A little background:
Two employees working for a competing beauty salon left it and came to us to rent out two stations. Since day one we have had landlord-tenant and not employer-employee relationship with those two persons, because:
- every month they pay us fixed station rent,
- they get to keep 100% of their profits,
- we also have a clause in rental contract that explains that we get to keep our already existing customers and walk-in customers, unless customers are explicitly looking for them.
Few days ago we got a notice from court that this competing beauty salon is suing us along with those two former employees alleging that we have stolen their "trade secrets", which in this case is customer contact list. Obviously, the plaintiff is not aware of the fact that we are their landlord and not employer. They are suing all 3 of us for monetary damage due to lost profits.
Also, to my surprise the competing beauty salon is represented by a legit lawyer registered at http://www.calbar.ca.gov/
To make it clear, I am not asking for legal advice. I am currently inquiring if our business insurance would cover legal defense and, most likely, will end up seeking professional legal defense. However, in the mean time I have 2 generic questions about court process in California to understand the process better:
- If someone is incorrectly listed as defendant, then what is the correct way to remove his name from lawsuit? Should one ask plaintiff to voluntarily remove him as defendant? Or is it safer for defendant to file something like "motion to dismiss"?
- If plaintiff's lawyer has not done due diligence and is misrepresenting relationship between listed defendants, then would that qualify as frivolous lawsuit? Would this lawyer risk sanctions imposed on him by State Bar of California? Would the plaintiff have to cover legal defense expenses for the defendant that was incorrectly listed?