Summary
In Anaheim Arena Management, LLC v. Wergechik (Dec. 1, 2017, G053865) [nonpub. opn.], we affirmed the order in part to strike from the cross-complaint allegations Wergechik was liable to AAM on any theory because she disclosed confidential information to her attorney.
Summary of this case from Wergechik v. Anaheim Arena Mgmt.Opinion
G053865
12-01-2017
ANAHEIM ARENA MANAGEMENT, LLC, Cross-complainant and Appellant, v. ANGELA WERGECHIK, Cross-defendant and Respondent.
Sheppard, Mullin, Richter & Hampton, Jason A. Weiss and Ruben D. Escalante for Cross-complainant and Appellant. Workplace Justice Advocates, Tamara S. Freeze and Robert A. Odell for Cross-defendant and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2015-00786670) OPINION Appeal from an order of the Superior Court of Orange County, Geoffrey T. Glass, Judge. Affirmed in part and reversed in part. Sheppard, Mullin, Richter & Hampton, Jason A. Weiss and Ruben D. Escalante for Cross-complainant and Appellant. Workplace Justice Advocates, Tamara S. Freeze and Robert A. Odell for Cross-defendant and Respondent.
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INTRODUCTION
In this wrongful employment termination lawsuit, Anaheim Arena Management (AAM) filed a cross-complaint against its former employee, Angela Wergechik. The cross-complaint contained several claims based on allegations Wergechik wrongfully gained unauthorized access to AAM's confidential information during her employment, disclosed AAM's confidential information to a third party, and failed to timely return company property following the termination of her employment. Wergechik filed a special motion to strike the cross-complaint under California's anti-SLAPP statute, Code of Civil Procedure section 425.16, on the ground that certain alleged conduct underlying AAM's cross-complaint—her disclosure of confidential information to her attorney to evaluate the merits of her wrongful termination lawsuit—constituted protected activity. (All further statutory references are to the Code of Civil Procedure unless otherwise specified.) The trial court granted the anti-SLAPP motion as to the entire cross-complaint.
"SLAPP is an acronym for 'strategic lawsuit against public participation.'" (Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 732, fn. 1.) We refer to AAM's special motion to strike as the anti-SLAPP motion.
We affirm in part and reverse in part. Wergechik carried her burden of showing that the cross-complaint, and each of the claims contained within it, was based in part on her disclosure of AAM's confidential information to her attorney and that such conduct, pursuant to Fox Searchlight, Pictures, Inc. v. Paladino (2001) 89 Cal.App.4th 294, constitutes protected activity under section 425.16, subdivision (e). AAM failed to produce any admissible evidence that established a probability of prevailing on any of its claims to the extent they were based on that conduct. Therefore, the anti-SLAPP motion was properly granted to the extent it struck allegations of Wergechik's protected activity (disclosing confidential information to her attorney) from the cross-complaint as a basis of liability and we affirm the order granting the anti-SLAPP motion, in part, on that limited basis. (See Baral v. Schnitt (2016) 1 Cal.5th 376, 393 (Baral) ["the Legislature's choice of the term 'motion to strike' reflects the understanding that an anti-SLAPP motion, like a conventional motion to strike, may be used to attack parts of a count as pleaded"].)
Each of AAM's claims in the cross-complaint, however, was also based on allegations of unprotected activity, namely that Wergechik wrongfully gained unauthorized access to AAM's confidential information during her employment and also failed to return the company's property following the termination of her employment. AAM's claims based on allegations of such unprotected conduct survive the anti-SLAPP motion. We therefore reverse the order granting the anti-SLAPP motion as to the claims in the cross-complaint based on allegations of unprotected activity. (See Baral, supra, 1 Cal.5th at p. 382 [rejecting appellate court holdings that an anti-SLAPP motion "lies only to strike an entire count as pleaded in the complaint" because such a rule "leads to anomalous results when the count is supported by allegations of unprotected activity as well as protected activity"].)
BACKGROUND
I.
THE FIRST AMENDED COMPLAINT
In May 2011, Wergechik filed her first amended complaint against AAM and the Anaheim Ducks Hockey Club, LLC, containing claims for disability discrimination in violation of Government Code section 12940, subdivision (a); failure to accommodate a disability in violation of Government Code section 12940, subdivision (m); failure to engage in the interactive process in violation of Government Code section 12940, subdivision (n); sex discrimination in violation of Government Code sections 12940, subdivision (a) and 12926, subdivision (r); retaliation for exercising rights under the Fair Employment and Housing Act in violation of Government Code section 12940, subdivision (h); failure to prevent discrimination and/or retaliation in violation of Government Code section 12940, subdivision (k); failure to furnish a copy of personnel records in violation of Labor Code section 1198.5; retaliation for exercising rights under the California Family Rights Act in violation of Government Code section 12945.2, subdivision (l); wrongful termination in violation of public policy; and violation of Business and Professions Code section 17200 et seq.
II.
THE CROSS-COMPLAINT
AAM filed a cross-complaint against Wergechik containing claims for breach of contract, breach of the duty of loyalty, breach of fiduciary duty, breach of the implied covenant of good faith and fair dealing, violation of the California Comprehensive Computer Data Access and Fraud Act in violation of Penal Code section 502, declaratory relief, conversion, and unfair competition. The cross-complaint contained a general allegations section, which was incorporated by reference into each of the alleged causes of action, and which we summarize as follows.
AAM, the manager and operator of the Honda Center, employed Wergechik from December 2003 until September 30, 2015. Wergechik was AAM's vice president of finance from May 2006 until the termination of her employment. The cross-complaint alleged that "[d]uring her employment with AAM, Wergechik executed multiple agreements requiring her to refrain from, among other things, copying, duplicating, misappropriating, or otherwise disclosing confidential and proprietary information contained in AAM's software, computer files, or other AAM property. Wergechik's express agreement to honor these covenants, both during and after her employment with AAM, was critical to AAM, as Wergechik's position as the Vice President of Finance of AAM (the most senior employee in Finance) afforded her significant access to AAM['s] . . . confidential and propriety information. Wergechik's covenants and obligations to AAM regarding her use of the Company's information and property survive the end of her employment."
The cross-complaint also alleges: "In contravention of her covenants and promises to AAM, Wergechik used her position to access, without authorization, confidential and proprietary information not for the benefit of AAM, but for her own unlawful and improper purposes. In light of recent events, including Wergechik's dissemination of misappropriated documents and information, it is evident that Wergechik's misconduct is ongoing, and will continue unabated unless AAM seeks to enforce its rights through legal channels." For example, Wergechik "obtained access, through fraudulent and deceptive means, to confidential and personal compensation for a number of her peers and/or superiors, without authorization and without any legitimate purpose." She maintained copies of that information and transmitted confidential information to her personal e-mail without a legitimate work purpose. Wergechik later transmitted AAM's confidential and propriety documents, including "a detailed financial statement, to a friend, without any legitimate business purpose."
Wergechik was laid off, effective September 30, 2015. AAM asked Wergechik to return all company property entrusted to her, including an iPhone, an iPad, and a laptop. Wergechik did not return the iPad until November 9, 2015.
Wergechik contends her employment ended in January 2015. AAM contends her employment ended in September 2015. The issues raised in this appeal do not turn on which month in 2015 Wergechik's employment with AAM terminated.
III.
WERGECHIK FILES THE ANTI-SLAPP MOTION TO THE CROSS-COMPLAINT WHICH THE
TRIAL COURT GRANTS; AAM APPEALS.
Wergechik filed an anti-SLAPP motion to the cross-complaint, arguing statements she made in depositions, her retention of AAM's confidential information, and the disclosure of such documents to her attorney constituted protected activity within the meaning of section 425.16. In support of her anti-SLAPP motion, Wergechik submitted her own declaration stating: "Because I was fired without any warning in January 2015, I was still in possession of some of my company documents, as well as company devices, such as iPad, iPhone and laptop. During the course of the employment litigation, I provided such documents and devices to my attorney, Tamara Freeze." She further stated in her declaration: "I did so because I reasonably believed such documents were necessary to my attorney's preparation and prosecution of my wrongful termination case. After I was fired in January 2015, AAM did not demand immediate production of the documents from me. At no time did I refuse to return such documents or devices back to AAM." Wergechik's attorney, Tamara S. Freeze, also filed a declaration in support of the anti-SLAPP motion, stating in part: "I have a reasonable belief that all documents provided to me by Ms. Wergechik were necessary to prepare for the wrongful termination lawsuit. At no time did I refuse to return such documents or devices."
AAM filed an opposition to the motion. In support of the opposition, AAM's attorney Jason A. Weiss filed a declaration to which he attached several documents. Without leave of the trial court, Wergechik filed additional declarations in support of her reply brief and AAM filed a supplemental brief accompanied by a second declaration from Weiss.
At the anti-SLAPP motion hearing, the trial court stated it would not accept Wergechik's new evidence contained in declarations filed in support of her reply brief and would not consider AAM's supplemental brief or Weiss's declaration filed in support of that supplemental brief. The trial court granted the anti-SLAPP motion, stating in its minute order: "The Court, having taken the above-entitled matter under submission on 7/11/16 and having fully considered the arguments of all parties, both written and oral, as well as the evidence presented, now rules as follows: [¶] The court disregards new evidence presented in the reply by Wergechik and the 'supplemental' opposition by AAM submitted on the day of the hearing. [¶] The court grants the SLAPP motion. The court finds that the cross-complaint arises from Wergechik's assertion of claims against AAM in this lawsuit. Further, the court finds that AAM has not shown a likelihood of prevailing by admissible evidence." The trial court did not expressly rule on the evidentiary objections each party had filed in relation to the motion.
Wergechik's attorney Tamara Freeze filed a declaration in support of the anti-SLAPP motion to which AAM filed written objections. AAM's attorney Jason Weiss filed a declaration in opposition to the motion to which Wergechik filed written objections. The trial court did not rule on any of these objections and neither party requested a ruling on any of the objections at the hearing on the anti-SLAPP motion, or after the minute order granting the anti-SLAPP motion was filed and served. Existing law provides that, in the anti-SLAPP context, evidentiary objections are waived if no ruling is obtained at the hearing on an anti-SLAPP motion. (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 291, fn. 17; U.S. Western Falun Dafa Assn. v. Chinese Chamber of Commerce (2008) 163 Cal.App.4th 590, 603, fn. 5.)
AAM appealed.
DISCUSSION
I.
SECTION 425.16 AND THE APPLICABLE STANDARD OF REVIEW.
Section 425.16 provides for a special motion to strike "[a] cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue." (§ 425.16, subd. (b)(1).) "Section 425.16, subdivision (b)(1) requires the court to engage in a two-step process. First, the court decides whether the defendant has made a threshold showing that the challenged cause of action is one arising from protected activity. The moving defendant's burden is to demonstrate that the act or acts of which the plaintiff complains were taken 'in furtherance of the [defendant]'s right of petition or free speech under the United States or California Constitution in connection with a public issue,' as defined in the statute. [Citation.] If the court finds such a showing has been made, it then determines whether the plaintiff has demonstrated a probability of prevailing on the claim. Under section 425.16, subdivision (b)(2), the trial court in making these determinations considers 'the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.'" (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) "'The defendant has the burden on the first issue, the threshold issue; the plaintiff has the burden on the second issue.'" (Kajima Engineering & Construction, Inc. v. City of Los Angeles (2002) 95 Cal.App.4th 921, 928.) To establish a probability of prevailing on a claim, "'the plaintiff "must demonstrate that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited."'" (Navellier v. Sletten (2002) 29 Cal.4th 82, 88-89.)
We independently review the trial court's order denying the anti-SLAPP motion de novo. (Flatley v. Mauro (2006) 39 Cal.4th 299, 325-326.) "'We consider "the pleadings, and supporting and opposing affidavits . . . upon which the liability or defense is based." [Citation.] However, we neither "weigh credibility [nor] compare the weight of the evidence. Rather, [we] accept as true the evidence favorable to the plaintiff [citation] and evaluate the defendant's evidence only to determine if it has defeated that submitted by the plaintiff as a matter of law."'" (Id. at p. 326.) The anti-SLAPP statute is to be broadly construed. (§ 425.16, subd. (a).)
II.
WERGECHIK MET HER BURDEN OF DEMONSTRATING THAT AAM'S CLAIMS ARE BASED
IN PART ON PROTECTED ACTIVITY UNDER SECTION 425.16, SUBDIVISION (e)(1).
Wergechik's anti-SLAPP motion challenged the entire cross-complaint, and all causes of action contained within it, which were based on allegations that Wergechik (1) wrongfully gained unauthorized access to AAM's confidential information; (2) disclosed AAM's confidential information to a third party; and (3) failed to timely return company property (an iPad) following the termination of her employment. In support of the anti-SLAPP motion, Wergechik cited Fox Searchlight Pictures, Inc. v. Paladino, supra, 89 Cal.App.4th at pages 304-305, in which the appellate court held that a company's lawsuit against a former employee for disclosing confidential and privileged information to the attorneys handling her wrongful termination case was subject to a special motion to strike under section 425.16. (See also Greka Integrated, Inc. v. Lowrey (2005) 133 Cal.App.4th 1572, 1580 ["The declarations supporting and opposing the motion to strike demonstrate that Lowrey disclosed information about Greka to his counsel, to authorities and in deposition and trial testimony in response to subpoenas. These are all protected activities"].) We agree that to the extent AAM's cross-complaint is based on Wergechik's act of disclosing confidential information she obtained through her employment at AAM to her attorney, it is based on protected activity within the meaning of section 425.16. Neither Fox Searchlight, nor any other legal authority cited by Wergechik, supports a finding that her alleged conduct of wrongfully gaining unauthorized access to AAM's confidential information and of failing to timely return AAM's property to it constitutes protected activity as well.
In the respondent's brief on appeal, Wergechik argues the cross-complaint reveals AAM learned the extent of Wergechik's wrongful unauthorized access of confidential information and retention of that information through discovery in Wergechik's wrongful employment termination lawsuit against AAM. Therefore, she contends, AAM's cross-complaint must be construed as arising out of Wergechik's participation in the litigation process, and thus is protected activity under section 425.16. The California Supreme Court in Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1060 recently clarified that "a claim may be struck only if the speech or petitioning activity itself is the wrong complained of, and not just evidence of liability or a step leading to some different act for which liability is asserted."
Here, none of the claims contained in the cross-complaint is based on Wergechik's decision to sue AAM or her participation in discovery itself. The cross-complaint is based on allegations of wrongful conduct independent of the litigation process, although evidence related to such allegations has been obtained through discovery. Therefore, although Wergechik carried her burden of showing her conduct of disclosing confidential information to her attorney constituted protected activity within the meaning of section 425.16, she failed to carry the same burden with regard to her alleged conduct of wrongfully gaining unauthorized access to AAM's confidential information and failing to timely return AAM's property.
We are then left with so-called "mixed" causes of action in the cross-complaint—each one based on allegations of both protected and unprotected activity. In Baral, supra, 1 Cal.5th at page 381, the California Supreme Court addressed the question presented here: "How does the special motion to strike operate against a so-called 'mixed cause of action' that combines allegations of activity protected by the statute with allegations of unprotected activity?" In that case, the Supreme Court expressly rejected the argument that an anti-SLAPP motion lies only to strike an entire count as pleaded in the complaint, noting such a rule "leads to anomalous results when the count is supported by allegations of unprotected activity as well as protected activity." (Id. at p. 382.)
At the time of the July 2016 hearing on the anti-SLAPP motion, the trial court did not have the benefit of the Supreme Court's decisions in Baral, supra, 1 Cal.4th 376, which was issued in August 2016, and Park v. Board of Trustees of California State University, supra, 2 Cal.5th 1057, which was issued in May 2017.
Instead, the Supreme Court stated: "Viewing the term in its statutory context, we conclude that the Legislature used 'cause of action' in a particular way in section 425.16(b)(1), targeting only claims that are based on the conduct protected by the statute. Section 425.16 is not concerned with how a complaint is framed, or how the primary right theory might define a cause of action. While an anti-SLAPP motion may challenge any claim for relief founded on allegations of protected activity, it does not reach claims based on unprotected activity." (Baral, supra, 1 Cal.5th at p. 382.) The Supreme Court further stated, "the Legislature's choice of the term 'motion to strike' reflects the understanding that an anti-SLAPP motion, like a conventional motion to strike, may be used to attack parts of a count as pleaded." (Id. at p. 393.) "Restricting anti-SLAPP motions to indivisible 'causes of action' as determined by primary right theory would be inconsistent with the Legislature's use of the term 'special motion to strike.' (§ 425.16(b)(1).) As noted, the conventional motion to strike, which long preceded the anti-SLAPP statute, is well understood as a way to challenge particular allegations." (Id. at p. 394.)
The Supreme Court concluded: "For the benefit of litigants and courts involved in this sometimes difficult area of pretrial procedure, we provide a brief summary of the showings and findings required by section 425.16(b). At the first step, the moving defendant bears the burden of identifying all allegations of protected activity, and the claims for relief supported by them. When relief is sought based on allegations of both protected and unprotected activity, the unprotected activity is disregarded at this stage. If the court determines that relief is sought based on allegations arising from activity protected by the statute, the second step is reached. There, the burden shifts to the plaintiff to demonstrate that each challenged claim based on protected activity is legally sufficient and factually substantiated. The court, without resolving evidentiary conflicts, must determine whether the plaintiff's showing, if accepted by the trier of fact, would be sufficient to sustain a favorable judgment. If not, the claim is stricken. Allegations of protected activity supporting the stricken claim are eliminated from the complaint, unless they also support a distinct claim on which the plaintiff has shown a probability of prevailing." (Baral, supra, 1 Cal.5th at p. 396.)
Following Baral, supra, 1 Cal.5th 376, we disregard the allegations of activity that Wergechik has failed to show constitutes protected activity under section 425.16, namely, that she wrongfully gained unauthorized access to AAM's confidential information and failed to timely return its property. AAM's claims, to the extent they are based on those allegations, therefore survive the anti-SLAPP motion. The order granting the anti-SLAPP motion is reversed as to those allegations.
As to the allegations underlying the claims of the cross-complaint that Wergechik showed are based on protected activity (Wergechik's disclosure of confidential information to her attorney), the burden shifted to AAM to demonstrate "that each challenged claim based on protected activity is legally sufficient and factually substantiated." (Baral, supra, 1 Cal.5th at p. 396.)
III.
AAM FAILED TO CARRY ITS BURDEN OF SHOWING A PROBABILITY OF PREVAILING ON
ITS CLAIMS TO THE EXTENT THEY ARE BASED ON WERGECHIK'S DISCLOSURE OF
CONFIDENTIAL INFORMATION TO HER ATTORNEY.
As discussed ante, once Wergechik met her burden of demonstrating that some of the conduct underlying AAM's claims in the cross-complaint constituted protected activity under section 425.16, subdivision (e), the burden shifted to AAM to demonstrate that the cross-complaint is "'"both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited."'" (Navellier v. Sletten, supra, 29 Cal.4th at pp. 88-89.) "The plaintiff cannot rely on the allegations of the complaint alone, but must present admissible evidence." (Nagel v. Twin Laboratories, Inc. (2003) 109 Cal.App.4th 39, 45.)
The only evidence offered in support of the opposition to the anti-SLAPP motion was Weiss's declaration filed concurrently with the opposition itself. In that declaration, Weiss described events that occurred during and after Wergechik's employment with AAM, including communications Wergechik had with various coworkers and supervisors. Weiss neither established personal knowledge of the facts set out in his declaration, nor authenticated the documents attached to it. At the hearing on the anti-SLAPP motion, the trial court found Weiss's declaration to constitute inadmissible evidence. The court stated: "The only evidence I have in opposition to this motion that I'm prepared to look at in opposition is your declaration, which is your testimony that you could testify that these emails are from a particular source or that these are the documents that she took or that these are the purposes for the documents. You're a lawyer. You don't work there. I don't know how you can say that you have personal knowledge of the facts that are discussed in your declaration. [¶] That's my biggest problem with the opposition, with the second prong, anyway, to show a probability of prevailing, in that you give me a lot of information with no support at all as to why it would be admissible, except for the fact that you're saying that's what the documents showed, and that's not good enough. If that were the case, you could testify at trial, and you wouldn't even have to bring your client in." The court also pointed out "you're seeking damages, but you really don't tell me anywhere in this motion what those damages are, how you were, in fact, damaged." The trial court's minute order stated that AAM failed to carry its burden of demonstrating a probability of prevailing on its claims through admissible evidence.
In its appellate briefing, AAM suggests the trial court only excluded evidence Wergechik submitted in support of her reply brief and AAM's supplemental brief, but not Weiss's second declaration which was filed in support of AAM's supplemental brief. The reporter's transcript in this case shows the trial court also refused to consider Weiss's declaration filed in support of the supplemental brief.
A trial court's evidentiary rulings made in connection with a ruling on an anti-SLAPP motion are reviewed for abuse of discretion. (Morrow v. Los Angeles Unified School Dist. (2007) 149 Cal.App.4th 1424, 1444.) Here, the trial court did not abuse its discretion by finding Weiss's declaration inadmissible and thus insufficient to show AAM's probability of prevailing on the merits of its claims. Our review of Weiss's declaration confirms it states "facts" without a showing that he had personal knowledge of such facts and attaches exhibits that he did not properly authenticate.
Furthermore, AAM's opposition brief in the trial court failed to sufficiently analyze the probability of prevailing on the merits prong with regard to each of its claims. The sum total of AAM's discussion in its opposition regarding the probability of prevailing on the merits prong with regard to all eight of its claims against Wergechik stated: "Here, AAM has established that its claims against Wergechik have the requisite '"minimal merit" to avoid being stricken as a SLAPP.' [Citation.] AAM only needs to show a probability of prevailing on a part of its claim to establish that its cause of action has some merit and so the entire cause of action should stand. [Citation.] Here, the evidence is not in dispute: Wergechik took AAM's data and documents, without permission, including through copying them onto her personal devices and transmitting them to her personal email account, and she gave a confidential financial report to Mr. Vogelgesang, which he used in a separate action. These actions violate Wergechik's covenants to AAM, including those contained in the Employee Handbook and the Information Security Policy. [Citation.] They also constitute conversion. [Citation.] While AAM's damages are ongoing and the total amount is not immediately ascertainable, AAM has incurred substantial attorney's fees and costs, including those relating to forensic analysis, due to Wergechik's misconduct. [Citation.] AAM has established that its claims have at least 'minimal merit' sufficient to defeat Wergechik's motion." The opposition failed to identify much less analyze the elements requisite to a prima facie showing for each claim asserted in the opposition.
In Weiss's declaration, he stated that "AAM discovered . . . Wergechik transmitted AAM's confidential and proprietary documents, including a detailed financial statement to Paul Vogelgesang, without authorization." The declaration does not establish Weiss's personal knowledge of these facts. In any event, the court deemed Weiss's declaration to contain inadmissible evidence. As Wergechik did not produce evidence in support of her motion regarding the transmission of confidential information to Vogelgesang, we do not consider such alleged conduct in our appellate review. --------
Consequently, the anti-SLAPP motion was properly granted with regard to the allegations that Wergechik disclosed confidential information to her attorney; such allegations should be struck from the cross-complaint.
DISPOSITION
The order is affirmed in part to strike from the cross-complaint allegations Wergechik was liable to AAM on any theory because she disclosed confidential information to her attorney. The order is otherwise reversed. In the interests of justice, because both parties prevailed in part, neither party shall recover costs on appeal.
FYBEL, J. WE CONCUR: O'LEARY, P. J. IKOLA, J.