Judge Theresa M. Traber, Case Number: 24STCV06750, Date: 2024-07-02 Tentative Ruling

Judge: Theresa M. Traber, Case: 24STCV06750, Date: 2024-07-02 Tentative Ruling

Case Number: 24STCV06750 Hearing Date: July 2, 2024 Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE: July 2, 2024 TRIAL DATE: NOT SET

CASE: Troy Williams v. Ralphs Grocery Co., et al.

CASE NO.: 24STCV06750

MOTION FOR SANCTIONS PURSUANT TO CODE OF CIVIL PROCEDURE SECTION 128.7

MOVING PARTY: Defendants Ralphs Grocery Co., The Kroger Company, and Kirk Reynolds

RESPONDING PARTY(S): Plaintiff Troy Williams

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This is an action for defamation and unfair business practices that was filed on March 18, 2024. Plaintiff was terminated in December of 2010 for allegedly stealing six bottles of lemonade. In 2012, Plaintiff filed an action, entitled Williams v. Ralphs Grocery Co., LASC Case No. BC495977, which concluded with a jury verdict in Plaintiff’s favor and judgment entered on January 11, 2024. Plaintiff alleges that, during the pendency of that proceeding, Defendants continued to defame him by communicating to others that he was a thief.

Defendants move for sanctions under Code of Civil Procedure section 128.7 on the grounds that the Complaint in this action is legally frivolous.

TENTATIVE RULING:

Defendants’ Motion for Sanctions is DENIED.

DISCUSSION:

Defendants move for sanctions under Code of Civil Procedure section 128.7 on the grounds that the Complaint in this action is legally frivolous.

Legal Standard

Under Code of Civil Procedure section 128.7, if the Court determines that subsection (b) has been violated, it may “impose an appropriate sanction upon the attorneys, law firms, or parties that have violated subdivision (b) or are responsible for the violation.” (Code Civ. Proc. § 128.7(c).) Violations of subsection (b) include presenting a complaint “primarily for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation,” presenting claims, defenses, or other legal contentions that are not “warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law,” or making allegations or factual contentions that do not “have evidentiary support.” (Code Civ. Proc. § 128.7(b)(1) – (3).) Sanctions under this section “shall be limited to what is sufficient to deter repetition of this conduct or comparable conduct by others similarly situated.” (Code Civ. Proc. § 128.7(d).) The sanction may include, “if imposed on motion and warranted for effective deterrence, an order directing payment to the movant of some or all of the reasonable attorney’s fees and other expenses incurred as a direct result of the violation.” (Id.) To obtain sanctions the moving party must show the “party’s conduct in asserting the claim was objectively unreasonable,” meaning that “any reasonable attorney would agree that [it] is totally and completely without merit.” (Bucar v. Ahmad (2016) 244 Cal.App.4th 175, 189.) Indeed, even “the fact that a plaintiff fails to provide a sufficient showing to overcome a demurrer or to survive summary judgment is not, in itself, enough to warrant the imposition of sanctions.” (Peake v. Underwood (2014) 227 Cal.App.4th 428, 448.)

Compliance with the Safe Harbor Provisions of Code of Civil Procedure § 128.7(c)(1)

Before bringing this motion, Defendants must demonstrate compliance with the safe harbor provision of section 128.7. This section provides, in relevant part:

A motion for sanctions under this section shall be made separately from other motions or requests and shall describe the specific conduct alleged to violate subdivision (b). Notice of motion shall be served as provided in Section 1010, but shall not be filed with or presented to the court unless, within 21 days after service of the motion, or any other period as the court may prescribe, the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or appropriately corrected.

(Code Civ. Proc. § 128.7(c)(1).)

Defendants complied with this provision by serving Plaintiff with the motion on April 10, 2024. (Proof of Service.) Plaintiff therefore had until May 3, 2024, (21 days plus 2 days for service by email) to withdraw the Complaint. Plaintiff did not do so, and Defendants filed this motion on May 7, 2024. Thus, Defendants have met the requirements of the safe harbor provisions.

Application of Res Judicata to Plaintiff’s Claims

Defendants first argue that Plaintiff’s 2024 Complaint is barred by the doctrine of res judicata, also known as claim preclusion.

In determining the validity of a plea of res judicata, the questions to be resolved are (1) whether the cause of action decided in the prior adjudication is identical to the one in the current action; (2) whether there was a final judgment on the merits in the previous adjudication; and (3) whether the party against whom the plea is asserted a party or in privity with a party to the prior adjudication. (See Bernhard v. Bank of Am. Nat. Tr. & Sav. Ass’n (1942) 19 Cal.2d 807, 813.) For the purposes of this doctrine, the phrase “cause of action” means “the right to obtain redress for a harm suffered, regardless of the specific remedy sought or the legal theory (common law or statutory) advanced.” (Franceschi v. Franchise Tax Bd. (2016) 1 Cal.App.5th 247, 257 [abrogated on other grounds in Guerrero v. Dep't of Corr. & Rehab. (2018) 28 Cal. App. 5th 1091].) As our Supreme Court has explained, this definition arises out of the primary right theory:

The primary right theory is a theory of code pleading that has long been followed in California. It provides that a “cause of action” is comprised of a “primary right” of the plaintiff, a corresponding “primary duty” of the defendant, and a wrongful act by the defendant constituting a breach of that duty. [Citation] The most salient characteristic of a primary right is that it is indivisible: the violation of a single primary right gives rise to but a single cause of action. [Citation] A pleading that states the violation of one primary right in two causes of action contravenes the rule against “splitting” a cause of action. [Citation] . . .

[T]he primary right is simply the plaintiff’s right to be free from the particular injury suffered. [Citation] It must therefore be distinguished from the legal theory on which liability for that injury is premised: “Even where there are multiple legal theories upon which recovery might be predicated, one injury gives rise to only one claim for relief.” . . . The primary right theory . . . is invoked most often when a plaintiff attempts to divide a primary right and enforce it in two suits. The theory prevents this result by either of two means: (1) if the first suit is still pending when the second is filed, the defendant in the second suit may plead that fact in abatement [citations]; or (2) if the first suit has terminated in a judgment on the merits adverse to the plaintiff, the defendant in the second suit may set up that judgment as a bar under the principles of res judicata.

(Crowley v. Katleman (1994) 8 Cal.4th 666, 681-82.) If a single primary right is invaded, only one cause of action arises, even if the defendant allegedly breached that right in multiple ways, or under different legal theories. (Bay Cities Paving & Grading, Inc. v. Lawyers' Mut. Ins. Co. (1993) 5 Cal.4th 854, 860-61.) Res judicata thus precludes litigation of claims that could have been brought in a prior action but were not. (Franceschi, supra, 1 Cal.App.5th at 258.)

Defendant argues that all of Plaintiff’s claims in the 2024 Complaint arise from the same primary right that was litigated in the prior action. In the prior action Williams v. Ralphs Grocery Co. LASC Case No. BC495977, Plaintiff and Ralphs tried Plaintiff’s claims for defamation, self-compelled defamation, failure to engage in the interactive process, and failure to provide reasonable accommodations to a jury. (Declaration of Joshua A. Waldman ISO Mot. ¶ 17.) The jury found in favor of Plaintiff on his defamation claim, and awarded him compensatory and punitive damages. (Waldman Decl. ¶ 23; Exh. 24.) The Court issued an additur following Plaintiff’s Motion for New Trial on the grounds of inadequate damages. (Id.) Judgment was entered in Plaintiff’s favor pursuant to that verdict in the amount of $485,000. (Waldman Decl. ¶ 23; Exh. 24.)

As Defendants state, it is well-settled that the primary right at issue in a defamation claim is injury to reputation. (Shively v. Bozanich (2003) 31 Cal.4th 1230, 1242.) Defendants argue that Plaintiff’s operative Complaint in this action asserts the same invasion of that primary right—to be free from injury to reputation by statements accusing him of theft—under all four causes of action, including his claims for intentional infliction of emotional distress and unfair competition. (Complaint ¶¶ 12, 21, 23, 25 [factual allegations] 30-40 [defamation claims]; 42 [reputational harm causing emotional distress]; 49 [reputational harm as unfair business practice]; see also Waldman Decl. Exh. 1 [2012 Complaint] ¶¶ 33-35, 84-86.) In opposition, Plaintiff contends that his 2024 Complaint asserts a separate cause of action because it arises from publications arising from Kirk Reynolds’ investigatory notes in which he wrote “A thief,” in quotes. (Complaint ¶ 5.) Plaintiff contends that those publications could not have been litigated in the prior case because the unredacted notes showing this statement were concealed by Ralphs during the pendency of the litigation, and because each publication is a separate cause of action under Schneider v. United Airlines (1989) 208 Cal.App.3d 71. While the Court does not find Plaintiff’s arguments to be persuasive, neither are they objectively unreasonable or frivolous.

Turning first to the factual argument regarding the disclosure of Defendant Reynolds’ notes, the parties vehemently disagree as to whether the unredacted notes were concealed and when Plaintiff became aware of the unredacted version. The undisputed facts are that in May 2013, during the prior action, Plaintiff propounded requests for production on Ralphs seeking documents referencing the alleged theft. (Plaintiff’s Exh. 2.) Ralphs provided responses and document production on July 23, 2013, including a copy of Reynolds’ notes. (Plaintiff’s Exhs. 3-5.) However, the copy of the notes that were produced had the words, “A Thief,” whited out. (Id. Exh. 5.) Plaintiff also obtained other copies of the notes through separate discovery which did not contain the redaction. (Plaintiff’s Exh. 8.) Plaintiff contends that Ralphs did not disclose the redaction, and, thus, he had no reason to compare the copies and was unaware of the statement labeling him “A Thief.” Although the timing of when Plaintiff discovered the redaction is hotly disputed, Plaintiff expressly relied upon the unredacted notes in cross-examination of Reynolds in the 2023 trial. (Plaintiffs’ Exh. 11 [September 7, 2023 Rough Transcript] pp. 177:15-193:21.) Nevertheless, Plaintiff contends that he was precluded from fully litigating any defamation arising from these notes because of Ralphs’ concealment of the unredacted notes. As Defendants argue in both the moving and reply papers, however, suppression of evidence is intrinsic fraud, which does not undermine the preclusive effect of a judgment, because it does not deprive the party of the opportunity to appear and present the case. (Eichman v. Fotomat Corp. (1983) 147 Cal.App.3d 1170, 1175-76.) Plaintiff fails to reckon with this authority in his opposition beyond the conclusory assertion that he was, in fact, precluded from litigating any claims for defamation arising from publication of this statement because he was unaware of its existence until very late in the trial.

In any event, the Court need not reconcile the factual disputes between the parties on this issue because Plaintiff’s position is founded on an incorrect reading of the law. Plaintiff’s argument that he was deprived of a fair opportunity to litigate any claims arising from the redacted notes is premised on the position that each publication is a separate cause of action, citing Schneider v. United Airlines (1989) 208 Cal.App.3d 71, 77. However, Schneider was concerned not with claim preclusion, but with the effect of subsequent publications on the statute of limitations, holding that each new publication restarts the time to bring a claim. (Schneider v. United Airlines (1989) 208 Cal.App.3d 71, 77.) The Schneider court stated that “[m]any cases have allowed a complaint to be filed based upon the republication of the alleged defamatory matter even though an action on the first publication was dismissed or otherwise decided against the plaintiff.” (Schneider, supra, 208 Cal.App.3d at 78.) But close reading of the two cited authorities, McKinney v. County of Santa Clara and Kanarek v. Bugliosi, reveals greater complexity.

In McKinney v. County of Santa Clara, the Court of Appeal found that subsequent claims concerning the same publications were barred by res judicata where a general demurrer had previously been sustained, but did not address whether subsequent republications were precluded because that determination was not at issue on appeal. (McKinney v. County of Santa Clara (1980) 110 Cal.App.3d 787, 793-94.) The other case cited by Schneider is Kanarek v. Bugliosi, which purports to address the application of res judicata to republication of defamatory statements, but only discusses whether defamation claims premised on a republished book were barred by the Uniform Single Publication Act. (Kanarek v. Bugliosi (1980) 108 Cal.App.3d 327, 331-32.) Kanarek then concludes that the subsequent claims gave rise to a “new cause of action,” without explaining that reasoning. (Id. at 338.) Tellingly, however, our Supreme Court referenced this decision in 2009, describing the Uniform Single Publication Act as, in effect, a statute of repose. (Christoff v. Nestle USA, Inc. (2009) 47 Cal.4th 468, 481-82.) Thus, Plaintiff’s authority does not directly state that every publication of an allegedly defamatory statement is a separate “cause of action” in the context of a claim preclusion analysis.

In contrast, Defendants cite to Burdette v. Carrier Corp., a 2008 opinion in which the Court of Appeal expressly stated that a series of defamatory statements made by an entity through several of its employees gives rise to only one cause of action for defamation for purposes of res judicata. (Burdette v. Carrier Corp. (2008) 158 Cal.App.4th 1668, 1686-87.) Although Plaintiff argues that Burdette is distinguishable because his claim in this action is not based on the same facts and theories as the prior action, as was the case in Burdette, the Court is not persuaded. The gravamen of Plaintiff’s claim in both actions is that Ralphs, through its employees, including Defendant Reynolds, damaged his reputation by falsely labeling Plaintiff as a thief. Plaintiff is therefore seeking vindication of the same primary right on which a final judgment was entered earlier this year against the same Defendant and, as Plaintiff concedes, against parties who are in privity with that Defendant. (Opposition p.13:9.)

Defendants have thus demonstrated for the purposes of this motion that Plaintiff’s claims are barred by res judicata. What Defendants have not done is demonstrate that Plaintiff’s claims are “objectively unreasonable” on that basis. It is true that claims which are “so clearly barred by res judicata, judicial admissions and judicial estoppel” are subject to sanction. (Bucur v. Ahmad (2016) 244 Cal.App.4^th 175, 191.) However, as the Court’s discussion of the issue above demonstrates, while the weight of authority does not support Plaintiff’s position, the Court cannot say that precedent is so strongly arranged against Plaintiff as to render his position objectively unreasonable, rather than merely incorrect. Indeed, no less than our own Supreme Court has described the primary rights doctrine which governs this analysis as “notoriously uncertain in application. ‘Despite the flat acceptance of the . . . theory . . . by California decisions, the meaning of ‘cause of action’ remains elusive and subject to frequent dispute and misconception.’” (Baral v. Schnitt (2016) 1 Cal.5th 376, 395 [quoting 4 Witkin, Cal. Procedure (5th ed. 2008) Pleading § 35, p.100].) The Court is not inclined to find that Plaintiff’s claims are so objectively unreasonable where the central dispute rests on a theory that is “notoriously uncertain in application.”

Application of Statute of Limitations to Plaintiff’s Claims

Defendants also argue that Plaintiff’s claims lack merit because they are well outside the one-year statute of limitations for defamation claims.

The Complaint, anticipating this line of attack, expressly alleges that Defendant Ralphs’ concealment of the “Thief” note resulted in Plaintiff’s delayed discovery of the extent of the defamation and equitably estops Defendants from asserting a statute of limitations defense and tolls the statute of limitations. (Complaint ¶ 11.) Plaintiff has thus asserted a colorable argument against the statute of limitations, as improper concealment delaying the discovery of a cause of action is generally grounds for tolling of the statute of limitations. (See Czajkowski v. Haskell & White, LLP (2012) 208 Cal.App.4th 166, 174.) That said, as Defendant argues, a Plaintiff must act diligently before the discovery rule applies to toll the statute of limitations. (Manguso v. Oceanside Unified School Dist. (1979) 88 Cal.App.3d 725, 728.) Further, the discovery rule does not toll the statute of limitations after a defamatory publication is made available to the Plaintiff. (Shively v. Bozanich (2003) 31 Cal.4th 1230, 1253.)

As noted above, the parties vigorously dispute whether Ralphs concealed the investigative notes, when those notes were made available to Plaintiff, and when Plaintiff actually discovered those notes. However, the Court need not resolve the factual disputes on this motion—it need only determine whether Plaintiff’s claims have some evidentiary support. (See Code Civ. Proc. § 128.7(b)(3).) Here, the existence of the redacted notes—which omitted evidence favorable to Plaintiff’s case—is some evidentiary support for Plaintiff’s equitable estoppel and tolling argument. (See Plaintiff’s Exh. 5.) Thus, regardless of whether Plaintiff’s claims would survive a dispositive motion, such as a demurrer or motion for summary judgment, the Court finds Plaintiff has asserted a colorable legal theory based on some factual support to combat the statute of limitations defense. Therefore, the statute of limitations does not render Plaintiff’s claims subject to sanction.

CONCLUSION:

Accordingly, Defendants’ Motion for Sanctions is DENIED.

Moving Parties to give notice.

IT IS SO ORDERED.

Dated: July 2, 2024 ___________________________________

Theresa M. Traber

Judge of the Superior Court

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.