Case Number: BC527369    Hearing Date: April 23, 2014    Dept: 58

Judge Rolf M. Treu
Department 58
Hearing Date: Wednesday, April 23, 2014
Calendar No.: 12
Case Name: Velarde v. Universal Bank, et al.
Case No.: BC527369
Motion: (1) Motion to Stay Pending Concurrent Criminal Matters; Motion to Seal
(2) Demurrer and Motion to Strike
Moving Party: Defendants Universal Bank and Frank Chang
Responding Party: Plaintiff Patricia Velarde
Notice: OK

Tentative Ruling: (1) Motion to stay is granted. Motion to seal is granted.

(2) Demurrer and motion to strike are off-calendar in light of the stay.

Background –
On 11/14/13, Plaintiff Patricia Velarde filed this action against Defendants Universal Bank, Frank Chang, and Mitchell Foon arising out of her employment and termination there from. Plaintiff asserts FEHA causes of action for (1) age discrimination, (2) race/national origin discrimination, (3) physical disability/medical condition discrimination, (4) discrimination based on participation in protected conduct, (5) failure to prevent discrimination and harassment, (6) retaliation, (7) harassment, (8) intentional infliction of emotional distress, (9) refusal to accommodate, (10) violation of Article I § 8 of the Constitution, (11) wrongful termination, and (12) unfair competition. All COAs are asserted against Universal Bank. Additionally, the 6th through 8th COAs are asserted against Chang and Foon, and the 12th COA is asserted against Chang.

Factual Allegations of the Complaint –
Plaintiff worked as a customer service representative in Universal Bank’s insurance premium finance department (¶ 10) and Chang was Universal Bank’s CEO and Foon was Plaintiff’s manager and supervisor (¶ 1). On 4/11/11, Foon was hired as department manager. ¶ 11. Plaintiff applied for a department manager assistant position but was not interviewed and a friend of Foon was hired instead. ¶ 13. Foon began completing false performance evaluations of Plaintiff, blocked her access, and surreptitiously read her emails. ¶¶ 14, 19. Plaintiff had filed a workers compensation claim and was terminated while attending a doctor’s appointment for a work-related injury. ¶ 15. Plaintiff complained about disparate treatment and harassment to management. ¶ 16. Plaintiff was terminated on 11/17/11. ¶ 21.

On 4/9/13, Plaintiff and Universal Bank participated in mediation during which Universal Bank demanded that any resolution include Plaintiff’s full cooperation with Universal Bank’s defense of claims brought by state and/or federal governmental entities: Chang ordered mediation to cease, and the next morning federal agents interrogated her concerning an investigation into Universal Bank’s claim of customer fraud. ¶ 30.

Motion to Stay –
Universal Bank and Chang (“Moving Parties”) requests a stay of this action pending an ongoing federal criminal investigation. See Kim Decl. ¶¶ 2-5. Moving Parties request a stay of 60 days. See Reply p. 2:14-15.

“Evidence Code section 940 specifically excludes from discovery self-incrimination information. Courts have construed this principle to permit the privilege against self-incrimination to be asserted ‘in any proceeding, civil or criminal, administrative or judicial, investigatory or adjudicatory . . . .’” Pacers, Inc. v. Superior Court (1984) 162 Cal.App.3d 686, 688 (citations omitted). When “a defendant’s silence is constitutionally guaranteed, the court should weigh the parties’ competing interests with a view toward accommodating the interests of both parties, if possible. An order staying discovery until expiration of the criminal statute of limitations would allow real parties to prepare their lawsuit while alleviating petitioners’ difficult choice between defending either the civil or criminal case.” Id. at 290.

In exercising discretion, the trial court should consider: “(1) the interest of the plaintiffs in proceeding expeditiously with this litigation or any particular aspect of it, and the potential prejudice to plaintiffs of a delay; (2) the burden which any particular aspect of the proceedings may impose on defendants; (3) the convenience of the court in the management of its cases, and the efficient use of judicial resources; (4) the interests of persons not parties to the civil litigation; and (5) the interest of the public in the pending civil and criminal litigation.” Avant! Corp. v. Superior Court (2000) 79 Cal.App.4th 876, 885 (quoting Keating v. Office of Thrift Supervision (9th Cir. 1995) 45 F.3d 322, 324-25).

Plaintiff argues that there is no pending criminal action in which any of the Moving Defendants are parties and that Universal Bank cannot assert the Fifth Amendment privilege. These arguments are irrelevant and unresponsive to Moving Parties’ showing. Plaintiff’s action alleges discriminatory and harassing conduct by Foon and is also based in part on Universal and Chang’s alleged participation in the state and/or federal law enforcement interrogation of Plaintiff. The ongoing federal investigation could implicate either the parties’ constitutional rights in this action. This imposes a great burden on Moving Parties, which may in turn result in additional law and motion practice. Therefore, the Court finds that both convenience and the public interest are supported by a stay. The motion to stay is granted.

Motion to Seal –
Moving Parties request that their motion to stay be sealed pursuant to CRC 2.550. The Court notes that the motion to stay implicates Federal Rules of Criminal Procedure Rule 6(e). Plaintiff argues that CRC 2.550 does not apply because of the (a)(2) exception found therein; however, this position concedes that the motion to stay contains facts that are required to be kept confidential by law. Plaintiff argues that Moving Parties have violated the confidentiality by bringing the motion to stay; however, this is not at issue before this Court. Therefore, the Court finds that the motion to seal is supported by good cause. It is granted.

Demurrer and Motion to Strike –
Chang has demurred to the COAs asserted against him. Moving Parties have moved to strike Plaintiff’s allegations concerning the mediation and the state and/or federal governmental investigation and Plaintiff’s claims of damages under the 12th COA. In light of the Court’s ruling on the motion to stay, the Court will take the demurrer and motion to strike off-calendar. The Court will reset these matters for hearing as appropriate.