAA unilaterally drafted the
15
Employment Agreement, granting itself superior, exclusive rights over its employees. UF 2-5.
16
Panaro had no opportunity to negotiate the terms other than monetary ones, further evidencing
17
unlawful restraints on trade. UF 2. Such an unfair practice puts AAA in a position to pay its
18
employees below-market salaries and lock them in, giving AAA an unfair advantage over
19
competitors who do not use unlawful contracts. Because the unilateral option to extend the term
20

21

22 2
This Court cannot rewrite the contract to render the noncompetition provisions lawful.
23 Numerous cases have consistently refused to apply a savings clause to remake or rewrite an
illegal covenant not to compete. Otherwise, "employers could insert broad, facially illegal
24 covenants not to compete in their employment contracts. Many, perhaps most, employees would
honor these clauses without consulting counsel or challenging the clause in court, thus directly
25 undermining the statutory policy favoring competition. Employers would have no disincentive to
use the broad, illegal clauses if permitted to retreat to a narrow, lawful construction in the event
26 oflitigation." Kalani v. Gluska, 64 Cal. App. 4th 402, 408 (1998) (stating it found no case
approving the rewriting of an illegal covenant not to compete into a narrow bar on theft of
27 confidential information); Dowell v. Pacesetter, 179 Cal. App. 4th 564, 579 (2009) "Any attempt
to construe the noncompete and nonsolicitation clauses in such a manner as to make them lawful
, EARLY 28
would not be reforming the contract to correct a mistake of the parties but rather to save a
E= ISULLIVAN
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statutorily proscribed and void provision").
lll~ffl GIZER &
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62739.1 ,
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ATIORNEYSATlAW
DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
1 of Panaro's employment constitutes an unlawful restraint on trade, the provision is void as a
2 matter oflaw. Bus. & Prof. Code §16600.
3 b. The Employment Agreement's purported bar on solicitation is
also void under § 16600
4
Abrams' claim that Panaro 3 wrongly solicited the Former Abrams Clients in breach of the
5
Employment Agreement (FAC ,i,i 2, 16) has no basis in law. A covenant not to solicit the former
6
employer's customers (clients) is treated as a covenant not to compete and is invalid under
7
Section 16600. See Reeves v. Hanlon, 33 Cal. 4th 1140, 1149 (2004) ("It has long been the public
8
policy of our state that 'a former employee has the right to engage in a competitive business for
9
himself and to enter into competition with his former employer, even for the business of ... his
10
former employer, provided such competition is fairly and legally conducted."') and citing Bus. &
11

Prof. Code § 16600); Metro Traffic Control, 22 Cal. App. 4th at 859 ("Section 16600 has
12
specifically been held to invalidate employment contracts which prohibit an employee from
13
working for a competitor when the employment has terminated, unless necessary to protect the
14
employer's trade secrets. The corollary to this position is that competitors may solicit another's
15
employees if they do not use unlawful means or engage in acts of unfair competition.") (internal
16
citations omitted); see also Dowell, 179 Cal. App. 4th at 577 (2009) (invalidating covenant not to
17
solicit customers with whom employees had contact during their last 12 months of employment,
18
for a period of 18 months post-employment); Edwards, 44 Cal. 4th at 948 (invalidating covenant
19
not to solicit customers of employer's L.A. office for 18 months after employment termination).
20
Here, Panaro did not even "solicit4 " his clients-he merely informed them that he had
21

22

23 3
The cause of action for breach of contract is only alleged against Panaro. (See FAC, 5.)
Although the evidence undermines the truth of the allegations alleged against both Panaro and
24 KMR, any purported misconduct by KMR is entirely irrelevant to Abrams' breach of contract
claim against Panaro.
25 4
"'Solicit' is defined as: 'To ask for with earnestness, to make petition to, to endeavor to obtain,
26 to awake or excite to action, to appeal to, or to invite.' 'It implies personal petition and
importunity addressed to a particular individual to do some particular thing. It means: 'To appeal
27 to (for something); to apply to for obtaining something; to ask earnestly; to ask for the purpose of
receiving; to endeavor to obtain by asking or pleading; to entreat, implore, or importune; to make
· EARLY 28 petition to; to plead for; to try to obtain." Aetna Bldg. Maintenance Co. v. West, 39 Cal. 2d 198,
==
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203-4 (1952) (internal citations omitted).
20
DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
MCRAE LLP
62739.1 ATIORNEYS AT LAW
obtained new employment with KMR after they reached out to him. UF 17 and 19. Such
2 communication does not amount to "solicitation." Aetna Bldg. Maintenance Co. v. West, 39 Cal.
3 2d 198,205 (1952) ("Merely informing customers of one's former employer of a change of
4 employment, without more, is not solicitation," affirming "West was entitled to accept business
5 from Aetna's former customers and such acceptance, by itself, did not constitute solicitation.").
6 But even if such communications did amount to solicitation, they were nevertheless a
7 valid exercise of Panaro's right to engage in a lawful profession, trade, or business. See Bus. &
8 Prof. Code § 16600; Dowell, 179 Cal. App. 4th at 577 (2009); Edwards, 44 Cal. 4th at 948. 5
9 Panaro has not breached his Employment Agreement by soliciting Former Abrams Clients.
10 c. KMR has paid AAA/Abrams the entirety of commissions it is
owed, forestalling any alleged breach of contract
11
Plaintiffs FAC falsely alleges that Panaro breached the Employment Agreement because
12
he and KMR "encouraged" the Former Abrams Clients to divert commissions from AAA to KMR
13
and that KMR is "wrongfully accepting those commissions." (FAC ,r,r 14, 16, 2). Such
14
allegations are a wholesale mischaracterization of the facts, and do not establish any breach of the
15
Employment Agreement by Panaro (or otherwise). KMR has been and continues to forward all
16
commission payments to AAA/Abrams for any jobs procured by AAA for the Former Abrams
17

18
5
19 Lest Abrams argue that the names and contact information for the Former Abrams Clients
appearing on AAA's client list are a protectable trade secret and, as such, its ban on solicitation is
20 valid (see Thompson, 113 Cal. App. 4th at 1429 ("Antisolicitation covenants are void as unlawful
business restraints except where their enforcement is necessary to protect trade secrets."),
21 Defendants preemptively note that information about AAA's clients is readily available to anyone
in the entertainment industry, and thus does not qualify as a protectable "trade secret" (setting
22 aside the fact there are no trade secret allegations in Abrams' FA C). For example, in The
Retirement Group v. Galante, 176 Cal. App. 4th 1226 (2009), the court found that the "names of
23 (and contact information for) existing customers were readily available to advisors from
independent third-party sources such as Schwabb or SSN, thereby obviating TRG's claim that the
24 names and contact information of existing customers constituted protectable trade secret
information." Id at 1240; Morlife, Inc. v. Perry, 56 Cal. App. 4th 1514, 1521 (1997) (noting
25 courts are "reluctant to protect customer lists to the extent they embody information which is
'readily ascertainable' through public sources, such as business directories."), quoted in The
26 Retirement Group, 176 Cal. App. 4th at 1240, n.12 (emphasis added). The Retirement Group
court ultimately vacated the injunction issued against TRG' s former employees that had blocked
27 them from "directly or indirectly soliciting any current TRG customers .... " 176 Cal. App. 4th at
1242. Here too, the names and contact information of the Former Abrams Clients (and others) on
EARLY 28 the AAA client list are not a trade secret. These actors and actresses work in the entertainment
==
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industry-they appear on television shows, in commercials, in movies, and elsewhere.
21
DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
MCRAE LLP
62739.1 ATIORNEYS AT LAW
Clients. UF 30. This is all the law requires KMR to do. See 8 CCR §12001; Beyeler v. William
2 Morris Agency, Inc., TAC No. 32-00, 2001 WL 3618566, *4-5 (CA. Dept. Lab. Sept. 5, 1001).
3 California Code of Regulations, Title 8, section 12001 provides that "a talent agency
4 contract may provide for the payment of compensation after termination thereof with respect to
5 any employment contracts entered into or negotiated for or to any employment accepted by the
6 artist during the term of the talent agency contract, or any extensions, options or renewals of said
7 employment contracts or employment." Id. (emphasis added).
8 In Beyeler v. William Morris Agency, Inc., TAC No. 32-00, 2001 WL 36518566 (CA.
9 Dept. Lab. Sept. 5, 2001), 6 the Labor Commissioner analyzed the extent to which William Morris,
10 a talent agency, was entitled to receive commissions on a three-year contract it procured for its
11 client, Kevin Beyeler (of the "Kevin & Bean" morning show on radio station KROQ), after
12 Beyeler terminated his (implied, oral) agency relationship with William Morris mid-way through
13 the three-year gig. Id. The Commissioner ultimately determined that in order "to be entitled to the
14 payment of compensation after termination of the contract between the artist and the talent
15 agency, the talent agency shall be obligated to serve the artist and perform obligations with
16 respect to any employment contract .... " Id. at *5. But because "there were no continuing
17 services required" of William Morris on the three-year contract it negotiated for Beyeler, William
18 Morris "fully performed their duty with respect to the KROQ employment contract," and was
19 therefore entitled to commissions for the entire three-year term. Id.at 5-6; see Stein Agency v.
20 James Tripp-Haith, TAC No. 46-05, 2006 WL7089517, *3 (CA.Dept. Lab., Oct. 30, 2006)
21 (discussing same). Notably, the Commissioner made no reference to commissions on any other
22 jobs Beyeler may have obtained after his agency relationship with William Morris had ended; the
23

24 6
In Styne v. Stevens, 26 Cal. 4th 42 (2001), the California Supreme Court recognized, "The
25 [Labor] Commissioner does not have a system of publication in which precedential decisions
under the Talent Agencies Act are printed. This does not obviate the rule of deference to
26 administrative construction .... Moreover, the rules of court do not bar our citation ofsuch
unpublished decisions to demonstrate administrative construction. See Cal. Rules of Court, rule
27 977(a) (prohibiting citation of unpublished Court of Appeal and appellate department
decisions.)." Id. at 53, n.4. Given that the California Supreme Court approved reliance on these
'EARLY 28 unpublished administrative decisions interpreting the Talent Agencies Act, Defendants do so
==: SULLIVAN here.
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DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
62739.1 ATIORNEYS AT LAW
1 only commissions William Morris was entitled to receive were those stemming from the one
2 (three-year) contract it procured for Beyeler while Beyeler was its client. Id
3 Likewise here, AAA is only entitled to receive commissions on jobs the AAA agency
4 procured for Former Abrams Clients, while those clients were still repped by AAA. Id To the
5 extent the term of those jobs continued after AAA's agency relationship with those clients ended,
6 AAA is entitled to receive those commissions. Id
7 But it is undisputed that KMR has been promptly forwarding those very commissions
8 back to AAA and/or Abrams upon receipt. UF 30. Such an arrangement is standard practice in the
9 industry. Beyeler, 2001 WL 36518566 at *4 (setting forth a "standard" AFTRA-approved agency
10 contract provision: "The Artist agrees to pay to the agent a sum equal to ten percent (10%) ... of
11 all moneys or other consideration received by the Artist directly or indirectly, under contracts of
12 employment entered into during the term specified herein .... Commissions shall be payable when
13 and as such moneys or other consideration are received by the Artist or by anyone for or on the
14 Artist's behalf.") Given that KMR is receiving commissions on the Former Abrams Clients'
15 behalf and remitting them back to AAA and/or Abrams, Abrams has suffered no harm; it is
16 receiving 100% of all commissions to which AAA's is entitled. 7 Id; VF 30. Therefore, no
17

18

19
7
20 To the extent Abrams purports to stake claim to "(ii) commissions on monies received
(whenever received) by the Former [Abrams] Clients for employment secured by Panaro and/or
21 KMR through September 27, 2019; and (iii) commissions on monies received (whenever
received) by any other KMR client for employment secured by Panaro and/or as a result of
22 Panaro's employment at KMR through September 27, 2019," such supposed claims are
completely asinine, and defy any standard industry practice. According to Beyeler, an agency is
23 only entitled to commissions on jobs it procures for its clients during the term of the agency
contract. 2001 WL 36518566 at *4-5. The former agency (AAA) is not entitled to commissions
24 on new jobs obtained by former clients, after they are no longer represented by the agency (i.e.,
commissions sought in prong (ii) above); the former agency did not procure those new jobs. Id;
25 see 8 CCR § 12002 ("A talent agency shall be entitled to recover a fee, commission or
compensation under an oral contract between a talent agency and an artist as long as the
26 particular employment for which such fee, commission or compensation is sought to be charged
shall have been procured directly through the efforts or services of such talent agency ....")
27 (emphasis added). And since AAA, the former agency, is not entitled to commissions on new
jobs booked by former clients at their new agency, a fortiori, AAA and for that matter Abrams
'EARLY 28 are not entitled to receive commissions on jobs they did not book for clients they never
==
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represented at all (i.e., prong (iii) above). To contend otherwise is mere folly. Id
23
DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
MCRAE LLP
62739.1 A1TORNEYS AT LAW
1 breach has occurred, and summary adjudication on this cause of action is warranted. 8
2 B. PANARO DID NOT BREACH THE IMPLIED COVENANT OF GOOD
FAITH AND FAIR DEALING
3
The breach of the covenant of good faith and fair dealing is "read into contracts and
4
functions 'as a supplement to the express contractual covenants, to prevent a contracting party
5
from engaging in conduct which (while not technically transgressing the express covenants)
6
frustrates the other party's rights to the benefits of the contract."' Thrifty Payless, Inc. v. The
7
Americana at Brand, LLC, 218 Cal. App. 4th 1230, 1244 (2013)(emphasis in original) (quoting
8
Racine & Laramie, Ltd. v. Department of Parks & Recreation, 11 Cal. App. 4th 1026, 1031-32
9
(1992)). There must be something beyond a mere breach of the terms of the contract.
10
However, as discussed in Section IV.A.I. above, the Employment Agreement was
11
mutually terminated. Without an existing contract, not only can there be no breach of the contract
12
itself, there also can be no breach of the implied covenant of the same. See Thrifty Payless, 218
13
Cal. App. 4th at 1244 (identifying the first element of breach of contract claim to be "the
14
existence of a contract"); Oasis West Realty, 51 Cal. 4th at 821. The court in Thrifty Payless even
15
recognized that "a breach of the implied covenant of good faith is a breach of the contract." 218
16
Cal. App. 4th at 1244. But again, since the contract had been mutually terminated, there was
17
nothing left to have been breached.
18

Even (illogically) ignoring the fact that a contract no longer exists, Abrams fails to make
19
any credible allegation of conduct, let alone produce any concrete evidence that demonstrates
20
Panaro frustrated AAA's attempts to achieve the benefits of the Employment Agreement. Indeed,
21
the allegations in the FAC itself indicate Abrams is unsure of what wrongdoing it is seeking to
22
remedy by this cause of action, instead burdening the Court to determine which alleged conduct
23
amounts to a breach of the contract itself versus a breach of the implied covenant. (See FAC if20.)
24
C. BECAUSE PANARO OWED NO FIDUCIARY DUTY TO AAA, ABRAMS'
25
CLAIM FOR BREACH OF FIDUCIARY DUTY COLLAPSES
26

27
8
EARLY 28
Additionally, because all commission payments have been remitted to AAA and/or Abrams
==
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(UF 30), Plaintiffs eighth cause of action for accounting is moot. (FAC ifif49-52).

DEFENDANTS' MOTION FOR SUMMARY JUDGMENT


MCRAE LLP
62739.1 ATIORNEYS AT LAW
1 Plaintiff's third cause of action alleges Panaro breached his fiduciary duty to AAA.
2 However, this claim is critically flawed in that it is missing a key component: a fiduciary duty.
3 Without one, there can be no claim for its breach as a matter of law. 0 'Byrne v. Santa Monica-
4 UCLA Medical Center, 94 Cal. App. 7th 797, 812 (2001).
5 The elements for a cause of action for breach of fiduciary duty are: "(1) existence of a
6 fiduciary duty; (2) breach of the fiduciary duty; and (3) damage proximately caused by the
7 breach." Stanley v. Richmond, 35 Cal. App. 4th 1070, 1086 (1995) (citing Pierce v. Lyman, l Cal.
8 App. 4th 1093, 1101 (1991)). "The absence of any one of these elements is fatal to the cause of
9 action." Pierce, l Cal. App. 4th at 1101.
10 As to the first element, a plaintiff must demonstrate a relationship "wherein one of the
11 parties is in duty bound to act with the utmost good faith for the benefit of the other party." Wolf
12 v. Superior Court, 107 Cal. App. 4th 25, 29 (2003). Such a relationship "ordinarily arises where a
13 confidence is reposed by one person in the integrity of another, and in such a relation the party in
14 whom the confidence is reposed, if he voluntarily accepts or assumes to accept the confidence,
15 can take no advantage from his acts relating to the interest of the other party without the latter's
16 knowledge or consent .... " Id. Some examples of fiduciary relationships include trustees and
17 beneficiaries, directors and majority shareholders, and business partners. Id. at 30.
18 Plaintiff's FAC alleges in a conclusory fashion that "during his employment at AAA,
19 Panaro was a fiduciary of AAA." (FAC ,r 24). Since making that empty allegation, Plaintiff has
20 failed to provide any supporting, admissible evidence to confirm any fiduciary relationship exists.
21 This is not surprising, given that employer/employee relationships generally are not fiduciary
22 relationships. 9 In fact, after a diligent search of applicable legal precedents, Defendants were
23

24 9
For example, in O 'Byrne v. Santa Monica-UCLA Medical Center, the court affirmed summary
judgment on plaintiff's fiduciary duty claim, finding that an employer-employee relationship does
25 not establish a fiduciary duty, and "in the absence of a fiduciary relationship, there can be no
breach of fiduciary duty as a matter of law." 94 Cal. App. 4th at 811-12; see Amid v. Hawthorne
26 Community Medical Group, Inc., 212 Cal. App. 3d 1383, 1391 (1989) ("A bare employee-
employer relationship does not create a confidential relationship." 9); Odorizzi v. Bloomfield
27 School Dist., 246 Cal. App. 2d 123, 129 (1966) ("Under prevailing judicial opinion no
presumption of a confidential relationship arises from the bare fact that parties to a contract are
'EARLY 28 employer and employee .... "); New v. New, 148 Cal. App. 2d 372, 381-82 (1957) (holding that
ES: SULLIVAN

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ATIORNEYS AT LAW
employment contract between employee and e~oyer does not give rise to a fiduciary
DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
1 unable to locate any authority (either binding or persuasive) to establish that a talent agent-
2 employee has a fiduciary relationship with its employer-talent agency. 10 Accordingly, Panaro's
3 status as an employee at AAA did not establish a fiduciary duty. Any argument that Panaro owed
4 a fiduciary duty to Abrams is even more tenuous since there is no evidence that Panaro ever
5 worked for Abrams which did not even come into existence until over two months after his
6 employment with AAA ended. And "in the absence of a fiduciary relationship, there can be no
7 breach of fiduciary duty as a matter oflaw." O'Byrne, 94 Cal. App. 4th at 811-12.
8 D. WITHOUT AN ACTUAL BREACH OF CONTRACT, TORTIOUS
INDUCEMENT OF BREACH OF CONTRACT NECESSARILY FAILS
9
Relying on the exact same facts alleged in its breach of contract claim, Plaintiffs fourth
10
cause of action for tortious inducement of breach of contract contends that "KMR intended to and
11
did, induce and cause Panaro to breach the [Employment] Agreement." (F AC ,i 30.) But
12
Plaintiffs claim for tortious inducement suffers from the same fatal flaw as its breach of contract
13
claim-where no breach has occurred, no claim exists.
14
To establish a tortious inducement of breach of contract, a plaintiff must prove "(1) he had
15
a valid and existing contract [with a third party]; (2) defendant had knowledge of the contract and
16
intended to induce its breach; (3) the contract was in/act breached by the contracting party; (4)
17
the breach was caused by defendant's unjustified or wrongful conduct; and (5) damages [were
18
suffered as a result." Shamblin v. Berge, 166 Cal. App. 3d 118, 122 (1985) (bracketed alterations
19
in orig.; emph. added; quoting Dryden v. Tri-Valley Growers, 65 Cal. App. 3d 990, 995 (1997)).
20

21

22
relationship); Wiltsee v. California Emp. Com., 69 Cal. App. 2d 120, 125 (1945) (finding that
23 employment contract entitling employee to 25 percent of future profits neither created a joint
venture nor gave rise to a fiduciary relationship).
24 10
To the extent Abrams is attempting to bootstrap a fiduciary duty based on its unsupported
25 contention that "Panaro owed AAA a duty of good faith, a duty of undivided loyalty, a duty of
confidentiality and a duty of disclosure," (FAC ,i 25), such claim is equally unavailing. The court
26 in Wolf similarly rejected the existence of a fiduciary duty merely because a party "reposed trust
and confidence in Disney to perform its contractual obligation." 107 Cal. App. 4th at 31. The
27 court explained, "every contract requires one party to repose an element of trust and confidence
in the other to perform." Id. But this alone "cannot create a fiduciary relationship." Id.; see also
EARLY 28 Zumbrun v. University of Southern California, 25 Cal. App. 3d 1, 13 (1972) ("mere placing of a
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trust in another person does not create a fiduciary relationship").

DEFENDANTS' MOTION FOR SUMMARY JUDGMENT


MCRAE LLP
62739.1 ATIORNEYS AT LAW
1 As discussed in Section IV.A., no breach of contract has occurred. Instead, the parties
2 mutually agreed to terminate the Employment Agreement, and in reliance on such termination,
3 Panaro lawfully began new employment. Moreover, KMR has remitted to AAA/Abrams all
4 commissions earned on jobs AAA booked for Former Abrams Clients (while those artists were
5 still represented by AAA). See Section IV.A, supra. No issues remain to be determined: no
6 breach has occurred; no harm has resulted. As such, summary adjudication is warranted.
7 E. PLAINTIFF'S INTENTIONAL INTERFERENCE CLAIM SUFFERS THE
SAME FATE AS ITS BREACH OF CONTRACT CLAIM
8
Plaintiffs fifth cause of action for intentional interference with contract relies again on the
9
exact same conduct as its fundamentally defective breach of contract claim. (See FAC if35 [citing
10
the conduct alleged in ,r,r 2, 10, 12, and 14-the very same conduct alleged to support the breach
11
of contract claim-as the basis for the intentional interference claim alleged here]). But the facts
12
alleged lack substance and no evidence exists to prove up such claim.
13
The elements of a claim for intentional interference with contractual relations are "(1) a
14
valid contract between plaintiff and a third party; (2) defendant's knowledge of this contract; (3)
15
defendant's intentional acts designed to induce a breach or disruption of the contractual
16
relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting
17
damage." Quelimane Co. v. Stewart Title Guaranty Co., 19 Cal. 4th 26, 55 (1998) (quoting
18
Pacific Gas & Elec. Co. v. Bear Stearns & Co., 50 Cal. 3d 1118, 1126 (1990) (emphases added)).
19
Even assuming that AAA had valid oral contracts with certain Former Abrams Clients,
20
and that Panaro knew of such relationships, Plaintiff can provide no admissible evidence to
21
establish that Panaro or KMR intentionally acted to induce a breach of those agreements. 11 No
22
such evidence exists because there was no breach of (or inte,ference with) AAA's contracts with
23
the Former Abrams Clients. UF 30; see Section IV.D, above.
24

25
11
26 Even ifthere were evidence of such intent, "[i]f the actor is not acting criminally nor with fraud
or violence or other means wrongful in themselves but is endeavoring to advance some interest of
27 his own, the fact that he is aware that he will cause interference with the plaintiffs contract may
be regarded as such a minor and incidental consequence and so far removed from the defendant's
i EARLY 28 objective that as against the plaintiff the interference may be found to be not improper."
5= SULLIVAN Quelimane, 19 Cal. 4th at 56 (emphases added).
5= WRIGHT 27
UJfjffl GIZER&
MCRAE LLP DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
62739.1 ATIORNffi AT LAW
1 The contracts by which the Former Abrams Clients were bound obligated those
2 individuals to pay AAA commissions on the jobs AAA had procured for them while the AAA
3 agency represented them, and for the full duration of those jobs. See Title 8 CCR §12001;
4 Beyeler, 2001 WL 3618566 at *4-5. Those Former Abrams Clients (via KMR) have paid and
5 continue to pay AAA and/or Abrams every penny of commission owed pursuant to those verbal
6 agreements. UF 30. Thus, there was no breach, no interference, and no resulting damages.
7 To the extent Abrams contends Panaro interfered with AAA's agreements with the Former
8 Abrams Clients by informing those clients he was leaving his employment, such notification was
9 entirely lawful. See Section IV.A.3.b. Further, while those oral representation agreements had no
10 specific duration, they were not intended to and could not have been indefinite. See Civ. Code§
11 1624(a)(l) (statute of frauds requires a writing "subscribed by the party to be charged" if an
12 "agreement that by its terms is not to be performed within a year from the making thereof'); 10
13 Cal. Jur. 3d § 10 ("A parol promise to be performed over a period of time that exceeds one year is
14 within the Statute of Frauds ... "). Instead, those agreements could be terminated at any time by
15 either party. Abrams acknowledges that the Former Abrams Clients terminated their relationship
16 with AAA. (See FAC ifl2). But even after the Former Abrams Clients ended their relationships
17 with AAA, those clients have continued to fulfill their residual obligations by remitting back to
18 AAA/Abrams all commissions owed on the jobs AAA booked. UF 30. No breach has occurred. 12
19 F. PLAINTIFF'S REMAINING CLAIMS LIKEWISE LACK MERIT
20 "The tort of interference with prospective economic advantage protects the same interest
21 in stable economic relationships as does the tort of interference with contract, though interference
22 with prospective economic advantage does not require proof of a legally binding contract."
23

24
12
25 To the extent Abrams is attempting to seize ownership of future (hypothetical) jobs it and/or
AAA might have been able to book for the Former Abrams Clients after those contracts were
26 terminated, Plaintiff's purported claim no longer qualifies as a claim for interference with
contractual relationship. See Quelimane, 19 Cal. 4th at 55 (requiring existence of valid contract
27 to maintain a claim for tortious interference with same). For now, there is no longer a predicate
contractual relationship between AAA and the third party-Former Clients upon which such claim
'EARLY 28 could be based. Without an existing contract, the claim would have to satisfy the elements of
5= SULLIVAN interference with prospective economic advantage, which it decidedly does not. See §F, herein.
5::::i WRIGHT 28
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DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
62739.1 ATIORNEYS AT LAW
1 Pacific Gas & Elec., 50 Cal. 3d at 1126. However, to establish a claim for interference with
2 prospective economic advantage, whether intentional or negligent, the interfering act must be
3 "wrongful by some measure beyond the fact of the interference itself." Della Penna v. Toyota
4 Motor Sales, US.A., Inc., 11 Cal. 4th 376, 393 (1995) (citation omitted). "[A]n act is
5 independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional,
6 statutory, regulatory, common law, or other determinable legal standard." Korea Supply Co. v.
7 Lockheed Martin Corp., 29 Cal. 4th 1134, 1159 (2003) (finding "independent wrong" element
8 satisfied by allegations of bribery and offering sexual favors to key foreign officials in violation
9 of the Foreign Corrupt Practices Act); see Lange v. TIG Ins. Co., 68 Cal. App. 4th 1179, 1187-88
10 (1998) (addressing negligent interference claim and finding that exercising contractual right of
11 termination did not constitute independently wrongful conduct). Here, Plaintiff has failed to offer
12 any evidence of independent wrongdoing (other than its unfounded allegations of breach of
13 contract, as discredited above). As such, these claims are irreparably flawed.
14 If this Motion is granted as to Plaintiffs breach of contract cause of action, this cause of
15 action also necessarily meets its demise. In alleging claims for interference with prospective
16 economic relations, Abrams' FAC relies on the exact same allegations as its claim for breach of
17 contract. See FAC ,r,r 35 (referring to conduct in ,r,r 2, 10, 12, and 14 as support for intentional
18 interference), 41 (referring to same as support for negligent interference). Abrams' interrogatory
19 responses offer no other evidence of interference with its interests independent of the acts
20 allegedly constituting a breach of contract. UF 29. Because Defendants have established by this
21 Motion that no breach of contract actually occurred, and Plaintiff has failed to offer any other
22 independently wrongful conduct, Plaintiffs claims for intentional interference unavoidably fail.
23 V. CONCLUSION
24 Based on the foregoing, Defendants respectfully request that the Court enter summary
25 judgment against Abrams, or in the alternative, summary adjudication.
26

27

EARLY 28
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DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
MCRAE LLP
62739.1 ATIORNEVS AT LAW
1
Dated: March 21 , 2019 EARLY SULLIVAN WRIGHT
2
GIZER & McRAE LLP
3

5
By:_\ -~---
- ~- ~C_. ~.,_ ).__
Devin A. McRae
-==-
--......._
Lisa L. Boswell
6
Amelia M. Collins
7 Attorneys for Defendant Kazarian/Spencer/Ruskin
& Associates, Inc. and Defendant and Cross-
8 Complainant Dean Panaro

10

11

12

1.3

14

15

16

17

18

19

20

21

22

23

24

25

26

27

' EARLY 28
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WGID MCRAE LLP DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
62739 .1 ; ATI'ORNEYSAT LAW
1 PROOF OF SERVICE
2 STATE OF CALIFORNIA, COUNTY OF LOS ANGELES
3
I am employed in the County of Los Angeles, State of California; I am over the age of 18
and not a party to the within action; my business address is 6420 Wilshire Boulevard, 17th Floor,
4
Los Angeles, California 90048.
5
On March 26, 2019, I served the foregoing document(s) described as: DEFENDANTS
KAZARIAN/SPENCE/RUSKIN & ASSOCIATES, INC. AND PANARO'S NOTICE OF
6
MOTION AND MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE
FOR SUMMARY ADJUDICATION on the interested parties to this action by placing a copy
7
thereof enclosed in a sealed envelope addressed as follows:
8
Martin D. Katz, Esq. Attorney for Plaintiff, Abrams Artist Agency
Dylan J. Price, Esq.
9
Alyssa Shauer, Esq.
SHEPP ARD, MULLIN, RICHTER &
10
HAMPTONLLP
1901 Avenue of the Stars, Suite 1600
11
Los Angeles, CA 90067
Tel: (310) 228-3700; Fax: (310) 228-3701
12
Email: mkatz@sheppardmullin.com
13 dprice@sheppardmullin.com
AShauer@sheppardmullin.com
14
D BY MAIL: I am readily familiar with the business practice for collection and processing
15 of correspondence for mailing with the United States Postal Service. I served the
following document(s) by enclosing them in an envelope and placing the envelope for
16 collection and processing correspondence for mailing. On the same day that
correspondence is placed for collection and mailing, it is deposited in the ordinary course
17 of business at our Firm's office address in Los Angeles, California within the United
States Postal Service in a sealed envelope with postage fully prepaid. Service made
18 pursuant to this paragraph, upon motion of a party served, shall be presumed invalid if the
postal cancellation date of postage meter date on the envelope is more than one day after
19 the date of deposit for mailing contained in this affidavit.

20 D BY PERSONAL DELIVERY: I caused such envelope to be delivered by hand to the


offices of the above-named addressee(s).
21
D BY OVERNIGHT DELIVERY: I served the foregoing document by Federal Express, an
22 express service carrier which provides overnight delivery, as follows. I placed true copies
of the foregoing document in sealed envelopes or packages designated by the express
23 service carrier, addressed to each interested party as set forth above, with fees for
overnight delivery paid or provided for.
24
~ BY E-MAIL: I caused to be e-mailed a true copy to the e-mail addresses listed above.
25
Executed on March 26, 2019, at Los Angeles, California.
26 I declare under penalty of perjury under the laws of the State of California that the
foregoing is true and correct. ~ ~
27

ESTHER SILVERMAN
' EARLY 28
EE:: SULLIVAN
5::::i WRIGHT 31
GIZER&
lUGffl MCRAE LLP DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
62739.1 , ATTORNEYS AT LAW
Court Reservation Receipt I Journal Technologies Court Portal

Journal Technologies Court Portal

Court Reservation Receipt


Reservation
Reservation ID: Status:
303931138858 RESERVED
Reservation Type: Number of Motions:
Motion for Summary Judgment 1
Case Number: Case Title:
18STCV02112 ABRAMS ARTISTS AGENCY vs DEAN PANARO, et al.
Filing Party: Location:
Dean Panaro (Defendant) Stanley Mosk Courthouse - Department 19
Date/Time: Confirmation Code:
August 13th 2019, 8:30AM CR-6CZAWASQIMAYJCUPE

Fees
Description Fee Qty Amount

Motion for Summary Judgment 500.00 1 500.00


Credit Card Percentage Fee (2.75%) 13.75 1 13.75
TOTAL $513.75

Payment
Amount: Type:
$513.75 Visa
Account Number: Authorization:
XXXX2047 01564G

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