Memorandum Points and Authorities

Cal. Super. - 6th Dist.August 16, 2018

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -1- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO COMPLAINT OF PLAINTIFF MEGAN DEVLIN-PREIKSA G o rd o n R ee s S cu ll y M a n su k h a n i, L L P 2 7 5 B a tt er y S tr ee t, S u it e 20 00 S a n F ra n ci sc o , C A 9 4 1 1 1 MICHAEL D. BRUNO (SBN: 166805) HIEU T. WILLIAMS (SBN: 280585) GORDON REES SCULLY MANSUKHANI, LLP 275 Battery Street, Suite 2000 San Francisco, CA 94111 Telephone: (415) 986-5900 Facsimile: (415) 986-8054 Mbruno@grsm.com Hwilliams@grsm.com Attorneys for Defendants THE BAY CLUBS COMPANY, LLC (erroneously sued as the “BAY CLUB OF SAN FRANCISCO, LLC”), MATTHEW STEVENS, and MARK KOORENNY SUPERIOR COURT OF CALIFORNIA COUNTY OF SANTA CLARA MEGAN DEVLIN-PREIKSA, Plaintiff, vs. BAY CLUB OF SAN FRANCISCO, LLC, MATTHEW STEVENS, MARK KOORENNY, and DOES 1 through 25, inclusive, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) CASE NO. 18CV333382 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO COMPLAINT OF PLAINTIFF MEGAN DEVLIN-PREIKSA Accompanying Documents: 1. Demurrer; 2. Declaration of Hieu T. Williams; 3. [Proposed] Order Date: December 20, 2018 Time: 9:00 a.m. Dept.: 19 Complaint Filed: May 9, 2018 Electronically Filed by Superior Court of CA, County of Santa Clara, on 10/1/2018 1:08 PM Reviewed By: E. Fang Case #18CV333382 Envelope: 2007451 18CV333382 Santa Clara - Civil E. Fang 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -2- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO COMPLAINT OF PLAINTIFF MEGAN DEVLIN-PREIKSA G o rd o n R ee s S cu ll y M a n su k h a n i, L L P 2 7 5 B a tt er y S tr ee t, S u it e 20 00 S a n F ra n ci sc o , C A 9 4 1 1 1 Table of Contents Page(s) I. INTRODUCTION ...............................................................................................................7 II. FACTS ALLEGED IN THE COMPLAINT .......................................................................8 A. Plaintiff’s Employment with Defendant Bay Club and The Workplace Investigations ...........................................................................................................8 III. LEGAL STANDARD ..........................................................................................................9 IV. LEGAL ARGUMENT .......................................................................................................10 A. Plaintiff’s First Cause of Action for Harassment and Third Cause of Action for Failure to Prevent Harassment Fail as Asserted Against Defendants The Bay Club and Stevens ..................................................................10 B. Plaintiff’s Eighth Cause of Action for Defamation Per Se Fails As Asserted Against Defendant Koorenny .................................................................11 1. Plaintiff Fails to State a Claim ...................................................................11 2. Defendant Koorenny’s Alleged Statements Related to a Workplace Investigation Are Protected By the Litigation Privilege, Which is Absolute .....................................................................................................12 3. Defendant Koorenny’s Alleged Statements Are Also Protected By the Common Interest Privilege and Plaintiff Cannot Overcome the Privilege .....................................................................................................14 C. Plaintiff’s Sixth Cause of Action for Interference with Economic Advantage Fails to State a Claim Against Defendant Koorenny ...........................15 1. Defendant Koorenny Did Not Engage in Any “Independently Actionable Conduct” ..................................................................................16 2. Defendant Koorenny Is Not a “Stranger” to the Business Relationship ...............................................................................................17 D. Plaintiff’s Fifth Cause of Action for Negligence Fails to State a Claim Against Defendant Koorenny ................................................................................18 V. CONCLUSION ..................................................................................................................19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -3- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO COMPLAINT OF PLAINTIFF MEGAN DEVLIN-PREIKSA G o rd o n R ee s S cu ll y M a n su k h a n i, L L P 2 7 5 B a tt er y S tr ee t, S u it e 20 00 S a n F ra n ci sc o , C A 9 4 1 1 1 Table of Authorities Page(s) Cases Aber v. Comstock (2012) 212 Cal.App.4th 931 ..................................................................................................... 12 Adams v. Superior Court (1992) 2 Cal.App.4th 521 ......................................................................................................... 13 Adelman v. Associated International Insurance Company (2001) 90 Cal.App.4th 352 ....................................................................................................... 10 Asahi Kasei Pharma Corporation v. Actelion Limited Company (2013) 222 Cal.4th 945 ............................................................................................................. 17 Aubry v. Tri-City Hospital District (1992) 2 Cal.4th 962 ................................................................................................................. 10 Award Metals, Incorporated v. Superior Court (1991) 228 Cal.App.3d 1128 ................................................................................................... 10 Blank v. Kirwan (1985) 39 Cal.3d 311 ................................................................................................................ 10 Blanks v. Seyfarth Shaw Limited Liability Partnership (2009) 171 Cal.App.4th 336 ..................................................................................................... 19 Brown v. Kelly Broadcasting Company (1989) 48 Cal.3d 711 ................................................................................................................ 15 Cuenca v. Safeway San Francisco Employees Federal Credit Union (1986) 180 Cal.App.3d 985 ...................................................................................................... 14 Della Penna v. Toyota Motor Sales, U.S.A., Incorporated (1995) 11 Cal.4th 376 ............................................................................................................... 16 Doe v. United States Youth Soccer Association, Incorporated (2017) 8 Cal.App.5th 1118 ....................................................................................................... 18 Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590 ...................................................................................................... 10 Freis v. Soboroff (2000) 81 Cal.App.4th 1102 ....................................................................................................... 9 Fremont Reorganizing Corporation v. Faigin (2011) 198 Cal.App.4th 1153 ................................................................................................... 12 Fuentes v. AutoZone, Incorporated (2011) 200 Cal.App.4th 1221 ................................................................................................... 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -4- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO COMPLAINT OF PLAINTIFF MEGAN DEVLIN-PREIKSA G o rd o n R ee s S cu ll y M a n su k h a n i, L L P 2 7 5 B a tt er y S tr ee t, S u it e 20 00 S a n F ra n ci sc o , C A 9 4 1 1 1 Guardian North Bay, Incorporated v. Superior Court (2001) 94 Cal.App.4th 963 ....................................................................................................... 10 Gutierrez v. Mofid (1985) 39 Cal.3d 892 ................................................................................................................ 19 Hagberg v. California Federal Bank (2004) 32 Cal.4th 350 ............................................................................................................... 12 Hassan v. Mercy American River Hospital (2003) 31 Cal.4th 709 ............................................................................................................... 14 Hecimovich v. Encinal School Parent Teacher Organization (2012) 203 Cal.App.4th 450 ......................................................................................... 11, 12, 14 Hegyes v. Unjian Enterprises, Incorporation (1991) 234 Cal.App.3d 1103 .................................................................................................... 18 Hui v. Sturbaum (2014) 222 Cal.App.4th 1109 ................................................................................................... 14 Kashian v. Harriman (2002) 98 Cal.App. 892 ............................................................................................................ 14 Kasparian v. County of Los Angeles (1995) 38 Cal.4th 242 ............................................................................................................... 17 Kentucky Fried Chicken of California v. Superior Court (1997) 14 Cal.4th 814 ............................................................................................................... 19 Korea Supply Company v. Lockheed Martin Corporation (2003) 29 Cal.4th 1134 ............................................................................................................. 16 Larmour v. Campanale (1979) 96 Cal.App.3d 566 ........................................................................................................ 13 Ludgate Insurance Company v. Lockheed Martin Corporation (2000) 82 Cal.App.4th 592 ....................................................................................................... 12 Lundquist v. Reusser (1994) 7 Ca1.4th 1193 .............................................................................................................. 15 Marin Tug Barge, Incorporated v. 15 Westport Petroleum, Incorporated (9th Cir. 2001) 271 F.3d 825 .................................................................................................... 17 Mintz v. Blue Cross of California (2009) 172 Cal. 4th 1594 .......................................................................................................... 17 Nally v. Grace Community Church (1988) 47 Cal.3d 278 ................................................................................................................ 18 National Rural Telecommunications Cooperative v. DIRECTV, Incorporated 319 F. Supp. 2d 1059 (C.D. Cal. 2003) .................................................................................... 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -5- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO COMPLAINT OF PLAINTIFF MEGAN DEVLIN-PREIKSA G o rd o n R ee s S cu ll y M a n su k h a n i, L L P 2 7 5 B a tt er y S tr ee t, S u it e 20 00 S a n F ra n ci sc o , C A 9 4 1 1 1 Noel v. River Hills Wilsons, Incorporated (2003) 113 Cal.App.4th 1363 ................................................................................................... 15 Obos v. Scripps Psychological Associates, Incorporated (1997) 59 Cal.App.4th 103 ....................................................................................................... 13 Robomatic, Incorporated v. Vetco Offshore (1990) 225 Cal.App.3d 270 ...................................................................................................... 15 Rubin v. Green (1993) 4 Cal.4th 1187 ............................................................................................................... 13 Salimi v. State Compensation Insurance Fund (1997) 54 Cal.App.4th 216 ......................................................................................................... 9 San Jose Construction, Incorporated v. SBCC, Incorporated (2007) 155 Cal. App. 4th 1528 ................................................................................................. 16 Schick v. Lerner (1987) 193 Cal. App. 3d 1321 ............................................................................................ 16, 17 Scotch v. Art Institute of California (2009) 173 Cal.App.4th 986 ..................................................................................................... 11 Serrano v. Priest (1971) 5 Cal.3d 584 .................................................................................................................. 10 Silberg v. Anderson (1990) 50 Cal.3d 205 ................................................................................................................ 13 Terry v. Davis (2005) 131 Cal.App.4th 1534 ................................................................................................... 15 Thompson v. City of Monrovia (2010) 186 Cal.App.4th 860 ..................................................................................................... 11 ViChip Corporation v. Lee 438 F. Supp. 2d 1087 (N.D. Cal. 2006) .................................................................................... 18 Wise v. Thrifty Payless, Incorporated (2000) 83 Cal.App.4th 1296 ..................................................................................................... 13 Wolfrich Corporation v. United Services Automobile Association (1983) 149 Cal.App.3d 1206 .................................................................................................... 17 Wong v. Jing (2010) 189 Cal.App.4th 1354 ................................................................................................... 11 Woods v. Fox Broadcasting Sub., Incorporated (2005) 129 Cal.4th 344 ....................................................................................................... 17, 18 Statutes Civil Code Section 12940 ........................................................................................................................... 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -6- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO COMPLAINT OF PLAINTIFF MEGAN DEVLIN-PREIKSA G o rd o n R ee s S cu ll y M a n su k h a n i, L L P 2 7 5 B a tt er y S tr ee t, S u it e 20 00 S a n F ra n ci sc o , C A 9 4 1 1 1 Civil Code Section 47 ........................................................................................................................... 12, 14 Code of Civil Procedure Section 430.10 .................................................................................................................... 10, 12 Code of Civil Procedure Section 430.30 .......................................................................................................................... 10 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -7- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO COMPLAINT OF PLAINTIFF MEGAN DEVLIN-PREIKSA G o rd o n R ee s S cu ll y M a n su k h a n i, L L P 2 7 5 B a tt er y S tr ee t, S u it e 20 00 S a n F ra n ci sc o , C A 9 4 1 1 1 I. INTRODUCTION Plaintiff Megan Devlin-Preiksa (“Plaintiff”) participated as a witness in an internal workplace investigation into her complaints about Defendant Matthew Stevens (“Defendant Stevens”). Defendant attorney Mark Koorenny (“Defendant Koorenny”) interviewed Plaintiff on two different occasions. Now she sues Defendant Koorenny for defamation per se and intentional interference with prospective economic advantage for delivering what she claims to be the wrong conclusion to her employer, Defendant The Bay Clubs Company, LCC (“Defendant Bay Club”). Indeed, Plaintiff alleges that, Defendant Koorenny chose to “characterize inconsistencies between her account of certain events and the recollection(s) of others as intentional misrepresentation on her part, rather than dishonesty on the part of other persons or a sincere difference in recollections or perceptions.”1 Plaintiff’s claims against Defendant Koorenny are barred as a matter of law. Defendant Koorenny’s alleged statements to his client as alleged are protected absolutely by the litigation privilege, and they are also protected by common interest privilege, which applies because Plaintiff has asserted no facts to support her boilerplate claim of malice. Plaintiff’s claim for intentional interference with prospective business advantage also fails because Plaintiff has not alleged any independently wrongful conduct on the part of Defendant Koorenny nor is Defendant Koorenny a stranger to the employment relationship between Plaintiff and Defendant Bay Club. Plaintiff’s claim for negligence against Defendant Koorenny fails because as an attorney for Defendant Bay Club, he owed a duty to the company, not her. Plaintiff also has not asserted any facts indicating that his alleged conduct related to his investigation fell below a reasonable standard of care. Finally, Plaintiff’s claim for age harassment and failure to investigate also fail because Plaintiff has not alleged conduct that is severe or pervasive as a matter of law and do not withstand the pleading stage. /// /// /// 1 See Complaint ¶37, Ex. A to Declaration of Hieu T. Williams.) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -8- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO COMPLAINT OF PLAINTIFF MEGAN DEVLIN-PREIKSA G o rd o n R ee s S cu ll y M a n su k h a n i, L L P 2 7 5 B a tt er y S tr ee t, S u it e 20 00 S a n F ra n ci sc o , C A 9 4 1 1 1 II. FACTS ALLEGED IN THE COMPLAINT A. Plaintiff’s Employment with Defendant Bay Club and The Workplace Investigations In or about 2001, Defendant The Bay Clubs Company, LLC (“Defendant Bay Club”) employed Plaintiff. (Complaint [“Compl.”] ¶7, Ex. A2 to Declaration of Hieu T. Williams [“Williams Decl.”]) During her employment, Plaintiff alleges that she complained to Defendant Bay Club that “Defendant Stevens was engaging in harassment and discrimination against older employees.” (Compl. ¶19.) Defendant Stevens is the President and Chief Executive Officer of Defendant Bay Club. (Compl. ¶8.) Plaintiff alleges that Defendants Stevens engaged in the following conduct:  He announced to executive that “he had decided to reorganize the senior executive team and insisted that we’re going to do what I say; I don’t want any pushback;”  He emphasized that Defendant Bay Club would have “one voice-his own” and that senior executives “would be replaced with younger employees who would not bring their own experiences and opinions to the workplace;”  He commented that “he could hire two recent college graduates for the same amount that Bay Club paid just one of its older managers;”  He “lashed out” at Plaintiff in a “harsh, public and demeaning manner...threatened to terminate their employment and replace them with ‘a Cornell grad;’”  He proclaimed, “I’m getting rid of the old [Western Athletic Club]” and “the second tier.” (Compl. ¶¶11-14.) Defendant Koorenny, “counsel for Bay Club” investigated Plaintiff’s internal complaint. (Compl. ¶¶20, 72.) Defendant Koorenny is an attorney, who “holds an equity interest in the Bay Club and stands to benefit personally from the financial success of The Bay Club.” (Compl. ¶20.) “During the spring of 2017, Defendant Koorenny interviewed Plaintiff “as part of his investigation of [Plaintiff’s] complaint.” (Comp. ¶22.) /// 2 All references to the Complaint [“Compl.”] hereinafter refer to the Complaint attached as Ex. A to Williams Decl. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -9- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO COMPLAINT OF PLAINTIFF MEGAN DEVLIN-PREIKSA G o rd o n R ee s S cu ll y M a n su k h a n i, L L P 2 7 5 B a tt er y S tr ee t, S u it e 20 00 S a n F ra n ci sc o , C A 9 4 1 1 1 On or about February 15, 2018, Plaintiff filed a complaint with the Department of Fair Employment and Housing (“DFEH”), alleging that Defendant Stevens had harassed her and that Defendant Bay Club had retaliated against her for her complaint about Defendant Stevens’ harassment. (Compl. ¶29.) “The Bay Club assigned Defendant Koorenny to investigate her [DFEH] complaint.” (Compl. ¶¶35, 72.) On March 13, 2018, Defendant Koorenny interviewed Plaintiff about her allegations. (Compl. ¶35.) On March 17, 2018, Defendant Bay Club terminated Plaintiff’s employment “because she (a) had allegedly “not been truthful with [D]efendant Koorenny on March 13, 2018 in describing Defendant Stevens” conduct during his investigation into her complaints, “and (b) had not signed the arbitration agreement that the Company distributed to employees in January of 2016.” (Compl. ¶36.) Plaintiff alleges that Defendant Koorenny “chose to characterize inconsistencies between her account of certain events and the recollection of other persons as intentional misrepresentation on [Plaintiff’s] part.” (Compl. ¶37.) Plaintiff also alleges that Defendant Koorenny “made false and derogatory comments regarding the [P]laintiff’s character and honesty to persons employed by or affiliated with [Defendant Bay Club], including statements that characterized the plaintiff as being dishonest and untruthful during his investigation of her complaint.” (Compl. ¶89.) Defendant the Bay Club “terminated Plaintiff’s employment in reliance on Defendant Koorenny’s investigation” and his portrayal of her as a dishonest person. (Compl. ¶81.) Plaintiff alleges that Defendant Koorenny’s statements tended to injure the [P]laintiff in her occupation and expose her to contempt, ridicule or shame, and discouraged others from associating with her.” (Compl. ¶90.) Plaintiff further alleges that Defendants “acted with malice, oppression and a conscious disregard for the rights of the plaintiff.” (Compl., ¶¶ 44, 92.) III. LEGAL STANDARD The function of a demurrer is to test the sufficiency of the pleadings by raising questions of law. (Salimi v. State Comp. Ins. Fund (1997) 54 Cal.App.4th 216, 219.) A demurrer admits all facts properly pleaded, but not contentions, deductions or conclusions of fact or law. (Freis v. Soboroff (2000) 81 Cal.App.4th 1102, 1104.) A demurrer is properly sustained where the 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -10- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO COMPLAINT OF PLAINTIFF MEGAN DEVLIN-PREIKSA G o rd o n R ee s S cu ll y M a n su k h a n i, L L P 2 7 5 B a tt er y S tr ee t, S u it e 20 00 S a n F ra n ci sc o , C A 9 4 1 1 1 complaint fails to state facts sufficient to constitute a cause of action against a defendant or it discloses a defense that would bar recovery. (Code Civ. Proc., § 430.10(e); Guardian North Bay, Inc. v. Super. Ct. (2001) 94 Cal.App.4th 963, 971-72; see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318, [demurrer should be sustained where defects cannot be cured by amendment].) For the purpose of testing the sufficiency of a cause of action, a demurrer admits the truth of all material facts properly pleaded; but not contentions, deductions or conclusions of fact or law. (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 966-67; Serrano v. Priest (1971) 5 Cal.3d 584, 591; Adelman v. Associated Int'l Ins. Co. (2001) 90 Cal.App.4th 352, 359.) A demurrer may also be sustained without leave to amend where the nature of plaintiff’s claim is clear and under the applicable substantive law there can be no liability. (Award Metals, Inc. v. Super. Ct. (1991) 228 Cal.App.3d 1128, 1131-32.) When the objection to the complaint appears on the face of the complaint a demurrer is appropriate. (Code Civ. Proc. §430.30(a).) It must also be sustained where the pleading is uncertain, ambiguous, or unintelligible. (Code of Civ. Proc. §430.10(f).) IV. LEGAL ARGUMENT A. Plaintiff’s First Cause of Action for Harassment and Third Cause of Action for Failure to Prevent Harassment Fail as Asserted Against Defendants The Bay Club and Stevens In order to be actionable as hostile work environment harassment, the conduct complained of must be sufficiently severe or pervasive so as to alter the conditions of employment and create an abusive working environment. (Fisher v. San Pedro Peninsula Hosp. (1989) 214 Cal.App.3d 590, 611; see Fuentes v. AutoZone, Inc. (2011) 200 Cal.App.4th 1221, 1226.) In determining what constitutes “sufficiently pervasive” harassment, the courts have held that the conduct cannot be occasional, isolated, sporadic, or trivial; rather the plaintiff must show a concerted pattern of harassment of a repeated, routine or a generalized nature. (Id. at 142.) “[S]imple teasing, offhand comments, and isolated incidents (unless extremely serious) will not amount to discriminatory changes in the terms and conditions of employment.” (Ibid.) /// /// 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -11- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO COMPLAINT OF PLAINTIFF MEGAN DEVLIN-PREIKSA G o rd o n R ee s S cu ll y M a n su k h a n i, L L P 2 7 5 B a tt er y S tr ee t, S u it e 20 00 S a n F ra n ci sc o , C A 9 4 1 1 1 Here, Plaintiff fails to allege sufficient facts showing a concerted pattern of harassment by Defendant Stevens based upon her age. To the contrary, Plaintiff alleges five (5) remarks by Defendant Stevens over an approximate eight (8) month period. (Compl. ¶¶11, 13, 14, 42.) The remarks reflect Defendant Stevens’ thoughts on a reorganization, including salary overhead, his high expectations and top-down management style. These allegations taken in their totality do not come close to a “concerted pattern of harassment” or the severe or pervasive conduct necessary to state a claim for hostile work environment based on age. At most, Plaintiff alleges “isolated or trivial” acts of inconclusive character that are insufficient to alter the conditions of her employment as a matter of law. Also, an actionable claim under section 12940, subdivision (k) for failure to prevent harassment and discrimination is dependent on a claim of actual discrimination or harassment. “Employers should not be held liable to employees for failure to take necessary steps to prevent such conduct, except where the actions took place and were not prevented.” (Scotch v. Art Institute of California (2009) 173 Cal.App.4th 986, 1021. Section 12940, subdivision (j)(1), “does not create a stand-alone tort, the employee has no cause of action for failure to investigate unlawful harassment or retaliation, unless actionable misconduct occurred.” (Thompson v. City of Monrovia (2010) 186 Cal.App.4th 860, 880.) B. Plaintiff’s Eighth Cause of Action for Defamation Per Se Fails as Asserted Against Defendant Koorenny 1. Plaintiff Fails to State a Claim “The elements of a defamation claim are (1) a publication that is (2) false, (3) defamatory, (4) unprivileged, and (5) has a natural tendency to injure or causes special damage. [Citation.]” (Wong v. Jing (2010) 189 Cal.App.4th 1354, 1369.) “On demurrer, the court must determine, as a question of law, whether the defamatory matter is on its face or capable of the defamatory meaning attributed to it by the innuendo. Hence, the complaint should set the matter out verbatim, either in the body or as an attached exhibit.” (Hecimovich v. Encinal School Parent Teacher Org. (2012) 203 Cal.App.4th 450, 457, fn. 1.) A plaintiff must allege the essential facts with precision and particularity sufficient to acquaint a defendant with the nature, source, and 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -12- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO COMPLAINT OF PLAINTIFF MEGAN DEVLIN-PREIKSA G o rd o n R ee s S cu ll y M a n su k h a n i, L L P 2 7 5 B a tt er y S tr ee t, S u it e 20 00 S a n F ra n ci sc o , C A 9 4 1 1 1 extent of his cause of action. (Ludgate Ins. Co. v. Lockheed Martin Corp. (2000) 82 Cal.App.4th 592, 608.) Where the complaint fails to give any specifics concerning the defamation claim, including the “what, where or when,” or whether the statement was oral or written, the claim is untenable as a matter of law. (Id. at 470-71.) Here, Plaintiff fails to state a claim for defamation against Defendant Koorenny. Plaintiff alleges that Defendant Koorenny made “made false and derogatory comments regarding the [P]laintiff’s character and honesty…including statements that characterized the plaintiff as being dishonest and untruthful during his investigation of her complaint.” (Compl. ¶89.) However, Plaintiff does not identify specifically what was said, to whom these statements were made and understood their defamatory meaning, how those statements were specifically made, where they were made, when these statements were allegedly made or were discovered by Plaintiff. Absent such information, Plaintiff has failed to meet the requisite pleading standard to survive a demurrer. (Code Civ. Proc., §430.10e).) 2. Defendant Koorenny’s Alleged Statements Related to a Workplace Investigation Are Protected by the Litigation Privilege, Which is Absolute Even assuming Plaintiff alleged specific statements made by Defendant Koorenny in the Complaint, Plaintiff still fails to state a claim because such statements are privileged. Civil Code section 47, subdivision (b) codifies the litigation privilege, which “applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that [has] some connection or logical relation to the action.’” The privilege ‘is not limited to statements made during a trial or other proceedings, but may extend to steps taken prior thereto, or afterwards.’ [Citation].” (Fremont Reorganizing Corp. v. Faigin (2011) 198 Cal.App.4th 1153, 1172, fn. and internal citation omitted.) Statements need only have “some relation” to the judicial proceeding. (Hagberg v. Cal. Federal Bank (2004) 32 Cal.4th 350, 361.) The privilege extends to statements made in preparation for or to prompt an investigation that may result in the initiation of official proceedings, including statements made during harassment investigations. (Aber v. Comstock (2012) 212 Cal.App.4th 931, 944.) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -13- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO COMPLAINT OF PLAINTIFF MEGAN DEVLIN-PREIKSA G o rd o n R ee s S cu ll y M a n su k h a n i, L L P 2 7 5 B a tt er y S tr ee t, S u it e 20 00 S a n F ra n ci sc o , C A 9 4 1 1 1 The privilege is absolute, covering even allegedly false and malicious statements. (Silberg v. Anderson (1990) 50 Cal.3d 205, 215-218; Wise v. Thrifty Payless, Inc. (2000) 83 Cal.App.4th 1296, 1302.) Indeed, the privilege does not depend on the publisher’s “motives, morals, ethics or intent.” (Silberg, supra 50 Cal.3d at 220.) The privilege is given “an expansive reach,” and any doubt is resolved in favor of applying it. (Rubin v. Green (1993) 4 Cal.4th 1187, 1194; Adams v. Sup. Ct. (1992) 2 Cal.App.4th 521, 529.) Further, “‘[a]n attorney at law is absolutely privileged to publish defamatory matter concerning another in communications preliminary to a proposed judicial proceeding, or in the institution of, or during the course and as a part of, a judicial proceeding in which he participates as counsel, if it has some relation to the proceeding.’” (Larmour v. Campanale (1979) 96 Cal.App.3d 566, 569, fn. 2, emphasis added; Obos v. Scripps Psychological Assocs., Inc. (1997) 59 Cal.App.4th 103, 108, [holding that the focus is whether the publication was connected or related to the underlying proceedings; not the status of the plaintiff in the subsequent proceeding].) Here, Defendant Koorenny, is an attorney and conducted a workplace investigation into pending harassment claims and interviewed Plaintiff as “counsel for Bay Club.” (Comp. ¶¶20, 22, 31, 72.) Afterward, Defendant Koorenny gave Defendant Bay Club his assessment, upon which the Bay Club relied upon to terminate Plaintiff’s employment. (Comp. ¶81.) As pled, Defendant Koorenny’s statements to his client Defendant Bay Club regarding his impression of Plaintiff from the workplace investigation are protected by the litigation privilege given that they were made in anticipation of litigation (i.e., the instant lawsuit filed by Plaintiff and the potential lawsuit by another co-worker Ms. Graf). Because Plaintiff’s defamation claim stems from privileged communications between an attorney and his client related to a judicial proceeding, her claim is subject to dismissal at the pleading stage. /// /// /// /// 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -14- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO COMPLAINT OF PLAINTIFF MEGAN DEVLIN-PREIKSA G o rd o n R ee s S cu ll y M a n su k h a n i, L L P 2 7 5 B a tt er y S tr ee t, S u it e 20 00 S a n F ra n ci sc o , C A 9 4 1 1 1 3. Defendant Koorenny’s Alleged Statements Are Also Protected By the Common Interest Privilege and Plaintiff Cannot Overcome the Privilege The alleged statements made by Defendant Koorenny are also protected by the common- interest privilege. Pursuant to Civil Code section 47(c), the privilege of common interest immunizes a communication made without malice, “to a person interested therein, (1) by one who is also interested, or (2) by one who stands in such a relation to the person interested as to afford a reasonable ground for supposing the motive for the communication to be innocent, or (3) who is requested by the person interested to give the information.” (Civ. Code §47(c).) The privilege is recognized where the communicator and the recipient have a common interest and the communication is of a kind reasonably calculated to protect or further that interest. (Hui v. Sturbaum (2014) 222 Cal.App.4th 1109, 1118.) “Interest” is a direct concern shared by speaker and hearer, such as an organizational interest. (Kashian v. Harriman (2002) 98 Cal.App. 892, 926-914; Hassan v. Mercy Amer. River Hosp. (2003) 31 Cal.4th 709, 714 [statements between hospitals on whether to grant privileges to doctor]; Hecimovich, supra, 203 Cal.App.4th at 472 [statements about basketball coach to members of parent-teacher organization, assistant coach and parents].) Statements by management and co-workers “relating to the conduct of an employee have been held to fall squarely within the qualified privilege for communications to interested persons.” (See Cuenca v. Safeway San Francisco Employees Fed. Credit Union (1986) 180 Cal.App.3d 985, 995-96.) As pled, it is undisputed that Defendant Koorenny and Defendant Bay Club share a common “interest.” In addition to his role as “Counsel for the Bay Club,” “Defendant Koorenny holds an equity interest” in Defendant Bay Club and “stands to benefit personally from the financial success” of Defendant Bay Club. (Compl. ¶¶20, 72, 77.) Any statements made by Defendant Koorenny related to his investigation to his client - a company of which he is related, are thus covered by the common interest privilege given their shared interest in the success of the company and in the resolution of the pending harassment claims, including the adequate preparation for litigation. /// 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -15- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO COMPLAINT OF PLAINTIFF MEGAN DEVLIN-PREIKSA G o rd o n R ee s S cu ll y M a n su k h a n i, L L P 2 7 5 B a tt er y S tr ee t, S u it e 20 00 S a n F ra n ci sc o , C A 9 4 1 1 1 Once statements are shown to be protected under a qualified privilege, the burden shifts to the plaintiff to prove the statements were made with malice. (See Lundquist v. Reusser (1994) 7 Ca1.4th 1193, 1203.) Malice for purposes of the statute means “‘a state of mind arising from hatred or ill will, evidencing a willingness to vex, annoy or injure another person.’” (Brown v. Kelly Broadcasting Co. (1989) 48 Cal.3d 711, 723.) Malice may not be inferred from the mere fact of the communication. (Terry v. Davis (2005) 131 Cal.App.4th 1534, 1558.) “The malice necessary to defeat a qualified privilege is ‘actual malice’ which is established by a showing that the publication was motivated by hatred or ill will towards the plaintiff or by a showing that the defendant lacked reasonable grounds for belief in the truth of the publication and therefore acted in reckless disregard of the plaintiff’s rights.” (Noel v. River Hills Wilsons, Inc. (2003) 113 Cal.App.4th 1363, 1370, original italics, internal citations omitted.) Plaintiff has not alleged sufficient facts showing Defendant Koorenny harbored any malice to rebut the qualified privilege to state a claim for defamation per se. Plaintiff’s allegations of “malice” are nothing but boilerplate, conclusory allegations lacking in any specificity: “[D]efendant Koorenny acted with malice, oppression and a conscious disregard for the rights of the plaintiff” is insufficient. (Compl., ¶92.; see Robomatic, Inc. v. Vetco Offshore (1990) 225 Cal.App.3d 270, 276 [“A general allegation of malice will not suffice; plaintiff must allege specific facts showing defendant’s ill will towards him.”].) Accordingly, Plaintiff has failed to meet her burden to overcome the common interest privilege and thus, Defendants’ Demurrer to Plaintiff’s eighth cause of action must be sustained. C. Plaintiff’s Sixth Cause of Action for Interference with Economic Advantage Fails to State a Claim Against Defendant Koorenny A claim for intentional interference with prospective economic advantage must allege (1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -16- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO COMPLAINT OF PLAINTIFF MEGAN DEVLIN-PREIKSA G o rd o n R ee s S cu ll y M a n su k h a n i, L L P 2 7 5 B a tt er y S tr ee t, S u it e 20 00 S a n F ra n ci sc o , C A 9 4 1 1 1 1153.) 1. Defendant Koorenny Did Not Engage in Any “Independently Actionable Conduct” To establish a claim for intentional interference with prospective economic advantage, a plaintiff must plead that the defendant engaged in an independently wrongful act-an act that is unlawful or is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard. (Id. at 1158-59.) A plaintiff must plead and prove “that the defendant’s interference was wrongful ‘by some measure beyond the fact of the interference itself.’ [Citation.]” (Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 393, fn. omitted; see also San Jose Construction, Inc. v. SBCC, Inc. (2007) 155 Cal. App. 4th 1528, 1544-45 [“[A]n act must be wrongful by some legal measure, rather than merely a product of an improper, but lawful, purpose or motive.”].) As demonstrated above, Plaintiff cannot state a claim for defamation per se against Defendant Koorenny because she has not pled sufficient facts; the alleged statements are protected by the litigation privilege (which is absolute) and the common interest privilege (which she cannot overcome). The alleged statements to Defendant Bay Club including Defendant Koorenny’s impressions of Plaintiff from the workplace investigations are not independently wrongful in and of themselves. Because there are no allegations that Defendant Koorenny engaged in conduct that was independently wrongful by some legal measure other than the fact of interference itself (providing investigation conclusions to a client), Plaintiff’s intentional interference claim must be dismissed at the pleading stage. More importantly, “[a]bsent extraordinary circumstances, an attorney may not be held liable for urging a client to breach a contract with some third party.” (Schick v. Lerner (1987) 193 Cal. App. 3d 1321, 1329 [holding that claim against attorney for inducing a client to breach a contract with plaintiff is barred as a matter of law].) Public policy dictates that attorneys must remain free to counsel their clients without fear of subjecting themselves to liability as a result of the proper discharge of their professional obligations. Clients as well must feel free to seek out an attorney’s advice and impressions on any issue at any time. “Any rule to the contrary would 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -17- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO COMPLAINT OF PLAINTIFF MEGAN DEVLIN-PREIKSA G o rd o n R ee s S cu ll y M a n su k h a n i, L L P 2 7 5 B a tt er y S tr ee t, S u it e 20 00 S a n F ra n ci sc o , C A 9 4 1 1 1 constitute a serious impairment to the attorney-client relationship, and a resulting deleterious effect on the administration of justice. [Citation.]” (Wolfrich Corp. v. United Services Automobile Assn. (1983) 149 Cal.App.3d 1206, 1211.) Plaintiff claims that Defendant Koorenny interfered with her prospective business advantage with Defendant Bay Club. However, Plaintiff has not alleged any “extraordinary circumstances” necessary to permit her to sue Defendant Koorenny (an attorney) for purportedly advising Defendant Bay Club (his client) to terminate her employment. Plaintiff only alleges that Defendant Koorenny “chose to characterize inconsistencies between her account of certain events and the recollection of other persons as intentional misrepresentation on [Plaintiff’s] part.” (Compl. ¶37.) If providing the conclusions of an investigation, including impressions of the credibility of witnesses interviewed (even if disputed by Plaintiff), constitutes “extraordinary circumstances,” then the rule set forth in Schick would be rendered meaningless and attorneys would be prohibited from providing counsel to clients. 2. Defendant Koorenny Is Not a “Stranger” to the Business Relationship Interference with economic advantage can only be committed by “strangers - interlopers who have no legitimate interest in the scope or course of the contract’s performance.” (Asahi Kasei Pharma Corp. v. Actelion Ltd. (2013) 222 Cal.4th 945, 964 (internal quotes omitted).) Critically, a plaintiff must allege that the defendant interfered with the plaintiff’s relationship with a third party - i.e., that the defendant is a stranger to the relationship. (Kasparian v. County of Los Angeles (1995) 38 Cal.4th 242, 266; Woods v. Fox Broadcasting Sub., Inc. (2005) 129 Cal.4th 344, 350-351.) Thus, the other party to plaintiff’s contract cannot be held liable for inducing breach. This principle extends to a contracting party’s agent, and it is “settled that ‘corporate agents and employees acting for and on behalf of a corporation cannot be held liable for inducing a breach of the corporation's contract.’” (Mintz v. Blue Cross of Calif. (2009) 172 Cal. 4th 1594, 1605 (internal citation omitted); see also Marin Tug Barge, Inc. v. 15 Westport Petroleum, Inc. (9th Cir. 2001) 271 F.3d 825, 832 [“California law has long recognized that ‘an entity with a direct interest or involvement in that relationship is not usually liable for harm 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -18- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO COMPLAINT OF PLAINTIFF MEGAN DEVLIN-PREIKSA G o rd o n R ee s S cu ll y M a n su k h a n i, L L P 2 7 5 B a tt er y S tr ee t, S u it e 20 00 S a n F ra n ci sc o , C A 9 4 1 1 1 caused by pursuit of its interests.’”].)3 In the alternative, a plaintiff must show that the defendant acted to protect his personal interests rather than those of the entity. (Woods v. Fox Broadcasting Sub., Inc. (2005) 129 Cal.4th 347 (emphasis added) [major shareholder who allegedly rigged sale price of corporation for its own benefit could be liable for interference with value of corporate employees' stock options, which were contractual obligations of corporation].) Plaintiff has not met her burden because Defendant Koorenny is not a “stranger” to her economic relationship with Defendant Bay Club. Plaintiff acknowledges that as counsel for the Bay Club, Defendant Koorenny was an agent of Defendant Bay Club - “obligated to advise and represent his client zealously, to act as the Company’s advocate and to advance his client’s interests to the best of his ability,” and who “stands to benefit personally from the financial success” of Defendant Bay Club. (Compl. ¶20, 77.) Nor has Plaintiff met her burden to show that Defendant Koorenny acted to protect his own personal interests rather than those of Defendant Bay Club. To the contrary, Plaintiff admits that Defendant Koorenny was, in fact, acting in the interest of Defendant Bay Club and “prioritized his duties as counsel” during the investigation. (Compl. ¶79.) Thus, Defendant Koorenny cannot be held liable for interfering with Plaintiff’s prospective economic advantage from her employment Defendant Bay Club. D. Plaintiff’s Fifth Cause of Action for Negligence Fails to State a Claim Against Defendant Koorenny The elements of a cause of action for negligence are that the “defendant had a duty to use due care, that he breached that duty, and that the breach was the proximate or legal cause of the resulting injury.” (Nally v. Grace Community Church (1988) 47 Cal.3d 278, 292-293.) A complaint is fatally defective if it fails to sufficiently plead facts showing a duty of care was owed. (Hegyes v. Unjian Enterprises, Inc. (1991) 234 Cal.App.3d 1103, 1111.) “The first element, duty, ‘may be imposed by law, be assumed by the defendant, or exist by virtue of a special relationship.’ ” (Doe v. United States Youth Soccer Assn., Inc. (2017) 8 Cal.App.5th 1118, 1128.) “[T]he existence of a duty is a question of law for the court.” (Ky. Fried Chicken 3 This principle has been followed by several district courts within this circuit. (See, e.g. ViChip Corp. v. Lee, 438 F. Supp. 2d 1087, 1097 (N.D. Cal. 2006); Nat'l Rural Telecomms. Co-op. v. DIRECTV, Inc., 319 F. Supp. 2d 1059, 1070-72 (C.D. Cal. 2003). 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 G o rd o n R ee s S cu ll y M a n su k h a n i, L L P 2 7 5 B a tt er y S tr ee t, S u it e 20 00 S a n F ra n ci sc o , C A 9 4 1 1 1 of Cal. v. Superior Court (1997) 14 Cal.4th 814, 819.) “ ‘In addressing breach of duty, “the crucial inquiry is whether [the attorney’s] advice was so legally deficient when it was given that he [or she] may be found to have failed to use ‘such skill, prudence, and diligence as lawyers of ordinary skill and capacity commonly possess and exercise in the performance of the tasks which they undertake.’ . . .” . . .’ ” (Blanks v. Seyfarth Shaw LLP (2009) 171 Cal.App.4th 336, 357.) “It is well settled that an attorney is liable for malpractice when his negligent investigation, advice, or conduct of the client’s affairs results in loss of the client’s meritorious claim.” (Gutierrez v. Mofid (1985) 39 Cal.3d 892, 900.) Here, Plaintiff alleges that Defendant Koorenny had a duty to conduct a prompt, thorough, impartial and fair investigation of her complaints, and to avoid falsely portraying simple differences between [Plaintiff’s] account of certain events and others’ accounts of those events as proof of dishonesty on the part of [Plaintiff].” (Compl. ¶71.) However, Defendant Koorenny, at attorney, was retained by Defendant Bay Club to conduct the investigation. (Comp. ¶¶20, 22, 31, 72.) Defendant Koorenny was an agent of Defendant Bay Club. As alleged, Plaintiff fails to assert any facts that indicate Defendant Koorenny owed a duty to perform his legal duties to her. Further, Plaintiff’s allegations regarding Defendant Koorenny’s conduct with respect to the sufficiency of the investigation are conclusory. V. CONCLUSION For the foregoing reasons, Defendants’ demurrer to Plaintiff’s first, third, fifth, sixth and eighth causes of action must be sustained without leave to amend. Dated: October 1, 2018 GORDON REES SCULLY MANSUKHANI, LLP By: MICHAEL D. BRUNO HIEU T. WILLIAMS Attorneys for Defendants THE BAY CLUBS COMPANY, LLC, MATTHEW STEVENS, and MARK KOORENNY28 -19- MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS’ DEMURRER TO COMPLAINT OF PLAINTIFF MEGAN DEVLIN-PREIKSA 1159896/40537984v.1