Judge Elaine Lu, Case Number: 23STCV01450, Date: 2023-10-25 Tentative Ruling

On January 23, 2023, Plaintiffs Caroline S. Lee (“Caroline”)[1] and Chung Soonkyo, LLC (“CSL”) (jointly “Plaintiffs”) filed the instant collateral action against Defendants Jong Han Lee, Bow Tie Realty and Investment, Inc. (“Bow Tie”), RSM Properties, Inc. (“RSM”), Michael I. Kim (“Kim”), Unity Escrow, Inc. (“Unity”), Ticor Title Company of California (“Ticor”), and Douglas Chadwick Biggins (“Biggins”) (collectively “Defendants”). The Complaint asserts six causes of action for (1) Slander of Title against Jong Han Lee and Bow Tie; (2) Quiet Title against Jong Han Lee, Bow Tie, RSM, Unity, Ticor, and Biggins; (3) Breach of Contract against RSM, Unity, and Ticor; (4) Breach of Fiduciary Duty against Unity; (5) Negligence against Unity and Ticor; and (6) Extortion [Pen. Code 523] against RSM, Kim, Unity, and Ticor.

On February 24, 2023, Defendant Ticor filed the instant special motion to strike the sixth cause of action. On June 7, 2023, the Court granted Defendant Kim’s special motion to strike the complaint. (Order 6/7/23.) On July 23, 2023, the Court entered a judgment of dismissal in favor of Defendant Kim. (Judgment 7/23/23.) On August 23, 2023, the Court granted Defendant RSM’s special motion to strike the complaint. (Order 8/23/23.)

On October 13, 2023, Plaintiffs filed an opposition to the instant special motion to strike. On October 18, 2023, Defendant Ticor filed a reply.

On September 16, 2019, judgment was entered in favor of Defendant Bow Tie against Plaintiff Caroline for $672,892.19 in Los Angeles Superior Court case BC697147, Jong Han Lee v. Caroline S. Lee, et al. (Complaint ¶ 13.) On November 18, 2019, Defendant Biggins – the CEO and Owner of Bow Tie – on behalf of Bow Tie – recorded an unsatisfied judgment lien for $672,892.19 against the property file for 17465-17499 Imperial Highway, Yorba Linda, California, (“Yorba Linda Property”). (Id. ¶ 17.)

Plaintiff Caroline appealed the judgment in Los Angeles Superior Court case BC697147, Jong Han Lee v. Caroline S. Lee, et al. “and posted a supersedeas bond on July 8, 2020, in the amount of $1,270,071.98 under Code Civ. Proc. § 917.1 in Court of Appeal case B303369.” (Id. ¶ 14, Exh. D.) “On September 2, 2020, the Court of Appeal dismissed the appeal in case B303369 and on November 5, 2020, issued remittitur.” (Id. ¶ 16.)

On October 8, 2021, Biggins – on behalf of Bow Tie – recorded an unsatisfied lien for $672,892.19 on the Yorba Linda Property. (Id. ¶ 18.)

On or about December 23, 2021, Defendant RSM offered to buy the Yorba Linda Property from Plaintiff CSL. Plaintiffs accepted the offer. (Id., Exh. A.) While the parties were in escrow, on March 17, 2022 and May 4, 2022, RSM stated to Plaintiff Caroline that the judgment liens “were in fact valid, despite Code Civ. Proc. §§ 697.040 and 697.050.” (Id. ¶ 20.)

On March 17, 2022, Defendant Kim as the attorney for Defendant RSM wrote a letter to Plaintiff Caroline noting that after the parties had entered escrow in January of 2022, RSM was informed that the Yorba Linda Property was subject to a Lis Pendens recorded on October 8, 2021 under Los Angeles Superior Court Case No. 21STCV35370 – i.e., the lien recorded by Defendant Bow Tie. (Id. ¶ 69, Exh. E.) Defendant Kim noted that while the Lis Pendens had existed months before the purchase agreement had been signed, Plaintiffs had failed to disclose it. (Id. ¶ 70, Exh. E.) In the letter, Defendant Kim further stated that RSM had been told that there was a court date to settle the matter set for January 24, 2022. (Ibid., Exh. E.) “[RSM] is still awaiting a status on the encumbrance. However, it is [RSM’s] assessment that there has been no progress with the settlement, and a cursory review of the docket for Case No, 21STCV35370, indicates that the parties are not engaged in settling the matter but engaged in law and motion work with a motion for reconsideration on the Motion to Expunge Lis Pendens set for June 15, 2022 (One month after the Exchange Period deadline).” (Ibid., Exh. E.)

Defendant Kim on behalf of RSM threatened a meritless three-million-dollar lawsuit against Plaintiffs, and under the threat of that lawsuit, Plaintiff Caroline consented to Amended Escrow Instructions. (Id. ¶ 72.) Specifically, Defendant Kim stated at the end of his March 17, 2022 letter that “we are sending this notice that CSL has until April 29, 2022, to resolve the encumbrance and close the sale. If the transaction does not close prior to the Exchange Period deadline, RSM will owe $3,000,000.00 in capital gains taxes, and, in turn, my client will seek damage from CSL for this amount as well as any and all further damages that may result from CSL’s breach of contract.” (Ibid., Exh. E.)

“As part of the RSM statements of March 17, 2022, and May 4, 2022, RSM demanded from seller CSL the sequestering of $1.5 million of Caroline Lee’s funds from the property sale, as a condition for her avoiding a $3 million RSM lawsuit against Caroline Lee.” (Id. ¶ 21.)
On May 4, 2022, Plaintiffs executed amended escrow instructions under which $1.5 million from the sale would be sequestered to be held in escrow to cover the encumbrances by Bow Tie on the Yorba Linda Property. (Id. ¶ 21, Exh. B.) “As part of the RSM statements of March 17, 2022, and May 4, 2022, Unity and Ticor acted as agents of RSM, in enforcing the sequestering of $1.5 million from the December 23, 2021, property sale.” (Id. ¶ 22.)

“Plaintiffs CSL, and Caroline Lee did in fact suffer immediate and direct financial harm from the October 8, 2021, recording of the $672,892.19 lien in # 2021-620966, of the Official Records. That is, RSM, Unity, and Ticor made reference to the October 8, 2021, recording of the $672,892.19 lien, purportedly causing RSM to demand the sequestering of $1.5 millions of Carolyn Lee’s funds in order to close escrow on the Yorba Linda Property, which sequestering caused Plaintiffs to incur legal expenses necessary to remove the doubt cast by the October 8, 2021, recording and to clear title.” (Id. ¶ 31.)

In conjunction with the moving papers, Defendant Ticor requests that the Court take judicial notice of the following:

A. The October 8, 2021, recording bearing No. 2021000620965 against the Yorba Linda Property

In conjunction with the reply, Plaintiffs request that the Court take judicial notice of the following:

4. Defendant Ticor’s Request for Judicial Notice in support of the Instant Motion

5. Defendant Ticor’s declaration of Michael I Kim in support of the Instant Motion

As the Court may take judicial notice of court records and actions of the State, (See Evid. Code, § 452(c)(d)), the parties’ unopposed requests for judicial notice are GRANTED as to the facts and documents cited above. However, the Court does not take judicial notice of the truth of hearsay assertions within Court records. (See Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375.)

“If a defendant brings a special motion under the anti-SLAPP statute [CCP § 425.16] to strike a cause of action, the trial court evaluates that motion using a two-step process: The first examines the nature of the conduct that underlies the plaintiff's allegations to determine whether the conduct is protected by section 425.16; the second assesses the merits of the plaintiff’s claim. [Citation]” (Laker v. Board of Trustees of California State University (2019) 32 Cal.App.5th 745, 759.)

“The defendant’s first-step burden is to identify the activity each challenged claim rests on and demonstrate that that activity is protected by the anti-SLAPP statute. A ‘claim may be struck only if the speech or petitioning activity itself is the wrong complained of, and not just evidence of liability or a step leading to some different act for which liability is asserted.’ [Citation.] To determine whether a claim arises from protected activity, courts must ‘consider the elements of the challenged claim and what actions by the defendant supply those elements and consequently form the basis for liability.’ [Citation.] Courts then must evaluate whether the defendant has shown any of these actions fall within one or more of the four categories of ‘act[s]’ protected by the anti-SLAPP statute. [Citations.]” (Wilson v. Cable News Network, Inc. (2019) 7 Cal.5th 871, 884 [italics in original].)

“In the first step of the analysis, the trial court determines whether the cause of action ‘arises from’ 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.’’’ [Citation] The first step of the anti-SLAPP analysis ‘turns on two subsidiary questions: (1) What conduct does the challenged cause of action ‘arise[] from’; and (2) is that conduct ‘protected activity’ under the anti-SLAPP statute?’ [Citation]” (Laker, supra, 32 Cal.App.5th. at p.760.)

“The Supreme Court has clarified that ‘arising from’ means ‘based on.’ [Citation] This element of the first step of the anti-SLAPP analysis is sometimes referred to as the ‘nexus’ requirement. [Citation] Conduct constitutes ‘protected activity,’ if it falls within one of the categories set out in section 425.16, subdivision (e). Section 425.16, subdivision (e), in turn, applies to (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) ‘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) ‘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.’ [Citation] The defendant bringing the anti-SLAPP motion to strike must make a prima facie showing that the allegations that form the basis of the plaintiff's claims arise from conduct that falls under one of these categories. [Citation]” (Ibid.)

“If the defendant prevails in this step of the analysis, the trial court must then assess the merits of the plaintiff's claim. The Supreme Court has described this second step of the SLAPP analysis as a ‘summary-judgment-like procedure.’ [Citation.] The plaintiff carries the burden of demonstrating that its claim has ‘at least ‘minimal merit.’’ [Citation.] If the plaintiff is unable to demonstrate that his or her claim has at least minimal merit, then the trial court should deem the cause of action a SLAPP and should strike it. [Citation.]” (Ibid.)

At this “second stage of an anti-SLAPP hearing, the court may consider affidavits, declarations, and their equivalents if it is reasonably possible the proffered evidence set out in those statements will be admissible at trial. Conversely, if the evidence relied upon cannot be admitted at trial, because it is categorically barred or undisputed factual circumstances show inadmissibility, the court may not consider it in the face of an objection. If an evidentiary objection is made, the plaintiff may attempt to cure the asserted defect or demonstrate the defect is curable.” (Sweetwater Union High School Dist. v. Gilbane Building Co. (2019) 6 Cal.5th 931, 949.)

The trial court properly considers the evidentiary submissions of both the plaintiff and the defendant, but it may not weigh the credibility or comparative strength of the evidence and must instead simply determine whether the plaintiff’s evidence would, if believed by the trier of fact, be sufficient to result in a judgment for plaintiff. (McGarry v. Univ. of San Diego (2007) 154 Cal.App.4th 97, 108-09.) The court “accept[s] as true the evidence favorable to the plaintiff [citation] and evaluate[s] the defendant’s evidence only to determine if it has defeated that submitted by the plaintiff as a matter of law.’ [Citations.]” (Flatley v. Mauro (2006) 39 Cal.4th 299, 326.) Further, whether or not the evidence is in conflict, in the context of a motion to strike under the anti-SLAPP statute, if the plaintiff has presented a sufficient pleading and has presented evidence showing that a prima facie case will be established at trial, the plaintiff is entitled to proceed. (Moore v. Shaw (2004) 116 Cal.App.4th 182, 193.) Only a minimal showing of merit is required. (Robinzine v. Vicory (2006) 143 Cal.App.4th 1416, 1421.)

“To prevail on an anti-SLAPP motion, the movant must first make ‘a threshold showing the challenged cause of action’ arises from an act in furtherance of the right of petition or free speech in connection with a public issue.” (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 192.) “[T]he focus is on determining what ‘the defendant’s activity [is] that gives rise to his or her asserted liability—and whether that activity constitutes protected speech or petitioning.’ [Citation.]” (Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1063.) “‘The only means specified in section 425.16 by which a moving defendant can satisfy that [‘arising from’] requirement is to demonstrate that the defendant’s conduct by which plaintiff claims to have been injured falls within one of the four categories described in subdivision (e) . . . .’ [Citation.]” (Ibid.)

Pursuant to Baral v. Schnitt (2016) 1 Cal.5th 376, 396, “[a]t the first step, the moving defendant bears the burden of identifying all allegations of protected activity, and the claims for relief supported by them.” (See Wilson v. Cable News Network, Inc. (2019) 7 Cal.5th 871, 884 [“The defendant's first-step burden is to identify the activity each challenged claim rests on and demonstrate that that activity is protected by the anti-SLAPP statute.”].)

Defendant Ticor asserts that the March 17, 2022 Letter and May 4, 2022 demand are protected conduct. The Court agrees.

Code of Civil Procedure section 425.16(e) protects “(1) any written or oral statement or writing made before a … judicial proceeding, … [and] (2) any written or oral statement or writing made in connection with an issue under consideration or review by a … judicial body”. (CCP § 425.16(e)(1)-(2).) Protected conduct includes such actions as “the filing, funding, and prosecution of a civil action.” (Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1056.) Moreover, “[t]he anti-SLAPP protection for petitioning activities applies not only to the filing of lawsuits, but extends to conduct that relates to such litigation, including statements made in connection with or in preparation of litigation.” (Kolar v. Donahue, McIntosh & Hammerton (2006) 145 Cal.App.4th 1532, 1537.)

“There is no question that communications sent in anticipation of litigation or as part of ongoing litigation constitute legitimate speech or petitioning activity protected under the anti-SLAPP statute.” (Geragos v. Abelyan (2023) 88 Cal.App.5th 1005, 1023.) However, “[a] prelitigation communication is privileged only if it ‘relates to litigation that is contemplated in good faith and under serious consideration.’ [Citation.]” (Trinity Risk Management, LLC v. Simplified Labor Staffing Solutions, Inc. (2021) 59 Cal.App.5th 995, 1005.)

In relevant part, the Complaint alleges that Defendant RSM through Defendant Kim sent a letter on March 17, 2022 threatening legal action for damages that RSM would suffer if Plaintiff CSL did not resolve the encumbrances on the Yorba Linda Property before the close of escrow. (Complaint ¶¶ 20, 69-76, Exh. E.) “As part of the RSM statements of March 17, 2022, and May 4, 2022, Unity and Ticor acted as agents of RSM, in enforcing the sequestering of $1.5 million from the December 23, 2021, property sale.” (Complaint ¶ 22.) Specifically, Defendant Ticor assisted RSM and Kim in this alleged threatening act in the March 17, 2022 Letter. (Id. ¶ 75.) The sending of a letter threatening a lawsuit is clearly a prelitigation activity unless there is evidence that litigation was not contemplated in good faith or was not under serious consideration. Here, Plaintiffs’ complaint itself implies that Defendant Kim sent the letter at issue while litigation was seriously contemplated. RSM retained Defendant Kim as an attorney to address issues with encumbrances on the Yorba Linda Property, and only due to the threat of the lawsuit did Plaintiff Caroline execute the May 4, 2022 Amended Escrow Instructions. These circumstances strongly suggest that RSM – Ticor’s alleged principal – was planning to sue Plaintiffs. (Id. ¶¶ 69, 72, 74.) Moreover, as Defendant Kim notes in his declaration in support of the instant motion, RSM retained Defendant Kim on March 3, 2022 with respect to a potential dispute regarding the closing and sale of the Yorba Linda Property arising out of the encumbrances. (Kim Decl. ¶ 4.) Kim determined that litigation would likely commence against Plaintiff CSL if CSL did not resolve the encumbrances and close the transaction by the 1031 Exchange Period deadline of May 15, 2022. (Kim Decl. ¶ 5.) With serious contemplation of litigation, Kim sent a letter to Plaintiff Caroline Lee of CSL on March 17, 2022 demanding that Plaintiffs resolve the issue of the encumbrances by April 29, 2022 and close the transaction before the 1031 Exchange Period deadline, or RSM would seek damages against CSL for breach of contract. (Kim Decl. ¶¶ 5-6.) These facts all clearly indicate that the March 17, 2022 Letter was prelitigation activity contemplated in good faith and in serious consideration of a lawsuit. Accordingly, RSM’s alleged sending of the March 17, 2022 Letter through Defendant Kim is protected activity.

Further, as alleged in the complaint, on May 4, 2022, Defendant RSM similarly demanded that Plaintiff CSL sequester $1.5 million of the sale proceeds “as a condition for her avoiding a $3 million RSM lawsuit against Caroline Lee.” (Complaint ¶ 21.) Defendant Ticor assisted RSM in this alleged threatening in the May 4, 2022 demand. (Id. ¶ 75.) As the Court has previously found, Defendant RSM’s conduct on May 4, 2022 – demanding that CSL sequester a portion of sale proceeds with the threat of a lawsuit – was a continuation of its March 17, 2022 conduct and was itself protected prelitigation activity contemplated in good faith and in serious consideration of a lawsuit. (Order 8/23/23.)

The mere fact that protected activity is alleged is insufficient for a moving party to prevail on a special motion to strike. The moving party must demonstrate that the conduct at issue was not merely incidental to the claim. An anti-SLAPP motion only lies to “[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[.]” (CCP § 425.16(b)(1).) “A claim arises from protected activity when that activity underlies or forms the basis for the claim.” (Park v. Board of Trustees of California State University (2017) 2 Cal.5th 1057, 1062.) “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.’ [Citation.]” (Park, supra, 2 Cal.5th at p.1063.) “‘The 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.]” (Ibid.) Accordingly, “Courts deciding an anti-SLAPP motion thus must consider the claim's elements, the actions alleged to establish those elements, and whether those actions are protected.” (Bonni v. St. Joseph Health System (2021) 11 Cal.5th 995.) Thus, the Court turns to the claims and allegations of the complaint against Ticor as to the sixth cause of action for extortion.

“Extortion is the obtaining of property or other consideration from another, with his or her consent, or the obtaining of an official act of a public officer, induced by a wrongful use of force or fear, or under color of official right.” (Pen. Code, § 518.) “‘Every person who, with intent to extort any money or other property from another, sends or delivers to any person any letter or other writing, whether subscribed or not, expressing or implying, or adapted to imply, any threat such as is specified in Section 519, is punishable in the same manner as if such money or property were actually obtained by means of such threat.’ (Pen.Code, § 523.)’” (Flatley, supra, 39 Cal.4th at p.326.) “Fear, such as will constitute extortion, may be induced by a threat of any of the following: [¶] 1. To do an unlawful injury to the person or property of the individual threatened or of a third person. [¶] 2. To accuse the individual threatened, or a relative of his or her, or a member of his or her family, of a crime. [¶] 3. To expose, or to impute to him, her, or them a deformity, disgrace, or crime. [¶] 4. To expose a secret affecting him, her, or them. [¶] 5. To report his, her, or their immigration status or suspected immigration status.” (Pen. Code, § 519.)

Here, the complaint alleges that “[a]s part of the Michael I. Kim statement of March 17, 2022, and RSM statement of May 4, 2022, Unity and Ticor acted as the knowing agents of RSM, in enforcing the sequestering of aforementioned $1.5 million of Caroline Lee’s monies.” (Complaint ¶ 74.) Further “[t]he so-called judgment liens identified in ¶ 15, ¶ 17 and ¶ 18, supra, were in fact not valid, owing to Code Civ. Proc. §§ 697.040 and 697.050; however, Michael I. Kim and RSM, with the assistance of Unity and Ticor, successfully threatened Caroline Lee and forced [Caroline] to part with the sum total for the two unwarranted, meritless $672,892.19 Bow Tie liens; that is, $1,345,784.38.” (Complaint ¶ 75.)

The only alleged threat constituting the alleged extortion that Ticor could have assisted with is that on March 17, 2022, RSM through its counsel Kim sent a “threat of an unwarranted and meritless $3 million lawsuit against [Plaintiff Caroline], she consented under duress to the May 4, 2022, Amended Escrow Instructions appearing under the letterhead of Escrow Officer Nancy Kim.” (FAC ¶ 72.) Defendant Ticor assisted this extortion as an agent of RSM by enforcing the sequestering of these funds. (FAC ¶ 74.) Thus, the sixth cause of action undoubtedly arises from the protected conduct of the March 17, 2022 Letter and the May 4, 2022 Demand.

Moreover, the opposition concedes that “[i]t is undisputed that the Defendant’s motion has satisfied the first-step burden, as artfully described in this court’s August 23, 2023, order (‘Order’).” (Opp. at p.2:1-2.)

For the second prong of the anti-SLAPP analysis, Plaintiff bears the burden of establishing a probability of succeeding on the merits. (See Kyle v. Carmon (1999) 71 Cal.App.4th 901, 907.) However, Plaintiff is “not required ‘to prove the specified claim to the trial court;’ rather, so as to not deprive the plaintiff of a jury trial, the appropriate inquiry is whether the plaintiff has stated and substantiated a legally sufficient claim.” (Whitehall v. County of San Bernardino (2017) 17 Cal.App.5th 352, 364.)

In opposition, Plaintiffs contend that they have demonstrated minimal merit by virtue of the absence of credibility of Defendant Ticor’s evidence. However, credibility is not an issue at the second stage of analyzing an anti-SLAPP motion.

At the second stage “‘[t]he court does not weigh evidence or resolve conflicting factual claims. Its inquiry is limited to whether the plaintiff has stated a legally sufficient claim and made a prima facie factual showing sufficient to sustain a favorable judgment. It accepts the plaintiff's evidence as true, and evaluates the defendant's showing only to determine if it defeats the plaintiff's claim as a matter of law.’ [Citation.]” (Wilson v. Cable News Network, Inc. (2019) 7 Cal.5th 871, 891, [italics added]; Monster Energy Co. v. Schechter (2019) 7 Cal.5th 781, 795 [“As discussed, at the second anti-SLAPP step, a court ‘does not weigh the credibility or comparative probative strength of competing evidence.’”].)

Here, Plaintiffs cite to various exhibits including the amended escrow instructions, (Plaintiffs’ Exh. 100.35), a preliminary title report by Defendant Ticor, (Plaintiffs’ Exh. 100.43), this Court’s August 23, 2023 Order, (Plaintiffs’ Exh. 101.005), the March 17, 2022 Letter, (Plaintiffs’ Exh. 100.068-100.069), and Plaintiffs response to the March 17, 2022 Letter, (Plaintiffs’ Exh. 104.006). Many of these exhibits are part of the complaint. In any event, none of Plaintiffs’ evidence shows that the challenged claim of extortion has merit. Regardless, even presuming that this evidence showed any merit to Plaintiff’s extortion claim against Ticor, the sixth cause of action for extortion fails as to Ticor for the reasons below.

The March 17, 2022 letter and continuing May 4, 2022 assertions are protected by the litigation privilege.

The 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.” (Flatley v. Mauro (2006) 39 Cal.4th 299, 323.)

“‘The usual formulation is that the [litigation] privilege applies to any communication (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 [has] some connection or logical relation to the action.’ [Citation.] The privilege “is not limited to statements made during a trial or other proceedings, but may extend to steps taken prior thereto, or afterwards.’ [Citation.]” (Action Apartment Assn., Inc. v. City of Santa Monica (2007) 41 Cal.4th 1232, 1241.) “[T]he litigation privilege was founded on defamation actions, and has been applied primarily to provide absolute immunity from tort liability for communications with ‘some relation’ to judicial proceedings.” (Feldman v. 1100 Park Lane Associates (2008) 160 Cal.App.4th 1467, 1494.) The Supreme Court has noted that it has previously “directed that section 47(b) be applied broadly to bar tort actions based on privileged communications, excepting only the tort of malicious prosecution.” (Hagberg v. California Fed. Bank (2004) 32 Cal. 4th 350, 358.) “The privilege applies to communications relative to the defense of an action as well as those relative to its filing and prosecution.” (Cabral v. Martins (2009) 177 Cal.App.4th 471, 485.) “The privilege is ‘absolute in nature, applying “to all publications, irrespective of their maliciousness.” ’ [Citation.]” (Optional Capital, Inc. v. Akin Gump Strauss, Hauer & Feld LLP (2017) 18 Cal.App.5th 95, 116.) “The litigation privilege protects even communication made with an intent to harm, so long as the communication is made in ‘relation’ to a pending/ongoing or genuinely contemplated judicial or other official proceeding.” (Geragos, supra, 88 Cal.App.5th at pp.1031–1032.) “ ‘The principal purpose of [the litigation privilege] is to afford litigants and witnesses [citation] the utmost freedom of access to the courts without fear of being harassed subsequently by derivative tort actions.’ ” (Action Apartment, supra, 41 Cal.4th at p.1241, [italics added].)

“In order for a prelitigation communication such as [Kim’s] demand letter to be privileged under Civil Code section 47, subdivision (b), it must ‘relate[ ] to litigation that is contemplated in good faith and under serious consideration.’ [Citation.]” (Malin v. Singer (2013) 217 Cal.App.4th 1283, 1301.) As noted above, the March 17, 2022 “demand letter was logically connected to litigation that was contemplated in good faith and under serious consideration when the letter was sent. The demand letter is therefore protected by the litigation privilege. Because a plaintiff cannot establish a probability of prevailing where the litigation privilege precludes liability [Citation], the requirements for striking the extortion claim under section 425.16 have been met.” (Id. at p.1302.) Moreover, the basis for liability against Ticor is its rendering of assistance with this March 17, 2022 demand letter. (Complaint ¶ 75.)

Thus, the litigation privilege applies to Plaintiffs’ tort claim against Defendant Ticor – i.e., the extortion claim – and Plaintiff cannot show a possibility of prevailing against Defendant Ticor based on this protected conduct.

Collateral Estoppel Bars Plaintiffs’ Extortion Claims against Defendant Ticor

Defendant Ticor further asserts a separate and independent ground why Plaintiffs fail to show minimal merit to their extortion claim against Ticor. Specifically, Plaintiff’s extortion claim against Ticor based on the March 17, 2022 Letter and May 4, 2022 statements is barred by res judicata because it has already been adjudicated that the liens against the Yorba Linda Property were valid. The Court agrees.

“‘Res judicata’ describes the preclusive effect of a final judgment on the merits. Res judicata, or claim preclusion, prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them. Collateral estoppel, or issue preclusion, ‘precludes relitigation of issues argued and decided in prior proceedings.’” (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 896.)

Issue preclusion applies only to issues that were actually litigated in the earlier matter; whereas claim preclusion extends to all legal theories, proofs, and demands for relief that might have been presented in the first matter, provided both suits assert the same cause of action. (Ferraro v. Camarlinghi (2008) 161 Cal.App.4th 509, 541, Fn. 21; Gottlieb v. Kest (2006) 141 Cal.App.4th 110, 148; Mycogen Corp. v. Monsanto Corp. (2002) 28 Cal.4th 888, 897; Burdette v. Carrier Corp. (2008) 158 Cal.App.4th 1668, 1687.) “Res judicata [claim preclusion] bars the relitigation not only of claims that were conclusively determined in the first action, but also matter that was within the scope of the action, related to the subject matter, and relevant to the issues so that it could have been raised” and includes ‘matters which were raised or could have been raised, on matters litigated or litigable.’” (Burdette v. Carrier Corp. (2008) 158 Cal.App.4th 1668, 1674-1675; accord Mark v. Spencer (2008) 166 Cal.App.4th 219, 229 [bars claims that parties had a fair opportunity to litigate].)

Claim preclusion applies as a bar to splitting a cause of action for partial, later litigation, or relitigation of the same cause of action based upon on another legal theory or associated with different relief, that could have been sought in the prior action. (Noble v. Draper (2008) 160 Cal.App.4th 1, 10; Hamilton v. Asbestos Corp., Ltd. (2000) 22 Cal.4th 1127, 1146.) Its purpose is “to preserve the integrity of the judicial system, promote judicial economy, and protect litigants from harassment by vexatious litigation.” (Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 829.)

The prerequisite elements for applying the doctrine to either an entire cause of action or one or more issues are the same: (1) A claim or issue raised in the present action is identical to a claim or issue litigated in a prior proceeding; (2) the prior proceeding resulted in a final judgment on the merits; and (3) the party against whom the doctrine is being asserted was a party or in privity with a party to the prior proceeding. (Ibid.)

As noted above, the March 17, 2022 Letter threatened legal action for damages that RSM would suffer if Plaintiff CSL did not resolve the liens on the Yorba Linda Property – which Plaintiffs claim were invalid – before the close of escrow. (Complaint ¶¶ 20, 69-76, Exh. E.) However, through the judicially noticed record, the validity of the liens against the Yorba Linda Property have been litigated and adjudicated against Plaintiffs. (RJN Exhs. A-E.)

On October 8, 2021, Defendant Bow Tie filed a lis pendens against the Yorba Linda Property. (RJN Exh. A.) On November 3, 2021, Plaintiffs moved to expunge the lis pendens and judgment liens on the Yorba Linda Property in Los Angeles Superior Court Case No. 21STCV35370. (RJN Exhs. B-C.) On February 2, 2022, the Court in Los Angeles Superior Court Case No. 21STCV35370 – presided by the Honorable Robert S. Draper – denied the motion to expunge the lis pendens and expunge the judgment liens on the Yorba Linda Property. (RJN Exh. D.) On June 15, 2022, the Court in Los Angeles Superior Court Case No. 21STCV35370 – presided by the Honorable Robert S. Draper – denied Plaintiffs motion for reconsideration of its February 2, 2022 order denying the motion to expunge the lis pendens and expunge the judgment liens on the Yorba Linda Property. (RJN Exh. E.)

Thus, an identical issue was raised and fully litigated in the Los Angeles Superior Court Case No. 21STCV35370 action -- the validity of the liens on the Yorba Linda Property. Plaintiffs were direct parties to the action, and the Court (the Honorable Robert Draper) has already decided the validity of these liens adversely to Plaintiffs. The Court’s findings in that case that the liens on the Yorba Linda Property – the basis for the March 17, 2022 letter and May 4, 2022 assertions – were correct and valid are binding against Plaintiff. Accordingly, the sixth cause of action for extortion against Defendant Ticor fails as a matter of law because the March 2022 and May 2022 correctly noted that Plaintiffs failed to disclose valid liens against the Yorba Linda Property.

Notably, the only basis for Plaintiff’s sixth cause of action for extortion against Defendant Ticor is the protected activity discussed above. The sixth cause of action does not include any allegations of other wrongdoing by Defendant Ticor, such as unprotected activity. Hence, the Court’s granting of Defendant Ticor Title Company of California’s special motion to strike Plaintiff’s claim of extortion against it is dispositive of the sixth cause of action against Ticor.

Based on the foregoing, Defendant Ticor Title Company of California’s special motion to strike is GRANTED.

The sixth cause of action for extortion against Defendant Ticor Title Company of California is stricken.

Defendant Ticor Title Company of California is to file a responsive pleading to the remaining claims against it within thirty (30) days of notice of this order.

[1] The Court refers to Plaintiff Caroline S. Lee by her first name only to avoid confusion because there are multiple parties with the same last name.

Superior Court of California

County of Los Angeles

Department 26