Judge Edward B. Moreton, Jr., Case 22STCV20396 2022-12-15 Tentative Ruling

Judge: Edward B. Moreton, Jr., Case: 22STCV20396, Date: 2022-12-15 Tentative Ruling

Superior Court of California

County of Los Angeles – West District

Beverly Hills Courthouse / Department 205

MOVING PARTY: Defendants Armand Derfner, Isaac Zaharoni, Suzanne Zaharoni, Urtnowski & Associates, P.C., J. Brian Urtnowski, Lisamarie McDermott, 2680 Barrington Associates, Leticia Mercado

This case arises from a landlord tenant dispute. Plaintiffs Derya Altay and Jason Rogers are tenants in an apartment building owned by Defendant 2680 Barrington Associates (“Barrington Associates”). Barrington Associates previously filed an unlawful detainer action against Plaintiffs on the grounds they were unauthorized occupants squatting in the apartment unit after the named tenant terminated the lease, and they refused to submit a rental application or sign a new lease. Barrington Associates then voluntarily dismissed its unlawful detainer action against Plaintiffs who remain tenants of the apartment unit. Nearly a year after the dismissal, Plaintiffs sued not only Barrington Associates but also (1) its partners (Armand Derfner, Larry Derfner and Suzanne Zaharoni); (2) its attorneys (John Brian Urtnowski, Lisamarie McDermott and Urtnowki & Associates P.C., (3) two of its employees (Isaac Zaharoni and Leticia Mercado), and (4) its bank (Bank of America).

The First Amended Complaint (“FAC”) alleges ten causes of action for (1) wrongful eviction in violation of Los Angeles Rent Stabilization Ordinance (“LARSO”), (2) malicious prosecution, (3) abuse of process, (4) violation of unfair business practices act, (5) intentional infliction of emotional distress, (6) conversion, (7) violation of Civil Code §1940.2, (8) contractual breach of implied covenants of good faith and fair dealing and quiet enjoyment, (9) negligence, (10) negligence per se, (11) fraud and (12) aiding and abetting.

This hearing is on Defendants’[1] special motions to strike pursuant to Code Civ. Proc. §425.16(e)(1). Defendants contend the Complaint was filed solely in retaliation of the unlawful detainer action in violation of the anti-SLAPP statute, and there is no probability Plaintiffs’ claims will prevail since the Complaint is barred by the absolute litigation privilege codified in Civ. Code §47.

The Court grants the request for judicial notice as to Plaintiffs’ Exhibits 2, 3, 5, 6, 12, 16, 18, 19, 20 and 21, under Evid. Code §452(d) as records of a court of the State of California. The Court also grants the request for judicial notice as to Plaintiffs’ Exhibits 4, 7, 8, 9, 10, 11, 13, 14, 15 and 17, under Evid. Code §452(c) as “official acts of the legislative, executive and judicial departments of the United States and of any state of the United States.” “Official acts” include “records, reports and orders of administrative agencies.” (Rodas v. Spiegel (2000) 87 Cal.App.4^th 513, 518.) The Court further grants the request for judicial notice as to Plaintiffs’ Exhibit 1 under Evid. Code §452(h) as a fact “not reasonably subject to dispute and [] capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” The Court also grants Defendants’ request for judicial notice of orders and filings in the underlying unlawful detainer action pursuant to Evid. Code §§452 and 453.

“Litigation of an anti-SLAPP motion involves a two-step process. First, the moving defendant bears the burden of establishing that the challenged allegations or claims arise from protected activity in which the defendant has engaged. Second, for each claim that does arise from protected activity, the plaintiff must show the claim has “at least ‘minimal merit.’ If the plaintiff cannot make this showing, the court will strike the claim.” (Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995, 1009.)

Before engaging in the two step analysis, the Court must first address the question of whether Plaintiffs’ claims are exempt from the anti-SLAPP statute. Plaintiffs argue their claims are exempt from the anti-SLAPP statute under Code Civ. Proc. §425.17(b). Whether plaintiffs’ action comes within the public interest exception of §425.17, subdivision (b) is a threshold issue that we must decide prior to examining the applicability of section 425.16. (Save Westwood Village v. Luskin (2014) 233 Cal.App.4^th 135, 143.) Section 425.17 exempts acts brought “solely” in the public interest or on behalf of the general public. (Id.) “The term ‘solely’ as used in §425.17(b) ‘expressly conveys the Legislative intent that section 425.17(b) not apply to an action that seeks a more narrow advantage for a particular plaintiff.’” (Id. (citations omitted).) Here, Plaintiffs’ actions do not seek relief solely in the public interest or on behalf of the general public. For example, Plaintiffs seek compensatory damages for mental pain and anguish, severe emotional distress and past and future medical costs. Plaintiffs also seek disgorgement of rent monies belonging to them. (FAC at 55-61, Prayer for Relief). There is no doubt that the prayer for relief sought relief “greater than or different from the relief sought for the general public” (Code Civ. Proc. § 425.17, subd. (b)(1)), and therefore Plaintiffs’ action is not exempt from the anti-SLAPP statute. (Club Members for an Honest Election v. Sierra Club (2008) 45 Cal.4^th 309, 316-17 (section 425.17(b) is not applicable because plaintiffs’ suit did not seek relief solely in the public interest or on behalf of the general public).)

The Court turns now to the two step analysis to determine whether Plaintiffs’ claims fall within the scope of the anti-SLAPP statute. On the first prong, “courts are to consider the elements of the challenged claim and what actions by the defendant supply those elements and consequently form the basis for liability. The defendant’s burden is to identify what acts each challenged claim rests on and to show how those acts are protected under a statutorily defined category of protected activity.” (Bonni, 11 Cal.5th at 1009.) “A defendant need only make a prima facie showing at this stage.” (Ojjeh v. Brown (2019) 43 Cal.App.5th 1027, 1035–1036.)

Where the plaintiff alleges multiple factual bases for a particular cause of action and the defendant moves to strike the entire cause of action, the defendant must demonstrate that each factual basis qualifies as protected activity and supplies an element of the challenged claim, as opposed to being merely contextual or incidental. (Bonni, 11 Cal.5^th at 1011-1012.) If a defendant seeks to strike an entire cause of action with multiple factual bases, it is defendant’s burden to address each factual basis. (Id. at 1011.) If the defendant fails to address a particular subpart or factual basis, the defendant fails to carry its first prong burden as to that subpart or claim. (Id.) “If a cause of action contains multiple claims and a moving party fails to identify how the speech or conduct underlying some of those claims is protected activity, it will not carry its first-step burden as to those claims.” (Id.)

Here, the filing of an unlawful detainer action is a protected activity under the anti-SLAPP statute. (Winslett v. 1811 27th Avenue, LLC (2018) 26 Cal.App.5th 239, 248; Newport Harbor Offices & Marina, LLC v. Morris Cerullo World Evangelism (2018) 23 Cal.App.5th 28, 45; Feldman v. 1100 Park Lane Assocs. (2008) 160 Cal.App.4^th 1467, 1479.) An act in furtherance of a person’s right of petition or free speech 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,” and “(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.” Code Civ. Proc. §425.16(e)(1)-(2). An unlawful detainer action falls within the scope of either of these subdivisions.

Plaintiffs argue that the unlawful detainer action was filed only by Barrington Associates so the other Defendants did not engage in any protected activity. Plaintiffs speak out of both sides of their mouth. They cannot claim on the one hand that Defendants are liable for malicious prosecution, abuse of process, etc. for having aided and abetted Barrington Associates in filing the unlawful detainer action while claiming on the other hand that Defendants were not involved in the filing of the unlawful detainer action, a protected activity.

The Court next turns to the question of whether Plaintiffs’ claims arise from a protected activity. The Court concludes that all but five of Plaintiffs’ claims arise from the filing of the unlawful detainer action:

· Plaintiffs’ first cause of action for wrongful eviction rests on the allegation that Barrington Associates, “aided and abetted by the other named DEFENDANTS, filed, served and prosecuted Unlawful Detainer Action … against the Plaintiffs with actual knowledge that they lacked probable cause to do so.” (FAC ¶75.) This allegation supplies the essential element of a claim for wrongful eviction that there be an action commenced by or at the direction of the defendant. (Perez v. Fv-I Inc., 2017 Cal. Super. Lexis 71244 at *25.)

· Plaintiffs’ second cause of action for malicious prosecution is based on the allegation that “DEFENDANTS … as aider and abettors of [Barrington Associates] … file[d], serv[ed] and prosecut[ed] a malicious [unlawful detainer action].” (FAC ¶83.) This allegation supplies the essential element of a malicious prosecution claim that there be an action commenced by or at the direction of the defendant. (Nunez v. Pennisi (2015) 241 Cal.App.4^th 861, 872.)

· Plaintiffs’ third cause of action for abuse of process alleges that “DEFENDANTS … as aiders and abettors of [Barrington Associates] are liable for the tort of abuse of process because they 1) improperly and wrongfully set their [original unlawful detainer complaint] for trial … and then 2) improperly and wrongfully amended their [original unlawful detainer complaint].” (FAC ¶91.) This allegation supplies the essential element of a claim for abuse of process that there be a use of process in a wrongful manner. (Drasin v. Jacoby & Meyers (1984) 150 Cal.App.3d 481, 485.)

· Plaintiffs’ fifth cause of action for intentional infliction of emotional distress alleges that “DEFENDANTS and each of them, individually and as aiders and abettors of [Barrington Associates] wrongfully utilized the Court and its legal functions[.]” (FAC ¶119.) This allegation supplies the essential element of a claim for intentional infliction of emotional distress that there be an “extreme and outrageous conduct by the defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress.” (Wilson v. Hynek (2012) 207 Cal.App.4^th 999, 1009.)

· Plaintiffs’ seventh cause of action for violation of Cal. Civ. Code §1940.2 alleges “DEFENDANTS … as aiders and abettors of [Barrington Associates] have violated Cal. Civ. Code 1940.2(a)(3) … by [] employing menacing conduct in the form of filing, serving and prosecuting a frivolous unlawful detainer action.” (FAC ¶138.) This allegation supplies the essential element of a violation of §1940.2 claim that there be “use, or threaten to use, force, willful threats, or menacing conduct constituting a course of conduct that interferes with the tenant’s quiet enjoyment of the premises.” Civ. Code §1940.2(a)(3).

· Plaintiffs’ eighth cause of action for breach of the implied covenant of quiet enjoyment alleges “DEFENDANTS … as aiders and abettors of [Barrington Associates] have violated the implied covenant of quiet enjoyment … by [] employing menacing conduct in the form of filing, serving and prosecuting a frivolous unlawful detainer action.” (FAC ¶138.) This allegation supplies the essential element of a breach of quiet enjoyment claim that there be “an act or omission of the landlord, or anyone claiming under the landlord, which substantially interferes with a tenant's right to use and enjoy the premises for purposes contemplated.” (Andrews v. Mobile Aire Estates (2005) 125 Cal.App.4^th 578, 588-591.)

· Plaintiffs’ twelfth cause of action for aiding and abetting alleges that as aiders and abettors of Barrington Associates, Defendants “attempted to wrongfully evict [Plaintiffs] in [the unlawful detainer action].” (FAC ¶187.) This allegation supplies the essential element of an aiding and abetting claim that defendant “gives substantial assistance in accomplishing a tortious result.” (Casey v. U.S. Bank Nat’l Ass’n (2005) 127 Cal.App.4^th 1138, 1144.)

In contrast to the above claims, Plaintiffs’ claims for violation of the Business & Profession Code §17200, conversion, negligence, negligence per se and fraud are either not based on the filing of the unlawful detainer action at all or are based on a mix of protected and unprotected activity. Plaintiffs’ claim for conversion alleges that Defendants wrongfully converted two rent checks from Plaintiffs. (FAC ¶¶125, 128.) Plaintiffs’ cause of action for fraud alleges that Barrington Associates falsely represented (1) “it was the legal landlord and owner of the apartment building”, (2) “it was legally conducting business [] in the County of Los Angeles,” (3) “it was legally entitled to collect the monthly rent obligation from [Plaintiffs],” (4) “it was a legal general partnership entitled to collect monthly rent … from [Plaintiffs]”, and (5) “it was rejecting all the monthly rent checks it had received from [Plaintiffs].” (FAC ¶174.) Plaintiffs’ claims for violation of the Business & Profession Code 17200, negligence and negligence per se allege a mix of protected activity (the filing of the unlawful detainer action) and unprotected activity (the wrongful conversion of Plaintiffs’ rent checks). (FAC ¶¶106, 154, 163.) Accordingly, Defendants fail to show these five claims arise solely out of protected activity, and the Court denies the special motions to strike as to Plaintiffs’ fourth, sixth, ninth, tenth and eleventh causes of action. However, any references to the unlawful detainer action in Plaintiffs’ fourth, ninth and tenth causes of action are stricken. The Court now turns to the question whether the causes of action that arise from protected activity have minimal merit.

Once a defendant demonstrates that protected conduct is at issue, the plaintiff must show that the complaint is both legally sufficient and supported by a sufficient prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited. (See Navellier v. Sletten (2002) 29 Cal.4th 82, 88-89.) “Precisely because the statute (1) permits early intervention in lawsuits alleging unmeritorious causes of action that implicate free speech concerns, and (2) limits opportunity to conduct discovery, the plaintiff's burden of establishing a probability of prevailing is not high: We do not weigh credibility, nor do we evaluate the weight of the evidence. Instead, we accept as true all evidence favorable to the plaintiff and assess the defendant's evidence only to determine if it defeats the plaintiff's submission as a matter of law. Only a cause of action that lacks ‘even minimal merit’ constitutes SLAPP.” (Overstock.com, Inc. v. Gradient Analytics, Inc. (2007) 151 Cal.App.4th 688, 699.)

The SLAPP statute’s second element-a “probability of prevailing”-means a “reasonable probability of prevailing, not prevailing by a preponderance of the evidence. For this reason, a court must apply a “summary-judgment-like” test, accepting as true the evidence favorable to the plaintiff and evaluating the defendant's evidence only to determine whether the defendant has defeated the plaintiff's evidence as a matter of law.” (Gerbosi v. Gaims, Weil, West & Epstein, LLP (2011) 193 Cal.App.4th 435, 444.)

Defendants argue Plaintiffs cannot meet their burden of showing a probability of prevailing because their claims are barred by the litigation privilege under Civ. Code §47(b). The Court agrees in part. Litigation privilege is “relevant to the second step in the anti-SLAPP analysis in that it may present a substantive defense a plaintiff must overcome to demonstrate a probability of prevailing.” (Feldman, 160 Cal.App.4^th at 1485.) The litigation privilege applies to all communications “(1) made in judicial or quasi judicial proceedings, (2) by litigants or other participants authorized by law, (3) to achieve the objects of the litigation, and (4) that have some connection or logical relation to the action.” (Silberg v. Anderson (1990) 50 Cal.3d 205, 212.) The principal purpose of the litigation privilege is to “afford litigants and witnesses the utmost freedom of access to the courts without fear of being harassed subsequently by derivative tort actions.” (Feldman, 160 Cal.App.4^th at 1485.) The litigation privilege is an absolute affirmative defense to all tort causes of action, except the tort of malicious prosecution. (Flatley v. Mauro (2006) 39 Cal.4^th 299, 322; see also Hagberg v. California Federal Bank FSB (2004) 32 Cal.4th 350, 375 (“[S]ection 47(b) operates to bar civil liability for any tort claim based upon a privileged communication, with the exception of malicious prosecution[.]”).) “Any doubt as to whether the privilege applies is resolved in favor of applying it.” (Adams v. Superior Court (1992) 2 Cal.App.4^th 521, 529.) Accordingly, the litigation privilege operates to bar all of Plaintiffs’ tort claims arising from a protected activity except their claim for malicious prosecution. Each of these claims is based on actions undertaken in preparation for, connection with, and furtherance of an unlawful detainer action. (Cf. Feldman, 160 Cal.App.4^th at 1498 (litigation privilege “applies to bar the cross-complaint causes of action for retaliatory eviction, negligence, breach of the implied covenant of quiet enjoyment, wrongful eviction under the Rent Ordinance, breach of contract and unfair business practices”).)

As to Plaintiffs’ claim for malicious prosecution, Plaintiffs have not shown the claim has minimal merit. To establish a claim for malicious prosecution, Plaintiffs must show the prior action “(1) was commenced by or at the direction of Defendants and was pursued to a legal termination favorable to the plaintiff, (2) was brought without probable cause, and (3) was initiated with malice.” (Nunez v. Pennisi (2015) 241 Cal.App.4^th 861, 872.) Plaintiffs cannot show the prior action was pursued to a legal termination favorable to them. To be a termination favorable to plaintiff, the termination must reflect on the merits of the action and of the plaintiffs’ innocence of the misconduct alleged in the lawsuit. (Lackner v. LaCroix (1979) 25 Cal. 3d 747, 750.) A resolution of the underlying litigation that leaves some doubt as to the defendant's innocence or liability is not a favorable termination, and bars that party from bringing a malicious prosecution action against the underlying plaintiff. (Id.)

Here, Barrington Associates voluntarily dismissed the underlying unlawful detainer action without prejudice. The dismissal was not preceded by any court order casting doubt on the merits of the action. To the contrary, the court in the underlying action had overruled a demurrer on the unlawful detainer complaint. (Exs. E & F to McDermott Decl.) Defendants assert they dismissed the action because they were “met with a blizzard of irrelevant but oppressive discovery; plus the ever-changing state and county COVID rules limited eviction.” (Motion at 11; see also McDermott Decl. ¶¶17-18.) The court’s order in the underlying action supports Defendants’ explanation, including the court’s finding that Plaintiffs were “abusing the discovery statutes by the sheer volume of discovery and the quick succession of such discovery, including demands sent after midnight.” (Ex. G to McDermott Decl.) A dismissal filed for the purpose of “avoiding litigation expenses” is not a termination on the merits. (JSJ Ltd. Partnership v. Merhrban (2012) 205 Cal.App.4^th 1512, 1525.)

Plaintiffs also cannot show the underlying action was brought without probable cause. “Probable cause is present unless any reasonable attorney would agree that the action is totally and completely without merit. This permissive standard for bringing suits and corresponding high threshold for malicious prosecution claims assures that litigants with potentially valid claims won’t be deterred by threat of liability for malicious prosecution.” (Roberts v. Sentry Life Ins. (1999) 76 Cal.App.4^th 375, 382.) Here, the unlawful detainer action was filed because Plaintiffs did not have a lease with Barrington Associates; they were not authorized by Barrington Associates to occupy the apartment, and they refused to sign a lease or even submit an application for a lease despite Barrington Associates’ repeated requests. (McDermott Decl. ¶15.) Based on the evidence, the underlying unlawful detainer action was brought for the proper purpose of evicting unauthorized occupants from an apartment to which they had no legal right of occupation. Accordingly, the Court grants Defendants’ special motion to strike Plaintiffs’ second cause of action for malicious prosecution.

Further, Plaintiffs cannot show the unlawful detainer action was initiated with malice. “Malice” must be established by “proof of either hostility or ill will on the part of the defendant or a subjective intent to deliberately misuse the legal system for personal gain or satisfaction at the expense of the wrongfully sued defendant.” (Downey Venture v. LMI Ins. Co. (1998) 66 Cal.App.4^th 478, 498-99) Here, Plaintiffs allege malice because they claim there was no probable cause for filing the unlawful detainer action, and it was designed to drive them out of their apartment so Defendants could charge more for future tenants. (FAC ¶¶85-86.) These allegations are insufficient to support a finding of malice. As noted above, there was probable cause to file the unlawful detainer action because Plaintiffs were squatting at the apartment and refused to submit a rental application or sign a new lease.

In addition to the grounds stated above, the Court also strikes the first, second, third, fifth, sixth and twelfth causes of action against Defendants Urtnowski & Associates, P.C., J. Brian Urtnowski and Lisamarie McDermott pursuant to Civ. Code §1714.10(a). Section 1714.10 mandates that “[n]o cause of action against an attorney for a civil conspiracy with his or her client arising from any attempt to contest or compromise a claim or dispute and which is based upon the attorney’s representation of the client, shall be included in a complaint or other pleading unless the court enters an order allowing the pleading that includes the claim for civil conspiracy to be filed after the court determines that the party seeking to file the pleading has established that there is a reasonable probability that the party will prevail in the action.” (Civ. Code §1714.10(a).) At no time prior to the filing of their complaint did Plaintiffs comply with the statutory requirements of §1714.10(a) even though their allegations against Defendants Urtnowski & Associates, P.C., J. Brian Urtnowski and Lisamarie McDermott are premised on a conspiracy between them and their client. (FAC ¶¶38, 48-57, 59-61, 63-64, 67-68.)

For the foregoing reasons, the Court GRANTS IN PART and DENIES IN PART Defendants’ special motions to strike. The Court strikes without leave to amend Plaintiffs’ first, second, third, fifth, seventh, eighth, and twelfth causes of action against Defendants Armand Derfner, Isaac Zaharoni, Suzanne Zaharoni, 2680 Barrington Associates, and Leticia Mercado. The Court also strikes without leave to amend Plaintiffs’ first, second, third, fifth, sixth and twelfth causes of action against Defendants Urtnowski & Associates, P.C., J. Brian Urtnowski, Lisamarie McDermott. The Court also strikes any references to the unlawful detainer action in Plaintiffs’ fourth, ninth and tenth causes of action.

[1] Moving Defendants are Armand Derfner, Isaac Zaharoni, Suzanne Zaharoni, Urtnowski & Associates, P.C., J. Brian Urtnowski, Lisamarie McDermott, 2680 Barrington Associates, and Leticia Mercado. These Defendants have filed three separate special motions to strike which are being heard in a consolidated hearing.