1

Filed 1/27/22; Certified for Pub. 2/18/22 (order attached)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FOUR

KENNETH ALLEN WHITE, 

II,

Plaintiff and Appellant,

v.

SMULE, INC.,

Defendant and 

Respondent.

 A161858

 (San Francisco County

Super. Ct. No. CGC-19-

574328)

Labor Code1 section 970 prohibits employers from inducing 

employees to relocate and accept employment by way of 

knowingly false representations regarding the kind, character, or 

existence of work, or the length of time such work will last. 

(§ 970, subds. (a), (b).) Defendant Smule, Inc. (Smule) develops 

and markets consumer applications with a specialty in music 

social applications. In this case, plaintiff Kenneth White alleges 

a violation of section 970 arising out of discussions he had with 

Smule prior to accepting a position with the company as lead 

project manager.

1 All further statutory references are to the Labor Code 

unless otherwise indicated.
2

Section 970 requires the plaintiff to establish, among other 

elements, justifiable reliance and a knowingly false 

representation. (CACI No. 2710.) Smule moved for summary 

judgment, contending that White alleged false representations 

regarding the length of time his work at Smule would last, but 

evidence of an integrated, “at-will” employment agreement that 

White conceded he read, signed, and understood negated 

justifiable reliance as a matter of law. Smule also argued White 

could not establish that Smule made any knowingly false 

representations. The trial court agreed with Smule’s first 

argument and granted summary judgment. 

On appeal, White contends the trial court erroneously 

found that his undisputed “at-will” employment status meant 

that he could not establish justifiable reliance on alleged 

representations regarding the kind or character of work White 

would perform, rather than the length of time such work would 

last. Broadly construed, White’s complaint encompassed 

allegations of false assurances of long-term employment as well 

as misrepresentations regarding the role White would fill at 

Smule. The “at-will” employment provision negated justifiable 

reliance on the former representations, but not the latter. The 

trial court’s ruling therefore cannot stand, and Smule has not 

established entitlement to summary judgment on an alternative 

ground. Accordingly, we will reverse.
3

BACKGROUND

I. The Operative Complaint

In July 2018, Smule and White discussed the possibility of 

White working for Smule. In these discussions, Smule said it had 

significant problems with its development process, it was not 

operating efficiently, and its lack of an experienced project 

manager had inhibited its growth. Smule stated that it needed 

an experienced project manager who could train, supervise, and 

recruit other experienced project managers; it wanted White to 

develop a functional project management team that would enable 

Smule to grow its business; and it wanted White to join Smule to 

reorganize the company’s project management operations and 

enable it to grow and operate more efficiently. 

Smule’s Vice President of Engineering, Alan Shang, 

elaborated: Shang needed a leader for project managers, and 

project teams and project responsibility need to be restructured; 

Shang hoped White could identify major deficiencies within 30 

days and start bringing in competent personnel; Shang hoped 

reorganization would be substantially complete in one year, but 

understood it could take up to two years; and Shang wanted 

White to develop training protocols and manuals over the next 

couple of years. Shang said that if White could successfully 

reorganize the project manager operations, Smule’s business 

would grow exponentially, and the need for White’s skills would 

continue to evolve and his role would expand. White told Shang 

he wanted a director title, Shang agreed to a title of lead project 

manager, and Shang told White they would revisit the director 
4

title in one year. After White said he was only interested in a 

secure, long-term position where he could grow with a company 

expanding its business, Shang said that was exactly what Smule 

was offering, Smule’s employees were by and large long-term 

employees, and Smule offered a long-term opportunity and was a 

good place to work. Finally, Shang said Smule was intending a 

public offering (IPO) within the next year or two, and White 

would be hired to make Smule more efficient and help make the 

IPO a reality. 

White alleged that Smule’s representations “led [White] to 

reasonably conclude that his job position was long term,” and 

Smule’s representations induced him to resign from his 

employment in Washington and move his family to the Bay Area. 

Five months after White began work, Smule terminated him on 

the stated grounds that his job was being eliminated. White 

alleged, “The representations by [Smule to White] of the longterm nature of his job position were false and known to [Smule] 

to be false. [Smule] did not intend to abide by its statements 

assuring long term employment. It merely wanted to experiment 

with [White] and determine what immediate recommendations 

he would make. Purportedly eliminating his job position after 5 

months was not supported by the operations of Defendant’s 

business and the goals stated by Defendant.” 

II. The Motion for Summary Judgment

Smule moved for summary judgment, contending that 

White could not establish justifiable reliance or knowingly false 

representations. 
5

A. Smule’s Evidence

In support of the first ground for its motion, Smule 

submitted White’s executed employment offer stating, “Smule 

maintains an employment-at-will relationship with its 

employees. This means that both you and Smule retain the right 

to terminate this employment relationship at any time and for 

any reason. All compensation and benefits referred to in this 

letter are subject to your continued employment and satisfactory 

job performance. [¶] This offer letter constitutes our complete 

offer package. Any promises or representations, either oral or 

written, which are not contained in this letter are not valid and 

are not binding on Smule.” In responses to requests for 

admission, White conceded he was an at-will employee and no 

one affiliated with Smule told him that he could only be 

terminated for cause. In deposition testimony, White admitted 

he signed and understood the documents stating his employment 

was at-will; no one explicitly promised him employment for a 

specific period of time or that he could not be terminated; and he 

understood he technically could be terminated at any time. 

Smule submitted declarations from David Steinwedel, the Smule 

employee who referred White, and from Shang stating they never 

communicated to White that he was anything other than an atwill employee; they never promised, committed, or represented to 

White that his employment would be long-term or of any specific 

duration; and they never promised that White would remain 

employed through a date when his stock options would vest. 
6

B. The Opposition

White opposed the motion. He argued that Smule’s 

summary judgment motion missed the point because he did not 

allege a claim for wrongful termination. “The gravamen of 

[White’s] Section 970 claim is that specific representations were 

made to him as to the nature, kind and character of the work he 

was being hired to perform, and the length of time the work 

would require.” White contended that a jury could reasonably 

find that Smule never intended to have Plaintiff perform the job 

functions represented to him during his recruitment, and, 

instead, Smule intended to transfer these functions to a Bulgaria 

office that it had opened. 

White did not dispute that he was an at-will employee, that 

Shang and Steinwedel had not represented otherwise, or that he 

read and understood his employment documents. White 

conceded that Shang and Steinwedel did not tell him that he 

could be terminated for cause only or promise him he would 

remain employed through a date when his stock options would 

vest. 

White disputed that Shang had not committed or 

represented that White’s employment would be long-term or for a 

specific duration. His response to Smule’s undisputed material 

fact on this point stated, “Disputed. The projects, work and goals 

Shang wanted Plaintiff to complete were by th[eir] nature long 

term. Shang emphasized to Plaintiff that the work he needed 

Plaintiff to perform was essential to the long-term growth of 

Defendant. Plaintiff was not interested in short term projects 
7

that would result in short term employment, and would not have 

accepted Defendant’s offer of employment and moved his 

family . . . if he did not believe he was accepting a long term 

employment opportunity.” White submitted a declaration stating 

Shang told him that: Smule was planning aggressive expansion 

over the course of the next few years and needed an experienced

project manager to lead in building out and managing teams of 

project managers; White’s experience would allow him to identify 

and optimize organization processes in engineering and products 

to make Smule’s operations more efficient; Shang wanted White 

to upgrade project management tools, improve release 

management and localization processes, and train Smule’s 

engineers in SCRUM/Agile methodologies; and Shang expected 

within 18 months to two years that White could hire and build 

out an entire group of project managers as the company 

expanded.2 

In response to White’s statement that he wanted stable, 

long-term employment, Shang stated he was looking for White to 

lead the project management efforts to facilitate multi-year 

expansion plans and employment with Smule would offer White 

2 Smule submitted objections to White’s evidence that the 

trial court did not rule on. These objections were deemed 

overruled. (Reid v. Google, Inc. (2010) 50 Cal.4th 512, 534.) They 

are preserved for appeal (ibid.), but the burden is on Smule to 

renew any relevant objection by arguing the issue in its brief. 

Smule asks to “renew” the objections, but it merely cites the 

record below without advancing any argument. This is 

insufficient to raise an issue on appeal. (Duffey v. Tender Heart 

Home Care Agency, LLC (2019) 31 Cal.App.5th 232, 251, fn. 17.) 
8

what he was looking for. White also stated that Shang 

mentioned the Bulgaria office to him during interviews, and, in 

response to concerns White expressed about transferring 

engineering jobs to Eastern Europe, Shang said the Bulgaria 

office was merely to assist the San Francisco office, and Smule’s 

plans included experienced project managers working in San 

Francisco. 

III. The Trial Court’s Ruling

The trial court granted summary judgment. It ruled, 

“Defendant shows that it is undisputed that Plaintiff was an atwill employee and that any representations otherwise are 

unreasonably relied upon, meeting its burden to show that there 

are no triable issues of material fact. Plaintiff does not meet its 

burden to refute.” The trial court also ruled, “In opposition, 

Plaintiff asserts that Defendant’s misrepresentations and his 

reliance on them related to an entirely new and unpled set of 

facts, based on Defendant’s purported undisclosed intention to 

transfer engineering functions to Bulgaria. Plaintiff’s argument 

is rejected. ‘ “The function of the pleadings in a motion for 

summary judgment is to delimit the scope of the issues: the 

function of the affidavits or declarations is to disclose whether 

there is any triable issue of fact within the issues delimited by 

the pleadings.” ’ ”

White timely appealed after the entry of judgment.
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DISCUSSION

I. Standard of Review

Summary judgment is appropriate “if all the papers 

submitted show that there is no triable issue as to any material 

fact and that the moving party is entitled to a judgment as a 

matter of law.” (Code Civ. Proc., § 437c, subd. (c).) A defendant 

meets “his or her burden of showing that a cause of action has no 

merit if the party has shown that one or more elements of the 

cause of action, even if not separately pleaded, cannot be 

established, or that there is a complete defense to the cause of 

action.” (Code of Civ. Proc., § 437c, subd. (p)(2).) Where, as here, 

the defendant moves for summary judgment on the grounds that 

one or more elements of the plaintiff’s claim cannot be 

established, the defendant must present evidence that either 

“conclusively negate[s] an element of the plaintiff’s cause of 

action” or “show[s] that the plaintiff does not possess, and cannot 

reasonably obtain,” evidence needed to establish an element of 

the claim. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 

826, 853–854.) If the defendant meets this burden, the burden 

shifts to the plaintiff to show that a triable issue of one or more 

material facts exists as to the cause of action. (Code of 

Civ. Proc., § 437c, subd. (p)(2).)

The pleadings play a key role in a summary judgment 

motion. “ ‘The function of the pleadings in a motion for summary 

judgment is to delimit the scope of the issues’ ” and to frame “the 

outer measure of materiality in a summary judgment 

proceeding.” (FPI Development, Inc. v. Nakashima (1991)
10

231 Cal.App.3d 367, 381.) The function of the affidavits or 

declarations is to disclose whether there is any triable issue of 

fact put in issue by the pleadings. (Ibid.) “Accordingly, the 

burden of a defendant moving for summary judgment only 

requires that he or she negate the theories of liability as alleged 

in the complaint; that is, a moving party need not refute liability 

on some theoretical possibility not included in the pleadings.” 

(Hutton v. Fidelity National Title Co. (2013) 213 Cal.App.4th 486, 

493 (Hutton).) “In assessing whether the issues raised by 

plaintiff in opposing summary judgment are encompassed by the 

controlling pleading, we generally construe the pleading broadly 

[citation]; but the pleading must allege the essential facts ‘ “ ‘with 

reasonable precision and with particularity sufficient to acquaint 

a defendant with the nature, source and extent of [the] cause of 

action.’ ” ’ ” (Soria v. Univision Radio Los Angeles, Inc. (2016) 

5 Cal.App.5th 570, 585 (Soria).)

On appeal from a summary judgment, we “independently 

determine whether an issue of material fact exists and whether 

the moving party is entitled to summary judgment as a matter of 

law.” (Hutton, supra, 213 Cal.App.4th at p. 493.) We identify the 

issues framed by the pleadings, determine whether the moving 

party’s showing has established facts which negate the 

opponent’s claim and justify a judgment in the moving party’s 

favor, and then determine whether the opposition demonstrates 

the existence of a triable issue of material fact. (Ibid.) In doing 

so, we strictly construe the moving party’s evidence and “liberally 

construe the evidence in support of the party opposing summary 
11

judgment and resolve doubts concerning the evidence in favor of 

that party.” (Yanowitz v. L'Oreal USA, Inc. (2005) 36 Cal.4th 

1028, 1037; Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 

243, 254.) 

II. Section 970

As is relevant here, section 970 states: “No person, or 

agent or officer thereof, directly or indirectly, shall influence, 

persuade, or engage any person to change from one place to 

another in this State or from any place outside to any place 

within the State, or from any place within the State to any place 

outside, for the purpose of working in any branch of labor, 

through or by means of knowingly false representations, whether 

spoken, written, or advertised in printed form, concerning either: 

[¶] (a) The kind, character, or existence of such work ;[¶] [or] (b) 

The length of time such work will last . . . .”3 

3 Section 970 provides in full, “No person, or agent or officer 

thereof, directly or indirectly, shall influence, persuade, or engage 

any person to change from one place to another in this State or 

from any place outside to any place within the State, or from any 

place within the State to any place outside, for the purpose of 

working in any branch of labor, through or by means of 

knowingly false representations, whether spoken, written, or 

advertised in printed form, concerning either: [¶] (a) The kind, 

character, or existence of such work; [¶] (b) The length of time 

such work will last, or the compensation therefor; [¶] (c) The 

sanitary or housing conditions relating to or surrounding the 

work; [¶] (d) The existence or nonexistence of any strike, lockout, 

or other labor dispute affecting it and pending between the 

proposed employer and the persons then or last engaged in the 

performance of the labor for which the employee is sought.”
12

The Legislature enacted section 970 to protect migrant 

workers from abuses by unscrupulous employers, especially 

abuses involving false promises made to induce migrant workers 

to move in the first instance. (Tyco Industries, Inc. v. Superior 

Court (1985) 164 Cal.App.3d 148, 155.) However, section 970 is 

not restricted in application to farm labor or other mass hiring 

situations. (Seubert v. McKesson Corp. (1990) 223 Cal.App.3d 

1514, 1522 (Seubert), disapproved on other grounds by Dore v. 

Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 394, fn. 2 (Dore).) 

To prevail on a Section 970 claim, the plaintiff must prove: (1) 

the defendant made representations to the plaintiff about the 

kind or character of work, or the length of time the work would 

last; (2) the defendant’s representations were not true; (3) the 

defendant knew when the representations were made that they 

were not true; (4) the defendant intended that the plaintiff rely 

on the representations; (5) the plaintiff reasonably relied on the 

representations and changed his or her residence for the purpose 

of working for the defendant; (6) the plaintiff was harmed; and (7) 

the plaintiff’s reliance on the defendant’s representations was a 

substantial factor in causing his or her harm. (CACI No. 2710; 

Funk v. Sperry Corp. (9th Cir. 1988) 842 F.2d 1129, 1133 [section 

970 rests on the tort of deceit].) Under section 972, any person 

who violates section 970 is liable for double damages resulting 

from such misrepresentations.

III. Justifiable Reliance

With his section 970 claim, White contends that Smule, 

through Shang, made false representations to him during his 
13

interview process that induced White to accept a job with Smule 

and move from Washington to California. In White’s opposition 

to the motion for summary judgment below, the representations 

White contended were at issue fall into three groups: (1) 

representations that Smule’s Bulgaria office would assist its 

operations in San Francisco, not replace them, and that Smule’s 

plans going forward included experienced project engineers in 

San Francisco; (2) representations regarding “long-term 

employment” or the “long-term nature” of White’s employment; 

and (3) representations regarding the kind and character of work 

White would be hired to perform—i.e., that Smule needed to, and 

intended to, employ White in a lead project manager role to 

manage other project managers, reorganize project management 

operations, and build and lead a functional project management 

team. As set forth below, White’s “at-will” employment status 

does not, as a matter of law, negate justifiable reliance on 

Smule’s purportedly false representations that it intended to 

employ and maintain someone in the lead project management 

position as described to White.4

White argues that Smule made misrepresentations during 

the hiring process “concerning the tasks he was being hired to 

perform, the goals he was to achieve, [and] the time it was 

4 Smule contends that the two representations about 

Smule’s Bulgaria office that are set forth in White’s additional 

undisputed material fact No. 36 (UMF No. 36) were unpled, and 

White refers to UMF No. 36 on appeal as adding a “new 

misrepresentation.” Given our conclusion that Smule was not 

entitled to summary judgment, we need not address this issue. 
14

expected for him to achieve [those] goals, all of which he relied 

upon in accepting Smule’s employment offer.” He continues, “A 

jury could conclude that [Smule] never intended to employ 

[White] for the purposes stated.” In essence, White contends that 

Smule misrepresented that it intended to employ someone in the 

lead project manager position described to White. These are 

representations regarding the kind, character, or existence of 

work to be performed. (§ 970, subd. (a).) Smule, in contrast, 

paints this action as one concerning only false representations 

regarding the length of time White’s position would last. (§ 970, 

subd. (b).) Thus, we turn first to the scope of White’s section 970 

claim.

Here, the operative complaint gave Smule fair notice of 

White’s claim that Smule misrepresented the kind and character 

of White’s work, in addition to the length of time his employment 

would last. Per the complaint, Smule represented that White 

would be hired as a lead project manager wherein he would 

supervise a team of project managers, identify operational 

deficiencies, and head up reorganization of project management 

operations. “[White] was establishing personnel and procedures 

to implement a high-quality project management team when he 

was abruptly terminated due to his ‘job/role [ ] being 

eliminated.’ ” Further, White alleged that “[t]he representations 

by Defendant to Plaintiff of the long-term nature of his job 

position were false and known to Defendant to be false. 

Defendant did not intend to abide by its statements assuring long 

term employment. It merely wanted to experiment with Plaintiff 
15

and determine what immediate recommendations he would make. 

Purportedly eliminating his job position after 5 months was not 

supported by the operations of Defendant’s business and the goals 

stated by Defendant. The acts of Defendants were in violation of 

Labor Code Section 970.” Read broadly, these allegations gave 

notice of a claim that Smule misrepresented it would employ 

someone in the lead project manager position as described 

(including “train[ing] and supervis[ing] project managers,” 

“recruit[ing] experienced project managers,” and “develop[ing] 

training protocols and manuals” for a “significant reorganization” 

of the project managers White would lead); it did not intend for 

White to fill such a role; and it hired White only to give input into 

Smule’s deficiencies and then eliminated his job. That Smule had 

notice of a claim of this type is borne out by its questioning at 

White’s deposition, during which Smule’s counsel asked whether 

White had any facts to support a suggestion that Smule did not 

intend for White to perform the role described to him, and 

Smule’s use of White’s response to support its summary judgment 

motion on the issue of a knowingly false representation. 

(Cf. Soria, supra, 5 Cal.App.5th at p. 587 [once defendant is on 

notice of a claim through pleading, discovery provides the basis to 

learn the factual grounds for the theories of liability].)

Having concluded that this dispute fairly encompassed 

alleged false representations regarding the kind, character, or 

existence of work White was to perform, we turn to the question 

of whether White’s conceded “at-will” status rendered any 
16

reliance on Smule’s representations unreasonable as a matter of 

law. 

Preliminarily, we observe that, under Dore, supra, 

39 Cal.4th 384, the trial court correctly found that White could 

not reasonably rely on purported promises of long-term 

employment. In Dore, the Supreme Court affirmed a grant of 

summary judgment for an employer where the employee alleged 

he was promised termination only for cause and indefinite 

employment so long as he performed in a competent manner, but 

he signed an “at-will” employment contract.5 (Id. at pp. 393–

394.) The court cited the employee’s deposition testimony that no 

one specifically said he could be fired only for cause and he 

understood the terms of his employment, and the employee’s 

employment letter, which stated his employment would be “atwill.” (Ibid.) The court then held, “For all these reasons, we 

agree with the trial court that Dore’s admission he signed AWI’s 

letter stating his employment was at will and terminable at any 

time as a matter of law defeats any contention that he reasonably 

understood AWI to have promised him long-term employment.” 

(Id. at p. 394.) Like the plaintiff in Dore, White conceded that no 

one at Smule told him he could be fired only for cause, that he 

would be employed for at least a year, or expressly promised 

5 During the interview process, the employee in Dore was 

told the employer needed someone to handle a new account on a 

“long-term basis”; if hired, the employee would “ ‘play a critical 

role in growing the agency’ ”; and the employer was looking for 

“ ‘a long-term fix, not a Band–Aid.’ ” (Dore, supra, 39 Cal.4th at 

p. 387.)
17

employment for a specific time; White executed an integrated 

agreement providing for “at-will” employment that could be 

terminated “any time and for any reason;” and he understood his 

agreement and the meaning of “at-will.”6 

We reach a different conclusion with respect to the alleged 

misrepresentation that White was hired to fill the role of lead 

project manager as described. Here, Agosta v. Astor (2004) 

120 Cal.App.4th 596 (Agosta) is instructive. In Agosta, the court 

reversed a grant of summary adjudication of a promissory fraud 

claim where the employer misrepresented the length of 

employment and compensation terms. (Id. at pp. 602–607.) The 

court noted that an integrated, at-will employment provision 

rendered any reliance upon the alleged promise of long-term 

employment unjustified as a matter of law, but it held otherwise 

6 Authorities relied on by White do not change the lack of 

justifiable reliance on promises of long-term employment. In 

Finch v. Brenda Raceway Corp. (1994) 22 Cal.App.4th 547, 553, 

the court upheld a jury verdict under section 970 where the 

plaintiff established her employer had mispresented that her 

employment would be long-term, but an integrated, at-will 

provision was not at issue. Lazar v. Superior Court (1996) 

12 Cal.4th 631 (Lazar) similarly did not address justifiable 

reliance or an integrated, at-will employment provision when it 

held the plaintiff stated a cause of action for fraudulent 

inducement based on the defendant’s promise of long-term 

employment and assurances of the company’s viability and future 

pay raises. (Id. at pp. 635–637, 649.) Seubert addressed an 

employer’s misrepresentations regarding the character of a sales 

representative’s job, rather than representations regarding the 

length of employment. (Seubert, supra, 223 Cal.App.3d at 

p. 1522.)
18

with respect to the promise regarding compensation terms. 

(Id. at pp. 606–607.) “[A]n ‘at-will’ employer does not have carte 

blanche to lie to an employee about any matter whatsoever to 

trick him or her into accepting employment.” (Id. at p. 607.) Like 

the alleged misrepresentations regarding compensation terms in 

Agosta, an at-will employment provision does not, as a matter of 

law, establish that an employee’s reliance on an employer’s 

promises regarding the kind, character, or existence of work the 

employee was hired to perform is unreasonable. Because Smule 

failed to produce evidence showing that White could not establish 

justifiable reliance on this basis, it was not entitled to summary 

judgment. (Id. at pp. 606, 608 [reversing grant of summary 

adjudication on promissory fraud claim].)

IV. Alternative Grounds for Summary Judgment

Smule contends that, even if we find the trial court’s ruling 

was in error, we should affirm the ruling below on the grounds 

that White could not establish a knowingly false representation 

or actual reliance. (Taylor v. Financial Casualty & Surety, Inc.

(2021) 67 Cal.App.5th 966, 980 [an appellate court affirms a trial 

court’s decision if correct on any ground the parties had an 

adequate opportunity to address].) Smule is not entitled to 

summary judgment on either alternative ground.

A. Knowingly False Representation

“California Labor Code [section] 970 . . . rests on the tort of 

deceit and the scienter requirement.” (Funk v. Sperry Corp., 

supra, 842 F.2d at p. 1133.) In a promissory fraud action, “the 

essence of the fraud is the existence of an intent at the time of the 
19

promise not to perform it.” (Building Permit Consultants, Inc. v. 

Mazur (2004) 122 Cal.App.4th 1400, 1414; Lazar, supra, 

12 Cal.4th at p. 638.) The falsity of the promise and the 

knowledge of that falsity (scienter) are interconnected. (Beckwith 

v. Dahl (2012) 205 Cal.App.4th 1039, 1061–1062.) A promise is 

only false if the promisor did not intend to perform the promise 

when it was made, i.e., had knowledge of its falsity. (Beckwith, at 

p. 1062; see Lazar, at p. 638.) Therefore, the question is whether 

there is a triable issue of fact regarding whether Smule did not 

intend to perform the promises regarding what White would be 

employed to do when these promises were made.

Additional Relevant Evidence

Smule targeted the element of a knowingly false 

representation with its undisputed material fact No. 19 (UMF 

No. 19). UMF No. 19 states, “Where his counsel has allowed him 

to answer, White testified he does not have any facts to 

demonstrate that Defendant knew it was making false 

statements to him. Mr. White’s counsel has repeatedly refused to 

allow him to testify as to whether he is aware of any facts to 

support the allegation in the FAC that Defendant made false 

statements knowing they were false.” Smule relied on the 

following deposition testimony: Counsel asked, “Do you have any 

facts to support your suggestion that on the date you started, 

Smule had no intention of having you perform the role?” White 

responded, “In front of me right now, I can’t say.” White testified 

that he was not aware of any facts that Shang knew the 

statement that Smule would revisit the title of director in one 
20

year was false when made. Smule also submitted deposition 

excerpts wherein White’s counsel instructed him not to answer 

questions asking whether he had any facts to support various 

claims in his lawsuit. 

Along with its moving papers, Smule submitted a 

declaration from Alan Shang, a prior Senior Vice President of 

Engineering. Shang stated that he interviewed White in the 

summer of 2018, that “Smule had a role that it hoped White 

would perform if he chose to accept the company’s job offer,” and 

Shang spoke with White about what he expected White’s role 

would likely entail. He stated, “For a variety of reasons I 

ultimately concluded that [White] did not have the skills 

necessary to successfully perform the job for which he was hired. 

In addition to not accomplishing various tasks as I had hoped he 

might, his attitude was poor and I ultimately found him difficult 

to work and interact with.” Shang terminated White because “in 

roughly January 2019, and based on a variety of factors, a 

decision was made that Smule no longer needed a project 

management function in its United States offices.”

In opposition, White maintained that the falsity of the 

representations and Smule’s knowledge thereof were established 

by Smule’s plan, and execution thereof, to transfer engineering to 

Bulgaria. White submitted a declaration describing statements 

Shang made to him during recruitment regarding White’s role. 

White stated that his duties of handling Internal Request (IR) 

matters and Royalties were transferred to an engineer in 

Bulgaria. White stated that his primary duty was to analyze 
21

operations of Smule, identify inefficiencies, and develop plans for 

organizational improvement. By mid-January 2019, White had 

submitted to Shang a comprehensive, multi-year plan to improve 

Smule’s product and engineering operations. Within two weeks, 

Smule terminated White, stating his job position was being 

eliminated. During the course of 2019, everyone White worked 

with was terminated, including Shang.

White also submitted the deposition testimony described 

below.

a. Jeffrey Smith

White deposed Smule’s CEO, Jeffrey Smith, on October 8, 

2020. Smith was unsure of the date, but testified that Smule 

opened a Bulgaria office about two and a half years prior. The 

purpose of opening this office was to expand Smule’s access to 

talent, but there was no focus on a particular role or talent.

Smule hired Eric Dumas, who lived in Sofia, Bulgaria, as 

its Chief Technology Officer (CTO) sometime after the prior CTO, 

Alex Li, left to start his own business. Dumas helped open the 

Bulgaria office, and prior to that, Smule had three engineers in 

Bulgaria. As of the date of Smith’s deposition, the Bulgaria office 

had engineering, design, and marketing functions, and over 30 

engineers. Smule tried an office in Minsk about 2017, and it 

transferred those roles to Bulgaria. Smith conceded that labor 

costs in Bulgaria, like other places, are lower than in San 

Francisco. When Dumas was hired, it was not Smule’s intent to 

have him start teams “to cover all engineering functions.” 

Rather, Smule’s intent was to scale the workforce because small 
22

companies have a hard time competing for talent in the Bay 

Area.

Smule underwent a restructuring about a year prior to 

Smith’s deposition wherein it eliminated 39 people, including 

Shang. Certain roles and departments were eliminated. 

Engineering teams and project management in San Francisco 

were eliminated, but Smith testified there were currently 

engineers in San Francisco. Smule had to undergo restructuring 

to reduce its costs and remain solvent, and it planned the 

restructuring shortly before it happened. People at Smule were 

very disappointed they had to do a restructuring. It was not a 

plan. Smule did not lay off employees in Bulgaria.

At some point, Smule employed Mary Yang as chief product 

officer, and it let her go for performance issues. Her oversight of 

engineering was transferred to Dumas, and her oversight of other 

departments was transferred to Smith and another employee. 

Two engineering leaders, Shang and Ben Sfard, reported to Yang 

when she was at Smule. Sfard quit, and he was not replaced. 

Smule hired a woman in the Bay Area to replace Shang in the 

summer of 2020.

b. Alan Shang

When Shang worked at Smule, he reported to Alex Li, then 

to Mary Yang, then to Eric Dumas. 

At some point after learning of the opening of the Bulgaria 

office, Shang was informed engineering teams would be built 

there. Shang hired some of the initial engineering leaders for 

Bulgaria. Smule’s broad categories of engineering teams 
23

included server and web, mobile, data, supporting functionality, 

and project management. Over time, engineering teams for 

server and web, mobile, data, and supporting functionality were 

established in Bulgaria. Project management was not 

established there. When the Bulgaria office opened, Smule had a 

full set of engineering teams in the United States. These United 

States teams were not disbanded. Before Shang left, the web 

development for Smule’s website was transferred to Bulgaria, the 

build and release team was to be transferred there, and IR was 

transferred there to free up United States engineers to work on 

product features. Shang worked with the CTO to transfer the 

web development, but he was not aware of a plan to transfer all 

engineering to Bulgaria. In Bulgaria, Smule did not have a 

project management team and engineer managers performed 

those responsibilities. When Shang was laid off, 20 to 30 of the 

engineering employees he supervised in the United States were 

let go.

Shang confirmed that he discussed with White the goals of 

the position to be filled by White during interviews. Shang told 

White he wanted him “[t]o mange the projects. That includes the 

timeline, working with different parties, solve dependencies, 

[and] align and allocate resources.” The long-term goals that 

Shang wanted White to achieve were to “build a strong project 

management team between the less senior project managers and 

between the engineering project management, in case Smule 

grew a lot bigger, to manage bigger projects across departments 

and across continents.” Counsel asked Shang, “So did you 
24

envision the project management team expanding?” He 

responded, “I did not envision it going one way or another. There 

was the possibility for the project management team to expand. 

And if it did expand, we would have needed a bigger, stronger 

project management team.” Smule had two project managers 

when White was hired. Shang terminated White because the role 

of the manager for the project management team was eliminated, 

but Shang denied having reached a conclusion that White did not 

have the requisite skills.

c. David Steinwedel

Steinwedel was deposed on September 10, 2020. He 

referred White to Smule and believed Shang took over from 

there. At some point, Steinwedel was told that project 

management as a function was to be dissolved in the United 

States, and he testified the function was absorbed as part of the 

duties of the engineering directors that head each team of 

engineers. As of the date of his deposition, there were at least 

five engineering directors: four were in Bulgaria, and one was in 

San Francisco. Steinwedel was aware of one job position—client 

engineering—that was transferred to Bulgaria, as well as some 

instances of attrition where a couple product manager and 

designer spots were filled in Bulgaria. The client engineering 

team had consisted of approximately 15 employees in San 

Francisco who were let go. 

B. Analysis

As a preliminary matter, it appears the evidence Smule 

relied on in UMF No. 19 did not satisfy its burden of showing 
25

White did not possess, and “[could not] reasonably obtain,” 

evidence that Smule made promises with no intent to perform. 

(Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 854.) 

White may have lacked personal knowledge of the intent at issue, 

but that did not conclusively establish that he could not prove 

such intent. (See Villa v. McFerren (1995) 35 Cal.App.4th 733, 

749 (Villa) [burden did not shift in suit alleging conspiracy 

between defendant and plaintiff’s insurer with testimony plaintiff 

was personally unaware of any communications between the two;

there was no basis to believe plaintiff would have such personal 

knowledge].) Similarly, counsel’s objection to what he deemed 

“legal contention” questions and his instruction to White not to 

answer did not satisfy Smule’s burden. (Gaggero v. Yura (2003) 

108 Cal.App.4th 884, 891–893 [defendant failed to show plaintiff 

lacked requisite evidence to shift burden where record disclosed 

only counsel’s ill-taken privacy objections and instruction not to 

answer].)

Nonetheless, Shang’s declaration, read with White’s 

evidence, sufficiently filled the gaps, and shifted the burden. 

(Villa, supra, 35 Cal.App.4th at pp. 750–751 [in determining 

whether burden of proof has shifted, a court must consider all 

papers before it, including opposing party’s evidence].) Shang 

provided evidence that Smule had a role in mind for White in the 

summer of 2018 when Shang and he discussed White’s potential 

employment, Smule hoped that White would perform this role if 

he joined the company, Shang hoped White would succeed, and 

Shang talked to White about what the role would entail. White’s 
26

declaration sets forth the representations made by Shang 

regarding the role, and White submitted Shang’s deposition 

testimony describing White’s goals. In January 2019, Smule 

determined that it no longer needed a manager to manage the 

project management team, and White was terminated for this 

reason. 

Looking to White’s showing, the following responsive 

evidence created a triable issue of fact as to whether Smule 

knowingly misrepresented that White was hired to fill the role of 

lead project manager as described. Shang made clear when he 

interviewed White that Smule “required” an experienced project 

manager to lead in building out and managing teams of project 

managers. (Italics added.) Yet, only months after White started, 

his position was completely eliminated because Smule decided, 

based on an unexplained “variety of factors,” the position was no 

longer needed in the United States. 

During his time at Smule, White analyzed Smule’s 

operations and developed a comprehensive, multi-year plan to 

improve Defendant’s product and engineering operations. Smule 

did not dispute this, nor White’s characterization of his plan as 

one “to improve Defendant’s product and engineering operations.” 

Within two weeks of White’s submission of this plan, he was 

terminated. White stated Shang was impressed by his plan, and 

the plan was ready for implementation by Smule’s engineering 

department. Moreover, conflicting statements exist regarding 

the circumstances of White’s termination. Smule presented as 

undisputed material facts certain statements from Shang’s 
27

declaration, in which Shang stated he ultimately concluded 

White did not have the skills necessary to successfully perform 

the job for which he was hired, White did not accomplish various 

tasks as Shang had hoped, and White was difficult to work with. 

White controverted this showing with Shang’s deposition 

testimony, wherein Shang denied having concluded that White 

did not have the skills necessary to be a lead program manager 

and Shang stated that the reason for White’s termination was the 

elimination of his job position. Taken together, a reasonable trier 

of fact could infer from this circumstantial evidence that Smule 

never intended to employ someone in the lead project manager 

position as represented to White, instead desiring nothing more 

from White than a consultation or improvement plan on how 

Smule could enhance its operations.7

C. Actual Reliance

Finally, we decline Smule’s invitation to affirm the ruling 

below based on White’s alleged lack of actual reliance. Even if we 

may affirm a summary judgment on a ground not relied upon by 

the trial court, it must be a “ground that the parties had an 

adequate opportunity to address in the trial court.” (Securitas 

Security Services U.S.A., Inc. v. Superior Court (2011) 

197 Cal.App.4th 115, 120.) Smule did not move for summary 

judgment based on White’s inability to establish actual reliance, 

7 Having found a triable issue of fact as set forth above, we 

need not discuss White’s contention that a triable issue of fact 

exists because the falsity of the representations Smule made and 

Smule’s knowledge thereof “are established by [Smule’s] plan and 

execution thereof to transfer engineering functions to Bulgaria.” 
28

so Smule did not meet its burden of showing summary judgment 

was warranted, and the parties had no opportunity to present 

evidence appropriately on the issue. In these circumstances, it 

would be improper for us to affirm the trial court’s summary 

judgment ruling on this basis.

DISPOSITION

The judgment is reversed.

BROWN, J.

WE CONCUR:

POLLAK, P. J.

STREETER, J.

White v. Smule, Inc. (A161858)
1

Filed 2/18/22

CALIFORNIA COURT OF APPEAL

FIRST APPELLATE DISTRICT

DIVISION FOUR

KENNETH ALLEN WHITE, II,

 Plaintiff and Appellant,

 v.

SMULE, INC.,

 Defendant and Respondent.

A161858

San Francisco County

Sup. Ct. No. CGC19574328

BY THE COURT:

The written opinion which was filed on January 27, 2022, has now been 

certified for publication pursuant to rule 8.1105(b) of the California Rules of 

Court, and it is ordered published in the official reports.

Date:___________________________ ________________________________P.J.

 J. Pollak
2

Trial Court: San Francisco City & County Superior Court

Trial Judge: Hon. Ethan Schulman

Counsel: Law Offices of Lipow & Harris, Jeffrey Lipow; Law Offices of Durham & 

Ng and Jonathan Durham for Plaintiff and Appellant.

Gattey Law Office and Scott D. Gattey for Defendant and Respondent.

White v. Smule (A161858)