Opinion
G054463
08-20-2018
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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. Reversed. 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
Anaheim Arena Management (AAM) filed a cross-complaint against its former employee, Angela Wergechik, in her wrongful employment termination action against AAM. The cross-complaint contained claims 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. She argued 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 and AAM appealed.
"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 Wergechik's special motion to strike as the anti-SLAPP motion.
While AAM's first appeal was pending, Wergechik filed a motion seeking prevailing party attorney fees under section 425.16, subdivision (c)(1). The trial court granted the motion and awarded Wergechik $32,720 in attorney fees and costs. AAM appealed from the attorney fees order.
In our prior opinion, Anaheim Arena Management, LLC v. Wergechik (Dec. 1, 2017, G053865) (nonpub. opn.) (Anaheim Arena Management I), we affirmed the portion of the order granting the anti-SLAPP motion that struck allegations of Wergechik's protected activity (disclosing confidential information to her attorney) from the cross-complaint as a basis of liability. We otherwise reversed the order granting the anti-SLAPP motion, explaining: "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."
Because we reversed the order granting the anti-SLAPP motion with regard to allegations of Wergechik's unprotected activity in Anaheim Arena Management I—allegations that serve as a basis for liability for each of the claims asserted against Wergechik in the cross-complaint—we must reverse the attorney fees and costs award.
BACKGROUND
I.
The First Amended Complaint and the Cross-complaint.
Wergechik filed the first amended complaint against AAM and the Anaheim Ducks Hockey Club, LLC, which contained a claim for wrongful termination in violation of public policy, and claims based on alleged violations of the Fair Employment and Housing Act (Gov. Code, § 12940 et seq.), Labor Code section 1198.5, the California Family Rights Act (Gov. Code, § 12945.2, subd. (l)), and the unfair competition law (Bus. & Prof. Code, § 17200 et seq.).
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 summarized in Anaheim Arena Management I, supra, G053865 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." (Fn. omitted.)
II.
The Trial Court Grants Wergechik's Anti-SLAPP Motion and AAM
Appeals; the Trial Court Grants Wergechik's Motion for Attorney Fees and
Costs and AAM Appeals.
Wergechik filed an anti-SLAPP motion challenging the cross-complaint. She argued her deposition testimony, retention of AAM's confidential information, and disclosure of such documents to her attorney constituted protected activity within the meaning of section 425.16. The trial court granted the anti-SLAPP motion, stating in its minute order: "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." AAM appealed.
While AAM's appeal was pending, Wergechik filed a motion for an award of prevailing party attorney fees in the amount of $38,137.50 plus $120 in costs under section 425.16, subdivision (c)(1), noting that she had "succeeded in striking AAM's entire cross-complaint" and thus was "unmistakably the prevailing party to the anti-SLAPP motion." The memorandum of points and authorities explained that a multiplier of 1.5 was appropriate to apply to the attorney fees lodestar amount of $25,485.
The trial court granted Wergechik's motion for an award of attorney fees and awarded her $32,720 in attorney fees and costs. The trial court did not explain how it calculated the amount of the attorney fees award. AAM appealed.
III.
The Order Granting the Anti-SLAPP Motion Was Reversed in Part and
Affirmed in Part.
In Anaheim Arena Management I, following the Supreme Court's opinion in Baral v. Schnitt (2016) 1 Cal.5th 376, 393, we reversed the portion of the order granting the anti-SLAPP motion: "[W]e 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 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." (Anaheim Arena Management I, supra, G053865.)
As to allegations of protected activity, we further held that AAM failed to show a probability of prevailing on its claims to the extent they were based on Wergechik's protected activity of disclosing confidential information to her attorney. We therefore affirmed the portion of the order granting the anti-SLAPP motion to the extent it struck such allegations from the cross-complaint. (Anaheim Arena Management I, supra, G053865.)
DISCUSSION
Section 425.16, subdivision (c)(1) provides that "a prevailing defendant on a special motion to strike shall be entitled to recover his or her attorney's fees and costs." "[A]ny SLAPP defendant who brings a successful motion to strike is entitled to mandatory attorney fees." (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1131.) Under the foregoing legal authorities, a defendant who prevails on such a motion in its entirety is entitled to an award of attorney fees. In the instant case, Wergechik has only prevailed in part on the anti-SLAPP motion.
The appellate court in ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1016-1020 (ComputerXpress) considered whether a defendant who partially prevails on an anti-SLAPP motion is a "prevailing" defendant within the meaning of section 425.16, subdivision (c). The appellate court held the defendants were prevailing parties because they were successful in having five of the nine challenged causes of action struck from the complaint as a result of the motion. (ComputerXpress, supra, at p. 1020.) The court held: "Defendants consequently are entitled to recover attorney fees and costs incurred in moving to strike the claims on which they prevailed, but not fees and costs incurred in moving to strike the remaining claims. The trial court may determine the appropriate amount of fees and costs, upon a proper application by defendants." (Ibid.)
The court noted that challenges that arise when successful and unsuccessful claims are legally or factually related were not present because the stricken causes of action were based on different conduct than those claims that survived the anti-SLAPP motion in that case. (ComputerXpress, supra, 93 Cal.App.4th at p. 1020.)
In Moran v. Endres (2006) 135 Cal.App.4th 952, 953, the plaintiffs alleged the defendants "had committed various torts as part of a wrongful attempt to control a church." The defendants filed an anti-SLAPP motion against the entire complaint, but were successful only as to the conspiracy cause of action. (Id. at p. 954.) The trial court denied the defendants' request for prevailing party attorney fees because the defendants had been "'correct as to only one of eleven causes of action,'" and "'the relief which the moving parties received is minimal with the goals of their motions such that they cannot be found to have truly "prevailed."'" (Ibid.) The appellate court affirmed the denial of the request for attorney fees, noting that the defendants "accomplished nothing, except that plaintiffs were put to the cost of defending the motion." (Id. at p. 955.) The court stated: "The possible recovery against defendants did not change. The factual allegations which defendants had to defend did not change. The work involved in trying the case did not change. Defendants' burden concerning their jurisdictional defense did not change. The case was essentially the same after the ruling on the special motion to strike as it was before. The results of the motion were minimal and insignificant, fully justifying the court's finding that defendants should not recover fees." (Ibid.)
In Mann v. Quality Old Time Service, Inc. (2006) 139 Cal.App.4th 328, 339-341, the appellate court held: "We agree with the legal analysis and results reached by both the ComputerXpress and Endres courts. Given the express legislative preference for awarding fees to successful anti-SLAPP defendants, a party need not succeed in striking every challenged claim to be considered a prevailing party within the meaning of section 425.16. A contrary conclusion would require a partially prevailing defendant to bear the entire cost of the anti-SLAPP litigation at the outset of the case. This would create a strong disincentive for a defendant to bring the motion, undermining the legislative intent to encourage defendants to utilize the anti-SLAPP procedure to eliminate SLAPP claims and to discourage plaintiffs from bringing meritless SLAPP claims. [Citation.] On the other hand, there is no reason to encourage a defendant to bring an anti-SLAPP motion where the factual and legal grounds for the claims against the defendant remain the same after the resolution of the anti-SLAPP motion. [Citation.] Where the results of the motion are '"minimal"' or 'insignificant' a court does not abuse its discretion in finding the defendant was not a prevailing party. [Citations.]
"We thus hold that a party who partially prevails on an anti-SLAPP motion must generally be considered a prevailing party unless the results of the motion were so insignificant that the party did not achieve any practical benefit from bringing the motion. The determination whether a party prevailed on an anti-SLAPP motion lies within the broad discretion of a trial court. [Citation.] We review this determination on an abuse of discretion standard.
"Applying these principles, we conclude the trial court did not abuse its discretion in determining defendants were prevailing parties in the underlying litigation. Defendants successfully eliminated the trade libel cause of action. Although trade libel bears similarity to the defamation claim that remained in the litigation, the two causes of action are not identical. Whereas defamation concerns injury to the reputation of a person or business, trade libel involves false disparagement of the quality of goods or services. [Citations.] The elimination of the trade libel cause of action thus had the potential to narrow the litigation with respect to the damage issues and the focus of the claimed false statements. Additionally, the . . . court's acknowledgment that an absolute privilege applies to defendants' reports . . . to government entities precluded [the plaintiff] from thereafter pursuing any recovery based on defendants' communications with government agencies. [Citation.] By bringing the anti-SLAPP motion, defendants thus successfully narrowed the scope of the lawsuit, limiting discovery, reducing potential recoverable damages, and altering the settlement posture of the case." (Id. at pp. 340-341.)
Wergechik's motion for attorney fees was filed before our opinion in Anaheim Arena Management I reversed in part the order granting the anti-SLAPP motion. Understandably, Wergechik's attorney fees motion was based on the mandatory provision of section 425.16, subdivision (c)(1) because at that time, the anti-SLAPP motion was granted in its entirety and had resulted in the dismissal of the cross-complaint; the motion therefore did not address whether Wergechik should be considered the prevailing party if the anti-SLAPP motion had only been partially successful.
After Anaheim Arena Management I, and our partial reversal of the order granting the anti-SLAPP motion, the premise underlying Wergechik's attorney fees motion—that she was the prevailing party automatically entitled her to reasonable attorney fees incurred in bringing the motion because the cross-complaint was dismissed—is no longer valid. Therefore, the order awarding her attorney fees based on that motion must be reversed but without prejudice to the trial court considering a new motion seeking prevailing party attorney fees that addresses the present circumstances of this case. Those circumstances include the fact that although the anti-SLAPP motion was successful in striking a factual basis of liability, it did not result in the elimination of any cause of action from the cross-complaint.
Although briefing in this appeal was complete before Anaheim Arena Management I issued, the parties addressed how the instant appeal should be resolved if this court partially reversed the order granting the anti-SLAPP motion. In its opening brief, AAM argued "[a] partial reversal of the principal appeal warrants either a reversal or reduction of the attorneys' fees award or remand to the trial court." Wergechik argued in her respondent's brief: "[T]rial courts may award full attorney's fees notwithstanding partial success on claims, and apportionment is not compulsory 'when the issues in the fee and nonfee claims are so inextricably intertwined that it would be impractical or impossible to separate the attorney's time into compensable and noncompensable units." (But see Mann v. Quality Old Time Service, Inc., supra, 139 Cal.App.4th at p. 347 ["In our view, allowing partially successful defendants to recover virtually all of their fees because the facts and legal theories are so intertwined that they cannot be segregated underestimates the ability of attorneys and experienced trial judges to evaluate the value of legal services associates with limited success. By contrast, an approach that concentrates on the practical impact of a partially successful motion on the overall litigation advances the objectives of the anti-SLAPP statute and minimizes abuses"].) --------
Because we reverse the attorney fees order, we do not need to address AAM's arguments that the trial court further erred by failing to provide the basis for its ultimate calculation of attorney fees, which included a lodestar multiplier, and abused its discretion by applying such a multiplier in calculating attorney fees.
DISPOSITION
The order awarding Wergechik attorney fees is reversed. Our disposition is without prejudice to the trial court considering any new motion seeking prevailing party attorney fees under section 425.16, subdivision (c)(1). In the interests of justice, neither party shall recover costs on appeal.
FYBEL, J. WE CONCUR: O'LEARY, P. J. IKOLA, J.