Copart, Inc. v. Sparta Consulting, Inc. (277 F. Supp. 3d 1127, 2017)

United States District Court for the Eastern District of California 2017-09-26

Citations

Full opinion text

ORDER

Kimberly J. Mueller, UNITED STATES DISTRICT JUDGE

An online vehicle auction company hired a software development company to design and build its new online system, but when the project did not go as planned the auction company terminated the contract and the parties sued each other. The auction company, plaintiff Copart, Inc. (“Co-part”), moves for summary judgment on counter-claims brought by the software development company, defendant Sparta Consulting, Inc. (“Sparta”), and for partial summary judgment on elements of its own claims. Copart Mot., ECF No. 197. Sparta, along with its parent companies, defendants KPIT Infosystems, Inc. (“KPIT In-fosystems”) and India-based KPIT Technologies, Ltd. (“KPIT India”), move for summary judgment on Copart’s claims. Sparta Mot., ECF No. 184; KPIT India Mot., ECF No. 185; KPIT Infosystems Mot., ECF No. 186. For the reasons explained below, the court GRANTS IN PART and DENIES IN PART each motion.

Table of Contents

I. Factual Background... 1137

A. The Parties and the Project.. .1138

B. The Contract and Design Statement... 1138

C. The Build Statement and Contract Amendment.. .1138

D. Termination and the Lawsuits. ..1139

II. Procedural Background... 1139

A. Procedural History... 1139

B. Copart’s and Claims... 1139 Sparta’s

III. Summary Judgment... 1140

IV. Contract-Related Claims... 1141

A. The Implementation Agreement.. .1141 Services

B. Sparta’s Motion... 1141

C. Copart’s Motion on Claims. 1144 Copart’s

D. Copart’s Motion on Claims... 1144 Sparta’s

V. Fraud-Related Claims... 1148

A Fraud under California Law... 1148

B. Sparta’s Motion... 1149

C. Copart’s Motion... 1152

D. Derivative Claims.. .1152

VI. Trade Secrets... 1153

A. Factual Background... 1153

B. Trade Secrets Generally... 1153

C. Copart’s Trade Secrets.. .1153

D. Copart’s Ownership of the Trade Secrets... 1155

E. Copart’s Damages... 1155

VII. Preemption.. .1156

A. CUTSA Preemption... 1156

B. Common Law Misappropriation. ..1158

C. Conversion,.. 1158

D. Unfair Competition and Unjust Enrichment. ..1160

E. Professional Negligence... 1160

F. Conclusion... 1160

VIII. Computer Hacking Claims... 1161

A. CFAA and CDAFA Generally... 1161

B. Copart’s Evidence of Computer Hacking.. .1161

IX. Professional Negligence.. .1162

A. Relation Back Generally... 1163

B. Initial Matters... 1163

C. Relation Back Here... 1164

X. KPIT Entities... 1165

XI. Conclusion... 1166

I. FACTUAL BACKGROUND

The following facts are not disputed unless otherwise noted. See A.G. v. Paradise Valley Unified Sch. Dist. No. 69, 815 F.3d 1195, 1202 (9th Cir. 2016).

A. The Parties and the Project

Copart is a publicly traded company that sells more than two million vehicles per year. Sparta’s Statement of Undisputed Facts (“SSUF”) 2, ECF No. 187. To auction vehicles online, Copart uses its self-developed Enterprise Resource Planning (“ERP”) system called Copart Auction System (or “CAS”). SSUF 3. Copárt began using CAS in, 1997.. SSUF 4; Takenouchi Decl. Ex. 173 at 19:3-21, ECF No. 222-8.

In 2011, Copart sought a software development company to help replace Copart Auction System with a different software language made by SAP. SSUF 5. The new system was to be called “AIMOS,” for Auction Inventory Management and Operating System. After initially hiring Accenture, LLP (“Accenture”) to design and build AIMOS, Copart fired Accenture and split the contract into two phases, a design phase and a build phase, with a bidding process for each phase. SSUF 6, '9.

B. The Contract and Design Statement

After considering bids from three firms, Copart selected Sparta, a California corporation that designs and implements SAP-based ERP software solutions, to design AIMOS. SSUF 1, 10. On October 6, 2011, Copart and Sparta signed the Implementation Services Agreement (“the Contract” or “ISA”). SSUF 13; see also Takenouchi Decl. Ex. 2 (ISA), ECF No. 198-2. Under the Contract, Sparta promised to complete work laid out in the Design Project Statement of Work (“Design Statement”), which the parties also signed on October 6. SSUF 26. The Design Statement outlines a twenty-week project and details three milestones for Sparta’s design of AIMOS during that time. Takenouchi Decl. Ex. 3 (Design Statement), ECF No. 198-3; SSUF 27. Each milestone in the Design Statement includes technical requirements, a completion schedule, and a fixed fee conditioned on Copart’s review and acceptance. SSUF 29. Copart agreed to pay' $3,250,000 for the first three milestones and an additional $1,400,000 for a fourth milestone the parties later added. Design Statement at 26; ISA § 9.1; SSUF 28; Llewellyn Decl. Ex. I (Change Request Form), ECF No. 196-9.

Between December 2011 and March 2012, Copart accepted in writing and paid for the first four milestones (Milestones 1 through 4), all related to AIMÓS’s design. SSUF 31-41. Copart contends Sparta fraudulently induced Copart’s acceptance of these milestones. See Opp’n to Sparta at 15-16, ECF No. 209 (alleging six instances of Sparta’s fraud).

C.The Build Statement and Contract Amendment

On March 28, 2012, after considering bids from several firms to actually build AIMOS, Copart again selected Sparta. SSUF 42.- Copart and Sparta signed the Statement of Work for the AIMOS SAP Implementation at Copart Realization Project (“Build Statement”). SSUF 45; Tak-enouchi Decl. Ex. 18 (Build Statement), ECF No. 198-18. The Statement includes eleven milestones (Milestones 5 through 15) for an agreed amount of $18,800,000. SSUF 48; Build Statement at 8-34.

In mid-2012, Copart accepted in writing and paid for the first three build phase milestones (Milestones 5 through 7). SSUF 49-57. As with the design phase milestones, Copart contends Sparta fraudulently induced its acceptance.

In August 2013, Copart and Sparta amended the Implementation Services Agreement (“the Contract Amendment” or “ISA Amendment”). SSUF 59; Takenou-chi Deck Ex. 69 (ISA Amendment), ECF No. 198-69. The Amendment sets forth requirements for Milestones 8 and 9 and revised the schedule for the remaining milestones (i.e., Milestones 10 through 15). See ISA Amendment §§ 1-2; id Ex. B. Copart neither accepted nor paid for the remaining eight milestones, including the two the Amendment covered. SSUF 58.

D. Termination and Litigation

On September 17, 2013, Copart terminated its agreements with Sparta “for convenience” and asked Sparta to submit a request,for payment for work completed to date. SSUF 60; Nadgauda Deck Ex. L (Termination Letter), ECF No. 190-12. Sparta replied, detailing the work performed and requesting payment for approximately $12 million, a substantial remainder of the unpaid fees. SSÜF 62; Llewellyn Deck Ex. M (Request for Payment), ECF No. 196-13. Copart rejected Sparta’s request and sued Sparta in Texas state court for its “unreasonable” position. Llewellyn Deck Ex. M (Copart’s Rejection Letter), ECF No. 196-14; SSUF 63 (complaint filed November 1, 2013). Sparta sued Copart in this court. Comph, ECF No. 1 (filed January 8, 2014). Copart’s state action was removed to federal court and transferred here; the two actions are now consolidated. See Order Consolidating Cases at 1-2, ECF No. 30.

IL PROCEDURAL BACKGROUND

A. Procedural History

In this consolidated case, Copart is the plaintiff/counter-defendant and Sparta is the defendant/counter-claimant. Scheduling Order at 2, ECF No. 33 (realigning the parties in this way). On June 8, 2016, Copart filed the operative Third Amended Complaint; which added Sparta’s parent entities, KPIT Infosystems and-KPIT India, as defendants. For simplicity, this order uses “plaintiff’ to refer to Copart and “defendants” to refer to Sparta and its parent entities, collectively.

Sparta counterclaimed against Copart. Counterch, ECF No. 134. As discussed below, the parties move for summary judgment on both Copart’s and Sparta’s claims,

B. Copart’s and Sparta’s Claims

Copart brings the following claims against Sparta only: (1) Fraudulent Inducement; (2) Fraud; (3) Negligent Misrepresentation; (4) Breach of Contract; (5) Breach of the Implied Covenant of Good Faith and Fair Dealing; and (6) Request for Declaratory Relief. TAC ¶¶ 121-159. Copart brings the following claims against Sparta, KPIT Infosystems, and KPIT India: (7) Trade Secret Misappropriation; (8) Common Law Misappropriation; (9) Conversion; (10) Professional Negligence; (11) Violation of Computer Fraud and Abuse Act, 18 U.S.C. § 1030 (“CFAA”); (12) Violation of Comprehensive Computer Data Access And Fraud Act, Cal. Penal Code § 502 (“CDAFA”); (13) Unfair Competition; and (14) Unjust Enrichment. TAC ¶¶ 160-220.

Sparta counter-claims against Copart for: (1) Breach of Contract; (2) Promissory Estoppel; (3) Breach of the Implied Covenant of Good Faith and Fair Dealing; (4) Quantum Meruit; (5) Unjust Enrichment; and (6) Declaratory Relief. Coun-terch ¶¶ 101-41,

Copart moves for summary judgment on Sparta’s counter-claims, and for partial summary judgment on elements of some of its own claims. See Copart Mot. Defendants jointly oppose. Opp’n to Copart, ECF No. 204, Copart has filed a reply. Copart Reply, ECF No. 224.

Defendants move for summary judgment on Copart’s claims. Sparta Mot.; KPIT India Mot.; KPIT Infosystems Mot. Copart opposes. Opp’n to Sparta; Opp’n to KPIT India, ECF No. 210; Opp’n to KPIT Infosystems, ECF No. 212. Defendants have replied. KPIT India Reply, ECF No. 232; Sparta Reply, ECF No. 233; KPIT Infosystems Reply, ECF No. 234.

III. SUMMARY JUDGMENT

A court will grant summary judgment “if.. .there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The “threshold inquiry” is whether “there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

In determining summary judgment, a court uses a burden-shifting scheme. The moving party must first satisfy its initial burden. “When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial.” C.A.R. Transp. Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citation and internal quotation marks omitted). In contrast, when the nonmoving party bears the burden of proving the claim or defense, the moving party can meet its burden in two ways: (1) by presenting evidence to negate an essential element of the nonmoving party’s case; or (2) by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element essential to that party’s case on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323-25, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

If the moving party fails to meet its initial burden, summary judgment must be denied and the court need not consider the nonmoving party’s evidence. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). If the moving party meets its initial burden, however, the burden then shifts to the non-moving party, which “must establish that there is a genuine issue of material fact.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). In carrying their burdens, both parties must “cit[e] to particular parts of materials in the record ...; or show [ ] that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.” Fed. R. Civ. P. 56(c)(1); see also Matsushita, 475 U.S. at 586, 106 S.Ct. 1348 (“[The nonmoving party] must do more than simply show that there is some metaphysical doubt as to the material facts.”). Moreover, “the requirement is that there be no genuine issue of material fact....Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson, 477 U.S. at 247-48, 106 S.Ct. 2505 (emphasis in original).

In deciding summary judgment, the court draws all inferences and views all evidence in the light most favorable to the nonmoving party. Matsushita, 475 U.S. at 587-88, 106 S.Ct. 1348; Whitman v. Mineta, 541 F.3d 929, 931 (9th Cir. 2008). “Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no ‘genuine issue for trial.’” Matsushita, 475 U.S. at 587, 106 S.Ct. 1348 (quoting First Nat’l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 289, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968)).

A court may consider evidence as long as it is “admissible at trial.” Fraser v. Goodale, 342 F.3d 1032, 1036 (9th Cir. 2003). “Admissibility at trial” depends not on the evidence’s form, but on its content. Block v. City of L.A., 253 F.3d 410, 418-19 (9th Cir. 2001) (citing Celotex, 477 U.S. at 324, 106 S.Ct. 2548). The party seeking admission of evidence “bears the burden of proof of admissibility.” Pfingston v. Ronan Eng’g Co., 284 F.3d 999, 1004 (9th Cir. 2002). If the opposing party objects to the proposed evidence, the party seeking admission must direct the district court to “authenticating documents, deposition testimony bearing on attribution, hearsay exceptions and exemptions, or other eviden-tiary principles under which the evidence in question could be deemed admissible.” In re Oracle Corp. Sec. Litig., 627 F.3d 376, 385-86 (9th Cir. 2010). However, courts are sometimes “much more lenient” with the affidavits and documents of the party opposing summary judgment. Scharf v. U.S. Att’y Gen., 597 F.2d 1240, 1243 (9th Cir. 1979).

The Supreme Court has taken care to note that district courts should act “with caution in granting summary judgment,” and have authority to “deny summary judgment in a case where there is reason to believe the better course would be to proceed to a full trial.” Anderson, 477 U.S. at 255, 106 S.Ct. 2505. A trial may be necessary “if the judge has doubt as to the wisdom of terminating the case before trial.” Gen. Signal Corp. v. MCI Telecomms. Corp., 66 F.3d 1500, 1507 (9th Cir. 1995) (quoting Black v. J.I. Case Co., 22 F.3d 568, 572 (5th Cir. 1994)). This may be the case “even in the absence of a factual dispute.” Rheumatology Diagnostics Lab., Inc v. Aetna, Inc., No. 12-05847, 2015 WL 3826713, at *4 (N.D. Cal. June 19, 2015) (quoting Black, 22 F.3d at 572); accord Lind v. United Parcel Serv., Inc., 254 F.3d 1281, 1285 (11th Cir. 2001).

IV. CONTRACT-RELATED CLAIMS

To assess Copart’s and Sparta’s summary judgment motions as to their contract-related claims, the court first reviews the material terms of their agreements.

A. The Implementation Services Agreement

The dispute here derives from differing interpretations of the Contract, or ISA. Under the Contract, Sparta promises to complete the work the Statements ascribe to each milestone. ISA § 2.1; see also Design Statement; Build Statement. Once Copart accepts the work, Copart agrees to pay for certain associated fees as described in the Statements. Id. §§ 3.1, 1.16, 1.23, 9.1, 9.3. The Contract specifies a method of delivery, review and acceptance for all milestone-related work. See id. § 4. Copart may terminate the Contract “for convenience,” “for specified events” or “for cause.” See id. §§ 15.2-15.4. If Copart terminates for convenience, it must pay Sparta for a portion of the services completed as of the termination date, subject to several limitations. Id. § 15.2.

B. Sparta’s Motion

Sparta moves for summary judgment on Copart’s breach of contract claim, contending (1) Copart’s decision to terminate “for convenience” rather than “for cause” forecloses Copart’s claim; (2) Copart waived its claims for the first seven milestones by accepting them; and (3) Copart cannot show any damages for the remaining milestones. See Sparta Mot. at 24-26.

1. Termination for Convenience

Copart may terminate the contract “for convenience” under section 15.2, “for specified events” under section 15.3 or “for cause” under section 15.4. See ISA §§ 15.2-15.4. A “for cause” termination requires Copart to give notice of Sparta’s alleged material failure to perform under the Agreement and a thirty-day opportunity to cure. Id. § 15.4, A "for convenience” termination requires no advance notice or cure period, but it entitles Sparta to payment for “the portion of the Services that have been performed and completed as of the termination date.” Id. § 15.2.

Sparta argues Copart’s termination “for convenience” precludes Copart from later suing for breach of contract, Sparta Mot. at 24, but the Contract does not foreclose Copart’s right to do so. If the parties intended to foreclose Copart’s suing after termination “for convenience,” they could have done so but did not. See, e.g., ISA §§ 9.7 (payment of fees not a waiver of Copart’s right), 19.8 (either party’s delay in exercising rights under agreement not a waiver of such right), 19.11 (waiver of any right valid only if writteh and signed by both parties). As a matter of law, “for convenience” termination does not necessarily foreclose suit. See, e.g., United States ex rel. EPC Corp. v. Travelers Cas. & Sur. Co. of Am., 423 F.Supp.2d 1016, 1018, 1027—28 (D. Arfe. 2006) (after contractor terminated subcontract for convenience, denying subcontractor’s motion for summary judgment on contractor’s breach of contract claims); Lisbon Contractors, Inc. v. United States, 828 F.2d 759, 769 (Fed. Cir. 1987) (rejecting contractor’s argument that United States could not recover for corrective work after it terminated contract for convenience). No contract language forecloses Copart’s ability to sue and there is no basis for such a restriction. Copart may assert breach of contract claims even after terminating for convenience.

2. Acceptance of Milestones

The Contract -establishes a clear process for delivery, review and acceptance of milestones and deliverables. See ISA § 4.1-4.4; After a milestone is delivered in accordance with the applicable Statement of Work, id. § 4.1, Copart has ten days to review the milestone, id. § 4.2, using the Statement of Work’s acceptance criteria, id. § 4.3. “If in Copart’s sole discretion a Deliverable or Milestone satisfies all the applicable Acceptance Critexia, Copart will provide written confirmation of acceptance to [Sparta].” Id. § 4.4(a). But if “Copart determines that a Milestone or Deliverable fails to satisfy the Acceptance Criteria, Copart shall provide a notice of non-acceptance to [Sparta], and [Sparta] shall promptly correct any non-conformity with the applicable Acceptance Criteria.” Id. A milestone is completed and accepted only when Sparta receives Copart’s acceptance of all deliverables related to that milestone. Id. § 4.4(b). The milestone-based fees are due upon Copart’s acceptance of each milestone. Id. § 9.1,

Copart followed this process for the first seven milestones. SSUF 31-41, 49-57. For each milestone, Copart’s Chief Technology Officer, Vincent Phillips, signed the form titled “Milestone Sign Off,” which acknowledged acceptance of the milestone, expressly stating Sparta had “no further obligations with respect to” the milestone-related deliverables. Id. Copart also paid Sparta for the milestone-related delivera-bles. Id. Copart acknowledges it knew some of these deliverables were incomplete before accepting them. Copart’s Statement of Undisputed Facts (“CSUF”) at 37-42, ECF No. 200. Indeed, Copart partially bases its fraud claims on Sparta’s alleged reassurances that these deficiencies would be corrected later. Id. Yet, Copart never exercised its contractual right of “non-acceptance” for any milestone, which would have obligated Sparta to “promptly correct any non-conformity.” ISA § 4.4(a).

Copart’s acceptance of the first seven milestones waived Copart’s right to sue for defects within the deliverables associated with these milestones. “California courts will find waiver when a party intentionally relinquishes a right or when that party’s acts are so inconsistent with an intent to enforce the right as to induce a reasonable belief that such right has been relinquished.” Farhang v. Indian Inst. of Tech., Kharagpur, No. C-08-02658 RMW, 2010 WL 3504897, at *2 (N.D. Cal. Sept. 7, 2010); see also BNSF Ry. Co. v. San Joaquin Valley R.R. Co., No. CV F 08-1086 AWI SMS, 2012 WL 1355662, at *12-13 (E.D. Cal. Apr. 18, 2012) (plaintiff es-topped from claiming .damages arising from contract after repeatedly accepting performance with notice of potential breach). Copart,' quoting the Contract, argues “[pjayment of an invoice will not constitute ... a waiver by Copart of any rights.” ISA § 9.7. But the Contract does not provide similar language for Copart’s acceptance, id. § 4.1-4.4, which Copart expressly and repeatedly provided here, SSUF 31-41, 49-57. .

Copart may still proceed on the first seven milestone's under a fraudulent inducement theory. Copart argues that, among Sparta’s misrepresentations and omissions discussed below, Sparta fraudulently induced acceptance of the milestones as well as the rehiring of Sparta for the build phase of the contract by providing false reassurances about Sparta’s intent to provide “100% CAS functionality.” Opp’n to Sparta at 23-24; see also CSUF at 37-42. If Copart can show Sparta behaved fraudulently, which a reasonable juror could find for reasons explained below, then Sparta cannot prove Copart’s waiver by acceptance. Thus, Copart may continue to seek a remedy for the first seven milestones, but only under its fraudulent' inducement theory.

3. Damages

Sparta moves for summary judgment on the eight milestones for which Copart never paid (Milestones' 8 through 15), arguing Copart cannot show damages. 'Sparta Mot. at 26. Copart never responds to this argument, Opp’n to Sparta at 24-25, and the record does not show Copart’s damages related to these eight milestones. “Under California law, a breach of contract claim requires a showing of appreciable and actual damage.” Aguilera v. Pirelli Armstrong Tire Corp., 223 F.3d 1010, 1015 (9th Cir. 2000) (citing Patent Scaffolding Co. v. William Simpson Const. Co., 256 Cal.App.2d 506, 511, 64 Cal.Rptr. 187 (1967)). Moreover, “[w]here discovery has been completed, summary judgment is appropriate when a party challenged by motion fails to offer evidence supporting an element of a claim on which that party bears the burden of proof at trial.” Celotex, 477 U.S. at 322-24, 106 S.Ct. 2548. Because Copart has shown no basis for such damages, the court finds summary judgment in favor of Sparta appropriate as to these milestones. See Weinberg v. Whatcom County, 241 F.3d 746, 751 (9th Cir. 2001) (where party “failed to offer competent evidence of damages, dismissal on summary judgment was appropriate”).

4. Conclusion

The court GRANTS IN PART Sparta’s motion on these claims. Not only is Copart limited to its fraud theory to recover on the first seven milestones (Milestones 1 through 7), but it is also precluded from pursuing damages related to the remaining eight milestones for which it never paid (Milestones 8 through 15). The court next moves to Copart’s motion regarding its contract claim, which is accordingly limited to the first seven milestones.

C. Copart’s Motion on Copart’s Claims

A claim for breach of contract has four elements: a valid contract, plaintiffs performance, defendant’s breach and damages. Oasis W. Realty, LLC v. Goldman, 51 Cal.4th 811, 821, 124 Cal.Rptr.3d 256, 250 P.3d 1115 (2011). Copart moves for partial summary judgment as to the breach element of its claim. See Copart Mot. at 23-24.

Copart asserts three theories for summary adjudication, but includes no supporting analysis; instead, it cites several exhibits and ten pages of proffered facts, none of which support summary adjudication. Id. (citing Takenouchi Deck Exs. 52, 33, 8, 57, 56, 37, 21; CSUF at 15—24). Copart’s first two theories, that Sparta did not use “qualified individuals” and that it did not act with “promptness, diligence, and in a professional manner,” are heavily fact intensive. Even assuming Copart satisfied its initial burden of production, C.A.R., 213 F.3d at 480, Sparta cites numerous genuine factual disputes, Matsushita, 475 U.S. at 585, 106 S.Ct. 1348. See Defendants’ Statement of Disputed Facts (“DSDF”) 1-2, 9-10, ECF No. 206; Defs.’ Response to CSUF at 63-108. For example, in signing off on the first milestone, Copart’s AIMOS' project manager, Terry Ash wrote: “I am very pleased with the performance of the Sparta team on this engagement. Some sound bytes [sic]: Strong work ethic; Good expertise in team; Strong commitment to schedule; Excellent team work—the Sparta and Cop'art team are blending into one.” Nadgauda Suppl. Deck Ex. B at 2, ECF No. 208-2; see also id. Ex. C, ECF No. 208-3 (Copart’s Chief Technology Officer’s e-mail to Sparta employees, explaining “It was truly a joint effort—great teamwork and effort from all. My appreciation goes out to the Sparta team.”). There is thus a genuine dispute as to Sparta employees’ qualifications and professionalism. Similarly, Copart’s third theory, that Sparta stole its intellectual property, largely relies on Sparta’s employees’ alleged unauthorized copying of material; but as the court finds below, whether Sparta stole Copart’s intellectual property is also genuinely disputed. See infra Part VIII.B.l. The court DENIES Copart’s motion for partial summary judgment as to breach element of its contract claim.

D. Copart’s Motion on Sparta’s Claims

Copart moves for summary judgment on Sparta’s contract-related claims. See Co-part Mot.’ at 19-22. Copart argues (1) section 15.2 bars Sparta’s breach of contract and implied covenant of good faith claims because Sparta did not maintain a “project management software system” and Copart never “agreed” the work was complete; (2) Sparta may not proceed on contract-related claims because it did not produce damages calculations; and (3) the Contract itself bars Sparta’s quasi-contract claims. Id.

1. The Contract’s Requirements for Payment

If Copart terminates the Contract “for convenience,” it must pay Sparta “for the portion of the Services that have been performed and completed as of the termination date, as such portion agreed by Copart and calculated and documented by Service Provider’s project management software system.” ISA § 15.2.

Copart first argues Sparta cannot show it maintained a “project management software system” that would provide a basis for the damages Sparta seeks. Copart Mot. at 20. But the court finds a reasonable juror could disagree. The parties essentially dispute whether SharePoint, the program on which Sparta relies, or MS Project, the program that Copart says is required, is a “project management software system.” Compare Opp’n to Copart at 8-10, 'with Copart Reply at 5-6. Both parties present evidence in their favor. Sparta explains SharePoint is an online collaborative repository both Sparta and Copart used throughout the project, SharePoint maintained all AIMOS-related documents, and several Copart-approved documents expressly referenced Share-Point. Nadgauda Suppl. Deck ¶¶ 6-10, ECP No. 208. But Copart contends the parties agreed to use MS Project, a program specially designed for program management, to present project plans and track progress on the development of AI-MOS. See, e.g., Design Statement at 6. However, neither party cites any agreement that would limit “project management software system” to only one program: a reasonable juror could find that in fact both systems meet this requirement.

Copart next argues it never “agreed” any portion of the services for which Sparta seeks recovery had “been performed and completed as of the termination date.” Copart Mot. at 20. To the extent Copart suggests it must have reviewed and accepted the incomplete work for Copart to have agreed to it, Copart’s argument conflates “accepted” and “agreed.” See Copart Reply at 6-7. As discussed above, Sparta is already entitled to payment for work Co-part “accepted,” ISA §§ 4.1-4.4, so Sparta’s right to be paid upon termination to work Copart “agreed” to must entitle it to something more, id. § 15.2. Whereas the Contract carefully delineates a process for Copart’s acceptance of complete work, id. §§ 4.1-4.4, it prescribes no process by which Copart would agree to the “portion of Services” Sparta completed, id. § 15.2. To the extent Copart instead argues it has unfettered discretion whether to “agree” to Sparta’s evaluation of work completed, the court disagrees. Sparta’s contractual entitlement to be paid for its “performed and completed” services would mean nothing if Sparta could simply not “agree” because it did not want to pay. Indeed, Sparta’s accusation is that Copart filed suit after it solicited then rejected Sparta’s accounting of the additional completed work. See Termination Letter; Request for Payment; Copart’s Rejection Letter (explaining “Copart does not agree to Sparta’s assessment... .[and so] nothing is due under section 15.2”).

Whether Copart “agreed” to Sparta’s work thus becomes a fact-intensive inquiry not susceptible to resolution on summary judgment. Sparta may be entitled to payment for the “portion of the Services that-have been performed,” ISA § 15.2, as referenced in the Statements of Work, id. §§ 1.32, 2.1. Whether Copart “agreed” to work may be gleaned from the Contract and Statements. But a reasonable juror could also glean such agreement from the project documents Copart reviewed and the weekly and monthly meetings Sparta cites. See, e.g., Nadgauda Suppl. Deck ¶¶ 8, 10, 14. Because Copart offers no viable interpretation of the Contract that would preclude a juror from so discerning, a genuine dispute stands in the way of granting summary judgment.

2. Sparta’s Damages

Copart argues Sparta’s contract-related claims fail because Sparta has not shown damages. Copart Mot. at 21-22. But, unlike Copart, Sparta provides competent evidence and calculations supporting its request for damages. After Copart terminated the Contract, Sparta sent a payment request letter explaining two calculation methods: first, it said it had completed nearly eighty-five percent of the “technical objects” identified in the Statements of Work; second, that it had passed approximately eighty-four percent of the “test cases” Copart executed across the project’s three geographic areas. See Request for Payment at 6. Sparta cites evidence in the record supporting the “test cases” calculation. Nadgauda Suppl. Deck Ex. A at 9-11, ECF No. 208-1. Thus, Sparta provides competent evidence of calculating damages and summary judgment to Copart is not appropriate on this basis. See Weinberg, 241 F.3d at 751. The court need not address Sparta’s third and alternative method based on hours spent on the AIMOS project.

3. The Quasi-Contract Claims

Copart argues the Contract itself precludes Sparta’s claims for promissory es-toppel, quantum meruit and unjust enrichment. Copart Mot. at 15. Copart cites three bases for its claims: the Contract precludes recovery for “indirect, incidental, special or consequential damages” beyond what the Contract expressly permits, id. (citing sections 9.3, 15.5, 18); Sparta presents no evidence of “gross negligence or willful misconduct” to trigger an exception to the Contract’s liability limitation, id.-, and Sparta cannot show Sparta’s claims are outside the Contract’s scope, id. n.5. Copart has met its initial burden in this respect.

A party may allege inconsistent theories through alternative pleading, and the court previously permitted Sparta to “seek both an equitable remedy of es-toppel and a legal remedy for breach of contract.” Sept. 14, 2015 Order at 6, ECF No. 65 (citing Fed. R. Civ. P. 8(d)(2)-(3); Arnold & Assocs., Inc. v. Misys Healthcare Sys., 275 F.Supp.2d 1013, 1030 n.11 (D. Ariz. 2003)). At the time, the court specifically warned “the equitable claims will not lie if Sparta ultimately seeks the same remedy as for the breach of contract claims.” Id. at 8. This is because “an action based on an implied-in-fact or quasi-contract cannot lie where there exists between the parties a valid express contract cover; ing the same subject matter.” June 9, 2015 Order at 8-10, ECF No. 55 (quoting Lance Camper Mfg. Corp. v. Republic Indem. Co., 44 Cal.App.4th 194, 203, 51 Cal.Rptr.2d 622 (1996)). “When parties have an actual contract covering a subject, a court cannot—not even under the guise of equity jurisprudence—substitute the court’s own concepts of fairness regarding that subject in place of the parties’ own contract.” Id, (quoting Hedging Concepts, Inc. v. First Alliance Mortg. Co., 41 Cal.App.4th 1410, 1420, 49 Cal.Rptr.2d 191 (1996)). Based on this reasoning, the court concluded “Sparta may assert quasi-contract principles only if the work giving rise to the equitable claims is different from the work covered by the written agreement.” Id. (citing Shum v. Intel Corp., 630 F.Supp.2d 1063, 1077 (N.D. Cal. 2009), aff'd, 633 F.3d 1067 (Fed. Cir. 2010) (holding unjust enrichment claim not precluded by parties’ written agreement where agreement covered conduct different from that underlying unjust enrichment claim)).

Here, Sparta raises no genuine dispute as to whether the work underlying the equitable- and contract claims is different. The court already has found Sparta may be entitled under the Contract to work Copart “agreed to” even if Copart never “accepted” it, and Sparta cites no work it completed that the-Contract would not cover. Instead, Sparta’s equitable claims seek compensation for the reasonable value of, or benefit conferred by, Sparta’s work under the Contract. See Countercl. ¶¶ 107, 123, 132. But although Sparta generally alleges it completed “work outside the scope of the contract,” id. ¶ 107, it has not backed up these allegations by any reference to the record. See Sparta Opp’n at 15.

The Contract plainly limits Co-part’s liability to Sparta for its work completed under the Contract and the Statements of Work. Specifically, the Contract provides “the Fees described in Section 9 shall fully compensate [Sparta] for all of the Services”. and “Copart shall not be responsible for the payment of. ..any charges, fees or other amounts other than the Fees." ISA § 9.3. Copart is thus required to pay only Milestone-Based Fees for Services in the Statements or separately agreed to by the parties. Because the Milestone-Based Fees are performed on a “fixed-fee basis,” Sparta is contractually precluded from receiving fees for any other “services.” ISA § 9.1. In its language regarding termination, the Contract also limits Sparta to fees under the agreement. See ISA § 15.2 (“Termination for Convenience” requires Copart to pay “only for the portion of the Services that have been performed and completed as of the termination date[.]”); id. § 15.5 (explaining “Co-part shall not be obligated to pay any costs, fees, charges or other amounts in connection with any termination of this Agreement” other than the fees permitted under section 15.2). The Contract also restricts how “New Services” may be added to the agreement. See id. § 2.2 (unless the parties agree in writing to additional services, “[a]ny new services performed by [Sparta]... shall be - deemed part of the Services without incremental charge”). Finally, section 18 of the Contract, entitled “Limitations on Liability,” provides in relevant part “neither [party] shall be liable for any indirect, incidental, special, or consequential damages arising out of or relating to its performance or failure to perform under this Agreement[,]” Id. § 18, In sum, the Contract’s provisions limit Copart to services payment obligations only, narrowly ' limit how additional compensable services may be added to the Contract, and preclude Sparta from recovering any “indirect, incidental, special, or consequential damages” for services under the agreement.

Instead of attempting to establish • a genuine issue of material fact regarding work completed outside the Contract, Sparta misconstrues Copart’s motion as a “pleadings challenge” this court has already rejected and asks the court, “[i]n the absence of any new evidence,” to once again reject those arguments. Opp’n to Copart at 15. Sparta misconstrues its burden on summary judgment. The court limited its prior rulings to the pleadings stage and specifically warned Sparta of its burden to show “the work giving rise to the equitable claims is different from the work covered by the written agreement.” June 8, 2015 Order at 9. Although Sparta alleges Copart made additional demands for “numerous software functionalities and enhancements” that fall outside the scope of the Contract and the Statements, see TAC ¶¶ 128, 134, Sparta does not raise a genu: ine dispute about these allegations, see Opp’n to Copart at 15-16. Sparta has not satisfied its burden, and summary judgment is appropriate on Sparta’s quasi-contract claims.

4. Conclusion

A reasonable juror could dispute what work Copart “agreed to,” and Sparta- may therefore be contractually entitled to compensation for some or all of that work, for which Sparta has produced competent evidence to show damages. The court therefore DENIES Copart’s motion as to Sparta’s claims of breach of contract and implied covenant of good faith. But whether Copart “agreed to” that work is a separate question from whether the Contract covers the “same subject matter” as that supporting the • equitable claims. Because Sparta has not met its burden to establish a genuine issue as to any work beyond the Contract’s scope, the court GRANTS Copart’s motion on Sparta’s claims of promissory estoppel, quantum meruit and unjust enrichment.

V. FRAUD-RELATED CLAIMS

Sparta moves for summary judgment on Copart’s claims of fraudulent inducement, fraud and negligent misrepresentation. Sparta Mot. at 17-24. Copart separately moves for partial summary judgment on the misrepresentation element common to those claims. Copart’s Mot. at 23.

A. Fraud under California Law

Sparta argues Copart’s fraud-related claims cannot succeed under any of several state fraud doctrines. In California, the elements of fraud and deceit are (1) “misrepresentation (false representation, concealment, or nondisclosure)”; (2) “knowledge of falsity (or ‘scienter’)”; (3) “intent to defraud, i.e., to induce reliance”; (4) “justifiable reliance”; and (5) “resulting damage.” Engalla v. Permanente Med. Group, Inc., 15 Cal.4th 951, 973-74, 64 Cal.Rptr.2d 843, 938 P.2d 903 (1997); Lazar v. Super. Ct., 12 Cal.4th 631, 638, 49 Cal.Rptr.2d 377, 909 P.2d 981 (1996); see also Cal. Civ. Code § 1709 (“One who willfully deceives another with intent to induce him to alter his position to his injury or risk, is liable for any damage which he thereby suffers.”). Promissory fraud or fraud in the inducement, a subspecies of fraud and deceit, has the same elements but also requires that the “defendant fraudulently induce[d] the plaintiff to enter into a contract.” Engalla, 15 Cal.4th at 973-74, 64 Cal.Rptr.2d 843, 938 P.2d 903 (quoting Lazar, 12 Cal.4th at 638, 49 Cal.Rptr.2d 377, 909 P.2d 981).

Negligent misrepresentation, another form of deceit, occurs “[w]here the defendant makes false statements, honestly believing that they are true, but without reasonable ground for such belief[.]” Bily v. Arthur Young & Co., 3 Cal.4th 370, 407, 11 Cal.Rptr.2d 51, 834 P.2d 745 (1992). The elements of negligent misrepresentation include “(1) the misrepresentation of a past or existing material fact, (2) without reasonable ground for believing it to be true, (3) with intent to induce another’s reliance on the fact misrepresented, (4) justifiable reliance on the misrepresentation, and (5) resulting damage.” Apollo Capital Fund, LLC v. Roth Capital Partners, LLC, 158 Cal.App.4th 226, 243, 70 Cal.Rptr.3d 199 (2007) (quoting Shamsian v. Atl. Richfield Co., 107 Cal.App.4th 967, 983, 132 Cal.Rptr.2d 635 (2003)). Negligent misrepresentation differs from fraud in two core respects: it is narrower than fraud in that it requires a positive assertion, not merely an omission or implied assertion; it is broader than fraud in that it requires only an unreasonable belief in the truth of the statement, not knowledge of falsity. Apollo Capital, 158 Cal.App.4th at 243, 70 Cal.Rptr.3d 199 (citing Bily, 3 Cal.4th at 407, 11 Cal.Rptr.2d 51, 834 P.2d 745); see also Shamsian, 107 Cal.App.4th at 984, 132 Cal.Rptr.2d 635.

Deceit based on concealment, not misrepresentation, additionally requires that the defendant was under a duty to disclose the fact to the plaintiff. Mktg. West, Inc. v. Sanyo Fisher (USA) Corp., 6 Cal.App.4th 603, 612-13, 7 Cal.Rptr.2d 859 (1992)). Such a duty may exist “when one party to a transaction has sole knowledge or access to material facts and knows that such facts are not known to or reasonably discoverable by the other party.” Goodman v. Kennedy, 18 Cal.3d 335, 347, 134 Cal.Rptr. 375, 556 P.2d 737 (1976). Alternatively, even where a person has no duty to speak, “if he undertakes to do so, either voluntarily or in response to inquiries, he is bound not only to state truly what he tells but also not to suppress or conceal any facts within his knowledge which materially qualify those stated.” Mktg. W., 6 Cal.App.4th at 613, 7 Cal.Rptr.2d 859 (quoting Rogers v. Warden, 20 Cal.2d 286, 289, 125 P.2d 7 (1942)). “If he speaks at all he must make a full and fair disclosure.” Id. Whether a duty exists can be a fact-intensive question best left for a trier of fact. See id. at 614, 7 Cal.Rptr.2d 859.

B. Sparta’s Motion

Sparta moves for summary judgment on the fraud-related claims on the grounds that (1) the allegedly fraudulent representations are non-actionable opinions; (2) Copart cannot show it justifiably relied on these representations; (3) Copart has no evidence of Sparta’s intent to defraud; and (4) the claims are barred by the economic loss rule. Sparta Mot. at 17-24.

1, Actionable Representations

Under any theory of deceit, a misrepresentation is actionable only if it is a representation of fact rather than opinion. Neu-Visions Sports, Inc. v. Soren/McAdam/Bartells, 86 Cal.App.4th 303, 308, 103 Cal.Rptr.2d 159 (2000); Cohen v. S &S Constr. Co., 151 Cal.App.3d 941, 946, 201 Cal.Rptr. 173 (1983); see also Smith v. Allstate Ins. Co., 160 F.Supp.2d 1150, 1154 (S.D. Cal. 2001) (“Representations of opinion are ordinarily not actionable for fraud because they contain judgments of quality, value, authenticity, or other matters of judgment.”). Consistent with this general rule, a fraudulent concealment claim requires that “the defendant must have concealed or suppressed a material fact.” Mktg. W., 6 Cal.App.4th at 612-13, 7 Cal.Rptr.2d 859. Likewise, a promissory fraud claim theorizes that the ostensible fact is the defendant’s intent, which she misrepresents to induce the plaintiffs reliance. Lazar, 12 Cal.4th at 638, 49 Cal.Rptr.2d 377, 909 P.2d 981 (“A promise to do something necessarily implies the intention to perform; hence, where a promise is made without such intention, there is an implied misrepresentation of fact that may be actionable fraud.”),

Here, in opposing Sparta’s motion, Copart does not discuss each alleged fraudulent act, but instead cites ten pages of documents and seventy proffered undisputed facts, almost all of which are disjointed excerpts from Sparta’s and the KPIT entities’ internal e-mails that do not on their face clarify Copart’s position. Opp’n to Sparta at 15-16 (citing CSUF 21-91). A district court is “not required to comb the record to find some reason to deny a motion for summary judgment.” Carmen v. S.F. Unified Sch. Dist., 237 F.3d 1026, 1029 (9th Cir. 2001) (internal quotations omitted); Greenwood v. F.A.A., 28 F.3d 971, 977 (9th Cir. 1994) (courts do not “manufacture” arguments for a litigant, and “[j]udges are not like pigs, hunting for truffles buried in briefs”) (citation omitted). Thus, the court focuses only on the six instances Copart addresses substantively in opposition:

(1) Sparta asserted in the Contract it had “ALL the information to identify 100% CAS functionality,” although internal drafts reflect that may not have been true;

(2) Sparta removed its assessments of risk and “scope creep” from a presentation delivered to Copart;

(3) During the Design Phase, Sparta reassured Copart it would ensure 100% Copart Auction System functionality, despite evidence that it intended to com-píete only that which was in the design documents;

(4) Sparta copied materials from AI-MOS into Sparta’s own AutoEdge system, but never told Copart;

(5) While negotiating the Contract Amendment, Sparta did not disclose a single AIMOS module was not functioning and might cause “severe” problems; and

(6) Sparta did not disclose ongoing failures regarding its project team.

Opp’n to Sparta at 15-16.

The court begins its analysis with negligent misrepresentation, which is “narrower than fraud” as to the misrepresentation element. Shamsian, 107 Cal.App.4th at 984, 132 Cal.Rptr.2d 635. Only two of the six representations Copart cites contain affirmative statements, as required for a negligent misrepresentation claim. Apollo Capital, 158 Cal.App.4th at 243, 70 Cal.Rptr.3d 199. In addition, one of those two statements, of Sparta’s intent to provide 100 percent Copart Auction System functionality in the future, cannot support a negligent misrepresentation claim because it is not an affirmative representation of a “past or existing material fact.” Id.; see also Moncada v. W. Coast Quartz Corp., 2 Cal.App.4th 153, 159, 2 Cal.Rptr.2d 861 (1991) (“The specific intent requirement for fraud [] precludes pleading a false promise claim as a negligent misrepresentation.” (citation omitted)). The court thus limits Copart’s negligent misrepresentation claim to the only affirmative representation Copart cites about a past or existing material fact: statement (1) containing Sparta’s assurance that it possessed all information necessary to provide 100 percent Copart Auction System functionality.

Copart’s fraudulent inducement claim requires a misrepresentation about a party’s intent to perform on a promise for this element. Lazar, 12 Cal.4th at 638, 49 Cal.Rptr.2d 377, 909 P.2d 981. Only one of the six statements qualifies: Sparta’s reassurances that it would ensure “100% CAS functionality.” Thus, the court limits Co-part’s fraudulent inducement claim to this statement, statement (3).

Finally, as to fraud, the broadest of Co-part’s three claims, each of the six statements is actionable. Statements (1) and (3) are actionable for the reasons explained above. The remaining four omissions are actionable if Sparta concealed or suppressed a material fact. Mktg. W., 6 Cal.App.4th at 612-13, 7 Cal.Rptr.2d 859. This determination depends on whether Sparta had a duty to disclose additional information, an intensely fact-specific inquiry for which a trier of fact is required. Id. at 614, 7 Cal.Rptr.2d 859. Thus, Copart may proceed on all six statements to support its general fraud claim.

In sum, the court limits Copart’s case as to first element of its fraud-related claims as follows: Copart may proceed only on statement (1) for its negligent misrepresentation claim, on statement (3) for its fraudulent inducement claim, and on all six statements for its fraud claim. Because each claim is supported by at least one actionable statement, summary judgment is not appropriate on this basis. The negligent misrepresentation claims fail though on the element of justifiable reliance discussed next.

2. Justifiable Reliance

Sparta next argues summary judgment is appropriate on Copart’s fraud-related claims because Copart could not justifiably rely on any of the six statements set out above, as its claims require. Sparta points out that Copart is a sophisticated business with experience with enterprise software implementations, it employed hundreds of Information Technology staff, including SAP specialists, and it developed its own legacy Copart Auction System that preceded the system it hired Sparta to replace. SSUF 2, 5, 73-74, 44, 75. Copart had counsel during its contract discussions and negotiations with Sparta. And Copart had' prior experience with problems when attempting to deploy the AIMOS project: months before hiring Sparta, Copart hired Accenture to design AIMÓS, but terminated the contract because of Accenture’s “inability to achieve the very purposé” of the project and alleged “misrepresentations.” SSUF 6, 8.

Nonetheless, because justifiable reliance is a context-specific and fact-intensive inquiry, a trier of fact should hear all but one of the six representations. Dias v. Nationwide Life Ins. Co., 700 F.Supp.2d 1204, 1218 (E.D. Cal. 2010) (“Justifiable reliance is normally a question of fact for a jury” except in “rare cases.”). The court will preclude a jury only from hearing statement (1), the Contract’s representation that Sparta had “all information and documents [Sparta] has deemed necessary for [Sparta] to determine the requirements to achieve the replacement of 100% of CAS Functionalities.” ISA § 9.4. Section 9.4, entitled “Diligence,” also recognizes “Copart has delivered or made available” the information necessary for Sparta to perform on its promise, and clarifies “[Sparta] .shall not be relieved of any of its. obligations under this Agreement.. .as a result of its failure to review the foregoing information. . .or its failure to request any information[.]” Id. This section, read in context, represents a past fact regarding Copart’s conduct, -not Sparta’s; it recognizes Co-part’s steps to provide Sparta with information, and precludes Sparta from using lack of information as an excuse later. Id, But it does not make any representation on which Copart could justifiably rely. The Contract expressly addresses what would happen if Sparta did not have the information it needed. Id. Taken together, no rear sonable juror could believe Copart justifiably relied on section 9.4’s first sentence. Thus, Copart may not rely on that sentence, statement (1), to- support any of its fraud-related claims.

Because Copart’s negligent misrepresentation claim' depends exclusively on statement (1), as discussed above, that claim ultimately fails as a matter of law based on the element of justifiable reliance. The court GRANTS summary judgment for Sparta on Copart’s negligent misrepresentation claim, while continuing to assess Copart’s remaining claims of fraud and fraudulent inducement.

3. Intent to Defraud

Copart’s two remaining fraud claims both require proof of intent to defraud. A plaintiff need only show the defendant intended to induce reliance. Lovejoy v. AT & T Carp., 92 Cal.App.4th 85, 93, 111 Cal.Rptr.2d 711 (2001). Intent is “always a question of fact” under California law. Walter E. Heller Western, Inc. v. Tecrim Corp., 196 Cal.App.3d 149, 160-61, 241 Cal.Rptr. 677 (1987); see also Diamond Woodworks, Inc. v. Argonaut Ins. Co., 109 Cal.App.4th 1020, 1046, 135 Cal.Rptr.2d 736 (2003) (“Fraudulent intent is an issue for the trier of fact to decide.”); Cal. Civ. Code § 1574 (“Actual fraud is always a question of fact.”). Thus, a fact finder must determine whether Sparta intended to defraud Copart when Sparta made the five remaining representations, statements (2) to (6). Summary judgment is not warranted on Copart’s two remaining claims.

4. Economic Loss Rule

Sparta next argues the economic loss rule bars Copart’s claims. The court’s prior order largely precludes this argument. See June 9, 2015 Order at 18-19. The court previously explained although “purely economic losses are not recoverable in tort,” id. (citing S.M. Wilson & Co. v. Smith Int’l, Inc., 587 F.2d 1363, 1376 (9th Cir. 1978)), the economic • loss rule does not apply “when a defendant breaches a legal duty independent of the contract,” id. (citing Robinson Helicopter Co. v. Dana Corp., 34 Cal.4th 979, 22 Cal.Rptr.3d 352, 102 P.3d 268 (2004)). In Robinson, for example, the California Supreme Court held the economic loss rule did not bar a helicopter manufacturer’s fraud and negligent misrepresentation claims against a parts supplier. Robinson, 34 Cal.4th at 991, 22 Cal.Rptr.3d 352, 102 P.3d 268. The state Court explained, but for the defendant’s misrepresentations, the plaintiff “would not have accepted delivery and used the nonconforming [parts]... nor would it have incurred the cost of investigating the cause of the faulty [parts].” Id. at 990-91, 22 Cal.Rptr.3d 352, 102 P.3d 268. “Accordingly, [defendant’s] tortious conduct was separate from the breach itself, which involved [defendant’s] provision of the nonconforming [parts].” Id.-, see also BNSF Ry. Co., 2011 WL 3328398, at *6 (E.D. Cal. Aug. 2, 2011) (California courts permit tort damages only in contract cases in which the tort liability is “either completely independent of the contract. . .or when the plaintiff was fraudulently induced to enter the contract”).

Here, Copart can base its fraudulent representation claim on statement (3), Sparta’s assurance of “100% CAS functionality.” Because Sparta made that representation during the project design phase, Copart could show it was fraudulently induced to accept the deliverables and to agree to hire Sparta to build AIMOS. Sparta made the representation prior to and separate from the parties’ agreement and it thus involves a “legal duty independent of the contract.” Robinson, 34 Cal.4th at 990, 22 Cal.Rptr.3d 352, 102 P.3d 268. The economic loss rule does not preclude Copart’s fraud-related claims.

5. Conclusion

In sum, the court limits Copart’s fraudulent inducement and fraud claims to reliance on specific statements as explained above, but DENIES Sparta’s motion for summary judgment on these two claims. The court GRANTS summary judgment on Copart’s negligent misrepresentation claim.

C. Copart’s Motion

Copart moves offensively for partial summary judgment on the misrepresentation element of its own fraud and fraudulent inducement claims, arguing Sparta concealed known project risks and did not disclose its theft of Copart’s intellectual property before the parties amended the Contract. Copart Mot. at 23. Copart contends either of Sparta’s omissions supports the misrepresentation element as a matter of law.

But Sparta successfully raises a genuine issue of disputed fact as to both omissions Copart asserts. First, Sparta cites evidence that it repeatedly revealed project risks to Copart, both within project management documents the parties shared and in their weekly and monthly meetings. See DSDF 3. Second, Sparta’s supposed nondisclosure of its theft relies on an assumed fact, that Sparta stole Copart’s intellectual property, which Copart has not established as a matter of law. See infra Part VIII. Thus, a reasonable juror could find for Sparta on this element. The court DENIES Copart’s request for summary judgment on this element of both claims.

D. Derivative Claims

Sparta also moves for summary judgment on Copart’s claims that derive from Copart’s fraud and breach of contract claims, namely unfair competition, unjust enrichment, breach of implied covenant of good faith and fair dealing as well as declaratory relief. Sparta Mot. at 26-28. Sparta argues, because the underlying claims fail the derivative claims must fail too. Id. As discussed above, except for its negligent misrepresentation claim, Co-part’s fraud and breach of contract claims all survive at this stage. Thus, the derivative claims also survive here. The court DENIES Sparta’s motion on these claims.

Having addressed Copart’s and Sparta’s competing motions on the contract-related and fraud-related claims, the court next turns to Copart’s claims against all three defendants.

VI. TRADE SECRETS

A.Factual Background

With its third amended complaint, Co-part added new claims and named the KPIT entities as defendants. The remaining claims derive from the following new allegations.

Copart alleges Sparta and the KPIT entities stole its proprietary software in late 2012 to enhance Sparta’s own “Au-toEdge” SAP product. TAC ¶94. Copart cites two October 2012 e-mail threads in which Sparta employee Shivraj Sinha instructed other Sparta and KPIT employees to copy material to the “AutoEdge system.” Id. ¶ 99(a)—(b); Opp’n to KPIT India at 11-13; Takenouchi Deck Exs. 34-36, ECF Nos. 198-34-36. Defendants respond, first, that they developed the software for another project, and it did not belong to Copart. KPIT India Mot. at 13; Kumar Deck ¶4, ECF No. 193. Second, even assuming Copart owned the material, defendants contend they copied it not to their AutoEdge product but to their Au-toEdge “sandbox,” a development environment they used to test code for their work on AIMOS for Copart. KPIT India Mot. at 14-16; Kumar Deck ¶ 14-15.

B. Trade Secrets Generally

Defendants contend Copart’s trade secrets claim fails as a matter of law because the cited information is not a trade secret, Copart does not own the information and Copart has not established any damages. KPIT India Mot. at 17-23.

To succeed on its trade secrets claim, Copart must satisfy the elements of California’s Uniform Trade Secrets Act (“the Uniform Act” or “CUTSA”). MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 611, 520 (9th Cir. 1993) (citing Cal. Civ. Code §§ 3426-3426.10). Copart must show: (1) it owned a trade secret, (2) defendants acquired, disclosed or used its trade secret through improper means, and (3) defendants’ actions damaged Copart. Sargent Fletcher, Inc. v. Able Corp., 110 Cal.App.4th 1658, 1665, 3 Cal.Rptr.3d 279 (2003).

C. Copart’s Trade Secrets

To prove a “trade secret,” Copart must show its cited information “(1) [d]e-rives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use, and (2) [i]s the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” Cal. Civ. Code § 3426.1(d). In other words, the information “is valuable because it is unknown to others.” DVD Copy Control Assn. v. Bunner, 116 Cal.App.4th 241, 251, 10 Cal.Rptr.3d 185 (2004). The economic advantage “need not be great, but must be more than trivial.” Yield Dynamics, Inc. v. TEA Sys. Corp., 154 Cal.App.4th 547, 564, 66 Cal.Rptr.3d 1 (2007) (internal quotations omitted) (quoting Restatement (Third) of Unfair Competition § 39 (1995)).

Copart defines its alleged trade secret as “a compilation of source code, SAP objects, and other materials that were included in the ‘class ZCLJMAGING’ that Sparta created as part of its deliverables for Copart. This ‘class’ includes a combina-, tion of eustom and standard SAP source code, and data tables that replicated the imaging functionality in Copart’s CAS system.” Opp’n to KPIT India at 17-18. For simplicity, the court refers to Copart’s alleged trade secret as “the SAP Code.” Defendants argue Copart has not established a genuine dispute sufficient to survive summary judgment on the claim that the SAP Code is a trade secret. KPIT India Mot. at 17-19.

Defendants rely on Michael Shamos’s expert report to argue the SAP Code is “generally 'known to the public” and does not “derive[] independent economic value.” Id.) see also Sham'os Dec!., ECF No. 188; Shamos Deck Ex. A (Shamos Report), EOF No. 189. Defendants are correct that Shamos’s report undermines Co-part’s claim that the SAP Code is a trade secret. Shamos analyzes the SAP Code using two methods: first, Shamos evaluates how it functions, Shamos Report ¶¶ 22-92; second, he examines how it is made, id. ¶¶ 95-137. The first method suggests the SAP Code performs much like an array of publicly available sources and preexisting patents. Id. ¶¶ 22-92. The second method shows how, according to Shamos, the underlying cod