Archon Design Solutions, Inc. et al. v. Global Semiconductor Alliance, et al.

Katsioulas had been involved with GSA since 2019. Katsioulas was initially a board member and chair of the GSA-sponsored Internet of Things (“IoT”) Security Working Group, which was relaunched as the Trusted IoT Ecosystem Security (“TIES”). Katsioulas later became an independent consultant to GSA and remained the Chair of the TIES group. As a member and consultant to GSA, Katsioulas developed a platform structure for orchestrated multistakeholder collaboration (“TIES IP”). Plaintiff planned to pursue business with GSA and prospective partners outside GSA, using its developed TIES IP. (SAC at ¶ 6.)

Scott Strittmatter (“Strittmatter”) was employed by Shelton Group as its chief financial officer (“CFO”) and for 23 years was GSA’s CFO. In 2020, TIES was announced with Katsioulas as the chair, and Katsioulas came to an agreement with Strittmatter that he would continue to chair TIES as an independent consultant to GSA through Plaintiff. By 2021, Katsioulas had grown TIES to 26 members and over 40 contributors, but he could not support leading and administering TIES without resources and investment. (SAC at ¶¶ 11-12.)

In May 2021, Strittmatter agreed to pay Plaintiff a stipend of $200/hour for up to 40 hours per month and asked Katsioulas to supply monthly logs for the time he spent on TIES. Katsioulas and Strittmatter agreed that any excess hours in excess of 40 hours per month would be rolled forward and any accumulated payments to Plaintiff would be deferred provided that Katsioulas continued to lead the group and did not voluntarily leave. (SAC at ¶ 12.)

In October 2022, GSA lauded Katsioulas’ performance for TIES accomplishments and confirmed that its 2023 budget included Plaintiff’s monthly stipend and that Plaintiff would receive payment for the excess hours worked. (SAC at ¶ 17.) In November 2022, Strittmatter resigned from Shelton Group and GSA. (Id. at ¶ 18.) On December 27, 2022, Katsioulas had a conference with Shelton and the GSA service staff, in which they informed him that GSA did not have the budget for his agreed stipend and could not afford an external consultant for TIES even though services had already been provided at that time and were unpaid. (Id. at ¶ 21.)

In January 2023, Shelton avoided Katsioulas’ several attempts to discuss the issues with her, and she refused to promote TIES to the GSA board or to review its progress. (Id. at ¶ 23.) Shelton subsequently took actions that were contrary to GSA’s interest. (Id. at ¶ 24.)

On October 25, 2024, Plaintiff filed the operative SAC against defendants GSA, Shelton Group, and Shelton alleging causes of action for: (1) Breach of Express Oral Contract; (2) Breach of Implied Contract to Pay Consultancy Fees; (3) Promissory Estoppel; (4) Quantum Meruit; (5) Tortious Interference with Contract; and (6) Intentional Interference with Prospective Economic Relations.

On April 16, 2026, defendant GSA filed the motion presently before the court, a motion for summary judgment, or in the alternative, summary adjudication. (Code Civ. Proc., § 437c.) Plaintiff filed written opposition. GSA filed reply papers and evidentiary objections.

Trial is scheduled for June 8, 2026.

Motion for Summary Judgment, or in the Alternative, Summary Adjudication

The first, second, third, and fourth causes of action in the SAC are alleged against defendant GSA. GSA moves for an order of summary judgment on the ground that Plaintiff cannot raise any triable issue of material fact as to these claims and thus judgment should be entered as a matter of law. In the alternative, GSA moves for summary adjudication of the first, second, third, and fourth causes of action.

Defective Separate Statement

As a preliminary matter, it appears defendant GSA filed a separate statement in support of the motion that does not comply with the rules of court.

The separate statement in support of the motion must separately identify each cause of action, claim for damages, issue of duty, or affirmative defense that is the subject of the motion and state in numerical sequence the undisputed material facts in the first column. (See Cal. Rules of Court, rule 3.1350(d)(1)(A), (B)(3).)

“If summary adjudication is sought, whether separately or as an alternative to the motion for summary judgment, the specific cause of action, affirmative defense, claims for damages, or issues of duty must be stated specifically in the notice of motion and be repeated, verbatim, in the separate statement of undisputed material facts.” (Cal. Rules of Court, rule 3.1350(b), emphasis in bold added.) “The requirement of a separate statement from the moving party and a responding statement from the party opposing summary judgment serves two functions: to give the parties notice of the material facts at issue in the motion and to permit the trial court to focus on whether those facts are truly undisputed.” (Parkview Villas Assn., Inc. v. State Farm Fire & Casualty Co. (2005) 133 Cal.App.4th 1197, 1210.) As one court explained:

“Separate statements are required not to satisfy a sadistic urge to torment lawyers, but rather to afford due process to opposing parties and to permit trial courts to expeditiously review complex motions for SAI and summary judgment to determine quickly and efficiently whether material facts are disputed.” (United Community Church v. Garcin (1991) 231 Cal.App.3d 327, 335.)

A failure to comply with the separate statement requirement may, in the court’s discretion, constitute a sufficient ground for denying the motion. (See Code Civ. Proc., § 437c, subd. (b)(1).)

Here, the separate statement submitted by defendant GSA is divided into sections under various factual headings. The statement however does not separately identify each cause of action that is the subject of the motion and thus violates the rules of court. But, GSA’s memorandum of points and authorities appears to cite material facts in support of its arguments on summary judgment and summary adjudication. Therefore, the court will overlook this procedural violation and consider the merits of the motion. The court urges defense counsel to follow court rules and procedures with respect to future filings, especially when submitting dispositive motions for summary judgment and summary adjudication.

Evidentiary Objections

“In determining if the papers show that there is no triable issue as to any material fact, the court shall consider all of the evidence set forth in the papers, except the evidence to which objections have been made and sustained by the court...” (Code Civ. Proc., § 437c, subd. (c).)

“In granting or denying a motion for summary judgment or summary adjudication, the court need rule only on those objections to evidence that it deems material to its disposition of the motion. Objections to evidence that are not ruled on for purposes of the motion shall be preserved for appellate review.” (Code Civ. Proc., § 437c, subd. (q).)

Written evidentiary objections must be made in a separate document and must not be re-stated or re-argued in the separate statement. (Cal. Rules of Court, rule 3.1354(b).) Objections must identify the specific item of evidence that is objectionable. (Ibid.)

In addition, evidentiary objections must be accompanied by a proposed order that complies with the requirements set forth in California Rules of Court, rule 3.1354(c). The rule requires an objecting party to file two separate documents, objections and a separate proposed order, both in one of the approved formats set forth in the rule. (See Cal. Rules of Court, rule 3.1354(b) and (c).)

In reply, defendant GSA submits objections to evidence incorporated with Plaintiff’s opposition. The court OVERRULES Objection Nos. 12-13, and 22 in their entirety. The court declines to rule on the remaining objections as they are not material to the outcome of the motion for reasons explained below.

Legal Standard

Any party may move for summary judgment. (Code Civ. Proc., § 437c, subd. (a); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843 (Aguilar).) “The motion for summary judgment shall be granted 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).) “The object of the summary judgment procedure is ‘to cut through the parties’ pleadings’ to determine whether trial is necessary to resolve their dispute. [Citation.]” (Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1020.)

“[T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact...” (Aguilar, supra, 25 Cal.4th at p. 850.) “A prima facie showing is one that is sufficient to support the position of the party in question.” (Id. at p. 851.)

If a moving defendant makes the necessary initial showing, the burden of production shifts to the plaintiff to make a prima facie showing of the existence of a triable issue of material fact. (Code Civ. Proc., § 437c, subd. (p)(2); see Aguilar, supra, 25 Cal.4th at p. 850.)

A triable issue of material fact exists “if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Aguilar, supra, 25 Cal.4th at p. 850, fn. omitted.) If the plaintiff opposing summary judgment presents evidence demonstrating the existence of a disputed material fact, the motion must be denied. (Id. at p. 856.)

Throughout the process, the trial court “must consider all of the evidence and all of the inferences drawn therefrom.” (Aguilar, supra, 25 Cal.4th at p. 856.) The moving party’s evidence is strictly construed, while the opponent’s is liberally construed. (Id. at p. 843.)

Similarly, “[a] party may seek summary adjudication on whether a cause of action, affirmative defense, or punitive damages claim has merit or whether a defendant owed a duty to a plaintiff. [Citation.] ‘A motion for summary adjudication...shall proceed in all procedural respects as a motion for summary judgment.’ [Citation.]” (California Bank & Trust v. Lawlor (2013) 222 Cal.App.4th 625, 630.)

“[S]ummary judgment (or summary adjudication) is a drastic remedy and should be used with caution. [Citation.] Because summary judgment is a drastic procedure all doubts as to the propriety of granting a motion for summary judgment should be resolved in favor of the party opposing the motion. [Citations.]” (Tully v. World Savings & Loan Assn. (1997) 56 Cal.App.4th 654, 660; see Kernan v. Regents of University of California (2022) 83 Cal.App.5th 675, 684 [“The drastic remedy of summary judgment may not be granted unless reasonable minds can draw only one conclusion from the evidence.”].)

First Cause of Action: Breach of Express Oral Contract

“To establish a cause of action for breach of contract, the plaintiff must plead and prove (1) the existence of the contract, (2) the plaintiff’s performance or excuse for nonperformance, (3) the defendant’s breach, and (4) resulting damages to the plaintiff.” (Maxwell v. Dolezal (2014) 231 Cal.App.4th 93, 97-98.) The elements for breach of an oral contract are the same as those for a breach of a written contract. (Stockton Mortgage, Inc. v. Tope (2014) 233 Cal.App.4th 437, 453.)

On summary judgment, defendant GSA argues the first cause of action fails because: (1) Plaintiff cannot establish the existence of the May 2021 Overtime Agreement; (2) the terms of the Overtime Agreement are vague and unenforceable; and (3) the Overtime Agreement violates the Statute of Frauds.

Existence of Overtime Agreement

“Contract formation requires mutual consent, which cannot exist unless the parties ‘agree upon the same thing in the same sense.’ [Citations.] ‘If there is no evidence establishing a manifestation of assent to the “same thing” by both parties, then there is no mutual consent to contract and no contract formation.’ [Citation.] ‘Mutual assent is determined under an objective standard applied to the outward manifestations or expressions of the parties, i.e., the reasonable meaning of their words and acts, and not their unexpressed intentions or understandings.’ [Citations.]” (Bustamante v. Intuit, Inc. (2006) 141 Cal.App.4th 199, 208 (Bustamante).)

“Where the existence of a contract is at issue and the evidence is conflicting or admits of more than one inference, it is for the trier of fact to determine whether the contract actually existed. But if the material facts are certain or undisputed, the existence of a contract is a question for the court to decide. [Citation.]” (Bustamante, supra, 141 Cal.App.4th at p. 208.)

On summary judgment, “the pleadings frame the issues to be resolved. ‘“The purpose of a summary judgment [adjudication] proceeding is to permit a party to show that material factual claims arising from the pleadings need not be tried because they are not in dispute.” [Citation.] “The function of the pleadings in a motion for summary judgment [adjudication] 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.” [Citations.]’ [Citations.]” (Snatchko v. Westfield LLC (2010) 187 Cal.App.4th 469, 477 (Snatchko).)

The first cause of action is based on an alleged oral contract which provides:

In May 2021, Strittmatter agreed to pay Plaintiff (or Archon) a stipend of $200 per hour for up to 40 hours per month and asked Katsioulas to supply monthly logs for the time he spent on TIES. Katsioulas and GSA agreed that any hours in excess of 40 hours per month logged in by Katsioulas would be rolled forward and that any accumulated payments to Plaintiff for these “extra hours” would be deferred provided that Katsioulas continued leading the group and did not voluntarily leave. (SAC at ¶ 12.)

In particular, defendant GSA agreed to monthly payments of $200 per hour for up to 40 hours of work per month, plus additional compensation at the same hourly rate for hours worked over 40 hours per month to be deferred pending proof of TIES’ value to the GSA pursuant to success metrics to show proof of value mutually agreed by the parties. (SAC at ¶ 39.)

Plaintiff alleges defendant GSA breached its obligation to pay deferred compensation owed to Plaintiff which falls under the Overtime Agreement. (SAC at ¶ 43.)

On summary judgment, defendant GSA submits deposition testimony from Strittmatter denying the existence of any Overtime Agreement between the parties. (See GSA’s Separate Statement of Undisputed Facts [“SSUF”] at No. 14.) Such evidence is sufficient for GSA to meet its initial burden on summary judgment.

As an initial matter, to the extent that Plaintiff relies on the existence of a 2022 amended performance agreement, the court declines to consider such contract as it was not pled in the operative pleading and cannot be raised for the first time through evidence in opposition to a summary judgment motion. (See Hutton v. Fidelity National Title Co. (2013) 213 Cal.App.4th 486, 493 [“The burden of a defendant moving for summary judgment only requires that he or she negate plaintiff’s 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.”]; Melican v.

Regents of University of California (2007) 151 Cal.App.4th 168, 182 [“We do not require [defendant] to negate elements of causes of action plaintiffs never pleaded.”]; Snatchko, supra, 187 Cal.App.4th at p. 477 [“A plaintiff may not avoid summary judgment by producing evidence to support claims outside the issues framed by the pleadings.”]; see also Knapp v. Doherty (2004) 123 Cal.App.4th 76, 90 [“A plaintiff wishing ‘to rely upon unpleaded theories to defeat summary judgment’ must move to amend the complaint before the hearing.”].)

That said, in opposition, Plaintiff provides a declaration from Katsioulas acknowledging the parties’ oral agreement and noting that he kept logs internally tracking certain amounts as deferred compensation. (See Plaintiff’s Disputed Fact at No. 14; Katsioulas Decl. at ¶¶ 8-9, Ex. 1.) This minimal evidence is sufficient to establish the existence of an oral agreement between the parties and raise a triable issue of material fact. (See Gleason v. Klamer (1980) 103 Cal.App.3d 782 [appellate court reversed trial court’s order granting summary judgment because there was a single triable issue of fact].)

Overtime Agreement Terms

“ ‘Under California law, a contract will be enforced if it is sufficiently definite (and this is a question of law) for the court to ascertain the parties’ obligations and to determine whether those obligations have been performed or breached.’ [Citation.] ‘To be enforceable, a promise must be definite enough that a court can determine the scope of the duty [,] and the limits of performance must be sufficiently defined to provide a rational basis for the assessment of damages.’ [Citations.] ‘Where a contract is so uncertain and indefinite that the intention of the parties in material particulars cannot be ascertained, the contract is void and unenforceable.’ [Citations.] ‘The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy.’ [Citations.] But, ‘[i]f ... a supposed “contract” does not provide a basis for determining what obligations the parties have agreed to, and hence does not make possible a determination of whether those agreed obligations have been breached, there is no contract.’ [Citation.]” (Bustamante, supra, 141 Cal.App.4th at p. 209.)

As stated above, the parties’ Overtime Agreement includes additional compensation at the same hourly rate for hours worked over 40 hours per month to be deferred pending proof of TIES’ value to the GSA pursuant to success metrics to show proof of value mutually agreed by the parties. (SAC at ¶ 39.) As pled, defendant GSA contends these terms are vague and unenforceable. The court is not persuaded as the relevant inquiry is whether a court can determine the obligations agreed to by the parties and whether those obligations have been breached. (Bustamante, supra, 141 Cal.App.4th at p. 209.)

Here, the Overtime Agreement is sufficiently definite as it provides an hourly rate of $200 for hours worked over 40 hours per month which are deferred pending proof of TIES’ value to GSA which, according to the allegations, can be separately determined. This contention therefore does not weigh in favor of summary judgment or summary adjudication.

Statute of Frauds

“[T]he statute of frauds requires certain documents to be evidenced by a writing subscribed by the party. If not evidenced by such a writing, a contract subject to the statute of frauds is invalid. (Civ. Code, § 1624.)

Under California’s statute of frauds, when a contract is not to be performed within one year it ‘or some note or memorandum thereof, must be in writing and subscribed by the party to be charged or by the party’s agent. (Civ. Code, § 1624, subd. (a).) “The writing need not contain all of the contract’s terms; it is sufficient ‘if it identifies the subject of the parties’ agreement, shows that they made a contract, and states the essential contract terms with reasonable certainty.’ [Citation.] The purpose of this requirement is ‘ “to require reliable evidence of the existence and terms of the contract and to prevent enforcement through fraud or perjury of contracts never in fact made.” ’ [Citations.]” (Harshad & Nasir Corp. v. Global Sign Systems, Inc. (2017) 14 Cal.App.5th 523, 537.)

As a preliminary matter, defendant GSA does not direct the court to any material facts in the separate statement to support the statute of frauds defense. Also, the statute of frauds applies only where the oral contract cannot be performed within one year. (See Connelly v. Venus Foods, Inc. (1959) 174 Cal.App.2d 582, 586 [it is well settled that oral contracts invalidated by the statute of frauds because not to be performed within a year include those only which cannot be performed within that period].) That is not the case here as the terms set forth in the alleged oral contract could be performed in one year.

Therefore, the motion for summary judgment is DENIED. The motion for summary adjudication to the first cause of action is DENIED.

Second Cause of Action: Breach of Implied Contract to Pay Consultancy Fees

“A cause of action for breach of implied contract has the same elements as does a cause of action for breach of contract, except that the promise is not expressed in words but is implied from the promisor’s conduct.” (Yari v. Producers Guild of America, Inc. (2008) 161 Cal.App.4th 172, 182.)

Here, the breach of implied contract claim relies on the same oral contract alleged in the first cause of action. In fact, the second cause of action alleges the same oral contract seeking the same damages for breach by defendant GSA. (See SAC at ¶¶ 45, 49-50.) And, as articulated above, Plaintiff’s first cause of action remains viable and will be addressed by the trier of fact at trial. For that reason, the second cause of action is redundant and therefore properly disposed by way of this motion.

Accordingly, the motion for summary adjudication to the second cause of action is GRANTED.

Third Cause of Action: Promissory Estoppel

“ ‘Promissory estoppel is “a doctrine which employs equitable principles to satisfy the requirement that consideration must be given in exchange for the promise sought to be enforced.” [Citation.]’ [Citation.] Because promissory estoppel is an equitable doctrine to allow enforcement of a promise that would otherwise be unenforceable, courts are given wide discretion in its application. [Citations.]” (US Ecology, Inc. v. State of California (2005) 129 Cal.App.4th 887, 901-902.)

The elements of a promissory estoppel claim are: (1) a promise clear and unambiguous in its terms; (2) reliance by the party to whom the promise is made; (3) the reliance must be both reasonable and foreseeable; and (4) the party asserting the estoppel must be injured by his reliance. (Jones v. Wachovia Bank (2014) 230 Cal.App.4th 935, 945.)

“ ‘[A] promise is an indispensable element of the doctrine of promissory estoppel. The cases are uniform in holding that this doctrine cannot be invoked and must be held inapplicable in the absence of a showing that a promise had been made upon which the complaining party relied to his prejudice ... .’ [Citation.] The promise must, in addition, be ‘clear and unambiguous in its terms.’ [Citation.] ‘Estoppel cannot be established from ... preliminary discussions and negotiations.’ [Citation.]” (Garcia v. World Savings, FSB (2010) 183 Cal.App.4th 1031, 1044.)

Defendant GSA argues there is no clear and unambiguous promise for payment of deferred overtime compensation to support promissory estoppel. (See GSA’s SSUF at Nos. 14, 30, 31.) But, as explained above, the court already determined that triable issues of fact exist regarding the formation of an oral contract and thus a clear and unambiguous promise for payment of deferred overtime compensation by GSA remains to establish promissory estoppel.

Consequently, the motion for summary adjudication to the third cause of action is DENIED.

Fourth Cause of Action: Quantum Meruit

“ ‘Quantum meruit refers to the well-established principle that “the law implies a promise to pay for services performed under circumstances disclosing that they were not gratuitously rendered.” [Citation.] To recover in quantum meruit, a party need not prove the existence of a contract [citations], but it must show the circumstances were such that “the services were rendered under some understanding or expectation of both parties that compensation therefor was to be made” [citations].’ [Citation.] The requisite elements of quantum meruit are (1) the plaintiff acted pursuant to ‘an explicit or implicit request for the services’ by the defendant, and (2) the services conferred a benefit on the defendant. [Citation.]” (Port Medical Wellness, Inc. v. Connecticut General Life Ins. Co. (2018) 24 Cal.App.5th 153, 180.)

The fourth cause of action is pled as an alternative to the first and second causes of action. As the first cause of action remains viable, so too is the fourth cause of action for quantum meruit.

Therefore, the motion for summary adjudication to the fourth cause of action is DENIED.

Disposition

The motion for summary judgment to the SAC is DENIED.

The motion for summary adjudication to the first, third, and fourth causes of action is DENIED.

The motion for summary adjudication to the second cause of action is GRANTED.

The court will prepare the order.

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