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Bel Air Internet, LLC v. Morales

California Court of Appeals, Second District, Second Division

February 26, 2018

BEL AIR INTERNET, LLC, Plaintiff and Respondent,
v.
ALBERT MORALES et al., Defendants and Appellants.

         APPEAL from an order of the Superior Court of Los Angeles County No. BC586145. Mel Red Recana, Judge. Reversed with directions.

          Kesluk, Silverstein & Jacob, Douglas N. Silverstein, Mia Munro and Geoffrey L. Bryan for Defendants and Appellants.

          Skiermont Derby, Paul B. Derby, John J. O'Kane IV and Mane Sardaryan for Plaintiff and Respondent.

          LUI, P. J.

         This appeal requires us to consider the role of the pleadings and supporting declarations in deciding a motion to strike under the anti-SLAPP statute (Code Civ. Proc., § 425.16).[1] Section 425.16 protects the exercise of certain constitutional rights by permitting a motion to strike when a complaint targets specified conduct that involves the right to freedom of speech or the right to petition the government. When a plaintiff's complaint shows that a claim arises from communications that are protected under the statute, must the defendant support a motion to strike with declarations confirming that his or her actions fall within one of the categories of protected conduct?

         We conclude that, when the complaint itself alleges protected activity, a moving party may rely on the plaintiff's allegations alone in arguing that the plaintiff's claims arise from an act “in furtherance of the person's right of petition or free speech.” (§ 425.16, subd. (b)(1).) While section 425.16 requires a court to consider both the “pleadings” and the “supporting and opposing affidavits stating the facts upon which the liability or defense is based” (§ 425.16, subd. (b)(2)), it does not requirea moving party to submit declarations confirming the factual basis for the plaintiff's claims. Otherwise, a defendant who disputes the plaintiff's allegations (as appellants do here) might be precluded from bringing an anti-SLAPP motion. That would have the perverse effect of making anti-SLAPP relief unavailable when a plaintiff alleges a baseless claim, which is precisely the kind of claim that section 425.16 was intended to address. (See Baral v. Schnitt (2016) 1 Cal.5th 376, 384 (Baral) [the anti-SLAPP statute “provides a procedure for weeding out, at an early stage, meritless claims arising from protected activity”].)

         Here, plaintiff and respondent Bel Air Internet, LLC (Bel Air) alleges that defendants and appellants Albert Morales and Flavio Delabra (collectively, Appellants) encouraged fellow employees of Bel Air to quit and sue the company for alleged employment violations rather than sign a release of such claims that Bel Air requested. Consistent with several decisions by our Supreme Court, we conclude that such prelitigation conduct encouraging third parties to sue is protected petitioning activity under section 425.16, subdivision (e). In bringing a motion to strike under that section, Appellants could rely on Bel Air's allegations that they urged other employees to quit and sue, even though Appellants denied engaging in this conduct. We therefore reverse the trial court's order denying Appellants' motion to strike.

         BACKGROUND

         Bel Air is a DirecTV service provider. Until June 8, 2015, Appellants worked at Bel Air as field installers. Appellants left the company under circumstances that Bel Air describes as a voluntary departure and Appellants characterize as wrongful termination. As shown below, the parties disagree on most other critical facts as well.

         1. Bel Air's Complaint

         Bel Air filed its complaint on June 25, 2015. The complaint alleges causes of action for: (1) intentional interference with contractual relations; (2) breach of contract; (3) breach of the implied covenant of good faith and fair dealing; and (4) conversion (against Morales only). The first three causes of action (the Contract Claims) are based upon two different theories of interference and breach.

         First, Bel Air claims that Appellants interfered with its contractual relationship with other Bel Air employees by encouraging them to leave their jobs and sue Bel Air. Bel Air's intentional interference claim alleges that Appellants “advised, counseled, encouraged and sought to persuade various BEL AIR employees to end their employment by BEL AIR, and on information and belief, to refuse to sign certain employment-related documents, create the false appearance of being terminated by BEL AIR, and pursue employment-related lawsuits against BEL AIR, possibly at the encouragement or direction of their own lawyers.” Bel Air's second and third causes of action allege more succinctly that Appellants acted “in contravention of their duties of care and loyalty” by “seeking to encourage other BEL AIR employees to quit and sue BEL AIR, and thereby disrupt BEL AIR's business operations.”

         Second, Bel Air's second and third causes of action allege that Appellants breached their contractual duties to Bel Air by “not performing employment services for BEL AIR from June 8, 2015, the date on which they left work without explanation and did not return, through the last date on which [Appellants] were paid by BEL AIR.”

         2. The Motion to Strike

         a. Appellants' motion

         On August 24, 2015, Appellants filed a motion to strike under section 425.16, seeking dismissal of Bel Air's first three causes of action. Appellants supported their motion with their own declarations and a declaration from another Bel Air field installer, Andrew Figueroa.

         According to Appellants, until about June 1, 2015, Bel Air paid them and other Bel Air installers as “exempt” employees under the applicable employment statutes and regulations. Appellants were not paid for hours worked above eight hours per day or 40 hours per week, and were not informed of their right to meal and rest breaks or compensated for missed breaks.

         On June 1, 2015, a Bel Air manager, Kaj Louis-Johnson, held a meeting with Bel Air employees during which he provided them with several documents. One document outlined new hourly payment procedures and compensation. That document explained that, going forward, Bel Air employees would be “paid overtime in accordance with state and federal overtime requirements, ” including for hours worked over eight hours a day or 40 hours a week. It also explained that employees would be entitled to rest breaks and meal periods.

         Another document, entitled, “General Release, ” stated that it was to “settle all potential claims by Employee against Employer [Bel Air] that may have accrued up to the date this Agreement was signed.” The General Release expressly released claims relating to Bel Air's “classification of Employee as exempt rather than non-exempt (hereinafter referred to as ‘Prior Classification') that could have been alleged for violations of any state or federal laws (including but not limited to the California Labor Code and the Fair Labor Standards Act (29 U.S.C. § 201, et seq.), Wage Order No. 4, California's Unfair Business Practices law, and California's Private Attorney General Act.” The General Release stated that it was supported by consideration that included “[e]mployee's continued employment as an at-will employee” and additional compensation that the employee would “on occasion receive... for certain hours not actually worked.”[2]

         Appellants refused to sign the General Release. Several meetings followed on June 8, 2015. Appellants claim that, at the first meeting, Louis-Johnson told Appellants and other employees that Bel Air would terminate their employment if they did not sign the General Release that day. At subsequent meetings on the morning of June 8 attended by Bel Air's owner, Terry Koosed, its General Counsel, Joshua White, and Louis-Johnson, Appellants continued to refuse to sign the General Release. Koosed told Morales that he would “need to find... another job” and wished Delabra “good luck in the future.” White gave Morales a document that he called a “ ‘severance' agreement.” That document was entitled, “Settlement Agreement and General Release, ” and included reference to a proposed settlement payment of $1, 500, which the agreement characterized as a “disputed amount.” Appellants left the meetings believing they had been fired.

         In their declarations, Appellants denied encouraging other employees “ ‘to end their employment' ” and “ ‘create the false appearance of being terminated by Bel Air.' ” They also denied Bel Air's allegation that they encouraged litigation, stating in their declarations that they “did not ‘seek to encourage other BEL AIR employees to quit and sue BEL AIR.' ”

         b. Bel Air's opposition

         Bel Air filed an opposition supported by declarations from Louis-Johnson, Koosed, White, and other Bel Air employees. Bel Air denied that it had terminated Appellants' employment. It also claimed that no Bel Air employee “has ever been told that he had to sign any employment-related documents, or else he would lose his job.” According to Bel Air, Appellants voluntarily left their jobs. Morales said that he had another job starting in a couple of months that paid substantially more, and Delabra said that Bel Air had “become too corporate.” Bel Air claimed that Appellants picked up work equipment on June 8, 2015, giving the impression that they intended to continue working, but never returned to work although they were paid “through mid-June.”

         According to another Bel Air field installer, after the meetings on June 8, Morales said that he was “leaving Bel Air, and that he would soon be sitting on a beach in the Bahamas.” Koosed said in his declaration that, after the meetings on June 8, 2015, Bel Air attempted to get Appellants to return to work and that Bel Air continued to pay them through June 15, 2015 (for Delabra), and June 19, 2015 (for Morales), “despite doing no work of any kind for Bel Air after the morning meeting on June 8.”

         3. The Trial Court's Ruling

         Prior to the hearing on Appellants' motion to strike on November 23, 2015, the trial court issued a tentative ruling granting the motion. With respect to the first step of the anti-SLAPP analysis (which, as discussed below, focuses on whether a plaintiff's claims arise from protected conduct), the court's tentative ruling found that the “allegations that defendants advised, counseled, encouraged, and sought to persuade various Bel Air employees to pursue employment-related lawsuits against Bel Air, and that defendants encouraged other Bel Air employees to quit and sue fall under... section 425.16(e)(2).” The court concluded that these allegations “make up the bases for the claims” in Bel Air's first three causes of action.

         With respect to the second step of the anti-SLAPP procedure (concerning whether the alleged claims have merit), the court's tentative ruling concluded that Bel Air failed to meet its burden to show a probability that it would prevail on its claims. The court's conclusion was supported in part by its finding that the “litigation privilege applies to the litigation-related activity.”

         After the hearing on the motion, the court “noted that it did not address the issue of whether during their pre-litigation activities, defendants were in good faith seriously considering suing the plaintiff.”[3] The court therefore ordered supplemental briefing on the issue. Following receipt of the parties' supplemental briefs and additional declarations, the court reversed its tentative ruling with respect to prong one of Appellants' motion. The court found that “the defendants were NOT in good faith seriously considering suing the plaintiff in their prelitigation activities.” The court quoted Appellants' statements in their declarations that they “did not ...


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