Mossimo Holdings LLC v. Harry Haralambus et al

Filing 157

ORDER GRANTING THIRD-PARTY DEFENDANT VICTOR SIASATS MOTION FOR SUMMARY JUDGMENT 117 AND VACATES ALL PENDING MOTIONS. (SEE DOCUMENT FOR SPECIFICS) by Judge Dean D. Pregerson. MD JS-6. Case Terminated. (lc)

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JS-6

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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MOSSIMO HOLDINGS, LLC,

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Plaintiff,
v.
HARRY HARALAMBUS, ET AL.,

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Defendants,
THE LAMBUS CORPORATION,
Third-party plaintiff,

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v.
VICTOR SIASAT, et al.,
Third-Party Defendants.

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Case No. CV 14-05912 DDP (JE)

ORDER GRANTING THIRD-PARTY
DEFENDANT VICTOR SIASAT’S
MOTION FOR SUMMARY
JUDGMENT
[Dkt. 117]

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Presently before the court is Third-Party Defendant Victor Siasat’s Motion for

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Summary Judgment. After considering the parties’ submissions and hearing oral

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argument, the court GRANTS the motion and adopts the following Order.

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I. BACKGROUND

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Third-Party Plaintiff The Lambus Corporation (“TLC”) is an entity partly-owned
and operated by Harry Haralambus. (Declaration of Harry Haralambus ¶ 4.) For

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approximately the past two decades, TLC, along with several other corporate entities that

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Haralambus operates, has had a business relationship with an apparel company called

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Mossimo concerning trademarks in the MOSSIMO brand.1 During a similar period,

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Haralambus also had a business relationship with an apparel manufacturing and

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distribution company called Promark Industries, Inc. (“Promark”). (Declaration of Victor

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Siasat ¶ 5.) Across numerous agreements, which will be addressed in greater detail

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below, Promark acquired a sublicense to the MOSSIMO mark from Haralambus for use

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in connection with the manufacture and sale of branded apparel in the Philippines.
At some point, relations between Haralambus and Mossimo broke down and

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Mossimo sued Haralambus for breach of contract, conversion, fraud, and other related

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claims in July 2014. (See Dkt. 35.) The gravamen of Mossimo’s suit was that Haralambus

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assigned his companies’ rights in the MOSSIMO mark to various shell companies and

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then collected royalties from sublicenses without Mossimo’s knowledge or consent and

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Initially, the MOSSIMO mark was owned by an entity called Mossimo, Inc. On October 31,
2006, this entity assigned its rights in the MOSSIMO mark to Mossimo Holdings, LLC, which
was the plaintiff that filed the original lawsuit in this case. (See Dkt. 35 [Plaintiff’s First Amended
Complaint].) Around that time, Mossimo was acquired by the Iconix Brand Group, Inc. (See
Haralambus Decl. ¶ 15.) Because the precise chain of assignments within Mossimo itself does not
affect the analysis of the instant Motion, the court will generally refer to the company as Mossimo.
A separate issue that must be addressed here is whether the court can take judicial notice of facts
contained in the First Amended Complaint that Mossimo filed against Haralambus, the operative
complaint that initiated this case, and the attached exhibits. Siasat argues that these documents are
judicially noticeable pursuant to Fed. R. Evid. 201. (Dkt. 118.) Ordinarily, district courts can
consider exhibits attached to a Complaint as evidence, even at the motion to dismiss stage. Van
Buskirk v. Cable News Network, Inc., 284 F.3d 977, 980 (9th Cir. 2002). Here, the question is
complicated by the fact that the complaint and exhibits at issue are the ones that initiated the entire
proceeding rather that the specific third-party complaint that initiated the instant dispute.
Nonetheless, courts in similar situations have held that “[d]ocuments previously filed with the
court in the instant litigation are subject to judicial notice.” Century Indem. Co. v. Marine Grp.,
LLC, No. 3:08-CV-1375-AC, 2015 WL 5144330, at *1 (D. Or. Aug. 31, 2015) (taking judicial
notice of facts contained in both complaint and third-party complaint) (citing Asdar Group v.
Pillsbury, Madison and Sutro, 99 F.3d 289, 290 n. 1 (9th Cir.1996)). However, the court may not
judicially notice the truth of the disputed facts contained in such document. Lee v. City of Los
Angeles, 250 F.3d 668, 689 (9th Cir. 2001). Accordingly, the court shall take notice of the exhibits
attached to Mossimo’s Complaint, including the licensing agreement which no party disputes are
inauthentic, but will not take notice of any disputed facts.
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without making required royalty payments to Mossimo. (Id. ¶¶ 4-8.) These unauthorized

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sublicenses allegedly included the deal with Promark. (Id. ¶ 32.) These allegations were

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never adjudicated and, instead, the parties entered into a settlement and Mossimo

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dismissed its suit. (See Dkts. 92, 97.) Before the case settled, in September 2014, Mossimo

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directly granted Promark a license to use the MOSSIMO mark in the Philippines.

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(Declaration of Adamson Bactat, Ex. 5.) Also while the suit was pending, TLC filed a

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Third-Party Complaint against Victor Siasat and Iconix Brand Group. (Dkt. 57.)

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According to TLC, when relations had begun to break down between Haralambus and

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Mossimo, the parties discussed granting TLC a new exclusive license in exchange for an

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advance payment of $100,000. (Id. ¶ 10.) Based on those discussions, TLC made the

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payment but alleges that the draft licensing agreement Iconix later provided to TLC did

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not represent the parties’ prior understanding. (Id. ¶ 14.) According to TLC, this was

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because Siasat had interceded with Iconix to interfere with TLC’s contractual relations

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and prospective economic advantage. (Id. ¶¶ 40-49.)

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A. Haralambus’s Relationship with Siasat and Promark Industries

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In 1997, Victor Siasat first introduced Harry Haralambus to Promark Industries.

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(Siasat Decl. ¶ 5; Haralambus Decl. ¶ 8.) Siasat made the introduction because, at the

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time, Haralambus was looking for a firm to manufacture and distribute apparel bearing

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the “MOSSIMO” brand mark in the Philippines. (Id.) Although the parties dispute the

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precise relationship between Siasat and Promark, it is undisputed that the owner, or one

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of the owners, of Promark was a relative of Siasat’s and that Siasat had facilitated

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business for Promark on various occasions. (Declaration of Harry Haralambus ¶ 8; Siasat

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Decl. ¶ 14.) Haralambus also alleged that Siasat was a co-owner of Promark.

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(Haralambus Decl. ¶ 8.)

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On January 1, 1998, Promark entered into a Master License Agreement with Sole

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Supply, Inc. (“Sole Supply”)—a company owned and operated by Haralambus. (Bacatat

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Decl. ¶ 3, Ex. 1 [Promark Master License Agreement.) Sole Supply represented in this

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agreement that it held “all licensing right, title and interest” to the relevant trademarks in
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the Philippines pursuant to a separate licensing agreement with Mosssimo Inc. (Id. at 1;

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id. § 4.1.) Under the terms of the Promark Master License Agreement, Promark was

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granted a non-exclusive right to use the MOSSIMO mark in connection with

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manufacturing “anywhere in the world” and an exclusive right to use the mark in

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connection with sale and distribution of branded products in the Philippines for a period

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of five years and four months (expiring on April 30, 2003). (Id. §§ 2.1, 15.1.) The

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agreement also included a one-time renewal option for five years, which Promark

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exercised. (Id. § 15.2; Bactat Decl. ¶ 5.) From January 1, 1998 until April 30, 2008, Promark

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made royalty payments to Sole Supply and TLC—as noted above, another entity owned

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and operated by Haralambus—totaling $1.08 million for the use of the MOSSIMO marks

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in the Philippines. (Bactat Decl. ¶ 6; Haralambus Decl. ¶ 13.)

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In May 2008, immediately after the agreement between Promark and Sole Supply

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expired, Promark entered into a new licensing agreement with Onward Pacific (the

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“Second Promark License Agreement.”) (Bactat Decl. ¶ 7, Ex. 2.) Onward Pacific was

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another entity that Haralambus directed and partially-owned. Under this agreement,

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Promark was again granted the right to manufacture apparel with the MOSSIMO mark

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anywhere in the world and sell licensed products in the Philippines. (Id. § 2.1). The term

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of the agreement was five years, expiring on April 30, 2013. (Id. §§ 3.1, 3.2, 3.3.) Although

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the Second Promark License Agreement was made with Onward Pacific at least some of

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the royalty payments under the agreement were sent to TLC. (See Declaration of Susan

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Baker, Ex. 2 (Haralambus Depo. 186:18-187:3.) Between 2010 and 2013, Promark asserts

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that it transferred at least $926,187 to TLC. (Bactat Decl. ¶ 11.) Immediately after the

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Second Promark License Agreement expired, Promark entered into a third license

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agreement for the MOSSIMO marks with Onward Pacific on May 1, 2013. (Bactat Decl. ¶

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10, Ex. 3 [Third Promark License Agreement].)

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B. Haralambus’s Relationship with Mossimo

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The parties dispute the precise status of the Mossimo marks in the Philippines

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when Sole Supply and Promark entered into the Promark Master License Agreement in
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1998. Haralambus contends that prior undisclosed agreements between Mossimo and

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Sole Supply dating back to 1996 gave Sole Supply an exclusive right to license the marks

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in the Phillipines, while Promark questions whether Sole Supply or any other entity

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owned by Haralambus had any such right at that time. (Compare Haralambus Decl. ¶ 4

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with Siasat Mot. Summ. J (“Mot.”) 4-5.) What the undisputed evidence does show is that

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Mossimo, Inc. licensed the MOSSIMO mark to Beyond Blue, Inc. (“Beyond Blue”)—

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another Haralambus owned entity—on April 1, 2001. (Dkt. 35, Ex. 1.) According to that

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agreement, Mossimo granted Beyond Blue an exclusive license to use the MOSSIMO

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trademark in Hong Kong, Japan, Korea, Singapore, and the Philippines. (Id. at 1) The

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initial term of the agreement was five years and Beyond Blue was given an option to

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renew for another five years. (Id. §§ 2.1, 2.2.) Under the terms of the agreement, Beyond

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Blue had the right to sublicense the mark but was required to secure Mossimo’s prior

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written consent and pay Mossimo seventy percent of all royalties from any sublicense

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agreements. (Id. §§ 1.2, 5.1.) On July 6, 2007, Mossimo and Beyond Blue executed and

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Amendment to the License Agreement, which terminated Beyond Blue’s license to use

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the MOSSIMO trademark everywhere but the Philippines where Beyond Blue retained

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an exclusive license to the marks until December 31, 2012. (Dkt. 35, Ex. 2.) Under the

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terms of the Amended License Agreement, Beyond Blue was permitted to assign its

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interests and rights to Onward Pacific—as noted above, a company Haralambus partly-

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owned and directed. (Id. § 7.) The Amended License Agreement provided for certain

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guaranteed minimum royalties and maintained the same rights and responsibilities for

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sublicensing the mark. (Id. §§ 4, 10.)

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The three assertions Siasat makes about this account are that Haralambus never

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informed Mossimo of its sublicense agreement with Promark, Haralambus never paid

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Mossimo the required portion of sublicense royalties, and that Haralambus, and his

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entities, had lost their rights to the MOSSIMO mark at least five months prior to

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Promark’s third license agreement with Onward Pacific. Haralambus disputes each of

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these claims. As to the first two, Haralambus asserts that Mossimo was aware of the
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arrangement and was not owed any additional royalty payments. As to the final point,

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Haralambus notes that the rights to license the MOSSIMO mark in the Philippines

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derived from the alleged 1996 agreement with Sole Supply and not any subsequent

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agreement. (Haralambus Decl. ¶¶ 19, 27.) Thus, any claimed expiration of licensing rights

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is irrelevant.

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C. The Parties’ Accounts Intersect

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After entering into the Amended License Agreement with Haralambus, Mossimo

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alleges that Onward Pacific failed to make the guaranteed minimum royalty payments.

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(Dkt. 35 ¶ 44.) Mossimo contacted Haralambus about the issue and, after some

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discussion, Mossimo alleges that Haralambus had TLC transfer $100,000 to Mossimo to

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partially satisfy the owed royalty payments. (Id. ¶ 45.) During this period, Haralambus

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agrees that the parties were engaged in discussions about the MOSSIMO marks.

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(Haralambus Decl. ¶ 23.) In Haralambus’s view, he did not owe any minimum

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guaranteed royalty payments because of the alleged agreement with Sole Supply that

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gave that company the rights to the MOSSIMO mark in the Philippines. (Id.) Nonetheless,

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Haralambus concedes making a $100,000 payment to Mossimo. (Id. ¶ 24.) Haralambus

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asserts that this payment was made as “part of an overall far-reaching settlement

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between the parties . . . which was to be consummated in writing.” (Id.) Subsequent to

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this payment, in September 2013, Haralambus received a draft agreement between

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Onward Pacific and Iconix. (Id. ¶ 28, Ex. 7.) This draft agreement was never executed.

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Around this time, two other relevant events transpired. First, Mossimo entered

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into a new joint venture on September 30, 2013 with an affiliate of the Global Brands

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Group (“Global Brands”)—an independent company that no party or third-party claims

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an ownership or interest in—that granted Global Brands the exclusive right to exploit

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and sublicense the MOSSIMO brand trademarks in a number of Southeast Asian

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Companies including the Philippines. (Declaration of Jared Margolis ¶ 3.)

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Second, also in September 2013, Siasat met with representatives from Mossimo.
(Siasat Decl.¶ 6.) Siasat states that the meeting was to discuss the possibility of acquiring
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the licensing rights for certain other brands not at issue here. (Id. ¶ 6.) As Mossimo was

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now operated by Iconix, Siasat claims he did not even know that this meeting was with a

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Mossimo representative and he claims that he never discussed the Mossimo mark. (Id.)

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Haralambus disputes this assertion and contends that Siasat spoke about the MOSSIMO

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mark on this occasion. (Haralambus Decl. ¶ 27.) Subsequently, in December 2013, Siasat

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met with an individual named Jason Rabin who was a representative of the Global

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Brands Group. (Id. ¶ 11.) Siasat claims that this was the first of multiple interactions with

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Mossimo representatives who told Siasat that Promark was using the MOSSIMO mark

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without authorization in the Philippines. (Id. ¶¶ 11, 12.) During these interactions, Siasat

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claims he turned over Promark’s licensing agreements with the various entities

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Haralambus operated, as well as records of Promark’s past payments to TLC and other

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companies. (Id. ¶ 12.) Subsequently, Promark directly entered into a licensing agreement

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with Mossimo to manufacture and distribute apparel with the MOSSIMO mark in the

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Philippines. (Declaration of Adamson Bactat, Ex. 5.)

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In July 2014, Mossimo filed a lawsuit against Haralambus, Onward Pacific, and

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Beyond Blue. (Dkt. 1.) The Complaint asserted claims for breach of contract, conversion,

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fraud, accounting, and injunctive relief. (See id.) In March 2015, TLC filed a Third-Party

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Complaint against Siasat and Iconix asserting claims for contribution, fraud, unjust

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enrichment, unfair competition, intentional interference with contractual relations,

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intentional interference with prospective economic advantage, and civil conspiracy. (See

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Dkt. 57.) According to Haralambus, the $100,000 payment TLC sent to Iconix in January

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2013 was based on representations made by Iconix that the two companies had resolved

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their trademark disputes and would enter into a new licensing agreement in the

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Philippines for several brands including MOSSIMO. (Haralambus Decl. ¶ 24.) TLC’s

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Third-Party Complaint raises two primary allegations. First, TLC alleges that this new

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agreement never materialized because Iconix negotiated in bad faith. (Dkt. 57 ¶¶ 14, 18.)

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Second, TLC alleges that, beginning with the September 2013 meeting with a Mossimo

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representative, Siasat was engaged in a scheme to undermine the business relationship
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between Mossimo and TLC so that Promark could go around TLC and directly license

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the Mossimo marks. (See id. ¶¶ 48, 51.) Siasat now moves for summary judgment on all

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counts.

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II. LEGAL STANDARD

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Summary judgment is appropriate where the pleadings, depositions, answers to

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interrogatories, and admissions on file, together with the affidavits, if any, show “that

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there is no genuine dispute as to any material fact and the movant is entitled to judgment

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as a matter of law.” Fed. R. Civ. P. 56(a). A party seeking summary judgment bears the

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initial burden of informing the court of the basis for its motion and of identifying those

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portions of the pleadings and discovery responses that demonstrate the absence of a

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genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). All

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reasonable inferences from the evidence must be drawn in favor of the nonmoving party.

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See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 242 (1986). If the moving party does not

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bear the burden of proof at trial, it is entitled to summary judgment if it can demonstrate

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that “there is an absence of evidence to support the nonmoving party’s case.” Celotex,

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477 U.S. at 323.

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Once the moving party meets its burden, the burden shifts to the nonmoving party

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opposing the motion, who must “set forth specific facts showing that there is a genuine

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issue for trial.” Anderson, 477 U.S. at 256. Summary judgment is warranted if a party

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“fails to make a showing sufficient to establish the existence of an element essential to

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that party’s case, and on which that party will bear the burden of proof at trial.” Celotex,

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477 U.S. at 322. A genuine issue exists if “the evidence is such that a reasonable jury

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could return a verdict for the nonmoving party,” and material facts are those “that might

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affect the outcome of the suit under the governing law.” Anderson, 477 U.S. at 248. There

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is no genuine issue of fact “[w]here the record taken as a whole could not lead a rational

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trier of fact to find for the nonmoving party.” Matsushita Elec. Indus. Co. v. Zenith Radio

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Corp., 475 U.S. 574, 587 (1986).

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It is not the court’s task “to scour the record in search of a genuine issue of triable

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fact.” Keenan v. Allan, 91 F.3d 1275, 1278 (9th Cir. 1996). Counsel has an obligation to lay

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out their support clearly. Carmen v. San Francisco Sch. Dist., 237 F.3d 1026, 1031 (9th Cir.

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2001). The court “need not examine the entire file for evidence establishing a genuine

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issue of fact, where the evidence is not set forth in the opposition papers with adequate

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references so that it could conveniently be found.” Id.

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III. DISCUSSION

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A. Intentional Interference Claims

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TLC alleges that Siasat’s conduct while TLC and Iconix were attempting to

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negotiate a new licensing agreement between 2012 and 2014 constitutes both intentional

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interference with contractual relations and intentional interference with prospective

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economic advantage. (Dkt. 57 ¶¶ 9-20.) Siasat contends that he is entitled to summary

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judgment on both claims because the evidence fails to create triable issue as to any

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existing contract or prospective economic advantage. At best, Siasat contends that the

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parties were contemplating entering into a possible contract or future relationship. In the

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alternative, Siasat contends that TLC’s claims are unavailing because there is no evidence

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that Siasat engaged in any intentional acts intended to interfere with any possibly

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existing contract or economic relationship.

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1. Intentional Interference with Contractual Relations
To prove a claim for intentional interference with contractual relations, Plaintiffs

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must show: “(1) a valid contract between plaintiff and a third party; (2) defendant’s

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knowledge of this contract; (3) defendant’s intentional acts designed to induce a breach

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or disruption of the contractual relationship; (4) actual breach or disruption and (5)

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resulting damage.” Quelimane Co., Inc.v. Stewart Title Guaranty Co., 19 Cal. 4th 26, 55

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(1998). The third element incorporates a causation requirement that that the intentional

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acts be a substantial factor in causing the breach. See Bank of New York v. Fremont Gen.

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Corp., 523 F.3d 902, 909 (9th Cir. 2008); see also Hahn v. Diaz-Barba, 194 Cal. App. 4th 1177,

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1196 (2011) (stating that a plaintiff must allege that the contract would otherwise have

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been performed).

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The threshold requirement for an intentional interference with contractual

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relations is the existence of a valid contract. Tuchscher Dev. Enterprises, Inc. v. San Diego

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Unified Port Dist., 106 Cal. App. 4th 1219, 1239 (2003). In its opposition to the instant

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Motion, TLC includes only a single sentence about the existence of a valid contract: “The

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relationship that TLC had with Mossimo was via an assignment of rights it was granted

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from Sole Supply, Inc. and those rights were continuing. (See Dec. of Harry Haralambus,

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¶ ).” Setting aside the lack of adequate citation to record evidence, this conclusory

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declaration is inadequate to create a triable issue of fact. The contract TLC appears to be

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referencing is an alleged 1996 agreement between Haralambus and Mossimo where,

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“[f]or an approximately 1.4 million cash injection into its coffers, Mossimo relinquished

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rights in eleven countries in Southeast Asia for apparel and apparel accessories, and

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Worldwide for footwear.” (Haralambus Decl. ¶ 4.) No other party or third-party has ever

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acknowledged the existence or validity of this alleged agreement nor has TLC provided

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any other evidence substantiating its existence. To the contrary, the evidence shows that,

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from 2001 until 2012, Haralambus and his various corporate entities entered into a series

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of licensing agreements with Mossimo for the rights to use the MOSSIMO mark in the

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Philippines, among other places. (Dkt. 35, Exs. 2, 3.) These agreements, which

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Haralambus signed, expressly affirm that “MOSSIMO is the owner of various MOSSIMO

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trademarks” and that Mossimo “has the right, power and authority to grant licenses to

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others.” (Dkt. 35 at 25.) If Mossimo had indeed permanently “relinquished” the mark to

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Haralambus’s company, Sole Supply, it is unclear why Haralambus would have entered

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into any subsequent licensing agreements for the same mark.

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A second possible contract might be the oral agreement that TLC alleges it had

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with Iconix in January 2013. Although Haralambus does not rely on this alleged contract

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in his opposition papers, the court nonetheless considers whether these allegations create

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a triable issue of fact out of an abundance of caution. According to the First Amended
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Complaint, “discussion occurred between Iconix and TLC pertaining to conflicting

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claims concerning the rights for the use of the ’Mossimo’ trademarks in the Philippines“

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in 2012. (Dkt. 57 ¶ 9.) At the end of 2012, Iconix allegedly represented to TLC that, in

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exchange for an advance payment of $100,000.00, Iconix would grant continued exclusive

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rights” to several trademarks including MOSSIMO. (Id. ¶ 10.) TLC then alleges that it

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paid this “$100,000.00 advance payment pursuant to the parties’ agreement and based on

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discussions that could lead to settlements, new license agreements, and/or joint

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ventures.” (Id. ¶ 11.) This agreement broke down however, when “[i]n 2013, Iconix sent a

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draft agreement that in no way represented the parties’ earlier agreements.” (Id. ¶ 14.)

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Haralambus’s Declaration provides a similar account and describes the $100,000 paid to

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Mossimo “as part of an overall far-reaching settlement between the parties which arose

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in late 2012 and which was to be consummated in writing.” (Haralambus ¶ 24.)

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Even drawing all inferences in favor of TLC, no reasonable jury could find that

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these barebone allegations constituted a valid oral contract between TLC and Iconix for

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future licensing rights to the Mossimo marks. As Haralambus himself admits, the

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payment was part of a settlement over conflicting claims to the Mossimo marks. In

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Mossimo’s account this payment was made after it notified Haralambus that he owed

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licensing royalty payments dating back to 2011. (Dkt. 35 ¶¶ 44, 45.) But even setting aside

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Mossimo’s allegation, the TLC complaint and single declaration cannot substantiate the

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contract claim. It is possible that the parties were contemplating a possible contract but

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there is no indication of what this oral agreement precisely entailed or that there was a

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genuine meeting of the minds. Indeed, all previous licensing agreements between the

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parties were codified in writing and, as Haralambus admits, negotiations broke down

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when the parties began to exchange draft agreements. Thus, given the absence of any

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valid contract between TLC and Iconix, the court finds that Siasat is entitled to summary

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judgment on the intentional interference of contractual relations claim.

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2. Intentional Interference with Prospective Economic Advantage

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The elements of intentional interference with prospective economic advantage are:

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“(1) an economic relationship between the plaintiff and some third party, with the

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probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of

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the relationship; (3) intentional acts on the part of the defendant designed to disrupt the

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relationship; (4) actual disruption of the relationship; and (5) economic harm to the

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plaintiff proximately caused by the acts of the defendant.” Korea Supply Co. v. Lockheed

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Martin Corp., 29 Cal.4th 1134, 1153 (2003).

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As with the prior claim, Siasat contends that the evidence cannot sustain a finding

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that there was an economic relationship between plaintiff and some third party with the

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probability of future economic benefit. On this issue, TLC’s opposition papers present no

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argument about the existence of an economic relationship with the probability of future

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economic benefit aside from restating the applicable legal standard. (See Opp’n 14.) Based

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on the First Amended Complaint and Haralambus’s declaration, TLC’s argument on this

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point appears to be that, but for Siasat’s intervention, TLC would have secured a new

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licensing agreement with Mossimo and would have continued earning royalties from

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sublicensing the mark to Promark.

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The court finds that TLC has not submitted adequate evidence to create a triable

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issue as to an existing economic relationship with the probability of economic benefit.

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Although TLC has provided evidence to demonstrate that there was, at one point, an

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economic relationship between Haralambus-associated entities and Mossimo, there is no

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evidence of an existing economic relationship at the time of Siasat’s alleged interference.

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Instead, the evidence reflects that the last licensing agreement between Haralambus and

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Mossimo expired on December 31, 2012, nearly a year prior to the Siasat meetings with

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Mossimo representatives that gave rise to this suit. (Dkt. 35, Ex. 2.) Indeed, TLC’s

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Complaint even acknowledges that the relationship had deteriorated by 2012 over

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“conflict claims concerning the rights for the use of the ‘Mossimo’ trademarks” and the

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parties were discussing “new license agreement.” (Dkt. 57 ¶ 9.) Although the parties had

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prior economic relations and the payment of $100,000 might have indicated that they
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were contemplating restarting an economic relationship, there was no existing

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relationship. Roth v. Rhodes, 25 Cal. App. 4th 530, 546 (1994) (holding that a speculative

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relationship does not satisfy the existing relationship prong).

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Even if there were a triable issue of fact as to an existing economic relationship

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between TLC and Iconix, “Plaintiff also has the burden of proving that there was the

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probability of economic benefit with a third party.” Golden v. Sound Inpatient Physicians

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Med. Grp., Inc., 93 F. Supp. 3d 1171, 1177 (E.D. Cal. 2015) (citing Korea Supply Co. v.

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Lockheed Martin Corp., 29 Cal. 4th 1134, 1153 (2003); Buckaloo v. Johnson, 14 Cal. 3d 815, 827

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(1975)); see id. (also noting that “the law precludes recovery for overly speculative

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expectancies”) (citing Westside Ctr. Assoc. v. Safeway Stores 23, Inc., 42 Cal. App. 4th 507,

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522 (1996)). The undisputed evidence in this case does not support the conclusion that

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there was a probability of economic benefit. Although the allegations in Mossimo’s initial

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complaint cannot be taken as true, they do offer some indication about how the parties’

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viewed their economic relationship. Mossimo alleges that it received the payment of

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$100,000 as part of the royalty payments it believed it was owed by TLC. (Dkt. 35 ¶ 45.)

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There is no indication that Mossimo intended to accept payment as a guarantee of future

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economic benefit it would provide to TLC. Likewise, even Haralambus acknowledges

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that Mossimo was in the process of negotiating an exclusive licensing agreement with a

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third-party not associated with Haralambus during the relevant period. (Dkt. 57 ¶ 16.) In

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response, the only evidence Haralambus has submitted to substantiate his assertion that

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TLC had a probability of economic benefit was his own declaration. The court finds that

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this single declaration fails to create triable issue of fact as to Siasat’s intentional

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interference with prospective economic advantage.

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An alternate ground for granting Siasat summary judgment on the intentional

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interference with prospective economic advantage claim is that TLC has failed to create a

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triable issue as to the intentional act prong. “[T]he act of interference with prospective

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economic advantage is not tortious in and of itself.” Korea Supply, 29 Cal. 4th at 1159. To

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state a claim for intentional interference under California law, a plaintiff must allege that
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“the defendant engaged in an independently wrongful act,” that is “wrongful by some

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legal measure other than the act of interference itself.” Id. at 1153 (citing Della Penna v.

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Toyota Motor Sales, U.S.A., Inc., 11 Cal. 4th 376, 393 (1995)). This is understood as an act

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“proscribed by some constitutional, statutory, regulatory, common law, or other

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determinable legal standard.” Korea Supply, 29 Cal. 4th at 1159. Here, TLC provides no

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allegations of any independent wrongful conduct on Siasat’s part aside from his alleged

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interference. Under some conditions interference with an existing contract might satisfy

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the independent wrong conduct. See Cisco Sys., Inc. v. STMicroelectronics, Inc., 77 F. Supp.

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3d 887, 898–99 (N.D. Cal. 2014) (citing Korea Supply, 29 Cal. 4th at 1157–58.) However,

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given that the court has already concluded that there was no valid contract for Siasat to

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interfere with and given the absence of any other wrongful conduct, the court GRANTS

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Siasat summary judgment on TLC’s intentional interference with prospective economic

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advantage.

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3. Stranger to the Relationship
“California law has long recognized that the core of intentional interference

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business torts is interference with an economic relationship by a third-party stranger to

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that relationship, so that an entity with a direct interest or involvement in that

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relationship is not usually liable for harm caused by pursuit of its interests.” Marin Tug &

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Barge, Inc. v. Westport Petroleum, Inc., 271 F.3d 825, 832 (9th Cir. 2001) (citing Della

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Penna, 45 Cal. Rptr. 2d 436.) Relying on the Restatement of Torts, the Ninth Circuit has

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state the inquiry as follows:

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“One who, having a financial interest in the business of a third person
intentionally causes that person not to enter into a prospective contractual relation
with another, does not interfere improperly with the other's relation if he
(a) does not employ wrongful means and
(b) acts to protect his interest from being prejudiced by the relation.”

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Id. (quoting Restatement (Second) of Torts § 769 (1979)). Although neither party raised

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this issue in their summary judgment briefing, the court notes that this rule would

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provide an independent reason for granting Siasat summary judgment. See Bullis v.

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Twentieth Century-Fox Film Corp., 474 F.2d 392, 394 (9th Cir. 1973) (affirming district

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court’s grant of summary judgment on an issue not raised either by party).
Here, the undisputed evidence shows that Siasat and Promark had a financial

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interest in the Mossimo marks. Since 1998, Promark had been sublicensing the Mossimo

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marks from Haralambus. While the specifics of Siasat’s interaction with Mossimo are

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disputed, no party could dispute that Promark had a financial interest in maintaining the

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ability to license or sublicense the Mossimo marks. If TLC failed to secure a licensing

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agreement from Mossimo so that it could continue to sublicense the marks to Promark, it

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would prejudice Promark’s business interests. Given that the court has held that Siasat

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did not use any independently wrongful means to secure the MOSSIMO license directly

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from Mossimo, his actions would not constitute economic interference as he was not a

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stranger to the business relationships at issue.

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B. Remaining Claims.

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Siasat has also filed for summary judgment on TLC’s claims for contribution,

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unjust enrichment, conspiracy, and violations of California’s unfair competition law. Of

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these, TLC only addresses Siasat’s argument regarding unfair competition in its

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opposition brief. The failure to address the remaining claims is grounds for deeming the

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issues conceded and granting Siasat summary judgment on them. See Ramirez v. Ghilotti

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Bros. Inc., 941 F. Supp. 2d 1197, 1210 n.7 (N.D. Cal. 2013) (collecting cases and finding a

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party's failure to address an argument concedes the issue raised). 2 Nonetheless, the court

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briefly addresses why there are no triable issues as to contribution, unjust enrichment,

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and conspiracy.

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In the event that TLC was found liable to Mossimo for conversion in the original

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lawsuit, TLC’s contribution claim sought to hold Siasat partially responsible for paying

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any amounts awarded to Mossimo. (See Dkt. 57.) Given that Mossimo and TLC settled

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At oral argument, counsel for TLC went further and indicated that it was not pursuing the “fraud
or conspiracy” but was “going forward with the unjust enrichment claim and the claims for
tortious interference.”
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their claims, there was no judgment entered against TLC on the conversion claim and

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there can never be any such judgment since the original lawsuit has been dismissed. (See

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Dkts. 92, 97.) Thus, TLC is not entitled to contribution from Siasat as a matter of law. See

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General Electric Co. v. State of Cal. ex rel. Dept. Pub. Wks., 32 Cal. App. 3d 918, 925 (1973).

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TLC also seeks damages against Siasat for unjust enrichment. The elements for a

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claim of unjust enrichment are “receipt of a benefit and unjust retention of the benefit at

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the expense of another.” Prakashpalan v. Engstrom, Lipscomb & Lack, 223 Cal. App. 4th

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1105, 1132 (2014). Here, TLC’s Complaint makes no allegations that Siasat personally

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received a benefit and unjustly retained a benefit at TLC’s expense. Indeed, there are no

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allegations about Sisasat at all on this count. Instead, the allegations concerning this issue

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in the Complaint are focused only on Iconix and TLC’s discussions and TLC’s payment

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of $100,000 to Iconix. (See Dkt. 57 ¶¶ 33-36.) Thus, Siasat is entitled to summary judgment

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on this claim as a matter of law.

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TLC’s claim for conspiracy is premised on the allegation that Siasat and Iconix

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formed a conspiracy for the purpose of engaging in fraudulent conduct intended to

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interfere with TLC’s contractual relations and prospective economic advantage. Having

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already concluded that there are no triable issues as to the intentional interference claims,

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the court concludes for substantially similar reasons that there is also no triable issue as

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to conspiracy. The Complaint is devoid of specific allegations about Siasat’s

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conspiratorial conduct nor can the evidence cannot support a finding that Siasat

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interfered with any existing economic relationship or valid contract.

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The only claim that TLC has contested is the unfair completion law claim.

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Specifically, TLC contends that Siasat violated California’s Unfair Competition law, see

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Cal. Bus. & Prof. Code § 17200 et seq., by “working to undermine TLC’s authority and

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contractual rights with Mossimo, by meeting with them and sharing information from

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Promark regarding payments made by TLC.” (Opp’n 17.) However, given the court’s

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conclusion that Siasat did not interfere with TLC’s contractual rights, the court also finds

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that Siasat is entitled to summary judgment on the unfair competition law claim.
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IV. CONCLUSION
For the reasons stated above, the court GRANTS Siasat’s Motion for Summary
Judgment and VACATES all pending motions.

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IT IS SO ORDERED.

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Dated: April 4, 2017

___________________________________
DEAN D. PREGERSON
UNITED STATES DISTRICT JUDGE

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