Pellitteri v. Wellquest Int'l, Inc.

MARCIA PELLITTERI, Plaintiff and Appellant, v. WELLQUEST INTERNATIONAL, INC., et al., Defendants and Respondents.

B289865

COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION TWO

October 30, 2019

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Los Angeles County Super. Ct. No. BC490541)

APPEAL from a judgment of the Superior Court of Los Angeles County. Mark Mooney, Judge. Affirmed.

Greines, Martin, Stein & Richland and Marc J. Poster; Krane & Smith, Jeremy D. Smith and Daniel Redback for Plaintiff and Appellant.

Steven G. Madison for Defendants and Respondents.

Marcia Pellitteri (appellant) sued Wellquest International, Inc. (Wellquest); Edward Mishan; Michael Ackerman; Knott Direct, Inc.; Emson, Inc.; and E. Mishan & Sons, Inc. (collectively "respondents") for breach of oral and written agreements, breach of fiduciary duty, fraud, and conversion, among other claims.¹ The trial court sustained demurrers to most of appellant's causes of action, with only the breach of written contract cause of action surviving demurrer. The trial court then granted summary judgment in favor of respondents on appellant's breach of written contract claim. Appellant appeals, arguing that the trial court committed error in disposing of her causes of action by sustaining the demurrers and granting summary judgment in respondents' favor.²

We find no reversible error, therefore we affirm the judgment.

FACTUAL BACKGROUND

Appellant's operative second amended complaint (SAC) alleged that she is engaged in the business of "developing new products and shows for retail and wholesale including, but not limited to, television infomercials, and shopping clubs, and print,advertising and catalogues for all marketing venues worldwide and related commercial activities." Since the early 1990's, appellant engaged in various business ventures with respondents Ackerman and Mishan, and their related entities, whereby appellant introduced various products and parties to the respondents, and appellant would work with respondents "to maximize the profitability of the products." Appellant alleged that these business ventures were memorialized by "various written and oral agreements."

Appellant alleged that all respondents are interrelated, and that each is the "employee, agent, principal, officer, partner, joint venturer, alter ego, co-conspirator, director or other representative of one or more of the remaining [respondents]." Appellant further alleged that:

"By written assignment prior to the commencement of this action, [appellant] is a successor in interest and assignee of Progressive Consulting Services, Inc., ('PCS'), a Nevada corporation, to all rights, title and interest PCS may have under agreements that are the subject matter of this Complaint."

Pursuant to the alleged agreements between appellant and respondents, appellant "made introductions of parties and products to [respondents] Ackerman and Mishan and their related entities in consideration for payment of compensation calculated by a percentage of the gross purchases and/or sales of products derived from [appellant's] services." Such payments varied by each venture product, ranging from $.50 per unit to in excess of $1.25 per unit. In addition to these introductions, appellant "contributed her knowledge, skill, expertise and time to maximize the profitability of the products." Appellant's workincluded strategy and marketing of the products. Appellant was not paid a salary for her work. If the products were not purchased or sold, appellant received nothing.

Appellant alleged that in 2002, appellant and respondents entered an oral joint venture agreement memorializing the business relationship set forth above. The joint venture agreement was to remain in effect for the duration of the business relationship between the parties. Appellant alleged that the joint venture agreement was "memorialized by various written and oral agreements and communications between [appellant] and [respondents] Mishan, Ackerman, Wellquest, Emson and their affiliated persons and entities." As an example, appellant referenced a June 13, 2002 email in which respondents Wellquest, Emson and Ackerman agreed not to enter into a contract with a company called Modern Media "until we reach an agreement with Creative Campaigns." Appellant alleged that Creative Campaigns was her entity.

Appellant further alleged that since the agreement in 2002, appellant invested substantial time, money and assets in introducing respondents to parties and products, including "Topstyler, Instyler, Multi-Styler Pro, Superstyler, Magic Bullet, RevoStyler and the Michel Mercier Detangling Brush." During the period from 2002 to 2011, respondents allegedly compensated appellant for her services under the joint venture agreement.

Appellant alleged that in 2011, she discovered that respondents Mishan and Ackerman breached the joint venture agreement by:

"[F]ailing and refusing to pay [appellant] monies due and owing to her for introducing parties and products to them; failing to provide explanations for various payments made by them to [appellant] without anydescription; failing to provide accurate reporting and/or an accounting of purchases and sales of products and other projects derived from the introduced parties; concealing and misrepresenting the amount of purchases and sales of introduced products; misappropriating payments due to [appellant] for themselves, and persons and/or entities they own or control; entering into secret third party arrangements to circumvent their obligations to [appellant] under the Joint Venture Agreement; secretly contracting directly with introduced parties, including, but not limited to, Modern Media and Michel Mercier in order to circumvent their obligations to [appellant]; purporting to reject introductions of products and parties by [appellant] and then contracting directly with the introduced parties (e.g. Michel Mercier); and misappropriating [appellant's] intellectual property and product designs by rejecting products and then developing 'knockoffs' based on [appellant's] engineered drawings including, but not limited to, the Topstyler, to benefit themselves and persons and/or entities they control."

Appellant's fourth cause of action for breach of written contract alleged that on September 10, 2002, PCS and Wellquest entered into a written agreement. The agreement was attached to the SAC as exhibit B. The written agreement listed certain parties, referred to as the "introduced parties," and set forth the agreement by which Wellquest would compensate PCS for the specified parties.³ The agreement further provided that "Should[Wellquest] and any of The Introduced Parties enter into additional Agreements, amendments, etc. for the subject matter herein, [Wellquest] shall first work out its deal with PCS as it did with The Product in this agreement and . . . they shall automatically . . . become a part of this Agreement . . . ." The written agreement included a non-circumvention clause and allowed for assignment, as follows:

"PCS has the right to assign and/or sell its rights in its agreements at any time without any further written notice required. PCS shall notify [Wellquest] of it's [sic] intention to assign it's [sic] rights and [Wellquest] has the right to know the company who will be the assignee and PCS will request that such assignee hold confidential all of the terms and conditions that PCS has with [Wellquest]."

Wellquest had a similar assignment right, and the assignment provision was "binding on all parties and each of their successors, assigns and/or heirs."⁴

The written agreement contemplated that the parties may do business through the use of different entities in the future. Specifically, it provided that "Business with the Introduced Parties" would include products marketed and sold by Wellquest, as well as Wellquest and the introduced parties' "successors, sub-licensees, heirs, assigns, referrals, and companies that now exist and/or that may arise in the future," so long as the rights were assigned in compliance with the written agreement.

The written agreement contained an arbitration clause, as well as a clause specifying that:

"This Agreement constitutes the entire understanding between the parties hereto with respect to the subject matter hereof and supersedes any prior understandings or agreements between the parties hereto with respect thereto. There are no representations, agreements, arrangements or understandings, oral or written, between the parties relating to the subject matter of this Agreement which are not fully expressed herein."

Appellant alleged that the written agreement "did not cover each of the parties or products, which are the subject matter of this SAC."

Appellant's cause of action for breach of the written agreement alleged that Wellquest breached its obligations to appellant under the agreement "by failing and refusing to pay the money due thereunder; by misrepresenting and failing to accountfor the purchases and sales of certain products, shows and projects including, but not limited to, Topstyler, Instyler, Multi-Styler Pro, Superstyler and Magic Bullet; and avoid [sic] paying [appellant] money due thereunder; by entering into undisclosed arrangements with third parties to circumvent the Wellquest Agreement; and by misappropriating [appellant's] intellectual property and product designs including, but not limited to, the Topstyler, to benefit themselves and persons and/or entities they own and control, to the exclusion of [appellant]."

In her cause of action for fraud, appellant alleged that respondents represented to her that they could be trusted, would...