Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_15-cv-00774/USCOURTS-cand-3_15-cv-00774-8/pdf.json

Nature of Suit Code: 790
Nature of Suit: Other Labor Litigation
Cause of Action: 28:1332 Diversity-Fair Labor Standards Act

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

BRETT ROBERTS,

Plaintiff,

v.

DAYMON WORLDWIDE INC., et al.,

Defendants.

Case No. 15-cv-00774-WHO 

ORDER GRANTING MOTION FOR 

SUMMARY JUDGMENT

Re: Dkt. Nos. 73, 74, 76, 82, 83

INTRODUCTION

Defendants Daymon Worldwide Inc. and Omni Global Sourcing Solutions, Inc. terminated

plaintiff Brett Roberts for ordering the destruction of certain export-related documents, which they 

claim violated multiple provisions of his employment agreement and warranted termination “for 

cause.” Roberts contends that defendants fired him to avoid paying transition and earn-out 

payments to which he was entitled upon termination other than for “cause,” and that the proffered 

justifications are simply pretextual. In addition, Roberts alleges that defendants have intentionally 

interfered with his right to possess company tax records and receipts and misrepresented his 

ability to participate in certain Daymon benefit plans.

There are no material facts in dispute. Roberts did violate his employment contract by 

committing a “material violation of the law” and has not met his burden to establish that 

defendants’ justification for his termination was pretextual, defendants are entitled to judgment on 

Roberts’s wrongful termination, breach of contract, breach of the covenant of good faith and fair 

dealing, unpaid wages, and waiting time penalties claims. Nor has Roberts demonstrated personal 

ownership of the records in Daymon’s possession; his conversion claim has no merit. Finally, the 

contracts Roberts signed with Daymon are fully integrated and preclude his misrepresentation 

claims. Accordingly, I GRANT defendants’ motion for summary judgment on all causes of 

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action. 

BACKGROUND

Roberts founded Omni Pacific, a business importing and exporting food and beverages, in 

1989. Roberts Depo. at 25:3-4, 65:9-11 [Dkt. Nos. 73-2; 75-2]. He was the President, CEO, 

Secretary, and Treasurer of Omni Pacific as well as owner. He considered his job to be 

“everything from janitor to parking lot attendant to salesperson to chief risk officer, chief financial 

officer, you name it.” Id. at 32:17-19.

Omni Pacific employed sales employees, known as “traders,” who were responsible for 

buying and selling food and beverage products. Id. at 51:18-25. Omni Pacific’s policies provided 

that each sale should be reflected in a file containing a signed purchase order from the customer on 

the customer’s letterhead and a signed sales contract from Omni Pacific, each reflecting the same 

terms and agreements. Id. at 77:7-78:1, 81:21-82:2. In addition, depending on the requirements 

of the sale, Certificates of Origin (“COOs”) were added to the file. A COO certifies the origin of 

the good. Id. at 88:18. The importance of COOs varied depending on the customer, but it could 

affect whether the product could be imported or aid in determining the applicable duty or tariff. 

Id. at 88:20-89:3. For example, as relevant to this case, under the United States/Korean Free 

Trade Agreement (“KORUS”), having a COO showing that the goods originated in the United 

States could have an impact on whether the Korean customer has to pay a duty or tariff for the 

importation of the goods. Id. at 92:4-22.

In mid-2009, Roberts hired a third party to help him sell Omni Pacific. Id. at 111:5-112:7. 

Roberts commenced discussion with Daymon in summer 2010, but the discussions were 

temporarily put on hold due to changes in Daymon’s management. Id. at 113:18-21, 115:15-

117:4. The parties ultimately signed a Letter of Intent on January 5, 2012 and the acquisition 

closed approximately eight months later on August 15, 2012. Id. at 126:4-7. The acquisition 

consisted of several different agreements including: (i) a Goodwill Purchase Agreement in which 

Daymon agreed to pay Roberts $200,000 in cash and up to $700,00 in earn-out payments over six 

years; (ii) an Asset Purchase Agreement in which both Roberts and Omni Pacific agreed to sell 

certain assets, properties, and rights to Daymon in exchange for the purchase price; (iii) an 

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Employment Agreement between Daymon and Roberts in which Daymon agreed to hire Roberts 

as a Senior Vice President at a base compensation of $175,000 with up to another 40% in bonuses, 

full benefits, car allowance, and twelve months of base salary in possible transition payments. 

The agreements also provided that Roberts would not be entitled to either the transition 

payments or further earn-out payments if he was terminated for “cause” as defined by his 

Employment Agreement. Id. at 196:11-15; see also section 2(a)(ii)(C) of Goodwill Purchase 

Agreement. The Employment Agreement, which Roberts signed, defines “cause” to mean: (i) “an 

act of fraud, embezzlement, theft, or any other material violation of law that occurs during or in 

the course of [plaintiff’s] employment with company;” (ii) “intentional damages to companies 

[sic] assets;” (iii) “intentional breach of any of company’s policies;” (iv) “willful conduct by you 

that is demonstrably and materially injurious to company, monetarily or otherwise.” Roberts 

Depo., Exh. 21. “Cause also includes any of the above grounds for dismissal regardless of 

whether the company learns of it before or after terminating [plaintiff’s] employment.” Id. 

In January 2014, Daymon commenced an outside compliance audit of its trading 

department, which included Omni Pacific’s former import/export business. Over two days, the 

auditors interviewed Daymon employees and reviewed records. Roberts Depo. at 230:16-240:11. 

During a meeting on the third day, the auditors informed Roberts they had identified three 

“mistakes.” Id. at 239:13-15. The third mistake involved COOs that Jim Duffy, a Daymon 

employee who previously worked for Omni Pacific, had signed. Id. at 240:7-11. The COOs were 

on the letterhead of a customer, ConAgra; Duffy signed them immediately above a line that stated 

“ConAgra Grocery Products Company.” Id. at 243:5-9. Duffy testified that in some cases he 

signed the COOs on behalf of ConAgra for the sake of expediency. Duffy Depo. at 66:2-12. He 

admitted that Omni Pacific had to abide by certain quotas for sales in Korea and that if he had 

requested too many COOs from ConAgra, ConAgra’s Korean agent would have been alerted that 

“too much” was coming in from Omni. Id. at 93:18-94:5. 

Roberts testified that the audit team lawyers, and the other people present at the meeting, 

did not give him any recommendation or advice on how to handle the mistake. Roberts Depo. at 

248:4-5. Roberts told them that he would “take care” of all three issues the following day. Id. at 

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248:16-20. 

The next day, Roberts met with Duffy and told him: 

I want you to go through every one of those contract files back 

there, both before and after the sale. I want you to pull them out. I 

want you to take out the [COO] in there, and I want you to shred it, 

and I want you to delete it out of your personal computer at the same 

time.

Id. at 258:11-17. Despite his specific instruction to destroy the electronic PDF copies of the 

COOs, Roberts believed that copies could be retrieved from the company’s servers and “backup 

drives.” Roberts Decl. ¶ 58. Roberts told Duffy to accomplish this task on a Saturday afternoon 

as a form of “punishment.” Roberts Depo. at 259:8-15. 

Duffy did as directed and informed Roberts on the following Monday that he had followed 

Roberts’s instructions. The same day, Roberts told Larry Becker and Cindy Cheng, both Daymon 

employees, that he had instructed Duffy to delete and shred the COOs. Id. at 264:18-265:12. 

They were “silent” and said they would check with the audit team regarding Roberts’s conduct. 

Id. at 265:18- 166:10. 

Approximately three months later, on March 10, 2014 Daymon terminated Roberts. 

Roberts was told that he was being terminated for “violating [the] company[’s] documentretention policy.” Id. at 349:19-23.

Roberts filed this lawsuit on February 19, 2015. The operative complaint encompasses 

eight claims: (1) wrongful termination in violation of public policy; (2) breach of contract; (3) 

breach of the covenant of good faith and fair dealing; (4) unpaid wages; (5) waiting time penalties; 

(6) conversion; (7) intentional misrepresentation; and (8) negligent misrepresentation. Second 

Amended Complaint (“SAC”) [Dkt. No. 57]. Roberts alleges that Daymon breached the 

Employment Agreement by terminating him without “cause” and failing to pay him the transition 

and earn-out payments he was owed upon termination other than for “cause.” Id. ¶¶ 73-79. He 

asserts that the pretextual for “cause” termination was intended to “cheat [him] out of his 

employment contract and the salary, benefits and other items they owed him.” Id. ¶ 57. 

According to Roberts, this conduct not only violated the terms of the Employment Agreement, but 

also constituted wrongful termination and a breach of the covenant of good faith and fair dealing. 

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Id. ¶¶ 68-70, 83. Roberts also alleges that defendants have intentionally and substantially 

interfered with his right to possess “personal company tax records and receipts.” Id. ¶ 95. Lastly, 

he claims that defendants misrepresented his eligibility to participate in the 401(k) Profit Sharing 

Plan and the Employee Stock Ownership Plan. Id. ¶¶ 100-114.

Defendants filed a motion for summary judgment on all eight claims. I held a hearing on 

June 22, 2016.

LEGAL STANDARD

A party is entitled to summary judgment where it “shows that there is no genuine dispute 

as to any material fact and [it] is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A 

dispute is genuine if it could reasonably be resolved in favor of the nonmoving party. Anderson v. 

Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is material where it could affect the 

outcome of the case. Id.

The moving party has the initial burden of informing the court of the basis for its motion 

and identifying those portions of the record that demonstrate the absence of a genuine dispute of 

material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). Once the movant has 

made this showing, the burden shifts to the nonmoving party to identify specific evidence showing 

that a material factual issue remains for trial. Id. The nonmoving party may not rest on mere 

allegations or denials from its pleadings, but must “cit[e] to particular parts of materials in the 

record” demonstrating the presence of a material factual dispute. Fed. R. Civ. P. 56(c)(1)(A). The 

nonmoving party need not show that the issue will be conclusively resolved in its favor. See 

Anderson, 477 U.S. at 248-49. All that is required is the identification of sufficient evidence to 

create a genuine dispute of material fact, thereby “requir[ing] a jury or judge to resolve the parties’

differing versions of the truth at trial.” Id. (internal quotation marks omitted). If the nonmoving 

party cannot produce such evidence, the movant “is entitled to...judgment as a matter of law 

because the nonmoving party has failed to make a sufficient showing on an essential element of 

her case.” Celotex, 477 U.S. at 323.

On summary judgment, the court draws all reasonable factual inferences in favor of the 

nonmoving party. Anderson, 477 U.S. at 255. “Credibility determinations, the weighing of the 

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evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a 

judge.” Id. However, conclusory and speculative testimony does not raise a genuine dispute and 

is insufficient to defeat summary judgment. See Thornhill Publ’g Co., Inc. v. GTE Corp., 594 

F.2d 730, 738-39 (9th Cir. 1979).

DISCUSSION

Defendants’ motion for summary judgment involves four primary questions: (1) Was 

Roberts terminated for cause? (2) If so, was the “for cause” termination simply pretext to avoid 

paying him earn-out and other transition benefits? (3) Does Roberts have ownership over the “tax 

receipts and records” at issue in his conversion claim? and (4) Are the alleged negligent and 

intentional misrepresentations contradicted by the express terms of Roberts’s employment 

agreement? I answer each question in turn.

I. TERMINATION FOR CAUSE

Defendants assert that Roberts’s termination violates four independent categories of cause 

under his employment agreement: (i) “an act of fraud, embezzlement, theft or any other material 

violation of law that occurs during or in the court of your employment with the company;” (ii) 

“intentional damage to companies [sic] assets;” (iii) “intentional breach of any company’s 

policies;” (iv) “willful conduct by you that is demonstrably and materially injurious to company, 

monetarily or otherwise.” Roberts Depo., Exh. 21. Because I conclude Roberts’s conduct

constitutes a material violation of the law, I do not address the remaining provisions.

Under California law, contract interpretation is a question of law for the court’s 

determination. Parsons v. Bristol Dev. Co., 62 Cal. 2d 861, 865 (1965). “The fundamental rules 

of contract interpretation are based on the premise that the interpretation of a contract must give 

effect to the mutual intention of the parties.” MacKinnon v. Truck Ins. Exch., 31 Cal. 4th 635, 647 

(2003). Such intent should be inferred, if possible, from the written provisions of the contract. 

AIU Ins. Co. v. Superior Court, 51 Cal. 3d 807, 822 (1990). In interpreting a particular provision, 

a court must give terms their “ordinary and popular sense.” Id. A contract provision is considered 

ambiguous when the provision is susceptible to more than one reasonable interpretation. 

MacKinnon, 31 Cal. 4th at 648. However, the “mere fact that a word or phrase in a [contract] may 

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have multiple meanings does not create an ambiguity.” Palmer v. Truck Ins. Exch., 21 Cal. 4th 

1109, 1118 (1999). 

The Employment Agreement defines “cause” in part as “any material violation of the law.” 

Roberts Depo., Exh. 21. Defendants argue Roberts violated three different trade regulations by 

ordering Duffy to destroy the COOs: (i) The KORUS-specific regulation of 19 C.F.R. §

10.1009(c) which requires “Any person who completes and issues a certification for a good 

exported from the United States to Korea must maintain, for a period of at least five years after the 

date the certification was issued, all records and supporting documents relating to the origin of a 

good from which the certification was issued, including the certification or copies thereof and 

[certain] records and documents;” (ii) The Foreign Trade Regulation of 15 C.F.R. § 30.10 which 

reads “All Parties to the export transaction (owners and operators of export carriers, USPPIs, 

FPPIs, and/or authorized agents) shall retain documents pertaining to the export shipment for five 

years from the date of export;” (iii) The Export Administration Regulation (“EAR”) of 15 C.F.R.

§ 726.6 which requires “All records required to be kept by the EAR must be retained for five years 

from the latest of the following times: (1) The export from the United States of the item involved 

in the transaction to which the records pertain.” Mot. at 11 [Dkt. No. 73]. They contend that all 

three of these regulations required Daymon to retain the COOs for a five year period. They assert 

that Roberts violated these regulations when he instructed Duffy to destroy the COOs Duffy had 

signed on behalf of ConAgra, some of which were less than five years old. 

Roberts does not dispute the applicability of these three regulations but argues that his 

actions did not constitute a material violation of the law, as required under the Employment 

Agreement. Oppo. at 10 [Dkt. No. 75].

1

 He contends that the applicable penalty statute, 19 

C.F.R. § 163.6, applies only to failure to produce the records in response to a request from 

customs and that, except in limited circumstances that are not relevant here, the producing party is 

 

1Roberts does not otherwise contend that term “material” should not be interpreted based on its 

plain meaning – having significance or relevancy. See Oxford English Dictionary, Online 

(www.oed.com) (accessed July 20, 2016) (defining material as “having significance or 

relevance.”); see also People v. Lucas, 60 Cal. 4th 153, 293 (2014) (holding that the “ordinary 

meaning” of material is “substantial, essential, relevant or pertinent”). 

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given 30 days to produce the records. Id. (citing 19 C.F.R. § 163.6(a),(b)). Therefore, because it 

was “extremely unlikely” that customs would ever have requested the destroyed COOs and 

defendants could have avoided any potential penalties by contacting ConAgra and requesting 

copies of the COOs, there was no material violation. Id. 

But 19 C.F.R. § 163.6 is not the only penalty provision at issue. 19 C.F.R. § 163.6 relates 

to a party’s obligations under the KORUS. Defendants argue that Roberts’s conduct also violated 

the penalty provision of the EAR, 15 C.F.R. § 764.2(i). Under this section, “No person may fail or 

refuse to comply with any reporting or record keeping requirement of the EAR or of any order, 

license or authorization issued thereunder.” 15 C.F.R. § 764.2(i). Violations may be subject to 

administrative and other sanctions. 15 C.F.R. § 764.3. 

Roberts contends that because defendants could have attained copies of the destroyed 

COOs, they are not out of compliance with EAR requirements. But Roberts’s belief that 

defendants can obtain copies from ConAgra is merely conjecture. Roberts had the opportunity to 

conduct discovery in this case, yet his representation is supported only by a citation to his own 

declaration and the KORUS, which states that both parties have an obligation to maintain the 

records. He did not establish that ConAgra has copies of the COOs, let alone that ConAgra would

be willing to provide defendants with copies.2 Defendants assert that it is not guaranteed that 

ConAgra has copies since Duffy testified that he did not always send hard copies of COOs to 

customers. Duffy Depo. at 80:19-23. Where Duffy was intending, in part, to avoid detection by 

ConAgra that a high volume of sales were being made in Korea, defendants plausibly suggest that 

it is likely that Duffy did not send hard copies to ConAgra. Id. at 92:19-97:5. 

Furthermore, even if photocopies were obtained, Roberts’s opposition brief does not 

address whether defendants would be in compliance with EAR regulations regarding the use of 

reproductions. 3 Under the EAR, a regulated person4 may maintain reproductions instead of the 

 

2 Roberts’s first motion for an extension of time to file the McCollum Declaration is GRANTED. 

Dkt. No. 76. However, despite securing a declaration from a regional manager at ConAgra, the 

declaration does not address whether or not ConAgra has retained copies of the destroyed COOs 

or if it would be able or willing to provide Daymon with copies.

3 Roberts’s second motion for extension of time to file the Further Declaration of Brett Roberts, 

submitted after the hearing, is DENIED. Dkt. No. 83. Even if the further declaration had been 

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original records provided that all of the requirements of that section have been met. 15 C.F.R. §

762.5(d) (explaining that for “systems based on photographic, photostatic, or miniature 

photographic processes, the regulated person must maintain a detailed index of all records in the 

system that is arranged in such a manner as to allow immediate location of any particular record in 

the system”). Defendants’ expert, Denise Walker, explains that “if the electronic copies are not 

the typical storage method and the documents are not easily retrievable, then Daymon was out of 

compliance with the import or export regulations for recordkeeping.” Therefore, “[e]ven had 

Daymon been able to obtain electronic copies of all of the COOS at issue, Daymon was out of 

compliance with [15 C.F.R. 762.2] because the COOs were not easily retrievable and were not 

stored in a typical method” as required by the EAR. Walker Decl. ¶ 58. Roberts offers no 

countering expert declaration or explanation grounded in the statutory language of how Daymon 

would be in compliance even if it were to obtain the photocopies. 5

Accordingly, Roberts has not cited or produced any evidence of a material dispute that 

would avoid a finding that his actions constituted a material violation of the law pursuant to his 

employment agreement.

II. PRETEXTUAL TERMINATION

Roberts asserts that even if his conduct otherwise constituted “cause” under the 

employment agreement, his “for cause” termination was “mere pretext to cheat him out of benefits 

 

considered, it would not have changed the outcome of this Order. Roberts’s related motion to 

seal, Dkt. No. 82, is GRANTED in accordance with the Declaration of Kim Colbert, Dkt. No. 86.

4

The regulations defines regulated person as: “Any person subject to the jurisdiction of the United 

States who, as principal or agent (including a forwarding agent), participates in any transaction 

described in paragraph (a) of this section, and any person in the United States or abroad who is

required to make and maintain records under any provision of the EAR, shall keep and maintain 

all records described in § 762.2 of this part that are made or obtained by that person and shall 

produce them in a manner provided by § 762.7 of this part.” 15 C.F.R. § 762.1(b). Paragraph (a) 

of the section describes transactions as including those of: “Exports of commodities, software, or 

technology from the United States” 15 C.F.R. § 762.1(a).

5 Roberts originally requested that if I determined that Walker’s report supports defendants’ 

motion for summary judgment, I should deny the motion or defer consideration until he had a 

“reasonable opportunity” to brief her deposition transcript. Travis Decl. ¶ 14. Despite his failure 

to file any documents related to Walker’s declaration or report prior to the hearing, Roberts made 

representations during oral argument that Walker’s deposition revealed significant inconsistencies 

between her testimony and her report. Although I allowed Roberts to file Walker’s deposition

transcript after the hearing, the transcription reveals none of the claimed substantial contradictions. 

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already earned (the transition payments and the performance-based earn-out payments).” Oppo. at 

14. Defendants argue that Roberts has failed to establish a material dispute as to pretext. I agree 

with defendants.6

Public policy wrongful termination claims are analyzed under the McDonnell Douglas

burden-shifting framework.7 See Nielsen v. Trofholz Techs., Inc., 750 F. Supp. 2d 1157, 1164 

(E.D. Cal. 2010), aff’d, 470 F. App’x 647 (9th Cir. 2012). Under this framework, a plaintiff must 

establish a prima facie case by showing: (1) he or she engaged in a protected activity; (2) the 

employer subjected the employee to an adverse employment action; and (3) a causal link between 

the protected activity and the employer’s action. Id. The employer then must present evidence 

that it had a legitimate reason for its action. If the employer does so, the burden then shifts to the 

plaintiff to prove that the employer’s proffered reasons were pretextual. Id.

Even if Roberts could establish a prima facie case, he has not garnered sufficient evidence 

to establish pretext. To prove pretext, the employee must show that “the proffered reason had no 

basis in fact, the proffered reason did not actually motivate the discharge, or, the proffered reason 

was insufficient to motivate discharge.” Hanson v. Lucky Stores, Inc., 74 Cal. App. 4th 215, 224 

(1999). When the parties have had the benefit of discovery, as they have in this case, to avert 

summary judgment an employee “must produce substantial responsive evidence that the 

employer’s showing was untrue or pretextual.” Martin v. Lockheed Missiles & Space Co., 29 Cal. 

App. 4th 1718, 1735 (1994) (internal quotation marks and citation omitted). Roberts has not done 

so. 8

A central problem with Roberts’s pretext argument is that he cites no evidence that he was 

 

6 Although the parties’ pretext arguments focus on the wrongful termination and the breach of the 

covenant of good faith and fair dealing claims, whether the termination was pretextual is

obviously relevant to Roberts’s breach of contract, unpaid wages, and waiting time penalties 

claims. 

7

This framework derives its name from the Supreme Court decision in McDonnell Douglas Corp. 

v. Green, 411 U.S. 792, 797 (1973).

8 Robert’s inability to demonstrate pretext also fatally undermines his breach of the implied 

covenant of good faith and fair dealing claim, since it is based on the same facts as his assertion of 

pretext. See Guz v. Bechtel Nat. Inc., 24 Cal. 4th 317, 353 n.18, (2000) (“[T]he covenant might be 

violated if termination of an at-will employee was a mere pretext to cheat the worker out of 

another contract benefit to which the employee was clearly entitled, such as compensation already 

earned.”).

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terminated for financial reasons. Instead, he offers his own declaration that, notwithstanding his 

success at Daymon, he was frustrated with its human resources and legal departments and lodged a 

“series of complaints, written and oral” primarily through his immediate supervisors. Roberts 

Decl. ¶¶ 16, 20 [Dkt. No. 75-18]. The complaints encompassed a wide variety of topics, from 

Roberts’s concerns regarding his annual raise in 2013 to the turn-around time for documents from 

the legal department. Id. ¶ 20. He states that although initially defendants were “receptive and 

responsive” to his concerns, their responses took on an “increasingly dismissive and annoyed 

tone.” Id. ¶ 21. 

As evidence of defendants’ annoyance, he relies primarily on two email chains involving 

Clint Sollenberger, Daymon’s Human Resources Director. The first email chain involves the 

approval of a request to fill an account representative position. Sollenberger Depo. [Dkt. No. 75-

5], Exh. 15. 9 In response to what seemed to him to be an inefficient hiring process, Roberts sent 

out an email stating that “we seem to trip over ourselves with processes and procedures which 

triumph actual results.” Id. He asked “politely and respectfully how do we get past this tomorrow 

and move a[n] urgently needed replacement hire process forward.” Id. The next day, 

Sollenberger sent an email to Larry Becker, Roberts’s supervisor, expressing his view that 

Roberts’s emails are “generally rude and antagonistic” and that Becker should “start coaching him 

to get with the program.” Id. 

The second email chain was initiated in February 2014 by Amy Holgerson, a Daymon 

Human Resources employee, regarding the hiring of two temporary employees. Sollenberger 

Depo., Exh. 13. Roberts explains in his declaration that he was having trouble getting defendants 

to pay for the temporary employees and that the temp agency would not pay the employees in a 

manner Roberts thought appropriate. Roberts Decl. ¶ 27. After a phone call with a representative 

from the temp agency, Roberts sent an email that expressed his view that either of the two options 

presented by the agency were “utterly useless and unacceptable” and requested to drop the agency 

and “find another service in which [sic] to handle this matter.” Sollenberger Depo., Exh. 13. This 

 

9

The request to seal a portion of Travis’s Declaration and six of the attached declarations is 

GRANTED. Dkt. No. 74.

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email chain was forwarded on to Sollenberger who responded that, “[t]his is yet another case of 

rude, inappropriate and unprofessional behavior from [Roberts]. It’s bad enough that he behaves 

terribly with our own associates but treating external partners badly who are just trying to help 

rectify a situation reflects poorly on the whole Company.” Sollenberger Depo., Exh. 14.

Roberts argues that these two emails demonstrate that Sollenberger was already “boiling” as to 

Roberts in October 2013 and that he had completely “boiled over” by February 2014. Oppo. at 

18.10

Roberts takes issue with the accuracy of Sollenberger’s identified reasons for his 

termination. Roberts states that Sollenberger, who terminated Roberts, told him that he was being 

terminated for “cause” for violating the company’s document retention policy by instructing Duffy 

to destroy the COOs. Roberts Decl. ¶ 69. But when Sollenberger was asked at his deposition 

which provisions of the employee handbook Roberts violated, he could only identify a provision 

that prohibits “[f]alsification of company documents” and testified that Roberts indirectly violated 

it because Duffy falsified the COOs on Roberts’s “watch.” Sollenberger Depo. 76:21-78:12,

96:12-98:3. Roberts asserts that this reasoning is insufficient to hold him responsible for what was 

ultimately Duffy’s behavior.

In addition, when Sollenberger was asked which provisions of the Global Code of Conduct 

Roberts violated, Sollenberger pointed to the “Books and Recordkeeping” provision. This section 

provides: “Each associate is accountable for doing his or her part to ensure all financial books, 

records and account accurately reflect transactions and events that conform to internal and external 

accounting standard.” Sollenberger Depo. Exh. 19. Roberts asserts that the COOs were not 

financial books, records, or accounts and that Sollenberger could not demonstrate that the Books 

and Recordkeeping provision required the maintenance of a record known to be false. 

After construing all reasonable inferences in a light most favorable to Roberts, I cannot 

find a genuine dispute of material fact regarding pretext. There is no direct evidence of pretext. 

 

10The February 2014 email chain followed a visit by Daymon’s Chief Financial Officer and Chief 

Customer Officer Rhonda Levine who gave the human resources department an “earful” about its 

problems. Roberts Decl. ¶¶ 30,31. Becker told Roberts this visit was a “bloodbath” for the human 

resources department. Id. ¶ 32.

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Roberts’s arguments depend upon inferences from circumstantial evidence that fail to suggest a 

causal relationship between Sollenberger’s views and Roberts’s theory that he was terminated in 

order to avoid the payment of his promised benefits. 

Roberts’s theory suffers from multiple fatal flaws. First, Roberts fails to connect 

Sollenberger’s comments to what Roberts believes was the true reason for his termination – saving 

money by avoiding benefits payouts. See Mattsson v. Home Depot, Inc., No. 11-cv-0533, 2012 

WL 2342948, at *4 (S.D. Cal. June 20, 2012) (“Mere assertions that an employer had a 

discriminatory motive and intent are inadequate, without substantial factual evidence, to raise a 

genuine issue of material fact as to pretext in order to avoid summary judgment.”) (modification 

and citation omitted). Roberts points to no evidence, direct or circumstantial, in which monetary 

concerns are discussed. The record is devoid of any of defendants’ officers making even an offhand comment concerning the amount of Roberts’s pay-out. The primary evidence Roberts

provides shows only that one individual involved in his termination had previously commented

about his rude and unprofessional behavior. But there is no link between Sollenberger’s views 

and Daymon’s purported desire to deny Roberts transition or earn-out payments.11 

Second, the record does not show that key decision makers involved in Roberts’s 

termination even knew of his HR-related complaints. Kim Colbert, who “ultimately made the 

recommendation to the human resources department that [Roberts’s] employment should be 

terminated,” “was not aware of any of the complaints that [Roberts] describes in his Complaint 

with regards to the Daymon Human Resource and Legal divisions.” Colbert Decl. ¶¶ 7,9 [Dkt. 

No. 73-11]. Other individuals testified they were similarly unaware that Roberts had made 

complaints or that Daymon was planning on terminating Roberts based on these complaints. See

Mervis Depo. at 71:23-72:4 [Dkt. No. 73-6]; Rogers Depo. at 71:16-20 [Dkt. No. 73-7]; Marklay 

Depo. at 6:4-7 [Dkt. No. 73-5].

Third, Roberts was not the only individual terminated as a result of the destruction of the 

COOs. Defendants terminated Duffy for the same reason. See Sollenberger Depo., Exh. 20. If 

 

11 Indeed, Daymon argued at the hearing that terminating Roberts, one of its most valuable 

employees, was against its economic interest.

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defendants’ justification for firing Roberts was mere pretext to deny him his earn-out benefits, 

why would they fire Duffy, who did not stand to gain any bonuses or earn-out payments, for the 

same reason? Roberts provides no explanation. 

Because Roberts cannot demonstrate that his for “cause” termination was pretextual, he 

cannot prevail on his claims for breach of contract, wrongful termination, unpaid wages, waiting 

time penalties, or breach of the implied covenant of good faith and fair dealing. See Patterson v. 

Int’l Bhd. of Teamsters, Local 959, 121 F.3d 1345, 1350 (9th Cir. 1997) (A plaintiff must produce 

more than a “mere scintilla” of evidence to avoid summary judgment.). Defendants’ motion for 

summary judgment on these claims is GRANTED.

III. CONVERSION

Roberts alleges that he has a right to possess his “valuable personal company tax records 

and receipts” that defendants maintain in a locked storage room. SAC ¶ 95. He claims that 

defendants “intentionally and substantially interfered” with his property by “taking possession of 

those records and refusing to return them to Roberts even though Roberts demanded their return.” 

Id. ¶ 96.

To state a claim for conversion, a plaintiff must demonstrate that: “(1) the plaintiff’s 

ownership or right to possession of personal property; (2) the defendant’s disposition of the 

property in a manner that is inconsistent with the plaintiff’s property rights; and (3) resulting

damages.” Fremont Indem. Co. v. Fremont Gen. Corp., 148 Cal. App. 4th 97, 119 (2007). 

Defendants argue that they are entitled to summary judgment because: (1) Roberts cannot show 

that he has personal ownership or the right to possess the “tax records and receipts” he claims 

Daymon converted; (2) Roberts cannot show that Daymon disposed of the property in a manner 

inconsistent with his property rights; (3) Roberts cannot show he was damaged.

The Asset Purchase Agreement defines the “Seller” as Omni Pacific Company, Inc. and 

the “Seller Principal” as Brett Roberts, an individual. Roberts Depo., Exh. 19. Under the

agreement, the Seller retained its rights to the company’s tax returns. Roberts argues that because 

Omni Pacific is an “S” corporation and the business has been dissolved, it functions as a “pass 

through” entity for tax purposes and Roberts “effectively is Omni Pacific.” Oppo. at 23. 

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Under the general principles of contract interpretation, “when the terms of a contract are 

clear, the intent of the parties must be ascertained from the contract itself.” Klamath Water Users 

Protective Ass’n v. Patterson, 204 F.3d 1206, 1210 (9th Cir. 2000). “Courts will not adopt a 

strained or absurd interpretation in order to create an ambiguity where none exists.” California 

Dairies Inc. v. RSUI Indem. Co., 617 F. Supp. 2d 1023, 1031 (E.D. Cal. 2009) (citation omitted).

Assuming the truth of Roberts’s representations, Roberts has not shown why or how Omni 

Pacific’s potential tax status is relevant to the interpretation of the Asset Purchase Agreement. 

First, there is no mention of the Seller Principal’s rights to the tax returns in the agreement. 

Reading the contract as Roberts does makes the distinction between the Seller and Seller Principal 

obsolete and, therefore, contrary to basic contract interpretation principles. See Chaly-Garcia v. 

United States, 508 F.3d 1201, 1204 (9th Cir. 2007) (“Under federal common law, we presume that 

every provision was intended to accomplish some purpose, and that none are deemed 

superfluous.”) (internal quotation marks and citations omitted). 

Second, the Asset Purchase Agreement refers only to “tax returns,” while Roberts claims 

ownership of the broader category of “tax records and receipts” which he defines as including all 

receipts from “invoices, customers, suppliers, [and] vendors.” See Roberts Depo. at 321:15-23 

(defining “tax receipts” as “[e]verything the IRS would ask for in an audit, that’s a tax receipt that 

substantiates the numbers you put on your tax return. Those tax receipts that are in that [sic] 

boxes – that’s invoices, customers, suppliers, vendors – those are the tax receipts of the 

business.”). Roberts points to no provision of the contract, or any other evidence, that 

encompasses this extensive set of documents. In fact, the Asset Purchase Agreement provides 

specifically that all of Omni Pacific’s financial books and records relating to the business since its 

inception were part of the assets Daymon purchased. Roberts Depo., Exh. 19.12

Roberts has not provided any evidence or plausible interpretation of the Asset Purchase 

Agreement that might establish his personal ownership rights over the documents in question. 

Defendants’ motion for summary judgment on this claim is GRANTED.

 

12 It is worth noting that Daymon has allowed Roberts access to records necessary to respond to 

IRS inquiries. Roberts Depo. at 330:7-21.

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IV. INTENTIONAL AND NEGLIGENT MISREPRESENTATION

Roberts’s seventh and eighth claims encompass allegations that defendants falsely 

represented to him that he “would be eligible to start participating in the Daymon Worldwide Inc. 

401(k) Profit Sharing Plan [“401(k) Plan”] and the Daymon Worldwide Inc. Employee Stock 

Ownership Plan [“ESOP”] beginning January 1, 2013.” SAC ¶ 101. However, “Roberts was not 

allowed to participate in the Plan until at least its subsequent enrollment period, July 1, 2013, and 

[] he was never allowed to participate in the ESOP.” Id. ¶ 107. 

The elements of intentional misrepresentation in California are: “(1) a misrepresentation, 

(2) knowledge of falsity, (3) intent to induce reliance, (4) actual and justifiable reliance, and (5) 

resulting damage.” Chapman v. Skype Inc., 220 Cal. App. 4th 217, 230-31 (2013). The elements 

of negligent misrepresentation are similar except that a negligent misrepresentation claim does not 

require knowledge of falsity but instead requires “a misrepresentation of fact by a person who has 

no reasonable grounds for believing it to be true.” Id. at 231; see also Charnay v. Cobert, 145 Cal. 

App. 4th 170, 184 (2006).

Roberts’s allegations are contradicted by the unambiguous written terms of the 

Employment Agreement that he signed with Daymon. The Employment Agreement provides that: 

“As with any [Daymon] benefit plans these may be subject to change at any time.” Roberts Depo., 

Exh. 21. The agreement further states: “[n]o changes to this Agreement shall be valid unless 

contained in a written agreement signed by the Chief Human Resources Officer of Daymon.” Id. 

By signing the agreement, Roberts agreed that he had not “relied on any representations, promises, 

or agreements of any kind made to [him] in connection with [his] decision to accept employment 

with [Daymon] other than those outlined in this offer letter.” Id. 

Roberts opposes defendants’ position because neither the 401(k) Plan nor the ESOP is

specifically mentioned in the Employment Agreement. But the contract does refer to “benefit 

plans.” Roberts provides no reason to exclude the 401(k) Plan or the ESOP from the definition of 

“benefit plans;” in fact, he refers to them as “benefits programs” repeatedly in his complaint. SAC 

¶¶ 104 (“Daymon’s benefits programs (including the [401(k)] Plan and ESOP)”), 110 (same).

Roberts also makes the unpersuasive argument that the “no reliance” provision of the 

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Employment Agreement is inapplicable because he relied on the representations for the purposes 

of selling his business, not in his decision to accept employment. The purpose of an integration 

clause is to prevent precisely this type of argument. Both the Asset Purchase Agreement and the 

Goodwill Purchase Agreement are fully integrated agreements. Roberts Depo., Exh. 18 (“This 

Agreement contains the entire understanding of the parties hereto with respect to the subject 

matter herein contained, and all pre-existing agreements between the parties hereto shall become 

part of and are hereby merged into this Agreement. There are no restrictions, promises, 

warranties, covenants or undertakings other than those expressly set forth herein or in any 

schedule and exhibits hereto.”); Roberts Depo., Exh. 19 (same). Roberts cannot claim that he 

relied on extraneous promises to any of the three agreements in light of the clear intent to have the 

written agreements embody the entire transaction between the parties.

Defendants’ motion for summary judgment on the intentional and negligent 

misrepresentation claims is GRANTED.

CONCLUSION

For the above mentioned reasons, defendants’ motion for summary judgment is 

GRANTED and Judgment shall be entered in accordance with this Order.

IT IS SO ORDERED.

Dated: July 22, 2016

______________________________________

WILLIAM H. ORRICK

United States District Judge

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