Dr. V. Productions, Inc. v. Rey ( 2021 )

Filed 9/8/21 Certified for Publication 9/10/21 (order attached)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
B312605
DR. V PRODUCTIONS, INC.,
(Los Angeles County
Plaintiff and Respondent, Super. Ct. No.
20STCV23176)
v.
ORDER DISMISSING
SAMANTHA REY, APPEAL
Defendant and Appellant.
BY THE COURT:
Plaintiff and respondent Dr. V. Productions, Inc. moves to
dismiss defendant and appellant Samantha Rey’s appeal from an
order denying appellant’s motion for $273,484.56 in attorney’s
fees under Civil Code section 3426.4 (section 3426.4). That
statute provides for attorney’s fees for the bad faith prosecution
of a trade secret misappropriation claim. Respondent argues the
order is not separately appealable. We agree.
I.
The underlying litigation, filed in 2020, stems from a
former employment relationship between appellant and
respondent. Respondent is an entertainment production
company, and appellant held various positions with the company.
After appellant was terminated, respondent brought suit against
her and related parties. Generally speaking, the complaint
alleged that, after appellant’s termination, she converted and
destroyed documents that belonged to respondent. According to
the complaint, the files in question “included the vast majority of
Respondent’s proprietary company information.” The current
lawsuit is the third among the parties.
In the present action, after significant discovery,
respondent voluntarily dismissed its misappropriation of trade
secrets cause of action. That left remaining claims for breach of
fiduciary duty, “abuse of control,” gross mismanagement,
corporate waste, conversion, and extortion. Those claims are still
outstanding.
Following the dismissal of the trade secrets cause of action,
appellant moved for an award of attorney fees under section
3426.4. On March 10, 2021, the trial court denied the motion.
Appellant appealed, and respondent moved to dismiss the
appeal.1
1 On the same date, the court ruled on various other matters.
The current appeal involves only the denial of attorney fees.
2
II.
Section 3426.4 provides: “If a claim of misappropriation is
made in bad faith, a motion to terminate an injunction is made or
resisted in bad faith, or willful and malicious misappropriation
exists, the court may award reasonable attorney’s fees and costs
to the prevailing party. Recoverable costs hereunder shall
include a reasonable sum to cover the services of expert
witnesses, who are not regular employees of any party, actually
incurred and reasonably necessary in either, or both, preparation
for trial or arbitration, or during trial or arbitration, of the case
by the prevailing party.”
In enacting the statute, “the Legislature was concerned
with curbing ‘specious’ actions for misappropriation of trade
secrets, and such actions may superficially appear to have merit.”
(Gemini Aluminum Corp. v. California Custom Shapes, Inc.
(2002) 95 Cal.App.4th 1249, 1262.) An award of reasonable
attorney’s fees may act “ ‘as a deterrent to specious claims of
misappropriation. . . .’ M. Jager, Trade Secrets Law, APP.A1 at
13 (1988) (emphasis added).” (Stilwell Development Inc. v. Chen
(C.D. Cal., Apr. 25, 1989, No. CV86-4487-GHK) 1989 WL 418783,
at *3, 1989 U.S. Dist. Lexis 5971, emphasis in district court
opinion.)
There are few California appellate opinions that discuss
section 3426.4, and we have found none that addresses whether
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there is a right to an interlocutory appeal such as this one.2 So
we apply general principles of appellate jurisprudence in deciding
whether or not to dismiss the appeal.
“The right to appeal is conferred by statute. [Citation.]
Code of Civil Procedure section 904.1, subdivision (a) lists
appealable judgments and orders.” (Apex LLC v. Korusfood.com
(2013) 222 Cal.App.4th 1010, 1014-1015 (Apex).) Appellant does
not contend that the order in question is appealable pursuant to
that section. Instead, she asserts that the order is an appealable
“collateral order.”
“An appeal is allowed if the order is a final judgment
against a party in a collateral proceeding growing out of the
action.” (Sjoberg v. Hastorf (1948) 33 Cal.2d 116, 119 (Sjoberg).)
“To qualify as appealable, the interlocutory order must be a final
determination of a matter that is collateral—i.e., distinct and
severable—from the general subject of the litigation.” (Koshak v.
Malek (2011) 200 Cal.App.4th 1540, 1545.)
Appellant concedes at page 17 of her opposition brief that
appeals allowable from collateral orders in this context typically
2 Many of the opinions that address section 3426.4 are from
the United States District Court. Stilwell, a case mentioned in
the text, is one. The parties do not cite, and we have not found,
any California appellate case involving an interlocutory appeal of
a section 3426.4 order. The California appeals are all post
judgment.
4
involve the direct payment of money or performance of an act.
(See, e.g., Apex, supra, 222 Cal.App.4th 1010,1016; Marsh v.
Mountain Zephyr, Inc. (1996) 43 Ca1.App.4th 289, 297-298.) The
present case involves neither – the court refused to order
respondent to pay attorney fees; the court did not order the
performance of any other act. Appellant posits two theories why
the order denying attorney’s fees in this setting is nevertheless
appealable.
Appellant’s first theory is that, if a collateral order that
directs payment of attorney fees (i.e. “payment of money”) is
appealable, by parity of reasoning the opposite should be true.
We disagree for two reasons. The modern formulation of the rule
is found in Sjoberg, supra, 33 Cal.2d at page 119: “An appeal is
allowed if the order is a final judgment against a party in a
collateral proceeding growing out of the action. [Citations.] It is
not sufficient that the order determine finally for the purposes of
further proceedings in the trial court some distinct issue in the
case; it must direct the payment of money by appellant or the
performance of an act by or against him.” This articulation
makes no mention of an order denying the payment of money or
refusing to require performance of an act. Rutter refers to this
distinction as the “majority view.” (Eisenberg, et al., Cal.
Practice Guide, Civil Appeals and Writs, § 2.78, p. 2-56.) “If
instead, the interim order or judgment is ‘prohibitive’ in effect
5
(e.g. merely prevents the payment of money or performance of an
act), the weight of authority holds that it is not directly
appealable and the right of appeal must await a final judgment.”
(Ibid, emphasis in original.)
Appellant’s argument also overlooks that, in our appellate
jurisprudence, statutes are not always reciprocal to the parties.
Some authorize an appeal by one side to a matter but deny that
right to the other side. (See, e.g., Code of Civ. Proc, § 437c,
subdivision (m) [orders granting summary judgment appealable;
denials of summary judgment reviewed by writ]; Code of Civ.
Proc., § 1294, subd. (a); Nelsen v. Legacy Partners Residential,
Inc. (2012) 207 Cal.App.4th 1115, 1121 [“Orders granting motions
to compel arbitration are generally not immediately
appealable.”]; Hernandez v. Ross Stores, Inc. (2016) 7 Cal.App.5th
171, 176 [“The denial of a motion to compel arbitration is an
appealable order.”]; Cf. Doe v. Luster (2006) 145 Cal.App.4th 139,
150 [a separate order granting or denying attorney’s fees in
connection with an anti-SLAPP motion (§§ 425.16, et seq.) is
itself not separately appealable].)
Appellant has not articulated any policy reason why the
collateral order rule under Sjoberg and other cases should be
extended to permit an interlocutory appeal of an order denying
an award of attorney fees during the time the bulk of the
litigation is ongoing in the trial court.
6
Appellant’s second theory of appealability relies on
authority that favors a more holistic approach to the issue.
Appellant cites as an example Meehan v. Hopps (1955) 45 Cal.2d
213, 215-217. There, the Supreme Court held that an order
denying a motion to disqualify opposing counsel was appealable.
The court made no mention of the payment of money or
performance of an act. Instead, the court analogized the motion
to the denial of injunctive relief and concluded that the order was
collateral: “The matter of disqualification of counsel is
unquestionably collateral to the merits of the case.” (Id., at
pp. 216–217.)
Appellant also relies on Muller v. Fresno Community
Hospital & Medical Center (2009) 172 Cal.App.4th 887 for a what
she claims is an expansive collateral order rule: “When the order
does not require a payment of money or the performance of an
act, the Supreme Court will find the order appealable without
reference to these limitations, as long as the court is satisfied that
the order is truly collateral.” (Id. at p. 902; emphasis in original.)
We first observe that our colleagues in the First District,
Division 2, have cautioned against an expansive interpretation of
the collateral order doctrine. (Conservatorship of Rich (1996)
46 Cal.App.4th 1233, 1235 (Rich).) There, the conservator had
moved to substitute counsel in a conservatorship proceeding. The
motion was denied, and the conservator appealed. The Court of
7
Appeal dismissed the appeal. As for those courts that have not
faithfully followed the Supreme Court’s opinion in Sjoberg, the
Rich court had this to say: “We consider this line of cases
aberrant. In the seminal case articulating the exception, Sjoberg
[citation], Justice Traynor could not have been more clear that
such an order must pass two tests to be appealable: ‘It is not
sufficient that the order determine finally for the purposes of
further proceedings in the trial court some distinct issue in the
case; it must direct the payment of money by the appellant or the
performance of an act by or against him.’ ” (Rich, supra, at
p. 1237.)
Even if we were to apply the broader standard that
appellant suggests, this appeal would lack legal vitality. The
order before us is not “truly collateral” under Muller. In contrast,
the order disqualifying counsel as in Meehan unquestionably was
unrelated to the merits of the parties’ dispute. Not so here.
Appellant’s motion addressed only one of respondent’s causes of
action; six remain. “A party may not normally appeal from a
judgment on one of [the] causes of action if determination of any
remaining cause is still pending.” (Tenhet v. Boswell (1976)
18 Cal.3d 150, 153. See also Griset v. Fair Political Practices
Com. (2001) 25 Cal.4th 688, 697) [“piecemeal disposition and
multiple appeals in a single action would be oppressive and
costly”].)
8
At its core, this is a lawsuit about the claimed destruction
and conversion of corporate documents, a claim common to the
trade secret cause of action and all the others. Whether some or
all of the documents were truly trade secrets is likely not
dispositive of the remaining claims, and, hence, the order denying
attorney fees cannot be said to be collateral. (Cf. Yield Dynamics,
Inc. v. TEA Systems Corp (2007) 154 Cal.App.4th 547, 579 [trade
secret claim “was intractably intertwined” with “claims for breach
of the asset agreement”].)
Appellant asks that, if the court is inclined to dismiss the
appeal, the notice of appeal should be treated as a petition for a
writ of mandamus. We decline to do so. Appellant has an
adequate remedy on appeal, just not at this time.
We also deny respondent’s request for sanctions for
appellant having filed a frivolous appeal. We cannot say at this
juncture that appellant’s appeal was prosecuted for an improper
motive or indisputably lacks merit. (In re Marriage of Flaherty
(1982) 31 Cal.3d 637, 650.)
The appeal is dismissed.
____________________________________________________________
RUBIN, P. J. MOOR, J. KIM,J.
9
Filed 9/10/21
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
DR. V PRODUCTIONS, INC., B312605
Plaintiff and Respondent, (Los Angeles County Super.
Ct. No. 20STCV23176)
v.
ORDER CERTIFYING ORDER
SAMANTHA REY, OF DISMISSAL FOR
PUBLICATION
Defendant and Appellant. [No change in judgment]
BY THE COURT:
APPEAL from an order of the Los Angeles Superior
Court, Michael L. Stern, Judge. Dismissed.
Lefkowitz Law Group, Jamie Lefkowitz for Defendant
and Appellant.
Traction Law Group and Charles Menzies; KJC Law
Group, A.P.C. and Kevin Jason Cole for Plaintiff and
Respondent.
__________________________
The order of dismissal in the above-entitled matter filed on
September 8, 2021, was not certified for publication in the
Official Reports. For good cause, it now appears that the order
should be published in the Official Reports and it is so ordered.
There is no change in judgment.
____________________________________________________________
RUBIN, P. J. MOOR, J. KIM,J.
2