Opinion
B224202
10-04-2011
SHERRY GUNTHER, Cross-defendant and Appellant, v. KD LEARNING, INC., Cross-complainant and Respondent.
Nick A. Alden for Cross-defendant and Appellant. Affeld Grivakes Zucker, David W. Affeld and Christopher Grivakes for Cross-complainant and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Los Angeles County Super. Ct. No. BC419247)
APPEAL from a judgment of the Superior Court of Los Angeles County. Kenneth R. Freeman, Judge. Affirmed.
Nick A. Alden for Cross-defendant and Appellant.
Affeld Grivakes Zucker, David W. Affeld and Christopher Grivakes for Cross-complainant and Respondent.
On the eve of closing a deal with a major investor, a disgruntled manager employed by respondent KD Learning, Inc. (KDL)—appellant Sherry Gunther— telephoned the investor and disparaged KDL's management practices. As a result of Gunther's call, the investor backed out of the deal. KDL sued Gunther for interfering with a prospective economic advantage and breach of fiduciary duty. Gunther moved to strike the pleading as a Strategic Lawsuit Against Public Participation (SLAPP). (Code Civ. Proc., § 425.16.) We affirm the trial court's denial of Gunther's motion. Gunther was not exercising her right to free speech "in connection with a public issue or an issue of public interest" when she telephoned a prospective investor to air her private grievances against her own employer. (§ 425.16, subd. (e)(4).)
Undesignated statutory references in this opinion are to the Code of Civil Procedure.
FACTS
None of the facts stated in this opinion may be treated as law of the case, for purposes of res judicata. (See All One God Faith, Inc. v. Organic & Sustainable Industry Standards, Inc. (2010) 183 Cal.App.4th 1186, 1199 [a court "does not make factual findings in ruling on an anti-SLAPP motion."].)
Allegations in the Cross-Complaint
KDL operated a children's Internet site called ZooKazoo. Sherry Gunther was a principal in KDL, and received stock in the company pursuant to a "Founder Stock Purchase Agreement." KDL hired Gunther "for the purpose of participating in brainstorming sessions and generating Works . . . regarding the Company's online community/game project." Gunther supervised KDL's art department in Burbank. Other KDL departments included an engineering/programming team in Seattle, a game designer in Palo Alto, and the company's executive management in Larkspur. Gunther interacted with other KDL departments, but was not involved in engineering, programming, game development, investor relations, accounting, safety monitoring, or customer support.
In early 2008, KDL was low on operating capital, and instituted discussions with Time Warner for a capital infusion. By August 2008, KDL had reached an agreement in principle, under which Time Warner would invest $3 million in return for KDL stock. The agreement was set forth in a written term sheet, and final documentation was being prepared. KDL and Time Warner expected the transaction to close during the week of August 25-29, and preparations were made to wire transfer the investment funds to KDL.
Gunther was aware of KDL's need for operating capital, and knew about its pending transaction with Time Warner. KDL instructed its employees that no one except authorized personnel was allowed to communicate with Time Warner, so that KDL could speak with a single voice. Gunther was directly told not to speak with Time Warner, as it was not within her scope of employment as "chief creative officer" at KDL.
On August 21 or 22, Gunther telephoned Time Warner. She gave "misleading and disparaging information about KD Learning, its principals, and the conduct of its business, and conveyed that significant disagreement existed between senior management of KD Learning regarding its business operations and decisions. Gunther discouraged Time Warner from going through with the Transaction."
On August 22, Time Warner notified KDL that it would not make the $3 million investment. The reason, according to a Time Warner representative, was that a call came from KDL's "senior management team, a core team member, conveying that the management team of KD Learning was not working effectively and was not cohesive." The Time Warner representative described the call as "malicious" and was "stunned that the caller would call Time Warner instead of working out the issues internally within KD Learning."
It is reasonably probable that Time Warner would have invested in KDL, had Gunther not interfered. Gunther "sabotaged the Transaction because she intended to set up a business entity to compete in the same line of business with KD Learning, and sought to cripple KD Learning as a rival. Further, Gunther intended to try to acquire the intellectual property of KD Learning for her competing business entity." Based on Gunther's actions, KDL sued Gunther for negligent and intentional interference with prospective economic advantage and breach of fiduciary duty.
Gunther's Motion to Strike KDL's Pleading
Gunther moved to strike KDL's pleading as a SLAPP. She points to KDL's allegation that she gave "misleading and disparaging information" to Time Warner, in which she disclosed "that significant disagreement existed between senior management of KD Learning regarding its business operations and decisions." Gunther maintains that the information she conveyed to Time Warner is constitutionally protected free speech.
In a declaration, Gunther describes her involvement with KDL and ZooKazoo, after previously working at media companies such as Time Warner and Nickelodeon. Gunther takes credit for developing the idea of a computerized virtual world for children, an idea she shared with KDL principal John Kim. Kim brought in another person, David Dwyer, who has experience in managing technology. Kim proposed to give Gunther a 10 percent interest in KDL, he and Dwyer had 30 percent each, and investors would get the rest. Gunther agreed to Kim's proposal, though she felt that "this was extremely unfair given that I created this venture and that it took my expertise to execute it, and that my background and track record would attract investors and partners."
Gunther worked on creative development, while Kim raised money and Dwyer put together an engineering team. ZooKazoo was launched in early 2008. Gunther decided to grow the product's user base "by leveraging my media industry connections," contacting the manager of a game site owned by Viacom. Kim was aware of Gunther's communications with Viacom, but he expressed discomfort with her role as the lead person. Viacom proposed to acquire ZooKazoo for $10 million, plus 20 percent of future gross revenues. Harsh words were exchanged between Gunther and Kim, because Kim tried to keep Gunther out of the loop in meetings with Viacom executives. Viacom eventually passed on the deal, which Gunther blames on Kim's unreasonable demands for more money and his refusal to allow Viacom access to the ZooKazoo creative team.
Gunther was unhappy with her annual salary of $120,000, because Kim and Dwyer were each drawing $180,000. Gunther voiced her unhappiness to Kim, and her belief that she should be an equal partner because she created the concept, ran the team that was executing the project, and brought Viacom to the table as an acquisition partner. Gunther was also unhappy because media coverage of ZooKazoo mentioned only Kim and Dwyer, even though she was a co-founder and creator of the site.
Gunther's relationship with Kim and Dwyer deteriorated, with Gunther blaming Kim for destroying the potentially lucrative deal with Viacom. KDL was left with no funding and no plan, and Kim refused to honor his promise to raise Gunther's salary to $180,000, to match his. Kim and Dwyer became increasingly rude, excluded Gunther from meetings, and tried to direct Gunther's team, though they had no expertise in creative matters.
In June 2008, Time Warner expressed interest in investing in KDL. Kim did not keep Gunther informed about the progress of negotiations, but he promised to increase Gunther's salary if the deal went through, and to vest her existing shares immediately. In mid-August 2008, a conference call was conducted with a Time Warner representative, Dwyer, and Gunther. The representative asked many questions about the creative direction and team, but Dwyer prevented Gunther from answering. "This was very bothersome to me as I left the conversation feeling like I was less than honest with Time Warner and that I could not answer many of their questions truthfully, and I wanted Time Warner to know the real facts in order to preserve my credibility and integrity with them as my former employer. I also wanted to protect myself from [a] potential lawsuit by Time Warner for the fraudulent misrepresentations made by [Dwyer]."
To clear up Dwyer's misstatements about the cohesiveness of KDL's management, Gunther decided to call the representative at Time Warner. During their August 22, 2008 conversation, "I answered truthfully Time Warner's questions, which all stemmed from a central issue—the cohesiveness of our management team. In fact, during the telephone conversation, [the Time Warner representative] asked me if these problems were fixable. I told her I have not [sic] doubt that they are fixable and I am counting on Time Warner's experience to help us fix them." That afternoon, Time Warner decided to pull out of its intended investment in KDL.
Kim accused Gunther of sabotage, and directed her to write a letter, asking Time Warner to reconsider. On August 25, Gunther found Kim and Dwyer going through her office desk, computer and belongings. They berated her with accusatory remarks, and she told them "that this was not partner like behavior." They terminated her employment and told her to leave. Gunther sued KDL for wrongful termination, and KDL responded with the cross-complaint that is under consideration in this appeal.
In opposition, KDL argued that Gunther's conduct is not protected speech, because it did not arise from petitioning activity or from the exercise of free speech in connection with a public issue. The cross-complaint alleges that Gunther violated her fiduciary duties by making an improper and unauthorized secret telephone call to a potential investor, interfering with KDL's economic prospects for the purpose of enriching herself, at the expense of KDL.
In his supporting declaration, Kim summarizes his qualifications in business and in the area of developing technology products for children that are grounded in educational research. Kim characterizes Gunther's claim of originating a children's virtual world technology as "delusional." Although Gunther told Kim about an idea she had to set up a children's Internet website, her idea was to have company-created content only, not to create a virtual world where children could interact with each other. KDL hired Gunther in January 2007, "to facilitate creative work among a number of talented artists and writers." She was not the predominant conceptual leader of the project.
KDL agreed to give Gunther a 10 percent ownership stake. In 2007, Kim raised $1.475 million from investors for KDL, while Dwyer served as the chief operating officer. Kim and Dwyer made numerous personal loans to KDL to meet payroll, and they both stopped receiving a salary in July 2008. Gunther made no loans to KDL and received all of her salary.
ZooKazoo was launched within eight months, drew national acclaim, and gained 250,000 registered users within four months. Its success attracted the interest of Viacom and Time Warner. Gunther claimed to have experience with Viacom executives; however, during negotiations Gunther asserted herself inappropriately, writing and phoning Viacom personnel directly and scheduling meetings with them unilaterally. Kim repeatedly instructed Gunther to stop interfering because it was causing muddled communications. Gunther threatened to disrupt the deal unless she received a significant raise and additional stock. Kim believes that Viacom backed out because Gunther created the impression of a divided and ineffectual management team.
KDL's investment bankers introduced the company to Time Warner in April 2008, and a productive conversation about investment got underway. At a meeting with Time Warner in May 2008, Gunther embarrassed KDL executives by saying that she was underpaid; that the company was all her idea; and that she was the decision-maker. Despite Gunther's unprofessional behavior, Time Warner continued discussions with KDL, and was eager to close a deal. A final "term sheet" was signed on July 29, 2008. KDL received a request to schedule the first board meetings with Time Warner, and provided wiring instructions so that funds could be sent to KDL's account.
On July 2, 2008, Gunther sent a letter to Kim demanding that key KDL principals be fired or resign, including Kim or Dwyer; that all operations be moved to Los Angeles; that she be given a seat on the board of directors; and that she receive an immediate increase in stock. These demands were made when KDL was virtually broke. To appease Gunther so that the Time Warner deal could close, Kim and Dwyer agreed to increase Gunther's salary and allow her stock to invest immediately instead of over time, on condition that the Time Warner deal closed. Gunther was given, but did not sign, a company nondisclosure and noncompetition agreement.
On the morning of August 22, Time Warner cancelled the deal because a "senior member" of KDL had called Time Warner and "conveyed that the KD Learning leadership team was badly fractured." Kim notified KDL principals about the crisis. When he spoke to Gunther, she adamantly denied calling Time Warner, saying that she was insulted by such a suggestion. KDL drafted a pleading letter to Time Warner, asking for reconsideration. Gunther opined that "This is a great letter. Let's hope they open the door for us to discuss and address whatever their issues are." On August 23, the Time Warner representative wrote to KDL and described the unsolicited call as "malicious," adding that it "was stunning to me that a core team member would actually make the call to a potential investor instead of working out their issues with you. As I'm sure you understand, this is a huge red flag for a non-control investor—we do not intend to be running day to day processes and at this early stage of development, the team has to be highly effective and cohesive for us to make an investment."
Kim and Dwyer met with Gunther on August 25. She was hostile; after 10 minutes, she declared that she would not speak to them and left the office. Given Gunther's lack of cooperation, Kim and Dwyer decided that she was the person who was most likely responsible for calling Time Warner, and they terminated her employment. As a result of the debacle, KDL was unable to obtain needed financing, laid off all employees, and ceased operations.
In her reply, Gunther concedes that she spoke to Time Warner, and told the representative that KDL did not have a cohesive management team. Gunther blames Kim's and Dwyer's mismanagement for destroying the deals with Viacom and Time Warner, and denies that she misbehaved during investor meetings. She never agreed to any employment contract term that would prevent her from speaking openly to any potential investor about KDL's management problems.
THE TRIAL COURT'S RULING
The trial court found that Gunther has "not made a threshold showing that the challenged cause[s] of action [are] one[s] arising from protected activity. She made a phone call. They say she interfered. That's not a protected activity." Gunther's statements to Time Warner were not made in anticipation of litigation, so they were not in furtherance of her right to petition for redress of grievances. Although Gunther argued that the cross-complaint was retaliatory, because she filed a wrongful termination complaint, the facts underlying the cross-complaint arose from conduct that occurred much earlier. The court concluded, "I see no basis whatsoever for a SLAPP motion in this case." Gunther appeals from the order denying her motion, and the court's imposition of sanctions against her.
DISCUSSION
1. Appeal and Review
Appeal lies from the order denying Gunther's motion to dismiss the cross-complaint under the anti-SLAPP statute. (§ 425.16, subd. (i).) The anti-SLAPP statute applies to cross-complaints as well as to complaints. (§ 425.16, subd. (h); Jarrow Formulas, Inc. v. LaMarche (2003) 31 Cal.4th 728, 735, fn. 2.) The court's ruling on the motion is subject to de novo review. (Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 269, fn. 3; Huntingdon Life Sciences, Inc. v. Stop Huntingdon Animal Cruelty USA, Inc. (2005) 129 Cal.App.4th 1228, 1245.)
2. Overview of the Anti-SLAPP Statute
The anti-SLAPP statute allows the courts to expeditiously dismiss "„a meritless suit brought primarily to chill the defendant's exercise of First Amendment rights.'" (Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 670; § 425.16, subd. (a); Simpson Strong-Tie Co., Inc. v. Gore (2010) 49 Cal.4th 12, 21.) In her opening brief, Gunther relies on one of the four categories covered by the anti-SLAPP statute. Specifically, she claims that she engaged in "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." (§ 425.16, subd. (e)(4).)
There are two components to a motion to strike brought under section 425.16. First, Gunther must make a threshold showing that the claim arises from an act in furtherance of her constitutional right to petition or to free speech. (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 67.) Second, if the lawsuit affects a protected right, the court determines whether there is a reasonable probability that KDL will prevail on its claims. (§ 425.16, subd. (b)(1); City of Cotati v. Cashman (2002) 29 Cal.4th 69, 76; Zamos v. Stroud (2004) 32 Cal.4th 958, 965.)
To protect the constitutional rights of petition and free speech, the anti-SLAPP statute must "be construed broadly." (§ 425.16, subd. (a); Jarrow Formulas, Inc. v. LaMarche, supra, 31 Cal.4th at p. 735.) We primarily rely on the challenged pleading: the opposing papers are considered '"to the extent that they might give meaning to the words in the complaint.'" (All One God Faith, Inc. v. Organic & Sustainable Industry Standards, supra, 183 Cal.App.4th at p. 1200.) The court does not weigh the evidence; rather, it has a responsibility to accept as true all evidence favoring the challenged pleading. (Soukup v. Law Offices of Herbert Hafif, supra, 39 Cal.4th at p. 291; Nagel v. Twin Laboratories, Inc. (2003) 109 Cal.App.4th 39, 45-46.)
3. Application of the Anti-SLAPP Statute
a. Threshold Showing That the Lawsuit Arises from Protected Activity
Citing federal securities law, Gunther contends that she "was using a free speech to protect herself from potential criminal prosecution . . . and civil lawsuit for fraud." Gunther paints herself as a whistleblower who alerted a potential investor to alleged misrepresentations about the cohesiveness of KDL's management team, thereby averting a fraud on the investor. She notes that there were "substantial differences of opinion as to how to run the company" that show the noncohesiveness of KDL's management. Gunther maintains that she exercised free speech in connection with a public issue or an issue of public interest, "specifically, to avoid making material representations to an investor in a sale or purchase of a security" within the meaning of section 425.16, subdivision (e)(4). She writes, "Simply stated, Gunther was trying to prevent Kim and Dwyer from committing a crime."
In her opening brief, Gunther cites only paragraph 4 of section 425.16, subdivision (e). In her reply brief, Gunther attempts to rely on paragraphs 1 and 2 of that subdivision, which relate to litigation activity. Arguments raised for the first time in a reply brief are untimely and will be disregarded. (Julian v. Hartford Underwriters Ins. Co. (2005) 35 Cal.4th 747, 761, fn. 4; Hernandez v. Vitamin Shoppe Industries Inc. (2009) 174 Cal.App.4th 1441, 1461, fn. 10.)
State law prevents employers from suing employees who act as whistleblowers. The statute protects employees who disclose information to a government or law enforcement agency regarding a possible violation of a state or federal statute or regulation. A lawsuit brought by an employer that violates the whistleblower statute is illegal as a matter of law. (Soukup v. Law Offices of Herbert Hafif, supra, 39 Cal.4th at pp. 287-288.) Gunther cannot claim that KDL's lawsuit is illegal as a matter of law because she did not disclose any alleged violation of federal securities law to a government or law enforcement agency. She does not fall within the protection of the whistleblower statute.
"An employer may not retaliate against an employee for disclosing information to a government or law enforcement agency, where the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation or noncompliance with a state or federal rule or regulation." (Lab. Code, § 1102.5, subd. (b).)
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A "private conversation about public issues" is protected by section 425.16, subdivision (e)(4). (Terry v. Davis Community Church (2005) 131 Cal.App.4th 1534, 1545.) By contrast, "private communications about private matters, while not totally unprotected by the First Amendment, warrant no special protection against liability" under the anti-SLAPP statute. (Terry, at p. 1546.) Thus, a member of a hobbyist group who writes a letter to other hobbyists, accusing an individual of thievery, is not protected by the anti-SLAPP statute because this was a private communication about a private controversy. (Weinberg v. Feisel (2003) 110 Cal.App.4th 1122, 1128-1129, 1132.) Statements accusing a plaintiff of criminality are not automatically matters of public interest unless there are charges pending against the plaintiff, or the defendant has taken action intended to result in a criminal investigation or prosecution. (Id. at pp. 1134-1135.)
Gunther did not report her suspicions about a securities violation to the Securities and Exchange Commission or to the U.S. Attorney, which could have brought her statements under the umbrella of protected petitioning activity. For example, in Mann v. Quality Old Time Service, Inc. (2004) 120 Cal.App.4th 90, 100-101,104, the defendant's report to numerous government agencies that plaintiff poured carcinogenic chemicals into the public drainage system was protected petitioning activity. Gunther makes no claim that she engaged in protected petitioning activity to any government agency about federal securities law violations by KDL.
Instead, Gunther made a private call to voice discontent about her interactions with fellow KDL executives, whom she considered to be rude, unfair attention hogs, who did not give her proper creative credit or an adequate salary, and did not allow her to fully participate in investor discussions. Gunther's view about KDL's treatment of her was a private communication about a private matter. It was not a matter of public interest. As indicated by the Time Warner representative, Gunther called to discuss an internal dispute at KDL when she should have worked out her issues with Kim and Dwyer instead of calling a potential investor to complain about her mistreatment. Gunther's private communication about a management dispute does not fall within the scope of section 425.16, subdivision (e)(4).
KDL's pleading alleges that Gunther wanted to sabotage the Time Warner deal because she intended to compete with KDL—using KDL's intellectual property for her business entity—and she wanted to cripple KDL as a rival. Speech that occurs in a business capacity for the purpose of undermining a company and promoting one's own business goals are not matters of public interest. (World Financial Group, Inc. v. HBW Ins. & Financial Services, Inc. (2009) 172 Cal.App.4th 1561, 1569.) By contrast, disparaging statements about a publicly traded business posted on the Internet may be considered a matter of public interest to the business's 18,000 investors. (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1007-1008.) KDL is not a publicly traded corporation, and Gunther's disparaging statements about KDL's internal disputes, directed to a single person, did not address a matter of public interest.
An opinion by our colleagues in Division Five illustrates the point. In that instance, the lawyer for an ophthalmologist wrote a letter to the president of a health maintenance organization: the letter pointed out that the HMO had contracted with an ophthalmologist named Kurwa, whose license to practice medicine was suspended, and asked the HMO to do business instead with the lawyer's client. The HMO cooperated by terminating its agreement with Kurwa and signing a new agreement with the other ophthalmologist. (Kurwa v. Harrington, Foxx, Dubrow & Canter, LLP. (2007) 146 Cal.App.4th 841, 843-844.) Kurwa sued the ophthalmologist who solicited the HMO's business and the law firm that sent the letter to the HMO, asserting that they interfered with his contractual relationship with the HMO. The law firm moved to strike the pleading, contending that its letter to the HMO was a matter of public interest. (Id. at p. 845.)
The appellate court in Kurwa rejected the notion that the law firm's letter was protected speech. The letter was not sent to the members of the HMO, but only to one person, the president of the HMO, so there was no "public forum" involved. (146 Cal.App.4th at p. 846.) The contents of the letter were not a matter of public interest within the meaning of the anti-SLAPP statute. (Kurwa, at p. 846.) "Rather, this was a private matter . . . which was ultimately concerned solely with the issue of who would be the signatory of the Capitation Agreement and thereby reap the substantial benefits of that agreement." (Id. at p. 848, italics added.)
The same analysis applies here. Gunther voiced her concerns about dissension among KDL's management to a single representative of Time Warner. This was not a matter of substantial public interest. Instead, it was a manifestation of Gunther's unhappiness with the way that she was treated by Kim and Dwyer, a private matter. As in Kurwa, Gunther's statements were made to reap a personal economic benefit, not to engage in a public discussion. Indeed, when confronted, Gunther denied ever speaking to the Time Warner representative, and pretended to be offended by the accusation. This demonstrates that Gunther intended to keep her statements private and secret, and was not trying to start a public discussion on the issue of KDL's management practices.
Gunther's speech was "merely incidental to the [unprotected] conduct upon which the complaint is based and is therefore insufficient to trigger the requirements of the anti-SLAPP statute." (World Financial Group, Inc. v. HBW Ins. & Financial Services, Inc., supra, 172 Cal.App.4th at p. 1569.) The wrongful conduct in this case was contacting a prospective investor for the purpose of subverting a business deal. What was actually said during the conversation is incidental to the wrongful conduct. In short, private statements about a company's managerial disputes—made to discourage an investment in the company—are not matters of public interest and are not protected by the anti-SLAPP statue.
Gunther invokes the litigation privilege, saying that the managerial disagreements between herself, Kim and Dwyer made it "abundantly clear to KD and its principal[s] that a lawsuit might be necessary to settle their dispute." The litigation privilege is used as an aid in construing the scope of section 425.16, to determine whether a communication falls within the ambit of the anti-SLAPP statute. (Flatley v. Mauro (2006) 39 Cal.4th 299, 322-323.) The privilege applies to communications made by litigants in judicial proceedings, to achieve the objects of the litigation, and have some connection or logical relation to the action. (Civ. Code, § 47, subd. (b); Bisno v. Douglas Emmett Realty Fund 1988 (2009) 174 Cal.App.4th 1534, 1550.) The purpose of the privilege is to give litigants and witnesses maximum access to the courts without fear of being harassed by derivative tort actions. (Ibid.)
This lawsuit is not about differences of opinion between Gunther, Kim and Dwyer that "might" have led to a lawsuit between the three of them. Rather, KDL's claim is about Gunther's call to Time Warner, which interfered with an investment proposal and was not about pending or contemplated litigation. The litigation privilege does not apply here.
b. Probability of Prevailing
Gunther did not establish the threshold issue by showing that she engaged in petitioning or speech activity that is protected by the anti-SLAPP statute. Accordingly, we do not reach the secondary issue whether KDL established a probability of prevailing on its claims. (City of Cotati v. Cashman, supra, 29 Cal.4th at pp. 80-81; Robles v. Chalilpoyil (2010) 181 Cal.App.4th 566, 582.)
4. KDL's Request for Sanctions on Appeal
The trial court imposed sanctions on Gunther, for filing a frivolous motion. Gunther does not challenge those sanctions in her brief. KDL asks this court to impose additional sanctions on Gunther for pursuing a frivolous appeal. Gunther responds that she acted in righteous pursuit of her fiduciary duties as an officer and shareholder of KDL by "preventing the commission of a crime," and contends that she "had every right to freely speak her mind about a transaction affecting her interest and future."
An award of costs and attorney fees shall be awarded "[i]f the court finds that a special motion to strike is frivolous or is solely intended to cause unnecessary delay . . . ." (§ 425.16, subd. (c)(1).) Tactics that are frivolous are "totally and completely without merit" or "for the sole purpose of harassing an opposing party." (§ 128.5; Carpenter v. Jack in the Box Corp. (2007) 151 Cal.App.4th 454, 460.) The imposition of sanctions for a frivolous motion is mandatory. (Foundation for Taxpayer & Consumer Rights v. Garamendi (2005) 132 Cal.App.4th 1375, 1388.)
The trial court stated that there was "no basis whatsoever for a SLAPP motion in this case." We agree that Gunther's motion—and this appeal—are baseless and frivolous. Gunther did not "prevent the commission of a crime" by complaining to Time Warner about the way in which she was treated by KDL. As Time Warner saw it, Gunther's act was "malicious," undertaken to further Gunther's own interests at the expense of KDL. Gunther claims that she was free to sabotage KDL's economic lifeline by openly complaining to a potential investor because it affected "her" future. Her argument only demonstrates her complete misunderstanding of fiduciary duty: the investment deal was not about "her" future, it was about KDL's future, which she successfully destroyed. KDL shall recover its costs and attorney fees on appeal, the amount of which will be determined by the trial court. (Foundation for Taxpayer & Consumer Rights v. Garamendi, supra, 132 Cal.App.4th at p. 1395.)
DISPOSITION
The judgment is affirmed.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
BOREN, P.J. We concur:
DOI TODD, J.
ASHMANN-GERST, J.