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VIRGIN SCENT, INC., dba Art Naturals, a California corporation, Plaintiffs, v. BT SUPPLIES WEST, INC., a Nevada corporation; Steven Odzer, an individual; Lifeguard Licensing Corp., a Delaware corporation; Ruben Azrak, an individual; Sammy Cohen, an individual; and Does 1 to 10, inclusive, Defendants.
ORDER RE CROSS-MOTIONS FOR SUMMARY JUDGMENT AND MOTION FOR JUDGMENT ON THE PLEADINGS   
Three motions are currently before the Court. On June 3, 2022, Defendants BT Supplies West, Inc. (“BT”), Steven Odzer, Lifeguard Licensing Corp. (“Lifeguard”), Ruben Azrak, and Sammy Cohen (collectively, “Defendants”) filed a Motion for Partial Summary Judgment [Doc. # 108 (“DMSJ”)]. On that same day, Plaintiff Virgin Scent, Inc., doing business as Art Naturals, filed its own Motion for Partial Summary Judgment [Doc. # 109 (“PMSJ”)]. On June 10, 2022, Defendants filed a Motion for Judgment on the Pleadings [Doc. # 114 (“MJOP”)].
Plaintiff filed an omnibus opposition to Defendants’ MSJ and MJOP [Doc. # 116 (“Plaintiff's Opp.”)], and a reply in support of its MSJ [Doc. # 118 (“Plaintiff's Reply”)]. Defendants filed an opposition to Plaintiff's MSJ [Doc. # 117 (“Defendants’ Opposition”)] and an omnibus reply [Doc. # 119 (“Defendants’ Reply”)]. Defendants also filed objections to evidence submitted by Plaintiff with its Reply. [Doc. # 120.] All three motions are now fully briefed. The Court held a hearing on July 8, 2022. Having duly considered the parties’ written submissions and oral argument, the Court now renders the following ruling.
Plaintiff Virgin Scent is a company that sells hand sanitizer under the brand “artnaturals.” PSUF 2; DSUF 4.1 Its Chief Sales Officer is Michael Elefant. PSUF 1. Its President is Akiva Nourollah. PSUF 17.2 Akiva is also the Chief Executive Officer of a company called Day to Day Imports, Inc. (“Day to Day”). PSUF 17. Day to Day imports goods from overseas. PSUF 16. Day to Day and Virgin Scent are separate business entities. DSUF 8.
In March 2020, as COVID-19 began to spread around the world, Virgin Scent began selling hand sanitizer in large quantities, and Day to Day began selling face masks. PSUF 3. Defendant BT was a customer of both Virgin Scent and Day to Day. PSUF 8, DSUF 3. BT purchases and sells goods including paper goods and janitorial supplies. Defendant Odzer is its head of sales and acting CEO. DSUF 1, 31, PSUF 5, 73.3 During the pandemic, BT also bought and sold hand sanitizer and face masks. DSUF 2; PSUF 74. Odzer testified that, during this unprecedented period, supply and demand were changing rapidly, and orders were placed and filled at a tremendously fast pace. PSUF 77.
In March 2020, Odzer expressed an interest in purchasing hand sanitizer from Virgin Scent and face masks from Day to Day. PSUF 6. Elefant was Odzer's contact for both Virgin Scent and Day to Day. PSUF 18. Elefant and Odzer discussed price and quantity, as well as logistics. PSUF 7. On March 22, 2020, Odzer emailed Elefant a purchase order for five million units of hand sanitizer at a price of $2.40 each for a total value of $12,000,000. PSUF 8; see also [Doc. # 109-10].4 Odzer said he would send a $500,000 deposit for the hand sanitizer, and pay in advance for each batch of sanitizer that Virgin Scent was ready to ship. PSUF 12. Virgin Scent contracted with a manufacturer in China to produce and ship the sanitizer. PSUF 13.
On March 24, 2020, Elefant emailed Odzer and Azrak to confirm the quantity of hand sanitizer (five million units), price ($2.40 per unit), and schedule (150,000 per day, beginning on April 24, 2020). Elefant wrote “[a]dditionally as we will be responsible for the sourcing and purchasing of all of the components and ingredients you will be required to take all of the 5 million units as agreed upon.” See Suppl. Elefant Decl., Ex. 1 [Doc. # 118-14]. On March 25, 2020, Odzer sent Elefant an email stating “driver will be by you at 9 am for 20000 sanitizers and the masks As many as you can Copies is checks enclosed [sic] [.]” PSUF 15; see also Doc. # 118-16. Attached to the email were three checks from BT: one for $48,000, made out to “Virgin Scending,” with a notation of “20,000 x 2.40,” one for $120,000, made out to Day to Day Imports, Inc., with a notation of “deposit 3 ply 40 c,” and one for $500,000, made out to “Virgin Scending,” with a notation saying “deposit.” Id.5
The parties dispute whether one of the terms of purchasing the sanitizer was that it be made in the United States. See PSUF 9-11. Odzer testified that one of BT's customers, SDI, contracted with BT for an order of U.S.-made hand sanitizers on behalf of the New York City Department of Education. Odzer Decl. ISO Opp. ¶ 6. When Virgin Scent requested all documents and communications with SDI relating to the sale of hand sanitizer in discovery, though, BT stated it had no responsive documents. See Suppl. Kaufman Decl., Ex. 5 [Doc. # 118-10 at 44].6 Odzer testified that, for purposes of satisfying its contract with SDI, BT's order from Virgin Scent was for U.S.-made hand sanitizer. Odzer Decl. ISO Opp. ¶ 7.
On March 24, 2020, Elefant sent Odzer an email attaching a certification from Gordon Laboratories (“Gordon Labs”). See Odzer Decl. ISO Opp., Ex. 6 [Doc. # 117-5 at 10]. The email forwards another email from a Gordon Labs representative, stating “Gordon Labs is fully capable of large scale orders for hand sanitizers and other projects for Art Naturals.” Id. at 11. Also attached to the email was a Safety Data Sheet from Gordon Labs, which identifies Gordon Labs as being located in California. Id., Ex. 7 [Doc. # 117-5 at 18]. Odzer testified that BT sent someone to inspect the lab to ensure that the goods were U.S.-made, see Odzer Depo. at 32, but Defendants did not identify that person in discovery. Elefant testified the Safety Data Sheet was for a special order of 20,000 units Odzer had placed. See Elefant Decl. ISO PMSJ ¶ 16 [Doc. # 109-3]. But neither the email nor the safety data sheet indicates the size of the order at issue.
In April 2020, Virgin Scent made several shipments of hand sanitizer to BT and its customers: 40,000 units on April 24, 2020; 210,000 units on April 26, 2020; 280,000 units on April 27, 2020; and 140,000 units on April 28, 2020. PSUF 32-35. After April 28, 2020, Virgin Scent stopped shipping sanitizer to BT, but the parties dispute the reason why Virgin Scent stopped shipping units.
Elefant asserts Virgin Scent stopped making shipments because BT did not pay for the units it had received. See Elefant Decl. ¶ 36. On May 3, 2020, Sammy Cohen, BT's Director of Global Sourcing, sent Elefant an email requesting “an updated shipping status on all our orders ․ When can I get it, thanks.” Suppl. Elefant Decl. ¶ 13, Ex. 9 [Doc. # 118-22]. In response, Elefant wrote: “We had a schedule of 150K sanitizer coming a day to you. We stopped it a few days ago and would love to resume.” Id. Odzer wrote back “Yes, Ill [sic] send you money in the morning for sanitizer. How many can you ship tomorrow?” Id. Two weeks later, on May 15, 2020, Odzer sent Elefant an email saying “I will continue to pay upfront for the sanitizer.” Supp. Elefant Decl. ¶ 14, Ex. 10 [Doc. # 11-23].
In his deposition, Odzer testified that he “ultimately paid [Virgin Scent] in full for everything.” Scholl Decl. ISO Opp., Ex. 1 (“Odzer Depo.”) [Doc. # 117-3 at 41]. He said Virgin Scent had voided the contract by failing to deliver U.S.-made goods, and that BT and Virgin Scent “agreed on a different—we agreed on the price on Chinese goods.” Id. Odzer testified that “[Virgin Scent] said many times that [$1.10]’s what Chinese goods cost them.” Id. When asked, he later clarified that $1.10 was the price Cohen had told him Chinese-made goods cost BT to import, but that Virgin Scent “didn't deny it,” and said they would sell the sanitizer to BT for $2.00 per unit. Id. at 42. Based on a review of BT records, Odzer testified that BT paid Virgin Scent $1,858,000 in total for hand sanitizer, and asserts that based on their renegotiated price of either $1.10 or $1.45, this was an overpayment. Odzer Decl. ISO Opp. ¶¶ 16-18 [Doc. # 117-5].
On April 25, 2020, Cohen emailed Elefant, asking to please “clarify” “1—the sanitizers we already received from you are made in USA or China? 2—the new order Steve just placed with you is made in USA or China? We need to understand exactly and have total transparency. Thank you.” See [Doc. # 109-8 at 15]. Elefant responded: “The initial 25K units that's shipped a few weeks ago those were made in the USA. The first 5 million piece order that we started shipping on Friday are goods that are made in China. The second order that we will be making will be goods made in China.” Id. Cohen replied: “We were not under the understanding that the last 5 mil were made in China. Did you let anyone know that ? Please hold off on the new 5 million that were just placed. Do not proceed with the order till we get back to you. Please confirm. Thanks.” Id. After Elefant confirmed, Cohen followed up: “You know the price of this item in China is 1.10 and if we knew it was made in China we wouldn't have paid you this price? We only paid you this price cause we thought it was made in USA.” Id. Elefant responded, “Are you asking to cancel the initial order?” Id. Cohen replied “I'm asking to relook at the price or let me know how many are not made yet that we can possibly drop without hurting our relationship.” Id. at 33. Odzer then replied “No the second one” to Elefant's email. Id. at 22; see also Odzer Decl. ISO Opp. ¶ 14 (stating BT “immediately canceled” its second five million unit order).
On April 27, 2020, Elefant emailed Odzer, stating “As per our conversation we would like to move forward with the order for the next 5 million sanitizers.” Elefant offered to sell for $2.00 per unit. Odzer forwarded the email to Cohen. In response, Cohen wrote:
It makes zero sense Steve. We land it here for 1.45 and it's just as nice. I promise you this is one item that comes in and is seamless. We can do other items with him. But not this. Even the first 5 mill we should limit to what we really need. Especially when money is so tight. Take what you need till end May and cut it back. Don't let these guys manipulate you. Please!!
Odzer replied, “Ok Your [sic] the boss You see I wired today for 15 containers.” Suppl. Kaufman Decl., Ex. 7 [Doc. # 118-12]. Cohen testified that he could order hand sanitizer directly from Chinese suppliers for between $1.10 and $1.45, including the cost of shipping. See Cohen Decl. ¶ 4; see also Scholl Decl. ISO Opp., Ex. 2 (Cohen Depo.) at 4 [Doc. # 117-4]. Still, on May 3, 2020, Elefant wrote in a WhatsApp conversation that “[Cohen] just said we are not doing the second 5 million.” After a discussion of the price, Odzer responded: “I'll take it I'll talk to sammy He doesn't appreciate the value of not having to pay a month up front.” See Notice of Errata, Ex. 3 [Doc. # 112-3].
On May 14, 2020, Virgin Scent resumed shipping hand sanitizer to BT, shipping 140,000 units on May 14; 70,000 units on May 22, 2020; 140,000 units on June 4, 2020; 70,000 units on June 5, 2020; and 70,000 units on June 8, 2020. PSUF 37-42.7 Elefant asserts this was because BT had made some payments toward its past-due balance, and so Virgin Scent began shipping again as a show of good faith. Elefant Decl. ¶ 39. Odzer testified that, now that he was aware the sanitizer was Chinese-made, he was “buying spot goods” from Virgin Scent and paying them a lower $1.10 price. Odzer Depo. at 45; see also Odzer Decl. ISO Opp. ¶ 22 (stating that BT made spot buys from Virgin Scent for other clients who did not care about the country of origin after April 2020). On May 20, 2020, Odzer emailed someone named Benjamin Beller, copying Elefant, and asking Beller to pick up 70,000 units of sanitizer from Elefant and “send to DCAS.” Suppl. Elefant Decl., Ex. 11 [Doc. # 118-24].
In total, Virgin Scent shipped 1,160,000 units of sanitizer to BT. PSUF 44. It is undisputed that Virgin Scent did not ship additional sanitizer units to BT after June 8, 2020. PSUF 43. At $2.40 per unit, this would result in a total amount due of $2,784,000. Virgin Scent asserts BT paid it only a total of $548,000 for hand sanitizer. See Suppl. Kaufman Decl. ¶ 7, Ex. 3 [Doc. # 118-3]. A “Find Report” produced in discovery by BT, which Virgin Scent's counsel asserts shows all payments by BT to Virgin Scent, shows two transactions with “Virgin Sending”: one on March 27, 2020 for $500,000, and one on March 30, 2020 for $48,000. Id.
Virgin Scent never shipped 3,480,000 units of BT's 5,000,000-unit hand sanitizer order. PSUF 46. Those units remain in Virgin Scent's warehouse, accruing storage costs. PSUF 53. In June 2020, Virgin Scent attempted to sell those units to other buyers, including attempting to sell it for a lower price, but was unable to do so. PSUF 54-55. Elefant testified that this was because the market for hand sanitizer was saturated. Elefant Decl. ¶ 57. In fact, Elefant testified that Virgin Scent was unable to give the sanitizer away. Id. at ¶¶ 58-59. Defendant Cohen was involved, however, in sourcing hand sanitizer for BT throughout 2020, and he asserts that he was aware of at least three other companies who were able to sell sanitizer in late summer to early fall 2020. Cohen Decl. ¶ 5 [Doc. # 117-6].
BT also ordered 10 million masks from Day to Day in March 2020, which Virgin Scent shipped and for which BT paid. See Compl. ¶¶ 33-35 [Doc. # 1]; Answer ¶¶ 33-35 [Doc. # 25]; see also DSUF 9. Virgin Scent asserts that BT ordered an additional 20 million surgical masks from Day to Day, but there is no signed writing to that effect. DSUF 17. On April 17, 2020, BT issued a purchase order, made out to Day to Day, for 10 million surgical masks at a price of $0.63 per unit. See Odzer Decl., Ex. 1. Invoices from late March and early April 2020, issued by Day to Day to BT, show various quantities of surgical masks, mostly at $0.41 per unit (although two invoices show a price of $0.70 per unit). An invoice from April 13, 2020 shows five million surgical masks at $0.65 per unit. An invoice from April 30, 2020 shows 10,640,000 surgical masks at $0.41 per unit, with a statement that “all shipped on April 2020.” A May 5, 2020 invoice shows 3,120,000 surgical masks at $0.41 per unit. See Odzer Decl., Ex. 2 [Doc. # 108-4].
On April 8, 2020, Virgin Scent shipped 50,000 KN-95 masks to BT's customers. PSUF 20. Around April 14, 2020, BT received 642,000 3-ply masks from Day to Day, shipped by Virgin Scent, at a listed price of $0.41 per unit. PSUF 21.8 BT subsequently received a number of shipments of 3-ply masks from Day to Day, shipped by Virgin Scent, at a listed price of $0.65 per unit: 1,000,000 on April 17, 2020; 924,000 on April 19, 2020; 3,076,000 on April 20, 2020; 4,660,000 on April 23, 2020. PSUF 22-25.9 BT then received a number of shipments of 3-ply masks from Day to Day, shipped by Virgin Scent, at a listed price of $0.60 per unit: 1,426,150 on April 26, 2020; 1,426,150 on May 1, 2020; 1,550,000 on May 4, 2020. PSUF 26-28.10 In total, BT received about 14,855,650 masks from Day to Day between about April 14, 2020 and May 4, 2020. PSUF 30. Defendants offer no evidence to dispute Virgin Scent's assertion that BT did not pay for all masks it received after April 2020. See PSUF 29. Defendants also argue that Day to Day and BT renegotiated the “misquoted” price of $0.65 or $0.60 for the masks, but offer no evidence in support of that assertion. See PSUF 31. The masks were not produced specially for BT. DSUF 24-25.
On April 20, 2020, Odzer sent Elefant an email identifying the number of masks BT had received and the amount of payment due. Odzer stated BT would send the balance on the following day, as they had reached their wire limit, and that they would also pay for what they had received that day. He further stated “I believe this is fair, every day we pay for what we received the day before.” [See Doc. # 109-7.]
On April 21, 2020, Cohen emailed Odzer, stating, “[w]hy are you using your tight money for this. You can't string him along a little bit so we can pay the others stuff we badly need. He's 65 and we don't even need it that badly.” DSUF 44. Odzer replied “I'll wire the two $500 k's tomorrow with the gloves and sanitizer. You have my word.” DSUF 45.
On May 5, 2020, Elefant emailed Odzer, stating “we had an agreement to procure another 50 million units of face masks for the city which we have done and are now sitting in our facility. We also took a minimal (500k) deposit on 5 million hand sanitizers which you have not been picking up and or been paying for.” [See Doc. # 116-2.] Any response by Odzer is not before the Court.
Odzer testified that BT agreed to pay $0.41 per unit for four million masks, and $0.63 per unit for ten million masks. See Odzer Depo. at 48; Odzer Decl. ISO Opp. ¶ 23. On July 3, 2020, Elefant emailed Odzer and stated in part, “[t]here was an agreement made for us to sell you 20+ Million masks at 63 per mask ․ Over time we all agreed to lower the price to 40 with the goal of simply getting out of the deal. Note after weeks if not months of you claiming to take the masks at the 40 range.” [See Doc. # 116-4.] Elefant proposed a new arrangement for Odzer to order additional masks. Odzer responded “Guys I'll try to make this work but I need till Sunday Have to see what We ordered already and what we can cancel.” Text messages from July 2020 apparently show Odzer repeatedly committing to send payment for masks and sanitizer. [Doc. # 116-5.]
In total, BT paid Day to Day a total of $8,966,400. PSUF 49.
On November 12, 2020, Day to Day assigned its interest in the agreement with BT for 3-ply masks to Virgin Scent. PSUF 59.11 Virgin Scent accepted the assignment. PSUF 61.
Virgin Scent filed the instant action in Los Angeles County Superior Court on November 23, 2020. [Doc. # 1-1]. BT removed to this Court, invoking the Court's diversity jurisdiction, on January 8, 2021. [Doc. # 1.] Virgin Scent asserts claims for (1) breach of written contract, (2) breach of oral contract, and (3) false promise against BT and Odzer, and (4) a claim for conspiracy against BT, Odzer, Lifeguard, Azrak, and Cohen.12 Virgin Scent asserts that BT and Odzer breached written and oral contracts for the sale of masks; BT and Odzer never intended to honor the contracts and therefore committed the tort of false promise; and BT, Odzer, Lifeguard, Azrak, and Cohen conspired to commit the tort of false promise.
BT filed its Answer on January 15, 2021, asserting 13 affirmative defenses. [Doc. # 10.] Several of BT's “affirmative defenses” are not, in fact, affirmative defenses, but they include failure to mitigate, laches, unclean hands, and estoppel. BT also asserts that it “incorporates those affirmative defenses enumerated in FRCP 8 as if fully set forth herein․ for the specific purpose of not waiving any such defense. In the event further investigation or discovery reveals the applicability of any such defenses, Defendants reserve the right to seek leave of the Court to amend this Answer to the Complaint and to specifically assert any such defense.” BT Answer at 9. On May 18, 2021, Cohen, Odzer, Azrak, and Lifeguard filed their Answer, asserting the same affirmative defenses. BT also amended its Answer to assert counterclaims for (1) breach of contract, (2) breach of the covenant of good faith and fair dealing, and (3) fraud in the inducement. [Doc. # 25.]13 BT's counterclaims are based on their allegation that Virgin Scent contracted to supply U.S.-made sanitizer, and breached that agreement by supplying Chinese-made sanitizer. Virgin Scent filed its Answer to BT's Counterclaims on July 28, 2021. [Doc. # 33.] Virgin Scent asserted 17 affirmative defenses to the Counterclaims.
On June 3, 2022, Virgin Scent and Defendants each filed a motion for partial summary judgment. Defendants move for summary judgment on the grounds that (1) there is no contract between Virgin Scent and BT for masks, so Virgin Scent's breach of contract claim must fail as to that alleged agreement, (2) the statute of frauds bars Virgin Scent from enforcing the alleged oral contract for masks, (3) the economic loss rule bars Virgin Scent's false promise claim against BT and Odzer, (4) there is no tort that can form the basis of Virgin Scent's conspiracy claim, (5) Odzer is entitled to summary judgment for the contract claims because he did not contract with Virgin Scent or Day to Day, and (6) Odzer is entitled to summary judgment for the contract and false promise claims because he was acting in the course of his employment in contracting with Virgin Scent and Day to Day.
Virgin Scent moves for summary judgment on the following issues: (1) BT breached its contract with Virgin Scent for hand sanitizer, (2) BT failed to pay for hand sanitizer it received, (3) BT failed to pay for surgical masks it received, (4) BT owes Virgin Scent for sanitizer units it ordered but for which it did not take delivery, and (5) Defendants failed to mitigate and waived their counterclaims.
On June 10, 2022, Defendants also moved for judgment on the pleadings as to Virgin Scent's second, third, and fourth causes of action. As Defendants acknowledge, that motion was untimely, as it was filed after the dispositive motion deadline of June 3, 2022. Because the issues to be resolved in Defendants’ MJOP are essentially the same as those to be resolved in the parties’ cross-MSJs, however, the Court will consider the MJOP.
Defendants interposed various evidentiary objections to Virgin Scent's evidence. The Court has addressed many of them individually, but will address several here.
Virgin Scent failed to authenticate any of the documents attached to its MSJ or its Opp. Defendants object to the documents on that basis, but do not dispute their authenticity. Virgin Scent is therefore ORDERED to file a declaration or declarations properly authenticating the exhibits filed in support of its MSJ and its Opposition.14
In support of their Opposition to Virgin Scent's MSJ, Defendants offer a declaration by Defendant Sammy Cohen in which he asserts that:
In or around summer 2020 to early fall 2020, companies were still able to sell hand sanitizers. While the market was starting to become saturated, the sanitizers were still being sold. I knew of at least three other companies sourcing hand sanitizers like Virgin Scent that were still selling and able to sell their hand sanitizers. Prices may have been starting to be affected at this time, but the ability to sell should have been unaffected.
Cohen Decl. ISO Opp. ¶ 5 [Doc. # 117-6]. Cohen asserts that he was familiar with the market for hand sanitizer because he was involved with sourcing BT's purchase of approximately 10 million units of hand sanitizer in 2020. Id. at ¶ 3. Virgin Scent objects to paragraph 5 of the declaration the grounds that it constitutes improper opinion testimony and is hearsay. Virgin Scent's hearsay objection is OVERRULED: there is no out-of-court statement contained in paragraph 5 of the Cohen declaration. Virgin Scent's objection that Cohen's statement constitutes improper opinion testimony is, however, SUSTAINED as to the first, second, and fourth sentences of this paragraph. These statements regarding the state of the market for hand sanitizer in summer and fall of 2020 are not rationally based on Cohen's perception, as they must be in order to constitute proper lay opinion testimony. See Fed. R. Evid. 701. Cohen's statement that he knew of other companies sourcing and selling hand sanitizer is, however, admissible, since it falls within the scope of his personal knowledge.
Defendants also objected to new evidence introduced with Virgin Scent's Reply, and requested leave to file a sur-reply to address the new evidence. Defendants argue that new arguments on reply should not be considered. But Virgin Scent's new evidence does not pertain to new arguments: rather, it responds to Defendants’ evidentiary objections and other arguments raised by Defendants in their Opposition. The Court thus DENIES Defendants’ request for leave to file a sur-reply.
REQUESTS FOR JUDICIAL NOTICE
In support of its MSJ, Defendants ask the Court to take judicial notice of various filings with the California Secretary of State regarding Day to Day and Virgin Scent. The accuracy of these documents is not reasonably subject to dispute, and the Court therefore GRANTS Defendants’ request. See Nat'l Grange of the Ord. of Patrons of Husbandry v. California State Grange, 182 F. Supp. 3d 1065, 1075 (E.D. Cal. 2016) (documents filed with the California Secretary of State are proper subjects of judicial notice).
In support of its Opposition, Defendants ask the Court to take judicial notice of a March 24, 2021 citizen petition to the Food and Drug Administration (“FDA”) asserting that certain hand sanitizers, including Virgin Scent's, contain significantly more benzene, a carcinogenic substance, than permitted by the FDA. Defendants also ask the Court to take judicial notice of other actions filed against Virgin Scent relating to the alleged toxicity of its hand sanitizer. See Defendants’ Request for Judicial Notice (“RJN”) [Doc. # 117-7].
As Virgin Scent acknowledges, these documents are proper subjects for judicial notice. See, e.g., Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006) (courts can properly take judicial notice of other court filings and matters of public record). But the documents are not relevant to any of Virgin Scent's claims, Defendants’ counterclaims, or Defendants’ affirmative defenses: the petitions were all filed in 2021 or later, months after the events at issue here occurred. Defendants do not argue that they repudiated their agreement with Virgin Scent because of the high levels of benzene in Virgin Scent's products. The Court therefore DENIES as moot Defendants’ RJN 15
A. Cross-Motions for Summary Judgment
Summary judgment should be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); accord Wash. Mut. Inc. v. United States, 636 F.3d 1207, 1216 (9th Cir. 2011). Material facts are those that may affect the outcome of the case. Nat'l Ass'n of Optometrists & Opticians v. Harris, 682 F.3d 1144, 1147 (9th Cir. 2012) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). A dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Liberty Lobby, 477 U.S. at 248, 106 S.Ct. 2505.
The moving party bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party has met its initial burden, Rule 56(c) requires the nonmoving party to “go beyond the pleadings and by her own affidavits, or by the ‘depositions, answers to interrogatories, and admissions on file,’ designate ‘specific facts showing that there is a genuine issue for trial.’ ” Id. at 324, 106 S.Ct. 2548 (quoting Fed. R. Civ. P. 56(c), (e)); see also Norse v. City of Santa Cruz, 629 F.3d 966, 973 (9th Cir. 2010) (en banc) (“Rule 56 requires the parties to set out facts they will be able to prove at trial.”). “In judging evidence at the summary judgment stage, the court does not make credibility determinations or weigh conflicting evidence.” Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007). “Rather, it draws all inferences in the light most favorable to the nonmoving party.” Id.
A court presented with cross-motions for summary judgment must review each motion separately, giving the nonmoving party for each motion the benefit of all reasonable inferences from the record. Center for Bio-Ethical Reform, Inc. v. Los Angeles Cty. Sheriff Dep't, 533 F.3d 780, 786 (9th Cir. 2008).
B. Motion for Judgment on the Pleadings
“After the pleadings are closed—but early enough not to delay trial—a party may move for judgment on the pleadings.” Fed. R. Civ. P. 12(c). Judgment on the pleadings is properly granted only when, taking all the factual allegations in the complaint as true, “the moving party is entitled to judgment as a matter of law.” Fairbanks N. Star Borough v. U.S. Army Corps. of Eng'rs, 543 F.3d 586, 591 (9th Cir. 2008) (quoting Dunlap v. Credit Protection Ass'n, L.P., 419 F.3d 1011, 1012 n. 1 (9th Cir. 2005) (per curiam)). A court must construe the factual allegations in the pleadings in the light most favorable to the non-moving party, but as in a Rule 12(b)(6) motion, it need not accept as true conclusory allegations that are contradicted by matters properly subject to judicial notice or by exhibits incorporated into the complaint by reference. See Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009) (citing Turner v. Cook, 362 F.3d 1219, 1225 (9th Cir. 2004)); Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). “Generally, district courts have been unwilling to grant a Rule 12(c) dismissal unless the movant clearly establishes that no material issue of fact remains to be resolved and that he is entitled to judgment as a matter of law.” Doleman v. Meiji Mut. Life Ins. Co., 727 F.2d 1480, 1482 (9th Cir. 1984) (citation and internal quotation marks omitted).
A. Breach of Contract
Both sides seek summary judgment on various issues regarding contracts between Virgin Scent and BT for hand sanitizer and between Day and Day and BT for masks.
In its Complaint, Virgin Scent identifies two mask orders placed by BT: one for 10 million 3-ply masks, placed in March 2020, which Virgin Scent shipped and for which BT paid (the “March Order”), and one for 20 million masks, placed on April 17, 2020 (the “April Order”), for a portion of which a purchase order was issued in the amount of 10 million masks (the “Purchase Order”).16 See Compl. ¶¶ 33-37 (explaining that in March 2020, BT ordered 10 million masks, which were shipped and paid for, and that on April 17, 2020, BT orally ordered 20 million additional 3-ply disposable masks, and issued a purchase order for 10 million of those masks). Virgin Scent alleges that “the entire [April Order] of 20,000,000 masks is sitting in Art Naturals’ warehouse, ready to ship, and accruing monthly storage fees.” Id. at ¶ 47. BT admitted the existence of the March Order, but denied the existence of the April Order. See Answer ¶¶ 33-37. The Purchase Order appears in the record currently before the Court, but at the hearing on this matter, Virgin Scent's counsel asserted that none of those 10 million masks were ever shipped. It is undisputed that 14,855,650 3-ply masks were shipped by Virgin Scent to BT between April 14, 2020 and May 4, 2020.17 It is also undisputed that BT paid Day to Day a total of $8,966,400 for masks. The parties dispute whether the amount paid by BT is the full amount owed for the nearly 15 million masks that actually shipped.
Before the Court are three separate questions regarding the various contracts for masks: (1) whether Virgin Scent's failure to plead Day to Day's assignment of its mask contracts to Virgin Scent dooms its claims regarding masks; (2) whether the statute of frauds bars all of the claims as to masks alleged in Virgin Scent's Complaint; and (3) whether Virgin Scent is entitled to summary judgment as to any of the claims as to masks alleged in its Complaint. As described in further detail below, the Court concludes that the failure to plead assignment does not bar Virgin Scent's claims for masks, the statute of frauds bars some but not all of Virgin Scent's claims as to masks, and Virgin Scent is entitled to partial summary judgment as to a portion of its claims for breach of contract regarding masks. The Court clarifies, however, that its conclusion that some of Virgin Scent's claims are not barred by the statute of frauds does not resolve the question of whether BT is in fact liable for all those claims.
Defendants move for summary judgment on the basis that Virgin Scent did not contract with BT for the sale of masks, and that to the extent Day to Day assigned its rights under the mask contract to Virgin Scent, Virgin Scent failed to plead assignment and thus Defendants are entitled to summary judgment.
Defendants cite to orders granting motions to dismiss on the basis that the plaintiffs had failed to sufficiently allege assignment in their complaints. See, e.g., Deutsche Bank Nat. Tr. Co. v. F.D.I.C., 784 F. Supp. 2d 1142, 1161 (C.D. Cal. 2011) (dismissing breach of contract claims where plaintiffs did not sufficiently allege assignment such that the defendant was not clearly the proper defendant); MAO-MSO Recovery II, LLC v. Farmers Ins. Exch., No. CV 17-02522-CAS (PLAx), 2017 WL 5634097, at *5 (C.D. Cal. Nov. 20, 2017) (dismissing complaint because plaintiffs had not demonstrated they had standing to bring the claims they sought to assert); Griswold v. Liberty Mut. Grp., Inc., No. ED CV 19-00662-JAK (SPx), 2021 WL 8572162, at *8 (C.D. Cal. Aug. 31, 2021) (dismissing complaint where plaintiff had not sufficiently alleged facts to show that conditions for insurance coverage had been met such that the insured could validly assign its rights to the plaintiff). This action has moved, however, well beyond testing the pleadings. There is no question here that Defendants had notice of the nature of Virgin Scent's claims: indeed, Defendants admitted in their Answer to placing the March Order with Virgin Scent, despite the fact that all the evidence shows BT's contracts for masks were with Day to Day. The Court concludes that Virgin Scent's failure to plead assignment of Day to Day's claims did not prejudice Defendants. Cf. Galindo v. Stoody Co., 793 F.2d 1502, 1513 (9th Cir. 1986) (“An amendment that seeks to conform the pleadings to proof introduced at trial is proper under Rule 15(b) unless it results in prejudice to one of the parties.”). Defendants’ MSJ is thus DENIED as to Virgin Scent's failure to plead assignment.
b. Statute of Frauds
Defendants also assert that all of Virgin Scent's claims for breach of contract for masks are barred by the statute of frauds. In California, the statute of frauds provides that “a contract for the sale of goods for the price of five hundred dollars ($500) or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his or her authorized agent or broker.” Cal. Com. Code § 2201(1).
Virgin Scent contends that Defendants’ statute of frauds defense is waived. Defendants did not plead the statute of frauds in their Answer, despite the requirement under Federal Rule of Civil Procedure 8 that the statute of frauds must be specifically pled as an affirmative defense. In this circuit, however, district courts may allow a defendant to plead an affirmative defense in a later motion, including a motion for summary judgment, if there is no prejudice to the other side. Simmons v. Navajo Cnty., Ariz., 609 F.3d 1011, 1023 (9th Cir. 2010). Defendants apparently did not raise their statute of frauds defense until May 26, 2022, eight days before filing the instant MSJ. See Defs.’ Reply at 13-14. This is not the type of advance notice that is generally sufficient to permit an affirmative defense to be asserted for the first time at summary judgment. Cf. Corbin v. Time Warner Ent.-Advance/Newhouse P'ship, 821 F.3d 1069, 1080 n.10 (9th Cir. 2016) (reasoning that the district court properly considered an affirmative defense pled for the first time in a motion for summary judgment where the plaintiff had notice of the defense five months before the motion was filed). Still, in its Opposition, Virgin Scent argues only cursorily that it would have “engaged in discovery aimed to meet” the statute of frauds defense had it known sooner that such a defense would be raised, without specifying how discovery aimed at establishing an exception to the statute of frauds might have differed from discovery aimed at establishing the existence of a valid contract. It is not obvious to the Court that discovery would have been substantially different, and Virgin Scent does not ask leave to take new discovery to meet this defense. The Court thus finds no prejudice to Virgin Scent from Defendants’ failure to plead the statute of frauds in their Answer, and concludes that the defense is not waived.
Defendants’ statute of frauds defense still largely fails, however, on the merits. California's Uniform Commercial Code contains several exceptions to the statute of frauds. First, California law provides that if an agreement is (1) between merchants, and (2) “within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents,” the statute of frauds is satisfied “unless written notice of objection to its contents is given within 10 days after it is received.” Cal. Com. Code § 2201(2). Second, California law provides that a contract within the scope of the statute of frauds is still enforceable even without a writing “[w]ith respect to goods ․ which have been received and accepted.” Id. at § 2201(3)(c).
Each of these exceptions to the statute of frauds applies to certain of Virgin Scent's claims. Other courts applying California law have found that unsigned purchase orders can satisfy the written confirmation exception of section 2201(2). See, e.g., Soil Retention Prod., Inc. v. Brentwood Indus., Inc., ––– F. Supp. 3d ––––, ––––, 2022 WL 254569, at *6 (S.D. Cal. 2022) (denying motion to dismiss where unsigned purchase order prepared by plaintiff could plausibly have been sent to the defendant, and even if it remained unsigned, the defendant could have failed to repudiate the purchase). Here, Day to Day, Virgin Scent, and BT are all merchants. The Purchase Order, which covers part of the alleged April Order, was prepared by BT and sent to Day to Day. There is no suggestion that either side objected to its contents. The Purchase Order thus satisfies the statute of frauds as to those 10 million masks actually included therein. Separately, it is undisputed that Virgin Scent actually shipped, and BT actually received, nearly 15 million masks. The statute of frauds does not bar Virgin Scent's claims as to the masks that were actually shipped and received.
Although the statute of frauds does not bar Virgin Scent's claims as to the portion of the April Order identified in the Purchase Order (which Virgin Scent asserts were never shipped), the Purchase Order does not vitiate the statute of frauds defense for the remainder of the 20 million masks in the alleged oral April Order.18 See Cal. Comm. Code § 2201(1) (“A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in the writing.”) (emphasis added). Virgin Scent suggests that other writings might serve as confirmation of BT's order: either Elefant's May 5, 2020 email stating that BT had placed an order for 50 million masks, or Elefant's July 3, 2020 email stating that BT had placed an order for “20+ million” masks. Construing the evidence in the light most favorable to Virgin Scent, while these statements do appear to confirm the existence of an agreement between BT and Day to Day, they are unclear as to the quantity of masks purchased—an essential term. See, e.g., Elkay Int'l Ltd. v. Color Image Apparel, Inc., CV No. 14-08028-MMM (VBKx), 2015 WL 13917734, at *6 (C.D. Cal. Feb. 4, 2015) (“To be sufficient under the UCC's statute of frauds, the writing must be signed, it must indicate that a contract has been made, and it must specify a quantity term.”) (citing Seaman's Direct Buying Serv., Inc. v. Standard Oil Co., 36 Cal. 3d 752, 764, 206 Cal.Rptr. 354, 686 P.2d 1158 (1984), overruled on other grounds by Freeman & Mills, Inc. v. Belcher Oil Co., 11 Cal. 4th 85, 44 Cal.Rptr.2d 420, 900 P.2d 669 (1995)). Indeed, they contradict each other as to the quantity term. The Court thus concludes that only the purchase order satisfies the written confirmation exception to the statute of frauds.
Nor does the doctrine of equitable estoppel vitiate the statute of frauds defense as to the remainder of the alleged April Order that was never shipped (that is, the 10 million masks that were allegedly ordered orally but not included in the Purchase Order). A defendant may not rely on the statute of frauds to avoid an agreement “where an unconscionable injury would result from denying enforcement after one party has been induced to make a serious change of position in reliance on the contract or where unjust enrichment would result if a party who has received the benefits of the other's performance were allowed to invoke the statute.” Chavez v. Indymac Mortg. Servs., 219 Cal. App. 4th 1052, 1058, 162 Cal.Rptr.3d 382 (2013) (citations omitted). One of the elements of estoppel is that the party seeking enforcement of the agreement must have relied to its detriment on the representations of the other party. Id. Although Virgin Scent alleges in its Complaint that the entire April Order was never shipped and is sitting in Virgin Scent's warehouse, see Compl. ¶ 47, it has not come forward with any evidence to show that Virgin Scent purchased these masks or otherwise acted in reliance on the agreement. Because Virgin Scent has not provided evidence that creates a dispute of fact as to this element of estoppel, the Court need not consider whether the other elements are present.
The Court thus GRANTS in part and DENIES in part Defendants’ MSJ as to the statute of frauds defense. Virgin Scent's claims for the 14,855,650 3-ply masks that were actually shipped, as well as the portion of the April Order covered by the Purchase Order, are not barred by the statute of frauds, but any other claims regarding masks are barred. The Court DENIES as moot Defendants’ MJOP as to Virgin Scent's second cause of action.
c. Masks Actually Shipped
Virgin Scent seeks summary judgment as to the 14,855,650 3-ply masks that were actually shipped and received by BT. It is uncontroverted that these masks were in fact shipped and received. But some emails do indicate that the parties may have renegotiated the price of the masks, most notably Elefant's July 3, 2020 email stating, “Over time we all agreed to lower the price to 40 with the goal of simply getting out of the deal.” The Court thus GRANTS Virgin Scent's MSJ as to the quantity of masks that were shipped, but DENIES Virgin Scent's MSJ as to the price owed. The Court also DENIES Virgin Scent's MSJ as to the 50,000 KN-95 masks it shipped to BT, since no claims regarding KN-95 masks are pled in Virgin Scent's Complaint.
2. Country of Origin
Several grounds for Virgin Scent's MSJ turn on the question of whether BT repudiated its agreement with Virgin Scent to provide hand sanitizer. Both sides of this dispute tell different stories about why Virgin Scent stopped shipping sanitizer to BT. Virgin Scent asserts that, when BT failed to make payments for sanitizer it delivered, Virgin Scent stopped making shipments. BT argues that, when it learned that the sanitizer was not made in the United States, it canceled its order.
Although Virgin Scent argues that the weight of the evidence is in its favor, at summary judgment, “the court does not make credibility determinations or weigh conflicting evidence.” Soremekun, 509 F.3d at 984. Drawing all inferences in favor of BT, the Court concludes that disputed facts remain regarding whether (a) BT actually required that the sanitizer it purchased be made in the United States, (b) BT communicated that requirement to Virgin Scent, and (c) BT repudiated its agreement after it discovered that the sanitizer was not U.S.-made. While the evidence does tend to show that BT continued to receive shipments even after it learned that the sanitizer was made in China, Odzer attests that these shipments were “spot buys.” There is contrary evidence that Odzer specifically declined to repudiate the agreement. But there is no definitive evidence in the record, and apparently no deposition testimony about the issue. The credibility of Odzer's testimony in declarations is a jury question.19 Likewise, there is no definitive evidence as to whether BT actually required U.S.-made sanitizer or whether it communicated that requirement to Virgin Scent at the outset, only conflicting testimony from Elefant and Odzer. Therefore, this too is a jury question. Accordingly, the Court DENIES Virgin Scent's MSJ as to BT's breach of the contract for hand sanitizer, BT's alleged failure to mitigate its damages by rejecting the sanitizer, and Defendants’ counterclaims.
3. Virgin Scent's Contract Claims Against Odzer
Virgin Scent asserts its breach of contract claims against Odzer and BT, but there is no evidence that either Virgin Scent or Day to Day contracted with Odzer. In its Opposition, Virgin Scent does not respond to Defendants’ MSJ as to its breach of contract claims against Odzer. Virgin Scent's failure to respond constitutes a concession of that argument. See, e.g., Ramirez v. Ghilotti Bros. Inc., 941 F. Supp. 2d 1197, 1210 (N.D. Cal. 2013) (deeming failure to oppose an argument as concession of the issue). Defendants’ MSJ is thus GRANTED as to Virgin Scent's breach of contract claims against Odzer.
B. False Promise and Conspiracy
Virgin Scent's false promise and conspiracy claims are both subject to the economic loss rule. The economic loss rule precludes tort claims for purely economic damages that are recoverable under contract. See S.M. Wilson & Co. v. Smith Int'l, Inc., 587 F.2d 1363, 1376 (9th Cir. 1978). “Broadly speaking, the economic loss doctrine is designed to maintain a distinction between damage remedies for breach of contract and for tort. The term ‘economic loss’ refers to damages that are solely monetary, as opposed to damages involving physical harm to person or property. The economic loss doctrine provides that certain economic losses are properly remediable only in contract.” Giles v. Gen. Motors Acceptance Corp., 494 F.3d 865, 873 (9th Cir. 2007); see also UMG Recordings, Inc. v. Glob. Eagle Entm't, Inc., 117 F. Supp. 3d 1092, 1103 (C.D. Cal. 2015) (“The rule generally bars tort claims based on contract breaches, ‘thereby limiting contracting parties to contract damages.’ ”) (quoting United Guar. Mortg. Indem. Co. v. Countrywide Fin. Corp., 660 F. Supp. 2d 1163, 1180 (C.D. Cal. 2009)).
Virgin Scent contends that Odzer and BT never intended to honor their agreements with Virgin Scent and Day to Day, and that all Defendants conspired to injure Virgin Scent in this way. There is no evidence in the record that this was the case. Even if there were, however, Virgin Scent's claim would be barred by the economic loss rule. Virgin Scent “effectively seek[s] to take allegations underpinning a straightforward claim for breach of a commercial contract and recast them as torts, which consist of nothing more than [D]efendants’ alleged failure to make good on its contractual promises.” UMG Recordings, Inc., 117 F. Supp. 3d at 1104-06 (collecting cases and dismissing false promise claim predicated on breach of contract). It is apparent from Virgin Scent's Complaint and its extensive briefing here that it seeks compensation for Defendants’ breach of contract, and nothing more. See, e.g., Compl. ¶¶ 65, 71 (alleging that Defendants’ allegedly tortious conduct caused damages in the amount of Virgin Scent's contract damages). The Court thus GRANTS Defendants’ MSJ as to the false promise and conspiracy claims, and DENIES as moot Defendant's MJOP as to those claims.
In light of the foregoing, the Court GRANTS in part and DENIES in part Defendants’ MSJ, as follows:
• Defendants’ MSJ is DENIED as to assignment of the mask agreements;
• Defendants’ MSJ is DENIED as to its statute of frauds defense, except that Virgin Scent's claims for masks that were not actually shipped or are not covered by the Purchase Order are barred;
• Defendants’ MSJ is GRANTED as to the breach of contract claim against Odzer; and
• Defendants’ MSJ is GRANTED as to the false promise claim against BT and Odzer and the conspiracy claim against BT, Odzer, Lifeguard, Azrak, and Cohen.
The Court GRANTS Virgin Scent's MSJ as to the number of 3-ply masks actually shipped, but otherwise DENIES Virgin Scent's MSJ. The Court DENIES as moot Defendants’ MJOP.
Virgin Scent shall submit its declaration or declarations authenticating the documents attached to its MSJ and Opposition no later than July 22, 2022.
IT IS SO ORDERED.
1. The summary of the facts is undisputed, unless otherwise stated. Facts are drawn from Virgin Scent's Statement of Undisputed Facts (“PSUF”), as set forth with its Reply [Doc. # 118-4], and Defendants’ Statement of Undisputed Facts (“DSUF”), as set forth with their Reply [Doc. # 119-2]. Many of the parties’ purportedly disputed facts are not in fact controverted by the evidence, and the Court therefore cites to them as uncontroverted facts.The Court has reviewed the parties’ evidentiary objections. To the extent the Court does not address any of them, it is because the Court did not rely on the objected-to evidence in reaching its ruling. Any objections to such evidence are OVERRULED as moot.
2. Because several individuals at Virgin Scent share the surname “Nourollah,” the Court will refer to Akiva Nourollah as “Akiva” for clarity. The Court intends no disrespect in doing so.
3. Odzer does not have an ownership interest in BT, and has not for at least six years. DSUF 32. Defendant Azrak is a majority owner of BT and the Chairman of its Board. DSUF 36. Azrak is also Lifeguard's sole owner. DSUF 37. Lifeguard is a licensor of BT, although at least some Lifeguard products state on the packaging that Lifeguard is “a BT Supplies West Company.” DSUF 38.
4. Defendants object that the purchase order is not properly authenticated. The Court addresses this objection at Part III, infra.
5. Virgin Scent submitted only a declaration in support of its MJS asserting that these checks were written. Defendants objected on the grounds that Federal Rule of Evidence 1002 required the submission of the actual checks to prove their contents. Virgin Scent submitted the email and checks with its Reply. See Suppl. Elefant Decl. ¶ 6 [Doc. # 118-13], id., Ex. 3 [Doc. # 118-16]. Defendants’ objection is therefore OVERRULED as moot.
6. Page citations referenced herein are to the page numbers inserted by the CM/ECF system.
7. Defendants assert that the evidence does not support facts 40 and 41, but the Bills of Lading submitted by Virgin Scent show two 70,000-unit deliveries on June 4, 2020, and one 70,000-unit delivery on June 5, 2020. See Suppl. Elefant Decl., Ex. 7 at 27-29. The Court thus deems these facts uncontroverted for purposes of this motion.
8. Defendants purport to dispute this fact, not by submitting rebuttal evidence, but on the basis that the evidence Virgin Scent filed in support (a declaration from Elefant and bills of lading) are inadmissible. Elefant testifies that the masks were shipped from Virgin Scent. See Elefant Decl. ISO MSJ ¶¶ 20-21. Defendants object to this declaration as a “conclusory, self-serving declaration.” The fact that a declaration is conclusory and self-serving is not, in itself, a basis for excluding a declaration submitted in support of a motion for summary judgment. As the Ninth Circuit has observed, “declarations are often self-serving, and this is properly so because the party submitting it would use the declaration to support his or her position.” Nigro v. Sears, Roebuck & Co., 784 F.3d 495, 497 (9th Cir. 2015). Defendants’ evidentiary objection is thus OVERRULED. Bills of lading for the masks show the shipper as “Art.” See [Doc. # 109-9]. Virgin Scent failed to submit an authenticating declaration for this document in support of its MSJ, but cured the deficiency with its Reply. Defendants’ objection on the basis that this document was improperly authenticated is therefore OVERRULED as moot. Because Defendants did not submit rebuttal evidence, and because the Court concludes Virgin Scent's evidence is admissible, the Court deems this fact uncontroverted.
9. Defendants’ evidentiary objections to Virgin Scent's evidence for these facts are OVERRULED for the reasons already stated regarding PSUF 21. Defendants purport to dispute that Day to Day ultimately charged BT $0.65 per mask, pointing to PSUF 106. But that fact, a statement that in summer 2020 companies were still able to sell hand sanitizer, does not contradict Virgin Scent's evidence. The Court thus treats this fact as uncontroverted.
10. Defendants’ objections are OVERRULED for the reasons stated regarding PSUF 22-25. See footnote 9, supra.
11. Defendants object to Akiva's declaration as a “conclusory, self-serving declaration,” and on the grounds that the original is required to prove the contents of a writing. See Fed. R. Evid. 1002. As noted above, that a declaration is self-serving is not, standing alone, a reason to exclude it from consideration at summary judgment. Akiva does not attest that the assignment was in writing, and it is therefore unclear what original is required. Defendants’ objections are thus OVERRULED.
12. In its Complaint, Virgin Scent asserts a conspiracy claim against two additional defendants: Michael Steinhardt and Lori Kaufman. See generally Compl. Virgin Scent was unable, however, to effectuate service of process as to Steinhardt and Kaufman, and dismissed its claims against them without prejudice on May 6, 2022. [Doc. # 83.]
13. Although BT did not seek leave to amend its Answer to assert its Counterclaims, the Court granted BT leave after the fact. [See Doc. # 29.]
14. Virgin Scent submitted Exhibit 7 to its MSJ again in support of its Reply, with a proper authenticating declaration. Virgin Scent need not re-file this document.
15. This information may be relevant to the question of whether Virgin Scent properly mitigated its damages, but neither party has moved for summary judgment on this issue.
16. While there is also a purchase order regarding hand sanitizer in the record before the Court, the Court does not discuss that purchase order herein, and thus references to the “Purchase Order” should be understood to refer to the April 17, 2020 purchase order for 10 million masks.
17. It is the Court's understanding that this 14,855,650 figure includes the 10 million masks from the March Order.
18. At the hearing on this matter, Virgin Scent asserted that it was not seeking summary judgment on its claim for the masks covered by the Purchase Order. It is therefore unclear whether Virgin Scent still wishes to press those claims, and its claims for the remainder of the alleged April Order, at all. Because the Court concludes the statute of frauds bars Virgin Scent's claims as to the portion of the alleged April Order not covered by the Purchase Order, the question of whether Virgin Scent still wishes to press its claims as to those masks is moot.While the record is confusing regarding how many masks and how much hand sanitizer BT ordered, the Court understands the masks covered by the Purchase Order and the masks included in the March Order to constitute two separate 10 million-mask orders.
19. Virgin Scent's counsel argued at the hearing on this motion that, because there is no contemporaneous evidence to show that these shipments were spot buys, and because the documentary evidence appears to show that Odzer did not disclaim the agreement, the Court should disregard Odzer's testimony as a self-serving, post hoc rationalization. It is true that, “where the only evidence presented is uncorroborated and self-serving testimony,” summary judgment may be appropriate even where conflicting testimony appears in the record. Villiarimo v. Aloha Island Air, Inc., 281 F.3d 1054, 1061 (9th Cir. 2002). But here, the objective evidence is itself unclear and contradictory, and the only clear narratives emerge from Elefant's and Odzer's conflicting testimony. The Court thus concludes that disputed issues of fact remain for a jury to decide.
DOLLY M. GEE, UNITED STATES DISTRICT JUDGE
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Docket No: Case No. CV 21-184-DMG (ASx)
Decided: July 15, 2022
Court: United States District Court, C.D. California.
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