32 Cal.Rptr.3d 266 (2005) 131 Cal.App.4th 621

OAKLAND RAIDERS, Plaintiff and Appellant,
v.
NATIONAL FOOTBALL LEAGUE et al., Defendants and Respondents.

No. H026688.

Court of Appeal, Sixth District.

July 28, 2005.

*269 Howard Rice Nemerovski Canady Falk & Rabkin, Kenneth G. Hausman, Simon J. Frankel, Matthew R. Schultz, San Francisco, for Plaintiff/Appellant.

Bingham McCutchen, James L. Hunt, Dale E. Barnes, San Francisco, Michael T. Pyle, Ruby & Schofield, Allen J. Ruby, & San Jose, for Defendants/Respondents.

PREMO, J.

The Oakland Raiders (Raiders), a member club of an unincorporated association known as the National Football League (NFL or League), sued the NFL and its commissioner, Paul Tagliabue. The Raiders alleged that the NFL and Tagliabue (collectively, defendants) took various actions that were discriminatory towards the Raiders and placed it at a competitive disadvantage vis-à-vis other member clubs. One legal theory that the Raiders advanced was breach of fiduciary duty. Defendants argued that this claim was without merit for a variety of reasons, including the absence of legal duty, and the requirement that courts abstain from involving themselves in disputes involving private voluntary associations. The court below, citing both reasons, agreed with defendants and granted summary adjudication. The Raiders appealed.

We are therefore called upon here to examine the parties' relationship to determine whether the NFL and its commissioner owe fiduciary duties to the Raiders. After reviewing the unique nature of the NFL business organization and the extent of the powers and duties of its commissioner, we conclude that neither defendant stands in a fiduciary relationship with the Raiders. We hold further that the nature of this conflict is one from which the courts properly abstain. Accordingly, after our de novo review, we conclude that summary adjudication was proper and we affirm the judgment.

PROCEDURAL HISTORY^[1]

The Raiders filed a Fourth Amended and Supplemental Complaint (complaint), *270 consisting of 22 causes of action and 99 pages (excluding exhibits). The complaint's second cause of action—the only claim at issue in this appeal—asserted that the NFL and/or Tagliabue breached their fiduciary duties to the Raiders.

Broadly speaking, the complaint alleged that the Raiders was discriminated against and treated unfavorably as compared with the other member clubs.^[2] The alleged breaches of fiduciary duty included: "singling the Raiders out" from other clubs and "treating the Raiders disparately and adversely"; permitting other member clubs to violate NFL rules, thereby giving them a competitive advantage over the Raiders; requiring that the Raiders (over its objection) participate with other member clubs in the European football league known as the "World League of American Football"; concealing information from the Raiders and excluding its participation in a lawsuit involving the former owner of the New England Patriots, William H. Sullivan, Jr.; and denying Al Davis (former Raiders' managing general partner) and his family permission to buy the Oakland Athletics baseball team, notwithstanding that defendants permitted violations of the League's "Cross-ownership Rule" by other club owners.^[3] In addition, the Raiders alleged that Tagliabue committed further breaches of fiduciary duty: by removing Davis from the Management Council Executive Committee in September 1995; by removing Raiders' representatives from NFL committees, and by excluding the Raiders from participating in significant NFL committees, thereby placing the Raiders at a competitive disadvantage; and by concealing from the Raiders certain rules violations by other member clubs.

In November 1998, defendants filed a motion for summary adjudication of the second cause of action of the complaint, denominated as "motion no. 5." The Raiders opposed this motion; its opposition consisted of more than 2600 pages. After the court heard extensive argument, on December 17, 1998, it granted summary adjudication as to the second cause of action.^[4] The court based its decision, inter alia, upon the conclusions that (1) defendants owed no fiduciary duties to the Raiders, and (2) even were the breach of fiduciary duty claim legally viable, the court was required to abstain from deciding it.

Three months later, the Raiders attacked the order granting summary adjudication by filing a motion for new trial, a motion for reconsideration, and an alternative motion to amend the complaint. The court (1) denied the Raiders' motion for reconsideration, (2) denied without prejudice the motion for new trial, and (3) denied the motion for leave to amend.^[5]

*271 After intervening proceedings—including appellate proceedings in Oakland Raiders, supra, 93 Cal.App.4th 572, 113 Cal.Rptr.2d 255, and at least one further summary adjudication motion (as to the 21st and 22nd causes of action of the complaint) —the court entered judgment on September 3, 2003.

The Raiders filed a notice of appeal on October 31, 2003. The appeal from the judgment was filed timely (Cal. Rules of Court, rule 2(a)(1)), and is a proper subject for appellate review. (Code Civ. Proc., § 437c, subd. (m); see also Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2005) ¶ 10:384, p. 10-122.12 [order granting summary judgment not itself appealable, but appeal lies from judgment entered on such order].)

DISCUSSION

I. Standard Of Review

"The purpose of the law of summary judgment is to provide courts with a mechanism to cut through the parties' pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute." (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843, 107 Cal.Rptr.2d 841, 24 P.3d 493 (Aguilar).) As such, the summary judgment statute (Code Civ. Proc., § 437c), "provides a particularly suitable means to test the sufficiency of the plaintiff's prima facie case and/or of the defendant's [defense]." (Caldwell v. Paramount Unified School Dist. (1995) 41 Cal.App.4th 189, 203, 48 Cal.Rptr.2d 448.) A summary judgment motion must demonstrate that "material facts" are undisputed. (Code Civ. Proc., § 437c, subd. (b)(1).) The pleadings determine the issues to be addressed by a summary judgment motion. (Metromedia, Inc. v. City of San Diego (1980) 26 Cal.3d 848, 885, 164 Cal.Rptr. 510, 610 P.2d 407, rev'd on other grounds Metromedia, Inc. v. San Diego (1981) 453 U.S. 490, 101 S.Ct. 2882, 69 L.Ed.2d 800.)

"A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty." (Code Civ. Proc., § 437c, subd. (f)(1).) Similar to summary judgment, the moving party's burden on summary adjudication is to establish evidentiary facts sufficient to prove or disprove the elements of a claim or defense. (§ 437c, subds.(c), (f).)

The moving party "bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law." (Aguilar, supra, 25 Cal.4th at p. 850, 107 Cal.Rptr.2d 841, 24 P.3d 493, fn. omitted.) A defendant moving for summary judgment must "`show[] that one or more elements of the cause of action . . . cannot be established' by the plaintiff." (Id. at p. 853, 107 Cal.Rptr.2d 841, 24 P.3d 493, quoting Code Civ. Proc., § 437c, subd. (o)(2).) A defendant meets its burden by presenting affirmative evidence that negates an essential element of plaintiff's claim. (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334, 100 Cal.Rptr.2d 352, 8 P.3d 1089.) Alternatively, a defendant meets its burden by submitting evidence "that the plaintiff does not possess, and cannot reasonably obtain, needed evidence" supporting an essential element of its claim. (Aguilar, supra, 25 Cal.4th at p. 855, 107 Cal.Rptr.2d 841, 24 P.3d 493.)

Since both summary judgment and summary adjudication motions involve purely questions of law, we review the *272 granting of summary judgment or summary adjudication de novo to ascertain from the papers whether there is a triable issue of material fact. (Chavez v. Carpenter (2001) 91 Cal.App.4th 1433, 1438, 111 Cal.Rptr.2d 534; Travelers Casualty & Surety Co. v. Superior Court (1998) 63 Cal.App.4th 1440, 1450, 75 Cal.Rptr.2d 54.) In doing so, we "consider[] all of the evidence the parties offered in connection with the motion (except that which the court properly excluded) and the uncontradicted inferences the evidence reasonably supports. [Citation.]" (Merrill v. Navegar, Inc. (2001) 26 Cal.4th 465, 476, 110 Cal.Rptr.2d 370, 28 P.3d 116.)

In performing an independent review of the granting of summary judgment, we conduct the same procedure employed by the trial court. We examine (1) the pleadings to determine the elements of the claim, (2) the motion to determine if it establishes facts justifying judgment in the moving party's favor, and (3) the opposition—assuming movant has met its initial burden—to "decide whether the opposing party has demonstrated the existence of a triable, material fact issue. [Citation.]" (Chavez v. Carpenter, supra, 91 Cal.App.4th at p. 1438, 111 Cal.Rptr.2d 534; see also Burroughs v. Precision Airmotive Corp. (2000) 78 Cal.App.4th 681, 688, 93 Cal.Rptr.2d 124.) We need not defer to the trial court and are not bound by the reasons in its summary judgment ruling; we review the ruling of the trial court, not its rationale. (Kids' Universe v. In2Labs (2002) 95 Cal.App.4th 870, 878, 116 Cal.Rptr.2d 158.)

II. Issues On Appeal

The Raiders asserts that the trial court erred in granting summary adjudication of the claim for breach of fiduciary duty. These claims of error are as follows:

1. The court erred in concluding that neither the NFL nor Tagliabue owed fiduciary duties to the Raiders.

2. The court erroneously applied the abstention doctrine of California Dental Assn. v. American Dental Assn. (1979) 23 Cal.3d 346, 152 Cal.Rptr. 546, 590 P.2d 401 (California Dental), in concluding that the controversy here was not one in which the court should intervene.

3. The court concluded incorrectly that the claim was barred due to the Raiders' failure to exhaust internal remedies within the NFL.

4. The court erred in holding that certain additional breach of fiduciary duty claims had not been pleaded and were thus beyond matters that it could consider in connection with the motion for summary adjudication. The Raiders contends: (a) that the claims were properly pleaded; (b) that any failure to plead the claims represented an immaterial variance such that the court should have considered them in connection with the motion; and (c) the court, in any event, should have granted the Raiders leave to amend the second cause of action after the motion was decided.

We will address below the Raiders' first, second, and fourth contentions.^[6]

*273 III. Whether Defendants Owed Fiduciary Duties To The Raiders

A. Claims Arising out of Fiduciary Relationships, Generally

We start with a recitation of some of the basic principles of the law of fiduciary duty. "[A] fiduciary relationship is a recognized legal relationship such as guardian and ward, trustee and beneficiary, principal and agent, or attorney and client [citation]." (Richelle L. v. Roman Catholic Archbishop (2003) 106 Cal.App.4th 257, 271, 130 Cal.Rptr.2d 601.)^[7] A fiduciary must give "priority to the best interest of the beneficiary. [Citation.]" (Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 222, 197 Cal.Rptr. 783, 673 P.2d 660 (Children's Television).) In addition to this duty of preference toward the beneficiary, the fiduciary also is required to manage the subject matter of the relationship (or res) with due care, must account to the beneficiary, and must keep the beneficiary fully informed as to all matters pertinent to the beneficiary's interest in the res. (See Chodos, The Law of Fiduciary Duties (2000), pp. LIV-LV.)

Our Supreme Court has acknowledged that it is difficult to enunciate the precise elements required to show the existence of a fiduciary relationship. (Children's Television, supra, 35 Cal.3d at p. 221, 197 Cal.Rptr. 783, 673 P.2d 660.) But the high court has noted that "before a person can be charged with a fiduciary obligation, he must either knowingly undertake to act on behalf and for the benefit of another, or must enter into a relationship which imposes that undertaking as a matter of law. [Citations.]" (Ibid.; see also GAB Business Services, Inc. v. Lindsey & Newsom Claim Services, Inc. (2000) 83 Cal.App.4th 409, 416, 99 Cal.Rptr.2d 665 (GAB Business) [two types of fiduciary duties, i.e., "those imposed by law and those undertaken by agreement"], disapproved on other grounds in Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1154, 17 Cal.Rptr.3d 289, 95 P.3d 513.)

Fiduciary duties arise as a matter of law "in certain technical, legal relationships." (GAB Business, supra, 83 Cal.App.4th at p. 416, 99 Cal.Rptr.2d 665.) While this list of special relationships is one that "is not graven in stone" (Chodos, The Law of Fiduciary Duties, supra, p. 1), it is useful to identify many of the relationships that give rise to fiduciary duties. They include relationships between: (1) principal and agent (Recorded Picture Company [Productions] Ltd. v. Nelson Entertainment, Inc. (1997) 53 Cal.App.4th 350, 369-370, 61 Cal.Rptr.2d 742 (Recorded Picture)),^[8] including *274 real estate broker/agent and client (Smith v. Zak (1971) 20 Cal.App.3d 785, 792-793, 98 Cal.Rptr. 242), and stockbroker and customer (Black v. Shearson, Hammill & Co. (1968) 266 Cal.App.2d 362, 367, 72 Cal.Rptr. 157); (2) attorney and client (Rader v. Thrasher (1962) 57 Cal.2d 244, 250, 18 Cal.Rptr. 736, 368 P.2d 360); (3) partners (Koyer v. Willmon (1907) 150 Cal. 785, 787-788, 90 P. 135; Corp.Code, § 16404); (4) joint venturers (Sime v. Malouf (1949) 95 Cal.App.2d 82, 98, 212 P.2d 946); (5) corporate officers and directors, on the one hand, and the corporation and its shareholders, on the other hand (Bancroft-Whitney Co. v. Glen (1966) 64 Cal.2d 327, 345, 49 Cal.Rptr. 825, 411 P.2d 921); (6) husband and wife, with respect to the couple's community property (Vai v. Bank of America (1961) 56 Cal.2d 329, 337, 15 Cal.Rptr. 71, 364 P.2d 247; see also Fam.Code, § 1100, subd. (e)); (7) controlling shareholders and minority shareholders (Jones v. H.F. Ahmanson & Co. (1969) 1 Cal.3d 93, 108-112, 81 Cal.Rptr. 592, 460 P.2d 464 (Jones)); (8) trustee and trust beneficiary (Estate of Vokal (1953) 121 Cal.App.2d 252, 257, 263 P.2d 64); (9) guardian and ward (Estate of Kay (1947) 30 Cal.2d 215, 226, 181 P.2d 1; Prob.Code, § 2101); (10) pension fund trustee and pensioner beneficiary (Lix v. Edwards (1978) 82 Cal.App.3d 573, 578, 147 Cal.Rptr. 294), (11) executor and decedent's estate (Estate of Boggs (1942) 19 Cal.2d 324, 333, 121 P.2d 678); and (12) trustee and trust beneficiaries. (Penny v. Wilson (2004) 123 Cal.App.4th 596, 603, 20 Cal.Rptr.3d 212; Prob.Code, §§ 16004, 16081, subd. (a).)

In numerous cases, however, California courts have rejected attempts to extend fiduciary obligations to relationships where the imposition of such an affirmative duty is unwarranted. For instance, no fiduciary relationship was found to exist as between the following: (1) an attorney and his cocounsel under the theory that the former's malpractice in handling of a mutual client's case caused damage to cocounsel in the loss of fees (Beck v. Wecht (2002) 28 Cal.4th 289, 292-298, 121 Cal.Rptr.2d 384, 48 P.3d 417); (2) one shareholder and another by virtue of the fact that they were former partners in an entity that was later incorporated (Persson v. Smart Inventions, Inc. (2005) 125 Cal.App.4th 1141, 1158-1159, 23 Cal.Rptr.3d 335); (3) an unmarried cohabitant and his cohabitant concerning the operation of the former's business (Maglica v. Maglica (1998) 66 Cal.App.4th 442, 448, 78 Cal.Rptr.2d 101); (4) a movie distributor and movie producers under a distribution contract (Recorded Picture, supra, 53 Cal.App.4th at pp. 369-370, 61 Cal.Rptr.2d 742); (5) a homeowner's association and the buyer of an individual unit (with respect to disclosure of known construction defects) (Kovich v. Paseo Del Mar Homeowners' Assn. (1996) 41 Cal.App.4th 863, 869-870, 48 Cal.Rptr.2d 758); (6) a trade union and a union member (apart from the union's duty of fair representation) (Hussey v. Operating Engineers Local Union No. 3 (1995) 35 Cal.App.4th 1213, 1221, 42 Cal.Rptr.2d 389 (Hussey)); (7) a bank and its borrowers (Kim v. Sumitomo Bank (1993) 17 Cal.App.4th 974, 979-981, 21 Cal.Rptr.2d 834); (8) a corporation and its bondholders (Pittelman v. Pearce (1992) 6 Cal.App.4th 1436, 1444-1445, 8 Cal.Rptr.2d 359); (9) a clearing broker and an investment broker's customer (Mars v. Wedbush Morgan Securities, Inc. (1991) 231 Cal.App.3d 1608, 1614-1615, 283 Cal.Rptr. 238), (10) an insurer and its insured (Love v. Fire Ins. Exchange (1990) 221 Cal.App.3d 1136, 1148-1149, 271 Cal.Rptr. 246);^[9] and (11) a *275 manufacturer and an authorized dealer (Rickel v. Schwinn Bicycle Co. (1983) 144 Cal.App.3d 648, 653-655, 192 Cal.Rptr. 732).

Many of the cases rejecting breach of fiduciary duty claims have been based (at least in part) upon the principle, as enunciated in Waverly Productions, Inc. v. RKO General, Inc. (1963) 217 Cal.App.2d 721, 732, 32 Cal.Rptr. 73, that "[a] mere contract or a debt does not constitute a trust or create a fiduciary relationship." (See Wolf v. Superior Court (2003) 107 Cal.App.4th 25, 30-31, 33-34, 130 Cal.Rptr.2d 860; Recorded Picture, supra, 53 Cal.App.4th 350, 370, 61 Cal.Rptr.2d 742; Rickel v. Schwinn Bicycle Co., supra, 144 Cal.App.3d at pp. 654-655, 192 Cal.Rptr. 732.) As a general rule, courts finding no fiduciary duty have done so "where other legal relationships clearly existed between the parties which `covered' the transaction in suit and which were inconsistent with the existence of fiduciary duty." (Chodos, The Law of Fiduciary Duties, supra, p. 61.)

B. Whether Fiduciary Relationship Existed as a Matter of Law

We first examine whether there was a fiduciary relationship between defendants and the Raiders as a matter of law. More precisely—since we are reviewing a disposition after summary adjudication—we must determine from the papers filed in connection with the summary adjudication motion whether there was a triable issue of fact as to the existence of a fiduciary relationship, by virtue of the nature of the business relationship between the Raiders and defendants.^[10]

As the Ninth Circuit Court of Appeals has previously recognized, "[t]he NFL is [a] unique business organization." (Los Angeles Memorial Coliseum Com'n v. N.F.L. (9th Cir.1984) 726 F.2d 1381, 1401.) It is perhaps for this reason that there is no authority cited by the parties—or known by this court to exist—that is definitive on the question of whether the NFL or its commissioner owes fiduciary duties to one of the NFL's member clubs (in this case, the Raiders). Certainly none of the examples of fiduciary relationships described in part III A, ante, offers an answer to this question.

The Raiders relies extensively on Jones, supra, 1 Cal.3d 93, 81 Cal.Rptr. 592, 460 P.2d 464, in support of its assertion that defendants owed the Raiders fiduciary duties. For a number of reasons, Jones is inapposite. In Jones, the Supreme Court held definitively that majority shareholders owe fiduciary duties to the corporation and its minority shareholders "to use their ability to control the corporation in a fair, just, and equitable manner." (Id. at p. *276 108, 81 Cal.Rptr. 592, 460 P.2d 464.) Thus, under the circumstances presented in that case, the court concluded that "when, as here, no market [for the corporation's stock] exists, the controlling shareholders may not use their power to control the corporation for the purpose of promoting a marketing scheme that benefits themselves alone to the detriment of the minority." (Id. at p. 115, 81 Cal.Rptr. 592, 460 P.2d 464.)

Most notably, the discussion of fiduciary duties in Jones was premised on the existence of a corporation, controlling shareholders, and minority shareholders. No such organizational structure is presented in the instant appeal. To the contrary, it is without dispute that the NFL is an unincorporated not-for-profit association of 31 (now 32) member clubs. Indeed, we acknowledged this organizational status in a prior appeal by the Raiders. (See Oakland Raiders, supra, 93 Cal.App.4th 572, 578, 113 Cal.Rptr.2d 255.) As such, neither the NFL nor its member clubs fit the Jones model of fiduciary duties owed by majority shareholders to their corporation and to minority shareholders.

Even were we to ignore this glaring distinction, the claim here is that the organization (the NFL), not its majority members (or purported "majority shareholders"), owes the Raiders fiduciary duties. Jones is thus inapposite on this basis as well.

Moreover, we find the entire rationale of Jones to have no application to the facts of this case. In Jones, the Supreme Court addressed the inherent unfairness of majority shareholders of a for-profit corporation using their dominant position to further their own interests at the expense of minority shareholders. Here, the Raiders' claim is that the nonprofit organization itself (and its commissioner) acted in a manner that was prejudicial to the Raiders. This contention is a far cry from the corporate abuse that the Supreme Court addressed in