Opinion ID: 4437728
Heading Depth: 2
Heading Rank: 1

Heading: The California Litigation

Text: Upon the disposition of the Board’s charges, Jesse asked Malcmacher to pay his attorney’s fees. Malcmacher refused, prompting Jesse to file suit against Malcmacher and the AAFE in California. In the complaint, Jesse alleged that Malcmacher and the AAFE: (1) intentionally misrepresented the scope of the Board’s scrutiny as outlined in the cease and desist letter, as the letter “clearly stated that [Malcmacher’s] workshops [were] illegal”; (2) intentionally concealed the Board’s cease and desist letter; (3) falsely promised to reimburse Jesse for any attorneys’ fees -3- Case Nos. 18-3698/3705, Malcmacher, et al. v. Jesse he incurred defending against the Board’s charges; (4) negligently misrepresented to Jesse that the activities Malcmacher instructed Jesse to perform at the February seminars did not violate California law; (5) breached the oral contract they entered into with Jesse wherein they promised to pay his attorneys’ fees; (6) breached the covenant of good faith and fair dealing; (7) violated California laws prohibiting elder abuse; and (8) negligently developed the seminars such that they included “practices which [the Board] considered” unlawful under California law. Malcmacher responded with a counterclaim, alleging that Jesse breached the AAFE contracts. In discovery, Malcmacher asked: “what allegedly were you giving to AAFE in return for the alleged promise to pay your legal fees?” to which Jesse responded, “I don’t know.” Malcmacher asked again: “Did you promise anything to AAFE or [Malcmacher]?” Jesse replied: “No.” The district court granted Jesse’s motion for summary judgment on Malcmacher’s counterclaim. It granted in part and denied in part Malcmacher’s motion for summary judgment. Jesse v. Malcmacher, No. 5:15-cv-01677, 2016 WL 9450683, at  (C.D. Cal. Apr. 4, 2016). The court dismissed Jesse’s claims for intentional and negligent misrepresentation, elder abuse, false promise, and negligence, reasoning that Jesse had failed to produce evidence to support those claims. Id. at -10. Nevertheless, it held that summary judgment was improper with respect to Jesse’s concealment, breach of contract, and breach of covenant of good faith claims because the record contained disputed facts regarding whether Malcmacher and Jesse entered an oral agreement, and, if so, whether that agreement was supported by consideration. Id. at . Jesse’s claims that survived summary judgment failed at trial. The court directed a verdict in favor of Malcmacher on Jesse’s breach of contract and breach of covenant of good faith claims, -4- Case Nos. 18-3698/3705, Malcmacher, et al. v. Jesse reasoning that Jesse failed to present “any evidence [on which] a reasonable jury could find that” consideration supported the oral contract, if any. Finally, the jury returned a verdict in favor of Malcmacher on Jesse’s concealment claim.