Granville Homes, Inc. v. Dvorkin

(03) Tentative Ruling

Re: Granville Homes, Inc. v. Dvorkin Case No. 26CU00480

Hearing Date: August 18, 2026 (Dept. 501)

Motion: Defendant’s Special Motion to Strike Complaint

Tentative Ruling:

To deny defendant’s special motion to strike plaintiff’s complaint. (Code of Civ. Proc., § 425.16.)

Explanation:

Under section 425.16, “[a] cause of action against a person arising from any act of that person in furtherance of the person's right of petition or free speech under the United States Constitution or the California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.” (Code Civ. Proc., § 425.16, subd. (b)(1).)

“In making its determination, the court shall consider the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.” (Code Civ. Proc., § 425.16, subd. (b)(2).) “As used in this section, ‘act in furtherance of a person's right of petition or free speech under the United States or California Constitution in connection with a public issue’ includes: (1) any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law, (2) any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law, (3) any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest, or (4) any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.” (Code Civ.

Proc., § 425.16, subd. (e).) “Resolution of an anti-SLAPP motion involves two steps. First, the defendant must establish that the challenged claim arises from activity protected by section 425.16. If the defendant makes the required showing, the burden shifts to the plaintiff to demonstrate the merit of the claim by establishing a probability of success. We have described this second step as a ‘summary-judgment-like procedure.’ The court does not weigh evidence or resolve conflicting factual claims.

Its inquiry is limited to whether the plaintiff has stated a legally sufficient claim and made a prima facie factual showing sufficient to sustain a favorable judgment. It accepts the plaintiff's evidence as true, and evaluates the defendant's showing only to determine if it defeats the plaintiff's claim as

a matter of law. ‘[C]laims with the requisite minimal merit may proceed.’” (Baral v. Schnitt (2016) 1 Cal.5th 376, 384–385, citations and footnotes omitted.) “[A] claim is not subject to a motion to strike simply because it contests an action or decision that was arrived at following speech or petitioning activity, or that was thereafter communicated by means of speech or petitioning activity. Rather, a claim may be struck only if the speech or petitioning activity itself is the wrong complained of, and not just evidence of liability or a step leading to some different act for which liability is asserted.” (Park v.

Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1060, italics in original.) “Thus, in evaluating anti-SLAPP motions, ‘courts should consider the elements of the challenged claim and what actions by the defendant supply those elements and consequently form the basis for liability.’” (Wong v. Wong (2019) 43 Cal.App.5th 358, 364, quoting Park, supra, at p. 1063.) “The phrase ‘arising from’ in section 425.16, subdivision (b)(1) has been interpreted to mean that ‘the act underlying the plaintiff's cause’ or ‘the act which forms the basis for the plaintiff's cause of action’ must have been an act in furtherance of the right of petition or free speech.” (ComputerXpress, Inc. v.

Jackson (2001) 93 Cal.App.4th 993, 1001, citations omitted.) “The ‘critical consideration’ under the first part of the anti-SLAPP analysis is ‘whether the cause of action is based on the defendant's protected free speech or petitioning activity.’ ‘The anti-SLAPP statute's definitional focus is not the form of the plaintiff's cause of action but, rather, the defendant's activity that gives rise to his or her asserted liability—and whether that activity constitutes protected speech or petitioning.’ ‘In deciding whether the “arising from” requirement is met, a court considers “the pleadings, and supporting and opposing affidavits stating the facts upon which the liability or defense is based.” ’ ” (Copenbarger v.

Morris Cerullo World Evangelism (2013) 215 Cal.App.4th 1237, 1244–1245, citations omitted, italics in original.) “[A] defendant in an ordinary private dispute cannot take advantage of the anti- SLAPP statute simply because the complaint contains some references to speech or petitioning activity by the defendant. We conclude it is the principal thrust or gravamen of the plaintiff's cause of action that determines whether the anti-SLAPP statute applies, and when the allegations referring to arguably protected activity are only incidental to a cause of action based essentially on nonprotected activity, collateral allusions to protected activity should not subject the cause of action to the anti-SLAPP statute.” (Martinez v.

Metabolife Internat., Inc. (2003) 113 Cal.App.4th 181, 188, citations omitted, italics in original.) In the present case, defendant moves to strike the plaintiff’s complaint as a SLAPP action, claiming that plaintiff filed its complaint against him in retaliation for his whistleblower complaint about accounting irregularities and potential tax evasion. Defendant admits that he took plaintiff’s confidential financial documents without authorization, but he claims that he needed the documents in order to file a whistleblower complaint against plaintiff with the IRS.

He claims that, when he told plaintiff about various allegedly improper accounting practices and potential tax evasion allegedly being committed by plaintiff and its owner, Darius Assemi, plaintiff used the fact that he had taken the documents as a pretext to retaliate against him and fire him. He claims that reporting potential tax evasion and accounting improprieties is a

matter of public concern, and thus plaintiff’s complaint against him should be stricken as a SLAPP action. However, defendant has not met his burden of showing that the gravamen of plaintiff’s complaint arises out of his protected activities. Plaintiff has sued defendant for allegedly copying and taking its confidential financial and trade secret documents from its computer system without plaintiff’s knowledge or consent. (Complaint, ¶¶ 1, 14, 15, 17, 18, 20, 21, 22.) Defendant also allegedly lied about taking the files when confronted about the incident. (Id. at ¶ 16.)

Plaintiff alleges that defendant’s conduct violated plaintiff’s internal policies, which forbid taking or copying confidential financial and trade secret information from plaintiff’s servers without authorization, as well as violating the California Uniform Trade Secret Act, breaching defendant’s duty of loyalty to plaintiff, violating Penal Code section 502(c), and violating the Unfair Competition Law. (Id. at ¶¶ 10, 24-53.) Nothing in the complaint mentions that defendant had made a whistleblower complaint to the IRS or any other government agency, or engaged in any type of public speech or communication regarding the financial documents that defendant took from plaintiff.

Defendant claims that he took the documents so that he could make a whistleblower complaint about alleged financial and accounting irregularities committed by plaintiff. However, he admits that he did not actually send the documents to the IRS or make any type of whistleblower complaint with a government agency until April 16, 2026, two days after he was fired, and after plaintiff had filed its complaint. (Dvorkin decl., ¶ 32.) Therefore, the complaint was not filed in retaliation for defendant’s report to the IRS.

Nor has defendant even alleged that he told plaintiff that he was going to tell the IRS about the financial improprieties allegedly committed by plaintiff before he was fired. At most, on April 8, 2026, he sent an email to plaintiff’s leadership in which he claimed that there were accounting irregularities and potential tax evasion that he needed to discuss with plaintiff, and that he was seeking whistleblower protections. (Dvorkin decl., ¶ 16, and Exhibit A thereto.) However, he admits that he took the financial documents from plaintiff’s server on April 8, the same date he sent the email to plaintiff about the alleged financial irregularities.

Nor does he deny that he was fired for taking the documents without authorization. Thus, defendant had not actually engaged in any communications with the IRS or any other outside agency regarding the alleged financial improprieties. His internal whistleblower complaint to plaintiff on April 8, 2026, was not the type of “protected activity” that is covered by section 425.16, as it was not a petition to an outside government agency and it was not made in a public forum. Such internal disputes between an employer and an employee are not subject to protection under the anti-SLAPP statute. (Rivero v.

American Federation of State, County and Municipal Employees, AFL-CIO (2003) 105 Cal.App.4th 913, 924.) Defendant contends that his whistleblower complaint involved a matter of public interest, since it concerned alleged tax evasion by the large corporation. However, the fact remains that defendant did not make a complaint to the IRS until after he was fired, and after plaintiff had already sued him. Thus, the complaint is not based on his protected petitioning activity in making a complaint to the IRS, as he had not yet engaged in such activity.

Nor had he made a statement in a public forum regarding plaintiff’s financial improprieties before plaintiff filed its complaint. At most, he made an internal report to plaintiff about the alleged accounting irregularities and potential tax 5

evasion, which is not the type of protected statement that is covered by section 425.16. Therefore, since defendant has not shown that the complaint is based on his protected activity, he has not met the first prong under the anti-SLAPP statute, and the court intends to deny the motion to strike. Defendant cites to MMM Holdings, Inc. v. Reich (2018) 21 Cal.App.5th 167 to support his contention that a whistleblower’s reporting of potential tax evasion by his employer constitutes protected activity under section 425.16.

However, MMM Holdings is inapplicable here. In MMM Holdings, the employer sued the attorney for a whistleblower after the attorney refused to turn over thousands of electronically stored documents that his client took from the employers, and that the attorney used to bring a qui tam action for Medicare fraud against the employers. The trial court granted the attorney’s anti-SLAPP motion striking the employers’ lawsuit, and the Court of Appeal affirmed. “We begin by recognizing plaintiffs have conceded, as they must, Reich's use of documents received from Valdez in connection with the qui tam action constitutes protected activity...

What is clear, however, is that the distribution of documents for either purpose was done ‘in furtherance of the exercise of the constitutional right of petition’ with respect to the Perez documents and ‘in furtherance of the exercise of the constitutional right ... of free speech’ with respect to the Plutzik documents. Each distribution and use of the documents was done to further litigation efforts, either on behalf of Valdez or on behalf of others.” (Id. at pp. 178–179, citations, paragraph breaks, and footnotes omitted, italics in original.)

The court then held that the attorney’s use of the documents to bring a qui tam action for Medicare fraud against the employers was protected activity under the anti-SLAPP statute because Medicare fraud is a matter of public interest. “Reich's distribution of documents to others was done in connection with the qui tam action and issues related to it, all of which concern a public issue or an issue of public interest.” (Id. at p. 181, italics in original.) Thus, the plaintiffs’ complaint in MMM Holdings was based on protected activity, since the employers were suing the whistleblower’s attorney for using its documents as part of a qui tam action alleging Medicare fraud by the employers, which was a matter of public interest.

Here, on the other hand, plaintiff has sued defendant for taking financial and other confidential documents from its computer server without its authorization. Plaintiff has not alleged that defendant used the documents to file a qui tam lawsuit or any other litigation. While defendant did eventually send the documents to the IRS, allegedly in order to report potential tax evasion by plaintiff, plaintiff had already fired defendant and brought the present lawsuit before defendant sent the documents to the IRS.

Thus, the gravamen of the plaintiff’s complaint is not based on defendant’s reporting of tax evasion or accounting irregularities to the IRS or any other government agency. Nor does the lawsuit appear to be based on the fact that defendant made an internal complaint about accounting irregularities. Rather, the complaint is based on defendant’s unauthorized taking of plaintiff’s confidential financial documents. The unauthorized taking of a company’s confidential documents is not “protected activity” under the anti-SLAPP statute.

Therefore, defendant has not met its burden of showing that the complaint should be stricken under the first prong of section 425.16. Moreover, even if defendant had met his burden of showing that he engaged in a protected activity and that plaintiff filed its complaint in retaliation for his protected 6

activity, plaintiff has met its burden of showing that it has a probability of prevailing on its underlying claims. As discussed above, plaintiff’s complaint alleges claims for violation of the California Uniform Trade Secret Act, breach of the duty of loyalty, violation of Penal Code section 502(c) (computer crimes), and unfair business practices. Plaintiff has submitted evidence showing that it has a probability of prevailing on its claims, since it hired a private cyber security firm that analyzed defendant’s company laptop and determined that defendant attached four external storage devices and downloaded hundreds of confidential financial documents and other files from plaintiff’s computer server. (Horton decl., ¶¶ 9-11.)

Plaintiff was not aware of defendant’s downloading and copying of the files, and it did not consent to or authorize the downloading and copying of the files, which had no legitimate purpose related to defendant’s job. (Assemi decl., ¶ 12, Thompson decl., ¶¶ 5-8.) Many of the files were well outside the scope of defendant’s role and responsibilities as controller for the company, and contained sensitive information about Darius Assemi’s taxes that defendant was not authorized to access to perform his duties. (Thompson decl., ¶ 7.)

Some of the files contained information dating back to 1989, and many of the documents concerned third parties and companies that had no relationship to any potential claims that defendant might have wanted to raise as a whistleblower. (Id. at ¶ 5, Assemi decl., ¶ 15.) Plaintiff incurred damages from defendant’s unauthorized taking of its files, since it had to retain a cyber security firm to investigate the defendant’s taking of the files, as well as retaining a law firm to protect its interests and attempt to recover the files. (Assemi decl., ¶ 15; Horton decl.; Borchers decl., ¶ 6.)

Thus, plaintiff has submitted evidence that supports its claims for violation of the CUTSA, breach of the duty of loyalty, violation of Penal Code section 502(c), and unfair business practices. Notably, defendant does not deny that he downloaded and copied the files without permission. In fact, he admits that he has the files on his computer, which is currently in the custody of his attorney.1 Therefore, plaintiff has met its burden of showing that it has a likelihood of prevailing on its claims.

Defendant has argued that plaintiff’s complaint is clearly frivolous and merely intended to retaliate against him for being a whistleblower because plaintiff has not agreed to allow him to return the files to it, despite his efforts to negotiate their return. However, plaintiff has contended that defendant has imposed unreasonable conditions in order to allow the files to be returned, including deleting the files from his computer, which could result in the destruction of evidence, including metadata that might show whether defendant has hidden, copied, or transferred some of the information to another location.

Given the obvious problems with allowing defendant to delete all files and data from his computer until it has been inspected by a forensic expert, plaintiff’s refusal to agree to defendant’s proposal does not appear to show that it has an ulterior motive for bringing the present action. In any event, the important issue in ruling on an anti-SLAPP motion is not the subjective motivations of the plaintiff, but rather whether the plaintiff’s complaint arises out of the defendant’s protected speech or petitioning activity. (Equilon Enterprises LLC v.

Consumer Cause, Inc. (2002) 29 Cal.4th 53, 61.) Here, the plaintiff’s complaint does not arise out of protected activity, and even if it does, plaintiff has presented ample

1 Defendant has objected to many of the statements in plaintiff’s declaration in support of his

motion. The court intends to overrule the objections. 7

evidence to show that it has a probability of prevailing on its claims. Therefore, the court intends to deny the motion to strike. Pursuant to California Rules of Court, rule 3.1312(a), and Code of Civil Procedure section 1019.5, subdivision (a), no further written order is necessary. The minute order adopting this tentative ruling will serve as the order of the court and service by the clerk will constitute notice of the order.

Tentative Ruling

Issued By: KCK on 08/17/16. (Judge’s initials) (Date)

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