Home Mortgage Alliance Corporation (HMAC) vs. Turturro

CUTSA does not affect “(1) contractual remedies, whether or not based upon misappropriation of a trade secret, (2) other civil remedies that are not based upon misappropriation of a trade secret, or (3) criminal remedies, whether or not based up on misappropriation of a trade secret.” (Civ. Code § 3426.7(b).)

CUTSA “does not displace noncontract claims that, although related to at trade secret misappropriation, are independent and based on facts distinct from the facts that support the misappropriation claim. [Citations.]” (Angelica Textile Services, Inc. v. Park (2013) 220 Cal.App.4th 495, 506.)

Courts look to the gravamen of the complaint (its ‘gist’) to determine whether CUTSA displaces a common law cause of action. (Guild Mortgage Co. LLC v. CrossCountry Mortgage LLC (2026) 120 Cal.App.5th 885, 899 (“Guild Mortgage”).) The phrase “based upon misappropriation” “strongly suggests a factual inquiry, one that examines the conduct alleged in the claim.” (K.C. Multimedia, supra, 171 Cal.App.4th at p. 958.)

As a threshold matter, although CUTSA may preempt the tort causes of action other than the first cause of action for misappropriation of trade secrets based on the alleged wrongful scheme to steal confidential information and trade secrets to start a new mortgage division at OCMBC, that is not all that is alleged in the SAC. It is generally alleged that Turturro conspired with OCMBC “to effectively steal the entirety of the same “Jet Mortgage” Division from HMAC – including but not limited to HMAC’s employees, Confidential Information, pipeline, resources, and trademarks - through a deliberate and premediated series of unlawful acts.” (SAC, ¶ 45.)

It is alleged that Turturro misappropriated HMAC’s Confidential Employee Information, as well as that Turturro and OCMBC “raided the same employees that HMAC engaged Turturro to hire, train, and develop for HMAC,” and “convinced them to resign from HMAC and instead work for OCMBC.” (SAC, ¶ 46.) It is additionally alleged that Turturro and OCMBC unlawfully infringed on HMAC’s “Jet Mortgage” trade name. (SAC, ¶ 47.) These allegations are incorporated into every cause of action at issue.

The Court finds the facts alleged here similar to that in Guild Mortgage. In Guild Mortgage, the complaints alleged that plaintiff (Guild) and defendant (CCM) were rival nationwide residential mortgage lenders, and during an 18-month period, defendant induced and conspired with several of plaintiff’s Kirkland, Washington branch employees “to gut the branch by (1) recruiting their colleagues at Guild to come work for CCM, (2) diverting Guild’s customers to CCM, and (3) converting Guild’s pipeline of active loan applications to CCM—all while those employees were still employed, and being paid, by Guild.” (Guild Mortgage, supra, 120 Cal.App.5th at p. 889.)

It was also alleged that in furtherance of the conspiracy, “CCM and its coconspirators accessed Guild’s computer system and, without Guild’s knowledge or authorization, copied valuable confidential information that was stored on the system and then used that information to help CCM gain a competitive advantage over Guild.” (Ibid.) It was additionally alleged that the conspiracy resulted in a mass resignation of all or virtually all of the dozens of Guild employees who had been working at the Kirkland branch, in CCM’s hiring of many of those employees, and in Guild losing the entire Kirkland branch. (Id. at p. 890.)

Here, in a similar vein, the SAC alleges that “Turturro was recruited by OCMBC and conspired with OCMBC to steal HMAC’s trade, by stealing its Confidential Information, its brand, and its goodwill.” (SAC, ¶ 40.) It is alleged that Defendants misappropriated HMAC’s Confidential Employee Information, Confidential Customer Information, trademark, tradename, and/or trade secrets, and raided its employees, to “effectively steal the entirety of the same ‘Jet Mortgage’ Division from HMAC.” (SAC, ¶¶ 45, 49.) In this regard, “the conduct alleged here goes far beyond merely taking and using confidential information” as the Court of Appeal in Guild Mortgage found. (Guild Mortgage, supra, 120 Cal.App.5th at p. 900.)

The factual distinctions identified by Defendants that HMAC and OCMBC operate in the wholesale mortgage space where independent brokers are free to do and work with multiple lenders, not individuals borrowers, and that there was no branch destruction or total loss of an operating unit as Jet Mortgage has continuously operated since Turturro’s departure, are irrelevant to determining the gravamen or gist of the SAC or each at issue cause of action.

The third cause of action for Inducing Breach of Contract contends that OCMBC intentionally caused Turturro to breach the Offer Letter, Executive Compensation Agreement, Confidentiality Agreement, and Mutual Confidential Disclosure Agreement, and that OCMBC intended to cause Turturro to breach these agreements as it obtained the fictitious business name “Jet Advantage Mortgage” before Turturro’s separation with HMAC, and by the existence of draft employee agreements prepared by OCMBC for the eventual hiring of then current HMAC employees. (SAC, ¶¶ 74-76.)

It is alleged that OCMBC’s misconduct caused Turturro to breach the Agreements, and seeks, among other things, an injunction prohibiting OCMBC from further causing Turturro’s breach of the Agreements, and from further using or disclosing HMAC’s Confidential Information and requiring OCMBC to return HMAC’s Confidential Information. (SAC, ¶¶ 77, 80.) The alleged breach by Turturro includes an breach of an agreement to avoid “any personal interests or relationships that actually or potentially conflict with the best interests of the Company” and stole HMAC’s trade name, “Jet Mortgage,” as well as engaged in conflicts of interest and breaches of fiduciary and tort duties by competing with HMAC and stealing HMAC’s business and property. (SAC, ¶¶ 68-70.)

Based on the allegations, the alleged misappropriation of trade secrets is a mechanism by which Defendants allegedly stole the entirety of the same ‘Jet Mortgage’ Division from HMAC, and it is also alleged that Defendants misappropriated HMAC’s trade, brand, and goodwill. In turn, the second cause of action is not displaced by CUTSA.

The fourth cause of action for Intentional Interference with Broker Contracts is based on the alleged disruption of HMAC’s broker relationships by misappropriating HMAC’s trade name, answering calls as “Jet” to deliberately confuse callers, improperly soliciting HMAC’s mortgage brokers by pretending to be “Jet Mortgage” (HMAC), and misrepresenting to mortgage brokers that “Jet Mortgage” (HMAC) was going to of business. (SAC, ¶¶ 84-85.) As such, it is not based on a misappropriation of trade secret.

The fifth cause of action for Intentional Interference with Prospective Economic Relations alleges that Defendants “engaged in wrongful conduct as alleged throughout this Complaint, including, without limitations, their theft of HMAC’s trade name ‘Jet Mortgage,’ theft of HMAC’s brokers relationships, theft of HMAC’s Confidential Information, including its client lists, customer data, loan databases, and other wrongful conduct.” (SAC, ¶ 92.) This cause of action is not based entirely on the same factual allegations that form the basis of the cause of action for misappropriation of trade secrets, and is based on facts that are unrelated to the alleged misappropriation of any trade secret.

The sixth cause of action for Breach of Fiduciary Duty alleges that Turturro owed HMAC and its shareholders fiduciary duties in his role as corporate officer, as well as had contractually imposed fiduciary duties, and that these fiduciary duties of care and loyalty “entail[ed] treating HMAC with care and engaging in reasonable conduct, being open and honest with HMAC, acting in good faith and in HMAC’s best interest, putting his relationship and HMAC above personal interests, and avoiding self-dealing and conflicts of interest.” (SAC, ¶ 102.) It is alleged that Turturro engaged in wrongful conduct and self-dealing, in breach of his fiduciary duties. (SAC, ¶ 103.) Under these allegations, this cause of action is not based on trade secret misappropriation.

The seventh cause of action for Aiding and Abetting Breach of Fiduciary Duty alleges that OCMBC is responsible for HMAC’s harm from Turturro’s breaches of fiduciary duty as it aided and abetted Turturro in committing those breaches by “obtaining the infringing fictious name ‘Jet Advantage Mortgage,’ drafting employment agreements intended for then current HMAC employees at a time prior to Turturro’s departure from HMAC, and carrying out the conspired plan by utilizing its infrastructure to further steal HMAC Confidential Information and its trade name ‘Jet Mortgage,’ including, without limitation, utilizing its website domain, social media accounts, physical address, and other corporate assets to further assist Turturro in his theft of HMAC’s trade.” (SAC, ¶ 111.) As HMAC’s breach of fiduciary claim is not based on trade secret misappropriation, nor is OCMBC’s alleged aiding and abetting of Turturro’s breach of fiduciary duties based on trade secret misappropriation.

The ninth cause of action for Accounting is based upon all of the allegations alleged above, and thus, is based on alleged wrongful conduct other than the misappropriation of trade secrets, as discussed above. (SAC, ¶¶ 126-128.)

The twelfth cause of action for Violation of Business & Professions Code section 17200 incorporates the prior allegations above, and alleges that “Defendants’ foregoing misconduct constitutes unlawful, unfair, and fraudulent business acts and practices under Business and Professions Code sections 17200, et seq. and has harmed HMAC and deprived it of, inter alia, skilled employees, name, goodwill, mortgage applications, and mortgage brokers.” (SAC, ¶¶ 144-145.) Based on these allegations, the twelfth cause of action is not based entirely on the misappropriation of trade secrets, but is also based upon trademark infringement and breach of fiduciary duty, among other misconduct.

The thirteenth cause of action for Conversion alleges: “HMAC possesses a property right over its electronic and hard copy files, including but not limited to various databases, loan files and portfolio, contracts, correspondence and attachments, contracts and agreements, marketing materials and related reports and spreadsheets, as well as customer lists, client lists, relating reports, existing loan and pipeline loans, employee information, marketing plans, and market research. HMAC also possesses a property interest in its Confidential Information.” (SAC, ¶ 149.)

It is also alleged that under Labor Code section 2860, “everything that Turturro acquired by virtue of his employment at HMAC, except his compensation, remained the sole property of HMAC during and after Turturro’s employment.” (SAC, ¶ 150.) It is alleged that Turturro substantially interfered with HMAC’s property, including its Confidential Information, by knowingly and intentionally taking wrongful possession of, among other things, HMAC’s electronic and hard copy files, documents, communications, and databases, HMAC’s trade name “Jet Mortgage” and all designs, sketches, drawings, and models that make up the trade name. (SAC, ¶ 151.)

Thus, this cause of action is not based entirely upon misappropriation of trade secrets.

The fourteenth cause of action for Violation of Penal Code section 496(c) provides for a civil cause of action for a person who has been damaged as a result of theft, and alleges that Defendants intentionally and substantially interfered with HMAC’s exclusive possession of its property as pled above, including in paragraphs 150-152. (SAC, ¶¶ 158-159.) As such, consistent with the thirteenth cause of action, which contains the allegations in paragraphs 150-152, the fourteenth cause of action is not based solely on the misappropriation of trade secrets.

Lastly, the fifteenth cause of action for violation of Penal Code section 502 alleges: “Turturro and OCMBC’s theft as pled above, including in Paragraphs 150-152, was carried out through Turturro’s knowing access and unauthorized use of HMAC’s data, computers, computer systems or computer networks to execute Defendants’ scheme and conspiracy to defraud, deceive, extort, and take wrongful control of HMAC’s property, including its Confidential Information.” (SAC, ¶ 162.) Consistent with the thirteenth cause of action which contains the allegations in paragraphs 150-152, the fifteenth cause of action is not based solely on the misappropriation of trade secrets.

Additionally, the Court of Appeal in Guild Mortgage concluded that CUTSA does not displace civil claims under Penal Code section 502 for two independent reasons. (Guild Mortgage, supra, 120 Cal.App.5th at pp. 903-904.) First, because the social ills that CUTSA targets are different from the social ills the CCDAFA targets, and that “[t]his places the private right of action afforded by CCDAFA within the category of ‘other civil remedies . . . not based upon misappropriation of a trade secret’ (Civ.

Code § 3426.7, subd. (b)(2)) that the CCDAFA, by its terms, ‘does not affect.’ [Citation.]” (Id. at p. 904.) As to the second reason, the Court of Appeal stated: “Second, given the fact that the Legislature chose to expand the degree of protection afforded by Penal Code section 502 by enacting a civil enforcement mechanism for it in the very same month (September 1984) in which it enacted CUTSA, we deem it implausible that the Legislature would have intended the civil remedy it added to one statutory framework to be swallowed up to so great an extent by the other statutory framework.” (Ibid.)

As a review of the allegations making up the subject causes of action indicates that each of these causes of action are not based entirely on the misappropriation of trade secrets, and is based on other alleged wrongful conduct, such claims are not displaced by CUTSA. The motion judgment on the pleadings to Plaintiff’s causes of action for: Inducing Breach of Written Contract (third cause of action), Tortious Interference with Contract (fourth cause of action), Tortious Interference with Prospective Economic Advantage (fifth cause of action), Breach Fiduciary Duty (sixth cause of action), Aiding and Abetting Breach Fiduciary Duty (seventh cause of action), Accounting (ninth cause of action), Unfair Competition (twelfth cause of action), Conversion (thirteenth cause of action), and Violation of Penal Code sections 496(c) (fourteenth cause of action) and Violation of Penal Code section 502 (fifteenth cause of action) based on CUTSA preemption is DENIED.

Fourth and Fifth Causes of Action Defendants separately contend that they are entitled to judgment on Plaintiff’s fourth and fifth causes of action for Tortious Interference with Contract and Tortious Interference with Prospective Economic Advantage, respectively, because Plaintiff fails to identify any specific third-party contract or specific prospective economic relationship as required by law. HMAC contends that the SAC identifies the category of contracts at issue for the fourth cause of action, and that any perceived lack of specificity would be curable by amendment. HMAC also contends that to the extent Defendants raise the same specificity objection as to the identity of the brokers and borrowers for the fifth cause of action, the independently wrongful element is satisfied by the trademark and fraud allegations regardless of CUTSA.

The tort of interference with the performance of a contract and interference with a prospective economic relationship are related but distinct. (Ixchel Pharma, LLC v. Biogen (2020) 9 Cal.5th 1130, 1141.) “Tortious interference with contractual relationship requires ‘(1) the existence of a valid contract between the plaintiff and a third party; (2) the defendant’s knowledge of that contract; (3) the defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.’ [Citations.]” (Ibid.) “Tortious interference with contractual relationship requires ‘(1) the existence of a valid contract between the plaintiff and a third party; (2) the defendant’s knowledge of that contract; (3) the defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.’ [Citations.]” (Ibid.)

Here, the fourth cause of action alleges that “broker agreements existed between HMAC and numerous mortgage brokers.” (SAC, ¶ 82.) Therefore, it sufficiently identifies the third-party contracts at issue.

The fifth cause of action alleges that “HMAC was in an economic relationship with numerous mortgage brokers and borrowers that likely would have resulted in an economic benefit to HMAC,” and that Defendants disrupted such relationships by their wrongful conduct. (SAC, ¶¶ 90, 93.) Therefore, it sufficiently identifies the specific prospective economic relationships.

The Court DENIES the motion for judgment on the pleadings as to the fourth and fifth causes of action.

Sixth Cause of Action

Defendants contend that OCMBC is entitled to judgment on Plaintiff’s sixth cause of action for breach of fiduciary duty cause of action because there are no allegations that OCMBC owed Plaintiff any fiduciary duties, and no such allegation could be made as OCMBC is a third-party and is not alleged to have been employed by, or have any other special relationship with, Plaintiff.

HMAC’s opposition does not address this argument.

The three elements of a cause of action for breach of fiduciary duty are the existence of a fiduciary relationship, breach of fiduciary duty, and damages. (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 820.)

The sixth cause of action is brought against Turturro and OCMBC. However, there are no allegations in the SAC supporting the existence of a fiduciary relationship between HMAC and OCMBC, nor does it appear that this deficiency could be rectified by amendment. Therefore, the Court GRANTS, without leave to amend, the demurrer to the sixth cause of action as to Defendant OCMBC only.

Ninth Cause of Action

Defendants contend that they are entitled to judgment on Plaintiff’s ninth cause of action for Accounting because it is not standalone cause of action in California.

HMAC contends that an accounting is derivative of HMAC’s substantive claims that support equitable relief, and because HMAC’s fiduciary duty, interference, trademark, passing-off, contract, and statutory claims survive, the corresponding request for an accounting likewise survives.

The elements of a cause of action for an accounting are: (i) a relationship exists between the plaintiff and defendant that requires an accounting; and (ii) some balance is due the plaintiff that can only be ascertained by an accounting. (Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 179.) A fiduciary relationship is not required for a cause of action for accounting. (Ibid.) All that is required is some relationship requiring an accounting, such as possession by the defendant of money or property which defendant may be obligated to surrender. (Id. at pp. 179-180.)

An accounting is treated as a cause of action available to a wronged fiduciary, and is an equitable form of remedy dependent upon a substantive basis for liability. (Glue-Fold, Inc. v. Slautterback Corp. (2000) 82 Cal.App.4th 1018, 1023, fn. 3.)

Here, as HMAC’s other causes of action remain viable, including those to which Defendants do not demur, the ninth cause of action for accounting also remains viable. The Court DENIES the motion for judgment on the pleadings as to the ninth cause of action.

Defendants to file and serve an Answer to the SAC within 10 days.

Cross-Defendant Michael Turturro’s Motion for Judgment on the Pleadings Defendant/Cross-Complainant, Michael Turturro (“Turturro”), moves for judgment on the pleadings, without leave to amend, in favor of Cross-Complainant on the eleventh and twelfth causes of action in Cross-Complainants’ Second Amended Cross-Complaint, and dismissing with prejudice Home Mortgage Alliance Corporation’s claim for breach of written contract in Plaintiffs’ Second Amended Complaint.

As a threshold matter, the Court notes that the Second Amended Cross-Complaint has not been formally filed.

On June 2, 2026, the parties filed a Joint Stipulation to Continue Trial Date, Permit Filing of Second Amended Cross- Complaint, Set Mediation, and Set Discovery Schedule (“Joint Stipulation”), which states, in relevant part: “HMAC stipulates and agrees to the filing of Cross-Complainants Michael Turturro and Jet Alliance’s Second Amended Cross- Complaint (“SACC”), attached hereto as Exhibit A, with a redline showing the differences between the Amended Cross Complaint and Second Amended Cross-Complaint attached hereto as Exhibit B.” (ROA 462, Joint Stipulation, ¶ 2.) A status conference re: Joint Stipulation was scheduled for June 18, 2026, and the Minute Order dated June 18, 2026, does not contain any order on the filing of the Second Amended Cross-Complaint. (ROA 467, 505.)

Thus, while the parties may have agreed to the filing of Michael Turturro and Jet Alliance’s Second Amended Cross-Complaint (“SAXC”), and the Court has implicitly allowed the filing of the SAXC, it has not been properly filed.

Code of Civil Procedure section 471.5, states, in part: “If the complaint is amended, a copy of the amendments shall be filed, or the court may, in its discretion, require the complaint as amended to be filed, and a copy of the amendments or amended complaint must be served upon the defendants affected thereby.” (Code Civ. Proc. § 471.5(a).) “For the purposes of this subdivision, ‘complaint’ includes a crosscomplaint, and ‘defendant’ includes a person against whom a cross-complaint is filed.” (Ibid.)

That a copy of SAXC is attached as an exhibit to the Joint Stipulation, does not satisfy the filing requirement. There is no order deeming the SAXC to have been filed by way of the filing of the Joint Stipulation, or on the date of the filing of the Joint Stipulation, i.e., June 2, 2026.

As the SAXC has not been properly filed, the SAXC is not before the Court, and the Court is unable to rule on the Motion for Judgment on the Pleadings directed at the eleventh and twelfth causes of action of the SAXC.

Turturro’s motion for judgment on the pleadings (ROA 493) is CONTINUED to October 1, 2026 at 1:30 p.m. in Department W15. Turturro to immediately file and serve the SAXC, and no later than nine (9) court days before the continued hearing date.

No further briefing will be permitted or considered.

Cross-Defendants’ Motion to Strike Cross-Defendants, Home Mortgage Alliance Corporation (HMAC) and Alfred Hanna move to strike the following portions from the Second Amended Cross-Complaint of Cross-Complainants, Michael Turturro and Jet Alliance: Heading “E”, in its entirety, and paragraphs 30-37 and 90-91, in their entirety.

Cross-Defendants’ motion to strike is CONTINUED to October 1, 2026 at 1:30 p.m. in Department W15 for the same reasons Turturro’s motion for judgment on the pleadings is continued.

No further briefing will be permitted or considered.

HMAC to give notice of all motions.

108 Garces vs. Kia America, Inc., 25-01498608 Defendant Kia America, Inc. (“Defendant”) moves for summary judgment or, in the alternative, adjudication of issues as to Plaintiff Keren Garces’ Complaint. The motion is unopposed.

A defendant moving for summary judgment satisfies his or her initial burden by showing that one or more elements of the cause of action cannot be established or that there is a complete defense to the cause of action. (CCP §437c(p)(2).) The scope of this burden is determined by the allegations of the plaintiff’s complaint. (FPI Development v. Nakashima (1991) 231 Cal.App.3d 367, 381-382 (pleadings serve as the outer measure of materiality in a summary judgment motion)). Once a defendant meets its prima facie showing, the burden shifts to the plaintiff to show by reference to specific facts the existence of a triable issue as to that affirmative defense or cause of action. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.)

The Complaint asserts causes of action for: 1) Breach of Implied Warranty; 2) Breach of Express Warranty; and 3) Violation of the Song Beverly Consumer Warranty Act.

First Causes of Action for Breach of Implied Warranty Defendant contends that the first cause of action for breach of implied warranty is fails because the vehicle purchased was a used vehicle, and therefore there is no implied warranty.

Civil Code Section 1791(a) defines consumer goods as “any new product or part thereof...” (Cal. Civ. Code § 1791(a). Although the Complaint alleges the 2016 Kia Sorento at issue was new, Defendant has produced the Sales Contract, which indicates that the vehicle was used when sold to Plaintiff. (Compl. Bernardi Decl., Exh. A.)

Even if an implied warranty was applicable to Plaintiff’s purchase, the action was filed outside the four year statute of limitations.

Commercial Code section 2725 provides in pertinent part: “(1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued.... [¶] (2) A cause of action accrues when the breach occurs, regardless of the aggrieved party’s lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.”