Hon. Patricia Collins (Ret.)
ADR Services, Inc.
915 Wilshire Blvd.
Los Angeles, CA 90017
Hon. Eric E. Younger (Ret.)
ADR Services, Inc.
915 Wilshire Blvd.
Los Angeles, CA 90017
A related matter, ICDR Case No. 72-20-1300-1067, between ELV Components Recycling and Scott Vollero, et al., is subject to an arbitration clause contained in the Assets Purchase Agreement dated May 16, 2011 between those parties. While the instant case and that case, in which Hon. Eric E. Younger is the sole Arbitrator, have been consolidated for certain purposes, including discovery and some briefing and testimony, the latter case (No. 72-20-1300-1067) will be resolved after the completion of this matter.
First - Breach of Fiduciary Duty
Second - Declaratory Relief
Third - Breach of Contract
Fourth - Breach of Implied Covenant of Good Faith and Fair Dealing
Fifth - Equitable Indemnity
Sixth - Invasion of Privacy
Seventh - Civil Code §1708.8 (Invasion of Privacy)
Eighth - Declaratory Relief
Proximate cause requires a direct link between the fraud (or in this case, omission) and the damages sustained. See, e.g., Las Palmas Associates v. Las Palmas Center Associates, 235 Cal. App. 3d 1220 (1991) ("To recover damages for fraud, a plaintiff must have sustained damages proximately caused by the misrepresentation. [Citation] A damage award for fraud will be reversed where the injury is not related to the misrepresentation. [Citation]"). In other words, TAI must show that its damages were directly caused by Mr. Vollero’s wrongdoing. And... TAI has not and could not have met that burden.
To prove actionable fraud, TAI would have to show that it relied on the misrepresentation or omission, and, for purposes of this discussion, the Panel will assume that it did and that it would not have purchased Autocats if TAI knew of the prior counterfeiting7 and would adopt all of the findings described in the dissent under "I. The Counterfeiting Activity." But that assumption is not enough to merge the concepts of reliance and proximate cause or permit recovery without the latter: "Assuming... a claimant's reliance on the actionable misrepresentation, no liability attaches if the damages sustained were otherwise inevitable or due to unrelated causes." (Goehring v. Chapman University (2004) 121 Cal.App.4th 353, 365, 17 Cal.Rptr.3d 39, citing Kruse v. Bank of America (1988) 202 Cal.App.3d 38, 60, 248 Cal.Rptr. 217.) The law remains that "reliance and proximate causation are distinguishable,..." (OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 870, 68 Cal.Rptr.3d 828) See also Gold v Los Angeles Democratic League (1975) 49 Cal.App.3d 365, 374, 122 Cal.Rptr. 732, which holds "[t]o state a cause of action at law based upon fraud,... the plaintiff must allege not only reliance but that, by reason of the fraud, he has suffered pecuniary damage in some amount." Clearly, in addition to reliance, TAI must prove that Vollero’s omission caused damages.8
To prevail on a civil RICO claim, a plaintiff must prove that the defendant engaged in (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity and, additionally, must establish that (5) the defendant caused injury to plaintiffs business or property. 18 U.S.C. §§ 1962(c), 1964(c). The "fifth element includes two related components. First, a civil RICO plaintiff must show that his injury was proximately caused by the [prohibited] conduct. Second, the plaintiff must show that he has suffered a concrete financial loss." Fireman’s Fund Ins. Co. v. Stites, 258 F.3d 1016, 1021 (9th Cir. 2001) (citation omitted). * * * Congress enacted RICO "to combat organized crime, not to provide a federal cause of action and treble damages" for personal injuries. Id. at 786.
Therefore, "a RICO plaintiff only has standing if, and can only recover to the extent that, he has been injured in his business or property by [reason of] the conduct constituting the violation.'" Holmes v. Securities Investor Prot. Corp., 503 U.S. 258,279, 112 S.Ct. 1311, 117 L.Ed.2d 532 (1992) (O'Connor, J., concurring) (alteration in original) (quoting Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985)). Moreover, the defendant's violation of § 1962 must be the proximate cause of plaintiffs injury. Id. at 265-68, 112 S.Ct. 1311.
(1) the defendant concealed or suppressed a material fact;
(2) the defendant was under a duty to disclose the fact to the plaintiff;
(3) the defendant intentionally concealed or suppressed the fact with intent to defraud the plaintiff;
(4) the plaintiff was unaware of the fact and would have acted differently10 if she had known of the concealed or suppressed fact; and
(5) the plaintiff sustained damage as a result of the concealment or suppression." (Claimant’s brief, p. 28)
• Exhibit 10166, as recently as 2014, finds one executive calling Haraguchi13 "even worse than" yet another (Okamura), and "being very upset about his attitude;" "he should have been fired." Instead of firing him, TAI made him ELV’s president!
• Exhibit 10021 also speaks of Haraguchi, and says "If [he] is trying to negotiate to go around company policy there will be repercussions."
• Exhibit 10253 says "Haraguchi's communication regarding a TAI negotiating position is completely unacceptable...."
• Exhibit 10024, for example, finds Arthur Harrison’s decrying being "sick and tired of being informed after [events]," that "Haraguchi feels absolutely no need to report anything to me," of "unacceptable" communications practices and "continued deceptive practices of this management team [which] are unacceptable to me."
1st - Breach of Fiduciary Duty
2nd - Declaratory Relief
3rd - Breach of Contract
4th - Breach of Implied Covenant of Good Faith and Fair Dealing
5th - Equitable Indemnity
8th - Declaratory Relief