Sun v. Wu

Background

Sun brought claims relating to Aimerce, including claims concerning the repurchase of shares, her termination, her removal from the board, and alleged interference with her contractual and economic interests. The defendants moved to dismiss. The court considered Aimerce’s Stock Purchase Agreement and Vesting Agreement because the agreements were integral to Sun’s claims, were referenced in the complaint, and were not challenged as unauthentic.

Court’s Analysis

The court held that Sun’s conversion claim was inadequately pleaded because, in light of the Vesting Agreement, she had not plausibly alleged that the repurchase of her shares conflicted with her property rights.

The court dismissed the breach-of-fiduciary-duty claim. Because the claim concerned the internal affairs of Aimerce, which the opinion identifies as a Delaware corporation, the court applied Delaware law. The court concluded that injuries related to Sun’s employment contract and role as an employee could not support a fiduciary-duty claim; that majority shareholders could remove directors regardless of their motivation; and that a shareholder could not bring a fiduciary-duty claim over the exercise of a contractual right when the repurchase was made under the Vesting Agreement.

The court also dismissed the intentional-interference-with-contractual-relations claim. It reasoned that Wu, as Aimerce’s chief executive officer acting for the company, was Aimerce’s agent, so alleging that Wu interfered with Sun’s contract with Aimerce essentially alleged that Aimerce interfered with its own contract. The court rejected that theory. To the extent Sun’s prospective-economic-advantage claim concerned the loss of continued employment and co-ownership of Aimerce, it failed for the same reason, and the complaint did not adequately allege any separate prospective economic advantage.

The court further held that Sun’s statutory employment claims failed because the complaint stated that she lived in and was a citizen of China but did not allege that she lived or worked in California during her employment with Aimerce or that she experienced discriminatory conduct there. The court also noted that the complaint did not allege facts showing that the defendants had enough qualifying employees to be covered by the federal or California statutes discussed in the opinion. Because the statutory basis for Sun’s wrongful-termination-against-public-policy claim did not apply on the pleaded facts, that claim also failed. The California-law provision in Sun’s employment contract did not create a cause of action that California law otherwise did not provide.

Disposition

Judge Vince Chhabria granted the motions to dismiss, identified as Docket Nos. 19 and 20, with leave to amend. The order states that if Sun did not file an amended complaint within 14 days, the dismissal would be with prejudice. The opinion does not state that an amended complaint had been filed when the order was entered.