Cuevas-Martinez v. Sun Salt Sand, Inc.
Cuevas-Martinez v. Sun Salt Sand, Inc.
Opinion of the Court
SLOUGH Acting P. J.
*1112After 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 *203refer to this code.)
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.
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 *1114suppliers 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 *204trial 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 *1115or 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 *205Nuranis 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 *1116Cuevas-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 ordered. The trial court concluded the Nuranis had failed to present admissible evidence showing their ownership of any specific allegedly stolen property.
C. The Malicious Prosecution Suit and Anti-SLAPP Motion
After successfully defending the lawsuit, Cuevas-Martinez sued respondents for malicious prosecution. Respondents moved to strike the complaint as a SLAPP, arguing their prior lawsuit was protected activity and Cuevas-Martinez could not demonstrate a probability of prevailing on the merits. To demonstrate he could prevail, Cuevas-Martinez submitted a declaration explaining how the trial court had granted summary judgment in his favor on each *206cause of action in the prior suit based on insufficient evidence. In addition, he attached the record of the summary judgment proceedings (the briefing, supporting evidence, and ruling), as well as the Nuranis' discovery responses.
The same judge who decided the summary judgment motion in the prior lawsuit decided the anti-SLAPP motion. The court concluded Cuevas-Martinez failed to present prima facie evidence respondents lacked probable cause when they brought or prosecuted their lawsuit. The court stated, *1117"[Cuevas-Martinez] points to this court's ruling on the summary judgment motion in the underlying case as support for finding that the prior suit was brought without probable cause." Citing Jarrow , the court continued, "[h]owever, defense summary judgment on the underlying claim 'does not establish as a matter of law that the litigant necessarily can "state[ ] and substantiate[ ] ... a subsequent malicious prosecution claim." ' " ( Jarrow, supra , 31 Cal.4th at p. 742,
II
ANALYSIS
A. Standard of Review and Statutory Framework
Under California's anti-SLAPP statute, the court must strike a "cause of action" arising from a defendant's act in furtherance of a constitutionally protected right of free speech unless the plaintiff shows a probability of prevailing on the merits. ( § 425.16, subd. (b)(1).) It is undisputed Cuevas-Martinez's malicious prosecution lawsuit arises from protected activity. The issue on appeal is whether he made a sufficient showing of probable success.
We consider that issue de novo. ( Wilcox v. Superior Court (1994)
*1118To succeed, a malicious prosecution plaintiff must show the defendant (i) initiated an action that was ultimately terminated in the plaintiff's favor and (ii) brought or maintained that action without probable cause and (iii) with malice. ( *207Soukup, supra , 39 Cal.4th at pp. 292, 296,
As an initial matter, we discuss the proper scope of the anti-SLAPP analysis in this case. Cuevas-Martinez's complaint asserts a single cause of action for malicious prosecution. The claim alleges respondents initiated and prosecuted their lawsuit without probable cause and with malice, and that the suit was terminated in Cuevas-Martinez's favor at the summary judgment stage. To support his claim, Cuevas-Martinez describes how respondents lacked evidence to support each of the six causes of action in the prior lawsuit.
The anti-SLAPP statute permits striking only a "cause of action." ( § 425.16, subd. (b)(1).) And for purposes of an anti-SLAPP motion, the "primary rights" theory applies to define "cause of action" and to limit what can be struck. ( South Sutter, LLC v. LJ Sutter Partners, L.P. (2011)
In the context of a malicious prosecution action, " 'When a complaint alleges multiple theories of liability or "counts," the counts "are merely ways of stating the same cause of action differently." [Citation.] Accordingly, the only way that a litigant can show probable cause for the cause of action as a whole-or for the "primary right"-is to show probable cause for each of the counts or theories alleged.' " ( Crowley, supra , 8 Cal.4th at p. 683, fn. 11,
For anti-SLAPP purposes, a plaintiff who " 'can show a probability of prevailing on any part of its claim ' " does not have a meritless claim and a motion to strike is not proper-" 'the entire cause of action stands.' " ( Oasis West Realty, LLC v. Goldman (2011)
*208Here, then, because Cuevas-Martinez asserts a single malicious prosecution cause of action premised on numerous theories, he needed to show only the requisite merit as to any one of those theories. Thus, if he made an adequate showing that (i)respondents lost their prior lawsuit and (ii) they litigated any one of their causes of action without probable cause and with malice, then he should have defeated the anti-SLAPP motion and his complaint-in its entirety -should have its day in court. Because it is undisputed respondents lost the prior lawsuit, we limit our review to determining whether Cuevas-Martinez presented a prima facie case that they litigated any of their causes of action without probable cause and with malice.
B. Lack of Probable Cause
"The question of probable cause is 'whether, as an objective matter, the prior action was legally tenable or not.' " ( Soukup, supra , 39 Cal.4th at p. 292,
*1120Here, the trial court relied on the holding in Jarrow to conclude Cuevas-Martinez had not carried his burden of presenting evidence respondents lacked probable cause when they filed or prosecuted their lawsuit. In Jarrow , the plaintiff relied entirely on the minute order from the prior lawsuit granting his motion for summary judgment to demonstrate a probability of prevailing, pointing out the minute order stated there was " 'no competent evidence' " to support the prior action. ( Jarrow, supra , 31 Cal.4th at p. 743,
Here, in contrast, Cuevas-Martinez did not rely solely on the trial court's summary judgment ruling to demonstrate a probability of success. Instead, he submitted the evidence he and respondents presented *209during the summary judgment proceedings, and he also submitted the Nuranis' discovery responses. In short, he submitted more, and more meaningful, evidence than the plaintiff in Jarrow had. The trial court was required to review that evidence in the light most favorable to Cuevas-Martinez to determine if his claim had minimal merit. ( Soukup, supra , 39 Cal.4th at p. 291,
Conducting an independent review of that evidence, as we must on appeal, we conclude it establishes a prima facie case respondents prosecuted the lawsuit without probable cause. The record reveals there were at least two claims in the underlying lawsuit that the Nuranis and their attorney knew or should have known were untenable. The first is the claim for intentional interference with contractual relationships. As its name implies, the existence of a valid contract is essential to the cause of action. (E.g., Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990)
On appeal, respondents contend Cuevas-Martinez "cannot point to ... a moment" where "probable cause was eliminated" because the nature of their claims "hinged on testimonial declarations setting forth the differing interpretations of contracts and conversations between the parties and witnesses." We disagree. The moment respondents realized Grill-A-Burger had *1121no contracts with its suppliers was precisely the moment it became clear they lacked probable cause for the intentional interference with contractual relationships claim. This moment may have been different for the Nuranis than it was for their attorney, but at the very least, all respondents knew probable cause was lacking during discovery, when they were unable to produce any contracts with Pepsi or West Coast Produce, and when the records custodians for those companies said they had no documents pertaining to termination of services for Grill-A-Burger. Although attorneys may rely on their clients' allegations at the outset of a case, they may not continue to do so if the evidence developed through discovery indicates the allegations are unfounded or unreliable. ( Sycamore Ridge Apartments LLC v. Naumann (2007)
A plaintiff lacks probable cause if he "seeks recovery upon a legal theory which is untenable under the facts known to him." ( Soukup, supra , 39 Cal.4th at p. 292,
The evidence tended to show the Nuranis' misappropriation of trade secrets claim also lacked probable cause. In discovery, they presented no evidence to support their belief the Grill-A-Burger recipe document contained trade secrets. At the summary judgment stage, Cuevas-Martinez submitted the testimony of the previous owners who stated in no uncertain terms that the recipes were not trade secrets.
*210The previous owners also directly refuted the Nuranis' claim that they paid extra for trade secrets when they purchased the restaurant. In their opposition, rather than deny that testimony or present evidence to contradict it, the Nuranis reasserted their (now refuted) belief the recipes were trade secrets. What is more, they doubled down on that refuted belief. Farouk claimed he had signed a "Business Purchase Agreement" that included Grill-A-Burger's "proprietary information." If such a document existed, respondents were required to produce it. That they never did supports an inference Farouk was misrepresenting the document's existence or its contents. Either way, Cuevas-Martinez's evidence supports a finding that respondents knew they had no evidence to support their misappropriation claim.
That Cuevas-Martinez demonstrated a prima facie case respondents lacked probable cause for at least two of the claims in the prior action is more than sufficient to carry his anti-SLAPP burden. We therefore conclude the *1122trial court erred when it ruled Cuevas-Martinez did not establish a probability of prevailing on the probable cause element.
C. Malice
We now move to the malice element, which "goes to the defendant's subjective intent in initiating the prior action." ( Sierra Club Foundation v. Graham (1999)
Here, we can infer malice based on the evidence that respondents pursued their interference with contractual relations claim against Cuevas-Martinez for over 20 months (through discovery and summary judgment), despite knowing the claim was baseless. ( Zamos, supra , 32 Cal.4th at pp. 970-973,
Cuevas-Martinez presented evidence that, if believed by the trier of fact, is sufficient to support a judgment in his favor. As a result, his entire complaint should have survived anti-SLAPP scrutiny.
*1123III
DISPOSITION
We reverse the judgment and the order granting respondents' anti-SLAPP motion and awarding them attorney fees and costs as prevailing parties under section 425.16, subdivision (c). We direct the trial court to enter a new order denying the motion. Cuevas-Martinez shall recover his costs on appeal.
We concur:
FIELDS J.
MENETREZ J.
"SLAPP" is an acronym for "strategic lawsuit against public participation." (Equilon Enterprises v. Consumer Cause, Inc. (2002)
They operate Grill-A-Burger through their company Sun Salt Sand, Inc., a named defendant in the malicious prosecution lawsuit.
In their anti-SLAPP reply brief in the trial court, respondents argued Baral v. Schnitt (2016)
Case-law data current through December 31, 2025. Source: CourtListener bulk data.