2016-00203643-CU-OE

Michael Lillie vs. CDCR

Nature of Proceeding: Hearing on Demurrer to the 1st Amended Complaint

Filed By: Anderson, Derek T.

Cross-defendant Michael Lillie’s (“Lillie”) Demurrer to the First Amended Cross-complaint filed by California Department of Corrections and Rehabilitation (“CDCR”) is ruled on as follows:

Plaintiff’s First Amended Complaint alleges a violation of the California Whistleblower Protection Act, Government Code sections 8547 et seq. Plaintiff alleges that he was retaliated against for disclosing improper governmental activities in the workplace. Plaintiff was employed as a Special Agent-In-Charge

with the Office of Internal Affairs (“OIA”), Headquarters. Plaintiff was responsible for preparing threat assessment reports and alleges he was retaliated against for complaining that other employees were intentionally hiding relevant information that plaintiff had provided in his threat assessment report. The instant threat assessment report was removed from plaintiff’s responsibility and assigned to someone else who allegedly removed the relevant information about Agent X. Plaintiff then submitted via email a memorandum to the Secretary of CDCR, Assistant Secretary of CDCR and Office of the Inspector General (“OIG”) in which he documented his belief that his supervisors may have committed misconduct by intentionally withholding factual and relevant information in an official CDCR report, after which actions he suffered retaliation.

The FACC alleges Lillie brought a worker’s compensation action against CDCR. (FACC, ¶ 3.) In his worker’s compensation case he provided CDCR with trial exhibits that included copies of threat assessment reports he was involved in preparing. (FACC, ¶¶ 7,11.) CDCR alleges that the documents are the property of CDCR. (FACC

¶ 8) CDCR alleges that Lillie took copies of these documents to pursue his worker’s compensation claim and this whistleblower action without authorization. (FACC, ¶¶ 9, 14.) CDCR asserts these documents are confidential and demanded during the worker’s compensation proceeding that Lillie return them, but Lillie refused. (FACC, ¶¶8, 9, 12.) In the worker’s compensation case, Lillie took a deposition of a former CDCR deputy director, Dave Grant, and asked Grant questions about the documents. (FACC, ¶ 13.) Lillie then took another deposition in his workers’ compensation case of CDCR’s former Chief of the Office of Internal Affairs, John Day, where he again used copies of documents that CDCR considered confidential. (FACC, ¶ 16.) CDCR then deposed Lillie using the documents that Lillie had produced, and Lillie informed CDCR that he had sent copies of the documents from his CDCR email account to his personal email account and that he also has hard copies. (FACC, ¶ 17.)

CDCR contends the documents are unique because they are protected by the official information privilege in Evidence Code section 1040, 1043 and 1045, 1045, Penal Code sections 832.5, 832.7, and 832.8, Pitchess v. Superior Court (1974) 11 Cal.3d 531 and by the right of privacy belonging to third party employees and inmates under the California Constitution. (FACC¶¶ 19-20) Thus, CDCR contends that Lillie has no right to possession of the documents.

The purpose of a demurrer is to test the legal sufficiency of a claim. (Donabedian v. Mercury Ins. Co.(2004) 116 Cal.App.4th 968, 994.) The pleading rules applicable to demurrers are now familiar and well established. Pleadings are to be liberally construed. (Code Civ. Proc. § 452) A demurrer admits the truth

of all material facts properly pled and the sole issue raised by a general demurrer is whether the facts pled state a valid cause of action – not whether they are true. (

Serrano v. Priest (1971) 5 Cal.3d 584, 591.)

A demurrer may be sustained only if the complaint lacks any sufficient allegations to entitle the plaintiff to relief. (Financial Corp. of America v. Wilburn (1987) 189 Cal.App.3d 764, 778.) “Plaintiff need only plead facts showing that he may be entitled to some relief . . . , we are not concerned with plaintiff’s possible

inability or difficulty in proving the allegations of the complaint.” (Highlanders, Inc. v. Olsan (1978) 77 Cal.App.3d 690, 696-697.) “[Courts] are required to construe the complaint liberally to determine whether a cause of action has been stated, given the assumed truth of the facts pleaded.” (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726.)

CDCR’s FACC added causes of action for Breach of Contract, Declaratory Relief, and Injunctive relief to the original two causes of action for conversion and injunctive relief. Lillie contends the new causes of action not only go beyond the scope of leave to amend, but they fail to state facts sufficient to constitute a cause of action. Lillie contends the defects in the conversion and replevin causes of action have not been cured.

1st cause of action Breach of Contract

The demurrer to this cause of action is unopposed and is sustained, without leave to amend. See also the related ruling on motion to strike, on this day’s calendar.

CDCR contends Lillie breached a January 27, 2012 Computing Technology Use Agreement which states in pertinent part that CDCR computer users will not “[t]ransmit material, information, or software in violation of CDC’s communication policies, or local, state, or federal law.” The agreement also states that users will not “[e]ngage in any activity for personal gain or for personal business transactions.” Lillie allegedly breached the contract by sending confidential and privileged information from his official CDCR email account to his private: Yahoo email account in violation of the Department Operations Manual.

First, as noted in the related ruling on the motion to strike, CDCR’s amendment went beyond the scope of the court’s ruling on the demurrer, which did not allow CDCR to plead a breach of contract. Therefore, this cause of action is stricken in the ruling on the motion to strike. Moreover, on demurrer, CDCR’s breach of contract claim fails as a matter of law because its computer technology use agreement does not create a contract between the parties. The terms and conditions of public employment are determined by law, not contract. (Miller v. State of California (1977) 18 Cal.3d 808, 813 -814; Boren v. State Personnel Board (1951) 37 Cal.2d 634, 641[“The terms and conditions of civil service

employment are fixed by statute and not by contract.”]; Kemmerer v. County of Fresno, (1988) 200 Cal. App. 3d 1426, 1432 [“[I]t is well settled in California that public employment is not held by contract but by statute”]

2nd cause of action Declaratory Relief

The demurrer is overruled.

As framed by the papers, CDCR contends the parties have a controversy concerning their respective rights and duties as to whether Lillie had the right to take and use the documents from CDCR.

Lillie contends CDCR’s amendment went beyond the scope of the court’s ruling on the demurrer, which did not allow CDCR to plead a cause of action for declaratory relief. Lillie further contends that a claim for declaratory relief addresses prospective conduct and does not state a cause of action if it merely seeks redress of a past wrong – i.e. whether Lillie wrongfully took (in the past) documents, data and information belonging to CDCR. (FACC, ¶ 25.) If Lillie has wronged CDCR, it has adequate remedies at law in its pleaded replevin and conversion actions which will adjudicate CDCR’s right to the alleged documents, data and information (although Lillie also states no cause of action is stated under these theories.)

The Court disagrees. CDCR has alleged sufficient facts to suggest that the conduct of utilizing the documents in this ongoing action will continue.

3rd cause of action Injunctive Relief

The demurrer is overruled.

CDCR seeks an order requiring Lillie to return and destroy all confidential and privileged documents, data, and information that he wrongfully took from Cross-Complainant, and for an order enjoining Cross-Defendant from using the documents, data, and information for any purpose not permitted by law.

Lillie contends CDCR’s amendment went beyond the scope of the court’s ruling on the demurrer, which did not allow CDCR to plead cause of action for injunctive relief. However, the initial Cross-complaint included a prayer for injunctive relief. The Court concludes that this cause of action is within the scope of leave to amend of the prior ruling on the demurrer. The addition of a new cause of action is appropriate after a demurrer has been sustained with leave to amend where it “directly responds to the court’s reason for sustaining the earlier demurrer.” (Patrick v. Alacer Corp. (2008) 167 Cal.App.4th 995, 1015.)

In addition, Lillie contends that, as with declaratory relief, a party is not entitled to an injunction in a case in which the party has a plain, speedy, and adequate remedy at law. CDCR alleges facts to support that the relief sought in these causes of action is more significant than money damages for deprivation of the property. The Court finds that the parties dispute is properly addressed by a claim for declaratory/injunctive relief. The Court rejects Lillie’s contention that the FACC on its face shows that the conduct is not likely to be repeated in the future.

4th cause of action Replevin and 5th cause of action Conversion

The demurrer is overruled.

CDCR alleges Lillie has alleged that he obtained copies of the documents in his possession, not the originals, when he emailed them to himself. (FACC, ¶ 17.) CDCR has now in the FACC also alleged that it “is informed and believes” that Lillie took ” originals or copies” of the documents. Lillie contends CDCR pleads inconsistently when it alleges that Lillie took originals as well as copies. Lillie contends that CDCR’s new allegations that the confidential documents were unique is insufficient to plead either a replevin or a conversion cause of action, relying on the argument that if a party takes only copies of documents, there can be no replevin or conversion as long as the

owner still has the originals.

The Court has revisited its earlier ruling on the demurrer and now finds that a cause of action for replevin is stated under the case of Pillsbury, Madison & Sutro v Schectman (1997) 55 Cal.App.4th 1279. In that case, a law firm sued a former attorney with the firm for taking copies and originals of documents he came in contact with as an employee of the firm. The firm established that it had ownership of the confidential documents and sought their return via a writ of possession, including injunctive relief provided in the claim and delivery statutes. In that case the court found that the documents, whether copies or originals, were unique as they involved confidential information and were the proper subject of replevin. CDCR’s allegations that the documents taken by Lillie were protected by various privacy statues are sufficient to allege uniqueness and are analogous to the documents taken in Pillsbury Madison & Sutro. The Court no longer is persuaded that no cause of action for conversion or replevin may be stated simply because CDCR still possesses the information in another form.

The case relied on by Lillie, FMC Corp. Capital Cities/ABC Inc. (1990) 915 F. 2nd 300, stated that the receipt of copies rather than originals does not ordinarily give rise to a claim for conversion because the gravamen of the tort of conversion is the deprivation of the possession of the use of ones property. However, that court addressed unique circumstances and found that conversion was shown by ABC’s refusal to return the copies. For pleading purposes, the Court finds that CDCR has now adequately alleged the unique nature of the property to overcome the rule stated in FMC Corp. and the Court no longer bases its ruling on the “original vs copies” argument.

Answer to remaining counts to be filed on or before January 22, 2018.

The minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or further notice is required.

Item 3 2016-00203643-CU-OE

Michael Lillie vs. CDCR

Nature of Proceeding: Motion to Strike Portions of the 1st Amended Complaint

Filed By: Anderson, Derek T.

Cross-defendant Michael Lillie’s (“Lillie”) Motion to Strike to the First Amended Cross-complaint filed by California Department of Corrections and Rehabilitation (“CDCR”) is ruled on as follows:

Lillie seeks to strike the first three causes of action for breach of contract, declaratory relief, and injunctive relief, as going beyond the scope of the ruling on the demurrer.

When a trial court sustains a demurrer with leave to amend, the scope of the grant of leave is ordinarily a limited one. It gives the pleader an opportunity to cure the defects in the particular causes of action to which the demurrer was sustained, but that is all. See Cnty. Water Coal. v. Santa Cruz Cty. Local Agency Formation Com.(2011) 200

Cal App. 4th 1317,1329, as modified on denial of reh’g (Dec. 9, 2011) “); see also Harris v. Wachovia Mortg., FSB (2010)185 Cal App. 4th 1018, 1023. Absent an express statement of leave by the trial court to add entirely new causes of action, when a demurrer is sustained with leave to amend, that leave is properly construed as permission to amend the causes of action as to which the demurrer was sustained. ( People ex rel. Dept. Pub. Wks. v. Clausen (1967) 248 Cal.App.2d 770, 785). Thus, a plaintiff (or cross-complainant) may not amend the complaint to add a new cause of action without having obtained permission to do so, unless the new cause of action is within the scope of the order granting leave to amend. Community Water Coalition v Santa Cruz County Local Agency (2011) 200 Cal.App.4th 1317, 1329.

In addition to seeking to strike the first three causes of action, Lillie seeks to strike language in the replevin and conversion causes of action, language requesting an injunction from the use of the property, punitive damages allegations and the prayer for injunctive relief, punitive damages, and for attorneys fees.

1st Cause of action: The motion to strike is granted. The breach of contract claim goes beyond the scope of leave to amend, as explained above. No leave to amend is granted based on the reasoning set forth in the ruling on demurrer.

2nd and 3rd causes of action: The motion to strike the replevin and declaratory relief causes of action is denied. These causes of action were within the scope of leave to amend.

The motion to strike the punitive damages allegations and prayer is denied. CDCR is alleged a cause of action for conversion. The allegation of punitive damages is sufficient at the pleading stage as CDCR states a cause of action for an intentional tort.

The Court rejects the argument that no punitive damages are allowed based on Civil Code 47 protected conduct (See ruling on demurrer October 9, 2018 finding the allegations support non-communicative conduct rather than communicative conduct.)

The motion to strike attorneys fees under sought pursuant to CCP § 1021.5 is denied. CCP §1021.5, which provides for an award of fees under the private attorney general doctrine, states that fees may be awarded “to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important public right affecting the public interest”. (CCP §1021.5.) Whether or not a particular action has resulted in such enforcement of an important public right is not properly determined until the litigation has concluded. The motion to strike the claim for fees under this section is denied.

The minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or further notice is required.