Dompatci Management Solutions v. Vensure HR Inc. ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 DOMPATCI MANAGEMENT No. 2:17-cv-02399-KJM-AC SOLUTIONS, 12 Plaintiff, 13 ORDER 14 v. 15 VENSURE HR, INC., et al., 16 Defendants. 17 18 In this breach of contract case, defendant Vensure moves for summary judgment 19 on all of plaintiff Dompatci’s claims. For the reasons below, the court GRANTS defendant’s 20 motion in part. 21 I. BACKGROUND 22 On January 9, 2014, Dompatci Management Solutions (“Dompatci”), a temporary 23 employee provider, contracted with Vensure, a “Professional Employment Organization,” for the 24 provision of services related to Dompatci’s temporary employees, including payroll services and 25 the procurement of workers’ compensation insurance. Mot. for Summ. J. (“Mot.”), ECF No. 40-1, 26 at 5–6; Compl. ¶¶ 9–10, 16, 23, ECF No. 1-1. It is undisputed that the governing contract 27 between the parties is the Client Services Agreement (CSA), which is attached to the complaint 28 1 and to Vensure’s motion for summary judgment. Compl. ¶ 9 & Ex. A (“CSA”); Pittard Decl., Ex. 2 A, ECF No. 40-3. It is also undisputed that, while the CSA was in effect, an error occurred on at 3 least one occasion that caused several Dompatci employees’ paychecks to bounce. Statement of 4 Undisputed Facts (SUF) 8–10, ECF No. 40-2; Compl., Ex. B (letter from Vensure to Dompatci). 5 The parties disagree over Vensure’s response to the error. Compare Holmes Decl. ¶¶ 2–3, ECF 6 No. 47 (stating Vensure failed to provide paychecks and “bounced checks on multiple occasions 7 with fees that were then covered by Dompatci.”), with Pittard Decl. ¶¶ 14–15 (stating Vensure 8 contacted Dompatci regarding the error, and issued corrected paper checks to the affected 9 employees, per Dompatci’s request). A letter from Vensure to Dompatci attached to Dompatci’s 10 complaint suggests that, on at least one occasion, Vensure communicated with Dompatci about 11 the error and offered to pay the associated fees. Compl., Ex. B. Dompatci alleges that, as a result 12 of this error and several others, including Vensure’s alleged failure to secure the correct workers’ 13 compensation policy, Dompatci lost two lucrative contracts with FedEx and Comcast. Opp’n 14 ¶¶ 2–4; Compl. ¶¶ 38, 48. 15 On August 10, 2017, Dompatci filed the instant complaint in state court alleging 16 claims against Vensure for: (1) breach of contract; (2) negligent interference with economic 17 relationship (as to FedEx); (3) negligent interference with economic relationship (as to Comcast); 18 (4) intentional interference with economic relations (as to FedEx); (5) intentional interference 19 with economic relations (as to Comcast); (6) intentional misrepresentation of fact; and (7) fraud 20 and deceit. Compl. at 3–15. On November 14, 2017, defendants removed the case to this court 21 based on diversity jurisdiction. Not. of Removal, ECF No. 1, at 1. 22 Although neither party cites a specific provision of the CSA that Vensure allegedly 23 breached, the following two provisions are the most relevant to Dompatci’s claims: 24 In exchange for receipt of the Combined Total Fees . . . VENSURE shall provide CLIENT with administrative services which include, 25 but are not limited to: issuing payroll checks, withholding and paying 26 all applicable federal, state, and local payroll taxes; processing garnishments and unemployment claims and inquiries related 27 thereto; generating W2’s [sic]; obtaining, through a licensed insurance agent, and administering CLIENT’s workers’ 28 1 compensation coverage and any other non-obligatory benefits which CLIENT wishes to provide its employees. 2 3 CSA at 40, ¶ 2. 4 VENSURE shall secure for CLIENT, workers’ compensation 5 insurance, through a properly licensed insurance agency, and shall perform all employer administrative tasks associated with the policy 6 of insurance, including, but not limited to, the reconciliation, reporting and payment of payroll and premium to the Insurer. 7 8 CSA at 44, ¶ 6a. 9 On June 21, 2019, approximately two months after the close of fact discovery, 10 Vensure filed the instant motion for summary judgment on all Vensure’s claims against it. Mot., 11 ECF No. 40; Am. Sched. Order, ECF No. 37 (“All discovery shall be completed by April 30, 12 2019). Dompatci opposed the motion, Opp’n, ECF No. 46, but agreed to dismiss its second and 13 third claims. Joint Report ¶ 2, ECF No. 43.1 Vensure replied. Reply, ECF No. 49. The court 14 heard oral argument on the motion on November 6, 2019, and resolves it here. 15 II. LEGAL STANDARD 16 A court will grant summary judgment “if . . . there is no genuine dispute as to any 17 material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). 18 The “threshold inquiry” is whether “there are any genuine factual issues that properly can be 19 resolved only by a finder of fact because they may reasonably be resolved in favor of either 20 party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986).2 21 22 23 1 As Vensure points out in its Reply, Dompatci failed to comply with Local Rule 260(b), which requires the party opposing a motion for summary judgment to address the movant’s Statement of 24 Undisputed Facts. Though this failure has meant the court has taken more time than it should have had to in order to resolve the matter on the merits, with concomitant delay for the parties, 25 the court has deduced the undisputed facts by comparing defendant’s list of undisputed facts to 26 plaintiff’s narrative of facts in opposition and corresponding evidence. 27 2 Rule 56 was amended, effective December 1, 2010. However, it is appropriate to rely on cases decided before the amendment took effect, as “[t]he standard for granting summary judgment 28 remains unchanged.” Fed. R. Civ. P. 56, Notes of Advisory Comm. on 2010 amendments. 1 The moving party bears the initial burden of showing the district court “that there 2 is an absence of evidence to support the nonmoving party’s case.” Celotex Corp. v. Catrett, 3 477 U.S. 317, 325 (1986). The burden then shifts to the nonmoving party, which “must establish 4 that there is a genuine issue of material fact . . . .” Matsushita Elec. Indus. Co. v. Zenith Radio 5 Corp., 475 U.S. 574, 585 (1986). In carrying their burdens, both parties must “cit[e] to particular 6 parts of materials in the record . . .; or show [] that the materials cited do not establish the absence 7 or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to 8 support the fact.” Fed. R. Civ. P. 56(c)(1); see also Matsushita, 475 U.S. at 586 (“[the 9 nonmoving party] must do more than simply show that there is some metaphysical doubt as to the 10 material facts”). Moreover, “the requirement is that there be no genuine issue of material fact 11 . . . . Only disputes over facts that might affect the outcome of the suit under the governing law 12 will properly preclude the entry of summary judgment.” Anderson, 477 U.S. at 247–48 13 (emphasis in original). 14 In deciding a motion for summary judgment, the court draws all inferences and 15 views all evidence in the light most favorable to the nonmoving party. Matsushita, 475 U.S. at 16 587–88; Whitman v. Mineta, 541 F.3d 929, 931 (9th Cir. 2008). “Where the record taken as a 17 whole could not lead a rational trier of fact to find for the non-moving party, there is no ‘genuine 18 issue for trial.’” Matsushita, 475 U.S. at 587 (quoting First Nat’l Bank of Arizona v. Cities Serv. 19 Co., 391 U.S. 253, 289 (1968)). 20 The Supreme Court has taken care to note that district courts should act “with 21 caution in granting summary judgment,” and have authority to “deny summary judgment in a case 22 where there is reason to believe the better course would be to proceed to a full trial.” Anderson, 23 477 U.S. at 255. A trial may be necessary “if the judge has doubt as to the wisdom of terminating 24 the case before trial.” Gen. Signal Corp. v. MCI Telecommunications Corp., 66 F.3d 1500, 1507 25 (9th Cir. 1995) (quoting Black v. J.I. Case Co., 22 F.3d 568, 572 (5th Cir. 1994)). This may be 26 the case “even in the absence of a factual dispute.” Rheumatology Diagnostics Lab., Inc v. Aetna, 27 Inc., No. 12-05847, 2015 WL 3826713, at *4 (N.D. Cal. June 19, 2015) (quoting Black, 22 F.3d 28 at 572); accord Lind v. United Parcel Serv., Inc., 254 F.3d 1281, 1285 (11th Cir. 2001). 1 III. DISCUSSION 2 A. Applicable State Law 3 Because this court has diversity jurisdiction over plaintiffs’ state-law contract 4 claims, the court must apply state substantive law to the interpretation of the contract. Erie R. Co. 5 v. Tompkins, 304 U.S. 64, 78 (1938). In order to decide which state’s law applies, the court uses 6 the choice-of-law rules of the forum state, California. Costco Wholesale Corp. v. Liberty Mut. 7 Ins. Co., 472 F. Supp. 2d 1183, 1197 (S.D. Cal. 2007) (citing, inter alia, Klaxon Co. v. Stentor 8 Elec. Mfg. Co., 313 U.S. 487, 496 (1941)). 9 1. Enforceability of Choice-of-Law Provision 10 Vensure argues Dompatci’s claims should be governed by Arizona law, because 11 the two parties’ CSA contains an Arizona choice-of-law provision. CSA ¶ 13. California follows 12 section 187 of the Second Restatement of Conflict of Laws, which states that a contractual 13 choice-of-law provision generally will be enforced as long as “the chosen state has a substantial 14 relationship to the parties or their transaction, or [] there is any other reasonable basis for the 15 parties’ choice of law.” Nedlloyd Lines B.V. v. Superior Court, 3 Cal. 4th 459, 466 (1992) (citing 16 Restatement (Second) of Conflict of Laws § 187 (1971)). If either test is met, “the court must 17 next determine whether the chosen state’s law is contrary to a fundamental policy of California,” 18 and, if so, whether California has “a materially greater interest than the chosen state in the 19 determination of the particular issue.” Id. (emphasis in original) (citation omitted). 20 Here, there is a substantial relationship to justify using Arizona law, because 21 Vensure is “organized, incorporated and has its principal place of business in Arizona.” Mot. at 22 8; Compl. ¶ 3 (Vensure is an Arizona corporation doing business in California), ECF No. 1-1; 23 Wright v. Freedom Mortg. Corp., No. 09-CV-630 JLS (POR), 2009 WL 10671337, at *2 (S.D. 24 Cal. May 26, 2009) (substantial relationship exists where defendant organized under chosen 25 state’s laws and had principal place of business there) (citing Nedlloyd, 3 Cal. 4th 467); 26 Restatement (Second) of Conflict of Laws § 187, cmt. f (substantial relationship exists where one 27 party has its principal place of business in the chosen state). Neither party has identified any 28 aspect of relevant Arizona law that is contrary to a fundamental policy of California, and plaintiff 1 was unable to do so when asked at hearing. Bard Water Dist. v. James Davey & Assocs., Inc., 2 No. 13CV2727 JM (PCL), 2018 WL 1177522, at *4 (S.D. Cal. Mar. 5, 2018) 3 (“Because Arizona law has not been identified as being contrary to a fundamental policy 4 of California, the court will enforce the parties’ choice of law provision.”). Accordingly, unless 5 an exception applies as discussed below, Arizona law governs Dompatci’s claims against 6 Vensure, because all the claims at issue are related to the CSA. See PAE Gov’t Servs., Inc. v. 7 MPRI, Inc., 514 F.3d 856, 860 (9th Cir. 2007) (citing Nedlloyd, 3 Cal. 4th at 470 (agreement’s 8 choice-of-law clause applies to “all causes of action arising from or related to that agreement”)); 9 Olinick v. BMG Entm’t, 138 Cal. App. 4th 1286, 1300 (Ct. App. 2006) (choice-of-law clause 10 applies to claims that are “inextricably intertwined with the construction and enforcement” of 11 contract)). 12 2. Contracts of Adhesion 13 There is an exception to the substantial relationship test if the choice-of-law 14 provision is contained in a contract of adhesion, “namely one that is drafted unilaterally by the 15 dominant party and then presented on a ‘take-it-or-leave-it’ basis to the weaker party who has no 16 real opportunity to bargain about its terms.” Scarpone v. Empire Blue Cross Blue Shield, No. C- 17 95-2094 MHP, 1996 WL 231026, at *4 (N.D. Cal. Apr. 29, 1996) (quoting Restatement (Second), 18 Conflicts of Law § 187 cmt. b (1971)). Under this exception “the weaker party to an adhesion 19 contract may seek to avoid enforcement of a choice-of-law provision therein by establishing that 20 ‘substantial injustice’ would result from its enforcement or that superior power was unfairly used 21 in imposing the contract” Washington Mut. Bank, FA v. Superior Court, 24 Cal. 4th 906, 918 22 (2001) (citations omitted). 23 Dompatci argues the choice-of-law provision should not be enforced because its 24 contract with Vensure was one of adhesion. See Opp’n ¶ 12. Dompatci is potentially equitably 25 estopped from making this argument, given that it is suing for enforcement of the very contract 26 containing the choice-of-law provision. Comer v. Micor, Inc., 436 F.3d 1098, 1101 (9th Cir. 27 2006) (“Equitable estoppel ‘precludes a party from claiming the benefits of a contract while 28 simultaneously attempting to avoid the burdens that contract imposes.’” (citation omitted)). But 1 the court need not decide that question, because Dompatci does not provide sufficient evidence to 2 show that enforcing the choice-of-law provision would result in “substantial injustice” or that 3 Dompatci’s agreement was improperly obtained. In its opposition, Dompatci argues it was forced 4 to accept the contract with Vensure, because Advance, its previous contractor, ceased its work for 5 Dompatci and told Dompatci it was “required” to do business with Vensure instead. Opp’n ¶ 12. 6 Dompatci adds that Vensure is a large corporation, while Dompatci was a “small mom and pop 7 shop” at the time, so the power dynamic was unequal. Id. The only evidence to support this 8 argument is a declaration by Dompatci’s CEO stating simply, “Plaintiff was told by Advance that 9 they had to work with Vensure to provide the services previously provided by Advance.” Holmes 10 Decl. ¶ 7, ECF No. 47. Dompatci’s mere argument that it was a smaller company than Vensure 11 and that Advance pressured Dompatci into contracting with Vensure is insufficient for the court 12 to find the choice-of-law provision unenforceable here. Tuttle v. Sky Bell Asset Mgmt., LLC, No. 13 C 10-03588 WHA, 2011 WL 4596003, at *2 (N.D. Cal. Sept. 13, 2011) (placing burden on 14 plaintiff to show forum selection clause should not be enforced); Foster v. Chesapeake Ins. Co., 15 933 F.2d 1207, 1219 (3d Cir. 1991) (“That there may not have been actual negotiations over the 16 clause does not affect its validity.”) (citing Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 17 (1991)). The court will apply Arizona law to Dompatci’s claims. 18 B. Breach of Contract Claim (Claim One) 19 The elements of a breach of contract claim are: (1) the existence of a contract; 20 (2) breach; and (3) resulting damages. See First Am. Title Ins. Co. v. Johnson Bank, 239 Ariz. 21 348, 353 (2016) (citing Graham v. Asbury, 112 Ariz. 184, 185 (1975)). The existence of a 22 contract is not disputed here. As for the second element, Vensure has met its initial burden of 23 demonstrating the lack of evidence for Dompatci’s breach of contract claim by providing a 24 declaration from its Vice President of Operations describing Vensure’s compliance with the 25 contract. Pittard Decl. ¶¶ 6, 8, 9, 12–17, ECF No. 40-3; see also Celotex, 477 U.S. at 325 26 (describing movant’s burden on summary judgment). Accordingly, the burden shifts to Dompatci 27 to present specific facts showing a genuine issue of material fact for trial. Matsushita, 475 U.S. at 28 587. 1 In its verified complaint, Dompatci alleges Vensure breached the parties’ contract 2 in several ways: (1) failing to “provide good funds for the payment of Plaintiffs [sic] temporary 3 employees,” Compl. ¶ 12, “provide payroll on time, unilaterally cancelling employees [sic] direct 4 deposit requests, and [] failing to pay the temporary employees” with respect to the FedEx 5 account, id. ¶ 19; see also id. ¶ 15; (2) failing to “properly bill FedEx,” id. ¶¶ 15, 19; and (3) 6 failing to “select the appropriate workers compensation insurance for Plaintiffs [sic] temporary 7 employees and overcharg[ing] Plaintiff for the wrong coverage” with respect to both the FedEx 8 and Comcast accounts, id. ¶¶ 13–15, 19–20. Vensure moves for summary judgment, arguing 9 there is no evidence to contradict the declaration of Vensure’s VP of Operations averring Vensure 10 fulfilled the terms of the contract. Mot. at 9.3 11 1. Billing and Payroll Issues 12 According to the verified complaint and a declaration of Dompatci’s CEO, 13 Vensure paid employees late, caused payroll checks to bounce, and “unilaterally took temp 14 associates off of direct deposits,” causing injury to Dompatci. Holmes Decl. ¶¶ 3, 6; Compl. 15 ¶¶ 10, 15. However, nowhere in the complaint, the opposition, the Holmes declaration nor at 16 hearing, did Dompatci identify a provision of the parties’ contract that Vensure breached by doing 17 so. See Compl. ¶ 10 (stating, without reference to the CSA, “Vensure was to collect the money 18 paid to Plaintiff . . . pay the temporary employees hired by Plaintiff, secure and pay for workers 19 compensation insurance . . . . and remit any profits thereafter to Plaintiff.”). Nor does Dompatci 20 argue that Vensure breached an implied covenant, such as a covenant of good faith and fair 21 dealing. See Compl. ¶¶ 8–9 (describing “contract that is the subject of this action” as Ex. A, the 22 CSA); see also Bike Fashion Corp. v. Kramer, 202 Ariz. 420, 423 (2002) (every contract includes 23 “an implied covenant of good faith and fair dealing”). The most relevant contractual provisions 24 require Vensure to “provide [Dompatci] with administrative services which include, but are not 25 limited to: issuing payroll checks[.]” CSA ¶ 2. The language of the contract is not specific 26 3 Vensure’s summary judgment motion is often worded like a motion to dismiss. See, e.g., Mot. 27 at 9 (“Plaintiff has failed to plead the facts necessary to support a claim for breach of contract[.]”). As the motion is framed as one for summary judgment, the court construes it as 28 such. 1 regarding how Vensure was required to issue payroll checks or whether the checks were to be 2 issued in accordance with a certain timetable. 3 Vensure has successfully shown there is a lack of evidence supporting the second 4 element of a breach-of-contract claim: breach of an existing contract. Underwood, 1999 WL 5 430138, at *1 (“A conclusory statement asserting an absence of evidence will not suffice to meet 6 this standard; the lack of evidence must be demonstrated.”). There is no genuine dispute of 7 material fact regarding whether Vensure breached the CSA with respect to its payroll errors, and 8 therefore summary judgment must be granted in Vensure’s favor. See Weinberg v. Whatcom 9 Cty., 241 F.3d 746, 751 (9th Cir. 2001) (“Where discovery has been completed, summary 10 judgment is appropriate when a party challenged by motion fails to offer evidence supporting an 11 element of a claim on which that party bears the burden of proof at trial.” (citing Celotex Corp., 12 477 U.S. at 322–24)). 13 The same is true of the claim that Vensure breached the contract by failing to 14 properly bill FedEx. Compl. ¶¶ 15, 19. Neither party has identified a provision of the CSA 15 requiring Vensure to bill Dompatci’s clients, and the court has not located one in its own review 16 of the CSA. There is no genuine factual dispute regarding whether Vensure’s billing errors 17 breached the CSA. 18 Finally, for the first time in opposition, Dompatci argues a theory of liability not 19 encompassed by the complaint, namely that Vensure breached the CSA by failing to “provide the 20 appropriate billing information to Advance so that they could properly process bills and rebills to 21 all end clients of Dompatci.” Opp’n ¶ 5; Holmes Decl. ¶¶ 11–12. Again, Dompatci has identified 22 no provision of the CSA that required Vensure to provide information to Advance. There is no 23 genuine dispute of material fact as to a breach of contract on this basis either. 24 2. Workers’ Compensation Insurance Issues 25 Similarly, Dompatci relies on its verified complaint and its CEO’s declaration to 26 support the allegations Vensure “did not select the proper insurance with regard to the Comcast 27 contract,” Holmes Decl. ¶ 10, and failed to “select the appropriate workers compensation 28 1 insurance for Plaintiffs [sic] temporary employees and overcharged Plaintiff for the wrong 2 coverage” with respect to the FedEx and Comcast business, Compl. ¶¶ 13–15, 19–20; see also 3 Holmes Decl. ¶ 13. Again, Dompatci does not identify a provision in the contract Vensure 4 breached. The most relevant provision in the CSA states: 5 VENSURE shall secure for CLIENT, workers’ compensation insurance, through a properly licensed insurance agency, and shall 6 perform all employer administrative tasks associated with the policy 7 of insurance, including, but not limited to, the reconciliation, reporting and payment of payroll and premium to the Insurer. 8 9 CSA ¶ 6a. Dompatci’s vague allegation that the purchased insurance was not “appropriate” or 10 provided the “wrong coverage,” does not support a viable breach-of-contract claim, as it does not 11 describe a specific breach of the contract language above. At this stage in the litigation, with 12 discovery completed, Dompatci must be able to point to evidence in the form of specific 13 admissible facts creating a genuine issue for trial. Soremekun v. Thrifty Payless, Inc., 509 F.3d 14 978, 984 (9th Cir. 2007) (“Conclusory speculative testimony in affidavits and moving papers is 15 insufficient to raise genuine issues of fact and defeat summary judgment.”). Dompatci has failed 16 to do so here, and therefore summary judgment must be granted in Vensure’s favor on the breach- 17 of-contract claims. 18 3. Conclusion 19 For the reasons described above, Vensure’s motion for summary judgment is 20 GRANTED with respect to Dompatci’s breach of contract claims against it. 21 C. Tortious Interference with Contractual Relationship Claims (Claims Four and Five) 22 23 In addition to the breach of contract claims, Dompatci also brings two claims for 24 “tortious interference with economic relations” regarding the FedEx and Comcast contracts, 25 respectively. Compl. at 8–12. Vensure argues the claims are more accurately described as 26 “tortious interference with contractual relationship or business expectancy.” Mot. at 12. 27 Regardless of the precise title, both claims require: “(1) the existence of a valid contract or 28 1 business expectancy; (2) the defendant’s knowledge thereof; (3) intentional interference inducing 2 or causing a breach or termination thereof; and (4) damages.” Mortensen v. Gust Rosenfeld, PLC, 3 No. 1 CA-CV 14-0262, 2015 WL 6472368, at *7 (Ariz. Ct. App. Oct. 27, 2015) (elements for 4 tortious interference with economic relations) (citation omitted); see also Helal v. Winski, No. 1 5 CA-CV 14-0201, 2015 WL 8927725, at *7 (Ariz. Ct. App. Dec. 15, 2015) (listing same elements 6 for “tortious interference with contractual relations or business expectancy” claims). “[T]he 7 interference must be improper as to motive or means before liability will attach” Wallace v. Casa 8 Grande Union High Sch. Dist. No. 82 Bd. of Governors, 184 Ariz. 419, 427 (Ariz. Ct. App. Div. 9 1995) (internal quotations marks and citation omitted). 10 Dompatci’s allegations with respect to the FedEx contract incorporate many of the 11 same billing and payroll issues identified above. See Compl. ¶ 37. With respect to the Comcast 12 contract, Dompatci again alleges simply that Vensure “secured the wrong workers compensation 13 to cover the temporary workers doing work at Comcast.” Id. ¶ 47. 14 Vensure has met its initial burden on summary judgment of showing the absence 15 of evidence suggesting Vensure had an improper motive or means by which it interfered with 16 either contract. Vensure offers the declaration of its VP of Operations, as well as a letter from 17 Vensure to Dompatci attached to Dompatci’s complaint, both of which support the narrative that 18 Vensure made a “banking error” which caused a group of employees’ checks to bounce, it 19 communicated with Dompatci about the mistake, and it offered to pay the associated fees. Pittard 20 Decl. ¶¶ 13–15; Compl., Ex. B, ECF No. 1-1, at 57 (letter from Vensure to Dompatci regarding 21 “Notification of Banking Error”). As to Dompatci’s other allegations, the Pittard declaration 22 states “Vensure procured and provided adequate workers’ compensation insurance to Dompatci’s 23 employees and charged Dompatci the appropriate amount for the coverage” and Vensure 24 “fulfilled all terms of the contract” it had with Dompatci. Pittard Decl. ¶¶ 8, 16, 17; see also Fed. 25 Trade Comm’n v. Marshall, No. 17-56476, 2019 WL 3202772, at *1 (9th Cir. July 16, 2019) 26 (finding court must still consider self-serving declaration where “it contained some statements 27 that were based on personal knowledge, legally relevant, and internally consistent.” (citation and 28 internal quotations omitted)). Therefore, the burden shifts to Dompatci to present evidence 1 showing there is a genuine issue of material fact as to whether Vensure acted intentionally, with 2 improper means or motive, to interfere with Dompatci’s contracts. Matsushita, 475 U.S. at 587. 3 Dompatci has not met this burden. The “improper” element required for a tortious 4 interference with contractual relations claim “generally is determined by weighing the social 5 importance of the interest the defendant seeks to advance against the interest invaded.” 6 Neonatology Assocs., Ltd. v. Phoenix Perinatal Assocs. Inc., 216 Ariz. 185, 188 (Ct. App. 2007) 7 (citing Safeway Ins. Co. v. Guerrero, 210 Ariz. 5, 11 (2005)). Arizona courts consider the seven 8 factors listed in section 767 of the Restatement (Second) of Torts (1979): 9 (a) the nature of the actor’s conduct, 10 (b) the actor’s motive, (c) the interests of the other with which the actor's conduct interferes, 11 (d) the interests sought to be advanced by the actor, (e) the social interests in protecting the freedom of action of the actor 12 and the contractual interests of the other, (f) the proximity or remoteness of the actor’s conduct to the 13 interference and 14 (g) the relations between the parties. 15 Id. (citation omitted). 16 Dompatci does not make any argument in its opposition with respect to the 17 impropriety of Vensure’s motive or means. In its verified complaint, Dompatci lists the “wrongs” 18 allegedly committed by Vensure including the allegation that Vensure was made aware of the 19 bounced paychecks problem and failed to correct it, Compl. ¶ 37, which may support an inference 20 the error was intentional but does not suggest it was improperly motivated or carried out. Other 21 than conclusory statements, see id. ¶ 41 (“Defendant knew of this Contract and Committed 22 intentional acts designed to induce a disruption of the contract . . . .”), and recitations of the law, 23 id. ¶¶ 42–43 (stating legal standards regarding requirement of intent under California law), 24 Dompatci’s only evidence in support of the element of intent with improper motive or means is 25 its CEO’s declaration, which states, in relevant part: 26 12. Plaintiff has reason to believe that these were intentional acts as the amount of time that it took for Defendant to correct their 27 mistakes was vast. The delay in providing the needed information to 28 Advance prevented Dompatci from collecting on its contracts with 1 its vendors which ultimately resulted in Dompatci closing its doors, as it was not able to continue to operate. 2 13. Defendant was overcharging Plaintiff for workers 3 compensation services and did so on more than one occasion. 4 Plaintiff believes it can show this by demonstrating corrections that Plaintiff sought and obtained from Defendant and through 5 competitive bids from other companies 6 Holmes Decl. ¶¶ 12–13. Again, Dompatci’s CEO raises the issue of Vensure’s alleged failure to 7 provide information to Advance, which was not pleaded in the complaint. Even assuming this 8 allegation can now form the basis for claims four and five, Dompatci’s evidence is insufficient to 9 create a genuine dispute of material fact. The delay in Vensure’s response to its errors and 10 Vensure’s “overcharging” Dompatci by an unspecified amount on “more than one occasion” is 11 not sufficiently particularized or developed to raise an inference that Vensure’s actions were 12 improper. Dompatci’s evidence is simply too vague to raise a genuine issue of material fact as to 13 the element of impropriety. Accordingly, summary judgment is GRANTED in Vensure’s favor 14 as to claims four and five. 15 D. Fraud Claims (Claims Six and Seven) 16 Dompatci’s sixth and seventh claims against Vensure are, respectively, for 17 “intentional misrepresentation of fact” and “fraud and deceit.” Compl. at 12–13. These claims 18 are premised on the allegation that Vensure falsely represented it “could handle the bookkeeping, 19 accounting, billing, payment of workers, and purchasing of workers compensation insurance on 20 behalf of Dompatci,” when, in fact, it could not. Compl. ¶¶ 56–57, 62–63. Both are essentially 21 are claims for fraud, which requires the following elements: 22 (1) A representation; (2) its falsity; (3) its materiality; (4) the speaker’s knowledge of its falsity or ignorance of its truth; (5) his 23 intent that it should be acted upon by the person and in the manner 24 reasonably contemplated; (6) the hearer’s ignorance of its falsity; (7) his reliance on its truth; (8) his right to rely thereon; (9) his 25 consequent and proximate injury. 26 Nielson v. Flashberg, 101 Ariz. 335, 338–39 (1966). 27 Vensure only attacks the sufficiency of Dompatci’s evidence by arguing “the facts 28 show that Vensure at all times acted in accord with the CSA and provided all of the services 1 contracted for.” Mot. at 17. Dompatci offers some evidence to suggest Vensure made repeated 2 mistakes with respect to the bookkeeping, accounting, billing, payment of workers and 3 purchasing of workers’ compensation insurance. See Holmes Decl. ¶¶ 3, 5–6, 10–11 (stating, 4 inter alia, “Defendant, Vensure, did not select the proper insurance with regard to the Comcast 5 contract, as Vensure, Dompatci and Comcast were all sued by a temporary employee who worked 6 at Comcast because the insurance was improperly selected”). Construing the evidence in the light 7 most favorable to Dompatci, there exists a genuine dispute of material fact as to whether Vensure 8 was able to perform in the way it allegedly represented to Dompatci. Therefore, Vensure has not 9 met its burden here of showing the absence of material factual disputes, and summary judgment is 10 improper on these claims. 11 IV. CONCLUSION 12 Vensure’s motion for summary judgment is GRANTED with respect to all claims 13 except claims six and seven. 14 Vensure’s motion for summary judgment as to claims six and seven, is DENIED. 15 This order resolves ECF No. 40. 16 IT IS SO ORDERED. 17 DATED: March 11, 2020. 18 19 20 21 22 23 24 25 26 27 28