Judge: Yolanda Orozco, Case: 21STCV29326, Date: 2022-09-08 Tentative Ruling

Case Number: 21STCV29326    Hearing Date: September 8, 2022    Dept: 31

CROSS-DEFENDANTS’ SPECIAL MOTION TO STRIKE IS GRANTED 

Background 

This action arises out of the alleged fraudulent conduct of Guadalupe Morante, a former employee of LRS Realty & Management, Inc. 

On August 9, 2021, LRS Realty & Management, Inc. (“Plaintiff” or “LRS”) initiated the present action against Guadalupe Morante, Humberto Morante, L&B General Contractors, Inc., and Fix It Right Construction. 

Plaintiff’s Complaint alleges the following causes of action: 

1)     Fraud;

2)     Embezzlement;

3)     Misappropriation of Trade Secrets (California Civil Code § 3426, et seq.);

4)     Misappropriation of Trade Secrets;

5)     Interference with Prospective Economic Advantage;

6)     Intentional Interference with Contractual Relations;

7)     Conversion;

8)     Breach of Duty of Loyalty;

9)     Violation of Business and Professions Code § 17200;

10) Injunctive Relief;

11) Loss Due to Dishonest or Willful Act of Employee (Labor Code, Section 2865; IWC Wage Order 4-2001, Section 8);

12) Violation of the Computer Data Access and Fraud Act (Penal Code, Section 502(e));

13) Violation of the Computer Fraud and Abuse Act (18 U.S.C § 1030);

14) Unjust Enrichment/Restitution; (15) Accounting; and (16) Constructive Trust. 

On January 5, 2022, Cross-Complainant Guadalupe Morante and Humberto Morante filed a Cross-Complaint against Eric Steven Cano and LRS Realty & Management, Inc. for:

1)     Failure To Compensate For All Hours Worked In Violation Of Labor Code § 1198 Et Seq.,

2)     Failure To Pay Overtime In Violation Of Labor Code §§ 510, 1194, 1194.2, 1198,

3)     Failure To Authorize Or Permit Meal Periods In Violation Of Labor Code §§ 226.7, 512 And The Applicable Wage Order,

4)     Failure To Authorize Or Permit Rest Periods In Violation Of Labor Code §§ 226.7 And The Applicable Wage Order,

5)     Failure To Furnish Complete And Accurate Wage Statements In Violation Of Labor Code §§ 226 Et Seq.,

6)     Violation Of The California Healthy Workplaces, Healthy Families Act Per Labor Code §§ 245.5-248.5,

7)     For Sexual Discrimination In Violation Of Gov’t Code §§ 12940 Et Seq.,

8)     For Sexual Harassment In Violation Of Gov’t Code §§ 12940 Et Seq.,

9)     Failure To Prevent Discrimination, Harassment, And Retaliation In Violation Of Gov’t Code § 12940(K),

10) For Sexual Harassment Pursuant To Civil Code § 51.9

11) Violations Of Business & Professions Code § 17200 Et Seq.

12) Retaliation In Violation Of Labor Code § 1102.5,

13) Negligent Supervision, CACI 426,

14) Negligent Hiring, Supervision, Or Retention Of Employee,

15) Negligent Infliction Of Emotional Distress, and

16) Intentional Infliction Of Emotional Distress. 

On March 14, 2022, Plaintiff and Eric Cano brought a Special Motion to Strike Cross-Complainant’s fifteenth and sixteenth causes of action. 

On August 31, 2022, the Parties signed a Stipulation and Order to continue the hearing, which was denied. 

No Opposition or Reply has been filed. 

Legal Standard 

CCP section 425.16 permits the court to strike causes of action arising from an act in furtherance of the defendant's right of free speech or petition unless the plaintiff establishes that there is a probability that the plaintiff will prevail on the claim. ¿ 

The defendant bears the initial burden of showing that the claims fall within the class of suits subject to a motion to strike under CCP section 425.16, i.e., that plaintiff's claim is based on an act of defendant in furtherance of his right to free speech. ¿(Fox Searchlight Pictures, Inc. v. Paladino (2001) 89 Cal. App. 4th 294, 304.) ¿Under CCP section 425.16(b)(2), the Court may consider the pleadings and supporting affidavits in making its determination. ¿A defendant meets his initial burden by demonstrating that the act underlying the plaintiff’s case fits one of the categories identified in section 425.16(e). ¿(City of Cotati v. Cashman (2002) 29 Cal.4th 69, 78.) ¿Subdivision (e) defines the protected acts as the following: 

1.               any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law;  

2.               any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law;  

3.               any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest; or 

4.               any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest. 

If the defendant meets this initial burden, the plaintiff then has the burden of demonstrating a probability of prevailing on the claim. ¿(Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal. 4th 728, 741.) ¿The plaintiff satisfies this burden by demonstrating that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited. ¿(Id.) ¿Under CCP section 425.16(b)(2), a plaintiff may use affidavits to meet the plaintiff’s burden. 

In order to determine whether a cause of action is subject to a SLAPP motion, the court examines the principal thrust or gravamen of the plaintiff's cause of action. ¿(Ramona Unified School Dist. v. Tsiknas (2005) 135 Cal. App. 4th 510, 519-520.) ¿The critical consideration for section 425.16 analysis is whether the cause of action is based on the defendant's protected free speech or petitioning activity. ¿Feldman v. 1100 Park Lane Associates (2008) 160 Cal. App. 4th 1467, 1478-1479. ¿The anti-SLAPP statute’s definitional focus is not the form of the plaintiff's cause of action but, rather, the defendant's activity that gives rise to his or her asserted liability—and whether that activity constitutes protected speech or petitioning. ¿(Id.) ¿ 

Discussion 

Allegations in Cross-Complaint 

Cross-Complainants Guadalupe Morante and Humberto Morante (collectively “Cross-Complainants”) allege that on or around May 5, 2021, Guadalupe filed a workers compensation suit (WCAB #ADJ14625809) against Plaintiff/Cross-Defendant LRS. Guadalupe alleges that after filing her workers compensation suit, LRS filed its Complaint on August 9, 2021.

Cross-Complainants’ fifteenth cause of action for Negligent Infliction of Emotional Distress (NIED) stems in part from Eric Cano’s alleged sexual harassment against Guadalupe. Cross-Complainants allege Eric Cano is an employer of LRS. Guadalupe alleges that LRS refused to protect or stop the harassment. Consequently, Cross-Complainants suffered serious emotional distress. (X-Compl. ¶¶ 175-180.) The sixteenth cause of action for Intentional Infliction of Emotional Distress (IIED) alleges that Eric Cano’s and LRS’s conduct caused Cross-Complainants to suffer serious emotional distress. (Id. ¶ 181-188.) 

Prong One: Cause of Action Arises from A Protected Activity 

Plaintiff/Cross-Defendant LRS and Eric Cano assert that Cross-Complainant Humberto Morante’s fifteenths and sixteenth causes of action for NIED and IIED occurred within and arise from the contexts of this action, the LRS Realty & Management, Inc. v. Morante litigation. Thus, the claims constitute a Strategic Lawsuit Against Public Participation and must be stricken. 

LRS bears the intitial burden of showing that Humberto’s cause of action for NIED and IIED arose in furtherance of a protected activity under the Code of Civil Procedure section 425.16 subdivision (e). Section 425.16(e) protects “(1) any written or oral statement or writing made before a … judicial proceeding, … [and] (2) any written or oral statement or writing made in connection with an issue under consideration or review by a … judicial body”. (CCP § 425.16(e)(1)-(2).)  Filing documents in a court proceeding is unquestionably petitioning activity under these clauses. (See Ludwig v. Superior Court (1995) 37 Cal.App.4th 8, 19 [“The constitutional right to petition . . . includes the basic act of filing litigation or otherwise seeking administrative action.”].)  

Moreover, Civil Code section 47(b) provides an absolute privilege for communications made in any legislative proceeding, in any judicial proceeding, in any other official proceeding authorized by law, or in the initiation or course of any other proceeding authorized by law.  (See Civ. Code, § 47(b); Hagberg v. California Federal Bank FSB (2004) 32 Cal.4th 350, 360.)  Section 47(b) bars all tort causes of action except malicious prosecution.  (See Hagberg, supra, 32 Cal.4th at 360.)  Section 47(b) only applies to communicative acts, not tortious conduct.  (Id. at 423.)  

LRS contends that although Humberto does not specify what damages he suffered, the only wrongdoing by LRS to Humberto that is alleged in the Cross-Complaint was the filing of the LRS Complaint that started this action. LRS relies on Adams v. Superior Court (1992) for the proposition that judicial privilege should be applied in this Motion. (Adams v. Superior Court (1992) 2 Cal.App.4th 521, 529.) In Adams the Appeal Court stated: 

“The defendant may rely upon the defense of judicial privilege, Civil Code section 47, provided that there is some reasonable connection between the act claimed to be privileged and the legitimate objects of the lawsuit in which that act took place. The privilege is broadly applied to protect most publications within lawsuits provided there is some connection between the lawsuit and the publication.” 

(Id. at 529.) 

LRS alleges that the connection between Humberto’s causes of action for NIED and IIED are based entirely on communications subject to the litigation privilege. (Mot. at 6:20-21.) Specifically, the only wrongdoing Humberto alleges against LRS is that LRS filed a Complaint against him. 

The only evidence in support of this contention is a reference to the Cross-Complaint where Cross-Complainants allege that LRS filed this current action “[s]hortly after becoming aware of the workers compensations suit” against the two businesses (Fix and (L&B)) that [Cross-Complianants] each run together as husband and wife. (X-Compl. ¶¶ 8, 9.) Specifically, the Cross-Complainant alleges that Eric Canos’s and LRS’s conduct caused Cross-Complaints to suffer resulting in an NIED, cause of action, while the IIED cause of action only alleges that Guadalupe, not Humberto, suffered the emotional distress. (Id. ¶¶ 175, 181.) 

It is unclear if the offending conduct was the filing of this lawsuit or Eric Cano’s actions towards Guadalupe that somehow also harmed Humberto. What is clear is that the offending conduct was engaged in by both LRS and Eric Cano, but only LRS has filed the lawsuit against Cross-Complainants. (See generally Compl.) 

Nevertheless, LRS has presented evidence that in filing its Complaint, it was acting in furtherance of the right to petition the government and that the filing of the Complaint is what gave rise to Humberto’s causes of action for NIED and IIED. 

Since Cross-Complainants have failed to file an Opposition to this motion, there is no competent evidence for the Court to weigh in Cross-Complainants’ favor other that their pleadings. The pleadings support the finding that the only wrongdoing Cross-Complainant Humberto Morante alleges against LRS, that gives rise to his claims for NIED and IIED, is that LRS filed a Complaint against Cross-Complainants after learning of Guadalupe’s workers compensation suit. Accordingly, Cross-Complainants’ pleadings support the clealr inference that Humberto’s claims against LRS and Eric Cano arise from LRS filing a Complaint in this suit. (See Medical Marijuana, Inc. v. ProjectCBD.com (2020) 46 Cal.App.5th 869, 883 [Thus, the act or acts underlying a claim for purposes of an anti-SLAPP statute is determined from plaintiff’s allegations.”].) 

Therefore, LRS has met its burden of showing that Humberto’s NIED and IIED claims arose from LRS engaging in a protected activity, which is the filing of this lawsuit. 

Accordingly, this shifts the burden to Plaintiff to establish a prima facie case. 

            Prong 2: Plaintiff’s Likelihood to Succeed on the Merits 

Under Civil Procedure Section 425.16, in ruling on an Anti-SLAPP motion “the court shall consider the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.” (Code Civ. Proc., § 425.16 subd. (b)(2).) 

LRS’s submitted the Declaration of Alec Bernstein to assert that Eric Cano is not now nor has ever been an owner, Officer, or Director of LRS Realty & Management Inc or an employee of LRS. (Bernstein Decl. ¶¶ 2, 3.) 

Cross-Complainants have submitted no Opposing papers or other competent evidence. Accordingly, Cross-Complainants cannot meet their burden of showing they can prevail on their claims for NIED and IIED as to Cross-Complainant Humberto Morante. 

Thus, LRS’s Motion to Strike Humberto Morante’s claims for NIED and IIED is GRANTED. 

Conclusion 

Plaintiff/Cross-Defendant LRS Realty & Management, Inc.’s and Eric Steven Cano’s Special Motion to Strike Cross-Complainant Humberto Morante’s fifteenth and sixteenth causes of action is GRANTED. These causes of action shall be stricken. 

Moving parties to give notice. 

The parties are strongly encouraged to attend all scheduled hearings virtually or by audio. Effective July 20, 2020, all matters will be scheduled virtually and/or with audio through the Court’s LACourtConnect technology. The parties are strongly encouraged to use LACourtConnect for all their matters. All masking protocols will be observed at the Courthouse and in the courtrooms.