La.) hi I I 5 28 2913 rarswo surrazoa COURT Br DEPT. 402 DEPUTY SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF FRESNO CIVIL DIVISION B.F. SISK COURTHOUSE FRESNO RV, INC. dba RV OUTLET a California Corporation; CLOVIS RV, INC. a California Corporation, TENTATIVE STATEMENT OF DECISION Plaintiffs, Case No.2 11 CECG 01433 JYH PAUL RV COUNTRY, INC., a California Corporation; PAUL EVERT, an individual; CHARLES E. CURTIS, JR., an individual; AARON LYON, an individual, and JIM CROWELL, an individual, Defendants. TO THE PLAINTIFFS AND THEIR ATTORNEY OF RECORD AND TO DEFENDANTS AND THEIR ATTORNEYS OF RECORD: The above--entitled matter came on for trial in the Central-Civil division of this court, the Honorable Jeff Hamilton, presiding, sitting without a jury. Attorney William Brewer, Esq. represented Plaintiffs FRESNO RV, INC. dba RV OUTLET a California Corporation; CLOVIS RV, INC. a California Corporation (Hereinafter "Plaintiffs".) Attorneys Gregory Dyer, Esq. and Matthew Schleiffarth, Esq. represented Defendants PAUL RV COUNTRY, INC., a California Corporation; PAUL EVERT, an individual; CHARLES E. CURTIS, R., an individual; and JIM CROWELL, an individual and attorney Peter Sean Bradley, Esq. represented DEFENDANT AARON LYON, an individual (Hereinafter (Hereinafter the Defendants collectively The a Lucourt trial began with Motions in Limine on Monday May 13, 2013 and concluded with closing briefs and oral argument on July 2, 2013. Following final argument, the Court took the matter under submission. Having now reviewed the evidence and arguments of counsel, the Court removes the case from submission and issues the following tentative decision.' I. RULINGS ON ISSUES (CAUSES OF ACTION) 1. Did Plaintiffs prove that they were the victim of trade libel by Defendants?" Short answer: No. Plaintiffs failed to show a specific loss as a result of the alleged libel. "To prevail on its trade libel claim, WSSI must present evidence showing it suffered some pecuniary loss. (Erlich v. Etner (1964) 224 Cal.App.2d 69, 73, 36 Cal.Rptr. 256.) It may not rely on a general decline in business arising from the falsehood, and must instead identify particular customers and transactions of which it was deprived as a result of the libel. (Id. at pp. 36 Cal.Rptr. 256.) Mann V. Quality Old Time Service, Inc. (2004) 120 Cal.App.4th 90, 109 [15 Cal.Rptr.3d 215, 226]. Defendants' Motion for Judgment Granted. 2. Did Plaintiffs prove that Defendants Defamed or Slandered them'? Short answer: Yes. See factual findings and discussion of law below. 3. Did Plaintiffs prove their claim of False Light Invasion of Privacy as defined in CACI 1802'? Short answer: No. Plaintiffs failed to prove evidence of "publicity" as that is defined in CACI 1802, nor did they identify specific losses versus a general business decline as is required. Defendants' Motion for Judgment Granted. 4. Did Plaintiffs prove that Defendants Intentionally Interfered with their Prospective Business Advantage? Short answer: No. claim for interference with contractual relationship requires a valid contract between the plaintiff and a third party, defendant's knowledge of this contract, intentional acts by a defendant designed to induce the Pursuant to CRC 3. 1 590(c)(4) this tentative decision will become the statement of decision unless, within 10 days after service of same by the court's clerk a party specifies those principal controverted issues as to which the party is requesting a specific statement or makes proposals not included in the tentative decision. 2 STATEMENT OF DEC C.C.P. SECTEON 632 Ix) La.) disruption of the contractual relationship and actual disruption of the contractual relationship resulting in damage. (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 55, 77 Cal.Rptr.2d 709, 960 P.2d 513.) A claim for intentional interference with prospective economic advantage includes the same elements, but involves an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff and the additional element that the defendant's action must have been wrongful apart from the interference itself. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 153-1154, 131 Cal.Rptr.2d 29, 63 P.3d 937.)" Mann v. Oualitv Old Time Service. Inc. (2004) I20 Cal.App.4th 90, I10 [15 Cal.Rptr.3d 215, 226]. As more fully explained below, though the court finds that the conduct of LYON, CURTIS and EVERT was intended to disrupt Plaintiffs contractual relationships, the court does not find any specific damage in the evidence as a result. Therefore, this cause of action fails on proof. Did Plaintiffs prove that Defendants, or any of them, negligently interfered with their prospective economic relations? See #4 above. No. 6. Did Plaintiffs prove that Defendants Intentionally lnterfered with Contract? Short answer: No. claim for interference with contractual relationship requires a valid contract between the plaintiff and a third party, defendant's knowledge of this contract, intentional acts by a defendant designed to induce the disruption of the contractual relationship and actual disruption of the contractual relationship resulting in damage. (Quelimarte Co. v. Stewart Title Guaranty C0. (1998) 19 Cal.4th 26, 55, 77 Cal.Rptr.2d 709, 960 P.2d 513.) Though the court finds that the conduct of LYON, CURTIS and EVERT was intended to disrupt Plaintiffs contractual relationships, the court does not find any specific damage in the evidence as a result. Therefore, this cause of action fails on proof. Did Plaintiffs prove their claim of Unfair Competition under Business and Professions Code ?l7200? Short answer: No. Defendants' Motion for Judgment Granted. -3- STATEMENT OF DECISION C.C.P. SECTION 632 DJ 8. Did Plaintiffs prove their claim for Employer's Negligent Hiring? Short answer: No. Defendants' Motion for Judgment Granted. II. FACTUAL FINDINGS A. Bac round of the Parties 1. res_r_1__o RV. Clovis RV Brewer Plaintiffs were two Recreational Vehicle dealerships owned by Robert "Bob" Brewer. During the relevant time in this action, Brewer also owned non-patty Pisrno RV. Pismo RV was subsequently sold to Mr. Brewer's son, Shawn Brewer in or around 2007. Plaintiff Clovis RV, Inc. went out of business and was closed at the end of 2009. Fresno RV, Inc. remains a going concern. Bob Brewer had been in the RV business 40+ years as of the time of trial. He described the duties of a finance manager as it relates to an RV dealership as one of trust and importance. It is the finance manager who handles all of the "backend" or aftermarket products. Those have a high profit margin for the dealership. Brewer also emphasized that a RV dealership has to rely on the honesty of the finance manager; if the finance manager is not completely trustworthy, the lenders will not deal with your business. Brewer hired LYON as the finance manager for CRV in 2007. In addition to CRV, LYON worked as finance manager for Pismo RV and the dealership in Quartzite Arizona as well. Brewer never suspected LYON of falsifying deal documents until he began to look back, in hindsight. Prior to the conduct more fully described below, CRV and FRV consistently outsold PERV. 2. Aaron Lyon Aaron LYON has worked in and around the RV business most of his adult life. In 2005, he was working for Paul Evert RV Country as a finance manager. In March of 2007, LYON was fired by Jeff .4- STATEMENT OF DECISION C.C.P. SECTION 632 D.) Reitman of PERV for an incident involving a female employee. Following the termination, and with the help of a colleague, Scott Pattie, LYON went to work for Bob Brewer at CRV. LYON was hired as a finance manager where he would "hang paper" (an industry vernacular for placing a consumer's loan with an RV lender). While at CRV, LYON became romantically involved with the office manager, Dawn Wright. The relationship began around February of 2008 and was terminated by Ms. Wright in March/April 2009. LYON blamed Bob Brewer for his breakup with Ms. Wright and told her that it was Bob that was keeping her from him. Bob Brewer helped Dawn Wright procure a criminal restraining order against LYON and allowed her to work at RV versus CRV so she could get away from LYON. Concurrent with the breakup of the relationship, LYON began telling Ms. Wright that the FBI was "after him" to give infonnation to them regarding Bob Brewer; that information was false? LYON later told her that he was going to contact the FBI to take Brewer down. On or about July 19, 2009, LYON abruptly resigned from CRV. Approximately one month later, LYON reappeared as a finance manager for PERV.3 During his tenure at PERV, the records show little in the way of "production" by LYON. Testimony and documents at trial revealed that from the date of his hiring, through October 15' 2009, LYON's name did not appear as having involvement in any deals. Furthermore, consistent with the court's findings of fraud perpetrated by LYON against Plaintiffs by way of altering loan documents, upon his second firing from PERV, LYON was arrested for being in possession, without permission or reason, of PERV "deal jackets" which included private customer data including social security numbers. 2 The only "evidence" of involvement emanated from LYON. No agent was ever cailed to testify, nor were any documents produced showing that the FBI had any involvement whatsoever in this case. 3 Curt Curtis testified that it was not nonnal for PERV to rehire employees that had previously left their employ; much less it would seem, those that had been fired. In fact, nowhere in the testimony does Mr. Curtis, or anyone from PERV, give one example of such an employee beside LYON that was "rehired." Shortly after the closing of CRV, LYON was, once again, fired by PERV. -5- STATEMENT OF C.C.P. SECTION 632 14 l5 l7 l8 3. 1'__2_g_g__1lEvert, Curt_i_s Paul Evert RV Countrv a) Paul Evert Paul EVERT is President of PERV and at the time of trial had been semi-retired for three years; he testified that he comes into the ofiice part--time, partial days. He had been in the automotive business fifty-two years at the time of trial; the first 15 in the passenger car business. EVERT stated that Curt Curtis is the Vice President of PERV and a member of the Board of Directors and has been his business partner for 20 years; he described him as his "go-to" guy. According to Evert, CURTIS is the General Manager of the dealership in Fresno and has been running the dealerships for 20 years. EVERT testified that he'd never had a conversation with LYON about CRV. Contrast that with LYON's testimony that he'd talked directly with EVERT about the raid and EVERT thought it a "good idea" if LYON called all three major TV media outlets to be present for the raid on CRV. EVERT testified that he never told LYON to call the media and denied ever being called by LYON and informed that CRV was being raided by the DMV. At one point in his testimony, EVERT denied ever even knowing about the DMV raid on CRV. Later, EVERT testified that CURTIS had told him of the raid in a "passing comment." EVERT was then asked about whether he had a memory of any PERV employee receiving a "signing bonus" as a hiring incentive. He had no recollection save for a "vague" one of a "sales manager from out--of-town." He could neither remember the name of this individual, nor the date of any alleged "bonus." However, the evidence at trial was that LYON was paid a "signing bonus" of $8,500 by PERV. EVERT claimed to know something about it, but "not a whole lot." When asked directly about the $8,500 payment, he testified that he didn't really know about it, but relied on "Curt" to do the hiring and "to get a good person sometimes that [a signing bonus] is done." Contrast this testimony with that of Dale Cantrell discussed below where Mr. Cantrell testified that EVERT not only signed the $8,500 -5- STATEMENT OF DECISION C.C.P. SECTION 632 DJ check, but ordered him to deliver it to LYON personally at a remote restaurant location. Dale Cantrell has been the Controller of PERV for 10 years and is also on the Board of Directors and described by EVERT as "third in command." EVERT described PERV as owning dealerships in Washington, Oregon, Nevada, Arizona and California. Other than him, CURTIS and Cantrell, no one else has control over any of the dealerships. b) Curt Curtis Curt CURTIS, at the time of trial, was the Vice President and General Manager of responsible for all day--to-day running and operation of the 5 dealerships above--mentioned. He had been so employed for the past 20 years. In contrast to EVERT's testimony, CURTIS testified that they did, in fact, discuss the hiring of LYON and "that they both agreed that we would hire him." He went on to say, probably had a couple of calls with Paul that we would try it." The "it" was in regard to hiring LYON back as a "show manager." As "show manager," LYON conducted only two shows for PERV, one in Hanford and one in Madera, neither generating much business at all. CURTIS described one as being a "disaster." As noted above, Jeff Ritman, Sales Manager for PERV, fired LYON in February of 2007 for a dispute with a female employee. In approximately 2008, that same female employee was terminated, according to CURTIS, due to the slowdown in the economy. LYON was hired back that next year. CURTIS testified that Ritman disagreed with hiring him back because Ritrnan believed LYON was a "loose cannon" and you never knew, day-to-day, "which side he was going to be on." When asked about the DMV raid, CURTIS testified that he only learned of it from LYON after it occurred. Later in testimony he switched his answer to state that he, in fact, was present for the raid and sat across the street to watch at Hedrick's Chevrolet. He said he drove over because LYON had called him to tell him it was occurring and he should "come watch." A $10,000 check was written to LYON the day after the DMV raid. Despite the obvious and -7- STATEMENT OF DECISION C.C.P. SECTION 632 IQ Lasuspicious timing, CURTIS testified that the payment had nothing to do with the raid. Both CURTIS and Cantrell signed the check. Neither a W-2 nor a 1099 was ever issued for the $10,000 check. Although CURTIS initially testified that the $8,500 and $10,000 payments to LYON were forms of "income," under cross-examination he admitted that the sales records of PERV revealed that, as of October 1, 2009, LYON had not been responsible for closing a single sale or deal. CURTIS mentioned to banks involved in the RV business, including Bank of America, that Brewer was "under investigation" by the DMV. CURTIS also testified that he had a separate conversation with a "floor checker" from GE Capital4 about Brewer, CRV and FRV being under investigation by the DMV.5 c) James Crowell Defendant James CROWELL retired from PERV in Mid-May of 2010. He had worked in the RV business as a salesman throughout his career at different dealerships. He worked under Bob Brewer at a dealership called El Camino RV some 20+ years ago. He testified that at a sales meeting during that employment, Brewer told the gathered salesmen that in order to succeed in the business, you "had to have a little larceny in your heart." CROWELL testified that he never forgot that and that he felt that Bob Brewer was "a crook." CROWELL was caught on the secret "sting" tape with LYON taken by investigator Mike Robinson posing as customer "Mr. Fitzgerald." CROWELL first testified that he didn't remember Mr. Fitzgerald at all, didn't remember making any statements about Brewer or DMV shutdowns, etc. Then, when the audio/video footage was played, he had an epiphany; it was him after all. In fact, CROWELL went from a completely blank memory to remembering every negative comment that was made in the 4 Eddie Valdez. 5 The simple fact that a DMV investigation occurred or was happening was true. However, from all of the evidence, the obvious insinuation CURTIS and others were making was that Brewer and his companies were "crooked" and going out of business. It is this insinuated message the court finds defamatory. -3- STATEMENT OF DECISION C.C.P. SECTION 632 course of a few minutes. It was clear from his deportrnent and tenor that he held a strong animus toward Bob Brewer. That said, the court was not convinced by the evidence that he had a part in the LYON, CURTIS, EVERT "plan" to put Brewer out of business. B. PERV Defendants Conspire with LYON to Put Brewer Out of Business Around the time of his departure from CRV, LYON contacted Dawn Wright and told her that Paul Evert was paying him $20,000 to leave Clovis RV. He told her that the plan was that he would stay home for a month and then begin working at Paul Evert's so it wouldn't look like he was going straight from one to the other. Regarding the money, LYON told Ms. Wright that "he was to take Bob Brewer down so that's what the payment was for." Ms. Wright was not the only witness to whom LYON was revealing his, EVERT and plan. Scott Pattie, an individual who sells aftermarket products in the RV industry, also worked for both PERV and Bob Brewer. He testified that he'd met LYON in 2003 or '04, when LYON was finance manager for PERV and Pattie was attempting to have some of his products placed in the store. Mr. Pattie stayed in contact with LYON and, when he lost his job in 2007 with PERV, it was Pattie who recommended Brewer hire him as finance manager at CRV. Shortly after LYON left CRV, he called Pattie two to three times a week. On the first few conversations, LYON told Pattie that "some big things were going to happen and that he was going to bury Clovis RV and Fresno RV and he was going to bury Bob Brewer." Ms. Wright was also told by LYON that at the end of his time with CRV, he'd been having meetings with CURTIS and EVERT about the plan to leave. During one of those planning sessions, it was decided that LYON would be paid $8,500 as a "signing bonus." The payment was never recorded as income to LYON. Until trial, it was never accounted for by PERV at all. Furthermore, the payment was brought, surreptitiously, to a restaurant in North Fresno remote from any of the RV dealerships in question by the Controller of PERV, Dale Cantrell. Mr. Cantrell testified that Mr. Evert asked him to do this personally; he'd never been asked to do this before, nor has he since. The attempted explanation of the second payment, a $10,000 check made to LYON by PERV the .9- STATEMENT OF DECISION C.C.P. SECTION 632 day after the DMV raid in September 2009, was equally suspect. The following was a question/answer between Curt Curtis, Vice President and General Manager of PERV and his lawyer during trial: MR. DYER: Okay. All right Now, back there in line here for a second there's been discussion about this $10,000 payment to Aaron in September of 2009 do you recall that? Yes. Now, how do you character that $10,000 transfer of funds to Aaron? It was as a draw. And a draw is a what? Draw is an advance on eamings for the future. Okay. Why wasn't that $10,000 recorded somehow? Well, we didn't know about it until this case came up and we started looking for all checks I think somewhere well, into the research of it was brought to light we did the research on it and somebody in our office or Dale we're not sure actually expensed the 10,000 instead of putting it on his accounts receivable. So when Aaron left Paul Evert RV instead of owing 15,000 that one exhibit shows it would have been 25,000; is that right? A. Yes. Consistent with Ms. Wright's testimony about LYON telling her of the secret meetings with CURTIS, LYON also told Scott Pattie of his involvement and plan. Mr. Pattie testified that he (LYON) told him he now didn't want any part of this (the plan to put Brewer and his companies out of business). LYON confided in Pattie that he'd been approached by, and had been talking with Paul Evert and Curt Curtis about putting Brewer out of business but the plan wasn't working out the way it was supposed to. LYON further told Pattie that he was under a lot of pressure from "Paul and Curt;" he realized that from some of Curt Curtis' statements his job there (at PERV) was not safe. LYON told Pattie that because of the whole incident, his name would be tarnished and he would never be able to operate in the same capacity within this business structure -- RVs or anything like that because of what had taken place. LYON continued to use Mr. Pattie as his sounding board while the plan to force Bob Brewer and his companies out of business was unravelling. Pattie testified that LYON called him two to three times a week after the DMV issue arose. LYON was telling Pattie that he wanted everything to go away. "He wanted to he was panicked, he was upset, he wanted -- he just wanted everything to go away." To the best of Mr. Pattie's recollection, these conversations occurred around the first part of November, 2009. -10- STATEMENT OF DECISION .C.P. SECTION 632 ix.) La) In Mr. Pattie's opinion, the main reason LYON was communicating to him was because he wanted "the plan" communicated to Brewer and no one from the dealership would now talk to him. Mr. Pattie testified that he did, in fact, tell Brewer that LYON wanted it all to go away. According to Scott Pattie, LYON communicated that he was well aware that he was going to "take the fall for all of this; that he was not the one who really initiated this and was talked into doing it." LYON further confided in Pattie that he "was going to be made the bad guy" to everybody and that his business reputation as well as his future in that business was ruined. Mr. Pattie testified that at this point, "he was panicked." LYON's version that he was just an innocent "whistleblower" simply was not credible, nor did it comport with the evidence presented. From the evidence, it was overwhelmingly clear that a plan was conceived with CURTIS and EVERT, during the most severe downturn in the economy since the Great Depression, to put PERV's largest competitor out of business. That plan begin with the PERV Defendants painting Plaintiffs as fraudsters. Their only hurdle? They needed a "fraud;" at the Madera County Fairground, they found it. C. The "Darvl Wells" Deal Daryl Wells, a Fresno-area IRS employee, testified that in May of 2009 he attended an RV show at the Madera Fairgrounds and identified LYON in court as the person with whom he dealt at the show. He "bought" a travel trailer from LYON, but was told he couldn't take it from the show because it needed to be "shampooed, cleaned-up and then made ready for him to pick up at the dealership." After waiting a few weeks and hearing nothing from LYON or CRV, Wells called and learned that he had been denied credit a couple weeks after the Madera Fairground show where he first met LYON. Disappointed, he went to PERV in an attempt to get a trailer, but his credit was denied there as well. He was finally able to make a deal with LYON at the CRV dealership in July of 20096. Wells testified that it was LYON again, who completed his loan paperwork at the CRV dealership for the trailer he ended 6 The court finds no coincidence that the telephone calls between LYON and CURTIS began at the same time the deal with Wells began and continued through consummation of the deal and before LYON left CRV. .3 STATEMENT OF DECISION C.C.P. SECTEON 632 Ix) DJ up with. He had no idea that his third-time-is-a--charm qualifying was due to his loan application paperwork being altered. Mr. Wells testified that it was DMV investigator Gideon Coyle who first showed him the falsified paperwork with his signatures taped to the bottom. To Mr. Wells, it looked like it was a different contract than he had signed; testifying that it looked like it was cut around his signature and taped in another signature area. At trial it was revealed that the statements of income Mr. Wells had given LYON had been subsequently altered to show an income amount nearly double his actual income, as evidenced in Exhibits 96 97. MR. BREWER: And would you flip back to the first page of Exhibit 97? MR. WELLS: Okay. Look at the top right I'm sorry the top left of the first page of Exhibit 97 where it's circled? Okay. Do you see that? Yes. Is that an accurate amount of income? For 2009, 44 thousand Yeah that's about right. Okay. Let's go back to the second page of Exhibit 97 and look at that amount that's circled can you see it? Yes. What is that do you see a different amount? Oh my gosh! It's more than my wife's. Was that on your W-2 when you gave to Mr. Lyon? Most definitely not -- none of them -- I could go back to 2007 on the computer program for the government; I could guarantee you at a GS-7 I'm not making that much money. Now, turn back to Exhibit 96? I'm sorry oh, 96. Yeah Exhibit 96? Okay. If you'll look at the top right there's two columns there's a left column and a right column do you see that? For wage. Yes. Do you see that? Number one. Does that does that accurately reflect your income? For the very top one? -13- STATEMENT OF DECISEON C.C.P. SECTION 632 ix) When you gave it to Mr. Lyon did it have that number on it the $61,621.41; what year is this? This is for 2009? A That's when I was still a GS-7 so I would say I don't believe I made that much money as a GS-seven. A Because I could pull up any of these on my computer like right now. Did Mr. Coyle ask you about this about why this is different than what you believe? A [Nods] No, this is actually the first time I seen these numbers on it [sic]. On July 13, 2009, Mr. Wells' "application information" was faxed to Merrick Bank (Ex 1124). According to the records of Merrick Bank, the Wells' application was received by fax and processed on July 14, 2009. (Ex. 1120). The approval from Merrick Bank was given with stipulations on July 14, 2009, which required Mr. Wells' pay stubs, W~2's and references. (Ex. 1120, pg. 2 and 1122 pgthe conditions of approval by Merrick Bank on the July 14, 2009 approval was their receipt of "Most recent pay stubs proving base gross income as stated on application." (Ex. 1122, pg. 4). As earlier noted, Mr. Wells testified that LYON was the employee who completed his credit application. LYON did not deny that it was his handwriting on the credit application, including the purported $5,000 per month income Mr. Wells was "earning." (See Ex. 1124, pp. 1 and 4). On July 15, 2009, Mr. Wells' W-2 was faxed to Merrick Bank NOT from CRV, but from (Ex. 1123 pg. 2). LYON was questioned about the document bearing the fax header, He didn't hesitate in his recognition of the fax banner as that of Fresno Mitsubishi. The only logical reason the proof of income would have been faxed from Fresno Mitsubishi on July 15, 2009 is that LYON did not want a record at CRV that he faxed the altered W-2 to Merrick Bank. The fact that Merrick Bank received the pay stubs and W-2's on July 15, 2009, is evidenced by the Incomplete Funding notice from Merrick Bank dated 7/22/09 which shows the "proof of income for the customer" is good for 30 days and expires on 8/14/09. (See Plaintifi" Ex. 94; D. Ex. 1119 The telephone records offered at trial also established that LYON called Merrick Bank on July 27 and 28, 2009, just before Merrick Bank terminated its lending relationship with CRV on July 28, 2009. LYON called Merrick Bank anonymously on July 27 and 28 using a to block his telephone number from Merrick Bank. The court concludes LYON did this because he was reporting to Merrick .13- STATEMENT OF DECISION .C.P. SECTION 632 IQ la.) Bank that the Wells proof of income, which the court concludes he himself submitted to the bank, was falsified. LYON was trying to cover his tracks, as well as performing the "job" for which he was paid by PERV. After his departure from CRV and following his $8,500 payment from PERV, LYON sent the actual Wells income information to Merrick Bank. Through this submission LYON attempted to blame Carson White by writing his name on the documents. No credible evidence was presented to prove Carson White did anything with the Wells application. 1. Carson White and the FBI Carson White was the finance manager at FRV at the relevant times in this litigation. He was friends with Shaun Brewer, son of Bob, beginning in grade school. This long-term friendship is he came to work for the Brewer RV companies. Around the time of the "Wells deal" in July of 2009, White recalled coming to CRV and finding LYON alone, after work, at the dealership. He saw that LYON had cut papers, scissors, and "all over his desk." When asked what "the hell" LYON was doing, his response was "finishing up a deal." White testified that he knew at that moment that something was very wrong and immediately left and called Bob Brewer. The next day, as Mr. White was driving by his house, he saw LYON's truck parked six houses down from his near the community mailbox. White did not socialize with LYON nor did he invite him to his house. When he approached LYON's vehicle and spoke to him, LYON began saying the was after him" and that he'd had "24 partners in his career and never ratted on or rolled on any of them." White recounted the bizarre behavior noting that LYON was "just all over the place." This odd exchange was also immediately reported to Bob Brewer by Mr. White. 2. The Documents Mr. Coyle testified that the documents (Wells deal) brought to him by LYON had tobacco spittle on them. LYON testified that "everyone" in the finance office chewed tobacco. However, when confronted with that specific question at trial, out of any obvious context, Carson White testified that he'd never used a tobacco product of any kind. He said at the time in question, LYON was the only one who "chewed." Interestingly, LYON was chewing tobacco and spitting while this trial was in session. -14- STATEMENT OF DECISION .C.P. SECTEON 632 D.) When confronted on the record, and under oath, he denied his conduct before changing his story and admitting the he was chewing and spitting in court. The evidence supports the conclusion that LYON was the only one in the office who chewed tobacco. LYON brought all of the documents from the only deal that had shown evidence of bank fraud upon Merrill Bank to Gideon Coyle -- the "Wells" deal. Those documents included check stubs where the gross income amount had been doubled as well as falsified information on the application. Although the defense attempted to shift the blame from LYON to Carson White for "kinking" paper, the only tangible, documentary evidence of fraud introduced at trial was that of the deal with Daryl Wells; the deal that LYON was responsible for putting together, submitting to Merrick Bank and then to Gideon Coyle of the DMV. LYON had taken numerous documents that were supposedly "fraudulent" from the dealership to give to the DMV to prove that the dealership, Bob Brewer and Carson White were involved in a massive bank fraud. Not surprisingly, none of the alleged, "fraudulent" deals were introduced at trial by any of the Defendants to corroborate their claim. D. Gideon Coyle and the DMV Raid Part of the "plan" to take Brewer down included LYON taking "fraudulent" documents from the CRV dealership and then reporting that "fraud" to the DMV. So insidious was this plan that LYON first created false documents (see "The Wells deal" described above) and then provided the same to the DMV investigator, Gideon Coyle, as evidence of the "wrongdoing" going on at CRV. While the false communication by LYON to Coyle, and even possibly the self-made "fraudulent" documents are protected by Civil Code ?47 as to LYON, the overwhelming evidence of LYON's ill-intent and conduct independent of any communication with the DMV, corroborate his intent to injure Plaintiffs. 1. Gideon Coyle Gideon Coyle is, and was at the time of the investigation at issue, a sworn peace officer and investigator in the fraud unit of the Department of Motor Vehicles in California Mr. Coyle had been in law enforcement for 25 years as of the time of trial. Never, however, in his 25 years, had he investigated a case such as this one. In fact, it was a series of "firsts" for him. The fraud investigation against the Brewer companies was Coyle's first as a DMV investigator. -15. STATEMENT OF DECISION C.C.P. SECTION 632 ix) Prior to this 2009 case, he'd never investigated a case concerning, in his words, "the submittal of false financial statements and potentially some bank fraud." Not surprisingly on the facts in this case, his entire investigation was driven by, and hinged on, information and direction he was receiving from Aaron LYON. Mr. Coyle testified that LYON was the person who gave him instructions on how to look at deals. LYON gave him "step--by-step" instructions on how to create and complete a fraudulent loan document. That was, in fact, how he found the Woods deal. Although Coyle concluded that it was a "Carson White" deal, no signatures of Carson White were found anywhere on it. Again not surprisingly, Carson White became the focus of Coyle's investigation through information being supplied to him by LYON. LYON was Coyle's key, if not only, witness. Before the raid took place, LYON gave Coyle specific names of "bad" deals to find. Coyle testified that he had no idea LYON was contacting the media to be present at the time of the raid. Mr. Coyle testified that, had he known that LYON had been paid $8,500 by PERV to quit CRV and then another $10,000 unreported payment the day after the DMV raid, it would have changed the way he looked at this case. Mr. Coyle never did a background check on LYON. He didn't know that he'd been previously convicted of a felony until the middle of the investigation. He also didn't know that LYON was working for PERV when the investigation began. MR. BREWER: Okay. And it wasn't until after that Mr. Lyons was arrested for being in possession of the deal jackets from Paul Evert RV that you even knew that Aaron Lyon worked for Paul Evert; is that correct? A. That's correct. Q. And now, the deal jackets that Mr. Lyon was in possession with at Paul Evert RV contained customer financial information, Social Security numbers that sort of thing correct. A. Yes. MR. BREWER: Do you know how Mr. Lyon came into possession of those documents? A. I don't know how he did, no. Q. Okay, did you know that Mr. Lyon had been terminated from Paul Evert A. No. Q. Did you -- did you ever learn that Mr. Lyon had been terminated from Paul Evert RV at any time? -16 STATEMENT OF DECESION C.C.P. SECTION 632 Yes. When did you find that out'? Right around the time that he was arrested. Did you know that -- that Aaron Lyon had worked for Paul Evert RV and was -- had worked for Paul Evert prior to going to work for Clovis No. Coyle never knew that LYON, CURTIS and EVERT were sitting across the street at Hedrick's Chevrolet when he and his colleagues from DMV were conducting the raid on CRV. 2. The Raid, The Media And Efforts To Damage CRV Contrary to Defendants' contentions, it was not mere coincidence that CURTIS and EVERT were present and sitting across the street at Hedrick's Chevrolet during the execution of the search warrant at CRV with LYON. No other logical conclusion can be drawn from the testimony. CURTIS testified that he just "happened" to be passing by when the DMV raid on CRV occurred. "Coincidentally," LYON who lived nowhere near the junction of Shaw Avenue and Highway 168 (the location of CRV) and was no longer an employee of CRV, also "happened" to be passing by, either going to or coming from breakfast, and stopped across the street at Hedrick's Chevrolet to watch the raid occur. Equally unbelievable was the following attempt to explain the unrecorded, $10,000 "mystery" check paid to LYON the day after the DMV raid: MR BREWER: Now the check that's missing from your payroll, Exhibit 28 is for $10,000; correct? MR. LYON: Yes. Q. And what was that check for? A. I think it took about a week to get, I think I was more or less asking for a little bit of a loan or something because I got behind on my bills and we had the October show starting sometime beginning of October that I had hoped to be able to make it up. Did that figure have to do with the DMV raid? Zero. The day of the DMV raid was September 28th, 2009; right'? Correct. Did you call Paul Evert that day? I believe I did. Did you call curt Curtis that day? I believe I did. Did you call channel 24? I don't recall doing that. Do you recall calling channel 30? 7- STATEMENT OF DECISION C.C.P. SECTION 632 don't remember which ones were called but I had called some, I don't recall which right now. So you did call television stations; correct? Yes.7 And did you that at the instruction of Paul Evert; correct? He thought it would be a good idea. Did he tell you to call all 3 stations? Yes. rosgpro The end result of Coyle's LYON-driven investigation was that no charges were filed by the District Attorney and nothing from the DMV's own internal, administrative process resulted in any action against Plaintiffs nor Brewer nor White. In fact, no criminal or administrative action was commenced against anyone as a result of the investigation. In short, there was no sustainable evidence of fraud committed by Plaintiffs. Furthermore, and equally compelling, no evidence of fraud by Plaintiffs was produced during this trial by any of the PERV Defendants to support their story that "kinked" deals rim amok was the reason LYON was leaving CRV. E. Negative Comments by PERV Defendants re Bob Brewer andlor RV businesses owned by him 1. The Mufiozes: Witness Cindy Munoz and her husband had been on vacation on the Central Coast and purchased a travel trailer at Pisrno RV (a dealership owned by Bob Brewer and now by his son). Feeling they made a hasty decision, they looked around at other dealerships on their way home down Freeway 41. When they got to Paul Evert RV, the following took place: MR. BREWER: All right. And what -- what were you told, if anything, about Pismo A. When we walked into the office, we were just talking about the RVs and different options that they had to offer, and we had mentioned that we had gone over and we made a hasty decision we felt they probably rushed into the decision of purchasing an RV without looking around, and they asked where we had looked and we told him it was there, at Pisrno RV, and they said that they had heard that they were either selling or going out of business.3 And so when my husband and I drove home we thought oh, maybe we were hasty -- really hasty in 7 LYON again used *67 to block his telephone number when he called the television stations. His contemporaneous calls to CURTIS and EVERT, however, were open cails no *67. Though the "communication" to the DMV regarding the "fraud" is arguably protected under Civ.C. ?47, the ancillary conduct and comments are not. 8 Pismo RV never went out of business and, at the time of triai, was stiil an operating entity owned by Bob Brewer's son, Shaun Brewer. J8- STATEMENT OF DECISEON C.C.P. SECTION 632 Ex) DJ making it decision and we should -- we were worried about warranty and going back and if something happened to our trailer where we were going to go if this is true, so that's when we canceled it. This evidence was consistent with the comments by CROWELL and LYON caught on secret tape by Mike Robinson wherein they made negative comments about Brewer's businesses, his likelihood of going to jail and that his products were fake. All of these comments were intended to carry out the plan of putting Brewer out of business. 2. Statements to GE Capital (Eddie Valdez} from Aaron LYON resgo Clovis RV The following is testimony from Eddie Valdez, a field service representative for GE Capital. He testified in trial on May 23, 2013. MR. BREWER: And does GB or did GE provide flooring for Clovis RV in 2009. EDDIE VALDEZ: Yes. And did GE provide flooring for RV outlet, Fresno RV Outlet in 2009? Yes. And did GE provide flooring for Paul Evert in 2009. Yes. And were you you were employed by GB in 2009, correct? Yes. Okay, now, at some point in time did you learn that Fresno RV, Clovis RV, Bob Brewer, was under DMV investigation? Yes. And how did you learn that? I heard a rumor. Who did you hear the rumor from? From Aaron Lyon. Okay, what were the circumstances under which Aaron Lyon told you about a DMV investigation of Clovis RV, Fresno RV, and Bob Brewer? During a floor check at Paul Evert's. Okay. Tell us what happened. You went in unannounced; is that correct? Correct. And what did you undertake to do? Just doing my normal inspection. I believe I was reviewing their DMV records, and I happened to run into Aaron on my way to where they keep their records at, and we had a small conversation, and he mentioned that if I had well first I was just -- he had asked me what are you -- I just said hello hey you working here now, and he said yes, and he asked me if he could help me with something I told him looking for the EUR32 OE -19- STATEMENT OF DECKSION C.C.P. SECTION 632 DMV records he showed me where they're at I proceeded to do what I do there for that audit, and then he just mentioned if I had heard that that RV outlet was being investigated for something to do with their DMV and I told him no. That I had not heard anything about that. Q. Okay. Did you write up a report? A. Of that incident? Q. Yes? A. Yes. (Trial Exhibit 4) MR. BRADLEY: Okay. Do you have a recollection of -- of him giving you a phone number for some DMV investigator? A. Yes. Q. Okay. Do you did he also give you the number for a district attorney officer? A. Yes. As admitted by CURTIS, Eddie Valdez was also told by him about the DMV raid as it related to FRV and CRV. 3. Comments by Aaron Lyon and other Defendants about Plaintiff" owner and employees "going to jail." As became typical of Aaron Lyon during the trial, when first confronted with information which might be perceived to be negative for him, his memory suffered from constant, convenient and consistent fogginess. Comments attributed to him telling others that Bob Brewer and Carson White were "going to jail," were but one example. As LYON testified on May 29, 2013: MR. BREWER: Did you ever tell anyone that Bob Brewer is going to go to jail? Not that I recall, no. Did you tell anyone that Carson White was going to go to jail? Certain friends ask, family, sure, but I don't recall doing that. So it's your testimony that you didn't tell anybody that came into Paul Evert RV that Carson White was going to jail; correct? Not that I recall. 10? MR. BREWER: Now, did you tell anybody that Fresno RV was going inform go out of business? A. Not that I recall. MR. BREWER: And did you tell anybody that Clovis RV was going to go out of business? MR. LYON: Just as I have stated before, family and friends. MR. BREWER: You can answer my question yes or no. .20- STATEMENT OF DECISION C.C.P. SECTION 632 ix) La) . Not that I recall, I'm sorry. So have you ever told anybody that the business manager of Fresno RV was going to go to jail? No, I don't believe I did. Did you tell anybody that the business manager of Clovis RV was going to go to jail? No, not that I recall. Did you -- okay and did you tell anybody that the owner of Clovis RV was going to go to jail'? No. Did you ever tell anyone that the Fresno RV dealership wouldn't be able to take care of their Warranties after they got closed down by the Probably. And what did you tell that to? I'm not sure, but I if someone gets counsel there's probably a lot of truth to that if that were to happen. Okay, so if it would happen that would be the case; correct? If they had a warranty in place and it went out of business they may have a hard time finding someone else to service their unit. Ask you said that to a number of commercial? I didn't say that, irrelevant don't recall saying it, but it sounds like something possible, I don't recall, though, but it makes sense. co?' to?' Although LYON later tried to justify his comments about Bob Brewer and Carson White "going to jail" by attributing that statement to Coyle, Coyle testified under oath that he NEVER said such a thing. Furthermore, contrary to LYON's denials as exarnpled above, the evidence was overwhelming that LYON told many, many people banks, floor checkers and potential customers9 -- that Brewer was "going to jail." LAW FINDINGS A. Plaintiffs Are Private Citizens And The Defamation Did Not Concern A Matter Of Interest." During trial, the court heard argument regarding the "status" of the Plaintiffs as public figures or private citizen (Bob Brewer), whether the alleged defamation was private or a matter of public concern. 9 This would include the "shiIi" customer, Private Investigator Mike Robinson. Though the defense argued that he didn't count because he never intended to buy anything, the court discards this reasoning. If a real customer were toid that a competitor was a criminal, that his business was closing and that to buy anything from him would mean that the customer would be without recourse for warranty service, the East logical thing that "customer" would do would be to go to the "bad" dealer to check those facts. In the courts opinion, the ONLY way to uncover this type of evidence was to use an undercover investigator. -21- STATEMENT OF DECESION C.C.P. SECTION 632 D.) After hearing argument from both sides, the court ruled that Plaintiff was private and the defamation complained of was also a private, nonmedia action and not of "public interest" as defined in the cases following New York Times and Gertz. Although recognizing that "in certain instances the distinction between media and nonmedia Defendants may be difficult to draw," the court stated that "no such difficulty is presented with credit reporting agencies, which are in the business of selling financial information to a limited number of subscribers who have paid substantial fees for their services." Id., at 73, 461 A.2d, at 417. Relying on this distinguishing characteristic of credit reporting firms, the court concluded that such firms are not "the type of media worthy of First Amendment protection as contemplated by New York Times Co. v. Sullivan, 376 U.S. 254, 84 710, 11 L.Ed.2d 686 (1964), and its progeny." Id., at 73- 74, 461 A.2d, at 417-418. It held that the balance between a private plaintiffs right to recover presumed and punitive damages without a showing of special fault and the First Amendment rights of "noninedia" speakers "must be struck in favor of the private plaintiff defamed by a nonrnedia defendant." Id., at 75, 461 A.2d, at 418. Accordingly, the court held "that as a matter of federal constitutional law, the media protections outlined in Gertz are inapplicable to nonmedia defamation actions." Ibid. Dun Bradstreet Inc. v. Greenmoss Builders Inc. (1985) 472 U.S. 749, 752-53 [105 2939, 2942, 86 L.Ed.2d 593] In a defamation claim brought by a private person, concerning a private issue, the burden of proof is negligence. Plaintiff must prove that one or more of the alleged defamatory statements made by Defendants were made to a person/persons other than the Plaintiff; that the person/persons reasonably understood that the statements were about Plaintiff; that these people reasonably understood that Plaintiffs could not be trusted and were criminals and that Defendants failed to use reasonable care to determine the truth or falsity of the statements. That a private plaintiff is not required to prove malice is based upon the state's interest in protecting the reputation of private individuals. (Gertz v. Robert Welch, Inc., supra, 418 U.S. at p. 343 [41 L.Ed.2d at p. 807].) An "individual's right to the protection of his own good name 'reflects no more than our basic concept of the essential dignity and worth of every human being-a concept at the root of any decent system of ordered liberty.' (Id. at p. 341 [41 L.Ed.2d at p. 806], quoting Rosenblatt v. Baer (1966) 383 U.S. 75, 92 [15 L.Ed.2d 597, 609, 86 669] [conc. opn. of Stewart, Unlike -22- STATEMENT OF DECISION C.C.P. SECTION 632 I0 public officials or public figures, (cf. Fletcher 12. San Jose Mercury News (1989) 216 Cal.App.3d 172, 183~l84 [264 Cal.Rptr. 699]) private individuals are more vulnerable to injury and therefore the state has a greater interest in protecting them. (Gertz v. Robert Welch, Inca, supra, 418 U.S. at p. 344 [41 L.Ed.2d at p. 808].) Carney v. Santa Cruz Women Against Rape (1990) 221 Cal.App.3d 1009, 1015 B. Communications By LYON To Coyle In Furtherance Of The DMV _I__nvestjgation Are Protected 133' Civil Code 847: Cornments Bv LYON And Other Defendants About The Investigation Are Not So Protected. The California Supreme Court addressed the communication element of the litigation privilege in Rusheen v. Cohen (2006) 37 Cal.4th 1048, 39 Cal.Rptr.3d 516, 128 P.3d 713 (Rusheen) [discussing former section 47, subd. now section Because the litigation privilege protects only publications and communications, a threshold issue in determining the applicability of the privilege is whether the defendant's conduct was communicative or noncomrnunicative. (Rusheen, supra, 37 Cal.4th at p. 1058, 39 Cal.Rptr.3d 516, 128 P.3d 713, quoting Kimmel v. Goland (1990) 51 Cal.3d 202, 211, 271 Cal.Rptr. 191, 793 P.2d 524.) The distinction between communicative and noncommunicative conduct hinges on the gravamen of the action. That is, the key in determining whether the privilege applies is whether the injury allegedly resulted from an act that was communicative in its essential nature. The burden of proving malice must be borne by Plaintiffs. (Lundquist v. Reusser (1994) 7 Cal.4th 1193, 120241203.) "Malice" in Civil Code section 47, subdivision was long interpreted as involving, if not actual ill will, at least "the publisher's lack of belief, or of reasonable grounds for belief, in the truth of the defamatory matter." (Emde v. San Joaquin County Central Labor Council (1943) 23 Cal.2d 146, 154-155 [143 P.2d -23- STATEMENT OF DECISION C.C.P. SECTION 632 Ix) DJ Civil Code Section 47(b) provides: privileged publication or broadcast is one made: In any (1) legislative proceeding, (2) judicial proceeding, (3) in any other official proceeding authorized by law, or (4) in the initiation or course of any other proceeding authorized by law and reviewable pursuant to Chapter 2 (commencing with Section 1084) of Title 1 of Part 3 of the Code of Civil Procedure. . The section 47(b) privilege applies to complaints to governmental agencies requesting that the agency investigate or remedy wrongdoing. (Hagberg v. California Federal Bank, 32 Cal. 4th 350, 363 (Cal. 2004); See also Passman v. Torkan, 34 Cal. App. 4th 607, 619 (Cal. App. 2d Dist. 1995) ("Accordingly, we conclude communications designed to prompt a criminal prosecution directed to an official governmental agency empowered to commence criminal prosecutions are absolutely privileged as publications made in an official proceeding authorized by Because section 47 provides an absolute and unqualified privilege it bars any tort action based on the privileged communication without regard to truth or falsity of the communication or the malice of the communicant. (Hagberg v. California Federal Bank, 32 Cal. 4th 350, 375 (Cal. added)) In Hagberg, the California Supreme Court explained that it did not make any difference if a report to the police was in good faith (see Hagberg, supra, 32 Cal.4th at pp. 366-3 70, disapproving Fenelon v. Superior Court (1990) 223 Cal. App. 3d 1476.) Hagberg disapproved Fenelon v. Superior Court (1990) 223 Cal. App. 3d 1476, which was the one appellate case that had articulated a good faith requirement for the privilege to apply), and the necessity of good faith was the very point on which the dissent took issue with the majority. (See Hagberg, supra, 32 Cal.4th at p. 377 (dis. opn. of Brown, Hence, the absolute privilege of Civil Code Section 47 has been applied in "numerous cases" involving "fraudulent communication or perjured testimony." (Silberg v. Anderson, supra, 50 Cal.3d at p. 218; see, Home Ins. Co. v. Zurich Ins. Co. (2002) 96 Cal.App.4th 17, 20, 22-26 [116 Cal.Rptr.2d .24- STATEMENT OF DECISION C.C.P. 632 I-Q 583] [attorney's misrepresentation of available insurance policy limits to induce the settlement of a lawsuit]; Doctors' Co. Ins. Services v. Superior Court (1990) 225 Cal.App.3d 1284, 1300 [275 Cal.Rptr. 674] [subornation of perjury]; Carden v. Getzofl (1987) 190 Cal.App.3d 907, 915 [235 Cal.Rptr. 698] [perjury]; Steiner v. Eikerling (1986) 181 Cal.App.3d 639, 642-643 [226 CaI.Rptr. 694] [preparation of a forged will and presentation of it for probate]; O'Neil v. Cunningham (1981) 118 Cal.App.3d 466, 472- 477 [17 3 Cal.Rptr. 422] [attorney's letter sent in the course of judicial proceedings allegedly defaming his client].) The privilege has also been held to apply to "statements made prior to the filing of a lawsuit." (Hagberg v. California Federal Bank supra, 32 Cal.4th at p. 361.) (See also Kemps v. Beshwate, 180 Cal. App. 4th 1012, 1019 (Cal. App. 5th Dist. 2009) privilege applies 'without respect to the good faith or malice of the person who made the statement' in 'all kinds of truth-seeking proceedings: judicial, quasi-judicial, legislative and other official Distasteful as it may be under the facts the court has found, LYON enjoys an absolute privilege with respect to his false and malicious communications with the DMV investigator. LYON is also absolutely privileged with respect to any damages allegedly incurred by Plaintiffs as a result of the communications he made to Investigator Coyle in the furtherance of his DMV investigation. However, distinguished from the facts in Hagberg, supra, where the defendant had allegedly made a false and malicious police report and was held to have been absolutely privileged from any claim of false imprisonment arising from that false information, here it is not what LYON told Coyle regarding the fraudulent documents he created to initiate the investigation, but rather, the dissemination of the false comments about Brewer "going to jail," that CRV and/or FRV's warranty's would not be honored and the dissemination of the DMV investigation which was not intended by LYON to convey the fact of the investigation, but to implicitly communicate that Brewer was a crook and his RV dealerships were going to be shut down and he and his accomplices imprisoned. There is no conflation of "protected" and "unprotected" communication as LYON's counsel artfully argued. -25- STATEMENT OF 632 U.) U: Since no other defendant -- CURTIS, EVERT, CROWELL and/or PERV -- made any communications to a government agency in the furtherance of an investigation, all defamatory comments attributed to them are not protected by Civil Code ?47. As the court has discussed above, it finds that LYON, in connection with CURTIS and EVERT created the "injury" in the only fraudulent deal documents presented as evidence in this case, the "Wells" deal. Although the ?47 privilege applies to LYON's false comments to Coyle in furtherance of Coyle's investigation, the false insinuations intentionally created by LYON, CURTIS, EVERT and others informing others about the investigation are not so protected nor does the court find any published case remotely close on facts to this case to say the opposite. C. Liabili LYON of PERV based on statements made by CROWELL and "'The sine qua non of recovery for defamation is the existence of falsehood.' [Citation] Because the statement must contain a provable falsehood, courts distinguish between statements of fact and statements of opinion for purposes of defamation liability. Although statements of fact may be actionable as libel, statements of opinion are constitutionally protected. [Citation.]" (McGarry, supra, 154 Cal.App.4th at p. 112, 64 Cal.Rptr.3d 467.) That does not mean that statements of opinion enjoy blanket protection. (1bid.) On the contrary, where an expression of opinion implies a false assertion of fact, the opinion can constitute actionable defamation. (Milkovich v. Lorain Journal Co. (1990) 497 U.S. 1, 18-H19, 110 2695, 111 L.Ed.2d 1.) The critical question is not whether a statement is fact or opinion, but "whether a reasonable fact finder could conclude the published statement declares or implies a provably false assertion of fact.' (McGarry, supra, 154 Cal.App.4th at p. 113, 64 Cal.Rptr.3d 467.) Wong v. Tai ling (2010) 189 Cal.App.4th 1354, 1370 [117 Cal.Rptr.3d 747, 762] defendant is liable for what is insinuated, as well as for what is stated explicitly. [Citation.]" (Bates v. Campbell (1931) 213 Cal. 438, 442, 2 P.2d 383.) Thus, as noted, a Writing can be libelous if it implies a false assertion of fact. (McGarry, supra, 154 Cal.App.4th at p. 112, 64 Cal.Rptr.3d 467.) Wong V. Tai Jing (2010) 189 Cal.App.4th 1354, 1372 [117 Cal.Rptr.3d 747, 763] -26- STATEMENT OF DEC ISION C.C.P. SECTION 632 Ix) Ia.) Comments by CURTIS, LYON and CROWELL regarding, 1) the efficaey of product sold by Plaintiffs; 2) that Plaintiffs were being investigated by the DMV (a matter earlier discussed wherein the intended purpose for these comments was not the fact of the investigation, but rather the insinuation of bad business conduct by Brewer by CURTIS, EVERT LYON in furtherance of their plan to tarnish and/or ruin Plaintiffs); 3) that Plaintiffs would not be able to honor warranties on products they sold and 4) that certain individuals associated with Plaintiffs would be "going to jail," are business and reputation slander. If not explicit slander, they are precisely the type of "insinuations" the Bates court and those following its holding, described. [W]here an expression of opinion implies a false assertion of fact, the opinion can constitute actionable defamation. (Milkovich v. Lorain Journal Co. (1990) 497 U.S. 1, 18-19, 110 2695, 111 L.Ed.2d 1.) The critical question is not whether a statement is fact or opinion, but "whether a reasonable fact finder could conclude the published statement declares or implies a provably false assertion of fact.' (McGarry, supra, 154 Ca1.App.4th at p. 113, 64 Cal.Rptr.3d 467.) "To determine whether a statement is actionable fact or nonactionable opinion, courts use a totality of the circumstances test of whether the statement in question communicates or implies a provably false statement of fact. [Citation.] Under the totality of the circumstances test, '[fJirst, the language of the statement is examined. For words to be defamatory, they must be understood in a defamatory Next, the context in which the statement was made must be considered.' [Citation.]" (McGarry, supra, 154 Cal.App.4th at p. 113, 64 Cal.Rptr.3d 467.) Wong v. Tai Jing (2010) I89 Cal.App.4th 1354, 1370 [117 Cal.Rptr.3d 747, 762] An employer may be liable for a defamatory statement made by its employee under the principle of respondent superior. (Sarzborn v. Chronicle Publishing Co. (1976) 18 Cal. 3d 406; Kelly v. General Telephone Co. (1982) 136 Cal. App. 3d. 278). In addition, an employer can be held liable for punitive damages where there is advance knowledge and conscious disregard, authorization, ratification or act of oppression, fraud, or malice on the part of an 0ffiC61', director, or managing agent of the corporation. (Civ. Code 3294(b); see White v. Ultramar (1999) 21 Cal.4th 563.) At a minimum, the statements to Investigator Robinson by CROWELL and LYON would satisfy this requirement for PERV's liability. .27- STATEMENT OF DECISXON C.C.P. SECTEON 632 Id Lo.) IV. CONCLUSION With the exception of CROWELL, Plaintiffs proved that the PERV Defendants conspired to and did defame them and, in so doing, injured their business reputation and their business sales and profits. However, Plaintiffs did not prove any specific item of damage. The court cannot find any evidence of specific financial loss as the result of a lost contract with Merrick Bank or any other bank; no specific loss from one of Plaintiffs' customers, such as the Mufiozes' who cancelled their contract with non-party Pisrno RV and the resulting lost profit; or any other customer that failed to purchase due to the defamation. As a result, the court finds no evidence of "actual" damages. However, the court did find Plaintiffs' economist more persuasive than Defendants', and, as the law allows and presumes, this court does find and orders the Plaintiffs take, $500,000 in assumed damages for damage to business reputation, sales and profits. The court further finds that the PAUL RV COUNTRY, a California Corporation by and through its employees, officers, directors and agents; PAUL EVERT, an individual; CHARLES E. CURTIS, JR., an individual and AARON LYON, an individual's conduct was willful and calculated to lead to the desired result of putting the Brewer companies out of business. The court finds by clear and convincing evidence that the acts committed with done so with the requisite fraud, oppression and malice to initiate a second phase of trial for punitive damages. Unless otherwise agreed by the parties and the court, the trial's punitive phase will commence on Monday, October 21, 2013 at 9:00 a.m. in this court. IT IS SO ORDERED. Hamilton Superior Court Dated: September 20, 2013. Je ge .23- STATEMENT OF DECISION C.C.P. SECTION 632 SUPERIOR COURT OF CALIFORNIA - COUNTY OF FRESNO FOR comer U55 omy Civil Department - Non-Limited I I30 Street Fresno, CA 93724-0002 (559)457-1900 TITLE or CASE: Fresno RV, Inc. vs Paul Evert's RV Country CASE NUMBER: CERTIFICATE or MAILING HCECGOM33 Name and address of person served: Wiiticrm K. Brewer 8880 Rio San Diego Dr, #1098 San Diego, CA 92108 CERTIFICATE OF MAILING Certify that I am not a party to this Cause and that a true Copy of the Minute Order and Copy of Tentative Statement of Decision was mailed first Class. postage fuity prepaid, in a sealed envelope addressed as shown betow, and that the notice was mailed at Fresno, California, on: Date: 9/20/2013 Clerk, by it . Deputy La' . Safiianav Peter S. Bradley, H71 W. Show Avenue, Suite 102, Fresno CA 93711 K. Brewer, 8880 Rio San Diego Dr, San Diego CA 92108 Gregory F. Dyer, 1800 Street, Sacramento CA 95814 BGN-06 R09-00 CERIIHCAIE or MAILING SUPERIOR COURT or cAur=oRNiA - COUNTY or FRESNO Ema" by' Civit Department - Non-Limited TITLE or CASE: Fresno RV, Inc. vs Paul Evert's RV Country Case Number: LAW AND MOTION MINUTE ORDER HCECGOM33 Hearing Date: 09/20/2013 Hearing Type: From Chambers Department: 402 Judge/Temporary Judge: Jeffrey Y. Hamiiton Court Clerk: M.Santana Reporter/Tape: Not Reported Appearing Ponies: Plaintiff: Not Present Defendant: Not Present Counset: Counsei: The matter previously taken under advisement, the court now rules; Plaintiffs take, $500,000 in assumed damages for damage to business reputation, sales and profits. Court initiates a second phase of triai for punitive damages. See attached copy of Tentative Statement of Decision. I Second phase -- Trial for Continued to Set for l0/2i/2013 at 9am. Dept. 402 for Punitive Damages Submitted on points and authorities with/without argument. [3 Matter is argued and submitted. [3 Upon filing of points and authorities. Motion is granted in part and denied in part. [3 Motion is denied with/without prejudice. Taken under advisement Demurrer overruled El gusffigfi days to answer amend Tentative ruiing becomes the order of the court. No further order is necessary. [3 Pursuant to CRC 391(0) and section no further order is necessary. The minute order adopting the tentative ruling serves as the order at the court. [3 Service by the clerk wili constitute notice of the order. Time for amendment of the compiaint runs from the date the clerk serves the minute order. [3 Judgment debtor sworn and examined. El Judgment debtor failed to appear. Bench warrant issued in the amount of Judgment: Money damages Default Other entered in the amount at: Principat interest 35 Costs Attorney fees Total Claim of exemption granted denied. Court orders withhoidings modified to per Further, court orders: El Monies held by levying officer to be released to judgment creditor. returned to judgment debtor. to be released to judgment creditor and balance returned to judgment debtor. Mondom Hm LAW AND MOTION MINUTE omen -- Not an Official Document Report Selection Criteria Case ID: 11CECGO1433 Docket Start Date: Docket Ending Date: Case Description Case ID: Page 1 of51 - Fresno RV, inc. vs Paul Evert's RV Country --JURY- Filing"Date: Friday April 29th, 2011 CONT Motion for continuance granted Type: 07 -- Business tort Status: Related Cases No related cases were found. Case Event Schedule /b anweb . co . oa.us/ cprodsnp/ ct. ack. . . Event DatelTime Room Lecation Judge Case 06--SEP-2011 Central Dept 404, Case Management, Conference Management 03:30 PM Division 1130 Street Conference Motion to 27-SEP-2011 Central Dept 403, Snauffer, Mark Disqualify 03:27 PM Division 1130 C) Street Seal Record 27-SEP--2011 Central Dept 403, Snauffer, Mark 03:27 PM Division 1130 Street Motion to 13-OCT-201 1 Central Dept 403, Snauffer, Mark Disqualify 03:27 PM Division 1130 Street Seal Record 13--OCT-2011 Central Dept 403, Snauffer, Mark - 03:27 PM Division 1130 Street Motion to Central Dept 403, Snauffer, Mark Compel 03:27 PM Division 1130 Street Motion to 26--JUN-2012 Central Dept 403, Snauffer, Mark Compel -- 2 03:27 PM Division 1130 Street Motion to 26-JUN--2012 Central Dept 403, Snauffer, Mark Compel -- 3 03:27 PM Division 1130 Street Motion to 15-AUG-2012 Central Ex Parte Snautfer, Mark Continue Trial 03:28 PM Division Summary 13--DEC-2012 Central Dept 503, Snauffer, Mark 1/21/2014 - Not an Officiai Document Page 50 of51 doct.cp docket 01-NOV-2013 Stipulation and Order filed Fresno RV, lnc., 04:30 PM Entry: Stipulation and protecitve order signed by Judge Hamilton and filed. gar Motion for continuance granted 09:01 AM EMT Continued Court Trial re: Punitive Damages is continued from 11/08/2013 to 12/20/2013 at 9:00 am. Dept. 402 per Court. Notice of Cal Setting Printed 09:04 AM Entry Docket entry for the letter produced from CDADOCT on 08-NOV-2013 by MSANTANA. 15--NOV--2013 Comment 02:01 PM Withdrawal of Joint Exhibit financial Records of Paul Everfs and GE Entry: Capital, by runner Ariana R. Cardona for Attorney Jeff Exhibit record signed for withdrawal. 20-DEC-2013 Minute order Judge Hamilton 12:04 PM Minute Order from Dept.: 402 Clerk: M.Santana Reporter: Connie Silva Nature of Hearing: Civil Court Trial Minutes Day 17 Second Phase regarding punitive damages Pursuant to the adjournment of 10/22/2013, the Court reconvenes with counsel present for second phase of trial regarding punitive damages. Witness Paul Evert retakes the stand, remains under oath and testifies on behalf of Plaintiff concludes at 9:20 a.m. Witness Charles Curtis takes the stand, remains under oath and testifies on behalf of Plaintiff. Court takes a recess at 9:46 a.m. Court reconvene at 9:52 a.m. Court and counsel have a sidebar discussion. Court reconvenes and takes a recess at 9:55 a.m. Entry: Court reconvenes at 10:12 a.m. with all parties present ready to proceed, trial resumes. Witness Susan Thompson takes the stand, remains under oath and testifies on behalf of Plaintiff concludes at 10:28 a.m. Witness Aaron Lyon takes the stand, remains under oath and testifies on behalf of Plaintiff concludes at 10:50 a.m. Court takes a recess. Court reconvenes at 11:05 a.m. with all parties present ready to proceed, trial resumes. Witness Dale Cantrell takes the stand, remains under oath and testifies on behalf of Defendant concludes at 11:24 a.m. Attorney Brewer makes closing argument to the Court on behalf of Plaintiff. Attorney Dyer makes closing argument to the Court on behalf of Defendant. Attorney Bradley makes closing argument to the Court on behalf of Defendant. Court takes matter under submission. 1/21/2014- -- Not an Officia1 Document Page 48 of51 anweb . co . fresno . ca.us/cpro . . 20--SEP--201 3 Minute order Judge Hamilton 10:54 AM Minute Order from Dept.: 402 Clerk: M.Santana Reporter: Not Reported Nature of Hearing: From Chambers The matter previously taken under En" advisement, the court now rules; Plaintiffs take, $500,000 in assumed damages for damage to business reputation, sales and profits. Court initiates a second phase of trial for punitive damages. Tentative Statement of Decision signed and issued. 20--SEP-2013 Clerk Cert of Mailing Printed 10:55 AM Em Docket entry for the letter produced from CDADOCT on 20-SEP-2013 by MSANTANA. 20--SEP-2013 Minute order printed 10:58 AM Em Docket entry for the letter produced from CDADOCT on 20-SEP-2013 by MSANTANA. 20--SEP-2013 Tentative Decision re: Trial 11:04 AM Tentative Statement of Decision issued by Judge Jeffrey Y. Hamilton . Plaintiffs take, $500,000 in assumed damages for damage to business Entry: reputation, sales and profits. Court initiates a second phase of trial for punitive damages. Set for 10/21/2013 at 9 a.m. Dept. 402 for Second phase -- Trial for Punitive Damages 3 Amendment to document filed Paul Evert's RV Country, 04:11 PM lnc., Entry: Amendment to the court's tentative statement of decision filed. dhouston 08--OCT--201 3 Motion for continuance granted 11:58 AM En" Court orders Continuance of Court Trial from 10/21/2013 to 10/22/2013 at 3:30 p.m. Dept. 402 . 22-OCT-2013 Minute order Judge Hamilton 1/21/2014 -- Not an Official Document a11web.co . . 09:25 AM Minute Order from Dept.: 402 Clerk: M.Santana Reporter: S. Davis Nature of Hearing: Continued Court Trial 2nd Phase re: Punitive Damages Pursuant to the adjournment of July 2, 2013, the Court reconvenes with counsel EMF present for second phase of trial regarding punitive damages. Court and y" counsel meet in chambers, off the record. Counsel review financial records from GE Capital in the courtroom. Parties agree to continue hearing. Cont. to 11/08/2013 at 9:30 a.m. dept. 402 for Continued Court Trial -- 2nd phase Punitive Damages. Court adjourned. 22-OCT-2013 Trial brief filed Bradley, Peter S. 10:25 AM Entry: Trial Brief Second Phase 22-OCT--2013 Trial brief filed Dyer, Gregory F. 10:26 AM Em Defendants'F'aul Evert's RV Country, Paul Evert, And Charles E. Curtis Jr.'s Punitive Damages Trial Brief. 22--OCT--2013 Objection filed Dyer, Gregory F. 10:27 AM Entry: Defendants' Objections to Testimony of Bob Brewer filed. 22--OCT-2013 Brief filed Fresno RV, lnc., 10:39 AM Entry: Brief for punitive damages phase filed. dhouston 22-OCT-2013 Subpoenaed Records Received 04:49 PM En" Subpoenaed records received for hearing on 10-22-13. Records delivered to y' Department 402 for hearing. ec Any Comment 01:09 PM Em Stip and Protective Order signed and issued. Forwarded to clerks office 11/01/2013, for further processing. ll ll Page 49 of51 1/21/2014 - Not an Official Document Page 51 of 51 Court is adjourned. Taken under advisement 02:46 PM Entry: Taken under advisement. Restored under advisement 11:15 AM The matter having been taken under advisement, Court new orders: The court finds against Paul Evert in the amount of $3,000,000: Curt Curtis in the amount of $1,000,000 and from Aaron Lyon, $80,000. All in favor of Plaintiffs. See copy of Statement of Decision, signed and issued. Entry: 17--JAN--2014 Clerk Cert of Mailing Printed 11:15 AM Docket entry for the letter produced from CDADOCT on by MSANTANA 17--JAN-2014 Minute order printed 11:18 AM Entry Docket entry for the letter produced from CDADOCT on by MSANTANA. 17--JAN-2014 Minute order Judge Hamilton 11:28 AM Minute Order from Dept.: 402 Clerk: M.Santana Reporter: Not Reported Nature of Hearing: From Chambers The matter previously taken under Entry advisement, the court now rules; The court finds against Paul Evert in the amount of $3,000,000: Curt Curtis in the amount of $1,000,000 and from Aaron Lyon, $80,000. All in favor of Plaintiffs. See attached copy of Statement of Decision, signed and issued. http://b anWeb.co.fresno.ca.us/ cp1*odsnp/ ck . . 1/21/201 4