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Title Executive Security Management, Inc. et al. v. Jack Dahl et al.

November 15, 2011

TITLE EXECUTIVE SECURITY MANAGEMENT, INC. ET AL.
v.
JACK DAHL ET AL.



The opinion of the court was delivered by: Honorable Christina A. Snyder, U.S. District Judge

CIVIL MINUTES - GENERAL

Present: The Honorable CHRISTINA A. SNYDER, U.S. DISTRICT JUDGE

RITA SANCHEZ N/A N/A

Deputy Clerk Court Reporter / Recorder Tape No.

Attorneys Present for Plaintiffs: Attorneys Present for Defendants: N/A N/A

Proceedings: (In Chambers:) CROSS-DEFENDANTS' MOTION FOR SUMMARY JUDGMENT (filed 8/4/2011)

INTRODUCTION

On April 9, 2008, plaintiffs Executive Security Management, Inc., d/b/a The APEX Group ("Apex"), and Contemporary Services Corporation ("CSC") filed the instant action in Los Angeles County Superior Court. With leave of court, plaintiffs filed a first amended complaint ("FAC") on November 11, 2009, against Jack Dahl ("Dahl"); Jeanette Johnson, in her individual capacity and as successor in interest to Dahl ("Johnson"); Populous Holdings, Inc., formerly known as HOK Sport Venue Event ("Populous"); HOK Group, Inc. ("HOK Group"); Juan Melendez ("Melendez"); and Yvette Rocha ("Rocha"). On December 17, 2009, Populous timely removed the instant action to this Court. On February 8, 2010, the Court granted in part and denied in part defendants' motion to dismiss the FAC.

On March 10, 2010, plaintiffs filed a Second Amended Complaint ("SAC") against all defendants except Melendez and Rocha who were not named as defendants. Plaintiffs' SAC alleges the following claims: (1) breach of fiduciary duty against Dahl and Johnson; (2) conversion against all defendants; (3) intentional interference with contract against all defendants; (4) intentional interference with prospective economic advantage against Dahl and Johnson; (5) intentional interference with prospective economic advantage against Populous and HOK Group; (6) violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 et seq. ("CFAA"), against Dahl and Johnson; (7) interception of communications in violation of the Wiretap Act, 18 U.S.C. § 2510 et seq., against Dahl and Johnson; (8) unlawful access to stored communications in violation of the Electronic Communications Privacy Act("ECPA"), pursuant to 18 U.S.C. § 2707, against Dhal and Johnson; (9) unfair competition in violation of the Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq. ("UCL") against all defendants; and (10) successor liability against Johnson.

On February 9, 2011, the Court signed the order on the parties' stipulation to permit the filing of the cross-complaint in this in this action which asserts claims against Apex, CSC, Apex and CSC's chief executive officer and majority owner Damon Zumwalt ("Zumwalt"), CSC's chief financial officer Keith Granier ("Granier"), CSC's senior VP of administration Jim Granger ("Granger"), regional manager and VP of operations of CSC Mark Glaser ("Glaser"), part-time Apex employee Gerald Trueman ("Trueman"), Apex's VP of operations Robert Brockway ("Brockway"), Apex and CSC's website administrator Abraham Kumar ("Kumar"), and CSC's VP of special events Dan Sidders ("Sidders"). Defendants' cross-complaint alleges the following claims: (1) intentional infliction of emotional distress ("IIED") by Dahl against all cross-defendants; (2) IIED by Johnson against all cross-defendants; (3) misappropriation of name pursuant to Cal. Civ. Code § 3344 by Dahl against all cross-defendants; (4) misappropriation of name pursuant to Cal. Civ. Code § 3344 by Johnson against all cross-defendants; (5) failure to produce corporate records pursuant to Corp. Code §§ 1601(a) and 1603(a) by Dahl against Apex, CSC, Zumwalt, and Granier; (6) failure to pay wages upon termination in violation of Cal. Lab. Code § 201 by Dahl against Apex and Zumwalt; (7) failure to pay overtime wages in violation of Cal. Lab. Code § 510 by Johnson against CSC and Zumwalt; (8) failure to provide itemized wage statements in violation of Cal. Lab. Code § 226 by Johnson against CSC and Zumwalt; (9) failure to provide payroll records in violation of Cal. Lab. Code § 226 by Johnson against CSC and Zumwalt; (10) failure to provide payroll records in violation of Cal. Lab. Code § 226 by Johnson against Apex and Zumwalt; (11) failure to provide inspection of personnel records in violation of Cal. Lab. Code § 1198.5 by Johnson against CSC and Zumwalt; (12) failure to provide inspection of personnel records in violation of Cal. Lab. Code § 1198.5 by Johnson against Apex and Zumwalt; (13) failure to reimburse expenses in violation of Cal. Lab. Code § 2802 by Johnson against CSC and Zumwalt; (14) failure to reimburse expenses in violation of Cal. Lab. Code § 2802 by Johnson against Apex and Zumwalt; and (15) breach of fiduciary duty against Zumwalt and Brockway.

On August 1, 2011, the parties entered into a stipulation whereby the cross-complainants dismissed the following claims: Dahl and Johnson dismissed their alter-ego claims against Zumwalt; Dahl dismissed his first claim for IIED against all cross-defendants; Dahl and Johnson dismissed their third and fourth claims for misappropriation of name against Zumwalt; Dahl dismissed his fifth claim for production of corporate records against all cross-defendants; Dahl dismissed his sixth claim for production of records against Zumwalt; Johnson dismissed her seventh claim for failure to pay overtime wages against Zumwalt; Johnson dismissed her eighth claim for failure to provide itemized wage statements against Zumwalt; Dahl and Johnson dismissed their ninth and tenth claims for failure to provide payroll records against Zumwalt; Dahl and Johnson dismissed their eleventh and twelfth claims for violation of Cal. Lab. Code § 1198.5 against all cross-defendants; and Dahl and Johnson dismissed their thirteenth and fourteenth claims for failure to reimburse expenses against Zumwalt.

On August 4, 2011, cross-defendants filed a motion for summary judgment as to the second, third, fourth, seventh, eighth, thirteenth, fourteenth, and fifteenth claims. Cross-complainants opposed the motion on September 23, 2011, and cross-defendants replied on October 6, 2011. After carefully considering the arguments set forth by both parties, the Court finds and concludes as follows.

BACKGROUND

Apex is a corporation that provides executive security, event security, and event accreditation services at concerts and sporting events. Cross Compl. ("CC") ¶ 20. CSC is a corporation that provides event staffing, security, and crowd management for concerts and sporting events. Id. ¶ 21. Cross-complainants Dahl and Johnson, husband and wife, are former employees of Apex and CSC, respectively. Id. ¶¶ 17--18. The gravamen of cross-complainants' dispute is that "[o]ver the course of their employment Dahl and Johnson were the recipients of calculated, intentional, malicious, and abusive misconduct engaged in by APEX, CSC and their majority owner and chief executive officer, Damon Zumwalt." Id. ¶ 1. According to cross-complainants, on January 27, 2008, Zumwalt attempted to enter the credentialing office at the Super Bowl even though he had not been properly credentialed. Id. ¶ 22. The NFL officials allegedly prohibited Zumwalt from entering the offices without being accompanied by NFL officials. Id. This allegedly enraged Zumwalt, who threatened to fire Dahl and another Apex employee and yelled that he was "going to shut the [expletive]-ing place down." Id. According to cross-complainants, Zumwalt "angrily exited" the premises and thereafter filed and served the complaint in this action. Id. Moreover, cross-complainants aver that Zumwalt also made numerous misrepresentations to the NFL employees, including "defamatory accusations and statements that cross-complainants had stolen money, stole a company computer, stole company files, stole confidential and proprietary information, were incompetent, were planning on starting their own business, and were working for competitors." Id. ¶ 23. These statements, according to cross-complainants, were made "with the express intent of damaging cross-complainants and inflicting substantial financial and emotional distress upon them." Id. Both Johnson and Dahl were allegedly suspended on February 4, 2008. Id. ¶¶ 24. Johnson resigned that same day, and Dahl was "constructively terminated" on February 11, 2008.

LEGAL STANDARD

Summary judgment is appropriate where "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The moving party has the initial burden of identifying relevant portions of the record that demonstrate the absence of a fact or facts necessary for one or more essential elements of each cause of action upon which the moving party seeks judgment. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

If the moving party meets its initial burden, the opposing party must then set out specific facts showing a genuine issue for trial in order to defeat the motion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); see also Fed. R. Civ. P. 56(c), (e). The nonmoving party must not simply rely on the pleadings and must do more than make "conclusory allegations [in] an affidavit." Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888 (1990); see also Celotex, 477 U.S. at 324. Summary judgment must be granted for the moving party if the nonmoving party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322; see also Abromson v. Am. Pac. Corp., 114 F.3d 898, 902 (9th Cir. 1997).

In light of the facts presented by the nonmoving party, along with any undisputed facts, the Court must decide whether the moving party is entitled to judgment as a matter of law. See T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 631 & n.3 (9th Cir. 1987). When deciding a motion for summary judgment, "the inferences to be drawn from the underlying facts . . . must be viewed in the light most favorable to the party opposing the motion." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citation omitted); Valley Nat'l Bank of Ariz. v. A.E. Rouse & Co., 121 F.3d 1332, 1335 (9th Cir. 1997). Summary judgment for the moving party is proper when a rational trier of fact would not be able to find for the nonmoving party on the claims at issue. See Matsushita, 475 U.S. at 587.

CROSS-DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

Cross-defendants have moved for summary judgment on cross-complainants' second, third, fourth, seventh, eighth, thirteenth, fourteenth, and fifteenth claims. Each claim is discussed in turn.

A. Second Claim for Intentional Infliction of Emotional Distress by Johnson Against All Cross-Defendants

To recover for IIED, a plaintiff must show: "(1) outrageous conduct by the defendant, (2) intention to cause or reckless disregard of the probability of causing emotional distress, (3) severe emotional suffering, and (4) actual and proximate causation of the emotional distress." McDaniel v. Gile, 230 Cal. App. 3d 363, 372 (Cal. Ct. App. 1991) (quoting Agarwal v. Johnson, 25 Cal. 3d 932, 946 (1979)).

Johnson alleges a litany of acts committed by cross-defendants as a basis for her IIED claim. See CC ¶¶ 31--35. These include, inter alia, falsifying allegations against Johnson, defaming her to third parties by accusing her of theft, failing to pay Johnson money she was owed, treating Johnson differently after she was diagnosed with breast cancer, cursing and yelling and banging his fists in the office, emailing inappropriate jokes, failing to keep the building up to code, discriminating against female employees, and requiring Johnson to work up to 70 hours per week. Id. ¶ 32(a), (c), (j), (s), (u), (aa), (cc), (gg). Johnson alleges that cross-defendants engaged in these actions "knowing that Johnson was particularly vulnerable to emotional distress due to her cancerous condition and the life threatening cancerous condition of her husband Dahl." Id. ¶ 33.

Cross-defendants move for summary judgment on Johnson's IIED claim under the "law of the case" doctrine. Mot. at 3 (citing Thomas v. Bible, 983 F.2d 152, 154 (9th Cir. 1993)). Cross-defendants argue that "Superior Court Judge Jerry Fields dismissed most of the allegations" from Johnson's IIED claim "without leave to amend," leaving only the allegations contained in paragraph 32(a). Id. Paragraph 32(a) alleges:

When the NFL refused Zumwalt and [Apex employee Oatess] Archey access to the security office at the Super Bowl, Zumwalt and Archey in addition to making loud threatening comments in the presence of NFL officials and others, as alleged in paragraph 23, determined to falsify allegations against Dahl and his wife Johnson and purported to initiate investigations against Dahl and ...


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