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Andrieu v. Aquantia Corp. CA6

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Andrieu v. Aquantia Corp. CA6
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12:27:2018

Filed 11/21/18 Andrieu v. Aquantia Corp. CA6

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

JEAN BAPTISTE DE SAINT ANDRIEU,

Plaintiff and Appellant,

v.

AQUANTIA CORP.,

Defendant and Respondent.

H044638

(Santa Clara County

Super. Ct. No. 1-15-CV-283419)

Plaintiff Jean Baptiste de Saint Andrieu, a technical recruiter, filed a verified complaint against defendant Aquantia Corporation (Aquantia) seeking to recover in quantum meruit for his presentation of a team of prospective employees (the Eindhoven team) to Aquantia, which hired them. The complaint also sought damages for alleged concealment by Aquantia. It contained three causes of action: (1) common count (implied-in-law contract to pay for services rendered); (2) common count (implied-in-law contract to pay for benefits mistakenly conferred); and (3) concealment (intentional failure to disclose facts).[1] The trial court granted Aquantia’s motion for summary judgment based on its affirmative defenses of waiver and estoppel after determining that plaintiff had failed to raise a triable issue of material fact.

Plaintiff appeals from the judgment against him following the grant of summary judgment. Plaintiff now argues that his claims were not barred by waiver and estoppel because (1) Aquantia did not meet its burden of showing that there was a complete defense to the causes of action and (2) he had made a “sufficient factual showing” to raise a triable issue as to whether his December 4, 2014 letter, in which he stated that he was relinquishing any placement fees, any form of compensation, and any “other financial gain” related to recruiting the Eindhoven team, was the product of economic duress.

We conclude that the trial court correctly granted Aquantia’s motion for summary judgment. Accordingly, we will affirm the judgment.

Discussion

A. Facts

The undisputed facts or uncontradicted evidence showed the following.

Prior to plaintiff and Aquantia’s communications regarding the Eindhoven team, plaintiff had worked for Aquantia under an express written contract. Plaintiff was familiar with Aquantia’s hiring practices and its Web site, which contained the following warning: “Aquantia Corp. does not accept unsolicited agency resumes and is not responsible for any fees related to unsolicited resumes.”

In early November 2014, plaintiff sent an email message to Ramin Shirani, Phil Delansay, and two others at Aquantia.[2] Plaintiff stated that he had “an extremely unique and valuable business & recruiting opportunity with a short time window” and that he was “representing (exclusively) a world-class team of senior engineers, who ha[d] recently developed one of the industry’s best performing DA Converters.” The team included 12 individuals, Edward Paulus was the team’s development manager, and the team was based in Eindhoven, Netherlands. Plaintiff stated that “[t]he HSC (High Speed Converters) organization was acquired in July 2012 by IDT from NXP.”

Plaintiff said in the email message, “lf you are willing & open to discussing ‘business’, [sic] then I am confident we can find a mutually agreeable path forward.” Plaintiff provided information regarding the team members and their experience, and he stated, “Please review the resumes & team summary to gage [sic] their level of expertise.” He ended the message with, “Let’s make this a win/win.”

In his deposition, plaintiff acknowledged that Paulus had told him that for the previous 18 months the Eindhoven team had been “shopped” to various companies in the Silicon Valley. Plaintiff was asked, “So you were not the exclusive person representing them?” He responded, “That’s not what I meant here.” Plaintiff was asked, “Did you have any type of an exclusivity agreement with the Eindhoven team?” He answered, “There is no such thing in the recruiting world.”

By email dated November 7, 2014 (Central European Standard Time), Delansay answered, “Thanks for reaching out. Just to clarify, when you say you’re representing these engineers, have you been hired by them as a group or have you been hired by IDT to find a new home for these engineers as part of some divestment/reorg? I’ll have a chat with the team here, and we’ll get back to you.”

Plaintiff responded to Delansay in an email message dated November 7, 2014 (Central European Standard Time). He explained that “[e]ach individual team member ha[d] signed & accepted their individual severance packages from IDT” and that “[a]s of Dec. 1, 2014, they [were] no longer part of IDT.” Plaintiff further told Delansay that Edward Paulus was the manager of the HSC team in Eindhoven and that Paulus had “engaged with [him], as [a]Technical Recruiting specialist, to represent his team to potential new opportunities.” Plaintiff provided a phone number and email address for Paulus. Plaintiff stated, “If you are interested & excited about the possible future prospects of hiring the HSC Team, then let’s have some earnest business discussions about how to best proceed to the next step.”

In an email message to the same four individuals at Aquantia, dated November 27, 2014 (Central European Standard Time), plaintiff indicated that he had spoken at length with Paulus, and they had “discussed the pertinent recruiting steps that [were] taking place between Aquantia and his HSC Team in Eindhoven, Netherlands.” He stated that it was “clear from [his] conversation with [Paulus], that Aquantia ha[d] demonstrated interest, and taken preliminary steps in pursuing [his] candidates for potential hire.”

In this email message, plaintiff proposed his specific compensation, stating, “[I]t is very important at this stage to discuss the ‘contingency recruiting terms’ moving forward, should Aquantia eventually hire any of my candidates. [¶] Discussing the straightforward and amicable business terms at this point is appropriate and warranted. [¶] Proposed terms: [¶] • Industry standard 20% placement fee (based on the 1st year’s salary) [¶] • 90 day [sic] full guarantee [¶] • Net-30 day payment (from start date).” Plaintiff conceded in his deposition that he had not made this proposal to Aquantia any time before November 26 2014.

The same email message further stated: “I presented the HSC Team Eindhoven to Aquantia with the express expectation of making some potential contingency placements. [¶] I presented all 12 of my (HSC Team) candidates in ‘goodfaith’, [sic] knowing that they would be of potential great value to the future success of Aquantia! [¶] I expect to find a mutually positive and win/win outcome, in the event of any possible hires. [¶] It all just comes down to the business opportunity and terms. [¶] This is how professional and successful businesses succeed and operate.”

By letter dated December 2, 2014, Delansay demanded that plaintiff “cease and desist from your communications with Aquantia which are designed to extract some form of consulting or recruiting fee from Aquantia to which you have no contractual right.” The letter further stated in part: “In the past, Aquantia worked with you solely under an express written Consulting Agreement, for certain specified services in return for specified compensation under express conditions set forth in that Agreement. The last extension of the term of that Agreement expired automatically on June 30, 2013. Since then, we have had no form of consulting or recruiting agreement with you. [¶] Further, as you know, the Contact section of Aquantia’s website states explicitly that ‘Aquantia Corp. does not accept unsolicited agency resumes and is not responsible for any fees related to unsolicited resumes.’ ”

Delansay’s letter further indicated that Aquantia had already received information about the Eindhoven Team from another source and already decided to explore a potential relationship with the group before receiving plaintiff’s initial communication. The letter ended with the following: “If you believe you have some contractual right to serve as a representative of the Eindhoven engineering team or to receive any fee from them or Aquantia, please provide a copy of such contract to us before end of day Monday December 8, 2014. As things stand now, no such right exists. Thus we ask you to cease communications with Aquantia with regard to the Eindhoven engineering team. We have no need for your services or the services of any intermediary for any discussions we may have with that team, and we have no obligation to arrange any form of fee arrangement with you. Moreover, if you make threats or demands that disrupt potential employment relationships or other forms of commercial arrangement with the Eindhoven engineering team, then Aquantia would hold you liable for interference with its potential business relationships.”

Aquantia immediately informed the Eindhoven Team that it would not continue their discussions and would not hire them.

In a letter to Paulus, dated December 4, 2014,[3] plaintiff stated the following: “I am writing this letter of acknowledgement which relinquishes all of my involvement in my recruiting efforts representing you and your Eindhoven HSC Team (‘Team’), specifically as it relates to any recruiting activities with Aquantia Corp. of Milpitas, CA (‘Aquantia’). [¶] This is my complete and all encompassing relinquishment of any and all future interests in any form from Aquantia including; [sic] placement fees, compensation of any form, or any other financial gain as it relates to the recruitment of the Team with Aquantia. [¶] Furthermore, as of today, I will no longer act as your recruiting representative (intermediary) as it relates to any of your further efforts to secure any potential future employment opportunities with Aquantia. I am completely absolving and removing myself from all your future activities with Aquantia. [¶] As of today I will also no longer communicate or interact in any way with Aquantia, on you or your Team’s behalf. [¶] If there are any additional statements or confirmations that I can offer to you that will allow you to re-engage your earnest employment discussions with Aquantia, please let me know ASAP! l will be happy to assist you in anyway [sic] I can.”

In a deposition, plaintiff confirmed that he had written the December 4, 2014 letter to Paulus. Plaintiff said that he had done so because he had learned from Paulus that Aquantia was not going to hire the Eindhoven team if it had to pay a fee to plaintiff, and Paulus was “under duress and [Paulus] begged [plaintiff] to write this letter.” Plaintiff claimed that Paulus was under duress because “Ramin [had] told [Paulus] that he would rescind all the offers to his team if [plaintiff] was still involved.” According to plaintiff’s deposition testimony, Paulus told him that “Aquantia would be relying on this letter in order to proceed with the hiring of . . . Paulus.” Plaintiff indicated that he had written what Paulus wanted him to write in the letter, but he also acknowledged that he “understood the verbiage.”

Aquantia proceeded with the negotiations and eventual hire of members of the Eindhoven Team in reliance upon the December 4, 2014 letter.

In a letter dated June 9, 2015 from an attorney representing plaintiff, it was asserted that Aquantia was obligated to pay plaintiff “the reasonable value of the services that he rendered” and that Aquantia’s failure to pay could result in litigation. Plaintiff’s invoice for $ 244,700 for his services was attached. This lawsuit was filed July 22, 2015.

B. Standard of Review

“A party may move for summary judgment in an action or proceeding if it is contended that the action has no merit . . . .” (Code Civ. Proc., § 437c, subd. (a)(1)[4].) “Summary judgment is appropriate only ‘where no triable issue of material fact exists and the moving party is entitled to judgment as a matter of law.’ (Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476.)” (Regents of Univeristy of California v. Superior Court (2018) 4 Cal.5th 607, 618 (Regents); see § 437c, subd. (c).)

The motion must be “supported by affidavits, declarations, admissions, answers to interrogatories, depositions, and matters of which judicial notice shall or may be taken.” (§ 437c, subd. (b)(1).) Likewise, “[t]he opposition, where appropriate, shall consist of affidavits, declarations, admissions, answers to interrogatories, depositions, and matters of which judicial notice shall or may be taken.” (§ 437c, subd. (b)(2).) Section 437c, subdivision (d), mandates that “[s]upporting and opposing affidavits or declarations shall be made by a person on personal knowledge, shall set forth admissible evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated in the affidavits or declarations.”

“Evidence presented in opposition to summary judgment is liberally construed, with any doubts about the evidence resolved in favor of the party opposing the motion. (Yanowitz v. LOreal USA, Inc. (2005) 36 Cal.4th 1028, 1037.)” (Regents, supra, 4 Cal.5th at p. 618.) Summary judgment cannot be “granted by the court based on inferences reasonably deducible from the evidence if contradicted by other inferences or evidence that raise a triable issue as to any material fact.” (§ 437c, subd. (c).)

In moving for summary judgment, “[a] defendant . . . has met [the] burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action . . . cannot be established, or that there is a complete defense to the cause of action.” (§ 437c, subd. (p)(2).) If the defendant meets that burden, “the burden shifts to the plaintiff . . . to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.” (Ibid.) “There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850, fn. omitted (Aguilar).) But if the moving party fails to carry its burden, the burden does not shift to the opposing party to show a triable issue of material fact. (See Id. at pp. 850-851; Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768.)

“On review of an order granting or denying summary judgment, we examine the facts presented to the trial court and determine their effect as a matter of law.” (Parsons v. Crown Disposal Co. (1997) 15 Cal.4th 456, 464; see Martinez v. Combs (2010) 49 Cal.4th 35, 68.) “We review the trial court’s decision de novo, considering all of the evidence the parties offered in connection with the motion (except that which the court properly excluded) and the uncontradicted inferences the evidence reasonably supports. [Citation.]” (Merrill v. Navegar, Inc., supra, 26 Cal.4th at p. 476.)

C. Analysis

1. Trial Courts Decision

After the trial court found that Aquantia had met its initial burden of showing that plaintiff’s claims were barred by the doctrines of waiver and estoppel, it determined that plaintiff had failed to raise any triable issue of material fact with respect to those defenses. The court stated: “Plaintiff does not argue or present any evidence showing that Aquantia’s conduct (i.e., its decision to cease negotiations with the Eindhoven Team and refrain from hiring the Eindhoven Team if it meant that he was to receive a recruiting fee) was wrongful. There is no indication that Aquantia was in any way obligated to continue negotiations with or hire the Eindhoven Team. Aquantia was well within its rights to refrain from hiring the Eindhoven Team. Additionally, there is no indication Aquantia acted improperly by informing Paulus of its intentions to cease negotiations and refrain from hiring the Eindhoven Team. The fact that Plaintiff felt morally compelled to relinquish his right to any compensation or claims related to his recruiting efforts in order to allow the Eindhoven Team to obtain employment with Aquantia does not somehow make Aquantia’s conduct wrongful.” The court granted summary judgment.

2. Aquantias Burden of Showing That the Causes of Action Had No Merit

“ ‘ “[W]aiver” means the intentional relinquishment or abandonment of a known right.’ [Citations.] Waiver requires an existing right, the waiving party’s knowledge of that right, and the party’s ‘actual intention to relinquish the right.’ [Citation.] ‘ “Waiver always rests upon intent.” ’ [Citation.] The intention may be express, based on the waiving party’s words, or implied, based on conduct that is ‘ “so inconsistent with an intent to enforce the right as to induce a reasonable belief that such right has been relinquished.” ’ [Citations.]” (Lynch v. California Coastal Com. (2017) 3 Cal.5th 470, 475 (Lynch); see Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 31 [waiver may be implied based on conduct indicating an intent to relinquish a right].) “The waiver of an important right must be a voluntary and knowing act done with sufficient awareness of the relevant circumstances and likely consequences. [Citation.]” (Roberts v. Superior Court (1973) 9 Cal.3d 330, 343.)

In contrast, estoppel “generally requires a showing that a party’s words or acts have induced detrimental reliance by the opposing party. [Citation.]” (Lynch, supra, 3 Cal.5th at pp. 475-476.) “The doctrine of equitable estoppel is founded on concepts of equity and fair dealing. It provides that a person may not deny the existence of a state of facts if he intentionally led another to believe a particular circumstance to be true and to rely upon such belief to his detriment.” (Strong v. County of Santa Cruz (1975) 15 Cal.3d 720, 725.) “Reasonable reliance resulting in a foreseeable prejudicial change in position is the essence of equitable estoppel . . . .” (Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 869.)

Equitable estoppel requires that (1) the party to be estopped was aware of the operative facts and either intended that its act or omission be acted upon, or acted in such a way that the party asserting estoppel rightfully believed it was intended; and (2) the party asserting estoppel was unaware of the facts and relied on the other party’s conduct to its detriment. [Citation.] The party asserting estoppel has the burden to establish these elements. [Citations.]” (Gaines v. Fidelity National Title Ins. Co. (2016) 62 Cal.4th 1081, 1097-1098.) The detrimental reliance of the party asserting estoppel must be reasonable. (See May v. City of Milpitas (2013) 217 Cal.App.4th 1307, 1338.) There can be no estoppel if an element is missing. (Simmons v. Ghaderi (2008) 44 Cal.4th 570, 584.)

Generally, the determination of waiver or estoppel is a question of fact. (Lynch, supra, 3 Cal.5th at p. 476; Platt Pacific, Inc. v. Andelson (1993) 6 Cal.4th 307, 319.) But “where the uncontradicted facts established through discovery are susceptible of only one legitimate inference, summary judgment is proper. [Citation.]” (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1112; see Platt Pacific, Inc., supra, at p. 319 [When “the facts are undisputed and only one inference may reasonably be drawn, the issue [of waiver or estoppel] is one of law”].)

Here, the evidence adduced by Aquantia, including the email messages between plaintiff and Delansay and others at Aquantia and the December 2, 2014 and December 4, 2014 letters, was sufficient to carry its burden of showing that equitable estoppel and waiver were complete defenses to the complaint’s causes of action. The evidence indicated that when plaintiff wrote the December 4, 2014 letter he was aware that Aquantia had rejected his proposal for compensation and was unwilling to negotiate with him and that it had decided to not hire any members of the Eindhoven team if hiring them meant paying him a placement fee. Even if Aquantia had informally indicated to the Eindhoven team that an offer of employment would be forthcoming and then halted hiring plans after plaintiff proposed the terms of his compensation, and even if Aquantia was aware that plaintiff believed that he had earned a placement fee, the evidence presented by Aquantia was sufficient to show that by writing the December 4, 2014 letter, plaintiff waived all claims related to his recruitment efforts and that Aquantia reasonably relied on the letter to hire team members with the expectation that it was not risking any liability to plaintiff.

Plaintiff now asserts that it was “very doubtful” that Aquantia was “ignorant of [his] expectation of [receiving] a recruiting fee from Aquantia.” He also maintains that Aquantia’s claim that he had assured the company that the Eindhoven team had hired him as was stated in Delansay’s declaration, was “disingenuous.” Regardless, Aquantia’s December 2, 2014 letter made clear that it understood that plaintiff wanted compensation for placing team members but that it was unwilling to pay him any fee. The evidence was uncontradicted that plaintiff wrote his December 4, 2014 letter in light of Aquantia’s December 2, 2014 letter to him and his own prior communications with Aquantia,[5] that plaintiff understood that Aquantia would be relying on the letter to hire team members, and that nothing in the letter suggested that plaintiff was nevertheless reserving a right to pursue any claim against Aquantia. (Cf. Oakland Raiders v. Oakland-Alameda County Coliseum, Inc. (2006) 144 Cal.App.4th 1175, 1190-1194 [an undisclosed subjective intent to preserve a fraud claim did not negate defense of equitable estoppel or implied waiver where plaintiff negotiated and executed new agreement without mentioning fraud claim].)

Plaintiff alleged in his complaint, among other things, that “any reliance by [Aquantia] on the [December 4, 2014] letter was not reasonable given that [p]laintiff’s statements in it were diametrically opposed to the claims that he had made one day before and were clearly only a response to [Aquantia’s] oppressive conduct, which constitutes duress, including economic duress.” Plaintiff also claims that his verified complaint “raised sufficient facts . . . indicating that Aquantia knew or should have known that the December 4 letter was in reality the product of Aquantia’s own ultimatum and threats to the Eindhoven team and not an unfettered act of will . . . .” Insofar as plaintiff is now claiming that his complaint anticipated the affirmative defenses of waiver and estoppel and that Aquantia was required to refute allegations of duress (see Bacon v. Southern Cal. Edison Co. (1997) 53 Cal.App.4th 854, 858), the evidence presented by Aquantia did so. That evidence was sufficient to show that plaintiff did not write the letter under economic duress that left him no reasonable alternative for otherwise avoiding his own financial distress. (See Rich & Whillock, Inc. v. Ashton Development, Inc. (1984) 157 Cal.App.3d 1154, 1159-1161 (Rich & Whillock); Leeper v. Beltrami (1959) 53 Cal.2d 195, 205; Rest.2d Contracts, § 175 com. b, pp. 475-478.) The case of McIntosh v. McIntosh (1962) 209 Cal.App.2d 371, which plaintiff cites, is inapt. (See id. at pp. 372-373 [former wife was coerced by ex-husband’s death threats and beating of her to sign a waiver of her alimony award].)

Aquantia made a showing sufficient to shift the burden to plaintiff to show that a triable issue of one or more material facts existed as to the affirmative defenses of waiver and equitable estoppel. (See § 437c, subd. (p)(2).)

3. Plaintiffs Burden to Raise a Triable Issue of Material Fact

Plaintiff argues that he made a sufficient factual showing as to each element of economic duress to withstand the motion for summary judgment.

“California courts have recognized the economic duress doctrine in private sector cases for at least 50 years. (Young v. Hoagland (1931) 212 Cal. 426, 430-432.) The doctrine is equitably based [citation] and represents ‘but an expansion by courts of equity of the old common-law doctrine of duress.’ [Citation.]” (Rich & Whillock, supra, 157 Cal.App.3d at p. 1158, fn. omitted.)

“[T]he law recognizes the concept of economic duress as a basis for vitiating a coerced party’s consent to an agreement. (CrossTalk Productions, Inc. v. Jacobson (1998) 65 Cal.App.4th 631, 644.)” (Tarpy v. County of San Diego (2003) 110 Cal.App.4th 267, 277; see Rest.2d Contracts, § 175, pp. 475-476; CACI No. 333 (2018 ed.) p.145; see also 7 Corbin on Contracts (2018) § 28.8.) A release obtained by economic duress may be voidable and provide no defense to a contract claim. (See Rich & Whillock, supra, 157 Cal.App.3d at pp. 1156, 1160-1161; see also 8 Am. Jur. Proof of Facts 2d 617, § 2.7.)

“[T]he doctrine [of economic duress] . . . may come into play upon the doing of a wrongful act which is sufficiently coercive to cause a reasonably prudent person faced with no reasonable alternative to succumb to the perpetrator’s pressure. [Citations.] The assertion of a claim known to be false or a bad faith threat to breach a contract or to withhold a payment may constitute a wrongful act for purposes of the economic duress doctrine. [Citations.] Further, a reasonably prudent person subject to such an act may have no reasonable alternative but to succumb when the only other alternative is bankruptcy or financial ruin. [Citations.]”[6] (Rich & Whillock, supra, 157 Cal.App.3d at pp. 1158-1159, italics added, citing to Totem Marine Tug & Barge, Inc. v. Alyeska Pipeline Serv. Co. (Alaska 1978) 584 P.2d 15 (Totem Marine); see Totem Marine, supra, at p. 22 [“one essential element of economic duress is that the plaintiff show that the other party by wrongful acts or threats, intentionally caused him to involuntarily enter into a particular transaction”].)

Here we assume arguendo that since equitable estoppel is an equitable doctrine and the equities depend upon particular circumstances, proof of economic duress may under certain circumstances negate a claim of equitable estoppel where the conduct giving rise to the estoppel was induced by economic duress. (See 30 Cal.Jur.3d (2013) Estoppel and Waiver, §§ 1, 3, 4, pp. 819-826.) Even with this assumption, plaintiff has not presented sufficient evidence to raise a triable issue.

Plaintiff acknowledges that he renounced any right to compensation in his December 4, 2014 letter, but he claims that he was responding to the duress exerted against the Eindhoven team by Aquantia. Plaintiff has presented no evidence, and he has not argued, that the letter was procured by duress exerted against him by Aquantia. There was no evidence, for example, that Aquantia threatened to injure his reputation or livelihood as a recruiter unless he wrote the letter. The only possible “threat” made by Aquantia against plaintiff was contained in its December 2, 2014 letter, which stated that it would hold plaintiff “liable for interference with its potential business relationships” if he made “threats or demands that disrupt[ed] potential employment relationships or other forms of commercial arrangement with the Eindhoven engineering team . . . .” Plaintiff is not arguing on appeal, and he did not adduce evidence showing, that Aquantia’s stated intention regarding possible legal action against him constituted economic duress.[7]

Plaintiff has not argued or presented evidence showing that Paulus exacted the December 4, 2104 letter from him by duress.[8] (See Rest.2d Contracts, § 175 com. e, pp. 475-476 [duress by a third person].) Plaintiff stated in his declaration in opposition to the motion for summary judgment, “I could not in my good conscience and moral obligation as a fellow human being ignore Mr. Paulus’ desperate pleas for help to save not only his livelihood, but all of his 9 other colleagues and all their families as well! No less on Holland’s Christmas Eve!” Plaintiff provided no evidence that Aquantia acted unreasonably when it hired members of the Eindhoven team in reliance upon plaintiff’s December 4, 2014 letter because it knew that the letter had been obtained by duress applied to plaintiff.

Rather, plaintiff advances the novel contention that a person who is morally or legally obligated to protect a third person may raise the doctrine of economic duress where economic duress is exerted against that third person and consequently he can assert Paulus’s economic duress. Plaintiff argues that the Eindhoven team was under duress because Aquantia had withdrawn any offer of employment and asserts that he wrote the letter because he feared that pressing the issue of compensation “would have created a financial disaster” for the Eindhoven team.

Assuming arguendo that plaintiff could somehow legally step into the shoes of Paulus or other members of the Eindhoven team to raise a claim of economic duress, he did not provide evidence of all the doctrine’s elements. He did not adduce evidence that Aquantia committed a wrongful act or threat against Paulus or his team. We do not see how Aquantia’s doing what it had a right to do—i.e., rejecting plaintiff’s proposal for a placement fee (20 percent of the first year’s salary of each team member hired) and deciding not to proceed with hiring any of the Eindhoven team if hiring entailed paying a placement fee to plaintiff — constituted legal duress. (See 805 Third Ave. Co. v. M.W. Realty Associates (1983) 58 N.Y.2d 447, 453 [ordinarily, “a party cannot be guilty of economic duress for refusing to do that which it is not legally required to do”]; see also Philippine Export & Foreign Loan Guarantee Corp. v. Chuidian (1990) 218 Cal.App.3d 1058, 1079 [“Language can be found in many decisions that it is not an illegal threat for a person to do ‘ “what he has a legal right to do.” ’ [Citations.]”].) Plaintiff has not cited any authority establishing that an employer’s mere refusal to hire a job candidate, or its mere statement of intent not to hire, constitutes economic duress. He has provided no authority that establishes that such acts are morally reprehensible or that economic or financial hardship alone constitutes economic duress. (Cf. Perez v. Uline, Inc. (2007) 157 Cal.App.4th 953, 960 [“That plaintiff [who was terminated by his employer] did not have a job and needed the money offered under [a severance agreement and release] to pay his bills does not equate to economic duress. The same could be said of almost any case where an employee is discharged and offered severance pay”].)

Even if Aquantia insisted that Paulus procure a letter like the December 4, 2014 letter from plaintiff as a precondition of hiring Paulus and other team members, plaintiff failed to provide sufficient evidence to show that imposition of such a precondition constituted a wrongful act or threat against Paulus or other team members. “An ordinary offer to make a contract commonly involves an implied threat by one party, the offeror, not to make the contract unless his terms are accepted by the other party, the offeree. Such threats are an accepted part of the bargaining process. A threat does not amount to duress unless it is so improper as to amount to an abuse of that process.” (Rest.2d Contracts, § 176, com. a, p. 482.) “Hard bargaining” is “desirable, in our economic system.” (Rich & Whillock, supra, 157 Cal.App.3d at p. 1159.)

In addition, the letter from plaintiff to Paulus appears favorable to the interests of Paulus and the other Eindhoven team members in that it facilitated their employment and appears protective against any legal claim against them by plaintiff. There was no evidence that Paulus or the other team members were seeking to avoid the legal consequences of the December 4, 2014 letter on the ground of economic duress. Neither did plaintiff show that in seeking to avoid equitable estoppel based on the letter, plaintiff was acting on behalf of Paulus and his team under a fiduciary or other legal duty to them.

Even if the general doctrine of duress might apply where a wrongful threat concerning a third party is made to an individual who cares about the third party to coerce the threatened individual to do something (see Rest.2d Contracts, § 176, com. c, illus. 5, p. 484 [threat of pursuing a criminal prosecution against a friend induced threatened individual to become a surety on the promissory note executed by the friend]), plaintiff has failed to provide evidence that he was wrongfully threatened in that manner. His mere belief that he had a moral imperative to write the letter did not establish that he was acting under such duress.

We conclude that plaintiff failed to raise a triable issue of material fact as to economic duress and the affirmative defense of equitable estoppel. In light of our conclusion, we find it unnecessary to additionally resolve whether plaintiff presented sufficient evidence to raise a triable issue regarding waiver. Summary judgment was properly granted.

DISPOSITION

The judgment is affirmed.

_________________________________

ELIA, ACTING P. J.

WE CONCUR:

_______________________________

BAMATTRE-MANOUKIAN, J.

_______________________________

MIHARA, J.

Andrieu v. Aquantia Corporation

H044638


[1] “ ‘Although material facts are known to one party and not the other, failure to disclose them is ordinarily not actionable fraud unless there is some fiduciary relationship giving rise to a duty to disclose.’ [Citations.]” (Weiner v. Fleischman (1991) 54 Cal.3d 476, 483; see Foster v. Xerox Corp. (1985) 40 Cal.3d 306, 309-310 [“[T]he failure to disclose facts may constitute fraud if the party with knowledge has a duty to make disclosure. [Citations.]”].)

[2] Plaintiff wrote email messages in italics, which we omit.

[3] In his declaration in opposition to summary judgment, plaintiff indicated that he actually wrote the letter, dated December 4, 2014, and sent an identical email “close to 1:00 a.m.” on December 5, 2014. We will refer to the letter as the December 4, 2014 letter.

[4] All further statutory references are to the Code of Civil Procedure unless otherwise stated.

[5] In his declaration in opposition to the motion for summary judgment, plaintiff indicated that on December 3, 2014, he sent Aquantia a letter and “vigorously refuted, point-by-point, [its] cease & desist letter . . . .”

[6] The Restatement Second of Contracts establishes a subjective test for economic duress. (See Rest.2d Contracts, § 175, com. c, p. 478 [“In order to constitute duress, the improper threat must induce the making of the contract,” and “although it is not essential that a reasonable person would have believed that the maker of the threat had the ability to execute it, this may be relevant in determining whether the threat actually induced assent”].)

[7] Restatement Second of Contracts, section 176, comment d, states: The policy in favor of free access to the judicial system militates against the characterization as improper of threats to commence civil process, even if the claim on which the process is based eventually proves to be without foundation. Nevertheless, if the threat is shown to have been made in bad faith, it is improper. Bad faith may be shown by proving that the person making the threat did not believe there was a reasonable basis for the threatened process, that he knew the threat would involve a misuse of the process or that he realized the demand he made was exorbitant. . . . However, a threat to commence civil process, even if improper, may not amount to duress since defense of the threatened action is often a reasonable alternative. . . .” In California, it has been said that “the taking of legal action or the threat to take such action cannot constitute [economic] duress[] [citations]” unless “the action taken or threatened involves the assertion of claims known to be false . . . . [Citations.]” (Louisville Title Ins. Co. v. Surety Title & Guar. Co. (1976) 60 Cal.App.3d 781, 801; see Sistrom v. Anderson (1942) 51 Cal.App.2d 213, 221.)

[8] In addition to showing a wrongful act or threat, plaintiff would have needed to present evidence that he had no reasonable alternative to writing the letter. (See Rest.2d Contracts, § 175, com. b, p. 476 [“A threat, even if improper, does not amount to duress if the victim has a reasonable alternative to succumbing and fails to take advantage of it”].)





Description Plaintiff Jean Baptiste de Saint Andrieu, a technical recruiter, filed a verified complaint against defendant Aquantia Corporation (Aquantia) seeking to recover in quantum meruit for his presentation of a team of prospective employees (the Eindhoven team) to Aquantia, which hired them. The complaint also sought damages for alleged concealment by Aquantia. It contained three causes of action: (1) common count (implied-in-law contract to pay for services rendered); (2) common count (implied-in-law contract to pay for benefits mistakenly conferred); and (3) concealment (intentional failure to disclose facts). The trial court granted Aquantia’s motion for summary judgment based on its affirmative defenses of waiver and estoppel after determining that plaintiff had failed to raise a triable issue of material fact.
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