Cuevas-Martinez v. Sun Salt Sand, Inc.

• Decision Date: 06 June 2019
• Docket Number: E070843
• Citation: 35 Cal.App.5th 1109,248 Cal.Rptr.3d 200
• Parties: Antonio CUEVAS-MARTINEZ, Plaintiff and Appellant, v. SUN SALT SAND, INC. et al., Defendants and Respondents.
• Court: California Court of Appeals Court of Appeals

35 Cal.App.5th 1109

248 Cal.Rptr.3d 200

Antonio CUEVAS-MARTINEZ, Plaintiff and Appellant,

v.SUN SALT SAND, INC. et al., Defendants and Respondents.

E070843

Court of Appeal, Fourth District, Division 2, California.

Filed June 6, 2019

Law Offices of David W. Osborne and David W. Osborne for Plaintiff and Appellant.

Law Offices of Kalab A. Honey, Kalab A. Honey, Newport Beach, and Michael B. Petersen for Defendants and Appellants.

OPINION

SLOUGH Acting P. J.

After successfully obtaining summary judgment on a lawsuit brought by his former employer, Antonio Cuevas-Martinez sued the employer and their attorney (collectively, respondents) for malicious prosecution. Respondents filed an anti-SLAPP motion to strike the complaint. ( Code Civ. Proc., § 425.16, unlabeled statutory citations refer to this code.)¹ The trial court granted the motion, concluding Cuevas-Martinez failed to present prima facie evidence respondents filed the lawsuit without probable cause.

The court based its ruling on Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 3 Cal.Rptr.3d 636, 74 P.3d 737 ( Jarrow ), which held the entry of summary judgment on a prior lawsuit for insufficient evidence does not, by itself, establish a probability of prevailing on the merits of a subsequent malicious prosecution claim. ( Id. at p. 742, 3 Cal.Rptr.3d 636, 74 P.3d 737.)

On appeal, Cuevas-Martinez argues Jarrow is inapplicable because he did not rely on the mere fact of summary judgment victory, but instead submitted evidence that, if credited by a trier of fact, would support a verdict in his favor. We agree Cuevas-Martinez has demonstrated his claim has the requisite minimal merit to survive anti-SLAPP scrutiny, and will therefore reverse.

I

FACTS

A. The Underlying Complaint

Farouk Nurani and his wife Salima Nurani own and operate a restaurant in Palm Desert called Grill-A-Burger.² Cuevas-Martinez worked as their head cook until they fired him in April 2015. Afterward, he opened his own burger restaurant in Cathedral City called Tony's Burgers. The Nuranis sued him, seeking over $ 200,000 in damages and asserting six causes of action—misappropriation of trade secrets, interference with prospective economic advantage, interference with contractual relationships, conversion, unfair business practices, and injunctive relief.

The Nuranis made the following allegations in their complaint. They claimed they had a good working relationship with Cuevas-Martinez until he began showing up late and missing shifts, at which point they felt forced to fire him. They learned after his termination that he had been working, over the previous few months, toward opening his own restaurant. They also learned he had solicited some of their employees to work for him. They said he solicited their customers too, telling them his new restaurant would have the same food at better prices, and that Grill-A-Burger would fail without him. They said he was using their exact recipes and had given his menu items "confusingly similar names." The Nuranis alleged they had "paid a significant sum of money" to Grill-A-Burger's previous owners "for the ability to use [those recipes and names] exclusively."

The Nuranis also alleged Cuevas-Martinez ruined their relationships with their suppliers. They said that immediately after Tony's Burgers opened, their suppliers informed them they would "no longer supply [Grill-A-Burger], despite repeated years of service." They alleged this was the result of Cuevas-Martinez making "certain ill-willed and disparaging comments" about them or their restaurant. Finally, they alleged Cuevas-Martinez stole at least $ 30,000 of equipment and supplies from their inventory to stock his restaurant.

B. Summary Judgment

Cuevas-Martinez moved for summary judgment on each cause of action, and the trial court granted his motion in its entirety.

1. Misappropriation of trade secrets

The Nuranis based their misappropriation claim on the theory that their recipes were trade secrets. Cuevas-Martinez submitted the declaration of his attorney, who said the Nuranis had produced the alleged trade secret document—a collection of recipes—only after being compelled to do so by court order. He pointed out the Nuranis had not requested any privacy protection for the document before producing it. In his own declaration, Cuevas-Martinez said he had been an at-will employee and had no employment agreement or covenant not to compete with the Nuranis. He denied using their recipes and said his menu items and recipes were different than Grill-A-Burger's. He said the first time he saw the alleged trade secret document was after the Nuranis produced it in discovery.

Cuevas-Martinez also submitted the declaration of the previous owners of Grill-A-Burger, who denied transferring any proprietary information to the Nuranis during the sale and said the alleged secret recipe document was no secret. They said when the Nuranis had asked them for their recipes, they put together a document containing the same information as Grill-A-Burger's public menu. They attached the recipe document and the Grill-A-Burger menu to their declaration.

In opposition, the Nuranis submitted Farouk's declaration. He said when he bought Grill-A-Burger, he signed a "Business Purchase Agreement," which included the restaurant's "proprietary information." He said he believed the previous owners had hired a chef to create proprietary recipes. He said he and his wife were the only people who had access to the document containing those recipes.

The trial court concluded that the Nuranis had failed to dispute the testimony of the previous owners, who said that the purchase agreement did not include any proprietary recipes and that there were no proprietary recipes or trade secrets at Grill-A-Burger. The court concluded the evidence established the recipe document was simply a recitation of Grill-A-Burger's menu, which was available to the public. As a result, the court concluded there was "nothing unique or confidential about [Grill-A-Burger's] ingredients or preparation techniques that could constitute a trade secret."

2. Intentional interference with contractual relationships

The Nuranis initially based their intentional interference with contractual relationships claim on the theory Cuevas-Martinez wrongfully interfered with their contracts with their employees, but they later amended their complaint to add the theory that he also interfered with their contracts with their suppliers. In discovery, they identified Pepsi and West Central Produce as the suppliers who would no longer sell to them based on Cuevas-Martinez's alleged disparaging conduct.

In his declaration, Cuevas-Martinez said he did not make any disparaging comments about Grill-A-Burger or the Nuranis to Pepsi or West Central Produce. His attorney said the record custodians at those companies told him they did not have any contracts with Grill-A-Burger, and the Nuranis had simply stopped ordering supplies from them. Both custodians signed affidavits stating their companies had no documents or records pertaining to any termination of services for Grill-A-Burger.

In their response to Cuevas-Martinez's separate statement of undisputed facts, the Nuranis admitted they did not have contracts with their suppliers. In his declaration, Farouk said, "[d]iscussions with certain [Grill-A-Burger] vendors regarding the things said by [Cuevas-Martinez] to those vendors prior to [his] termination led to a deterioration in [our] relationship with those vendors, and ultimately caused [us] to look elsewhere for services and products provided by those vendors." (Italics added.)

The trial court concluded that Cuevas-Martinez had produced evidence the Nuranis did not have contracts with their suppliers and that the Nuranis failed to create a triable issue of fact on that element of the claim.

3. Other claims

The Nuranis based their claim of intentional interference with prospective economic advantage on three theories—that Cuevas-Martinez wrongfully interfered with their business relationship with their (i) customers, (ii) suppliers, and (iii) employees. In his declaration, Cuevas-Martinez denied making any disparaging comments about Grill-A-Burger to its customers or employees. Farouk declared in opposition that "multiple customers" told him Cuevas-Martinez had told them he was going to open his own similar restaurant and Grill-A-Burger would go out of business as a result. Farouk also said that shortly after he fired Cuevas-Martinez, "multiple" Grill-A-Burger employees quit and he later learned they were working for Cuevas-Martinez. In the separate statement of undisputed facts, the Nuranis claimed they had until trial to "determine the specific identity" of the customers to whom Cuevas-Martinez made his allegedly disparaging statements. Cuevas-Martinez objected to that response as evasive and a misuse of discovery. The trial court concluded that the Nuranis had failed to provide admissible evidence to dispute Cuevas-Martinez's testimony he did not wrongfully interfere with Grill-A-Burger's relationship with its employees or customers. The court sustained Cuevas-Martinez's objection that the Nuranis were being evasive by saying they had until trial to identify the customers.

With regard to the conversion claim, Cuevas-Martinez denied stealing any of Grill-A-Burger's personal property to use at his restaurant. He also argued the Nuranis had not specifically identified the $ 30,000 in property he had allegedly taken. In their discovery responses, the Nuranis identified the allegedly stolen property as "napkins, beer, paper products, utensils, glasses, dry goods, canned goods and a blender for making shakes." In his declaration, Farouk said he had "order summaries" and "month-to-month revenue reports" (which respondents never produced) showing that in the months leading up to his termination, Cuevas-Martinez had been ordering ingredients and supplies "well in excess" of what was needed and historically...