Judge Bruce G. Iwasaki, Case Number: 22STCV39168, Date: 2024-11-07 Tentative Ruling

Plaintiffs Morad Ben Neman and Lancaster Eagle, LLC sued Defendants Payam Bahari, Freydoon “Fred” Bahari Moghadam, Haim Bahari, Tal Bahari, 114 Grand Cypress, LLC, Cavalini, Inc., and Caster Modelo, LLC, on December 16, 2022, and filed their operative second amended complaint (“SAC”) on February 9, 2024. The SAC asserts causes of action for breach of a joint venture agreement, breach of fiduciary duty, aiding and abetting the same, and fraudulent conveyances. Plaintiffs allege they entered a joint real estate investment venture with Defendants, then Defendants exploited the venture’s investment leads and directly invested for their own gain in properties discovered by Plaintiffs for the venture.

Defendant Caster Modelo, LLC (“Caster Modelo”) cross-complained against Plaintiffs and against Vivoli Saccuzo, LLP on April 19, 2024, and filed its operative first amended cross-complaint (“FAXC”) on May 3, 2024. The FAXC asserts causes of action for an accounting, breach of contract, conversion, declaratory relief, and receipt of stolen property. Caster Modelo alleges that it and Plaintiff/Cross-defendant Lancaster Eagle entered a written tenancy-in-common agreement (“TIC”) related to a property located in Lancaster (“Property”). The parties expressly disclaimed any joint venture arrangement in the TIC. When the parties sought to sell the Property, Lancaster Eagle first threatened to scuttle the deal unless it received more than 50% compensation from the sale, then it stole collectively-owned funds from the TIC.

Then, on August 12, 2024, Cross-Defendant Vivoli Saccuzzo, LLP (Vivoli Saccuzzo) specially moved to strike Cross-Complainant Caster Modelo’s third cause of action for conversion and fifth cause of action for violation of Penal Code section 496, under Code of Civil Procedure section 425.16.[1] Cross-Complainant Caster Modelo opposed the anti-SLAPP motion.

The special motion to strike pursuant to Code of Civil Procedure section 425.16 is denied.

“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).) The purpose of the statute is to identify and dispose of lawsuits brought to chill the valid exercise of a litigant’s constitutional right of petition or free speech. (Code Civ. Proc., § 425.16, subd. (a); Sylmar Air Conditioning v. Pueblo Contracting Services, Inc. (2004) 122 Cal.App.4th 1049, 1055-1056.)

Courts employ a two-step process to evaluate special motions to strike strategic lawsuits against public participation (SLAPP). (Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 61.) First, the defendant must show that the challenged lawsuit arises from protected activity, such as an act in furtherance of the right of petition or free speech. (Ibid.) “The moving defendant bears the burden of identifying all allegations of protected activity, and the claims supported by them.” (Baral v. Schmitt (2016) 1 Cal.5^th 376, 396.) In the second step, it “ ‘is then up to the plaintiff to rebut the presumption by showing a reasonable probability of success on the merits.’ ” (Equilon, supra, 29 Cal.4^th at p. 61.) In determining whether the plaintiff has carried this burden, the trial court considers “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); see Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 291.)

“Analysis of an anti-SLAPP motion is not confined to evaluating whether an entire cause of action, as pleaded by the plaintiff, arises from protected activity or has merit. Instead, courts should analyze each claim for relief—each act or set of acts supplying a basis for relief, of which there may be several in a single pleaded cause of action—to determine whether the acts are protected and, if so, whether the claim they give rise to has the requisite degree of merit to survive the motion.” (Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995, 1010.)

As outlined above, in the first step of the analysis, Defendants must demonstrate that Plaintiff’s claims arise from one of four categories of protected activity. An “ ‘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).)

“As our Supreme Court has recognized, ‘the “arising from” requirement is not always easily met.’ [Citation.] ‘[T]he mere fact that an action was filed after protected activity took place does not mean the action arose from that activity for the purposes of the anti-SLAPP statute. [Citation.] Moreover, that a cause of action arguably may have been “triggered” by protected activity does not entail that it is one arising from such.’ [Citation.] ‘A claim arises from protected activity when that activity underlies or forms the basis for the claim. [Citations.] Critically, “the defendant’s act underlying the plaintiff’s cause of action must itself have been an act in furtherance of the right of petition or free speech.” [Citations.]’ [Citation.] ‘[I]n ruling on an anti-SLAPP motion, 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.’ [Citation.] Put another way, courts should first identify ‘the allegedly wrongful and injury-producing conduct that provides the foundation for the claims,’ and then determine whether that conduct itself constitutes protected activity. [Citations.]” (Callanan v. Grizzly Designs, LLC (2022) 81 Cal.App.5th 517, 526 (Callanan) [citing Park, supra, 2 Cal.5th at pp. 1062-1063].)

Here, Cross-Defendant Vivoli Saccuzzo moves to specially strike the third cause of action for conversion and fifth cause of action for violation of Penal Code section 496 on the grounds that these claims arise from protected activity. Specifically, Cross-Defendant challenges Paragraph 25 of the FAXC which states:

“Nevertheless, on or about August 1, 2023, Lancaster Eagle unilaterally and surreptitiously issued a $25,000 check from the Bank Account to Cross-Defendant Vivoli Saccuzzo, which check was deposited by Vivoli Saccuzzo, despite the fact that it knew it was not entitled to do so.

Caster Modelo is informed and believes, and thereupon alleges, that this money has never been returned or deposited back into the Bank Account by Vivoli Saccuzzo.” (FAXC ¶ 25.)

Cross-Defendant argues that these claims arise from protected activity because the allegedly converted funds were used by attorneys for “litigation-related speech and activity.” (Mot., 4: 20-21.)

It is well established that funding the services of an attorney to prosecute or defend a lawsuit is an act in furtherance of petitioning activity that is protected under the anti-SLAPP statute. (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1056; Greco v. Greco (2016) 2 Cal.App.5th 810, 821.) Such a proposition makes sense in the arena of civil litigation, where there is no right to counsel, and the ability to retain private counsel for litigation can affect its course and outcome. As a result, the funding of litigation has been found to be petitioning activity when the money spent was to ensure a party could commence and maintain a legal action.

Here, Cross-Defendant’s evidence shows that the $25,000 was “accidentally” taken from the Bank Account owned jointly by Lancaster Eagle and Caster Modelo to pay Vivoli Saccuzzo for litigation purposes that were considered to be Lancaster Eagle’s sole legal “financial obligation.” (Vivoli Decl., Ex. 1 [Neman Decl., ¶ 5]; FAXC ¶¶ 24-25.)[2]

However, critical for the purposes of the first prong analysis is a determination of the elements of liability. “[C]onduct is not automatically protected merely because it is related to pending litigation; the conduct must arise from the litigation.” (Optional Capital, Inc. v. DAS Corp. (2014) 222 Cal.App.4th 1388, 1400 (Optional I).) “ ‘If the core injury-producing conduct upon which the plaintiff's claim is premised does not rest on protected speech or petitioning activity, collateral or incidental allusions to protected activity will not trigger application of the anti-SLAPP statute.’ ” (Area 51 Productions, Inc. v. City of Alameda (2018) 20 Cal.App.5th 581, 594; see also Baral v. Schnitt (2016) 1 Cal.5th 376, 394 [“Allegations of protected activity that merely provide context, without supporting a claim for recovery, cannot be stricken under the anti-SLAPP statute”].)

In doing so, the court must consider the elements of the claim to determine whether the petitioning activity is essential or incidental to the claim.

“Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion are the plaintiff's ownership or right to possession of the property at the time of the conversion; the defendant's conversion by a wrongful act or disposition of property rights; and damages.” (Oakdale Village Group v. Fong (1996) 43 Cal.App.4th 539, 543-544.) Conversion is a strict liability tort. (Moore v. Regents of University of California (1990) 51 Cal.3d 120, 144, fn. 38.) Therefore, the “wrongful act” element of a conversion claim does not require proof the defendant knew or intended to receive property belonging to another, or otherwise received the subject property in bad faith. (Oakdale Village Group v. Fong, supra, at p. 544 [“questions of good faith, lack of knowledge and motive are ordinarily immaterial”]; Henderson v. Security Nat. Bank (1977) 72 Cal.App.3d 764, 770-771.)

In considering “the elements of the [conversion] claim and what actions by [Cross-Defendant Vivoli Saccuzzo] supply those elements and consequently form the basis for liability” (Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1063), it is clear that the Cross-Defendant’s “conversion by a wrongful act or disposition of property rights” is based on his receipt of “$25,000” belonging to the Cross-Complainant Caster Modelo. Facts concerning the reason why Vivoli Saccuzzo received these funds are unnecessary to state a conversion claim against Vivoli Saccuzzo. (Park v. Board of Trustees of California State University, supra, at p. 1068 [“Plaintiff could have omitted allegations regarding [alleged protected activity] and still state the same claims”].)

Simply put, Cross-Defendant Vivoli Saccuzzo was sued for receiving compensation for its services; it was not sued for performing those services. The filing and prosecution of the litigation is not the wrong complained of here; instead, it was that the funds used were the property of Caster Modelo. Receiving payment for the provision of litigation-related services is not the same as funding litigation for purposes of the anti-SLAPP statute. (Cf. Graham-Sult v. Clainos (9th Cir. 2014) 756 F.3d 724, 737 [“Generally, taking possession of personal property is not a protected activity, because it is conduct, not a written or oral statement”].) The conversion cause of action arises, not from the fact that Vivoli Saccuzzo received fees, but from the fact Vivoli Saccuzzo was compensated with money from an improper source. Put another way, the core-injury producing conduct was the unprotected taking of money from accounts that belonged to the Caster Modelo, not the protected use to which the money may have been put.

Because the conversion cause of action only requires proof that Vivoli Saccuzzo received the disputed money, but not proof of the circumstances occasioning that receipt, the cause of action does not “arise from” protected activity within the meaning of section 425.16. (Park, supra, 2 Cal.5th at p. 1068 [“ ‘Plaintiff could have omitted allegations regarding [alleged protected activity] and still state the same claims’ ”].)

Similarly, the cause of action for receiving stolen property is based on Penal Code section 496, which provides for civil liability when a violation of subdivision (a) is found to have occurred. (Pen. Code, § 496, subd. (c); see generally Switzer v. Wood (2019) 35 Cal.App.5th 116, 126.) The elements of a violation of Penal Code section 496, subdivision (a) “are simply that (i) property was stolen or obtained in a manner constituting theft, (ii) the defendant knew the property was so stolen or obtained, and (iii) the defendant received or had possession of the stolen property.” (Switzer v. Wood, supra, 35 Cal.App.5th at p. 126.)

The same underlying allegations form the basis for both the conversion claim and the alleged Penal Code section 496 violation. Although there is a knowledge element to the receipt of stolen property cause of action, Vivoli Saccuzzo makes no specific argument that any protected activity is an essential element to this cause of action. Therefore, the cause of action for receiving stolen property does not arise from protected activity, either.

Cross-Defendant Vivoli Saccuzzo has not met its burden of showing that Cross-Complainant’s claims arise from protected activity. Thus, the first prong of the anti-SLAPP motion to strike has not been satisfied.

The special motion to strike pursuant to Code of Civil Procedure section 425.16 is denied.

[1] The moving papers specifically challenge the third and fourth causes of action – not the fifth cause of action. In opposition, Cross-Complaint asserts that Cross-Defendant clearly intended to move to strike the third and fifth causes of action and mistakenly cited the fourth cause of action. (Opp., 2, fn. 3.) The reply addresses only the third and fifth causes of action. The court will treat the anti-SLAPP motion as a motion to specially strike the third and fifth causes of action.

[2] (Salma v. Capon (2008) 161 Cal.App.4th 1275, 1286 [explaining that courts can examine declarations in making the first-step assessment]; accord, Bel Air Internet, LLC v. Morales (2018) 20 Cal.App.5th 924, 938, fn. 5.)

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