Wright v. Old Gringo Inc.
| Decision Date | 13 August 2019 |
| Docket Number | Case No. 17-cv-1996-BAS-MSB |
| Parties | MARSHA WRIGHT, Plaintiff, v. OLD GRINGO INC, et al., Defendants. |
| Court | U.S. District Court — Southern District of California |
ORDER DENYING DEFENDANTS' SECOND MOTION FOR SUMMARY JUDGMENT
As is by now familiar, this case concerns Defendants Yan Ferry and Ernest Tarut's alleged January 2013 promise to grant Plaintiff Marsha Wright ("Wright") a 5% ownership interest (the "Ownership Interest") in Defendants Old Gringo, S.A. de C.V. ("OGS") and Old Gringo, Inc. ("OGI"), companies that respectively make and sell Western-style boots in the United States and Mexico. For a second time, Defendants OGI, Ferry, and Tarut move for summary judgment on Wright's remaining claims in this case following the Court's prior grant of summary judgment for Defendants on Wright's breach of contract claim regarding the Ownership Interest. (ECF Nos. 79, 89.) Defendant OGS has joined the second summary judgment motion following the Court's denial of OGS's motion to dismiss. (ECF No. 119.) Wright opposes summary judgment on her remaining claims. (ECF No. 88.) For the reasons herein, the Court denies Defendants' second motion for summary judgment.
Wright is a Texas-based professional designer of Western apparel, including boots and handbags. Defendants Ferry and Tarut are the majority owners of Defendants OGI and OGS (together, the "OG Entities"). (ECF No. 89-1 Unchanged Joint Statement of Undisputed Material Facts ("JSUF") ¶ 1; Wright Decl. ¶ 10.) Wright designed boots for Defendants from 2005 until her October 2015 resignation, occupying the role of "head designer" starting in 2008. (JSUF ¶ 2; Wright Decl. ¶¶ 4-6.) She was paid as an independent contractor. (JSUF ¶ 43; Wright Decl. ¶¶ 7, 9.)
In January 2013, Wright, Ferry and Tarut met in Leon, Mexico, where OGS is located. (JSUF ¶ 3; Wright Decl. ¶ 10.) It is undisputed that during this meeting, Ferry and Tarut "raised [Wright's] compensation, to a figure that Defendants paid [her] for the remainder of the time that [she] was with Old Gringo" in an oral contract. (JSUF ¶ 4; Wright Decl. ¶ 10.) Wright would and "immediately" did receive a $180,000 salary in exchange for her services to Defendants. (JSUF ¶¶ 4, 7; ECF No. 50-12 Steve Greenberg Decl. ("Greenberg Decl.") ¶ 12; see also Wright Dep. at 128:09-20.) During the same January 2013 meeting, Tarut and Ferry allegedly also promised Wright that they would grant her a 5% Ownership Interest in the OG Entities in recognition for her hard work. (JSUF ¶¶ 5, 13, 20-21; Wright Decl. ¶ 10.) Ferry and Tarut told Wright they could not put the Ownership Interest in writing because doing so would jeopardize Ferry's efforts to become a U.S. citizen. (Wright Decl. ¶ 12.) After the January 2013 meeting, the Ownership Interest"only rarely came up in discussions" with Ferry and Tarut "and only in the sense that [they] repeatedly promised to get it to [her] in writing at some date in the future when they could." (Wright Decl. ¶ 44.) Tarut told Wright "on many occasions" in 2014 and 2015 "things to remind [her] that [she] was now an owner or a 'partner' in the Old Gringo companies, and needed to work extra hard[.]" (Id. ¶¶ 46-47.)
On October 4, 2015, Wright resigned from the OG Entities after she unsuccessfully attempted to negotiate with Ferry and Tarut during August and September 2015 to increase her compensation and receive additional money to employ her son. (JSUF ¶ 41; Wright Decl. ¶¶ 42-43.) Wright "still thought [she] was a part owner of the Old Gringo companies" when she resigned. (Wright Decl. ¶¶ 45, 48; Wright Dep. at 188:13-189:21.) "Only after [she] resigned" did Wright "begin to suspect that there might be a problem with the Ownership Interest[.]" (Wright Decl. ¶ 49; Wright Dep. at 190:16-19.) At no point has Wright received the alleged Ownership Interest.
Defendants OGI, Ferry, and Tarut previously moved for summary judgment on Wright's claims in October 2018. (ECF No. 38.) During the pendency of that motion, OGS moved to dismiss the Complaint for lack of personal jurisdiction and for forum non conveniens. (ECF No. 61.) The Court subsequently granted in part and denied in part Defendants OGI, Ferry, and Tarut's first motion for summary judgment in December 2018. (ECF No. 62.) The Court granted summary judgment for Defendants on Wright's breach of contract claim, but otherwise denied summary judgment on Wright's claims for promissory estoppel, unjust enrichment, specific performance, fraud and fraudulent representation, promissory fraud, concealment and negligent misrepresentation. (Id.) A week later, these Defendants moved for reconsideration of the denial of summary judgment on Wright's remaining claims,(ECF No. 63), a motion which the Court promptly denied, (ECF No. 67). Nearly a month after the denial of their motion for reconsideration, Defendants OGI, Ferry, and Tarut filed the present second motion for summary judgment on Wright's remaining claims on January 25, 2019. (ECF No. 79.) After the Court denied its motion to dismiss on June 11, 2019 (ECF No. 115), OGS answered the Complaint and filed a notice of joinder in the second motion for summary judgment, (ECF Nos. 116, 119). The Court turns to the merits of Defendants' second motion for summary judgment.
Pursuant to Federal Rule of Civil Procedure 56, summary judgment is proper on "each claim" "or the part of each claim" on which summary judgment is sought when "there is no genuine dispute as to any material fact, and the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The movant has the initial burden of demonstrating the absence of a genuine factual dispute, which it may satisfy by either affirmatively negating the nonmovant's claim, or by demonstrating that the nonmovant is unable to prove an essential element of that claim. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Jones v. Williams, 791 F.3d 1023, 1030 (9th Cir. 2015). To meet this burden, the movant cites to depositions, affidavits or declarations, interrogatory answers, or other materials in the record. Fed. R. Civ. P. 56(c)(1). Only if the movant meets its initial burden must the nonmovant go beyond its pleadings and, by its own evidence or by citing appropriate materials in the record, show by sufficient evidence that there is a genuine dispute for trial. Celotex, 477 U.S. at 324. The nonmovant Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (internal quotations omitted).
According to Defendants, summary judgment must be granted on Plaintiff's remaining promissory estoppel, unjust enrichment, and specific performance claims because Wright's continued provision of services to the OG Entities was already the subject of a separate oral agreement amongst the parties. (ECF No. 79-1 at 1, 2-9.) Defendants contend that summary judgment is warranted on Wright's fraud-based claims because Wright "cannot produce evidence" to support these claims. (Id. at 10-11.) According to Defendants, the existence of the oral agreement for Wright's continued provision of services also prevents Wright from establishing "detrimental reliance" for her fraud claims regarding Defendants' alleged promise of the Ownership Interest and thus these claims fail as a matter of law. (Id.) Defendants' arguments are not new, nor do Defendants present any new evidence to the Court compared to their first motion for summary judgment. Once more, the Court concludes that Defendants have not shown that summary judgment is warranted on Plaintiff's remaining claims.3
Wright raises a claim for promissory estoppel against all Defendants. (Compl. ¶¶ 109-12.) Under the doctrine of promissory estoppel, a "promise which the promisor should reasonably expect to induce action or forebearance on the part of the promisee or a third person and which does induce such action or forbearance isbinding if injustice can be avoided only by enforcement of the promise." Kajima/Ray Wilson v. Los Angeles Cty. Metro. Transp. Auth., 1 P.3d 63, 66 (Cal. 2000). The elements of promissory estoppel are: (1) a clear and unambiguous promise, (2) reliance by the party to whom the promise is made, (3) the reliance is both reasonable and foreseeable, and (4) the party asserting estoppel is injured by his reliance. U.S. Ecology Inc. v. State of California, 28 Cal. Rptr. 3d 894, 905 (Cal. Ct. App. 2005). As the Court has previously explained, (ECF No. 62 at 14), (ECF No. 62 at 14 (quoting Fleet v. Bank of Am., N.A., 178 Cal. Rptr. 3d 18, 26-27 (Cal. Ct. App. 2014)).)
Defendants seek summary judgment on the ground that Wright cannot establish reliance. According to Defendants, Wright's "continued work for Old Gringo" is the bargained-for subject of an existing valid oral agreement, which means that Wright's performance under that agreement "cannot also be claimed to be the 'detrimental reliance' required for a cause of action of promissory estoppel." (ECF No. 79-1 at 5.) Defendants' argument relies heavily on Walker v. KFC Corp., 728 F.2d 1215 (9th Cir. 1984), a case in which the Ninth Circuit overturned a jury verdict in favor of certain plaintiffs' promissory estoppel claim when the jury had also determined that the defendant did not breach its franchising or written option agreements with the plaintiffs. The Court briefly describes Walker and then explains why Walker does not...
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