This case was last updated from Los Angeles County Superior Courts on 01/18/2021 at 20:44:23 (UTC).

CR CREATIVE SERVICES INC VS HAROLD BRIONES ET AL

Case Summary

On 03/29/2018 CR CREATIVE SERVICES INC filed a Contract - Other Contract lawsuit against HAROLD BRIONES. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are HOLLY J. FUJIE, MARY H. STROBEL and ROBERT S. DRAPER. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****0170

  • Filing Date:

    03/29/2018

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Other Contract

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

HOLLY J. FUJIE

MARY H. STROBEL

ROBERT S. DRAPER

 

Party Details

Plaintiffs, Petitioners, Cross Defendants and Not Classified By Court

CR CREATIVE SERVICES INC.

CARLOS RITTNER AN INDIVIDUAL

ROES 1 THROUGH 30 INCLUSIVE

CARLOS RITTNER AN

RITTNER CARLOS

B & R COMMERCE INC.

BRIONES HAROLD

Defendants, Respondents, Cross Plaintiffs and Not Classified By Court

DOES 1 TO 50

B & R COMMERCE INC.

BRIONES HAROLD

Attorney/Law Firm Details

Plaintiff, Petitioner and Cross Defendant Attorneys

GREGORY KEITH M. ESQ.

CHUNG ANDREW IN-YOUNG

GREGORY KEITH MICHAEL ESQ.

BERGSTEN ROBERT T

Defendant and Respondent Attorneys

WAGNER CHARLES W.

LEE W. DAN

LEE ASHLEY J.

Defendant and Cross Plaintiff Attorneys

LEE ASHLEY J.

WAGNER CHARLES

 

Court Documents

Reply - REPLY BRIEF IN SUPPORT OF EX PARTE APPLICATION

9/24/2020: Reply - REPLY BRIEF IN SUPPORT OF EX PARTE APPLICATION

Minute Order - MINUTE ORDER (HEARING ON EX PARTE APPLICATION TO DEEM OPERATIVE PLEADINGS A...)

9/28/2020: Minute Order - MINUTE ORDER (HEARING ON EX PARTE APPLICATION TO DEEM OPERATIVE PLEADINGS A...)

Declaration - DECLARATION OF NEWIN BRIONES, HOWARD CASTELLON HAROLD BRIONES, OMAR BRIONES, AND ASHLEY J. LEE IN SUPPORT OF DEFENDANTS HAROLD BRIONES AND B&R COMMERCE'S MOTION FOR SUMMARY JUDGMENT

7/20/2020: Declaration - DECLARATION OF NEWIN BRIONES, HOWARD CASTELLON HAROLD BRIONES, OMAR BRIONES, AND ASHLEY J. LEE IN SUPPORT OF DEFENDANTS HAROLD BRIONES AND B&R COMMERCE'S MOTION FOR SUMMARY JUDGMENT

Motion for Summary Judgment

6/19/2020: Motion for Summary Judgment

Separate Statement

6/19/2020: Separate Statement

Minute Order - MINUTE ORDER (INFORMAL DISCOVERY CONFERENCE (IDC))

12/10/2019: Minute Order - MINUTE ORDER (INFORMAL DISCOVERY CONFERENCE (IDC))

Minute Order - MINUTE ORDER (INFORMAL DISCOVERY CONFERENCE (IDC))

11/19/2019: Minute Order - MINUTE ORDER (INFORMAL DISCOVERY CONFERENCE (IDC))

Declaration - DECLARATION OF ALMA CHANG IN SUPPORT OF MOTIONS

10/31/2019: Declaration - DECLARATION OF ALMA CHANG IN SUPPORT OF MOTIONS

Declaration - DECLARATION OF ALMA CHANG IN SUPPORT OF PLAINTIFFS MOTIONS

10/31/2019: Declaration - DECLARATION OF ALMA CHANG IN SUPPORT OF PLAINTIFFS MOTIONS

Separate Statement

10/31/2019: Separate Statement

Opposition - OPPOSITION TO EX PARTE APPLICATION TO COMPEL ATTENDANCE

10/1/2019: Opposition - OPPOSITION TO EX PARTE APPLICATION TO COMPEL ATTENDANCE

Ex Parte Application - EX PARTE APPLICATION FOR AN ORDER COMPELLING THE DEPOSITIONS OF ROY MESEN AND CARLOS HERNANDEZ AND FOR MONETARY SANCTIONS IN THE AMOUNT OF $2,980

10/2/2019: Ex Parte Application - EX PARTE APPLICATION FOR AN ORDER COMPELLING THE DEPOSITIONS OF ROY MESEN AND CARLOS HERNANDEZ AND FOR MONETARY SANCTIONS IN THE AMOUNT OF $2,980

Motion to Quash - MOTION TO QUASH SUBPOENA TO AUTO INSURANCE SPECIALISTS, LLC OR ALTERNATIVELY MOTION FOR PROTECTIVE ORDER

8/6/2019: Motion to Quash - MOTION TO QUASH SUBPOENA TO AUTO INSURANCE SPECIALISTS, LLC OR ALTERNATIVELY MOTION FOR PROTECTIVE ORDER

Minute Order - MINUTE ORDER (CASE MANAGEMENT CONFERENCE)

3/29/2019: Minute Order - MINUTE ORDER (CASE MANAGEMENT CONFERENCE)

Case Management Statement

11/19/2018: Case Management Statement

Minute Order - Minute Order (Case Management Conference)

11/20/2018: Minute Order - Minute Order (Case Management Conference)

DARAFLON OF JAMIE N. FURT IN SUPPORT OF: 1. DEMURRER BY PLAINTIFF AND CROSA. DEFCTIDAN CR CREATISE SERVICES. INC. AND CROSS-DEFENDANT CARLOS RITTNER TO DCLCNDANTS AND CROSSCOMPLAINANTA HAROLD HRIONES

8/8/2018: DARAFLON OF JAMIE N. FURT IN SUPPORT OF: 1. DEMURRER BY PLAINTIFF AND CROSA. DEFCTIDAN CR CREATISE SERVICES. INC. AND CROSS-DEFENDANT CARLOS RITTNER TO DCLCNDANTS AND CROSSCOMPLAINANTA HAROLD HRIONES

PEREMPTORY CHALLENGE TO JUDICIAL OFFICER (CODE CIV. PROC, 170.6)

4/4/2018: PEREMPTORY CHALLENGE TO JUDICIAL OFFICER (CODE CIV. PROC, 170.6)

133 More Documents Available

 

Docket Entries

  • 03/18/2021
  • Hearing03/18/2021 at 08:30 AM in Department 78 at 111 North Hill Street, Los Angeles, CA 90012; Order to Show Cause Re: Dismissal (Settlement)

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  • 01/11/2021
  • Docketat 08:30 AM in Department 78; Order to Show Cause Re: Dismissal (Settlement) - Held - Continued

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  • 01/11/2021
  • DocketMinute Order ( (Order to Show Cause Re: Dismissal (Settlement))); Filed by Clerk

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  • 12/21/2020
  • DocketNotice of Change of Firm Name; Filed by Harold Briones (Defendant); B & R Commerce, Inc. (Defendant)

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  • 12/21/2020
  • DocketNotice (of Unavailability of Counsel); Filed by Harold Briones (Defendant); B & R Commerce, Inc. (Defendant)

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  • 11/25/2020
  • Docketat 3:30 PM in Department 78; Informal Discovery Conference (IDC) - Not Held - Advanced and Vacated

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  • 11/09/2020
  • Docketat 08:30 AM in Department 78; Hearing on Motion for Summary Adjudication (- Plaintiff and Cross-Defendants, CR Creative Services, Inc. and Carlos Rittner) - Not Held - Advanced and Vacated

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  • 11/09/2020
  • Docketat 08:30 AM in Department 78; Hearing on Motion for Summary Judgment (- x-complainants B& R Commerce, Inc. and Harold Briones - ID #888689378695) - Not Held - Advanced and Vacated

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  • 11/09/2020
  • DocketMinute Order ( (Hearing on Motion for Summary Adjudication - Plaintiff and Cr...)); Filed by Clerk

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  • 11/03/2020
  • Docketat 09:30 AM in Department 78; Jury Trial (, 7 day estimate,) - Not Held - Advanced and Continued - by Court

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225 More Docket Entries
  • 04/04/2018
  • DocketChallenge To Judicial Officer - Peremptory (170.6); Filed by CR Creative Services, Inc. (Plaintiff)

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  • 04/04/2018
  • DocketPEREMPTORY CHALLENGE TO JUDICIAL OFFICER (CODE CIV. PROC, 170.6)

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  • 04/03/2018
  • DocketORDER TO SHOW CAUSE HEARING

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  • 04/03/2018
  • DocketOSC-Failure to File Proof of Serv; Filed by Clerk

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  • 04/03/2018
  • DocketSUMMONS

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  • 04/03/2018
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 04/03/2018
  • DocketSummons; Filed by CR Creative Services, Inc. (Plaintiff)

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  • 04/03/2018
  • DocketNOTICE OF CASE MANAGEMENT CONFERENCE

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  • 03/29/2018
  • DocketComplaint; Filed by null

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  • 03/29/2018
  • DocketCOMPLAINT

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Tentative Rulings

Case Number: BC700170    Hearing Date: July 15, 2020    Dept: 78

Superior Court of California

County of Los Angeles

Department 78

CR CREATIVE SERVICES, et al.;

Plaintiffs,

vs.

harold BRIONES, et al.;

Defendants.

AND RELATED CROSS ACTIONS

Case No.:

BC700170

Hearing Date:

July 14, 2020

[TENTATIVE] RULING RE:

Plaintiff and Cross-Defendants CR Creative Services, Inc. and carlos rittner’s motion for summary judgment, or in the alternative, summary adjudication

Plaintiff and Cross-Defendants CR Creative Services, Inc. and Carlos Rittner’s Motion for Summary Judgment, or in the alternative, Summary Adjudication of the First Amended Cross-Complaint is DENIED as to the First, Second, Third, and Fourth Causes of Action.

Factual Background

This is an action for breach of contract. The Complaint alleges as follows. Plaintiff CR Creative Services, Inc. (“CRCS”) employed Defendant Harold Briones (“Briones”), who also owned shares with CRCS. (Complaint ¶ 8.) Briones terminated his ownership interest in CRCS and left the company to run a competing company, Defendant B&R Commerce, Inc. (“B&R”). (Complaint ¶ 8.) In doing so Briones and B&R misappropriated CRCS’s trade secrets and made false representations to CRCS’s clients in order to gain an unfair competitive edge. (Complaint ¶ 8.)

B&R and Briones’s Cross-Complaint (“XC”) alleges as follows. Cross-Defendants CRCS and Carlos Rittner (“Rittner”), its principal shareholder, have harassed B&R’s employees by stalking them, chasing them through the streets, parking a truck in front of their facilities in an obstructive manner, and interfering with deliveries. (XC ¶ 16.) They have further spread false allegations among B&R customers about its misappropriation of trade secrets and purportedly inadequate insurance coverage. (XC ¶ 17.) Cross-Defendants have further provided false insurance certificates to customers, and have wrongfully induced an employee of B&R, Juan Mejia, to leave the company and disclose B&R’s trade secrets. (XC ¶ 19.)

procedural history

CRCS filed the Complaint on March 29, 2018, alleging six causes of action:

  1. Breach of Written Contract

  2. Breach of Fiduciary Duty

  3. Misappropriation of Trade Secrets

  4. Intentional Interference with Contract

  5. Intentional Interference with Prospective Economic Advantage

  6. Violation of Business & Professions Code § 17200

Defendants Briones and B&R filed an Answer and Cross-Complaint against CRCS and Rittner on June 11, 2018, the latter alleging five causes of action:

  1. Defamation

  2. Intentional Interference with Contractual Relations

  3. Intentional Interference with Prospective Business Advantage

  4. Violation of Business & Professions Code § 17200

  5. Misappropriation of Trade Secrets

On September 4, 2018, Briones and B&R filed a First Amended Cross-Complaint (“FAXC”) alleging four causes of action:

  1. Defamation

  2. Intentional Interference with Contractual Relations

  3. Intentional Interference with Prospective Economic Advantage

  4. Misappropriation of Trade Secrets.

On September 5, 2018, the Court overruled Plaintiff and Cross-Defendant CRCS’s Demurrer to the Cross-Complaint and denied the Motion to Strike.

On September 17, 2018, CRCS and Rittner filed an Answer to the FAXC.

On April 30, 2020, CRCS and Rittner filed the instant Motion for Summary Judgment of the FAXC.

On June 29, 2020, Briones and B&R filed an Opposition.

On July 9, 2020, CRCS and Rittner filed a tardy Reply.

Discussion

  1. JUDICIAL NOTICE

Where the motion is based on a matter of which the court may take judicial notice pursuant to Section 452 or 453 of the Evidence Code, the matter shall be specified in the notice of motion, or in the supporting points and authorities, except as the court may otherwise permit. (California Code of Civil Procedure §438(d)). Any request for judicial notice must be made in a separate document listing the items for which notice is requested. (CRC 3.1113(l)). Judicial notice may be taken of¿“(c) Official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States. (d) Records of (1) any court of this state or (2) any court of record of the United States or of any state of the United States.” (Evid. Code § 452.)¿

Cross-Complainants request judicial notice of various documents: (1) B&R’s articles of incorporation, (2)-(4) deposition transcripts, (5) Mejia’s job application, (6) CRCS’s responses to B&R’s special interrogatories, (7) B&R’s insurance coverage, (8) CRCS’s sales summary 2007-2015, (9), CRCS’s sales by customer type (2014-2020).

The Court GRANTS Request No. 1. (Evid. Code § 452(c)-(d); Tucker v. Pacific Bell Mobile Services (2012) 208 Cal.App.4th 201, 218.) The Court DENIES the remainder as items not judicially noticeable.

  1. OBJECTIONS

Cross-Complainants submit various objections to evidence submitted by Cross-Defendants in support of their motion. All requests are OVERRULED.

  1. MOTION FOR SUMMARY JUDGMENT

A party may move for summary judgment “if it is contended that the action has no merit or that there is no defense to the action or proceeding.” (Code Civ. Proc. § 437c, subd. (a).) “[I]f all the evidence submitted, and all inferences reasonably deducible from the evidence and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law,” the moving party will be entitled to summary judgment. (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.) A motion for summary adjudication may be made by itself or as an alternative to a motion for summary judgment and shall proceed in all procedural respects as a motion for summary judgment. (Code Civ. Proc. § 437c, subd. (f)(2).)

The moving party bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact, and if he does so, the burden shifts to the opposing party to make a prima facie showing of the existence of a triable issue of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850; accord Code Civ. Proc. § 437c, subd. (p)(2).) To establish a triable issue of material fact, the party opposing the motion must produce substantial responsive evidence. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.)

If the plaintiff is the moving party, the plaintiff must prove each element of the cause of action entitling the party to judgment on that cause of action.” (Paramount Petroleum Corp. v. Superior Court (2014) 227 Cal.App.4th 226, 241.) However, a plaintiff is no longer required in California to disprove any defense asserted by the defendant in addition to proving each element of his own cause of action. (Troyk v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1321.)

Neither a moving or responding party may rely on the mere allegations or denials of its pleadings. A moving party must submit specific admissible evidence showing that the responding party cannot establish at least one element of his, her or its cause of action or defense. The responding party, to defeat the motion, must submit specific admissible evidence showing that a triable issue of material fact does exist as to that element of the cause of action or defense. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.)

The “Golden Rule” on a motion for summary judgment or summary adjudication is that “if [a fact] is not set forth in the separate statement, it does not exist.” (Zimmerman, Rosenfeld, Gersh & Leeds LLP v. Larson (2005) 131 Cal.App.4th 1466, 1477, citing United Community Church v. Garcin (1991) 231 Cal.App.3d 327, 337.).

The Plaintiffs and Cross-Complainants CRCS and Rittner move for summary judgment/adjudication as to all causes of action.

  1. First Cause of Action - Defamation

“The elements of a defamation claim are (1) a publication that is (2) false, (3) defamatory, (4) unprivileged, and (5) has a natural tendency to injure or causes special damage.” (Wong v. Jing (2010) 189 Cal.App.4th 1354, 1369.) To plead a cause of action for slander (oral defamation), one “must set forth either the specific words or the substance of the allegedly defamatory statements.” (Comstock v. Aber (2012) 212 Cal.App.4th 931, 948.)

Here, the FAXC alleges that Cross-Defendants falsely told B&R’s customers that it lacked insurance coverage and had stolen their employees and trade secrets. (FAXC ¶ 18.) Further, the FAXC alleges that Cross-Defendants “repeatedly informed customers and potential customers” of B&R that B&R was using trade secret information belonging to CRCS, that B&R did not have insurance coverage, and that B&R stole CRCS’s employees. (FAXC ¶ 17.) Lastly, the FAXC alleges that in 2018 CRCS informed a client of B&R that B&R damaged a sofa belonging the client. (FAXC ¶ 19.)

Cross-Defendants argue that they are entitled to summary adjudication of this cause of action because any alleged statements made by CRCS were true, Cross-Defendants could not verify that B&R had workers’ compensation coverage through Travelers, and the statements to Gregory Upson did not cause any harm. (Motion at pp. 12-13.)

In Opposition, in terms of the facts, CRCS argues that in May 2018, Briones discovered that on February 5, 2018, Cross-Defendant Carlos Rittner (“Rittner”), the owner of CRCS, told B&R’s customer Kerry Joyce (“Joyce”) that B&R had no insurance coverage to conduct its business. (Oppo. at p. 13.) Also, that beginning March 2018, Rittner falsely accused B&R of being negligent and damaging its clients’ property during delivery. (Oppo. at p. 13.) B&R further contends that Briones discovered in May 2018 that between 2015 and 2018 Rittner told B&R customers Kerry Joyce, Gregory Upson, Windsor Smith, Elizabeth Dinkel, and Mary McDonald that B&R had no insurance coverage. (Oppo. at p. 13.) Lastly, B&R contends that from 2015-2018, Rittner accused B&R/Briones of stealing CRCS’s trade secrets and website source code. (Oppo. at p. 14.)

First, the Court finds that Cross-Defendants only present evidence addressing two allegations in the FAXC: (1) an alleged statement by CRCS to Kerry Joyce regarding B&R’s insurance coverage, and (2) an alleged statement by Rittner to Gregory Upson regarding Cross-Complainants hiring unlicensed drivers and not carrying insurance. (UMF ¶¶ 18, 29, 34.) The record presented in Cross-Defendants’ Separate Statement makes no mention of the remaining allegations in this cause of action relating to damages during delivery, and/or stealing of trade secrets and website source codes. Accordingly, Cross-Defendants have not established a prima facie case against this cause of action.

Should the Court consider Cross-Defendants arguments as to the remaining statements addressed by its evidence: Cross-Defendants present a prima facie case that (1) the statement to Kerry Joyce regarding insurance was true, and (2) the statement to Gregory Upson (“Upson”) did not cause any damage because Upson “chalked it up to competition” and paid the statements “no mind” and continued to do business with B&R. (UMF ¶¶ 22, 25, 27, 29, 30, 33.)

As to the second statement, as a matter of law, a party claiming that a statement is defamatory is not required to prove that the statement caused actual damage. The party only needs to prove that it tends to cause damage. “A slander that falls within the first four subdivisions of Civil Code section 46 is slander per se and require no proof of actual damages.” (Regalia v. The Nethercutt Collection (2009) 172 Cal.App.4th 361, 367.) The third subdivision of section 46 requires proof that the statement would tend to harm one’s professional reputation: “3. Tends directly to injure him in respect to his office, profession, trade or business, either by imputing to him general disqualification in those respects which the office or other occupation peculiarly requires, or by imputing something with reference to his office, profession, trade, or business that has a natural tendency to lessen its profits[.]” (Civ. Code, § 46.)

Here, the alleged statement was a statement from CRCS to Upson that “B and R Commerce hired unlicensed drivers, and that they carried no insurance on their trucks and vans.” (UMF ¶ 29.) Such as statement includes language which, on its face, would have a natural tendency to harm a person’s reputation because it would cause current and potential clients to doubt the professionalism, respectability, and recoverability in the face of an incident of B&R. (Regalia v. The Nethercutt Collection, supra, 172 Cal.App.4th at 368.) Accordingly, as a matter of law, the fact that Upson “paid [the statement] no mind” and that the statement did not cause actual damage to CRCS is not relevant for purposes of determining whether . Cross-Complainants may maintain the cause of action. Defendants’ argument as to the element of damage is without merit.

As to the falsity of the statements made to Kerry Joyce (“Joyce”) and Upson, regarding insurance, Cross-Complainants have presented evidence that they possessed the following insurance policies between 2015 and 2018: Commercial Auto Insurance with Progressive (2/13/2015 - 8/13/2015; 5/19/19- 5/19/20); Infinity Commercial Auto Insurance (Auto Insurance Specialist) (2/23/2016- 2/23/2017); Scottsdale Indemnity Company (5/19/2017 - 5/19/2018); (ii) General Liability Insurance with United Specialty Insurance Company (8/19/2015 - 8/19/2016); Specialty Insurance (9/29/2016 - 9/29/2017; 9/29/2017 - 9/29/2018); Scottsdale Indemnity Company (5/19/2017 - 5/19/2018); and (iii) Workers’ Compensation/Employers Liability Insurance with Employers (2/14/2018 - 2/14/2019). (Cross-Complainants’ Material Fact “CCMF” ¶ 87; Briones Decl. ¶ 12.) This evidence at a minimum establishes that there is a triable issue of material fact as to the truth of the statements regarding insurance.

Accordingly, the Motion for Summary Adjudication of the First Cause of Action is DENIED.

  1. Second Cause of Action – Intentional Interference with Contractual Relations

“The elements which a plaintiff must plead to state the cause of action for intentional interference with contractual relations are (1) a valid contract between plaintiff and a third party; (2) defendant's knowledge of this contract; (3) defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126.)

The Second Cause of Action is based on the same facts as in the First Cause of Action. The FAXC alleges that the Cross-Defendants “have made false statements to customers of [B&R] […] with the intent of causing such customers to contract with CRCS rather than with [B&R][.]” (FAXC ¶¶ 17-21, 26.)

Cross-Defendants argue that this claim fails because the statements regarding B&R’s lack of insurance are true.(Motion at pp. 13-14.) Cross-Defendants further contend that there is no triable issue as to the first element because “none of the clients had exclusive contracts with B&R since they used both CRCS and B&R.” (Motion at p. 13.)

As addressed above, there is a triable issue of material fact as to whether the statements regarding insurance were true or false. The case cited by Cross-Defendants, Francis v. Dun & Bradstreet, Inc. (1992) 3 Cal.App.4th 535, fails to support theirarguments. In Francis, the court found that various causes of action, including a cause of action for interference with contractual relations were barred because they were based on an alleged defamatory statement that Plaintiffs admitted was actually true. (Id. at 540.) Here, as there is a dispute of fact as to the truth or falsity of the statements, Cross-Defendants fails to make a prima facie showing. Further, Cross-Defendants fail to cite any law for their argument that there is not a valid contract, for purposes of the first element, if such contract is non-exclusive. (Motion at p. 14.) Accordingly, this argument fails, as well.

Lastly, Cross-Defendants argue that “B&R has not identified any contracts that were breached because of CRCS’ conduct.” (Motion at p. 14.) However, they do not present any evidence to support this argument. The only evidence Cross-Defendants present is that Joyce continued to use B&R for work after the allegedly defamatory statement by Rittner (UMF ¶ 28), and that George Smith continues to be a client after hearing Cross-Defendants’ allegedly defamatory statements about B&R using unlicensed drivers and not carrying insurance. (UMF ¶¶ 29, 33.) Cross-Defendants do not present any evidence as to the contracts of B&R’s other clients. In fact, Cross-Defendants present evidence that implies, to the contrary, that B&R has lost many client contracts. (UMF ¶¶ 38-39 [“B&R attributes these collective actions to clients discontinuing business with B&R…Other than Kerry Joyce, none of the clients have specified why they are not working with B&R”].) Cross-Defendants cite no law for their contention that they did not interfere with B&R’s contracts because the clients did not have “exclusive contracts with B&R since they used both CRCS and B&R.” (UMF ¶ 10, Motion at p. 14.)

Therefore, the Court finds that Cross-Defendants have not made a prima facie showing that there is no triable issue of material fact.

Accordingly, the Motion for Summary Adjudication of the Second Cause of Action is DENIED.

  1. Third Cause of Action – Intentional Interference with Prospective Business Advantage

“The elements of the tort of intentional interference with prospective economic advantage (business interference) are (1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of that relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.” (Popescu v. Apple Inc. (2016) 1 Cal.App.5th 39, 63.)

For the Third Cause of Action, the FAXC alleges the same facts as the above causes of action, that Cross-Defendants made false statements to customers regarding insurance, with the intent of causing the customers to cease doing business with Cross-Complainants. (FAXC ¶ 30.)

Cross-Defendants argue that Cross-Complainants cannot present any evidence for the third element, that CRCS engaged in any wrongful act that interfered with probable future economic benefit. (Motion at p. 15.) They contend that Cross-Complainants have no evidence that clients discontinued relationships due to any conduct by Cross-Defendants. (Motion at p. 15.) Cross-Defendants lastly argue soliciting at-will employees for employment is not an independently wrongful act that imposes tort liability. (Motion at p. 15.)

However, as with the Third Cause of Action, Cross-Defendants do not present any evidence to establish a prima facie case that Cross-Complainants cannot present any evidence for the third element. The only evidence that Cross-Defendants offer is that B&R’s former clients have not specified why they are not working with B&R. (UMF ¶ 39.) In fact, Cross-Defendants presented evidence as to the existence of a triable issue of material fact: B&R has evidence that Rittner made statements to Joyce regarding CRCS allegedly lacking insurance (UMF ¶¶ 18, 34); and client Upson reports of an instance where “CRCS purportedly blocked B&R’s access to the warehouse” (UMF ¶ 31)

Therefore, Cross-Defendants have failed to establish a prima facie showing that there is no triable issue of material fact for this cause of action.

Accordingly, Motion for Summary Adjudication of the Third Cause of Action is DENIED.

  1. Fourth Cause of Action – Misappropriation of Trade Secrets

“Under the UTSA, a prima facie claim for misappropriation of trade secrets requires the plaintiff to demonstrate: (1) the plaintiff owned a trade secret, (2) the defendant acquired, disclosed, or used the plaintiff's trade secret through improper means, and (3) the defendant's actions damaged the plaintiff.” (Sargent Fletcher, Inc. v. Able Corp. (2003) 110 Cal.App.4th 1658, 1665; Civ.Code, § 3426.1.)

The FAXC alleges that Cross-Defendants misappropriated information regarding B&R’s “customers’ identities, contact information, preferences and financial information, as well as confidential information related to the source code of its website.” (FAXC ¶ 34.) Further, the FAXC alleges that Cross-Defendants took this information by “inducing” Juan Mejia (“Mejia”), an employee of B&R to work for CRCS and then disclose the trade secrets to Cross-Defendants. (FAXC ¶ 22.)

Cross-Defendants argue that Cross-Complainants have no evidence to demonstrate that they possessed a trade secret or that Cross-Defendants wrongfully acquired, disclosed, or used such trade secret. (Motion at p. 10.) They contend that Mejia’s access to a laptop and passwords at B&R does not constitute a protectable trade secret. (Motion at p. 10.) They further argue that B&R did not attempt to change the password after Mejia left, which means that B&R has not attempted to keep their information secret. (Motion at pp. 10-11.)

To support this argument Cross-Defendants present evidence only that Mejia was not in a managerial or supervisory role (UMF ¶ 13), that B&R has not changed its passwords to Mejia’s accounts (UMF ¶ 16), and that CRCS did not ask Mejia to use any confidential or proprietary information. (UMF ¶ 14.)

“Customer lists and related information may constitute protectable trade secrets.” (Gemini Aluminum Corp. v. California Custom Shapes, Inc. (2002) 95 Cal.App.4th 1249, 1263.) However, there still remains the issue regarding secrecy. “The test for a trade secret is whether the matter sought to be protected is information (1) that is valuable because it is unknown to others and (2) that the owner has attempted to keep secret.” (Amgen Inc. v. Health Care Services (2020) 47 Cal.App.5th 716, 734, review filed (June 18, 2020).) Here, to the second element, Cross-Defendants’ singal piece of evidence s that B&R did not change its passwords. (UMF ¶16). However, this evidence is provided without any context as to: which types of accounts were still accessible, when CRCS became aware of this, and why CRCS is aware that the passwords were not changed.

Based on this limited evidence, Cross-Defendants have failed to establish a prima facie case that there is not atriable issue of material fact on this cause of action.

Accordingly, the Motion for Summary Adjudication of the Fourth Cause of Action is DENIED.

  1. Unfair Competition

Cross-Defendants also make an argument against a cause of action for Unfair Competition. However, this is not a cause of action in the FAXC. Accordingly, the Court does not address this argument.

ACCORDINGLY, Cross-Defendants’ Motion For Summary Judgment is DENIED.

DATED: July 14, 2020

________________________________

Hon. Robert S. Draper

Judge of the Superior Court

Case Number: BC700170    Hearing Date: July 14, 2020    Dept: 78

Superior Court of California

County of Los Angeles

Department 78

CR CREATIVE SERVICES, et al.;

Plaintiffs,

vs.

harold BRIONES, et al.;

Defendants.

AND RELATED CROSS ACTIONS

Case No.:

BC700170

Hearing Date:

July 14, 2020

[TENTATIVE] RULING RE:

Plaintiff and Cross-Defendants CR Creative Services, Inc. and carlos rittner’s motion for summary judgment, or in the alternative, summary adjudication

Plaintiff and Cross-Defendants CR Creative Services, Inc. and Carlos Rittner’s Motion for Summary Judgment, or in the alternative, Summary Adjudication of the First Amended Cross-Complaint is DENIED as to the First, Second, Third, and Fourth Causes of Action.

Factual Background

This is an action for breach of contract. The Complaint alleges as follows. Plaintiff CR Creative Services, Inc. (“CRCS”) employed Defendant Harold Briones (“Briones”), who also owned shares with CRCS. (Complaint ¶ 8.) Briones terminated his ownership interest in CRCS and left the company to run a competing company, Defendant B&R Commerce, Inc. (“B&R”). (Complaint ¶ 8.) In doing so Briones and B&R misappropriated CRCS’s trade secrets and made false representations to CRCS’s clients in order to gain an unfair competitive edge. (Complaint ¶ 8.)

B&R and Briones’s Cross-Complaint (“XC”) alleges as follows. Cross-Defendants CRCS and Carlos Rittner (“Rittner”), its principal shareholder, have harassed B&R’s employees by stalking them, chasing them through the streets, parking a truck in front of their facilities in an obstructive manner, and interfering with deliveries. (XC ¶ 16.) They have further spread false allegations among B&R customers about its misappropriation of trade secrets and purportedly inadequate insurance coverage. (XC ¶ 17.) Cross-Defendants have further provided false insurance certificates to customers, and have wrongfully induced an employee of B&R, Juan Mejia, to leave the company and disclose B&R’s trade secrets. (XC ¶ 19.)

procedural history

CRCS filed the Complaint on March 29, 2018, alleging six causes of action:

  1. Breach of Written Contract

  2. Breach of Fiduciary Duty

  3. Misappropriation of Trade Secrets

  4. Intentional Interference with Contract

  5. Intentional Interference with Prospective Economic Advantage

  6. Violation of Business & Professions Code § 17200

Defendants Briones and B&R filed an Answer and Cross-Complaint against CRCS and Rittner on June 11, 2018, the latter alleging five causes of action:

  1. Defamation

  2. Intentional Interference with Contractual Relations

  3. Intentional Interference with Prospective Business Advantage

  4. Violation of Business & Professions Code § 17200

  5. Misappropriation of Trade Secrets

On September 4, 2018, Briones and B&R filed a First Amended Cross-Complaint (“FAXC”) alleging four causes of action:

  1. Defamation

  2. Intentional Interference with Contractual Relations

  3. Intentional Interference with Prospective Economic Advantage

  4. Misappropriation of Trade Secrets.

On September 5, 2018, the Court overruled Plaintiff and Cross-Defendant CRCS’s Demurrer to the Cross-Complaint and denied the Motion to Strike.

On September 17, 2018, CRCS and Rittner filed an Answer to the FAXC.

On April 30, 2020, CRCS and Rittner filed the instant Motion for Summary Judgment of the FAXC.

On June 29, 2020, Briones and B&R filed an Opposition.

On July 9, 2020, CRCS and Rittner filed a tardy Reply.

Discussion

  1. JUDICIAL NOTICE

Where the motion is based on a matter of which the court may take judicial notice pursuant to Section 452 or 453 of the Evidence Code, the matter shall be specified in the notice of motion, or in the supporting points and authorities, except as the court may otherwise permit. (California Code of Civil Procedure §438(d)). Any request for judicial notice must be made in a separate document listing the items for which notice is requested. (CRC 3.1113(l)). Judicial notice may be taken of¿“(c) Official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States. (d) Records of (1) any court of this state or (2) any court of record of the United States or of any state of the United States.” (Evid. Code § 452.)¿

Cross-Complainants request judicial notice of various documents: (1) B&R’s articles of incorporation, (2)-(4) deposition transcripts, (5) Mejia’s job application, (6) CRCS’s responses to B&R’s special interrogatories, (7) B&R’s insurance coverage, (8) CRCS’s sales summary 2007-2015, (9), CRCS’s sales by customer type (2014-2020).

The Court GRANTS Request No. 1. (Evid. Code § 452(c)-(d); Tucker v. Pacific Bell Mobile Services (2012) 208 Cal.App.4th 201, 218.) The Court DENIES the remainder as items not judicially noticeable.

  1. OBJECTIONS

Cross-Complainants submit various objections to evidence submitted by Cross-Defendants in support of their motion. All requests are OVERRULED.

  1. MOTION FOR SUMMARY JUDGMENT

A party may move for summary judgment “if it is contended that the action has no merit or that there is no defense to the action or proceeding.” (Code Civ. Proc. § 437c, subd. (a).) “[I]f all the evidence submitted, and all inferences reasonably deducible from the evidence and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law,” the moving party will be entitled to summary judgment. (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.) A motion for summary adjudication may be made by itself or as an alternative to a motion for summary judgment and shall proceed in all procedural respects as a motion for summary judgment. (Code Civ. Proc. § 437c, subd. (f)(2).)

The moving party bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact, and if he does so, the burden shifts to the opposing party to make a prima facie showing of the existence of a triable issue of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850; accord Code Civ. Proc. § 437c, subd. (p)(2).) To establish a triable issue of material fact, the party opposing the motion must produce substantial responsive evidence. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.)

If the plaintiff is the moving party, the plaintiff must prove each element of the cause of action entitling the party to judgment on that cause of action.” (Paramount Petroleum Corp. v. Superior Court (2014) 227 Cal.App.4th 226, 241.) However, a plaintiff is no longer required in California to disprove any defense asserted by the defendant in addition to proving each element of his own cause of action. (Troyk v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1321.)

Neither a moving or responding party may rely on the mere allegations or denials of its pleadings. A moving party must submit specific admissible evidence showing that the responding party cannot establish at least one element of his, her or its cause of action or defense. The responding party, to defeat the motion, must submit specific admissible evidence showing that a triable issue of material fact does exist as to that element of the cause of action or defense. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.)

The “Golden Rule” on a motion for summary judgment or summary adjudication is that “if [a fact] is not set forth in the separate statement, it does not exist.” (Zimmerman, Rosenfeld, Gersh & Leeds LLP v. Larson (2005) 131 Cal.App.4th 1466, 1477, citing United Community Church v. Garcin (1991) 231 Cal.App.3d 327, 337.).

The Plaintiffs and Cross-Complainants CRCS and Rittner move for summary judgment/adjudication as to all causes of action.

  1. First Cause of Action - Defamation

“The elements of a defamation claim are (1) a publication that is (2) false, (3) defamatory, (4) unprivileged, and (5) has a natural tendency to injure or causes special damage.” (Wong v. Jing (2010) 189 Cal.App.4th 1354, 1369.) To plead a cause of action for slander (oral defamation), one “must set forth either the specific words or the substance of the allegedly defamatory statements.” (Comstock v. Aber (2012) 212 Cal.App.4th 931, 948.)

Here, the FAXC alleges that Cross-Defendants falsely told B&R’s customers that it lacked insurance coverage and had stolen their employees and trade secrets. (FAXC ¶ 18.) Further, the FAXC alleges that Cross-Defendants “repeatedly informed customers and potential customers” of B&R that B&R was using trade secret information belonging to CRCS, that B&R did not have insurance coverage, and that B&R stole CRCS’s employees. (FAXC ¶ 17.) Lastly, the FAXC alleges that in 2018 CRCS informed a client of B&R that B&R damaged a sofa belonging the client. (FAXC ¶ 19.)

Cross-Defendants argue that they are entitled to summary adjudication of this cause of action because any alleged statements made by CRCS were true, Cross-Defendants could not verify that B&R had workers’ compensation coverage through Travelers, and the statements to Gregory Upson did not cause any harm. (Motion at pp. 12-13.)

In Opposition, in terms of the facts, CRCS argues that in May 2018, Briones discovered that on February 5, 2018, Cross-Defendant Carlos Rittner (“Rittner”), the owner of CRCS, told B&R’s customer Kerry Joyce (“Joyce”) that B&R had no insurance coverage to conduct its business. (Oppo. at p. 13.) Also, that beginning March 2018, Rittner falsely accused B&R of being negligent and damaging its clients’ property during delivery. (Oppo. at p. 13.) B&R further contends that Briones discovered in May 2018 that between 2015 and 2018 Rittner told B&R customers Kerry Joyce, Gregory Upson, Windsor Smith, Elizabeth Dinkel, and Mary McDonald that B&R had no insurance coverage. (Oppo. at p. 13.) Lastly, B&R contends that from 2015-2018, Rittner accused B&R/Briones of stealing CRCS’s trade secrets and website source code. (Oppo. at p. 14.)

First, the Court finds that Cross-Defendants only present evidence addressing two allegations in the FAXC: (1) an alleged statement by CRCS to Kerry Joyce regarding B&R’s insurance coverage, and (2) an alleged statement by Rittner to Gregory Upson regarding Cross-Complainants hiring unlicensed drivers and not carrying insurance. (UMF ¶¶ 18, 29, 34.) The record presented in Cross-Defendants’ Separate Statement makes no mention of the remaining allegations in this cause of action relating to damages during delivery, and/or stealing of trade secrets and website source codes. Accordingly, Cross-Defendants have not established a prima facie case against this cause of action.

Should the Court consider Cross-Defendants arguments as to the remaining statements addressed by its evidence: Cross-Defendants present a prima facie case that (1) the statement to Kerry Joyce regarding insurance was true, and (2) the statement to Gregory Upson (“Upson”) did not cause any damage because Upson “chalked it up to competition” and paid the statements “no mind” and continued to do business with B&R. (UMF ¶¶ 22, 25, 27, 29, 30, 33.)

As to the second statement, as a matter of law, a party claiming that a statement is defamatory is not required to prove that the statement caused actual damage. The party only needs to prove that it tends to cause damage. “A slander that falls within the first four subdivisions of Civil Code section 46 is slander per se and require no proof of actual damages.” (Regalia v. The Nethercutt Collection (2009) 172 Cal.App.4th 361, 367.) The third subdivision of section 46 requires proof that the statement would tend to harm one’s professional reputation: “3. Tends directly to injure him in respect to his office, profession, trade or business, either by imputing to him general disqualification in those respects which the office or other occupation peculiarly requires, or by imputing something with reference to his office, profession, trade, or business that has a natural tendency to lessen its profits[.]” (Civ. Code, § 46.)

Here, the alleged statement was a statement from CRCS to Upson that “B and R Commerce hired unlicensed drivers, and that they carried no insurance on their trucks and vans.” (UMF ¶ 29.) Such as statement includes language which, on its face, would have a natural tendency to harm a person’s reputation because it would cause current and potential clients to doubt the professionalism, respectability, and recoverability in the face of an incident of B&R. (Regalia v. The Nethercutt Collection, supra, 172 Cal.App.4th at 368.) Accordingly, as a matter of law, the fact that Upson “paid [the statement] no mind” and that the statement did not cause actual damage to CRCS is not relevant for purposes of determining whether . Cross-Complainants may maintain the cause of action. Defendants’ argument as to the element of damage is without merit.

As to the falsity of the statements made to Kerry Joyce (“Joyce”) and Upson, regarding insurance, Cross-Complainants have presented evidence that they possessed the following insurance policies between 2015 and 2018: Commercial Auto Insurance with Progressive (2/13/2015 - 8/13/2015; 5/19/19- 5/19/20); Infinity Commercial Auto Insurance (Auto Insurance Specialist) (2/23/2016- 2/23/2017); Scottsdale Indemnity Company (5/19/2017 - 5/19/2018); (ii) General Liability Insurance with United Specialty Insurance Company (8/19/2015 - 8/19/2016); Specialty Insurance (9/29/2016 - 9/29/2017; 9/29/2017 - 9/29/2018); Scottsdale Indemnity Company (5/19/2017 - 5/19/2018); and (iii) Workers’ Compensation/Employers Liability Insurance with Employers (2/14/2018 - 2/14/2019). (Cross-Complainants’ Material Fact “CCMF” ¶ 87; Briones Decl. ¶ 12.) This evidence at a minimum establishes that there is a triable issue of material fact as to the truth of the statements regarding insurance.

Accordingly, the Motion for Summary Adjudication of the First Cause of Action is DENIED.

  1. Second Cause of Action – Intentional Interference with Contractual Relations

“The elements which a plaintiff must plead to state the cause of action for intentional interference with contractual relations are (1) a valid contract between plaintiff and a third party; (2) defendant's knowledge of this contract; (3) defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126.)

The Second Cause of Action is based on the same facts as in the First Cause of Action. The FAXC alleges that the Cross-Defendants “have made false statements to customers of [B&R] […] with the intent of causing such customers to contract with CRCS rather than with [B&R][.]” (FAXC ¶¶ 17-21, 26.)

Cross-Defendants argue that this claim fails because the statements regarding B&R’s lack of insurance are true.(Motion at pp. 13-14.) Cross-Defendants further contend that there is no triable issue as to the first element because “none of the clients had exclusive contracts with B&R since they used both CRCS and B&R.” (Motion at p. 13.)

As addressed above, there is a triable issue of material fact as to whether the statements regarding insurance were true or false. The case cited by Cross-Defendants, Francis v. Dun & Bradstreet, Inc. (1992) 3 Cal.App.4th 535, fails to support theirarguments. In Francis, the court found that various causes of action, including a cause of action for interference with contractual relations were barred because they were based on an alleged defamatory statement that Plaintiffs admitted was actually true. (Id. at 540.) Here, as there is a dispute of fact as to the truth or falsity of the statements, Cross-Defendants fails to make a prima facie showing. Further, Cross-Defendants fail to cite any law for their argument that there is not a valid contract, for purposes of the first element, if such contract is non-exclusive. (Motion at p. 14.) Accordingly, this argument fails, as well.

Lastly, Cross-Defendants argue that “B&R has not identified any contracts that were breached because of CRCS’ conduct.” (Motion at p. 14.) However, they do not present any evidence to support this argument. The only evidence Cross-Defendants present is that Joyce continued to use B&R for work after the allegedly defamatory statement by Rittner (UMF ¶ 28), and that George Smith continues to be a client after hearing Cross-Defendants’ allegedly defamatory statements about B&R using unlicensed drivers and not carrying insurance. (UMF ¶¶ 29, 33.) Cross-Defendants do not present any evidence as to the contracts of B&R’s other clients. In fact, Cross-Defendants present evidence that implies, to the contrary, that B&R has lost many client contracts. (UMF ¶¶ 38-39 [“B&R attributes these collective actions to clients discontinuing business with B&R…Other than Kerry Joyce, none of the clients have specified why they are not working with B&R”].) Cross-Defendants cite no law for their contention that they did not interfere with B&R’s contracts because the clients did not have “exclusive contracts with B&R since they used both CRCS and B&R.” (UMF ¶ 10, Motion at p. 14.)

Therefore, the Court finds that Cross-Defendants have not made a prima facie showing that there is no triable issue of material fact.

Accordingly, the Motion for Summary Adjudication of the Second Cause of Action is DENIED.

  1. Third Cause of Action – Intentional Interference with Prospective Business Advantage

“The elements of the tort of intentional interference with prospective economic advantage (business interference) are (1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of that relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.” (Popescu v. Apple Inc. (2016) 1 Cal.App.5th 39, 63.)

For the Third Cause of Action, the FAXC alleges the same facts as the above causes of action, that Cross-Defendants made false statements to customers regarding insurance, with the intent of causing the customers to cease doing business with Cross-Complainants. (FAXC ¶ 30.)

Cross-Defendants argue that Cross-Complainants cannot present any evidence for the third element, that CRCS engaged in any wrongful act that interfered with probable future economic benefit. (Motion at p. 15.) They contend that Cross-Complainants have no evidence that clients discontinued relationships due to any conduct by Cross-Defendants. (Motion at p. 15.) Cross-Defendants lastly argue soliciting at-will employees for employment is not an independently wrongful act that imposes tort liability. (Motion at p. 15.)

However, as with the Third Cause of Action, Cross-Defendants do not present any evidence to establish a prima facie case that Cross-Complainants cannot present any evidence for the third element. The only evidence that Cross-Defendants offer is that B&R’s former clients have not specified why they are not working with B&R. (UMF ¶ 39.) In fact, Cross-Defendants presented evidence as to the existence of a triable issue of material fact: B&R has evidence that Rittner made statements to Joyce regarding CRCS allegedly lacking insurance (UMF ¶¶ 18, 34); and client Upson reports of an instance where “CRCS purportedly blocked B&R’s access to the warehouse” (UMF ¶ 31)

Therefore, Cross-Defendants have failed to establish a prima facie showing that there is no triable issue of material fact for this cause of action.

Accordingly, Motion for Summary Adjudication of the Third Cause of Action is DENIED.

  1. Fourth Cause of Action – Misappropriation of Trade Secrets

“Under the UTSA, a prima facie claim for misappropriation of trade secrets requires the plaintiff to demonstrate: (1) the plaintiff owned a trade secret, (2) the defendant acquired, disclosed, or used the plaintiff's trade secret through improper means, and (3) the defendant's actions damaged the plaintiff.” (Sargent Fletcher, Inc. v. Able Corp. (2003) 110 Cal.App.4th 1658, 1665; Civ.Code, § 3426.1.)

The FAXC alleges that Cross-Defendants misappropriated information regarding B&R’s “customers’ identities, contact information, preferences and financial information, as well as confidential information related to the source code of its website.” (FAXC ¶ 34.) Further, the FAXC alleges that Cross-Defendants took this information by “inducing” Juan Mejia (“Mejia”), an employee of B&R to work for CRCS and then disclose the trade secrets to Cross-Defendants. (FAXC ¶ 22.)

Cross-Defendants argue that Cross-Complainants have no evidence to demonstrate that they possessed a trade secret or that Cross-Defendants wrongfully acquired, disclosed, or used such trade secret. (Motion at p. 10.) They contend that Mejia’s access to a laptop and passwords at B&R does not constitute a protectable trade secret. (Motion at p. 10.) They further argue that B&R did not attempt to change the password after Mejia left, which means that B&R has not attempted to keep their information secret. (Motion at pp. 10-11.)

To support this argument Cross-Defendants present evidence only that Mejia was not in a managerial or supervisory role (UMF ¶ 13), that B&R has not changed its passwords to Mejia’s accounts (UMF ¶ 16), and that CRCS did not ask Mejia to use any confidential or proprietary information. (UMF ¶ 14.)

“Customer lists and related information may constitute protectable trade secrets.” (Gemini Aluminum Corp. v. California Custom Shapes, Inc. (2002) 95 Cal.App.4th 1249, 1263.) However, there still remains the issue regarding secrecy. “The test for a trade secret is whether the matter sought to be protected is information (1) that is valuable because it is unknown to others and (2) that the owner has attempted to keep secret.” (Amgen Inc. v. Health Care Services (2020) 47 Cal.App.5th 716, 734, review filed (June 18, 2020).) Here, to the second element, Cross-Defendants’ singal piece of evidence s that B&R did not change its passwords. (UMF ¶16). However, this evidence is provided without any context as to: which types of accounts were still accessible, when CRCS became aware of this, and why CRCS is aware that the passwords were not changed.

Based on this limited evidence, Cross-Defendants have failed to establish a prima facie case that there is not atriable issue of material fact on this cause of action.

Accordingly, the Motion for Summary Adjudication of the Fourth Cause of Action is DENIED.

  1. Unfair Competition

Cross-Defendants also make an argument against a cause of action for Unfair Competition. However, this is not a cause of action in the FAXC. Accordingly, the Court does not address this argument.

ACCORDINGLY, Cross-Defendants’ Motion For Summary Judgment is DENIED.

DATED: July 14, 2020

________________________________

Hon. Robert S. Draper

Judge of the Superior Court