Portman v. New Line Cinema CA2/2 ( 2013 )

Filed 3/6/13 Portman v. New Line Cinema CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
NEIL PORTMAN et al., B233669
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. BC417739)
v.
NEW LINE CINEMA CORPORATION,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of Los Angeles County. Richard
E. Rico, Judge. Affirmed.
Neil Portman, in pro. per.; Law Offices of Ronald M. Lebow and Ronald M.
Lebow for Plaintiffs and Appellants.
Kelley Drye & Warren, Michael J. O’Connor, Edward E. Weiman, and Hajir
Ardebili for Defendant and Respondent.
Neil Portman, an individual, and Portman & Company (collectively “Portman”)
appeal from a final judgment entered in favor of New Line Cinema Corporation
(New Line) after the trial court sustained, without leave to amend, New Line’s demurrer
to Portman’s second amended complaint. We affirm the judgment.
BACKGROUND
1. The original complaint
The original complaint (OC) in this action was filed on July 13, 2009, and alleged
causes of action against New Line for breach of contract, misappropriation of trade
secrets, fraud and deceit, fraudulent concealment, unjust enrichment, and breach of the
implied covenant of good faith and fair dealing.
Portman alleged that he is a “developer of multi-media content through his
development company, Portman & Company.” He further alleged that in or about June
2002, he was introduced to officers of New Line through “an intermediary, Peter
Kirshenbaum.”1 On June 3, 2002, Portman entered a signed written agreement with
Kirshenbaum “related to the exploitation of Portman’s motion picture project on party
crashing.” The agreement between Portman and Kirshenbaum detailed the terms under
which Kirshenbaum would introduce Portman to senior management at New Line. The
Portman-Kirshenbaum agreement was faxed to New Line, and individuals at New Line
initialed the contract and returned it to Portman via fax.
Portman alleged that he disclosed to New Line that he was in “active
conversations with United Talent Agency [(UTA)] regarding the development of
[Portman’s] party crashing comedy project.”
On or around July 3, 2002, Portman personally delivered to New Line a copy of
Portman’s party crashing submission package which consisted of: (1) a detailed
submission letter; (2) a book entitled “The Party Crasher’s Handbook”; and (3) a copy of
the business arrangement Portman signed with the author of the Party Crasher’s
1 Kirshenbaum’s name was spelled differently in the second amended complaint as
“Kershenbaum.”
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Handbook, which granted Portman exclusive rights to develop a feature motion picture
comedy based on the book and to present the project to studios. In the text of Portman’s
submission letter, Portman again disclosed that he was engaged in active dialogue with
UTA regarding leading comedic talent for his project.
On or around July 10, 2002, New Line sent a letter to Portman in response to the
July 3, 2002 party crashing submission letter. New Line acknowledged Portman’s
submission but stated that a comedy about party crashing was not something that New
Line could get involved with at the time. Portman faxed to UTA a copy of his
submission to New Line and the response letter that he received from New Line.
Portman alleged that Portman, New Line, and UTA subsequently engaged in an
“ongoing and protracted dialogue” related to “talent attachments and the production of
[Portman’s] party crashing comedy motion picture.” After six months of such
discussions, Portman was informed by UTA that Portman’s original choice of leading
comedic actors opted not to participate in the project. Subsequent to this event, Portman
alleged, New Line and UTA simultaneously stopped taking Portman’s telephone calls
and refused Portman access to relevant information regarding Portman’s party crashing
motion picture.
On or about July 15, 2005, New Line released a feature motion picture comedy
entitled “Wedding Crashers,” with an entire talent package provided by UTA. Portman
alleged that the primary story line in the motion picture comedy was about party
crashing.
Portman also discovered that on or about July 15, 2005, New Line made false and
misleading statements in a declaration filed in superior court denying the allegations
described above.
Portman alleged, on information and belief, that as of January 1, 2006, the motion
picture Wedding Crashers grossed $210 million in the domestic United States
marketplace; $78 million in the foreign marketplace; and a projected $235 million in
DVD revenue. Portman alleged that he did not receive any compensation for presenting
the party crashing project, along with UTA leading comedic talent, to New Line.
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On October 16, 2009, New Line demurred to all six causes of action. New Line
argued that the causes of action were barred by the doctrines of res judicata and collateral
estoppel; that they were barred by the applicable statutes of limitation; and that they
failed to state causes of action. In its memorandum of points and authorities, New Line
pointed out that Rex Reginald (Reginald), whom New Line described as Portman’s
“producing partner,” brought claims against New Line in August 2004 alleging that
Wedding Crashers was based on a concept conceived by Reginald and pitched to New
Line through Portman. Reginald’s lawsuit (the Reginald action) was dismissed on the
ground that Wedding Crashers was not substantially similar to Reginald’s concept. New
Line sought judicial notice of the complaint in the Reginald action, along with deposition
excerpts taken from a deposition of Portman in that action, and filings related to New
Line’s successful summary judgment motion.
On February 8, 2010, the trial court sustained New Line’s demurrer with 30 days
to amend as to all causes of action on the ground that they appeared time-barred as a
matter of law, and Portman’s delayed discovery allegations were inadequate. The
demurrer to the first cause of action for breach of contract, and the sixth cause of action
for breach of the covenant of good faith and fair dealing, were also sustained on the
ground that it could not be ascertained whether the alleged contract was written, oral or
implied and that the material terms of the contract were not pled. Finally, the demurrer to
the second cause of action for misappropriation of trade secrets was also sustained on the
ground that Portman failed to allege facts showing a protectable trade secret.
In ruling on the demurrer, the court took judicial notice of the court’s order in the
Reginald action granting summary judgment, the appellate opinion affirming the order,
and the existence and nature of the operative pleading. The court declined to take judicial
notice of the other documents submitted by New Line.
2. The first amended complaint
Portman’s first amended complaint (FAC) was filed on March 10, 2010. The FAC
contained five causes of action for breach of written contract, misappropriation of trade
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secrets, fraud and deceit, unjust enrichment, and breach of implied covenant of good faith
and fair dealing.
On April 14, 2010, New Line filed a demurrer to the FAC. On the same date,
New Line filed a request for judicial notice, asking that the court take judicial notice of:
(1) the complaint filed in the Reginald action; (2) the first amended complaint filed in the
Reginald action; (3) the fact that Portman was deposed twice in the Reginald action; and
(4) the fact that Portman submitted two declarations in the Reginald action.
On November 10, 2010, the trial court sustained New Line’s demurrer to the first,
second, third and fifth causes of action on the ground that the claims appeared time-
barred as a matter of law, and Portman’s attempted delayed discovery allegations were
inadequate. The court stated, “[Portman] fails to allege facts supporting his claim that
[New Line] concealed [its] actions making it impossible for him to discover his claims
until after the July 15, 2005 release of the film at issue.” New Line’s demurrer to the
fourth cause of action for unjust enrichment was also sustained on the ground that unjust
enrichment is a remedy, and not a cause of action. Portman was given 30 days leave to
amend as to the first, second, third and fifth causes of action.
New Line’s request for judicial notice was denied.
3. The second amended complaint
Portman filed a second amended complaint (SAC) on December 10, 2010. It
contained four causes of action for breach of written contract, misappropriation of trade
secrets, fraud and deceit, and breach of implied covenant of good faith and fair dealing.
On January 14, 2011, New Line again demurred to all causes of action. New Line
also filed a request for judicial notice, asking the court to take judicial notice of: (1) the
complaint in the Reginald action; (2) the first amended complaint in the Reginald action;
and (3) the fact that Portman was deposed twice in the Reginald action, once on May 10,
2005, and once on May 25, 2005. In its memorandum supporting the request, New Line
emphasized that it was not asking the court to take judicial notice of the truth of the
documents, or the accuracy of Portman’s testimony, but simply to take judicial notice of
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the existence of the documents and the fact that Portman was deposed twice in the
Reginald action.
New Line’s demurrer was heard on April 13, 2011, and was sustained in full
without leave to amend. The court granted New Line’s request for judicial notice. The
court explained that “[o]n August 2, 2004, [Portman’s] business partner [Reginald] filed
suit against [New Line] and other[s] alleging that the Film [Wedding Crashers] was based
on his ideas.” The court noted that Portman was deposed twice in that action, and that
the current action was filed more than four years after the Reginald action was filed. The
court found that these events put Portman on notice of information or circumstances to
put a reasonable person on inquiry of the potential claim.
The court further held that in order to rely on the discovery rule, Portman would
have had to allege facts showing “‘(1) the time and manner of discovery and (2) the
inability to have made earlier discovery despite reasonable diligence.’ [Citation.]”
(Citing Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 808.) The court noted
that despite three chances, Portman still failed to allege facts supporting his position that
he did not discover his claims until after the July 15, 2005 release of the film.
4. Final judgment and appeal
On April 20, 2011, a final judgment was filed, dismissing the SAC with prejudice.
As the prevailing party, New Line was awarded costs in the amount of $1,665.99.
On June 10, 2011, Portman filed his notice of appeal from the judgment.
DISCUSSION
I. Standard of review
“On appeal from a judgment dismissing an action after sustaining a demurrer
without leave to amend, the standard of review is well settled. The reviewing court gives
the complaint a reasonable interpretation, and treats the demurrer as admitting all
material facts properly pleaded. [Citations.] The court does not, however, assume the
truth of contentions, deductions or conclusions of law. [Citation.] The judgment must be
affirmed ‘if any one of the several grounds of demurrer is well taken. [Citations.]’
[Citation.] However, it is error for a trial court to sustain a demurrer when the plaintiff
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has stated a cause of action under any possible legal theory. [Citation.] And it is an
abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows
there is a reasonable possibility any defect identified by the defendant can be cured by
amendment. [Citation.]” (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-
967.) The legal sufficiency of the complaint is reviewed de novo. (Montclair
Parkowners Assn. v. City of Montclair (1999) 76 Cal.App.4th 784, 790.)
Bearing these standards in mind, we review the causes of action in Portman’s
SAC.
II. The applicable statutes of limitation bar Portman’s claims
A plaintiff must bring a cause of action within the limitations period. (Code Civ.
Proc., § 312.) The limitations period begins to run once the plaintiff has notice of
information or circumstances to put a reasonable person on inquiry notice of the potential
claim. (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1110.) When a complaint
discloses that the statute of limitations has run on the claims at issue, the defect may be
exposed by way of demurrer. (Guardian North Bay, Inc. v. Superior Court (2001) 94
Cal.App.4th 963, 971-972.)
Because the trial court sustained New Line’s demurrer to all four causes of action
on the grounds that they were barred by the applicable statutes of limitation, we begin by
discussing those statutes and the facts related to Portman’s discovery of his claims. As
set forth below, we conclude that the trial court properly sustained the demurrer to each
cause of action on the ground that it is barred under the applicable statute of limitations.
A. Breach of contract
1. Applicable law
To state a cause of action for breach of contract, “a party must plead the existence
of a contract, his or her performance of the contract or excuse for nonperformance, the
defendant’s breach and resulting damage. [Citation.]” (Harris v. Rudin, Richman &
Appel (1999) 74 Cal.App.4th 299, 307.) Where an action is based on an alleged breach
of a written contract, “the terms must be set out verbatim in the body of the complaint or
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a copy of the written agreement must be attached and incorporated by reference.
[Citation.]” (Ibid.)
2. Applicable statute of limitations
The statute of limitations for breach of a written contract is four years under Code
of Civil Procedure section 337. Generally, a cause of action for breach of contract
accrues at the time of the breach. (Cochran v. Cochran (1997) 56 Cal.App.4th 1115,
1120.) However, application of the delayed discovery rule may be appropriate in cases
where the breach is committed in secret. (William L. Lyon & Associates, Inc. v. Superior
Court (2012) 204 Cal.App.4th 1294, 1310.)
The statute of limitations for breach of a contract that is not based on a written
agreement is two years, whether the agreement is oral or implied in fact. (Code Civ.
Proc., § 339.) A claim for breach of oral contract is also subject to the delayed discovery
rule. It accrues when “the aggrieved party discovers, or should discover, the existence of
the cause of action.” (Seelenfreund v. Terminix of Northern Cal., Inc. (1978) 84
Cal.App.3d 133, 136.)
Portman has captioned his breach of contract cause of action as a claim for breach
of written contract. However, New Line argues that the allegations of the SAC do not
support Portman’s claim that a written contract between Portman and New Line ever
existed. In order to determine the applicable statute of limitations, we must first examine
the allegations of the SAC and determine whether they support a claim for breach of
written contract, as Portman insists -- or only a claim for breach of oral or implied
contract, as New Line insists.
3. Allegations regarding the formation and the terms of the contract
The allegations of the SAC establish the following: Portman signed an agreement
with Kirshenbaum “[t]hat Portman enter into an agreement with New Line ‘solely related
to a proposed feature motion picture production on “party crashers” in which New Line
or its affiliated production entities agree to develop.’” New Line “reviewed and signed”
the agreement between Kirshenbaum and Portman, as well as an amendment to that
agreement “related to future productions of [Portman] to be submitted to New Line at its
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invitation”;2 on July 3, 2002, Portman delivered his party crashing presentation to New
Line; at all times mentioned, Portman was operating in the “material capacity” of
exclusive developer and co-executive producer of the party crashing project to be
financed and released by New Line; on July 10, 2002, in response to Portman’s
submission, New Line sent Portman a written reply which specified that “at this time a
comedy about party crashing is not something that New Line can get involved with,” but
setting forth conditions for moving forward, such as attachment of talent;3 and that
thereafter, Portman and New Line engaged in “written development, casting, production
correspondence and telephonic dialogue for a period of five (5) months revolving around
[Portman’s] party crashing project with Jim Carrey, [Portman’s] original choice of
leading UTA comedic talent to star in [Portman’s] party crashing project to be financed
and released by New Line.”
Based on these factual allegations, Portman contends that New Line “fully
accepted [Portman’s] party crashing project with the understanding as defined in the June
3, 2002 contract, the terms of the July 3, 2002 submission letter, and the terms of [New
Line’s] July 10, 2002 reply letter, that if [New Line] produced a motion picture comedy
about party crashing, part and parcel with UTA leading comedic talent, [Portman] would
2 In the OC, Portman alleged that New Line “initialed” the Portman–Kirshenbaum
contract, not that New Line “signed” that contract. In analyzing the sufficiency of the
SAC, we may consider the differences between the two pleadings. “A plaintiff may not
avoid demurrer by pleading facts or positions in an amended complaint that contradict the
facts pleaded in the original complaint or by suppressing facts which prove the pleaded
facts false. [Citation.]” (Cantu v. Resolution Trust Corp. (1992) 4 Cal.App.4th 857,
877.)
3 In the OC, Portman alleged that in its July 10, 2002 response to his submission
New Line “established written criteria that if talent were attached to plaintiffs[’] party
crashing comedy project, [New Line] would reconsider participating with plaintiffs in
plaintiffs[’] party crashing comedy project.” Again, although Portman has phrased this
alleged term of the reply letter differently in the SAC, we may consider the language used
in the earlier pleading. (See Cantu v. Resolution Trust Corp., supra, 4 Cal.App.4th at p.
877.)
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participate in the production and receive compensation afforded an exclusive developer
and co-executive producer.”
Portman’s contention that New Line agreed in writing that Portman would
participate in, or receive compensation for, any motion picture comedy about party
crashing that New Line might produce, is not supported by the factual allegations of the
SAC. At best, Portman alleges that there was a written agreement related to his proposal,
which New Line formally turned down on July 10, 2002. While Portman alleges that the
parties then engaged in further correspondence and dialogue over the next five months,
there is no allegation of any further written contractual agreement arising out of those
communications. Significantly, there is no allegation that New Line ever agreed in
writing that it would take on Portman’s project or compensate Portman for anything. In
fact, Portman has failed to set out verbatim any terms of a written agreement between
Portman and New Line or specify any written obligations on the part of New Line. Nor
has Portman attached to the SAC a copy of any written agreement between Portman and
New Line. In sum, we find that Portman has failed to allege the existence of a written
contract between Portman and New Line. (See Harris v. Rudin, Richman & Appel,
supra, 74 Cal.App.4th at p. 307; Otworth v. Southern Pac. Transportation Co. (1985) 166
Cal.App.3d 452, 459.)
Portman’s cause of action for breach of written contract fails because the SAC
does not allege any obligations on New Line’s part that are based on a written contract
between Portman and New Line. At best, Portman has alleged breach of an oral or
implied-in-fact contract that Portman would participate in, and be compensated for, any
motion picture film related to his party crashing proposal. Thus, the applicable statute of
limitations for Portman’s breach of contract claim is the two-year statute of limitations
found in Code of Civil Procedure section 339.
4. Allegations regarding breach of oral or implied contract
As to the breach of the alleged contract between Portman and New Line, Portman
alleges that “after five months of written correspondence and oral dialogue between
[Portman], [New Line] and UTA related to [Portman’s] party crashing project . . . , [New
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Line] and UTA simultaneously stopped taking Portman’s telephone calls and refused
Portman access to all relevant information regarding plaintiffs’ party crashing project.”
Portman further alleged that New Line “breached the written contract between
[Portman] and [New Line] by releasing a feature comedic motion picture about party
crashers now entitled ‘Wedding Crashers’ produced part and parcel with leading UTA
comedic talent without compensation to [Portman].”
Thus, the actual breach of the alleged agreement occurred sometime in December
2002, when Portman was excluded from the project, and culminated in the release of
Wedding Crashers in July 2005.
5. Delayed discovery allegations and facts subject to judicial notice
However, Portman alleges that he did not discover New Line’s “secret
combination designed to appropriate [Portman’s] party crashing project” until after the
release of the film Wedding Crashers on July 15, 2005. In order to rebut the presumption
that his cause of action accrued at the time of breach, Portman “must plead facts
sufficient to convince a trial judge that delayed discovery was justified.” (William L.
Lyon & Associates, Inc. v. Superior Court, supra, 204 Cal.App.4th at p. 1310.)
In an attempt to satisfy this requirement, Portman alleges that New Line “set in
motion a canard against [him], defined herein as a well-timed and coordinated
entertainment industry tactic used against individuals or companies with competing
business interests in order to gain an unfair advantage.” Portman alleged that this
“canard” “was designed and lodged by New Line to conceal from [Portman] the full
extent of [New Line’s] misappropriation of [Portman’s] party crashing project.” Portman
alleged that New Line’s “blockage of information made it extremely difficult to a point of
being ‘impossible’ for [Portman] to commence discovery of relevant information
necessary to define the full extent of New line’s misappropriation of the party crashing
project and its concealment related to the procurement and acceptance of the leading
UTA comedic talent until after the July 15, 2005 release of ‘Wedding Crashers.’”
In mid-2006, Portman further alleges that in his “continued” effort to discover all
the facts about the Reginald action, he researched the file of the Reginald action at the
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Santa Monica courthouse. Portman states that at that time he discovered a “false and
misleading declaration” signed by Magnus Kim (Kim), a creative executive at New Line.
In the allegedly false declaration, Kim acknowledged receipt of the “Party Crashers
Handbook” in July 2002, but claimed that he only “skimmed” the work and determined
that it did not merit further review by anyone at New Line. Kim also declared that he
never discussed Portman’s party crashing project with anyone at New Line.
Other facts related to Portman’s claim of delayed discovery were provided by New
Line in its request for judicial notice. The request for judicial notice filed with New
Line’s demurrer to the SAC sought judicial notice of the complaint in the Reginald
action, filed on August 2, 2004, the first amended complaint in the Reginald action, filed
on December 27, 2004, and the fact that Portman was deposed in that action twice, on
May 10, 2005, and again on May 25, 2005. New Line’s request for judicial notice was
granted. The existence of Reginald’s lawsuit against New Line, and the fact that Portman
was twice deposed in that action, suggest that Portman should have become aware of the
existence of his claims no later than May 10, 2005.
6. Application of statute of limitations
Portman’s original complaint in this action was filed on July 13, 2009. The
allegations of the complaint, and the facts judicially noticed, reveal that Portman should
have discovered his cause of action for breach of contract in May 2005, when he was
deposed in the Reginald action, or at the latest, in mid-July 2005, when Wedding
Crashers was released to the general public. However, even assuming that Portman
discovered his claim as late as “mid-2006,” when he was delving into the file in the
Reginald action, it is still barred under the two-year statute of limitations for breach of
oral or implied contract.4
4 The allegations of the SAC undermine the suggestion that Portman did not
discover his claims against New Line until “mid-2006.” Specifically, Portman alleges
that in mid-2006 he “continued his effort to discover all the facts” by researching the file
in the Reginald action at the Santa Monica courthouse. (Italics added.) By this
allegation, Portman essentially admits that he realized earlier than mid-2006 that he
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Thus, Portman’s first cause of action for breach of contract fails as a matter of law,
and the demurrer to this cause of action was properly sustained.
B. Misappropriation of Trade Secrets
1. Applicable law
Misappropriation of trade secrets is an intentional tort. “A trade secret is
misappropriated if a person (1) acquires a trade secret knowing or having reason to know
that the trade secret has been acquired by ‘improper means,’ (2) discloses or uses a trade
secret the person has acquired by ‘improper means’ or in violation of a nondisclosure
obligation, (3) discloses or uses a trade secret the person knew or should have known was
derived from another who had acquired it by improper means or who had a nondisclosure
obligation or (4) discloses or uses a trade secret after learning that it is a trade secret but
before a material change of position. [Citation.]” (Ajaxo v. E*Trade Group, Inc. (2005)
135 Cal.App.4th 21, 66.)
2. Applicable statute of limitations
The statute of limitations on a claim of misappropriation of trade secrets, set forth
in Civil Code section 3426.6, is three years. The statute provides that “[a]n action for
misappropriation must be brought within three years after the misappropriation is
discovered or by the exercise of reasonable diligence should have been discovered.”
3. Facts alleged and subject to judicial notice
Portman claims that his “motion picture comedy project on party crashing
produced part and parcel with UTA leading comedic talent were valuable proprietary
assets of [Portman] and a legally cognizable trade secret.” He alleges that New Line
“circumvented [his] exclusive ownership and financial interests in the property and
engaged in secret dealings with UTA related to the procurement of UTA leading comedic
talent by replacing Jim Carrey with UTA leading comedic talent Vince Vaughn and
Owen Wilson,” and later accepted “Rachel McAdams and director David Dobkin as part
of this secretly acquired UTA talent package.”
might have a claim against New Line -- and that his suspicions prompted his visit to the
Santa Monica courthouse.
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Portman alleged that New Line’s “blockage of information made it extremely
difficult to a point of being ‘impossible’ for [Portman] to commence discovery of
relevant information necessary to define the full extent of New line’s misappropriation of
the party crashing project and its concealment related to the procurement and acceptance
of the leading UTA comedic talent until after the July 15, 2005 release of ‘Wedding
Crashers.’”
4. Application of statute of limitations
The release date of Wedding Crashers was July 15, 2005. At that time, the theme
and casting of the movie was generally known to the public. On that date, Portman knew
or, with the exercise of reasonable diligence, should have discovered his claims for
misappropriation of trade secrets. (See, e.g., Shively v. Bozanich (2003) 31 Cal.4th 1230,
1237 [“there can be no question that the cause of action for defamation accrued and the
statute of limitations ran from the date the book was first generally distributed to the
public, regardless of the date on which plaintiff actually learned of the existence of the
book and read its contents”].)5
5 Portman cites Nelson v. Indevus Pharmaceuticals, Inc. (2006) 142 Cal.App.4th
1202 as support for his argument that the release date of Wedding Crashers should not
have commenced the running of the statute of limitations. We find Nelson to be
distinguishable. In Nelson, the plaintiff’s cause of action arose from her use of the diet
drug sold as Redux. The defendant argued that the plaintiff’s action was barred by the
statute of limitations, because the limitations period began to run when the dangers of a
similar drug, known as “Fen-phen,” were widely publicized. The Nelson court disagreed,
finding that the plaintiff had no obligation to read newspapers and watch television news
or otherwise seek out information not disclosed by her prescribing doctor. (Id. at p.
1208.) The Nelson court’s conclusion was bolstered by Code of Civil Procedure section
340.8, which specifically provides that, in the context of toxic torts or hazardous
materials, media reports do not put a person on inquiry notice for the purpose of the
statute of limitations. (Ibid.) Here, there are no allegations suggesting that Portman was
unaware of the release of the film Wedding Crashers -- or the casting of that film -- on
July 15, 2005. Thus, the release of that movie imposed on Portman a duty to investigate
his potential claims further, and he is charged with knowledge of matters which would
have been revealed by such an investigation. (Ibid.)
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Because Portman’s cause of action for misappropriation of trade secrets was not
filed until July 13, 2009, it is barred by the statute of limitations as a matter of law, and
the demurrer to this cause of action was properly sustained.
C. Fraud and deceit
1. Applicable law
The elements of a cause of action for fraud and deceit are: (1) a representation; (2)
falsity; (3) knowledge of falsity; (4) intent to deceive; and (5) reliance and resulting
damage. (Lesperance v. North American Aviation, Inc. (1963) 217 Cal.App.2d 336, 345.)
Every element of a cause of action for fraud and deceit must be alleged specifically in
order for the cause of action to survive past the pleading stage. (Ibid.)
2. Applicable statute of limitations
The statute of limitations for an action based on fraud is three years. (Code Civ.
Proc., § 338, subd. (d).) The cause of action “is not deemed to have accrued until the
discovery, by the aggrieved party, of the facts constituting the fraud or mistake.” (Ibid.)
3. Facts alleged
Portman alleged that New Line falsely and in bad faith represented to him that it
intended to proceed with his project about party crashing. The representation was made
when New Line signed the contract dated June 3, 2002, and when New Line represented
in its letter of July 10, 2002, that if Portman met certain conditions, defendant would
move forward with production of the project. In addition, New Line allegedly falsely
represented that it intended to continue its involvement with Portman by engaging
Portman in five months of dialogue “while working duplicitously and fraudulently in
concert with UTA packaging ‘Wedding Crashers’ with UTA leading comedic talent
. . . and by New Line positioning itself to benefit financially from this secret procurement
of UTA talent.”
In addition, Portman alleged that on the release date of Wedding Crashers, New
Line and Kim intentionally signed and filed a false declaration under oath, which
“omitted, misrepresented and distorted the truth” and was “a bad faith attempt by New
Line to defraud [Portman] of his rights in the party crashing project, mislead the court,
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and cover-up the extent of [New Line’s] concealment.” Portman alleged that he
justifiably relied on these misrepresentations, resulting in financial damage and damage
to his career.
4. Application of statute of limitations
Portman’s allegations of fraud are centered around the alleged false promise that
New Line intended to proceed with Portman’s party crashing project and the alleged
concealment of New Line’s intention to go forward with the project without Portman or
the UTA talent affiliated with his proposal.
The allegations of the complaint reveal that Wedding Crashers was released to the
general public on July 15, 2005. Again, Portman does not allege that he was unaware of
the release of that movie, or of the storyline, which he alleges was primarily about party
crashing. Thus, on July 15, 2005, Portman was “aware of facts which would make a
reasonably prudent person suspicious” of the fraud. (Miller v. Bechtel Corp. (1983) 33
Cal.3d 868, 875.) On that date, Portman had a duty to investigate further, and he is
charged with knowledge of matters which would have been revealed by such an
investigation. (Ibid.) Because Portman did not file his cause of action for fraud and
deceit against New Line until July 13, 2009 -- more than three years after it accrued -- it
is barred as a matter of law, and the demurrer to this cause of action was properly
sustained.
D. Breach of implied covenant of good faith and fair dealing
“A cause of action for breach of the implied covenant of good faith and fair
dealing is premised on the breach of a specific contractual obligation. [Citation.]”
(Innovative Business Partnerships, Inc. v. Inland Counties Regional Center, Inc. (2011)
194 Cal.App.4th 623, 631.) “‘In essence, the covenant is implied as a supplement to the
express contractual covenants, to prevent a contracting party from engaging in conduct
which (while not technically transgressing the express covenants) frustrates the other
party’s rights to the benefits of the contract.’” (Racine & Laramie, Ltd. v. Department of
Parks & Recreation (1992) 11 Cal.App.4th 1026, 1031-1032.) “A breach of the covenant
of good faith and fair dealing does not give rise to a cause of action separate from a cause
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of action for breach of the contract containing the covenant. [Citation.]” (Smith v.
International Brotherhood of Electrical Workers (2003) 109 Cal.App.4th 1637, 1644, fn.
3.)
Because Portman’s cause of action for breach of the implied covenant of good
faith and fair dealing is based “upon a contract, obligation or liability not founded upon
an instrument of writing,” it is subject to the two-year statute of limitations found in Code
of Civil Procedure section 339.6
As set forth above, Wedding Crashers was released to the general public on July
15, 2005. Since this cause of action was not filed until July 2009, it is barred under the
two-year statute of limitations and thus fails as a matter of law. The trial court properly
sustained New Line’s demurrer to Portman’s cause of action for breach of implied
covenant of good faith and fair dealing on statute of limitations grounds.
III. Not an abuse of discretion to grant New Line’s request for judicial notice
Portman argues that the trial court erred in granting New Line’s request for
judicial notice filed concurrently with its demurrer to the SAC. Portman contends that
the court erred in taking judicial notice of documents which it previously declined to
judicially notice. In addition, Portman claims, based on the content of those documents,
the court arbitrarily adopted the date of the filing of the Reginald action as the
commencement date of the running of the statute of limitations in this case.
The documents which the court judicially noticed in connection with the demurrer
to the SAC were: (1) the complaint filed by Reginald on August 2, 2004; (2) the first
6 New Line suggests that Portman attempted to plead his breach of the covenant of
good faith and fair dealing cause of action as a tort, therefore the three-year statute of
limitations under Code of Civil Procedure section 338, subdivision (d), applies. We find
that this cause of action can only be considered as a contract action. As explained in
Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 683, “[t]he covenant of good faith
and fair dealing was developed in the contract arena and is aimed at making effective the
agreement’s promises.” Because the covenant “is a contract term, . . . compensation for
its breach has almost always been limited to contract rather than tort remedies.” (Id. at p.
684.) The single exception has been in the context of insurance law. (Ibid.; see also
Freeman & Mills, Inc. v. Belcher Oil Co. (1995) 11 Cal.4th 85, 102 [favoring “a general
rule precluding tort recovery for noninsurance contract breach”].)
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amended complaint filed in the Reginald action on December 27, 2004; and (3) the fact
that Portman was deposed twice in the Reginald action, once on May 10, 2005 and once
on May 25, 2005, as reflected in excerpts of the transcript of the deposition.
We review a trial court’s ruling on a request for judicial notice as an abuse of
discretion. (Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264.) A
court may properly take judicial notice of the records of any court of this state. (Evid.
Code, § 452, subd. (d).) Thus, the court’s decision to take judicial notice of the pleadings
filed in the Reginald action was within the limits of the court’s discretion and did not
constitute an abuse of that discretion.
A court may also take judicial notice of facts that are not reasonably subject to
dispute and are capable of immediate and accurate determination by sources of
reasonably indisputable accuracy. (Evid. Code, § 452, subd. (h).) “Strictly speaking, a
court takes judicial notice of facts, not documents. [Citation.]” (Fontenot v. Wells Fargo
Bank, N.A., supra, 198 Cal.App.4th at p. 265.) The court’s decision to take judicial
notice of the fact that Portman was deposed in the Reginald action on May 10, 2005, and
May 25, 2005, was within the limits of the court’s discretion under Evidence Code
section 452, subdivision (h), and did not constitute an abuse of discretion.
Portman alleges that the court acted in excess of its authority by misinterpreting
the documents and mischaracterizing the relationship between Portman and Reginald.
Portman has failed to convince us that the trial court interpreted the documents, and any
mischaracterization of the relationship between Portman and Reginald is irrelevant and
therefore harmless. (Aquila, Inc. v. Superior Court (2007) 148 Cal.App.4th 556, 569
[“‘the improper taking of notice is subject to harmless error analysis’”].)
IV. Not an abuse of discretion to deny leave to amend
The trial court denied Portman leave to amend after his third attempt to adequately
allege his claims against New Line. “[A] demurrer may be sustained without leave to
amend where it is probable from the nature of the complaint and the previous
unsuccessful attempt[s] to plead that the plaintiff cannot state a cause of action.” (Tyco
Industries, Inc. v. Superior Court (1985) 164 Cal.App.3d 148, 153.) In addition, Portman
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has not made any showing as to how he might cure the defects of the SAC. (See
Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081 [plaintiffs have “the
burden of proving that an amendment would cure the defect[s]”].) We therefore conclude
that the trial court did not abuse its discretion in denying Portman leave to amend.
DISPOSITION
The judgment is affirmed.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
____________________________, J.
CHAVEZ
We concur:
____________________________, P. J.
BOREN
____________________________, J.
ASHMANN-GERST
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