Bondi v. Jewels by Edwar, Limited

• Decision Date: 26 November 1968
• Citation: 267 Cal.App.2d 672,73 Cal.Rptr. 494
• Court: California Court of Appeals Court of Appeals
• Parties: Erwin BONDI, Plaintiff and Appellant, v. JEWELS BY EDWAR, LTD., a California corporation, Edward Kalpakian and Lucy Kalpakian, Defendants and Respondents. Civ. 32231.

Page 494

73 Cal.Rptr. 494

267 Cal.App.2d 672

Erwin BONDI, Plaintiff and Appellant, v. JEWELS BY EDWAR, LTD., a California corporation, Edward Kalpakian and Lucy Kalpakian, Defendants and Respondents.

Civ. 32231.

Court of Appeal, Second District, Division 3, California.

Nov. 26, 1968.

Lippitt & Billet, van Nuys, and Alan G. Buckner, Los Angeles, for plaintiff and appellant.

Preliminary Statement

FRAMPTON, Associate Justice Pro Tem. ^*

Plaintiff filed his complaint herein on January 13, 1967. The name defendants, on January 26, 1967, filed a general and special demurrer to each cause of action of the complaint and a motion to strike. Upon hearing, the court sustained the general demurrer as to each of the three causes of action set forth in the complaint, with 10 days leave to amend. The special demurrers and motion to strike were placed off calendar. On March 20, 1967, plaintiff having failed to amend his complaint, defendants moved for an order dismissing the action pursuant to subdivision 3 of section 581 of the Code of Civil Procedure. The motion was granted and the written order of dismissal was signed and filed the same day. The appeal is from the judgment (order dismissing the action).

Plaintiff's complaint sets forth three causes of action. The facts set forth in the first cause of action are in substance as follows: Defendant, Jewels by Edwar, Ltd., hereinafter Jewels, is a California corporation; defendants, Edward Kalpakian, hereinafter Edward, and Lucy Kalpakian, hereinafter Lucy, were officers and directors of Jewels and acted as agents of the corporation within the scope of the agency; Edward and Lcuy dominated and controlled Jewels and its officers, as well as its business affairs and property; unity of interest and ownership exists between Edward, Lucy and Jewels; the individuality and separateness of said individuals and the corporation has ceased, and the corporation is a mere shell which said individuals have used and now use as a conduit of their personal business; Jewels was created and is being continued pursuant to a fraudulent plan conceived by Edward and Lucy whereby the income of the corporation is diverted to them; adherence to the fiction of the corporate entity would sanction a fraud against plaintiff. In October 1965, Edward asked plaintiff to close the latter's jewelsmith business and become a manager and jewelsmith for Jewels; after repeated requests and on or about January 3, 1966, plaintiff and defendant Edward, acting on behalf of his codefendants, entered into an oral agreement of employment under which defendants agreed to employ and to continue to employ plaintiff for so long as plaintiff should satisfactorily perform as manager of and jewelsmith for Jewels, and under which plaintiff agreed to close his manufacturing jewelsmith business upon entering the employ of defendants.

The complaint, in the first cause of action, alleged further, in substance, that under the terms of the agreement plaintiff was to receive $250 per week plus two percent of the yearly gross income of Jewels; that on or about January 10, 1966, pursuant to the oral agreement, plaintiff closed his manufacturing jewelsmith business and entered the employ of Jewels; thereafter plaintiff duly performed all of the conditions and obligations of the oral agreement on his part to be performed; he has at all times been and he is now ready and willing to perform the contract and has offered to perform the same; on about February 1, 1966, defendants and each of them refused, and have since refused to allow plaintiff to perform his duties under the contract and have refused to pay plaintiff thereunder; but for the unlawful termination of plaintiff's employment by defendants, he could have and would have continued satisfactorily to perform his duties for a period of five years. Damages were claimed as a result of the wrongful breach of the oral agreement.

The second cause of action incorporates the first 14 paragraphs of the first cause of action, and alleges in substance that in October 1965, the defendants knew that plaintiff was engaged in business in the City of Beverly Hills as a manufacturing jewelsmith; on about January 3, 1966, Edward, acting on behalf of his codefendants, promised plaintiff that if he would close his business and enter the employ of Jewels, the defendants would employ and continue to employ plaintiff so long as he should satisfactorily perform the duties of manager of and jewelsmith for Jewels; at the time said promise and made the defendants did not intent to perform it; such promise was made by defendants with the intent on their part to induce plaintiff to close his business and thereby remove him as a competitor of defendants and to induce plaintiff to enter into and remain in their employ until such time as they should, at their will, elect to terminate such employment; plaintiff was ignorant of the defendants' intention not to perform their promise, and could not, by the exercise of reasonable diligence, have discovered their secret intent; in reliance on said promise, plaintiff was induced to, and did close his business and enter the employ of defendants; had plaintiff known the true facts, he would not have so acted; defendants failed to abide by their promise and on or about February 1, 1966, terminated plaintiff, and have refused to allow plaintiff to perform his duties and have refused to pay him under the agreement; plaintiff satisfactorily performed his duties under the contract of employment; but for the unlawful termination, plaintiff could have and would have continued to satisfactorily perform his duties under the contract; subsequent to February 1, 1966, plaintiff learned that the acts of the defendants hereinabove alleged were part of a fraudulent scheme devised by them and utilized on several occasions for the purpose of eliminating other jewelsmith businesses operating in competition with the corporate defendant. Actual damages, damages under section 972 of the Labor Code, and punitive damages were sought.

The third cause of action incorporates certain allegations of the first cause of action and paragraph 34 of the second cause of action, which relates to the alleged fraudulent scheme on the part of defendants used on several occasions to eliminate jewelsmith businesses operating in competition with the corporate defendant, and alleges that from September 1965 to January 1966, the defendants entered into a conspiracy to prevent the competition of plaintiff's jewelsmith business with that of the corporate defendant; the purpose of the conspiracy was to eliminate plaintiff as a competitor of the corporate defendant in the manufacture and sale of fine jewelry; plaintiff was eliminated as a competitor on or about January 10, 1966, when...