Sourcinglink Net v. Oracle

Filed 8/1/06 Sourcinglink Net v. Oracle CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

APPEAL from a judgment of the Superior Court of San Diego County, S. Charles Wickersham, Judge. Affirmed.

Plaintiff Sourcinglink.NET, Inc. (Sourcinglink) appeals from a judgment entered after the court sustained without leave to amend a demurrer brought by defendants Oracle Corporation and Globalnetxchange, LLC. (respectively Oracle and GNX, or collectively defendants). Sourcinglink contends it stated viable causes of action against Oracle and GNX for intentional interference with agreements Sourcinglink entered into in December 1999 and March 2000 with Carrefour, S.A. (Carrefour), intentional and negligent interference with prospective economic advantage stemming from those contracts, and violation of California's Unfair Competition Law (UCL, Bus. & Prof. Code, § 17200 et seq.). It further contends the trial court abused its discretion in refusing to grant leave to amend to file a second amended complaint. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Sourcinglink's operative first amended complaint contains the following allegations. Sourcinglink is in the business of, among other things, developing internet-based merchandizing software enabling the exchange of "business to business" information between retail merchandise buyers and merchandise suppliers or vendors. In 1998, Sourcinglink licensed its software to the vendors and suppliers of Promodes, S.A., a large merchandise retailer in France. Promodes, S.A. was acquired by Carrefour in 1999.^[1]

In December 1999, Sourcinglink and Carrefour entered into a letter agreement (the Letter Agreement) in which Carrefour agreed to incorporate Sourcinglink's software into its business operations. Under the Letter Agreement's terms, Carrefour would, among other obligations, "roll out" and implement Sourcinglink's software in three phases starting in January 2000. During the anticipated term of the Letter Agreement, Sourcinglink would have obtained subscriptions of no less than 20,000 Carrefour suppliers and vendors for gross annual license fees in the approximate amount of $40 million per year.

In February 2000, Carrefour, Oracle and others established GNX, and announced Carrefour's adoption of an internet-based merchandise software solution developed by Oracle known as GNX technology. The announcement acknowledged Sourcinglink and Carrefour's Letter Agreement, and stated GNX's intention to enable Sourcinglink to make a substantive contribution through its software.

On March 7, 2000, three of Sourcinglink's principals met with Oracle and Carrefour representatives to discuss Sourcinglink's contribution to GNX. At that meeting, the Oracle representatives stated that any contribution Sourcinglink may provide had already been accounted for by Oracle's software, or would be implemented shortly by Oracle, rendering Sourcinglink's solution moot. Both Sourcinglink's chairman and chief executive officer advised Carrefour's principles of Carrefour's failure to implement Sourcinglink's software under the Letter Agreement.

In order to induce Sourcinglink to terminate the Letter Agreement and enter into a new agreement, on March 31, 2000, Sourcinglink and Carrefour entered into a written service agreement (the Service Agreement), under which Sourcinglink would provide consulting services related to Carrefour's use and implementation of GNX technology for an initial three-year term. Among other things, the Service Agreement required Carrefour to enter into a software licensing agreement with Sourcinglink. The Service Agreement also required the parties to "use their best efforts" to consummate a licensing agreement expeditiously, with an expectation that the consummation would occur within 90 to 120 days after March 31, 2000. In reliance on the representations and inducement by Carrefour that it would use its best efforts to enter into a licensing agreement, Sourcinglink agreed to the terms of the Service Agreement and agreed to terminate the prior Letter Agreement and any claims it had under that agreement.

After February 28, 2000, Carrefour and Oracle negotiated and eventually entered into a "conspiratorial" agreement under which Carrefour adopted and implemented Oracle's GNX technology without using its best efforts to enter into a licensing agreement with Sourcinglink. Despite repeated assurances by Carrefour representatives that GNX would implement Sourcinglink's software as a component of GNX, Carrefour at Oracle's insistence failed to enter into the licensing agreement called for in the Service Agreement. Nevertheless, from April to June of 2000, in meetings between Sourcinglink and Carrefour representatives, Carrefour confirmed its commitment to incorporate Sourcinglink's software into the GNX platform, and reiterated its willingness to execute a licensing agreement.

In July 2000, Carrefour's representatives acknowledged Carrfour might not be able to complete execution of a licensing agreement within the 120-day period anticipated by the Service Agreement. Carrefour nevertheless reiterated its willingness to execute a licensing agreement.

For three years, from April 2000 to April 2003, Sourcinglink representatives made numerous attempts to receive information from Carrefour and GNX that would enable Sourcinglink's software to perform in conjunction with the GNX technology, and also made repeated requests to Carrefour that it use its best efforts to execute a licensing agreement. Carrefour and GNX did not comply with Sourcinglink's requests. At various times during that same period, Carrefour's representatives made representations to Sourcinglink, and Sourcinglink provided Carrefour and its buyers with presentations and demonstrations of its software, leading Sourcinglink to believe that Carrefour was using its best efforts to expeditiously consummate a licensing agreement.

On April 29, 2003, Mr. Hollows, a Carrefour representative, formally repudiated Carrefour's obligation to execute a licensing agreement, claiming its obligation to perform under the Service Agreement had lapsed.

In June 2004, Sourcinglink filed a 12-count complaint against Carrefour, Oracle and GNX. As to Oracle and GNX, it asserted causes of action for intentional and negligent interference with contractual relations (fourth, sixth, eighth and tenth causes of action) and intentional and negligent interference with prospective economic advantage (fifth, seventh, ninth and eleventh causes of action) with respect to both the Letter Agreement and the Service Agreement. Specifically, Sourcinglink alleged Oracle and GNX interfered with both agreements when, at some "undetermined time" after Sourcinglink's entry into them they (1) engaged in secret negotiations with Carrefour regarding Carrefour's use of Sourcinglink's software and its licensing to Carrefour's suppliers; (2) entered into a "conspiratorial agreement" with Carrefour by which the three would attempt to minimize or nullify the use of Sourcinglink's software by Carrefour, its vendors and/or suppliers, and replace Sourcinglink's software with non-equivalent features offered by the Oracle-based GNX technology; and (3) promoted the founding of GNX in part to prevent Carrefour's roll out of Sourcinglink's software solution, thereby depriving Sourcinglink of its anticipated gross licensing fees. In part, Sourcinglink alleged that as a "proximate result of Carrefour's repudiation of the Service Agreement, Sourcinglink's share price fell below $10 during March 2000 and subsequently fell to below $1 per share following Carrefour's repudiation of the Licensing Agreement, causing virtually all of Sourcinglink's market capitalization to be wiped out." In its claims for interference with prospective economic advantage, Sourcinglink alleged Oracle and GNX undertook their alleged actions for the sole purpose of placing Sourcinglink under extreme duress, to induce Carrefour to breach the Letter Agreement and the Service Agreement, and to prevent Sourcinglink from enjoying the benefit of its bargain under the agreements, with knowledge and malicious intent to interfere with Sourcinglink's advantageous business relations.

Sourcinglink also asserted a cause of action for violation of the UCL, alleging all the defendants committed acts of unfair competition by engaging in fraud and interference with Sourcinglink's contractual and prospective economic advantage under both agreements. It alleged defendants engaged in acts of unfair business practices because they knew Sourcinglink had entered into the Service Agreement in reliance on Carrefour's representation that it would use its best efforts to enter into a licensing agreement for the use of Sourcinglink's software.

Oracle and GNX each generally demurred to the fourth through twelfth causes of action on grounds they failed to state facts sufficient to state a cause of action, and as to all but the UCL cause of action, they were barred by the applicable two-year statute of limitations. The court overruled the demurrers to the twelfth UCL cause of action. However, it sustained the demurrers to Sourcinglink's fourth through eleventh causes of action with leave to amend, on Sourcinglink's counsel's assertions that he wanted to "elaborate" on fraud as an underlying wrongful act to its interference with prospective economic advantage claims, and allege facts demonstrating estoppel to toll the statute of limitations based on various representations made by the defendants.

Thereafter, Sourcinglink filed its first amended complaint, eliminating the causes of action for negligent interference with the Letter and Service Agreements, and deleting the allegation that its share price dropped in March 2000 as a result of Carrefour's repudiation of the Service Agreement. It added allegations based on "information and belief" that various representations by Carrefour and Carrefour's representatives between July 2000 and April 2003 caused it to reasonably believe Carrefour was using its best efforts to expeditiously consummate a licensing agreement.

Oracle and GNX demurred to the fourth through tenth causes of action in Sourcinglink's first amended complaint. Oracle argued: (1) Sourcinglink alleged actual and appreciable harm showing its interference claims accrued in 2000 and were therefore barred by the two-year statute of limitations; (2) Sourcinglink could not allege facts demonstrating equitable tolling or fraudulent concealment sufficient to avoid the statute of limitations; (3) Sourcinglink could not state a proper UCL cause of action because it alleged improper nonrestitutionary disgorgements of profits and "futile" injunctive relief and (4) Sourcinglink could not allege an independently wrongful act to support a viable cause of action for interference with prospective economic advantage, but even if it did Oracle's alleged acts were lawful competitive acts and thus privileged. GNX similarly argued: (1) Sourcinglink had not alleged an independently wrongful act to support its fifth, sixth, eighth and ninth causes of action for intentional or negligent interference with prospective economic advantage; (2) Sourcinglink's interference causes of action were time-barred in view of its allegations of lost licensing revenue and diminished stock price during March of 2000, and it did not allege facts demonstrating equitable tolling or estoppel; and (3) Sourcinglink could not allege a viable UCL cause of action because it could not allege facts demonstrating it sought proper UCL remedies in the form of restitution – that it was seeking to recover money or property in GNX's possession – or injunctive relief.

The court sustained the demurrers without leave to amend. It ruled Sourcinglink's interference causes of action were time-barred; that Sourcinglink's allegations revealed it began experiencing actual and appreciable harm in the latter half of 2000 when it became apparent that the agreement to license its software would be delayed and Sourcinglink was not receiving licensing revenue. It further ruled the causes of action were time-barred because Sourcinglink's allegations revealed commission of the alleged wrong occurred more than two years before the action was filed in 2000, when Carrefour and Oracle conspired to enter into an agreement for use of Oracle's software. The court ruled Sourcinglink had not alleged that either Oracle or GNX made false representations and thus neither equitable tolling nor fraudulent concealment applied. It further ruled Sourcinglink could not allege Oracle or GNX's actions were independently wrongful; that allegations that Oracle's and GNX's acts constituted unfair competition did not suffice since the UCL cause of action was itself based on the interference and there were no competent allegations of fraud. Finally, with respect to the UCL cause of action, the court ruled Sourcinglink's allegations did not establish its right to restitution or injunctive relief.

The court entered judgment in favor of Oracle and GNX. Sourcinglink timely filed this appeal.

DISCUSSION

I. Standard of Review

"In determining whether plaintiffs properly stated a claim for relief, our standard of review is clear: ' "We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed." [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.] When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. [Citation.] And when it is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff.' " (Zelig

v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126.)

II. The Statute of Limitations Bars Sourcinglink's Interference Causes of Action Against Oracle and GNX

The elements of a cause of action for intentional interference with contract are: "(1) a valid contract between plaintiff and a third party; (2) defendant's knowledge of [the] contract; (3) defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage." (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 55; accord, Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 514, fn. 5.) "A claim for intentional interference with prospective economic advantage includes the same elements [as a cause of action for interference with contractual relationship], but involves an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff and the additional element that the defendant's action must have been wrongful apart from the interference itself." (Mann v. Quality Old Time Service, Inc. (2004) 120 Cal.App.4th 90, 110; see also Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1153-1154 (Korea Supply).) A defendant that does not act intentionally to interfere with an economic relationship between the plaintiff and the third party may be liable for negligent interference with economic advantage where it is reasonably foreseeable that its conduct would disrupt the relationship. (See J'aire Corp. v. Gregory (1979) 24 Cal.3d 799, 804-805.) As to such a cause of action, the conduct must still be independently wrongful apart from the interference itself. (National Medical Transportation Network v. Deloitte & Touche (1998) 62 Cal.App.4th 412, 439-440 [independently wrongful requirement applies to negligent interference claims].)

Sourcinglink contends its first amended complaint states viable claims against Oracle and GNX for intentional interference with both the Letter and Service Agreements, pointing to allegations, among others, that Oracle and GNX entered into an agreement with Carrefour to minimize use of Sourcinglink's software, having already acknowledged the existence of the Letter Agreement requiring Carrefour to roll out its implementation, and undertook the founding of GNX to prevent Carrefour from implementing Sourcinglink's software. On appeal, Oracle and GNX do not challenge these arguments. Rather, as they did in their demurrers before the trial court, defendants argue Sourcinglink's interference with contract causes of action (as well as its intentional and negligent interference with prospective economic advantage causes of action) accrued when Sourcinglink suffered actual and appreciable harm by the spring or summer of 2000, and thus they are barred by the two-year statute of limitations of Code of Civil Procedure section 339(1). They refer to Sourcinglink's allegation in its original complaint that as a proximate result of Carrefour's repudiation of the Service Agreement, Sourcinglink's share price fell below $10 during March 2000 and later fell to below $1 per share following Carrefour's repudiation of the licensing agreement, wiping out its market capitalization. They also point to Sourcinglink's allegations that due to its "acquiescence" in the Service Agreement, it "was deprived of at least [$40 million] per year" that it would have earned under the previous Letter Agreement, as well as allegations showing Sourcinglink had a contractual expectation that it and Carrefour would execute a licensing agreement within 120 days after executing the Service Agreement -- by July or August 2000.

We agree Sourcinglink's allegations demonstrate its interference causes of action accrued, i.e., the wrongful acts occurred and it suffered actual and appreciable harm, by July or August of 2000 at the latest. "A plaintiff must bring a claim within the limitations period after accrual of the cause of action. [Citation.] In other words, statutes of limitation do not begin to run until a cause of action accrues." (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 806.) In general, a cause of action accrues when it is " 'complete with all of its elements.' " (Id. at p. 806; Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 397.) Sourcinglink is bound by prior allegations that were fatal to its interference causes of action, and cannot cure its pleading by simply omitting them. (See Hendy v. Losse (1991) 54 Cal.3d 723, 743 [where a verified or unverified complaint contains allegations destructive of a cause of action, the defect cannot be cured in subsequently filed pleadings by simply omitting such allegations without explanation].) Sourcinglink has not demonstrated that its original allegation that it suffered substantial market capitalization loss in March 2000 as a proximate result of Carrefour's repudiation of the Service Agreement was the result of mistake or inadvertence. (Ibid.)

Sourcinglink does not meaningfully challenge defendants' arguments that each of the elements of its causes of action were complete more than two years before it filed its original complaint in June 2004, or that the two-year limitations period applies.^[2] Rather, anticipating these arguments, Sourcinglink relies on a theory of delayed accrual under the doctrine of "equitable tolling."^[3] Citing Snapp v. Malcolm (2002) 96 Cal.App.4th 884 (Snapp), Sourcinglink argues it met this doctrine because (1) it alleged all the substantive elements of fraud by pleading Oracle entered into a conspiracy with Carrefour and GNX to prevent Carrefour's implementation of Sourcinglink's software and, in turn, consummation of the December 1999 Letter Agreement or a licensing agreement; (2) Sourcinglink had no actual or constructive knowledge of Oracle's conspiracy with Carrefour until Carrefour "officially breached and repudiated" the Service Agreement in April 2003; and (3) Sourcinglink acted reasonably in discovering the wrongdoing after it became apparent by filing its lawsuit; and (4) Sourcinglink was delayed for approximately three years in discovering the information based on Carrefour and GNX's agreement to continually delay implementation of a licensing agreement.

In Snapp, this court discussed the theory of fraudulent concealment for purposes of tolling the statute of limitations: " 'The doctrine of fraudulent concealment, which is judicially created [citations], limits the typical statute of limitations. "[T]he defendant's fraud in concealing a cause of action against him tolls the applicable statute of limitations . . . ." [Citations.] In articulating the doctrine, the courts have had as their purpose to disarm a defendant who, by his own deception, has caused a claim to become stale and a plaintiff dilatory. [Citations.]' [Citation.] [¶] 'The doctrine of fraudulent concealment of the cause of action, which applies to any type of case . . . , has an effect similar to the statutory rule of delayed accrual in fraud cases under [Code of Civil Procedure section 338, subdivision (d)]. Because fraud is the basis of the estoppel, the same pleading and proof is required in the fraud cases, i.e., the plaintiff must show (a) the substantive elements of fraud, and (b) an excuse for late discovery of the facts. [Citations.] [¶] But the fraudulent concealment cases are distinguishable from . . . fraud cases in that different periods [of limitation] may be involved.' [Citation.] Fraudulent concealment prevents the running of the statutes of limitations germane to the action." (Snapp, supra, 96 Cal.App.4th at p. 890.) We cannot agree that Sourcinglink adequately alleged all of the substantive elements of fraud merely by pleading Oracle's entry into a "conspiratorial" agreement with Carrefour and GNX. " 'Fraud actions . . . are subject to strict requirements of particularity in pleading. . . . [F]airness to the defendant demands that he [or she] should receive the fullest possible details of the charge in order to prepare his [or her] defense.

. . . Every element of the cause of action for fraud must be alleged in the proper manner (i.e., factually and specifically), and the policy of liberal construction of the pleadings

. . . will not ordinarily be invoked to sustain a pleading defective in any material

respect.' " (Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216; see also Wilhelm v. Pray, Price, Williams & Russell (1986) 186 Cal.App.3d 1324, 1331.) A fraud cause of action must therefore plead facts that " ' "show how, when, where, to whom, and by what means the representations were tendered." ' " (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645; see Goldrich v. Natural Y Surgical Specialties, Inc. (1994) 25 Cal.App.4th 772, 782 ["the plaintiff must, at a minimum, set out a representative selection of the alleged misrepresentations sufficient to permit the trial court to ascertain whether the statements were material and otherwise actionable"].) In this case, Sourcinglink's first amended complaint is markedly lacking in specificity. Virtually every paragraph is alleged on "information and belief," including those setting out the alleged false representations made to Sourcinglink assertedly concealing the existence of its causes of action.^[4] Further, both Oracle and GNX are referred to as an entity only, there are no allegations that any particular Oracle or GNX representative made any false representation on which Sourcinglink relied to its detriment. Nor are there any allegations demonstrating whether or how Oracle or GNX actively concealed the existence of any cause of action Sourcinglink might have had against them. Indeed, to the contrary, Sourcinglink alleges that Oracle representatives advised it on March 7, 2000, after Oracle and Carrefour announced the formation of GNX and Carrefour's adoption of GNX technology, that any contribution Sourcinglink may provide to GNX had been "render[ed] . . . moot" by Oracle's existing or soon-to-be-implemented software. While in its first amended complaint Sourcinglink added new allegations asserting that from July 2000 to April 2003, it was the recipient of representations causing it to believe Carrefour was using its best efforts and committed to rolling out Sourcinglink's software, each of those allegations recite that the representations were made by "Carrefour" or "Carrefour's representatives," not by Oracle or GNX. In short, there are no allegations to support Sourcinglink's assertion that Oracle or GNX concealed their role in events from it.

Sourcinglink's reliance on a theory of fraudulent concealment additionally fails because Sourcinglink cannot plead facts showing its interference claims could not have been discovered in the exercise of reasonable diligence. The doctrine of fraudulent concealment is "a close cousin of the [delayed] discovery rule," which postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action. (Bernson v. Browning-Ferris Industries (1994) 7 Cal.4th 926, 931.) In Fox v. Ethicon Endo-Surgery, Inc., supra, 35 Cal.4th 797 (Fox), the California Supreme Court recently defined the pleading requirements for delayed accrual. (Fox, supra, 35 Cal.4th at p. 808.) In order to rely on the discovery rule for delayed accrual of a cause of action, a plaintiff must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence. (Ibid.) The court places the burden on the plaintiff to show diligence; conclusory allegations will not withstand demurrer. (Ibid.) The plaintiff must plead that despite diligent investigation of the circumstances of the injury, he or she could not have reasonably discovered facts supporting the cause of action within the applicable limitations period. (Id. at p. 809.) Like the delayed discovery rule, a defendant's fraud in concealing a cause of action against him tolls the applicable statute of limitations, but " 'only for that period during which the claim is undiscovered by plaintiff or until such time as plaintiff, by the exercise of reasonable diligence, should have discovered it.' " (Bernson v. Browning-Ferris Industries, supra, 7 Cal.4th at p. 931.) We see no reason why the delayed discovery pleading requirements should not also apply to the doctrine of fraudulent concealment; they are both equitable principles designed to effect substantial justice between the parties. (Ibid.)

Here, Sourcinglink's pleadings show that by March 2000 it was aware Carrefour had formed GNX with Oracle, and that Carrefour had adopted the GNX technology and by doing so had rendered Sourcinglink's own technology "moot." The pleadings further show that by August 2000 (120 days after March 31, 2000), Carrefour had not consummated a licensing agreement despite the Service Agreement's provision that it use best efforts to do so and that, under the proposed licensing agreement, Sourcinglink would have been receiving no less than $500,000 per year. As a result of Oracle and GNX's alleged wrongdoing, by late summer of 2000, Sourcinglink's contractual expectation under the Service Agreement had not come to pass and, under its own allegations, it began suffering the loss of substantial licensing revenue. Sourcinglink has not alleged that it exercised reasonable diligence in attempting to discover its claims. Under these circumstances, we conclude Sourcinglink cannot plead facts showing it lacked knowledge or lacked the reasonable means of obtaining knowledge of its potential claims in the exercise of reasonable diligence. (McKelvey v. Boeing North American, Inc. (1999) 74 Cal.App.4th 151, 160, fn. 11; Fox, supra, 35 Cal.4th at p. 803.) As both Oracle and GNX point out, these allegations defeat any possible claim of fraudulent concealment for purposes of preventing the running of the statutes of limitation upon Sourcinglink's interference causes of action. "The fraudulent concealment doctrine ' "does not come into play, whatever the lengths to which a defendant has gone to conceal the wrongs, if a plaintiff is on notice of a potential claim." ' [Citation.] A plaintiff is under a duty to reasonably investigate, and a suspicion of wrongdoing, coupled with a knowledge of the harm and its cause, commences the limitations period." (Snapp, supra, 96 Cal.App.4th at pp. 890-891.) Here, the first amended complaint reveals Sourcinglink had reason to suspect a factual basis for its causes of action because as stated above, it had notice or information of circumstances to put a reasonable person on inquiry. (Norgart, supra, 21 Cal.4th at p. 398.) Because Sourcinglink's allegations demonstrate its interference causes of action are time-barred under either the two or three year statute of limitations, the court properly sustained the defendants' demurrers on that ground.

III. UCL Cause of Action

Sourcinglink contends it stated a viable UCL cause of action against Oracle and GNX for an "unfair" business practice based on its allegations of a conspiracy to restrain trade by those defendants.^[5] Citing Quelimane Co. v. Stewart Title Guaranty Co., supra, 19 Cal.4th 26, it maintains the conspiracy need not be stated with particularity, and under that standard it has stated such a claim by alleging Carrefour and Oracle entered into a "conspiratorial" agreement at some point after February 28, 2000, in which Carrefour would implement the GNX technology without using its best efforts to enter into a licensing agreement, and that Oracle induced Carrefour to terminate the Letter Agreement and enter into the Service Agreement, which Carrefour thereafter repudiated. Sourcinglink contends it stated a claim for equitable relief including an accounting or constructive trust by alleging "Carrefour and Oracle are improperly providing an inferior merchandising software solution to retail customers under [GNX] to the exclusion of [Sourcinglink's] software," causing "resulting damage to consumers. . . ."

To the extent Sourcinglink seeks to salvage its cause of action under the UCL by these arguments, it has not succeeded. We need not decide whether Sourcinglink's substantive allegations of a conspiracy to restrain trade are sufficient, because as both Oracle and GNX point out, Sourcinglink cannot allege it is entitled to the limited UCL remedies of restitution or injunctive relief. (Korea Supply, supra, 29 Cal.4th at p. 1147; Feitelberg v. Credit Suisse First Boston LLC (2005) 134 Cal.App.4th 997, 1012.)

"A court cannot, under the equitable powers of section 17203, award whatever form of monetary relief it believes might deter unfair practices." (Korea Supply, supra, 29 Cal.4th at p. 1148.) Rather, the court is limited to restitution, by restoring money or property to a direct victim of an unfair business practice: " 'The object of restitution is to restore the status quo by returning to the plaintiff funds in which he or she has an ownership interest.' [Citation.] Consistent with that objective, 'restitutionary awards encompass quantifiable sums one person owes to another. . . . ' [Citation.] Such awards represent 'money that once had been in the possession of the person to whom it [is] to be restored.' [Citation.] [¶] The 'notion of restoring something to a victim of unfair competition includes two separate components. The offending party must have obtained something to which it was not entitled and the victim must have given up something which he or she was entitled to keep.' [Citation.] Restitution thus is available where 'a defendant has wrongfully acquired funds or property in which a plaintiff has an ownership or vested interest.' [Citations.] In other words, 'in the UCL context . . . restitution means the return of money to those persons from whom it was taken or who had an ownership interest in it.' " (Feitelberg v. Credit Suisse First Boston LLC, supra, 134 Cal.App.4th at p. 1012; see also Colgan v. Leatherman Tool Group, Inc. (2006) 135 Cal.App.4th 663, 697-698.) While Sourcinglink asserts in its brief that it seeks to recoup monies Oracle and GNX "obtained from" it, its allegations reveal that any monies it seeks to recoup are Oracle and GNX's profits, or revenues (including licensing and consulting fees) Sourcinglink would have received under the Letter and Service Agreements.^[6] Nonrestitutionary disgorgement of profits is not available under the UCL (Korea Supply, supra, 29 Cal.4th at p. 1152), nor are any other type of compensatory damages. (Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 173.) Sourcinglink's allegations do not show the relief sought by Sourcinglink is restitutionary because there are no allegations Sourcinglink provided a certain sum of money to Oracle or GNX that it seeks to recover or that it provided some benefit to those defendants for which it is entitled to legal restitution. (See Colgan v. Leatherman Tool Group, Inc., supra, 135 Cal.App.4th at p. 699.) Further, Sourcinglink suggests a restitutionary award would not go to it, but rather to retail consumers who were damaged as a result of having been provided with an "inferior" product.

To the extent Sourcinglink suggests it has adequately alleged alternative causes of action for a constructive trust or accounting, we reject such a contention based on the absence of any meaningful legal argument on the point. (People v. Stanley (1995) 10 Cal.4th 764, 793 [" '[E]very brief should contain a legal argument with citation of authorities on the points made. If none is furnished on a particular point, the court may treat it as waived, and pass it without consideration' "]; Reyes v. Kosha (1998) 65 Cal.App.4th 451, 466, fn. 6 [scope of review on appeal is limited to those issues adequately raised and supported in opening brief even where review is de novo]; Landry v. Berryessa Union School Dist. (1995) 39 Cal.App.4th 691, 699-700.) Sourcinglink does not describe the elements of such claims or explain how its allegations suffice to state them. Its sole supporting case authority – Bainbridge v. Stoner (1940) 16 Cal.2d 423, 428 – is provided in a footnote without analysis. Even so, Bainbridge is inapposite; it involved an action by minority shareholders of a corporation against a fiduciary – the corporation's president – alleging he acquired certain property in defiance of the rights of the corporation and its stockholders. (Id. at pp. 425-429.) On those allegations, the court held the plaintiffs had, at best, alleged a constructive trust cause of action that was barred by the statute of limitations. (Id. at p. 429.) It affirmed the lower court's order sustaining the defendant's demurrer on that basis. (Id. at p. 432.) Sourcinglink has not convinced us by its mere citation to Bainbridge that it has stated a cause of action against Oracle or GNX for a constructive trust or accounting.

Even if we were to disregard this flaw, our de novo review of Sourcinglink's pleadings reveal no viable cause of action for a constructive trust. "To create a constructive trust, there must be a res, an 'identifiable kind of property or entitlement in defendant's hands.' " (Korea Supply, supra, 29 Cal.4th at p. 1150.) Such a claim requires " 'money or property identified as belonging in good conscience to the plaintiff [which can] clearly be traced to particular funds or property in the defendant's possession.' " (Ibid.) Here, Sourcinglink's requested recovery is not a quantifiable sum that can be traced to any particular funds in either Oracle or GNX's possession. It is not the proper subject of a constructive trust. Finally, although Sourcinglink does not argue it has stated a claim for injunctive relief and thus waives the point, absent allegations of ongoing wrongful conduct, there is no basis for injunctive relief. (Scripps Health v. Marin (1999) 72 Cal.App.4th 324, 332 [injunctive relief lies only to prevent threatened injury and has no application to wrongs that have been completed; it does not serve as punishment for past acts and cannot be exercised in the absence of evidence establishing the reasonable probability the acts will be repeated in the future].)

IV. Leave to Amend

Sourcinglink contends the court abused its discretion by refusing to permit it to file a second amended complaint. "[I]t 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." (Bragg v. Valdez (2003) 111 Cal.App.4th 421, 428; Hendy v. Losse, supra, 54 Cal.3d at p. 742.) Sourcinglink bears the burden of demonstrating a reasonable possibility that it may cure defects by an amendment, by showing in what manner the complaint can be amended and how that amendment will change the legal effect of the pleadings. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Goodman v. Kennedy (1976) 18 Cal.3d 335, 349; Governing Board v. Haar (1994) 28 Cal.App.4th 369, 375.)

Sourcinglink has not met this burden. It sets out assertedly new allegations that it claims would support Oracle and GNX's "scheme to commit fraud," including that "[b]oth GNX and Oracle stated their intention to enable Sourcinglink to make a substantive contribution through the software solution knowing that this announcement was false when made"; that "when Oracle and GNX made this announcement [they] . . . knew that they would not act in accordance therewith"; and that "GNX and Oracle's announcement was substantially material to Sourcinglink's decision to terminate the [L]etter [A]greement and substitute it for the [S]ervice [A]greement."

None of these proposed allegations cure the defects of Sourcinglink's UCL cause of action. Nor do they impact the allegations of Sourcinglink's first amended complaint revealing it had reason to discover its causes of action well before two or three years before it filed suit in June 2004. In short, none of Sourcinglink's proposed amendments change our conclusion that its interference causes of action are time-barred by the relevant statutes of limitation. The court properly sustained the defendants' demurrers without leave to amend.^[7]

DISPOSITION

The judgment is affirmed.

O'ROURKE, J.

I CONCUR:

BENKE, Acting P. J.

NARES, J., Concurring and Dissenting.

On this record I agree with the majority that Sourcinglink.Net, Inc.'s (Sourcinglink's) claims are barred by the statute of limitations.

However, Sourcinglink represented at oral argument that while this matter was pending on appeal, it proceeded to trial against Carrefour, S.A. (Carrefour), a defendant in the underlying case. It further represented that depositions of Carrefour executives and evidence presented at trial revealed facts that would allow it to amend its allegations in its first amended complaint to cure the statute of limitations on its claims against Oracle Corporation and Globalnetxchange, LLC.

In order to fairly evaluate Sourcinglink's request for leave to amend its first amended complaint, the appellate panel should request the parties to provide supplemental briefing on the question of whether Sourcinglink should be permitted leave to amend its first amended complaint to cure the bar of the applicable statute of limitations on its claims. Specifically, Sourcinglink must demonstrate a reasonable possibility it can cure this defect by showing in what manner its first amended complaint can be amended and how that amendment will change the legal effect of the pleadings. Because the majority denies the request for supplemental briefing, I dissent.

NARES, J.

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^[1] Carrefour is not a party to this appeal.

^[2] Sourcinglink merely asserts without authority or analysis that either a two or three year limitations period applies (Code Civ. Proc., §§ 339(1) [two years], 338(d) [three years]), and that, "in order to satisfy" these limitations periods, it included an allegation in its first amended complaint that it did not learn of Carrefour's breach until April 29, 2003. However, as we explain below, this allegation does not address Sourcinglink's obligation to plead facts showing it could not have discovered its causes of action in the exercise of reasonable diligence.

^[3] Sourcinglink relies on the equitable tolling doctrine only with respect to its fourth and fifth causes of action for intentional interference with the Letter Agreement against Oracle. However, Sourcinglink's operative complaint includes allegations of appreciable harm sufficient to trigger accrual of all of the interference causes of action. Thus, our resolution of the equitable tolling is dispositive of all of Sourcinglink's interference claims, including its sixth through ninth causes of action.

^[4] Information and belief is a "common legal term used to indicate that 'the allegation is not based on the firsthand knowledge of the person making the allegation, but that person nevertheless, in good faith, believes the allegation to be true.' " (City of Santa Cruz v. Municipal Court (1989) 49 Cal.3d 74, 93, fn. 9.) Because the liberal pleading standards do not apply to allegations of fraud (Committee on Children's Television, Inc. v. General Foods Corp., supra, 35 Cal.3d at p. 216), we question whether allegations on information and belief are appropriate for essential facts that must be pleaded with specificity.

^[5] Sourcinglink does not argue that it met the pleading standards under the UCL for an "unlawful" or "fraudulent" business practice.

^[6] For the UCL cause of action in its first amended complaint, Sourcinglink pleads for "equitable relief to the extent allowed by law, including but not limited to disgorgement of Defendants' profits, restitution under the March 31, 2000 Service Agreement, rescission of the March 31, 2000 Service Agreement and reinstatement of the December 9, 1999 Letter Agreement, and injunctive relief according to proof."

^[7] We note that at oral argument, Sourcinglink's counsel asserted that as a result of the trial against Carrefour, which had apparently taken place the week before the oral argument hearing in this matter, he had obtained additional facts relevant to whether Sourcinglink should have been granted leave to amend. Although counsel was asked to recite in specific detail the facts that he contended would demonstrate Sourcinglink could cure the statute of limitations and other pleading defects, he responded only with generalities as to a meeting between Carrefour, Oracle and GNX in which they assertedly agreed to have Carrefour act as a "frontman" to get Sourcinglink to terminate the Letter Agreement and then lead it through continuing negotiations to prevent it from filing suit, without any intent to ever enter into a licensing agreement. These asserted facts are still legally insufficient to demonstrate a conspiracy based on fraud under the strict pleading standards set forth above. Further, Sourcinglink's counsel did not address how he would allege Sourcinglink's exercise of reasonable diligence in attempting to discover its claims. Finally, Sourcinglink raised its arguments as to leave to amend in its opening brief, and could have submitted supplemental briefing on that point in advance of oral argument if it believed it possessed additional facts demonstrating a reasonable possibility it could cure the statute of limitations defects in its complaint.