CINDY AMBUEHL VS CHRISTINA COLLINS, ET AL.

Tentative Rulings

Case Number: *******3565 Hearing Date: July 15, 2022 Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

CINDY AMBUEHL, et al., vs. CHRISTINA COLLINS, et al.

Case No.: *******3565 Hearing Date: July 15, 2022

Plaintiffs’ motion for leave to file a third amended complaint is granted.

Plaintiffs Cindy Ambuehl (“Ambuehl” or “Plaintiff”) and Anvis, Inc. (“Anvis”) (collectively, “Plaintiffs”) move for leave to file a third amended complaint (“TAC”) in this action. Specifically, the TAC will: (1) add a cause of action for breach of fiduciary duty; (2) assert causes of action on behalf of Anvis; (3) clarify allegations to distinguish between Defendants’ wrongdoing; (4) assert factual allegations stricken on the grounds they were outside the scope of the leave to amend granted in connection with the 1/25/22 ruling Hilton’s MJOP; (5) remove or revise allegations pursuant to the Court’s prior rulings on Defendants’ challenges to the SAC. (Notice of Motion, pg. 2.)

Background

On April 7, 2020, Plaintiffs filed a complaint against Defendants Christina Collins (“Collins”) and Hilton & Hyland Real Estate, Inc. (“Hilton”) alleging causes of action for (1) violation of Uniform Trade Secrets Act [against Collins and Hilton], (2) breach of contract [against Collins], (3) violation of Business & Professions Code 17200 [against Collins and Hilton], (4) intentional interference with prospective business advantage (“Intentional Interference”) [against Collins], and (5) violation of Penal Code 502(c) [against Collins and Hilton] in connection with Collins’s alleged misappropriation of Plaintiffs’ proprietary information while working as Ambuehl’s assistant. On December 9, 2020, Plaintiffs filed their first amended complaint (“FAC”), which added causes of action for (6) conversion, (7) concealment, and (8) defamation against Collins only. Plaintiffs alleged Hilton is Collins’s current employer and that Collins engaged in misconduct involving Ambuehl’s proprietary information via her position of employment with Hilton. (FAC 52, 33, 80.) On March 8, 2021, during the pendency of Collins’s Anti-SLAPP motion, the parties entered into a stipulation acknowledging Ambuehl’s intention on filing a SAC and which also provided that the causes of action asserted by Anvis would be dismissed without prejudice. On April 27, 2021, Plaintiffs’ current counsel substituted in as counsel. On September 15, 2021, the Court granted Collins’s special motion to strike the 8^th (defamation) cause of action as well as Paragraph 94 from the FAC.

On December 27, 2021, Plaintiffs filed the instant motion for leave to file an amended complaint. On January 25, 2022, the Court granted Hilton’s motion for judgment on the pleadings (“MJOP”) as to the 5^th cause of action with leave to amend within 20 days. Plaintiffs filed their SAC on February 14, 2022, in which the same causes of action above, excluding the stricken defamation cause of action, are asserted against Collins, and in which facts supporting the 5^th cause of action were amended. The SAC notes that it is made consistent with the Court’s January 25, 2022 Order on the MJOP and without prejudice to Plaintiffs’ proposed amendments at issue in their motion for leave to amend. (SAC, pg. 2, fn. 1.) On March 15, 2022, the Court denied Collins’s motion for summary adjudication of the 6^th (conversion) and 7^th (concealment by forgery) causes of action in the SAC. On April 15, 2022, the Court sustained Hilton’s demurrer to the 5^th cause of action without leave to amend. In addition, the Court granted Defendants’ motion to strike Paragraphs 1-5, 18, 23-27, 29(i)-(ix) [lines 6-14], 38-39, 68, 69(c) [line 16], 69(g) [lines 27-28], and 70 [lines 4-5]. The Court denied Defendants’ motion to strike Paragraphs 12 and 13, and ruled the motion to strike Paragraphs 63, 111, 116, 62 [lines 14-15], and 115(i),(ii),(iii),(iv),(v), was moot in light of the ruling on the demurrer to the 5^th cause of action. On May 25, 2022, the Court denied Collins’s motion for judgment on the pleadings as to the 3^rd, 4^th, and 5^th causes of action. On June 6, 2022, the Court denied Collins’s motion for judgment on the pleadings as to the 2^nd cause of action. On June 22, 2022, Plaintiff filed a revised motion for leave to amend, which made updates to the pending motion for leave to amend based on the interim rulings addressing the SAC.

Motion for Leave to Amend

“The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading or proceeding by adding or striking out the name of any party, or by correcting a mistake in the name of a party, or a mistake in any other respect; and may, upon like terms, enlarge the time for answer or demurrer. The court may likewise, in its discretion, after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading or proceeding in other particulars; and may upon like terms allow an answer to be made after the time limited by this code.” (C.C.P. 473(a)(1).)

“Trial courts are vested with the discretion to allow amendments to pleadings ‘in furtherance of justice.’ That trial courts are to liberally permit such amendments, at any stage of the proceeding, has been established policy in this state since 1901.” (Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 488-489.)

CRC Rule 3.1321(a) requires that a motion to amend must: “[i]nclude a copy of the proposed… amended pleading… [and] state what allegations in the previous pleading are proposed to be [deleted and/or added], if any, and where, by page, paragraph, and line number, the [deleted and/or additional] allegations are located…”

CRC Rule 3.1324(b) provides, as follows: “[a] separate declaration must accompany the motion and must specify: (1) The effect of the amendment; (2) Why the amendment is necessary and proper; (3) When the facts giving rise to the amended allegations were discovered; and (4) The reasons why the request for amendment was not made earlier.”

Plaintiffs’ motion complies with CRC Rule 3.1324(a). The motion includes a copy of the proposed TAC and sets forth the allegations to be added and/or deleted along with the corresponding paragraph numbers. (Notice Motion pgs. 2-6; Decl. of Kilgore 4-5, Exh. A [TAC].)

Plaintiffs’ motion also substantially complies with CRC Rule 3.1324(b). Plaintiffs submitted a separate declaration of their counsel that specifies the effect of the amendment and explains why the amendment is necessary and proper. (Decl. of Kilgore 5-6.) Plaintiffs assert the amendment is necessary as to permit Plaintiffs to assert all of the viable claims arising out of Defendants’ alleged misconduct including claims that were previously asserted by Anvis but dismissed without prejudice. (Motion, pg. 10.) Plaintiffs assert the proposed amendments arise out of the same facts as the claims alleged in the SAC and that the new breach of fiduciary duty cause of action is based on Collins’s same misconduct underlying the other causes of action. (Motion, pg. 11.) The Court notes the declaration of Plaintiffs’ counsel does not specifically address: (1) when facts giving rise to the amended allegations were discovered; and (2) the reason the request for amendment was not made earlier. However, Sarah Kelly-Kilgore (“Kilgore”) declares the following in support of the status of the case at the time the initial motion for leave to amend was filed: (1) since substituting in as counsel for Plaintiffs, Kilgore’s firm engaged in substantial motion practice; (2) attempted to meet and confer with Collins’s counsel to obtain a stipulation to file the proposed amended pleading; (3) on November 23, 2021 Plaintiffs’ counsel participated in a meet-and-confer teleconference with Collins’s counsel seeking to reach an agreement as to asserting the breach of fiduciary cause of action, among other issues; however, an agreement was not ultimately reached; (4) on learning Collins’s counsel would not stipulate to permit amendment to add the breach of fiduciary duty claim, Plaintiffs’ counsel prepared and filed the instant motion. (Decl. of Kilgore 10-12.) Taken together, the Declaration of Kilgore demonstrates that as soon as Kilgore’s firm substituted in as counsel, it sought to amend the pleadings by stipulation with Defendants, and only after those efforts proved unsuccessful, did filing the instant motion become necessary.

In opposition, Defendants argue Plaintiffs’ motion is procedurally improper for failing to comply with CRC Rule 3.1324(b). (Opposition, pgs. 7-8.) Defendants also argue they will be prejudiced if they motion is granted since: (1) they will be precluded from challenging the claims by motion to strike, demurrer, and or motion for summary judgment/adjudication based on the availability of hearing dates and the October 31, 2022 trial date; and (2) Plaintiffs’ refusal to respond to discovery relating to the claims they seek to add prejudices Defendants’ ability to challenge the claims. (Opposition, pgs. 7-9.) Separately, Defendants argue Plaintiffs’ request for leave to add a cause of action for breach of fiduciary duty should be denied given the SAC does not assert facts sufficient to support such a claim for failure to allege a fiduciary relationship. (Opposition, pgs. 9-11.) Defendants also argue Anvis’s request to be re-added as a plaintiff should be denied because it is not a proper party to any of the causes of action and/or the causes of action Anvis would seek to assert are barred or insufficiently alleged. (Opposition, pgs. 12-19.)

As a preliminary matter, as discussed above, the motion substantially complies with CRC Rule 3.1324(b); as such, the motion shall not be denied for being procedurally deficient.

The Court finds Defendants will not be substantially prejudiced by the amendment and Plaintiffs are entitled to an order granting leave to amend.

To the extent there has been any delay in moving for leave to amend, given the motion was originally filed in December 2021, Defendants had notice of Plaintiffs’ intent to amend their pleading at that time. Moreover, there is no evidence of significant delay considering Plaintiffs’ counsel substituted in as counsel at the end of April 2021, eight months prior to filing the motion, engaged in substantial motion practice, and attempted to obtain a stipulation to allow the amendment. Defendants’ arguments relating to the merits of the proposed TAC are more appropriately raised on demurrer or motion to strike the pleading. Defendants’ assertion the delay in bringing the motion will prejudice them is based entirely on the availability of hearing dates for demurrers and/or motions to strike and the statutory deadline for filing a motion for summary judgment/adjudication prior to the October 31, 2022 trial date. The Court acknowledges the trial date may need to be continued. There is no evidence suggesting a delay of trial will result in prejudice to Defendants. Notably, both sets of parties assert they have been unable to obtain necessary discovery. Defendants’ arguments in opposition do not establish Defendants will be so prejudiced by the amendment such that leave to amend should be denied.

Based on the foregoing, Plaintiffs’ motion for leave to file a TAC is granted.

Dated: July , 2022

Hon. Monica Bachner

Judge of the Superior Court

Case Number: *******3565 Hearing Date: June 9, 2022 Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

CINDY AMBUEHL, et al., vs. CHRISTINA COLLINS, et al.

Case No.: *******3565 Hearing Date: June 9, 2022

Defendant Christina Collins’s motion for judgment on the pleadings of the 2^nd cause of action is denied.

Defendant and Cross-Complainant Christina Collins (“Defendant”) moves for judgment on the pleadings as to the 2^nd (breach of contract) cause of action asserted by Plaintiffs Cindy Ambuehl (“Ambuehl” or “Plaintiff”) and Anvis, Inc. (“Anvis”) (collectively, “Plaintiffs”) in their second amended complaint (“SAC”). Defendant moves on the grounds Plaintiffs failed to allege sufficient facts to state the cause of action because the purported contract is unlawful and violates California’s public policy against restraints of trade set forth in Business & Professions Code 16600. (Notice of Motion, pgs. 1-2.)

Request for Judicial Notice

Defendant’s 5/13/22 request for judicial notice of the SAC filed in the instant case is denied, as there is no need to take judicial notice since the Court can review the records of the case at hand. (RJN, Exh. 1.)

Background

On April 7, 2020, Plaintiffs filed a complaint against Defendant and Defendant Hilton & Hyland Real Estate, Inc. (“Hilton”) alleging causes of action for (1) violation of Uniform Trade Secrets Act [against Defendant and Hilton], (2) breach of contract [against Defendant], (3) violation of Business & Professions Code 17200 [against Defendant and Hilton], (4) intentional interference with prospective business advantage (“Intentional Interference”) [against Defendant], and (5) violation of Penal Code 502(c) [against Defendant and Hilton] in connection with Defendant’s alleged misappropriation of Plaintiffs’ proprietary information while working as Ambuehl’s assistant. On December 9, 2020, Plaintiffs filed their first amended complaint (“FAC”), which added causes of action for (6) conversion, (7) concealment, and (8) defamation against Defendant only. Plaintiffs alleged Hilton is Defendant’s current employer and alleges Defendant has engaged in misconduct involving Ambuehl’s proprietary information via her position of employment with Hilton. (FAC 52, 33, 80.) On September 15, 2021, the Court granted Defendant’s special motion to strike the 8^th (defamation) cause of action as well as Paragraph 94 from the FAC.

Plaintiffs filed the operative SAC on February 14, 2022, in which the same causes of action above, excluding the stricken defamation cause of action, are asserted against Defendant. On March 15, 2022, the Court denied Defendant’s motion for summary adjudication of the 6^th (conversion) and 7^th (concealment by forgery) causes of action in the SAC. On April 15, 2022, the Court sustained Hilton’s demurrer to the 5^th cause of action without leave to amend. On May 25, 2022, the Court denied Defendant’s motion for judgment on the pleadings as to the 3^rd, 4^th, and 5^th causes of action. On May 13, 2022, Defendant filed the instant motion.

The Court notes on December 27, 2021, Plaintiffs filed a motion for leave to file an amended complaint, which sought to amend the pleading with respect to the 5^th cause of action and other causes of action, which is set for hearing on July 15, 2022. Plaintiffs’ operative SAC notes that it is made consistent with the Court’s January 25, 2022 Order on the MJOP and without prejudice to Plaintiffs’ proposed amendments at issue in their motion for leave to amend. (SAC, pg. 2, fn. 1.)

Breach of Contract (2^nd COA)

“The standard elements of a claim for breach of contract are: ‘(1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff therefrom.’” (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178.)

“Section 16600 provides that ‘Except as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.’ The exceptions are found in Business and Professions Code sections 16601 and 16602, which ‘permit broad covenants not to compete in two narrow situations: where a person sells the goodwill of a business, and where a partner agrees not to compete in anticipation of dissolution of a partnership. The latter sections reinforce the conclusion that covenants not to compete in contracts other than for sale of goodwill or dissolution of partnership are void.’ [Citation]” (Thompson v. Impaxx, Inc. (2003) 113 Cal.App.4th 1425, 1428.)

Section 16600 “does not affect limitations on an employee’s conduct or duties while employed[.]” (Techno Lite, Inc. v. Emcod, LLC (2020) 44 Cal.App.5th 462, 471.) Section 16600 “has consistently been interpreted as invalidating any employment agreement that unreasonably interferes with an employee’s ability to compete with an employer after his or her employment ends. However, the statute does not affect limitations on an employee’s conduct or duties while employed.” (Angelica Textile Servs., Inc. v. Park (2013) 220 Cal.App.4th 495, 509.)

Plaintiff’s breach of contract cause of action is based on the following allegations: (1) on June 25, 2015, Plaintiff and Defendant entered into a Personal Assistant Contract (“Agreement”) pursuant to which Plaintiffs hired Defendant as an assistant without a California real estate license; (2) Plaintiff and Defendant discussed the terms of the Agreement, which Defendant was responsible for drafting, and on the day they signed the Agreement, Defendant took the original and left Plaintiff with a copy but Defendant later destroyed the original native Word file when she deleted everything from Plaintiff’s computer on or before July 5, 2017; (3) Plaintiff performed each obligation under the terms of the Agreement, except those prevented by Defendant’s wrongful conduct; (4) Defendant breached the Agreement by: (a) using the Proprietary Information for her benefit, (b) disclosing Proprietary Information and failing to treat it as confidential, (c) soliciting the business of clients she had been introduced to via her employment with Plaintiff, (d) representing herself to Plaintiff’s clients as “the Agent,” (e) failing to notify Plaintiff of client communications, (f) usurping leads from Plaintiff, (g) failing to delete Proprietary Information and/or confidential information from her personal devices at the time of her termination, resignation, and/or instruction by Plaintiff, (h) disparaging Plaintiff, (i) failing to remit commissions to Plaintiff, and (j) failing to inform Plaintiff’s clients of Defendant’s obligations to not compete with Plaintiff; and (5) as a result of Defendant’s conduct, Plaintiff has been damaged. (SAC 16-17, 80-85.) Plaintiff alleges that the inauthentic copy of the Agreement is all that remains after Defendant’s destruction of records; however, it reflects the material terms agreed to by Plaintiff and Defendant and is attached to the SAC as Exhibit A. (SAC 18, Exh. A.)

The Court notes Plaintiffs allege, “the Agreement stated the terms set forth in paragraph 10 above,” however, no agreement terms are alleged in paragraph 10, and it appears Plaintiffs intended to refer to paragraph 27, which provides as follows: “the [Agreement]… had stated, among other things: As required by the California law, when Christina Collins’[s] affiliation with Cynthia Ambuehl terminates for any reason, Christina Collins will not, either directly or indirectly solicit on behalf of herself or any person or entity other than Cynthia Ambuehl (including but not limited to the sales agent herself) the business of any client who was introduced while under the employment of Cynthia Ambuehl.” (SAC 81, 27.)

Defendant moves for judgment on the pleadings as to the breach of contract cause of action on the grounds the Agreement is comprised of provisions that are unenforceable pursuant to Section 16600 and/or the California Labor Code, and since these provisions cannot be severed, the Agreement in its entirety is unenforceable and Plaintiff cannot state a claim for breach thereof. (Motion, pgs. 6-15.) Specifically, Defendant argues: (1) Sections 6(b), 6(f), 6(a), 7(a), 4, and 9 are unlawful restraints pursuant to Section 16600; and (2) Sections 4(a) and 4(c) are unenforceable under the Labor Code to the extent the prevent Defendant from disclosing her compensation to others.

As a preliminary matter, the argument that Sections 4(a) and 4(c) violate the Labor Code is not relevant given Plaintiff alleges Defendant was an independent contractor for Plaintiff, not her employee, and given the breach of contract cause of action does not appear to be based on Defendant’s violation of these provisions, but conduct by Defendant that breached other provisions. (SAC 31.) At the pleading stage, the allegations are taken as true.

Defendant’s motion takes issue with the following provisions of the Agreement. Section 4 provides as follows, “[Defendant] may not use for the benefit of any person or entity other than [Plaintiff], and [Defendant] may not disclose to any person or entity other than [Plaintiff], either directly or indirectly, any confidential information of [Plaintiff’s]. [Defendant] acknowledges that all information and [Plaintiff’s] method of conducting business, is a protected trade secret.”

Section 6(a) provides as follows: “[Defendant] acknowledges and agrees that [Plaintiff] is sole owner of all clients, contact information, sign-in sheets, caravans, open houses, and any and all leads generated by such engagement. This confidential information, if used by [Defendant] for personal business and otherwise during or post employment, will be subject to 100% commission to [Plaintiff].”

Section 6 of the Agreement provides as follows: “[W]hen [Defendant’s] affiliation with [Plaintiff] terminates for any reason, [Defendant] will not, either directly or indirectly solicit on behalf of herself or any person or entity other than [Plaintiff] (including but not limited to the sales agent herself) the business of any client who was introduced while under the employment of [Plaintiff].”

Section 6(b) also provides as follows: “If [Defendant] is in violation of this agreement, all commission received by [Defendant] from a client of [Plaintiff’s] will result in 100% of the commission being resigned to [Plaintiff].”

Section 6(f) provides as follows: “At no time during or post employment can [Defendant] contact any client and/or agent of mutual or competitive brokerage… to incentivize said client or agent to work with [Defendant] in lieu of [Plaintiff].”

Section 7(a) provides as follows: “In the event that one of [Plaintiff’s] clients directly contacts Defendant following her termination or resignation… [Defendant] agrees both to inform said client of the terms of this agreement, and uphold the terms of this agreement.”

Section 9 provides as follows: “[Defendant] acknowledges and agrees that she has carefully read this agreement, understands the terms and conditions of this agreement, and has knowingly, voluntarily and freely entered into and executed this agreement, the rules of which run in perpetuity from the effective date.”

For the purposes of a motion on the pleading, the Court finds the terms of the Agreement do not render it so unenforceable pursuant to Section 16600 such that Plaintiff cannot state a claim for breach thereof. First, Plaintiff alleges breaches of other terms of the agreement by such acts as destroying hard copy and electronic files containing Plaintiff’s confidential and trade secret information, which would violate Sections 1, 3 and 3 (a) of the contract. Moreover, as to the challenged provisions, both Sections 6(a) and 6(f) prohibit Defendant from certain conduct during employment as well as post-employment. Plaintiff alleges that Defendant’s breaches of the Agreement occurred both during and after her employment. As such, even if certain provisions are unenforceable pursuant to Section 16600, this is not the case for provisions addressing Defendant’s conduct during her employment. (See Techno Lite, Inc. v. Emcod, LLC (2020) 44 Cal.App.5^th 462, 471 [[Section 16600 “has consistently been interpreted as invalidating any employment agreement that unreasonably interferes with an employee’s ability to compete with an employer after his or her employment ends. [Citation.] However, the statute does not affect limitations on an employee’s conduct or duties while employed.” (emphasis original)].) “Because a motion for judgment on the pleadings is the functional equivalent of a general demurrer, like a general demurrer, a motion for judgment on the pleadings ordinarily does not lie with respect to only part of a cause of action.” (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2021), Ch. 7(I)-C at 7:295.)

Based on the foregoing, Defendant’s motion for judgment on the pleadings as to the 2^nd cause of action is denied.

Dated: June , 2022

Hon. Monica Bachner

Judge of the Superior Court

Case Number: *******3565 Hearing Date: May 25, 2022 Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

CINDY AMBUEHL, et al., vs. CHRISTINA COLLINS, et al.

Case No.: *******3565 Hearing Date: May 25, 2022

Plaintiffs’ motion to seal portions of Exhibit 3 is granted.

Defendant Christina Collins’s motion for judgment on the pleadings of the 3^rd, 4^th, and 5^th causes of action is denied.

Defendant and Cross-Complainant Christina Collins (“Defendant”) moves for judgment on the pleadings as to the 3^rd (violation of Business & Professions Code 17200), 4^th (intentional interference with prospective economic advantage), and 5^th (violation of Penal Code 502(c)) causes of action asserted by Plaintiffs Cindy Ambuehl (“Ambuehl”) and Anvis, Inc. (“Anvis”) (collectively, “Plaintiffs”) in their second amended complaint (“SAC”). Defendant moves on the grounds the causes of action on the ground Plaintiffs failed to allege facts sufficient to state the cause of action because they are preempted by the California Uniform Trade Secrets Act (“CUTSA”), seek damages that are not recoverable, and/or are not based on actionable conduct. (Notice of Motion, pgs. 1-3.)

Together with the instant motion, Defendant filed a Notice of Lodging Records Conditionally Under Seal indicating that Exhibit 3 to the Request for Judicial Notice which contains excerpts from Plaintiff’s responses to Defendant’s special interrogatories was lodged conditionally under seal and that Collins does not intend to move to seal the records. On May 11, 2022, Plaintiffs filed an application to seal the records lodged conditionally under seal indicating that the Court previously granted Plaintiffs’ application to seal the submitted materials which were filed as Exhibit CC in connection with the special motion to strike. (Application, pg. 2; 7/13/21 Ruling.) On May 18, 2022, Defendant filed a notice of non-opposition to the application to seal.

Motion to Seal

Plaintiffs move to seal limited portions of Exhibit 3 [Ambuehl’s discovery responses] attached to the Request for Judicial Notice on the grounds those portions contain confidential business information, proprietary trade secret information, and personal identifying information of non-parties. (Application, pgs. 2, 5-9.) Plaintiffs do not move to seal Exhibit 3 in its entirety, but in the manner previously ordered by the Court and in a manner as set forth in the application which attaches a redacted public version of Exhibit 3. (Decl. of Kutlay 8, Exh. 3.)

CRC Rule 2.551(a) provides, as follows: “A record must not be filed under seal without a court order. The court must not permit a record to be filed under seal based solely on the agreement or stipulation of the parties.”

CRC Rule 2.551(b)(1) provides, as follows: “A party requesting that a record be filed under seal must file a motion or an application for an order sealing the record. The motion or application must be accompanied by a memorandum and a declaration containing facts sufficient to justify the sealing.”

CRC Rule 2.550(d) provides, as follows: “The court may order that a record be filed under seal only if it expressly finds facts that establish: (1) There exists an overriding interest that overcomes the right of public access to the record; (2) The overriding interest supports sealing the record; (3) A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; (4) The proposed sealing is narrowly tailored; and (5) No less restrictive means exist to achieve the overriding interest.”

Plaintiffs sufficiently demonstrated that the information contained in Exhibit 3 amounts to trade secret and confidential business information, such that there exists an overriding interest that overcomes the right of the public access to the record; the overriding interest supports sealing the record, a substantial probability exists that the overriding interest will be prejudiced if the record is not sealed, the proposed sealing is narrowly tailored and no less restrictive means exist to achieve the overriding interest. In addition, the proposed sealing is sufficiently narrowly tailored as Plaintiffs only seek to seal specific identifying information and not the responses in their entirety.

Based on the foregoing, Plaintiffs’ motion to seal the stated portions of Exhibit 3 is granted.

Requests for Judicial Notice

Defendant’s 4/29/22 request for judicial notice of records from the instant case is denied, as there is no need to take judicial notice since the Court can review the case at hand. (RJN, Exhs. 1 and 2.) Defendant’s request for judicial notice is denied as to Exhibit 3 [Plaintiff’s responses to Defendant’s special interrogatories], Exhibit 4 [Plaintiff’s supplemental responses to Defendant’s special interrogatories], and Exhibit 5 [a trial court order in Sunpower Corporation v. Debono (Santa Clara County Superior Court Feb. 13, 2020) 2020 WL 5493856.

Defendant’s 5/18/22 request for judicial notice of the FAC filed in the instant action is denied, as there is no need to take judicial notice of records from the instant case. (RJN, Exh. 8.)

Background

On April 7, 2020, Plaintiffs filed a complaint against Defendant and Defendant Hilton & Hyland Real Estate, Inc. (“Hilton”) alleging causes of action for (1) violation of Uniform Trade Secrets Act [against Defendant and Hilton], (2) breach of contract [against Defendant], (3) violation of Business & Professions Code 17200 [against Defendant and Hilton], (4) intentional interference with prospective business advantage (“Intentional Interference”) [against Defendant], and (5) violation of Penal Code 502(c) [against Defendant and Hilton] in connection with Defendant’s alleged misappropriation of Plaintiffs’ proprietary information while working as Ambuehl’s assistant. On December 9, 2020, Plaintiffs filed their first amended complaint (“FAC”), which added causes of action for (6) conversion, (7) concealment, and (8) defamation against Defendant only. Plaintiffs alleged Hilton is Defendant’s current employer and alleges Defendant has engaged in misconduct involving Ambuehl’s proprietary information via her position of employment with Hilton. (FAC 52, 33, 80.) ON September 15, 2021, the Court granted Defendant’s special motion to strike the 8^th (defamation) cause of action as well as Paragraph 94 from the FAC.

Plaintiffs filed the operative SAC on February 14, 2022, in which the same causes of action above, excluding the stricken defamation cause of action, are asserted against Defendant. On March 15, 2022, the Court denied Defendant’s motion for summary adjudication of the 6^th (conversion) and 7^th (concealment by forgery) causes of action in the SAC. On April 15, 2022, the Court sustained Hilton’s demurrer to the 5^th cause of action without leave to amend. On April 29, 2022, Defendant filed the instant motion. The Court notes on December 27, 2021, Plaintiffs filed a motion for leave to file an amended complaint, which sought to amend the pleading with respect to the 5^th cause of action and other causes of action, which is set for hearing on July 15, 2022. Plaintiffs’ operative SAC notes that it is made consistent with the Court’s January 25, 2022 Order on the MJOP and without prejudice to Plaintiffs’ proposed amendments at issue in their motion for leave to amend. (SAC, pg. 2, fn. 1.) In the operative SAC, the 5^th cause of action is asserted by Ambuehl alone, and not by Anvis; however, Plaintiffs note they are seeking leave to assert the cause of action on behalf of both Ambuehl and Anvis and reserve rights to so amend. (SAC, pg. 26, fn. 5.)

Violation of Business & Professions Code 17200 (3^rd COA)

Business & Professions Code 17200 provides, as follows: “As used in this chapter, unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by Chapter 1 (commencing with Section 17500) of Part 3 of Division 7 of the Business and Professions Code.”

Defendant moves for judgment as to this cause of action on the grounds it is preempted by the UTSA because it is based on the same nucleus of facts as Plaintiffs’ trade secret claim. (See K.C. Multimedia, Inc. v. Bank of America Technology & Operations, Inc. (2009) 171 Cal.App.4^th 939, 956-959, 961-962 [“As with the other causes of action, appellant's statutory unfair competition claim rests squarely on its factual allegations of trade secret misappropriation. As a legal basis for its unfair competition claim, appellant asserts a violation of CUTSA. As a factual basis for its claim, appellant alleges the same conduct that gives rise to its trade secrets claim. That being so, this claim is also preempted.”](Citations Omitted)(Emphasis Added).

Plaintiffs’ unfair competition cause of action is not preempted by the CUTSA on the face of the SAC. Plaintiffs’ 3^rd cause of action is based on factual allegations that are independent of the Defendant’s alleged trade secret misappropriation, including allegations that Defendant competed against Plaintiffs, solicited Ambuehl’s clients for herself, disparaged and made false representations about Ambuehl to colleagues, competitors, and clients, introduced other agents to Ambuehl’s clients so as to conceal her involvement in transactions that would defraud Ambuehl of her rightful commissions, and falsely represented her experience, sales volume and expertise as a listing agent. (SAC 69, 87, 88, 90.) The Court finds the allegations in the operative SAC and prior pleadings do not materially contradict so as to render the allegations in support of this cause of action a sham pleading.

Defendant also argues Plaintiffs cannot allege sufficient facts to constitute the cause of action because they seek monetary damages in the form of lost revenues which are not recoverable under Sections 17200 or 17500. (Motion, pg. 16.) However, the cause of action is also based on a request for injunctive relief, which Defendant does not address in her motion. For the purposes of a motion for judgment on the pleadings, the injury is sufficiently alleged.

Based on the foregoing, Defendants’ motion for judgment on the pleadings as to the 3^rd cause of action is denied.

Intentional Interference with Prospective Economic Advantage (4^th COA)

“The elements of the tort of interference with prospective economic advantage are ‘(1) a 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) a wrongful act, apart from the interference itself, by 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.’” (Salma v. Capon (2008) 161 Cal.App.4th 1275, 1290 (Citations Omitted).)

“With respect to the third element, a plaintiff must show that the defendant engaged in an independently wrongful act. It is not necessary to prove that the defendant acted with the specific intent, or purpose, of disrupting the plaintiff’s prospective economic advantage. Instead, ‘it is sufficient for the plaintiff to plead that the defendant “[knew] that the interference is certain or substantially certain to occur as a result of his action.” ’ ‘[A]n act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.’ ‘[A]n act must be wrongful by some legal measure, rather than merely a product of an improper, but lawful, purpose or motive.’ ” (San Jose Construction, Inc. v. S.B.C.C., Inc. (2007) 155 Cal.App.4th 1528, 1544–1545.)

Defendant argues Plaintiff cannot allege sufficient facts to support her Intentional Interference cause of action because, like the 3^rd cause of action, it is also preempted by the CUTSA given Plaintiffs’ allegations of Defendant’s interference are based on her misappropriation of Ambuehl’s confidential client contact information, which is the basis of the trade secret misappropriation cause of action. (Motion, pgs. 16-17.)

Plaintiffs’ Intentional Interference cause of action is not preempted by the CUTSA on the face of the SAC. The cause of action is not based on Defendant misappropriating Ambuehl’s client lists (which Ambuehl has alleged constitute trade secrets); rather, it is based on Defendant thereafter disparaging Ambuehl to her former clients. (SAC, 100-101.) Regardless of how Defendant allegedly obtained the client names, the cause of action is based not on her obtaining them, but on her subsequent interference with Ambuehl’s prospective economic advantage. (See Angelica Textile Services, Inc. v. Park (2013) 220 Cal. App. 4^th 495, 507 [non-UTSA claims not displaces as each had a “basis independent of any misappropriation of a trade secret.”].)

Based on the foregoing, Defendant’s motion for judgment on the pleadings as to the 4^th cause of action is denied.

Violation of Cal. Penal Code 502(c)(5^th COA)

The Comprehensive Computer Data Access and Fraud Act (“CDAFA”) codified in California Penal Code 502 provides that any person who commits the following acts is guilty of a public offence: “(1) Knowingly accesses and without permission… uses any data, computer, computer system, or computer network in order to… wrongfully control or obtain money, property, or data; [or] (2) Knowingly accesses and without permission takes, copies, or makes use of any data from a computer, computer system, or computer network, or takes or copies any supporting documentation, whether existing or residing internal or external to a computer, computer system, or computer network.” (Penal Code 502(c)(1)(B), 502(c)(2))

The CDAFA makes civil remedies available to any person who suffers damage or loss by reason of the commission of certain computer-related offenses. (Penal Code 502(c), (e)(1).)

In a civil cause of action for violation of the CDAFA, a plaintiff must prove the following: (1) plaintiff is the owner of the computer; (2) defendant knowingly accessed and without permission used plaintiff’s data or computer in order to wrongfully control or obtain data and/or knowingly accessed and without permission took copies or made use of any data from a computer [Penal Code 502(c)(1)(B), 502(c)(2)]; (3) defendant’s access was without plaintiff’s permission; (4) plaintiff was harmed; and (5) defendant’s conduct was a substantial factor in causing plaintiff’s harm. (CACI 1812.) “To allege a conspiracy, a plaintiff must plead: ‘(1) formation and operation of the conspiracy and (2) damage resulting to plaintiff (3) from a wrongful act done in furtherance of the common design.’ ” (See Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App. 4^th 1150, 1173, disapproved on other grounds in Sheen v. Wells Fargo Bank, N.A. (Cal, March 7, 2022) 2022 WL664722; see IIG Wireless, Inc. v. Yi (2018) 22 Cal. App.5th 630, 652 [“To establish conspiracy, a plaintiff must allege that the defendant had knowledge of and agreed to both the objective and the course of action that resulted in the injury, that there was a wrongful act committed pursuant to that agreement, and that there was resulting damage.”])

Plaintiffs’ cause of action for violation of Penal Code 502(c) is based on allegations Defendant: (1) changed the list of passwords used to access Plaintiffs’ data and computer systems; (2) deleted months of outgoing emails shortly before resigning; (3) deleted data from Plaintiffs’ business records; (4) removed business records and iCloud files, which she had no permission to alter or remove, from Ambuehl’s computer; and (5) on July 5, 2017, despite instructions to stay away from the Agency Brentwood office, performed a new system install of the operating system on Ambuehl’s computer, without permission, permanently removing work iCloud log files and anything else that had been remaining on the computer. (SAC 44-51.)

Defendant argues the 5^th cause of action is also preempted by the CUTSA because Plaintiffs’ operative SAC seeks to plead around prior allegations that the cause of action was based on Defendant’s removal of Plaintiffs’ proprietary information (i.e., trade secrets), by alleging Defendant removed from Plaintiffs’ computer network, “data other than the Proprietary information such as sign-in sheets, listing agreements, referral sources, and other documents…” (Motion, pgs. 18-19.) Defendant asserts this allegation is a sham pleading, because the purportedly non-proprietary data is the same data that Plaintiffs previously alleged constituted their proprietary information.

Plaintiffs’ Section 502 cause of action is not preempted by the CUTSA on the face of the SAC. Plaintiffs allege sufficient conduct by Defendant independent of her alleged misappropriation of trade secrets to support the cause of action. Namely, Plaintiffs’ allegations that Defendant deleted Ambuehl’s data and disabled her computer systems are independent of allegations Defendant also misappropriated Ambuehl’s trade secrets information. The Court disagrees that the allegations in the SAC materially contradict the original pleading, and finds the allegations are not a sham pleading.

Defendant also argues Plaintiffs cannot allege sufficient facts to constitute the cause of action because Defendant’s access of the computer systems was authorized and within the course and scope of her employment, and as such, Plaintiffs cannot allege “knowing access[]… without permission” for purposes of stating a claim. However, the allegations are taken as true in a motion attacking the pleadings, and here, Plaintiffs have alleged that Defendant violated Section 502 by accessing the computer systems and destroying data after she had stopped working as Ambuehl’s assistant. (SAC 49-52.) Given the SAC includes allegations of violations of Section 502 decidedly outside the time of Defendant’s employment by Ambuehl sufficient to establish this element of the cause of action to survive the motion for judgment on the pleadings, whether alleged violations of Section 502 undertaken while she was working as Ambuehl’s assistant were authorized as within the scope of her employment is not at issue. Here, Plaintiffs have alleged Defendant knowingly accessed and without permission used Plaintiffs’ computer systems for a wrongful purpose.

Based on the foregoing, Defendant’s motion for judgment on the pleadings as to the 5^th cause of action overruled.

Dated: May , 2022

Hon. Monica Bachner

Judge of the Superior Court

Case Number: *******3565 Hearing Date: April 15, 2022 Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

CINDY AMBUEHL, et al., vs. CHRISTINA COLLINS, et al.

Case No.: *******3565 Hearing Date: April 15, 2022

Defendant Hilton & Hyland Real Estate, Inc.’s demurrer to the 5^th cause of action is sustained without leave to amend.

Defendants’ motion to strike the SAC in its entirety is denied. Defendants’ motion to strike certain allegations from the SAC is denied as to Paragraphs 12 and 13 and granted as to Paragraphs 1-5, 18, 23-27, 29(i)-(ix) [lines 6-14], 38-39, 68, 69(c) [line 16], 69(g) [lines 27-28], and 70 [lines 4-5] in the SAC. The motion to strike Paragraphs 63, 111, 116, 62 [lines 14-15], and 115(i),(ii),(iii),(iv),(v), is moot.

1. Demurrer

Defendant Hilton & Hyland Real Estate, Inc. (“Defendant”) demurs to the 5^th (violation of Penal Code 502(c)) cause of action asserted by Plaintiffs Cindy Ambuehl (“Ambuehl”) and Anvis, Inc. (“Anvis”) (collectively, “Plaintiffs”) in their first amended complaint (“FAC”). Defendant demurs on the ground that Plaintiff has failed to allege facts sufficient to state the cause of action and the allegations of conspiracy are uncertain. (Notice of Demurrer.)

Background

On April 7, 2020, Plaintiffs filed a complaint against Defendant and Defendant Christina Collins (“Collins”) alleging causes of action for (1) violation of Uniform Trade Secrets Act [against Defendant and Collins], (2) breach of contract [against Collins], (3) violation of Business & Professions Code 17200 [against Defendant and Collins], (4) intentional interference with prospective business advantage (“Intentional Interference”) [against Collins], and (5) violation of Penal Code 502(c) [against Defendant and Collins] in connection with Collins’s alleged misappropriation of Plaintiff’s proprietary information while working as Ambuehl’s assistant. Defendant filed its answer to this complaint in September 2020. On December 9, 2020, Plaintiffs filed their FAC, which added causes of action for (6) conversion, (7) concealment, and (8) defamation against Collins only. Accordingly, the FAC’s 1^st, 3^rd, 4^th, and 5^th causes of action were asserted against Defendant. Plaintiffs alleged Defendant is Collins’s current employer and alleges Collins has engaged in misconduct involving Ambuehl’s proprietary information via her position of employment with Defendant. (FAC 52, 33, 80.) On May 10, 2021, Defendant filed its answer to Plaintiffs’ FAC.

On December 17, 2021, Defendant filed a motion for judgment on the pleadings (“MJOP”) as to the 5^th cause of action. On January 25, 2022, the Court granted Defendant’s motion with 20 days leave to amend. Specifically, the Court found Plaintiffs failed to allege any factual allegations of misconduct by Defendant, instead relied on the conclusory allegation that Defendant conspired with Collins in her misconduct without sufficiently alleging conspiracy and/or agency. However, the Court found Plaintiffs established a probability of curing the defect via amendment based on Plaintiffs’ assertion they intended to allege Collins was acting as the employee and agent of Defendant in her misconduct, which took place both prior to and shortly after her June 27, 2017 resignation. (Ruling, pg. 4.)

Plaintiffs filed the operative SAC on February 14, 2022. On March 18, 2022, Defendant filed the instant demurrer and motion to strike. The Court notes on December 27, 2021, Plaintiffs filed a motion for leave to file an amended complaint, which sought to amend the pleading with respect to the 5^th cause of action and other causes of action, which is set for hearing on July 15, 2022. Plaintiffs’ operative SAC notes that it is made consistent with the Court’s January 25, 2022 Order on the MJOP and without prejudice to Plaintiffs’ proposed amendments at issue in their motion for leave to amend. (SAC, pg. 2, fn. 1.) In the operative SAC, the 5^th cause of action is asserted by Ambuehl alone, and not by Anvis; however, Plaintiffs note they are seeking leave to assert the cause of action on behalf of both Ambuehl and Anvis and reserve rights to so amend. (SAC, pg. 26, fn. 5.)

Violation of Cal. Penal Code 502] (5^th COA)

The Comprehensive Computer Data Access and Fraud Act (“CDAFA”) codified in California Penal Code 502 provides that any person who commits the following acts is guilty of a public offence: “(1) Knowingly accesses and without permission… uses any data, computer, computer system, or computer network in order to… wrongfully control or obtain money, property, or data; [or] (2) Knowingly accesses and without permission takes, copies, or makes use of any data from a computer, computer system, or computer network, or takes or copies any supporting documentation, whether existing or residing internal or external to a computer, computer system, or computer network.” (Penal Code 502(c)(1)(B), 502(c)(2))

The CDAFA makes civil remedies available to any person who suffers damage or loss by reason of the commission of certain computer-related offenses. (Penal Code 502(c), (e)(1).)

In a civil cause of action for violation of the CDAFA, a plaintiff must prove the following: (1) plaintiff is the owner of the computer; (2) defendant knowingly accessed and without permission used plaintiff’s data or computer in order to wrongfully control or obtain data and/or knowingly accessed and without permission took copies or made use of any data from a computer [Penal Code 502(c)(1)(B), 502(c)(2)]; (3) defendant’s access was without plaintiff’s permission; (4) plaintiff was harmed; and (5) defendant’s conduct was a substantial factor in causing plaintiff’s harm. (CACI 1812.) “To allege a conspiracy, a plaintiff must plead: ‘(1) formation and operation of the conspiracy and (2) damage resulting to plaintiff (3) from a wrongful act done in furtherance of the common design.’ ” (See Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App. 4^th 1150, 1173, disapproved on other grounds in Sheen v. Wells Fargo Bank, N.A. (Cal, March 7, 2022) 2022 WL664722; see IIG Wireless, Inc. v. Yi (2018) 22 Cal. App.5th 630, 652 [“To establish conspiracy, a plaintiff must allege that the defendant had knowledge of and agreed to both the objective and the course of action that resulted in the injury, that there was a wrongful act committed pursuant to that agreement, and that there was resulting damage.”])

Plaintiffs’ cause of action for violation of Penal Code 502(c) is based on allegations Collins: (1) changed the list of passwords used to access Plaintiffs’ data and computer systems; (2) deleted months of outgoing emails shortly before resigning; (3) deleted data from Plaintiffs’ business records; (4) removed business records and iCloud files, which she had no permission to alter or remove, from Ambuehl’s computer; and (5) on July 5, 2017, despite instructions to stay away from the Agency Brentwood office, performed a new system install of the operating system on Ambuehl’s computer, without permission, permanently removing work iCloud log files and anything else that had been remaining on the computer. (SAC 44-51.)

Plaintiffs allege the above acts occurred in 2017, and as such, they occurred prior to when Plaintiffs allege Collins began working for Defendant in 2018, since after working for Ambuehl, Collins worked for a short time at the Agency’s Beverly Hills office before being terminated by the Agency, after which she worked for the real estate brokerage Mercer Vine, and after that, for Defendant. (SAC 60-62.) The Court notes Plaintiffs specifically allege that, “[s]ince 2018, Collins has worked for and been an agent of [Defendant] and, on information and belief, Collins has used [Defendant’s] computer network and systems to access Plaintiffs’ proprietary information.” (SAC 62.) The Court also notes Plaintiffs’ allegations that Collins improperly accessed Ambuehl’s computer systems involve Collins access in 2017 and prior; allegations that Collins thereafter continued to use data and/or information she had previously obtained via her improper access are distinguishable from allegations of again accessing Ambuehl’s computer systems or data. Plaintiffs allege, on information and belief, Collins and her current employer Defendant continue to have full access to files that had been stored on Ambuehl’s computer including her private sales history, and that Collins has used Defendant’s computer network to “access” Plaintiffs’ proprietary information. (SAC 53, 62.) Plaintiffs allege they sent a cease-and-desist letter to Defendant in March 2019; however, Defendant has taken no action to prevent Collins from using the proprietary information. (SAC 62.) Plaintiffs allege, on information and belief, prior to Collins’ employment with Defendant, Defendant, “was aware of Collins’s plan and actions to knowingly and without permission access Ambuehl’s computer and Plaintiffs’ computer systems,” and that, prior to her 2018 employment, Collins and Defendant, “entered into an agreement, cooperated, and/or conspired to knowingly and without permission access Plaintiffs’ computer systems and data for the purposes of accessing and altering the same in an effort to prevent Plaintiffs’ access to their own data and thwart Plaintiffs’ gainful business advantage.” (SAC 63.) Plaintiffs allege Defendant entered into “this agreement” cooperated, and/or conspired with Collins to benefit from her access and use of Plaintiff’s data with the intention that Collins wrongfully access and use Plaintiff’s data. (SAC 63.) Plaintiffs do not allege when Defendant and Collins entered into this alleged agreement, and whether they did so prior to Collins’s alleged misuse of Ambuehl’s computer systems in 2017.

In the context of the 5^th cause of action specifically, Ambuehl incorporates by reference allegations set forth in SAC 5, 14, 25, 27, 30, 38, 39, 43-56, and 61-64. (SAC 110.) Ambuehl further alleges as follows: (1) Collins knowingly and without permission accessed Ambuehl’s computer and Plaintiffs’ computer systems and data for the purposes of accessing and altering them to prevent Plaintiffs’ access to their own data and thwart Plaintiffs’ gainful business advantage; (2) Defendant was aware of Collins’s plan to access Ambuehl’s computer and Plaintiffs’ computer system without permission [made on information and belief]; (3) prior to Collins’s employment with Defendant, she and Defendant entered into an agreement and/or cooperated to knowingly and without permission access Plaintiffs’ computer systems and data for the purposes of accessing and altering the same in an effort to prevent Plaintiffs’ access to their own data and thwart Plaintiffs’ gainful business advantage [made on information and belief]; (4) Defendant entered into this agreement, cooperated, and/or conspired with Collins with the intention that Collins wrongfully access and use Plaintiffs’ data [made on information and belief]. (SAC 111.)

Ambuehl alleges that, in addition to wrongful acts Collins committed while serving as Ambuel’s assistant and Plaintiffs’ agent, since 2018, Collins has used and continues to use Defendant’s computer network and systems to access Plaintiffs’ electronic information such that Defendants are liable for having committed the wrongful acts set forth in Penal Code 502(c)(3),(4),(5),(6),(7). (SAC 115.) [The Court notes Plaintiffs’ use of the term “access” in this allegation is uncertain. However, taken in the context of the pleadings as whole, it appears Plaintiffs are not alleging Collins has been repeatedly hacking into Plaintiffs’ computer systems since 2018 to access electronic information, but rather that she is continuing to access the electronic proprietary information she previously obtained directly from Plaintiffs’ computers/systems in 2017.]

Ambuehl failed to allege sufficient facts to state a cause of action for violation of Penal Code 502(c) against Defendant. All allegations relating to Collins’s improper and unauthorized access and/or entry into Plaintiffs’ computer and/or computer systems involve events that occurred in 2017, prior to Collins’ employment with Defendant which Plaintiffs concede began in 2018. Ambuehl’s conclusory allegations, made on information and belief, that Defendant, prior to any employment relationship with Collins, entered into an agreement with Collins in which Defendant agreed Collins should improperly access Plaintiffs’ computer/computer systems are unsupported. (SAC 63.) Ambuehl does not allege facts in support of such conclusory allegations of an agreement to conspire. To the extent Plaintiffs assert Defendant should be held liable for Collins’s conduct in 2017 based on a theory of agency, Ambuehl has failed to allege facts suggesting Collins was acting as Defendant’s agent in 2017. Plaintiffs’ conclusory allegations of agency and conspiracy are insufficient.

The only alleged misconduct Collins carried out while she was employed by Defendant in 2018 and after is her continued “access” of proprietary information that she allegedly improperly obtained from accessing Plaintiffs’ computer/computer systems in 2017, not any new acts of improperly accessing, altering, deleting, disrupting or otherwise compromising Plaintiffs’ computer/computer systems and/or the proprietary information contained therein. (See Opposition, pgs. 10-11 [“the SAC alleges that Collins engaged in her violations of Section 502 ‘us[ing] [Defendant’s] computer network and systems” (SAC 115) and [Defendant] did not have permission to access Ambuehl’s computers and data.”].) There are no allegations that in 2018, Collins used Defendant’s computer network and systems to hack into or newly improperly access Plaintiffs’ materials. As such, Ambuehl has failed to allege facts suggesting Collins engaged in any actionable misconduct in 2018 and while employed by Defendant.

Plaintiffs argue the SAC sufficiently alleges liability against Defendant, which is responsible for the acts of its agent Collins and Defendant is liable not only for acts committed in furtherance of the agency relationship but also for acts Defendant ratified. (Opposition, pgs. 11-12.) However, as discussed above, Plaintiffs’ allegations that Collins was acting as Defendant’s agent prior to her 2018 employment, and specifically, prior to her 2017 misconduct are conclusory and insufficient to establish the existence of an agency relationship in 2017. Moreover, Plaintiffs do not even allege facts suggesting Defendant ratified Plaintiff’s actions in 2017, only the conclusory allegation that it agreed Collins would wrongfully access Plaintiffs’ data. (Opposition, pg. 12, citing SAC 62, 63, 111, 116.) Plaintiffs also argue Ambuehl’s conspiracy allegations are sufficient. (Opposition, pgs. 12-13.) However, the allegations of conspiracy are wholly conclusory and made on information and belief. Plaintiffs do not allege facts supporting the elements of conspiracy aside from legal conclusions (that Collins and Defendant agreed to engage in conduct in violation of Section 502 and that Collins engaged in conduct in furtherance of that agreement). Namely, Plaintiffs do not allege any facts suggesting Collins and Defendant would have entered into this agreement in 2017, prior to Collins’s misconduct, and that Collins’s misconduct was done pursuant to their agreement that she do so. (See Reply, pgs. 6-7.) (See Daniels v. Select Portfolio Servicing, Inc., 246 Cal. App. 4th at 1173 [affirming order granting judgment on the pleadings as to claim for conspiracy to defraud where “Critically, appellants do not allege that respondents agreed to defraud plaintiffs before the alleged misrepresentations were made”].)

Moreover, Ambuehl cannot cure the defect via amendment since the actionable misconduct occurred in 2017, and not while Collins was employed by Defendant. As discussed above, Ambuehl’s allegations that Collins’ continued use of Plaintiffs’ proprietary information in 2018 and after amounted to actional misconduct are misplaced—there are no allegations that in 2018 Collins accessed Plaintiffs’ computers or systems, rather, she at most maintained possession of materials she had gained via her prior 2017 access of those computers and systems.

Based on the foregoing, Defendant’s demurrer to the 5^th cause of action is sustained without leave to amend.

1. Motion to Strike

Defendant and Collins (collectively, “Defendants”) move to strike all or portions of the SAC. Specifically, Defendants move to strike the SAC in its entirety on the grounds it is not drawn in conformity with the Court’s January 25, 2022 Order. In the alternative, Defendants move to strike the following portions of the SAC on the grounds they are not drawn in conformity with the Court’s Order; (1) Footnotes 1-6; and (2) Paragraphs 1-5, 12-13, 18, 23-27, 29, 38-39, 68, 69(c) [line 16], 69(g) [lines 27-28], and 70. Defendants further move to strike the following from the SAC on the grounds that they are irrelevant and do not support a claim for violation of Penal Code 502(c): (1) Paragraphs 63, 111, 116, 62 [lines 14-15], and 115(i),(ii),(iii),(iv),(v). (Notice of Motion, pgs. 1-7.)

Motion to Strike

C.C.P. 436 provides that the Court may, upon a motion made pursuant to C.C.P. 435, or at any time within its discretion and upon terms it deems proper, “strike out any irrelevant, false, or improper matter inserted in any pleading” and/or “strike out all or part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.”

Defendants argue the SACC exceeds the scope of the leave to amend granted by the Court in its January 25, 2022 ruling given the MJOP was made as to the 5^th cause of action, and the Court’s leave to amend was accordingly limited to the 5^th cause of action. Defendants argue (1) the SAC should be struck entirely, or, in the alternative (2) certain allegations that do not involve the 5^th cause of action should be struck improperly drawn, and/or (3) certain allegations that do not support a claim for violation of Penal Code 502(c) against Defendant should be struck as irrelevant.

In light of the Court’s ruling on Defendant’s demurrer to the 5^th cause of action, Defendants’ motion to strike Paragraphs 63, 111, 116, 62 [lines 14-15], and 115(i),(ii),(iii),(iv),(v), on the grounds they fail to support a claim for violation of Penal Code 503(c) (5^th COA) against Defendant is moot.

The Court declines to strike the SAC in its entirety.

After a review of the allegations Defendants assert were improperly beyond the scope of leave to amend, the Court finds Defendants are entitled to an order striking Footnotes 1-6 and Paragraphs that set forth new allegations that are not supporting the 5^th cause of action, namely, Paragraphs 1-5, 18, 23-27, 29(i)-(ix) [lines 6-14], 38-39, 68, 69(c) [line 16], 69(g) [lines 27-28], and 70 [lines 4-5]. The Court granted Plaintiffs leave to amend with respect to the 5^th cause of action as asserted against Defendant, and the insertion of these allegations exceeds the scope of leave granted by the Court. In opposition, Plaintiffs assert new factual allegations were not added; rather, many allegations had already been alleged and “are more precisely stated” in the SAC with limited exceptions found in Paragraphs 18 and 27 that contain “substantive amendments that correct certain facts previously alleged.” (Opposition, pgs. 5, 11-14.) However, even in making this argument Plaintiffs concede the SAC makes additional factual allegations, including allegations of information discovered since filing the FAC. (Opposition, pg. 13, citing SAC 29.) The Court did not grant Plaintiffs leave to amend allegations to “more precisely” set forth the allegations in the FAC and Plaintiffs concede this is the effect of their SAC. Plaintiffs have already moved for leave to amend their pleading, to the extent Plaintiffs are entitled to allege additional facts and/or more precisely set forth previous allegations, the Court will so determine in ruling on the amendment motion.

However, the Court declines to strike Paragraphs 12 and 13 from the SAC, as these paragraphs are substantively equivalent to Paragraphs 20 and 21 in the FAC.

Based on the foregoing, Defendants’ motion to strike the SAC in its entirety is denied. The motion to strike Paragraphs 12 and 13 is denied. The motion is granted as to Paragraphs 1-5, 18, 23-27, 29(i)-(ix) [lines 6-14], 38-39, 68, 69(c) [line 16], 69(g) [lines 27-28], and 70 [lines 4-5] in the SAC. The motion to strike Paragraphs 63, 111, 116, 62 [lines 14-15], and 115(i),(ii),(iii),(iv),(v), is moot.

Dated: March , 2022

Hon. Monica Bachner

Judge of the Superior Court

Case Number: *******3565 Hearing Date: March 15, 2022 Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

CINDY AMBUEHL, et al., vs. CHRISTINA COLLINS, et al.

Case No.: *******3565 Hearing Date: March 15, 2022

Plaintiffs’ motion to seal Exhibit 17 is granted.

Defendant and Cross-Complainant Christina Collins’s motion for summary adjudication of the 8^th and 5^th causes of action in her first amended cross-complaint is denied. Collins’s motion for summary adjudication of the 6^th and 7^th causes of action in the second amended complaint of Plaintiffs is denied.

Defendant and Cross-Complainant Christina Collins (“Collins”) moves for summary adjudication on two of the pleadings in this action. First, Collins moves for summary adjudication of her 8^th (failure to permit inspection or copying of payroll records in violation of Labor Code 226(c)) [Issues Nos. 1, 2] and 5^th (Violation of Labor Code 203) [Issues Nos. 3, 4] causes of action asserted in her April 29, 2021 first amended cross-complaint (“FACC”) against Plaintiffs and Cross-Defendants Cindy Ambuehl (“Ambuehl”) and Anvis, Inc. (“Anvis”) (collectively, “Plaintiffs”). Second, Collins moves for summary adjudication of the 6^th (conversion) [Issues Nos. 5, 6] and 7^th (concealment by forgery) [Issues Nos. 7, 8] causes of action of asserted by Ambuehl in Plaintiffs’ operative second amended complaint (“SAC”) filed on February 14, 2022. [The Court notes the instant motion was filed prior to the operative SAC; however, the SAC purportedly only amended the 5^th (violation of Penal Code 502(c)) cause of action as to nonmoving Defendant Hilton & Hyland Real Estate, Inc. (“Hilton”), which had moved for judgment on the pleadings as to that cause of action and as such, the instant motion applies to the operative SAC.]

Together with the instant motion, Collins filed a Notice of Lodging Records Conditionally Under Seal indicating that Exhibits 1, 2, 7, and 17 to the December 23, 2021 Declaration of Kenneth J. Zielinski (“Zielinski”) were lodged conditionally under seal and that Collins does not intend to move to seal the records.

At the hearing the Court took under submission the issue of sealing and continued the hearing on the MSA to March 15, 2022.

Evidentiary Objections

Plaintiffs’ 2/22/22 evidentiary objections to the Declaration of Collins are overruled as to Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, and 11.

Plaintiffs’ 2/22/22 evidentiary objections to the Declaration of Zielinski are overruled as to Nos. 12, 13, 14, 15, 16, 17, 18, 19, 20.

Collins’s 3/3/22 evidentiary objections to the Declaration of Ambuehl are overruled as to Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 23, 24, 25, 26, 27, 29, 30, 31, 32, 33, 35, 36, 37, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50 (except as to the checks from Anvis’s account, as to which the objection is sustained), and sustained as to Nos. 22 (as to “I am informed and believe… license” otherwise overruled), 28 (only as to “I assumed… any files” and “but he was unable… wiped from the computer” otherwise overruled), 34 (only as to, “she told me that… files,” to the extent it is submitted for the truth of the matter asserted, and as to “Mr. Nguyen informed me that Ms. Collins had instructed him… before she left” otherwise overruled), 38, 39, 40, and 52. (Decl. of Ambuehl 66, 32, 38, 41, 42, 43, 44, 67.)

Collins’s 3/3/22 evidentiary objections to the Declaration of Steven Kaller (“Kaller”) are overruled as to Nos. 53, 54, 55, and 56

Collins’s 3/3/22 evidentiary objections to the Declaration of Sarah Kelly-Kilgore (“Kilgore”) are overruled as to Nos. 57 and 58.

The Court is in possession of Collins’s 3/4/22 objection to the Plaintiffs’ Response Separate Statement as improperly disputing facts that are not disputable and listing additional facts that are not material or not supported by admissible evidence. The Court considers this objection; however, there are no evidentiary objections to rule on given the Response Separate Statement is not evidence.

Plaintiffs’ 3/4/22 evidentiary objections to the Reply Declarations of Brian Sinclair (“Sinclair”) and of Mechel Roberts (“Roberts”) and the Notice of Errata for Exhibit 8 in their entirety are overruled as to No. 1. Plaintiff’s objection to the Reply Declaration of Sinclair is overruled as to No. 2, 3, 4, 5, and 7. While new evidence is not permitted on reply, the Court finds the submitted evidence responds to issues raised for the first time in Plaintiffs’ opposition.

Motion to Seal

Plaintiffs move to seal Exhibit 17 [Copy of portion of document reflecting Ambuehl’s sale of a property located at 1135 Rivas Canyon Road, Los Angeles, CA 90272, which closed on June 16, 2017, among other information] attached to the December 23, 2021 Declaration of Zielinski on the grounds Exhibit 17 contains confidential business information and proprietary trade secret information. (Notice of Motion, pg. 2; Decl. of Kutay 11, Exh. 17.) Plaintiffs do not move to seal Exhibits 1, 2, or 7.

Collins’s 2/23/22 evidentiary objections to the Declaration of Claire-Lise Kutlay (“Kutlay”) are overruled as to Nos. 1 and 2.

CRC Rule 2.551(a) provides, as follows: “A record must not be filed under seal without a court order. The court must not permit a record to be filed under seal based solely on the agreement or stipulation of the parties.”

CRC Rule 2.551(b)(1) provides, as follows: “A party requesting that a record be filed under seal must file a motion or an application for an order sealing the record. The motion or application must be accompanied by a memorandum and a declaration containing facts sufficient to justify the sealing.”

The Court notes that Plaintiffs’ motion is untimely under CRC Rules 2.551(b)(3)(A)-(B). Collins filed her Notice of Lodging Exhibits Under Seal on December 23, 2021, and as such, the 10-day deadline for Plaintiffs to file their motion to seal was Monday, January 3, 2022. However, Plaintiffs’ motion was filed three days later, on January 6, 2022. In light of the issues discussed in the motion and the declaration of Clair-Lis Kutlay in support thereof, including COVID-19 related disruptions, the Court in its discretion elects to consider the motion to seal notwithstanding its untimeliness.

CRC Rule 2.550(d) provides, as follows: “The court may order that a record be filed under seal only if it expressly finds facts that establish: (1) There exists an overriding interest that overcomes the right of public access to the record; (2) The overriding interest supports sealing the record; (3) A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; (4) The proposed sealing is narrowly tailored; and (5) No less restrictive means exist to achieve the overriding interest.”

Plaintiffs sufficiently demonstrated that the information contained in Exhibit 17 amounts to trade secret and confidential business information, such that there exists an overriding interest that overcomes the right of the public access to the record; the overriding interest supports sealing the record, a substantial probability exists that the overriding interest will be prejudiced if the record is not sealed, the proposed sealing is narrowly tailored and no less restrictive means exist to achieve the overriding interest. Specifically, Kutlay declared the information in Exhibit 17 constitutes Plaintiffs’ trade secrets including their property transaction history information which is defined as Trade Secret No. 5 in the First Amended Trade Secret Identification and Second Amended Trade Secret Identification. (Decl. of Kutlay 6, 7.) Plaintiffs assert their overriding interests will be prejudiced if Exhibit 17 is not sealed because public access to such information would risk its trade secret status and would harm Plaintiffs’ competitive marketplace standing. (Motion, pgs. 6-7.)

The proposed sealing is sufficiently narrowly tailored as it is a single-page document with very limited information, and Plaintiffs do not seek to seal the corresponding fact in Collins’s Separate Statement of Facts and/or the Declaration of Kutay indicating the address of the property and its closing date. In addition, maintaining this information under seal is the least restrictive means to protect Ambuehl’s trade secrets relating to her aggregate transaction history contained in the exhibit.

In opposition, Collins argues the motion is untimely; however, the Court finds that given the circumstances, Plaintiffs did not waive confidentiality with respect to Exhibit 17. Collins also argues because Exhibit 17 contains publicly available information, it should not be sealed, and Plaintiffs did not establish it is entitled to a sealing order. (Opposition, pgs. 3-5.) However, the Court finds Exhibit 17, a compilation of information regarding Ambuehl’s transaction history information, defined as Trade Secret No. 5, qualifies for a sealing order notwithstanding its partial reliance on publicly available information from different sources. (Reply, pg. 4.)

Based on the foregoing, Plaintiffs’ motion to seal Exhibit 17 is granted.

Background

On April 7, 2020, Plaintiffs filed a complaint alleging causes of action for (1) violation of Uniform Trade Secrets Act, (2) breach of contract, (3) violation of Business & Professions Code 17200, (4) intentional interference with prospective business advantage (“Intentional Interference”), and (5) violation of Penal Code 502(c) against Collins and Hilton (collectively, “Defendants”), Collins’s current employer, in connection with Collins’s alleged misappropriation of Ambuehl’s proprietary information while working as Ambuehl’s assistant. On December 9, 2020, Plaintiffs filed their first amended complaint (“FAC”), which added causes of action for (6) conversion, (7) concealment, and (8) defamation.

On October 1, 2020, Collins filed her cross-complaint alleging causes of action for Labor Code violations, defamation, and related causes of action, and on April 29, 2021, she filed her FACC, in which she added a cause of action for violations of Labor Code 2698 et seq., the California Private Attorneys General act of 2004 (“PAGA”). On January 25, 2022, the Court granted Hilton’s motion for judgment on the pleadings (“MJOP”) of the 5^th (violation of penal code 502(c)) cause of action with 20 days leave to amend. On February 14, 2022, Plaintiffs filed their operative SAC. Prior to the Court’s ruling on the MJOP, on December 27, 2021, Plaintiffs filed a motion for leave to file a second amended complaint, which is still set for hearing on May 18, 2022, and in light of the SAC, would instead involve the filing of a proposed third amended complaint (“TAC”). Collins filed the instant motion on December 23, 2021.

Procedural Issues

Plaintiffs argue Collins failed to provide 75 days’ notice for the motion in violation of C.C.P. 437c(a)(2). (Opposition, pg. 12, citing Decl. of Kilgore 40, Exh. 31.) The Court finds the notice was sufficient.

Request for Continuance

C.C.P. 437c(h) provides, as follows: “If it appears from the affidavits submitted in opposition to a motion for… summary adjudication… that facts essential to justify opposition may exist but cannot, for reasons stated, be presented, the court shall deny the motion, order a continuance to permit affidavits to be obtained or discovery to be had, or make any other order as may be just. The application to continue the motion to obtain necessary discovery may also be made by ex parte motion at any time on or before the date the opposition response to the motion is due.”

Plaintiffs request the Court either deny the motion or continue the hearing until September 30, 2022, which will permit Plaintiffs sufficient time to obtain resolution of the pending discovery disputes and obtain important evidence needed to oppose the motion. (Opposition, pgs. 12-13.)

Plaintiffs submitted the Declaration of Kilgore in support of their request for a continuance. The declaration does not show that facts essential to justify the opposition may exist but cannot, for reasons stated, be presented. Kilgore declares that additional discovery is necessary to oppose the instant motion including documents requested that would enable Plaintiffs to cross-examine Collins during her deposition. (Decl. of Kilgore 6.) Kilgore describes the history of the discovery dispute, including that a discovery referee was appointed to resolve issues; however, Kilgore anticipates any ruling on those issues pursuant to which Collins would be required to produce documents is at least one month away. (Decl. of Kilgore 6-39.)

An opposing party’s declaration in support of a request for continuance should show the following: (1) facts establishing a likelihood that controverting evidence may exist and why the information sought is essential to opposing the motion; (2) the specific reasons why such evidence cannot be presented at the present time; (3) an estimate of the time necessary to obtain such evidence; and (4) the specific steps or procedures the opposing party intends to utilize to obtain such evidence. (Weil & Brown, California Practice Guide, Civil Procedure Before Trial 10:207.15.)

Kilgore’s declaration does not set forth what facts establishing a likelihood that controverting evidence may exist and why the information sought is essential to opposing the instant motion. Rather, Kilgore’s declaration sets forth a general assertion that sufficient documents have not been turned over and Plaintiffs have not conducted the deposition of Collins, without addressing what evidence in the documents or deposition is essential to opposing the motion. As such, Plaintiffs have not met the requirements of C.C.P. 437c(h).

Based on the foregoing, Plaintiffs’ request for a continuance to conduct discovery pursuant to C.C.P. 437c(h) is denied.

1. Collins’s FACC

Failure to Permit Inspection or Copying of Payroll Records – Violation of Labor Code 226 (8^th COA) [Issue Nos. 1, 2]

Labor Code 226(c) provides as follows: “An employer who receives a written or oral request to inspect or receive a copy of records pursuant to [Section 226(b)] pertaining to a current or former employee shall comply with the request as soon as practicable, but no later than 21 calendar days from the date of the request… Impossibility of performance, not caused by or a result of a violation of law, shall be an affirmative defense for an employer in any action alleging a violation of this subdivision…”

Labor Code 226(b) provides that employers required by this code to keep the information required by Section 226(a), “shall afford current and former employees the right to inspect or receive a copy of records pertaining to their employment, upon reasonable request to the employer…”

Labor Code 226(c) provides that, “Impossibility of performance, not caused by or a result of a violation of law, shall be an affirmative defense for an employer in any action alleging a violation of this subdivision.”

Labor Code 226(f) provides as follows: “A failure by an employer to permit a current or former employee to inspect or receive a copy of records within the time set forth in subdivision (c) entitles the current or former employee or the Labor Commissioner to recover a seven-hundred-fifty-dollar ($750) penalty from the employer.”

Labor Code 1198.5(a), 1198.5(b), and 1198.5(f) provide that “Every current and former employee… has the right to inspect and receive a copy of the personnel records that the employer maintains relating to the employee's performance or to any grievance concerning the employee…The employer shall make the contents of those personnel records available for inspection to the current or former employee, or his or her representative, at reasonable intervals and at reasonable times, but not later than 30 calendar days from the date the employer receives a written request… Upon a written request from a current or former employee…, the employer shall also provide a copy of the personnel records, at a charge not to exceed the actual cost of reproduction, not later than 30 calendar days from the date the employer receives the request… If an employer fails to permit a current or former employee… to inspect or copy personnel records within the times specified in this section… the current or former employee or the Labor Commissioner may recover a penalty of seven hundred fifty dollars ($750) from the employer.”

Collins alleges on September 3, 2020, she made a written request to Plaintiffs for copies of her payroll records and personnel files. (FACC 97.) Collins alleges that as of the date of filing the FACC, Plaintiffs have failed to permit inspection or copying of all records required and, as a result, Collins has suffered damages, entitling her to recover a $750 penalty, injunctive relief, and attorneys’ fees and costs. (FACC 98-101.)

Collins argues she is entitled to summary adjudication of this cause of action against both Anvis [Issue No. 1] and Ambuehl [Issue No. 2] because each failed to timely provide wage statements in violation of Section 226. (Motion, pgs. 6-8.)

1. Issue No. 1: Whether Anvis Failed to Provide Copies of Wage Statements in Violation of Labor Code 226

Collins submitted evidence suggesting Anvis failed to timely provide copies of wage statements in violation of Section 226. Collins submitted evidence she was Anvis’s employee from September 2016 until her employment ended in June 2017. (USSF No. 1 (“USSF” refers to undisputed facts).) Collins submitted evidence she received wage statements from Anvis from September 2016 until her employment ended. ([Disputed Separate Statement of Fact (“D-SSF”) No. 2] Collins Decl. 3; Zielinski Decl. 5, Ex. 7; FAC 25.) Collins submitted evidence that on September 1, 2020, she requested Anvis produce, within 21 days, copies of her wage statements pursuant to Section 226(b); however, Anvis provided neither copies of wage statements nor a computer-generated record accurately reflecting the information required by Section 226(a), within 21 days. ([D-SSF Nos. 3-5] Decl. of Zielinski 3-4, Exh. 4, 6.) Collins submitted evidence that wage statements responsive to her request exist. ([D-SSF No. 6] Zielinski Decl. 5-6; Ex. 7 (copies of wage statements produced by Cross-Defendant in discovery); Ex. 8, at pp. 289:20-290:15 (deposition testimony of Cross-Defendant, Cindy Ambuehl, purportedly admitting that wage statements exist).)

Based on the foregoing, Collins met their burden on summary adjudication. Therefore, the burden shifts to Plaintiffs to create a triable issue of material fact. As discussed below, Plaintiffs met their burden.

Plaintiffs submitted evidence creating a triable issue of material fact as to whether Anvis’s defense of impossibility of performance for failure to comply bars the cause of action. Specifically, Plaintiffs submitted evidence suggesting Collins’s destruction of Plaintiffs’ business records rendered Anvis’s performance impossible. (Opposition, pg. 17; [Additional Material Fact (“AMF”) Nos. 1-6, 9, 12] Decl. of Ambuehl 24, 48, 60, 25, 32-34, 48-48 [upon receipt of the records request, Plaintiffs reviewed their records but were unable to locate the requested records therein], 49; Decl. of Kaller 4-5, 7; Decl. of Kilgore 32, Exh. 27, Nos. 195, 198, 200, Exh. 6.) Plaintiffs submitted evidence Collins worked directly with Anvis’s accountant’s office, from which she received wage statements. ([AMF Nos. 2, 10, 30, 40] Decl. of Ambuehl 40, 60; Decl. of Kaller 4.) Plaintiffs submitted evidence Anvis produced some responsive records. ([AMF No. 12] Ambuehl Decl. 49; Kaller Decl. 7; Zielinksi Decl., Ex. 6.) In reply, Collins argues Anvis’s impossibility defense is meritless given Anvis did not even provide a partial response even where it is undisputed that responsive documents exist. (Reply, pg. 9, citing Decl. of Zielinksi 6, Exh. 8 at pp. 289:20-290:15; D-SSF No. 6.) However, the cited deposition testimony of Ambuehl does not support the assertion that Ambuehl admitted that all responsive wage statements existed, and as such could be turned over; she only testifies that she should have access to such records and that she believes those records were in the possession of Kaller, from whom they were requested.

Based on the foregoing, Collins’s motion for summary adjudication of Issue No. 1 is denied.

1. Issue No. 2: Whether Ambuehl Failed to Provide Copies of Wage Statements in Violation of Labor Code 226

Collins submitted evidence suggesting Ambuehl failed to timely provide copies of wage statements in violation of Section 226. Collins submitted evidence she was Ambuehl’s employee from September 2016 until her employment ended in June 2017. ([D-SSF No. 7] Collins Decl. 2; Exs. 1- 2; Declaration of Kenneth J. Zielinski (“Zielinski Decl.”) 2, 5-8; Exs. 1-2, 7, 9-10; FAC 25 (“On or about June 27, 2017, Collins resigned from [Ambuehl’s] employment. . .”).) Collins submitted evidence she received wage statements from Ambuehl from September 2016 until her employment ended. ([D-SSF No. 8] Collins Decl. 3; Zielinski Decl. 5, Ex. 7; FAC 25.) Collins submitted evidence that on September 1, 2020, she requested Ambuehl produce, within 21 days, copies of her wage statements pursuant to Section 226(b); however, Ambuehl provided neither copies of wage statements nor a computer-generated record accurately reflecting the information required by Section 226(a), within 21 days. ([D-SSF Nos. 9-11] Decl. of Zielinski 3-4, Exh. 4, 6.) Collins submitted evidence that wage statements responsive to her request exist. ([D-SSF No. 6] Zielinski Decl. 5-6; Ex. 7 (copies of wage statements produced by Cross-Defendant in discovery); Ex. 8, at pp. 289:20-290:15 (deposition testimony of Cross-Defendant, Cindy Ambuehl, purportedly admitting that wage statements exist).)

Based on the foregoing, Collins met her burden on summary adjudication. Therefore, the burden shifts to Plaintiffs to create a triable issue of material fact. As discussed below, Plaintiffs met their burden.

Plaintiffs submitted evidence creating a triable issue of fact as to whether Collins can establish the cause of action against Ambuehl. In addition to evidence suggesting Ambuehl has a defense to the cause of action based on impossibility of performance, Plaintiffs submitted evidence creating a triable issue of fact as to whether Collins was Ambuehl’s employee, and that Ambuehl was Collins’s employer, for purposes of the statute. Plaintiffs assert the evidence, including Collins’s W-2 forms and two paystubs, suggests only Anvis was Collins’s employer, and that Ambuehl acted as an agent and officer of Anvis. (Opposition, pg. 18; SSF No. 2, [AMF No. 33] Ambuehl Decl. 34; Kaller Decl. 5.) Plaintiffs also note the only evidence Collins submits in support of her assertion that Ambeuhl was also her employer is her own self-serving declaration. (Decl. of Collins 2.) Here, Plaintiffs’ evidence suggesting Ambuehl was not Collins’s employer creates a triable issue of fact as to whether Collins can establish the cause of action against Ambuehl.

Based on the foregoing, Collins’s motion for summary adjudication of Issue No. 2 is denied. Accordingly, the motion for summary adjudication of Collins’s 8^th cause of action is denied.

Violation of Labor Code 203 (9^th COA) [Issues Nos. 3, 4]

Labor Code 203 provides that, “[i]f an employer willfully fails to pay, without abatement or reduction… any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days…”

Collins alleges she is no longer employed by Plaintiffs as she resigned in Summer 2017. (FACC 69.) Collins alleges Plaintiffs failed to pay her all wages due (including but not limited to proper wages, overtime, all earned commissions, including her commission for the Rivas Property, and premium wages for non-compliant meal periods and rest breaks) within 72 hours of resignation and these wages remained due and owing for more than 30 days from date of separation from employment. (FACC 70-73.) Collins alleges Plaintiffs’ failure to pay within the required timeline was willful. (FACC 73.)

1. Issue No. 3: Whether Anvis Willfully Failed to Pay All Wages Due upon Separation of Employment in Violation of Labor Code 203

Collins submitted evidence Anvis failed to pay all wages due upon separation of employment. Collins submitted evidence Ambuehl agreed Collins would receive 5% of commissions Ambeuhl received for home closings as her own commission. ([D-SSF No. 12] Collins Decl. 5; Ex. 8 to Zielinski Decl., at pp. 294:12-16 and 296:25-297:1 [Ambuehl’s testimony that Collins’s commissions in 2016 were 5% on “most all closings… [o]r all closings” and that she would have to go back and look at that year to confirm].) It is undisputed that on June 27, 2017, Collins notified Ambuehl she was resigning her employment. (USSF No. 13.) Collins submitted evidence she has not been paid 5% commission for the sale of property located at 1135 Rivas Canyon Road, Los Angeles CA 90272 (“Rivas Property”). ([D-SSF No. 15] Decl. of Collins 5.) Collins submitted evidence that when her employment ended, she was receiving a salary of $4,000 per month plus the 5% commission and Collins asserts she worked on average more than 40 hours per week in 2017. ([D-SSF Nos. 16, 17] Decl. of Collins 7.) Collins asserts that based on her $4,000 per month salary and 40 hours per week, waiting time penalties total no less than $5,538.45. ([D-SSF No. 18] Decl. of Zielinski 13.)

The Court notes Collins’s motion is limited to arguing her entitlement to wait time penalties based on Anvis’s failure to pay her the Rivas Property commission, notwithstanding the fact the operative pleading alleges entitlement to wait time penalties for this and other types of unpaid wages, including meal break and overtime payments. Collins submits no competent evidence supporting these alternative grounds theory of recovery under the cause of action, as such, she appears to contend the cause of action is only based on failure to be paid the Rivas Property commission and possibly overtime.

Based on the foregoing, Collins met her burden on summary adjudication. Therefore, the burden shifts to Plaintiffs to create a triable issue of material fact. As discussed below, Plaintiffs met their burden.

Plaintiffs submitted evidence creating a triable issue of fact as to whether Anvis willfully failed to pay Collins all wages due upon separation of employment. Plaintiffs submitted evidence suggesting Collins was not entitled to a commission on the sale of the Rivas Property. Plaintiffs submitted evidence the only agreement the parties entered regarding Collins’s entitlement to commissions was a personal assistant contract in which Ambuehl and Anvis agreed that Anvis would pay Collins 5% of Plaintiffs’ net commissions on any real estate properties for which Collins provided assistance. ([Response to SSF (“R-SSF”) No. 12] Ambuehl Decl. 17, 19, 60; Kaller Decl. 4-5.) Plaintiffs also submitted evidence suggesting there were no remaining funds in the Rivas Property commission from which to pay Collins. ([R-SSF No. 15] Ambuehl Decl. 19, 58; Kaller Decl. 4-5; Zielinski Decl., Ex. 15. (See also [AMFs Nos. 25, 28] Ambuehl Decl. 52-55; Exs. 5-9.)

Based on the foregoing, Collins’s motion for summary adjudication of Issue No. 3 is denied.

1. Issue No. 4: Whether Ambuehl Willfully Failed to Pay All Wages Due upon Separation of Employment in Violation of Labor Code 203

Collins submitted evidence Anvis failed to pay all wages due upon separation of employment. Collins relies on essentially the same underlying evidence as in support of Issue No. 3. (Compare SSFs Nos. 12-18 and Nos. 19-25.) As with Issue No. 2, Collins met her burden on summary adjudication. Accordingly, the burden shifts to Plaintiffs. For the same reasons as discussed above, Plaintiffs met their burden. Namely, Plaintiffs submitted evidence creating a triable issue of material fact as to whether Ambuehl willfully failed to pay Collins all wages due upon Collins’s separation from employment. In addition to the evidence discussed above, Plaintiffs submitted evidence creating a triable issue as to whether Ambuehl, as opposed to only Anvis, was Collins’s employer for purposes of the statute.

Based on the foregoing, Collins’s motion for summary adjudication of Issue No. 4 is denied. Accordingly, the motion for summary adjudication of Collins’s 5^th cause of action is denied.

1. Plaintiffs’ SAC

Collins moves for summary adjudication of Plaintiffs’ 6^th (conversion) and 7^th (fraud based on concealment) causes of action on the grounds Plaintiffs cannot establish Collins forged checks from Ambuehl’s personal bank account and the claims are barred by the applicable statutes of limitations. (Motion, pg. 6.)

Conversion (6^th COA)

“‘A cause of action for conversion requires allegations of plaintiff’s ownership or right to possession of property; defendant’s wrongful act toward or disposition of the property, interfering with plaintiff’s possession; and damage to plaintiff. [Citation.] Money cannot be the subject of a cause of action for conversion unless there is a specific, identifiable sum involved, such as where an agent accepts a sum of money to be paid to another and fails to make the payment.’ [Citations]” (PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384, 395.)

The Court notes the cause of action is asserted only by Ambuehl with a footnote indicating Plaintiffs are seeking leave to amend to assert this cause of action on behalf of both Anvis and Ambuehl. (SAC, pg. 28, fn. 6.) However, the instant motion only addresses the operative pleading. To the extent the Court grants the leave requested by Plaintiffs, a cause of action brought by Anvis is not before the Court at this time and the ruling only addresses the cause of action brought by Ambuehl.

Ambuehl’s conversion cause of action is based on the following allegations: (1) on January 16, 2015, April 30, 2015, August 1, 2015, and September 30, 2016, Ambuehl possessed specific monies residing in and any unsigned checks to be issued from Anvis’s business’ bank account ending in 8407 and Ambuehl’s personal bank account ending in 9976; (2) Collins forged Ambehl’s signatures on Ambuehl’s personal and business checks totaling $12,170, without Ambuehl’s permission, and subsequently cashed them; (3) on November 4, 2020, Plaintiffs discovered the September 30, 2016 Check #2328 was filled out to and wrongfully endorsed by Collins without Plaintiffs’ authority or permission. (SAC 123-127.)

1. Issue No. 5: Whether Ambuehl Can Establish Collins Forged Checks for the Purposes of Establishing the Cause of Action

Collins submitted evidence suggesting Ambuehl cannot establish the conversion cause of action. Specifically, Collins submitted evidence supporting her assertion she did not forge any checks from Ambuehl’s personal bank account. ([D-SSF Nos. 28, 36] Collins Decl. 4; Zielinski Decl. 8 and Exs. 11-13.)

Based on the foregoing, Collins met her burden on summary adjudication. Therefore, the burden shifts to Plaintiffs to create a triable issue of material fact. As discussed below, Plaintiffs met their burden.

Plaintiffs submitted evidence creating a triable issue of fact as to whether Collins forged checks from Ambuehl’s personal bank account. Plaintiffs submitted evidence of the following: (1) neither Ambuehl nor her accountant signed nor authorized Check No. 853 made out to Collins in the amount of $3,142.50; (2) Collins had access to Ambuehl’s personal checkbook; (3) Collins publicly complained about her compensation; (4) Collins was often paid from Ambuehl’s personal bank account. ([R-SSF No. 28] Ambuehl Decl. 62-64; Kaller Decl. 6; Zielinski Decl., Ex. 13 at PLTF000284; Kilgore Decl. 2, 4, 5, 29, 30; id. at Ex.13 at No. 111; id. at Ex. 27 at Nos, 1-9.) Given the only evidence Collins submits is her declaration that she did not commit the forgery; the collective evidence submitted by Plaintiffs is sufficient to create a triable issue of material fact, given the circumstances suggest Collins may have forged the check at issue, notwithstanding her denial.

Based on the foregoing, Collins’s motion for summary adjudication of Issue No. 5 is denied.

1. Issue No. 6: Whether Ambuehl Can Establish the Cause of Action is Not Barred by the Applicable Statute of Limitations

The statute of limitations for a conversion cause of action is three years. (See AmerUS Life Ins. Co. v. Bank of America, N.A. (2006) 143 Cal.App.4th 631, 639.)

“Generally speaking, a cause of action accrues at ‘the time when the cause of action is complete with all of its elements.’ An important exception to the general rule of accrual is the ‘discovery rule,’ which postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action.” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 806 (Citations Omitted).)

“A plaintiff has reason to discover a cause of action when he or she ‘has reason at least to suspect a factual basis for its elements.’ Under the discovery rule, suspicion of one or more of the elements of a cause of action, coupled with knowledge of any remaining elements, will generally trigger the statute of limitations period.” (Id. (Citations Omitted).) “The discovery rule only delays accrual until the plaintiff has, or should have, inquiry notice of the cause of action. The discovery rule does not encourage dilatory tactics because plaintiffs are charged with presumptive knowledge of an injury if they have ‘information of circumstances to put [them] on inquiry’ or if they have ‘the opportunity to obtain knowledge from sources open to [their] investigation.’ In other words, plaintiffs are required to conduct a reasonable investigation after becoming aware of an injury, and are charged with knowledge of the information that would have been revealed by such an investigation.” (Id. at 807-808 (Citations Omitted).) “The Legislature, in codifying the discovery rule, has also required plaintiffs to pursue their claims diligently by making accrual of a cause of action contingent on when a party discovered or should have discovered that his or her injury had a wrongful cause.” (Id. at 808 (Citations Omitted).) “In order to rely on the discovery rule for delayed accrual of a cause of action, ‘[a] plaintiff whose complaint shows on its face that his claim would be barred without the benefit of the discovery rule must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.’” (Id.)

Collins submitted evidence suggesting Ambuehl’s conversion cause of action would be time-barred on the face of the pleading absent the application of a tolling doctrine. Namely, it is undisputed that the last check purportedly forged by Collins from Ambuehl’s bank account was written on July 18, 2015, and Ambuehl did not file her original complaint in the action until April 7, 2020, over three years later. (USSF Nos. 32, 22.) However, on the face of the pleading, Ambuehl alleges facts suggesting the tolling doctrine of delayed discovery applies to any statute of limitations applicable to her conversion cause of action, given Ambuehl did not discover the forged checks until November 4, 2020, and alleges she could not have discovered them until such time. (SAC 127.)

Collins has the burden on summary adjudication to submit evidence showing Ambuehl cannot establish a requisite element of the cause of action and/or that she is entitled to adjudication based on the application of a statute of limitations. The Court notes while Collins’s moving papers argue delayed discovery does not apply to the facts of this case, Collins submits no evidence in support of this assertion. (See SSFs Nos. 29-33; Motion, pgs. 11-12.) Collins argues Plaintiffs cannot establish application of the delayed discovery tolling doctrine for three reasons: (1) the delayed-discovery rule does not apply to forged checks; (2) Plaintiffs failed to allege facts supporting Ambuehl’s failure to discover checks forged from her personal account [citing FAC 121, equivalent to SAC 133]; (3) the delayed discovery rule applies only when a defendant conceals the misconduct however, Plaintiffs have failed to allege Collins concealed her wrongdoing given Plaintiffs allege Collins would cash checks the same day they were issued. (Motion, pgs. 11-12.) However, the argument the delayed discovery rule does not apply to forged checks fails to take into account that the rule does apply where a defendant conceals his or her wrongdoing, as Plaintiffs allege here. (Opposition, pg. 21, fn. 13.) Collins makes the conclusory argument that the act of cashing Check No. 853 in July 2015 demonstrates she did not conceal wrongdoing. (Reply, pg. 13.) However, this does not consider the allegations and evidence that during that time, Collins was the trusted assistant of Ambuehl, and as such, cashing an improper check in a context in which legitimate checks were often issued to and cashed by Collins creates at least a triable issue as to whether concealment occurred for the purposes of the application of the tolling doctrine. Second, the argument that Ambuehl failed to allege delayed discovery as to her personal account relies on allegations drawn from the fraud cause of action, not the conversion cause of action. Moreover, even in the context of the fraud cause of action, this allegation does not limit Ambuehl’s alleged discovery delay to her business account only, given she alleges she did not have an opportunity or reason to discover any of the checks allegedly forged by Collins. Finally, here Plaintiffs have alleged that Collins concealed the misconduct and Collins submits no evidence supporting an assertion she did not conceal the fact she allegedly forged checks. Rather, she only submits evidence that she did not forge the checks, and argues that cashing of the checks themselves is demonstrative of a lack of concealment. However, the issue is not Ambeuhl’s awareness that funds were withdrawn from here account, rather that funds were improperly withdrawn from her account by way of forged checks, which Ambuehl alleges she did not discover until 2020. The Court finds Collins has not met her burden on summary adjudication of this issue.

Based on the foregoing, Collins’s motion for summary adjudication of Issue No. 6 is denied. Accordingly, the motion for summary adjudication of Ambuehl’s 6^th cause of action is denied.

Concealment (7^th COA)

The elements of fraud are: “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Charnay v. Cobert (2006) 145 Cal.App.4th 170, 184.)

Ambuehl’s concealment cause of action is based on the following allegations: (1) Collins concealed her forgery of Ambuehl’s signature on Ambuehl’s business and personal checks; (2) on November 4, 2020, Plaintiffs first discovered the September 30, 2016 Check # 2328 was filled out and wrongfully endorsed by Collins to herself without Plaintiffs’ permission; (3) during her work for Plaintiffs in 2015 and 2016, Collins intentionally failed to disclose she had written checks payable to herself in the amounts of $510, $960, $2,700, and $8,000; (4) Ambuehl could not have reasonably discovered, and did not know of the concealed fact because she never saw the forged check and seeing a check written to Collins on her business account would not have necessarily raised alarm, since Plaintiffs regularly paid Collins from this account; (5) Collins intended to deceive Plaintiffs by concealing her forgery of Ambuehl’s name on the checks, knowing Plaintiffs would not be alarmed by the relatively small dollar amount of the check written from the business account; (6) had the forgery of Ambuehl’s signatures been disclosed, Ambuehl would have cancelled the check, terminated Collins, and reported the fraud to the police; (7) given Collins’s practice of cashing checks on the date of issuance and given bank statements do not contain images of checks (which must be specifically requested) or identify the payee, and given the relatively small dollar amount of the payments, the entries reflecting the checks went unnoticed; (8) Collins’s concealment was a substantial factor in causing Ambuehl’s harm in the amount of at least $12,170, plus interest. (SAC 130-138.)

1. Issue No. 7: Whether Ambuehl Can Establish Collins Forged Checks for the Purposes of Establishing the Cause of Action

Collins submitted evidence suggesting Ambuehl cannot establish her concealment cause of action. Specifically, Collins submitted evidence supporting her assertion she did not forge any checks from Ambuehl’s personal bank account, which is the concealed act underlying the cause of action. Collins relies on essentially the same underlying evidence as in support of Issue No. 5. (Compare SSFs Nos. 26-28 and Nos. 34-36.) As with Issue No. 5, Collins met her burden on summary adjudication. Accordingly, the burden shifts to Plaintiffs. For the same reasons as discussed above, Plaintiffs met their burden. Namely, Plaintiffs submitted evidence creating a triable issue of material fact as to whether Collins forged checks from Ambuehl’s personal bank account. ([R-SSF No. 28] Ambuehl Decl. 62-64; Kaller Decl. 6; Zielinski Decl., Ex. 13 at PLTF000284; Kilgore Decl. 2, 4, 5, 29, 30; id. at Ex.13 at No. 111; id. at Ex. 27 at Nos, 1-9.)

Based on the foregoing, Collins’s motion for summary adjudication of Issue No. 7 is denied.

1. Issue No. 8: Whether Ambuehl Can Establish the Cause of Action is Not Barred by the Applicable Statute of Limitations

A cause of action for “relief on the ground of fraud or mistake” is subject to a three-year statute of limitations and “is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.” (C.C.P. 338(d).)

For the same reasons as discussed above in connection with Issue No. 6, addressing whether the conversion cause of action is time-barred by the applicable statute of limitations, the Court finds Collins did not meet her burden on summary adjudication.

Based on the foregoing, Collins’s motion for summary adjudication of Issue No. 8 is denied. Accordingly, the motion for summary adjudication of the 7^th cause of action is denied.

Dated: March , 2022

Hon. Monica Bachner

Judge of the Superior Court

Case Number: *******3565 Hearing Date: March 8, 2022 Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

CINDY AMBUEHL, et al., vs. CHRISTINA COLLINS, et al.

Case No.: *******3565 Hearing Date: March 8, 2022

Plaintiffs’ motion to seal Exhibit 17 is granted.

Defendant and Cross-Complainant Christina Collins’s motion for summary adjudication is continued to March 15, 2022.

Defendant and Cross-Complainant Christina Collins (“Collins”) moves for summary adjudication on two of the pleadings in this action. First, Collins moves for summary adjudication of her 8^th (failure to permit inspection or copying of payroll records in violation of Labor Code 226(c)) [Issues Nos. 1, 2] and 5^th (failure to pay all wages due upon separation of employment in violation of Labor Code 203) [Issues Nos. 3, 4] causes of action asserted in her April 29, 2021 first amended cross-complaint (“FACC”) against Plaintiffs and Cross-Defendants Cindy Ambuehl (“Ambuehl”) and Anvis, Inc. (“Anvis”) (collectively, “Plaintiffs”). Second, Collins moves for summary adjudication of the 6^th (conversion) [Issues Nos. 5, 6] and 7^th (concealment by forgery) [Issues Nos. 7, 8] causes of action of asserted by Ambuehl in Plaintiffs’ operative second amended complaint (“SAC”) filed on February 14, 2022. [The Court notes the instant motion was filed prior to the operative SAC; however, the SAC purportedly only amended the 5^th (violation of Penal Code 502(c)) cause of action as to nonmoving Defendant Hilton & Hyland Real Estate, Inc. (“Hilton”), which had moved for judgment on the pleadings as to that cause of action.]

Together with the instant motion, Collins filed a Notice of Lodging Records Conditionally Under Seal indicating that Exhibits 1, 2, 7, and 17 to the December 23, 2021 Declaration of Kenneth J. Zielinski (“Zielinski”) were lodged conditionally under seal and that Collins does not intend to move to seal the records. Plaintiffs filed a Motion to Permanently Seal Records Lodged with Collins’s Motion for Summary Adjudication on January 6, 2022.

Motion to Seal

Plaintiffs move to seal Exhibit 17 [Copy of portion of document reflecting Ambuehl’s sale of a property located at 1135 Rivas Canyon Road, Los Angeles, CA 90272, which closed on June 16, 2017, among other information] attached to the December 23, 2021 Declaration of Zielinski on the grounds Exhibit 17 contains confidential business information and proprietary trade secret information. (Notice of Motion, pg. 2; Decl. of Kutay 11, Exh. 17.) Plaintiffs do not move to seal Exhibits 1, 2, or 7.

Collins’s 2/23/22 evidentiary objections to the Declaration of Claire-Lise Kutlay (“Kutlay”) are overruled as to Nos. 1 and 2.

CRC Rule 2.551(a) provides, as follows: “A record must not be filed under seal without a court order. The court must not permit a record to be filed under seal based solely on the agreement or stipulation of the parties.”

CRC Rule 2.551(b)(1) provides, as follows: “A party requesting that a record be filed under seal must file a motion or an application for an order sealing the record. The motion or application must be accompanied by a memorandum and a declaration containing facts sufficient to justify the sealing.”

The Court notes that Plaintiffs’ motion is untimely under CRC Rules 2.551(b)(3)(A)-(B). Collins filed her Notice of Lodging Exhibits Under Seal on December 23, 2021, and as such, the 10-day deadline for Plaintiffs to file their motion to seal was Monday, January 3, 2022. However, Plaintiffs’ motion was filed three days later, on January 6, 2022. In light of the issues discussed in the motion and the declaration of Clair-Lis Kutlay in support thereof, including COVID-19 related disruptions, the Court in its discretion elects to consider the motion to seal notwithstanding its untimeliness.

CRC Rule 2.550(d) provides, as follows: “The court may order that a record be filed under seal only if it expressly finds facts that establish: (1) There exists an overriding interest that overcomes the right of public access to the record; (2) The overriding interest supports sealing the record; (3) A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; (4) The proposed sealing is narrowly tailored; and (5) No less restrictive means exist to achieve the overriding interest.”

Plaintiffs sufficiently demonstrated that the information contained in Exhibit 17 amounts to trade secret and confidential business information, such that there exists an overriding interest that overcomes the right of the public access to the record; the overriding interest supports sealing the record, a substantial probability exists that the overriding interest will be prejudiced if the record is not sealed, the proposed sealing is narrowly tailored and no less restrictive means exist to achieve the overriding interest. Specifically, Kutlay declared the information in Exhibit 17 constitutes Plaintiffs’ trade secrets including their property transaction history information which is defined as Trade Secret No. 5 in the First Amended Trade Secret Identification and Second Amended Trade Secret Identification. (Decl. of Kutlay 6, 7.) Plaintiffs assert their overriding interests will be prejudiced if Exhibit 17 is not sealed because public access to such information would risk its trade secret status and would harm Plaintiffs’ competitive marketplace standing. (Motion, pgs. 6-7.)

The proposed sealing is sufficiently narrowly tailored as it is a single-page document with very limited information, and Plaintiffs do not seek to seal the corresponding fact in Collins’s Separate Statement of Facts and/or the Declaration of Kutay indicating the address of the property and its closing date. In addition, maintaining this information under seal is the least restrictive means to protect Ambuehl’s trade secrets relating to her aggregate transaction history contained in the exhibit.

In opposition, Collins argues the motion is untimely; however, the Court finds that given the circumstances, Plaintiffs did not waive confidentiality with respect to Exhibit 17. Collins also argues because Exhibit 17 contains publicly available information, it should not be sealed, and Plaintiffs did not establish it is entitled to a sealing order. (Opposition, pgs. 3-5.) However, the Court finds Exhibit 17, a compilation of information regarding Ambuehl’s transaction history information, defined as Trade Secret No. 5, qualifies for a sealing order notwithstanding its partial reliance on publicly available information from different sources. (Reply, pg. 4.)

Based on the foregoing, Plaintiffs’ application to seal is granted.

The Court, on its own motion, continues Collins’s motion for summary adjudication to March 15, 2022.

Dated: March , 2022

Hon. Monica Bachner

Judge of the Superior Court

Case Number: *******3565 Hearing Date: January 25, 2022 Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

CINDY AMBUEHL, et al., vs. CHRISTINA COLLINS, et al.

Case No.: *******3565 Hearing Date: January 25, 2022

Defendant Hilton & Hyland Real Estate, Inc.’s motion for judgment on the pleadings of the 5^th cause of action is granted with leave to amend within 20 days.

Defendant Hilton & Hyland Real Estate, Inc. (“Defendant”) moves for judgment on the pleadings as to the 5^th (violation of Penal Code 502(c)) cause of action asserted by Plaintiffs Cindy Ambuehl (“Ambuehl”) and Anvis, Inc. (“Anvis”) (collectively, “Plaintiffs”) in their first amended complaint (“FAC”). Defendant moves on the grounds that Plaintiffs fail to state a claim for relief as against Defendant given the only wrongful conduct alleged to constitute violations of Penal Code 502(c) were acts of Defendant Christina Collins (“Collins”) while she was working for a different brokerage, The Agency, not Defendant. (Notice of Motion, pgs. 1-2; C.C.P. 438(c)(1)(B)(ii).)

Background

On April 7, 2020, Plaintiffs filed a complaint alleging causes of action for (1) violation of Uniform Trade Secrets Act [against Defendant and Collins], (2) breach of contract [against Collins], (3) violation of Business & Professions Code 17200 [against Defendant and Collins], (4) intentional interference with prospective business advantage (“Intentional Interference”) [against Collins], and (5) violation of Penal Code 502(c) [against Defendant and Collins] in connection with Collins’s alleged misappropriation of Plaintiff’s proprietary information while working as Ambuehl’s assistant. Defendant filed its answer to this complaint in September 2020. On December 9, 2020, Plaintiffs filed their FAC, which added causes of action for (6) conversion, (7) concealment, and (8) defamation against Collins only. Accordingly, the 1^st, 3^rd, 4^th, and 5^th causes of action are asserted against Defendant. The Court notes Plaintiffs allege Defendant is Collins’s current employer and alleges Collins has engaged in misconduct involving Ambuehl’s proprietary information via her position of employment with Defendant. (FAC 52, 33, 80.) On May 10, 2021, Defendant filed its answer to Plaintiffs’ FAC. Defendant filed the instant motion on December 17, 2021. The Court notes on December 27, 2021, Plaintiffs filed a motion for leave to file a second amended complaint (“SAC”), which seeks to amend the pleading with respect to the 5^th cause of action and other causes of action and is set for hearing on May 18, 2022.

Violation of Cal. Penal Code 502] (5^th COA)

The Comprehensive Computer Data Access and Fraud Act (“CDAFA”) codified in California Penal Code 502 provides that any person who commits the following acts is guilty of a public offence: “(1) Knowingly accesses and without permission… uses any data, computer, computer system, or computer network in order to… wrongfully control or obtain money, property, or data; [or] (2) Knowingly accesses and without permission takes, copies, or makes use of any data from a computer, computer system, or computer network, or takes or copies any supporting documentation, whether existing or residing internal or external to a computer, computer system, or computer network.” (Penal Code 502(c)(1)(B), 502(c)(2))

The CDAFA makes civil remedies available to any person who suffers damage or loss by reason of the commission of certain computer-related offenses. (Penal Code 502(c), (e)(1).)

In a civil cause of action for violation of the CDAFA, a plaintiff must prove the following: (1) plaintiff is the owner of the computer; (2) defendant knowingly accessed and without permission used plaintiff’s data or computer in order to wrongfully control or obtain data and/or knowingly accessed and without permission took copies or made use of any data from a computer [Penal Code 502(c)(1)(B), 502(c)(2)]; (3) defendant’s access was without plaintiff’s permission; (4) plaintiff was harmed; and (5) defendant’s conduct was a substantial factor in causing plaintiff’s harm. (CACI 1812.)

Plaintiffs’ cause of action for violation of Penal Code 502(c) is based on the following allegations: (1) Ambuehl supplies her employees with computers and access to data storage systems for use in the course of their professional duties; (2) Defendants, knowingly and without permission, accessed Ambuehl’s computer, computer data, computer systems, and business records to destroy her access to her own data and her prospective economic advantage since Collins was directly competing with Ambuehl for the same clients; (3) from March 2016 to June 26, 2017, Collins committed wrongful acts including: (a) accessing, damaging, and deleting Ambuehl’s computer system, and (b) exceeding the scope of her employment by accessing Ambuehl’s computer system without permission and deleting certain non-proprietary information materials; (4) after Collins’s resignation on June 27, 2017, Collins deleted entries from Ambuehl’s business records and removed iCloud files resulting in the computer becoming useless to Ambuehl’s business; (5) Collins went to the Brentwood office despite instructions to stay away; (6) on July 5, 2017, Collins used the security key card to enter the Brentwood office of the Agency where Ambuehl’s computer was located and without authorization, performed a new system install of the operating system, removing work iCloud log files that had been previously residing on the desktop; (7) prior to performing the reinstall, a new iCloud account was created titled “CindyA.assistant@gmail.com”, which has since been deleted and/or made inactive, suggesting Collins had a different account she had been using prior to July 5, 2017; (8) removal of the iCloud account from Ambuehl’s computer resulted in Ambuehl’s documents being deleted from Desktop and Documents folders, among others; (9) the deleted files became privately owned by Collins, and on information and belief, Collins and her employer Defendant still have access to files stored on Ambuehl’s computer; and (2) Collins changed the list of passwords previously used to access Ambuehl’s data and computer systems leaving her without access to her own accounts. (FAC 40-53.) Plaintiffs allege Collins either exceeded the lawful scope of her employment or was no longer employed and thus was not acting within the scope of those duties and Defendant and Collins conspired to participate in Collins’s alleged violations of Penal Code 502. (FAC 105.) In addition, Plaintiffs allege that at all times Defendant and Collins were the agents and/or employees of each other and at all times acted within the scope and purpose of such agency/and or employment, and with the permission and consent of each other with knowledge and approval of each other. (FAC 7.)

Plaintiffs failed to allege sufficient facts to state a cause of action for violation of Penal Code 502(c) against Defendant. Plaintiffs fail to allege any factual allegations of misconduct by Defendant, and instead rely on the conclusory allegation that Defendant conspired with Collins in her misconduct without sufficiently alleging conspiracy. In addition, while in opposition Plaintiffs assert the claim is sufficiently stated against Defendant based on a theory of agency, the FAC’s inclusion of a single allegation that Defendants were the agent and/or employees of each other at all times is not addressed or relied on in alleging the 5^th cause of action. (FAC 7.)

Defendant asserts Plaintiff cannot cure the defect via amendment since the alleged misconduct occurred while Collins was still employed by the Agency, not while she was employed by Defendant and to the extent any of Collins’s misconduct occurred while she was employed by Defendant, Plaintiffs would be unable to allege conspiracy between her and Defendant, given a corporation cannot conspire with its own agent or employee. (Demurrer, pg. 6; citing Black v. Bank of Am. (1994) 30 Cal.App.4th 1, 4 [“agents and employees of a corporation cannot conspire with their corporate principal or employer where they act in their official capacities on behalf of the corporation and not as individuals for their individual advantage.”].) However, the Court finds Plaintiffs sufficiently established a probability of curing the defect in the pleadings via amendment. In opposition, Plaintiffs assert they do not seek to assert the 5^th cause of action against Defendant based on allegations of conspiracy, but instead on allegations that Collins was acting as the employee and agent of Defendant in her misconduct. (Opposition, pg. 11.) In addition, on the face of the pleading, Collins’s conduct was not limited to when she was employed by the Agency and not by Defendant; rather, Plaintiffs allege Collins engaged in misconduct prior to her resignation, shortly after her June 27, 2017 resignation, and on July 5, 2017, which was decidedly after her resignation. Moreover, there are no allegations as to when her employment with Defendant began such that actions Collins’ took in the course of that employment could constitute acts of Defendant’s agent.

Based on the foregoing, Defendant’s motion for judgment on the pleadings is granted with leave to amend.

Dated: January , 2022

Hon. Monica Bachner

Judge of the Superior Court

b'

Case Number: *******3565 Hearing Date: September 17, 2021 Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

CINDY AMBUEHL, et al., vs. CHRISTINA COLLINS, et al.

Case No.: *******3565 Hearing Date: September 17, 2021

Cross-Defendants’ demurrer to the 11^th cause of action is sustained in part and overruled in part. To the extent the cause of action is based on Cross-Defendant’s alleged violation of Labor Code ;226(b) [failure to permit inspection of records] the demurrer is overruled. To the extent the cause of action is based on alleged Labor Code violations occurring during Collins’s employment, the demurrer is sustained without leave to amend.

Cross-Defendants’ motion to strike is moot as to allegations/requests damages asserted in connection with the 11^th causes of action to the extent they are based on alleged Labor Code violations that occurred during Collins’s employment. (FACC ¶¶118-147, 151-152.) The motion to strike is denied as to allegations/requests for damages asserted in connection with the 11^th cause of action to the extent they are based on Cross-Defendants’ alleged violation of Labor Code ;226(b) by failing to permit Collins to inspect records. (FACC ¶¶115-117, 148-150, 153-155, Prayer for Relief ¶11.) The motion to strike the request for injunctive relief, to the extent it is incorporated into the 11^th COA, is granted.

1. Demurrer

Cross-Defendants Cindy Ambuehl (“Ambuehl”) and Anvis, Inc. (“Anvis”) (collectively, “Cross-Defendants”) demur to the 11^th (violations of Labor Code ;2698 et seq.) cause of action in the first amended cross complaint (“FACC”) of Cross-Complainant Christina Collins (“Collins”). Cross-Defendants move on the grounds that the cause of action is barred by the statute of limitations and Collins failed to fulfill the prerequisites to filing a civil action based on the facts alleged. (Notice of Demurrer, pg. 2.)

Cross-Defendants’ 6/16/21 request for judicial notice is granted. However, the Court does not take judicial notice of the truth of the matters asserted in the Collins’s October 16, 2020 Notice Letter (“PAGA Notice”) to the Labor Workforce Development Agency (“LWDA”). (RJN, Exh. 1.)

Background

Cross-Defendants filed the initial complaint in this action against Collins on April 7, 2020, and thereafter, a first amended complaint (“FAC”) on December 9, 2020. On October 1, 2020, Collins filed her cross-complaint alleging causes of action for Labor Code violations, defamation, and related causes of action, and on April 29, 2021, she filed her FACC, in which she added a cause of action for violations of Labor Code ;2698 et seq., the California Private Attorneys General act of 2004 (“PAGA”).

Collins’s 11^th cause of action is based on the following allegations: (1) PAGA provides for a civil penalty to be assessed and collected by the LWDA for a violation of the California Labor Code to be recovered through a civil action by an aggrieved employee on behalf of herself and other current or former employees; and (2) Collins and the other hourly-paid or non-exempt employees are “aggrieved employees” as defined by Labor Code ;2699(c) in that they are all current or former employees of Cross-Defendants and one or more of the alleged violations were committed against them including but not limited to: (a) failure to pay minimum wages, (b) failure to pay overtime wages, (c) failure to provide meal periods, (d) failure to provide rest breaks, (e) failure to issue accurate wage statements, (f) failure to issue semi-monthly payments, (g) failure to keep records, (h) waiting time penalties, (i) failure to reimburse business expenses, (j) failure to permit inspection, and (k) failure to provide sick days. (FACC ¶¶116-155.) Collins alleges she provided written notice to the LWDA on October 16, 2020, and that she did not receive notice from the LWDA of its intent to pursue the action within 65 days. (FACC ¶35.) Collins alleges she began working for Cross-Defendants as the personal assistant for Ambuehl in 2014, and that she resigned in the “summer of 2017.” (FACC ¶¶10-11.) Collins alleges that on September 3, 2020, she requested from Cross-Defendants copies of her payroll records and personnel files and, to date, Cross-Defendants have failed to permit inspection or copying of records. (FACC ¶¶97-98.)

PAGA – Labor Code ;2689 (11^th COA)

Labor Code ;2699(a) provides that, “[A]ny provision of this code that provides for a civil penalty to be assessed and collected by the [LWDA], for a violation of this code, may, as an alternative, be recovered through a civil action brought by an aggrieved employee on behalf of himself or herself and other current or former employees pursuant to the procedures specified in Section 2699.3.”

“[O]nly an aggrieved employee has standing under PAGA. An ‘aggrieved employee’ is ‘any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed.’ [Citation]’Under [PAGA], an ‘aggrieved employee’ may bring a civil action personally and on behalf of other current or former employees to recover civil penalties for Labor Code violations…. [In Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, the California Supreme Court] concluded an employee who settles and dismisses individual Labor Code claims does not lose standing to pursue a PAGA claim. [Citation.] To this end, the court emphasized that the plain language of section 2699, subdivision (c) has two requirements for standing: the plaintiff ‘must be an aggrieved employee, that is, someone “who was employed by the alleged violator” and “against whom one or more of the alleged violations was committed.”’ (Citation.) Our high court concluded that the employee satisfied those requirements because he was employed by the alleged violator, and he personally suffered at least one Labor Code violation on which the PAGA claim was based.” (Johnson v. Maxim Healthcare Services, Inc. (2021) 66 Cal.App.5th 924 (citations omitted).)

Cross-Defendants argue the 11^th cause of action is time-barred by the one-year statute of limitations set forth in C.C.P. ;340(a), even with the tolling provided by Labor Code ;2699.3(a) and (d), since Collins waited more than three years after her employment ended to pursue her PAGA claim. (Demurrer, pg. 11.)

Aside from allegations that Cross-Defendants did not permit Collins to inspect her personnel files and payroll records after her September 3, 2020 request, all allegations of Cross-Defendants’ alleged Labor Code violations against Collins and other similarly situated aggrieved employees occurred during Collin’s employment, and accordingly, in 2017 and before.

For the purposes of a demurrer, the PAGA cause of action based on Cross-Defendants’ alleged violation of Labor Code ;226(b) [failure to permit inspection of records] is not barred by the statute of limitations on the face of the pleading. Here, Collins alleged Cross-Defendants violated Labor Code ;226(b) by failing to permit her, a former employee, to inspect or copy “all records” following her request on September 3, 2020, and through the filing of the FACC, which is within the limitations period. Notably, the allegations are taken as true for the purposes of a demurrer, and with respect to whether this alleged violation is barred by the statute of limitations, Cross-Defendants only argue the allegation is untrue as will be established through discovery and presentation of evidence, Cross-Defendants did in fact produce the available employment records. (Demurrer, pg. 10, fn. 3.) Cross-Defendants also argue Collins concedes she was permitted to inspect or copy records, only that “all records” were not provided; however, Cross-Defendants assert they can prove that they provided all available records, given many were not available due to Collins’s own actions in destroying records. (Demurrer, pg. 14, fn. 4.) However, these arguments go beyond the scope of the pleadings, and do not address whether Collins has sufficiently alleged a PAGA claim based on Cross-Defendants’ alleged violation of Labor Code ;226(b). As such, Collins’s PAGA claim, to the extent it is based on failure to permit inspection of records, is not time-barred on the face of the pleadings.

To the extent the PAGA claim is based on Cross-Defendants’ other alleged violations of the Labor Code that occurred during Collins’ employment from 2014 to 2017, the cause of action is time-barred on the face of the pleading since Collins does not have standing to assert those claims if asserted on behalf of employees within the statutory period. It is undisputed that the alleged Labor Code violations that occurred during Collins’s employment did not occur within the one-year statute of limitations of filing the PAGA Notice. Collins does not cite to authority supporting her position that time-barred Labor Code violations may be included in a PAGA claim based on a single timely violation. In addition, Collins’s assertion that “she would still have standing to pursue the PAGA claims if any employee suffered a violation during the one-year limitations period” is misplaced. (Opposition, pg. 9; citing Johnson v. Maxim Healthcare Services, Inc. (2021) 66 Cal.App.5th 924, 930, 281 Cal.Rptr. 3d 478 (“Johnson”).) Johnson is distinguishable from the instant action, since the plaintiff in Johnson was still employed by the defendant employer during the statutory period when the alleged violations against other aggrieved employees occurred (notwithstanding the fact her own claim was time-barred), and as such, she still had standing to pursue PAGA violations on behalf of other aggrieved employees. In Johnson, the Court specifically noted that, unlike in Robinson, the plaintiff remained an employee of defendant and continued to be governed by the at-issue non-competition agreement she had signed outside the statutory period, and as such, given the plaintiff’s allegations defendant had persisted in requiring its employees to sign these same non-competition agreements, she had standing to bring a PAGA claim based on violations associated with the non-competition agreements that occurred during the applicable statutory period. (Johnson v. Maxim Healthcare Services, Inc., supra, 66 Cal.App.5th 924, 281 Cal.Rptr.3d at 483.) Here, however, it is undisputed that during the one-year limitations period prior to Collins’s filing her PAGA Notice, she was not employed by Cross-Defendants, as her employment had ended in summer 2017. As such, Collins would not have standing to pursue PAGA penalties for Cross-Defendants’ alleged Labor Code violations against other aggrieved employees during the statutory period when Collins was no longer employed by Cross-Defendants. (See Robinson v. Southern Counties Oil Company (2020) 53 Cal.App.5th 476, 484 [With respect to Labor Code violations that occurred after plaintiff’s employment ended, the appellate court concluded the plaintiff lacked standing because he was not employed by the defendant at that time and was not affected by any of the alleged violations].) Accordingly, to the extent the cause of action is based on Cross-Defendants’ Labor Code violations against Collins that occurred during her employment, the cause of action is time-barred on the face of the pleading and Collins lacks standing to pursue them on behalf of aggrieved employees of Cross-Defendants during the statutory period. Moreover, Collins does not meet her burden in addressing how this defect can be cured via amendment, especially since the dates of her employment are not in dispute.

Based on the foregoing, the demurrer to the 11^th cause of action on the grounds it is time-barred is sustained in part and overruled in part. To the extent the cause of action is based on Cross-Defendant’s alleged violation of Labor Code ;226(b) [failure to permit inspection of records] the demurrer is overruled. To the extent the cause of action is based on alleged violations occurring during Collins’s employment, the demurrer is sustained without leave to amend.

Cross-Defendants also argue the cause of action is subject to demurrer because Collins’s PAGA Notice failed to include facts and theories to support Cross-Defendants’ alleged statutory violations as required by Labor Code ;2699.3(a)(1)(A). (Demurrer, pg. 15.) Specifically, Cross-Defendants assert the PAGA Notice only contains conclusory statements devoid of factual support, without providing facts of how other aggrieved employees suffered from any Labor Code violations, and instead parrot the language for the Labor Code sections themselves. (Demurrer, pgs. 15-16, citing Brown v. Ralphs Grocery Co. (2018) 28 Cal.App.5th 824, 837- 838.)

First, in light of the ruling sustaining the demurrer as to the PAGA claim based on Labor Code violations that occurred during Collins’s employ, the Court does not reach the issue of whether the PAGA Notice was deficient for these statutory violations. Second, for the purposes of a demurrer, the PAGA Notice sets forth sufficient facts and theories underlying Cross-Defendants’ alleged violation of Labor Code ;226(b) [failure to permit inspection of records], since it sets forth the date Collins requested to inspect records and that Cross-Defendants failed to provide her access to all records. (RJN, Exh. A.) Moreover, Cross-Defendants do not assert the language in the PAGA Notice surrounding this alleged violation is conclusory or insufficient, and instead focus on the other alleged Labor Code violations.

Based on the foregoing, Cross-Defendants’ demurrer to the 11^th cause of action on the grounds the PAGA Notice is insufficient is overruled in part. To the extent the cause of action is based on Cross-Defendant’s alleged violation of Labor Code ;226(b) [failure to permit inspection of records] the demurrer is overruled. To the extent the cause of action is based on alleged violations occurring during Collins’s employment, the Court does not reach this issue.

Conclusion

Cross-Defendants’ demurrer to the 11^th cause of action is sustained in part and overruled in part. To the extent the cause of action is based on Cross-Defendant’s alleged violation of Labor Code ;226(b) [failure to permit inspection of records] the demurrer is overruled. To the extent the cause of action is based on alleged Labor Code violations occurring during Collins’s employment, the demurrer is sustained without leave to amend.

1. Motion to Strike

Cross-Defendants move to strike the following portions of the FACC filed by Collins: (1) 11^th Cause of Action from the Caption, (2) allegations of Collins’s PAGA notice to the LWDA: Paragraphs 34-37, (4) Paragraphs 115-155 [the entire 11^th COA], and (5) Paragraph 11 from the Prayer for Relief [civil penalties sought in connection with the 11^th COA]. Cross-Defendants move to strike on the grounds the PAGA cause of action is barred by the applicable statute of limitations and because Collins failed to fulfill prerequisites to filing a civil action for PAGA claims based on the facts alleged. (Notice of Motion, pg. 2.) The Court notes Cross-Defendants move to strike the request for injunctive relief in the 11^th cause of action on the grounds PAGA does not provide for injunctive relief. (Motion, pg. 8, fn. 3, FACC ¶115, which incorporates ¶¶96 & 101, which request injunctive relief].)

C.C.P. ;436 provides that the Court may, upon a motion made pursuant to C.C.P. ;435, or at any time within its discretion and upon terms it deems proper, “strike out any irrelevant, false, or improper matter inserted in any pleading” and/or “strike out all or part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.”

Based on the ruling on the demurrer, the motion to strike is moot as to the allegations and/or prayer for punitive damages based the 11^th COA, to the extent it is based on Labor Code violations during Collins’s employment, as to which the Court sustained the demurrer without leave to amend. Namely, in light of the Court’s ruling, the allegations as to which the demurrer was sustained are no longer part of the operative pleading and have been struck. (See FACC ¶¶118-147, 151-152.) As such, the only allegations remaining to be addressed are those supporting Collins’s PAGA claim/11^th COA based on Cross-Defendants’ alleged violation of Labor Code ;226(b) by failing to permit Collins to access her records. In light of the Court’s ruling on the demurrer, the motion to strike these allegations, and the prayer for relief associated therewith, is denied. (FACC ¶¶115-117, 148-150, 153-155, Prayer for Relief ¶11.) Finally, Cross-Defendants’ unopposed motion to strike the request for injunctive relief, to the extent it is incorporated into the 11^th COA, is granted.

Dated: September _____, 2021

Hon. Monica Bachner

Judge of the Superior Court

'

b"

Case Number: *******3565 Hearing Date: September 10, 2021 Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

CINDY AMBUEHL, et al., vs. CHRISTINA COLLINS, et al.

Case No.: *******3565 Hearing Date: September 10, 2021

Defendant Christina Collins’s special motion to strike is granted. Defendant may separately move for an award of attorneys’ fees and costs.

Defendant Christina Collins (“Defendant”) moves to strike the 8^th (defamation) cause of action and Paragraph 94 from the 4^th cause of action for intentional interference with prospective economic advantage asserted by Plaintiffs Cindy Ambuehl (“Ambuehl”) and Anvis, Inc. (“Anvis”) (collectively, “Plaintiffs”) in their first amended complaint (“FAC”), pursuant to C.C.P. ;425.16. (Notice of Motion, pg. 2.) The Court notes the 8^th cause of action is brought only by Ambuehl, while the 4^th cause of action is brought by Plaintiffs together.

Plaintiffs filed a Notice of Lodging Unredacted Documents Under Seal as well as an Application to Seal Records Lodged with Opposition (“Application”) in connection with their opposition to the special motion to strike. The Court notes Exhibits 5, 7, 10, 11, 12, 13, 14, 15, 18, 19, and 20 [omitted from public filing in entirety] and Exhibits 9 and 16 [redacted versions in public filing] to the original Declaration of Ambuehl were conditionally lodged under seal as well Exhibit 6 to the Declaration of Sarah Kelly-Kilgore (“Kelly-Kilgore”). [The Notice of Application to Seal does not refer to Exhibit 16 to the Declaration of Ambuehl.] On June 14, 2021, the Court entered the parties’ Stipulation to Conditionally Seal Previously-Filed Supplemental Compendium of Declarations and Exhibits (“Stipulation”) as to documents Defendant filed on May 20, 2021, in support of her reply, pursuant to which the parties agreed Plaintiffs would file an application to seal as to the newly-filed exhibits within 10 days of the Court’s entry of the Stipulation. (Stipulation ¶5.) On June 24, 2021, Plaintiffs filed a Revised Declaration of Ambuehl that includes redacted versions of Exhibits 5, 7, 10, 11, 12, 13, 14, 15, 16, and 18. [The Court notes the public filing of the Revised Declaration includes Exhibits 19 and 20 in their unredacted form; accordingly, it appears Plaintiffs no longer seek an order sealing these Exhibits.] Plaintiffs also filed a Revised Declaration of Kelly-Kilgore in which Exhibit 6 is no longer redacted or removed; as such, it appears Plaintiffs no longer seek an order sealing Exhibit 6 to the Declaration of Kelly-Kilgore. On June 24, 2021, Plaintiffs filed an Amended and Supplemental Application to Seal (“Amended Application”) as to the records filed on May 7, 2021 and May 20, 2021, which were re-filed in redacted form on June 15, 2021 and July 1, 2021. (See 6/16/21 Minute Order.) On July 13, 2021, the Court granted Plaintiffs’ application to seal and instructed the parties to meet and confer regarding client names in complaint which should not be sealed, and to submit amended filings within three weeks. On August 3, 2021, Plaintiffs filed a Revised Declaration of Ambuehl, with supporting exhibits, in support of the opposition, and Defendant filed a First Amended Compendium of Declarations and Exhibits in support of the motion to strike.

Defendant moves to strike the 8^th (defamation) cause of action and Paragraph 94 from the 4^th cause of action for intentional interference with prospective economic advantage asserted by Plaintiffs in their FAC pursuant to C.C.P. ;425.16. (Notice of Motion, pg. 2.) In opposition, Plaintiffs request the Court award Plaintiffs their reasonable costs and attorneys’ fees in opposing the motion. (Opposition, pg. 7.)

Requests for Judicial Notice

Defendant’s 2/9/21 request for judicial notice is granted as to Nos. 1, 2, 3, 4, 6, and 7. However, the Court does not take judicial notice of the truth of the matters asserted in the article, the posts, the complaint, or the FAC. (D-RJN, Exhs. 1-4, 6, 7.) Defendant’s request for judicial notice is denied as to No. 5.

Defendant’s 5/20/21 supplemental request for judicial notice is granted as to Nos. 1, 2, 3, 4, 5, 6, 7, and 8. However, the Court does not take judicial notice of the truth of the matters asserted in the articles and/or the content of Ambuehl’s website.

Evidentiary Objections

Plaintiffs’ 5/7/21 evidentiary objections to the Declaration of Adam Zaffos (“Zaffos”) are sustained as to Nos. 1, 2, 3, 4, 5, 6.

Plaintiffs’ evidentiary objections to the Declaration of Francis Nguyen (“Nguyen”) are overruled as to Nos. 7 and 8.

Plaintiffs’ evidentiary objections to the Declaration of Richard Buckner (“Buckner”) are overruled as to Nos. 9, 10, 11, 12, 13, 14.

Plaintiffs’ evidentiary objections to the Declaration of Monique Navarro are sustained as to Nos. 15, 16 (the first sentence only), and 20, and overruled as to Nos. 17, 18, 19.

Plaintiffs’ evidentiary objections to the Declaration of Brian C. Sinclair (“Sinclair”) are sustained as to Nos. 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, and 43.

Plaintiffs’ evidentiary objections to the Declaration of Defendant are sustained as to Nos. 44 (only as to “The Agency’s claim was based on a misunderstanding, since” otherwise overruled) and 45 (only as to “Nonetheless, Ms. Ambuehl continues to falsely claim… is untrue” otherwise overruled), and overruled as to No. 46.

Plaintiffs’ evidentiary objections to the Letter dated January 26, 2018, from Defendant’s prior counsel Zaffos (Exhibit B) are sustained as to Nos. 47, 48, 49, and 50.

Plaintiffs’ evidentiary objections to the Letter dated March 19, 2019, from Defendant’s Prior Counsel Buckner (Exhibit D) are overruled as to Nos. 51, 52, 53, 54, 55, and 56.

Plaintiffs’ evidentiary objection to the January 21, 2018 Email from Navarro is overruled as to No. 57.

Plaintiffs’ evidentiary objections to Exhibits K and L (High Contrast Personal Assistant Contracts) are sustained as to No. 58 and 59.

Plaintiffs’ evidentiary objections to the Expert Witness Report of Bruce W. Pixley (Exhibit P) and the Expert Witness Report of Beth Chrisman (Exhibit Q) are overruled as to Nos. 60 and 61.

The Court declines to rule on Defendant’s 5/20/21 evidentiary objections to the Declaration of Tommy Stiansen Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, and 19 as the evidence objected to is not material to the Court’s ruling on the instant motion.

Defendant’s evidentiary objections to the Declaration of Ambuehl are overruled as to Nos. 20, 21, 23, 24, 27 (non-hearsay purpose), 29, 30, 35, 40 (except as to “pursuant to the same terms and conditions of the PAC”, to which the objection is sustained), 56, 70, 81, and 82. Defendant’s evidentiary objections are sustained as to No. 22 (except as to “I filed a First Amended Complaint… defamation” to which the objection is overruled), 25, 26, 28 (to the extent the statements are submitted for the truth of their matter, sustained, otherwise overruled), 31, 32, 33, 34, 36, 37, 38, 39, 41, 42 (except as to “following Ms. Collins’s departure… and my clients” to which the objection is overruled), 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, and 83.

Defendant’s evidentiary objections to the Declaration of Kelly-Kilgore are sustained as to Nos. 84, 85, 86, and overruled as to Nos. 87, 88, 89.

Defendant’s evidentiary objections to the Declaration of Alexander Diamont are sustained as to Nos. 92 (as to “and trusted her completely,” otherwise overruled), 93, 94, 95, 96, 97, and 98 and overruled as to Nos. 90 and 91.

Defendant’s evidentiary objections to the Declaration of Sara Caroll are sustained as to Nos. 101, 102, 103, and 104 and overruled as to Nos. 99 and 100,

Defendant’s evidentiary objections to the Declaration of Steven Kaller are sustained as to Nos. 105, 106, 108 (except as to “I do not recall having concerns with the… Contract” to which the objection is overruled, otherwise, sustained), and 109, and overruled as to Nos. 107 (except as to what his understanding was, to which the objection is sustained) and 110.

Defendant’s evidentiary objections to the Declaration of Nikki Magliarditi are sustained as to Nos. 111, 112, 113, 114 (as to “I understood. . .evidence”, otherwise overruled), 115, and 116.

Defendant’s evidentiary objections to Exhibits are sustained as to Nos. 120, 124, 126, 127, 128, overruled as to Nos. 117, 118, 119, 121, 122, 123, 125, 129, 130, 131, and 132.

Background

On April 7, 2020, Plaintiffs filed a complaint alleging causes of action for (1) violation of Uniform Trade Secrets Act, (2) breach of contract, (3) violation of Business & Professions Code ;17200, (4) intentional interference with prospective business advantage (“Intentional Interference”), and (5) violation of Penal Code ;502(c) against Defendant in connection with Defendant’s alleged misappropriation of Plaintiff’s proprietary information while working as Ambuehl’s assistant. On December 9, 2020, Plaintiffs filed their FAC, which added causes of action for (6) conversion, (7) concealment, and (8) defamation. The 4^th cause of action is asserted by Plaintiffs together, while the 8^th cause of action is asserted by Ambuehl alone.

In support of their 4^th cause of action for Intentional Interference, Plaintiffs allege that on April 8, 2020, Defendant knowingly provided a false statement to the industry publication The Real Deal with intent that it be published, in which she defamed Ambuehl by characterizing her as dishonest and lacking in credibility, a statement which on its face had a natural tendency to injury a person such as Ambuehl in her reputation generally and with respect to her occupation in an industry regulated by ethics and valuing honesty and fairness. (FAC ¶94.) Plaintiffs allege that as a result of Defendant’s statement, Ambuehl’s reputation and business were harmed. (FAC ¶95.)

Plaintiff’s 8^th cause of action is based on the following allegations: (1) on April 8, 2020, Defendant caused a publication of a statement of fact to be made in the widely read real estate publication, The Real Deal, in which Defendant, while referring to the allegations against her in Ambuehl’s Complaint, said the following false statements of fact: “[Ambuehl’s] allegations (now nearly 3 years old) are not only frivolous but have been debunked repeatedly and [Ambuehl] knows that…” (“Statement”); (2) Defendant’s Statement, presented as fact, is false because there has been no prior adjudication or “debunking” of any Ambuehl’s allegations and as such, Ambuehl would not have had any notice that her claims had been resolved given Ambuehl has not yet presented her claims for resolution; however, Defendant represented to the public that Ambuehl had already been proven a loser and that her claims are baseless; (3) Defendant’s Statement is unprivileged because it was not made in any legislative, judicial, or other official proceeding; (4) Defendant’s statement has a natural tendency to injure Ambuehl’s reputation and falsely portrays Ambuehl as someone who persists with a losing position, thereby lowering Ambuehl’s position in the community and/or deterring people from associating with her; (4) Defendant made her Statement intentionally; and (5) Defendant’s Statement was a substantial factor in causing actual harm to Plaintiff’s business, trade, profession and occupation. (FAC ¶¶128-133.) Accordingly, both the Paragraph 94 and the 8^th cause of action are based on allegations relating to Defendant’s Statement to The Real Deal regarding the instant action.

Special Motion to Strike

“Resolution of an anti-SLAPP motion involves two steps. First, the defendant must establish that the challenged claim arises from activity protected by section 425.16. [Citation.] If the defendant makes the required showing, the burden shifts to the plaintiff to demonstrate the merit of the claim by establishing a probability of success. We have described this second step as a ‘summary-judgment-like procedure.’[Citation.] The court does not weigh evidence or resolve conflicting factual claims. Its inquiry is limited to whether the plaintiff has stated a legally sufficient claim and made a prima facie factual showing sufficient to sustain a favorable judgment. It accepts the plaintiff's evidence as true, and evaluates the defendant's showing only to determine if it defeats the plaintiff's claim as a matter of law.” (Baral v. Schnitt (2016) 1 Cal.5th 375, 384-85 (Baral).) As to the second step inquiry, a plaintiff seeking to demonstrate the merit of the claim “may not rely solely on its complaint, even if verified; instead, its proof must be made upon competent admissible evidence.” (Sweetwater Union High School Dist. v. Gilbane Building Co. (2019) 6 Cal.5th 931 (Sweetwater).)

A plaintiff opposing a special motion to strike has the burden to “state [] and substantiate [] a legally sufficient claim.” (Navellier v. Sletten (2002) 29 Cal.4th 82, 88 & 93.) “‘Put another way, 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.”’ [Citations.]” (Navellier, supra, 20 Cal.4th at pp. 88–89.) To that end, the plaintiff must present competent evidence, “that would be admissible at trial.” (HMS Capital, Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204, 212.) “[D]eclarations may not be based upon ‘information and belief’ [citation]” and documents submitted without the proper foundation will not be considered. (Ibid.) The complaint, even if verified, is insufficient to carry the plaintiff's shifted burden. (Roberts v. Los Angeles County Bar Assn. (2003) 105 Cal.App.4th 604, 614; Karnazes v. Ares (2016) 244 Cal.App.4th 344, 354 [“pleadings do not constitute evidence”].) (See also Burke, Anti-SLAPP Litigation (The Rutter Group, Civil Litigation Series 2018 ; 5:13) “To satisfy prong two, the plaintiff must submit admissible evidence that if credited is sufficient to sustain a favorable judgment against the legal theories asserted by the defendant.”)

1. Arising from Protected Activity

   “A cause of action is subject to a special motion to strike if the defendant shows that the cause of action arises from an act in furtherance of the Defendants’ constitutional right of petition or free speech in connection with a public issue and the plaintiff fails to demonstrate a probability of prevailing on the claim. [Citations]” (Digerati Holdings, LLC v. Young Money Entertainment, LLC (2011) 194 Cal.App.4th 873, 883.)

   “An ‘act in furtherance of a person’s right of petition or free speech under the United States or California Constitution in connection with a public issue’ is defined by statute to include ‘(1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law, (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law, (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest, or (4) any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.’ [Citation] If the defendant shows that the cause of action arises from a statement described in clause (1) or (2) of section 425.16, subdivision (e), the defendant is not required to separately demonstrate that the statement was made in connection with a ‘public issue.’ [Citation]” (Id.)

   “A cause of action arising from a person’s act in furtherance of the ‘right of petition or free speech under the [federal or state] Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability’ that the claim will prevail. (C.C.P. ;425.16(b)(1).)” (Sweetwater, supra, 6 Cal. 5th at 940.) An “ ‘act in furtherance of a person’s right of petition or free speech under the United States or California Constitution in connection with a public issue’ includes: (1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law, (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law, (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest, or (4) any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.” (C.C.P. ;425.16(e).)

   “A cause of action is one ‘arising from’ protected activity within the meaning of section 425.16, subdivision (b)(1) only if the Defendants’ act on which the cause of action is based was an act in furtherance of the Defendants’ constitutional right of petition or free speech in connection with a public issue. [Citation] In deciding whether the ‘arising from’ requirement is satisfied, ‘the court shall consider the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.’ [(C.C.P. ;425.16(b)(2).)] Whether the ‘arising from’ requirement is satisfied depends on the ‘gravamen or principal thrust’ of the claim. [Citations] A cause of action does not arise from protected activity for purposes of the anti-SLAPP statute if the protected activity is merely incidental to the cause of action. [Citations]” (Id. at 883-884.) To show that a claim arises from protected activity under section 425.16, subdivision (b)(1), it is not sufficient to show that the claim “was filed after, or because of, protected activity, or when protected activity merely provides evidentiary support or context for the claim.” (Rand Resources, LLC v. City of Carson (2019) 6 Cal.5th 610, 621) “Rather, the protected activity must ‘supply elements of the challenged claim.’ [Citation omitted]” (Ibid.)

   “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 396. (Emphasis Added).)

   “In deciding whether a lawsuit is a SLAPP action, the trial court must distinguish between speech or petitioning activity that is mere evidence related to liability, and liability that is based on speech or petitioning activity. ‘Prelitigation communications... may provide evidentiary support for the complaint without being a basis of liability. An anti-SLAPP motion should be granted if liability is based on speech or petitioning activity itself.’ ” (Gotterba v. Travolta (2014) 228 Cal.App.4th 35, 42.)

   Defendant argues the causes of action and allegation based on the Statement arise from protected activity for the following three separate reasons: (1) the Statement is protected speech under C.C.P. ;425.16(e)(2) since it was a statement made about the litigation to a third-party and thus qualifies as a statement, “made in connection with an issue under consideration or review by a… judicial body”; (2) the Statement is protected speech under C.C.P. ;425.16(e)(3) since it was, “made in… a public forum in connection with an issue of public interest”; and (3) the Statement is protected by the “litigation privilege” set forth in Civil Code ;47(d) since it is a, “fair and true report in, or a communication to, a public journal, of… a judicial… proceeding.” (Motion, pgs. 12-14.) Defendant has the burden of establishing the Statement falls within any of these protections.

1. Statement Made in Connection with Issue under Judicial Review (C.C.P. ;425.16(e)(2))

   Defendant met her burden of establishing the Statement is protected activity under Section 425.16(e)(2), since it was an oral statement made in connection with an issue under judicial review, and as such, was in furtherance of Defendant’s right of petition of or free speech in connection with a public issue.

   In opposition, Plaintiffs assert Defendant did not meet her burden since she failed to demonstrate the Statement was directed at persons having some interest in the litigation, which Plaintiffs frame as a requirement for a statement to qualify as protected under subsection (e)(2). (Opposition, pgs. 11-12, citing Neville v. Chudacoff (2008) 160 Cal.App.4th 1255, 1266 [“a statement is ‘in connection with’ litigation under [Section 425.16(e)(2)] if it relates to the substantive issues in the litigation and is directed to persons having some interest in the litigation.”].) However, the Neville court’s conclusion that a statement related to the substantive issues in the litigation and directed at persons having some interest in the litigation falls within Section 425.16(e)(2) does not mean the underlying statement must be directed at persons interested in the litigation to be considered as made “in connection with” litigation for the purposes of the statute. The statue itself only requires that the statements be made in connection with the litigation. Notably, in Haight Ashbury Free Clinics, Inc. v. Happening House Ventures (2010) 184 Cal.App.4th 1539, 1549, which involved a defendant’s alleged breach of fiduciary duties by misrepresenting facts surrounding claims in a pending case in a letter to a newspaper, the Court found the statements in the letter fell within the scope of Section 425.16(e)(2) as a written statement made in connection with an issue under consideration or review by a judicial body. (Reply, pgs. 7-8.) The Haight Ashbury court concluded the letter to the newspaper fell within the scope of the subsection based on its content, namely, that it was made in connection with an issue under judicial review, not based on whether it was directed at persons with some interest in the litigation. Here, given Defendant has met her burden of establishing the Statement was made in connection with an issue under judicial review, she has met her burden of establishing it qualifies as protected activity.

   Defendant met her burden of proving Plaintiffs’ defamation cause of action and paragraph 94, which are based on Defendant’s Statement, arise from Defendant’s protected activity pursuant to C.C.P. ;425.16(e)(2). As such, the Court does not reach the issue of whether Defendant met her burden of establishing the Statement qualifies as protected activity under C.C.P. ;425.16(e)(3) or under the litigation privilege.

   Based on the foregoing, the burden shifts to Plaintiff to demonstrate a probability of prevailing on her 8^th (defamation) cause of action and on her 4^th (intentional interference) cause of action, to the extent it is based on the Statement.

   Probability of Prevailing

1. Defamation (8^th COA)

“Defamation is an invasion of the interest in reputation. The tort involves the intentional publication of a statement of fact that is false, unprivileged, and has a natural tendency to injure or which causes special damage. [Citations] Publication means communication to some third person who understands the defamatory meaning of the statement and its application to the person to whom reference is made. Publication need not be to the ‘public’ at large; communication to a single individual is sufficient. [Citations] Reprinting or recirculating a libelous writing has the same effect as an original publication. [Citations]” (Smith v. Maldonado (1999) 72 Cal.App.4th 637, 645.)

“[S]tatements cannot form the basis of a defamation action if they cannot be reasonably interpreted as stating actual facts about an individual. Thus, rhetorical hyperbole, vigorous epithets, lusty and imaginative expressions of contempt and language used in a loose, figurative sense will not support a defamation action.” (Grenier v. Taylor (2015) 234 Cal.App.4th 471, 486.)

“Deprecatory statements regarding the merits of litigation are ‘nothing more than “the predictable opinion” of one side to the lawsuit’ and cannot be the basis for a defamation claim.” (GetFugu, Inc. v. Patton Boggs LLP (2013) 220 Cal.App.4th 141, 156.)

Defendant argues Ambuehl cannot prevail on her defamation claim for the following reasons (1) the Statement is a non-defamatory statement regarding the merits of the litigation; (2) the Statement is not provably false; (3) the Statement is protected by the litigation privilege; and (4) to the extent the Statement is not considered a non-actionable statement of opinion, the Statement is true. (Motion, pgs. 14-15.)

Here, the issue of whether the Statement qualifies as non-actionable deprecatory statements about the litigation as opposed to provably false statements of fact depends on Defendant’s use of the phrase “have been debunked repeatedly,” to describe Ambuehl’s claims against her. Plaintiffs argue “debunked” means, or could reasonably be interpreted to mean, more than simply frivolous, baseless, or false, given it means that certain claimed facts or exaggerations have been proven false. (Opposition, pgs. 15-16.) As such, Plaintiffs argue that given there had been no determination of the truth or falsity of Ambuehl’s claims against Defendant at the time the Statement was made, an assertion that claims had already been “debunked” could be construed as a provably false assertion of fact. However, taken in the context of Defendant’s statement commenting on the case as a whole and the merits of Ambuehl’s claims against her, Defendant’s assertions amount to deprecatory statements about the litigation. Plaintiffs cite to Balla v. Hall (2021) 59 Cal.App.5th 652, 681-82 as a case that found a similar statement to be actionable. (Opposition, pg. 16.) However, Balla involved six different publications in which defendant(s) made specific claims of fact, not general statements about the merits of an action, as is the case here. Plaintiffs do not support their argument that the statements in Balla were similar to those at issue in the instant action making them actionable for defamation. Plaintiff also cites Steep Hill Labs., Inc. v. Moore (N.D. Cal., Mar. 8, 2018, 18-cv-00373-LB) 2018 WL 1242182, at *9 for the position that it found a “similar statement” to Defendant’s to be actionable. (Opposition, pg. 16.) However, the statements in Steep Hill Labs amount to much more specific claims and accusations defendant David Harold Moore made about plaintiff’s CEO Jmichaele Keller and are not similar to Defendant’s broad statement in the instant action relating to the merits of Ambuehl’s claims against her.

In addition, Defendant’s misidentification of the defendant Jane Hamsher in Ferlauto v. Hamsher (1999) 74 Cal.App.4th 1394 as “opposing counsel,” when Hamsher was actually a producer of the film at issue in underlying litigation against her brought by plaintiff Thomas M. Feraulto (an attorney) on behalf of his client (director Rand Vossler), it is a distinction without a difference since the case involved Feraulto’s lawsuit for Hamsher’s statements in her later-published book about producing the film that described Feraulto’s conduct during litigation, and as such, Hamsher and Feraulto were effectively adversaries in the underlying litigation that was the subject of the at-issue statements. Defendant cites Feraulto for its holding that Hamsher’s use of terms and phrases to describe Feraulto’s litigation against her, namely, the merits of certain motions or his client’s lawsuit as a whole, constituted nothing more than the “predictable opinion” of one side to the lawsuit and her use of such descriptive terms could not be the basis of a defamation claim. (Ferlauto v. Hamsher, supra, 74 Cal.App.4th at 1403.) Contrary to Plaintiffs’ argument in opposition, Feraulto is applicable to whether the Statement in the instant action is actionable as defamation as a false statement of fact or predictable opinion of one side to a lawsuit.

Based on the foregoing, Defendant’s special motion to strike the 8^th (defamation) cause of action is granted. In light of the ruling, the Court does not reach the parties arguments relating to whether (1) the Statement is not provably false; (2) the Statement is protected by the litigation privilege; and/or (3) to the extent the Statement is not considered a non-actionable statement of opinion, the Statement is true.

1. Paragraph 94 (4^th COA)

The elements for intentional interference with prospective economic advantage are: (1) the existence of a prospective economic relationship with the probability of future economic benefit to plaintiff; (2) defendant’s knowledge of the relationship and intent to disrupt it; (3) actual disruption of the relationship; (4) caused by the defendant’s wrongful and unjustified conduct; and (5) plaintiff suffered damages as a result. (Youst v. Longo (1987) 43 Cal.3d 64, 71.)

Plaintiffs’ 4^th cause of action is based on Defendant’s Statement as well as other conduct by Defendant, including her alleged disparaging of Ambuehl to her existing and former clients and failing to advise them she had an obligation to Ambuehl to not solicit her former clients. (FAC ¶¶88-96.) Defendant does not move to strike the cause of action as a whole or Plaintiffs’ allegations relating to Defendant’s conduct not encompassed in the Statement. (Motion, pg. 12, fn. 1, citing Baral v. Schnitt (2016) 1 Cal.5th 376, 395-396.) However, to the extent the cause of action is based on the Statement, Defendant specially moves to strike the allegation involving the Statement since it is protected activity and Plaintiffs cannot meet their burden of establishing a probability of success on the cause of action based on the Statement. In opposition, Plaintiffs only address the merits of the intentional interference claim in the context of whether Defendant’s Statement was true for the purposes of the defamation cause of action. (Opposition, pg. 18.) Plaintiffs do not submit evidence or argument addressing whether they can show a probability of prevailing on the 4^th cause of action, to the extent it is based on the protected activity of Defendant’s Statement to The Real Deal. In a footnote, Plaintiffs assert the Statement did harm Ambuehl and her businesses, citing to the Declarations of Ambuehl and Magliarditi. (Opposition, pg. 18, fn. 8.) However, this argument is submitted for the purposes of supporting Plaintiffs’ assertion they can prevail on the defamation cause of action. The elements and evidence supporting the intentional interference cause of action based on the Statement are not discussed or submitted. Accordingly, Plaintiffs have not met their burden.

Based on the foregoing, Defendant’s motion to strike Paragraph 94 is granted.

With respect to entitlement to attorneys’ fees and costs under C.C.P. ;425.16, Defendant may separately move to obtain award of fees and costs.

Dated: September _____, 2021

Hon. Monica Bachner

Judge of the Superior Court

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Case Number: *******3565 Hearing Date: July 13, 2021 Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

CINDY AMBUEHL, et al., vs. CHRISTINA COLLINS, et al.

Case No.: *******3565 Hearing Date: July 13, 2021

Plaintiffs Cindy Ambuehl and Anvis, Inc.’s application to seal is granted.

Defendant Christina Collins’s special motion to strike is continued to August 19, 2021 at 9:30 a.m.

Defendant Christina Collins (“Defendant”) moves to strike the 8^th (defamation) cause of action and Paragraph 94 from the 4^th cause of action for intentional interference with prospective economic advantage asserted by Plaintiffs Cindy Ambuehl (“Ambuehl”) and Anvis, Inc. (“Anvis”) (collectively, “Plaintiffs”) in their first amended complaint (“FAC”), pursuant to C.C.P. ;425.16. (Notice of Motion, pg. 2.) The Court notes the 8^th cause of action is brought only by Ambuehl, while the 4^th cause of action is brought by Plaintiffs together.

Plaintiffs filed a Notice of Lodging Unredacted Documents Under Seal as well as an Application to Seal Records Lodged with Opposition (“Application”) in connection with their opposition to the special motion to strike. The Court notes Exhibits 5, 7, 10, 11, 12, 13, 14, 15, 18, 19, and 20 [omitted from public filing in entirety] and Exhibits 9 and 16 [redacted versions in public filing] to the original Declaration of Ambuehl were conditionally lodged under seal as well Exhibit 6 to the Declaration of Sarah Kelly-Kilgore (“Kelly-Kilgore”). [The Notice of Application to Seal does not refer to Exhibit 16 to the Declaration of Ambuehl.] On June 14, 2021, the Court entered the parties’ Stipulation to Conditionally Seal Previously-Filed Supplemental Compendium of Declarations and Exhibits (“Stipulation”) as to documents Defendant filed on May 20, 2021, in support of her reply, pursuant to which the parties agreed Plaintiffs would file an application to seal as to the newly-filed exhibits within 10 days of the Court’s entry of the Stipulation. (Stipulation ¶5.) On June 24, 2021, Plaintiffs filed a Revised Declaration of Ambuehl that includes redacted versions of Exhibits 5, 7, 10, 11, 12, 13, 14, 15, 16, and 18. [The Court notes the public filing of the Revised Declaration includes Exhibits 19 and 20 in their unredacted form; accordingly, it appears Plaintiffs no longer seek an order sealing these Exhibits.] Plaintiffs also filed a Revised Declaration of Kelly-Kilgore in which Exhibit 6 is no longer redacted or removed; as such, it appears Plaintiffs no longer seek an order sealing Exhibit 6 to the Declaration of Kelly-Kilgore. On June 24, 2021, Plaintiffs filed an Amended and Supplemental Application to Seal (“Amended Application”) as to the records filed on May 7, 2021 and May 20, 2021, which were re-filed in redacted form on June 15, 2021 and July 1, 2021. (See 6/16/21 Minute Order.)

The instant ruling will address Plaintiffs’ Application to Seal .

Amended Application to Seal

In their Amended Application, which the Court considers as a supplement to the Application, Plaintiffs apply for an order sealing portions of exhibits filed in support of Plaintiffs’ opposition to Defendant’s special motion to strike as well as portions exhibits filed by Defendant in support of her reply to the opposition. (Application, pg. 2; Amended Application, pg. 2.) Specifically, Plaintiffs request the Court seal the following: (1) portions of Exhibits 5, 7, 10, 11, 12, 13, 14, 15, 16, and 18 to the Declaration of Ambuehl [redacted versions in publicly filed Revised Declaration]; and (2) portions of Exhibits CC [Ambuehl’s discovery responses], DD [Trade Secret Identification Statement (“Trade Secret Identification”)], GG [emails], and BBB [Defendant’s Objections to Trade Secret Identification to the Amended Supplemental Compendium of Declarations and Exhibits in Support of Defendant’s Motion (“Supplemental Compendium”) [redacted versions in public filing]. The Court notes the Amended Application only addresses Exhibits 10 and 11, without addressing the remaining redacted exhibits attached to the Declaration of Ambuehl, which the Court assumes Plaintiffs also request be filed under seal given Plaintiffs have filed them in a redacted manner. (Application, pg. 2; Amended Application, pgs. 7-9.)

Plaintiffs apply for an order sealing the redacted portions of the exhibits which they assert are comprised primarily of client names/lists, personal contact information, and confidential business information and/or trade secrets. (Application, pg. 4; Amended Application, pg. 7.)

Defendant’s 7/6/21 evidentiary objections to the Declaration of Kelly-Kilgore are overruled as to Nos. 1-11.

CRC Rule 2.551(a) provides, as follows: “A record must not be filed under seal without a court order. The court must not permit a record to be filed under seal based solely on the agreement or stipulation of the parties.”

CRC Rule 2.551(b)(1) provides, as follows: “A party requesting that a record be filed under seal must file a motion or an application for an order sealing the record. The motion or application must be accompanied by a memorandum and a declaration containing facts sufficient to justify the sealing.”

The Court notes that Plaintiffs’ motion is timely under CRC Rules 2.551(b)(3)(A)-(B) since, pursuant to the parties’ June 8, 2021 Stipulation and corresponding June 14, 2021 Court Order, Plaintiffs’ Amended Application was filed on June 24, 2021, less than ten days later and within the time as the Court had ordered.

CRC Rule 2.550(d) provides, as follows: “The court may order that a record be filed under seal only if it expressly finds facts that establish: (1) There exists an overriding interest that overcomes the right of public access to the record; (2) The overriding interest supports sealing the record; (3) A substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; (4) The proposed sealing is narrowly tailored; and (5) No less restrictive means exist to achieve the overriding interest.”

Plaintiffs sufficiently demonstrated that the redacted information contained in the Exhibits amounts to trade secrets, confidential business information, and client information, such that there exists an overriding interest that overcomes the right of the public access to the records; the overriding interest supports sealing the record, a substantial probability exists that the overriding interest will be prejudiced if the record is not sealed, the proposed sealing is narrowly tailored and no less restrictive means exist to achieve the overriding interest. Specifically, Ambuehl declared the information in Plaintiffs’ Exhibit GG, the Trade Secret Identification, and the client lists attached thereto took years to build and cultivate and creates sensitive and confidential information. (Decl. of Ambuehl ¶¶3, 49.) Plaintiffs assert that their overriding interests will be prejudiced if the redacted portions are not sealed because public access to such information would risk destroying their trade secret status and would harm Plaintiff’s competitive standing in the marketplace. (Amended Application, pgs. 10-11.) Plaintiffs further argue that the personal contact information, including the cell phone numbers of Defendant, clients, and third parties, should be sealed because it is protected by the right of privacy and there is an overriding interest that supports such personally identifying contact information. (Amended Application, pgs. 11-12.)

The proposed sealing is sufficiently narrowly tailored to only the portions of the documents containing trade secrets, contact information, and identifying information and maintaining this information under seal is the least restrictive means to protect Plaintiffs’ trade secrets and confidential business information including personal contact information of clients and third parties.

Defendant’s opposition takes issue with the lack of notice for the Amended Application; however, as discussed above, the Amended Application was timely pursuant to Court Order and the parties’ stipulation. (Opposition, pg. 7.) In addition, the Court finds that Plaintiffs did not waive confidentiality with respect to Defendant’s filed exhibits.

Based on the foregoing, Plaintiffs’ application to seal is granted.

Dated: July _____, 2021

Hon. Monica Bachner

Judge of the Superior Court

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