Judge Michael D. Washington, Case Number: 37-2022-00050705-CU-CO-NC, Date: 2024-06-28 Tentative Ruling

Judge: Michael D. Washington, Case: 37-2022-00050705-CU-CO-NC, Date: 2024-06-28 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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SOUTH BUILDING TENTATIVE RULINGS - June 27, 2024

06/28/2024 01:30:00 PM N-31 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Michael D Washington

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Civil - Unlimited Contract - Other Demurrer / Motion to Strike 37-2022-00050705-CU-CO-NC PETER VANDER WERFF CONSTRUCTION VS. MOBILE KITCHENS [IMAGED] CAUSAL DOCUMENT/DATE FILED: Demurrer, 03/08/2024

Disposition The Demurrer to First Amended Complaint brought by defendant Mobile Kitchens USA Inc. (Mobile Kitchens) is SUSTAINED with leave to amend.

The Demurrer to First Amended Complaint brought by defendants Bohm Wildish & Matsen LLP (Bom Wildish), Cecilia Preciado Esq. (Attorney Preciado), Michael Gangi Esq. (Attorney Gangi), and Gilbert Partida Esq. (Attorney Partida) (collectively, the Law Firm) is SUSTAINED with leave to amend.

The Motion to Strike Punitive Damages brought by Mobile Kitchen is DENIED as moot.

The Motion to Strike Punitive Damages brought by the Law Firm is DENIED as moot.

The time to amend shall be per code as set forth in California Rules of Court, rule 3.1320.

Requests for Judicial Notice The Request for Judicial Notice brought by Mobile Kitchens (ROA 115) is GRANTED pursuant to Evidence Code § 451, et seq.

The Request for Judicial Notice brought by the Law Firm (ROA 109) is GRANTED pursuant to Evidence Code § 451, et seq.

However, in granting the above Requests for Judicial Notices, the Court notes that several of the documents – though filed in court and thus judicially-noticeable for the fact that they have been filed – are not necessarily judicially-noticeable as to the truth of their contents.

Factual Background The underlying dispute in this case appears to be a contractual one, though it appears that that underlying contractual dispute has led to claims of defamation and intentional interference with contractual relations. For purposes of reciting the salient facts of this case, the Court notes that both of the main parties to the contract were providing services that ultimately benefited a branch of the United States Navy. As the particular branch or entity of the U.S. Navy is non-critical to the outcome of the motions, the Court will simply refer to that entity using the generic 'U.S. Navy' terminology.

It appears that the U.S. Navy, with its base at Camp Pendleton, was in the process of having and/or Calendar No.: Event ID: TENTATIVE RULINGS

3113183 CASE NUMBER: CASE TITLE: PETER VANDER WERFF CONSTRUCTION VS. MOBILE 37-2022-00050705-CU-CO-NC needed a new mess hall to be built. To do so, it appears that the U.S. Navy contracted with plaintiff Peter Vander Werff Construction Inc. (Plaintiff or the Construction Company). Needing a place to feed active servicemembers of the U.S. Navy who were on base at Camp Pendleton during the construction of the new mess hall, Plaintiff reached out and essentially subcontracted with defendant Mobile Kitchens – a company that was able to provide temporary tents and meals that could provide the food needs for the military base that were out-of-service while the new mess hall was being constructed.

It appears that, ultimately, a dispute arose between Plaintiff and Mobile Kitchens. Plaintiff takes the position that it had the ability, contractually, to extend the temporary services that Mobile Kitchens was providing indefinitely. Mobile Kitchens takes the position that Plaintiff got behind on its routine payment obligations. This eventually led to concerns that Mobile Kitchens may have to discontinue its services, as it was going unpaid. This also apparently meant that Mobile Kitchens may need to take down its temporary setup on the military basis.

As a result of the dispute that was arising, it appears that Mobile Kitchens retained legal counsel. It further appears that that legal counsel began making communications on behalf of Mobile Kitchens with appropriate officers of the military base – warning of what may need to occur logistically if Mobile Kitchens continued to go unpaid. Plaintiff is now suing Mobile Kitchens and the Law Firm because said letter contained certain language that was allegedly defamatory and interfered with the contractual relationship between Plaintiff and the U.S. Navy. Those comments included: It has come to Mobile Kitchen's attention based on reviews of PVW contained in Levelset.com, that there are other complaints against PVW for conduct similar to conduct PVW is engaging in with Mobile Kitchens.[ftnt] ...

[ftnt] Based on reviews of PVW contained in Levelset.com, PVW's conduct by others is described in Levelset.com as 'morally bankrupt.' The posted reviews support the fact that PVW appears to be engaging in a business practice constituting a wrongful pattern of unreasonably delaying payment not only as to Mobile Kitchens, but to other contractors as well, paying its contractors late, and only after forcing them to get legal involved. Source: https://www.levelset.com/contractors/peter-vander-werff-construction-inc/ (ROA 19, Ex. 3, p. 3.) Merits of Demurrers The first challenge of the arguments made by the parties is that Mobile Kitchens and the Law Firm take the position that the entire letter in question was protected by the 'litigation privilege.' (Civil Code § 47(b). Plaintiff's position is a bit more narrow and focused solely on the excerpted language quoted above. Both parties' arguments have some merit in this regard. Mobile Kitchens and the Law Firm (collectively, Defendants) are correct that the vast majority of the letter in question is – relatively easily – protected by the 'litigation privilege.' Plaintiff is correct, however, that it is possible for an overall document that is largely protected by the 'litigation privilege' to contain certain specific representations that fall outside of that privilege. See Dziubla v. Piazza (2020) 59 Cal.App.5th 140; see also Nguyen v. Proton Technology Corp. (1999) 69 Cal.App.4th 140.

The touchstone for an analysis of whether certain terms embedded within a larger protected documents fall outside of the protection of the 'litigation privilege' turns on the relationship between the subject matter that gives rise to the underlying litigation (or anticipated litigation) and the comments that arguably fall outside of the privilege. 'To come within the privilege, the fact communicated itself must have some bearing on or connection with the subject matter of the litigation...' Dziubla, supra, 59 Cal.App.5th at 156-157, quoting Nguyen, supra, 69 Cal.App.4th 140, 149, quoting Younger v. Solomon (1974) 38 Cal.App.3d 289, 302 (internal quotations omitted). Two of the touchpoints used by the Nguyen court were to note: (1) that making communications about criminal history to resolve a civil dispute often falls outside of the privilege and is more disparaging that 'related' to the civil litigation, and (2) the litigation privilege 'does not prop the barn door wide open for any and every sort of prelitigation charge Calendar No.: Event ID: TENTATIVE RULINGS

3113183 CASE NUMBER: CASE TITLE: PETER VANDER WERFF CONSTRUCTION VS. MOBILE 37-2022-00050705-CU-CO-NC or innuendo, especially concerning individuals.' Nguyen, supra, 69 Cal.App.4th at 150-151 (emphasis added). The communications here are neither.

While the Court appreciates that the Nguyen decision does not stand for the proposition that only comments about criminality or only comments disparaging an individual can suffice to circumvent the protections of the 'litigation privilege,' those examples act as touchpoints along the spectrum of what is considered 'reasonably related' to the underlying litigation. The Court further notes that both the cases of Silberg v. Anderson (1990) 50 Cal.3d 205 and of Action Apartment Assn., Inc. v. City of Santa Monica (2007) 41 Cal.4th 1232 were decided on demurrer. As such, it is not inappropriate to apply the 'litigation privilege' even at an early stage of litigation where the communications at issue are clearly in the nature of anticipating litigation.

Based thereon, the Court concludes that the statements about Plaintiff's 'similar conduct' of failing to pay other contractors was reasonably related to the anticipated litigation in that Defendants were communicating to the U.S. Navy what conduct they were expecting in the near future that might trigger a need to remove their facilities from the military base. Indeed, that very issue was raised by Plaintiff in this lawsuit when Plaintiff filed an Ex Parte Application for Temporary Restraining Order and Order to Show Cause re Preliminary Injunction that sought, among other things, to enjoin Mobile Kitchens from '[r]emoving, altering, or transporting the temporary dining facilities owned by Defendant and leased to Plaintiff in connection with the 21 Area Mess Hall Design/Build Project located at Marine Corps Base Camp Pendleton...' (ROA 11, p. 2:8-10). Clearly, the prospect of having to remove the temporary dining facilities was within the ambit of the anticipated litigation by Plaintiff's own conduct in this lawsuit. As such, the comments in question from Mobile Kitchens to the U.S. Navy, which were preceded with comments specific to the dispute that was arising about Mobile Kitchens not having received payment for a period of about two months, were designed to communicate Mobile Kitchen's expectations about what was most likely to occur going forward.

To the extent that the prelitigation letter set forth expectations or predictions about what was most likely to happen as the dispute heated up and eventually led to litigation, the references to comments about Plaintiff on a third-party website appear to be foundational – i.e. citing sources for why Mobile Kitchens anticipates that litigation and a takedown of the temporary facilities is more likely. The Court would draw an analogy to these aspects of the letter that is much like allegations made on 'information and belief' in a civil complaint. While parties are permitted to make such allegations, they must also support such allegations by stating what foundational information it is that leads them to belief the fact they are ultimately alleging. Similarly, here, Mobile Kitchens was, to some extent, at the mercy of Plaintiff being in arrears and failing to pay, and, in making strategic decisions about how to proceed – both in terms of litigating with Plaintiff and with how to handle the involved third-party, which was the U.S. Navy – Mobile Kitchens had to form beliefs about how things would proceed. Reliance on comments that Plaintiff was engaging in similar business practices with regard to other contractors as an indicator as to whether Plaintiff was more likely to get caught-up on payments to Mobile Kitchens or, instead, force litigation with Mobile Kitchens, is within the realm of anticipating litigation. Communicating the basis for Mobile Kitchen's beliefs and expectations about what was likely to occur going forward was therefore within the realm of anticipating litigation as well.

The Court notes briefly that there are allegations in the operative pleading that Plaintiff was, in fact, caught up on all of its bills – even overpaid. (ROA 19, ¶ 31.) While it is appropriate for the Court, on demurrer, to indulge that allegation, for purposes of analyzing whether the comments made in the prelitigation letter to the U.S. Navy fall within the 'litigation privilege' it does not matter whether Mobile Kitchens was wrong about its position in the litigation. In other words, even if Mobile Kitchens breached the contract by taking up the mistaken belief that they had not been adequately paid, as long as that belief was not in bad faith (and nothing in the allegations suggests that it is), their actions in anticipation of litigating the breach of contract issue were covered by the 'litigation privilege.' Said yet another way, even parties who ultimately lose on the merits of the underling dispute are entitled to the protections of the 'litigation privilege.' The focal point of the Demurrers presently before this Court is not on whether or not Mobile Kitchens breached the underlying contract. Indeed, while there is a First Cause of Action for Calendar No.: Event ID: TENTATIVE RULINGS

3113183 CASE NUMBER: CASE TITLE: PETER VANDER WERFF CONSTRUCTION VS. MOBILE 37-2022-00050705-CU-CO-NC Declaratory Relief that appears to get at contract-based issues, Defendants' respective Demurrers are only as to the Second, Third, and Fourth Causes of Action that cover defamation and intentional interference with contractual relations.

Merits of Motions to Strike Having sustained the respective Demurrers to all causes of action that would support a claim for punitive damages, the Motions to Strike are ultimately moot.

Unless the ruling(s) above indicate that an appearance is necessary, parties who wish to submit, who are satisfied with the above tentative ruling(s), and/or who do not otherwise wish to argue the motion(s) are encouraged tso give notice to the Court and each other of their intention not to appear.

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