Filed 2/8/16 Bright Star Schools v. Hilger 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NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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
BRIGHT STAR SCHOOLS, B263844
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. BC562012)
v.
JEFF HILGER,
Defendant and Appellant.
APPEAL from an order of the Superior Court of the County of Los Angeles,
Ernest Hiroshige, Judge. Reversed.
Winston, Garrou & Mooney, Jerome H. Mooney and John H. Weston for
Defendant and Appellant.
Procopio, Cory, Hargreaves & Savitch, Kendra J. Hall and John C. Lemmo for
Plaintiff and Respondent.
INTRODUCTION
Defendant and appellant Jeff Hilger appeals from a portion of the trial court’s
order denying, in part, his Code of Civil Procedure section 425.161 (anti-SLAPP statute2)
special motion to strike. Defendant contends the trial court erred in denying his anti-
SLAPP motion as to the first and second causes of action because they arise from a
protected activity and plaintiff cannot establish there is a probability it will prevail on
these claims. We reverse the order denying the motion to strike the first and second
causes of action.
FACTUAL BACKGROUND
In 2003, defendant founded and was one of the original members of the Board of
Directors (Board) of Stella Middle Charter Academy, which ultimately became plaintiff.
Defendant served in various management capacities for plaintiff over approximately 10
years.
Plaintiff is a non-profit corporation organized and existing under the laws of the
State of California. Plaintiff operates five public charter schools pursuant to charters
granted by the Los Angeles Unified School District, and has over 2,000 students at grade
levels five through twelve.
Plaintiff’s Second Amended and Restated By Laws (bylaws) provides plaintiff is
managed under the ultimate discretion of the Board, and the Board is empowered to
select plaintiff’s officers. The bylaws define officers and outline how they are selected,
as follows: “Section 1. Officers. The officers of the corporation shall be a Chairman of
1
All further statutory references are to the Code of Civil Procedure unless otherwise
indicated.
2
SLAPP is an acronym for strategic lawsuit against public participation. (Equilon
Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 57, fn. 1.)
2
the Board or a President, or both, a Secretary and a Treasurer. The corporation may also
have, at the discretion of the Board, one or more Vice Presidents, one or more Assistant
Secretaries, one or more Assistant Treasurers, and such other officers as may be elected
or appointed in accordance with the provision of Section 3 of this Article IV. [¶] Section
2. Election. The officers of the corporation, except such officers as may be elected or
appointed in accordance with the provisions of Section 3 or Section 5 of this Article IV,
shall be chosen annually by, and shall serve at the pleasure of, the Board, and shall hold
their respective offices until their resignation, removal, or other disqualification from
service, or until their respective successors shall be elected. [¶] Section 3. Subordinate
Officers. The Board may elect, and may empower the chief executive officer of the
corporation to appoint, such other officers as the business of the corporation may require,
each of whom shall hold office for such period, have such authority and perform such
duties as are provided in these Bylaws or as the Board may from time to time
determine. [¶] . . . [¶] Section 5. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification, or any other cause shall be filled in the manner
prescribed in these Bylaws for regular election or appointment to such office, provided
that such vacancies shall be filled as they occur and not on an annual basis.”3
From mid-2008 through 2012, defendant supervised the “academic aspects” of
plaintiff. On August 13, 2013, after defendant returned from a one-year sabbatical,
plaintiff and defendant entered into a Separation and Release Agreement (separation
agreement). Pursuant to the separation agreement, defendant voluntarily resigned his
employment with plaintiff, and plaintiff agreed to pay to defendant the sum of $80,000.
The separation agreement included a “nondisparagement clause” stating,
“[Plaintiff’s] officers and directors and [defendant] agree that they will not make any
negative, derogatory or disparaging statements, publications or comments, referencing,
relating to, about or regarding each other. It is understood and agreed that this is a
material term of this Agreement and that any breach at all of this term shall constitute a
3
Defendant declared that he was “involved in the creation of” the bylaws.
3
material breach. However, this section will in no way prevent [defendant] from testifying
truthfully pursuant to an enforceable subpoena.”
The separation agreement also included a “Confidentiality of Employer’s
Information” clause (confidentiality clause) stating in part, “Following the Termination
Date,[4] [defendant] shall neither disclose, nor use, any information of [plaintiff] . . .
which plaintiff has treated as confidential, proprietary or trade secret (‘Confidential
Information’) including, but not limited to information technology systems, . . . lists and
other information concerning customers and potential customers, . . . information that
could either cause or potentially cause damage or injury to [plaintiff] . . . or employees
and/or any other information [defendant] reasonably should know is treated as
confidential by [plaintiff] . . . .” That clause provides defendant may only disclose
plaintiff’s confidential information under certain circumstances that are not applicable
here.
PROCEDURAL BACKGROUND
Plaintiff filed a complaint alleging cause of action for breach of written contract
(first cause of action); breach of duty of good faith and fair dealing (second cause of
action); intentional interference with prospective economic advantage (third cause of
action); trade libel (fourth cause of action); unlawful business practice (fifth cause of
action); common law unfair competition (sixth cause of action); and temporary and
permanent injunction (seventh cause of action).5
According to plaintiff’s complaint, defendant made, and worked in concert with
others to make, “negative statements about [plaintiff], [plaintiff’s] employees and the
4
“Termination Date” is not defined in the separation agreement. It defines
“Resignation Date” as August 10, 2013, the date on which defendant “voluntarily
resign[ed] his employment with” plaintiff. Presumably, “Termination Date,” as used in
the separation agreement, was intended to mean “Resignation Date.”
5
This appeal concerns only the first and second causes of action.
4
quality of education offered by [plaintiff].” Plaintiff alleged in its first cause of action
that defendant breached the separation agreement because defendant violated the
nondisparagement and confidentiality clauses contained therein. The first cause of action
states defendant breached the nondisparagement clause by “making negative, derogatory
and/or disparaging statements and comments about [plaintiff] and its staff,” including
statements made about plaintiff on social media sites; and breached the confidentiality
clause by “using and disclosing confidential, proprietary or privileged information . . . .”
Plaintiff alleged in its second cause of action that defendant breached the implied
covenant of good faith and fair dealing contained in the separation agreement.
On December 1, 2014, pursuant to plaintiff’s application, the trial court issued a
limited preliminary injunction, which injunction provided in part as follows: “Pending
trial in this action, Defendant . . . and his agents [are] restrained and enjoined
from . . . [¶] [m]aking negative or disparaging statements or comments about
[plaintiff’s] officers and directors. The terms officers and directors are defined by
[plaintiff’s] Articles of Incorporation and Bylaws.” [¶] . . . [¶] [Defendant] will not be
restrained from . . . [¶] [m]aking negative comments about [plaintiff], its teachers, or
other non-officer/director employees . . . .”
Defendant filed an anti-SLAPP motion challenging, inter alia, the first and second
causes of action, contending these causes of action arise from a protected activity—“any
written or oral statement or writing made in a . . . public forum in connection with an
issue of public interest . . . ” (§ 425.16, subd. (e)(3))—and plaintiff cannot establish there
is a probability it will prevail on these claims. Plaintiff opposed the anti-SLAPP motion.
Plaintiff supported the opposition with, among other things, a declaration from the
principal of one of plaintiff’s schools stating defendant and those associated with him
made “false and negative statements about me and the quality of the education provided
by [plaintiff]. [Defendant] has repeatedly accused me of having a sexual relationship
with a former [plaintiff] student and giving him alcohol.” Other declarations stated:
defendant’s “close associate” said plaintiff’s dean of student conduct handed illegal drugs
to a student; defendant and his “agents” distributed flyers to plaintiff’s students
5
indicating, inter alia, plaintiff was unnecessarily charging students for bus transportation;
defendant and his associates handed flyers to plaintiff’s students and parents stating, inter
alia, “We want a leadership change (Goodbye to [among others, plaintiff’s chief
executive officer (CEO), and a principal for one of plaintiff’s schools] who all make over
$100,000 a year). We want to see all the same teachers, students, and (mostly) programs,
just run by people who actually care.”
Plaintiff submitted a declaration from Ari Engelberg, plaintiff’s CEO, stating
defendant e-mailed a seven-page letter to 200 of plaintiff’s staff at their work e-mail
addresses. The letter stated, in part, plaintiff’s Board and plaintiff’s CEO, as plaintiff’s
original president, “watched from the sidelines” when defendant had “a lot of control
over the decisions and directions of [plaintiff’s] schools”; plaintiff’s CEO (who was also
plaintiff’s original president) “seemed like a good and smart guy” but soon filled
plaintiff’s Board with his personal friends; when Engelberg became CEO “‘which people
got to make which decisions’ was completely unclear and chaotic”; “whatever . . . is
being spent on ‘back-office’ is hurting the actual schools and programs by taking money
away and diverting it elsewhere”; and the parents want plaintiff’s CEO, and a principal
for one of plaintiff’s schools, among others, to “step down” and “[t]his is nothing
personal[—]it’s about too many bad decisions being made and too much covering up of
problems.”
The Engelberg declaration also stated, “I worked with [defendant] to negotiate the
separation agreement. We went through several drafts of the agreement. Each draft
contained a provision stating that [defendant] could not disparage [plaintiff]. On the last
iteration of the agreement, [defendant] asked that we make the nondisparagement
provision mutual so that [plaintiff] could not disparage him either. Since [plaintiff]
cannot control what its many other lower level employees might say (including teachers,
janitors, office staff), I agreed that [plaintiff’s] officers and directors would not disparage
[defendant]. I revised the nondisparagement paragraph to reflect that agreement.
However, the provision was inadvertently changed to read that [defendant] and
[plaintiff’s] officers and directors would not disparage each other. Our agreement was
6
that [defendant] would not disparage [plaintiff] and [plaintiff’s] officers and directors
would not disparage [defendant].” Plaintiff also submitted declarations from several
parents stating parents of students attending plaintiff’s schools contacted them by
telephone asking them to join a group “led by” defendant concerning plaintiff’s schools.
The trial court denied the anti-SLAPP motion as to the first and second causes of
action,6 stating defendant met his burden to show the causes of action arose from a
protected activity, but plaintiff established there is a probability it will prevail on the
claims. As to defendant’s causes of action arising from a protected activity, the trial
court ruled, “[A]t least some of the statements fall within” section 425.16, subsection
(e)(3) because websites accessible to the public are public forums for purposes of the
anti-SLAPP statute; and the statements concern “the quality of education, safety of
students, and administration of a charter school,” which statements “are issues of public
interest.”
Regarding the probability plaintiff will prevail on the claims, the trial court said
there is evidence defendant made disparaging statements concerning a principal for one
of plaintiff’s schools and plaintiff’s dean of student conduct. The trial court continued,
“Although the separation agreement does not define the term ‘officers,’ that term can be
reasonably interpreted to include a school principal and a dean for all of plaintiff’s
schools.”7 The trial court also said there is evidence defendant made disparaging
statements concerning Engelberg, and “it is undisputed that Engelberg is the CEO of
Plaintiff.” The trial court further ruled plaintiff “points to evidence that Defendant may
have breached paragraphs 8 and 12 of the separation agreement by sending an email from
his [school] e-mail account and accessing confidential contact information.”
6
The trial court granted the anti-SLAPP motion as to the fourth cause of action, and
also denied it as to the third, and fifth through seventh causes of action.
7
The trial court stated the “nondisparagement” clause “does not expressly prohibit
negative comments against Plaintiff, so long as such comments are not disparaging of
officer and directors.”
7
DISCUSSION
A. Adequate Record
Defendant failed to provide a reporter’s transcript or a suitable substitute of the
hearing on his anti-SLAPP motion. We asked the parties to brief whether defendant’s
failure to do so warrants affirmance based on the inadequacy of the record.
Defendant contends, and plaintiff agrees, that a reporter’s transcript of the hearing
is not required because, as noted below, the issue in this appeal—the trial court’s denial
of a portion of defendant’s anti-SLAPP motion—is reviewed de novo. (Chodos v. Cole
(2012) 210 Cal.App.4th 692, 700.) We agree.
B. Anti-SLAPP Motion
1. Standard of Review
We review de novo the trial court’s order denying an anti-SLAPP motion.
(Flatley v. Mauro (2006) 39 Cal.4th 299, 325-326; Christian Research Institute v. Alnor
(2007) 148 Cal.App.4th 71, 79.) “‘We consider “the pleadings, and supporting and
opposing affidavits . . . upon which the liability or defense is based.” (§ 425.16, subd.
(b)(2).) However we neither “weigh credibility [nor] compare the weight of the
evidence. Rather, [we] accept as true the evidence favorable to the plaintiff [citation] and
evaluate the defendant’s evidence only to determine if it has defeated that submitted by
the plaintiff as a matter of law.” [Citation.]’ [Citation.]” (Flatley v. Mauro, supra, 39
Cal.4th at p. 326.)
2. Applicable Law
“‘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
8
remedy to dispose of lawsuits that are brought to chill the valid exercise of constitutional
rights. [Citation.]’ [Citation.]” (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, subdivision (b)(1) provides, “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 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.’ [Citation.]” (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.” (Navellier
v. Sletten (2002) 29 Cal.4th 82, 89; Governor Gray Davis Com. v. American Taxpayers
Alliance (2002) 102 Cal.App.4th 449, 456.)
3. Analysis
a) Protected Activity
Defendant contends the challenged causes of action arise from a protected activity
pursuant to section 425.16, subd. (e)(3)—“any written or oral statement or writing made
9
in a . . . public forum in connection with an issue of public interest . . . .” (§ 425.16, subd.
(e)(1).) We agree.
i) Public Forum
“Under established authority, when a cause of action is based on both protected
and unprotected activity, it is subject to the anti-SLAPP statute, unless the protected
activity is merely incidental to the unprotected conduct. [Citations.]” (Kenne v. Stennis
(2014) 230 Cal.App.4th 953, 967, italics added.) In Haight Ashbury Free Clinics, Inc. v.
Happening House Ventures (2010) 184 Cal.App.4th 1539, the court held that a cause of
action alleging breach of fiduciary duty satisfied the first prong of the anti-SLAPP
statute, even though only two of 16 factual bases of the cause of action targeted protected
activity. The other 14 factual bases targeted nonprotected activity. (Id. at pp. 1544-1545,
1548-1553.) The court explained that the two factual bases targeting protected activity
“could each be the sole and adequate basis for liability under the cause of action,” and for
this reason were not “merely incidental” to the numerous additional allegations targeting
nonprotected activity. (Id. at p. 1551.) “[A] plaintiff cannot frustrate the purposes of the
[anti-]SLAPP statute through a pleading tactic of combining allegations of protected and
nonprotected activity under the label of one ‘cause of action.’” (Fox Searchlight
Pictures, Inc. v. Paladino (2001) 89 Cal.App.4th 294, 308.)
For purposes of the anti-SLAPP legislation, “‘[a] “public forum” is . . . defined as
a place that is open to the public where information is freely exchanged.’ [Citation.]”
(Cabrera v. Alam (2011) 197 Cal.App.4th 1077, 1087.) “The [anti-SLAPP] statute does
not limit its application to certain types of petition activity. The Legislature recognized
that ‘all kinds of claims could achieve the objective of a SLAPP suit—to interfere with
and burden the defendant’s exercise of his or her rights.’” (Beilenson v. Superior Court
(1996) 44 Cal.App.4th 944, 949, quoting Church of Scientology v. Wollersheim (1996) 42
Cal.App.4th 628, 652, overruled on other grounds in Equilon Enterprises v. Consumer
Cause, Inc., supra, 29 Cal.4th at p. 68, fn. 5.)
10
Arguably, there was a factual basis underlying the first and second causes of
action that pertained to statements not made in a public forum, i.e., statements made in an
email. However, other grounds, i.e., statements made in flyers and on social media
websites, are indicative of public speech.
First, plaintiff alleged flyers were offered to those who appeared to be either (a)
students at the school; or (b) parents of those students. The record demonstrates these
flyers were handed out “on or near the school.” However, there is nothing in the record
to suggest the recipients of the flyers were verified students and their parents. Rather, the
record suggests anyone who appeared to be students or parents were offered flyers.
Handing out flyers to passersby who appear to be students of a nearby school, or parents
of those students, constitutes speech in a public place where information is freely
exchanged. (See e.g., Macias v. Hartwell (1997) 55 Cal.App.4th 669, 674 [mailing of
campaign flyers recognized as public forum].)
Second, the first and second causes of action alleged, respectively, defendant made
disparaging statements on “social media” and “Facebook,” and “encouraged others . . . to
repeat these false statements.” At oral argument, plaintiff’s counsel identified the
Facebook information as “posts,” subjected to being “liked” by visitors to the webpage.
It is clear the social media information did not constitute private messaging. These
statements were thus made in a public forum. (See ComputerXpress, Inc. v. Jackson
(2001) 93 Cal.App.4th 993, 1001-1002; Barrett v. Rosenthal (2006) 40 Cal.4th 33, 41, fn.
4 [statements made on websites readily accessible to the public are deemed statements
made in a public forum]; Ampex Corp. v. Cargle (2005) 128 Cal.App.4th 1569, 1576.)
ii) Public Interest
The term “issue of public interest” under section 425.16, subdivision (e), is
interpreted broadly. (Rivera v. First DataBank, Inc. (2010) 187 Cal.App.4th 709, 716.)
There is no requirement that the issue be “significant.” (Nygard, Inc. v. Uusi-Kerttula
(2008) 159 Cal.App.4th 1027, 1042.) ‘“‘[A]n issue of public interest” within the
meaning of section 425.16, subdivision (e)(3) [and by virtue of identical language,
11
subdivision (e)(4),] is any issue in which the public is interested.’ [Citation.]” (Rivera v.
First DataBank, Inc., supra, 187 Cal.App.4th at p. 716.) In determining whether a matter
is of public interest within the meaning of section 425.16, “[w]e look for ‘the principal
thrust or gravamen of the plaintiff’s cause of action.’ . . . The ‘critical consideration’ is
what the cause of action is ‘based on.’” (Hecimovich v. Encinal School Parent Teacher
Organization (2012) 203 Cal.App.4th 450, 465.)
Here, the principal thrust of the first and second causes of action centers on
statements defendant made relating to the quality of the education provided by plaintiff,
the safety of plaintiff’s students, and the proper administration of school policy. For
example, plaintiff contends defendant stated, among other things, one of the school
principals had engaged in inappropriate sexual behavior with a former student; a teacher
with a record of drunk driving was allowed to drive the students without notice to the
parents; drugs confiscated from a student were not properly handled or reported;
plaintiff’s school unnecessarily charged students for bus transportation; and the academic
quality of the schools was deteriorating.
As noted by the trial court, the statements made by defendant concern “the quality
of education, safety of students, and administration of a publicly funded charter school,”
which statements “are issues of public interest.” (Plyler v. Doe (1982) 457 U.S. 202,
221-222 [“education has a fundamental role in maintaining the fabric of our society”];
Brown v. Bd. of Educ. (1954) 347 U.S. 483, 493 [“education is perhaps the most
important function of state and local governments”]; Hecimovich v. Encinal School
Parent Teacher Organization, supra, 203 Cal.App.4th at p. 468 [safety in youth sports
and “problem coaches/problem parents” in youth sports are issues of public interest];
Morrow v. Los Angeles Unified School Dist. (2007) 149 Cal.App.4th 1424, 1436-1439
[school superintendent’s critical statements about a school principal on whose campus
incidents of racially motivated student violence had occurred were statements about “an
issue of public interest”]; McGarry v. University of San Diego (2007) 154 Cal.App.4th
97, 109-110 [statements by university officials explaining why the head football coach
was terminated were statements about “an issue of public interest”]; Ghafur v. Bernstein
12
(2005) 131 Cal.App.4th 1230, 1238 [“‘Clearly, the governance of a public school system
is of the utmost importance to a community, and school board policies are often carefully
scrutinized by residents’”].)
b) Probability of Prevailing on Merits
In the context of defendant’s anti-SLAPP motion, plaintiff has not demonstrated a
probability of prevailing on the merits. To do so “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 a 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 weigh 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, fn. 5; 1-800 Contacts, Inc. v. Steinberg (2003) 107 Cal.App.4th 568, 585.)
There is no evidence defendant disparaged any of plaintiff’s officers or directors.
Plaintiff is a non-profit corporation. Defendant was one of the founders of plaintiff and
he assisted in creating the bylaws. The terms “officers” and “directors” are proscribed in
the Corporations Code (Corp. Code, §§ 301 [election of directors], 312 [identifying
officers required for a corporation include “chairperson of the board,” “secretary,” and
“chief financial officer”], and plaintiff’s bylaws define officers and outline how they are
selected. Plaintiff has failed to produce any evidence that anyone it contends was
disparaged by defendant in violation of the nondisparagement clause were officers and
directors at the time of the alleged disparagement.
Plaintiff contends because the separation agreement does not define “officers” or
“directors,” those terms can be reasonably interpreted under their dictionary definitions to
include, for purposes of the challenged cause of actions, plaintiff’s school principal, the
dean for all of plaintiff’s schools, and plaintiff’s CEO. We disagree.
13
Although the first cause of action alleged defendant made disparaging statements
about “[plaintiff] and its staff,” the second cause of action merely alleged defendant made
disparaging statements about plaintiff only. The second cause of action does not allege
defendant made disparaging statements about plaintiff’s staff, including the school
principal, the dean for all of its schools, and the CEO. Because plaintiff did not seek, nor
did the trial court authorize plaintiff, to amend the second cause of action to allege
defendant made disparaging statements about plaintiff’s staff (Nguyen-Lam v. Cao (2009)
171 Cal.App.4th 858, 873, we need not consider whether plaintiff’s school principal, the
dean for all of plaintiff’s schools, and plaintiff’s CEO are officers or directors for
purposes of the second cause of action.
Moreover, plaintiff’s bylaws do not include as an officer or director plaintiff’s
school principal, its dean, or plaintiff’s CEO.8 The separation agreement does not
prevent defendant from making negative statements about plaintiff, its teachers, or other
non-officer/director employees.
We also reject plaintiff’s contention that a disparaging statement about plaintiff is
a statement regarding all of its officers and directors. Under plaintiff’s interpretation, it
8
Engelberg declared he was the CEO. However, this was insufficient to establish
he was an “officer” covered by the nondisparagement clause of the separation agreement.
The officers of a corporation are identified in the Corporations Code as (1) a board
chairperson; (2) a secretary; (3) a chief financial officer; and (4) any other officer “stated
in the bylaws or determined by the board . . . .” (Corp. Code, § 312, subd. (a).) “The
president, or if there is no president[,] the chairperson of the board, . . . is the chief
executive officer.” (Ibid.) Thus, under the Corporations Code, the CEO is an officer if
(a) he or she is acting as CEO by virtue of the fact that he or she is also the president or
board chairperson, or (b) the bylaws or the board determines the CEO to be an officer.
Engelberg’s declaration indicated he was the CEO after he finished his stint as
board chairman; and, he did not declare he was president at the time defendant’s
statements were made. Thus, the only way he could have been an officer for purposes of
this litigation was if the bylaws listed the CEO as an officer or there was board action that
created the CEO position and determined the CEO was an officer within the meaning of
the bylaws. As we have stated, the bylaws omitted any reference to the CEO as an
officer of the corporation. In addition, we have no record of any action by the board
regarding the creation of a CEO or the inclusion of a CEO as an officer. Plaintiff did not
satisfy its burden of demonstrating Engelberg was an officer.
14
appears virtually any statement about plaintiff would constitute a statement regarding all
of its officers and directors. In addition, plaintiff concedes the nondisparagement clause
“was inadvertently changed” so as not to memorialize the actual agreement that
“[defendant] would not disparage [plaintiff] and [plaintiff’s] officers and directors would
not disparage [defendant].” As the trial court stated, there is no evidence plaintiff
reformed the separation agreement, and plaintiff “fail[ed] to show that the agreement can
be interpreted to prohibit comments solely about Plaintiff.”
Plaintiff also argues defendant breached the separation agreement because in
violation of the confidentiality clause, defendant improperly used and disclosed
plaintiff’s confidential information. That clause prohibits defendant from disclosing or
using plaintiff’s information “which plaintiff has treated as confidential, propriety or
trade secret . . . .” Plaintiff does not cite to any evidence in the record that immediately
before defendant allegedly used or disclosed the information it contends was in violation
of the separation agreement, plaintiff treated that information as confidential. Therefore,
plaintiff’s argument is forfeited. (Magic Kitchen LLC v. Good Things Internat., Ltd.
(2007) 153 Cal.App.4th 1144, 1161-1162; Moulton Niguel Water Dist. v. Colombo
(2003) 111 Cal.App.4th 1210, 1215 [“Contentions are waived when a party fails to
support them with reasoned argument and citations to authority”]; Badie v. Bank of
America (1998) 67 Cal.App.4th 779, 784-785 [“When an appellant . . . . fails to support
[a point] with reasoned argument and citations to authority, we treat the point as
waived”].)
15
DISPOSITION
The order denying the motion to strike plaintiff’s first two causes of action is
reversed. Defendant is awarded his costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
KUMAR, J.
We concur:
KRIEGLER, Acting P. J.
BAKER, J.
Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.
16