Court Opinion

ID: 6113468
Source: CourtListenerOpinion
Date Created: 2022-01-28 00:01:54.451846+00
Date Added: 2024-06-11T08:02:40.478936
License: Public Domain

Filed 1/27/22 White v. Smule, Inc. CA1/4
        NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not
certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not
been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                            FIRST APPELLATE DISTRICT

                                        DIVISION FOUR

 KENNETH ALLEN WHITE,
 II,
              Plaintiff and Appellant,                         A161858

 v.                                                            (San Francisco County
 SMULE, INC.,                                                  Super. Ct. No. CGC-19-
                                                               574328)
      Defendant and
 Respondent.

          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.

       All further statutory references are to the Labor Code
          1

unless otherwise indicated.
                                                      1
      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.

                                 2
                         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

                                 3
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 long-
term 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.

                                 4
   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 at-
will 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.

                                 5
   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

                                  6
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.)

                                  7
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 at-
will 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.

                                  8
                           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)

                                     9
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

                                   10
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

       3Section 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.”
                                  11
       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

                                12
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.
                                   13
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

                                 14
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

                                  15
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 “at-
will.” (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.)

                                 16
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.)

                                17
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

                                 18
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

                                19
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

                                20
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

                                 21
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

                                 22
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

                                23
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

                                24
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

                                 25
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

                                26
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.”
                                27
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)

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