Deng v. Loh CA2/5 ( 2014 )

Filed 6/27/14 Deng v. Loh CA2/5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
HUI DUAN JENNY DENG, B249012
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. BC497876)
v.
JIMMY LOH et al.,
Defendants,
PETER HWU,
Defendant and Appellant.
APPEAL from an order of the Superior Court of the County of Los Angeles,
Abraham Khan, Judge. Affirmed.
Paul D. Cass for Defendant and Appellant Peter S. Hwu.
Gary Hollingsworth for Plaintiff and Respondent.
No appearance for Defendants.
INTRODUCTION
Plaintiff and respondent Hui Duan Jenny Deng (Deng) sued Jimmy Loh (Loh); his
company APC; Su Liu (Liu); and Peter S. Hwu (defendant and appellant) (collectively
defendants) in connection with the termination of her employment by APC1 and for
defamation. Hwu filed a special motion to strike under Code of Civil Procedure section
425.162 (anti-SLAPP statute), which motion was denied. Hwu appeals from that denial.
We affirm the order of the trial court.
BACKGROUND
After defendants dismissed their action against Deng for unfair competition,
misappropriation of trade secrets, and conversion, on December 21, 2012, Deng filed an
action against defendants for her termination from APC because of her medical
condition; her request for medical leave; age discrimination; and harassment. She alleged
violations of the California Fair Employment and Housing Act (Gov. Code, § 12900 et
seq.) for discrimination and failure to prevent harassment. She also alleged that
defendants had defamed her and violated the Labor Code section 1054 by falsely
informing customers and others that she had been fired from APC because of theft or
other illegal conduct and that she was retired, in the hospital, or incompetent at her job.
She further alleged intentional infliction of emotional distress and other violations of the
Labor Code. Prior to the filing of the Deng action, on October 8, 2012, Deng’s lawyer
wrote to “customers, associates and friends” of Deng informing them that defendants had
dismissed their action and saying that Deng “is considering claims she has against Jimmy
Loh and/or Su Liu for their conduct during the course of the lawsuit.”
1
Our reference to APC as Deng’s employer includes Loh and Liu to the extent they
were also her employers.
2
All further statutory references are to the Code of Civil Procedure unless otherwise
noted.
2
The basis for Deng’s action against Hwu is a letter he wrote to Deng’s customers
and others on October 18, 2012, which states as follows: “Our law office represents
Jimmy Loh and Su Liu, CPAs, APC. On April 26, 2012, we filed a lawsuit against Jenny
Hui Duan Deng. On June 21, 2012, after discovering new facts to support additional
causes of action (i.e., conversion and accounting), we filed a First Amended Complaint.
In addition, our client filed a complaint with the Los Angeles County Sheriff’s
Department and it initiated an investigation of Ms. Deng’s conduct during the course of
her employment with our client. [¶] Since our client was concerned that, even if it won
the lawsuit, it could not collect on any judgment entered by the court, on September 26,
2012, we dismissed the lawsuit, without prejudice. [¶] At this time, the Los Angeles
County Sheriff’s Department is still conducting its investigation, and our client will
follow up and cooperate with the investigation.” He enclosed a copy of the amended
complaint, which he said had been dismissed, in which there are allegations against Deng
for misappropriation of trade secrets, unfair competition, conversion of monies, and for
an accounting. Hwu then sent a letter of October 29, 2012 to “retract” the statements in
the October 18, 2012, letter but enclosing that letter.
Hwu is named as a defendant in only the fifth, sixth, and seventh causes of action
in Deng’s complaint. The letter of October 18, 2012 is the sole ground for the
defamation cause of action—the sixth cause of action. The fifth cause of action for
violation of Labor Code section 1054 for attempting by misrepresentation to prevent
Deng from attempting to obtain employment against all defendants includes the
following allegations: “53. On or about January 5, 2012, immediately after [Deng’s]
employment with [defendants] was terminated, and continuing to the present, defendants
falsely informed numerous customers and others that [Deng] had been fired because
[Deng] has stolen money or engaged in other illegal conduct while employed by
[defendants]. Further, defendants also falsely informed customers and others that [Deng]
had retired, was in the hospital, or was incompetent at her job. Defendants, by making
these misrepresentation[s], attempted to prevent [Deng] from obtaining employment. [¶]
54. Further, beginning in or about January 5, 2012, and continuing to the present,
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[defendants], either individually or collectively, have made statements by telephone to
numerous persons, which statements are that any person who employed [Deng] would be
subject to a lawsuit by defendants. Such statements were made in January 2012 to the
owner of an accounting firm with whom [Deng] had sought employment. As a result of
this verbal statement, and for no other reason, this employer declined to hire [Deng].
[Deng] is informed and believes that other potential employers have declined to hire
[Deng] because of similar telephonic statements by defendants.” The seventh cause of
action is for intentional infliction of emotional distress by virtue of all the preceding
allegations.
Hwu, the attorney for the other defendants and a defendant himself, filed a notice
of special motion to strike (§ 425.16). In points and authorities submitted with the
motion, he states the following: Deng was employed by APC, an accounting firm, as a
staff accountant and manager; he was the attorney for defendants; when Deng left the
employment she misappropriated APC’s trade secrets by copying confidential files and
information; she solicited APC’s employees to leave APC and work with her; she
solicited APC’s clients; despite assurance she would stop soliciting clients, Deng
continued to do so; and Deng embezzled money from APC. Hwu also states that Loh,
Liu and APC filed an action against Deng and a criminal complaint against Deng with the
Los Angeles County Sheriff’s Department; Loh, Liu and APC dismissed the civil action
against Deng without prejudice; Deng’s attorney sent a letter to APC clients falsely
charging that Loh and Liu were trying to stop Deng from doing business as a bookkeeper
and tax preparer and dismissed the lawsuit against her, which assertions, other than the
dismissal, had no justification; in response, Hwu sent a letter to the same clients
explaining the “true factual and legal allegations” of the lawsuit and that a complaint had
been filed with the Sheriff’s Department. After a demand by Deng, Hwu sent a retraction
letter and demanded that plaintiff’s counsel also do so.
In a declaration in support of his motion to strike, Hwu attached the
correspondence referred to in his points and authorities and stated that a detective
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informed him that a criminal complaint, presumably against Deng, was still open and
pending.
Hwu argued that his actions were in furtherance of his right of free speech and
covered by the common interest privilege and by the litigation privilege. He also asserted
that the statements were true and not motivated by malice. Thus, he claims that the
action should be dismissed under the anti-SLAPP statute.
In opposition to the motion to strike, Deng filed a declaration that she was fired as
a bookkeeper and tax preparer because of her medical condition; that Loh had sold his
practice to Liu, who preferred younger people to do the work; when she sought new
work, Loh and Liu threatened potential employers that they could be sued if they hired
her; when clients called, Loh and Liu falsely stated that she was retired or was
hospitalized so she no longer could work for the clients; Loh and Liu stated to clients
they were suing her; Loh and Liu sued her, but then dismissed the suit; Loh, Liu and Hwu
then sent letters to numerous persons falsely charging her with criminal acts and that they
had referred the matter to the Los Angeles County Sheriff; and she has suffered financial
loss and humiliation. Deng argued that the anti-SLAPP motion was not applicable and
that the litigation privilege did not apply because the lawsuit had been dismissed.
Deng filed objections to the declaration of Hwu on the grounds, inter alia, of
hearsay, lack of foundation and other grounds. Hwu filed a supplemental declaration
attaching a document from the Los Angeles County District Attorney’s office notifying
Loh that criminal charges were filed against Deng. Hwu also filed objections to Deng’s
declaration based on, inter alia, lack of foundation. Hwu argued that a letter from Deng’s
attorney to customers said Deng might file a lawsuit against defendants and Hwu’s letter
to the clients was in anticipation of that lawsuit and therefore covered by the anti-SLAPP
statute.
The trial court denied the motion on the ground that the anti-SLAPP statute did not
apply because the alleged communications were not in anticipation of litigation, but
instead addressed a dismissed and abandoned litigation. Thus, the trial court never
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reached the evidentiary objections, nor the probability of success of Deng’s claims. Hwu
filed a timely notice of appeal
DISCUSSION
A. Appealability and Standard of Review
An order granting or denying a special motion to strike under section 425.16 is
directly appealable. (§§ 425.16, subd. (i), 904.1, subd. (a)(13); Flatley v. Mauro (2006)
39 Cal.4th 299, 325-326.) We review de novo the trial court’s order denying an anti-
SLAPP motion. (Flatley v. Mauro, supra, 39 Cal.4th at p. 325; Christian Research
Institute v. Alnor (2007) 148 Cal.App.4th 71, 79].) We do not weigh the evidence; rather,
we accept as true evidence favorable to Deng, and evaluate evidence favorable to Hwu to
determine whether it defeats Deng’s claim as a matter of law. (Flatley v. Mauro, supra,39 Cal.4th at p. 326; Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 269,
fn. 3; Dyer v. Childress (2007) 147 Cal.App.4th 1273, 1279.)
B. Legal Principles
“‘A SLAPP suit—a strategic lawsuit against public participation—seeks to chill or
punish a party’s exercise of constitutional rights to free speech and to petition the
government for redress of grievances. [Citation.] The Legislature enacted Code of Civil
Procedure section 425.16—known as the anti-SLAPP statute—to provide a procedural
remedy to dispose of lawsuits that are brought to chill the valid exercise of constitutional
rights. [Citation.]’ (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1055–1056.)” (Rohde v.
Wolf (2007) 154 Cal.App.4th 28, 34.) “The goal [of section 425.16] is to eliminate
meritless or retaliatory litigation at an early stage of the proceedings.” (Seelig v. Infinity
Broadcasting Corp. (2002) 97 Cal.App.4th 798, 806.)
Section 425.16 provides that “[a] cause of action against a person arising from any
act of that person in furtherance of the person’s right of petition or free speech under the
United States Constitution or the California Constitution in connection with a public issue
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shall be subject to a special motion to strike, unless the court determines that the plaintiff
has established that there is a probability that the plaintiff will prevail on the claim.”
(§ 425.16, subd. (b)(1).) “In considering the application of the anti-SLAPP statute, courts
engage in a two-step process. “‘First, the court decides whether the defendant has made a
threshold showing that the challenged cause of action is one arising from protected
activity. . . . If the court finds such a showing has been made, it then determines whether
the plaintiff has demonstrated a probability of prevailing on the claim.”’ (Taus v. Loftus
(2007) 40 Cal.4th 683, 712.) ‘“‘The defendant has the burden on the first issue, the
threshold issue; the plaintiff has the burden on the second issue. [Citation.]’ [Citation.]”
[Citations.]’” (Rohde v. Wolf, supra, 154 Cal.App.4th at pp. 34-35.) “‘Only a cause of
action that satisfies both prongs of the anti-SLAPP statute—i.e., that arises from
protected speech or petitioning and lacks even minimal merit—is a SLAPP, subject to
being stricken under the statute.’ [Citation.]” (Governor Gray Davis Com. v. American
Taxpayers Alliance (2002) 102 Cal.App.4th 449, 456.)
“There is no question that ‘a prelitigation statement falls within clause (1) or (2) of
section 426.16, subdivision (e) if the statement “‘concern[s] the subject of the dispute’
and is made ‘in anticipation of litigation “contemplated in good faith and under serious
consideration[.]”’”’” (Aguilar v. Goldstein (2012) 207 Cal.App.4th 1152, 1162; see also
Neville v. Chudacoff (2008) 160 Cal.App.4th 1255, 1268 (Neville). In Neville, an
employer brought a contract and trade secrets action against a former employee. The
employee cross-claimed that a letter sent by the employer’s lawyer to customers before
filing the lawsuit was defamatory. We held that it made no difference to the outcome that
the letter had been sent before the employer brought the lawsuit against the former
employee. According to Neville, “[t]his position reflects that ‘courts have adopted “a
fairly expansive view of what constitutes litigation-related activities within the scope of
section 425.16.” [Citation.]’ [Citation.] Accordingly, although litigation may not have
commenced, if a statement ‘concern[s] the subject of the dispute’ and is made ‘in
anticipation of litigation “contemplated in good faith and under serious consideration,”’
[citations] then the statement may be petitioning activity protected by section 425.16.”
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(Ibid; see People ex rel. Fire Ins. Exchange v. Anapol (2012) 211 Cal.App.4th 809, 824;
Bailey v. Brewer (2011) 197 Cal.App.4th 781, 789-790.)
“To demonstrate a probability of prevailing on the merits, the plaintiff must show
that the complaint is legally sufficient and must present a prima facie showing of facts
that, if believed by the trier of fact, would support judgment in the plaintiff’s favor.
[Citations.] The plaintiff’s showing of facts must consist of evidence that would be
admissible at trial. [Citation.] The court cannot weight the evidence, but must determine
whether the evidence is sufficient to support a judgment in the plaintiff’s favor as a
matter of law, as on a motion for summary judgment. [Citations].” (Hall v. Time
Warner, Inc. (2007) 153 Cal.App.4th 1337, 1346; see College Hospital, Inc. v. Superior
Court (1994) 8 Cal.4th 704, 719-720, fn. 5; 1-800 Contacts, Inc. v. Steinberg (2003) 107
Cal.App.4th 568, 585.)
C. Prelitigation Communication
The anti-SLAPP statute refers to pending litigation, but has been interpreted to
apply to prelitigation statements. (Neville, supra, 160 Cal.App.4th at p. 1268.) Thus,
“communications preparatory to, or in anticipation of, being an action are within the
protection of the anti-SLAPP statute.” (People ex rel. Fire Ins. Exchange v. Anapol,
supra, 211 Cal.App.4th at p. 824.) To be covered by the anti-SLAPP statute, the
prelitigation statement must concern the subject of the dispute and be made “in
anticipation of litigation contemplated in good faith and under serious consideration.”
(Ibid.) The litigation must be “genuinely contemplated” and not just “hollow threats.”
(Ibid.) “[A]n offhand suggestion a given claim or dispute might result in a lawsuit would
be insufficient to invoke the privilege [Civ. Code, § 47(b)].” (Edwards v. Centex Real
Estate Corp. (1997) 53 Cal.App.4th 15, 35.) The litigation privilege, although not
“coextensive” with the anti-SLAPP statute, is used to construe the scope of the anti-
SLAPP statute. (Neville, supra, 160 Cal.App.4th at p. 1263.)
As stated in Edwards v. Centex Real Estate Corp., supra, 53 Cal.App.4th at page
39, “In order for [a party] to be able to take advantage of the privilege by applying it to
8
their own communications, they must establish that at the time they made the subject
communication, they themselves actually contemplated prospective litigation, seriously
and in good faith.” (See also Action Apartment Assn., Inc. v. City of Santa Monica
(2007) 41 Cal.4th 1232, 1251 [a “prelitigation communication is privileged only when it
relates to litigation that is contemplated in good faith and under serious consideration”].)
Moreover, it has been said that the litigation privilege “attaches to prelitigation
communications that are made at the point that ‘imminent access to the courts is seriously
proposed by a party in good faith for the purpose of resolving a dispute . . . .’ [Citation.]”
(Olsen v. Harbison (2010) 191 Cal.App.4th 325, 334-335.)
Because Hwu’s October 18, 2012, letter, which is the basis of the defamation
cause of action, was sent after the lawsuit by his clients had been dismissed, the letter
could not have been in serious contemplation of a lawsuit by his clients. Indeed, there is
nothing in the letter concerning the possibility of litigation or resolution of any claim.
Hwu asserts that his letter was in connection with contemplated litigation because
it followed the October 8, 2012, letter from Deng’s lawyer to others that Deng was
“considering claims she has against [Loh and Liu] for their conduct during the course of
the [dismissed] lawsuit.” Hwu’s letter does not reference the October 8, 2012, letter or
mention any possible or threatened claims by Deng. Those “claims” do not suggest the
serious contemplation of anticipated litigation in good faith and certainly not such
litigation contemplated by Hwu’s clients. Accordingly, Hwu’s letter of October 18,
2012, is not covered by the anti-SLAPP statute.
D. Common Interest
Hwu asserts that the communications are covered by the “common interest”
privilege set forth in Civil Code section 47, subdivision (c). But that privilege is not
specified in the anti-SLAPP statute, which covers matters of “public interest.” (§ 425.16,
subd. (e)(4).) Rather, the privilege is addressed in connection with the second prong of
the anti-SLAPP statute—probability of prevailing. (See Hailstone v. Martinez (2008)
169 Cal.App.4th 728, 739.) As noted, the litigation privilege in Civil Code section 47 is
9
not “coextensive” with the anti-SLAPP statute even though it is “‘an aid in construing the
scope of section 425.16, subdivision [(e)(2)] with respect to the first step of the two-step
anti-SLAPP inquiry . . . .’ [Citations.]” (Neville, supra, 160 Cal.App.4th at p. 1263.)
Moreover, Hwu has not set forth sufficient facts at this stage that the recipients of
the letter had a direct and immediate interest in the communication, such as a pecuniary
or proprietary interest and not just general curiosity. (See Brown v. Kelly Broadcasting
Co. (1989) 48 Cal.3d 711, 727 [“This privilege applied to a narrow range of private
interests. The interest protected was private or pecuniary; the relationship between the
parties was close, e.g., a family, business, or organizational interest; . . . the Legislature
intended to codify the narrow common law privilege of common interest, . . .”]; Kashian
v. Harriman (2002) 98 Cal.App.4th 892, 914; Rancho La Costa, Inc. v. Superior Court
(1980) 106 Cal.App.3d 646, 664-665 [interest is “something other than mere general or
idle curiosity”]; see also Institute of Athletic Motivation v. University of Illinois (1980)
114 Cal.App.3d 1, 11 [common interest privilege may not be “capable of precise or
categorical definition”].) Hwu does not contend that any of the other statements fell
within the public interest provision of the anti-SLAPP statute.
E. Labor Code Section 1054
With respect to the fifth cause of action under the Labor Code section 1054, the
allegations concern the October 18, 2012, letter and allegations that the defendants
attempted to prevent Deng from obtaining employment by various misrepresentations.
As discussed, the letter is not covered by the anti-SLAPP statute. Neither are the alleged
communications to prevent Deng from obtaining employment because these allegations
in Deng’s complaint concerning communications do not mention actual or anticipated
litigation. In her declaration, Deng asserts that it was Loh and Liu who were the ones
that contacted potential new employees—not Hwu.
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F. Intentional Infliction of Emotional Distress
Because the claim for intentional infliction of emotional distress is based solely on
the allegations of the fifth and sixth causes of action, the anti-SLAPP statute does not
cover those causes of action.
G. Conclusion
Accordingly, Hwu has not established that any of the causes of action against him
are covered by the first prong of the anti-SLAPP statute. Thus, the trial court did not err
in not granting Hwu’s motion to strike
DISPOSITION
The order is affirmed. Plaintiff shall recover her costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
MOSK, J.
I concur:
KRIEGLER, J
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I concur in the judgment. I would affirm based on the inadequacy of the
record. (Maria P. v. Riles (1987) 43 Cal.3d 1281, 1295; In re Kathy P. (1979) 25 Cal.3d
91, 102.) There were evidentiary objections interposed and we have no idea how the trial
court ruled nor what concessions were made by the parties.
TURNER, P. J.