Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_09-cv-04301/USCOURTS-cand-5_09-cv-04301-4/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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Case No.: 09-CV-04301-LHK

ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR SUMMARY JUDGMENT

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United States District Court

For the Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA 

SAN JOSE DIVISION

STARNET INTERNATIONAL AMC INC., dba 

ALL CHEER INTERNATIONAL LIMITED 

and KERRY INTERNATIONAL,

 Plaintiff,

v.

MOUSA KAFASH dba BAPAZ GARMENTS, 

et al.,

 Defendants. 

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Case No.: 09-CV-04301-LHK

ORDER GRANTING IN PART AND 

DENYING IN PART MOTION FOR 

SUMMARY JUDGMENT

On November 29, 2010, Defendant Mousa Kafash moved for summary judgment on all of 

Plaintiff Starnet International AMC Inc.'s1claims in this matter. Dkt. No. 56 ("Mot."); see also

Dkt. No. 62 ("Reply Br."). Starnet opposes the motion. Dkt. No. 57 ("Opp'n"). For the foregoing

reasons, the Court GRANTS in part and DENIES in part Kafash's motion for summary judgment.

I. BACKGROUND

Starnet filed this collection action against Kafash on September 16, 2009. Dkt. No. 1 

("Compl."). Starnet claims that Kafash has failed to pay for $132,298.32 in goods that he ordered

and received from Starnet. See Compl. ¶¶ 5-10. In addition, Starnet alleges that based on Kafash's

intentional misrepresentations to Starnet's employees, Starnet extended Kafash a line of credit. Id.

 

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In its filings, Starnet identifies itself as Starnet Internation AMC Inc. On this Court's docket, 

Plaintiff is identified as Starnet International AMC Inc. Starnet has failed to clarify this 

discrepancy. For purposes of this motion, the Court will refer to Plaintiff as Starnet.

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¶ 19. According to Starnet, if its employees had known Kafash's representations were false, it 

would not have manufactured, shipped, or sold goods to Kafash without first requiring advance 

payment. Id. ¶ 25.

Based on these allegations, Starnet has brought five claims against Kafash: (1) open book 

account, (2) account stated, (3) reasonable value of goods sold and delivered, (4) intentional 

misrepresentation, and (5) negligent misrepresentation. See id. ¶¶ 11-29. Starnet seeks (1) 

payment in the sum of $132,298.32 plus ten percent per annum interest from December 31, 2008, 

(2) costs for its suit, (3) attorneys' fees under California Civil Code § 1717.5, and (4) exemplary 

damages. Id. at 6-7.

In his answer, Kafash denied all of Starnet's factual allegations. See Dkt. No. 5 ("Answer"). 

Kafash's position, as stated in his summary judgment motion, is that he has never done business 

with Starnet in his individual capacity. Mot. 1. According to Kafash, he has neither ordered nor 

received any goods from Starnet, and he has never made any representations to Starnet. Id. Kafash 

claims that Bapaz Garments Corporation, a New York corporation of which he is the owner and 

CEO, has done business with Starnet in its corporate capacity and that Bapaz has paid for all goods 

received from Starnet. Id. at 1-2.

II. LEGAL STANDARD

"The court shall grant summary judgment if the movant shows that there is no genuine 

dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R.

CIV. P. 56(a). The party seeking summary judgment bears the initial burden of showing an absence 

of a genuine dispute of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 

2548, 91 L. Ed. 2d 265 (1986)). "Once the moving party carries its initial burden, the adverse party 

'may not rest upon the mere allegations or denials of the adverse party's pleading,' but must provide 

affidavits or other sources of evidence that 'set forth specific facts showing that there is a genuine 

issue for trial.'" Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001) (en banc) (citations 

omitted). "On an issue as to which the nonmoving party will have the burden of proof" at trial,

"the movant can prevail merely by pointing out that there is an absence of evidence to support the 

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ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR SUMMARY JUDGMENT

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nonmoving party's case." Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007)

(citation omitted).

"As to materiality, the substantive law will identify which facts are material. Only disputes 

over facts that might affect the outcome of the suit under the governing law will properly preclude 

the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 

2505, 2510, 91 L. Ed. 2d 202 (1986). "A scintilla of evidence or evidence that is merely colorable 

or not significantly probative does not present a genuine issue of material fact." Addisu v. Fred 

Meyer, Inc., 198 F.3d 1130, 1134 (9th Cir. 2000) (citing United Steelworkers of Am. v. Phelps 

Dodge Corp., 865 F.2d 1539, 1542 (9th Cir. 1989)). 

"The evidence of the non-movant is to be believed, and all justifiable inferences are to be 

drawn in his favor." Liberty Lobby, 477 U.S. at 255, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (citing 

Adickes v. S. H. Kress & Co., 398 U.S. 144, 158-59, 90 S. Ct. 1598, 26 L. Ed. 2d 142 (1970); see 

also Sluimer v. Verity, Inc., 606 F.3d 584, 587 (9th Cir. 2010) ("In deciding a motion for summary 

judgment, the evidence is viewed in the light most favorable to the non-moving party, and all 

justifiable inferences are to be drawn in its favor . . . .") (citation omitted). Nevertheless, in order 

to survive summary judgment, "[t]he evidence must be enough for a 'reasonable trier of fact' to find 

for the plaintiff." Schmidt v. Burlington N. and Santa Fe Ry. Co., 605 F.3d 686, 689 (9th Cir.

2010) (citation omitted).

III. ANALYSIS

Kafash has moved for summary judgment on all of Starnet's claims. The Court will 

consider whether each of Starnet's claims can survive in turn.2

A. Open Book Account

A book account, stated in somewhat simplified terms, is "a detailed statement of debit/credit 

transactions kept by a creditor in the regular course of business, and in a reasonably permanent 

manner." Imperial Merch. Servs., Inc. v. Hunt, 47 Cal. 4th 381, 397, 97 Cal. Rptr. 3d 464, 476, 

212 P.3d 736, 746 (2009) (quoting Reigelsperger v. Siller, 40 Cal. 4th 574, 579 n.5, 53 Cal. Rptr.

 

2 Because subject matter jurisdiction in this case is based on diversity of citizenship, the substantive 

law of California, the forum state, applies. See Conestoga Servs. Corp. v. Exec. Risk Indem., Inc., 

312 F.3d 976, 980-81 (9th Cir. 2002).

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3d 887, 150 P.3d 764 (2007)) (quotation marks omitted).3 A book account is open when there is a 

balance due on the account. See Interstate Grp. Adm'rs, Inc. v. Cravens, Dargan & Co., 174 Cal.

App. 3d 700, 708, 220 Cal. Rptr. 250 (1985). In California, a book account may furnish the basis 

for a cause of action "when it contains a statement of the debits and credits of the transactions 

involved completely enough to supply evidence from which it can be reasonably determined what 

amount is due to the claimant." Id. (quoting Tillson v. Peters, 41 Cal. App. 2d 671, 678, 107 P.2d 

434 (1940)) (quotation marks omitted). To sustain a cause of action the book must also show 

against whom the charges are made and in whose favor the charges run. See id. (quoting Joslin v. 

Gertz, 155 Cal. App. 2d 62, 65, 317 P.2d 155 (1957)).

Kafash argues that Starnet cannot prove the necessary elements to make out its book 

account claim. Mot. 3. According to Kafash, Bapaz is a corporation duly organized under the laws 

of the State of New York. Dkt. No. 56-2 ("Kafash Decl."), at ¶ 2. In support of this claim, Kafash 

submitted a copy of Bapaz Garments Corporation's entity status page from the New York Secretary 

of State website. Id., Ex. A. This copy shows that Bapaz Garments Corporation is a domestic 

business corporation that initially filed its incorporating documents with New York's Department 

of State on February 6, 2004. Id., Ex. A. According to the website copy, Bapaz Garments 

Corporation is currently an active entity. Id., Ex. A. 

In addition to his claim regarding the existence of Bapaz Garments Corporation, Kafash 

also claims that Bapaz, not Kafash, did business with Starnet. Kafash Decl. ¶¶ 4-5. According to 

Kafash, he never made any representations to Starnet. Id. Moreover, Kafash claims that Bapaz has 

paid for all goods ordered from Starnet. Id. ¶ 7.

In response, Starnet submitted a declaration of its Chief Financial Officer Kurt Miller. Dkt. 

No. 59 ("Miller Decl."). Despite the evidence presented by Kafash to the contrary, Miller claims 

 

3 A more exhaustive definition is found in the California Code of Civil Procedure: "The term 'book 

account' means a detailed statement which constitutes the principal record of one or more 

transactions between a debtor and a creditor arising out of a contract or some fiduciary relation, 

and shows the debits and credits in connection therewith, and against whom and in favor of whom 

entries are made, is entered in the regular course of business as conducted by such creditor or 

fiduciary, and is kept in a reasonably permanent form and manner and is (1) in a bound book, or (2) 

on a sheet or sheets fastened in a book or to backing but detachable therefrom, or (3) on a card or 

cards of a permanent character, or is kept in any other reasonably permanent form and manner." 

CAL. CIV. PROC. CODE § 337a.

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that there is no corporation listed as Bapaz Garments in the State of New York corporate records. 

Id. at 2. In addition, Miller claims that all of Starnet's documents show that Starnet4transacted 

business with Kafash, an individual doing business as Bapaz Garments, and not with a corporation 

named Bapaz Garments Corporation. Miller Decl. 2. Stated another way, Miller claims that 

Kafash did business with Starnet as a personal business entity called Bapaz Garments and not as a 

corporation. Id. According to Miller, Starnet's book account with Kafash is for "Mousa Kafash 

dba Bapaz Garments." Id. Moreover, Miller states that no one ever informed Starnet that Kafash 

was doing business as a corporation and that no purchase orders or invoices support that assertion. 

Id. 

These dueling declarations create a dispute as to whether Starnet did business with Kafash 

as an individual or with a corporation named Bapaz Garments.

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 Moreover, Miller's claim that 

Starnet maintains a book account for Kafash dba Bapaz Garments also creates a genuine dispute as 

to the existence of a book account sufficient to maintain a book account claim. Therefore, Kafash's 

motion for summary judgment on Starnet's open book account claim is denied.

B. Account Stated

There are three essential elements of a claim for account stated: "(1) previous transactions 

between the parties establishing the relationship of debtor and creditor; (2) an agreement between 

the parties, express or implied, on the amount due from the debtor to the creditor; (3) a promise by 

the debtor, express or implied, to pay the amount due." Zinn v. Fred R. Bright Co., 271 Cal. App.

2d 597, 600, 76 Cal. Rptr. 663, 665-66 (1969).

Kafash's argument in support of its motion for summary judgment on this count mirrors his 

argument on the open book account claim. Kafash claims that he never had any transactions with 

Starnet. According to Kafash, only Bapaz Garments Corporation—a duly organized corporate 

 

4 Miller's declaration also references two of Starnet's wholly owned subsidiaries: Kerry 

International and All Cheer International. Miller Decl. 2. Miller claims that Starnet's subsidiaries 

transacted business with Kafash under the same terms as Starnet did. Id.

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Starnet's January 4, 2011 objection to the 2007 invoices attached to Kafash's reply declaration 

may create yet another genuine dispute as to a material fact. See Dkt. No. 63. The Court denies 

Starnet's request to strike and not consider Kafash's motion for summary judgment.

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entity—transacted business with Starnet. Furthermore, according to Kafash, Bapaz Garments 

Corporation has paid for any and all goods received from Starnet.

Similarly, Miller's counterarguments here are nearly identical to his counterarguments 

above. Miller claims that Kafash, as an individual entity, has done business with Starnet in the 

past, that Kafash sent Starnet three purchase orders, that Starnet delivered those goods to Kafash, 

that Starnet sent invoices to Kafash detailing the amount due in payment for the goods delivered, 

and that Kafash has failed to pay. Miller Decl. 2-3. These claims go beyond the pleadings and 

support an account stated claim.

Therefore, Kafash's motion for summary judgment on Starnet's account stated claim is 

denied.

C. Reasonable Value of Goods Sold and Delivered

California recognizes a "common count6of quantum valebant for the reasonable value of 

goods sold and delivered." Weitzenkorn v. Lesser, 40 Cal. 2d 778, 792, 256 P.2d 947, 958 (1953). 

Quantum valebant is a type of quasi-contract action. See Jogani v. Superior Court, 165 Cal. App.

4th 901, 905-06, 81 Cal. Rptr. 3d 503 (2008); see also 4 WITKIN, CALIFORNIA PROCEDURE § 567

(5th ed. 2008) ("The count on quantum valebant is similar to that on quantum meruit, except that it 

seeks recovery of the reasonable value of goods sold.") (internal citations omitted). "Quasicontracts, unlike true contracts, are not based on the apparent intention of the parties to undertake 

the performances in question, nor are they promises." Weitzenkorn, 40 Cal. 2d at 794, 256 P.2d at 

959 (quotation omitted). "They are obligations created by law for reasons of justice." Id.

(quotation omitted). 

"The theory of quasi-contractual recovery is that one party has accepted and retained a 

benefit with full appreciation of the facts, under circumstances making it inequitable for him to 

retain the benefit without payment of its reasonable value." Day v. Alta Bates Med. Ctr., 98 Cal.

App. 4th 243, 248, 119 Cal. Rptr. 2d 606, 609 (2002) (quoting Truestone, Inc. v. Simi W. Indus.

Park II, 163 Cal. App. 3d 715, 724, 209 Cal. Rptr. 757 (1984)) (quotation marks omitted); see also 

 

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"A common count is not a specific cause of action . . . ; rather, it is a simplified form of pleading 

normally used to aver the existence of various forms of monetary indebtedness . . . ." McBride v. 

Boughton, 123 Cal. App. 4th 379, 394, 20 Cal. Rptr. 3d 115, 127 (2004) (citations omitted).

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Weitzenkorn, 40 Cal. 2d at 794, 256 P.2d at 959 ("Quasi contractual recovery is based upon benefit 

accepted or derived for which the law implies an obligation to pay. Where no benefit is accepted 

or derived there is nothing from which such contract can be implied.") (quoting Rowell v. Crow, 93 

Cal. App. 2d 500, 503, 209 P.2d 149, 151 (1949)) (quotation marks omitted).

Kafash maintains that he has never ordered any goods from Starnet and that Bapaz

Garments Corporation has paid for all goods received from Starnet. 

According to Miller, Kafash ordered and received $135,833.32 in goods from Starnet. 

Miller Decl. 3. Miller alleges that after deducting $3,535.00 in advance payments made by Kafash, 

the balance on Kafash's account is $132,298.32. Id. In further support of its claim that Kafash has 

not paid for ordered and received goods, Starnet submitted copies of bank documents that it 

received from Bapaz. Dkt. No. 60, Ex. 3, at 2. According to Miller, Bapaz gave Starnet these 

documents as proof that Bapaz had wired Starnet payments for the goods received. Miller Decl. 4. 

Miller claims that Starnet's banks told him that these wire transfers could not have gone through 

because they contain the wrong SWIFT code. Id. Miller further claims that he passed this 

information on to Bapaz but has received no response. Id.

Thus, Miller's declaration not only creates a genuine dispute as to who ordered the goods 

but also creates a dispute as to whether Starnet received payment for the goods it shipped on the 

Bapaz Garments account. Therefore, Kafash's motion for summary judgment on Starnet's claim for 

the reasonable value of goods sold and delivered is denied.

D. Intentional Misrepresentation

Intentional misrepresentation is a claim for fraud. See Anderson v. Deloitte & Touche, 56 

Cal. App. 4th 1468, 1474, 66 Cal. Rptr. 2d 512 (1997). "The elements of fraud are: (1) a 

misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity 

(or scienter); (3) intent to defraud, i.e., to induce reliance; (4) justifiable reliance; and (5) resulting 

damage." Robinson Helicopter Co., Inc. v. Dana Corp., 34 Cal. 4th 979, 990, 22 Cal. Rptr. 3d 352, 

359, 102 P.3d 268, 274 (2004) (citing Lazar v. Superior Court, 12 Cal. 4th 631, 638, 49 Cal. Rptr. 

2d 377, 909 P.2d 981 (1996)); see also R & B Auto Center, Inc. v. Farmers Group, Inc., 140 Cal.

App. 4th 327, 377, 44 Cal. Rptr. 3d 426 (2006) ("The elements of a claim for intentional 

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misrepresentation are a misrepresentation, made with knowledge of its falsity and with an intent to 

defraud or induce reliance, justifiable reliance, and resulting damage.") (citing 5 WITKIN,

SUMMARY OF CALIFORNIA LAW Torts § 772 (10th ed. 2005)).

Kafash claims that Starnet has not provided any evidence that Kafash made any 

representation to Starnet. Mot. 4. Kafash argues that, as a result, the Court should grant his motion 

for summary judgment on Starnet's intentional misrepresentation claim. Id. 

In its complaint, Starnet details a specific intentional misrepresentation made by Kafash. 

These allegations are as follows. Starnet originally required Kafash to pay in advance for goods 

ordered. Compl. ¶ 18. Kafash, allegedly knowing that Starnet's president was away on business, 

contacted Starnet's employees and intentionally misrepresented that Starnet's president had agreed 

to extend him credit. Id. ¶ 19. In reliance on this misrepresentation, Starnet manufactured and sent 

goods to Kafash on credit. Id. ¶¶ 20-22. Starnet claims that Kafash has refused to pay off this 

credit. Id. ¶ 24.

While these allegations appear to support a claim for intentional misrepresentation,7Starnet 

cannot rely solely on its pleading to survive a motion for summary judgment. See Devereaux, 263 

F.3d at 1076. According to Miller, Starnet's employees did communicate with Kafash. Miller 

Decl. 2. Moreover, Miller claims that Kafash sent Starnet three purchase orders. Id. at 2-3. 

Nevertheless, Miller never alleges that Kafash made any misrepresentations to Starnet in the course 

of these communications. Other than its complaint, Starnet has not put forth any evidence that 

Kafash made any intentional misrepresentations to Starnet. Therefore, Kafash's motion for 

summary judgment on Starnet's claim for intentional misrepresentation is granted.

E. Negligent Misrepresentation

"The elements of negligent misrepresentation are (1) the misrepresentation of a past or 

existing material fact, (2) without reasonable ground for believing it to be true, (3) with intent to 

induce another's reliance on the fact misrepresented, (4) justifiable reliance on the 

 

7 As Kafash has not raised the issue, the Court is not here considering whether the allegations 

contained in the complaint are sufficient to meet Federal Rule of Civil Procedure 9(b). The Court 

observes, however, that Starnet did not allege exactly when or to whom Kafash made his alleged 

misrepresentation.

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misrepresentation, and (5) resulting damage." Nat. Union Fire Ins. Co. of Pittsburgh, PA v. 

Cambridge Integrated Servs. Grp., Inc., 171 Cal. App. 4th 35, 89 Cal. Rptr. 3d 473 (2009) (quoting

Apollo Capital Fund LLC v. Roth Capital Partners, LLC, 158 Cal. App. 4th 226, 243, 70 Cal. Rptr.

3d 199 (2007)) (quotation marks omitted).

For the reasons outlined in the Court's consideration of Kafash's motion for summary 

judgment on Starnet's intentional misrepresentation claim, Kafash's motion for summary judgment 

on Starnet's claim for negligent misrepresentation is granted. Starnet has not presented any 

evidence beyond its pleadings supporting its claim that that Kafash made any misrepresentation of 

a past or existing material fact.

IV. CONCLUSION

For the foregoing reasons, Kafash's motion for summary judgment is GRANTED in part 

and DENIED in part as follows:

(1) Kafash's motion for summary judgment on Starnet's open book account claim is 

DENIED.

(2) Kafash's motion for summary judgment on Starnet's account stated claim is DENIED.

(3) Kafash's motion for summary judgment on Starnet's claim for the reasonable value of 

goods sold and delivered is DENIED.

(4) Kafash's motion for summary judgment on Starnet's intentional misrepresentation claim 

is GRANTED.

(5) Kafash's motion for summary judgment on Starnet's negligent misrepresentation claim 

is GRANTED.

IT IS SO ORDERED.

Dated: January 5, 2011 _________________________________

LUCY H. KOH

United States District Judge

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