Judge Elaine W. Mandel, Case 22SMCV01361 2023-03-02 Tentative Ruling

Judge: Elaine W. Mandel, Case: 22SMCV01361, Date: 2023-03-02 Tentative Ruling

Case Number: 22SMCV01361 Hearing Date: March 2, 2023 Dept: P

Tentative Ruling

Finkton v. Bar-Ziv, Case No. 22SMCV01361

Hearing Date March 2, 2023

Defendants’ Special Motion to Strike and Demurrer/Motion to Strike

Plaintiff Finkton alleges defendant Bar-Ziv conspired to have him involuntarily psychiatrically committed at UCLA per Welf. & Inst. Code §5150. Finkton alleges Bar-Ziv used the hospitalization as a pretext to wrongfully fire Finkton from Blue Sparrow, a hedge fund, and deprive him of his stake in the fund’s investments.

Bar-Ziv and Blue Sparrow move to strike the first through fourth and seventh causes of action for wrongful termination, interference with contractual relations, defamation, breach of the covenant of good faith and faith and fair dealing and violation of the California confidentiality of medical information act, arguing these claims arise out of activity protected by the anti-SLAPP statute. They also demur to the first, fourth, sixth, and seventh causes of action in the first amended complaint (FAC) and move to strike the request for punitive damages.

Courts resolving anti-SLAPP motions under Cal. Civ. Code §425.16 follow a two-step process. Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 733. In prong one, the court determines whether the conduct underlying plaintiff’s cause of action arises from defendant’s constitutional rights of free speech or petition. Baral v. Schnitt (2016) 1 Cal. 5th 376, 395. This is a threshold issue; if moving party fails to show the conduct is constitutionally protected, the court need not address prong two. Jarrow, supra, 31 Cal.4th at 733.

Under prong two, the burden shifts to plaintiff to prove a legally sufficient claim and to prove with admissible evidence a probability plaintiff will prevail. E.g., Navellier v. Sletten (2002) 29 Cal.4th 82, 88. To fulfill prong two, plaintiff cannot rely on the complaint’s allegations but must produce evidence admissible at trial. HMS Capital, Inc. v. Lawyers Title Co. (2004) 118 Cal.App.4th 204, 212.

When a cause of action is based on “mixed conduct” – i.e. allegations of both protected and unprotected activity – the protected conduct is subject to an anti-SLAPP motion unless it is “merely incidental” to the unprotected conduct. Haight Ashbury Free Clinics, Inc. v. Happening House Ventures (2010) 184 Cal.App.4th 1539, 1551. When a mixed cause of action contains allegations of protected activity that, on their own, could support a cause of action, those allegations are subject to an anti-SLAPP motion. Id.

Termination Claims

The anti-SLAPP statute protects conduct in furtherance of the constitutional rights of free speech or petition, including communications made as part of an official proceeding or in connection with a matter of public interest. E.g., Averill v. Superior Court (1996) 42.Cal.App.4th 1170, 1174-1175. Communications with an official agency intended to induce the agency to initiate action are part of an “official proceeding[,]” and therefore protected by the anti-SLAPP statute. Lee v. Fick (2005) 135 Cal.App.4th 89, 96. This includes communications to the police. Comstock v. Aber (2012) 212 Cal.App.4th 931, 941. For the first prong to be fulfilled, the “speech or petition activity itself must be the wrong complained of, not just evidence of liability or a step leading to some different act for which liability is asserted[.]” Swanson v. County of Riverside (2019) 36 Cal.App.5th 361, 372. To qualify for anti-SLAPP protection, a targeted communication must be one of public, rather than private, interest. Weinberg v. Feisel (2003) 110 Cal.App.4th 1122, 1132.

Defendants argue communications with UCLA, a public hospital, are analogous to the protected communications in Fick and Comstock. They argue communications to UCLA regarding Finkton’s mental health are protected.

The first and fourth causes of action for wrongful termination and breach of the covenant of good faith and fair dealing are based on allegations that defendants wrongfully fired plaintiff following his involuntary commitment to deprive him of the benefits of his employment contract. FAC ¶¶58, 60, 62, 73, 86. Neither cause of action is grounded in a protected communication, even if such communications are alleged as evidence of liability. The first and fourth cause of action are based on claims that defendants improperly fired plaintiff and deprived him of earned equity in Blue Sparrow. Terminating an employee and/or breaching an employment contract is not constitutionally protected free speech or petitioning activity. The gravamen of the first and fourth causes of action is not protected activity, so the first prong of the anti-SLAPP statute is not fulfilled as to those claims. DENIED as to the first and fourth causes of action.

Defamation and Defamation-derived Claims

The second, third and seventh causes of action are based on alleged statements and/or disclosures defendants made to third parties regarding plaintiff’s mental health. These causes of action are based on communications. If the communications are related to a matter of public interest or a public figure, the first prong of the anti-SLAPP statute is fulfilled. See Weinberg, supra, 110 Cal.App.4th at 1132. Plaintiff claims he is not a public figure, so his mental health is not a matter of public concern.

The FAC alleges Finkton is a “philanthropist, and activist, working to eradicate poverty in the United States through his foundation[,]” that he was in the process of negotiating with a venture capital firm for an $80 million investment with Blue Sparrow, and that he was an advisor to a data company valued at $81 million (see, e.g., FAC, paras. 1, 4, 36, 66-67). Plaintiff’s own allegations present him as someone responsible for huge sums and involved in public policy. Therefore, statements regarding his mental health and fitness for his professional and philanthropic roles are matters of public interest and protected under the anti-SLAPP statute.

Since defendants fulfil the first prong, the burden shifts to plaintiff to show a reasonable probability of prevailing at trial. As plaintiff presents no evidence, he fails to fulfill the second prong. GRANTED as to the second, third, and seventh causes of action.

Demurrer

Defendants Bar-Ziv and Blue Sparrow demur to the first, fourth, sixth, and seventh causes of action. Since the anti-SLAPP motion was granted as to the seventh cause of action, the demurrer is MOOT as to that cause of action.

First Cause of Action for Wrongful Termination

When an employment contract contains no specified term, the employment is terminable at will. Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 678. Termination of an at-will employee is limited by public policy, and termination in violation of public policy considerations can give rise to a cause of action for wrongful discharge. Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 172. To support a claim for wrongful discharge in violation of public policy, plaintiff must identify a public policy supported by either constitutional or statutory provisions. Stevenson v. Superior Court (1997) 16 Cal.4th 880, 889-890.

Defendants argue plaintiff failed to adequately allege termination in violation of public policy because the FAC does not identify a statute or constitutional provision allegedly violated by his firing. The FAC states “California has public policy interests in prohibiting employers from (1) firing their employees in order to avoid paying them the money they already have earned, and (ii) discriminating against employees on the basis of a perceived disability, such as mental illness,” but does not identify any specific constitutional or statutory provision supporting these policies, as required under Stevenson. SUSTAINED with ten days leave to amend.

Fourth Cause of Action for Breach of the Implied Covenant of Good Faith and Fair Dealing

The law implies into every contract a covenant of good faith and fair dealing. Freeman & Mills, Inc. v. Belcher Oil Company (1995) 11 Cal.4th 85, 91. A cause of action for breach of this covenant lies in contract, but in the context of an insurance agreement, it can also lie in tort. Id.

Defendants argue plaintiff does not allege an insurance contract, so there is no tort claim for breach of the implied covenant of good faith and fair dealing, relying on Freeman. Freeman, however, stated every contract – not just insurance contracts – includes an implied covenant of good faith and fair dealing. Though plaintiff cannot proceed in tort, since the contract is an employment agreement, not an insurance policy, the FAC properly pleads the fourth cause of action as a contract claim. OVERRULED.

Sixth Cause of Action for Breach of Contract

A claim that adds nothing to a complaint by way of fact or theory of recovery is duplicative and subject to demurrer. Award Metals, Inc. v. Superior Court (1991) 228 Cal.App.3d 1128, 1135-36.

Defendants argue the fifth and sixth causes of action are duplicative. As the sixth cause of action is vague, the court cannot determine whether it is duplicative of the fifth cause of action. The FAC alleges plaintiff Finkton and “[d]efendant Bar-Ziv agreed that Mr. Finkton would co-invest in the Target Global BSP joint venture.” FAC ¶93. It is unclear whether this agreement was part of the employment agreement that forms the basis of the fifth cause of action or whether it is a separate agreement. The sixth cause of action must be clarified before proceeding. SUSTAINED with ten days leave to amend.

Motion to Strike

Defendants move to strike the requests for punitive damages. Plaintiff does not oppose the motion, which the court will treat as an admission that it is valid. GRANTED.