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CONFORMED copy ORIGINAL FILED Superior Coun of Catornia ‘Bounty of Los Any DEC 212016 Superior Court of California County of Los Angeles ‘carte, txcoutive Officer/Clerk Richard Duarte, Deputy Department 51 JENNI RIVERA ENTERPRISES, L Case No.: BC633764 Plaintiff, Hearing Date: 12/19/16 y, Trial Date: None set PETE SALGADO, etal., RULING RE: Defendants. Anti-SLAPP Motions Background This action involves claims by a deceased entertainer’s business entity for breach of a nondisclosure agreement by the entertainer’s former manager, interfering with that agreement by television producers, and related claims. ‘According to the allegations, Jenni Rivera was a world-renown Mexican-American singer, songwriter, and actress who died in a plane crash on December 9, 2012. Complaint $f 1, 18. JRE owns and manages Rivera’s business assets, apparently including her estate. Complaint 18. Salgado was Rivera's business manager. Complaint §§ 2, 19. On September 17, 2013, Salgado entered into a nondisclosure agreement (NDA) where he agreed not to disclose any information about Rivera, to hold such information as a fiduciary, and that JRE shall be entitled to injunctive relief for any breach. Complaint f 4, 19-21, 32, Exh. 1, NDA § 2(b)-(C) Salgado breached his contractual and fiduciary duties by authoring an unpublished book about Rivera that was disseminated to the other defendants (Production Defendants). A forthcoming television series based on the book is being produced. Complaint $9 22-24, Exhs. 2-4, When JRE leamed of the series, its counsel sent a letter to defendants stating that Salgado breached the NDA by disclosing confidential information in the book and in connection with the series, and demanding that defendants cease and desist. Complaint 25, Exh. 5. Having received the letter, Production Defendants knew Salgado entered into the NDA and was prohibited from disclosing information about Rivera. Nonetheless, Production Defendants induced Salgado’s breach and interfered with the NDA by inducing Salgado to disclose such information as part of the production process. Complaint 426. On June 3, 2016, Salgado’ counsel responded, stating that the NDA (or Salgado’s signature) was forged. Complaint ¥ 27, Exh, 6. Salgado’s claim is false because he signed the NDA before a witness and based on an expert's forensic analysis. Complaint §§ 28-29. Salgado intends to further disclose information about Rivera. Complaint 31. Defendants’ conduct has devalued the information about Rivera that would otherwise be used for JRE and Rivera’s children’s benefit, including an authorized book and television show. Complaint 31. On September 12, 2016, plaintiff Jenni Rivera Enterprises, LLC (JRE) filed a complaint against defendants Pete Salgado, Latin World Entertainment Holdings, Inc., Luis Balaguer, Dhana Media, Inc., and BTF Media, LLC for (1) breach of contract (against Salgado), (2) breach of fiduciary duty (against Salgado), (3) interference with contract (against Production Defendants), (4) inducing breach of contract (against Production Defendants), and (5) unfair competition (against all defendants). On October 14 and 28, 2016, Production Defendants and Salgado filed these opposed anti- SLAPP motions. Salgado joins in Production Defendants’ motion. The Court considered the moving, opposition, and reply papers, and rules as follows. Requests for Judicial Notice Defendants’ unopposed requests for judicial notice of media articles and related materials about Rivera are GRANTED. Evid, Code § 452(h). Evidentiary Objections ‘The Court’s rulings on the parties” evidentiary objections are reflected in the proposed orders. ‘The Court declines to rule on plaintiff's evidentiary objection to Salgado’s reply because it is not in a form even close to the format required by California Rule of Court, rule 3.1354, Anti-SLAPP Standard Generally In determining whether to grant or deny a Code of Civil Procedure section 425.16 special motion to strike, the court must engage in a two-step process. Shekhter v. Financial Indemnity Co. (2001) 89 Cal.App.4th 141, 150. First, the court must decide whether the moving party has met the threshold burden of showing that the plaintif?’s cause of action arises from the moving party’s constitutional rights of free speech or petition for redress of grievances. Ibid. This burden may be met by showing the act which forms the basis for the plaintiff's cause of action ‘was an act that falls within one of the four categories of conduct set forth in CCP § 425.16(e). If the defendant meets this initial burden, then the burden shifts to the plaintiff to establish a probability that the plaintiff will prevail on the claim, that is, present facts which would, if proved at trial, support a judgment in the plaintiff's favor. Id. at 150-151. In making its determination on this prong of the analysis, the trial court is required to consider the pleadings and the supporting and opposing affidavits stating the facts upon which the liability or defense is based. Church of Scientology v. Wollersheim (1996) 42 Cal.App.4th 628, 646. The court does not, however, “weigh credibility [nor] compare the weight of the evidence. Rather, {the court] accepts as true the evidence favorable to the plaintiff and evaluates the defendant’s evidence only to determine if it has defeated that submitted by the plaintiffs a matter of law.” Flatley v. Mauro (2006) 39 Cal.4th 299, 326. First Prong: Protected Activity Standard In determining whether a defendant seeking to strike a claim under the anti-SLAPP statute has made a prima facie showing that the plaintiff's action arises from activity protected by statute, the critical consideration is whether the plaintiff's cause of action itself, and the act which the plaintiff complains of, is based on an act taken by defendant in furtherance of his right of petition ‘or free speech. Philipson & Simon v. Gulsvig (2007) 154 Cal.App.4th 347, 357; Birkner v. Lam (2007) 156 Cal.App.4th 275, 281; Paul for Council v. Hanyecz (2001) 85 Cal.App.4th 1356, 1364. “The anti-SLAPP statute’s definitional focus is not on the form of the plaintiff’s cause of 2 action but, rather, the defendant's activity that gives rise to his or her asserted liability ~ and whether that activity constitutes protected speech or petitioning.” Navellier v. Sletten (2002) 29 Cal.4th 82, 92 (emphasis in original). The statute is to be broadly applied and includes four categories of protected conduct: (1) Any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law (CCP § 425.16(e)(1)); (2) Any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law (CCP § 425.16(e)(2)); (3) Any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest (CCP § 425.16(¢\(3)); or (4) Any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest (CCP § 425.16(e)(4)). First Prong: Protected Activity Analysis As defendants argue, expressive communications about celebrities such as Rivera have been found to fall within the anti-SLAPP statute. See Nygard, Inc. v. Uusi-Kerttula (2008) 159 Cal. App.4th 1027, 1034 (noting that a matter of “celebrity gossip” was found to constitute a matter of public interest). Production Defendants’ alleged conduct was producing a series about Rivera, and Salgado’s alleged conduct was suppling information about Rivera in the service of producing the series. This conduct falls squarely within section 425, JRE does not dispute that Production Defendants’ complained-of conduct falls within section 425°s ambit. JRE does dispute that Salgado’s complained-of conduct is protected, arguing that Salgado waived his First Amendment rights by entering into the NDA. JRE relies on DaimlerChrysler Motors Co. v. Lew Williams, Inc. (2006) 142 Cal.App.4th 344. But it appears that JRE misinterpreted this decision. The decision actually states, “Relying on Navellier, DaimlerChrysler argues Kiel’s protests were not constitutionally protected because Keil waived the right to file the protests. Navellier does not so hold. The high court made clear the mere fact the constitutional speech occurred in violation of a contract did not by itself preempt the application of the anti-SLAPP statute, Rather, the issue of breach was to be addressed under the statute’s merits prong.” Id, at 351. ‘Therefore, JRE does not meet its responsive burden on the first prong. The Court notes that it believes there is a strong argument that the causes of action against Salgado are unprotected under the first anti-SLAPP prong to at least the extent they seek declaratory relief, because such claims arise from the NDA rather than from protected activity. See Gotterba v, Travolta (2014) 228 Cal. App.4th 35, 42 (declaratory relief action to establish authenticity and enforceability of NDA did not implicate protected activity, even though protected activity may have “triggered” complaint and even though protected activity may be evidence in support of the allegations). Such a claim exists independent of any particular conduct that is forbidden by the NDA and relies only upon evidence related to the NDA 3 authenticity. Ibid, For the same reason, the imposition of straightforward injunctive relief following such declaratory relief may also be unprotected. The “arising from” issue becomes more complex if considered more broadly in this case. Because the issue is not raised by the parties and the case law on the matter of what conduct “arises from” protected activity is complex and extensive, the Court is not reaching the issue here. Thus, on the arguments presented, the Court concludes both sets of defendants’ complained-of conduct is protected. Accordingly, the Court tums to the second prong of the anti-SLAPP analysis for both motions. Second Prong: Probability of Prevailing Standard The burden is on the pleader to produce evidence that would be admissible at trial, or to proffer a prima facie showing of facts supporting a judgment in the pleader’s favor. Chavez v. Mendoza (2001) 94 Cal.App-4th 1083, 1087. In essence, this is a “summary judgment-like” procedure where the opposing party must make a prima facie case for its cause of action challenged. Bergman v. Drum (2005) 129 Cal.App.4th 11, 18. ‘A court is required to “accept as true all evidence favorable to the plaintiff and assess the defendant’s evidence only to determine if it defeats the plaintiff's submission as a matter of law.” [Citation]. That is the setting in which we determine whether plaintiff has met the required showing, a showing that is ‘not high.” [Citation]. In the words of the Supreme Court, plaintiff needs to show only a ‘minimum level of legal sufficiency and triability.’ [Citation]. In the words of other courts, plaintiff needs to show only a case of ‘minimal merit.” {Citation].” Hecimovich v. Encinal School Parent Teacher Organization (2012) 203 Cal.App.4th 450, 468- 469. Sal M mn Salgado argues, in summary, that the NDA was forged based on his declaration and a scienti analysis of the documents, that JRE cannot establish that a purported $1 of consideration was paid, and that JRE cannot establish that Salgado owed it a fiduciary duty because it never contracted with him and because Rivera’ privacy rights ceased upon her death. In opposition, JRE argues that evidence demonstrating the NDA’s genuineness exists, that Salgado’s continued employment with Rivera was sufficient consideration, and that Salgado expressly agreed that he ‘would hold the information confidential as a fiduciary. st COA: Existence of a Contract / Forgery ‘The elements of a breach of contract cause of action are: (1) the contract; (2) plaintiff's performance or excuse for nonperformance; (3) defendant's breach; and (4) resulting damages. Reichert v. General Ins. Co. (1968) 68 Cal.2d 822, 830. The foundation of the dispute between the parties is between two percipient witnesses (1) Salgado, who claims that he never signed the NDA, and (2) Rosa Rivera Flores, who claims she saw him sign the NDA. Salgado denies having signed the NDA and asserts several reasons why he believes the purported NDA was forged. Salgado acknowledges receiving it in 2013 and forwarding it to his attorney for review. Salgado Decl. {4 12, 13, Exh. E. Salgado states that he ultimately did not sign it because he and Flores did not continue discussing production of an album. Salgado Decl. 15. In contrast, Flores states that, “outside of Beatbox Pros, | handed the [NDA] to Mr. Salgado, I observed him lean it against something he was holding in his hand, 4 like a folder, so he could sign it, and I personally witnessed Mr. Salgado sign the [NDA]. (A. true and correct copy of the [NDA] that I personally witnessed Salgado sign is attached as Exhibit 4).” Flores Decl. 7. Flores also explains the circumstances that she believes lend credence to her account. The direct dispute between these two fact witnesses would be sufficient to create a triable issue for either party on summary judgment, and it certainly is substantial enough satisfy plaintiff's burden at this stage. But JRE’s case as to this matter has been bolstered even further. At the hearing in this matter, Salgado’s counsel conceded that the signature on page four of the NDA is in fact Salgado's own ink signature. (Further, the Court understood Salgados counsel to state that, at least as far back as October 20, 2016, when Salgado’s expert, Hicks, analyzed the NDA, Salgado was conceding that the signature was his; the Court understood counsel to state that Hicks had not been asked to ‘compare the NDA signature to known signature samples for that reason). Salgado’s concession that his ink signature is on page four of the NDA is in accord with the declaration submitted by JRE’s expert, and that expert’s accompanying report, concluding that the signature was genuine. Blanco Decl. 4, Exh. 1. The expert identifies Salgado as the signer of the document by comparison with known signature samples, and he finds that the document was signed in “actual writing pen ink.” This testimony supports Flores’ account JRE offered, as itis consistent with Salgado actually signing the document. Salgado's expert testimony does not dispute JRE’s expert testimony, in accord with Salgado’s lawyer's concession that Salgado actually signed the page that is presented as page four of the NDA. Rather, Salgado’s expert’s declaration describes two categories of inconsistencies between the purportedly executed NDA and a genuine complete document: (1) inconsistent staple holes and tears between the first three pages and the signature page and (2) indentations on pages one through three made by the Flores signature on page four (as would be the case if she had folded the other pages underneath page four while signing), but no such indentations made by the Salgado signature. Hicks Decl. §f 9-14. Salgado’s expert testimony appears to be offered to support the theory that Salgado actually signed page four of the NDA, but that it was not attached to the rest of the document at the time he signed it. Thus, under this theory, either (1) Salgado signed page four as an single page, unattached to any contract, or (2) someone other than Salgado removed a page four from some other contract and attached it to the other three pages of the NDA; this would be prior to Flores signing it, as her signature indentations indicate that she signed the document when all four pages were together. ‘This expert testimony, without more, does little to bolster Salgado’s argument that the NDA is not authentic. There is no testimony from him affirmatively establishing that he signed a single unattached signature page at some point, nor that there is some other particular contract he signed from which page four could have been pilfered. To accept Salgado’s position (at least the “other contract” suggestion), one has to conclude — without evidence ~ that he signed some other agreement that had blanks for Flores and a “recipient” to sign; that was in the same font; that also was denominated with the same page four marking at its bottom; and that happens to begin with the same sentence that is continued from the prior page. This is logically possible, but does not seem particularly likely, especially in the absence of Salgado identifying some other agreement that may be the one he signed that happened to meet these unlikely criteria. Given the state of the record, JRE certainly has met its burden at this stage on the issue of whether it 5 may be able to prove that the NDA is authentic rather than forged. (JRE also attempts to discredit Salgado’s expert’s declaration by explaining that the document was unstapled and photocopied several times, including in this litigation. OPP 13, fn. 2. These facts could potentially explain the inconsistencies Salgado’s expert identified). For the remaining analysis, the Court assumes the NDA is genuine. First and Second COA: Consideration The NDA provides, “For and in consideration of one dollar ($1.00),” Salgado agrees to hold Rivera’s information confidential. Flores Decl. 7, Exh. 4. Salgado denies having received the dollar. Salgado Decl. { 17. Nonetheless, the NDA further provides, with respect to the dollar, “receipt hereby acknowledged by Recipient [ie., Salgado].” Flores Decl. 7, Exh. 4. It is not clear that plaintiff claims that the dollar was paid, but plaintiff does offer testimony supporting the alternative consideration that Salgado was permitted to continue to seek profits by working with the family on a concert and an album because he signed the NDA. Flores Decl. 10-11 It seems obvious to this Court that the one dollar in consideration was a technical recital rather than a complete statement of the consideration actually involved in the contract, as might be the case with, for example, a dollar amount provided in a contract for goods being purchased for a substantial price. “It is a matter of common knowledge that where a consideration of one dollar is mentioned in a contract, other considerations usually pass between the parties to the agreement. A consideration of one dollar is ordinarily sufficient to support a contract at law.” Abers v. Rounsavell (2010) 189 Cal.App.4th 348, 362.! ‘The general rule in California is that consideration for a contract may be proven by extrinsic evidence, regardless of the consideration stated in the contract. This rule has been codified elsewhere, but is now found in Evidence Code section 622: “The facts recited in a written instrument are conclusively presumed to be true as between the parties thereto, or their successors in interest; but this rule does not apply to the recital of consideration.” The special treatment of considers appears to apply because consideration establishes “the validity of the agreement” itself. CCP § 1856(0}; see, e.g., Hays v. Clark (1959) 175 Cal. App.2d 565, 571 (evidence may always be received to show the consideration of the instrument” and proof of consideration did not vary terms of written deed); Abel v. O’Hearn (1950) 97 Cal.App.2d 747, 757 (“the true consideration for an agreement may always be shown"). Thus, in California, extrinsic evidence can be used both to prove that the consideration in the agreement was not received (ie., the one dollar that Salgado wishes to prove was not received, despite his statement that he received it) and to prove that some other consideration instead was actually provided, to establish the validity of the contract (., that Salgado was permitted to ‘work with JRE as a result of signing the NDA, which JRE wishes to demonstrate.) ' Under the Restatement’s rule, an articulation of a dollar received in a contract is sufficient consideration even if the dollar is not paid. Restatement (Second) of Contracts § 88 (1981) (“A executes a written guaranty to B of a debt then due from C. The guaranty is stated to be ‘in consideration of one dollar paid to me by B, the receipt of which is hereby acknowledged.” The guaranty is binding whether the dollar is in fact paid or not.”) This rule derives from United States Supreme Court law and law from other states. California law, in contrast, has long more iberally allowed extrinsic evidence as to consideration, including the failure of consideration. 6 Parol evidence is admissible to contradict a recital of executed consideration, i.e. money, property or services which the contract states have been received” (Witkin, California Evidence, p. 407); and the “failure of consideration, or actual consideration, for a contract may be proved by parol evidence although a different consideration appears in writing.” (Sandrini v. Branch, 32 Cal.App.2d 707, 708 [90 P.2d 593); Kent v. First Trust & Sav. Bank, 101 Cal.App.2d 361 [225 P.2d 625]; Richardson v. Lamp, 209 Cal.668 [290 P. 14),) Doria v. Intl Union, Allied Indus. Workers of Am., AFL-CIO (1961) 196 Cal.App.2d 22, 39; In_ te Century City Doctors Hosp., LLC (Bankr. C.D. Cal.) 2011 WL 7637255, at *6 (“Parol evidence is admissible to establish the actual consideration for a contract, even if such evidence directly conflicts with an express recital in a written agreement”); Wilson v. Wilson (1960) 54 Cal.2d 264, 269 (“It is conceded that the consideration recited in the agreement is not conclusive on the parties and that the true consideration for the agreement may be established by parol.”); Wade v. Markwell & Co. (1953) 118 Cal.App.2d 410, 418 (“where the consideration recited in a contract is different from the consideration actually received, a party is not bound by the written recital, but may allege and prove the true consideration passing between the parties”); Friis: Hansen v. Thompson (1946) 73 Cal.App.2d 580, 583 (specification of consideration of $650 in bill of sale did not preclude extrinsic evidence “admitted to show actual consideration for the vritten agreement to be something other than the consideration recited therein"); Patterson- Ballagh Corp. v. Byron Jackson Co, (9th Cir. 1944) 145 F.2d 786, 790 (“It is the California rule that the recital of consideration in a written instrument is not conclusive. Parol evidence is admissible under [former code section] to show the true consideration.”); Bowman v. Union Trust Co. of San Diego (1940) 41 Cal.App.2d 397, 403 (“It is well settled that the question of ‘consideration may always be inquired into and that the actual consideration of a contract may be shown by parol evidence even though a different consideration appears in the writing.”); Johnston v. Courtial (1932) 216 Cal. 506, 510 (“The plaintiff [argues tJhat the truth of the recital in a written instrument of the consideration thereof is not conclusive, but that the true consideration may be shown by extrinsic evidence. The position of the plaintiff in this respect is well supported ....") Allowing proof of alternate consideration seems all the more appropriate where the consideration in the contract was only $1, which indicates that other consideration likely was actually involved, as recognized in Abers, supra, 189 Cal. App.4th at 362. See Thatcher v. G. & M, Conerete C (1929) 100 Cal.App. 424, 427 (“the true consideration for a written release reciting a consideration of one dollar may be shown.”); Stufflebeem v. Amold (1880) 57 Cal. 11, 11 (“oral evidence that the true consideration for the release” was admissible because “Jt did not tend to alter the terms of the release.”) The $1 recital is typically articulated in a contract simply to remove consideration as an issue as to the validity of that contract; it is not the consideration that typically actually motivates the agreement. Thus, once Salgado has opted to use extrinsic evidence to disclaim receiving the dollar to contradict the recital of consideration that he made, JRE should be able to introduce extrinsic evidence to demonstrate “the validity of the agreement,” Code Civ. Proc. § 1856(f), in the form of consideration actually received for signing the NDA. Salgado’s reply brief cites four cases that permit a defendant to use extrinsic evidence to show that the consideration required on the face of the contract was not paid. See Cohen v. Goux (1874) 48 Cal. 97, 98-99; Griswold v. Frame (1920) 48 Cal.App. 178, 181-182; Goldner v. Jaffe (1959) 171 Cal.App.2d 751, 754; see also FPI Dev., Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 397 (use of parol evidence was permissible, but was not shown in the particular case.) 7 These authorities do allow Salgado to use parol evidence to demonstrate that he did not receive the particular consideration that he expressly acknowledged receiving on the face of the agreement, But if Salgado can do so, it seems only fair that JRE can use parol evidence to demonstrate consideration that he actually received instead of the one dollar. As the above authorities indicate, California case law and Evidence Code section 622 allow both types of parol evidence. At this stage, therefore, JRE has met its burden of showing a probability of success in showing that the agreement is not invalid due to lack of consideration, because it has evidence that Salgado actually received the consideration of an opportunity to work with the Rivera family in return for his signing the NDA. Second COA: Whether Salgado Owes JNE a Fiduciary Duty The elements of a cause of action for breach of fiduciary duty are: (1) existence of a fiduciary duty; (2) breach of the fiduciary duty; and (3) damages proximately caused by the breach. Stanley v. Richmond (1995) 35 Cal.App.4th 1070, 1086. Salgado argues that he owes no fiduciary duty to JRE because he never contracted with JRE not to disclose information about Rivera, and Rivera, deceased, has no privacy rights. Salgado’s arguments fail. ‘The NDA was made between JRE and Salgado: “AGREEMENT entered into the 17" day of September 2013, by and between Jenni Rivera Enterprise, Inc. ... and Pete Salgado ....”. Therefore, the relevant contract is between the parties, so that Rivera herself lacks privacy rights is irrelevant because Salgado’s obligation is to JRE. Moreover, the NDA further provides, “Recipient [Salgado] shall hold in a fiduciary capacity for the benefit of JRE ..” Flores Decl. 7, Exh. 4. ‘Thus, Salgado agreed that his role within the scope of his contractual duties was fiduciary, rendering his other job duties irrelevant. Salgado offers no authority indicating that a contractual fiduciary designation is invalid. Therefore, on the present record, the NDA’s terms are sufficient to establish that JNE has a probability of prevailing on whether Salgado owed JNE a fiduciary duty to maintain confidentiality. th COA: Unfair Competition This cause of action is addressed below, as Salgado has joined in Production Defendants’ motion as to it. Production Defendants’ Motion Production Defendants argue, in summary, that they lacked knowledge of the NDA at the relevant time and that the unfair competition law (UCL) is inapplicable to television broadcasts. In opposition, JRE argues, in summary, that Production Defendants knew of the NDA when JRE’s counsel advised them of it, that the continued disclosure is actionable, and that the UCL, applies because the NDA validly restricts disclosure. As mentioned above, the burden is on JRE. For Production Defendants’ motion, as mentioned above, the Court assumes that the NDA is valid. Third and Fourth COAs: Interference with Contract and Inducing Breach of Contract ‘The parties largely address these two causes of action simultaneously. A cause of action for inducing breach is similar to a cause of action for intentional interference. Ramona Manor Convalescent Hospital v. Care Enterprises (1986) 177 Cal.App.3d 1120, 1130-1131. 8 “To prevail on a cause of action for intentional interference with contractual relations, a plaintiff must plead and prove (1) the existence of a valid contract between the plaintiff and a third party; (2) the defendant's knowledge of that contract; (3) the defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage. ... To establish the claim, the plaintiff need not prove that a defendant acted with the primary purpose of disrupting the contract, but must show the defendant's knowledge that the interference was certain or substantially certain to ‘occur as a result of his or her action.” Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1148. “The elements of a cause of action for inducing breach of contract are [1] the existence of a valid contract, [2] defendants’ intent to induce a breach of the contract, and [3] a breach resulting from defendants’ unjustifiable or wrongful conduct.” Scott v. McDonnell Douglas Corp. (1974) 37 Cal. App.3d 277, 292. “In recent years, the tort of ‘inducing breach of contract’ has expanded to permit liability where the defendant does not literally induce a breach of contract, but makes plaintiff's performance of the contract ‘more expensive or burdensome” (Lipman v. Brisbane Elementary Sch, Dist. (1961) 55 Cal.2d 224, 232 [11 Cal.Rptr. 97, 359 P.2d 465], or interferes with the formation of a prospective economic relationship (Buckaloo v. Johnson (1975) 14 Cal.3d 815, 827 (122 Cal.Rptr. 745, 537 P.2d 865]). The requirement that the defendant act with culpable intent, though, has remained.” Ramona Manor Convalescent Hosp., supra, 177 Cal.App.3d at 1131. Overview of Application of Elements ‘The Court sees the key issue as follows. Production Defendants show that they were unaware of the NDA when (on March 1, 2016) they signed their co-production agreement with Salgado, and (on May 12, 2016) a “term sheet” with Univision for production and broadcast of a series based on Salgado"s unpublished book about Rivera. They appear to concede that, if they knew of the NDA at that time, they could potentially face liability for the causes of action at issue here. From the briefing and the argument at the hearing, however, it appears that they claim that they cannot be liable for interfering with the NDA or inducing a breach of the NDA, no matter what they learn after that time, because they are acting pursuant to their lawful contract with Salgado in producing the series about Rivera. In contrast, the Court concludes that Production Defendants’ knowledge at the moment of signing a contract with Salgado is not dispositive as to these causes of action. If, for instance, Production Defendants were told of an indisputably valid NDA on the day after signing with Salgado, it would seem that they would be as susceptible to injunction to forbid them from acting to induce a Salgado disclosure of protected facts (or monetary damages if they acted) as if they learned of the NDA the day before signing their agreement with him. In the Court's view, the application of the interference and inducement torts depends upon the trier-of-fact’s application of the elements to Production Defendants based on their knowledge, intent, and actions at any particular time. ‘To simply the facts based on those currently known to the Court, the Court sees this case as involving Production Defendants’ knowledge during three periods of time (this is a simplification because there were relevant events during the periods): 1, Before June 3, 2016; a period when Production Defendants appear to have had no knowledge of the ND- 2. Between June 3, 2016 and late October 2016: a period when Production Defendants knew of the NDA and JRE’s claim that it was valid and JRE’s representations as to reasons for the claim, but also knew of Salgado’s claim that the NDA was invalid; and 3. Late October 2016 to the present (late December 2016): a period when Production Defendants appear to have known that Salgado’s original ink signature was on the signature line of the NDA, calling into doubt the veracity of his claim that the agreement was invalid. Even at this date, Salgado’s book is still unpublished (the Court was informed at the hearing that publication is expected in March 2017) and the Univision television series has not been broadcast (the Court was informed that it is expected to begin airing in January 2017). It appears undisputed that the book and television series will contain facts from Salgado that are covered by the NDA. On the current record, it appears likely that Salgado was making substantial disclosures to Production Defendants as late as the third period, as apparently the production of twenty-six episodes about Rivera was occurring through December 2016. In the Court’s view — assuming the NDA is authentic — the public disclosure of the covered facts in the book (which he is authoring) and the television series (which he and his company are ci producing) would constitute breaches of the NDA by Salgado, even if he has already disclosed the same facts to some smaller number of persons (e-g., to his book publisher by providing that publisher the draft of his book, and to Production Defendants and their employees in the course of filming the series). On the facts known, there is a probability that, after the broadcasts of the television shows, JRE can prove to a trier-of-fact that Production Defendants are liable under the elements of the interference torts; that is, due to their knowledge (that they knew of the existence of the NDA beginning on June 3) and their intent (that they knew breaches were substantially certain to oceur, either beginning on June 3 or beginning in late October) they bear responsibility along with Salgado for acts that resulted in breaches of the NDA by broadcasting the shows. Proximate Cause / Timing JRE’s causation theory is that Production Defendants knew of the NDA and its terms on June 3, 2016, “yet continued to induce Salgado to breach the NDA and interfere with Salgado’s performance of the NDA by extracting information from him in violation of the NDA.” OPP 8:4-7. JRE urges, “Under California law, each breach of the NDA by Salgado, regardless of whether it occurred before or after June 3, 2016, provided a new opportunity for Production Defendants to have induced a breach of the NDA and to have interfered with the NDA.” OPP 8:7-10. Production Defendants rely on Hill v. Progress Co. (1947) 79 Cal.App.2d 771 to establish an absence of proximate cause. In Hill, one of the defendants breached a contract that had granted the plaintiff the exclusive right to haul oil drums, by hiring additional truckers to do so, including one Berry. When the plaintiff informed Berry that plaintiff had an exclusive contract, Berry continued hauling, and plaintiff contended that this conduct had caused a breach of the contract. The court rejected this claim, because the “breach ... took place with the hiring of Berry or other truckers, and not by, or at the time of, the subsequent conversation complained of.” Id, at 780. In other words, the contract had been breached, in exactly the manner complained of, before the act that the plaintiff claimed to have caused the breach Hill is distinguishable. In the context of the exclusive hauling contract, the single breach occurred at the moment Berry was hired. When Berry was hired, the plaintiff was no longer the exclusive hauler. Therefore, the breach occurred before the plaintiff disclosed the fact of the 10 exclusive contract. Production Defendants’ other cases appear to be to the same effect: cases in which the breach had already occurred. Here, in contrast, the NDA imposes an ongoing obligation on Salgado never to disclose information about Rivera. Additionally, the NDA provides “full injunctive relief for any breach{,]” implying, by its own terms, that there could be multiple breaches and the remedy of injunctive relief for the breaches. Flores Decl. 7, Exh. 4, NDA 2(b). Further, the agreement provides the remedy for “such breach or threatened breach[.]” Flores Decl. § 7, Exh. 4, NDA | 2(c). To find that once Salgado disclosed confidential information he would no longer be subject to a duty to maintain confidentiality would be an absurd result and might effectively nullify NDAs, save for the one bit of disclosed information that gave rise to the initial breach. ‘A disclosure of one piece of protected information does not mean that there is no breach when another item is disclosed; a disclosure to a small number of individuals does not mean that there is no breach when the same information is published to others through a widely available book or television program. ‘Thus, while there is no duty on Production Defendants to rescind their contract to co-produce the series with Salgado, see Dryden v. Tri-Valley Growers (1977) 65 Cal.App.3d 990, 995-996, they nevertheless are — potentially — liable for future breaches of the NDA that they know are substantially certain to occur in the course of their conduct as they work with Salgado to produce the show, because the contract at issue (the NDA) imposes a continuing obligation on Salgado to not disclose information. Accordingly, the Court is persuaded that JRE’s applying the continuous accrual doctrine is proper on the present record, While JRE’s cases applied the doctrine to statute of limitations defenses, they also establish that “a cause of action accrues each time a wrongful act occur Gilkyson v. Disney Enterprises, Inc. (2016) 244 Cal. App.4th 1336, 1341; compare Sebastian Int'l Inc. v. Russolillo (C.D. Cal. 2011) 162 F. Supp. 2d 1198, 1205 (plaintiff survives summary judgment by showing that, due to its notice to Rite Aid and CVS of ‘salon only” distribution scheme, CVS and Rite Aid knew with at least ‘substantial certainty’ that a ‘necessary consequence’ of their continued sale of products would be that plaintiff's performance of their contractual relations with distributors and salons would be made more ‘expensive or burdensome.’) Because California law does not require acts that induce breaches of contract to be independently wrongful, actions taken pursuant to a separate lawful contract are not for that reason alone protected from liability. whiteCryption Corp. v. Arxan Techs., Inc. (N.D. Cal. 2016) 2016 WL 3275944 at *4-*5 (on motion to dismiss, rejecting defendant company’s claim that it induced a breach of NDA that auditor entered into with plaintiff, where defendant claimed the its actions involved “nothing more than efforts by [defendant] to enforce its existing contractual rights under [ ] the Reseller Agreement”); Ariba, Inc. v. Rearden Commerce, Inc. (N.D. Cal.) 2011 WL 4031140, at *6 (“Ariba argues that it cannot be liable for interfering with a contract between Rearden and Ketera based merely on its assertion of rights under its own contract with Ketera, even if those assertions are erroneous. [citations] These cases, however, are inapposite. [Prior case] involved a negligent interference claim, which requires an additional showing of wrongfulness, and here, the claim is for intentional interference.”), Webber v. Inland Empire Investments (1999) 74 Cal. App. 4th 884, 901 (rejecting argument that “foreclosure on the note did not constitute tortious interference with the contract because, in each instance, Inland was only doing what it was legally entitled to do.”) rn Therefore, once Production Defendants learned of Salgado’s NDA, they were under a duty not to induce breaches going forward or otherwise interfere, assuming the elements are met. On these facts, the Court does not accept that all breaches of the NDA necessarily occurred before June 3 2016, and there is a probability that JRE can show Production Defendants induced a breach (or interfered with the NDA) after that time. Production Defendants’ Intent ‘The next question is whether Production Defendants knew that the NDA was valid and thus intended to disrupt a contractual relationship. “If the actor had no knowledge of the existence of the contract or his actions were not intended to induce a breach, he cannot be held liable though an actual breach results from his lawful and proper acts.” Imperial Ice Co. v. Rossier (1941) 18 Cal.2d 33, 37. There is no dispute that by June 3, 2016, Production Defendants were informed of the NDA’s existence and its relevance. Instead, Production Defendants argue that they did not know the NDA actually established a contractual relationship, based on Salgado’s representations that the NDA was forged, and despite JRE’s attomey’s letter stating otherwise. If they truly believed that they NDA did not establish a contractual relationship between Salgado and JRE, then they could not have believed that their acts in producing the series were substantially certain to disrupt that relationship. ‘Thus, the question during the June 3 to late October period is: whose representations did Production Defendants believe: those of Salgado or of JRE’s attomey? This issue revolves around credibility, which is properly put to a jury. By the period beginning late October, ‘moreover, Production Defendants appear to have had knowledge that Salgado’s signature on the NDA was authentic. This would allow a further attack on their credibility, as at that point for them to believe there was no contractual relationship between Salgado and JRE, they would have to believe a theory as unlikely as his current one (i.e. that Salgado signed a different “page four” of a different contract that was then stapled by JRE onto the other three NDA pages). (The Court again notes that it is ruling here based on the current evidence and it is possible that additional evidence could emerge.) Production Defendants rely on 1-800 Contacts, Inc. v. Steinberg (2003) 107 Cal.App.4th 568, which also involved an analysis of the anti-SLAPP second prong analysis, for the proposition that Salgado’s assurances, including his executing an affidavit that he did not execute the NDA, conclusively negate their knowledge of the NDA’s validity. There, “[t]he evidence showed that from the commencement of Steinberg’s acquaintance with Conder, and throughout the events addressed by the complaint, Conder repeatedly assured Steinberg that he would not disclose and ‘was not disclosing any confidential information of plaintiff's, in part because he had signed a confidentiality agreement with plaintiff. Moreover, in Steinberg’s presence, Conder stated and restated his contractual obligation not to work for a defined class of competitors, and obtained assurances that neither Steinberg nor the optometric associations were within that class.” Id. at 586, Here in contrast, assuming the NDA is genuine, Salgado was not forthcoming about the NDA. Moreover, unlike 1-800 Contacts, there is countervailing evidence. The evidence includes letters from JRE’s counsel stating that Salgado executed the written NDA and explaining, in detail, why the NDA was genuine, copies of which he contemporaneously sent to Production Defendants, Deixler Decl. 3, 5, Exhs. 1,3. Additionally, Salgado’s undisputedly genuine 12 signature appears on his written agreement with Production Defendants. Cordero Deel. 5, Exh. A. This fact could have led Production Defendants to realize that the NDA was genuine. Production Defendants apparently learned that the signature on page four was Salgado’s no later than either the expert's October 20, 2016, examination of the NDA (when, as Salgado’s attorney stated at the hearing, Salgado’s expert was told not to authenticate the signature because it wasn't contested) or his October 27, 2016, declaration (when the expert did not contest the signature). Production Defendants assert that they believed Salgado and his attorney's claim that the NDA was not authentic over JRE’s counsel’s letters explaining why counsel believed it was authentic. Cordero Decl. $f 10, 13; Urdaneta Decl. § 10; Balaguer Decl. 10. They do not address the effect of learning that Salgado’s signature on the NDA was genuine. Their defense of reliance ‘on Salgado’s representations is not conclusive on the present record. From the undisputed facts, itis reasonable to infer that as late as this month, Production Defendants have been intentionally extracting information about Rivera from Salgado because they are financially and creatively interested in the series and staying true to Rivera’s life story as. Salgado portrays it. “In Quelimane, supra, 19 Cal.4th at page 56, the Supreme Court approvingly quoted the Restatement Second of Torts’ statement that intentional interference with a contract occurs when the defendant ‘knows that the interference is certain or substantially certain to occur as a result of his ."” 1-800 Contacts, Inc., 107 Cal.App.4th at 586; see, e.g., Imperial Ice Co. v, Rossier (1941) 18 Cal.2d 33, 36 (stating, *...a person is not justified in indueing a breach of contract simply because he ... seeks to further his own economic advantage we") Therefore, there is a genuine dispute over Production Defendants’s intent, th COA: Unfair Competition Production Defendants argue that the UCL is inapplicable to noncommercial speech, and that the speech at issue, the television series, is expressive speech. See Rezec v. Sony Pictures Entertainment, Inc, (2004) 116 Cal.App-4th 135, 140 (stating that the UCL governs only commercial speech and that an advertisement is usually commercial speech); Kirby v. Sega of America, Inc. (2006) 144 Cal.App.4th 47, 62 (finding that the First Amendment barred the plaintiff's UCL claims that were based on publicity rights violations). Salgado joins. JRE does not dispute the general rule or that the series is noncommercial speech. Instead, JRE argues that the speech at issue is not protected because Salgado waived his First Amendment rights when he entered into the NDA. Salgado does not offer a specific argument against JRE’s claim that this is a waiver (assuming the NDA is valid). Production Defendants do not offer a response to JRE’s claim that the UCL applies as to Salgado if he signed the NDA, arguing that “even if” Salgado waived those rights, they have not. REPLY at 4. Thus, on the arguments presented, JRE has demonstrated a probability of prevailing as to Salgado on the fifth cause of action. But Production Defendants argue in reply that even if Salgado waived his rights, Production Defendants did not. The speech at issue, as against Production Defendants, is limited to commercial speech: Production Defendants’ television series that could be broadcast to the public. This is the gravamen of INE’s claims against these defendants. See Complaint § 22 (alleging facts about Salgado’s breach). Their speech appears to be so limited even if they are acting in concert with Salgado, who is a producer on the series. While commercial speech is not 1B excluded from the ambit of the other torts at issue, it apparently is excluded from the UCL. Therefore, on the arguments presented, JRE does not meet its burden as to Production Defendants as to the fifth cause of action. jusion Under the second prong of the anti-SLAPP statute, JRE establishes a probability of prevailing on all but the fifth cause of action as to the Production Defendants. Production Defendants’ motion is DENIED as to the third and fourth causes of action and GRANTED as to the fifth. Salgado’s motion is DENIED in its entirety. Production Defendants’ counsel to give notice. Dated: np the { Michael. Raphael Judge of the Superior Court 14