Judge David J. Cowan, Case Number: BC657947, Date: 2025-03-21 Tentative Ruling

TENTATIVE RULINGS ON ODS MOTION IN LIMINE (“MIL”) No. 25, AS WELL AS LUCANISH’S MIL Nos. 14, 15 and 16

O’Neil Digital Solutions, et al. v. James Lucanish, and related cross-complaint,

The Court has reviewed the motion and opposition filed in connection with each of the motions below and rules as follows:

ODS seeks to exclude under Evid. Code sec. 352 evidence of how it calculated its expenses in 2017 and thereafter where the Court has already determined that there were no irregularities in the reporting of expenses in 2015 and 2016 while Lucanish was still employed by ODS. ODS argues that Lucanish’s desire to raise this evidence is precluded by the prior ruling that was premised upon the same or similar claims. ODS argues further that Lucanish’s seeking to introduce this evidence through the guise of his damages claim (while disclaiming an intent to contest the accounting) is an indirect means of doing what he had already had the opportunity to do by way of the accounting phase of trial but elected not to do so. Lucanish disputes ODS’ characterization of what he intends to do and emphasizes that he does not intend to contest the numbers themselves but rather wishes to prove that the reason those operating numbers are what they are is that they are the product of ODS having changed the way it calculated its operating expenses in order to lower the amount available as a bonus that is premised on operating income – which would impact the amount of his damages. He contends that contract law permits him to rely on the same program that was in place when he was employed would continue post-termination of employment in calculating damages.

At the March 7, 2025 final status conference, the Court raised the following issues: In determining the amount of bonus income an employee may be entitled to in terms of damages for his claim for wrongful termination of employment, may an employer permissibly change the terms of the bonus program for employees after the termination of employment? Is a company bound to keep its programs the same or under what circumstances may it change them for independent business reasons? To what extent can an employee expect the same program terms? What facts would support an employee contending that the change in terms was a fraud or done improperly to lower the available bonus. Should the court be able to decide this issue before the jury hears what might otherwise be irrelevant evidence concerning the changes and, if so, based on what authority? Neither side has provided any answer or applicable authority to these issues. What evidence may properly be heard may hinge on the foregoing issues, together with the predicate that the changes were newly implemented in 2017.

Further briefing to be filed by March 27, 2025. Continued to April 1, 2025 at 8:30 a.m.

Lucanish argues that he would be unduly prejudiced by ODS adding 275 exhibits to the Exhibit List. He contends that to do so is untimely given how long this case has been pending, the earlier submission of an exhibit list that did not have these exhibits when this case was assigned to this courtroom and the proximity of the April 1 trial date. In opposition, ODS argues that the Court ordered the parties to submit a new exhibit list given the proceedings that have occurred since the assignment to this courtroom that have changed what would be the subject of trial, that the procedure for this issue during the earlier proceedings was to address on a document by document basis during trial and that therefore the Court should do the same now and that moreover such exclusion would be unfair to ODS where Lucanish has added 57 new exhibits. Further, ODS contends that Lucanish could not be surprised by these documents where they were all produced in discovery or in connection with earlier proceedings.

The Court believes the proposed wholesale exclusion of these documents fails to address whether there may be a reason why a particular document is relevant and should be received if otherwise admissible. In addition, the Court does not find that their addition at this time is necessarily unduly prejudicial where there have been proceedings that have re-focused the issues for this jury phase of trial. The parties were not expressly limited to the introduction of documents on their prior Exhibit List. The Court had proposed the Exhibit List be submitted earlier but the parties agreed it should be deferred given other decisions to be made in the case.

No. 15 (Disclosure of confidential ODS information for purposes of tort causes of action)

Lucanish argues that ODS may not permissibly use evidence as to alleged misappropriation of trade secret information to prove its tort causes of action (as those would be preempted by CUTSA) even if ODS can introduce this evidence for purposes of its breach of contract cause of action. Lucanish notes that on June 8, 2023, this Court sustained his demurrer to those causes of action without leave to amend (after the court had earlier (by judge Duff-Lewis) denied ODS’ motion for judgment on the pleadings (without prejudice to potential amendment) as to an earlier version of those causes of action.[1] In opposition, ODS argues that the Court cannot grant this motion where this same evidence would come in for permissible purposes; i.e., on the breach of contract cause of action. Further, ODS argues use of this misappropriation of trade secret evidence is not preempted where the causes of action have underlying contentions separate and apart from misappropriation of trade secret data.

ODS’ arguments have merit, however, ODS fails to recognize this Court’s ruling on the demurrer. These causes of action are no longer pending. Hence, the concern in the motion is no longer relevant.

Lucanish argues his management style at ODS is irrelevant to whether ODS terminated him. Lucanish points to the deposition testimony of Scott O’Neil. Scott O’Neil testified that the final reason for the termination was that “I’d basically been stabbed in the back...Well, there was a buildup of issues that I was working with him on to alter the way he was managing the company, but the final reason was what I stated.” He also stated that these other issues “did not play a part in [his] reason for firing him.” ODS argues in opposition that there is evidence Lucanish apparently intends to present to the jury as to the improper motives of Scott O’Neil in terminating Lucanish. ODS seeks to be able to counter those claims by showing how Scott O’Neil sought to address what he perceived as Lucanish’s poor management style. Finally, ODS argues that even if that evidence prejudices Lucanish’s case, the issue is whether it is unduly prejudicial. ODS argues it is not “undue” because it is central to the many competing cross-allegations.

The motion is not directed at “specific” evidence, as required by the Local Rule 3.57(a)(1). Evidence of “management style” is an amorphous term and could be applied to considerable conduct that may be at issue. Moreover, wrongful termination is not the sole issue in this case. Lucanish does not address that his management style will likely arise in connection with ODS’ cause of action for breach of contract. Further, even leaving that aside, Lucanish would read out of Scott O’Neil’s testimony as to the “buildup.” Even assuming the termination decision itself was not due to his management style, the related claims as to ODS’ motivations and Lucanish’s claims for damages in tort will need to address the surrounding circumstances – which would include management style issues. Hence, the Court cannot rule out the relevance of such evidence altogether. That said, Lucanish will be able to impeach Scott O’Neil if he testifies contrary to his deposition testimony as to the termination itself.

[1] One of the reasons the Court gave for not granting leave to amend was that there not time to do so before then then scheduled trial date. In the considerable time-period between that date and the currently scheduled date, ODS did not seek permission to amend.