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1 Yosef Peretz (SBN 209288)

yperetz@peretzlaw.com
2 Ruth Israely (SBN 289586)
risraely@peretzlaw.com
3 PERETZ & ASSOCIATES
22 Battery Street, Suite 200
4 San Francisco, CA 94111
Telephone: 415.732.3777
5 Facsimile: 415.732.3791
6 Attorneys for Plaintiffs RIMMA BREEZE, COLIN BREEZE, and BREEZE VENTURES
MANAGEMENT, LLC
7
8 SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF SAN DIEGO
9
Case No. 37-2017-00031570-CU-NP-CTL
10 RIMMA BREEZE, an individual, COLIN
BREEZE, an individual, and BREEZE
PLAINTIFFS OPPOSITION TO
11 VENTURES MANAGEMENT, LLC
DEFENDANT MICHAEL SCULLY’S
12 Plaintiffs, MOTION TO STRIKE PLAINTIFFS’
COMPLAINT
13 v.
Date: January 26, 2018
14 THE EVANS SCHOOL, INC.; MARGARET Time: 1:30 p.m.
GALE BAER, an individual; GORDON, REES, Dept: C-72
15
SCULLY & MANSUKHANI, LLP; Judge: Hon. Timothy B. Taylor
16 MICHAEL D. “MILES” SCULLY, an
individual; and
17 DOES 1 THROUGH 25,

18 Defendants.
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PLAINTIFFS’ OPPOSITION TO DEFENDANT MICHAEL SCULLY’S MOTION TO STRIKE PLAINTIFFS’ COMPLAINT


1 TABLE OF CONTENTS

2 I. Introduction................................................................................................................................... 1
3
II. Factual Background ...................................................................................................................... 2
4
A. The Relationships Among the Defendants................................................................................ 2
5 B. The Origins of the Disputes Between Plaintiffs and the School Defendants. ........................... 2
6 C. Baer Prepares for Litigation ...................................................................................................... 3
D. The Initial Action: School Defendants Seek Injunction, Plaintiffs Remove ............................ 5
7
E. The Second Action: Defendants’ Malicious Behavior ............................................................. 6
8
III. Legal Standard .............................................................................................................................. 8
9
A. The Anti-SLAPP Statute ........................................................................................................... 8
10 B. The Cause of Action for Malicious Prosecution ....................................................................... 9
11 IV. Legal Argument ............................................................................................................................ 9

12 A. Defendants Concede that They Initiated and Maintained the Prior Action and that it was
Terminated in Plaintiffs’ Favor. ........................................................................................................ 9
13
B. The Underlying CFAA Claims Lacked Probable Cause .......................................................... 9
14 1. Probable Cause: A Question of Fact Based on Reasonable Belief, Tenability and Good
15 Faith 10
2. Defendants Concede that they Did Not Have Probable Cause ........................................... 10
16
3. Perjury/Fraud and Vacated Injunctions Don’t Support Probable Cause ............................. 12
17 4. Interim Adverse Judgment Rule Only Applies to Decisions on Merits .............................. 13
18 C. The Underlying CFAA Claims Were Initiated and Maintained With Malice and Caused
Damage to Plaintiffs........................................................................................................................ 14
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V. Conclusion .................................................................................................................................. 15
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PLAINTIFFS’ OPPOSITION TO DEFENDANT MICHAEL SCULLY’S MOTION TO STRIKE PLAINTIFFS’ COMPLAINT


1 TABLE OF AUTHORITIES

2 Cases
Albertson v. Raboff (1956) 46 Cal.2d 375 .................................................................................... 15, 16
3
Antounian v. Louis Vuitton Malletier (2010) 189 Cal.App.4th 438 ................................................... 13
4
Bell v Hood, 327 U.S. 678 .................................................................................................................. 11
5 Carpenter v. Sibley, 153 Cal. 215....................................................................................................... 13
6 Chen v. L.A. Truck Centers, LLC, 7 Cal. App. 5th 757 ...................................................................... 15
7 Clark v. Optical Coating Laboratory, Inc. (2008) 165 Cal.App.4th 150 ........................................... 14

8 Cristler v. Express Messenger Systems, Inc. (2009) 171 Cal.App.4th 72 .......................................... 14


Crowley v. Katleman (1994) 8 Cal.4th 666 .......................................................................................... 9
9
Dupont Merck Pharm. Co. v. Sup. Ct. (2000) 78 Cal.App.4th 562...................................................... 9
10
Equilon Enterprises, LLC v. Consumer Cause, Inc. (2002) 29 Cal.4th 53 .......................................... 9
11 Facebook, Inc. v. Power Ventures, Inc., 844 F.3d 1058............................................................... 10, 12
12 Federated Dep’t Stores, Inc. v. Moitie, 452 U.S. 394 ........................................................................ 11
13 Hart v. Darwish (2017) B270513 ....................................................................................................... 13

14 Jones v. Morehead, 68 US 155 ........................................................................................................... 12


Mann v. Quality Old Time Service, Inc. (2004) 120 Cal.App.4th 90 ................................................... 9
15
Navellier v. Sletten (2002) 29 Cal.4th 82 ............................................................................................. 9
16
Parrish et al. v. Latham & Watkins et al. (2017) S228277 ................................................................. 9
17 Plumley v. Mockett, 164 Cal. App. 4th 1031 ................................................................................ 12, 13
18 Roberts v. Sentry Life Insurance, 76 Cal.App.4th 375 ....................................................................... 13
19 Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863 ......................................................... 9, 15

20 Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260 ........................................................... 9


Vargas v. City of Salinas (2009) 46 Cal.4th 1 ...................................................................................... 9
21
Wilcox v. Sup. Ct. (1994) 27 Cal.App.4th 809 ..................................................................................... 9
22
Wilson v. Parker, Covert & Chidester, 28 Cal.4th 811 ................................................................ 13, 14
23 Yee v. Cheung, 220 Cal.App.4th 184.................................................................................................. 14
24 Zamos v. Stroud (2004) 32 Cal.4th 958 .......................................................................................... 9, 16
25
26 Statutes
18 USC § 1030(c)(4)(A)(i) ................................................................................................................... 8
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18 USC § 1030(c)(4)(A)(i)(I) ............................................................................................................. 10
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18 USC § 1030(e)(11) ........................................................................................................................ 10

PLAINTIFFS’ OPPOSITION TO DEFENDANT MICHAEL SCULLY’S MOTION TO STRIKE PLAINTIFFS’ COMPLAINT


1 18 USC § 1030(g) ........................................................................................................................... 8, 10

2 California Code of Civil Procedure § 426.30 ....................................................................................... 6


CCP § 1908(a) .................................................................................................................................... 11
3
CCP §1008 ......................................................................................................................................... 15
4
CCP §425.16 .................................................................................................................................... 8, 9
5 CCP §426.40 ........................................................................................................................................ 6
6 CCP §529(a). ........................................................................................................................................ 6
7 CCP §581c .......................................................................................................................................... 14

8 Federal Rule of Civil Procedure 12(b)(6) ....................................................................................... 6, 11


FRCP 41(b) ..................................................................................................................................... 6, 11
9
Treatises
10
7 Witkin, Cal.Proc.5th Judgm § 381 .................................................................................................. 14
11 Rest. Torts, § 676................................................................................................................................ 15
12 Constitutional Provisions
13 Ediberto Roman, “Your Honor What I Meant to State was . . .”: A Comparative Analysis of the

14 Judicial and Evidentiary Admission Doctrines as Applied to Counsel Statements in Pleadings,


Open Court, and Memoranda of Law, 22 Pepp. L. Rev. 981 ......................................................... 12
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PLAINTIFFS’ OPPOSITION TO DEFENDANT MICHAEL SCULLY’S MOTION TO STRIKE PLAINTIFFS’ COMPLAINT


1 I. INTRODUCTION
2 No amount of sleight of hand by Defendants can overcome the fact that they (i) lacked
probable cause to bring and maintain claims under the Computer Fraud and Abuse Act, 18 U.S.C. §
3
1030, et seq. (the “CFAA”) against each of the Plaintiffs or (ii) engaged in vexatious litigation
4 practices to pursue a claim that they conceded they did not have as early as October 2013.
5 Plaintiffs RIMMA BREEZE (“Mrs. Breeze“), COLIN BREEZE (“Mr. Breeze”) and BREEZE

6 VENTURES MANAGEMENT, LLC (“BVM”, and, collectively with Mr. and Mrs. Breeze,
“Plaintiffs”) sue Defendants MARGARET GALE BAER (“Baer”), THE EVANS SCHOOL, INC.
7
(“School” and, collectively with Baer, the “School Defendants”), MICHAEL D. “MILES” SCULLY
8 (“Scully”) and GORDON, REES, SCULLY & MANSUKHANI, LLP (“GR” and, collectively with
9 Scully, “Attorney Defendants”; the Attorney Defendants and School Defendants are collectively
referred to as “Defendants”) for malicious prosecution of their claims for violation of the CFAA.
10
Based on admissions made and actions taken by Defendants in two underlying actions, Plaintiffs
11 allege that the CFAA claims were fabricated by School Defendants, brought and maintained without
12 probable cause and prosecuted with malice by Defendants.

13 In the two actions underlying this suit, School Defendants colluded with Attorney Defendants
(i) to concoct situations that could give rise to a claim of violation of the CFAA against Plaintiffs, and
14
(ii) to bring baseless CFAA claims to force Plaintiffs to pay tuition they did not owe to School
15 Defendants. School Defendants engaged Scully, who owed a debt to the School Defendants stemming
16 from his son’s vandalism of School property. [Decl. of Rimma Breeze ¶ 8, Decl. of Colin Breeze ¶
7.] Scully had a personal relationship with another family at the School (who harbored ill will toward
17
Mrs. Breeze), and was willing to represent the School Defendants and solve two problems at once —
18 repaying Baer for his family’s vandalism and helping his friend rid the School of a rival.
19 In the summer of 2013, School Defendants, advised by Attorney Defendants, brought claims

20 against the Plaintiffs by filing suit (37-2013-00064840, the “Initial Action”) and by filing a cross-
complaint in a second action originally filed by Mrs. Breeze (37-2013-00067261, the “Second
21
Action”; collectively, the “Underlying Actions”). The claims brought in each of the Underlying
22 Actions were identical. Plaintiffs removed the Initial Action to the United States District Court based
23 on federal question jurisdiction, and once there moved to dismiss the CFAA claim for failure to state
a claim on which relief could be granted pursuant to Federal Rule of Civil Procedure 12(b)(6).
24
Defendants did not oppose this motion, which the District Court then granted on the merits. Despite
25 abandoning their CFAA claim in the Initial Action, Defendants continued to prosecute the same claim
26 in the Second Action up to and through trial, where Defendants failed to present credible evidence of

27 any violation of the CFAA and where Defendants even admitted they had no claim against Mr. Breeze
and BVM.
28

OPPOSITION TO DEFENDANT MICHAEL SCULLY’S MOTION TO STRIKE PLAINTIFF’S COMPLAINT

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1 Given those facts, Defendants fail to lift their burden to show the Underlying Actions were
2 filed and litigated with probable cause and without malice. As such, this Motion must be denied.
II. FACTUAL BACKGROUND
3
A. The Relationships Among the Defendants.
4 The School is a private, for-profit corporation owned by Baer and has operated continuously
5 for over 50 years. [A true and correct copy of relevant excerpts from the Reporter’s Transcript (“RT”)

6 Vol. 4 is attached to the Declaration of Yosef Peretz (“Peretz Dec.”) at ¶ 5, as Plaintiff’s Exhibit
(“PE”) 1, at 743:16-17.] Scully’s children attended the School until his middle child was expelled (in
7
about 2010) and his younger child graduated (in about 2014). [Decl. of R. Breeze ¶ 4.] Scully is a
8 partner of GR. GR employs Ian Williamson as a senior counsel (“Williamson”). Williamson’s two
9 children attended the School, and his spouse worked at the School for some time while their children
were enrolled. While the Williamson children were enrolled at Evans, the Williamson family received
10
over $80,000 in tuition assistance from the Evans School Foundation (the “Foundation”), a not-for-
11 profit entity that exists solely to offer tuition assistance for children to attend the School. [Decl. of R.
12 Breeze ¶ 5.]

13 Baer told Mrs. Breeze that Scully’s child vandalized the School in the fall of 2010, causing
the School over $50,000 in damage. [Decl. of R. Breeze ¶ 6] At her deposition taken in August 2014,
14
Baer admitted the vandalism but claimed she could not recall whether she filed a police report (what
15 Scully referred to as the “maybe police report” during Baer’s deposition). [A true and correct copy
16 of the relevant excerpts from the Deposition of Baer (“Baer Dep.”) is attached to Peretz Dec. at ¶ 8 as
PE 5, at 65:3-6.] Plaintiffs believe that Scully and GR represented Baer in her dispute with the
17
Plaintiffs pro bono, owing to Scully’s family’s debt to Baer, such that Baer did not carry the financial
18 cost of the Underlying Actions. Peretz Dec. at ¶ 27.
19 B. The Origins of the Disputes Between Plaintiffs and the School Defendants.

20 In April 2012, Baer invited Mrs. Breeze to provide IT consulting services. Baer offered to
compensate Mrs. Breeze, saying “I don’t expect you to do this for nothing. We will work something
21
out.” [RT Vol. 4, attached to Peretz Dec. as PE 2, at 772:13-15, Vol. 6 995:16-24 & 1003:4-11; A
22 true and correct copy of Trial Exhibit 109 is attached to Peretz Dec. as PE 9.] Mrs. Breeze then built
23 out an entire suite of IT systems, including Google Apps for Education, electronic newsletter, updated
website with increased functionality, classroom websites, summer camps website, online school store,
24
iPad deployment, AppleTV deployment, mobile device management solutions, etc. At Baer’s
25 direction, Mrs. Breeze served as IT director of the School. [A true and correct copy of the relevant
26 excerpts from RT Vol. 6 are attached to Peretz Dec. as PE 6, at1056:10-13; Trial Exhibits 210 and

27 211, which are attached to Peretz Decl. as PE 21 and 22, respectively.] Baer authorized Mrs. Breeze
to take responsibility for the School’s account with the domain registrar GoDaddy, Inc., to implement
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and manage a Google Apps for Education platform, to maintain the School’s e-newsletter via

OPPOSITION TO DEFENDANT MICHAEL SCULLY’S MOTION TO STRIKE PLAINTIFF’S COMPLAINT

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1 Mailchimp, to manage the School’s iPads, etc. [Decl. of R. Breeze ¶8; PE 9; A true and correct copy
2 of RT Vol. 6 is attached to Peretz Dec. as PE 3 at 999:4-25]. Mrs. Breeze served as super-administrator
of all of the School’s IT assets. [Decl. of R. Breeze ¶ 7; PE 2 at 673:21-23]
3
In April of 2013, Baer called Alexandra Rome (“Rome”), another parent at the School who
4 had waged a years-long campaign to harass the Breezes, to a meeting at her residence.1 Rome left the
5 meeting with Baer and scheduled a meeting with Sarah Dunford (“Dunford”). [A true and correct

6 copy of the relevant excerpts of Deposition of A. Rome is attached to the Peretz Dec. as PE 9, at
40:12-43:15, 47:20-23.] After meeting with Dunford, Rome compiled a dossier of Mrs. Breeze’s
7
comings and goings over the prior three plus years. Rome then worked with Dunford to deliver the
8 dossier to Baer by mid-May 2013. [Id. at 33:19-21.] Plaintiffs believe that the dossier including
9 disparaging information about them. Baer called Mrs. Breeze to a meeting on July 11, 2013 to discuss
plans for the coming school year. At the meeting, Baer told Mrs. Breeze that she would need to
10
change direction and could not consider exchanging tuition for IT services any longer. Also at that
11 meeting, Baer presented Mrs. Breeze with an invoice for over $50,000 in tuition for the period in
12 which Mrs. Breeze had been performing services to the School. Baer concluded the meeting by

13 suggesting that Mrs. Breeze and Mr. Breeze consider her invoice and that she would be in touch when
she returned from vacation. [PR 2 at 603:17-21.]
14
After the July 11, 2013 meeting, Baer requested assistance with some IT issues the week of
15 July 20, 2013. Mrs. Breeze responded and solved the problems. Other School staff also requested
16 assistance from Mrs. Breeze in July. Mrs. Breeze also solved those problems without issue. [PE 2 at
604:4-11; PE 3 at 347:13-358:26; Trial Exhibits 152, 153, 154, and 158 are attached to the Peretz
17
Dec. as PE 10-12 and 14, respectively.] In late July 2013, Baer and her agents secretly began to assert
18 control over Mrs. Breeze’s work product. [PE 1 at 353:4-354:23; Trial Exhibit 157 is attached to
19 Peretz Dec. as PE 13.] Baer, together with her agents, was preparing a trap with which to ensnare

20 Mrs. Breeze in a CFAA violation. Baer and her agents wrote to Mrs. Breeze’s service providers to
gain access to Mrs. Breeze’s work product and secure systems, telling the service providers that they
21
had not contacted Mrs. Breeze because they feared Mrs. Breeze would be hostile. [PE 5 at 302:25-
22 305:15 and 308:8-13; Decl. of R. Breeze ¶ 10.]
23 C. Baer Prepares for Litigation
On August 1, 2013, Baer wrote to Mrs. Breeze to tell her that she “did not anticipate that [the
24
School’s technology program and website maintenance] would be so expensive” and requesting the
25 “files and passwords this week.” [PE 1 at 360:5-8, Trial Exhibit161 is attached to Peretz Dec as PE
26 15.] Baer’s very request admits that Mrs. Breeze had authority to deliver files and passwords. On

27
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Mrs. Rome is also very close friends with Scully. The Scully and Rome families have even
traveled internationally together. [Decl. of R. Breeze ¶ 11.]

OPPOSITION TO DEFENDANT MICHAEL SCULLY’S MOTION TO STRIKE PLAINTIFF’S COMPLAINT

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1 August 2, 2013, Mr. and Mrs. Breeze called Baer at her office to respond to Baer’s email to Mrs.
2 Breeze. Baer did not return the Breezes’ call. [PE 1 at 360:9-18]
On August 3, 2013, Kelly Stimpson, an attorney who represents Baer and the School, called
3
Mr. Breeze to demand Mrs. Breeze’s work product and payment in full of the tuition invoice. Mr.
4 Breeze told Stimpson that Mrs. Breeze had no issue delivering the IT systems she maintained on
5 behalf of the School to another responsible party pursuant to industry standard protocols to ensure

6 that the systems as delivered were complete and free of defects. He proposed a straightforward
solution: both sides to agree that Baer owed Mrs. Breeze the benefit of her bargain and Mrs. Breeze
7
would assist in the transition of responsibility for the IT assets to new management pursuant to
8 industry standard protocols. Stimpson rejected this solution. Mr. Breeze then informed Stimpson that
9 since the School had engaged counsel, he would be doing the same for Mrs. Breeze. [Decl. of C.
Breeze ¶ 7.]
10
On August 4 and 5, 2013, Mr. Breeze introduced his counsel Yosef Peretz (“Peretz”) for the
11 Breeze by email to Stimpson. [Declaration of C. Breeze ¶ 7.] Mr. Peretz responded to Mr. Breeze’s
12 email, to introduce himself and request that Stimpson direct all communications regarding Mrs.

13 Breeze to his office. [Decl. of C. Breeze ¶¶ 7-8.] On August 6, 2013, Robert Pecora, new counsel
for the School, called Mr. Peretz. [Peretz Dec. at ¶ 28.] Mr. Peretz responded to Mr. Pecora that day
14
but did not hear from him again. [Id.]
15 In preparation for transitioning out of her role as IT director for the School, Mrs. Breeze
16 installed a freeware archiving solution to ensure that the systems she had built were complete and
failure free when she turned them over to her clients Baer and School. [PE 1 at 431:25-432:2; 433:26-
17
434:4; PE 2 at 676:3-677:1.]
18 At the end of that week, Mrs. Breeze as super-administrator of the School’s IT systems
19 received notice from GoDaddy of an attempt to gain control over the School’s GoDaddy account.

20 Mrs. Breeze repelled what she perceived as an attack and reset the password. The following day, the
same thing occurred. This time, Mrs. Breeze called GoDaddy and learned that the source of the
21
attempt to control the account was a School employee Gay Dixon (“Dixon”). Mrs. Breeze then
22 removed her personal credit card information from the account and stepped aside to allow Dixon to
23 control the account. [Decl. of R. Breeze ¶ 10.]
On August 9, 2013, in disregard of Rule 2-100 of the California Rules of Professional Ethics,
24
Williamson wrote to the Breezes at their home address informing them of an entire litany of
25 falsehoods, including that “trading work for tuition not ever agreed upon”, that Mrs. Breeze “took
26 control” of the School’s accounts with “GoogleDocs and WordPress”, and that Mrs. Breeze now holds

27 master passwords to the IT systems she had built and maintained to the exclusion of School staff.
Williamson requested the return of control over the IT assets by August 19, 2013, also tacitly
28

OPPOSITION TO DEFENDANT MICHAEL SCULLY’S MOTION TO STRIKE PLAINTIFF’S COMPLAINT

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1 admitting — as Baer had done — that Mrs. Breeze still had authority to control the assets). [Trial
2 Exhibit 165 is attached to Peretz Dec. as PE 16.]
According to testimony of the School Defendants’ expert witness, Dan Swanson (“Swanson”),
3
Baer and the School would have been able to exert exclusive control over each and every IT asset
4 Mrs. Breeze had developed or maintained on behalf of the School Defendants as soon as they had
5 control over the GoDaddy account in early August 2013. Swanson testified that the School

6 Defendants chose not to assert control over the IT assets based on advice of counsel. [A true and
correct copy of relevant excerpts from the Swanson Depo. are attached to Peretz Dec. as PE 7, at
7
132:16-133:23.] He also testified that he did not see any hacking or intrusions into the accounts by
8 any Plaintiff. [PE 7 at 153:14-17; PE 3 1172:27-1173:3]
9 Peretz responded to Williamson’s letter on August 14, 2013, well before Williamson’s August
19, 2013, deadline, refuting GR’s claims and providing documentation of Mrs. Breeze’s work on
10
behalf of Baer and School. [Trial Exhibit 172, attached to Peretz Dec. as PE 17.]
11 Williamson responded to Peretz on August 22, 2013, proposing “détente” and agreeing to
12 waive tuition in exchange for Mrs. Breeze’s assistance in transitioning the IT assets, a position that

13 Breezes had proposed to Stimpson on August 3, 2013. Then Williamson wrote a third letter on August
23, 2013 retracting his settlement offer and demanding assurances that Mrs. Breeze would refrain
14
from further interference. Peretz responded the same day providing the requested assurances. [Peretz
15 Dec. ¶ 29.]
16 Before filing the Initial Action, on August 26, 2013, Williamson wrote to School Defendants
and their expert witness: “At this point the purpose is to rattle their cage and make at least a bare-
17
bones case. We can add more detail and more complex claims later if this does not drive the outcome
18 we are looking for.” [Peretz Dec. ¶ 30.] On August 28, 2013, despite Peretz’s assurances, GR filed
19 the complaint in the Initial Action. [A true and correct copy of the Register of Actions in the Initial

20 Action is attached to Peretz Dec. as PE 23, at 1]


D. The Initial Action: School Defendants Seek Injunction, Plaintiffs Remove
21
On September 3, 2013, Defendants sought an injunction against Plaintiffs, claiming that
22 Plaintiffs could damage School Defendants’ IT systems. [PE 23 at 8-13]. Plaintiffs filed their answer
23 and removed the Initial Action to the United States District Court for the Southern District of
California based on federal question jurisdiction. [PE 23 at 18, 19]. On October 8, 2013, Plaintiffs
24
moved to dismiss the School Defendants’ CFAA claim for failure to state a claim on which relief
25 could be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). [A true and correct copy of
26 the Docket in the Initial Action (Federal Docket: 3:13-cv-02153) is attached to the Peretz Dec. as PE

27 24, at 6.] Defendants did not oppose Plaintiffs’ motion and the Federal Court dismissed CFAA claim
with prejudice pursuant to the interoperation of Federal Rule of Civil Procedure (“FRCP”) 12(b)(6)
28
and FRCP 41(b). [Id.at 9.]

OPPOSITION TO DEFENDANT MICHAEL SCULLY’S MOTION TO STRIKE PLAINTIFF’S COMPLAINT

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1 E. The Second Action: Defendants’ Malicious Behavior
2 Mrs. Breeze filed the Second Action alleging contract claims. [A true and correct copy of the
Register of Actions for the Section Action is attached to Peretz Dec. as PE 22, at 1.] Defendants cross-
3
complained in the Second Action alleging each of the claims that were then already pending in the
4 Initial Action in Federal Court. [Id., at 13.] Defendants cross-complained because Attorney
5 Defendants “believed the School’s claims were likely compulsory” pursuant to the California Code

6 of Civil Procedure § 426.30. [Decl. of I. Williamson ¶6] But see CCP §426.40(c) (clarifying that a
claim is not mandatory if “[a]t the time the action was commenced, the cause of action not pleaded
7
was the subject of another pending action”).
8 Defendants again sought an injunction on October 2, 2013. [PE 22, at 9] Mr. Peretz
9 corresponded with Williamson, pointing out that (i) the judge in the Initial Action had opted for a
briefing schedule for Defendants’ earlier ex parte, (ii) Defendants had not sought an injunction for
10
more than three weeks in Federal Court, and (iii) there was no need to decide Defendants’ ex parte
11 the following day. Peretz proposed a briefing schedule, which Williamson stipulated to that afternoon.
12 [Decl. of Y. Peretz ¶ 31.] Despite Williamson’s stipulation to the proposed briefing schedule,

13 Williamson appeared ex parte on October 3, 2013, and convinced the Court to grant the requested
injunction. [PE 22, at 11]. What Williamson did not do, however, was post a bond as required under
14
CCP §529(a). [CCP §529(a) (mandating that a judge, “[o]n granting an injunction, … require an
15 undertaking on the part of the applicant to the effect that the applicant will pay to the party
16 enjoined any damages … the party may sustain by reason of the injunction….”]
On October 7, 2013, Williamson wrote to Peretz to demand compliance with the Court’s
17
issued injunction. Peretz responded to GR to reject GR’s demands, complying in good faith with the
18 injunction while clarifying that Plaintiffs could not possibly provide that which they do not possess.
19 [Peretz Dec. ¶ 32.] Plaintiffs then moved to vacate the injunction, stating in declarations the reasons

20 why Defendants were not entitled to an injunction. [PE 22, at 27.] Defendants did not oppose
Plaintiffs’ motion and it was vacated on March 7, 2014. [PE 22, at 48.]
21
Plaintiffs served discovery on the School Defendants in March 2014. Williamson requested
22 additional time to produce responsive documents. Peretz consented and gave Defendants an additional
23 two weeks. However, Defendants refused to produce responses to Plaintiffs propounded discovery,
forcing Plaintiffs to repeatedly attempt to resolve the discover disputes created and perpetuated by
24
Defendants’ bad faith. Plaintiffs were forced to seek an order compelling Defendants to produce
25 responses. [PE 22, at 83.] Defendants thereafter certified to the court that they had complied with
26 their discovery obligations after producing a total of 29 pages of documents. [Peretz Dec. at ¶ 34.]

27 In response, the court ordered Defendants to produce discovery and sanctioned Defendants in excess
of $5,000. [PE 22, at 116, 171.]
28

OPPOSITION TO DEFENDANT MICHAEL SCULLY’S MOTION TO STRIKE PLAINTIFF’S COMPLAINT

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1 In May 2014, the Court ruled that the parties should merge the Second Action into the Initial
2 Action. [PE 22, at 71-73.] Defendants did no such thing, opting instead to act as defendants and
cross-complainants in the Second Action to keep their bogus CFAA claim alive a while longer.
3
Defendants knew that if they had merged the Underlying Actions they would have lost their CFAA
4 claim.
5 School Defendants included in their eventual discovery production a list of master passwords

6 to the School’s IT assets. When questioned about this during his deposition, Swanson admitted that
Defendants included the password list to entice Plaintiffs to use the passwords to access the School
7
IT systems without authorization. [PE 7, at 214:7-216:13.] Swanson also admitted that he had not
8 seen any evidence of Mrs. Breeze accessing a protected computer without authorization. [PE 7, at
9 153:14-17, PE 3, at 1172:27-1173:3.]
During depositions of the School Defendants and their witnesses, Mrs. Breeze received a text
10
request for IT assistance from her neighbor, La Jolla IP attorney and entrepreneur Merle Richman
11 (who had one child at the School and two children who had graduated the year before). Mr. Richman
12 asked Mrs. Breeze to assist his son to activate his School-issued iPad via a School-issued email

13 address. Mrs. Breeze declined to assist. [Decl. of R. Breeze ¶ 13.] On information and belief,
Defendants sought Mr. Richman’s assistance to ensnare Mrs. Breeze in a violation of the CFAA by
14
getting Mrs. Breeze to attempt to reset a School-issued iPad, which would require her to access a
15 protected computer without authorization.
16 Scully gave his opening statement in the trial of the Second Action on October 22, 2014.
During his opening statement, Scully said: “The only reason Mr. Breeze is in the case is because he
17
is the one who signed the contract to pay the tuition.” (emphasis added) [PE 1, at 265:25-27.]
18 Defendants never attempted to establish an agency relationship between Mrs. Breeze and Breeze
19 Ventures Management, LLC.2 Scully did not clarify what responsibility BVM had for any purported

20 violation of the CFAA. In short, Scully admitted that he had no claim against Mr. Breeze or BVM
for any violation of the CFAA, and admitted that he had no claim against BVM for breach of contract
21
or conversion.
22 During trial, Scully requested a meeting with Peretz. During the meeting, Scully threatened
23 Peretz and Plaintiffs, saying that if Plaintiffs did not drop their claims instantly against School
Defendants, Defendants would ruin Plaintiffs’ reputations. [Peretz Dec. ¶ 35]
24
Williamson misled this Court when he offered the US Attorney’s jury instructions in relation
25 to the CFAA claim and the form of special jury verdict. Peretz and Plaintiffs identified this issue to
26 Williamson and to this Court, pointing out that the instructions Williamson had drafted were for

27
28
2
Scully did say, in his opening statement, that “Mrs. Breeze through Breeze Ventures LLC [sic]
with its credit card, purchases . . .” [RT Vol. 3 2682-3]; but Mrs. Breeze could have done no such
thing because the archiving solution installed was freeware.

OPPOSITION TO DEFENDANT MICHAEL SCULLY’S MOTION TO STRIKE PLAINTIFF’S COMPLAINT

7
1 federal criminal prosecutions and were not applicable to civil claims under 18 USC § 1030(g)
2 (referring to 18 USC § 1030(c)(4)(A)(i)). [RT Vol. 7 1251:7-1253:11]. The language Williamson
demanded be included in the special jury verdict, “Did [Plaintiffs] access more than 10 computer
3
systems in the course of a year?” is exclusively derived from subclause (VI) of 18 USC §
4 1030(c)(4)(A)(i) and is expressly excluded from civil claims per 18 USC § 1030(g): “A civil action
5 for a violation of this section may be brought only if the conduct involves 1 of the factors set forth in

6 subclauses  (I), (II), (III), (IV), or (V) of subsection (c)(4)(A)(i).”


Defendants concocted a magical $5,000 payment to School employee Dixon in order to show
7
that they had suffered sufficient “loss” as defined at 18 U.S.C. §1030(e)(11). Neither Baer nor Dixon
8 mentioned this payment during their depositions, and Baer did not disclose the $5,000 payment to
9 Dixon in her discovery responses (submitted in September 2014, a month before trial, per order of
Judge Meyer). [PE 22, at116] During her initial direct and cross-examination, Baer did not disclose
10
that she had paid Dixon anything. When Dixon testified on the last day of trial, she claimed during
11 direct examination that Baer had paid her an extra $5,000. [RT Vol. 6 1095:3-7] Baer then claimed
12 on redirect and re-cross-examination that she paid Dixon the $5,000 in July 2014, four months after

13 Plaintiffs had served discovery and two months before School Defendants responded to Plaintiffs’
discovery requests. [PE 4, at 1283:18-1290:16.]
14
III. LEGAL STANDARD
15 A. The Anti-SLAPP Statute
16 The Anti-SLAPP Statute discourages lawsuits brought primarily to chill a valid exercise of
the constitutional rights to freedom of speech and provides defendants-movants with powerful
17
sanctions. CCP §425.16(a),(b)(1),(c),(g). But the unintended consequence of the Anti-SLAPP Statute
18 is that it is used as a weapon to silence consumers and private individuals. Dupont Merck Pharm. Co.
19 v. Sup. Ct. (2000) 78 Cal.App.4th 562. The California Supreme Court has cautioned that the Anti-

20 SLAPP Statute should not “become a weapon to chill the exercise of protected petitioning activity by
people with legitimate grievances.” Equilon Enterprises, LLC v. Consumer Cause, Inc. (2002) 29
21
Cal.4th 53, 65.
22 An Anti-SLAPP motion requires a two-step process. If, first, the defendant shows that the
23 cause of action arises from her act in furtherance of a right of petition or free speech in connection
with a public issue, then the plaintiff must show that there is a “probability that the plaintiff will
24
prevail on the claim[s].” Navellier v. Sletten (2002) 29 Cal.4th 82, 88. CCP § 425.16(a),(b)(1) In
25 deciding the motion, the Court does not weigh the credibility or comparative probative strength of
26 competing evidence, rather the Court considers if the evidence substantiates a legally sufficient claim

27 that, if credited by the trier of fact, would support a verdict in the Plaintiff’s favor at trial. CCP §
425.16(b)(2); Wilcox v. Sup. Ct. (1994) 27 Cal.App.4th 809, 823. Vargas v. City of Salinas (2009) 46
28
Cal.4th 1, 20. A plaintiff meets her burden to show a probability of prevailing on a cause of action if

OPPOSITION TO DEFENDANT MICHAEL SCULLY’S MOTION TO STRIKE PLAINTIFF’S COMPLAINT

8
1 any part of a claim has merit. Mann v. Quality Old Time Service, Inc. (2004) 120 Cal.App.4th 90, 100
2 and 106.
B. The Cause of Action for Malicious Prosecution
3
“‘[M]alicious prosecution ... in California ... consists of three elements. The underlying action
4 must have been: (i) initiated or maintained by, or at the direction of, the defendant, and pursued to a
5 legal termination in favor of the malicious prosecution plaintiff;
(ii) initiated or maintained without

6 probable cause; and (iii) initiated or maintained with malice.” (emphasis added) Parrish et al. v.
Latham & Watkins et al. (2017) S228277, at p. 7. (citing Sheldon Appel Co. v. Albert & Oliker (1989)
7
47 Cal.3d 863, 871; Zamos v. Stroud (2004) 32 Cal.4th 958, 970; and Soukup v. Law Offices of Herbert
8 Hafif (2006) 39 Cal.4th 260, 297). “A malicious prosecution claim will also lie if the defendant
9 brought ‘an action charging multiple grounds of liability when some but not all of those grounds were
asserted with malice and without probable cause.’” Parrish, note 1 (citing Crowley v. Katleman
10
(1994) 8 Cal.4th 666, 671).
11 “Malicious prosecution . . . includes continuing to prosecute a lawsuit discovered to lack
12 probable cause.” Zamos, 32 Cal.4th at 969. “Malicious prosecution ‘is actionable because it harms

13 the individual against whom the claim is made and also because it threatens the efficient
administration of justice.’. . . Continuing an action one discovers to be baseless harms the defendant
14
and burdens the court system just as much as initiating an action known to be baseless from the
15 outset.” Ibid, internal citations omitted.
16 IV. LEGAL ARGUMENT
A. Defendants Concede that They Initiated and Maintained the Prior Action and that
17
it was Terminated in Plaintiffs’ Favor.
18 Defendants admit that they brought the CFAA claims in the Underlying Actions, and that they
19 lost on their CFAA cause of action in the Second Action. [Anti-SLAPP Motion, 4:21-23.] Defendants

20 also admit that they did not oppose Plaintiffs’ motion to dismiss the CFAA cause of action in the
Initial Action. [Id., 8:10-11.] The motion to dismiss was granted by the District Court with prejudice
21
on November 8, 2013. [Initial Action (Federal Court) ROA 9.] Pursuant to FRCP Rule 41(b), a
22 dismissal of a cause of action is with prejudice unless qualified. FRCP 41(b). The District Court did
23 not qualify its dismissal when it granted Plaintiffs’ motion to dismiss under FRCP Rule 12(b)(6).
Therefore the CFAA claims in both the Initial Action and the Second Action were terminated on the
24
merits in Plaintiffs’ favor.
25 B. The Underlying CFAA Claims Lacked Probable Cause
26 Defendants brought three types of claims for violation of the CFAA in the Underlying

27 Actions. [Initial Action ROA 1; Second Action ROA 66.] For each of School Defendants’ CFAA
theories, they must also show “loss” (as defined at 18 USC § 1030(e)(11)) in excess of $5,000 (18
28
USC § 1030(g), referring to 18 USC § 1030(c)(4)(A)(i)(I)).

OPPOSITION TO DEFENDANT MICHAEL SCULLY’S MOTION TO STRIKE PLAINTIFF’S COMPLAINT

9
1 To make a civil case for a violation of the CFAA, a party must first establish that the defendant
2 (or cross-defendant) actually accessed a protected computer. As IT director for the School and super-
admin for the School IT assets, Mrs. Breeze accessed protected computers as part of her duties. But
3
Defendants did not present evidence of any sort that Mr. Breeze or BVM, a single-member LLC
4 owned by Mr. Breeze, accessed a protected computer. The CFAA claims against Mr. Breeze and
5 BVM therefore would never be successful.

6 Assuming a party can establish that the defendant/cross-defendant accessed a protected


computer, that party must also establish a lack of authorization. “[A] defendant can run afoul of the
7
CFAA when he or she has no permission to access a computer or when such permission has been
8 revoked explicitly.” Facebook, Inc. v. Power Ventures, Inc., 844 F.3d 1058 (2016), 1067. School
9 Defendants engaged Mrs. Breeze as director of technology but never explicitly revoked Mrs. Breeze’s
authority to manage the School’s IT assets; no such revocation exists.
10
In the absence of a revocation of authorization, the CFAA claims against Mrs. Breeze also
11 fail and there is no need to look further at whether any Plaintiff caused damage, or loss, or obtained a
12 thing of value by fraud. That said, Defendants only produced evidence of the $5,000 loss required per

13 18 USC 1030(g) at the close of trial, despite Judge Meyer’s order limiting admissible evidence to that
which was produced in a timely fashion and in violation of this Court’s order on Plaintiffs’ motion in
14
limine 1. [Second Action ROA 116, 171.]
15 1. Probable Cause: A Question of Fact Based on Reasonable Belief, Tenability
16 and Good Faith
Plaintiffs’ arguments about whether probable cause is always a question of law, whether
17
Defendants possessed a reasonable belief held in good faith, and whether Defendants were able to
18 show legal and factual tenability for their CFAA claims are set forth in Plaintiffs’ Opposition to
19 Defendants’ Motion to Join Defendant Michael D. Scully’s Motion To Strike Plaintiffs’ Complaint

20 (the “Joinder Opposition”) at Section IV.B and are incorporated herein by reference.
2. Defendants Concede that they Did Not Have Probable Cause
21
Defendants conceded in the Initial Action that they did not have a claim on which relief could
22 be granted. [Initial Action (Federal Court) ROA 13.] Defendants did not oppose Plaintiffs motion to
23 dismiss the CFAA cause of action for failure to state a claim on which relief could be granted pursuant
to FRCP 12(b)(6), which the Federal Court granted.. Per FRCP 41(b), a dismissal is on the merits
24
unless it is qualified. The Federal Court did not qualify its dismissal. Therefore, the Federal Court’s
25 dismissal was with prejudice and became final on November 8, 2013. “[T]he failure to state a proper
26 cause of action calls for a judgment on the merits, and not for a dismissal for want of jurisdiction.”

27 Bell v Hood, 327 U.S. 678 (1946). “The dismissal for failure to state a claim under Federal Rule of
Civil Procedure 12(b)(6) is a ‘judgment on the merits.’” Federated Dep’t Stores, Inc. v. Moitie, 452
28
U.S. 394, 399 n.3.

OPPOSITION TO DEFENDANT MICHAEL SCULLY’S MOTION TO STRIKE PLAINTIFF’S COMPLAINT

10
1 CCP §1908(a) clarifies the prejudicial effect of judgments and orders: “the judgment or order
2 is, in respect to the matter directly adjudged, conclusive between the parties and their successors in
interest by title subsequent to the commencement of the action or special proceeding, litigating for
3
the same thing under the same title and in the same capacity, provided they have notice, actual or
4 constructive, of the pendency of the action or proceeding.” CCP § 1908(a). Since Defendants
5 conceded their CFAA claim in the Initial Action, they are prevented from re-litigating that CFAA

6 claim in a subsequent action per CCP § 1908(a).


Defendants also conceded no probable cause in the Second Action. Plaintiffs sought discovery
7
against the School Defendants in March 2014. [Decl. of Y. Peretz ¶ 33] Responses were due from the
8 Defendants in April. In their special interrogatories, Plaintiffs specifically requested School
9 Defendants to identify documents reflecting an express revocation of authority to manage the School’s
IT assets as well as damages suffered. [Special Interrogatory (“SPROG”) 91, RT Vol. 7 1289:21-
10
1290:7.]
11 Specifically, SPROG 91 requested Defendants to “IDENTIFY all DOCUMENTS that support
12 YOUR claim that CROSS-DEFENDANTS did not have authorization to access or administer the IT

13 ASSETS.” In their response, School Defendants admitted that “[f]ollowing the time period where
Ms. BREEZE was advised that the school was going in another direction and she was asked to turn
14
over passwords and hardware, it seems clear she no longer had authority to administer any IT ASSETS
15 on the school’s behalf.” (emphasis added) [Response to SPROG 91.]
16 SPROG 93 requested School Defendants to identify documents pursuant to which they
notified Mrs. Breeze that she was no longer authorized to access the School’s Google account. School
17
Defendants responded: “[f]ollowing the time period where Ms. BREEZE was advised that the school
18 was going in another direction and she was asked to turn over passwords and hardware, it seems clear
19 she no longer had authority to administer any IT ASSETS on the school’s behalf.” (Emphasis added).

20 Defendants hang their hats for lack of authorization on something that “seems clear” but really was
not, and in any event was insufficient per Facebook.
21
SPROG 95 requested documents pursuant to which School Defendants notified Mrs. Breeze
22 that she was no longer authorized to access the School’s GoDaddy account. School Defendants
23 responded that they were “not . . . aware that such statements were made nor that such documents
exist.” Per the standard established under Facebook, authorization, once given, cannot be rescinded
24
other than by explicit language.
25 At trial, Defendants went even further in conceding no probable cause. In his opening
26 statement, Scully admitted that the School Defendants did not have CFAA claims against Mr. Breeze

27 or BVM. [RT Vol. 3 265:25-27.] The United States Supreme Court has ruled that, despite evidence
to the contrary, a client is bound by his counsel’s statements. Jones v. Morehead, 68 US 155, 165
28
(1835); See, e.g. Ediberto Roman, “Your Honor What I Meant to State was . . .”: A Comparative

OPPOSITION TO DEFENDANT MICHAEL SCULLY’S MOTION TO STRIKE PLAINTIFF’S COMPLAINT

11
1 Analysis of the Judicial and Evidentiary Admission Doctrines as Applied to Counsel Statements in
2 Pleadings, Open Court, and Memoranda of Law, 22 Pepp. L. Rev. 981.
Defendants regularly and repeatedly admitted that (i) Mrs. Breeze was the School’s IT director
3
or director of technology [RT Vol. 6 1056:10-13, Trial Exhibits 210, 211], (ii) Mrs. Breeze established
4 most of the School’s IT assets [RT Vol 3. 343:24-344:22], (iii) Mrs. Breeze managed all of the
5 School’s IT assets with express permission by School Defendants [RT Vol. 6 1038:22-28], (iv) School

6 Defendants never explicitly rescinded Mrs. Breeze’s authorization to manage the School’s IT assets
as required under Facebook [RT Vol. 6 1038:26-28, Baer Depo. 140:9-12], and (v) Defendants never
7
showed that Mr. Breeze or BVM accessed any of School’s protected computer systems without
8 authorization [RT Vol. 4 617:9-622:14, which is the entirety of Scully’s cross-examination of Mr.
9 Breeze].
3. Perjury/Fraud and Vacated Injunctions Do not Support Probable Cause
10
Defendants argue that preliminary injunction issued in the Second Action established probable
11 cause to bring the CFAA claim against Plaintiffs. [Decl. IAW, Decl. MDS]. “With no evidence that
12 Defendants obtained the preliminary injunction based on fraud or perjury, Judge Meyer’s finding

13 supports Defendants’ position that they had objectively tenable grounds to bring the CFAA claim”
(emphasis added). [Defendants’ Motion p. 12:20-22.] Defendants concede that an injunction issued
14
on the basis of perjury or fraud cannot establish probable cause.
15 In Plumley v. Mockett, 164 Cal. App. 4th 1031, the Court of Appeals clarified the
16 fraud/perjury exceptions to the “interim adverse judgment” rule: “[T]he ‘interim adverse judgment’
rule … is subject to an exception where the underlying victory was obtained by fraud or perjury. Our
17
Supreme Court has explained: ‘[I]f a man has procured an unjust judgment by the knowing use of
18 false and perjured testimony, he has perpetrated a great private wrong against his adversary . . . . [T]he
19 general rule now is, “that if the declaration or complaint shows a conviction of the plaintiff, yet if it

20 be averred that the conviction was procured by fraud, perjury or subornation of perjury, or other unfair
conduct on the part of the defendant, the presumption of probable cause is effectually rebutted.”
21
[Citations.]’” Id. at 1053, citing Carpenter v. Sibley, 153 Cal. 215, 218). “A ruling that qualifies as an
22 interim adverse judgment in favor of a prior plaintiff will not be treated as evidence of the legal
23 tenability of its prior lawsuit if that ruling would have been different ‘but for’ the prior plaintiff's
‘knowing use of false and perjured testimony.’” Hart v. Darwish (2017) B270513 (citing Roberts v.
24
Sentry Life Insurance, 76 Cal.App.4th 375, at p. 384); Plumley, supra, 164 Cal.App.4th at p. 1053;
25 Antounian v. Louis Vuitton Malletier (2010) 189 Cal.App.4th 438, 452-453.) The California Supreme
26 Court alluded to this line of reasoning in Wilson v. Parker, Covert & Chidester, 28 Cal.4th 811:

27 “Plaintiffs in the present malicious prosecution action have not attempted to show that that ruling was
obtained by fraud or perjured testimony.” Id. at 826
28

OPPOSITION TO DEFENDANT MICHAEL SCULLY’S MOTION TO STRIKE PLAINTIFF’S COMPLAINT

12
1 Baer and her expert witness Swanson filed declarations in support of Baer’s application for
2 an injunction in the Second Action. [Second Action ROA 9.] These declarations included pages of
statements of “facts”, affirmed under penalty of perjury to be their personal knowledge. However,
3
Baer and Swanson both admitted during depositions that they actually had no personal knowledge of
4 many of the most relevant statements they included in their declarations. [Baer Depo. 168:12-170:15,
5 169:24-170:20, 179:10-18 (Baer had no personal knowledge of (i) Mrs. Breeze fighting the School’s

6 efforts to control the IT assets, (ii) who had control over iPads, (iii) Mrs. Breeze receiving notices of
password changes or quarantining intrusions, and (iv) why the School website was unavailable);
7
Swanson Depo. 244:2-9, 255:4-8, 255:20-256:15, 258:14-17, 259:6-10, 262:1-16 (Swanson had no
8 personal knowledge of (i) why Mrs. Breeze was working with the School, (ii) the circumstances under
9 which Mrs. Breeze relocated the website server to 6Sync, (iii) Mrs. Breeze fighting the School’s
efforts to control the IT assets or the Google Apps for Education account, (iv) quarantining intrusions,
10
(v) issues relating to the GoDaddy account)]
11 The injunction Baer sought was directly related to the harm that Baer and Swanson
12 complained of in their perjured declarations. [Second Action ROA 9] No prejudicial effect can thus

13 attributed to the issuance of an injunction in the Second Action. Wilson, supra 28 Cal.4th at 825. Baer
included in her initial declaration in support of her application for an injunction a statement that “[a]t
14
the conclusion of [her meeting with Mrs. Breeze, she] sent a follow-up e-mail. A true and correct copy
15 of that e-mail is attached as Exhibit B. After I sent that e-mail, it should have been unequivocally clear
16 that MS. BREEZE would no longer have any responsibility for, or authority over, our information
technology systems.” [Peretz Dec ¶ 36.] No such e-mail ever issued from Baer or School. [Id.] In
17
her application for her injunction, Baer claimed that “MRS. BREEZE’s conduct has led Ms. BAER
18 to fear for the reputation of the school, her own safety, and the safety of her staff and students.” No
19 evidence were presented in that regard. [Id.]

20 4. Interim Adverse Judgment Rule Only Applies to Decisions on Merits


Defendants argue that this Court’s denial of Plaintiffs’ motions in limine and nonsuit before
21
the presentation of evidence serves to support Defendants’ probable cause per the interim adverse
22 judgment rule. They are wrong.
23 First, a denial of a nonsuit motion establishes probable cause only if it based on an evaluation
of the evidence. Wilson, supra, 28 Cal.4th at 824; Clark v. Optical Coating Laboratory, Inc. (2008)
24
165 Cal.App.4th 150, 183-184. Defendants concede this point when arguing that Scully’s “remark in
25 opening statement, which is not evidence at trial, did not suggest Defendants had no tenable theories
26 against Colin for the CFAA claim.” [Def Motion 13:8-10.] Contrast this position with Defendants’

27 perspective on this Court’s denial of Plaintiffs’ non-suit motion following Defendants’ opening
statement: “there was enough set forth … [in the defense opening statement] to justify the jury hearing
28

OPPOSITION TO DEFENDANT MICHAEL SCULLY’S MOTION TO STRIKE PLAINTIFF’S COMPLAINT

13
1 the evidence on the claim.” [Motion 13:22-23 (Defendants omit the emphasized bracketed language,
2 which was contained in this Court’s order).]
The Second Action is distinguishable from Yee v. Cheung, 220 Cal.App.4th 184. In its bench
3
order in Yee, this Court ruled “‘[A]t this point, the court is supposed to give plaintiff the benefit of the
4 doubt on the evidence. And viewing the evidence in the light most favorable, I think there’s enough
5 there to let it go past this point.’” [Id., at 191, emphasis added] In its minute order, this Court wrote:

6 “‘[a]t this point, the Court finds that there is enough evidence to let the case go forward. The Motion
for Nonsuit is denied.’” [Id., at note 4.] Yee stands for the premise that “the denial of a nonsuit motion
7
[brought after the close of the plaintiff’s case] and a subsequent plaintiff’s jury verdict has been found
8 sufficient to constitute probable cause.” Id at 200-201. By contrast, Plaintiffs’ nonsuit motion in the
9 Second Action came after opening statements but before the presentation of evidence [RT Vol. 3
302:25-303:13]. The Court could not rule on the merits in deciding the nonsuit motion because the
10
motion was made before the evidence presentation at trial. This is consistent with the general
11 statement of the law: “Where the nonsuit is granted on a technical ground not involving the merits,
12 the general test of res judicata applies;  i.e., the judgment of nonsuit is not res judicata.” 7 Witkin,

13 Cal.Proc.5th Judgm § 381.) Cf. CCP §581c(c)


Second, a motion in limine by definition is decided on technical grounds and not on the merits,
14
thus it cannot establish probable cause. “In limine rulings are not binding; they are subject to
15 reconsideration upon full information at trial.” Cristler v. Express Messenger Systems, Inc. (2009)
16 171 Cal.App.4th 72, 90, fn. 6. Because by their very nature, motions in limine are subject to
reconsideration at any time prior to the submission of the case and are not subject to the formal
17
constraints of a motion under CCP § 1008. Chen v. L.A. Truck Centers, LLC, 7 Cal. App. 5th 757,
18 768; CCP §1008. Therefore they cannot form the basis of an interim adverse judgment. This Court
19 even clarified that the denied motion in limine was an untimely motion for summary judgment, not a

20 correct motion in limine. [Second Action ROA 171.]


C. The Underlying CFAA Claims Were Initiated and Maintained With Malice and
21
Caused Damage to Plaintiffs
22 Defendants claim that Plaintiffs cannot establish the element of malice. [Motion p. 7.] Malice
23 is a question of fact. Sheldon Appel, 47 Cal.3d at 874. Per Albertson v. Raboff (1956) 46 Cal.2d 375,
malice “is not limited to actual hostility or ill will toward plaintiff but exists when the proceedings are
24
instituted primarily for an improper purpose.” Id., at 383. Examples of such an “improper purpose”
25 include 1) when the initiator does not believe the claim to be valid; 2) claims are initiated because of
26 ill will; and 3) “the proceedings are initiated solely for the purpose of depriving the person against

27 whom they are initiated of a beneficial use of his property.” Id., at 383 (citing Rest. Torts, § 676).
Plaintiffs have produced evidence to show that each of these improper purposes is present in
28
the case at hand. First, Defendants admitted that the Underlying Actions were filed in bad faith and

OPPOSITION TO DEFENDANT MICHAEL SCULLY’S MOTION TO STRIKE PLAINTIFF’S COMPLAINT

14
1 only to “rattle [Plaintiffs’] cage” and that is why Attorney Defendants filed a “bare bones” complaint.
2 [Peretz Dec. ¶ 30.] Second, as described in the Joinder Opposition Section IV.B and incorporated
herein, there is a triable issue of fact as to whether Defendants reasonably believed their CFAA claims
3
were valid. Third, Plaintiffs have produced ample evidence that the CFAA claims were motivated by
4 ill will because the claims were manufactured to pressure Plaintiffs to pay to Baer a debt she admitted
5 was not owed and because of personal animus by Scully. [RT Vol. 6 957:10-14, 996:13-22, Trial

6 Exhibit 165.] Moreover, this ill will is evidenced by School Defendants’ attempting to gain control
over Mrs. Breeze’s work product before ever asking her to assist in transitioning them; lawyering up
7
before attempting to transition responsibility for the School IT assets; asserting repeatedly that Baer
8 and Breeze had never discussed offsetting tuition in lieu of IT consulting services; harassing Breezes
9 at their next school; filing the Initial Action despite receiving assurances from Plaintiffs’ counsel that
Plaintiffs had not engaged in criminal conduct; forum shopping the CFAA claims once the Initial
10
Action was removed to Federal Court; repeatedly seeking injunctions; obtaining an injunction on the
11 basis of perjured declarations and despite stipulating to a briefing schedule; failing to post a bond at
12 application for injunction; failing to oppose Plaintiffs’ motion to dismiss the CFAA cause of action

13 in Federal Court and nonetheless maintaining the same cause of action in the Second Action; engaging
in wholesale abuse of the discovery process including certifying complete responses after producing
14
79 pages (for which Defendants were sanctioned over $5,000); amending their cross-complaint to
15 defeat Plaintiffs’ demurrer to the second CFAA claim by adding a cause of action for fraud (which
16 Defendants capitulated on before trial); concocting “evidence” of a payment to an employee to
establish “loss” under the CFAA statute; threatening Plaintiffs and their counsel; misleading the Court
17
as to the standards for liability of the CFAA claim; and refusing Judge Meyer’s admonition to merge
18 the Second Action into the First Action (which necessarily would have forced Defendants to
19 acknowledge that their CFAA claim was res judicata). Third, Defendants were willing to use the

20 CFAA causes of action and the Underlying Actions as a means of diverting attention from (a) School’s
and Baer’s ongoing scheme of tax avoidance pursuant to which Baer compensated her service
21
providers in the form of reduced tuition rather than wages (per her admission, to reduce employment
22 taxes payable), (b) Scully’s son’s vandalism of the School, and even (c) Defendants’ collusion to ruin
23 the Breeze’ reputations and remove them from the School.
As such, Plaintiffs have provided ample evidence that the CFAA claims were brought with an
24
“improper purpose” under Albertson, supra.
25 V. CONCLUSION
26 Based on the above, Scully’s Motion should be denied.

27
//
28
//

OPPOSITION TO DEFENDANT MICHAEL SCULLY’S MOTION TO STRIKE PLAINTIFF’S COMPLAINT

15
1
2 Dated: January 11, 2018 PERETZ & ASSOCIATES
3
4 By: _________________
Yosef Peretz
5 Attorneys for Plaintiff RIMMA BREEZE and Cross-
Defendants RIMMA BREEZE, COLIN BREEZE
6 AND BREEZE VENTURES MANAGEMENT,
LLC
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

OPPOSITION TO DEFENDANT MICHAEL SCULLY’S MOTION TO STRIKE PLAINTIFF’S COMPLAINT

16