Case Name: Bayhealth, Inc. v. Tiffany Hall, et al.
Case No.: 17CV308342

This case arises from a dispute between Plaintiff/Cross-Defendant Bayhealth, Inc. (“Bayhealth”), a home health services company, and Defendant/Cross-Complainant Tiffany Hall (“Hall”), the former manager of Bayhealth’s In-Home Nursing division. In the underlying action Bayhealth alleges that when it elected not to renew the employment agreement with Hall in October 2016, she refused to return Bayhealth’s intellectual property and confidential information, and used it to start her own business (Defendant Hallway Healthcare, Inc.) and interfere with Bayhealth’s established business relationships.

Hall filed a cross-action and her operative Second Amended Cross-Complaint (“SACC”) filed January 24, 2018 states claims against Bayhealth, Mercy Wey, Bayhealth’s President, and Bill Hwang, its Chief Financial Officer (collectively “Cross-Defendants”) for: 1) Breach of Written Contract (the Employment Agreement signed by the parties on Feb. 1, 2015, a copy of which is attached as exhibit A to the SACC; Hall alleges that because the parties were not able to agree on a buyout or division of patients, the Agreement required that the In-House Nursing Division be sold and the proceeds divided between Bayhealth and Hall-see SACC at ¶¶15-17); 2) Breach of the Implied Covenant of Good Faith and Fair Dealing (essentially alleging the same breach of contract, see SACC at ¶23); 3) Intentional Misrepresentation (alleging that Bayhealth made six promises to persuade her to sign the Agreement, see SACC at ¶29a-f); 4) Intentional Interference w/Prospective Economic Advantage (alleging that by not dividing patients with her when the Agreement ended, Bayhealth “interfered” with Hall’s relationship with those patients, see SACC at ¶¶34-39); 5) Violation of Bus. & Prof. Code §17200, et seq., (“unfair competition,” based on the first four cross-claims) and; 6) Slander (against Wey, alleging that on behalf of Bayhealth she made false statements to third parties about Hall, particularly that she “stole” IP and patients, see SACC at ¶¶53-56).

Currently before the Court is Cross-Defendants’ motion for summary judgment/adjudication directed at the SACC.

The pleadings limit the issues presented for summary judgment/adjudication and such a motion may not be granted or denied based on issues not raised by the pleadings. (See Government Employees Ins. Co. v. Sup. Ct. (2000) 79 Cal.App.4th 95, 98; Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1258; Nieto v. Blue Shield of Calif. Life & Health Ins. (2010) 181 Cal.App.4th 60, 73 [“the pleadings determine the scope of relevant issues on a summary judgment motion.”].) The moving party bears the initial burden of production to make a prima facie showing that there are no triable issues of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty. (See CCP §437c(f)(1); McClasky v. California State Auto. Ass’n (2010) 189 Cal.App.4th 947, 975 [“If a cause of action is not shown to be barred in its entirety, no order for summary judgment—or adjudication—can be entered.”]; Palm Spring Villas II Homeowners Association, Inc. v. Parth (2016) 248 Cal.App.4th 268, 288.) Summary adjudication of general “issues” or of facts is not permitted. (See Raghavan v. The Boeing Company (2005) 133 Cal.App.4th 1120, 1136.)

The moving party’s declarations and evidence will be strictly construed in determining whether they negate or disprove an essential element of a plaintiff’s claim “in order to resolve any evidentiary doubts or ambiguities in plaintiff’s (or opposing party’s) favor.” (Johnson v. American Standard, Inc. (2008) 43 Cal.4th 56, 64, parentheses added.) While the same standards of admissibility govern both, the opposition declarations are liberally construed while the moving party’s evidence is strictly scrutinized. (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768.) The evidence must be liberally construed in support of the opposing party, resolving any doubts in favor of that party. (Yanowitz v. L’Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1037; Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.) The moving party may generally not rely on additional evidence filed with its reply papers. (See Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537-38 [“The general rule of motion practice . . . is that new evidence is not permitted with reply papers. This principle is most prominent in the context of summary judgment motions . . .”]; see also Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 252.) Accordingly the Court has not considered the new evidence attached to the declaration of Heidi Kim submitted with the reply brief.

On summary judgment/adjudication, the Court may not weigh the evidence. (Reid v. Google, Inc. (2010) 50 Cal.4th 512, 540.) The Court cannot resolve issues of credibility and each declaration submitted is normally accepted as true in determining if there are triable issue of material fact. “Typically in summary judgment litigation, equally conflicting evidence requires a trial to resolve the dispute.” (Kids’ Universe v. In2Labs (2002) 95 Cal.App.4th 870, 881.)

“Summary judgment is properly granted when no triable issue of material fact exists and the moving party is entitled to judgment as a matter of law. A defendant [or cross-defendant] moving for summary judgment bears the initial burden of showing that a cause of action has no merit by showing that one or more of its elements cannot be established or that there is a complete defense. Once the defendant has met that burden, the burden shifts to the plaintiff ‘to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto.’ ‘There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.’” (Madden v. Summit View, Inc. (2008) 165 Cal.App.4th 1267, 1272 [brackets added, internal citations omitted].)

As an initial matter Cross-Defendants’ motion is one for summary judgment only, as they have not complied with Cal. Rule of Court 3.1350(b), stating in pertinent part, “If summary adjudication is sought, whether separately or as an alternative to the motion for summary judgment, the specific cause of action, affirmative defense, claims for damages, or issues of duty must be stated specifically in the notice of motion and be repeated, verbatim, in the separate statement of undisputed material facts.” Defendants’ Separate Statement does not repeat any of the bases for summary adjudication of the various cross-claims stated in the Notice of Motion “verbatim,” or at all. (Compare Notice of Motion at p. 2:11-25 with Cross-Defendants’ Separate Statement.) Therefore the motion is one for summary judgment only on the basis that the SACC “has no merit, there is no triable issue as to any material fact in connection with the SACC, and that Bayhealth is entitled to judgment as a matter of law.” (Notice of Motion at p.2:8-10.) If there is a triable issue of material fact as to any of the cross-claims summary judgment must be denied.

Cross-Defendants’ motion for summary judgment is DENIED as they have not demonstrated that no triable issues of material fact remain as to any of the cross-claims.

At a minimum triable issues remain as to the sixth cross-claim for Slander. Defamation is effected by libel or slander. (Civ. Code, § 44.) Slander is a false and unprivileged publication, orally uttered, which: (1) charges any person with crime, or with having been indicted, convicted, or punished for crime; (2) imputes in any person the present existence of an infectious, contagious, or loathsome disease; (3) “[t]ends directly to injure him in respect to his office, profession, trade or business, either by imputing to him general disqualification in those respects which the office or other occupation peculiarly requires, or by imputing something with reference to his office, profession, trade, or business that has a natural tendency to lessen its profits;” (4) imputes impotence or a want of chastity; or (5) “[w]hich, by natural consequence, causes actual damage.” (Civ. Code, § 46.) “A slander that falls within the first four subdivisions of Civil Code section 46 is slander per se and require no proof of actual damages. [Citation.] “A slander that does not fit into those four subdivisions is slander per quod, and special damages are required for there to be any recovery for that slander. [Citation.]” (Regalia v. Nethercutt Collection (2009) 172 Cal.App.4th 361, 367; Burrill v. Nair (2013) 217 Cal.App.4th 357, 382 [“[C]ertain slanderous statements are considered slanderous per se, and actionable without proof of special damage. However, the slander statute expressly limits slander per se to four categories of defamatory statements.”].)

Whether a statement upon its face clearly conveys a meaning tending directly to injure a person defamed in respect to his occupation, so as to be a slander per se, is a question for the Court. (Regalia v. The Nethercutt Collection (2009) 172 Cal.App.4th 361, 368.) “In connection with subdivision (3) of Civil Code section 46, ‘to be actionable per se, a defamatory statement must tend ‘directly’ to injure the person defamed in respect to his office, profession, trade or business….’ . . . With respect to slander per se, the trial court decides if the alleged statement falls within Civil Code section 46, subdivisions (1) through (4). It is then for the trier of fact to determine if the statement is defamatory.” (Id., internal citations omitted.)

Contrary to Cross-Defendants’ arguments, statements allegedly made by Mercy Wey to third persons (allegedly including statements to the Administrator of Accentcare, whom Hall/Hallway Healthcare could have gotten business from) that Hall had “stolen” intellectual property, patients and patient information would qualify as injurious to a person in the business of providing in-home health care services. While that portion of Ms. Wey’s supporting declaration denying that she made the statements is enough to meet Cross-Defendants’ initial burden (see Wey Decl. at ¶¶3-5), as soon as the burden shifts Hall is able to raise triable issues of material fact through her own declaration and attached exhibits. (See Hall Decl. at ¶¶13-14 and attached exhibits D-F.) Again, the Court cannot weigh credibility on summary judgment and conflicting declarations normally require a trial to resolve the dispute as to what occurred.

The Court notes that Cross-Defendants submitted evidentiary objections with their Reply. These objections do not comply with Cal. Rule of Court 3.1354, which requires two documents to be submitted: the objections and a separate proposed order on the objections, both of which must be in one of the two approved formats stated in the Rule. As Cross-Defendants’ objections do not comply with the Rule the Court will not rule on them. (See Vineyard Spring Estates v. Super. Ct. (2004) 120 Cal.App.4th 633, 642 [trial courts only have duty to rule on evidentiary objections presented in proper format]; Hodjat v. State Farm Mutual Automobile Ins. Co. (2012) 211 Cal.App.4th 1 [trial court not required to rule on objections that do not comply with Rule of Court 3.1354 and not required to give objecting party a second chance at filing properly formatted papers].) Objections that are not ruled on are preserved for appellate review. (CCP § 437c(q).)