Judge: David A. Rosen, Case: 21GDCV00852, Date: 2022-09-30 Tentative Ruling
Case Number: 21GDCV00852 Hearing Date: September 30, 2022 Dept: E
Hearing Date: 9/30/2022
– 2:00pm
Case No: 21GDCV00852
Trial Date: 11/14/2022
Case Name:
Complaint: TV PRO GEAR INC, a Nevada Corporation, fka, IPTV
INTERNATIONAL, INC. v. IVAN GONZALEZ, an individual; ISTREAMU LLC, a California
Limited Liability Company; and DOES 1-50
First Amended Cross-Complaint (FACC): IVAN GONZALEZ, an individual; IVAN GONZALEZ dba NAVINOGA PRODUCTIONS
v. ANDREW MAISNER, individually and as owner of TV PRO GEAR INC., a Nevada
corporation fka IPTV INTERNATIONAL, INC; TV PRO GEAR, INC., a Nevada
corporation
TENTATIVE
RULING ON CROSS DEFENDANTS’ MOTION FOR SUMMARY ADJUDICATION
Moving Party: Cross-Defendants,
TV Pro Gear, Inc. (“TVPG”) and Andrew Maisner (“Maisner”) (Collectively Cross-Defendants)
Responding Party: Cross-Complainant, Navinoga Productions
Opposition and Reply Submitted
Proof of service timely filed
(CRC 3.1300(c)): ok
Correct Address (CCP §§ 1013,
1013(a)): ok
75/80 Days
Under 437c (2), notice
of the motion and supporting papers shall be served on all other parties to the
action at least 75 days before the time appointed for hearing. If the notice is
served by mail, the required 75-day period of notice shall be increased by 5
days if the place of address is within the State of California. (CCP
§437c(a)(2).) If the notice is served by facsimile transmission, express mail,
or another method of delivery providing for overnight delivery, the required
75-day period of notice shall be increased by two court days. (CCP
§437c(a)(2).)
Here, the instant motion appears
to be untimely. The
instant hearing is for September 30, 2022. Seventy-five (75) days before the
hearing would be Sunday July 17, 2022. When adding two court days, since
the instant motion was served via e-mail, the instant motion would need to have
been served by Thursday, July 14, 2022. However, the instant motion was served
on Friday, July 15, 2022, which is a day late.
30 Days
The motion shall be heard no later than 30
days before the date of trial, unless the court for good cause orders
otherwise. The filing of the motion shall not extend the time within which a
party must otherwise file a responsive pleading. (CCP §437c(a)(3).)
Here, the trial date
is for 11/14/2022. Thirty (30) days before the date of trial would be Sunday,
October 15, 2022. Since the instant motion is scheduled to be heard on
September 30, 2022, the instant motion is not scheduled to be heard later than
30 days before the date of trial.
BACKGROUND
On June 18, 2021, TV Pro Gear, Inc
(“TVPG”) filed a complaint against Ivan Gonzalez and IStreamU LLC for: 1)
Violation of California Trade Secrets Act; 2) Breach of Fiduciary Duty; 3)
Inducing Breach of Fiduciary Duty; 4) Breach of Contract; 5) Conversion; and 6)
Unfair Competition (B&P Code §17200).
Ivan Gonzalez was the former Vice
President and Broadcast Sales Engineer at TVPG. On August 3, 2021, Ivan Gonzalez
and Ivan Gonzalez dba Navinoga Productions filed a Cross-Complaint against
Andrew Maisner and TVPG alleging 1) Fraudulent Concealment and Deceit; 2)
Actual Fraud; 3) B&P Code §17200; 4) Breach of Written Contract; 5) Breach
of Oral Contract; 6) Failure to Pay Wages (Overtime & Vacation); 7) Failure
to reimburse Business Expenses; 8) Failure to Pay All Wages Earned Upon
Discharge; and 9) Theft of Trade Secrets.
On October 29, 2021, this Court
ruled on Cross-Defendants’ demurrer to the Cross-Complaints’ ninth cause of
action for theft of trade secrets and Cross-Defendants’ motion to strike. The
Court sustained the demurrer with leave to amend, and the Court ruled that as
to Cross-Defendants’ motion to strike, it was granted in part, and the Court noted
the modification made on the tentative ruling as to the motion to strike.
On November 17, 2021, Cross-Complainants,
Ivan Gonzalez, individual, and Ivan Gonzalez dba Navinoga Productions, filed a
First Amended Cross-Complaint (“FACC”) against Andrew Maisner and TVPG alleging
causes of action for: (1) Fraudulent Concealment and Deceit, (2) Actual Fraud,
(3) Bus. And Prof. Code §1720, (4) Breach of Contract (Written), (5) Breach of
Contract (Oral), (6) Failure to Pay Wages (Overtime) (Vacation), (7) Failure to
Reimburse Business Expenses, (8) Failure to Pay All Wages Earned Upon
Discharge, and (9) Theft of Trade Secrets.
Cross-Defendants now move for an
order granting summary adjudication as to Cross-Complainants’ ninth cause of
action in the FACC for theft of trade secrets.
LEGAL STANDARD
Code of Civil Procedure section
437c, subdivision (f)(1) provides that “A party may move for summary
adjudication as to one or more causes of action within an action, one or more
affirmative defenses, one or more claims for damages, or one or more issues of
duty, if the party contends that the cause of action has no merit, that there
is no affirmative defense to the cause of action, that there is no merit to an
affirmative defense as to any cause of action, that there is no merit to a
claim for damages, as specified in Section 3294 of the Civil Code, or that one
or more defendants either owed or did not owe a duty to the plaintiff or
plaintiffs. A motion for summary adjudication shall be granted only if it
completely disposes of a cause of action, an affirmative defense, a claim for
damages, or an issue of duty.” (CCP §437c(f)(1).
A cause of action has no merit if
either of the following exists: (1) One or more of the elements of the cause of
action cannot be separately established, even if that element is separately
pleaded, or (2) A defendant establishes an affirmative defense to that cause of
action. (CCP §437c(o)(1)-(2).)
A defendant or cross-defendant has
met his or her burden of showing that a cause of action has no merit if the
party has shown that one or more elements of the cause of action, even if not
separately pleaded, cannot be established, or that there is a complete defense
to the cause of action. Once the defendant or cross-defendant has met that
burden, the burden shifts to the plaintiff or cross-complainant to show that a
triable issue of one or more material facts exists as to the cause of action or
a defense thereto. The plaintiff or cross-complainant shall not rely upon the
allegations or denials of its pleadings to show that a triable issue of
material fact exists but, instead, shall set forth the specific facts showing
that a triable issue of material fact exists as to the cause of action or a
defense thereto. (CCP §437c(p)(2).)
“Supporting and opposing affidavits
or declarations shall be made by a person on personal knowledge, shall set
forth admissible evidence, and shall show affirmatively that the affiant is
competent to testify to the matters stated in the affidavits or declarations.
An objection based on the failure to comply with the requirements of this
subdivision, if not made at the hearing, shall be deemed waived.” (CCP
§437c(d).)
ANALYSIS
Ninth Cause of Action – Theft of Trade Secrets
One
who seeks protection against the use or disclosure of a trade secret must plead
facts showing: (1) The existence of subject matter which is capable of
protection as a trade secret; (2) The secret was disclosed to the defendant, or
to a person for whose conduct a defendant is liable, under circumstances giving
rise to a contractual or other legally imposed obligation on the part of the
disclosee not to use or disclose the secret to the detriment of the discloser;
and (3) If the defendant is an employee or former employee of the plaintiff or
if the defendant is charged with having received the secret from an employee or
former employee, the facts alleged must also show that the public policy in
favor of the protection of the complainant’s interest in maintaining the secret
outweighs the interest of the employee in using his knowledge to support
himself in other employment. (Diodes, Inc. v. Franzen (1968) 260
Cal.App.2d 244, 250.)
(1) The Existence of Subject Matter which
is Capable of Protection as a Trade Secret
Under the Uniform Trade Secrets Act (UTSA) (Civ. Code,
§ 3426 et seq.), a trade secret is "information, including a formula,
pattern, compilation, program, device, method, technique, or process, that:
(1) Derives independent economic value, actual or
potential, from not being generally known to the public or to other persons who
can obtain economic value from its disclosure or use; and
(2) Is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy." (Civ. Code, § 3426.1,
subd. (d).)
“The issue of whether information constitutes a trade
secret is a question of fact.” (Global Protein Products, Inc. v. Le (2019)
42 Cal.App.5th 352, 367 citing Thompson v. Impaxx, Inc. (2003) 113
Cal.App.4th 1425, 1430.)
Discussion – The Existence of Subject
Matter which is Capable of Protection as a Trade Secret
Preliminary Matter
As
a preliminary matter, moving party, Cross-Defendants, argue on the bottom of
page 10 of its motion that Navinoga fails to demonstrate the existence of trade
secrets. Cross-Defendants cite the legal standard to adequately allege the
existence of trade secrets. Cross-Defendants then go into arguments on page 11
of how the allegations of what Cross-Complainants are alleging to be a trade
secret is too broad and vague and cannot support a trade secrets claim.
Further, in Reply, Cross-Defendants argue how Navinoga’s evidence shows what
Navinoga is claiming trade secret protection over things that cannot be
considered trade secrets as a matter of law.
Cross-Defendants’ argument on this issue in the moving
papers and the Reply seems to be one which would be appropriate on demurrer –
that Cross-Complainants cannot allege misappropriation of trade secrets as a
matter of law because those allegations are not protectable. However, the issue
of whether information constitutes a trade secret is a question of fact. (Global
Protein Products, Inc. v. Le (2019) 42 Cal.App.5th 352, 367 citing Thompson
v. Impaxx, Inc. (2003) 113 Cal.App.4th 1425, 1430.) The instant motion is a
motion for summary adjudication, not a demurrer. In Opposition,
Cross-Complainants submitted the declaration of Gonzalez, and paragraphs 22-39
of the declaration indicate what Gonzalez believes to be are the trade secrets,
therefore at the very least, Opposition brings up a triable issue of fact.
In its Reply brief, moving party argues that the processes, techniques, and
CAD Drawings identified by Gonzales cannot or do not constitute trade secrets
as a matter of law. But based on the case law cited above, whether information
constitutes a trade secret is a question of fact, not a question of law. Moreover,
cross-complainant’s objections to the new evidence, or documentation,
cross-defendant attempts to introduce in the Reply are well-taken. Therefore, moving
cross-defendant’s argument is unpersuasive.
Irrelevant Issues in Separate Statement
In
Cross-Defendants’ Separate Statement, Cross-Defendants’ undisputed material
facts numbered 1-13 all pertain to TVPG. These statements are irrelevant as to Navinoga’s
claim in its FACC that TVPG misappropriated Navinoga’s trade secrets. The fact
that TVPG presumably appears to be arguing from 1-13 that it potentially also had
its own trade secrets is entirely independent of whether Navinoga had its own
trade secrets.
Ownership of Trade Secrets
Cross-Defendants
argue that Navinoga cannot establish that it owned trade secrets because
Gonzalez was an employee of TVPG, and, by contract or law, all designs and
creations of an employee belong to the employer. This, of course, ignores the
time-sequence underlying this case.
Thus, even if the Court assumes movant’s statement of
the law to be true, this issue is disputed, and there are triable issues of
material fact. As seen in Cross-Complainants’ Separate Statement numbered 13-23.
Cross-Complainant submitted the Declaration of Ivan Gonzalez, and this
declaration raises issues of triable fact as to the relationship between
Gonzalez, TVPG, and Navinoga. (See Declaration Gonzalez ¶40-47 as to the
relationship between the entities.)
Reasonable Efforts to Maintain the Secrecy
of Information
Cross-Defendants
argue that Navinoga did not take reasonable efforts to maintain the secrecy of
its alleged trade secrets.
This issue is in dispute, and therefore there is a
triable issue of fact. Cross-Complainants mention the efforts to maintain
secrecy in paragraphs 31-33 of Cross-Complainants’ separate statement. Further,
while Cross-Defendants bring up in their Reply separate statement that these
issues are unsupported by evidence, this shows there is a dispute as to a
material fact. (See Gonzalez declaration ¶22-47.)
Movant’s Reply
states that Opposition’s evidence is unsupported by evidence, submitting a
“rough draft” of a deposition to presumably show that Opposition can’t support
their claims. But, by arguing these factual assertions, of both Movant and
cross-complainant, Movant presents at least triable issues of disputed material
facts; whether Navinoga possessed trade secrets, whether it engaged in
reasonable efforts to maintain their secrecy, and whether Movant
misappropriated any of Navinoga’s alleged trade secrets.
(2) The Secret Was Disclosed to the
Defendant, or to a person for whose conduct a defendant is liable, under circumstances
giving rise to a contractual or other legally imposed obligation on the part of
the disclosee not to use or disclose the secret to the detriment of the
discloser
Misappropriation is defined as:
"(1) Acquisition of a trade secret of another by
a person who knows or has reason to know that the trade secret was acquired by
improper means; or
(2) Disclosure or use of a trade secret of another
without express or implied consent by a person who:
(A) Used improper means to acquire knowledge
of the trade secret; or
(B) At the time of
disclosure or use, knew or had reason to know that his or her knowledge of the
trade secret was:
(i)
Derived from or through a person who had utilized improper means to acquire it;
(ii)
Acquired under circumstances giving rise to a duty to maintain its secrecy or
limit its use; or
(iii)
Derived from or through a person who owed a duty to the person seeking relief
to maintain its secrecy or limit its use; or
(C) Before a material
change of his or her position, knew or had reason to know that it was a trade
secret and that knowledge of it had been acquired by accident or mistake
(Civ. Code, § 3426.1, subd. (b).)
Discussion – Element 2 – Misappropriation
Cross-Defendants argue that Navinoga cannot point to
any evidence that its trade secrets were misappropriated by TVPG.
Cross Defendants appear to attack the allegations in
the FACC. Once again, there is, at the very least, a dispute as to material
facts. See Cross-Complainants’ separate statement numbered 33 and declaration
of Gonzalez ¶48-51.
(3) If the defendant is an employee or
former employee of the plaintiff or if the defendant is charged with having
received the secret from an employee or former employee, the facts alleged must
also show that the public policy in favor of the protection of the
complainant’s interest in maintaining the secret outweighs the interest of the
employee in using his knowledge to support himself in other employment.
This issue is not addressed by either party, but the
Court notes that Navinoga seems to claim that at least some of its alleged
trade secrets were developed prior to its and Gonzales’ employment by Movant.
TENTATIVE RULING:
Cross-Defendants arguments as to the evidence did not
shift the burden of proof on this Motion. Cross-Defendants failed to show that Cross-Complainants
cannot establish an element of Navinoga’s trade secret claim. Further, even if
the Court were to assume that Cross-Defendants did shift their burden to
Cross-complainants, Cross-Complainants raised triable issues of material facts
that are in dispute as to the elements for misappropriation of trade secrets
based on the Declaration of Ivan Gonzalez. The draft deposition testimony cited
by Movant does not foreclose this. Further,
Cross-Defendants’ separate statement brings up many issues that are irrelevant
to Navinoga’s claim for misappropriation of trade secrets, and many parts of
Cross-Defendants’ declaration of Maisner lack foundation or are disputed by the
Declaration of Ivan Gonzalez. Lastly, Cross-Defendants’ motion for summary
adjudication was not timely.
Motion for summary adjudication as to the ninth cause
of action in the FACC is DENIED.