Smartrise Engineering, Inc. vs. Brent Meline

34-2021-00308769-CU-BC-GDS: Smartrise Engineering, Inc. vs. Brent Meline 07/02/2026 Hearing on Motion for Attorney Fees in Department 8A

Alpha, Parra, Ezzeddine, and Larry Hoang. On the same date, Smartrise filed the operative Fourth Amended Complaint against Meline.

There is presently a trial date set in this matter for August 3, 2026.

Discussion

Arney makes this motion[1] pursuant to Civil Code section 3426.4 on the grounds that “she is the prevailing party, and on the ground that Plaintiff brought this action against Defendant in bad faith because Plaintiff's action against Ms. A[rn]ey was objectively specious and Plaintiff filed it with subjective bad faith.” (Ntc. Mot.) Although Arney initially sought approximately $176,262 in fees, upon reply, Arney seeks a total fee award in the amount of $206,512.50. (Thomas Decl., filed 5/21/26, ¶¶ 3-11.) Arney advances two grounds in support of her requested fees award: (1) a 2019 arbitration agreement (the “Arbitration Agreement”) and (2) the California Uniform Trade Secrets Act (“CUTSA”) (Civ. Code, § 3426.4). Smartrise opposes the motion.

Arbitration Agreement

Arney argues that, on April 15, 2019, she and Smartrise entered into a binding arbitration agreement. (Arney Decl., filed 12/22/23, ¶ 2, Ehx. A (the, “Arbitration Agreement”).) Arney highlights that the Arbitration Agreement states the following:

1. Intent: It is the intent of EMPLOYEE and the EMPLOYER that this AGREEMENT will govern the resolution of all disputes, claims, and any other matters in question arising out of or relating to the PARTIES' employment relationship. The PARTIES shall resolve all disputes arising out of the employment relationship in accordance with the provisions of this AGREEMENT.

...

12. Attorney’s Fees: The prevailing party in any dispute governed by this AGREEMENT shall be entitled to recover attorneys’ fees and costs, including expert witness fees, from the losing party. (Arbitration Agreement, ¶¶ 1, 12.)

Arney argues that although the Arbitration Agreement was entitled, “Employment Arbitration Agreement,” its scope is not limited to arbitration. Based upon the above language, Arney contends that because Smartrise voluntarily dismissed Ms. Arney, on October 3, 2023 (Request for Dismissal, filed 10/3/23) Arney is the prevailing party on all of Smartrise’s tort claims. (Amended Mov. MPA, p. 12:9-11 [citing Santisas v. Goodin

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00308769-CU-BC-GDS: Smartrise Engineering, Inc. vs. Brent Meline 07/02/2026 Hearing on Motion for Attorney Fees in Department 8A

(1998) 17 Cal.4th 599, 606; Civ. Code, § 1717(b)(2)].)

In opposition, Smartrise argues that Arney waived her right to enforce the Arbitration Agreement (including the Attorneys’ Fees provision) due to her active litigation and participation in this matter. (Opp’n, p. 10:4-5 [citing Quach v. California Commerce Club, Inc. (2024) 16 Cal.5th 562].) Smartrise contends that Arney “used the courtroom for over a year” before raising the Arbitration Agreement, expressly declined arbitration, demanded a jury trial, pursued discovery unavailable in arbitration, and then filed a complaint in intervention. (Id. at p. 12:18-21.)

In reply, Arney emphasizes that the fee provision, which appears in Paragraph 12, “broadly provides” that “[t]he prevailing party in any dispute governed by this AGREEMENT shall be entitled to recover attorneys’ fees and costs, including expert witness fees, from the losing party.” (Reply, p. 2:9-13 [emphasis in original].)

Waiver

As to waiver, while Arney acknowledges that conduct inconsistent with arbitration may ultimately be found to have waived the right to compel arbitration, this conduct would do “nothing to demonstrate any intent to relinquish an independent right to fees.” (Id. at p. 3:5-6.) Further, pointing to the case, Kalai v. Gray (2003) 109 Cal.App.4th 768, Arney contends that controlling issue here is the express text of the fee provision, not whether the prevailing party moved to arbitrate. (Id. at p. 3:19-20.)

Kalai involved an agreement for the construction of improvements on plaintiff Kalai’s home, and following a dispute arising from the agreement, the plaintiff in Kalai filed a complaint against the defendant in superior court. (Kalai, supra, 109 Cal.App.4th at p. 772.) Subsequently, the plaintiff in Kalai also filed a motion for summary judgment, based upon the arbitration agreement, rather than filing a petition to compel arbitration. (Ibid.)

Reviewing the issue of waiver, the Kalai Court stated:

In Doers v. Golden Gate Bridge etc. Dist. (1979) 23 Cal.3d 180 [151 Cal. Rptr. 837, 588 P.2d 1261], the Supreme Court concluded that the filing of a lawsuit on an arbitrable claim did not waive the right to arbitrate. . . . Because the arbitrable issues in the instant action were never litigated by the parties in the federal court, we find that appellant Doers did not waive his contractual arbitration rights.” (Id. at pp. 185–188, italics omitted.) This case is similar to Doers, in that Kalai filed his arbitrable claims in superior court, but never had a chance to litigate their

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00308769-CU-BC-GDS: Smartrise Engineering, Inc. vs. Brent Meline 07/02/2026 Hearing on Motion for Attorney Fees in Department 8A

merit before dismissal. (Id. at p. 774 [italics in original] [emphasis added].)

Ultimately, the Kalai Court determined that the plaintiff did not waive his right to arbitrate because his “motion for summary judgment can only be interpreted as an assertion of his own right to enforce the arbitration provision and his refusal to litigate in court.” (Id. at pp. 776-777.)

Here, unlike the plaintiff in Kalai, Arney’s conduct in this matter has far exceeded that of just the filing of a complaint, and the filing of a motion regarding the enforcement of the Arbitration Agreement. Indeed, Arney’s involvement in this matter has been extensive, and certainly Arney has had the chance to litigate the merits before dismissal. As such, the Court finds that Arney has waived the right to enforce the attorneys’ fees provision in the Arbitration Agreement.

California Uniform Trade Secrets Act (“CUTSA”)

Arney also argues that she is entitled to an award of fees under the CUTSA. Civil Code section 3426.4 provides: “If a claim of misappropriation is made in bad faith, a motion to terminate an injunction is made or resisted in bad faith, or willful and malicious misappropriation exists, the court may award reasonable attorney's fees and costs to the prevailing party.” A trial court has broad discretion in awarding the fees and costs under section 3426.4. (FLIR Systems, Inc. v. Parrish (2009) 174 Cal.App.4th 1270, 1275.)

To determine “bad faith” for awarding attorney’s fees under section 3426.4, a two-prong test must be satisfied: (1) objective speciousness of the claim, and (2) subjective bad faith in bringing or maintaining the action, i.e., an improper purpose. (Gemini Alum. Corp. v. California Custom Shapes, Inc. (2002) 95 Cal.App.4th 1249, 1262; Cypress Semiconductor v. Maxim Integrated Products (2015) 236 Cal.App.4th 243, 260; FLIR, supra, 174 Cal.App.4th at p. 1275.)

Based upon the record before the Court, and having considered the arguments presented by the Parties, the Court determines that Arney is not entitled to fees through CUTSA as she cannot demonstrate either that Smartrise’s trade secret claim was objectively specious or that it was brought or maintained in subjective bad faith.

Arney’s motion on this ground is DENIED.

Disposition

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00308769-CU-BC-GDS: Smartrise Engineering, Inc. vs. Brent Meline 07/02/2026 Hearing on Motion for Attorney Fees in Department 8A

Arney’s motion for attorneys’ fees is DENIED.

Arney’s requests for judicial notice are unopposed and GRANTED for the limited purposes appropriate for judicial notice. The Court takes judicial notice of the existence of the documents but not the truth of the statements contained therein. (Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1564-70; Kilroy v. State of California (2004) 119 Cal.App.4th 140, 145-148.)

Arney’s application to file under seal the records submitted in support of its reply to this motion (filed 5/21/26) is unopposed and GRANTED.

Smartrise’s evidentiary objections are OVERRULED. Regarding Objections Nos. 1 and 2, on the basis of timeliness, as Smartrise properly argues in opposition, since the filing of the motion, Arney has supplemented the motion with additional arguments and evidence, over the course of years. While the Court declines to deny the motion on this basis, the Court acknowledges the impropriety, and to the extent that Arney appears to be supplementing her fees motion, in attempt to circumvent the applicable deadline, this practice is not well taken.[2]

To request oral argument on this matter, you must call Department 8A at 916-874-5754 by 4:00 p.m., the court day before this hearing and notification of oral argument must be made to the opposing party/counsel. If no call is made, the tentative ruling becomes the order of the court. (Local Rule 1.06.)

Please check your tentative ruling prior to the next Court date at www.saccourt.ca.gov prior to the above referenced hearing date.

If oral argument is requested, the parties may appear in person or by Zoom with the links below:

To join by Zoom Link - https://saccourt-ca-gov.zoomgov.com/j/16108301121 To join by phone dial (833) 568-8864, ID 16108301121

Parties requesting services of a court reporter will need to arrange for private court reporter services at their own expense, pursuant to Government code section 68086 and California Rules of Court, Rule 2.956. Requirements for requesting a court reporter are listed in the Policy for Official Reporter Pro Tempore available on the Sacramento Superior Court website at https://saccourt.ca.gov/general-information/court-reporterservices-transcripts. Parties may contact Court-Approved Official Reporters Pro Tempore by utilizing the list of Court Approved Official Reporters Pro Tempore available

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

34-2021-00308769-CU-BC-GDS: Smartrise Engineering, Inc. vs. Brent Meline 07/02/2026 Hearing on Motion for Attorney Fees in Department 8A

at https://saccourt.ca.gov/home/showpublisheddocument/227/639084034465370000.

A Stipulation and Appointment of Official Reporter Pro Tempore (CV/E-206) is required to be signed by each party, the private court reporter, and the Judge prior to the hearing, if not using a reporter from the Court’s Approved Official Reporter Pro Tempore list. Once the form is signed it must be filed with the clerk.

If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk will be forward the form to the Court Reporter’s Office and an official reporter will be provided.

This minute order is effective immediately. Pursuant to California Rules of Court, rule 3.1312(a), no further written order or further notice is necessary.

[1] Arney filed this motion on November 21, 2023 (in the Alpha Matter), prior to these

matters being consolidated. [2] The Court further notes, although it considered Arney’s Amended Memorandum of

Points and Authorities (filed on 12/22/23, in the Alpha Matter), wherein Arney raised additional arguments based on Santisas, supra, 17 Cal.4th 599, the result was the same, and the Court does not the arguments to be persuasive. In Santisas, the plaintiffs filed a complaint and defendants submitted a verified answer - after engaging in discovery, plaintiffs dismissed the action with prejudice. (Id. at pp. 603-604.) Distinguishable from the case here, Santisas did not involve a complaint in intervention. As a result, when the Santisas plaintiffs voluntarily dismissed the action with prejudice, they fully resolved all claims between two parties. That is not the case here.